Malaysian Timber Certification Scheme : MC&I(Natural Forest) (Associated Documents) MALAYSIAN TIMBER CERTIFICATION SCHEME

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1 Malaysian Timber Certification Scheme : MC&I(Natural Forest) (Associated Documents) Doc. Number: AD Version Date: 01 February 2013 Page: 1 of 16 MALAYSIAN TIMBER CERTIFICATION SCHEME PUBLIC SUMMARY OF RECERTIFICATION AUDIT OF PAHANG FOREST MANAGEMENT UNIT AGAINST THE REQUIREMENTS OF MC&I(NATURAL FOREST) Public Summary Date: 08 July 2013 Project Nr: Client: Web Page: Address: Country: MY02274 Pahang State Forestry Department Pengarah Perhutanan Negeri Jabatan Perhutanan Negeri Pahang Tingkat 5, Kompleks Tun Razak, Bandar Indera Mahkota Kuantan Malaysia Certificate Nr. SGS-MTCS/FM-0104 Certificate Type: Date of Issue: 1 June 2013 Date of expiry: 31 May 2016 Malaysian Timber Certification Scheme Forest Zone: Scope: Total Certified Area: Contact Person: Tropical Forest Management of 1,524,827 ha of permanent reserve forest in Pahang State for the production of timber 1,524,827 ha of natural forest in the PRF of Pahang FMU (excluding the PRF area planted or planned to be planted with forest plantations covering 38,075 ha) Dato Hj Paiz Kamaruzzaman State Director of Forestry Tel: +6(09) Fax +6(09) Recertification Audit Date: paiz@forestry.gov.my & 22 October 2012 Audit Team: i. Abdul Haye S (Lead Auditor) ii. Abdullah Din (Auditor) iii. Rick Gregory (Auditor) v. Dr. Savinder Kaur (Social Expert) SGS (Malaysia) Sdn. Bhd., No.26, Jalan Anggerik Vanilla 31/93, Kota Kemuning, Shah Alam, Selangor, MALAYSIA CONTACT PERSON: ABDUL HAYE S - Tel: +6 (03) Fax: +6 (03)

2 AD 32-A-01 Page 2 of 16 INTRODUCTION The Pahang Forest Management Unit (FMU) managed by the Pahang State Forestry Department was issued with a Forest Management Certificate (SGS-MTCS/FM-0104) under the Malaysian Timber Certification Scheme (MTCS) for meeting the requirements of the MC&I(2002) standard after a Stage 2 audit conducted in November Subsequently, Surveillance 01 and 02 Audits were conducted on 4 8 October 2010 and 31 October to 4 November 2011 respectively to ensure the continued compliance of the Pahang FMU to the requirements of the MC&I(2002).. In 2012, the FMU was due for a recertification audit which was conducted on October In line with the implementation of the transition plan from the use of the MC&I(2002) to MC&I(Natural Forest) under the MTCS, the recertification audit also included the MC&I(Natural Forest) in its audit scope. However any deviation from the new aspects in the MC&I(Natural Forest) as compared to the MC&I(2002) were raised as observations and not non-conformity. These observations were subsequently evaluated and classified as minor or major non-compliances by the CB on 1 February 2013 based on evidences submitted by the FMU manager to address the various observations raised. This public summary provides the findings of the Recertification Audit. With a total land area of 3,596,585 ha, Pahang is the largest state in Peninsular Malaysia. There has been no change in the area of forest cover compared to the Surveillance 2 Audit. Based on Surveillance 2 Audit Report, about 57.5 % or 2,069,253 ha of the Pahang State was under forest cover (see Annex 2), of which 1,562,902 ha (or 75.5%) are classified as PRF. The PRF has been classified into 11 functional classes as stipulated under Section 10 (1) of the National Forestry Act, Only areas classified as production forest can be harvested, while the other forest categories are for protection and conservation purposes. By forest types,, there are a total of 1,381,571 ha of Dry Inland Forest, 140,830 ha of Peat Swamp Forest and 2,416 ha of Mangrove Forest totalling to 1,524,827 ha that form the certified area of the FMU. Administratively, the FMU is divided into seven forest districts namely Kuantan/Pekan/Maran Forest District, Rompin Forest District, Temerloh/Bera Forest District, Jerantut Forest District, Lipis Forest District, Bentong Forest District and Raub Forest District. Each Forest District is headed by a District Forest Officer (DFO) and assisted by Assistant DFOs. For the recertification audit, a one-month stakeholder consultation was conducted in September Onsite consultations were also held with the staff of the Pahang FMU and other stakeholders, i.e. government agencies and local communities including the Orang Asli.

3 AD 32-A-01 Page 3 of 16 SUMMARY OF RECERTIFICATION AUDIT FINDINGS The Recertification Audit evaluated the continued compliance of the forest management practices in the Pahang FMU against the requirements of the MC&I(2002) as well as the new forest management certification standard, i.e. the MC&I(Natural Forest). The summary of the outstanding CARs closed-out (issued under the MC&I(2002) and new CARs raised (under the MC&I(Natural Forest) is as shown in Annex I below. RECERTIFICATION AUDIT Issues that were difficult to assess Number of CARs closed Number of CARs outstanding Number of New CARs raised Number of new Observation raised Certification Decision There is no significant changes in the management system of Pahang FMU compared to those recorded during the Surveillance 02 Audit. Eleven (11) Minor CARs issued during Surveillance 02 Audit are closed One (1) Minor CAR outstanding Seven (7) Minor CARs raised out of which three (3) are new CARs raised following the reclassification of Observations raised against the new MC&I(Natural Forest) Six (6) Observations are raised The Pahang FMU to be recertified as: The management system is capable of ensuring that all of the requirements of the applicable standard(s) have been met over the whole forest area covered by the scope of certification; The certificate holder has demonstrated, subject to the specified corrective actions, that the described system of management is being implemented consistently over the whole forest area covered by the scope of the certification; and The issues highlighted as Minor CARs must be adequately addressed and the adequacy of the actions taken need to be verified during the first surveillance visit to be conducted within 12 months from the date of recertification audit.

4 Malaysian Timber Certification Scheme : MC&I(Natural Forest) (Associated Documents) Doc. Number: AD Version Date: 01 February 2013 Page: 4 of 16 Annex 1 SUMMARY OF OUTSTANDING CORRECTIVE ACTION REQUESTS (CARS) CLOSED OUT AND NEW CARS AND OBSERVATIONS RAISED Summary of CARs Closed out (from Surveillance 02 Audit) CAR No. Indicator Non-conformance Objective Evidence Status Inconsistent implementation of the requirement for identification and protection of special sites. Special sites, including Orang Asli settlements, need to be mapped at FMU level Evidence of encroachment into buffer zone. Location of Orang Asli settlements and sites of religious and cultural importance have been identified and mapped and are available at the State Forestry Department in a map titled, Tapak Penempatan Dan Perkuburan Orang Asli Negeri Pahang Darul Makmur. (Skala 1:350000). However, the location of the special sites does not cover all districts in Pahang. It is only confined to the Kuantan/Pekan/Maran district. For example, the Lipis District Forestry Office has produced a map of special sites of the Orang Asli for thelipis District in a map titled, Peta Kedudukan Penempatan Orang Asli Pos Betau dan Pos Simoi. However, this is not reflected on the main map. Therefore, the map at the State Level is not updated and is not comprehensive. Harvesting procedures are available at the FMU to protect the soil from compaction by harvesting machinery and erosion during harvesting operations but not adequately implemented. This can be verified through evidence of encroachment into buffer zone in the form of tree felling and minor skidding activities as observed in JT 016/2011 in Yong Forest Reserve. Recertification audit verified that a map at the State level depicting the Orang Asli special sites compiled from the maps of the various forest districts is now available. Minor CAR 012 closed During the Recertification Audit, visits are made to four active logging areas in the following compartments: Compt 3B Lepar FR Compt 25A Chini FR Compt 38B Tekai Tembeling FR Compt 213B Ulu Jelai FR Verification during visits to these active logging areas confirmed that the construction of skid trails and feeder roads is found to be within the limit i.e. not more than 300m/ha and 40m/ha respectively. All the closed skid trails are found to be constructed with proper water bars to mitigate the water flow into the forest floor. Water bars are SGS (Malaysia) Sdn. Bhd., No.26, Jalan Anggerik Vanilla 31/93, Kota Kemuning, Shah Alam, Selangor, MALAYSIA CONTACT PERSON: ABDUL HAYE S - Tel: +6 (03) Fax: +6 (03)

5 AD 32-A-01 Page 5 of 16 adequately constructed with a minimum height of 30 cm. All skid trails are planted with seedlings i.e. indigenous dipterocarp species. There is also no incidence of encroachment into the buffer zone for all the active logging areas visited Safety gear and operational equipments are not in good working condition. Inadequate safety helmets and missing of chainsaws safety guard as observed in the operation area license number JT 02/2011 in Yong Forest Reserve. Minor CAR 013 closed Verification conducted in several logging camps in particular in Compt. 3B of Lepar FR, Compt 25A of Chini FR and Compt 213B of Ulu Jelai FR confirmed that all workers operating chainsaw are now given adequate and proper safety helmets complete with earmuffs and safety goggles. It is also verified that the chainsaws used are now equipped with safety guard Improper demarcation of hazardous areas and provision of guidelines for storage and handling of hazardous materials Incomprehensive evaluation (consultation) of social impact of forest operations directly affecting communities, and the people and groups directly affected by the forest operations Lack of provisions to maintain, restore or enhance the productive capacity and ecological integrity to ensure its economic viability. Chemical and flammable substance is not segregated, no label at shelve, MSDS not available and no designated area for chemical mixing in the chemical store at Terenggun Nursery. Local communities of Kampung Gemunchur which are affected by the access road to Hutan Simpan Yong claimed that they have not been consulted on forest operations. Local communities are unaware of the grievance mechanism procedures with respect to forest operations which affect local communities. Rancangan Tebangan Tahunan for 2011 is not available at the Jerantut District Forest Office. Evidence submitted following the audit: The FMU has made available the Annual Harvesting Plan (AHP) for both Lipis and Jerantut Forest Districts. Though the documents are signed and approved by the DFO, the audit team Minor CAR 014 closed It is verified that hazardous materials placed in the store rooms at the nurseries (Kamunting and Lentang) are now segregated from other chemicals with proper labelling and MSDS sheets available. Minor CAR 015 closed Recertification Audit confirmed that social impact evaluations are conducted prior, during and after harvesting operation, focusing on local or Orang Asli communities living at the areas surrounding the PRFs. The usage of the Form E related to social impact evaluation is found to be consistently applied throughout the FMU. Interviews with local communities affected by logging operations in the sampled districts revealed that they have been consulted prior, during and after logging operations. Minor CAR 016 closed Minor CAR 017 reclassified as Minor CAR 03

6 AD 32-A-01 Page 6 of 16 noted that the documents submitted are not dated. The audit team decided to maintain the minor CAR in order to assess the implementation of the AHP during the next Surveillance Audit. Minor CAR-17 is reclassified as Minor CAR Management guidelines, where appropriate, to maintain and/or enhance the value of forest services and resources is not properly implemented Containers, liquid and solid non-organic wastes including fuel and oil are not disposed of in an environmentally appropriate and legal manner Inadequate training for forest workers on the implementation of the forest management plan. It is observed at the roadside adjacent to forest operation licence number JT 016/2011 Yong Forest Reserve that the watercourses are blocked with soil and forest debris which resulted in significant water-ponding. Evidence of plastics and domestic waste burnt at the logging camp and scheduled waste is not properly disposed and left at the logging camp in JT016/2011 Yong Forest Reserve. Evidence of open burning at Terenggun Nursery showing lack of understanding on the restriction on open burning. Inadequate disposal of solid waste at Terenggun Nursery. Based on the observations made at the forest operation areas, there is a need for safety and operational training for forest workers (contractor level) especially bulldozer operators and chainsaw operator, with particular emphasis on directional felling, safety and cutting techniques. The following observations are made during the audit: i. Occurrence of vertical slope observed along feeder road; ii. iii. Cutting techniques for chainsaw operator is not properly executed causing damage to felled trees; Evidence of accidents involving forest workers at operational areas; Visits to the active logging areas in Tekai Tembeling, Ulu Jelai, Lepar, Lakum and Chini FRs verified that there is no incidence of water ponding in these harvesting sites. Minor CAR 018 closed Visits to the logging camps during the Recertification Audit confirmed that used engine oil are now either being re-use for the chain saw or collected and taken out for disposal. The audit team also observed that the waste oils are stored properly and placed at a designated location away from streams and water ways. There is also no incidence of open burning being carried out. Minor CAR 019 closed Several trainings with regard to the implementation and operation of the standard requirement and RIL as well as the Directional Felling Training including safety and health are conducted for forest rangers, foresters and forest workers employed by logging contractors as follows: Date Oct 2011 Training Details Training on Directional Felling of Tree Training also covers the requirement for safety and health No. of Participants 36

7 AD 32-A-01 Page 7 of 16 iv. Key personnel responsible for implementation of MC&I not adequately trained; and v. Existing training is too general and not designed to meet specific needs at the FMU level, e.g. health and safety, MC&I requirements Oct 2011 during the felling operations as well as procedures and techniques for chainsaw maintenance. Training on Health and Safety for Forest Workers Dec 2011 Training on Health and Safety for Forest Workers March 2012 Training on the Implementation of Forest Road Guidelines (Series No. 1) April 2012 Training on the Implementation of Forest Road Guidelines (Series No. 2) June 2012 Training on Compliance to the MC&I(Natural Forest) Requirement Sept 2012 Training on Directional Felling of Tree 16 Training also covers the requirement of the safety and health during the felling operations as well as procedures and techniques for chainsaw maintenance Forest products leaving forest area is not properly identified with relevant documentation to ensure the determination of the Evidence of log-tags missing observed in main logyard in license JT 02/2011, Yong Forest Reserve where 27 logs are observed to be without tags (out of113 logs inspected). Minor CAR 020 closed Verification conducted during the Recertification Audit at the log yards of the active logging areas i.e. Compt. 3B of Lepar FR, Compt 25A of Chini FR and Compt 213B of Ulu Jelai FR confirmed that all logs inspected carried log tags issued by the Forestry Department.

8 AD 32-A-01 Page 8 of 16 origin of the forest products A summary of the results of monitoring indicators, including those listed in Criterion 8.2 are not publicly available HCVF attributes are not included in the forest management plan summary made available to the public. Public summary of monitoring is not available in the forestry department s website. Measures to demarcate, maintain and/or enhance the HCVF attributes are not available under the forest management plan public summary. Minor CAR 021 closed Public summary of monitoring indicators is now available on the Pahang Forestry Department s (FD s) website ( Minor CAR 022 closed Measures to demarcate, maintain and/or enhance the HCVF attributes are now incorporated in the public summary of the FMP and is made available to the public through Pahang FD s website ( Minor CAR 023 closed Summary of new CARs raised during Recertification Audit [MC&I(Natural Forest)] CAR No. Indicator Non-conformance Forest managers do not provide social programmes for local communities. Objective Evidence/Close-out Evidence Documentary evidence at the sampled forest districts and interviews with the local communities revealed a lack of social programmes conducted by the forestry department for the local communities. Status The FMU subsequently submitted several evidences in the form of brief reports on social programmes that have been conducted as follows: Masyarakat Pribumi Di Hati Programme on 2-4 December 2011 in Lubok Wong Orang Asli Village, Pian, Lembah Krau, Temerloh, Pahang; Community Replanting Programme in Compartment 18, Tranum FR on 14 December 2011; Earth Green Programme on 25 February 2012 in Sekolah Menengah Kebangasaan Indera Mahkota Dua, Kuantan, Pahang; Tree Planting Programme in Chini Lake on 02 March 2012; and Community Replanting Programme in Compartment 9, Tranum FR on 16 July Herbal Plant Planting Programme on 29 September 2012 in

9 AD 32-A-01 Page 9 of The Health and Safety Officer at the State Forestry Department is not trained as per OSHA OSHA (1994) (Section 29) requires the Safety Officer to have completed a training course in occupational safety and health and passed the minimum examination conducted by NIOSH based on (Occupational Safety and Health)- Safety and Health Officer (Regulations 1997). The FD has submitted the close-out evidence in the form of Official Letter to NIOSH [Ref. No. PHN.PHG.400-6/1 (82) on 25 October 2012 to register the nominated SHO for the training scheduled to be conducted on 7 to 20 February As there is no evidence that the SHO has undergone the training, the audit team is of the Sekolah Menengah Kebangsaan Sultan Abu Bakar, Kuantan, PahangThe FMU has submitted the several evidences in the form of brief report of social programmes that has been conducted as follows: Masyarakat Pribumi Di Hati Programme on 2-4 December 2011 in Lubok Wong Orang Asli Village, Pian, Lembah Krau, Temerloh, Pahang; Community Replanting Programme in Compartment 18, Tranum FR on 14 December 2011; Earth Green Programme on 25 February 2012 in Sekolah Menengah Kebangasaan Indera Mahkota Dua, Kuantan, Pahang; Tree Planting Programme in Chini Lake on 02 March 2012; Community Replanting Programme in Compartment 9, Tranum FR on 16 July 2012; and Herbal Plant, Planting Programme on 29 September 2012 in Sekolah Menengah Kebangsaan Sultan Abu Bakar, Kuantan, Pahang. Minor CAR 01 raised closed on 01 February 2013 New Minor CAR raised

10 AD 32-A-01 Page 10 of Inadequate dissemination of up-to-date information on all applicable laws and/or regulations covering occupational safety and health of forest workers view that the Minor CAR issued be maintained pending verification of the training conducted during the next surveillance audit. Not in compliance with the Guidelines on Occupational Safety and Health in Logging Operations Lack of risk assessment for forest operation activities including activities in recreational area. No emergency procedure established at logging camp. Number of workers employed does not match the Sub-license for contractors worker Machineries registration is incomplete especially for chainsaw, san tai wong and 4- wheel drive No certificate to indicate the chainsaw operator has been trained. Specifications for logging camps not in accordance with guidelines such as Kitchen drainage should be covered for at least 15 meters. Genset must be located at least 100m from the nearest river. Storage condition for flammable material requires improvement. Inadequate signages according to OSHA requirement. The FD has issued an official letter to all its DFOs indicating the requirement to comply with the occupational safety and health prescribed in Guidelines for Occupational Safety and Health in Logging Operations. In addition the FD also issued to all its DFOs on the requirement to maintain the machineries maintenance record in New Minor CAR raised

11 AD 32-A-01 Page 11 of Up-to-date information on all applicable laws and/or regulations covering occupational safety and health of forest workers is not disseminated to them. the logging camp. The copy of the two letters [Ref. No.: PHN. PHG. (PEM) 118/107 BHG 17 (31)] and [Ref. No.: PHN. PHG. (PEM) 118/107 BHG 17 (30)] respectively dated 23 October 2012 are submitted to SGS as a close-out evidence. No further evidence submitted by the FD to address the Observation raised. Based on the above, the audit team is of the view that the FD has not fully address the Observation raised against the new Standard. In addition, the audit team noted that several elements of the non-compliance are related to implementation and therefore need to be verified on the ground. Based on the above consideration, the audit team agreed to reclassify the Observation raised against the new Standard as a Minor CAR. Machineries maintenance records are not available at the logging camp. Lack of safe operational procedures for machineries at logging camp in licensed areas visited. No evidence submitted for the above noncompliance except the two letters issued by the State HQ to the DFOs pertaining to the requirement to comply with the occupational safety and health prescribed in Guidelines for Occupational Safety and Health in Logging Operations - [Ref. No.: PHN. PHG. (PEM) 118/107 BHG 17 (31)] dated 23 October 2012 as well as the letter relating to the requirement to maintain the machineries maintenance record in the logging camp - [Ref. No.: PHN. PHG. (PEM) 118/107 BHG 17 (30)] dated 23 October The audit team is of the view that the above evidences submitted are not sufficient to close the Observation raised in view that field evidence is needed to verify the adequacy of action taken New Minor CAR raised

12 AD 32-A-01 Page 12 of 16 by the FD The right of workers to benefits and protection is not assured under applicable laws and/or regulations. The observation is reclassified as a Minor CAR. There is no formal letter stipulating the rights and benefits of the forest workers issued by the forest contractor. No evidence and action plan submitted to SGS pertaining to the above non-compliance. The Observation is reclassified as Minor CAR. New Minor CAR raised Summary of Observations Raised [MC&I(Natural Forest)] CAR No. Indicator Observation Status Site visit to HS Chini Tambahan (Compartment 16) reveals that approximately 6 ha. of forest reserve is being encroached by eight households of Orang Asli (named as Kampung Penchorong) who have formed a settlement within the forest reserve. The above observation is originally raised as a Minor CAR during the Re-certification audit. Following the audit, the Pahang FMU has submitted written evidence in the form of communication records and chronology of events following the identification of encroachment by the Orang Asli into the Chini Tambahan FR as follows: Letter from SUHAKAM to State Forestry Department HQ [Ref. No.: SHM.014/14/2C Jld X (92)] dated 05 April 2012 stating the invitation by the SUHAKAM to be the witness for public hearing of national enquiry of Suhakam New Observation raised

13 AD 32-A-01 Page 13 of 16 pertaining to land use right of Orang Asli. SUHAKAM has also forwarded a letter to the FD [Ref. No.: SHM.014/14/2C Jld IX (6)] on 10 July 2012 requesting the FD to supply to them the SIA form that is being used to assess social impact on harvesting operations. The FD, through the DFO of Temerloh has responded by submitting the SIA form to SUHAKAM through a letter dated 30 July 2012; Letter from the FD [Ref No.: PHN. PHG /0/3225 (T)] dated 20 March 2012 indicating the approval of the license area amounting to 82.90ha of part of Compartment 16 of Chini Tambahan FR confirming that the company has legal right over the licensed area; Letter from the Forest Ranger to the District Forest Officer of Temerloh/Bera Forestry District [PKHDB.TEM.1/97 J.2(8)] dated 30 July 2012 summarizing the report following the encroachment by the Orang Asli into the licensed area; Letter from DFO to Forest Ranger of Temerloh/Bera Forestry District [PHD.TEM /0/367 (B) SJ.IV (16)] dated 01 August 2012 requesting the Ranger to continue monitor and patrol the area to avoid further encroachment; Letter from DFO to State Forestry Department HQ [PHD.TEM. 21/0/367 (B) SJ.IV (17)] dated 27 September 2012 providing a report on the above-mentioned encroachment of the said area; Based on the above evidence, the audit team noted the effort by the FD to resolve the issue and agreed to down grade the Minor CAR to an Observation. However, action will be taken to assess how this issue is resolved by the FD at the next surveillance visit Logs of tagged trees in H.S. Som are not extracted resulting in wastage and revenue loss. The Forestry Department has submitted a copy of the letter issued by the State Forestry Department HQ to the DFO [Ref. No.: PHN. PHG /0/3226 (T)] dated 22 June 2012 granting the approval for the extraction of harvesting residues and small size logs. The letter also states that the FD will issue special log tags for this purpose. Documentation wise, the FD has taken the necessary action to address the Observation raised. However, the audit team is of the view that the Observation should be maintained for verification at the next surveillance audit Consultation with the Department of Wildlife and National Parks (PERHILITAN) revealed that there is insufficient information sharing between the Forestry Department and PERHILITAN, especially with regard to current and future logging operations that may have an impact on the presence and movement of certain wildlife New Observation raised New Observation raised

14 AD 32-A-01 Page 14 of 16 species in the said sites. PERHILITAN received numerous complaints from villagers and plantation owners regarding human-wildlife conflicts. (e.g. 119 complaints received in 2012 related to Elephant; 15 received on tiger). The Pahang State Forestry Department submitted two letters as an indication of the communication and exchange with PERHILITAN as follows: A letter [Ref. No.: JPHL&TN (Phg): 50-2/3 (1)] dated 21 May 2012 issued by PERHILITAN to the State HQ requesting approval for establishing a base camp in Lakum FR to facilitate the wildlife transportation programme from the forest reserve to Kerau Wildlife Reserve; and A letter [Ref. No.: PHN. PHG (PEM) 118/146 BHG. 4 (20) dated 28 May 2012 sent to the PERHILITAN indicating the approval of the application submitted by the PERHILITAN in the earlier letter. As only one evidence is submitted the audit team agreed to maintain the observation raised It is observed that the Post-F Inventories are not conducted as scheduled according to the SMS requirement i.e. 2-5 years after logging New Observation raised Several documents are submitted as follows: Minutes of Meeting on Forest Development for State Forestry Department Bil. 2/2012 dated 27 July 2012; Expenditure of Forest Development Fund Report 2012; and Summary of Forest Development Budget The audit team noted that all evidences submitted are on the financial aspect and did not indicate the total area that is inventoried in 2012, even though the budget is meant for Post-F Inventory. The audit team maintained the Observation to be verified during the Surveillance Audit in The Pahang State Forestry Department has only identified one HCVF area (Lata Jarum) since 1995 The previous surveillance audit (2011) indicated two more proposed HCVFs in the Pahang FMU but these proposed areas have yet to be designated as HCVF: Kerangas Forest at Padang Tujuh at the Endau-Rompin State Park/Enday Forest Reserve; New Observation raised

15 AD 32-A-01 Page 15 of 16 Bukit Bangkong in Compartment 41, Pekan Forest Reserve, 6.8 ha. Moreover, the FMP (2006) also highlighted several potential HCVF areas which have not been considered in the HCVF planning process. The Pahang State Forestry Department has submitted a copy of the relevant section pertaining to the HCVFs of the Mid-term review of the FMP specifying the planning, monitoring and management of the identified HCVFs. However, the list of the potential HCVFs is not included in the Mid-term review of the FMP. Based on the above consideration, the audit team agreed to maintain the Observation to be verified during the Surveillance Audit The list of stakeholders who have been consulted regarding the HCVFs does not encompass all the relevant stakeholders. No non-governmental organisations or local communities are consulted for the proposed new HCVFs in Bukit Bangkong and Padang Tujuh. Note that Bukit Bangkong is within the Orang Asli Jakun area in the South-East Pahang Peat Swamp Forest. Neither the Orang Asli nor the Department of Orang Asli Development (JAKOA) are consulted in the identification of Bukit Bangkong as an HCVF. New Observation raised The Pahang State Forestry Department has submitted the evidence comprising the chronology of events that took place since the initiation process to classify both sites as HCVFs including the letters to consult and seek advice from MNS as well as WWF Malaysia. Copies of the letters [Ref. No.: JPNP.PEM. (PR).06/052 (20)] and [Ref. No.: JPNP.PEM. (PR).06/052 (21)] dated 22 October 2012 are made available to the audit team as close-out evidence. However, the consultation conducted is not comprehensive enough, thence the Observation is maintained The Mid-Term Review of the Forest Management Plan of Pahang FMU (dated June 2012) does not incorporate the results and findings of the monitoring of the Rafflesia at Lata Jarum into the implementation and revision of the forest management plan. Pahang State Forestry Department has submitted a copy of the relevant section pertaining to the HCVFs of the Mid-term review of the FMP specifying the planning, monitoring and management of the Rafflesia at Lata Jarum. Observation 07 raised closed on 01 February 2013.

16 Malaysian Timber Certification Scheme : MC&I(Natural Forest) (Associated Documents) Doc. Number: AD Version Date: 01 February 2013 Page: 16 of 16 Annex 2 Forest Reserves in Pahang FMU SGS (Malaysia) Sdn. Bhd., Unit 10-1, 10 th Floor Bangunan Malaysia Re,No.17 Lorong Dungun, Damansara Heights, Kuala Lumpur, Malaysia CONTACT PERSON: ABDUL HAYE S - Tel: +6 (03) Fax: +6 (03)