GLOBAL FORESTRY SERVICES Licensee Contact Person Office Address Site Address Compliance Checklist / Report Sabah Legality Standard Principles 1-4 Collector As Trustee (Kg Kabintaluan) Form 2B Tenom Mr. Wong Thun Liang @ Ong Tun Liong Bumimas Bonus Sdn. Bhd. Lot. 30, 1 st Floor, Keningau Wood Light Industrial Building Complex, Locked Bag 13, SM 238 89008 Keningau Reference # G161-016 Date of Report Date of close out Telephone Fax Telephone Fax 28 Feb 2015 +6087 301 706 +6087 335 708 Email Approved By Dr. Kevin T. Grace Statements GFS Audit Statement # GFS 030 LVS Issuance Date 1 March 2015 Expiration Date 28 Feb 2016 Assessment Dates 23-27 Feb 2015 Assessment Details Scope of Assessment Species GFS Lead Assessor GFS Assessor(s) FDS Staff Collector As Trustee (Kg Kabintaluan) Form 2B Tenom Laran (Anthochephalus cadamba), Binuang (Octomeles sumatrana), Bangkal, Gaharu (Aquilaria malaccensis), Keruing (Dipterocarpus spp.), Mahagony (Swietenia macrophylla), Merbau (Intsia palembanica), Oba Suluk (Shorea pauciflora), Pulai (Alstonia spp.), Sengkuang (Dracontomelon costatum), Seraya Punai (Shorea parvifolia), Seraya Majau (Shorea johorensis), Seraya Minyak, Talisai (Terminalia subspathulata), Seraya Kuning (Shorea faguetoides), Urat Mata (Parashorea spp.), Kapur Paji (Dryobalanops lanceolata), Tengkawang, Selangan Batu (Shorea spp.). Kevin Grace Jiron Janggil; Charlene Billy Roslan Junaidi (Ketua Unit FLEGT); Arshad Ismail (FLEGT Officer) Suib Basri (SFM Officer); Clarice Allin (DFO Tenom) Nasip Sapary (KPPM Tomani); Julius Janusip (MCEE Keningau FMU # Form 2B Collector as Trustee - Tenom Page 1
GLOBAL FORESTRY SERVICES OBJECTIVES: The objective of this checklist is to verify compliance to the Criteria listed in the Sabah Legality Standard as defined by Principles 1-4 for Sabah dated 13 Nov 2013. Compliance is defined when all applicable criteria are observed to be compliant. A Minor Gap to any indicator does not constitute non-compliance to a criterion. A Major Gap to any applicable indicator does reflect non-compliance to a criterion. Compliance for a criterion where multiple minor gaps are identified in indicators under the criterion may reflect non-compliance to the criterion. All issues identified under this standard shall be considered appropriate to the scale and degree of forestry operations undertaken by the parties under the agreement. Overview of Licensee Summary Information Sabah has initated a program for rural development that is centered on an objective to establish agriculture crops of economic value in communities on communal titled land under an entity called Collector As Trustee. Until year 2014 more than 6,000 participants and settlers engaged in agricultural development activities coordinated and managed through SLDB, mostly in remote and less developed areas. The resulting dividend payments from agricultural crops, and other community benefits significantly contribute to enhance the livelihood of the rural population involved in agricultural projects, particularly through oil palm cultivation. As an initial step of site preparation, the identified agricultural development areas require the harvesting and removal of remaining residual timber stocks. The parties involved in the management and administration of the licence area under the auspices of the Collector as Trustee include the following: - Sabah Land Development Board (SLDB): identification, planning, coordination, implementation and monitoring of agricultural development projects - District Office Tenom (Pejabat Daerah Tenom): Payment of timber royalties and other fees due to State Government bodies - Land and Survey Department (Jabatan Tanah dan Ukur Sabah): area survey and delineation, mapping, issue of Community Land Title The land ownership and management rights over the licence area are held by the Licencee Collector as Trustee, Kg Kabintaluan Kemabong (Tenom), acting as trustee on behalf of a group of 601 beneficiaries. The total area amounts to 2,555 ha, comprising a communal land title (Title # 164005314) issued by the State of Sabah on 29 June 2011. This area forms part of the Agricultural Scheme at Kg Kabintaluan Kemabong in Tenom, Sabah that is managed by the Sabah Land Development Board (SLDB) as the implementing agency, which actually started on 1 Jan 2011. FMU # Form 2B Collector as Trustee - Tenom Page 2
Use of subcontractors for harvesting, GLOBAL FORESTRY SERVICES Sabah Land Development Board has an agreement (undated) with Vigo Wawasan Sdn Bhd to conduct salvage logging activities throughout the 2,555 ha Communal Title project area as well as 2 additional areas Pengolobon 1 (4500 acres) and Pengolobon 2 (800 acres). Pengolobon 1 (4500 acres) and Pengolobon 2 (800 acres) are not included in this assessment. Vigo Wawasan Sdn Bhd has subcontracted all activities and responsibilities to an associated company Bumimas Bonus Sdn Bhd. Land use classification: The Agreement for the Communal Title agricultural scheme at Kg Kabintaluan Kemabong in Tenom, Sabah does not have a project development or management plan only a designated area that is allocated to 601 beneficiaries managed by the SLDB and subcontracted to a private company for logging. Land classification FMP Area (ha) Current (ha) Total Area - Communal Rights 2,555 Production Area - Social Community & Agriculture Oil Palm 1,765 Protected Forest & Conservation Areas Unknown Infrastructure, Roads Buildings, etc. Unkown Environmental context Forest type and history of management The project area was previously state land that was stocked by Mixed Dipterocarp Forests, which had undergone several rounds of logging, eventually leading to their degradation. No specific biological values or environmental services had been identified prior to decision for granting the area as Communal Titled Land for conversion to agriculture for the rural development project Kg Kabintaluan Kemabong (Tenom), Principal commercial species The area is considered a degraded forest area that is being salvaged logged as part of site preparation for planting of rubber and oil palm. Species generally include: pioneer species such as Laran & Binuang as well as a mix of natural forest dipterocarp species left over from previous logging activities. Main species include: Laran (Anthochephalus cadamba), Binuang (Octomeles sumatrana), Bangkal, Gaharu (Aquilaria malaccensis), Keruing (Dipterocarpus spp.), Mahagony (Swietenia macrophylla), Merbau (Intsia palembanica), Oba Suluk (Shorea pauciflora), Pulai (Alstonia spp.), Sengkuang (Dracontomelon costatum), Seraya Punai (Shorea parvifolia), Seraya Majau (Shorea johorensis), Seraya Minyak, Talisai (Terminalia subspathulata), Seraya Kuning (Shorea faguetoides), Urat Mata (Parashorea spp.), Kapur Paji (Dryobalanops lanceolata), Tengkawang, Selangan Batu (Shorea spp.). Existing EIA report Observed a letter of approval of the EIA by Environmental Protection Dept (EPD) dated 21 Dec 2012. The EIA was conducted on a phased approach by the EIA contractor, which started in June 2010 with submission reports issued through 17 Dec 2012. The EIA report was not available at the District Tenom Forestry Office or contractor office. FMU # Form 2B Collector as Trustee - Tenom Page 3
Social context GLOBAL FORESTRY SERVICES Social baseline summary & demography There is no formal social baseline assessment conducted for the project available at the Tenom District Office. The Kg Kabintaluan Kemabong (Tenom) agreement includes 601 individual beneficiaries with each individual beneficiary having an entitlement to about 8 acres within the project area. Native Customary Rights Under the agreement by the State of Sabah (Land and Survey Department - Jabatan Tanah dan Ukur Sabah) the state land area was granted as Communal Title Land to the Collector As Trustee on behalf of the 601 beneficiaries. Under the agricultural project, community land title was issued to the Collector As Trustee based on the 601 beneficiaries, in which each person was given an approximate share of 8 ac (3.2 ha). There was no community observed adjacent to the project area and no formal social impact assessment was available or associated with the Communal Title issued by the State of Sabah. Currently there was no evidence of a profit sharing scheme between the land developer and the beneficiaries to ensure participation and define future benefits generated by the oil palm / rubber plantation. Scope of Assessment The scope of the evaluation is to verify compliance of Collector As Trustee with a Form 2B License for area identified as Kg Kabintaluan is located in the district of Tenom.. The assessment is in accordance on the terms of the agreement for the Sabah Legality Standard Principles 1-4 dated 13 Nov 2013. Site evaluation to verify and report the level of compliance by Collector As Trustee and Bumimas Bonus Sdn Bhd to the standard in respect to each of the criteria within this report. Compliance is defined when the auditee demonstrates that the indicators consist of none or only minor gaps against any applicable criteria of the standard. Non-compliance to the Sabah Legality Standard occurs when the auditee does not demonstrate adequate compliance to a criterion. Itinerary of Assessment Date Activity 23 Feb 2015 Travel to Keningau & opening meeting 24 Feb 2015 Document review at Tenom District Office 25 Feb 2015 Site visit harvested areas; nursery site and base camps 1 & 2 26 Feb 2015 Data Analysis & Preparation for closing meeting & Closing meeting 27 Feb 2015 Travel back to Sandakan FMU # Form 2B Collector as Trustee - Tenom Page 4
GLOBAL FORESTRY SERVICES Highlights of Assessment (Major Gaps = 0; Minor Gaps = 3; Observations = 0) Collector As Trustee Tenom / (Bumimas Bonus Sdn Bhd) has complied with the Sabah Legality Standard (Principles 1-4 v01 13 Nov 2013) as no non-compliance was identified during the assessment on 23-27 Feb 2015. GFS will provide an Current status of operations: Sabah Land Development Board has an agreement (undated) with Vigo Wawasan Sdn Bhd to conduct salvage logging activities throughout the 2,555 ha Communal Title project area at Kg Kabintaluan Kemabong in Tenom, Sabah. Vigo Wawasan Sdn Bhd has subcontracted all activities and responsibilities to an associated company Bumimas Bonus Sdn Bhd. About 80% of the area has been salvage logged to date. The Agreement for the Communal Title agricultural scheme at Kg Kabintaluan Kemabong in Tenom, Sabah does not have a project development or management plan only a designated area that is allocated to 601 beneficiaries managed by the SLDB and subcontracted to a private company for logging. Minor Gaps included: Gap 01/2015 (2.1.3): inconsistency in measures taken to prevent oil and diesel spillage at the 2 camps Gap 02/2015 (2.1.5): No evidence of EIA and ECR compliance for protection of steep slopes and identified permanent streams within the project site. Gap 03/2015 (2.6.10): No evidence of training or precaution for fire safety Results: (Major Gaps = 0; Minor Gaps = 3) GAPS raised against indicators & criteria during the Feb 2015 assessment. GAP Type Checklist Description 001/2015 Minor 2.1.3 Observed inconsistency in measures taken to prevent oil and diesel spillage at the 2 camps 002/2015 Minor 2.1.5 No evidence of EIA and ECR compliance for protection of steep slopes and identified permanent streams within the project site. 003/2015 Minor 2.6.10 No evidence of training or precaution for fire safety FMU # Form 2B Collector as Trustee - Tenom Page 5
Status of GAPS previous outstanding gaps. GLOBAL FORESTRY SERVICES GAP Type Checklist Status Description of close out Highlights of Close out visit (if applicable) Dates Recommendations Collector as Trustee and Bumimas Bonus have demonstrated compliance with the Sabah Legality Standard (Principles 1-4 v01 dated 13 Nov 2013) for the Form 2B License on Communal Title project area Kg Kabintaluan Kemabong (Tenom) as no non-compliance was identified as a result of the assessment. Recommendations to FDS and Collector as Trustee: The concept of Collector as Trustee is not clearly defined in regards to the rights and responsibilities of the involved parties. - Sabah Land Development Board (SLDB) - Land & Survey Department (L&S) - Sabah Forestry Department (FDS) - District Office (DO) - Contractor(s) - Beneficiaries It is strongly recommended to develop a clear organization chart along with clearly defined relationships; functions; rights; obligations and benefits of each party. All minor gaps must be addressed by the next surveillance visit scheduled for (Feb 2016). Actions required to address the gaps identified include: Gap 001/2015 Ensure adequate prevention for oil and diesel spillage at both camps Gap 002/2015 Ensure compliance to EIA requires in regards to protection of steep slopes and permanent streams Gap 005/2015 provide training and equipment for fire safety. End of Summary Report FMU # Form 2B Collector as Trustee - Tenom Page 6