Public Summary Report

Transcription

1 FELDA GLOBAL VENTURES PLANTATIONS MALAYSIA SDN BHD (FELDA PLANTATIONS SDN BHD) RSPO Membership No: PLANTATION MANAGEMENT UNIT KKS Fajar Harapan Grouping Lahad Datu, Sabah, Malaysia Public Summary Report (Abridged)

2 Page 2 of 26 MAIN ASSESSMENT REPORT ON RSPO CERTIFICATION PUBLIC SUMMARY REPORT FELDA GLOBAL VENTURES PLANTATIONS MALAYSIA SDN BHD (FELDA PLANTATIONS SDN BHD) RSPO Membership No: PLANTATION MANAGEMENT UNIT KKS Fajar Harapan Grouping Lahad Datu, Sabah, Malaysia Certificate No: RSPO Issued date: 27 February 2014 Expiry date: 26 February 2019 Assessment Type Assessment Dates Initial Certification (Main Assessment) October 2013 Annual Surveillance Assessment (ASA-01) Annual Surveillance Assessment (ASA-02) Annual Surveillance Assessment (ASA-03) Annual Surveillance Assessment (ASA-04) Re-Certification Intertek Certification International Sdn Bhd [formerly known as Moody International Certification (Malaysia) Sdn Bhd] 6-L12-01, Level 12, Tower 2, Menara PGRM No. 6 & 8 Jalan Pudu Ulu, Cheras, Kuala Lumpur, Malaysia. Tel: +00 (603) Fax: +00 (603) ia.mysbaenquiry@intertek.com Website:

3 Page 3 of 26 TABLE OF CONTENTS Section Content Page No 1.0 SCOPE OF ASSESSMENT Introduction Location (address, GPS and map) mill, estates and hectarage Description of supply base (fruit sources) Year of plantings and cycle Summary of Land Use Conservation and HCV Areas Other certifications held and Use of RSPO Trademarks Organizational information/contact person Tonnages Verified for Certification Time Bound Plan Abbreviations Used ASSESSMENT PROCESS Assessment Methodology, Plan & Site Visits Date of next scheduled visit Qualifications of the Lead Assessor and Assessment Team Certification Body Process of Stakeholder consultation ASSESSMENT FINDINGS Summary of findings Status of Identified Noncompliance and Corrective Actions, Observations and Identified Positive Elements Summary of Feedback Received from Stakeholders and Findings ASSESSMENT CONCLUSION AND RECOMMENDATION Acknowledgement of Internal Responsibility and Confirmation of Assessment Findings Intertek RSPO Certification Details for KKS Fajar Harapan Grouping APPENDICES Appendix A Assessment Plan Appendix B Maps of location Mill and Estates 25-26

4 Page 4 of SCOPE OF MAIN ASSESSMENT 1.1 Introduction This Main Assessment was conducted on the Plantation Management Unit (PMU) at KKS Fajar Harapan Grouping of Felda Plantations Sdn Bhd (hereafter abbreviated as FELDA), from October 2013, to assess if the organization s operations of the mill and its supply bases for compliance against the RSPO Principles and Criteria (April 2013), Malaysian National Interpretation (November 2010) and the RSPO Supply Chain Certification Standard (November 2011) for Palm Oil Mill. This assessment also includes a review of the changes made by the PMU to comply with the requirements of the ratified new RSPO Principles and Criteria (effective 25 April 2013). It was found that the PMU is aware of the new RSPO Principles and Criteria but yet make the necessary changes required. The plantation management unit (PMU) or management unit is equivalent to a certification unit as defined in the RSPO Certification Systems Document. Each PMU consists of one mill and its supply bases which are made up of estates owned and/or managed by FELDA. Note: There are no FELDA smallholder schemes at KKS Fajar Harapan Grouping PMU. 1.2 Location (address, GPS and map) of palm oil mill and estates KKS Fajar Harapan Grouping consists of one palm oil mill, namely Fajar Harapan Palm Oil Mill and 6 estates as indicated in Table 1 below, which includes the addresses and GPS locations of the mill and estates. The location maps are provided in Appendix C. Table 1: Address of Palm Oil Mill, Estates and GPS Location Name Fajar Harapan POM (Capacity: 60 MT/hour) 1. FGVP Sahabat FGVP Sahabat FGVP Sahabat FGVP Sahabat FGVP Sahabat FASSB Sahabat 17 Address Kilang Sawit Felda Fajar Harapan, Peti Surat 27, Pos Cenderawasih, Lahad Datu, Sabah FGVP Sahabat 20, Ladang Sahabat 20, Peti Surat 58, Pos Cenderawasih, Lahad Datu, Sabah. FGVP Sahabat 21, Ladang Sahabat 21, Peti Surat 61, Pos Cenderawasih, Lahad Datu, Sabah. FGVP Sahabat 22, Ladang Sahabat 22, Peti Surat 99, Pos Cenderawasih, Lahad Datu, Sabah. FGVP Sahabat 23, Ladang Sahabat 23, Peti Surat 31, Pos Cenderawasih, Lahad Datu, Sabah. FGVP Sahabat 25, Ladang Sahabat 25, Peti Surat 91, Pos Cenderawasih, Lahad Datu, Sabah. FASSB Sahabat 17, Ladang Sahabat 17, Peti Surat 91, Pos Cenderawasih, Lahad Datu, Sabah. GPS Reference Latitude Longitude N E N E N E N E N E N E N E

5 Page 5 of Description of supply base (fruit sources) The supply base i.e. FFB sources to the POM at KKS Fajar Harapan Grouping PMU are from the abovementioned 6 estates which are wholly owned and managed by FELDA. Note: There are no organized smallholders under the FELDA Scheme at KKS Fajar Harapan Grouping. There was FFB supply from other external estates which are owned by independent smallholders, which had also supplied FFB to the POM. These other supply sources have also been considered in the overall assessment of KKS Fajar Harapan Grouping PMU and have been verified to be part of the Time Bound Plan committed by FELDA for certification. Details of the planted hectarage for the FFB supply for KKS Fajar Harapan Grouping are as shown in Table 2 below. Table 2: Estate Area Summary (from Jan 2013 to Oct / Dec 2013) Estate 1. FGVP Sahabat FGVP Sahabat FGVP Sahabat FGVP Sahabat FGVP Sahabat FASSB Sahabat 17 Area Summary (ha) Certified (Titled) Area Planted Area 1, , , , , , , , , , , , Total: 13, , Notes: 1. This Assessment covered the overall land use for oil palm plantation areas, and the identified Conservation areas including any HCV areas marked out at the estates. 2. The estates sampled for this Assessment have been selected based on their potential risks on social, environmental and biodiversity issues such as their proximity to forest reserves, hill sides, riparian zones and any high conservation value areas.

6 Page 6 of Summary of plantings and cycle The 6 estates had been developed beginning from 1985 and are currently in the 2 nd cycle of planting for the oil palms. The age profile is as shown in Table 3. Table 3: Age Profile of Planted Oil Palm (Year: Jan 2013 to Dec 2013) Estate Name Year of Planting Cycle of Planting - current Mature OP (ha) Above 3 years Immature OP (ha) 3 years & below FGVP Sahabat 20 FGVP Sahabat 21 FGVP Sahabat 22 FGVP Sahabat 23 FGVP Sahabat 25 FASSB Sahabat (1 st cycle) (1 st cycle) (1 st cycle) (1 st cycle) (1 st cycle) (1 st cycle) nd cycle , nd cycle 1, nd cycle 2, nd cycle 1, nd cycle , nd cycle 1, Total 8, , Summary of Land Use - Conservation and HCV Areas The summary of Conservation and HCV Areas as identified in KKS Fajar Harapan Grouping during this assessment is as shown in Table 4 below: Table 4: Conservation and HCV Areas # Statement of Land Use (Ha) Current 2013 Hectarage Ha 1 Planted Area (ha) Oil Palm - Mature 8, Immature 4, Conservation Area (ha) - comprising buffer zones along small streams, hilly areas, swampy and unplantable areas HCV Area (ha) - comprising buffer zones near forest reserves, water catchments, burial & religious sites Nil

7 Page 7 of Other certifications held and Use of RSPO Trademarks Presently KKS Fajar Harapan Grouping hold the ISO 9001 and OHSAS certifications for the Palm Oil Mill. The RSPO s trademarks and logo are not yet used by the PMU audited. Instructions for use were provided and acknowledged by the PMU through a signed Memorandum of commitment agreeing to adhere to the latest RSPO Rules on Communications & Claims during the assessment. 1.7 Organizational information / Contact Person Name: Norazam Abdul Hameed Designation: Head of Department, Plantation Sustainability and Quality Management (PSQM) Department Full Address: Plantation Sustainability and Quality Management (PSQM) Department, Felda Global Ventures Plantations Malaysia Sdn Bhd, 3 rd Floor, Balai Felda, Jalan Gurney Satu, Kuala Lumpur, Malaysia. Tel: ext 5348 or ext 5349 Fax: norazam.ah@feldaglobal.com Name: Anthonius Sani Designation: Sustainability Manager, Plantation Sustainability and Quality Management (PSQM) Department Full Address: Plantation Sustainability and Quality Management (PSQM) Department, Felda Global Ventures Plantations Malaysia Sdn Bhd, 3 rd Floor, Balai Felda, Jalan Gurney Satu, Kuala Lumpur, Malaysia. Tel: ext 5348 or ext 5349 Fax: anthonius.sani@feldaglobal.com

8 Page 8 of Tonnages Verified for Certification The breakdown of all the suppliers and their tonnages of FFB supplied to the POM at KKS Fajar Harapan Grouping based on the actual for January 2013 to September 2013 and projected for October to December 2013 are as follows: # Estate /Supplier FFB Processed (MT) Main Receiving Palm Oil Mill RSPO P&C Certification 1. FGVP Sahabat 20 20,114 KKS Fajar Harapan Covered under this report 2. FGVP Sahabat 21 27,883 KKS Fajar Harapan Covered under this report 3. FGVP Sahabat 22 49,728 KKS Fajar Harapan Covered under this report 4. FGVP Sahabat 23 33,854 KKS Fajar Harapan Covered under this report 5. FGVP Sahabat 25 15,617 KKS Fajar Harapan Covered under this report 6. FASSB Sahabat 17 36,935 KKS Fajar Harapan Covered under this report Sub-total from KKS Fajar Harapan PMU estates: 184, Other FELDA PMUs nil -NA- 8. Felda s Settlers Scheme nil -NA- 9. Other external suppliers 13,135 Not yet certified Grand total: 197,267 Note: The other external FFB suppliers consist of independent smallholders (of over 200 individuals) who are neither under FELDA smallholder schemes nor the KKS Fajar Harapan PMU Grouping. Total annual volumes / tonnages of FFB supplied from the supply base to KKS Fajar Harapan Grouping POM during the previous period, current Assessment period and projected period are as follows: Estate / Supplier Certifiable FFB i.e. KKS Fajar Harapan Group Estates FFB Processed (Year 2012) FFB Processed (Year 2013) FFB Processed (Year projected) MT % MT % MT % 159, , , Non-certifiable FFB i.e. Other external suppliers 18, , , Total 177, , , SCCS Model for POM MB MB MB

9 Page 9 of 26 The annual certifiable tonnages of CPO and PK production by KKS Fajar Harapan Grouping from the supply base / suppliers as assessed and verified during this Main Assessment (based on Jan Dec 2013 data) and projected for next year are detailed as follows: POM Jan Dec 2012 Jan Dec Actual & Projected Jan Dec Projected Total certifiable FFB Processed (MT) 159, , ,250 Total certifiable CPO Production (MT) 32, OER: % 38, OER: 20.70% 32, OER: 20.70% Total certifiable PK Production (MT) 7, KER: 4.81% 8, KER: 4.84% 7, KER: 4.84% Note: The POM has established and maintained procedures for the book keeping and monitoring requirements for the CPO at the mill. It is verified the POM has procedures for the Mass Balance MB model in accordance with the RSPO Supply Chain Certification Standards (SCCS) requirements. Verified activities and checked items for the SCCS of the POM are reported in section Time Bound Plan for Other Plantation Management Units Felda Group operates 70 palm oil mills and 416 oil palm estates and schemes throughout Malaysia. The organization is a member of RSPO since 2004 and has been taking an active role in the RSPO certification. Currently, a significant number of its Certification Units is undergoing the RSPO certifying process in accordance with its time bound plan to achieve RSPO certification for all its plantation certification units by Based on the due diligence conducted on FELDA there were no significant land conflicts, no replacement of primary forest or any area containing HCVs since November 2005, no labour disputes that are not being resolved through an agreed process, no evidence of non-compliance with law in any of the non-certified holdings. FELDA group had declared that there was new planting and new acquisition of plantation lands and the progress of the said activities are ongoing. These have been reviewed and updated in the Time bound plan as submitted by FELDA in December The updated Time bound plan submitted is verified by INTERTEK to be sufficiently challenging. Details of the status of the Time bound plan as submitted by FELDA can be provided upon written request from RSPO and FELDA.

10 Page 10 of Abbreviations Used CB Certification Body IUCN International Union for Conservation of Nature CHRA Chemical Health & Risk Assessment KER Kernel Extraction Rate CPO Crude Palm Oil LTA Lost Time Accidents CSDS Chemical Safety Data Sheets MSDS Material Safety Data Sheets CSPO Certified Sustainable Palm Oil MTCS Malaysia Timber Certification Scheme CSPK Certified Sustainable Palm Kernel NCR Non-Conformance Report EFB Empty Fruit Bunch NGO Non-Government Organization EHS Environmental Health & Safety OER Oil Extraction Rate EIA Environmental Impact Assessment OHS Occupational Health & Safety ETP Effluent Treatment Plant PEFC Programme for the Endorsement of Forest Certification FASSB Felda Agricultural Services Sdn Bhd PK Palm Kernel FELDA FGVP Felda Global Ventures Plantations Malaysia Sdn Bhd (Felda Plantations Sdn Bhd) Felda Global Ventures Plantations Malaysia Sdn Bhd PMU POM Plantation Management Unit Palm Oil Mill FFB Fresh Fruit Bunch POME Palm Oil Mill Effluent GAP Good Agriculture Practice PPE Personal Protective Equipment HCV High Conservation Values SCCS Supply Chain Certification Standard Intertek Intertek Certification International Sdn Bhd SOP Standard Operating Procedures IPM ISCC Integrated Pest Management International Sustainability & Carbon Certification

11 Page 11 of ASSESSMENT PROCESS 2.1 Assessment Methodology, Plan and Site Visits Intertek has initiated public communications and notifications and invited the relevant stakeholders before the assessment to provide feedback and comments on their concern (if any) on KKS Fajar Harapan Grouping regarding the environmental, biodiversity, community development and other relevant issues. From October 2013, the Assessment team conducted the Main Assessment in which 3 out of the 6 estates of KKS Fajar Harapan Grouping, namely FGVP Sahabat 20, FGVP Sahabat 22 and FGVP Sahabat 25 estates as well as the palm oil mill were assessed for compliance against the RSPO requirements. The number of estates sampled was based on a minimum sample of 0.8 y where y is the number of management sub-units and the selection was made based on their potential risks on social, environmental and biodiversity issues such as their proximity to forest reserves, hill sides, riparian zones and high conservation value areas. During the on-site assessment, relevant documents and records, including Standard Operating Procedures (SOP), management plans, hectarage development, FFB, CPO and PK production, oil palm age profile, operational controls and measures, operational data and records, training records, etc. were reviewed and verified for compliance. The Assessment team using the process approach auditing technique covered the palm oil mill and estate operations, agricultural practices, pest management, pesticide and fertilizer application, occupational health and safety, social accountability, environment and other requirements. Stakeholders interviews were conducted during the assessment and feedback obtained as part of information and evidence gathering. (See section 2.5 Process of stakeholder consultation). KKS Fajar Harapan Grouping POM was also assessed against the requirements of RSPO Supply Chain Certification Standard for CPO mill. This part of the assessment covered the verification of implementation of documented procedures and availability of records to demonstrate compliance against all the elements for the Mass Balance - MB Module requirements. These include documented procedure, purchasing and goods in, record keeping, sales and goods out, processing, monitoring and traceability of the CSPO and CSPK quantities, training for staff and claims. After completion of the on-site field assessment, Intertek also performed the evaluation of conformity against the RSPO Certification System requirements for CB. The assessment report, findings and associated documents were evaluated through an independent review by the Intertek Internal Evaluation Panel prior to submission of the Public Summary Report to RSPO Secretariat for approval. The details of the Assessment Plan (actual on-site) are provided in Appendix A. 2.2 Date of next scheduled visit The next scheduled visit will be the Surveillance Assessment which will be carried out within a 12-month period after RSPO acceptance of this report. 2.3 Qualifications of the Lead Assessor and Assessment Team Details of the Lead Assessor and Assessment Team and summary of their competency and skill may be obtained from RSPO or Intertek Certification International. 2.4 Certification Body Intertek Certification International Sdn Bhd [formerly known as Moody International Certification (Malaysia) Sdn Bhd] is part of the Intertek Group, which is a worldwide technical services organization dedicated to reducing clients' risks by providing technical inspection services, management system certification in quality, environmental, occupational safety & health and product certification, RSPO SCC, ISCC, Marine Sustainability Chain-of-Custody, MTCS and PEFC Chain-of Custody certification in applicable industry sectors including the agricultural and forestry sectors. Intertek operates globally providing clients with a wide-ranging technical inspection expertise and access to thousands of skilled specialists worldwide. Intertek Group s certification business is ranked in the top 10 worldwide, and is available globally offering certification across a wide range of industries.

12 Page 12 of Process of stakeholder consultation Stakeholder consultations began with notification of the upcoming assessment through the websites of RSPO, FELDA and Intertek. s were sent to applicable stakeholders including government agencies, NGOs and local communities. s and telephone enquiries were made prior to the actual assessment and stakeholder s response and feedback received were followed up accordingly. During the assessment, stakeholders were interviewed and their feedbacks were recorded. Among the stakeholders consulted were workers, trade union leaders, women representatives; local community leaders, representatives of government departments / agencies, NGOs, suppliers and contractors. Details on stakeholders feedback, PMU response and Intertek verification / comments are provided in section 3.3. Among the list of key stakeholders consulted was the following: Government Agencies (by s) 1. Department of Lands And Mines, WP 10. Environment Protection Department Sabah 2. Department of Environment, WP 11. Department of Forestry, Sabah 3. Department of Forestry Peninsular Malaysia 12. Department of Immigration, Sabah 4. Department of Immigration, WP 13. Department of Irrigation & Drainage, Sabah 5. Department of Irrigation & Drainage, WP 14. Department of Labour, Sabah 6. Department of Labour, WP 15. Department of Occupational Safety & Health, Sabah 7. Department of Occupational Safety & Health. WP 16. Sabah Wildlife Department 8. Department of Orang Asli Affairs, WP 17. Land and Mines Office, Sabah 9. Department of Wildlife & National Parks, WP Statutory Bodies (by s) 18. Malaysian Palm Oil Board (MPOB) 23. Malaysian Palm Oil Board (MPOB) - Sarawak Region 19. Malaysian Palm Oil Board (MPOB) - Northern Region 24. Malaysian Palm Oil Board (MPOB) - Sabah Region 20. Malaysian Palm Oil Board (MPOB) - Central Region 25. Malaysia Palm Oil Association (MPOA) 21. Malaysian Palm Oil Board (MPOB) - Southern Region 26. Malaysia Palm Oil Association Kuala Lumpur (MPOA) 22. Malaysian Palm Oil Board (MPOB) - Eastern Region 27. Malaysia Palm Oil Association Sabah (MPOA) NGOs (by s) 28. All Women s Action Society (AWAM) 57. Malaysian Nature Society Terengganu 29. BCSDM - Business Council for Sustainable Development in Malaysia 58. Malaysian Plant Protection Society (MAPPS) 30. Borneo Child Aid Society (Humana) 59. Mountaineering and Outdoor Pursuits Association of Negeri Sembilan 31. Borneo Resources Institute Malaysia (BRIMAS) 60. National Council of Welfare & Social Development Malaysia - NCWSDM 32. Borneo Rhino Alliance (BORA) 61. National Union of Plantation Workers (NUPW) 33. Center for Orang Asli Concerns COAC 62. Partners of Community Organisations (PACOS) 34. Centre for Environment, Technology and Development, Malaysia - CETDEM 63. Penang Institute previously known as Socio-Economic & Environmental Research Institute (SERI) 35. Consumers Association Of Penang - CAP 64. Proforest - South East Asia Regional Office 36. EcoKnights 65. R.E.A.C.H. - Regional Environmental Awareness Cameron Highlands 37. Environmental Management and Research Association of Malaysia (ENSEARCH) 66. Sabah Wetlands Conservation Society (SWCS) 38. Environmental Protection Society Malaysia (EPSM) 67. SEPA - Sabah Environmental Protection Association 39. Friends of the Earth, Malaysia 68. SUARAM - Suara Rakyat Malaysia 40. Future in Our Hands Society, Malaysia 69. SUHAKAM - National Human Rights Society - Persatuan Kebangsaan Hak Asasi Manusia 41. Global Environment Centre 70. Sustainable Development Network Malaysia (SUSDEN) 42. Institute of Foresters, Malaysia (IRIM) 71. Tenaganita Sdn Bhd 43. JUST - International Movement for a Just World 72. The Malaysian Forum of Environmental Journalist (MFEJ) 44. Malaysian Environmental NGOs - MENGO 73. TRAFFIC Southeast Asia - Wildlife trade & trafficking monitoring programme 45. Malaysian National Animal Welfare Foundation - MNAWF 74. Transparency International - Malaysian Chapter 46. Malaysian Nature Society (MNS) Kuala Lumpur 75. Treat Every Environment Special Sdn Bhd. (TrEES) 47. Malaysian Nature Society Johor 76. United Nations Development Programme - UNDP Malaysia 48. Malaysian Nature Society Kedah 77. Water Watch Penang (WWP) 49. Malaysian Nature Society Kelantan 78. Wetlands International (Malaysia) 50. Malaysian Nature Society Kuching 79. Wild Asia Sdn Bhd 51. Malaysian Nature Society Melaka/Negeri Sembilan 80. World Wide Fund for Nature (WWF) Malaysia

13 Page 13 of Malaysian Nature Society Miri 81. World Wide Fund of Nature (WWF) Sabah 53. Malaysian Nature Society Pahang 82. UNION - AMESU 54. Malaysian Nature Society Perak 83. Malaysian CropLife & Public Health Association (MCPA) 55. Malaysian Nature Society Pulau Pinang 84. Pesticide Action Network Asia and the Pacific (PAN AP) 56. Malaysian Nature Society Sabah Local community (On-site interviews) Gender representatives Workers & Workers representatives Suppliers & Contractors representatives 3.0 ASSESSMENT FINDINGS 3.1 Summary of findings The assessment confirmed that KKS Fajar Harapan has demonstrated compliance against the RSPO Principles and Criteria (April 2013), Malaysian National Interpretation (MY- NI, November 2010) and RSPO Supply Chain Certification Standard (November 2011) for POM. During this assessment, there were 13 Non-Conformances (3 Major and 10 Minor) and 3 Observations raised as detailed in Supply Chain Certification Standards Findings - on CPO Mill The Supply Chain model applied at KKS Fajar Harapan Grouping POM during this assessment is Module E CPO Mills: Mass Balance (MB) Status on Supply Chain on POM: Based on the documents and records presented during the on-site verifications made, it is concluded that the Felda KKS Fajar Harapan POM has been able to comply with the requirements of the RSPO SCCS under the MB module and is thus eligible for MB trading for its palm products for year Status of Identified Noncompliance and Corrective Actions, Observations and Positive Elements. The status of the Noncompliances (NCR) and Observations (OBS) identified against the MYNI Compliance s is as per the details below: Assessment Type Year Noncompliance (NCR) Observations (OBS) Main Assessment (3-Major & 10-Minor) 3 Year 2013: Main Assessment (13 NCRs) KKS FAJAR HARAPAN NCR # 1 of 13 -Minor MYNI Date issued: 25 October 2013 Nonconformance: Details of NCR Date closed: Next surveillance ASA-01 Documented system of legal requirements established, however, it did not sufficiently include other relevant legal requirements for Sabah state, both for palm oil mill and estates (as required in MYNI, indicator 2.1.2). Root Cause and Corrective Action: The documentation was overlooked. The list of applicable legal requirements local and international at Sabah state will be updated. Verification (for effective closure): During ASA-01

14 Page 14 of 26 NCR # 2 of 13 -Minor MYNI Date issued: 25 October 2013 Nonconformance: Details of NCR Date closed: Next surveillance ASA-01 A system for tracking changes in the law established and documented, however, it did not sufficiently include other relevant legal requirements for Sabah state, both for the palm oil mill and estates (as required in MYNI, indicator 2.1.4). Root Cause and Corrective Action: The documentation was overlooked. The list of applicable legal requirements local and international at Sabah state will be updated. The name of the reviewing officer and signing off after review and checked status (" ") will be included as evidence of review. Verification (for effective closure): During ASA-01 NCR # 3 of 13 -Minor MYNI Date issued: 25 October 2013 Nonconformance: Details of NCR Date closed: Next surveillance ASA-01 Referring to the land conflict issue, file no. [PT , 0544, 0510, 0486], grant no. [CL ], within Sahabat 22 estate, where a group of claimants filed a court case on the said land in year 2011, the evidences of necessary action taken to resolve the conflict with the relevant parties were insufficiently demonstrated. Root Cause and Corrective Action: The Estate Manager had limited knowledge on the court case. Details of the case as kept by the HQ at KL will be obtained. A tabulated chronological order of the case and relevant details of persons involved, court findings /judgment and any outstanding issues will be documented until current status. Verification (for effective closure): During ASA-01 NCR # 4 of 13 -Minor MYNI Date issued: 25 October 2013 Nonconformance: 1). Ladang Sahabat 20 Details of NCR Date closed: Next surveillance ASA-01 The muster chit for 23 rd and 24 th October 2013 had yet to be written up when the auditor visited the estate office on 24 th October 2013 morning. 2) Ladang Sahabat 25 The muster chit details were written on the white board at the site-office on the day of work. These details would then be erased and replaced with the details on the next morning for the day of work. As such, there was no record of the muster chit available for monitoring purpose. This practice started since the end of April, 2013 when the hard copy of muster chit was discontinued.

15 Page 15 of 26 Root Cause and Corrective Action: There was a lapse in the recording of Muster chit due to change of Estate managers. Proper recording of Muster chit will resume at Sahabat 20 and 25 from 23 October onwards. Verification (for effective closure): During ASA-01 NCR # 5 of 13 -Minor MYNI Date issued: 25 October 2013 Nonconformance: Details of NCR Date closed: Next surveillance ASA-01 At Ladang Sahabat 22 (PR13 F13P) and Ladang Sahabat 25 (PR13 F10) Herbicide spraying operators were found spraying the soft grasses along the road-side of the field roads. Root Cause and Corrective Action: There was lack of awareness on the matter by the spraying operators. The instruction for the proper spraying at the field will be issued and all sprayers at the estates will be briefed on it. Verification (for effective closure): During ASA-01 NCR # 6 of 13 -Major MYNI Date issued: 25 October 2013 Nonconformance: Details of NCR Date closed: Next surveillance ASA-01 At Ladang Sahabat 20 (PR12 F13), Ladang Sahabat 22 (PR13 F13P) and Ladang Sahabat 25 (PR13 F10 & PR12 F14): When replanting, some palms had been planted too close to the streams/rivers i.e. within the buffer zones and this is contrary to the requirement as specified in the company policy and Jabatan Pengairan dan Saliran Tawau, Sabah (dated 2 April 2012). Root Cause and Corrective Action: Buffer zone signages for the areas mentioned were not properly put. Signages for the Buffer zone and No Spraying of Chemicals will be prepared to ensure no chemical applications at the Buffer zone areas. Communication notices, briefing and warning will be given to the workers and contractors. Photographs for the completed signages and documentation will be submitted. Verification (for effective closure): On site verification was conducted on 6 January Buffer zones and signages were confirmed to have been erected and records of briefings done were available and photographs were taken on site by the auditor. Effective closure will be further conducted during ASA-01 NCR # MYNI Details of NCR 7 of Date issued: 25 October 2013 Date closed: Next surveillance ASA-01

16 Page 16 of 26 -Major Nonconformance: At Ladang Sahabat d i) The harvesters in Field PM 99 D were found to carry out harvesting F.F.B. without using safety helmets for about a year as they had not been provided with safety helmets by the employer i The mandore did not carry the First Aid Kids with him during harvesting operation c. Procedures for handling the pesticides were available, but no training record was available. At Ladang Sahabat c. Records on training had been verified, but there was no attendance sheet for the training concerned g. Records of training had been verified, but assessment on understanding of training by the workers had not been carried out. Root Cause and Corrective Action: Implementation on the mentioned items by the Estate Managers was weak. At Ladang Sahabat 22 and Sahabat 25, the following will be done: Update records of PPE issued to workers Signed letters of compliance to wear PPE by workers Display of notices for proper PPE wear Update records for First Aid Kit issued to all mandores and make checking of contents and ensure mandores are bring them at the field site and operations Training on PPE wear and use of First Aid Kits. Update records of training done and ensure attendance sheets are signed by workers Perform competency evaluation of workers and update their records. Verification (for effective closure): On site verification was conducted on 6 January PPE records were verified and field site verification conducted confirmed that First Aid Kits were available and Field supervisors / Mandores interviewed were able to provide adequate understanding of the implementation. Photographs were taken on site by the auditor. Effective closure will be further conducted during ASA-01 NCR # 8 of 13 -Minor MYNI Date issued: 25 October 2013 Nonconformance: Details of NCR Date closed: Next surveillance ASA-01 EIA documentation by Environment Protection Department i.e. Jabatan Perlindungan Alam Sekitar (JPAS) dated 18 April 2012 available and circulated in by GM, Wilayah Sahabat in August 2012, which included recommendations for mitigating impacts which covered replanting activities. However the Management plan for mitigation of impacts, timeframe for action and responsible persons were not followed up i.e. by the Estate managers. Root Cause and Corrective Action: The EIA / PMM (Pelan Pengurusan Mitigasi) were not properly followed up by the Estate Managers. All Management plan items indicated will be immediately followed up, actions taken, reviewed and supported with photographic evidences. Verification (for effective closure): During ASA-01

17 Page 17 of 26 NCR # 9 of 13 -Minor MYNI Date issued: 25 October 2013 Nonconformance: Details of NCR Date closed: Next surveillance ASA-01 At Sahabat 20, 22 & 25, Chemical store and waste products identification: Scheduled waste disposal of every 6 months pending to be done in October 2013 (last done by POM was March 2013). Spent and waste oil temporary stored at the estates to be properly labelled i.e. SW no. and starting dates of storage was not indicated. Root Cause and Corrective Action: Estate managers were not aware of the requirements under DOE Act 1974, Regulation 2005 (Scheduled Waste Disposal). At the estates, Scheduled waste disposal drums will be proper labelled and Forms 2, 4, 5 and 7 will be filled. Next schedule waste disposal is planned in November 2013 both at POM and estates. Verification (for effective closure): During ASA-01 NCR # 10 of 13 -Major MYNI Date issued: 25 October 2013 Nonconformance: Details of NCR Date closed: Next surveillance ASA-01 Fajar Harapan, Sahabat 20, 22 & The required Social Impact Assessments (SIA) was done with the use of a standard survey format, without including or considering re-planting in the Social Impact assessment conducted in Year Records of meeting with external stakeholders have not been maintained or documented. Root Cause and Corrective Action: Mill and Estate managers were had overlooked the matter. SIA survey forms will be revised to include considerations during re-planting. List of stakeholders will be updated. Meetings with all categories of stakeholders will be held and recorded. Revised SIA survey forms will be completed and action plans will be included. Summary of actions needed will be followed up Verification (for effective closure): On site verification was conducted on 6 January Additional stakeholder consultations conducted by the estates were performed and records were maintained and made available. Stakeholders listing was also updated. Areas of social impact were noted to be adequately covered in the consultations and actions needed were included in the Management Plan for continual improvement which are monitored. Effective closure will be further conducted during ASA-01 NCR # MYNI Details of NCR 11 of Date issued: 25 October 2013 Date closed: Next surveillance ASA-01

18 Page 18 of 26 -Minor Nonconformance: Fajar Harapan, Sahabat 20, 22 & Participation of affected parties in the Social Impact Assessments (SIA) could not be established without a full list of identified external stakeholders, such as including all contractors, suppliers, community representatives and relevant affected parties. Evidence in the form of attendance list(s) of external stakeholders, (parties) was also not available as evidence of participation. Root Cause and Corrective Action: Mill and Estate managers were had overlooked the matter. Detailed Listing of all internal and external stakeholders will be updated. Meetings with all categories of stakeholders held will have attendance list and will be recorded. Verification (for effective closure): During ASA-01 NCR # 12 of 13 -Minor MYNI Date issued: 25 October 2013 Nonconformance: Details of NCR Date closed: Next surveillance ASA-01 Fajar Harapan, Sahabat 20, 22 & A timetabled management plan has yet to be developed in consultation with affected parties for mitigation of identified negative impacts (and promotion of positive ones). Responsibility (of person) for monitoring of implementations was also not stated or available Root Cause and Corrective Action: Monitoring on this by Estate Managers was weak. Management plan with timetable will be developed. Person(s) responsible will be indicated. Actions needed for both positive and negative impacts will be included. Verification (for effective closure): During ASA-01 NCR # 13 of 13 -Minor MYNI Date issued: 25 October 2013 Nonconformance: Fajar Harapan, Sahabat 20 Housing area Details of NCR Date closed: Next surveillance ASA : The compound of housing area was found to be littered with rubbish, including empty drums pesticides and metal containers for hydraulic oils, metal scraps found at the workers quarters of Sahabat 20, which was not properly managed. There was no record to evidence this implementation of monitoring as required by the PMU procedure or the regulatory requirements as follow: Workers Minimum Standards of Housing and Amenities ACT 1990 requires weekly inspection of workers housing. It shall be the duty of the employer of a place of employment where workers and their dependents are provided with housing accommodation to ensure that : (a) the area surrounding the workers housing is kept clear of undergrowth and maintained in a clean and sanitary condition; (b) the perimeter drains around each dwelling or block of dwellings including all outlet drains are kept in a good state of repair and clear of refuse or undergrowth to permit free flow of water;

19 Page 19 of 26 Root Cause and Corrective Action: Monitoring on this by Estate Managers was weak. Cleaning of the areas will be done via organizing of Gotong-Royong. Weekly inspection at housing and hostels will be conducted, recorded and supported with photographs taken. Verification (for effective closure): During ASA-01 Year 2013: Main Assessment (3 Observations) Ref No: RSPO P&C Location Details of Observation Opened date Status Closed date Remark, if any CFK Sahabat 25, 22 and 20 estates AL New requirem ent POM CML Fajar Harapan PMU & Sahabat 20,22, 25 estates Fertilizer store: S 25, 22 and 20 Storage of fertilizers was found to be beside pesticides i.e. rat baits- Basta 2. Proper segregated storage for pesticides is needed. It is noted that the PMU has not compiled it is GHG emissions and the plans to further reduce or minimise GHG emissions are yet to be established and implemented. Thus an observation is issued for further monitoring plans for reduction of GHG emissions at the PMU. For continual improvement, the management is encouraged to perform analysis of the bring home pay of piece rated workers that are less than or did not achieve the pay amount sufficient for a decent living and to find out possible reasons (excluding those of frequent absent workers) to demonstrate whether the hilly terrain or rough estate terrain or other reasons that may have caused the below expected achievement of piece rated productivity or targets. 26 Oct Oct Oct To be followed up during next Surveillance assessment. - To follow up during ASA-01 - To follow up during ASA Identified Positive Elements 1) KKS Fajar Harapan PMU has been provided proper infrastructure such as road access and basic social amenities such as grocery stores, clinics and schooling to the local communities at the Sahabat Grouping estates. 2) The PMU has made financial contributions during local festivities and assisted in the significant events such as marriages, burial and medical assistance when needed. 3.3 Feedback Raised by Stakeholders and Findings Prior to and during the Assessment, written and verbal feedback communicated from the stakeholders on the environmental and social performance of KKS Fajar Harapan PMU operations were sourced. All pertinent feedback issues were reviewed and followed up for verification and these had been accordingly incorporated into the full detailed report.

20 Page 20 of ASSESSMENT CONCLUSION AND RECOMMENDATION Based on the findings above, FELDA KKS Fajar Harapan Grouping had been able to demonstrate its compliance with the RSPO Principles and Criteria (April 2013), Malaysian National Interpretation (MY-NI November 2010) and the RSPO Supply Chain Certification Standard (November 2011) for Palm Oil Mill. Therefore, it is recommended that the certification of FELDA KKS Fajar Harapan Grouping be approved. Signed for and on behalf of Intertek Certification International Sdn Bhd Augustine Loh Lead Assessor Date: 28 January Acknowledgement of Internal Responsibility and Confirmation of Assessment Findings This is to acknowledge and confirm the assessment visits described in this report and the acceptance of the contents and findings in this assessment report. Signed for and on behalf of Felda Global Ventures Plantations (M) Sdn Bhd Mr. Norazam Abdul Hameed Head, Plantation Sustainability & Quality Management Date: 28 January 2014

21 Page 21 of INTERTEK- RSPO P&C Certificate details for KKS Fajar Harapan Grouping Certificate No: RSPO Issue date: 27 February 2014 Expiry date: 27 February 2019 Organization Address of Head Office: RSPO Membership No: Plantation Management Unit: Felda Global Ventures Plantations Malaysia Sdn Bhd (Felda Plantations Sdn Bhd) Felda Global Ventures Plantations Malaysia Sdn Bhd, PSQM Department, SPO Unit, 8th Floor Balai Felda, Jalan Gurney Satu, Kuala Lumpur KKS Fajar Harapan Grouping Address of POM: Standards: Certification scope: Supply Chain model for CPO & PK: Kilang Sawit Felda Fajar Harapan, Peti Surat 27, Pos Cenderawasih, Lahad Datu, Sabah RSPO Principles and Criteria (April 2013); Malaysian National Interpretation (November 2010); RSPO Supply Chain Certification Standards (November 2011) for the Palm Oil Mill. Production of Crude Palm Oil and Palm Kernels Mass Balance (MB) Details of the Mill and Supply bases covered by this certificate and the tonnage approved are: Name Fajar Harapan POM (Capacity: 60 MT/hour) FGVP Sahabat 20 FGVP Sahabat 21 FGVP Sahabat 22 FGVP Sahabat 23 FGVP Sahabat 25 FASSB Sahabat 17 Address Kilang Sawit Felda Fajar Harapan, Peti Surat 27, Pos Cenderawasih, Lahad Datu, Sabah FGVP Sahabat 20, Ladang Sahabat 20, Peti Surat 58, Pos Cenderawasih, Lahad Datu, Sabah. FGVP Sahabat 21, Ladang Sahabat 21, Peti Surat 61, Pos Cenderawasih, Lahad Datu, Sabah. FGVP Sahabat 22, Ladang Sahabat 22, Peti Surat 99, Pos Cenderawasih, Lahad Datu, Sabah. FGVP Sahabat 23, Ladang Sahabat 23, Peti Surat 31, Pos Cenderawasih, Lahad Datu, Sabah. FGVP Sahabat 25, Ladang Sahabat 25, Peti Surat 91, Pos Cenderawasih, Lahad Datu, Sabah. FASSB Sahabat 17, Ladang Sahabat 17, Peti Surat 91, Pos Cenderawasih, Lahad Datu, Sabah. GPS Reference Latitude Longitude N E N E N E N E N E N E N E

22 Page 22 of 26 The annual certifiable tonnages of CPO and PK production by KKS Fajar Harapan Grouping from the supply base/suppliers as assessed and verified during the current Assessment and projected year are detailed as follows: KKS Fajar Harapan POM Jan Dec Actual & Projected Jan Dec Projected Total certifiable FFB Processed (MT) 184, ,250 Total CPO Production (MT) 38,115 32,965 Total PK Production (MT) 8,912 7,708 SCC Model for POM MB MB

23 Page 23 of 26 Appendix A: Certification Assessment Plan (Actual) Date 21/10/2013 Day 1 Time Assessors and Assessment Activity Asssessment Team pm Travel to Lahad Datu, Sabah 1.00 pm pm Lunch Break 2.00 pm 3.00 pm Opening Meeting and Briefing at KKS Fajar Harapan grouping POM Office 3.00 pm 6.00 pm Review of Documentation and Follow up Issues based the Previous Assessment Review of changes for compliance to revised P&C 2013 Review of Time Bound Plan Verification for compliance with rules on partial certification pm Break pm Team meeting and discussion Date 22/10/2013 Day 2 Time 9.00 am am am 1.00 pm Augustine Loh (AL) Assessors and Assessment Activity Assessment Team Chin Miew Lim William Ng Tuck (CML) Seong (NTS) Chen Fai Kok (CFK) Meeting & Briefing at KKS Fajar Harapan grouping (Palm Oil Mill Office) Site assessment at KKS Fajar Harapan grouping Palm Oil Mill (RSPO P&C: 1~8) P5 Environmental, Conservation & Mill including HCV P8 Continual Improvement Site assessment at FGVP Sahabat 25 & Smallholders (RSPO P&C: 1~8) P6 Employees, Individuals & Communities incl. Gender Issues P8 Continual Improvement Site assessment at KKS Fajar Harapan grouping Palm Oil Mill (RSPO P&C: 1~8) P1 Transparency P2 Laws & regulations P3 Economic & Financial Viability P8 Continual Improvement SCC for POM Site assessment at FGVP Sahabat 25 & Smallholders (RSPO P&C: 1~8) P4 Best Practices at Estates & Mill P7 New Plantings P8 Continual Improvement 1.00 pm 2.00 pm Lunch 2.00 pm pm Continue site assessment at Continue site assessment at Continue site assessment at KKS Fajar Harapan grouping Palm Oil Mill Site assessment at FGVP Sahabat 25 & Smallholders KKS Fajar Harapan grouping Palm Oil Mill Continue site assessment at Site assessment at FGVP Sahabat 25 & Smallholders 6.00 pm 7.00 pm Break 7 10 pm Team meeting and discussion Date 23/10/2013 Day 3 Time Augustine Loh (AL) 9.00 am 1.00 pm Site assessment at FGVP Sahabat 22 & Smallholders (RSPO P&C: 1~8) Assessors and Assessment Activity Assessment Team Chin Miew Lim William Ng Tuck (CML) Seong (NTS) Site assessment at Site assessment at FGVP Sahabat 22 FGVP Sahabat 22 & Smallholders & Smallholders (RSPO P&C: 1~8) (RSPO P&C: 1~8) Chen Fai Kok (CFK) Site assessment at FGVP Sahabat 22 & Smallholders (RSPO P&C: 1~8) P5 Environmental, Conservation & Mill including HCV P8 Continual Improvement P6 Employees, Individuals & Communities incl. Gender Issues P8 Continual Improvement P1 Transparency P2 Laws & regulations P3 Economic & Financial Viability P8 Continual Improvement P4 Best Practices at Estates & Mill P7 New Plantings P8 Continual Improvement

24 1.00 pm 2.00 pm Lunch 2.00 pm pm Continue site assessment at Continue site assessment at Continue site assessment at Site assessment at FGVP Sahabat 22 & Smallholders Site assessment at FGVP Sahabat 22 & Smallholders Site assessment at FGVP Sahabat 22 & Smallholders Page 24 of 26 Continue site assessment at Site assessment at FGVP Sahabat 22 & Smallholders 6.00 pm 7.00 pm Break 7 10 pm Team meeting and discussion Date 24/10/2013 Day 4 Time Augustine Loh (AL) 9.00 am 1.00 pm Site assessment at FGVP Sahabat 20 & Smallholders (RSPO P&C: 1~8) Assessors and Assessment Activity Assessment Team Chin Miew Lim William Ng Tuck (CML) Seong (NTS) Site assessment at Site assessment at FGVP Sahabat 20 FGVP Sahabat 20 & Smallholders & Smallholders (RSPO P&C: 1~8) (RSPO P&C: 1~8) Chen Fai Kok (CFK) Site assessment at FGVP Sahabat 20 & Smallholders (RSPO P&C: 1~8) P5 Environmental, Conservation & Mill including HCV P8 Continual Improvement P6 Employees, Individuals & Communities incl. Gender Issues P8 Continual Improvement 1.00 pm 2.00 pm Lunch 2.00 pm pm Stakeholder / Consultations: Contractors Suppliers Transporters NGOs Government Department / Agencies Local Community P1 Transparency P2 Laws & regulations P3 Economic & Financial Viability P8 Continual Improvement P4 Best Practices at Estates & Mill P7 New Plantings P8 Continual Improvement # Mandatory for each category to be audited 6.00 pm 7.00 pm Break 7 10 pm Team meeting and discussion Date 25/10/2013 Day 5 Time am Augustine Loh (AL) Assessors and Assessment Activity Assessment Team Chin Miew Lim William Ng Tuck (CML) Seong (NTS) Preparation of Closing Meeting Chen Fai Kok (CFK) am Team Meeting and Discussions with KKS Fajar Harapan grouping Management Representative noon Closing Meeting & Briefing at Palm Oil Mill Office

25 Page 25 of 26 Appendix B: Location of Felda KKS Fajar Harapan Grouping, Lahad Datu, Sabah, Malaysia Felda Fajar Harapan

26 Page 26 of 26 Location Map of Fajar Harapan Grouping, Lahad Datu, Sabah, Malaysia (Ladang FGVPM Sahabat 20, 21, 22, 23, 25 and FASSB Sahabat 17)