Rountable on Sustainable Palm Oil

Transcription

1 Rountable on Sustainable Palm Oil Annual Surveillance II 16 May 20 May 2016 Assessment Report PT. Kresna Duta Agroindo Jelatang Mill, Jambi, Indonesia This annual surveillance assessment report 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: Nuzwardy Sjahwil (Lead Assessor) Certification decision made by: Triyan Aidilfitri PT. SUCOFINDO (Sucofindo International Certification Services SICS) Graha Sucofindo B1 Floor, Jl. Raya Pasar Minggu Kav. 34, Jakarta Indonesia Contact Person : Tuti Suryani Sirait Phone : (62-21) : Fax : (62-21) tuti@sucofindo.co.id 1 of 122

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 Mill )... 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. Other Certification Held... 8 A.6. Organizational Information and Contact Person... 8 A.6.1 Audit Against the Rules for Partial Certification... 8 A.7. Date Certificate Issued and Scope of Certificate B. Assessment Process B.1. Certification Body B.2. Qualifications of the Assessment Team B.2.1. Qualifications of the Lead Assessor and Assessment Team B.3. Assessment Methodology B.3.1. General Overview of 122

3 B.4. Stakeholder Consultation B.4.1. Summary of How Stakeholder Consultation was Organized B.5. Date of Next Surveillance Visit C. Assessment Findings C.1. Lead Assessor s Summary and Recommendation for Certification C.2. Summary of the Findings by Criteria C.3. Non Conformity Register D. Certified Organization s Acknowledgement of Internal Responsibility D.1. D.2. Formal Sign-Off the Assessment Findings Statement by the Certifier Body on Behalf of PT. Sucofindo SBU-SICS 113 Appendix 1 - List of Abbreviation..114 Appendix 2 MAP of 122

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 RSPO Principle and Criteria 2013 Generic and RSPO Certification Systems and RSPO Suply Chain Certification Systems A.2 Assessment Type (Estate and Mill) Certification Unit : PT. Kresna Duta Agroindo Jelatang Mill located at Desa Jelatang, Kecamatan Pamenang, Kabupaten Merangin Jambi, INDONESIA. A.3 Location map Please see Appendix-2 Map: 1. Map of Location, 2. Land area, 3. Topography and 4. HCV areas. Sumatera Island - Indonesia 4 of 122

5 A Location address of the mill and approximate tonnages certified (CPO and PK) 1 Name of Mill Jelatang Mill - PT. Kresna Duta Agroindo 2 Location address Desa Jelatang, Kecamatan Pamenang, Kabupaten Merangin, Provinsi Jambi, Indonesia 3 GPS Reference Lattitude (S) : 02 o Longitude (E) : 102 o Mill Capacity 30 Ton/Hour 5 Actual Production (from January December 2015) (Own estate only) 6 Certified tonnage claimed (Mill capacity 30 tonnes per hour) CPO : 1, MT PK : MT FFB : 5, MT CPO : 1, MT PK : MT FFB : 6, MT 7 Certified area Ha 8 Planted area Ha 9 Certified Tonnages Sold CPO : 0 MT ; PK : 0 MT 10 Certified tonnages purchased CPO : 0 MT ; PK : 0 MT 5 of 122

6 Note : A.4. Description of Supply Base A General description PT. Kresna Duta Agroindo operates 3 palm oil mills under PT. Kresna Duta Agroindo, named PT. Kresna Duta Agroindo - Jelatang Mill (JLTM), PT. Kresna Duta Agroindo Langling Mill (LNGM) and PT. Kresna Duta Pelakar Mill (PLKM) This report scope is only for PT Kresna Duta Agroindo - Jelatang Mill and its supply bases. (Bangko Estate only). The raw material/ FFB for PT. Kresna Duta Agroindo - Jelatang Mill is supplied from the own estate, scheme smallholders, independent smallholders and outgrowers : 1. Own estate : Bangko Estate (Division 4) 2. Scheme smallholders : 1. Batang Gading KKPA, 2. Tiga Serumpun KKPA 3. Independent smallholders : 1. Pamenang Plasma; 2. Kubang Ujo Plasma, 3. Bangko Plasma; 4. Kubang Ujo Plasma 4. Outgrowers Totally supplied FFB from own estate, scheme small holders, independent smallholders and outgrowers to the mill from January December 2015 were 107, MT All supply bases are located in Jambi, Indonesia. PT. Kresna Duta Agroindo is a subsidiary of PT SMART Tbk which is a member of RSPO and they are maintaining RSPO Certified Palm Oil for all its production. A Location of the supply base No. Estate Name Location 1 Bangko Estate Desa Langling, Kecamatan Bangko, Kabupaten Merangin, Provinsi Jambi, Indonesia Latitude (S) A Statistic of supply base (Data from Januari 2015 December 2015) A. Own Estate GPS Longitude (E) 02 o o No. Estate Name Planting Year Area/ Planting Year FFB/Year (tonnes) CPO/Year (tonnes) PK/Year (tonnes) 1 Bangko Estate Divisi , , Total , , of 122

7 B. Smallholder Full Manage No. Estate Name Planting Year Area/ Planting Year FFB/Year (tonnes) CPO/Year (tonnes) PK/Year (tonnes) 1 Batang Gading KKPA 2 Tiga Serumpun KKPA , , , , , , Total 3, , , ,58 C. Independent Small holder No. Estate Name Planting Year Area/ Planting Year FFB/Year (tonnes) CPO/Year (tonnes) PK/Year (tonnes) 1. Bangko Plasma , , Pamenang Plasma 3. Bukit bungkul 4. Kubang Ujo Plasma , , , , , , , , , , Total 18, , , , D. Outgrowers NO Estate Name FFB/Year (tonnes) CPO/Year (tonnes) PK/Year (tonnes) 1. Outgrower 3, TOTAL 107, , , of 122

8 Projected 2016 Supply Bases Hectare FFB (tonnes) CPO (Tonnes) PK (tonnes) Own Supply base , , Small holders Full Manage 2, , ,573,62 2, Independent Small Holder 413, , , Out grower Total 471, , , A.5. Other Certifications Held SMK3 (Indonesian Occupational Heath and Safety Management System) PP , ISPO (Indonesian Sustainable Palm Oil) certified A. 6. Organizational Information and Contact Person 1. Company Name PT. KRESNA DUTA AGROINDO 2. Personal Contact Ismu Zulfikar 3. Management Representative Suwarno Akhsan 4. Company Address Sinar Mas Land Plaza, Tower II, 30th Floor Jl. MH. Thamrin No. 51, Jakarta, Indonesia 5. Company Status PMDN 6. Phone/ Fax Fax : ismu.zulfikar@sinarmas-agri.com 8. Website 9. RSPO membership number A.6.1 Audit Against the Rules for Partial Certification 8 of 122

9 1. Assessment agenda Date Location Agenda 16 May 2016 PT. Kresna Duta Agroindo Jelatang Estate During ASA II to verify legal documents, HCV, Labor Union and land conflict within the GAR group 2. 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 the RSPO with no b. Time Bound Plan for achieving certification within relevant entities ~ : No Name Mill of 1 Padang Halaban Mill 2 Batu Ampar Mill 3 Tanah Laut Mill 4 Langga Payung Mill Supply Base Company Location Padang Halaban Estate Pernantian Estate Adipati Estate Kanopan Ulu Estate Batu Ampar Estate Batu Mulia Estate Sungai Panci Estate Sungai Panci KKPA Tanah Laut Estate Kintapura Estate Langga Payung Estate Paya Baung Estate Normak Estate PT. SMART TBK PT. SMART TBK PT. SMART TBK PT. Tapian Nadenggan North Sumatera South Kalimantan South Kalimantan North Sumatera Estimate time of Certification Certified Certified Certified Certified 5 Hanau Mill Hanau Estate Tasik Mas Estate Tanjung Paring Estate PT. Tapian Nadenggan Central Kalimantan Certified 9 of 122

10 Langadang Estate 6 Leidong West Mill Medang Sari Estate Leidong West Utara Estate Leidong West Selatan Estate Bukit Intan Estate Bukit Mas Estate 7 Semilar Mill Semilar Estate Sei Rindu Estate Mandang Estate Puri Estate 8 Jak Luay Mill 9 Gunung Kombeng Mill/Muara Wahau Mill 10 Jelatang Mill 11 Pelakar Mill Pantun Mas Estate Pantun Mas KKPA Jak Luay Estate Jak Luay KKP Long Buluh Estate Bukit Subur Estate Bukit Subur KKPA Gunung Kombeng Estate Gunung Kombeng KKPA Muara Wahau Estate Rantau Panjang Estate Rantau Panjang KKPA Bangko Inti Estate Tiga Serumpun KKPA Pamenang Plasma Bukit Bungkul KKPA Pelakar Estate Tiga Serumpun KKPA Batang Merangin Estate Batang Tembesi Estate Kubang Ujo Plasma 12 Langling Mill Bangko Inti Estate Bangko Plasma Bukit Bungkul KKPA Pamenang Plasma PT. Satya Kisma Usaha PT. Leidong West Indonesia PT. Tapian Nadenggan PT. Tapian Nadenggan PT. Kresna Duta Agroindo PT. Kresna Duta Agroindo PT. Kresna Duta Agroindo PT. Kresna Duta Agroindo 2015 Bangka 2018 Central Kalimantan East Kalimantan East Kalimantan Jambi Certified Certified Certified Certified Jambi Jambi Certified of 122

11 Batang Gading Estate Batang Gading KKPA PT. Satya Kisma Usaha Sungai Bengkal Mill Sungai Bengkal Estate Sungai Bengkal KKPA Kilis Estate Kilis KKPA PT. Satya Kisma Usaha Jambi Certified 14 Bukit Kapur Mill Sungai Cantung Estate Bukit Kapur Estae PT. SMART TBK South Kalimantan 2015 RSPO Certification System Ascertainment of partial compliance with this certification, performed by the company in the annual internal audit on February 2 to 6, The Company has full Smallholder Manage / one management, namely Batang Gading KKPA, and Tiga Serumpun and independent plasma consisting of Bangko plasma : 4812 hectares, plasma Pamenang: 6290 Ha, Bukit bungkul: 4676 Ha, Kubang Ujo Plasma: 2960 Ha. All of the cooperative with the independent and full manage status gave the statement letters in January 2015 refused to RSPO certified. The Company established timebound date January 31, The smallholders RSPO certification that includes Kubang Ujo Smallholder, Pamenang SH, Bangko SH, Bukit Bungkul KKPA, Batang Gading KKPA, and Tiga Serumpun estate is planned in This is not in accordance with the RSPO standards with states that smallholdings must be certified within 3 years (starting from the own estate certification) Time Bound In 2015, the plasma refused to be certified, so that the time bound of plasma certification is re-scheduled. Status : Major NCR No. 13 a. Significant Conflicts The company has the SOP for Conflict Land Resolution refers to RSPO criteria 6.4, 7.5 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. 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 Assessment (HHA) Report, GAR has been proposed HCV Remediation Plan to RSPO. The management has submitted to RSPO Compensation team on Friday 11 of 122

12 8/29/2014 regarding the Liability Data on Land Cleared without HCV assessment and Zero Liability on GAR/SMART/IMT concessions as requested by the BHCV WG/CTF. The management stated that they are using the Zero Liability template developed by RSPO for GAR. c. No labor disputes that are not being resolved through an agreed The company has the SOP and mechanism to resolve dispute with union labor with mutually agreement. 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.7. Date Certificate Issued and Scope of Certificate Name of Client PT KRESNA DUTA AGROINDO Client Number RSPO Certificate Number RSPO Certification Decision Date August, 18 th 2014 Issued by Address PT SUCOFINDO, SBU SICS Graha Sucofindo, SBU SICS. Jl Raya Pasar Minggu Kav 34 Jakarta Telephone /Fax Tel.: / Fax.: Website tuti@sucofindo.co.id Scope : Mill Estate Jelatang Mill Bangko Estate Projected mass balance CPO & PK CPO : 1, MT PK : of 122

13 Certification Registration Code RSPO Type of Certification Certifier Single site Triyan Aidilfitri Signed B. Assessment Process B. 1. Certification Body SUCOFINDO SUCOFINDO ICS INTERNATIONAL CERTIFICATION SERVICES (SUCOFINDO ICS), which was established 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 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 13 of 122

14 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 Nuzwardy Sjahwil (Lead 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 Lead Auditor RSPO by Proforest, Lead Auditor Training by Komisi ISPO, Jakarta, and Supply Chain Training.RSPO GHG, RSPO Supply Chain Certification System. Ronald E Butar-Butar (Auditor) S1 graduated from Catholic University Faculty of Agriculture. Work Experience (Best Practice Estates) in oil palm estates for 6 years. He has successfully completion Lead Auditor Training ISPO by Komisi ISPO, Lead Auditor ISO 9001:2008, and Lead Auditor ISO 14001:2004. He has completion In House Training RSPO for 4 days. Amelia Rizky R (Auditor): She graduated from Airlangga University, Surabaya. She has successfully completion Lead Auditor Training ISPO by Komisi ISPO, Jakarta, Awareness Hazard Analysis Critical Control Point (HACCP) by PT. Sucofindo, Lead Auditor IRCA Training of ISO 9001:2008 by PT. Sucofindo, and Lead Auditor Training IRCA ISO 14001: 2004 by PT. Sucofindo. Sarsongko Wachyutomo (Auditor) Graduated from Gadjah Mada University, Yogyakarta. He has successfully completion Lead Auditor Training ISPO by Komisi ISPO, Jakarta, High Conservation Value (HCV) by HCV-NI and Auditor Training VLK by Pusdiklat Kehutanan, Bogor. M. Arief Sastrawan (Auditor) Graduated from Sriwijaya University, Palembang. He has successfully completion Lead Auditor Training ISPO by Komisi ISPO, Jakarta, Lead Auditor ISO 14001:2004, Lead Auditor ISO 9001:2008, and General AK3. 14 of 122

15 B.3. Assessment Methodology B General Overview The assessment was carryingout 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 certification standard. Partial certification audit conducted during ASA II to check compliance with Final RSPO Certification System for partial certification. The opening and closing meeting was conducted at the office of Bangko Estate and then continue in Mill s and estate s offices. Stakeholders meeting was conducted once, during ASA II Date/Time Functions / areas / Department / activities to be audited (include related requirements) Auditor(s) 16 May 2016 Day 1 st (Monday) 06: Trip form Jakarta to Jambi Team 07:30-14:00 Trip from Jambi to sites Team Opening Meeting All Visit JLTM NS Check completeness of previous NCR minor in SCCS SCCS at JLTM Document audit Partial Certification Legality regarding land (2.2.1, 2.2.2) & regarding land title Environmental impact assessment (5.1) and regardig EIA NKT/HCV (5.2) and regarding HCV Safety in pesticide ( ) AMR RB AMR SSW MAS 17 May 2016 Day 2 st (Tuesday) Document audit Land dispute and conflict (2.2.3, 2.2.4, 2.2.5, 2.2.6) Compensation to legal and customary right (6.4) FPIC (2.3) NS 15 of 122

16 NPP (7) Worker welfare NS Check completeness of previous NCR minor and observation Worker welfare (6.5) NS Pesticide ( ) Anti discrimination (6.8) MAS Child labour (6.7) Complaint handling 6.3 Best practice at estate (4.1) RB Erosion control and peat (4.3) Break Pest management (4.5) NKT/HCV (5.2) and regarding HCV Protection of water courses and wetlands (4.4.2) Water ( ) POME for land application (4.4.3) Waste management (5.3) Business plan (3.1) Social responsibility ( ) Development of local businesses (6.11) Occupational health and safety and legal requirement regarding heath and safety ( 4.7) GHG mitigation (5.6) Schemed Smallholder (6.1.5) FFB reception from small holder and local business (6.10) Practices maintain soil fertility (4.2) Water management at estate (4.4.1) SSW AMR AMR AMR RB NS NS MAS AMR RB RB End of audit day 2 18 May 2016 Day 3 rd (Wednesday]) 16 of 122

17 07:30 Visit estate Visit to harvesting, spraying and manuring Visit to HCV location Visit to housing facility, warehouses, bathing facility, day care Visit to BPN Pole Visit to land application NS/RB/MAS SSW AMR RB/NS AMR 09:30 Visit mill JLTM AMR POME (4.4.3) AMR 12: Break 14:00 Visit Mill Langling SCCS RSPO NS FFB reception from small holder and local business (6.10) Occupational health and safety and legal requirement regarding heath and safety ( 4.7) Renewable energy (5.4) NS NS AMR Water management at mill (4.4.1) Water efficiency at mill (4.4.4) Visit mill JLTM Best practice mill (4.1) AMR MAS FFB reception from small holder and local business (6.10) Occupational health and safety and legal requirement regarding heath and safety ( 4.7) Renewable energy (5.4) RB MAS AMR Water management at mill (4.4.1) Water efficiency at mill (4.4.4) AMR 19 May 2016 Day 4 th (Thursday) 08:00 Stake holder consultation NS Trade Union (6.6) RB 17 of 122

18 Continous improvement (8.1) RB Use of fire for preparing land or replanting (5.5) RB Training 4.8 Sexual harassment (6.9) AMR 10:00 Compliance to regulation (2.1) AMR 12: :00 16:00 18:00 20 May :00 13: Information provision (1.1, 1.2) Consultation and communication 6.2, Break Ethical conduct (1.3) Forced labour (6.12) Human right (6.13) Closing meeting End of audit Day 6 Trip to Jambi Trip to Jakarta NS NS Scope : 2 mills and 2 estates Number of assessor participating: 5 auditors Number of days spent for the assessment on site : 4 days Total number of mandays used for the assessment on site : 20 days B. 4. Stakeholder Consultation B Summary of How Stakeholder Consultation was Organized Stakeholders Consultation and Company Responses Issue Company Responses Assessor Findings Suherman - Secretary of the Board of Investment and Integrated Licensing Services (BPMPPT) District. Merangin. The audit team published the non conformity that the Company has not had a permit to utilize Mampun river water in accordance with the terms of Permen PU No. 37 in The Company has applied for a permit to the board of investment and integrated licensing Services Distric Observation, Status permits will be ensured in the next Surveillance. 18 of 122

19 Based on information from the Company, it has coordinated with the departments of Public Works that as long as there is no local regulations concerning surface water permit so the Company did not require the permits.. However based on the information supplied by Mr Suherman (Secretary of BPMPPT), although there are no local regulations, the Company remains obligated to take care of surface water uptake permit with reference to PP PU Merangin at June 28, Chairman of Union : Union already conducted a routine meeting on March 28, 2016 while the agenda discussed was the issue of workers, which was attended by members of the union as much as 34 Members. Conform B. 5. Date of Nexts Surveillance Visit One (1) year after date of 2016 surveillance audit C. Assessment Findings 1) Lead Assessor s Summary and Recommendation for Certification The Surveillance audit has been carried out through field visit to mill and estate using RSPO principle and criteria 2013 and RSPO Supply Chain Certification Standard 2014 Audit Team has published the nonconformities, comprising 7 majors, 2 minors and 10 observations. The company has made the corrective actions to the respectives nonconformities graded as majors, minors and observations. All of the major 19 of 122

20 findings have been closed or downgraded to observation. The final conclusion regarding all of the nonconformities are 1 minor, and 11 observations.the team will see the evidence of implementation on the next surveillance audit. Since there are no major non conformities unsettled, the audit team found that PT. Kresna Duta Agroindo Jelatang Mill and its estates is still complying against RSPO P&C 2013 and RSPO SCCS Therefore, certification can be continued to PT. KDA Jelatang Mill (Mill and supply bases). 04 Oktober 2016 Nuzwardy Sjahwil C.2 Summary of the Findings by Criteria 1 COMMITMENT TO TRANSPARENCY 1.1 Oil palm 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 Evidence should be provided that information is received in appropriate form(s) and language(s) by relevant stakeholders. Information will include information Minor on the RSPO mechanisms for stakeholder involvement, including information on their rights and responsibilities. The Company has the SOP Communication and Consultation (SOP / SMART / UMUM / SADV / I / 004). SOP explained the hierarchy of responsibility in providing response to the relevant parties. Each incoming aspirations is recorded in the form F/ SMART / UMUM / SADV / 004/001. The procedure described responses given by the company no later than 4 (four) weeks. Estate Manager is responsible for providing information to the stakeholders especially relating to social aspects. Estate Manager update stakeholder every year or if there is a change. The company has a list stake holders in of 122

21 Request of information was recorded on the books of communication and consultation. Request of information recorded on form information requests and responses. Information given by company included information given in the survey of domestic product from the Statistics Centre of Merangin district on October 15, 2015, implementation of BPJS and pension programs. Conclusion : conform Records of requests for information and responses shall be maintained. Major Request of information recorded on the books of communication and consultation. Delivery of information asking by government recorded in the information requests and responses book. The Company gave funding amount Rp 300,000 to STAI Bangko and Rp 500,000 to SD 118 Karang Birahi. It was conducted as a response to request from STAI Bangko on February 2, 2016 and SD 118 Karang Birahi on 22 February Management documents are publicly available except where this is prevented by commercial confidentiality or where disclosure of information would result in negative environmental or social outcomes Publicly available documents shall include, but are not necessarily limited to: Major /user rights (Criterion 2.2); (Criteria 5.1, 6.1, 7.1 and 7.8); ention and reduction plans (Criterion 5.6); Policy (Criterion 6.13). The company has made a list of information categories that can be accessed by relevant stakeholders. Information for stakeholders includes social infomation, environmental, employee status, and evidence of land ownership. Document of Public information are as follow 1. Land titles/hgu 2. Occupational health and safety plans in form safety commite report regularly every three month; 3. Plans and impact assessments as evidenced in RKL RPL report 4. HCV document 5. Pollution prevention and reduction plans as evidenced in RKL RPL report 6. Details of complaints and grievances as can be seen in the records of complain and 21 of 122

22 grievance 7. Negotiation procedures as can be seen in SOP of land compensation no SOP / NP / SMART / VII / D & L002 ; 8. Continual improvement plans as can be seen in internal audit report 9. Public summary of certification assessment report 10. Human Rights Policy. 1.3 Grower and millers commit to ethical conduct in all business operation and transaction There shall be a written policy committing to a code of ethical conduct and Minor integrity in all operations and transactions, which shall be documented and communicated to all levels of the workforce and operations. The Company has established Business Ethics Policy. Business ethics stated commitment to Integrity. Business Ethics also stated the strict sanctions for employees who engage in corruption, bribery and fraud. This policy was signed by the Regional Controller on February 2, Socializing has been done to contractor on April 11, Conclusion: Conform 2 COMPLIANCE WITH APPLICABLE LAWS AND REGULATIONS 2.1 There is compliance with all applicable local, national and ratified international laws and regulations Evidence of compliance with relevant legal requirements shall be available. Major The Company has procedures to identify and evaluate compliance with regulations and other requirements in the SOP F/SMART/UMUM/SADV/ 002/002. List of regulations and other requirements made on Form Evaluation of Regulatory Compliance and Other Requirements (F/SMART/UMUM/SADV/002/002). The Company has been evaluating regulatory compliance based on environmental aspect, social aspect, worker welfare, SMK3, HCV and others. The company conducted last compliance evaluation on January 4, Documented system, which includes written information on legal Minor requirements, shall be maintained. SPO Officer and Secretary safety commitee do the evaluation of the fulfillment regulation and other requirement. SPO officer also assigned to identify and update legislation Mechanism for ensuring compliance shall be implemented. Minor Evaluation of the regulation is conducted annualy or if there are new regulations. The last 22 of 122

23 identification regulation was written to the Form F / SMART / UMUM / SADV / 002/002. Regulation includes aspects of OHS, manpower, environment, HCV, and permit of land A system for tracking any changes in the law shall be implemented. Minor The Company has established SMART / UMUM / SADV / I / 002 which regulate the mechanism of updating the latest regulations relating to the Company's activities. 2.2 The right to use the land is demonstrated, and is not legitimately contested by local people who can demonstrate that they have legal, customary or user rights Documents showing legal ownership or lease, history of land tenure and the actual legal use of the land shall be available. Major Location Permit The Company has decree letter of Governor Jambi No. 494 Year This decision mention reserve land covering an area 9000 Ha to PT Kresna Duta Agroindo. The area is located in district of Pauh and Sarolangun, Sarolangun Bangko regency. SK HGU The Company has had a concession area with number 01 / HGU / BPN.15 / 2014 to PT Kresna Duta Agrindo located in Merangin district, Jambi Province. SK HGU decided to give of state land with an area of Ha, Ha and 81,56 Ha. HGU Decree from BPN of Jambi Province with No. 02 / HGU / BPN.15 / 2014 decided to give HGU area with area of ha, 4.76 ha and 5.80 ha. HGU area located in the Karang Berahi village and Jelatang Village, district Pamenang, Merangin regency. Certificate of concession The company has a concession (HGU) certificate No 08 which located in the village of Karang Berahi, district Pamenang, Merangin regency (NIB: ) covering an area of 4,76 hectares. The company has a concession (HGU) certificate No 10 which located in the village of Jelatang, district Pamenang, Merangin regency (NIB: ) covering an area of 5,80 hectares. The company has a concession (HGU) certificate No 07 which located in the village of Karang Berahi, district Pamenang (NIB: ) covering an area of 33,07 23 of 122

24 hectares. The company has a concession (HGU) certificate No 9 which located in the Jelatang village, district Pemenang (NIB: ) covering an area of 81,56 hectares. The company has a concession (HGU) certificate No 06 which located in the Karang Berahi village, district Pamenang (NIB: ) covering an area of 92,89 hectares. The Company has not HGB for Development POM with an area 12,85 H according to in goverment regulation No. 40 year Plantation Business Registration License (SPUP) Plantation Business Registration License No. 960 / Menhutbun-VII / 2000 Forestry and Agricultural Department in Jakarta on For estate and mill in Pelakar, Langling and Jelatang - Area : 8359 Ha - Location: District of Sarolangun, Bangko and Pamenang, Sarko Regency, Jambi Province Results processing unit: - Type: POM - Total: 3 (three) units (Jelatang, Langling dan Pelakar) - Capacity permit: 30 tons/hour to 60 tons/hour and 60 ton/hour - Installed capacity: 30 ton/hour, 60 ton/hour and 60 ton/hour Conclusion : conform Legal boundaries s hall be clearly demarcated and visibly maintained. Minor The company conducted the monitoring pegs HGU every 3 months. Pegs monitoring include repairs, painting, cleaning and monitoring point coordinates in accordance with SOP No. SOP / SMART/ CERS- EHSD/SADV/ I/ 004. Base on BPN data, there are 65 pegs checked. Conclusion : conform Where there are or have been disputes, additional proof of legal acquisition of title and evidence that fair compensation has been made to previous owners Minor and occupants shall be available, and that these have been accepted with free, prior and informed consent (FPIC). Based on information from the company and public consultation during certification process there was no land dispute since 1999 Conclusion : conform 24 of 122

25 2.2.4 There shall be an absence of significant land conflict, unless requirements for Major acceptable conflict resolution processes (see Criteria 6.3 and 6.4) are implemented and accepted by the parties involved. Based on information from the company and public consultation during certification process there was no land dispute since 1999 Conclusion : conform For any conflict or dispute over the land, the extent of the disputed area shall be Minor mapped out in a participatory way with involvement of affected parties (including neighbouring communities where applicable). Based on information from the company and public consultation during certification process there was no land dispute since 1999 Conclusion : conform To avoid escalation of conflict, there shall be no evidence that palm oil Major operations have instigated violence in maintaining peace and order in their current and planned operations. During field observation, there was no use of military, police and thugs to securing palm oil activity. Based on contract observed for security, the security service was provided by legal security service company 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 Maps of an appropriate scale showing the extent of recognised legal, Major customary or user rights (Criteria 2.2, 7.5 and 7.6) shall be developed through participatory mapping involving affected parties (including neighbouring communities where applicable, and relevant authorities). The Company has SOP Land Conflict Settlement (SOP / SPO / SMART / LH-04). The company also has a SOP Implementation of the Agreement on the basis of prior and informed (FPIC) - SOP / SMART / SENS-CSRD / SADV / I / 003. Procedure stated commitment company in the acquisition of the land according to government regulations and the principle of FPIC. Land use Jelatang Mill (Division IV) are as follows: Planted area = Ha Mill area = Ha (HGB) Roads: Ha Trenches, Wetlands and Rivers = 8.66 Ha 25 of 122

26 Total area = Ha Total area in accordance with concession area (HGU). The Company has a map of the area in accordance with the statement that Hak Guna Usaha (HGU) with a scale of 1: 15,000. HGU is divided into 21 blocks Copies of negotiated agreements detailing the process of free, prior and Minor informed consent (FPIC) (Criteria 2.2, 7.5 and 7.6) shall be available and shall include: a) Evidence that a plan has been developed through consultation and discussion with all affected groups in the communities, and that information has been provided to all affected groups, including information on the steps that shall be taken to involve them in decision making; b) Evidence that the company has respected communities decisions to give or withhold their consent to the operation at the time that this decision was taken; c) Evidence that the legal, economic, environmental and social implications for permitting operations on their land have been understood and accepted by affected communities, including the implications for the legal status of their land at the expiry of the company s title, concession or lease on the land. Based on the explanation in clause 7.3, the Estate has been opened before year 2005 so there was no evidence that the plantation had been developed through consultation and discussion with all affected groups in the communities All relevant information shall be available in appropriate forms and languages, Minor including assessments of impacts, proposed benefit sharing, and legal arrangements. Based on the explanation in clause 7.3, the Estate has been opened before year 2005 so there was no information regarding FPIC in land aquistion and compensation Evidence shall be available to show that communities are represented through Major institutions or representatives of their own choosing, including legal counsel. Based on the explanation in clause 7.3, the Estate has been opened before year 2005 so there was no evidence or records about communities representatives. 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 26 of 122

27 3.1.1 A business or management plan (minimum three years) shall be documented Major that includes, where appropriate, a business case for scheme smallholders. The Company already has a long-term plan from 2010 to 2020 which includes a 3 mill under which KDA KDA-Langling, KDA- Jelatang and KDA Pelakar. The Plan already contains data trend FFB production quantities of the main estate, and FFB of plasma as well as FFB from outgrower. It also included production of CPO, PK, forecast price for CPO and PK, Real cost, Mill cost, KCP Kernel Crushing Plant (at Pelakar Mill) cost and net profit / loss An annual replanting programme projected for a minimum of five years (but longer Minor where necessary to reflect the management of fragile soils, see Criterion 4.3), with yearly review, shall be available. The Company already has a long-term plan from 2010 to 2020 but in the plan has not put plan of replanting. Company already has a SOP for replanting which refers to the following considerations: 1. The plant Age> 25 Years 2. The average height of the trees> 13 Meter 3. Production per year <14 tons / ha 4. The total of standing tree<100 trees / ha Conclusion : Minor NCR No.3 4 USE OF APPROPRIATE BEST PRACTICES BY GROWERS AND MILLERS 4.1 Operating procedures are appropriately documented and consistently implemented and monitored Standard Operating Procedures (SOPs) for estates and mills shall be documented. Major The Company already has document of a palm oil mill processing procedure i.e Acceptance of FFB Sterilization Stations Threshing Station Pressing Station Clarification Station Nut Station and Kernels Boiler stations and machine rooms Company has SOP or work instruction for Technical Oil Crop Cultivation. It made under 27 of 122

28 management Smart, Tbk (Management Committee Agronomy and Research (MCAR), 2012). The document contained about SOP New Area Investment Planning, replanting Planning, Breeding, Land Clearing, Planting, replanting, Pest and Plant Disease, Weed Control, Fertilization etc A mechanism to check consistent implementation of procedures shall be in Minor place. The Company conducts internal audit annually. Internal audit was conducted to determine the implementation of procedures in the company. Internal audit was conducted based on the SOP that determined by the Company. The scope of audit included plant maintenance, plant production and payment of wage Records of monitoring and any actions taken shall be maintained and available, Minor as appropriate. Employee activities were recorded in the SAP system. The foreman recorded the daily activities of employees in the Activity Books Foreman (BKM). BKM as report of foreman will be reviewed by an assistant division. The final report would be basic by KTU for the payment of salaries (M) The mill shall record the origins of all third-party sourced Fresh Fruit Bunches (FFB). Major The company has a production record which contains the origin of fresh fruit bunches (FFB), both originating from the own estate, scheme small holder, independent small holder or sourced from third parties/out growers. Total FFB supplied to Jelatang Mill was as much as 107, tonnes which 3, of them was supplied by outgrowers. 4.2 Practices maintain soil fertility at, or where possible improve soil fertility to, a level that ensures optimal and sustained yield There shall be evidence that good agriculture practices, as contained in Minor Standard Operating Procedures (SOPs), are followed to manage soil fertility to a level that ensures optimal and sustained yield, where possible. Company has conducted operational activities in estate in accordance with SOP such as fertilization that has been done at Division IV Records of fertiliser inputs shall be maintained. Minor 28 of 122

29 The Company already has conducted fertilization for the semester I, 2015: Fertilizer Type Hectare Realization (Kg) MOP 203, Urea 203,3 850 Borate 203, CIRP 203, Fertilizer used in the semester II (RP) was as much as 17,800 kg with an area of ha while for fertilizer of HGFB was as much as 460 kg with an area of ha There shall be evidence of periodic tissue and soil sampling to monitor changes Minor in nutrient status. The Company already has result of leaf sample analysis with refer to 083 / LEAF / LAB- SMARTRI / II / The analysis was conducted on February 13, 2015 for the analysis of N, P, K, Mg, Ca, B and CL. Company conduct soil analysis every five years. Soil analysis was conducted to ensure the availability of nutrient elements. Company already has the results of soil sample analysis issued on date May 30, 2014 with reference number 009 / LAND / LAB- SMARTRI / V / 2014 for analysis of Cu, Zn, Fe, Mn and B and it is in accordance with the SOP / SMART / MCAR / IX / TA -PPK A nutrient recycling strategy shall be in place, and may include use of Empty Minor Fruit Bunches (EFB), Palm Oil Mill Effluent (POME), and palm residues after replanting. Company (Jelatang Mill) has utilized empty bunch which has been processed into compost. The use of compost in the field is based on fertilizer recommendations from the research. Dose of compost for one subject was 35 Kg / PKK for one semester. 4.3 Practices minimize and control erosion and degradation of soils Maps of any fragile soils shall be available. Major Company has map of soil conditions to show the soil suiability to POM with a scale of 1: 75, of 122

30 Information on a map include the level of soil texture, depth Solum, effective depth and topography. The topography map is attached in appendix 2. Classification of Soil Topografi (%) Soil Texture Area Typic Hapludults 0-8 clayey loam 185,26 Typic Hapludults 0-8 clayey loam 239,12 Typic Hapludults 8-15 Dusty clayey loam 695,45 Typic Dystropepts 0-8 Dusty clayey loam 2,90 Typic Hapludults Dusty clayey loam 50, A management strategy shall be in place for plantings on slopes above a Minor certain limit (this needs to be soil and climate specific). The Company already has a strategy to resolve areas with the level of certain slope in SOP No.SOP / SMART / MCAR / I / TA-PPA. Area with slope <9% would be planted with a standard distance. Area with slope of 9-14% would conduct conservation terraces, Area with slope of 15-21% do 4.5 to 4 meters wide terrace, Area with slope of 22-40% slope of the terrace width of at least 3.0 meters and area with slope of> 40% is not recommended to be planted A road maintenance programme shall be in place. Minor The company already has a road maintenance plan as outlined in the annual Budget The company also has conducted road maintenance by hardening the road as like recorded in "Hardening Summary Road-2015". The realization of road hardening includes: Insertion = 50% rehardening = M Subsidence of peat soils shall be minimised and monitored. A documented Major water and ground cover management programme shall be in place. 30 of 122

31 Bangko Estate has no peatland Conclusion : N/A Drainability assessments shall be required prior to replanting on peat to Minor determine the long-term viability of the necessary drainage for oil palm growing. Bangko Estate has no peatland Conclusion : N/A A management strategy shall be in place for other fragile and problem soils Minor (e.g. sandy, low organic matter, acid sulphate soils). Company already has programs to resolve soils that contain of low organic material by making trenches according to the type of soil in the area and adjusting fertilizer needs according to soil type. 4.4 Practices maintain the quality and availability of surface and groundwater An implemented water management plan shall be in place. Minor The Company conducted water management of Jelatang mill and Bangko Estate such as water quality testing and management of riparian. The monitoring program has been established for each semester. The program was based on environmental documents and regulation. Monitoring of water quality include the testing of the resident groundwater wells, monitoring wells, merangin river in upstream and downstream, blengo river, and water WTP. Testing period in first semester 2016 has been conducted. The Company has established water management plan for the mill and estate in SOP Management and Monitoring of Water Resources SOP / SMART / BCOS-EHSD / SADV / 1/004 rev. 0 dated July 1, The water source for processing of FFB in the mill and the domestic needs of Jelatang unit was sourced from Merangin river and Blengo river. Processing of source water was conducted in the Water Treatment Plan Mill area. Water sources supply all estate workers, POM, and local resident for a year. Source Water resources comes from Merangin river and Blengo river. Clean water in the POM has been tested refers to standard Permenkes no Testing of clean water conducts every 3 months. Testing of the first quarter 2016 was conducted and the results met the requirement of standard. The utilization mampun river water for processing operations in Langling Mill and river water for processing operations in the Jelatang mill has not been supplemented with Permission to Use Water Resources. This is not in accordance with the Minister regulation of Public Works and Housing no. 37 / PRT / M / 2015 article 3 and article of 122

32 Conclusion : Major NCR No Protection of water courses and wetlands, including maintaining and Major restoring appropriate riparian and other buffer zones (refer to national best practice and national guidelines) shall be demonstrated. There was a map of river in area of PT. KDA with registration number 1359/214 / PMNP / XI / 13. The company has identified the source of the water in Estate and Mill. The source of water comes from the river Mampun, Belango river, and swamp. The company has established riparian strip of 50 meter from river side as a High Conservation Value Areas for HCV 1.1 (areas have provided support functions for biodiversity areas and / or conservation) and the HCV 4.1 (area or ecosystem which is important as a provider of water and flood control for downstream communities). This efforts for protecting the watershed.the Company do not conduct chemical spraying along the 5 trunks left and right of palm trees. The Company also has establised Swamp defined as HCV. The Company set 30 meters around the swamp as a High Conservation Value Management Area (NKT / HCV Management Area). The Company has established SOP of SOP / SMART / BCOS-EHSD / SADV / 1/002 regarding the Management and Monitoring of HCV. The Company has conducted management of HCV by placing boundary in accordance with IK / SMART / BCOS-EHSD / SADV / 002/001 and put up signs warning that read "CONSERVATION AREA - Swamp". Company marked tree of palm oil core by red cross in accordance with the working instructions for IK / SMART / BCOS-EHSD / SADV / 004/001. It was conducted as swamp protection that has been planted by palm oil. During interview with spraying officer in area A4, they already understand the areas that are prohibited for spraying pesticides. Conclusion : conform Appropriate treatment of mill effluent to required levels and regular monitoring Minor of discharge quality, especially Biochemical Oxygen Demand (BOD), shall be in compliance with national regulations (Criteria 2.1 and 5.6). Liquid waste from processing of FFB in mill was managed in WWTP. WWTP consists of 3 (three) pond with a total capacity of m 3. Liquid waste applied as land aplication with an area of ha. The Company has permit to use the land application of wastewater since Permit for land aplication based on Decree Head of Investment and Integrated Licensing Services (BKPM) No. 08 / BPM-PPT / 2014 with a land area of application is permitted covering an area of ha. Company conducted measurements of wastewater debit for land application estate. The Company also conducted the measurement of parameter BOD 5. Testing was conducted by the 32 of 122

33 Environmental Labolatory of BLHD Jambi Province in accordance with ministerial regulations LH no. 28/2003. Besides conducted test by external laboratory, The company conducted measurement of daily waste ph and debit by the internal laboratories SMARTRI. The company has had a permit to discharge wastewater for land application in the Jelatang Estate No. 7 / BPM-PPT / 2014 from Head of Investment and Integrated Licensing Services (BPMPPT), dated 15 December The waste water was applied to the area of 235 ha for 5 years. Report on the implementation of wastewater management and wastewater applications in first quarter of 2016, was reported to the district BLHD Merangin, BLH Province, PPE Region Sumatera, and Ministry of the Environment. Company has submitted report to districts Bangko and Estate Crops Office Regions. Liquid waste management activities reported include: schedule wastewater land applications, the results of analysis, testing of Merangin river water upstream and downstream, resident well 1 and 2, and monitoring wells 1, 2, 3 every 3 months. Company should calibrate of the flowmeter in the WWTP of Jelatang Mill to ensure the accuracy of recording of discharged liquid waste and ensure that all monitoring wells 1 in block A-06 are neatly closed and locked. Conclusion : Observation NCR No Mill water use per tonne of Fresh Fruit Bunches (FFB) (see Criterion 5.6) shall Minor be monitored. Company has established mechanisms to measure water utilization of the Mill which was documented in work instruction (WI) of Water Treatment No. IK / SMART / MCMD / I / TM-PKS / 19-Water Treatment. WI include inspection and cleaning of raw meter tank and flowrate measurement of each month as a basic calibration and calculation of doses of chemicals (coagulant, floakulan, soda ash). Monitoring the use of water for processing FFB in the Mill is conducted everyday. The result of monitoring total water use in 2015 was 122,305 m 3 to process 123, tonnes of FFB or 0.99 m 3 / tonne of FFB. In April 2016, company required as much as 7,916 m 3 to process 7,578 tons of FFB or 1.04 m 3 / tonne of FFB. 4.5 Pests, diseases, weeds and invasive introduced species are effectively managed using appropriate Integrated Pest Management Techniques Implementation of Integrated Pest Management (IPM) plans shall be monitored. Major The company has conducted a census of pest plant such as fire worm. Census conduct regularly every three months. Based on the results of a census in October 2015 in Division IV, it was found that the highest attack level was 13 worm / midrib on Blocks of B05 and A08. The Company has not conducted action for this attack. For pests of fire worm, the company always detect it before the attack take place further, by conducting census. This was in accordance with the Work Instructions No. IK / SMART / MCAR / VII / TA-HPT / 07-census and mouse control. Conclusion : Major NCR No.4 33 of 122

34 4.5.2 Training of those involved in IPM implementation shall be demonstrated. Minor The company has conducted training of Integrated Pest Management Dated October 18, 2014 by SMARTRI. Training was conducted in unit Bangko Estate. 4.6 Pesticides are used in a way that do not endanger health or the environment Justification of all pesticides used shall be demonstrated. The use of selective Major products that are specific to the target pest, weed or disease and which have minimal effect on non-target species shall be used where available. Based on recapitulation data of the use of pesticides in Bangko Estate 2015, the chemical used was Roll Up 480 SL (Glyphosate) for thatch, Erkafuron (MMS) for broadleaf weeds and Garlon (trichlopyr) for woody weeds.there was the use of paraquat (rolixone) in January and February 2015 to eradicate grasslike weeds (cyperus) Records of pesticides use (including active ingredients used and their LD50, Major area treated, amount of active ingredients applied per ha and number of applications) shall be provided. Based on recapitulation data of the use of pesticides in 2015, the chemical used was Roll Up 480 SL of liters, erkafuron of 35,348 kg, garlon as much as 9.52 liters, and Rolixone (paraquat) as much as 77,75 liters. In 2016 the use of chemichal was Roll Up (Glyphosate) of liters, erkafuron of 14,342 kg and garlon 670 ec as much as 0 Liter Any use of pesticides shall be minimised as part of a plan, and in accordance with Integrated Pest Management (IPM) plans. There shall be no prophylactic Major use of pesticides, except in specific situations identified in national Best Practice guidelines. The company already has an integrated pest management as set in SOP weed control / SMART / MCAR / VIII / TA-PGM. Controlling pests and weeds was done manually, biologically (using owl) and chemically. Up to April 2016, the company does not use herbicide which contains paraquat Pesticides that are categorised as World Health Organisation Class 1A or 1B, or that are listed by the Stockholm or Rotterdam Conventions, and paraquat, are Minor not used, except in specific situations identified in national Best Practice guidelines. The use of such pesticides shall be minimised and eliminated as part of a plan, and shall only be used in exceptional circumstances. 34 of 122

35 Up to April 2016, the company does not use herbicide which contains paraquat Pesticides shall only be handled, used or applied by persons who have Major completed the necessary training and shall always be applied in accordance with the product label. Appropriate safety and application equipment shall be provided and used. All precautions attached to the products shall be properly observed, applied, and understood by workers (see Criterion 4.7). Company was advised to conduct resocializing about MSDS of waste hazardous material to ensure the understanding of workers. Based on interviews with employees were found: - Spraying officer in block A4 not yet understand of handling according to MSDS. Example: chemicals Roll Up - Warehouse officer did not understand the nature of the chemicals stored in central warehouses. Based on information during interviews, Warehouse Officer never get socialization regarding MSDS of hazardous material. It is advised to re-disseminate MSDS of hazardous material to ensure the comprehension of workers related to the nature of the material and the control of hazardous material used is well maintained. Conclusion : Observation NCR No Storage of all pesticides shall be according to recognised best practices. All Major pesticide containers shall be properly disposed off and not used for other purposes (see Criterion 5.3). Handling mechanisms of used agrochemical packaging and chemicals have been regulated in work instruction of Hazardous Waste Handling and Used Packaging Chemicals, no. IK / SMART / LEMS-EHSD / SADV / 002/ Application of pesticides shall be by proven methods that minimise risk and Minor impacts. The company has set procedure of Weed Control SOP / SMART / MCAR / VIII / TA-PGM. The procedures governing the use of pesticides, pesticide handling, and use of PPE for personnel associated with pesticides Pesticides shall be applied aerially only where there is documented justification. Communities shall be informed of impending aerial pesticide Major applications with all relevant information within reasonable time prior to application. 35 of 122

36 The Company did not apply pesticides aerially Maintenance of employee and associated smallholder knowledge and skills on Minor pesticide handling shall be demonstrated, including provision of appropriate information materials (see Criterion 4.8). The Company has conducted socialization regarding the handling of pesticides to farmers of Smallhoder of Mampun Baru Village on December 14, Proper disposal of waste material, according to procedures that are fully Minor understood by workers and managers shall be demonstrated (see Criterion 5.3). Waste disposal procedure has been set in the Waste Management SOP with No. SOP / SMART / LEMS-EHSD / SADV / I / 002. Hazardous material waste such as used agrochemical was stored in licensed temporary waste storage. Unit Bangko Estate has obtained Permit of Temporary Storage from Regent of Merangin No. 401 / LH / 2014 on September 15, Handling mechanism of agrochemical packaging and chemicals have been set in Work Instruction of Handling Hazardous material Waste and Packaging Chemicals Ex, with No. IK / SMART / LEMS-EHSD / SADV / 002/001. Rinse water from PPE was used as diluent for agrochemicals. Used Agrochemical packaging can be reused for the same activity. Documentation of the reuse of used agrochemical packaging was recorded in the Official letter of flushing used Packaging of Pesticides. Socialization of the SOP Waste Management and Work Instruction of storage Waste Temporary has conducted on May 9, 2016 to two officers TPS B3 (engineering section). The socialization was given by the Assistant SPO BNGE. During interviews with warehouse officer and the agrochemical officer of Bangko estate, they understood the disposal of used agrochemical packaging in accordance SOP Specific annual medical surveillance for pesticide operators, and documented Major action to treat related health conditions, shall be demonstrated. Unit Bangko Estate has a list of pesticide handler s officer as listed in sprayer list of BNGE 2016 which was made on May 4, In the year 2016, it will be conducted special medical examinations (cholinesrase) in June. Company has conducted the last periodical health examination on December 21, Examination conducted internally by the company doctor. The Company also conducted special medical examinations for employees such as cholinesterase to pesticide sprayers. Examination period of 2015 was conducted two time on June 23, 2015 and December 7, Company conducted examination cholinesrase collaboration with the Center Hiperkes and Safety Prov. South Sumatra. 36 of 122

37 No work with pesticides shall be undertaken by pregnant or breast-feeding Major women. There were 20 employees consisting of 6 women and 14 men.the Company has a policy prohibiting pregnant and lactating female sprayers for conducting chemical handling / spraying as stated in SE No. 02 / VPA-1 / I / 2009 and set by the VPA-1 dated January 13, Company conducts pregnancy tests every month. Based on the results of pregnancy test on October 4, 2015, there was found one pregnant sprayer. The company conducted mutation against sprayers who are pregnant as can be seen in the letter from the manager BNGE No. 1/Estate/IX/2015 dated Oct, An occupational health and safety plan is documented, effectively communicated and implemented A health and safety policy shall be in place. A health and safety plan covering Major all activities shall be documented and implemented, and its effectiveness monitored. The Company has established Occupational Health and Safety Policy, signed by Daud Dharsono as President Director of PT. SMART Tbk, on November 1st, The OHS policy already contained a commitment to improve the performance of OHS, communicate policy and procedures to all employees and stakeholders, obey laws, ensure the application of OHSMS, identify, assess and control all risk and conduct continuous improvement in order to get zero accidents and occupational diseases, manage, monitor indicators of OHSMS, and continuous improvement and enhance the performance of OHS. The company has set goals, objectives and OHS programs as documented in the sheet of Goal K3 (F / SMART / HESS-EHSD / SDV / 003) and form K3 Program (F / SMART / HESS-EHSD / SADV / 004/001) for all units such as: 1. In Bangko Estate, Chairman of Safety Commitee has set targets and program of OHS on 4 January Objectives and Programs include minimizing accidents and lost work time (no fatality), complementing the PPE employees (application PPE), etc. 2. In Jelatang Mill, Chairman of Safety Commitee has set targets and program of OHS on 4 January Objectives and Programs include minimizing accidents and lost work time (no fatality), complementing the PPE employees (application PPE), etc. The company has conducted health surveillance to its employee and OHS internal audit K3. The medical examination has been conducted in accordance with regulations such as periodic medical examinations and special medical examinations. 1. In the Bangko Estate unit, the company has conducted periodic medical examinations on December Examination was conducted internally by the company doctor. Special 37 of 122

38 medical examinations for employees such as cholinesterase to pesticide sprayer in 2015 was conducted two times on June 23, 2015 and December 7, Special examination was conducted in cooperation with the Center Hiperkes and Safety Prov. South Sumatra. The result of examination show the examinee s cholinesterase were in the range of normal 2. In the Jelatang Mill unit, the company has conducted periodic medical examinations on October Examination was conducted internally by the company doctor. Special medical examinations was conducted on December, Examination incllude 19 people for spirometry, 11 people for audiometri, dan 6 people for cholinesterase. Special examination was conducted in cooperation with the Center Hiperkes and Safety Prov. South Sumatra. The result of examination show the examinee were in the range of normal All operations where health and safety is an issue shall be risk assessed, and procedures and actions shall be documented and implemented to address the Major identified issues. All precautions attached to products shall be properly observed and applied to the workers. The Company has established procedures to conduct assessment of operational risks that could threaten the safety and health, i.e. Identification Hazards, Assessment and Risk Control (ISBPPR) procedure, No. Doc: SOP / SMART / HESS-EHSD / SADV / I / 003). Each work unit has arranged HIRADC. HIRADC was prepared by Secretary of Safety Commitee. Bangko Estate has developed Identification Hazards and Risk Control (ISBPPR) for all activities. ISBPPR recorded in the form F / SMART / HESS-EHSD / SADV / 002/002. ISBPPR for the period January to December 2016 was made by the Secretary of safety commitee and has approved by Chairman. Unit Jelatang Mill has developed Identification Hazards and Risk Control (ISBPPR) for all activities. HIRADC was recorded in the form F / SMART / HESS-EHSD / SADV / 002/002. HIRADC for the period January to December 2016 was made by the Secretary P2K3 and has approved by Chairman. However there were several hazards which had not been properly controled i.e : Diesel fuel tank near the central warehouse has not been provided with a grounding. Chemical operator in the area of water treatment did not wear Gloves unsafe conditions such as palm leaves that touch the medium voltage power cable (20 KV) in Division 4 This has been isuued as major non conformities. Company is strongly take into consideration for several evidence as follows : one bottle of chemical that did not have identity stored in herbicide section of central 38 of 122

39 warehouse Installation hazardous symbol on gas cylinders in the workshop area was not in accordance with ministry regulation No. 3 in 2008 Outside of the warehouse of hazardous material storage was not installled with symbols according to the provisions of ministry regulation LH No. 03, 2008 Gallon storage of toxic materials used in spraying activities should be labeled with hazardous symbol. Hazardous symbol on the packaging containing the hazardous material is missing during the field visit to spraying activities in Block A4. Diesel fuel tank In the central warehouse was wrongly labelled as irritant; while agrochemical in the warehouse was wrongly labelled as corrosive. Installation hazardous symbol on gas cylinders in the workshop area was not in accordance with ministry regulation No. 3 in 2008 Outside of the warehouse of hazardous material storage was not installled with symbols according to the provisions of ministry regulation LH No. 03, 2008 This has been issued as observation. Conclusion : Major NCR No. 2, Observation NCR No All workers involved in the operation shall be adequately trained in safe working practices (see Criterion 4.8). Adequate and appropriate protective Major equipment shall be available to all workers at the place of work to cover all potentially hazardous operations, such as pesticide application, machine operations, and land preparation, harvesting and, if it is used, burning. The Company has established training plan for regional employees in the Plan and Realization Training Program Region Jambi for period January s / d in December The plan set out by the Regional Officer SPO Jambi on January 20, The training was OHS training that consist of welding operators, first aid, emergency response preparedness, SIO, the role of fire prevention officers, etc. (1) Jelatang Mill The Company has list holder of SIO Jelatang on February 5, There were 31 workers who have a license from the Ministry of Employment and the National Professional Certification Board (BNSP). The types of licenses that include: operator of steam engines (boiler, sterilizer), operator of cranes and loaders, welder, operators engine operator and power production, electrical technicians, a team of fire-fighting, experts K3, and first aid officers. Sampling of operator license include: 1. SIO Operator K3 Diesel on the name of Hotop is still valid until December 6, 2018; 2. SIO Operator Steam engines Class I, the name of Misroji is still valid until October 7, 2018; the name of Amin Ropa'at valid until December 11, 2018; 3. SIO Transport Aircraft Operator Overhead Traveling Crane Class II, the name of Jamal is 39 of 122

40 valid until February 10, 2017; 4. SIO Lift Transport Aircraft Operator Wheel Loader the name of Edward Nababan valid until December 13, The operator SIO extension is being carried out as at 21 April 2016 based on the receipt signed by Wasnaker K3 Jambi province; 5. Certificate of competence of welders from BNSP name M. Rifandi is valid until 27 November 2017; 6. SIO K3 Electrical Technician on the name of Rusdianto is valid until June 10, The Company has a list of equipments which were required for mandatory Inspection, Testing Machinery and Work Equipment. List of inspection equipment signed by Mill Head on March 31, There were 18 equipments or machines consisting of 2 (two) units of the sterilizer, 1 boiler unit, two crane hoist units, 1 unit BPV, 2 units of diesel generators, two steam turbine units, electrical installation, lightning dealer installation, installation of hydrant, 2 units of wheel loader, 1 unit scarab, and 2 compressor units. Sampling certificate of test equipment and infrastructure as follows: 1. Permit the use of pressure vessel with numbers: 560/201 / HISK / SNKT / 2011 has been conducted check on January 26, Permit the use of scarab with no: 566/247/Nakertrans/PP/2007 has been conducted check on March 2, Permit the use of hydrant instalation with no.: 560/554/HISK/SNKT/2011 has been conducted check on July 1, Permit the use of Penyalur petir with no.: 137/W.5/E3/IP/1996 has been conducted check on March 2, Permit the use of electrical installation with no.: 136/W.5/E3/IL/1996 has been conducted check on March 2, Permit the use of steam turbine with no.: S.I.37/KW5/KD2-5/2000 has been conducted check on July 1, Permit the use of steam vessel (BPV) with nomor: /42/TU/NKR has been conducted check on March 2, Permit the use of hoist crane with no.: 281/H.C/Peng.H.S/2004 has been conducted check on July 1, Permit the use of sterilizer with no.: 05/D.0003 has been conducted check on July 1, Permit the use of steam boiler with no.: 05/D.0001 has been conducted check on March 2, Permit the use of diesel engine generator with no.: 107/W.5/E3/MD/1997 has been conducted check on March 2, 2016 (2) Bangko Estate The Company has a list of permissions set on May 2, There were 8 workers who have a license from the Ministry of Labor. The types of licenses that include: Expert K3, tractor operators, operator greder, and licensing officers P3K. From sampling to the tractor operator 40 of 122

41 name of Imron Abdul Malik is still valid until December 6, 2018 and greder operator the name of Kusmadi is valid until February 10, Company has Recap of Heavy Equipment Permit and its validity. It was set on September 1, Recap licenses include 1 unit of the pressure vessel (receiver aircompressor), 1 tractor unit, and one unit road grader. Tractor has conducted checking on June 29, An unit of receiver aircompressor has conducted checking on June 29, unit grader has conducted a test check on the 29th June The company has mechanism for the provision and replacement of PPE. Mechanisms contained in the SOP Management of Personal Protective Equipment (SOP / SMART / HESS-EHSD / SADV / I / 010. Annualy the company distributed PPE to all workers in accordance with the form of Handover Letter PPE (F / SMART / HESS- EHSD / SADV / 010/002). SOP has set to perform inventory / stock PPE and maximum stock of 10% of the total requirement. Secretary of safety committee was responsible for replacing and distributing PPE damaged. 1. In the Bangko Estate, the company has distributed new PPE in 2016 such as in the Division on 29 April 2016 to officer sprayer. PPE was distributed to employees include boots, masks, aprons, and gloves. 2. In the Jelatang Mill, the company has distributed new PPE in 2016 in the Grading stasiun on April, for sortir officers. PPE was distributed to employees include helmet, and rope safety helmet. Noncorformity was found in boiler stasiun during surveillance audit. 3. In the Jelatang Mill, the company has delivered of new PPE in 2016 in the Workshop stasiun on April, for mechanical and electrical officers. PPE was distributed to employees include helmet. During observation in the field, sprayer in Block A4 has using PPE such as full face helmet, boots, aprons, raincoats, gloves, and masks. Employees have understood the mechanism for replacement of broken PPE. The Company has provided PPE which was stored in the central warehouse and make requests (PR No. 11,215,108) to provide of PPE from company. During site visit to Jelatang Mill, it were found 2 boiler operators did not wear appropriate PPE such as earmuff and the protective apron was not available in the location. Conclusion : Major NCR No The responsible person/persons shall be identified. There shall be records of regular meetings between the responsible person/s and workers. Concerns of Major all parties about health, safety and welfare shall be discussed at these meetings, and any issues raised shall be recorded. Company has appointed responsible personnel for implementing OHS in company. The Company has set the structure of safety commitee based on Permenaker No. 04 / MEN / of 122

42 1) Structure of Advisory Committee for Occupational Safety and Health (P2K3) in Jelatang Mill was approved by Dinsosnakertrans Merangin No. : 78a 2016 on 21 April The Secretary of P2K3 Sagita Reza had participated General K3 expert training. Advisory Committee for Occupational Safety and Health (P2K3) conduct monthly meetings with the documentation of evidence in the form of the attendance list and minutes of the meeting as sampling in January P2K3 has been reporting to the Local Manpower Office as in the period from January to March 2016 quarterly. The evidence in the form of a receipt no: 127 / FM-JLTM / IV / 2016 was signed by officials Dinsosnakertrans Kab. Merangin April 5, ) Structure of P2K3 in Jelatang Mill was approved by Dinsosnakertrans Merangin No on 10 August The Secretary of P2K3 Danu K. Sabrang had participated General K3 expert training. Advisory Committee for Occupational Safety and Health (P2K3) conduct monthly meetings with the documentation evidence in the form of the attendance list and minutes of the meeting as sampling in February P2K3 has been reporting to the local Manpower Office as in the period from July to September 2016 quarterly Accident and emergency procedures shall exist and instructions shall be clearly understood by all workers. Accident procedures shall be available in the Minor appropriate language of the workforce. Assigned operatives trained in First Aid should be present in both field and other operations, and first aid equipment shall be available at worksites. Records of all accidents shall be kept and periodically reviewed. The Company has had procedures for the reporting and investigation of occupational accidents, i.e SOP of Management of occupational Accidents and Diseases (SOP / SMART / HESS-EHSD / SADV / I / 005). In the case of occupational accident, company would do investigation using sheet of Investigation Report Accident / Incident and Emergency (F / SMART / HESS-EHSD / SADV / 005/002). Reporting using form KK2 accordance with Pemenaker No 03/1998. The Company has set a procedure to identify potential emergencies, I.e SOP Preparedness and Emergency Response (SOP / SMART / UMUM / SADV / I / 005). Procedure has set potential emergencies such as fires, explosions, earthquakes, floods, hazardous chemical spills, chemical poisoning through the mouth, sewage pond dike collapsed, and riots. Any potential emergencies established how to handlle in accordance with the Emergency Response Flow Chart (contained in the SOP from page 15 to page 21. Handling Emergency potential spills of hazardous chemicals contained in Material Management and Displacement SOP (SOP / SMART / HESS- EHSD / SADV / I / 006). The way of handling emergency situations have been informed through 42 of 122

43 a display in the workplace as in a workshop area of 5 divisions and central warehouse. The Company has established the structure of emergency responses : 1) Jelatang Mill has established Structure Preparedness and Emergency Response. The structure was lead by Mill Manager with team members include fire extinguishers, security teams, squads remover, evacuation teams, medical teams and liaison teams. 2) Bangko Estate has established Emergency Response Preparedness structure. The structure was lead by the Head of Unit PAM with team members include prevention, evacuation teams, team transportation, security squads, investigation teams, and squads P3K. The Company has conducted training for emergency response personnel in accordance with minister Decree 186 / MEN / 1999 such as: 1) In Jelatang Mill, the company has had the role of a fire officer (class D) as many as 5 people and fire-fighting squads (class C) as many as five people (in training 2014). In 2015, the company has send training in October 2015 and received a certificate for the clerk role of fire as many as 4 people 2) In the Bangko Estate, training of emergency response teams conducted in conjunction with an emergency response simulation. Training in cooperation with external parties (Mangala Agni BKSDA). The company has been reporting every 6 months in the form of Land Fire Monitoring Report. The period of July to December 2015, The Company has reported to Dinsosnakertrans Merangin Forestry and Plantation Office and the District. Merangin on February 1, The company has provided equipment and infrastructure of emergency response such as: 1) In the Bangko Estate, the company provides equipment such as main equipment (kepyok fire, ax 2 function, harrow, shovels, backpack sprayers, saws, sumbut), high pressure water pump, transport (truck and car pick up), communication (HT, megaphone, whistle), logistics (first aid box, fire extinguisher etc. The equipment was saved at post emergency response in main office. 2) In the Unit Nettle Mill, the company provides equipment includes 24 units of fire extinguisher (22 units of powder and 2 units of CO2), hydrant, alarm or bell 2 units, 1 unit stretcher, and 10 boxes P3K. All equipment was always conducted monitoring / inspection once a month. The company has had personnel who have been trained and licensed to become first aider. In Langling Mill, there were 3 people, Bangko Estate as many as five people, and Jelatang Mill by 2 people. The Company has also provided equipment of first aid throughout the workplace in accordance with Permenaker No. 15/2008 type A. Equipment of first aid (P3K) were placed at the office, postal security, and distributed to the foreman. In a sampling of some box P3K has met as stipulated in Ministerial Regulation No. 15 / MEN / 2008 as in the TPS area B3 and the estate office All workers shall be provided with medical care, and covered by accident Minor insurance. 43 of 122

44 Company had paid premium of employment insurance (BPJS ketenagakerjaan) in April 2016 for 160 workers SKU and 25 workers Fixed Term Contract (PKWT). Payments was paid to BPJS Jambi Branch II Muara Bungo. Company has paid premium for employment insurance for casual worker, as many as 121 participants on April However the payment was made for the premium to cover only accident insurance and death insurance program (retirement plan is not covered). This was not in accordance with Regulation 84 of 2013 in which this rule still need companies to cover all their employees with a full coverage of employment insurance (BPJS ketenagekerjaan) regardless of the employment status of the their employees. There is unsettled dispute regarding the employment insurance between company and CB. According to the Company s opinion, partial coverage of employment insurance (only for death and accident) is still allowed under valid Decree 150,1999. However the CB has different opinion with the company. CB has opinion that the manpower ministerial decree no has been superceded by newer and higher status of regulation i.e Goverment Regulation no. 84/2013. This newer regulation rules that the company must register all of their employees and pay part of the premium for full coverage of employment insurance scheme which also including the retirement plan besides death and accident insurance Company had paid BPJS health in Mei for 616 daily permanent workers and contracted workers. Payments made to BPJS Jambi Branch II Muara Bungo. However The Company did not pay premium of health insurance for its 121 casual workers. This is not in accordance with perpres no. 12 of 2013 article 11, paragraph 1, which mandates that every employers must register their employees as participants in the health insurance (BPJS kesehatan) There is also unsettled dispute between Company and CB regarding health insurance (BPJS kesehatan) for casual workers. Company did not register its casual workers for health insurance because it has the opinion that there are no regulations which specifically regulate about casual worker for health insurance. CB on the other hand has the opinion that regulation regarding health insurance (BPJS kesehatan), perpres (president regulation) no. 12 of 2013 article 11, paragraph 1, already states very clearly that every employer must register all their employees as participants in the health insurance (BPJS kesehatan) regardless the employment status, thus the company must register their casual workers for health insurance. Conclusion : Minor NCR No Occupational injuries shall be recorded using Lost Time Accident (LTA) Minor metrics. SOP Handling Occupational Accidents and Ilnesses refer to the SOP / SMART / HESS-EHSD / SADV / I / 005. The procedure set out the recording of occupational accidents by making recap accident report using sheet of Summary of Work Accident Report (F / SMART / HESS-EHSD / SADV / 005/003). In 2015 there was no work accidents. The company made data analysis K3 which includes the calculation of FR and SR Monthly (F / SMART / HESS-EHSD / SADV / 005/004) for workplace accidents. OHS data analysis is 44 of 122

45 conducted every month. Calculations refer to the provisions in Ministerial Regulation No. 03 / MEN / 1998, and include Lost Time Accident. 1) The calculation of the FR and SR 2015 for Jelatang Mill, FR = 0 and the SR = 0. 2) The calculation of the FR and SR 2015 for Bangko Estate FR = 0 and the SR = All staff, workers, smallholders and contractors are appropriately trained A formal training programme shall be in place that covers all aspects of the Major RSPO Principles and Criteria, and that includes regular assessments of training needs and documentation of the programme. The Company has arranged an annual training program. There was Training Program and Realization of PT. Kresna Duta Agro in Training Program includes RSPO, environmental, K3 (OHS), HCV, and Social. This training program is made based on the results of Training Needs Identification which made earlier in the beginning of the year by each unit Records of training for each employee shall be maintained. Minor SPO Department managed records results of implementation training programs such as the attendance list, photos, and copy of certificate. The training has been realized in 2015 include environmental management training.there was evidence of training in the form of the attendance list and photos of activities. The training schedule in 2016, for example P3K training. This training has conducted on February 4, 2016 which was attended by representatives of staff and assistant unit JLTM, LNGM, and BNGE. 5 ENVIRONMENTAL RESPONSIBILITY AND CONSERVATION OF NATURAL RESOURCES AND BIODIVERSITY 5.1 Aspects of plantation and mill management, including replanting, that have environmental impacts are identified, and plans to mitigate the negative impacts and promote the positive ones are made, implemented and monitored, to demonstrate An environmental impact assessment (EIA) shall be documented. Major The Company has two (2) environmental documents with details as follows: 1. Environmental Management and Monitoring Effort Program (UKL UPL) of covering Mill Langling with mill capacity of 60 tonnes FFB per hour and main plantation area of 620 ha. 2. Environmental Management Document (DPLH) included additions to the Estate area of Jelatang of 86, 4 ha and the utilization of palm oil waste by means of biogas, LA, and composting. DPLH accompanied by an Environmental Permit issued by Head of Investment and Integrated Licensing Services Bangko district on June 18, 2015 through Decree No. 59 / BPM- PPT / of 122

46 In arranging DPLH, the Company has conducted a public consultation on October 23, The public consultation was attended by representatives of the Jelatang village, government agencies (BPLH, Bappedada, districts), and several stakeholders Where the identification of impacts requires changes in current practices, in order to mitigate negative effects, a timetable for change shall be developed and Minor implemented within a comprehensive management plan. The management plan shall identify the responsible person/persons. The company conducted the management and monitoring of the environment with reference to the matrix UKL / UPL / environmental documents. Company proposed changes the matrix to BLH Merangin district. Request of changes also include the periodic of air quality testing every six months. There was changes of referrals UKL UPL matrix PT. KDA unit Jelatang from BLHD Merangin on March 8, 2016 by letter no. 660/171 / BLHD / The letter explaining about the Company's actions to be taken in the process of UKL UPL matrix changes, including: 1. Immediately revise the UKL / UPL 2. After making revisions of UKL / UPL, The Company is adviced to apply for the examination in the district BLHD Merangin. To follow up the referral letter, the Company has applied for the discussion of the matrix changes UKL / UPL PT. KDA Langling Units and Jelatang to BLHD Merangin through letter no. 086 / EL / KDA-BLHD / V / 2016 on May 10, There was evidence of environmental management and monitoring in RKL / RPL and reported to the relevant agencies once every 6 months. In RKL / RPL Semester II 2015, company has conducted management and monitoring of air emissions, wastewater, surface water, water monitoring wells, soil quality, hazardous waste material, biodiversity, flora & fauna, aquatic biota, and social social. RKL / RPL second half of 2015 has been submitted to BLHD Merangin, BLHD Jambi Province, Sumatra Region PPE, and the Ministry of Environment. During the previous surveillane assesment there was minor nonconformity i.e Air quality testing period was not in accordance with provisions in the matrix UPL Jelatangand Langling unit, which conducted once a month to the parameters of dust, SO 2, NO 2, CO, NH 3. This minor non conformity has been addressed by the company, and downgraded as observation pending the evidence of consistent implementation until the next ASA. Conclusion : Observation NCR No This plan shall incorporate a monitoring protocol, adaptive to operational changes, which shall be implemented to monitor the effectiveness of the Minor mitigation measures. The plan shall be reviewed as a minimum every two years to reflect the results of monitoring and where there are operational changes that 46 of 122

47 may have positive and negative environmental impacts. The company has set the identification of environmental impact in every aspect of operational activities at POM and Estate. Identification was conducted regularly every semester. The last identification and evaluation to environmental aspect was conducted in unit POM Langling and Bangko Estate on January Report on environmental management plan (RKL / RPL) for second half of 2015 did not include environmental sanitation activities as required in the matrix of UKL / UPL document DPPL. This is because the company has conducted environmental sanitation, but these activities have not been put in RKL / RPL. Conclusion : Observation NCR No The status of rare, threatened or endangered species and high conservation value habitats, if any, that exist in the plantation or that could be affected by plantation or mill management, shall be identified and operations managed to best ensure that they are maintained and/or enhanched Information shall be collated in a High Conservation Value (HCV) assessment Major that includes both the planted area itself and relevant wider landscape-level considerations (such as wildlife corridors). There were maps of the area of the PT. Kresna Duta Agroindo on a scale of 1: 175,000 with registration No. : 480/214 / PMNP / III / 12 and maps Spatial Overlay District Merangin with the PT. Kresna Duta Agroindo on a scale of 1: 175,000. From these maps it was known that the PT. KDA in the region APL (Other Use Area) and not directly adjacent to the conservation area or protected forests. The boundaries around Bangko Estate unit, namely: Division Jelatang: - The north side was bordered by crop farming and horticulture - The south was bordered by crop farming and horticulture and residential village Jelatang. - The East was bordered with plantations and residential village Jelatang - The west was bordered plantations There was procedure of High Conservation Values Identification SOP Number: SOP / SMART / BCOS-EHSD / SADV / I / 001 dated July 1, Based on the SOP, HCV assessment has been done internally by the Environment Department PT. SMART Tbk, documented into the report documents the results of the identification of areas with high conservation value. The survey team consisted of: 1. Norman Farid Mustakin (team coordinator and ecology). He registered as a provisionally licensed assessor ALS 2. Firmansyah (Fauna and ecology). He registered as a licensed assessor ALS 3. Febia Arisnagara (Flora and environmental services) 47 of 122

48 4. Dede M. Nasir (mapping and environmental services). He registered as a licensed assessor ALS. 5. Laurentius V. Baskara (Social, economic and cultural) This report has been through a process of peer-reviewed by Dr. Kunkun Jaka Gurmaya. The result of Identification KBKT (HCV) in Division Jelatang was HCV 4.1 (Regions or important ecosystem as a provider of water and flood control for downstream communities) in the form of swamp area of 2.71 hectares Where rare, threatened or endangered (RTE) species, or HCVs, are present or are affected by plantation or mill operations, appropriate measures that are Major expected to maintain and/or enhance them shall be implemented through a management plan. Based on the Report of Identification of High Conservation Values PT. Kresna Duta Agroindo Bangko Estate in Division 4 (Jelatang), there was HCV 4.1 namely fresh water swamp. In the report there was HCV recommendations which was identified as HCV 4.1. which became the basis of PT. KDA in managing HCVA to create SOP / SMART / BCOS-EHSD / SADV / I / 002 on the Management and Monitoring of High Conservation Value (HCV Management) and make the Management Plan NKT Annual 2016 signed by HCV Officer (Yuda Arbiansyah) and Estate Manager ( Riendra Nasution). Based on the management plan, PT KDA conducted management and monitoring of the land designated as HCV. The result is documented into the Report of Management and Monitoring High Conservation Values. The report has been reported to the Head of BKSDA Merangin with proof of receipt that has been signed and stamped by BKSDA Merangin. Protection against HCV 4.1 freshwater swamp set 30 meters around the marsh as a High Conservation Value Management Area (KNPKT / HCV Management Area). The company set the SOP SOP / SMART / BCOS-EHSD / SADV / 1/002 on the Management and Monitoring of HCV. PT. Kresna Duta Agroindo already managing HCV HCVA by placing border marks in accordance with IK / SMART / BCOS-EHSD / SADV / 002/001 and putting up warning sign. In addition, as a protection of the area around the swamp which were already planted, the company did not use chemical treatment. This was conducted by marking a red cross in the trunk of palm in accordance with the working instructions for IK / SMART / BCOS- EHSD / SADV / 004/001 on the manufacture of marking spraying area, warning signs for HCV and HCV area. During the interview with the sprayer worker in A4, they already understand the areas that are prohibited for chemical treatment. HCV officer made a report monitoring of high conservation value in the form F / SMART / 48 of 122

49 BCOS-EHSD / SADV / 002/020. The report contained the date, type of HCV, location, description of the location, and recommendations. The results of the monitoring will be made as recommendation programs on the management of HCV There shall be a programme to regularly educate the workforce about the status of these RTE species, and appropriate disciplinary measures shall be instigated Minor in accordance with company rules and national law if any individual working for the company is found to capture, harm, collect or kill these species. The company has SOP of Management and Monitoring High Conservation Value No: SOP / SMART / BCOS-EHSD / SADV / I / 002. Control of HCV was conducted by socialization to staff / employees, community estate, and contractor in order to preserve the area, animals and plants. PT. Kresna Duta Agroindo Bangko Estate Division 4 and 5 have an Annual High Conservation Value Management Plan for The documents described the program, the target of implementation, the realization, the location, in the implementation of, and responsibility. The educational program of internal socialization (to employees, staff, security) was targeted twice a year with implementation in November 2016 and external socialization (community) once a year with implementation in November The company conducted the socialization of HCV on April 2016 in Sungai Kapas Villages. Socialization was attended by the local resident and employees of Division 4 and 5 (Jelatang and Langling) There was a Wildlife Protection Policy Rare and Endangered PT. SMART TBK, one of the clause, "The company will conduct an investigation into every case of violation and give a disciplinary sanction (up to dismissal) to the employees who commit acts of poaching, nurturing, hurt, harm and loss of life of wildlife which are rare or endangered. "~ approved by Daud Dharsono (President Director of PT. SMART Tbk) ON June 25, There was a Social and Environmental Policy GAR one of the rules reads, "banned the hunting of wild animals, including endangered species, threatened and endangered species in our plantations; and investigate any violations of this policy as a hunting preserve, maim, torture, and killing of rare, threatened and endangered species and take disciplinary action including termination of employment."~ approved by Jo Haud Dharsono (Head of Upstream), Hemant Bhatt (CEO -Downstream & Commercial), Rafael Conception (Executive Director & CFO), and Agus Purnomo (Managing Director of Sustainability & Strategic Stakeholder Engagement) on 8 September 2015 in Jakarta. The Company has specialized and trained personnel to monitor the above plans and activities, as seen in: 1. Estate Manager of Bangko Decree No. 01 / EM / BNGE / 04/16 dated 4 April 2016 concerning the appointment of Br. Fadli as staff officer in charge of implementing and overseeing the monitoring HCV / HCV in the unit, reporting on the implementation of PIC delivered HCV / HCV to the Unit Head, control units documents related to the management of HCV / HCV unit in 49 of 122

50 coordination with the Regional Officer SPO2. 2. There is a document training attendance lists of High Conservation Values in Sustainable Palm Oil Certification (management and monitoring) which was held on March 18, 2015 in the auditorium of the Jelatang Estate which was attended by 19 workers of Division 4 and 5. Resource Dede M. Natsir Staff Biodiversity & Conservation PT SMART Where a management plan has been created there shall be ongoing Minor monitoring: The status of HCV and RTE species that are affected by plantation or mill operations shall be documented and reported; Outcomes of monitoring shall be fed back into the management plan. There was an Annual High Conservation Value Management Plan of PT. Kresna Duta Agroindo Bangko Estate Division 4 and 5 period in 2016 which contained information about the program, the implementation of the targets, the realization, the location and responsibility. Based on the management plan PT KDA has managed and monitored of the land designated as HCVA and the respective results were documented in the Report of Management and Monitoring High Conservation Values PT. Kresna Duta Agroindo. The report has been submitted to the Head of BKSDA Merangin district with proof of receipt that has been signed and stamped by BKSDA Kab. Merangin. The report of Monitoring High Conservation Value conducted by HCV officer and documented in No. F / SMART / BCOS-EHSD / SADV / 002/020. The report of Monitoring High Conservation Value conducted by HCV officer in October 2015 stated there were people who use the area around the swamp for farming activities. Monitoring report has been followed up by the Estate Manager BNGE by sending a notification to the village chief and has been answered by the head of the village. At the time of the site visit it was found that the land was still planted with vegetables and fruits because based the statement, the community asked for extention until July 2016 to harvest fruits and vegetables that have been planted. Conclusion : Observation NCR No Where HCV set-asides with existing rights of local communities have been Minor identified, there shall be evidence of a negotiated agreement that optimally safeguards both the HCVs and these rights. At the time of observation, it was found areas defined as HCVA, ie HCV 4.1 freshwater swamp which was utilized by the villagers of Jelatang for planting papaya, cassava, banana and vegetable crops. PT. Kresna Duta Agroindo through the Estate Manager of BNGE has given 50 of 122

51 notification to the village chief of Jelatang on October 23, 2015 which contains a notice that there were some villagers of Jelatang who farm in the location palm plantation of PT. KDA and notify them to refrain from farming activities again in those area. The notification letter has been responded by the Village Head of Jelatang with an statement letter signed by: 1. Ms. Suai 2. Samsir 3. Ms. Rahman 4. Ms. Suhar 5. Pardi 6. Nenek Raya 7. Ms. Jamal 8. Mela 9. Sadima 10. Ms. Samsir 11. Diana 12. Saida The letter stated that they have been farming in the plantation area of PT. KDA Jelatang on their own will, and promised to harvest the crop until July 2016, and will not resume farming on these locations after July This letter has been acknowledged by the Traditional Institution of Jelatang Villages and Village Head of Jelatang. Conclusion : Observation No Waste is reduced, recycled, re-used and disposed of in an environmentally and socially responsible manner All waste products and sources of pollution shall be identified and documented. Major The Company has established methods for identifying the source and type of waste and mechanisms for waste management in the Waste Management SOP SOP / SMART / LEMS- EHSD / SADV / I / 002. Identification of the type of waste produced from each of the environmental aspects of operational activity in the POM and estates was set in the Identification and Evaluation of Environmental Aspects conducted reconsideration of each semester. The final review of Identification and Evaluation of Environmental Aspects for the Jelatang mill performed on 30 Des 2015 and Bangko estate was made on January 4, Company should conduct a review of Identification and Evaluation of Environmental Aspects on the sheet of Identification and Evaluation of Environmental Aspects. This is to ensure legal compliance of the operational activities and mitigating the environmental impact resulting from them. Conclusion : Observation NCR No All chemicals and their containers shall be disposed of responsibly. Major Waste disposal procedure has been set in the Waste Management SOP no. SOP / SMART / LEMS-EHSD / SADV / I / 002. Hazardous waste materials such as used agrochemical 51 of 122

52 packagings which were not reused, were stored in Licensed Hazardous Waste Temporary Storage.The Company has obtained permission for the hazardous temporary storage of Jelatang Mill and Bangko Estate with details as follows: 1. Hazardous Waste Temporary Storage Permit no. 28 / TH / 2013, which is still valid until 6 November Hazardous Waste Temporary Storage Permit no. 401 / LH / 2014 for Bangko Estate. Permission was issued by Regent of Merangin on September 15, Handling mechanisms for used agrochemical packaging and chemicals have been regulated in WI of Hazardous Waste Handling and Used Packaging Chemicals, no. IK / SMART / LEMS- EHSD / SADV / 002/001 The trucking for packaging of chemical contaminated was conducted on 4 April 2016 by PT. Primanru Jaya. The transport of waste are equipped with official report and hazardous waste manifest for POM of Jelatang and Bangko Estates. Used agrochemical packaging can be reused for the same activities with reference to the WI of Hazardous Waste Handling and Used Chemicals Packaging no. IK / SMART / LEMS-EHSD / SADV / 002/001. Documentation regarding the reuse of packaging of used agrochemical was recorded in the Minutes of Used Pesticides Packaging Flushing. Company did not have a mechanism in identifying expired chemicals / unused chemical in the laboratory. In laboratory of Jelatang Mill, it was found unused Acetic Acid (brand MERCK) that was not used anymore and NaOH which was expired since April 30, Conclusion : Major NCR No A waste management and disposal plan to avoid or reduce pollution shall be Minor documented and implemented. Company has established a program and evaluation of waste management for semester II Waste management program included the management of liquid waste, solid waste, hazardous waste material, emissions, domestic waste, domestic waste water, and waste used goods. Liquid waste was processed in WWTP to then be utilized as land application. Monitoring of waste water which utilized was conducted monthly. Company in cooperation with the Environmental Laboratory of Jambi Province conducted monitor the quality of wastewater. Based on the test results in October March 2016 showed the BOD and PH value meets the requirement the standards required in Kep Men LH 29, Monitoring of air emissions was conducted every 6 months. Monitoring included emission from generators, emission from boiler and ambient air, while monitoring of vehicle emission was conducted annualy. 52 of 122

53 Ambient air testing period semester II 2015 was conducted on November 28 to December 1, Company cooperated with laboratory of environment BLHD Jambi Province. Sampling was carried out at the location of loading ramp Jelatang Mill, Jelatang village, and near the mosque. Testing parameters include CO, SO 2, NO 2, TSP, O 3, HC, particulates, and Pb. The test results below the standards set out in PP R The results of emission testing of boilers and generators has been described in detail on the criteria of Solid waste include the operations of POM empty bunch, fiber, and shells. Fiber and shells have been used as fuel for the boiler. While the empty bunch mulch used as fertilizer to be applied to oil palm plantations. The company has transported hazardous waste from the temporary storage in Bangko estate and Jelatang Mill on April 4, The transportation process carried out by PT. Primanru Jaya. The hazardous waste transported from Jelatang Mill include toxic contaminated packaging, used oil, used filters, and the used rags. Hazardous waste transported from Bangko estate include contaminated packaging, fabric cotton waste scrap, used motor oil, and used filters. Manifest of hazardous waste has been provided for each type of hazardous waste and transported from each unit. As overall, the hazardous waste was transported in accordance with a storage time of 90 days as permitted under the Temporary Storage Permit. Incoming and outgoing of hazardous waste has been adequately recorded in the log book of temporary storage. Hazardous waste management report was conducted every 3 months and submitted to the relevant agencies. The report of third quarter, fourth quarter 2015 and first quarter of 2016 has been submitted to BLHD Kab. Merangin, BLHD Prov. Jambi, Sumatra Region PPE, and the Ministry of Environment and Forestry. Domestic waste from latrines activities are managed in a septic tank, domestic waste water from bathing and washing flowed into the ditch. The garbage was disposed in landfill and owned by the government. The Company has committed to not to do burning or rubbish heap. In the Waste Management SOP no. SOP / SMART / LEMS-EHSD / SADV / I / 002 has established a mechanism of waste disposal without burning. Medical waste management have not been recorded in a hazardous waste logbook and has not been reported in the quarterly report B3 waste management. The Company has managed medical waste, but has not recorded and reported of the medical waste management Conclusion : Observation NCR No Efficiency of fossil fuel use and the use of renewable energy is optimized A plan for improving efficiency of the use of fossil fuels and to optimise Minor renewable energy shall be in place and monitored. The company carried out the utilization of solid waste generated from POM (shells and fiber) as boiler fuel to operate the turbine. The use of diesel fuel for the generator is only use for starting the turbine. From Data of the use of solar for FFB management in 2015, It was found the number of diesel consumption of 9.78 liters / tonne of FFB. The results of monitoring use of shell and fiber in 2015 is required by 0.18 tonnes / tonne of FFB. Total consumption of biomass fuel is equivalent to the 53 of 122

54 use of diesel by 622, liters. Energy is produced from biomass fuel use for 2015 amounted to kcal / kg FFB. Currently, the Company has no plan for the use of biogas. 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 There shall be no land preparation by burning, other than in specific situations Major as identified in the Guidelines for the Implementation of the ASEAN Policy on Zero Burning 2003, or comparable guidelines in other regions. The company already has a Circular letter No.071 / SMD OPS / IX / 2007 about the prohibition of land opening by burning. It set on September 4, The Company also has a social and environmental policies GAR about no burning area for land opening, replanting or other expansion Where fire has been used for preparing land for replanting, there shall be evidence of prior approval of the controlled burning as specified in Guidelines Minor for the Implementation of the ASEAN Policy on Zero Burning 2003, or comparable guidelines in other regions. The Company has not conducted replanting. 5.6 Plans to reduce pollution and emissions, including greenhouse gases, are developed, implemented, and monitored An assessment of all polluting activities shall be conducted, including gaseous Major emissions, particulate/soot emissions and effluent (see Criterion 4.4 Control of emissions and waste generated from operating activities has refered to the matrix RKL / RPL / the environmental documents and waste management program. Monitoring of air emissions include emission boilers, generators, and the emission of an automobile. Emission measurement for second semester 2015 was conducted on 27 November to 1 December 2015 by the environmental laboratory of BLH Jambi (KAN Accreditation LP 231-IDN). The test results consist as follows: 1. Measurement of boiler emissions: Parameter included NO2, SO2, NH3, particulates, HCl, Cl2, HF, opacity, and flow rate. The test results met with standards and set in Per-07 / MENLH / Emission measurement from generators 1 and 2. The parameters included CO, NO2, SO2, 54 of 122

55 particulate and opacity. The test results met with standards and set in Per-21 / MENLH / Automobile emission measurement was conducted on 10 April 2015 against the sources of emissions from the minibus, dump trucks, and heavy equipment in the Bangko estates and Jelatang POM. The test results met the standards as set in Per-05 / MENLH / As for the testing period in 2016 is still in the testing process. Based on the calculation of GHG emissions that have been conducted using Palm GHG calculator version for the period July June The result of GHG emissions calculation was 1.29 tco2 e/t CPO and 1.29 tco2 e/t PK An assessment of all polluting activities shall be conducted, including gaseous Major emissions, particulate/soot emissions and effluent (see Criterion 4.4 GHG mitigation program in 2016 has been set for the Jelatang Mill, includes a program of GHG emission generated from fossil fuel use, electricity use and water use. GHG mitigation program of Bangko estate in 2016 includes a program of GHG emission generated from the use of fertilizers, pesticides, and electricity usage. The program covered identification of sources of GHG emissions, activity type, activity schedules, PIC, and target activities. The target should be set to be more measurable to facilitate monitoring of the achievements of the program. Conclusion : Observation NCR No A monitoring system shall be in place, with regular reporting on progress for Minor these significant pollutants and emissions from estate and mill operations, using appropriate tools. Monitoring of air emissions and waste generated from operating activities recorded in the report of RKL / RPL. Reporting RKL / RPL was conducted once for every 6 months. Report of second semester 2015 in Jelatang POM and Bango estate have been submitted to the District BLHD Merangin, BLHD Jambi Province, Sumatra Region PPE, and the Ministry of Environment. GHG accounting period July June 2015 has been submitted to RSPO by on August 5, RESPONSIBLE CONSIDERATION OF EMPLOYEES AND OF INDIVIDUALS AND COMMUNITIES AFFECTED BY GROWERS AND MILLS 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 55 of 122

56 continuous improvement A social impact assessment (SIA) including records of meetings shall be Major documented. The company has been carrying out social impact assessment in Contents of SIA studies have included demographic, economic, social, cultural and public health There shall be evidence that the assessment has been done with the Major participation of affected parties. "Implementation Report and Review of social impact management of PT. KDA "period October 2014 to September 2015 has been conducted by participation of affected parties as documented on October Plans for avoidance or mitigation of negative impacts and promotion of the positive ones, and monitoring of impacts identified, shall be developed in Major consultation with the affected parties, documented and timetabled, including responsibilities for implementation. Impact management plan documented in Chapter V SIA studies in It contained a positive impact management and documented in Table 5.2. The report highlighted the positive impact analysis. Evidence of management was the majority of field workers was recruited from the surrounding villages (Langling, Bukit Bungkul, Pinang Merah, Karang Birahi, etc.). In the economic field, it can be seen that use 12 local contractors in 2015 and up to April 2016 there were 9 local contractors engaged in transporting TBS, shuttle workforce and mowning The plans shall be reviewed as a minimum once every two years and updated as necessary, in those cases where the review has concluded that changes should be made to current practices. There shall be evidence that the review includes the participation of affected parties. Minor Results of realization of social impact management is evaluated annually. Social impact management October 2014 to September 2015 is documented in the "Implementation Report and Review of social impact management PT. KDA " Particular attention shall be paid to the impacts of smallholder schemes (where the plantation includes such a scheme). Minor Based on Evaluation of Social Impact Assessment document in 2013 concerning Community estates, the Company created community estates through a partnership with migrants and indigenous of Malays. Based on planting year data, the oldest plant in the smallholder were 56 of 122

57 planted in There are open and transparent methods for communication and consultation between growers and/or mills, local communities and other affected or interested parties Consultation and communication procedures shall be documented. Major Company has SOP Communication and Consultation (SOP / SMART / UMUM / SADV / I / 004). In the SOP was already contained the hierarchy responsible person for responding to the provision of information to the relevant parties A management official responsible for these issues shall be nominated. Minor Estate Manager is responsible in consultation and communication to the relevant stakeholders, especially with regard to social aspects A list of stakeholders, records of all communication, including confirmation of receipt and that efforts are made to ensure understanding by affected parties, Minor and records of actions taken in response to input from stakeholders, shall be maintained. The Company has the latest list of stakeholders in Requests for information and provision of information from relevant stakeholders have been documented in books of feedback of information from stakeholders. The example was the participation of company in the survey of gross domestic product conducted by the Central Bureau of Statistics of Merangin on October 15, 2015, notice of BPJS dated October 6, 2015, concerning the implementation of BPJS employment and pension program and responded by giving a report to the manpower Office on October 6, There is a mutually agreed and documented system for dealing with complaints and grievances, which is implemented and accepted by all parties The system, open to all affected parties, shall resolve disputes in an effective, Major timely and appropriate manner, ensuring anonymity of complainants and whistle-blowers, where requested. The Company has a mechanism for complaints and grievances of workers in "SOP / NP / SMART / XII / MCAR 001. This procedure includes a guarantee of confidentiality of the complainant s. 57 of 122

58 6.3.2 Documentation of both the process by which a dispute was resolved and the outcome shall be available. Major The Company has kept a record and record of complaints and dissatisfaction with the response to the entire estates. 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 A procedure for identifying legal, customary or user rights, and a procedure for Major identifying people entitled to compensation, shall be in place. Identification of customary land (communal) and legal land is regulated in clause 7.7 of Participatory Mapping Guide A procedure for calculating and distributing fair compensation (monetary or otherwise) shall be established and implemented, monitored and evaluated in a Minor participatory way, and corrective actions taken as a result of this evaluation. This procedure shall take into account: gender differences in the power to claim rights, ownership and access to land; differences of transmigrants and longestablished communities; and differences in ethnic groups proof of legal versus communal ownership of land. Company has SOP of land compensation no SOP / NPP / SMART / VII / D & L002. This procedure includes the compensation for customary rights in item 6.2. In the SOP has been set up procedures of compensation which are transparent and legal and also involve agencies / local authorities. There was no claims and compensation process in the past year The process and outcome of any negotiated agreements and compensation Major claims shall be documented, with evidence of the participation of affected parties, and made publicly available. There was no claims and compensation in the last year. 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 58 of 122

59 6.5.1 Documentation of pay and conditions shall be available. Major There was a minimum wage Jambi Province in 2016 based on the Jambi Governor Decree no. 460 / KEP.GUB / DISSOSNAKERTRANS on 30 October The minimum wage is Rp million, -. However, there was a mutual agreement between the BKS PPS and the Board area Federation of Unions of Agricultural and Plantation Workers Union Indonesia, province of Jambi dated March 8, 2016 which establishes the lowest wage of Rp million, - per month and retroactive date of January 1, There was a decision letter from the company stating that, The Company adapts to the Governor's decision, then the daily wage for casual worker (BHL) become Rp. 77,480/ day Labour laws, union agreements or direct contracts of employment detailing payments and conditions of employment (e.g. working hours, deductions, Major overtime, sickness, holiday entitlement, maternity leave, reasons for dismissal, period of notice, etc.) shall be available in the languages understood by the workers or explained carefully to them by a management official. There were mutual contract agrement (PKB) of between Cooperation Agency Sumatera Plantations Company (BKS-PPS) with the Central Board of the Federation of Unions of Agricultural and Plantation Workers Union of Indonesia (PP.FSP.PP-SPSI) In Article VI set about the piece rate of work on Article 2 states that workers who work for less than 7 hours a day or completed less than usual piece rate will receive full pay as much as the daily wage. For non-permanent employees is set on casual employment agreement. For example, casual labor agreement no. 02 / BNGE / PKHL / II / These agreements have been known by the secretary of the Department of Labor Drs. Usman There was memo of RC no. SW-251/VPA-1/03/2015 dated March 9, 2015, concerning premiums harvest / piece rate In section 2 concerning fruit picking item 2.2, concerning casual workers, stated that fruit pickers were paid only paid by the result/volume of harvesting, and no fixed wages. This is not in accordance with the above mutual agreement between Cooperation Agency Sumatera Plantations Company (BKS-PPS) with the Central Board of the Federation of Unions of Agricultural and Plantation Workers Union of Indonesia (PP.FSP.PP- SPSI) of Article VI, paragraph 2, as explained in the above paragraph As corrective action, company made addendum to regulation of SE 04/03 / VPA / 2015 on part 2 about fruit pickers in point 2.2 which statatement was changed to be "wage determination of the fruit pickers refers to the PKB BKS-PPS years 2015/2017 Article VI. This intention of company in form of changing regulation is considered adequate, however the Implementation of this regulation will be seen on the next surveillance asssesment, therefore the status of the finding downgraded as observation. Conclusion : Observation NCR No Growers and millers shall provide adequate housing, water supplies, medical, Minor educational and welfare amenities to national standards or above, where no 59 of 122

60 such public facilities are available or accessible. The company has provided facilities for employees such as home residents, clinics, clean water wells, houses of worship such as mosques, sports facilities, daycare, school and etc Growers and millers shall make demonstrable efforts to monitor and improve Minor workers access to adequate, sufficient and affordable food. The Estate located near to the village that is 20 minutes by riding motorbike to Bangko city so that the access to food is quite easy. 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 A published statement in local languages recognising freedom of association Major shall be available. Company already had a policy on the recognition of freedom of association contained in Circular letter No. 218 / CEO-SE / 11/2010 on freedom of association in the organization of workers / laborers. SP Members Langling is about 198. The status of workers are permanent and contract workers until March Minutes of meetings with main trade unions or workers representatives shall be Minor documented. Union already conducted a routine meeting on March 28, 2016 while the agenda discussed was the issue of workers, which was attended by members of the union as much as 34 Members. 6.7 Children are not employed or exploited There shall be documentary evidence that minimum age requirements are met. major The Company has a policy in the recruitment process as stipulated in Circular Letter No. 002 / SE-HRDV / 03/09 issued on March 31, 2009 by HR Director containing the minimum age of 18 years old. The company has the documentation related employee data. Both units Mill and the Estate had 60 of 122

61 Recap Employee Data that contain : NIK, Employee Name, Gender, Religion, Place & Date. Birth, Currently Address, Tribe, date (birth, Start Work, Appointment SKU), Age Signing, Employment status, Group, Wages. Almost 100% of the workforce in each Unit, more than 18 years old. Employment data period of April 2016, can be reported as follows: - In Unit BNGE, youngest labor when start to work is on behalf of Budianto (NIK E0031), the status of casual worker (BHL). Born on June 10, 1996 and started working on July 01, 2015 or 18 years and 7 months old. Working as a collector piece rate. - In Unit JLTM, youngest labor when start to work is on behalf Dewi Sri Pratami (NIK 15012), the status of contract worker (PKWT). Born on June 13, 1996 and started working on August 26, 2015 or 19 years and 2 months old. Working as Working as a clerk of scales. 6.8 Any form of discrimination based on race, caste, national origin, religion, disability, gender, sexual orientation, union membership, political affiliation, or age, is prohibited A publicly available equal opportunities policy including identification of Major relevant/affected groups in the local environment shall be documented. The Company has issued a number of policies related to equality in getting a chance to work, i.e: - Circular Letter to all Unit Head, from the CEO PSM 1 No. 146 / CEO1-SE / 04/2010 dated 13 April 2010 about implementation of Industrial Relations Unit. The contents of circulars is: "in order to realize harmonious dynamic and equitable industrial relations, so every operational unit of industrial relations implement the work regardless of race, religion, race, and gender in all types of field work." - Circular Letter to all Unit Head PSM 1 from CEO 1 with letter No. 266 / CEO 1 / HR PSM dated October 29, 2015 complement the Circular No. 146 / CEO1-SE / 04/2010 dated 13 April 2010 on the same subject, i.e the Implementation of Industrial Relations Unit. The contents of the circular is "in order to realize harmonious dynamic and equitable industrial relations, so every operational unit embodiment of industrial relations without distinction of race, caste, national origin, religion, disability (physical condition), gender (sex), sexual orientation, union membership, political affiliation, and age. " Evidence shall be provided that employees and groups including local Major communities, women, and migrant workers have not been discriminated against. There were some evidences show that the Company did not discriminate, i.e the composition of ethnics, religious, and gender in the company. Although, the female workers were less than male ones, it was due to the more masculine type works at the Unit Mill. Following the employment data views of gender, religion, and ethnic diversity that shows: 61 of 122

62 unit BNGE Employees SKU ; Number of male labor force was 89% and 11% of women workers. The diversity of religions were : Islam as much as 87% and 13% Christian. As seen from the origin of the tribe, consisting of : Java, 47%, 29% Malays, 17% Batak, Minangkabau 4%, Sunda 2%, and Aceh 1%. unit JLTM Employees SKU; Number of male labor force as much as 98%, while the women as much as 2%. viewed from religion : Islam about 89% and 11% Christian. The origin of the tribes, most were Jambi 50%, Javanese 17%; Batak 13%, Malay 13%, Kerinci 2%, Minangkabau 2% and Palembang, Banjar, Sunda each 1% respectively It shall be demonstrated that recruitment selection, hiring and promotion are Minor based on skills, capabilities, qualities, and medical fitness necessary for the jobs available. The selection, recruitment and promotions throughout the Group PT. SMART Tbk is based on the following policies : - Employment Procurement Policy (HR A , valid since Septemeber 01, 2005 concerning General Provisions. On Clause 2 states that the organization is in principle to employ individuals who have the appropriate competence requirements regardless race, ethnicity and religion. - The Company also has a related policy of General Terms of Promotion for SKU Monthly Employees (No. HRD D ) valid since September 01, In this policy clearly stipulated that the promotion of employees is based on several thing s: the vacant position, the company's needs, skills, work performance, and certification / training. 6.9 There is no harassment or abuse in the work place, and reproductive rights are protected A policy to prevent sexual and all other forms of harassment and violence shall Major be implemented and communicated to all levels of the workforce. The Company has a policy related to the prevention of all forms of abuse and sexual violence, which stated in a circular to all Unit Head in PSM1 of CEO1 no. 096 / CEO / 9/2014 th. 02/09/2014 regarding Prohibition of Sexual Harassment. The point of the policy are: (1). The Company is committed that all staff and employees should enjoy the environment that is free from any form of discrimination, including sexual harassment. The company will implement policies that will treat all acts of sexual harassment as seriously as any other behavior that violates company rules, PKB and / or regulations. Sanctions may be disciplinary sanctions, layoffs and applicable punishment. The responsibility of all leaders to make sure the environment is free of potential sexual harassment. All the staff and employees must understand the contents of the policy and stick with it. 62 of 122

63 (2). Anyone should not retaliate or discriminate against person who filed a complaint of sexual harassment. Anyone who retaliated can be got disciplinary sanctions, layoffs and law sanction as applicable legislation. Each complaint will be taken seriously, etc. " In JLTM Unit, has formed a Gender Structure Committee Jelatang Mill. Comprised of protector, builder. Chairman (Anni Rusliani), Co-chairman, secretary, treasurer, members of 6 people and companion women workers JLTM staff. BNGE Unit already established Gender Structure Committee, its membership consisted of: Protector (Estate Manager), Builder (Staff BNGE / PUK SPSI), Chairman (Samaria) Cochairman, secretary, treasurer, members of 7 people and companion women workers and LNGM & BNGE staff. Duties and responsibilities of the Chairman of the Gender Committee has been set in the appointment of the Chairman SK Gender Comiite which includes: 1. Lead organization Gender Committee and work program 2. To disseminate the understanding and prevention of environmental sexually in Company 3. Ensure the respect and protection of reproduction for female employees. 4. assistance and counseling to victims of sexual abuse or home violence 5. Report the performance and evaluation of the annual work program to the unit manager A policy to protect the reproductive rights of all, especially of women, shall be Major implemented and communicated to all levels of the workforce. Policies to protect the reproductive rights of all workers, especially women, are in the form: - PKB Article IV of the Working Time item 6 of Female Workers, stipulated that employers are prohibited from employing pregnant women and working between 23:00 until 07:00 hours if it is harm themselves. There was evidence that the Company provides policies that protect the reproductive rights of women. There was a note or list Actual H1 and H2 (Pregnancy or breastfeeding) for employees in each unit. If a woman worker are menstruation, they will not be allowed to work by filled the form Recommendation Letter and to be provided by the clinic after being declared positive diagnosis' dyspepsia H1. Permission is given between 1-2 days. Other evidence, such as the prohibition of the women workers who are pregnant / lactating women to work as sprayers. It is intended to protect the baby and the mother of the potential exposure to toxic pesticides. 63 of 122

64 The company also provides TPA (daycare) if the women workers go to work in the estate or Mill A specific grievance mechanism which respects anonymity and protects Minor complainants where requested shall be established, implemented, and communicated to all levels of the workforce. The company has procedures governing complaints and grievances of workers, i.e SOP Complaints Handling and dissatisfaction (Grievance) (SOP / SMART / SIGS-CSRD / SADV / I / 003, rev.00 Published July 1, 2014). The procedure aims to deal with any complaints and dissatisfaction both internal and external stakeholders. The responsible parties in the settlement is gradually from KTU, Unit Head, Related department, RC, Vice President of Agronomy, up to CEO. Company established a Grievance Committee and Social Impact Assessment & Grievance Section (SIGS). Grievance Committee is responsible for deciding all issues with complaints and grievances brought to the Grievance Committee. Implementation of this procedure is recorded in the Registration Form Complaints and dissatisfaction. Based on the data obtained from the recording of complaints and dissatisfaction book there are no complaints from the internal and external Growers and mills deal fairly and transparently with smallholders and other local businesses Current and past prices paid for Fresh Fruit Bunches (FFB) shall be publicly Minor available. The Company already has a list of price used for the last month and this month. The price list issued by the Plantation Office (DISBUN) of Jambi Province period of May 13, 2016 until May 19, 2016 by Year Planted. Meanwhile, the company also issued a list of price of FFB by price from Disbun to facilitate payment according to year of Planting. FFB Price List issued by the company on May 4, 2016 to JLTM and LNGM about Rp / Kg. List of price of Disbun Jambi for the period 22 April 2016 until 28 April 2016 are already available at a price range of Rp.1, / Kg up to 1, / Kg based on the year of planting. While the price determined by the Company amounted Rp / Kg Evidence shall be available that growers/millers have explained FFB pricing, Major and pricing mechanisms for FFB and inputs/services shall be documented (where these are under the control of the mill or plantation). Pricing FFB was set in the cooperation agreement of sale and purchase FFB of Smallholder which has been mutually agreed. Pricing is determined by the Department of Plantation and set a single price by PT KDA to facilitate payment, this was because the FFB price list of Disbun was based on planting year and made it difficult for company to identify the planting year of the FFB. 64 of 122

65 Evidence shall be available that all parties understand the contractual Minor agreements they enter into, and that contracts are fair, legal and transparent. There was evidence that KUD (collectors) understand the contractual agreements as outlined in SPK that has been signed between the company with the KUD such as SPK No.PNMP / PLASMA / 06/15/ Agreed payments shall be made in a timely manner. Minor Payments are made depending on demand of Cooperative (Collector) because it is established in the employment agreement for the payment of either daily or weekly. Payments made using the Giro so that payments are always made on time Growers and millers contribute to local sustainable development wherever appropriate Contributions to local development that are based on the results of consultation Minor with local communities shall be demonstrated. The company has Agreement Letter with local contractors. Based on local Agreement Letter recapitulation, Bangko Estate has contracts with 9 local contractors in 2016 and 12 local contractors in Where there are scheme smallholders, there shall be evidence that efforts Minor and/or resources have been allocated to improve smallholder productivity. Company already empowered smallholders especially by providing training to them regarding plant upkeeping, manuring and pest control No form of forced or trafficked labour are used There shall be evidence that no forms of forced or trafficked labour are used. Major Based on record of contract and employment data and site visits, there were no migrant workers in this Company Where applicable, it shall be demonstrated that no contract substitution has Minor occurred. 65 of 122

66 Based on record of contract and employment data and site visits, there were no migrant workers in this Company Where temporary or migrant workers are employed, a special labour policy and Major procedures shall be established and implemented. Based on record of contract and employment data and site visits, there were no migrant workers in this Company 6.13 Growers and millers respect human rights A policy to respect human rights shall be documented and communicated to all Major levels of the workforce and operations (see Criteria 1.2 and 2.1). Respect for human rights contained in social policy and the role of communities in point 6, signed by the President on November 10, There was evidence of socilization of human rights policy on January 4, 2016 and April 6, RESPONSIBLE DEVELOPMENT OF NEW PLANTINGS 7.3 New planting since November 2005, have not replaced primary forest or any area required to maintain or enhance one or more High Conservation Value There was no land opening or planting or land expansion over the last 20 year. Planting was conducted before November 2005, Based on data of palnting year provided by Company as follows: No Planting year Area , , , ,75 Total 1065,16 There was no land opening or planting or land expansion over the last year. Planting was conducted before November of 122

67 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 action plan for continual improvement shall be implemented, based on a consideration of the main social and environmental impacts and opportunities Major of the grower/mill, and shall include a range of Indicators covered by these Principles and Criteria. As a minimum, these shall include, but are not necessarily be limited to: Reduction in use of pesticides(criterion 4.6); Environmental impacts (Criteria 4.3, 5.1 and 5.2); Waste reduction (Criterion 5.3); Pollution and greenhouse gas (GHG) emissions (Criteria 5.6 and 7.8); Social impacts (Criterion 6.1); Optimising the yield of the supply base. The Company has the Internal Audit SOP (SOP / SMART / UMUM / SADVI / 009 for the scope of Sustainability. In the procedure stipulated Internal audit carried out at least 1 time a year. Companies are already doing internal audits on 2-6 February 2016 which includes Langling Mill, Jelatang Mill and Bangko Estate. Internal audit team consists of five people from the unit and Sustainability divison, Jakarta headquarters. Standard used was the RSPO P & C, There were seven criteria related to findings published 1.1.2; 1.3.1; 2.1.1; 4.7.5; 5.3.3; 6.2 and which were already been responded accordingly and closed. C.2.2 RSPO Supply Chain Checklist Module E : Mill Mass Balance Modul PT.KRESNA DUTA AGROINDO JELATANG MILL RSPO SUPPLY CHAIN CHECKLIST MODUL E CPO MILLS MASS BALANCE MODUL PT. Kresna Duta Agroindo Jelatang Mill (JLTM) 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. Certified FFB sources origin from own estate : Bangko Estate FFB sources from smallholder and non certified FFB : PT. Satya Kisma Usaha Bukit Bungkul KKPA, Bangko plasma 67 of 122

68 PT. Citra Sawit Harum Pamenang Plasma Persada Nusa Kreasi PT. Sawit Harum Makmur Tiga Serumpun (TSRA) KT Pamenang E.3.1 a) The Company has RSPO Supply chain product mass balance models that are documented in Reporting RSPO Certified Product PT.KDA -JLTM / SOP / 26 and Supply Chain Product RSPO Mass Balance Model PT.KDA - JLTM / SOP / 24 b) The person in charge who has authority over the supply chain is identified. : 1. Leonard P. Simangunsong, as Mill Unit Head JLTM Management Representative SCCS. Appoinment letter No. 017/PC-LNGM/XI/2015 dated 01 Januari Indra B. Matondang, Head division of Tracebility Officer by letter no. 04/FM- JLTM/VIII/2013 dated 01 Agustus 2015 The person are knowledgeable and competent in implementing the supply chain procedures: - Security - Weighbridge clerk - Grading staff - Laboratory staff - Dispatcher - Document controller - Tracebility officer - MR SCCS Evidence of training of employees on supply chain are available - Training was conducted by sustainability team of 12 personnel in the Langling Mill dated 23 April The training material was in accordance wiht the standard of SCCS version In the year 2016 has also been done re-socializing SCCS for module D and E in Jelatang Mill on February 5, E.3.2 The FFB receipt procedure stipulated in RSPO Supply chain product mass balance models PT.KDA-JLTM / SOP / 24, item The record showed that the : 68 of 122

69 - Total certified FFB, CPO, and PK in year 2015 as follows: CPO : 1, MT PK : MT FFB : 5, MT - Total projected FFB, CPO and PK in year 2016 as follows : CPO : 1, MT PK : MT FFB : 6, MT E.4.1 FFB receiption was distinguished between FFB from main estate by code 4 digits and FFB from small holder by 4-letter code Based on the daily production data in March 2016, FFB non certified receipt has been properly recorded as FFB non certified E.4.2 Projected overproduction is set at 6.6 mass balance models procedure PT.KDA-JLTM / SOP / 24, item 6.6 E.5.1 a) The sustained palm oil company scheme that apply are RSPO SCCS and ISCC. The company has a centralized computerized system to Prevent mix-up between Reviews These scheme. The Company applies a separate accounting between RSPO SCCS and ISCC. Spending on ISCC considered as spending on non SCSS in RSPO SCCS document. During the year 2015 until April 2016 there are no products RSPO SCCS expense claims. Record of the implementation of SCCS are "surat pengantar buah" (delivery letter of FFB), tiket timbang (FFB weigh bridge card), Bukti timbang CPO (CPO weight brigde), CPO delivery Note, the daily mill reports, monthly reports, 3 monthly report and annual report. Based on data from 2015 and from January to March 2016 there was no shipments of CPO SCCS. b) The ratio of total CPO produced from the total FFB processing based on the data in 2015 amounted to 19.48%, while for CPO RSPO SCCS of FFB RSPO certified amounted to 19.69%. c) In the year 2015 until April 2016, based on data from bookkeeping, company has never issued / transmit RSPO certified CPO and PK. E.6.1 The delivery of CPO mass balance was regulated in the procedure of mass balance point 6.7 E.6.2 The Company does not outsource the processing of palm kernel (PK) C.2.3 Identified Non-Conformances and Noteworthy Positive Components Identified Non Conformance and obsevation is detailed in the appendix II of this report while the 69 of 122

70 detail of noteworthy positive component can be seen in the description of P&C and RSPO SCC module E pages In overall the positive sides of the implementation of RSPO in the company are the sistematic documentation and the using of computer application for SCCS which proved as effective methods to prevent miscalculation. The involvement certification Department is also important in assisting the company either in implementing RSPO or during the RSPO audit. 70 of 122

71 C.3 Non Conformity Register Previous Surveillance Assesment Non Conformities and Observation (Surveillance 1) SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES * Please send your response(s) to this Non Conformitie(s) + obs also in softcopy Non Conformity / Observation Report Organization Audit (TSS, WS, AMR, RB, NR) No. No. Standard. Audit Date : RSPO (1) RSPO (Surveillance 1) ATL / Auditor : No. Categor y Claus e St d Audi tor Description Root Cause Investigation* Corrective Action & Evidence* Audit Team Review (1) (2) (3) (4) (5) (6) (7) (8) (9) 1 Major TSS Recorded in the log The company Corrective Action: Closed book, dated January 9, already has a book 2014, the request of recording of all Circular has been In the surveillance the board of Al- incoming mail prepared by the audit in 2016 Hidayah Mosque is "communication Regional Controller based on data loaning tents for events book consultation" policy regarding from the Bangko Mawlid. In the letter in which there are making a letter of STAI assistance already disposition and records of notes on response to the request dated 02 the request is the demand and its request and February 2016, of approved. Not found answer, but the subsequently SD 118 Karang any provision of a reply auditor is hard to confirmed every Birahi dated 22 letter associated with track that the incoming mail to get February 2016 has the request. answer of the answers been addressed by company has to or providing fund of Sampling letter No. not to the sender Rp 300,000, - and 141/146 / KD-TL / of 122

72 dated May 6, 2015 of the Village Head Simpang Merangin Limbur associated with job information requests. The company has already replied to the letter number 0108 / UH LNGM C / KD / V / 2014 dated May 12, 2015, saying that the job in the Harvest and diluents composing available. requests Evidance: 1. Scan Circular RC No. 05 / RC-Jambi 1/08/2015 regarding the affirmation of the whole unit for demand response communication and consultation in accordance with SOP Implementation of communication and consultation Rp , - 2. Documentation request response process Meranti village head 72 of 122

73 At the time of the meeting with the stakeholders, the information obtained from the head of the village of Mampun Baru that proposal and submitted job applications does not always get a response in accordance with ketntuan specified in the SOP. The third of the above information can not be ascertained implementation of SOP related to the stated period of response no later than four weeks of receiving the information request. At the time of certification audit, it has been published as a minor findings and in this case the corrective actions previously inadequate so the 73 of 122

74 findings are categorized into Major non conformity. 2 Obs TSS The company should ensure the completeness of all the stakeholders list because it is not found in the list of cooperatives and plasma stakeholders. Stakeholder list should certainly be reviewed periodically to ensure updates and defined mechanisms and personnel who are responsible for making the stakeholder list. Has a list of stakeholders but in it there is a name yet caretaker Farmers and cooperatives from the garden BBNA, PMNP and KUJP, whereas BBNA gardens, PMNP and KUJP is a supplier of fruit to LNGM Corrective Action: Has made the list of new stakeholders as at August 15, 2015 in which there are a list of stakeholders from Plasma (KUD / KT / Vendor TBS) Evidance: List of stakeholders Closed The company has a list of stakeholders that includes the latest data 2016 FFB vendor 74 of 122

75 3 Obs TSS The Company already has a long-term plan from 2010 to 2020 which includes 3 mill under which KDA KDA- Langling, Jelatang and KDA KDA Pelakar. In the plan already contains data trend FFB production quantities of the own estate, Toll-in / iitip though and FFB of plasma and outer fruit. It also includes production of CPO, PK, forecast price for CPO and PK, Esrtate cost, Mill cost, KCP Kernel Crushing Plant (at Pelakar Mill) cost and net profit / loss. The plan has not loaded Yields, OE / KER, social and environmentallymanagement plan for smallholders The company has had a long-term plan but has not been able to explain some aspects related to "Yield, OER / KER, the planning of social aspects and the planning of environmental aspects " Corrective Action: In the Long Term Plan already contained Yield aspect, OER / KER and related longterm plans related to the "social and environmental" contained in the following areas / activities of LH OH (Overhead) Evidance: Data Profitability Observation. Ensuring the implementation at the next Surveillance. 75 of 122

76 4 Obs TSS Based on SIA assessment in 2013, social impact monitoring plan has been made. It was included reduction of cooperatives capacity due to the lack of guidance to members so that community sold the FFB to other vendors Regular meeting with cooperative management and direct monitoring has been established in program per semester. The program should be planned and realized (per semester) to be sure the entire plasma was observed and the evaluation was conducted in a comprehensive manner so as to lessen the negative impact the appropriate In SIA report 2013, there is social impact declining capacity of the cooperative, however development programme of cooperative has not been included into SIA monitoring report. Corrective Action: 1. Making smallholder asisten plan for a year and actualization of the programme. 2. The report is sent to SIA Jakarta to be incorporated with monitoring report. Evidence : Smallholder guiding plan and Smallholder guding realization, minutes, and attendance list. Close, has been answered in the document "Implementation Report and Review of social impact management of PT. KDA "period October 2014 to September 2015 Chapter IV regarding management review 76 of 122

77 identification of the SIA report 5 Obs TSS Sampling against Tagor Sihite, foreman positions 1 div.5 with SKU status. Payment of the minimum wage salaries Rp. USD 1,741, and overtime premiums. 1,632,881 and the payment cutoff BPJS BPJS Depnaker and Health, cooperative dues, pieces of SPS. It has been shown payslips and details of employee overtime on behalf of Tagor Sihite and Zainuddin but the auditor asked for details of the wage salary in accordance with the system Corrective Action: In a related payroll system has a complete system of payment of salaries and overtime for each employee Evidance: Salary slip Closed : Based on overtime data from several drivers, calculation and payment of overtime are in accordance Sampling of workers on behalf of the estate Bangko Zainuddin, foreman positions, status SKU's presence in July Already, there are salary payment slip containing the minimum wage of Rp. 1,755,750.00, a premium of Rp. 1,504,339.00, the payment BPJS BPJS 77 of 122

78 Department of Labour and Health, cooperative dues, pieces of SPS. The company should create a system which can ensure delivery in accordance with the provisions of the premium overtime wage set by the government where the first hour is 150% and the second clock as much as 200% of the wage per hour. 6 Minor TSS/ NR The composition of trade union officials are out of office and the chairman has resigned so that the composition of the board has not been formed. The latest data are the Notice no. 001 / DPC- SPSI / VIII / 2015 concerning the election At the time of the audit process was there a change of leadership and there has been no SPSI new management arrangement. There is no meeting of the Company with Corrective Action: Request a copy of the structure of the new trade union officials evidence: structure SPSI Observation. Ensuring the implementation at the next Surveillance. 78 of 122

79 PUK SP.PP.FSPSI in Bangko estate. SPSI Board members do not have a copy of the minutes of the meeting the results of a meeting between the board and management. 7 Major RSPO Cert Syste m: Timeb ound 1 TSS The Company has full smallholder Manage (Batang Gading KKPA), and independent plasma consisting of Bangko plasma. The extent of 4812 Ha, plasma Pamenang: 6290 Ha, Bukit Bungkul: 4676 Ha, Kubang Oku Ujo Plasma: 2960 Ha. All cooperatives over the status of an independent and fully managed provide an affidavit in January 2015 refused to RSPO We do not accept all of this. Since the Company has included BDGA in timebound and the company will try to make BGDA will be certified and efforts to put BGDA in timebound Minor. The results of the discussion and the company's Technical Director RSPO Sucofindo decided findings into categories Minor, the company was given the opportunity in the first year of this makes the small holders program to be certified. In the time bound, implemented on January 31, 2016, 79 of 122

80 certified. Timebound for 2015 associated with the Bangko plasma, Bukit Bungkul Plasma, Plasma and Kubang Pamenang Oku Plasma been changed from 2015 to associated with the rejection of all the cooperative. In this case the company can not be sure that all associated smallholders and outgrowers can be certified within 3 years for Kubang Ujo Plasma, Plasma Pamenang, Bangko Plasma, Bukit Bungkul KKPA, Batang GAding KKPA, Tiga Serumpun estate planned certification in This is not in accordance with... that smallholders and outgrowers estate must be ensured certified within 3 years. Note: Kubang Ujo was certified on 2019, Pemenang : 2019, Bukit Bungkul: of 122

81 8 Major SCCS 1 TSS During this time the Company stated that the Bangko Estate and Plasma TARA been certified ISCC and already there are claims, but the company can not show how much tonnage of CPO and PK are subtracted from Bangko own estate to the total that have been sold through the ISCC. The Company can not show the data and or system that separates a product certified RSPO sccs and ISCC in order to avoid double claims against existing quotas. During this Bangko Estate and TSRA Plasma are already certified ISCC and already there are claims, but the company can not show how much tonnage of The LNGM plant has had a data SCCS product. However, because LNGM also has the ISCC certificate so that the auditor considers there is a possibility of a claim against the product twice SCCS and ISCC, whereas LNGM never claimed their products as SCCS. Such separation is also very unlikely to happen in the system because there has been a separation of the product SCCS and ISCC, as well as when the buyer has purchased the product ISCC will not be claimed back as a product SCCS vice versa Corrective Action: Data completed with SCCS at mill evidence: Data SCCS Closed Based on data from weighbridge in March 2016, FFB from TSRA is declared as FFB certified but in book reception FFB in RSPO SCCS March 2016 is considered as non RSPO SCCS, because TSRA is only certified ISCC. 81 of 122

82 CPO and PK are subtracted from Bangko own estate to the total that have been sold through the ISCC. 9 Minor AMR Test result of WTP water (Jelatang POM) conducted by Lab Lingkungan BLHD Jambi on March 2015, exceeds the quality standard on Permenkes for total coliform parameter with 100/100 ml. The Company has conducted water test of WTP periodically as required in Permenkes However, test result of total coliform exceeded the quality standard. In accordance with Permenkes for clean water, total coliform can be reduced by boiling the water so that the bacteria in water will die. Evidence The test result will be submitted in the monitoring semester II Closed. The clean water of WTP unit Jelatang has been tested in November The test results met the quality standards set out in Permenkes for clean water standards. 10 Obs AMR The company recommended that ensure clean water testing parameters covered the whole in accordance with that specified in Permenkes , for example: The Company has taken delivery and testing of the samples to the Laboratory BLH Jambi province. However, according to Corrective action: 1. Will add fecal coliform parameter in subsequent test (Semester II November / December 2015) Closed. 82 of 122

83 fecal coliform testing has not been done. Permenkes 416 of 1990 there is a parameter that has not been tested that fecal coliform. Evidence: 1. Petition for sampling. 11 Minor AMR The results of pregnancy tests have shown which is conducted every month, but based on interviews with spray officers and medical personnel antenatal implemented only once in three months while the woman's fertile period cycles generally occur every month There are different answers spray Officers with the data on which the officer replied spray pregnancy tests done 3 months while on a data inspection is done every month Corrective action: 1. Make a schedule for examining the test pack to the sprayer officer. 2. socialization to spray officers and paramedics regarding the conducting of the test pack (list of participants, photos, Minutes) Observation MAS In an interview with the sprayers in Block A4 Division 5, the pregnancy test has been conducted once a month. Evidance: 1. Examination Schedule Pregnancy 2. The presence or 83 of 122

84 absence of socialization 12 Obs AMR It is suggested, the Company needs to investigate the nonconformity results that is obtained from environment test and submit it in UKL/UPL report per semester. For example: The nonconformity of Merangin river water test result for ph parameter in downstream & upstream. The condition of river in upstream and downstream are in acidic condition as the baseline of the river quality. However, this has not been described in detail in UKL/UPL report per semester. The investigation will be described in UKL UPL report semester if there is test result that do not conform with the regulation. Closed 13 Minor AMR During field visit in Jelatang POM, Auditor found the sludge that spilled quite a lot from the drainage in clarification station. It may potentially cause pollution to the environment There was pool of sludge from the drainage. 1. Cleaning the sludge spills in clarification station. 2. Doing socialization to mill operator for keeping santitation in mill area and drainage from sludge spills. The Company established a Work Instruction of Drainage Ditch Cleaning No. IK- 146 on the mechanism of spillage of solid / oil handling. 84 of 122

85 Evidence: News and photos of the activity were available 14 Obs AMR a. It is advisable to provide temporary trash for waste at the site B3 B3 waste before it is stored in the TPS LB3 to ensure trash is not mixed with other domestic rubbish b. Suggested B3 waste manifest is also presented in the quarterly report B3 waste management. a. Companies already has licensed hazardous waste warehouse (TPS LB2) and temporary bin of medical waste in clinic. b. Already done quarterly reporting LB3. However, for completeness attaching manifest LB3 not yet attached. a. There will be a temporary trash in the clinic. In the future, any resulting medical waste will be directly inserted into TPS LB3 licensed and recorded in log book. b. Will attach a copy of the manifest in the third quarter report in 2015 (September Closed. 15 Minor AMR Air quality testing period is not in accordance with provisions in the matrix UPL Jelatang unit, which conducted one The company is already testing the ambient air and emissions in the mill and estate environment. Corrective action: Will be described in the report UKL UPL second half of 2015 related to changes in the sampling Obs. Company propose amendments to the matrix UKL / UPL for UKL / UPL document Jelatang 85 of 122

86 month to the parameters of dust, SO2, NO2, CO, NH3 However, in keeping with the period of air quality monitoring in the UKL / UPL should be done one month but only carried out every 6 months. period should correspond to UKL UPL every 1 month to 6 months. Evidance: Reports Second Semester and Langling POM. This amendment request covers the period that air quality testing be conducted every 6 months. The company has the directive to change the matrix UKL UPL PT. KDA unit Jelatang of BLHD Kab. Merangin on March 8, 2016 by letter no. 660/171 / BLHD / Amendments UKL UPL In the referral letter contains a few things, as follows: 1. Immediately revise the UKL / UPL documents 2. After making revisions to UKL / 86 of 122

87 UPL, the Company filed a request for examination in the district BLHD Merangin. Following up on this matter, the Company requested the discussion of matrix UKL / UPL PT. KDA Langling Units and Jelatang Units to BLHD Kab. Merangin through letter no. 086 / EL / KDA- BLHD / V / 2016 and the documents to BLHD Kab. Merangin on May 10, Major WS PKL Perda No. 01 / BNGE / PKL / VI / 2015 dated July 1, 2015, can not be ascertained validity. This is because: (a). in There are differences signatures for the same person at SPK others, it is because that Corrective Action : Creating a new SPK PKHL where second party entered data is "attached" and to Closed : evidence of casual worker agreement no. 02/BNGE/PKHL/II/ 87 of 122

88 comparison with PKHL No. 04 / BNGE / PKHL / IV / 2015 dated 1 April 2015, there are differences in the signatures to the name of the same workers. By sampling taken the name Siti Aisah (NIK. E0136) and Sugi (NIK. D0402). (B). personnel who represent themselves, namely Mr. Rizal Effendi, a different signature. person did not understand the signature itself ensure that the signatures affixed to the SPK PKHL is genuine Evidence : SPK PKHL 2016 is available. 17 Major WS There is evidence of attendance lists for each Socializing Sexual in eachunit. However, the number of participants who have followed is far from the number of workers in each of these units. The details are as follows: (1). The new BNGE Unit 23, (2). The new LNGM Unit 12 people. This number is Socialization of sexual harassment has been done but only limited to women, Auditor considers should be socialized to all workers Corrective Action: Make back socialization sexual harassment to all employees (news events, photos, list of attendees) Evidance: Attendance, Photos & Minute of Closed 88 of 122

89 still far below the amount of labor each Unit. Socialization 18 Obs WS In each unit made a record in the form of book laments, but the format is not in accordance with Form Listing of complaints and dissatisfaction (Internal) (F / SOP / SMART / SIGS-CSRD / SADV / I / 003/001), which comprises: Square Grievance / Suggestion (date, place, name, contact details, issues, registers), in terms of Response (date, action, current status, PIC, the target finish) Book laments that there is not in accordance with the SOP Recording of complaints and dissatisfaction Corrective Action: make the book laments in accordance with SOP form Recording of complaints and dissatisfaction (F / SOP / SMART / SIGS-CSRD / SADV / I / 003/001) Evidance: Books Registration Complaints and Dissatisfaction Closed 19 Major WS During site visit to Jelatang Mill, it were found 2 boiler operator did not wear PPE like earmuff. Beside that, there wasn t apron in There were workers in boiler did not use earmuff. Corrective Action : 1. Making socialization for using PPE to all workers 2.Ensuring there is designated areas for Closed In 2016 surveillance audit, Auditor carried out checks to the 89 of 122

90 the location. PPE around the work location. 3. Providing apron in boiler station around the work location 4. Showing evidence of indiscipline inspection for using PPE on September 5. Giving penalty to the oprator, who do not use PPE. 5. Giving socialization regarding indiscipline penalty as requlated in SOP of PPE Management to all workers. boiler station of Jelatang Mill. PPE has been available as an apron during site visit, but consistency the use of earmuff was not seen because production process has not started. Evidence : 1. Attendance List, Photo, and News of PPE socialization. 2. Photo of apron placement in work location 3. Documentation of indiscipline inspection of using 90 of 122

91 PPE on August. 4. News of warning letter and signed by related person. 20 Obs WS JLTM unit not fully meet fire prevention officer certified in accordance Kemenaker Decree 186 / MEN / There have been a fire prevention officer but the numbers do not correspond Decree No. 186 / MEN / 1999 due to a training program for fire prevention officers will be phased in over three years from 2014 till 2016 Corrective Action: Fire Prevention Officer License Training will be done gradually until 2016 Evidence: 1. Training Program 2. Role of Fire Officers Training Plan for 3 Phases Observation The Company has made compliance periodically with the competence of firemen, as in the surveillance audit There was the addition of personnel to the class C and class D NCR Audit Surveillance II Non Conformity / Observation Report No. Category Clause Std Auditor Description Root Cause Investigation* Corrective Action & Evidence* (1) (2) (3) (4) (5) (6) (7) (8) (9) 1 Major MAS Closed 2 a. The Company has not ensured that PPE of catridged mask in the WTP of Langling The Company is committed to providing fitted PPE Corrective Action : Putting the label of the ownership to Audit Team Review 91 of 122

92 Mill was still fit for use and has identity of the ownership. NS b. Goggles provided for harvesters is not suitable (safety googles instead of safety glasses). There are still fruit pickers who was not provided with protective gloves eligible to the work force, but there was a PPE that did not has identity of ownership which may consufed the owner. Labours have not understood how to mounting Cartridge and store, and to label it with the, PPE maks monitoring was still not consistent. The Company is committed to providing proper PPE to the work force, but the PPE was not comfortoble for harvesting, and fruit pickers did not know the procedure for PPE replacement the PPE so there was little probablity to confuse the ownership of the PPE and the monitoring of PPE is conducted consistently in accordance with the SOP Evidence : Photo ID on PPE, socialization PPE, PPE condition Monitoring, Content Socialization, attendance list, photos, minutes of training, list operator and identity of each operator Mask Corrective Action : Replacing the type of PPE for harvesting and reviewing of HIRAC in controlling the risk in harvesting activities by changing the Closed 92 of 122

93 recommendations of PPE from safety google to Safety Glasses. Disseminating flow of information of PPE replacment to fruit pickers Evidence : 1. Minutes of replacement PPE 2. Handover PPE Safety Glasses 3. Documentation Type of PPE (Safety Glases), 4. Proof of purchase Safety Glasses 5. Number 6. The handover PPE to harvester and fruit pickers 7. Dissemination to the Purchasing Dept. section 8. Review HIRAC and follow-up 9. Monitoring 10. SOP 93 of 122

94 socialization APD management to fruit pickers 11. Proof of purchase of gloves for fruit pickers. AGT d. There was operator of engine room who was not wearing earmuff earmuff required PPE (Jelatang Mill) The company already has HIRADC for activites in engine rooms, and the Company is committed to providing proper PPE to the work force, but there were workers who were not using PPE, because operators were still lacking of discipline Corrective Action : Ensuring workers have been using the PPE which have been provided by conducting inspections to the use of PPE Evidence : 1. Socialize the use of PPE2. Inspection Form indiscipline use of PPE3. A letter of reprimand to the relevant officers, 4. Documents of HIRADC for activities in Engine Room Closed 94 of 122

95 2 Major MAS a. Diesel fuel tank near the central warehouse has not been provided with a grounding. Diesel fuel tank has not been provided with grounding, because the related HIRADS has not contained risk analysis of electrostatic potential hazards in the diesel fuel tank. Corrective Action : Conducting review to the HIRADC of diesel fuel tanks regarding the hazard of electrostatic Evidence : Document of HIRADC, minutes of grounding instalation. Closed AGT/AM R b. Chemical operator in the area of water treatment did not wear Gloves (Jelatang) The Company is committed to providing proper PPE to the work force, but there were workers who were not using PPE at working place, because the PPE was broken and workers did not understand the flow procedure of PPE replacement. Corrective Action : Ensuring PPE which has been distributed to labor was used properly by conducting disciplinary inspection to the use of PPE and dissemination of procedure of PPE replacement chemical operators. Closed Evidence : 1. Socialization of 95 of 122

96 the use of PPE 2. Minutes of the provision of PPE 3. Inspection Report of PPE NS c. Implementation of OHS was not conducted effectively, there was unsafe conditions such as palm leaves that touch the medium voltage power cable (20 KV) in Division 4 3 minor RB The Company has long-term plans of the Year 2010 s / d in 2020 but the plan has not been contained in the replanting plan. There were electrical wires touched by palm leaves due to lack of monitoring to the electrical grid adjacent to the palm oil tree. According to long term plan, company did not include replanting program, but the age of plant in Bangko Estate almost approached the replanting one. Corrective Action : The company will ensure that all electrical grid in the area of oil palm are not touched by palm oil leaves by conducting periodic monitoring to electrical grid inside the plantation Evidence : 1. Monitoring sheet of electricity grid 2. Pruning report in supervisor book Corrective Action : Establishing parameters for replanting Evidence : Replanting program Observation. To prevent palm leaves from touching the medium voltage power cables, the company has made a monitoring program to the medium-voltage electricity grid in Bangko Estate 2016, implementation will be seen on surveillance audit next year Closed 96 of 122

97 4 Major RB Based on the results of the census conducted in October 2015 in Division IV (Bangko Estate) highest attack rate was 13 insects / midrib in Blocks B05 and A08 but there was no remedial action. 5 Major AMR The utilization mampun river water for processing operations in Langling Mill and river water for processing operations in the Jelatang mill has not been supplemented with Permission to Use Water Resources. This is not in accordance with the Minister regulation of Public Works and Housing no. 37 / PRT / M / 2015 article 3 and article 6. In the census report there were attacks of palm leaf-eating caterpillars (UPDKS) but the control column on the sheet has not been filled, so it can not be seen that the control has been done Legislation updating has been done, but there was still a lack of monitoring of the latest regulatory related to licensing primarily regarding the regulation besides environment. Corrective Action : Ensuring the sheet has been filled correctly Evidence : 1. Sosialization about filling the sheet 2. Census sheet of UPDKS Corrective Action : Ensuring legislation updating by conducting monitoring to legislation upate. Coordinate with the one stop service agency regarding related permits Evidence : 1. Evidence of Licensing process 2. Monitoring to legislation update related to licensing. Closed Observation: The Company has re-updated List of Legislation by inserting regulation of Ministery of publick works and housing No. 37 in 2015.The company has applied for a permit to the Board of Investment and Integrated Licensing Services District of Merangin on tjune 28, Status of permits 97 of 122

98 will be ensured in the next surveillace 6 Obs MAS/A MR It is advised to redisseminated MSDS of hazardous material to ensure the comprehension of workers related to the nature of the material and the control of hazardous material used is well maintained.based on interviews with employees were found:- Employees spray block A4 did not understand the dangers of handling according to its MSDS. Example: chemicals Roll Up- Warehouse clerk did not understand the nature of the chemicals stored in central warehouses. Based on information from interviews, a warehouse clerk has never undergone socialization regarding MSDS of hazardous material used. Corrective Action : Ensuring sprayers and warehouse clerk understand about MSDS of hazardous material and its properties. Evidence : 1. Re-socialization of MSDS of hazardous materials and their properties to sprayers and a warehouse clerk. 2. Evidence of socialization of MSDS of hazardous material and their properties to the sprayer and warehouse clerk. Closed 98 of 122

99 7 Obs AMR 8 Obs AMR/A GT Report on environmental management plan (RKL / RPL) for second half of 2015 did not include environmental sanitation activities as required in the matrix of UKL / UPL document DPPL. Company should conduct a review of Identification and Evaluation of Environmental Aspects. On the form Identification and Evaluation of Environmental Aspects can ensure compliance with the operational activities that run and mitigating the environmental impact resulting from these activities. From the sampling results were found: - Identification and Evaluation of Environmental Aspects Langling Mill does not include the impact of emissions from the furnace fuel. - In the form of identification The company has conducted environmental sanitation, but these activities have not been put in RKL / RPL. SOP Identification of Environmental Aspects evaluation and dissemination of Government Regulation No has not been socialized Corrective Action : Ensuring RKL RPL Semester already include environmental sanitation activities Evidence : Incorporating environmental sanitation activities into RKL RPL Semester Corrective Action : Re-ensuring identification and evaluation environmental aspects has covered furnace fuel and hazardous waste regulations in accordance to the latest government regulation pp 101 in Evidence : Have been revised on identification and evaluation Obs Closed 99 of 122

100 and evaluation of environmental aspects F / SMART / LEMS-EHSD / SADV / 001/001 rev 0, some of it still refer to the obsolete regulations as B3 waste refer to Regulation No. 18/1999. environmental aspects by inserting furnace fuel and change hazardous waste regulation to be pp 101 in Major AMR/A GT The company could not ascertained the expired chemicals from activities in the laboratory has been handed over to the authorized agency in accordance with the provisions in PP 101 in From the results of site visit found : - Expire Chemical materials stored in the laboratory Jelatang POM has not been managed as B3 waste. Example: cromate potassium chemicals. The Company has not socialized SOP waste management related to the handling of chemicals expired in the laboratory Corective Action: socialize SOP waste management related to the handling of expired chemicals in laboratoium Evidence : 1. Waste Management SOP 2. Socialization SOP waste management related to the handling of chemicals expired in the laboratory. Closed. Have provided evidence of socialization WI Chemicals Storage no. IK- 06. Socialization was attended by SPO Officer, employee lab, the clerk of the sampler, and analysts samples. Official letter handover of expired chemicals to TPS B3 waster has been available 100 of 122

101 10 Obs AMR Medical waste management have not been recorded in a hazardous waste logbook and has not been reported in the quarterly report B3 waste management The Company has managed medical waste, but has not recorded and reported of the medical waste management. Corrective Action : Making Medical Waste logbook and ensuring the report of second quarter of 2016 including the Medical Waste logbook. Open Evidence : 1. Membuat logbook limbah medis Triwulan II Tahun Memasukkan logbook limbah medis ke dalam laporan Limbah B3 Triwulan II Tahun Make logbook medical waste Quarter Input logbook medical waste into a report B3 Quarter year of 122

102 11 Obs AMR 12 Obs AMR/M AS It is advised that the target set in the GHG Mitigation Program to be more measurable to facilitate monitoring of the program achievements.. a. Gallon storage of toxic materials used in spraying activities should be labeled with hazardous symbol. Hazardous symbol on the packaging containing the hazardous material is missing during the field visit to spraying activities in Block A4. b. Conduct a review of the conformity with the symbol of hazardous material. Example: Diesel fuel tank In the central warehouse was wrongly labelled as irritant; while agrochemical in the warehouse was wrongly labelled as corrosive. The company has greenhouse gas mitigation programs, but some of these program s targets can not be measured in the program achievement. Packaging toxins have been given the symbol, but the symbol was lost. Corrective Action :. Ensure the GHG Mitigation Program has set measurable targets. Evidence : 1. GHG Mitigation Program with measurable targets. Corrective Action : Replacing toxic symbol on the jerican containing a mixture of toxins with a minimum size of 10 x 10 cm Evidence : Official letter of the installation symbol on the packaging of toxic B3 jerigen containing a mixture of toxins. Closed Obs 102 of 122

103 MAS/A MR c. There was one bottle of chemical that did not have identity stored in herbicide section of central warehouse. The Company has set SOP of management of material and movement (SOP / SMART / HESS- ESDV / SADV / I / 006). however there was still bottle auxiliaries (surfactants) in the Warehouse herbicide whose identity was not clear, this was because the warehouse clerk did not understand types of chemicals that can be stored in herbicide warehouse. Corrective Action : Conducting labeling on the surfactant bottle and disseminating SOP of management of material and its movement to a warehouse clerk. Evidence : Minutes of the labeling on the chemical packagings, and evidence of socialization Closed AGT/AM R d. Installation hazardous symbol on gas cylinders in the workshop area was not in accordance with ministry regulation No. 3 in 2008 (Jelatang) The Company has committed to providing the symbols to hazardous material according to SOP Management and Material Movement, but still there were not gas cylinder Corrective Action : 1. Installing hazardous symbols according to the type and characteristics of the material stored in the hazardous material warehouse with minimum size of 25 x 25 cm Closed 103 of 122

104 which was not labeled because of the lack of monitoring 2. Conducting monitoring to ensure the symbol B3 has been installed properly on the material Evidence : AGT/AM R e. Outside of the warehouse of hazardous material storage was not installled with symbols according to the provisions of ministry regulation LH No. 03, 2008 (Jelatang) The Company has committed to providing the symbols to hazardous material according to SOP Management and Material Movement, but still there were gates of warehouse which were not installed by symbols because of the lack of monitoring 1. Minutes of the installation symbol in the warehouse 2. Inspection Report 1. Installing hazardous symbols according to the type and characteristics of the material stored in the hazardous material warehouse with minimum size of 25 x 25 cm 2. Conducting monitoring to ensure the symbol B3 has been installed properly on the material closed Evidence : 1. Minutes of the 104 of 122

105 installation symbol in the warehouse 2. Inspection Report 13 Major RSPO Cert. System AMR The Company established timebound date January 31, The smallholders RSPO certification that includes Kubang Ujo Smallholder, Pamenang SH, Bangko SH, Bukit Bungkul KKPA, Batang Gading KKPA, and Tiga Serumpun estate is planned in This is not in accordance with the RSPO standards with states that smallholdings must be certified within 3 years (starting from the own estate certification) Time Bound In 2015, the plasma refused to be certified, so that the time bound of plasma certification is re-scheduled Corrective Action : The Company will conduct revisions of smallholder timebound which refuse to be certified and will disseminate the RSPO certification to smallholdings supplying FFB to JLTM and LNGM Evidence : 1. Revisions timebound of smallholders 2. Evidence Socialization smallholdings and minutes of socialization. Obs 105 of 122

106 14 Obs AMR Previous audit finding (Minor to Obs) Previous audit finding (Minor to Obs) Air quality testing period was not in accordance with provisions in the matrix UPL Jelatangand Langling unit, which conducted once a month to the parameters of dust, SO 2, NO 2, CO, NH 3 15 Obs AGT/AM R Company should do the calibration of the flowmeter contained in the WWTP OF Jelatang Mill to ensure the accuracy of recording of discharged liquid waste. 16 minor NS Company must ensure that the monitoring wells 1 in block A- 06 are neatly closed and locked. The premium of the employment insurance (BPJS Ketenagakerjaan ) of 121 The Company has conducted air quality testing each semester, but because of environmental documents Jelatang and Langling Unit had long established, it is necessary to evaluate the air testing every semester. The Compnay has not conducted dissemination to the WWTP operator that the flow meter used in the WWTP area needs to be calibrated There was different understanding between the Company and CB. Corrective Action : Making revisions to the matrix UKL UPL related the period of dust monitoring. Evidence : 1. There have been the submission of matrix changes in January chronological evidence of correspondence related to changes in the matrix. Corrective Action : Develop WWTP flow meter calibration program Evidence : Official letter of flow meter WWTP calibration Open Open Open, the CB has different opinion with the company. CB 106 of 122

107 Casual was paid by Company for Month April 2016 only for Accident insurance scheme (JKK) and death benefit (JKM) program on May 9, This is not in accordance with Regulation 84 of 2013 in which requite the Company must pay the premium for full package of BPJS ketenagakerjaan regardless the employement status Which according to the Company s opinion it was under valid Decree 150,1999 and while CB saw that the decree was no longer valid. When CB believes that all derivatives of the Social Security Act (Act No 3/92) is not applicable, and the Regulation No. 84/2013 also derived the Social Security Act so that it becomes irrelevant when the PP 84/2013 become reference of the CB. has opinion that the manpower ministerial decree no has been superceded by newer and higher status of regulation i.e Goverment Regulation no. 84/2013 Since there was no resolution regarding this minor finding (which may become major in the next surveillance audit) Company is welcomed to file a grievance to RSPO based on RSPO certification system annex 5 regarding complaint and grievance. 107 of 122

108 BPJS kesehatan payment of casual workers and daily permanent workers SKU has been paid to 616 people (participants and family members) on May 9, 2016 to BPJS Muara Jambi Branch II, while 121 casual workers has not been paid BPJS Kesehatan by Company. there are no regulations that specifically regulate about casual worker for BPJS. Open, there is no need for special or additional regulation regarding health insurance (BPJS kesehatan), perpres no. 12 of 2013 article 11, paragraph 1, states very clearly that every employer must register their employees as participants in the health insurance (BPJS kesehatan) Since there was no resolution regarding this minor finding (which may become major in the next surveillance audit) Company is welcomed to file a grievance to RSPO based on RSPO 108 of 122

109 17 Major NS Memo SE VPA I no. SW-251 / VPA-1/03/2015 dated March 9, 2015, concerning premiums harvest / piece rate 2015 has already provided. In part 2, concerning piece rate, item 2.2, concerning casual workers there was no premiums/fixed wage. The fruit pickers was only paid by the harvest volume thus there is no guarantee that they are always paid according to the minimum wage. In SE VPA casual worker/ fruit picker is just about income rupiah / kg, so that there is no certainty that fruit pickers are paid according to government regulations. But at the PKB BKS-PPS there are points that ensure the of workers' minimal income will meet the regulation Corrective Action : Make changes to the content of the circular letter VPA related piece rate daily worker. Evidence : (Circular Letter) SE VPA 2016 certification system annex 5 regarding complaint and grievance. Observation : There was addendum of SE 04/03 / VPA / 2015 on part 2 of the Collector piece rate daily worker In point 2.2 has changed the editorial to "wage determination and or the wholesale/piece rate refers to the PKB BKS-PPS years 2015/2017 Article VI. Implementation will be seen on a surveillance audit next year. 109 of 122

110 18 Observati on SSW The report of Monitoring High Conservation Value conducted by HCV officer in October 2015 stated there were people who use the area around the swamp for farming activities. Monitoring report has been followed up by the Estate Manager BNGE by sending a notification to the village chief and has been answered by the head of the village. At the time of the site visit it was found that the land was still planted with vegetables and fruits because based the statement, the community asked for extention until July 2016 to harvest fruits and vegetables that have been planted. Open, the implementation will be seen in next ASA 19 Observati on At the time of observation encountered areas defined as HCVA, ie HCV 4.1 freshwater swamp which was utilized by the villagers of Jelatang for planting papaya, cassava, banana and vegetable crops. PT. Kresna Duta Agroindo Open, the implementation will be seen in next ASA 110 of 122

111 through the Estate Manager of BNGE has given notification to the village chief of Jelatang on October 23, 2015 which contains a notice that there were some villagers of Jelatang who farm in the location palm plantation of PT. KDA and notify them to refrain from farming activities again in those area. The notification letter has been responded by the Village Head of Jelatang with an statement letter 111 of 122

112 112 of 122

113 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 Tuti S. Sirait Senior Lead Auditor Signature Date 8 December 2016 Technical Reviewer Name Position Triyan Aidilfitri HSE Audit and Certification Department Head Signature Date 8 December of 122

114 Appendix - 1 List of Abbreviation B3 BLH BLHD BNGE BOD CB CPO CSPK CSR EFB FFB FPIC FSMS GAR GHG GMP GPS HACCP HCV HCVF HGU IEMA IPM IRCA ISCC JLTM K3 KDA KKPA Bahan Berbahaya Beracun Badan Lingkungan Hidup Badan Lingkungan Hidup Daerah Bangko Estate Bichemical Oxygen Demand Certification Body Crude Palm Oil Certified Sustainable Palm Kernel Corporate Social Responsibility Empty Fruit Bunch Fresh Fruit Bunch Free Prior Informed Consultant Food Safety Management System Golden Agri Resources Green House Gases Good Manufacturing Practice Global Positioning System Hazard Analysis and Critical Control Point High Conservation Value High Conservation Value Forest Hak Guna Usaha Institute of Environmental Management and Assessment Integrated Pest Management International Register of Certified Auditor International Sustainability and Carbon Certification Jelatang Mill Keselamatan dan Kesehatan Kerja Kresna Duta Agroindo Kredit Kepada Koperasi Primer 114 of 122

115 LA Land Application LB3 Limbah Bahan Berbahaya dan Beracun LNGM Langling Mill MOU Memorandum of Understanding MSDS Material Safety Data Sheet NA Not Applicable NC Non Conformity NCR Non Conformity Register NPP New Planting Procedure OSH Occupational Safety and Health OSHAS Occupational Safety and Health Assessment Scheme P&C Principle and Criteria P2K3 Panitia Pembina Kesehatan, Keselamatan Kerja PK Palm Kernel PKO Palm Kernel Oil POM Palm Oil Mill POME Palm Oil Mill Effluent PPE Personal Protective Equipment RSPO Roundtable on Sustainable Palm Oil RSPO NI Roundtable on Sustainable Palm Oil National Interpretation SA8000 Social Accountability 8000 SCCS Supply Chain Certification Scheme SIA Social Impact Assessment SIO Surat Izin Operator SOP Standard Operating Procedure SPK Surat Perjanjian Kerja TE Technical Expert TPA Tempat Penitipan Anak TPS Tempat Penyimpanan Sementara TSRA Tiga Serumpun UKL Upaya Pengelolaan Lingkungan UPL Upaya Pemantauan Lingkungan 115 of 122

116 WI WWTP WHO Work Instruction Waste Water Treatment Plant World Health Organization 116 of 122

117 APPENDIX -2 MAP 117 of 122

118 Bangko Estate Map 118 of 122

119 Bangko Estate Division 4 Map 119 of 122