confidential sirim qas international sdn. bhd. …sirim qas international sdn. bhd. building 4,...

MSC/RSPO/DOC/07-02 of 75 Issue 1 Rev 0

CONFIDENTIAL

SIRIM QAS INTERNATIONAL SDN. BHD. Building 4, SIRIM Complex, No. 1 ,Persiaran Dato‟ Menteri,

Section 2, P.O. Box 7035, 40911 Shah Alam, Selangor, Malaysia.

File Ref: ES11320002

RSPO SURVEILLANCE AUDIT REPORT

CLIENT : PPB Oil Palms Berhad Saremas 2 Estate, Bintulu, Sarawak ADDRESS OF MAIN SITE AUDITED (In the case of multisite certification, list additional sites in attachments): Palm Oil Mill : Saremas 2 Palm Oil Mill KM 115, Bintulu-Miri Road 97008 Bintulu SARAWAK Supply Base : (1) Saremas 2 Estate 18 KM off KM 115, Bintulu-Miri Road 97008 Bintulu SARAWAK (2) Segarmas Plantation 18 KM off KM 115, Bintulu-Miri Road 97008 Bintulu SARAWAK (3) Kaminsky Plantation 18 KM off KM 115, Bintulu-Miri Road 97008 Bintulu SARAWAK ASSESSMENT DATE : 20 to 24 June 2011 STANDARD : RSPO MYNI: 2008 SCOPE OF CERTIFICATION : Saremas 2 Palm Oil Mill and its supply base (Saremas 2 Estate, Segarmas and Kaminsky Plantations)

Report by Audit Team Leader Name : Dr. S.K.Yap Signature : Date : 30 March 2012

Report Reviewed by: Name : RADZIAH MOHD DAUD

Signature : Date : 27 APRIL 2012


TABLE OF CONTENTS

1 INTRODUCTION………………………………………………………………………………….........

1.1 Description of the Certification Unit (Estate and Mill)……………………………………….. 1.2 Location of Mills and Estates…………………………………………………………………… 1.3 Description of Supply Base (Fruit Sources)………………………………………………….. 1.4 Work Force……………………………………………………………………………………… 1.5 Date of Plantings and Cycles…………………………………………………………………… 1.6 Other Management System Certification Held (ISO etc) …………………………………… 1.7 Organisation Information / Contact Person………………………………………………….. 1.8 Actual & Approximate Tonnages Offered for Certification (CPO and PK)………………

2 ASSESSMENT PROCESS…………………………………………………………………………….

2.1 Assessment Methodology (Program, Site Visits)……………………………………………. 2.2 Date of Next Surveillance Assessment………………………………………………………... 2.3 Assessment Team………………………………………………………………………………..

3 NON –CONFORMITY REPORTS RAISED DURING THE PREVIOUS STAGE 2 AUDIT AND

CORRECTIVE ACTIONS TAKEN……………………………………………………………………. 4 ASSESSMENT FINDINGS……………………………………………………………………………..

Principle 1 : Commitment to Transparency………………………………………………… Principle 2 : Compliance with Applicable Laws and Regulations……………………….. Principle 3 : Commiment to Long-Term Economic and Financial Viability……………… Principle 4 : Use of Appropriate Best Practices by Growers and Millers………………. Principle 5 : Environmental Responsibility and Conservationof Natural Resources and Biodiversity……………………………………………………………………… Principle 6 : Responsible Consideration of Employees and of Individuals and Communities Affected by Growers and Mills……………………………….. Principle 8 : Commitment to Continuous Improvement on Key Areas of Activity………

5 ASSESSMENT RECOMMENDATION……………………………………………………………….. 6 ORGANIZATION’S ACKNOWLEDGEMENT OF INTERNAL RESPONSIBILITY AND

FORMAL SIGN-OFF OF ASSESSMENT FINDINGS………………………………………………. Tables: Table 1 : Coordinates of S2 Certification Unit (Mill and Estate)………………………………. Table 2 : FFB Contribution of Each Estate to Saremas 2 Palm Oil Mill……………………… Table 3 : Total and Composition of Workers……………………………………………………. Table 4 : Total Plantation and Area Planted……………………………………………………. Table 5 : Approximate CPO and PK Tonnage Claimed for Certification 2011……………… Photos: Photo 1 : Relevant Licences and Documents on Display in the Estate Office………………. Photo 2 : Boundary Marker With Neighbouring Plantation…………………………………..... Photo 3 : One of the Longhouses Within Seramas 2 Estate Demarcated for Use by the Local Community……………………………………………………………………....... Photo 4 : Distribution of Empty Fruit Bunches as Fertilizers in the Field…………………….. Photo 5 : Extensive Planting of Mucuna bracteata on the Slopes…………………………….

Page No.

5 5 5 6 6 7 7 7 8 8 8 8 8

11

11

11 12 18 19 37

43 54

56

56

6 6 6 7 8

13 16 17

21 22


Photo 6 : Signage Clearly Showing Riparian Buffer Belt and Activities Prohibited Erected Next to a Water Sampling Point………………………………………………………. Photo 7 : Map of Kaminsky Plantation Showing the Riparian Buffer Belts………………….. Photo 8 : Water Sampling Point No. 3 at Kaminsky Plantation……………………………….. Photo 9 : Chemical Store With Safety Posters and Procedure on Mitigation Action When Accidents Occur………………………………………………………………………… Photo 10 : Record of Medical Surveillance of a Herbicide Sprayer……………………………. Photo 11 : Signboard at Saremas Palm Oil Mill 2 Showing Summary of Mill Hazards Identified…………………………………………………………………………………. Photo 12 : Sprayers and Fertilizer Workers Equipped with Appropriate PPE………………… Photo 13 : Harvester With Hard Hat………………………………………………………………. Photo 14 : Safe Standard Operating Procedures (SSOP), Materials Safety Data Sheet (MSDS) on Display………………………………………………………………………. Photo 15 : Plan for Emergency Evacuation and Gathering Points…………………………….. Photo 16 : Annual Training Programme for Mill Workers……………………………………….. Photo 17 : HCV Sites Identified in Kaminsky and Segarmas Plantations…………………….. Photo 18 : Recycling Bins at the Land Fill Site…………………………………………………… Photo 19 : Landfill for Domestic Waste in the Estate……………………………………………. Photo 20 : Sign Erected on Prohibition of Burning of Domestic Waste at Line Side………… Photo 21 : New Housing With Water and Electricity Supply and Proper Sanitation Provided For Workers……………………………………………………………………………... Attachments: Attachment 1 : Location map of S2 Certification Unit (mill and estates)……………………………. Attachment 2 : RSPO Main Assessment Plan………………………………………………………... Attachment 3 : Detail of non-conformity Raised During Previous Stage 2 and Corrective Actions Taken…………………………………………………………………………………….. Attachment 4 : The details on the NCR (including corrective actions taken) and OFIs Raised During this Surveillance Audit…………………………………………………………...

23

24 25 29

30 32

33 33 34

34 35 38 39 40 42 48

57 58 67

72


Abbreviations: CHRA Chemical Health Risk Assessment CPO Crude Palm Oil CSDS Chemical Safety Data Sheet CSR Corporate Social Responsibility DOE Department of Environment DOSH Department of Occupational Safety and Health EFB Empty Fruit Bunch EHA Estate Hospital Assistant EIA Environmental Impact Assessment EPF Employees Provident Fund EQA Environmental Quality Act ERT Endangered, Rare and Threatened Species EARA Environmental Auditors Registration Association FFB Fresh Fruit Bunch FSC Forest Stewardship Council GAP Good Agricultural Practice HCV High Conservation Value HIRARC Hazard Identification, Risk Assessment and Risk Control IPM Integrated Pest Management ISO International Organization for Standardization IRCA International Register of Certificated Auditors IUFRO International Union of Forest Research Organization JCC Joint Consultative Committee KPI MC&I

Key Performance Index Malaysian Criteria and Indicators for Forest Management Certification

M.E Master of Engineering MBA Master of Business Administration MDP Management Development Programme MIS Management Information Services MoU Memorandum of Understanding M. Phil Master of Philosophy MPOA Malaysian Palm Oil Association MPOB Malaysia Palm Oil Board MS GAP-OP

Malaysian Standard Good Agricultural Practice – Oil Palm

MTCS Malaysian Timber Certification Scheme MYNI Malaysia National Interpretation NREB Natural Resources and Environment Board OER Oil Extraction Rate OSH Occupational Safety and Health OHSAS Occupational Health and Safety Assessment Series OHSMS Occupational Health and Safety Management System Ph.D. Doctor of Philosophy PIC Person in-Charge PK Palm Kernel POME Palm Oil Mill Effluent PPE Personnel Protective Equipment RSPO Roundtable on Sustainable Palm Oil SHO Safety and Health Officer SIA Social Impact Assessment SOP Standard Operating Procedure TOR Terms of Reference USA United States of America WTP Water Treatment Plant WWF World Wide Fund for Nature


RSPO SURVEILLANCE AUDIT REPORT

1. INTRODUCTION

1.1 Description of the Certification Unit (Estate and Mill) The certification unit (CU) being assessed was Saremas 2 (S2) which constituted Saremas Sdn. Bhd. (SSB), Segarmas Sdn. Berhad and Kaminsky Sdn. Berhad all wholly-owned subsidiary companies of PPB Oil Palms Berhad.(PPB Oil Palms). The S2 CU comprises the Saremas 2 Palm Oil Mill, Saremas 2 Estate, Segarmas Plantation and Kaminsky Plantation. The Stage 2 audit on S2 against the requirements of the RSPO MY-NI (2008) was conducted by SIRIM QAS International Sdn. Bhd. (SIRIM QAS International) on 27 November – 2 December 2008. Three site verification audits were conducted on 28-29 September, 7 October and 7 November 2009 to check on the effectiveness of the corrective actions taken by S2 to address the Non Compliance Reports (NCRs) raised during the Stage 2 audit. S2 was finally certified for RSPO sustainable palm oil production in June 2010. As of June 2011, there was a restructuring of the plantation businesses within the PPB Oil Palms. SSB is now made up of Saremas 2 Mill and Saremas 2 Estate; Segarmas Estate and Kaminsky Estate are now under the Segarmas Sdn Bhd and Kaminsky Sdn. Bhd respectively. S2 CU comprised Saremas 2 Palm Oil Mill, and the CU‟s own estates of Saremas 2, Segarmas and Kaminsky Plantations. Saremas 2 Palm Oil Mill commenced operations in 2000 with a processing capacity of 30 metric tonnes (MT) of FFBs per hour. On 13th August 2009, S2 obtained approval by Department of Environment (DOE) to increase the processing capacity to 45 MT of FFBs per hour. S2 consisted of fully developed area and hence Principle 7 of the RSPO Principles & Criteria was not applicable. The total workforce for S2 was 1,445 and about 92% of them were migrant field workers from Indonesia. 1.2 Location of Mill and Estates Seramas 2 Palm Oil Mill and the estates are located in Miri District, Sarawak, Malaysia. They can be accessed by the Bintulu-Lahad Datu (BLD) Road from its junction with the Bintulu-Miri Road. The other access is through Public Works Department (PWD) road from Simpang Jawa through Rumah Datu and Suai Plantations which is linked back to the BLD Road. In the immediate vicinity of S2 are longhouses and other oil palm plantations. There are five longhouses namely Rumah Bunsu, Rumah Tapu, Rumah Gundi, Rumah Merudi and Rumah Rimbo. Outside S2, there are four longhouses namely Rumah Sabang, Rumah Ringkai (Rumah Layang), Rumah Akai and Rumah Ujuh. Rumah Sabang is located at the southern edge while Rumah Ringkai is at the north-west end of the Suai Plantation. Rumah Sabang, Rumah Akai and Rumah Ujuh are located on Stateland while Rumah Ringkai lies within another company‟s oil palm plantation (Alam Wasa). It was noted that, Rumah Akai and Rumah Ujuh had been left empty since the last three years. Adjacent to Rumah Tapu is an Acacia mangium plantation that belongs to the Forest Department of Sarawak. There is one main river; the Batang Suai which passes through S2. There are four living quarters (known as line site) within S2. The Saremas 2 Central line site houses employees from Saremas 2 Estate and Saremas 2 Palm Oil Mill. The other three line sites are located in the Suai Plantation. S2 is administered by an office located in another CU, the Saremas 1 (S1). The official address of S2 is KM 18 off KM 115, Bintulu-Miri Road, Miri, Sarawak, Malaysia. There are other smaller offices within the estates. However, all correspondence is through the main office at S1. The location map of S2 CU (mill and estates) is shown in Attachment 1 while their coordinates are detailed in Table 1.


Table 1: Coordinates of S2 Certification Unit (Mill and Estates)

Operating Unit Latitude Longitude

Saremas 2 Palm Oil Mill 3º 26΄55.704" N 113 º46‟11.821"E

Saremas 2 Estate 3 º30‟22.422"N 113 º47‟55.555”E

Segarmas Plantation 3 º28‟8.21"N 113 º48‟23.864"E

Kaminsky Plantation 3 º24‟27.156"N 113 º45‟33.8"E

(Note: The coordinates are for the offices of the palm oil mill and estates)

1.3 Description of Supply Base (Fruit Sources) Saremas 2 Palm Oil Mill receives FFB supply from Saremas 2 Estate, Segarmas Plantation and Kaminsky Plantation and one smallholder. The average annual FFB contribution from each estate for the year 2010 is detailed in Table 2.

Table 2: FFB Contribution of Each Estate to Saremas 2 Palm Oil Mill

Estate FFB Production (2010)

Metric Tonnes Percentage

Saremas 2 Estate

94,919.82 38.8

Segarmas Plantation

73,351.11 30.1

Kaminsky Plantation 76,060.12 31.1

Total

244,331.05

100

1.4 Work Force S2 has a total workforce of 1,445 of whom about 92% were migrant field workers from Indonesia. The composition of workers within S2 is shown in Table 3.

Table 3: Total and Composition of Workers in S2

Operating Unit Local Foreign Sub-Total

Saremas Palm Oil Mill

22 55 77

Saremas 2 Estate

47 492 539

Segarmas Plantation

18 410 428

Kaminsky Plantation

20 381 401

Total

107

1,338

1,445


1.5 Date of Plantings and Cycle (Total Plantations and Area Planted)

Table 4: Total Plantations and Area Planted

Estate Year of Establishment

Total Area (ha)

Planted area (ha)

Saremas 2 Estate 1990 4,230.19 3,121.19

Segarmas Plantation 1994 4727 3,338.99

Kaminsky plantation 1996 3988 3193.49

Total 12,945.19 9,653.67

1.6 Other Management System Certifications Held (ISO etc)

The palm oil mill and all the estates do not hold any other form of third-party certification of their management systems. Nevertheless, they had been implementing an internal management system which was based on the requirements of the ISO 14001:2004 and the Occupational Health and Safety Act. 1.7 Organisational Information/Contact Person

PPB Oil Palms has a regional office in Bintulu, Sarawak, which is responsible for overseeing the S2 CU and other plantation management units in Sarawak. The correspondence address and contact person are as detailed below: Address: PPB Oil Palms Berhad Sarawak Operations, Lot 967, Sublot 7, Taman Seaview Commercial Centre, Jalan Tanjung Batu, P.O Box 730, 97008 Bintulu, Sarawak MALAYSIA. Contact person: Mr. Kiaw Che Weng Assistant General Manager Phone : + 60 85 325 713/+60 86 333 286

Fax : + 60 85 495 010/+60 86 315 220 + 60 86 315 223/+60 86 315 221


1.8 Actual and Approximate Tonnages Offered for Certification (CPO and PK)

The approximate tonnage of CPO and PK produced and claimed for certification, is shown in Table 5 as follows:

Table 5: Approximate CPO and PK Tonnage Claimed for Certification Year 2011

Certification Unit

CPO Tonnage claimed for certification

PK Tonnage claimed for certification

Saremas 2 Mill

103,478

23,442

Note: The amount claimed for certification excludes contribution from smallholdings & non-certified unit (Suburmas Plantations).

2. ASSESSMENT PROCESS 2.1 Assessment Methodology (Program, Site Visits) The surveillance audit was conducted on 20-24 June 2011. The main objectives of this surveillance audit are to (a) determine the continued compliance of S2 against the requirements of the RSPO MYNI: 2008, (b) verify the effectiveness of the corrective actions being implemented by S2 to address the NCRs raised during the previous Stage 2 audit and (c) make appropriate recommendation on the continued certification of S2 based on the findings of this surveillance audit. The planning of this surveillance audit was guided by the RSPO Certification Systems Document. All the estates and mill were inspected during this surveillance audit. The audit was conducted by visiting the field, mill, HCV habitats, labour lines, chemical and waste storage areas and other workplaces. Random interviews with management, employees, contractors and other relevant stakeholders. Apart from the above, records as well as other related documentation were also evaluated. The details on the surveillance audit programme are as in Attachment 2. 2.2 Date of Next Surveillance Audit Next surveillance audit should be conducted within twelve months from the date of this first annual surveillance audit was conducted. 2.3 Assessment Team

Member of the Assessment Team

Role/area of RSPO

requirements

Qualifications

1. Dr. S.K. Yap

Assessment team leader/ estate environmental issues and HCV habitats

Over 400 auditor days of auditing experience, UNDER the following: ISO 14001, MTCS MC&I and FSC forest management certification & RSPO

Technical expert for ISO 9001 (2008)

Completed RSPO Lead Assessor Course - 2008

Successfully completed EARA approved lead Assessor course for ISO 14001: 2001

Ph. D. (Forest Biology) University of Aberdeen (Scotland) and University of Malaya Fellowship in Tropical Rain Forest Project.

B.Sc. Hons. Second Class Upper (Botany),


University of Malaya Memberships in Professional Organizations:

Member of the IUFRO Working Party on Seed Problems. Nominated as one of the candidates for the Co-Chairman of Working Party in 1986.

Project Leader for Project 8 of the Reproductive Biology of Tropical Trees of the ASEAN-Australian Tree Improvement Programme. 1986. Given the role to develop research activities on reproductive biology within ASEAN countries with sponsorship from Australia.

Elected member of the Committee on Forest Tree and Shrub Seeds of the International Seed Testing Association. 1989 to 1992.

Vice Chairman of the Working Group on Seed Origin and Genetic Resources of the ASEAN Canada Forest Tree Seed Centre. 1990 to 1995. Responsible in coordinating research activities on genetic resources within the ASEAN countries.

Project leader on Impact of Acid Precipitation on Forest working in conjunction with researchers from China, Indonesia, Japan and Thailand.

Mr. Mahzan Munap

Auditor /Occupational Health and Safety & related legal issues

Collected over 370 days of auditing experience in OHSAS 18001 and MS 1722 OHSMS and RSPO (46 days for palm oil milling & 6 days for oil palm plantation).

CIMAH Competent Person with Malaysian Department of Occupational Safety and Health (DOSH) since 1997.

Occupational Safety and Health Trainer at INSTEP PETRONAS

Successfully completed RSPO Lead Assessor Course – 2008.

Successfully completed Lead Assessor Course for OHSAS 18001-2000.

Successfully completed IRCA accredited Lead Assessor training for ISO 9001-2006

MBA, Ohio University.

B.Sc. Petroleum Engineering, University of Missouri, USA.

Professor Datuk Abdul Rashid Abdullah

Auditor /Community issue /social criteria and national legislation

Attended training on RSPO Principle & Criteria and RSPO certification requirements in 16 November 2010

Current position as Director, Institute of East Asian Studies, Universiti Malaysia Sarawak

Appointed as the Vice Chancellor Universiti Malaysia Sarawak (Academic Affairs) from 1 February 2005 to end February 2008

Appointed as the Deputy Vice Chancellor (Academic Affairs) of Universiti Malaysia Sarawak from December 2000 to January 2005

Lecturer and founding Dean of the faculty of Social


Sciences, Universiti Malaysia Sarawak

PhD in Social Anthropology, Hull University.

M.Sc. in Development Studies, Cornell University.

Some of the research projects

Masyarakat Pesisir Sarawak Barat Daya

Centre-periphery relation: Its implications on the smallholders in Sarawak

Socio-cultural change in the Melanau community in Wing. A (ed) kaum melanau

Current research projects

Engaging the market: Peripheral communities of Belaga district (Project leader: 2008-2010)

The Iban Diaspora: Iban communities in Tawau and Brunei Darulsalam (Research team) 2009 - 2011

Mr. Akim Kaji

Auditor/ environmental management system

Working Experiences:

April 2001 to Present: Certification Executive at SIRIM QAS International Sdn Bhd

Worked in the following positions at Motorola Semiconductor Sdn Bhd, Seremban

1998: Senior Facilities Administrator

1995-1997: Facilities Administrator

1991–1993: Staff Technical Specialist/ Engineering Assistant

1980-1990: Senior Facilities Technician

1979: Junior Facilities Technician

1976-1978: Engine Room Maintenance Technician at Malaysia International Shipping Corporation.

As Lead Auditor for environmental management system audit and had conducted EMS certification audits for over 10 years.

Attended ISO 14000 Advanced EMS Auditing Training, 2001

Attended OHS Lead Assessor Course ISO 18001, 2009

Attended the RSPO Lead Assessor Course in April 2011

CPE International Diploma in Occupational Safety and Health, Queensland University of Technology

1997

Mr. Yap Nyoke Yong, Raymond

Auditor / Good Agricultural Practices (GAP) and workers issues

Collected 12 days of auditing experience in RSPO.

36 years experience in plantation management, covering rubber and oil palm

Diploma in Agriculture, University of Malaya

Working Experience :

Estate Manager, Kuala Lumpur Kepong Berhad

External Planting Advisor, Kumpulan Guthrie Berhad

Rubber Inspector, RISDA Pahang, Malaysia.

Involvement in professional organizations

Associate member of Incorporated Society of


Planters

Chairman MPOA (Negeri Sembilan Branch)

Vice-Chairman MPOA (Negeri Sembilan Branch)

Vice Chairman of Pahang Planters Association

Chairman of ISP West Pahang Branch

3. NON –CONFORMITY REPORTS RAISED DURING THE PREVIOUS STAGE 2 AUDIT AND

CORRECTIVE ACTIONS TAKEN During the previous Stage 2 Audit, the assessment team had raised 2 major and 2 minor NCRS on S2. The details on these NCRs, the corrective actions taken by S2 to address them and the remarks by the Assessment Team Leader on the verifications are as in Attachment 3. 4. ASSESSMENT FINDINGS

The audit findings were highlighted and discussed during the on-site audit. This surveillance audit has resulted in the issuance of one (1) major Non Conformity Reports (NCRs) and nineteen (19) Observation for Improvements (OFIs). The details on the NCR (including corrective actions taken) and OFIs are as in Attachment 4. The findings of this surveillance audit are reported based on the format for the RSPO MY-NI indicators. The detailed findings of this surveillance audit on S2‟s compliance to the requirements of the RSPO MY-NI are as follows:

PRINCIPLE 1: COMMITMENT TO TRANSPARENCY Criterion 1.1

Oil palm growers and millers provide adequate information to other stakeholder on environmental, social and legal issues relevant to RSPO Criteria, in appropriate languages and forms to allow for effective participation in decision making. Indicator 1.1.1

Records of requests and responses must be maintained. Major compliance Guidance:

Growers and millers should respond constructively and promptly to requests for information from stakeholders

Audit Findings: All the estates had maintained records on requests for information or documents that were related to the RSPO Criteria. However, from the record books, it was found that S2 had not received any request for such information from external stakeholders. Criterion 1.2

Management documents are publicly available, except where this is prevented by commercial confidentially or where disclosure of information would result in negative environmental or social outcomes. This concerns management documents relating to environmental, social and legal issues that are relevant to compliance with RSPO Criteria. Documents that must be publicly available include, but are not necessarily limited to:-

1.2.1 Land titles / user rights (C 2.2) 1.2.2 Safety and health plan (C4.7) 1.2.3 Plans and impact assessments relating to environmental and social impacts (C 5.1, 6.1, 7.1, 7.3)


1.2.4 Pollution prevention plans (C 5.6) 1.2.5 Details of complaints and grievances (C 6.3) 1.2.6 Negotiation procedures (C 6.4) 1.2.7 Continuous improvement plan (C 8.1)

Guidance:

Examples of commercially confidential information include financial data such as costs and income, and details relating to customers and/or suppliers. Data that affects personal privacy should also be confidential. Examples of information where disclosure could result in potential negative environmental or social outcomes include information on sites of rare species where disclosure could increase the risk of hunting or capture for trade, or sacred sites, which a community wishes to maintain as private.

Audit Findings:

All the documents listed in this Criterion were made available in the offices of all the estates. Land titles, policies of the company, licenses and organizational charts were put on display in the offices.

PRINCIPLE 2: COMPLIANCE WITH APPLICABLE LAWS AND REGULATIONS Criterion 2.1

There is compliance with all applicable local, national and ratified international laws and regulations Indicator 2.1.1

Evidence of compliance with legal requirement Major compliance

Audit Findings: S2 had established a documented system for the purpose of ensuring legal compliance. This included a documented procedure and written information on legal requirements. The procedure addressed the mechanism to identify the related legal requirements and the method to track changes and for monitoring compliance. The identified legal requirements applicable to S2‟s operations were recorded in the legal register. These certificates, permits and licenses were displayed prominently in the office (see Photo 1). Among the identified legal requirements, permits and licenses checked in each of the estate were: 1. „Ordinan Perniagaan Profesion dan Perlesen Perdagangan’ No.A101139, which is valid from 14/1/11

to 26/1/12 2. ‘Surat Kuasa’ or Authorization Letter Ref. No. BTU. SK. 58/2003(PDB) issued by the Enforcement

Division, Ministry of Domestic Trade and Consumer Affairs for Petrol, Diesel and Chemical Fertilizer 3. Environmental Quality Act and Regulations 1974 4. EIA Report/EIA Approval Ref. No. (8) NREB/6-3/15 dated 27/10/1997 issued by the Natural

Resources and Environment Board Sarawak 5. „Sijil Kebenaran Bertulis Alat Pembakaran Bahanapi di-bawah Peraturan Peraturan Kualiti Alam

Sekeliling (Udara Berseh) 1978,P.U.(A) 280 issued by the Jabatan Alam Sekitar Negeri Sarawak.

6. The Factories and Machinery Act and Regulations, 1967

7. The Occupational Safety and Health Act, 1994

8. Petroleum (Safety Measures) Act 1984

9. Poison Act 2952, Dangerous Drug Act 1952

10. Wildlife Conservation Enactment 1997

11. The Worker‟ Minimum Standards of Housing and Amenities Act, 1990 12. Permit Potongan Daripada Gaji Pekerja issued by the Jabatan Tenaga Kerja Sarawak Permit

Potongan Daripada Gaji Pekerja, (Seksyen 114 Ordinan Buruh (Sarawak Bab 76)


13. Licence No. 503228102000 issued by the Malaysian Palm Oil Board valid from 1/8/2010 to 31/7/2011

Photo 1: Relevant Licences and Documents on Display in the Estate’s Office.

S2 had committed to comply with all legal requirements. Licenses and permits issued by the relevant government agencies were available and valid. Licences displayed were those for the purchase and storage of diesel, CPO and PK and the approval condition for mills operation. An EIA Report for Kaminsky Estate had been conducted and approved by the Natural Resources and Environment Board (NREB) Sarawak. Approval conditions were made available and monitoring at intervals of every three months was conducted with the reports submitted to the NREB. For the other estates, Environmental Management Plans were presented. These were also approved by NREB and quarterly monitoring reports had been submitted with the assistance of a consultant Chemical Laboratory (Malaysia) Sdn. Bhd. Two complete set of monitoring reports for 2009 and 2010 were examined. These reports were accepted without negative comments. Evidences such as the record of periodic inspection by the Department of Occupational Safety & Health on boilers, pressure vessels and hoisting machines were also available and found satisfactory. Other records verified were records of the issuance and acceptance of Personnel Protective Equipment (PPE), workplace inspection records and minutes of the safety committee meetings. Records relating to pollutants monitoring such as boiler emission and effluent discharges were also available and it was noted that these had been communicated to the authority as scheduled. Saremas 2 Palm Oil Mill would have to comply with the requirement for competent persons in accordance to the Factories and Machinery (Person-In-Charge) Regulations 1970. It was observed during the Stage 2 audit that the person in charge of steam boilers only possessed competency certificate for 2

nd Grade Steam

Engineer when a 1st Grade Steam Engineer was required and therefore a non-conformity finding was reissued. This was temporarily resolved by engaging an external visiting engineer and at the same time sending the current 2

nd Grade Steam Engineer to sit for the 1

st Grade Steam Engineer examination. This problem had

reoccurred during this surveillance audit.


Further, the Engineer in-charge for boiler and steam engine was not assisted at every shift by 1st and 2

nd

Grade Boiler/Steam Engine Driver. Also, the Gensets were not attended as per the legal requirement by a 1

st Grade Internal Combustion Engine Driver but was instead manned by a non-competent person. In

addition, on the electrical front, similar to Saremas Palm Oil Mill 1, the Visiting Electrical Engineer only visited the mill once in three months instead of monthly. Therefore, a major NCR MM1 was raised.

Indicator 2.1.2

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

Audit Findings: A legal register was presented during the assessment. S2 had obtained written approvals pertaining to all pollution prevention equipment from the relevant authority with specified conditions. It was, however, noted during this surveillance audit that some of the applicable conditions specified for all the estates and mills had not been registered in the legal register. Annual compliance monitoring against all applicable conditions had been conducted but some of the results recorded had not been comprehensive and accurate. Therefore an OFI 1 was raised.

Indicator 2.1.3

A mechanism for ensuring that they are implemented. Minor compliance

Audit Findings: Environmental Management Plans for all the estates were presented to the auditor. These were approved by the Sarawak NREB. Quarterly monitoring reports had been submitted with the assistance of a consultant company, Chemlab Sdn. Bhd. The complete set of reports for 2009 and 2010 were examined. Evidences such as the record of periodic inspection by the Department of Occupational Safety & Health on boilers, pressure vessels and hoisting machines were also available and found satisfactory. Sighting of the log book filled by Department of Occupational Safety & Health (DOSH) Officers Sarawak after each visit revealed that S2 was generally complying with the Occupational Safety & Health Act and its Regulations. Where comments were made corrective actions to rectify them were seen taken and found to be effective. Other records verified were records of the issuance and acceptance of Personnel Protective Equipment (PPE), workplace inspection records and minutes of the safety committee meetings. Records relating to pollutants monitoring such as boiler emission and effluent discharges were also available and it was noted that these had been communicated to the authority as scheduled.

Indicator 2.1.4

A system for tracking any changes in the law. Minor compliance

Audit Findings: The Safety & Health Officer was responsible for identifying changes in legal requirements, especially changes in Sarawak legal requirements.


Criterion 2.2

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

Indicator 2.2.1

Evidence of legal ownership of the land including history of land tenure. Major compliance

Audit Findings: All the estate land was leased from the Sarawak State Government for 60 years and the condition of the lease was for „Agriculture Purpose‟. All the estates were found to be in compliance with that lease condition. Land titles for all the estates were made available and those examined were as follows: Saremas Estates 1 & 2

Lease TRN 04-LCLS-030-000-00049 – 9,895 ha. Terminating in 2056 Lease TRN 04-LCLS-030-000-00057 – 2,284 ha. Terminating in 2045 Segarmas Estate.

Lease TRN 04-LCLS-030-039-0001 – 4,727 ha. Terminating in 2053 Kaminsky Estate

Lease TRN14-LCLS-030-042-00001 – 3,988 ha. Terminating in 2054

Indicator 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 compliance

Audit Findings: All the estates were in compliance with the conditions as stated in the terms and conditions of the lease agreements that the land is for agricultural purpose.

Indicator 2.2.3

Evidence that boundary stones along the perimeter adjacent to state land and other reserves are being located and visibly maintained. Minor compliance Specific Guidance: Growers should attempt to comply with the above indicator within 15 months from date of announcement of first audit. Refer to State Land Office for examples of other reserves.

Audit Findings: During the site inspection conducted in the 3 estates, it was observed that there were distinct red and white coloured wooden boundary markers (see Photo 2). The positions of these markers were labeled and recorded on the maps kept at the Ecological Management Unit (EMU) in Seramas 1 Estate.


Photo 2: Boundary Marker with Neighbouring Plantation

Indicator 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 compliance Guidance: 1. For any conflict or dispute over the land, the extent of the disputed area should be mapped out in a participatory

way. 2. Where there is a conflict to the condition of land use as per land title, growers must show evidence that

necessary action has been taken to resolve the conflict with the relevant authorities. 3. Ensure a mechanism to solve the dispute (Refer to C 6.3 and C6.4) 4. Evidence must be demonstrated that the dispute has been resolved. 5. All operations shall cease on land planted beyond the legal boundary.

Audit Findings: It was observed that there was no conflict or dispute over the land per se. The boundaries of the estates with the five longhouse communities had been clearly mapped. The established mechanism in the form of Community-Based Development Committee (CDC) with members comprising all the relevant headmen/women and the estate management had continued to serve as a forum to resolve conflicts and disputes between the longhouse communities and the management of S2. This CDC met at least 3 times a year. Through this Committee, community improvement projects were discussed and implemented and grievance, conflict and dispute resolved.


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. Indicator 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 compliance

Audit Findings: There was no land within the estates being encumbered by customary rights. The land made available for use by the five local longhouse communities had been clearly mapped and the communities had been well-informed of the boundaries. Houses of the local communities had been constructed in these areas (see Photo 3). The local communities had full access to this land. The S2 management had prepared an MoU which commits them to guarantee giving uninterrupted access by the local communities to the land. Three of the longhouse communities had signed the MOU while the other two were still studying it.

Photo 3: One of the Longhouses next to Seramas 2 Estate Built by a Local Community

Indicator 2.3.2

Map of appropriate scale showing extent of claims under dispute. Major compliance

Audit Findings: As indicated in the findings on Indicator 2.3.1 above, there was no case involving land disputes in S2 and as stated above all the longhouse community areas had been clearly demarcated.


Indicator 2.3.3

Copies of negotiated agreements detailing process of consent (C2.2, 7.5 and 7.6). Minor compliance Guidance:

Where lands are encumbered by legal or customary rights, the grower must demonstrate that these rights are understood and are not being threatened or reduced. This criterion should be considered in conjunction with Criteria 6.4, 7.5 and 7.6. Where customary rights areas are unclear these are best established through participatory mapping exercises involving affected and neighbouring communities. This criterion allows for sales and negotiated agreements to compensate other users for lost benefits and/or relinquished rights. Negotiated agreements should be non-coercive and entered into voluntarily, carried out prior to new investments or operations and based on an open sharing of all relevant information in appropriate forms and languages, including assessments of impacts, proposed benefit sharing and legal arrangements. Communities must be permitted to seek legal counsel if they so choose. Communities must be represented through institutions or representatives of their own choosing, operating transparently and in open communication with other community members. Adequate time must be given for customary decision-making and iterative negotiations allowed for, where requested. Negotiated agreements should be binding on all parties and enforceable in the courts. Establishing certainty in land negotiations is of long-term benefit for all parties.

Audit Findings: This Indicator is not applicable because there was no disputed land within the estates, by either legal or customary rights. The management of S2 and the communities had mapped out the boundaries of the longhouses‟ area. Nevertheless, S2 had prepared an MoU expressing its commitment to guarantee uninterrupted access to the land by each of the longhouse‟s community. Three of the communities had signed the document while the other two were still studying it.

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. Indicator 3.1.1

Annual budget with a minimum 2 years of projection Major compliance Specific Guidance:

Annual budget may include FFB yield/ha, OER, CPO yield/ha and cost of production that is not required to be publicly available.

Audit Findings: A Management Plan including crop forecast, profit and loss, infra-structure development (roads, houses etc) covering the period of 2011 to 2016 had been prepared for all the estates and made available to the assessment team. This Plan has also included a replanting program for the same period. For the Saremas 2 Estate, Segarmas Plantation and Kaminsky Plantation the auditors had seen the projection on the yield/cost/profit from 2009 to 2014 while for the Segarmas Plantation and Kaminsky


Plantation crop forecast, expenditure and profit and loss for the years 2011 to 2016 were made available. Projection of yield/cost/profit from 2009 to 2014 was examined for Seramas 2 Estate.

Indicator 3.1.2

Annual replanting programme projected for a minimum of 5 years with yearly review. Minor compliance

Audit Findings: It was found that S2 had prepared a Replanting Schedule for the following estates: Saremas 2 Estate 2012 509 ha 2013 327 ha The audit team had also checked the monthly reports on the progress of replanting which had been prepared and used by S2 for internal monitoring of its replanting programme.

PRINCIPLE 4: USE OF APPROPRIATE BEST PRACTICES BY GROWERS AND MILLERS

Criterion 4.1

Operating procedures are appropriately documented and consistently implemented and monitored. Indicator 4.1.1

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

Audit Findings: An Agriculture Manual & Standard Operation Procedure [Manual and SOP] (2011 Edition) was sighted. This Manual and SOP prescribed all the standard operation procedures which include the monitoring of compliance. It was observed that, ripeness standard and chemicals usage had been properly understood by the field workers as evident during the random interviews conducted in the field. The checking on crop quality was done by the Eco-Management Audit Unit. The record on this crop quality checking was sighted. The audit team was of the view that the existing Manual and SOP could be further improved by documenting in it the procedures on the following: (a) methane recovery in the newly established plant in the Palm Oil Mill and the Tertiary Effluent

Treatment Plant; (b) mitigation mechanism during abnormal and emergency situations for the boiler and ETP; (c) alternative mechanism to record dark smoke emission from the boiler during the malfunction of the

smoke density meter; and (d) Water discharge from the monsoon drains coming out from the non process areas. These observations were raised as OFI 2.

Indicator 4.1.2

Records of monitoring and the actions taken are maintained and kept for a minimum of 12 months. Minor compliance


Audit Findings: Monthly Progress and Annual Reports on monitoring of all activities were made available during the surveillance. These reports had also been displayed on the office‟s notice boards. These monitoring reports were kept and maintained in the estate offices for at least a year.

Criterion 4.2

Practices maintain soil fertility at, or where possible improve soil fertility to, a level that ensures optimal and sustained yield. MY-NIWG recommends that the indicators in criterion 4.2 and 4.3 are linked Indicator 4.2.1

Monitoring of fertilizer inputs through annual fertilizer recommendations. Minor compliance

Audit Findings: S2 had conducted a soil test and the Agronomist had drawn up a soil map. This work had been well documented in the annual report by the Head of R &D Wilmar International. A soil map for each of the estate was made available to the assessment team. Based on the Reconnaissance Soil Map, it was found out that the S2 had 10 soil associations. An annual agronomic foliar analysis had been conducted in all the estates and the results formed a basis to ascertain soil fertility and recommendation for the use of fertiliser.

Indicator 4.2.2

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

Audit Findings: As mentioned in the findings on Indicator 4.1.2, an annual agronomic foliar analysis had been conducted in all the estates and the results formed a basis to ascertain soil fertility and recommendation for the use of fertiliser.

Indicator 4.2.3

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

Audit Findings: Empty fruit bunches (EFBs) had been distributed and used as organic fertilizer for the oil palm trees in all the estates (see Photo 4). This was done mainly for the young planting and along roadsides (3-5 rows from both sides of the road). It was observed that the application of EFBs as fertilizer had adhered to the structured EFB program for all the matured trees.


Photo 4: Distribution of Empty Fruit Bunches as Fertilizers in the Field

Criterion 4.3

Practices minimise and control erosion and degradation of soils. Indicator 4.3.1

Documented evidence of practices minimizing soil erosion and degradation (including maps). Minor compliance Specific Guidance:

Replanting on sloping land must be in compliance with MSGAP Part 2: OP (4.4.2.2) For Sarawak, steep slopes are considered high risk erosion areas and cannot undergo replanting unless specified in the EIA report and approved by the Natural Resources and Environment Board (NREB). For Sabah, slopes 25 degree and steeper are considered high risk erosion areas and cannot undergo replanting unless specified in the EIA report [Environment Protection (Prescribed Activities)(Environment Impact Assessment) Order 2005] and approved by the Environmental Protection Department (EPD). Slope determination methodology (slope analysis) should be based on average slope using topographic maps or topographical surveys.

Audit Findings: Slope classification maps for the estates showing steep slopes above 25 degrees were made available to the assessment team. It was observed that terraces had been constructed in all sloping areas with regular bunds at an interval of 20 meters to retain water and as erosion control measure. The assessment team had inspected soil erosion monitoring plots laid out on 3 different types of terrains Type 1-flat, Type 2- undulating and Type 3-steep. „Vertiver‟ grass planting was initiated to control erosion and land slide on steep slopes. As mentioned in the findings on Indicator 4.2.3, the application of EFBs as fertilizer was done in the young planting areas and along roadsides (3-5 rows of palm trees from both sides of the road) which further reduced erosion.


It was observed that, roads had been satisfactorily constructed and water runoff was adequate. Rain water was drained into the terraces on the lower slopes. In matured area, frond stacking (one stack in 4 palms) was done.

Indicator 4.3.2

Avoid or minimize bare or exposed soil within estates. Minor compliance Specific Guidance:

Appropriate conservation practices should be adopted.

Audit Findings: During the field audit, it was observed that generally the estates had been well protected from soil erosion by natural vegetation. Circular weeding had been implemented. Ground cover had been a standard requirement with „Mucuna bracteata‟ as cover crop being extensively planted in exposed slopes (see Photo 5). In matured planted area, frond stacking (one stack with 4 palms) was observed. This had helped to further reduce the incidences of erosion. It was also observed that the presence of the fern cover „Neprolepis biserrata‟ had been rather sporadic. In order to encourage the growth of this fern, S2 should practise the sequential usage of herbicides (rotating chemicals used to avoid on excessive application of one herbicide). This was raised as OFI 3.

Photo 5: Extensive Planting of Mucuna bracteata on the Slopes

Indicator 4.3.3

Presence of road maintenance programme. Minor compliance

Audit Findings: It was observed that harvesting roads in the plantations inspected (in all the estates) were of satisfactory condition and that water runoff was found to be adequate. Rain water was drained into the terraces and lower slopes. There was a road maintenance programme (machine utilization programme) for each of the estate.


Criterion 4.4

Practices maintain the quality and availability of surface and ground water. Indicator 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 compliance

Specific Guidance:

Riparian buffer zones: Reference to be made to relevant national regulations or guidelines from state authorities e.g. Department of Irrigation and Drainage (DID), whichever is more stringent.

Audit Findings: Riparian belts along the major rivers in all the estates had been demarcated with appropriate signage. The buffer belts of the Sungai Nibong, Sungai Sibua and Sungai Simbau were found to have been correctly demarcated with proper signage being erected. The smaller unnamed rivers in all the estates also had their signages (see Photo 6). A map of the riparian buffer belts was also made available to the assessment team (see Photo 7).

Photo 6: Signage Clearly Showing Riparian Buffer Belt and Activities Prohibited Erected Next to a Water Sampling Point


Photo 7: Map of Kaminsky Plantation Showing the Riparian Buffer Belts


Indicator 4.4.2

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

Audit Findings: It was observed that there was no construction of bunds/weirs/dams across the main rivers or waterways in the estates and that aall stream and drainage were without any obstruction.

Indicator 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 compliance

Audit Findings: Water sampling had been conducted at specified sampling points along the main rivers in all the estates as specified under the approval conditions of the Environmental Management Plans. The reports on water sampling were submitted at quarterly intervals by all estates to the NREB Sarawak. In the Kaminsky Plantation sampling points at the discharge points into the main water courses had been inspected (see Photo 8).

Photo 8: Water Sampling Point No. 3 at Kaminsky Plantation

Map of the sampling points, was made available during the surveillance. The water sampling was done by a consultant Ecolab every quarterly and the reports submitted to the NREB Sarawak. It was observed that S2 (both the mill and estates) had conducted a systematic monitoring on water and air qualities. However, this monitoring would have been more beneficial if the data obtained could be reviewed and appropriate mitigation actions taken to improve the water and air qualities. For this observation, an OFI 4 was raised.


Indicator 4.4.4

Monitoring rainfall data for proper water management Minor compliance

Audit Findings: Data on rainfall was collected by the estates. Records on rainfall from 2006 to 2011 were made available and they were examined by the assessment team. Procedures on minimizing water usage were implemented in all the offices, mills and estates. Rain water harvesting was constructed in line sites and estate complexes.

Indicator 4.4.5

Monitoring of water usage in mills (tonnage water use/tonne FFB processed). Minor compliance Specific Guidance: Data trended where possible over 3 years to look into resource utilization

Audit Findings: S2 had continued to monitor the amount of water being used by the mills and the estates. It was observed that the records of the mill‟s daily water use (litres of water per ton of FFB) as well as the monthly and daily water consumption in the estates were being kept. For the palm oil mill, an average of 2.13 litres of water per MT FFB was recorded in 2009 but this had been reduced to 1.80 litres per MT FFB in 2010.

Indicator 4.4.7

Evidence of water management plans. Minor compliance

Audit Findings: Awareness programme to minimize water usage had been implemented in all the offices, mills and estates. The assessment team had studied the SSB Water Management Plan of January 2008. The facilities for harvesting rain water had been constructed in the line sites and estate complexes. All the water obtained from the rivers was treated before supplying to the workers. For the harvesting of rain water, every house had been equipped with its own rain water collection tank.

Criterion 4.5

Pests, diseases, weeds and invasive introduced species are effectively managed using appropriate Integrated Pest Management (IPM) techniques. Indicator 4.5.1

Documented IPM system. Minor compliance

Audit Findings: S2 had continued to implement the Integrated Pest Management (IPM) in the estates. One of the techniques used was by establishing beneficial plants along road sides and vacant areas. This practice had been clearly documented in the Manual and SOP.


Indicator 4.5.2

Monitoring extent of IPM implementation for major pests. Minor compliance Specific Guidance:

Major pests include leaf eating caterpillars, rhinoceros beetle and rats.

Audit Findings: As mentioned in the findings under Indicator 4.5.2, beneficial plants had been planted along road sides and vacant areas in all the estates. The species used were Antigonon leptopus, Cassia cobanensis and Tunera subulata. Although there was no attack by pest, the planting of these beneficial plants had been established. The incidences of pest attack were monitored to determine the success of the IPM. The assessment team had inspected the Cover Crop Planting of Beneficial Plants (LCC Planting Program 2011). The planting of these beneficial plants in the Suai Plantation which had been programmed and scheduled according to the Planting Programme requirement should be replicated in other estates.

Indicator 4.5.3

Recording areas where pesticides have been used. Minor compliance

Audit Findings: It was found out that currently S2 had not been using insecticides as there was no outbreak of pest attack. The application of pesticides was only made when the incidences of attack had exceeded the accepted threshold level for such attack.

Indicator 4.5.4

Monitoring of pesticide usage units per hectare or per ton crop e.g. total quantity of active ingredient (ai) used / tonne of oil. Minor compliance

Audit Findings: Herbicides sage had been monitored. For 2010 a total of 2.2632 litres of ai (active ingredients) per ha had been applied in the field. The chemicals used were as follows: 1. Glyphosate(Glyphosate Isopropilamine 41% ai) at 1.936 ai /ha 2. Amine (2-4 D dimethylamine 47.8% ai) 0.056 ai / ha 3. Basta (Glufosate ammonium 13.5% ai) 0.03 ai / ha 4. Garlon (Triclopyr Buoxy Ethyl Ester 32.1% ai)0.240 ai / ha 5. Tordon (Picloram) 0.0002 ai / ha 6. Starane (fluroxypyr methylheptyl 30% ai)0.001 ai / ha


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 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. Indicator 4.6.1

Written justification in Standard Operating Procedures (SOP) of all Agrochemicals use. Major compliance

Audit Findings: All chemicals usage was based on the „need to do basis‟ to enhance field operations. It was found that no Class I & II chemicals had been used. It had also been the practice that insecticides and rodent baits are used only after a threshold (minimum damage) level has been exceeded and that no prophylactic use of such pesticides would be permitted. S2 had provided written justifications for all the agrochemicals it had used in the Manual and SOP. The Manual has included a chemical register list which indicates the purpose of usage (intended target), hazards signage, trade and generic names.

Indicator 4.6.2

Pesticides selected for use are those officially registered under the Pesticides Act 1974 (Act 149) and the relevant provision (Section 53A); and in accordance with USECHH Regulations (2000). Major compliance Specific Guidance:

Reference shall also be made to CHRA (Chemical Health Risk Assessment)

Audit Findings: No Class I & II chemicals had been used as all herbicides used were registered under the Pesticides Act 1974. S2 has adopted the PPB‟s Oil Palm‟s Occupational Safety and Health Policy, plan and programme. The plan had been documented, communicated and implemented across all levels of the organization. Hazard identification, risk assessment and risk control (HIRARC) records, as well as CHRA records were verified during this surveillance. However, it was observed that S2 still had stock of Matikus which was purchased in 1992. This stock would have to be disposed off as the product had exceeded its shelf life. In case S2 still need to use rat baits, it should be using only Warfarin-based baits. This observation was raised as OFI 5.

Indicator 4.6.3

Pesticides shall be stored in accordance to the Occupational Safety and Health Act 1994 (Act 514) and Regulations and Orders and Pesticides Act 1974 (Act 149) and Regulations. Major compliance Specific guidance:

Unless participating in established recycling programmes or with expressed permission from the authorities, triple rinsed containers shall be pierced to prevent misuse. Disposal or destruction of containers shall be in accordance with the Pesticide Act 1974 (Act 149) and Environmental Quality Act 1974 (Scheduled Wastes) Regulations 2005.


Audit Findings: The storage of these chemicals was found to be in accordance to the related legal requirements. The store was locked and specific persons-in-charge have been assigned to attend to it. The appropriate PPE for handling these chemicals were also available at the point of use.

Indicator 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 compliance

Audit Findings: A concrete chemical store with locked door had been constructed in all the estates (see Photo 9). The chemical storekeeper had shown understanding of the hazards involved and the required control measures. Records of the purchase, storage and use of agrochemicals were properly documented in the Stock Statement Return. Empty chemical containers had to be triple rinsed and if not required for use in the field were pierced to prevent misuse. The disposal or destruction of empty chemical containers was found to be in accordance with legal requirements. MSDS instructions were displayed.

Photo 9: A Chemical Store With Safety Posters and Procedure on Mitigation Action When Accidents Occur

Indicator 4.6.5

Annual medical surveillance as per CHRA for plantation pesticide operators. Major compliance

Audit Findings: S2 had a schedule for medical surveillance of its workers. The medical surveillance was conducted by the Estate Hospital Assistant for estate sprayers who were exposed to the dangers of chemicals. The surveillance reports showed that all the sprayers were healthy and suffered no detrimental effects as a result


of their job. In addition to the above, all the sprayers had to undergo annual medical surveillance carried out by Occupational Health Doctor. Workers Medical Surveillance by OHD – Biological Monitoring (Annually) 2009/2010 was presented to the assessment team during this surveillance (see Photo 10).

Photo 10: Record of Medical Surveillance of a Herbicide Sprayer

Indicator 4.6.6

No work with pesticides for confirmed pregnant and breast-feeding women. Major compliance

Audit Findings: Monthly tests had been conducted in the estate clinics and all pregnant and breast-feeding women were not allowed to work as pesticides sprayers.

Indicator 4.6.7

Documentary evidence that use of chemicals categorised 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 compliance

Audit Findings: There was no evidence to show that „Paraquat‟ had been used in any of the estates.

Indicator 4.6.8

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


Audit Findings: It was observed that there was no aerial spraying being conducted in all the estates.

Indicator 4.6.9

Evidence of chemical residues in CPO testing, as requested and conducted by the buyers. Minor compliance

Audit Findings: It was found out that the mill had not received any request to conduct tests on chemical residues in CPO.

Indicator 4.6.10

Records of pesticide use (including active ingredients used, area treated, amount applied per ha and number of applications) are maintained for either a minimum of 5 years or starting November 2007. Minor compliance

Audit Findings: For 2010 a total of 2.2632 litres ai (active ingredients) per ha were applied in the field. These chemicals used were as follows: 1. Glyphosate(Glyphosate Isopropilamine 41% ai) at 1.936 ai /ha 2. Amine (2-4 D dimethylamine 47.8% ai) 0.056 ai / ha 3. Basta (Glufosate ammonium 13.5% ai) 0.03 ai / ha 4. Garlon (Triclopyr Buoxy Ethyl Ester 32.1% ai) 0.240 ai / ha 5. Tordon (Picloram) 0.0002 ai / ha 6. Starane (fluroxypyr methylheptyl 30% ai) 0.001 ai / ha A bin card system for the issuance of agrochemicals (FIFO) had been practiced in the chemical store.

Criterion 4.7

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

Indicator 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(Act139). Major compliance The safety and health (OSH) plan shall cover the following: a. A safety and health policy, which is communicated and implemented. b. All operations have been risk assessed and documented. c. An awareness and training programme which includes the following specifics for pesticides:

i. To ensure all workers involved have been adequately trained in a safe working practices ( See also C4.8) ii. All precautions attached to products should be properly observed and applied to the workers.

d. The appropriate personal protective equipment (PPE) are used for each risk assessed operation. i. Companies to provide the appropriate PPE at the place of work to cover all potentially hazardous operations

such as pesticide application, land preparation, harvesting and if used, burning. e. The responsible person (s) should be identified. f. There are records of regular meetings between the responsible person(s) and workers where concerns of

workers about health and safety are discussed. g. Accident and emergency procedures should exist and instructions should be clearly understood by all

workers. h. Workers trained in First Aid should be present in both field and mill operations. i. First Aid equipment should be available at worksites.

Audit Findings:


Saremas2 has adopted PPB‟s Occupational Safety and Health Policy, plan and programme. The plan was documented, communicated and implemented to all levels of the organization. Hazard identification, risk assessment and risk control (HIRARC) records, as well as CHRA records were verified during the assessment and found to be in good order. However, the OSH objectives could be further improved by including compliance to all the legal requirements so as to be reflective of the Wilmar‟s commitment as stated clearly in its OSH policy and confirming with the RSPO Principles and Criteria. This observation was raised as OFI 6. The HIRARC carried out had covered the activities in both the estates and mill. Among the activities identified were chemical mixing and spraying, harvesting, slashing and FFB collection in the estates. As for the mill, the identified activities were laboratory work, boiler operations, FFB sterilization, kernel extraction, oil extraction and clarification (see Photo 11).

Photo 11: Signboard at Saremas Palm Oil Mill 2 showing Summary of Mill Hazards identified.

Similar to Saremas 1 Palm Oil Mill, Saremas 2 Palm Oil Mill had also identified significant hazards and risks and determined appropriate risk control measures in their HIRARC Register. However, unlike Saremas 1 Palm Oil, Saremas 2 Palm Oil Mill had revised and updated its HIRARC Register following an accident that occurred on 9

th October 2010.

Evidence of implementation of appropriate risk control measures was observed during the field and mill assessment where employees had been provided with and were seen to be using the appropriate PPE (see Photo 12). First aid boxes were noticed located at several strategic locations at the mills and were also provided to each of the field supervisors. It was also noted that machines which have moving parts were well guarded while in the estate clean water was provided and transported to the field for use by the sprayer team. Records of this distribution were kept in PPE Distribution to Harvester Items-Harness 2011 and these records were presented during the assessment. Fruit harvesters had been provided with hard hats (see Photo 13).


Photo 12: Sprayers and Fertilizers Workers Equipped with Appropriate PPE

Photo 13: Harvester with Hard Hat

The Field Supervisors were found to be conversant with the first aid practices for minor injuries. It was also noted that machines which have moving parts had been well guarded. In the estate, clean water was provided and transported to the field for use by the sprayer team. Bath rooms and wash area for clothing were made available near the chemical stores. However, the frequency for issuance of PPE (examples masks, gloves, aprons, goggles) could have been standardized as some Divisions had issued them more regularly than others. Some had been issued at monthly intervals while some quarterly or as and when the PPE was damaged. This was therefore raised as OFI 7. In addition, there was a need to improve on the issuance of Personal Protective Clothing and appliance including foot-wear in accordance to FMA (Safety, Health and Welfare) Regulations 1970. This was therefore raised as OFI 8.


S2 had provided facilities for the various types of emergencies that had been identified. Ambulance was on 24 hours call with duty officer to cater for emergency cases. A midwife had been employed to deal with emergency cases. Safe Standard Operating Procedures (SSOP), Materials Safety Data Sheet (MSDS) and Laboratory Fume Hood were among the information communicated and equipment used by the staff of Saremas Palm Oil Mill 2 (Photo 14).

Photo 14: Safe Standard Operating Procedures (SSOP), Materials Safety Data Sheet (MSDS) on display

Information on response to emergencies had been disseminated. This included site plan showing evacuation route to assembly point and location of firefighting equipment and action to be taken during emergency by staff and contractors (see Photo 15).

Photo 15: Plan for Emergency Evacuation and Gathering Points

As practiced in Saremas 1, Saremas 2 also had a typical Emergency Response Team comprising of First Aiders, Fire Fighters and Search and Rescue Team formed at both mill and estate levels. It also had basic


emergency kit that include stretcher, First Aid box, emergency eye wash and shower station. In spite of First Aid Kits were made available at office and in the fields, as highlighted in Saremas 1 the content of the First Aid Box could be standardized throughout PPB Sarawak operations so that it is in accordance to DOSH First Aid Guidelines, 2

nd Ed. This observation was raised as OFI 9. Interviews with First Aiders at

the field and mill showed that they were aware of their duties and responsibility. They were trained by Red Crescent, Bintulu Chapter. Although fire and evacuation drills had been conducted at the mill and line sites, this could be improved with more credible scenarios including „fainting‟; „injured victims‟ including emergency response drill at night could be stimulated to test the team‟s preparedness. An OFI 10 was raised. The same Safety and Health Officer (SHO) responsible for Saremas 1 had also been appointed to be responsible for the OSH implementation in the mill and estates at Saremas 2. It was verified during the assessment that there were records of regular meetings/communication between management and workers as noted in the regular morning briefings, the quarterly OSH Committee meetings and Sub-Committee meetings. The minutes of meetings were prepared and kept and Saremas 2 had taken necessary action to rectify issues highlighted in the meetings. OHS training for staff and workers had been conducted as per the OSH plan and programme developed by the SHO. Among the training identified in the OSH plan were RSPO Awareness, Induction Course, OSH at Workplace, Safe Standard Operating Procedure, Machine and Tools, Basic First-aider, understanding of CSDS and the use of PPE (See Photo 16).

Photo 16: Annual Training Programme for Mill Workers

A Safety and Health Officer (SHO) had been appointed to be responsible for the OSH implementation in the mill and estates. It was verified during this surveillance that there were records of regular meetings/communication between management and workers as noted in the regular morning briefings, the quarterly OSH Committee and Sub-Committee meetings. The minutes of these meetings had been prepared and maintained and S2 had taken the necessary actions to rectify issues highlighted in the meetings.


Other OSH plans were workplace inspection/OSH audit, meetings and monitoring programmes. It was also verified during this surveillance that accident records were kept and the relevant reports including ‘Jawatankuasa Keselamatan dan Kesihatan Pekerjaan’ (JKKP) 8 had been submitted timely to the Department of Occupational Safety and Health (DOSH) by the SHO.

Indicator 4.7.2

Records should be kept of all accidents and periodically reviewed at quarterly intervals. Major compliance Specific Guidance:

Record of safety performance is monitored through Lost Time Accident (LTA) rate.

Audit Findings: Accidents had been recorded by the Safety Officer and displayed as LTA on the notice board of each office. For the year 2010, there were 95 accidents. These records were kept in the Occupational Accident Record and also Occupational Accident Statistics 2010. The cases were classified under harvesting, spraying, slashing, fertilizing, drivers and others. The relevant accident reports including JKKP 8 were submitted to the Department of Occupational Safety and Health (DOSH) by the SHO timely. The assessment team had sighted the report on accident investigation or „Laporan Siasatan Kemalangan‟ dated 31 October 2010.

Indicator 4.7.3

Workers should be covered by accident insurance. Major compliance

Audit Findings: S2 had provided a group insurance for all workers as required under the Workmen Compensation Act 1992. The assessment team had sighted the insurance certificate No. 040940914 issued by „Etiqa‟ expiring on 29 June 2011. It was also observed that an insurance card had been issued to each of the worker.

Criteria 4.8

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

Indicator 4.8.1

A training programme (appropriate to the scale of the organization) that includes regular assessment of training needs and documentation, including records of training for employees are kept. Major compliance

Audit Findings: A training schedule was drawn up at the beginning of the year for implementation. Training sessions for work related first aid procedures had been documented. Training was conducted once in every 3 months due to the high turnover of workers. Contractors had also been briefed on safety, RSPO, ESH and OSH requirements upon commencement of work. During the field interviews with the workers in the various work sites, they were found to be knowledgeable on the safety usage of PPE and First Aids. Contractors would usually be briefed on safety and also on RSPO, ESH, OSH requirements upon commencement of work. There was a Joint Consultative Committee for all stakeholders and the minutes of meeting of the JCC on 28.September 2009 were presented. The topics discussed covered all guidelines of RSPO, OSH and ESH


principles. Annual Training Programme and Syllabus (Staff Individual Training) for the period 2008 to 2010 was examined during this surveillance. It had been observed that although appropriate training programmes had been established and conducted in all the estates and mill, this process could be further improved with a review being made to evaluate the effectiveness of the training programmes. This was raised as OFI 11. 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. Indicator 5.1.1

Documented aspects and impacts risk assessment that is periodically reviewed and updated. Major compliance

Audit Findings:

S2 had continued to review and up-date the environmental aspects and impacts risk assessment for activities relating to the estates and mill operations. However, the evaluation exercise on some activities in the mills and estates to determine its significance level was not conducted in accordance to the level of significance according to established criteria. Therefore an OFI 12 was raised.

Indicator 5.1.2

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

Audit Findings: Environmental improvement plans to mitigate the negative impacts had been developed and implemented. Among the plans were improving the quality of effluent discharged from the mills, emission of methane converted to energy production, reduction of fuel consumption and increasing the 3Rs initiatives in domestic waste management.

Criterion 5.2

The status of rare, threatened or endangered species (ERTs) and high conservation value habitats, if any, that exists 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. Indicator 5.2.1

Identification and assessment of HCV habitats and protected areas within landholdings; and attempt assessments of HCV habitats and protected areas surrounding landholdings. Major compliance

Audit Findings: The HCVF scoping assessment of the estates had been completed in July 2008 with HCV 1 and HCV 4 sites identified (see Photo 17). A report by the consultant entitled „HCVF Scoping Assessment of Saremas 1 & 2 Estates of PPB Oil Palms Berhad‟ had documented the ERT species within the residual forested areas of the estates. The HCV Monitoring and Management Action Plan April 2011, was presented to the assessment team.


Photo 17: HCV Sites Identified in Kaminsky and Segarmas Plantations

S2 had initiated a monitoring programme to maintain these HCV sites for protection. These HCV sites had been clearly demarcation and mapped. The monitoring activities could be enhanced by training the team members to familiarise them on the biological activities such as flowering and fruiting behaviours of the trees which will allow planning for fruit collection for rehabilitation of degraded forest sites as well as animal movement. In addition, the status of the mud pool and salt licks should be appropriately amended instead of the present status as HCV4. These observations were raised as OFI 13.

Indicator 5.2.2

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

Audit Findings: The HCV Management and Monitoring Plans for Saremas 2, Segarmas and Kaminsky Plantations 2011 were presented to the assessment team. The document s had included the HCV habitats and the identification of ERT species through consultation made with wildlife section of the Sarawak Forest Department. It was observed that the management practices on HCV could be further enhanced through a monitoring procedure that focuses on the core attributes of the HCV sites. Severely degraded areas within the protected areas could be rehabilitated with suitable vegetation cover to encourage fauna movement. In


addition, the prevention of poaching could be improved with posters of ERT species being widely displayed within each of the estate as was done at Bukit Duran. This was raised as OFI 14.

Indicator 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 compliance

Audit Findings: Poaching was not allowed within the plantation with warning signage being placed at the entrances of each estate. Posters on protected animals were also observed being displayed at the guard posts.

Criterion 5.3

Waste is reduced, recycled, re-used and disposed off in an environmentally and socially responsible manner. Indicator 5.3.1

Documented identification of all waste products and sources of pollution. Major compliance

Audit Findings: Domestic Waste Records based on number of trips to the landfills was maintained in each division of the estates. This allowed the estate management to identify the types and amount of wastes generated as well as their sources. It was observed that recycling bins had been placed in all offices and line sites. In addition, at all the landfill sites recycling bins were also made available for the sorted domestic wastes brought in from the estates (see Photo 18 & 19). Aluminum cans, plastic bags and papers were re-cycled from domestic waste (see Photo 13). They were donated to the Tzu Chi Foundation. Records on domestic waste recycle for Kongsi 58, Kongsi Lama and Kongsi Baru were presented to the assessment team.

Photo 18: Recycling Bins at the Land Fill Site


Photo 19: Landfill for Domestic Waste in the Estate

It was observed that mill waste EFB was used as organic supplements in the fields and EFB mulching was done in all new plantings and along roadsides.

Indicator 5.3.2

Having identified wastes and pollutants, an operational plan should be developed and implemented, to avoid or reduce pollution. Minor compliance Specific Guidance:

Audit Findings: The disposal of scheduled wastes was done through a licensed contractor, Wasteway (Malaysian) Sdn. Bhd. (Wasteway) in accordance to the Schedule Waste 2005. Wasteway has a valid licence to transport and store scheduled waste. The licence was valid from 1 May 2011 to 30 April 2012. Invoices and consignment notes issued by Wasteway were presented to the assessment team during this surveillance. It was observed that the notification of new types of scheduled wastes generated could be enhanced with record being appropriately maintained at all sites. At the same time, the management would have to follow up and determine that the final disposals of its scheduled wastes were done at the approved facility for treatment, disposal or recovery. This was raised as OFI 15.

Indicator 5.3.3

Evidence that crop residues / biomass are recycled (Cross ref. C4.2). Minor compliance

Audit Findings: It was observed that EFB had been collected and used as fertilizer in the estates. The use of EFB as fertilizer was done in the young planting areas and along roadsides (3-5 rows of palm trees from the road)

Criterion 5.4

Efficiency of energy use and use of renewable energy is maximized. Indicator 5.4.1

Monitoring of renewable energy use per tonne of CPO or palm product in the mill. Minor compliance


Audit Findings: It was observed that the oil palm fiber and shells from the processing of FFBs in the palm oil mill were used as boiler fuel to generate steam for the mill, as well as electricity for the mill complex and line sites. S2 had maintained and recorded the usage of this renewable energy. Monthly monitoring of fossil fuel usage per tonne of CPO was also being done.

Indicator 5.4.2

Monitoring of direct fossil fuel use per tonne of CPO or kW per tonne palm product in the mill (or FFB where the grower has no mill). Minor compliance

Audit Findings: S2 had continued to monitor the monthly consumption of diesel per tones of CPO in all the estates and palm oil mills. Monthly consumption of diesel was documented in all estates and mills. For the estate the amount of diesel consumed was 6.45l per MT FFB. For Saremas 1 Palm Oil mill the consumption was from 2.45 to 4.16 l per MT FFB.

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. Indicator 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 compliance

Audit Findings: There was no open burning being observed during this surveillance audit as this had not been allowed under the law and not permitted under any circumstances as clearly stated in the Manual and SOP.


Indicator 5.5.2

Previous crop should be felled/mowed down, chipped/shredded, windrowed or pulverized/ ploughed and mulched. Minor compliance Specific Guidance:

A special dispensation from the relevant authorities should be sought in areas where the previous crop or stand is highly diseased and there is a significant risk of disease spread or continuation into the next crop.

Audit Findings: There was no replanting observed during this surveillance audit. It was reported that all old palm trees would be felled and chipped for mulching during the replanting phase.

Indicator 5.5.3

No evidence of burning waste (including domestic waste). Minor compliance

Audit Findings: No burning of domestic wastes was allowed as specified under the Manual and SOP. It was observed that clear signage had been erected at the line side on the prohibition of this activity (see Photo 20).

Photo 20: Sign Erected on Prohibition of Burning of Domestic Waste at Line Side

Criterion 5.6

Plans to reduce pollution and emissions, including greenhouse gases, are developed, implemented and monitored. Indicator 5.6.1

Documented plans to mitigate all polluting activities (Cross ref to C5.1). Major compliance


Audit Findings: The palm oil mill had been installed with a tertiary effluent treatment plan and a methane recovery plant was planned after the testing in Saremas 2 Palm Oil Mill.

Indicator 5.6.2

Plans are reviewed annually. Minor compliance Specific Guidance:

Pollutants and emissions are identified and plans to reduce them are developed in conformance to national regulations and guidance.

Audit Findings: Pollutants and emissions had been identified in the Aspects and Impacts Register. Proper procedures, which are in accordance to the national regulations and guidance had been developed to reduce these pollutants and emissions. Audit Findings: Not applicable as there was no peat soil in the estates PRINCIPLE 6: RESPONSIBLE CONSIDERATION OF EMPLOYEES AND OF INDIVIDUALS AND COMMUNITIES AFFECTED BY GROWERS AND MILLS

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. Indicator 6.1.1

A documented social impact assessment including records of meetings. Major compliance Specific Guidance:

Non-restrictive format incorporating elements spelt out in this criterion and raised through stakeholder consultation including local expertise.

Audit Findings: An SIA document entitled „Scoping SIA Saremas 2 & Segarmas and Kaminsky Estates of PPB Oil Palms Bhd‟ was made available to the assessment team. This SIA document had provided limited information on the critical issues that could provide a more concrete basis for mitigation and plan for continuous improvement of the local communities. However, there was an additional SIA document dated 19 September 2010 which had been prepared to address the problem being raised by a local community following the trenching along the boundary with the

Indicator 5.6.3

Monitor and reduce peat subsidence rate through water table management


community and neighboring estates. This SIA which focused on the “boundary trench” issue could serve as a basis for designing future revision of the SIA. A great deal of new measures had been introduced and projects implemented under the additional SIA document. This more systematic documentation of these measures had highlighted the linkages between identified impacts-plan of action-implementations. Evidences of mitigation plan, implementation, and continuous improvement were found both during the field-visits and discussions held with stakeholders/longhouse communities and in documented form (Community-based Development Committee Files and Management Review After Audit Files).

Indicator 6.1.2

Evidence that the assessment has been done with the participation of affected parties. Minor compliance

Specific Guidance:

Participation in this context means that affected parties or their official representatives or freely chosen spokespersons are able to express their views during the identification of impacts, reviewing findings and plans for mitigation, and monitoring the success of implemented plans.

Audit Findings: Evidence of participation of local communities was shown in the mitigation plan, their implementation and continuous improvement. These were found both during the field-visits and discussions with stakeholders/longhouse communities and in documented form (Community-based Development Committee Files and Management Review After Audit Files).

Indicator 6.1.3

A timetable with responsibilities for mitigation and monitoring is reviewed and updated as necessary. Minor compliance

Guidance:

Identification of social impacts may be carried out by the grower in consultation with other affected parties, including women and migrant workers as appropriate to the situation. The involvement of independent experts should be sought where this is considered necessary to ensure that all impacts (both positive and negative) are identified. Particular attention should be paid to the impacts of outgrower schemes (where the plantation includes such a scheme). Plantation and mill management may have social impacts on factors such as: 1. Access and use rights. 2. Economic livelihoods (e.g. paid employment) and working conditions. 3. Subsistence activities. 4. Cultural and religious values. 5. Health and education facilities. 6. Other community values, resulting from changes such as improved transport /communication or arrival of

substantial migrant labour force.

Audit Findings: Following the first SIA, the management of S2 had conducted an additional SIA study to address the new problem raised by a local community following the trenching along the boundary with the community and neighboring estates. This SIA which had focused on the specific issue could provide a basis for designing future revision of the SIA.


As indicated under the findings on Indicator 6.1.1, a great deal of new measures had been introduced and projects being implemented. Evidences of mitigation plan, implementation, and continuous improvement were found both during the field-visits and discussions held with stakeholders/longhouse communities and in documented form (Community-based Development Committee Files and Management Review After Audit Files).

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. Indicator 6.2.1

Documented consultation and communication procedures. Major compliance

Audit Findings: There were a policy and procedures on communication and consultation with stakeholders as outlined in the Standard Operating Procedure for Consultation and Communication (SOP-CC). The Joint Consultative Committee and Community-based Development Committee had also provided forums for communications and consultations between the management and other interested parties. Various modes of management to staff/workers communication had also been practiced which include daily assemblies, internal circulars and memos, notices, posters, environmental and social campaigns, management walk, suggestion box, staff/worker representatives as well as complaint form.

Indicator 6.2.2

A nominated plantation management official at the operating unit responsible for these issues. Minor compliance

Audit Findings: A Social and Welfare Committee had been formed. The members of the Committee were the Assistant General Manager (Sarawak Operations) as the Chairman, Saremas‟s Human Resource Manager as the secretary, and the managers of the mills and estates. In addition, a Community-based Development Committee had also been set up to foster closer rapport with the local communities.

Indicator 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 compliance Specific Guidance:

Decisions that the growers or mills are planning to make should be made clear, so that local communities and other interested parties understand the purpose of the communication and/or consultation. Communication and consultation mechanisms should be designed in collaboration with local communities and other affected or interested parties These should consider the use of existing local mechanisms and languages. Consideration should be given to the existence/ formation of a multi-stakeholder forum.

Communications should take into account differential access to information of women as compared to men, village leaders as compared to day workers, new versus established community groups, and different ethnic groups. Consideration should be given to involving third parties, such as disinterested community groups, NGOs, or government (or a combination of these), to facilitate smallholder schemes and communities, and others as appropriate, in these communications.


Audit Findings: A list of stakeholders consulted had been maintained. Internal and external communication procedures had also been established.

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. Indicator 6.3.1

Documentation of the process by which a dispute was resolved and the outcome. Major compliance Specific Guidance:

Records are to be kept for 3 years.

Audit Findings: A complaint and grievance form had been adopted and used. A compilation and a monthly summary on all complaints and grievances captured by the form were prepared. Resolutions of complaints and grievances were also being guided by an SOP for grievances and complaints (SOP-GC). Besides these specific instruments, grievances and complaints would also be dealt through the Joint Consultative Committee and the Social and Welfare Committee (Standard Operating Procedures and Continuous Improvement Plan 2008. Minutes of meetings of the above-mentioned committees had been sighted. It was observed that the form used to record grievances and complaints had been used actively to record a „request‟ as well. It would be better to differentiate between „request‟ and „complaints and grievances‟ as a record which also include many „request‟ may be misinterpreted as giving an impression that S 2 had received many grievances and complaints. This was raised as OFI 16.

Indicator 6.3.2

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

Audit Findings: A complaint and grievance form had been adopted and used. A compilation and a monthly summary on all complaints and grievances captured by the form were prepared. Resolution of complaints and grievances was also guided by an SOP on grievances and complaints (SOP-GC) to ensure that resolution of disputes was done effectively, timely and in appropriate manner.

Indicator 6.3.3

The system is open to any affected parties. Minor compliance Guidance:

Dispute resolution mechanisms should be established through open and consensual agreements with relevant affected parties. Complaints may be dealt with by mechanisms such as Joint Consultative Committees (JCC) with gender representation. Grievances may be internal (employees) or external.


Audit Findings: The system provided opportunities to all affected parties to lodge their grievances and complaints. The Joint Consultative Committee responsible for dealing with these issues was represented by employees of both genders. Audit Findings: The Community-based Development Committee served as a forum for disputes and grievances resolution pertaining to the local indigenous communities. This Committee was used to initiate the resolution of the grievances between some local communities and S 2 with regard to the trenching of boundaries. The dispute had been resolved amicably. The Committee had also served to promote better understanding between S 2 and the five longhouse communities living within the plantation area. It was observed that the procedures used for identifying the legal and customary rights could be improved by standardizing the names of the Committees being established to deal with these matters and up-dating the changes (in documents) whenever amendments are made to the established procedures. This was raised as OFI 17. Audit Findings: There was no legal or customary rights-encumbered land involved. However the area made available for use by the five local communities had been clearly mapped and the local people were well-informed of the boundaries. The local communities had full access to this land. MoUs on this matter had been signed between S2 and three local communities while the other two communities were still studying it.

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. Indicators 6.4.1

Establishment of a procedure for identifying legal and customary rights and a procedure for identifying people entitled to compensation. Major compliance

Indicator 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 compliance

Indicator 6.4.3

The process and outcome of any compensation claims is documented and made publicly available. Minor compliance


Audit Findings: As stated above there were no legal or customary rights claim on land and S2 had signed or in the process of signing an MOU with each of the six the local communities by which S2 had agreed to provide full access of the land occupied by local communities. MoUs on resolution on land claims had been signed between S 2 and three local communities while the other two communities were still studying it.

Criterion 6.5

Pay and conditions for employees and for employees of contractors always meet at least legal or industry minimum standards and are sufficient to provide decent living wages. Indicator 6.5.1

Documentation of pay and conditions. Major compliance

Audit Findings:

It was found that wage rates and conditions of work had followed the industry‟s standard and met all legal requirements (these are documented in the contract document). The contract document was as specified under the Sarawak government legal requirements. Free housing and basic amenities (electricity and water) had been provided to the workers. About 95 percent of these workers had been housed in type H housing (conforming to legal requirement). The construction of more similar housing-units was underway to house all the remaining workers (see Photo 21). Workers have free access to basic health services provided through company-run clinics. The company also provide pre-school by way of the Humana schools for foreign workers‟ children and transportation to near-by government schools for children of the local workers and staff. Each estate has also been provided with a mosque and chapel. The provision shops in each of the estate sold basic household goods (mainly food items) with their prices being monitored by the Social and Welfare Committee.

Photo 21: New Housing With Water and Electricity Supply and Proper Sanitation Provided for workers


Indicator 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 compliance

Audit Findings: Employment Contract Rule 2 of the Labour (Contents of a Contract) Rules (Sarawak) 2005 was adhered to when workers were taken in to work. The personal particulars, details of terms and conditions of employment (RM15 per day), overtime rate, working hours and rest day per week were clearly spelt out in the contract.

Indicator 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 compliance Guidance:

Where temporary or migrant workers are employed, a special labour policy should be established. This labour policy would state the non discriminatory practices; no contract substitution of original contract, post arrival orientation program to focus especially on language, safety, labour laws, cultural practices etc; decent living conditions to be provided. Migrant workers are legalised, and a separate employment agreement should be drawn up to meet immigration requirements for foreign workers, and international standards, if ratified.

Audit Findings: It was observed that all workers in the estates had been provided with appropriate housing, treated water supply, medical, educational and welfare amenities. Workers had free access to basic health services provided through company-run clinics. S2 had also provided pre-school by way of the Humana schools for foreign workers‟ children and transportation to near-by government schools for children of local workers and staff. S2 did not discriminate between foreign and local workers in terms of pay and conditions of work. The salary scheme for the workers, either local or foreign, was similar. All foreign workers had to fulfill the legal requirements before they could be employed to work in the estate.

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. Indicator 6.6.1

Documented minutes of meetings with main trade unions or workers representatives. Major compliance

Audit Findings: There was documented procedure for collective negotiation and resolutions of disputes or grievances (compiled in standard operating procedure and continuous Improvement Plan, 2008). Statements in Malay language recognizing the freedom of association had been displayed in appropriate places in the estate.


Indicator 6.6.2

A published statement in local languages recognizing freedom of association. Minor compliance Guidance:

The right of employees and contractors to form associations and bargain collectively with their employer should be respected. Documented company policy recognizing freedom of association. Labour laws and union agreements or in their absence, direct contracts of employment detailing payments and other conditions are available in the languages understood by the workers or explained carefully to them by a plantation management official in the operating unit.

Audit Findings: Labour laws were in the English language. However, the estate manager had informed the assessment team that he would arrange for the new contract to be explained to the workers in groups when the time comes. It was observed that statements in „Bahasa Melayu‟ or Malay language recognizing the freedom of association had been displayed in appropriate places in the estate. There was documented procedure for collective negotiation and resolutions of dispute or grievances (compiled in the SOP and Continuous Improvement Plan, 2008)

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. Indicator 6.7.1

Documented evidence that minimum age requirement is met. Major compliance Guidance:

Growers and millers should clearly define the minimum working age, together with working hours. Only workers 26 years and older may be employed, with the stated exception of family farms. Smallholders should allow work by children only if permitted by national regulations.

The minimum age of workers should be not less than 16 years, or the minimum school leaving age, or the minimum age permitted under national regulations, where higher.

Audit Findings: There was a documented statement on the policy of not employing under-age individuals. This policy statement had also been displayed for public knowledge in appropriate places in the estate.

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. Indicator 6.8.1

A publicly available equal opportunities policy. Major compliance

Audit Findings:


Policy statements on equal opportunities had been displayed in appropriate places in the estate. Based on random interviews held with the foreign workers, it was found that they had been happy with the working and pay conditions offered to them. It was observed that the workforce was of multi-cultural and multi-national living and mixing together on the jobs and at places of residence. Generally it was observed that they had no apparent dissatisfaction as the pay scheme and work benefits for both foreign and local workers were the same.

Indicator 6.8.2

Evidence that employees and groups including migrant workers have not been discriminated against. Minor compliance Guidance:

The grievance procedures detailed in 6.3 apply. Positive discrimination to provide employment and benefits to specific communities is acceptable as part of negotiated agreements

Audit Findings: As in indicated in the findings on Indicator 6.8.1, the workforce was of multi-cultural and multinational living and mixing together on the jobs and at places of residence. Generally it was observed that they had no apparent dissatisfaction as the pay scheme and work benefits for both foreign and local workers being the same.

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. Indicator 6.9.1

A policy on sexual harassment and violence and records of implementation. Major compliance

Audit Findings: A policy against sexual harassment and violence against women was in place. Awareness programs about sexual harassment and violence against women had been conducted periodically. Sexual harassment had been a standing agenda in the meeting of the Committee for Women and Children.

Indicator 6.9.2

A specific grievance mechanism is established. Major compliance Guidance:

There should be a clear policy developed in consultation with employees, contractors and other relevant stakeholders, which should be publicly available. The policy is applicable within the boundaries of the plantation/mills or while on duty outside the premises. Progress in implementing the policy should be regularly monitored and the results of monitoring activities should be recorded. A committee specifically to address concerns of women may be required to comply with the criterion. This committee will consider matters such as; training on women‟s rights, counseling for women affected by violence and child care facilities to be provided by the growers and millers. The activities of the committee should be documented.


Audit Findings: The management of S 2 had respected the rights of its personnel to join any trade union of their choice and to bargain collectively. This was reflected in the official published statement in Bahasa Melayu recognizing the freedom of association for the workers. Documented minutes of meetings between the management of S2 with the workers‟ representatives were also made available. Based on random interviews held with the employees and workers‟ representatives, it was revealed that they had understood their rights to freedom of association. There was a published policy on sexual harassment and violence which had been publicly displayed and made available to all employees in languages they understand. Forms for registering complaints about sexual harassment were made available and being sighted. The procedure was guided by the Sexual Harassment in the Workplace Act. There was a specific grievance mechanism to handle on issues related to sexual harassment and violence. A Gender Committee, whose responsibilities among others is to look into gender issues had been established in each estate/mill being assessed. This Committee, the „Jawatankuasa Kebajikan Wanita dan Kanak-Kanak‟ comprised representatives of female staff and workers, and the CU‟s management.

Criterion 6.10

Growers and mills deal fairly and transparently with smallholders and other local businesses. Indicator 6.10.1

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

Audit Findings: Prices of FFB had clearly been displayed at the palm oil mill and palm oil prices and pricing were discussed in the Joint Consultative Committee Meeting. Similarly, FFB prices had also been discussed with smallholders in the Community-based Development Committee. A mechanism to enable smallholders to be paid in cash immediately upon sale of their FFB had been developed through discussions and consultations of this committee.

Indicator 6.10.2

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

Audit Findings: It was observed that the prices of FFB had clearly been displayed at the palm oil mill and palm oil prices and pricing had been discussed in the Joint Consultative Committee Meeting.

Indicator 6.10.3

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


Audit Findings: Oil palm prices were also discussed with smallholders in the Community-based Development Committee. Complaint regarding prices and other FFB related dealings between mill and suppliers were registered with the Mill Manager and reviewed by an internal mechanism. It was found out that current and past prices for FFB were made available publicly.

Indicator 6.10.4

Agreed payments shall be made in a timely manner. Minor compliance Guidance:

Transactions with smallholders should consider issues such as the role of middlemen, transport and storage of FFB, quality and grading. The need to recycle the nutrients in FFB (under 4.2) should also be considered; where it is not practicable to recycle wastes to smallholders, compensation for the value of the nutrients exported might be made via the FFB price. Smallholders must have access to the grievance procedure under criterion 6.3, if they consider that they are not receiving a fair price for FFB, whether or not middlemen are involved. The need for a fair and transparent pricing mechanism is particularly important for out growers, who are contractually obliged to sell all FFB to a particular mill. If mills require smallholders to change practices to meet the RSPO criteria, consideration must be given to the costs of such changes, and the possibility of advance payments for FFB could be considered.

Audit Findings: As indicated in the findings on Indicator 6.10.1, prices of palm oil were being discussed with smallholders in the Community-based Development Committee. A mechanism to enable smallholders to be paid in cash immediately upon sale of FFB had been developed through discussions and consultations of this committee.

Criterion 6.11

Growers and millers contribute to local sustainable development wherever appropriate. Indicator 6.11.1 Demonstrable contributions to local development that are based on the results of consultation with local communities.

Minor compliance Guidance:

Contributions to local development should be based on the results of consultation with local communities. See also Criterion 6.2. Such consultation should be based on the principles of transparency, openness and participation and should encourage communities to identify their own priorities and needs, including the different needs of men and women. Where candidates for employment are of equal merit, preference should always be given to members of local communities in accordance to national policy. Positive discrimination should not be recognized as conflicting with Criterion 6.8.

Audit Findings: Through the Community-based Development Committee, S 2 had implemented several quality of life related projects and livelihood enhancement initiatives such as the following:

Supply of water tanks to the needy members of the longhouses;

Improving convenience by installing communal water pipes;


Giving materials for house-repairs to the needy households;

Making oil palm planting material available at below market price;

Giving access to plantation roads: and

Employment opportunities to the local communities PRINCIPLE 7: RESPONSIBLE DEVELOPMENT OF NEW PLANTING Not applicable, as S 2 is a fully developed estate and there was no new planting.

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. MY NIWG commits to demonstrate progressive improvement to the following but not limited to: Indicator 8.1.1

Minimize use of certain pesticides (C4.6) Major compliance

Audit Findings: The management of the estates and mills had established SSOP for monitoring and reviewing activities for continuous improvement. The estates had maintained a programme of determining the threshold level of pest infestation before deciding on pesticides application. During this surveillance, it was observed that pesticides had not been applied in the estates. An Integrated Pest Management Programme (IPMP) had also been practiced in all estates through the planting of beneficial plants. GAP practices had satisfactory been maintained within the industry norm. Mills waste had been re-cycled and used as soil supplement and EFB used as fertilizer in the field.

Indicator 8.1.2

Environmental impacts (C5.1) Major compliance

Audit Findings: A management and monitoring programme had been established for the HCV areas identified within the 2 estates. Specific monitoring points had been identified and mapped. Both maps and monitoring records were presented during this surveillance audit. Environmental monitoring had also been conducted according to the Environmental Management Plan for each estate. These reports had been submitted on time to the NREB. New chemical stores made of concrete had been constructed in all the estates. Each had a proper lock and key system controlled by the storekeeper. Appropriate safety posters had been placed at the entrance. Washing facilities for clothing, bath rooms and first aid boxes had also been provided.


Indicator 8.1.3

Maximizing recycling and minimizing waste or by-products generation. Major compliance Specific Guidance To work towards zero-waste (C5.3)

Audit Findings: Programmes on recycling and minimizing waste as well as by products generation had been established. Recycling bins, proper management of schedules wastes and bio-gas POME methane recovery plant had been installed and being commissioned during this surveillance. Recycling bins were visible in the estates as well as the land fill sites.

Indicator 8.1.4

Pollution prevention plans (5.6) Major compliance

Audit Findings: The Bio-gas POME methane recovery plant that had been commissioned in Seramas 1 could be installed in this mill if it proved to function well.

Indicator 8.1.5

Social impacts (C6.1) Major compliance

Audit Findings: A major improvement was the construction of a new labour line for the workers. Each unit of the labour line had been equipped with electricity and treated water supply. This had reduced the E. coli count in the supplied water. Proper sanitation facilities had also been provided. All the workers interviewed expressed happiness over the availability of these new facilities. Other improvements in the fields include greater awareness of workers on 3R‟s initiatives (i.e. reduce, reuse, recycle) as part of their work culture. Recycle bins had been placed at appropriate sites including at the sorting area at the landfill sites.

Indicator 8.1.6

A mechanism to capture the performance and expenditure in social and environmental aspects. Minor compliance Guidance

Specific minimum performance thresholds for key indicators should be established. (See also Criterion 4.2, 4.3, 4.4, and 4.5). Growers should have a system to improve practices in line with new information and techniques and a mechanism for disseminating this information and throughout the workforce.


Audit Findings: A mechanism to capture the performance and expenditure had been well established. It was not limited to social and environmental aspects but being extended to occupational safety and health matters. Among the big improvements made was the provision of a changing room for sprayers to ensure no contamination to their family and the changing of the system of carrying the spraying chemical in jerry cans to tanker. 5. ASSESSMENT RECOMMENDATION Based on the evidences gathered during the on-site inspection, the assessment team had raised one major NCR on the S2 CU against the requirements of the RSPO MYNI. The S2 CU had taken the appropriate corrective actions to address the major nonconformity. The assessment team had verified and was satisfied with the corrective actions taken by the CU and had subsequently closed out this major NCR. In addition the assessment team had raised seventeen (17) opportunities for improvement (see Attachment 4) which the CU should improve upon in complying with the requirements of the RSPO MYNI. The corrective actions taken by the CU to address these opportunities for improvement would be verified during the surveillance assessment. As the major NCR had been satisfactorily closed out, the assessment team therefore recommends that Saremas 2 Certification Unit be continued to be certified against the RSPO MYNI. 6. ORGANIZATION’S ACKNOWLEDGEMENT OF INTERNAL RESPONSIBILITY AND FORMAL SIGN-OFF OF ASSESSMENT FINDINGS I, the undersigned, representing SIRIM QAS International Sdn. Bhd., acknowledge and confirm the content of the assessment report and findings of assessment. Name: Dr. Yap Son Kheong

Signature: Designation: Assessment Team Leader Date: 30 March 2012 CERTIFIED ORGANIZATION’S ACKNOWLEDGEMENT OF INTERNAL RESPONSIBILITY AND FORMAL SIGN-OFF OF ASSESSMENT FINDINGS I, the undersigned, representing Saremas 2 Certification Unit acknowledge and confirm the content of the assessment report and findings of assessment. Name : Simon Siburat Signature : Date :

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Attachment 1 Location Map of S 2 Certification Unit

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Attachment 2

SIRIM QAS INTERNATIONAL SDN. BHD.

1. Objectives The objectives of the assessment are as follows:

(i) To evaluate PPB Oil Palms Berhad (PPBOPB) conformance against the RSPO Principles & Criteria Malaysian National Interpretation (MYNI)

(ii) To make appropriate recommendations based on the assessment findings

2. Date of assessment : 20 June to 24 June 2011 3. Site of assessment : PPB Oil Palm Berhad

Saremas Certification Unit Saremas 1 Palm Oil Mill Saremas 2 Palm Oil Mill Saremas 1 Estate Saremas 2 Estate Suai Division Kaminsky Plantation Sdn. Berhad Segamas Plantation Sdn. Berhad

4. Reference Standard : RSPO P&C MYNI

Company‟s audit criteria including Company‟s Manual/Procedures

5 Assessment Team a. Lead Assessor : Dr. Yap S. K. b. Assessor : Professor Datuk Abdul Rashid Abdullah

Raymond Yap Nyoke Yong Mahzan Munap

Akim Kaji

If there is any objection to the proposed audit team, the organization is required to inform the Lead Auditor/RSPO Section Manager.

RSPO MAIN ASSESSMENT PLAN

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6. Audit Method Site audits including observation of practices, interviews with interested parties (employees, nearby population, etc.) documentation evaluation and evaluation of records.

7. Confidentiality Requirements SIRIM QAS International shall not disclose any information concerning the company regarding all matters arising or coming to its attention

with the conduct of the programme, which is of confidential in nature other than information, which is in the public domain. In the event that there be any legal requirements for disclosing any information concerning the organization, SIRIM QAS International shall inform the organization of the information to be disclosed.

8. Working Language : English and Bahasa Malaysia 9. Reporting a) Language : English b) Format : Verbal and written c) Expected date of issue : Thirty days after the date of assessment d) Distribution list : client file 10. Facilities Required

a. Room for discussion b. Relevant document and record c. Personnel protective equipment if required d. Photocopy facilities e. A guide for each assessor

11. Assessment Programme Details : As below


Day 0: 19 June 2012

Time Activities / areas to be visited

4.45 pm Travel from Kuala Lumpur to Miri


Day one: 20 June 2011 Monday

Time Activities / areas to be visited Auditee

6.30 am-10.00 am 10.15 am-11.30 am 11.30 am -12.30 pm

Travel to Saremas 1 Estate Opening Meeting by team leader; Audit team introduction and briefing on surveillance assessment objectives, scope, methodology, criteria and programmes by audit team leader at Saremas 1 estate office

Briefing on the organization background and implementation of RSPO (including actions taken to address assessment findings of Stage II audit)

Management Representative

Dr. Yap S. K. Raymond Prof. Datuk Abdul Rashid

Akim Mahzan

Documentation review at Saremas 1 Estate (including verification on action taken to address Stage 2 assessment findings)

Documentation review at Saremas 1 Palm Oil Mill (including verification on action taken to address Stage 2 assessment findings)

Guide for each assessor

12.30 pm-1.30 pm

Break

1.30 pm -5.30 pm

Inspection of Saremas 1 Estate On environmentally area of concern:

Area of more than 25o

Inspection of protected sites with HCV attributes

Boundary and land use of the different estates

Riparian zone

River system including POME discharge

Forested area

Inspection of Saremas 1 Estate

Good Agricultural Practice- witness activities at site (weeding/ spraying/other maintenance activities/ harvesting)

Nursery (if any)

chemical store/fertilizer

EFB mulching

Plantation on hilly/swampy area

Saremas 1 Estate and Oil Mill. Discussion with relevant management on staff welfare Visit and assessment at: • Saremas 1 longhouses

i.e.Rumah Bunsu, Rumah Gundi and Rumah Tapu.

Inspection of Saremas 1 Oil Mill

Safety & Health practice – witness mill activities such as operation, boiler, water treatment & workshop

Chemical management

Interview with workers & safety committee

Interview with FFB suppliers and other contractors


Plantation boundary

Water bodies

Source of water supply

general waste disposal area

Other area identified during the assessment

IPM


8.30 pm– 10.30 pm

Assessment team discussion and verification on any outstanding issues Note : Assessor to inform auditee on the required document / records

Day two: 21 June 2011 (Tuesday)

Time Activities / areas to be visited

Dr. Yap S. K.

Raymond Prof. Datuk Abdul Rashid

Akim Mahzan Auditee

7.00 am- - 12.00 pm

Site visit and assessment at Saremas 2 Estate On environmentally area of concern:

Area of more than 25o



Riparian zone

River system including POME discharge

Forested area

Plantation boundary

Water bodies



Other area identified during

Site visit and assessment at Saremas 2 Estate:

Good Agricultural Practice- witness activities at site (weeding/ spraying/other maintenance activities/ harvesting)

Nursery (if any)


EFB mulching


IPM


Site visit at Saremas 2 Estate and Saremas 2 Oil Mill. Discussion with relevant management (CSR, community affairs) and preliminary viewing of documentation relating to local community and indigenous peoples issues such as EIA, SIA, assessment and management plans.

Interview with workers & Union representatives

Facilities at workplace (rest area, etc)

Living quarters

Facilities provided at living quarters (i.e.

Site visit at Saremas 2 Palm Oil Mill:

Safety & Health practice – witness mill activities such as operation, boiler, water treatment & workshop

Chemical management

Interview with workers & safety committee

Interview with FFB suppliers and other contractors



Day three: 22 June 2011 (Wednesday)


Dr. Yap S. K.


Mahzan Akim

7.00 – 12.00 pm

Site visit and assessment at Suai Division: On environmentally area of concern:

Area of more than 25

o


Site visit and assessment at Suai Division: • Witness activities & assessment at site i.e. harvesting, spraying, manuring & EFB Mulching gangs. • In field-Mechanization • workshop • general waste

Site visit at Suai Division: - Discussion with relevant management (CSR, community affairs) and preliminary viewing of documentation relating to local community and indigenous peoples issues such as EIA, SIA, assessment and management plans.

Site visit and assessment at Suai Division: :

Safety & health practice – witness activities at site

Facilities at workplace (water treatment

Site visit at Suai Division:

Production area

Effluent treatment plant

Boiler house

Waste management

Site visit at Sri

Guide for each

assessor

the assessment

humana, surau, community center, provision shop & etc)


12.00 pm-1.00pm

Break All

1.00 pm-5.30 pm

Assessment on P1, P2 (C2.1- 2.1.1, C2.2-2.2.3, P3, P4( C4.4- 4.4.1, 4.4.2, 4.4.6) C5.1, C5.2, C5.3, P8

C2.1, C2.2, C3.1, C4.1, C4.2. C4.3, C4.4, C4.5, C4.7, C4.8, C5.1, C5.3, C5.5, C5.6, P8

Continue visits and assessment at: Saremas 1 longhouses i.e. Rumah Merudi and Rumah Sabang

P1 (C1.1-1.2), C2.1. C4.1, C4.6, C4.7, C4.8,

Assessment on P1, P2-C2.1- 2.1.1, C4.7, P6 (6.5, 6.6, 6


8.30 pm – 10.30 pm




Riparian zone

River system

Forested area

Plantation boundary



disposal area • EFB mulching • Harvesting on hilly/swampy

Area

store/fertilizer

EFB mulching


Interview with workers & Union Representative

Facilities at workplace (rest area, etc)

Living quarters Facilities provided at living quarters (i.e. humana, surau, community center, provision shop & etc)


plant, clinic & etc)

Chemical store/fertilizer

Workshop


Kamusan estate

Waste management including disposal site

Recycling activities

Diesel generator set (if any)


12.00 – 1.00 pm

Break

1.00 pm-5.30pm

P2 (I2.2.3), C4.1, C4.4, C4.8, C5.1, C5.2, C5.3, P8

C2.1, C2.2, C3.1, C4.1, C4.2. C4.3, C4.4, C4.5, C4.8, C5.1, C5.3, C5.5, C5.6, P8

P1, P2, P6, C8.1 P1 (C1.1-1.2), C2.1. C4.1, C4.6, C4.7, C4.8,P8

C2.1, C3.1, C4.1, C4.4, C4.6. C4.7, C4.8, C5.1, C5.3, C5.4, C.5.5, C5.6

Guide for each

assessor

8.30 pm -10.30 pm



Day four: 23 June 2011 (Thursday)


Dr. Yap S. K.


Mahzan Akim

7.00 am -12.00 pm

assessment at Segarmas Estate and Keminsky on environmentally area of concern:

Area of more than 25

o



Riparian zone

River system

Forested area

Plantation boundary


Site visit and assessment at Segarmas Estate and Keminsky Estate

Good Agricultural Practice- witness activities at site (weeding/

spraying/other maintenance activities/ harvesting)

Nursery (if any)


EFB mulching


IPM

Visits & assessment at:

● Suai division longhouses

i.e. Rumah

Rimbu and Rumah

Ringkai

Site visit and assessment at Segarmas Estate and Keminsky Estate

Safety & health practice – witness activities at site

Facilities at workplace (water treatment plant, clinic & etc)

Chemical store/fertilizer

Workshop

Site visit at Segarmas Estate and Keminsky Estate

Waste management

Recycling activities

generator set (if any)

Interview with contractors and contract workers



Guide for each

assessor

12.00 – 1.00 pm

Break

1.00 pm-5.30pm

P2 (I2.2.3), C4.1, C4.4, C4.8, C5.1, C5.2, C5.3, P8

C2.1, C2.2, C3.1, C4.1, C4.2. C4.3, C4.4, C4.5, C4.8, C5.1, C5.3, C5.5, C5.6, P8

P1, P2, P6, P8 P1 (C1.1-1.2), C2.1. C4.1, C4.6, C4.7, C4.8, P8

C2.1, C3.1, C4.1, C4.4, C4.6. C4.7, C4.8, C5.1, C5.3, C5.4, C.5.5, C5.6

Guide for each

assessor

8.30 pm -10.30 pm



Day five: 24 June 2011 (Friday)


Dr. Yap S.K. Raymond Prof. Datuk Abdul Rashid

Mahzan Akim

7.00-10.00 am

Verification on outstanding issues for Seramas Certification Unit

Assessor to inform auditee on the required document / records

Guide for each

assessor

10.00-12.00pm

Audit Team Discussion and preparation on assessment findings

12.00 pm – 2.00 pm

Break & Friday Prayer All

2.00 pm-3.30 pm

Discussion and acceptance on assessment findings All

3.30 pm-4.30 pm

Closing meeting at Seramas 1 Estate Office – presentation of assessment findings

All

4.30 pm End of assessment & Travel to Miri


Attachment 3

Non –Conformity Reports Raised During the Previous Stage 2 Audit and Corrective Actions Taken

P & C Indicator

Specification Major/Minor

Detail of Non-Conformities Corrective Action Verification by Assessor

Criterion 2.1

Indicator 2.1.1.

Major Assessment of records and input from stakeholders revealed that Saremas 1 Palm Oil Mill had been discharging effluent with levels of BOD and SS exceeding the limit specified by the authority on several occasions.

To have a meeting with the DoE Miri (a) Interim measure:

- To install surface aerators at the facultative ponds

(b) Long-term measures: - Ponds desludging

- Construct new additional ponds

- installing tertiary plant to treat the effluent prior to the final discharge

Other corrective action plan with a permanent solution aimed at preventing recurrence of the issue as listed in attachment 4c of a letter to the DoE.

Series of discussions and correspondences with DoE Miri and DoE Kuching were held to get agreements and approvals on the following: (a) Installation of 11+ 2 surface aerators and mixers. This

corrective action was completed on 30th September

2009. (b) Desludging at pond 4 of Saremas 1 Palm Oil Mill.

This corrective action was completed on 28th August

2009. Schedule for desludging in the next five years for the

mill was made available and had been submitted to the DoE.

(c) Providing additional ponds to the existing system in

order to prolong the retention time. The longer retention time will assist in degradation and result in lower BOD and SS levels. Five additional ponds were under construction. As of October 2009, the completed ponds were being filled up and there was no discharge to the waterways. It was expected that would be no discharge to waterways until February 2010.


The mills do not have adequate competent Person-In-Charge as required by Factories and Machineries Act 1967. 1. 1

st Grade steam engineer

2. Engine driver with steam boiler certificate for each shift

3. Electrical chargeman for each shift

(a) The current personnel have the relevant experiences. Their competences would be confirmed by requiring them to undergo the DOSH competency assessment.

Mill Managers and engine

drivers have submitted applications to DOSH for the forthcoming DOSH competency assessment.

As part of the succession

plan, mill engineers had also submitted applications to DOSH to sit for the forth coming steam engineer examination.

(b) To advertise in the local

newspaper for the positions of mill managers with 1

st

Grade Steam Engineer, Engine Driver and Electrical Chargeman.

Mill

Job Category

No. Required

Status

Saremas 1 Palm Oil Mill

Ist Grade Steam Engineer

1 A manager has been transferred from other operating unit since 23

rd April

2009.

Vacancies were advertised for Mill Manager with 1

st grade

steam engineer certificate.

Two interview sessions have been conducted with nine shortlisted candidates.

An offer letter has been extended to one of the candidates as of 8

th

September 2009.

Summary of corrective actions taken for items (a) and (b) as of 27 September 2009:

Engine driver 2

nd

Grade steam

1 One of the five candidates sent for


boiler certificate.

Engine driver 2

nd grade

steam boiler certificate assessment by DOSH has qualified for the position since 17

th August

2009.

Vacancies were advertised and interview sessions have been conducted on 19 March and 4

th

September 2009.

Electrical Chargeman

1 Vacancies were advertised and interview sessions have been conducted on 19 March and 4

th

September 2009.

Currently, a visiting electrical chargeman


has been appointed.

Status of Non-Conformity: Closed-out

Criterion 6.1

Indicator 6.1.1

Major SSB has not conducted SIA on its decision to dig trenches between them and the smallholdings at Saremas 1 Div. E

Conduct SIA and provide recommended action plans to: (1) improved communication

and engagement (2) ensure that access roads

are well maintained and both parties adhere to the agreed decision

(3) review communication and consultation as well as complaint and grievance procedures.

(4) train staff and create awareness among stakeholder on the procedures.

SIA had been conducted on 10-15 November 2009 with the participation of the affected parties. Action plans were also recommended. However, the effectiveness of the recommended action plan and its monitoring would be further verified in the next surveillance Status of Non-Conformity: Closed Out

Criterion 6.2

Indicator 6.2.3

Minor SSB needs to review the criteria for identifying stakeholders. There was evidence that SSB has not identified stakeholders that would be affected by their decision i.e. to dig trenches between them and smallholdings bordering S1.

(1) Revisit stakeholder identification criteria and management guidelines.

(2) Conduct SIA (where

applicable) on newly identified stakeholders

SSB had established a guideline on identifying stakeholder. This guideline has been communicated to the relevant person-in-charge. Status of Non-Conformity: Closed Out


Criterion 6.10

Indicator 6.10.2

Minor The mill had not made publicly available the current FFB prices

To display FFB current prices at the mill‟s notice board.

Verification through photograph showed that the current FFB price was displayed on the notice board of the mill. Status of Non-Conformity: Closed Out


Attachment 4

The Details on the NCR (including corrective actions taken) and OFIs Raised During this Surveillance Audit NCR:

P & C Indicator

Specification Major/Minor

Detail of Non-Conformities Corrective Actions Verification by Assessor

Criterion 2.1

Indicator 2.1.1.

Major The complete set of monitoring reports for 2009 and 2010 was examined. It was found that a boiler PMD 11295 with a heating surface area of 11,730 square feet and three (3) Gensets (2x400KVA and 1x300KVA) had been operated by a non-competent person against the requirements of the Factory and Machinery Act 1967 (Person-In-Charge) Regulations 1970. It was also found that the electrical installation had not been regularly inspected as required by the Regulation 66(2) of the Sarawak Government Electricity Ordinance, the Electricity Rules, 1999.

Due to general industry shortage of Boiler Chargeman and Internal Combustion Engine Drivers, Mill had sent its staff as candidates to MPOA training and registered them for Boiler 1

st

Grade Engine Driver and Internal Combustion Engine Driver examination with DOSH. Monthly electrical Inspection had been carried out effective August 2011.

Currently, one 1st Grade Steam Engine Driver attending

boiler operations but not enough to cover every shift. Effort to hire more competent person had been made. Newspaper advertisement placed in July 2011. No suitable candidate hired/found. DOSH Sarawak office had been informed of same. Appointment Agreement between PBB and Visiting Electrical Engineer for monthly inspection was made on 5/8/2011 was sighted. Saremas 2 has submitted a plan on corrective action to address this major NCR through a letter dated 26 January 2012. The assessor was satisfied with the corrective action and clarification given by Saremas 2 and therefore has decided to close out this Major NCR.


OFIs:

Indicator Detail of OFI

2.1.2

There is a compliance with all applicable local and rectified international laws and regulations The organization has obtained written approvals pertaining to all pollution prevention equipments from the relevant authority each with specified applicable conditions. Through the assessment, it was noted that some applicable conditions specified were not registered in the legal and other requirements register (All Sites). The mechanism in conducting applicable laws and regulations compliance exercise could be further improved in ensuring the results are accurately recorded.

4.1.1

Operating procedures are appropriately documented and consistently implemented and monitored The present documented Standard Operating Procedures could be enhanced by (a) establishing a documented Standard Operating Procedure for the Methane Recovery Plant and Tertiary Effluent Treatment Plant (SPOM 1 & 2 – MRP operation since August 2010, while TETP in January 2011) (b) adding to the existing Standard Operating Procedure for Boiler and ETP operation mitigation mechanism during abnormal situation such as dark-smoke emission and the final discharge exceeding the limitation (c) having an alternative mechanism on recording the dark-smoke emission from the boiler during the malfunction of the smoke density meter (SPOM 1) and (d) ensuring that SPOM 1 determine its compliance on the water discharge from the monsoon drain.

4.3.2

Avoid or minimize bare or exposed soil within estates A structured program for EFB application could be implemented throughout the field in all estate. „Vertiver‟ grass had been planted to control erosion and land slide of steep slope. This could also be enhanced further by encouraging growth of „Nepholepis‟ fern through sequential usage of herbicides

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 Systematic monitoring of water and air qualities had been maintained by the estates and mills. This process would be more beneficial if the data obtained could be reviewed and followed by appropriate mitigation actions.

4.6.2

Pesticides selected for use are those officially registered To enhance the use of pesticides, second generation rat baits would have to be avoided. Stock of „Matikus‟ purchased in 1992 has to be disposed off as it had exceeded its shelve life. If needed only Warfarin base baits are to be used.


4.7.1

An occupational health and safety plan is documented, effectively communicated and implemented. 1. The OSH objective set could be improved to include compliance to legal requirements so that it is reflective of the Wilmar‟s commitment as

stated clearly in the OSH policy and conforming with the RSPO Principles & Criteria. 2. Although First Aid Kits are made available at office and in the field, the content of the First Aid Box could be standardized throughout PPB

Sarawak operations so that it is in accordance to DOSH First Aid Guidelines, 2nd

Ed. Some First Aid Kit were found without Triangular Bandage, Splint, Insect Bite Cream,

3. SPOM2 to consider conducting a night Emergency Response Drill including likely-to-happen credible scenario (for instance fire plus fainted

victim, etc) not just personnel evacuation drill.

4. The practice for issuance of PPE (examples mask, gloves, apron, goggle) especially on frequency to be standardized as some Divisions

within Suai estate issued them more regularly than others, i.e. some monthly and others quarterly or as when damaged.

5. PPB to consider the issuance of Personal Protective Clothing and appliance including foot-wear in accordance to FMA (Safety, Health and

Welfare) Regulations 1970.

4.8.1

A training programme (appropriate to the scale of the organization) that include regular assessment of training needs and documentation, including records of training for employees are kept Appropriate training programmes had established and conducted in all the estates and mills. These were documented for each staff that had undergone training. This process could be further improved with a process of review of the efficiency of the training conducted.

5.1.1

Documented aspects and impacts risk assessment that is periodically reviewed and updated The aspects and impacts risk assessment was periodically reviewed and updated. However, the evaluation exercise on some activities to determine its significance level could be further enhanced

5.2.1

Identification and assessment of HCV habitats and protected areas within landholdings and their assessments of HCV habitats and attempt assessments of HCV habitats and protected areas surrounding landholdings The HCVF scoping assessment of the estates had been completed in July 2008 with HCV 4 and HCV 6 sites identified. This report could be improved with addition of new HCV 6 sites that had been located (burial site in Suai Estate). Status of the mud pool and salt licks would be appropriately amended instead of the present status of HCV4.


5.2.2

Management plan for HCV habitats (including ERTs) and their conservation Management practices could enhanced through a monitoring procedure that focus on the core attributes of the HCV sites. Severely degraded areas within the protected areas could be rehabilitated with suitable vegetation cover to encourage fauna movement. Prevention of poaching could be improved with posters of ERT species widely displayed within each estate

5.3.2

Having identified wastes and pollutants, an operation plan shall be developed and implemented to avoid or reduce pollution The mechanism on the notification of new types of scheduled wastes generated could be enhanced with records appropriately maintained in all sites. The management would have to follow up and determine that the final disposals of its scheduled wastes are at the approved facility for treatment, disposal or recovery (All Sites). The segregation of domestic waste could be further enhanced at the source rather than at the landfill area (Suai Division).

6.3.1

Documentation of the process by which a disputes was resolved and the outcome The Grievance and Complaint Form had been actively utilized. It would be better to differentiate “request” from genuine grievances and complaints as the record showing many “requests” may give an impression of many grievances and complaints within the estates.

6.4.1

Establishment of procedure for identifying legal and customary rights and a procedure for identifying people entitled to compensation The procedure could be improved with the standardization of names of committee, and update changes (in documents) as alterations are made in the established procedures.