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MSPO CERTICATION SUMMARY

REPORT

HAP SENG PLANTATIONS (RIVER ESTATES) SDN

BHD

PLANTATION CENTRAL OFFICE GROUP

STAGE 2 – CERTIFICATION AUDIT

Date: 25/01/2018

TUV NORD (Malaysia) Sdn Bhd No. 20, Jalan Tiara 3

Taman Perindustrian UEP Subang Jaya 47600, Selangor,

Malaysia Phone:+603 8023 2124 Fax: +603 8023 4140

MSPO Certification Summary Report

Company Name: Hap Seng Plantations (River Estates) Sdn. Bhd.

Certifying Unit: Plantation Central Office Group (PCO Group)

Client Number: 92-022

Audit Type: Stage 2 - Certification Audi

MSPO-F04b / Rev 2 2 of 43

Table of Contents

1. INTRODUCTION ....................................................................................................................... 4

1.1. Objective 4

1.2. Scope 4

1.3. Appointment and qualification of team members 4

2. METHODOLOGY ....................................................................................................................10 Table 2-1: List Of Estates Selected

3. ORGANISATION INFORMATION ..........................................................................................12

3.1. Production volume 12

3.2. Planting Program for Each Estate 14

3.3. Replanting program for each estate 16

3.4. Maps of Company Location, Plantations and Organised SmallholdersError! Bookmark not defined.

4. CERTIFICATION ASSESSMENT ...........................................................................................24

4.1. Certification audit Error! Bookmark not defined.

4.2. Stakeholders’ Consultation 24

4.3. Status of Non-Conformities Previously Identified 28

4.4. Detail of Audit Findings Identified During This Audit 28

5. CONCLUSION ........................................................................................................................37

6. RECOMMENDATION .............................................................................................................38

7. REFERENCES ........................................................................................................................39 Table 7-1: Documents provided by Hap Seng Plantation Table 7-2: Background investigation and assessment documents Table 7-3: List Of Interviewed Persons And Stakeholders

Annex / Enclosures 43







Abbreviations

GAP Good Agricultural Practice

MPOB Malaysia Palm Oil Board

MS Malaysian Standard

MSPO Malaysia Sustainable Palm Oil

NC Non Conformance

OBS Observations

P&C Principles & Criteria

PPP Plant Protection Product

SOP Standard Operating Procedure







1. INTRODUCTION

Hap Seng Plantations (River Estates) Sdn Bhd has commissioned TUV NORD Malaysia Sdn Bhd to conduct an initial certification audit for Hap Seng Plantations Group of oil palm estates according to MS 2530-3:2013 Part 3 General principles for Plantations and Organised Smallholders.

1.1. Objective

The objective of this certification audit is to assess the Hap Seng Group Estates by an independent certification body with the aim for compliance of the standards.

1.2. Scope

The certification is based on the documentation established and implemented by the group office and estates.

The supporting documents were provided to the audit team as well as information received by means of interviews and background investigation.

The documents and information were reviewed against the requirements and criteria based on MSPO 2530-3:2013 Part 3 General principles for Plantation and Organized Smallholders.

TUV NORD Malaysia has employed a risk-based approach in the audit, focusing on the identification of significant risks and reliability of the assessment and reporting.

In addition, the following reference was used as part of the assessment; the compliance of the requirements out of the guidelines applied was checked.

1. Malaysian Sustainable Palm Oil Part 3: General Principles for Plantation and Organised Smallholders audit guidance;

1.3. Appointment and qualification of team members

A certification team consisting of one team leader was appointed. The onsite team members contributed to the review of documents, the assessment of the project activity and to the preparation of this report under the leadership of the team leader.

Qualification of the Lead Auditor: Terence Ang

Requirement Qualifications

Post-secondary education, college or university diploma / degree in one of the following

i) Agriculture;

ii) Science & Technology (e.g.

Environmental Sciences, Life Sciences,

Geological Sciences, Natural

Sciences,);

iii) Engineering, Process Technology;

iv) Energy Management, Quality

Management;

Diploma and Advance Diploma in Tourism Management








v) Social Sciences and/or Anthropology;

vi) Business Management; or

vii) Other relevant related fields

At least five (5) years of work experience in the oil palm sector or related field in consultancy / auditing of similar industry or equivalent related to and as necessary for the certification process. (e.g., sustainability, palm oil management; agriculture, ecology; social science)

More than 8 years in sustainable related field

Attended the MS 2530 series of standards training

Successfully completed MSPO, RSPO P & C LA, SCC, RSPO Next and ISCC-EU training.

Conducted at least three (3) MSPO or equivalent sustainability certification audits as Lead Auditor-in-training with a minimum of fifteen (15) man-days under the supervision of a qualified Lead Auditor for MSPO or equivalent sustainability certification schemes within the last two (2) years.

Has conducted 3 MSPO and equivalent sustainability certification (RSPO ) as lead auditor in training

A good knowledge in handling and evaluating sources of information and data. Able to communicate in Bahasa Malaysia or any other local language.

Able to communicate in Bahasa Malaysia, English, and Chinese languages.

Field working experience in the palm oil sector, or demonstrable equivalent

1 year as Certifier and Reviewer for RSPO P&C and SCC schemes

1 year as Wildlife (Biodiversity) and Ecotourism Consultant (EMS &HCV)

3 years as Wildlife Guide (Licensed issued by Ministry of Tourism, Malaysia)

6 months as Field Technician for University of Montana on HC

Good Agricultural Practices (GAP), and Integrated Pest Management (IPM), pesticide and fertilizer use

1 year auditor for RSPO and MSPO schemes

Health and safety auditing on the farm and in processing facilities, for example OHSAS 18001 or Occupational, Health & Safety Assurance System

1 year auditor for RSPO and MSPO schemes

Worker welfare issues and social auditing experience, for example with SA8000 or related social or ethical accountability

Successfully complete SA8000 Basic Training and 1 year auditor for RSPO and MSPO scheme








codes

Environmental and ecological auditing, for example experience with organic agriculture, ISO 14001 or Environmental Management Systems (EMS) or High Conservation Value (HCV)

1 year auditor for RSPO and MSPO scheme

Good Milling Practices for example palm oil milling working experience or demonstrate equivalent.

Trainee auditor for RSPO and ISCC in refinery and mill.

Qualification of Team Members

Requirement Assessor Qualification Compliance

Post-secondary education, college or university diploma / degree in one of the following

i) Agriculture;

ii) Science & Technology (e.g.

Environmental Sciences, Life

Sciences, Geological

Sciences, Natural Sciences,);

iii) Engineering, Process

Technology;

iv) Energy Management, Quality

Management;

v) Social Sciences and/or

Anthropology;

vi) Business Management; or

vii) Other relevant related fields

Leong Sak Kuan Graduate in Science (Physic).

Yes

Wan Jia Ann (Joanne)

Graduate in Environment Management Technology

Yes

Mohamad Norhisham Bin Mohd Salleh

Graduate in Agrobiology

Yes

Zul Hairi Bin Abu Hassan

Graduate in Plantation Industry Management

Yes

At least five (5) years of work experience in the oil palm sector or related field in consultancy / auditing of similar industry or equivalent related to and as necessary for the certification process. (e.g., sustainability, palm oil management; agriculture, ecology; social science)

Leong Sak Kuan More than 6 years as quality manager for ISO 14001 schemes.

Yes


5 years working experience in palm oil estates.

Yes


9 years working experience in estate management.

Yes








Attended the MS 2530 series of standards training

Leong Sak Kuan Successfully complete MSPO Lead auditor training course.

Yes


Successfully complete MSPO Lead auditor training course

Yes



Yes



Yes

Conducted a minimum six (6) on-site audits for a total of at least 20 man-days of audit experience as an auditor-in-training under the direction and guidance of a qualified Lead Auditor for MSPO or equivalent sustainability certification schemes.

Leong Sak Kuan Qualified as auditor base on audit log.

Yes


Qualified as auditor base on audit log.

Yes


Qualified as auditor base on audit log

Yes

A good knowledge in handling and evaluating sources of information and data. Able to communicate in Bahasa Malaysia or any other local language.

Leong Sak Kuan .Bahasa Malaysia, English and Mandarin.

Yes


Bahasa Malaysia, English and Mandarin.

Yes


Bahasa Malaysia and English

Yes


Bahasa Malaysia and English

Yes

Field working experience in the palm oil sector, or demonstrable equivalent

Leong Sak Kuan Working experience as auditor for RSPO and MSPO scheme.

Yes



Yes



Yes








Good Agricultural Practices (GAP), and Integrated Pest Management (IPM), pesticide and fertilizer use

Leong Sak Kuan 3 Years in RSPO P&C related to GAP and IPM.

Yes



Yes



Yes

Health and safety auditing on the farm and in processing facilities, for example OHSAS 18001 or Occupational, Health & Safety Assurance System

Leong Sak Kuan Successfully completed OHSAS 18001 and Working experience as auditor for ISO 14001 and ISO 9001.

Yes

Worker welfare issues and social auditing experience, for example with SA8000 or related social or ethical accountability codes


Successfully completed Basic SA 8000 training and qualified as RSPO and MSPO sustainability auditor.

Yes


Successfully completed Basic SA 8000 training and qualified as RSPO and MSPO sustainability auditor.

Yes

Environmental and ecological auditing, for example experience with organic agriculture, ISO 14001 or Environmental Management Systems (EMS) or High Conservation Value (HCV)

Leong Sak Kuan Successfully completed ISO 14001 training and auditing experiences.

Yes


Successfully completed EMS ISO 14001: 2015. Involved in RSPO, ISCC, MSPO Audit with work experience in waste management handling.

Yes

Mohamad Norhisham Bin

Successfully completed EMS ISO

Yes








Mohd Salleh 14001: 2015 Lead Auditor training.


Successfully completed EMS ISO 14001: 2015 Lead Auditor training.

Yes

Good milling Practices for example palm oil milling working experience or demonstrate equivalent.


Has involved in auditing for RSPO SCC standard

Yes







2. METHODOLOGY

The audit approach consists of the following steps:

Contract review;

Appointment of team members and technical reviewer;

Contact client for relevant documentation according to the applicable MSPO standards;

Audit planning;

Background investigation, desk review of submitted documents;

On-Site assessment, inspections, interviews with operational personnel, stakeholders and its contractors; review of documentation;

On-site reporting

Resolution of non-conformance (NC) (if any)

Draft audit reporting

Technical review

Final audit reporting

Peer review

Address Peer Review Comments (if any)

Final approval and issuance of certificate.

The certification audit was conducted in 23-27/10/2017 stages in accordance to the certification procedure.

Stage 2:

The certification audit was conducted on 23/10/2017 to 28/10/2017 covers the following activities but not limited to below:

Onsite visit, observations and inspections of estate facilities and field activities;

Interview operation personnel and field workers for understanding for the work assigned;

Reviewed revised and updated documentation established and implemented;

Operating records;

Training records;

Reports established;

Work plans established;

Stakeholders consultation meeting;

Review and closed out of non-conformance raised during stage 1 audit;

Assessment reporting;







For list of all reviewed documents refer to chapter 7, Table 7-1.

For list of personnel participated in the audits refer attendance sheet and Table 7-3.

On-site Assessment

The audit of the estates was conducted according to the MS 2530-3:2013 Part 3 for Plantation and Organized Smallholders.

The methodology for collection of objective evidence included physical site inspections, observation of tasks and processes, interviews of stakeholders, communities, staff, workers and their families, review of documentation and data. Checklists and questionnaires were used to guide the collection of information. The comments made by external stakeholders were also taken into account in the assessment.

For the certification audit, the selected estates were based on the formula S = √n x r where S = sample size, r = risk factor and n = number of estates which is in accordance to MSPO certification procedure. The number of estates in the group is 13.

Based on the formula, the sample size for the estate S = 3.6, therefore round up to the next integral of 4 estates. The risk factor applied is low since the group is RSPO and ISCC certified Thus, a total of 4 estates were selected for the onsite assessment and inspection as listed in Table 2-1 below:

Table 2-1: List of Estates Selected

Name of Estate Coordinates

Bukit Mas Estate 5.317339°N, 118.463148°E

Northbank Estate 5.435168°N, 118.654639°E

Tagas Estate 5.363139°N, 118.637278°E

Lokan Estate 5.431056° N,118.382723°E

Non-conformance:

On the basis of the desk review, evidences presented during the audits as well as from the onsite visits non-conformance (NC) Major or Minor as well as Observations (OBS) may be raised during the audit.

Major non-conformance shall be addressed and responded with 60 days from date of audit. Minor NC and OBS will be reviewed and verified during the next audit. All Minor non conformities shall be submitted with action plan prior to the issuance of certificate.







3. ORGANISATION INFORMATION

The certified estates are owned by Hap Seng Plantation located at the Tawau, Sabah. The details of the 13 estates as below:

3.1. Production volume

Name of Estate Location Coordinates

Tomanggong Estate 80km off Jalan Jeroco, Lahad Datu Sabah

5.400528°N, 118.664362°E

Litang Estate 80km off Jalan Jeroco, Lahad Datu Sabah

5.325446°N, 118.574529°E

TagasEstate 80km off Jalan Jeroco, Lahad Datu Sabah

5.363139°N, 118.637278°E

Northbank Estate 80km off Jalan Jeroco, Lahad Datu Sabah

5.435168°N, 118.654639°E

Tabin Estate 80km off Jalan Jeroco, Lahad Datu Sabah

5.379779°N, 118.711723°E

Batangan Estate 50km off Jalan Jeroco, Lahad Datu Sabah

5.412140°N, 118.449945°E

Lokan Estate 50km off Jalan Jeroco, Lahad Datu Sabah

5.431056°N, 118.382723°E

Kapis Estate 50km off Jalan Jeroco, Lahad Datu Sabah

5.442862°N, 118.414167°E

Lungmanis Estate 50km off Jalan Jeroco, Lahad Datu Sabah

5.479529°N, 118.403139°E

Lutong Estate 50km off Jalan Jeroco, Lahad Datu Sabah

5.365445°N, 118.440611°E

Bukit Mas Estate 40km off Jalan Jeroco, Lahad Datu Sabah

5.317339°N, 118.463148°E

Sungai Segama 1 Estate 40km off alan Jeroco, Lahad Datu Sabah 5.317339°N, 118.463148°E

Sungai Segama 2 Estate 40km off Jalan Jeroco, Lahad Datu Sabah

5.317339°N, 118.463148°E

Name of Estate Area (Ha) Projected FFB Production (mt)

(November 2017 to October 2018) Total* Production**

Tomanggong Estate 2,654.80 2,407.00 33,900.00

Litang Estate 2,648,62 2,474.70 51,300.00

TagasEstate 2,212.33 2,019.00 50,695.00

Northbank Estate 2,235.30 2,028.00 41,400.00

Tabin Estate 3,054.58 2,913.80 61,100.00

Batangan Estate 3,632.88 3,394.00 70,100.00







*includes productive and non-productive area (infrastructures, conservation, HCV, housing & office compound use, set aside area etc.)

**Immature + Mature Area

Lokan Estate 3,155.39 2,837.00 44,800.00

Kapis Estate 2,681.00 2,342.00 36,000.00

Lungmanis Estate 2,200.00 1,955.00 36,310.00

Lutong Estate 2,448.40 2,194.00 38,718.00

Bukit Mas Estate 4,733.00 2,378.58 92,867.00

Sungai Segama 1 Estate 2,578.00 2,106.00 20,120.00

Sungai Segama 2 Estate 2,596.00 4,258.00 41,483.00

Total: 34,181.68 33,307.08 618,793.00

3.2. Planting Program for Each Estate

Year / estate Tomanggong Estate

Litang Estate

Tagas Estate

Northbank Estate

Tabin Estate

Batangan Estate

Lokan Estate

Kapis Estate

Lungmanis Estate

Lutong estate

Bukit Mas Estate

Sungai Segama Estate 1

Sungai Segama Estate 2

1992 - - - - - - - - - - - 1,422.56 -

1993 - 614.50 - - - - - - - - 21.00 - 702.00

1994 324.50 397.9 189.00 - - - - - - - 1,127.50 - 884.50

1995 - - - - - - 239.00 - 1,032.00 157.00 1,378.00 - 112.70

1996 348.50 185.00 - - - - - 796.00 923.00 - 1,600.00 - -

1997 101.00 321.50 668.00 - - - - 373.00 - - - -

1998 401.50 - 414.00 350.00 439.00 521.00 - - 109.50 - -

1999 - - 234.50 205.00 - - 1,309.00 - - - 16.00 40.44 136.60

2000 - - 328.50 255.00 - - - - - - - - 198.40

2001 - - - - - - - - - - 6.00 25.50

2002 - - - - 294.07 - - - - - - - 10.50

2003 - - - - 235.32 - - - - - - - -

2004 - - - - 267.00 450.00 - - - 42.00 - - 29.80

2005 - - - - - - - - - - - - 3.00

2006 - - - - - 388.00 - - - 456.00 - - -

2007 - - - 99.00 - - - - - 159.00 - - -

2008 - - - 185.00 605.80 151.00 - - - - - - 3.00

2009 - - - 357.00 433.10 148.00 - - - - - - -

2010 - - - - 465.00 280.00 - - - - - - -

2011 - 236.00 - 324.00 499.14 682.00 - - - 157.00 - - -

2012 - 719.50 - 253.00 - 458.00 - - - 146.00 - - -

2013 - - - - - 406.00 - - - 306.00 - - -

2014 393.20 - - - - 151.00 244.00 - - 318.00 - - -







Total Mature

1,568.70 2474.40 1,834.00 2,028.00 2,799.43 3,114.00 2,231.00 1,690.00 1,955.00 1,741.00 4,258.00 1,463.00 2,106.00

2015 143.00 146.30 - - 75.78 280.00 149.00 - - 303.00 - - -

2016 352.00 - - - - - 296.00 392.00 - - - 385.00 -

2017 343.30 39.00 - - - - 161.00 260.00 - 150.00 - 458.50 -

Total Immature

838.30 185.30 - - 75.78 280.00 606.00 652.00 - 453.00 - 843.50 -

Total Oil Palm

2,407.00 2,474.70 1,834.00 2,028.00 2,875.21 3,394.00 2,837.00 2,342.00 1,955.00 2,194.00 4,258.00 2,378.50 2,106.00

3.3. Replanting program for each estate

Year of replanting/

Name of estate

Planted area (ha) in each estate Total area to be replanted

(ha) 2018 2019 2020 2021 2022

Tomanggong Estate - - 324.50 - 348.50 673.00

Litang Estate - 614.50 - 397.90 - 1,012.40

TagasEstate - - - 189.00 - 189.00

Northbank Estate - - - - - -

Tabin Estate - - - - - -

Batangan Estate - - - - - -

Lokan Estate 239.00 - - - - 239.00

Kapis Estate - - - 348.00 348.00

Lungmanis Estate 267.00 - 444.00 321.00 337.00 1,369.00

Lutong Estate - - - - - -

Bukit Mas Estate - - - - 290.50 290.50

Sungai Segama 1 Estate 476.00 491.00 541.00 - - 1,508.00

Sungai Segama 2 Estate 500.50 203.00 703.50

TOTAL 982.00 1,105.50 1,309.50 1,408.40 1,527.00 6,332.40







3.4. Maps of Company Location, and Plantations







4. CERTIFICATION ASSESSMENT

4.1. Certification Audit

The objective of the certification audit is to assess the activities of the estate are in compliance with MS 2530-3:2013 Part 3 General principles for Plantations and Organised Smallholders.

During this certification audit, 4 non-conformances were raised. There were 7 Observations (OBS) rised for improvement that will be assessed and verified during annual surveillance 1.

The details assessment of the Principles & Criteria, refer to P & C audit report attached to this summary report.

Stage 1:

According to the Certification Scheme, operators who have obtained at least one international sustainability schemes for e.g. ISCC, RSB or RSPO certification are exempted from Stage I audit. In the aspect Hap Seng Plantations group, all estates have been certified to RSPO and ISCC schemes therefore, accepted by MPOCC for exemption of stage 1

Therefore, in this aspect, Hap Seng Plantations Central Office as the group manager and its 13 estates are exempted to undergo Stage I.

The audit team has applied the Malaysian Sustainable Palm Oil Part 3: General principles for oil palm plantations and organized smallholders audit guidance to assess the established documents against the Principles and Criteria of the standard.

4.1.1. Stage 2:

The Stage II audit was conducted on 23/10/2017 to 28/10/2017 covering 4 selected estates – Bukit Mas Estate, Northbank Estate, Tagas Estate, and Lokan Estate

During the Stage II audit, 2 Major NCs and 2 Minor NCs were raised. The responses to the findings were reviewed and closed out by means of documents reviewed and verifying documents that are established and implemented appropriately.

4.2. Stakeholders’ Consultation

A stakeholders’ consultation meeting was conducted on 23/10/2017 to gather information from the local communities in accordance to Certification Scheme and Stakeholder Consultation requirements.

The topics of discussion are as below:

1. Introduction of Hap Seng Plantation applying for MSPO certification.

2. Development of oil palm plantations by Hap Seng Plantations

3. Community service and support provided by Hap Seng Plantations

4. Wildlife management and wildlife corridor established by Hap Seng Plantations.

5. Type of wildlife sighted at Hap Seng Plantations and wildlife corridor.

6. Local communities’ development.







The following relevant Principles & Criteria of the applied standard have discussed during the stakeholders’ consultation:

1. Principle 2 Criteria 2 Indicator 1: Consultation and Communication with stakeholders:

The stakeholders could confirm they have attended meetings with SSB personnel on MSPO certification.

2. Principle 4 Criteria 2 Indicator 3 & 4: A complaint form should be made available at the premises, where employees and affected stakeholders can make a complaint

The stakeholders’ advice they have been informed a logbook and form is available to lodge any complaints or suggestions is available at the office.

3. Principle 4 Criteria 3 Indicator 1: Contribute to local development in consultation with the local communities.

The stakeholders could confirm the company has provided assistance and support to communities.

4. Principle 6 Criteria 4 Indicator 1: Where contractors are engaged, they shall understand the MSPO requirements and shall provide the required documentation and information

The stakeholder who provides maintenance and service could confirm briefing on MSPO requirements have been provided.

There is no issues raised during the stakeholder’s consultation in terms of tenure and/or use rights, social or environmental aspects of management and operations that need to be addressed by the certified unit. It can be concluded the relevant Principles and Criteria clauses of the applied standard are in compliance.

Prior to the audit, a desktop study conducted on Hap Seng using website and available report in concerning of environmental and social issue. During this review, we have concluded that Hap Seng does not have incident where will post a risk to the certification. ISCC certification have been conducted by TUV NORD Malaysia which is also conducting the MSPO audit.

The list of stakeholders who attended the meeting refer to Table 7-3

Items Subject discussed Audit team findings Company response and proposed action to be taken

1 Any information from Group Manager/Company [thereafter known as GM] in regards to the MSPO/RSPO audit?

Interviewed stakeholders were aware of the certification scheme taken by Hap Seng Plantations Group. They also aware of other scheme certificates held by Hap Seng Plantations Group other than MSPO such as RSPO And ISCC

Positive comment

2 Social context During the consultation, it was noted that there was a school SK Tomanggong assisted by Hap Seng Plantations Group. It was also noted that there has

Positive comment








no discipline problem arise at the plantation due to influence from worker. This is well noted even the school is situated in the plantation.

Villages on the surrounding are in good relation and have confirmed that job opportunities for the younger generation in this location.

Neighbouring plantations have also good relationship with the management and there have not been any social issues arise between workers who ae mainly foreigners.

When asked on child labour, there is no child working for the plantations. It could have been years ago if this had happened.

3 Understanding of “NCR Land”?

A few attendees from different group have noted that there have been no issue concerning NCR land arise. In the previous issue of “Tanah Perkuburan” the villages have informed that they admit the land have taken into Hap Seng Planttions Group territory. Nevertheless, they have applauded the effort and cooperation from Hap Seng and their management in handling the issue and the assistance that they have provided to the local villages concerning this piece of land.

Positive comment

4 Economy / livelihood

Is there any impact on livelihood after the introduction of MSPO/RSPO?

Local villagers have confirmed the opportunity of work have increase in relation to Hap Seng Plantations Group of companies. Many of the younger generation are now working with Hap Seng which have been a great impact to the livelihood of the people and have been applauded by the attendees.

Positive comment








6 HCV and environmental understanding

The attendees are clear on the HCV and environmental issue. Some have confirmed on the training they have been provided which is very educational.

Positive comment

7 Awareness towards species, habitats, and high conservation values?

They are aware of the habitat and conservation value of the site.

Internal stakeholders could name the animals which are listed as protected and mention in the training. It was confirmed from interviews that there have been no hunting.

Interview with Jabatan Hidupan Liar confirmed that there has been no complaint on Hap Seng and hunting have not been noted in the area. It was mention by the 2 officers that Hap Seng have taken great step in handling human wildlife conflict of which have been a great success. It was confirmed that the conflict have not arise for the year 2017.

Positive comment

8 Support to smallholders Attendees from other estates have mention that Hap Seng have provides great support and cooperation. They are thankful and hope that this good relation will continue.

Positive comment

9 FFB quality There has been no complaint on quality of FFB. Although they have mention that Hap Seng have a strict grading, they also confirmed that they are abiding to the quality of hap Seng and are glad that Hap Seng also provide training to improve their FFB harvesting.

Positive comment

11 Do you consider any management is in conflict with the MSPO principles and criteria?

All attendees confirmed they have been no conflict with MSPO principles.

Positive comment

12 Do you have any Most of the stakeholders Positive comment








suggestions for management? Other matter

acknowledge they are satisfied with Hap Seng and have a good relationship and cooperation given.

Although one of the attendees mention it will be great if some of the road Hap Seng can reconsidered for safety. In addition to this, it is also noted on that Hap Seng effort have been well recognize in road management

School suggestions have been taken up which have been a much delight to the School management. It was confirmed by the school representative, the school management have involve them in many of the stakeholder process.

4.3. Status of Non-Conformities Previously Identified

The stage 1 audit findings of this system have been reviewed, in particular to assure appropriate corrections and corrective actions have implemented to address the identified audit findings. Details of the follow up action taken on stage 1 audit findings were recorded in the Stage 1 audit report.

The last audit results of this system have been reviewed, in particular to assure appropriate corrections and corrective actions have implemented to address any nonconformity identified.

The last audit results of this system have been reviewed, in particular to assure appropriate corrections and corrective actions have not been implemented effectively. The non-conformity will be re-raised.

X Not applicable. No non-conformity raised in previous audit.

Note 1: If a minor non-conformity raised in last audit, is not closed out, then this finding will be re-raised to a Major non-conformity.

Note 2: All minor NCs raise in last audit are required to capture in this report together with the closing of the non-compliance.

4.4. Detail of Audit Findings Identified During This Audit

This section gives an overview of the non-conformities raised during this audit.

AUDIT OUTCOME

MAJOR Non-Conformities 2

MINOR Non-Conformities 2

Observations 6

Non Conformity Number < 01 >








Indicator: 4.2.2.1 Procedure shall be established for consultation and communication with the relevant stakeholder.

Location All estate

Description of Finding / Objective Evidence: 4.2.2.1

Hap Seng have made the announcement available in their own notice board. However, on their procedure for List of publicly available document have not been clearly followed.

Certificate was not updated and have expired. There is also policy which was not updated where MSPO policy was not made available. Public announcement for the audit was also not updated and uploaded into the website to announcement to stakeholder for the audit. This is also required by MSPO requirement.

Classification Major Minor Observation

Deadline for

implementation 27/12/2017

Root Cause Analysis (by company):

Lack of understanding on MSPO's full requirement for the publicly available document.

Correction (by company):

To immediately obtain approval from Top Management to make available the relevant document on the company website. Approval is obtained on 10.11.2017. (Attachment 1.1 M)

The Sustainable Agriculture Policy, MSPO Policy and Occupational Safety and Health Policy are uploaded in the website as below.

https://www.hapsengplantations.com.my/download/sustainabilitypolicy/sustainable-agriculture-policy

Corrective / Preventive Action (by company)

The independent Sustainability Team will monitor quarterly whether the updated relevant document is timely uploaded to the company website by the group compliance personnel.

Review of Correction & Corrective / Preventive Action

The website was reviewed and the document required have been uploaded in the website including MSPO policy, The Preventive action is deemed to be sufficient to ensure continuous compliance. The NC is closed.

Closed: Yes No Site verification : Yes No

Name of Lead Auditor:

Terence Ang

Date of Closure:

27/12/2017

Review of Implementation for Major NC (where applicable)

Closed: Yes No

Name of Lead Auditor / Auditor:

Date of Closure:


https://www.hapsengplantations.com.my/download/sustainabilitypolicy/sustainable-agriculture-policy








Indicator: 4.6.1.1 Standard operating procedures shall be appropriately documented and consistently implemented and monitored.

Location All estate

Description of Finding / Objective Evidence:

Incorrect amount of chemicals was used for mixing, e.g. 60 litres of glyphosate used for 52 containers (1.15 litres per container) dated 05/09/2017 and 20 litres of glyphosate used for 27 containers (740 ml per container) dated 28/08/2017. Specification was 375 ml per container. (Northbank estate)

2000 gm of Ally was used for 160 containers (12.5 gm per container) dated 17/10/2017, specification was 24 gm per container. (Lokan estate)

Chemical mixing was not recorded on 10/10/2017 & 13/10/2017 for Garlon, and 13/10/2017 & 19/10/2017 for Dewana. (Bukit Mas estate).

Chemical mixing was not recorded on 10/10/2017 for Basta. (Tagas estate)

Incorrect amount of calcium hydrochloride (chlorine) was added to the water treatment process, eg. for the month of October, 7.73 gm was added everyday instead of 800 gm. (Lokan estate)

The formulations for chemical mixing could be improved by indicating the different type of chemicals that need to be mixed for each type of weeds.


Deadline for



Incorrect amount of mixing and no mixing record are due to lack of supervision and training from management.


Estate Management to immediately assign a desinated personnel (Assistant Manager) to monitor the correct pre-mixing book record is implemented.

Estate Management has rectified the issue by providing immediate training on the 30th October 2017 to the chemical mixing operator.

Estate management has rectified the issue by providing immediatte training on the 30th October 2017 to the Water Treatment Plant operator.

(Attachment 2.1 E - Northbank Estate)

(Attachment 2.2 E & 2.6 E - Lokan Esatate)

(Attachment 2.3 E & 2.4 E - Bukit Mas Estate)

(Attachment 2.5 E - Tagas Estate)

The training evidences were shown in Attachment 2 (E) and Attachment 3 (E).


The independent Sustainability Team to cross-check the improvement on the availability of chemical usage record and correct chemical mixing formula (as per OPAP) at 6-montly interval.









Sighted training report, attendance record, chemical issuance, photos of training, chemical inventory and chemical mixing formulation for Northbank estate (23.11.17) and Lokan estate (30.11.17).

Sighted training report, attendance record, photos of training and WTP chemical issuance records for Lokan estate (30.10.17)

Sighted chemical issuance and inventory records for Bukit Mas and Tagas estates.

Training were sighted for Bukit Mas and Tagas estates’ personnel.


Name of Auditor:

SK Leong

Date of Closure:

27/12/2017


Closed: Yes No

Name of Lead Auditor / Auditor: Date of Closure:


Indicator: 4.4.4.2: The occupational safety and health plan shall cover the following:

b) The risks of all operations shall be assessed and documented

i) Employee trained in First Aid should be present at all field operations. A first aid kit equipped with approved contents should be available at each worksite.

Location All estate


Point 1

The risk assessment HIRARC have been conducted. Hap Seng have included element of likelihood, severity and risk in to the assessment. The action plan following to this have been set up. HIRARC have also included the action plan and all required action to be conducted. However, the plan did not clearly segregate according to the risk specify. Therefore, to avoid confusion from reader the management can consider separating the action plan according to the risk.

Point 2

.First aid has been sighted in all operation of work. First aid training record

Dated 21 July 2017

Total of 16 personal have been train.

However, not all the field worker group have a trained personal. Total of 12 group including harvesting, manuring and spraying which trained field personal is only 8 personal.


Deadline for










Point 1

Lack of understanding on the requirement that action plan for the HIRARC is needed to be segregated based on the individual hazard risk.

Point 2

The estate management not include all of the harvesting, manuring and spraying team in the training program. The representative other 4 team was missed out from First Aid Training.


Point 1.

To immediately segregate the Action Plan of the HIRARC based on the individual Hazard Risk.

Point 2.

To immediately conduct first aid training for the remaining spraying, manuring and harvesting group that not yet been train.


Point 1.

HIRARC will be yearly monitored by Sustainability Team through internal audit to ensure the Action plan of the HIRARC segregated based on individual Hazard Risk.


Action plan have been reviewed and is sufficient to address the NC. The actual implementation will be reviewed in the next audit.


Name of Auditor:


Date Review Action Plan:

27/12/2017


Closed: Yes No

Name of Lead Auditor / Auditor: Date of Closure:


Indicator: 4.5.3.2: A waste management plan to avoid or reduce pollution shall be developed and implemented. The waste management plan should include measures for:

Location Northbank Estate









Point 1

During the site visit in the housing quarters, it was noted that the recycle rubbish bin contain motor oil. This was to be recorded as schedule waste and to be disposed through schedule waste requirement.

This however have only occurred in Northbank estate. Other estates have been well managed. Further review on the site show this is an isolated case.

Point 2

The wastewater from washing of fertilizer bags could be channelled to the land instead of to the drain.

Point 3

The wastewater from washing of chemical containers could be reused for chemical mixing.


Deadline for



Point 1

Due to during the CePSWaM training, our competent person was taught that the waste from housing area shall not be categorized as schedule waste.

Point 2 & 3

Lack of understanding by estate that wastewater from washing of chemical containers could be reused for chemical mixing.


Pont 1

To immediately dispose the motor oil under schedule waste.

Point 2 & 3

Estate have immediately practised the wastewater from washing of chemical containers could be reused for chemical mixing.


Point 1

The independent Sustainability Team to cross-check the compliance of schedule waste under regulation at monthly internal

Point 2 & 3

The independent Sustainability Team to cross-check the wastewater from washing of chemical containers could be reused for chemical mixing of monthly internal.


Correction and corrective action were reviewed and found to be adequate.

To verify compliance in next audit.


Name of Auditor:

SK Leong


27/12/2017









Closed: Yes No


Date of Closure:

Observation < 01 >

Indicator: 4.1.4.1: The action plan for continual improvement shall be based on consideration of the main social and environmental impact and opportunities of the company.

Location All estate


Social and environment impact assessment have been conducted. In the same report they have placed in details of improvement, mitigation and action plan. However, in there is no proper segregated action plan and improvement plan. It is not clear to the team and auditor on the word used to be “continuous”.


Action plan accepted. Implementation to be reviewed in the next surveillance.



Terence Ang


27/12/2017

Observation < 02 >

Indicator: 4.4.2.2: The system shall be able to resolve disputes in an effective, timely and appropriate manner that is accepted by all parties.

Location All estate


The management could consider to separate the housing maintenance request apart from complaint form.




Name of Auditor:

Mohamad Norhisham Bin Mohd salleh


27/12/2017

Observation < 03 >

Indicator: 4.4.4.2 The risks of all operations shall be assessed and documented.

Location Northbank estate








Observation < 03 >

Soil erosion was detected at the gen-set location. The risk of landslide need to be taken into account.




Name of Auditor

SK Leong


27/12/2017

Observation < 04 >

Indicator: 4.5.3.5 Domestic waste should be disposed as such to minimise the risk of contamination of the environment and watercourse.

Location Bukit Mas estate


The old landfill need to be monitored in order to ensure that there are no landslide, scavenging by animals and other factors that could affect the condition of the landfill. Signage need to be free from vegetation cover.





SK Leong


27/12/2017

Observation < 05 >

Indicator: 4.5.5.1 The management shall establish water management plans to maintain the quality and availability of natural water resources (surface and ground water).

Location Northbank estate


The practice of adopting the WHO drinking water standard need to be reviewed due to the absence of specifications for several critical parameters, eg. suspended solids, oil & grease, turbidity, pH, colour, E-coli and coliform count.





SK Leong


27/12/2017

Observation < 06 >

Indicator: 4.5.6.1: Information shall be collated that includes both the planted area itself and relevant wider landscape-level considerations (such as wildlife corridors).

Location All estate







Observation < 06 >


However, during the audit, site observation has resulted to many other wildlife of which not recorded. camera trap has

only restricted in the area and not beyond the area. There is a monitoring conducted by month however the above have not been able to be detected. The management can consider used different methodology to obtain information for identification.

The management can actually consider more input from the worker in the field





Terence Ang


27/12/2017







5. CONCLUSION

Hap Seng Plantations (River Estates) Sdn Bhd has commissioned TUV NORD (Malaysia) Sdn Bhd to conduct certification audit for Hap Seng Plantations Group of 13 oil palm estates according to MS 2530-3:2013 Part 3 General principles for Plantations and Organised Smallholders.

The were 2 Major NCs, 2 minor NCs and 7 observations found this audit. All major NCs raised was closed out successfully. The remaining, Minor NCs and Observations raised in this audit has been addressed with action plan and will be verified in the next surveillance audit.

From the review of the standard operating procedures, relevant forms, work flow charts established and implemented; the subsequent background investigation and interviews conducted during this surveillance audit have provided TUV NORD Malaysia with sufficient evidence on the fulfilment of the applied standard Principles & Criteria.

In conclusion the certified unit has been established, implemented and continued to improve in managing the estates are in line with the Principles & Criteria of the applied standards of MS 2530-3: 2013 Part 3.

Any audit is based on sampling within an organization’s management system and therefore is not a guarantee of 100 % conformity with requirements.

As a result of this Certification audit, the audit team confirms that:

Total certified number of estates: 13

Total certified production area: 30,472.50 Ha

Certified FFBs January to December 2017: 547,603.87 mt







6. RECOMMENDATION

The audit team conducted a process-based audit focussing on significant aspects/risks and objectives required by the standard(s). The audit methods used were interviews, observations, sampling of activities and review of documentation and records.

The structure of the audit was in accordance with the audit plan included in to this summary report as annex.

The audit team concludes that the organisation has established and maintained its management system in line with the requirements of the standard(s) and demonstrated the ability of the system to achieve requirements for products and/or services within the scope and the organisation’s policy and objectives.

Therefore, the audit team recommends that, based on the results of this audit and the system’s demonstrated state of development and maturity that this management system certification be

X Recommended for Certification

Recommended for Continuity of Certification

Recommended for Suspension of Certification

Subang Jaya, 01/01/2018

Subang Jaya, 25/01/2018

Terence Ang

TUV NORD Malaysia Sdn Bhd

Audit Team Leader

Cheong, Chun Yuen (Robert)

TUV NORD (M) Sdn Bhd

Technical Reviewer







7. REFERENCES

Table 7-1: Documents provided by Hap Seng Plantations (River Estates) Sdn. Bhd.

Client Reference Document

MSPO Policy dated 24/03/2017

Safety and Health Policy dated 01/04/2015

Human Right Policy dated 01/10/2016

Equal Opportunity Policy dated 22/03/2017

Prevention and Eradication of Sexual Harassment Policy dated 28/09/2010

Freedom of Association Policy dated 22/03/2016

Child Labour Policy 2017

Zero Burning Policy 2017

Internal Audit Report 2017

Management Review 2017

Social Impact Assessment and Continuous Improvement Plan Sg. Segama Group of Estates 2017

Social Impact Assessment and Continuous Improvement Plan Tomanggong Group of Estates 2017

Social Impact Assessment and Continuous Improvement Plan Jeroco Group of Estates 2017

Standard Operating Procedure for Supply Chain dated 23/08/2012

Complaint Procedure HSPSB P1 1120 b updated 04/07/2011

Joint Consultation Committee Meeting Minutes 2017

Safety and Health Meeting minutes 2017







Client Reference Document

Environmental Impact Assessments 2017

Safety and Health training records

Carta Aliran Laporan Aduan Hap Seng Plantation Sdn. Bhd

Water Management Plans 2017

Oil Palm Agricultural Policy 01-15

Replanting programme documents

Table 7-2: Background investigation and assessment documents

Reference Document

Malaysian Sustainable Palm Oil Part 3: General Principles for Plantations and Organized Smallholders

MSPO Certification Scheme Doc. No: MPOB/MSPO/CS/01

Environmental Quality Act & Regulation –Act 127

Environmental Quality (Scheduled Wastes) Regulations 2005

Environmental Quality (Clean Air) Regulations1978

Factories and machinery Act,1967

Factories and machinery act with regulations – Act 139

Estate Hospital Assistance(registration)-Act 1965

Akta Keselamatan dan kesihatan Pekerjaan dan peraturan-peraturan-Akta 514

OSHA (Classification, labelling and Safety data Sheet of Hazardous Chemicals) Regulations 2013

Employment Act 1995

Employees Social Security Act 1969-Act 4 (Socso

Land Ordinance 1972 (Cap.68)







Reference Document

Workers Minimum Standards of Housing & amenities Act 1990 Act 446

Malaysian Palm Oil Board Act 1997-Act 582

Minimum Wage Order 2016

Wildlife Conservation Enactment 1997

Table 7-3: List Of Interviewed Persons And Stakeholders

No. Name Organisation / Function

1 Sabperi B.A Adanan SK Tomanggong

2 Salleh Tahir Jabatan Hidupan Liar

3 Rayner Benedict Jabatan Hidupan Liar

4 Wong Wan Fatt CNY Chemical Engineering

5 Arimuddin Labiru Pacm Mach Sdn Bhd

6 Eldi Jay M&M Sdn Bhd

7 S. Mariappan First Raintree Sdn Bhd

8 Mohd Ejandi Baham PLE Plantation

9 Delvan Manikan LPC Plantation

10 Mansor Hj Salam Bulat Kretam

11 Jais Silimal Bulat Kretam

12 Hamsah Lahita Kg Litang







No. Name Organisation / Function

13 Abd Hama B. Abd Karim Kg Litang

14 Daniel Hap Seng (Internal stakeholder)

15 Yohanis Hap Seng (Internal stakeholder)

16 Adi Putra Hap Seng (Internal stakeholder)

17 Amir Hap Seng (Internal stakeholder)

18 Rudin Hap Seng (Internal stakeholder)

19 Aiman Hap Seng (Internal stakeholder)

20 Jusman Hap Seng (Internal stakeholder)

21 Saha Hap Seng (Internal stakeholder)







Distribution / Confidentiality / Rights of ownership / Limitations / Responsibilities / Audit Objectives

This report is sent to the certification body or bodies, the members of the audit team and the audit representative of the organisation. All documents (such as this report) regarding the certification procedure are treated confidentially by the audit team and the certification body. This audit report remains the property of the certification body.

An audit is a procedure based on the principle of random sampling and cannot cover each detail of the management system. Therefore nonconformities of weaknesses may still exist which were not expressly mentioned by the auditors in the final meeting or in the audit report.

The responsibility for continuous effective operation of the management system always rests solely with the audited and certified organisation. Salvo clause: The audit report will be left to the organisation at the end of the audit - subject to approval by the certification body. The independent release process may cause modifications or additions. In these cases a modified revision will be sent to the audited organisation.

The objective (goal) of the audit is to establish compliance of the management system of the aforementioned organization with the requirements of the aforementioned standard in order to achieve or maintain certification through an independent and accredited certification body. Identification of possibilities to improve the management system can also be a component of the audit and is considered simply to be an enhancement; it does not constitute consultancy or advice with regard to the management system.

Annex / Enclosures

Annex / corresponding audit documentation

P&C Audit Report / Checklist(s)

Audit Plan

Additional annexes, number

Malaysia Sustainable Palm Oil – MS 2530-3:2013 Part 3 for Plantation and Organized Smallholders P & C Audit Report

Company Name: Hap Seng Plantations (River estates) Sdn. Bhd. Client No: 92-022

Certifying Unit: Plantation Central Office Group (PCO Group) Audit Type: Stage 2 Certification

MSPO-F05b / Rev 2 Page 1 of 86

,

Item Description

1. Company Name Hap Seng Plantations (River Estates) Sdn. Bhd.

2. Certifying Unit Plantation Central Office Group (PCO Group)

3. Address Batu 2, Jalan Kastam Baru, 91119 Lahad Datu, Sabah, Malaysia

4. Contact Tel:+6089-278183 Fax:+6089-2172 5286 Website: http://www.hapsengplantations.com.my

5 Location of plantation / estate

Refer to the certification summary report

6 Geo Coordinates of plantation / estate

Refer to the certification summary report

7 Contact Person Name: Kee Keow Chong Tel:+089-278183 Mobile::+6019-553 2412 Email: [email protected]

8 Date of Audit 23/10/2017 – 28/10/2017

9. Audit Team Members

Team Leader /LA Terence Ang

Auditor Member Leong, Sak Kuan ; Wan, Jia Ann (Joanne) ;Mohamad Norhisham Bin Mohd Salleh ; Zul Hairi Bin Abu Hassan (Trainee)

Expert / Trainee / Observer Cheong, Chun Yuen (Robert)





Clause Principle & Criteria

Verification Guidance Guidelines Findings & Comments Conformity Yes / No

4.1 Principle 1 Management Commitment & responsibility

4.1.1 Criterion 1 Malaysian Sustainable Palm Oil (MSPO) Policy

4.1.1.1 Indicator 1 A policy for the implementation of MSPO shall be established

(MAJOR)

- Policy should be signed by top management (e.g. CEO, Plantation Director)

- Commitment towards a systematic approach to ensure sustainable production of palm oil

- Commitment towards sustainable development and continuous improvement

- Communicated to all employees

- Interview of personnel and stakeholders whether they are aware of the MSPO Policy and its implementation at the site

Policy sighted and displayed at the notice boards of estates audited and of the latest version.

Malaysia Sustainable Palm Oil (MSPO) Policy dated 24/03/2017 approved by Chief Executive – Group Plantation

During interview, workers are able to provide some key understanding such as protection of wildlife and workers treatment and communication.

Yes

4.1.1.2 Indicator 2 The policy shall also emphasize commitment to continual improvement.

(MAJOR)

MSPO Policy specify the commitment.

Statement “HSPHB is committed for continual improvement practice by harnessing its resources of people, process and technology in order to ensure the continuous production of oil palm product in a sustainable manner”

These have been evaluated in all estate to ensure the same version was used.

Yes

4.1.2 Criterion 2 Internal Audit

4.1.2.1 Indicator 1 Internal audit shall be planned and conducted regularly to determine the strong and weak points and potential area for further improvement

(MAJOR)

- Frequency: Once a year

Internal audit is planned on a yearly basis. Improvement has been done to determine the strong and weak point of the internal audit.

Internal Audit for MSPO conducted on:

Bukit Mas Estate: 30/01/2017

Internal audit results have been reviewed with all the

Yes







findings were closed within the timeframe.

North Bank estate: 28/07/2017

This includes both document review and site inspection. Follow up audit was conducted on 06/09/2017.

Total of 5 findings are detected with 4 major 1 minor.

Tagas estate: 08/08/2017

Internal audit covers all related requirements with total of 5 findings - 4 major 1 OFI

Lokan Estate: 16/08/2017

Internal audit covered all elements of MSPO. Total of 3 major 1 minor have been documented.

4.1.2.2 Indicator 2 The internal audit procedures and audit results shall be documented and evaluated, followed by the identification of strengths and root causes of nonconformities, in order to implement the necessary corrective action

(MAJOR)

- Establish the audit procedures

- Root cause analysis on nonconformities

- Correction and corrective action on nonconformities

- Time frames for action to be taken

Results of internal audit have been documented. Internal audits are conducted according to the MSPO standard.

Bukit Mas Estate:

Internal audit has been documented. The process was in line with the requirements.

Northbank Estate

Example: First Aid Training was not conducted to workers

Root cause: Missed out for first aid training

Correction: To conduct immediately for first aid training.

Corrective Action: To provide training program and ensure implement at yearly basis.

Yes







NC closed on 30/08/2017

Tagas Estate

Example: Triple rinsing was not implemented at fertilizer bay

Root cause: Lack of knowledge on best practice

Correction: Estate have implemented the triple rinsing and established 3 partitions of washing bay

Corrective Action : To provide training program at yearly basis and ensure the program is followed consistently

NC closed on 25/08/2017

Lokan Audit:

Example finding : Fire drill evacuation training was not been conducted

Root Cause: Missed out for fire drill evacuation training.

Correction: To immediately conduct the fire drill evacuation training

Corrective action: To provide training and ensure implement at yearly basis.

Status: Completed

4.1.2.3 Indicator 3 Report shall be made available to the management for their review

(MAJOR)

Bukit Mas Estate:

Management review conducted on 27/07/2017 includes internal audit findings and closed out as part of the review reporting.

Northbank Estate

Yes







Management review dated 11/08/2017 with attendance of General manager – Tomanggong Group of Estates (TMGOE).

Point 4 discuss on the internal audit report.

Tagas Estate

Internal audit dated 11/08/2017 has been reviewed. Point 4 covered the internal audit process and the findings associated to the internal audit

Lokan Estate

Management review has reviewed the internal audit.

4.1.3 Criterion 3 Management Review

4.1.3.1 Indicator 1 The management shall periodically review the continuous suitability, adequacy and effectiveness of the requirements for effective implementation of MSPO and decide on any changes, improvement and modification

(MAJOR)

- Review by top management

- Frequency : once a year

- Input audit findings

- Decision on changes, improvement and modification

- Improvement Plan and timeline for implementation

Northbank Estate:

Management review conducted on 11/08/2017. This is attended by General Manager of Tomanggong Group Of Estates (TMGOE). The management review include topics such as

1. Review of policy

2. Review of Internal Audit

3. Legal requirement and changes in the law

4. Complaint

5. Diesel Consumption

Tagas Estate:

Management review conducted on 11/08/2017. Management review mention for the period July 2016- July 2017. Chairman of the meeting is General Manager – Tomanggong Group of Estates (TMGOE)

Yes







and Chief Agronomist

Point 4 mention results of internal audit.

Topics covered in the management review report

Example:

1. Accidents & Injuries

2. Emergency

3. Environment

Lokan Estate

Management review conducted on 19/07/2017 chaired by General Manager - Jeroco Group of Estates (JGOE).

Point 4 mention the internal audit results.

Other discussion including the accidents & Injuries (LTA) The notice board indicates the statistic. Total: Kemalangan is 2 for the year 2017.

Pont 12 discuss on the recommendations for improvement.

4.1.4 Criterion 4 Continual Improvement

4.1.4.1 Indicator 1 The action plan for continual improvement shall be based on consideration of the main social and environmental impact and opportunities of the company

(MAJOR)

- Input (where available and applicable):

(Check on HIRARC to be one of the continual improvement indicators cause the HIRARC register is normally reviewed annually.)

Environmental and social

Action plan based on SIA and other inputs.

Bukit Mas Estate:

Specify in the Social Impact Assessment was the impact and action plan required. Responsible person on this have also been stated.

Social Impact includes housing area and JKKK representative have been recorded.

OBS 1







impact

New techniques

New technologies

New standard

New information

- To establish a system to verify the validity or practicability of the new information and techniques before adoption.

- Continual improvement plan for key social and environmental impacts, implementation and monitoring

- Verification of the system in terms of the appropriateness & effectiveness

- Budget allocation for implementation of social, environmental activities/new technologies and their timeline

- Training programme to the relevant personnel involved in the implementation of new technology/techniques.

- Interview of personnel and stakeholders concerning for example:

- Good social practices of the company

- Response of the management towards social and environmental concerns by

Example:

“Inadequate water supplies in housing area. Action plan do not open the main switch all at once ensuing the pressure is enough to supply to the houses.”

SIA established for both Sungai Segama Group of Estates (SSGOE) & Bukit Mas Palm Oil Mill (BPOM)

Details are specified in appendix 8 including 3 details documented where 3 have been completed.

Northbank Estate

Environment impact assessment dated 02/10/2017 – 05/10/2017 include issues, action plan required, mitigation measures and what required to be done.

Social Impact assessment dated 02/10/2017 – 05/10/2017 has included the plan to improve the method and social aspect of the area.

Example:

Organic wastes in worker area are disposed daily at landfill away from waterways.

Medical facilities in the area where a doctor was appointed by (Hap Seng Plantations Holding Berhad) HSPHB as (Visiting Medical Officer) VMO to (Tomanggong Group of Estates) TMGOE every Friday / Saturday.

Tagas estate:

Environment Impact Assessment dated 2-5/10/2017

The assessment has includes the environmental impact, action plan and continuous improvement plan. The details include below ;







stakeholders

- Improvement plans that have benefitted the stakeholders

a. Harvesting

b. Manuring

c. Pest Infestation

d. Spraying

e. Transportation

f. Office work

g. Generator hose

Example:

Office – recycling waste

Use of electricity, paper and plastic deplete natural resources.

Plan: Paper used on both sides

Light, fan and air condition switch off when not in used.

Social Impact assessment dated 02/10/2017 – 05/10/2017

The assessment includes clinic services and transport.

Lokan Estate:

SIA was conducted from 20/07/2017 – 23/07/2017

Assessment based on stakeholder consultation input and action plan to be taken.

Example: Tiada pagar sekolah

Action plan: GM TMGOE will contact Majlis Daerah







Kinabatangan and seek their advice onastray dogs. Will also seek advice from management to provide perimeter fencing.

Observation:

In the social aspect there is no proper action plan which has mention. It is not clear on the word used to be “continuous”. It is considered that action plan is not clearly address the action required.

4.1.4.2 Indicator 2 The company shall establish a system to improve practices in line with new information and techniques or new industry standards and technology, where applicable, that are available and feasible for adoption

(MAJOR)

Company uses reports such as SIA, EIA as a reference basis which will be included in the action plan to improve practices.

Document is sighted as in 4.1.4.1. Any practice which as deemed to be feasible for adoption will be considered under their action plan.

Example of feasible action to be taken:

Inadequate water supplied in housing area. Action plan was not opening the main switch all at once ensuing the pressure is enough to supply to the house.

Bukit Mas, Northbank & Tagas estates:

New practice is only considered where applicable.

Positive:

Public facilities for workers are in a good condition

1. School

2. Religious area

3. Housing

Yes







4. Electricity and shop

Respond:

To continue maintain the facilities in good condition

Lokan estate:

SIA includes providing other facilities such as road upgrade, clinic and safety equipment. PPE.

4.1.4.3 Indicator 3 An action plan to provide the necessary resources including training, to implement the new techniques or new industry standard or technology (where applicable) shall be established

(MAJOR)

Action plan for training in relation to OSH and environmental have been sighted and reviewed.

Action plan specify date of meeting and date of training listed.

Example – Bukit Mas Estate

Training program – environment

Estate Operation - manuring – 10/03/2017

Estate operation – Spraying – 07/03/2017

Soil Erosion – 07/03/2017

Ecological Protection – 07/03/2017

Training program – OSH

Company policy Training – January 2017

ERP Training – February 2017

First Aid Training – April 2017

Attendance list for the above verified.

Tagas Estate:

Action plan on training is schedule in “Jadual Latihan

Yes







bagi Tahun 2017”

Total of 42 aspects in training have been verified and reviewed.

Example:

Penuaian Buah Tandan Segar – 3 training 5/08/2017, 04/04/2017, 19/07/2017.

Trunk Injection – 2 training 10/03/2017,13/07/2017

Triple rinsing – 13/07/2017, 25/08/2017,

Rat Baiting - 10/03/2017,14/02/2017, 02/03/2017, 122/08/2017

4.2 Principle 2 Transparency

4.2.1 Criterion 1 Transparency of information and documents relevant to MSPO requirements

4.2.1.1 Indicator 1 The management shall communicate the information requested by the relevant stakeholders in the appropriate languages and forms, except those limited by commercial confidentiality or disclosure that could result in negative environmental or social outcomes.

(MAJOR)

- Request, response and release of information must be recorded (refer to 4.2.2.3)

Procedure Memohon Maklumat Syarikat.

“Borang Pemohonan Maklumat” sighted.

There is no specific request of information at the time of audit.

Stakeholder consultation confirmed that information was well received. Refer stakeholder consultation in summary report.

Yes

4.2.1.2 Indicator 2 Management documents shall be publicly available, except where this is prevented by commercial confidentiality or where disclosure of information would result in negative environmental or social outcomes

(MAJOR)

- For public listed companies annual report is accepted

Procedure “List of Publicly Available Document” sighted with 20 documents stated to be made publicly available upon request.

Yes







4.2.2 Criterion 2 Transparent method of communication and consultation

4.2.2.1 Indicator 1 Procedures shall be established for consultation and communication with the relevant stakeholders

(MAJOR)

- Established procedure include internal and external stakeholders

- The procedure should include FPIC process

Procedure “Memohon Maklumat Syarikat” was reviewed. Procedure specify document where is publicly available and where restricted and required further approval.

Non-conformity:

The procedure for List of publicly available document have not been clearly followed.

Certificate was not updated and has expired. There is policy which was not updated and MSPO policy was not made available. Public announcement for the audit was not updated and uploaded into the website to announcement to stakeholders for the audit.

FPIC and communication with relevant stakeholders have been evaluated. During the interview with stakeholders, all participants have shown satisfaction with Hap Seng cooperation. Refer to stakeholder consultation in summary report.

Maj NC 1

4.2.2.2 Indicator 2 A management official should be nominated to be responsible for issues related to Indicator 1 at each operating unit

(MINOR)

- Companies discretion on whom to nominate

- Appointment letter for responsible person

Procedure “memohon Maklumat Syarikat” point 4 and point 5 specify estate and assistant estate managers are the person in charge for providing such information.

Beyond the listed limit, confidential document further approval will be required from General Manager – processing / Senior Planting Advisor / Chief Executive Group Plantation.

Yes

4.2.2.3 Indicator 3 List of stakeholders, records of all consultation and communication and

- Review records List of stakeholders is available. This has been Yes







records of action taken in response to input from stakeholders should be properly maintained.

(MAJOR)

- Lists of stakeholders

- Surrounding communities

- Employees

- Interview with personnel and stakeholders concerning for example:

Awareness of consultation and communication procedures

Availability of management response with regards to their requests /complaints( if applicable)

reviewed prior to the audit and has been deemed to be adequate.

List includes

1. NGO

2. Government organization

3. Neighboring estate

4. Villages

5. Suppliers

6. Contractors

7. Schools

4.2.3 Criterion 3 Traceability

4.2.3.1 Indicator 1 The management shall establish, implement and maintain a standard operating procedure to comply with the requirements for traceability of the relevant product(s).

(MAJOR)

- SOP to verify. SOP “Standard Operating Procedure for Supply Chain” DOC/COC/001 dated 23/08/2012 has been reviewed.

Procedure has mention handling of certified CSPO to ensure the segregation. Included in the procedure, process from the supplying estates, mills and onwards.

CSPO and CSPK included and was reviewed.

Bukit Mas Estate/ Lokan Estate:/Northbank Estate/

Tagas estate

SOP for Traceability document number SOP/COC/001, 2

nd review dated 30/11/2015 was

established. The SOP include purpose, receiving and delivery of CPO and PK. Responsibility in harvesting and sending FFB or CSFFB to mill.

Yes







4.2.3.2 Indicator 2 The management shall conduct regular inspections on compliance with the established traceability system.

(MAJOR)

- Internal audit Bukit Mas Estate:

Internal audit was conducted for the year 2017,

based on form HSP – SE- 2017, management review

report and finding raised has been closed. The period

on solving all NCs was within the timeframe.

North Bank Estate:

Internal audit conducted on 28/07/2017 includes traceability.

One major has been raised

Description: Random check conducted on weighbridge tickets no 245057, 245118 and 245243 are in order.

Sighted weighbridge ticket no 245057 dated 03/03/2017 for 7,720kg FFBs; block no. B98D (names and block number recorded in daily bunches, vehicle no, T25 to Tomanggong palm oil mill)

Tagas Estate:

Internal audit conducted on 08/08/2017 covered the traceability.

One major finding from the internal audit.

Description: Random check conducted on weighbridge tickets no 272360, 272292 and 272204 are in order.

Sighted weighbridge ticket no 272360 dated 31/07/2017 for 7,740kg FFBs; block no. S01-B (names and block number recorded in daily bunches, vehicle no, ST2325N from Tagas estate to Jeroco

Yes







POM 1)

Lokan Estate:

Internal audit conducted on 16/08/2017 covered traceability.

Description

Random check conducted on weighbridge ticket no 251193, 251238 & 250997 are in order. No issue found from Lokan estate

Sighted weighbridge ticket no 251193 dated 31/03/2017 block no Kg block 99 34 (names and block number recorded in daily bunches, vehicle no, SD 891 M from Lokan estate to Jeroco 1 Palm Oil Mill.

4.2.3.3 Indicator 3 The management should identify and assign suitable employees to implement and maintain the traceability system.

(MINOR)

- Appointment of employees

- Appointment letters are required Bukit Mas Estate

The management has assign person in charge Sr Estate Assistant, as person in charge of traceability. The letter was signed by manager Bukit Mas Estate.

Northbank Estate:

Person in charge for COC have been specify in organization chart for 2017. Traceability will he headed by Sr. Estate Assistant.

Tagas estate:

Person in charge for COC have been specify in organization chart for 2017. Traceability will he headed by assistant estate manager.

Lokan Estate:

The management has assigned person in charge for

Yes







traceability is Sr. Estate Assistant. The letter was sign by manager Lokan Estate.

4.2.3.4 Indicator 4 Records of sales, delivery or transportation of FFB shall be maintained.

(MAJOR)

- Hard or soft copy is both acceptable.

All audited estates:

The delivery notes, weighbridge tickets, check roll notes were available and updated.

Bukit Mas Estate:

The estate delivery notes have been reviewed together with the weighbridge tickets. Both has similar information name of estate, date of dispatch, field number. Example delivery note number 111318 dated 30/09/2017

Lokan Estate:

FFB delivery chit

Delivery notes number: 27250

Vehicle number: SD 2190 M Block Number : R993/42

Date: 25/10/2017

Driver name:

FFB Weighbridge Advice Ticket

Ticket number: 286604

Dated: 25/10/2017

Gross: 18,360 kg

Tare: 7,550 kg

Nett: 10,810 kg

Information from the weighbridge ticket can link back to DN was transporter, field lot and DO number.

Yes







FFB delivery chit

DN: 27366

Vehicle number: SD 891 M

Block Number: R9936/ R992

Dated: 25/10/2017

Driver name:

FFB Weighbridge Advice Ticket

Ticket number: 286615

Dated: 25/10/2017

Gross: 13,630 kg

Tare: 7,740 kg

Nett: 5,890 kg

Information from the weighbridge ticket can link back to DN was transporter, field lot and DO number

Northbank Estate

Weighbridge tickets for the month of January 2017 have been reviewed and check against the collection, daily records and monthly records.

Records checked refers to block number: B98D, B98G,B98C and B98H

4.3 Principle 3 Compliance to legal requirements

4.3.1 Criterion 1 Regulatory requirements

4.3.1.1 Indicator 1 All operations are in compliance with the applicable local, state, national and ratified

- Assessment of documents. Bukit Mas Estate:

MPOB License No. 501994202000 valid from

Yes







international laws and regulations

(MAJOR)

01/03/2017 till 28/02/2018

Northbank Estate:

MPOB License sighted, No. 5015394020000 valid from 01/04/2017 to 31/03/2018

Tagas Estate:

MPOB License No. 501539402000 valid from 01/04/2017 to 31/03/2018

Lokan Estate:

MPOB Licence

Jeroco Plantation Sdn Bhd (No. pendaftaran: 59340-P)

Validity date: 01/03/17 – 28/02/18

Lokan estate: (CL 095310973)

2837 Hektar

4.3.1.2 Indicator 2 The management shall list all laws applicable to their operations in a legal requirements register.

(MAJOR)

- Individual company to list down all relevant laws to oil palm industries.


List of applicable laws are available but not limited to:

Factory and Machinery Act 1967

Control of Supplies Regulation 1974

Electricity Supply Act 1990

Lokan Estate:

List of applicable laws are available. Reviewed show that the documents were up to date.

Example: List of laws and regulations:

Environmental quality act 1974.

Yes







Immigration Act 1959

Land Acquisition act 1960

4.3.1.3 Indicator 3 The legal requirements register shall be updated as and when there are any new amendments or any new regulations coming into force.

(MAJOR)

- Updating and document review, and compliance.

- Suggest to add compliance ‘status’.

All audited estate

At the time of audit, updates have been reviewed and deemed to be up to date

List of update:

Laws Date update

Minimum wages order

27/07/2016

Akta perubatan 17/04/2017

Akta Kemudahan dan perkhidmatan Jagaan Kesihatan Swasta 1998

17/04/2017

Yes

4.3.1.4 Indicator 4 The management should assign a person responsible to monitor compliance and to track and update the changes in regulatory requirements.

(MINOR)

- Name of appointee and letter of appointment.

Bukit Mas Estate:

Person in charge of compliance requirement is Estate Manager.

Northbank Estate:


Tagas Estate:


Lokan Estate

Person in-charge of compliance requirement is Estate

Yes







Manager

Appointment letter dated 23/08/2017 with responsible stated

“to monitor compliance and to track and update the changes in regulatory requirement”

4.3.2 Criterion 2 Land use rights

4.3.2.1 Indicator 1 The management shall ensure that their oil palm cultivation activities do not diminish the land use rights of other users.

(MAJOR)

Verification of land use rights by means of official/legal documents. The following documents are accepted:

- Land title and terms and conditions

- Provisional Lease (PL) / License for Planted Forest (LPF) (for Sarawak)

- Lease Agreement.

- Quit rent paid by the holding .company (if applicable).

- Perimeter survey map containing boundary markers.

- Records of disputes and resolution process.

- Records of agreements/legal documents between the previous owners and occupants.

Visual inspection of for example:

- Legal perimeter boundary markers.

Oil palm plantations in Hap Seng Plantations Group did not diminish the land use right for other users. The land has been leased prior to 1980 and 1988 It is also confirmed through stakeholders’ consultation that there was no issue on the land used by Hap Seng Plantations Group.

Yes

4.3.2.2 Indicator 2 The management shall provide documents showing legal ownership or lease, history of land tenure and the actual use of the land.

(MAJOR)

Legal Ownership of all the site have been reviewed. All sites land titles are evidence and traceable. Example as in below:

Land Title Estate Area (Ha)

CL 095310017

Tagas, Tabin & Tomanggong

2,611.89

CL 075359465

Tabin 1,430.67

CL 075359456

Litang 146.90

CL 075359438

Tagas 587.74

CL 075359447

Litang 262.92

CL 095316304

Tomanggong & Northbank

3,975.00

CL 095316359

Litang 380.00

Yes







CL 095316340

Litang (share CL with BME)

414.58

CL 095321092

Litang 366.80

CL 095317427

Litang (Wecan)

1,078.00

CL 095317418

Tagas (Tampilit)

201.70

CL 095324897

Northbank (Sanwide)

567.80

CL 095324879

Tabin (Sri Lamag)

182.10

4.3.2.3 Indicator 3 Legal perimeter boundary markers should be clearly demarcated and visibly maintained on the ground where practicable.

(MAJOR)

Legal perimeter has been verify in the filed ., boundary stone and peg was clearly visible.

Bukit Mas Estate

Boundary marking was clearly visible with pegging color red, at block 06 C

Coordinate: 5.3851 N, 118.5016 E

Tagas Estate

Boundary marking was clearly visible, with pegging color red.

Coordinate: 5.34924 N, 118.59723 E

Northbank Estate

Boundary marking clearly visible with pegging red color.

Lokan Estate

Boundary marking clearly visible with pegging red

Yes







color.

4.3.2.4 Indicator 4 Where there are, or have been, disputes, documented proof of legal acquisition of land title and fair compensation that have been or are being made to previous owners and occupants; shall be made available and that these should have been accepted with free prior informed consent (FPIC).

(MINOR)

No dispute or legal law suit has occurred in all estates. No compensation as of date of audit. This was confirmed through stakeholders’ consultation.

Land titles have been verified showing legal owner is Hap Seng Plantations Group.

Yes

4.3.3 Criterion 3 Customary rights

4.3.3.1 Indicator 1 Where lands are encumbered by customary rights, the company shall demonstrate that these rights are understood and are not being threatened or reduced.

(MAJOR)

- Provisional Lease (PL) and License for Planted Forest (LPF).

- Records of Ex-gratia / Goodwill Payment and Agreement.

- Konsep baru for Sarawak 1956 – cut-off date.

- Refer to 4.7.6

Land leased by Hap Seng Plantations Group has been verified and does not conflict with any customary right. Local understand their right and are pleased with the cooperation provided by Hap Seng. See stakeholders’ consultation report.

Yes

4.3.3.2 Indicator 2 Maps of an appropriate scale showing extent of recognized customary rights shall be made available

(MAJOR)

- Official maps from Land Survey for recognized customary rights are made available.

Lands leased by Hap Seng Plantations Group has been verified and does not conflict with any customary right. Local understand their right and are pleased with the cooperation provided by Hap Seng. Refer to summary report for attached map.

Yes

4.3.3.3 Indicator 3 Negotiation and FPIC shall be recorded and copies of negotiated agreements should be made available.

(MAJOR)

- Records of negotiated agreements.

Land leased by Hap Seng Plantations Group has been verified and does not conflict with any customary right. Local understand their right and are pleased with the cooperation provided by Hap Seng. See stakeholders’ consultation report.

Yes

4.4 Principle 4 Social Responsibility, health, safety and employment conditions







4.4.1 Criterion 1 Social impact assessment (SIA)

4.4.1.1 Indicator 1 Social impacts should be identified and plans are implemented to mitigate the negative impacts and promote the positive ones.

(MINOR)

- Social impact assessment can be conducted internally.

Bukit Mas Estate:

Social Impact Assessment and Continuous Improvement Plan for Sg. Segama Group of Estates and Bukit Mas Palm Oil Mill 5

th Review dated

01/03/2017 was sighted and incorporate 4 objectives.

Information available on SIA but not limited to stakeholders meeting plan

Organisation chart as at March 2017, demographic, gender census, list of applicable laws (42 laws and regulations),

The Social Impact Assessment conducted involved workers and stakeholders. Example:

Social Impact: Entrance pass need Manager to sign form for permission to enter, whereby sometime Manager was not around to sign the pass.

Action Plan: Manager was available at state officeat 3.00PM. Those who want to have manager permission can meet him during allocated time or contact directly to Manager.

Mitigation Promotion to Positive impact: Continue to provide good relations with contractors & suppliers.

Responsibility: General Manager and manager

Timeline: On going

Tagas Estate:

Social Impact Assessment: Tomanggong Group of estates and Tomanggong Palm Oil Mill 4

th review was

conducted on 11/10/2017. The company has divided

Yes







the review in between the negative and positive impacts, action plants and time bound.

Example of issue addressed by the SIA;

Social Impact: Transportation of student at NBE to Humana school which has been resolved.

Action Plan: Action has been taken to resolve the problem.

Mitigation Promotion to Positive impact: To continue to provide service to school and local community.

Responsibility: Manager / Sr. Assistant Manager.

Timeline: On going

Lokan Estate

Social Impact Assessment for Jeroco Group of Estates and Jeroco Oil Mill 1 and 2.

Reported by -sustainability executive. Date of assessment was 20/06/2017 to 23/06/2017 and the next review will be at June 2018.

Included in the SIA was 4th

JCC stakeholder Consultation list 2015 and 5

th JCC Stakeholder

Consultation list 2017. The lists contain both external and internal stakeholders.

Example;

Social Impact: Speeding of motorcycle near to Humana School

Action Plan: Manager warns all motorcyclist not to speed at Humana area.

Mitigation Promotion to Positive Impact: Continue to







provide good service.

Time bound plan: Immediate action

Responsibility: Senior manager

Tagas and Northbank

Social impact assessment for both Tomanggong Group of estate and Tomanggong POM dated 02/10/2017 – 05/10/2017 have been reviewed.

The report has included the action plan and mitigation plan.

4.4.2 Criterion 2 Complaints and grievances

4.4.2.1 Indicator 1 A system for dealing with complaints and grievances shall be established and documented.

(MAJOR)

Assessment of internal documents, for example:

Availability of complaints form for employees and affected stakeholders

Records of complaints and records of actions taken

Records that are kept for the last 24 months

Interview with personnel and stakeholders concerning for example:

Awareness of complaints and grievances procedures and how to lodge complaints

Verify if the complaints and grievances by the affected parties are resolved in an effective, timely and appropriate manner.

Bukit Mas Estate

Complaints procedure HSPSB P1 1120 Latest update on 11/06/2016 was available and display on the office notice board. There are two record keeping books one as External for all stakeholders and the other for Internal which mostly highlighted on housing and repairs.

Tagas / Northbank Estates:

Complaint procedure HSPSB P1 1120 b last updated on 04/07/2011 was available and display at the office notice board. The estate has established external

stakeholder complaint and internal stake holder complaint book record.

Lokan Estate:

The complaint form was display at the office notice board. The estate has established ‘borang aduan luar’ and ‘borang aduan pekerja’.

Borang aduan template consist of Nama pengadu

Yes







Tarikh

Keterangan aduan

Tanda tangan perneima aduan

Dan tarikh tindakan.

Example:

Nama pengadu: Kedai Lokan

Date: 26/02/2016

Shop ceiling bocor

Sign by recipient:

Date: 27/02/2016

It was resolved by 02/03/2016.

Nama pengadu:

Date: 05/05/2017

Shop ceiling bocor

Sign by recipient:

Date: 08/05/2017

It was resolved by 06/05/2017.

4.4.2.2 Indicator 2 The system shall be able to resolve disputes in an effective, timely and appropriate manner that is accepted by all parties.

(MAJOR)

The estates established complaint and grievance flowchart dated 03/08/2016 which include the timeframe to resolve complaints received.

Bukit Mas Estate:

“Carta aliran Mekanisma Aduan dan Masalah” was establishing date revised 03/08/2016.

OBS 2







Grievance book for external and internal complaint was separate and the process of solving the complaints was within the time schedule of 10days

Tagas Estate:

Complaint procedure HSPSB P1 1120 b last updated on 04/07/2011 was available and display on the office notice board. Grievance book for external and

internal complaint was separate and the process of solving the complaints was within the time schedule.

Northbank Estate:

Grievance book for external and internal sighted Lokan Estate Borang Aduan Pekerja andNorthBank Estate Borang Aduan Luar. Example of internal grievance;

Complaint

Date

Issue

Complaint receive by

The respond was within the timelines of five days as per SOP. The estate has established internal and external complaint book.

Lokan Estate

Complaint procedure was available and display at office notice board. The records under borang aduan luar and borang aduan pekerja was sighted. All the issues were resolved within the timeframe.

Observation:







The management could consider to separate the housing maintenance request apart from the complaint form.

4.4.2.3 Indicator 3 A complaint form should be made available at the premises, where

employees and affected stakeholders can make a complaint.

(MINOR)

Bukit Mas Estate:

Borang aduan, complaint form HSPHB CF 1110-01 was available. Complain form is available at the office. Interviews with workers indicate they are aware of such form and procedure.

Northbank Estate:

Borang aduan, complaint form HSPHB CF 1110-01 was available. Complain forms are available at the office. Interviews with workers indicate they are aware of such form and procedure.

Tagas Estate

Borang aduan, complaint form HSPHB CF 1110-019(b) was available. Complaint form are available at the office (for internal stakeholder) and at the guard house (for external stakeholder). Interviews with workers indicates they are aware of such form and procedure

Lokan Estate

Borang aduan, complaint form HSPHB CF 1110-019(b) was available. Complaint form are available at the office (for internal stakeholder) and the estate main gate (for external stakeholder). Interviews with workers indicates they are aware of such form and procedure

Yes

4.4.2.4 Indicator 4 Employees and the surrounding communities should be made aware that complaints or suggestions can be made

Bukit Mas Estate

Grievance briefing was conducted on 26/09/2017 by

Yes







any time.

(MINOR)

Assistant manager during morning muster. Interviews with workers at operation site show they are aware on their right to make complaints.

Northbank Estate

A Joint Consultative Committee is established to enhance the working relationship. The JCC meeting is held once annually.

The last meeting was held on 18/05/2017. JCC meeting as platform for all relevant stakeholders to raise any complaints.

Tagas Estate

The Joint Consultation meeting involves representative from the management, contractors and villagers dated 23/08/2017. The stakeholders are aware of complaints procedure which is part of the JCC agenda. Interviews with workers at operation site show they are aware on their right to make complaints.

Lokan Estate

For employee they would inform their immediate superior on any complaint they want to raise. Estate use JCC meeting as the platform to inform stakeholders on grievance procedure. Interviews with workers at operation site show they are aware on their right to make complaints.

4.4.2.5 Indicator 5 Complaints and resolutions for the last 24 months shall be documented and made available to affected stakeholders upon request

(MAJOR)

Bukit Mas Estate

The complaint record book for both external and internal complaints and grievance were established.

House Repair Workers SSGOE and House Repair

Yes







Executive & Staff. The remark contains the date of complaint resolve. All the issue was address within the time schedule. Complaints from 2015 onwards are available.

Tagas Estate

The complaint from internal dated 22/01/2015, complaint form external has been established

House Repair Workers SSGOE and House Repair Executive & Staff. The remark contains the date of complaint resolve. All the issue was address within the time schedule

Northbank / Lokan Estate

The estate kept the record of grievance for 2015 onwards. Complaints record was available and has been reviewed.

4.4.3 Criterion 3 Commitment to local sustainable development

4.4.3.1 Indicator 1 Growers should contribute to local development in consultation with the local communities

(MINOR)

- Positive impacts of SIA – extended (or communicated) to surrounding communities

Bkt Mas Estate

Company provide electricity to worker for ‘kenduri arwah’, dated 22/10/2017 t

Company provide electricity to worker for marriage dated 15/09/2017 to 16/09/2017. Estate provides transportation for children attending school at Humana School

Northbank Estate

Estate does provide technical support to local school as well as Humana Child Aid Society learning centre.

Tagas Estate

Yes







Humana Child Aid Society Sabah, estate provide vehicle for the soccer game at SK Ladang Tomanggong, dated 14/11/2016

Humana School infrastructure repair by the estate dated 03/03/2017.

Lokan Estate

The estate provided security and first aid for SK Jeroco Sports day dated 05/11/2017 and provide sport equipment for SK Jeroco sports day dated 13/10/2017.

4.4.4 Criterion 4 Employees safety and health

4.4.4.1 Indicator 1 An occupational safety and health policy and plan shall be documented, effectively communicated and implemented.

(MAJOR)

- Endorsed by the current top management

- OSH Act 1994 and Factory and Machinery Act 1967(Act139).

Safety and Health Policy has been established dated 01/04/2015 sign by Chief Executive-Group Plantation. Policy was available and display on the operation centre.

Bukit Mas Estate

Safety and Health policy was display at office and muster ground. Example of safety and health training:

SOP Training chemical application dated 07/03/2017

SOP training on manuring dated 10/03/2017.

Northbank Estate

Safety and health policy was available at notice board. Interviews with workers indicate they understand their job as per SOP and they are equipped with PPE. Training conducted base on SOP:

Yes







Peengendalian ferry OSH dated 13/10/2017

Tagas Estate

Safety and Health policy was display at office and muster ground. Example of safety and health training:

Policy training;

‘Prosedur Kerja Selamat Penuai Buah dated 04/04/2017

-SOP Harvesting dated 10/04/2017 attended by the sampled workers:

SOP for Manuring was conducted on 19/04/2017.

Lokan Estate

OSH Organisation Chart 2017, estate manager as the chairman which involves management team and workers’ representatives.

OSH Policy was displayed at the main office. The estate has established OSH Plan 2017 which was approved by estate manager which include health and safety activities, workplace inspection and health programme. Example training conducted.

SOP spraying training dated 24/02/2017

Water Treatment & Chemical storage training dated 16/10/2017

4.4.4.2 Indicator 2 The occupational safety and health plan shall cover the following:

(MAJOR)







a) A safety and health policy, which is communicated and implemented.

- Policy display – understandable language

- Records of : Quarterly Meeting / Morning briefing

Safety and Health Policy has been established dated 01/04/2015 sign by Chief Executive-Group Plantation. The policy display is in English and Malay.

Bukit Mas Estate

Latest Meeting was conducted on 12/10/2017. No latest issue for the estate site. Previous meeting was conducted, dated 22/03/2017 and 22/06/2017.

Northbank Estate

The latest Safety and Health meeting conducted 20/09/2017. Safety and health plan 2017 consist of list of policies and SOP trainings and safety inspections.

Tagas Estate

Safety and Health Policy dated 01/04/2016 display in both languages English, and Malay

Previous meeting was conducted dated 17/03/2017 and 16/06/2017

Latest OSH meeting was conducted on 20/09/2017

OSH Plan 2017 signed and consists of Health and safety activities. Workplace inspection, training programmed, and health programmed.

Lokan Estate

The policy was display at the office in two languages Malay and English. Latest OSH Meeting was third JKKP meeting dated 13/09/2017. Previous meeting was conducted, dated 29/03/2017 and 20/06/2017.

Water treatment chemical storage dated 16/10/2017

Yes







OSH has been implemented. All workers are provided with PPE and interviews indicates they understand the usage and purpose of wearing the right PPE.

b) The risks of all operations shall be assessed and documented

- Verify risk assessment report e.g HIRARC

Bukit Mas Estate

HIRARC was conducted by NIOSH dated 09/02/2017 consist of all applicable risks and analysis.

Example of accident report;

Name of worker:

Date of accident 22/04/2017

Type of injury: fall of tractors injured his head, left and right legs.

Meeting was conducted on 28/04/2017 regarding the accident. Among actions taken was training, inspection on vehicles, SOP driver training,

Training was conducted on 26/04/2017 for Latihan Pemanduan Selamat Conducted by Assistant Manager Bukit Mas estate.

Tagas Estate

JKKP 8 was sent to OSH Department on 09/01/2017. The report indicated no accident happen during last year 2016.

Monthly Accident Key Performance Indicator (KPI) indicates the accident happen and report. There is no accident reported from January to September 2017. HIRAC was revised on 11/09/2017 and next revision will be on 11/09/2017.

Min NC1

OBS 3







Lokan Estate

JKKP 8 was sent to OSH Department on 18/01/2017

Latest HIRARC review was conducted on 15/06/2017. The HIRARC covers

Monthly accident key performance indicator for the 3rd

Quarter 2017 has been conducted

Jumlah hari bekerja 224

Jumlah pekerja 114

Jumlah kemalangan 3

Jumlah kemalangan tanma hari kerja 1

Jumlah kemalangan hilan hari kerja 2

Kadar insiden 26

Kekerapan 15

Keterukan 10

Northbank estate

The risk assessment HIRAC has been conducted abd include element of likelihood, severity and risk into the assessment. The action plan following to this has been set up.

Min NC:

The plan did not clearly segregate according to the risk specify. Therefore, to be clearer of what action to be taken the management can separate for clearer implementation.

Observation:







Soil erosion was detected at the gen-set location. The risk of landslide need to be taken into account.

c) An awareness and training programme which includes the following requirements for employees exposed to pesticides:

- Yearly training plan and programme include safety aspects

- Training and records of individuals

- Material Safety Data Sheet (MSDS) / Chemical Safety Data Sheet (CSDS) and label

i. all employees involved shall be adequately trained on safe working practices; and

Bukit Mas Estate

List of safety and health training conducted for workers:

Chemical mixing and CSDS training conducted on 08/08/2016.

Tagas Estate


Chemical Safety training conducted on 20/02/2017.

CSDS Training was conducted on 25/08/2017

Lokan Estate


Water treatment chemical storage dated 16/10/2017.

SOP spraying training dated 24/02/2017

Northbank estate:

Training have been provided to the worker. Example

Pengendalian ferry – 13/10/2017

Yes







Tanggung jawab terhadap alam sekitar – 17/10/2017

ii. all precautions attached to products shall be properly observed and applied

Bukit Mas estate

CSDS was available in the chemical, fertilizer stores and pre-mix areas. The CSDS was up-to-date.

Northbank Estate

SDS was available on the chemical store, fertilizer store, and pre-mix areas. The CSDS is up-todate

Tagas Estate

SDS was available on the chemical store, fertilizer store, and pre-mix areas. The SDS was up to date.

Lokan Estate

T CSDS available at chemical store, fertilizer store, pre-mix area. SDS is up-to-date.

CSDS was reviewed and practices are in accordance to the requirement.

Yes

d) The management shall provide the appropriate personal protective equipment (PPE) at the place of work to cover all potentially hazardous operations as identified in the risk assessment and control such as Hazard Identification, Risk Assessment and Risk Control (HIRARC)

- Appropriate Personal Protective Equipment (PPE)

Bukit Mas Estate

Manuring Gang block 94D6 is provided with appropriate PPE, glove, mask, apron, goggles.

Harvesting gang block 95C8 is provided with appropriate PPE, hand gloves, safety helmet, and boots. PPE issuance book has been reviewed.

Northbank Estate

Site visit on spraying gang sighted they were provided with adequate PPE: mask, apron, safety boot, safety goggles. PPE issuance book sighted.

Tagas Estate

Yes







Site visit on Harvesting gang block SR01F were provided with adequate PPE. Issuance of PPE were recorded on PPE issuance book

PPE training was conducted on 13/09/2017.

Lokan Estate

Site visit to harvesting gang confirm that the workers were equipped with applicable PPE. Estate PPE issuance book sighted. All the records were in place.

-PPE issuance book has been reviewed.

PPE have been provided in accordance to the HIRARC mention. During site visit, it was observed there is no evidence in violation of the PPE requirement.

e) The management shall establish Standard Operating Procedure for handling of chemicals to ensure proper and safe handling and storage in accordance to Occupational Safety Health (Classification Packaging and Labelling) Regulation 1997 and Occupational Safety Health (Use and Standard of Exposure of Chemical Hazardous to Health) Regulation 2000.

- SOP

- Storage facilities for PPP and fertilizers

- Check on the compliance To CHRA requirement and Chemical Safety Requirement

All audited Estates

The estates have established HSPSB/SOP/20-17 SSOP for Chemical Store

SOP is regarding handling and storing of chemicals.

Site visits and interviews with workers indicate they understand the SOP related to their job, example, chemical gang

Northbank estate

Chemical handling procedure has been established Such as Penyemburan racun rumpai, 3x basuhan and masuk semula Lalang yang terdedah kepada racun. Procedure dated 02/03/2017.

The procedure has specify type of injury and action to be taken and PPE required for the work scope.

Yes







f) The management shall appoint responsible person(s) for workers' safety and health. The appointed person(s) of trust must have knowledge and access to latest national regulations and collective agreements

- Appointment letter.

- OSH committee members. Bukit Mas Estate.

Sighted Senior Assistant Manager dated 21/08/2017 as deputy chairman of estate OSHA committee.

Sighted appointment letter for staff dated 21/08/2017 as committee member for Penombak division of estate OSHA committee.

Tagas Estate

Estate has established organization chart for OSHA dated 15/07/2017 chaired by estate manager. Sighted appointment letter as chairman OSH and deputy chairman OSH.

Lokan Estate

Sighted appointment letter for estate manager chairman OSH on 017 sign by Group General Manager and assistant manager as the deputy chairman of OSH. January 2017.

Northbank Estate

Appointed for the respective personnel have been reviewed. Appointment are for the year 01/01/2017 to 31/12/2017.

Total of 12 appointment letters have been reviewed.

Yes

g) The management shall conduct regular two-way communication with their employees where issues affecting their business such as employee's health, safety and welfare are discussed openly.

- OSH committee meeting – minimum 4 times a year (OSH Act)

- Members representing all categories

- Records of : Agenda / Minutes and attendance

Bukit Mas Estate

The policy was display at the office in two languages Malay and English. Latest OSH Meeting was conducted on 12/10/2017. Previous meeting conducted on 22/03/2017 and 22/06/2017.

Tagas Estate

Yes







The policy was display at the office in two languages Malay and English. Latest OSH Meeting was conducted on 20/09/2017. Previous meeting conducted on 17/03/2017 and 16/06/2017.

Lokan Estate

The policy was display at the office in two languages Malay and English. Latest OSH Meeting was conducted on 13/09/2017. Previous meeting conducted on 29/03/2017 and 20/06/2017

Northbank estate Meeting conducted on 20/09/2017. Meeting was represented by workers’ representatives and management.

Meeting topics include examples as below

1. Unit tindakan Bahan Kimia

2. Unit kemalangan

3. Tanah Runtuh

3 meetings have been conducted on 22/03/2017, 16/06/2017 and 20/09/2017

h) Accident and emergency procedures shall exist and instructions shall be clearly understood by all employees

- Accident and emergency procedures

- Records of OSHA Accident and Investigation

SOP for handling accident been mention on specific procedure.

An emergency preparedness and respond chart have been set up. Chart demonstrates control of situation and the process of handling the situation and provides information.

Emergency respond team and their phone numbers are available.

Bukit Mas Estate

Yes







Accident record book and JKKP report sighted. JKKP 8 report has been sent to OSH department in January 2017.

Northbank Estate

Accident record book and JKKP report sighted.

JKKP 8 report has been seen to OSH department.

Tagas Estate

Accident record book and JKKP report sighted

There was no accident recorded from January 2017 until September 2017.

Lokan Estate

Accident record book and JKKP report sighted. There are no major injuries that cause lost time accident occur in the estate.

i) Employees trained in First Aid should be present at all field operations. A First Aid Kit equipped with approved contents should be available at each worksite

- Records of First Aid Training

- First Aid Kit for external used must be checked

- Guidelines on First Aid in The Workplaces

Bukit Mas Estate

First aid training was conducted on 20/09/2017

First aid kit was available at the work site with the list of medicines and date of inspection. Workers do understand the purpose of having first aid kit and know to use the items.

Tagas Estate

First aid training was conducted on 21/10/2017. First aid box was checked during on site visit to harvesting at block SR01F. Workers do understand the purpose of having first aid kit and know to use the items.

Lokan Estate

No







The first aid training was conducted on 21/08/2016 for external stakeholder. For workers, the first aid training was conducted on 23/05/2017. Interviews at the fields indicate workers do understand the purpose of having first aid kit and know to use the items.

Northbank estate

First aid kits were sighted in all operation work areas. First aid training record

Dated: 21/07/2017

Total of 16 personnel have been trained. Interviews at field indicates workers do understand the purpose of having first aid kit and know to use the items

Non conformity:

Not all the field workers group have a trained personnel. Total of 12 group including harvesting, manuring and spraying which trained field personal is only 8 personnel.

j) Records shall be kept of all accidents and be reviewed periodically at quarterly intervals

- Accident records

- Review during OSH committee meeting

Bukit Mas Estate

Accident file contain the accident records,

Submission of JKKP 8 on 09//01/2017 has list of workers who are injured that cause lost time accident or medical leave cases. Example: Worker F

Tagas Estate

There is no accident recorded in the estate since no accidents had happen.

Northbank Estate

“Monthly accident key performance indicator (KPI)”

No







Year 2016 have been reviewed and report dated 30/01/2017to Pengarah jabatan keselamatan dan kesihatan perkerjaan Malaysia. No ruj: NBE/H6/16002/JKKP

Year 2017

3 meetings have been conducted respectively on 22/03/2017, 16/06/2017 and 20/09/2017

Nevertheless, as this is a main certification the earlier 2 meetings minutes was mention the accident as a topic although they have taken note of no accident in the report.

Lokan Estate

JKKP 8 was sent to OSH Department on 18/01/2017

Latest HIRARC review on 15/06/2017.

4.4.5 Criterion 5 Employment Conditions

4.4.5.1 Indicator 1 The management shall establish policy on good social practices regarding human rights in respect of industrial harmony. The policy shall be signed by the top management and effectively communicated to the employees.

(MAJOR)

- Social Policy (in understand language)

9 policies have been established in additional to the sustainability policy and MSPO policy.

Policies have been posted in notice boards.

Hap Seng Plantations Group has established Human Right Policy dated 01/10/2016 sign by Chief Executive-Group Plantations

The human right policy was available and publicly display on operation sites in both Malay and English languages.

Bukit Mas / Tagas / NorthBank / Lokan Estate

Policy on Freedom of Association and Policy on Equal Opportunity dated 22

/03/2016 sign by Chief

Executive-Group Plantations.

Yes







4.4.5.2 Indicator 2 The management shall not engage in or support discriminatory practices and shall provide equal opportunity and treatment regardless of race, colour, sex, religion, political opinion, nationality, social origin or any other distinguishing characteristics

(MAJOR)

- Equal opportunity statement by the top management

- Interview the workers

The established Equal Opportunity Policy dated 22/03/2016 sign by Chief Executive-Group Plantations. Policy was available and publicly display on operation sites in both Malay and English languages.

Bukit Mas Estate

There are no discriminatory complaints on records, and interviews conducted.

Northbank Estate

There are no records of complaints and interviews with workers indicate no discrimination issue arise.

Tagas Estate

The estate has established gender committee which was chaired by office staff and others representative comprise of estate staff and workers. Interview with workers indicate no discrimination against them occur.

Lokan Estate

There are no complaint regarding discrimination and interviews with workers confirm there are no discrimination occurs.

Yes







4.4.5.3 Indicator 3 Management shall ensure that employees’ pay and conditions meet legal or industry minimum standards and as per agreed Collective Agreements. The living wage should be sufficient to meet basic needs and provide some discretionary income based on minimum wage.

(MAJOR)

- Compliance to Minimum Wage Act 2012 (Mandatory).

- Absence of complaints of employee.

- Refer to payroll or pay slip.

Bukit Mas Estate

All employees and workers have a work contract with the company according to the Sabah Labour Ordinance 2005.

Example:

Worker E

Income RM

Deductions RM

De-electricity 2.54

Holiday pay 212.28

Oil palm- harvester wages

1,096.03

Ma-Maintain road repairs

106.14

MA- Pruning 113.85

Net Pay 1,528.30 2.54

Worker D

Income RM

Deductions RM

De-electricity 0.29

Holiday pay 212.28 GC-Repairs-Sundry Building

1,309.06

Net Pay 1,521.34 0.29

Tagas Estate

Summary of Payroll for September 2017 shows all workers were paid above the minimum wages as per law of RM 920 per month.

Yes







Issue: deductions. ‘Deduction were made as per approval by the Jabatan Tenaga Kerja

Among others Surat Kuasa Pemotongan Gaji.

Example:

Worker G

Month: September 2017

Income RM

Deductions RM

De-electricity 5.30

De-Passport 50.00

GC-Holiday pay

176.90

Ma-circle raking

636.84

Ma-Pest mammalian control

141.52

Ma-stacking 141.52

Net Pay 1,096.78 55.30

Worker ZZZ

Month: September 2017

Income Deductions

De-electricity 5.30

Oil Palm-Harvesting wages

1,022.31

GC-Holiday pay

70.76

Ma-Maintain road repairs

70.50







Sm-Labour (own workers)

21.24

Net Pay 1,096.78 5.30

Lokan Estate

The company pay salary and wages on the first week each month. The pay was made by cheque. Copy of pay slip given to workers. Example:

Worker A

Income RM

Deductions RM

De-electricity

Holiday pay 176.90

Ma-maintain road repairs

318.42

Ma-path/circle 300.00

Ma-selective (chemical)

269.65

Net Pay 1, 064.97

Worker B

Income RM

Deductions RM

De-electricity 5.30

Holiday pay 176.90

Ma-FFB application

57.79

Ma-lallang 300.00

Ma-sanitation 318.42

Ma-Selective (chemical)

212.50

Net Pay 1,009.31

The deduction was for the head of house or per







family. It applies for single mother as well.

4.4.5.4 Indicator 4 Management should ensure employees of contractors are paid based on legal or industry minimum standards according to the employment contract agreed between the contractor and his employee.

(MAJOR)

- Records of payment by company to the contractors.

- Agreement between the management and contractors.

All audited estates

The estates use its own transportation for all work activities., There were no outsourcing contractors.

Yes

4.4.5.5 Indicator 5 The management shall establish records that provide an accurate account of all employees (including seasonal workers and subcontracted workers on the premises). The records should contain full names, gender, date of birth, date of entry, a job description, wage and the period of employment.

(MAJOR)

- Employee registration details. All audited estates

The lists of workers is available. Other related information on the list:

Name of workers

Date of Birth

Date Joined

Type of Job

IC or passport number.

Date of expired work pass

Company has established the employee contract which contain all applicable information.

Yes

4.4.5.6 Indicator 6 All employees shall be provided with fair contracts that have been signed by both

- Appointment letter for local workers / workers registration

All audited estates Yes







employee and employer. A copy of employment contract is available for each and every employee indicated in the employment records.

(MAJOR)

for.

- Employment contract for foreign workers.

- Any documents related to employment is acceptable.

Appointment letter for both local and Foreign workers was based on the group format. The appointment letter contains:

Type of work

Rate per day

Salary rate for ordinary time job

Salary rate for over time

Salary rate for public holiday.

Counter sign by workers verify by Manager.

Appoitment letter for workers on each estates has been sighted. All was following the per requirement.

4.4.5.7 Indicator 7 The management shall establish a time recording system that makes working hours and overtime transparent for both employees and employer.

(MAJOR)

- Check roll records.

- Display of working hours at general notice board.

Bukit Mas Estate

Site visit could observed that the estate has display the working hours at office notice board and muster ground. Check roll book records daily workers attendance.

Tagas Estate

Estate has divided the check roll book record based on division and type of work.

Abbreviation noted:

PH-Public holiday

LV-On Leave

SL-Paid sick leave

S-Unpaid sick leave

Yes







ML-Maternity Leave

North bank Estate

Site visit show workers understand the working time. Working time has been brief as part of induction trainings conducted,

Example: Working time was display on the notice board near the muster ground and office

Lokan Estate

Site visit show workers understand the working time. Working time has been brief as part of induction trainings conducted,

Example: Working time was display on the notice board near the muster ground and office.

.

4.4.5.8 Indicator 8 The working hours and breaks of each individual employee as indicated in the time records shall comply with legal regulations and collective agreements. Overtime shall be mutually agreed and shall always be compensated at the rate applicable and shall meet the applicable legal requirement.

(MAJOR)

- Leave entitlement must be taken.

- Pre-approved overtime sheet.

- Not more than 104 hours.

Bukit Mas / Tagas Estate

There is no overtime provided to workers. Counter check with the company pays slip system.

Working hours and leave entitlement were indicated in the contract.

Daily working hours from 5.30am and end by 1.30 pm. Leave entitlement is included in worker contract form.

Northbank / Lokan Estate

Overtime record file has been reviewed. Leave entitlement was sighted at the worker contract form.

Yes







4.4.5.9 Indicator 9 Wages and overtime payment documented on the pay slips shall be in line with legal regulations and collective agreements.

(MAJOR)

- Record book for contractors

- Further check on check roll reports the source documents for payslips

- Should be for employees instead of contractors. Contractor management falls under 4.6.4.

Bukit Mas / Northbank / Tagas Estate

Pay day was held on the first week every month

There was no contractor for the estate.

There is no overtime observed on the sampled payslips.

Example of payslip was sighted, refer to indicator 4.4.5.3

Lokan Estate

Pay day was hled on the first week of every month

Example of payslip sighted, refer to indicator 4.4.5.3

Yes

4.4.5.10 Indicator 10 Other forms of social benefits should be offered by the employer to employees, their families or the community such as incentives for good work performance, bonus payment, professional development, medical care and health provisions.

(MINOR)

- This must entirely be at the Management discretions – any forms or quanta are acceptable.

- The community part is covered under the 4.4.3. This indicator is about benefit for employees only and should not involve the community, the employees or their families.

All audited estates

There are benefits provide to employees such as free education for children of both local Malaysia and foreign families, free medical, sport facilities and family day activities.

Yes

4.4.5.11 Indicator 11 In cases where on-site living quarters are provided, these quarters shall be habitable and have basic amenities and facilities in compliance with the Workers' Minimum Standards Housing and Amenities Act 1990 (Act 446) or any other applicable legislation.

(MAJOR)

Those temporary housing and amenities acknowledged by Jabatan Tenaga Kerja (JTK) and local authorities are accepted.

All audited estates

Workers have access to clean food storage areas and proper living houses provided with sufficient facilities. Houses are provided with electricity, clean water supply, fire extinguisher for safety

Through onsite inspection and observation, electricity and clean piped water is supplied to all workers housing.

Yes







4.4.5.12 Indicator 12 The management shall establish a policy and provide guidelines to prevent all forms of sexual harassment and violence at the workplace.

(MAJOR)

- Refer to national guidelines on sexual harassment in the workplaces (Sexual Harassment policy)

- Absence of complaints (Suggest to add “Any actions taken to prevent or resolve issues shall be documented”).

Policy on Prevention and Eradication of Sexual Harassment in the Workplace dated 28/09/2010 sign by Chief Executive-Group Plantation. The policy indicates procedure on sexual harassment, flow chart on reporting on sexual harassment.

Policy mention in below

“Polisi untuk mencegah dan membasmi terhadap gangguan seksual yang tidak diundang di tempat kerja”

This statement has specified the need for the prevention of sexual harassment. During interviews and stakeholders’ consultation confirmed that there is no sexual harassment reported in and surrounding the estates areas.

Yes

4.4.5.13 Indicator 13 The management shall respect the right of all employees to form or join trade union and allow workers own representative(s) to facilitate collective bargaining in accordance with applicable laws and regulations. Employees shall be given the freedom to join a trade union relevant to the industry or to organize themselves for collective bargaining. Employees shall have the right to organize and negotiate their work conditions. Employees exercising this right should not be discriminated against or suffer repercussions.

(MAJOR)

- Foreign workers follow Immigration Act (by state)

Policy on Freedom of Association dated 22/03/2016 sign by Chief Executive-Group Plantations mention on the right of employee to join trade union.

Bukit Mas Estate

Sungai Segama Group of estate JCC meeting has been conducted on 05/07/2017. The meeting involved management and workers’ representatives. Among other discussion topics are basic amenities, safety and social condition

Northbank Estate

A Joint Consultative Commit-tee is established to enhance the working relationship. The JCC meeting is held once annually.

The last meeting was held on 18/05/2017

Tagas Estate

Yes







The estate has established JCC committee, chaired by Estate Manager. The JCC involve all level of workers. Interviews with workers indicated they are aware of their right in joining trade union.

Lokan Estate

The estate has been established JCC committee was chaired by the estate manager. JCC meeting was conducted on 20/06/2017 involved representatives of management and workers.

4.4.5.14 Indicator 14 Children and young persons shall not be employed or exploited. The minimum age shall comply with local, state and national legislation. Work by children and young persons is acceptable on family farms, under adult supervision, and when not interfering with their education. They shall not be exposed to hazardous working conditions.

(MAJOR)

- Employment records (Refer 4.4.5.5)

Child labor Policy was established dated 02/01/2017 sign by Chief Executive-Group Plantations. The policy strictly banned on the use of child labor.

Bukit Mas / Northbank Estate

Counterchecks with the workers list which indicate the birth date and the field observation show no child labor present in the estate.

Tagas Estate

Counterchecks with the workers list which indicate the birth date and the field observation show no child labor present in the estate.

Lokan estate

“List name of worker” have been reviewed for Lokan estate. Total of 110 worker data have been reviewed and all are above minimum age required by law.

Company have reviewed the name against the age in passport during hiring to ensure no young person been hired.

The management will provide advice where the

Yes







young person shall not come to the site during working or assist the parent.

This has been verified on site and during interview no young child was present.

4.4.6 Criterion 6 Training and competency

4.4.6.1 Indicator 1 All employees, contractors and relevant smallholders are appropriately trained. A training programme (appropriate to the scale of the organization) that includes regular assessment of training needs and documentation, including records of training shall be kept.

(MAJOR)

- Training programme and records

Attendance

Photos

Training contents

- Training needs for each operation.

- Regular assessment at least once a year.

- To include training for group manager for group certification.

All audited estates

The training documents provided were together with the attendance photos and training materials. Estates have allocated training as per SOP based on Job description or task of each worker. Training was provided for staff, workers and external parties such as contractors and suppliers. For example of training may refer to indicator 4.4.6.2

Yes

4.4.6.2 Indicator 2 Training needs of individual employees shall be identified prior to the planning and implementation of the training programmes in order to provide the specific skill and competency required to all employees based on their job description.

(MAJOR)

- Training matrix. All audited estates

Estates have established annual training programme for the year 2017. The estates management verify the need based on the workers’ job description.

Example of trainings provided to workers:

Bukit Mas estate

- Fire extinguisher Training dated 11/10/2017

- 3R training n dated 25/09/2017

- Bantuan kecemasan Training dated 20/09/2017

- SOP for Sprayer dated 07/03/2017.

Northbank Estate

Yes







IPM Training dated 26/09/2016

SOP for Sprayer dated 20/10/2017

First aid training dated 21/07/2017 for Storekeeper

SOP harvesting training on 17/10/2017.

SOP Premixing and safety training on 16/06/2017

SOP chemical mixing 16/06/2017.

Tagas Estate

Training on spraying on 25/08/2017

Harvesting training on 10/04/2017

Manuring SOP training 19/04/2017

Lokan Estate

SOP training spraying on 24/02/2017.

Harvesting training on 21/01/2017

4.4.6.3 Indicator 3 A continuous training programme should be planned and implemented to ensure that all employees are well trained in their job function and responsibility, in accordance to the documented training procedure.

(MINOR)

- Annual training programme. All audited estates

The training documents provided were together with the attendance photos and training contents. The estates have allocated training as per SOP based on work. All estates have established their annual training program for safety and health and policies.

Under Safety and Health Programme 2017 it covers SOP and policies training, inspection on worksite and housing, medical checkup and medical surveillance programed.

Yes







4.5 Principle 5 Environment, natural resources, biodiversity and ecosystem services

4.5.1 Criterion 1 Environmental management plan

4.5.1.1 Indicator 1 An environmental policy and management plan in compliance with the relevant country and state environmental laws shall be developed, effectively communicated and implemented.

(MAJOR)

Assessment of internal documents for example:

Availability of signed environmental policy concerning management and protection of the environment according to the applicable laws.

Environmental management plan which was developed from results of aspect and impact analysis, mitigation and monitoring plans and records of implementation and timelines.

Continual improvement programme.

Awareness and training programme on environmental management and improvement plans, minutes of meetings, attendance lists, photos

Interview of personnel and stakeholders concerning for example:

Knowledge of environmental policy and efforts to protect the environment e.g. compliance to applicable laws.


Environment charter dated 02/04/2017 approved by Chief Executive Plantations – appropriate infrastructure and responsibility for environmental affairs, preserve high conservation value tropical forest, EIA, conform to all environmental legislation, etc

Bukit Mas Estate:

Environment impact assessment, management action plans and continuous improvement plans for Sg. Segama group of estates dated 28/02/2017.

Northbank /Tagas estates:

Environment impact assessment, management action plans and continuous improvement plans for Tomanggong group of estates dated.05/10/2017

Lokan estate

Environment impact assessment , management action plans and continuous improvement plans for Jeroco group of estates dated 25/05/2017

Yes

4.5.1.2 Indicator 2 The environmental management plan shall cover the following:

(MAJOR)

a. An environmental policy and objectives.

All estates:

Environment charter dated 02/04/2014 approved by Chief Executive Plantations.

Yes







Objectives – appropriate infrastructures and responsibility for environmental affairs, preserve high conservation value tropical forest, conform to all environmental legislation, etc.

b. The aspects and impacts analysis of all operations.


Environmental aspect/impact assessment – harvesting, manuring, pest infestation, spraying, riparian reserve, workshop, washing of equipment, housing area sewerage, road maintenance, etc. Mitigating measures and monitoring programs implemented.

Yes

4.5.1.3 Indicator 3 An environmental improvement plan to mitigate the negative impacts and to promote the positive ones, shall be developed, effectively implemented and monitored.

(MAJOR)


Negative and positive impacts and monitoring plans are listed in the aspect/impact assessment, example. pruned fronds not recycled will result in soil erosion (negative) and minimize soil erosion by stacking (positive) and merit point system programme (monitoring).

Yes

4.5.1.4 Indicator 4 A programme to promote the positive impacts should be included in the continual improvement plan.

(MINOR)


Rainwater harvesting, Merit Point System competition for performance in progressive pruning, frond stacking, fertilizing, reduction of inorganic fertilizer, etc.

Yes

4.5.1.5 Indicator 5 An awareness and training programme shall be established and implemented to ensure that all employees understand the policy and objectives of the environmental management and improvement plans and are working towards achieving the objectives.

Bukit Mas:

Environmental impact assessment – management and improvement plan training programme for year 2017.

Soil erosion dated 07/03/2017, water pollution dated 07/03/2017, biomass dated 14/02/2017, ecological

Yes







(MAJOR) protection dated 07/03/2017 and air pollutions dated 14/02/2017.

Northbank estate:

Training conducted on 12/10/2017for all workers on policies, safety & health, emergencies, etc. Attendance records and photos sighted.

Training on impact to environment for gen-set operation dated 17/10/2017, ferry operation dated 13/10/2017 and ramp operation dated 17/10/2017.

Tagas estate:

Training on 16/10/2017 on policies, safety & health, etc. Attendance record and photos sighted.

Training on control of soil erosion dated 20/10/2017.

Lokan estate:

Training on environmental procedure dated 16/07/2017– prevention of pollution, control of pesticide usage, etc.

Daily briefing at muster ground on environment / safety & health policy, riparian reserve, open burning, proper disposal of waste oil, etc. Sighted record on briefing dated. 15/05/2017

4.5.1.6 Indicator 6 Management shall organize regular meetings with employees where their concerns about environmental quality are discussed.

(MAJOR)

Bukit Mas estate:

Latest meeting conducted on 10/10/17 together with OSH meeting – supplying water from rainwater and treatment plant, proper disposal of scheduled waste, etc.

Northbank estate:

Yes







Latest meeting conducted on 20/09/2017 on Environmental Quality. Items discussed – scheduled waste control, open burning, domestic waste, riparian area, fertilizer and chemical storage and protected species. Minutes sighted.

Tagas estate:

Latest meeting on 19/09/2017– no open burning, natural disasters and actions, hunting without permit, riparian area, smoke and noise, etc. Attended by HOD and workers, attendance record sighted.

Lokan estate:

Latest meeting conducted on 08/09/2017– scheduled waste, open burning, domestic waste, riparian area. Attendance record and minutes sighted.

4.5.2 Criterion 2 Efficiency of energy use and use of renewable energy

4.5.2.1 Indicator 1 Consumption of non-renewable energy shall be optimized and closely monitored by establishing baseline values and trends shall be observed within an appropriate timeframe. There should be a plan to assess the usage of non-renewable energy including fossil fuel, electricity and energy efficiency in the operations over the base period

(MAJOR)

- Records from the base year are to be verified (minimum 3 years baseline value average)

- Energy assessment plan

Northbank Estate:

Diesel usage records sighted for 2016 (xxx.000 liter) and 2017 till Sept (yyy.000 liter).

Baseline set at zzz,000 liter based on average of 4 years (2013-2016)

Increase of usage in 2016 due to new Holland tractor TS6110 110HP and new road gravelling totalled 10,574 km

Fossil fuel management plan – regular servicing of gen-set and vehicles, schedule for fuel usage, etc.,

Tagas estate:

5 years diesel consumption for vehicles and gen-set.

Yes







Baseline set at xx.000 liter based on 2013-2016 usage. Usage for 2016 was yy,000liter, 2017 was zz,000 liter until July 2018.

High usage in 2016 was due to diversion of crop to other mills for IP CSPO production

Lokan estate:

5 years diesel consumption record maintained. Baseline set at zzz.000 l/tFFB, average of usage from 2013-16.

Usage of diesel for 2016 was xxx.000 liter and for 2017 until September is yyy,000 liter

4.5.2.2 Indicator 2 The oil palm premises shall estimate the direct usage of non-renewable energy for their operations, including fossil fuel, and electricity to determine energy efficiency of their operations. This shall include fuel use by contractors, including all transport and machinery operations

(MAJOR)

- Estimated annually

- Estate annual budget gauge against actual usage

Northbank estate:

Sighted diesel consumption data for 2013-2017. Efficiency for 2016 is x.xx5 l/tFFB.

Efficiency for 2017 till Sept is y.yy l/tFFB. High usage due to new road gravelling, completed in mid Oct. No contractors hired.

Tagas estate:

Sighted diesel consumption for vehicle and gen-set for 5 years’ trend.

Efficiency for 2016 was x.xx l/tFFB and y.yy l/tFFB for 2017 till July.

High usage in 2016 due to diversion of crop to other mills for IP CSPO production.

Lokan estate:

5 years diesel consumption vs FFB production record. Efficiency for 2016 was x.xx l/tFFB and y.yy

Yes







l/tFFB for 2017 until Sept. Baseline set at z.zz l/tFFB.

4.5.2.3 Indicator 3 The use of renewable energy should be applied where possible.

(MINOR)

Not applicable. Document review s and site observation indicates no use of renewable energy.

Yes

4.5.3 Criterion 3 Waste management and disposal

4.5.3.1 Indicator 1 All waste products and sources of pollution shall be identified and documented.

(MAJOR)

- Identify all waste products (e.g. scheduled waste, domestic waste, clinical waste)

- Identify sources of pollutions (e.g. fossil fuel, spillages of lubricant)

All estates audited:

List of waste generated for estate and source of pollution are included in the environmental impact assessment – organic waste, domestic waste, human faeces, used oil, empty chemical containers, electrical waste, clinical waste, paper and cartridge ink.

Source of pollution – pesticide contamination, spillage / leakage of oil and chemicals, direct discharge of sewerage, etc.

Yes

4.5.3.2 Indicator 2 A waste management plan to avoid or reduce pollution shall be developed and implemented. The waste management plan should include measures for:

(MAJOR)

- E.g. use of POME as a substitute for inorganic fertilizers, EFB mulching for moisture retention, prune fronds stacking to prevent soil erosion

- All used chemical containers must be triple rinsed, punctured and dispose off through DOE authorized collectors

- Re-used empty chemical containers must be appropriately labeled and only used for spraying purpose

- Records of EFB and POME utilization


List of waste generated at estate and waste management plan included in aspect / impact assessment. Source of generation and mitigation measures established for organic waste, domestic waste, human faeces, used oil, empty chemical containers and other scheduled wastes. Monitoring of scheduled waste via inventory and disposal records

Collection of scheduled waste by licensed contractors, septic tanks installed for all offices and housing, recycling of waste like paper, plastic and metal, EFB for mulching, reuse of chemical containers for spraying, etc.

Min NC:

During the site visit at the housing quarters, it

Min NC

OBS 4

a. Identifying and monitoring sources of waste and pollution

b. Improving the efficiency of resource utilization and recycling of potential wastes as nutrients or converting them into value-added by-products







was noted that the recycle rubbish bin contains motor oil. This was to be recorded as schedule waste and to be disposed through schedule waste requirement.

Observation:

The wastewater from washing of chemical containers could be reused for chemical mixing. (Northbank estate)

4.5.3.3 Indicator 3 The management shall establish Standard Operating Procedure for handling of used chemicals that are classified under Environment Quality Regulations (Scheduled Waste) 2005, Environmental Quality Act, 1974 to ensure proper and safe handling, storage and disposal

(MAJOR)

- SOP Company has established SOP Schedule Waste Store HSPSB/SOP/19-17 and SOP Empty chemical store HSPSB/SOP/21-17


No used chemicals are stored or disposed.

Yes

4.5.3.4 Indicator 4 Empty pesticide containers shall be punctured and disposed in an environmentally and socially responsible way, such that there is no risk of contamination of water sources or to human health. The disposal instructions on manufacturer’s labels should be adhered to. Reference should be made to the national programme on recycling of used HDPE pesticide containers.

(MAJOR)

- Refer to 4.5.3.2 Bukit Mas / Northbank / Tagas / Lokan estates:

Empty pesticides containers are reused in the field for spraying activity.

Rejected containers are triple rinsed and punctured before disposal to licensed contractor as scheduled waste.

Yes

4.5.3.5 Indicator 5 Domestic waste should be disposed as such to minimize the risk of contamination of the environment and watercourses.

(MINOR)

- Location map of rubbish pits.

- Management to ensure sufficient distance of landfill from habitation and to avoid water contamination.


Domestic wastes are disposed to the landfills. Landfills are located away from water sources, fenced and signage posted with open and close

OBS 5







dates recorded.

Observation:

The old landfill needs to be monitored in order to ensure that there is no landslide, scavenging by animals and other factors that could affect the condition of the landfill. Signage need to be free from vegetation cover. (Bukit Mas estate)

4.5.4 Criterion 4 Reduction of pollution and emission

4.5.4.1 Indicator 1 An assessment of all polluting activities shall be conducted, including greenhouse gas emissions, scheduled wastes, solid wastes and effluent

(MAJOR)

- In-house assessment records are accepted.

Assessment of all polluting activities is included in the Environment impact assessment, management action plans and continuous improvement plans for Sg. Segama group of estates dated 28/02/2017

Bukit Mas:

Latest disposal of scheduled waste dated 29/09/2017 Sighted consignment notes to Legenda Bumimas for 5.6 ton of SW305 (waste oil), 971 kg of SW410 (rages and oil filters), 1.1 ton of SW102 (used batteries) and 62 kg of SW109 (used electronics).

Inventory of scheduled waste submitted to DOE every month via e-SWIS, sighted record dated Sept for SW102, 110, 305, 306, 404, 409 and 410.

Northbank estate:

Latest disposal of scheduled waste to Legenda Bumimas dated 14/09/2017. Consignment note no. 022731 for 54kg of SW110, no. 022728 for 27kg of SW410, note no. 022729 for 121kg of SW305, note no.022727 for 115 kg of SW102, note no. 022730 for 291 kg of SW409 and note no.022732 for 30kg of SW410(used PPE).

Yes







Summary report of inventory sighted for Sept (via eSWIS).

Tagas estate:

Latest of scheduled waste disposal to Legenda Bumimas dated 15/09/2017 for 39 kg of SW305, 149 kg of SW102, 115 kg of SW409, etc.

Summary report inventory sighted for Sept (submission via eSWIS).

Lokan estate:

Latest disposal of scheduled waste dated 14/09/2017 to Legenda Bumimas for 76 kg SW102, 262 kg of SW305, 61 kg of SW309, 27kg of SW410 (PPE), 277kg of SW410 and 24kg of SW409. Summary report of inventory sighted for Sept (submission to DOE via eSWIS). Scheduled waste are adequately stored and labelled.

Tagas Estate

Environment Impact Assessment dated 02/10/2017 – 05/10/2017pg33 listed of water generated in estate have been identify.

List of the wastes (example)

1. Organic waste

2. Domestic waste

3. Maintenance Oil

4. Digestive waste / human faecal

5. Empty chemical container







6. Electrical Waste

7. Paper and Cartridge ink

8. Clinical waste

9. Schedule waste

Fossil Fuel Management plan

1. Generator set

2. Vehicles

3. Water Pump

4.5.4.2 Indicator 2 An action plan to reduce identified significant pollutants and emissions shall be established and implemented

(MAJOR)

- E.g. Zero burning, management of water table in peat areas to reduce peat subsidence rate

- Refer to 4.5.3.1, 4.5.3.2, 4.5.7

Zero burning policy included in the Sustainable Agriculture Policy dated 21/02/2017approved by Chief Executive Officer Plantation

The policy was applied throughout the estates and site visit indicates that the policy was followed accordingly

Example:

Tagas Estate:

Action plan fir mitigation and the impacts have been identified in the same chapter as in 4.5.4.1.

Example

Organic waste

Environment impact:

Organic waste may attract rodent if not disposed properly

Odour from organic waste may causes unpleasant smell in the environment

Yes







Mitigation measure / action taken: Disposal of domestic waste on daily basis and is disposed at landfill far from waterways.

Emission

Generator set

Environmental Impact: Release of carbon to the atmosphere may cause smog (NOx, Sox, etc.,) and may effect human health such as lung cancer.

Mitigation measure / Action taken

Regular servicing of the generator set for smooth running of engine and prevent excessive emission of greenhouse gas.

4.5.5 Criterion 5 Natural water resources

4.5.5.1 Indicator 1 The management shall establish a water management plan to maintain the quality and availability of natural water resources (surface and ground water). The water management plan may include:

(MAJOR)

- E.g Water quality sampling analysis incoming and outgoing sources, quality parameters

- Frequency as requested by the state

- Refer to national and/or local regulations for riparian zones (e.g. DID)

- Check regulations for water catchment area

a) Monthly water usage records

b) Water sampling record from quarterly Environmental Monitoring (EMP)

Bukit Mas Estate:

Water management plan for Sg. Segama group of estates dated 01/03/2017– Water source identification, water usage monitoring, water quality analysis, improvement plans for water conservation, etc.

Northbank / Tagas Estate:

Water management plan for Tomanggong group of estates (TMGOE) and Tomanggong POM dated 05/10/2017

Lokan Estate:

Water management plan for Jeroco group of estates and Jeroco POM 1 & 2, dated May 2017.

Observation:

OBS 6







c) Verify estate records.

d) Riparian reserves.

-signage’s for riparian buffer zones

-Briefing training for sprayers and workers

e) Action plan and time bound plan.

f) Records of water levels.

The practice of adopting the WHO drinking water standard need to be reviewed due to the absence of specifications for several critical parameters, example. suspended solids, oil & grease, turbidity, pH, colour, E-coli and coliform count. (All estates)

The wastewater from washing of fertilizer bags could be channelled to the land instead of to the drain. (Northbank estate)

a. Assessment of water usage and sources of supply

Bukit Mas estate:

Water usage record sighted for 2017.

Half yearly water quality analysis conducted by external lab (Indelab). Latest certificate of analysis no. GN/8987/17 dated 21/08/2017complying to WHO drinking water standards.

Northbank estate:

Water usage record for Jan – Sept 2017. Sighted Aug 2017 water consumption report for Northbank – 6,483 cu.m.

Treated water supplied by Tomanggong POM.

Tagas estate:

Daily water usage recorded. Source is from water catchment pond.

Lokan estate:

Monthly usage of water recorded. Water consumption for 2016 was 7.7 mil liter and 5.7 mil liter for 2017 till Sept. Source is from water catchment pond.

Yes







Water testing for August 2017 by Plantation Central lab. Sampling point – buffer tank, housing area. Parameter pH 7.7, turbidity 0.5, chlorine residue ND, lead ND, total hardness 66, all complying to specifications.

Cert of analysis no. GN/8978/17 dated 11/08/2017 for water sample at staff house, Lokan (twice a year) from Indelab.

b. Monitoring of outgoing water which may have negative impacts into the natural waterways at a frequency that reflects the estate’s current activities

Upstream and downstream water analysis conducted by Bukit Mas lab. Latest report dated 1 14/08/2017

complying with specifications.

Yes

c. Ways to optimize water and nutrient usage to reduce wastage (e.g. having in place systems for re-use, night application, maintenance of equipment to reduce leakage, collection of rainwater, etc.).


Rainwater harvesting implemented for housing and offices. Wastewater from chemical container rinsing is reused for chemical mixing. POME channeled to land application.

Yes

d. Protection of water courses and wetlands, including maintaining and restoring appropriate riparian buffer zones at or before planting or replanting, along all natural waterways within the estate


All riparian areas are maintained with no indication or any signs of activities that not permitted occurs. Signboards regarding activities that not permitted such as no manuring, no spraying was placed at areas nearby to bridges and fence.

Yes

e. Where natural vegetation in riparian areas has been removed, a plan with a timetable for restoration shall be established and implemented


Field visit on all audited estates observed no intervention on natural vegetation occurs. The vegetation at riparian areas are well preserved.

Yes

f. Where bore well is being use for water supply, the level of the ground water

Not applicable, since it use rainwater harvesting for estates

Yes







table should be measured at least annually

4.5.5.2 Indicator 2 No construction of bunds, weirs and dams across main rivers or waterways passing through an estate.

(MAJOR)

- site verification.


Site visit indicates no construction of bunds or weirs that may block the waterways at the respective estates rivers.

Yes

4.5.5.3 Indicator 3 Water harvesting practices should be implemented (e.g. water from road-side drains can be directed and stored in conservation terraces and various natural receptacles).

(MINOR)

- E.g. Silt pits, water bodies, site drains, diversion of water on site drains at regular intervals


There are proper site drainage build to ensure no erosion occurs.at road.

Yes

4.5.6 Criterion 6 Status of rare, threatened, or endangered species and high biodiversity value area

4.5.6.1 Indicator 1 Information shall be collated that includes both the planted area itself and relevant wider landscape-level considerations (such as wildlife corridors). This information should cover:

(MAJOR)

- Observed and examine animal droppings along estate boundaries

- Locality maps

- Take photos of birds and animals and compare to IUCN list

- Internal biodiversity assessment can be accepted

- Biodiversity assessment guidelines

- Display of appropriate signage on prohibiting, hunting and fishing.

.

a. Identification of high biodiversity value habitats, such as rare and threatened ecosystems, that could be significantly affected by the grower(s) activities

Bukit Mas Estates:

HCV assessment dated 01/03/2017 was conducted by internal team.

Tomanggong group of estate

HCV assessment dated 02/10/2017-05/10/2017 was conducted by internal team.

Jeroco group of estates HCV assessment dated 8-18/05/2017 was conducted by internal team

OBS 7







Bukit Mas

HCV identified is based on HCV requirement. Assessment has taken into consideration of precautionary approach. Different HCVs have been identified including detecting of crucial area such as along the Segama river which is crucial.

Tomanggong Group of estate

HCV 4, 5 and 6 have been detected and identified in the report. All locations have been identified in the maps with GPS coordinates.

Lokan estate

HCV have been evaluated on a group level. Identification of HCV at Sg. Kretam including HCV 4.

Observation:

During the audit, site observation has resulted there are many other wildlife which is not recorded. Bukit Mas camera trap is only restricted in the area and not beyond the area. Another site has not covered well. There is no inventory to ensure proper identification. Thus the management plan has been based on the basic data. During the audit species sighted such as

1. Green imperial pigeon

2. Oriental pied hornbill

3. Black Hornbill

4. Cattle egret

5. Intermediate egret







6. Great Egret

7. Little egret

8. Slender billed crow

9. Long tailed shrike

10. Barn swallow

11. Oriental Darter

12. Brown shrike

13. Buttonquail

14. Lesser Coucal

15. White breasted Woodswallow

16. Collared Kingfisher

The above are not documented.

b. Conservation status (e.g. The International Union on Conservation of Nature and Natural Resources (IUCN) status on legal protection, population status and habitat requirements of rare, threatened, or endangered species), that could be significantly affected by the grower(s) activities

IUCN status has been used to determine and records have been made on all the wildlife identified through camera trap. The company has taken into consideration some sensitive site including adjacent to Tabin wildlife reserve. See finding for details.

Yes

4.5.6.2 Indicator 2 If rare, threatened or endangered species, or high biodiversity value, are present, appropriate measures for management planning and operations should include:

(MAJOR)

a. Ensuring that any legal requirements relating to the protection of the species

Signage was installed at locations in all estates to Yes







are met provide awareness to the workers. The signage include prohibits illegal hunting. The same have been observed in all estate sampled.

Legal compliance on this has been part of the document in legal list register.

Trainings have been provided to staff

Example:

Lokan estate morning briefing was provided on 12/10/2017 includes prohibition of hunting and importance of riparian area.

Additional training in Lokan has been conducted on 25/05/2017 and 25/09/2017. Training record has been verified.

b. Discouraging any illegal or inappropriate hunting, fishing or collecting activities and developing responsible measures to resolve human-wildlife conflicts

Effectiveness has been evaluated through workers’ interview. All workers interviewed are well aware of biodiversity and know the implication and no hunting process.

Yes

4.5.6.3 Indicator 3 A management plan to comply with Indicator 1 shall be established and effectively implemented, if required.

(MAJOR)

- Action plan.

- If ERT are present. Management plan have been placed in continuous improvement chapter. It has specified the action to be taken, guideline and improvement.

Appendix list has listed the impact and action to be taken. The plan for all audited sites have been reviewed.

Yes

4.5.7 Criterion 7 Zero burning practices

4.5.7.1 Indicator 1 Use of fire for waste disposal and for preparing land for oil palm cultivation or replanting shall be avoided except in specific situations, as identified in regional best practice.

- SOP for planting and replanting. Zero burning included Sustainable Agriculture Policy dated 02/02/2017 approved by Chief Executive Officer Plantation.

OPAP no 2 revised on Oct 2014 title land clearing,

Yes







(MAJOR) preparation and planting state no burning will be used and Point 2.1 specifies no burn method.

OPAP no 10 revised on Jan 2016 title pest and diseases.

Measure used did not considered fire as a process of doing such control.

Briefing has been conducted on 11/09/2017 in muster call and training on 06/10/2017.

4.5.7.2 Indicator 2 A special approval from the relevant authorities shall be sought in areas where the previous crop is highly diseased and where there is a significant risk of disease spread or continuation into the next crop.

(MAJOR)

- If controlled burning is allowed, examine the official letter of approval from the relevant authority.

Hap Seng Plantations Group Sustainable Agriculture Policy states no burning allowed.

No fire observed during field inspection at the sampled estates.

Yes

4.5.7.3 Indicator 3 Where controlled burning is allowed, it shall be carried out as prescribed by the Environmental Quality (Declared Activities) (Open Burning) Order 2003 or other applicable laws.

(MAJOR)

Refer above Yes

4.5.7.4 Indicator 4 Previous crops should be felled or mowed down, chipped and shredded, windrowed or pulverized or ploughed and mulched.

(MINOR)

OPAP no 2 revised on Oct 2014 title land clearing, preparation and planting states method for land preparation and . Point 2.1 of OPAP specifies no burning allowed The SOP was made at group level and apply at estates level.

Yes

4.6 Principle 6 Best Practices

4.6.1 Criterion 1 Site management

4.6.1.1 Indicator 1 Standard operating procedures shall be appropriately documented and consistently implemented and monitored.

- SOP on best practices. Hap Seng Plantations (River Estate) has established Standard operating procedure (SOP) named Oil Palm Agriculture Procedure (OPAP) dated August 2009 for

Maj NC 2







(MAJOR)

the best practices. Some of the OPAP was updated in JAN 2016 for upkeep of immature oil palm, upkeep of mature oil palm and pest and diseases. The OPAP covers all estate operations as below:

1. Nursery practice

2. Land clearing, preparation and planting.

3. Soil conservation and terracing

4. Road construction and maintenance.

5. Establishment and maintenance of legume covers.

6. Planting density and planting technique

7. Palm replacement during immaturity and supplying.

8. Upkeep of immature oil palms.

9. Upkeep of mature oil palm

10. Pest and diseases.

11. Manuring

12. EFB application

13. Harvesting

14. Bunch census

15. Palm thinning.

For the consistence implementation of SOPs the management provides to workers

1. Regular training with difference aspects of SOP.







2. Agronomic report is produce annually by the agronomist department after visiting estate for implementation of best practice and include fertilizer recommendation.

Example:

Agronomist visit Bukit Mas 08/02/2017 – 9/02/2017, Northbank 22/05/2017 – 23/05/2017, Tagas08/06/2017 – 09/06/2017, Lokan14/03/2017 – 15/03/2017

3. The Plantation Adviser (PA) will visit the estate twice a year and produce individual report The report will become the base to review the current SOP if it is needed.

Example: Northbank 17/07/2017 – 18/07/2017, Tagas 07/08-08/08/2017 07/08/2017 – 08/08/2017, Lokan 24/07/2017 – 25/07/2017.

Example of training conducted:

1. Bukit Mas estate training spraying on 07/03/201. Manuring training was conducted on 10/03/2017. Harvesting training on 14/02/2017.

2. Lokan estate training spraying on 24/02/2017. Harvesting training on 21/01/2017.

3. Tagas estate training spraying on 25/08/2017 Harvesting training on 10/04/201. Manuring SOP training 19/04/2017.

4. Lokan estate training for chemical application for sprayer and safety at store dated 16/10/2017. Spraying training conducted on 24/02/2017.







Harvesting & safety training on 21/01/2017.

5. North bank estate Training on Genset operation impact on environment dated 17/10/2017 SOP on ramp operation dated 17/10/2017

Maj NC:

Incorrect amount of chemicals was used for mixing, example: 60 liters of glyphosate used for 52 containers (1.15 liters per container) dated 05/09/2017 and 20 liters of glyphosate used for 27 containers (740 ml per container) dated 28/08/2017. Specification was 375 ml per container. (Northbank estate)

2000 gm of Ally was used for 160 containers (12.5 gm per container) dated 17/10/2017 specification was 24 gm per container. (Lokan estate).

Chemical mixing was not recorded on 10/10/2017 & 13/10/2017 for Garlon, and 13/10/2017 & 19/10/2017 for Dewana. (Bukit Mas estate).

Chemical mixing was not recorded on 10/10/2017 for Basta. (Tagas estate)

Incorrect amount of calcium hypochloride (chlorine) was added to the water treatment process, example: for the month of October, 7.73 gm was added everyday instead of 800 gm. (Lokan estate)

The formulations for chemical mixing could be improved by indicating the different type of chemicals that need to be mixed for each type of weeds.

4.6.1.2 Indicator 2 Where oil palm is grown within permitted - Appropriate terracing For slope areas and terrace cultivation planting of Yes







levels on sloping land, appropriate soil conservation measures shall be implemented to prevent both soil erosion as well as siltation of drains and waterways. Measures shall be put in place to prevent contamination of surface and groundwater through runoff of either soil, nutrients or chemicals.

(MAJOR)

- Planting of legume cover crops

- In the case of Sabah, no replanting on slopes of 25 degrees and above unless specified in the EIA report and approved by the Environmental Protection Department (EPD).

- In the case of Sarawak, no replanting on steep slopes unless specified in the EIA report and approved by the Natural Resources and Environment Board (NREB).

cover crops such as legume and fronds stacking for soil erosion control. Nephrolepis Biserrata, soft grass is planted to control erosion.

Soil conservation and terracing - HSPHB OPAP No 3 amended July 2009

Classification of slope according to Sabah legislation slope of 25 degrees or steeper are considered as high risk erosion areas and cannot developed for new planting unless specified in the EIA report and approved by relevant authorities. For Sabah areas of 100 ha to 500 ha are subject to approval of mitigation measure which is stated in SOP for soil conservation and terracing dated 01/04/1994 and revised in July 2009.

The estate applies 3 methods for soil organic matter preservation for the upkeep of mature oil palms. Ref no HSPHB OPAP No 9 date: 01/04/1994 and revised: Jan 2016

1. Vegetation maintain in inter-row to minimise soil erosion, improve soil physical properties and organic status example legume cover crop (LCC), Nephrolepis bisserata and paspalum conjugatum) and other soft grasses.

2. Palm Platforms for soil erosion, fertilizer wash-off and facilitate harvesting and fruit collection.

3. EFB application to maintain the moisture for the soil and erosion.

Practices that maintain or enhance soil fertility to ensure sustained yield is contained in OPAP 3, OPAP 11 and OPAP 12.







Actual fertilizer application was sighted and reviewed. Monthly monitoring by estate managers. The estate has records by each block and each division. The fertiliser program is based on the Agronomic Advisory estates visit., For this year Agronomic Advisory visit was carried out as follows:

Example:

1. Bkt Mas Estate: 08/02/2017 – 09/02/2017

2. Northbank Estate: 22/05/2017 – 23/05/2017

3. Tagas Estate: 08/06/2017 – 09/06/2017

4. Lokan Estate: 14/03/2017 – 15/03/2017

4.6.1.3 Indicator 3 A visual identification or reference system shall be established for each field.

(MAJOR)

- Block marking. Site visits could observe the block marking was visible and put up at road junction of each block. Each of the estate has the block number and division for easy daily operation planning and operations.

Bukit Mas Estate

The estate has 4 Divisions A, B, C & D and has established block marking in the map and on site.

Northbank Estate

The estate has 4 Divisions 1, 2, 3 & 4 and has established block marking in the map and on site.

Tagas Estate

The estate has 3 Divisions A, B, C and has established block marking in the map and on site.

Lokan Estate

Yes







The estate has 4 Divisions A, B, C, D and has established block marking in the map and on site.

4.6.2 Criterion 2 Economic and financial viability plan

4.6.2.1 Indicator 1 A documented business or management plan shall be established to demonstrate attention to economic and financial viability through long-term management planning.

(MAJOR)

- Operational plan for at least 2 years.

- Refer to 4.6.2.3

A 5 years’ financial projection from 2018 to 2022 is established by estate covering all aspects of estate operations such as FFB yield per ha and per mt that includes CPO & PK, CAPEX.

Example:

A 5 years’ financial projection from 2018 to 2022 is established covering all aspects of the estate activities such as crop yield, crop output per ha, etc., for audited estates were sighted and reviewed.

Yes

4.6.2.2 Indicator 2 Where applicable, an annual replanting programme shall be established. Long term replanting programme should be established and review annually, where applicable every 3-5 years.

(MAJOR)

- Long-term replanting programme.

The management has established annual and long term replanting program for year 2018-2022 was sighted and reviewed.

Example: Re-planting programme.

Year of replanting

Re-Planting area Ha in each estate

Estate 2018 2019 2020 2021 2022

Bukit Mas 290.5

Northbank

Tagas 189.0

Lokan 239.0

Yes

4.6.2.3 Indicator 3 The business or management plan may contain:

(MAJOR)

- Review of the business plan for the last 2 years’ performance.

a. Attention to quality of planting materials Hap Seng Plantations Group Yes







and FFB Hap Seng Plantations group do not used GMO seeds. Records on seeds purchased and planting material origin were reviewed (including name of breed, vendor, location, date of application and quantity per area). Document check on existing certificates, label tags on seeds packaging. On-site verification and discussion with plantation managers on the choice for planting or grafting material.

.Contracts and delivery notes of seeds suppliers are reviewed. The suppliers are Applied Agricultural Resources Sdn Bhd and Sime Darby Seeds and Agricultural Sdn Bhd.

Example:

Borang Akuan Jualan dan Penerimaaan Bahan Tanamanan Akta 582 – Serial AA 617540 dated 15/06/2017 purchased from Applied Agricultural Resources for Northbank Estate

Lokan estate

Borang Akuan Jualan dan Penerimaaan Bahan Tanamanan Akta 582 – Serial AA 617589 dated 20/09/2016 purchased from Applied Agricultural Resources Sdn Bhd

b. Crop projection: site yield potential, age profile, FFB yield trends

The management has a crop projection for the 5 years from 2018-2022 based on age profile and yield trends.

Yes

c. Cost of production: cost per tonne of FFB

The cost per ton of FFB and cost per HA is included in the business plan. A monthly progress report with comparison against the budget planning is sighted at the audited estates

Yes







d. Price forecast The price forecast per ton of FFB is included in the 5 years financial projection plan and updated.

Yes

e. Financial indicators: cost benefit, discounted cash flow, return on investment

The financial budget plan includes the relevant financial indicators.

Yes

4.6.2.4 Indicator 4 The management plan shall be effectively implemented and the achievement of the goals and objectives shall be regularly monitored, periodically reviewed and documented.

(MAJOR)

Monthly management and/or progress reports

The management plan is implemented. Copies of financial budget were sighted and reviewed at the audited estates.

The estate has to submit a monthly estate progress report to the management.

Yes

4.6.3 Criterion 3 Transparent and fair price dealing

4..6.3.1 Indicator 1 Pricing mechanisms for the products and other services shall be documented and effectively implemented.

(MAJOR)

- Monthly estate accounts.

- Sales and purchase agreement and/or contract.

The estates and mills are subsidiaries of Hap Seng

Plantations group. Therefore, there is no purchase

agreement.

Yes

4.6.3.2 Indicator 2 All contracts shall be fair, legal and transparent and agreed payments shall be made in timely manner.

(MAJOR)

- Evidence of payment

- Credit terms.

- Fair – Period of payment.

Refer above

Yes

4.6.4 Criterion 4 Contractor

4.6.4.1 Indicator 1 Where contractors are engaged, they shall understand the MSPO requirements and shall provide the required documentation and information.

(MAJOR)

- Contract agreement with special clause on MSPO indication, and/or self-declaration by the contractor to oblige regards to MSPO requirements (standardize form).

- Briefing to the contractor with regards to MSPO.

Since the company has their own workers for the estates operations and FFB transportation. They do not hired contractors for field work and transportation.

Yes

4.6.4.2 Indicator 2 The management shall provide evidence of agreed contracts with the contractor.

(MAJOR)

Since the company has their own workers for the estates operations and FFB evacuation. They do not hired contractors for field work and transportation.

Yes







- Interview of contractors. Therefore, no evidence of contract.

4.6.4.3 Indicator 3 The management shall accept MSPO approved auditors to verify assessments through a physical inspection if required.

(MINOR)

- Contractor auditable

- Site visit of contractor premises if applicable.

Hap Seng Plantations Group appointed TUV NORD Malaysia the accredited CB to conduct their MSPO certification.

Yes

4.6.4.4 Indicator 4 The management shall be responsible for the observance of the control points applicable to the tasks performed by the contractor, by checking and signing the assessment of the contractor for each task and season contracted.

(MAJOR)

- Work completion certificate or reports.

Since the company have their own workers for the estate operations for harvesting, upkeep and cultivation, manuring and FFB evacuation no contracts for these activities.

Yes

4.7 Principle 7 Development of new planting

4.7.1 Criterion 1 High biodiversity value

4.7.1.1 Indicator 1 Oil palm shall not be planted on land with high biodiversity value unless it is carried out in compliance with the National and/or State Biodiversity Legislation.

(MAJOR)

- EIA

- Refer to neighbouring estates (4.5.6.1)

- National and/or State Biodiversity Policy

Plantation last new planting was in 2014. No additional planting has been conducted therefore this is not applicable at the time of audit.

Estate Ha planted in 2014

Tomanggong estate 393.2

Batangan Estate 151.0

Lokan estate 244.0

Lutong estate 318.0

Yes

4.7.1.2 Indicator 2 No conversion of Environmentally Sensitive Areas (ESAs) to oil palm as required under Peninsular Malaysia’s National Physical Plan (NPP) and the Sabah Forest Management Unit under the Sabah Forest Management License Agreement. For Sabah and Sarawak, new planting or replanting of an area 500ha or more requires an EIA. For areas below 500ha

- Soil map

- Carbon stock analysis (if available)

- EIA

- Proposal for Mitigation Measures (PMM) (concise list of requirements relevant to environmental protection)


Yes







but above 100ha, a Proposal for Mitigation Measures (PMM) is required.

(MAJOR)

- Refer to ‘Akta Perlindungan Alam Sekitar’

4.7.2 Criterion 2 Peat land

4.7.2.1 Indicator 1 New planting and replanting may be developed and implemented on peat land as per MPOB guidelines on peat land development or industry best practice.

(MAJOR)

New Planting

-Evidence of water management programme/ plan.

Water level maintenance.

Replanting

-Existing companies or group best practice management is acceptable.

-Refer to 4.5.5.1.

Examine records on water level management.


Yes

4.7.3 Criterion 3 Social and Environmental Impact Assessment (SEIA)

4.7.3.1 Indicator 1 A comprehensive and participatory social and environmental impact assessment shall be conducted prior to establishing new plantings or operations.

(MAJOR)

- SEIA report. Plantation last new planting was in 2014. No additional planting has been conducted therefore this is not applicable at the time of audit.

Yes

4.7.3.2 Indicator 2 SEIAs shall include previous land use or history and involve independent consultation as per national and state regulations, via participatory methodology which includes external stakeholders.

(MAJOR)

- SEIA report. Plantation last new planting was in 2014. No additional planting has been conducted therefore this is not applicable at the time of audit.

Yes

4.7.3.3 Indicator 3 The results of the SEIA shall be incorporated into an appropriate management plan and operational

- Review development plan Plantation last new planting was in 2014. No additional planting has been conducted therefore this

Yes







procedures developed, implemented, monitored and reviewed.

(MAJOR)

is not applicable at the time of audit.

4.7.3.4 Indicator 4 Where the development includes smallholder schemes of above 500ha in total or small estates, the impacts and implications of how each scheme or small estate is to be managed should be documented and a plan to manage the impacts developed, implemented, monitored and reviewed.

(MINOR)

- Details as per requirement of SEIA report.


Yes

4.7.4 Criterion 4 Soil and topographic information

4.7.4.1 Indicator 1 Information on soil types shall be adequate to establish the long-term suitability of the land for oil palm cultivation.

(MAJOR)

- Government soil map is accepted for approval for planting.

- Subsequently a more details soil survey is required.


Yes

4.7.4.2 Indicator 2 Topographic information shall be adequate to guide the planning of planting programmes, drainage and irrigation systems, roads and other infrastructure.

(MAJOR)

- Government topography map is accepted.

- Any company GIS ground verification can be accepted


Yes

4.7.5 Criterion 5 Planting on steep terrain, marginal and fragile soil

4.7.5.1 Indicator 1 Extensive planting on steep terrain, marginal and fragile soils shall be avoided unless permitted by local, state and national laws.

(MAJOR)

- Refer to EIA report. Plantation last new planting was in 2014. No additional planting has been conducted therefore this is not applicable at the time of audit.

Yes







4.7.5.2 Indicator 2 Where planting on fragile and marginal soils is proposed, plans shall be developed and implemented to protect them and to minimize adverse impacts (e.g. hydrological) or significantly increased risks (e.g. fire risk) in areas outside the plantation.

(MAJOR)

- Refer to EIA and development plan.


Yes

4.7.5.3 Indicator 3 Marginal and fragile soils, including excessive gradients and peat soils, shall be identified prior to conversion.

(MAJOR)

- Soil suitability map and management blocking.


Yes

4.7.6 Criterion 6 Customary land

4.7.6.1 Indicator 1 No new plantings are established on recognised customary land without the owners’ free, prior and informed consent, dealt with through a documented system that enables indigenous peoples, local communities and other stakeholders to express their views through their own representative institutions.

(MAJOR)

- Refer to 4.7.3.1 Plantation last new planting was in 2014. No additional planting has been conducted therefore this is not applicable at the time of audit.

Yes

4.7.6.2 Indicator 2 Where new plantings on recognised customary lands are acceptable, management plans and operations should maintain sacred sites.

(MINOR)

- Review management plan. Plantation last new planting was in 2014. No additional planting has been conducted therefore this is not applicable at the time of audit..

Yes

4.7.6.3 Indicator 3 Where recognized customary or legally owned lands have been taken-over, the documentary proof of the transfer of rights and of payment or provision of agreed compensation shall be made available.

- Evidence of land use rights and payment made.


Yes







(MAJOR)

4.7.6.4 Indicator 4 The owner of recognised customary land shall be compensated for any agreed land acquisitions and relinquishment of rights, subject to their free prior informed consent and negotiated agreement.

(MAJOR)


Yes

4.7.6.5 Indicator 5 Identification and assessment of legal and recognised customary rights shall be documented.

(MAJOR)

- Refer to land use rights document.

Plantation last new planting was in 2014. No additional planting has been conducted therefore this is not applicable at the time of audit..

Yes

4.7.6.6 Indicator 6 A system for identifying people entitled to compensation and for calculating and distributing fair compensation shall be established and implemented.

(MAJOR)

- Terms and condition on NCR compensation system.

- Company compensation procedures.

- Court settlement (in cases of disagreement).

Plantation last new planting was in 2014. No additional planting has been conducted therefore this is not applicable at the time of audit..

Yes

4.7.6.7 Indicator 7 The process and outcome of any compensation claims shall be documented and made publicly available.

(MAJOR)

- Go for public search.

- On-going cases shall be recognized.


Yes

4.7.6.8 Indicator 8 Communities that have lost access and rights to land for plantation expansion should be given opportunities to benefit from the plantation development

(MINOR)

- Owners have to prove rightful ownership.

- Employment priority given to them.


Yes