Sabah TLAS Audit Report Sabah Legality Standard Principles 1 4 Licensee Contact Person Office Address Collector as Trustee Kawayoi Plantation Sdn. Bhd. (962230-V) Albert Tsin Collector as Trustee C/O Kawayoi Plantation Sdn. Bhd., Lot 8-2, 2 nd Floor, Block F, Lintas Square, Jalan Lintas, 88300 Kota Kinabalu, Sabah Reference # G161-112 Date of Report Date of close out Telephone 2 October 2016 NA +6087 331 318 Fax +6087 341 318 Email NIL Approved By Kevin Grace Statements Audit Statement GFS 075 LVS Issuance Date 3 October 2016 Expiration Date 2 October 2017 Assessment Dates 26 30 September 2016 Assessment Details Scope of Assessment Species Lead Assessor Assessor(s) FDS Staff TLAS Principles 1 4: Form 1 License Mixed species Mohd. Akram Mansur Siti Radiah Mohamad, Walter Marcus Arshad Hj. Ismail (FLEGT Officer), Henry Ladsou (DFO Sook), Evan Akong (KPPM Pandiwan) 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 01 st January 2015 (FDS-TLAS-002). 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. 2
Summary Information Overview of Licensee: Sabah has initiated a program for rural development that focused on the establishment of agriculture crops as well as the communities economic values in a communal titled land which manage by an entity called Collector as Trustee. The resulting dividend payments from the agricultural crop, and other community benefits significantly contribute to enhance the livelihood of the rural population who also part of the agricultural projects; oil palm plantation. 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: - Kawayoi Plantation Sdn. Bhd.- identification, planning, coordination, implementation and monitoring of agricultural development projects - District Forestry Office Sook (Pejabat Perhutanan Daerah Sook): Payment of timber royalties and other fees due to Sabah Forestry Department and State Government - Land and Survey Department (Jabatan Tanah dan Ukur Sabah): area survey and delineation, mapping, issue of Community Land Title The land management rights for the licence area are held by Kawayoi Plantation Sdn. Bhd. who acting as the trustee on behalf 417 beneficiaries (local community of Kg. Kawayoi and Kg. Inarad). The total area amounts to 2,428ha, comprising a communal land title (Title # FR254000041) issued by the State of Sabah on 1 January 2013 was now managed under Form 1 License #JP(NSO) 003/2013 started on 11 December 2014 (previous management based on Form 2B permit). Land use classification: The Agreement for the Communal Title agricultural scheme in Kg. Kawayoi and Kg. Inarad, Tongod, Sabah does not have a project development or management plan for the designated area that allocated 417 beneficiaries. Land classification Current (ha) Total License Area 2,428.00 Planted Area 1,128.00 In progress Area 1,050.30 Balance / Unlogged Area 249.70 Steep Area (> 25 o ) 0 Riparian Reserve Excised Infrastructure, Roads Buildings, etc Not Stated 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. Kawayoi and Kg. Inarad (Tongod), 3
Principal commercial species FDS-TLAS-006 The project area is dominated by secondary forest, with common tree species including Laran (Anthochephalus cadamba), Binuang (Octomeles sumatrana), Keruing (Dipterocarpus spp.), Bangkal (Nauclea spp.), Oba Suluk (Shorea pauciflora), Pulai (Alstonia spp.), Seraya Punai (Shorea parvifolia), Seraya Majau (Shorea johorensis), Seraya Minyak, Talisai (Terminalia subspathulata), Seraya Kuning (Shorea faguetoides), Urat Mata (Parashorea spp.),and Kapur Paji (Dryobalanops lanceolata). Other vegetation within the license area including bamboo, shrub, palm species, and other secondary vegetation. There are no prohibited species reported to occur within the area. Existing EIA report An approval letter of the EIA report by the Environmental Protection Department (EPD) dated 10 March 2014 was provided during the audit. However, the EIA report was yet to be sent by the EIA consultant. Social context There are two settlements located within the license area named Kg. Kawayoi and Kg. Inarad. The communities from both villages are mostly lives along Pinangah River which crossing through the license area. Based on the evidences of existing cultivation activities done by the villagers, both settlements are considered as the origin that have the right as the beneficiary of the development project. Scope of Assessment The scope of the evaluation is to verify compliance of Collector As Trustee: Kawayoi Plantation Sdn. Bhd. with the Form 1 License Agreement JP (NSO) 003/2013 (F1). The assessment is in accordance on the terms of the agreement for the Sabah Legality Standard Principles 1-4 dated 01 st January 2015 (FDS-TLAS-002). Site evaluation to verify and report the level of compliance by Kawayoi Plantation Sdn. Bhd. and contractors 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 26 Sept 2016 Mon 27 Sept 2016 Tues 28 Sept 2016 Wed 29 Sept 2016 Thurs 30 Sept 2016 Friday Activity Travelling to Keningau, opening meeting at PPD Keningau Field visit to Kawayoi Plantation Field visit Kawayoi Plantation Document review at PPD Sook Closing meeting at PPD Keningau, travelling to Sandakan. 4
Highlights of Assessment (Major Gaps = 0; Minor Gaps = 0; Observations = 2) Collector As Trustee: Kawaiyoi Plantation Sdn. Bhd. has complied with the Sabah Legality Standard (FDS-TLAS-002) as no non compliances were identified during the assessment on 26 30 September 2016. Current status of operations: Harvesting operation has stopped due to raining season and is scheduled to resume after the application of Form 1 License extension is approved by FDS. Two observations were identified in regards to notification of to director of wildlife prior to harvesting and for first aid kits to be located at guard posts. Results: (Compliance = 8; Non-Compliance = 0) No gap was raised against indicators & criteria during the Sept 2016 assessment. GAP Type Checklist Description - - - - Status of previous outstanding Gaps. GAP Type Checklist Status Description of Close Out 001/2015 Minor 2.1.3 Closed Mar 2015 - Environmental Compliance Monitoring Report was not made available during the assessment. - Inadequate implementation of environmental mitigation measures. Sept 2016 - Environmental Compliance Monitoring Report was conducted every 4 months. Reports are made available during the assessment. - Adequate environmental mitigation measures are applied at the base camp. Highlights of Close Out Visit (if applicable) NA Dates Two observations were highlighted against indicators & criteria during the Sept 2016 assessment. OBS Checklist Description 001 2.1.4 Collector as Trustee: Kawaiyoi Plantation Sdn. Bhd. has not submitted the notification letter to the Director of Wildlife Department before commencing their harvesting operations. 002 2.6.10 First aid kit and fire extinguisher are not equipped at the manned gate. 5
Recommendations Collector As Trustee: Kawaiyoi Plantation Sdn. Bhd. has demonstrated compliance with the Sabah Legality Standard (FDS-TLAS-002) for its designated area and is recommended to receive a GFS Audit Statement and STCC from FDS. Several recommendations are listed as per the observations highlighted: Checklist 2.1.4: Since the licensee decided to resume its logging operation after the approval of form 1 license extension, the licensee should notify the Wildlife Department a month before the commencement of felling activities. Checklist 2.6.10: To equip one unit of fire extinguisher and complete set of first aid kit at the manned gate in case of any occurrence of accident. The next surveillance audit will be scheduled on September 2017. End of Summary Report 6