rspo principles & criteria certification report public ... · no. 26, jalan anggerik vanilla,...

SGS RSPO

(Principles & Criteria)

Doc. Number: GP 7003A

Doc. Version date: 01 September 2012

Page: 1 of 63

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: MY 02024 Certificate No.: SGS-RSPO/PM-00715

Validity Period: 29/03/2011 – 28/03/2016

Report Ref. No.: MY02024-SOU 24 Hadapan ASA 03 Report

RSPO Membership

No.: 1-0008-04-000-00

Client Name: Sime Darby Plantation Sdn. Bhd. – Strategic Operating Unit (SOU) 24 - Hadapan

Website: www.simedarbyplantation.com

Scope: Receiving and processing of RSPO certified Fresh Fruit Bunches (FFB) from its supply base, production and sales of RSPO certified Crude Palm Oil (CPO) and Palm Kernel (PK) under Module D (CPO Mill: Segregation) of RSPO Supply Chain and RSPO MY-NI standard

Type of Certificate

Holder: INDIVIDUAL

Number of Mill: 1 Number of Sites: 1

Mill Capacity: 60MT/Hr

Annual CPO

Produced (MT):

FY2012/2013

48,389.654

Address:

Street and number:

Town/City

State/Country

Zip/Postal code

Country

Head Office

Sime Darby Plantation Sdn Bhd

Main Tower, Level 3A, Plantation Tower,

No. 2, PJU 1A/7, Ara Damansara,

47301 Petaling Jaya, Selangor

Mill Address

Kilang Kelapa Sawit (KKS) Hadapan,

Batu 6, Jalan Bukit Permai, Bukit Permai,

81850, Layang-Layang, Johor

Tel: 012 779 2755

Email: [email protected]

Contact Person:

Sabarinah Marzuky

Assistant Vice President I

Tel: 03 7848 4388


Contact Person (Mill Manager)

Name: Abdul Halim Shahor

Position: Mill Manager (Hadapan)

Contact: 012-617 6405


Country: Malaysia

Plantation Unit

Being Evaluated:

Supply Base Name & Address

1. Kulai Estate, 81000, Kulai, Johor

2. Seri Pulai Estate, 81000, Kulai, Johor

3. CEP Renggam Estate, 86309, Renggam, Johor

4. Layang Estate, 81850, Layang-Layang, Selangor

Total Certified Area

(Ha):

11,375.84

Total FFB

Produced (MT):

223,226.2

Evaluation Date:

Main Assessment 15-18 December 2008

ASA 01 13 to 17 February 2012

ASA 02 12 to 14 March 2013

http://www.simedarbyplantation.com/

mailto:[email protected]



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ASA 03 07-09 January 2014

ASA 04

End of Public Summary

TABLE OF CONTENTS

Contents SUMMARY ............................................................................................................................................................... 4

list of Abbreviation ................................................................................................................................................. 5

1. scope of certification assessment ......................................................................................................... 6

1.1 National Interpretation Used ..................................................................................................................... 6

1.2 Certification Scope .................................................................................................................................... 6

1.3 Location and Maps .................................................................................................................................... 6

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 Date of Next Surveillance Visit ................................................................................................................ 14

3. assessment findings .............................................................................................................................. 15

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

3.1.1 Principles & Criteria .....................................................................................................................15

3.1.2 Supply Chain (Module D) .............................................................................................................45

3.2 Acknowledgement of Internal Responsibility and Formal Sign-off Assessment Findings ....................... 48

LIST OF TABLES

Table 1: Mill GPS Location ................................................................................................................................... 6

Table 2: Budgeted Yield from Supply Base (Financial Year) ............................................................................ 10

Table 3: Planting Age Profiles for all Supply Base Estates ............................................................................... 10

Table 4: Area Statement of the Supplying Estates ............................................................................................ 12

Table 5: Assessment Program .......................................................................................................................... 13

Table 6: Auditors Profile ..................................................................................................................................... 14

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LIST OF FIGURES

Figure 1: Location Map for Sime Darby Hadapan - SOU 24 ............................................................................... 7

Figure 2: Estates and Mills Location Map ............................................................................................................ 8

Figure 3: Regional Satellite Imagery Map for SOU 24 ........................................................................................ 9

LIST OF APPENDICES

APPENDIX A: CORRECTIVE ACTION REQUEST ............................................................................................... 49

APPENDIX B: OBSERVATIONS ........................................................................................................................... 59

APPENDIX C: TIMEBOUND PLAN ....................................................................................................................... 62

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SUMMARY

The recent merger of Sime Darby Berhad, Golden Hope Plantations Berhad and Kumpulan Guthrie Berhad which

was completed on November 27, 2007, establishes Sime Darby Plantation Sdn Bhd. Sime Darby Plantation Sdn

Bhd represents one of the five core Divisions of Sime Darby Group and is involved in the following:-

Oil palm cultivation

Agribusiness & Food

Research & Development

The Plantation Division spans across Peninsular Malaysia, Sabah and Sarawak in Malaysia and Kalimantan,

Sumatera and Sulawesi in Indonesia representing a total of 524,626 hectares of planted oil palm. The operations

involve the management of 208 estates and 65 mills.

The Division’s downstream operations are represented in 15 countries namely: Malaysia, Singapore, Thailand,

Vietnam, Japan, China, Germany, United Kingdom, Bangladesh, South Africa, United Arab Emirates, The

Netherlands, Brazil, Canada and the United States of America.

Alongside oil palm, plantation division is also involved in agri-business activities and cultivation of rubber. As an

integrated oil palm company, Sime Darby Plantation’s business activities cover the whole spectrum of the value

chain. Committed to sustainable development, the Company’s Upstream and Downstream activities adhere

strictly to industry-proven Best Agricultural Practices.

In keeping with the aspiration of making a sustainable future real for everyone, Sime Darby Plantation Sdn Bhd

claims to makes a conscious and concerted effort towards conservation and protection of the environment, the

rehabilitation of forests, protection of wildlife and promotion of the well-being of the communities in which it

operates.

The Strategic Operating Unit, SOU 24- Hadapan comprises of the Hadapan Palm Oil Mill and four supplying

estates , Layang Estate, Seri Pulai Estate, Kulai Estate and CEP Rengam Estate. The Oil Mill occasionally

receive FFB from other Sime Darby Estates e.g. SOU 23 – Ulu Remis.

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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

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 Hadapan 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

Hadapan Palm Oil Mill is located in Layang-Layang, Johor, Malaysia (Figure 1). The mill is

grouped under one strategic operating unit, SOU 24 with four (4) supplying estates which is

directly managed by Sime Darby Plantation Sdn. Bhd. 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 Supply Base GPS Location

Mill/Supply Base Longitude Latitude

Hadapan Oil Mill 103028’ 07.36”E 1

046’ 50.22”N

Layang Estate 103039’26.7”E 1

024’ 55.9”N

Seri Pulai Estate 103050’ 09.64”E 1

059’ 32”N

Kulai Estate 103032’43.37’’E 1

039’54.79”N

CEP Renggam Estate 103022’ 37.5”E 1

052’ 19.1”N

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Figure 1: Location Map for Sime Darby Hadapan - SOU 24

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Figure 2: Estates and Mills Location Map

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Figure 3: Regional Satellite Imagery Map for SOU 24

1.4 Description of Supply Base and Mill Processing Capacity

The FFB is sourced from four (4) which is directly managed by Sime Darby Plantation Sdn.

Bhd. The budgeted crop yields from each estate are listed in Table 2 below.

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Table 2: Budgeted Yield from Supply Base (2013/2014)

Name of estate

Plantation area Annual FFB

Production (MT)

Production

(ha)

Conservation

(ha)

Layang Estate 2753.08 0 55642.63

Seri Pulai Estate 1915.26 91.62 46409.76

Kulai Estate 2173.46 0 42809.92

CEP Renggam Estate 2,674.39 0 66,428.72

Total 9516.19 91.62 211,291.03

Table 3: Mill Processing Data (2012/2013)

Financial Year

(2012/2013)

Mill Production Figures (MT) (Audited Estate)

FFBs Received FFBs Processed CPOs Produced PKs Produced

Certified Crop 223,226.2 222,990.94 48,389.654 12,256.557

Outside Crop 0 0 0 0

Total 223,226.2 222,990.94 48,389.654 12,256.557

1.5 Date of Planting and Cycle

The SOU 24, Hadapan, of Sime Darby Plantation Sdn Bhd estates were planted since

1960s.The palms ware considered matured when approaching four (4) years after planting and

productive until the age of 25 years. A replanting program for all estates involved are available

and being projected for the next five (5) financial years (FY 13/14 to FY 17/18). The age profiles

for all the estates are simplified in Table 4 below.

Table 4: Planting Age Profiles for all Supply Base Estates

Name of supplying

estate

Planting Age (Ha)

Immature >4 - 14 years >14 - 25 years >25 years

Layang 307.55 2044.33 401.20 0

Seri Pulai 95.62 913.55 906.09 0

Kulai 575.60 937.75 912.52 323.19

CEP Renggam 198.68 1163.77 1525.62 0

Total 1177.45 5059.40 3472.43 323.19

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1.6 Other Certification Held

The current verification exercise is undertaken only for SOU 23, Hadapan, Layang-layang, Johor. Sime Darby owns and operates 65 palm oil mills for processing FFB from its 208 oil palm estates located in Malaysia and Indonesia. The company has divided the estates and mills into Strategic Operation Units (SOU) as part of its approach towards meeting the requirements for certification under RSPO. In total, the company manages 59 SOUs.

Currently, a total of 55 SOUs have been certified under RSPO of which 34 are located in Malaysia and the remaining 21 is located in Indonesia. The remaining 4 SOUs which located in Indonesia are in the process of getting certified under RSPO.

1.7 Organizational Information and Contact Person

The company contact person details are as follows:

Name: Sabarinah Marzuky

Designation: VP II (In-charge)

Address: PSQM Level 3A, Main Block

Plantation Tower Ara Damansara

Contact No.:

Tel:

Fax:

03-7848 4388

03-7848 4356

Email address: [email protected]

1.8 Time-bound Plan for Other Management Units

Sime Darby Plantations Sdn. Bhd. is a member of RSPO and has been involved in the

certification since 2004; the membership number with RSPO is 1-0008-04-000-00.

Sime Darby Plantations owns and operates 59 SOUs covering approximately 500,000ha

operating in both Malaysia and Indonesia. Sime Darby Plantation Sdn. Bhd. has developed a

time-bound plan (Appendix C) for the phased implementation of the RSPO P&C, commencing

with mills and estates. Sime Darby Plantation Sdn. Bhd. will use the experience gained from

achieving certification of the first few mills and estates to implement the RSPO P&C in parallel

with the remainder of its operations. The SGS assessment team considers that Sime Darby

Plantations Sdn. Bhd. is on the right track which is reasonable and challenging, given the

widespread geographic locations of its properties, the resources required and the numbers of

smallholders involved.

1.9 Area of Plantation

The areas of supplying estates for this operating unit are listed in Table 5. Details of production

area (mature/immature) are also listed.


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Table 5: Area Statement of the Supplying Estates

Name of supplying estate

Estates Area (Ha)

Immature Mature Area Non-Cultivated Total (Ha)

Layang 307.55 2445.53 341.49 3094.57

Seri Pulai Estate 95.62 1819.64 185.76 2101.02

Kulai Estate 575.60 2173.46 315.58 3064.64

Ldg CEP Rengam 198.68 2,674.39 205.63 3,078.70

Total 1177.45 9113.02 1048.46 11338.93

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 Receiving and processing of RSPO certified Fresh Fruit Bunches

(FFB) from its supply base, production and sales of RSPO certified Crude Palm Oil (CPO)

and Palm Kernel (PK) under Module D (CPO Mill: Segregation) of RSPO Supply Chain and

RSPO MY-NI standard

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

The assessment was conducted in three audit days and involving two (2) estates of Sime

Darby Plantations Sdn. 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.

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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 6 below.

Table 6: Assessment Program

Date Location Activities

07 Jan 2014 CEP Renggam

Estate

Opening Meeting:

Introduction of the Assessment Team

Briefing on Surveillance Audit

Field Scheduling

Documentation Review:

Review of Estate Documentation

(Management and Operations) of CEP

Renggam Estate

Field Visit in CEP Renggam Estate

Fertilizer application;

Inspection on Safety and Health aspects;

Spraying;

Harvesting;

Visit to landfill;

Bufferzone;

Protected areas;

Line sites;

Storage facilities;

Warehouse; and

Workshops

Interview with:

Workers;

Gender Committee;

Unions; and

Medical Assistance.

08 Jan 2014 Kulai Estate



(Management and Operations) of Kulai

Estate

Field Visit in Kulai Estate Estate

Fertilizer application;

Inspection on Safety and Health aspects;

Spraying;

Harvesting;

Visit to landfill;

Bufferzone;

Protected areas;

Line sites;

Storage facilities;

Warehouse; and

Workshops

Interview with:

Workers;

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Gender Committee;

Unions; and

Medical Assistance.

09 Jan 2014 Hadapan POM



(Management and Operations) of Hadapan

POM;

Supply Chain Audit at POM

Field Visit in the POM

Storage facilities;

Workshop; and

Inspection on Safety and Health aspects.

Interview with:

Workers;

Gender Committee; and

Unions.

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

7 below.

Table 7: Auditors Profile

Evaluation Team Notes

Team Leader –

Plantation &

Safety and

Health

Abdul Haye Semail, a degree holder in B.Sc. is a forester by profession and

has 15 years experience in forest harvesting and plywood industry. As a

trained assessor, he has been involved in forest management, palm oil and

chain of custody certification for the last 7 years. Trained by RSPO for

auditing against RSPO P&C and involved in a number of plantation

assessments and inspection of palm oil mill.

Auditor 1 –

Environment and

Social

Mohd Faisal Jaafar, is a degree holder in forestry from Universiti Putra

Malaysia. Faisal has a 7 years experience in operating Malaysian Timber

Certification Scheme with specialization in forest management certification

and forest plantation management certification. As a qualified Forest

Management Certification auditor, he involved mainly auditing environmental

and social as well as safety and health. Has undergone the necessary RSPO

Lead Auditor Training Course and ISO 14000 Lead Auditor course and has

gathered substantial auditing experience pertaining to RSPO since 2012.

2.4 Date of Next Surveillance Visit

The next surveillance audit is planned within 12 months from the date of the audit for 2014.

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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.

The Surveillance Audit has resulted in the issuance of Three (3) Major Corrective Action Requests

(CARs) and One (1) Minor CAR. However, the 3 Major CAR has been closed-out on 10 March 2014

following evidence submitted by the client. Some areas identified with potential areas for improvement

has leaded into One (1) Observation raised. Details for each CARs and observations are given in

Appendix C. Major CARs 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 date of this

audit.

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:

There is no request for information from stakeholders yet received by the estate. However, record of stakeholder meeting is available. Latest meeting with stakeholder conducted on 24

th February 2013. A minute of the Meeting is available and found to be conducted based on

the SOP. Observed that the forthcoming meeting i.e. for 2014 to be conducted in March 2014. Records and communication log, both internal and external are maintained and recorded in file

named Principle 1: Commitment to Transparency.

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)


Objective

evidence:

Non-confidential documents are available upon request by legitimate stakeholders. Observed that

the documents are recorded in file named Principle 1: Commitment to Transparency.

The documents that are available to the stakeholders upon request are listed below:

Land titles / user rights

Estate Map complete with identified boundary stone

Safety and health policy and plan

Environmental Impact Assessment

Social Impact Assessment

Procedures for handling boundaries disputes dated 01 November 2008

Procedures for handling squatters disputes dated 01 November 2008

Procedure for handling social issues dated 01 November 2008

Continuous improvement plan

In addition, other non-confidential document are also be made available on the company’s

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website such as:

Peatland Planting Policy;

Zero Burning Technique during Replanting ;

Saving Orang Utan Policy;

Environment and Biodiversity Policy;

Social Policy;

Occupational, Safety & Health Policy;

Slope & River Protection Policy;

Gender Policy;

Social Assessment;

Waste Utilization Improvements;

Integrated Pest Managements; and

Negotiations Procedures.

All of the above documents are available in the website (URL Link:

http://www.simedarbyplantation.com/Sustainability.aspx )

1.2.2 Safety and health plan (C 4.7)


Objective

evidence: Refer to 1.2.1

1.2.3 Plans and impact assessment relating to environmental and social impacts

(C 5.1, 6.1, 7.1, 7.3)


Objective


1.2.4 Pollution Prevention Plan (C 5.6)


Objective


1.2.5 Details of complaints and Grievances (C 6.3)


Objective


1.2.6 Negotiation procedures (C 6.4)


Objective


1.2.7 Continuous improvement plan (C 8.1)


Objective


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:

Both estates have compiled a list of Legal and Other Requirements Register (LORR). The list was updated and approved by the respective estates managers with the updated approval were made on October 2013. The list covers legal requirements such as: OSHA

http://www.simedarbyplantation.com/Sustainability.aspx

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Environmental Quality Act 1974 Factories and Machineries Act, 1967 Uniform Building by Laws 1986 Pesticides Act 1974 Electrical Supply Act 1990 Petroleum Safety Measures 1984 Fire Services Act 1984 Code of Practice for Safe Working in a Confines Space 2001 Local Government Act 1976 Workers Minimum Standards of Housing and Amenities Act 1990 Employment Act 1955 Employee Provident Fund Act 1991 Employees Social Security Act 1969 Trade Unions Act 1959 Minimum Retirement Age Act 2012 National Wage Consultative Council Act 2011, Minimum Wage Order 2012 Weights and Measures Act 1972

At the time of surveillance visit, the audit team observed that copies of legal documents are available with the compilation of a list of applicable laws and regulations at both mill and estate levels. All necessary renewable permits pertaining to crop production and milling are in place and displayed in the form of certificates in the estates and mill. Legal requirements for machinery maintenance and power generation have also been complied with.

Examples of files/legal documents/licenses verified during the Surveillance Audit are as follows:

Air Compressor Certificate issued by Department of Occupational Safety and Health (DOSH) in accordance with Factories and Machineries Act 1967;

o CEPE REnggam Estate - PMT-JH 68270 with a validity until 01 April 2014;

o Kulai Estate – PMT-JH 65795 with a validity until 10 April 2014;

Land title for Estates are available as follows:

o CEP Renggam Estate – list of land titles are available via Quit Rent that showed the total area belongs or under the management of company totalling to 3,093.38 ha

o Kulai Estate – list of land titles are found to be kept in Land Title file that showed the total area belongs or under the management of the company totalling to 3,064.64 ha

MPOB licence 510425004000 (01 March 2013 to 28 February 2014) for 210,000 MT

DOE license for holding and operating the premis no. 002167 dated 27 June 2008 – expired on 30 June 2014

DOE for Land Irrigation (Alur air, Pengairan Ladang ) 1/7/2013 – 30 June 2014)

Land title for Palm Oil Mill Country Lease (CL) No. H.S. (D) 12845 dated 28 April 1975 is available.

In addition, several other licenses observed at the mill are as follows:

Boiler license no. as follows:

o Boiler 1 – No. PMD-JH 7697 with a validity until 29 July 2014; o Boiler 2 - No. PMD-JH 7337 with a validity until 24 May 2014; o Steam Receiver – No. PMT-JH 77621 with a validity until 29 July 2014; o Steam Separator - No. PMT-JH 77614 with a validity until 29 July 2014; o Air Compressor - No. PMT-JH 80291 with a validity until 23 October 2014;

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


Objective

evidence:

Evidence of documented system, which includes written information on legal requirements. Sime Darby subscribes to free service for amendments updates from publishers. All relevant laws and regulations are compiled in the register of legal document - QSHE/04/5.2.4 and are made available to the auditor during the audit.

2.1.3 A mechanism for ensuring that they are implemented Minor


Objective

evidence:

Mechanism for ensuring that the laws are implemented is available. The mechanism to ensure compliance of law is found to be documented in Agricultural Reference Manual (ARM) which has been distributed to the SOU and is implemented throughout the Mill as well as the four estates. As reflected in the Standard Operating Manual, the management of estate and mill is required to

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ensure that all applicable legal requirements and other requirements to which the company is subscribe are taken into account that includes monitoring the changes of the subscribed laws and regulations. The same personnel are also responsible to ensure that the mechanism is implemented throughout the estate.

2.1.4 A system for tracking any changes in the law Minor


Objective

evidence:

A system for tracking any changes in the law is available. Sime Darby has developed procedures for tracking any changes in laws. Document Standard Operating Manual 5.2 (5.2.4a) assigns responsibility for observing changes of law. As reflected in the document, the management of estate and mill is required to ensure that all applicable legal requirements and other requirements to which the company is subscribe are taken into account that includes monitoring the changes of the subscribed laws and regulations.

The company also subscribes to service for updated law books from publishers, and receives information on relevant legal amendments from Malaysian Agricultural Plantation Association.

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: Land title for Estates visited during the audit are available as follows:

o CEPE REnggam Estate - PMT-JH 68270 with a validity until 01 April 2014;

o Kulai Estate – PMT-JH 65795 with validity until 10 April 2014.

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: Based on the above findings, the audit team confirmed that all of the land titles are for agricultural crops such as Palm Oil, Rubber and/or any agricultural crops of economic value. None of the land titles observed carries a title other than agricultural crops i.e. forested areas.

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: Overall, the auditor observed that the estates occupation and operation comply with the terms of the land title. All estates have their boundary marked with boundary markers.

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 is no dispute reported at the time of audit. SOU 24 estates is bordering with other Sime Darby Plantation estate under SOU 23.

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:

There is no dispute reported at the time of audit.

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


Objective

evidence:

There is no dispute reported at the time of audit.

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

GP 7003A of 63


Objective

evidence:

There is no dispute reported at the time of audit. However, the procedure for negotiation is made publicly available in the company website at:

http://www.simedarbyplantation.com/Boundary_Disputes_.aspx

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:

Annual budget for all visiting estates for a period of 5 years (until FY2017/2018) cost comparison

is available. The report is found to be kept in documented file Principle 3: Commitment to long

term economic and financial viability under the specific section namely Report: E11.0 Estate Cost. Among details highlighted in the document are as follows: Administration; Labour and Workers; Crop upkeep; Replanting Programme; Environmental Aspects.

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


Objective

evidence:

Replanting programme is available for all individual estates. A minimum 5 year replanting programme is available for all estates.

Details of Replanting Programme (5 years period) for the visited supplying estates are as follows:

Estate 2014/15 2015/16 2016/2017 2017/2018 2018/2019

CEP Renggam

237.05 215.80 133.99 - -

Kulai/Kelan 121.40 294.46 291.01 211.44 247.19

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:

Evidence of documented procedure is available during the audit. The Agricultural Reference Manual (ARM) for Oil Palm estates is available and issued on 1 July 2011. A procedure for Plantation Quality Management System is also available dated 1 November 2008 which contains the procedure for: a) Policy and Objectives b) Organizational Structure c) Documentation and Communication d) General Information (Land use, History, Location) e) Planning f) Quality, Safety & Health and Environmental Management g) Implementation and Control The unit will follow the following documentation as their SOP: a) Agricultural Reference Manual – Guideline for work b) Standard Operating Manual c) EQMS Standard Operation Procedure d) Sustainable Plantation Management System e) Pictorial Safety Standard These copies are marked as the ‘Control Copy’. Separate copies are reported to be accessible by estate staff. Copies of relevant sections were seen posted at workstations. The SOPs are


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currently available in English, with some sections available in Bahasa Malaysia. Hadapan Palm Oil Mill is operating based on Mill Quality Management System (SOP and Manual) dated 1 November 2008. The SOP explains the details of processes involved in mills daily operation such as: a) Reception Station (Weighbridge, Loading Ramp, FFB Conveyor, Fruit Cages, Locomotive) b) Fruit Handling Station (Tipper, Vehicles) c) Sterilization Station (Sterilizer, Railway Line, Trolley Bridge) d) Threshing Station (EFB Conveyor, FFB/EFB Elevator, EFB Ramp) e) Pressing Station (Digester, Screw Press, Vibrating Screen, Crude Oil Pump) f) Clarification Station (Sludge Tank, Vacuum Dryers, Centrifuges) g) Depericarping Station (Cake Breaker Conveyors, Nut Polishing Drums, Fibre Cyclone) h) Kernel Recovery Station i) Boiler Station j) Product Storage and Despatch (CPO Storage Tank, Flowmeter, Despatch Conveyor) k) Laboratory l) Water Treatment Plant (Water catchment, Overhead Water Tank, Softeners) m) Effluent Treatment Plant (Cooling Pond, Digester Tank, Aerobic and An-aerobic) n) Workshop and Maintenance (Welding Set, Lathe Machine)

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

Minor


Objective

evidence: Monthly progress monitoring for all activities were made available during the Surveillance Audit. Records of monitoring for field related activities are also available that covering harvesting, manuring and spraying programmes and are recorded on a monthly basis.

In addition, a report of Plantation Advisor (PA) audit is available in a Plantation Advisor Report. Observed the PA audit report for visiting estates are as follows:

Estate Date Recommendation

CEP Renggam (No. 01/12-13)

05-07 & 11-12 March 2013

To improve the following: Underperforming block; Conduct and implement the EFB mulching; Fronds stacking; Construction of silt pits at undulating areas.

Kulai (No. 01/12-13)

25-28 February 2013 To improve the following: Underperforming block; Conduct and implement the EFB mulching; IPM; Fronds stacking; Construction of silt pits at undulating areas.

For Mill, a report of Mill Advisor (MA) Audit is available in a Mill Advisor Report No. SOU24/HPM/01/13-14 dated 11 August 2013. Based on the recommendation made by the PA, the audit team observed that action has been taken to address and implement the recommendation with close monitoring in particular those underperforming blocks to increase the production. Details of the implementation are to be covered in the subsequent section of the audit report.

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:

Agronomic and fertilizer report is prepared by Sime Darby Research Sdn. Bhd. Fertilizer recommendations made are based on palm nutritional status resulting from foliar analysis. Observed during the audit, the record of agronomic and fertilizer application and recommendation for 2013 dated 14 June 2013 is available for CEP Renggam and Kulai Estates.

Observed also progress in implementation of fertilizer application for 2013 that is recorded on a monthly basis for visited estates are available. Example:

Block Ha Fertilizer Tonnage Total no.

of trees Kg/palms Month

CEP Renggam

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OP 1991A 74.32 RP 15.954 10,628 1.5 October

OP2003B 67.27 RP 14.934 9,956 1.5 October

OP1996A 55.63 RP 11.515 7,677 1.5 October

Kulai

2006 78.39 MOP 18.66 1.75 October

1991C 66.03 MOP 17.30 2.00 October

1989C1 88.35 MOP 23.15 2.00 October

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


Objective

evidence:

Summary of leaf Nutritional status available in “Agronomic & Fertilizer Recommendation report for 2013/2014” dated 18&19 February and 14 June 2013 for Kulai and CEP Renggam Estates respectively that is recorded block by block basis. Among the parameters recorded and analysed are N, P, K, Mg, Ca and B

In addition, soil analysis is also found to be conducted by the Sime Darby Research Sdn. Bhd. Observed the latest report No. S4/2011 dated 26 January 2011 for CEP Renggam as well as S116/2010 dated 08 November 2010 for Kulai Estate are available. Among parameters recorded are pH, C, OM, N, K, Mg and Ca.

As reflected in the SOP, the soil analysis shall be conducted every 5 years and therefore, the forthcoming analysis scheduled to be conducted in 2015.

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


Objective

evidence: Records where EFB application is documented in the EFB Application Record Book. Sample of EFB application observed during the audit:

Date Total MT Block

CEP Renggam Estate

30 Dec 2013 11.26 OP1997

12 June 2013 10.08 OP2011

20 June 2013 9.49 OP2011

17 Dec 2013 9.05 OP1997

29 May 2013 9.67 OP2011

Kulai Estate

18 June 2013 36 2013A & 2013B

09 July 2013 39.6 2013A & 2013B

14 Aug 2013 37.8 2013B

11 Sept 2013 36.9 2013B

22 Sept 2013 36 2013A

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

4.3.1 Documented evidence of practices minimizing soil erosion and degradation Minor

GP 7003A of 63

(including maps)


Objective

evidence:

The estates are practicing according to procedure stated in Sime Darby Agricultural Reference

Manual (ARM) date 1 July 2011. Section 17: Leguminous Cover Crop Establishment explains the method of planting cover crop such as Pueraria Javanica, Calopogonium mucunoides and

Mucuna Bracteata. Section 4: Land Preparation explains the method of terrace construction in order to minimize soil erosion. Slope and contour map is for both visiting estates indicates that there is no steep slope (>25 degree) area in the estate. The practices of minimizing soil erosion are conducted such as terracing and silt pit construction.

4.3.2 Avoid or minimize bare or exposed soil within estates Minor


Objective

evidence: Section 17 (1): General Information and Justification for Establishment of Legumes in the AR manual specified that there should not be any area of exposed or bare soils in the estate by planting legume cover crop such as Pueraria javanica, Mucuna bracteata, Calopogonium mucunoides and Calopogonium caeruleoum.

Field verification showed that there is no evidence of bare or exposed soils observed throughout CEP Renggam and Kulai Estates. The audit team observed that the soft grasses and ferns are maintained in the area to prevent soil erosion.

4.3.3 Presence of road maintenance programme Minor


Objective

evidence:

Road Upkeep Program FY13/14 is available. Observed during the audit, road maintenance program for FY2013/2014 includes the following activities:

New and desilting silt pit

Road side pruning

Road grading

Patching pot hole

Road upkeep and resurfacing

Bridges upkeep and repair

Fixing new and repair culverts

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

Minor


Objective

evidence: Soil maps available in the visiting estates verified that there is no peat in the estates excep in Seri Pulai Estate where approximately 10% of the area is deep peat. The action plan to manage those areas is available and the management is familiar with the requirements of peat management. The unit follows the Agriculture Reference manual on Land preparation for Peat Planting (Version 1 July 2011) and the SOP manual on Felling and Land preparation.

It includes the construction of the pre-lining for CECT (close-end conservation trenches) and its subsidiary drains to maintain the water level. Water level monitoring is being undertaken.

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: No evidence of fragile or problem soils in the visiting estates.

Areas where slopes greater than 25° are classified as protected areas and not planted with oil palm.

However, for every fragile soil identified, the unit follows the Agriculture Reference manual on Land preparation for Peat Planting (Version 1 July 2011) and the SOP manual on Felling and Land preparation. It includes the construction of the pre-lining for CECT (close-end conservation trenches) and its subsidiary drains to maintain the water level. Water level monitoring is being undertaken. Peat areas are identified in the estate soil map.

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

GP 7003A of 63


Objective

evidence:

Sime Darby has a policy on Slope and River Protection Policy dated April 2011 and signed by Executive Vice President. The policy stated the buffer zone required to maintain as follows:

River

Width <3m* >5m 5-10m 11-20m 21-40m >40m

Bufferzone 20m 5m 10m 30m 40m 50m

Note: *for plantation in Sabah only.

However, during the field visit, the audit team observed that there is evidence of circle spraying applied close to the river where the palm is located within the buffer zone. Furthermore, buffer zone is not demarcated on the ground at block no. 89A near to the Hindu Temple.

Major CAR 41 issued.

Closing of Major CAR:

Following to the audit, the company has taken action to verify the Major CAR issued through conducting an awareness training to all sprayers pertaining the requirements to not to spray in the bufferzone. The details of the training that was conducted on 16 January 2014 is made available to the audit team on 10 March 2014. Based on the objective evidence submitted, the audit team observed that the training was conducted by the estate assistant and attended by 14 sprayers and mandores of the estate. In addition, the company has also taken action to erect more signages to depicting the location of the bufferzone. Pictorial evidence of the signages are made available to

the audit team together with the training records on 10 March 2014. Major CAR 41 closed.

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

Major


Objective

evidence:

No evidence on construction of bunds/weirs/dams across the main rivers or waterways passing through an estate. Visit during the surveillance visit evident that no construction of bunds, weirs and dams were observed in the estates. All provisions stipulated in the Department of Irrigation and Drainage (DID) is fulfilled.

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

Findings In compliance: Yes: No:

Objective

evidence:

Both visiting estates do monitor water quality flowing through the estate. Sampling points are available in Water Hydrology Map. Both the treated water and the natural waterways water are analysed on a three month basis with the latest sampling and analysis was conducted on 13 November 2013 and 15 November 2013 respectively (CEP Renggam) as well as 20 December and 30 December respectively (Kulai Estate). The forthcoming sampling and analysis schedule to be conducted February and March 2014 for CEP Renggam and Kulai Estate respectively.

For mill, the latest analysis of water has been conducted on 17 October 2013 and the analysis was conducted on 31 October 2013.

Minor CAR 32 closed

However, based on analysis record, the water sampling analysis conducted for CEP Renggam Estate covering the parameters such as pH, Alkalinity, BOD, COD, Total Solid, Suspended Solid, Nitrogen Compound, Ammonical Nitrogen and Oil as well as Grease. Based on the report, the audit team observed that test result for all parameters namely pH, COD, Suspended Solid and Ammonical Nitrogen showed above the threshold level specified in the Plantation Quality Management System document, Table: Results of Water Quality Analyses (Natural Waterways). Based on record, observed that the reason for the increase of the parameters are due to water leached from the dumping site. Complaint letter has been submitted to the Jabatan Pengurusan Sisa Pepejal Negara through Majlis Daerah Simpang Renggam voicing the company’s concern on the decrease level of water quality in the natural waterways that affecting the water analysis result. Observed that the letter Ref No.: MDSR/KES/54 Jld.01/2012(55) dated 26 December 2013 is available. Currently the company is awaiting response from the Jabatan Pengurusan Sisa Pepejal Negara. This issue needs to be monitored and control. To be verified next surveillance.

(Observation 08 issued)

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4.4.4 Monitoring rainfall data for proper water management Minor


Objective

evidence:

Section 18: Rainfall Recording in Sime Darby Agricultural Reference Manual, Version 3 (1

July 2011) clearly describe the rainfall data collection procedure. Records of rainfall data is available and recorded daily and summarized monthly as well as yearly basis. Records available for all estates for the past 5 years are as follows:

Estate Rainfall Records (Average/Year) (mm)

2008 2009 2010 2011 2012

Layang 3,288.00 1,931.00 2,547.00 3,088.00 2,669.00

Seri Pulai 2,663.00 2,512.00 2,778.00 3,072.00 3,096.00

Kulai 226.00 127.00 2,311.63 2,958.50 2,718.60

CEP Renggam 2,785.50 3,391.50 2,445.50 2,219.10 2,565.00

Total 8,962.50 7,961.50 10,082.13 11,337.60 11,048.60

As for the estates, data recorded summary of rainfall data on a monthly basis and is available since 2002. Example of records captured for visiting estates for 2013 are as follows:

Month Estate

CEP Renggam Kulai

January 153.0 266.0

February 218.0 247.0

March 214.0 168.0

April 173.0 209.0

May 275.0 198.5

June 95.0 146.0

July 115.0 103.5

August 108.0 191.0

September 67.0 359.0

October 239.0 302.0

November 263.0 233.5

December 303.0 294.5

TOTAL 2,223.0 2,718.0

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


Objective

evidence:

The water usage is monitored on a monthly basis under the water management plan that is classified according to the following usage:

Mill – total to overhead tank, processing, sterilizer station, fire house, boiler station.

Linesite – domestic usage

Composite plant – plant usage

Water usage for every tonne FFB processed is also monitored on a monthly basis and captured in the Form A of the Monthly Mill Environment Compliance and Performance Monitoring Document.

For example, for 2013 records

Month Sept Oct Nov Dec

FFB Processed 21735.74 22602.06 19792.89 20,651.41

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Mill usage m3 24534 20849 23200 22377

Water usage (m3/MT FFB ) 1.129 0.922 1.172 1.084

Water usage in the estate is also monitored: Monitored monthly for palm oil operation including domestic usage.

Example of water usage for 2013: CEP Renggam and Kulai Estates

Month m3

CEP Renggam Kulai

January 5,939 1,359.04

February 6,082 1,303.68

March 6,830 1,358.40

April 6,712 1,372.80

May 7,129 1,527.68

June 7,347 1,478.40

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 that the water is drain into protected areas

4.4.7 Evidence of water management plans Minor


Objective

evidence:

Water management plan for 2013/14 is available in the QHSE Objective Management Program and Action Plan. The plan includes:

Reduction of water usage for financial year 2013/2014

Contingency Plan During Water Shortage for financial year 2013/2014

Water usage for monthly basis for financial year 2013/2014

Plan to manage and treat water to be discharged n the waterways. Minor CAR 38 was issued during ASA02 due to some of the parameters for domestic water usage like coliform analyses are not tested. The chloride content for both the local and outside test was above the recommended. In February 2013, tested chloride of 49 – 51 mg/l and the COD is 12 – 24 mg/l which is above than the recommended. Verification during the ASA03 showed that the company has using the water supplied by the government i.e. Syarikat Air Johor for both management/operation and domestic use in the estate. With regard to water sampling analysis, based on record, the water sampling analysis is found to be conducted on a three month basis with the latest analysis dated 15 November 2013 and covering the parameters such as pH, Alkalinity, BOD, COD, Total Solid, Suspended Solid, Nitrogen Compound, Ammonical Nitrogen and Oil as well as Grease. Based on the report, the audit team observed that test result for all parameters namely pH, COD, Suspended Solid and Ammonical Nitrogen showed above the threshold level specified in the Plantation Quality Management System document, Table: Results of Water Quality Analyses (Natural Waterways). Based on record, observed that the reason for the increase of the parameters are due to water leached from the dumping site. Complaint letter has been submitted to the Jabatan Pengurusan Sisa Pepejal through Majlis Daerah Simpang Renggam voicing the company’s concern on the decrease level of water quality in the natural waterways that affecting the water analysis result. Observed that the letter Ref No.: MDSR/KES/54 Jld.01/2012(55) dated 26 December 2013 is available. Currently the company is awaiting response from the Jabatan Pengurusan Sisa Pepejal Negara. This issue needs to be monitored and control. To be verified next surveillance. (refer to

Observation 08)

In Kulai Estate, latest sampling was conducted on November 2013 and based on result of the

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analysis; the audit team observed that with the exception of pH level, all other parameters recorded below the threshold level.

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:

Documented IPM system is available in both estates. IPM system is integrated into the Agricultural Reference Manual (ARM) which is disseminated to all estates. The latest version of

the ARM is available and inspected. Observed that the IPM is incorporated in the ARM in Section

15: Plant Protection that covers the following items:

Occurrence of Rhino beetle in Young Oil Palm

Chemical Control of Common Oil Palm Pests

Bagworm and Nettle Caterpillar Control

Use of Beneficial Plants for Natural Control of Oil Palm Leaf Pests

Control of Rats in Oil Palm

Barn Owls for biological control of rats in oil palm

Control of basal and upper stem rot

Certification of best practices towards minimizing ganoderma inoculum in replants

Use of arbuscular mychorrizal fungi for management of ganoderma basal stem rot

Chemical control on termite infestation

Section 16: Weeds Control indicates the procedure of implementation for the following items:

General weed control

VOPs eradication and general weed control in first year oil palm

Avoiding herbicide contamination of oil palm

In all estates evaluated, elements of IPM have been observed. Pest and weed infestation is recorded as minimal in these estates. The introduction of biological control is being promoted and the use of Barn Owls for rat control is also being investigated. Some attempt has been made to establish beneficial predator and parasitoid host plants e.g. Tunera subulata, Cassia cobannensis and Antigonon leptopus.

4.5.2 Monitoring extent of IPM implementation for major pests Minor


Objective

evidence: There is evidence of IPM Implementation for major pests.

Monitoring of IPM implementation is done on a block by block basis and is recorded in IPM Census Summary:

Barn Owl Census – conducted twice a year. Example of census are as follows:

Month Estate Total Box Occupancy % Occupancy

April 2013 CEP Renggam 200 185 92.5

August 2013 Kulai 60 40 66%

Ganoderma Ganoderma Census files. Ganoderma census to control the occurrence of ganoderma at matured trees. The records are observed to be captured on block by block basis. Monitoring records for 2008 to 2012 (up to May 2013) is available that is done annually. Census categorises the severity of the infection.

Bagworm - census records are available. Observed that for every records of threshold reached, the audit team note that recommendation from the top management i.e. from Sime Darby Research Sdn Bhd is sought by the company to guide on the next steps. For example in 25 February 2013, there is evidence of bagworm occurrence that is beyond the threshold level and recommendation from the Sime Darby Research has been obtained whereby a trunk injection is recommended by using metamidaphos. Based on records, the application of Cypermetrin is no longer using mist blowing. Instead, te company currently using normal knapsack spraying equipment for such purpose. Records on usage of cypermethrin for bag worm campaign are available in the stock

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card as evidence the last application in April 2013.

Minor CAR 39 closed

Observed also beneficial plant planting is also recorded.

Rat Bait Records: During low rat population, SOU 24 would practice ‘Calendar Baiting’. Rat Bait application is monitored and recorded. When the uptake falls below 20%, the baiting application will cease.

Monitoring of IPM implementation is available i.e. Rhinocerous Beetle census records available. Uses Pheromone traps to monitor population.

4.5.3 Recording areas where pesticides have been used Minor


Objective

evidence:

Pesticides usage on each of the oil palm areas/blocks is captured in the work programme document that describes intensity, type and amount of the pesticide applied to the particular oil palm areas/blocks in the costing file including chemical cost, labour cost and cost per ha.

Sample of pesticides application are as follows:

Block Ha Pesticide Quantity Application Date applied

CEP Renggam Estate

2002A 32.20 Glyphosate 60L Circle and Path Spraying

04-11 Nov 2013 2002B 83.32 Ally 300grm

1996 140.48 Glyphosate 60L Circle and

Path Spraying 21-27 Nov 2013

Ally 300grm

Kulai Estate

2013A 4.8 Gluphosinate ammonium

12.67L Circle

spraying 08 Oct

2013A 6.8 Glyphosate 13.46 Spot Spraying 11 Oct

2013A 6.8 Glyphosate 14.25 Spot Spraying 08 Oct

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 pesticides usage for units per hectare or per ton crop is recorded in the Table of Monitoring Pesticide Usage per Hectare per Ton FFB Production. Data is recorded based on the type of pesticides used and recorded on a monthly basis.

Example of data recorded for FY 2013/2014 i.e. December 2013 are as follows:

Chemical Total Pesticide

usage (a.i.) a.i. per Ha

a.i. per tonne

FFB

CEP Renggam

Hextar Cypermethrin 3.3 0.00084 0.00066

Basta - Glufosinate ammonium 13.5 0.00344 0.00271

Supremo - Glyphosate 199.2 0.05073 0.03993

Ally - Metsulfuron methyl 3900 0.99325 0.78173

Ebor baits - Walfarin 1.38 0.00035 0.00028

Kulai

Basta - Glufosinate ammonium 26.06 0.00948 0.00734

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Sodium Chloride 27.23 0.00990 0.00767

Ally - Metsulfuron methyl 1,144.00 0.41614 0.32217

Foxil - Triclopyr 16.44 0.00598 0.00463


Envo - Cypermethrin 14.36 0.00522 0.00404

Observation 02 closed.

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:

Usage of agrochemical is described in the Section A10: Weeding and Section B3:

Weeding/Spraying of the Standard Operating Procedures of the estates. The procedure describes the function/justification and methods of applying the agrochemical, process monitoring and records that need to be comply with.

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).

A chemical register is available and recorded in ‘Daftar Bahan Kimia Membahayakan Kesihatan’ list. Type of chemical, areas of application, suppliers name and chemical class is available. All chemical used are listed and compiled with MSDS in the chemical store.

4.6.3 Pesticides shall be restored 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:

The pesticide used are stored in the chemical store and clearly labelled. The store is locked and only accessible by the store supervisor for issuance and recorded in bin cards. A place for chemical mixing is properly maintained. Waste from the chemical mixing area will be collected and reuse for the next day. In addition, the audit team also observed that all of the MSDS for the chemical used in the

plantation operation are made available in the chemical store. (Observation 03 closed)

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:

Fertilizer and chemical are stored in a systematically arrangement and labelled. All MSDS for fertilizer and chemical (pesticides and herbicides) are compiled in a file which located inside the store. With regard to the foreign workers, all safe operating procedures in handling the pesticides is given through a briefing and a slot of training that to be given to all workers at prescribed interval. Records of training given is kept and maintained.

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


Objective

evidence: Annual Medical Surveillances for all workers for 2013 is available.

Observed that all medical surveillance report are in place and updated.

The Annual Medical Surveillance for 2013 for both CEP Renggam and Kulai Estates are conducted on 16 to 18 December 2013 and 21 May 2013 respectively. The result of the medical surveillance dated 20 December 2013 and 25 May 2013 for both estates has been prepared by

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the appointed Medical Officer and is made available to the audit team.

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


Objective

evidence:

No women sprayers’ evidence in both CEP Renggam and Kulai Estates.

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:

No Type 1A or 1B chemical evidenced used in the estate.

4.6.8 Documented justification of any aerial application of agrochemicals. No aerial spraying unless approved by relevant authorities

Major


Objective

evidence: No aerial spraying conducted in both CEP Renggam and Kulai Estates.

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

Minor


Objective

evidence:

No buyer requested for testing of chemical residues in CPO.

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:

Data is recorded based on the type of pesticides used and recorded on a monthly basis. Observed during the audit the Costing Book for each operation (Spot spraying, Circle spraying, CDA).

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


Objective

evidence: Up-to-date Risk Assessment for Mill and Estate dated 27 September 2013 and 22 November 2013 (CEP Rengam) and 13 November 2013 (Kulai) respectively is available covering all operations within the mill and estates. The risk assessment is found to be approved by the manager.

Safety and health policy dated April 2011 and signed by the companys Executive Vice President is available that among others specifies the requirement of the company to comply with the requirement of the Occupational Safety and Health Act 1994.

Training plan for 2013 is available that also includes the requirement for Occupational Safety and Health Training that covering the first aid training, fire drill, safe operating procedures and daily briefing of PPE as well as the MSDS training.

Safety and Health Officer is identified and has been appointed for both Mill and Estates. Evidence of training is available together with the appointment letter that is signed by the respective managers

Safety and health committee meeting is conducted quarterly. Based on record the meeting has been conducted as follows for 2013:

Date Venue

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06 January 2014 Palm Oil Mill

27 September 2013 Palm Oil Mill

05 June 2013 Palm Oil Mill

08 March 2013 Palm Oil Mill

28 November 2013 CEP Renggam Estate

21 August 2013 CEP Renggam Estate

22 May 2013 CEP Renggam Estate

09 February 2013 CEP Renggam Estate

15 November 2013 Kulai Estate

24 September 2013 Kulai Estate

22 May 2013 Kulai Estate

21 February 2013 Kulai Estate

Observed also the minutes of the meeting is available that is prepared by the appointed safety and health officer and approved by the manager who acts as the chairman of the meeting.

Organization chart of the OSH committee is available.

In addition, the Emergency Response Procedures is available covering the following working areas/activities:

Physical injury;

Chemical spillage;

Flood;

Tractor/lorry driver; and

Fire occurrence.

Observed also the first aider is found to be trained. In general all first aider are found to be trained as follows:

12 November 2012 (Palm Oil Mill);

23 May 2013 (CEP Renggam Estate);

19 September 2013 (Kulai Estate).

Evidence of training in the form of training records and attendees is available during the audit.

Verification during the field visit evidenced that proper PPE is used for workers during working at their respective working areas. Furthermore, fire extinguisher is found to be constantly checked and monitored to ensure that such equipment is at workable stage.

In addition, visit to line site also confirmed that the harvesting sickle is always found with the

protective sheath. (Observation 04 closed)

Despite the above, the audit team observed that there are several non-compliance to the requirement of this Indicator as follows:

First aid kits are not available in the vicinity of harvesting activity at CEP Renggam estate;

First aid tools and content is kept in a plastic bag due to original box was damaged (Harverster group at Kulai Estate); and

First aid content such cotton wool is not safe to be used due to hygienic issue at all sites.

Major CAR 42 issued.

Closing of Major CAR:

Following to the audit, the company has taken action to verify the CAR issued whereby the company has produce a specific form to monitor the usage of the first aid tools and contents. The form also is subjected for monthly inspection by the health assistance. In addition, the audit team also has been made available a pictorial evidence of a new set of first aid kit to be supplied to all harvesting team for all estates. All of the above objective evidences have been submitted to SGS

on 10 March 2014. (Major CAR 42 closed)

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

Major


Objective

evidence:

Records of all accidents are kept and periodically reviewed at quarterly intervals. Accident records are recorded in the document Accident, Incident and NCR (OSH/05/4.5.3). All accidents records are reviewed on case by case basis and the findings from the review are discussed in the OSH Meeting. There is also evidence on the usage of JKKP 8 Form that need to be submitted to the Department of Occupational Safety and Health (DOSH) on yearly basis. Latest submission of JKKP 8 Form was in January 2013. For 2013 accident records, the form is to be submitted by latest 20 January 2014.

4.7.3 Workers should be covered by accident insurance Major


Objective

evidence: All Workers (both local and foreign) are found to be covered by the valid accident insurance.

Local Workers are bound to subscribe to EPF and SOCSO in addition to their accident insurance. Observed sample of insurance policy as follows:

Palm Oil Mill – RHB Insurance – Policy No. FW051430 with a validity from 30 March 2013 to 29 March 2015;

CEP Renggam Estate – RHB Insurance – Policy No. FW050979 with a validity from 13 April 2013 to 12 April 2014;

Kulai Estate – RHB Insurance – Policy No. FW05618 with validity from 01 July 2013 to 30 June 2014.

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

Major


Objective

evidence: A training programme and plan for 2013, including records of training for employees are kept in the training file at each estate and mill. Example of trainings conducted are as follows:

Training Date

Manuring workers including mandores

• . 23 May 2013

Chemical Handling training • 23 May 2013;

• 13 September 2013

Chemical & Oil Spillage Training & Drill

• 25 April 2013

Harvesting workers including mandores

• 23 Sept 2013; &

• 22 February 2013

Spraying workers including mandores

• 24 Sept 2013;

• 17 May 2013;

• 23 May 2013

Driver (for transportation and replanting)

• 12&13 October 2013

• 06 December 2013

First Aid Training • 23 May 2013.

Fire Drill • 23 May 2013;


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PPE usage • 23 May 2013

RSPO Supply Chain Certification System

• 08 June 2013 (for Milll)

Scheduled Waste Management Training


Based on the above, the audit team observed that the training relating to chemical handling was also attended by the HA for both visiting estates i.e. CEP Renggam and Kulai Estates. Interview with the HA confirmed that both of them attended the training and that they are aware of any

chemical related injury or health issues. (Observation 07 closed)

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:

Documented aspects and impacts risk assessment is available. Documented evidence for the identification of environmental aspects and impacts at the mill and estates level for 2013/2014 is available. The document is found to be updated that covers all activities that is in practice within the operation of the SOU as follows:

Nursery;

Replanting;

Manuring;

Weeding and spraying;

Pest and disease control;

Harvesting and collection;

Field FFB transportation;

Road maintenance;

Workshop;

Scheduled waste store;

General store;

Diesoline station;

Dispensary; and

Estates compound.

There is a provision to review these aspects and impacts annually. Environmental impact evaluation matrixes with compliance rating have also been undertaken. The matrix represents a register and focuses on control and management of impacts for most production activities. Activities with high environmental impact rating have proposed mitigation measures whereas low impact activities are monitored. Environmental management is also supported by and Environmental Improvement and Pollution Prevention Plan. In general, environmental management activities in SOU 24 are undertaken adequately in both mill and estates.

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

Minor


Objective

evidence:

Environmental improvement plan to mitigate the negative impacts and promote the positive ones, is developed, implemented and monitored. This has been done through the implementation of the environmental impact evaluation matrixes with compliance rating have also been undertaken. The matrix represents a register and focuses on control and management of impacts for most production activities. Observed latest improvement plan for 2013/2014 is available during the surveillance audit.

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

Major

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surrounding landholdings


Objective

evidence:

Identification and assessment of HCV habitats and protected areas within land holdings; and attempt assessments of HCV habitats and protected areas surrounding landholdings are available. There is a Biodiversity Baseline Assessment Report for SOU 24 for both Estates and Mill dated December 2008. The document specifies the assessment process in summary covering the objective of the assessment, the scope of the assessment, biodiversity assessment process covering the methodology for the assessment, findings, management prescription of the area identified and the monitoring of the area identified.

There is also a section of monitoring of the biodiversity for each of the identified HCV within the assessment. The assessment stated that the monitoring program to be conducted annually and throughout the year where any sighting or new observation and identification of the ERT Species is recorded accordingly. The document with a validity period of 5 years is due for revision in 2013.

Based on the above, the audit team note that the report is only focused on fauna, flora and ecological component only. There is no coverage on social aspect related to HCV component i.e.

historical site found in Kulai Estate which is not stated in the HCV list.

Based on the above, the audit team note that the new document has yet to be formulated despite

that the assessment of the new set of HCV has been conducted on 16-20 December 2013. (Major

CAR 43 raised).

Closing of Major CAR 43:

The company has submitted the draft copy of the HCV assessment that was conducted in December 2013. The draft among others specifies the assessment processes covering the objectives, scope of the assessment, assessment team qualification, methodology, assessment area description, findings and discussion that are divided into two sections i.e. landscape context of SOU 24 covering biodiversity and conservation values, ecosystem services and social & cultural values as well as HCV criteria & application to agricultural that consist of visual observation and supporting information, wildlife in plantation and decision on HCV status. In addition, the audit team also observed that the assessment document specifies the section on recommendation in term of management and monitoring of the identified HCVs.

In view that the company has taken action to formulate the assessment report incorporating all

issues resulted in the issuance of the Major CAR, the audit team is of the view to close the Major

CAR. However an Observation 09 is raised to further monitor this during next surveillance audit in view that the document is subject to further review by the company’s top management.

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


Objective

evidence: The new set of the HCV assessment is not yet formulated covering all new elements identified

within the estates. (refer to Major CAR 43)

Closing of Major CAR 43:


In view that the company has taken action to formulate the assessment report incorporating all issues resulted in the issuance of the Major CAR, the audit team is of the view to close the Major CAR. However an observation 09 is raised to further monitor this during next surveillance audit in view that the document is subject to further review by the company’s top management.

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:

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

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management of the individual estates has taken action to discourage any illegal or inappropriate hunting fishing or collecting activities. This is the form of placing signage in appropriate locations and briefing workers.

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:

Evidence of documented identification of all waste products and sources of pollution updated dated on 10 October 2013 is available. Schedule waste produced at both estates and mill are captured and recorded in the Waste Management Action Plan. Several wastes has been identified as follows:

Scheduled waste: o Used lubricants; o Empty pesticide container; and o Used batteries, tyres and tubes

Domestic waste

Empty Fruit Bunch/Palm Oil Mill Effluent; and

Clinical waste On the other hand wastes sourcing and derived from mill is identified and recorded on a monthly basis where all wastes produced is subsequently be applied as fertilizer in the surrounding estates. Generally the waste identified is as follows:

EFB

Compost

Decanter Cake

Boiler Ash

Debris (sand, stone, and rubbish)

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

Minor

Findings In compliance: Yes: No: X

Objective

evidence: Scheduled waste containers are found to be recorded in the document Waste Management review and Monitoring for the respective financial year.

Observed latest record for FY 2013/2014 is available detailing the following:

SW

Code Description Unit Total recorded Total disposed

305 Spent lubricant oil L 1033 550 (19 Nov 2013)

410 Rags, Plastics, papers, contaminated filters

Pcs 52 Nil

409 Chemical containers/pesticides Pcs 553 433 (31 Dec 2013)

404 Clinical waste pcs Nil Disposed on 03 January 2014

Clinical waste: appointing Pantai Medivest Sdn. Bhd. as the scheduled waste collector. Latest collection was done on 03 January 2014 & 17 December 2013 for CEP Renggam and Kulai Estates respectively.

Scheduled waste: appointing Perniagaan Saudara Baru & OLST Petro-Chemical Sdn. Bhd. as the waste collector. Latest collection was conducted on 19 November 2013 and 11 September 2013 where used lubricant oil, hydraulic oil, contaminated item has been collected.

For mill: scheduled waste disposal is done through the appointed scheduled waste collected i.e. Hiap Huat Chemical Sdn. Bhd. latest collection recorded were conducted on 21 June 2013 where used lubricant and hydraulic oil as well as empty drums has been collected.

Field verification at both estates showed that there is no evidence of reuse of chemical container other than its intended usage. In addition visit to the chemical storage showed all empty chemical containers are triple rinsed and perforated before stored at the scheduled waste store to be disposed by the appointed scheduled waste collector.

Despite the above, the audit team observed that there is evidence of still inadequate awareness to implement waste management plan for domestic waste that need to be segregated for reuse and

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recycle. This can reduce domestic waste for land fill. This situation happen in all visited estates

and mill. (Minor CAR 44 raised)

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


Objective

evidence:

Crop residues / biomass are recycled. All wastes derived from POM are categorized as Empty Fruit Bunch (EFB), compost and Decanter Cake. Amount of wastes generated and recycled are recorded on monthly basis.

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:

Evidence of monitoring of renewable energy use per tonne of CPO or palm product in the mill is available. The mill has monitored the usage of EFB to generate electricity in and recorded on Monthly basis.

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:

There is no diesel consumption in the mill operation. The mill is using steam turbine and electricity from TNB grid.

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:

No open burning was observed during onsite audit.

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

Minor


Objective

evidence:

Previous crops are felled/mowed down, chipped/shredded and windrowed. Refer indicator 5.5.1. In general, all felled trunks are chipped and windrowed.

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


Objective

evidence: Visit to estates line site confirmed no evidence of burning of domestic waste. In addition, the company also has placed a signboard at linesite to warn workers of ‘No open burning’ allowed at the line site.

Observation 05 closed.

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:

A documented plan to mitigate all polluting activities is available. Environment Management Programme to mitigate polluting activities for financial year 2013/2014 is in place and implemented. Among the objectives highlighted for the implementation of the programme are as follows:

Felling & clearing (soil erosion);

Felling & Clearing (Destruction of ground vegetation);

POME application;

Servicing and repair to vehicles;

Engine/vehicles overhaul/ repair;

Maintenance station;

Rubbish disposal;

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Zero open burning; and

Leakage of pesticides during chemical mixing and washing into outside land.

According to the plan, the data is collected every 3 months. Records of plan implementation and monitoring of effectiveness is available and observed.

5.6.2 Plans are reviewed annually Minor


Objective

evidence:

Plans are reviewed annually where the latest revision was conducted on 01 July 2013 and signed/approved by the manager of the estate. The EMP is conducted according to Section 5.4.2: QSHE Management Programmes/Action Plans of the Standard Operating Manual (SOM) and reviewed on a yearly basis upon achieving the objective highlighted for the particular year.

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

Minor


Objective

evidence: Soil maps available in the visiting estates verified that there is no peat in the estates.

However, based on records, approximately 10% of the area in Seri Pulai estate is deep peat. The action plan to manage those areas is available and the management is familiar with the requirements of peat management. The unit follows the Agriculture Reference manual on Land preparation for Peat Planting (Version 1 July 2011) and the SOP manual on Felling and Land preparation.

It includes the construction of the pre-lining for CECT (close-end conservation trenches) and its subsidiary drains to maintain the water level. Water level monitoring is being undertaken.

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:

A documented social impact assessment including records of meetings is available. The SIA for the mill as well as the four estates are available outlining the methodology approach of the document. The document dated December 2008 specifies the scope of the assessment, the objective and methodology in conducting the assessment, assessment process covering the stakeholder engagement, the assessment analysis and the social management plan. The assessment also specifies the record of meeting that has been conducted during the assessment process.

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

Minor


Objective

evidence:

There is evidence that the assessment has been done with the participation of affected parties. All records of meetings, consultation takes place during the SIA is incorporated in the document. List of the stakeholders consulted are also available.

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

Minor


Objective

evidence:

A timetable with responsibilities for mitigation and monitoring is reviewed and updated. There is evidence of Action Plan for Social Impact Assessment that is reviewed annually. The revised management plan for FY 2013/2014 dated 01 July 2013 and signed by the Manager of the estates describes the plan for the following issues:

Problem regarding road access to smallholder;

Dusty road due to FFB transportation/cars/motorcycles;

Request of street lights from main entrance to line site;

Transportation for children to go to school;

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Emergency transport ambulance to send workers to clinic or hospital in case of emergency;

Safety awareness training at line site;

Awareness training to the auxiliary police on their rights and power as well as responsibilities;

Organizing more social activities;

Freedom of association to workers;

Requisition for donation to the estate;

Waste management;

Cleanliness of the parked vehicles;

Boundary stone marking (bordering with neighboring communities/estates);

Joint consultative committee meeting;

Stakeholder identification;

Update on grievance procedures;

Overtime monitoring limit;

Freedom of association;

Gender committee; and

Capacity building for workers

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:

Consultation and communication procedures are available and documented. There is a procedure for communication and consultation between growers/millers and stakeholders within and surrounding the landholdings. The document dated 1 November 2008 is stated within the Standard Operating Manual of the Estate Quality Management System. The document specifies procedure to be applied upon the receiving of the complaints from the stakeholders until the issues resolved either through a direct negotiation, using arbitration or through legal proceedings. In addition, a flowchart describing the steps to be taken from the receiving of complaints until the issues resolve is made available to the auditing team in the same document.

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

Minor


Objective

evidence:

Sime Darby has identified the responsible person i.e. the Assistant Manager as the official person for handling the social issues within the estates and mills. Evidence of nomination of the Assistant Manager as the person to handle social issues is made available to the auditing team that specifies the following responsibility:

Investigate any report or claim with regard to social issues and to recommend applicable disciplinary act, where necessary;

Keeping all record of reports and action taken for each of reports received;

Provide advice and counseling to workers that need such service; and

Assist the estate management in organizing any social related events.

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

evidence:

List of stakeholders, records of all communication and records of actions taken in response to input from stakeholders is maintained. List of stakeholders at estate and mill level and records of communication is available. These include local banks, contractors, vendors, local community heads, local authority services, government agencies including the list for NGOs, neighbouring mills and estates etc. Latest meeting with stakeholder conducted on 24

th February 2013 and 28 May 2013 for CEP

Renggam and Kulai Estates. A minute of the Meeting is available and found to be conducted based on the SOP. With regard to Hadapan POM, the latest stakeholder meeting was conducted on 02 January 2014 and was attended by various stakeholders namely local government bodies, education bodies i.e. school representative, contractors and NGOs, minutes of the meeting is made available to the audit team during the Surveillance Audit.

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


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Objective

evidence:

Documentation of the process by which a dispute was resolved and the outcome is available. The procedures for handling complaints and grievances are outlined in the Procedures on Handling Social Issues of the Sustainable Plantation Management System document. The procedures dated 1 November 2008 specifies the process in receiving and addressing the grievances received from the stakeholders until the ultimate means in resolving issues i.e. through the legal proceeding. Meetings with external stakeholders and the grievance resolution books at individual estates have been initiated.

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


Objective

evidence:

The system resolves disputes in an effective, timely and appropriate manner. The established grievance procedures specifies the estimated time shall be taken for each of the process to be addressed before proceed to the subsequent process.

6.3.3 The system is open to any affected parties Minor


Objective

evidence: Observed during the audit that the above system implemented is open to any affected parties. For external stakeholders, the above system is made available in the company’s website http://www.simedarbyplantation.com/

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:

Not applicable as the neighbouring communities are recent migrants (in the 1960s). There are no indigenous communities within or surrounding SOU 24 that holds legal or customary rights over the land. There is no dispute reported at the time of audit. However, the procedure for negotiation is made publicly available in the company website at:


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:

Not applicable as the neighbouring communities are recent migrants (in the 1960s). There are no indigenous communities within or surrounding SOU 24 that holds legal or customary rights over the land. There is no dispute reported at the time of audit. However, the procedure for negotiation is made publicly available in the company website at:


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

Minor


Objective

evidence:

There are no indigenous communities within or surrounding SOU 24 that holds legal or customary rights over the land.

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


Objective

evidence:

Every worker is paid the recently government decreed minimum wage and this is well in line with the company’s commitment. The estates also encourage the workers to keep on improving their productivities in order to earn more. Samples of payslip were checked and it was evident that most workers earned more than the minimum wage. A couple of spraying workers and their mandore were interviewed on whether they understood the various pay or deduction items contained in their payslips. The followings are some of the rates obtained from documents at CEP Renggam Estate. Some of the rates are based on piece-rated and the amount the worker receives depends on their

http://www.simedarbyplantation.com/



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productivity. a) Basic Pay : RM642.75 b) Price Bonus (based on MAPA Agreement) : @ RM4.90 per day (Dec 2013) c) Holiday Overtime : daily rated d) Phone allowance : RM 5/mth e) Vacation overtile/ Afternoon work : based on piece rated work f) Festive /religious token : RM 100 (once per year)

Sime Darby plantations also provide rice and cooking oil for the workers on monthly basis.

For each of the workers, the payment scheme is applied based on the Joint Agreement between MAPA and NUPW. The agreement stipulates the rates as well as the terms and conditions of payment for the various categories of essential work activities in the oil palm plantations. The latest agreement dated 18 January 2013 was available during the audit.

Each worker receives his/her pay slip that contains clear details of the salary paid and deductions made as follows:

Number of days worked in a month

Overtime

Sick leave pay

Annual leave pay

Public holiday pay

Off day pay

Worker’s daily attendance incentive

EPF contribution and deduction (except for foreign workers)

SOCSO contribution and deduction (except for foreign workers but replaced by workmen compensation scheme)

Advance collected in the mid month

Gross earnings

Net earnings

Several payslips for harvesters and sprayer workers were inspected. In general, harvesting workers received between RM2,200 -4,600/month depending on how much tonnage of FFB harvested while sprayers received between RM1,550-2,300/month.

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: For each of the workers, the payment scheme is applied based on the Joint Agreement between MAPA and NUPW. The agreement stipulates the rates as well as the terms and conditions of payment for the various categories of essential work activities in the oil palm plantations. The latest agreement dated 18 January 2013 was available during the audit.

The contracts are found to be specifying the followings:

Working hours;

Salary rates (with reference to the agreement between MAPA and NUPW);

Deduction;

Payment for overtime;

Leave entitlement covering annual leaves, sick leaves, maternity leave and public holiday;

Entitlement for basic amenities in term of housing, electricity, water supply;

Workmen Compensation Scheme for Foreign Workers;

Procedure for dismissal and period of notice; and

Safety and health of the workers.

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With regard to the workers insurance, the workers are covered through the group insurance. During the audit, the insurance policy for foreign workers bearing policy number FW050979 with a validity from 13 April 2013 to 12 April 2014 and FW05618 with validity from 01 July 2013 to 30 June 2014 for CEP Renggam and Kulai Estates respectively are made available to the auditors for inspection.

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:

Adequate housing, water supplies, medical, educational and welfare amenities provided to workers. Workers have access to clean water, segregated sanitary and bathing facilities and electricity. All employees are given adequate housing, medical, educational and welfare amenities and waste disposal facilities in accordance with Workers’ Minimum Standard of Housing and Amenities Act. Disposal of domestic solid wastes at the linesite is conducted at least twice weekly.

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: Company has a policy that allows workers to join trade union. Workers are reported to be members of NUPW. The auditing team met with a number of union leaders in different estates and confirmed that regular meetings with the management were evidently held. Minutes of such meetings were maintained and made available to the auditing team during the main assessment. The Union has also held meetings with the Management in cases where the matters discussed and actions taken could not resolve the issues concerned at estate or mill level. The minutes for each of the meetings held to discuss internal issues by union or worker representatives and the estate management were available during the audit.

1. CEP Renggam Estate

8 July 2013 attended by 7committee members of which 4 of them are the NUPW and workers union representatives.

2. Kulai Estate

27 April 2013 attended by 7 committee members of which 3 of them are the NUPW and worker unions representatives

26 September 2013 attended by 6 committee members of which 4 of them are the NUPW and worker unions representatives

3. Hadapan POM

30 December 2013 attended by 10 committee members of which 7 of them are the NUPW and workers union representatives

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


Objective

evidence:

A published policy statement dated April 2011 in local languages recognizing freedom of association is available. There is a published statement in English and Bahasa Malaysia under the SOU’s Social Policy recognizing freedom of association that is signed by the Manager of the Estates and Mill. The policy specifies the company’s commitment to in full respect and with no intention of obstruction for workers to get involve in workers union as it is stated in the workers union act 1959 that highlighted:

Section 8 of Employment Act 1955 stated that “Nothing in any contract of service shall in any manner restrict the right of any employee who is a party to such contract: (a) to join a registered trade union; (b) to participate in the activities of a registered trade union, whether as an officer of such union or otherwise; or (c) to associate with any other persons for the purpose of organising a trade union in accordance with the Trade Unions Act 1959 [Act 262].”

Section 5(1) Industrial Relations Act 1967 stated that “No employer or trade union of employers, and no person acting on behalf of an employer or such trade union shall -

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(a) impose any condition in a contract of employment seeking to restrain the right of a person who is a party to the contract to join a trade union, or to continue his membership in a trade union; (b) refuse to employ any person on the ground that he is or is not a member or an officer of a trade union; (c) discriminate against any person in regard to employment, promotion, any condition of employment or working conditions on the ground that he is or is not a member or officer of a trade union; (d) dismiss or threaten to dismiss a workman, injure or threaten to injure him in his employment or alter or threaten to alter his position to his prejudice by reason that the workman -

(i) is or proposes to become, or seeks to persuade any other person to become, a member or officer of a trade union; or (ii) participates in the promotion, formation or activities of a trade union; or

(e) induce a person to refrain from becoming or to cease to be a member or officer of a trade union by conferring or offering to confer any advantage on or by procuring or offering to procure any advantage for any person.”

The policy also stated company’s commitment to allow each worker that is eligible to be represented by the union if there is any argument that will be discussed accordingly to the Collective Agreements basis.

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: There is documented evidence in the form of individual worker’s particulars and contracts demonstrating that the minimum age requirement was met. Sime Darby has a policy not to use underage worker and there is no evidence of children working in the field. Based on the employment record, the youngest worker employed is 24 years old for local workers and 21 years old for foreigners.

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: There is a Social Policy available dated April 2011 which states, among others, the SOU’s policy for equal opportunities in terms of “recruitment, progression, terms and conditions of work and representation, irrespective of race, caste, national origin, gender, colour, disability, sexual orientation, union membership, political opinion, religion and/or age.”

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

Minor


Objective

evidence: There is no evidence to suggest the existence of any discrimination against foreign workers. Equal opportunities are demonstrated through issues such as similar daily wages for foreign workers and local workers. In addition, the foreign workers are also not discriminated in terms of working hours vis-a-vis the local workers. With regards to basic amenities, both foreign and local workers are provided with the same facilities.

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: There is a Social Policy available dated April 2011 which states, among others, the SOU’s policy for the prevention of sexual harassment and all other forms of violence against women.

6.9.2 A specific grievance mechanism is established Minor


Objective

evidence:

A specific grievance mechanism is established. Grievance mechanism is in place that is built in within the procedures for handling complaints and grievances (QSHE/02/4.2.3). The document details the procedures and mechanism applied to resolve all disputes and grievances raised by

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the relevant stakeholders. In addition there is a gender committee and a nominated gender representative at all the four estates and mill. The official appointment letter signed by the manager of each of the estates and mill is also made available to the auditing team during the Surveillance Audit that specifies the following:

To investigate any report pertaining to the sexual harassment and to suggest the disciplinary action for the harassment occur;

To record and keep secret all records of report made by the complainant pertaining to the sexual harassment as well as action taken for each of the complaints received;

To give advice and counseling to the particular workers that require assistance on issues relating to sexual harassment; and

To assist the estates and mill in organizing all programs and trainings that aims to reduce the occurrence of sexual harassment in workplace.

Based on records, since last Surveillance Audit the Gender Committee has been convened for the visiting estates and mill on the following dates:

Estate/Mill Date

CEP Renggam Estate 20 Dec 2013;

02 Aug 2013;

05 May 2013;

Kulai Estate 22 October 2013;

11 June 2013;

25 January 2013

Hadapan POM 27 August 2013;

20 February 2013

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 mechanisms for FFB and inputs/services is documented. The pricing of inputs/services such as road maintenance contracts, supplier’s pricing details are clearly stated in the individual contracts for suppliers/contractors.

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


Objective

evidence:

Current and past prices paid for FFB is publicly available. There is a tender process for suppliers/contractors at the estate and mill levels, inviting the quotations from the stakeholders. All prices paid for the FFB is available in the payment chit which is traceable for the present and past prices.

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:

Adequate evidence that all parties understand the contractual agreements they enter into, and that contracts are fair, legal and transparent. SOU 24 does not have a policy to purchase FFB from smallholders. However, there is a tender process for suppliers/contractors at the estate and mill levels, inviting the quotations from the stakeholders.

6.10.4 Agreed payments shall be made in a timely manner Minor


Objective

evidence:

Agreed payments are made in a timely manner. Interviews with suppliers and contractors at the estates reveal that all payments are made in a timely manner. Several contracts with the suppliers and contractors evidenced that for each of the works employed to the suppliers and contractors, the term and payment are made within 5 working days after the receipt or finalization of the agreed job.

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 Minor

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consultation with local communities


Objective

evidence:

The individual estates and the mill have a very basic form of corporate social responsibility (CSR), which usually involves stakeholders, especially the local communities approaching them for donations on various occasions such as deaths, religious celebrations, for the upkeep and maintenance of schools, family day, sports day etc.

Contribution to local community is an active exercise for SOU 24 and records of contribution i.e. road upgrading, Transport for water supply during drought, school sport activities, security issues concerning workers etc are available at each estate. All activities and contribution rendered are recorded in the Corporate Social Responsibility Report for each of the financial year.

Principle 7: Responsible Development of New Plantings

This whole Principle is not applicable to this assessment as there are no 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.

8.1.1 Minimize use of certain pesticides (C 4.6) Major


Objective

evidence:

Evidence of commitment to minimise use of certain pesticides. SOU 24 is taking effort to make continuous improvement in key areas of activity. There is evidence that effort has been made to minimise use of agrochemicals with the introduction of biological control agents such as barn owl and beneficial plants.

Observed that all records of monitoring and census of the above biological control agents are kept and maintained. For instance Barn Owl Census – conducted twice a year. Example of census are as follows:




8.1.2 Environmental impacts (C 5.1) Major


Objective

evidence:

Commitment to mitigate environmental impacts. A mechanism is in place for environmental management within the operation of the SOU. The document mechanism is found to be updated that covers all activities that is in practice within the operation of the SOU as follows:

Nursery;

Replanting;

Manuring;

Weeding and spraying;

Pest and disease control;

Harvesting and collection;

Field FFB transportation;

Road maintenance;

Workshop;

Scheduled waste store;

General store;

Diesoline station;

Dispensary; and

Estates compound.

The auditor also observed that a budget is in place for workers pertaining to the enhancement and desilting of drains to ensure smooth water flow to the nearby streams.

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Besides the above, the audit team also observed that a documented plan to mitigate all polluting activities is available. Environment Management Programme to mitigate polluting activities for financial year 2013/2014 is in place and implemented. Among the objectives highlighted for the implementation of the programme are as follows:



POME application;




Rubbish disposal;




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

Findings In compliance: Yes: No: X

Objective

evidence:

Commitment to Maximizing recycling and minimizing waste or by-products generation. There is a documented programme in place that promotes maximising recycling and minimising waste or by-products generation in both estates and mill. The identification of waste and by-products generation is adequate. At line site, the management of the estates and mill has allocated a numbers of recycling bin to promote the recycling among the workers and their families. All garbage meant for recycling are subsequently be sold to the garbage collector for recycling purpose. However, the audit team notes that there is evidence of inadequate awareness to implement waste management plan for domestic waste that need to be segregated for reuse and recycle. This can reduce domestic waste for land fill. This situation happen in all visited estates and mill.

(refer to Minor CAR 44)

8.1.4 Pollution prevention plans (C 5.6) Major


Objective

evidence:

A documented plan to mitigate all polluting activities is available. Environment Management Programme to mitigate polluting activities for financial year 2013/2014 is in place and implemented. Among the objectives highlighted for the implementation of the programme are as follows:



POME application;




Rubbish disposal;




8.1.5 Social impacts (C 6.1) Major


Objective

evidence:

The SIA for the mill as well as the four estates are available outlining the methodology approach of the document. All records of meetings, consultation takes place during the SIA is incorporated in the document. List of the stakeholders consulted are also available. There is evidence of action plan incorporated in the SIA. The action plan describes the plan for mitigate the impacts identified in the SIA as well as plan to monitor the impact. A timetable with responsibilities for mitigation and monitoring is reviewed and updated. There is evidence of Action Plan for Social Impact Assessment that is reviewed annually. The revised management plan for FY 2013/2014 dated 01 July 2013 and signed by the Manager of the estates describes the plan for the following issues:

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Problem regarding road access to smallholder;

Dusty road due to FFB transportation/cars/motorcycles;

Request of street lights from main entrance to line site;

Transportation for children to go to school;

Emergency transport ambulance to send workers to clinic or hospital in case of emergency;

Safety awareness training at line site;

Awareness training to the auxiliary police on their rights and power as well as responsibilities;

Organizing more social activities;

Freedom of association to workers;

Requisition for donation to the estate;

Waste management;

Cleanliness of the parked vehicles;

Boundary stone marking (bordering with neighboring communities/estates);

Joint consultative committee meeting;

Stakeholder identification;

Update on grievance procedures;

Overtime monitoring limit;

Freedom of association;

Gender committee; and

Capacity building for workers

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

Minor


Objective

evidence:

A mechanism to capture the performance and expenditure in social and environmental aspects are available. General budget for Corporate Social Responsibility Programme (CSR) and Environmental Control Budget for a period of financial year 2014/2015 are available and recorded

in the file named Principle 3: Commitment to long term economic and financial viability under the specific section i.e. Report: E11.0 Estate Cost.. The budgeted programme are found to be covering the following:

drains into the nearby streams; and

f water piping for supplying government supplied water.

3.1.2 Supply Chain (Module D)

For supply chain, the Sime Darby SOU 24 Palm Oil Mill has decided to use Module D 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 D: Segregation

Module D.1: Documented Procedures

Criterion D.1.1: The facility shall have written procedures and/or work instructions to ensure the implementation of all the elements specified in these requirements.

D.1.1.1 Complete and up to date procedures covering the implementation of all the elements in these requirements


Objective

evidence:

In the Mill Quality Manual System, the following SOP is available both in hard copy and soft copy. The SOPs are also available at the Work Station. The SOP includes:

Reception Stations

Fruit handling stations

Sterilisation station

Threshing station

Pressing Station

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Clarification station

Depericarping station

Kernel Recovery station

Boiler Station

Power generation

Product Storage & Despatch

Laboratory

Oil Recovery Station

Water treatment plant

ETP

Workshop and maintenance

D.1.1.2 The name of the person having overall responsibility for and authority over the implementation of these requirements and compliance with all applicable requirements

Verifiers and guidance:

This person shall be able to demonstrate awareness of the facilities procedures for the implementation of this standard.


Objective

evidence:

En. Ahmad Faiz b. Abu Bakar (Assistant Engineer) was appointed for an authority over the implementation of these requirements and compliance with all applicable requirements on 6th Feb 2013. Evidence of letter appointment is available.

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


Objective

evidence:

Inter-office mail was submitted for the management approval on 12th March 2013 by the PSQM Department to inform that a revised SOP Version 2.0. The SOP contains documented procedures for receiving and processing of certified and non certified FFB.

Module D.2: Purchasing and Goods In

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


Objective

evidence:

Hadapan POM only receives from SOU 24 estates and directly managed estates by Sime Darby which are RSPO certified. As of today they do not receive from non-certified sources.

Criterion D.2.2: The facility shall inform the CB immediately if there is a projected overproduction.


Objective

evidence:

Inter-office mail was submitted for the management approval on 12th March 2013 by the PSQM Department to inform that a revised SOP Version 2.0. The SOP contains a procedure to inform CB for any projected overproduction.

Module D.3: Record Keeping

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


Objective

evidence:

Hadapan POM keeps all updated records and reports covering all aspect of Supply Chain Certification System and made readily accessible. List of records available are as follow:

CPO Contract.

Month End Stock Figures (up to Nov 2013).

Reconciliation statement report.

Weighbridge FFB receives ticket.

Weighbridge ticket dispatch.

Monthly Crop Report.

Monthly theoretical OER for Group Estates.

Daily Production Summary Report.

Monthly Production Report (Physical movement).

DOE Quarterly Wastewater return form AS4 (Approved BOD for land application: 5,000mg/l).

Criterion D.3.2: Retention times for all records and reports shall be at least five (5) years.

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Objective

evidence:

Retention times for all records and reports is at least five (5) years as stated in the SOP for Traceability and RSPO Supply Chain Certification System (Version: Aug 2008).

Criterion D.3.3: 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.


Objective

evidence: The Mass Balance File for financial year 2012/2013 is available. Observed that the company records and balances all receipts of RSPO certified FFB and deliveries of RSPO certified CPO, PKO and palm kernel meal on a three-monthly basis.

Criterion D.3.4: The following trade names should be used and specified in relevant documents (e.g. purchase and sales contracts, *product name*/SG or Segregated). The supply chain model used should be clearly indicated.


Objective

evidence:

Up to date, there is no any sale of RSPO certified product yet. However, Hadapan POM shows a template that the receiving and delivery WB ticket has shown that the material is specified as *product name*/SG. Samples observed are as follow:

1. FFB Receive Ticket: a) Ticket No: 72900 (11/3/2013) b) Supplier: Layang Estate c) Crop Type: FFB B Crop/SG d) In the Template Delivery ticket

2. CPO Dispatch Ticket:

a) Ticket No: 006349 (11/3/2013) b) Customer: Pan Century Edible Oils Sdn Bhd c) Product Type: Crude Palm Oil/SG

Module D.4: Sales and Good Out

Criterion D.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

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:

Hadapan POM has a prepared a template of sales invoices issued for RSPO certified products delivered. The samples Dispatch Ticket (No: 006349) includes the following information:

Name and address of the buyer: Pan Century Edible Oils Sdn Bhd

Date issued: 11th March 2013

Product Description: CPO/SG

Quantity: 39,650kg

Module D.5: Processing

Criterion D.5.1: The facility shall assure and verify through clear procedures and record keeping that the RSPO certified palm oil is kept segregated from non-certified material including during transport and storage and be able to demonstrate that is has taken all reasonable measures to ensure that contamination is avoided. The objective is for 100% segregated material to be reached. The systems should guarantee the minimum standard of 95% segregated physical material; up to 5% contamination is allowed.


Objective

evidence:

Hadapan POM has been receiving certified material from Sime Darby Plantation directly managed estates since July 2012. The systems should guarantee the minimum standard of 95% segregated physical material.

Criterion D.5.2: The facility shall provide documented proof that the RSPO certified palm oil can be traced

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back to only certified segregated material.


Objective

evidence:

The facilities only received certified material from their own Group. They are able to track back the source from the production and reception records.

Criterion D.5.3: In cases where a mill outsource activities to an independent palm kernel crush, the crush still falls under the responsibility of the mill and does not need to separately certified. The mill has to ensure that:

a) The crush operator conforms to these requirements for segregation

b) The crush is covered through a signed and enforceable agreement


Objective

evidence:

Hadapan POM did not have any outsources activities for palm kernel crush. They sell their palm kernel to other company and did not buy back any Palm Kernel.

Module D.6: Training

Criterion D.6.1: The facility shall provide the training for all the staff as required to implement the requirements of the Supply Chain Certification System.


Objective

evidence:

Since last audit, only a single training on supply chain has been conducted by Hadapan POM. The training has been conducted by Mr. Ahmad Faiz Abu Bakar on 08 June 2013 and attended by 15 personnel from relevant working field/station such as weighbridge operator, QA and Lab operator.

Module D.7: Claims

Criterion D.7.1: 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.


Objective

evidence:

Hadapan POM has not made any claims yet. The RSPO Trademark License Number for Sime Darby Plantation Sdn. Bhd. is RSPO-1106024.

3.2 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

Name: Haye Semail

Designation: Manager – Natural Resources

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APPENDIX A: CORRECTIVE ACTION REQUEST

CAR Raised under P&C

CAR

#

Indicator CAR Detail

03 4.2.2 Date

Recorded> 18/12/08 Due Date> Next surv

Date

Closed> 17 February 2012

Non-Conformance:

Inconsistency of periodic tissue and soil sampling being carried out to monitor changes in nutrient status.

Objective Evidence:

Soil sampling not undertaken. i. Soil sampling not undertaken to support best management practices. ii. Soil maps found inadequate and need to be updated.

Close-out evidence:

In practice, the soil sampling is conducted by the RnD Division of the Sime Darby Plantation on estate by estate basis. The procedure in conducting the soil sampling analysis is stipulated in the Section 4 of the Sustainable Plantation Management System. Based on the procedure, the interval of the soil sampling analysis is conducted every 25 years. Soil/Foliar Analysis for 2010/2011 is available. In addition, Soil/Foliar Analysis for 2011/2012 is budgeted in the estate budget

10 4.4.7 Date


Date


Non-Conformance:

Inadequate water management plan.

Objective Evidence:

Onsite management planning inadequate. i. Onsite Management Planning inadequate. ii. Plans detailing the different aspects of ground and surface water management not available.

Close-out evidence:

Water management plan is available for financial year 2011/2012. The plan is divided into three sections as follows:

Reduction of water usage for financial year 2011/2012

Contingency Plan During Water Shortage for financial year 2011/2012

Water usage for monthly basis for financial year 2011/2012

Observation made in the estates visited evidenced the availability of Action Plan with regard to the managing of water usage such as:

Action Plan for Reduction of Water Usage; and

Action Plan for Water Sampling from stream and river

In addition, there is also the Water Management in Coastal and Peat Plantings that is described in the Agricultural Reference Manual (ARM)

13 4.6.1 Date


Date


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CAR

#


Non-Conformance:

Insufficient written justification in Standard Operating Procedures (SOP) of all agrochemicals use.

Objective Evidence:

Written justification for all agrochemicals used not comprehensive. i. Written justification only available for certain agrochemicals thus not comprehensive.

Close-out evidence:

Usage of agrochemical is described in the Section A10: Weeding and Section B3: Weeding/Spraying of the Standard Operating Procedures of the Estates. The procedure describes the function/justification and methods of applying the agrochemical

20 5.6.2 Date


Date


Non-Conformance:

Lacks of plans are reviewed annually.

Objective Evidence:

No evidence of stated periodicity review of pollution and emission reduction plans.

Close-out evidence:

The EMP is conducted according to Section 5.4.2: QSHE Management Programmes/Action Plans of the Standard Operating Manual (SOM) and reviewed on a yearly basis upon achieving the objective highlighted for the particular year

23 5.6.2 Date


Date


Non-Conformance:

Inadequate timetable with responsibilities for mitigation and monitoring

Objective Evidence:

The revised SIA does not exhibit a timetable which sufficiently addresses responsibilities for mitigation and monitoring. Only Kulai estate provided a revised social management plan during the close-out visit which includes responsibilities for mitigation. However, it does not address monitoring of impacts identified during the SIA. In conclusion, there is no proof of monitoring and allocation of responsibility for mitigation and monitoring for most of the estates and mill.

Close-out evidence:

There is evidence of action plan incorporated in the SIA. The action plan describes the plan for mitigate the impacts identified in the SIA as well as plan to monitor the impact.

26 6.11.1 Date


Date


Non-Conformance:

Inadequate timetable with responsibilities for mitigation and monitoring

Objective Evidence:

i) There is no evidence of demonstrable contributions to local development that are based on the results of consultation with local communities, i.e. to identify their own priorities and needs, including the different needs of men and women.

ii) There is no clearly defined CSR objective/goals or plan of action. The CSR evidence demonstrates that CSR at the estate level is ad-hoc, i.e. there is no medium/long-term planning for CSR activities. iii) The percentage of the plantation’s profit/turnover for social development projects is unclear.

Close-out evidence:

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CAR

#


The individual estates and the mill have a very basic form of corporate social responsibility (CSR), which usually involves stakeholders, especially the local communities approaching them for donations on various occasions such as deaths, religious celebrations, for the upkeep and maintenance of schools, family day, sports day etc.

Contribution to local community is an active exercise for SOU 24 and records of contribution eg road upgrading, Transport for water supply during drought, school sport activities, security issues concerning workers etc are available at each estate.

All activities and contribution rendered are recorded in the Corporate Social Responsibility Report for each of the financial year.

27 4.4.1 Date


Date


Non-Conformance:

Inadequate demonstration of the 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.

Objective Evidence:

Buffer zone restoration and demarcation is inconsistently undertaken in the different states. Management guidance is not uniform not formalized.

Close-out evidence:

There is a Policy Slope and River Protection, signed by top management of Sime Darby Plantation dated April 2011.

In addition, all buffer zones identified within the estates are mapped. Observed evidence of map depicting buffer zone and waterways in the estates visited.

28 4.4.2 Date


Date


Non-Conformance:

Evidence on construction of bunds/weirs/dams across the main rivers or waterways passing through an estate.

Objective Evidence:

The conditions required by the Jabatan Pengairan dan Saliran in a letter dated on the 5th

of January need to be fulfilled.

Close-out evidence:

Visit during the surveillance visit evident that no construction of bunds, weirs and dams were observed in the estates. All provisions stipulated in the Department of Irrigation and Drainage (DID) is fulfilled

29 5.2.1 Date


Date


Non-Conformance:

Inadequate Identification and assessment of HCV habitats and protected areas within land holdings; and attempt assessments of HCV habitats and protected areas surrounding landholdings.

Objective Evidence:

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CAR

#


Identification and assessment of HCV habitats and protected areas not undertaken. i. Identification and assessment of HCV habitats has not been undertaken with the six HCV values

accepted at international level. ii. Inadequate biodiversity baseline assessment was attempted.

Inspection into the baseline assessment report evidenced several fauna species that is found observed in the estate that is classified as non-ERT. However, verification in the WCA, 2010 evidenced that three fauna species i.e. white egret and kingfisher are listed as protected species thus require stakeholder and

expert review on ERT identification. (Minor CAR 29 upgraded to Major CAR 36).

Close-out evidence:

30 5.6.1 Date


Date


Non-Conformance:

Inadequate documented plans to mitigate all polluting activities.

Objective Evidence:

Records of plan implementation and monitoring of effectiveness inadequate.

Close-out evidence:

Environment Management Programme (Form MR-03/QSHEP) to mitigate polluting activities for 2011/2012 is in place and implemented highlighting two objectives i.e. (i) Zero Spillage at POME application and (ii) to achieve black smoke density of less than 40% for less than 15 min per day for financial year 2011/2012. According to the plan, the data is collected every 3 months. In addition, records of plan implementation and monitoring of effectiveness is available and observed.

31 6.1.1 Date


Date


Non-Conformance:

Inadequate documented social impact assessment including records of meetings.

Objective Evidence:

The SIA still lacks detail and falls short of its own goals and criteria which were outlined in the methodology/approach

Close-out evidence:

The SIA for the mill as well as the four estates are available outlining the methodology approach of the document

32 4.4.3 Date


Date

Closed> 09 January 2014

Non-Conformance:

Outgoing water into main natural waterways is not monitored at a frequency that reflects the estates and mills current activities which may have negative impacts

Objective Evidence:

No monitoring takes place for every water analysis taken.

Surveillance 02:

Submitted evidence was insufficient so this CAR is maintained.

Close-out evidence:

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CAR

#


Both visiting estates do monitor water quality flowing through the estate. Sampling points are available in Water Hydrology Map. Both the treated water and the natural waterways water are analysed on a three month basis with the latest sampling and analysis was conducted on 13 November 2013 and 15 November 2013 respectively (CEP Renggam) as well as 20 December and 30 December respectively (Kulai Estate). The forthcoming sampling and analysis schedule to be conducted February and March 2014 for CEP Renggam and Kulai Estate respectively.

For mill, the latest analysis of water has been conducted on 17 October 2013 and the analysis was conducted on 31 October 2013.

33 4.7.1 Date


Date

Closed> 14 March 2013

Non-Conformance:

Evidence of documented Occupational Safety Health (OSH) plan that is not compliance with OSH Act 1994 and Factory and Machinery Act 1967(Act 139).

Objective Evidence:

Visit to the estates observed that workers handling of first aid kit are not properly trained as evident in Layang-layang and Seri Pulai. First aid is also not present in the working field

Close-out evidence:

Submitted evidence do not show that the mandores are competent in handling the first aid kits after

training.

This CAR (mistakenly raised as a Minor when in fact a Major) is closed and Observation 06 is raised for

the auditors during the next surveillance to verify.

Observation 06 – Raised

34 4.8.1 Date


Date


Non-Conformance:

Inadequate training programme that includes regular assessment of training need and documentation, including records of training for employees.

Objective Evidence:

Record showed that there is no chemical handling training conducted to Health Assistance. In addition, the manuring workers are observed to be not adequately trained

Close-out evidence:

Submitted evidence do not show that the HA attended the chemical handling or awareness and the

manuring training material and attendance were not able to be produced although the programme said

training was conducted.

This CAR (mistakenly raised as a Minor when in fact a Major) is closed and Observation 07 is raised for

the auditors during the next surveillance to verify.

Observation 07 – Raised

35 5.1.1 Date


Date


Non-Conformance:

Inadequate documented aspects and impacts risk assessment.

Objective Evidence:

The documented of environmental aspect is incomplete e.g. manuring and replanting.

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CAR

#


Close-out evidence:

The environmental aspect and impact has been updated into HIRARC and made available during ASA02.

M36 5.2.1 Date

Recorded> 17/02/12 Due Date> 16/05/12

Date

Closed> 14/04/2012

Non-Conformance:

Inadequate Identification and assessment of HCV habitats and protected areas within land holdings; and attempt assessments of HCV habitats and protected areas surrounding landholdings.

Objective Evidence:

Inspection into the baseline assessment report evidenced several fauna species that is found observed in the estate that is classified as non-ERT. However, verification in the WCA, 2010 evidenced that three fauna species i.e. white egret and kingfisher are listed as protected species thus require stakeholder and

expert review on ERT identification. (Minor CAR 31 upgraded to Major CAR 38).

Close-out evidence:

Sime Darby has submitted the details of stakeholder consultation takes place to identify the population status of the species listed in the biodiversity assessment. The list of the stakeholder consulted is also available.

37 5.3.2 Date


Date


Non-Conformance:

Operational plan to avoid or reduce pollution is not properly implemented.

Objective Evidence:

Waste management plan is not properly documented to avoid or to reduce pollution. Evidenced domestic waste is not segregated at the line site i.e. observed glass, aluminium can, plastic bottle, tyre.

In Seri Pulai there is evidence of container of black oil found on the field. In addition, there is evidence of oil trap is not functioning properly

Close-out evidence:

Evidence was submitted to show that :

Waste management plan is properly implemented to avoid or to reduce pollution.

Evidenced domestic waste is now segregated at the line site with the placement of recycle bins to collect

recycle materials

In Seri Pulai, the black oil was sent to the Schedule Waste Store and that the oil trap at the workshop

and the Schedule waste Stroe is now constructed to cater for heavier discharge.

Minor CAR 37 is considered closed

38 4.4.7 Date

Recorded> 14/03/13 Due Date> 13/03/14 Date


Non-Conformance:

Evidence of water management plan is no available.

Objective Evidence:

No action conducted to look into the results of water sampling analysis. Some of the parameters for domestic water usage like coli form analysis are not tested. The chloride content for both the local and outside test was above the recommended. (i.e: In Feb 2013 tested chloride of 49-51mg/l and the COD is 12-24mg/l.

Close-out evidence:

GP 7003A of 63


CAR

#


Verification during the ASA03 showed that the company has using the water supplied by the government i.e. Syarikat Air Johor for both management/operation and domestic use in the estate. With regard to water sampling analysis, based on record, the water sampling analysis is found to be

conducted on a three month basis with the latest analysis dated 15 November 2013 and covering the

parameters such as pH, Alkalinity, BOD, COD, Total Solid, Suspended Solid, Nitrogen Compound,

Ammonical Nitrogen and Oil as well as Grease.

In Kulai Estate, latest sampling was conducted on November 2013 and based on result of the analysis;

the audit team observed that with the exception of pH level, all other parameters recorded below the

threshold level.

39 4.5.2 Date



Non-Conformance:

Monitoring extent of IPM implementation for major pests is not conducted.

Objective Evidence:

IPM implementation is not monitored in accordance to SOP. In Layang estate, records of census for bagworm were available. However, records of threshold reached and comments from estate management for the application of chemical is lacking.

Close-out evidence:

Monitoring of IPM implementation is done on a block by block basis and is recorded in IPM Census Summary:

Barn Owl Census – conducted twice a year. Example of census are as follows:




Ganoderma Ganoderma Census files. Ganoderma census to control the occurrence of ganoderma at matured trees. The records are observed to be captured on block by block basis. Monitoring records for 2008 to 2012 (up to May 2013) is available that is done annually. Census categorises the severity of the infection.

Bagworm - census records are available. Observed that for every records of threshold reached, the audit team note that recommendation from the top management i.e. from Sime Darby Research Sdn Bhd is sought by the company to guide on the next steps. For example in 25 February 2013, there is evidence of bagworm occurrence that is beyond the threshold level and recommendation from the Sime Darby Research has been obtained whereby a trunk injection is recommended by using metamidaphos. Based on records, the application of Cypermetrin is no longer using mist blowing. Instead, te company currently using normal knapsack spraying equipment for such purpose. Records on usage of cypermethrin for bag worm campaign are available in the stock card as evidence the last application in April 2013.

40 5.3.2 Date



Non-Conformance:

Wastes and pollutants and an operational plan should be identified and developed, but not implemented to avoid or reduce pollution.

Objective Evidence:

GP 7003A of 63


CAR

#


a) Chemical containers (Supersate) are not triple rinse before stored into the Schedule Waste store and contaminated gloves and racks in the mill workshop are not disposed in Schedule Waste bin.

b) Evidence of reused chemical container as loose fruit scrapper (contract workers & loose fruit collection station.

c) Indiscriminate disposal of domestic waste into Moisture Conservation Pit (MCP) d) Clinical wastes in Layang estate are not being disposed off accordingly.

Close-out evidence:

Scheduled waste containers are found to be recorded in the document Waste Management review and Monitoring for the respective financial year.

Observed latest record for FY 2013/2014 is available detailing the following:

SW

Code Description Unit Total recorded Total disposed

305 Spent lubricant oil L 1033 550 (19 Nov 2013)

410 Rags, Plastics, papers, contaminated filters

Pcs 52 Nil

409 Chemical containers/pesticides Pcs 553 433 (31 Dec 2013)

404 Clinical waste pcs Nil Disposed on 03 January 2014

Clinical waste: appointing Pantai Medivest Sdn. Bhd. as the scheduled waste collector. Latest collection was done on 03 January 2014 & 17 December 2013 for CEP Renggam and Kulai Estates respectively.

Scheduled waste: appointing Perniagaan Saudara Baru & OLST Petro-Chemical Sdn. Bhd. as the waste collector. Latest collection was conducted on 19 November 2013 and 11 September 2013 where used lubricant oil, hydraulic oil, contaminated item has been collected.

For mill: scheduled waste disposal is done through the appointed scheduled waste collected i.e. Hiap Huat Chemical Sdn. Bhd. latest collection recorded were conducted on 21 June 2013 where used lubricant and hydraulic oil as well as empty drums has been collected.

Field verification at both estates showed that there is no evidence of reuse of chemical container other than its intended usage. In addition visit to the chemical storage showed all empty chemical containers are triple rinsed and perforated before stored at the scheduled waste store to be disposed by the appointed scheduled waste collector.

41 4.4.1 Date


Date


Non-Conformance:

Water courses and wetlands are not protected

Objective Evidence:

During the field visit, the audit team observed that there is evidence of circle spraying applied close to the river where the palm is located within the buffer zone. Furthermore, buffer zone is not demarcated on the ground at block no. 89A near to the Hindu Temple.

Close-out evidence:

Following to the audit, the company has taken action to verify the Major CAR issued through conducting

an awareness training to all sprayers pertaining the requirements to not to spray in the bufferzone. The

detail of the training that was conducted on 16 January 2014 is made available to the audit team on 10

March 2014. Based on the objective evidence submitted, the audit team observed that the training was

conducted by the estate assistant and attended by 14 sprayers and mandores of the estate. In addition,

the company has also taken action to erect more signages to depicting the location of the bufferzone.

Pictorial evidence of the signages are made available to the audit team together with the training records

on 10 March 2014. Major CAR 41 closed.

42 4.7.1 Date


Date


Non-Conformance:

GP 7003A of 63


CAR

#


Documented OSH plan is not fully implemented.

Objective Evidence:

The audit team observed that there are several non-compliance to the requirement of this Indicator as follows:

First aid kits are not available in the vicinity of harvesting activity at CEP Renggam estate;

First aid tools and content is kept in a plastic bag due to original box was damaged (Harverster group at Kulai Estate); and

First aid content such cotton wool is not safe to be used due to hygienic issue at all sites.

Close-out evidence:

Following to the audit, the company has taken action to verify the CAR issued whereby the company has

produce a specific form to monitor the usage of the first aid tools and contents. The form also is

subjected for monthly inspection by the health assistance. In addition, the audit team also has been

made available a pictorial evidence of a new set of first aid kit to be supplied to all harvesting team for all

estates. All of the above objective evidences have been submitted to SGS on 10 March 2014.

43 5.2.1 Date


Date


Non-Conformance:

Documented OSH plan is not fully implemented.

Objective Evidence:

The audit team note that current HCV assessment report is only focused on fauna, flora and ecological component only. There is no coverage on social aspect related to HCV component i.e. historical site

found in Kulai Estate which is not stated in the HCV list.

Based on the above, the audit team note that the new document has yet to be formulated despite that the assessment of the new set of HCV has been conducted on 16-20 December 2013.

Close-out evidence:


In view that the company has taken action to formulate the assessment report incorporating all issues

resulted in the issuance of the Major CAR, the audit team is of the view to close the Major CAR.

However an Observation 07 is raised to further monitor this during next surveillance audit in view that

the document is subject to further review by the company’s top management.

44 5.3.2 Date

Recorded> 09/01/2014 Due Date> Next Surv

Date

Closed>

Non-Conformance:

Operational plan to reduce pollution is not adequately implemented

Objective Evidence:

The audit team observed that there is evidence of still inadequate awareness to implement waste management plan for domestic waste that need to be segregated for reuse and recycle. This can reduce domestic waste for land fill. This situation happen in all visited estates and mill.

Close-out evidence:

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CAR Raised under Supply Chain Standard

CAR # Indicator CAR Detail

NC01 D.3.3 Date

Recorded> 14

th Mar 13 Due Date> 13

th May 13

Date

Closed> 6

th May 13

Non-Conformance:

The facility do not have 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.

Objective Evidence:

The facility do not have 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.

Close-out evidence:

Hadapan POM has submit the evidence of record and balance of all RSPO certified FFB received, delivered CPO, PKO and Palm Kernel meal on a three monthly basis. Example of transactions for second Quarter 2013 evidence are as below:

a. FFB Received: 45,884.32MT b. CPO Produced: 9,998.59MT c. Certified RSPO Despatched: 10,135.27MT

NC01 is closed.

NC02 D.5.1 Date

Recorded> 14

th Mar 13 Due Date> 13

th May 13

Date

Closed> 6

th May 13

Non-Conformance:

The facility inadequately provides the training for all the staff as required to implement the requirements of the Supply Chain Certification System.

Objective Evidence:

There is no training conducted for operating station on the requirements of the SCCS. During interview, the Weighbridge staff is not familiar with the terms of “Mass Balance” and “Segregation”.

Close-out evidence:

Hadapan POM has submitted an evidence of training for RSPO Supply Chain. The training has been conducted by Mr. Ahmad Faiz Abu Bakar on 2

nd May 2013. The training conducted for all

relevant staff such as weighbridge operator, QA and Lab operator and attended by 13 people.

NC02 is closed.

GP 7003A of 63

APPENDIX B: OBSERVATIONS

OBS # Indicator Observation Detail

01 4.4.1 Date

Recorded> 14

th Mar 13 Due Date>

Date

Closed> 09 Jan 2014

Non-Conformance:

Protection of water courses and wetlands including maintaining and restoring appropriate

buffer zone is not being monitored.

Objective Evidence:

Evidence of slight spraying of woodys along the slope in field F3-02 (Culvert).

Close-out evidence:

Major CAR 41 issued due to no progress made by the company to ratify the observation.

02 4.5.4 Date

Recorded> 14

th Mar 13 Due Date>

Date

Closed> 09 Jan 2014

Non-Conformance:

Monitoring of pesticides usage units per hectare or per ton crop is not updated.

Objective Evidence:

Updated pesticides usage in Seri Pulai estate is lacking (up to 2011) and usage of rat baits in

Layang estate not included in the monitoring documents.

Close-out evidence:

Monitoring of pesticides usage for units per hectare or per ton crop is recorded in the Table of Monitoring Pesticide Usage per Hectare per Ton FFB Production. Data is recorded based on the type of pesticides used and recorded on a monthly basis.

Example of data recorded for FY 2013/2014 i.e. December 2013 are as follows:

Chemical Total Pesticide

usage (a.i.) a.i. per Ha

a.i. per tonne

FFB

CEP Renggam

Hextar Cypermethrin 3.3 0.00084 0.00066

Basta - Glufosinate ammonium

13.5 0.00344 0.00271


Ally - Metsulfuron methyl 3900 0.99325 0.78173

Ebor baits - Walfarin 1.38 0.00035 0.00028

Kulai

Basta - Glufosinate ammonium

26.06 0.00948 0.00734

Sodium Chloride 27.23 0.00990 0.00767

Ally - Metsulfuron methyl 1,144.00 0.41614 0.32217

Foxil - Triclopyr 16.44 0.00598 0.00463


Envo - Cypermethrin 14.36 0.00522 0.00404

03 4.6.3 Date

Recorded> 14

th Mar 13 Due Date>

Date

Closed> 09 Jan 2014

Non-Conformance:

MSDS is missing from the chemical storage area.

Objective Evidence:

MSDS for Antracol was found not available in chemical store and no MSDS in the nursery store

of Seri Pulai.

GP 7003A of 63


Close-out evidence:

The pesticide used are stored in the chemical store and clearly labelled. The store is locked and only accessible by the store supervisor for issuance and recorded in bin cards. A place for chemical mixing is properly maintained. Waste from the chemical mixing area will be collected and reuse for the next day. In addition, the audit team also observed that all of the MSDS for the chemical used in the

plantation operation are made available in the chemical store.

04 4.7.1 Date

Recorded> 14

th Mar 13 Due Date>

Date

Closed> 09 Jan 2014

Non-Conformance:

Evidence of documented OSH plan is not properly addressed.

Objective Evidence:

a) There is no specific PPE identified in the HIRARC of Hadapan Palm Oil Mill.

b) First Aid training records for the contract harvesting mandore was missing.

c) Missing of fire extinguisher in the linesite.

Close-out evidence:

Verification during the field visit evidenced that proper PPE is used for workers during working at their respective working areas. Furthermore, fire extinguisher is found to be constantly checked and monitored to ensure that such equipment is at workable stage.

In addition, visit to line site also confirmed that the harvesting sickle is always found with the

protective sheath.

05 5.5.3 Date

Recorded> 14

th Mar 13 Due Date>

Date

Closed> 09 Jan 2014

Non-Conformance:

Evidence of burning waste in the field and linesite.

Objective Evidence:

Burning of waste (including plastic and domestic waste) evidence in the replanting area (Seri

Pulai) and workers linesite (Layang).

Close-out evidence:

Visit to estates line site confirmed no evidence of burning of domestic waste. In addition, the

company also has placed a signboard at linesite to warn workers of ‘No open burning’ allowed

at the line site.

06 4.7.1 Date

Recorded> 14/03/2013 Due Date>

Date

Closed> 09 Jan 2014

Non-Conformance:

Evidence of documented Occupational Safety Health (OSH) plan that is not compliance with OSH Act 1994 and Factory and Machinery Act 1967(Act 139).

Objective Evidence:

Visit to the estates observed that workers handling of first aid kit are not properly trained as

evident in Layang-layang and Seri Pulai. First aid is also not present in the working field

Close-out evidence:

Major CAR 42 was issued due to no progress made by the company to address the

observation issued during last Surveillance Audit.

07 4.8.1 Date

Recorded> 14/03/2013 Due Date>

Date

Closed> 09 Jan 2014

Non-Conformance:

Inadequate training programme that includes regular assessment of training need and

documentation, including records of training for employees.

Objective Evidence:

Record showed that there is no chemical handling training conducted to Health Assistance. In

addition, the manuring workers are observed to be not adequately trained

Close-out evidence:

GP 7003A of 63


08 4.4.3 Date

Recorded>

09 Jan

2014 Due Date>

Date

Closed>

Non-Conformance:

Outgoing water into main natural waterways not properly monitored at a frequency that reflects

the estates and mills current activities which may have negative impacts

Objective Evidence:

Based on analysis record, the water sampling analysis conducted for CEP Renggam Estate

covering the parameters such as pH, Alkalinity, BOD, COD, Total Solid, Suspended Solid,

Nitrogen Compound, Ammonical Nitrogen and Oil as well as Grease. Based on the report, the

audit team observed that test result for all parameters namely pH, COD, Suspended Solid and

Ammonical Nitrogen showed above the threshold level specified in the Plantation Quality

Management System document, Table: Results of Water Quality Analyses (Natural

Waterways). Based on record, observed that the reason for the increase of the parameters are

due to water leached from the dumping site. Complaint letter has been submitted to the

Jabatan Pengurusan Sisa Pepejal Negara through Majlis Daerah Simpang Renggam voicing

the company’s concern on the decrease level of water quality in the natural waterways that

affecting the water analysis result. Observed that the letter Ref No.: MDSR/KES/54

Jld.01/2012(55) dated 26 December 2013 is available. Currently the company is awaiting

response from the Jabatan Pengurusan Sisa Pepejal Negara. This issue needs to be

monitored and control. To be verified next surveillance.

Close-out evidence:

09 5.2.1 Date

Recorded>

10 Mar

2014 Due Date>

Date

Closed>

Non-Conformance:

Identification and assessment of HCV habitats and protected areas within land holdings and

attempt assessments of HCV habitats and protected areas surrounding landholdings are not

fully implemented.

Objective Evidence:

In view that the company has taken action to formulate the assessment report incorporating all

issues resulted in the issuance of the Major CAR, the audit team is of the view to close the

Major CAR. However an Observation 07 is raised to further monitor this during next

surveillance audit in view that the document is subject to further review by the company’s top

management.

Close-out evidence:

GP 7003A of 63

APPENDIX C: TIMEBOUND PLAN

GP 7003A of 63

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