rspo principles & criteria certification report public

SGS RSPO

(Principles & Criteria)

Doc. Number: GP 7003A

Doc. Version date: 01 April 2013

Page: 1 of 48

SGS RSPO, SGS (Malaysia) Sdn. Bhd., No. 26, Jalan Anggerik Vanilla, 31/93,

Kota Kemuning, 40460 Shah Alam, Malaysia

CONTACT PERSON: ABDUL HAYE SEMAIL Tel: +6 (03)5121 2320 - Fax: +6 (03)5122 5927

WWW.SGS.COM

RSPO PRINCIPLES & CRITERIA CERTIFICATION REPORT

Public Summary Information

Project Number: MY02584 Certificate No.: SGS-RSPO/PM-01084

Validity Period: 02/01/13 – 01/01/18

Report Ref. No.: Surveillance Evaluation 01 RSPO Membership

No.: 2-0094-08-000-00

Client Name: Keck Seng (M) Berhad Website: www.my.keckseng.com

Scope: Production of CPO and CPKO at Masai Mill with capacity of 60MT/hour, in the total of 50,000MT/year using MB module.)

Type of Certificate

Holder: MULTISITE

Number of Mill: Masai Palm Oil Mill Number of Sites: 8

Mill Capacity: 60MT/hour Annual CPO

Produced (MT): 43564.37MT

Address:

Street and number:

Town/City

State/Country

Zip/Postal code

Country

Head & Mill Office

9 Miles,

Kong Kong Road,

Masai,

81757 Johor Bahru,

Johor,

Malaysia

Contact Person:

Mr. Teo Aik Chong

Mill Manager

Contact No: +607 255 1111

Mobile : +6 019 753 8841

Email : [email protected]

Country: Malaysia

Plantation Unit

Being Evaluated:

Supply Base Name & Address

Keck Seng Oil Palm Estate, Tong Hin, Sungai Layang Estate, Kota Tinggi Oil Palm, Sin Lian Plantations, Lian Huap Oil Palm Plantations Sdn Bhd, Johore (Masai) Plantations Sdn. Bhd., Lim& Lim Plantations Bhd

Total Certified Area

(Ha):

( after acquisition

by authorities )

3,523.26

Total FFB

Produced (MT):

( 2013 )

70,260.22

End of Public Summary

http://www.my.keckseng.com/

mailto:[email protected]

SGS RSPO




Page: 2 of 48




WWW.SGS.COM

BASIC EVALUATION INFORMATION

MAIN EVALUATION

Evaluation Dates: 10th

to 13th

October 2011

Team Leader/Team: Ha ye Semail

Affiliate Project Manager: Date:

Report approved by: Abdullah Din Date: 20 Dec 12

Certification approved by: Kenny Looi Date: 01 Jan 13

Database logged by: Othman Shahziela Date: 01 Jan 13

SURVEILLANCE 1

Evaluation Dates: 2nd

to 4th

December 2013

Team Leader/Team: James S H Ong


Report reviewed & approved by: Haye Semail Date: 17 Dec 13

Certification approved by: Kenny Looi Date: 18 Dec 13

Database logged by: Othman Shahziela Date: 18 Dec 13

SURVEILLANCE 2

Evaluation Dates:

Team Leader/Team:


Report reviewed & approved by: Date:

Certification approved by: Date:

Database logged by: Date:

SURVEILLANCE 3

Evaluation Dates:

Team Leader/Team:





SURVEILLANCE 4

Evaluation Dates:

Team Leader/Team:





GP 7003A of 48

TABLE OF CONTENTS

BASIC EVALUATION INFORMATION .................................................................................................................... 2

SUMMARY ............................................................................................................................................................... 4

List of Abbreviation ................................................................................................................................................ 6

1. scope of certification assessment ......................................................................................................... 7

1.1 National Interpretation Used ..................................................................................................................... 7

1.2 Certification Scope .................................................................................................................................... 7

1.3 Location and Maps .................................................................................................................................... 7

1.4 Description of Supply Base and Mill Processing Capacity ........................................................................ 9

1.5 Date of Planting and Cycle ..................................................................................................................... 10

1.6 Other Certification Held ........................................................................................................................... 11

1.7 Organizational Information and Contact Person ..................................................................................... 11

1.8 Time-bound Plan for Other Management Units ...................................................................................... 11

1.9 Area of Plantation ................................................................................................................................... 11

1.10 Date Certificate Issued and Scope of Certificate ................................................................................ 12

2. Assessment Process ............................................................................................................................. 12

2.1 Certification Body .................................................................................................................................... 12

2.2 Assessment Methodology, Programme, Site Visits ................................................................................ 12

2.3 Qualification of Lead Assessor and Assessment Team.......................................................................... 14

2.4 Stakeholder Consultation and List of Stakeholders Contacted ............................................................... 14

3. Assessment Findings ............................................................................................................................ 15

3.1 Summary of Findings .............................................................................................................................. 15

3.2 Corrective Action Request ...................................................................................................................... 38

3.3 Status of Non-Conformities Previously Identified .................................................................................... 38

3.4 Issues Raised by Stakeholders and Findings ......................................................................................... 38

4. Acknowledgement of Organization Internal Responsibility .............................................................. 39

4.1 Date of Next Surveillance Visit ................................................................................................................ 39

4.2 Date of Closing Non-Conformities .......................................................................................................... 39

MA Minor CAR 05.............................................................................................................................................. 39

Minor ................................................................................................................................................................. 39

13/10/11 ............................................................................................................................................................ 39

2/12/13 .............................................................................................................................................................. 39

4.3 Acknowledgement of Internal Responsibility and Formal Sign-off Assessment Findings ....................... 39

n.a as Keck Seng ( Malaysia ) Bhd do not have any other certifying units .................................................... 47

LIST OF TABLES

Table 1: Mill and Estate Supply Base GPS Location ........................................................................................... 7

Table 2: Mill Processing Data ( 2012 ) ................................................................................................................. 9

Table 3: Mill Processing Data ( actual figure till Nov 2013 + estimated figure for Dec 2013 )........................... 9

Table 4: Area and FFB Production from Estate Supply Base ........................................................................... 10

Table 5: Planting Age Profile for all Estate Supply Base ( 2013 ) ..................................................................... 10

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Table 6: Area Statement of the Supplying Estates ( 2013 ) .............................................................................. 12

Table 7: Assessment Programme ..................................................................................................................... 13

Table 8: Auditors Profile ..................................................................................................................................... 14

LIST OF FIGURES

Figure 1 : Location Map of Masai Palm Oil Mill , Malaysia .................................................................................. 8

Figure 2: Supplying Estates and Mill Location ..................................................................................................... 8

LIST OF APPENDICES

APPENDIX A: CORRECTIVE ACTION REQUEST & OBSERVATION .......................................................... 40

APPENDIX B: NON-COMFORMITIES PREVIOUSLY IDENTIFIED ............................................................... 46

APPENDIX C: TIME BOUND PLAN .................................................................................................................. 47

APPENDIX D: LIST OF STAKEHOLDER CONTACTED ................................................................................. 48

SUMMARY

From the website, www.my.keckseng.com, it is known that the company a public listed company on the Main Board of Bursa Malaysia Securities Berhad and one of its activities is an integrated palm oil producer. Its activities include the cultivation, harvesting and milling of oil palm to produce Crude Palm Oil. This serves as feedstock into our refinery to produce Palm Olein (cooking oil), Palm Stearin and Palm Kernel Oil. Other finished products include various specialty oils and fats which can be further processed by our customers to produce confectionary and chocolates

Keck Seng (M) Berhad is an ordinary member of the Roundtable on Sustainable Palm Oil (RSPO) and is committed to the sustainable practices of oil palm cultivation. The Group has also been committed to the certification system of RSPO and as a part of the commitment, the Group invited SGS (Malaysia) Sdn Bhd (SGS) to certify Keck Seng’s “Masai Palm Oil Mill” and its Fresh Fruit Bunch (FFB) supplying bases at Masai, Johore through a verification process.

The unit comprising the Masai Palm Oil Mill which has a 60 MT per hour capacity and its supplying bases was eventually certified in 2 January 2013 after successfully going through the main assessment in 2011 and a close-out CAR audit in 2012.

Keck Seng ( Malaysia ) Berhad supplying estates are grouped under

a) Keck Seng Oil Palm Estate ( comprise of the estates Sin Lian, Kota Tinggi, Lian Huap, Johor Masai Sungai Layang Estate and Sungai Serai Estate)

b) Lim & Lim Estate

c) Tong Hing and/or Langsat Estate

The Masai Palm Oil Mill also receive FFB from smallholders around the area.

In 2012, the mill started to receive FFB from another RSPO certified plantation unit known as Kulim Bhd.

Due to the land proximity to Johore Bahru the capital of the state of Johor, there was numerous acquisitions of land for the state development. Some of these acquisition are for:

a) Petronas Gas pipeline

b) SAJ water Reserves

c) Senai-Desaru Highway


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d) Tanjung Langsat Industrial site

e) TNB Rentice

Estate Total titled hectare Acquisition Balance Hectare

Keck Seng 359.0873 8.6373 350.45

Kota Tinggi 327.1727 4.2727 322.9

Sin Lian 379.61 0 379.61

Lian Huap 469.7 0.04 469.66

Johor Masai 421.595 3.275 418.42

Tong Hing Estate 1264.7683 606.8783 657.89

Langsat Estate

Lim & Lim Plantation

925.4441 83.5541 841.89

Sungai Layang Estate

82.54 0 82.54

Sungai Serai Estate

Total 4229.9174 706.6574 3523.26

As part of the integration, the crushing plant , Ragamo and the refinery , Supervitamins were also RSPO

Supply Chain certified in 2013.

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LIST OF ABBREVIATION

Short Form Meanings

CAR Corrective Action Request

CHRA Chemical Health Risk Assessment

CPO Crude Palm Oil

DID Department of Drainage and Irrigation, Malaysia

DOE Department of Environment, Malaysia

EFB Empty Fruit Bunch

EIA Environment Impact Assessment

EMS Environmental Management System

EQA Environmental Quality Act

ERT Endangered, Rare and Threatened species

ESA Environmentally Sensitive Area

FFA Free Fatty Acids

FFB Fresh Fruit Bunches

FR Forest Reserve

Ha Hectare

HCV High Conservation Value

HDPE High Density Polyethylene

IPM Integrated Pest Management

ISO International Organisation for Standardisation

IUCN International Union for Conservation of Nature and Natural Resources

JCC Joint Consultative Committee

JUPEM Jabatan Ukur dan Pemetaan Malaysia (Department of Survey and Mapping Malaysia)

K Potassium

kW Kilowatt

M Meter

Mg Magnesium

Mm Millimeter

Mt Metric ton

MYNI Malaysia National Interpretation

N Nitrogen

NGO Non Governmental Organisation

OA Orang Asli (Indigenous People)

OER Oil Extraction Rate

OSH Occupational Safety & Health

P Phosphate

P & C Principles and Criteria

PK Palm Kernel

POME Palm Oil Mill Effluent

PPE Personal Protective Equipment

PT Pejabat Tanah (Coding for Pahang Land Office)

SOP Standard Operating Procedures

Sdn Bhd Sendirian Berhad (Private Limited)

SEIA Social and Environment Impact Assessment

Sg Sungai

SGS Societe Generale de Surveillance

SOP Standard Operating Procedures

SPAN Suruhanjaya Perkhidmatan Air Negara

SPC Senior Plantation Controller

USECHH Use and Standards of Exposure of Chemicals Hazardous to Health

WHO World Health Organisation

yr Year

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1. SCOPE OF CERTIFICATION ASSESSMENT

1.1 National Interpretation Used

The operations of the mill and their supply based of FFB were assessed against the

Roundtable on Sustainable Palm Oil (RSPO), Principles and Criteria (P&C) – Malaysia

National Interpretation (MY-NIWG dated 26th

April 2008).

1.2 Certification Scope

The scope of certification includes the production of Masai Palm Oil Mill and its supply base

according to the standard of Roundtable on Sustainable Palm Oil (RSPO), Principles and

Criteria (P&C) – Malaysia National Interpretation (MY-NIWG dated 26th

April 2008) and

RSPO Supply Chain Certification Standard dated 25 November 2011.

1.3 Location and Maps

The scope of the main assessment covers Masai Palm Oil Mill and the eight (8) FFB supplying

estates within the Masai, East Johor Baru District, in State Johor, Malaysia (Figure 1). More

detailed information on the estates location and layouts is shown in Figures 2. The GPS

locations of the mills are shown in Table 1.

Table 1: Mill and Estate Supply Base GPS Location

Mill/Supply Base Longitude Latitude

Masai Palm Oil Mill N= 01°32’ 25.89” E=103°57’53.83”

Keck Seng Oil Palm Estate N=1o32’23.4” E=103

o 54’86.3”

Tong Hing Estate N=1o29’45.0” E=103

o 38’04.3”

Sungei Layang Estate N=1o34’18.9” E=103

o 58’55.9”

Kota Tinggi Oil Palm Plantations Sdn. Bhd

N=1o33’33.1” E=103

o 56’7.52”

Sin Lian Oil Palm Plantations Sdn. Bhd.

N=1

o33’7.34” E=103

o 57’39.5”

Lian Huap Oil Palm Plantations Sdn. Bhd.

N=1o32’8.7” E=103

o 57’5.20”

Johore (Masai) Plantations Sdn. Bhd.

N=1

o32’4.00” E=103

o 57’8.26”

Lim & Lim Plantations Bhd. N=1o31’21.9” E=103

o 59’39.2”

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Figure 1 : Location Map of Masai Palm Oil Mill , Malaysia

Figure 2: Supplying Estates and Mill Location

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1.4 Description of Supply Base and Mill Processing Capacity

The FFB is sourced from the 8 estates which are directly managed by Keck Seng ( Malaysia )

Bhd , non-Keck Seng RSPO certified supply base and from smallholders. Masai Palm Oil Mill

started to receive from the non-Keck Seng RSPO certified FFB in 2012. The summary of the

Mill processing data is listed in the Tables below. Table 4 is the area and the FFB production

from the Keck Seng supply base estates.

Table 2: Mill Processing Data ( 2012 )

Financial Year

( FY2012 )

Mill Production Figures (MT)

FFB Received FFB Processed CPO Produced PK Produced

Certified Crop (

Supply Base ) 54,791.06 54,791.06 10,399.34 3,424.44

Certified Crop from

outside supply base 7,208.60 7,208.60 1,368.19 214.03

Total to claim

Certified 61,999.66 61,999.66 11,767.53 3,638.47

Outside Crop

(smallholders etc ) 167,506.46 167,506.46 31,796.84 10,711.52

Total 229,506.12 229,506.12 43,564.37 14,349.99

OER: 18.98% KER: 6.25%

Table 3: Mill Processing Data (actual figure till Nov 2013 + estimated figure for Dec 2013)

Financial Year

( FY 2013 )

Mill Production Figures (MT)

FFB Received FFB Processed CPO Produced PK Produced

Certified Crop ( Supply

Base ) 70,260.22 70,260.22 13,152.71 4,328.03

Certified Crop from

outside supply base 9,221.44 9,221.44 1,726.25 568.04

Total to claim

Certified 79,481.66 79,481.66 14,878.97 4,896.07

Outside Crop

(smallholders etc ) 195,586.98 195,586.98 36,613.88 12,048.16

Total 275,068.64 275,068.64 51,492.85 16,944.23

OER: 18.72% KER: 6.16%

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Table 4: Area and FFB Production from Estate Supply Base

( Actual figure till Nov 2013 + Estimated figure for Dec 2013 )

Name of estate

Plantation area Annual FFB

Production

(MT)

Title area Immature

< 3 y-o

Production

(ha)

Conservation

(ha)

HCV

(ha) *Others

Keck Seng Oil Palm Estate

350.45

0.00 328.45 0 0 22 7,401.76

Tong Hing Estate 657.89 0.00 645.88 0 0 12.01 11,894.61


82.54 0.00 82.44 0 0 0.1 2,507.57

Kota Tinggi Oil Palm

322.9 0.00 252.04 0 0 70.86 6,315.65

Sin Lian Plantations

379.61 0.00 350.46 0 0 29.15 9,256.66

Lian Huap Oil Palm Plantations Sdn Bhd

469.66 0.00 454.26 0 0 15.4 12,041.60

Johore (Masai) Plantations Sdn. Bhd

418.32 0.00 375.65 0 0 42.67 9,106.86

Lim& Lim Plantations Bhd

841.89 278.15 529.13 0 0 34.61 11,735.51

Total 3,523.26 278.15 3,018.31 0 0 226.8 70,260.22

*Others : Transmission tower, Quarry, Roads, line site, rives, water catchment area, office building ,etc

1.5 Date of Planting and Cycle

The age profile for all the estates are simplified in Table 5 below.

Table 5: Planting Age Profile for all Estate Supply Base ( 2013 )

Name of supplying

estate

Planting Age (Ha)

Immature

( < 0 - 3 ) > 3 - < 5 years > 6 - 10 years > 11 - 20 years > 21 - 30 years

Keck Seng Oil Palm Estate

- - - 7.24 325.10

Tong Hin Estate - - - 20.20 625.68


- - 82.44 - -

Kota Tinggi Oil Palm - - - 252.04 -

Sin Lian Plantations - - - 350.46 -

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- - 454.26 - -

Johore (Masai) Plantations Sdn. Bhd

- - 171.68 203.97 -


132.49 246.05 - 2.62 426.12

Total 132.49 246.05 708.38 836.53 1376.90

1.6 Other Certification Held

The company also hold other certification such as KOSHER, HALAL, HACCP, ISO9001: 2008, GMP

and MPOB: Code of Practice

1.7 Organizational Information and Contact Person

The company contact person details are as follows:

Name: Mr. Teo Aik Chong

Designation: Mill Manager

Address:

Mill: Masai Palm Oil Mill

9 Miles, Kong Kong Road, 81757

Masai, Johor, Malaysia

Contact No.: +607 255 1111

Email address: [email protected]

1.8 Time-bound Plan for Other Management Units

Keck Seng (Malaysia) Bhd is a member of RSPO since 03/09/2008 under the palm oil processor

and trader category and has been involved in the certification since 2011 and the membership

number with RSPO is 2-0094-08-000-00

Keck Seng (Malaysia) Bhd owns and operates 1 mill and 8 oil palms estates, covering

approximately 3,523.26 ha in Malaysia. As Keck Seng (Malaysia) Bhd has only one

Management Unit, there is no need to develop a time-bound plan.

1.9 Area of Plantation

The areas of supplying estates for this operating unit are listed in Table 6. Details of production

area (mature/immature) are also listed.

mailto:[email protected]

GP 7003A of 48

Table 6: Area Statement of the Supplying Estates ( 2013 )

Name of supplying estate

Estates Area (Ha)

Immature Mature Area Non-Cultivated Total (Ha)

Keck Seng Oil Palm Estate 0.00 332.34 22 350.45

Tong Hin Estate 0.00 645.88 12.01 657.89

Sungai Layang Estate 0.00 82.44 0.1 82.54

Kota Tinggi Oil Palm 0.00 252.04 70.86 322.9

Sin Lian Plantations 0.00 350.46 29.15 379.61


0.00 454.26 15.4 469.66

Johore (Masai) Plantations Sdn. Bhd 0.00 375.65 42.67 418.32


117.68 693.60 34.61 841.89

Total 117.68 3186.67 226.8 3,523.26

1.10 Date Certificate Issued and Scope of Certificate

The certificate issue date is the date of RSPO approval of this assessment report. This

certification scope is production of CPO and CPKO at Masai Mill with capacity of 60MT/hour, in

the total of 50,000MT/year using MB module.

2. ASSESSMENT PROCESS

2.1 Certification Body

Founded in 1878, the SGS Group is the world’s largest auditing, inspection, testing and

verification organization. Truly global and benefiting from unique international network of more

than 1180 offices, 321 laboratories and 50’000 full time staff, the SGS Group is able to provide

its international clientele with a comprehensive range of services in more than 145 countries.

SGS has no manufacturing, trading or financial interests which could compromise its

independence. Its guarantee of independence, its reputation for professionalism, integrity and

impartiality, as well as it remarkable international network, place the SGS Group in a unique

position.

The RSPO Programme is the SGS Group’s RSPO Certification Programme internationally

accredited by the RSPO Executive Board to carry out oil palm plantation and supply chain

certification/verification and accreditation for global RSPO certification.

2.2 Assessment Methodology, Programme, Site Visits

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The assessment was conducted in 2nd

to 4th December 2013 audit days and involving 3 estates

and the Palm Oil Mill of Keck Seng (Malaysia) Bhd. The audit covers documentation review,

internal procedures, management system, field inspection as well as identification of any

significant issues for both environment or social issues. A sample of stakeholders was

consulted during the assessment to get their feedback on the management doing.

The assessment was conducted based on random samples and therefore nonconformities may

exist which have not been identified. The methodology for objective evidence collection included

physical site inspection, observation of tasks and processes, interview with workers, families

and stakeholders, documentation review and monitoring data.

The assessment program is included as shown in Table 7 below.

Table 7: Assessment Programme

Date Location Activities

2nd

Dec 2013

Masai Oil Mill

&

Estate Sin Lian &

Lian Huap

Day1

Arrive at Senai Airport , travel to Masai Palm Oil

Mill

Opening and Scheduling

Auditor 1 – Palm Oil Mill Supply Chain Audit &

update data for P&C ,

Mill surrounding visit

Auditor 2 – Estate Sin Lian & Lian Huap

Field Operation & Storage

Interview with workers etc

Document Review and Update of Production

Unit

3rd

Dec 2013

Estate Sin Lian ,

Lian Huap and Lim

& Lim

Day 2

Muster , PPE, First aid kit , interview manurers

on Gender and complain form

Dumpsite, Oil Palm Nursery and Storage Area,

Interview Nursery workers, PPE

Visited stakeholders who share common

boundary at Desa Pinggitan/ Kampung

Pengeram

Riparian

Field Operation - manuring / harvesting

Interview workers, Linesite workers and

contractor, HA

Break / Lunch

Storage facilities, workshop and line site of Lim

& Lim Estate

Documentation Review - management plans (

water, environmental , social ) , monitoring

documents , Principle 5 & 6, continual

improvement plans

4th

Dec 2013

Masai Oil Mill

&

Estate Sin Lian &

Lian Huap

Day 3

Documentatation review at the Mill and Estate

office

Preparation for closing meeting

Closing meeting and presentation of findings

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Lunch

Update of report

Auditors leave for Senai airport

2.3 Qualification of Lead Assessor and Assessment Team

SGS Malaysia Sdn Bhd holds copies of educational qualifications, certificates and audit logs for

each of the audit team members. SGS has evaluated the qualifications and experience of each

audit team member and has registered the following designations for conducting RSPO

Assessment. Summary of auditors’ educational background and experience are listed in Table

8 below.

Table 8: Auditors Profile

Evaluation Team Notes

Team Leader-

Plantation, GAP

& Social

James S H Ong, a Bachelor of Agriculture Science holder and agronomist in

SGS (M) Sdn Bhd. He has many years working experience in agriculture

sector in Malaysia and has been working in estates as well in the

agrochemical and fertilizer industry. He is well versed with agrochemical and

fertilizer applications. Has undergone ISO 14001 and RSPO Lead Auditor

training and involved in a number of audits on oil palm plantations.

Auditor 1 –

Environmental &

Supply Chain

Hoo Boon Han is the SGS SEAP Program Coordinator, Bio Fuels

Sustainability. He has successfully completed the RSPO Lead auditor training

course for both P&C as well as the Supply Chain. He experienced in

environmental monitoring & audit, carbon accounting & reduction, wastewater

treatment, waste management and sustainable development experience

across Southeast Asia.

2.4 Stakeholder Consultation and List of Stakeholders Contacted

A wide range of stakeholders were contacted 4 weeks before the planned evaluation to inform

them of the evaluation and ask for their views on relevant palm oil sustainability issues. These

included environmental interest groups, local government agencies and forestry authorities,

social groups and workers’ unions etc.

In this surveillance audit , informal stakeholder consultation took place in the form of meetings

and interviews particularly with workers, contractors and villages representatives who share the

common border with Keck Seng ( Malaysia ) Bhd . In all the interviews and meetings the

purpose of the audit was clarified at the outset followed by an evaluation of the relationship

between the stakeholder and the company before discussions proceeded in accordance with

relevant RSPO principles, criteria and indicators. See Appendix E for stakeholder’s details and

comments.

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3. ASSESSMENT FINDINGS

3.1 Summary of Findings

3.1.1 Principles & Criteria

As outlined, objective evidence was obtained separately for each of the RSPO Indicators and criterion

for the mills and estates. The results for each indicator from each of the operational areas were

evaluated to provide an assessment of conformity. A statement is provided for each of the RSPO

indicators in order to support the findings of the assessment team.

There 3 Major Non-conformities (2 from the P&C and 1 from the Supply Chain) and 4 Minor Non-

conformities identified during this assessment. Some areas identified with potential areas for

improvement has lead to 5 Observations raised. Details for each Non-conformities and observations

are given in Appendix C. Major Non-conformities has been closed out within the period of 60 days

after the assessment. Minor Non-compliances and Observations will be followed up during the next

Annual Surveillance Audit which is scheduled to be conducted within the period of twelve months after

the RSPO approval of Main Assessment.

Principle 1: Commitment to Transparency

Criterion 1.1: Oil palm growers and millers provide adequate information to other stakeholders on environmental, social and legal issues relevant to RSPO Criteria, in appropriate language & forms to allow for effective participation in decision making.

1.1.1 Records of requests and responses must be maintained. Major

Findings In compliance: Yes: X No:

Objective

evidence: Keck Seng (Malaysia) Berhad has a website with the basic information of the company (www.my.keckseng.com). However, the personnel involved in the sustainability activities and to whom sustainability related correspondence should be directed to has not been named or identified. Annual report was viewed and the corporate social responsibility (CSR) issues were addressed at the levels of community and environment especially on biomass and biogas capture.

In Keck Seng ( Malaysia ) Sdn Bhd, records of request are categorized under:

a) Request for repairs (mainly requested by workers) . the workers will use a form known as ‘Request for civil/Mechanical/electrical ‘

b) External stakeholder request and response correspondence are file under the ‘General correspondence file. Most of the request are mainly for donation to school, request for water for occasions by villages etc.

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 Land titles / user rights (C 2.2)

Findings In compliance: Yes: x No:

Objective

evidence: Keck Seng (Malaysia) has maintained the land titles and maps for each estate. During the audit, these titles are available at the main estate office.

1.2.2 Safety and health plan (C 4.7)


Objective

evidence: Verification on Keck Seng’s website www.my.keckseng.com has evidence that relevant safety and health plan are publicly available

1.2.3 Plans and impact assessment relating to environmental and social impacts

(C 5.1, 6.1, 7.1, 7.3)


Objective

evidence: Verification on Keck Seng’s website www.my.keckseng.com has evidence that relevant plans and impact assessment relating to environmental and social impacts are publicly available




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1.2.4 Pollution Prevention Plan (C 5.6)


Objective

evidence: Verification on Keck Seng’s website www.my.keckseng.com has evidence that relevant pollution prevention plans are publicly available

1.2.5 Details of complaints and Grievances (C 6.3)


Objective

evidence: Verification on Keck Seng’s website evidenced that relevant the grievance procedures for boundary and social dispute is available.

Complaints register was maintained; most of the record related to the workers housing/facilities repair or maintenance. Action found to be taken.

1.2.6 Negotiation procedures (C 6.4)


Objective

evidence: Verification on Keck Seng’s website www.my.keckseng.com has evidence that relevant negotiation procedures placed under the compliant and Grievance procedure and are publicly available

1.2.7 Continuous improvement plan (C 8.1)


Objective

evidence: Verification on Keck Seng’s website www.my.keckseng.com has evidence that relevant continuos improvement plans are publicly available

Principle 2: Compliance with Applicable Laws and Regulation

Criterion 2.1: There is compliance with all applicable local, national and ratified international laws and regulations.

2.1.1 Evidence of compliance with legal requirements Major


Objective

evidence: The mill and estates have renewed permits required by the law. Amongst the licences or permit viewed were :

a) MPOB license: 500026504000 for 288,000MT from 01/04/2013 till 31/03/2014

b) DOE Licence No: 001583 for Masai Palm Oil Mill dated 27 June 2007. The license cover:- Effluent Discharge (for land application and waterways) License No 001583 by DOE Johor dated 17 June 2013; Continuous Emission Monitoring; Noise pollution and schedule waste

c) Calibration (weighbridge) JJB-ATK 000592 valid till 08-10-2014

d) Land title for the oil mill (PDJB.40/8/2) issued on 27/11/1979.

a. Diesel storage licence (No siri: J013037) valid until 1st September 2014.

b. Wages were paid with Employees provident fund (EPF) and Social Security Organisation (SOCSO), which are part of employment act.

e) Licences for their Boilers, air receiver, and softener were also viewed and found to be valid. The mill has a file ‘JKKP Certification’ which compiled all the registered machinery in the mill. In Johor, usage and extraction of raw water require a SPAN (Suruhanjaya Perkhidmatan Air Negara). Application of a renewal of the SPAN license dated 6/11/13 was shown as evidence of compliance to the regulation. The application of the license has been approved by SPAN on 29

th July 2010.

2.1.2 A documented system, which includes written information on legal requirements Minor


Objective

evidence: The legal requirements, licenses, permits, quit rent and all applicable payments are listed and the Administrator for Keck Seng Estates, En Husaini, is responsible for the compliance to the legal requirement .

2.1.3 A mechanism for ensuring that they are implemented Minor




GP 7003A of 48


Objective

evidence: The Administrator for Keck Seng Estates, En Husaini will monitor to ensure its implementation. Similar responsibility is also found in the other estates as well as the mill.

2.1.4 A system for tracking any changes in the law Minor


Objective

evidence: Keck Seng has subscribed to the website, www.lawnet.com for the tracking any changes in the law. Mr Leong Kai Ming, Palm Oil Mill Administrator will inform the estates on any changes.

Criterion 2.2: The right to use the land can be demonstrated, and is not legitimately contested by local communities with demonstrable rights.

2.2.1 Evidence of legal ownership of the land including history of land tenure Major


Objective

evidence: Evidence of legal ownership of the land including history of land tenure are available, for example :

Estate No. of titles Terms of title

Sin Lian 2 For Oil Palm

Lian Huap 1 For Oil Palm

2.2.2 Growers must show that they comply with the terms of the land title. [This indicator is to be read with Guidance 2]

Major


Objective

evidence: Documents and correspondence were shown during the audit that Keck Seng Oil Palm Estates , Tong Hing, Sg Layang Estate , Lim & Lim and Green View have been approved to convert the terms of land title from ‘Nil’ to ‘Oil Palm Cultivation’

2.2.3 Evidence that boundary stones along the perimeter adjacent to state land and other reserves are being located and visibly maintained

Minor


Objective

evidence: As of the time of audit, all survey of the individual estates has been completed by Juruukur Menara and Mesra Ukur Sdn Bhd.

The estate has pictorial evidence of white and red PVC pipes placed along the boundary to demarcate the land from the neighbours. They are visibly maintained where possible

In Lian Huap, white and red PVC pipes used as markers are placed along the Sg. Serai as the boundary borders ‘illegal’ villages that have taken residence along the riparian zone of the river.

2.2.4 Where there are, or have been, disputes, proof of resolution or progress towards resolution by conflict resolution processes acceptable to all parties are implemented. (CF 2.3.3, 6.4.1 and 6.4.2)

Minor


Objective

evidence: There have been no land disputes since the establishment of the estates. Interview with villages in Desa Pengerang whose land borders keck Seng Estates show that they do not have any land disputes.

Lian Huap Estate, according to the land title No. 37098 were established on 15/7/1969.

The ‘illegal ‘villages came and occupy the riparian zone after Lian Huap plantation development.

Criterion 2.3: Use of the land for oil palm does not diminish the legal rights, or customary rights, of other users, without their free, prior and informed consent.

2.3.1 Where lands are encumbered by customary rights, participatory mapping should be conducted to construct maps that show the extent of these rights.

Major


Objective

evidence: The report by WildAsia showed that there are no land encumbered by customary right.

http://www.lawnet.com/

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2.3.2 Map of appropriate scale showing extent of claims under dispute Major


Objective

evidence: This is not applicable as they do not have any claims or land disputes.

Maps of appropriate scale are available e.g:

a) For Lian Huap No. Plan :JUM/PEN/2012011/P1-DEM

b) For Sin Lian No. Plan :JUM/PEN/2012010/P1-DEM

c) For Tong Hing No. Plan :JUM/PEN/2012005/P1-DEM

2.3.3 Copies of negotiated agreements detailing process of consent (C 2.2, 7.5, 7.6) Minor


Objective

evidence: Not applicable.

Principle 3: Commitment to Long-Term Economic and Financial Viability

Criterion 3.1: There is an implemented management plan that aims to achieve long-term economic and financial viability

3.1.1 Annual budget with a minimum of 2 years of projection Major


Objective

evidence: At Lian Huap Office, we were able to access the ‘Keck Seng Intranet Portal and under the Principle 3, Criterion 3.1 and 3.11 section we were able to access the annual budget for 2014-2016

For mill level, 2013-2015 budgets comprises maintenance; plant upgrading, environment and power house.

3.1.2 Annual replanting programme projected for a minimum 5 years with yearly review Minor


Objective

evidence: The annual replanting programme projected for a minimum 5 years with yearly review was also accessible from the ‘Keck Seng Intranet Portal ‘under the section Principle 3 , Criterion 3.1 and 3.1.2.

For e.g

2014 2015 2016 2017 2018

Lian Huap 0 0 0 0 0

Lim & Lim 160.47 107.27 41.32 70.78 0

Tong Hing 0 0 0 79 100

Keck Seng 0 0 0 0 325.1

The other estates do not have any replanting for the next 5 years

Principle 4: Use of Appropriate Best Practices by Growers and MIllers

Criterion 4.1: Operating procedures are appropriately documented and consistently implemented and monitored.

4.1.1 Documented Standard Operating Procedures (SOP) for estates and mills Major


Objective

evidence: The SOP for the estate is documented in the Keck Seng (Malaysia) Bhd Standard Operating Procedure, which was updated on 2/8/2012.

It includes the estate operations for :

GP 7003A of 48

a) Office

b) Nursery ( e.g. EST-SOP-01 )

c) Immature Area

d) Mature Area

Maintenance

Harvesting ( e.g EST-SOP-05 )

Transporting/Logistic

e) Workshop

f) Dispensary

g) Accommodation

4.1.2 Records of monitoring and the actions taken are maintained and kept for a minimum of 12 months

Minor

Findings In compliance: Yes: No: X

Objective

evidence: Records of monitoring and the actions taken are still not established

Minor 01

Criterion 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 Monitoring of fertilizer inputs through annual fertilizer recommendations Minor


Objective

evidence: Annual fertilizer recommendations is reported by the consultant PSA Sdn Bhd. The report for 2013 is available as evidence , ‘Agronomic Advisory Report and Fertilizer Recommendations for 2013 ‘

Monitoring of fertilizer inputs through annual fertilizer recommendations is available .The applications for 2013 is on track. Lian Huap has completed their last round of fertilizer Kieser-Bor of 1.5 kg for 2013.

Records of the fertilsier applications are recorded in the ‘Daily Progress Report’ by the field conductor.

4.2.2 Evidence of periodic tissue and soil sampling to monitor changes in nutrient status Minor


Objective

evidence: Evidence of periodic tissue and soil sampling to monitor changes in nutrient status is available. The soil and foliar analysis for 2013 was done by the consultant PSA Sdn Bhd in September 2013 and the results will be used for the 2014 fertiliser recommendation.

4.2.3 Monitor the area on which EFB, POME and zero-burn replanting is applied Minor


Objective

evidence: The area on which POME and Decanter cake applied is monitored.

EFB from the processing is 100% utilized back in the Mill boiler renewable energy programme.

According to the mill and the DOE licence, about 30% of the palm oil mill effluent (POME) is being applied to land by a flatbed system in the Lim and Lim Estate since 2005 covering about 100 hectares in Field 09. The allowable BOD is 5000ppm.

POME sample for land application analysed indicates the BOD to be below 500ppm at all the time. This is because the POME from anaerobic pond is being transferred to anaerobic tanks for the production of biogas. The application is monitored by the mill workers and application is only done during the day and application during the rainy season is avoided.

In order to avoid the over accumulation of the decanter cake to a particular estate, the decanter solid is delivered by tractor to the following estates, Lian Huap , Sin Lian and Johor Masai in rotation.

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Estates receiving the Decanter Cake are rotated monthly. In October, Johor Masai , Field 2 received 1,249.05 MT.

The reception of the Decanter Cake is recorded in the Decanter Cake Despatch Chit File. The file also shows the field it will be applied so that monitoring is recorded.

For e.g. in the month of Nov 2013, Sin Lian Estate Field 5 (100.77 ha ) received a total of 1,180.92 MT which was placed in an area of 9.24 ha .

Criterion 4.3: Practices minimize and control erosion and degradation of soils.

4.3.1 Documented evidence of practices minimizing soil erosion and degradation (including maps)

Minor


Objective

evidence: The estate will refer to the SOP Document No: EST-SOP-07 Soil Conservation that outlines the objectives of practices minimizing soil erosion and degradation :

a) To maintain the soil condition

b) To avoid soil erosion

c) To maintain and improve soil structure

d) To maintain and improve soil fertility

e) To maintain soil moisture

f) To maintain soil stability

g) To prevent the loss of top soil

Basic maps of estates are available to show its general topography

4.3.2 Avoid or minimize bare or exposed soil within estates Minor


Objective

evidence: The estate will refer to the above SOP Document No: EST-SOP-07 where practices are applied to avoid or minimize bare or expose soil within the estate.

Visit to the fields in Sin Lian, Lian Huap and Johor Masai estates show that the fields are not bare. Spraying is mainly concentrated around the palm circles as well as the harvesting path.

In Johor Masai although one field was seen to be bare it was reported that it has been historically so and not due to the overspraying activities

4.3.3 Presence of road maintenance programme Minor


Objective

evidence: The 2013 annual budget for road maintenance for Keck Seng, Sin Lian, Lian Huap , Johor Masai is RM 45,000

The SOP Doc . No: EST-SOP-03 details the types of maintenance practiced in the estates for crop evacuation, upkeep operation and field inspection

They types of maintenance include:

a) Potholing

b) Grading run-off construction

c) Cross road drains

d) Road Junctions

e) Road surfacing

f) Drain

g) Bridges

h) Culvert

i) Fences

GP 7003A of 48

4.3.4 Subsidence of peat soils should be minimized through an effective and documented water management programme

Minor


Objective

evidence: Base on the soil map available, there are no identified peat soils in the estates.

4.3.5 Best management practices should be in place for other fragile and problem soils (e.g. sandy, low organic matter and acid sulphate soils)

Minor


Objective

evidence: According to soil maps that are made available there are no peat areas in Keck Seng Estates. The main soils in the Keck Seng estate are in the order as follows;

Rengam (granite parent material)

Harimau (raised older alluvium)

Local alluvium (valley floors) and

Batu Anam (Shale parent material)

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

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

Major


Objective

evidence: During the field visits, evidences are found that watercourses like main rivers and streams are protected and appropriate riparian buffer zones markings using red paint on the palms along the buffer zones and ‘buffer zone’ signboards are found in the estates.

No spraying or application of fertilizer observed during the field visit.

4.4.2 No construction of bunds/weirs/dams across the main rivers or waterways passing through an estate

Major


Objective

evidence: No construction of bunds/weirs/dams were across the tributaries or rivers although , the Unit has constructed a pond beside the field drain to act as the pond where water is pumped to the mill for treatment before distributing it for domestic use.

4.4.3 Outgoing water into main natural waterways should be monitored at a frequency that reflects the estates and mills current activities which may have negative impacts (Cross reference to 5.1 and 8.1)

Major


Objective

evidence: Records of river water testing analysis results and report is available. In their 23

rd March 2013

annual analysis, the senior manager (Laboratory) has concluded that the quality has no problem meeting the specification of WQI Class IV.

4.4.4 Monitoring rainfall data for proper water management Minor


Objective

evidence: The rainfall is recorded daily in the estates.

4.4.5 Monitoring of water usage in mills (tonnage water use/tone FFB processed) Minor


GP 7003A of 48

Objective

evidence: Water usage is monitored in the Masai Palm Oil mill and records are available from the Keck Seng Intranet Portal

Month tonnage water use/tone FFB processed

Oct ‘13 0.76

Sep ‘13 0.6

Aug ‘13 0.88

4.4.6 Water drainage into protected areas is avoided wherever possible. Appropriate mitigating measures will be implemented following consultation with relevant stakeholders.

Minor


Objective

evidence: No evidence of water being drained into forest or protected reserves or local neighbouring stakeholder’s land.

4.4.7 Evidence of water management plans Minor


Objective

evidence: The Unit has a ‘Water Management Policy’ EST-SOP-11 that include the following monitoring objectives:

a) Monitoring rainfall data

b) Buffer zone protection

c) Waterway sampling and analysis

The Oil Mill will pump a located sited beside the field drain and is treated at the mill before piping it to the worker line site at Johor Masai Linesite.

However, the estate has not monitored the domestic water usage.

Observation 01

Criterion 4.5: Pests, disease, weeds and invasive introduced species are effectively managed using appropriate Integrated Pest Management (IPM) techniques.

4.5.1 Documented IPM system Minor


Objective

evidence: The IPM system is documented in the SOP Doc. No: EST-SOP-10 Integrated Pest Management.

It includes the following section:

a) Leaf Eaters : chemical control and Census procedures

b) Oryctes control : chemical control

c) Rat control : Baiting , Barn Owl

d) Other Insetcs: Chemical control

e) Other Pest in an Oil Palm Plantation

f) Beneficial Plants – Planting Procedures

4.5.2 Monitoring extent of IPM implementation for major pests Minor

Findings In compliance: Yes: No: x

Objective

evidence: Monitoring of IPM implementation for major pests like rat is available. This is recorded in the Rat Baiting / Ganoderma/ Bagworm Census form.

However although , in the EST-SOP-10 for rat control document that baiting to cease when fresh damage falls below 5 % , the census record show that baiting ceased before it was brought down to 5 % e.g . in Johor Masai

Field Before baiting % Last Baiting %

GP 7003A of 48

3 15.27%

Date: 12/1/13

8.54%

Date : 27/3/13

4 17.29%

Date : 13/1/13

15.27%

Date : 28/3/13

Minor 02

4.5.3 Recording areas where pesticides have been used Minor


Objective

evidence: Records where pesticide used is recorded in the :

a) Store Requisition , by the storekeeper

b) Daily Progress report recorded by the staff

4.5.4 Monitoring of pesticide usage units per hectare or per ton crop e.g. total quantity of active ingredients (a.i) used/tone of oil

Minor


Objective

evidence: Monitoring of each pesticide usage units per ton crop e.g. total quantity of active ingredients (a.i) used/tonne of FFB is recorded in the ‘ Summary of chemical usage ‘ file

In the Intranet protocol, the annual record of each pesticide use is available since 2010.

Criterion 4.6: Agrochemicals are used in a way that does not endanger health or the environment. There is no prophylactic use of pesticides, except in specific situations identified in national Best Practice guidelines. Where agrochemicals are used that are categorized as World Health Organization Type 1A or 1B, or are listed by the Stockholm or Rotterdam Conventions, growers are actively seeking to identify alternatives, and this is documented.

4.6.1 Written justification in Standard Operating Procedures (SOP) of all agrochemical use

Major


Objective

evidence: Written justification in Standard Operating Procedures (SOP) of most agrochemical is available however some pesticide like the rodenticide, Matikus, was not included.

Observation 02

4.6.2 Pesticides selected for use are those officially registered under the Pesticides Act 1974 (Act 149) and the relevant provision (Section 53); and in accordance with ESECHH Regulations (2000)

Major


Objective

evidence: Pesticides selected for use are those officially registered under the Pesticides Act 1974 (Act 149) and the relevant provision (Section 53); and in accordance with ESECHH Regulations (2000

4.6.3 Pesticides shall be stored in accordance to the Occupational Safety and Health Act 1994 (Act 514) and Regulations and Orders and Pesticides Act 1974 (Act 149) and Regulations

Major


Objective

evidence: It is good to note that the pesticide storage facilities of Keck Seng Estates of Sin Lian and Lian Huap, Lim & Lim were sufficient with sound roofing, concrete walls , ventilation fan and natural and lighting, storage racks and the products stacked properly.

However at Oil Palm Nursery store, products were not stored properly, unlable chemicals were removed from their original packing, empty packaging were strewn on the floor instead of disposing it in a proper manner, no water source nearby in case of emergency, emergency response procedure was lacking , no spill kit sighted and no information like MSDS available.

Although the estate advocated triple rinsing and puncturing of the empty chemical containers, yet

GP 7003A of 48

it was found that in the empty chemical container site, both the triple rinsed and non-triple rinsed containers are kept alongside.

In Lim& Lim, empty containers and half used agrochemical are found on the tractors at the workshop, at the contractor shed, in the lubricant store instead of being stored in an appropriate site. The shed used to store the empty container may not be safe as some of its pillars are termite infested.

Spill kit was also absent at the Lim & Lim Chemical store, and in the lubricant store.

Major 03

4.6.4 All information regarding the chemicals and its usage, hazards, trade and generic names must be available in language understood by workers or explained carefully to them by a plantation management official at operating unit level

Major


Objective

evidence: Information like MSDS regarding the chemicals and its usage, hazards, trade and generic names are available in language understood by workers.

The new store keeper at Lim& Lim was able to identify the correct MSDS of some of the newly used products like TransorbK Glyphosate or Clithodim.

However, in the fogging equipment store, where Malathion and Sumithion is also stored, no MSDS was found ( although found in the main store )

Observations 02

4.6.5 Annual medical surveillance as per CHRA for plantation pesticide operators Major

Findings In compliance: Yes: No:

Objective

evidence: Records of annual medical surveillance as per CHRA for plantation pesticide operators are found and kept in the file ’ Medical Surveillance Record’ .

In the Keck Seng Estate Medical Surveillance Record file, the pesticide operators in 2013 records are up-to-date and the following sprayer records are available:

a) Jumadi – Fogging operator

b) Achmad Nurkholis - Sprayer

c) Ahmat Romadhoni - Sprayer

d) Rendi - Sprayer

e) Erli Wati - Chemical Mixer

f) Mustapa - Sprayer

4.6.6 No work with pesticides for confirmed pregnant and breast feeding women Major


Objective

evidence: Female sprayers are not used in Sin Lian and Lian Huap Estates. No pregnant and breast feeding women for female sprayers in Lin & Lin Estate.

4.6.7 Documentary evidence that use of chemical categorized as World Health Organization Type 1A or 1B, or listed by the Stockholm or Rotterdam Conventions and paraquat, is reduced and/or eliminated. Adoption of suitable economic alternative to paraquat as suggested by the EB pending outcome of the RSPO study on IWM

Minor


Objective

evidence: Although it was generally reported that the estates have ceased using paraquat since 2011, however in the Lim & Lim Oil Palm Nursery , paraquat is found in the store and still used as a cocktail spray to control some tough weeds like Eluesine indica.

Observation 03

4.6.8 Documented justification of any aerial application of agrochemicals. No aerial Major

GP 7003A of 48

spraying unless approved by relevant authorities


Objective

evidence: As of to-date no aerial application of agrochemical has been practiced in Keck Seng Estates.

4.6.9 Evidence of chemical residues in CPO testing, as requested and conducted by the buyers

Minor


Objective

evidence: There has not been any request for chemical residues in CPO to be tested for chemical residue.

4.6.10 Records of pesticides use (including active ingredients used, area treated, amount applied per hectare and number of applications) are maintained for either minimum of 5 years or starting November 2007

Minor


Objective

evidence: In Lian Huap, records of pesticides use (including active ingredients used, area treated, amount applied per hectare and number of applications) are maintained. For herbicide , this is maintained in the ‘ Monthly Herbicide Spraying Record and is maintained since 2009.

For e.g

Division: Lian Huap

Month: July 2013

Field No.: 1

Ha: 80.43

Chemical Used :

Quantity Rate / ha

Transorb K Glyphosate

54 lit 0.67 lit

Canyon 4000 g 50 g

surfactant 4000 lit 0.05lit

Labour: 15 mandays , Rate RM 15.20

Cost per ha: RM28.14 / ha ( Chemical + Labour )

Similar records were maintained in Lin & Lin Estate.

Criterion 4.7: An occupational health and safety plan is documented, effectively communicated and implemented

4.7.1 Evidence of documented Occupational Safety Health (OSH) plan which is in compliance with OSH Act 1994 and Factory and Machinery Act 1967 (Act 139)

Major

Findings In compliance: Yes: No: x

Objective

evidence:

a) OSH Policy – Occupational Safety & Health Policy or Polisi Keselamatan dan Kesihatan ( 5 /3/2012) signed by James Ho, General Manager

b) Risk assessment : Hazard Identification Risk Assessment Risk Control ( HIRARC ) in the local language version is available , ref : EST-SOP- 11. In 2013, the review was done by the Manager on 16

th August 2013. The operations that were risk analyzed are: manuring,

loading and unloading fertilizer,, spraying, chemical mixing, diesel tank , Road Maintenance, Driver, harvesting.

c) Although there is awareness and training programme for the safe use of chemical , the use of PPE are found in their 2013 training programme yet Mandore Yusni and worker Irwan at the oil palm nursery and the new storekeeper ,Sharizan at Lim & Lim they were not using their gloves or face mask when entering the workarea that require appropriate PPE

d) During the Muster at Keck Seng Estate, the workers are found to be using the appropriate PPE for their job. Some of the company provided PPE seen are: Helmet, gloves, mask ,

GP 7003A of 48

boots, sickle protector . Nevertheless , 2 sickle pole placed on the floor beside the fogging store were found to be without the sheath protector

e) For Lian Huap , the Assistant Manager , En Mohd Rosli b Mohd has been appointed as the responsible person for OSH . The Estate also has the ‘Organisation chart for OSHA 2013/14 available in the OSH file.

f) Safety Meetings are held according to schedule :

Meeting Date

JKKP 25/9/13 23 attendance ( + committee, wakil Majikan , worker representatives )



g) Accident and emergency procedures : Not available at the Keck Seng main chemical store and in Lim & Lim chemical store.

h) First aid kit is handled by the field staff and also the harvesting contractor mandores. However the harvesting contractor ,Mr Zubir first aid kit ,was not replenished

i) At the Lim& Lim, no proper shower area was provided for the sprayers . Cik Maisom, a weeder ,when interviewed mentioned that she would take shower at home after her weeding operation .This goes the same for the manurer, Cik Lisawati, .

j) Hosptal Assistant do not have the latest list of the MSDS of the chemical used by the estates

Major 04

4.7.2 Records should be kept of all accidents and periodically reviewed at quarterly intervals

Major


Objective

evidence: Records are kept of all accidents in the ‘JKKP 6 and JKKP 8 Laporan Kemalangan file ‘and periodically reviewed at quarterly intervals during the Safety committee meeting.

At the dispensary, the Hospital Assistant, Mr Kirubakaran has recorded the month the frequency of each type of injury and accident for both the mill as well as the estate in a graph, however no LTA records are available

Observation 04

4.7.3 Workers should be covered by accident insurance Major


Objective

evidence: All workers are covered by accident insurance. When the estate take in foreign workers they will be automatically insured for the application of their work permit.

Records are available for all employed foreign workers e.g. for the worker En . Riyadi with passport No: A6068307 is covered under the Ace Jerneh Insurance Bhd FWCS Policy No: TP-W0295725-WFC valid till 20/9/2014. The insurance company will also provide another document known as Slip Pengesahan Skim Pampasan Asing ( SSPA ) No. ruj. Slip SSPA: JTK 0479753 to be submitted to the Immigration Department.

Records for contractor worker e.g harvester En Usman is also available. Policy No.: TP-W0033957-WWF-R005 ( valid till 18/3/2014 )

Local workers and staff are covered under the SOCSO scheme . For the staff, Keck Seng will also provide cover under the Group Hospital and Surgical ( GH&S ) and the Group Personal Accident Insurance

Criterion 4.8: All staffs, workers, smallholders and contractors are appropriately trained.

4.8.1 A training programme (appropriate to the scale of the organization) that included Major

GP 7003A of 48

regular assessment of training needs and documentation, including records of training for employees are kept


Objective

evidence: Training Plan and training records are available for Masai POM and the estates.

PPE training & company policy

March 2013

Chemical Mixer and sprayer 23/9/13

Manuring and Rat Baiting 15/11/13

Harvesting and POME Driver 19/1/13

Lorry and Tractor Driver 20/11/13

Emergency Response Team Nov 2013

First Aid kit 27/11/ 2013

Fire fighting Yet to be conducted

Principle 5: Environmental Responsibility and Conservation of Natural Resources and Biodiversity

Criterion 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 continuous improvement.

5.1.1 Documented aspects and impacts risk assessment that is periodically reviewed and updated

Major


Objective

evidence: The environmental aspect and impacts risk assessment was documented based on the assessment report conducted by Wild Asia dated June 5, 2012. The impact assessment covers the area: contamination of soil and water, air pollution, loss of natural resources (fossil fuel usage) and soil erosion and sedimentation of waterways.

5.1.2 Environmental improvement plan to mitigate the negative impacts and promote the positive ones, is developed, implemented and monitored

Minor


Objective

evidence: All the records are well maintained in accordance with the relevant regulations, following documents were sampled and verified:

Schedule waste consignment note no: 0490; collected by Pentas Flora Sdn Bhd (License No: 001444 & 001445).

Domestic waste are collected regularly from the houses and disposed into a bin for the local authorities to disposed it to a authorized dumpsite.

Criterion 5.2: The status of rare, threatened or endangered species (ERTs) and highly conservation value habitats, if any, that exist in the plantation or that could be affected by plantation or mill management, shall be identified and their conservation taken into account in management plans and operations.

5.2.1 Identification and assessment of HCV habitats and protected areas within land holdings and attempt assessments of HCV habitats and protected areas surrounding landholdings

Major


Objective

evidence: Keck Seng has engaged Wild Asia to conduct SEIA and HCV assessment. The assessment report dated June 5, 2012 stated that there is no HCV within the landholdings.

5.2.2 Management plan for HCV habitats (including ERTs) and their conservation Major


Objective Keck Seng has appointed Wild Asia on 20th February 2012 to conduct the Social, Environmental

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evidence: Impact Assessment (SEIA) and High Conservation Value (HCV) Assessment for its estates.

From the findings of the assessment report, no HCV or ERT within the Keck Seng boundary.

The company was focused on enhancing the signage for conservation area and permitting the growth of natural vegetation in the conservation area and buffer zones area identified.

5.2.3 Evidence of a commitment to discourage any illegal or inappropriate hunting, fishing or collecting activities and developing responsible measures to resolve human-wildlife conflicts

Minor


Objective

evidence: During onsite audit, signage for prohibiting hunting and collecting for flora and fauna are observed in few areas.

Criterion 5.3: Waste is reduced, recycled, re-used and disposed of in an environmentally and socially responsible manner.

5.3.1 Documented identification of all waste products and sources of pollution Major


Objective

evidence: All waste products and sources of pollution were documented in mill and estate level. Palm Oil Mill Waste and Pollution Management Plan (Doc: QM-W&PMP-01; issued date 09.04.2013) identified the sources including POME, methane gas, decanter cake, boiler flue gas, boiler ash, used lubricant, used filter, used cotton rag and domestic waste.

For the estate level, the sources of pollution record in document: Areas of Potential Environmental Impact in Estate which including use of agrochemical, use of oil & lubricant, repair vehicle at workshop, replanting and domestic waste.

5.3.2 Having identified wastes and pollutants, an operational plan should be developed and implemented to avoid or reduce pollution

Minor


Objective

evidence: Palm Oil Mill Waste and Pollution Management Plan (Doc: QM-W&PMP-01; issued date 09.04.2013) has incorporated the monitor, mitigate and improve stages to ensure the operational plan to be implemented.

Schedule waste consignment note no: 0490; collected by Pentas Flora Sdn Bhd (License No:001444 & 001445)

In Keck Seng Estate, waste is identified and recorded in the Scheduled Waste Record . It will be sent to the Palm oil Mill where a approved disposal agent will be arranged for its disposal .

However empty chemical containers have yet to be disposed off. The estate also uses the 20 lit for their pre-mix

At the contractor site, vehicles are parked there and oil stain is found to have contaminated the ground.

There are containers of used oil at the site. There is an abandoned excavator near the ‘Ah Hock’ housing site and oil form the excavator is contaminating the soil.

At Lim & Lim workshop, the ground is not concrete and there are no oil tray placed below the vehicles.

At Lim & Lim and the Keck Seng Estate tractor wash area, no sedimentation pond or oil trap been constructed to trap soil and oil.

At the contractor line site, discarded oil filter, TV console and other waste material are thrown into the frond heap

Minor 05

5.3.3 Evidence that crop residues/biomass are recycled (Cross reference C 4.2) Minor


Objective

evidence: During onsite audit, inspection confirmed that the treated POME will be used for land application during day time. For the biomass, Masai POM produce mesocarp fiber, shell and EFB which use as the boiler fuel whiles the boiler ash are recycled to the plantation.

GP 7003A of 48

Criterion 5.4: Efficiency of energy use and use of renewable energy is maximized.

5.4.1 Monitoring of renewable energy use per ton of CPO or palm product in the mill Minor


Objective

evidence: The mill 2012 reports renewable energy use per ton of CPO as below:

a. 0.75MT Mesocarp Used (ton) per CPO Production (ton)

b. 0.06MT Shell used (ton)/ CPO Production (ton)

c. 0.93MT EFB used (ton)/ CPO Production (ton)

5.4.2 Monitoring of direct fossil fuel use per ton of CPO or kW per ton palm product in the mill (of FFB where the growers has no mill)

Minor


Objective

evidence: The mill 2012 reports fossil fuel use per ton of CPO:

1.73 liters/MT per ton of CPO

Criterion 5.5: Use of fire for waste disposal and for preparing land for replanting is avoided except in specific situations, as identified in the ASEAN Guidance or other regional best practice.

5.5.1 No evidence of open burning. Where controlled burning occurs, it is as prescribed by the Environmental Quality (Declared Activities) (Open Burning) Order 2003

Major


Objective

evidence: In Lim & Lim where a field is due for replanting. The previous crop is felled and chipped to appropriate size and place on rows in the field. No evidence of open burning is seen.

5.5.2 Previous crop should be felled/mowed down, chipped/shredded, windrowed or pulverized/ploughed and mulched

Minor


Objective

evidence: In Lim & Lim where a field is due for replanting. The previous crop is felled and chipped to appropriate size and place on rows in the field. No evidence of open burning is seen.

5.5.3 No evidence of burning waste (including domestic waste) Minor


Objective

evidence: Signboards are placed at the linesite to warn workers against open burning. No evidence of open burning of domestic waste is seen.

Criterion 5.6: Plans to reduce pollution and emissions, including greenhouse gases are developed, implemented and monitored.

5.6.1 Documented plans to mitigate all polluting activities (Cross reference C 5.1) Major


Objective

evidence: Waste and Pollution Management Plan (Doc: QM-W&PMP-01; issued date 09.04.2013) identified all polluting activities includes the POME treatment & capture of methane gas. The capture of the methane will be used as biogas to generate steam to be used in boiler

5.6.2 Plans are reviewed annually Minor


Objective

evidence: Waste and Pollution Management Plan (Doc: QM-W&PMP-01) was updated on 09.04.2013

5.6.3 Monitor and reduce peat subsidence rate through water table management (Within ranges specified in C 4.3)

Minor


Objective

evidence: No peat area within Keck Seng’s plantation.

GP 7003A of 48

Principle 6: Responsible Consideration of Employees and of Individuals and Communities by Growers

and Millers

Criterion 6.1: Aspects of plantation and mill management, including replanting, that have social impacts 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 continuous improvement.

6.1.1 A documented social impact assessment including records of meetings Major


Objective

evidence: The appointed consultant, Wild Asia conducted a social impact assessment on the 23/4/13 and the report, Social& environmental Impact Assessment including a Preliminary Management Review was viewed to confirm that a documented social impact assessment was available.

6.1.2 Evidence that the assessment has been done with the participation of affected parties

Minor


Objective

evidence: As above, the report viewed showed that evidence that the assessment has been done with the participation of affected parties: e.g

a) Male and female workers

b) Contractor workers

c) Staff

d) FFB suppliers

e) villages

6.1.3 A timetable with the responsibilities for mitigation and monitoring is reviewed and updated as necessary

Minor


Objective

evidence: The 2012 meeting held on 11/12/12 with stakeholders is available to show the annual review of issues raised, discussed and clarified by Keck Seng.

The 2013 meeting is scheduled to be held on Jan 2014.

The 2012 meeting is Keck Seng first meeting with the stakeholders since certification.

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.

6.2.1 Documented consultation and communication procedures Major


Objective

evidence: Keck Seng estate will refer to the SOP Doc. No: RSPO CRI-1.12 Procedures to handle and respond to the request enquiries from stakeholders’ as the documented consultation and communication procedures.

It outlines the responsibility, flowchart of the outline and the interface involved.

Keck Seng will organize yearly stakeholder joint meeting for communication and consultation between growers and/or millers, local communities and other affected or interested parties. The latest stakeholders meeting was organized on 11 Dec 2012 and around 28 stakeholders had attended the meeting. Issues such as road maintenance at the adjacent village.

6.2.2 A nominated plantation management official at the operating unit responsible for these issues

Minor


Objective

evidence: En Nordin B Thurmuji, Assistant Estate Manager Tong Hing Estate , is the nominated plantation management official at the operating unit responsible for these issues

6.2.3 Maintenance of a list of stakeholders, records of all communication and records of actions taken in response to input from stakeholders

Minor


Objective List of stakeholder is available and the annual meetings and records of all communication and

GP 7003A of 48

evidence: records of actions taken in response to input from stakeholders are filed.

The mill and estate have kept the list of stakeholders up to date by reviewing contact person and phone numbers. The stakeholders list includes government department such as MPOB, DOSH, independent suppliers of FFB, local communities, worker organization and non-governmental department.

Criterion 6.3: There is a mutually agreed and documented system for dealing with complaints and grievances, which is implemented and accepted by all parties.

6.3.1 Documentation of the process by which a dispute was resolved and the outcome Major


Objective

evidence: Keck Seng estate will refer to the SOP Doc. No: RSPO CRI-1.12 Procedures to handle and respond to the request enquiries from stakeholders’ as the documented consultation and communication procedures for the process by which a dispute was resolved and the outcome

It outlines the responsibility, flowchart of the outline and the interface involved.

6.3.2 The system resolves disputes in an effective, timely and appropriate manner Minor


Objective

evidence: There are no disputes with the villages as interviewed

6.3.3 The system is open to any affected parties Minor


Objective

evidence: The system is open to any affected parties

Criterion 6.4: Any negotiations concerning compensation for loss of legal or customary 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 Establishment of a procedure for identifying legal and customary rights and a procedure for identifying people entitled to compensation

Major


Objective

evidence: Keck Seng estate will refer to the SOP Doc. No: RSPO CRI-1.12 Procedures to handle and respond to the request enquiries from stakeholders’ as the documented procedure for identifying legal and customary rights and a procedure for identifying people entitled to compensation

According to a villager and Keck Seng staff, the estate has been established since 1970s when Keck Seng took over the land that was partly planted with tapioca.

Since then and from the consultant Wild Asia report there are no legal or customary rights issues

6.4.2 A procedure for calculating and distributing fair compensation (monetary or otherwise) is established and implemented. This takes into account gender differences in the power to claim rights, ownership and access to land; and long-established communities; differences in ethnic groups’ proof of legal versus communal ownership of land.

Minor


Objective

evidence: As above, Keck Seng will refer to the SOP Doc. No: RSPO CRI-1.12 Procedures to handle and respond to the request enquiries from stakeholders’ as the documented procedure for calculating and distributing fair compensation

6.4.3 The process and outcome of any compensation claims is documented and made publicly available

Minor


Objective

evidence: Since the establishment, no compensation are claimed by the villages or neighboring estates.

Criterion 6.5: Pay and conditions for employees of contractors always meet at least legal or industry minimum standards and are sufficient to provide decent living wages.

6.5.1 Documented of pay and conditions Major

GP 7003A of 48


Objective

evidence: Workers are provided with a pay slip during payday. It documents the rate, workdays, deductions etc. The payslip is still in English; nevertheless, the estate has translated it to Bahasa Malaysia and placed it on the notice board for the workers to view.

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, reasons for dismissal, period of notice, etc) are available in the language understood by the workers or explained carefully to them by a plantation management official in the operating unit

Minor


Objective

evidence: Keck Seng has records of each employees terms of contract known as ‘ Terms and condition of employment’ that includes

a) personal and particulars details

b) wage rate

c) allowances

d) overtime rate

e) other benefits

f) agreed normal hours of work per day

g) Period of termination

h) No. of days of entitlement – holiday with pay, annual leave pay, medical leave with pay

i) Holidays

j) Duration of wage period – monthly

k) Employee and employer signature

l) Date

Keck Seng has updated the employment form.

6.5.3 Growers and millers provide adequate housing, water supplies, medical, educational and welfare amenities in accordance with Workers’ Minimum Standard of Housing and Amenities Act 1990 (Act 446) or above, where no such public facilities are available or accessible (not applicable to smallholders)

Minor


Objective

evidence: Housing is adequately provided with water supplies, medical, educational and welfare amenities in accordance with Workers’ Minimum Standard of Housing and Amenities Act 1990 (Act 446)

In Johor Masai Linesite, the tall trees are being removed to avoid falling during the rainy season.

In Lim& Lim Estate, repairs is seem to be on-going for some time since the last audit and it still has yet to be completed and there are request by workers Cik Maison (repair of her main door and Cik Lisawati (termite infested doorframe ) whose request for repair a month ago has not been adequately addressed

Workers also have been complaining of the treated water being murky especially during this rainy season

Workers also commented of the prices of foodstuff at the sundry shop within the estate.

Minor 06

Criterion 6.6: The employer respects the right 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 Documented minutes of meetings with main trade unions or workers representatives

Major


Objective

evidence: Documented minutes of meetings with NUPW representatives on 12/11/13 attended by the Keck Seng Staff, NUPW representatives and the workers representatives .

GP 7003A of 48

The following are the worker representatives:

a) Hamzah Talib – Worker Oil Mill

b) Halim Setapa – Oil Mill Driver

c) Khalid Md Zin – Oil Mill Driver

d) Thein Khaing Oo – Myanmar representative

e) Nyein Zaw – Myanmar representative

f) Raju Gaddi – Nepal representatvie

g) Jagdeesh Prasad Kurmi – Nepal representative

6.6.2 A published statement in local languages recognizing freedom of association Minor


Objective

evidence: A published statement in local languages recognizing freedom of association is posted on the notice board

Criterion 6.7: Children are not employed or exploited. Work by children is acceptable on family farms, under adult supervision, and when not interfering with education programmes. Children are not exposed to hazardous working conditions.

6.7.1 Documented evidence that minimum age requirement is met Major


Objective

evidence: Keck Seng has not engaged children below 16 years old. Samples of the employment records (foreign workers) indicate that the workers are well above 16 years of age.

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 Major


Objective

evidence: A publicly available equal opportunities policy (under social policy) is available and posted on the notice board as well as their website.

6.8.2 Evidence that employees and groups including migrant workers have not been discriminated against

Minor


Objective

evidence: Interview with workers show that migrant workers have not been discriminated against as they have same salary for the same job, same housing and benefits.

Criterion 6.9: A policy to prevent sexual harassment and all other forms of violence against women and to protect their reproductive rights is developed and applied.

6.9.1 A policy on sexual harassment and violence and records of implementation Major


Objective

evidence: A policy on sexual harassment and violence is available and in Keck Seng it is included in the ‘Polisi bersosial’ that they are committed to the protection of women against all forms of violence and .

Keck Seng has established a Gender Committee with an organization chart headed by cik Janani ( Oil mill Admin ) as the chairman and Nik Karimah ( Admin Clerk Keck Seng Estate ) as the vice chairman .

Meetings are held twice per year and the latest meeting was on 19/9/13.

However when the 6 female manurers at Lian Huap were interviewed during the muster and they did not know who are the gender committee representatives

Observation 05

6.9.2 A specific grievance mechanism is established Minor

GP 7003A of 48


Objective

evidence: The specific grievance mechanism is established and avaible from the Keck Seng Intranet portal under the section: Principle 6 : Criterion 6.9 SOP Pertubuhan Jantina.

It is in a flowchart .

Criterion 6.10: Growers and mills deal fairly and transparently with smallholders and other local businesses.

6.10.1 Pricing mechanisms for FFB and inputs/services shall be documented Major


Objective

evidence: Pricing mechanism for FFB is documented , available in the contract and displayed at the weighbridge ticket office.

6.10.2 Current and past prices paid for FFB shall be publicly available Minor


Objective

evidence: FFB price is publicly available at their mill’s weighbridge office.

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

Minor


Objective

evidence: The contract for purchase of FFB stated the FFB price calculation, processing charges, extraction rates and etc. One of the contracts dated 01 December with Hong Huat Trading Company was verified.

6.10.4 Agreed payments shall be made in a timely manner Minor


Objective

evidence: Payroll for the estates and mill available for hardcopy and electronic copy. The pay slip stated clearly the details such as KWSP, SOCSO, electricity and etc.

Interview with the employees and contractor confirmed that the payments or salary made in a timely manner.

Criterion 6.11: Growers and millers contribute to local sustainable development wherever appropriate.

6.11.1 Demonstrable contributions to local development that are based on the results of consultation with local communities.

Minor


Objective

evidence: Keck Seng has demonstrable contributions to local development such as:

a) Carnival 1 Malaysia

b) Festival celebration during Hari Raya, Deepavali etc

c) Road Maintenance to the village

d) The dispensary is open to emergency from the villages

e) Providing villages with water tankers during the dry season or when there is a request due to celebration

Principle 7: Responsible Development of New Plantings

The company is only involved in re-planting programme after felling of old palms and there is no plan for expansion.

Principle 8: Commitment to Continuous Improvement in Key Areas of Activity

Criterion 8.1: Growers and millers regularly monitor and review their activities and develop and implement action plans that allow demonstrable continuous improvement in key operations.

GP 7003A of 48

8.1.1 Minimize use of certain pesticides (C 4.6) Major


Objective

evidence: Keck Seng minimize the use of chemical through the implementation of :

a) The planting of beneficial plant

b) Monitoring of the pesticide usage

Usage of herbicide will be limited to the circles , path and unwanted weeds.

Paraquat usage will be monitored and will be confined to certain situation e.g in the nursery due to the proliferation of tough weed like Eluesine indica.

8.1.2 Environmental impacts (C 5.1) Major


Objective

evidence: Keck Seng will continue to maintain the riparian zones, and to minimize erosion through the avoidance of blanket spray.

They will also review their environmental impact and aspect report annually .

The Oil Mill will continue to monitor the usage of fuel as well the use of renewable sources such as fibre and shell to reduce the environmental impact of fossil fuel.

Effluent and river water monitoring will continue as per required by authorities.

8.1.3 Maximizing recycling and minimizing waste or by-products generation Major


Objective

evidence: Recycling is encouraged through the establishment of the recycling bins and annual training on waste management for employees and contractors.

8.1.4 Pollution prevention plans (C 5.6) Major


Objective

evidence: Waste is segregated and scheduled waste is identified stored and will be send to the mill for arranged disposal

Scheduled Waste will be disposed off by the appointment of approved disposal agent.

Oil traps will be maintained at the workshop and where it is found to be absent , oil trap will be constructed especially at the tractor wash area.

Contractors will be made aware of pollution especially the site for their parking of their tractors and vehicles so that it will not contaminate the soil.

8.1.5 Social impacts (C 6.1) Major


Objective

evidence: Keck Seng will continue to organize their yearly stakeholder joint meeting for communication and consultation between growers and/or millers, local communities and other affected or interested parties

They will also continue to maintain their quarterly meeting with the worker representatives to identify areas to improve and to hear the workers request.

Keck Seng will maintain their request and response file for both the external and internal stakeholders.

The Gender committee will meet as per required and will make sure that the female workers are aware of the Gender committee role.

8.1.6 A mechanism to capture the performance and expenditure in social and environmental aspects

Minor


GP 7003A of 48

Objective

evidence: Keck Seng will annually review their budget to capture the performance and expenditure in social and environmental aspects.

In the Keck Seng Intranet portal , for Kota Tinggi Estate, Sin Lian, Lian Huap and Johor Masai, for the 2014 budget, Keck Seng has allocated

a) For Social Expenditure : RM 87,590.00 ( under General charges for all the estates )

b) For Environmental aspects (that include drainage, boundaries and fencing , waste disposal ) : RM170,000.00

The mill and each estate would have their own budget allocation for social and environmental aspects.

3.1.2 Supply Chain

For supply chain, the Masai Palm Oil Mill has decided to use Module E in this assessment. The

findings and objective evidence find during the assessment are outlined in the table below. The results

for each indicator from each of the operational areas were evaluated to provide an assessment of

conformity. A statement is provided for each of the RSPO indicators in order to support the findings of

the assessment team.

Module E – CPO Mills: Mass Balance

Module E

E.1: Documented Procedures

E.1.1 The facility 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. Complete and up to date procedures covering the implementation of all the elements in these requirements

b. The name 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 facilities procedures for the implementation of this standard.

MAJOR


Objective

evidence: The up to date procedures name: Procedure to Handle Certified FFB IN Oil Mill as RSPO Supply Chain Base dated 24 June 2013; revision 2. The procedures covered description of operation’s management system, documented procedures, purchasing and goods in, record keeping, sales and good out, training, processing and claims.

E.1.2 The facility shall have documented procedures for receiving and processing certified and non-certified FFBs.

MAJOR


Objective

evidence: The weighbridge executives will verify and document the volumes of certified and non-certified FFB daily. Record the volume of certified and non-certified FFB received in the POM daily progress report accordingly.

E.2: Purchasing and goods in

E.2.1 The facility shall verify and document the volumes of certified and non-certified FFBs received.

MAJOR


Objective

evidence: The company will verify all volumes of certified palm oil and palm kernel oil available. Administration Department will keep the certified FFB, CPO, and CPKO updating in RSPO daily report.

E.2.2 The facility shall inform the CB immediately if there is a projected overproduction. MAJOR

GP 7003A of 48


Objective

evidence: Keck Seng has the internal monitoring and reporting mechanism for CB of variations of production. Up to date, there is no overproduction.

E.3: Record keeping

E.3.1 The facility shall maintain accurate, complete, up-to-date and accessible records and reports covering all aspects of these requirements.

MAJOR


Objective

evidence: All records are up to date and well maintained:

a. sales contract no: M-KAOJ/MBBRPKO-0613/S1603

b. Daily progress report dated 30 November 2013

c. Purchase contract no: M-FKP/MBCPKO-1113/P2264; Malaysia CPKO MB

d. Weighbridge ticket dated 16 November 2013

E.3.2 Retention times for all records and reports shall be at least five (5) years. MAJOR


Objective

evidence: As stated in the Procedure to Handle Certified FFB IN Oil Mill as RSPO Supply Chain Base dated 24 June 2013; revision 2, clause 7.1.2.4 stated that the record shall be kept at least 5 years.

E.3.3 a. The facility shall record and balance all receipts of RSPO certified FFB and deliveries of RSPO certified CPO, PKO and palm kernel meal on a three-monthly basis.

b. All volumes of palm oil and palm kernel oil that are delivered are deducted from the material accounting system according to conversion ratios stated by RSPO.

c. The facility can only deliver Mass Balance sales from a positive stock. However, a facility is allowed to sell short.

MAJOR


Objective

evidence: The company records and update the accumulated volume of certified and non-certified FFB’s received in the POM daily progress report. The daily progress report have included from daily, monthly to yearly records.

Based on the sales record, the company only delivers Mass Balance sales from a positive stock.

E.3.4 The following trade names should be used and specified in relevant documents, e.g. purchase and sales contracts, e.g. *product name*/MB or Mass Balance. The supply chain model used should be clearly indicated.

MAJOR


Objective

evidence: Based on the sales contract no: M-KAOJ/MBBRPKO-0613/S1603, the trade name and supply chain model are clearly indicated, example: Malaysia RBD Palm Kernel Oil in Bulk (mass balance).

E.3.5 In cases where a mill outsources activities to an independent palm kernel crush, the crush still falls under the responsibility of the mill and does not need to be separately certified. The mill has to ensure that the crush is covered through a signed and enforceable agreement.

MAJOR


Objective

evidence: The company sells the entire palm kernel to their subsidiary company- Ragamo Sdn Bhd for the palm kernel crush process which is certified under RSPO Supply Chain Certification.

E.4: Sales and goods out

E.4.1 The facility shall ensure that all sales invoices issued for RSPO certified products delivered include the following information:

a. The name and address of the buyer;

MAJOR

GP 7003A of 48

b. The date on which the invoice was issued;

c. A description of the product, including the applicable supply chain model (Segregated)

d. The quantity of the products delivered;

e. Reference to related transport documentation


Objective

evidence: Based on the sales contract no: M-KAOJ/MBBRPKO-0613/S1603 has been sampled and the information as below:

a. Kao Corporation

b. 11th

June 2013

c. Malaysia RBD Palm Kernel Oil in Bulk (mass balance)

d. 500 Metric Tons

e. Export K2 form J39206000254 dated 24/06/2013

E.5: Training

E.5.1 The facility shall provide the training for all staff as required to implement the requirements of the Supply Chain Certification Systems.

MAJOR


Objective

evidence: The company did not provide the training for all relevant staff although the procedures are in place.

Major : 07

E.6: Claims

E.6.1 The facility shall only make claims regarding the use of or support of RSPO certified palm oil that are in compliance with the RSPO Rules for Communication and Claims.

MAJOR


Objective

evidence: Up to date, no claim has been made by Keck Seng (M) Berhad.

3.2 Corrective Action Request

There are total of 3 Major and 4 Minor were raised. Please refer to the Appendix A for the

details findings and relevant correction actions have been taken.

3.3 Status of Non-Conformities Previously Identified

Please refer to Appendix B for the previous audit. Relevant NCR already closed accordingly.

3.4 Issues Raised by Stakeholders and Findings

A list of stakeholders contacted and their comments are included as Appendix D

GP 7003A of 48

4. ACKNOWLEDGEMENT OF ORGANIZATION INTERNAL RESPONSIBILITY

4.1 Date of Next Surveillance Visit

The next surveillance audit is planned before on November, 2014

4.2 Date of Closing Non-Conformities

Reference Class Issued Close

MA Minor CAR 05 Minor 13/10/11 2/12/13

4.3 Acknowledgement of Internal Responsibility and Formal Sign-off Assessment Findings

SGS Malaysia acknowledges and confirms acceptance of the Report contents and including the

assessment findings. SGS Malaysia accepts the responsibility for addressing the opportunities

of improvement detailed in this report.

Signed on behalf of SGS Malaysia Sdn Bhd Signed on behalf of Keck Seng ( Malaysia ) Bhd

Date: 18 Dec 2013

SGS RSPO




Page: 40 of 48




WWW.SGS.COM

APPENDIX A: CORRECTIVE ACTION REQUEST & OBSERVATION

CAR # Indicator CAR Detail

Minor

01

4.1.2 Date

Recorded> 2/12/13

Due

Date> 2/12/14

Date

Closed>

Non-Conformance:

Records of monitoring and the actions taken were not maintained and kept for a minimum of 12

months

Objective Evidence:

Records of monitoring and the actions taken are still not established

Minor 01

Close-out evidence:

Minor

02

4.5.2 Date

Recorded> 2/12/13

Due

Date> 2/12/14

Date

Closed>

Non-Conformance:

Monitoring extent of IPM implementation for major pests was not done according to SOP

Objective Evidence:

However although , in the EST-SOP-10 for rat control document that baiting to cease when fresh damage falls below 5 % , the census record show that baiting ceased before it was brought down to 5 % e.g . in Johor Masai

Field Before baiting % Last Baiting %

3 15.27%

Date: 12/1/13

8.54%

Date : 27/3/13

4 17.29%

Date : 13/1/13

15.27%

Date : 28/3/13

Minor 02

Close-out evidence:

Major

03

4.6.3 Date

Recorded> 2,3/12/13

Due

Date> 2/02/14

Date

Closed> 15/12/13

Non-Conformance:

Pesticides were not stored in accordance to the Occupational Safety and Health Act 1994 (Act

514) and Regulations and Orders and Pesticides Act 1974 (Act 149) and Regulations

Objective Evidence:

GP 7003A of 48


However at Oil Palm Nursery store, products were not stored properly, unlable chemicals were removed from their original packing, empty packaging were strewn on the floor instead of disposing it in a proper manner, no water source nearby in case of emergency, emergency response procedure was lacking , no spill kit sighted and no information like MSDS available.

Although the estate advocated triple rinsing and puncturing of the empty chemical containers, yet it was found that in the empty chemical container site, both the triple rinsed and non-triple rinsed containers are kept alongside.

In Lim& Lim, empty containers and half used agrochemical are found on the tractors at the workshop, at the contractor shed, in the lubricant store instead of being stored in an appropriate site. The shed used to store the empty container may not be safe as some of its pillars are termite infested.

Spill kit was also absent at the Lim & Lim Chemical store, and in the lubricant store.

Major 03

Close-out evidence:

New schedule waste store is established.

All empty chemical containers was doing the triple rinsed container and will disposing by registered company as soon.

Spill kit at Lim & Lim chemical store and lubricant store are available.

No empty container and half user agrochemical at the tractor, workshop, the contractor shed and lubricant store.

Major

04

4.7.1 Date

Recorded> 2,3/12/13 Due Date> 2/2/14 Date Closed> 15/12/13

Non-Conformance:

Evidence of documented Occupational Safety Health (OSH) plan were not implemented is in

compliance with OSH Act 1994 and Factory and Machinery Act 1967 (Act 139)

Objective Evidence:

a) Although there is awareness and training programme for the safe use of chemical , the use of PPE are found in their 2013 training programme yet Mandore Yusni and worker Irwan at the oil palm nursery and the new storekeeper ,Sharizan at Lim & Lim they were not using their gloves or face mask when entering the workarea that require appropriate PPE

b) During the Muster at Keck Seng Estate, the workers are found to be using the appropriate PPE for their job. Some of the company provided PPE seen are: Helmet, gloves, mask , boots, sickle protector . Nevertheless , 2 sickle pole placed on the floor beside the fogging store were found to be without the sheath protector

c) Accident and emergency procedures: Not available at the Keck Seng main chemical store and in Lim & Lim chemical store.

d) First aid kit is handled by the field staff and also the harvesting contractor mandores. However the harvesting contractor ,Mr Zubir first aid kit ,was not replenished

e) At the Lim& Lim, no proper shower area was provided for the sprayers . Cik Maisom, a weeder ,when interviewed mentioned that she would take shower at home after her weeding operation .This goes the same for the manurer, Cik Lisawati, .

f) Hosptal Assistant do not have the latest list of the MSDS of the chemical used by the estates

Major 04

Close-out evidence:

GP 7003A of 48


Awareness and training programme for the safety usage of chemical, the use of PPE are Mandore Yusni and worker Irwan at the oil palm nursery will provided on January 2014.

For Lim & Lim chemical store, The PPE box is established and the people need to wear PPE when entering into chemical store. Refer an attachment below

Accident and emergency procedures: available at the Keck Seng main chemical store and in Lim & Lim chemical store.

Complete First Aid kit are distribute to all mandor and staff.

At Lim&Lim, The shower area was upgrading and will implementation into the sprayers started from middle of December 2013. No sprayer take shower at home after working.( In progress)

Major Close Out

Minor

05

5.3.2 Date

Recorded> 2/12/13

Due

Date> 2/12/14

Date

Closed>

Non-Conformance:

Having identified wastes and pollutants, an operational plan should be developed but was not

implemented to avoid or reduce pollution

Objective Evidence:

However empty chemical containers have yet to be disposed off. The estate also uses the 20 lit for their pre-mix

At the contractor site, vehicles are parked there and oil stain is found to have contaminated the ground.

There are containers of used oil at the site. There is an abandoned excavator near the ‘Ah Hock’ housing site and oil form the excavator is contaminating the soil.

At Lim & Lim workshop, the ground is not concrete and there are no oil tray placed below the vehicles.

At Lim & Lim and the Keck Seng Estate tractor wash area, no sedimentation pond or oil trap been constructed to trap soil and oil.

At the contractor line site, discarded oil filter, TV console and other waste material are thrown into the frond heap

Minor 05

Close-out evidence:

Minor

06

6.5.3 Date

Recorded> 3/12/13

Due

Date> 3/12/14

Date

Closed>

Non-Conformance:

Growers and millers did not provide adequate housing, water supplies, medical, educational and

welfare amenities in accordance with Workers’ Minimum Standard of Housing and Amenities

Act 1990 (Act 446) or above, where no such public facilities are available or accessible (not

applicable to smallholders)

Objective Evidence:

GP 7003A of 48


In Lim& Lim Estate, repairs is seem to be on-going for some time since the last audit and it still has yet to be completed and there are request by workers Cik Maison (repair of her main door and Cik Lisawati (termite infested doorframe ) whose request for repair a month ago has not been adequately addressed

Workers also have been complaining of the treated water being murky especially during this rainy season

Workers also commented of the prices of foodstuff at the sundry shop within the estate.

Minor 06

Close-out evidence:

For the Supply Chain

Major

07

E 5.1 Date

Recorded> 2/12/13

Due

Date> 2/02/14

Date

Closed> 16/12/13

Non-Conformance:

The facility did not provide the training for all staff as required to implement the requirements of the Supply Chain Certification Systems.

Objective Evidence:

The company did not provide the training for all relevant staff although the procedures are in place.

Major 07

Close-out evidence:

A training session on the Procedure to Handle Certified FFB in Oil Mill As RSPO Supply Chain Base – Document number- RSPO-SC-01 Revision 02 already held in 11/12/2013. The person involved included Mill Managers, Factory Administration Executives, Weighbridge Executives, Factory Purchasing Executives and Operation Department Executives.

OBSERVATIONS

OBS # Indicator Observation Detail

Obs 01 4.4.7 Date

Recorded> 2,3/12/13

Due

Date>

Date

Closed>

Non-Conformance:

Evidence of water management plans are incomplete

Objective Evidence:

However, the estate has not monitored the domestic water usage.

Observation 01

Close-out evidence:

Obs 02 4.6.4 Date

Recorded> 2/12/13

Due

Date>

Date

Closed>

Non-Conformance:

GP 7003A of 48


Some information regarding the chemicals and its usage, hazards, trade and generic names

must be available in language understood by workers or explained carefully to them by a

plantation management official at operating unit level but were not available

Objective Evidence:

However, in the fogging equipment store, where Malathion and Sumithion is also stored, no MSDS was found ( although found in the main store )

Observations 02

Close-out evidence:

Obs 03 4.6.7 Date

Recorded> 3/12/13

Due

Date>

Date

Closed>

Non-Conformance:

Documentary evidence that use of chemical categorized as World Health Organization Type

1A or 1B, or listed by the Stockholm or Rotterdam Conventions and paraquat, is reduced

and/or eliminated. Adoption of suitable economic alternative to paraquat as suggested by the

EB pending outcome of the RSPO study on IWM was incomplete

Objective Evidence:

Although it was generally reported that the estates have ceased using paraquat since 2011, however in the Lim & Lim Oil Palm Nursery , paraquat is found in the store and still used as a cocktail spray to control some tough weeds like Eluesine indica.

Observation 03

Close-out evidence:

Observation Detail

Obs 04 4.7.2 Date

Recorded> 3/12/13

Due

Date>

Date

Closed>

Non-Conformance:

No LTA records kept of all accidents and periodically reviewed at quarterly intervals

At the dispensary, the Hospital Assistant, Mr Kirubakaran has recorded the month the frequency of each type of injury and accident for both the mill as well as the estate in a graph, however no LTA records are available

Observation 04

Close-out evidence:

Obs 05 6.9.1 Date

Recorded> 3/12/13

Due

Date>

Date

Closed>

Non-Conformance:

A policy on sexual harassment and violence and records of implementation but workers were

uaware

Objective Evidence:

GP 7003A of 48


A policy on sexual harassment and violence is available and in Keck Seng it is included in the ‘Polisi bersosial’ that they are committed to the protection of women against all forms of violence and .

Keck Seng has established a Gender Committee with an organization chart headed by cik Janani ( Oil mill Admin ) as the chairman and Nik Karimah ( Admin Clerk Keck Seng Estate ) as the vice chairman .

Meetings are held twice per year and the latest meeting was on 19/9/13.

However when the 6 female manurers at Lian Huap were interviewed during the muster and they did not know who are the gender committee representatives

Observation 05

Close-out evidence:

SGS RSPO




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APPENDIX B: NON-COMFORMITIES PREVIOUSLY IDENTIFIED


Minor

05

4.2.2 Date

Recorded> 13/10/11

Due

Date> Next surv

Date

Closed> 2/12/13

Non-Conformance:

Lack of periodic tissue and soil sampling being carried out to monitor changes in nutrient

status.

Objective Evidence:

Close out Visit:

In order to address the Minor CAR issued, Keck Seng has taken action to conduct the

monitoring of nutrient status through periodic soil sampling. However, the analysis is

not conducted in all estates within Keck Seng management and hence the Minor CAR

05 remained outstanding

Close-out evidence:

Documented evidence were shown during the Surv 01 audit that confirm that the soil

analysis has already been carried out by the consultant PSA Sdn Bhd

In view o fthe evidence , Minor CAR 05 from the MA is closed

SGS RSPO




Page: 47 of 48




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APPENDIX C: TIME BOUND PLAN

Not applicable as Keck Seng ( Malaysia ) Bhd do not have any other certifying units

SGS RSPO




Page: 48 of 48




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APPENDIX D: LIST OF STAKEHOLDER CONTACTED

Type of

Stakeholder

Issues raised Comments from

the management,

if any

Female Manurers-

Jumenah, Erliwati,

Noraini, Rohanah,

Samiah, Adibah

Internal female

workers

Water quality,

price of things at

the shop

Will be looking it to

it on how to

monitor the water

quality and the

prices form the

shop

Mr Cher Ah Watt Harvesting

Contractor

Why the need of

helmet during

harvesting

Saadiah Surip – wife

of Wakil Desa

Pinggitan

External - villager No land disputes

with Keck Seng.

40 years at

location

Mr Raman External - villager No land disputes

with Keck Seng.

En Ahmadiah

Sarakani – Ketua

Cawangan Umno Kg

Pengerang

External – villager No land disputes

with Keck Seng.

Has requested

water during a

recent khenduri

Chin Swee Siong Harvesting

Contractor

No complain on

Keck Seng

payment

Cik Maisom- Lim &

Lim Weeder

Internal No problem with

water or

electricity. Only

problem was the

slow response to

repairs – door

repair

Cik Lisawati Lim &

Lim Manurer

Internal female

workers

No problem with

water or

electricity. Only

problem was the

slow response to

repairs - termite

infested

doorframe