SGS QUALIFOR FOREST MANAGEMENT CERTIFICATION REPORT

Transcription

1 SGS QUALIFOR (Associated Documents) Doc. Number: AD 36A-10 Doc. Version date: 9 April 2010 Page: 1 of 53 Approved by: Gerrit Marais FOREST MANAGEMENT CERTIFICATION REPORT SECTION A: PUBLIC SUMMARY Project Nr: Client: Web Page: Address: Country: 5085-MY Sabah Forestry Department Sabah Forestry Department Locked Bag 68, Sandakan, Sabah, Malaysia Malaysia Certificate Nr. SGS-FM-COC Certificate Type: Forest Management Date of Issue 18 Feb 2003 Evaluation Standard Date of expiry: 20 April 2013 SGS Generic Forest Management Standard (AD33) adapted for Sabah, Malaysia, version 02 of 5 June 2007 Forest Zone: Total Certified Area Scope: Location of the FMUs included in the scope Standard that the evaluation was conducted against Tropical 55,139 ha Forest Management of 55,139 ha of natural forests in FMU 19A, Deramakot Forest Reserve in Sandakan, Sabah, Malaysia, for the production of tropical hardwood logs. Sandakan, Sabah SGS Generic Forest Management Standard (AD33) adapted for Sabah, Malaysia, version 02 of 5 June 2007 Company Contact Person: Frederick Kugan Sabah Forestry Department Address: Locked Bag 68, Sandakan, Sabah, Malaysia Tel: Fax Fred_kugan@sabah.gov.my Dates: SGS services are rendered in accordance with the applicable SGS General Conditions of Service accessible at SGS South Africa (Qualifor Programme) 58 Melville Road, Booysens - PO Box 82582, Southdale South Africa Systems and Services Certification Division Contact Programme Director at t forestry@sgs.com m/forestry

2 AD 36A-10 Page 2 of 53 Main Evaluation 29 Oct 2 Nov 2007 Surveillance March 2009 Surveillance March 2010 Surveillance Feb 2011 Surveillance 4 Date the current version of the report was finalised Copyright: 15 Feb SGS South Africa (Pty) Ltd All rights reserved

3 AD 36A-10 Page 3 of 53 TABLE OF CONTENTS 1. SCOPE OF CERTIFICATE COMPANY BACKGROUND Ownership Company Key Objectives Company History Organisational Structure Ownership and Use Rights Legislative, Administrative and Land Use Context Other Land Uses Non-certified Forests FOREST MANAGEMENT SYSTEM Bio-physical setting History of use Planning process Harvest and regeneration Monitoring processes SOCIO-ECONOMIC AND ENVIRONMENTAL CONTEXT Social aspects Environmental aspects Administration, Legislation and Guidelines CHANGES IN MANAGEMENT, HARVESTING, SILVICULTURE AND MONITORING PREPARATION FOR THE EVALUATION Schedule Team Checklist Preparation Stakeholder notification THE EVALUATION Opening meeting Document review Sampling and Evaluation Approach Field assessments Stakeholder interviews Summing up and closing meeting EVALUATION RESULTS Findings related to the general QUALIFOR Programme CERTIFICATION DECISION... 40

4 AD 36A-10 Page 4 of MAINTENANCE OF CERTIFICATION RECORD OF CORRECTIVE ACTION REQUESTS (CARs) RECORD OF OBSERVATIONS RECORD OF STAKEHOLDER COMMENTS AND INTERVIEWS RECORD OF COMPLAINTS ASSOCIATED DOCUMENTS (not part of the Public Summary) Please delete what is not relevant to this project: AD 20: AD 21: AD 26: AD 36-B: AD 36-C: AD 38: AD 40: Evaluation Itinerary Attendance Record Corrective Action Requests Evaluation - Observations and Information on Logistics Evaluation Information on Group Members Peer Review Report Stakeholder Reports Evaluation team CV s List of stakeholders contacted Complaints and Disputes Procedures for submitting complaints, appeals and disputes, and the SGS processing of such are published on This information is also available on request refer contact details on the first page.

5 AD 36A-10 Page 5 of 53 INTRODUCTION The purpose of the evaluation was to evaluate the operations of Sabah Forestry Department against the requirements of the QUALIFOR Programme, the SGS Group s forest certification programme accredited by Forest Stewardship Council. 1. SCOPE OF CERTIFICATE The scope of the certificate falls within the Tropical Forest Zone and includes one of Forest Management Units (FMUs) as described below. Description of FMUs: Description Ownership Area (ha) Longitude E/W Latitude N/S Deramakot Forest Reserve Sabah Forestry Department 55,139 ha 117 o 20 E 117 o 42 E 5 o 19 N 5 o 20 N Size of FMUs: Nr of FMUs Area (ha) Less than 100ha 100 to 1000 ha in area 1001 to ha in area More than ha in area 1 55,139 ha Total 55,139 ha Total Area in the Scope of the Certificate that is: Privately managed Area (ha) State Managed 55,139 ha Community Managed Composition of the Certified Forest(s) Area (ha) Area of forest protected from commercial harvesting of timber and managed primarily for conservation objectives Area of forest protected from commercial harvesting of timber and managed primarily for production of NTFPs or services 3,473 0 Area of forest classified as high conservation value forest 18,098 Area of non-forest managed primarily for conservation objectives Total area of production forest (i.e. forest from which timber may be harvested) Area of production forest classified as plantation 0

6 AD 36A-10 Page 6 of 53 Composition of the Certified Forest(s) Area of production forest regenerated primarily by replanting or copicing Area of production forest regenerate primarily by natural regeneration Area (ha) 0 55,139 List of High Conservation Values Description Forest areas having high biological and ecological values Watershed and areas with steep slopes Areas of ecological and economic significance to local communities Pristine jungle Notes Conservation of fauna (fresh water fishes such as Polian and Kalui, Crocodylus porosus, Elephas maximus, Pongo pygmaeus, Bos javanicus, Nasalis larvatus). Forest bordering other forest area forming contiguous forest. Location of salt licks. Areas above 25 degrees slope contiguous exceeding 2 hectares or rocky areas known as unloggable areas. Hunting ground or fishing sites Water supply Ecotourism and historical value Wildlife observation site Virgin forest area containing large trees. List of Timber Product Categories Product Class Product Type Trade Name Category Species Wood in the rough Logs of tropical hardwood Yellow seraya White seraya Red seraya Hardwood Shorea sp Selangan batu Hardwood Shore sp. Melapi Hardwood Shorea sp. Keruing Hardwood Dipterocarpus caudiferus Kapur Hardwood Dryobalanorps lanceolata Kembang semangkuk Hardwood Scaphium sp. Merbau Hardwood Koompasia Nyatoh Hardwood Palaquuim sp. Annual Timber Production Species (botanical name) Species (common name) Area (ha) Maximum Annual Sustainable Yield (m 3 ) Projected Actual Shorea leptoclados, Dryobalanops lanceolata, Dipterocarpus Keruing, selangan batu, seraya, obak suluk, White/red/yellow Seraya, keruing, kapur, 17,600 15,000

7 AD 36A-10 Page 7 of 53 Annual Timber Production Species (botanical name) Species (common name) Area (ha) Maximum Annual Sustainable Yield (m 3 ) caudiferus, Scaphium sp., Palaqiuum sp.. selanagn batu, merbau, nyatoh, kembang semangkok, melapi etc Projected Actual 1Totals 17,600 15,000 Approximate Annual Commercial Production of Non-Timber-Forest-Products Product Species Unit of measure Total units None Botanical Name Common Name) Lists of Pesticides Product Name Quantity Used Area of application MA SA1 SA2 SA3 SA4 MA SA1 SA2 SA3 SA4 None X X X X X X X X 2. COMPANY BACKGROUND 2.1 Ownership Deramakot Forest Reserve (DFR) is a gazetted Class II forest reserve within the Permanent Reserve Forest (PRFs) of the State of Sabah. The production forest area is under the management of Sabah Forestry Department, a state government agency. The original DFR consists of 55,083 ha within forest management unit 19 (FMU 19) which contains a total of 112,323 ha forest area. The remaining portion of FMU 19 comprise of Segaliud Lokan Forest Reserve, which is under different management. Recently an additional 56 ha has been gazetted as Forest Reserve, thus making the current total area for DFR is 55,139 ha. Location of the DFR is as illustrated below:

8 AD 36A-10 Page 8 of 53 The Sabah Forestry Department is responsible for forest management and exploitation activities within the State of Sabah. The primary piece of legislation relating to forestry in the State is the State Forest Enactment 1968 and amendments, which classify the Permanent Forest Estates into different categories as follows: Class I : Protection Forest Class II : Commercial Forest Class III : Domestic Forest Class IV: Amenity Forest Class V : Mangrove Forest Class VI : Virgin Jungle Reserve Class VII: Forest for Wildlife For management purposes, the Class II FRs in Sabah has been divided into 27 FMUs, of approximately 100,000 ha each FMU. These units essentially mean administrative districts decided based on its historical management, relationship to existing administrative districts, natural boundaries etc.. Long-term licenses have been issued to 10 licensees under Sustainable Forest Management License Agreement (SFMLA) which addresses the issue of security of tenure, which is an essential element for implementation of sustainable forest management. Under the system, the concessionaire takes responsibility for the full range of forest management activities, including management planning, silvicultural tending as well as harvesting operations. The Forestry Department would remain as monitoring and enforcement agency to ensure continuous compliance to the policy and legislative requirement. Management of Deramakot FR is currently being administered by a Deramakot District Forest Officer (DFO) assisted by an Assistant DFO. Resource inventory, pre-harvest planning and post harvest monitoring are conducted by trained Forestry Department staff while harvesting operation and silviculture treatments is contracted out.

9 AD 36A-10 Page 9 of Company Key Objectives Objective Commercial DFR will be managed under sound forest management practices in accordance with the FSC Principles and the biological, social and economic principles defined by the International Tropical Timber Organisation (ITTO), Malaysian Criteria and Indicators (MC&I), and in conformity with the existing State forest policies, environmental policies, legislation and regulations. Notes Every effort would be undertaken by the SFD to optimize economic returns to the State on a long-term basis by maximizing utilization, efficient use of raw materials from DFR, and good marketing strategies of DFR s ecotourism potentials. Social On the social aspect, the SFD would continue to provide job opportunities and socio-economic development activities, particularly to the local communities living adjacent to DFR, so as to improve their living standard. Environmental The SFD would continue to demonstrate to all relevant stakeholders, national, and international clients, on its efforts towards quality environmental management in DFR. Our internal and external auditors shall monitor this. The SFD would maintain and enhance the high conservation value forests (HCVF), biodiversity, wilderness, soil, and water resources that are ecologically justified, technically and financially feasible within the framework of the SFD s regular operations. The SFD would escalate research and development (R&D). 2.3 Company History DFR and areas around it were virgin forest until the mid 1950s after which the area was been logged several times. A portion of the area bordering the FMU has been converted to oil palm plantation. A significant portion of the forests in DFR is considered to be in poor quality due to repeated logging since 1980s. Conventional logging commenced in DFR in 1956 under the Special License of United Timbers. The Company ceased operations in 1976, but at the same year, another license was issued to Seranum Sdn. Bhd. covering an area of 945 ha. In the following year, another area of 1,204 ha was given to Lai Fook Kim (Brothers). By the end of 1979, there were 5 Special Licenses issued in DFR, which covered approximately 16,914 ha. Elopura Maju was given the balance of virgin forests at the northeastern part of DFR in In 1987, a Special License was issued to Abadi Mewah Sdn. Bhd., and an annual license to Syarikat Jaimi Sdn. Bhd. for relogging. The DFR is directly managed by the SFD as a model forest area under a sustainable forest management project with the German Technical Assistance programme (GTZ) and has been subjected to assessment by Qualifor Programme for certification under FSC. The area has been

10 AD 36A-10 Page 10 of 53 certified as responsibly managed since 1997 and re-certified in 2002 for another 5 year. Current forest management certificate (SGS-FM/COC-0065) will ends in February Organisational Structure DFR was under the jurisdiction of the Sandakan District Forestry Officer from 1995 to However, from 1999 onwards, DFR was placed under the Deramakot District Forestry Officer, a new DFO, based in Deramakot Base Camp. The current structure and composition of Deramakot District Forest Office is as follows: DISTRICT FORESTRY OFFICER ASSISTANT DFO SILVICULTURE Tending 1 Forest Ranger (FR) 6 General Worker (GW) FOREST ROADS Maintenance 3 Operators 6 GW HARVESTING Monitoring & Control 1 FR, 2 Foresters 4 GW Planning PROTECTION 1 Forester BALAT 3 GW 1 Boatman LININGKONG 2 GW ADMINISTRATION 1 GW 1 Driver STORE 1 GW Planting/Maintena nce 1 FR WORKSHOP 2 GW 1 FR 5 GW 1 Boatman GATEKEEPERS 2 GW 2.5 Ownership and Use Rights DFR has been administered as a forest reserve since 1961, and in 1984, it was re-constituted as part of the permanent forest estate as a Commercial Forest Reserve. gazetted under the State Forest Enactment The area is a Class II FR which is set aside for production purposes. DFR is under direct management of Sabah Forest Department who is the guardian and protector of forestry resources in Sabah State. The land area within DFR belongs to the State Government of Sabah. 2.6 Legislative, Administrative and Land Use Context Laws and regulations on forest legislation are the legal instruments, which are necessary in the implementation of the objectives of a forest policy. Forest legislation reflects the principles of sustainability in order to support implementation of forest policy. Management guidelines, on the other hand, provide advice and promote more extensive application of forest management practices. In this context, the following are the legal frameworks and management guidelines, which the SFD would refer to: Federal Constitution State Forest Policy, 1954 Forest Enactment, 1968 Forest Rules, 1969 Conservation of Environment Enactment, 1996 Parks Enactment, 1984

11 AD 36A-10 Page 11 of 53 Wildlife Conservation Enactment, 1997 Water Resources Enactment, 1998 Cultural Heritage (Conservation) Enactment, 1997 Biodiversity Enactment, 2000 Occupational Safety and Health Act, 1994 Land Ordinance, 1930 (Sabah Cap. 68) Labour Ordinance (Sabah ) Cap 67 Sustainable Forest Management Licence Agreement Environmental Quality Act, 1974 Native Court Ordinance, 1952 (Cap 86) Interpretation of the Native Ordinance, 1952 All Adats recognised and enforceable by the Native Courts, including relevant decisions of the Civil Courts Deramakot FR is classified as Permanent Reserve Forest (PFR) that is to be managed on sustainable manner. Its management and operation is subjected to multi-layers of regulations and guidelines established by the authorities. The management of Deramakot is being seen as a model for the management of other FMUs in Sabah. 2.7 Other Land Uses The whole DFR is a secondary forest which has been logged many times since 1950s. 2.8 Non-certified Forests Sabah Forestry Department is directly managing two more areas in Sabah which is currently under specific programme moving towards FSC certification. The Ulu Segama Malua forest management area and Tangkulap FR are two areas which is under direct management of the Sabah Forestry Department that are being prepared for certification in the near future. Other forest areas within Sabah has been divided into several Forest Management Unit and managed by private sectors who has to signed a sustainable forest management license agreement (SFMLA) making commitment towards responsible forest management. Sabah Forestry Department is the authority that regulates and monitor progress of each license holder towards achieving the commitment made. Sabah Forestry Department s policies are as follows: DFR will be managed under sound forest management practices in accordance with the FSC Principles and the biological, social and economic principles defined by the International Tropical Timber Organisation (ITTO), Malaysian Criteria and Indicators (MC&I), and in conformity with the existing State forest policies, environmental policies, legislation and regulations. The SFD would maintain and enhance the high conservation value forests (HCVF), biodiversity, wilderness, soil, and water resources that are ecologically justified, technically and financially feasible within the framework of the SFD s regular operations. The SFD would continue to demonstrate to all relevant stakeholders, national, and international clients, on its efforts towards quality environmental management in DFR. Our internal and external auditors shall monitor this. Every effort would be undertaken by the SFD to optimize economic returns to the State on a long-term basis by maximizing utilization, efficient use of raw materials from DFR, and good marketing strategies of DFR s ecotourism potentials. On the social aspect, the SFD would continue to provide job opportunities and socio-economic development activities, particularly to the local communities living adjacent to DFR, so as to improve their living standard. The SFD would escalate research and development (R&D).

12 AD 36A-10 Page 12 of FOREST MANAGEMENT SYSTEM 3.1 Bio-physical setting DFR consists of a secondary natural tropical forest with undulating topography. Floristically the forest belongs to the Parashorea tomentella/eusideroxylon zwageri forest type and dominated by species Shorea leptocladus, Dryobalanops lanceolata and Dipterocarpus caudiferous. The western border of Deramakot is bounded by Tangkulap Forest Reserve. The eastern border is the Segaliud Lokan Forest Reserve, also a part of FMU 19. A small portion of the northern boundary is bordering with an oil palm plantation while the southern area is bordering with state-land areas along Sg Kinabatangan, the longest river of Sabah. Apart from some small human settlements that are located in the vicinity and outside of DFR along Sg Kinabatangan, the forest areas are not inhabited. Kg Balat, located just outside the DFR along the Kinabatangan River is the closest human settlement. Geography & Soils: DFR is located on land with elevations of 200m rising to a maximum of 1,079m above sea level (a.s.l). A large part of the area is on elevation ranging from 250m to 700m a.s.l. The landforms are mainly undulating (71% of the area) with slopes varying from 6º to 24º. The higher elevation and steep slopes (>25º), which cover 5% of the area, are mostly located on the southeast and southwest of the reserve. The rest of the reserve (approx. 24%) is flat (< 5º slope). The geology of DFR is dominated by tertiary sedimentary formations. The most prominent rock types are red and purple silt (mud) and sand stone. Smaller patches of ultra basic rocks like serpentinite are also reported. The big valleys of the Rawog and the Lokan Rivers are made up of old alluvial deposits. Gravel and stone beds are found along the banks of both rivers to respectable depths. The soils derived from these rocks are infertile with limited stocks of plant-available nutrients. DFR is located on land with elevations of 200m rising to a maximum of 1,079m above sea level (a.s.l). A large part of the area is on elevation ranging from 250m to 700m a.s.l. The landforms are mainly undulating (71% of the area) with slopes varying from 6º to 24º. The higher elevation and steep slopes (>25º), which cover 5% of the area, are mostly located on the southeast and southwest of the reserve. The rest of the reserve (approx. 24%) is flat (< 5º slope). The geology of DFR is dominated by tertiary sedimentary formations. The most prominent rock types are red and purple silt (mud) and sand stone. Smaller patches of ultra basic rocks like serpentinite are also reported. The big valleys of the Rawog and the Lokan Rivers are made up of old alluvial deposits. Gravel and stone beds are found along the banks of both rivers to respectable depths. The soils derived from these rocks are infertile with limited stocks of plant-available nutrients. Acrisols comprise 91.1% in DFR while 6.9% are made up of Leptosols and other soil types. Leptosols found on steep slopes are shallow, limiting root penetration. Generally these soils are dry due to high rock content. The Soil Families found (Kapilit, Paliu and Lithosols) are among the most impoverished in terms of plant-available nutrients. More than 99% of the soils in DFR have less than 5,000 kg/ha of exchangeable macro-nutrients and can be classified as poor to very poor. Acrisols developed on old land surfaces and prolong weathering lead to a general loss of nutrients. Moreover, they are easily erodible. These two factors are the major serious limitations to any type of land management. Since Leptosols found on steep slopes limit root penetration, and they are dry due to high rock content, logging is restricted in these areas because erosion may wash away the already thin soil layer. Approximately 85% of the area is affected by erosion. More than 71% show only slight erosion with no formation of rills and gullies. However, the RIL logging adopted in DFR would reduce the occurrence of compaction in the area. Ecology: The lowland dipterocarp forest of DFR belongs to the Parashorea tomentalla/eusideroxylon zwageri Forest type dominated by Parashorea (20%), and its principal associate species are

13 AD 36A-10 Page 13 of 53 Shorea leptoclados, Dryobalanops lanceolata and Dipterocarpus caudiferus. Together, these four dipterocarps account for about 40% of the large trees (> 50 cm dbh). Evaluation of wildlife habitat in DFR is based on data gathered during the management inventory of the area. In general, DFR provides good wildlife habitats because 71% of its landscape is undulating with slopes 6º < 24ºand 24% is flat (< 5ºslope). This condition provides better habitat contiguity and long-term prospects for viable populations of wildlife in DFR. Elephants (Elephas maximus) and Tembadau (Bos javanicus) appear to use the generally flatter parts of north DFR and a small portion at the southern part especially near Kg. Balat. Elephant s range in the area extends from the Pinangah hills in the west through parts of the Tangkulap Forest Reserve (west of DFR), into Segaliud Lokan Forest Reserve (SLFR), stateland and the Lokan VJR (east of DFR). Most boundaries of these forest reserves to the north are shared with oilpalm plantations. Orangutans (Pongo pygmaeus), on the other hand, are fairly widespread in DFR but significantly higher in the southern part (disturbed habitat: stratum 3). Nest concentration is low in strata 4 and 5 and is intermediate in the northern part (stratum 2). Nests are commonly built in Laran and Binuang trees, which grow along streams. Wildlife surveys and monitoring in DFR carried out by the Forestry Department shows that DFR harbored remarkable wildlife diversity, including significant populations of highly endangered species such as the orang-utan, the tembadau and the Asian elephant. It was reported that there were at least 75 species of mammals (excluding bats), 220 species of birds and over 100 species of reptiles, amphibians and fish. Among mammals, primate diversity is relatively rich. Orang Utans are found through out the area, while gibbons (Hylobates muelleri) are heard calling frequently. Two sympatric colobines (proboscis monkey and the maroon langur) are found in Sungai Lokan. The Asian elephant (Elephas maximus) occurs in the entire area and its range extends to the adjoining reserves. Tembadau (Bos javanicus) together with large populations of sambar deer (Cervus unicolor) and bearded pig (Sus barbatus) occur in the flat areas where grass is more prolific. The most common large carnivore is the Malay sun bear (Harlctos malayanus). Clouded leopards are also found in DFR. Small carnivore diversity found in DFR includes the leopard cat, marbled cat, Malay badger, yellow-throated marten, several species of civet and smooth otters. Six species of hornbill found in Sabah are also found in DFR. Large flocks of rhinoceros hornbill (Anthrococeros coronatus) have been sighted. The Rawog River is part of the last undisturbed breeding grounds for the estuarine crocodile (Crocodylus porosus). In 1999, the SFD consultants (Dr. Isabelle Lackman-Ancrenaz and Marc Ancrenaz) carried out a reconnaissance survey in DFR to corroborate the above findings. Qualitative assessment was carried based on seven components (Footpath Monitoring, Night Roadside Monitoring, Riverside Monitoring, Saltlick Monitoring, Elephant Monitoring, Orang Utan Aerial Survey, and Opportunistic Observations). The results of the survey show that: Different cervid species living in DFR are mostly solitary individuals. However, it is possible to encounter groups of small size at certain places like natural mineral sources. They are most common in degraded habitats and gently sloping terrain. They are mostly seen along roads, skid trails and skyline corridors. The bearded pigs are widespread in DFR, and migrations occur according to fruit availability and season. Their population in DFR appears to be high. Tembadau population (< 50 individuals) in DFR consists of several small groups (females and their young: 5-10 individuals) and solitary males. They are attracted to natural saltlicks (up to 11 individuals together). A population of approximately 100 individuals of elephants exist in DFR. Groups usually contain between three and forty individuals. Groups split and merge, but usually contain one or more adult females with young of both sexes and various ages. A population of a few hundred Orang-Utans live in DFR. Significantly high number of nests was sighted in the southern part of DFR (disturbed habitat). This is because fruit productivity is higher in degraded habitats than in more intact forests. Orang-utan nest counts carried by the SFD with assistance from the Sabah Wildlife Department from 1999 to 2002 (based on aerial surveys) indicated that there was an increase of nest numbers from 1.4 individuals per km²in 1999 to 1.8 individuals per km²in 2002.

14 AD 36A-10 Page 14 of 53 Avifauna found in DFR is very rich and diverse. Globally threatened bird species found within DFR include hornbills, Storm s stock, Malaysian Peacock-pheasant, crested fireback, etc. Based on the survey results, it was reported that animal biodiversity in DFR is high compared to other similar habitats found in Sabah. 3.2 History of use DFR and areas around it were virgin forest until the mid 1950s after which the area was been logged several times. A portion of the area bordering the FMU has been converted to oil palm plantation. A significant portion of the forests in DFR is considered to be in poor quality due to repeated logging since 1980s. The DFR is currently managed by the SFD as a model forest area under a sustainable forest management project with assistance from the German Technical Assistance programme GTZ. DFR has been certified under Qualifor Programme demonstrating compliance FSC P&C requirement since 1997, the first FMU to be certified in Malaysia. Before the expiry of the 1 st term period, a reassessment was conducted in 2002 and with the expiry of certificate in February 2008, a second reassessment is scheduled in October-November Planning process In terms of management planning, the DFR is subjected to the following: 10 year forest management plan This is long term planning which is based on comprehensive resource inventory. For DFR, the long term planning was conducted through a cooperation programme between Sabah Forestry Department and the German Agency for Technical Co-operation (GTZ) which is carried under the Malaysian-German Sustainable Forest Management Project (MG-SFMP) which commenced in Through the cooperation, a Medium-Term Management Plan for the DFR covering period of has been produced. The management system being adopted is targeted at maintaining a high degree of species and structural diversity through natural regeneration, rehabilitation of degraded forest area, tending of the forest stands and low impact harvesting. Reduced Impact Logging (RIL) methods are used for harvesting operations. An annual allowable cut of 20,000 m3 was initially established based on simulated growth projections of timber inventory collated from 490 sampling plots using DIPSIM model. By limiting the AAC to 20,000 m3, it was anticipated that the forest would be able to achieve a target growing stock of 220 m3/ha in about 50 years. Mid-term Review Report A mid-term review is carried out after five years to re-evaluate the earlier planning. For DFR, a midterm review was carried out in 1999 by looking into data gathered to date comparing it with the current condition of the forest. The mid-term review has resulted in the revision of the AAC to 15,000 m3. Annual Work Plan Annually, a work plan is prepared, as part of monitoring of performance of the previous year, as well as planning for the following year. Harvest planning, infrastructure planning, silvicultural treatment planning as well as financial planning is made on annual basis. Comprehensive Harvesting Plan Prior to harvesting of a logging block, comprehensive harvest planning is developed. The CHP comprises : identification of productive area, a resource inventory of the productive area, identification of harvestable trees as well as infrastructure development. Harvesting methods that include skyline and tractor skidding are determined based on factors such as topography, existing roads, streams, etc.

15 AD 36A-10 Page 15 of 53 Monitoring Monitoring is continuously conducted during and after harvesting operation. A closing report is prepared for harvested areas. The report contains statistics of the harvest level, extent of roads and skid trails constructed, residual stand condition and environmental elements such as drainage etc. 3.4 Harvest and regeneration A Comprehensive Harvest Plan is developed through a system of an initial evaluation of the harvest compartment for basic stocking in relation to old skid trails. A basic plan is the developed on the net production area and method of harvesting and extraction (Skyline, Combination skyline / tractor, or tractor only). A 100% tree marking of harvestable trees are identified within cabling distance of the existing skid trials. New skid trails (if any) are proposed and aligned in the field. A map is developed identifying the production area, conservation areas (over 25 o slope), buffer zones, skyline corridors, roads, old skid trails, new skid trails, bridges, culverts, etc. All key forestry operations are covered by guidelines and standard procedures. Typically SFD uses either a combination system or tractor only system in harvesting compartments. A tree harvest list is compiled that include identification of route for extraction such as skid trail number or skyline corridor Silviculture treatment prescribed for the area is climber (liana) cutting, girdling to release future crop trees as well as enrichment planting. No chemicals are currently used in the system. The climbers are predominantly pioneer species which have grown to dominate the forest after pioneer logging. Enrichment planting is conducted in areas with poor stocking identified in the FMP. The FMP identifies approximately 3000 ha of areas within strata 1 & 2 to be planted within the first ten year. Contractors carry out silviculture treatments and rehabilitation planting. SFD is currently reevaluating the need for planting based on existing stocking in the compartments identified for planting in the FMP. 3.5 Monitoring processes Monitoring process of DFR occur at macro and micro level. At macro level, monitoring on the commercial and administrative level is conducted. These include monitoring of harvest level from each compartment, manpower utilisation, financial cost etc on annual basis. Results of the monitoring are tabulated in the annual report as well as annual working plan which form basis for further planning. At micro level, as part of RIL method, which emphasised on pre-harvest planning, proper implementation and post-harvest operation, monitoring is conducted daily for each logging block by SFD staff. Each skid trail is formally closed out as the contractor pulls out the final logs and water bars are constructed on sloping skid trails. A close-out report is prepared for each area when harvesting has been completed. The close-out report summarizes the actual field operations in post-harvest report that consists of the infrastructure developed in the area, list of trees felled and list of trees not felled etc. Damage level implicated in each block is also calculated. Monitoring on illegal logging by local communities along Sg Kinabatangan is conducted by a patrol team stationed on site. Monitoring of social elements is conducted in collaboration with a local NGO, PACOS, which conducted programme with the communities living in the proximity of the DFR. Wildlife monitoring is also conducted, for example aerial survey on the population of Orang-Utan is conducted in conjunction with aerial monitoring of the boundary to detect possible encroachment. Sightings of wildlife are recorded using special form to be completed by field staff during surveys and general field work. Pre-harvest planning is conducted by the SFD staff, including boundary survey and tree location mapping. Harvesting operation, re-planting programme and silviculture treatment is contracted out with supervision by the SFD staff. Maintenance of road is also sub-contracted out.

16 AD 36A-10 Page 16 of SOCIO-ECONOMIC AND ENVIRONMENTAL CONTEXT 4.1 Social aspects Male Number of own workers Total 44 Female Number of contract workers Total 80 Minimum daily wage for agricultural/forestry workers RM35.00 (about US$10.00) Infant mortality rates (under 5 years) per 1000 of live birth Proportion of workers employed from the local population (%) 100 % There are no villages located inside DFR. Villages are only located along the Kinabatangan/Millian River on the southern part of DFR. The social baseline surveys were carried out in 5 villages due to their close proximity with DFR. These villages are Kg Balat, Kg Desa Permai, Kg Tulang Tulang, Kg Tangkong and Kg Kuamut. Figure 5 shows the distribution of these villages. Kg Kuamut is the most populated village, possibly due to its long existence, since 1824 followed by Kg Balat, which has been in existence since The other three villages were established in the 1980s. Some of the villagers in Kg Desa Permai were ex-kg Pagar occupants, whose village is now abandoned. Almost all of the villagers are of the Sungai ethnic group. However, some Kadazan, Murut, Dusun, Bugis and Timor ethnic groups are also found, mainly through mixed marriages. The communities appear to adopt a one village-one religion concept. Islam is the major religion for Kg Balat, Kuamut and Desa Permai, while Kg Tangkong and Tulang-Tulang adopt Christianity. Education wise, only Kg Kuamut shows the highest literacy rate of more than 50%. The rest of the respondents in other villages scored less than 25%. The villagers are in majority, subsistence farmers. Only a few are working in government agencies because finding employment in government agencies has been difficult. Unemployment becomes more serious due to the absence of logging companies nearby. More and more youngsters and middle-aged villagers immigrate to towns looking for proper employment, resulting in an energydrain of the villages. The main economic activities of the local communities are timber salvaging or cultural harvesting, fishing and to a lesser extent, hunting, rattan collection, fruit and vegetables farming. Rattan is collected in DFR by the local communities in Kg. Balat and sold to a middleman. Fruit is a common perennial crop sold to a nearby market. Conceptually, all villagers would sell any perennial or annual crops available, but they are restricted by market accessibility.

17 AD 36A-10 Page 17 of 53 Figure 2: Location of Kampungs at the vicinity of DFR Village Number of Households Population Major Religion Year Established Ability to Read (%) Kg. Balat Islam 1920 <25 Kg. Tangkong Christian 1985 <25 Kg. Kuamut Islam Kg. Desa Permai Islam 1975 <25 Kg.Tulang-Tulang Christian 1973 <25 The local communities still depend on nearby forests to get their supply of timber, rattan, firewood, wild vegetables, fish, wild animals, wild fruits, medicinal plants and others. Primarily, they are for own consumption, except for timber and rattan. To these communities, the latter two forest products are essential for their life sustenance. Together with other home (e.g. bread, etc.) and farm (e.g. hill rice, corn, durian) products, they are sold to logging companies, SFD staff at Balat Forest Checking Station, Kg Kuamut or at Bukit Garam. On the average, the local communities in Kg. Kuamut and Kg. Tulang-Tulang own approximately 6.0 ha of land each, while those from the other 3 villages have less than 2 ha. However, all the local communities in Kg. Desa Permai have managed to secure Native Titles on their lands, whereas, about 18% and 5% of the villagers in Kg. Balat and Kg. Tulang-Tulang respectively, have managed to secure Native Titles on their lands. However, the villagers in Kg. Tangkong, are yet to get their land titles. Amongst the 5 villages, Kg. Balat is considered the most advanced village with most of the basic infrastructure available. Telecommunication wise, the village is very near the Balat Forest Checking Station, where a satellite telecommunication set is available. This village also enjoys clean and continuous gravity water supply from Compartment 112 nearby. Kg. Kuamut is the largest village and has the most number of Government offices. It is the center for Mukim Kuamut. It is the only village that has a clinic. Kg. Tulang-Tulang has the least infrastructure and is the poorest amongst all.

18 AD 36A-10 Page 18 of 53 Residents of Kg Desa Permai and Kg. Tulang-Tulang have been requesting SFD to repair the Karis-Karis road, which links the villages to the DFR Base Camp and Telupid/Sandakan. However, due to cost and operational priorities elsewhere, the SFD has not been able to re-establish the old road. River is the main mode of transportation and every household owns at least one small paddleboat. For a one-way trip to Bukit Garam (3 hrs by 30 HP boat from Kuamut), one has to pay RM RM50.00 depending on weight and the bulkiness of their goods. Renting a boat to Bukit Garam would cost RM RM The villagers are in majority, subsistence farmers. Only a few are working in government agencies because finding employment in government agencies has been difficult. Unemployment becomes more serious due to the absence of logging companies nearby. More and more youngsters and middle-aged villagers immigrate to towns looking for proper employment, resulting in an energydrain of the villages. 4.2 Environmental aspects As described earlier, DFR is a regenerating logged over forest important not only for continuation of timber supply but also for biodiversity conservation. It is home to a number of protected species such as Orang Utan, tembadau (wild cattle), elephant, sun bear, clouded leopard etc. Many other mammals (such as deer and pigs) and over 100 bird species occur. DFR is part of the larger continuous forest area with Segaliud Lokan (to the east), Tangkulap (west) and Malua (south), which together play significant roles in biodiversity conservation in the region. The forest is also part of Kinabatangan watershed, which is subjected to various conservation and social development programme. For large mammal populations, habitat contiguity in the form of natural forest cover is critical in determining the long-term prospects of viable populations. A rule of thumb of area required for large mammal population viability, for example, elephants, is approximately 70, ,000 ha. DFR is fortunate because it shares a common boundary with Segaliud Lokan FR (on the east) and Tangkulap FR (on the west), which provide better habitat contiguity. The RIL method, which is practiced in DFR, showed no significant impact on the reduction of the wildlife populations in DFR. This eco-friendly harvesting practice will be continued in DFR. However, more effective monitoring and controlling during logging operations will be carried out to ensure that the intensity of logging and harvesting method conforms with the prescriptions as prescribed in this plan. 4.3 Administration, Legislation and Guidelines Laws and regulations on forest legislation are the legal instruments, which are necessary in the implementation of the objectives of a forest policy. Forest legislation reflects the principles of sustainability in order to support implementation of forest policy. Management guidelines, on the other hand, provide advice and promote more extensive application of forest management practices. The following table lists the key national legislation, regulations, guidelines and codes of best practice that are relevant to forestry in the commercial, environmental and social sectors. This list does not purport to be comprehensive, but indicates information that is key to the forestry sector. Legislation and regulation State Forest Policy of 1986 Sabah Forestry Department Goals (issued 1989) Forest Rules, 1969 Forest Enactment, 1968 Sustainable Forest Management License Agreement (SFMLA) Long Term Timber License Agreement Conservation of Environment Enactment, 1996 Wildlife Conservation Enactment, 1997 Water Resources Enactment, 1998 Biodiversity Enactment, 2000 Notes

19 AD 36A-10 Page 19 of 53 Occupational Safety and Health Act, 1994 Land Ordinance, 1930 (Sabah Cap. 68) Labour Ordinance (Sabah Cap. 67) Sabah Forest Management License Agreement Environmental Quality Act, 1974 Native Ordinance, 1930 (Sabah Cap. 68) Native Court Ordinance, 1952 Guidelines and Codes of Best Practice o MC&I 2002; o RIL Operation Guide Book Code of practice for forest harvesting in Sabah, Malaysia dated March 2009 Notes 5. CHANGES IN MANAGEMENT, HARVESTING, SILVICULTURE AND MONITORING The following table shows significant changes that took place in the management, monitoring, harvesting and regeneration practices of the certificate holder over the certificate period. Description of Change No change in the management Sabah FD is making plan to use log fisher a modified excavator with long cable for harvesting in undulating areas. A new RIL guideline has been developed. Notes SURVEILLANCE 1 SURVEILLANCE 2 No change in the management. Log fisher has been used for harvest in one compartment. A new RIL guideline has been published for state wide implementation. SURVEILLANCE 3 The log fisher is for replacing the cable yarding system which was found to be technically difficult and costly. Cost for utilisation of logfisher is high. The management will used the machines in specific areas not for every compartment. SURVEILLANCE 4 6. PREPARATION FOR THE EVALUATION 6.1 Schedule DFR has been certified since 1997 and this is the 2 nd re-assessment of the area in view of expiry of the certificate in February The last surveillance visit was conducted in March Prior to re-assessment, key stakeholders were identified where an announcement on the reassessment were made and stakeholders letter were issued. 6.2 Team The table below shows the team that conducted the main evaluation and the independent specialist(s) that were selected to review the main evaluation report before certification is considered.

20 AD 36A-10 Page 20 of 53 Evaluation Team Team Leader Lead Auditor Social Specialist Trainee FM Auditor Notes Has a post graduate degree in environment and natural resource management, more than 15 years experience in forest conservation and environmental related field at international, regional and national level, more than 100 days of FSC auditing (including other schemes and chain of custody assessment), speaks local language (Bahasa Malaysia) and English fluently. Has a doctorate degree in forestry, more than 20 years experience in forestry and related field internationally, regionally or nationally, more than 100 days of FSC auditing (including CoC assessment), understand local language. Has a post graduate degree and undergoing a doctorate programme in sociology, at least 5 years experience in social research both in forestry and oil palm plantation at national and regional level. Has a Forestry Degree from local University, more than 15 years experience in forest operation and wood processing industry at national level, and is a lead CoC auditor under Qualifor Programme. 6.3 Checklist Preparation At present there is no FSC-endorsed national or regional forest management standard for Malaysia. The draft local standard was produced by incorporating elements of MC&I 2002 into the Qualifor checklist. MC&I 2002 is a considered as a local standard. Standard Used in Evaluation Effective Date Version Nr Changes to Standard SGS Qualifor: Generic Forest Management Standard (AD33) adapted for Sabah, Malaysia 5 June The revised standard incorporates indicators and verifiers from MC&I 2002 (Sabah) standard which has yet to be fully covered by the existing checklist 6.4 Stakeholder notification A wide range of stakeholders were contacted 6 weeks before the planned evaluation to inform them of the evaluation and ask for their views on relevant forest management issues, These included environmental interest groups, local government agencies and forestry authorities, forest user groups, and workers unions. Responses received and comments from interviews are recorded at the end of this Public Summary. 7. THE EVALUATION The Main Evaluation was conducted in the steps outlined below. 7.1 Opening meeting An opening meeting was held at Sabah Forestry Department Headquarters in Sandakan, Sabah. The scope of the evaluation was explained and schedules were determined. Record was kept of all persons that attended this meeting. 7.2 Document review A review of the main forest management documentation was conducted to evaluate the adequacy of coverage of the QUALIFOR Programme requirements. This involved examination of policies, management plans, systems, procedures, instructions and controls. 7.3 Sampling and Evaluation Approach

21 AD 36A-10 Page 21 of 53 A detailed record of the following is available in section B of the evaluation report. This section does not form part of the public summary, but includes information on: Sampling methodology and rationale; FMUs included in the sample; Sites visited during the field evaluation; and Man-day allocation. The audit team begin the re-assessment with an opening meeting with the Sabah Forestry Department personnel that include a briefing from the SFD on the progress with Deramakot FR forest management planning and its implementation. Planning documents (10 year plan, annual plan, comprehensive harvest plan etc) and the SOPs were reviewed together with results of harvest etc. Visits were made to the active areas being harvested and areas where silviculture treatment were carried out. The audit team also visited and held discussion with local communities to gauge effectiveness of social programmes conducted / undertaken by the Sabah Forestry Department. Sample plots were also visited as part of evaluation on implementation of growth measurement. To evaluate the Coc system, the audit team visited the main stumping point as well as evaluate Coc system implemented at the sawmill processing the residual logs from DFR. 7.4 Field assessments Field assessments aimed to determine how closely activities in the field complied with documented management systems and QUALIFOR Programme requirements. Interviews with staff, operators and contractors were conducted to determine their familiarity with and their application of policies, procedures and practices that are relevant to their activities. A carefully selected sample of sites was visited to evaluate whether practices met the required performance levels. 7.5 Stakeholder interviews Meetings or telephone interviews were held with stakeholders as determined by the responses to notification letters and SGS discretion as to key stakeholders that should be interviewed. These aimed to: clarify any issues raised and the company s responses to them; obtain additional information where necessary; and obtain the views of key stakeholders that did not respond to the written invitation sent out before the evaluation. Nr of Stakeholders contacted Nr of Interviews with NGOs Government Other MAIN EVALUATION SURVEILLANCE SURVEILLANCE SURVEILLANCE SURVEILLANCE 4

22 AD 36A-10 Page 22 of 53 Nr of Stakeholders contacted Nr of Interviews with NGOs Government Other Responses received and comments from interviews are recorded under paragraph 13 of this Public Summary. 7.6 Summing up and closing meeting At the conclusion of the field evaluation, findings were presented to company management at a closing meeting. Any areas of non-conformance with the QUALIFOR Programme were raised as one of two types of Corrective Action Request (CAR): Major CARs - which must be addressed and re-assessed before certification can proceed Minor CARs - which do not preclude certification, but must be addressed within an agreed time frame, and will be checked at the first surveillance visit A record was kept of persons that attended this meeting. 8. EVALUATION RESULTS Detailed evaluation findings are included in Section B of the evaluation report. This does not form part of the public summary. For each QUALIFOR requirement, these show the related findings, and any observations or corrective actions raised. The main issues are discussed below. 8.1 Findings related to the general QUALIFOR Programme PRINCIPLE 1: COMPLIANCE WITH LAW AND FSC PRINCIPLES Criterion 1.1 Respect for national and local laws and administrative requirements Being a government agency, Sabah Forestry Department has a register of all relevant laws and regulation and monitors internal and subcontractor compliance. There was no evidence of non compliance with laws and regulation. List of laws, regulation and international agreements pertaining to forestry and forest operation in Sabah are as follows: State Forest Policy of 1986 Sabah Forestry Department Goals (issued 1989) Forest Rules, 1969 Conservation of Environment Enactment, 1996 Wildlife Conservation Enactment, 1997 Water Resources Enactment, 1998 Biodiversity Enactment, 2000 Occupational Safety and Health Act, 1994 Land Ordinance, 1930 (Sabah Cap. 68) Labour Ordinance (Sabah Cap. 67) Sabah Forest Management License Agreement Environmental Quality Act, 1974 Native Court Ordinance, 1952 Criterion 1.2 Payment of legally prescribed fees, royalties, taxes and other charges