RSPO Assessment Report

Transcription

1 RSPO Assessment Report PUBLIC SUMMARY PT. Kresna Duta Agroindo Langling Mill Jambi, Indonesia This public summary has been prepared in accordance with RSPO requirements and the information included is the result of a full RSPO assessment of the Mills and supply base as included in the scope of the certificate. Prepared by: TutiSuryaniSirait (Lead Assessor) Certification decision made by:triyanaidilfiitri PT. SUCOFINDO (Sucofindo International Certification Services SICS) Graha Sucofindo B1 Floor, Jl. Raya PasarMingguKav. 34, Jakarta Indonesia Contact Person : TutiSuryaniSirait Phone : (62-21) : Fax : (62-21) tuti@sucofindo.co.id 1of 193

2 List of Contents Page A Scope of the Certification Assessment... 4 A.1. National Interpretation Used... 4 A.2. Assessment Type (Estate and Mill)... 4 A.3. Location Map... 4 A.3.1. Location Address of the Mill and Approximate Tonnages Certified (CPO and PKO)... 5 A.4. Description of Supply Base... 6 A.4.1. General Description... 6 A.4.2. Location of Supply Base... 6 A.4.3. Statistic of Supply Base... 6 A.5. Organizational Information and Contact Person... 7 A.5.1 Audit Againstthe Rules for Partial Certification... 8 A.6. Date Certificate Issued and Scope of Certificate B. Assessment Process B.1. Certification Body B.2. Qualifications of the Assesment Team B.2.1. Qualifications of the Lead Assessor and Assessment Team B.3. Assesment Methodology B.3.1. General Overview B.4. Stakeholder Consultation B.4.1. Summary of How Stakeholder Consultation was Organized B.5. Date of Next Surveillance Visit C. Assessment Findings of 135

3 C.1. Lead Assessor s Summary and Recommendation for Certification C.2. Summary of the Findings by Criteria D. Certified Organization s Acknowledgement of Internal Responsibility D.1. Formal Sign-Off the Assessment Findings D.2. Statement by the Certifier Body on Behalf of PT. Sucofindo SBU-SICS List of Abbreviation Appendix-1 Map Appendix-2 NCR Appendix-3 PT. Kresna Duta AGroindo Langling Mill RSPO Supply Chain Checklist Mass Balance Modul Appendix-4 Supporting Document of 135

4 A. Scope of the Certification Assessment A. 1. National Interpretation Used The management of the Palm Oil Mill(s) and associated suppliers of Fresh Fruit Bunches (FFB) were assessed for compliance against the International RSPO criteria as interpreted and endorsed for Indonesia, RSPO Certification Systems and RSPO Suply Chain Certification Systems. A. 2. Assessment Type (Estate And Mill) Certification Unit : PT. Kresna Duta Agroindo Langling Mill located at Desa Langling, Kecamatan Bangko, Kabupaten Merangin Jambi, INDONESIA A.3. Location map Please see Appendix-1Map:1. Map of Location, 2. Land area, 3. Topography and 4. HCV areas Sumatera Island - Indonesia 4of 135

5 A Location address of the mill and approximate tonnages certified (CPO and PK) No Name of Mill Location Address GPS Reference Annual Output (mt) CPO PK 1. Langling Mill PT. Desa Langling Latitude: Kresna Agroindo Duta Kecamatan Bangko Kabupaten Merangin, Provinsi 02 o LS Longitude: 60, , Jambi,Indonesia 102 o BT Note : This data (Annual output) exclude from non certified suppliers) 5of 135

6 A.4. Description of Supply Base A General description PT. Kresna Duta Agroindo operates 2 palm oil mills under PT. Kresna Duta Agroindo, named PT. Kresna Duta Agroindo - Jelatang Mill (JLTM) and PT. Kresna Duta Agroindo Langling Mill (LNGM). This report scope is only for PT Kresna Duta Agroindo - Langling Mill and its supply bases. The raw material/ FFB for PT. Kresna Duta Agroindo - Langling Mill is supplied from the 1. Bangko Estate (Division 5), and 2. Batang Gading estate. Totally supplied FFB from these two (2) estates are 23, MT. All estates are operated under one management of PT. Kresna Duta Agroindo. All estates located in Jambi, Indonesia. PT. Kresna Duta Agroindo is a member of RSPO and they are implementing a program to achieve RSPO Certified Palm Oil for all its production. There is no plan to expand the land holding and therefore Principles 7 is not applicable to this assessment. A Location of the supply base No. Estate Name Location Latitude GPS Longitude 1 Bangko Estate Desa Langling, Kecamatan Bangko, Kabupaten Merangin, Provinsi Jambi, Indonesia 02 o o A Statistic of supply base No. Estate Planting Area/Planting Age/Planting Estimated Estimated Name Year Year Year FFB/Year CPO/Year 1 Bangko Estate Divisi , , , , , , , , TOTAL 23, , of 135

7 A. 5. Organizational Information and Contact Person 1 Company Name PT. KRESNA DUTA AGROINDO 2 Personal Contact Ismu Zulfikar 3 Vice Management Eldimart 4 Company Address Sinarmas Land Menara 2 Lantai 30, Jalan M. H. Thamrin No. 51, Jakarta, Indonesia 5 Company Status PMDN 7 Phone/ Fax ismu.zulfikar@sinarmas-agri.com 9 Website 10 RSPO membership number of 135

8 A Audit Again the Rules for Partial Certification 1. Introduction The audit team has visited Head office at Sinarmas Land Plaza, Tower 2, 30 th Floor, Jalan M. H. Thamrin No. 51, Jakarta, Indonesia to find out the compliance with the rules for partial certification standard in the whole group of PT Sinar Mas Agro Resources and Technology, Tbk (SMART). There are 14 mills, 40 own estates and14plasma (associated smallholders) within this group. The team found a major and a minor non conformity refer to the RSPO requirements for partial certification as stated in the final RSPO certification Systems documents, June 2007, section as describe below : 2. Assessment agenda (partial Certification Audit) Date Location Agenda 19 November 2013 BangkoEstate Verifying legal documents, meeting with Human resources department for Labor Union and workers information 3. Audit Team Findings in Correlation to the Rules Partial Certifications a. The Organization is a member of RSPO PT Kresna Duta Agroindo has confirmed membership of SMART Tbk with no the RSPO under PT b. A Time Bound Plan for achieving certification within relevant entities No Name of Mill Supply Base Company Location 1 Padang Halaban Mill 2 Batu Ampar Mill Padang Halaban Estate Pernantian Estate Adipati Estate Kanopan Ulu Estate Batu Ampar Estate Batu Mulia Estate Sungai Panci Estate PT. SMART TBK PT. SMART TBK North Sumatera South Kalimantan Estimate time of Certifica tion of 135

9 Sungai Panci KKPA 3 Tanah Laut Mill Tanah Laut Estate Kintapura Estate PT. SMART TBK South Kalimantan Langga Payung Mill Langga Payung Estate Paya Baung Estate PT. Tapian Nadenggan North Sumatera 2012 Normak Estate 5 Hanau Mill Hanau Estate Tasik Mas Estate PT. Tapian Nadenggan Central Kalimantan 2012 Tanjung Paring Estate Langadang Estate Medang Sari Estate PT. Satya Kisma Usaha Leidong West Mill Leidong West Utara Estate PT. Leidong West Indonesia Bangka 2013 Leidong West Selatan Estate Bukit Intan Estate Bukit Mas Estate 7 Semilar Mill Semilar Estate Sei Rindu Estate PT. Tapian Nadenggan Central Kalimantan 2013 Mandang Estate Puri Estate 8 Jak Luay Mill Pantun Mas Estate Pantun Mas KKPA PT. Tapian Nadenggan East Kalimantan 2014 Jak Luay Estate Jak Luay KKP Long Buluh Estate Bukit Subur Estate Bukit Subur KKPA 9 Gunung Kombeng Mill/Muara Wahau Mill Gunung Kombeng Estate Gunung Kombeng KKPA Muara Wahau Estate PT. Kresna Duta Agroindo East Kalimantan 2014 Rantau Panjang Estate Rantau Panjang KKPA 9of 135

10 10 Bangko Inti Estate Jelatang Mill Tiga Serumpun KKPA Pamenang Plasma Bukit Bungkul KKPA 11 Pelakar Estate Tiga Serumpun KKPA Pelakar Mill Batang Merangin Estate Batang Tembesi Estate Kubang Ujo Plasma 12 Langling Mill Bangko Inti Estate Bangko Plasma Bukit Bungkul KKPA Pamenang Plasma PT. Kresna Duta Agroindo PT. Kresna Duta Agroindo PT. Kresna Duta Agroindo Jambi Jambi Jambi Sungai Bengkal Mill 14 Bukit Kapur Mill Batang Gading Estate Batang Gading KKPA Sungai Bengkal Estate Sungai Bengkal KKPA Kilis Estate Kilis KKPA Sungai Cantung Estate Bukit Kapur Estae PT. Satya Kisma Usaha PT. Satya Kisma Usaha PT. SMART TBK Jambi 2014 South Kalimantan 2015 The raw material for POM PT. Kresna Duta Agroindo (KDA) Langling Mill is supplied from the FFB which are 1. Bangko Inti Estate; 2. Bangko Plasma; 3. Bukit Bungkul KKPA; 4. Pamenang Plasma; 5. Batang Gading Estate (PT. Satya Kisma Usaha); 6. Batang Gading KKPA (PT. Satya Kisma Usaha) and 2 (two) from associated smallholders. The application of Certification audit was Langling Mill and Bangko Estate Division 5 as a supply base. During the preliminary audit, it was informed that the supply base from main estate is only Bangko estate. At the time of certification audit, it was found that Langling estate also receives continually from other own estate named Batang Gading estate. The Batang gading estate supplies about 84,48% meanwhile Bangko estate supplies for 15,52%. The Batang gading 10of 135

11 estate belongs to PT SKU time bound plan which will be certified by other certification body. Refers to the RSPO SCC system and RSPO Certification system, the Batang gading estate should be within the scope of KDA-Langling mill certification. Team audit decide to issue the Major non-conformace considering to requirements as belows : 1. RSPO Certification System clause that the unit of certification shall be the mill and its supply base, 2. RSPO Certification System clause the management has set up the time-bound plan of Batang Gading Estate as the Supply Base of PT SKU Mill which will be certified by other Certification Body. This is not accepted the appropriateness of the time bound plan at the moment. 3. RSPO SCC Standard module E CPO Mills: Mass Balance, clause E.3.3: a) The Facility shall record and balance all receipts of RSPO certified FFB and deliveries of RSP certified CPO, PKO and palm kernel meal on a three-monthly basis. In identification and traceability procedure (SOP/LNGM/SIK), Mass Balance included in the calculation of monthly, quarterly and yearly. At the time of the audit, the company doesn't have quarterly report to the recording and balance of certified FFB and CPO. This is issued as non-conformity major. 4. RSPO Supply Chain Certification System clause and that 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. Please see the Appendix 1: RSPO Supply Chain Checklist Mass Balance Module and Attachment1: Non-Conformity / Observation Report. Conclusion : Major Non Conformities Team has been verified documents during partial certification audit. The companyhas conducted Gap analysis to the whole group compare to P & C RSPO requirement. The Gap Analysis conducted by other Certification Body. Randomly, the team checked the content of reports to ensure the fulfillment of partial certification. From the sampling report, the team found that not all report has the conclusion for the fulfillment regards to partial certification requirement. The company has made the self declaration for partial certification rule and signed by management. The self declaration stated as belows (a-d) : a. Significant Conflicts The company has the SOP for Conlict Land Resolution refers to RSPO criteria 6.4, of 135

12 and 7.6. All the conflicts so far has been resolved with mutual agreement. GAR also registerd as member of RSPO Dispute Settlement Facility Advisory Group as a representative of grower. Supporting document is DSF RSPO member as a grower dated 22 April b. No replacement of primary forest and or area with HCV s since November 2005 or year 2007 (National Interpretation) PT SMART Tbk has conducted Historical HCV Assesment (HHA) in collaboration with Faculty of Forestry, Institut Pertanian Bogor (IPB) April Historical HCV Assesment (HHA) Report has been submitted to RSPO on May As a follow up from the Historical HCV Assesment (HHA) Report, GAR has been proposed HCV Remediation Plan to RSPO. Revisions of HCV Remediation Plan are on going process/ discussion with RSPO Biosdiversity and HCV Working Group (BHCV WG). Supporting documents is Historical HCV Assesment (HHA) report. c. No labor disputes that are not being resolved through an agreed The company has the SOP and menchanism to resolve dispute with union labour with mutually agreement. The last data shows that there was a labor dispute in Jambi in The dispute has been resolved by related parties and has been final through Jambi Industrial Relation Court. There is the Decision of the Supreme Court of the Republic of Indonesia No K/Pdt.Sus/2010 related to the case of the industrial relation dispute. d. No evidence of non-compliance with law in any of the non-certified holdings There are no land dispute or court cases. The last case was in 2012 relating to the PT SMART Tbk land located in North Sumatera. The people occupied land under the company s HGU and the case was won by the company. A.6. Date Certificate Issued and Scope of Certificate Name of Client PT KRESNA DUTA AGROINDO Client Number RSPO Certificate Number RSPO Certification Decision Date Issued by PT SUCOFINDO, SBU SICS Address GrahaSucofindo, SBU SICS. Jl Raya Pasar Minggu 12of 135

13 Kav. 34 Jakarta Telephone /Fax Tel.: / Fax.: tuti@sucofindo.co.id Website Scope : Mill Langling Mill Estate Bangko Estate Projected mass balance CPO & PK CPO : 60, MT and PK : 14, MT Certification Registration Code SICS Type of Certification Single site Certifier TriyanAidilfitri Signed B. Assessment Process B. 1. Certification Body SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES (SUCOFINDO ICS), which was formed in 1994, is one of the strategic business unit that provides certification services for leading companies.sucofindocertification by International Certification Services is recognized nationally and international.quality Management System Certification by SUCOFINDO ICS has obtained accreditation from National Accreditation Committee (KAN-Indonesia). Lead Auditors and Auditors of SUCOFINDO ICS are trained professionals in the field of international standards, auditing and management systems and are registered in the IRCA (International Register of Certified Auditors) and IEMA (Institute of Environmental Management & Assessment), UK. SUCOFINDO ICS certification process is supported by experts at PT. SUCOFINDO who understand the industry sectors and services in Indonesia. SUCOFINDO ICS Operational is supported by a network of branch and representative offices of PT. SUCOFINDO spread in 45 cities across Indonesia. The services provided by International Certification Services Sucofindo are: Quality Management System Certification 13of 135

14 Environmental Management System ISO :2005 OHSAS Certification Hazard Analytical Critical and Control Point (HACCP) Certification Good Manufacturing Practice (GMP) Audit Product Certification Sustainable Forest Management Certification Products Organic Food Certification RSPO certification ISPO Certification Certification of Integrated Management System Certification (SMT) Training B. 2. Qualifications of the Assessment Team B Qualifications of the Lead Assessor and Assessment Team Tuti Suryani Sirait (Lead Auditor) : Graduated from Institute Agriculture in Bogor (IPB), 1991 She has more than 10 years audit experiences in auditing HACCP, GMP, ISO 9001:2008, ISO 22000:2005, ISPO and RSPO. She has successfully completion training RSPO by Komisi RSPO, Jakarta, SCC Standard Training by David Ogg & Partner Jakarta, ISPO Lead Auditor Training by Komisi ISPO, Jakarta, Lead Auditor Training of ISO 9000/19011 organized by SICS Sucofindo, ISO : 2005 FSMS Auditor / Lead Auditor by Moody International, Singapore; Lead Assessor for Food Safety Management System (HACCP&GMP) by QAS Sydney, Australia and Social Lead Auditor Training (SA 8000) from Social International Audit (SIA), Turkey. She is actively participated in RSPO meeting to discuss RSPO P & C and also as a trainer in 14of 135

15 ISPO Lead auditor training. Nuzwardi Sjahwil (Auditor) He graduated from Institutee Agriculture of Bogor (IPB). He has more than 5 years audit experiences in OSHAS and SMK3. He has successfully completion from Lead auditor for SMK3, Lead Auditor for OHSAS and Lead Auditor for ISO He has successfully completion training RSPO by Komisi RSPO, Jakarta, ISPO Lead Auditor Training by Komisi ISPO, Jakarta, and Supply Chain Training. Rizky Qomaruzaman (Auditor) Lead Auditor SMK3 since year 1997 till now. Lead Auditor OHSAS since year Auditor ISO since Premises visited: many various industries, petrochemical, oil & gas, EPC, general contractor, Palm Oil Plantation and Mill, chemical, pulp & paper, coal mining, cement industries, and so on. Attended Green Company Training year 2008, He has successfully completion from ISPO lead auditor course year 2013, attended RSPO lead auditor Course at KL year 2013, attended environmental seminar (Environmental Audit) from Environmental Ministry Republic Of Indonesia year Perigia Ariromas (Auditor) Graduated from ITB. She has successfully completion Lead Auditor Training RSPO by Proforest, Lead Auditor Training ISPO by Komisi ISPO, Jakarta, Lead Auditor IRCA Training of ISO 9001:2008 and Lead Auditor Training IRCA ISO 14001: Ganjar Gumelar (Auditor): He graduated from University of Gadjah Mada (UGM), Forestry Faculty, majoring in Forest Management, Yogyakarta. He has completed the training such as Indonesian Sustainable Palm Oil (ISPO) auditor training, Komisi ISPO Ministry of Agriculture & Komisi Akreditasi Nasional (KAN), Bogor (West Java) & Pangkalan Bun (Kalimantan), Indonesia, 2013 ; ISO 9001 : 2000 Quality Management Systems (QMS) Auditor/Lead Auditor Training Course (IRCA), PT. SUCOFINDO (Persero), Jakarta, Indonesia, 2013 ; Awareness Hazard Analysis Critical Control Point (HACCP), PT. SUCOFINDO (Persero), Jakarta, Indonesia, 2013 ; Assessor Training High Conservation Value Forest 15of 135

16 HCVF, Tropenbos International Indonesia Program, The Nature Conservancy (TNC), WWF Indonesia & Institut Pertanian STIPER (INSTIPER) Yogyakarta, Yogyakarta, Indonesia (2011). B.3. Assessment Methodology B General Overview The assessment was carrying out in conformity with the SBU SICS RSPO manual and procedures for auditor and certifier. The assessment was conducted by qualified auditors and referred to RSPO standard as endorsed for the Indonesia National interpretation, RSPO Certification System, RSPO SCC Standard and RSPO SCC System. Partial certification audit will be conducted separately to check compliance with Final RSPO Certification System for partial certification. The opening and closing meeting was conducted at the Office Bangko Estate-Jambi and then continue in Mill s and estate s offices. Stakeholders meeting was conducted twice, firstly was held during preliminary assessment and secondly during Certification audit. At the opening meeting, the team audit confirm to conduct the audit at : Office at Bangko Estate Review the company s response for previous findings Documentation review for transparencies CSR plan and policy Internal Audit program & Management Review Meeting Land ownership and compensation mechanism Documentation of RSPO s requirement refers to P & C At estate, include : Worker interviews :OSH. Sexual, religious, racial harassment. Payment scheme, contracts. Child labor. First aid. Awareness. Chemical stores :Storage. MSDS leaflets. Herbicide mixing areas. PPE. Ventilation. Security. Field inspections: Fertilizingoperations. SOP s., Herbicide application program.harvesting sites and efficiency. Soil maps. Land preparation. Ground cover. IPM. First aiders and 16of 135

17 boxes. Soil erosion. HCV s :Identification. Management plans. Environmental Impact Assessments Riparian zones :Width. Current and future management, monitoring system Water management :Water courses. Water monitoring. Road maintenance :Program and progress of road improvement. Social amenities :Social Impact Assessments. Workshops :Oil traps. Safe working environment. PPE.Diesel tanks. Environmental waste management. Line sites :Interviews with householders. Inspection of water discharge points. Water improvement plans. Waste disposal. Local communities. Contributions made. Employment opportunities. Social impacts. Complaints procedures, Transparency. At Mill include : Mill and workshop inspections. Documentation. Worker interviews. 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. Payment scheme, contracts, union labor. Supply Chain Certification System : Incoming FFB data input, CPO/PK out going/dispatched database, marking, certified CPO & PK reporting, Document Control and related procedures. 17of 135

18 Actual Audit Programme Phase I : Prelimenary Audit Date/Time 30/09/ st Day Functions / areas / Department / activities to be audited (include related requirements) Auditor(s) Departure from Jakarta to Jambi Team Departure from Jambi to Site Team End of the day 1 01/10/2013 Day 2 nd Audit Location: Kresna Duta Agroindo Office Opening Meeting at Site - Arrangements Schedule Auditor vs auditees - Arrangements location (mill, estate and stakeholders) to be visited Document Review of : Break - Worker welfare, Union, stakeholders - Transparencies/communication, CSR program - Legality Document Review of : - Management Aspects (Internal audit, MRM, Training, Jobdesc) - Environment Aspect Document Review of : - Best Practices - OSHAS/SMK3 Document Review of : - Legality - HCV Field visit Jelatang Mill - PT. Kresna Duta Agroindo End of the day 2 All TSS GIA NZ GGU TEAM 18of 135

19 02/10/2013 Day 3 rd Audit Kresna Duta AgroIndo, Bangko Estate Environment Aspects : Water management (Water courses, water monitoring); Environment waste management, Environmental Impacts;Chemical store (Block B08 Division 5 BNGE) HCV Aspects : HGU and Land Status Estates confirmation, Riparioan zone, HCV confirmation Plantation Aspects : Herbicide Application Programme, Integrated Pest Management, Harvesting site, Fertilizing Operations, Land Preparation and Assessment (Block B04 Division 5 BNGE) Social Aspects: Meeting Stakeholders Worker Welfare: Housing, Clinic, Labour Union, Koperasi, Worker welfare Break All Visit Langling Mill & Jelatang Mill- PT. Kresna Duta Agroindo End of the day 3 GIA GGU TSS NS TEAM 03/10/2013 Day 4 th Reporting Team Break Team Closing Meeting All End of Closing Meeting All Departure from Site to Jambi All 04/10/2013 Day 5 th Departure from Jambi to Jakarta All Number of assessor participating : 4 auditors, totally 4 person Number of days spent for the assessment on site : 5 days Total number of person days used for the assessment on site :20 days 19of 135

20 Phase II : Certification Audit Date/Time 18 Nop 13 1 st Day Functions / areas / Department / activities to be audited (include related requirements) Auditor(s) Departure from Jakarta to Jambi Team Departure from Jambi to Site Team Break& Lunch Arrive at site Opening Meeting at Kresna Duta Agroindo Office - Introduction by Team Leader - Arrangements Schedule Auditor vs auditees Audit Partial of PT. KDA Team End of the day 1 19 Nop 13 Day 2 nd Audit Break Location: Kresna Duta Agroindo Office See the previous findings and Audit Against the Rules for Partial Certification Documentation Review of : - Worker welfare, Union, stakeholders - SIA, CSR Documentation Review of : - Management Aspects (Internal audit, MRM, Training, Jobdesc) - SMK3 / OSHAS Aspect - Worker welfare Documentation Review of : - Environment Aspects - Best Practices Mill Documentation Review of : - Legality - HCV& Biodiversity - Best Practices Estate 20of 135 All Team TSS NZ RQ GGU Continue audit for documentation TEAM End of the day 2

21 20 Nop 13 Day 3 rd Audit Kresna Duta AgroIndo Estate Break Environment Aspects : Water management (Water courses, water monitoring); Environment waste management, Environmental Impacts;Chemical store, hazards Handling (Block B03, B06 Division 5 BNGE) HCV Aspects : HGU and Land Status Estates confirmation, Riparian zone, HCV confirmation Legal Aspects : Boundaries Stones with Coordinate data Best Practices : Nursery, Spraying, Harvesting, IPM, Fertilizing System, Topography (Block B06, B11, G05 Division 5 BNGE) Social Aspects: Meeting Stakeholders OSHAS/SMK3 : Interview worker for PPE, reproduction protection policy, safety at work issue Worker Welfare: Housing, Clinic, Labour Union, Koperasi, working hour & overtime, sexual harassment, pays system (Block B06, B08 Division 5 BNGE) Field visit Mill PT. Kresna Duta Agroindo (Langling & Jelatang) Environment aspects, Best Practices at Mill: SMK3/OSHAS Aspects, worker welfare Contractors & Suppliers interview, TBS Receiving at Mill, SCC System End of the day 3 21 Nop 13 Day 4 th 21of 135 RQ GGU Reporting Team Break Team Closing Meeting End of Closing Meeting All Departure from Site to Jambi All Arrived at Hotel (Jambi) All 22 Nop 13 Day 5 th Departure from Jambi to Jakarta All Number of assessor participating: 4 auditors. Number of days spent for the assessment on site :25 days Total number of person days used for the assessment on site :15 days TSS NS RQ NS TSS

22 B. 4. Stakeholder Consultation B Summary of How Stakeholder Consultation was Organized Stakeholders Consultation and Company Responses Trade Unions Issue Company Responses Assessor Findings a. Workers who work overtime exceeding the government overtime hour requirements (over 14 hours/week) b. Damaged Personal Protection Equipment (PPE) is not promptly replaced because out of stock. Bangko Village (Customary leaders, religious leaders, plasma representatives, Village Chiefs) a. Complaint about dust of roads passed by FFB trucks that cross residential areas. b. No complaint related to water, air and sound pollution. c. No cases of land dispute. The last compensation process was in d. Confirmation that no worker is employed under the age of 18 years old (child labour). e. The company has given CSR assistance in the form of religious, glasses, and biogas assistance. Karya Mukti Cooperative a. The Mill s acceptance criteria of accepted and unaccepted palm fruit are not fully understood. b. FFB price has been transparent and complied with local government regulations. c. SPK has been revised and a. The companyal ready makes the rules throughout the Mills and Estates to comply with working hours and overtime payment in accordance with government regulations. b. The company will ensure the stock of each of PPE items in the office a. The company has followed up by: - Distributing circulars and displaying traffic signs of truck maximum speed limit outside residential areas: 40 km/hourandin residential areas: 25 km/hour. - Conducting regular road watering during the dry season. a. The company has conducted re-socialization to the farmer group and displayed images of accepted and unaccepted palm fruit as an aid. a. Conform b. Conform Confirmation with the public representatives: has met the communitydesires Conform Conform 22of 135

23 the scope has conformed to field actual implementation. d. Payment has been on time according to the agreement. Contractors Bpk. Mulyani (Contractor for Diesel Pump House Construction) - The agreed SPK has been available and payment has been on time. Conform B. 5. Date of Next Surveillance Visit One (1) year after date of certification 23of 135

24 C. Assessment Findings C. 1. Lead Assessor s Summary and Recommendation for Certification The management (Mill and estate) showed the commitment to the implementation of the principles and criteria of the RSPO NI-INA. The assessment has been carried out through field visit to head office, mill and estate. The public announcement for certification has published on RSPO website prior 30 days from the audit certification to give the opportunity to stakeholders for comments and feedback. There is no a grievance or complaints received from the stakeholders during 30 days of public consultation period. Team auditors also conducted separate meeting with village head, local community, union labor team, and government official representatives. There are 2 NC major, 14 NC minor and 16 observations issued during preliminary audit. The company has followed up all NCRs. At certification audit, the team issued 4 NC majors, 3NC minors and 2 observations. The company has made the corrective actions referes to majors and minors findings issued. There are 1 (one) remaining Minor non conformity and 1 (one) observation upon the completion of corrective action made by the company. The Minor Non Conformity is : The evidence of the implementation of working hours & overtime at estates and mill refers to the Manpower regulation and the observation is: The evidence of implementation of SCCS standard as Mass Balance Scheme at Langling Mill. There is commitment of management to make corrective action and for continuous improvement. There is also improved plan for social and environmental area. The audit team found that PT Kresna Duta Agroindo Langling Mill and its estates is complying against RSPO P & C approved for Indonesia. Therefore the recommendation of the Lead Auditor that Certificatre of RSPO is awarded to PT Kresna Duta Agroindo Langling Mill and its estates Signed : Tuti Suryani Sirait Date : 22 April of 135

25 C. 2. Summary Of The Findings by Criteria COMMITMENT TO TRANSPARENCY 1.1 Palm oil growers and millers provide adequate information to other stakeholders on environmental, social and legal issues relevant to RSPO Criteria, in appropriate languages & forms to allow for effective participation in decision making. The company provides information to stakeholders who are grouped based on their interests. All requests for information through a letter are recorded according to their types. There are 3 types of record books. The first is a book of Grievance and Complaint of the workers (internal) and the community. Data shows that there is no complaint up to the time of the audit. The second is a book of communication and consultation for requests and consisting of all letters coming into the company. Finally, a book of communication and response to stakeholders. The company has had SOP of Information and Request Response (SOP/SPO/SMART/LH-01). There has been a list of information that can be accessed by relevant stakeholders that vary among the mill, core estate and plasma estate. Estate Manager is responsible for providing information to the stakeholders especially relating to social aspects. The company has recorded all letters of requestand their response in the log book and ensured that the response is given within the timeframe set out in the SOP i.e. no longer than 5 weeks. All incoming and outgoing letters that belong to the category of SPO document are retained for 5 years (SOP/SPO/SMART/LH-02). During the preliminary audit, there were still letters found not yet responded in accordance with the time frame specified in the SOP. During the certification audit, Langling Mill was sampled on a request for analyzing a fertilizer with the letter no. 010/SAJE/LNGM/IV/2013 dated 23 April 2013 and has been responded with the letter dated 4 May 2013 No. 36/PUPUK/LAB- LNGM/4/2013. The file of outgoing letter was available and signed by the company (Lab). The file of incoming letter was available and presented by Bpk. Adrizal. Compliance Status : Compliance 25of 135

26 1.2 Management documents are publicly available except where this is prevented by commercial confidentiality or where disclosure of information would result in negative environmental or social outcomes The company has had a list of stakeholders and the types of information that the stakeholders can access. The list of stakeholders is of Bangko Estate and Langling Mill. Confidential documents are those documents not listed in the list of information for Stakeholders, for example, commercial data and data that may lead to negative impacts that are accessible only at the management s consent such as data of conflicts. During the preliminary audit, the company had not established a list of information that can be accessed by the stakeholders. During the certification audit, data the stakeholders can access had been available in the form of the List of Information and Stakeholders. For example, data of workers and List of workers basic Wage can be accessed by the Regency and Provincial Manpower Service. Compliance Status: Compliance 2 COMPLIANCE WITH APPLICABLE LAWS AND REGULATIONS 2.1 There is compliance with all applicable local, national and ratified international laws and regulations. The company conducts evaluation of all regulations periodically per semester and is regulated through the SOP/SPO/SMART/LH/03 (Legal and Other Requirements rev 01). The head office s Sustainability Division conducts the evaluation and the result is communicated to the units (estates and mills), and then the units select those regulations relevant to their respective estate/mill. The result of the evaluation of compliance. The Langling Mill has carried out the evaluation of regulatory compliance in employment, environmental, K3 and permit areas. For Bangko, there is evaluation of employment, environment, K3, permit and HCV. Sample is on the evaluation of the use of fertilizers through Government Regulation No. 7/73 concerning control over the distribution, storage and use of pesticides. During the audit, there was still a worker found working overtime that exceeds overtime hours prescribed by the Manpower Department (40 hours /month and overtime max. 14 hours/week). The company has made the corrective action by issuing the Circular Letter by Director of Human Resources No. 004/HR Ops/2014, stated that the overtime should be met with the government regulation. The overtime offering should also be base on vloluntary and agreed by both parties. 26of 135

27 The evidence of the implementation of the policy will be sought on the next surveillance. Compliance Status : Minor 2.2 The right to use the land can be demonstrated, and is not legitimately contested by local communities with demonstrable rights Principle Permit Decree of Governor Head of First Level Region of Jambi No. 178/1991 regarding Land Reservation for the Purpose of Oil Palm Core Estate of PT. Kresna Duta Agroindo at Perwakilan Pamenang District and Bangko District, Second Level Regency of Sarolangun Bangko with a total area of 620 Ha dated 4 May Site permit Decree of Head of Land Office of Sarolangun Bangko Regency No. 07/1998 regarding Granting of Site permit for the Purpose of Palm Estate Development of 622 Ha dated 2 June Decree of Regent Head of 2 nd Level Region of Sarolangun Bangko No. 230/1999 Regarding Granting of Site Permit for the Purpose of Palm Estate Development of 134,273 Ha dated 13 July Decree of Regent Head of 2 nd Level Region of Sarolangun Bangko No. 231/1999 Regarding Granting of Site Permit for the Purpose of Palm Estate Development of 89,433 Ha dated 13 July Decree of Regent Head of 2 nd Level Region of Sarolangun Bangko No. 232/1999 Regarding Granting of Site Permit for the Purpose of Palm Estate Development of 109,649 Ha dated 13 July HGU (Land Use Permit) The company has had HGU certificates consisting of: HGU No. 70/HGU/BPN/98 totaled 622 Ha dated 2 June 1998 to PT. KDA by Sarolangun Bangko Regency, Jambi Province. EXPIRED 24/11/2033 HGU No totaled 134,273 Ha dated to PT. KDA by Head of Land Office of Jambi Province. EXPIRED 20/09/2035 HGU No totaled 89,433 Ha dated to PT. KDA by Head of Land 27of 135

28 Office of Jambi Province. EXPIRED 20/09/2035 HGU No totaled 109,649 Ha dated to PT. KDA by Head of Land Office of Jambi Province. EXPIRED 20/09/2035 HGB No totaled 126 Ha dated 11/10/1993 by Head of Land Office of Sarolangun Bangko Regency, Jambi Province. EXPIRED 04/11/2011. KARANG BERAHI HGB No totaled 103 Ha dated 11/10/1993 by Head of Land Office of Sarolangun Bangko Regency, Jambi Province. EXPIRED 04/11/2011. JELATANG MOST CURRENT HGB: HGB No totaled M2 dated 10/10/2012 by Land Office of Merangin Regency, Jambi Province. HGB No totaled m2 dated 10/10/2012 by Land Office of Merangin Regency, Jambi Province. HGB No totaled M2 dated 10/10/2012 by Land Office of Merangin Regency, Jambi Province. Application for change of HGB into HGU dated by PT. KDA totaled 130,73 Ha, with attachment of the HGB No of 126 Ha dated by Land Office of Sarolangun Bangko Regency, Jambi Province, is different in the total land area with that of the existing HGB. SIUP (Business License) No. 929/1369-P/09-01/PB/II/99 dated 2 March Plantation Business Registration Letter No. 960/Menhutbun-VII/2000 of Jakarta Forestry and Plantation Department dated Land area : Ha - Location : Sarolangun, Bangko and Pamenang Districts, Sarko Regency, Jambi Province Product Processing Unit (UPH) - Type : Mill - Quantity : 3 (three) units - Permit capacity : 30 ton/hour, 60 ton/hour and 60 ton/hour - Installed capacity : 30 ton/hour, 60 ton/hour and 60 ton/hour 28of 135

29 Limited Liability Company Registration Certificate No , valid until 01/09/2013. The company is formerly known as PT. Kresna Duta Agro-Industri and renamed PT. Kresna Duta Agroindo. Change of company name was strengthened by the Notary Deed dated 25 November 1986 (John Leonard Waworuntu) and strengthened in Decree of the Ministry of Justice No. C2-6196HT Th September Checking of the BPN boundary markers was carried out during field visit stage 1, among others : a. Sample BPN/KDA 06/XXXIV marker with coordinates of ,39 E and ,78 N UTM b. The sample BPN/KDA XXV marker is a supporting marker with coordinates of E and N UTM. Because the position of BPN/KDA XXV marker is adjacent to the community estate land, and during the field checks there was a shift of ± 4 meters from its original position into the community estate land. The company moved the marker into the area of PT KDA. The company should make minutes of BPN/KDA XXV marker relocation to avoid conflicts that may occur in the future. At stage 2 the company has made Relocation Minutes of BPN Marker No. XXV based on the letter from Mr. Arfandi Ibn Hajar (owner of the adjacent land) on 3 December 2011, concerning the position of marker on the border area between PT KDA and its adjacent area, so the PT KDA shifted the BPN markers approximately three (3) meters towards the area of PT. KDA with coordinates of S and E signed by the Legal & Environment and Estate Manager. c. The sample BPN/KDA 08 marker coordinates is E and N but the proper coordinates should be E and N. It was found in the field that BPN/KDA 08 marker was not placed properly, because at the same time the older BPN marker was found. BPN/KDA 08 marker should be placed at the position of marker as determined by BPN. In stage 2 the company has had the record of Minutes of BPN Marker Relocation on Saturday, located at Division 5 of Bangko Estate. The Original Coordinates of S and E have moved to coordinates of S and E. It is signed by HCV Officer, Legal Officer and Estate Manager. The documentation photographs of marker relocation are available. The company has the Record of Maintenance of Bangko Estate (BNGE) Boundary Marker 29of 135

30 2013 with criteria : a. Checklist implementation b. Marker repairs c. Painting d. Marker location clearing The company is advised to add Marker Coordinate Monitoring criteria to avoid shifting or moving of the marker. In the stage 2 the company has added the criteria of Coordinate Point Monitoring on the Form of BPN Marker Maintenance. BPN boundary marker check has been conducted during site visit stage 2 as follows: a. Marker of BPN HGU KDA002 Division 4 with coordinates of S E located nearblock B10 b. Marker of BPN HGU KDA003 Division 4 with coordinates of S E located nearblock B09 c. Marker of BPN HGU KDA004 Division 4 with coordinates of S E located nearblock B02 d. Marker of BPN HGU KDA015 Division 4 with coordinates of S E located nearblock B05 e. Marker of BPN HGB KDA002 Division 4 with coordinates of S E located nearblock C02 f. Marker of BPN HGB KDA006 Division 4 with coordinates of S E located nearblock A04 g. Marker of BPN HGB KDA009 Division 4 with coordinates of S E located nearblock A05 The company has data of BPN HGB marker points and advised to maintain markers that exist in company area, not the BPN HGU markers only. It is because during the field visit stage 2 the BPN HGB markers were found dull and marker identification number was missing. During preliminary audit, it was found that the company does not have a HGU for the estate at division 4 of Bangko Estate of 218 HA. The company has submitted an application for HGU of Ha and Ha. Recent data available is cadastral measurement map. (Major Stage 1 & 2). The company has made the corrective action by getting the HGU from Prov.of Jambi issued on 30of 135

31 20January2014, with a total area of hectares. They are : 1. HGU No. 01/HGU/BPN.15/2014datedJanuary 20, 2014is locatedinkarang Berahi Village, Pamenang, Merangin District, Jambi Province with area details: - NIB total area 92,89 hectares - NIB total area 33,07 hectares Located in the Jelatang village, Pamenang, Kab. Merangin District, Jambi Province with area details: - NIB total area 81,56 hectares 2. HGU No. 02/HGU/BPN.15/2014datedJanuary 20, 2014is locatedinkarang Berahi and Jelatang Village, Pamenang, Merangin District, Jambi Province with area details: - NIB total area 4,76 hectares - NIB total area 5,80 hectares Total HGU s are 218, 08 hectares Compliance Status : Compliance 2.3 Use of land for oil palm does not diminish the legal rights, or customary rights, of other users, without their free, prior and informed consent. There is SOP for Land Conflict Settlement (SOP/SPO/SMRT/LH-04). So far the company and meetings with stakeholders provide information that there is no dispute in the period of 2010 until the present time in the area around the company. It has been stated in the SOP to prioritize deliberation over legal action. Compliance Status:Compliance 3 COMMITMENT TO LONG-TERM ECONOMIC AND FINANCIAL VIABILITY 3.1 There is an implemented management plan that aims to achieve long-term economic and financial viability The company has a long-term plan in the form of the projection. The document has projected the following: - Projected Profit 31of 135

32 - Production assumptions of CPO, PK & FFB - Cost assumptions - Cost of production for Estate & Mill and cost/ton of FFB calculation has been carried out. Company s short term plan sets out annual budget. The document of Budget 2013 has been available for mills & estates. Review is carried out every 4 months of the target set to check its realization. Corporately, the company performs a review annually. The company reports the realization of operations on a monthly basis and corporately reports annually. The oldest plants are those planted in Based on the projection data and taking into consideration of the fact that the number of stands is over 125 trees per hectare and the production is over 16 ton/ha there is no replanting plan until 2020 since it is considered economically still profitable. Compliance Status: Compliance 4 USE OF APPROPRIATE BEST PRACTICES BY GROWERS AND MILLERS 4.1 Operating procedures are appropriately documented and consistently implemented and monitored The company has Land Preparation Technical Guideline SOP (Oil Palm) which is a collection of SOP and WI related to new planting preparation. Issued on 01/07/2010. The company has had SOP-WIfor Oil Palm Cultivating Techniques prepared corporately under the management of Smart, Tbk under the Management Committee Agronomy and Research (MCAR), The SOP-WIcollection for Oil Palm Cultivating Techniques covers the following activities: - CHAPTER I New Planting Plan SOP SOP/SMART/MCAR/I/TA-PPA - CHAPTER II Replanting Plan SOP SOP/SMART/MCAR/II/TA-PRP - CHAPTER III Nursery SOP SOP/SMART/MCAR/III/TA-BBT - CHAPTER IV New Land Clearing SOP SOP/SMART/MCAR/IV/TA-PLB - CHAPTER V Planting SOP SOP/SMART/MCAR/V/TA-TNM - CHAPTER VI Replanting SOP SOP/SMART/MCAR/VI/TA-RPL - CHAPTER VII Plant Disease and Pest Control SOP SOP/SMART/MCAR/VII/TA-HPT 32of 135

33 - CHAPTER VIII Weed Control SOP SOP/SMART/MCAR/VIII/TA-PGM - CHAPTER IX Fertilizing SOP SOP/SMART/MCAR/IX/TA-PPK - CHAPTER X TBM Maintenance SOP SOP/SMART/MCAR/X/TA-PTB - CHAPTER XI Preparation for Harvest SOP SOP/SMART/MCAR/XI/TA-PMP - CHAPTER XII TM Maintenance SOP SOP/SMART/MCAR/XII/TA-PTM - CHAPTER XIII Harvest SOP SOP/SMART/MCAR/XIII/TA-PNN - CHAPTER XIV FFB Loading and Transport SOP SOP/SMART/MCAR/XIV/TA-PPT - CHAPTER XV Rainfall Measurement with Ombrometer SOP SOP/SMART/MCAR/XV/TA- PCH - Land Clearing SOP (SOP/SMART/MCAR/IV/TA-PLB), rev.0, issued 1/9/2012. On the point Shaping regulates on: terracing and horse-shoe shaping. - There is a Circular Letter No. 071/SMD OPS/IX/2007 dated concerning Prohibition to clear lands by burning relating to the letter of the Minister of Agriculture No. 184/LB.130/M/8/2007 concerning prohibition of land clearing by burning. The circular letter provides: a) Wild fire prevention patrol b) Prepare fire squad and fire extinguishing facilities c) Assist Local Government should a fire occur in the estate location d) Make fire hazard warning signs e) Don t clear land or cultivate land by burning Land Preparation Activity includes : - Clearing-Blocking IK/SMART/MCAR/IV/TA-PLB/01- Clearing Blocking - Road Making SOP/SMART/MCAR/I/TA-PPA and IK/SMART/MCAR/1/TA-PPA/02-Road Making - Drainage Making IK/SMART/MCAR/1/TA-PPA/01-Drainage - Ex Lalang Land Preparation - Chemical System, Extermination of lalang chemically using glifosat or sulfosat with recommended dose of 6-10 liter/ha, IK/SMART/MCAR/IV/TA-PLB/02 - Preparation of Ex Mineral Secondary Forest Land (Slashing, Felling, Piling, Heaping, Path 33of 135

34 Clearing, Terracing). Terracing includes : Contour Terracing on hilly areas with a gradient of Contour terraces of 4.5 m to 3 m wide are made mechanically; SOP/SMART/MCAR/I/TA-PPA and IK/SMART/MCAR/I/TA- PPA/03. From the samples taken during the field visit in Block 04 planting year 1994 Division 5 BNGE known that the slope is 20%, using a clinometer measurements. This result is suitablewith thecompany record that that block is a hilly area. Horse-shoe shaped, certain parts of areas possible for planting but unable to be contour terraced should be horse-shoe shaped of 2.5 m wide to follow the contour. Nursery SOP is available (SOP/SMART/MCAR/III/TA-BBT, rev. 00, 1/9/2012) and IK/SMART/MCAR/III/TA-BBT/06, Seedling Acceptance and Planting, covering the following activities: - Establish oil palm nursery in which nursery is undertaken in stages of Pre Nursery (PN) of 3-4 months, Main Nursery (MN) of months and Advance Planting Material (APM) a cultivation period until 38 months old. - Nursery site determination, Nursery area calculation, Land preparation, Irrigation system, Planting media preparation, Seedling acceptance and planting, Watering, Weed Control, Pest and Disease Control, Fertilizing, Selection. - Selection-Culling. If seedlings stay in the nursery for a longer period, they should have a final selection before being loaded and transported to the field. - The company has issued a Memorandum from RC Jambi 1 No. 067/RC-MNGR/08/2013 dated 10 August 2013 regarding the use of certified seedlings as a proof of commitment to the established SOP and WI (conformance). It confirms that seedlings to be planted must be those seedlings that have obtained recognition from the government and with certificate issued by authorized agencies. - There is form of Oil Palm Seedling Selection Sheet (FORM/III/TA-BBT/06-Seedling Acceptance and Planting/01 Selection. - IK/SMART/MCAR/III/TA-BBT/08-Selection PN (Pre Nursery) - There is form of Pre Nursery Oil Palm Seedling Selection Sheet (FORM/III/TA-BBT/08- Selection PN/01, rev.00, Rejected seedlings are classified into: RL, C, TS, CM, TS, etc. 34of 135

35 - The seed used is in principle of Marihat Variety of Seedlings (BNGE Division 4 is seedlings and BNGE Division 5 is Seedlings). It is strengthened by a Certificate from the Plantation and Forestry Service of Merangin Regency with Certificate No: 525/857/Disbunhut/XI/2013 stating that oil palm seedlings used by PT. Kresna Duta Agroindo, Bangko estate from 1993 are seedlings from certified seedling sources that have obtained recognition from government. It is because after tracing the seedling certificate of the previous owner of the estate was not found. - PT. KDA BNGE does not have a nursery site, the seedlings are supplied from Pelakar Estate Nursery, and thereby BNGE does not have documentation concerning the treatment of seedlings that are not meeting the requirements. - The company has Form of Oil Palm Seedling Selection that explains about the types of rejects, including: TJ = Unclear radikula (white) and/or plumula (yellow) RB = Rotten Radikula or rotten Plumula RS = Parallel Radikula and Plumula J = Fungi TN = Abnormal or damaged Lant Cultivation SOP, covering : SOP OF CULTIVATION OF NONPRODUCTIVE PLANTS WORK INSTRUCTION OF TREE CENSUS WORK INSTRUCTION OF INSERTING WORK INSTRUCTION OF MEASURING PLANT GROWTH WORK INSTRUCTION OF HARVESTING PLATFORM CONSTRUCTION AND INSTALLATION WORK INSTRUCTION OF PALM CIRCLE, HARVESTING PATH, CONTROL PATH AND COLLECTION PATH MAINTENANCE SOP OF PREPARATION FOR HARVEST WORK INSTRUCTION OF INSECT SOP/SMART/MCAR/X/TA-PTB IK/SMART/MCAR/X/TA-PTB/01-Sensus Pohon IK/SMART/MCAR/X/TA-PTB/02-Penyisipan IK/SMART/MCAR/X/TA-PTB/03-Pengukuran Pertumbuhan Tanaman IK/SMART/MCAR/XI/TA-PMP/04-Pembuatan dan Pemasangan Titi Panen IK/SMART/XII/TA-PTM/01-Perawatan piringan jalan rintis, jalan kontrol dan TPH SOP/SMART/MCAR/IX/TA-PMP IK/SAMRT/MCAR/XI/TA-PMP/01-35of 135

36 POLLINATOR DEVELOPMENT WORK INSTRUCTION OF CASTRATION WORK INSTRUCTION OF SANITATION WORK INSTRUCTION OF HARVESTING PLATFORM CONSTRUCTION AND INSTALLATION WORK INSTRUCTION OF PALM CIRCLE, HARVESTING PATH, CONTROL PATH AND COLLECTION PATH MAINTENANCE SOP OF CULTIVATION OF PRODUCTIVE PLANTS WORK INSTRUCTION OF CENSUS WORK INSTRUCTION OF PALM CIRCLE, HARVESTING PATH, CONTROL PATH AND COLLECTION PATH MAINTENANCE SOP OF FROND STACKING MAINTENANCE SOP OF WEED EXTERMINATION SOP OF ROAD, TRENCH AND BRIDGE MAINTENANCE SOP OF PEST AND DISEASE CONTROL WORK INSTRUCTION OF PRUNING AND FROND ARRANGING SOP OF FERTILIZING SOP OF HARVESTING ATTACHMENT WORK INSTRUCTION OF MILL CRITERIA OF RIPE FRUITS WORK INSTRUCTION OF HARCESTING SOP OF LOADING AND TRANSPORTING FFB WORK INSTRUCTION OF FFB LOADING WORK INSTRUCTION OF FFB TRANSPORTING WORK INSTRUCTION OF NET AND SEAL INSTALLATION Pengembangan Serangga Penyerbuk IK/SAMRT/MCAR/XI/TA-PMP/02- Kastrasi IK/SAMRT/MCAR/XI/TA-PMP/03-Sanitasi IK/SAMRT/MCAR/XI/TA-PMP/04-Pembuatan dan Pemasangan Titi panen IK/SMART/MCAR/XII/TA-PTP/01- Perawatan piringan, jalan rintis, Jalan kontrol dan TPH SOP/SMART/MCAR/XII/TA-PTM IK/SMART/MCAR/X/TA-PTB/01-Sensus Pohon IK/SMART/MCAR/XII/TA-PTP/01- Perawatan piringan, jalan rintis, Jalan kontrol dan TPH SOP/SMART/MCAR/VIII/TA-PGM SOP/SMART/MCAR/VIII/TA-PGM SOP Pembukaan lahan Baru SOP/SMART/MCAR/IV/TA-PLB SOP/SMART/MCAR/VII/TA-HPT IK/SMART/MCAR/XII/TA-PTM/02-Penunasan dan penyusunan pelepah SOP/SMART/MCAR/IX/TA-PPK SOP/SMART/MCAR/XIII/TA-PNN LAMP/XIII/TA-PNN/01-Criteria Kematangan Buah di PKS IK/SMART/MCAR/XIII/TA-PNN/01-Panen SOP/SMART/MCAR/XIV/TA-PPT SOP/SMART/MCAR/XIV/TA-PPT/01- Pemuatan FFB SOP/SMART/MCAR/XIV/TA-PPT/02- Pengangkutan FFB SOP/SMART/MCAR/XIV/TA-PPT/03- Pemasangan jaring dan segel - Non-Productive Plant (TBM) Cultivation no longer exist because the youngest is of the planting 36of 135

37 year Productive Plant Cultivation (TM)includes : 1. Tree census, 2. Maintenance of Palm circle, harvesting path, control path, and TPH 3. Frond stacking maintenance 4. Weed extermination 5. Road and bridge maintenance 6. Pest and disease control 7. Pruning and Frond Arrangement Cultivation activities are recorded on: - Foreman Activity Log Book (BKM) daily, there is BKM dated 12/09/2013 at Division 5 of cultivation activities. - Work Production Log Book (BHK) contract work. - For the Core, the result of BKM and BHK is entered into Checkroll program (SAP). For Plasma, BKM is recapitulated into Plant Cultivation Report. Data is available on Biological Control Agent Cultivation of Turnera Subulata planting that includes: Division 5 BNGE, Planting Year 1994, Block B04, October 2013, Actual area of 85 Ha. Division 5 BNGE, Planting Year 1994, Block G05, October 2013, Actual area of 66 Ha. Division 5 BNGE, Planting Year 1995, Block B06, October 2013, Actual area of Ha. Division 5 BNGE, Planting Year 1997, Block G03, October 2013, Actual area of 10 Ha. Division 5 BNGE, Planting Year 1997, Block G07, October 2013, Actual area of 45 Ha. - Records are available on rat census of October As samples, at Division 5 the number of trees attacked are 217 (1.5 %) out of trees censuses. From the outcome it can be concluded that the attack remains below the critical threshold limit of 5 % for Productive Plant. IK/SMART/MCAR/VII/TA-HPT/07- Census and Rat Control. - Records are available on Data of Cultivation of Biological Control Agent (Useful Weeds) of Anti Gonon leptopos of October at BNGE Division 5, Planting Year 1994, Block B04, October 2013 totalled 85 Ha of Actual areas and at BNGE Division 5, Planting Year 1994, Block G05, 37of 135

38 November 2013 totalled 36.5 Ha of Actual areas. The company has had records of plant cultivation in the productive plant (TM), including: - UPDKS detection - Palm circle spraying, harvesting path and TPH - Spraying anak kayu weeds - Manual Circle Weeding - Fertilizing - Host plant cultivation Pruning (Records are available of Maintenance Pruning Program and Realization 2011, 2012 and 2013 on a monthly basis). During the visit there was no fertilizing activity because fertilizing activity for 2013 semester 2 has completed in September This can be seen from the Monthly Work Plan of October 2013 and December 2013 where there were no fertilizing activities found. FFB Acceptance During the audit, one truck from plasma of Bukit Bungkul division 5 was inspected; when the fruit was coming there was no representative from the plasma. Parameters for the penalty include: 1. Unripe fruit, 5 kg per bunch penalty 2. Long staks (above 2.5 cm) : 2 kg per bunch penalty 3. Unfresh fruitlet, the total is estimated in kg 4. Artificially ripening fruit: 5 kg per bunch penalty 5. Rotten fruit is returned 6. Garbage: the total is estimated in kg Price as of 2 October 2013 was Rp / kg, whereas the price from the Plantation Service was 1387/kg for % yield. Price information is passed by the organization to plasma manager through short messages and the manager of plasma passes it to the KUD through short messages. The price information is then displays in the KUD office. Data of FFB processed in 2012 is kgwith details as follows: 38of 135

39 Bangko estate TSRA (KKPA) Pamenang plasma Bangko plasma Bukit Bungkul Plasma Sungai Bengkal estate (inti) Kilis Estate (inti) Kilis KKPA Batang gading estate (inti) Buah luar (outgrower) muara kilis kg kg kg kg kg kg kg kg kg kg The result of Processing (CPO and Inti Sawit) in 2012 is as follows Working hours throughout hours CPO production ,014,366 kg (20.96%) Kernel production 14,931,665 kg (5.21%) The detail of Langling Mill performance as of 18 November 2013 is as follows: Parameter Hari ini s/d bulan ini Year to date Target TBS (kg) OER (%) 21, ,57 22,50 Berondolan di tandan kosong (%) 0,016 0,016 0,017 0,030 Minyak di TKKS (%) 0,320 0,312 0,326 0,300 Minyak di serat (%) 0,592 0,595 0,596 0,580 Minyak di biji (%) 0,041 0,040 0,040 0,040 CPO (kg) %FFA 4,036 3,518 3,279 < 3,000 Kernel (kg) throughput 60,69 60,29 58,25 57 The processing procedure is contained in SOP-Pengolahan/review/MCMD#1/2010 (from FFB receipt to storage). The process is outlined as follows: Loading ramp 39of 135

40 The fruit was received at the loading ramp, and then using a lori it is sent to the sterilization. Boiling and threshing The boiling uses 3 peaks, the first peak is at 1.5 bar, the second peak is at 2.5 bar and the third peak is at 3 bar, held for 46 minutes. Total boiling time is 85 minutes. The setup of boiling time and pressure is regulated by PLC. Fruit in the lorries after boiling is transported using a hoisting crane to the thresser. After the thresser, empty fruit bunches are also sampled, and their unstrip bunch is analyzed with a standard maximum of 2.5%. This is, among other things, to find out how well the boiling process works. High unstrip bunch may indicate that the process of boiling is not complete so that many of the fruit is unstripped. Level of oil in the empty bunch after thressing is also analyzed with the standard maximum of 1.8 percent, this is to find out how well the disposal process of condensate works, otherwise if it is not well disposed the fruit bunches/ffb will be saturated with the condensate. Now the condensate is not sampled anymore because it is reused as dilution water. Extraction Cake (mixture of fibers and kernels after pressing) is also sampled. The parameters measured are oil dry base in fibers with standard not exceeding 7 percent, nut oil losses with standard not exceeding 1 percent, and also the broken nut with the standard of 14%. Both aim to see if pressure of the pressing has been optimum. Pressing with too low pressure will result in high oil level in the fibers, while too high pressure will produce high broken nuts. Currently used pressure norm is 50 psi. Purification Samples are also taken at vibrating screen to ensure the composition of oil and water in the right proportion, as the basis for dilution in order to facilitate the separation of oil and water in the CST (continous settling tanks). The parameters analyzed are water content where it is kept in the range of 20 30%, and the oil is kept in the range of 40%. Samples are also taken from under flow, the oil content must be < 10% to ensure that more sludge is resulted to be separated later at slugde centrifuge. To ensure the sludge centrifuge is well functioned, sludge samples are taken after sludge centrifuge. Oil level in the sludge after the centrifuge should be less than 12 percent, meaning 40of 135

41 the equipment is functioning properly in separating oil and sludge. Production oil is sampled after vacum drier for the FFA quality. Before and after the vacum drier samples are taken for the moisture content to ensure that drying process in a vacum has worked properly. The final quality of CPO can be seen from FFA, water content and impurities parameters. Samples are taken from one of the CPO tanks. Nut processing Nut shells are broken on ripple mill. To see the efficiency of the ripple mill the output of ripple mill is sampled. The output measured is whole nut, broken nut, whole kernel and broken kernel. This is to determine or adjust the opening of ripple mill, if too tight there will be a lot of broken nut, broken kernel, if too loose there will be many whole nut or unbroken nut. Nuts that have been broken into shell and kernel are then separated using claybath. A sample is taken after the clay bath before entering the silo kernel at hydro shell, which is the broken kernel, with the standard of no more than 1 percent. This is to find out how much the broken kernel carried with the shell. Boiler Langling Mill has two units of boiler operated at 20 kg/cm2, the permit is at kg/cm2. The steam production is 20 ton per hour, the setting of parameters on the boiler has been using a PLC. Every 15 minutes it will be shoot blowing automatically. From field observations, smoke coming out of the stacks is still containing shell charcoal, This is because the cyclone does not work properly. Power plant Electricity is generated by 2 units of steam turbines and one unit of diesel generator. During the audit the quality of electricity generated is good as seen from the voltage at 380 V, the frequency at 50 Hz in and the cos phi at 0.9, and at the load of 600 KW during the field visit looked working properly BPV (Back Pressure Vessel) Back Pressure Vessel is used as a place for storing steam coming out from the steam turbine that will be used for other purposes especially for boiling. During the audit it is seen to use the pressure of 2.5 Kg/cm2 (below the permitted pressure of 3 kg/cm2). 41of 135

42 Maintenance The schedule of general maintenance is listed in the schedule of maintenance 2013, which also specifies the daily, weekly and monthly maintenance. Special maintenance was carried out by third party in the form of a services contract such as the maintenance of hoisting cranes, boilers, and turbines. The examination of hoisting crane through a service contract is carried out 3 times a year. In 2013 it was implemented on November for both cranes, based on service report no and from the person who perform the maintenance. In addition, maintenance was also performed on crane girder and crane weld. The inspection was conducted by the MHE Demag Indonesia. The inspection of Boiler, sterilizer and BPV, deareator : PT. Multi Ganda; instrument inspection is 2 times a year in 2013 i.e. in Februari-March and early in September. Steam turbine is inspected 2 times a year; last inspected in April Point of inspection has covered the function of manual hand trip, overs peed trip, load test and low oil pressure test. Load test is carried out on a load of 400 KW. It has been technically suitable because the load test was performed on the load above the paralytic load (30 percent of the maximum load). Compliance Status: Compliance 4.2 Practices maintain soil fertility at, or where possible improve soil fertility to, a level that ensures optimal and sustained yield - SOP/SMART/MCAR/V/TA-TNM, 1/9/2012. Planting SOP - There is IK/SMART/MCAR/V/TA-TNM/01- Lining of Flat to Wavy Areas. - SOP and or WI sets 136/ha density. The SOP mentions that the density of plant is 136 trees/ha, the space between trees (equilateral triangle) is 9.21 m and the distance between the perpendicular line is 7.98 m. - There is IK/SMART/MCAR/IV/TA-TNM/02: Lining of Hilly Area, containing information of Table of Terrace Distance, Planting Space within Terrace and Tree Population. - There is no data of planting plan and realization because there are no planting activities throughout the Bangko Estate (BNGE). 42of 135

43 The company has had the records of realized planting of oil palm that contains information about estate name, year of planting, planted area. Planting based on recent data of October 2013 is: Division 5 BNGE Year 1994 : ha Year 1995 : ha Year 1997 : ha Thereby the total of TM planting area for PT. KDA is 861,86 Ha. There is a memorandum of Laboratory Analysis Result ref. 019/TANAH/LAB-SMARTRI/I/2013 dated 25 January 2013 concerning Soil Sample Analysis Result of Soil Sampling Unit (SSU) BNGE with a total of 84 samples (No. Lab ) with request for routine analysis without texture + Cu, Zn, Fe, Mn, B. There is the Result of Soil Sample Analysis carried out by SMART Research Institute-Analytical Laboratory. There is a memorandum of Laboratory Analysis Result ref. 110/DAUN/LAB-SMARTRI/III/2013 dated 16 March 2013 and 205/DAUN/LAB-SMARTRI/IV/2013 dated 6 April 2013 concerning Leaf Sample Analysis Result of Leaf Sampling Unit (LSU) BNGE with a total of 37 samples (No. Lab and ) with request for the analysis of N, P, K, Mg, Ca, B, Cl. Based on the result of soil and leaf analysis a fertilizing recommendation was issued in 2012, for example: Block B3 of Division 5 has a fertilizer dosage of RP 1 Kg/Tree/Year, MOP 1 Kg/Tree/Year, Borate Kg/Tree/Year and Compost 70 Kg/Tree/Year. Compliance Status: Compliance 4.3 Practices minimize and control erosion and degradation of soils The company has Erosion Measurement SOP, PT KDA BNGE/SOP/28, Revision: 00, effective date 1 August 2013 for Bangko Estate (BNGE) area. There is River Border Protection SOP of SOP/SPO/SMART/LH-06, effective date 1 July 2010 revision: 01 There is River Border Protection SOP of SOP/SPO/SMART/LH-07, effective date 1 July 2010 revision: 01 43of 135

44 There is Circular Letter from RC Jambi 1 No. SE-RC/KDA/10/2013 dated 1 October 2013 concerning Watershed Protection that specifies palm oil free zone of 50 meter from river banks. Information dissemination to workers and community/farmers around the estate is notice boards on the prohibition to use river, e.g. no fishing, no fire, no planting. The company has had a Semi detailed Land Map, Site Map, soil type map, solumn depth, drainage, soil suitability class and Topographic map of 1: scale no. reg : 540/202/PMNP/IV/12 and River Map of PT. KDA Area No. Reg. 1359/214/PMNP/XI/13 of 1: scale. River Border Protection is to clear from oil palm trees the areas 50 meters from river edges, and the river banks are planted with bamboo species to prevent erosion. Information dissemination to workers and community/farmers around the estate is by means of notice boards prohibiting the use of river, e.g. no fishing, no fire, no planting. Type of activities includes: - Terresan - Pit Pond - Establishment of LCC - Weed Management - Frond Arrangement - Empty Bunch Mulch Company policy related to soil and water conservation includes : - Prohibit the planting of palm in the river boundary area of 50 meter to the left and right of the river. In the estate, Mampun River and Blengo River have width < 7 meter. - Prohibit the cultivation of land in the river boundary area by placing notice boards. - Build a bordering road between the planted/managed area and the protected area. - Make a prohibition related to river boundary area (50 to the left and right of the river) planted and maintained manually and free from chemicals. The principle 4.1 describes that: Preparation of Former Mineral Secondary Forest Land (Slashing, Felling, Piling, Heaping, Path Clearing, Terracing). Terracing includes: 44of 135

45 Contour Terrace Contour terrace of 4.5 m to 3 m wide is made mechanically on a hilly area with slope gradient of 9-22 SOP/SMART/MCAR/I/TA-PPA and IK/SMART/MCAR/I/TA- PPA/03. Horse shoe (Tapak Kuda), certain parts of the area possible for planting but unable to be contour terraced should be horse-shoe shaped of 2.5 m wide following the contour. There is Work Instruction of IK/SMART/MCAR/III/TABDT/06- Peat Land Cultivation WI Rev.00 dated 26 March However, the area of PT. KDA has no peat land. There is Memorandum of Prohibition to Clear Peat and Primary Forest Area No. 039/SMD OPS/III/2010 dated 26 March There is no Peat land in the area of PT. Kresna Duta Agroindo which is evidenced by semi detailed map indicating that all of the area is mineral soil, which was confirmed during the site visit where no peat area was found. There is no Peat land in the area of PT. Kresna Duta Agroindo which is evidenced by semi detailed map indicating that all of the area is mineral soil, which was confirmed during the site visit where no peat area was found. Compliance Status : Compliance 4.4 Practices maintain the quality and availability of surface and groundwater. The company has identified the source of water in the estate and mill areas i.e. Mampun River and Belango River. Protection of watersheds is by setting 50 m wide to the left and right of the rivers as a conservation area. Alongside 5 trees to the left and right is not sprayed. Among those realized are the instalation of notice board that read PROTECTED RIVER BOUNDARIES. Management programs for river water in the area of Langling Mill are Mampun River water quality monitoring. The testing parameters for river water measurement refer to the Government Regulation 82/2001. River water quality testing was carried out by BLHD of Jambi Province on 5 June 2013 for Mampun River Upstream & Downstream. The test results show that ph and BOD values are above the quality standard for water quality class II. RKL/RPL report has evaluated this condition i.e. low ph which is due to acidic soil in the initial condition and BOD which is due to activities outside the oil palm estates & mills. In managing Mill s liquid waste, the company built a WWTP with a capacity of 68,000 m 3 (52,000 45of 135

46 is active and 16,000 is Non-active). None of the waste is dumped into a water body or soil since the waste is applied on land. Monthly observation of waste quality is carried out by external laboratory of BLHD of Jambi Province with sampling points at the pond outlet 5. Testing parameters are BOD, COD, ph, oil-grease, Pb, Cu, Cd, Zn, which refer to Decree of the Minister of Environment No. 28/2003. The test result of January July 2013 shows that BOD & ph complies with the quality standards. Every 3 months an analysis is carried out on the water quality of monitoring well I, II and III (wells located at residential area). Parameters measured are BOD, DO, ph, NO 3, NH 3, Cd, Cu, Pb, Zn, Cl and SO 4. The result of recent test was that of 5 June The results for monitoring well I, II and III show that BOD and ph comply with the quality standards. The result of test for residential wells 1 and 2 at worker housing is below the quality standard for ph. It is for MCK (bathing, washing and toileting) only, while for drinking the clean water from the mill is used. The source of water for Langling Mill s process comes from artificial reservoirs with a capacity of 70,875 m 3. The source of the reservoir is river water. The use of water has been recorded on a daily basis i.e. the use of water for mills and the use of water for housing. Data of water use in the mill for June 2013 is 26,798 m 3 and the efficiency is 1,191 ton/ffb (Budget: ton/ffb) Compliance Status: Compliance 4.5 Pests, diseases, weeds and invasive introduced species are effectively managed using appropriate Integrated The company establishes a procedure for handling agrochemicals in the SOP of Pest and Disease Control (SOP/SMART.MCAR/VII/TA-HPT, 1/9/2012). List of agrochemicals used by the company has been available covering brand, active ingredient and permit for circulation in Indonesia. Monthly use of pesticides has been recorded in the report of agrochemical toxicity data. The report has included amount of application, total active ingredient, FFB production and toxicity unit. During the field visit to Division 5, block B-3, Glyphosat and Methyl Metsufuron was being applied. The dosage has been in compliance with the recommendation. The use of restricted pesticides like paraquat is still found but the company has a policy to reduce the application of paraquat herbicide. Chemicals used by the estate have no paraquat active ingredient of Dichloride, Glyphosate Isopropyl Amine, Methyl Metsufuron, Triklopir Putoksil Ethyl Ester, and Deltametrin. Training programs on Restricted Pesticide are available dated , attended by 12 46of 135

47 participants who have signed the attendee list. Training materials, training evaluation and training-related photo documentation are available. The certificate has a validity period of 5 years (Valid until 31 October 2016) issued by the Commission for Fertilizer and Pesticide Control of Jambi Province. Materials presented were Integrated Pest Control (PHT), Palm Leaf Eating Caterpillar (UPDKS), Rat Census and Pesticide Management. Recapitulation is available of Rat Pest Attack Census results in the area of Productive Plant which is conducted every 3 months with the census result for Division 4 is a total of 24 trees are attacked by rat pest and for Division 5 a total of 235 trees are attacked by rat pest with the total attacks of 261 Trees. Census personnel are 2 for Division 5. Spraying personnel, Bangko Estate has 1 Spraying Team with 17 members: Spraying Foreman : 1 Spraying personnel : 15 Operator taking Agrochemical to the site : 1 At stage 2 a site visit was made for Circle Spraying activities, harvesting path and TPH at the BNGE block B08 in the planting year 1994 (S E ), Spraying Team i.e. Spraying Foreman Sdr. Suhar with his 8 members (5 spraying personnel, refilling personnel and mixing personnel). PPE used by spraying personnel includes: Rubber gloves, Apron, Spraying Coat, Boots, Mask and Face shield. Extra pudding of milk is given prior to spraying. Doses used in spray are 160 ml. The practice of spraying in the field conforms to the specified procedure, for 2 meter circle the spraying is carried out around the tree and 1.5 meters for harvesting path. Naming and location of Block has conformed to the company s map. During the field visit and interviews at stage 1 with spraying personnel it is found that the spraying with Agrochemicals is carried out on trees located on trench banks. This is indication of pollution in water bodies. The company should ensure that trenches in plantation area do not drain directly to the river although the dosage used is very small. At stage 2 the company has conducted sampling and sent the samples to the BLHD Lab. on 8 October 2013, the result from the Jambi BLHD Lab has been available. There is Kebun Bangko Trench Test Certificate No. 006/EL/KDA-KLH/IX/2013 dated stating the results of test for parameters which test 47of 135

48 is completed, while for parameters which test is not yet completed will be immediately delivered to the company along with the Test Certificate. There is a test report no. 843/LHU/LABLING/X/13 dated 12 November 2013 with the result of ph 7.55; BOD5 3 mg/l; COD 20 mg/l; Total Phosphate (PO4-P) 0.02 mg/l; Nitrate (NO3) mg/l; Nitrite (NO2) mg/l; E-Coli 400 jml/100; Total Coliform 1100 jml/100 that comply with Government Regulation No. 82/2001. There is Data of Biological Control Agent Cultivation (Useful Weed) in 2013 of Turnera subulata planting provided with planting and cultivation map of Turnera subulata at Bangko Estate (BNGE). There is Data of Detected Oil Palm Leaf Eating Caterpillar (UPDKS) at Bangko Estate (BNGE) Block C1 Division 5 dated 3 July 2013 stating that there is no tree attacked. For Antigonon planting activities a record of Planting Map of Antigonon sp. is presented Compliance Status : Compliance 4.6 Agrochemicals are used in a way that does not endanger health or the environment. There is no prophylactic use of pesticides, except in specific situations identified in national Best Practice guidelines. Where agrochemicals are used that are categorized as World Health Organization Type 1A or 1B, or are listed by the Stockholm or Rotterdam Conventions, growers are actively seeking to identify alternatives, and this is documented The company establishes a procedure for handling agrochemicals in the SOP of Pest and Disease Control (SOP/SMART.MCAR/VII/TA-HPT, 1/9/2012). List of agrochemicals used by the company has been available covering brand, active ingredient and permit for circulation in Indonesia. Monthly use of pesticides has been recorded in the report of agrochemical toxicity data. The report has included amount of application, total active ingredient, FFB production and toxicity unit. During the field visit to Division 5, block B-3, Glyphosat and Methyl Metsufuron was being applied. The dosage has been in compliance with the recommendation. The use of restricted pesticides like paraquat is still found but the company has a policy to reduce the application of paraquat herbicide. Chemicals used by the estate have no paraquat active ingredient of Dichloride, Glyphosate Isopropyl Amine, Methyl Metsufuron, Triklopir Putoksil Ethyl Ester, and Deltametrin. 48of 135

49 The management of used pesticide containers has been regulated in the procedure of Used Pesticide Container Washing WI (IK/BNGEL/LBH/01, revision 1 dated 30 Jan 2013). The work instruction regulates that used pesticide containers of plastic jerrycans and bottles are managed by means of collecting them in a special warehouse and washed 3 times. Used washing water is reused for the next mixing process and if necessary the used containers that have been washed are returned to the Supplier or handed over to licensed third parties. The company has provided pesticide mixing, used pesticide container washing, used fertilizer bag washing, pesticide apron washing, and spraying personnel bathroom facilities. Materials presented were Integrated Pest Control (PHT), Palm Leaf Eating Caterpillar (UPDKS), Rat Census and Pesticide Management. The company has established policies for women workers through Circular Letter No. 02/VPA- 1/1/2009 dated 13 January 2009 concerning Female Workers i.e. spraying job is prohibited for pregnant or breastfeeding women. The company provides bathing facilities to the spraying team at Bangko Estate. The facility for the disposal of bathroom waste water which is contaminated by spray substance regardless its small amount is still exposed, no safeguarding barriers or fences, and warning signs are found. And it is necessary to conduct water quality testing on the effluent in order to meet the effluent quality standard. At the time of preliminary audit, company has not conducted special health examination of the workers spraying in 2012 according Regulation of the Minister of Manpower No.3/1996 that requires the examination to be conducted once every 6 months. During the final audit, the company has conducted health examination to the entire workforce as audiometry, spirometry and colinesterase in October For year 2014, the company has made the program for health examination to be conducted twice a year. At the prelimenary audit, there was no pregnancy test conducted for female spraying workers section on a monthly basis. During the final audit, the pregnancy test has been conducted for female workers spraying. Compliance Status: Compliance 4.7 An occupational health and safety plan is documented, effectively 49of 135

50 communicated and implemented Agrochemical Warehouse Agrochemical warehouse and washing facilities at Division 5 and warehouse for temporary storage of herbicide have good air circulation, which is provided with a secondary containment. The washing of cap (spray tube) is carried out in the washing place, which has a shape of bath/washing pond. The washing of spraying personnel clothes, apron is also carried out in the clothes washing place. Clothes are washed using water only. Used washing water is reused as dilution water. The mixing personnel at chemical warehouse of Division 5 have been provided with a cartridge chemical mask provided on 09 October Work Environment Inspection Stage 2 In Langling Mill the levels of chemicals in the workplace was measured on (noise, heat stress, dust, lighting, vibration and gas). Emergency handling Emergency procedures in Bangko Estate and Langling Mill are regulated in emergency handling procedure no. SOP/17/SMART/LH-09. Emergency handling is implemented as follows: Bangko estate emergency response team has been established, including the first aid team. Emergency simulation in the office was held on 30 September, but it was not provided with its evaluation yet. The inspection of portable fire extinguishers is carried out monthly. There are 34 portable fire extinguishers. The monitoring of land fire extinguishers is carried out monthly, data taken is data of September 2013; suction hose is not available; fire flapper, axe, chainsaw are not provided yet (not listed in the checklist yet). Fire simulation in the estate housing was held on 28 September 2013,Mill fire simulation, earthquake was on 16 February Inspection of emergency handling equipment of portable fire extinguisher, hydrant, and traditional extinguishers is carried out monthly. (July samples). During the audit stage I the stand by pressure of hydrant installation was checked, it can be seen that stand by pressure was less than 4.5 kg/cm i.e. at 1.8 kg/cm2. Equipment certification ; The organization has certified some equipment that became the object of Manpower Service s 50of 135

51 supervision with evidence as follows : 1. Power Instalation : 104/105/EJ/IL/ August 1997 since the application of puil 2000 the electrical installation certification has not been updated 2. Lightning arrester : 108/W.5/E3/I.P/1997, inspected and tested on 16 July Pressure boiler : 109/W.5/E3/BT/1997, inspected and tested on 16 July Steam turbine : 103/W.5/E3/MD/1997 January 2013 and 103/W.5/E3/MD/1997 inspected and tested on January Hoisting crane : 99/W.5/E3/PES/1997dan 100/W.5/E3/PES/1997 inspected and tested on August Wheel loader : 560/50/PHIP/PAA/Sosnakertrans 7. Boiler ; SI.105/W5/E/96 16 July 2013, SI.102/W5/E/96, inspected and tested on 16 July 2013, SI.103/W5/E/96 16 July 2013, SI.106/W5/E/96, inspected and tested on 16 July Boiler : SI.101/W5/E/96 (pressure 21 kg/cm2), inspected and tested on 16 July 2013 and SI.100/W5/E/96, pressure 21 kg/cm2, inspected and tested on 16 July BPV : SI.104/W5/E/96 (pressure 3.2 kg/cm2) inspected and tested on 16 July Diesel genset : 105/W.5/E3/MD/97 20 January 2013 and 106/W.5/E3/MD/97 on 20 January Hydrant : 560/541/HISK/SNKT/2013 Bangko estate 1. Grader : 560/279/PHIPK/PAA/SOSNAKERTRANS/2012 : June 2012, last inspected and tested on 19 July Tractor : 560/278/PHIPK/PAA/SOSNAKERTRANS/2012 : June 2012, last inspected and tested on 19 July Pressure vessel : 560/281/PHIPK/BJ/SOSNAKERTRANS/2012 : June 2012, last inspected and tested on 19 July 2013 Operator license Organization has had workers required to have a license in order to perform their tasks. Based 51of 135

52 on stage I audit, it was known that the license of several operator such as : Katno, Budiyanto, Purwanto, Darusdi had been expired since The organizations has propose to local manpower otority of Jambi Prov at in a letter no. Jambi/IX/ /UH-LNGM-C/Disnaker- Based on the audit findings the license of other operator was still valid for example Erizal as crane operator the license valid until , Sidauruk as crane operator the license valid until , Yopan as crane operator the license valid until and Supriyono as loader operator the license valid until Estate Clinic In the estate there is a clinic for employee health service. This clinic provides certain medicine, including: First aid First aid box is available at block B6 of Division 5 and kept by harvest foreman. First aid box is also available in the block B3 of Division for 5 spraying personnel, and kept by spray foreman. P2K3 (K3 Organization) Langling Mill has implemented SMK3 and has been certified by the Ministry of Manpower and obtained the certificate on 23 April P2K3 has obtained legalization from local Manpower Service with No.: 46/2013 from Head of Social, Manpower and Transmigration Service of Merangin Regency. Bangko Estate P2K3 has been legalized with legalization no. 23/2103 from Head of Social, Manpower and Transmigration Service of Merangin Regency. Risk management The organization has made hazard identification and risk assessment with following evidence: 1. In Langling Mill, hazard identification records were updated on 06 January In Bangko Estate, risk management records were updated on 07 January At block B3 (Division 5) there are oil palm trees under the electricity network and the hazards have been identified Based on the results of field observations in block B6 (2º 6.05 LS and 102º 2.17 BT) harvesting personnel cuts the frond in an upright position and frond is falling on position of less than half a 52of 135

53 meter from him because he is not sufficiently extending his pole. Because of this the socialization was conducted on how to harvest safely on 10 October From the result of interviews with the spraying personnel in block B08 of division 5 it is revealed that the weight of cap is 15 kg and currently there has been no complaint from the spraying personnel as a result of lifting such load. Worker health examination The examination of occupational health of the workers in Bangko Estate also included audiometry tests on 30 October In Langling on 29 October 2013 there were 17 personnel who are experiencing declines in hearing ability and for this reason a work plan for further examination should be made. Pregnancy check was also carried out in October and the organization has a program to do the pregnancy checks for the spraying personnel once a month. Jamsostek workers in Langling Mill have been included in Jamsostek. Proof of payment no 2013 dated June 2013 to Jamsostek of Muara Bungo, Jambi, cab 2 2. In Bangko Estate there were 196 workers included in Jamsostek program based on proof of payment of 189 workers (seven people were out) on 02 September 2013, Jambi branch II of Muara Bungo through Bank Mandiri with additional three workers. Those who have not participated in Jamsostek program have been registered starting August Payment of premium in October for Jamsostek PKWT BHL are 147 people as listed in the evidence of PKWT BHL records by Manpower and Transmigration Service has been paid on 08 October 2013 amounting to Rp (0.84%) For BHL spraying personnel the JKK-JKM payments to the Jamsostek has not been made yet because they have their participation in Jamsostek registered just recently to the local Manpower Service on 25 September 2013, based on the letter from Manpower Service 560/419HISK/SNKT/2013 and have been submitted to the Jamsostek through the letter No. 138/BNGE-Jams/x-2013 on 27 September As long as not yet registered they become the responsibility of the company based on a circular letter No. 041/CE01-SE/02/2011 that compensation for the accident become the responsibility of the company. Incident reporting and investigation 53of 135

54 Reporting and investigation of work accidents both for Langling Mill and Bangko Estate are regulated in the procedure of SOP/SMK3/SMART/LH-10, and has been reported at regular intervals based on the following: 1. Langling Mill : there is monthly report containing annual recapitulation of SR and FR, 2. Bangko Estate : there is monthly report containing annual recapitulation of SR and FR, During prelimenary audit, it was found at the clinic that the anti snake venom is expired in August 2013 and it has not been discarded. When the final audit, the anti snake venom has been removed from the clinic's stock and send to a medical waste disposal facility of the Bangko Regional Hospital. As evidence of the corrective action such as Disposal report of expired bottles of anti-snake venom and document shipments of medical waste to the Regional Hospital Bangko Compliance Status: Compliance 4.8 All staff, workers, smallholders and contractors are appropriately trained. The company set a training program for 2013 in the form of Proposed Training Program of Jambi Region 2013 for the mill and estate personnel. In addition, the company also established a training program of environmental and K3 management system. The management of training refers to HRD Training SOP No. Doc: SOP/SPO/SMART/LH-10. The realization of training 2013 has been recorded such as first aid training for foreman on 28 September 2013 in the office of Division 5, EMS training for staff on 22 August 2013, HCV Training on 14 June 2013 and PHT training on 23 September SOP for Control of Contractors has been available (SOP/SMK3/SMART/LH-26) but it just sets the requirements for K3 aspect, not the requirements to determine employment aspect and determine the use of a trained contractor. The company has had a list of contractors both in the Langling Mill and Bangko Estate. During the preliminary audit, sampling had found that there was no evidence that the selection of trained contractors was implemented so that this was issued as a major finding. The company has made the corrective action by revised the SOP and add the requirement for trained contractors and ensure the selected trained contractor to be used the company. During the certification audit, sampling for Langling Mill of SPK no. SPK/LNGM/06/2013 for the 54of 135

55 construction of solar home, site concrete filling, there had been evidence that the contractors were trained with the existence of a copy of a certificate of the worker (welding certificate). It is stated in article 6 paragraph 5 of the SPK to assign trained personnel. Sampling in the Bangko Estate of SPK No. BNGP/PLASMA/06/13/005 for Plasma FFB Purchasing Cooperation in which it requires licenses such as driving license (SIM), vehicle ownership certificate (BPKP), motor vehicle license (STNK) and motor vehicle inspection certificate before being contracted by the company. This is stated in article 8 paragraph 2 of the SPK. The company has conducted SIM and STNK inspection but it is advisable to ensure that motor vehicle inspection is done as required by the SPK. SOP for Control of Contractors has been available (SOP/SMK3/SMART/LH-26) but it just sets the requirements for K3 aspect, not the requirements to determine employment aspect and determine the use of a trained contractor. It should be ascertained that every SOP has set the requirements for employment aspect and trained contractors. Compliance Status: Compliance 5 ENVIRONMENTAL RESPONSIBILITY AND CONSERVATION OF NATURAL RESOURCES AND BIODIVERSITY 5.1 Aspects of estate and mill management, including replanting, that have environmental impacts are identified, and plans to mitigate the negative impacts and promote the positive ones are made, implemented and monitored, to demonstrate The company has had environmental and K3 aspect identification, SOP/SPO/SMART/LH-11, with endorsement date of July 1, Documented impact analysis is available in the UKL/UPL document of Langling Mill located in Bangko District and Perwakilan Pamenang District, Sarolangun Bangko Regency, Jambi Province, which has been approved by the Regent of Sorolangun Bangko No. 731/BA XI/5/1995 dated 23 November The environmental document states the mill capacity of 60 ton/hour with core estate area of 620 hectares. But the total of core area has changed now, where this change has not been accompanied by changes in the UKL/UPL document. Langling Mills have 2 Environmental documents i.e. UKL/UPL and AMDAL. There is a recommendation letter from the Ministry of Environment concerning the Langling and Jelatang 55of 135

56 Mills environmental documents that the company is allowed to use the existing UKL/UPL until further decision will be made by Ministry of Environment. The company has the chronologies document of correspondence between PT. KDA and the Ministry of Environment. In addition, the company established a document of environmental aspect and impact list and evaluation of Langling Mill in August The identification of aspects and impacts refers to the Environmental and K3 Aspect Identification SOP No.: SOP/SPO/SMART/LH-11. Records show that environmental management reporting has been implemented every 6 months through RKL/RPL report. The RKL/RPL report of semester I 2013 has contained the following: - Liquid waste quality monitoring: record of liquid waste test result of January June The result of measurement complies with the quality standard set out in the regulations. - Air quality monitoring: record of the result of emission and ambient air tests of June The result of measurement complies with the quality standard set out in the regulations. Measurement of environment and new working environment was just conducted in October 2013 by Balai Hiperkes K3 Medan. Delay in measuring environmental parameters was due to the test laboratory s time constraint. The RKL/RPL report was submitted to the Ministry of Environment on 2 September 2013, to the BLHD of Jambi Province on 28 August 2013, to KLH of Merangin Regency on 14 September 2013 and to Pekanbaru Ecoregions on 14 September However it is advisable to improve the consistency in reporting time, i.e. every 6 months in accordance with the applicable regulations. In the next period, the measurements of quality standard will be in frequency as specified in RPL document; The problem was because the Laboratory of Jambi Province BLH took time to deliver the results, about 1 2 months after the samples are sent. The company has UKL / UPL document of Langling Mill has undergone extensive changes in croplands. The company is in the process of changing those document and didn't finish yet because of the authority problem between the local and the central government to provide the final solution. Compliance Status: Complience 5.2 The status of rare, threatened or endangered species and high conservation value habitats, if any, that exist in the estate or that could be affected by estate or mill management, shall be identified and their conservation taken into 56of 135

57 account in management plans and operations PT. Kresna Duta Agroindo has had SOP of Protection of flora and fauna in plantation environment which is contained in SOP of Identification and Management of HCV, No.: SOP/NP/SMART/IV/LH 001 effective on 1 July 2010 Revision No. 01. The company has had the document of Environmental Management Effort (UKL) and Environmental Monitoring Effort (UPL) of PT. Kresna Duta Agroindo Langling Palm Oil Estate and Mill that covers environmental condition associated with flora and fauna. Based on information on ANDAL document before planting, oil palm estate and oil palm mill it was a secondary forest of Meranti (Shorea sp.) and Keruing (Dipterocarpus sp.),the natural vegetation it contains is the vegetation type of tropical rain forest. Protected species include Durian burung (Durio carinatus) and Jelutung (Dyera costulata). UKL UPL of Jelatang Mill No. 419/BA.5/IX/1996 dated 19 September 1996 with a capacity of 30 ton/hour with a core area of 229 Ha and plasma area of Ha. UKL UPL of Langling Mill No. 731/BA.5/IX/1995 dated 23 November 1996 with a capacity of 60 ton/hour with a core area of 620 Ha and plasma area of Ha. Information on UKL-UPL document before planting, flora identified is commercial crops such as meranti (Shorea sp) and keruing (Dipterocarpus sp); there is the identification of flora and fauna before planting. The UPL-UKL document contains information on flora and fauna when it was a secondary forest. Information on flora and fauna are described in detail in the document of Environmental Management Effort (UKL) and Environmental Monitoring Effort (UPL) of Langling Palm Oil Estate and Mill, Bangko District and Perwakilan Pamenang District, Sarolangun- Bangko Regency, Jambi Province in Data of flora diversity consists of : Natural Vegetation Species No. Local/Regional Name Scientific/Latin Name 1. Areng-areng Cratoxylon celebicum 2. Buta-buta Exoecarid agallocha 3. Anggung Trema agallocha 4. Durian burung Durio carinatus* 5. Gurah Sapium indicum 6. Jelutung Dyera costulata* 7. Kapur Aryobanops aromatic 57of 135

58 8. Kulim Scorodocarpus boornensis 9. Laban Vitex pubescens 10. Mahang/Benuas Macaranga priinosa 11. Medang Litsea sp 12. Merawan Hopea sangal 13. Nyatoh Paloguium sp 14. Nibung Oncosperma filamentosum 15. Meranti Shorea sp 16. Pulai Alstonia scholaris 17. Punak Tetramerista glabara Remarks : * = Protected Shrub Vegetation Species in the Study Area No. Local/Regional Name Scientific/Latin Name 1. Alang-alang Imperata cylindrical 2. Brajewangi Sikania cordata 3. Alamanda Alamanda cathartica 4. Kembang Penjit Yussica perruviana 5. Gelagah Hyptis brevipes 6. Tembelekan Saceharum spontaneum 7. Lantana Lantana camara 8. Jarong Stachyarpeta indica Data of terrestrial fauna diversity in the location of project of PT. KDA before planting includes : Shrub Vegetation Species in the Study Area No. Local/Regional Name Scientific/Latin Name MAMMAL 1. Teledu Mydaus javanensis 2. Berang-berang Lutra sp 3. Linsang Prinodon linsang 4. Musang Paradoxurus hermaphrodites 58of 135

59 5. Kelelawar Roussettus amplexicaudatus 6. Landak Hystrix branchura 7. Tikus Jantung Maxomys rajah REPTILIA 1. Ular Sendok Naja Hannah 2. Ular Sawah Phyton sp 3. Biawak Varanus salvator AVES 1. Alap-alap Falco peregrinus* 2. Puyuh Turnix suscitator 3. Punguk Otus bakkamoena* 4. Elang Bondo Haliastur indus* 5. Kucica Turdus obscunis 6. Belatuk kanih Dryocopus javeusis* 7. Perkutut Geopelia striata 8. Betet Sitlaacula 9. Sriwang Terpsiphe paradise 10. Cocup Anthrreptes* Remarks : * = Protected List of fauna after planting is contained in the Report of Identification of Management and Monitoring Plan of High Conservation Value (HCV) at Bangko Estate (BNGE) i.e. Endangered/protected species that belong to the list in Government Regulation No. 7/1999 (Protected) and CITES include : No. Local/Regional Name Scientific/Latin Name 1. Raja Udang Meninting Alcedo meninting 2. Burung Elang Ular Bido Spilornis cheela 3. Cekakak Belukar Halycon smyrnensis 4. Macan Akar Felis bengalensis 5. Monyet Ekor Panjang Macaca fascicularis 6. Lutung Kelabu Presbytis cristata 7. Lutung Simpai Presbytis malalophos 8. Biawak Varanus sp The company has a specialized and trained officer in the company structure to oversee the plan 59of 135

60 and activities of HCV/NKT i.e. Sdr. Ramlan Situngkir (PIC HCV/NKT). The company has installed rare animal socialization boards in strategic places in the form of pictures of rare animals identified in the area of PT. Kresna Duta Agroindo. Records are available of socialization to the public in the form of socialization photo documentation in the afdeling office, warning sign boards of protected flora and fauna, warning sign boards of tree cutting prohibition in a conservation area which are found in the field in strategic areas. In addition, socialization in the form of meetings at Bangko Estate of PT. Kresna Duta Agroindo has been conducted where the participants has signed the attendee list. The company has the Report of Identification of Management and Monitoring Plan of High Conservation Value (HCV) at Bangko Estate carried out by the Environmental Department of PT. SMART, Tbk in Peer review is by Dr. Kunkun Jaka Gurmaya (Listed on the Assessor of the RSPO and Founder of the FISPO) an independent body approved to perform peer review on high conservation value (HCV). At Bangko Estate it covers Belengo River border area, Mampun River border area, reptile (biawak), mammal (macan akar, babi hutan), Aves, and so on. The protection of river border area is to clear an area from oil palm trees 50 meters from the edge of the River, and the river border is planted with vertiper grass (Block B11 and A7) totaled 80 clusters in July 2013 and 62 clusters in September 2013 and with fruit trees (Block B11, A9, A7 and A10) totaled 28 Trees (July 2013) and 70 Trees (September 2013) in order to prevent erosion. For the protection of fauna, the company provides communications boards of hunting prohibition in some areas where fauna identified to appear. In the BNGE there are HCV/NKT 1.1, 4.1 of Belengo River Border, Mampun River Border and freshwater Marshes. There are records of socialization on HCV meaning, HCV types, HCV management types and HCV monitoring types by PT. KDA carried out on: 25 September 2013 located at Division V BNGE with the speaker PIC HCV/NKT (Ramlan Situngkir) and Division 5 Field Assistant and attended by 30 employees of PT KDA and 17 Security personnel. After field checks it is found that socialization is only done to spraying workers and security personnel while other employees has not received the socialization about the NKT/HCV. The company should perform socialization to all of PT KDA employees and the surrounding community. At stage 2 the company has carried out socialization to all of PT KDA employees and the surrounding community. Records are available on the Minutes of Public Consultation 60of 135

61 held on Wednesday, and attended by Village Head, KUD, Police as well as 44 personnel from PT KDA who have signed the attendee list and the documentation photos are available. The socialization of NKT/HCV has also been implemented at Bangko Estate Division 5 dated which was attended by 33 people, dated which was attended by 30 people, dated at Bangko Estate Division IV which was attended by 44 people, and dated at Langling Mill which was attended by 35 people and have signed attendee list and the documentation photos are available. There are 20 boundary marks of NKT 1.1 and NKT 4.1 of river borders and swamps, made of concrete-filled PVC pipe of 4 inches in diameter and 1.5 m long with a height of 1 m above the ground and a depth of 50 cm. They are placed in easily visible areas. There is the report of maintenance of high conservation value boundary marks; the last time was 20/09/ markers with the activity of clearing the site from shrubs at each marker. Spray boundary marks are the red letter X painted on Palm tree approximately 1 meter from the ground, this sign is made along the river border on each Palm tree having a distance of 50 meters or 5 Palm trees from the river bank. It is explained in a circular letter from RC Jambi 1 No. SE-RC/KDA/10/2013 dated 1 October 2013 concerning the protection of Watersheds. During field visit the HCV/NKT Markers were checked, including: 1. Marker of NKT 1.1, 4.1 B11/24 coordinates S and E. 2. Marker of NKT 1.1, 4.1 B11/25 coordinates S and E. 3. Marker of NKT 1.1, 4.1 B11/31 coordinates S and E 4. Marker of NKT 1.1, 4.1 B11/33 coordinates S and E. After checking the estate internal documents it is known that the position of B11/31 marker got exchange with the B11/33, the marker should be immediately corrected in accordance with the internal document of HCV/NKT marker coordinates of PT KDA. At stage 2 the company has conducted the relocation and adjusted with the proper data, there is the Minutes and photo documentation of Changes to Coordinates Markers of HCV/NKT 1.1; 4.1 with marker number F1/33 and F1/34 on Tuesday, and signed by the HCV Officer and Estate Manager with following details: 1. Marker of NKT 1.1;4.1 F1/33 from the original S and E into S and E. 61of 135

62 2. Marker of NKT 1.1;4.1 F1/33 from the original S and E into S and E. There is patrol report of High Conservation Value; the last one was on 21/09/2013 with a team of M. Anip and Suhardi. There is the Minutes of warning installation of River Border Area Management dated 02/05/2012 located at Division V PT. KDA BNGE block A7 and block F1 (1 warning each). There is the Minutes of warning installation of Protected River Border Marker dated 02/05/2012 located at Division V PT. KDA BNGE block A7, A9, A10, B11, C2, F1 and F2 (1 warning each). The company has had SOP of HCV/NKT Identification and Management, No.: SOP/NP/SMART/IV/LH 001 effective 1 June 2010 Revision No. 01. The following is details of Identification and Analysis of Residential Area with High Conservation Value (HCV/NKT) of Bangko Estate (BNGE) : Type of HCV Bangko Estate Field Identification Results 1.1 Areas having or providing biodiversity supporting function to protected and/or conservation areas. 1.2 Endangered/protected species that come under the list in Government Regulation No. 7/1999 (Protected), CITES and IUCN LC ver 3 (2010), including : a. Raja Udang Meninting (Alcedo meninting) b. Burung Elang Ular Bido (Spilornis cheela) c. Cekakak Belukar (Halycon smyrnensis) d. Macan Akar (Felis bengalensis) e. Monyet Ekor Panjang (Macaca fascicularis) f. Lutung Kelabu (Presbytis cristata) g. Lutung simpai (Presbytis malalophos) h. Biawak (Varanus salvator) 4.1 Area or ecosystem that is critical as a water supply and flood control to the community Division/Block/ Location of Finding Area (Ha) Belengo River Border 2.05 Mampun River Border Bangko Estate Area (Not socialized to workers and community to avoid hunting of endangered species) - Belengo River Border - Mampun River of

63 downstream. Border - Freshwater marshes 4.13 The company has had maps of estate showing the location of areas with high conservation value, including: Map of High Conservation Area of PT. Kresna Duta Agroindo Bangko Estate (BNGE) Division 4 and Map of High Conservation Area of PT. Kresna Duta Agroindo Bangko Estate (BNGE) Division 5. There is the Report of Management and Monitoring of High Conservation Area of PT. Kresna Duta Agroindo Unit Bangko Estate, August 2013, Biodiversity and Conservation Section by Environmental Department of Sustainability Division. Monitoring of HCV/NKT is carried out every 2 weeks. Document used is Patrol Report Book recapitulated into Form of HCV/NKT Monitoring, Document No. F/SMART/LH003/09 every 6 months. Furthermore, there are documents as follows: Report of the Planting of Erosion Control Plant Report of the Patrol of HCV/NKT Area Report of the Maintenance of Marker Report of Water Level Socialization Invitation Report of HCV/NKT Socialization Activity Recommendation for improvement has been mentioned in the HCV/NKT Monitoring Form as a result of monitoring routinely implemented every 2 weeks, but preferably to determines Person in Charge (PIC) and the time limit for the completion of recommendation. At stage 2 the company has added PIC and Time Limit of Activity columns. It can be seen in the monitoring report dated , it is recommended to increase erosion control plants in the river border area of Block F1 Division 5 BNGE with PIC is HCV Officer and Time Limit is continuously every month. Compliance Status: Compliance 5.3 Waste is reduced, recycled, re-used and disposed of in an environmentally and socially responsible manner 63of 135

64 The company has made the identification of sources of waste and pollution that are contained in the document of environmental aspect and impact identification list, September The source of waste is from mill site such as POME, Emission, domestic waste, used oil, and EFB, while from the estate is such as used chemical containers, emissions from vehicles, used lamps. B3 (hazardous & toxic waste) management is regulated in the B3 Waste Management procedure (No. SOP/SPO/SMART/LH-18, 1 July 2013). The procedure has specified the handling of B3 waste, B3 waste spills/drops, emergency situation and reporting. The management of used pesticide containers have been regulated in Used Pesticide Container Washing WI (IK/BNGEL/LBH/01, revision 1 dated 30 Jan 2013). The company has had B3 Waste Temporary Storage Permit i.e. Decree of the Regent of Merangin No. 15/LH/2010 regarding Extension of Hazardous and Toxic Waste Storage Permit to PT KDA Langling Mill unit dated 23 November 2010 which is valid for 3 years. Covered in the permit is used oil, used batteries, used fluorescence lamps, used oil filter, gloves and other B3 contaminated equipment. Reporting is done every 3 months to the KLH of Merangin Regency. The B3 Waste Transport and Collector company is CV Amindy Barokah with license from the State Minister of Environment No. 33/2011 regarding CV. Amindy Barokah B3 Waste Collection Permit dated 21 February 2011 which is valid for 5 years, the transportation permit to CV. Amindy Barokah with Vehicle plate no.: BK 8080 MO and License No.: 309/73/014/DJPD/2012/ The recent B3 waste transportation was performed on 15 October The record of B3 waste transportation activities is the Manifest no.: with BK 9552 MN, transport license of BB Measurement and analysis of liquid waste, emission air and ambient air have been conducted periodically. Monthly observation of waste quality is conducted with an external laboratory i.e. PT Unilab Perdana with sampling points at pond V (the outlet to LA). Monthly observation of waste quality is conducted with an external laboratory of BLHD with sampling points at pond 4. The testing Parameters are BOD, COD, ph, oil-grease, Pb, Cu, Cd, Zn that refer to Decree of the Minister of Environment No. 28/2003. The result of test in January October 2013 shows that BOD & ph comply with the quality standards. Measurements of the boiler and genset air emission show that the result is below the quality standard of Decree of the Minister of Environment No.KEP-13/MENLH/3/2005. The result of ambient air measurement complies with Government Regulation No. 41/ of 135

65 Langling mill burns empty fruit bunches with furnaces. The total of ash produced from burning and those applied on the estate is available. There is a monthly report of empty fruit bunch ash, ash production and the ash released for application in the estate. There is the test result of emissions from the stacks of two furnaces by the UPTB Environmental Lab of BLH of South Sumatra Provincial Government and has had environment lab competence registration No. 0031/LPJ/LABLIN-1/LRK/KLH. The result of measurement is still below the quality standard (Decree of the Minister of Environment No. 13/1995). Direct application of empty fruit bunches to estate is found at Pelakar Estate site. This application is not found for Langling and Jelatang. Langling Mill already has a hazardous waste storage permit (Merangin Regent Decree No. 14/LH/2010 District) with a retention period of 90 days. Based on the existing balance of hazardous waste hazardous waste stored more than 90 days. At the prelimenary audit the Company has applied for an extension of the storage and the response has not been approved by the local government. The company has coordinated with district BLHD Merangin by sending a second letter and has gained a new license issued with a period of 180 days of storage permits consist of : 1. A letter from BLHD Bangko No.660/264/BLHD/2013 dated 7 October 2013 as a response to Application for Hazardous Waste Storage Extension time from 90 Days to 180 Days. 2. Hazardous Waste Storage Permit based on Decree of the Regent of Merangin Regency No. 28/LH/2013 on Hazardous waste temporary storage permit of PT. KDA, Jelatang Village, Pemenang District. 3. Hazardous Waste Storage Permit based on Decree of the Regent of Merangin Regency No. 29/LH/2013 on Hazardous waste temporary storage permit of PT. KDA, Langling Village, Bangko District. Compliance Status: Compliance 5.4 Efficiency of energy use and use of renewable energy is maximized The use of renewable energy is such as the use of shell & fiber as fuel for oil palm processing. 65of 135

66 The use of fiber and shell has been recorded on a daily basis and its efficiency has been analyzed. The use of diesel fuel for estate and mill operations has been recorded and its efficiency against the use of shell & fiber has been calculated. Based on data during the audit, the use of diesel fuel had decreased. GHG Emissions Mitigation SOP for PT KDA BNGE/SOP/35 Data has been available from 2011 up to October 2013 on the use of shell and fiber equivalent to the value of diesel fuel. The outcome depends on the mill condition such as the productivity of machinery and production equipment affecting the efficiency of non-fossil fuel use. In 2011, 129,085 tons of FFB yielded 16,458 tons of fiber and 7,422 tons of shell, equivalent to 84,518 x 10 6 kcal energy or equivalent to 8,968 x 10 3 liters of diesel fuel. 2012, ; 17542; 7911; 90064x10 6 ; 9558 x up to October 2013, ;13876;6258;71259x106;7561x103 Compliance Status: Compliance 5.5 Use of fire for waste disposal and for preparing land for replanting is avoided except in specific situations, as identified in the ASEAN guidelines or other regional best practice. The company does not burn waste and there is no replanting activity. The company has prohibited the use of fire for replanting. The company has also given a warning to employees and local people not to burn domestic garbage. Land fire is specifically regulated in land fire handling SOP of SOP/NP/SMART/XI/LH002. Fire point monitoring is performed biweekly. There have been maps of areas prone to fires and fire point inspection. There is a quarterly report to Manpower Office along with P2K3 report. It is recommended to carry out inspection of barrier trenches not irrigated with water throughout the year. At the prelimenary audit, it was found that emergency simulation drill in the field had not been implemented. Emergency simulation had been implemented (including fire mitigation) but land fire mitigation had not been performed yet. During the final audit, the company has been conducted fire mitigation simulation. Supporting evidence such as attendance list, photos, scenario and evaluation of land fire mitigation simulation. 66of 135

67 Compliance Status: Compliance 5.6 Plans to reduce pollution andemissions, including greenhouse gases, are developed, implemented, and monitored. The Organization has established Greenhouse Gas Emission calculation SOP (PT KDA- BNGE/SOP-02, dated 1 August 2013) containing the identification, calculation and reduction efforts of greenhouse gas the company can undertake. There is Greenhouse Gas Emission Mitigation SOP, PT KDA-LNGM/SOP/22, with effective date: 02/01/2012 covering Langling Mill. Identification of the sources of greenhouse emissions was carried out in September The report has identified potential sources for mills i.e. Changes in land use, Raw material processing into final product and Transportation of product, while for mills are the use of shells and fibers, the use of electricity, the use of diesel, the use of chemicals, transportation to bulking, and estate transportation for CPO. For the estate, sources identified are FFB transportation from Estates to Mills, fertilizer application, pesticide application, diesel fuel use for genset and POME/WWTP. Langling Mill s GHG emissions: kgco2e per tons of CPO for CPO, mill and supply base s total emissions: kgco2e per ton of CPO for CPO. Bangko Estate (BNGE) s GHG emissions: kgco2e per ton of CPO. Records of greenhouse gas emission reduction efforts are in the form of the report of shell and fiber use and the report of empty bunch use. The organization has a commitment to reduce Greenhouse Gas emissions in the next year period, but it needs to set the measurable targets, e.g. in the form of a percentage (1% of the previous year, etc.). The organization has maps of land clearing for plantation business (data is in the estate best practice). Compliance Status: Compliance 6 RESPONSIBLE CONSIDERATION OF EMPLOYEES AND OF INDIVIDUALS AND COMMUNITIES AFFECTED BY GROWERS AND MILLS 67of 135

68 6.1 Aspects of estate and mill management that have social impacts are identified in a participatory way, and plans to mitigate the negative impacts and promote the positive ones are made, implemented and monitored, to demonstrate continuous improvement The company has performed Social Impact Assesment internally in 2012 covering Jelatang Mill, Langling Mill, Bangko Estate, Bangko Plasma, Bukit Bungkul KKPA and Pamenang Plasma. Environmental Impact Assesment has been performed more intensively through the ANDAL (Environmental Impact Analysis) report. The assesment carried out aims, among others, to 1. Identify and describe the social, economic and cultural characteristic of communities around the company; 2. Identify and analyze the positive and negative impacts of company existence on the community and 3. Recommend efforts to manage the negative impact of company existence. Based on the report, there are 18 villages from 5 districts identified. Based on the SIA report and meetings with stakeholders, information is obtained on the positive impacts of company existence. These positive impacts include: workforce absorption, community economic growth through the plasma program, construction of community access roads, CSR assistance (worship, health, and education facilities), and partnership for FFB transportation. Based on SIA reports, information is obtained of the negative impacts of the company existence that include less than expected CSR Assistance, company s lack of socializing with surrounding communities, company s lower purchase price for community s FFB that leads to community selling to other Mills, complaint about dust generated by FFB and CPO trucks passing through the residential areas, smoke pollution from the Mill to the community settlements at Langling and Jelatang villages. The company has developed a program as of September 2013 to minimize and or eliminate such negative impacts by conducting regular coordination meetings and fostering with cooperatives, plasma managers and farmers. Complaints about dust are responded by means of circular letters to contractors, vendors (No. 167/RC-Jambi 1/10/2013 dated 1 October 2013) concerning the provision of maximum speed of the trucks i.e. max. 25 km/hour, installation of speed limit signs, provide watering trucks and regular road watering, monitoring activities and visits to the community. During a meeting with the stakeholders it was confirmed that dust had reduced significantly with the restriction of motor vehicle speed and the regular road watering. The company has procured watering trucks with a capacity of 5 tons that perform watering from 68of 135

69 Langling to Bangko Estate i.e. at residential areas. Information on motor vehicle speed limit has been disseminated gradually to reduce the potential road dust and started from 15 October Compliance Status: Compliance 6.2 There are open and transparent methods for communication and consultation between growers and/or mills, local communities and other affected or interested parties The company has had SOP for Information and Request Response (SOP/SPO/SMART/LH-01). A list of information that can be accessed by relevant stakeholders has been available. Any request for information that is not listed in the list will require asking for Top management consideration and approval. A list of stakeholders has been available for each unit and consists of, among others, Customary leaders /community leaders, Muspida and village chief, Company trade unions, Contractors and suppliers. As a holding company, SMART has SOP of Communication and Consultation (SMART/XIV/MCAR003) where any request for information will be responded no longer than 5 weeks (1 month). The company has established a list of stakeholders and documents that can be accessed by stakeholders based on their relevance. The company has appointed SPO officer responsible for providing communication and consultation with stakeholders. For Langling Mill, the officer responsible for communication with stakeholders is Bp. Agung (ASkep Mill) with the letter No. 03/PC/LNMG/VII/13. For Bangko Estate is Edi Sujono with the letter No. 01/RC/BNGE/VII/13. Compliance Status: Compliance 6.3 There is a mutually agreed and documented system for dealing with complaints and grievances, which is implemented and accepted by all parties The company has SOP of Grievance and Complaint Handling (SOP/NP/SMART/XII/MCAR001). Any complaint coming from the company s internals can be expressed through the suggestion box, representatives of trade unions or to the company and will be recorded in the Grievance and Complaint Book. So far, any reports from company s internals have not been found. Complaints coming from external parties are recorded in the communication and consultation 69of 135

70 book. Based on records and meetings with stakeholders, information is obtained that there is no complaint that is not responded, and there is no compensation process in the last few years. The last compensation process performed by the company was in Compliance Status: Compliance 6.4 Any negotiations concerning compensation for loss of legal or customary rights are dealt with through a documented system that enables indigenous peoples, local communities and other stake holders to express their views through their own representative institutions There is SOP of Land Conflict Settlement (SOP/SPO/SMRT/LH-04). The SOP states that deliberation is prioritized over legal action. Based on the company information there is no conflict with the community related to land ownership. The last compensation process carried out was in Sampling conducted at a meeting with local people in Pulau Tujuh Village provides information that there is no land conflict between the company and the local community. Compliance Status: Compliance 6.5 Pay and conditions for employees and for employees of contractors always meet at least legal or industry minimum standards and are sufficient to provide decent living wages Wages Decree of Governor No.626/Kep.Gub/DISSONAKERTRANS/2012 concerning Jambi UMP 2013 of Rp ,00 (Rp ) and BKS PPS no. 04/BL-PPS/2013 dated 01 January 2013 of Rp per month (Rp / day) and excluding rice supply for permanent daily worker and monthly daily. Casual Workers (Bangko Estate) Wage of casual worker (BHL) PKWT (Perjanjian Kerja Waktu Tertentu)-Contracted Worker is regulated by Decree of SK CEO no. 017/ceo 1/HR PSM1/01/13 concerning casual worker wages in 2013, the wage is Rp / day. The organization has made a list of names for the casual worker in Bangko Estate. There are approximately 164 BHL (as of 1 November 2013) who work in Bangko Estate for the job as spraying personnel, harvesting personnel, fruit picking. Worker data is updated every 3 months. 70of 135

71 The organization has registered the PKWT (including BHL) to the Social, Manpower and Transmigration Service of Merangin Regency with a proof of registration no. 560/419 HISK/SNKT/2013 on September 25, Work agreement 01/ BNGE/PKHL/ /2013 dated 18 September 2013 with worker representatives rizal effendi who represents other workers and accompanied by the attachments list of 147 workers signatures. The number of working time is maximum 20 days a month, 7 hours a day. There is an additional 17 people, it is planned to make the agreement for them on 26 November Based on the results of interview with BHL spraying personnel in Block B08 Division 5 (20o6.27 S and 102o E) it is known that they have a BHL PKWT working relationship and paid to Rp per day (conform to the UMR). The spraying personnel are working 6 days a week, starting work at 07: 00 to 14: 00, except Friday it is until 11: 30. Outsourcing workers There are workers who are not included in PKWT, but not doing chartering agreements with working service providers that have legal entity. This is not suitable with UU no article 65. Those work doesn't include the work that can be outsourced according to Permenakertrans no. 19/2012 chapter III article 17 paragraph 3 and as described in attachment SE.04/MEN/VIII/2013 section III letter B point 2. However, article VI paragraph 3 in BKS 2012 regarding wholesale work states that the worker who work on his own less than 7 hours a day or settling for less than the daily volume set for him, will receive a portion of the daily wages, ie scaled time work in this case. Volume is resolved. Permanent daily worker (Bangko Estate, and Jelatang Mill) The wages are regulated in the Decree of SK CEO no. 018/ceo 1/HR PSM1/01/13 concerning the permanent daily workers wage in 2013, the wage is Rp ,00/month. Based on the results of interviews with one of the harvester at Block B6 (2º 6.05 S and 102º 2.17 E) Sdr Hariyanto, paid Rp per month. The harvest base is 35 bunches and premium per bunch is Rp per bunch. The work days are 6 days, working hour starts at 07:00 14:00 except Friday until 11: 30, but according to his testimony in order to pursue a premium he sometimes can work on Friday until at 13:00. There are grading work in Langling Mill with agreement letter no. SPK/LNGM/09/2013/ of 135

72 September 2, 2013 between KDA and Dumuk Baharija. This job is not a job that could be outsourced as provided in (Manpower) Permenakertrans no. 19/2012 chapter III, article 17, paragraph 3 and as described in attachment SE.04/MEN/VIII/2013 section III letter B point 2. Bapak Haryanto has been working as a harvester for 8 years, have 2 children aged 9 and 3 years. According to the interview the children have never helped him with the harvest in the estate. The oldest child is in the elementary school grade 3 and the youngest child is left at the day care in the estate because his wife also harvests the fruit. Based on the results of interviews with other harvesters at block B-4 Division 5 it is known that this harvester works as a harvester with the working relationship of Daily SKU with wages of Rp a month. The harvest base is 35 bunches and the premium per bunch is Rp per bunch. He usually accomplishes this harvest base within 3 hours of work. The work day is 6 days, working hours start at 07:00 14:00 except on Sunday until 11: 30. The other wages are premium for pruning that is paid every 3 months at Rp 420 per tree. Monthly workers (Bangko Estate) The wage is regulated in the decree of SK CEO no. 019/ceo 1/HR PSM1/01/13 concerning SKU monthly wages in 2013, the wage is Rp ,00/month (the lowest is G1 group) and the highest is Rp (for A8 group). Allowances (beyond wages, are given in kind) are housing facility, clean water, electricity subsidies, rice allocation, health facilities of estate clinic, school transportation. Sample of payment for rice allocation in November For men including the family consist of 15 kg/month for this worker, 9 kg/month for the wife, the child up to the third child is 7.5 kg/month (regulated in BKS PPS Daily contract workers (Bangko Estate) There are contract workers who do not belong to PKWT, the contract agreement is not made with the service provider having legal entity status and this does not comply with Law No. 13/2003 article 65. The job is not including jobs that can be outsourced as set forth in the Regulation of the Minister of Manpower and Transmigration No. 19/2012 chapter III article 17 paragraph 3 and as described in the attachment of SE. 04/MEN/VIII/2013 chapter III letter B point 2 Article VI of BKS PPS 2012 concerning work contract paragraph 3 states that a worker on his preferences working less than 7 hours in a day or finishing less than a daily volume specified for 72of 135

73 him will receive a portion of daily wage, according to the ratio of work time to completed contract. The company response is that work chartering allowed by PKB BKS-PPS which is followed by all the companies that are on Sumatra is a member of BKS-PPS and PKB BKS-PPS is an agreement and agreement between the company and SPSI then passed by Department of Labour. This means that all members of the company BKS-PPS follow PKB taht had been approved by the Government. In this case the company filed an objection with the auditor's findings and requested that this be a record of legality that must be resolved between the commission / certification with government executives and BKS-PPS. The evidence such as Chartering Worker provisions in accordance with BKS-PPS (ALL PLANTATION COMPANY in SUMATRA) is still valid until November 2014 This contract work agreement is regulated in work contract agreement No. 055/BNGE/SPPP/2013 between KDA and Astri Ayuningtyass and the name of the worker as contained in the attachment for the work of harvest and fruit collector or other jobs which payment is based on the quantity of work with a particular unit according to agreement. The contract value, for example, for fruit collector is based on VPA-1 No. 03/VPA/2013 which consists of group 0 (the prime harvest) of Rp. 370/kg, Group VI (less than 4 meters) of 280/kg and the group (I-V) of 260/kg. In block B6 there is a woman with task of harvesting the fruit and being paid based on volume, i.e. Rp 260 per kg. In a day she collects about 20 buckets and the weight per bucket is about 6 kg. The salary is paid monthly. Working hours start at 07:00 14:00. Overtime Overtime calculations are contained in the decision of the Director General of Industrial Relations and Jamsostek no. 191/PHIJSK-PKKAD/PKB/XII/2012 between BKS PPS and PP.FSP, PP-SPSI). The first hour is 1.5 times, the next hour is 2 times an hour wage (article x). Housing Facility Based on the results of interviews with other harvesters at block B-4 Division 5 it is known that this harvester has a wife with 2 children and he and his family are provided a house with 2 bedrooms, 1 bathroom and a well that is used together with the coupling home next door. The organization provides facilities for the workers in the form of housing. Based on the result of interviews with the spraying personnel whose husband works as a janitor in an Office, it is known 73of 135

74 that they get a house with two rooms. A visit to the housing facility was carried out at Division 5 to the house of Ibu Hartini. The house consists of 2 rooms. Clean water is available. Day care facility Bangko Estate is provided with a day care for the children whose mother works in the estate. During the audit visit there were 22 children taken care of by 3 sitters. The age of child who was left in the day care based on the result of interviews with the caregiver ranged from 11 months to 7 years. Usually the mother took her child back at around 15:00. Meals for children at the day care are not provided by the company but by their parents for breakfast or lunch including milk for children aged 11 months. The day care is divided into 3 rooms. One room is provided for children bedding. Children of different ages are placed in one room together and not separated by age of the child. The day care has not provided toys for children to play with. Contractors It was found that there is contractor control procedure (SOP/SMK3/SMART/LH-26) but it only requires HSE aspect and not included ensuring compliance with labor and the use of a trained contractor. There is a list of contractors of the Bangko Estate and randomly found there are contract that did not include the requirement of compliance with applicable regulations in employment. The company has made the corrective action by published new of SOP : Controlled about Contractor. Evidance is Scan Copy Cover New Publised SOP. Controlled about Contractor No. SOP/SMART/UMUM/SADV/I/006 Compliance Status: Compliance 6.6 The employer respects the right of all personnel to form and join trade unions of their choice and to bargain collectively. Where the right to freedom of association and collective bargaining are restricted under law, the employer facilitates parallel means of independent and free association and bargaining for all such personnel Bangko Estate : 74of 135

75 Freedom of association has existed through the Circular Letter from the Head Office to the entire management of PSM unit dated 15 November 2010 No. 218/CEO1-SE/11/2010. There is already a Bylaw No. 005/KONGRES/V/KSPSI/VIII/2007 for the Confederation of All Indonesian Worker Unions (KSPSI). All PT KDA refer to the bylaw of KSPSI for companies that have formed trade unions. The formation and appointment of the board of Bangko Estate Trade Union is determined through work unit deliberation carried out on 30 June 2010 and strengthened by Decree No. 55/PD F.SPPP-SPSI/JAMBI/IV/2011 that legalized the composition and personnel of the Union s Board. The company has had a trade union but during the preliminary audit the union s bylaw was found not available. There was no record found of meetings with the unions (meeting minutes and data of expression of aspiration to the management). So far, complaints are expressed verbally to the union s board and any complaint to be conveyed formally will be done through a mechanism in the company s existing SOP of grievance and complaint. During the audit certification, there was a record of a meeting between the unions and the company on 1 August 2013 related to a request for information about the provision of Idul Fitri (Islamic day) allowance to the workers of a ( Daily Laborer (BHL) status. The company had given a response by stating that it would give THR (Tunjangan Hari Raya Hari Raya Allowance) in the form of basic necessities (rice, sugar, cooking oil and biscuits). There was no record of the union s internal meetings. There have been meetings between the company and the SPSI dated 11 November 2013 to discuss the issue of overtime, fingerprint and other. List of the union s membership had been available and also with the evidence of cuts on the salary slips. Sampling conducted in the name of Bpk Suharyanto, there was Rp.2000 reduction in his salary slip for the union s September 2013 contribution Langling Mill Trade union at the Langling Mill was formed in accordance with the decision of work unit deliberation for the period In the records of recent meeting dated 2 August 2013, the unions were questioning some issues, among others, Personal Protection Equipment supplies 75of 135

76 (PPE) of helmet, ear plugs, gloves and shoes. In addition the unions ensure that the distribution time of THR follows the government provisions i.e. 2 weeks before the Idul fitri. The company responded to this aspiration by ensuring that PPE supplies are available and can be asked for any time whenever they are damaged and the THR will be given 2 weeks before the Idul Fitri. Compliance Status: Compliance 6.7 Children are not employed or exploited. Work by children is acceptable on family farms, under adult supervision, and when not interfering with education programs. Children are not exposed to hazardous working conditions The company has had a policy regarding worker age requirements based on the Government Regulation No. 13/2003 and not to employ children under 18 years old as contained in the circular letter of 26 March 2013 from the SMD operation to all companies under the SMART group. Bapak Haryanto has been working as a harvester for 8 years, have 2 children aged 9 and 3 years. According to the interview the children have never helped him with the harvest in the estate. The oldest child is in the elementary school grade 3 and the youngest child is left at the day care in the estate because his wife also harvests the fruit. (RSPO 6.7). The company has had SOP of Manpower Recruitment (SDM A ) but it has not specified worker minimum age requirements, only a maximum age requirement i.e. 45 years old. The company has made Circular Letter to all the Unit Heads No. 002/SE-HRDV/03/09 establishing requirements for manpower recruitment with the minimum age of 18 years old. It is advisable to include employment minimum age in the SOP that follows the requirements i.e. over 18 years old. During the preliminary audit, sampling carried out on the list of BHL workers in Bangko Estate, there was still a worker when recruited aged less than 18 years old. The data was in the name of Agus in the maintenance section and was born and employed on so that his age when employed was 17 years 7 months, thereby a minor finding was issued. During the certification audit, the company showed that there was an error in entering data on the database where the copy of the worker s identity card showed that he was born in 1985, so the worker s age was 27 years 7 months. Compliance Status: Compliance 76of 135

77 6.8 Any form of discrimination based on race, caste, national origin, religion, disability, gender, sexual orientation, union membership, political affiliation, or age, is prohibited The company provides equal opportunities to everyone to be employed in the company. On the document: (1) HRD policy No. A , effective on 1/9/2005 issued by the Managing Director Strategic, item 2, it is stated that the organization in principle employs individuals who are competent according to the requirements for their position without discriminating based on ethnic, race, and religion". (2) Employment Policy: Conditions of Recruitment and Selection Outside Jakarta (no. SDM A , dated 1/9/2005), regulates that the employment recruitment does not specify certain ethnic, gender, or religious requirements. The point is to meet the requirements for the position and aged at least 18 years old. Compliance Status: Compliance 6.9 A policy to prevent sexual harassment and other forms of violence against women and to protect the reproductive rights is developed and applied The company has had policies related to sexual harassment by creating a Committee on Gender. Socialization has been conducted in several places but based on sampling in the preliminary audit the workers have not received the socialization. This was found in the district 4 block b1-c1 on harvesters and fruitlet collectors and district 5 Block 6 the fruitlet collectors. This has been corrected by carrying out re-socialization to the workers in all divisions in September and October During the certification audit, there are still harvesters and fruitlet collectors in the District 4 block B4 found not understand correctly the meaning of sexual harassment. Based on the results of interviews with BHL spraying personnel in Block B3 Division 5 (2º 6.27 S and 102º E) they appear to have known about sexual harassment, sexual harassment definition and know how to report if sexual harassment occurs. They know Ny Mary as Chairman of Commission on Gender. The company has had policies related to sexual harassment by creating a Committee on Gender. Socialization has been conducted in several places but based on sampling it is found in the district 4 block b1-c1 on harvesters and fruit collectors and district 5 Block 6 the fruit collectors, the workers have not received the socialization but the socialization has been carried 77of 135

78 out on 4 October The company has followed up by conducted re-socialization Sexual Harassment to all workers. The evidence such as documentation socialization Sexual Harassment Compliance Status : Compliance 6.10 Growers and mills deal fairly and transparently with smallholders and other local businesses. The company currently makes cooperation with cooperatives and or farmer groups. There are 5 cooperatives and 16 farmer groups who cooperate with the company. During the preliminary audit, an SPK was found not conform to the implementation in the field. The SPK states that the cooperation pattern is full management ' while in reality it is just cooperation for FFB purchases. Likewise any guidance/criteria on fruit maturity by means of indicator/medium understood by all parties are not yet available. The company has revised the SPK with 5 KUD and 16 Farmer Group that ensures a cooperation pattern of FFB purchases. The method of penalty has been set and in compliance with the Government provisions. The criteria of fruit maturity has been made in the form of pictures and socialized to the KUD and local farmer groups. Sampling of SPK with KUD i.e. NO BNGP/PLASMA/06/13/001 between H. Edy Sujono and H. Damanik and the SPK is valid from 01 June 2013 to 31 May During a meeting with the cooperative and the plasma members, it was confirmed that the method of payment had been agreed i.e. a cash and carry in accordance with the SPK. Transparency in the price of FFB and the method of FFB sorting and the penalty understood and agreed upon by both parties had been applicable. Compliance Status: Compliance 6.11 Growers and millers contribute to local sustainable development wherever appropriate The company has had an annual CSR program and a five-year program categorized as a 5 year strategic plan. There are 3 sources in the planning of CSR program i.e. 1. programs from the head office, 2. based on the SIA identification and 3. community proposal. The CSR program developed for a year has included Langling Mill and Bangko Estate. 78of 135

79 During the preliminary audit it was found that CSR program 2013 consisted of 6 programs but some of the programs were not realized, among others, the installation of conblok in the SD 299, the construction of SD AL-Husnah in Mampun Village. The method of evaluation for the planned program is not found. During the certification audit, the company had developed the evaluation methods for the realized program. There were still programs not yet realized due to the budget proposals and the replacement of CSR programs related to adjustment in budget. This leads to uncertainty about the previously developed CSR plan. The company should ensure the planned CSR programs, starting from identification, planning, and budgeting and ensure the realization of the plan and its periodic evaluation. The company has the 5 year CSR Annual Strategic Plan for PT KDA and has been revealed to be an annual program. For the implementation of CSR programs in proses.because there are several CSR activities not all be realized in the year 2013, so that should carry over to 2014 or there are other activities that are converted to more mainstream. The company has made the improvement by making CSR Semester Evaluation Program yearly. Compliance Status: Compliance 7 RESPONSIBLE DEVELOPMENT OF NEW PLANTINGS 7.1 A comprehensive and participatory independent social and environmental impact assessment is undertaken prior to establing new plantings or operations, or expanding existing ones, and the results incorporated into planning, management, and operations Not Applicable 8 COMMITMENT TO CONTINUOUS IMPROVEMENT IN KEY AREAS OF ACTIVITY 8.1 Growers and millers regularly monitor and review their activities and develop and implement action plans that allow demonstrable continuous improvement in key operations The company has conducted Internal Audit (Mill Audit & Advisory) and Agronomy Audit & Advisory per semester. The internal audit has discussed issues related to best practices as well as determination of the standard specified by the company. 79of 135

80 The company has established innovation program to ensure there is a program that shows any improvement. For example the reduction in the use of CACO3 in the mill, efficiency in the use of diesel fuel to shell and water use efficiency, In an effort to perform monitoring and review the operational activities of mill and estate and an effort to do the improvement, the company has internal audit activities carried out per semester. Internal Audit refers to the RSPO Internal Audits Procedure No: SOP/SPO/SMART/LH-16, revision 01, issued on 1 July The Internal Audit Team: Agus Gunawan (Lead Auditor), Adhi Wiratmoko, Firmansyah, Hanita, Vira Permata Sari. The appointment of the team was by Regional Controller on 15 June 2013 through the letter No.: 066/RC-JAMBI1/06/2013. The Lead auditor attended auditor training on November Audit was carried out on June Records of audit implementation such as audit schedule and checklist are available. Internal audit results are 8 nonconformities for Bangko Estate; and all nonconformities have been followed up. In addition to the above two activities, another audit such as Mill Audit & Advisory is conducted. Langling Mill Division conducted audit on February 2013 for the quality of waste management and it is advisable to maintain its condition. Agronomic Audit & Advisory for Estate Bangko was on 25 January 2013 (Period ), increasing the control, officers should control the field application of POME and to seal the leaked bed; the compost application should be accurate in dosage. The company has a commitment through a memorandum No.: SW-0228/VPA-1/1/2009 from the VPA-PSM1 on 5 January 2013 to reduce paraquat and other restricted herbicides and must decrease each year. Compliance Status: Compliance 80of 135

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83 D.2. Statement by the Certifier Body on Behalf of PT. Sucofindo SBU-SICS We, the undersigned declare that the information and conclusions included in this report have been prepared in accordance with rule and standard of RSPO, P&C, and that the certification decision has been based upon this information. Verified and Reviewed by: Name Position Warsid Sumarlin SLA / LA / Auditor Signature Date Approval: Name Position Triyan Aidilfitri Department Head of Management System Certification Signature Date 82of 135

84 List of Abbreviation BNGE CPO CSR DOE EFB EIA FFB FSMS GMP GPS HACCP HCV HCVF HGU IEMA IPM IRCA JLTM KDA KKPA LNGM MOU MSDS Bangko Estate Crude Palm Oil Corporate Social Responsibility Department of Environment Empty Fruit Bunch Environment Impact Assessment Fresh Fruit Bunch Food Safety Management System Good Manufacturing Practice Global Positioning System Hazard Analysis and Critical Control Point High Conservation Value High Conservation ValueForest Hak Guna Usaha Institute of Environmental Management and Assessment Integrated Pest Management International Register of Certified Auditor Jelatang Mill Kresna Duta Agroindo Kredit Kepada Koperasi Primer Langling Mill Memorandum of Understanding Material Safety Data Sheet 83of 135

85 NA NC NCR OSH OSHAS P&C PK PKO POM POME PPE RSPO RSPO NI Not Applicable Non Conformity Non Conformity Register Occupational Safety and Health Occupational Safety and Health Assessment Scheme Principle and Criteria Palm Kernel Palm Kernel Oil Palm Oil Mill Palm Oil Mill Effluent Personal Protective Equipment Roundtable on Sustainable Palm Oil Roundtable on Sustainable Palm Oil National Interpretation SA8000 Social Accountability 8000 SIA SIO SOP UKL UPL WWTP WHO Social Impact Assessment Surat Izin Operator Standard Operating Procedure Upaya Pengelolaan Lingkungan Upaya Pemantauan Lingkungan Waste Water Treatment Plant World Health Organization 84of 135

86 APPENDIX-1 MAP 85of 135

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91 APPENDIX- 2 NCR 90of 135

92 SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES * Please send your response(s) to this Non Conformitie(s) + obs also in softcopy Non Conformity / Observation Report Organization Audit No. No. Standard. Audit Date : RSPO (1) RSPO (Preliminary) ATL / Auditor : (TSS, GGU, GIA, NS, ).(signature) Organization Rep. :.(signature) Audit Root Cause Corrective Action & Audit Team No. Category Clause Std or Description Investigation* Evidence* Review (1) (2) (3) (4) (5) (6) (7) (8) (9) 1 Observasi TSS The company should There were letters in Corrective Action: Closed ensure that all letters the request and All letters have been concerning requests response book not yet ensured to have been and their corresponding responded. responded and within the responses are time set in the SOP. registered in a register book and ensure that Evidence : the response is All letters in the request provided within the time and response book have 91of 135

93 as set in the relevant been responded. SOP. All incoming and outgoing letters should be retained and the retention time be defined according to requirement. 2 Observasi TSS The company should There was security Corrective Action: Closed ensure the compliance personnel with There has been a permit for with the Ministry of overtime longer than 3 deviation from the Working Manpower regulations hours/day. Hours of Merangin related to working hours Regency. (40 hours/week) and overtime (max. 14 Evidence: hours/week). Document of permit to deviate from Working Hours. Recapitulation of workers overtime data. 3 Major TSS The company did not The Bangko Estate Corrective Action: Open have HGU for Division 4 Division 4 with a total Documentation that the estate in the Bangko land area of 218 Ha processing of HGU has Estate with a total area has a HGB. However, been in the Committee B of 218 HA. Until then the HGU is under 92of 135

94 the company had process by Committee Evidence : submitted the B. The HGU processing application for HGU of documents are available Ha and Ha. The latest data available was cadastral measurement maps. 4 Observasi GGU The BPN/KDA XXV There was a BPN Corrective Action: Closed marker at coordinates marker that was not at Minutes of changes in a E and the coordinate point as marker position from its N UTM had it should be. proper place. moved. The company should make the Evidence: minutes of changes in Minutes of Changes in the BPN/KDA XXV Marker Position. marker position to prevent possible conflicts. 5 Observasi GGU The BPN/KDA 08 There was a BPN Corrective Action: Closed marker with the marker not at the The relocation of Marker coordinate of correct coordinates. has been done E and The minutes of marker N had not position that is not in the correctly positioned, correct position have been 93of 135

95 because there was also made. the BPN old peg. The BPN/KDA 08 marker Evidence: should be placed at the Minutes of Marker position determined by Relocation. BPN. 6 Observasi GGU The company had the Form of marker Corrective Action: Closed record of Bangko Estate maintenance has been The form of marker (BNGE) Boundary available but the form maintenance has been Marker Maintenance needs to include the added with an item 2013 with the criteria: a. marker s coordinates. concerning the marker s Run the checklist, b. coordinates. Marker Repair c. Painting, d. Marker Site Evidence: clearing. The company The new form of Marker should add Marker Maintenance has been Coordinate Monitoring added with Marker to the criteria to prevent Coordinate Monitoring changes in the marker s criteria to prevent changes position. in marker position. 7 Observasi GIA/ At the time of site visit Ditches are not a Ditches are not a water Closed GGU and interviews with water body. body. spraying personnel it was found that 94of 135

96 Agrochemical spraying was applied on the oil palm trees located adjacent to the ditch. This indicates water body s pollution. The company should ensure that ditches within the estate area are not directly drained to the River regardless small dosage in use. 8 Minor GIA The company had not Annual general check- Corrective Action: Closed implemented special up has been Special health examination health examination on conducted but special was carried out in 2013, In the spraying personnel health examination 2014 regular check-up will for 2013 and not yet was not conducted in be programmed twice a conducted according to year. Regulation of the Minister of Manpower Evidence : No.3/1996 that requires Results of Audiometry, the examination to be Spirometry, Cholinesterase conducted once every 6 in October months. 95of 135

97 9 Observasi GIA Health examination of Pregnancy tests for Corrective Action: Closed female spraying female spraying 1. Pregnancy examination workers in order to workers had not been has been conducted using ensure they are not implemented. Test Pack pregnant should be 2. Develop pregnancy carried out monthly. examination program for female spraying workers. Evidence: 1. Pregnancy test results 2. Pregnancy Test Certificate for Workers involved in Herbicide use. 10 Observasi NS There was one vial of The opened vial was Corrective Action: Closed anti snake venom used not disposed into Expired vials of anti snake and expired in August medical waste bin. venom have been removed 2013 not yet disposed. from the clinic s stock and disposed into the clinic s medical waste bin and submitted to the medical waste disposal facility of Bangko Regional Hospital Evidence : 96of 135

98 1.Minutes of expired anti snake venom vial disposal, 2.Document of medical waste delivery to the Bangko Regional Hospital 11 Observasi NS The revision of When harvesting the Corrective Action: Closed harvesting SOP or harvesters were not Socialization/training has creating longer extending the stickpole been conducted in good stickpoles needs to be to its full length. harvesting practices, and considered, because working equipment has from field observations been ensured to function at B6 Block (2o 6.05 S properly. and 102o 2.17 E) the harvesters were cutting Evidence: the frond at upright Photos and attendee list of position and the frond good harvesting practice was drop less than half socialization. a meter from the harvesters. 12 Minor NS The personnel who do When mixing Corrective Action: Closed the mixing in the Herbicide the The masks used during Division 5 s chemical personnel were mixing of chemical have warehouse had not wearing cloth masks. been replaced with 97of 135

99 been equipped with inorganic chemical chemical cartridge cartridge masks. masks. Evidence: Cartridge acceptance photos and minutes. 13 Minor NS The organization was General check-up is Corrective Action: Closed not consistently performed annually but For 2013 special health implementing regular special health examination has been and special health examination was not conducted. For 2014 a examination every year, performed in regular examination will be such as audiometry and programmed twice a year. spirometry were conducted on 22 Evidence: February 2013, but in The results of Audiometry, 2012 they had not been Spirometry, Cholinesterase carried out, and in 2013 examination in October was still in process Observasi NS Fire mitigation It had been listed in Corrective Action: Closed personnel at Langling the training program The fire warden training Mill did not comply with but the vendor to complies with Decree of the the annex III of Decree provide the training Minister of Manpower of the Minister of had not been obtained. No.186/1999 and has been Manpower no. included in the training 98of 135

100 186/MEN/1999. program. Evidence: Training program at LNGM 15 Minor NS The boiler 1 s The Pressure gauge Corrective Action: Closed combustion chamber rubber hose was The clogged Pressure pressure gauge was at clogged. gauge s rubber hose was 1.2 inch water. cleaned. Evidence: 1. Photos of Pressure Gauge hose being cleaned 2. Checking for the Pressure Gauge proper function during test trip once every week. 16 Major TSS The company had a The related SOP is Corrective Action: Closed SOP for selecting foumd not completed. Revise the SOP and add trained contractors. the requirement for trained However, from sampling contractors and ensure the there was no evidence selected trained contractor found that trained to be used the company. contractor selection had been done. 99of 135

101 17 Minor GIA Langling Mill had in Langling and Jelatang Corrective Action: Open place the UKL/UPL with Mills have 2 Develop a chronology of approval Environmental correspondence between No.731/BA.5/IX/1996 documents i.e. PT. KDA and the Ministry of year However, UKL/UPL and AMDAL Environment. the core land area had and there is a letter changed and the from the Ministry of Evidence: UKL/UPL document Environment 1. Document on the was not revised yet. concerning the chronology of Langling and Jelatang correspondence between Mills environmental PT. KDA and the Ministry of documents that the Environment. company is to use the existing UKL/UPL until 2. Hard Copy of the further decision from Document of the Ministry. correspondence between PT. KDA and the Ministry of Environment in Observasi GGU NKT/HCV socialization Socialization was not Corrective Action: Closed was delivered to made to all PT. KDA s 1. Intensify socialization to spraying workers and workers and the all workers that represent security personnel only surrounding the estate, mill and support and such socialization community. workers. was not received by 100of 135

102 other workers. The 2. Conduct socialization or company should public consultation by conduct socialization to inviting village leaders and all PT. KDA s workers District Leader Forum and the surrounding (Muspika) community. Evidence: HCV socialization photos, attendance list, materials. 19 Observasi GGU The company had the Exchanges in the Corrective Action: Closed record of NKT/HCV position of HCV To check that the position markers. However, the markers have of HCV markers are position of B11/31 occurred. matching with their marker was in the corresponding coordinates. position of B11/33 marker and vice versa. Evidence: This should be promptly Photos and Minutes. corrected according to the internal document of NKT/HCV BNGE marker s coordinates. 20 Observasi GGU The HCV/NKT The monitoring form Corrective Action: Closed Monitoring Form has does not have PIC and Add the HCV monitoring incorporated deadline columns. report of 2012 and of 135

103 improvement period with PIC and recommendation as well deadline for completion. as recommendation as a result of routine Evidence : monitoring every 2 The revised monitoring weeks. However, the form which includes PIC Person in Charge (PIC) and Deadline columns. and the deadline for completion of the recommendation should be determined. 21 Minor GIA Langling Mill already As the stored Corrective Action: Closed had a hazardous waste hazardous waste 1. It has been coordinated storage permit (Decree quantity was small, with the Merangin Regency of the Regent of storage extension was BLHD by sending the Merangin Regency No. applied to the BLHD of second letter. The transport 14/LH/2010) with 90 Merangin Regency. of the Semester 2 had been days storage period. However, until that done. Based on hazardous time no response had waste balance there been received to the 2. New permit has been was hazardous waste application from the issued with 180 days stored more than 90 BLHD of Merangin storage period. days. The application Regency. Evidence: for storage extension 1. A letter from BLHD 102of 135

104 had not yet been responded and approved by the local Government. Bangko No.660/264/BLHD/2013 dated 7 October 2013 as a response to Application for Hazardous Waste Storage Extension time from 90 Days to 180 Days. 2. Hazardous Waste Storage Permit based on Decree of the Regent of Merangin Regency No. 28/LH/2013 on Hazardous waste temporary storage permit of PT. KDA, Jelatang Village, Pemenang District Hazardous Waste Storage Permit based on Decree of the Regent of Merangin Regency No. 29/LH/2013 on Hazardous waste temporary storage permit of PT. KDA, 103of 135

105 Langling Village, Bangko District. 22 Minor NS Emergency simulation Emergency simulation Corrective Action: Closed drill in the field had not had been implemented Land fire mitigation been implemented. (including fire simulation has been mitigation) but land fire implemented. mitigation had not been performed. Evidence: Attendance list, photos, scenario and evaluation of land fire mitigation simulation. 104of 135

106 23 Observasi TSS The company has Not all of the Corrective Action: Closed developed the list of information in the list The list of information for stakeholders and of information for stakeholders has been documents accessible stakeholders can be revised as to the to relevant accessed by information accessible to stakeholders. The list stakeholders. stakeholders. However, should be ensured to information on financial include the list of transaction cannot be information that can be included in this list of accessed by the information for surrounding community stakeholders. according to its relevance. Evidence : 105of 135

107 24 Minor TSS The company had SPKs Plasma FFB Corrective Action: Closed with contractors. transportation SPK did An article has been However, from sampling not require contractors incorporated into the SPK it was found there were to comply with that requires contractors to some SPKs without applicable manpower comply with applicable contractor requirements regulations. manpower regulations. to comply with applicable manpower Evidence: regulations. Plasma SPK has contained an article that requires contractors to comply with applicable manpower regulations. Documentation of Plasma SPK socialization. 25 Minor TSS The company had a (Bylaw and minutes of The trade union s bylaw Closed trade union. However, meeting were not has been documented in the trade union s bylaw available) the company was not found. Records documentation and the of meetings with the minutes of meeting with the trade union were not union have been found (minutes of documented as well. meeting and data of conveying aspirations to 106of 135

108 the management). 26 Minor TSS The company had a Socialization on sexual Corrective Action: Closed policy related to sexual harassment had not Socialization on sexual harassment by creating been carried out. harassment has been a Gender Committee. carried out. Socialization had taken place in several Evidence. locations. However, Sexual harassment from sampling it was socialization attendance found that the workers list, photos, activities, and in the District 4 Block materials. b1-c1 harvester and fruit collector and the District 5 Block 6 fruit collector had not received such socialization. 107of 135

109 27 Minor TSS The company had a Data entry personnel Corrective Action: Closed policy on worker s age had made some It has been checked that it requirements in mistakes when was an administrative error accordance with inputting data in the because after rechecking it Government Regulation name of Agus. was found the worker had no. 13/2003 not to been above 18 years old employ children under when employed. 18 years old as It has been ensured that contained in the Circular administrative data entry dated 26 March 2013 has been correct. from the SMD operation to all companies under Evidence: SMART group. From After the Payroll personnel sampling of BHL has completed worker s workers it was found data entry the KTU will that there were workers verify the data. under 18 years old when recruited. Data was in the name of Agus in the maintenance section with date of birth and employed on 108of 135

110 so that his age when employed was 17 years 7 months old. 28 Minor TSS The company had There was no SPK Corrective Action: Closed cooperated with 5 KUDs that ensures agreed SPK has been established and 16 Farmer groups. cooperation scheme with KUD/Farmer Groups However, the company on FFB delivery to the concerning the cooperation did not have SPK that Mill. scheme on FFB delivery to ensures agreed the Mill. cooperation scheme on FFB delivery to the Mill. Evidence: The Sop methods of SPK between Mill and KUD sorting and penalty and on FFB delivery its implementation did cooperation scheme. not ensure compliance with the government provisions. 109of 135

111 29 Observasi TSS The company should There was fruit Corrective Action: Closed develop acceptance criteria but The criteria of ripe fruits indicator/criteria on the not documented in the has been produced and ripeness of oil palm fruit form of fruit ripeness displayed at strategic using a system criteria. locations to enable FFB understandable to all driver/supplier to parties. For instance by understand better. creating images of whole FFB for unripe Evidence: and over ripe fruits. Notice on fruit ripeness criteria. 30 Minor 6.11 The company had The company does not Corrective Action: Closed conducted SIA of have a time plan of Social impact management December 2011 social impact and monitoring plan has March 2012 period. management and been developed. From this report monitoring. negative impacts are Evidence: identified such as the There are RKS RPS cooperative roles that documents. are not maximum, complaint about dust from transportation activities, mill s smoke that pollutes the 110of 135

112 surrounding villages. The company does not have a time plan of social impact management and monitoring with community participation to be carried out regularly. 31 Minor TSS CSR Program 2013 The CSR program Corrective Action: Closed consists of 6 programs. implementation has The existing CSR program However, some not been monitored has been monitored and programs are not and evaluated. evaluated. realized including conblock paving in the Evidence: SD 299, the There is the CSR program construction of SD AL- monitoring and evaluation. Husnah, Mampun Baru Village, cleft-lip, hernia and cataract surgery. No evaluation of the planned programs was found. 111of 135

113 32 Observasi GIA The management The management Corrective Action: Closed review should not only review did not address The Management Review address the result of the internal audit will address social impacts, internal audit but also results; instead it pollution and emission, address the agenda addressed the agenda waste reduction, required in the standard required in the environmental impacts and such as social impacts, standard such as reduction of certain pollution and emission, social impacts, chemicals. waste reduction, pollution and emission, environmental impacts waste reduction, and reduction of certain environmental impacts Evidence: chemicals. and reduction of Discussion on social certain chemicals. impacts, pollution and emission, waste reduction, environmental impacts and reduction of certain chemicals in the Management Review. 112of 135

114 SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES * Please send your response(s) to this Non Conformitie(s) + obs also in softcopy Non Conformity / Observation Report Organization Audit No. No. Standard. Audit Date : RSPO (1) RSPO (Certification Audit) ATL / Auditor : (TSS, RQ, GGU, NS).(signature) Organization Rep. :.(signature) Audit Root Cause Corrective Action & Audit Team No. Category Clause Std or Description Investigation* Evidence* Review (1) (2) (3) (4) (5) (6) (7) (8) (9) 113of 135

115 1 Major TSS Based on information The company has The evidence of Minor from the Langling Mill Union Leader and overtime report in November 2013, still found the employee who work over the time issued Circular Letter by Director of Human Resources No. 004/HR Ops/2014 stated that the overtime system implementation of the letter will be sought on the next surveillance audit. (See appendix 4.2) See the evidence of implementatio n on the next surveillance limits specified by should be met with the Depnaker (max 14 government regulation. hours a week). The overtime job Sampling is done on should also agreed of employees in the lab both parties and the Boiler at Langling Mill 2 Major TSS The companies Division 4 Bangko Corective Action: Closed don thas the HGU yet Estate area of 218 The company already for estate in division IV Bangko Estate area of 218 hectares. So far the company has applied for the concession area of ha and ha. The latest data that hectares has HGB are currently in process into the legaldecree (HGU) by BPN. have Legal decree (HGU) from BPNJambiissued on 20January2014, witha totalarea of hectares. available is an invitation 114of 135

116 from Jambi BPN no. 108/ /X/2013 which invite the company to attend a meeting with B committee on October 30, Evidences: 1. HGU No. 01/HGU/BPN.15/2014 dated January 20, 2014 is located in Karang Berahi Village, Pamenang, Merangin District, Jambi Provincewithareadetails: - NIB total area 92,89 hectares - NIB total area 33,07 hectares Located in the Jelatang village, Pamenang, Kab. Merangin District, Jambi Provincewithareadetails: - NIB total area 81,56 115of 135

117 hectares 2. HGU No. 02/HGU/BPN.15/2014dat edjanuary 20, 2014is locatedinkarang Berahi and Jelatang Village, Pamenang, Merangin District, Jambi Provincewithareadetails: - NIB total area 4,76 hectares - NIB total area 5,80 hectares Total HGU s are 218, 08 hectares Valid 35 years. (See Appendix 4.1) 116of 135

118 3 Major TSS 2. The raw material for 1. At the previous 1. Revised timebound PT Observation (RSPO POM PT. Kresna Smart timebound SMART, Batang Gading Certif Duta Agroindo plan, it was found Estate to be included as Sys) & (KDA) Langling that Batang Gading a supply base for Mill is supplied from Estate as a supply Langling Mill (RSPO the FFB which are base to others SCC System) two (2) Own estates, five (5) named Sungai Bengkal Mill Evidence : & RSPO SCC Std E 3.3 smallholders and 2 (two) from associated smallholders. The application of Revised timebound PT SMART Certification audit was Langling Mill and Bangko Estate as a supply base. During the preliminary audit, it was informed that the supply base from main estate is only Bangko estate. At the time of 117of 135

119 certification audit, it was found that Langling estate also receives continually from other own estate named Batang Gading estate. The Batang gading estate supplies about 84,48% meanwhile Bangko estate supplies for 15,52%. The Batang gading estate belongs to PT SKU time bound plan which will be certified by other certification body. Refers to the RSPO SCC system and RSPO Certification system, the Batang gading estate 118of 135

120 should be within the scope of KDA- Langling mill certification. Team audit decide to issue the Major non-conformace. 3. In identification and traceability procedure (SOP / LNGM / SIK), Mass Balance included in the calculation of monthly, quarterly and yearly. At the time of the audit, the company doesn't have quarterly report to the recording and balance of certified FFB and CPO. 4. In identification and traceability 119of 135

121 procedure (SOP / LNGM / SIK), stated that the procuct at dispatch letter will be marked/stamp with Mass Balance/ Segregasi, In fact, the status of product is Mass balance only. 2. Mass balance calculation report is issued per monthly and yearly bases 2. Revised the report per trimonthly and yearly bases. Evidence : Mass balance report per three monthly bases 3. Related SOP is made generally to be 3. Revised related SOP and apply the Mass Balance Model for 120of 135

122 applicable to all Langling Mill suply chain. The application of the system will be adjusted specifically per location refers to the standard of SCCS Evidence: SOP Supply Chain Product Model Mass Balance (No. PT.KDA-LNGM/SOP/26 revised dated 01/03/2014) 4 Major RQ The company has UKL / LNGM and JLTM have Corective Action: Closed UPL document of 2 environmental -Conduct appropriate Langling Mill and documents that UKL / follow-up letter No. KLH. Jelatang Mill and has UPL and EIA, where B8884/DEP. undergone extensive there is a letter from I/LH/PDAL/08/2013 with changes in croplands. the Ministry of certainty petition for The company is in the Environment of the determination of document process of changing Environmental those document and Document owned didn't finish yet because Langling Mill and Evidance: of the authority problem Jelatang Mill, the -Available Letter No. KLH. between the local and contents of which the B8884 / DEP.I / LH / the central government Company temporarily PDALs / 08/2013 to provide the final re-use the UKL / UPL Clarification regarding the solution. to the Ministry Decides environmental document subsequent decision. PT. KDA await further 121of 135

123 policy of the Ministry of Environment. -Company Sent letter to KLH on rule-setting documents that must be made and arranged for a company that has been in operation but have not had the environmental document. 5 Minor NS There are grading work Job FFB Sorting is Corrective Action: Closed in Langling Mill with daily routine work as All employees grading will agreement letter no. work support FFB be change the status of the SPK/LNGM/09/2013/00 processing at Palm Oil agreement letter to 63 - September 2, 2013 Mill PKWT(Perjanjian Kerja between KDA and waktu Tertentu) per Dumuk Baharija. This January 1, 2014 job is not a job that could be outsourced as Evidance: provided in (Manpower) Memorandum Mill LNGM Permenakertrans no. Head Unit as at December 19/2012 chapter III, 13, 2013 on changes in article 17, paragraph 3 employment status Grading and as described in of Outsourcing became 122of 135

124 attachment PKWT(Perjanjian Kerja SE.04/MEN/VIII/2013 waktu Tertentu) section III letter B point 2. 6 Minor NS There are workers who Work chartering Corrective Action: Closed are not included in allowed by PKB BKS- Chartering Worker PKWT, but not doing PPS which is followed provisions in accordance chartering agreements by all the companies with BKS-PPS (ALL with working service that are on Sumatra is PLANTATION COMPANY providers that have a member of BKS-PPS in SUMATRA) is still valid legal entity. This is not and PKB BKS-PPS is until November 2014 suitable with UU no. 13 an agreement and 2003 article 65. Those agreement between work doesn't include the the company and SPSI Evidance: work that can be then passed by 1.Documen BKS-PPS outsourced according to Department of Labour. Permenakertrans no. This means that all 19/2012 chapter III members of the article 17 paragraph 3 company BKS-PPS and as described in follow PKB taht had attachment been approved by the SE.04/MEN/VIII/2013 Government. In this section III letter B point case the company filed 2. However, article VI an objection with the 123of 135

125 paragraph 3 in BKS auditor's findings and 2012 regarding requested that this be wholesale work states a record of legality that that the worker who must be resolved work on his own less between the than 7 hours a day or commission / settling for less than the certification with daily volume set for him, government will receive a portion of executives and BKS- the daily wages, ie PPS. scaled time work in this case. Volume is resolved 7 Minor TSS There is a list of Because this SOP. Corrective Action: Closed contractors of the Only controlled about will be Publised New Of Bangko Estate and Contractor regarding SOP. Controlled about randomly found there Health And Safety Contractor are contract that did not Implemetation and not include the requirement yet update for Evidance of compliance with employment Scan Copy Cover New applicable regulations in Publised SOP. Controlled employment about Contractor No. There is contractor control procedure SOP/SMART/UMUM/SADV /I/ of 135

126 (SOP/SMK3/SMART/LH -26) but it only requires HSE aspect and not included ensuring compliance with labor and the use of a trained contractor. 8 Observasi TSS The company already Not yet employees Corective Action: Closed has a policy regarding know and understand Re-Socialization Sexual sexual harassment by about sexual Harassment will forming a gender harassment that has implemented committee. Socialization been done previously has been done in some socialized places but the Evidance: socialization should be Documentation done thoroughly. socialization Sexual Randomly found in Harassment block 4 division 4 "berondol" collectors who have not properly understood the meaning of sexual harassment 125of 135

127 9 observasi TSS The company already 5 year CSR Annual Corrective Action: Closed has an annual and five- Strategic Plan for PT Making CSR Semester year annualized CSR KDA has been made Evaluation Program program basis. CSR which is then revealed programs should be to be an annual Evidance: made systematically, program. For the Documents Semester starting from implementation of evaluation of CSR identification of needs - CSR programs in planning - submission proses.because There and approval of a plan - are several CSR budget - implementation activities not all be -evaluation. From the realized in the year CSR data doesn't found 2013, so that should any approved CSR carry over to 2014 or budget proposal for there are other CSR activities in 2013 activities that are and therefore can not converted to more be ensured mainstream implementation of the plan 126of 135

128 APPENDIX- 3 PT. KRESNA DUTA AGROINDO LANGLING MILL RSPO SUPPLY CHAIN CHECKLIST MASS BALANCE MODUL PT. Kresna Duta Agroindo LANGLING Mill (LNGM) is implemented the supply chain system procedures as required in RSPO certification. The company has set the supply chain system categorized as Mass Balance scheme. A. Documented Procedures 1.1 Complete and up to date procedures covering the implementation of all the elements in these requirements. Records/Evidence: There is procedure SOP Supply Chain Produk RSPO Model Mass Balance PT KDA-LNGM/SOP/26 dated. 01/03/2014 In identification and traceability procedure (SOP / LNGM / SOP/26), stated that the procuct at dispatch letter will be marked/stamp with Mass Balance/ Segregasi, In fact, the status of product is Mass balance only. Status Compliance : Major non-conformity The name of the person having overall responsibility for and authority over the implementation of these requirements and compliance with all applicable requirements. This person shall be able to demonstrate awareness of the facilities procedures for the implementation of this standard. Records/Evidence: Management Representative related to RSPO-SCCS implementation Traceability Officer related to RSPO-SCCS implementation 127of 135

129 Decree No. 01/PC-Jambi/XI/2013 dated. 01 November 2013 Document Controller - SPO Officer related to RSPO SCCS implementation Decree No. 05/FM/VIII/2013 dated. 01 November The facility shall have documented procedures for receiving and processing certified and non-certified FFBs. Records/Evidence: SOP Identifikasi dan kemampuan-telusuran (SOP Identification and Traceability) SOP/LNGM/SIK Rev.01 dated 01 November 2013 Surat Pengantar Buah (Fruit Delivery Letter) (BNGE) with Mass Balance mark LNGM: Form Rekap Penerimaan TBS Per Unit (FFB Receiving Resume Form each Unit) CPO Production Report Total 4, Ton/Year CPO (Data Langling Mill Mass Balance Report for SCCS January - December 2012) PK Production Report Total 1, Ton /Year CPO (Data Langling Mill Mass Balance Report for SCCS January - December 2012) CPO & PK Dispatch Report Total 62, Ton/Year CPO (certified & Non certified) Total 14, Ton/Year PK (certified & Non certified) B. Purchasing and goods in 2.1 The facility shall verify and document the volumes of certified and non-certified FFBs received. Records/Evidence: There is procedure SOP Identifikasi dan kemampuan-telusuran (SOP 128of 135

130 Identification and Traceability) SOP/LNGM/SIK Rev.01 dated. 01 November 2013 There is a database system called Weighbridge Computerized Program which has been designed to separate incoming FFB from own estate, Scheme small holders and independent small holders with the specific code in database. 2.2 The facility shall inform the CB immediately if there is a projected overproduction. Records/Evidence: SOP Identifikasi dan kemampuan-telusuran (SOP Identification and Traceability) SOP/LNGM/SIK Rev.01 dated. 01 November 2013 has been stated if there is a projected over production then the action will be taken as bellows : Inform related RSPO certification Body and RSPO IT System. Re analyze production data and mass balance report Calibrated and recheck for the bridge and supporting equipment. To define the projection of certified product considering the error rate (contamination) for maximum5% from the total projection data. C. Record keeping 3.1 The facility shall maintain accurate, complete, up-to-date and accessible records and reports covering all aspects of these requirements. Records/Evidence: Surat Pengantar Buah (Fruit Delivery Letter) (BNGE) with Mass Balance mark Form Rekap Penerimaan TBS Per Unit (FFB Receiving Resume Form each Unit) CPO Production Report CPO Production Report (daily, monthly and annual) 129of 135

131 All documents and records have been in controlled according to SOP Pengendalian Dokumen dan Rekaman (SOP Document Control and Record Control). SOP Pengendalian Dokumen (SOP Document Control) LNGM : PT KDA-LNGM/SOP/18 Rev.00 dated.02/01/2012 SOP Pengendalian Catatan (SOP Record Control) LNGM : PT KDA-LNGM/SOP/12 Rev.00 dated.02/01/ Retention times for all records and reports shall be at least five (5) years. Records/Evidence: Retention times of all records have been determined in SOP Pengendalian Dokumen dan Rekaman (SOP Document Control and Record Control). Retention time for all records and reports of PT. Kresna Duta Agroindo is 10 years. 3.3 The facility shall record and balance all receipts of RSPO certified FFB and deliveries of RSPO certified CPO, PKO and palm kernel meal on a three-monthly basis. Records/Evidence: The company has the monthly and annual report which contain record and balance all receipts of RSPO certified FFB and deliveries of RSPO certified CPO and PK. The company has no data record and balance all receipts of RSPO certified FFB and deliveries of RSPO certified CPO and PK on a three-monthly basis. Status Compliance : Major non-conformity All volumes of palm oil and palm kernel oil that are delivered are deducted from the material accounting system according to conversion ratios stated by RSPO. Records/Evidence: There is a database system called Weighbridge Computerized Program which has been designed to align and integrate from the material accounting system according 130of 135

132 to conversion ratios stated by RSPO. The supporting data such as : Mass Balance Report ; Daily, Monthly, and Annually CPO Production Report Surat Pengiriman CPO dengan Cap Massa Balance (CPO Dispatch Letter with Mass Balance Mark) Tiket Timbang Pengiriman CPO dengan Cap Mass Balance (CPO Dispatch Weight Ticket with Mass Balance Mark) The facility can only deliver Mass Balance sales from a positive stock. However, a facility is allowed to sell short. Records/Evidence: Can be trace down in CPO Stock Report and in CPO Dispatch Report 3.4 The following trade names should be used and specified in relevant documents, e.g. purchase. Records/Evidence: Can be trace down in Sales Contract D. Sales and good out 4.1 The facility shall ensure that all sales invoice issued for RSPO certified products delivered include the following information: a) The name and address of the buyer; b) The date on which the invoice was issued; c) A description of the product, including the applicable supply chain model (Segregated); d) The quantity of the products delivered; e) Reference to related transport documentation. Records/Evidence: The available evidence is the invoice of oil delivery in form of Delivery Order (DO) document issued for every oil delivery. The information written on the Delivery Order document are: delivery no, delivery date, reference no, reference date, name and 131of 135

133 address of buyer, ordered product details (name and total amount), and the transportation system for product transportation. E. Training 5.1 The facility shall provide the training for all staff as required to implement the requirements of the Supply Chain Certification Systems. Records/Evidence: The facility shall provide the training for all staff as required to implement the requirements of the Supply Chain Certification Systems. Records/Evidence: SOP Training Pengembangan Sumber Daya Manusia (SOP Training and Human Resources Development)Document No.: SOP/SPO/SMART/LH-10, Rev.01 issued 01/07/2010 RSPO SCCS Training material is available in Identification Matrix Needs Invitation, Attendance List, Socialization Training Material on RSPO SCCS, dated 16November 2013 F. Claims 6.1 The facility shall only make claims regarding the use of or support of RSPO certified palm oil that are in compliance with the RSPO Rules for Communication and Claims. Records/Evidence: JLTM have 7 Declaration of RSPO SCCS 1. Deklarasi RSPO-SCCS (RSPO SCCS Declaration) 2. Deklarasi Prosedur RSPO-SCCS Mass Balance (RSPO-SCCS Mass Balance Procedure) 3. Deklarasi Penilaian RSPO (RSPO Valuation Declaration) 4. Deklarasi Penjualan dan Pengeluaran Produk (Sale and Product Output Declaration) 132of 135

134 5. Deklarasi Penyimpanan dan dokumentasi rekaman (Retention and Record Documentation Declaration) 6. Deklarasi Nama Produk (Product Name Declaration) 7. Deklarasi Klaim/Pernyataan (Claim Declaration) 133of 135

135 APPENDIX 4 SUPPORTING DOCUMENT Appendix 4.1.Legal Decree (HGU) PT. Kresna Duta Agroindo 134of 135

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