RSPO Assessment Report PUBLIC SUMMARY

Transcription

1 RSPO Assessment Report PUBLIC SUMMARY KL - Kepong Berhad, Jeram Padang Palm Oil Mill, Bahau, Negeri Sembilan, Malaysia. This public summary has been prepared in accordance with RSPO requirements and the information included is the result of a full RSPO assessment of the Mills and supply base as included in the scope of the certificate. Report prepared by: A. Senniah (Lead assessor). Certification decision made by: Gerben Stegeman. Control Union (Indonesia) Jl Kramat 3A, Cilandak Timur Jakarta Selatan Phone: winaryo@controlunion.com Control Union (Malaysia) S/B Persiaran Raja Muda Musa, Off Jalan Sg Berith, Teluk Gadong, 41100, Klang, Selangor. Malaysia. Phone / 1700 mduraisamy@controlunion.com Control Union Certifications. (Head office) Meeuwenlaan 4-6, P.O. Box AD Zwolle. The Netherlands. certification@controlunion.com Phone: Control Union Certifications is a member of the Control Union World Group - an international inspection and certification body. CU performs assessments and certification in many agricultural based fields such as FSC, RSPO, and Organic production, Sustainable Textile Production, Organic Exchange, Eurepgap, HACCP, BRC, GMP and GTP. CU is accredited by the Dutch Council of Accreditation (RVA) on the European quality standard EN for the inspection and certification of CU Organic program (according to the EU regulation 2092/91) and EUREPGAP program. When requested a copy of the accreditation certificate can be obtained from CU Public summary. RSPO. Malaysia Page 1 of 27

2 Contents page 1. Scope of the Certification Assessment National Interpretation used Assessment type. (estate and mill) Location map See Appendix A Location address of the mill and approximate tonnages certified. (CPO and PK) Description of supply base General description Location of the supply base including... 4 Control Union code for the certificate. Location address. GPS reference Statistics of supply base including... 4 Control Union code for the certificate. Area of oil palm. Mature area. Estimated annual FFB production in tonnes. Planting years. Replanting Cycle. 1.5 Organisational information/contact person Audit against the rules for partial certification Introduction Audit findings in relation to the rules for partial certification Date certificate issued and scope of certificate Assessment Process Certification body Qualifications of the assessment team Qualifications of the lead assessor Qualifications of the assessment team Assessment methodology General overview Assessment agenda including Assessment dates. Sites visited. Main activities. Total number of person days spent on site. 2.4 Stakeholder consultation Summary of how stakeholder consultation was organised List of National and International stakeholders consulted Date of next surveillance visit Assessment Findings Lead assessor s summary and recommendation for certification Summary of the findings by criteria Non conformity registers Issues raised during stakeholder consultation & company responses Certified organisation's acknowledgement of Internal Responsibility Formal sign-off of the assessment findings List of Abbreviation Public summary. RSPO. Malaysia Page 2 of 27

3 1. SCOPE OF THE CERTIFICATION ASSESSMENT. 1.1 National Interpretation used. The management of the Palm Oil Mill(s) and associated suppliers of FFB were assessed for compliance against the International RSPO criteria as interpreted and endorsed for Malaysia. 1.2 Assessment type. (Mill & Plantations). Palm Oil Mill and Plantations owned by KL - Kepong Berhad in Bahau Region. 1.3 Location maps Maps showing the location of the mill and plantations included in the assessment. Kindly refer to Appendix A Location of mill and approximate tonnages certified. (These figures exclude any output product from non-certified suppliers). Name of Mill Location address GPS reference Projected Annual output for 2011 (mt) FFB CPO Palm Kernel Jeram Padang Palm Oil Mill KM 12, Jalan Jelai-Rompin,72100 Bahau, Negeri Sembilan, Malaysia. 2 44' 6.4" N ' 30.6" E 261,052 56,126 13, Description of supply base General description. The certification unit and the supply base are the 9 estates that make up the KLK Bahau region, located near Bahau in Negeri Sembilan, Peninsular Malaysia. There are no plans to expand the land holding and therefore Principle 7 is not applicable to this assessment. All the 9 estates are owned by Kuala Lumpur Kepong Berhad and supplying FFB to the Jeram Padang palm oil mill. Kuala Lumpur Kepong Berhad owns and operates 20 palm oil mills for processing the crop from its 76 oil palm estates located in Malaysia and Indonesia, as well as the FFB that it purchases from small holders. Kuala Lumpur Kepong Berhad is a pioneering member of RSPO and has been actively involved in the Roundtable process from its inception. Kuala Lumpur Kepong Berhad is implementing a programme to achieve RSPO Certified Palm Oil for all its production. 4.1 Public summary. RSPO. Malaysia Page 3 of 27

4 1.4.2 Location of the supply base. SOU CU Name of Plantations Locations address. GPS references Code PO1 Batang Jelai Estate KM 7, Jalan Rompon-Jelai, Rompin, Negeri N E Sembilan, Malaysia. PO2 Gunong Pertanian KM 4, Jalan Simpang Durian-Bahau, Simpang N 03 4 E Estate Durian, Negeri Sembilan, Malaysia. PO3 Jeram Padang Estate KM 12, Jalan Jelai-Rompin, Bahau, Negeri N02 43 E Sembilan, Malaysia. PO4 Kombok Estate KM 4, Jalan Sg Gadut-Rantau, Rantau, Negeri N E Sembilan, Malaysia. PO5 Renjok Estate KM 17, Jalan Karak-Mancis, Karak, Pahang, N03 18 E Malaysia. PO6 Sungei Kawang KM 18, Jalan Karak-Temerloh, Lanchang, Pahang, N E Estate Malaysia. PO7 Tuan Estate KM 22, Jalan Karak-Mancis, Karak, Pahang, N 03 16' E Malaysia. PO8 Ulu Pedas Estate KM24, Jalan Seremban-Tampin, Pedas, Negeri N E Sembilan, Malaysia. PO9 Air Hitam Estate KM 18, Jalan Bahau-Temerloh, Bandar Sri Jempol, Negeri Sembilan. N E * The plantation consists of a group of estates and in the report, Estate is used because it is the registered name of that supply base Statistics of the supply base. CU Name Area of oil palm (ha) Projected FFB Planting years Replanting Code Oil Mature Immature Production Cycle (years) Palm (2011) (mt) PO1 Batang Jelai 1, , Estate PO2 Gunong Pertanian , Estate PO3 Jeram Padang 1,505 1, , Estate PO4 Kombok Estate 2,270 2,270-39, PO5 Renjok Estate /2001/ PO6 Sungei Kawang 1,788 1,788-33, Estate PO7 Tuan Estate , PO8 Ulu Pedas Estate , PO9 Air Hitam Estate 2, , Percentage of planted areas of different ages. CU Name Code Before PO1 Batang Jelai Estate PO2 Gunong Pertanian Estate PO3 Jeram Padang Estate PO4 Kombok Estate PO5 Renjok Estate PO6 Sungei Kawang Estate PO7 Tuan Estate PO8 Ulu Pedas Estate PO9 Air Hitam Estate Public summary. RSPO. Malaysia Page 4 of 27

5 1.5 Organisational information and contact person: Company name: KL Kepong Berhad Business address: 1, Jalan S. P. Seenivasagam, Ipoh, Perak. Group name if applicable: Not applicable. Office telephone: Contact person: Mr Sin Chuan Eng. Mobile telephone: Fax: Web site: RSPO membership number: [ Old membership number: (O)] 1.6 Audit against the rules for Partial Certification Introduction. Control Union Certifications awarded an RSPO certificate to the KLK (Sabah) Tawau Region in Sabah on 4th March 2009 and KLK (Sabah) Lahad Datu Region on 6th July The total area of oil palm audited and certified amounts to around 40,000ha of the KLK oil palm plantations. Site visits have been made to plantations in Kalimantan and Belitung Island and compliance with the rules for partial certification were noted. Again during this main assessment, meetings with the management representatives were carried out on the 21 st July 2011 in order to verify the rules for partial certification and time bound plan. The audit team was satisfied that the company conforms to the RSPO s requirements for partial certification as laid out in the Final RSPO Certification Systems document. Progress will be verified and reported in subsequent surveillance visits Audit team s findings in relation to the rules for partial certification. 1a. The organisation is a member of RSPO: KLK is a member of the RSPO. Membership number: [Old membership number: (O)] 1b. A time-bound plan for achieving certification of all relevant entities: The time frame laid out below is considered to be both challenging and realistic. General Name of plantations. Locations Time bound timetable for certification Compliance found. Compliance found. KLK (Sabah) Tawau Region East Malaysia Certified on 4th March 2009 KLK (Sabah) Lahad Datu East Malaysia Certified on 6th July 2010 Region KLK (Kekayaan POM) Peninsular Malaysia Audited. Report under peer review by RSPO. KLK (Jeram Padang POM) Peninsular Malaysia Audited. Report finalized. KLK (Kuala Pertang POM) Peninsular Malaysia December KLK Changkat Chermin POM Peninsular Malaysia December KLK Tanjung Malim POM Peninsular Malaysia December 2013 KLK Batu Lintang POM Peninsular Malaysia December 2013 KLK Gohor Lama POM Langkat, Sumatera December Utara KLK Padang Brahrang POM Langkat, Sumatera December 2014 Utara KLK Berau POM Berau, Kalimantan Timur December 2014 Mandau POM Riau, Sumatera Timur December 2014 Nilo POM Riau, Sumatera Timur December 2014 Tapung Kanan POM Riau, Sumatera Timur December 2014 Parit Sembada POM Belitung, Sumatera December 2014 Timur Steelindo Wahana Perkasa POM Belitung, Sumatera Timur December c. i. There are no significant land conflicts. Compliance found. Evidence: On site interviews with management and local stakeholders satisfied the audit team that there are no significant land conflicts. Further verification of documents conducted on 21 st July 2011 revealed that there are no land conflicts. 1c. ii. No replacement of primary forest or any area containing HCVs since November (Or 2007 Compliance according to National Interpretations). found. 4.1 Public summary. RSPO. Malaysia Page 5 of 27

6 Evidence: No replacement of primary forest or any area containing HCV since November This was also verified during the verification exercise on 21 st July 2011 by the CUC Senior Lead Auditor during the document inspection process. 1c. iii. No labour disputes that are not being resolved through an agreed process. Compliance found. No labour conflicts were noted. If any were to arise, it would be resolved through an agreed process. This was confirmed by interviewing relevant stakeholders from the labour union, workers representatives, staff, labour officers and managers. 1c. iv. No evidence of non-compliance with law in any of the non-certified holdings. Compliance found. Land records were inspected and a sample of documents was reviewed. The review demonstrated compliance with the law. Verification exercise took place on 21 st July 2011 and further confirmed that there are no disputes. 1.7 Date certificate issued and scope of certificate Name of Client: KL - Kepong Berhad. Client number: CU Certificate number: C817884CU-RSPO Certification Decision Date: 25 th September 2012 Issued by Control Union Group scheme: Certifications Address Meeuwenlaan BS Zwolle Telephone 0031 (0) Fax 0031 (0) certification@controlunion.com Website Scope Name of Mill: Jeram Padang Palm Oil Mill Scope (Summary of suppliers of FFB): PO1 Batang Jelai Estate PO2 Gunong Pertanian Estate PO3 Jeram Padang Estate PO4 Kombok Estate PO5 Renjok Estate PO6 Sungei Kawang Estate PO7 Tuan PO8 Ulu Pedas PO9 Air Hitam Projected mass balance CPO and PK: 56,126 tonnes and 13,052 tonnes Certificate registration code: CU-RSPO Type of certification: Single site: Group scheme: Certifier (contact person) Signature Gerben Stegeman. 4.1 Public summary. RSPO. Malaysia Page 6 of 27

7 2. ASSESSMENT PROCESS. 2.1 Certification Body. Control Union Certifications is a member of the Control Union World Group - an international inspection and certification body. CU performs assessments and certification in many agricultural based fields such as FSC, RSPO, and Organic production, Sustainable Textile Production, Organic Exchange, GLOBALGAP, HACCP, BRC, GMP and GTP. CU is accredited by the Dutch Council of Accreditation (RVA) on the European quality standard EN for the inspection and certification of CU Organic program (according to the EU regulation 2092/91) and EUREPGAP program. When requested a copy of the accreditation certificate can be obtained from CU. 2.2 Qualifications of the audit team Qualifications of the lead assessor: A. Senniah REQUIREMENT QUALIFICATIONS Compliance Post graduate qualification in human resource management with more than 10 years working experience in plantation. A minimum of post high school (post secondary school) training in either agriculture/forestry, environmental science or social sciences; At least 5 years professional experience in area of work relevant to the assessment (e.g., palm oil management; agriculture/forestry; ecology; social science); Training in the practical application of the RSPO criteria, and RSPO certification systems; Successful completion of an ISO 9000:19011 lead assessors course; A supervised period of training in practical assessmenting against the RSPO criteria or similar sustainability standards, with a minimum of 15 days assessment experience and at least 3 assessments at different organisations. More than 10 years working experience in plantation. Involved in RSPO auditing since April Fully trained in similar agriculture certification programmes such as RSPO SCCS, Global Gap, ISCC and GMP. Involved in RSPO assessment since April Member of CUC RSPO audit team. Involved in audits conducted in Malaysia and Indonesia. Completed ISO 9001:2008 lead auditor course in September Member of CUC RSPO audit team since April Involved in audits conducted in Malaysia and Indonesia since April 2009 in 8 different companies in Malaysia and Indonesia Qualifications of the audit team member. RSPO Requirement Assessor Qualification Compliance Fluent in main local A. Senniah Able to understand local language and languages and English. English. Muhd Jamalul Arif Able to understand local language and English. R. Sahathevan Able to understand local language and English. Gayan Mahesh Fluent in English language. Wejesiriwardana Edy Susanto Fluent in English language. Field working experience in the palm oil sector, or a demonstrable equivalent. A. Senniah Working experience in palm oil plantation. Involved in RSPO audits since April Muhd Jamalul Arif Bin Hamid Involve in RSPO auditing since November Auditing experience in GMP and Global gap. R. Sahathevan Working experience in palm oil plantation. Involve in RSPO auditing since May Gayan Mahesh Wejesiriwardana Auditing experience in similar programmes such as ISO 9001, GMP and Organic farming. Edy Susanto Involve in RSPO auditing since 4.1 Public summary. RSPO. Malaysia Page 7 of 27

8 Good agricultural practices (GAP), integrated pest management (IPM), pesticide and fertilizer use. Health and Safety assessment on the farm and in processing facilities. (For example OHSAS or occupational. Health and safety assurance system). Workers welfare issues and social assessment experience. (For example with SA8000 or related social or ethical accountability codes). Environmental and ecological assessment. (For example experience with organic agriculture, ISO or environmental management systems). November 2010 in Indonesia for the Scheme Smallholder and estate assessment. A. Senniah Working experience in palm oil plantation. Involved in RSPO audits since Muhd Jamalul Arif Bin Hamid April Involve in RSPO auditing since November Auditing experience in GMP and Global gap. R. Sahathevan Working experience in palm oil plantation. Involve in RSPO auditing since May Gayan Mahesh Wejesiriwardana Edy Susanto Auditing experience in similar programmes such as ISO 9001, GMP and Organic farming. Involve in RSPO auditing since November 2010 in Indonesia for the Scheme Smallholder and estate assessment. A. Senniah Working experience in palm oil plantation. Involved in RSPO audits since April Muhd Jamalul Arif Bin Hamid Involve in RSPO auditing since November Auditing experience in GMP and Global gap. R. Sahathevan Working experience in palm oil plantation. Involve in RSPO auditing since May Gayan Mahesh Wejesiriwardana Edy Susanto Auditing experience in similar programmes such as ISO 9001, GMP and Organic farming. Involve in RSPO auditing since November 2010 in Indonesia for the Scheme Smallholder and estate assessment. A. Senniah Working experience in palm oil plantation. Involved in RSPO audits since April Muhd Jamalul Arif Bin Hamid Involve in RSPO auditing since November Auditing experience in GMP and Global gap. R. Sahathevan Working experience in palm oil plantation. Involve in RSPO auditing since May Gayan Mahesh Wejesiriwardana Edy Susanto Auditing experience in similar programmes such as ISO 9001, GMP and Organic farming. Involve in RSPO auditing since November 2010 in Indonesia for the Scheme Smallholder and estate assessment. A. Senniah Working experience in palm oil plantation. Involved in RSPO audits since April Muhd Jamalul Arif Bin Hamid Involve in RSPO auditing since November Auditing experience in GMP and Global gap. R. Sahathevan Working experience in palm oil plantation. Involve in RSPO auditing since May Gayan Mahesh Wejesiriwardana Auditing experience in similar programmes such as ISO 9001, GMP and Organic farming. Economic issues. A. Senniah Working experience in palm oil plantation. Involved in RSPO audits since 4.1 Public summary. RSPO. Malaysia Page 8 of 27

9 Muhd Jamalul Arif Bin Hamid Gayan Mahesh Wejesiriwardana April Involve in RSPO auditing since November Auditing experience in GMP and Global gap. Auditing experience in similar programmes such as ISO 9001, GMP and Organic farming. 2.3 Assessment methodology General overview. The assessment was carried out in conformity with the procedures as laid down in the CUC RSPO Procedure Manual and the program manual for the assessor and certifier. During the assessment, the qualified CUC assessors used the RSPO standard as endorsed for Malaysia and recorded their findings. Palm Oil Mills, in general, have more than one estate as a supply base and it is normal that one estate (or plantation) is considered to be the main estate. This is normally the location for the opening and closing meetings and for the open stakeholder meeting held during a main assessment. Following the opening meeting the audit team conducted a field inspection of this main estate to include: Chemical stores. Storage. MSDS leaflets. Herbicide mixing areas. PPE. Ventilation. Security. Field inspections. Herbicide application programmes. Harvesting sites and efficiency. Fertilising operations. SOP s. Soil maps. Land preparation. Ground cover. IPM. First aiders and boxes. Ground cover. Soil erosion. Field observations of all operations. Worker interviews. OSH. Sexual, religious, racial harassment. Pay and contracts. Child labour. First aid. Awareness. Re-planting sites. Zero burn. HCV s. Identification. Management plans. Environmental Impact Assessments. Implementation. Riparian zones. Width. Current and future management. Non maintenance regimes. Water management. Water courses. Water monitoring. Road maintenance. Run off. Social amenities. Social Impact Assessments. Local communities. Contributions made. Employment opportunities. Social impacts. Complaints procedures. Work shops. Oil traps. Safe working environment. PPE. Diesel tanks. Environmental waste management. Line sites. Interviews with householders. Inspection of water discharge points. Water improvement plans. Waste disposal. Documentation review. Palm Oil mill audits include: Mill and workshop inspections. Documentation. Worker interviews. Mill. SOP s. Safe working environment. Gen sets. Walk ways. Signs. EFB. POME treatment. Emissions. Mass balance. Diesel tanks. PPE. Fire extinguishers. First aiders and boxes. Fuel and water usage. OSH. Training. Management structure. First aiders. Full document review. Completion of the checklist. Review and documentation of evidence. All aspects of RSPO P&C s applicable. Worker interviews. OSH. Sexual, religious, racial harassment. Pay and contracts. Document review for the main estate and at least one POM: Principles 1 to 8. We considered each and every applicable RSPO principle and criteria for both the main estate and the mill. The client was asked to ensure that all documents, procedures, maps and records referred to in the standard are available. The list below is a summary of the records and management plans, including company policies, budgets, and management plans etc. Verification. Verification of implementation was done through field observations, workshop and chemical store inspections, worker and community interviews and mill inspections as summarised above. Sampling. Having considered principles 1 to 8 in detail for one estate and mill, where the many policies and SOP s is applicable to all estates and the mill being same, the sampling formulae is used to determine the number of estates which will be audited for site specific information and records. The audit team sought compliance by filed audits and by reviewing the following site specific information and records. 4.1 Public summary. RSPO. Malaysia Page 9 of 27

10 Records of requests and responses. 2.1 Evidence of compliance with relevant legal indicators. 2.2 The right to use the land can be demonstrated and is not legitimately contested by local communities with demonstrable rights 2.3 Records of negotiated agreements. 3.2 Annual replanting programmes. 4.1 Records of monitoring. 4.2 Fertilizer records. POME and EFB application records. 4.3 Soil maps and general description of the soils. 4.4 Protection of watercourses. 4.4 Water management plans. 4.4 Monitoring of effluent BOD. 4.4 Water usage in mill per tonne of FFB processed. 4.5 IPM plans. 4.5 Pesticide toxicity records. 4.6 Pesticide and herbicide records. 4.6 Disposal of agrochemical waste materials. 4.7 OSH plans. Gender committee etc. 4.7 Accident records. 4.7 OSH training records. 4.8 Training records. 5.1 Environmental Impact assessments and plans. 5.2 HCV / RTE species assessments and management plans. 5.3 Documented sources of pollution and management plans. 5.4 Energy use. 5.6 Plans to mitigate all polluting activities. 6.1 Environmental and social impact assessments and plans. 6.2 Communications and stakeholder lists. 6.3 Dispute resolution procedures. 6.4 Compensation payments for loss of customary rights. 6.5 Pay and conditions. 6.5 Housing and other social facilities. 6.6 Minutes of meetings. 6.7 Implementation of child policy. 6.8 Evidence of equal opportunities. 6.9 Proof of implementation of policy to protect woman FFB pricing mechanism and fair deals for suppliers Records of contributions to local communities. 7.1 Social and environmental impact assessments and management plans. 7.2 Soil suitability for new planting No replacement of HCV or primary forest. 7.4 Identification of fragile soils. 7.5 Confirmation of Free prior and informed consent. 7.6 Identification and compensation for the loss of customary rights. 7.7 Clear evidence of no burning for new planting. 8.0 Commitment to continual improvement in key areas. 4.1 Public summary. RSPO. Malaysia Page 10 of 27

11 2.3.2 Assessment agenda. Date Location Main activities 22nd May KLK Bahau Travelling by auditors to location (Sunday) 23rd May 2011 (Monday) Jeram Padang POM Opening meeting. Jeram Padang POM Chaired by the audit team leader. Introduction by team leader. Presentation by respective managers. Presentation of Oil Mills source of FFB by respective manager. Jeram Padang POM Jeram Padang Palm Oil Mill Audit. 24th May 2011 (Tuesday) Gunong Pertanian Estate Jeram Padang Estate Jeram Padang Estate Ulu Pedas Estate Kombok Estate Mill inspection and Document audit include the auditing of: Workshops Stores POME and EFB management Housing Workers interview Environmental issues Water treatment Store OSH. Safe working environment. SOPs. Document audit Field operations and Document Audit include the auditing of: Chemical stores. The storage. MSDS leaflets. Herbicide mixing areas. PPE. Ventilation. Security. Field inspections. Herbicide application programmes. Harvesting sites and efficiency. Fertilising operations. SOP s. Soil maps. Land preparation. POME. EFB. Ground cover. IPM. First aiders and boxes. Ground cover. Soil erosion. Field observations of all operations. Worker interviews. OSH. Sexual, religious, racial harassment. Pay and contracts. Child labour. First aid. Awareness. HCV s. Identification. Management plans. Environmental Impact Assessments. Implementation. Riparian zones. Width. Current and future management. Non maintenance regimes. Water management. Water courses. Water monitoring. Road maintenance. Run off. Social amenities. Social Impact Assessments.Medical. Local communities. Contributions made. Employment opportunities. Social impacts. Complaints procedures. Work shops. Oil traps. Safe working environment. PPE. Diesel tanks. Environmental waste management. Line sites. Interviews with householders. Inspection of water discharge points. Water improvement plans. Waste disposal Open stakeholder meeting at Jeram Padang Estate (Any issues raised during the open stakeholder meeting is discussed separately with the management) Field operations and Document Audit include the auditing of: Chemical stores. The storage. MSDS leaflets. Herbicide mixing areas. PPE. Ventilation. Security. Field inspections. Herbicide application programmes. Harvesting sites and efficiency. Fertilising operations. SOP s. Soil maps. Land preparation. POME. EFB. Ground cover. IPM. First aiders and boxes. Ground cover. Soil erosion. Field observations of all operations. Worker interviews. OSH. Sexual, religious, racial harassment. Pay and contracts. Child labour. First aid. Awareness. HCV s. Identification. Management plans. Environment Impact Assessments. Implementation. Riparian zones. Width. Current and future management. Non maintenance regimes. Water management. Water courses. Water monitoring. Road maintenance. Run off. Social amenities. Social Impact Assessments. Medical. Local communities. Contributions made. Employment opportunities. Social impacts. Complaints procedures. Work shops. Oil traps. Safe working environment. PPE. Diesel tanks. Environmental waste management. Line sites. Interviews with householders. Inspection of water discharge 4.1 Public summary. RSPO. Malaysia Page 11 of 27

12 points. Water improvement plans. Waste disposal. 25th May 2011 (Wednesday) 26th May 2011 (Thursday) 27th May 2011 (Friday) Tuan Estate Renjok Estate Sg Kawang Estate Ayer Hitam Estate Batang Jelai Estate Jeram Padang POM Jeram Padang POM Estate field operations and Document audit (As above). Field operations and Document audit (As above). Number of assessors participating: 5 Number of days spent for the assessment on site: 5 Total number of person days used for the assessment on site: 25 Preparation for closing meeting. Additional field visits and meetings with managers as necessary. Closing meeting Chaired by the audit team leader. Welcome and introduction by the team leader. Presentation of findings by the audit team. Questions and answers. Final summary by team leader. End of assessment. 2.4 Stakeholder consultation Stakeholder consultation Summary of how the stakeholder consultation was organised. Number of stakeholders included in the companies application form to CUC and who were 80 included in the stakeholder consultation process: Number of additional National and International stakeholders identified by the company and by - CUC and who were also included in the stakeholder consultation process: Number of responses received: 11 Notification of the planned assessment was also posted on the CUC and RSPO web sites in accordance with the RSPO requirements. All stakeholders were sent a letter which included full details of the company to be assessed, the names and addresses of the mill and the supply base, the dates of the assessment and the date time and place of an open stakeholder meeting. They were invited to make any comments and given the following bullet points to assist them. 1. Do you have any remarks on the RSPO standard? 2. What is your relation with the applicant? 3. Are there any plantation or mill management practices that affect you? 4. Do you consider any management is in conflict with the RSPO principles and criteria? 5. Do you have any suggestions for management? 6. Are you aware of any HCV in the plantations or in adjacent land? 7. Are you aware of any endangered or rare species? 8. Are there any adverse (or positive) effects on local communities? 9. Additional comments. 10. Are you likely to attend the open stakeholder meeting? 11. Do you have any comments about the assessment team and would you like to meet with them? 12. Do you have any comments of the applicant s management of any other plantations? Number of persons who attended the open stakeholder meeting: 52 Subsequently to the stakeholder meeting, the audit team discussed the issues raised with management representatives of the company and follow up visits to specific sites were conducted. (See 3.3 below) List of the National and International stakeholders consulted. Environmental NGO WWF Social Security Organisation (Socso) Environmental NGO Malaysia Nature Society Employee Provident Fund Women Aid Organisation Department of Occupational Safety and Health Tenaganita Department of Labour Wildlife Conservation Society Immigration Department National Union of Plantation Workers Department of Environment 2.5 Date of next surveillance visit: Within 9-12 months of 1 st certification 4.1 Public summary. RSPO. Malaysia Page 12 of 27

13 3. ASSESSMENT FINDINGS. 3.1 Lead assessor s summary and recommendation for certification: The lead assessor and one auditor conducted a pre assessment in April 2011, sampling a selection of estates and mill which make up the KLK Jeram Padang Certification unit. This assessment was conducted by using the RSPO P&C standards as part of gap analysis. Areas for improvement were identified for the management to execute before the main assessment. Since the pre-assessment, it was noted that the managers have implemented the following improvements: Identified all water courses and riparian zones both on maps and on the ground. Implemented a non maintenance regime in the identified riparian zones. Introduced monitoring of water entering and leaving the estates at key points. Identified the need for and implemented improvements to the linesite waste water discharge points. Improved ventilation in chemical stores. Combined various OSH documents. Installed contained concrete areas in workshops with oil traps. Made significant improvements to ensure safe working environments. Ensured that all workers are fully informed as to policies and procedures that may affect them. The stakeholder announcement was posted on the RSPO website for 30 days prior to the main assessment and it offered stakeholders the opportunity to give feedback and comments. Up to the time of finalising this public summary report, there was a report commissioned by a NGO called EIA, regarding the company s operations in Indonesia, for destroying the peat forest and claiming that PT. Menteng was operating without a plantation business permit and had cleared the land and carried out open burning. CUC took this report as a formal query by the stakeholder and conducted verification audit on 21 st July This verification was carried out by the CUC Senior Lead Auditor and CU Malaysia Managing Director with the management team from KLK represented by the Sustainability Department General Manager and his team. The verification revealed that the concession area is out of the moratorium area and the peat depth is within the legal classification of peat allowable. Also it was found that KLK has the necessary permits for oil palm development and no open burning was carried out. So, with this, all allegations made were based on misleading and false information and cannot be upheld. Since there were no additional issues, and with the closure of the allegations, it was concluded that the RSPO certification process would not be affected. A separate session on stakeholders consultation meeting was held between the CUC auditors and the stakeholders without the presence of the KLK management representatives on 24 th May This stakeholders' consultation was extensive and informative. It was attended by 52 stakeholders comprising of representatives from government officials, Village Heads, surrounding communities, state workers union representative and operating units worker union representatives. No complaints or grievances were raised. Positive comments were received during the stakeholder meeting. Subsequent to the stakeholders meeting, the surrounding communities were visited and interviewed to capture more feedback from the stakeholders. There were neither grievances nor complaints received from the communities during the interviews. The feedbacks from the stakeholders were presented to the management and this has been summarised in section 3.4 below. The Jeram Padang Palm Oil Mill and the supply base estates have demonstrated compliance with all applicable laws and regulations that are relevant to the respective estate and mill operations. Evidence of compliance with the regulations including permit requirements, regulations on environmental, worker issues and tax payment inspected during the audit. The evidence is well documented and maintained. It is summarised in section 3.2 below. There is clear commitment from the KLK Management team to embrace RSPO P&C at all levels of Management. The assessment team finds that field operations, ground cover and soil management, IPM measures, soil erosion control and the replanting sites are in compliance with RSPO s requirements and follows good agriculture practices. The Palm Oil Mill demonstrated a safe working environment and staffs are qualified and able to implement RSPO requirements. The workers social benefits extended to their families and dependents. Worker interviews and focus group discussions went smoothly and this reflects the stability and well-being of the workforce. There were no complaints or grievances highlighted by workers and stakeholder during the interview or meeting. It is therefore the recommendation of the lead assessor that: A certificate of compliance is awarded. Signed: Name: A. Senniah Date: 27th July Public summary. RSPO. Malaysia Page 13 of 27

14 3.2 Summary of the findings by criteria: Findings: Comments: Compliance All records of meetings, requests for information and responses are maintained as per stakeholder consultation log book/requests and response log book. Each book also contains an example of how to handle and record a request. 1.1 Records of all requests for information are maintained. Records of responses to those requests are maintained and the action taken, dates and persons involved and found to be timely. The above records are maintained for a minimum period as defined by the company. 1.2 Public documents are available and include legal, social and environmental documents and contain current and past FFB prices. The process and outcome of any compensation claims are documented and are also made publicly available as applicable. Commercially sensitive documents were available as verified by the audit team. 2.1 Clear compliance with the law in all areas sampled. Good systems in place to track and implement changes in the law. The laws affecting the oil palm industry are listed and available to all managers. 2.2 Land titles / country leases for all properties in accordance with the law of the land. Legal boundaries are identified and confirmed on site during field visit. The company has mechanism for the resolution of conflicts and where there have been disputes; there is proof of progress in an acceptable manner to No restriction as to the documents that was publicly available with the exception of confidential commercial information. Publicly available documents are Land Titles/user rights, Plans and impact assessments relating to environmental and social impacts, Pollution prevention plans, Details of complaints or grievances, Negotiation procedure, Continuous improvement plans. The company hires all staff accordingly. There is no compromise when it relates to the competency of the staff that might lead to jeopardizing the company position. Meaning, the staff at each relevant department have the relevant qualifications. RSPO Applicable Laws and Regulations. No evidence of non-compliance to all laws and regulations. i.e. OSHA regulation 1994 (Act 514), Factories regulation (Act 139), National land code (Act 1965), Environmental Quality Act, Pesticide Act, Industrial relation Act, Solid waste management, Employment Act 1955 (act 265), workers Minimum Standard of Housing and Amenities Act 1990, Workmen compensation Act 1952, Trade Union Act 1959, Land Acquisition, Children and young person (Employment) Act 1966, Employee Social security Act, Estate Hospital Assistant (Registration) Act 1965, Immigration Act 1959/63 (Act 155), land conservation Act 1960, MPOB Act, Petroleum (Safety Measures) Act 1984, Police Act 1952 to appoint Auxiliary Police, Protection of wild life Act 1987, Road Transport Act 1987, Building Act 1974, Wages council Act 1947, Water Act 1929 to protect waterways; 26 permits and licenses are there for mills. MDC Publishers Sdn Bhd sends out periodical revisions on laws if any and follow-up are carried out by staff. Beside this, the Head Office will track any changes in law and keep all estates informed thorough an internal circular and memorandums. Land titles inspected for all estates and the mill. Boundary stones and markers checked and verified in the field. Copies of land titles are held on file. All land use entitlements were checked and comply with the term. i.e The said land is demised herein expressly and only for the purpose of cultivation of oil palm and/or an agricultural crop of economic value. And Special terms and conditions: The said land is 4.1 Public summary. RSPO. Malaysia Page 14 of 27

15 all parties. Land acquisition mainly from the government. 2.3 There is no land encumbered by customary rights. The Land was originally owed by the government. Copies of land titles confirm this. 3.1 The company has a documented working plan that covers a minimum period of 5 years; projecting out from the date of the assessment. It includes crop yield projections, OER trends, costs and income. There is a replanting programme projected for a minimum of 5 years. Both of the above are updated on annual basis. 4.1 The company has generic SOP s, which are up to date and covers all plantation and mill activities from seedling to the despatch of CPO and PK or PKO. Detailed and comprehensive records reflecting annual monitoring was available. The records of operational results are covered by the monitoring records. 4.2 The company has records of regular soil, leaf and visual field inspection by the agronomist. Leaf analysis is conducted on an annual basis to determine fertiliser requirement. All fertiliser programs are well planned, implemented, and recorded. Legume cover crop is used to minimise impact of bare soil. EFB application to areas determined by the foliar analysis. This will be carried out by AAR recommendations after their analysis. POME is used for land application. Fertiliser application records are comprehensive as per recommendations. 4.3 Each estate has soil maps, which identifies fragile soils, if applicable. SOP in place for plantings on steep slopes which includes the use of terracing. Biomass recycling (see above) frond staking and silt pit used to control surface run off. There is a road maintenance programme but not comprehensive. No peat soil. SOP includes a documented water management programme. Other fragile soils have been identified and an SOP is in place for their management. expressly and only for the Palm Oil Mill. The GPS maps clearly identify the boundary stones and the boundary stones and markers were physically verified. Not applicable because there were no customary rights issues raised by the internal and external stakeholders during the open stakeholder meeting and during the visit of surrounding communities. Financial planning with a 5 year projection was checked and verified. Information including areas of mature and immature crops. Mt/ha yield of FFB. Five years replanting plan was also available. The SOP s and records sighted cover: Group Policy for all estates and the Agriculture of Oil Palm. Issued to the estates on 20th August Also addresses all best practices. As required, updates are circulated and then included in the file and implemented. Sighted 40 SOP s covering all aspects of plantation management. Mill Management: SOP s for mills are the same. 13 operations stages from FFB reception on weighbridge to CPO despatch. Sighted the Oil palm Manuring recommendations 2010/2011 by Applied Agricultural Resources (AAR). The recommendations are followed and records maintained by field and date of application. Soil sampling is done once a year. Leaf sampling was also carried out to analyse and determine the soil and palm nutrient level. Based on these result and field visit by the Agronomist, final fertilizer recommendations are made. Zero burn policy. EFB application is carried out in accordance with the recommendations of the agricultural research department. Dry decanter Cake is used as soil conditioner. Actual BOD level for POME is monitored and as per required regulation standard of 5,000ppm. Sighted soil maps that show soil types which are predominantly alluvial. The SOP 9 covers Erosion control and details the actions to take to control erosion. In mature fields there are 8 specific action points and these are specific to all plantations. Most of the operating units were not having complete programme with detailed location, type of work and date. Culvert maintenance and road side drain upkeep were missing including housing site road maintenance and replanting area road upkeep. Probase road upkeep details in the programme were missing. A minor NC was raised under Planting of mucuna is practised, frond staking (minor NC under 4.3.3) 4.1 Public summary. RSPO. Malaysia Page 15 of 27

16 4.4 Watercourses (and wetlands) are identified on maps and management plans are in place for restoring riparian buffer zones. Water management includes the monitoring of all water courses as they enter and leave the estate(s). Water management plans also includes Drinking water analysis. BOD levels of effluent are monitored on a regular basis and below standard of 5000ppm. Water usage per tonne of FFB processed monitored in the mill. No drainage into protected areas. 4.5 The following were sighted with reference to the IPM System: A documented IPM system that was implemented. The monitoring of IPM used, which includes the training of staff and workers. The planting of beneficial plants. Record of pesticide use per ha. The monitoring of pesticide toxicity units. to stop surface run off, flat and accessible area is maintained with grass cutting at harvesting path and road side, no blanket spray, only selective and circle spray and treated with the right choice of chemicals. All estates have identified watercourses and the appropriate width of buffer zone is established (in accordance to guidelines by the Drainage and Irrigation Department) and the non-maintenance buffer zone is then implemented i.e. no fertiliser applications and spraying of agrochemicals within riparian zones. Water usage monitoring records are in place in the mill which shows the average use of 1.52 tonnes of water per tonne of FFB processed. Sighted a generic water management plan covering water source, construction of reservoir and water quality analysis, including the protection of water courses and wetlands. These plans also monitor water quality and usage. Piped water supply and emergency response plans were available to mitigate any drought. Although most of the operating units are conducting water analysis for drinking water it is noted that some of the operating units are not conducting the water analysis as per the Minimum Housing Standard requirement. A minor NC was raised under Sighted and verified evidence that the Integrated Pest Management and disease control systems were carried out. These include cultural controls, chipping and pulverizing of felled palms at the time of replanting. In addition, the use of biological controls was verified. Pests are control through pesticide chemical spraying after carrying out a census of pest attack at relevant locations. Monthly census for bagworm is carried out and threshold limit is 5% and if more than 5% of larva population, a specific chemical has been used to control the impact from bagworm. The rat damage census has a threshold limit of 5% and was verified the treatment of using Butik S, where more than 5% of FFB eaten, has been done. Also checked and verified the barn owl occupancy census and the rhinoceros beetle census at replanting areas and immature fields. Census results were mapped or tabled and documented. Pre and post treatment census to determine the effectiveness of each action was taken. Monitoring the owl occupancy rate shows that the occupancy is about 53%. Throughout all estates the use of beneficial plants such as Tunera subulata, Cassia cobanensis, Antigonon spp. are very evident that biological control were used as a preventive measures. Tunera were also extensively planted. Replanted sites are restructured to allow enough light for these plants. Leguminous cover crops were also well-established to suppress growth of noxious weeds. (Minor NC under 4.4.7) 4.1 Public summary. RSPO. Malaysia Page 16 of 27

17 4.6 Written justification for all agrochemicals used is available. All pesticides are officially registered. Records of all pesticides used in accordance with RSPO requirements with details of application but some operating units are not maintaining complete records. Minor NC is raised. Records show that the agrochemicals used are in accordance with product label recommendations for target species. Chemical stores are well ventilated and secured with MSDS leaflets and first aid kits readily available. All workers are trained in the use of agrochemicals and this training was recorded. Used chemical containers and other waste materials were stored in sheltered waste stores in a safe way and disposed of in accordance with laws and regulations. The use of WHO type 1a or 1b chemicals, such as paraquat are being demonstrably reduced. Annual medical checkups are conducted and recorded. Records and interviews confirm that no work with agrochemicals for breast feeding or pregnant woman is allowed. 4.7 The company has an OSH plan, which was being implemented in all estate offices and mills. OSH committees are identified and responsible persons for safety programs are included in responsibility charts. The company maintains records of all meetings with workers and minutes show that health, safety and welfare issues were included amongst other matters. Worker accident insurance was in place and up to date. Workers exposed to high risk were identified and records show that regular health examination takes place. Risk assessments include all identified areas of risk both in the plantations and mills with preventative measures and responsibilities. All workers have been trained in OHS and this was regularly updated. Records include photographic evidence and signed attendance sheets. The SOP 3 covers all the documented IPM for major pest, use of biological control, cultural control, surveillance, evaluation, and record keeping. Barn owl boxes have been erected at the rate of 1/10ha. Chemical stores at all estates and mills were inspected and found to be in compliance with requirements. Well ventilated. Locked. MSDS leaflets and first aid kits readily available. Also sighted warning notices in these areas. Pre-mixing takes place in bunded areas with shower facilities. Inspection of records, interviews with the workers and medical staff confirmed that annual checkups take place by registered OSH medical practitioner. Female workers are accompanied by female nurse and pregnant and breast feeding woman were assigned to other work not involving agrochemicals. All workers were given PPE by the company and confirmed by workers during interview with them in the field. The use of Paraquat is reduced by replacing gradually with glyphosate. Sighted the use of paraguat has been gradually reduced and the records of usage have been sighted in all the estates. However, observed some of the operating centres are not keeping complete records of application details records of other pesticide use in accordance with the RSPO requirements. For instance, the application requirement per hectare was missing. The updating of the application records was not carried out regularly. A minor NC is raised under Sighted the OSH Plan, which includes a training programme. Action plans with designated responsible person identified. All occupational hazards and risks have been assessed and identified. Verified guidelines on accident and emergency procedures. Accident records were analysed by the Safety executive on site and target set is zero. Only minor thorn prick cases noted. Accidents details reported to DOSH periodically. Safety measures explained to workers and included in all training. Also displayed on muster grounds. Interviews with workers confirmed knowledge of the plans and procedures and first aid training records were inspected and also confirmed by interview. Safe working environments observed in mills and places of work. Sighted the accident insurance policy that covers any accidents during travelling to work and during work related accidents. Fire fighting team available in estate and mills. Training has been provided by internal safety executives and external trainers. CHRA was conducted by qualified CHRA (Minor NC under ) 4.1 Public summary. RSPO. Malaysia Page 17 of 27