RSPO PRINCIPLES & CRITERIA PUBLIC SUMMARY REPORT ANNUAL SURVEILLANCE ASSESSMENT 3. SABAHMAS MILL PPB Oil Palms Berhad 2016

Transcription

1 RSPO PRINCIPLES & CRITERIA PUBLIC SUMMARY REPORT ANNUAL SURVEILLANCE ASSESSMENT 3 Malaysia SABAHMAS MILL PPB Oil Palms Berhad 2016 Report prepared by: Muhd Jamalul Arif Certification decision by: Muhammad Haris Certifying Office B-3-1, Prima Klang Avenue, Jalan Kota KS/1, Klang, Selangor, Malaysia rspo@controlunion.com (Lead Assessor) (Certifier) Control Union Certifications Control Union Certifications is a member of the Control Union World Group - an international inspection and certification body. CUC performs assessments and certification in many agricultural based fields such as FSC, RSPO, and Organic production, Sustainable Textile Production, Organic Exchange, GLOBALGAP, HACCP, BRC, GMP and GTP. CUC is accredited by the Dutch Council of Accreditation (RVA) on the European quality standard EN for the inspection and certification of CUC Organic program (according to the EU regulation 2092/91) and GLOBALGAP program. When requested a copy of the accreditation certificate can be obtained from CUC. Control Union (Malaysia) Sdn Bhd is a registered affiliate member of RSPO and is a private limited company owned by the Control Union World Group based in Malaysia. Control Union (Malaysia) Sdn Bhd is authorized to conduct and issue certification on behalf of RSPO and Control Union Certifications. RSPO Membership Number RSPO Approval Date 12/01/2006 Affiliate Membership RSPOPC-SUM-REPORT.F01 (3.0) January 2016 Page 1 of 43

2 Table of Contents PART 1: SCOPE OF THE CERTIFICATION ASSESSMENT AUDIT COMPANY AND CONTACT DETAILS RSPO MEMBERSHIP & CERTIFICATION DETAILS ANNUAL SURVEILLANCE ASSESSMENT DETAILS ASSESSMENT TYPE LOCATION OF THE PALM OIL MILL PALM OIL MILL OUTPUT AND APPROXIMATE TONNAGES CERTIFIED GENERAL DESCRIPTION OF SUPPLY BASE Location of the Supply Base Statistics of the Supply Base and Estimated Tonnes of FFB produced per year Conservation and HCV Area (Ha) Percentage of Planted Oil Palm by different Age Ranges Calculation of the Number of Production Units (N) to Sample for the Mill PROGRESS OF ASSOCIATED SMALLHOLDERS OR OUT-GROWERS, IF APPLICABLE TO THIS ASSESSMENT LOCATION MAP FOR THIS CERTIFICATION UNIT (SEE APPENDIX 1)... 6 PART 2: PARTIAL CERTIFICATION MANAGEMENT STRUCTURE NON-COMPLIANCE IDENTIFIED WITH 2.1 ABOVE SUMMARY OF THE TIME BOUND PLAN... ERROR! BOOKMARK NOT DEFINED. 2.4 UN-CERTIFIED UNITS OR HOLDINGS... ERROR! BOOKMARK NOT DEFINED. 2.5 SUMMARY OF THE FINDINGS FOR PARTIAL CERTIFICATION... ERROR! BOOKMARK NOT DEFINED. 2.6 PARTIAL CERTIFICATION AUDIT AGENDA... 9 PART 3: AUDIT PROCESS ABOUT THE CERTIFICATION BODY AUDIT TEAM Qualifications of the Lead Auditor Qualifications of the Assessment Team AUDIT METHODOLOGY General Overview Assessment agenda for this Audit PART 4 ASSESSMENT FINDINGS LEAD ASSESSOR S SUMMARY AND RECOMMENDATION FOR CERTIFICATION SUMMARY OF THE FINDINGS BY PRINCIPLES AND CRITERIA Principle 1: Commitment to Transparency Principle 2: Compliance with Applicable Laws and Regulations Principle 3: Commitment to Long-Term Economic and Financial Viability Principle 4: Use of Appropriate Best Practices by Growers and Millers Principle 5: Environmental Responsibility and Conservation of Natural Resources and Biodiversity Principle 6: Responsible Consideration of Employees and of Individuals and Communities by Growers and Millers Principle 7: Responsible Development of New Plantings Principle 8: Commitment to Continuous Improvement in Key Areas of Activity SAMPLE CRITERIA APPLIED DURING ANNUAL SURVEILLANCES ONLY & NOT APPLICABLE FOR THE MAIN ASSESSMENT... ERROR! BOOKMARK NOT DEFINED. 4.4 NON-CONFORMITY RAISED DURING THIS AUDIT AND ANY FROM THE PREVIOUS YEAR, IF APPLICABLE Non-Conformities Identified during this Audit RSPOPC-SUM-REPORT.F01 (3.0) January 2016 Page 2 of 43

3 4.4.2 Non-Conformity Identified during the last ASA, not applicable for MA THE FOLLOWING NC S WERE RAISED DURING THE LAST AUDIT AND THE STATUS WAS REVIEWED AS INDICATED BELOW.... ERROR! BOOKMARK NOT DEFINED Observations Raised During this Audit ISSUES THAT WERE RAISED DURING THE STAKEHOLDER CONSULTATION, IF ANY... ERROR! BOOKMARK NOT DEFINED. PART 5: RSPO SUPPLY CHAIN CERTIFICATION POM INCLUDED IN THE SCOPE OF THE AUDIT CONFIRMATION OF THE COMPANY S SUMMARY OF ANNUAL CERTIFIED VOLUME OF RSPO CERTIFIED PALM OIL AND PALM KERNEL OVER A SPECIFIED PERIOD SUMMARY REPORT INCLUDING A BRIEF DESCRIPTION OF THE SCOPE OF CERTIFICATION MONTHLY RECORDS OF CERTIFIED AND UNCERTIFIED FFB RECEIVED SINCE THE LAST AUDIT MONTHLY RECORDS OF CERTIFIED CPO AND PK PRODUCED SINCE THE LAST AUDIT... ERROR! BOOKMARK NOT DEFINED. 5.6 RECORDS OF CERTIFIED CPO & PK SOLD UNDER GREENPLAM TO BUYERS SINCE THE LAST AUDIT, IF ANY RECORDS OF CERTIFIED CPO & PK SOLD UNDER UTZ ETRACE TO BUYERS SINCE THE LAST AUDIT, IF ANY NON-CONFORMITIES IDENTIFIED DURING THIS AUDIT DESCRIPTION OF THE ORGANIZATIONAL MANAGEMENT SYSTEMS FINAL CERTIFICATION DECISION BY CONTROL UNION FOR THE RSPO SCCS AUDIT OF THE POM PART 6: CERTIFIED ORGANISATION S ACKNOWLEDGEMENT OF INTERNAL RESPONSIBILITY DATE OF NEXT ASA DATE FOR CLOSURE OF NON-CONFORMITIES SIGNING BY THE CLIENT SIGNING BY THE LEAD AUDITOR SIGNING BY THE CERTIFIER PART 7: APPENDICIES APPENDIX 1: LOCATION MAP FOR THIS CERTIFICATION UNIT FOR MALAYSIA ONLY. DELETE IF THIS AUDIT WAS DONE IN ANOTHER COUNTRY... ERROR! BOOKMARK NOT DEFINED. APPENDIX 2: LIST OF ABBREVIATIONS RSPOPC-SUM-REPORT.F01 (3.0) January 2016 Page 3 of 43

4 PART 1: SCOPE OF THE CERTIFICATION ASSESSMENT AUDIT 1.1 Company and Contact Details Company Name: PPB Oil Palms Berhad ( W) Business Address: 8th Floor UBN Tower, No. 10 Jalan P. Ramlee, Kuala Lumpur, Malaysia Contact Person: Mr. Simon Siburat Office Telephone: Other Certifications Held: ISCC 1.2 RSPO Membership & Certification Details RSPO Membership Number: (O) ( ) Registered Client Name: PPB Oil Palms Berhad Certificate Number: CU-RSPO Start Date Of Certificate: End Date Of Certificate: Date Of Original Certification: Scope: Certification of the Palm Oil Mill and Supply Bases Type Of Certification: Single site Duration Of Certificate: 5 Years from date of certification 1.3 Annual Surveillance Assessment Details Dates of This Audit: 4 th 6 th October 2016 Audit Number: ASA Assessment Type This is Annual Surveillance Audit 3 based on Roundtable on Sustainable Palm Oil (RSPO) Malaysian National Interpretation Task Force (MYNI-TF), National Interpretation of RSPO Principles and Criteria for Sustainable Palm Oil Production Endorsed by RSPO Board of Governors on 6 March 2015 as audit standard. 1.5 Location of the Palm Oil Mill Name Mill Palm Oil Mill Capacity Location GPS Reference (POM) MT/Hour Address Longitude Latitude KM22, Jalan Sri Putatan, Off Jalan Sabahmas Palm 40 Dam, Lahad Datu, Sabah, Oil Mill Malaysia ' " E 05 10' " N 1.6 Palm Oil Mill Output and Approximate Tonnages Certified Figures below are from: Only from certified supply bases (Y/N). NO Combining certified with uncertified supply bases (Y/N). YES If the Mill is receiving FFB from uncertified supply bases outside the audit scope, such uncertified sources is highlighted under the following sections as seen applicable: a. PART 1, Section 1.7 General Description of Supply Base, b. PART 2: Partial Certification, Section 2.4 Uncertified Units or Holdings, c. PART 5: RSPO Supply Chain Certification of this report Projected Production from the last 12 Months (MT) Sept 15 to Aug 16 Actual Production for this Audit Year (MT) Sept 15 to Aug 16 Projected 12 Months (MT) Forecast Certified in this Report Sept 16 to Aug 17 *FFB *CPO *PK FFB CPO PK FFB CPO PK 214,837 47,072 10, , , , ,300 32,340 7,365 RSPOPC-SUM-REPORT.F01 (3.0) January 2016 Page 4 of 43

5 *Combined from certified and non-certified FFB on last year report. 1.6 (b) Non-Certified Tonnage of FFB (outside supplier Excluded from Certificate) Tonnage / Year Independent FFB Estimated Actual Forecast Supplier (Sept 15 to Aug 16) (Sept 15 to Aug 16) (Sept 16 to Aug 17) Outside suppliers 40,870 36, , General Description of Supply Base The mill receives approximately 75% of FFB from its own estates and 25% is from uncertified supply bases. This audit was carried out to ensure full compliance with RSPO requirement. The incoming and outgoing material [FFB, CPO & PK] are controlled by inventory computerised system Location of the Supply Base Oil Palm Location GPS reference Area Summary (Ha) OPP Plantation Name Address Longitude Latitude Total Mature Sabahmas Jalan Dam, Lahad ' " E 5 10' " N 10, ,960 OPP 1 Estate Datu, Sabah, Malaysia TOTAL 10, , Statistics of the Supply Base and Estimated Tonnes of FFB produced per year OPP Oil Palm Plantation Estimated FFB/Year (MT) Planting Years Cycle (Years) OPP 1 Sabahmas Estate 147, TOTAL 147, Conservation and HCV Area (Ha) OPP Oil Palm Plantation Conservation Area (Ha) HCV Area (Ha) * HCV part of Conservation OPP 1 Sabahmas Estate - 1, Yes TOTAL - 1, Yes * Indicate if HCV area is part of the Conservation Area. If the HCV area is part of the Conservation Area, then YES otherwise, No Percentage of Planted Oil Palm by different Age Ranges OPP Planting Years by 5 year Ranges Total (%) OPP 1 80% 7% 13% (100%) Calculation of the Number of Production Units (N) to Sample for the Mill N = 0.8 Y, where Y is the number of units, with the result always to be rounded up to the next whole integer. Where only a sample of the supply base is assessed, units not previously assessed, or assessed earlier in the certification program, are to be preferred over those more recently assessed For the Mill, how many units make up the production base? Owned estates (Y) N = 0.8 Y Smallholders (Z) N = 0.8 Z Explanation as to the selection of estates sampled This mill only received certified FFB from 1 internal estate which is divided into 3 small divisions. RSPOPC-SUM-REPORT.F01 (3.0) January 2016 Page 5 of 43

6 1.8 Progress of associated Smallholders or Out-growers, if applicable to this assessment Progress of associated Smallholders or Out-growers towards Compliance with relevant Standards - should be in accordance to the 3 years implementation plan, if applicable to this assessment Not applicable. No associated smallholders or out growers involved in this assessment. 1.9 Location Map for this Certification Unit (See Appendix 1) PART 2: PARTIAL CERTIFICATION The rules for partial certification allow organizations that have a majority holding in and / or management control of more than one autonomous company growing oil palm to certify individual management units and / or subsidiary companies subject to certain rules. 2.1 Management Structure Section Criteria Yes/No If Yes If No Is the certified operation (POM and supply base as No Section 2 is Go to detailed above) a stand-alone operation and there are no other plantations or mills owned by the same company? N/A Is the certified operation part of a simple structure of Yes Go to Go to operations owned by one company? Are there statements of the ultimate controlling shareholders and directors in the managing agency company/companies: - Go to Go to a. Explaining the legal relationship and the management arrangements with the subsidiary companies and / or with any operating groups? b. A statement of commitment to complying with the - Go to 2.4 Go to spirit of the RSPO for all companies and subsidiaries involved with the growing of oil palm and for the production of palm oil? Is there a time bound plan in place for all subsidiaries, Yes Go to estates and palm oil mills? Is the parent company or one of its majority owned and / or managed subsidiaries a member of RSPO? Yes 2.2 Non-compliance Identified with 2.1 Above Section Non-compliance findings NC raised Category There is no explanation as to the company s structure and therefore it - Major Is not possible to conduct an effective audit against the rules for partial certification There is no statement of commitment to complying with the spirit of - Major the RSPO for all companies within the company structure There is no time bound plan in place for the certification for all - Major subsidiaries, estates and mills No applicable membership of the RSPO. - Major RSPOPC-SUM-REPORT.F01 (3.0) January 2016 Page 6 of 43

7 2.3 Summary of the Time Bound Plan Section Requirement Findings and any action required Compliance Does the plan include Yes, all PPB subsidiaries. Yes all subsidiaries, estates and mills? Is the time bound plan challenging? Age of plantations. Location. POM development Infrastructure. Compliance with applicable law. Not Applicable as all the Palm Oil Mill & Estate under PPB Oil Palm subsidiaries had been RSPO certified Have there been any changes since the last audit? Are they justified? If there have been changes, what circumstances have occurred? Have there been any stakeholder comments? Have there been any newly acquired subsidiaries? Have there been any isolated lapses in implementation of the plan? Has there been any systematic failure to proceed with the implementation of the plan? General statement as to progress made since the last audit? 2.4 Un-Certified Units or Holdings No Changes. - N/A-refer No stakeholder comments received for the inspected units. No as per the time of audit. - N/A refer N/A refer N/A refer NOTE: Companies may demonstrate compliance by clear evidence of a self-audit (i.e. an internal audit for all subsidiaries, estates and Palm Oil Mills) Section Requirement Findings and any action required Compliance Did the company conduct an internal audit? If so, has a positive assurance statement been produced? Not applicable as there is no uncertified units under PPB Oil Palm Bhd. RSPOPC-SUM-REPORT.F01 (3.0) January 2016 Page 7 of

8 2.4.2 No replacement after dates defined in NIs Criterion 7.3: Primary forest. Any area identified as containing High Conservation Values (HCVs). Any area required to maintain or enhance HCVs in accordance with RSPO criterion Any new plantings since January 1st 2010 must comply with the RSPO New Plantings Procedure Any Land conflicts are being resolved through a mutually agreed process, e.g. RSPO Grievance procedure or Dispute Settlement Facility, in accordance with RSPO criteria 6.4, 7.5 and Any Labor disputes are being resolved through a mutually agreed process, in accordance with RSPO criterion Any Legal noncompliance is being resolved in accordance with the legal requirements, reference to RSPO criteria 2.1 & 2.2. Not applicable as there is no uncertified units under PPB Oil Palm Bhd. Not applicable as there is no uncertified units under PPB Oil Palm Bhd. Not applicable as there is no uncertified units under PPB Oil Palm Bhd. Not applicable as there is no uncertified units under PPB Oil Palm Bhd. Not applicable as there is no uncertified units under PPB Oil Palm Bhd RSPOPC-SUM-REPORT.F01 (3.0) January 2016 Page 8 of 43

9 TIME BOUND PLAN FORECAST FOR RSPO CERTIFICATION OF ALL PALM OIL MILLS & SUPPLY BASES Palm Oil Mill Country Supply Bases (estates, plantations, associations) Targeted RSPO Certification Year Current Certification Status as per this Audit With reference to time bound plan, the following issues were reviewed openly with the Control Union audit team during the assessment and which may be in conflict with the rules for partial certification, if applicable Name of Mill or Plantation *Area of concern (See examples below) N/A Include any known concerns, media reports and major issues both present and from the past covering, for example: Replacement of primary forest or any area containing HCV s since November Evidence of non-compliance with the law Legal issues Compensation payments Social relations Burning Labor disputes 2.5 Summary of the findings for Partial Certification The audit team assessed compliance with the above requirements during this audit. Failure to address any noncompliance identified may lead to certification suspension. All the subsidiaries under PPB Oil Palm Berhad have been certified and there is no new acquisition. N/A 2.6 Partial Certification Audit Agenda Date Location Agenda 05/10/2016 Sabahmas Mill Documentation review PART 3: AUDIT PROCESS 3.1 About the Certification Body Control Union Certifications is a member of the Control Union World Group an international inspection and certification body. CUC performs Audits and certification in many agricultural based fields such as FSC, RSPO, and Organic production, Sustainable Textile Production, Organic Exchange, GLOBALGAP, HACCP, BRC, GMP and GTP. CUC is accredited by the Dutch Council of Accreditation (RVA) on the European quality standard EN for the inspection and certification of CUC Organic program (according to the EU regulation 2092/91) and EUREPGAP program. When requested a copy of the accreditation certificate can be obtained from CUC. Control Union (Malaysia) Sdn Bhd is a registered affiliate member of RSPO and is a private limited company owned by the Control Union World Group based in Malaysia. Control Union (Malaysia) Sdn Bhd is authorized to conduct and issue certification on behalf of RSPO and Control Union Certifications. 3.2 Audit Team Lead auditor: Team member 1: Team member 2: Team member 3: Muhd Jamalul Arif Jefri Sharaai Ahmad Kamal Shahabudin Nor Ashikin Shafinaz Whayab RSPOPC-SUM-REPORT.F01 (3.0) January 2016 Page 9 of 43

10 3.2.1 Qualifications of the Lead Auditor Requirement A minimum of post high school (post-secondary school) training in either agriculture/forestry, environmental science or social sciences; At least 5 years professional experience in area of work relevant to the assessment (e.g., palm oil management; agriculture/forestry; ecology; social science); Training in the practical application of the RSPO criteria, and RSPO certification systems; Successfully completion of an ISO 9000:19011 lead auditors course; Training in the practical application of RSPO certification systems. A supervised period of training in practical auditing against the RSPO criteria or similar sustainability standards, with a minimum of 15 days audit experience and at least 3 audits at different organizations. Qualifications Post graduated in Plantation Management and Cargo Surveying from local university. Experience in auditing since 2011 in RSPO P&C, SCCS, GMP B2 & B3, ESCAS Animal Welfare RSPO P&C and Global Gap standards. Working experience in handling Q&Q survey for agricultural products such palm oil. Involved in RSPO assessment since Member of CUC RSPO audit team. Involved in audits for P&C and SCCS conducted in Malaysia, Indonesia and middle east country. Completed ISO 9001:2008 Lead auditor in 2011, ISO & in Involved in RSPO assessment since Member of CUC RSPO audit team. Involved in audits conducted in Malaysia and Indonesia. Involved in RSPO assessment since Involved in audits conducted in Malaysia and Indonesia for more than 5 companies audits. RSPO endorsed lead auditors course. Yes, successful passed on Signed code of conduct. Yes General knowledge of: Yes RSPO P&C standards. Yes CUC organizational structure. Yes CUC quality systems. Yes Lead auditor role. Yes Report writing. Yes Stakeholder consultation. Yes Certification decision process. Yes RSPO SCCS program manual. Yes CUC filing systems. Yes Correct use of RSPO trademarks. Yes History and objectives of RSPO. Yes CV available. Yes Completion of CUC RSPO lead auditor training. Yes RSPOPC-SUM-REPORT.F01 (3.0) January 2016 Page 10 of 43

11 3.2.2 Qualifications of the Assessment Team RSPO Requirement Team Member Name Qualifications Fluent in main local Jefri Sharaai Fluent in English and Bahasa languages and English. Ahmad Kamal Fluent in English and Bahasa Nor Ashikin Shafinaz Fluent in English and Bahasa Field working experience in the palm oil sector, or a demonstrable equivalent. Jefri Sharaai Bachelor Degree in Chemical Engineering and Master Degree (Science) in Quality & Productivity. Working experience in various industries and discipline since Auditing experience in Quality Management System (ISO9001), Environmental Management System (ISO14001) and Safety & Health (OHSAS 18001) since year Certified ISO 14001:2004 and OHSAS 18001:2007 Lead Auditor. Ahmad Kamal Have been full time employee in MPOB for 32 years and having expertise in Code of Practice for mill and estate. Nor Ashikin Shafinaz Graduated from Universiti Kebangsaan Malaysia in Chemical Engineering. Been part of RSPO P&C and SCC team member during audits in Malaysia. Trained on ISO 9001 and GAP. Good agricultural practices (GAP), integrated pest management (IPM), pesticide and fertilizer use. Health and Safety auditing on the farm and in processing facilities. (For example, OHSAS or occupational. Health and safety assurance system). Workers welfare issues and social auditing experience. (For example, with SA8000 or related social or Jefri Sharaai Ahmad Kamal Nor Ashikin Shafinaz Jefri Sharaai Ahmad Kamal Nor Ashikin Shafinaz Jefri Sharaai Bachelor Degree in Chemical Engineering and Master Degree (Science) in Quality & Productivity. Working experience in various industries and discipline since Auditing experience in Quality Management System (ISO9001), Environmental Management System (ISO14001) and Safety & Health (OHSAS 18001) since year Certified ISO 14001:2004 and OHSAS 18001:2007 Lead Auditor. MPOB certified auditor for Code of Practice for mill and estate. Graduated from Universiti Kebangsaan Malaysia in Chemical Engineering. Been part of RSPO P&C and SCC team member during audits in Malaysia. Trained on ISO 9001 and GAP. Bachelor Degree in Chemical Engineering and Master Degree (Science) in Quality & Productivity. Working experience in various industries and discipline since Auditing experience in Quality Management System (ISO9001), Environmental Management System (ISO14001) and Safety & Health (OHSAS 18001) since year Certified ISO 14001:2004 and OHSAS 18001:2007 Lead Auditor. In last 32 years in MPOB, he has audited most of the palm oil mills in Malaysia. Audit includes OSHAS and Best Manufacturing Practices. Graduated from Universiti Kebangsaan Malaysia in Chemical Engineering. Been part of RSPO P&C and SCC team member during audits in Malaysia. Trained on ISO 9001 and GAP. Bachelor Degree in Chemical Engineering and Master Degree (Science) in Quality & Productivity. Working experience in various industries and discipline since Auditing experience in Quality Management System (ISO9001), Environmental Management System RSPOPC-SUM-REPORT.F01 (3.0) January 2016 Page 11 of 43

12 ethical accountability codes). Environmental and ecological auditing. (For example, experience with organic agriculture, ISO or environmental management systems). Nor Ashikin Shafinaz Jefri Sharaai Nor Ashikin Shafinaz (ISO14001) and Safety & Health (OHSAS 18001) since year Certified ISO 14001:2004 and OHSAS 18001:2007 Lead Auditor. Graduated from Universiti Kebangsaan Malaysia in Chemical Engineering. Been part of RSPO P&C and SCC team member during audits in Malaysia. Trained on ISO 9001 and Social issues. Bachelor Degree in Chemical Engineering and Master Degree (Science) in Quality & Productivity. Working experience in various industries and discipline since Auditing experience in Quality Management System (ISO9001), Environmental Management System (ISO14001) and Safety & Health (OHSAS 18001) since year Certified ISO 14001:2004 and OHSAS 18001:2007 Lead Auditor. Graduated from Universiti Kebangsaan Malaysia in Chemical Engineering. Been part of RSPO P&C and SCC team member during audits in Malaysia. Trained on ISO 9001 and GAP. Economic issues. Jefri Sharaai Bachelor Degree in Chemical Engineering and Master Degree (Science) in Quality & Productivity. Working experience in various industries and discipline since Auditing experience in Quality Management System (ISO9001), Environmental Management System (ISO14001) and Safety & Health (OHSAS 18001) since year Certified ISO 14001:2004 and OHSAS 18001:2007 Lead Auditor. Muhd Jamalul Arif Involved in RSPO assessment since Member of CUC RSPO audit team. Involved in audits conducted in Malaysia and Indonesia. 3.3 Audit Methodology General Overview The Audit was carried out in conformity with the procedures as laid down in the CUC Procedure Manual and the RSPO Program Manual for the auditors and Certifier. During the Audit the qualified CUC auditors used the RSPO standard as endorsed for the country in which the audit took place and recorded their findings. Workers and local communities were interviewed and evidence sought to confirm ongoing compliance to include: Chemical stores. Storage, MSDS leaflets, Herbicide mixing areas, PPE, Ventilation, Security. Field inspections. Herbicide application programs. Harvesting sites and efficiency. Fertilizing operations. SOP s. Soil maps. Land preparation. Ground cover. IPM. First aiders and boxes. Ground cover. Soil erosion. Field observations of all operations. Worker interviews. OSH. Sexual, religious, racial harassment. Pay and contracts. Child labor. First aid. Awareness. Re-planting sites. Zero burn. HCV s. Identification. Management plans. Environmental Impact Assessments. Implementation. Riparian zones. Width. Current and future management. Non-maintenance regimes. Water management. Water courses. Water monitoring. Road maintenance. Run off. Social amenities. Social Impact Audits. Local communities. Contributions made. Employment opportunities. Social impacts. Complaints procedures. Workshops. Oil traps. Safe working environment. PPE. Diesel tanks. Environmental waste management. RSPOPC-SUM-REPORT.F01 (3.0) January 2016 Page 12 of 43

13 Line sites. Interviews with householders. Inspection of water discharge points. Water improvement plans. Waste disposal. Documentation review. The Palm Oil Mill audit verification included the following activities: Mill and workshop inspections. Documentation review & worker interviews. Mill. SOP s. Safe working environment. Gen sets. Walk ways. Signs. EFB. POME treatment. Emissions. Mass balance. Diesel tanks. PPE. Fire extinguishers. First aiders and boxes. Fuel and water usage. OSH. Training. Management structure. First aiders. Full document review. Completion of the checklist. Review and documentation of evidence. All aspects of RSPO P&C s applicable. Worker interviews. OSH. Sexual, religious, racial harassment. Pay and contracts. Compliance against the RSPO SCCS certification scheme. Verification: Verification of implementation was done through field observations, workshop and chemical store inspections, worker and community interviews and mill inspections as summarized above Assessment agenda for this Audit Date Location Main activities 04 th October 2016 Sabahmas POM Opening meeting Chaired by the audit team leader (Tuesday) Introduction by team leader Sabahmas POM Presentation by respective managers Presentation of Palm Oil Mill source of FFB by respective managers 09:00 17:00: Supply Chain Certification Assessment of the POM (RSPO Jamal SCCS) Supply Chain Certification Assessment of the POM (RSPO SCCS) Demonstration of legal entity Roles and responsibility Procedures/manual/SOP Record of purchase RSPO certified product Record of sales RSPO certified product RSPO logo & claims Kamal/Jefri/ Ashikin : Document review Document review [EIA, SIA, CIP, Business Plan] Complaint mechanism / Request & respond Best agricultural practices Safety and Health Site verification Best agricultural practices Manuring, Spraying, Harvesting, HCV / Conservation Area Legal compliance / boundary Chemical / Pesticide / Fertilizer Stores Workers interview Worker s facilities (housing, pay, etc.) Stakeholder consultation if required. RSPOPC-SUM-REPORT.F01 (3.0) January 2016 Page 13 of 43

14 05 th October 2016 (Wednesday) 06 th October 2016 (Thursday) Sabahmas Estate Jamal Kamal/Jefri/ Ashikin Sabahmas POM 09:00 17:00: RSPO RED Sabahmas POM & Sabahmas Estate Document review 09:00 17:00: RSPO P&C Document review Document review [EIA, SIA, CIP, Business Plan] Complaint mechanism / Request & respond Best agricultural practices Safety and Health 10:30 12:30: Site verification Best agricultural practices Manuring, Spraying, Harvesting, HCV / Conservation Area Legal compliance / boundary Chemical / Pesticide / Fertilizer Stores Workers interview Worker s facilities (housing, pay, etc) Stakeholder consultation if required : Preparation for closing meeting Additional field visits and meetings with managers as necessary 0900: Closing meeting Presentation of findings by the audit team Questions and answers Final summary by team leader End of assessment PART 4 ASSESSMENT FINDINGS 4.1 Lead Assessor s Summary and Recommendation for Certification The mill and supply bases visited (as per the above Tables 1.5 and 1.7.1) and were assessed at field, office, facilities, stores and a document review was carried out in accordance to the RSPO principles and criteria. The RSPO management system s documentations seen with minor changes in relation to scope of certification. Specific evidences were recorded for estates and mill. Interviews with Estate Managers, Mill Manager, members of worker s union and committee took place in both formal and informal environments and worker interviews were conducted at the supply base and the mill. The management is highly committed in maintaining the RSPO system by adopting to continuous improvement programs. The company has established continuous improvement and effectively documented. There was no complaint or negative feedback received during the audit or during the field assessment when interviewing with the external stakeholders. The management continuously monitor the established KPI / objectives that significantly rule the achievement of company s corporate policy on RSPO. It is therefore the recommendation of the lead assessor that: Signed: A certificate of compliance is maintained. Name: Muhd Jamalul Arif Date: 24 th October 2016 RSPOPC-SUM-REPORT.F01 (3.0) January 2016 Page 14 of 43

15 4.2 Summary of the findings by Principles and Criteria Over the 5 years period of the life of the certificate, there will be 4 annual surveillance audits. Identified Non-Conformities and noteworthy Positive and Negative Observations. The RSPO require that this report contain findings by each principle and some example criteria. Please see table below. Principle 1: Commitment to Transparency Criterion by Audit The company has all the copies of requests & responses which are more to internal request and local authority bodies. Such records are kept and available Summary for viewing. A common system adopted as parent company on publicly available documents which have been listed in their SOP. Requests made by stakeholder were responded and well documented. Adequate information available for confidential information that publicly available. ASA Company has established procedure entitled SOP for Communication in Respect of RSPO Principle One (1) for PPB Oil Palms Sabah Operation authored by Mr. Simon Siburat revision date 01/07/2009 version 1.0. This is a communication policy committed to open communication with all its stakeholders. SOP stated the document with no restriction as follow: Permit and licenses EIA report SIA report HCV report and management plan Plantation map Wilmar annual report SOP of mill and plantation Newsletter, tribune and company publications Health and safety plan Grievance procedure Continuous improvement plan Stakeholder need to fill PIR form upon accessing the public document. There is no such request to access public document to date as sighted the PIR record. Mill has updated the list of stakeholders last on 05/09/2016 verified by Sr. Mill Manager, Mr. Alvin Justin. Stakeholders listed are: 26 government agency 10 NGO & association 2 local community 18 FFB supplier 4 grocery shop 21 panel clinic/doctor 5 consultant 187 supplier spare part 12 others RSPOPC-SUM-REPORT.F01 (3.0) January 2016 Page 15 of 43

16 Mill conduct stakeholder consultation annually with the affected parties by combining with Sabahmas Estate. Last stakeholder consultation was done on 06/09/2016. Sighted minute of meeting prepared by Mdm. Asrianie Abd Muin (Clerk) attended by 27 participants. The meeting agenda briefed about: Issues during last consultation Environment and safety issues Company policy and procedure Complaint from stakeholders Participants are made aware of the issues briefed during consultation. Issues highlighted have been acted accordingly. Internal or external stakeholder can channel their complaint and grievance to estate management by filling up complaint form. Estate management will have appointed PIC to resolve issues addressed. ASA Mill and estate have defined the publicly available document for third party accessibility. In order to update the publicly available document to the stakeholders, mill and estate will inform by distributing out letter to relevant stakeholders. Sighted the letter to stakeholders dated 11/08/2016 detailed list of publicly available document. The publicly available documents classified are: Land title MPOB, DOE and DOSH licenses Company annual report Mill monthly report Company policy SOP Organization chart Map of estate, main river and village Wilmar sustainability report CSR tribune OSH Plan SEIA EAI dated Complaint and grievance Consultation procedure CIP HCV management plan Stakeholders can access those documents by requesting through public information request form. Once the permission is granted by mill management, stakeholders can access the related document which are available at mill. ASA Company has established memorandum code of conduct dated 13/05/2015 signed by Mr. Goh Ing Sing (Chairman & MD) stated that PPB Oil Palms Berhad and its subsidiary companies will synchronize with the group to adopt the company policy on code of conduct for practices by all employees. RSPOPC-SUM-REPORT.F01 (3.0) January 2016 Page 16 of 43

17 Principle 2: Compliance with Applicable Laws and Regulations Criterion by Audit The mill and estates have demonstrated compliance to all applicable local, national and international laws. Legal ownership of land and its land use is Summary clearly demonstrated through the respective land titles. Boundaries have been clearly demarcated. There have been no land disputes or claims involving the mill and estate. ASA The company has updated List of legal register and all applicable legal and other requirements is available recorded in the table title, Register of Legal and Other Application Requirement for PPB Oil Palms Bhd. List register generated based on the internal procedure, Doc. No. RSPO 2.1 (2) dated 18/12/07. The document is prepared and applied both for mill and estate. Copies of regulation is available in books, printed and internet access. Applicable legal requirements have been extracted into legal register. Mr. Ricky Godwin (Sustainability Manager) is responsible for updating the legal register. The legal register contains information on act, no, part, section, sub section, requirements, activities, responsible person, compliance status (Y/N/IF) and remarks. Legal documents are available to Executive/Officer and above level of employee and legal information required for workers are prided during briefing sessions. Interview with sprayers reveals that they aware of legal requirements such as minimum wage & chemical hazards & PPE. Some of applicable laws sighted includes: Occupational Safety & Health Regulation, 1997 Environmental Quality Act 2012 (Amendment) Environmental Quality (Scheduled Wastes) Pesticides Act 1974 Factory and Machinery Act 1967 State of Sabah Land Ordinance (cap.67) as at 2005 Mill legal compliance status has been stated for each of the law identified in the current status column of the legal register titled List and Summary of Applicable Laws and Regulations. Legal compliance been reported quarterly listed in the Wilmar Statutory Compliance report as sighted in report period for month of Jan to March 2016 by Mr. Alvin Justin (Sr. Mill Manager), dated 06/04/16. At estates level, legal compliance been reported quarterly listed in the Wilmar Statutory Compliance report as sighted in report period for month of Jan to March List of permits is stated along with person in charge, expiry date and remarks. Person in charge is Mr. Ricky Godwin (Sustainability Manager). He is from Supporting Department (CSR) ensure tracking of changes and communicate to the relevant section of estate and mill management. Sighted frequency of updating yearly since year 2011, 2012, 2013, 2014 and 2015 in the amendments sheet by Mr. Ricky Godwin and approved by Mr. Edrin Moss (Sr. Manager Sustainability). ASA The mill is located within the estate land and the estates land titles are well documented without any disputes. Land title clearly shows that the estate land is for exclusively for agricultural crop cultivation. It is leased for 99 years ( ) from state government. Sabahmas estate holds land title No. CL , , , , , , & for total land area of 10, Ha. RSPOPC-SUM-REPORT.F01 (3.0) January 2016 Page 17 of 43

18 Land title is under Geodopa Holding but there is No Objection letter dated 30/05/2008 that Sabahmas is allowed to use this land. Both the estate lands have leasehold period from 01/01/ /12/2086. Legal map with boundary store identification is maintained by the estate. Physical boundary marking using boundary stones are available for the estate as evident during the site verification visits to Block 184 (041/296) (140/952). There is proper signage indicating location of the boundary stone. There is no evidence any disputes with neighboring estates and village. Sighted SOP Identification of Legal and Customary Rights & Identifying People entitled for compensation. The SOP outlines participatory mapping, compensation and etc in case of any dispute arises. There is no evidence of any form of violence is used to resolve conflict as the company has the company s Human Right Policy signed by Group Plantation Head & Group CSR Head dated June 2014 states on non- violence. ASA The company has established SOP titled Identification of Legal and Customary Rights Identifying People entitled for compensation takes care of participatory mapping (FPIC) in case of dispute. However, there is no evidence of any dispute and as well as there is no customary right issue as the land are belong state government with the company maintaining proper documented legal titles for the ownership. In the case of any dispute arises, the company has SOP Dispute and Grievances PPB/RSPO 6.3 (2.2)/(1) dated 16/11/2009 to manage to tackle the issue. At estate, there is various scale of location map: - 1: 50,000 & 1:85,000.The map indicates the boundary with neighboring estates, smallholders, HCV, Riparian Zone etc. Map is clear with title, color coding, legend, source, scale and coordinates. No disputes on the maps/coordinates as such deemed to be accepted by community. Scoping SIA report does not indicate any dispute with community as well. Principle 3: Commitment to Long-Term Economic and Financial Viability Criterion by Audit Summary A documented business plan (10 years) available both at mill and estate. The annual budget includes of FFB yield/ha, OER, CPO yield/ha and cost of production. Seen the top management able to demonstrate attention to economic and financial viability through long-term management planning. Replanting programme for the estate is also available for estate with replanting activities. ASA The company has stablished 19 years projection plan titled Cash Flow Projection ( ) for Sabahmas POM. Sighted the 19 years management plan projection which includes FFB from Estate supplies, outside suppliers, CPO & PK production, extraction rate for CPO & PK, road maintenance, cost of production, etc. The projected annual plan is reviewed on annual basis. The latest review was done in year 2014 and next review is expected on 14 December In Sabahmas Estate, the company has established documented plan titled Revenue & Capital Expenditure of 5 Years Projection from year 2014 to 2018 for the Sabahmas Estate. The business management plan includes, mature upkeep, manuring, harvesting labour, FFB collection, transport, estate overheads (including HCV and riparian maintenance and management), land development, infrastructure, land clearing, etc. road/bridges, drains, soil conservation, planting material, etc. There is no scheme small holder under the estate hence there is no management plan for scheme holders. RSPOPC-SUM-REPORT.F01 (3.0) January 2016 Page 18 of 43

19 The management plan is being reviewed on annual basis. Last was reviewed done on 09/09/2016 by Group manager for Sabahmas Complex, Mr. Asrif. Following is the summary revenue and capital expenditure sighted: Immature (Ha) Mature (Ha) FFB (MT) 134, , ,000 Total revenue expenditure 31,774,166 32,165,500 31,551,000 Development expenditure 12,082,100 12,674,666 13,297,760 Total capital expenditure 3,762,980 1,100,500 1,973,500 Estate have document replanting program that is commenced in 2013 and the operations proposes to be phased out in 12 years at average development. The estate has established replanting programme for 12 years starting from year The replanting program titled Sabah Budget Replanting Programme has been documented by block numbers and hectors. Following are the summary sighted: Sabahmas Estates Ha Ha Ha The estate s replanting program is being reviewed once every year during annual budget planning as evident from the summary of Time Table for Budget Example on re-planting progress on Sabahmas 1, Block 31, 32, 36, 37, 47, 55, 58, 59, 66 & 69 in total Ha. Program sighted felling & chipping works started on Jan 2016, land preparation includes terracing, drainage, road maintenance etc. start on April Planting of oil palm commenced on May Principle 4: Use of Appropriate Best Practices by Growers and Millers Criterion by Audit Summary The mill and estate have a complete set of GAP, POD and SOP which is being strictly adhered to and continuously monitored. Soil fertility is being maintained in the fields and IPM is being implemented in all the estate. They use chemicals that are in accordance with the regulations. There is a comprehensive OSH policy and is being implemented throughout the all operating units. Improvement sighted in the identification and assessment with HIRARC. Trainings are being carried out as per the Annual Training Plan. ASA The company has established Safe Standard Operating Procedure (SSOP) for the mill operations. The SOP has been last revised by Mr. Alvin Justin on 09/05/2016. There are total of 27 SOPs applicable SSOPs for the mill operation namely loading area, sterilizer, Trashing, Press, Oil room, Kernel Plant, Engine room, Boiler, CPO/PK, WTP, POME, Contractor, Workshop, Laboratory, Confined space, SW, Land irrigation, recall, verification of gage, GHG Calculations, Mass balance, Traceability, Management record, Internal Audit, Management review, water catchment, fire alarm, grass cutter, store, fume hood, chemical handling and working at height. As for the Sabahmas Estate, the company has established Agriculture Manual & Standard Operating Procedure (SOP) to ensure good agriculture practises are applied in the plantation. There are 37 SOPs and master list for agriculture best RSPOPC-SUM-REPORT.F01 (3.0) January 2016 Page 19 of 43

20 practices oil palm plantations. The SOP under title Procedure Kerja Selamat Operasi on 02/01/2008 identifying all key activities and been regularly updated. SSOP are written in both English and Bahasa Malaysia so that it can be understood by all level of employees of the mill. Sighted the Masterlist of all SOP. Internal audit is carried out to ensure implementation of procedures. The purpose of the internal audit is to verify records and procedure against specific requirement and relevant standards requirements. SOP is kept and will be updated periodically. Internal Control Audit conducted on 08/09/2016 by Ms. Suzana Barahim (ESH officer in-charge) reviewed by Mr. Edrin Moses (Sr. Sustainability Manager) and finding sent to Grp Estate Manager Mr. Frederick Chock Choon Loi for corrective action to taken. Daily monitoring of procedure and quality is carry out by trained and qualified mill personnel to ensure all workers and machinery is in good order and according to the SOP. Sample of daily monitoring sighted such as number of manpower, machinery inspection such sterilization station check sheet, crane station check sheet, auto feeder check sheet, press station check sheet and etc. Quality monitoring includes of sampling of product and tested internally. Sighted Internal Control report conducted by ESH officer in-charge reviewed by Mr. Edrin Moses (Sr. Sustainability Manager) and the findings is sent to Mr. Lo Yee Hang (Grp. Mill Gen. Manager) for further reviewed and for any corrective action to be taken. SOP for third party FFB sourcing are available. The evidence is document with the titled name is Outside FFB Purchase Policies & Procedures Guidelines. There are 11 external suppliers supply FFB to the mill FFB received by the mill is recorded with the origin place, delivery note number, Code, PIC, MPOB License No., Area (ha), distance, Exp. Date, Location, date, time in & out, vehicle reg. number, driver details and weight (kg) For the estate operation, GAP documents manual covered all operations entitled Agricultural Manual & Standard Operating Procedure For Palm Oil sighted as follow: Development Survey, Assessment and Planting ng Oil Palm Nursery Practices Land clearing and preparation Establishment and maintenance of legume covers Oil Palm Planting and Supplying/Replacement on Upkeep and maintenance of Oil Palm Harvesting of Fresh Fruit Bunches Plant Protection Pest & Diseases Management Oil Palm to Oil Palm Replanting EFB Mulching Quantitative Agro-Management system(qams) Oil Palm Thinning Technique ASA There are adequate documented procedures established by the company for maintaining soil fertility for estate. Sabahmas estate applies company s Manual Agriculture and SSOPs which include soil fertility and all other activities related Oil Palm Plantation. The GAP starts based on the survey by Agronomist with recommendation for fertilizer application. Soil improvement plan includes in fertilizer recommendation based on soil and foliar sampling annually. The agronomist is under responsibility of Mr. Philip Ho from Eco Management Unit Sapi Plantation. Sighted Agronomist Report done on 19-20/04/2016 with Leaf Analysis results for year 2015/16 which considered satisfactory. In overall, the RSPOPC-SUM-REPORT.F01 (3.0) January 2016 Page 20 of 43

21 analysis results indicate an increase in foliar N, B, K and Mg within the samples blocks. Foliar Nitrogen and Boron level of the sample blocks are within ideal range. Estate maintains fertilizer application records. Sighted the fertilizer application records for Feb to Sept Sample as per below: Block HA Fertilizer Rate[KG] type NPK Kieserite Boron SOA MOP 2.00 Sighted the "Oil Palm Manuring Recommendations for 2015/16 ". Analysis and recommendation was carry out by EMU Management Unit Sapi Plantation. Sighted Agronomist Report dated on 18-20/4/2016 with recommendation for fertilizer application. Leaf Analysis results for year 2016 is considered satisfactory to high. Element monitored included of N improved while P and K declined slightly. Mg was slightly high. Sabahmas estate to provide empty fruit bunches (EFB) application master plan and programme to maintain good ground covers, a good spreading of the frond stacks on steeper slopes can also slowdown the speed of any surface rum-off. The document prepared by Mr. Ho Vun Phlip Ho (Senior Manager EMU), dated is Sighted nutrient recycling are available, based on recommendation from EMU (Eco Management Unit, include R&D Division) Department ASA Sabahmas Estate has established soil map in 2004 prepared by Mr. Leng Ka Yee from Agromac Sdn Bhd. The latest soil map available is updated on March 2010 with scale 1:25, 000.There are 10 different type of Soil in the estate recorded no presence of fragile and problematic soil in the estate. Slope Classification Topography Map is available dated 14/07/2012 done by GPSGIS Dept. from ECO Management Unit (EMU). Slope class maps are available (scale 1:50.000), include is 0-6 (flat-undulating), 6-12 (undulatingrolling), (hilly), (steep). There is no planted area in slope above 25 degrees. To reduce erosion, estate plants cover crop on slop areas. The topography map is not updated as there is no change in soil structures. The management only carried out spot spraying on large woodies and conserved as much ground vegetation as possible to protect the topsoil. Mitigation of soil erosion is done by planting of Mucuna Bracteata and Pueraria Javanica. Pruned fronds are staked along inter row to mitigate soil erosion and fertilizer wash off. Herbicides are not sprayed in this area. There is no peat soil identified for the estate. Road maintenance program for 2015/16 is available for all field areas and line sites. Sighted the progress of Road maintenance for Grading & compacting road program and filling pot hole, constructing & maintenance roadside drain. Sighted also the Payment of Work Order as evidence that road maintenance was carried out as per plan. Road maintenance records are available as sighted below: Budget (RM) As per todate (RM) New Road 3,518, , (August 2016) Road Grading 1,605, ,041, (August 2016) RSPOPC-SUM-REPORT.F01 (3.0) January 2016 Page 21 of 43

22 ASA Water management plan dated (latest document, Revision IV, WMP, Jan 2015) is available for the mill. The document included climate condition, table, climate elements records, processes and domestic water consumption, water quality, general water management, water reuse and recycling. Water is abstracted from Sg. Segama and treated in the mill (WTP).It is used for mill processing and for domestic used. The water is sent to SGS (M) Sdn Bhd Shah Alam Selangor D.E for analysis every quarterly. There are 13 effluent ponds available in the mill (2 mixing ponds, 4 anaerobic ponds, 2 aerobic ponds, 2 aeration ponds and 3 stabilization ponds) and the final effluent is sent to land application. Mill s final effluent discharges are monitored weekly basis. BOD analysis done for POME final discharge and findings are monitored through weekly analysis summaries which were plotted into graphs to study the trends. Water sampling is carried out by mill laboratory on monthly basis and water quality test are conducted by Multi-Serve Enterprise (based on National Water Quality for Malaysia). Analysis report is issued to Sabahmas POM PPB Oil Palms Sdn Bhd. Mill effluent monitoring quality are available as evidence in Effluent Water Sampling Sabahmas POM dated 07/08/2016 by Multi-Serve Enterprise, Beverly Hill Kota Kinabalu. The summary of upstream & downstream water sampling result is meeting normal condition for BOD, COD, TSS, AN, OG, ph and water temperature. All indicator results in this mill has compliance with the requirement license DOE. Mill water consumption is monitored on monthly basis. Sighted following water usage record for mill operation for year Month Water use (M3) FFB processed (MT) Litre / MT Jan Feb March April May June July August Average In Sabahmas Estate, water is abstracted from the river into catchment pond in the estate and pumped to WTP in the estate and treated before being supplied to workers quarters. The treated water analysis report was issued by SGS (M) Sdn Bhd Drinking Water: Date sampled :26/01/2016 Following is the test result sighted: Test Parameters MOH Standard Result ph Value Turbidity < Aluminium < Free Chlorine < Total-Coliform 100ml Absent E.Coli 100ml Absent RSPOPC-SUM-REPORT.F01 (3.0) January 2016 Page 22 of 43

23 The treated water was tested negative for E.Coli present. Gazette river bank is managed accordance to HCV management plan. There is no problem of water shortage in the estate occurred to date. Water management plan includes: Gazette river bank/water catchment pond Water for consumption ASA Sabahmas Estate have implemented of IPM plan. This is evident from document titled Estate Pest and Disease Monthly Detection Return (Divisional). The estate is not infected by any pests and rat attacked. There are barn owl located in the estate as precaution. Herbicide application records is seen only for circle spraying. The management only done spot spraying of large woodies and conserved as much ground vegetation as possible to protect the topsoil. Sabahmas Estate conduct IPM training for its employees who are involved in IPM. Sighted training records for sprayers dated on 07/06/2016 attended by 30 sprayers and conducted by Mr. Amaddza Dunggi (Sr. Asst.) ASA The Justification in SOP On The Use Of Agrochemicals established in 09/09/2009 updated for 2015/2016 is used for chemical handling. 28 types of Agrochemical used in the estate mentioning on justification of agrochemicals used and Register of chemical hazardous to health. Chemical Health Risk Assessment is available prepared on June 2016 by Mr. Hendry Wong Leh, Energy Consultant Kota Kinabalu Sabah.This report covers all operations in the e state where chemicals are used and is valid for 5 years. Use of pesticides are recorded in Sabahmas Estate. Sighted entry in the logbook for 2015/2016 as follow: Chemical AI (%) 2.4D Amine 2.4 dimethylamine Glyphosate Glyphosate isopropylamine Blazer 250 Triclopyr butotyl 32.1% Ellytech 20 MetsulMono furon Methyl Estate has initiative to minimize used of pesticides sighted from implementation of IPM. However, estate is not infected with any pest except with very little and rare rat attacks. Records on census of rat attack on palm in the estate stated it is less than 3%. For herbicides, estate was currently practicing only circle and spot sprays. It s to minimize the usage, quantity and reduce the risk. There is no evidence of prophylactic used in the estate. No class 1A chemical was used in this estate. The only pesticide use in the estate is D-Amine Class II. No class I herbicides use in the estate including Paraquat since Application of any chemical products in the estate is under controlled and only can be carried out by qualified workers which have attended certain training where only specialized person in handling the chemical will be in charged. The trainings on spraying, manuring, environment and safety awareness for workers is conducted on 05/04/2016 in estate office included with Chemicals Handling & MSDS/CSDS conducted by Mr. Edy Hannias ( Field Asst.). During site visit it was notice that pesticide are store in well ventilated building label and locked. A sump and bunds is built to prevent the pesticide from leaking into the monsoon drain. RSPOPC-SUM-REPORT.F01 (3.0) January 2016 Page 23 of 43

24 The liquid containers is kept at the bottom racks to prevent foul up with powder chemicals in case of leaking. Pesticide containers are triple rinse before disposal. During field visit, spraying was using the proper equipment and well maintained. All chemical activities are accordance to the company procedure and good agriculture practices. There is an inventory of chemicals and their containers that are used and kept in place at mill. Schedule Waste Inventory & Related Records is updated and checked every month prepared by Mr. Chong Ken Vui (Engineer) and reviewed by Mr. Alvin Justin (Sr.Mill Manager). Sighted disposal record Lagenda Bumi Mas Sdn Bhd, Tuaran Kota Kinabalu with Licence No: expired dated at 30/04/2017. Chemical used containers wastes are disposed in accordance DOE requirements. Mill conducts annual medical surveillance for workers who are exposed to hazardous chemicals. Records annual medical Surveilance is available indicated 16 workers attended the medical surveillance test dated 19/09/2016 until 20/09/2016 conducted by Dr. Rusli Bin Judda (Dosh Registered OHD HQ/08/DOC/00/122) from Klinik Ruslan Amin Jalan Teratai Lahad Datu Sabah. Medical surveillance carried out annually for those workers who handles chemicals, store keeper, workshop and etc. Mobile Audiometric Test is conducted by Dab Oh Sdn Bhd Sandakan Sabah dated 09/09/2016 by Dr. Koginneswary (License No: HQ/10/DOC/00/166). All mill workers undergo the test and all are fit to work. During site visit and interviewed with supervisor and spraying workers in the estate, there is no evidence women workers that pregnant or breast-feeding women involved in spraying works. Pregnant women are usually assigned to light work in the office area. Sighted Medical Removal Protection for Pn. Nurmiyati Bt. Nurdin dated 22/08/2016 and she was assigned to light work until delivery and after stop breast feeding. ASA The company has established occupational health & safety policy dated September 2010 signed by Group Plantation Head, Mr. Goh Ing Sing and Group CSR Head, Mr. Jeremy Goon. The policy has outlined its commitment to comply with legal requirements, implement and maintain health and safety management system, communicate to employees on OHS, promote health and safety awareness and periodically review the policy. The mill has conducted hazard identification, risk analysis and risk control measure for high risk activities. Latest HIRARC revised on 01/09/2016 prepared by Mr. Christ William, Mill Engineer being reviewed and approved by Mr. Alvin, Sr. Mill Manager. Master list record and Amendment Record sheet are available with the latest description is update to DOSH metric instead of NIOSH risk metric. HIRARC consist of hazard identification (type of work activity, hazard & effect), Risk analysis (Existing risk control, likelihood, severity & risk) & Risk Control HIRARC sample sighted such as Reception Station, Digester & Press Station, Laboratory, Boiler station and products dispatch. Estate s HIRARC is prepared by Mr. Asri Kadir (Asst. Manager), reviewed by the estate manager Mr. Fulgentius Bernard and approved by Group General Manager Mr. Asriff Mahmud dated 13/02/2016. HIRARC is consist of hazard identification (type of work activity, hazard & effect), Risk analysis (Existing risk control, likelihood, severity & risk) & Risk Control (Recommended control measures & PIC is Staff, Mandor or Executive). HIRARC sample sighted such as circle spraying, fertilizing, road maintenance etc. RSPOPC-SUM-REPORT.F01 (3.0) January 2016 Page 24 of 43

25 The mill OSH plan has been developed for 2016 identifying safety trainings. Mill workers are adequately trained on safety requirements as evident from following records of training sighted at mill: Osh and PPE Policy Training conducted on March 2016 Training on chemical handling conducted on April 2016 SOP training for Press station conducted on Oct 2016 Lock Out and Tag Out Training (LOTO) on June 2016 During site visit to the mill, noted that mill workers are wearing proper PPE such as safety boot, helmet, safety gloves, ear muffs, face masks, etc. Interviews held with workers during the site visit shows that safety wears are provided without any charges or deduction to workers and replaced when damaged at no cost. OSH training program identifying safety training for its workers. In addition to formal training, safety requirements are also being briefed regularly by Assistant and Supervisors to workers during Muster Ground. During field visit to the estate noted that workers are wearing proper PPE such as hard hat, safety gloves, respirators, apron, etc. Maps and inventory of amount fire extinguisher, hydrant, and first aid kit box are available. The document included for point assembly place, etc. The company has appointed Sr. Mill Manager, Mr. Alvin as chairman for the Mill s Safety and Health Committee and who is also person responsible for the implementation of OSH for the mill. Mill s OSH meeting is held once every 3 months. Sighted meeting minutes and attendance record held on 26/09/2016 attended by 15 committee members. Sighted minutes of previous safety committee meeting which was conducted on 03/03/2016 which was attended by all 14 committee members. Sighted Emergency procedure for POM. Emergency response plan included the emergency contact number and Guidelines on Accident and Emergency Procedures dated 23/09/2016 prepared by Mr. Asrani Abd. Muin (Mill clerk) reviewed by Mr. Chong Ken Vui (Mill Engineer) and approved by Mr. Alvin Justin (Sr. Mill manager). The emergency procedure has identified major potential emergencies such as Product Tampering/ Sabotage, Fire, Chemical Spillage, Vehicle Accident, Machinery breakdown, Water Shortage/no water & no water contamination and Power Failure. Training for first aid is done on 10/05/2016 attended by 10 persons and conduct by estate HA, Mr. Prababakaran. In the mill, accident is handled according to the national OSH department (JKKP) includes reporting of any accident case, investigation and calculation of LTA. Sighted Borang JKKP 8(1)/(IV) submitted to DOSH dated on 2/1/2016. However, there is no accident reported for the mill for last 3 years. In Sabahmas Estate, Borang JKKP 8(1)/(IV) submitted to DOSH dated on 30/11/2015 reported of no accident occurred in estate operation. ASA Mill management have planned and conducted various training in year The training has been planned included of RSPO P&C training, RSPO SCC training, ISCC traceability & GHG training, GMP, Food Safety training, EMS awareness, chemical handling training (MSDS), SSOP training, PPE training, etc. Sighted training record, attendance and signature for every training that has been plan by Mill Manager. Every workers have data training and keep very well by mill management. Sighted training record for following workers. RSPOPC-SUM-REPORT.F01 (3.0) January 2016 Page 25 of 43

26 Mr. Junaidah Laai Lab Operator) have done 6 training for year 2015/16 among others are RSPO and sustainability policy briefing on 12/6/2016 and RSPO Awareness, safety and health, social and environment and ERP refreshment on 06/09/2016 The estate maintains training record for each worker. Sighted training record for following workers. Pn.Norsia Kasih Zuraidah (Manurer) have done 6 training for year 2015/2016 such as Fire Aid Training dated 9-10/5/2016, Spraying and Manuring SOP training on 25/2/2016, Harvesting SOP training on 25/2/2016 Principle 5: Environmental Responsibility and Conservation of Natural Resources and Biodiversity Criterion by Audit Environmental Impact Assessment has been carried out by the mill and estate. A comprehensive identification of all waste has been recorded and disposal of Summary scheduled waste has been carried out by an approved and registered collector. Monitoring and analysis of waste is carried out regularly. The company is in full compliance to Principal 5. ASA Environmental aspect and impact been developed as described in the doc. No SMPOM/EA-IDE/EVA/REV.VII,2016 first generated in year The document was continue to update and latest updated was on 20/09/2016. The document was prepared by Mr. Chong Ken Vui (Mill Engineer) and approved by Mr. Alvin Justin (Sr. Mill Manager). There are 29 area (reference) been identified and amongst others are; Boiler Gen-set Sterilizer station Press Station Oil room Kernel plant Threshing system Storage of CPO Workshop Raw water treatment Sewage & effluent pond FFB Reception Construction of bio gas facility Greenhouse gas emission There are 5 Years Environmental Plan available in place. The plan prepared by Mill Engineer (Mr. Chong Ken Vui) and approved by Sr. Mill Manager (Mr. Salvin Justin) latest updated 08/02/2016. The plan is keep updated whenever there are changes. Meanwhile for estates, Environmental Impact Assessment report dated August 2012 done by Independent Consultant Ekohandal Sdn Bhd registered with EPD Sabah is available. The assessment which was done for 10, ha of Sabahmas Estate covering 3 managing (operating) unit consisted of Sabahmas 5 for 3, ha, Sabahmas 6 for 3, ha and Sabahmas 7 for 3, ha. The EIA study has identified major impacts to environment such as soil erosion and water deterioration, biomass disposal, fertilizer and chemical applications, land and water contamination from hazardous materials, ecological disturbance and human settlement disturbance. RSPOPC-SUM-REPORT.F01 (3.0) January 2016 Page 26 of 43

27 Mitigation measures were recommended in chapter 5 of the EIA report covering major impacts of the operations. The monitoring report was done quarterly by the same consultant (Ekohandal) conducted by En. Nazri Okoi as sighted reports dated Jan, Mei and Sep 2016 respectively entitled Proposed Replanting of Oil Palm Plantation At Sabahmas Estate, Lahad Datu, Sabah. Sighted letter dated 05/02/2013 from Jabatan Perhutanan Sabah on exemption of 50m buffer classified as special case. This exempted included in the EIA report by Ekohandal Sdn Bhd. ASA HCV Assessment available as details in the combined report title Scoping HCV Assessment of Sabahmas & Sapi Estate, Sabah. The HCV assessment was done covering three unit, Estate 1, 2 and 3. The HCV Assessment prepared by Mr. Sanath Kumaran, an independent registered consultant from Envirologic Consulting in year Sighted in item 5.0 Minit Mesyuarat Stakeholder On 15/05/15 Riparian Zone Protection. Bufferzone for HCV area was created and riparian reserved provided with signage. Monitoring HCV for Sabahmas Estate available as recorded in the Borang Monitoring HCV Sabah/Sabahmas Estate. Sighted monitoring done by appointed personnel: HCV PIC staff patrolling; Mr. Crayl Bangud on 29/09/16 found macque and proboscis monkey HCV PIC staff patrolling; Mr. Crayl Bangud and Willian Paten on 28/09/16 found macque, buffalo, pig tail macque, samba deer and proboscis monkey. The HCV/RTE monitoring conducted every month. Sighted Minit Mesyuarat Stakeholder dated 10/08/16 in Item 2 explained on environmental policy and iterate the illegal hunter in HCV area inside Sabahmas Estate. Twenty seven persons were participate in the meeting and the attendance list sighted. Critically endangered species, Class 1 as per Sabah Wildlife Conversation enactment 1997 detected were banteng, proboscis monkey and orang utan. ASA Mill has identified and documented all types of waste that generated from its operation. List of waste registry recorded and identified in the Doc. No. SMPOM/PPP/REV. 6, 2016 entitle Waste Management and Disposal Plan 2016, Waste and Pollution - Identification, Mitigation/Prevention and Improvement Plan. The list registered among others are empty fruit bunches, palm kernel shell, bunch ash, decanter cake, waste water, POME sludge, petrol, oil & lubricant, schedule waste, metal waste, used oil & grease and used batteries. The waste management plan has identified waste product, sources waste, sources of pollution, plan to reduce pollution, target, and person responsible. All schedule wastes are disposed following the EQA 1974 Regulation, Sighted Jadual Pematuhan Lesen (JPKKS/12/003469) from JAS, Sabah with validity from 30/06/2016 to 30/06/2017. In estate, inventory of scrap iron recorded by Madam Darawisa and will sell through Regional Office PPB Sandakan. Clinical waste are collected and dispose assisted by Hospital Lahad Datu. All chemicals and container are well kept in the store with proper signage. All inventory of schedule waste are recorded in the system call eswis (schedule V). RSPOPC-SUM-REPORT.F01 (3.0) January 2016 Page 27 of 43

28 Sighted Summary report of inventory for end Sep Empty container will bee disposed by qualified collectors as sighted on record dated 06/06/2016 where 710 kg tripled rinse container disposed to licensed contractor, NewGates Industries with license no. G and record dated 26/09/16, 300 kg tripled rinse container disposed to licensed contractor, KS Plastic Collection Centre with license no. G ASA Matrix Table of Diesel Consumption-2016 is available in Environment Management Program & Action Plan Year Main consumption of diesel is for generator used in mill operation, follow by vehicles (such as shovel and cars) and machineries. Sighted record of usage for Jan to Aug 2016 with the average consumption ratio of 2.89 litre/ffb. This ratio did not meets the established baseline value to reduce diesel consumption to 1.6 litre/ffb for year This is due to low crop (re-planting) production whereby the same usage of diesel are consumed. The target will be reviewed again by the Mill Engineer, Mr. Chong Ken Vui. There is plan on efficiency use of fossil fuel and optimize renewable energy for year Plan to reduce and improve of fossil fuel usage is by regular checking of vehicles according to the hours usage and minimise the usage of the engine hours. Monthly Record of Aug 2016 sighted as below: Operations Fuel usage (litres) Percentage of usage Genset % Vehicle % Machineries % Total % Monthly Record of Aug 2016 sighted as below: Month Fuel usage Litre/MTFFB (litres) Sabahmas Sabahmas Sabahmas The target for Sabahmas 1 and 2 estate will be continuously revised as per current trend due to the re-planting activities been carried out. ASA Environmental policy has been established as updated on September 2010 signed by Mr. Goh Ing Sing (Group Plantation Head) and Mr. Jeremy Goon (Group CSR Head). The environmental policy stated the practices of zeroburning as in Point 3 Practice of Zero Burning in all plantation development activities and waste disposal, except in specific situation. All land clearing activities for replanting is done as per SOP/Chapter 3-Land Clearing and Preparation/Point 4.0 Green Stacking (Zero Burn). There is no evidence of fire used for replanting has been sighted during field visit. ASA Identification of all pollution are available in Waste Management and Disposal Plan The plan described and identified in details the waste and polluting activities. Improvement plan is constructed to reduce polluting and waste in document entitled in Waste & Pollution Identification, Prevention, Mitigation and Improvement Plan. RSPOPC-SUM-REPORT.F01 (3.0) January 2016 Page 28 of 43

29 The company monitors GHG emission derived from the mill and its supply base activities. The Mill Engineer is responsible to compile all the relevant GHG data and information for GHG calculation data sheet. The production unit did monitor all significant pollutants and emissions from estate and mill operation using Palm GHG Summary Report. The calculator has been submitted to RSPO GHG Working Committee on 26-Sep by Ms. Foo Siew Theng (Certification Manager). Overall emission summary is tabulated as below: Final Emissions Value Per Product tco2e/t product CPO 0.58 PK 0.58 Overall Emissions Summary Own Crop Group Outgower Total field emissions (tco2e) Total mill emissions (tco2e) Principle 6: Responsible Consideration of Employees and of Individuals and Communities by Growers and Millers Criterion by Audit The mill and estate have conducted the social impact assessment. The relevant policies are in place and are fully implemented across the board. Summary Communication and consultation as well complaints and grievances procedure are well communicated and adhered to. There are evidences of workers not been discriminated against in any way and all are being paid their fair wages. ASA SIA has been conducted in Sabahmas complex as a whole by external assessor, Petra Meekers. Sighted Final Report of Social Impact Scoping Assessment for 3 Existing Operations at PPB Oil Palms Berhad SIA framework for Sabahmas, Sapi And Reka Halus Estate date of final version on 31/05/2008. SIA conducted has identified and took into account the affected stakeholders as follow: 11 FFB suppliers (smaller estate holders) 5 FFB transporters 1 EFB transporter 1 building contractor 1 civil contractor 1 villages 27 external stakeholders involving police, clinics, school, fire department, government department 1 refinery Workers During scoping assessment, social processes and factors that can have effect on impacts have been identified. This is to correlate with social impacts of existing operation and affected parties. The data collection is based on informants interviews, participants observation, stakeholders consultation and other direct data collection. In order to construct a framework of SIA, assessor take consideration of the following condition and past trends RSPOPC-SUM-REPORT.F01 (3.0) January 2016 Page 29 of 43

30 associated with human environment as shown below: Relationship among communities Patterns of resources use Power and authority Age Ethnicity Vulnerable group Culture and attitude Mill has developed management plan in order to mitigate effect in social issues based on recommendation made by assessor. Sighted Sabahmas POM SIA Management Plan 2016 prepared by Mr. Chong Ken Vui (Mill engineer) and Sabahmas Plantation SIA Management Action Plan Document No: RSPO C6.1/ISCC dated 27/09/2016 reviewed by Mr. Alvin Justin (Sr. Mill Manager). SIA management has considered following issues in management plan: Stakeholder engagement Facilities & safety Accommodation Women right Workers right Policy & education Each of the criteria has appointed PIC, mitigation plan, recommendation, and timeline of completion. While in estate, SIA management action plan document no: RSPO C6.1/ISCC date of review 28/07/2016 is tabulated based on recommendation outlined by assessor. The management plan is reviewed once in every 2 year to highlighted any changes occurred and to determine significant effect among affected stakeholders. Review is done by Mdm. Suzana Barahim (EHS Executive) on 28/07/2016 and approved by Mr. Asrif Mahmud (Group Manager). The management plan has done review on: Stakeholder engagement (estate cross boundary) Crèche building Minimum wage Pay slip Housing area Genset Water supply Surau building ASA Company has established procedure for communication entitle Consultation And Communication Procedure Document No RSPO 6.2 Revision No 3 dated 02/12/2014. SOP has detailed the procedures for handling internal communications and external communications. Consultation with stakeholder is done annually combining with Sabahmas POM and Sabahmas Estate. Last stakeholder consultation is done on 06/09/2016 attended by 27 participants. Sighted minute of meeting prepared by Mdm. Asrianie Abd Muin (Clerk). There are a few issues highlighted by stakeholders as follow: 1. There is workers from Sabahmas estate and Permai estate used passageway at boundary separating both compound. Permai Estate manager claimed that there are cases of trespassing and cross boundary occurred by both estate workers. Estate management, Mr. Justin Francis will take action to ensure that RSPOPC-SUM-REPORT.F01 (3.0) January 2016 Page 30 of 43

31 workers of Sabahmas estate is compulsory to have approval or leave letter when they went outing. He also highlighted that this issue inquire the cooperation from both management to mitigate this problem. 2. Mr. Silvester (Kg. Sri Putatan Head village) claimed that transporter of fertilizer and diesel passing by road village is in fast mode. Estate management will ensure that driver of transportation will abide to road speed limit. Issues highlighted during consultation is taken immediate action by management. Sr. Mill Manager Mr. Alvin Justin is responsible to handle consultation regarding to POM and Mr. Justin Francis (Sabahmas 1), Mr. Fulgentius Bernard (Sabahmas 2) and Mr. Henry Jubair (Sabahmas 3) are appointed as PIC to handle consultation issues in Sabahmas Estate. ASA Management has develop procedure as a system to deal with dispute and grievance if any occur. Sighted SOP entitled Dispute & Grievances Procedure PPB/RSPO 6.3 (2.2)/(1) date of original issue: 22/08/13 prepared by Mr. Edrin Moss (Sustainability Manager) dated 16/11/2009 approved by Mr. Simon Siburat (Sustainability Coordinator) dated 16/11/2009. SOP stated that manager is responsible to receive all external complaints from employee, local communities and other affected and interested external parties. Besides, under Wilmar group policy, protection of anonymity is outline in Whistle Blowing Policy Version 3: 05/08/2015. ASA Identification of legal and customary rights procedure is established and maintained in place. Sighted procedure entitled Process For Identification Of Legal And Customary Rights And Identifying People Entitled For Compensation prepared by Mr. Simon Siburat revision date: 30/07/2009 version: 1.0 with any changes will be approved by Plantation Head/General Manager. Confidentiality is applied only for internal. In SOP, it is clearly stated the establishment of people entitlement for compensation. Those whom are liable for compensation will follow the establishment outline by company. ASA Workers are employed on 2 years contractual basis. Individual contract is prepared in Malay and explained, will later be signed by both employee and company management. Contract indicating pay and conditions of each employee is available. The contract found to be in compliance with The Minimum Wages Order Monthly pay slips are also available for all workers. The list of active employee is updated monthly by mill clerk. Sighted the updated employment list dated 20/09/2016 prepared by Ms. Sarinah Palalloi (Clerk) stated the employment of 22 males and 11 female of local people and 58 male and 5 female of foreign worker. General worker (Indonesian) Employed as General worker (FFB Loader) Contract of employment signed on 01/01/2016 valid until 01/01/2018 for 2 year basis Salary per day RM on contract. Pay slip August 16 RM working days x = RM , overtime RM59.70, Working during off day = RM70.76 General worker (Indonesian) Employed as General worker (FFB Loader) Contract of employment signed on 01/01/2015 valid until 01/01/2017 for 2 year basis Salary per day RM on contract. Pay slip August 16 RM working days x = RM990.64, overtime RM371.51, Working RSPOPC-SUM-REPORT.F01 (3.0) January 2016 Page 31 of 43

32 during off day = RM As per Workers Minimum Standards of Housing and Amenities Act 1990 and as well as per MAPA/NUPW ESTATE Employees Agreement, house units are provided by mill and estate in order to accommodate the workers. Every house units is equipped with 2 bedrooms where 1 family will get 1 house unit and single workers will be sharing among 3 or 4 workers per unit. Inspection of housing area is done weekly by Mr. Jusli Thomas (electrician) at housing area. Water supply from Sg. Segama is being treated at mill before supplying to housing area for domestic use. Electrical supplied is from steam turbines and genset. Electrical is supplied limited until 11 p.m. at housing area. All utilities provided are free of charge. Workers seek for medical treatment will go to Klinik Estate Sabahmas while for major injured, workers will be referred first to estate clinic for primary treatment before transfer to nearby hospital which is Hospital Lahad Datu. HUMANA and crèche managed by estate management is provided at each housing complex. During interviewed at site visit, workers acknowledged that the above mentioned facilities are provided to them by the management. There are 4 grocery shops available at workers quarter. This is more convenience for workers to purchase their house necessities. Besides, nearest town that can be access is Lahad Datu town where workers can travel there using their own transportation. ASA Company has established policy recognise the freedom of association to the workers. In Wilmar Human Right Policy, it is clearly stated the labour rights where freedom of association is implied. Besides, in No Deforestation, No Peat, No Exploitation Policy dated 05/12/2013, under respect and recognize the rights of all workers including contract, temporary and migrant workers, for employment contract, the company and suppliers/sub con will respect the rights of personnel to form and join trade union. Local or foreign workers are given the freedom which it is an optional for them to join worker union formed in mill or estate. Thus, their freedom are not restrict by mill or estate management. However, trade union is not common in Sabah region. Thus there is no union formed. ASA Wilmar international has established Child Labour Policy updated on September 2010 sign by Mr. Goh Ing Sing (Group Plantation Head) and Mr. Jeremy Goon (Group CSR Head) which defined the prohibition of child labour. Policy stated that not employment of child is allow as stipulated by ILO convention. The list of active employee updated monthly by mill and estate clerk shows that no underage workers are employed in mill and estate operational activities. Visit to POM and interview with employee indicated that they are aware of minimum 18 years old policy imposed. ASA Wilmar international has established Equal Opportunity Policy dated September 2010 signed by Mr. Goh Ing Sing (Group Plantation Head) and Mr. Jeremy Goon (Group CSR Head). This policy stated that company support the principle of fairness and nondiscrimination and aim to treat individuals with dignity and respect, free from unlawful and unethical discrimination. Under Policy Of Equal Opportunity, policy stated that company will comply with all legislation dealing with discrimination and promotion of equality and RSPOPC-SUM-REPORT.F01 (3.0) January 2016 Page 32 of 43

33 other applicable requirements. Policy mechanism outlines the guidance and reference for hiring process will be conducted based on: Vacancy advertising Recruitment selection Training, career development and conditions of service Personnel records Implementation of policy was further verified on interview with sprayer gang whom stated that there is no discrimination practised by the management and all employees are treated equally. ASA Wilmar international has established Sexual Harassment, Violence And Abuse, Reproductive Rights Policy updated June 2014 which defined excessively the sexual harassment issue related to women committee. Besides, company has established the specific mechanism applied for complaint specifically to protect women right. Procedure entitled Sexual Harassment Complaint/Investigation Procedure Document No: PPB/HR/(00)/2205, prepared by Ms. Nelly Hinjiang (Asst. Manager-Sustainability) reviewed by Mr. Ricky Godwin (Manager- Sustainability) and approved by Mr. Edrin Moss (Sr. Manager-Sustainability) dated 22/05/2015. The procedure outlined resolution procedures to handle complaint and confidentiality term where all inquiries, complaints and investigations are treated confidentially. Women and child committee organisation is formed lead by Chairman, Mdm. Noraenie Aripuddin and assisted by appointed committee members. The committee conduct meeting once every 4 month. Sighted last minute meeting dated 15/07/2016 prepared by Mdm. Asrianie Abd Muin. The meeting was attended by 15 members. Meeting agenda briefed about: Sexual harassment Domestic violence Reproductive right Crèche Child health Grievance and complaint The reproductive rights policy is briefed during women gender committee meeting which done on quarterly basis. Besides, the policy is also communicated via briefing of company and RSPO related policy conducted among workforce. Sighted records of Sabahmas POM Taklimat Mengenai Polisi Syarikat Dan Polisi dated 26/09/2016 given by Mr. Christ William and Mr. Chong Ken Vui. ASA There is a policy established entitled Outside FFB Purchase: Policies & Procedures in order to deal with outside FFB supplier. Policy stated the guidelines for dealing business deal with FFB supplier. The price of FFB is determine on monthly basis where monthly prices are pegged to monthly MPOB average CPO and PK prices. Prices is publicly displayed at weighbridge. The price reference, pricing formula, OER, KER offered, price determination is stated in order to nurture understanding among outside FFB suppliers. Mill done business deal with CPO and PK transporter and kept maintaining the agreement contact signed by both parties. Sighted Contract no: SMPOM/CPO- TA/001/2016/sb agreement between Sabahmas Plantation Sdn Bhd (Sabahmas POM) and Sri Sabmal Transport Sdn Bhd dated 29/01/2016. Payment record is maintained and kept available as sighted Tax invoice no: I from Sri Sabmal Transport sdn bhd dated 21/08/2016. RSPOPC-SUM-REPORT.F01 (3.0) January 2016 Page 33 of 43

34 ASA Wilmar international has established CSR policy updated September 2010 sign by Mr Goh Ing Sing (Group Plantation Head) and Mr Jeremy Goon (Group SCR Head) that recognize the corporate social responsibility to the local development. Mill has taken initiative to contribute in local community development by doing corporate social responsibility. Sighted the contribution done by mill management as follow: Donation for 2016 annual sport events SK Permai, RM dated 24/03/2016. Sighted record of donation done by estate as follow: Donation to SK Permai sport carnival dated 12/04/2016. Refreshments support to Lahad Datu sport carnival 12/04/2016. Donation to HUMANA 25/05/2016. VIP gift for Hari Raya celebration dated 31/08/2016. ASA Company has established the policy entitled No Deforestation, No Peat, and No Exploitation Policy dated 05/12/2013. The policy clearly stated that the company and its supplier/sub-contractors shall no knowingly use or promote the use of forced or bonded labour or human trafficking and shall take appropriate measures to prevent the use of such labour in connection with their activities. Employee is ensuring to have legal and valid document prior working. There is no evidence of contract substitution is practiced by the company as workers signs employment contracts directly with company for 2 years on voluntary basis. Under Equal Opportunity Policy dated September 2010 signed by Mr. Goh Ing Sing (Group Plantation Head) and Mr. Jeremy Goon (Group CSR Head), policy mechanism aims not to discriminate on gender, race or ethnic origin, disability, sexual orientation, age or faith, but to build a global and capable workforce that is based on meritocracy. Employment contract and legal identification of workers in mill and estate operation is maintained and keep available by management. ASA Wilmar international has outlined the Human Right Policy where Wilmar adheres to international human rights principles and complies with local applicable laws. The Human Right Policy is updated on June 2014 approved by Mr Goh Ing Sing (Group Plantation Head) and Mr Jeremy Goon (Group CSR Head) Besides policy of company is also enforce among workers. This is done during daily muster to workers of day shift and night shift. Sighted the summary of daily muster recorded in Buku Laporan Taklimat. Sighted the last record of muster done dated 04/10/2016 among Shift B workers given by mandore. In Sabahmas Estate, to enforce human right policy among workforce, post arrival training is conducted to new workers upon employment. Sighted training record, Induksi Pekerja Baru 2015 where the training briefed about Company policy Environmental issues Complaint mechanism RSPOPC-SUM-REPORT.F01 (3.0) January 2016 Page 34 of 43

35 The training has been attended by 33 new workers given by Mdm. Suzana Barahim (EHS Executive).Policy is sighted displayed at mill and estate office board and socialized to workers during morning muster. For the mill and estate employees children, management has set up HUMANA facility. HUMANA is constructed in the estate area and transportation is provided to children going there from workers quarters. School is well maintained by the estate management. The facility was new painted with nice landscaping. Principle 7: Responsible Development of New Plantings Criterion by There is neither evidence of new land opening nor extension of existing land in Summary Audit Sabahmas Complex. ASA There is no new planting or operations, or expanding existing ones. ASA There is no new land surveyed for the growing of oil palm. However, there are sufficient SOPs available for the soil and land type that being implemented. ASA There were no forest areas converted since November ASA The estates have no peat. The major soil type identified as either silting clay or sandy clay. ASA Since there is no new planting, therefore any legal, customary use rights concerns. ASA No Customary and legal rights identified. The company has a procedure to identify the people who may be entitled to receive compensation and also maintains records and details of any negotiations with details of any compensation or settlements made. ASA The company has a zero burning policy for preparing land for planting and has a procedure in place to respond to land burning on neighbouring properties. ASA There is no new planting or operations, or expanding existing ones. Principle 8: Commitment to Continuous Improvement in Key Areas of Activity Criterion by Audit Summary There are many improvement programs as mentioned in respective principles published in their annual company presentation. Both mill and estates has sufficient records and documents to justify the achievements. ASA There are sufficient documents made available for continuous improvement. This mill is certified for ISCC, RSPO and the monitoring tools and mechanism are well documented. Among the continual improvements sighted for 2016 includes: To achieve minimum OER of % monthly and KER of 6.20% for As of August 2016 OER achieved is 21.34% and KER of 6.38 % only for 2 month the OER is less than the minimum KER 5.2%, monthly only for 2 month the OER is less than the minimum To improve the PK quality in term of stone content. To achieve BOD content in final discharge below than 100 ppm still in progress latest was 110 ppm in July. To improve the mill compound & Linesite cleanliness and upkeep. The estate has established Continuous Improvement Plan (CIP) for the based criteria set in out in the RSPO P&C. Below is sample list of CIP sighted for year There is PIC assigned for execution of each of the activity identified in the plan. Among the continual improvement established are: Minimize use of pesticides planting of beneficial plants Social consultation with external stakeholders OHS Improve and addition of road signage RSPOPC-SUM-REPORT.F01 (3.0) January 2016 Page 35 of 43

36 GHG reduction regular maintenance of vehicles and reduced diesel consumption Non-conformity Raised During this Audit and Any from the Previous Year, if applicable This section gives an over view of new or revised non-conformities raised during this audit and of action taken to close out non-conformities raised during the previous audits, if applicable If a minor-non-conformity raised at the last audit, is not closed out, then this will be raised to Major status and the company given 60 days to close this out. The NC number is comprised of 2 parts to include the year in which the NC was raised as well as a sequential number Non-Conformities Identified during this Audit There is no non-conformity raised during this audit Non-Conformity Identified during the last ASA, not applicable for MA There is no non-conformity raised during last audit Observations Raised During this Audit There is no observation raised during this audit 4.4 Issues that were raised during the Stakeholder Consultation, if any Stakeholders were either informed by the client or by Control Union via the RSPO website. For Main Assessments, a 30 days Stakeholder consultation announcement is published on the RSPO website prior to the audit. The same announcement is circulated by the client prior to the audit For subsequent Annual Assessments, it is based on stakeholders reading the approved public summary reports available on the RSPO website, the client s procedures in receiving on-going feedback or if feedback was sent directly to Control Union prior to an audit or thorough RSPO complaints procedures. During each assessment, the audit team will review the company s implemented procedures in receiving feedback and will execute field visits and interviews. Not limited to the following questions, any feedback received is reviewed and summarized in this summary report for either Part 2 Partial Certification or Part 4 Assessment Findings above or noted below, if applicable: 1. Do you have any remarks on the RSPO standard? 2. What is your relation with the applicant? 3. Are there any plantation or mill management practices that affect you? 4. Do you consider any management is in conflict with the RSPO principles and criteria? 5. Do you have any suggestions for management? 6. Are you aware of any HCV in the plantations or in adjacent land? 7. Are you aware of any endangered or rare species? 8. Are there any adverse (or positive) effects on local communities? 9. Additional comments? 11. Do you have any comments about the assessment team and would you like to meet with them? 12. Do you have any comments for the client s management of any other plantations? Subject raised FFB Loader (Sabahmas POM) 1.positive feedback Have a good understanding of complaint & grievance mechanism. Sprayer Gang (Sabahmas Estate) 1.positive feedback Socialization regarding with new Company response and proposed action to be taken The company maintain a cordial relationship with the labor union. All workers had fully understood the mechanism of complaints. The company has conducted socialization on Minimun wages to all workers. Audit team findings Positive finding Positive finding RSPOPC-SUM-REPORT.F01 (3.0) January 2016 Page 36 of 43

37 wages is given by company for First aid for work accident in the field workers awareness is handled by the mandore. Mandore are provided with first aid kit at working site and are given first aid training In this stakeholder consultation, 6 persons were presented which came from mill workers and sprayer gang of Sabahmas Complex with attendance list attached. In overall, there are lots of positive issues highlighted by the stakeholders. PART 5: RSPO SUPPLY CHAIN CERTIFICATION The palm mill mentioned in the scope of the audit was audited against the requirements of the following: RSPO Supply Chain Certification Systems. November 2014 RSPO Supply Chain Certification Standard. November POM Included In The Scope Of The Audit Name Palm Oil Mill Mill Capacity Location Supply Chain Model (POM) MT/Hour Address (IP or SG or MB) Sabahmas Palm Oil Mill 40 KM22, Jalan Sri Putatan, Off Jalan Dam, Lahad Datu Sabah, Malaysia. 5.2 Confirmation Of The Company s Summary Of Annual Certified Volume Of RSPO Certified Palm Oil And Palm Kernel Over A Specified Period Product CU Code CPO (MT) PK (MT) Specified 12 month period POM 1 32,340 7,365 Projection volumes between September 2016 to August Summary Report Including A Brief Description Of The Scope Of Certification The palm oil mill sources FFB [all certified] being processes to produce RSPO CPO and RSPO PK through the IP module. Actual quantities of FFB delivered to the mill are entered into weighbridge system and the actual quantities of CPO and PK produced are also entered and the OER is known. The quantities of certified CPO and PK are shown in real time and summarized each day on a spreadsheet. A full RSPO SCCS certification audit was used during this annual assessment and the findings support the certification based on supply chain model listed above. MB 5.4 Monthly Records of Certified and Uncertified FFB Received Since the Last Audit This is an Annual Surveillance Assessment, the figures used are since the last audit. No MONTH-YEAR Certified Supply Bases (MT) Uncertified Supply Bases (MT), if any Total (MT) 1 September , , , October , , , November , , , December , , , January , , , February , , , March , , , April , , , May , , , June , , , July , , , Aug , , , TOTAL 159, , , RSPOPC-SUM-REPORT.F01 (3.0) January 2016 Page 37 of 43

38 5.5 Monthly Records of Certified FFB, CPO and PK Since the Last Audit If this is the 1 st Main Assessment, the figures used are from the last 12 months. If this is an Annual Surveillance Assessment, the figures used are since the last audit. No MONTH-YEAR Certified CPO (MT) Certified PK (MT) 1 September , October , November , December , January , February , March , April , May , June , July , Aug , TOTAL Records of Certified CPO & PK Sold under GreenPlam to Buyers since the Last Audit, if Any If this is the 1 st Main Assessment, the figures used are from the last 12 months. If this is an Annual Surveillance Assessment, the figures used are since the last audit. The transactions were sighted form the clients registered GreenPlam Account. Certified CPO No Buyers Name GreenPalm Trading No (MT) Sold RSPOPC-SUM-REPORT.F01 (3.0) January 2016 Page 38 of 43 Certified PK (MT) Sold 1 Not available Nil Nil Nil 5.7 Records of Certified CPO & PK Sold under UTZ etrace to Buyers since the Last Audit, if Any This is an Annual Surveillance Assessment, the figures used are since the last audit. The transactions were sighted form the clients registered UTZ etrace Account. Certified CPO Certified PK No Buyers Name UTZ etrace Trading No (MT) Sold (MT) Sold 1 Lahad Datu Edible Oils Sdn Bhd RSPO_PO , , Non-Conformities Identified during this Audit Timeline for compliance: 1. All non-conformances observed during an audit shall be classified as major since all requirements for Supply Chain certification have to be met before granting certification. 2. For Main Assessments, all non-conformances shall be addressed satisfactorily by the operation before certification may be granted by the certification body. If non-conformances are not addressed within three (3) months of the audit, a full re-audit shall be required. The certification body shall assess the effectiveness of the corrective and/or preventive actions taken before closing out the non-conformances. 3. For Annual Surveillance Assessments, non-conformances raised after the certification are serious (i.e. must be considered as a major) and the integrity of the RSPO Supply Chain Certification is at risk. A maximum of one month is to be given to the certified client to satisfactorily address the non-conformance. The certification body shall assess the effectiveness of the corrective and/or or preventive actions taken. Should the nonconformance not be addressed within the one-month maximum timeframe, a suspension or withdrawal of the certificate and a full re-audit may be necessary. 4. If no non-conformances are observed at an audit or when the corrective action plan has satisfactorily addressed raised non-conformance(s), the client shall be recommended for (re-) certification. Non-were raised during this audit.

39 5.9 Description of the Organizational Management Systems Including organizations, management and operational systems to ensure compliance with the RSPO Supply Chain Certification Systems and Standards as detailed above The management continually improving the established RSPO Supply Chain standards since the main assessment. As part of continuous improvement, many trainings being planned in the mill. ETrace data management is managed by HQ. Organizational structure of the sustainability management system has been established. The mill manager, who acts in the capacity of top management in the sustainability management system, is responsible for decision making in the management system implementation and shall commit towards the development, improvement and implementation of the management system Final Certification decision by Control Union for the RSPO SCCS Audit of the POM Recommendations made: Yes Summary of noncompliances: N/A Certification status of client: The POM included in the scope of this audit demonstrated full compliance with the RSPO SCCS. With effect from the certification date given in the RSPOPC certificate, this POM mentioned in the scope of this report is considered to be certified in accordance with the RSPO SCCS. RSPOPC-SUM-REPORT.F01 (3.0) January 2016 Page 39 of 43

40 PART 6: CERTIFIED ORGANISATION S ACKNOWLEDGEMENT OF INTERNAL RESPONSIBILITY 6.1 Date of next ASA The provisional date for the next ASA is: 6.2 Date for Closure of Non-Conformities See sections above for details of NC s, if any All major NCs to be closed by: All minor NCs to be closed by: September 2017 (ASA4) Not applicable Not applicable 6.3 Signing by the Client I the undersigned, being the most senior relevant management representative of the operation seeking or holding certification, agree with the contents and audit findings as presented in this document. I also confirm: Acceptance of liability in execution of the instructions given. That this company was made aware that the findings of the audit team are tentative; pending review and decision making by the duly designated representatives of Control Union Certifications. That during the closing meeting all agenda items was covered by the Lead Auditor. Acknowledged by: Name: Edrin Moss Position: Senior Manager Date: 15/11/2016 Signature 6.4 Signing by the Lead Auditor I the undersigned, being the Lead Auditor, confirm that this report is an accurate record of the findings and of the closing meeting. I further confirm that the summary of the findings as presented in this report are a true representation of the actual findings of the audit team. Acknowledged by: Name: Muhd Jamalul Arif Position: Lead Auditor Date: 24 October 2016 Signature 6.5 Signing by the Certifier I the undersigned, being the Certifier, confirm that the information and conclusions included in this report have been prepared in good faith and that the certification decision has been based upon this information. Acknowledged by: Name: Muhammad Haris Abdulllah Position: Certifier Date: 21/12/2016 Signature RSPOPC-SUM-REPORT.F01 (3.0) January 2016 Page 40 of 43

41 PART 7: APPENDICIES Appendix 1: Location Map for this Certification Unit From 1.9, the location map(s) Map 1. Location of PBB in Sabah Region RSPOPC-SUM-REPORT.F01 (3.0) January 2016 Page 41 of 43

42 Map 2. Location of PBB (Sabah Mas POM and estate) and neighboring entities RSPOPC-SUM-REPORT.F01 (3.0) January 2016 Page 42 of 43