Roundtable on Sustainable Palm Oil 1st Surveillance Audit Report No: ASA1_14005

Transcription

1 Roundtable on Sustainable Palm Oil 1st Surveillance Audit Report No: ASA1_14005 Certification assessment against the Generic RSPO Principles & Criteria 2013 and RSPO Supply Chain Certification System November 2014 PT Gawi Makmur Kalimantan Jorong Palm Oil Mill Head Office: Gawi Building 4 th floor, Kuningan Office Park, Jl. Setiabudi Selatan Kav.16-17, South Jakarta, Indonesia Branch Office: Jl. Pramuka No. 16 RT 020, Sungai Lulut, Banjarmasin Timur Banjarmasin Province, Indonesia Date of assessment: August 3 5, 2015 Report prepared by: Mhd Fundy C Kurniawan (RSPO Lead Auditor) Certification decision by: Nyoman Susila (Managing Director TUV Rheinland Indonesia) Certification Body: PT TUV Rheinland Indonesia Menara Karya, 10 th floor Jl. H.R Rasuna Said Block X-5 Kav.1-2 Setia Budi Jakarta, Indonesia Tel: Fax:

2 1.0 Scope of 1st Surveillance Audit Generic RSPO Principle and Criteria Type of Assessment Certification Details Location and Maps Organizational Information / Contact Person Description of Supply Base Actual production volumes, tonnages and projected outputs Dates of Plantings and Replanting Cycles Area of Plantation (Total, Planted and Mature) Progress Against Time Bound Plan Compliance to Rules for Partial Certification Progress of associated smallholders or out growers towards RSPO compliance Approximate Tonnages Certified Recommendation for certification Date of certification issued and scope of certificate ASSESSMENT PROCESS Certification Body Qualifications of Lead Assessor and Assessment Team Assessment Methodology & Agenda Stakeholder Consultation and Stakeholders Contacted ASSESSMENT FINDINGS Summary of Findings Status of Previously Identified Non-conformities Identified non-conformances, corrective actions taken and auditors conclusions Description of Supply Chain Management System Noteworthy Positive Component Issues raised by stakeholders and findings pertaining to Issues CERTIFIED ORGANISATION S ACKNOWLEDGEMENT OF INTERNAL RESPONSIBILITY Date of Next Surveillance Visit Acknowledgements of Internal Responsibility and Formal Sign-Off by Client APPENDICES Appendix 1: Details of certificate Appendix 2: Certification Audit Plan Appendix 3 : List of Abbreviations Appendix 4 : Observations and Opportunities for Improvement Appendix 5: Attendant list of the stakeholder consultation meeting... 78

3 Page 3 of Scope of 1st Surveillance Audit 1.1 Generic RSPO Principle and Criteria 2013 The operations of the palm oil mill(s) and its supply base of FFB were assessed against the Generic RSPO Principle and Criteria 2013 & RSPO SCCS November Type of Assessment The certification assessment was carried out on 1 (one) mill i.e. Jorong Palm Oil Mill (POM) and 2 (two) estates i.e. West Estate (Kebun Barat) and Central Estate (Kebun Tengah) under PT Gawi Makmur Kalimantan Unit of Jorong,, Indonesia. 1.3 Certification Details The details of RSPO certification of PT Gawi Makmur Kalimantan Unit of Jorong area as per the table below Table 1: RSPO Certification details of PT Gawi Makmur Kalimantan Unit of Jorong RSPO Membership no. : RSPO Certificate no. : RSPO e-trace no. : RSPO_PO Date of first RSPO certificate & validity : until Date of 1st surveillance audit : July 3 5, 2015 Date of previous surveillance audit : This is 1st surveillance Date of revised RSPO certificate & validity (if applicable) : Not applicable CPO tonnages claimed : 51,332 ton PK tonnages claimed : 11,015 ton

4 1.4 Location and Maps Page 4 of 80 Figure 1: Location map of PT Gawi Makmur Kalimantan Unit of Jorong in Tanah Laut District, South Kalimantan, Indonesia PT Gawi Makmur Kalimantan Unit of Jorong Figure 2: Map of Estate PT Gawi Makmur Kalimantan Unit of Jorong

5 Page 5 of 80 Table 2: GPS locations for all estates and mills included in main assessment Name of mill / estate Jorong POM West Estate / Kebun Barat Central Estate / Kebun Tengah Location Damit Hulu Village, Batu Ampar Sub District, Tanah Laut District, Province Damit Hulu Village and Pemalongan Village, Batu Ampar Sub District and Bajuin Sub District, Tanah Laut District, Province Damit Hulu and Batalang Village, Batu Ampar and Jorong Sub District, Tanah Laut District, South Kalimantan Province GPS locations Latitude Longitude S E ,0 S ,6 E ,0 S ,0 E 1.5 Organizational Information / Contact Person Contacts details of the company are as follows: Company Name: Address: Contact Person: PT Gawi Makmur Kalimantan Head office: Gawi Building 4 th floor, Kuningan Office Park, Jl. Setiabudi Selatan Kav.16-17, South Jakarta District, DKI Jakarta Province, Indonesia Mill: Damit Hulu village, Batu Ampar Sub District, Tanah Laut District, Province Mr. Farid Makruf Telephone: farid.makruf@wingsagro.com 1.6 Description of Supply Base Table 3: FFB Supply Information for PT Gawi Makmur Kalimantan - Jorong Mill for 2014 and 2015 FFB Contributors Company owned estates FFB supplied Year 2014* FFB supplied Year 2015** Tones % Tones % Barat Estate 79, , Tengah Estate 114, , Sub Total I 194, , Smallholder Pamalongan Smallholder 410, , Damit Hulu Smallholder 1, , Sub Total II 2, , Other estate in Gawi Group PT Sentosa Sukses Utama 9, , Sub Total III 9, , Out grower: 80, ,

6 Page 6 of 80 FFB Contributors FFB supplied Year 2014* FFB supplied Year 2015** Tones % Tones % Total 287, , Note: *) January to December 2014 (after grading) **) January to July 2015 (after grading) 1.7 Actual production volumes, tonnages and projected outputs. Table 4: Certified tonnages claimed, certified tonnages purchased or sold, total and projected CPO and PK production from PT Gawi Makmur Kalimantan Jorong Mill Realization production for 2014 Amount (MT) CPO PK Certified tonnages claimed* 51, , Certified tonnages sold under RSPO SCCS system** - - Certified tonnages purchased - - Actual Production for 2014 owned estate 43, , Actual Production for 2014 from all (Owned estate, smallholder and out grower (Jan Dec) 65, , Conversion Factor year 2014 (average) Projected output for 2014 owned estate (budget) 49, , Actual production for 2015 (Jan July) during 1st Surveillance audit 60,817,62 13,751,90 Projection for 2015 Projected FFB for 2015 from all (own estate, smallholder and out grower) Projected FFB for 2015 from own estate (budget) 205, Projected output for 2015 own estate (budget) 45, , Projected output for 2015 from all (own estate, smallholder and out grower) 70, , Conversion Factor year 2014 (average) Note: *) Based on projection of production year 2015 from company owned estates only **) All dispatch in year 2014 for CPO and PK under claim RSPO SCCS system (null) #Others note: 1. In time period from November 2013 until October 2014, company sold 77, MT of CPO under ISCC certification system.

7 1.8 Dates of Plantings and Replanting Cycles Page 7 of 80 The company follows a replanting cycle of years. Information on the dates of plantings is as per the table below. Table 5: Age and year of plantings of company estate supplying to PT Gawi Makmur Kalimantan Unit of Jorong Age & Year of Plantings Period of January-December 2014 Oil palm planted area at each estate (ha) Kebun Barat Kebun Tengah Total 0 5 ( ) ( ) 2, , ( ) , , ( ) , , TOTAL , , Period of January-July ( ) ( ) 2, ( ) 1, , ( ) , , TOTAL 3, , , Company has no replanting plan because all plantation in PT GMK Jorong Mill Unit still young, as seen on the above information. There are some different hectare planted area between 2014 and 2015, this condition because thinning out activity from the estate, because when the planting process, stand per hectare applied was to closed. 1.9 Area of Plantation (Total, Planted and Mature) Table 6: Oil Palm Planted Area Summary, FFB Production and Average yield/ha for PT Gawi Makmur Kalimantan Unit of Jorong Estate Name Total area (Ha) January December 2014 Barat Estate Tengah Estate Oil Palm Planted area (Ha) Mature (Production) area (ha) Immature (Nonproduction) (Tones) FFB Production Area (ha) Average yield/ ha (tones/ha) 4, , , , , , , , TOTAL 9, , , , January July 2015 Barat Estate 4, , , , Tengah Estate 5, , , , TOTAL 9, , , ,

8 Page 8 of 80 Table 7: Land use data for PT Gawi Makmur Kalimantan Unit of Jorong Estate Name Total Area (ha) Oil Palm Planted Area (ha) HCV * (Ha) Land used for other purposes (ha) Housing, Road, Drainage, Nursery Not Plant able area Mill Other ** January December 2014 Barat Estate 4, , , Tengah Estate 5, , TOTAL 9, , , Period of January-May 2014 Barat Estate 4, , , Tengah Estate 5, , TOTAL 9, , , Note: *) Not separate with hectare statement **) Other such as land clearing 1.10 Progress Against Time Bound Plan Table 8: Time Bound Plan of the Other Management Units Name of Holding PT Gawi Makmur Kalimantan Kebun Satui & Kebun Timur PT Gawi Makmur Kalimantan Kebun Penajam PT Gawi Makmur Kalimantan Kebun Paser Location Tanah Bumbu Regency Penajam Paser Utara Regency East Kalimantan Paser Regency East Kalimantan Time bound plan for certification Remarks st surveillance st surveillance 2015 Pre assessment 1.11 Compliance to Rules for Partial Certification Compliance of the uncertified management units of PT Gawi Makmur Kalimantan against the rules for partial certification according to RSPO Certification System clause was assessed by submission self assessment report. A summary of findings is as stated below: Partial Certification Requirements (a) The parent organization or one of its majority owned and / or managed subsidiaries is a member of RSPO. (b-d) A challenging time-bound plan for certifying all its relevant entities is submitted to the Certification Body (CB) during the first certification audit. The time-bound plan should contain a list of subsidiaries, estates and mills. Any revision to the time-bound plan or to the Audit Findings PT Gawi Makmur Kalimantan is RSPO member since September 14, 2012 with RSPO membership number Company made time bound plan and reported to RSPO as determined on the table

9 Page 9 of 80 Partial Certification Requirements circumstances of the company shall cause the plan to be reviewed. For whether it is still appropriate, such that changes to the timebound plan are permitted only where the organisation can demonstrate that they are justified (e) No replacement of primary forest or any area identified as containing High Conservation Values (HCVs) or required to maintain or enhance HCVs in accordance with RSPO criterion 7.3. Any new plantings since January 1st 2010 must comply with the RSPO New Plantings Procedure (f) Land conflicts, if any, are being resolved through a mutually agreed process, e.g. RSPO Grievance procedure or Dispute Settlement Facility, in accordance with RSPO criteria 6.4, 7.5 and 7.6. (g) Labour disputes, if any, are being resolved through a mutually agreed process, in accordance with RSPO criterion 6.3. (h) Legal non-compliance, if any, are being resolved in accordance with the legal requirements, with reference to RSPO criteria 2.1 and 2.2. Audit Findings There is no evidence that company replace primary forest for they all plantation area. According to Indonesia Government regulation plantation area have to established not in primary forest but could be in logged over area forest (LOA) or production forest for conversion to other forestry uses (hutan produksi yang dapat dikonversi) or non-forest area/land for other uses as well as non-productive area, land bank and other category area decided by government. In Penajam estate, there are HCV areas amount of ha (HCV 1, 3 & 4). There is no evidence that company replace HCV areas. There are land conflicts due to overlapping land between the companies with the villagers where the conflict is usually resolved by deliberation. The company has procedures/mechanism for handling of conflict and identification, calculation and compensation the loss of legal of land with the involvement of local community representative and relevant agencies. The company has provided evidence such as minute of meeting (include of agreement) a handling of conflict, result of inventories regarding owner of land, record of compensation that was signed by both the parties, head of village and head of sub district, etc No labor dispute in PT Gawi Makmur Kalimantan Some legal non-compliance has been identified as stated on the NCR of this report. While Paser and Penajam Paser Utara estates has identified laws/regulations compliance and the company are processing it with noncompliance status Progress of associated smallholders or out growers towards RSPO compliance As seen from data in Table 3, in year 2014 is about 0.82% FFB recieved from smallholders, this FFB received increased from last year, and for year 2015 until the the end of July, the mill recieved 0.75%. The company manage community s land for oil palm plantation and all FFB from smallholder will send to the mill. During the 1st surveillance audit company (Jorong Mill and estate) can not showed the smallholder RSPO certification program and implementation as a mention in RSPO requirement system, and this condition was raised as a non-conformity in this surveillance Approximate Tonnages Certified During the 1st surveillance audit, there is no production over capacity form the Jorong Mill. The approximate ton-

10 Page 10 of 80 nage certified, based on projection of production year 2016 from company owned estates only are as follows: Crude Palm Oil (CPO): 51, tones Palm Kernel (PK): 11, tones 1.14 Recommendation for certification PT Gawi Makmur Kalimantan Jorong mill has established and maintains an effective system to ensure compliance with the RSPO principles and criteria. The audit team has confirmed through the audit process that the company s practices complies with, adequately maintains and implements the requirements of Generic RSPO principle and criteria 2013 and RSPO Supply Chain Certification System November TUV Rheinland Indonesia recommends that PT Gawi Makmur Kalimantan Jorong mill worthy maintain as a producer of RSPO Certified Sustainable Palm Oil Date of certification issued and scope of certificate The scope of the 1st surveillance covers production of palm oil from PT Gawi Makmur Kalimantan Jorong mill and its supply base, which include West Estate (Kebun Barat) and Central Estate (Kebun Tengah). The date of certificate issued was Further details of the certificate are as per Appendix 1.

11 Page 11 of ASSESSMENT PROCESS 2.1 Certification Body PT TUV Rheinland Indonesia is member of Group TÜV Rheinland Group, a global leader in independent testing and assessment services. The TÜV Rheinland Group was established in 1872 with offices located in over 490 locations in 62 countries on all five continents. PT TUV Rheinland Indonesia offers certification for a wide range of management systems according to established international standards including ISO 9001, ISO 14001, OHSAS 18001, SA 8000, RSPO, ISPO, SNI, Sustainable Forest Management, Timber Legality Verification, etc. PT TUV Rheinland Indonesia s office is located in Jakarta, Indonesia. 2.2 Qualifications of Lead Assessor and Assessment Team The main certification assessment team members of certification audit are as per the table below: Name Position Qualifications/Experience Mhd Fundy C Kurniawan Riswan Lead Auditor Auditor Education: Master Degree in Natural Resource and Environmental Management, Bogor Agriculture University Trainings attended: Environmental Impact Assessment (EIA), Ecological Risk Assessment (ERA), Internal Quality Audit Training for Quality Management System, IRQA-QMS ISO 9001:2000, IRQA- EMS 14001, High Conservation Value (HCV), RSPO Lead Auditor Course, ISPO Auditor Course, SCCS Auditor and ISCC plantation audit. Working experience: Experienced in Environmental Impact Assessment, Environmental Health Safety Senior Officer (EHS- Officer) in Wilmar International Plantation, Internal Auditor for Wilmar International Plantation, Auditor for Roundtable on Sustainable Palm Oil (RSPO), Indonesian Sustainable Palm Oil (ISPO), Certification for Timber Legality Verification (SVLK) in PT TUV Rheinland Indonesia since June 2012 present. Education: Bachelor of Forestry Faculty of Forestry, Bogor Agricultural University and a Masters in Management of Natural Resources and Environment, Graduate School of the University of North Sumatra. Training attended: Authors Course EIA, GIS training and advanced levels analyst, Internal Auditor Training Integration System: Quality Management System ISO 9001: 2008, EMS ISO 14001: 2004 and OHSAS 18001: 2007, the RSPO GHG Calculation Training (PalmGHG). Technical Training Training Course of High Conservation Value (HCV), ISPO Auditor Training Batch VI. Working Experience: Team Leader Identification of Protected Areas and Biodiversity in several oil palm plantations (Anglo Eastern Plantation and Delima Makmur), Chairman of the mapping team detail units plantation PT PTPN III, Team Coordinator Acceleration RTRWP North Sumatra areas of GIS, Team Expert / Assessor HCV assessment in some plantation PTPN IV; PT SKM, PT.BTS (Sinar Mas), Bukit Maradja Est, Parlabian est, PT UMW and PT TUM (SIPEF Group), PT SIS and SMA (Asiatic Group), Expert in Project Integrating sectoral Programme in the district. Nias, Tim EIA preparation Electrical Transmission and Power Plant of PLN Peusangan Aceh and UKL-UPL Development Sei Ular irrigation dikes. PTPN III compensation consultant for HCV. Landscape and BMP IFACS project specialist at USAID, and the Auditor ISPO and RSPO external auditor PT TUV Rheinland Indonesia on several oil palm plantation

12 Page 12 of 80 Name Position Qualifications/Experience companies. Suriadi Harso Yuli Antena Auditor Auditor Education: Diploma Applied Analitycal Chemistry. North Sumatra University, Medan and Bachelor of Chemical Engineering, University of Jaya Baya, Jakarta. Trainings attended: ISO 9000:2000 Series Auditor / Lead Auditor Training - PE International (Jakarta), IEMA Advanced EMS Auditor (IEMA / EARA ISO 14001) Auditor / Lead Auditor Training Course - PE International (Jakarta), OHSAS Lead Auditor Training Course - PE International (Jakarta). ISPO lead auditor training. National Examination Board of Occupational Safety and Health (International General Certification (IGC) 1,2 and 3 TUV Nord (Dubai). National Examination Board of Occupational Safety and Health (International Technical Certification (ITC) for Oil and Gas Industries. RRC (Dubai). Indonesian Engineer Association (PII) (Jakarta), Occupational Health and Safety Specialist for lifting equipments. Indonesia Man Power and Transmigration Department (Jakarta). Working experience: Experienced in Quality Control from Coordinator for Safety Quality and EnvironmentManagement System since 2002 present. Auditor for Environmental Management System since 2002 present. Auditor for OHSAS since present. Conducted over 10 Quality Management System audits Environmental Management System audits and OHSAS Education: Bachelor degree of Agriculture Science Bogor Agriculture Institute Trainings attended: RSPO Lead auditor course, ISO 9001:2008 Lead auditor training, Indonesian Sustainable Forest Management Social Auditor, Indonesian Sustainable Palm Oil (ISPO). Working experience: Auditor at TUV Rheinland Indonesia 2014 until present, social research Indonesia center for agricultural (social economic policy study), social researcher CSR Indonesia mott-mcdonald Indonesia, personal consultant in Research and development-colors media group and RSPO, ISPO auditor. 2.3 Assessment Methodology & Agenda The 1st surveillance audit was conducted from August 3 5, 2015 as per the assessment program below. The assessment was carried out in accordance with PT TUV Rheinland Indonesia s RSPO audit procedure as well as the RSPO Certification Systems document. During the assessment, the qualified TUV Rheinland assessors used the RSPO standard as endorsed for the country in which the assessment took place and recorded their findings. Due to the location and proximity of the estates, combined with common management systems, it was possible to carry out both field and document assessments of all estates and the mill within the time frame without compromising the integrity of the assessment in anyway. All 2 estates and 1 mill were visited and the assessment team carried out field and document assessments of compliance to all the RSPO principles and criteria Generic 2013 and RSPO SCCS year November Common systems were identified and specific evidence was recorded for individual estates. Interviews were conducted at all estates and the mill. The company proposed the correction and corrective action for all identified non-conformities raised to the certification body 30 days after the closing meeting. Verification of closure of major non-conformances was conducted 2 months after the closing meeting of the main assessment and implementation of corrective actions for minor non-conformities will be verified during the next surveillance audit. The certification assessment agenda is as explained below:

13 Page 13 of 80 Certification Assessment Agenda. Date August 3, 2015 August 4, 2015 August 5, 2015 Location/ Main sites Jorong Oil Mill Palm Tengah Estate Barat Estate Main activities Document Reviews: verification of previously audit result, update legal requirements and compliance, OSH, environmental issues, hazardous waste management, HCV management plan, efficiency energy, water used record, training, production record, transparency, code of ethical conduct, workers welfare, water plan management, GHG calculation, emission, pollution prevention and reduction plan, RSPO- SCCS. On-site Visit: loading ramp, weighbridge activity, production plant Interviews: Head of mill, staff operational, foreman, mill workers, OSH officer, production clerk. Document Reviews: verification of previously audit result, update legal requirements and compliance, OSH, environmental issues, hazardous waste management, HCV management plan and implementation, spraying activity, production record, ethical conduct, transparency, workers welfare, emission, pollution prevention plan, harvesting, riparian buffer zone conservation, chemical and fertilizer stores, OSH Committee, accident records, GHG calculation. On-site Visit: harvesting and spraying activity in field number D37, D36 and D53 and E37, chemical and fertilizer stores, housing, hazardous waste, D26 fertilizing activity, EFB application in field number E31 Interviews: Head of Tengah Estate, agronomist personal, Estate manager, chemical and fertilizer stores officer, harvesters, sprayers, OSH staff, and workers. Document Reviews: verification of previously audit result, update legal requirements and compliance, OSH, environmental issues, hazardous waste management, HCV management plan and implementation, spraying activity, production record, ethical conduct, transparency, workers welfare, emission, pollution prevention plan, harvesting, riparian buffer zone conservation, chemical and fertilizer stores, OSH Committee, accident records, GHG calculation. On-site Visit: harvesting and spraying activity field number H23, Land application field number H29, H30, I30, harvesting field number F30, F31, riparian buffer zone Interviews: Head of Tengah Estate, agronomist personal, Estate manager, chemical and fertilizer stores officer, harvesters, sprayers, OSH staff, workers, Land application operator. 2.4 Stakeholder Consultation and Stakeholders Contacted PT Gawi Makmur Kalimantan bought the mill and its supply based plantation from the former owner i.e. PT Damit Mitra Sekawan in year 2007, it was noted on notarial deed no.184 dated on November 20, 2007 by notary of Dr Irawan Soerodjo, SH, M.Si). In year 2012 the company become RSPO member and has commitment to comply with all RSPO principles and criteria in all the company operations activities. The initial audit was conducted on February 10 to 13, 2014 and the company has worked hard to address all identified non-conformities raised during initial audit. The stakeholder consultation involved both external and internal stakeholders. External stakeholders were notified to make comments on the certification assessment by placing an invitation to comment on the RSPO website. Stakeholders included those immediately linked with the operation of the company such employees, out growers, the local government, NGO s, trade and labor unions and local communities. Stakeholder consultation took place in the form of meetings and interviews. Meetings with stakeholders were held at meeting room in Jorong s POM to seek their views on the performance of the company with respect to the sustainability practices outlined in the RSPO Principles & Criteria, and to comment on aspects where improvements could be made. Meetings with local communities were held at their respective premises within and

14 Page 14 of 80 near the company s area. A stakeholder consultation meeting was also held on mill s meeting room on June 02, s and sms invitations inviting individual stakeholders to the stakeholder consultation meeting were prepared and sent to the individual stakeholders. In all the interviews and meeting, the objectives of the RSPO and the purpose of the assessment was clarified at the outset followed by an evaluation of the relationship between the stakeholders and the company before discussion proceeded to obtain the stakeholders feedback on the company s compliance to different aspects of the RSPO Principles & Criteria. Although several stakeholders were not familiar with RSPO but they agreed with its objective and expressed their willingness to collaborate in the promotion of sustainable palm oil in North Sumatera province. In all interviews and meeting, the assessment team did not restrict discussion of both the positive and negative aspects of operations conducted by the estates and mill. The stakeholder consultation meeting held with stakeholders during the audit was extensive and productive, with an attendance of 18 attendees as listed on the appendix 5 below. This was followed by site inspections, including visits to the local communities, interviews with land claimants and contractors, and inspections of worker amenities and infrastructure. All stakeholder issues raised were recorded and forwarded to the management for their written response, and this is summarized in Section 3.7. The list of stakeholders that attended the stakeholder consultation meeting and stakeholders interviewed during the assessment is included as Appendix 5.

15 Page 15 of ASSESSMENT FINDINGS 3.1 Summary of Findings During the 1st surveillance audit there were found 22 non-conformities against RSPO P&C requirement (12 major non-conformities with 1 major is escalation from minor to major and 10 minor non-conformities) and 1 nonconformity against RSPO SCCS, 21 observations or opportunities for improvement were identified. Further explanation of the non-conformities raised and corrective actions taken by the company are provided in Section 3.2. The observations & opportunities for improvement are listed in Appendix 4. The following is a summary of findings made for the criteria listed in the Generic RSPO Principles 2013 and RSPO SCCS November Principle 1: Commitment to transparency Criteria assessed: CR1.1, CR1.2, CR1.3 Criteria not assessed: Findings: CR 1.1 Company still hold a documented procedure of communication no. SOP/GMK-AGRO/01/08, rev. 04, regarding Procedure of Internal and External Communication, published in April 1 st This document has clearly stated procedural steps for communications with external parties, such as: a. Management personnel taking responsibility to determine the kind of data and information that publicly available, accept and response information request; b. Detail publicly available documents c. Strategic stakeholders that must be responded regarding information request. GMK Jorong has identified and documented list of stakeholders. There are some communication records has showed during audit, such as finding as follow: a. Incoming and Out-Coming Logbook 2014/2015. a. Incoming and Out-coming letters logbook of HSE department 2014/2015. Letters registered to this list were communication between GMKJ with National Environmental Body (all level office). b. Logbook of Information request and responses 2014/2015. Letters registered to this list were communication between GMKJ with local stakeholders. b. Examples of Incoming letters with response letters, such as: c. A letter from Head of Province Environmental Office of, May 22 nd 2014, requesting environmental reports (RKL/RPL). GMK Jorong has respond by submitting their report. d. A letter from District Head of FKPI Kintap, August 26 th 2014 regarding information request of Cooperation s opportunity in order to conduct empowerment for local Youth Community. GMKJ has response in August 26 th 2014; provide information that company is open opportunity to work with local partners. CR 1.2 Company still hold a documented procedure of communication no. SOP/GMK-AGRO/01/08, rev. 04, regarding Procedure of Internal and External Communication, published in April 1 st Since the last audit, a revision has been conducted to this procedure but not including the main contain. The revisions that has been made were: 1. June 9 th 2014, change the numbering system. 2. March 12 th 2015, changes in pages 1 5 regarding verification page. Regarding to this procedure, documents that can be made publicly available, such as follows: 1. Vision and mission of the company 2. Company policy 3. EIA (AMDAL/UKL-UPL, RKL-RPL) Documents 4. Location permit 5. Land use right 6. Legal permits

16 Page 16 of Continuous improvement 8. CSR activity report 9. Social conflict resolution 10. Work health and safety program. The publicly available document lists not yet explicitly mentioned documents required by RSPO P&C such as: 1. Report and Plan of Environment and Social Impact Management. 2. HCV 3. Negotiation Procedures 4. Public Summary of certification assessment 5. Human Rights policy 6. Code of Ethical Conduct policy Accordance to the RSPO principle and criteria 2013, that publically document not fulfill with, so this is raised as a non-conformities. Interview result with local community headman (Batalang and Pemalongan) found that company not yet communicated their policy regarding transparency, so this also raised as nonconformity. (NCR of 22). CR1.3 Mill and Estate has established the document of code of ethical conduct. This document was issued by the top management through the policy committing to a code of ethical conduct and integrity in operations and transactions, namely Director Decree No. 005/DIR/GMK/JKT/VII/15 dated on December 1 st, 2014 regarding Ethical of Work and Business with statement: Avoiding any activity or personal interest in performing operation and responsibility Prohibition of business decision making based on personal interest, family or colleague without the best QCD (Quality and Cost Delivery) consideration/evaluation All employee is not allowed to have gift or reward from the external such as supplier, contractor and outsourcing Prohibition of bribery from the external party in any form related to position, duties, and responsibility. This document has communicate to all of workers include suppliers and subcontractor by the code of ethical conduct brief record attendanlist in July 31st, Specially for internal workers, company communiated this document through the morning meeting in every day before the workers go to field. Compliance status: Non Compliance NCR of 22 a. The publicly available document lists not yet explicitly mentioned documents required by RSPO P&C 2013, such as Environment and Social Impact Management Plan and report; HCV; Negotiation Procedures; Public Summary of certification assessment; Human Rights policy and Code of Ethical Conduct policy. b. Interview result with local community headman (Batalang and Pemalongan) found that Company not yet communicated their policy regarding transparency. Principle 2: Compliance with applicable laws and regulations Criteria assessed: CR2.1, CR2.2, CR2.3, CR2.4, CR2.5, CR2.6 Criteria not assessed: Findings: CR2.1 Mill and estate has record of law and regulation compliance, i.e.: example: Jorong Mill has letter permit for Industry Legal Permit based on Governor Decree of number 503/004/IX/KP2T/2014 about revision of Governor Decree Letter of number 503/767/VI/KP2T/2014 about Industry Legal Permit of PT Gawi Makmur Kalimantan, with commodity is palm oil, with area 21, Ha. This permit also covered for mill production permit, with total permit is 150 ton FFB/hours, consist of Jorong Mill is about 90 ton FFB/hours and Satui Mill is about 60 ton

17 Page 17 of 80 FFB/hours. This permit issued in Banjarmasin dated on September 15, Jorong Mill also has permit for surface water usage based on Head of Regent of Tanah Laut number 2/2014 about permit for surface water usage to PT Gawi Makmur Kalimantan, valid for 3 years, from May 30, 2014 until May 29, Issued in Pelaihari, dated on May 30, Barat Estate has record of chemical permit (herbicide, pesticide) based on Decree of Head of Man Power, Transmigration and Social Bodies of Tanah Laut Regent number 016/HIPK-WAS/VII/2013 issued on July 30, 2013, and valid for 1 years. During the surveillance audit, this permit still on renewal process based on letter from company number 034/HRD-GMK/VI/2015 dated on June 22, 2015, and was accepted by Head of Man Power, Transmigration and Social of Tanah Laut Regent. For sprayer operator, the estate also provide training, and was conducted on January 11, 2014 evidenced by the training certificate and attendant list of training, held by Fertilizer and Pesticide Control Commission of. Barat Estate also has license for water surface usage from Head of Regent of Tanah Laut number 5/2015 and valid for 3 years, issued in Pelaihari dates on October 5, Tengah Estate has record of chemical permit (herbicide, pesticide) based on Decree of Head of Man Power, Transmigration and Social Bodies of Tanah Laut Regent number 015/HIPK-WAS/VII/2013 issued on July 30, 2013, and valid for 1 years. During the surveillance audit, this permit still on renewal process based on letter from company number 034/HRD-GMK/VI/2015 dated on June 22, 2015, and was accepted by Head of Man Power, Transmigration and Social of Tanah Laut Regent. The company provides a mechanism for evaluation of implementation and compliance to applicable legal requirements in a standard operation procedure i.e. SOP/GMK-SMK3/01/03 Rev 00 2 January 2014 where in this procedures are define the mechanism of evaluation of compliance to regulations related to the company's plantation, environment, labour, and regulations related to the health and safety. The SOP states that the identification and evaluation is to be carried out 2 (two) times a year and conducted by the each section, and estate and will be compiled by Legal officer and supported by the Head of Operations / field and other departments within the company organisation. Most estate maintains and updates their list of all applicable legal requirements relating to environmental, occupational safety and health, the company plantations, and employment as well as records of internal compliance checks to legal requirements, which performed by SHE Department (Safety Health Environmental Department) and Form for Law and Regulation List Register, which last updated on June The company maintains a list of all applicable legal requirements relating to environmental, occupational safety and health, the company plantations, and employment as well as records of internal compliance checks to legal requirements as they are summarizing in this form. List of applicable legal, regulation and other requirements was recorded in this form. Some evidences of compliance with relevant legal requirements as seen on latest legal requirements register i.e. "Compliances of law and regulation list " for First Semester of year 2015 in Jorong Mill and Tengah Estate but in Tengah and Barat Estate also Jorong Palm Oil Mill OSH committee still not authorised by related government agency as it was required Ministry of manpower regulation No.Per-04/Men/1987 related OSH committee, including their regular quarter reporting to the government since quarter II, III and IV 2014 periods and for quarter I and II 2015 periods. They were raised as non-conformity. (NCR b of 22). Evidence of efforts made to comply with changes in the regulations was checked through the latest legal register updated on June 2015 & confirmed that latest applicable legal requirements as described above have been updated. The latest legal register is also sighted to be available at the respective mill and estate offices however. Related to the workers welfare such as minimum wages, overtime, workers minimum age requirement, work leave, the company both plantation and mill has effort to ensure the compliance with the sufficient evidenced. Example: 1. Minimum wages, based on Governor Decree number /0632/KUM/2014 regarding minimum sectoral wage appointment of province, In the annex of the decree stated that the minimum wage for palm oil plantation is about IDR 1,875, This regulation followed by company through the company regulation, by published of company policy regarding minimum wage for non-staff (workers) that the minimum wage for Jorong estate is based on governor decree above. Record of payment list (signed by workers) showed that the wages paid was compliance with regulation. 2. Over time regulation established by the company through the company regulation (chapter VII, article 27). Also for minimum age requirement for workers also compliance by the company, based on register list of workers showed there is no workers recruited by the company is under 18 years old.

18 Page 18 of 80 But, found in the law register book, the company no input yet the two regulation related workforce, such as regulation number 100/2004 and 102/2004 from Ministry of Man Power and Transmigration. This is raised as nonconformity. (NCR of 22). Also, in work contract found that the company has no mechanism to evaluate the work contract has fulfill and compliance with regulation number 100/2004 about working agreement. This raised as a nonconformities. (NCR a of 22). CR2.2 During the 1st surveillance audit, there is no changed and/or revision related legal land permit (land use right) for all estate and mill. The permit still same with main assessment audit. The legal land permit will presented below: Primary: the company has land used right permit (HGU) base on head of National Land Agency Decree Letter No. 5/HGU/BPN/99 dated January 14, 1999 with total area 9,264 ha according to Land Used Map No /1996 revision dated November 2, 1998 valid for 35 years (February 18, 2034) and HGU certificate No. 01 dated February 19, 1999 with total area 9,264 ha according to measurement letter No.01/1999 dated February 15, 1999 located in Damit village, S.Bakar village, Asam-asam village, P.Linuh village, Pamalongan village and Batalang village, Jorong Sub District, Batu Ampar District, Pelaihari Sub District, Tanah Laut Regency, Province. In head of National Land Agency Decree Letter No. 5/HGU/BPN/99 and HGU certificate No. 01 on behalf PT Damit Mitra Sekawan but on the page of registration transfer right and other recording informed the change of ownership certificate name to PT Gawi Makmur Kalimantan accordance with deed of incorporation no.34 dated of November 20, 2007 by notary of Dr Irawan Soerodjo, SH, M.Si (DP No.2810/1009 and 208/654/2009 dated of July 2, 2009). The company (West and Central Estate) has location permit (decision letter from head of National Land Agency Province no /01/KPT- 08/1997 dated January 4, 1997) on behalf PT Damit Mitra Sekawan amount of 15,000 Ha in S.Bakar village, Pamalongan village, Damit village, Pantai Linuh village, Sabuhur village, Pelaihari Sub District, Batu Ampar Sub District, Jorong Sub District, Tanah Laut Regency, Province. In Minutes of land examination committee (committee B) No.04/RIS-HGU/06/1998 dated June 29, 1998 that West and Central estate is zoned for non-forest uses (Kawasan Budidaya Tanaman Tahunan/Perkebunan) based on province & regency spatial map (appendix local government regulation no.3 year 1993 and no.13 year 1993) but based on decision letter of Head of Ministry of Forestry no. 435/Menhut/2009 dated July 23, 2009 that part of estate is production forest (Hutan Produksi) amount of Ha so the land exchange of the region in still ongoing processing staus. Current condition for process it are the auditee has submitted request of the exchange of the region (letter no. 009/Dir/JKT/XII/2012 dated on December 24, 2012) to Ministry of Forestry and The Ministry of Forestry has replied to the letter it (no. S.378/BRPUK-1/2013 dated on June 17, 2013) where there is shortage of requirement i.e recommendation of approval for the release of the region into non-forest from Governor of. Additional I: for this area that the company is processing land used right HGU) permit where current condition, the company has conducted re-measurement by National Land Agency within in order of the national coordinate programme so that the results of the re-measurement can be used to continue the release of forest area process and has submitted letter (No.015/Dir/GMK/JKT/III/2014 dated on March 14, 2014) to National Land Agency for Region about Some document ownership auditee which related of processing Land Used Right (HGU) permit such as: 1). Location permit (decision letter from head of national land agency Province No /06/KPT-08/2004 dated of August 12, 2004) on behalf PT Damit Mitra Sekawan amount of 280 Ha in Batalang village, Damit Hulu village, Batu Ampar Sub District, Jorong Sub District, Tanah Laut Regency, Province; 2). the land use map no dated on January 15, 2007 amount of 260 Ha (result of survey of cadastral); 3). a letter form National Land Agency Province no /24/109/BPN-43 dated on February 5, 2007 about answer to the previous application letter that the company should complete letter of release of forest area from Ministry of Forestry and remove the overlap area amount of 10 ha with land use permit (HGU) no. No. 5/HGU/BPN/99 or HGU certificate No. 01; 4). Result of verification to field by Committee B team for forestry section dated on October 17, 2006 where it areas in production forest for conversion to other forestry uses (HPK) based on appendix decision letter from Ministry of Forestry and Plantation No.453/Kpts-II/1999 dated on June 17, Additional II: for this area that the company is processing land used right (HGU) permit where current condition, the company has not received a response until now from the National Land Agency of South

19 Page 19 of 80 Kalimantan Region for letter was submitted on 9 March Some document ownership auditee, which related of processing Land Used Right (HGU) permit such as: 1). Location permit (head of Tanah Laut Regency decree no. 14/IL/2007 jo 942 Tahun 2009 dated of October 2, 2009) on behalf PT Gawi Makmur Kalimantan amount of 104 Ha in Batalang village, Jorong Sub District, Tanah Laut Regency, Province; 2). The land use map no (section II (NIB A: ) and section I (NIB B: )) dated on July 27, 2010 amount of Ha (section I: Ha and section II: Ha where it is result of survey of cadastral). Additional III: for this area that the company is processing land used right (HGU) permit where current condition, the company has not received a response until now from the National Land Agency of South Kalimantan Region for letter was submitted on 9 March Some document ownership auditee, which related of processing Land Used Right (HGU) permit such as: 1). Location permit (head of Tanah Laut Regency decree no. 13/IL/2007 jo 941 Tahun 2009) on behalf PT Gawi Makmur Kalimantan amount of Ha in Damit Hulu village, Batu Ampar Sub District, Tanah Laut Regency, South Kalimantan Province; 2). The land use map no (NIB A: and NIB B: ) dated on July 27, 2010 amount of Ha (section A: Ha and section B: 3.54 Ha where it is result of survey of cadastral). When during the document verification of hectarage statement, overlay map of land use right with planted area, showed the indication of planted in outside of HGU (land use right) in Barat and Tengah Estate. Map scale 1:65,000, the indication is planted in year of 2003, 2004, 2007 and For this was raised to non-conformity. (NCR a of 22). Tengah Estate has record of monitoring and realization plan for boundary stone maintenance period of Monitoring conduct twice in one year (March and September). It was found 29 boundary stone in Tengah estate in good condition. Based on field observation in division V field number H52-H53 boundary condition was maintain very well, visible in field. Also for monitoring record conducted on July 27 and 29, 2015 in division 4 field number E52-E53 and division 2 field number D52-D53, showed that the boundary stone was maintain by the company. Next, Barat estate also conducted the boundary stone monitoring. Based on monitoring record, all of boundary stone in Barat estate in good condition, maintain very well and visible in field, evidenced by the photograph of monitoring record in each boundary stone. Example in boundary stone number 59 in field number C32, boundary stone number 60 in field number C31, and others. Related to the land use right permit process, the company can showed yet the up to date progress in Last update only in 2014 without significant progress from Land Office of. So this is was raised to nonconformity. (NCR b of 22). CR2.3 There was no new land dispute found during surveillance. The last land disputes that has happened has been covered in main audit (2014), such as: a. Company against PT Prafa Coal Mining. There is coal mining activities on behalf PT PT Prafa Coal Mining (coal mining activities) amount of 409 ha Inside land use right (HGU) areas where allegedly overlaps with PT GMK s land use right (HGU) No, 1 year Current condition is cassation process in the Supreme Court. b. Company against community members. The company has provided evidence such as record of meeting with 36 owners or cultivators of the community s land inside of the company s land use right area. The result was the owners or cultivators did not want to release their land to the company because they need the land for their daily life. For example was: a. Minute of meeting with AS from Damit Hulu village on June 17th, 2014, cultivator of 5.92 ha land at Block K division 13. b. Minute of meeting with Dg from Damit Hulu village on June 17th, 2014, cultivator of 1.24 ha land at Block C division 30. c. Minute of meeting with Dm from Damit Hulu village on June 17th, 2014, cultivator of 8.5 ha at Block J division 5. c. Company against 36 local Palm Oil Farmer that planted inside HGU. The company has provided evidence such as copy of negotiated agreements between the company with 36 owners or cultivators of the community s land inside of the company s land use right area. The content of negotiated agreement example : d. Agreement with villager of land claimer 5.92 ha land at Block K13 division 5 ; land claimer 1.24 ha land at Block C30 division 2 from Damit Hulu village on June 17th, 2014, they still not agree to sell his land to

20 Page 20 of 80 e. Agreement with land claimer of 8.5 ha land at Block J17 division 5 from Damit Hulu village on June 17th, 2014, that they agree to sell his land to company; f. Agreement with land claimer from Damit Hulu village on June 09th, 2014, Block F25 division 2 that agree, if companies want to provide compensation for his land; Field check has been conducted during surveillance. The coal mining area has been abandoned by all parties (communities and companies), no mining activities found at field. The land inside HGU that has been planted by local community and does not yet meet resolution (compensation values) still owned/claimed by the community. Management has a clearly boundary between community s claimed land and company s planted area. A map that consist of claimed land inside HGU has been developed based on field visit and information from the claimers. Interview result with local community leader found that all negotiation process has been conducted in a proper procedural manner. No indication regarding the uses of para-military during negotiation process. Compliance status: Non Compliance NCR of 22 a. It was found in the law register book, the company no input yet the two regulation related workforce, such as regulation number 100/2004 and 102/2004 from Ministry of Man Power and Transmigration. NCR of 22 a. There is no mechanism from the company in work contract related to evaluate the work contract has fulfill and compliance with regulation number 100/2004 about working agreement. b. Occupational Health and Safety Committee (P2K3) for Jorong Mill, Tengah and Barat Estate still not authorised by the Government, also there is no periodically report for OSH meeting in every three months to the government for II, II and IV in 2014 and I, II in NCR of 22 a. When during the document verification of hectarage statement, overlay map of land use right with planted area, showed indication of planted in outside of HGU (land use right) in Barat and Tengah Estate. Map scale 1:65,000, the indication is planted in year of 2003, 2004, 2007 and b. During the 1st surveillance the company can showed yet the up to date progress in 2015 for the progress land use permit process. Last update only in 2014 without significant progress from Land Office of Principle 3: Commitment to long-term economic and financial viability Criteria assessed: CR3.1 Criteria not assessed: - Findings: Mill and Estate has a record of budget summary for 3 years from In the budget summary record showed the information about plan for icoming FFB (own estate, smallholder and out grower), CPO and PK production plan, OER and KER for CPO and kernel, oil losses, production cost, fertilizing and spraying plan, production plan every years, planting years, road maintenance, replanting plan, and others. Compliance status: Full Compliance Principle 4: Use of appropriate best practices by growers and millers Criteria assessed: CR4.1, CR4.2, CR4.3, CR4.4, CR4.5, CR4.6, CR4.7, CR4.8 Criteria not assessed:

21 Page 21 of 80 Findings: CR4.1 During the 1st surveillance, there is no revision or replaced the company procedure. The company has list of master document (FR/GMK-AGRO/PD/01/01) consist of manual and procedure for estate and mill activities. The procedures covering all estate activities such as nursery practices, land clearing (include without burning activity), conservation of soil and water, planting cover crops / LCC, planting of oil palm, mulching of EFB and fertilizer, land application, desease and pest control, harvest and transportation, etc. While procedure covering all mill activities such as receiving product, despatch product, laboratorium, and maintenance of mill, kernel crushing plant and processing in mill. Procedur for other group/section (supporting & sustainability) available such as human resources department, legal & relationship of community, purchasing, logistic, finance, security, technic and workshop, record and document control, audit internal, control of nonconformity product, corrective action, OSH, preparedness and emergency response, inventory of GHG, handling of hazardous waste, handling of hazardous material, communication of internal & external, loading oil from truck, mass balance report, riparian area, handling of conflict, etc. Based on verification in field, there are several condition relating inconsistency between procedure with implementation such as: 1) SOP / GMK-SMK3 / 01/14 on the handling of domestic waste. It is still found In Tengah Estate, office division Batalang unit division 1,3, and 6 are still found mixing organic and inorganic garbage. 2) SOP / GMK-AGRO / 10/01 on Engineering and Workshop are not implemented properly. For example: In Section 8.1: Daily Checking and Treatment (P2H), mentioned operator / driver must fill out a checklist and inspection of vehicles and known head / assistant techniques. However, the checklist is not available Monthly reports and work evaluation are not available as set out in the SOP. (Technique section). 3). Mill Maintenance Procedure No.SOP /GML-AGRO / 03/04 are not in accordance with the implementation, such as: Form letters repair requests (Annex 8.2) is not available Form of concept note (annex 8.3) is not available Registration Form of machine running test results according to Annex 8.4 is not available and not implemented Report form on the realization of the project (annex 8.4) is not available. This inconsistency caused by the absence of the mechanism on monitoring the effectiveness of implementation of SOPs. Some SOPs are not implemented properly as above and the absence of control mechanisms of implementation of the SOP is raised as non-conformity (NCR a of 22). Actually the company has conducted internal audit (RSPO & ISPO standard/scheme) on December, 2014, to monitoring for all applicable procedure, but rerecords of monitoring the implementation of SOPs is not available, then the organization cannot perform an evaluation to measure the effectiveness of SOPS. This condition is raised as non-conformity (NCR b of 22). Monitoring result of evaluation SOP s effectiveness still not available and already for agronomy only and still on progress and not finish yet. This condition is raised as non-conformity (NCR of 22). The document of operational results are well maintained in each estate and mill on monthly report e.g. monthly reports for January to June 2015 of Barat estate and Tengah estate and annual report of year 2014 which include all activities. Records of operational results have available such as record of harvesting, fertilization, mulching of EFB, maintenance of plant, control of pest and disease, maintenance of road activities in estates, etc. Whereas in mill has available too such as production process, FFB receipt, grading, dispatch, test of quality product, sounding activities, etc. The mill of GMK Jorong has recorded the origins of all third-party sourced Fresh Fruit Bunches (FFB) as follows: 1. Koperasi Cipta Prima Sejahtera supplied 3, kgs FFB (in 2014) and, 1,549,430 kg (January June 2015) 2. Kelompok Tani Swadaya supplied 2,667,230 kg (in 2014), and 2,233,830 (January June 2015) 3. PT Candi Artha supplied 43,447,690 kg (in 2014) and 19,753,170 kg (January-June 2015)

22 Page 22 of PT Bangun Kalimantan supplied 4,415,460 kg (in 2014) and 3,428,080 ((January June 2015) 5. CV Gratia supplied 8,479,500 kgs (In 2014) and 8,624,420 kgs in (January June 2015) 6. KUD Agro Mandiri supplied 2,678,750 kgs (in 2014) and 839,530 (January June 2015) 7. Kel. Tani Rukun Tani supplied 3, kgs (in 2014) and 2,451,100 kgs (January June 2015) 8. CV Satria Bagus supplied : 12,491,990 kgs and 4,318,330 kgs (January June 2015) 9. Gapekbun supplied: 919,350 kgs.(in 2014) 10. Rahmat Perkasa supplied kgs (in January June 2015). CR4.2 The company has some SOPs regarding to fertilization activity namely SOP /GMK-AGRO/02/08 on Inorganic Fertilizing, SOP /GMK-AGRO/02/09 on Land Application, SOP /GMK-AGRO/02/10 on EFB application to the land, SOP /GMK-AGRO/02/11 on Determination of Census and Sample Tree. The company also utilized residual solid sludge, empty fruit bunch, and liquid effluent for organic fertilizer to enrich the nutrient content in very shallow topsoil conditions. Evidence of solid sludge and EFB usage is a warrant dosage recommendations dated January 10, 2015 issued by the Head of Plantation, which describes the dose in 2014 and 2015, as well as solid use programme in 2015 and map of solid used. The company recorded fertilizer application including empty fruit bunch application. Fertilizing recording made in estate monthly report and it comes from Field Head and Division Head report. Example: - On June 3 rd, 2015, NPK application in Block C32, Division 2, with area of Ha, with dosage 2,5 kg/trees, and has been applied 6,750 kg s. Based on fertilizer recommendation, this application has been compliance with the recommendation. - On March 2015, MOP application in Blok number B34 Division 1, with area Ha, total tree 5,320, with dosage 500 gr/tree, with total application is 2,950 kg s. This application has been compliance with the recommendation. The company manage soil fertility by conducting leaf analysis and soil analysis. According to the company procedure no. SOP/GMK-AGRO/02/11, the company conduct soil analysis every 5 years, and leaf analysis every year as consideration to get fertilizer recommendation, with evidenced is: - Leaf analysis conducted by Sumbio-BLRS Analytical Laboratory Plant Tissue at Tengah Estate, Analysis report on July 14th, 2013 with parameter analysed is N, P, K, Mg, B, - Leaf analysis conducted by Sumbio-BLRS Analytical Laboratory Plant Tissue at Barat Estate, Analysis report on August 4th, 2012 with parameter analysed is N, P, K, Mg, Ca, and B. Soil analysis conducted by Soil Research Centre Bogor on August 6 th September 7 th 2012 at Barat Estate and Tengah Estate with total of 177 samples. In addition to inorganic fertilizer, the company also applied organic matters such as EFB, effluent residues as an effort to increase soil fertility. The company has recorded EFB and other nutrient matters application. Example: - EFB application on July 2015 in Block B37 Tengah Estate with area of Ha has been applied kg s; a total area of Ha in Tengah Estate has been applied with EFB. - Sludge residual (solid) application with dosage 50 ton/ha. A total of Ha has been applied with sludge solid during January to June 2015 in five blocks of Tengah Estate. In Barat Estate, during January to July 2015 a 12,332,370 kg s EFB has been applied to 15 blocks in Division 1 with area of Ha, and 5,285,290 kg s EFB has been applied to 13 blocks in Division 2 with total area of Ha. Sludge solid also applied in Division 2 with total area of Ha. EFB application will reduce NPK fertilizer usage. Area with EFB application will only has one rotation of NPK or one less than normal dose as recorded in fertilizing usage in blocks. The company also utilized liquid waste (effluent) to Land Application area in Division 1 with area of Ha (four blocks). CR4.3 Based on EIA document April 2002 on page IV-3, stated that the company location is around above sea level, with topography condition is flat until undulating in most of the area. In some fraction area is directly adjacent with secondary forest in north area. Next, in pages of IV-4, topography condition

23 Page 23 of 80 and slope, i.e.: - 0 8% (flat) with total area 6,723.8 Ha (72.58%) % (undulating) total area 1,592.5 Ha (17.19%) % (hilly) total area Ha (8.39%) - > 40% (steep) total area Ha (1.30%) The EIA document also said soil type in location is podsolic red and yellow, and there is a potential erosion in some company s area such as: - In area planted by palm oil with 1 year planting, erosion about 73.3 until ton/ha/year, this classified in to medium potential erosion - In area planted by palm oil with 3 year planting, erosion will be lower than palm oil in 1 year planting, because the cover crops and palm oil canopy will be covered top soil. Estimated the erosion about 44.3 to ton/ha/year, this is classified as low potential erosion. The company has marginal area map made by topography condition as well as non-productive area map is available. Based on those maps, management could recognized which area should be terraced, not planted or need special treatment. Management strategy on steeps area is using contour terrace system. Every year the company provide budget for terrace maintenance and monitored in monthly estate progress report. Management of planted marginal soil regulated in SOP/GMK- AGRO/02/03 on Soil and Water Conservation. Area with slope > must be made terrace with 4 meters width depend on soil condition. Terrace installed align with contour with stop bund every 50 m. Terraced area exist in Barat Estate Division I ha, Division II 33.7 ha, Division III ha, Division IV ha, Division V ha and Division VI Ha. As observation or an opportunity to improvement, the company should integrate the entire activities and procedures on soil and water conservation into a Management Strategy on Terraced Area and completed with soil type description and climate condition, mitigation plan and soil maintenance when erosion happened as well as erosion monitoring. In addition to maintain slope area, company also maintenance their road production or road collection. Record of road maintenance in all estate is available in Monitoring of Road Maintenance report, example: - Monthly report of road maintenance on planted area year Collector road segment RR B34, B35, B36 and B37 has been maintained 1215 meters in March Monthly report of road maintenance on planted area year Collector road segment RC D32, D31, has been compacted 915 meters in May Road maintenance programmed in Annual Work Plan contains location, planted year, number of plant trees, and volume of maintenance road. Road maintenance based on SOP /GMK-AGR/02/24 on Road and Bridge Infrastructure. Based on information on EIA document and soil map, there is no peat soil and fragile soil in the company. The company has identified all streams, which flow inside in estate area and created a riparian buffer zone management programme. There is four (4) rivers flow inside area of PT GMK i.e.: Asam-asam river, Cendolan river, Kematian river and Katal-katal river. Based on HCV identification, all the rivers have natural riparian buffer zone. The company also has commitment to maintain all of natural streams inside the estate from pollution and contamination. The company has a plan for protection of river riparian buffer zones and natural streams through felling of oil palm trees adjacent to all natural streams and replanting the buffer zone areas with hardwood trees and vertiver grass also make signboard about restriction chemical activities in along of riparian buffer zone. CR4.4 Jorong mill has record of water resource maintenance program through the water analysis from Asamasam River as a water source used by mill to production process. Record of water analysis presented below: 1. Result record number 081/AP/VI/2014 and 082/AP/VI/2014, when the water sampling from upstream and downstream of Asam-asam River, dated on June 16 until July 2, 2014, accordance to Governor of Decree number 05/2007 for water quality for raw water, and all of water quality parameters still in standard. 2. Result record number 00170/DEODAI and 00171/DEODAI dated on January 14, 2015 from upstream and downstream of Asam-asam River, accordance to Government Regulation number 82/2001, and the water quality still in standard. Jorong mill also has record the water usage per month. Example: a. April 2015, water used is about 26,084 m3

24 Page 24 of 80 b. May 2015, water used is about 23,838 m3 c. June 2015, water used is about 24,274 m3 Both of two Estate, only Barat Estate has record of water resource management program for With water resources program such as: a. Hedge maintenance b. Periodically monitoring for water pump and water treatment c. Periodically monitoring for water stream d. Signboard maintenance e. Replacement of main pipe if needed Barat estate has conducted the riparian bufferzone protection through the enrichment of vegetation, when in 2014 has been planted the vegetation of Mahogany about 1,358 tree in along of riparian bufferzone. In 2015, Barat estate also conduct again the enrichment, but there is no recording, while field visit checking the vegetation condition is maintain very well. Record of water analysis also available for Barat and Tengah Estate, water sampling analysis from water treatment plan, analyzed by Suconfindo based on result certificate number 02958/DEODAH dated on June 13, 2014, accordance to regulation PerMenKes number 491/MENKES/PER/IV/2010 covered for all water analysis paramaters required by regulation. But in Tengah estate, they can not showed the water management program. So this is raised as a non-conformity (NCR of 22). CR4.5 Tengah Estate has work program for integrated pest management (IPM). This program showed the EWS system (early warning system) for all pest. Example EWS period from April December 2015 was covered for rat census, caterpillar census and others pest in estate. Estate has procedure about pest management for immature and mature plant Rev01 dated on Procedure has explained details for how to handling the pest management. Tengah Estate has record of pest management, example: a. Rat census record form number FR/GMK-AGRO/PHP/02/03 conducted in division I field number B34, B35, B36 on July 1, Form the census it was attack in middle level. For this attack level, estate still used the owl (Tyto alba) b. Record census for caterpillar conducted on July 1, 2015 in field number B34, B35, B36, showed there is no attack. c. Tengah estate conducted the Tyto alba census for rat control. Based on census record, until during the 1st surveillance audit, estate has 32 owl box, with total population is 50 mature population. Map of owl box in the estate also available very well. d. All of IPM staff has trained by company, with the training evidenced is attendant list training conducted on April 6 and 8, 2015 followed by all IPM staff from all division. e. Tengah estate has planted the beneficial plant for control the pest management system, with the realization planted is: a. Division 1, Turnera subulata, planted as 241 m2 b. Divison 2, Turnera subulata, planted as m2 c. Division 3, Turnera subulata, planted as 510 m2 d. Divison 4, Turnera subulata, planted as m2 e. Division 5, Turnera subulata, planted as 462 m2 and Casia tora as 150 m2 f. Division 6, Turnera subulata, planted as 160 m2 Barat estate has record for work program of IPM for 2015 has covered for all pest type in estate such as caterpillar, bagworm, rat, and others for all division. Procedure for IPM implemented by the Barat estate same with in Tengah estate. Barat estate has record for IPM, i.e.: a. Record census for rat and tirathaba form number FR/GMK-AGRO/PHP/02/02 example in division 6 field number J23. Based on census, attack level is still below standard and the company still uses biological control to manage the pest management. b. Record census for caterpillar and bagworm attack, based on census record in July 2015, it was attacked with low level. c. Record on Tyto alba census. In Barat estate there is 9 Tyto alba only in division 1 and 2. d. Record of PHT staff training conducted in July 8, 2014 evidenced by attendant list of training. e. Record of beneficial planted such as Turnera subulata in all division.

25 Page 25 of 80 CR 4.6 There is sufficient evidence that all pesticides/chemicals used by Tengah Estate is registered and permitted. This is evidenced by: 1. Tengah Estate: The same recommendation was get by Tengah Estate with recommendation letter number 015/HIPK-WAS/VII/2015, this recommendation valid for one year start on July 30 th, Type of pesticide used in Jorong Area: Trap 20 WP; Supretox, Aladin, Supreme 480 AS, Primax 480/1; Winson WP 20; Wintag 490 G/L, Meta prima, Matador, Furadan. The organization keeps and maintains the records of pesticides use (including active ingredients used and their LD50, area treated, amount of active ingredients applied per ha and number of applications). Also has already been established a plan to reducing the limited pesticide used in Barat Estate and Tengah Estate until Herewith some document were reviewed: Tengah Estate: - Report of chemical usage for March 2015, Division I: Sida, Up 480SL: 10 cc/ha (applied for 267,65 ha of areal); Division II: Sida Up: 0,010 liter/ha (applied for 319,8 ha of areal); Division III: Glyphosate: 3,7 cc/ha (applied for 269,10 ha of areal) - Toxicity recapitulation of Herbicide, Sida Up 490 SI, at Division VI: - January 2015: applied areal 248,2 ha; used around 101,6 liter; active ingredient 36,881 grams/liter; Dose per ha: 149 grams/liter; LD 50 Oral Rate: 5,6 Mgs/ha and LD 50 Human: 392 grams/person Barat Estate; recapitulation of pesticides usage year of 2014 as below: - Herbicide, Glyphosate 480 AS amount 736,18 liter and Ally 20 WDG 16,21 liter - Insecticide, Deci 2.5 EC 41,91 liter - Herbicide (Gempur 480 AS; Sida Up 490 SL; Garlon 480 EC and Ally 20 WDG) - Insecticide (Decis 2.5 EC; Marshall 5G; Orthene; Matador) - Fungicide (Bayleton 250 EC; Anvil 50 EC; No BB; Dithane M45; BBerosal 50 WP) - Rodenticide (Klerat RMB; Ratgone; Petrokum; Brodifakum) - Document LD 50; Chemical Usage year 2014, including data of month, applied area (ha), amount of chemical used (liter), amount active ingredient/ha, LD 50 Rat (gram), LD BB 65 Kg (gram) and remark. Conclusion, there is no toxic material (chemicals). The chemical consist of Sida Up and Ally 20 DWG The organization has been demonstrated that all pesticides handled, used and/or applied by persons who have completed the necessary training. Some document were reviewed, i.e.: - Training Need Identification to improved human resources, year 2015 at Central Estate. The results, i.e.: Training of Handling and Usage of Hazardous Materials. It was attend by 2 person of warehouse personnel, 2 (six) persons of maintenance foreman (Mandor), and 15 maintenance employees who related to hazardous substance. - Letter of Central Estate Manager on March 18, 2015, concerning Training of Chemical Usage. The letter said that; request of training for all pesticides / chemical-applying worker (according to Decree of ministry of labor: 187/Men/ Letter from Commission of Pesticide and Fertilizer Monitoring. The Government of Province No /KP3/KS/I/2014 and 14152/KP3/KS/I/201 for the 2(two) GMKJ employee who have trained related to Limited Pesticide Usage. During the estate visit in Barat Estate, it was found the truck tank which used to spraying activity was not completed with MSDS and also the responsible foreman on duty didn t have the MSDS related chemical used to readily available for easy reference. This was raised as major non-conformity NCR b of 22. There is evidence that the organization has defined a mechanism to ensure that all chemical-applying worker not consist of pregnant women and not pregnant nor breastfeed their babies, even for the company s sub-contracted workers. There is applied mechanism to ensure that all sub-contractor workers are obeying to company s policy. An example is a Work Order Letter No.: 18/GMKJ-SDE/EXT/2014, date December 31, 2014 to certain sub-contractor. Based on the letter, the third party should be do not employ pregnant women and not pregnant nor breastfeed their babies, menstruating women, and employ children. In the other hand, the organization has conducted brief of chemical technical spraying to sub-contractor s personnel, i.e.: date October 11, 2014 at Division III. The brief was included about personnel protective equipment (PPE). During this recertification audit at Jorong Mill and Tengah Estate, there is a chemical-spraying activities and it were observes the workers were well understand what their job and responsibilities related their job

26 Page 26 of 80 risks and complete personal protective equipment were found wear during the workers perform the job including how they were dispose the chemical container used as responsibly manner but some of face shield used has already opaque and need to be replace and it has been raise an observation. The wash room for sprayer has already available but only to wash the PPE used by worker and their cloth still bring to home as they are still be contaminate their family member clothes when it was washed together In the same container at home as it has described in the SOP No. SOP/GMK-AGRO/01/18 related Chemist PPE Washing and used chemical container handling. It was raised as observation. There is evidence that the organization has perform specific annual medical surveillance for pesticide operators, for example: - There is Report of Measurement/Examination Report Working Environmental and Medical Check Jorong Mill and Estate Year of 2014, Document No.: 26/DHU/BK3-MDN/XII/2014, issued by Kemenakertrans Sekretariat Balai Keselamatan dan Kesehatan Kerja Banjarmasin; The medical checkup was include: - Cholinesterase (consist of 20 women worker) Tengah Estate Manager issued letter no. GMKJ-SC/PKES/2015 dated March 18, 2015 regarding medical checkup for all subcontractor, especially for sprayer as recorded as sub-contractor worker and work as chemist worker at Tengah Estate. From interviews of female sprayers at Tengah Estate, they said that they undergo medical checkups once a year and this includes blood and urine test and checks for headaches or skin itchiness. Sprayers interviewed at all estates also mentioned that they receive free supply of milk from the management once a week. The milk serves to neutralize the effects of pesticide poisoning and it is required by law in Indonesia to provide milk to workers handling pesticides. CR4.7 All estates have documented occupational safety and health (OSH) policy. Example for this fact is Tengah and Barat Estate OSH policy dated 2 January 2014; and Jorong Palm Oil Mill OSH policy dated 2 January 2014, which is signed by the vice president of PT.Gawi Plantation. The OSH policy includes documented objectives and targets, i.e. comply with the company s OSH procedures No. MNL/GMK- SMK3/01/01, Rev.0 2 January 2014, committed to wearing of Personal Protective Equipment (PPE) at work sites, and managed potential work risks at the site. As sighted from Central and West Estate documents, the organisational team of Estate OSH structure has already been available but still not approved by the Head of Social, Manpower and Cooperation Office of Kalimantan Selatan Province as required by Indonesia law and regulation also for Jorong Mill still not approved yet, Regular reporting system to the related responsible local government also were sighted as they were observed report quarterly which consist of the OHS team activities such as safety patrol, inspection, regular meeting and emergency drill, summary of accident report using Frequency Rate and Severity Rate calculation record activities were reported only for first quarter 2014 not for quarter II,III and IV 2014 and quarter I,II They were raised as non-conformances. All estates provide National Employee Social Security (Jamsostek) to 180 permanent employees, as sighted from sampled payslips of 5 harvesters of Barat Estate, as verified with interview. According to the company s Work Instruction for Jamsostek Participants and Fees, the amount paid by the company for Jamsostek contribution is 3 % of the employees' basic salary, while another 2% payment is made through regular deduction of their basic salary. It has been verified paid correctly. As for contract workers, Barat Estate deducts the amount required for their insurance against payment to the respective contractors, and pays this insurance amount directly to the relevant authority to ensure that all contract workers are covered with insurance. The estates have records of annual medical check-up provided by internal hyperkes company medical doctor on rotational basis for permanent workers performing high-risk works, e.g. chemical storehouse operators, sprayers, weeding, and harvesters but no available audio metric test result for employee who working in the area which have more than 85 db noise such as electrical generator operators as required by Transmigration and Man Power ministry regulation No.2/MEN/1980 related regular medical test for employee. For Jorong Mill employee, annual medical checkup also never been performed during the time. This was raised as major non- conformity NCR a of 22. The last medical check-up report for Tengah Estate is dated 4 February 2015, while for Barat Estate dated 20 January Both are available and records have been prepared on recent check-up completely performed. Medical check-up reports blood cholinesterase levels. Workers at Tengah Estate were identified having high blood cholinesterase level and the doctor produced recommendation letters for workers found with high cholinesterase levels, stating that these workers should not do insecticide spraying work for at least one month and there were an objective evidence has been obtained indicating that the company has followed up the doctor recom-

27 Page 27 of 80 mendation to temporarily transfer these workers to carry out other works. Some of permanent and subcontractor workers interviewed stated that they have undergone medical checks, and based on review of Barat Estate s medical examination records, such medical check-up records were available for three interviewed harvesters. Jorong Mill has identified and documented Occupational Health and Safety (OHS) risks for all mill activities, although this was documented under its 6 January 2015 environmental aspects and impacts register. Also in Jorong Mill, Tengah and Barat Estate have implement the work permit system as it was found in their standard operating procedure No. SOP/GMK-SMK3/01/10 Rev.0 2 January The work permit will needed for several work such as hot work, confined space, working at high and some working, which are not usual performed during the time. Central, West Estate and Jorong Mill has Hazard Identification, Risk Assessment and Risk Control document for 2015, dated 6 January 2015 for all estate activities including spraying, manuring, harvesting, workshop activities, generator, truck transportation, chemical and material storage, and waste handling. But however in Required PPE using for certain places such as Jorong Mill Boiler area, harvesting activities in Tengah Estate, John Deer ini truck driver in Barat Estate Division 2, Truck driver for FFB transporter in Jorong Mill not using the PPE and proper shirt when entering this area as detailed in their Hazard Identification, Risk Assessment and Risk Control document. This was raised as non-conformity NCR b of 22. It was found mini truck John Deer 05 in Tengah estate was not completed with horn and mirror as a warning system when they are operated. This was raised as non-conformity NCR a of 22. Also found in Jorong Mill the stairs with more than 45 degree slope which not completed with handrail to prevent any accident when used. This was raised as non-conformity NCR b of 22. In some area where need using ear muff such as in electrical generator room are found operator using only ear plug as it is known not suitable for the available risk in this area. This was raised as an observation Hand wash not available in the temporary waste storage and eyewash station also not available in the Jorong Mill laboratory. This was raised as an observation The company has an emergency response procedure documented under Standard Operating Procedure No. SOP/GMK-SMK3/03/08 Rev.0 2 January 2014, including identification of potential emergency situations (fire, accidents, flood, explosion, and chemical leakage) and a flowchart for Handling Fire Emergencies. Jorong Palm Oil Mill has records of emergency response training and simulation on 22 May 2015 for over 50 workers, as well as land burning simulation on 22 May 2015 for 35 estate division staffs. It was confirmed through interviews with three harvesters that they had attended the emergency response training. Notes of the training results are maintained, including the steps of the accident & emergency response procedure. Records of other OSH training, i.e. for first aid and management of hazardous waste, are available as described under CR4.8. Fire emergency training for Barat Estate was conducted on 4 February 2015 for 46 staffs. Training on emergency response procedure for fire was conducted in March 2015 for 31 workers at Tengah Estate unfortunately some emergency scenarios such as earth quake, chemical spill etc. never include in the drill, it was raised as an observation also some safety induction in several area such as Jorong Palm Oil Mill, Central and West estate not consistently implemented. This was raised as an observation During site visits, foreman (Mandor) in Central, Barat Estates were found having brought first aid kits to the field, and those are located at other locations such as estate office, workshops, chemical storehouse, etc. It was observed that the first aid kit at Division 2 of West estate office a complete pack of first aid kit. However, at Tengah Estate Division 1, harvester and manurer foreman also have a first aid kit. Evidence of OHS (e.g. PPE provided to workers) has been found in the Jorong Palm Oil Mill. However, there are aspects must be improved such as Need some refreshment regarding PPE maintenance and storage procedure as they were found not safe and hygiene to use during the site visit in Tengah Estate. This was raised as an observation Chemical storekeeper in Tengah Estate is provided with helmets, boots and goggles but look not much aware to the visitor that need to wear the PPE while entering his area as it was already arranged in procedure No. SOP/GMK-SMK3/01/07 related to Personal Protective Equipment. Contract field-maintenance workers are required to wear boots and provide by company. Female contract spraying/manual maintenance workers interviewed in Tengah Estate are provided with Personal Protective Equipment (PPE) by the company, including masks, gloves, and plastic aprons. The sprayers are provided with appropriate cloth gloves for spraying activity. While they wash their PPE at washing facilities at the division office and they store their PPE in the estate store. At Barat Estate, spraying workers are also providing with rubber gloves, goggles; masks and plastic aprons by the company. PPE wash in washing room and storage facilities are provided for the sprayers. The contract workers in Tengah and Barat Estates were aware that

28 Page 28 of 80 they could get medication or treatment for minor illnesses from the estate clinic as the estate management allows them and this medication is to be paid for by the company. As a matter of fact, they currently recorded in estate clinic record for medication. Based on interviews with harvesters at Barat Estate, there was a worker whose part of his hand was blister by slippery accident while the harvesting activities The estate s report of this accident occurring on 2 February 2015 is available and the company has documented preventive actions and followed up by requesting their Human Resources Department (HRD) to apply for insurance payment for the worker as required by their Working Procedure of Handling and reporting of OHS accident No SOP/KLS-SMK3/01/15 Rev 0 Year 2 January CR4.8 As sighted in the memorandum of Human Resources Manager No.GMK/MO/14/2015 related on the training program for estate employees in Barat and Tengah Estate. The training program consist of Chemical handling training, Integrated pest management and early warning system, and HCV training were well filed including their signed attendance list, training materials and completed with the training evaluation. Jorong Palm Oil Mill has also documented 2015 training plan, including training plan for OSH hazard and risk identification, workplace safety inspections, first aid training, hazardous waste management, and emergency response training. The estate and Mill have documented worker identification that requires training. For example in January to June 2015, Tengah Estate has also identified the training need for Harvesting training for harvester total 45 harvester and maintained training participant record. Barat Estate and Jorong Palm Oil Mill and estate training programme in 2015 has also been observed, including harvesting, fire emergency and pest management trainings. The company s estates maintain records of trainings delivered by contractors to their workers. For example, in Central harvesting training was delivered for Mill Staff on February Signed attendance 15 participants list for Emergency Response Procedure, self assessment training including the training evaluation, Report training result employees including the post training evaluation result was well documented in the mill office was sighted. The estate also carries out evaluation of workers understanding on the trainings provided. Barat Estate holds records of competency certificates for employee such as General OHS specialist certificate and several available contractors, i.e. contractors for Sprayers and road maintenance. Selection of contractors providing spraying workers is done. Certificates of competency from Chamber of Commerce & Industry for two contractors providing spraying workers. However it was found John Deer mini truck operator, wheel loader, crane operator and boiler operator did not having a certificate which proved they are competence to operate the equipment proper and safely. This was raised as non-conformity NCR a of 22. Compliance status: Non Compliance NCR a of 22 There is no mechanism on monitoring the effectiveness of SOP implementation causing several inconsistency between procedure with implementation such as: 1. Domestic waste not separate/mixing between organic waste with inorganic waste in warehouse office Tengah Estate, office division Batalang unit division 1,3, and 6 so this is condition inconsistency with SOP/GMK-SMK3/01/14 page 4; 2. SOP / GMK-AGRO / 10/01 on Engineering and Workshop are not implemented properly as mentioned in Section 8.1 of the SOP and monthly report and work evaluation is not available as set out in the SOP. 3. Mill Maintenance Procedure No.SOP /GML-AGRO / 03/04 are not in accordance with the implementation. Available forms, Annex 8.2, Annex 8.3 and Annex 8.4, in the SOP never been used as part of mill maintenance procedure NCR b of 22 Record of monitoring the implementation of SOP s is not available, then the organization cannot perform an evaluation to measure the effectiveness of SOP s NCR of 22 Monitoring result of evaluation SOP s effectiveness still not available and already for agronomy only and

29 Page 29 of 80 still on progress and not finish yet. NCR of 22 a. It was found mini truck John Deer 05 in Tengah estate was not completed with horn and mirror as a warning system when they are operated. b. During the estate visit in Barat Estate, it was found the truck tank which used to spraying activity was not completed with MSDS and also the responsible foreman on duty didn t have the MSDS related chemical used to readily available for easy reference. NCR of 22 a. It was found John Deer mini truck operator, wheel loader, crane operator and boiler operator did not having a certificate which proved they are competence to operate the equipment proper and safely. b. It was found in Jorong Mill Boiler area, harvesting activities in Tengah Estate, John Deer truck driver in Barat Estate Division 2, Truck driver for FFB transporter in Jorong Mill not using the PPE and proper shirt when entering this area as detailed in their Hazard Identification, Risk Assessment and Risk Control document. NCR of 22 a. There is no available audio metric test result for employee who working in the area which have more than 85 db noise such as electrical generator operators as required by Transmigration and Man Power ministry regulation No.2/MEN/1980 related regular medical test for employee. For Jorong Mill employee, annual medical checkup also never been performed during the time. b. Found in Jorong Mill the stairs with more than 45 degree slope which not completed with handrail to prevent any accident when used. Principle 5: Environmental responsibility and conservation of natural resources and biodiversity Criteria assessed: CR5.1, CR5.2, CR5.3, CR5.4, CR5.5, CR5.6 Criteria not assessed: CR5.4 Findings: CR5.1 The mill has their UKL and UPL documents which was last revised on Sept 08 and approved by the Head of Regional Body for Management of Environmental Impacts on 11 February No.660/06/BLH/2011 This document includes details of the mill's activities pertaining to oil palm processing and production, and CDM project, and also analysis results for air quality, NOx, SOx, particulate, carbon monoxide, land water quality, biological components and so on. All estates have their UKL and UPL document which was last revised on 11 February 2011 and approved by the Head of Regional Body for Management of Environmental Impacts on 24 February The UKL and UPL document includes details on the estate activities, usage of natural resources, climate, air and water quality, geography and other environmental aspects, social aspects, potential environmental impacts, and monitoring. The mill and all estates have also conducted their Identification of Environmental and Occupational Safety Aspects and Impacts dated 11 March 2015 for the mill, 14 March 2015 for Central and West estate. The document covers environmental and safety aspects and impacts for estate work activities (eg. manual treatment, mechanical treatment, harvesting and tree maintenance), office activities, housing, management of hazardous wastes and domestic wastes, usage of natural resources, warehouse operations, transport and so on. The mill and all estates prepare a report every 6 months based on their UKL and UPL documents as required by legal requirements includes reports on air quality, emissions from electrical generator, groundwater and soil quality, and noise. In West and Central Estate, such report includes result of analysis of the same parameters, as well as of odour levels, and amount of hazardous waste produced. This is reported semi-annually, while some parameters to be reported annually have been sighted in the estate s December 2014 report, e.g. analysis of employment opportunities, local community perception and CSR activities. The analysis results indicate no excess towards legally permitted standards. The last report was pre-

30 Page 30 of 80 pared on December 2014 and includes monitoring and analysis results for ambient air and noise, water quality, and evaluation of results as they were sighted on report number 110/AP/IV/2015 for air ambient test result in Central estate, 111/AP/IV/2014 dated 24 June 2015 for Clean Water test result from ground water sample point, No.04/GMK-HSE/PKSJ/IV/2015 related to sampling point notes in Jorong Palm Oil Mill. The analysis results for mill air and water quality show no exceedance of environmental parameters to legal standards. From the reports, it was found that all environmental quality parameters measured were within the legal standards. The report has already been distributed to the related government department which concern to this UKL and UPL as required by law and regulation. CR5.2 PT Gawi Makmur Kalimantan (Barat and Tengah estate) has conducted an assessment and identification of protected, rare and endangered species and HCV habitats within their area. An identification of flora and fauna has been carried out by a consultant, Re-mark Asia in year 2012 (July to August 2012). The results of these assessments are documented in HCV assessment report. In the HCV assessment report it was stated that 5 types of HCVs were identified in the PT Gawi Makmur Kalimantan (Barat and Tengah estate) (i.e. HCV 1, HCV 2, HCV 4, HCV 5 and HCV 6). Identified HCV1 areas are riparian (in Asam-asam river, Kematian river, Cendolan river and Katal-katal river) and resorvoir areas (in Paikat hill, Buluh hill and Tandukan hill) where include HCV 1.2 and 1.3 areas due to identification of many wildlife species of protected and endangered status as explained above spread throughout PT GMK area; HCV2 area are Buluh hill; HCV 4 area are riparian (in Asam-asam river, Kematian river, Cendolan river, and Katal-katal river) and slope > 40% (Paikat hill, Buluh hill, Tandukan hill), HCV5 area is Buluh hill, Paikat hill and Tandukan hill because the community seek stump of ironwood in third area and HCV6 area is Saimah s grave. Total overlaid HCV area in PT GMK (Barat & Tengah estate) plantation is 2, ha. Several protected species have been found in PT GMK area (Barat and Tengah estate), including the following species: there are 108 flora species where there are 9 flora species categorized as protected species according to CITES and ministry of forestry consist of aren/enau (Arenga pinnata) in Barat estate, banggeris (Koompassia malaccensis) in other estate owned company, bayur (Pterospermum javanicum Jungh) in Barat estate, forest durio (Durio kutejensis Becc) in other estate owned company, Keruing (Dipterocarpus costulatus) in other estate owned company, red meranti (Shorea ovalis) in Barat estate, white meranti (Shorea lamellata) in Barat estate, jelutung (Dyera costulata) in other estate owned company, rengas (Gluta renghas L) in Barat area, and ironwood (Eusideroxylon zwageri T,et B) in Barat area; whereas fauna species founded 53 fauna species where there are 20 fauna species consist of alap-alap erasia (Falco tinnunculus) in Barat estate, white stork (Egretta spp) in other estate owned company, black hawk (Ichtyophaga sp) in Barat estate, enggang klihingan (Anorrhinus galeritus) in Barat estate, java gelatik (Padda oryzifora) in Barat estate, raja udang meninting (Alcedo meninting) in other estate owned company, rangkong badak (Buceros rhinoceros) in Barat estate, tiong emas (Gracula reliosa) in Barat estate, proboscis monkey (Nasalis larvatus) in Barat estate, honey bear (Helarctos malayanus) in Barat estate, beruk (Macaca nemestrina) in Barat estate, mouse deer (Tragulus sp) in Barat estate, kijang (Muntiacus muntjak) in Barat estate, jungle cat (Felis bengalensis) in Barat estate, porcupine (Hystrix brachyurum) in Barat estate, lutung (Trachypithecus auratus) in Barat estate, owa-owa (Hylobates muelleri) in Barat estate, rusa (Cervus univcolor) in Barat estate, pangolin (Manis javanica) in Barat and Tengah estate, sapit crocodile (Tomistoma schlegelii) in other estate owned company. A HCV management and monitoring plan and their recommendation on 2015, for all identified HCV areas and wildlife monitoring in PT GMK (Barat and Tengah estate) have been established by PT GMK. The document describes the activities planned for each identified HCV (such as installation of signboard in HCV area, socialization about HCV to worker and around community, marking with paint as limited access chemical activities in riparian, patrol, monitoring of quality water, identified of erosion area, restoration of riparian etc.), and timeline for each identified HCV.Wildlife monitoring conducted regularly every 3 month, and the last monitoring recorded on March 16 th, 2015 at Asam-asam riparian zone block H37. The company also conducted HCV socialization to the community which is encroach forest in Gunung Pakat, Gunung Tandukan and Gunung Buluh as well as the gold miner at Asam-asam river on July 11 th, Even though HCV, species and habitat management plan is available, but that activity has not conducted yet since HCV Management plan for year 2014 ad 2015 programs are still not implemented mostly, for example field boundary demarcation activity for HCV areas, erosion monitoring, HCV 5 monitoring, and rehabilitation on degraded HCV areas including Asam-asam riparian zones rehabilitation is not implemented according to program plan. The company failed to demonstrate the implementation of planned HCV management since 2014, and this condition is raised as Non-Conformity (NCR of 22). Education and socialization on RTE species has programmed and the latest socialization regarded to

31 Page 31 of 80 found wildlife handling and HCV conducted on July 28 th, 2015 in Tengah Estate. The company also provides a policy regarded to environment and biodiversity issued on March 3 rd, As an observation, the company should improve this policy with additional rule on prohibition of wildlife hunting, collect, capture or kill the species. HCV areas that exist in Barat Estate has not been monitored, the company cannot shows any document or report on HCV and RTE species status monitoring. The company must conduct and report a monitoring activity of HCV and species. This condition is raised as Non-Conformity (NCR of 22). Since there are some HCV 5 and HCV 6 identified within PTGawi Makmur Kalimantan areas and they are located set asides with existing rights of local communities, the company has mandatory to have agreement to manage those HCV areas. There is no agreement or memorandum of understanding available between the company and local communities related to HCV 6 management in Tengah Estate. This condition is raised as Non-Conformity (NCR of 22). CR5.3 The company has identified and record all generated waste from mill and estate activities. The wastes are classified by domestic waste and hazardous waste. Sources of waste and pollution are fertilizing processes, spraying, transportation, boiler operation, effluent ponds, power plant, land application, bunch processing and activities in emplacement. Pollution and emission source from Jorong mill, and Barat estate has been identified consist of location source (station), pollution and emission source, impact to human, machine and equipment, environment and impact management. In the estates and mills, waste management and disposal are implemented to avoid or reduce pollution by implementing documented procedure of Handling of Hazardous Waste (SOP/GMK-SMK3/01/14). Hazardous waste was kept less than 90 days, as permit and will be collected by licensed collector to proceed to processor and end user. This procedure also contains mechanism to dispose hazardous waste and agrochemical container. Hazardous and toxic waste collection; storage and transportation are recorded very well. PT NAZAR, a licensed company for hazardous and toxic waste handling, assigned by PT GMK as a partner to collect and transport the waste. The company has procedure of the handling of hazardous waste as guidance in handling of wastes (SOP/GMK-SMK3/01/14), and hazardous waste was kept less than 90 days before sent to licenced collector PT NAZAR, Flow of hazardous waste handling start from estate warehouse, which is record ex-container, and collect in the warehouse temporarily. Based on field visit at estate warehouse, there is a record of agrochemical used including its container. There is 40 litres (2 containers) of agrochemical taken by Division 5 on July 3 rd, 2015, and its container has been transferred back to the warehouse on the same day, then the container transferred to central waste storage. A warehouse clerk records the waste in hazardous waste balance, which contain data about incoming and out coming waste, completed with note and transportation manifestation and minutes of the hazardous waste handover. For example on May 29 th, 2015 there is 400 litres disposal waste collected and transported by PT NAZAR with manifest no Occasionally some of hazardous waste such as drums reuse by estate, for example as residual metal material trash can or fire drill equipment. In this case, it must a request from the user (estate) and completed with minutes of goods handover. Drums (ex-container) must be washed prior to use as trash can or other use and must be accompanied with minutes of ex-container washing signed by estate officer and warehouse clerk as shown a minutes on May 12 th, 2015 for washing 8 drums. PT Nazar as a partner of PT GMK for collection and transportation of hazardous waste has a license from Environmental and Forestry Ministry No year 2015 dated May 13 th, The license described kind of hazardous waste that may be collected or transported by PT Nazar, and agrochemical container is excluding. A contract No. 009/GMK- BJM/SPK/VI/12 dated May 4 th, 2015 between PT GMK and PT Nazar stated PT NAZAR also handles agrochemical container. PT Nazar is not allowed to handle agrochemical container either collect or transport. Then PT Nazar has some agreement contracts with another parties to manage or utilize hazardous waste, namely PT Wastec International, PT Muhtomas and PT Job Colouring. Licence of PT Wastec International has been expired on March 30 th, 2015, PT Muhtomas expired on June 24 th, 2010, and PT Job Colouring license is not listed in the contract. This condition causing uncertainty of safety waste handling and disposed, and this is raised as non-conformity (NCR of 22).

32 Page 32 of 80 Domestic waste handled well by making landfill for both organic and inorganic garbage. Estate also provide education to the workers and family on garbage separation, socialization by instalment signboard, monthly community service for cleanliness housing program CR5.5 There is no land clearing due to no replanting plan until year The company has zero burning policy as seen letter number by General Manager PT Gawi Mamur Kalimantan and has procedure of emergency response (SOP/GMK-AGRO/01/08) where include emergency response to land burning. Based on result of monitoring for risk of fire level year 2015, the average risk for year 2015 is low to moderate. Fire extinguishers and facilities available such as water truck non-nozzle, sand, shovel, bucket, water truck with nozzle, etc. for fire fighter emergency team when fire is happening in PT GMK. There is regular patrol program, to monitor activities that might cause of fire in company s area. Company conduct fire drill simulation and socialization to all workers and community surrounding plantation area. CR5.6 Company has identified the emission source dan pollution from mill and estate (Barat and Tengah Estate). When the emission and pollution source is: - FFB transport - CPO transport - Heavy equipment operational - Genset operational - Water pump operational - Waste water treatment plant (IPAL) - Land clearing - Fertilizing and spraying activity - IPM activity But, mill and both of estate still no has work program to reduce and minimize the significant emission and pollution and there is no record for that implementation. This raised as a non-conformity (NCR of 22). GHG calculation was created by the mill and estate, but the GHG calculation not used the RSPO template and there is no record that the GHG calculation used was endorse by RSPO. This is also raised as non-conformity (NCR of 22). Compliance status: Non Compliance NCR of 22 Based on PT Nazar s license from Environmental and Forestry Ministry No year 2015 dated May 13 th, 2105, PT Nazar as a partner PT GMK to collect and transport hazardous and toxic waste is not allowed to handle agrochemical container, but in fact this company collect and transport that kind of waste. PT Wastec International, PT Muhtomas and PT Job colouring as a partner of PT Nazar and PT GM process and utilize hazardous waste does not have valid license to handle the waste. PT GMK cannot show a valid license of that company in the contracts. This condition causing uncertainty of safety waste handling and waste disposed of responsibly. NCR of 22 Mill and both of estate still no has work program to reduce and minimize the significant emission and pollution and there is no record for that implementation. NCR of 22 GHG calculation was created by the mill and estate, but the GHG calculation not used the RSPO template and there is no record that the GHG calculation used was endorse by RSPO. Principle 6: Responsible consideration of employees and of individuals and communities affected by growers and mills Criteria assessed: CR6.1, CR6.2, CR6.3, CR6.4, CR6.5, CR6.6, CR6.7, CR6.8, CR6.9, CR6.10, CR6.11, CR6.12, CR6.13

33 Page 33 of 80 Criteria not assessed: CR6.7, CR6.8, CR6.9 Findings: CR6.1 PT Gawi Makmur Kalimantan has conduct and published a report regarding Social Impact Assessment (SIA) covering all activities under company s operation in Tanah Laut Regency, Tanah Bumbu Regency, Jorong Palm Oil mill in Province and estates in Paser Penajam Regency, East Kalimantan Province. In line with this SIA report there was evidence of attendance list of surroundings community such as from Benua Lama village, Damit hulu, Batalang, Pamalongan, Batu Mulya, Sabuhur, Sukaramah, Setarap, Alkautsar, Pasir Puith, Sungai Cuka, Bebulu Darat, Lebanga and Satui Barat villages. There were pictures during assessment activities also. Potential impacts that has been identified are: a. Key Issues regarding social problem: workforce and working opportunity; local economic development; tenure and legal compliments; environmental Management; coordination and communication. b. Internal Issues: Workforce and remuneration; worker facility and Occupation Health and Safety; Personal Protection Equipment c. Positive and sustainable impacts: d. Company s Internal and External interaction e. Social Risks f. Company s activities g. Challenges of Estate Internal Management The SIA report consists of information about history of the company, positive and negative impacts, action plan to manage identified impact and monitoring the action plan. The identified positive impact such as, improve and increase diversity of community s income. While the negative impact was destruction or damage of community s road because of FFB transportation activities and pollution. Deep check into the contained found that the Social Impacts Management Plan has not been following the social impacts analysis. Social issues that not yet been covered in the Social Impact Management plan are: a. Land Acquisitions Program for community s land inside HGU and its conflict potentials. b. Social risk regarding coal mining activity inside Estate (HGU) areas. c. Local Economic Strengthening activities This rised as non-conformity (NCR of 22). The existing social impact Management Plan has developed by the company. In the main audit, company couldn t showed evidences regarding stakeholder participations regarding plan development. This finding has risen as non-conformity (minor). In this surveillance GMK Jorong still can t show these evidences. Company has not yet conducting review and revision regarding Social Impact Management Plan with participation of affected parties. This situation escalated the finding into major non-conformity from last audit (NCR of 22). CR6.2 The company has internal and external communication Standard Operating Procedure i.e. no: SOP/GMK- AGRO/01/20, rev.02, valid since 24/02/2014. The method of communication can be made vertically and horizontally in form of meetings, signboard, letter, , sms and socialization. While for external communication, CSR manager or community relation was responsible to accept, make archive, disposition and prepare sufficient responses to stakeholder. External communication could be in form of letter, , facsimile, telephone, direct communication, newspaper and other. There were evidences showed during surveillance, such as: d. Direct Communication. GMKJ has a list of stakeholder that routinely met (by public relation officer) every month; the list is updated in May 10 th The lists contain 19 stakeholders that consist of local formal and non-formal leader and members of District Leaders Meeting MUSPIDA/MUSPIKA. e. Minutes of events: Records of public relations activity with MUSPIKA f. Records of Communication and Consultation with stakeholders 2014/2015. The records contained 8 events of stakeholder communication/consultation with various issues such as road maintenance and support of heavy equipment to local community. GMK Jorong has identified and documented list of stakeholders. All related and strategic stakeholders from government and local civil society has been identified and listed. Contact persons, official address and phone number has also recorded in the list. This list indicated that GMKJ has not yet identified all of

34 Page 34 of 80 strategic stakeholders, especially parties that have enough ability and capability to influence the estate operation, such as suppliers, contractor and local coal miner (community and/or company). This finding raised as non-conformity (NCR of 22). CR6.3 Company still hold a system for complaint handling or conflict resolution i.e. SOP no. SOP/GMK- AGRO/01/15 valid since February 24 th 2014, states that: g. Branch controller/plantation controller/estate Head/Mill Head/Community relation and CSR head is responsible for conflict handling. h. Plantation controller/ Estate head/mill head submit reports to the Department Head of CSR/community relation/legal related to existing issues, grievance, claim, and conflict recorded in verbal or written. i. Department Head of CSR/community relation/legal collects related data and information. j. When the report was assumed as priority the next step was to identify option available for decisionmaking. k. Assign third party as mediator if no result or no agreement between both parties. Based on branch controller, the direction board will consider and prepare policy to resolve the conflict. The company has a logbook of communication with external stakeholder and archived all incoming letters. There was no letters regarding grievances and/or complaints from stakeholders and affected parties since last audit until this Surveillance. The Jorong Mill and Estate has also developed logbook from internal stakeholder (worker). Check into this log book found that there are 9 grievances/complaints that have been recorded into this logbook. Issues that recorded are: base camp or housing facilities; reward and recognition for worker; personal protection equipment; box of suggestions; and housing safety regarding theft. CR6.4 The Jorong Mill and Estate still hold a system for complaint handling or conflict resolution i.e. SOP no. SOP/GMK-AGRO/01/15 valid since February 24th, This SOP covers identification, calculation and compensation procedures to communities and other stakeholder, which is states that third party (local government) will get involved if there was no agreement made between the company and complainers. Company has provided evidences regarding negotiations and compensation records during surveillance. The only compensations records were regarding land acquisition and growth planted vegetation above (tanam-tumbuh). There was a list of land compensation GMKJ showed consist information regarding agreements since 2005 to Each documents consist records and data regarding the negotiation/compensation process and administrative legal compliment, such as: Copy of ID card; Payment Slips; Agreement; and declaration letters. The agreements has titled as Minutes of Compensation Payment for the Release of the Rights towards the Land and Planted Vegetation above. The last compensation process records was dated on April 8 th The compensation was paid to a community member of Ketapang Village for compensation of land and the vegetation above. CR6.5 Based on Company Regulation , article 8 regarding worker levelling, worker categories has divide into: staff; non-staff; permanent worker (SKU); and un-permanent worker (BHL). Documents regarding wages available for every types of worker, such as: l. List of permanent Worker (SKU) wage payments of each estate s divisions and mill for first and second payment in May 2015 (SKU worker salary paid twice in a month or every 2 weeks). m. List of un-permanent worker (BHL) wage payment of each estate s divisions and mill for first and second payment in May 2015 (SKU worker salary paid twice in a month or every 2 weeks). The list consist information such as the workdays, wage, deduction (insurance and contribution), nett total payments and the workers signatures. The definition of minimum wage has referred to Governor of Decree No /0632/KUM/2014 regarding Provision of Sectoral Minimum Wage, Province, This wage consist information regarding minimum wage for agriculture sector that is IDR ,00. This number is always adjusted every year. Company has also adjusted the minimum worker payment and issued a document of Standard and Policy of Non-Staff Wage improvement/adjustment for Area These records consist information regarding wage standard for Tanah Bumbu and other area (including Jorong). Checked to the payment record and wage

35 Page 35 of 80 standard documents found that company workers salary has comply with minimum wage payment regulation. The company also issued a document regarding Norms of Piece Rate and worker premium These documents contain information regarding wage standard that has been adjusted with regulations regarding minimum wage payment. The piece rate norms on this documents consist of: a. Harvesting job area b. FFB Loading c. Pruning d. EFB application e. Security f. Transportation (FFB, EFB and shell) Jorong Mill and Estate Has developed Company Regulation that appointed on June 30th 2014 by Province Office of Workforce and Transmigration. As stated on this appointment letter, this company regulation took affect since July 1st 2014 and expired in June 30 th The company regulation has consists 17 Chapter and 72 articles that has been deeply checked by the government and found comply with regulation. Jorong Mill and Estate has also developed working contract agreement for non-staff worker (SKU and BHL). The contract consist the term, conditions, rights and obligations of both parties (company and worker) such as: working relation; working hour, salary, code of conduct, and work termination. Other clauses that has not yet mentioned will refer to company regulations. GMKJ has showed two sample working contract documents as evidences during surveillance: a. Working Agreement of Un-Permanent Worker (Non Staff: BHL) No. 094/GP/j-M/PKK-BHL/VII/2015. b. Working Agreement of Permanent Worker (Non- Staff: SKU) No. 001/GP/j-M/PKWT-II/VI/2015. Deep check into these documents found that harvesting worker was not part of neither SKU (PKWT) nor BHL worker. Jorong Mill and Estate develop collective agreement letter with groups of harvester. A collective agreement letter of showed during audit was a letter of Marsono, issued in July This letter consist information regarding harvesting workers that has been represented by Marsono (13 workers); the piece rate price (contract values) for the harvesting order, harvesting location, and detail information regarding payment of each harvester. This contract has complied with minimum wage requirement but not comply with regulation regarding worker status. This finding is rise as non-conformity (NCR b of 22). Harvesting is one of main activity on palm oil plantation production system. According to government regulations (Minster of Workforce and Transmigration Regulation No 19 year 2012 regarding outsource, article 3), kind of jobs that could be outsource are supportive/additional jobs. The key point of this regulation is, if the jobs has terminated, the whole production process would not be disturbed/hampered. In other words, harvesting job cannot be outsourced. Practically, harvesting worker and some of maintenance worker has no direct contract to Company; they follow the collective agreement letter that signed by their group head. In consequences there is no payment records for each of them. This finding is also rise as non-conformity (NCR a of 22). The implementation of workers right regarding overtime has complies to regulations. The Company has stated their commitment regarding overtime in Company Regulation (Chapter VII, article 27), Overtime divide into 3 categories: regular day, weekly rest day, and official feast and religious day. Some form has been prepared and implemented as part of management system. The Overtime payment has comply to Decree Letter of Workforce Minister No. KEP.102/MEN/VI/2004 article 11 regarding overtime payment calculation. Deep check conducted into into the piece rate norm for harvesting and maintaining jobs. The norm of Piece Rate payment for Sunday and national holiday has not yet synchronized with Ministry of Workforce and Transmigration regulation no. 102 year 2004 regarding overtime. In this regulation, working in Sunday (and national holiday) defined as overtime, so the payments must comply with overtime payments regulation (the different between regular day and Sunday/holiday piece rate still too small). This finding rise as non-conformity (NCR c of 22). Company has provided workers with housing, educations, toddler and health facilities. Evidences showed during audit such as Facilities Fix Active 2015, worker complaint handling and summary of facilities maintenance plan. Field check conducted during surveillance and found that the workers have problems with clean water supplies. During surveillance found that the water quality for consumptions was very low

36 Page 36 of 80 It indicated that GMKJ has not provide adequate clean water supplies for daily consumptions for workers who live in emplacements. This finding rise as non-conformity (NCR of 22). In order to improve worker access to adequate, sufficient and affordable food, GMKJ has facilitated Worker Cooperative to open some business regarding food supplies. Management has showed Cooperative Finance Statement per June 2015 regarding the business. Cooperative shop point for food access is located in main office area. There is no worker emplacement that located in remote area. Small food stores owned by worker also available in all emplacements with competitive affordable prices. Interview result with workers found that sometimes Cooperative management conducted Cheap Food Program that supported by holding company (wingsfood). The food distribute to workers and sale with the basic prices. CR6.6 Company still maintain their commitment to their policy according to respects the right to all personnel to form and join trade unions of their choice and to bargain collectively. This commitment has updated in the new Company Regulation 2014/2016, issued in June 30 th Chapter XV, article 68 of these regulations stated that Company giving opportunity to all workers to form and join labour union as long as comply with all National Law and Regulations and will not disturb company operational. The same as main audit result, there s no labour union has established in the company, or local labour union that has official relation with GMKJ workers. In order to facilitate worker s rights to bargain collectively with the management, GMKJ and workers has formed Bipartite Cooperation Institution (LKS Bipartite). Based on interview to workers, they think that LKS Bipartite still could accommodate their interest regarding workforce issues. There were evidence showed regarding LKS Bipartite activities, as follows: a. Minutes of Meeting, May 29th 2015, attended by 28 workers. The main agendas were: LKS Bipartite Working Program; and Socialization of grievances/complaint procedure. b. Minute of Meeting, May 9th 2015, attended by 18 members, with the main agenda was Isra Mi raj celebration committee. CR6.7 Company s regarding minimum age requirement as the commitment of not employed or exploited children is stated in some documents such as: a. Management Policy and Commitment, June 1 st 2012, stated that Company would always open equal working and career opportunity to every citizen that comply with basic requirement, honest, above 18 years old, and meet the organization need of worker. b. Company regulation , article 5 regarding worker requirements, stated that one of the general requirement for worker minimum age is 18 years old, in health conditions and comply with qualifications. Checking to worker list of BHL and SKU, May 2015 found that all workers were above 18 years old. Field check in working areas such as mill, emplacement and estates conducted during surveillance. There s no child worker found employed in the fields. CR6.8 Company still maintain their policy about equal opportunities for all manpower of PT GMK signed on March 3rd, 2014 that states: 1. The company gives an equal opportunity for manpower to gain the worth occupation and income. 2. The companies will places any manpower based on skill, competency and other position requirement and operational activity needs. As sighted on company s list of workers and employee there are approximately 657 workers of West Estate come from Province and other province in Java island such as East Java, West Java Province. During 1st surveillance, Jorong Mill and Estate also showed Job Vacancy announcements as evidence regarding worker recruitment. This announcement mentions general requirements such as education background, age, working experiences and personal competencies. No statement that consist of discrimination issues stated in the announcements. Workers of all ethnicities and religions, including Muslims, Catholics and other Christian denominations are provided with their respective places of worship such as mosques and churches in each estate. No workers interviewed on-site complained about any form of discrimination from the management of the estates or mill. If any discriminative issued rise among workers and/or among workers and supervisors, workers know how to response by submitting their complaints to higher supervisor or LKS Bipartite.

37 Page 37 of 80 CR6.9 PT Gawi Makmur Kalimantan (GMK) management has documented a written policy to prevent sexual harassment and all other forms of violence against women, as well protection of their reproductive rights. This policy issued on March 3rd 2014 by Vice president director. This policy stated three key statements as follows: a. GMK aware of sexual harassment definition that covered all actions, verbal and/or non-verbal that lead to sexual and law violations. b. GMK against all actions that lead to sexual harassment and commit to create a better working environment that free from sexual harassment actions. c. GMK will give punishment/sanctions to all workers (as determined by regulations) if any sexual harassment happens. Reproductive rights has clearly stated in Company Regulation , such as: article 36 regarding giving birth allowances and Article 42 regarding Maternity and menstruation leave. Two samples of maternity and menstruation leave records (form H1) showed during surveillance indicate that this policy has implemented. The company already established special grievance mechanism related to the issue and handling by the gender committee. The company established a Gender Committee, with representatives from each estate division. There was a minute meeting of gender committee activity in May 5th 2015 that has 3 main agendas as follows: a. Form a Women Committee and appointed a leader for GMK Central Estates b. Socialization of cases handling regarding gender based violations. c. Socialization to all pregnant woman who works at fertilizing jobs to report to management. There are no sexual harassment cases, complaint and/or grievances recorded in gender committee complaint logbook. It indicates that there is no case reported so far. Interview with women workers has conducted during surveillance, they exclaim that know what is sexual harassment and what is gender-based violence. They also convinced that all workers and supervisor has treated them well in working area and in emplacement. They know where and to whom they complaint and/or submit reports if any cases happened to them. CR6.10 The same result with main audit, FFB price was defined by meeting between related parties such as growers, smallholders and National Estate Agency. All interested parties can obtain this price decision from the agency by print out or sms service. There was FFB purchasing agreement with third parties as follow: 1. No. 115/PJB-TBS/GMK/X/12 on October 29th, 2012 with Usaha Sejati Mandiri Cooperative, placed at Harapan Maju village, Batu Licin, Tanah Bumbu Regency. 2. No. 111/PJB-TBS/GMK/X/12 with Pemuda Makmur Kelapa Sawit Cooperative. 3. No. 175/PJB-TBS/GMK/III/14 with Farmer association Karyan Tani. No. 136/PJB-TBS/GMK/V/2013 with Rukun Tani Farmer Group. No. 105/PJB-TBS/GMK/V/12 with Cipta Prima Sejahtera Cooperative. This is all agreement has the same template that consists of term and conditions such as: FFB requirements (minimum weight, no Dura seed, not being claimed by other party), delivering procedure, location and time delivery, pricing and payment conditions. On this surveillance commitment regarding fairly deal and transparently with local business also checked to other local business partner such as FFB transporter and contractors. Jorong Mill and Estate showed list of active local business partner, consist of 4 contractors of construction services, and 3 FFB transporters. All of contractors has comply with regulation according to outsource requirements, and the company has conducted fairly trade with them. Evidences showed during surveillance were contract agreement, contractors legality and payments records, such as: a. Working Agreement Letter, No. 06/SPK/GMK-Tengah/V/2015, issued in May 1 st 2015, for EFB Transportation. b. Report Delivery Letter of CV Cahaya Muda, July 15 th Attached to this latter detail information regarding EFB traffic of each vehicle. c. Payments records of CV Cahaya Muda period I, June July 2015, for EFB transportations. One of contractor has been interviewed during surveillance. He claimed that company has deal fairly and transparently with him. He hope that this cooperation could be sustains. CR6.11 Jorong Mill and Estate has developed CSR program, consist of activities that giving contribution to local

38 Page 38 of 80 development. The program divides into 4 activities, such as: educations support; local traditional, national and religion holiday celebration; environmental support; social and community contribution. There were reports showed regarding CSR program of January June 2015, for three estates as follow: a. Kebun Barat. There are 8 activities such as heavy equipment support, student transportation and allowance for honorarium teachers. Total contributions that come from these estates were IDR b. Kebun Tengah. There are 8 activities such as heavy equipment support, student transportation and villages identity boards. Total contributions that come from these estates were IDR Some records samples such as payment and minutes has been checked during surveillance and found complied. CR6.12 Based on Company Regulations, article 7, letter (e) stated that Special/Foreign Employee is foreign employee that bonded by working relations with the company that has been permitted as Foreign Worker from National Government (c/q Ministry of Manpower and Transmigration). This statement is a documented policy regarding company s policy for not employed trafficked workers. Checking in to the list of worker 2015 for permanent and un-permanent workers found that all workers in GMKJ are Indonesian. Field checked conducted during surveillance confirmed that there s no indication of forced and trafficked worker found in GMKJ operation areas. CR6.13 Gawi Makmur Kalimantan has published their commitment regarding respecting human rights that documented as Company policy in July 1 st 2015, signed by Vice President Director. This policy stated that GMK as a company respects Human Rights of worker and business associates, that detail as follows: a. Commitment to comply all Law and regulations, national and verified international laws of Human Rights. b. Respects every workers right to join organization as long as not conflicted with government regulations. c. Respects every workers right to conduct their private rights as long as along with culture, customs and regulations. d. Open working opportunities to every citizen that comply with company s requirement and qualification process. e. Giving guarantee to all workers from disturbances, harassment and physical threats and/or verbal to personal and family members. f. Prohibit discriminative attitude and threats based on gender, race, ethnic and religion, to all workers. g. Will for not conducting working agreement with other organisations that has been recognised and/or indicatively suspected conducting practices that not complied with Human Rights Principles. During this 1st surveillance, company has showed evidences regarding socialization of Human rights policy. Based on minutes meeting and attendant list, July 11th, 2015, the socialization has been attended by 17 staffs of Tengah Estate. Socialization for employee of Barat Estate conducted in July 31st, 2015 and attended by 14 staffs and workers. NCR of 22 Found that the Social Impact Management plan does not covered the Land Acquisitions Program for community s land inside HGU and its conflict potentials; Social risk regarding coal mining activity inside Estate (HGU) areas; Local Economic Strengthening activities. NCR of 22 Company has not yet conducting review and revision regarding Social Impact Management Plan with participation of affected parties. NCR of 22 List of stakeholders of PT GMK has not yet identified all of strategic stakeholders, especially parties that has enough ability and capability to influence the estate operation, such as suppliers, contractor and local coal miner (community and/or company). NCR of 22 a. Status of harvesters workers still not comply with national regulation. Because according to the National Regulation number Minster of Manpower and Transmigration Regulation No 19 year

39 Page 39 of regarding outsource, article 3. b. Harvesters and maintenance workers in estate still no have contract letter will explained about rights and obligations for both parties (working hour, payment calculation, deduction, overtime, leave day, and others. c. The norm of Piece Rate payment for Sunday and national holiday has not yet synchronized with Ministry of Workforce and Transmigration regulation no. 102 year 2004 regarding overtime. In this regulation, working in Sunday (and national holiday) defined as overtime, so the payments must comply with overtime payments regulation (the different between regular day and Sunday/holiday piece rate still too small). NCR of 22 During surveillance found that the water quality for consumptions was very low It indicated that Jorong Mill and Estate has not provided adequate clean water supplies for daily consumptions for workers who live in emplacements. Compliance status: Non Compliance NCR of 22 Found that the Social Impact Management plan does not covered the Land Acquisitions Program for community s land inside HGU and its conflict potentials; Social risk regarding coal mining activity inside Estate (HGU) areas; Local Economic Strengthening activities. NCR of 22 Company has not yet conducting review and revision regarding Social Impact Management Plan with participation of affected parties. NCR of 22 List of stakeholders of PT GMK has not yet identified all of strategic stakeholders, especially parties that has enough ability and capability to influence the estate operation, such as suppliers, contractor and local coal miner (community and/or company). NCR of 22 a. Status of harvesters workers still not comply with national regulation. Because according to the National Regulation number Minster of Manpower and Transmigration Regulation No 19 year 2012 regarding outsource, article 3. b. Harvesters and maintenance workers in estate still no have contract letter will explained about rights and obligations for both parties (working hour, payment calculation, deduction, overtime, leave day, and others. c. The norm of Piece Rate payment for Sunday and national holiday has not yet synchronized with Ministry of Workforce and Transmigration regulation no. 102 year 2004 regarding overtime. In this regulation, working in Sunday (and national holiday) defined as overtime, so the payments must comply with overtime payments regulation (the different between regular day and Sunday/holiday piece rate still too small). NCR of 22 During surveillance found that the water quality for consumptions was very low It indicated that Jorong Mill and Estate has not provided adequate clean water supplies for daily consumptions for workers who live in emplacements. Principle 7: Responsible development of new plantings Criteria assessed: CR7.3; CR7.7; CR7.8 Criteria not assessed: CR7.1; CR7.2; CR7.4; CR7.5; CR7.6; CR7.7 Findings: CR7.3 Based on record of hectarage statement and production realization per years, was indicated planted from

40 Page 40 of 80 November 2005, in Barat and Tengah Estate, with information presented below: 1. Barat Estate a. Division 3; - Planted 2006 about Ha - Planted 2009 abput Ha b. Division 4; - Planted 2006 about Ha - Planted 2007 about Ha c. Division 5; - Planted 2007 about Ha - Planted 2008 about Ha d. Division 6; - Planted 2007 about Ha - Planted 2008 about Ha 2. Tengah Estate a. Division 6 - Planted 2006 abput Ha Based on HCV assessment document there is no statement that the planted location above contained with the HCV and/or from primary forest. This statement also similar with map from Citra Landsat and Land Covered from 2013 with data sourced is: - Indonesian Map 2007 (Peta Rupa Bumi Indonesia 2007) scale 1:50,000 - Forestry Based Thematic Map 2006 scale 1:250,000 - Forestry Map of Province scale 1:250,000 (Decree of Ministry of Forestry number SK.435/Menhut-II/2009, dated on July 23, 2009). Based on Satelite Image, Barat and Tengah Estate location did not have primary forest, when the condition is shrub, secondary dry forest, production forest, crop estate, housing, dry crop estate and opened land, and also coal mining. CR7.7 There is no evidence that the company use fire for plantation preparation. The company implements a zero burning policy as stated in their work instruction for land clearing. The company has emergency response procedure and fire extinguisher facilities as explained in the indicator 5.5 above. CR7.8 PT GMK has no new plantation development area nor proposed any new area to develop. PT GMK only manages the existing plantation area within the concession right. Compliance status: Full Compliance Principle 8: Commitment to continuous improvement in key areas of activity Criteria assessed: CR8.1 Criteria not assessed: - Findings: In 2015 Environment aspect and impact report to monitoring and evaluation of environmental performances this is include the program of monitoring action plan (Environmental Monitoring/Management Plan - RKL/RPL) and prepare biannual reports to the local environmental department, which include parameter analysis result such as air and water quality, ambient noise, and generator emissions. In addition, Tengah Estate has a documented environmental management programme for second semester of year 2014 as observed. However, the environmental management programme covers cleaning of spill at hazardous wastes temporary storage facility, including implementation progress report. In addition, the estate also plans to improve domestic waste management by organic and organic waste separation also the socialisation among the Jorong Mill and Estate and their available sub-contractors. It should also consider other aspects where environmental performance can be improved. Barat Estate also has a documented environmental management programme for year Based on chemical usage records in all estates, there is several evidence of implementation of chemicals

41 Page 41 of 80 use-reducing practice. For example, zero use of paraquat or minimised use of chemicals for pest management due to little or even no pest attacks found in the estate. Compliance status: Full Compliance 3.2 Status of Previously Identified Non-conformities During the main assessment certification, non-conformities against the RSPO Principle and Criteria for 2013 found. This non-conformities consist of 10 major and 12 minor classified. The company is given a timeframe to close all major non-conformities within 60 days and at time of first submission of this report to the RSPO. For the minor non-conformances, the company has provided their planned corrective action against these and for those, which could not be verified as closed through document checks, the closure of these minor non-conformities will be assessed during the next surveillance audit. A summary of all identified nonconformances, corrective actions taken and auditor conclusions is as: Criterion 1.1. (Major indicator 2) Records of information requests. NCR of 22 (Major non-conformity) There was no response evidence from the company for this following request letters : 1. Donation request from Karang Taruna Organisation of Pemalongan village on March 12, 2014 for organisation development and footbal tournament. 2. Donation request from Junior High School no. 3 Batu Ampar on January 15, 2014 for room renovation raw materials. Verification results of correction/corrective action: The company provided response letters for the both request to the community. There was response letters complete with reception letter as follow: 1. Letter no. 092/SM-GMK Barat/Umm/VI/2014 on June 3rd, 2014 to Karang Taruna Organization Leader of Pemalongan village that states that the request will send to the Banjarmasin branch management first and the response will be sent to the community within 3 weeks. 2. Letter no 093/SM-GMK Barat/Umm/VI/2014 on June 3rd, 2014 to the Principle of Junior high School no 3 Batu Ampar that state the request will send to the Banjarmasin branch management first and the response will be sent to the community within 3 weeks. Criterion 2.1. (Major indicator 2) Evidence of efforts made to comply with changes in the regulation NCR of 22 (Major non-conformity) There are indicated several evidence that the company not compliance to the law and regulation for national regulation and local regulation, such as: 1. In the document of Regulation List of the company, it was found the local regulation as guidance for the company to analyzed of ambient and emission, not included, i.e.: - Local regulation number 052/2007 about quality standarts for ambience and noisy - Local regulation number 70/2008 about quality standarts for emission 2. Based on result of monitoring well analysis the company just conduted analysis for field number G33, I33 and H32, but when confirmed to the land application permit number /626-KUM/2011 issued by Head of Regent of Tanah Laut Regency in June 13, 2011, mentioned that the company have an obligation to conduct monitoring well analysis in field number H Based on EIA document, in RKL/RPL table for monitoring, the company has an obligation to analysis water quality for all river in the company area in palm oil mill and estate. But, based on result of anal-

42 Page 42 of 80 ysis it was found just once record for river water analysis i.e.: Asam-asam river. Verification results of correction/corrective action: Company has submitted record/evidence of follow up correction i.e. 1. The company has submit record of list regulation for local regulation (number 053/2007 and 70/2008), on the list the company has mentioned the clause should be implemented by the company in pages number 126 and 127 of the list regulation. 2. The company has submitted the photograph of water monitoring well in field number H30 and also map of monitoring well in field number H The company has submit evidence of letter number 660/173-APDL/B: H/VI/2014 date June 17, 2014 from Environmental Agency of Tanah Laut Regency, about monitoring table (RKL/RPL table monitoring) in pages IV-4 mentioned that the company conduct the monitoring for river water quality analysis accordance to the map of environmental monitoring plan. Criterion 2.2. (Major indicator 2) Evidence that legal boundaries are clearly demarcated and visibly maintained. NCR of 22 (Major non-conformity) There are not boundary stone in add I to add III area, boundary stone not complete demarcated in west & central estate (primary area) and there are planted area outside legal land (land use right permit) where the company does not have policy, planning and action for condition it. Verification results of correction/corrective action: The company provided documents, such as: Monitoring boundary stone report for additional I-III areas dated on June 19, 2014 ((Map No , no and no ), list of inventory boundary stone each additional areas, map of boundary stone distribution each additional areas, photo/figure of boundary stone has been available in field). Photo/figure of new installation of boundary stone such as add III areas : GMK C1, GMK C3, GMK C11, GMK D0, GMK D6, GMK D7; and add II areas : GMK B18, GMK B19, GMK B00, GMK A11 to GMK A14. Whereas add I areas, there are not special boundary stone because boundary in north and east are asam-asam river, boundary in west is GMK areas (HGU no.1 year 1999, and boundary in south is add II areas). Map of distribution boundry stone in west and central estates and list of inventory and maintenance boundary stone in west and central estates. Photo/figure of replacement of boundary stone from pvc/wood into concrete such as GMK 10, GMK 11, GMK 22, GMK 23 and GMK 24. In add II areas, add III areas, west and central estate has installation of boundary stone plan for boundary stone has been loss where schedule it are July 2014, October 2014, January 2015, April 2015, and July Statement letter about there are not activities in outside legal areas ( ha) until obtained permit where describe of detail information for location it (no block, total areas and name of estate). There are chart/schedule of follow-up plan regarding process of get legal land. Criterion 2.2. (Major indicator 3) Where there are or have been dispute, proof of resolution or progress toward resolution by conflict resolution processes acceptable to all parties are implemented NCR of 22 (Major non-conformity) There was no evidence of the conflict resolution progress accepted regarding by the parties such as some villagers in block K10 division 5 amount of ha from Damit Hulu village amount of 1 Ha from Damit

43 Page 43 of 80 Hulu village. Verification results of correction/corrective action: The company has provided progress of conflict resolution, which is record of meeting with the villager from Damit Hulu village. There was record of the minute of meeting on June 11 th Information in the minute of meeting with land claimer which can not show the exact location of the land accordance with his certificate, the claimer become understanding of the content of Company s HGU certificate and will follow company s procedure regarding land used right. Whereas for other land claimer commit to follow company s procedure also for land compensation mechanism. The other land claimed by Damit Hulu village can not proved since the villager has not sufficient evidence to prove their land. There is schedule of plan and progress of conflict resolution progress with land claimer, where the company want tried to continue to meet them on period of July to September The next meeting will be held in the next three month. Criterion 2.3 (Major indicator 1) Records of any negotiated agreements between traditional owners of land and plantation companies (if any), supplemented with maps in appropriate scale NCR of 22 (Major non-conformity) There was no record of negotiation between company and 36-community members owner of land inside of the company s land use right area regarding to company s effort process to acquire of the land. Verification results of correction/corrective action: The company has provided evidence such as record of meeting with 36 owners or cultivators of the community s land inside of the company s land use right area. The result was the owners or cultivators did not want to release their land t the company because they need the land for their daily life. For example was: 1. Minute of meeting with AS from Damit Hulu village on June 17th, 2014, cultivator of 5.92 ha land at Block K division Minute of meeting with Dg from Damit Hulu village on June 17th, 2014, cultivator of 1.24 ha land at Block C division Minute of meeting with Dm from Damit Hulu village on June 17th, 2014, cultivator of 8.5 ha at Block J division 5. Criterion 2.3 (Major indicator 3) Copies of negotiated agreements detailing process of consent. NCR of 22 (Major non-conformity) There was no agreement between company and community members regarding to obligation and right of both parties regarding to customary right inside of the land use right area of the company Verification results of correction/corrective action: The company has provided evidence such as copy of negotiated agreements between the company with 36 owners or cultivators of the community s land inside of the company s land use right area. The content of negotiated agreement example : 1. Agreement with villager of land claimer 5.92 ha land at Block K13 division 5 ; land claimer 1.24 ha land at Block C30 division 2 from Damit Hulu village on June 17th, 2014, they still not agree to sell his land to 2. Agreement with land claimer of 8.5 ha land at Block J17 division 5 from Damit Hulu village on June 17th, 2014, that they agree to sell his land to company; 3. Agreement with land claimer from Damit Hulu village on June 09 th, 2014, Block F25 division 2 that agree, if companies want to provide compensation for his land;

44 Page 44 of 80 Criterion 4.1 (Minor indicator 2) Records of operation result NCR of 22 (Minor non-conformity) There are several condition relating inconsistency between procedure with implementation such as : 1. Domestic waste not separate/mixing between organic waste with anorganic waste in warehouse office west estate and Lok Bungur emplasment so this is condition inconsistency with SOP/GMK-SMK3/01/14 page 4; 2. There are not application of Legum Cover Crop (LCC) in new planting area (block L21C) so this is condition inconsistency with SOP/GMK-AGRO/02/03; 3. EFB Application in block F28 and G27 is more than 1 layer so this is condition inconsistency with SOP/GMK-AGRO/02/10 Rev.01 poin 2.4 Verification results of correction/corrective action: Based on verification record and document and field visit checking: - Estate has conduct the domestic handling waste brief in the all of emplacement (housing) based on interview the workers understood that they are not allowed for burn the domestic waste and should collect the domestic waste into the land field managed by estate. - Based on field visit the estate was implemented the LCC planting for all immature plan and will consistent to ensure the LCC plan for every replanting activity. - Estate has ensure and control the EFB application to meet with the company procedure through the EFB application foreman, and based on field visit there is no found EFB application more than 2 layers as a mention in company procedure. Criterion 4.6. (Minor indicator 1) Documentary evidence that use of chemicals categorized as World Health Organization (WHO) type 1A or 1B or listed by the Stockholm or Rotterdam Conventions and paraquat is reduced and/or eliminated NCR of 22 (Minor non-conformity) The company has policy to reduce usage of pesticide and control it but there is not timeline or target to reduce or eliminated paraquat use in the company Verification results of correction/corrective action: Based on auditor verification result during the 1st surveillance audit, the company has develop and realized the reduced gradually of chemical use such as paraquat. Base on chemical used paraquat was reduced from last year. Criterion 4.7 (Minor indicator 3) A documented risk assessment for OHS. NCR of 22 (Minor non-conformity) The company has documented risk assessment for Occupational Health and Safety (OHS) not cover WTP and WWTP areas in Jorong mill. Verification results of correction/corrective action: Based on auditor verification result during the 1st surveillance audit, the OSH risk assessment was covered all of activity in mill and estate such as WTP, WWTP.

45 Page 45 of 80 Criterion 4.7 (Minor indicator 4) Record of OHS training NCR of 22 (Minor non-conformity) There is evidence that a new capstant operator was not given basic OHS training Verification results of correction/corrective action: Based on auditor verification result during the 1st surveillance audit, record of OSH training work program and training realization area available include the training evaluation from workers have been trained and also record of attendant list are available complete with training material. Criterion 4.7 (Minor indicator 6) Evidence of OHS and first aid equipment available at worksites NCR of 22 (Minor non-conformity) There are evidence in Jorong mill that some of worker working without the use of PPE or PPE has been damaged Verification results of correction/corrective action: Based on auditor verification result during the 1st surveillance audit, record of PPE identification need, attendant list for PPE transfer to workers and based on field observation, workers in Jorong Mill has use they PPE when they work. Criterion 4.7 (Minor indicator 8) Records of the occurrence of any work accidents are maintained and regularly NCR of 22 (Minor non-conformity) The accident investigation s for the woerker was conducted but not appropriate with the applicable guidelines. Verification results of correction/corrective action: Based on auditor verification result during the 1st surveillance audit, accident investigation was implemented and complete with guidelines to reduce and minimize the same accident. Mill also ensure the work area is clean from others potential risk to minimize the accident such as through the PPE used when work. Criterion 4.8 (Major indicator 1) A documented training programme for staff, employee and scheme smallholders in accordance with worker s positions and competences NCR of 22 (Major non-conformity) The training program has not been prepared based on Training Need Analysis (TNA) and there is not information on the type of training that will be followed by each employee/worker in form of training program such as driver, mechanic, fertilizer foreman, spraying foreman, office clerk in division, manager, etc Verification results of correction/corrective action:

46 Page 46 of 80 The company has create of training need analysis (TNA) or competency assessment for workers in each section/sector such as warehouse, human resources department, head of division, west estate, central estate and Jorong mill. First stage that middle to top management level who have done competency assessment (in warehouse department : head of warehouse, warehouse clerk, assissten warehouse and purchasing officer; in HRD unit : head of HRD in estate & mill, HRD clerk, payroll operator, and radio operator; in estate : head of estate, assisten of integrated pest & diseases, maintenance foreman, harvesting foreman, fertilizing foreman, clerk in division, pest & diseases foreman; in mill : processing foreman, boiler operator, clarification operator, loading ramp operator, nut & kernel operator, power house operator, press operator, strellizer operator, thresser operator, and tipler operator). There are information about name of worker, position, type of competency (administration, human resources, techniques, and operational system), and type of training proposed in the tabulation of competency assessment results. The company has revision of training program where has been based on TNA and info of type of training and time schedule of training available in each section/sector. Type of training and time schedule of training in each section/sector : Warehouse department : socialization of sustainability system (August 2014), warehouse procedure socialization (October 2014), warehouse management (November 2014) and leadership training (December 2014), Human resources department : HRD procedure socialization (September 2014), socialization of sustainability system (August 2014), recruitment training (December 2014), and leadership (December 2014). Estate : socialization of RSPO, ISPO, ISCC system (August 2014 & October 2014), leadership development (November 2014), management of training (October 2014), integrate disease & pest training (November 2014), socialization of technique procedure (maintenance, fertilizing, spraying, harvesting, etc) (September to November 2014), and leadership (December 2014). Mill : socialization of sustainability system (August 2014), certification of boiler operator (according with schedule training from external college), create of planning and working report training (September 2014), maintenance of clarification unit training (September 2014), maintenance of loading ramp training (September 2014), maintenance of nut & kernel unit training (September & October 2014), maintenance of press unit training (October 2014), maintenance of strealizer unit training (October 2014), and maintenance of tipler unit training (October 2014). Criterion 4.8 (Major indicator 3) Evidence that the company uses experienced or trained contractors NCR of 22 (Major non-conformity) Evidence that the company use experienced or trained contractors are not available. Verification results of correction/corrective action: The company has established and provided contractor of civil department procedure (SOP/GMK- AGRO/12/01 rev.0 issued dated on June 11, 2014) where scope of procedure covering selection, offering or tender process, designation, issued agreement, working control and performance assessment of contractor, and list of contractor. The current condition that renovation of emplasment for worker has been conducted so evaluation mechanism will be done according following with the existing procedure. The previous time (before procedure was issued) the contractor is selected based on the price and work experience only they have (company profile and recommendation of fellow companies). The company has provided price offer letter, company profile and contract. Criterion 5.2 (Major indicator 2) If rare, threatened or endangered species, or high conservation value habitats are present, appropriate measures to preserve them are to be taken NCR of 22 (Major non-conformity) There are not appropriate measures to preserve HCV area from land clearing activities by communities such as Paikat hill, Tandukan hill and Buluh hill; preserving Asam-asam condition from illegal gold mining

47 Page 47 of 80 by communities and control any illegal or inappropraite hunting fauna to protected species. Verification results of correction/corrective action: The company provided documents, such as: Revision of management and monitoring HCV plan in West and Central estate where additional activities are 1). Marking boundry in Paikat hill, Tandukan hill and Buluh hill, 2). Installation of warning signboard for mining activity in river and 3).conducting monitoring/control/routine patrol for controlling hunting of fauna protected. The third activity will be implemented in July 2014 (no.1 & 2) and July to December 2014 (no.3). Offical report and photo/figure about installation of warning signboard of mining and pollute in river at asam-asam river dated on June 10, 2014 Official report and photo/figure about installation of warning signboard of opening land in HCV areas (tandukan hill, buluh hill and paikat hill) and illegal hunting of fauna protected dated on June 18, Record of socialization of HCV to communities/farmers who has done land clearing in paikat hill, tandukan hill and buluh hill and gold mainers in asam-asam river in form of official report, attendent list and photo/figure. Records of routine patrol that had been done (period of June 2014). Additional information in species (flora and fauna) protected signboard about legal basis and sanctions from the prohibition of illegal hunting to species protected. Otherwise it, there are additional information about if was found fauna so please contact to office of PT GMK. Attachment no.1 of HCV procedure (SOP/GMK-AGRO/01/17) about flowchart of if was found fauna protected. Criterion 5.2 (Minor indicator 1) Posters and signs warning of the presence of protected species are to be produced, distributed and made visible to all workers and the community, including guidelines in handling them NCR of 22 (Minor non-conformity) There is not guidelines in handling of protected species on signboard of protected species (fauna and flora) and socialization has been done by company but not include the communities/farmers which conducting land clearing in Tandukan hill, Paikat hill, Buluh hill and illegal gold mining in Asam-asam river. Verification results of correction/corrective action: The company make additional information about guidelines handling of species protected on signboard of species protected if it finds fauna protected has been owned by communities or employees It was observed evidence of socialization to communities/farmers which conducting land clearing and miners in HCV areas (tandukan hill, paikat hill, buluh hill and asam-asam river) The auditor found posters/signboards of species protected existing has been completed with guidelines in handling of species protected information Criterion 5.2 (Minor indicator 2) Companies are to appoint dedicated and trained officers to monitor any plans and activities as above NCR of 22 (Minor non-conformity) The company does not have to appoint and trained officer to monitor any plans and activities for HCV. Verification results of correction/corrective action: The company has appointed the person will responsible for HCV management and monitoring plan, and provide the training for PIC. Based on training record the person was responsible for HCV was trained by the company and understood how to maintain the HCV and implemented the HCV management and monitoring plan.

48 Page 48 of 80 Criterion 5.3 (Major indicator 2) Estate and mills waste management and disposal are implemented to avoid or reduce pollution NCR of 22 (Major non-conformity) There is evidence that the company has not been minimized pollution of soil (landfill in block D27, div.2 - west estate). Verification results of correction/corrective action: The company has provide photo/figure that landfill has maked roof/cover and levee so rain water does not fill in into the land fill. Criterion 5.3 (Minor indicator 2) Records of waste monitoring/analysis NCR of 22 (Minor non-conformity) The company not monitor of hazardous waste such as proof of submission of used oil to the warehouse of hazardous and toxic waste period December 2013 to February 2014 is not available while there are activities change of oil on power generator 135 KVA alpha on December 11,2013; January 13, 2014 and February 17, 2014 in central estate. Verification results of correction/corrective action: Based on auditor verification result during the 1st surveillance audit, the hazardous officer in warehouse have been trained by the company about hazardous procedure, the hazardous officer understood how the handle the hazardous waste. Criterion 6.1 (Minor indicator 1) Regular monitoring and management of social impact with the participant of local communities NCR of 22 (Minor non-conformity) There is social impact management and monitoring action plan, but there is no evidence of community participation Verification results of correction/corrective action: Based on auditor verification result during the 1st surveillance audit, The Social impact Management and Monitoring Plan has developed by the company. In the main audit, company couldn t show evidences regarding stakeholder participations regarding plan development. This finding has risen as non-conformity (minor). In this surveillance GMK Jorong still can t show these evidences. Company has not yet conducting review and revision regarding Social Impact Management Plan with participation of affected parties. This situation escalated the finding into major non-conformity ( Major Escalation).. Auditor Conclusions: Open

49 Criterion 6.5 (Minor indicator 1) Growers and millers provide adequate housing, water supplies, medical, education and other facilities for employees where such facilities are not available or accessible Page 49 of 80 NCR of 22 (Minor non-conformity) There was facility found in damaged condition. For example were 4 septic tanks at Batalang housing of central estate. Verification results of correction/corrective action: Company has showed evidences regarding housing facilities maintenances such as: a. Letters of order from Askep to Kadiv 01, June 7th 2014 regarding Septic tank of Longhouse O and P reparation. b. Minutes of Septic Tank reparation in longhouse O and P, June 9th c. Photo documents regarding reparation process. Field checked has been conducted for observations, and found that the septic tank has in order conditions. Related workers who use the facilities confirmed that there s no more problem according to the septic tank. Criterion 6.9 (Minor indicator 3) Specific grievance mechanism is available NCR of 22 (Minor non-conformity) There is no evidence that the grievance mechanism already socialized to all workers Verification results of correction/corrective action: GMKJ has provide evidences regarding socialization of gender policy and the mechanism of grievances/complaints and reportage regarding sexual harassment, as follows: a. Attendant lists of Committee Gender Meeting, January 5th This meeting agenda was socializations of committee gender organization and committee appointments for each estate and mill. b. Socialization of grievances/complaints mechanism (flowchart) regarding sexual harassment and household based violence, January 5th During surveillance, random woman workers have been interviewed regarding gender and sexual harassment issues. They exclaimed that they understand what is sexual harassment and know how to report if in any cases happened to them. 3.3 Identified non-conformances, corrective actions taken and auditors conclusions A total of 22 nonconformances were identified during the 1st surveillance audit. These consisted of 12 nonconformity categorized as major non-conformities and 10 nonconformities categorized as minor non-conformities too. For the major non-conformances, the company has taken the necessary corrective action to close these non-conformances, and the audit team through documented evidence submitted by the company verified this. For the minor non-conformances, the company has taken corrective action against these as well, and for those, which could not be verified as closed through document checks, the closure of these minor non-conformities will be assessed during the next surveillance audit. A summary of all identified non-conformances, corrective actions taken and auditor conclusions is as below:

50 Page 50 of 80 RSPO Required System NCR of 22 (Non-conformity against of RSPO Requirement system) During the 1st surveillance audit, PT GMK cannot show the record of work program and implementation of smallholder certification plan. Correction: Develop the work program for smallholder certification plan will start in Corrective Action: Ensure the work program for smallholder certification plan in 2016 will implementation and approved by management. Date of closure: September 30, 2015 Verification results: The company has developed and submitted the smallholder certification work plan for In the work program showed the 20 activities such as training for RSPO introduction, training for document control, brief for policy related biodiversity, sexual harassment, OSH and others. Criteria Publicly available documents shall include, but are not necessarily limited to: land titles, OSH plans, plans and impact assessment relating to environmental and social impacts, HCV document, pollution prevention and reduction plans, details of complains and grievances, negotiation procedures, continual improvement plans, public summary of certification assessment and human rights policy. NCR of 22 (Major) The publicly available document lists not yet explicitly mentioned documents required by RSPO P&C 2013, such as Environment and Social Impact Management Plan and report; HCV; Negotiation Procedures; Public Summary of certification assessment; Human Rights policy and Code of Ethical Conduct policy. a. Interview result with local community headman (Batalang and Pemalongan) found that Company not yet communicated their policy regarding transparency. Correction: Revised the procedure number SOP/GMK-AGRO/01/08 about Internal and External Communication, complete with new information related: - Report and plans and impact assessment for environmental and social impacts - HCV document report - Negotiation procedures - Public summary of certification assessment - Human rights policy - Ethical conduct for business And will brief the new procedure to all related stakeholders. Corrective Action: Ensure that the new procedure SOP/GMK-AGRO/01/08 complete with the new requirement for publically available document and brief to all of stakeholders. Date of closure: September 30, 2015 Verification results: The company has brief all of related stakeholders with the evidenced in brief attendant list conducted on August 24, 2015, attendant with 10 persons from all of stakeholders. This brief was completed with minutes of meeting and photograph also. The company also submitted the new procedure complete with the new information related the new publically available document.

51 Criteria A documented system, which includes written information on legal requirements, shall be maintained. Page 51 of 80 NCR of 22 (Minor) It was found in the law register book, the company no input yet the two regulation related workforce, such as regulation number 100/2004 and 102/2004 from Ministry of Man Power and Transmigration. Correction: Completely the law register with added the new regulation i.e.: regulation number 100/2004 and 102/2004 from Ministry of Man Power and Transmigration Corrective Action: Ensure the all of law and regulation related all of activity in Mill and estate in the law register book and will conduct evaluation in every 6 month. Date of closure: December 4, 2015 Verification Result: Evidence of immediate action taken was accepted. Effectiveness of implementation to verified at next audit Criteria A mechanism for ensuring compliance shall be implemented NCR of 22 (Minor) a. There is no mechanism from the company in work contract related to evaluate the work contract has fulfill and compliance with regulation number 100/2004 about working agreement. b. Occupational Health and Safety Committee (P2K3) for Jorong Mill, Tengah and Barat Estate still not authorised by the Government, also there is no periodically report for OSH meeting in every three months to the government for II, II and IV in 2014 and I, II in 2015 Correction: a. Include the new regulation number 100/2004 and number 102/2004 in to the law register book. b. Immediately communicated to the Man Power Bodies related to the progress of Occupational Health and Safety Committee (P2K3) and consistent reporting periodically accordance to regulation requirement. Corrective Action: a. Ensure the all of law and regulation related all activities in the mill and estate was include in the law register book and will conduct the evaluation in every 6-month. b. Ensure the progress of Occupational Health and Safety Committee (P2K3) update and reporting periodically submitted also. Date of closure: July 4, 2014 Verification Result: Evidence of immediate action taken was accepted. Effectiveness of implementation to verified at next audit Criteria Documents showing legal ownership or lease, history of land tenure and the actual legal use of the land shall be available. NCR of 22 (Major) a. During the document verification of hectarage statement, overlay map of land use right with planted area, showed indication of planted in outside of HGU (land use right) in Barat and Tengah Estate. Map scale 1:65,000, the indication is planted in year of 2003, 2004, 2007 and 2008.

52 Page 52 of 80 b. During the 1st surveillance the company can showed yet the up to date progress in 2015 for the progress land use permit process. Last update only in 2014 without significant progress from Land Office of Correction: a. Develop smallholder cooperation for planted area in outside of HGU b. Submitted the letter to the Head of Land Agency of related to the information of update progress for HGU from land was owned by company in 3 location i.e.: Barat, Tengah and Timur. Corrective Action: a. Ensure the letter about cooperation smallholder for planted area outside HGU was create and submitted to the related government office. b. Ensure the letter about information progress update and response for HGU update progress was create and submitted to the related government office Date of closure: September 30, 2015 Verification result: The company has submit the evidence, i.e.: 1. Minutes of meeting about the explanation of Gawi Makmur Kalimantan Area dated on Friday April 24, 2015 from Government Office of Forest. 2. Letter of recommendation from Industrial, Trading and Cooperation Government Office number 518/584/INDAGKOP DAN UKM/IX/2015 about supported to cooperation development for planted area in the outside of HGU. 3. Work program of cooperation development for planted area in the outside of HGU, named is KSU Daya Mitra Sejahtera 4. Letter of information about the HGU progress for area 280 Ha addressed to the Head of Land Agency of, dated on August 19, Letter of progress update process of Cooperation KSU Daya Mitra Sejahtera Criteria Standard Operating Procedures (SOPs) for estates and mills shall be documented. NCR of 22 (Major) Tengah estate during the 1st surveillance audit cannot show the water management program. Correction: Tengah Estate will implement the water management based on available form and program has developed by company. Corrective Action: Ensure the form monitoring for water management implementation will conducted consistently. Auditor Conclusions : Closed Date of closure: Verification result : The companya has submitted the water source management program. The water management program was include activity such as maintain the clean condition around the water source, installment the signboard, piping checking periodically, enrichment of forest vegetation around the water source. Company also has submitted the photograph of water management program implementation was conducted by company base on water management program above. Criteria A mechanism to check consistent implementation of procedures shall be in place.

53 Page 53 of 80 NCR of 22 (Minor) There is no mechanism on monitoring the effectiveness of SOP implementation causing several inconsistency between procedure with implementation such as: Domestic waste not separate/mixing between organic waste with inorganic waste in warehouse office Tengah Estate, office division Batalang unit division 1,3, and 6 so this is condition inconsistency with SOP/GMK-SMK3/01/14 page 4; SOP / GMK-AGRO / 10/01 on Engineering and Workshop are not implemented properly as mentioned in Section 8.1 of the SOP and monthly report and work evaluation is not available as set out in the SOP. Mill Maintenance Procedure No.SOP /GML-AGRO / 03/04 are not in accordance with the implementation. Available forms, Annex 8.2, Annex 8.3 and Annex 8.4, in the SOP never been used as part of mill maintenance procedure Correction: a. Creating a program or mechanism to monitor the effectiveness of the entire SOP implementation. b. Monitoring the effectiveness of SOP implementation include SOP / GMK-SMK3 / 01/14 on the handling of domestic waste, SOP / GMKAGRO / 10/01 on Engineering and Workshop, and mill maintenance SOP. Corrective Action: Ensuring the SOP monitoring program carried out and include SOP / GMKSMK3 / 01/14 on the handling of domestic waste, SOP / GMKAGRO / 10/01 on Engineering and Workshop, and Mill maintenance SOP. Date of closure: Verification result: Evidence of immediate action taken was accepted. Effectiveness of implementation to verified at next audit Criteria Records of monitoring and any actions taken shall be maintained and available, as appropriate. NCR of 22 (Minor) Records of monitoring the implementation of SOPs is not available, then the organization cannot perform an evaluation to measure the effectiveness of SOPS. Correction : Creating a program to monitoring the SOP implementation and record the result as an effectiveness evaluation Corrective Action: Ensuring program to monitoring the SOP implementation conducted and record of monitoring results delivered well and documented Date of closure: Verification result: Evidence of immediate action taken was accepted. Effectiveness of implementation to verify at next audit. Criteria All operations where health and safety is an issue shall be risk assessed, and procedures and actions shall be documented and implemented to address the identified issues. All precautions attached to products shall be properly observed and applied to the workers. NCR of 22 (Major) a. It was found mini truck John Deer 05 in Tengah estate was not completed with horn and mirror as a warning system when they are operated.

54 Page 54 of 80 b. During the estate visit in Barat Estate, it was found the truck tank which used to spraying activity was not completed with MSDS and also the responsible foreman on duty didn t have the MSDS related chemical used to readily available for easy reference. Correction: a. Provide the maintenance for all Jhon Deer without completed with the standard. b. Complete the foreman with MSDS related the chemical used when the spraying activity conducted. Corrective Action: a. Ensure the reparation maintenance of heavy equipment include Jhon Deer was complete and conduct the monitoring periodically to the all heavy equipment and vehicle. b. Ensure the all of foreman when they on duty complete with MSDS related the type of chemical used Date of closure: September 30, 2015 Verification result: The company has submit the evidence, i.e.: 1. Attendant list of MSDS acceptance for fertilizer warehouse foreman 2. Attendant list of MSD acceptance for chemical foreman dated on August 4, 2015 for 4 persons foreman (3 fertilizer foreman and 1 chemical foreman) 3. Attendant list of MSD acceptance for chemical foreman dated on August 15, 2015 for 5 persons foreman (2 fertilizer foreman and 3 chemical foreman) 4. Attendant list of MSD acceptance for chemical foreman dated on July 04, 2015 for 2 persons foreman (1 fertilizer foreman and 1 chemical foreman) 5. Attendant list of MSD acceptance for chemical foreman dated on August 4, 2015 for 4 persons foreman (3 fertilizer foreman and 1 chemical foreman) 6. Photograph of documentation installment of MSDS in mixing tank for chemical and installation of horn and mirror to the Jhon Deer. Criteria All workers involved in the operation shall be adequately trained in safe working practices (see Criterion 4.8). Adequate and appropriate protective equipment shall be available to all workers at the place of work to cover all potentially hazardous operations, such as pesticide application, machine operations, and land preparation, harvesting and, if it is used, burning. NCR of 22 (Major) a. It was found John Deer mini truck operator, wheel loader, crane operator and boiler operator did not having a certificate which proved they are competence to operate the equipment proper and safely. b. It was found in Jorong Mill Boiler area, harvesting activities in Tengah Estate, John Deer truck driver in Barat Estate Division 2, Truck driver for FFB transporter in Jorong Mill not using the PPE and proper shirt when entering this area as detailed in their Hazard Identification, Risk Assessment and Risk Control document. Correction: a. Create the work program-training plan for wheel loader, crane and boiler operator. b. Create the PPE brief plan for all heavy equipment operator and all of workers and staff. Corrective Action: a. Ensure and record all of wheel loader, crane and boiler operator was included in training program b. Ensure the brief and safety patrol conducted very well to all of workers level and for the workers without PPE will give punishment accordance to the company regulation. Date of closure: September 30, 2015 Verification result: The company has submit the evidence, i.e.:

55 Page 55 of Record of PPE brief attendant list and photograph dated on August 11, 2015, attendant 11 persons from all heavy equipment operators. 2. PPE brief record attendant list and photograph dated on September 2, 2015 brief to all the harvesting workers in Tengah Estate 3. PPE brief dated on June 5, 2015 to all workers in Jorong Mill attendant by 21 persons from loading ramp, tippler, processing, boiler, turbine 4. PPE brief dated on June 12, 2015 to all workers in Jorong Mill attendant by 15 persons from kernel process, loading ramp, sterilizer, boiler, clarification, engine room. 5. PPE brief dated on August 14, 2015 to boiler operator attendant 7 persons Criteria All workers shall be provided with medical care, and covered by accident insurance. NCR of 22 (Minor) a. There is no available audio metric test result for employee who working in the area which have more than 85 db noise such as electrical generator operators as required by Transmigration and Man Power ministry regulation No.2/MEN/1980 related regular medical test for employee. For Jorong Mill employee, annual medical checkup also never been performed during the time. b. Found in Jorong Mill the stairs with more than 45 degree slope which not completed with handrail to prevent any accident when used. Correction: a. Create the audiometry program plan to all of workers who work in high-risk location. b. Complete the stairs with handrail to prevent any accident Corrective Action: Ensure the medical checkup related audiometry test to all of workers who work in high risk will implemented very well and ensure the all of stairs in working area will complete with handrails. Date of closure: Verification result: Evidence of immediate action taken was accepted. Effectiveness of implementation to verify at next audit. Criteria Where rare, threatened or endangered (RTE) species, or HCVs, are present or are affected by plantation or mill operations, appropriate measures that are expected to maintain and/or enhance them shall be implemented through a management plan. NCR of 22 (Major) The company failed to demonstrate the implementation of planned HCV management since 2014 Correction: a. Assign a specific personal to run management plan on animal species and their habitats/hcv, include: Re-demarcation of HCV areas Wildlife monitoring Monitoring of erosion-prone areas Monitoring HCV5 Rehabilitation of degraded habitats b. Assign a personal who responsibility for the implementation of the rehabilitation program according to timeline Corrective Action: Ensuring some HCV management plan running and degraded habitat areas degraded including the riparian zone. Date of closure: September 30, 2015

56 Page 56 of 80 Verification result: The company provided documents that prove some HCV management has carried out, such as: Rehabilitation degraded habitat area in Gunung Tandukan on August 13th, 2015 proved by an implementation report by field head assistant and HCV staff. In addition, riparian zones programmed will be rehabilitation on December 2015 and and adds to the existing rehabilitation area in block J32, J33 Barat estate. Identification of erosion-prone areas in Barat estate on June 2015 proved by report of implementation, this report contains information on areas that has steep slope and the condition of terrace system completed with photos. Monitoring of HCV 5 in Barat estate on August 2015 to ensure the HCV 5 still exist. Criteria Where a management plan has been created there shall be on-going monitoring: a) The status of HCV and RTE species that are affected by plantation or mill operations shall be documented and reported; b) Outcomes of monitoring shall be fed back into the management plan. NCR of 22 (Minor) The company cannot shows any document or report on HCV and RTE species status monitoring Correction: Assign a specific person to conduct species monitoring and HCV Corrective Action: Ensuring species and HCV monitoring carried out regularly and documented Date of closure: Verification result: Evidence of immediate action taken was accepted. Effectiveness of implementation to verify at next audit. Criteria Where HCV set-asides with existing rights of local communities have been identified; there shall be evidence of a negotiated agreement that optimally safeguards both the HCVs and these rights. NCR of 22 (Minor) There is no agreement or memorandum of understanding available between the company and local communities related to HCV 6 management in Tengah Estate. Correction: Assign a person to approach the local community and make memorandum of understanding or agreement on HCV 6 management. Corrective Action: Ensuring memorandum of understanding or agreement on HCV 6 management available between the company and local community who has interest in HCV 6 area. Date of closure: Verification result: Evidence of immediate action taken was accepted. Effectiveness of implementation to verify at next audit. Criteria All chemicals and their containers shall be disposed of responsibly. NCR of 22 (Major) Based on PT Nazar s license from Environmental and Forestry Ministry No year 2015 dated May 13 th, 2105, PT Nazar as a partner PT GMK to collect and transport hazardous and toxic waste is

57 Page 57 of 80 not allowed to handle agrochemical container, but in fact this company collect and transport that kind of waste. PT Wastec International, PT Muhtomas and PT Job colouring as a partner of PT Nazar and PT GM process and utilize hazardous waste does not have valid license to handle the waste. PT GMK cannot show a valid license of that company in the contracts. This condition causing uncertainty of safety waste handling and waste disposed of responsibly. Correction: Request copies of licenses/permits from PT NAZAR for collecting, transporting and utilizing chemical containers waste. Corrective Action: Ensuring document control and monitoring system for recording run properly. Date of closure: September 30, 2015 Verification result: The company has delivered a license/permit of PT Nazar, which includes the handling of chemical container. License issued by Transportation Ministry on December 15 th, 2104 No. KL.204/2/4/DN-14 for transportation of hazardous waste as well as license for solid and liquid waste include chemical container collection issued by Environment Agency of Province on May 20 th, 2014 No 1 year In addition, PT Nazar also include progress of permit extension of PT Wastec International which has been responded by the Environmental Ministry on January 20 th, 2015, and license of PT Muhtomas No year 2014 issued by the Environmental Minister on December 4 th, 2014 valid for three years, meanwhile PT Job Colouring is no longer involved in hazardous and toxic waste disposed. Criteria Significant pollutants and greenhouse gas (GHG) emissions shall be identified, and plans to reduce or minimise them implemented. NCR of 22 (Major) Mill and both of estate still no has work program to reduce and minimize the significant emission and pollution and there is no record for that implementation. Correction: Create the work program to reduce and minimize the significant pollutant, and implemented them Corrective Action: Ensure the work program to reduce and minimize the significant pollutant and record the implementation Date of closure: July 04, 2014 Verification result: Company has submitted the evidenced, i.e.: 1. Record of realization enrichment planting program with forest vegetation with 40 tree planted by company 2. Record work program to reduce and minimize the significant pollutant, with the activity such as enrichment, GHG identification source, emission and pollution identification, EIA evaluation and others. Criteria A monitoring system shall be in place, with regular reporting on progress for these significant pollutants and emissions from estate and mill operations, using appropriate tools. NCR of 22 (Minor) GHG calculation was created by the mill and estate, but the GHG calculation not used the RSPO template and there is no record that the GHG calculation used was endorse by RSPO. Correction:

58 Page 58 of 80 Conduct the GHG calculation based on GHG RSPO tools. Corrective Action: Ensure the GHG calculation was correct and comply with RSPO GHG Tools version. Auditor Conclusions: Evidence of immediate action taken was accepted. Effectiveness of implementation to verified at next audit Criteria Plans for avoidance or mitigation of negative impacts and promotion of the positive ones, and monitoring of impacts identified, shall be developed in consultation with the affected parties, documented and timetabled, including responsibilities for implementation. NCR of 22 (Major) Found that the Social Impact Management plan does not covered the Land Acquisitions Program for community s land inside HGU and its conflict potentials; Social risk regarding coal mining activity inside Estate (HGU) areas; Local Economic Strengthening activities. Correction: Develop the SIA management and monitoring plan based on recommendation from SIA assessment and add the new information related about: - Grievance, land conflict inside HGU - Social risk as effect of company development, and potential conflict with coal mining inside the company HGU. - Develop the economical strength through the smallholder, economical opportunity development. Corrective Action: Ensure the SIA management and monitoring plan was created based on SIA assessment will implemented very well. Date of closure: September 30, 2015 Verification result: 1. Kebun Barat Estate Social Impact Management Plan Matrix of PT Gawi Makmur Kalimantan, prepared by Public Relation and Approved by Site Manager for Kebun Barat Estate, issued in September 11th In this document has stated related social impact as follow: a. Point 6, stated regarding local community expectation regarding land price escalation regarding company operations. b. Point 7, 8, and 9, stated impacts regarding coal mining activity inside estate/plantation c. Point 5 stated regarding local economic strengthening activity by introducing palm oil commodity. 2. Kebun Tengah Estate Social Impact Management Plan Matrix of PT Gawi Makmur Kalimantan, prepared by Public Relation and Approved by Site Manager for Kebun Tengah Estate, issued in September 11th In this document has stated related social impact as follow: a. Point 6 and 11 stated impacts regarding local community expectation regarding land price escalation regarding company operations. b. Point 7, 8 and 12, stated impacts regarding coal mining activity inside estate/plantation c. Point 5 and 13 stated impacts regarding local economic strengthening activity by introducing palm oil commodity. Criteria The plans shall be reviewed as a minimum once every two years and updated as necessary, in those cases where the review has concluded that changes should be made to current practices. There shall be evidence that the review includes the participation of affected parties. NCR of 22 (Major-escalation from NCR of 25) Company has not yet conducting review and revision regarding Social Impact Management Plan with participation of affected parties.

59 Page 59 of 80 Correction: Optimization of human resource in the site and develop the SIA management and monitoring work program for 2015 based on SIA assessment and brief to the all stakeholders. Corrective Action: Ensure the human resources in the site will implement the CSR program and SIA program in 2015 and report periodically to evaluation the implementation. Date of closure: September 30, 2015 Verification result: 1. Kebun Barat Estate Evidences regarding stakeholder participations of Social Impact Management Plan submitted are: - Attendant list 1, signed by 5 people from formal institutions (head of Village, staff and RTs), July 6th Attendant list 1, signed by 7 people from formal and non formal institutions of tanah laut Village (head of Village, staff, BPP and RTs), September 4th Photo Documents 2. Kebun Tengah Estate Evidences regarding stakeholder participations of Social Impact Management Plan submitted are: - Attendant list, signed by 60 people, September 6th Minute of Meeting: Social Impact management Plan, September 6th Minute of Meeting: Social Impact management Plan in Dammit Village, August 7th Criteria A list of stakeholders, records of all communication, including confirmation of receipt and that efforts are made to ensure understanding by affected parties, and records of actions taken in response to input from stakeholders, shall be maintained. NCR of 22 (Minor) List of stakeholders of PT GMK has not yet identified all of strategic stakeholders, especially parties that has enough ability and capability to influence the estate operation, such as suppliers, contractor and local coal miner (community and/or company). Correction: Revised the stakeholder list with include the new strategic stakeholders such as supplier; contractor, coal mining and others related stakeholders. Corrective Action: Ensure the stakeholder list was revised with was include the new strategic stakeholders. Auditor Conclusions: Evidence of immediate action taken was accepted. Effectiveness of implementation to verified at next audit Criteria Labour laws, union agreements or direct contracts of employment detailing payments and conditions of employment (e.g. working hours, deductions, overtime, sickness, holiday entitlement, maternity leave, reasons for dismissal, period of notice, etc.) shall be available in the languages understood by the workers or explained carefully to them by a management official. NCR of 22 (Minor) a. Status of harvesters workers still not comply with national regulation. Because according to the National Regulation number Minster of Manpower and Transmigration Regulation No 19 year 2012 regarding outsource, article 3. b. Harvesters and maintenance workers in estate still no have contract letter will explained about rights and obligations for both parties (working hour, payment calculation, deduction, overtime, leave day, and others. c. The norm of Piece Rate payment for Sunday and national holiday has not yet synchronized with

60 Page 60 of 80 Ministry of Workforce and Transmigration regulation no. 102 year 2004 regarding overtime. In this regulation, working in Sunday (and national holiday) defined as overtime, so the payments must comply with overtime payments regulation (the different between regular day and Sunday/holiday piece rate still too small). Correction: a. Calculate the harvesters minimum workers and revised the daily temporary workers (Buruh Harian Lepas/BHL) in to the permanent workers. b. Employment contract will developed between company and workers gradually. c. Will develop the intensive program especially for harvester s workers if they work in national holiday. Corrective Action: a. Ensure the status workers transfer from temporary daily workers into permanent workers will implementation b. Ensure the employment contract between company and workers developed very well gradually c. Ensure the intensive program especially for harvesters workers if they work in national holiday. Date of closure: Verification result: Evidence of immediate action taken was accepted. Effectiveness of implementation to verified at next audit Criteria Growers and millers shall provide adequate housing, water supplies, medical, educational and welfare amenities to national standards or above, where no such public facilities are available or accessible. NCR of 22 (Minor) During surveillance found that the water quality for consumptions was very low It indicated that Jorong Mill and Estate has not provided adequate clean water supplies for daily consumptions for workers who live in emplacements. Correction: Installation of clean water pipe from palm oil mill to estate. Corrective Action: Ensure the clean water pipe from PKS to estate will implemented based work plan Auditor Conclusions: Evidence of immediate action taken was accepted. Effectiveness of implementation to verify at next audit. 3.3 Description of Supply Chain Management System E.1. Definition Findings: Jorong Palm Oil Mill (PKS Jorong) located in Indonesia. Jorong Mill has production capacity of 90 tones/hours. In year 2014, the mill processed Fresh Fruit Bunches (FFB) from company owned estate (Barat and Tengah Estate), Pemalongan smallholder (named KUD Ulin Jaya), Damit smallholder (named Kopermas Subur Mandiri), PT Sentosa Sukses Utama (SSU) and out grower, whereas in year 2015 that FFB supplier same as year 2014 exclude Timur estate. The location of Jorong Palm Oil Mill is within Barat estate. Jorong Palm Oil Mill has an operating licensed from the Indonesian State Minister of Investment of Investment Coordinating Board i.e.: approval of foreign investment (Izin Usaha Tetap) No. 189/T/INDUSTRI/PERTANIAN/2008 (issued date on 11 March 2008) with production capacity of FFB: 515,500 toness (FFB from estate in Tanah Laut Regency: 330,000 toness and in Tanah Bumbu Regency: 185,500 toness), CPO: 111,400 toness, PK: 25,500 toness. Jorong mill has extension permit from previous permit i.e.:

61 Page 61 of 80 approval of head of integrated licensing service offices no. 1/63/IU/II/PMDN/INDUSTRI/2013 dated on June 26, 2013 with capacity of CPO: 118,800 toness and PKO: 24,300 toness. Whereas license from Ministry of Agriculture i.e. cultivation business (IUP/SPUP) no, 749/Menhutbun-VII/2000 dated on June 29, 2000 jo head of tanah laut regency letter no. 525/148/UT.1 dated on May 5, 2008 that mill capacity 30 toness/hour to 90 toness/hour. In 2014, Jorong Palm Oil Mil has received FBB approximately 67.77% (194, tones) from owned estate (Barat and Tengah Estate), from sister company (PT SSU) is about 9, tones (3.42%), from company smallholder is about 0.68% or 1, tones, and about 27% or 80, tones from out grower. While in 2014 (until July 2015), Jorong Palm Oil Mill has received the FFB from owned estate is about 108, tones (65.38%), then from sistem company (SSU) is about 4.48% or 7, tone. FFB received from smallholders is about 0.75% or 1, tones and is about 29% or 48, received from oout grower. Based on Mass Balance report started from October 2014 until July 2015, Jorong Palm Oil Mill has produced the certified palm oil product is about 11, tones of CPO and 2, tones PK in 2014 (October December periods). Then in 2015 (January July) certified CPO and PK produced are about 24, tones CPO and 5, tones PK. Then, for uncertified product (CPO and PK) with same time period (October December 2014) is about 5, tones of CPO and 1, tones of PK, and in 2015 (January July) is about 12, tones of CPO and 2, tone of PK. This time period based on RSPO SCCS certificate dated. Latest stock certified product of CPO per three month evaluated is 35, tones of CPO and 2, tones on PK (from October 2014 until July 2015). The certified palm oil product during the 1st surveillance audit is still positive. Because there is no transaction recorded in e-trace system. Jorong Palm Oil Mill implemented the RSPO SCCS MB model. This model allowed the mixing of certified product and uncertified product with control in mass balance record. Compliance status : Full Compliance E.2. Explanation Findings: Estimated of tonnage CPO and PK products has been recorded in to the public summary of the P&C certification report. Jorong Palm Oil Mill registered in RSPO IT Platform (e-trace) with the RSPO e-trace member ID RSPO_PO Compliance status: Full Compliance E.3. Documented procedures Findings: Jorong Palm Oil Mill has established the procedure related to RSPO SCCS MB implementation. That procedure such as: 1. SPO/GMK-AGRO/01/10 Rev03 valid from about traceable sustainable mass balance report 2. SOP/GMK-AGRO/03/06 Rev03 valid from about product delivery from palm oil mill 3. SOP/GMK-AGRO/06/01 Rev01 valid from about purchasing 4. SOP/GMK-AGRO/03/05 Rev02 valid from about product receiving in palm oil mill 5. SOP/GMK-AGRO/01/03 Rev01 valid from about handling non-conforming product 6. SOP/GMK-AGRO/01/05 Rev01 valid from about corrective action 7. SOP/GMK-AGRO/01/06 Rev01 valid from about calibration 8. SOP/GMK-AGRO/01/09 Rev02 valid from about incoming material receiving 9. SOP/GMK-AGRO/01/11 Rev02 valid from about sounding tank Jorong Palm Oil mill has provide the RSPO SCCS brief to all related person will implemented the RSPO SCCS, but the brief still used the RSPO SCCS principle and criteria 2011, so this no up to date. This condition was

62 Page 62 of 80 raised as non-conformities (NCR of 01). Compliance Status: Non Compliance NCR SCCS of 22 Jorong Palm Oil Mill has provide the RSPO SCCS brief to all person related to implemented the RSPO SCCS, but, the brief still used the RSPO SCCS old standard i.e.: Nov E.4. Purchasing and good in Findings: Jorong Palm Oil Mill has separate between certified FFB and non-certified FFB, also include the certified and un-certified palm oil product (CPO and PK) through the mass balance record control. Specially for FFB certified and un-certified will marked use stamp of SCCS in form slip FFB in weighbridge. Only FFB from Barat and Tengah estate marked use that stamp. And for FFB from outside that estate not marked this is mean the FFB is not certified. Amount of FFB and palm oil product certified and un-certified was explained in principle and criteria 1 above. Until 1st surveillance audit, there is no overproduction of certified palm product or FFB, but if the overproduction will happen, the mill has mechanism to inform to the certification body through the mill procedure. Compliance status: Full Compliance E.5. Record keeping Findings: Jorong palm oil mill has recorded and balance receipts all if RSPO certified and uncertified in to mass balance record and also for palm oil product such as CPO and PK and evaluated in every 3 months. During the 1st surveillance audit palm oil mill still consistent to record and control the mass balance stock, when in July 2015 (during the surveillance) certified palm oil product for CPO is about 35, tones and PK is about 2, tones. While the un-certified palm oil product is minus stock. This because the Jorong Palm Oil Mill until the 1st surveillance audit no transaction yet for certified palm oil product. Compliance status: Full Compliance 3.4 Status of Previously Identified Non-conformities During the man/certification audit was only 2 non-conformities against the RSPO SCCS MB. The company is given a time frame to close those non-conformities within 60 days and at time of first submission of this report to the RSPO. E.1.1 The facility shall have written procedures and/or work instructions to ensure the implementation of all the elements specified in these requirements NCR SCCS no of 02 There are procedures, which have not been updated to be in accordance with related SCCS requirement i.e. Procedure of transport of FFB (SOP/GMK-AGRO/02/22 Rev.2) does not explain the how to giving identification of certified FFB; Procedure no. SOP/GMK-AGRO/01/18 does not explain about mechanism of reporting to certification body if projection of over production; Procedure no. SOP/GMK-AGRO/01/10 Rev.02 issued on February 24, 2014 does not explain about

63 Page 63 of 80 guide of using mass balance software/program; Procedure of dispatch material/product (SOP/GMK-AGRO/03/06) does not explain about information of model supply chain and claim of product in dispatch document, information/document that form the basis on despatch of the product as certified product or not, to ensuring despatch document was wet stamp SCCS for certified product available which using rental unit, to ensuring dispatch document was name and address s buyer available. Revision number and history it on SOP/GMK-AGRO/01/01 and SOP/GMK-AGRO/03/05 not conducted so inconsistency with procedure of control of document and record Verification result for Correction/Corrective action: The company provided updated SOPs relevant for SCCS implementation at Jorong mill, such as: Procedure of receiving product in mill (SOP/GMK-AGRO/03/05 rev.02 dated on June 11, 2014). Procedure of transporting FFB (SOP/GMK-AGRO/02/22 rev.02 dated on June 11, 2014). There is additional of sub section is point 8 (giving certified mark on FFB delivery note) where FFB delivery note will be stamped by head of division for FFB certified. Before delivery FFB to mill so estate must ensuring FFB delivery note has stamped as certified FFB. Procedure of dispatch product in mill (SOP/GMK-AGRO/03/06 Rev.02 dated on June 11, 2014). This is procedure has been regulating about informing to certification body if there are over production. The mill manager must report to MR/PiC CSP regarding projection of over production to quota set out in certificate of RSPO. This is information will forward by MR/PiC CSP to certification body via /fax and will inform to certification body 2 months before the end of the year. This is procedure replace procedure no. SOP/GMK-AGRO/01/18. Procedure of traceable sustainable mass balance report (SOP/GMK-AGRO/01/10 rev.3 dated on June 11, 2014). There is additional of sub section is point 6 (guidelines of the use of mass balance program). In sub section of the informed steps to use mass balance program consist of master of company, number of certificate, internal transport, menu of transaction for input with titipan status, menu of transaction for production input, menu of cancel data, menu of transfer data daily, menu of mass balance report. Procedure of dispatch product in mill (SOP/GMK-AGRO/03/06 rev.02 dated on June 11, 2014). This is procedure has revised covering basic of delivery product (CPO & PK) is product delivery instruction (IPP) from Jakarta and it IPP has informed about status of product delivered (sustainability or nonsustainability), if delivery certified product that there are information RSPO stamp and supply chain model on weighbridge ticket/delivery note, it has mechanism to ensure that there are RSPO stamp for delivery certified product when using transport rental and it has been available about name and address buyer in one of information must be contained in delivery note. List of revision page from SOP/GMK-AGRO/01/01 and SOP/GMK-AGRO/03/05 where has been available the latest content of revision on column of description revision. E.3.2 Retention times for all records and reports shall be at least five (5) years NCR SCCS no of 02 There is no information about retention time for all record of CPO & PK despatch note, CPO & PK despatch report and despatch. Correction: Revision of the provisions of the document retention time for document/record of related with supply chain certification. Corrective Action: Ensuring retention time of all document/record related supply chain certification has been stated Verification result for Correction/Corrective action: The company provided the provisions of the document retention time in estate and mill (FR/GMK- AGRO/PD/01/06). Retention time for FFB delivery note is 10 year as archive and 11 year in archive room, mass balance report, CPO & PK dispatch note, CPO & PK delivery report and product delivery instruction is 1 year as archive and 10 year in archive room.

64 Page 64 of Identified Non-conformance against RSPO SCCS Requirements, Corrective Actions Taken and Auditors Conclusions. NCR SCCS of 01 Jorong Palm Oil Mill did not yet provide the new standard of RSPO SCCS Nov 2013 to all person in charge who responsible to RSPO SCCS implementation in Jorong Mill. Correction Action: Develop the RSPO SCCS schedule training version Nov 2013 Corrective Action: Ensure the update of RSPO SCCS new standard was brief to all person in charge and ensure the implementation. Date of closure: September 30, 2015 Verification result: Jorong Palm Oil mill has brief all person in charge who responsible fro RSPO SCCS implementation through the attendant list evidence conducted on September 15, 2015, attendant by Noteworthy Positive Component Criteria Very good houskeeping in hazardous warehouse in Barat Estate Spraying workers in Barat Estate in field number H23 Div III have been good knowledge about riparian bufferzone protection and wildlife conservation. 3.7 Issues raised by stakeholders and findings pertaining to Issues A. Issued raised during stakeholder consultation meeting No. Stakeholders Issues Raised Management Response 1 Secretary from head of village) Damit village and Sapri (secretary of village) Batalang village There is no road access before operating the estate. If there is land of communities inside the concession area (HGU area) because shifting agriculture so communities not know. There are some communities have land in estate does not come from Damit village and Damit Hulu village. Existence of Estate Company is preferred over the mining company (gold and coal) because many of The company will keep maintain the road. The company will conduct socialization again to land claimer inside land use right (HGU) areas related company areas. The company will be continuing to maintenance of good relationship with the surrounding community s estate, in- Audit Verification There are activity plan regarding grading and road compaction and hoarding of perforated road in Damit Hulu and Pendamaran village on May 2014 and August 2014.

65 Page 65 of 80 No. Stakeholders Issues Raised Management Response 2 Mr UJP (Secretary of cooperation) Damit village 3 Mr T-Head of village representative agency in Damit Hulu village absorb worker from communities. The first time the company will call us for the purpose of providing worker. Expectations of communities are maintenance road of ownership village has been used company until now because current condition is broken. Last time ago, there are conflict related to local customary norms but at time there is not conflict again. The communities feel the positive impact for existence of the company such as help in the provision of building material, financial loan, borrowing heavy equipment to repair/maintenance road, etc. The communities had not job last time, then they worked in company but this time they have their own estate and not longer working in the company The communities are willing to land acquisition if the amount of compensation offered suitable. Plantation has negative impact but more positive impact. One of negative impact are road of damage because was used by FFB transport truck of overload The company has contributed donation for the construction of mosques and schools. cluding the provision of employment opportunities. The company will be maintenance of road, which has been used by company according budgeting, and the ability of the company. The company will strive to respect local customary norms. The company will strive establish good relationship with communities The company will continue to provide opportunity for communities to working in company according to needs and qualifications The company will strive to communication with reference of local and national laws and regulations. The companies will attention to road conditions that crossed by FFB transport vehicle with participate to repair together with the communities. Audit Verification There is land conflict where negotiation and resolution process continue to be done. Boundary stone has demarcation by company in field but not complete. There was record of communication with surrounding community in form of minute of meeting and record of complaint and d request from community and response from the company. Based on statistic of employee that dominant of worker from Province. The company will concern and improve relationship to communities. The company has negotiation with communities regarding land conflict but there are not evidence of the conflict resolution progress accepted and did not have evidence of negotiation results. There are activity plan regarding grading and road compaction and hoarding of perforated road in Damit Hulu and Pendamaran village on May 2014 and August There was record of communication with surrounding community in form of minute of meeting and record of complaint and d request from community and

66 Page 66 of 80 No. Stakeholders Issues Raised Management Response 4 Head of Damit village and Samidi (secretary of village) Damit Hulu 5 Mr F & S Batalang village The communities live earlier in that area than the company so the communities has called as taking over land from company is not correct The company has planted in near river so there are FFB fill in river at harvesting. The company has contributed donation to communities but internal bureaucracy should be reform so that mill and estate manager was authorized to make decisions regarding of proposal from communities. Monkey, deer, pigs, snack, black winged kite bird, White throated Kingfisher bird, pekaka emas bird and kucing kuwuk still be faound in the estate The company will conduct of socialization & communication to the communities as well regarding land conflict and in form of deliberation. The company seeks to do good practice with giving mark on oil palm on the edge of the river and socialization to employees. The company will continue improvement for social relationship to communities. The company has made the protection to flora and fauna protected with in form socialization to employee and communities who were surround in estate Audit Verification response from the company. Result of verification in field on Asam-asam river (there are gold mining activity) there are not oil palm trees on riparian rather that there are banana trees ownership of communities. Whereas in Katal-katal River, there are oil palm trees in riparian but the company has make mark as boundary of chemical activity. Based on job description mill and estate manager that authority of mill and estate manager not covering decision of giving donation for request of communities. Result of verification in HCV areas, auditor not found it but in HCV identification report they are available. The company has HCV monitoring and management plan covering HCV no. 1.2 & 1.3. B. Issued raised during stakeholder interviews on-site No. Institution Adress Issue raised 1. CHSE Jorong POM OHS committee, investigation of accident, hazardous and toxic waste, Implementation of environmental impact assessment and UKL/UPL report 2. HSE Kalimantan Area OHS committee, investigation of accident, hazardous and toxic waste, Implementation of environmental impact assessment 3. HSE Kalimantan Area PPE, risk assessment, pollution & emission 4. EFB operator Implemented of EFB with 1 layer 5. Sprayers Implementation of spraying, women s worker no work with pesticides for pregnant and breastfeeding, agrochemical

67 Page 67 of 80 No. Institution Adress Issue raised 6. Warehouse PPE, hazardous & toxic waste, used oil 7. Harvester Implementation of harvesting, maintenance and IPM 8. Estate manager Stock of fertilizer & agrochemical available, There are manifest of hazardous & toxic waste 9. Boiler operator All operator has gives PPE It is mill has implementation of efficiency energy such was used fiber and shell 10. Estate manager The company has maintenance boundary There are coal mining activity by other company and traditional of gold mining by communities 11. Head of Batalang village CSR program, company policy brief 12. Head of Pemalongan village 13. FFB transporter (contractor) Local community development Land dispute, social conflict Working and business opportunity Contributions to local development

68 Page 68 of CERTIFIED ORGANISATION S ACKNOWLEDGEMENT OF INTERNAL RESPONSIBILITY 4.1 Date of Next Surveillance Visit The 2nd surveillance visit is planned for July Acknowledgements of Internal Responsibility and Formal Sign-Off by Client It is acknowledged that the assessment visit was carried out as described in this report and we accept the assessment findings and report content. Signed on behalf of PT Gawi Makmur Kalimantan Signed on behalf of TUV Rheinland Malaysia Farid Makruf Management Representative January 27, Mhd Fundy C Kurniawan Lead Auditor January 27, 2016

69 Page 69 of 80 APPENDICES Appendix 1: Details of certificate

70 Page 70 of 80