plantation management unit batu lintang grouping …

INTERTEK CERTIFICATION INTERNATIONAL SDN BHD (188296-W)

Report No.: R9317/18-1 Kuala Lumpur Kepong Berhad, Batu Lintang Grouping Re-certification (Transfer CB)

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Kuala Lumpur Kepong Berhad

RSPO Membership No: 1-0014-04-000-00

PLANTATION MANAGEMENT UNIT

Batu Lintang Grouping Serdang, Kedah, Malaysia



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RE-CERTIFICATION ASSESSMENT

PUBLIC SUMMARY REPORT

KUALA LUMPUR KEPONG BERHAD


PLANTATION MANAGEMENT UNIT

Batu Lintang Grouping

Serdang, Kedah, Malaysia

Certificate No: RSPO 931788 Issue Date (Re-Cert): 26 Sep 2018 Expiry date: 25 Sep 2023

Assessment Type Assessment Dates Re-Certification Assessment (Transfer CB) 04–08 Jun 2018 Annual Surveillance Assessment (ASA-01) Annual Surveillance Assessment (ASA-02) Annual Surveillance Assessment (ASA-03) Annual Surveillance Assessment (ASA-04)

Intertek Certification International Sdn Bhd D-28-3, Level 28, Menara Suezcap 1, No. 2, Jalan Kerinchi, Gerbang Kerinchi Lestari, 59200 Kuala Lumpur, Malaysia.

Tel: +00 (603) 7931 0032 Fax: +00 (603) 7931 0419 Email: [email protected] Website: www.intertek.com

http://www.intertek.com/



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TABLE OF CONTENTS

Section Content Page No

1.0 SCOPE OF ASSESSMENT 4

1.1 Introduction 4

1.2 Location (address, GPS and map) mill, estates and hectarage 4

1.3 Description of supply base (fruit sources) 4

1.4 Year of plantings and cycle 5-7

1.5 Summary of Land Use – Conservation and HCV Areas 8

1.6 Other certifications held and Use of RSPO Trademarks 8

1.7 Organizational information/contact person 8

1.8 Tonnages Verified for Certification 9-10

1.9 Time Bound Plan and Multiple Management Units 10-11

1.10 Abbreviations Used 11

2.0 ASSESSMENT PROCESS 12

2.1 Assessment Methodology, Plan & Site Visits 12

2.2 Date of next scheduled visit 12

2.3 Qualifications of the Lead Assessor and Assessment Team 12

2.4 Certification Body 12

2.5 Process of Stakeholder consultation 13-14

3.0 ASSESSMENT FINDINGS 15

3.1 Summary of findings 15-52

3.2 Status of Identified Noncompliance and Corrective Actions, Observations and Identified Positive Elements

52-57

3.3 Summary of Feedback Received from Stakeholders and Findings 57-58

4.0 ASSESSMENT CONCLUSION AND RECOMMENDATION 59

4.1 Acknowledgement of Internal Responsibility and Confirmation of Assessment Findings

59

4.2 Intertek RSPO Certification Details for the PMU 60

APPENDICES

Appendix A Qualifications of the Lead Assessor and Assessment Team 61

Appendix B Assessment Plan 62-64

Appendix C Maps of location – Mill and Estates 65-74

Appendix D Photographs at the PMU 75-76

Appendix E Time Bound Plan 76-84



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1.0 SCOPE OF ASSESSMENT

1.1 Introduction

This Re-certification Assessment was conducted on the Plantation Management Unit (PMU) Batu Lintang Grouping of Kuala Lumpur Kepong Berhad (hereafter abbreviated as KLK), on 04-08 Jun 2018, to assess the organization’s operations of the mill and its supply bases for compliance against the RSPO Principles and Criteria (Apr 2013), Malaysian National Interpretation (MYNI 2014) and the RSPO Supply Chain Certification Standard (Jun 2017) for the Palm Oil Mill.

The plantation management unit (PMU) or management unit is equivalent to a certification unit as defined in the RSPO Certification Systems Document. Each PMU consists of one mill and its supply bases which are made up of estates owned and/or managed by KLK. 1.2 Location (address, GPS and map) of palm oil mill and estates

The Batu Lintang Grouping consists of one (1) palm oil mill, namely Batu Lintang Palm Oil Mill and four (4) estates as indicated in Table 1 below, which includes the addresses and GPS locations of the mill and estates. The location maps are provided in Appendix C.

Table 1: Address of Palm Oil Mill, Estates and GPS Location

No.

Name of Mill / Estates Address GPS Reference

Longitude Latitude

Batu Lintang Palm Oil Mill (Capacity: 25 MT/hour)

09800 Serdang, Kedah, Malaysia E 100°37’43.0” N 5°11’37.0”

1 Batu Lintang Estate Ladang Batu Lintang, 09800 Serdang, Kedah, Malaysia

E100°37’44.65’’ N 5°12’16.35”

2 Buntar Estate Ladang Buntar, 09800 Serdang, Kedah, Malaysia E100°35’35.37’’ N 5°10’21.35”

3 Pelam Estate Ladang Pelam, 09009 Kulim, Kedah, Malaysia E100°43’74.8’’ N 5°30’26.9”

4 Subur Estate Bt. 23 Batu Kurau, 34520 Taiping, Perak, Malaysia E100°47’43.6’’ N 5°02’53.1”

1.3 Description of supply base (fruit sources)

The supply base i.e. FFB sources to the POM at Batu Lintang Grouping PMU are mainly from the abovementioned estates of this PMU and other certified KLK Groupings estates. The PMU also received FFB from one RSPO certified (IP Model) estate, viz; Selama Estate of Genting Plantations. The FFB from the PMU estates, other certified KLK Groupings estates and Selama Estate are certified FFB. There are no FFB received from other non-certified Outside Crop Producers (OCP).

Details of the planted hectarage for the FFB supply to the PMU are as shown in Table 2 below.

Table 2: Estate Area Summary

No. Estate

Area Summary (ha)

(Year 2016)

Area Summary (ha)

(Jan – Dec 2017)

Certified Area Planted Area Certified Area Planted Area

1 Batu Lintang Estate 1,808 1,741 1,808 1,741

2 Buntar Estate 899 816 899 816

3 Pelam Estate 2,960 2,531 2,960 2,531

4 Subur Estate 1,290 1,259 1,290 1,259

Total: 6,957 6,347 6,957 6,347

Note:

This Assessment covered the overall land use for oil palm plantation areas, and the identified Conservation / unplantable areas including HCV (if any) marked out at the estates.



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1.4 Summary of plantings and cycle

The age profile of the planted oil palms is as shown in Table 3.

Table 3: Age Profile of Planted Oil Palms (Year 2017)

Estate Name Year of

Planting Cycle of Planting

* Mature OP (ha) – Above 3 years

Immature OP (ha) – 3 years & below

Total (ha)

Batu Lintang 94B 1st 11 11

95C 1st 33 33

97D 1st 29 29

98E 1st 47 47

99D 1st 31 31

01A 1st 57 57

03C 1st 44 44

04B 1st 79 79

91A 1st 38 38

94A 1st 44 44

95A 1st 56 56

95B 1st 37 37

96A 1st 70 70

97A 1st 40 40

97B 1st 52 52

98A 1st 62 62

98B 1st 42 42

98C 1st 15 15

99A 1st 67 67

99B 1st 75 75

00A 1st 77 77

03B 1st 72 72

05A 1st 76 76

07A 2nd 97 97

09A 1st 21 21

09B 2nd 46 46

10A 1st 54 54

11A 2nd 53 53

12A 2nd 34 34

12B 2nd 35 35

13A 2nd 69 69

14A 2nd 40 40



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14B 2nd 40 40

18 (replant 2018)*

1st 98

98

Total 1,661 80 1,741

Note:

* In Batu Lintang Estate, this 98 ha of land had been cleared for replanting in year 2018.

Buntar Estate 1997 1st 115 115

1998 1st 127 127

2000 1st 135 135

2001 1st 108 108

2002 1st 50 50

2003 1st 72 72

2004 2nd 93 93

2010 2nd 55 55

2014 2nd 61 61

Total 755 61 816

Pelam Estate 1994 1st 40 40

1995 1st 164 164

1996 1st 45 45

1997 1st 127 127

1998 1st 228 228

1999 1st 273 273

2000 2nd 226 226

2001 2nd 112 112

2002 2nd 40 40

2003 2nd 33 33

2004 2nd 308 308

2007 2nd 75 75

2008 2nd 171 171

2009 2nd 78 78

2010 2nd 178 178

2011 2nd 91 91

2014 2nd 53 53

2015 2nd 31 31

2016 2nd 67 67

2017 2nd 128 128



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2017C 2nd 53 53

2017D 2nd 10 10

Total 2,189 342 2,531

Note: In Pelam Estate, 70 ha of land previously planted with rubber had been cleared for planting of oil palm in year 2018. This area will be added in year 2018 age profile during next assessment. There is still a balance of 198 ha planted with rubber trees.

Subur 1995A 1st 19 19

1997A 1st 14 14

1998A 1st 81 81

1999B 1st 54 54

2000A 2nd 14 14

2002A 2nd 92 92

2003B 2nd 57 57

2006A 2nd 52 52

2009A 2nd 14 14

2009B 2nd 35 35

2009C 2nd 17 17

2009E 2nd 26 26

2014A 2nd 14 14

2017A 2nd 58 58

1992A 1st 20 20

1996A 1st 23 23

1996B 1st 15 15

1999A 1st 61 61

2003A 2nd 17 17

2008A 2nd 26 26

2011B 2nd 72 72

2012A 2nd 75 75

2015A 2nd 52 52

2018A 2nd 20 20

2009D 2nd 50 50

2010A 2nd 112 112

2011A 2nd 76 76

2013A 2nd 29 29

2016A 2nd 42 42

2016B 2nd 22 22

Total 1,065 194 1,259



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1.5 Summary of Land Use - Conservation and HCV Areas

The summary of Conservation and HCV Areas as identified in the PMU during this assessment is as shown in Table 4 below:

Table 4: Conservation and HCV Areas

# Statement of Land Use (Ha) Year 2016

Hectarage – Ha

Year 2017 Hectarage – Ha

1 Planted Area (ha) – Oil Palm 6,347 6,347

- Mature (Production) 5,679 5,670

- Immature (Non-Production) 668 677

2 Conservation Area (ha)

- comprising buffer zones along small streams, hilly areas, swampy and unplantable areas

160 160

3 HCV Area (ha)

- comprising buffer zones near river riparian, forest reserves, water catchments, burial & religious sites

0 0

1.6 Other certifications held and Use of RSPO Trademarks

KLK-Batu Lintang Grouping is also certified to the International Sustainability and Carbon Certification (ISCC). The RSPO’s trademarks and logo are not being used by the PMU audited. Instructions for use were provided and acknowledged by the PMU through a signed Memorandum of commitment agreeing to adhere to the latest “RSPO Rules on Communications & Claims” during the assessment. 1.7 Organizational information / Contact Person At Head Office: Mr. Sin Chuan Eng Sustainability Head Kuala Lumpur Kepong Berhad

Wisma Taiko, 1, Jalan S.P. Seenivasagam, 30000 Ipoh, Perak Darul Ridzuan, Malaysia Tel: +605-240 8000, 241 7844 Fax: +605-240 8114 Email: [email protected]

At KLK Batu Lintang Grouping - PMU: Mr. Yeo Boon Keat Palm Oil Mill Manager Kuala Lumpur Kepong Berhad Tel: +604-407 7316 Email: [email protected]



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1.8 Tonnages Verified for Certification

1.8.1 The breakdown of all the suppliers and their tonnages of FFB supplied to the POM at Batu Lintang Grouping based on the reporting period for current assessment are as shown in Table 5 below:

Table 5: Tonnages Verified for Certification (Jan to Dec 2017)

# Estate /Supplier FFB Processed

(MT) Main Receiving

Palm Oil Mill RSPO P&C

Certification By CB

A PMU Estate:

1. Batu Lintang Estate 39,449.97

KLK Batu Lintang POM

Intertek 2. Buntar Estate 16,217.85

3. Pelam Estate 48,207.30

4. Subur Estate 22,197.86

Sub-Total Batu Lintang Grouping

Estates: 126,072.98

B Other KLK Certified Estates:

1 Kuala Kangsar Estate (Selinsing) 11,838.21 KLK Changkat Chermin POM

Intertek 2 Allagar Estate 774.51

Sub-Total Other KLK Certified

Estates: 12,612.72

C Other RSPO Certified Estate:

1 Selama Estate (Genting Plantations) 6,038.64

FFB sold to other POMs near the estate as Genting Plantations has only one POM in Johor

Selama Estate is certified by BSI – Certificate No. RSPO 652233 expiry on 22 Sep 2020

Sub-total Other Certified Estates:

Total Certified: 144,724.34

1.8.2 Total annual tonnages of FFB supplied from the supply base to Batu Lintang Grouping POM during the previous period, current assessment and projected period are as shown in Table 6 below:

Table 6: Annual Tonnages of FFB

Estate / Supplier FFB Processed in

Year 2016 - Actual

FFB Processed in Year 2017 - Actual

FFB for Processing in Year 2018

- Actual + Projected

MT % MT % MT %

Batu Lintang Grouping 102,230.37 95.49 126,072.98 87.11 144,377 83.8

Certified PMUs under KLK Group 352.37 0.33 12,612,72 8.72 14,443 8.4

Other Certified Estates 4,472.11 4.18 6,038.64 4.17 13,440 7.8

Total 1,07,054.85 100 144,724.34 100 172,260 100

SCCS Model for POM IP IP IP



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1.8.3 The annual certified tonnages of CPO and PK production by the PMU from the supply base/suppliers as assessed and verified during the current assessment are detailed as shown in Table 7 below:

Table 7: Annual Certified Tonnages of CPO and PK

POM Year 2016 - Actual

Year 2017 - Actual

Year 2018 - Actual + Projected

Total Certified FFB Processed (MT)

107,054.85 144,724.34 172,260

Total Certified CPO Production (MT)

23,594.38 OER:

22.04% 30,258.67

OER:

20.91% 37,897

OER:

22.00%

Total Certified PK Production (MT)

4,804.18 KER:

4.49% 6,773.08

KER: 4.68%

8,096 KER:

4.70%

The POM has established and maintained procedures for the book keeping and monitoring requirements for the CPO at the mill. It is verified the POM has procedures for the “Identity Preserved – IP” model in accordance with the RSPO Supply Chain Certification Standards (SCCS) requirements. Verified activities and checked items for the SCCS of the POM are reported in section 3.1.1.

1.9 Time Bound Plan and multiple management units

The Time Bound Plan (TBP) includes the subsidiaries, mills and estates owned by KLK except for the Paloh Palm Oil Mill in Johor and Mill 1 in Sabah. These two mills are excluded from the TBP as they are meant for out growers and smallholders. This exclusion has been communicated to RSPO in year 2015. All the palm oil mills and estates in Malaysia have been certified. The TBP indicated the status and progress of the palm oil mills and estates in Indonesia, which is monitored by Pak Stephen and reviewed every 3 months with the Sustainability Head based in KLK Office in Ipoh, Perak, Malaysia. The TBP is achievable, unless otherwise, due to unforeseen circumstances. The various risks that may affect the achievement of the TBP include: • Appointment of certification bodies and their availability. • Uncertainties relating to the Laws and Regulations in Indonesia. • In Indonesia, ISPO precedes other certification standards. • In Indonesia, there are difficulties in the mobilizing internal resources due to its geographical locations. Details of the updated TBP as submitted by KLK and reviewed by Intertek are shown in Appendix E. KLK had conducted an internal audit on the uncertified units or holdings to determine compliance against Clause 4.5 (Minimum requirements for multiple management units) of the RSPO Certifications Systems for Principles & Criteria (Jun 2017). The Internal audit reports had identified the issues involved, on-going corrective actions and monitoring. The Joint Venture in Liberia does not required internal audit by KLK as it is part of Equatorial Palm Oil PLC (EPO), which is a stand-alone entity (KLK owned a 20.1% stake in EPO and a 50% stake in the Joint Venture, Liberian Palm Developments Ltd. The remaining 50% in Liberian Palm Developments is owned by EPO). Uncertified Units in Indonesia are:

Indonesia - Region Name of POM Name of Estate

Kaltim Berau Kebun Malindomas Perkebunan, Kebun Hutan Hijau Mas, Kebun Anugrah Surya Mandiri

Riau Nilo 2 Kebun Mutiara

Belitung Parit Sembada Kebun Alam Karya Sejahtera

Kalteng KMA Kebun Karya Makmur Abadi

Kalteng MAP Kebun Mulia Agro Permai Kebun Menteng Jaya Sawit Perdana



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The latest TBP dated 06/05/2018 was reviewed and changes were verified during the assessment. In Kaltim region, the Berau POM is targeted to be certified by end 2018. In Riau region, Kebun Mutiara of Nilo 2 POM had been audited in Mar 2018 and awaiting certificate. In Belitung region, Kebun Alam Karya Sejahtera of Parit Sembada POM is targeted to be certified by end 2018. For the Sumatra Utara region, the Gohor Lama and Padang Bharang mills been merged and named as Stabat mill. In Kalteng region, the KMA and MAP mills are targeted to be certified by end 2018. 1.10 Abbreviations Used

CB Certification Body LTA Lost Time Accidents

CHRA Chemical Health & Risk Assessment Intertek Intertek Certification International Sdn Bhd

CPO Crude Palm Oil KLK Kuala Lumpur Kepong Berhad

CSDS Chemical Safety Data Sheets MSDS Material Safety Data Sheets

CSPO Certified Sustainable Palm Oil MTCS Malaysia Timber Certification Scheme

CSPK Certified Sustainable Palm Kernel NCR Non-Conformance Report

EFB Empty Fruit Bunch NGO Non-Government Organization

EHS Environmental Health & Safety OER Oil Extraction Rate

EIA Environmental Impact Assessment OHS Occupational Health & Safety

ETP Effluent Treatment Plant PEFC Programme for the Endorsement of Forest Certification

FFB Fresh Fruit Bunch PK Palm Kernel

GAP Good Agriculture Practice PMU Plantation Management Unit

HCV High Conservation Values POM Palm Oil Mill

IPM Integrated Pest Management POME Palm Oil Mill Effluent

ISCC International Sustainability & Carbon Certification PPE Personal Protective Equipment

IUCN International Union for Conservation of Nature SCCS Supply Chain Certification Standard

KER Kernel Extraction Rate SOP Standard Operating Procedures



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2.0 ASSESSMENT PROCESS

2.1 Assessment Methodology, Plan and Site Visits

Since 03 May 2018, Intertek has initiated public communications and notifications and invited the relevant stakeholders before the assessment to provide feedback and comments on their concern (if any) on Batu Lintang Grouping regarding the environmental, biodiversity, community development and other relevant issues. The Assessment team conducted the current assessment on 04-08 Jun 2018, in which all the 4 estates of Batu Lintang Grouping, namely, Subur Estate, Buntar Estate, Pelam Estate and Batu Lintang Estate as well as the palm oil mill were assessed for compliance against the RSPO requirements. The sampling design applied for the assessment include the mill and a minimum sample of x estates, where x = (0.8√y) x (z), where y is the number of estates and where z is the multiplier defined by the risk assessment. A high risk multiplier of z=1.4 is set for this PMU due to this assessment being a re-certification and transfer from another CB which require a greater focus on potential risks in relation to social, environmental and biodiversity issues. During the on-site assessment, relevant documents and records, including Standard Operating Procedures (SOP), management plans, hectarage development, FFB, CPO and PK production, oil palm age profile, operational controls and measures, operational data and records, training records, etc. were reviewed and verified for compliance. The Assessment team using the process approach auditing technique covered the palm oil mill and estate operations, agricultural practices, pest management, pesticide and fertilizer application, occupational health and safety, social accountability, environment and other requirements. Stakeholders’ interviews were conducted during the assessment and feedback obtained as part of information and evidence gathering. (See section 2.5 Process of stakeholder consultation). The PMU was also assessed against the requirements of RSPO Supply Chain Certification Standard for CPO mill. This part of the assessment covered the verification of implementation of documented procedures and availability of records to demonstrate compliance against all the elements for the “Identity Preserved – IP” Model requirements. These include documented procedure, purchasing and goods in, record keeping, sales and goods out, processing, monitoring and traceability of the CSPO and CSPK quantities, training for staff and claims. The details of the Assessment Plan (actual on-site) are provided in Appendix B. After completion of the on-site field assessment, Intertek also performed the evaluation of conformity against the RSPO Certification System requirements for CB. The assessment report, findings and associated documents were evaluated through an independent review by the Intertek Internal Technical Reviewer/Panel (and an External Peer Review in the case of an Initial Assessment or Re-certification Assessment) prior to the approval of this report and decision on continued certification by Intertek.

2.2 Date of next scheduled visit

The next scheduled visit will be the Annual Surveillance Assessment to be carried out within a 12-month period prior to the annual certificate anniversary date.

2.3 Qualifications of the Lead Assessor and Assessment Team

Competency details of the Lead Assessor and Assessment Team are given in Appendix A. 2.4 Certification Body

Intertek Certification International Sdn Bhd is part of the Intertek Group, which is a worldwide technical services organization dedicated to reducing clients' risks by providing technical inspection services, management system certification in quality, environmental, occupational safety & health and product certification, RSPO SCC, ISCC, Marine Sustainability Chain-of-Custody, MTCS and PEFC Chain-of Custody certification in applicable industry sectors including the agricultural and forestry sectors. Intertek operates globally providing clients with a wide-ranging technical inspection expertise and access to thousands of skilled specialists worldwide. Intertek Group’s certification business is ranked in the top 10 worldwide, and is available globally offering certification across a wide range of industries.



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2.5 Process of stakeholder consultation

Stakeholder consultations began with notification of the upcoming assessment through the websites of RSPO, KLK and Intertek. E-mails were sent to applicable stakeholders including government agencies, NGOs and local communities. E-mails and telephone enquiries were made prior to the actual assessment and stakeholder’s response and feedback received were followed up accordingly. During the assessment, stakeholders were interviewed and their feedbacks were recorded. Among the stakeholders consulted were workers, trade union leaders, women representatives; local community leaders, representatives of government departments / agencies, NGOs, suppliers and contractors. Details on stakeholders’ feedback, PMU response and Intertek verification / comments are provided in section 3.3. Among the list of key stakeholders consulted was the following: Government Agencies (by emails)

1. Land and Mines Office, Perak 2. Land and Mines Office, Kedah 3. Department of Environment, Perak 4. Department of Environment, Kedah 5. Department of Forestry, Perak 6. Department of Forestry, Kedah 7. Department of Immigration, Perak 8. Department of Immigration, Kedah 9. Department of Irrigation & Drainage, Perak 10. Department of Irrigation & Drainage, Kedah 11. Department of Labour, Perak 12. Department of Labour, Kedah 13. Department of Occupational Safety & Health, Perak and Kedah 14. Department of Occupational Safety & Health, Perak and Kedah 15. Department of Wildlife & National Parks, Perak 16. Department of Wildlife & National Parks, Kedah 17. Pertubuhan Keselamatan Sosial (SOCSO), Perak 18. Pertubuhan Keselamatan Sosial (SOCSO), Kedah

Statutory Bodies (by emails) 19. Malaysian Palm Oil Board (MPOB) 20. Malaysian Palm Oil Board (MPOB) - Northern Region 21. Malaysia Palm Oil Association (MPOA) 22. Malaysia Palm Oil Association Kuala Lumpur (MPOA)

NGOs (by emails)

23. All Women’s Action Society (AWAM) 24. BCSDM - Business Council for Sustainable Development in Malaysia 25. Center for Orang Asli Concerns COAC 26. Centre for Environment, Technology and Development, Malaysia - CETDEM 27. Eco Knights 28. ENO Asia Environment 29. Environmental Management and Research Association of Malaysia (ENSEARCH) 30. Environmental Protection Society Malaysia (EPSM) 31. Friends of the Earth, Malaysia 32. Future in Our Hands Society, Malaysia 33. Global Environment Centre 34. Institute of Foresters, Malaysia (IRIM) 35. JUST - International Movement for a Just World 36. Malaysian CropLife & Public Health Association (MCPA) 37. Malaysian Environmental NGOs – MENGO 38. Malaysian National Animal Welfare Foundation – MNAWF 39. Malaysia Nature Society, Perak 40. Malaysian Plant Protection Society (MAPPS) 41. National Council of Welfare & Social Development Malaysia - NCWSDM 42. National Union of Plantation Workers (NUPW)



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43. Partners of Community Organisations (PACOS) 44. Pesticide Action Network Asia and the Pacific (PAN AP) 45. Proforest - South East Asia Regional Office 46. R.E.A.C.H. - Regional Environmental Awareness Cameron Highlands 47. SUARAM - Suara Rakyat Malaysia 48. SUHAKAM - National Human Rights Society - Persatuan Kebangsaan Hak Asasi Manusia 49. Sustainable Development Network Malaysia (SUSDEN) 50. Tenaganita Sdn Bhd 51. The Malaysian Forum of Environmental Journalist (MFEJ) 52. TRAFFIC Southeast Asia - Wildlife trade & trafficking monitoring programme 53. Transparency International - Malaysian Chapter 54. Treat Every Environment Special Sdn Bhd. (TrEES) 55. United Nations Development Programme - UNDP Malaysia 56. Wetlands International (Malaysia) 57. Wild Asia Sdn Bhd 58. World Wide Fund for Nature (WWF) Malaysia

Local community (On-site interviews) 59. Consultative Committee & Gender representatives 60. Workers & Workers representatives 61. Village Heads & representatives 62. Suppliers & Contractors representatives



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3.0 ASSESSMENT FINDINGS

3.1 Summary of findings

Principle 1: Commitment to transparency

Criterion 1.1

Growers and millers provide adequate information to relevant stakeholders on environmental, social and legal issues relevant to RSPO Criteria, in appropriate languages and forms to allow for effective participation in decision making.

Indicators Findings and Objective Evidence Compliance

1.1.1 There shall be evidence that growers and millers provide adequate information upon request for information on (environmental, social and/or legal) issues relevant to RSPO Criteria to relevant stakeholders for effective participation in decision making.

Minor Compliance

The PMU has established and implemented a documented procedure SOP 1.0 “Stakeholders Engagement/Negotiation” Issue/Rev 2/1 dated 01/01/2018 that identified the mechanism for Request and Respond, Consultation & Meeting and Complaint & Grievances. Date of public notification of this assessment of the PMU was made on 03 May 2018. There were no further request for information/issues from external stakeholders.

Complied

1.1.2 Records of requests for information and responses shall be maintained.

Major Compliance

The PMU had established and maintained an updated site specific list of internal stakeholders, external stakeholders, government departments/agencies, consultants, contractors, suppliers, transporters, etc.

The POM and estate have conducted their respective internal and external stakeholders’ consultations.

Meeting minutes were adequately maintained. The meetings and consultations were noted to be attended by the various categories of stakeholders.

Records of participants and feedback given were maintained and appropriate actions taken.

Complied

Criterion 1.2

Management documents are publicly available, except where this is prevented by commercial confidentiality or where disclosure of information would result in negative environmental or social outcomes.


1.2.1 Management documents that are made available to the public shall include, but are not necessarily limited to:

Major Compliance

Management documents relating to environmental, social and legal issues were verified to be maintained and available to the public.

The following types of mandatory documents are available to the public upon request:

land titles/user rights,

occupational health and safety plan,

plans and impact assessments relating to environment and social impacts,

pollution prevention plans,

details of complaints & grievances,

negotiation procedures

continuous improvement plan

Public summary of certification assessment report.

Human Rights Policy.

These publicly available documents include key indicators of performance like waste management and disposal plans for the mill and estates.

Complied



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Also, Continual Improvement Action Plans include targets for waste reduction and pollution prevention.

Land titles/user rights (Criterion 2.2);

Copies of all land titles were available and have been maintained at the POM and Estates. HQ kept the original copies.

Complied

Occupational health and safety plans (Criterion 4.7);

Safety Policy and HIRARC documented for the mill and estates. The HIRARC for the mill and estates were also reviewed annually.

Occupational Safety and Health Plans have been established and documented for the POM and estates.

The Plans have been reviewed (annually), up-dated and approved by the respective managers for the mill and estates.

The OSH Programme 2018 include the following:

Safety & Health Committee meetings were held quarterly.

Annual medical surveillance,

Accident Reporting & Investigation,

Workplace inspection,

CHRA assessment,

Air compressors annual inspection,

Warning signs,

Chemical Register,

SOP for safe work,

PPE usage,

MSDS/CSDS,

JKKP 8 reporting of accidents annually,

Emergency Response Plan (ERP),

Emergency drills,

Inspections (line site, fire extinguisher, first aid box, chemical store, ELCB, PPE checklist, Vehicle daily inspection, gen set maintenance, ramp inspection, bridge and tanks inspection),

Monthly KPI Report on HSE performance,

Monthly Safety inspection & audit by Safety Officer,

CHRA report for POM issued on 05/08/2017 is still valid and recommendations were verified to have been adhered on-site. Next CHRA assessment scheduled for year 2022.

Programmes for protecting workers’ health and safety were satisfactorily implemented.

Complied

Plans and impact assessments relating to environmental and social impacts (Criteria 5.1, 6.1, 7.1 and 7.8);

Environmental aspect and impact assessment had been conducted and reviewed for the POM and estates.

Management Action Plan and Continual Improvement Plan documented and implemented.

Social Impact Assessment was also carried out and suitably reviewed by the KLK Sustainability Team together with the respective Mill and Estate Managers. Positive and negative impacts identified. Action plans were documented and implemented.

Complied

HCV documentation summary (Criteria 5.2 and 7.3);

The Assessment report on ‘Internal HCV and Conservation Areas’ have been conducted and reviewed. The Management Action Plans were implemented and monitored at the respective estates.

Complied

Pollution prevention and reduction plans (Criterion 5.6);

Pollution Prevention Management Plans have been conducted and reviewed. Action items include mitigation measures for pollution control (smoke emission, POME / effluent discharge), pesticides reduction, scheduled wastes (chemicals, drums, tyres, used PPE, hydraulic oil) and organic/domestic wastes disposal, reuse and recycling (paper, glass, plastic, scrap iron).

Complied



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Details of complaints and grievances (Criterion 6.3);

The mill and respective estates had maintained the Complaints and Grievances Logbook. Logbook entries were examined and found to be in order. Employees Consultative Council (ECC) representatives interviewed had confirmed that there were no serious issues.

Complied

Negotiation procedures (Criterion 6.4);

Presently, there is no conflict/dispute requiring negotiation or compensation pertaining to this criterion at this PMU. Negotiation procedure was maintained

The status on the ongoing negotiations on land issues against KLK Group plantations in Indonesia are detailed in Section 1.9: Time Bound Plan.

Complied

Continual improvement plans (Criterion 8.1);

Continual Improvement Plans in key operations for the mill and estates have been identified, documented and implemented.

Complied

Public summary of certification assessment report;

Public summary of certification assessment reports are available from the company upon request.

Complied

Human Rights Policy (Criterion 6.13).

The Human Rights Policy was documented and incorporated as part of the Sustainability Policy dated 01/12/2014 approved by CEO, Tan Sri Dato’ Seri Lee Oi Hian.

Copies of the policy found to be displayed at prominent locations in the POM and estate. Briefing and communication to all levels of the workforce, both administrative and operations departments were provided.

Complied

Criterion 1.3

Growers and millers commit to ethical conduct in all business operations and transactions.


1.3.1 There shall be a written policy committing to a code of ethical conduct and integrity in all operations and transactions, which shall be documented and communicated to all levels of the workforce and operations.

Minor Compliance

Code of ethical conduct and integrity for mill and estates incorporated as part of the Sustainability Policy dated 01/12/2014.

Copies of the policy were found to be displayed at prominent locations in the POM and estates.

Briefing and communication to all levels of the workforce, both administrative and operations departments were provided and verified to be recorded and understanding by personnel was confirmed via interviews done at POM and estates during current assessment.

Complied

Principle 2: Compliance with applicable laws and regulations

Criterion 2.1

There is compliance with all applicable local, national and ratified international laws and regulations.


2.1.1 Evidence of compliance with relevant legal requirements shall be available.

Major Compliance

SOP 2.0 “List & Summary of Applicable Laws and Regulation” App 1 Issue 1 / Rev. 1 dated 01/06/2015 established for identification, implementation & compliance and review of legal requirements applicable to the company.

The company has established a common Legal Register for both mill and estate identifying relevant applicable legal requirements, Licenses, Permits, Certificates and compliances status.

Example of the legislations and legal requirements identified in the register as follows:

• OSHA and Regulations Act 1994

• Factories and Machinery Act 1967, Regulations 1970

• National Land Code 1965

Complied



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• Environmental Quality Act 1974

• Environmental Quality (Scheduled Wastes) Regulations 2005

• Pesticides Act and Regulations Act 149

• Poison Act Regulations 1952 (Act 356)

• Industrial Relations Act and Regulation Act 177

• Workmen’s Compensation Act 1952

• Trade Union Act 1959

• Land Acquisition Act 1960

• Sales Tax Act 1972

• MPOB Licence

• Diesel and petrol permits

• Road Transport Act 1987 (Act 333)

• Weight and Measures Act 1972, regulations 16, 28A, 45)

The Legal Register covering the applicable local and international laws and regulations is available at the mill and estates and was verified to be reviewed for any relevant updates.

Legal compliance checklists used for monitoring the validity and renewal of permit/licenses: Steam engineers (Grade 1 and 2), boilermen and electricians were noted to be with valid certificates from relevant authorities (DOSH and Energy Commission). The POM has maintained a boiler register that indicate the date of commission, cleaned, inspected, tested or repaired. Valid certificates of fitness for boilers, sterilizers, air receivers, thermal deaerator, steam separator, vacuum oil dryer, etc. issued by DOSH.

Valid license for diesel generators issued by Energy Commission (“Suruhanjaya Tenaga”).

Valid licenses for authorized gas tester (ACT), authorized entrant and standby by person for confined space activities in POM.

Occupational Health and Safety Act 1994 – safety and health meetings to be conducted at quarterly intervals. Noise Monitoring Report is available.

Legal documents (work permits, passports) of foreign workers in the estates. Insurance coverage is available for foreign workers in the estates.

Based on the site observations, interviews and records checked, there was evidence of compliance with the relevant laws, regulations, local and international laws at the POM and estate. There were no cases of any violation or actions imposed by relevant authorities.

Statutory returns to relevant authorities found to be in compliance. For examples, JKKP8 for the reporting of incidences and accidents to DOSH and the Quarterly Return Form as per First Schedule of the Environmental Quality (Prescribed Premises) (Crude Palm-Oil) Regulations, 1977.

2.1.2 A documented system, which includes written information on legal requirements, shall be maintained.

Minor Compliance

The listing of all the relevant laws applicable included the international laws and conventions ratified by the Malaysian government are documented in the Legal Register.

The documented system for identifying, determining, reviewing and updating applicable legal and other requirements has been satisfactorily implemented.

Complied

2.1.3 A mechanism for ensuring compliance shall be implemented.

Minor Compliance

The mechanism for ensuring compliance involved updating (when necessary) and an annual review with the compliance status indicated in the Legal Register was implemented.

Complied



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The PMU had also conducted internal audits on the POM and estates for determining compliance of its operations with legal requirements and records were maintained.

2.1.4 A system for tracking any changes in the law shall be implemented.

Minor Compliance

Changes and amendment in laws and regulations are monitored through the following manner.

• Enquiring the laws books publisher.

• Communication with law/enforcement officers.

The PMU subsequently ensured that the changes were adequately updated.

Legal Register reviewed on 28/02/2018 included the Animal Welfare Act 2015 (Act 272) effective 18/07/2017.

Based on the site observations, interviews and records updated, the system used is appropriate to the operations at the PMU.

Complied

Criterion 2.2

The right to use the land is demonstrated, and is not legitimately contested by local people who can demonstrate that they have legal, customary or user rights.


2.2.1 Documents showing legal ownership or lease, history of land tenure (confirmation from community leaders based on history of customary land tenure, recognised Native Customary Right (NCR) land) and the actual legal use of the land shall be available.

Major Compliance

Copies of the land titles of estate were maintained and noted to be legally owned by the KLK Group.

The original copies are maintained by the Corporate Head Office. The legal use of the land confirmed to be for the cultivation of oil palms and agricultural use. There were no recorded or known disputes over the ownership of the land.

Complied

2.2.2 There is evidence that physical markers are located and visibly maintained along the legal boundaries particularly adjacent to state land, NCR land and reserves.

Minor Compliance

It was verified that there has been no change to the stated land titles and designated use for cultivation of oil palm and agricultural use.

Locations of several boundary stones and pole markers were visited and verified to be within the boundary perimeter of the estates.

On-site verification confirmed that there has been no planting beyond the legal demarcated boundary areas of the mill and estates.

Complied

2.2.3 Where there are or have been disputes, additional proof of legal acquisition of title and evidence that fair compensation has been made to previous owners and occupants shall be available, and that these have been accepted with free, prior and informed consent (FPIC).

Minor Compliance

There has been no dispute on the land rights in this PMU. As such, the process of fair compensation and FPIC is currently not required to be applied. The company has the SOP 3B “Responsible Development for New Planting” dated 01/01/2017, which defined the FPIC process for acquiring land and disputes management under SOP 3A “Land Acquisition (For OP Planting)”.

Complied

2.2.4 There shall be an absence of significant land conflict, unless requirements for acceptable conflict resolution processes (see Criteria 6.3 and 6.4) are implemented and accepted by the parties involved.

Major Compliance

There were no land conflicts in this PMU.

Not applicable

2.2.5 For any conflict or dispute over the land, the extent of the disputed area shall be mapped out in a participatory way with involvement of affected parties (including

There are no land disputes in the PMU. As such the process of participatory mapping is not applicable for verification of implementation.

Not applicable



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neighbouring communities and relevant authorities where applicable).

Minor Compliance

2.2.6 To avoid escalation of conflict, there shall be no evidence that palm oil operations have instigated violence in maintaining peace and order in their current and planned operations.

Major Compliance

No evidence that the palm oil operations have instigated violence in maintaining peace and order in their current and planned operations.

Not applicable

Criterion 2.3

Use of the land for oil palm does not diminish the legal, customary or user rights of other users without their free, prior and informed consent.


2.3.1 Maps of an appropriate scale showing the extent of recognised legal, customary or user rights (Criteria 2.2, 7.5 and 7.6) shall be developed through participatory mapping involving affected parties (including neighbouring communities where applicable, and relevant authorities).

Major Compliance

Appropriate landscape map with latitude and longitudes showing the legal boundary and neighbouring / surrounding areas of the POM and Estate was available and maintained.

The lands at the PMU are legally owned by KLK and no other users were identified in the land area. The existing estates are not encumbered by any customary land rights and therefore the process of participatory mapping is not required.

Complied

2.3.2 Copies of negotiated agreements detailing the process of free, prior and informed consent (FPIC) (Criteria 2.2, 7.5 and 7.6) shall be available and shall include:

a) Evidence that a plan has been developed through consultation and discussion with all affected groups in the communities, and that information has been provided to all affected groups, including information on the steps that shall be taken to involve them in decision making;

b) Evidence that the company has respected communities’ decisions to give or withhold their consent to the operation at the time that this decision was taken;

c) Evidence that the legal, economic, environmental and social implications for permitting operations on their land have been understood and accepted by affected communities, including the implications for the legal status of their land at the expiry of the company’s title, concession or lease on the land.

Minor Compliance

The lands at the PMU are legally owned by KLK. Records are available to show such land acquisition complied with legal requirements without infringement of any legal rights that require free, prior and informed consent (FPIC).

Complied

2.3.3 All relevant information shall be available in appropriate forms and languages, including assessments of impacts, proposed benefit sharing, and legal arrangements.

Minor Compliance

No cases of land claims in this PMU. As such this process is not applicable for verification.

Not applicable

2.3.4 Evidence shall be available to show that communities are represented through institutions or representatives of their own choosing, including legal counsel.

This process is not applicable during current assessment.

Not applicable



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Major Compliance

Principle 3: Commitment to long-term Economic & Financial Viability

Criterion 3.1

There is an implemented management plan that aims to achieve long-term economic and financial viability.


3.1.1 A business or management plan (minimum three years) shall be documented that includes, where appropriate, a business case for scheme smallholders.

Major Compliance

Business Plans for 3 years (FY 2017/2018, FY 2018/2019, FY 2019/2020) for the PMU have been prepared by the Palm Oil Mill and estates.

Details of the Business Plans include the following:

(1) Staff and Labour requirements;

(2) Crop projection; FFB yield/ha trends;

(3) Mill extraction rates; OER & KER trends;

(4) Cost of Production; Cost/mt FFB trends;

(5) Cost of Production; Cost/MT CPO trends;

(6) Financial indicators covering cost of labour, supervision, maintenance, depreciation, etc.).

(7) Provisions for sustainability efforts and improvement programmes (environmental, social, Occupational Safety & Health, training, etc.).

The Mill and Estate Managers monitor the operational performance against Key Performance Indications and targets (costs, FFB yields, quality, productivity, pesticides usage, fertilizers usage, etc.)

There is evidence of monitoring of costs against budget to achieve specified targets.

Performances are discussed in the monthly meetings held at the PMU and issues and actions needed are recorded for follow up in the next monthly meeting. The records of these meetings were available and verified during the audit.

Monthly, quarterly, half-yearly and yearly reports are submitted to the HQ.

Complied

3.1.2 An annual replanting programme projected for a minimum of five years (but longer where necessary to reflect the management of fragile soils, see Criterion 4.3), with yearly review, shall be available.

Minor Compliance

Annual replanting program for the estates had been prepared for five years (FY Oct 2017/Sep 2018 to FY Oct 2021/Sep 2022).

The replanting areas (ha) are as follows:

Estate 2017/18 2018/19 2019/20 2020/21 2021/22

Subur 55 81 68 23 0

Buntar 0 58 82 97 85

Pelam 70 204 110 133 99

Batu Lintang 137 79 133 62 70

A replanting cycle of 25 years has been adopted by the group.

Complied

Principle 4: Use of appropriate best practices by growers and millers

Criteria 4.1 Operating procedures are appropriately documented, consistently implemented and monitored.


4.1.1 Standard Operating Procedures (SOPs) for estates and mills shall be documented. Major Compliance

POM has documented the following procedures: 1. SOPs for Palm Oil Mill operations from reception of FFB, Weighbridge, Loading Ramp, Sterilization, Hoisting & Threshing, Empty Bunch Conveyor, Press & Digester, Clarification, Depericaroer Station, Nut & Kernel, Boiler, Engine Room, Raw Water Treatment Plant, Effluent Treatment Plant, Workshop



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Practices, etc. for the processing until the delivery of processed oil and POME management. 2. Laboratory and Milling Control Handbook (2nd Revision, 1999), 3. Sustainability Manual & SOPs (01 Jun 2015). 4. Procedures for Safe Work Rev. 1/2017- SOPs for safe working practices for all operations in the POM. 5. Guidelines for Hazard Identification, Risk Assessment and Risk Control (DOSH) – OSH Hazards & Risk Assessment on mill activities and HIRARC.

6. Supply Chain Procedure SOP 18.0 Issue 3 / Rev. 2 dated 05/05/2018. The estates have the following SOPs:

1. Group SOP for Estate Operations - Good Agricultural Practices (GAP) that incorporated the policy statement, objective and recommended best practices - The GAPs cover harvesting, field upkeep, nutrition, pests and diseases, conservation, by-product, replanting nursery, field identification, roads and drains.

2. Sustainability Manual & Sustainability SOPs (01 Jun 2015).

3. Guidelines for Hazard Identification, Risk Assessment and Risk Control (DOSH) – OSH Hazards & Risk Assessment on estate activities and HIRARC.

Relevant Key Performance Indicators (KPIs) specified for quality, environment, safety and cost control at the POM and estate.

Complied

4.1.2 A mechanism to check consistent implementation of procedures shall be in place. Minor Compliance

The implementation of the SOPs was verified to be consistently performed.

Records of implementation were verified which included system monitoring via internal audits and monitoring of operational activities at the field.

Internal audit on the POM conducted by the Sustainability Team on 19/04/2018. Internal audits on the Subur, Buntar, Pelam and Batu Lintang Estates conducted by the Sustainability Team on 15/04/2018, 16/04/2018, 17/04/2018 and 18/04/2018 respectively. Corrective actions taken on the non-conformances raised and the non-conformances were closed off.

Monitoring (i.e. daily, weekly and monthly) was done by Field Supervisors and Mandores. Records had been kept by the staff concerned for each operation to monitor the procedure and progress of work and these records would be checked by the Assistant Manager and the Manager regularly.

On-site assessment confirmed that the records were satisfactorily maintained.

Complied

4.1.3 Records of monitoring and any actions taken shall be maintained and available, as appropriate. Minor Compliance

Records of monitoring and actions taken had been maintained for more than 12 months at the mill and estates.

Daily Muster chits and briefing records were available at POM and at estates.

Actual operational and field activities were verified during on-site audit at the POM and estate.

Verified that estates monitoring records on spraying, manuring and harvesting operations were maintained and available at the estate.

Complied

4.1.4 The mill shall record the origins of all third-party sourced Fresh Fruit Bunches (FFB). Major Compliance

The mill received FFB from its own estates, diverted FFB from other KLK certified estates and FFB from out growers. Verified that the records indicated the source origin of FFB.

Complied



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Criteria 4.2

Practices maintain soil fertility at, or where possible improve soil fertility to, a level that ensures optimal and sustained yield.


4.2.1 There shall be evidence that good agriculture practices, as contained in Standard Operating Procedures (SOPs), are followed to manage soil fertility to a level that ensures optimal and sustained yield, where possible. Minor Compliance

SOPs for GAP as established are maintained and reviewed by the Estate Management.

Agronomist reports by the Agronomist from Applied Agricultural Resources were available for all the estates (e.g. Agronomist reports for Subur Estate dated 31/04/2017 and Buntar Estate dated 25/07/2017.

Annual fertilizer inputs had been reviewed by the Agronomist and monitoring records were also reviewed by the respective Estate management.

GAP for minimization of soil erosion and maintenance of soil fertility is also maintained via the frond stacking and selective pesticide weeding activities.

Soil sampling and leaf sampling records provided guide for the fertilizer application and all recommendations had been properly followed at estate levels.

Pesticides spraying records were available and maintained. Samples checked for usage and inventory records for the months between Oct 2017 and Mar 2018.

Evidences provided and field audit verified that good agricultural practices were adhered.

Complied

4.2.2 Records of fertiliser inputs shall be maintained. Minor Compliance

The fertilizer application records at the estates over the past 12 months were checked. The monthly summary of fertilizer applied per hectarage had been verified to be satisfactorily maintained and updated.

Complied

4.2.3 There shall be evidence of periodic tissue and soil sampling to monitor changes in nutrient status. Minor Compliance

Leaf sampling and analysis had been carried out annually for Subur, Buntar, Pelam and Batu Lintang Estates on 19/11/2016, 01/01/2017, 15/11/2016, and 16/12/2017 respectively.

Soil sampling and analysis (a 5 year cycle) carried out for Subur, Buntar, Pelam and Batu Lintang Estates in Nov-Dec 2016, Feb 2017, Nov-Dec 2016 and Feb-Mar 2018 respectively.

Fertilizer recommendations by the Agronomist for identified estate blocks to sustain the long term soil fertility and nutrient efficiency were satisfactorily followed.

Complied

4.2.4 A nutrient recycling strategy shall be in place, and may include use of Empty Fruit Bunches (EFB), Palm Oil Mill Effluent (POME), and palm residues. Minor Compliance

EFB mulching had been carried out at immature palms and for mature areas along the inter-row. EFB were spread in one row layer. Records of the quantities of EFB mulching including locations applied were maintained at the estates.

POME is applied to the field in Batu Lintang Estate, where the POM is located.

Complied

Criteria 4.3 Practices minimise and control erosion and degradation of soils.


4.3.1 Maps of any fragile/marginal soils shall be available. Major Compliance

Based on the soil maps and field visit verification done on-site, there was no fragile soil or marginal soils on the estates.

Soil series were noted as follows:

Subur (Home Division) – Chat, Local Alluvium, Batu Lapan, Padang Besar, Tavy, Durian. Subur Estate (Sg. Pulau Division) – Chat, Local Alluvium, Bungor, Batang Merbau, Durian.

Complied



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Subur Estate (Norsemen Division) – Chat, Local Alluvium, Bungor, BatuLlapan, Rasau, Serdang. Buntar (Home Division) – Harimau, Holyrood, Kg. Kubor, Local Alluvium, Rengam, Segari, Serdang. Buntar (Kedah Division) – Briah, Carey, Taulang, Perepat, Sogomana. Pelam Estate (Home Division) – Chat, Local Alluvium, Bungor, Batu Lapan, Durian, Gajah Mati, Malacca Yellow, Musang, Rasau, Serdang, Tavy. Pelam Estate (Nagalelai Division) – Kuah, Local Alluvium, Malacca Yellow, Tnau, Tebok. Batu Lintang (Home Division) – Munchong, Lintang, Local Alluvium, Holyrood, Serdang, Kerayong, Rengam, Kemahamg, Chat. Batu Lintang (Ghim Khoon Division) - Bungor, Chat Local Alluvium, Colluvium, Serdang.

4.3.2 A management strategy shall be in place for plantings on slopes between 9 and 25 degrees unless specified otherwise by the company’s SOP. Minor Compliance

The PMU has a SOP (Best Management Practices) for erosion control during replanting or any activities involving earth disturbance. Steps taken for erosion control are soil stabilization, run-off control and sediment trapping to mitigate the disturbed earth entering waterways.

There was no soil erosion noted during the field visit. No soil erosion encountered at estates audited as leguminous cover crop, macuna bracteata was well established.

Planting terraces constructed on land with slope more than 6o.

Complied

4.3.3 A road maintenance programme shall be in place. Minor Compliance

Road maintenance programme and budget allocated for year 2018 are available at the estate.

The programme covers road grading, compacting and patching which were progressively implemented.

Estate roads were verified to be in satisfactory condition at the fields visited.

Complied

4.3.4 Subsidence of peat soils shall be minimised and monitored. A documented water and ground cover management programme shall be in place. Major Compliance

It was confirmed during on-site assessment that there is no presence of any peat soil on the estates.

Not Applicable

4.3.5 Drainability assessments where necessary will be conducted prior to replanting on peat to determine the long-term viability of the necessary drainage for oil palm growing. Minor Compliance

There was no peat soil on the estates as confirmed by auditor’s on-site assessment

Not Applicable

4.3.6 A management strategy shall be in place for other fragile and problem soils (e.g. podzols and acid sulphate soils). Minor Compliance

Based on the estate soil maps and visit to the estates, there were no other fragile and problematic soils on the estates.

Complied

Criteria 4.4 Practices maintain the quality and availability of surface and ground water.


4.4.1 An implemented water management plan shall be in place. Minor Compliance

There is a generic Water Management Plan (SOP 5.0) documented for the POM and estate that include frequency of sampling for water analysis at river, final discharge point, tube wells, etc.

The POM and estates had also establish, document and implement a site specific Water Management Plan that clearly

Complied



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identify the water resources (government utility company water supply, rivers, water catchment pond and tube wells).

The water for domestic use at Subur estates is treated water from the government utility department, “Lembaga Air Perak (LAP)”.

The water for domestic use at the POM and Buntar, Pelam and Batu Lintang Estates is treated water from the government utility department, “SADA”.

The treated water supply complies with the Ministry of Health Specification for Drinking Water, which include the requirement of 0 in 100 ml for E.Coli.

The water from catchment pond and tube wells is only used for a supplement for washing and not for drinking and cooking. Water samples were taken twice a year and tested for pH, BOD, COD, Suspended Solids, Ammoniacal Nitrogen and Water Quality Index. Results verified to meet the specified requirements.

Rainfall data found to be monitored as part of the water management plan.

There is no river or waterway passing through Subur Estate and Buntar Estate.

There are two rivers (Sungai Malau and Sungai Mempelam) passing through Pelam Estate.

At Batu Lintang Estate, there are two river (Sungai Sallah and Sunagi Kerian) passing through the estate.

Water samples were taken twice a year at the inlet and outlet of the rivers and tested for pH, BOD, COD, Suspended Solids, Ammoniacal Nitrogen and Water Quality Index. Results verified to meet the specified requirements.

4.4.2 Protection of water courses and wetlands, including maintaining and restoring appropriate riparian and other buffer zones (refer to national best practice and national guidelines) shall be demonstrated. Major Compliance

Appropriate buffer zones with signages and markings had been maintained along rivers passing through the estate.

Complied

4.4.3 Appropriate treatment of mill effluent to required levels and regular monitoring of discharge quality, shall be in compliance with national regulations (Criteria 2.1 and 5.6). Minor Compliance

POME is applied to the field in Batu Lintang Estate, where the POM is located. Effluent water is not discharged into waterway.

Water samples were taken at monthly intervals at the outlet of the final discharge at the POM effluent pond. Tests conducted for pH, BOD, COD, Total Solids, Suspended Solids, Oil & Grease, Ammoniacal Nitrogen and Total Nitrogen. Analysis results were noted to be within DOE requirements. (DOE limit of 5,000 ppm max. for land application).

Stack emission monitoring by CEMS – Refer to 5.6.3

Complied

4.4.4 Mill water use per tonne of Fresh Fruit Bunches (FFB) (see Criterion 5.6) shall be monitored. Minor Compliance

Water usage in the mill from Oct 2016 to Sep 2017 ranged from 1.01 to 1.46 m3/tonne FFB. The average usage of 1.17 m3/tonne FFB was noted to be at the lower range of the industrial norm of 1.2 to 1.5 m3/tonne FFB.

Complied

Criteria 4.5

Pests, diseases, weeds and invasive introduced species are effectively managed using appropriate Integrated Pest Management techniques.


4.5.1 Implementation of Integrated Pest Management (IPM) plans shall be monitored. Major Compliance

IPM Plan for the estates includes the planting of beneficial plants and control of damage by pest and plant diseases.



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The estates have an IPM programme for the planting of 3 types of beneficial plants for biocontrol, i.e. Cassia cobanensis, Antigonon leptopus and Turnera subulata.

Observation: Subur, Buntar and Pelam Estates have IPM programmes and location maps for the planting of beneficial plants (Cassia cobanensis, Antigonon leptopus and Turnera subulata). However, (1) for Subur Estate and Pelam Estate, currently only Antigonon leptopus planted and the map only show the locations but not the planted area size. Also, there is no indication of the planned area size for the planting of Cassia cobanensis and Turnera subulata.

(2) for Buntar Estate, the map only show the planted locations of beneficial plants but not clear as to the types planted and the planted area size.

Barn owl used for the control of rodents (rats). Barn Owl boxes census carried out and location maps available.

Rat baiting is appropriately applied according to census results obtained.

The pest infestation was minimal on the estate.

Verified that presently, there were no cases of infestation by other pests such as bagworms and rhinoceros beetles.

Obs# OCL-01

4.5.2 Training of those involved in IPM implementation shall be demonstrated. Minor Compliance

IPM training conducted by for all those involved in IPM implementation.

Training records for staff and workers on IPM implementation for the past 12 months were available and was verified to be satisfactorily maintained at the estate office.

Complied

Criteria 4.6 Pesticides are used in ways that do not endanger health or the environment.


4.6.1 Justification of all pesticides used shall be demonstrated. The use of selective products that are specific to the target pest, weed or disease and which have minimal effect on non-target species shall be used where available. Major Compliance

Register of agrochemicals use with written justification is available (SOP 6.0 Appendix 2.0 Issue 1 / Rev 0 dated 01/06/2015). Examples of chemicals used are as follows:

Glyphosate isopropyl amine 41% – Ally

Indaziflam 45.5% - Alion

Verified that the specific pesticides had been used to deal with the respective target pest, weed or disease.

Complied

4.6.2 Records of pesticides use (including active ingredients used and their LD50, area treated, amount of active ingredients applied per ha and number of applications) shall be provided. Major Compliance

Records of pesticides and their active ingredients used, LD50, area treated, amount of a.i. applied per ha, and number of applications have been maintained.

Complied

4.6.3 Any use of pesticides shall be minimised as part of a plan, and in accordance with Integrated Pest Management (IPM) plans. There shall be no prophylactic use of pesticides, except in specific situations identified in industry’s Best Practice. Major Compliance

The KLK Group Policy for the estate to minimize the use of pesticides in accordance with IPM plan is maintained.

The pesticide reduction program is monitored on usage per hectare basis.

There was no prophylactic use of pesticides carried out at the estates.

Complied

4.6.4 Pesticides that are categorised as World Health Organisation Class 1A or 1B, or that are listed by the Stockholm or Rotterdam Conventions, and paraquat, are not used, except in

Since 01/07/2011, no usage of paraquat as stated in KLK Group Policy.

Complied



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specific situations identified in industry’s Best Practice. The use of such pesticides shall be minimised and eliminated as part of a plan, and shall only be used in exceptional circumstances. Pesticides selected for use are those officially registered under the Pesticides Act 1974 (Act 149) and the relevant provision (Section 53A); and in accordance with USECHH Regulations (2000). Minor Compliance

4.6.5 Pesticides shall only be handled, used or applied by persons who have completed the necessary training and shall always be applied in accordance with the product label. Appropriate safety and application equipment shall be provided and used. All precautions attached to the products shall be properly observed, applied, and understood by workers (see Criterion 4.7). Major Compliance

All pesticide operators (there are no contractor’s workers engaged for spraying) have attended training on the safe handling and application of pesticides in compliance with Regulation 22 of the Pesticides Act 1974.

Appropriate safety and application equipment (safety boots, safety helmets, rubber boots, cartridge masks, safety goggles, gloves and overalls) have been provided and used by the pesticides operators.

All precautions attached to the pesticides (MSDS) have been observed, applied and understood by the workers.

The estate has adequate facilities for mixing of pesticides and cleaning up after work. There are suitable storage areas for PPE.

Programme and training records verified to be satisfactory.

The training include spraying technique, precautions and symptoms of toxic reactions such as skin disorders, rashes, mouth and throat pain, breathing difficulties or nail problems. Verified during field inspection and interviews with workers performing spraying and manuring activities at the estate.

Portable warning signboards noted to be displayed at areas of spraying activity (5th Schedule).

First Aid Kits found to be available (as per 4th Schedule) at the field blocks during pesticides spraying in the fields. The contents and usage were satisfactorily recorded.

Complied

4.6.6 Storage of all pesticides shall be according to recognised best practices. All pesticide containers shall be properly disposed of and not used for other purposes (see Criterion 5.3). Pesticides shall be stored in accordance to the Occupational Safety and Health Act 1994 (Act 514) and Regulations and Orders, Pesticides Act 1974 (Act 149) and Regulations. Major Compliance

Storage of pesticides found to be kept under lock and key and its use in accordance with the Occupational Safety and Health Laws and Regulation 9 of the Pesticides Act 1974.

Emergency showers and eye wash are available at the mixing area and near the pesticides store in case of accidents and tested to be functional.

Material Safety Data Sheets (MSDS) are available in the store. The MSDS are in English and Bahasa Malaysia (understood by the workers).

Used chemical containers were either reused as containers for spraying solution. For disposal as scheduled waste, empty pesticide containers are triple rinsed and pierced at the bottom.

Complied

4.6.7 Application of pesticides shall be by proven methods that minimise risk and impacts. Minor Compliance

Pesticides had been applied using the Best Management Practices that minimize risk and impacts.

The pesticide operators found to understand the use of the right nozzle, spray drift, spray quality and run-off.

Programme and training records verified to be satisfactory.

Complied

4.6.8 Pesticides shall be applied aerially only where there is documented justification. Communities shall be informed of impending aerial pesticide applications with all relevant

The company has a policy not to carry out any aerial application of pesticides.

This policy is verified to be adhered at the PMU.

Complied



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information within reasonable time prior to application. Major Compliance

4.6.9 Evidence of continual training to enhance knowledge and skills of employees and associated smallholders on pesticide handling shall be demonstrated or made available. (see Criterion 4.8). Minor Compliance

The Annual Training Plan includes training on pesticides handling. All new pesticides operators were trained before being assigned to work with pesticides. In addition, based upon training needs, the existing pesticide operators (there are no contractor’s workers engaged for spraying) attended continual training to enhance their knowledge and skills on pesticides handling. Training attendance and records for 2017 for related personnel were verified to be maintained.

Information and safety precautions on the pesticides displayed on the notice board and next to the pesticides in the store.

Complied

4.6.10 Proper disposal of waste material, according to procedures that are fully understood by workers and managers shall be demonstrated (see Criterion 5.3). Minor Compliance

Scheduled waste had been disposed of through licensed contractors approved by DOE.

Records of scheduled waste collection at 180 days interval verified to be satisfactorily maintained.

Complied

4.6.11 Specific annual medical surveillance for pesticide operators, and documented action to treat related health conditions, shall be demonstrated. Major Compliance

The CHRA reports for the estates verified to be within the 5 years validity period and recommendations have been satisfactorily followed:

(a) Subur Estate – CHRA report dated Oct 2013.

(b) Buntar Estate – CHRA report dated 22/11/2017.

(c) Pelam Estate – CHRA report dated 29/02/2018.

(d) Batu Lintang Estate – CHRA report dated 24/11/2017.

Latest medical surveillance examination carried out for the workers (including sprayers) exposed to chemicals and pesticides on the following dates:

(a) Subur Estate – 22/02/2018.

(b) Buntar Estate –16/12/2017.

(c) Pelam Estate – 12/05/2018.

(d) Batu Lintang Estate – 16/12/2017.

Samples of the medical surveillance reports were checked and no abnormalities reported by the Medical Doctor. The medical reports showed that there was no case of low blood cholinesterase levels. All the workers declared by the Medical Doctor as fit for work with pesticides.

It is confirmed by the Estate Manager that any worker with health condition considered as unfit for work with pesticides shall be re-designated to other types of field work. No such cases are found in the estates as at the date of assessment. Pesticides operators were interviewed during field visits and feedback received that they do not have any symptoms of toxic reactions such as skin disorders, rashes, mouth and throat pain, breathing difficulties or nail problems. Although there were female manurers, all the sprayers are males. The female manurers knew about not being allowed to do work having exposure to chemicals and pesticides during pregnancy and breast-feeding.

Besides the annual medical surveillance, monthly clinical checks every 3 months (to check lungs gastro intestinal, urinary system, nails, skin, etc.) also carried out by Health Assistant on sprayers and records maintained indicate no cases of toxic reactions.

Complied

4.6.12 No work with pesticides shall be undertaken by pregnant or breast-feeding women. Major Compliance

Verified from records, field inspections and interviews that no pregnant or breast-feeding woman had been offered or engaged in work involving pesticides handling.

Complied



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Criteria 4.7

An occupational health and safety plan is documented, effectively communicated and implemented.


The occupational health and safety plan shall cover the following: 4.7.1 An occupational health and safety policy shall be in place. An occupational health and safety plan covering all activities shall be documented and implemented, and its effectiveness monitored. Major Compliance

Occupational Safety and Health (OSH) plan in compliance with OSH Act and Factory & Machinery Act 1967 was documented and implemented. OSH Policy found to be clearly displayed at POM and in the estate office. Adequate posters, regulations, newsletters were prominently displayed on notice boards. Interviewed workers demonstrated awareness towards occupational safety and health. The Safety & Health Officer is in charge of safety and health planning, operation & coordination. Mill & Assistant Mill Managers and Estate Managers / Assistant Estate Managers are also directly involved. Records on training had been verified at the POM and estates. Analysis on the understanding of training by the workers had been verified.

Complied

4.7.2 All operations where health and safety is an issue shall be risk assessed, and procedures and actions shall be documented and implemented to address the identified issues. All precautions attached to products shall be properly observed and applied to the workers. Major Compliance

Risk assessment carried out on operations where health and safety is an issue in order to determine the significant hazards. Significant hazards determined and documented include noise exposure, pesticides/ chemicals exposure, accident, fire. Procedures and actions implemented to mitigate the hazards.

Assessment of noise levels in the POM was done on 02/02/2016 and Consultant (Procoma Environment Sdn Bhd.) Report is available. Work areas identified with high noise levels are the boiler station and engine room where noise level exceeded 85 db. Mill management have taken steps to reduce the noise levels by construction of a room to isolate the gen sets, reducing the exposure time to high noise and mandatory use of both ear plugs and ear mufflers.

The latest audiogram was carried out for 23 POM employees on 14/03/2018. There were 3 employees whose audiometric reports indicated slight hearing impairment and audiometric re-test carried out within six months. There was no case of worker with a significant threshold shift. The OSHA Doctor submitted the audiometric report and JKKP 7 to JKKP Putrajaya and Kedah. The audiometric re-test report stated that there is no noise induced hearing loss (NIHL) and recommendation to reduce noise exposure for these workers. The Doctor will only refer worker with Induced Hearing Loss to SOCSO for benefits in accordance with the regulations.

Baseline audiogram and occupational and medical history records of workers maintained. The employees exposed to high noise levels were interviewed. The workers are aware of the danger of hearing loss due to prolonged exposure to high noise. The workers knew about the complaints process and mechanism available.

“Permit to work” system applied at the POM. Staff and workers have been trained and certified by NIOSH for gas entrant and stand-by involving work in confined space.

Appropriate PPE (safety boots, safety helmets, rubber boots, cartridge masks, safety goggles, gloves, overalls, ear plugs, ear mufflers) verified to be provided to and being used by the workers. Associated training provided to address safety and health issues.

Warning signs sighted at high noise areas and ear plugs and ear mufflers to be worn. There are also warning signs to use other PPE such as helmet and safety boots.

Complied



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An audit for determining compliance with the minimum standards had been conducted on all types of PPE used.

Adequate fire extinguishers and hose reels found to be located at strategic locations, operational and maintained in good conditions. Location map of fire extinguishers is available.

First Aid equipment was available at POM, estates and at worksites. Samples of First Aid box was checked and contents found to be complete and in usable order during field visit.

Training for workers in First Aid was carried out in the mill and estates and records maintained.

The POM and estates have established their accident reporting KPI and incident monitoring implemented.

Yearly reporting of JKKP8 regulations was submitted to JKKP on time, i.e. in January of each year. Supporting documentations and evidences of cases reported are maintained and adequately followed up including status of compensation payments made to victims / workers. The Safety & Health Officer maintains records on the rate of accidents to workmen, trends in rate of accidents, fatalities and non-fatalities captured to prevent mishaps.

Verified that additional HIRARC reviews also made by the Safety & Health team upon occurrence of incidences or accidents.

4.7.3 All workers involved in the operation shall be adequately trained in safe working practices (see Criterion 4.8). Adequate and appropriate protective equipment shall be available to all workers at the place of work to cover all potentially hazardous operations, such as pesticide application, machine operations, and land preparation, harvesting and, if it is used, burning. Major Compliance

Training programme planned for year 2018 has included all categories of workers.

Appropriate trainings on safe working practices are planned for: - workers exposed to machinery and high noise levels, - workers working in confined space, - harvesters and loaders, - pesticides operators and manurers .

Records of the trainings conducted in year 2017 are available and trainings held included firefighting, fire drill, first aid training, Emergency Response Team training and SOP training for sprayers, manurers, harvesters, loaders, tractor drivers, contractors and contractors’ workers (for FFB transportation).

The above trainings were conducted and records were maintained. Evaluations were carried out on each of the trainings to determine its effectiveness.

Complied

4.7.4 The responsible person/persons shall be identified. There shall be records of regular meetings between the responsible person/s and workers. Concerns of all parties about health, safety and welfare shall be discussed at these meetings, and any issues raised shall be recorded. Major Compliance

The responsible person (usually the Mandore or Headperson) had been identified. Records of regular meetings between the responsible person and workers to discuss about health and safety had been verified to be satisfactory. Understanding of the safety and health requirements was also verified during interviews at field visit with the respective mandores available on duty.

Complied

4.7.5 Accident and emergency procedures shall exist and instructions shall be clearly understood by all workers. Accident procedures shall be available in the appropriate language of the workforce. Assigned operatives trained in First Aid should be present in both field and other operations, and first aid equipment shall be available at worksites. Records of all accidents shall be kept and periodically reviewed. Minor Compliance

Accident and emergency procedures had been written in English and Bahasa Malaysia and briefed to staff, workers, contractors and visitors. Workers trained in First Aid were present in the mill and field operations. First Aid Kits are kept unlocked for emergency use. First Aid Kits were available at worksites and contents were checked to be sufficient. Records on all accidents had been verified to be maintained satisfactorily. Quarterly review on accident cases had been carried out during quarterly meeting of Safety, & Health Committee. Records on the status of follow up done were updated.

Complied



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4.7.6 All workers shall be provided with medical care, and covered by accident insurance. Minor Compliance

Medical care had been provided to all the workers.

Local workers are covered by SOCSO, whereas foreign workers are covered by Foreign Workers Compensation Scheme with insurance company.

Complied

4.7.7 Occupational injuries shall be recorded using Lost Time Accident (LTA) metrics. Minor Compliance

Records on Lost Time Accident (LTA) metrics for 2017 was verified to be satisfactorily maintained.

No cases of incidences and accidents for year 2017 as reported in the JKKP8 submitted to DOSH.

Complied

Criteria 4.8

All staff, workers, smallholders and contract workers are appropriately trained.


4.8.1 A formal training programme shall be in place that covers all aspects of the RSPO Principles and Criteria, and that includes regular assessments of training needs and documentation of the programme. Major Compliance

Training on RSPO P&C and RSPO Supply Chain were conducted on 18/04/2018. Interviews confirmed the satisfactory level of understanding on the requirements.

Training for various categories of operators, including all field and office staff, with regards to their duties and training needs had been reviewed on annual basis and appropriate training including ‘on-job’ training / supervision and briefings were satisfactorily documented. This was further confirmed during interviews done with sampled workers at the POM and estate.

Complied

4.8.2 Records of training for each employee shall be maintained. Minor Compliance

Records of training provided for each employee, including new employees were available and found to be satisfactorily maintained.

Complied

Principle 5: Environmental responsibility and conservation of natural resources and biodiversity

Criteria 5.1 Aspects of plantation and mill management, including replanting, that have environmental impacts are identified, and plans to mitigate the negative impacts and promote the positive ones are made, implemented and monitored, to demonstrate continual improvement. Indicators Findings and Objective Evidence Compliance

5.1.1 An environmental impact assessment (EIA) shall be documented. Major Compliance

The Environmental Aspect and Impacts Assessment were conducted and well documented. For both the POM and estates, It was reviewed on 18, 19 and 20 Mac 2018. The scope of assessment had included the management of mill effluents, management of pests and disease (IPM), maintenance of roads, drainage system fertilizing, spraying, transportation of FFB, schedule waste and garbage disposal, accordingly to the local requirements. The report had also included the action plans and recommendations to mitigate the negative effects and to promote the positive ones. The assessment had also included the relevant stakeholder to identify impacts and develop the mitigation measures such as relevant conservation activities applicable to the mill and estates.

Complied

5.1.2 Where the identification of impacts requires changes in current practices, in order to mitigate negative effects, a timetable for change shall be developed and implemented within a comprehensive action plan. The action plan shall identify the responsible person/persons. Minor Compliance

The mill and all the estates have conducted their Environmental impact assessment (EIA). The EIA is reviewed on annual basis. The findings are recorded in document titled “Environmental Aspect & Impact Assessment (EIA)”.

The environmental management plan is also in place and documented. This includes the potential impacts and measures to mitigate the negative impacts. The identification of responsible person was also included.

The environmental management plan is being implemented satisfactorily and effectively.



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Nonetheless, it was observed at Batu Lintang Estate that there is no indicator at site on the location of the water sampling point.

Obs#

SH-01

5.1.3 This plan shall incorporate a monitoring protocol, adaptive to operational changes, which shall be implemented to monitor the effectiveness of the mitigation measures. The plan shall be reviewed as a minimum every two years to reflect the results of monitoring and where there are operational changes that may have positive and negative environmental impacts. Minor Compliance

At mill and all the estates, monitoring of the documented environmental improvement plans is ongoing.

Implementation and monitoring of the documented environmental improvement plans was reviewed on 13 Mac 2018. The review has taken into consideration the mitigation of negative impacts and promotion of positive ones.

At the POM, the POME, ash and EFB is being delivered/recycle to the plantation for fertiliser and moisture retention purposes. Record on the delivery and usage of POME and EFB was made available during the audit.

At estates visited (Subur estate, Buntar estate, Pelam estate), it was found that the disposal of plantation waste materials was properly monitored and recorded. The waste materials (mostly fertilizer bags and plastics) were recycled and recorded in a register book. Stacking of fronts was also done effectively.

Monitoring and implementation of the environmental improvement plan were however not adhered to and found to be not conclusively implemented.

Location: Batu Lintang Estate, Ghim Khoon Division (Division 4)

A natural stream running across the estate was without the demarcation of the riparian zone.

In addition, there is no evidence of the water quality being sampled and analysed. Water sampling point was also not indicated on the map and at site.

Minor NC#

SH-01

Criteria 5.2

The status of rare, threatened or endangered species and other High Conservation Value habitats, if any, that exist in the plantation or that could be affected by plantation or mill management, shall be identified and operations managed to best ensure that they are maintained and/or enhanced.


5.2.1 Information shall be collated in a High Conservation Value (HCV) assessment that includes both the planted area itself and relevant wider landscape-level considerations (such as wildlife corridors). Major Compliance

HCV assessment for all estates visited were conducted in house by the sustainability team and documented in reports dated 18 Mac 2018 and 20 Mac 2018. There was no HCV present inside the area at both the POM and estates.

The exercise has also taken into consideration all aspects of environmentally sensitive areas such as pond that is inside the management areas.

Visits to site confirmed that all estates are surrounded by oil palm estates, belonging either to other companies or smallholders.

Perimeter boundaries bordering the estates with other lands were well demarcated with markers. Trenches were also dug to clearly demarcate the perimeter boundary of the estate. At some instances, estate roads also serve as perimeter boundary.

Location: Subur Estate, Norseman Division.

It was observed that an area has been identified as a water catchment area, as it served as a water source to the estate. Visit to site had established that this area is actually the starting point of a stream that runs across the plantation.

As it was not correctly identified and assessed, action plans to manage this area has not been planned and implemented.

Major NC#

SH-01

5.2.2 Where rare, threatened or endangered (RTE) species, or HCVs,

Record showed no presence of the HCV/RTE within their plantation boundary. However, occurrence of RTE, if any, will be

Complied



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are present or are affected by plantation or mill operations, appropriate measures that are expected to maintain and/or enhance them shall be implemented through an action plan. Major Compliance

recorded. Nevertheless, a monitoring plan is in place and measures being taken to maintain/enhance the surrounding management area. The measures were actively implemented and on going monitoring being done.

Regular patrols within the mill and estates were being carried out and findings recorded by the respective Estate executives to monitor the management areas.

Monitoring and control of any illegal hunting, fishing or collecting activities was also implemented.

Also, signage that prohibit hunting, fishing and water polluting activities were verified on-site, found to have been satisfactorily maintained.

5.2.3 There shall be a programme to regularly educate the workforce about the status of these RTE species, and appropriate disciplinary measures shall be instituted in accordance with company rules and national law if any individual working for the company is found to capture, harm, collect or kill these species. Minor Compliance

Program to educate the workforce about the status of RTE is in place. The training program on the awareness of this subject matter was conducted and extended to include officials and workers of the estates. All estates visited had extended the awareness program. Training has been conducted on 13 Feb 2018 and 18 Apr 2018.. Record on the training program was made available during the audit.

There was also evidence of commitment to discourage any illegal or inappropriate hunting, fishing or collecting activities via the signage erected around the affected areas which prohibit such activities.

Complied

5.2.4 Where an action plan has been created there shall be ongoing monitoring: • The status of HCV and RTE species that are affected by plantation or mill operations shall be documented and reported; • Outcomes of monitoring shall be fed back into the action plan. Minor Compliance

The status of HCV and RTE species that are affected by plantation or mill operations was documented and reported;

Management plans were established and on-going monitoring was done by the Estate managers.

The overall management and status of HCV/RTE at the estates were reviewed and monitored and is ongoing.

Verification made during on-site assessment found it to be effectively implemented. Currently, there is no such occurrence of RTE species in their estates.

Complied

5.2.5 Where HCV set-asides with existing rights of local communities have been identified, there shall be evidence of a negotiated agreement that optimally safeguards both the HCVs and these rights. Minor Compliance

It was verified that there has been no instance of HCV set-aside that conflicts with the rights of local communities at the estates and mill.

Complied

Criteria 5.3

Waste is reduced, recycled, re-used and disposed of in an environmentally and socially responsible manner.


5.3.1 All waste products and sources of pollution shall be identified and documented. Major Compliance

All waste products and sources of pollution were identified and documented. Waste generated at both the mill and estates are identified in document “Environmental Aspect and Impact Assessment”.

The documentation and identification of all the waste products such as scheduled waste, domestic waste , clinical waste and recyclable waste such as metal, plastic, mill waste and polluting materials e g. EFB, POME, Stack emissions and Boiler ashes were maintained and monitored at the mill.

Scheduled Waste identified included spent hydraulic oil (SW 305), spent lubricant oil (SW 306) , used chemical containers/drums (SW 409), used filters (SW 410) , clinical waste (SW 404) and used batteries (SW 102).

Complied



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Records on the usage and disposal were well recorded and documented.

Segregation of wastes i.e. general wastes and scheduled wastes was verified to be satisfactory carried out in estate and mill. Proper storage areas were identified for the storage of the recyclable wastes at the estate and mill.

5.3.2 All chemicals and their containers shall be disposed of responsibly. Major Compliance

At the mill, the disposal of used chemicals and containers were done in accordance with their schedule on waste management as planned.

Stores for scheduled waste were inspected and audited at site i.e. mill, and disposal was done by scheduled waste disposal company authorized and licensed by Department of Environment, TexCycle Sdn Bhd. Latest disposal record was on 3 May 2018.

The mill has a proper Scheduled Waste Store for storing scheduled waste until time of disposal by DOE authorized waste disposal contractor.

An inventory on all the chemical and containers used was available and up to date.

Complied

5.3.3 A waste management and disposal plan to avoid or reduce pollution shall be documented and implemented. Minor Compliance

The waste management and disposal plan were in place at both the mill and estate. It has been documented and implemented as required and is being carried out responsibly.

Segregation of wastes i.e. general wastes and scheduled wastes was verified to be satisfactory carried out. Proper storage areas were identified for the storage of the recyclable wastes at the estates and mill. Appropriate secondary containment for the diesel skid tanks, chemical and scheduled waste storage areas was verified to be maintained at the mill.

Scheduled waste disposal at estate was done by appointed contractors (Aliran Segar Sdn Bhd, Kualiti Alam Sdn Bhd and Texcycle Sdn Bhd) that are licensed by the Department of Environment. Latest disposal consignments were on 26 Feb 2018, 01 Jun 2018 and 03 May 2018. Records were made available for audit.

The mill effluent was finally discharge for land application, with approval from the Department of Environment. The solid waste management and disposal plan using landfills was available at the estates. The landfill is used mainly for disposal of household/line site waste. Landfill management is satisfactory.

Recycling of crop residues / biomass i.e. EFB, pressed cake/decanter cake and POME had been implemented and applied to the estates, for the application. Management of EFB application plans and progress reports were verified to be satisfactory.

Recycling bins of three different colour codes for specific recycle waste were available in the mill and estate.

Location:

(a) Subur Estate, Home and Sungai Pulau Divisions

(b) Pelam Estate, Home and Nagalelai Divisions

(c) Batu Lintang Estate, Home and Ghim Khoon (Division 4) Divisions.

It was observed that unwanted fertiliser bags and other plastic waste materials, such as plastic bottles were evidently scattered around the plantation.

Location: Batu Lintang Estate, Home Division

Minor NC#

SH-02



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At Batu Lintang Estate, Home Division, plastic bottles were evidently seen being accumulated at the water gate to the final discharge point.

Observation raised: Landfill Management

At some estates, e.g. Norseman Division of Subur Estate, the date of opening and closing of landfill was not indicated.

At estates visited (Subur estate, Buntar estate, Pelam estate), it was found that the disposal of plantation waste materials was properly monitored and recorded. The waste materials (mostly fertilizer bags and plastics) were recycled and recorded in a register book. Stacking of fronts was also done effectively. Monitoring and implementation of the environmental improvement plan were adhered to and found to be effectively implemented.

Obs#

SH-02

Criteria 5.4 Efficiency of fossil fuel use and the use of renewable energy is optimised.


5.4.1 A plan for improving efficiency of the use of fossil fuels and to optimise renewable energy shall be in place and monitored. Minor Compliance

Monthly record on energy consumption for both renewable and non-renewable sources were kept and documented. It is monitored to optimise use of renewable energy. Data is being compiled for comparison and control for future improvement.

Visit to the mill showed evident that they are compiling the data, document it for further action to improve on their efficiency of using the renewable and non-renewable energy. At the mill, the monthly record was tabulated to show/record the amount of FFB processed, CPO produced, palm kernel produced, the usage of water, diesel usage, electrical power usage, fiber & shell usage and also the B.O.D level of the effluent discharge.

Apart from using diesel, electricity generation was through steam turbine and boiler where Palm fiber and PK shells were used as renewable energy/fuel.

At the estate, diesel consumption was also monitored on a monthly basis.

It was verified that energy usage are being monitored especially at the mill for better control and comparison of trends.

Complied

Criteria 5.5 Use of fire for preparing land or replanting is avoided, except in specific situations as identified in the ASEAN guidelines or other regional best practice.


5.5.1 There shall be no land preparation by burning, other than in specific situations as identified in the ‘Guidelines for the Implementation of the ASEAN Policy on Zero Burning’ 2003, or comparable guidelines in other regions. Major Compliance

Estates and mill had observed the policy of ‘Zero open burning’ for any replanting, if any, at the estate.

Field inspections made at the estate, showed no evidence of open burning.

Complied

5.5.2 Where fire has been used for preparing land for replanting, there shall be evidence of prior approval of the controlled burning as specified in ‘Guidelines for the Implementation of the ASEAN Policy on Zero Burning’ 2003, or comparable guidelines in other regions. Minor Compliance

The estate adhered to the ‘zero burning ‘policy for replanting at the estates. The old trees were chopped and left to rot at site.

Also, there was no evidence of any burning of domestic waste at the housing line.

Complied



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Criteria 5.6

Plans to reduce pollution and emissions, including greenhouse gases, are developed, implemented and monitored.


5.6.1 An assessment of all polluting activities shall be conducted, including gaseous emissions, particulate/soot emissions and effluent (see Criterion 4.4). Major Compliance

Assessment on all polluting activities including gaseous emissions, particulate and effluent has been made and documented.

Monitoring of mill gas emissions is being done online using the Continuous Emissions Monitoring System (CEMS). Report showed evident that the emission is within the permissible limits of DOE as verified by documents made available during the on-site visit to the mill.

POME treatment, monitoring and land application is monitored, maintained and adhered to DOE regulations.

Records were made available at both the POM and estates during the audit.

Complied

5.6.2 Significant pollutants and greenhouse gas (GHG) emissions shall be identified, and plans to reduce or minimise them implemented. Major Compliance

Identification of significant pollutants and greenhouse gas (GHG) emissions has been done and documented. e.g. POME, diesel / fuel, water, chemical and fertilizer. Their usage have been recorded and documented at both the POM and estates. Fibre and shell is being used as fuel for the boiler, as substitute for energy and as a measure to reduce the use of diesel at the POM. The plan has been implemented but the changes have not been very significant.

Also at the estates, the use of chemicals is only done when necessary and when there is no other option available.

Complied

5.6.3 A monitoring system shall be in place, with regular reporting on progress for these significant pollutants and emissions from estate and mill operations, using appropriate tools. Minor Compliance

Monitoring and reporting of the significant pollutants to water, gaseous emissions to air and contamination on land are in place.

Tools and systems used include the DOE online CEMS monitoring for air emissions, boiler stack monitoring done once every 3 months (latest report dated 15 Mac 2018). The schedule waste disposal (latest dated 08 Feb 2018) were adhering to DOE requirements.

Water quality at discharge points was also monitored as per Department of Irrigation and Drainage (DID) regulations. Raw/waste water was analysed quarterly while the treated water being analysed twice yearly and found to comply to the requirements.

Water samples at the final discharge point were regularly taken and tested by mill environment officer in charge and analysed monthly to ensure compliance to DOE requirements at final discharge point. The water samples were sent for analysis. Records were maintained and verified on-site that the BOD met the permissible regulatory limit.

Palm GHG summary report has also been documented for

tabulated for financial year period (Oct 2016 – Sep 2017) using

RSPO PalmGHG Version 3.0.1.

Complied

Principle 6: Responsible consideration of employees, and of individuals and communities affected by growers and mill

Criterion 6.1

Aspects of plantation and mill management that have social impacts, including replanting, are identified in a participatory way, and plans to mitigate the negative impacts and promote the positive ones are made, implemented and monitored, to demonstrate continual improvement.




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6.1.1 A social impact assessment (SIA) including records of meetings shall be documented.

Major Compliance

At the PMU, social impact assessment is conducted using various methods, i.e. annual internal and external stakeholders meetings, bi-annual generic internal and external surveys as well as topic specific surveys mostly involving the internal stakeholders. Each of this activity is appropriately documented and analysed. Comments were received from the participants and actions taken to address the comments were verified to be satisfactory by the auditor. For example external stakeholder meetings were conducted in Pelam Estate on 11 Mar 2018 and in Subur Estate on 7 Feb 2018. In addition bi-annual generic surveys were conducted at Batu Lintang POM on 12 Apr 2018 involving 89 internal stakeholder, while in Pelam Estate the same activity was conducted on 11 Mar 2018 involving 21 external stakeholders. Surveys to gather opinions of stakeholders on specific issues were also conducted in Buntar Estate on 15 Apr 2018 involving 20 internal stakeholders on issues related to construction of new staff bungalows.

Complied

6.1.2 There shall be evidence that the assessment has been done with the participation of affected parties.

Major Compliance

The group has considered issues of social impact to employees and communities affected by their activities. Records of meeting with stakeholders indicated discussions held were generally on matters pertaining to access roads and use rights, working conditions, cultural/festival activities, health facilities and other community concerns as stated in 6.1.1.

In all minutes of stakeholders, women’s committee and trade union representative meetings list of attendance and photos of the session were kept in file showing evidence of participation of affected parties. Through verification of entries made in the stakeholder logbook in POM, the estate and interviews made, it was clear that the workers are well informed of issues related to their rights.

Complied

6.1.3 Plans for avoidance or mitigation of negative impacts and promotion of the positive ones, and monitoring of impacts identified, shall be developed in consultation with the affected parties, documented and timetabled, including responsibilities for implementation.

Major Compliance

For each comments received during meetings or surveys conducted by the POM and the estate, a time table of activities were developed with time frame on implementation plans and persons responsible. Comments received through the meetings, stakeholder logbook, etc., were recorded and also indicated with status either continuous, completed or pending. For example during stakeholder meeting, the stakeholders requested assistance from the estate management to clean up surrounding area of Pusat Anak Permata Negara and Clinic Malau, the estate management was verified to have arranged its general workers to provide assistance during the clean-up programme.

Complied

6.1.4 The plans shall be reviewed as a minimum once every two years and updated as necessary, in those cases where the review has concluded that changes should be made to current practices.

There shall be evidence that the review includes the participation of affected parties.

Minor Compliance

The plans are reviewed annually together with affected parties, especially the workers, who were consulted during the internal stakeholder and trade union representative meetings.

However, in Subur Estate 38% of respondents participating in a survey conducted by Subur Estate management on 06 Feb 2018 stated that they are not satisfied with the facilities provided at the linesite. However, it was found further investigations were not conducted to determine which facilities that they are not satisfied with and for what reasons.

Minor NC#

JMD-01

6.1.5 Particular attention shall be paid to the impacts of smallholder schemes (where the plantation includes such a scheme).

Minor Compliance

There are no smallholder schemes at the PMU. Thus this is not applicable.

Not applicable

Criterion 6.2

There are open and transparent methods for communication and consultation between growers and/or millers, local communities and other affected or interested parties.



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6.2.1 Consultation and communication procedures shall be documented.

Major Compliance

KLK Grievance Procedure is available via website links provided below;

1. https://www.klk.com.my/corporate-sustainability/wp-content/uploads/2017/12/GrievanceProcedure.pdf

2. https://www.klk.com.my/corporate-sustainability/market-place/sustainability-policy/#grievance

3. https://www.klk.com.my/corporate-sustainability/e-grievance-form/

The PMU has adopted an open and transparent method of communication and consultation when dealing with relevant parties, e.g. its workers, government agencies, contractors, neighbouring plantations by personal invitation to attend the internal and external stakeholders’ meetings as well as surveys on general and specific issues.

Complied

6.2.2 A management official responsible for these issues shall be nominated.

Minor Compliance

Records sighted show evidence of appointed teams headed by the Managers and assisted by Assistant Managers. e.g. Mr. Vikhraman Muniandy at Batu Lintang POM, Mr. Fadzil Shah, at Pelam Estate and Mr. Hoi Kang Kyan at Buntar Estate.

Complied

6.2.3 A list of stakeholders, records of all communication, including confirmation of receipt and that effort are made to ensure understanding by affected parties, and records of actions taken in response to input from stakeholders, shall be maintained.

Minor Compliance

The list of stakeholders, communication and actions taken were maintained in file. Consultations with various stakeholders held and meeting minutes have been verified to be satisfactory during the audit.

Complied

Criterion 6.3

There is a mutually agreed and documented system for dealing with complaints and grievances, which is implemented and accepted by all affected parties.


6.3.1 The system, open to all affected parties, shall resolve disputes in an effective, timely and appropriate manner, ensuring anonymity of complainants and whistleblowers, where requested.

Major Compliance

Both the POM and estate have established complaints and grievances procedures and they were all well implemented. Stakeholder logbooks were sighted in all audited estates and actively used by workers.

Timelines for response to complaints and grievances are indicated in the logbook. Generally respond time for minor requests will be within 2-3 days.

Stakeholder Logbooks are for complaints which are not private and confidential in nature. For reports which are related to private matters such as sexual harassment reports separate logbooks are prepared. Complainants are given the option whether the make the report personally or through nominated workers’ representatives.

It is verified during on-site interviews that there were no incidents of dispute or grievance of a serious nature.

Complied

6.3.2 Documentation of both the process by which a dispute was resolved and the outcome shall be available.

Major Compliance

The PMU have a system for handling compensation claim in an effective, timely and appropriate manner. So far there has not been any dispute raised which was verified during on-site interviews with the workers.

Complied

Criterion 6.4



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Any negotiations concerning compensation for loss of legal, customary or user rights are dealt with through a documented system that enables indigenous peoples, local communities and other stakeholders to express their views through their own representative institutions.


6.4.1 A procedure for identifying legal, customary or user rights, and a procedure for identifying people entitled to compensation, shall be in place.

Major Compliance

There are borders of the estates audited adjacent to villages in the area. E.g. Buntar Estate is located very close to Lubok Buntar small township and Batu Lintang Estate is neighbouring to a Sungai Salleh small township. However, from the minutes of meeting between external stakeholders and the estate managements as well as interviews conducted by the auditors throughout the audit period, it was concluded that there were no issues related to legal, customary or user rights over the land developed by the estate.

Complied

6.4.2 A procedure for calculating and distributing fair compensation (monetary or otherwise) shall be established and implemented, monitored and evaluated in a participatory way, and corrective actions taken as a result of this evaluation. This procedure shall take into account: gender differences in the power to claim rights, ownership and access to land; differences of transmigrants and long-established communities; and differences in ethnic groups’ proof of legal versus communal ownership of land.

Minor Compliance

The KLK Group has a procedure for calculating and distributing compensation which is available for verification. The procedure is written in Land acquisition (for OP planting) SOP 3A issue/rev 1/0 dated 01/01/2017. It outlines the procedure for identifying legal, customary or user rights. The procedures stated that the compensation shall take into account issues such as proof of legal versus communal ownership in ethnic group, communities’ period of residing and origins and gender difference in the ability to claim rights.

To date, there has been no dispute by any parties reported at the PMU.

Complied

6.4.3 The process and outcome of any negotiated agreements and compensation claims shall be documented, with evidence of the participation of affected parties, and made publicly available.

Major Compliance

To date, there has been no dispute by any parties reported. Therefore the process and outcome of compensation could not be observed.

Complied

Criterion 6.5

Pay and conditions for employees and for contract workers always meet at least legal or industry minimum standards and are sufficient to provide decent living wages.


6.5.1 Documentation of pay and conditions shall be available.

Major Compliance

Offer letters and work contracts for local staff and foreign workers were verified. The contracts met the industry minimum standards, including extra pays under the statutory fringe benefits.

The pay slips for workers at the estates and mill were verified to contain all necessary information and can easily be understood by the workers, e.g. type and rate of works completed, days offered, days worked, days absent, total deduction, etc.

Review of field workers’ pay slips showed that the calculation of pay is clearly itemised, for example, normal working day rate, normal working day overtime rate, rest day work, rest day work overtime, public holiday work, public holiday work overtime, annual leave pay in December, sick leave pay and deductions.

Complied

6.5.2 Labour laws, union agreements or direct contracts of employment detailing payments and conditions of employment (e.g. working hours, deductions, overtime, sickness, holiday entitlement, maternity leave,

All employment contracts are in languages understood by the workers, e.g. in Bahasa Indonesia for Indonesian workers, in Bengali language for Bangladesh workers and in Tamil language for Indian workers. Through interviews it was verified that the contracts were clearly understood by the foreign workers when they were able to give correct responds on daily minimum rate,



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reasons for dismissal, period of notice, etc.) shall be available in the languages understood by the workers or explained carefully to them by a management official.

Major Compliance

medical entitlement, public holiday entitlement and pay for work during public holiday, etc. Local workers are covered by NUPW-MAPA agreement which is written in English.

During the audit, workers found to have received below minimum wages are those worked less than offered working days by the POM or the estate mainly due to absenteeism, but there also cases such as long unpaid holidays. All workers at the POM and at the estate, except harvesters, carriers and loaders, are paid based on daily rate.

Observation raised:

“External Contractor Agreement Checklist” did not include valid driving license, road tax of the vehicles used, Good Driving License [GDL], etc. documents to be submitted to the management as part of contractor legal compliance monitoring.

OBS#

JMD-01

6.5.3 Growers and millers shall provide adequate housing, water supplies, medical, educational and welfare amenities to national standards or above, where no such public facilities are available or accessible.

Minor Compliance

The PMU has provided adequate housing, water supplies, medical, educational and welfare amenities in accordance with Local - Workers’ Minimum Standard of Housing and Amenities Act 1990 to the workers.

Housing, electricity and water supply

The workers are staying in the housing quarters provided by the PMU. No rental charges by the PMU. Maintenance of the houses is the responsibility of the PMU as well. Electricity and water are supplied 24-hours. The housing quarters are inspected by the Medical Assistant once a week. Fogging for anti-malaria purposes are conducted periodically.

Schools

A primary government schools are located within reach of the POM and estates audited. However, number of students from the POM and estates audited are very low as families of the workers and staff are staying outside.

Sundry shops

Sundry shops are available within the vicinity of the POM and the estates audited located at the neighbouring small townships. Interviews with the workers confirmed that the sundry shops are complete with most household sundries as they are also frequented by the local people. Neighbouring townships to the POM and the estates includes Malau township near to Pelam Estate, Lubok Buntar township near to Buntar Estate, Sungai Salleh township near the POM.

Medical clinics

At the POM and estates audited, the clinics available are with minimal services. This is mainly due to availability of government managed clinics at the neighbouring townships. Any major treatment will immediately be sent to the clinics. Medical fees at the government clinics as well as the transport to the clinics are covered by the managements. In any case, the management still provide HAs at the estate clinics to treat minor illnesses, maintain medical records and assisting in maintenance of the sanitary level at the workers linesite. Visiting Medical Officer [VMO] was verified to have visited the clinics and the linesites at least once in a month if not more frequent.

However, in Batu Lintang POM and all estates audited evidence was not provided by managements that foreign workers are able to request amendment on the name of their next-of-kin in the Foreign Workers Compensation Scheme.

Minor NC#

JMD-02



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Futhermore, in Subur Estate and Pelam Estate unused water tanks without proper storage were seen which potentially will be breeding grounds for mosquitoes.

6.5.4 Growers and millers shall make demonstrable efforts to monitor and improve workers’ access to adequate, sufficient and affordable food.

Minor Compliance

The PMU has ensured that the workers have access to adequate, sufficient and affordable food by providing the workers with local sundry shops within their compounds.

The POM and estates audited as mentioned above are located near townships such as Sungai Salleh, Lubok Buntar and Malau.

Complied

Criterion 6.6

The employer respects the rights of all personnel to form and join trade unions of their choice and to bargain collectively. Where the right to freedom of association and collective bargaining are restricted under law, the employer facilitates parallel means of independent and free association and bargaining for all such personnel.


6.6.1 A published statement in local languages recognising freedom of association shall be available.

Major Compliance

The published statements of policy which recognises employee’s freedom of association is established in “KLK Sustainability Policy” dated 01/12/2014. It was noted that the policy is available and widely displayed to the public. Under clause 3.2 (v) of the policy it indicates Freedom of Association and Right to Collective Bargaining where workers are allowed to join collective association.

Complied

6.6.2 Minutes of meetings with main trade unions or workers representatives shall be documented.

Minor Compliance

The PMU allowed the workers to join trade unions and this evidence through deduction of their wages directly to pay National Union for Plantation Workers [NUPW] and periodic meetings of NUPW representatives with the PMU management. For example latest trade union representative meeting with the management at the POM was on 21 Mar 2017 with 8 attendees, in Pelam Estate on 14 May 2018 with 11 attendees

NUPW representatives, who received formal invitation to attend NUPW State Committee meeting during working days will be paid at daily rate.

Complied

Criterion 6.7

Children are not employed or exploited.


6.7.1 There shall be documentary evidence that minimum age requirements are met.

Major Compliance

The published statements of policy which recognises no child labour is established in “KLK Sustainability Policy” dated 01/12/2014. Under clause 3.2 (ii) of the policy it indicates that the group and its suppliers/contractors shall not knowingly employ or support the use of child labour. During the audit there was no evidence of any child labor being used at the PMU.

Inspection of the employment records including site visit to the estates and interviews confirmed that this criterion has been complied with.

Complied

Criterion 6.8

Any form of discrimination based on race, caste, national origin, religion, disability, gender, sexual orientation, union membership, political affiliation, or age, is prohibited.


6.8.1 A publicly available equal opportunities policy including identification of relevant/affected groups in the local environment shall be documented.

Major Compliance

The published statements of policy which recognises equal opportunities is established in “KLK Sustainability Policy” dated 01/12/2014. Under clause 3.2 (ix) of the policy it indicates that the group and its suppliers/contractors shall ensure equal opportunities in the work place. All decisions shall be made based on business needs, job requirements and individual qualifications

Complied



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and without regard to race, religion or gender.

Inspections including interviews in the estate, checking of the employment records including foreign workers, pay slips and deductions of wages (according to law) confirmed that this criterion had been maintained.

6.8.2 Evidence shall be provided that employees and groups including local communities, women, and migrant workers have not been discriminated against.

Major Compliance

Based on interviews and feedback from the employees, foreign workers, review of NUPW meeting minutes and Stakeholder Logbooks, it is verified that there has been no issue of discrimination at the PMU.

Complied

6.8.3 It shall be demonstrated that recruitment selection, hiring and promotion are based on skills, capabilities, qualities, and medical fitness necessary for the jobs available.

Minor Compliance

The PMU demonstrated that staff are hired and promoted based on specific criteria. However, promotion to higher position sometime take a longer period mainly due to the position sought is not yet vacant.

For foreign workers, hiring is mainly conducted through employment agents and handled by the KLK head office in Ipoh. It was verified that there is no discrimination on promotion as both male and female, local and foreign workers have equal opportunity to be promoted.

Complied

Criterion 6.9

There is no harassment or abuse in the work place, and reproductive rights are protected.


6.9.1 A policy to prevent sexual and all other forms of harassment and violence shall be implemented and communicated to all levels of the workforce.

Major Compliance

The published statements of policy which recognises no tolerance on sexual harassment and violence is established in “KLK Sustainability Policy” dated 01/12/2014 under clause 3.2 (xi).

There are women committees in both the POM and estate specifically to address areas of concerns to women. These committees headed by the managers and members are representatives from all areas of work. The minutes of meetings were documented and kept. For examples, at the POM, latest women’s committee meeting was conducted on 28 May 2018, in Buntar Estate, the meeting was conducted on 16 Dec 2017.

The policy statements on prevention of sexual harassment, protection of gender and women reproductive rights were widely available and displayed in local languages and English.

Complied

6.9.2 A policy to protect the reproductive rights of all, especially of women, shall be implemented and communicated to all levels of the workforce.

Major Compliance

The management of the estates audited and the POM are aware that pregnant and breastfeeding women must be exempted from work associated with potentially hazardous chemicals. However, since there were no child bearing women workers within the group, thus this policy cannot be verified during the audit.

Complied

6.9.3 A specific grievance mechanism which respects anonymity and protects complainants where requested shall be established, implemented, and communicated to all levels of the workforce.

Minor Compliance

The grievance process flowchart and procedures are displayed in the estates and POM offices. The grievance mechanism established at the PMU has been maintained. There are gender committees specifically to address areas of concerns to women. These committees headed by the managers and members are representatives from all areas of work. The minutes of meetings were documented and kept.

Complied

Criterion 6.10

Growers and millers deal fairly and transparently with smallholders and other local businesses.




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6.10.1 Current and past prices paid for Fresh Fruit Bunches (FFB) shall be publicly available.

Minor Compliance

FFB prices are publicly displayed at the POM based on current prices as determined by MPOB. These prices are available publicly access at MPOB website.

Complied

6.10.2 Evidence shall be available that growers/millers have explained FFB pricing, and pricing mechanisms for FFB and inputs/services shall be documented (where these are under the control of the mill or plantation).

Major Compliance

Price mechanism is generally understood by the industry players as the POM is using FFB prices set by the MPOB.

Complied

6.10.3 Evidence shall be available that all parties understand the contractual agreements they enter into, and that contracts are fair, legal and transparent.

Minor Compliance

Based on employee contracts and meeting minutes (between the PMU managements and employees) it is evidenced that all parties understand the contractual agreements they enter into, and that contracts are fair, legal and transparent.

Interviews with parties concerned confirmed that business practices with local businesses are conducted in a fair and transparent manner. Work tenders are open to appropriate parties and reviewed by Tender Committee before approval. The contractors are monitored during work in progress to follow safety requirements.

Complied

6.10.4 Agreed payments shall be made in a timely manner.

Minor Compliance

The PMU has a policy to ensure agreed payments were made in a timely manner as per the contracts of agreement made. Payments are made on time according to common practice of 60-day grace period.

Complied

Criterion 6.11

Growers and millers contribute to local sustainable development where appropriate.


6.11.1 Contributions to local development that are based on the results of consultation with local communities shall be demonstrated.

Minor Compliance

Main contribution of the estates to the local development can be demonstrated in the provision of facilities, services and where feasible, monetary. For examples, in 2017 villagers neighbouring with Pelam Estate, i.e. Kg. Banggol Berangan, requested assistance from the estate management to desilt drains along the village area and contribution for surau repair works. Estate management agreed to conduct an annual drains desilting programme for the village and donated RM500 for the surau repair work. At the same estate, Pusat Anak Permata Negara and Klinik Malau requested assistance from the management to clean up the area and the management arranged general workers to assist with the clean up programme. In Buntar Estate, the headmaster of SK Sungai Salleh requested for donation to conduct sports day at the school and the management agreed with the request.

Complied

6.11.2 Where there are scheme smallholders, there shall be evidence that efforts and/or resources have been allocated to improve smallholder productivity

Minor Compliance

Not applicable. No scheme smallholders are associated with KLK Batu Lintang PMU.

Complied

Criterion 6.12

No forms of forced or trafficked labour are used.


6.12.1 There shall be evidence that no forms of forced or trafficked labour are used.

Estate workers are sourced by the KLK appointed agents and handled via KLK Head Office in Ipoh.

Complied



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Major Compliance All procedures of bringing in foreign workers are with the approval from the Immigration Office. Based on records verified and interviews with some of the workers, it is confirmed that there has been no occurrence of forced nor trafficked workers in KLK estates or POMs.

The PMU had returned the passports to the foreign workers. The workers were reminded that they are responsible if any untoward incidents happened with the passports in their custody. The management on the other hand is still responsible in assisting the workers to monitor the passport and work permit expiry dates, sending them for FOMEMA test until collecting work permit from the Immigration.

6.12.2 Where applicable, it shall be demonstrated that no contract substitution has occurred.

Minor Compliance

No issue of contract substitution has been found and this was confirmed through interviews mainly with internal stakeholders.

Complied

6.12.3 Where temporary or migrant workers are employed, a special labour policy and procedures shall be established and implemented.

Major Compliance

The policy statement established in “KLK Sustainability Policy” dated 01/12/2014 under clause 3.2 covers both local and foreign workers as its states that “KLK is committed to ensuring that the rights of all employees, including contract, temporary and migrant workers…”.

Implementation of this policy is evident as explained above, for example, all decisions related to hiring of new workers shall be made based on business needs, job requirements and individual qualifications and without regard to race, religion or gender. Also mentioned above that the equal opportunity policy was adopted and implemented by the PMU and verified to have covered all necessary aspects of including migrant workers related issues. Freedom of association as earlier mentioned permitted not only to the local workers but also to the foreign workers.

This policy is communicated to all workers during annual refresher training and to all new intakes.

Complied

Criterion 6.13

Growers and millers respect human rights.


6.13.1 A policy to respect human rights shall be documented and communicated to all levels of the workforce and operations (see Criteria 1.2 and 2.1).

Major Compliance

The published statements of policy which recognises human right is established in “KLK Sustainability Policy” dated 01/12/2014. Under clause 3.1 of the policy it indicates that the group recognises the inherent dignity of the individual and supports the Universal Declaration of Human Rights by the United Nations. This policy is communicated to all workers during annual refresher training and to all new intakes. Communication of this policy to external stakeholders is conducted during the external stakeholders meeting.

Complied

Principle 7: Responsible development of new plantings

Todate the PMU has not carried any new plantings after Nov 2005 which may be applicable under requirements of the RSPO New Planting Procedure. The requirements of Principle 7 were verified to be ‘Not applicable’ to this PMU during this assessment. It was verified during current on-site assessment that the PMU has declared and submitted its Land Use Change details for analysis for its plantings since Nov 2005 as per the calculations specified in the RSPO PalmGHG Version 3.0.1. The record of submission made to the RSPO Secretariat for the current year was done on 10 Mar 2018. See Summary of Net GHG Emissions submitted by the POM in the Tables below.



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Based on the details provided in the record of submission, it is also verified that there is no potential liability under the RSPO Remediation and Compensation Procedure at this PMU.

SUMMARY OF NET GHG EMISSIONS All information and data below as submitted by the POM was verified against the retrieved summary report generated through PalmGHG Calculator Version 3.0.1.

GHG Table 1: Summary of Net GHG Emissions (Oct 2016 - Sep 2017)

Emissions per Product tCO2e/t Product

CPO 0.93

PK 0.93

Production t/yr

FFB processed 142186.09

CPO Produced 29964.00

Extraction %

OER 21.07

KER 4.63

GHG Table 2: Summary of Net GHG Emissions

Land use ha

OP planted area 7793.8

OP planted on peat 0

Conservation (forested) 0

Conservation (non-forested) 161

Total

GHG Table 3: Summary of Field Emissions and Sinks

Own Crop Group 3rd Party Total

tCO2e tCO2e/ha tCO2e tCO2e tCO2e tCO2e tCO2e tCO2e/ha

Emissions

Land Conversion 56812.02 9.41 0 0 0 0 0 0

*CO2 Emissions from Fertiliser

6688.54 1.13 0 0 0 0 0 0

**N2O Emissions 4849.64 0.79 0 0 0 0 0 0

Fuel Consumption 646 0.1 0 0 0 0 0 0

Peat Oxidation 0 0 0 0 0 0 0 0

Sinks 0 0 0 0 0 0

Crop -54456.69 -9.12 0 0 0 0 0 0



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Sequestration

Conservation Sequestration

0 0 0 0 0 0 0 0

Total 14539.21 2.32 0 0 0 0 0 0

GHG Table 4a: Summary of Mill Emissions and Credits

tCO2e tCo2e/tFFB

Emissions

POME 17678.64 0.12

Fuel Consumption 95.94 0

Grid Electricity Utilisation

336.69 0

Credits

Export of Grid Electricity

0 0

Sales of PKS 0 0

Sales of EFB 0 0

Total 18111.27 0.13

GHG Table 4b: Palm Oil Mill Effluent (POME) Treatment

Divert to compost 0

Divert to anaerobic digestion 100

GHG Table 4c: POME Diverted to Anaerobic Digestion

Divert to anaerobic pond 100

Divert to methane capture (flaring) 0

Divert to methane capture (electricity generation) 0



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Principle 8: Commitment to continual improvement in key areas of activity

Criteria 8.1 Growers and millers regularly monitor and review their activities, and develop and implement action plans that allow demonstrable continual improvement in key operations.


8.1.1 The action plan for continual improvement shall be implemented, based on a consideration of the main social and environmental impacts and opportunities of the grower/mill, and shall include a range of Indicators covered by these Principles and Criteria.

As a minimum, these shall include, but are not necessarily be limited to: • Reduction in use of pesticides(Criterion 4.6); • Environmental impacts (Criteria 4.3, 5.1 and 5.2); • Waste reduction (Criterion 5.3); • Pollution and greenhouse gas (GHG) emissions (Criteria 5.6 and 7.8); • Social impacts (Criterion 6.1); • Encourage optimising the yield of the supply base. Major Compliance

The POM has identified and implemented the following Continual Improvement Action Plans for the FY Oct 2017 – Sep 2018:

1. Environmental:

Desilting pond using belt press.

Final discharge to comply with specification.

Waste reduction – briefing on recycling programme.

Scheduled waste disposal – briefing on wastes.

2. Social:

Workers’ quarter – “gotong royong” activity in line-site.

Women’s Committee – annual meeting / activities.

Repaint temple at POM.

The estates have identified and implemented the following Continual Improvement Action Plans for the FY Oct 2017 – Sep 2018:

1. Environmental - Chemical usage reduction:

Planting of beneficial plant.

Spraying pump calibration and training.

2. GHG Reduction:

Maximize tractor productivity and reduce fuel usage.

Briefing on energy savings.

3. FFB Yield optimization:

Loose fruit collection.

EFB mulching

4. Safety and Health:

Monitoring of non-compliance to OSH.

Continuously conduct training to avoid accidents.

Contributions to local communities.

5. Social:

Continuously upgrade workers’ quarters.

Install individual meters to prevent wastage.

Contributions to local communities.

Evidence of results was available for the above continuous improvement action plans.

Complied



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3.1.1 Supply Chain Certification Standards Findings - on CPO Mill The Supply Chain module applied at Batu Lintang Grouping POM during this assessment is Module D – CPO Mills: Identity Preserved (IP). Details of findings are as follows:

5. General chain of custody requirements for the supply chain

Findings and Objective Evidence

Compliance

5.1 Applicability of the general chain of custody requirements for the supply chain 5.1.1 Legal ownership and physical handling of RSPO Certified Sustainable oil palm products at a location under the control of the organization including outsourced contractors.

Yes Complied

5.1.2 Trader and/or distributor shall pass on the certification number of the product manufacturer and the applicable supply chain model.

Not applicable Complied

5.1.3 Member of the RSPO and shall register on the RSPO IT platform. Yes Complied 5.1.4 Processing aids do not need to be included within an organization’s scope of certification.

No processing aids Complied

5.2 Supply chain model 5.2.1 Same supply chain model as its supplier Identity Preserved (IP) Complied 5.2.2 Combination of supply chain models Only IP Complied 5.3 Documented procedures 5.3.1 Written procedures and/or work instructions Yes Complied 5.3.2 Internal audit procedure and internal audit conducted to determine compliance. Yes Complied 5.4 Purchasing and goods in 5.4.1 Purchases of RSPO certified oil palm products with all the specified information. Yes Complied 5.4.2 Mechanism for handling non-conforming oil palm products and/or documents. Yes Complied 5.5 Outsourcing activities 5.5.1 Outsourcing of activities Not applicable Complied 5.5.2 Outsourcing within the scope of its RSPO SC certificate Not applicable Complied 5.5.3 Names and contact details of all contractors used for the processing or physical handling of RSPO certified oil palm products.


5.5.4 Names and contact details of new contractor used for the processing or physical handling of RSPO certified oil palm products.


5.6 Sales and goods out 5.6.1 Sales of RSPO certified oil palm products with all the specified information. Yes Complied 5.7 Registration of transactions 5.7.1 Transaction registered in the RSPO IT platform and confirmed upon receipt. Yes Complied 5.7.2 RSPO IT Platform: Shipping Announcement, Traceability, Confirming Shipping Announcements.

Yes Complied

5.8 Training 5.8.1 Training plan on RSPO SC Standards requirements and records of the training. Yes Complied 5.8.2 Appropriate training shall be provided Yes Complied 5.9 Record keeping 5.9.1 Accurate, complete, up-to-date and accessible records and reports maintained. Yes Complied 5.9.2 Retention times for all record and reports. Yes Complied 5.9.3 Volume purchased (input) and claimed (output) over a period of twelve (12) months.

Yes Complied

5.10 Conversion factors 5.10.1 Conversion rate shall be applied to provide a reliable estimate for the amount of certified output available from the associated inputs.

Yes Complied

5.10.2 Conversion rates shall be periodically updated. Yes Complied 5.11 Claims 5.11.1 Claims shall be in compliance with the RSPO Rules on Market Communications and Claims.

Yes Complied

5.12 Complaints 5.12.1. Documented procedures for collecting and resolving stakeholder complaints. Yes Complied 5.13 Management review 5.13.1 Appropriate frequency of management review. Yes Complied



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5.13.2 All the specified inputs for the management review. Yes Complied 5.13.3 All the specified outputs from the management review. Yes Complied

Model D – CPO Mills: Identity Preserved (IP)

D.1 Definition


D.1.1

A mill is deemed to be Identity Preserved (IP) if the FFB used by the mill are sourced from its own supply base certified to the RSPO Principles and Criteria (RSPO P&C). Certification for CPO mills is necessary to verify the volumes and sources of certified FFB entering the mill, the implementation of any processing controls (for example, if physical separation is used), and volume sales of RSPO certified products. A mill may be taking delivery of FFB from uncertified growers, in addition to those from its own certified land base. If a mill processes certified and uncertified FFB without physically separating the material then only Module E is applicable.

The POM only processed certified FFB from its own supply base (see Section 1.3). It was verified that there was no sources of FFB from any outgrowers or independent suppliers / smallholders except for the RSPO certified FFB (IP Model) from the Selama Estate of Genting Plantations and FFB diverted from other certified KLK Groupings estates. The CPO Mill is therefore applying the Identity Preserved (IP) model.

Complied

D.2 Explanation


D.2.1

The estimated tonnage of CPO and PK products that could potentially be produced by the certified mill must be recorded by the certification body (CB) in the public summary of the P&C certification report. This figure represents the total volume of certified palm oil product (CPO and PK) that the certified mill is allowed to deliver in a year. The actual tonnage produced shall then be recorded in each subsequent annual surveillance report.

The estimated tonnage of CPO and PK products that could potentially be produced by the POM is recorded in this Assessment Report.

This figure represents the total volume of certified palm oil product (CPO and PK) that the certified mill is allowed to deliver in a year.

The actual tonnage produced has been recorded in each annual assessment report (see Section 1.8.2 Table 6 and Section 1.8.3 Table 7).

Complied

D.2.2

The mill must also meet all registration and reporting requirements for the appropriate supply chain through the RSPO supply chain managing organization (RSPO IT platform or book and claim).

The POM meets all registration and reporting requirements for the appropriate supply chain through the RSPO Supply Chain managing organization (RSPO IT platform).

Complied

D.3 Documented procedures

D.3.1

The site shall have written procedures and/or work instructions to ensure the implementation of all the elements specified in these requirements. This shall include at minimum the following:

A documented Supply Chain Procedure SOP 18.0 Issue 3 / Rev. 2 dated 05/05/2018 has been established and implemented. The procedure covered the implementation of all elements of IP Model that include Organization Chart, Management Functions & Job Descriptions, FFB Delivery to mill, CPO/PK Delivery to customer, Record Keeping, Training, Claims.

Complied

a) Complete and up to date procedures covering the

The documented procedure and its implementation confirmed to have complied with all the specified requirements of Identity Preserved (IP) Module D that include controlling the FFB

Complied



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implementation of all the elements in these requirements

receipt, processing, sales, CPO and PK dispatch, and records keeping.

b) The role of the person having overall responsibility for and authority over the implementation of these requirements and compliance with all applicable requirements. This person shall be able to demonstrate awareness of the site’s procedures for the implementation of this standard.

The POM Mill Manager, Mr. Yeo Boon Keat has been appointed as the person in charge for the overall responsibility and authority for implementation and compliance with the documented procedure. He is assisted by the Assistant Mill Manager, Mr. Vikhraman Muniandy. They and other relevant staff under his charge demonstrated competence, skill and knowledge of the RSPO Supply Chain Certification Standard requirements and its implementation. Interviews of the relevant staff confirmed their knowledge of the RSPO Supply Chain Certification requirements for the respective areas of operations. The Palm Oil Mill Organization Chart and job responsibilities of employees (Mill Manager, Assistant Mill Manager, Mill Engineers, Mill Assistant Engineers, Operations Supervisor, Weighbridge Operator, Laboratory Chemist, FFB Grader and clerks) have been suitably defined in the SOP.

Complied

D.3.2

The facility shall have documented procedures for receiving and processing certified and non-certified FFBs.

The SOP covers the receiving of FFB and verification of documents (delivery notes) to determine the origin, quantity and quality of the FFB. All supplies of FFB were subjected to verification of documents and quality checks by weighbridge personnel. The Weighbridge Ticket for FFB indicated the date, vehicle number, estate & field number and weight.

For the year 2017, the POM only received and processed certified FFB from the KLK Batu Lintang Grouping estates, FFB diverted from other certified KLK Groupings estates and the RSPO certified FFB (IP Model) from Selama Estate of Genting Plantations. The POM did not receive any non-certified FFB from other sources or suppliers.

Complied

D.4 Purchasing and goods in


D.4.1

The facility shall verify and document the tonnages and sources of certified and non-certified FFBs received.

The Mill had maintained record of tonnages and supply source of certified FFB from the respective estates at the weighbridge station, in the dispatch chit and weighbridge ticket and these entered into the computer system. There were no non-certified FFBs.

Complied

D.4.2

The facility shall inform the CB immediately if there is a projected overproduction of certified tonnage.

The documented Supply Chain SOP has specified that the responsible POM personnel shall check production quantity against the certified amount and notify RSPO, the CB and Sustainability Department of any projected overproduction of certified tonnage. So far, there is no projected overproduction.

Complied

D.5 Record keeping


D.5.1

The site shall record and balance all receipts of RSPO certified FFB and deliveries of RSPO certified CPO and PK on a three-monthly basis.

The records and reports are available from the computerized system. Also, hard copies of records and reports are properly filed and readily accessible. Inspection of records and reports at the Mill confirmed these were accurate, complete and updated daily. As per the SOP, the records and reports are archived and stored in the Mill Office for a minimum period of 5 years.

Traceability was verified for the Production Report for Jan – Dec 2017 from the related records (FFB Delivery Note, Weighbridge Ticket, FFB & Truck Daily Summary, Production Report, CPO & PK Storage Report, and CPO & PK Delivery Orders).

Complied



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Transaction documents and bookkeeping of CPO and PK are done daily and monthly summary report of FFB receipt, FFB processed, CPO production, PK production and balance stocks submitted to the Head Office. The weighbridges at the Mill are duly calibrated and calibration certificates found to be in order.

CPO is delivered to KL-Kepong Oleomas Sdn Bhd at Pulau Indah, Palm Oleomas (Rawang) Sdn Bhd at Rawang, Palm Oleomas (Klang) Sdn Bhd at Klang and external buyers.

There is no Palm Kernel mill for production of PKO at the POM. PK sold and delivered to external buyers.

Deduction and conversion ratios for the volumes of CPO and PK delivered from the Palm Oil Mill have been appropriately done and recorded.

A tonnage balance recording system that shows FFB deliveries, CPO and PK production and dispatch is balanced every 3 months.

D.6 Processing


D.6.1

The site shall assure and verify through documented procedures and record keeping that the RSPO certified oil palm product is kept segregated from non-certified material including during transport and storage.

Confirmed from records that Batu Lintang POM only received and processed certified FFB for the last 12 months till audit time. The processing facility has established and implemented a clear procedure and mechanism for the IP module. Review and on-site verification confirmed that the mechanism was implemented and in compliance with the module requirements at the mill including transport and storage.

Complied

D 6.2 The objective is for 100 % segregated material to be reached.

Documents and records provided documented evidence for the FFB receipt and processed, CPO and PK produced to be traceable to certified material. The product type and supply chain module indicated as CSPO/IP and CSPK/IP on relevant documents was verified to be correctly stated.

Complied

3.1.2 Status on Supply Chain on POM: Based on the documents and records presented during the on-site verifications made, it is concluded that the Batu Lintang POM has been able to comply with the requirements of the RSPO SCCS under the ‘IP’ module and is thus eligible for ‘IP’ trading for its palm products for year 2017 and 2018.

3.1.3 Monitoring of Certified Products traded:

Trading of the CSPO and CSPK was performed via RSPO PalmTrace by the KLK Group HQ. Based on the records maintained at the POM, the traded volumes relied on internal communications of the trading done by the KLK Group HQ, on the CSPO and CSPK delivered as verified during assessment for Jan – Dec 2017 are as follows:

Details as per RSPO Certification System Document

CPO (MT) PK (MT)

Last year's (Projected) – Certified volume (RSPO Certified)

30,258.67 6,773.08

(1) Last year's Actual sold volume (RSPO Certified)

26,939.89 5,932.75

(2) Last year's Actual sold volume *(Other Schemes Certified)

3,008.89 0

(3) Last Year's Actual sold volume **Conventional

0 0



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Total for Last Year’s volume – Actual (1+2+3) 29,948.78 5,932.75

New (Projected) Certified Volume (RSPO Certified)

37,897 8,096

Notes:

* The non PalmTrace volumes under ‘Other Schemes certified’ is basically ISCC. ** Remaining volumes traded are not claimed under ‘Certified’ and traded as ‘Conventional’ volume.

3.2 Status of Identified Noncompliance and Corrective Actions, Observations and Positive Elements.

The status of the Noncompliances (NCR) and Observations (OBS) identified against the MYNI Compliance Indicators is as per the details below:

Assessment Type Year Noncompliance (NCR)

Observations (OBS)

Follow up status

Surveillance Assessment - 04 (by Control Union Certifications)

2017 4 (1 Major, 3 Minor) 2 Corrective action verified to be taken and is effective.

Re-Certification Assessment (Transfer to Intertek)

2018 5 (1 Major, 4 Minor) 4 Next assessment

3.2.1 Year 2017 Surveillance Assessment - 04: 1 Major NC

NC raised under Criterion 4.1 by previous CB: “CHRA report dated on 23/05/2016 conducted by OSH Safety

Consultancy (M) Sdn. Bhd. The mill’s processes that significant for chemical hazard identified accordingly. However, seen the assessment conducted does not cover the chemical store that may has potential risks to an employee as a result of exposure to chemicals hazardous to health and to identify the hazards posed by each chemical substance used, stored, handled or transported within the place of work”.

Corrective action: The 3rd party assessor was invited on 05/08/17 through an official letter as to perform the assessment for the missed area and to re-validate the existing CHRA for adequacy.

Verification (for effectiveness): Corrective action satisfactorily addressed the non-conformance and NC closed off.

3.2.2 Year 2017 Surveillance Assessment - 04: 3 Minor NCs

(1) NC raised under Criterion 2.1 by previous CB: “During field visit at Main Division of Subur Estate,

interviewed 3 sprayers and a Mandore (all are Malaysian). They were found with sufficient knowledge of GAP and safety at worksite. However, when cross checked of the sprayers medical surveillance report, it was found the sampled sprayers were not sent for medical surveillance for year 2017 as per the schedule. This was also not captured and track in the annual legal compliance monitoring by the estate management”.

Verification (for corrective action and effectiveness): Corrective action satisfactorily addressed the non-conformance and NC closed off.

(2) NC raised under Criterion 4.4 by previous CB: “Based on the agronomist report from AAR for 2016/17, the

estate requires to maintain water table height. During document verification, seen the estate has established water management plan. However, there is no monitoring results available against the management plan”.


(3) NC raised under Criterion 5.3 by previous CB: “Based on the site visit to tube well in Subur Estate, workshop in Batu Lintang Estate and scrap iron yard in mill, the audit team observed empty chlorine container, used grease container, and used paint container / a container with petrol at the respective sites. In Batu Lintang Estate, seen traces of fertilizer and oil spilled from the fertilizer vehicle which happened during the unloading of fertilizer from the external supplier’s vehicle”.




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3.2.3 Year 2017 Surveillance Assessment - 04: 2 Observations

(1) Observation raised under Criterion 2.1 by previous CB: “Permit for electrical deduction issued by Jabatan

Tenaga Kerja (JTK) is not available in place. Verified letter of ‘Permohonan Permit Untuk Membuat Potongan Bil Electric Dan NUPW Daripada Gaji Pekerja’ dated 22/02/2017 requested by Mr. Chan Yik Loon (Subur Estate Manager) and successfully received by Pejabat Tenaga Kerja Taiping dated 09/03/2017. The first application is granted for union deduction only as verified letter from Mr. Rahmat Ismail (Pengarah Tenaga Kerja Negeri Perak Darul Ridzuan) JTK.PK.(1) PMT(SEK.24)10802 Jld.9(14) dated 09/05/2017 and received by estate management dated 25/05/2017. Management sent the 2nd request for electrical deduction as verified letter of ‘Permohonan Permit Untuk Membuat Potongan Bil Electric Daripada Gaji Pekerja’ dated 27/06/2017 signed by Mr. Chan Yik Loon (Estate Manager).

18 workers from Subur Div.

7 workers from Sungai Pulau Div.

23 workers from Norseman Div.

has signed ‘Persetujuan Pekerja Untuk Potongan Gaji Bagi Lain-Lain Jenis Potongan Seperti (Api)’ ”.

Verification: Closed as no re-occurrence.

(2) Observation raised under Criterion 4.6 by previous CB: “During visit to Ghim Koon Division, it was told to auditor there was no spraying activities due to manpower switching to other jobs. However, when the audit team visited the “Washing Room”, the PPE attires for sprayers not effectively maintained as seen only 3 suits of apron and a piece of rubber glove available. Based on the sprayer list, there are total 4 sprayers”.

Verification: Closed as no re-occurrence.

3.2.4 Year 2018 Re-certification / Transfer CB: 1 Major NCR

NCR MYNI Indicator

Details of NCR

Major

SH-01

5.2.1 Date issued: 08/06/2018

Indicator requirement:

Information shall be collated in a High Conservation Value (HCV) assessment that includes both the planted area itself and relevant wider landscape-level considerations (such as wildlife corridors). This information will cover:

• Presence of protected areas that could be significantly affected by the grower or miller;

Nonconformance:

Location: Subur Estate, Norseman Division.

It was observed that an area has been identified as a water catchment area, as it served as a water source to the estate. Visit to site had established that this area is actually the starting point of a stream that runs across the plantation. As it was not correctly identified and assessed, action plans to manage this area has not been planned and implemented.

Root Cause and Corrective Action:

Root Cause: The management has conserved the water catchment area. However, the small stream is not conserved. Corrective Action: Management has declared the area as water catchment area and riparian zone is established (as shown in the attachment 2).

Verification (Corrective Action):

Off-site verification carried out. The estate submitted photos of demarcation of the riparian zone and the signboard erected. The evidence submitted is sufficient to close the NC. The corrective action satisfactorily addressed the non-conformance.

NC status verified by auditor: Closed by OCL Date closed: 25/07/2018



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Verification (for effectiveness): Next assessment.

3.2.5 Year 2018 Re-certification / Transfer CB: 4 Minor NCRs

NCR MYNI Indicator

Details of NCR

Minor

SH-01

5.1.3 Date issued: 08/06/2018


This plan shall incorporate a monitoring protocol, adaptive to operational changes, which shall be implemented to monitor the effectiveness of the mitigation measures. The plan shall be reviewed as a minimum every two years to reflect the results of monitoring and where there are operational changes that may have positive and negative environmental impacts.

Nonconformance:

Location: Batu Lintang Estate, Ghim Khoon Division (Division 4)

A natural stream running across the estate was without the demarcation of the riparian zone.

In addition, there is no evidence of the water quality being sampled and analysed. Water sampling point was also not indicated on the map and at site.


Root Cause: Management has earlier practiced no spraying and manuring activities along the stream. However, management didn’t aware the stream need to be demarcated as riparian zone. Corrective Action: Management will demarcate the riparian zone and conduct water quality analysis. Water sampling point map will also be updated.


Off-site verification carried out: Corrective Action Plan (CAP) shall be verified for closure and effectiveness at the next surveillance assessment.

NC status verified by auditor: CAP accepted by OCL

Date closed: Next assessment.


NCR MYNI Indicator

Details of NCR

Minor

SH-02

5.3.3 Date issued: 08/06/2018


A waste management and disposal plan to avoid or reduce pollution shall be documented and Implemented.

Nonconformance:

Location:

(a) Subur Estate, Home and Sungai Pulau Divisions

(b) Pelam Estate, Home and Nagalelai Divisions

(c) Batu Lintang Estate, Home and Ghim Khoon (Division 4) Divisions.

It was observed that unwanted fertiliser bags and other plastic waste materials, such as plastic bottles were evidently scattered around the plantation.

Location: Batu Lintang Estate, Home Division

At Batu Lintang Estate, Home Division, plastic bottles were evidently seen being



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accumulated at the water gate to the final discharge point.


Root cause: The empty fertilizer bags are used for loose fruit collection and workers supposedly hang the bags on the palm after used it. The plastic bottles were drinking water bottles thrown by the workers. Corrective Action: a) Relevant workers have been reminded to hang the empty fertilizer bags on the palms after used for loose fruits collection. b) Refreshed training on reduce, reuse and recycle involving all workers will be conducted to raise the workers’ awareness on proper waste disposal. c) Management has cleaned up the area immediately.






NCR MYNI Indicator

Details of NCR

Minor

JMD-01

6.1.4 Date issued: 08/06/2018


The plans shall be reviewed as a minimum once every two years and updated as necessary, in those cases where the review has concluded that changes should be made to current practices.

There shall be evidence that the review includes the participation of affected parties.

Nonconformance:

Location: Subur Estate

38% of respondents participating in a survey conducted by Subur Estate management on 06 Feb 2018 stated that they are not satisfied with the facilities provided at the linesite. However, it was found further investigations were not conducted to determine which facilities that they are not satisfied with and for what reasons.


Root cause: Further investigation was verbally carried out with the workers but not officially documented by the management. Corrective Action: Inspection of worker’s quarters will be conducted by management using the weekly linesite checklist.








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NCR MYNI Indicator

Details of NCR

Minor

JMD-02

6.5.3 Date issued: 08/06/2018


Growers and millers shall provide adequate housing, water supplies, medical, educational and welfare amenities to national standards or above, where no such public facilities are available or accessible.

Nonconformance:

Location: POM and All Estates

Evidence was not provided by the POM and Estate managements that foreign workers are able to request amendment on the name of their next-of-kin in the Foreign Workers Compensation Scheme. Location: Subur Estate and Pelam Estate

Unused water tanks without proper storage were seen in Subur Estate and Pelam Estate which potentially will be breeding grounds for mosquitoes.


Root cause: POM and all estates; The management is not aware the request of amendment on the name of workers’ next-of kin in the Foreign Workers Compensation Scheme need to be documented as the name has listed in the scheme. Subur estate The unused water tanks are temporarily store at that area due to the on-going process of changing of water storage tank at worker’s quarters and conversion of water system from well to tubewell. Pelam estate Management overlooked of the unused tank. Corrective Action: All the foreign workers are briefed regarding their right to request the amendment on the name of their next-of kin in the Foreign Workers Compensation Scheme. The unused water tanks have been collected and stored in a proper area.






3.2.5 Year 2018, Re-certification / Transfer CB: 4 Observations

Ref No: RSPO P&C Indicator

Location Details of Observation

Status

Opened date

Closed date

Remark, if any

OBS# OCL-01

4.5.1 Subur, Buntar and Pelam Estates

Subur, Buntar and Pelam Estates have IPM programmes and location maps for the planting of beneficial plants (Cassia cobanensis, Antigonon leptopus and Turnera subulata). However, (1) for Subur Estate and Pelam Estate, currently only Antigonon

08 Jun 2018

Follow up at next assessment



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leptopus planted and the map only

show the locations but not the planted area size. Also, there is no indication of the planned area size for the planting of Cassia cobanensis and Turnera subulata. (2) for Buntar Estate, the map only show the planted locations of beneficial plants but not clear as to the types planted and the planted area size.

OBS# SH-01

5.1.2 Batu Lintang Estate

There is no indicator at site on the water sampling point locations.

08 Jun 2018


OBS# SH-02

5.3.3 Estates Landfill Management.

At some estates, e.g. Norseman Division of Subur Estate, the date of opening and closing of landfill was not indicated.

08 Jun 2018


OBS# JMD-01

6.5.2 POM and all Estates

“External Contractor Agreement Checklist” did not include valid driving license, road tax of the vehicles used, Good Driving License [GDL], etc. documents to be submitted to the management as part of contractor legal compliance monitoring.

08 Jun 2018


3.2.6 Identified Positive Elements

1) The PMU ensured implementation of its policies concerning sustainability and environmental requirements

in its operation.

2) The PMU has contributed for social and pollution prevention programs and activities.

3) The PMU demonstrated good safety awareness and compliance by its workforce.

3.3 Summary of Feedback Raised by Stakeholders and Findings Prior to and during the Assessment, written and verbal feedback communicated from the stakeholders on the environmental and social performance of the PMU operations were sourced. All pertinent feedback issues were reviewed and followed up for verification and these had been accordingly incorporated into the report findings. See table below: 3.3.1 Feedback Raised by Stakeholders (Surveillance Assessment ASA-04 – Year 2017) No issues from internal and external stakeholders arising from previous assessment as reported by previous CB. 3.3.2 Feedback Raised by Stakeholders (Re-certification / Transfer CB – Year 2018) Communication done via email on 03 May 2018 to various categories of stakeholders (see list under para 2.5):

Stakeholders’ Feedback PMU Response CB verification / comments

Follow up comments (if any)

Government Agencies:

No feedback received. Ongoing consultations will be maintained. No response needed.

Verified during on-site assessment that no response needed.

Nil



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Non-Governmental Organizations: No feedback received.

Ongoing consultations will be maintained. No response needed.

Verified during on-site assessment that no response needed.

Nil

Local Communities - Stakeholders’ Consultation: No specific consultation session was conducted due to location of the audited estates and the POM are far apart. Instead a series of interview session with local communities, workers and staff in audited estates and the POM was conducted. Concerns and suggestions received during interviews and stakeholder consultations: 1. Age factor should be taken

into consideration in determining the fee of work conducted.

PMU responded that this matter will be reviewed by the management.

To be followed up during the next Assessment.

Local Communities - Interviews:

Interviews of sampled staff and workers were also conducted by the auditors during field visits from 04-08 Jun 2018 at the PMU: Staff/Workers sampling: POM = 17 males, 3 females Estate = 51 males, 11 females No negative issues raised by the sampled staff and workers.

No response needed.

No response needed.

Nil

Other Interested parties: No feedback received.

No response needed. No response needed. Nil



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4.0 ASSESSMENT CONCLUSION AND RECOMMENDATION

Based on the findings above, Kuala Lumpur Kepong Berhad Batu Lintang Grouping had been able to demonstrate its compliance with the RSPO Principles and Criteria (April 2013), Malaysian National Interpretation (MYNI 2014) and the RSPO Supply Chain Certification Standard (Jun 2017) for Palm Oil Mill. Therefore, it is recommended that the certification of Kuala Lumpur Kepong Berhad Batu Lintang Grouping be approved and continued.

Signed for and on behalf of Intertek Certification International Sdn Bhd

Dr. Ooi Cheng Lee Lead Assessor Date: 19 Sep 2018

4.1 Acknowledgement of Internal Responsibility and Confirmation of Assessment Findings This is to acknowledge and confirm the assessment visits described in this report and the acceptance of the contents and findings in this assessment report.

Signed for and on behalf of Kuala Lumpur Kepong Berhad Ms. Lee Kuan Yee Senior Sustainability Manager (Plantations) Kuala Lumpur Kepong Berhad Date: 19 Sep 2018



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4.2 INTERTEK- RSPO P&C Certificate details for KLK Batu Lintang Grouping

Certificate No: RSPO 931788

New issue date 26 Sep 2018

Expiry date 25 Sep 2023

Organization Kuala Lumpur Kepong Berhad

Address of Head Office: Wisma Taiko, 1, Jalan S.P. Seenivasagam, 30000 Ipoh, Perak Darul Ridzuan,

Malaysia


Plantation Management Unit: Batu Lintang Grouping

Address of POM: 09800 Serdang, Kedah, Malaysia

Standards:

RSPO Principles and Criteria (Apr 2013); Malaysian National Interpretation (2014); RSPO Supply Chain Certification Standard (Jun 2017) for the Palm Oil Mill.

Certification scope: Production of Crude Palm Oil and Palm Kernel

Supply Chain module for POM Identity Preserved (IP)

Details of the Mill and Supply bases covered by this certificate and the tonnage approved are:

Name Address GPS Reference Certified

Area (ha) Longitude Latitude

Batu Lintang Palm Oil Mill (Capacity: 25 MT/hour)

09800 Serdang, Kedah, Malaysia E 100°37’43.0” N 5°11’37.0”

6957

Batu Lintang Estate

Ladang Batu Lintang, 09800 Serdang, Kedah, Malaysia E100°37’44.65’’ N 5°12’16.35”

Buntar Estate Ladang Buntar, 09800 Serdang, Kedah, Malaysia

E100°35’35.37’’ N 5°10’21.35”

Pelam Estate Ladang Pelam, 09009 Kulim, Kedah, Malaysia

E100°43’74.8’’ N 5°30’26.9”

Subur Estate Bt. 23 Batu Kurau, 34520 Taiping, Perak, Malaysia

E100°47’43.6’’ N 5°02’53.1”

The annual certified tonnages produced at the PMU are detailed as follows:

Batu Lintang POM Annual Tonnages (MT)

Certified FFB 172,260

Certified CPO 37,897

Certified PK 8,096

Supply chain module Identity Preserved (IP)



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Appendix A:

Qualifications of Lead Assessor and Assessment Team

Dr. Ooi Cheng Lee (OCL) Lead Assessor / Team Leader / Technical Expert

(Palm Oil Mill, Environment, OHSAS, Social, HCV, Land Use and Supply Chain) - PhD in Welding, Cranfield University, UK - M.Sc. (Engineering) in Metallurgy, University of Birmingham, UK - B.App.Sc (Hons), Science University of Malaysia - Diploma in Translation for Science and Technology, Malaysia Translation Society

Dr. Ooi Cheng Lee is an IRCA Lead Auditor and Lead Tutor for ISO 9001. He is also involved in auditing in other integrated management systems. He has successfully completed the RSPO Lead Assessor Course for Principles and Criteria (RSPO P&C) and the RSPO Supply Chain Certifications (RSPO SCC). He is currently involved in the management of all types of system and process/product certification in Intertek. He has more than 32 years work experience in product and process specifications, research & development, inspection and testing, quality assurance, engineering development, training, product certification, auditing and quality management system certification. He has conducted assessments of organizations in Malaysia, Singapore, Indonesia, Vietnam, Philippines, China, Myanmar, Cambodia and other regional countries. Assessments include those of rubber and oil palm plantations in Malaysia and Indonesia. His previous position as the General Manager of Lloyd’s Register Quality Assurance (LRQA) Malaysia include the management of all types of systems certification, including that of environmental (ISO 14001), safety & health (OHSAS 18001) and Clean Development Mechanisms (CDM). He is currently the General Manager in Intertek Certification International Sdn. Bhd. He is a member of the Internal Review Panel for RSPO Assessment reports since May 2011. He is part of the RSPO CB Assessment team which audited RSPO certified Plantation Management Units since 2012. Mr. Sazali Hasni – Assessor / Technical Expert (Environment, Conservation and HCV area) - Bachelor of Science (Forestry)

Mr. Sazali Hasni (SH) has over 25 years work experience in the forestry sector. He is an IRCA Auditor for ISO 9001 and auditor for the PEFC Chain-of-Custody Certification. He has successfully completed training in the Intertek In House RSPO P&C, MYNI. He was a member in the stakeholder consultation and development of the Malaysian Criteria & Indicators (MC&I) for Forest management Certification. He has been involved in the auditing of Forest Management Certification for the Perak State Forestry Department and Pahang State Forestry Department. He has also been involved with a German based company in testing their criteria for carbon tracing in an oil palm plantation in 2011. He had also acted as the regional consultant to International Tropical Timber Organization (ITTO) for the Asia Pacific region in the Evaluation and Monitoring of Projects funded by the organization from 1994 to 1998. Projects funded are mainly forestry related such as reforestation, conservation, community forestry apart from other research based projects. Mr. Jumat Majid – Assessor – Social Responsibility and Workers Welfare – BSc (Social Science)

Mr Jumat Majid (JM) has over 13 years work experience in the agriculture sector. He has successfully completed the IRCA accredited Lead Auditor course in ISO 9001:2008 and RSPO P&C MY-NI Lead Assessor course. He has also successfully completed training programs in Organic Agriculture Development and had performed organic agriculture inspections and assessments for more than 6 years. He has been involved in NGO work in the areas of social impact assessments within the South East Asia region. He is part of the RSPO CB Assessment team which audited RSPO certified Plantation Management Units since 2010.



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Appendix B:

Assessment Plan (Actual)

Date Time (Note 3)

Assessors and Assessment Activity

Asssessment Team

4 June 2018

Monday

(Day 1)

7.30 am – 10.30 am

Travel to Subur Estate

10.30 am – 11.00 am

Opening Meeting and Briefing

11.00 am – 1.00 pm

OCL

SH

JMD

Site assessment at Subur Estate

P1 Transparency

P2 Laws & regulations

P3 Economic & Financial Viability

P4 Best Practices at Estates

P7 New Plantings

P8 Continual Improvement



P5 Environmental, Conservation & HCV




P6 Employees, Individuals & Communities incl. Gender Issues


1.00 pm – 2.00 pm

Lunch Break

2.00 pm -5.30 pm

Continue site assessment at Subur Estate

5.30 pm – 6.00 pm

Travel to Hotel & Break

6.00 pm – 7.00 pm

Team Meeting and Discussion

Date Time Assessors and Assessment Activity

5 June 2018

Tuesday

(Day 2)

9.00 am – 12.30pm

OCL SH JMD

Site assessment at Buntar Estate

P1 Transparency




P7 New Plantings










12.30 pm – 1.30 pm

Lunch Break

1.30 pm - 5.30 pm

Continue site assessment at Site assessment at Buntar Estate

5.30 pm – 6.30 pm


6.30 pm – 7.30 pm




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6 June 2018

Wednesday

(Day 3)

8.30 am – 12.30pm

OCL SH JMD

Site assessment at Pelam Estate

P1 Transparency




P7 New Plantings










12.30 pm – 1.30 pm

Lunch Break

1.30 pm - 5.30 pm

Continue site assessment at Site assessment at Pelam Estate

5.30 pm – 6.30 pm


6.30 pm – 7.30 pm



7 June 2018

Thursday

(Day 4)

8.30 am – 12.30pm

OCL SH JMD

Site assessment at Batu Lintang Estate

P1 Transparency




P7 New Plantings










12.30 pm – 1.30 pm

Lunch Break

1.30 pm - 5.00 pm

Site assessment at Palm Oil Mill

P1 Transparency



P4 Best Practices at Mill


SCC for POM







P6 Employees, Individuals & Communities incl. Gender Issues P8 Continual Improvement

5.00 pm – 6.00 pm


6.00 pm – 7.00 pm



8 June 2018 Friday

(Day 5)

8.30 am – 11.00 am

OCL SH JMD


P1 Transparency




Stakeholders’ Consultation on the following categories (see Notes 1 and 2 below):

Contractors

Suppliers

Transporters

NGOs

Government Department / Agencies

Local Community



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SCC for POM

Notes 1. It is mandatory for the PMU to inform Intertek and provide the information (as a minimum the no. of stakeholders in each applicable category and contact number) on the stakeholders prior to the assessment. 2. This will facilitate the random and impartial selection of stakeholders (including independent and organized smallholders, where applicable) and to meet the sample size requirement

11.00 am – 12.00

pm Preparation for Closing Meeting

12.00 pm – 12.30

pm Team Meeting and Discussions with POM Management Representative

12.30 pm – 1.00 pm

Closing Meeting & Briefing at Palm Oil Mill Office

1.00 pm onwards

Travel back to Kuala Lumpur



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Appendix C-1:

Location Map of KLK Batu Lintang Grouping, Kedah, Malaysia

KLK Batu Lintang

Grouping



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Appendix C-2-1: Map of Batu Lintang Estate Home Division and POM



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Appendix C-2-2: Map of Batu Lintang Estate – Ghim Khoon Division



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Appendix C-3-1: Map of Buntar Estate – Home Division



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Appendix C-3-2: Map of Buntar Estate – Kedah Division



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Appendix C-4-1: Map of Pelam Estate – Home Division



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Appendix C-4-2: Map of Pelam Estate – Nagalelai Division



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Appendix C-5-1: Map of Subur Estate – Home Division



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Appendix C-5-2: Map of Subur Estate – Norseman Division



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Appendix C-5-3: Map of Subur Estate – Sungai Pulau Division



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Appendix D:

Photographs at KLK Batu Lintang Grouping

Subur Estate: Neatly stacked fertilizer store Buntar Estate: Interviewing harvesters

Buntar Estate: Interviewing sprayers Pelam Estate: Chemicals premix area



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Appendix E:

Time Bound Plan - as submitted by Kuala Lumpur Kepong Berhad (May 2018)

No

POM

ESTATE Location Licenses

Planting

Year Area (Ha) RSPO Target

LIB

ER

IA S

inoe

Cou

nty

1 Palm Oil Mill is

expected to

commission by

Y2020

Butaw Estate Liberia Leasehold

Only planted

1,418Ha

since 2012

8,011 BY 2022

Gra

nd

Bass

a

Cou

nty

2

Palm Bay Estate Liberia Leasehold

Only planted

6,404 Ha

since 2011

13,007 BY 2022

TOTAL 21,018

IND

ON

ES

IA

KA

LT

IM

1 Berau Kebun Malindomas

Perkebunan

Berau, KALTIM HGU & IUP 2006 7,971

BY 2018 2 Kebun Hutan Hijau Mas Berau, KALTIM HGU & IUP 2006 7,317

3 Kebun Anugrah Surya

Mandiri

Berau, KALTIM IL & IUP - 2,682

1 Jabontara Kebun Jabontara Eka

Karsa

Berau, KALTIM HGU & IUP 2007 14,086

CERTIFIED IN

NOV Y2017

RI

AU

,

SU

MA

TE

RA

1 Mandau Kebun Mandau* Riau, Sumatera HGU & IUP 14,799 CERTIFIED IN

OCT Y2012



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2 Nilo 1 Kebun Nilo Timur

Riau, Sumatera HGU & IUP 12,860

CERTIFIED IN

MEI Y2014 3 Nilo 2 Kebun Nilo Barat Riau, Sumatera HGU & IUP

Kebun Mutiara Riau, Sumatera IL & IUP 2005 1,400 AUDITED IN

March Y2018;

AWAITING

CERTIFICATE

4 Tapung Kanan Kebun Sekarbumi

Alamlestari

Riau, Sumatera HGU & IUP 6,200 CERTIFIED IN

APRIL Y2013

BE

LIT

UN

G

1 Steelindo Wahana

Perkasa

Kebun Steelindo Wahana

Perkasa

Belitung HGU & IUP 14,065 CERTIFIED IN

JANAURY Y2015

2 Parit Sembada Kebun Parit Sembada

Belitung HGU & IUP 3,990 CERTIFIED IN

OCTOBER Y2016

Kebun Alam Karya

Sejahtera

Belitung IL & IUP 2009 2,336 BY 2018

IND

ON

ES

IA

SU

MA

TE

RA

UT

AR

A

1 Stabat Kebun Basilam*

Langkat, SUMUT IUP & HGU 2001 2,697

CERTIFIED IN

AUGUST Y2017

Kebun Tanjung Beringin


Kebun Gohor Lama *


Kebun Padang Brahrang


Kebun Bukit Lawang




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Kebun Tanjung

Keliling*


Kebun Bekiun Langkat, SUMUT IUP & HGU 1984 2,979

Maryke Langkat, SUMUT IUP & HGU 2007 2,704

KA

LT

EN

G

1 KMA POM Kebun Karya Makmur

Abadi

Mentaya Hulu,

KALTENG

IUP & HGU 2008 9397

BY 2018

Kebun Karya Makmur

Abadi

Bukit Santuai

KALTENG

IUP & IL

2008 3406

MAP POM Kebun Mulia Agro

Permai

Baamang,

KALTENG

IUP & HGU

2006 9,055

Kebun Menteng Jaya

Sawit Perdana

Mentaya Hilir Utara,

KALTENG

IL & IUP 2009 5,893

TOTAL

136,830

No POM

ESTATE Location Licenses Area (Ha) RSPO Target

MA

LA

YS

IA

PE

NIN

SU

LA

R

M’S

IA

1 Batu Lintang POM Pelam Estate*

Kulim, Kedah Land Title 2,960

CERTIFIED IN SEPT

Y2013

2 Batu Lintang Estate*

Serdang, Kedah Land Title 1,808

3 Subur Estate Batu Kurau, Perak Land Title 1,290

4 Buntar Estate

Serdang, Kedah Land Title 899



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5 Changkat Chermin POM Lekir Estate

Manjung, Perak Land Title 3,307

CERTIFIED IN SEPT

Y2013

6 Changkat Chermin Estate


7 Raja Hitam Estate


8 Glenealy Estate*

Parit, Perak Land Title 1,059

9 Serapoh Estate*

Parit, Perak Land Title 936

10 Kuala Kangsar Estate*

Padang Rengas, Perak Land Title 1,340

11 Allagar Estate

Trong, Perak Land Title 773

12 Tuan Mee POM Tuan Mee Estate

Sg Buloh, Selangor Land Title 2,678 CERTIFIED IN SEPT

Y2013



of 84

No POM

ESTATE Location Licenses Area (Ha) RSPO Target

13 Tanjong Malim

POM Changkat Asa Estate*

Tg Malim, Perak Land Title 1,714

CERTIFIED IN NOV Y2013 14 Kerling Estate*

Kerling, Selangor Land Title 619

15 Sg Gapi Estate

Serendah, Selangor Land Title 603

MA

LA

YS

IA

PE

NIN

SU

LA

R M

’SIA

16 Jeram Padang POM Ayer Hitam Estate

Bahau, Negeri Sembilan Land Title 2,640

CERTIFIED IN SEPT Y2012

17 Batang Jelai Estate*

Rompin, Negeri Sembilan Land Title 2,148

18 Jeram Padang*

Bahau, Negeri Sembilan Land Title 2,114

19 Kombok Estate*

Rantau, Negeri Sembilan Land Title 2,331

20 Ulu Pedas Estate*

Pedas, Negeri Sembilan Land Title 922

21 Gg Pertanian Estate

Simpang Durian, Negeri Sembilan Land Title 686

22 Sg Kawang Estate*

Lanchang, Pahang Land Title 1,889

23 Renjok Estate*

Telemong, Pahang Land Title 1,578

24 Tuan Estate*

Telemong, Pahang Land Title 1,353



of 84

MA

LA

YS

IA

PE

NIN

SU

LA

R M

’SIA

25 Kuala Pertang

POM

Kerilla Estate* Tanah Merah, Kelantan Land Title 2,176

CERTIFIED IN NOV

Y2014 26 Pasir Gajah Estate Kuala Krai, Kelantan Land Title 2,107

27 Sg Sokor Estate*

Tanah Merah, Kelantan Land Title 1,603

28 Kekayaan POM Landak Estate Paloh, Johor Land Title 4,451

CERTIFIED IN OCT Y2011

29 Kekayaan Estate Paloh, Johor Land Title 4,436

30 Voules Estate*

Tenang, Johor Land Title 2,969

31 Sg Penggeli Estate

Bandar Tenggara, Johor Land Title 942

32 New Pogoh Estate*

Tenang, Johor Land Title 1,545

33 Fraser Estate

Kulai, Johor Land Title 1,916

34 Paloh Estate

Paloh, Johor Land Title 2,029

35 Sg Bekok Estate

Bekok, Johor Land Title 625

36 Ban Heng Estate

Pagoh, Muar, Johor Land Title 631

37 See Sun Estate Renggam, Johor Land Title 589

No POM ESTATE Location Licenses Area (Ha) RSPO Target



of 84

No POM ESTATE Location Licenses Area (Ha) RSPO Target

MA

LA

YS

IA

SA

BA

H

1 Pinang POM Jatika Estate

Tawau, Sabah Land Title 3,508

CERTIFIED IN MAR Y2009

2 Sigalong Estate


3 Pangeran Estate


4 Pinang Estate Tawau, Sabah Land Title 2,420

5 Mill II Pang Burong Estate


CERTIFIED IN MAR Y2009

6 Sri Kunak Estate


7 Tundong Estate


8 Ringlet Estate


9 Bornion POM Bornion Estate

Kinabatangan, Sabah Land Title 3,233

CERTIFIED IN JULY Y2010

10 Segar Usaha Estate

Kinabatangan, Sabah Land Title 2,792

11 Lungmanis POM Tungku Estate

Lahad Datu, Sabah Land Title 3,418

12 Bukit Tabin Estate


13 Lungmanis Estate


14 Sg Silabukan Estate




of 84

15 Rimmer Estate


Above marked * is combination of total rubber and palm oil area within stated plantation where the exact certified or under certification of each plantation will be according to the

respective public summary report.

Country Region Area (Ha)

Malaysia P.M’sia 65,693

Sabah 40,353

Indonesia

KALTIM 32,056

Riau 35,259

Belitung 20,391

Sumatera Utara 21,372

KALTENG 27,751

Liberia Palm Bay 13,007

Butaw 8,011

GRAND TOTAL 263,893

Remarks: 1. KLK has acquired Selinsing division from Agro Harapan Lestari Sdn. Bhd (Formely known as Good Hope) in November 2016. Titled hectarage of Selinsing

Division is 497Ha + 843Ha (Kuala Kangsar Home Division) = 1340Ha

2. KLK has sold 1012Ha to Aura Muhibbah Sdn. Bhd.

3. KLK has sold 32Ha from Allagar Estate and 4Ha from Lekir Estate to West Coast Expressway.



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4. Rimmer POM has been closed due to extensive replanting plan at Lahad Datu Complex.

5. Paloh POM has been closed due to low FFB volume.

6. RSPO Compensation Concept Note has been endorsed by RSPO Compensation Panel on 14/2/2018.