FELDA GLOBAL VENTURES PLANTATIONS (MALAYSIA) SDN BHD. KKS Kembara Sakti Grouping PLANTATION MANAGEMENT UNIT. Lahad Datu, Sabah, Malaysia

Transcription

1 FELDA GLOBAL VENTURES PLANTATIONS (MALAYSIA) SDN BHD RSPO Membership No: PLANTATION MANAGEMENT UNIT KKS Kembara Sakti Grouping Lahad Datu, Sabah, Malaysia

2 Page 2 of 72 MAIN ASSESSMENT REPORT ON RSPO CERTIFICATION FELDA GLOBAL VENTURES PLANTATIONS (MALAYSIA) SDN BHD ( V) RSPO Membership No: PLANTATION MANAGEMENT UNIT KKS Kembara Sakti Grouping Lahad Datu, Sabah, Malaysia Certificate No: RSPO Issued date: 26 November 2014 Expiry date: 25 November 2019 Assessment Type Assessment Dates Pre Assessment - Initial Certification (Main Assessment) Aug 2014 Annual Surveillance Assessment (ASA-01) Annual Surveillance Assessment (ASA-02) Annual Surveillance Assessment (ASA-03) Annual Surveillance Assessment (ASA-04) Re-Certification Intertek Certification International Sdn Bhd (formerly known as Moody International Certification (Malaysia) Sdn Bhd) 6-L12-01, Level 12, Tower 2, Menara PGRM No. 6 & 8 Jalan Pudu Ulu, Cheras, Kuala Lumpur, Malaysia. Tel: +00 (603) Fax: +00 (603) ia.mysbaenquiry@intertek.com Website:

3 Page 3 of 72 TABLE OF CONTENTS Section Content Page No 1.0 SCOPE OF MAIN ASSESSMENT Introduction Location (address, GPS and map) of palm oil mill and estates Description of supply base (fruit sources) Year of plantings and cycle Summary of Land Use Conservation and HCV Areas Other certifications held and Use of RSPO Trademarks Organizational information/contact person Tonnages Verified for Certification Time Bound Plan Abbreviations Used ASSESSMENT PROCESS Assessment Methodology, Plan & Site Visits Date of next scheduled visit Qualifications of the Lead Assessor and Assessment Team Certification Body Process of Stakeholder consultation ASSESSMENT FINDINGS Summary of findings Status of Identified Noncompliance and Corrective Actions, Observations and Identified Positive Elements Summary of Feedback Received from Stakeholders and Findings ASSESSMENT CONCLUSION AND RECOMMENDATION Acknowledgement of Internal Responsibility and Confirmation of Assessment Findings Intertek RSPO Certification Details for KKS Kembara Sakti Grouping APPENDICES Appendix A Qualifications of the Lead Assessor and Assessment Team Appendix B Assessment Plan Appendix C Maps of location Mill, Estates, Conservation and HCV areas Appendix D Photographs of Assessment findings at KKS Kembara Sakti Grouping Appendix E Time Bound Plan for Other Plantation Management Units 72

4 Page 4 of SCOPE OF MAIN ASSESSMENT 1.1 Introduction This Main Assessment was conducted on the Plantation Management Unit (PMU) KKS Kembara Sakti Grouping of Felda Global Ventures Plantations (Malaysia) Sdn Bhd (hereafter abbreviated as FGVPM), from Aug 2014, to assess if the organization s operations of the mill and its supply bases were in compliance against the RSPO Principles and Criteria (Apr 2013), Malaysian National Interpretation (Nov 2010) and the RSPO Supply Chain Certification Standard (Nov 2011) for Palm Oil Mill. This assessment also includes a review of the changes made by the PMU to comply with the requirements of the ratified new RSPO Principles and Criteria (effective 25 Apr 2013). It was found that the PMU is aware of the new RSPO Principles and Criteria and the transition period for compliance but has not yet make the necessary changes required. The plantation management unit (PMU) or management unit is equivalent to a certification unit as defined in the RSPO Certification Systems Document. Each PMU consists of one mill and its supply bases which are made up of estates owned/managed by Felda Global Ventures Plantations (Malaysia) Sdn Bhd. 1.2 Location (address, GPS and map) of palm oil mill and estates KKS Kembara Sakti Grouping consists of one (1) palm oil mill, namely Kembara Sakti Mill and six (6) estates as indicated in Table 1 below, which includes the addresses and GPS locations of the mill and estates. The FGVPM Sahabat 35 was formerly under KKS Jerangan Bistari and due to the closure of the Jerangan Bistari palm oil mill, it is now recently placed within the KKS Kembara Sakti Grouping. The location maps are provided in Appendix C. The 6 estates are all FGVPM owned estates. There are no Felda Scheme Smallholders (settlers) in this PMU. Table 1: Address of Palm Oil Mill, Estates and GPS Location Name Kembara Sakti Mill - POM (Capacity:60 MT/hour) FGVPM Sahabat 30 estate FGVPM Sahabat 35 estate FGVPM Sahabat 40 estate FGVPM Sahabat 41 estate FGVPM Sahabat 42 estate FGVPM Sahabat 43 estate Address Kilang Sawit Kembara Sakti, Peti Surat 24, Cenderawasih, Lahad Datu, Sabah, Malaysia Ladang Sahabat 30, Peti Surat No. 04, 91150, Cenderawasih, Lahad Datu, Sabah, Malaysia Ladang Sahabat 35, Peti Surat No.35, Cenderawasih, Lahad Datu, Sabah, Malaysia Ladang Sahabat 40, Peti Surat No. 40, 91150, Cenderawasih, Lahad Datu, Sabah, Malaysia Ladang Sahabat 41, Peti Surat No. 41, 91150, Cenderawasih, Lahad Datu, Sabah, Malaysia Ladang Sahabat 42, Peti Surat No. 42, 91150, Cenderawasih, Lahad Datu, Sabah, Malaysia Ladang Sahabat 43, Peti Surat No. 43, 91150, Cenderawasih, Lahad Datu, Sabah, Malaysia GPS Reference Latitude Longitude 5 21'39.74"N 119 5'34.80"E 5 19'23.20"N 119 3'18"E 5 20'56.40"N 119 7'1.20"E 5 18'45.36"N 119 5'5.10"E 5 21'46.43"N 119 4'55.13"E 5 21'34.65"N 119 2'44.57"E 5 18'35.26"N 119 2'55.53"E

5 1.3 Description of supply base (fruit sources) Page 5 of 72 The supply base i.e. FFB sources to the POM at KKS Kembara Sakti Grouping PMU are from the abovementioned 6 estates of this PMU and other PMUs of FGVPM. There are no FFB from Outside Crop Producers. Details of the planted hectarage for the FFB supply for Kembara Sakti Grouping are as shown in Table 2 below. Estate Table 2: Estate Area Summary as at Jul 2014 Certified Area Area Summary (ha) as at Jul 2014 Planted Area Oil Palm FGVPM Sahabat 30 estate 2, , FGVPM Sahabat 35 estate 2, , FGVPM Sahabat 40 estate 2, , FGVPM Sahabat 41 estate 2, , FGVPM Sahabat 42 estate 2, , FGVPM Sahabat 43 estate 1, , Notes: Total: 13, , This Main Assessment covered the overall land use for oil palm plantation areas, and the identified Conservation areas including HCV areas (if any) marked out at the estates. 2. The estates sampled for this Main Assessment have been selected based on their potential risks on social, environmental and biodiversity issues such as their proximity to forest reserves, hill sides, riparian zones and high conservation value areas. 1.4 Summary of plantings and cycle The 6 estates been developed beginning from So far, only some areas in FGVPM Sahabat 30 Estate have been replanted (2 nd cycle) in beginning of year 2014 while the other 5 estates are still in the 1 st cycle of planting. The age profile is as shown in Table 3. Estate Name FGVPM Sahabat 30 estate FGVPM Sahabat 35 estate FGVPM Sahabat 40 estate FGVPM Sahabat 41 estate FGVPM Sahabat 42 estate FGVPM Sahabat 43 estate Table 3: Age Profile of Planted Oil Palm as at Jul 2014 Year of Cycle of Mature OP (ha) Above 3 Planting Planting years st 1, nd - Immature OP (ha) 3 years & below , st 2, st 1, , st 2, , st 2, st 1, Total 12,

6 1.5 Summary of Conservation and HCV Areas Page 6 of 72 The summary of Conservation and HCV Areas as identified in KKS Kembara Sakti Grouping during this Main Assessment in 2014 is as shown in Table 4 below: Table 4: Conservation and HCV Areas # Statement of Land Use (Ha) As at Jul Planted Area (ha) Oil Palm (Main Assessment) Hectarage Ha - Mature 12, Immature Conservation Area (ha) - comprising buffer zones along small streams, hilly areas, swampy and unplantable areas HCV Area (ha) - comprising buffer zones near forest reserves, water catchments, burial & religious sites Other certifications held and Use of RSPO Trademarks The PMU is certified for ISO 9001:2008, ISO 14001:2004 and OHSAS 18001:2007. The RSPO s trademarks and logo are not being used by the PMU audited. Instructions for use were provided and acknowledged by the PMU through a signed Memorandum of commitment agreeing to adhere to the latest RSPO Rules on Communications & Claims. 1.7 Organizational information / Contact Person Name: Norazam Abdul Hameed Designation: General Manager, Sustainability and Quality Management (PSQM) Department Full Address: Plantation Sustainability and Quality Management (PSQM) Department, Felda Global Ventures Plantations (Malaysia) Sdn Bhd, Tingkat 8, Balai Felda, Jalan Gurney Satu, Kuala Lumpur Malaysia. Tel: ext 5348 or ext 5349 Fax: norazam.ah@feldaglobal.com Name: Anthonius Sani Designation: Sustainability Manager, Plantation Sustainability and Quality Management (PSQM) Department Full Address: Plantation Sustainability and Quality Management (PSQM) Department, Felda Global Ventures Plantations Malaysia Sdn Bhd, 3 rd Floor, Balai Felda, Jalan Gurney Satu, Kuala Lumpur, Malaysia. Tel: ext 5348 or ext 5349 Fax: anthonius.sani@feldaglobal.com

7 Page 7 of Tonnages Verified for Certification The breakdown of all the suppliers and their tonnages of FFB supplied to the POM at KKS Kembara Sakti Grouping based on the reporting period for Jan Dec 2013 are as follows: # Estate /Supplier FFB Processed (MT) Main Receiving Mill PMU Estates: 1. FGVPM Sahabat 30 estate 40, KKS Kembara Sakti 2. FGVPM Sahabat 35 estate KKS Kembara Sakti 3. FGVPM Sahabat 40 estate 41, KKS Kembara Sakti 4. FGVPM Sahabat 41 estate 55,848.4 KKS Kembara Sakti 5. FGVPM Sahabat 42 estate 64, KKS Kembara Sakti 6. FGVPM Sahabat 43 estate 32, KKS Kembara Sakti Sub-total from PMU estates: 234, KKS Kembara Sakti Other certified FGVPM PMU Estates: 7. FGVPM Sahabat 51 Baiduri Ayu PMU 1, KKS Baiduri Ayu 8. FGVPM Sahabat 53 Baiduri Ayu PMU 3, KKS Baiduri Ayu 9. FGVPM Sahabat 54 Baiduri Ayu PMU 3, KKS Baiduri Ayu Sub-total from certified FGVPM PMUs: 7, FGVPM Sahabat 26 Hamparan Badai PMU KKS Hamparan Badai 11. FGVPM Sahabat 28 Hamparan Badai PMU KKS Hamparan Badai 12. FGVPM Sahabat 33 Hamparan Badai PMU KKS Hamparan Badai Sub-total from FGVPM PMUs under certification: Outside Crop Producers (OCP): 0 - Grand total 242, Total annual volumes / tonnages of FFB supplied from the supply base to KKS Kembara Sakti Grouping POM during the previous period, current Main Assessment period and projected period are as follows: FFB Processed in FFB Processed in FFB Processed for Estate / Supplier Jan Dec 2013 Jan Dec 2014 Jan Dec Actual - Actual + Projected - Projected MT % MT % MT % Certifiable FFB from Kembara Sakti PMU Estates and other certified FGVPM PMUs Non-certifiable FFB from other FGVPM PMUs under certification 242, , , Total 242, , , SCCS Model for POM MB MB MB Note: Expected increase in FFB processed for year 2014 due to FFB from FGVPM Sahabat 35, which was recently placed within the KKS Kembara Sakti Grouping. Reduction in FFB for year 2015 due to planned replanting in certain estates.

8 Page 8 of 72 The annual certifiable tonnages of CPO and PK production by KKS Kembara Sakti Grouping from the supply base / suppliers as assessed and verified during the current Main Assessment (based on Jan - Dec 2013 data) are detailed as follows: POM Jan Dec Actual Jan Dec Actual + Projected Jan Dec Projected Total Certifiable FFB Processed (MT) 242, , ,795 Total Certifiable CPO Production (MT) 51,347 OER: % 53,641 OER: % 47,627 OER: % Total Certifiable PK Production (MT) 11,429 KER: 4.71 % 12,554 KER: 4.95 % 11,226 KER: 4.95 % Note: Currently, the POM has established and maintained procedures for the book keeping and monitoring requirements for the CPO at the mill and was verified to be adopting the Mass Balance MB model in accordance with the RSPO Supply Chain Certification Standard (SCCS) requirements. Verified activities and checked items for the SCCS of the POM are reported in section Time Bound Plan for Other Plantation Management Units FGVPM Group operates 70 palm oil mills and 416 oil palm estates and schemes throughout Malaysia. The organization is a member of RSPO since 2004 and has been taking an active role in the RSPO certification. Currently, a significant number of its Certification Units is undergoing the RSPO certifying process in accordance with its time bound plan to achieve RSPO certification for all its plantation certification units by Based on the due diligence conducted on FGVPM there were no significant land conflicts, no replacement of primary forest or any area containing HCVs since Nov 2005, no labour disputes that are not being resolved through an agreed process and no evidence of non-compliance with law in any of the non-certified holdings. FGVPM Group had declared that there was no new planting and new acquisition of plantation lands and the progress of the said activities are ongoing. These have been reviewed and updated in the Time Bound Plan as submitted by FGVPM. Details of the status of the Time Bound Plan as submitted by FGVPM are referred to in Appendix E (Part 2 of Assessment report).

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

10 Page 10 of ASSESSMENT PROCESS 2.1 Assessment Methodology, Plan and Site Visits Since 04 Jun 2014, Intertek has initiated public communications and notifications and invited the relevant stakeholders before the assessment to provide feedback and comments on their concern (if any) on KKS Kembara Sakti Grouping regarding the environmental, biodiversity, community development and other relevant issues. From Aug 2014, the Assessment team of Intertek conducted the Main Assessment in which three estates (viz., FGVPM Sahabat 30, FGVPM Sahabat 41 and FGVPM Sahabat 42 estate) of KKS Kembara Sakti Grouping as well as the palm oil mill were assessed for compliance against the RSPO requirements. The number of estates sampled was based on a minimum sample of 0.8 y where y is the number of management sub-units and the selection was made based on their potential risks on social, environmental and biodiversity issues such as their proximity to forest reserves, hill sides, riparian zones and high conservation value areas. During the on-site assessment, relevant documents and records, including Standard Operating Procedures (SOP), management plans, hectarage development, FFB, CPO and PK production, oil palm age profile, operational controls and measures, operational data and records, training records, etc. were reviewed and verified for compliance. The Assessment team using the process approach auditing technique covered the palm oil mill and estate operations, agricultural practices, pest management, pesticide and fertilizer application, occupational health and safety, social accountability, environment and other requirements. Stakeholders interviews were conducted during the assessment and feedback obtained as part of information and evidence gathering. (See section 2.5 Process of stakeholder consultation). KKS Kembara Sakti Grouping POM was also assessed against the requirements for the Mass Balance Module as specified in RSPO Supply Chain Certification Standard for CPO mill. This part of the assessment covered the verification of implementation of documented procedures and availability of records to demonstrate compliance against all the elements for Segregation requirements. These include documented procedure, purchasing and goods in, record keeping, sales and goods out, processing, monitoring and traceability of the CSPO and CSPK quantities, training for staff and claims. After completion of the on-site field assessment, Intertek also performed the evaluation of conformity against the RSPO Certification System requirements for CB. The assessment report, findings and associated documents were evaluated through an independent review by the Intertek Internal Technical Reviewer/Panel which was subsequently validated by an External Peer Reviewer prior to the certification decision and approval of this report/certification by Intertek. The details of the Assessment Plan (actual on-site) are provided in Appendix B. 2.2 Date of next scheduled visit The next scheduled visit will be the Surveillance Assessment which will be carried out within a 12-month period after the certification decision and approval of this report/certification. 2.3 Qualifications of the Lead Assessor and Assessment Team Competency details of the Lead Assessor and Assessment Team are given in Appendix A. 2.4 Certification Body Intertek Certification International Sdn Bhd [formerly known as Moody International Certification (Malaysia) Sdn Bhd] is part of the Intertek Group, which is a worldwide technical services organization dedicated to reducing clients' risks by providing technical inspection services, management system certification in quality, environmental, occupational safety & health and product certification, RSPO SCC, ISCC, Marine Sustainability Chain-of-Custody, MTCS and PEFC Chain-of Custody certification in applicable industry sectors including the agricultural and forestry sectors. Intertek operates globally providing clients with a wide-ranging technical inspection expertise and access

11 Page 11 of 72 to thousands of skilled specialists worldwide. Intertek Group s certification business is ranked in the top 10 worldwide, and is available globally offering certification across a wide range of industries. 2.5 Process of stakeholder consultation Stakeholder consultations began with notification of the upcoming assessment through the websites of RSPO, PGVPM and Intertek. Date of public notification of the main assessment of the PMU was made on 04 Jun s, facsimiles and letters of the same were sent to applicable stakeholders including government agencies, NGOs and local communities. Telephone enquiries were made prior to the actual assessment and stakeholder s response and feedback received were followed up accordingly. During the assessment, stakeholders were interviewed and their feedbacks were recorded. Among the stakeholders consulted were workers, trade union leaders, women representatives; local community leaders, representatives of government departments / agencies and NGOs; external FFB suppliers, fertilizer suppliers and contractors. Details on stakeholders feedback, PMU response and Intertek verification / comments are provided in section 3.3. Among the list of key stakeholders consulted was the following: Government Agencies (by s) 1. Department of Lands And Mines 10. Environment Protection Department Sabah 2. Department of Environment 11. Department of Forestry Sabah 3. Department of Forestry Peninsular Malaysia 12. Department of Immigration Sabah 4. Department of Immigration 13. Department of Irrigation & Drainage Sabah 5. Department of Irrigation & Drainage 14. Department of Labour Sabah 6. Department of Labour 15. Department of Occupational Safety & Health Sabah 7. Department of Occupational Safety & Health 16. Sabah Wildlife Department Sabah 8. Department of Orang Asli Affairs 17. Land and Mines Office Sabah 9. Department of Wildlife & National Parks Statutory Bodies (by s) 18. Malaysian Palm Oil Board (MPOB) 23. Malaysian Palm Oil Board (MPOB) - Sarawak Region 19. Malaysian Palm Oil Board (MPOB) Northern Region 24. Malaysian Palm Oil Board (MPOB) - Sabah Region 20. Malaysian Palm Oil Board (MPOB) - Central Region 25. Malaysia Palm Oil Association (MPOA) 21. Malaysian Palm Oil Board (MPOB) Southern Region 26. Malaysia Palm Oil Association Sabah (MPOA) 22. Malaysian Palm Oil Board (MPOB) - Eastern Region NGOs (by s) 27. All Women s Action Society (AWAM) 56. Malaysian Nature Society Pulau Pinang 28. BCSDM - Business Council for Sustainable Development in Malaysia 57. Malaysian Nature Society Sabah 29. Borneo Child Aid Society (Humana) 58. Malaysian Nature Society Terengganu 30. Borneo Resources Institute Malaysia (BRIMAS) 59. Malaysian Plant Protection Society (MAPPS) 31. Borneo Rhino Alliance (BORA) 60. Mountaineering and Outdoor Pursuits Association of Negeri Sembilan 32. Center for Orang Asli Concerns COAC 61. National Council of Welfare & Social Development Malaysia - NCWSDM 33. Centre for Environment, Technology and Development, Malaysia - CETDEM 62. National Union of Plantation Workers (NUPW) 34. Consumers Association Of Penang - CAP 63. Partners of Community Organisations (PACOS) 35. EcoKnights 64. Penang Institute previously known as Socio-Economic & Environmental Research Institute (SERI) 36. Environmental Management and Research Association of Malaysia (ENSEARCH) 65. Pesticide Action Network Asia and the Pacific (PAN AP) 37. Environmental Protection Society Malaysia (EPSM) 66. Proforest - South East Asia Regional Office 38. Friends of the Earth, Malaysia 67. R.E.A.C.H. - Regional Environmental Awareness Cameron Highlands 39. Future in Our Hands Society, Malaysia 68. Sabah Wetlands Conservation Society (SWCS) 40. Global Environment Centre 69. SEPA - Sabah Environmental Protection Association 41. HUTAN - Kinabatangan Orang-utan Conservation Programme 70. SUARAM - Suara Rakyat Malaysia 42. Institute of Foresters, Malaysia (IRIM) 71. SUHAKAM - National Human Rights Society - Persatuan Kebangsaan Hak Asasi Manusia 43. JUST - International Movement for a Just World 72. Sustainable Development Network Malaysia (SUSDEN) 44. Malaysian CropLife & Public Health Association (MCPA) 73. Tenaganita Sdn Bhd

12 Page 12 of Malaysian Environmental NGOs - MENGO 74. The Malaysian Forum of Environmental Journalist (MFEJ) 46. Malaysian National Animal Welfare Foundation MNAWF 75. TRAFFIC Southeast Asia - Wildlife trade & trafficking monitoring programme 47. Malaysian Nature Society (MNS) Kuala Lumpur 76. Transparency International - Malaysian Chapter 48. Malaysian Nature Society Johor 77. Treat Every Environment Special Sdn Bhd. (TrEES) 49. Malaysian Nature Society Kedah 78. United Nations Development Programme - UNDP Malaysia 50. Malaysian Nature Society Kelantan 79. UNION - AMESU 51. Malaysian Nature Society Kuching 80. Water Watch Penang (WWP) 52. Malaysian Nature Society Melaka/Negeri Sembilan 81. Wetlands International (Malaysia) 53. Malaysian Nature Society Miri 82. Wild Asia Sdn Bhd 54. Malaysian Nature Society Pahang 83. World Wide Fund for Nature (WWF) Malaysia 55. Malaysian Nature Society Perak 84. World Wide Fund of Nature (WWF) Sabah Local community (On-site interviews) Gender representatives Workers representatives Suppliers / Contractors Village Heads

13 3.0 ASSESSMENT FINDINGS Page 13 of Summary of findings Principle 1: Commitment to transparency Criterion 1.1 Growers and millers provide adequate information to relevant stakeholders on environmental, social and legal issues relevant to RSPO Criteria, in appropriate languages and forms to allow for effective participation in decision making There shall be evidence that growers and millers provide adequate information on (environmental, social and/or legal) issues relevant to RSPO Criteria to relevant stakeholders for effective participation in decision making Records of requests for information and responses shall be maintained. Major / Minor TBF The PMU has established and implemented a documented procedure ML-1A/L2-PR3 (0) dated Mar 2012 for providing adequate information on environmental, social and legal issues relevant to RSPO Criteria to relevant stakeholders for effective participation in decision making. The procedure includes handling responses and requests from stakeholders. This was evident from records of visits, inspections and correspondence with stakeholders such as DOSH (JKKP), DOE (JAS), BOMBA, MPOB and Energy Commission ( Suruhanjaya Tenaga ). Date of public notification of the main assessment of the PMU was made on 04 Jun Prior to this assessment, Sabah Forestry Department and Malaysian Nature Society provided their concerns to Intertek (refer to 3.3 for details). The PMU maintained an updated list (ML-1A/L4-F31 (0)) of internal stakeholders, external stakeholders, government departments/agencies, consultants, contractors, suppliers, transporters. A Stakeholders Consultation was carried out on 17/12/2013 at Felda Residence Sahabat. Stakeholders feedback (positive and negative) and management action plan recorded in the Stakeholders Booklet Public notification was made by the PMU to the stakeholders at least one month prior to the stakeholders consultation. Criterion 1.2 Management documents are publicly available, except where this is prevented by commercial confidentiality or where disclosure of information would result in negative environmental or social outcomes Publicly available documents shall include, but are not necessarily limited to: Land titles/user rights (Criterion 2.2); The organization s policies declared that upon request, the following types of mandatory documents are available to the public: land titles/user rights, occupational health and safety plan, plans and impact assessments relating to environment and social impacts, pollution prevention plans, details of complaints & grievances, negotiation procedures continuous improvement plan

14 Page 14 of 72 Occupational health and safety plans (Criterion 4.7); Plans and impact assessments relating to environmental and social impacts (Criteria 5.1, 6.1, 7.1 and 7.8); HCV documentation (Criteria 5.2 and 7.3); Public summary of certification assessment report. Copies of all land titles were available and have been maintained at the POM and Estates. HQ kept the original copies. These publicly available documents include key indicators of performance like waste management and disposal plans for the mill and estates. Also, Continual Improvement Action Plans include targets for waste reduction and pollution prevention. Occupational Safety and Health (OSHA) Plan 2014 documented and implemented. Policy and HIRAC documented for both mill and estates. OSHA Plan include the establishment and implementation of CHRA, medical surveillance, training (BOMBA), Emergency Preparedness (ERP), Fire Drill, First Aid, PPE Palm Oil Mill certified to OHSAS CHRA conducted by an external consultant, OSHE Global Solutions with report dated 20/11/2013. Content of the report includes the following: Fertilizers application, pesticides application and maintenance works. CHRA Methodology Collection of information Evaluation of risks, hazard levels, exposure levels and control measures Summary of recommendations Environmental Impact Assessment conducted by consultancy company, Aksenta and documented for the whole of Sahabat Group. Approval of replanting for Gugusan Sahabat Plantation by Jabatan Perlindungan Alam Sekitar (DOE) Sabah was issued on 19/06/2012 for the proposed replanting at areas which include Felda Kembara Sakti Grouping (reference no: JPAS/PP/11/ 600-1/11/1/115 (31) Environmental aspect and impact assessment conducted for the POM and estates in the PMU on 15/11/2013 and action plans documented and implemented. Social Impact Assessment carried out on 17/12/2013. Positive and negative impacts and action plan documented in the Stakeholders Booklet HCV Identification Survey conducted by consultancy company Aksenta and documented for the whole of Sahabat Group. Interim Report dated 27/03/2014. Only Sahabat 35 estate in the PMU with HCV areas as follows: 1. HCV 1.2 (RTE species: waterbirds, beavers and crocodiles) 2. HCV 4.1 (pond in water catchment area of Sg. Ganduman) Action Plan 2014/2015 documented for HCV area and biodiversity in Sahabat 35 estate with specific actions to be taken by the Estate Manager from Apr/Jun 2014 to

15 Page 15 of 72 Pollution prevention and reduction plans (Criterion 5.6); Details of complaints and grievances (Criterion 6.3); Negotiation procedures (Criterion 6.4); Continual improvement plans (Criterion 8.1); Public summary of certification assessment report; Human Rights Policy (Criterion 6.13). Jan/Mar Documented pollution prevention and reduction plans include measures for pollution control, pesticides reduction, schedule wastes and domestic wastes disposal, reuse and recycling. The PMU has established and implemented a documented procedure ML-1A/L2-PR4 (0) dated Mar 2012 for complaints and grievances. As to date, the PMU did not receive any complaints from any external stakeholders. There is also a Complaints Box provided in the mill and estates with a Complaints and Grievances Form for recording any complaints/grievances. A Complaint Book ( Buku Aduan ) is also maintained in the POM and estates. For Sahabat 41 estate, one complaint dated 09/06/2014 by the estate on behalf of village residents to contractor, Felda Engineering Services Sdn Bhd concerning grass not being cut and problem of domestic rubbish not being collected regularly. For Sahabat 42 estate, there were 2 entries for year 2013 and 8 entries for year 2014 in the Complaint Book, mostly relating to request for repairs to staff/workers houses and quarters. For Sahabat 30 estate, there were 5 entries for year 2013 and 8 entries for year 2014 in the Complaint Book concerning water supply interruption, grass cutting, roads and wild dogs. The PMU has established a documented negotiation procedure ML-1A/L2-PR1 (0) dated Mar No case of land claims in the PMU. The PMU has identified, documented and implemented Continuous Improvement Plans over the period 2013 to 2015 (ML-1A/L2-PR11 (0), dated Mar 2012). Public summary of certification assessment reports are available from the company upon request. The Human Rights Policy has been documented and signed by the President and CEO of Felda Global Ventures on 01/06/2014 and communicated to all levels of the workforce and operations. Copies of the policy found to be displayed at prominent locations in the POM and estates. See Major NC in C8.1.1 Criterion 1.3 Growers and millers commit to ethical conduct in all business operations and transactions There shall be a written policy committing to a code of ethical conduct and integrity in all operations and transactions, which shall be documented and communicated to all levels of the workforce and operations. Major / Minor (TBF) The Policy of commitment to a Code of Ethical Conduct and Integrity has been documented and signed by the President and CEO of Felda Global Ventures on 01/06/2014 and communicated to all levels of the workforce and operations. Copies of the policy found to be displayed at prominent locations in the POM and estates. There is a booklet containing details of Service Terms

16 Page 16 of 72 and Conditions and Code of Ethical Conduct and Integrity for Employees of Felda Group of Companies. Principle 2: Compliance with applicable laws and regulations Criterion 2.1 There is compliance with all applicable local, national and ratified international laws and regulations Evidence of compliance with relevant legal requirements shall be available A documented system, which includes written information on legal requirements, shall be maintained A mechanism for ensuring compliance shall be implemented. A Register of Legal and Other Requirements covering the applicable local and international laws and regulations has been compiled for the mill and estates. The Register includes a List of applicable Sabah Laws and Regulations. There is also is a Compliance Checklist. The relevant laws and legislations identified and listed cover safety and health, environment, pollution management, chemical handling, usage & storage, schedule waste management, labour laws, Unions, EPF, SOCSO, Housing and Amenities. Based on the site observations, interviews and records checking at the mill and estates, there were evidences of compliance with the relevant laws, regulations, local and international laws at the POM and estates. There were no cases of any violation or actions imposed by relevant authorities. Statutory returns to relevant authorities found to be in compliance. Licenses and permits (License for Foreign Workers Employment, Workers Wages Deduction Permit, License for Controlled Items Diesel and Fertilizer, MPOB license, DOSH Certificate, DOE license, BOMBA Fire Certificate, Energy Commission License, etc.) were monitored for their expiry dates and found to be renewed and valid. Licenses, permits and certificates were displayed in the mill and estate offices. Steam engineers, boilermen and electricians were noted to be with valid certificates from relevant authorities (DOSH and Energy Commission). Valid certificates of fitness for boilers, sterilizers, air receivers, thermal deaerator, steam separator, vacuum oil dryer, etc. issued by DOSH for compliance with The Factories and Machinery Act 1967, Regulations Valid license for diesel generators issued by Energy Commission ( Suruhanjaya Tenaga ). The Mill is certified by SIRIM for its Quality, Environment and Safety & Health Management Systems. The PMU has established and implemented a documented procedure ML-1A/L2-PR2 (0) dated Mar 2012 for identifying, determining, reviewing and updating applicable legal and other requirements. It included the listing of laws and regulations that were being monitored for changes and reference. The procedure includes a monitoring mechanism of a regular check and evaluation for compliance against the applicable laws in the Legal Register. POM and estates have carried out the evaluation for ensuring compliance by completion of the Compliance Checklist on 20/06/2014.

17 Page 17 of A system for tracking any changes in the law shall be implemented. Criterion 2.2 Tracking of changes in the relevant laws are communicated and received from HQ. Monitoring of changes to the applicable laws and regulations carried out through periodical review in accordance with the documented procedure ML-1A/L2-PR2 (0) dated Mar Latest update of laws and regulations in the Legal Register carried out on 31/07/2014. The right to use the land is demonstrated, and is not legitimately contested by local people who can demonstrate that they have legal, customary or user rights Documents showing legal ownership or lease, history of land tenure and the actual legal use of the land shall be available Legal boundaries shall be clearly demarcated and visibly maintained Where there are or have been disputes, additional proof of legal acquisition of title and evidence that fair compensation has been made to previous owners and occupants shall be available, and that these have been accepted with free, prior and informed consent (FPIC). Copies of the land titles of the mill and estates were maintained and found to be in proper order. Country Lease Title No Plan No NH 31 for a total area of 78,400 ha for the whole Felda Sahabat Complex (see Appendix C-2 where the Kembara Sakti PMU is within the Sahabat Complex) with a lease period from 01/01/1981 to 31/12/2079 issued by the Sabah State Government to Felda for the cultivation of oil palm, cocoa, rubber, vegetables, fruit crops. Records are available to show that the land lease comply with legal requirements and does not infringe on any legal rights that require free, prior and informed consent (FPIC). The original copies are maintained by the Corporate Head office. The legal use of the land confirmed to be for cultivation of oil palm and agricultural use. It was verified that there has been no change to the stated land titles and designated use for cultivation of oil palm and agricultural use. Legal boundary markers were sighted and maintained along the perimeters of estate lands which were mapped with a 1-meter differential Global Positioning System (GPS). Locations of several boundary stones and pole markers were visited and verified to be within the boundary parameters of the estates. There has been no dispute on the land rights in the PMU. As such, the process of fair compensation and FPIC is currently not applied. Major / Minor (TBF) There shall be an absence of significant land conflict, unless requirements for acceptable conflict resolution processes (see Criteria 6.3 and 6.4) are implemented and accepted by the parties involved. There is a documented procedure ML-1A/L2-PR 1 (0) dated Mar 2012 for handling and response to land disputes and customary rights as well as for calculation and distribution of compensation. Major / Minor (TBF)

18 Page 18 of For any conflict or dispute over the land, the extent of the disputed area shall be mapped out in a participatory way with involvement of affected parties (including neighbouring communities where applicable). No land disputes in the PMU. As such the process of participatory mapping is not applicable for verification of implementation. Major / Minor (TBF) To avoid escalation of conflict, there shall be no evidence that palm oil operations have instigated violence in maintaining peace and order in their current and planned operations. No evidence that the palm oil operations have instigated violence in maintaining peace and order in their current and planned operations. Major / Minor (TBF) Criterion 2.3 Use of the land for oil palm does not diminish the legal, customary or user rights of other users without their free, prior and informed consent Maps of an appropriate scale showing the extent of recognised legal, customary or user rights (Criteria 2.2, 7.5 and 7.6) shall be developed through participatory mapping involving affected parties (including neighbouring communities where applicable, and relevant authorities) Copies of negotiated agreements detailing the process of free, prior and informed consent (FPIC) (Criteria 2.2, 7.5 and 7.6) shall be available and shall include: a) Evidence that a plan has been developed through consultation and discussion with all affected groups in the communities, and that information has been provided to all affected groups, including information on the steps that shall be taken to involve them in decision making; b) Evidence that the company has respected communities decisions to give or withhold their consent to the operation at the time that this decision was taken; c) Evidence that the legal, economic, environmental and social implications for permitting operations on their land have been understood and accepted by affected communities, including the implications for the legal status of their land at the expiry of the company s title, concession or lease on the land. The lands at the PMU are legally leased by Felda / PGVPM from the Sabah State Government as evidenced by the land titles. The lands are not encumbered by any customary lands or user rights and therefore the process of participatory mapping is not required. The lands were leased for 99 years by Felda / PGVPM from the Sabah State Government effective from Jan 1981 with the right to develop it for oil palm plantations or agriculture use. Records are available to show that the land lease comply with legal requirements and does not infringe on any legal rights that require free, prior and informed consent (FPIC) All relevant information shall be available in appropriate forms and languages, including assessments of impacts, proposed benefit sharing, and legal arrangements. No cases of land claims in this PMU. As such this process is not applicable for verification. Not applicable

19 Page 19 of 72 Major / Minor (TBF) Evidence shall be available to show that communities are represented through institutions or representatives of their own choosing, including legal counsel. Major / Minor (TBF) This process is not applicable for verification. Not applicable Principle 3: Commitment to long-term Economic & Financial Viability Criterion 3.1 There is an implemented management plan that aims to achieve long-term economic and financial viability A business or management plan (minimum three years) shall be documented that includes, where appropriate, a business case for scheme smallholders. Palm Oil Mill has documented a 5 years (2015 to 2019) Management Plan (Budget) with details of revenue and costs of operation that include the following: (1) Mill extraction rates = OER and KER trends; (2) Cost of Production = Cost/MT CPO trends; (3) Forecast prices; (4) Financial indicators = Cost of labour, cost of facilities and equipment, cost of materials, etc.) An annual replanting programme projected for a minimum of five years (but longer where necessary to reflect the management of fragile soils, see Criterion 4.3), with yearly review, shall be available. The estates have documented a 3 years (2015 to 2017) Management Plan (Budget) with details of revenue and costs of operation that include the following: (1) Replanting programme - planting materials are DxP seedling and cloned seedling; (2) Crop projection = FFB yield/ha trends; (3) Cost of Production = Cost/MT FFB trends; (4) Forecast prices; (5) Financial indicators = Cost of labour, cost of facilities, cost of materials, etc.). The budgets also include provisions for sustainability efforts and improvement programmes. Mill and Estate Managers monitor the operational performance against Key Performance Indications and targets (FFB yields, quality, productivity, pesticides usage, fertilizers usage, etc). There is evidence of monitoring of costs against budget to achieve specified targets. Performances are discussed in the monthly meetings held at the PMU and issues and actions needed are recorded for follow up in the next monthly meeting. The records of these meetings were available and verified during the audit. Monthly, quarterly, half-yearly and yearly reports are submitted to the General Manager of Zone/Wilayah. Replanting Programme for year 2017 to year 2020 for the Sabah Eastern Zone sighted. This program includes the replanting programme for the estates in this PMU. Evidence of replanting programme planned, reviewed and on-going implementation carried out.

20 Page 20 of 72 Principle 4: Use of appropriate best practices by growers and millers Criteria 4.1 Operating procedures are appropriately documented, consistently implemented and monitored Standard Operating Procedures (SOPs) for estates and mills shall be documented. POM has the following SOPs: 1. Palm Oil Mill Operation Manual (08/04/2010 and amendments) covering every station from the security gate for reception of FFB until the delivery of processed oil and POME management. 2. Laboratory Operation Manual (28/04/2011 and amendments). 3. Quality, Environmental and Occupational Health & Safety Manual and Procedures of Palm Oil Mill (24/02/210 and amendments). The SOP for pollution prevention includes measuring and monitoring mill effluents and waste disposal / recycling. 4. Procedure for Safe Work and Management of Safety and Health for Workers (14/07/2010 and amendments). The SOP for safe working practices in the POM includes hazards identification, risk assessment and control measures. The hazards include noise, chemicals, heat, fire, fuel spillage, working at heights, working in enclosed space, hot work, lightning, electrocution, machinery, etc. Control measures include the use of PPE, fire drill training, first aid training, etc.) and permit to work system for the mill. 5. Supply Chain Procedure Doc No. FGVPM-RSPO SCCS Issue 1.0 Rev 2.0 (Effective 1 Dec 2012) SOP for Mill RSPO Supply Chain Certification System using the Mass Balance (MB) module.. The estates have the following SOPs: 1. Sustainable Oil Palm Estate Operation Manual issued by FELDA Agricultural Services Sdn Bhd (FASSB) on 01/06/2012. The manual describes operational procedure of nursery practices, land preparation, planting practices, ground cover maintenance, roads, immature stage, harvesting, collection of bunches, manuring, pesticide application, pests & diseases control. The SOP for pesticides specifies safe working practices and application of pesticides. It includes annual medical surveillance for pesticides operators. 2. SOP for riparian zone management with specified buffer zones. Relevant Key Performance Indicators (KPIs) specified for quality, environment, safety and cost control A mechanism to check consistent implementation of procedures shall be in place. The mechanism to check the implementation of SOPs was available. All records have been kept by the respective staff of each unit to monitor the operation procedure and progress of work. These records are checked by the Assistant Manager and Manager regularly. These records indicate satisfactory implementation during the audit..

21 4.1.3 Records of monitoring and any actions taken shall be maintained and available, as appropriate The mill shall record the origins of all third-party sourced Fresh Fruit Bunches (FFB). The records of monitoring and the actions taken had been maintained for more than 12 months on the mill and estates concerned. These records had been verified to be satisfactory. The SOP for Supply Chain stated that the mill shall maintained records on the origins of all third-party sourced Fresh Fruit Bunches (FFB). It had been verified that this mill did not receive any third party sourced FFB. It only receives FFB from the 6 estates of the PMU and other PMUs of FGVPM and confirmed from the records verified. Page 21 of 72.. Criteria 4.2 Practices maintain soil fertility at, or where possible improve soil fertility to, a level that ensures optimal and sustained yield There shall be evidence that good agriculture practices, as contained in Standard Operating Procedures (SOPs), are followed to manage soil fertility to a level that ensures optimal and sustained yield, where possible Records of fertiliser inputs shall be maintained There shall be evidence of periodic tissue and soil sampling to monitor changes in nutrient status A nutrient recycling strategy shall be in place, and may include use of Empty Fruit Bunches (EFB), Palm Oil Mill Effluent (POME), and palm residues after replanting. Criteria 4.3 Practices minimise and control erosion and degradation of soils. GAP for minimization of soil erosion and maintenance of soil fertility is maintained via the frond stacking and fertilizer application as per recommendation and training by Felda Agricultural Services Sdn. Bhd. These had been verified through the records for fertilizer application and observations during field visit. Records of fertilizer application had been verified to be in order. Leaf and soil sampling and analysis had been carried out annually to determine the nutrient levels for fertilizer recommendations that aimed to sustain the long term soil fertility and nutrient efficiency. Records of the sampling and analysis had been verified to be satisfactory. EFB mulching was carried out at Sahabat 30 and Sahabat 41 estates, in mature area along the inter-row, and around the circle in the immature palms. Records had been verified to be satisfactory. A balance of 48 MT will be absorbed soon by the estates. POME application is through gravitation flow into the field at Sahabat Maps of any fragile/marginal soils shall be available A management strategy shall be in place for plantings on slopes between 9 and 25 degrees unless specified otherwise by the company s SOP. Based on the soil maps and from field assessment, there was no fragile/marginal soil in the estates. Changes in soil nutrient status monitored on an annual basis through foliar and soil sampling and analysis. The Agronomist determines the annual fertilizer recommendations In this PMU, the palms were mostly planted on flat areas. In Sahabat 41, 20% of the planted area are on slopes ranging from 6º to 25º and found to have planting terraces as specified in the SOP. The PMU implemented the Best Management Practices for erosion control during replanting or any activities involving earth disturbance. Steps taken for erosion control are soil stabilization, run-off control and sediment trapping to mitigate the disturbed earth entering waterways...

22 4.3.3 A road maintenance programme shall be in place Subsidence of peat soils shall be minimised and monitored. A documented water and ground cover management programme shall be in place. There was no soil erosion noted during the field visit. Estate roads are found to be in satisfactory condition. Road maintenance program had been verified in the estates. At the time of visit, road grading was in progress in Sahabat 41 estate, Block 25 and found to be in order. Based on the estate soil maps, there was no peat soil in the estates as confirmed during on-site assessment. Page 22 of Drainability assessments where necessary will be conducted prior to replanting on peat to determine the long-term viability of the necessary drainage for oil palm growing. No peat soil in the estates as confirmed during on-site assessment A management strategy shall be in place for other fragile and problem soils (e.g. podzols and acid sulphate soils). No fragile and problematic soils were encountered in these estates. There are records and monitoring of the areas where EFB and POME were applied. Replanted areas also monitored. Criteria 4.4 Practices maintain the quality and availability of surface and ground water An implemented water management plan shall be in place Protection of water courses and wetlands, including maintaining and restoring appropriate riparian and other buffer zones (refer to national best practice and national guidelines) shall be demonstrated. Documented water management plan and relevant records at the mill and estates had been verified to be in order. The plan includes steps such as soil stabilization, run-off control and sediment trapping to mitigate the disturbed earth entering waterways (streams/rivers in Sahabat 35, 40, 41, 42 and 43 estates). There are no streams/rivers in Sahabat 30 estate. Water samples were taken at monthly interval at the final discharge point of the palm oil mill effluent pond, and at every three months interval for upstream and downstream of waterways. Tests conducted for ph, BOD, COD, Total Solids, Suspended Solids, Oil & Grease, Ammoniacal Nitrogen and Total Nitrogen. Analysis results meet the DOE requirements. Water for domestic use is supplied by the Sabah State Water company. Water for domestic use has been tested to ensure that it meets all the required parameters, including that of bacterium count (Specification for Drinking Water Quality under Ministry of Health). Rainfall data found to be monitored as part of the water management plan. There was no construction of bunds/ weirs/dams across the waterways passing through the estates. However, see Minor Non-Conformance raised on criterion relating to buffer zone demarcation.. See Minor NC on criterion Appropriate treatment of mill effluent to required levels and regular monitoring of discharge quality, shall be in compliance with national regulations (Criteria 2.1 and 5.6). At the palm oil mill, water samples have been taken at monthly interval at the discharge point of the effluent pond. Tests conducted for ph, BOD, COD, Total Solids, Suspended Solids, Oil & Grease, Ammoniacal Nitrogen and.

23 4.4.4 Mill water use per tonne of Fresh Fruit Bunches (FFB) (see Criterion 5.6) shall be monitored. Total Nitrogen. BOD levels had been in the range of 3 ppm in Jan 2014 to 8 ppm in Jul 2014 with an average of 13 ppm for the past 7 months. The upper limit specified by D.O.E. Sabah is <100 ppm. Total Suspended Solids (TSS) levels were monitored and the results noted to be within the permissible limits (< 200 ppm). Water usage in the mill averaged at 0.98 m 3 /mt FFB. The level of water usage is within the industrial norm. Page 23 of 72. Criteria 4.5 Pests, diseases, weeds and invasive introduced species are effectively managed using appropriate Integrated Pest Management techniques Implementation of Integrated Pest Management (IPM) plans shall be monitored. IPM Plan includes the planting of beneficial plants and control of damage by rodents. Beneficial plants such as Turnera subulata, Cassia cobanensis, and Antigonon leptopus are grown in Sahabat 30, 41 and 42 estates. In Sahabat 40 nursery, raising of Cassia cobanensis was viewed and found to be satisfactory during the field audit. However, all the three estates were unable to show proper mapping and planning records for future establishment. A Major Non-Conformance was raised. Major NC# NR Training of those involved in IPM implementation shall be demonstrated. Pest infestation was minimal in the estates. Training records for personnel on IPM implementation were available and was verified on-site to be satisfactory during the field assessment. Criteria 4.6 Pesticides are used in ways that do not endanger health or the environment Justification of all pesticides used shall be demonstrated. The use of selective products that are specific to the target pest, weed or disease and which have minimal effect on non-target species shall be used where available Records of pesticides use (including active ingredients used and their LD50, area treated, amount of active ingredients applied per ha and number of applications) shall be provided. Manual Lestari 1A Doc. No. ML-1A/L3-GP 1 (0) dated Mar 2012 Guidance Procedure for written justification in the use of agrochemicals was reviewed and found acceptable. The PMU has an Approved List of Pesticides registered under the Pesticide Board of Malaysia. The types of chemicals used are as follows: (1) Glyphosate isopropyl amine (41% a.i.) - Ecomax (2) Metsulfuron methyl (20% a.i.) Juru 20F (3) Paraquat dichloride (13% a.i.) - Paraquat (4) Triclopyr butoxy ethyl ester (32.1% a.i.) - Garlon (5) Glufosinate ammonium (13.5% a.i.) Basta 15 Records of pesticides use (including active ingredients used and their LD 50, area treated, amount of a.i. applied per ha and number of applications) had been maintained and kept for a minimum of 5 years. Records on monitoring were satisfactory Any use of pesticides shall be minimised as part of a plan, and in It had been the policy of the estates to minimize the use of pesticides in accordance with IPM plan..

24 accordance with Integrated Pest Management (IPM) plans. There shall be no prophylactic use of pesticides, except in specific situations identified in industry s Best Practice Pesticides that are categorised as World Health Organisation Class 1A or 1B, or that are listed by the Stockholm or Rotterdam Conventions, and paraquat, are not used, except in specific situations identified in industry s Best Practice. The use of such pesticides shall be minimised and eliminated as part of a plan, and shall only be used in exceptional circumstances. Pesticides selected for use are those officially registered under the Pesticides Act 1974 (Act 149) and the relevant provision (Section 53A); and in accordance with USECHH Regulations (2000). No prophylactic use of pesticides had been carried out at the estates for the period concerned. Pesticide reduction programme is monitored on usage per hectare basis. Overall, it has shown a decline in usage on a year to year basis. It is the policy of the group to reduce the use of paraquat gradually and achieve zero usage by the end of Upon obtaining an alternative chemical, paraquat usage will cease. The use of Highly Toxic Pesticides (HTP) such as paraquat was verified for compliance to Regulation 9 of the Pesticides Act 1974 as follows: - Paraquat found to be kept under lock and key. - Form II for paraquat use found to be available and maintained with record of the hours worked. - First Aid Kit was issued to all Mandores and Supervisors as per requirements of the 4 th Schedule of the Regulations. - During field visit, portable signage boards noted to be displayed at areas of spraying activity as per requirements of Part II of the 5 th Schedule of the Regulations. Page 24 of Pesticides shall only be handled, used or applied by persons who have completed the necessary training and shall always be applied in accordance with the product label. Appropriate safety and application equipment shall be provided and used. All precautions attached to the products shall be properly observed, applied, and understood by workers (see Criterion 4.7) Storage of all pesticides shall be according to recognised best practices. All pesticide containers shall be properly disposed of and not used for other purposes (see Criterion 5.3). Pesticides shall be stored in accordance to the Occupational Safety and Health Act 1994 (Act 514) and Regulations and Orders, Pesticides Act 1974 (Act 149) and Regulations Application of pesticides shall be by proven methods that minimise risk and impacts. A valid permit for hazardous waste storage was sighted. Trainings organized for pesticide operators (including contractor s workers) on the safe handling and application of pesticides are conducted in compliance with Regulation 22 (Use of standards of exposure to chemicals hazardous to health). Appropriate safety and application equipment had been provided and used by the operators. All precautions attached to the products had been observed, applied and understood by the workers. Programme and training records had been verified to be satisfactory. The PMU has adequate facilities for mixing of pesticides and cleaning up after work. There are storage areas for PPE. Storage of pesticides found to be in accordance with the Occupational Safety and Health Laws and Regulations and local laws on pesticides control. Used chemical containers were disposed by DOE approved/registered hazardous waste contractor. Material Safety Data Sheets (MSDS) are available in the store. The MSDS are in English and Bahasa Malaysia (understood by the workers). First Aid Kit was issued to all Mandores and Supervisors as per requirements of the 4 th Schedule of the Regulations. Pesticides had been applied using the proven method (Best Management Practices) that minimize risk and impacts. The pesticide operators found to understand the use of the right nozzle, spray drift, spray quality and run-off. Programme and training records had been verified to be satisfactory....

25 Page 25 of Pesticides shall be applied aerially only where there is documented justification. Communities shall be informed of impending aerial pesticide applications with all relevant information within reasonable time prior to application Evidence of continual training to enhance knowledge and skills of employees and associated smallholders on pesticide handling shall be demonstrated or made available. (see Criterion 4.8) Proper disposal of waste material, according to procedures that are fully understood by workers and managers shall be demonstrated (see Criterion 5.3) Specific annual medical surveillance for pesticide operators, and documented action to treat related health conditions, shall be demonstrated. It s not the policy of the company to carry out aerial application of pesticides. This policy has been followed by the PMU. Periodic training on pesticide handling had been carried out for the workers. Information on the pesticides displayed on the notice board and next to the pesticides in the store. Scheduled waste had been disposed through a licensed contractor (Petrojadi Sdn Bhd) approved by DOE. Records of scheduled waste disposal verified to be in order. Annual medical surveillance for pesticide operators had been implemented as follows: - POM had sent 15 workers for medical surveillance during the month of Jan Sahabat 30 estate sent 8 workers. - Sahabat 41 estate sent 17 workers. - Sahabat 42 estate sent 9 workers. Next medical surveillance is due in Sep No work with pesticides shall be undertaken by pregnant or breastfeeding women. Medical surveillance reports of individual sprayers were available and details checked. The medical reports showed that there was no case of low blood cholinesterase levels. Any worker with such health condition and unfit for work with pesticides. No such cases in the PMU as at the date of assessment. Pesticides workers were interviewed during field visits and feedback received that they do not have any symptoms of toxic reactions such as skin disorders, rashes, mouth and throat pain, breathing difficulties or nail problems. Besides the annual medical surveillance, clinical records are also monitored. Interviews, field inspection and verified records confirmed that no pregnant or breast feeding women were working as pesticide operators. Criteria 4.7 An occupational health and safety plan is documented, effectively communicated and implemented.. The occupational health and safety plan shall cover the following: An occupational health and safety policy shall be in place. An occupational health and safety plan covering all activities shall be documented and Occupational Safety and Health (OSH) Plan in compliance with OSH Act and Factory Machinery Act had been documented and implemented. The Safety & Health Officer is in charge of safety and health planning, operation & coordination. Mill/Assistant Mill Managers and Estate Managers / Assistant Estate

26 Page 26 of 72 implemented, and its effectiveness monitored All operations where health and safety is an issue shall be risk assessed, and procedures and actions shall be documented and implemented to address the identified issues. All precautions attached to products shall be properly observed and applied to the workers 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 Managers are also directly involved. OSH Policy found to be clearly displayed at POM and in the estates office. Adequate posters, regulations, newsletters were prominently displayed on notice boards Interviewed workers demonstrated awareness towards occupational safety and health. Risk assessment had been carried out on all operations where health and safety is an issue. Significant hazards determined and documented include noise exposure, pesticides/chemicals exposure, accident, fire. Procedures and actions implemented to mitigate the hazards. There was an assessment of noise levels in the POM conducted by a consultant. The report identified the work areas with high noise levels, viz., boiler station, engine room and sterilization unit where noise level exceeded 85 db. Mill management have taken steps to reduce the noise levels by more frequent lubrication of machinery, reducing the exposure time to high noise and mandatory use of ear plugs and ear mufflers and ear plugs. Confirmed that annual audiometric test conducted for the listed mill workers. Records were maintained. The workers checked did not suffer significant hearing disabilities. Baseline audiogram and occupational and medical history records of workers maintained. The latest audiogram was carried out in Jun Monitoring carried out by the Safety & Health Officer for any significant hearing loss. The employees exposed to high noise levels were interviewed. The workers are aware of the danger of hearing loss due to prolonged exposure to high noise. The workers knew about the complaints process and mechanism available. Permit to work system applied at the POM. Staff and workers have been trained and certified by NIOSH for gas entrant and stand-by involving work in confined space. It was verified that the mill and estates have provided the appropriate PPE (safety boots, safety helmets, rubber boots, cartridge masks, safety goggles, gloves, ear plugs, ear mufflers) and the associated training to address safety and health issues. An audit for determining compliance with the minimum standards had been conducted on all types of PPE used. Adequate fire extinguishers and hose reels found to be located at strategic locations, operational and maintained in good conditions. Location map of fire extinguishers is available. First Aid equipment was available at POM, estates and at worksites. Sample of First Aid box was checked and contents found to be complete and in usable order during field visit. Training for workers in First Aid was carried out in the mill and estates and records maintained. The POM and estates have established their accident reporting KPI and incident monitoring implemented. Awareness and training programmes planned for year 2014 was consistently implemented. Evidence of training on safe working practices for workers exposed to machinery and high noise, working in confined space, involved in harvesting, pesticides spray and..

27 operations, such as pesticide application, machine operations, and land preparation, harvesting and, if it is used, burning. manuring. Training also provided on use of fire extinguishers and fire drill, awareness and understanding of MSDS/CSDS and first aid. Appropriate PPE had been provided to all workers at the place of work to cover all potentially hazardous operations. Evidence of training on safe working practices for workers involved in pesticides spray, use of fire extinguishers, awareness and understanding of MSDS/CSDS, Employees interviewed confirmed to be provided with safety training relating to their work at least once a year by the qualified Safety & Health Officer and training records are available. Evaluation carried out on each training programme to determine its effectiveness. The training content was revised periodically for improvement. Page 27 of The responsible person/persons shall be identified. There shall be records of regular meetings between the responsible person/s and workers. Concerns of all parties about health, safety and welfare shall be discussed at these meetings, and any issues raised shall be recorded Accident and emergency procedures shall exist and instructions shall be clearly understood by all workers. Accident procedures shall be available in the appropriate language of the workforce. Assigned operatives trained in First Aid should be present in both field and other operations, and first aid equipment shall be available at worksites. Records of all accidents shall be kept and periodically reviewed All workers shall be provided with medical care, and covered by accident insurance Occupational injuries shall be recorded using Lost Time Accident (LTA) metrics. The responsible person (usually the Mandore or Headman) had been identified. Records of regular meetings between the responsible person and workers to discuss about health and safety had been verified to be satisfactory. Accident and emergency procedures had been written and briefed to staff, workers, contractors and visitors. Workers trained in First Aid were present in the mill and field operations. First Aid Kits were available at most worksites. However, during the field assessment of spraying activity in Sahabat 30 estate, Block 24, it was found that the Mandore did not have the First Aid Kit for use in case of accidents or emergencies. A Minor Non-Conformance was raised. Records on all accidents had been verified to be maintained satisfactorily. Quarterly review on accident cases had been carried out during quarterly meeting of Environment, Safety & Health (ESH) In Sahabat 30, 41and 42 Estates, signboards to indicate to workers regarding safety and health measures to reduce undue risks in the fields were only displayed at the estate offices. There were no such signboards displayed at strategic locations in the fields. An observation was raised. Medical care had been provided to all the workers. Local workers are covered by SOCSO and foreign workers are covered by Foreign Workers Compensation Scheme with etiqa Takaful Insurance. Records on Lost Time Accident (LTA) metrics had been verified to be satisfactory.. Minor NC# NR-01 Obs # NR-01. Criteria 4.8 All staff, workers, smallholders and contract workers are appropriately trained.

28 4.8.1 A formal training programme shall be in place that covers all aspects of the RSPO Principles and Criteria, and that includes regular assessments of training needs and documentation of the programme Records of training for each employee shall be maintained. A formal training programme on all aspects of RSPO Principles and Criteria has been established and implemented. Training for various categories of operators, including all field and office staff, with regards to their duties and training needs had been reviewed and found acceptable. Records of training for each employee had been verified to be satisfactory. Page 28 of 72.. Principle 5: Environmental responsibility and conservation of natural resources and biodiversity Criteria 5.1 Aspects of plantation and mill management, including replanting, that have environmental impacts are identified, and plans to mitigate the negative impacts and promote the positive ones are made, implemented and monitored, to demonstrate continual improvement An environmental impact assessment (EIA) shall be documented. Environmental impact assessment was conducted and documented for the whole of Sahabat Group by the HQ. Approval from the Jabatan Perlindungan Alam Sekitar was issued on 19 th June 2012 vide reference no: JPAS/PP/11/600-1/11/1/115. In addition, Environmental Aspect and Impacts Assessment were also conducted for the POM and estates in the PMU and its action plan documented and implemented. The assessment documents had included the identification of aspects from field activities that includes fertilizing, spraying, transportation of FFB, garbage disposal and also road maintenance. The report had also included the action plans and recommendations to mitigate the negative effects and to promote the positive ones such as construction of sewage and landfills, together with other conservation activities applicable to the PMU. HCV Identification Survey conducted by consultancy company Aksenta (an RSPO approved HCV Assessor) and documented for the whole of Sahabat Group. Interim Report dated 27/03/2014. This HCV Assessment use the following three guidelines (HCV Toolkits): 1. The High Conservation Value Forest Toolkit, ProForest, 2003, 2. High Conservation Value Forest (HCVF) Toolkit for Malaysia: A national guide for identifying, managing and monitoring High Conservation Value Forest, WWF Malaysia, 2009, 3. Kit Panduan untuk Hutan yang Tinggi Nilai Pemuliharaannya (HCVF) bagi Malaysia: panduan kebangsaan bagi cara mengenal pasti, mengurus dan memantau Hutan Yang Tinggi Nilai Pemuliharaannya, WWF Malaysia, The HCV assessment process consists of the following six steps: - Preparation - Planning - HCV identification - HCV management

29 Page 29 of 72 - HCV monitoring - HCV reporting The results of observations and field data analysis indicated that in the Kembara Sakti PMU, only Sahabat 35 estate has HCV areas as follows: 1. HCV 1.2 (RTE species: waterbirds, beavers and crocodiles) 2. HCV 4.1 (pond in water catchment area of Sg. Ganduman) There is no HCV 2, HCV3, HCV 5 and HCV 6. Action Plan 2014/2015 documented for HCV area and biodiversity in Sahabat 35 estate with specific actions to be taken by the Estate Manager from Apr/Jun 2014 to Jan/Mar Where the identification of impacts requires changes in current practices, in order to mitigate negative effects, a timetable for change shall be developed and implemented within a comprehensive action plan. The action plan shall identify the responsible person/persons This plan shall incorporate a monitoring protocol, adaptive to operational changes, which shall be implemented to monitor the effectiveness of the mitigation measures. The plan shall be reviewed as a minimum every two years to reflect the results of monitoring and where there are operational changes that may have positive and negative environmental impacts. Criteria 5.2 There were no major changes to the identified impacts since the establishment of the documents above. Impacts such as smoke emissions, noise levels, POME and EFB management were verified at the Kembara Sakti POM. HCV and other environmentally sensitive areas were inspected on site and documented. The Management Plan for mitigation of environmental impacts, timeframe for action and responsible persons were not adequately followed up by the Estate Managers at the PMU. For instance at the Sahabat 41 estate, although the buffer zone signage was placed at the ponds, the extent of the boundary for the buffer is not clearly demarcated. It was also observed no clear demarcation of the buffer zone being done along the Sungai Ganduman in Sahabat 41. Again, this finding was also observed at the pond in Sahabat 30, where the pond served as water storage for household use. Signage on buffer and signage on the prohibited activities along all the buffer zones were found to be insufficiently placed for most of the estates visited (Sahabat 41, Sahabat 42 and Sahabat 30). A Minor Non-Conformance was raised. The monitoring of the documented environmental improvement plans is ongoing. Implementation and monitoring of the documented environmental improvement plans were reviewed on an annual basis scheduled at the 1 st quarter of the following year. The review had considered the mitigation of negative impacts and promotion of positive ones such as the proper demarcation of buffer zone, clearing of overgrown natural vegetation and debris along the streams At Sahabat 41 and 42 estates, there is a stream leading to the sea. Although steps have been taken in water management, it was found that there were plantation debris (fronds, wood waste, etc.) impeding the flow of water. The management, maintenance and monitoring of this waterway leading to the sea have to be effective to ensure the smooth flow of water. An observation was raised. Minor NC # SH-01 Obs # SH-01

30 Page 30 of 72 The status of rare, threatened or endangered species and other High Conservation Value habitats, if any, that exist in the plantation or that could be affected by plantation or mill management, shall be identified and operations managed to best ensure that they are maintained and/or enhanced Information shall be collated in a High Conservation Value (HCV) assessment that includes both the planted area itself and relevant wider landscape-level considerations (such as wildlife corridors) Where rare, threatened or endangered (RTE) species, or HCVs, are present or are affected by plantation or mill operations, appropriate measures that are expected to maintain and/or enhance them shall be implemented through an action plan There shall be a programme to regularly educate the workforce about the status of these RTE species, and appropriate disciplinary measures shall be instituted in accordance with company rules and national law if any individual working for the company is found to capture, harm, collect or kill these species Where an action plan has been created there shall be ongoing monitoring: The status of HCV and RTE species that are affected by plantation or mill operations shall be documented and reported; Outcomes of monitoring shall be fed back into the action plan. HCV assessment was conducted by a consultancy company, Aksenta, and documented in a report dated 27 Mar There was no HCV area identified at Sahabat 30, 41 and 42 estates. Only Sahabat 35 estate in the PMU with HCV areas as follows: 1. HCV 1.2 (RTE species: waterbirds, beavers and crocodiles) 2. HCV 4.1 (pond in water catchment area of Sg. Ganduman) The exercise has taken into consideration all aspects of environmentally sensitive areas such as ponds, streams, wildlife boundaries and was documented. Visits to site confirmed that the Sahabat 30, 41 and 42 estates are surrounded by palm oil estates. There are no neighbouring forest reserves to the PMU. Based on the review, there was no HCV area in these estates. Although no HCVs identified, conservation areas/environmentally sensitive areas i.e. buffer zones along the stretches of river tributaries which pass through the Sahabat 41 and 42 estates have been identified and being monitored. Stakeholders consultation included feedback on relevant HCV issues. Regular patrols within the PMU were being carried out and findings recorded by the respective Estate executives to monitor the conservation / buffer zone areas. The occasional sightings of various types of wildlife, especially crocodile, were found to have been recorded. Monitoring and control of any illegal hunting, fishing or collecting activities was also implemented. Large signage that prohibits hunting, fishing and water polluting activities were verified on-site at Sahabat 30, 41 and 42 estates and found to have been satisfactorily maintained. The program to regularly educate the workforce and community about the status of these RTE species are also established with ongoing consultation with the relevant authorities and stakeholders at the Kembara Sakti group. There is evidence of commitment to discourage any illegal or inappropriate hunting, fishing or collecting activities via the signage erected around the affected areas which prohibit such activities. Management plans were established and monitoring outcomes were reviewed by the Estate Managers. There are no HCV or reported RTE at the Sahabat 30, 41 and 42 estates, as reported in the Aksenta Report. Verification were also made during on-site assessment and found to be satisfactory. The overall management plan on the status of HCV/RTE of the Kembara Sakti plantation group is collated, reviewed

31 5.2.5 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. and monitored by the HQ sustainability team and is ongoing. It was verified that there has been no instance of HCV setaside that conflicts with the rights of local communities in this PMU. Thus negotiated agreement of such nature is not applicable. Page 31 of 72 Criteria 5.3 Waste is reduced, recycled, re-used and disposed of in an environmentally and socially responsible manner All waste products and sources of pollution shall be identified and documented All chemicals and their containers shall be disposed of responsibly A waste management and disposal plan to avoid or reduce pollution shall be documented and implemented. Visits made to POM and Sahabat 30, 41 and 42 estates showed that all waste products and sources of pollution were identified and documented. The identification and documentation of all the waste products such as scheduled waste, domestic waste, clinical waste, recyclable waste (metal, plastic, mill waste) and polluting materials (e.g. EFB, POME, stack emissions and boiler ashes) were maintained and monitored at the POM. Scheduled Waste identified included spent hydraulic oil (SW 305), spent lubricant oil (SW 306), used chemical containers/drums (SW 409), used filters (SW 410), clinical waste (SW 404) and used batteries (SW 102). Segregation of wastes, i.e. general wastes and scheduled wastes was verified to be satisfactory. Proper storage areas were identified for the storage of the recyclable wastes at the estates and mill. The disposal of used chemicals and containers were done in accordance with their schedule on waste management as planned. The mill and estates also have a proper Scheduled Waste Store for storing scheduled waste until time of disposal by DOE authorized waste disposal contractor (Petrojadi Sdn Bhd). The waste management and disposal plan were in place at both the POM and estates. It has been documented and implemented as required and is being carried out responsibly. Waste disposal was done by an appointed contractor that is licensed by the Department of Environment. The solid waste management and disposal plan using landfills was available at the mill and estates. Appropriate secondary containment for the diesel skid tanks, chemical and scheduled waste storage areas was verified to be maintained. Recycling of crop residues / biomass i.e. EFB and POME had been implemented. EFB application plans and progress reports were verified to be satisfactory. The designated landfill area at Sahabat 43, used for household waste and managed by FELDA Engineering Sdn Bhd, were verified to be at least more than 500 m away from any streams / water sources /residential area - thus minimizing the risk of contamination of

32 contamination of water sources. Recycling bins of three different colour codes for specific recycle waste were available in the POM and estates and were used for solid waste segregation and recycling. However, it was observed that the dumpsite at the POM was not properly managed and monitored. Organic and non organic waste, especially the metal and plastic waste, they were mixed together in a heap of rubbish. No segregation done to the different types of waste. A Minor Non-Conformance was raised. Criteria 5.4 Efficiency of fossil fuel use and the use of renewable energy is optimised. Page 32 of 72 Minor NC # SH A plan for improving efficiency of the use of fossil fuels and to optimise renewable energy shall be in place and monitored. Monthly records of energy consumption of nonrenewable and renewable fuel per metric tonne of palm product at the POM were available. It was monitored to optimise the use of renewable energy. Data is being compiled for comparison and control for future improvement. Electricity generation is through steam turbine and boiler where palm fiber and PK shells were used as renewable energy/fuel on a 70:30 ratio basis. At the estates, diesel consumption per metric ton FFB was also monitored on a monthly basis. It was verified that energy usage are being monitored at the PMU/POM for better control and comparison of trends. Criteria 5.5 Use of fire for preparing land or replanting is avoided, except in specific situations as identified in the ASEAN guidelines or other regional best practice There shall be no land preparation by burning, other than in specific situations as identified in the Guidelines for the Implementation of the ASEAN Policy on Zero Burning 2003, or comparable guidelines in other regions Where fire has been used for preparing land for replanting, there shall be evidence of prior approval of the controlled burning as specified in Guidelines for the Implementation of the ASEAN Policy on Zero Burning 2003, or comparable guidelines in other regions. The Group policy of Zero open burning is enforced since July Both the mill and estates have observed the policy of Zero open burning. Field inspections made at Sahabat 30, Sahabat 41 and Sahabat 42 showed no evidence of open burning. The PMU has adhered to the zero burning policy for replanting at the estates. During the audit, there were no replanting activities carried out in the Kembara Sakti plantation group. Also, there was no evidence of any burning of domestic waste at the housing line sites and at the sanitary landfills of the estates during on site field assessment. Sanitary landfill was located at Sahabat 43 estate. The area is located far away from the village and water sources. Criteria 5.6 Plans to reduce pollution and emissions, including greenhouse gases, are developed, implemented and monitored An assessment of all polluting activities shall be conducted, including The PMU had reviewed the environmental impact

33 Page 33 of 72 gaseous emissions, particulate/soot emissions and effluent (see Criterion 4.4) Significant pollutants and greenhouse gas (GHG) emissions shall be identified, and plans to reduce or minimise them implemented A monitoring system shall be in place, with regular reporting on progress for these significant pollutants and emissions from estate and mill operations, using appropriate tools. assessment on potential pollution to water, gaseous emissions to air and contamination on land. Monitoring of mill gas emissions is being done online using the Continuous Emissions Monitoring System (CEMS). Emission verified to be within the permissible limits of DOE during the on site visit to the POM. The Ringlemann Smoke Charts was still maintained as a backup for the CEMS monitoring by DOE. POME treatment, monitoring and land application is monitored, maintained and adhered to DOE regulations. Monitoring of noise levels carried out where noise levels at the boiler station and the sterilization unit were identified to be above 90dB. Ear mufflers have been issued and seen to be worn by workers at those locations. As identified in the HIRAC assessment, PPE use and audiometric examination are used as control measures to prevent hearing loss of mill workers. Identification of significant pollutants and greenhouse gas (GHG) emissions has been done. e.g. POME, diesel / fuel and fertilizer. Their usage have been recorded and documented at both the PMU. The PMU has just completed the data for GHG emissions. Plans to reduce or minimize GHG emissions are to be established and implemented. This will be followed up during the next surveillance Monitoring and reporting of the significant pollutants to water, gaseous emissions to air and contamination on land are in place. Tools and systems used include the DOE online CEMS monitoring for air emissions, water quality at discharge points as per DID regulations and Scheduled Waste disposal were adhering to DOE requirements Water samples were regularly taken every six months and tested by mill environment officer in charge and analyzed to ensure compliance to DOE requirements at final discharge points. The water samples were sent to Felda Analytical Laboratory for analysis. Records are maintained and verified on-site to have met the permissible regulatory limits. Monthly reporting to DOE was also done and record documented. New requirement of RSPO P&C (2013) - Follow up action at next ASA. Principle 6: Responsible consideration of employees and of individuals and communities affected by growers and millers Criteria 6.1 Aspects of plantation and mill management that have social impacts, including replanting, are identified in a participatory way, and plans to mitigate the negative impacts and promote the positive ones are made, implemented and monitored, to demonstrate continual improvement A social impact assessment (SIA) including records of meetings shall be documented. Information was obtained from various stakeholders through consultation meetings and through feedback form. The stakeholder lists had included contractors,

34 6.1.2 There shall be evidence that the assessment has been done with the participation of affected parties Plans for avoidance or mitigation of negative impacts and promotion of the positive ones, and monitoring of impacts identified, shall be developed in consultation with the affected parties, documented and timetabled, including responsibilities for implementation 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. villagers, workers, teachers, police, fire department and rural clinic personnel etc. The gathering of information was carried out over several days. Records such as attendance lists, Borang Soal Selidik, Borang Penilaian Impak Sosial, Stakeholder and management action plans. The information gathered from the stakeholders was analysed and summarized as management action plans. Participants included staff, suppliers, contractors. Lists of the participants at the assessments were maintained as records. The management action plans for avoidance or mitigation of negative impacts and promotion of the positive ones such as the continued monitoring of damaged roads and buildings, reducing the impact of external negative elements on the young and domestic vilolence programme were identified. However, no records of implementation and monitoring of the action plans were maintained e.g. for programme planned for domestic violence and other issues minuted in meeting held on 24/1/2014 (meeting 01/2014) had been implemented or communicated. A Major Non-Conformance was raised. The action plans had not been reviewed yet as the Management considered that the practices had just been newly implemented since March Page 34 of 72 Major NC # CBK Particular attention shall be paid to the impacts of smallholder schemes (where the plantation includes such a scheme). It was verified that there was no smallholder scheme. Criteria 6.2 There are open and transparent methods for communication and consultation between growers and/or millers, local communities and other affected or interested parties Consultation and communication procedures shall be documented A management official responsible for these issues shall be nominated A list of stakeholders, records of all communication, including Polisi Komunikasi Dengan Stakeholder Peringkat Projek ML-1A/L2-P06(0) and Prosedur Komunikasi, Penglibatan Dan Rundingan ML-1A/L2-PR3(0) were documented policies and were available for implementation. Appointment records sighted show evidence the existence of a management official for these issues. Interviews with mill and estate managers verified the understanding of their roles and responsibilities. The nominated persons were mainly from appropriate level and were responsible for communication with the stakeholders. The organization has a list of stakeholders including local authorities, government departments, suppliers and contractors. Lists of stakeholders were sighted to have been

35 Page 35 of 72 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. maintained in each of the mill and the estates. Noted that there are open and transparent methods for communication and consultation which has taken into consideration the local conditions including migrant workers and job opportunities for local people. Verified that consultations with various stakeholders had been held and recorded in the minutes of meeting that include actions taken in response to input from stakeholders. Criteria 6.3 There is a mutually agreed and documented system for dealing with complaints and grievances, which is implemented and accepted by all affected parties The system, open to all affected parties, shall resolve disputes in an effective, timely and appropriate manner, ensuring anonymity of complainants and whistleblowers, where requested Documentation of both the process by which a dispute was resolved and the outcome shall be available. The PMU has an established and documented system for dealing with complaints and grievances and it was well implemented. Policy such as Polisi Pemberian Maklumat (Whistle Blowing) ML-1A/L2-P012(0) established 1/8/2008 and the procedure Prosedur Menangani Aduan Dan Rungutan were disseminated to the mill and estates. Record books such as Buku Rekod Aduan were available for complaints to be recorded. Subsequent actions taken and results of resolutions were recorded. It was noted that most of the complaints were resolved in a timely manner. Respect of anonymity and protection of complainants is provided through Polisi Pemberian Maklumat (Whistle lowing) Policy Ref:ML-1A/L2-P012(0) dated 1 st August Interviews with staff and workers and their representatives revealed knowledge and understanding of the complaints, dispute and resolution mechanism. The mechanism provides for open and consensual agreements with relevant affected parties. Complaints and grievances are handled by respective Estate Managers. The record books (Rekod Buku Aduan) were used to forward any complaint or make a request for maintenance. Mechanisms are appropriately established and implemented. Records of meeting and any resolutions or outcomes are maintained through in the Rekod Buku Aduan). Criteria 6.4 Any negotiations concerning compensation for loss of legal, customary or user rights are dealt with through a documented system that enables indigenous peoples, local communities and other stakeholders to express their views through their own representative institutions A procedure for identifying legal, customary or user rights, and a procedure for identifying people entitled to compensation, shall be in place. The PMU had documented the procedures Prosedur Mengenalpasti Hak Perundangan Dan Adat ML-1A/L2- PR12(0) and Prosedur Penghitungan Dan Pengagihan Pampasan ML-1A/L2-PR13(0) for identifying legal and customary rights and for identifying people entitled to compensation. There was no case requiring any negotiation or compensation to lands that were adjacent to any villages or native land in the PMU. There have been no changes in this status as at the

36 6.4.2 A procedure for calculating and distributing fair compensation (monetary or otherwise) shall be established and implemented, monitored and evaluated in a participatory way, and corrective actions taken as a result of this evaluation. This procedure shall take into account: gender differences in the power to claim rights, ownership and access to land; differences of transmigrants and long-established communities; and differences in ethnic groups proof of legal versus communal ownership of land. period of verification on site. The procedure (Prosedur Penghituangan Dan Pengagihan Pampasan) for calculating and distributing compensation. To date, there has been no dispute by any parties relating to legal, customary or user rights at the PMU. Page 36 of The process and outcome of any negotiated agreements and compensation claims shall be documented, with evidence of the participation of affected parties, and made publicly available. So far, there has been no dispute by any parties relating to legal, customary or user rights at the PMU. Therefore the process and outcome of compensation could not be observed. Criteria 6.5 Pay and conditions for employees and for contract workers always meet at least legal or industry minimum standards and are sufficient to provide decent living wages Documentation of pay and conditions shall be available Labour laws, union agreements or direct contracts of employment Labour policy is documented and publicly available. Labour policy addresses migrant workers who mostly come from Indonesia. Employment conditions meet legal requirement. Employment agreements, stating all statutory fringe benefits and eligible incentives are available. Stated conditions in the employment agreement includes working hours, overtime, leave and medical benefits, maternity leave for women, insurance coverage, deductions, resignation notice period, company rules, etc., which are in compliance with applicable legal requirements. The payment slip was easy to understand. Foreign workers are legally employed and work permits were available and verified to be satisfactory. The PMU has implemented the Minimum Wage Order 2012, for all its employees. Offer letter, employment agreements with applicable terms and conditions and accompanying appendices conditions are documented in Bahasa Malaysia and have been explained to and understood by the employees. The PMU also provides free housing and piped water supply, free electricity, medical benefits, mosques, church and welfare amenities that in overall constitutes a decent living for the employees. The documented pay and conditions are verified to be satisfactorily implemented according to the employment contract Documented employment contract verified for migrant workers had covered all issue such as working hours,

37 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. deductions, overtime, sickness, holiday entitlement, maternity leave, and reasons for dismissal, period of notice made available in Bahasa Malaysia which is understood by the workers (local and foreign workers) Page 37 of Growers and millers shall provide adequate housing, water supplies, medical, educational and welfare amenities to national standards or above, in accordance with Workers Minimum Standard of Housing and Amenities Act 1990 (Act 446) or above, where no such public facilities are available or accessible (not applicable to smallholders) Growers and millers shall make demonstrable efforts to monitor and where able, improve workers access to adequate, sufficient and affordable food. The estate management was noted to have complied with Workers Minimum Standard of Housing and Amenities Act 1990 (Act 446). Site visits to workers homes and interviews with their dependents revealed their general satisfaction with their housing conditions and amenities. Housing, electricity and water supply Workers are given a small patch of land to grow vegetables/fruit trees and keep poultry around their houses in order to reduce the cost of living. The workers staying in the estate are provided with free electricity supply from 4.30 am to 6.00 am and from 6.30 pm to 10.00pm. Executives and above are supplied with 24 hour electricity supply. Sufficient clean treated water was supplied to the workers quarters on rotation basis. Weekly line-site inspections are also carried out, i.e. first inspection covers the whole workers quarters. In all the estates, rubbish collection is scheduled at least twice a week. Schools Local children attended schools around the estates. The migrant workers children had received free education in schools managed by Indonesian officials in the PMU.. It was verified that new blocks of school building were in the final stage of construction. These school going children was provided free transportation to attend schools Sundry shops The availability of sundry shops within the estates which helped the staff and workers get their sundries nearby. From interviews with the workers in PMU it was found that most household sundries fresh food such as fish, chicken, vegetables and meat, including frozen foodstuffs were available on sale. Medical clinics There was a rural health clinic in the vicinity of the estate housing areas especially for mothers and infants. This rural clinic was manned by two nurses. For medical attentions, there is a panel of four medical clinics for the workers and staff. Food for the workers provided through sundry shops in each of the PMU estates verified to be adequate and affordable.

38 Page 38 of 72 Criteria 6.6 The employer respects the rights of all personnel to form and join trade unions of their choice and to bargain collectively. Where the right to freedom of association and collective bargaining are restricted under law, the employer facilitates parallel means of independent and free association and bargaining for all such personnel A published statement in local languages recognising freedom of association shall be available Minutes of meetings with main trade unions or workers representatives shall be documented. Criteria 6.7 Children are not employed or exploited. The published Polisi Hak Kebebasan Bersuara & menganggotai Kesatuan which recognizes the employee s freedom of association, was found to be available and widely displayed in all notice boards of the mill and the estates. Kesatuan Pekerja-Pekerja was the platform through which the members negotiate collectively with the management of FGV. The estate management had formed the JCC Jawatankuasa Kebajikan Pengurusan Tenaga Kerja as a mechanism to cater to the collective bargaining and needs of the workers. The JCC meetings are held every 3 months. Records of meetings were documented, kept and available There shall be documentary evidence that minimum age requirements are met. The PMU has a policy of not employing child labor i.e. persons below 18 years old in accordance with Employment Act 265 as evidenced in Polisi Pekerjaan Kanak-kanak dated 01Jun This policy was displayed at strategic public places. The birth date in the Identification card and birth certificate of a new employee was used as the verification for age. The date of birth stated in the Passports was used as indication of the age for Indonesian workers. The implementation was verified through checks on the name lists maintained by the management. Interviews with workers in the estates and at the Mill confirmed implementation of the stated policy and the relevant procedure Prosedur Mengelak Pengambilan Pekerja Kanak Kanak. It was verified during field visit that school-going children were not allowed to assist family members in plantation work. Criteria 6.8 Any form of discrimination based on race, caste, national origin, religion, disability, gender, sexual orientation, union membership, political affiliation, or age, is prohibited A publicly available equal opportunities policy including identification of relevant/affected groups in the local environment shall be documented Evidence shall be provided that employees and groups including local communities, women, and migrant workers have not been discriminated The PMU has a publicly displayed documented policy on equal opportunities Polisi Kesetaraan Peluang. The policy stressed on non-discrimination based on race, caste, nationality, religion, gender, sexual orientation, disability/handicap, and union/political affiliations. However, positive discrimination for the benefit of certain society groups may be allowed after consultation. The documented policy on foreign workers Polisi Pengambilan Pekerja Asing was publicly displayed along with other policies at strategic places.

39 Page 39 of 72 against It shall be demonstrated that recruitment selection, hiring and promotion where relevant are based on skills, capabilities, qualities, and medical fitness necessary for the jobs available. Compliance to relevant regulatory requirements such as Employment Act 1955, immigration Act 1959/63 and Workmen s Compensation Act 1952 were observed when recruiting workers from Indonesia. The employment of foreign workers was implemented without affecting the opportunities for local communities. Local workers are covered under SOCSO scheme and the migrant workers are covered under Foreign Workers Compensation scheme (FWCS). Interviews with migrant workers dependents revealed their satisfaction with the PMU for job opportunities and they enjoy all common welfare amenities like free housing, free water and electricity supplies, medical care, and transportation of school children. They were aware of the aduan mechanism by which they could make any complaint or request to the management. Depending on the nature of work positions, The management took into considerations the needs for technical qualifications/experience and related skills in recruitment selection, hiring and promotion exercises. It was verified that the recruitments at the estates were based on evaluations which considered the skill, capabilities, qualities and medical fitness of the employees. A verification of job advertisement and related records demonstrated that the recent employments of a Mandur Ladang at Sahabat 41 and Pembantu Am Pejabat at Sahabat 42 were carried out in a non-discriminative manner. The necessary qualifications and conditions were clearly stated in the job advertisement. Terms and conditions of work were spelled out in the offer letter as well. Criteria 6.9 There is no harassment or abuse in the work place, and reproductive rights are protected A policy to prevent sexual and all other forms of harassment and violence shall be implemented and communicated to all levels of the workforce. A documented policy Polisi Gangguan Seksual, Keganasan Serta Hak Kebebasan Reproduksi to prevent sexual harassment and violence was available and publicly displayed. The mechanism on lodging complaints of sexual nature was documented as the Mekanisma Aduan/Jawatankuasa Wanita and Prosedur Menangani Aduan Oleh Gender Committee. Gender committee was established to manage issues among them, sexual harassment, reproductive rights, general health. Some of these issues had been communicated to the workers. Gender Committee meetings were held and recorded in the minutes that were maintained. Items that were raised included sexual harassment, reproductive rights, health campaign, sport and recreation. However, for Sahabat 30 and Sahabat S41, there was no evidence that programme planned for domestic violence and other issues minuted in meeting held on 24/1/2014 (meeting 01/2014) had been implemented or communicated. Hence, a Major Non- Conformance was raised. Major NC # CBK-02

40 6.9.2 A policy to protect the reproductive rights of all, especially of women, shall be implemented and communicated to all levels of the workforce A specific grievance mechanism which respects anonymity and protects complainants where requested shall be established, implemented, and communicated to all levels of the workforce. The PMU s commitment to protect the reproductive rights and rights to have a family of the workers especially women is evidently stated in the policy to prevent sexual harassment and violence Polisi Gangguan Seksual, Keganasan Serta Hak Kebebasan Reproduksi. Local female staff is fully aware that they are entitled for two months paid maternity leave. Records evidenced that every women field worker who is handling agrochemicals is issued a reminder letter informing them of their responsibility to communicate with the management as soon as pregnancy is confirmed or breastfeeding is planned. The reminder letter states that alternative job that does not require agrochemical handling will be offered. It was verified that there is no pregnant or breastfeeding woman worker among all the women agrochemical handlers. Complaint and grievance procedures such as Mekanisma Aduan/Jawatankuasa Wanita, Section 22 Kod Etika Dan Tatalaku Petugas, Polisi Pemberian Maklumat (Whistle Blowing) ML-1A/L2-P012(0) established 1/8/2008 and the procedure Prosedur Menangani Aduan Dan Rungutan were available to manage grievances and complaints from internal and external stakeholders. Onsite audits verified that the complaint and grievance procedure and whistle blowing procedure are displayed outside staff offices and labour quarters. It was verified that there had been no report of sexual harassment in the PMU so far. Criteria 6.10 Growers and millers deal fairly and transparently with smallholders and other local businesses. Page 40 of Current and past prices paid for Fresh Fruit Bunches (FFB) shall be publicly available Evidence shall be available that growers/millers have explained FFB pricing, and pricing mechanisms for FFB and inputs/services shall be documented (where these are under the control of the mill or plantation) Evidence shall be available that all parties understand the contractual agreements they enter into, and that contracts are fair, legal and transparent Agreed payments shall be made in a timely manner. Criteria 6.11 Onsite audit verified that the current and past prices paid for FFB pricing were displayed at the Mill and Estate offices. FFB prices were made available via POM office s external Notice Board and mill office records. The local business fairly. Pricing mechanism for FFB is fair and transparent and was set based on 21% OER and FFB grading as per MPOB approved / licensed graders and based MPOB specification. Current and past prices paid for FFB were publicly available and verified through interviews. Mechanisms are available to the public upon request. It was verified with a foreign workers that understanding of the contractual agreements (such as terms and payment) they enter into with the PMU was satisfactory. They also considered the business transactions as fair and transparent. Agreed payments are made on the first day of the following month. Through interviews made, there is no evidence to suggest of any unfair business practices with the local businesses.

41 Growers and millers contribute to local sustainable development where appropriate. Page 41 of Contributions to local development that are based on the results of consultation with local communities shall be demonstrated Where there are scheme smallholders, there shall be evidence that efforts and/or resources have been allocated to improve smallholder productivity. Criteria 6.12 No forms of forced or trafficked labour are used. The PMU s contribution towards local communities had been evidenced in several social areas and verified during on site visit as follows: Provide free water and electricity supplies to all kindergartens and schools in the estates Provide maintenance of public buildings whenever requested. Provided land for the building of government primary and secondary schools as well as the school run by the Indonesian educational authority. It was verified that there were no smallholder scheme programs at the estates. Not Applicable There shall be evidence that no forms of forced or trafficked labour are used Where applicable, it shall be demonstrated that no contract substitution has occurred Where temporary or foreign workers are employed, a special labour policy and procedures shall be established and implemented. Criteria 6.13 Growers and millers respect human rights. It was verified from employment records such as work permits in an estate office that all migrant workers were recruited through legal means and according to the regulatory requirements. It was verified that through interview with migrant workers and their dependents in the housing are confirmed that there were no forced or trafficked labors. There was no evidence of contract substitution and this was confirmed from interviews with workers. The special policy on recruitment of foreign workers Polisi Pengambilan Pekerja Asing and equal opportunities Polisi Kesetaraan Peluang are established and the implementations are verified to be satisfactory. Review on employment contracts of foreign workers also confirmed that the policies, including minimum wages have also been duly implemented A policy to respect human rights shall be documented and communicated to all levels of the workforce and operations (see Criteria 1.2 and 2.1). The central management had established Human Rights Policy Polisi Hak Asasi Manusia on 1 st June 2014 but this had only been disseminated to the mill and the estates in 20 th August The mill and estate managements were preparing communication of the policy to all levels of the workforce and operations New requirement of RSPO P&C (2013) - Follow up action at next ASA. Principle 7: Responsible development of new plantings KKS Kembara Sakti PMU has documented procedures for this development but to date has not carried any new plantings after Nov Therefore, the requirements of Principle 7 are not applicable during this assessment.

42 Page 42 of 72 Principle 8: Commitment to continuous improvement in key areas of activity Criterion 8.1 Growers and millers regularly monitor and review their activities, and develop and implement action plans that allow demonstrable continual improvement in key operations The action plan for continual improvement shall be implemented, based on a consideration of the main social and environmental impacts and opportunities of the grower/mill, and shall include a range of Indicators covered by these Principles and Criteria. Major / Minor -TBF As a minimum, these shall include, but are not necessarily be limited to: Reduction in use of pesticides(criterion 4.6); Environmental impacts (Criteria 4.3, 5.1 and 5.2); Waste reduction (Criterion 5.3); Pollution and greenhouse gas (GHG) emissions (Criteria 5.6 and 7.8); Social impacts (Criterion 6.1); Optimising the yield of the supply base. The POM has identified and implemented the following Continual Improvement Action Plans for the period 2013 to 2016 as required: 1. Bio-polishing Plant for reduction of BOD (achieved control of BOD level < 20 ppm for water at the final discharge point of the palm oil mill effluent pond). 2. Scheduled waste disposal by a licensed contractor. 3. Recycling and reduction of waste (recycle scrap iron, palm fiber and shell as renewable fuel, shredded EFB to power plant). 4. Control and prevention of pollution with the installation of Continuous Emission Monitoring System (CEMS) for stack emission. 5. To achieve OER > 21.30% and KER > 5.05%, 6. To achieve zero accident at the mill. 7. Repair and repainting of workers houses/ quarters and playgrounds. 8. Free tuition class for employees school children. Evidence of results was available for the above continuous improvement action plans. The Sahabat 41, 42 and 30 estates have identified and implemented the following Continual Improvement Action Plans for the period 2013 to 2015 as required: 1. Reduce the consumption of pesticides by combining the operation with manual weeding of unwanted growth. 2. Planting of more cover crops along steep slopes and streams. 3. Increase the acreage for beneficial plants (tumera subulata, cassia cobanensis, antigonon leptopus), 4. Increased recycling (scrap iron, paper, plastic). Fertilizer bags are to be recycled and empty pesticide containers to be returned to supplier. 5. Build volleyball, futsal and badminton courts for employees. 6. Repair and repainting of workers houses/ quarters. 7. Free tuition class for employees school children. 8. Religious seminars at villages, 9. Reduce the delivery time of FFB to POM. 10. Increase FFB quality and yield. However, there was no adequate evidence of results ( bukti pelaksanaan ) on the action plans items. A Major Non-Conformance was raised. Major NC# OCL-01

43 3.1.1 Supply Chain Certification Standards Findings - on CPO Mill Page 43 of 72 The Supply Chain model applied at KKS Kembara Sakti POM during this Main Assessment is Module E CPO Mills: Mass Balance (MB). Details of findings are as follows: E.1 Documented procedures E.1.1 The facility shall have written procedures and/or work instructions to ensure the implementation of all the elements specified in these requirements. This shall include at minimum the following: a) Complete and up to date procedures covering the implementation of all the elements in these requirements A documented Supply Chain Procedure Doc No. FGVPM-RSPO SCCS Issue 1.0 Rev 2.0 (Effective 1 Dec 2012) SOP for Mill RSPO Supply Chain Certification System has been established and implemented using the Mass Balance (MB) module. The SOP addressed the following requirements: Purchase, delivery, receipt, storage and processing of FFB from own PMU estates and other FFB suppliers (Outside Crop Producers), Production and storage of CPO, production data and capacity, Sales and dispatch of CPO, Document control, Record control with retention period of 10 years. Implementation complied with all the requirements. b) The name of the person having overall responsibility for and authority over the implementation of these requirements and compliance with all applicable requirements. This person shall be able to demonstrate awareness of the facilities procedures for the implementation of this standard. E.1.2 The facility shall have documented procedures for receiving and processing certified and non-certified FFBs. The Mill Manager, Encik Hisyamudin bin Mursalim has been appointed as the person responsible and with authority to implement RSPO Supply Chain requirements at the POM. He is assisted by the Assistant Mill Manager, Encik Razally bin Muhayan, who has the knowledge of the Supply Chain System. Organization Chart and job descriptions have been documented. The SOP covers the receiving of certifiable FFB supply from the 6 estates of this PMU and other certified PMUs of FGVPM. There is also non-certifiable FFB from FGVPM PMUs that are still under certification. There are no FFB from Outside Crop Producers. All supplies of FFB were subjected to verification of documents (delivery note) that indicates the origin of the fruit source and quantity check by weighbridge personnel and FFB quality check by the laboratory personnel. E.2 Purchasing and goods in E.2.1 The facility shall verify and document the volumes of certified and non-certified FFBs received. The weighbridge personnel verified the delivery note concerning the supply source of FFB received and records this information and the as weighed tonnages in the weighbridge ticket. All relevant FFB data are entered into the PGVPM computer system and/or daily reporting spreadsheet. Daily data may be extracted from the computer system. Weekly and monthly reports are submitted to the Sabah Zone Office and Kuala Lumpur Head Office through the Mill Performance Report (MPR) system. Production

44 E.2.2 The facility shall inform the CB immediately if there is a projected overproduction. E.3 Record keeping Report for Jan Dec 2013 is verified to be Mass Balance CPO. Satisfactory performance of deliveries of FFB made by transport contractors hired by the estates. The POM has an internal monitoring and reporting mechanism for informing the CB of significant production variations. So far, there is no projected overproduction. Page 44 of 72 E.3.1 The facility shall maintain accurate, complete, up-to-date and accessible records and reports covering all aspects of these requirements. E.3.2 Retention times for all records and reports shall be at least five (5) years. E.3.3 The facility shall record and balance all receipts of RSPO certified FFB and deliveries of RSPO certified CPO, PKO and palm kernel meal on a threemonthly basis. Records and reports necessary for all aspects of the requirements were verified and confirmed to be available. The records and reports were updated daily/ regularly, properly filed and readily retrievable. The SOP specified that all records and reports shall be kept for a minimum of 10 years. The archived records and reports are retrievable. There are four CPO storage tanks, each with a 1800 MT capacity, at the POM designated for the storage of Mass Balance (MB) CPO. All receipts of certifiable FFB, FFB processed, CPO production, PK production and balance stocks were recorded by the Mill. Transaction documents and bookkeeping are available for CPO and PK. Monthly summary report of above information submitted to the Sabah Zone Office and Kuala Lumpur Head Office. There is no Palm Kernel mill for production of PKO at the POM. PK sold and delivered to the Kernel Crushing Plant (a Felda subsdiary company) at Wilayah Sahabat. The two weighbridges at the Mill are duly calibrated and calibration certificates found to be in order. E.3.4 The following trade names should be used and specified in relevant documents, e.g. purchase and sales contracts, e.g. *product name*/sg or Segregated. The supply chain model used should be clearly indicated. E.3.5 In cases where a mill outsources activities to an independent palm kernel crush, the crush still falls under the responsibility of the mill and does not need to be separately certified. The mill has to ensure that the crush is covered through a signed and enforceable agreement. All deliveries of the MB sales of CPO are from positive stock. The SOP stated an appropriate stamp for the identification of RSPO certified CPO and PK on relevant documents (sales contract, invoice, delivery note). Documents to be stamped RSPO CPO or PK Mass Balance appropriately for CPO and PK products. Traceability verified from sampled records (FFB Delivery Note, Weighbridge Ticket, FFB & Truck Daily Summary, Production Report, CPO Storage Report and CPO Delivery Note or Shipping Instruction) for the period Jan 2013 to Jul There is no outsourced activity at this POM.

45 Page 45 of 72 E.4 Sales and good out E.4.1 The facility shall ensure that all sales invoices issued for RSPO certified products delivered include the following information: a) The name and address of the buyer; b) The date on which the invoice was issued; c) A description of the product, including the applicable supply chain model (Segregated); d) The quantity of the products delivered; e) Reference to related transport documentation. E.5 Training So far, the CPO is sold only to a Felda subsidiary company, Sahabat Oil Products Sdn. Bhd. at Wilayah Sahabat. Items (a) to (e) were included in the company s invoices, delivery note and other relevant documents to the CPO buyer as stipulated in the SOP for RSPO/MB module. Deliveries of CPO and PK made with Delivery Note or Shipping Instruction. Data entry into computer system or reporting spreadsheet. Delivery of CPO and PK checked to ensure that the authorized quantities are not exceeded. CPO and PK deliveries are made by contractor, Felda Transport Services. E.5.1 The facility shall provide the training for all staff as required to implement the requirements of the Supply Chain Certification Systems. E.6 Claims The requirements of the Mass Balance Module have essentially been documented and implemented as evidenced from the documentation and records at the Palm Oil Mill. However, during interviews of mill personnel, it was found that there is a lack of good understanding of details of the supply chain due to insufficient training provided to the mill personnel. An observation was raised. OBS # OCL-01 E.6.1 The facility shall only make claims regarding the use of or support of RSPO certified palm oil that are in compliance with the RSPO Rules for Communication and Claims. The SOP stated that the PMU will only make claims on certified CPO and PK from certified FFB using MB model according to "RSPO Rules on Market Communications and Claims" and "RSPO Trademark usage and Guidelines". So far, no claims made by the PMU Status on Supply Chain on POM: Based on the documents and records presented during the on-site verifications made, it is concluded that the FGV Plantations Kembara Sakti POM has been able to comply with the requirements of the RSPO SCCS under the MB module and is thus eligible for MB trading for its palm products for year 2014/ Status on Trading of Certified Palm Products by PMU: The PMU and POM has not commenced the trading of any of its certifiable palm products under the MB module.

46 Page 46 of Status of Identified Noncompliance and Corrective Actions, Observations and Positive Elements. The status of the Noncompliances (NCR) and Observations (OBS) identified against the MYNI Compliance Indicators is as per the details below: Assessment Type Year Noncompliance (NCR) Observations (OBS) Main Assessment (4 Major & 3 Minor) Year 2014: Main Assessment (4 MAJOR NCRs) NCR # MAJOR OCL-01 MYNI Indicator Date issued: 29 Aug 2014 Details of NCR Nonconformance: The Sahabat 41 Estate, Sahabat 42 and Sahabat 30 Estate have identified and implemented Continual Improvement Action Plans for the period 2013 to 2015 as required. However, there was no adequate evidence of results ( bukti pelaksanaan ) on the action plans items. Root Cause and Corrective Action: Continual Improvement Action Program on social and environment issues were not recorded and also without enforcement on these matters. The estate management has conducted a check on the records of continual improvement and evaluated its progress. This shall be done on a monthly basis. Verification for closure: Records, reports and other documents submitted were verified and found to be adequate evidence of the results of Continual Improvement Action Plans. NC status verified by auditor: Closed by OCL Date closed: 25 Oct 2014 Verification (for effectiveness): NCR # MAJOR NR-01 MYNI Indicator Date issued: 29 Aug 2014 Details of NCR Nonconformance: In Sahabat 30, 41 and 42 Estates, beneficial plants have been grown. However, it was found that there was no programme or proper mapping and planning records available for future establishment. Root Cause and Corrective Action: Programme was planned during budget preparation for this activity but the planting schedule and planned areas were not formally recorded. The programme and location maps of beneficial plants were submitted. The estate management will ensure that the programme and locations mapping for the planting of beneficial plants will be made and recorded during the yearly budget preparation. Verification for closure: Records and other documents submitted were verified and found to be adequate evidence of the satisfactory actions taken to address the nonconformance. NC status verified by auditor: Closed by OCL Date closed: 25 Oct 2014 Verification (for effectiveness):

47 Page 47 of 72 NCR # MAJOR CBK-01 MYNI Indicator Date issued: 29 Aug 2014 Details of NCR Nonconformance: The social impact assessments that were conducted by the management of Sahabat 30 and Sahabat 41 had identified areas where negative impacts are to be avoided or mitigated and positive ones are promoted. This had resulted in Action Plans being established. However, there was no evidence that these identified impacts had been monitored. Root Cause and Corrective Action: No officer was appointed for recording the implementation of the action plans carried out. Meetings were conducted with staff, contractors and other interested parties for discussion on the action plans for the SIA. Minutes of meeting recorded. The Assistant Estate Managers have been appointed to be responsible for recording and reporting the implementation of the action plans. The progress of the implementation of the action plans were monitored at the monthly staff meeting. Verification for closure: The following documents submitted were verified and found to be adequate evidence of the satisfactory actions taken to address the nonconformance 1. Letter of appointments; 2. Minutes of meetings with staff, contractors and other interested parties. 3. Records of implementation and monitoring of the action plans. NC status verified by auditor: Closed by OCL Date closed: 25 Oct 2014 Verification (for effectiveness): NCR # MAJOR CBK-02 MYNI Indicator Date issued: 29 Aug 2014 Details of NCR Nonconformance: The Gender Committee was formed to implement the policy to prevent sexual and other forms of harassment and violence. The committee consisted of members from the Sahabat 30, 41 and 42 estates. The committee at the meeting (01/2014) conducted on 24 Jan 2014 had decided that a programme will be established for preventing domestic violence. However, there was no evidence to show that the programme intended to prevent domestic violence had been established for implementation in Sahabat 30 and 41 estates. Root Cause and Corrective Action: There was no enforcement from management because the management was not involved in the Gender Committee. Actions taken on the following: 1. Appointment of the chairman of the JCC of Kembara Sakti Complex as the patron of the Gender Committee. 2. Establishment of the Counseling Unit. 3. Appointment of head and Assistant Heads of the Counseling Unit. 4. Implementation of the programme for prevention of domestic violence. Participation for all female employees, wives of employees in the programme. 5. Report on the programme documented, list of attendees and photos kept as evidence of the implementation of the programme.

48 Page 48 of 72 Verification for closure: The various documents submitted were verified and found to be adequate evidence of the satisfactory actions taken to address the nonconformance. NC status verified by auditor: Closed by OCL Date closed: 25 Oct 2014 Verification (for effectiveness): Year 2014: Main Assessment (3 Minor NCRs) NCR # Minor NR-01 MYNI Indicator Date issued: 29 Aug 2014 Details of NCR Nonconformance: During the field assessment, spraying activity was in progress in Sahabat 30 Estate Block 24. It was found that the mandore did not have the first aid kit for use in case of accidents or emergencies. Root Cause and Corrective Action: There was no enforcement from the management in the estates. First Aid Kits were made available to all mandore and directive issued to all mandore that they must bring the First Aid Kit to the fields. The FGVPM Safety Officer has been appointed as the officer to conduct spot check and monitoring for adherence. Records of receipt of First Aid Kit and scheduled checks and monitoring on the content of the First Aid Kits. Verification for closure: The evidence of actions taken and supporting documents submitted were verified to satisfactorily addressed the nonconformance. NC status verified by auditor: Closed by OCL Date closed: 25 Oct 2014 Verification (for effectiveness): NCR # Minor SH-01 MYNI Indicator Date issued: 29 Aug 2014 Details of NCR Nonconformance: The Management Plan for mitigation of environmental impacts, timeframe for action and responsible persons were not adequately followed up by the Estate Managers at the PMU. For instance at the Sahabat 41 estate, although the buffer zone signage was placed at the ponds, the extent of the boundary for the buffer is not clearly demarcated. It was also observed no clear demarcation of the buffer zone being done along the Sungai Ganduman in Sahabat 41. Again, this finding was also observed at the pond in Sahabat 30, where the pond served as water storage for household use. Signage on buffer and signage on the prohibited activities along all the buffer zones were found to be insufficiently placed for most of the estates visited (Sahabat 41, Sahabat 42 and Sahabat 30).

49 Page 49 of 72 Root Cause and Corrective Action: The budget allocation for RSPO activities in the Kembara Sakti Complex was recently approved. The signages for buffer zones were in the process of preparation and at the time of the assessment, the signages for the buffer zones were not fully completed. The estates management shall ensure the erection of sufficient signages. All staff and contractors shall be briefed and have an understanding of the signages and the buffer zone demarcation. The estates management shall maintain the signages and the buffer zone demarcation in proper condition once every 2 months. A directive shall be issued to all staff and workers that there shall be no spraying of pesticides and manuring within the buffer zone area. Verification for closure: Corrective action plan accepted. Verification for closure of Minor NCR at next Surveillance Assessment. NC status verified by auditor: Date closed: Verification (for effectiveness): NCR # Minor SH-02 MYNI Indicator Date issued: 29 Aug 2014 Nonconformance: Details of NCR At the POM, it was discovered that the waste materials at the dumpsite/landfill was not properly segregated between the organic and inorganic waste. The waste materials, be it metals, rubber and plastics, were all lumped together at the dumpsite. No signboard was placed to indicate the location of the dumpsite. It was also observed signboards to indicate the prohibited activities around the treatment ponds were insufficiently placed. Root Cause and Corrective Action: Lack of awareness on segregation of wastes and recycling. The mill management shall issue an official directive through letter/memo concerning segregation of domestic wastes and the use of recycling bins. The mill management shall also take the following actions: 1. Erecting a signage for the landfill. The signage shall indicate the categories of wastes that may be disposed and those which cannot be disposed in the landfill. 2. Ensure the availability of recycling bins and issue a directive to use these bins. 3. Erection of a signage indicating prohibited activities around the treatment ponds. Verification for closure: Corrective action plan accepted. Verification for closure of Minor NCR at next Surveillance Assessment. NC status verified by auditor: Date closed: Verification (for effectiveness):

50 3.2.3 Year 2014: Main Assessment (3 Observations) Ref No: Obs # OCL-01 Obs # SH-01 Obs # NR-01 RSPO P&C Indicator E5.1 (Supply Chain Mass Balance Module) Location Palm Oil Mill Sahabat 41 and 42 Estates Sahabat 30, 41 and 42 Estates Details of Observation The requirements of the Mass Balance Module have essentially been documented and implemented as evidenced from the documentation and records at the Palm Oil Mill. However, during interviews of mill personnel, it was found that there is a lack of good understanding of details of the supply chain due to insufficient training provided to the mill personnel. At Sahabat 41 and 42 Estates, there is a stream leading to the sea. Steps have been taken in water management but however, it was found that there were plantation debris (fronds, wood waste, etc.) impeding the flow of water. The management, maintenance and monitoring of this waterway leading to the sea have to be effective to ensure the smooth flow of water. In Sahabat 30, 41and 42 Estates, signboards to indicate to workers regarding safety and health measures to reduce undue risks in the fields were only displayed at the estate offices. There were no such signboards displayed at strategic locations in the fields. Opened date 29 Aug Aug Aug 2014 Status Closed date Page 50 of 72 Remark, if any Identified Positive Elements 1) The PMU has provided proper infrastructure such as roads, futsal and badminton courts. 2) The PMU has contributed towards the local economy and has made significant financial contributions to the local communities.

51 3.3 Feedback Raised by Stakeholders and Findings Page 51 of 72 Intertek had obtained some written and verbal feedback from the stakeholders on the environmental and social performance of KKS Kembara Sakti Grouping operations in the course of assessment and consultations. During the Main Assessment, all pertinent feedback issues were reviewed and followed up for verification and these had been accordingly incorporated into the report findings. See table below: Stakeholders Feedback PMU Response Intertek verification / comment on further action (if any) Government Agencies Comunication done via on 04 Jun See list under para 2.5. Further action from PMU (if any) Feedback received from Sabah Forestry Department: 1. Suggestion that FGVPM rehabilitate the Sahabat river reparian reserve by planting certain tree species and also control measures to prevent pollution to the river. 2. Suggestion that FGVPM marked clearly the estate boundary so that there is no encroachment into forest reserve and to erect more signages indicating prohibition of entry into forest reserve and no hunting. Also, to remind employees on the danger of fire at the forest reserve boundary. Response from FGVPM: 1. The planting or enrichment planting of relevant riverbank / forest tree species along Sahabat river will be one of the management plan of FGV Tree Planting Project. Through the project river buffer, steep slope, unplantable area, HCV or biodiversity area and forest corridors are areas involved in the FGV Forest Tree Planting Project. The project will be initiated at one of FGV complexes Pontian Plantation; enrichment planting along Kinabatangan river for wildlife corridor. 2. The demarcation of the buffer zone will be implemented according to the RSPO P&C. Verified during on-site assessment that there is no forest reserve at the boundaries of Kembara Sakti PMU. Also, verified that Sahabat river does not pass through the Kembara Sakti PMU. However, Intertek will continue to take into consideration this feedback when conducting assessments of other PMUs of FGVPM in Sabah. PMU to update Intertek concerning the PMUs that may be affected by this feedback and the progress of the FGV Tree Planting Project. Non-Governmental Organizations Comunication done via on 04 Jun See list under para 2.5. Feedback received from Malaysian Nature Society (a stakeholder in environment / biodiversity management) that the assessor, FGVPM and RSPO to disclose fully the information and place it in the public domain so that Malaysian Nature Society (MNS) can carry out its own analysis and if need be conduct further verification on the ground and finally make a positive contribution to RSPO s on-going assessment of the Response from FGVPM: The information on certified PMU are publicly available at RSPO and CB websites. For the PMU undergoing assessment, the information on that specific PMU will be in the Public Summary Report published by the CB. In addition, Darrel Webber of RSPO replied to MNS as summarized below: Information may be scarce Intertek has replied to MNS that prior to the conduct of the Main Assessment, only certain information is available. During the assessment, Intertek will verify the operations of the PMU for compliance with the RSPO P&C, MYNI, RSPO Supply Chain Certification Standard. More information and On-going engagement with MNS as part of stakeholders consultation.

52 specific PMUs. since the auditors would also be visiting it for the first time. What the auditors are trying to do, at this point, is solicit information from those who might know the unit or area well enough. This will enable to the auditors to zoom in on issues or comments made once they are on the ground. Common issues may be flagged by stakeholder: 1. Many plantations in Sabah did not have EIAs. 2. Issue of plantations planting outside of their legal boundaries, especially along rivers and especially in Kinabatangan river areas. RSPO members are obliged to be transparent in providing information. Norazam of FGVPM will be able to furnish the information if it is specified by MNS. findings relating to the specific PMU will be contained in the Public Summary Report published by Intertek. Page 52 of 72 Local Communities On-site consultation and feedback sesssions were held during the assessment with various categories of stakeholders comprising of Contractors Suppliers, Transporter, Local community (School & Clinics), Government Agencies, Local Authorities, etc. and also employees/ workers were interviewed during the on-site assessment. - Concerns and issues raised include: Weakness in safety and health awareness among workers Many damaged roads Housing issues due to assets acquired by the mill. Ensure air quality is not adversely affected Continuous compliance with laws and regulations. Positive comments include: Contributions given to the local communities. Employment opportunities for local people. Other Interested parties The PMU will examine the concerns and issues raised and identify appropriate actions. To be followed up during the next Annual Surveillance Assessment.

53 Stakeholders generally confirmed that the PMU has taken adequate positive measures on environmental and social issues. Ongoing consultation, meetings and relationship building with interested parties will be maintained. Verified during on-site assessment that the PMU has management plan for the imporvement of social and environmental needs of the local community. Page 53 of 72 No further action needed.

54 Page 54 of ASSESSMENT CONCLUSION AND RECOMMENDATION Based on the findings above, Felda Global ventures Plantations (Malaysia) Sdn Bhd KKS Kembara Sakti Grouping had been able to demonstrate its compliance with the RSPO Principles and Criteria (Oct 2007), Malaysian National Interpretation (MY-NI 2010) and the RSPO Supply Chain Certification Standard (Nov 2011) for Palm Oil Mill. The PMU is also aware of the new requirements of RSPO Principle and Criteria (Apr 2013) and actions needed for the subsequent assessment at the next surveillance assessment. Therefore, it is recommended that the certification of Felda Global ventures Plantations (Malaysia) Sdn Bhd KKS Kembara Sakti Grouping be approved. Signed for and on behalf of Intertek Certification International Sdn Bhd Dr. Ooi Cheng Lee Lead Assessor Date: 13 Nov Acknowledgement of Internal Responsibility and Confirmation of Assessment Findings This is to acknowledge and confirm the assessment visits described in this report and the acceptance of the contents and findings in this assessment report. Signed for and on behalf of Felda Global Ventures Plantations (Malaysia) Sdn Bhd Mr. Norazam Abdul Hameed General Manager, Plantation Sustainability And Quality Management (PSQM) Department Date: 14 Nov 2014

55 Page 55 of Intertek RSPO Certificate details for KKS Kembara Sakti Grouping Certificate No: RSPO Issue date: 26 November 2014 Expiry date: 25 November 2019 Organization Address of Head Office: RSPO Membership No: Plantation Management Unit: Address of POM: Standards: Certification scope: Supply Chain model for CPO & PK: Felda Global Ventures Plantations (Malaysia) Sdn Bhd Felda Global Ventures Plantation (Malaysia) Sdn Bhd, PSQM Department, SPO Unit, 8th Floor Balai Felda, Jalan Gurney Satu, Kuala Lumpur KKS Kembara Sakti Grouping Kilang Sawit Kembara Sakti, Peti Surat No. 24, 91150, Lahad Datu, Sabah, Malaysia RSPO Principles and Criteria (Apr 2013); Malaysian National Interpretation (November 2010); RSPO Supply Chain Certification Standards (November 2011) for the Palm Oil Mill. Production of Crude Palm Oil and Palm Kernels Mass Balance Details of the Mill and Supply bases covered by this certificate and the tonnage approved are: Name Kembara Sakti Mill - POM (Capacity:60 MT/hour) FGVPM Sahabat 30 estate FGVPM Sahabat 35 estate FGVPM Sahabat 40 estate FGVPM Sahabat 41 estate FGVPM Sahabat 42 estate FGVPM Sahabat 43 estate Address Kilang Sawit Kembara Sakti, Peti Surat 24, Cenderawasih, Lahad Datu, Sabah, Malaysia Ladang Sahabat 30, Peti Surat No. 04, 91150, Cenderawasih, Lahad Datu, Sabah, Malaysia Ladang Sahabat 35, Peti Surat No.35, Cenderawasih, Lahad Datu, Sabah, Malaysia Ladang Sahabat 40, Peti Surat No. 40, 91150, Cenderawasih, Lahad Datu, Sabah, Malaysia Ladang Sahabat 41, Peti Surat No. 41, 91150, Cenderawasih, Lahad Datu, Sabah, Malaysia Ladang Sahabat 42, Peti Surat No. 42, 91150, Cenderawasih, Lahad Datu, Sabah, Malaysia Ladang Sahabat 43, Peti Surat No. 43, 91150, Cenderawasih, Lahad Datu, Sabah, Malaysia GPS Reference Latitude Longitude 5 21'39.74"N 5 19'23.20"N 5 20'56.40"N 5 18'45.36"N 5 21'46.43"N 5 21'34.65"N 5 18'35.26"N 119 5'34.80"E 119 3'18"E 119 7'1.20"E 119 5'5.10"E 119 4'55.13"E 119 2'44.57"E 119 2'55.53"E

56 Page 56 of 72 The annual certifiable tonnages of CPO and PK production by KKS Kembara Sakti Grouping from the supply base/suppliers as assessed and verified during the current Main Assessment (based on Jan - Dec 2013 data) are detailed as follows: POM Jan Dec Actual Jan Dec Actual + Projected Jan Dec Projected Total Certifiable FFB Processed (MT) Total Certifiable CPO Production (MT) OER: % OER: % OER: % Total Certifiable PK Production (MT) KER: 4.71 % KER: 4.95 % KER: 4.95 %

57 Appendix A: Page 57 of 72 Qualifications of Lead Assessor and Assessment Team Dr. Ooi Cheng Lee (OCL) Lead Assessor / Technical Expert (Palm Oil Mill, Environment, OHSAS, Social, HCV, Land Use and Supply Chain) - PhD in Welding, Cranfield University, UK - M.Sc. (Engineering) in Metallurgy, University of Birmingham, UK - B.App.Sc (Hons), Science University of Malaysia - Diploma in Translation for Science and Technology, Malaysia Translation Society Dr. Ooi Cheng Lee is an IRCA Lead Auditor and Lead Tutor for ISO He is also involved in auditing in other integrated management systems. He has successfully completed the RSPO Lead Assessor Course for Principles and Criteria (RSPO P&C) and the RSPO Supply Chain Certifications (RSPO SCC). He is currently involved in the management of all types of system and process/product certification in Intertek. He has more than 32 years work experience in product and process specifications, research & development, inspection and testing, quality assurance, engineering development, training, product certification, auditing and quality management system certification. He has conducted assessments of organizations in Malaysia, Singapore, Indonesia, Vietnam, Philippines, China, Myanmar, Cambodia and other regional countries. Assessments include those of rubber and oil palm plantations in Malaysia and Indonesia. His previous position as the General Manager of Lloyd s Register Quality Assurance (LRQA) Malaysia include the management of all types of systems certification, including that of environmental (ISO 14001), safety & health (OHSAS 18001) and Clean Development Mechanisms (CDM). He is currently the General Manager in Intertek Certification International Sdn. Bhd. He is a member of the Internal Review Panel for RSPO Assessment reports since May He was part of the RSPO Assessment team which audited several RSPO certified Plantation Management Units since Mr. Sazali Hasni Assessor / Technical Expert (Environment, Conservation and HCV area) - Bachelor of Science (Forestry) Mr. Sazali Hasni (SH) has over 25 years work experience in the forestry sector. He is an IRCA Auditor for ISO 9001 and auditor for the PEFC Chain-of-Custody Certification. He has successfully completed training in the Intertek In House RSPO P&C, MYNI. He was a member in the stakeholder consultation and development of the Malaysian Criteria & Indicators (MC&I) for Forest management Certification. He has been involved in the auditing of Forest Management Certification for the Perak State Forestry Department and Pahang State Forestry Department. He has also been involved with a German based company in testing their criteria for carbon tracing in an oil palm plantation in He had also acted as the regional consultant to International Tropical Timber Organization (ITTO) for the Asia Pacific region in the Evaluation and Monitoring of Projects funded by the organization from 1994 to Projects funded are mainly forestry related such as reforestation, conservation, community forestry apart from other research based projects. Mr. N. Retnasabapathy (NR) Assessor / Technical Expert (Good Agriculture Practice and Integrated Pest Management) BSc in Agriculture Mr. N. Retnasabapathy (NR) has over 25 years work experience in the plantation sector. He has held a Senior Management role in the estate field operations including GAP and IPM. He was a member of the Incorporated Society of Planters (ISP) and had implemented GAP, IPM and workers management system at various estates in Malaysia. He has successfully completed the IRCA accredited Lead Auditor course in ISO 9001:2008 and Intertek in House RSPO P&C MYNI Assessor course. He is a member of the RSPO CB Assessment team which audited several RSPO certified Plantation Management Units since 2009.

58 Page 58 of 72 Mr. Chin Bit Kee (CBK) Assessor / Technical Expert (Good Agriculture Practice, Integrated Pest Management and Social) Degree in Food Technology from University of Reading, United Kingdom Mr. Chin Bit Kee has more than 5 years working experience in the oil palm plantation, agriculture & social (worker welfare) related field. He has successfully participated in RSPO training conducted internally by Intertek on 17 April 2014 and completed a supervised period of training in practical auditing in agriculture industry and related field, with more than 15 days audit experience in at least 3 audits at different organizations. He has adequate knowledge on Palm Oil sector such as industry fundamentals sustainability, social and OHS issues (e.g. worker welfare issues and social matters such as employment terms, gender issues, worker welfare etc,) environmental matters (e.g.pollution control, conservation of resources). He is a member of the RSPO CB Assessment team which audited several RSPO certified Plantation Management Units since 2014.

59 Appendix B: Assessment Plan (Actual) Page 59 of 72 Date 25/08/2014 Day 1 Time (Note 3) 8.00 am 2.00 pm 2.00 pm pm 3.30 pm 4.00 pm 4.00 pm 5.30 pm 5.30 pm 8.00 pm 8.00 pm 9.00 pm Assessors and Assessment Activity Asssessment Team Travel to KKS Kembara Sakti Palm Oil Mill (POM) Office Lunch Break Opening Meeting and Briefing at KKS Kembara Sakti POM Office (to be attended by representatives from the Estates as well) Document Review and Assessment by all Assessors on respective RSPO P&C:1 to 8 at POM OCL SH NR CBK Site assessment at Palm Oil Mill P1 Transparency P8 Continual Improvement Site assessment at Palm Oil Mill P5 Environmental, Conservation P8 Continual Improvement Site assessment at Palm Oil Mill P4 Best Practices at Mill P8 Continual Improvement Review of changes for compliance to revised P&C 2013 Review of Time Bound Plan Verification for compliance with rules on partial certification Travel to Lahad Datu & Break Team Meeting and Discussion Site assessment at Palm Oil Mill P6 Employees, Individuals & Communities incl. Gender Issues P8 Continual Improvement Date Time Assessors and Assessment Activity 26/08/2014 Day am 12.30pm OCL SH NR CBK pm 1.30 pm 1.30 pm pm 5.30 pm 8.00 pm 8.00 pm 9.00 pm Site assessment at FGVP Sahabat 41 Estate P1 Transparency P2 Laws & regulations P3 Economic & Financial Viability P8 Continual Improvement Continue site assessment at FGVP Sahabat 41 Estate Site assessment at FGVP Sahabat 41 Estate P5 Environmental, Conservation, including HCV P8 Continual Improvement Continue site assessment at FGVP Sahabat 41 Estate Lunch Break Site assessment at FGVP Sahabat 30 Estate P4 Best Practices at Estates P7 New Plantings P8 Continual Improvement Continue site assessment at FGVP Sahabat 30 estate Travel to Lahad Datu & Break Team Meeting and Discussion Site assessment at FGVP Sahabat 30 Estate P6 Employees, Individuals & Communities incl. Gender Issues P8 Continual Improvement Continue site assessment at FGVP Sahabat 30 Estate Date Time Assessors and Assessment Activity 27/08/2014 Day am 12.30pm OCL SH NR CBK pm 1.30 pm Site assessment at FGVP Sahabat 42 Estate P1 Transparency P2 Laws & regulations P3 Economic & Financial Viability P8 Continual Improvement Site assessment at FGVP Sahabat 42 Estate P5 Environmental, Conservation, including HCV P8 Continual Improvement Lunch Break Site assessment at FGVP Sahabat 41 Estate P4 Best Practices at Estates P7 New Plantings P8 Continual Improvement Site assessment at FGVP Sahabat 41 Estate P6 Employees, Individuals & Communities incl. Gender Issues P8 Continual Improvement

60 1.30 pm pm 5.30 pm 8.00 pm 8.00 pm 9.00 pm Continue site assessment at FGVP Sahabat 42 Estate Continue site assessment at FGVP Sahabat 42 Estate Continue site assessment at FGVP Sahabat 41 Estate Travel to Lahad Datu & Break Team Meeting and Discussion Page 60 of 72 Continue site assessment at FGVP Sahabat 41 Estate Date Time Assessors and Assessment Activity 28/08/2014 Day am 12.30pm OCL SH NR CBK pm 1.30 pm 1.30 pm pm 5.30 pm 8.00 pm 8.00 pm 9.00 pm Site assessment at FGVP Sahabat 30 Estate P1 Transparency P2 Laws & regulations P3 Economic & Financial Viability P8 Continual Improvement Continue site assessment at FGVP Sahabat 30 Estate Site assessment at FGVP Sahabat 30 Estate P5 Environmental, Conservation, including HCV P8 Continual Improvement Continue site assessment at FGVP Sahabat 30 Estate Lunch Break Site assessment at FGVP Sahabat 42 Estate P4 Best Practices at Estates P7 New Plantings P8 Continual Improvement Continue site assessment at FGVP Sahabat 42 Estate Travel to Lahad Datu & Break Team Meeting and Discussion Site assessment at FGVP Sahabat 42 Estate P6 Employees, Individuals & Communities incl. Gender Issues P8 Continual Improvement Continue site assessment at FGVP Sahabat 42 Estate Date Time Assessors and Assessment Activity 29/08/ am 12.30pm OCL SH NR CBK Day 5 Site assessment at KKS Kembara Sakti Palm Oil Mill P2 Laws & regulations P3 Economic & Financial Viability Supply Chain for POM (SCCS) Site assessment at FGVP Estate 30 or 41 or 42 to follow up on any specific criteria/areas P5 Environmental, Conservation, including HCV P8 Continual Site assessment at FGVP Estate 30 or 41 or 42 to follow up on any specific criteria/areas P4 Best Practices at Estates P7 New Plantings P8 Continual Improvement Site assessment at FGVP Estate 30 or 41 or 42 to follow up on any specific criteria/areas P6 Employees, Individuals & Communities incl. Gender Issues P8 Continual Improvement Improvement pm 1.30 pm Lunch Break 1.30 pm 2.30 pm Preparation for Closing Meeting 2.30 pm 3.00 pm Team Meeting and Discussions with KKS Kembara Sakti Management Representative 3.00 pm pm Stakeholders Consultation on the following categories (see Notes 1 and 2 below): Contractors Suppliers Transporters NGOs Government Department / Agencies Local Community Settlers, in the case of independent and organized smallholders. Notes 1. It is mandatory for the PMU to inform Intertek and provide the information (as a minimum the no. of stakeholders in each applicable category and contact number) on the stakeholders prior to the assessment.

61 Page 61 of 72 independent and organized smallholders, where applicable) and to meet the sample size requirement pm pm Closing Meeting & Briefing at Palm Oil Mill Office 5.30 pm 8.00 pm Travel to Lahad Datu & Break Note 3: Time allotted for the audit activities may vary whenever situation warrants. Also, the arrangements may change depending upon circumstances

62 Appendix C-1: Page 62 of 72 Location of Felda Gobal Ventures Plantations (Malaysia) Sdn Bhd (FGVPM) - KKS Kembara Sakti Grouping, Lahad Datu, Sabah, Malaysia Felda Kembara Sakti

63 Page 63 of 72 Appendix C-2: Location Map of FGVPM - KKS Kembara Sakti Grouping, Lahad Datu, Sabah, Malaysia (Estates: Sahabat 30, Sahabat 35, Sahabat 40, Sahabat 41, Sahabat 42 and Sahabat 43) Note: Previously Sahabat 35 was under the KKS Jerangan Bistari Grouping but due to the closure of the Palm Oil Mill at Jerangan Bistari, it is now placed within the KKS Kembara Sakti Grouping.

64 Appendix C-3-1: FGVPM Sahabat 30 Estate Page 64 of 72

65 Appendix C-3-2: FGVPM Sahabat 35 Estate Page 65 of 72

66 Appendix C-3-3: FGVPM Sahabat 40 Estate Page 66 of 72

67 Appendix C-3-4: FGVPM Sahabat 41 Estate Page 67 of 72

68 Appendix C-3-5: FGVPM Sahabat 42 Estate Page 68 of 72

69 Appendix C-3-6: FGVPM Sahabat 43 Estate Page 69 of 72

70 Page 70 of 72 Appendix D: Photographs of Assessment findings at FGVPM KKS Kembara Sakti Grouping Overview of the Kembara Sakti POM with safety signages. Overview of the effluent ponds at Kembara Sakti POM. Inspection of dumpsite at POM No proper segregation of waste materials. Buffer zone signage at Sahabat 41 Estate Insufficient buffer zone markers.. Sahabat 41 Estate PPE compliance. Sahabat 41 Estate Secured schedule waste store.