Compliance Checklist / Report Sabah Legality Standard Principles 1-4 Licensee Contact Person Office Address Hutan Tropika Sdn. Bhd Sinora Sdn. Bhd. (Logging contractor) Mr. Thien Nyet Leong (D/A Maxland Sdn. Bhd.) Lot 5, 1 st Floor, Block 4, Bandar Indah, Mile 4, Jalan Utara, P. O. Box 2848, 90000 Sandakan, Sabah Reference # G161-078 Date of Report Date of close out Telephone 20 March 2016 - +6089 502981 +6088 867600 (Camp) +6019 813 4423 Fax +6089 215164 Email NA Approved By Dr. Kevin T. Grace Statements GFS Audit Statement # GFS 063 LVS Issuance Date 1 April 2016 Expiration Date 31 March 2017 Assessment Dates 21 24 March 2016 Assessment Details Scope of Assessment Species GFS Lead Assessor GFS Assessor(s) FDS Staff TLAS Principles 1-4: Form IIB Mixed species from clear felling Siti Radiah Mohamad Dayang Hanisah, Salapan Amat Harry T. Ikok (DFO Ranau), Muhd. Asri Bin Muhd. Shitin (ADFO Ranau), Ruslan Ayai (PPD Ranau) 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. Form IIB Hutan Tropika Sdn. Bhd. Page 1
Overview of Licensee Summary Information Sabah has initiated a program for rural development that focuses on the establishment of agriculture crops as well as on communities economic values on communal titled land which is managed by an entity. The resulting dividend payments from the agricultural crops and other community benefits significantly contribute to enhance the livelihood of the rural population who also participate in the agricultural projects, such as rubber and oil palm plantation development. As an initial step of site preparation, the identified agricultural development areas require the harvesting and removal of remaining residual timber stocks. Power of Attorney was given to Sinora Sdn. Bhd. by Hutan Tropika Sdn. Bhd. (license holder) who acts as the developer and coordinator of all operations related to the license area. The parties involved in the management and administration of the licence area under the auspices of the licensee include the following: - Hutan Tropika Sdn. Bhd. license holder - Sinora Sdn. Bhd. - identification, planning, coordination, implementation and monitoring of agricultural development projects - District Forestry Office Ranau (Pejabat Perhutanan Daerah Ranau): Payment of timber royalties and other fees due to Sabah Forestry Department and Alienated Government - Land and Survey Department (Jabatan Tanah dan Ukur Sabah): area survey and delineation, mapping, issue of Community Land Titles Harvesting area delineation: # Compartment # No. Of Blocks Area (Acres) 1 A 7 490 2 B 9 535 3 C 5 314 4 D 7 388 5 E 7 398 6 F 9 560 7 G 5 315 *Harvesting area was controlled by the number of blocks inside the compartment Form IIB Hutan Tropika Sdn. Bhd. Page 2
Environmental context Forest type and history of management The license area is located adjacent to Trus Madi Forest Reserve which is dominated by Mixed Dipterocarp Forest. Principal commercial species - The project area mainly consists of secondary forest, with common tree species including Drybalanops spp. (Kapur), Parashorea spp. (White seraya), Shorea spp. (Red seraya, Yellow seraya), Lithocarpus & Quercus (Mempening), Hopea sangal (Gagil), other Non- Dipterocarp and pioneer species. Other vegetation within the license area includes bamboo, shrubs, palm species, and other secondary vegetation. Existing EIA report - No EIA report is required as the total harvesting area of licence is below 100ha. Social context There are no settlements located within the license area. The nearest villages are Kg. Kodop Lama and Kg. Paus, which are situated about 20 km away from the license area. Scope of Assessment The scope of the evaluation is to verify compliance of Hutan Tropika with the conditions of the Form IIB Permit located in the district of Ranau. 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 Hutan Tropika 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. Date Itinerary of Assessment Activity 21 Mar 2016 Travelling to Ranau, opening meeting at PPD Ranau, and overnight at Ranau 22 Mar 2016 Field visit to Form IIB Hutan Tropika (Sinora) base camp, log landing, and granted license boundary. 23 Mar 2016 Document review and closing meeting 24 Mar 2016 Return to Sandakan Form IIB Hutan Tropika Sdn. Bhd. Page 3
Highlights of Assessment (Major Gaps = 0; Minor Gaps = 0; Observations = 3) Hutan Tropika 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 21-24 March 2016. Current status of operations: Harvesting operation for the whole granted area was completed and currently Sinora Sdn. Bhd. (logging contractor) is in process of selling out the logs. Three observations were also highlighted in regards to: (Checklist 2.1.3): Inadequate implementations of relevant environmental mitigation measures as observed during the assessment. (Checklist 2.1.4): Sinora (logging contractor) has not submitted any notification letter to the Director of Wildlife Department before commencing their harvesting operation as this had not been stated in the EIA requirements or Form IIB Permit. (Checklist 2.1.11): Boundary patrolling activity was conducted by the licensee at the area once a month but no reports are documented. Results: (Compliance = 8; Non-Compliance = 0) No gap was raised against indicators & criteria during the March 2016 assessment. GAP Type Checklist Description - - - - Status of previous outstanding gap. GAP Type Checklist Status Description of close out - - - - - Observations: 2016 OBS # Checklist # Description 001 2.1.3 002 2.1.4 003 2.1.11 Inadequate implementations of relevant environmental mitigation measures as observed during the assessment. Sinora (logging contractor) has not submitted any notification letter to the Director of Wildlife Department before commencing their harvesting operation as this had not been stated in the EIA requirements or Form IIB Permit. The licensee conducted boundary patrolling once a month but no reports are documented. Highlights of Close out visit (if applicable) NA Dates Recommendations Hutan Tropika Sdn. Bhd. has demonstrated compliance with the Sabah Legality Standard (Principles 1-4 v01 dated 13 Nov 2014) for Form IIB harvesting operation and is recommended to receive a GFS Audit Form IIB Hutan Tropika Sdn. Bhd. Page 4
Statement and STCC from FDS. Actions required to address the minor gap and observation identified include: Checklist # Recommendations 2.1.3 Non-biodegradable material such as used tires and tubes should be managed separately and disposed as scheduled waste. 2.1.4 Wildlife Department should be informed for any commencement of harvesting area. 2.1.11 Patrolling activities which being conducted should be reported and maintained. The next surveillance visit is scheduled in Mar 2017. End of Summary Report Form IIB Hutan Tropika Sdn. Bhd. Page 5
****************THIS PAGE IS INTENTIONALLY LEFT EMPTY********************* Form IIB Hutan Tropika Sdn. Bhd. Page 6