annual surveillance assessment report (asa-4) public summary€¦ · pangkalan kuras, kabupaten...

RSPO Principles & Criteria Annual Surveillance Assessment Report

Report Number CU809028

RSPOPC-ASAREPORT.F01 EN (02) FEB2012 Page 1 of 30

Control Union Certifications Meeuwenlaan 4-6, 8011 BZ Zwolle, P.O. Box 161, 8000 AD Zwolle, Netherlands

Tel: +31 (0)38 - 426 0100, Fax: +31 (0)38 - 423 7040, E-mail: [email protected]

Annual Surveillance Assessment Report (ASA-4)

PUBLIC SUMMARY

PT Musim Mas

Pangkalan Lesung POM

This public summary has been prepared in accordance with RSPO requirements and the information included is the result of a full RSPO assessment of the Mills and supply base as included in the scope

of the certificate.

Report prepared by: Haeruddin (Lead Assessor) Certification decision by: Gerben Stagemen (Certifier) Control Union Certifications (Head office)

Meeuwenlaan 4-6, P.O. Box 161.

8000 AD Zwolle. The Netherlands.

[email protected] Phone: 0031 38436 0100

Control Union (Malaysia) S/B Persiaran Raja Muda Musa, Off Jalan Sg

Berith, Teluk Gadong, 41100, Klang, Selangor. Malaysia.

Phone 03-3377 1600 / 1700 [email protected]

Control Union (Indonesia)

Jl Kramat 3A, Cilandak Timur Jakarta Selatan 12560

Phone: 062-21-7884 2016 [email protected]

Control Union Certifications is a member of the Control Union World Group - an international inspection and certification body. CU performs assessments and certification in many agricultural based fields such as FSC, RSPO, and Organic production, Sustainable Textile Production, Organic

Exchange, GLOBALGAP, HACCP, BRC, GMP and GTP. CU is accredited by the Dutch Council of Accreditation (RVA) on the European quality standard EN 45011 for the inspection and certification of CU Organic program (according to the EU regulation

2092/91) and GLOBALGAP program. When requested a copy of the accreditation certificate can be obtained from CU.

www.controlunion.com

mailto:[email protected]:[email protected]:[email protected]://www.controlunion.com/






Table of Contents

PART 1: SCOPE OF THE CERTIFICATION AUDIT ........................................................................................... 4

1.1 COMPANY AND CONTACT DETAILS ............................................................................................................ 4 1.2 RSPO MEMBERSHIP DETAILS ................................................................................................................... 4 1.3 ANNUAL SURVEILLANCE ASSESSMENT DETAILS ............................................................................................ 4 1.4 ASSESSMENT TYPE .................................................................................................................................. 4 1.5 LOCATION OF THE PALM OIL MILL ............................................................................................................. 4 1.6 PALM OIL MILL OUTPUT AND APPROPRIATE TONNAGES CERTIFIED ................................................................. 5 1.7 GENERAL DESCRIPTION OF SUPPLY BASE .................................................................................................... 5

1.7.1 Location of the Supply Base .................................................................................................... 5 1.7.2 Statistic of the Supply Base and Estimated of FFB Produced per Year .................................. 6 1.7.3 Percentage of Planted Oil Palm by different Age Ranges ...................................................... 6 1.7.4 Calculation of the Number of Production Units (N) to Sample for the Mill ........................... 6

1.8 PROGRESS OF ASSOCIATED SMALLHOLDERS OR OUTGROWERS TOWARDS COMPLIANCE WITH RELEVANT STANDARDS - SHOULD BE IN ACCORDANCE TO THE 3 YEAR IMPLEMENTATION PLAN ....................................................................... 6 1.9 LOCATION MAP FOR THIS CERTIFICATION UNIT (SEE APPENDIX 1) .................................................................. 6

PART 2: PARTIAL CERTIFICATION ............................................................................................................... 7

2.1 MANAGEMENT STRUCTURE ..................................................................................................................... 7 2.2 NON-COMPLIANCE IDENTIFIED WITH 2.1 ABOVE ......................................................................................... 7 2.3 SUMMARY OF THE TIME BOUND PLAN ....................................................................................................... 7 2.4 UN-CERTIFIED UNITS OR HOLDINGS .......................................................................................................... 8 2.5 SUMMARY OF THE FINDINGS FOR PARTIAL CERTIFICATION ............................................................................. 8 2.6 PARTIAL CERTIFICATION AUDIT AGENDA .................................................................................................... 8

PART 3: AUDIT PROCESS ............................................................................................................................ 9

3.1 ABOUT THE CERTIFICATION BODY ............................................................................................................. 9 3.2 AUDIT TEAM ......................................................................................................................................... 9

3.2.1 Qualifications of the Lead Auditor ................................................................................................. 9 3.2.2 Qualifications of the Assessment Team ....................................................................................... 10

3.3 AUDIT METHODOLOGY ......................................................................................................................... 11 3.3.1 General Overview .................................................................................................................. 11 3.3.2 Audit Agenda ......................................................................................................................... 12

PART 4 ASSESSMENT FINDINGS ............................................................................................................... 13

4.1 LEAD ASSESSOR’S SUMMARY AND RECOMMENDATION FOR CERTIFICATION ................................................... 13 4.2 SUMMARY OF THE FINDINGS BY PRINCIPLE AND A SAMPLE OF THE CRITERIA .................................................... 14

Principle 1: Commitment to Transparency .......................................................................................... 14 Principle 2: Compliance with Applicable Laws and Regulations .......................................................... 14 Principle 3: Commitment to Long-Term Economic and Financial Viability .......................................... 14 Principle 4: Use of Appropriate Best Practices by Growers and Millers ............................................... 15 Principle 5: Environmental Responsibility and Conservation of Natural Resources and Biodiversity .. 16 Principle 6: Responsible Consideration of Employees and of Individuals and Communities by Growers and Millers ............................................................................................................................................ 16 Principle 7: Responsible Development of New Plantings (Not Applicable – No any new planting) ...... 17 Principle 8: Commitment to Continuous Improvement in Key Areas of Activity ................................... 17 4.2.1: Summary findings for Scheme Smallholders (KKPA) PT Musim Mas .......................................... 18

4.3 SAMPLE CRITERIA FOR INCLUSION IN THIS REPORT ON AN ANNUAL BASIS DURING THE LIFETIME OF THE CERTIFICATE 21 4.4 NON-CONFORMITY REGISTER AND REPORTS ON PREVIOUS NCS .................................................................... 21

4.4.1 Annual Audit NC Summary .......................................................................................................... 21 4.4.2 Status of non-conformities (both Minor and Major) previously identified, even if already Closed Out ........................................................................................................................................................ 21

4.5 NON-CONFORMITY REPORT FOR NC IDENTIFIED DURING THIS ASA ................................................................... 22






4.6 OBSERVATIONS ........................................................................................................................................ 22 4.7 ISSUES THAT WERE RAISED DURING THE STAKEHOLDER CONSULTATION AND COMPANY RESPONSES ................... 22

PART 5: RSPO SUPPLY CHAIN CERTIFICATION ........................................................................................ 23

PART 6: CERTIFIED ORGANISATION’S ACKNOWLEDGEMENT OF INTERNAL RESPONSIBILITY ................... 24

6.1 DATE OF NEXT ASA .............................................................................................................................. 24 6.2 DATE FOR CLOSURE OF NON-CONFORMITIES ............................................................................................ 24 6.3 SIGNING BY THE CLIENT ......................................................................................................................... 24 6.4 SIGNING BY THE LEAD AUDITOR .............................................................................................................. 24 6.5 SIGNING BY THE CERTIFIER ..................................................................................................................... 24

PART 7: APPENDICIES .............................................................................................................................. 25

APPENDIX 1: LOCATION MAP FOR THIS CERTIFICATION UNIT ................................................................................ 25 APPENDIX 2: LIST OF ABBREVIATIONS ................................................................................................................. 29






PART 1: SCOPE OF THE CERTIFICATION AUDIT

1.1 Company and Contact Details

Company name: PT Musim Mas

Business address: Jl. K.L Yos Sudarso KM 7.8 Tanjung Mulia, Medan Deli Medan – Sumatera Utara, 20241, Indonesia.

Group name if applicable: -

Office telephone: 62 61 661 5511/62 61 6619866

Contact person: Dr Gan Lian Tiong

Mobile telephone: +62-61811632831

Fax: +62-616617386 – 6624362/6613060

e-mail: [email protected]

Web site: www.musimmas.com

1.2 RSPO Membership Details

RSPO membership number: 1-0073-04-000-00 [Old number: 032-04 (O)]

Parent company as applicable: -

Date of original certification: 6 January, 2009

Certificate number: C809028CU-RSPO-01.2013 Note: The previous certificate scope includes 2 palm oil mills. The 2 POMs are:

1. Batang Kulim POM (Certificate #: C819846CU-RSPO-01.2013) 2. Pangkalan Lesung POM (Certificate #: C809028CU-RSPO-01.2013)

Effective from 2012 onwards, individual certificates will be issued for each palm oil mill in accordance of RSPO’s requirements. While the certificate number for the PANGKALAN LESUNG PALM OIL MILL shall remain the same, a new certificate has been issued for the other palm oil mill as listed above and shall follow the same cycle from the original date of certification.

Date of last audit: November 07th

– 11th

, 2011

1.3 Annual Surveillance Assessment Details

Dates of this audit: November 05th

– 09th

, 2012

ASA number (1 to 4): 4 (Four)

1.4 Assessment Type

This annual assessment covers the palm oil mill, Pangkalan Lesung and its supply base. The supply base for this mill is coming from 3 estates (estate III, IV, V, owned and managed by PT Musim Mas), 1 scheme smallholders cooperative (KKPA Rawa Tengkuluk) and 1 village oil palm development project (Kas Desa Pangkalan Lesung), located in Pelalawan District, Riau Province.

1.5 Location of the Palm Oil Mill

Palm Oil Mill (POM) Location Address

GPS Reference

Name Longitude Latitude

Pabrik Kelapa Sawit Pangkalang Lesung

Kelurahan Pangkalan Lesung, Kecamatan Pangkalan Lesung, Kabupaten Pelalawan,

Propinsi Riau, Indonesia 102° 04’ 30” E 0° 03’ 00” S

mailto:[email protected]://www.musimmas.com/






1.6 Palm Oil Mill Output and Appropriate Tonnages certified

The 12 month output is the average over any 12 month period and the actual production for the 12 months from the date of the last certification has been included in this annual summary. These figures exclude any output product from non-certified suppliers.

Production Volumes and Supply Bases

Projected Production from last 12 Months (MT) Actual Production (MT)

FFB CPO PK PKO PKE FFB CPO PK PKO PKE

Estate III,IV, V, KKPA Rawa tengkuluk and Kas Desa Pangkalan Lesung

315,775 77,178 18,947 16,738 18,867 303,312 70,598 18,789 16,619 19,706

Projected Production from next 12 Months (MT)

FFB CPO PK PKO PKE

302,503 74,113 18,906 17,096 19,271

Note : - Include PK from Batang Kulim POM - Actual Production 06

th January 2012 – 31

st October 2012 + estimated production November 2012, December 2012 and

01 – 05 January 2013 - System for IP, SG and MB mechanism is in place in Pangkalan Lesung POM

1.7 General Description of Supply Base

The supply base for Pangkalan Lesung POM are from 3 estates (estate III, IV, V, owned and managed by PT Musim Mas), 1 scheme smallholders cooperative (KKPA Rawa Tengkuluk) and 1 village oil palm development project (Kas Desa Pangkalan Lesung). The details of the supply base are listed in table 1.7.2, 1.7.3 and 1.7.4 below. The RSPO P&C National Interpretation for Indonesia and the RSPO P&C Scheme Smallholders Interpretation were used to assess the palm oil mill and the respective supply bases. The mill processing capacity is 60 ton FFB per hour.

1.7.1 Location of the Supply Base

Oil Palm Plantation (OPP)

Location Address

GPS Reference

CU Code

Name Longitude Latitude

OPP 03 Estate III Kelurahan Pangkalan Lesung, Kecamatan Pangkalan Lesung, Kabupaten Pelalawan, Propinsi Riau

102° 5’ 29.079” E 00° 02’ 44.919” S

OPP 04 Estate IV Kelurahan Pangkalan Lesung, Kecamatan Pangkalan Lesung, Kabupaten Pelalawan, Propinsi Riau

102° 05’ 28.348” E 00° 05’ 59.312” S

OPP 05 Estate V Desa Tanjung Beringin, Kecamatan Pangkalan Kuras, Kabupaten Pelalawan, Propinsi Riau

102° 02’ 16.209” E 00° 00’ 51.015” N

OPP 08 KKPA Rawa Tengkuluk

Jl. Lintas Timur, Kelurahan Pangkalan Lesung, Kecamatan Pangkalan Lesung, Kabupaten Pelalawan, Propinsi Riau

102

0 06’ 27.820” E

00

0 01’ 14.4264” S

OPP 12 Kas Desa –

Pangkalan Lesung

Kelurahan Pangkalan Lesung, Kecamatan Pangkalan Lesung, Kabupaten Pelalawan, Propinsi Riau

1020 07’ 14.230” E 00

0 02’ 12.8292” S






1.7.2 Statistic of the Supply Base and Estimated of FFB Produced per Year

CU Code Name Area of Oil Palm (ha) Period June 2012

Estimated Tons FFB/Yr

(Budget 12 months)

Planting Years

Cycle (Years)

Total Mature Immature

OPP 03 Estate III 4,552.95 4,552.95 - 87,996.80 1996 – 2006 25

OPP 04 Estate IV 4,577.67 4,577.67 - 131,219.89 1996 – 2006 25

OPP 05 Estate V 3,749.58 3,749.58 - 63,348.76 1998 – 2004 25

OPP 08 KKPA Rawa Tengkuluk

802.00 802.00 - 19,937.50 2003 25

OPP 12 Kas Desa – Pangkalan Lesung

5.00 - 5.00 - 2010 25

Total 13,687.20 13,682.20 5.00 302,502.95 -

Note:

The reduction of 78.47 Ha in Estate III mature area due to land clearing for replanting and conversion to nursery area

Changes in Ha number of planted area at Musim Mas are due to decimal adjustments (additional decimal in Ha numbers) from Head Office

1.7.3 Percentage of Planted Oil Palm by different Age Ranges

CU Code

Planting Years by 5 year Ranges

1990-1994 1995–1999 2000-2004 2005-2009 After 2010 Total (%)

OPP 03 - 3,710.75 (27.11 %)

830.88 (6.07 %)

11.32 (0.08 %)

- 4,552.95 (33.26 %)

OPP 04 - 4,543.99 (33.20 %)

19.92 (0.14 %)

13.76 (0.10 %)

- 4,577.67 (33.44 %)

OPP 05 - 1,861.02 (13.60 %)

1,888.56 (13.80 %)

- - 3,749.58 (27.40 %)

OPP 08 - -

802.00 (5.86 %)

- - 802.00 (5.86 %)

OPP 12 - -

- - 5.00 (0.04 %)

5.00 (0.04 %)

Total - 10,115.76 (73.91 %)

3,541.36 (25.87 %)

25.08 (0.18 %)

5.00 (0.04 %)

13,687.20 (100.00 %)

1.7.4 Calculation of the Number of Production Units (N) to Sample for the Mill N = 0.8√y, where y is the number of units, with the result always to be rounded UP to the next whole integer. Where only a sample of the supply base is assessed, units not previously assessed, or assessed earlier in the certification program, are to be preferred over those more recently assessed.

For the Mill, how many units make up the production base?

Owned estates (Y) N = 0.8√Y Smallholders (Z) N = 0.8√Z

3 - 2 (Estate III and IV) - Kas Desa is fully

managed by the estate

1 Scheme Smallholders (KKPA) supply FFB to Pangkalan Lesung POM

1 (18 smallholders)

Explanation as to the selection of estates sampled N = 0.8√Y, where “Y” is the number of units, with the result always to be rounded “up” to the next whole integer, where only a sample of the supply base is assessed. There are 3 estates and 1 Scheme smallholders (KKPA) which supply FFB to Pangkalan Lesung – POM PT. Musim Mas. The number of sample for estates according the formula which mention above is 2 samples in estate and 1 sample Scheme Smallholder (KKPA).

1.8 Progress of associated Smallholders or Outgrowers towards Compliance with relevant Standards - should be in accordance to the 3 year implementation plan

The Scheme Smallholders Cooperative (KKPA) Rawa Tengkuluk and Kas Desa (Village Oil Palm development project) were certified in March 2011.

1.9 Location Map for this Certification Unit (See Appendix 1)






PART 2: PARTIAL CERTIFICATION The rules for partial certification allow organizations that have a majority holding in and / or management control of more than one autonomous company growing oil palm to certify individual management units and / or subsidiary companies subject to certain rules.

2.1 Management Structure

Section Criteria Yes/No If “Yes” If “No” 2.1.1 Is the certified operation (POM and supply base as detailed

above) a stand-alone operation and there are no other plantations or mills owned by the same company?

No Section 2 is N/A

Go to 2.1.2

2.1.2 Is the certified operation part of a simple structure of operations owned by one company?

Yes Go to 2.1.5 Go to 2.1.3

2.1.3 Are there statements of the ultimate controlling shareholders and directors in the managing agency company/companies:

a. Explaining the legal relationship and the management arrangements with the subsidiary companies and / or with any operating groups?

- Go to 2.1.4

Go to 2.2.1

2.1.4 b. A statement of commitment to complying with the spirit of the RSPO for all companies and subsidiaries involved with the growing of oil palm and for the production of palm oil?

- Go to 2.4 Go to 2.2.2

2.1.5 Is there a time bound plan in place for all subsidiaries, estates and palm oil mills?

Yes Go to 2.3 2.2.3

2.1.6 Is the parent company or one of its majority owned and / or managed subsidiaries a member of RSPO.

Yes

2.2 Non-compliance Identified with 2.1 Above

Section Non-compliance findings NC raised Category 2.2.1 There is no explanation as to the company’s structure and therefore it Is not

possible to conduct an effective audit against the rules for partial certification. - Major

2.2.2 There is no statement of commitment to complying with the spirit of the RSPO for all companies within the company structure.

- Major

2.2.3 There is no time bound plan in place for the certification for all subsidiaries, estates and mills.

- Major

2.2.4 No applicable membership of the RSPO. - Major

2.3 Summary of the Time Bound Plan

Section Requirement Findings and any action required Compliance

2.3.1 Does the plan include all subsidiaries, estates and mills?

All subsidiaries, estates and mills are included.

Yes

2.3.2 Is the time bound plan challenging? Age of plantations. Location. Mill development. Infrastructure. Compliance with applicable

law.

PT Musim Mas has successfully met the time bound plan.

Yes

2.3.3 Have there been any changes since the last audit? Are they justified?

No changes. The company has successfully implemented time bound plan.

Yes

2.3.4 If there have been changes, what circumstances have occurred?

No changes. The company has successfully implemented time bound plan.

Yes

2.3.5 Have there been any stakeholder comments?

No comments noted during this assessment. Yes

2.3.6 Have there been any newly acquired subsidiaries?

Two new acquisitions were noted, one in 2011 and the other in 2012. The new acquisitions are PT. Musim Mas – Sambas and PT. Lestari Abadi Perkasa – Ketapang.

Yes






Both operations have successfully gone through the NPP assessments that were carried out in August 2011 and in April 2012 respectively.

2.3.7 Have there been any isolated lapses in the implementation of the plan?

No. The company has successfully implemented time bound plan.

Yes

2.3.8 Has there been any systematic failure to proceed with the implementation of the plan?

No. The company has successfully implemented time bound plan.

Yes

2.3.9 General statement as to progress made since the last audit:

The company has successfully implemented time bound plan.

Yes

2.4 Un-Certified Units or Holdings NOTE: Companies may demonstrate compliance by clear evidence of a self-audit (i.e. an internal audit for all

subsidiaries, estates and Palm Oil Mills)

Section Requirement Findings and any action required

2.4.1 Did the company conduct an internal audit? If so, has a positive assurance statement been produced?

Yes.

2.4.2 No replacement after dates defined in NIs Criterion 7.3 of:

Primary forest.

Any area identified as containing High Conservation Values (HCVs).

Any area required to maintain or enhance HCVs in accordance with RSPO criterion 7.3.

No replacement of primary forest was noted. Areas containing HCVs have been noted. These designated areas are maintained and enhanced according to the requirements of RSPO.

2.4.3 Any new plantings since January 1st

2010 must comply with the RSPO New Plantings Procedure.

PT. Musim Mas has completed the NPP for 2 companies, namely PT. Musim Mas – Sambas and PT. Lestari Abadi Perkasa – Ketapang in August 2011 and in April 2012.

2.4.4 Any Land conflicts are being resolved through a mutually agreed process, e.g. RSPO Grievance procedure or Dispute Settlement Facility, in accordance with RSPO criteria 6.4, 7.5 and 7.6.

None noted. No stakeholder comments or complaints noted during this assessment.

2.4.5 Any Labor disputes are being resolved through a mutually agreed process, in accordance with RSPO criterion 6.3.

None noted. No stakeholder comments or complaints noted during this assessment.

2.4.6 Any Legal non-compliance is being resolved in accordance with the legal requirements, with reference to RSPO criteria 2.1 and 2.2.

The company has met its legal requirements. Reference is made to RSPO criteria 2.1 and 2.2 below as well.

2.5 Summary of the findings for Partial Certification The audit team assessed compliance with the above requirements during this audit. Failure to address any non-compliance identified may lead to certification suspension.

No failure or non-compliance against the partial certification requirement was noted during in this audit.

2.6 Partial Certification Audit Agenda

Date Location Agenda

07 November 2012 PT. Musim Mas – Sorek - Document review - Interview with the management






PART 3: AUDIT PROCESS

3.1 About the Certification Body

Control Union Certifications is a member of the Control Union World Group - an international inspection and certification body. CU performs Audits and certification in many agricultural based fields such as FSC, RSPO, and Organic production, Sustainable Textile Production, Organic Exchange, GLOBALGAP, HACCP, BRC, GMP and GTP. CU is accredited by the Dutch Council of Accreditation (RVA) on the European quality standard EN 45011 for the inspection and certification of CU Organic program (according to the EU regulation 2092/91) and EUREPGAP program. When requested a copy of the accreditation certificate can be obtained from CU.

3.2 Audit Team

Lead auditor: Haeruddin

Team member 1: Simon Selvaraj

Team member 2: Muhd. Jamalul Arif bin Hamid

Team member 3: Mohd. Rizal

Team member 4: Iamsirisangthong Asidatorn

3.2.1 Qualifications of the Lead Auditor

Requirement Qualifications

A minimum of post high school (post-secondary school) training in either agriculture/forestry, environmental science or social sciences;

Post graduate qualification in Forestry with more than 15 years working experience in plantation and forestry.

At least 5 years professional experience in area of work relevant to the assessment (e.g., palm oil management; agriculture/forestry; ecology; social science);

More than 15 years working experience in plantation and forestry. Involved in RSPO auditing since November 2010. Fully trained in similar agriculture certification programmes such as RSPO SCCS, 4C, Global Gap, FSC, UTZ certified and Organic farming.

Training in the practical application of the RSPO criteria, and RSPO certification systems;

Involved in RSPO assessment since November 2010. Member of CUC RSPO audit team. Involved in audits conducted in Malaysia and Indonesia.

Successfully completion of an ISO 9000:19011 lead auditors course;

Completed ISO 9001:2008 lead auditor course in January 2012.

Training in the practical application of RSPO certification systems.

Member of CUC RSPO audit team since November 2010. Involved in audits conducted in Malaysia and Indonesia since November 2010 in 10 different companies in Malaysia and Indonesia.

A supervised period of training in practical auditing against the RSPO criteria or similar sustainability standards, with a minimum of 15 days audit experience and at least 3 audits at different organisations.

Involved in audits conducted in Malaysia and Indonesia since November 2010 in more 10 different companies in Malaysia and Indonesia.

RSPO endorsed lead auditors course. Completed RSPO Lead Auditor training in 2011

Signed code of conduct. Yes.

General knowledge of:

RSPO P&C standards. Yes

CUC organizational structure. Yes

CUC quality systems. Yes

Lead auditor role. Yes

Report writing. Yes

Stakeholder consultation. Yes

Certification decision process. Yes

RSPO SCCS program manual. Yes






CUC filing systems. Yes

Correct use of RSPO trademarks. Yes

History and objectives of RSPO. Yes

CV available. Yes

Completion of CUC RSPO lead auditor training. Completed & Passed RSPO Lead Auditor training in 2011

3.2.2 Qualifications of the Assessment Team RSPO Requirement Team Member Name Qualifications

Fluent in main local languages and English.

Simon Selvaraj Able to understand local language and fluent in English.

Muhd Jamalul Arif Bin Hamid

Able to understand local language and fluent in English.

Muhd. Rizal Able to understand local language and fluent in english.

Iamsirisangthong Asidatorn Fluent in English

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

Simon Selvaraj More than 5 years working experience in plantation. Involved in RSPO auditing since November 2010. Fully trained in similar agriculture certification programs such as RSPO SCCS, Global Gap, ISCC and GMP.


Involved in RSPO auditing since November 2010. Auditing experience in GMP and Global Gap.

Muhd. Rizal Experience in forestry and manufacturing company

Iamsirisangthong Asidatorn Involved in group audit in organic farming since 2010. Global GAP in 2011 and RSPO in early 2012

Good agricultural practices (GAP), integrated pest management (IPM), pesticide and fertilizer use.

Simon Selvaraj Involved in RSPO auditing since November 2010. Fully trained in similar agriculture certification programs such as RSPO SCCS, Global Gap, ISCC and GMP.



Iamsirisangthong Asidatorn Involved in group audit in organic farming since 2010. Global GAP in 2011 and RSPO in early 2012

Health and Safety auditing on the farm and in processing facilities. (For example OHSAS 18001 or occupational. Health and safety assurance system).

Simon Selvaraj Involved in RSPO auditing since November 2010. Fully trained in similar agriculture certification programs such as RSPO SCCS, Global Gap, ISCC and GMP.



Muhd. Rizal Experience as safety officer in Malaysia manufacturing firm

Iamsirisangthong Asidatorn Completed OHSAS 18001 training

Workers welfare issues and social auditing experience. (For

Simon Selvaraj Complete SA 8000 course auditor


Involved in RSPO auditing since November 2010. Auditing experience in GMP and Global






example with SA8000 or related social or ethical accountability codes).

Gap.

Environmental and ecological auditing. (For example experience with organic agriculture, ISO 14001 or environmental management systems).

Simon Selvaraj More than 5 years working experience in plantation. Involved in RSPO auditing since November 2010. Fully trained in similar agriculture certification programs such as RSPO SCCS, Global Gap, ISCC and GMP.



Muhd. Rizal Experience in forestry firm

Iamsirisangthong Asidatorn Complete Lead auditor for ISO14001

Economic issues. Simon Selvaraj Member of CUC RSPO audit team since November 2010. Involved in audits conducted in Malaysia and Indonesia since November 2010 in 10 different companies in Malaysia and Indonesia.



3.3 Audit Methodology

3.3.1 General Overview

The Audit was carried out in conformity with the procedures as laid down in the CUC Procedure Manual and the RSPO Program Manual for the assessors and Certifier. During the Audit the qualified CUC assessors used the RSPO standard as endorsed for the country in which the Audit took place and recorded their findings. For each estate and smallholder identified to be included in the sample for this audit, the original main Audit checklist was used, which includes any updates from previous Annual Surveillance Audits (ASA). Workers and local communities were interviewed and evidence sought to confirm ongoing compliance to include:

Chemical stores. Storage. MSDS leaflets. Herbicide mixing areas. PPE. Ventilation. Security.

Field inspections. Herbicide application programmes. Harvesting sites and efficiency. Fertilising operations. SOP’s. Soil maps. Land preparation. Ground cover. IPM. First aiders and boxes. Ground cover. Soil erosion. Field observations of all operations.

Worker interviews. OSH. Sexual, religious, racial harassment. Pay and contracts. Child labour. First aid. Awareness.

Re-planting sites. Zero burn.

HCV’s. Identification. Management plans. Environmental Impact Assessments. Implementation.

Riparian zones. Width. Current and future management. Non maintenance regimes.

Water management. Water courses. Water monitoring.

Road maintenance. Run off.

Social amenities. Social Impact Audits.

Local communities. Contributions made. Employment opportunities. Social impacts. Complaints procedures.

Workshops. Oil traps. Safe working environment. PPE. Diesel tanks. Environmental waste management.

Line sites. Interviews with householders. Inspection of water discharge points. Water improvement plans. Waste disposal.

Documentation review. Palm Oil Mill audits include:






Mill and workshop inspections. Documentation. Worker interviews.

Mill. SOP’s. Safe working environment. Gen sets. Walk ways. Signs. EFB. POME treatment. Emissions. Mass balance. Diesel tanks. PPE. Fire extinguishers. First aiders and boxes. Fuel and water usage.

OSH. Training. Management structure. First aiders.

Full document review. Completion of the checklist. Review and documentation of evidence. All aspects of RSPO P&C’s applicable.

Worker interviews. OSH. Sexual, religious, racial harassment. Pay and contracts. Verification: Verification of implementation was done through field observations, workshop and chemical store inspections, worker and community interviews and mill inspections as summarized above.

3.3.2 Audit Agenda

November 05, 2012

Time: 10.05 – 10.05

Auditors Arrival of auditors from their respective countries

Time: 16.00 – 17.00

Auditors: Purpose:

All auditors Opening meeting. An agenda is followed, which includes:

Introduction by lead auditor.

Introduction of team members and others.

Discussion / confirmation of audit agenda.

Confirmation of confidentiality.

Time and place of closing meeting. Followed by: Presentations by the PT. Musim Mas management representative.

Location PT. Musim Mas Office

November 06, 2012

Time 08.00 – 12.00

Auditors: Purpose:

Haeruddin, Rizal and Simon Field Visit: POMs (Pangkalan Lesung POM) SOP’s. Safe working environment. Gen sets. Walk ways. Signs. EFB. POME treatment. Emissions. Diesel tanks. PPE. Fire extinguishers. First aiders and boxes. Fuel and water usage. Worker interviews (OSH. Sexual, religious, racial harassment. Pay and contracts), etc.

Time: 12.00 – 13.00 (Lunch in Estate II Guest House)

Time: 13.00 – 17.00

Auditors: Purpose: Location:

Jamal and Ashidatorn Document review (estates and mills) PT. Musim Mas office

November 07, 2012

Time: 08.00 – 12.00

Auditors: Purpose:

Haeruddin, Rizal and Simon Document Review, partial certification and verification SCC POM

Auditors: Purpose:

Jamal and Ashidatorn Field visit: estates III and IV Herbicide application programs, harvesting, fertilizing operations, HCV’s., riparian zones, boundaries inspection, water management, chemical stores, fertilizer store, workshops. Worker interviews, social amenities. Social Impact Assessments, local communities, line sites, interview with community and stakeholder, etc.

Time: 12.00 – 13.00 (Lunch)

Time: 13.00 – 17.00

Auditors: Purpose:

Haeruddin,Rizal and Simon Audit KKPA Rawa Tengkuluk

Auditors: Ashidatorn and Jamal






Purpose: Document review (estates and mills)

November 08, 2012

Time: 08.00 – 12.00

Auditors: Purpose:

All auditor Document review (estates and mills) and interview stakeholders.

Time: 12.00 – 13.00

Time: 13.00 – 14.00

Auditors: Purpose:

All auditor Auditor report

Time: 14.00 – 15.00

Auditors: Purpose:

All auditor Closing Meeting

Time: 15.30 (Leave to Pekanbaru)

November 09, 2012

Time: 08.50 – 12.30

Auditors: The auditors travelled back to their respective countries.

Number of auditors participating: 5 Number of days spent for the audit on site: 3 Total number of person days used for the audit on site: 15

PART 4 ASSESSMENT FINDINGS

4.1 Lead Assessor’s Summary and Recommendation for Certification

The mill and supply bases as detailed 1.5 and 1.7.1 above and the Scheme smallholders were visited. The audit team carried out field, office, facilities, store and document assessments of compliance for all the RSPO Principles and Criteria. It was also noted that all subsidiaries are complying with the rules of partial certification as listed above. There were no complaints received during the field assessment and during interviews with the external stakeholders. Up to the time of writing this report, there were neither feedbacks nor comments received from any stakeholders and the community surrounding PT. Musim Mas. Last, the Pangkalan Lesung POM is in full compliance with the RSPO Supply Chain Certifications Systems requirements as well.

It is therefore the recommendation of the lead assessor that:

A certificate of compliance is maintained. Signed:

Name: Haeruddin Date: 12

th November 2012






4.2 Summary of the findings by principle and a sample of the Criteria

Over the 5 year period of the life of the certificate, there will be 4 annual surveillance audits

Identified Non-Conformities and noteworthy Positive and Negative Observations

The RSPO require that this report contains findings by each principle and some example criteria. Please see table below

Sample Criterions used during this Annual Surveillance Assessment (RSPO P and C)

The following sample criterions were audited during this Annual Surveillance Assessment

Principle 1: Commitment to Transparency

Criterion Sampled by Surveillance

Summary The Company is committed to transparency. All requests for information from stakeholders have been responded to within a timely manner.

ASA 4 1.1 Information requests from internal and external stakeholders are recorded in stakeholder information request register “Buku Tamu and Buku Penerimaan Permintaan informasi”, i.e. information request from local government representative, Mr. Junaidi regarding AMDAL document dated 3

th August 2012

and Ms Elayarita (dated 12th

June 2012) from Health Department of Pelalawan

District regarding estate clinic operations. Records of response to information request are available in the same logbook, The company has responded to the information request from any stakeholder in timely manner. All non-confidential information was provided to stakeholders. It's covered in the check list document on compliance to RSPO P&C including the land title, permits, AMDAL (SEIA), Social Impact Assessment (SIA). HCV, CSR, environmental and social practices, Good Agriculture Practices (GAP), waste management, health and safety, continuous improvement plan, etc. All Information was available in the local language which could be understood easily. The retention of those document was in accordance with the company's policy No. MM-

POD/01.01/1.4.0 (rev.01) dated 01st

February, 2012 for Estates and MM-

POD/01.01/6.3.0 (rev.2) dated 11th

January, 2011 for Mill which states that the document related to operational activities should be kept for 2 (two) years, 1 (one) year for labor document, legal documents until expiry, 7 (seven) years for research document and 10 years for SCCS-ISCC documents.

ASA 4 1.2 All the RSPO requirements are covered in the check list document on compliance to RSPO P&C which includes a list of 54 documents (available). All documents referring to land title, permits, RKL/RPL, SIA, OSH and continuous improvement are available for stakeholders review. Documents are kept as per policy requirements. The retention of document is in accordance with the Policy MM- POD/01.01/1.4.0 (rev.01) dated 01

st February, 2012 for Estates and MM-

POD/01.01/6.3.0 (rev.2) dated 11th

January, 2011 for Mill.

Principle 2: Compliance with Applicable Laws and Regulations


Summary The company has a comprehensive system for ensuring all estate and mill managers are up to date with the applicable laws and they have an internal monitoring system to ensure compliance.

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


Summary The company has implemented management plan to achieve long term economic and financial viability as described in their working plan.

ASA 4 3.1 The company's working plan for 10 years period is located in Economic Policy No. MM-RSPV/02.03/1.2 Rev. 05 revised on 1

st February 2012. The working plan

shows the projection of 10 years business plan until 2021 consisted of FFB, CPO, PK, PKO, PKE production, income, OER, training plan and continuous 124 Ha






estate III replanting program (still on going for budget 2012) and estate IV replanting program on 2021 for 539 Ha.

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


Summary

The company has a set of generic SOPs for the estates and mill. The record of training shown that the company has carried out training sufficiently. Efforts of implement Good Agricultural Practices done through appropriate use of fertilizer and pesticide, land application, water management plan, etc.

ASA 4 4.4 Company has implemented good management practices to protect natural watercourses such as the protection of a few small categorized rivers flowing through estate III and VI (Sg. Bengkirai, Sg. Pemahang, Sg. Air Hitam, Sg. Senduan, Sg. Pelintai and Sg. Pantan). All buffer zones meet and observe the 50 meter requirement on each side and further planting of jungle trees have been carried out. Total jungle trees planted is 46,716 trees to date until September 2012, such as Meranti (Shorea,sp), Pulai (Alstonia, sp), Mahoni (Swietenia macrophylla king), Jabon (Anthocepalus cadamba), Gaharu (Aquilaria moluccensis), Trembesi (Samanea saman) and Matoa (Pometia pinnata). Sg. Pemahang and Sg. Air Hitam are flowing through estate IV and the same management of buffer zones has been applied and has been planted with jungle trees. Sg Napo in estate V is identified as HCV 1 and HCV 3 based on the recommendation by HCV consultant in Sept 2007. HCV area is monitored under HCV management and established monitoring systems. Water sample from the river is taken and sent for water quality test every 6 months. Result shows all specs are within parameters. The rivers are in good condition and there was no pollution noted during this assessment. Natural riparian are well maintained. Total riparian zone/buffer zone for estate III (121 ha), estate IV (215 ha) and estate V (12 ha). The estate planted forest trees in the buffer zone as an enhancement to the riparian. All the oil palm at the river riparian has been left behind and replaced with forest trees. The water sample from the river is taken and sent for water quality tests every 6 months. Result shows all specs are within parameters. POME discharge to land application is tested for quality analysis every month and results are monitored. Sample checked, dated 04

th September 2012, pH

(8.26), BOD 5 Day 20°C (91.5mg/L), COD (274mg/L) Dissolved Oxygen (5.42mg/L), Oil & Grease (20.0mg/L), total Nitrogen (33.8mg/L), total suspended solid (280mg/L), Lead-Pb (






Records of each employee are kept and are up to date, i.e. training for sprayers was conducted on 15

th October 2012 to sprayers of division A, block T56. The

trainers were Bp. Yoserizal and Bp. Hariss (Training Department). There are individual records for Ms. Euis Kurniasih who has been certified by the Training Department of PT. Musim Mas as a qualified sprayer (certificate issued on 27

th

October 2012), and training for sprayers was conducted on 23th

October 2012 to sprayers of division 4, block R73, where the trainer is also the Safety Officer Mr. Juspriadi. The attendance list was sighted. Training records of individual employees are documented, ex: record of Ms. Siti Wahyuni (verified). Training records in the POM for each employee is available, i.e. training record of Mr. Narton Simatupang, boiler man ID 03100001 for 2012 verified and record of boiler training conducted on 3

th May 2012, 9

th May 2012, 12

th July 2012 and 27

th

September 2012 with attendance list. The company uses experienced and trained contractor, There are some requirements to fulfill the contract between company and contractors. Training is also given by the company to improve knowledge and competence of contractor’s worker, i.e. contract with CV from Pelita Indah (Building contractor) company profile describes the experiences of their employees. The last training recorded was on 20

th May 2012 (in North Estates) for the contract with PT Jagar

Prima Nusantara (waste management contractor for handling pesticide containers, oil and grease with its containers.) no. 004/PT.MM/VI/2012, dated 01

st June 2012.

The contractors for Pangkalan Lesung POM have been verified as well, i.e. PT. Indonesian Marine (for boiler replace and overhaul) contract no. 005/MM-PKL/HO-OP/VIII/2011, dated 22

th August 2011.

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


Summary

Implementation was based on the SEIA report, regular report (RKL/RPL), and the HCV assessment. The environmental procedures have been fully implemented and well established by the company. Comprehensive identification of all waste has been recorded and disposal of scheduled waste has been carried out by an approved and registered collector. A CDM project to reduce GHG emission and usage of fossil fuel has been implemented.

ASA 4 5.3 Estates have identified and documented pollution sources such as used oil, filter, battery etc. Records of all scheduled waste are reviewed. The waste collection is centralized at estate III. Records of receiving and disposing through authorized waste collectors are available. For the POM, identified waste and pollution were mapped by its source in which each waste was reduced, recycle or reused. EFB, boiler ash from fiber and shell and metal scrap will be send to be reused for any further construction of the mill. Waste identified was recorded for disposal by a licensed collector. Hazardous waste manifest produced was recorded for disposal by the licensed contractor. Waste transportation license is available for PT. Jagar Prima Nusantara and PT BES. Records of waste monitoring per type by date, type of waste with quantity and holding period and collection date were sighted.

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

Criterion Sampled by

Summary Positive and negative impact from the AMDAL was documented and a management plan was developed to address any negative impacts. Monitoring






Surveillance of reports (every 6 months) has been incorporated with the organization (RKL/RPL). Minutes of meeting for the communication and consultation with local community through regularly meetings were available and evident. The policy for freedom of association, equal opportunities, no sexual harassment and non-violence as well as the protection of reproductive rights, are clearly stated and it was confirmed through interviews during the audit.

ASA 4 6.2 Sighted documented procedures for communication no: MM-SOP/01.01/8.8, dated 22

nd April 2010 (Procedure to communicate with stakeholders). List of

stakeholders were kept up-to-date as of October 2012. Local communities’ aspiration was identified through stakeholder meetings. Last meeting was held in June 2012, attended by 43 participants, held by the HUMAS Department. Consultations covered the education, religion, sosio-culture, health, infrastructure economics aspect, etc. Actions are taken if any issues rose during the meeting. Mr. T. Kanna is the dedicated person for consultation and communication for the location.

ASA 4 6.8 The company has a policy dated 13th

March 2012 and procedure no. MM-

SOP/01.01/6.2 dated 01st December 2007 about “Equal Opportunities and No

racial discrimination”. The policy and procedure have been implemented well. There was no discrimination noted during interviews with staff and workers.

Principle 7: Responsible Development of New Plantings (Not Applicable – No any new planting)


Summary Not Applicable (no new planting has taken place)

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


Summary The commitment for continual improvement was seen through innovative systems involving all levels within the organization.

ASA 4 8.1 A monitoring based on SIA was done with 16 aspects covered for OSH, medical checkups, signages, training, and information about agreement with workers union to workers, PPE, road maintenance, HCV conservation and report/evaluation for each activity. There has been complete elimination of paraquat usage since January 01, 2011. Barn owls and beneficial plants were used to reduce the use of chemical pesticides for eliminating rat and leaf eating caterpillar, i.e 2 barns owl in 2012 (160 units in 2011 to 162 units in 2012) in Estate III and increasing beneficial plant every year, the company has planted 63,952 plant up to September 2012. The company has planted jungle trees alongside the riparian zones. The total jungle trees planted was 46,716 trees (exceeded the planting program according MOU between company and Forestry Department of Pelalawan District of 44,992 of trees). The management also makes improvements to manage peat areas that impact the environment by increasing the numbers of water gates, cleaning the river and developing a new culvert drainage system. Increasing usage of decanter solid cake to reduce the POME waste from the mill and applied land application to reduce dependence on chemical fertilizers. CDM Project (Bio-Gas plant) at the Pangkalan Lesung Mill has been running since March 2011. CDM project for methane capture at the POME pond reduces GHG that supports generation of electricity for the mill and estates, and reduces fossil






fuel usage directly. The reduction recorded was 97,099 liters in 2011 to 24,110 liters in until September 2012 (Estate III). Aero flow system to reduce BOD level has been continuously practiced and scheduled waste collection and management has been implemented continuously. The company has added 4 elementary school class rooms and 20 units of worker’s housing.

4.2.1: Summary findings for Scheme Smallholders (KKPA) PT Musim Mas The assessment team conducted a thorough assessment of all the principles, criteria and indicators. Evidence was sought for conformity with the RSPO Indonesian NI of both systems and their implementation. The findings column reflects the findings in accordance with each criteria and indicator and the comments column includes some of the evidence found. (The full and complete checklist contains some confidential information and is an extensive document used for peer review and by the certification decision panel and certifier). Where non conformity was found, a summary of the non-conformity is included.

Principle 1: Commitment to Transparency

Criterion 1.1

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

Request information is recorded in the “Buku Tamu” (recorded since 2007), there are 5 information requests in 2012, i.e visit by the USA-EPA members to discuss KKPA operations on 22 October 2012 and a team from the Agriculture Department of Central Kalimantan province on 29 October 2012. The request for information has been responded to within a timely manner.

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.

All legal permits are available publicly at the KKPA office, such as: land certificate (land title), Ijin Badan Hukum/ Akte pendirian Perusahaan (article incorporation), AMDAL (Social and Environmental Impact Assessment) incorporated in estate, TDP (Cooperative registration), Surat Ijin Usaha perdagangan – SIUP (Trading permit), Surat Ijin Tempat Usaha-SITU (Placing Operational Permit). The Work Agreement (Contract) “Surat Perjanjian Kerjasama” (Memorandum of Understanding) between KKPA Rawa Tengkuluk and PT MM No. 05/KPS-RT/2002 and 034 HM/MM/X/2002, was signed by the Director of PT MM and KKPA Rawa Tengkuluk leader and witnessed by village head, district officer, Cooperative Department of Pelalawan and Head of Distric Pelalawan, Department of Agriculture, and Bupati (Head of District).

Principle 2: Compliance with applicable laws and regulations

The company has a comprehensive system for ensuring all scheme managers are up to date with the applicable laws and they have an internal monitoring system to ensure compliance.

Principle 3: Commitment to long-term economic and financial viability.

Annual budget for the KKPA is developed for 10 years projection (2012 – 2021) and is incorporated with the company budget document no. MM-RSPV/02.03/1.2. Working plan consist of projections of FFB Production, OER, Production of CPO, income from FFB, including operational activities, financial projection, and strategies to achieve the above targets. The smallholder’s organization is directly involved in the calculation of debts and repayments, relevant agreements with the banks, loan mechanisms, saving towards future replanting and saving for Corporate Social Responsibility (CSR) activities such as donation to mosque as part of community development project. Scheme smallholders receive training services from Scheme Managers in relation to the management of plantation to optimize continuous productivity, technical support, training and advice on best practices.






Principle 4: Use of appropriate best practices by Scheme Manager

Criterion 4.2 Practices maintain soil fertility at, or where possible improve soil fertility to, a level that ensures optimal and sustained yield.

The distribution of the fertilizer as per recommendation by PT. Musim Mas and application records are maintained by the KKPA office and assisted by the KKPA Scheme Manager with details of area, quantity applied, type and date of application. This is also monitored through daily issuing records with this detail. The record of fertilizer was supplied to the KKPA Rawa Tengkuluk in 2012, such as urea: (295,100 kg), MOP (197,200 kg), Kieserite (104,100 kg), Rock Phosphate (159,700 kg), Borat (6,520 kg). Record of the productivity was documented for 4 year (2007– 2011) and 2012 up to August 2012. The record showed the increasing of FFB production in the last 4 years: 2008 (9,985 tons), 2009 (14,503), 2010 (15,592 tons), 2011 (16,059 tons). No EFB was applied yet.

Criterion 4.6 Agrochemicals are used in such a way that does not endanger health or the environment. There is no prophylactic use, and where agrochemicals are used that are categorised as World Health Organisation Type 1A or 1B, or are listed by the Stockholm or Rotterdam Conventions, growers are actively seeking to identify alternatives, and this is documented

No paraquat usage for the entire plantation (nucleus & smallholders) since 1 January 2011. Green Book of Agrochemicals as registered and approved by Ministry of Agriculture is available and in place (last updated 2011). List of pesticides recommended was issued based on the management policy and approved by the Estate Director, Head R&D Department and Act. Director of Strategy & Planning. Records showed that pesticides were not used; only herbicides were used for the targeted weeds with appropriate dosage as per the recommendation. Quantity used, method and time of application was advised and monitored by the KKPA scheme manager, i.e. Applied Lindomin (2.4 Diametyl amina) 600 ml and Metaprima – Methyl metsulfuron 900 gr in block CB (10 ha) on 19 September 2012. Spraying team is provided and handled by the company with appropriate PPE, no any storage of pesticides in KKPA Rawa Tengkuluk. Update training was conducted for best fertiliser application spraying and carried out on16

th June 2012, attended by 17 members.

Record of agrochemicals was applied in the KKPA member’s plantation and maintained with full details of the agrochemical recommendation, type, and name of the smallholder, block number, quantity applied and date. The records are monitored by the company on a monthly basis. The company has applied pesticides, i.e. Metaprima-methyl metsulfuron (7,590 gr), Lindomin-2.4 Methyl Diamina (4,760 ml), Smart- Glyphosate (12,350 ml) to date September 2012.

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

Criterion 5.1 Aspects of plantation and mill management 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

Updated SEIA (AMDAL) approved by the Head of District (Bupati) Pelalawan, Riau province no. KPTS/660/BLH/2011/451, dated 14 October 2011 covers PT Musim Mas and the smallholders and the initial SIA was conducted by consultants from Aksenta in 2007. SEIA was incorporated with the estate documents and separated sections are available for the scheme smallholders. The KKPA leader and KKPA Scheme Managers have briefed the members on the SEIA. A copy of the documented assessment is kept at the KKPA office and implementation is monitored by the KKPA leader with the assistance from the KKPA scheme manager. Environmental Management Plan (RKL) and Environmental Monitoring Plan (RPL) are reported every 6 months to several government agencies, such as Dinas Perkebunan (Plantation Dept), Badan Lingkungan Hidup (Environmental Department), Dinas Tenaga kerja dan transmigrasi






(Manpower and Migration Department), Dinas Kesehatan ( Health Department).The approval of the delivery documents for the last report (period January – June 2012) was sighted as evidence.

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 guidelines or other regional best practice

A zero burning policy for KKPA is available and has been socialized to all members. According to interview with the KKPA members, the company has given training and socialization regarding the emergency response procedures and briefing was done to all members by the KKPA scheme manager. Awareness and understanding was noted during field interviews. Fire extinguishers are available within the scheme office and accessible to the members in the KKPA’s office. If any fire cases occur in the fields, PT. Musim Mas will assist. The company has conducted emergency response trainings to the KKPA members as well. The members understanding's was noted during interviews. No new replanting has planned in the near future.

Principle 6: Responsible consideration of employees and of individuals and communities affected by scheme smallholders

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 stake holders to express their views through their own representative institutions

No dispute was noted during this assessment.

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.

No permanent workers at the smallholder level. The PT. Musim Mas policy on freedom to join and form workers union is extended to the smallholders

Criterion 6.10 Scheme managers deal fairly and transparently with smallholders and other local businesses.

No repetition complaints were noted during the assessment. Procedure of calculating FFB price was in accordance with the pricing set by the Agriculture Department of Riau (Tim Penetapan Harga TBS) by weekly and forwarded to KKPA for this purpose. According to interviews, all members understand the FFB pricing mechanism and FFB Pricing will be announced to all members by publication through the KKPA’s office and sent through message by mobile phone. The price letter from the local authority is made available and members confirm that the FFB pricing mechanism had been implemented well. KKPA’s contracts are documented in the KKPA-OPI/RT/5.0 with PT. Musim Mas and also for other outside contractors. There are 7 contracts, such as Loading FFB, transport of FFB, harvesting, manuring, fertilizer loading, trasnport of fertilizer, spraying, i.e. contract between KKPA and Mr. Syamsunar for harvesting no. 002/KRT/L22/VII/2012, dated 2

ndJuly 2012 and

with PT. Musim Mas no.001/KRT/L26/IX/2012, dated 1st September 2012 for spraying. Payment made to Mr. Syamsunar (harvesting contractor) in August 2012 was Rp. 92,358,000 (for harvest 1,847 tons FFB). The document review confirmed that KKPA has paid the contractors promptly. Credit payment will be deducted from the KKPA member’s income and PT. Musim Mas will transfer the amount of credit to the bank every month. The copy of installment record is available at the KKPA office. Latest road maintenance payment made in August 2012 was Rp. 900,000 for heavy equipment rental.

Principle 7: Responsible development of new plantings

Not applicable as no new planting has taken place

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






Criterion 8.1 Scheme Managers regularly monitor and review their activities and develop and implement action plans that allow demonstrable continuous improvement in key operations

A continuous improvement plan has been incorporated in the annual budget which includes road improvement by grading – compacting. Increasing planting of 3,200 beneficial plants i.e. cassia cobanensis for 2012.

4.3 Sample Criteria for inclusion in this Report on an Annual Basis during the Lifetime of the Certificate

Criterion Year 1 Year 2 Year 3 Year 4 Criterion Year 1 Year 2 Year 3 Year 4

1.1 x x x x 6.1 x

1.2 x x x x 6.2 x

2.1 x 6.3 x

2.2 x 6.4 x

2.3 x 6.5 x

3.1 x x 6.6 x

4.1 x 6.7 x

4.2 x 6.8 x

4.3 x 6.9 x

4.4 x 6.10 x

4.5 x 6.11 x x

4.6 x 7.1 x

4.7 x 7.2 x

4.8 x 7.3 x

5.1 x 7.4 x

5.2 x 7.5 x

5.3 x 7.6 x

5.4 x 7.7 x

5.5 x 8.1 x x x X

5.6 x

4.4 Non-conformity register and reports on previous NCs

This section gives an over view of new or revised non-conformities raised during this audit and of action taken to close out non-conformities raised during the previous audits.

If a minor-non-conformity raised at the last audit, is not closed out, then this will be raised to Major status and the company given 60 days to close this out.

The NC number is comprised of 2 parts to include the year in which the NC was raised as well as a sequential number.

4.4.1 Annual Audit NC Summary

Annual Audit Date:

Number settled: -

Number outstanding: -

4.4.2 Status of non-conformities (both Minor and Major) previously identified, even if already Closed Out

NC number: -

Category: -

Aspect of standard: -

Evidence of NC: -

Comment at ASA: -






4.5 Non-Conformity Report for NC identified during this ASA

NC number: -

Client name: -

Date raised: -

Major or Minor: -

Raised by: -

Aspect of standard: -

Evidence of non-conformity: -

Assessors Signature Date

4.6 Observations

Client name: -

Date raised: -

Raised by: -

-

Assessors Signature Date

4.7 Issues that were raised during the Stakeholder Consultation and Company Responses

The subjects raised and responses by the company will be reviewed at the first annual surveillance audit. Subsequent annual surveillance audit reports will include any subjects raised during the period of certification and during the annual surveillance audit.

Subject raised Company response and proposed action to be taken

Audit team findings

- - Not any issues or comment received during this annual surveillance.






PART 5: RSPO SUPPLY CHAIN CERTIFICATION

The palm mill mentioned in the scope of the audit was audited against the requirements of the following: RSPO Supply Chain Certification Systems. November 2011. RSPO Supply Chain Certification Standard. November 2011.

5.1 POM included in the scope of the audit

CU code: Name of facility Location address Supply Chain Model

POM Pabrik Kelapa Sawit Pangkalang Lesung

Kelurahan Pangkalan Lesung, Kecamatan Pangkalan Lesung, Kabupaten Pelalawan,

Propinsi Riau, Indonesia IP

5.2 Summary report including a brief description of the scope of certification

The supply base for Pangkalan Lesung POM are from 3 estates (estate III, IV, V, owned and managed by PT Musim Mas), 1 scheme smallholders cooperative (KKPA Rawa Tengkuluk) and 1 village oil palm development project (Kas Desa Pangkalan Lesung). Please also see 1.7above. Actual quantities of FFB delivered to the mill, and the actual quantities of CPO and PK produced are tracked and monitored on a daily basis. A full RSPO SCCS certification audit was used during this main assessment and the findings support the certification based on IP supply chain model.

5.3 Confirmation of the company’s summary of annual certified volume of RSPO certified Palm Oil and Palm Kernel over a specified period

Product: CPO (MT) PK (MT) Specified 12 month period

CU Code

POM 74,113 18,906

The 12 month output is the average over any 12 month period and the actual production for the 12 months from the date of certification will be included in the annual summary. See also 1.6.1 above.

5.4 Final certification decision by Control Union for the RSPO SCCS Audit

Recommendations made: Yes

Summary of non-compliances:

Full compliance was found.

Certification status of client: The POM included in the scope of this audit demonstrated full compliance with the RSPO SCCS. With effect from the certification date given in the RSPOPC certificate, this POM mentioned in the scope of this report is considered to be certified in accordance with the RSPO SCCS.






PART 6: CERTIFIED ORGANISATION’S ACKNOWLEDGEMENT OF INTERNAL RESPONSIBILITY

6.1 Date of next ASA

The provisional date for the next ASA is: Re-certification next year (October 2013)

6.2 Date for Closure of Non-Conformities

See sections above for details of NC’s, if any

All major NCs to be closed by: -

All minor NCs to be closed by: -

6.3 Signing by the Client

I the undersigned, being the most senior relevant management representative of the operation seeking or holding certification, agree with the contents and audit findings as presented in this document . I also confirm:

Acceptance of liability in execution of the instructions given.

That this company was made aware that the findings of the audit team are tentative; pending review and decision making by the duly designated representatives of Control Union Certifications.

That during the closing meeting all agenda items was covered by the Lead Auditor.

Acknowledged by:

Name: Dr Gan Lian Tiong.

Position: Head of Sustainability

Date: 15th

November 2012 Signature

6.4 Signing by the Lead Auditor

I the undersigned, being the Lead Auditor, confirm that this report is an accurate record of the findings and of the closing meeting. I further confirm that the summary of the findings as presented in this report are a true representation of the actual findings of the audit team.

Acknowledged by:

Name: Haeruddin

Position: Lead Auditor

Date: 15th

November 2012 Signature

6.5 Signing by the Certifier

I the undersigned, being the Certifier, confirm that the information and conclusions included in this report have been prepared in good faith and that the certification decision has been based upon this information.

Acknowledged by:

Name: Gerben Stegeman

Position: Certifier

Date: 6th

December 2012 Signature






PART 7: APPENDICIES

Appendix 1: Location Map for this Certification Unit

From 1.9, the location map(s)






Map 2. Location of PT. Musim Mas in Riau Province, Indonesia






Map 3: Location of PT. Musim Mas Pangkalan lesung Palm Oil Mill and neighbouring entities, Rawa Tengkuluk Scheme Smallholders (KKPA) and Village Oil Palm Development Projects (Kas Desa)






Map 4 : Map of Scheme Smallholder Group KKPA Rawa tengkuluk and Kas Desa.






Appendix 2: List of Abbreviations

AMDAL Analisis Mengenai Dampak Lingkungan

BOD Biological Oxygen Demand

BRC British Retail Consortium

CHRA Chemical Health Risk Assessment

CoC Chain of Custody

COD Chemical Oxygen Demand

CPO Crude Palm Oil

CSR Corporate Social Responsibility

CU Control Union

CUC Control Union Certifications

DOE Department of Environment

EFB Empty Fruit Bunch

EIA Environment Impact Assessment

ERT Endangered Rare or Threatened species

EU European Union

FFB Fresh Fruit Bunch

FSC Forest Stewardship Council

FSC COC Forest Stewardship Council Chain of Custody

FSC FM Forest Stewardship Council Forest Management

GGL Green Gold Label

GMP Good Manufacturing Practice

GOTS Global Organic Textile Standard

GTP Good Trading Practice

GPS Global Positioning System

HACCP Hazard Analysis and Critical Control Point

HCV High Conservation Value

HCVF High Conservation Value Forest

HGU Hak Guna Usaha

IPM Integrated Pest Management

JAS Japanese Agricultural Standard

MSDS Material Safety Data Sheet

NC Non Conformity

OE Organic Exchange

OER Oil Extraction Rate. (CPO as a % of the mass of FFB).

OSH Occupational Safety and Health

OSHAS Occupational Safety and Health Assessment Scheme

P&C Principle and Criteria

PEFC Programme for the Endorsement of Forest Certification

PET Polyethylene Terephthalate

PK Palm Kernel

POM Palm Oil Mill

POME Palm Oil Mill Effluent

PPE Personal Protective Equipment

RKL Rencana Pengelolaan Lingkungan Hidup

RPL Rencana Pemantauan Lingkungan Hidup

RSPO Roundtable on Sustainable Palm Oil

RSPO NI Roundtable on Sustainable Palm Oil National Interpretation

RTE Rare, Threatened, and Endangered

SA8000 Social Accountability 8000

SEIA Social Environmental Impact Assessment.

SIA Social Impact Assessment

SOCSO Social Security Organisation






SOP Standard Operating Procedure

UKL/UPL Upaya Pengelolaan lingkungan (UKL) / Upaya Pemantauan Lingkungan (UPL)

USDA/NOP United States Department of Agriculture – National Organic Program

MT Metric Tonnes

WHO World Health Organization