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Roundtable on Sustainable Palm Oil

Certification Audit Report no.: 824 502 16043

Certification Assessment against the

RSPO Principles & Criteria Generic 2013 and

RSPO Supply Chain Certification System Nov 2014

PT Perkebunan Nusantara III

Torgamba Palm Oil Mill and Supply Based

Jln. Sei Batang hari No. 2 Medan, 20122 North Sumatera, Indonesia

Date of assessment : May 31 – June 06, 2015

Report prepared by :

Mhd Fundy C Kurniawan (RSPO Lead Auditor)

Certification Decision by : Dian Soesanty Soeminta

(General Manager of Sustainaibility Assurance)

Certification Body : PT TUV Rheinland Indonesia.

Menara Karya Building 10th floor Jl. H.R. Rasuna Said Block X-5 Kav.1-2,

Jakarta, Indonesia. 12950 Tel: +62 21 579 44 579 Fax: +62 21 579 44 579

www.tuv.com

TABLE OF CONTENTS

TABLE OF CONTENTS 2

1.1 National Interpretation / Standard Used 3

1.2 Type of Assessment 3

1.3 Certification Details 3

1.4 Location and Maps 3

Figure 1: Location of Torgamba Palm Oil Mill and 1 company-owned estates within its supply base 4

Figure 2: Torgamba Map Estate 5

1.5 Organisational Information / Contact Person 5

1.6 Description of Supply Base 5

1.7 Actual production volumes and project outputs. 6

1.8 Dates of Plantings and Replanting Cycles 6

1.9 Area of Plantation (Total, Planted and Mature) 7

1.10 Progress against Time Bound Plan 7

1.11 Audit against the rules for Partial Certification 8

1.12 Progress of associated smallholders or outgrowers towards RSPO compliance 9

1.13 Approximate Tonnages Certified of Torgamba Palm Oil Mill 9

The approximate tonnages certified, based on projection year 2016 for company owned estates only (refer to the table above as follows: 9

1.14 Recommendation for RSPO Principles and Criteria and Supply Chain Certification 9

2.0 ASSESSMENT PROCESS 10

2.1 Certification Body 10

2.2 Qualifications of Lead Assessor and Assessment Team 10

2.3 Assessment Methodology & Agenda 11

3.0 ASSESSMENT FINDINGS 14

3.1 Summary of Findings pertaining to RSPO Principles & Criteria 14

3.2 Identified Non-conformances against RSPO P&C Requirements, Corrective Actions Taken and Auditors Conclusions 38

3.3 Description of Supply Chain Management System 42

3.4 Identified Non-conformances against RSPO SCCS Requirements, Corrective Actions Taken and Auditors Conclusions 44

3.5 Noteworthy Positive Components 45

3.6 Issues Raised during Stakeholder Consultation Meeting 45

4.0 CERTIFIED ORGANISATION’S ACKNOWLEDGEMENT OF INT ERNAL RESPONSIBILITY 50

4.1 Acknowledgements of Internal Responsibility and Formal Sign-Off by Client 50

APPENDICES 51

Appendix 1: Details of Certificate 51

Appendix 2: List of Abbreviations 53

Appendix 3: List of Stakeholders Interviewed and Contacted 53

Appendix 4: Attendend list of stakeholder consultation meeting 54

Appendix 5: Observations and Opportunities for Improvement 57

RSPO Certification Assessment PT Perkebunan Nusantara III – Torgamba Palm Oil Mil l

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1.1 National Interpretation / Standard Used

The operations of the palm oil mill(s) and its supply base of FFB were assessed against RSPO Principle and Criteria Generic year 2013 and the RSPO Supply Chain Certification Systems (SCCS) document (November 2014).

1.2 Type of Assessment

The certification assessment audit carried out on 1 (one) mill and 1 (one) company estates to this mill, i.e.: Torgamba Palm Oil Mill and Torgamba Estate, owned by PT Perkebunan Nusantara III (PT PN III). The date of certification of this unit was May 31 until June 06, 2015.

The scope of the Supply Chain Certification System assessment covers the implementation of the Mass Bal-ance supply chain model of Torgamba Palm Oil Mill.

1.3 Certification Details

The details of RSPO certification of Torgamba Palm Oil Mill are as per the table below Table 1: RSPO Certification details of Torgamba Pal m Oil Mill

RSPO Membership No. : 1 -0030-06-000-00 (since 14- 12-2006)

Child numbers of each certification unit : -

RSPO Certificate no. : 824 502 16043

Date of first RSPO certification & validity : September 07, 2016 to September 06, 2021

Date of certification audit : May 31 to June 06, 2016

Date of previous surveillance audit : This is certification assessment

CPO tonnages claimed*) : 35,565.80 tonnes

PK tonnages claimed*) : 6,762.40 tonnes

Note*): based on budget FFB projection for 2016 document for 1 estate under supply base.

1.4 Location and Maps

Table 2: GPS locations for all estates and mills in cluded in annual surveillance assessment

Name of Mill / Estate Location

GPS locations

Latitude Longtitude

Torgamba Mill Torgamba village, Torgamba subdistrict, Labuhan Batu Selatan District

01o42’53.6’’ 100o17’28.0’’

Torgamba Estate Torgamba village, Torgamba subdistrict, Labuhan Batu Selatan District

01o42’46.0’’ 100o16’45.0’’


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Figure 1: Location of Torgamba Palm Oil Mill and 1 company-owned estates within its supply base

Assessment location in

Labuhan Batu Selatan District


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Figure 2: Torgamba Map Estate

1.5 Organisational Information / Contact Person

Contacts details of the company presented below:

Company Name PT Perkebunan Nusantara III (Torgamba Palm Oil Mill)

Address Jln. Sei Batang hari No. 2 Medan, North Sumatra Province – Indonesia

Contact Person Tio Handoko, ST, MM

Telephone +62 61-8452244/+62 81 264 575 552

Email [email protected]/ [email protected]

1.6 Description of Supply Base

Torgamba Palm Oil Mill (POM) is one of several palm oil mills owned by PT Perkebunan Nusantara 3, and is located in Torgamba village, Torgamba subdistrcit, Labuhan Batu Selatan District, North Sumatra Province. Currently, Torgamba POM receives FFB supplies from 1 company-owned estates i.e.: Torgamba estate. Torgamba Palm Oil Mill also receives FFB supplies from other’s company owned estate i.e.: Sei Daun Estate, Sei Meranti Estate and Bukit Tujuh Estate. The FFB supplies received from company-owned estates and other’s company estate are as described be-low:


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Table 3: FFB Supply Information for Torgamba Palm O il Mill year 2015 and 2016 (Projection)

FFB Contributors FFB Supplied 2015 FFB Supplied 2016*

Tonnes % Tonnes % Certified source Mill supply based: Torgamba Estate 142,939.700 64.97 158,000.000 56.49 Sub Total 142,939.700 64.97 158,000.000 56.49 Non Certified source Others Non Certified estate under PT PN III Sei Daun Estate 9,667.910 4.39 49,687.500 17.76 Sei Meranti Estate 2,481.430 1.12 - - Bukit Tujuh Estate 4,497.950 2.04 - - Sub Total 16,647.290 7.57 49,687.500 17.76 Independent outgrower 60,421.290 27.46 72,000.000 25.74 Total 220,008.280 100 279,687.500 100

Note: *) Projection production for 2016

1.7 Actual production volumes and project outputs. This is certification assessment, the PT PN III did not sold any RSPO certified product (CPO and PK), as viewed from the table below.

Table 4: Total and projected CPO and PK production from Torgamba Palm Oil Mill

Remarks Amount

CPO (mt) PK (mt) Certified tonnage claimed *) 35,565.80 6,762.40 Total product tonnage sold claimed under RSPO e-Trace - - Certified tonnage sold claimed under Green palm - - Certified tonnage purchased - - Actual Production for 2015 Actual OER and KER for 2015 21.70 4.05 Total production for 2015 47,741.79 8,910.33 Total Certified production for 2015 **) 31,017.91 5,789.05 Projection Production for 2016 (mt) OER and KER projection for 2016 22.51 4.28 Total FFB process (certified and uncertified) 279,687.50 Total FFB certified 158,000.00 CPO certified 35,565.80 PK certified 6,762.40 CPO total (certified and uncertified) 62,957.65 PK total (certified and uncertified) 11,970.62

Note: *) certified tonnage claime based on budget production in 2016 **) total certified and uncertified production from mill supply based only in 2015

1.8 Dates of Plantings and Replanting Cycles

The company follows a replanting cycle of 25 years. Information on the dates of plantings are as per the ta-ble below.

Table 5: Age and year of plantings of company estat es supplying to Torgamba Palm Oil Mill Period year 2015

Age & Year of

Plantings

Oil palm planted area at each estate(ha) Torgamba Estate

YoP 2003 12.90 YoP 2005 646.82


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YoP 2006 1,188.15 YoP 2007 1,060.30 YoP 2009 1,706.95 YoP 2010 1,250.40 YoP 2011 216.10 YoP 2015 11.75 TOTAL 6,093.37

Note: based on hectarage statement 2015

Table 6: Planned and actual oil palm replanting act ivities for company-owned estates supplying to Torgamba Palm Oil Mill

Age & Year of

Plantings

Total planned replanting area

for estate

Actual total area

replanted (ha) Torgamba Estate

2014 - - 2015 11.75 11.75 2016 - - 2017 - -

Note: planted in 2015 came from replanting, not new planting.

1.9 Area of Plantation (Total, Planted and Mature) Table 7: Oil Palm Planted Area Summary, FFB Product ion and Average yield/ha for PTPN III company owned estates

Estate Name Total area

(ha)

Oil Palm Planted area

(ha)

Mature (Production)

area (ha)

Immature (Non-production)

area (ha)

FFB Production

(ton)*

Average yield/ ha (ton/ha)

Torgamba estate 6,386.26 6,093.37 6,081.62 11.75 142,939.70 23.50 TOTAL 6,386.26 6,093.37 6,081.62 11.75 142,939.70 23.50

Note: based production record in 2015 Table 8: Land use data for PT PN III Company’s owne d estates

Estate Name Total area (ha)

Rubber Planted Area (ha)

Oil Palm Planted Area (ha)

HCV/ Potential HCV areas* (ha)

Land used for other purposes (ha)

Housing, Road,other infrastruc-

ture **)

Nursery Cleared Area

Other Land ***)

Torgamba 6,386.26 - 6,093.37 39.93 253.71 - - 39.14 TOTAL 6,386.26 - 6,093.37 39.93 253.71 - - 39.14

Note: *) HCV include in oil palm planted **) consist of emplacement/housing, palm oil mill, roads. ***) electricity line area and low land area. 1.10 Progress against Time Bound Plan

The company has revised their time bound plan for RSPO certification of other management units as per the schedule below. The plan was revised as the company was awaiting RSPO certification of Sei Mangke mill and its supply base and is applying experience gained from the first certification to prepare other manage-ment units for certification. Table 9: Time Bound Plan of the Other Management Un its

Name of Holding Location Time bound plan for certification

Progress in 2015


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PKSMK Sei Mangke / Simalungun August 2010 Certified

PRBTN Tebing Tinggi December 2014 On process

PSSIL Sei Silau / Asahan December 2014 On process

PANAS Aek Nabara / L. Batu June 2014 Certified

PSSUT Sisumut / L. Batu November 2014 Certified

PSBAR Sei Baruhur/ L. Batu November 2014 Certified

PPARO Aek Raso/ L. Batu July 2014 Certified

PTORA Torgamba/ L. Batu December 2015 On process

PATOR Aek Torop/ L. Batu June 2014 Certified

PSDAN Sei Daun/ L. Batu December 2015 Certified

PSMTI Sei Meranti/ L. Batu December 2015 On process

PHPSG Batangtoru / Tapanuli

Selatan November 2016 Planned

1.11 Audit against the rules for Partial Certificat ion

Compliance of the PT PN III against the rules for partial certification according to RSPO certification system year 2013 Generic, clause 4.2.4 was assessed through document checks and interviews and the head office and through findings of concurrent ISO : 9001 checks conducted at other management units of PTPN III. A summary of findings is as stated below.

Partial Certification Requirements Audit Findings

1.a The organisation is an RSPO member.

Yes, PTPN III is an RSPO member with ID No. 1-0030-06-000-00 (membership since December 14, 2006). RSPO Cer-tification system section 4.2.4. PTPN III has beent provide result of the self-assessment for all units entering estate and mill at the time bound.

1.b A time-bound plan for achieving certification of all relevant entities;

PTPN III has a time-bound plan to achieve RSPO certification for all relevant entities. However, one of the company’s de-velopment areas (Muara Upu site) located at South Tapanuli is still not included by the time-bound plan. NPP assessment for this area was carried out by Certification Body (Sucofindo) in 2012 years.

1.c. i. There are no significant land con-flicts.

There are some land conflicts/ potential land conflicts ongo-ing in other PTPN III’s management units, such as Silau Dunia, and Si Sumut Estates. While the company has al-ready made a conflict resolution mechanism, these conflicts remain unresolved as the mechanism is still not agreed by the land claimants.

1.c. ii. No replacement of primary forest or any area containing HCV since November 2005.

PTPN III’s development of a new planting area (Muara Upu at South Tapanuli) had been raised before as a major non-compliance by TUV Rheinland audit team, which is now closed as the company has carried out applying NPP in ac-cordance with this clause and the progress under reviewing of Compensation Task Force. Based on communication with PT PN III. The company still waiting for Head of District deci-sion response, for land exchanged process since the land was included on peat moratorium area according to President of Republic Indonesia decree letter no. 6 year 2013.

1c. iii. No labour dispute that are not be-ing resolved through an agreed process.

No labour issues were found during this certification audit.

1c.iv. No evidence of non-compliance with law in any of the non-certified holdings.

Some of PTPN III’s other management units have not com-plied with certain legal requirements. For example, in Silau Dunia Estate under another PTPN III management unit, an issue has been found with the area stated under the Right of Cultivation certificate (HGU). However, the company is taking


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Partial Certification Requirements Audit Findings action by inviting National Land Agency (BPN) to re-measure the land and resolve the issue. The process is still ongoing. Some legal non compliance found, it has been reported on surveillance audit report for each PTPN 3 unit.

1.12 Progress of associated smallholders or outgrow ers towards RSPO compliance

There is no scheme and or associated smallholder in Torgamba Palm Oil Mill its supply based estate. The requirement is not applied for this certification management unit.

1.13 Approximate Tonnages Certified of Torgamba Pal m Oil Mill

The approximate tonnages certified, based on projection year 2016 for company owned estates only (refer to the table above as follows: Crude Palm Oil (CPO) : 35,565.80 tonnes Palm Kernel (PK) : 6,762.40 tonnes

1.14 Recommendation for RSPO Principles and Criteri a and Supply Chain Certification

Torgamba Palm Oil Mill and supply based has established and maintains an effective system to ensure compliance with the RSPO Principles and Criteria. The audit team has confirmed through the audit process that company practices complies with adequately maintains and implements the requirements of RSPO principles and criteria Generic 2013 and Supply Chain Certification System requirements (dated November 2014).

TUV Rheinland Indoneisa recommends that Torgamba Palm Oil Mill to be approved to get certification of compliance RSPO Certified Sustainable Palm Oil.


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2.0 ASSESSMENT PROCESS

2.1 Certification Body

TUV Rheinland Indonesia is member of Group TÜV Rheinland Group, a global leader in independent testing and assessment services. The TÜV Rheinland Group was established in 1872 with offices located in over 360 locations in 62 countries on all five continents. TUV Rheinland Indonesia offers certification for a wide range of management systems according to established international standards including ISO 9001, ISO 14001, OHSAS 18001, SA 8000, as well as CDM Project Validations and Verifications. TUV Rheinland Indonesia’s office is located in Jakarta, Indonesia.

2.2 Qualifications of Lead Assessor and Assessment Team The assessment team members of this certification assessment audit that were part of the same assess-ment team for the certification audit are as per the table below:

Name Position Qualifications / Experience

Mhd Fundy C Kurniawan

Lead auditor

Education: Master Degree in Natural Reseource and Environmental Management, Bogor Agriculture University Trainings attended: Environmental Impact Assessment (EIA), Ecologi-cal Risk Assessment (ERA), Internal Quality Audit Training for Quality Management System, IRQA-QMS ISO 9001:2000, IRQA-EMS 14001, High Conservation Value (HCV), RSPO Lead Auditor Course, ISPO Audi-tor Course, SCCS Auditor and ISCC plantation audit. Working experience: Experienced in Environmental Impact Assessment (EIA Assessment), Environmental Health Safety Senior Officer (EHS-Senior Officer) in Wilmar International Plantation, Internal Auditor for Wilmar International Plantation, Auditor for Rountable on Sustainable Palm Oil (RSPO), Indonesian Sustainable Palm Oil (ISPO), Timber Le-gality Verification Certification (SVLK) in PT TUV Rheinland Indonesia since June 2012 – present.

Wahyu Auditor

Education: Master Degree of Management of Manufacturing Engineer-ing, Faculty of Engineering, University of Pancasila; Degree of Mechani-cal Engineering, University of Indonesia Training attended: RSPO Lead Auditor Course, Pro-Forest & Daemeter, Calculation of Green House Gas at Palm Oil Plantation, Komisi ISPO, ISPO Lead Auditor Course, Komisi ISPO, Verified Legal Compliance & Reduced Impact Logging Auditor Training, by Tropical Forest Founda-tion, SVLK Auditor Training, Ministry of Forestry, CoC Auditor – LEI, ISO 9001:2008, IRCA Approved Course, ISO 14001:2004, IRCA Approved Course Working experience: PT Carsurin, as QHSE Coordinator (2006 -2009), PT Mutu Hijau Indonesia, Jakarta as Technical Manager (2010-May 2014) and Auditor PT TUV Rheinland Indonesia (May 2014-present)

Dahlan Nasution

Auditor

Education: Bachelor of Technic of Industrial – University of Sumatera Utara. Trainings attended: IRCA 9001:2000 (QMS) Lead Auditor Course, IRCA ISO 14001:2000 (EMS) Lead Auditor Course, ISPO Lead Auditor Training, Awareness and documentation ISO 22000-HACCP, Food Safe-ty Expert Training. Working experience: Quality assurance in PT Charoen Pokphand Indo-nesia Tbk, Quality Section Head in PT Central Proteina Prima Tbk, Audi-tor in PT TUV Rheinland Indonesia

Harso Yuli Antena

Auditor Education: Bachelor of Agriculture (social and economic of agriculture) – Bogor Agriculture University.


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Trainings attended: ISO 9001:2008 Lead Auditor training – TUV Rhein-land Indonesia, Sustainable Forest Management training – Forest educa-tion and training center, ISPO training - Commission of ISPO. Working experience: Social research – Indonesian Centre for Agricul-tural (Social Economic and Policy Studies) since 2003-2007, Social Re-searcher – CSR Indonesia since 2007-2010, Social Economic Expert – Mott MacDonald Indonesia since 2010-2011, Personal consultant in re-search and development – Colors Media Group since 2011-2013, RSPO & ISPO auditor at TUV Rheinland Indonesia since 2013 -2016.

2.3 Assessment Methodology & Agenda The certification audit assessment combined with supply chain certification assessment was conducted from May 31 – June 06, 2015 as per the assessment program below. Public consultation of Torgamba POM and supply based carried out together with Meranti POM and supply based, in the same day (June 1, 2015), but carried out by separated team, while first auditor team in Torgamba and second auditor team in Meranti. Torgamba Public consultation also carried out together with Sei Daun POM and supply based, because they have similar stakeholders, community and village. The assessment was carried out in accordance with TUV Rheinland Indonesia RSPO audit procedure as well as the RSPO Certification Systems document and RSPO Supply Chain Certification Systems document. During assessment, the qualified TUV Rheinland assessors used the RSPO standard as endorsed for the country in which the assessment took place and recorded their findings. Due to the location and proximity of the estates, combined with common management systems, it was pos-sible to carry out both field and document assessments of all estates and the mill within the time frame with-out compromising the integrity of the assessment in anyway. One estate and one mill were visited and the assessment team carried out field and document assessments of compliance to all the RSPO principles and criteria. Common systems were identified and specific evi-dence was recorded for individual estates. Interviews were conducted at all estates and the mill. The company proposed the correction and corrective action for all identified non conformities raised to the certification body 30 days after the closing meeting. Document checks to verify closure of major non-conformances was conducted and implementation of corrective actions for minor non-conformities will be verified during the next surveillance audit. The certifications assessment agenda is as explained below.

Certification Assessment Agenda Date/Time Activity Auditor Auditee Standard

Monday, June 01, 2015

08.00 – 09.00 Meeting room

Opening meeting in Sei Daun Meeting room

All auditor

Management repre-sentative and related manager of Sei Daun, Sei Silau, Torgamba and Sei Meranti

09.30 – 12.00 Public consultation DN,

WHY

Related stakeholders already invitation and union workers

Torgamba Auditorium Hall

Thursday, June 04, 2015

08.00 – 12.00 Torgamba

Mill

Document verification and field assess-ment related:

- Code of ethical conduct - Law and regulation compliance - Legal land use rights - Long term economic - HCV - Emission, pollution and greenhouse

gases identification - RSPO SCCS Modul E

MK Management Repre-sentative and related PIC of Torgmba Mill

Principle 1 Criteria 1.3 Principle 2 Criteria 2.1; 2.2; 2.3 Principle 3 Criteria 3.1; 3.2 Principle 5 Criteria 5.2; 5.6 SCCS Module E


- Law and regulation compliance - OHS - Training and implementation - Environmental management

WHY Management Repre-sentative and related PIC of Torgmba Mill

Principle 2 Criteria 2.1 Principle 4 Criteria 4.7; 4.8 Principle 5 Criteria 5.1; 5.3; 5.4


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- Waste management - Energy used an efficiency - Continuous improvement


- Law and regulation compliance - Procedure implementation and

evaluation - Water management - Zero burning activity

DN Management Repre-sentative and related PIC of Torgmba Mill

Principle 2 Criteria 2.1 Principle 4 Criteria 4.1; 4.4 Principle 5 Criteria 5.5


- Transparency - Law and regulation compliance - Land dispute - Stakeholder communication and

consultation - SIA - Wrokers welfare and community - Continuos improvement

HYA Management Repre-sentative and related PIC of Torgmba Mill

Principle 1 Criteria 1.1; 1.2 Principle 2 Criteria 2.1; 2.3 Principle 6 Criteria 6.1; 6.2; 6.5; 6.6; 6.7; 6.8; 6.9, 6.10, 6.11; 6.12; 6.13

12.00 – 13.30 Break and pray All Auditor

13.40 – 17.30 Continue audit agenda All

Auditor

Management Repre-sentative and related PIC of Torgmba Mill

Friday, June 05, 2016

08.00 – 12.00 Torgamba

Estate


- Code of ethical conduct - Long term economic - Legal land use rights - Fertilizer implementation - Erosion management - HCV - Emission, pollution and green-

house gases identification - New planting if any since Nov

2005 - Continue improvement

MK

Management Repre-sentative and related PIC of Torgmba Es-tate

Prisip 1 Kriteri 1.3 Principle 3 Criteria 3.1; 3.2 Principle 4 Criteria 4.2; 4.3 Principle 5 Criteria 5.2; 5.6 Principle 7 Criteria 7.2; 7.3; 7.8 Principle 8


- Law and regulation compliance - OHS - Environmental management - Zero burning activity - Waste management - Training implementation - Energy used and efficiency - Continue improvement

WHY


Principle 2 Criteria 2.1 Principle 4 Criteria 4.7; 4.8 Principle 5 Criteria 5.1; 5.3; 5.4 Principle 8


- Law and regulation compliance - Procedure implementation and

evaluation - Water management - Integrated pest management - Pesticide used and record - New planting since Nov 2005 - Continue improvement

DN


Principle 2 Criteria 2.1 Principle 4 Criteria 4.1; 4.4; 4.5 dan 4.6 Principle 7 Criteria 7.4 ; 7.7 Principle 8


- Transparency - Law and regulation compliance - Land dispute - Stakeholder communication and

consultation

HYA


Principle 1 Criteria 1.1; 1.2 Principle 2 Criteria 2.1; 2.3 Principle 6 Criteria 6.1; 6.2; 6.5; 6.6; 6.7; 6.8; 6.9, 6.10, 6.11; 6.12; 6.13


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- SIA - Wrokers welfare and community - New planting since Nov 2005 - Continuos improvement

Criteria 7.1; 7.5; 7.6 Principle 8

12.00 – 13.30 Break and pray All

Auditor

13.40 – 17.30 Continue audit agenda All

Auditor


Saturday June 06, 2016

09.00 – 12.00 Closing meeting for Sei Daun, Torgamba and Sei Meranti POM and supply based

All Auditor

Management Repre-sentative and related PIC of Sei Daun, Tor-gamba and Sei Me-ranti

Sei Daun Meeting Room.

2.4 Stakeholder Consultation and Stakeholders Conta cted

The stakeholder consultation involved both external and internal stakeholders. External stakeholders were no-tified to make comments on the certification assessment by placing an invitation to comment on the RSPO website. Stakeholders included those immediately linked with the operation of the company such employees, outgrowers, the local government, NGO’s, trade and labour unions and local communities. Stakeholder con-sultation took place in the form of meetings and interviews. Meetings with stakeholders were held to seek their views on the performance of the company with respect to the sustainability practices outlined in the RSPO Principles & Criteria, and to comment on aspects where improvements could be made. Meetings with local communities were held at their respective premises within and near the company’s area. A stakeholder con-sultation meeting was also held in Torgamba Palm Oil Mill meeting room on June 01, 2015. Letters inviting individual stakeholders to the stakeholder consultation meeting were prepared and sent to the individual stakeholders, while electronic mail and telephone calls were made to arrange the meetings. In all the interviews and meeting, the objectives of the RSPO and the purpose of the assessment was clarified at the outset followed by an evaluation of the relationship between the stakeholders and the company before discussion proceeded to obtain the stakeholders feedback on the company’s compliance to different aspects of the RSPO Principles & Criteria. Although several stakeholders were not familiar with RSPO but they agreed with its objective and expressed their willingness to collaborate in the promotion of sustainable palm oil in North Sumatera province. In all interviews and meeting, the assessment team did not restrict discussion of both the positive and negative aspects of operations conducted by Torgamba Palm Oil mill and its supply es-tates. The stakeholder consultation meeting held with stakeholders during the audit was extensive and productive, with an attendance of 54 attendees. This was followed by site inspections, including visits to the local com-munities, interviews with land claimants and contractors, and inspections of worker amenities and infrastruc-ture. All stakeholder issues raised were recorded and forwarded to the management for their written re-sponsed and this is summarised in Section 3.4.The list of stakeholders that attended the stakeholder consul-tation meeting and stakeholders interviewed during the assessment is included as Appendix 4.

2.5 Date of Next Surveillance Visit The next surveillance visit will planned in June 2017.


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3.0 ASSESSMENT FINDINGS

3.1 Summary of Findings pertaining to RSPO Principl es & Criteria The following is a summary of findings made for the criteria listed in the RSPO Principles & Criteria Generic 2013 and RSPO Supply Chain Certification System November 2014. During the certification assessment, 7 non-conformities were assigned against Major Compliance indicators while 5 non conformities was assigned against a Minor Compliance Indicator. Further explanation of the non-conformities raised and corrective actions taken by the company are provided in Section 3.2 & 3.3. The ob-servations & opportunities for improvement are listed in Appendix 5.

Criterion 1.1: Oil palm growers and millers provide adequate information to other stakeholders on en-vironmental, social and legal issues relevant to RS PO Criteria, in appropriate languages & forms to al -low for effective participation in decision making.

Findings: Procedure of communication has documented as an SOP no. PK-3.00-03, published in September 23rd 2014. This procedure has refer to code of conduct and Archiving Guidance. There are two forms has developed to implemented the system such as: a. Form No. FM 3.00-03/01 for “Records of Communication Result with stakeholders in district level”. b. Form No. FM 3.00-03/02 for “Records of Communication Result with stakeholders in Director Office lev-

el”. This document has clearly stated procedural steps for communications with stakeholder and consultation for stakeholders. Communication process divide into three levels. Consultation process could be conducted in formal and informal meetings, workshop, gathering etc. Estate and Mill has develop maintain a list of stakeholders. All related and strategic stakeholders from gov-ernment, civil society, NGO, academic parties and press has been identified and listed. Contact persons, of-ficial address and phone number has also recorded in the list. There are some communication records has showed during audit, such as finding as follow: a. Incoming and Out-Coming Logbook 2015. There were 47 letters has registered on incoming logbook and

has been responded. Most of them were letters regarding request for donations and supports. b. Examples of Incoming letters with response letters, such as: A letter from Head of village, March 12th

2015 requesting Meeting Room availability. This letter has responded by manager by a letter on May 18th 2015.

c. Recapitulation of letters acceptance signed by stakeholder acceptors, 2015 (such as cover letters for re-ports submission to local governance).

d. Vital Archived/Documented records list of Administration Division of Torgamba Plantation. This lists has consist information regarding codes, types, work unit, retention time, number of plies, protection methods and locations.

Compliance status: Full Compliance

Criterion 1.2: Management documents are publicly av ailable, except where this is prevented by com-mercial confidentiality or where disclosure of info rmation would result in negative environmental or social outcomes.

Findings: There is Directors Circular Letter No. 3.00 / SE / 01 / 2015 dated 8 April 2015 concerning data which can and can not be published. The data can be published as many as 28 types including: company profile, annual report, financial statements, certificates of land, land rights, environmental documents (EIA/RKL/RPL), occupational safety and health programs, policy management systems, reports employment, the document ef-fluent use permit, permit storage of hazardous materials and toxic waste, the production of the report, the program of sustaianability, human rights policy, social impact assessment documents, high conservation value, continuous improvement program documentation, reduction and pollution prevention plan, the process of conflict resolution / management complaints from the public consultation and the data certification assessment report, etc. That letters has been distributed and communicate to most of worker and staffs. Evidences showed during audit were:


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a. Documentation of Policy Socialization in division IV, May 9th 2015. This record has attached with 5 plies of attendant list from 5 locations, consist of permanent and un-permanent worker.

b. Documentation of Policy Socialization in division III, May 9th 2015. This record has attached with 5 plies of attendant list from 5 locations, consist of permanent and un-permanent worker.


Criterion 1.3: Growers and miller commit to ethical conduct in all business operations and transac-tions.

Findings: The management unit has a code of conduct III edition authorized by the Board of Commissioners and Board of Directors. The code of conduct that is created as a guideline which is a standard of behavior for all individ-uals in the move both inside and outside the company. Document consists of goals and objectives, the bene-fits of code of conduct, values, business ethics and commitment to stakeholders, the basic attitude of the in-dividual, the behavior of individuals inside and outside the company, the behavior of a superior, behavior as a subordinate, behavior towards fellow colleagues, commitments on specific issues such as liability salvage companies, trade transactions as a result of insider information, conflicts of interest, political activities, dona-tions, commissions, kickbacks, gratuities control, handling whistleblowing, management and administration of property report kekayaraan State administrators. Enforcement of the code of conduct such as monitoring the implementation of the code of conduct, reporting pelaggaran code of conduct, sanctions for violations of the code of conduct. Mill and estate has communicate the code of ethical conduct to all workers level and third party/outsource, ev-idenced by:

1. For third party, minutes of meeting to all third party on May 8, 2015 and May 11, 2015, attended by 9 representative of company also attendant list and photograph meeting activity.

2. Workers, statement of compliance, attendant list and photograph of code of ethical conduct socializa-tion to all workers in estate and mill, carried out on March 2015. All of workers has sign the statement of compliance.


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

Findings: The company mill and estate has record of legal requirement compliance, example:

1. Head of Labuhan Batu Selatan district decree number 227/2012 about land application for Torgamba palm oil mill, located in division IV, valid since from the issued on October 16, 2012.

2. Plantation business permit (SPUP) number 350/771/Dj.Bn.5/XI/2001 issued by Directorate General Estate Crop Production with explanation: - Land use rights number 44/HGU/DA/80 dated on July 9, 1980 - Land use rights validity until December 30, 2010 - Land use rights area 25,593.74 Ha - Commodity for palm oil plantation - Complete with palm oil mill facilities with production capacity about 60 tonne FFB/hours, total POM

about 3 unit. Legal requirement compliance related workers also fulfill by company, through the implementation their com-mitment regarding minimum wage payment for permanent worker. Relevant regulations such as Governor Decree of minimum wage has been followed up by company and implemented to all worker. There are evi-dences such as copy of relevant company regulations and pay-slips such as: a. Governor Decree, No. 188.44/1120/KPTS/Tahun 2014 regarding Minimum Wage Appointment of

Labuhan Batu Selatan District, 2015. The second decree stated that minimum wage for 2015 is IDR 1.870.000,00. This number consist items such as basic wage and fix allowances (allowance that not change because of worker attendance).

b. Company Regulation: - Director Decree No. 3.08/SKPTS/R/08/2015 regarding Worker Wage Improvement, Januari 12th

2015: a) Minimum payment comply to province minimum wage payment; b) based on Collective La-


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bor Agreement 2014-2015 article 31, the minimum wage payment must adjusted to improvement of North Sumatera Province Minimum Wage.

- Attached to this decree letter a lists of Basic Wage and fix allowance 2015. c. Pay Slip for worker level IA/0 (3 person)

- Basic wage stated IDR 1.218.750 - Fix allowance IDR 406.250; Rice Allowance IDR 143.250; social Allowance IDR 179.156 - Minimum payment of Labuhan Batu Selatan based on Governor decree of District Minimum Wage

Payment was IDR 1.870.000. Based on the pay-slips of lowest level permanent, PT PN III has com-ply to this regulations.

During this audit found that pieces rate un-permanent worker (partner) has been paid lower than minimum payment as determinate by governor decree. This finding will be present in P&C 6.5.1 in this r eport. The implementation of workers right regarding overtime has complies to regulations. Company has stated their commitment regarding overtime in PKB (article 19), procedures and working instruction. Overtime divide into 3 categories: regular day, weekly rest day, and official feast and religious day. Some form has been pre-pared and implemented as part of management system. Filled form known as “Surat Perintah kerja Lembur” (appointment Letter for overtime) has showed during audit. This form has refer to company’s working proce-dure no. 3.04-12 regarding Wage Payment, allowance (include overtime), and worker Social Allowance. Pay-slips mentions detail information regarding paid overtime income for workers. Company also showed their procedure and evidences regarding extra-food for extra overtime (Working Instruction number PK-3.09-08). PT PN III has commitment to employ only 18 years above, this commitment has documented in Collective Working Agreement (PKB) and Working Instruction No. PK-3.08-01. Point 7.1.a.1, regarding “implementer worker recruitment”, sub chapter a.2.1. mentions statement regarding worker recruitment requirements, such as: a. Minimum Educations background is certified basic school or relevant and the highest is certified senior

high school or relevant. b. Minimum age is 18 to 30 years old. c. Selection conducted by the company. This commitment and policy implemented to all estates and mills, for internal and external worker that working in PN III operational areas. Worker records of Torgamba Mill and Estates. Company’s commitment regarding worker right to work leave days has documented in Collective labor Agreement, Chapter VI regarding “Worker Release from Duty to Work”. This chapter consist of: a. Article 21, off day/Holyday and weekly rest. b. Article 22, official off day c. Article 24, annual work leave day d. Article 25, long work leave day e. Article 26, Give birth work leave day f. Article 27, monthly period work leave day g. Article 28, permit for paid work leave day h. Article 29, work leave day out of company’s responsibility

But, during the field assessment to spraying activity, found some sprayer in field number X23 Division VI, in 2014 not carried out the medical check. This is nonconformity (NCR 2015 – 01 of 12 ). There is system that record every change in the terms of either internal or based on government regulations. The company provides a mechanism for evaluation of implementation and compliance to applicable legal re-quirements in a standard operation procedure i.e. PK-3.11-01, rev 0, dated 25 February 2014. There are also procedures which define the mechanism of evaluation of compliance to regulations related to the company's plantation, legislation related to the environment, legislation relating to labour, and regulations related to health and safety. The SOP states that the identification and evaluation is to be carried out 4 (four) times a year and conducted by the each section, and estate and will be compiled by Legal officer and supported by the Head of Operations / field and other departments within the company organisation. Most estate maintains and updates their list of all applicable legal requirements relating to environmental, occupational safety and health, the company plantations, and employment as well as records of internal compliance checks to legal requirements. The company maintains a list of all applicable legal requirements relating to environmental, occupational safe-ty and health, the company plantations, and employment as well as records of internal compliance checks to legal requirements as they are summarize in the FM-3.11-01/02. List of applicable legal, regulation and other requirements was recorded in the FM-3.11-01/01 and FM-3.11-01/03 The summary of law and regulation compliances for year 2014. As all the estate still have submitted to the head of Mill and Estates. Compliance status: Non Compliance


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NCR 2015 – 01 of 12 During field assessment, found chemical workers in field number X23 Division VI did not include in medical test 2014.

Criterion 2.2: The right to use the land can be dem onstrated, and is not legitimately contested by loc al communities with demonstrable rights.

Findings: The company has record of legal land use rights (HGU) of Torgamba estate number SK.44/HGU/DA/80. The legal land use rights during the certification assessment was not valid, the validity only until 2010. To follow up this condition, the company has submit letter number 3.09/X/459/2009 dated on April 30, 2009 about the land use rights extension request about 25,593.74 Ha, this is was extension from legal land use rights certificate number No.02/Aek Batu, registered on behalf PT PN III, located in Sei Sikambing. This area consist of several member of PT PN III estate. But for this certification assessment only Torgamba estate and Torgamba palm oil mill include in audit scope, while Torgamba estate about 6,386.26 Ha. During the audit, the company (Torgamba estate) couldn’t showed the legal land use rights valid record, be-cause still in process, the company made the legal land use rights mapping process in for all PT PN III legal land use rights process. Legal land use rights process still not clear, because the some area of Torgamba estate location located in Forest Area based on Ministry Decree number SK 44/Menhut-II/2005 dated on February 16, 2005 about 14,382 Ha from the total legal land use rights (HGU). This HGU process will allowed to continue if the compa-ny has received reference letter from Forestry Ministry will explain that the company concession area exclude from forest production area and revised from forest production area into other land uses (APL). The company has record of effort to resolve this problem through letter submission to the Forest Ministry and/or related Official government, i.e.:

1. Letter number 3.11/X/30A/2014 dated September 22, 2014. This letter addrassed to Head of Region-al Forestry Official Government of North Sumatra. This letter mentioned about follow up process re-lated Torgamba concession area include in forest area accordance to the decree letter number SK.579/Menhut-II/2014.

2. Letter number 3.11/X/104/2014 dated October 31, 2014. This letter addrassed to Head of Regional Forestry Official Government of North Sumatra. This letter mentioned the company request to the Forestry Ministry to issue the statement that the PT PN III concession area in Torgamba estate was exclude from forest area, because the land use rights process couldn’t continue if the Torgamba con-cession area still include in forest area.

3. Letter number 3.11/X/30A/2015 dated February 27, 2015. This letter addrassed to Head of Regional Forestry Official Government of North Sumatra. This letter mentioned about follow up land use rights process.

But, until certification assessment, the company couldn’t ensure very clear that the Torgamba concession ar-ea was exclude from forest area. This is nonconformity (NCR 2015 – 02 of 12 ). The land use rights records based on hectarage statement 2015, showed the land used consist of:

- Planted area about 6,098.37 Ha - Emplacement about 150.61 Ha - Palm oil mill facility about 17.64 Ha - Road about 85.46 Ha - Other land use (swamp, lowland, drainage border) about 21.41 Ha - Total area planted + other land used was about 6,386.26 Ha.

Torgamba estate has plan for boundary pillar maintenance for 2015 for division I, III and VIII example. The boundary pillars maintenance carry out every six month (June and December). The maintenance activity con-sist of clearing area, ensure the boundary pillars available in place or not, repainting if needed, and others. Based on boundary pillars record maintenance in 2014, found 39 boundary pillars in place with good condition and accessible. Compliance status: Non Compliance NCR 2015 – 02 of 12 Torgamba estate based on decree letter number SK.44/Menhut-II/2005 dated on February 16, couldn’t showed that the concession area not include in forest area.


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Criterion 2.3: Use of land for oil palm does not di minish the legal rights, or customary rights, of ot her users, without their free, prior and informed conse nt.

Findings: There is no land disputes in Torgamba estates and mill operation areas. Company hold a mechanism regard-ing conflict resolutions that documented into some procedure such Procedure no. PK-3.11-12 regarding Con-flict Resolutions with working instruction No. IK 3-11-12. This procedure has refer to national regulations such as Law No. 5 year 1960, Law no. 18 year 2014 regarding Plantation and Law of HGU (land title). Basic procedural steps that must comply during conflict resolutions are:

a. Risk Identifications b. Problem mitigations Collective calculations (company and affected parties) regarding the values of compensations

- The loss of affected parties - Company’s ability - Expectation values - Value’s appropriateness - Inputs from stakeholders

c. Documentation d. Legal Actions e. The rights (of affected parties) to choose representatives parties. f. Respects to Judge decree

PT PN III Torgamba has develop and show two Maps. The first map is a result of Focus Group Discussion with Manunggal Village community member and leader. The second Map is a working Map of Torgamba es-tates. There’s no land disputes/conflict information on these two maps. Public consultation result during audit confirmed that there was no land conflict among PN III Torgamba with surrounded community. There’s no agreement regarding land conflict resolution has issued. Compliance status: Full Compliance

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

Findings: Mill and estate has document record of financial long term economic (budget plan) for 4 years from 2015 until 2018. This document showed the FFB incoming projection from owned estate and third party. Also was showed about CPO, PK, oil extraction and kernel extraction rate projection until 2018. FFB pricing projection, production cost, maintenance cost, harvesting, spraying, fertilizing activity also include in this document. Only replanting plan not include because the YoP of this area still in productive categorized and young mature, while the oldest planted was in 2003. Compliance status: Full Compliance

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

Findings: Mill and estate already complete the procedure and work instruction for their activity. The procedure and work instruction contained from land clearing activity, replanting process, fertilizing, spraying, manual maintenance, harvesting, integrated pest management, high conservation area, FFB transportation process, riparian buffer-zone protection, EFB mulching, land application process, waste water management, waste management, chemical waste handling management, incoming FFB receiving in weighbridge, loading ramp area, process in sterilizer, kernel station, engine room, nut plan, warehouse, storage tank, product quality standards, supply chain mechanism, monitoring and measuring of waste water quality and others until dispatch process. Procedure and Work Instruction has been well documented digitally but not all levels of employees can access the document. The mechanism for the implementation of the above procedure, attached with an assistant function performance that works to supervise the activities that in the mill and in the estate. There is an assistant of Processing (2nd Shift), Assistant Lab (1), Assistant maintenance, and provided some work


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instructions contained in the respective sections). Available records for mill activity: � Dailly production report � Production Daily MCC Torgamba by origin supplier � Recording weighbridge: Proof weighbridge (fruit), fruit delivery letter, CPO weigh evidence, weigh

evidence (kernel), permit entry / exit, Surat pengangtar (goods / products) � Loading ramp: TB external grading (sorting) � Note of clarification stations (each shift) � Note of Pressing Station (every shift) � Note Activity Boiler � The use of solar Reports � Note stations Threshing � Note kernel Station � Note Activities Water Treatment � Note stations Sterilizer � Logsheet Feed back process (Lab) � Letters of test (report of analysis) - wastewater: BOD, COD, pH, fat oil, Lead, Copper and Cadmium � Report of the application of wastewater to land application � Daily reports Process and Quality Control Plant Oil � Analysis of the quality of palm oil Monitoring records are made including the information of: � Analysis of CPO and PKO � Report the results of laboratory analysis � Calibration weighbridge done by outsiders. Compliance status: Full Compliance

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

Findings: Torgamba estate has record for fertilizer application. Example, in semester I year 2015, for division II, with fer-tilizer type was dolomite, was plan about 130,354 kg, and the fertilizer application was meet with the plan, with dosage per application about 1,5 kg/tree. The fertilizer application for example fertilizer type for 2015 in semester I, will presented below:

1. NPK 16-12-21+0.5 TE - Plan for application about 1,344.43 Ha - Realization application about 1,344.43 Ha - Amount of fertilizer application about 583,105 kg - Realization until end of semester I was 100%

2. NPK 16-11-21+0.5 TE - Plan for application about 4,737.19 Ha - Realization application about 2,780.43 Ha - Fertilizer plan for application about 2,780.43 kg - Fertilizer realization application about 1,250.33 kg - Realization until end of semester I was 58.31%

For fertilizer application and dosage application above, the company should carry out the foliar sampling (leaf and soil analysis). Torgamba estate, carried out the foliar sampling analyzed by Indonesian Palm Oil Re-search Institute with the evidence:

1. Leaf analysis certificate number 1430/0.1/Sert/XII/2014 dated on October 6, 2014. Total sample for this analysis was 251 sample from all division in Torgamba estate, with parameter analysis such as N, P, K, Ca, Mg and B

2. Soil analysis certificate number 291/0.1/Sert/III/2014 dated on February 7, 2014. Total sample for this analysis was 26 sample from all sampling point representing all division, while the parameter analy-sis such as sand, dust, clay, H2O, KCl, C, N, C/N ratio, P, K, Ca, Mg, JKB, KTK, KB and Al-dd).

To increase and maintained soil fertility, estate carried out the EFB and land application in field. Record of EFB application for all division in 2014 available in place. EFB total already application in field by estate was 49,938.02 kg, while the plan only 46,774.75 kg, and until May 2015, EFB application in field was 20,262.75 kg while the plan only 13,692.44 kg. From the record data above, showed that the realization application was


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overfulfil this is because EFB availability in palm oil mill are abundant. Torgamba estate also carried out the land application in field, especially in division II and IV. The land appli-cation record data in May 2015, are:

1. 12,093 m3 has been application in field number T20, U20, V20 2. 11,370 m3 has been application in field number T20, U20, U21, V21 3. 10,206 m3 has been application in field number T20, U20, V20, U21, V21


Criterion 4.3: Practices minimise and control erosi on and degradation of soils.

Findings: Based on HCV assessment document of Torgamba estate, the slope condition are:

- Flat (0 – 8%) about 5,569.13 Ha - Sloping (8 – 15%) about 512.40 Ha - Undulating (15 – 25%) about 199.57 Ha - Steep (25 – 40%) about 85.10 Ha - Hilly (>40%) about 20.06 Ha

To minimize the soil erosion, estate have applied the terrace in sloping area. Based on field assessment in field number T24 division IV with sloping area, also estate have enrichment the cover crop in this area to minimize the erosion also for others sloping area. Estate also has record of road maintenance for each division, example in May 2015:

- Division I, plan about 76,050 m, road maintenance realization 35,850 m - Division II, plan about 68,900 m, road maintenance realization 26,250 m

And based on soil type in EIA and HCV document there is no fragile soil in Torgamba estate. Compliance status: Full Compliance

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

Findings: The organization establish regulation of use water for mill and estate to maintain availability of surface and ground water as reflected in budget and working plan of mill and estate. Torgamba Mill determine 1.5-2.0 m3 water /ton FFB for raw water and 0.7- 0.9 m3 water/ton FFB for boiler operation. Use of water for processing FFB in mill monitored and reported periodically to local government environmental office. Based on environmental monitoring report (RKL/RPL) July-December 201, in Sei. Me-ranti Mill use 270.647 m3 water to process 135.308 Ton FFB. Water use to process FFB in Torgamba Mill also below the limit, for example in Mei 2015 to process 20.815 ton FFB used 36.843 m3 water. Torgamba Estate monitored water surface quality such as BOD and COD level and reported regularly to local environmental office. Based on water analysis record, the parameters was below standard. But, during field assessment, and document verification found the surface water used in division VI field number Y-23, they don’t showed the water analysis result. This nonconformity (NCR 2015 – 03 of 12 ). Compliance status: Non Compliance NCR 2015 – 03 of 12 Record of water analysis from surface water in division VI field number Y-23 couldn’t showed or not available in place.

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

Findings: Torgamba estate has record of IPM program for EWS for 2015. This program covered about EWS implemen-tation for all pests and diseases in field, also program for beneficial plant management and maintain also bio-logical predator such as owl.


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Based on EWS record for February 2015, level attack still below than standard for caterpillar and bagworm. Whereas for rat level attack also still below, this is because the estate has implemented integrated pest man-agement system through the beneficial plant and biological predator. During field observation in division III and V, found the beneficial plant such as Turnera subulata and Antigo-non leptopus, planted in field with good condition. Also owl box available in field. Based on EWS recapitulation from January – May 2015, there is no indication that the level attack was high, and there is no record that the estate use pesticide to control the level attack. Person in charge to carry out the EWS system also has been trained by estate, evidence by attendant list of training and photograph in February 2015. Map of beneficial plant and owl box inventory available in place. Compliance status: Full Compliance

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 t hat are categorised as World Health Organisation Type 1A or 1B, or are listed by the Stockholm or Ro tterdam Conventions, growers are actively seeking to identify alternatives, and this is documented.

Findings: Based on document verification in place, proved that the company particularly the treatment plant has provided recommendation use of pesticides used in the field. There is no found paraquat dichloride used by estate. The use of pesticides is reported in foremen daily reports to explain the use and dosage pestisides and carried out in the estate by the foremen. Dosage use of pesticides refers to Norma Herbicides 2015 established by the company that set the dosage/liter/ha/rotation. The company has made efforts and rare-step reduce the use of chemicals in pest management, such as:

� Planting flowers Tunera subulata � Training IPM (integrated pest management): 6 people are certified and certificates � Spraying depends attack in 2015 there has been no attack.

Efforts to reduce pesticide done by reducing the rotation of the sixth rotation to rotation only 3-4, then the use of biological enemies of pests of plants (plant Tunera subulata), the use of empty fruit bunches to reduce weeds. Based on the search documents note that the Torgamba estate using pesticides to the type of active ingredients as follows: Methyl metsulfuron, Isoprophyl amina glyfosat, deltametrin and others. The use of the active ingredient in compliance with applicable regulations. Based on the explanation of the maintenance worker labour that the plant has the same dosage with the provisions, because of the mixing of pesticides is done in the warehouse of pesticides by certified personnel. The workers apply only on the field in accordance guidance of foreman and assistant. Based on field assessment and document verification of PPE distribution to the CV Nurdin Sejahtera (third party for spraying activity) in division I, whereas the PPE has given to the sprayers not meet with the PPE identification matrix. This is nonconformity . (NCR 2015 – 04 of 12 ). Also, based on sprayers interviewed, not found that the sprayers tools (Solo Kept) was clean and store in chemical house (division office) as a mentioned in company regulation, work instruction number IK-3.01-03/14. This is nonconformity . (NCR 2015 – 05 of 12 ). While Torgamba palm oil mill and estate verification (field and document) also not found that the hazardous waste from palm oil mill has disposed to the authorized collector. This is nonconformity . (NCR 2015 – 06 of 12). Then, based on sprayer workers interviewed and document verification, record of medical test for cholines-terase test not available in place, for sprayer workers employed by CV Rudin Sejahtera in division I. This is nonconformity . (NCR 2015 – 07 of 12 ). Compliance status: Non Compliance NCR 2015 – 04 of 12 The company couldn’t showed evidence that the PPE has been given to sprayers was meet with the PPE identification matrix. NCR 2015 – 05 of 12


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Found based on workers sprayer interviewed, that the sprayer tools (solo kept) cleaned after used and keep in chemical house (division office) as a mentioned in company regulation, work instruction number IK-3.01-03/14. NCR 2015 – 06 of 12 There is no found the records of hazardous waste from estate and mill has been disposed to the authorized collector as a mention in national regulation. NCR 2015 – 07 of 12 Based on sprayer workers interviewed and document verification, record of medical test for cholinesterase test not available in place, for sprayer workers employed by CV Rudin Sejahtera in division I.

Criterion 4.7: An occupational health and safety pl an is documented, effectively communicated and implemented.

Findings: The company has a policy of occupational health and safety (OSH), which was set on March 2, 2015, signed by President Director of PT Perkebunan Nusantara III. The policy is as follows “To be a company of world-class agribusiness with excellent performance and implement best business governance, the Board of Direc-tors and all employees are encouraged to consistently implement Management System PT Perkebunan Nusantara III (SM-PN3) which includes:

1. The fulfillment and increase customer satisfaction and expectations is a necessity to carry out all the activities oriented to the Standard Risk Management System Quality, Environmental and Occupational Health Safety (OSH) and implement the New Paradigm, Values and Corporate Strategy.

2. Improve corporate performance through improved efficiency, effectiveness and remain patient Obedi-ent Principles

3. Development and implementation of competency-based human resource management and perfor-mance

4. Prevention of environmental pollution and aesthetic maintenance 5. Using natural resources effectively and efficiently 6. Compliance and usage PPE for the workers at the workplace safety and health hazards potentially

work (OSH) 7. Fulfilment of regulatory legislation and environmental requirements and safety and occupational

health 8. Business and systems transformation program Management PT PN III.

The company has established Procedures of planning of PT Perkebunan Nusantara III management systems, document Number PK-3.12-02, Rev. 00. Procedures created with the purpose to ensure that all activities re-lated to HSE, planned in setting objectives, targets and programme management. The company has set a target of environmental management system and OSH i.e.,: 1. Comply with laws and regulations relating to the management system OSH which refers to the Govern-

ment Regulation 50/2012 about OHS system implementation. 2. OHS cultural activity in the whole foundation of the job in KSMTI 3. The use of PPE for each employee according to the characteristics of its work There is evidence that the environmental health safety policy has been communicated to all employees in all functions and levels within the company, for example, there are: - Attendant list, date April 1st, 2015, a target Quality/environmental Socialization and OHS - Installation of environmental health safety signs The company set objective of environmental health safety on January 10, 2015, signed by the Chairman of OHS Committee, i.e.,: 1. Giving priority to health and safety by conducting socialization to all employees 2. Optimizing the use of PPE according to the type and level of occupational risk 3. Comply with applicable legislation regulation number 50/2012 by 90%. The company has set a Objectives of OHS, dated January 10th, 2015 and signed by the Chairman of the OHS Committee, i.e.,: 1. The workers shall use PPE in accordance to their respective areas of work 2. Maintain no accidents until December 2015 3. Comply with applicable legislation PP 50 of 2012 up to December 2015 The Company has identified hazards, assess risks and establish controls that cover all activities and opera-


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tions including the scope estate, on January 7, 2015, signed by the Secretary and the Head of the OHS Committee, include: 1. Maintenance of Process plants produce, includes:

- Road maintenance manual/mechanic - Fertilizer activity - Chemical weeding and pest control - DAK / GPP - Harvesting activity - Foliar and soil sampling - Maintenance FFB collecting point - Prunning under electricity line - Liquid waste handling - EFB application in field - Radio operation - IPM monitoring

2. Office activities

The Results of hazard identification, risk assessment and control are documented and updated set a date of January 7, 2015, including the measures taken are intended to address/control the risks that arise. Examples of implementation of the results of hazard identification, among others: - Harvest activities under electric cable lines identified as activities that have a high degree of risk. The

Company has an action as follows: a. Estate manager decree number KTORA/SKPTS/01/2015, March 3rd, 2015, about harvesting activity

in under electricity line. b. Electricity line mapping c. Minutes of meeting of harvesting procedure under electricity, on March 19th, 2015 in division II, field

number O23, evidence was attendant list and photograph. d. Implemented the work permit for high risk worker area, example letter number 2015 dated on March

31, 2015, for harvesting activity under electricity line. Torgamba mill management also has to identify hazards, assess risks and establish controls that cover all ac-tivities and operations, including the scope of the mill, i.e.,: 1. Engine room 2. Processing area 3. Warehouse area 4. Laboratory area The results of the identification of hazards, assess risks and establish control has been documented and up-dated in 2015. This document also includes the measures taken are intended to address / control the risk arising by way of mechanical engineering, administrative, and use appropriate PPE. Examples of program implementation of OHS is Simulation Training Emergency Response Team, on March 30, 2015. The implementation of the simulation is followed by 89 people, as stated in the minutes training date April 1, 2015; Implementation of simulations evaluated for effectiveness as contained in document Eval-uation of Emergency Response Simulation. The Company has trained a safe way to all employees involved in the work that has the potential hazards and provide appropriate personal protective equipment with the potential risks. Some of the evidence relating to, among others:

1. Training Needs Identification Document 2015, adopted in February 2015, has been approved by the Manager Torgamba estate. Training planned, i.e.,: a. Socialization RSPO (Employees and Third Parties) � plan in August followed by 36 employees

and 20 third party. b. First aid training � plan in June 2015 followed by 24 employees c. Emergency Response Training, plan in December 2015, followed by 40 people d. Training Integrated Pest Management (IPM), plan in July 2015, followed by 38 people

2. Materials of Implementation on Job training Chemicals Torgamba estate, dated May 28th, 2014: "Han-dling of Hazardous Substances"; Attendance list (attended by 18 people from all parts of the mainte-nance division)

3. First aid Training, September 29th, 2013, followed by 24 people 4. First aid Training, 20th August 2014, followed by 24 people

Torgamba mill management also has to identify needs for human resources development program in 2015.


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The program includes training of handling B3, first aid, emergency response simulation, handling pressure vessel, flash vessels handling and management. Documentation and a sample implementation of the pro-gram include: - A training program/on job training Torgamba mill in 2015. The training was realized in March 2015

1. Emergency Response Training: followed by 97 people 2. Handling waste B3: followed by 8 people 3. Training parts processing plant operations: followed by 15 people 4. Operational Training plant engineering section: followed by 15 people 5. The operational training lab section and sorting: followed by 15 people

- Report on the Implementation of the Human Resources Development Program, a. Training parts processing plant operations, March 31st, 2015, followed by 17 people b. The operational training lab and sorting, March 31st, 2015, followed by 10 people

- Training of Engineering, March 31st, 2015, followed by 10 people Estate and mill has record of PEE provided to the all workers, such as:

- PPE received for harvesters in division V, with type of PPE was safety shoe and helmet on February 2015

- PPE received for mill workers in processing, engine room and loading ramp, with type of PPE was safety shoe, helmet, ear plug, ear muff and glove.

Torgamba estate has a OHS Committee named (P2K3). This committee was approved by Head of Labour Of-ficial Government of Labuhan Batu District by decree number 35/P2K3/2014, dated October 6, 2014. This committee has carried out periodically meeting every month, with evidenced:

1. Minutes of meeting dated on April 29, 2015. This meeting discussed about implementation and eval-uation of ISO 9001, 14001, RSPO, safety and health, accident, worker welfare and other related OHS. Attendant by 11 person.

2. Minutes of meeting dated on March 13, 2015. This meeting discussed about procurement of PPE for 2015, accident, near miss, safety and health, first aid, OHS brief and others. Attendant by 15 person.

3. Minutes of meeting dated on February 17, 2015. This meeting discussed about implementation and evaluation of OHS system in work field. Attendant by 17 person.

Then, Torgamba mill also has OHS committee. This committee also approved by Head of Labour Official Government of Labuhan Batu District by decree number Kep.31/P2K3/TK/2015 dated on March 19, 2015. This OHS committee also has carried out the periodically meeting every month. Record of periodically meet-ing available in place and with the discussed about safety and health, OHS program, first aid, workers welfare and others. While for emergency condition, estate and mill has provide the emergency response team to handle the emergencies situation. This emergency team was put in emergency organization structure, approved on May 5, 2015. This emergency structure has carried out emergency simulation response every once year, while the latest simulation carried out in August 2014. During the certification assessment this simulation still in pro-gram and will implemented on August 2015. The company has established procedure for emergency response preparedness procedure, with document number PK-3.12-08 Rev 01. Procedure explained that the emergency defined in to fire, explosions, natural disaster, sabotage, chaos, chemical spill. The Company already has competent personnel for ensure the OHS implementation by decree minister of Labour of Indonesia, No. KEP.7104 / M / DJPPK / VI / 2014, dated June 27th, 2014. While for emergencies, the company has formed the Emergency Response Team, which consists of committee, Chairman / Vice Chairman, Chief Executive, Secretary, Assistant General, the Daily Coordinator, Team Commander. Each described their tasks and responsibilities. Emergency Response Team is composed of several teams, namely: Evacuation Team, Security Team, Team refugee, Firefighting Team, medical team, Recovery Team and Emergency Coordinator. Each team has described duties and responsibilities. The Company has socialized emergency response team as evidenced by the list of participants and Docu-mentation Socialization on 18 April 2015, carried out in division III. Socialization was attended by 22 person. As a sign of an emergency, the company has a procedure Alarm / Bell Hazard (SD-10-07; Rev. 0) to support the handling of emergencies, the company has a nurse's, with license Nurses (SIP), No. 0302201001.0139 / III / 2015, dated March 23rd, 2015. To anticipate and improve the ability of personnel in dealing with fire emergencies, the company has con-ducted simulated fire emergency response fields. This is evident from Letter No. K-03 / PAM / III / 2015, dat-ed March 3rd, 2015, of Security Officers Torgamba estate, the committee of the Emergency Response Team, Emergency Response Simulation of Fire Land. Emergency response simulation was conducted on March


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13rd, 2015, in division VI, field number U38. The number of personnel involved 60 people (56 people attend-ed). For first aid, company already conduct the training for workers and foreman, example training on March 20, 2015 in division I – VI, attendant by 24 person. During field assessment, estate provided first aid box for all foreman in field. And all workers in estate and mill has covered by medical insurance with local name (BPJS Ketenagakerjaan). The company has Records of occupational accidents, where one measure used is the time lost due to acci-dents (lost time accident / LTA). Based on the data of occupational accidents in 2014 and 2015 (till May 2015), the amount of LTA is Zero. Compliance status: Full Compliance

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

Findings: The company has identified of training needs which include best practice management of plantations, OHS, environmental, best practice in mill, IM and others. This document has been approved by Torgamba estate manager and mill in February 2015. The training program contain about, such as:

- Training for RSPO - First aid training - Emergency response training - IPM training - OHS socialization - OHS introduction - Risk assessment socialization - Chemical and hazardous waste handling - And others.

For 2014, estate and mill has record of training implementation. All of training record are maintained properly, example training record for division assistant, carried out in July 2014, with training record such as plantation management training, ESQ training, and others. Then, IPM training, and chemical operator training also car-ried out in 2014, with the evidence was attendant list. Compliance status: Full Compliance

Criterion 5.1: Aspects of plantation and mill manag ement, including replanting, that have environmen-tal impacts are identified, and plans to mitigate t he negative impacts and promote the positive ones are made, implemented and monitored, to demonstrate continuous improvement.

Findings: The Company has identified environmental impacts, among others, as contained in the document Results Identification of Environmental Aspects and Impacts Environmental Management System, Torgamba estate, Year 2015. The document was updated on January 10, 2015. Identification of aspects and impact assess-ments conducted on all processes and activities in the estate and the mill. The results of the environmental impact assessment is to determine whether an environmental aspects have a significant impact or not. Based on the results of the environmental impact assessment, if there is an aspect that the assessment re-sults have an important impact, then the program will be created to mitigate or minimize these impacts. Ex-amples of significant impacts were identified Domestic Solid Waste Disposal. Based on the results of the as-sessment, the company management program in order to determine domestic solid waste not significant neg-ative impact on the environment. Programs of domestic waste management, among others: a. Controlling the discharge of solid waste throughout the estate until December 2015 (in accordance with

Government Regulation No. 81 Year 2012) b. Socialization way of reducing the greenhouse effect to support the Act No. 17 of 2004 on Ratification of

Kyoto protocal Kyoto Protocol to the United Nations Frame Work Convention on Climate Change (the Kyoto Protocol on the UN Framework Convention on Climate Change) PPRI No. 61 Year 2011 on Nation-


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al Action Plan for Greenhouse Gas Emissions). During the certification assessment, company not yet schedule for carry out the monitoring of management plan for mitigate the negative impact as a mentioned in management and monitoring plan matrix (RKL-RPL) document. But, the company has schedule for do this. Compliance status: Full Compliance

Criterion 5.2: The status of rare, threatened or en dangered species (ERTs) and high conservation val-ue habitats, if any, that exist in the plantation o r that could be affected by plantation or mill mana ge-ment, shall be identified and their conservation ta ken into account in management plans and opera-tions.

Findings: Based on HCV assessment document carried out by Research Centre for Natural Resources and Biotechnol-ogy - PPSHB (Research and Community Service Institutions), Bogor Agricultural University in 2012, total HCV found in Torgamba concession area was 39.93 Ha, consist of: 1. Natural water stream in field number T16 – Z26 about 13.99 Ha 2. Hilly area about 25.94 Ha. This HCV assessment document was covered all Torgamba concession area, and was assessed by reg-isteres assessors by RSPO (during HCV assessment). Based on HCV assessment, there is no record of RTE species present in Torgamba concession area. The species was identified i.e.:

1. Macaca fasicularis 2. Pronailurus bengalensis 3. Bubalus ibis 4. Elanus caerulus 5. Spizaetus cirrhatus 6. Psittacula longicauda 7. Halcyon smyrnensis 8. Rhipidura javanica 9. Anthreptes malacensis 10. Varanus salvator 11. Naja sumatrana 12. Phyton reticulatus

Even there is no RTE species found in Torgamba concession area, company already communicate to the all of level workers about HCV protection accordance to the RSPO principle and criteria also national regulation through the HCV brief/socialization about prohibited activity in Torgamba concession area i.e.: catching, keeping, hunting, trapping all of species inside estate area. Company also already installed the signboard to remind all about protection for HCV area. This is was install in division III, II, IV, VIII, VI, with total signboard installed about 27 pcs. Estate also has carried out the HCV monitoring based on HCV management plan. Example: 1. Division III, record of HCV monitoring dated on 28/03/2015. 2. Division II, record of HCV monitoring dated on March 2015. 3. Division VI, record of HCV monitoring dated on March 2015. The record showed about HCV boundary condition, flora and fauna condition, enrichment in riparian buffer zone area, water quality, land cover in along of HCV area, disturbance intensity, erosion mitigation. But estate not carried out the monitoring of species abundance in HCV area as a mentioned in HCV management plan. This is nonconformity . (NCR 2015 – 08 of 12 ). Torgamba estate already done carried out the HCV brief to the all level workers, with evidenced: 1. March 12, 2015 in division III, HCV brief was attendant by 49 person 2. May 19, 2015, in division VIII, HCV brief was attendant by 123 person 3. June 24, 2104 in Bagan Manunggal village, HCV brief was attendant by 20 person from community vil-

lage. 4. May 11, 2015 in Torgamba mill, HCV brief was attendant by 31 person All HCV brief above was complete with evidenced attendant list and photograph. Then, the HCV brief ex-plained about how to protect the HCV area, why HCV area should protect, and what activities are prohibited in estate and/or HCV area.


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Compliance status: Non Compliance NCR 2015 – 08 of 12 Torgamba estate has carried out the HCV monitoring and management, but especially for species abundance not carry out by estate. This is required in HCV management plan.

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

Findings: The Company has identified pollution sources through the pollution and emission source identification docu-ment for 2015. On this document already explained about waste type will produced from mill and estate activi-ty, include housing, emplacement, office and other location in the company concession area. For hazardous waste, the company has had a temporary disposal of hazardous wastes and toxic (hazardous store) having a valid license. All hazardous waste are stored at the polling station before being handled re-trieved by authorized third parties who have permission to manage hazarodus waste. Meanwhile, the compa-ny has established cooperation with PT Putra Sejati Tunas, which already securing license - The company has had a temporary hazardous waste storage permit is still valid - The company cooperates with Third Parties in the hazardous waste management, namely PT Putra Sejati

Tunas. Such third parties already securing license The Company has a management plan and waste disposal to avoid environmental pollution is regulated in the Monitoring Procedure and Transport hazarodus waste, document number PK-03.03-19, Rev.00. While for domestic waste (organic and anorganic) also already handled by company, through the no burning activity, should sperated the organic and anorganic waste. Based on field observation in housing area, waste handling are good enough handled by workers, the company already provide garbage basket and the domes-tic waste final handled in the company through the land fill in company area. Compliance status: Full Compliance

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

Findings: The Company has plans to improve the efficient use of fossil fuels (BBM) while increasing the use of renewa-ble fuels (in this case the use of the former shell and fiber). The plan is documented in the document: - Fuel Usage Reduction Program 2015. - Monitoring the efficiency of fossil fuel use monthly. The company has been monitoring the use of fossil fuels throughout the year 2015 (till April), during this peri-od the company at the stage of monitoring to know the trend of fuel consumption. The Company has not been able to determine the next steps to improve the efficiency of fossil fuel use. Torgamba palm oil mill has record renewable energy used from shell and fiber. Total shell already used in Torgamba mill in 2014 about 12,472,163 kg and fiber about 23,652,103 kg. All of shell and fiber produced by mill, a hundred percent used by mill. Compliance status: Full Compliance

Criterion 5.5: Use of fire for preparing land or re planting is avoided, except in specific situations as identified in the ASEAN guidelines or other regiona l best practice.

Findings: The company has establish zero burning policy as stated in the company’s Work Instruction No. IK-3.01-14.01 on Land Preparation for Planting that fire is not to be used during replanting. Based on visual observa-tion in Torgamba estate there is no found evidence of use fire for waste disposal and there is no replanting activity during the audit. Compliance status: Full Compliance


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

Findings: Torgamba estate has identified the pollution, emission and greenhouse gases source, with the activity such as: 1. Chemical activity 2. Road maintenance 3. EFB application 4. Land application 5. Fertilizing activity 6. Transportation, and others While in Mill the emission pollution was from: 1. FFB incoming activity 2. Boiler activity 3. Process activity 4. POME installation 5. Genset and engine room. From the identification has been done by estate and mill, they should identified the significant pollutant and emission then make mitigation program to reduce and minimize, but mill and estate they didn’t. This is non-conformity . (NCR 2015 – 9 of 12 ). Mill and Torgamba estate has carried out the GHG calculation with used the GHG Calculator and still not approved by RSPO. This is nonconformity. (NCR 2015 – 10 of 12 ). To en-sure which one from all activity in mill and estate has a big contribute to significant pollutant and emission. Compliance status: Non Compliance NCR 2015 – 09 of 12 The company doesn’t have GHG mitigation management program from result of identified significant pollutant and emission already done by company. NCR 2015 – 10 of 12 GHG calculation used by company not appropriate tools approved by RSPO. Criterion 6.1: Aspects of plantation and mill manag ement including replanting that have social impacts are identified in a participatory way, and plans to mitigate the negative impacts and promote the posi -tive ones are made, implemented and monitored, to d emonstrate continuous improvement. Findings: PT PNIII still uses Social Impact Assessment (SIA) document that was developed by the Research Institute of the University of North Sumatra in 2012 for Sungai Torgambai Mill and Estates.. Company still keep the evi-dences regarding affected parties participations in the process of SIA report such as meeting records, photos and attendant list that recorded in 2012 and filled questionnaires of Social, economy, cultural aspects and public health aspects. This report has documented negative and positive impacts of company’s activities re-garding plantations and Mill. The main impacts that has assessed were:

a. Social and Public Facilities: Village main road, bridges, flood high risk village, worker housing facility, education health and transportation)

b. Working opportunity. Local workforce recruited and unemployment issues. c. Local business opportunity. The low of local business managerial capability, consumer good distribu-

tions and creativity. Monitoring and Management Plan of social impacts has developed for Sei Torgamba Mill and Estate. The plan has stated information regarding social impacts parameters, indicators, measurement, management ob-jectives and specific location and activities. The plan has been develop with participations of affected parties. Participatory Rural Appraisal has been conducted all estates. Stakeholders aspirations, expected condition, and institutions that support has been recorded during the PRA process. PN III has also develop Long Term Planned Activity 2013 – 2017 that consist of activities, volume and accomplishment time target. The Long Term Social Impact and Conservation Management Plan has been evaluated by the PN III Man-agement. The evaluation result consist information such as: a. Social impact management. In budget year of 2013, there are 4 objects has been implemented, and the


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rest will be budgeted in 2014. b. All oh conservation activities has been implemented. PT PN III Sei Torgamba has no out-grower/smallholder scheme. Impacts for smallholder/out-grower schemes is not relevant as part of Social Impact Assessment report and management plan. Compliance status: Full Compliance

Criterion 6.2: There are open and transparent metho ds for communication and consultation between growers and/or millers, local communities and other affected or interested parties.

Findings: Procedure of communication has documented as an SOP no. PK-3.00-03, published in September 23rd 2014. This procedure has refer to code of conduct and Archiving Guidance. There are two forms has developed to implemented the system such as: a. Form No. FM 3.00-03/01 for “Records of Communication Result with stakeholders in district level”. b. Form No. FM 3.00-03/02 for “Records of Communication Result with stakeholders in Director Office lev-

el”. This document has clearly stated procedural steps for communications with stakeholder and consultation for stakeholders. Communication process divide into three levels. Consultation process could be conducted in formal and informal meetings, workshop, gathering etc. Every estate and Mill has develop maintain a list of stakeholders. All related and strategic stakeholders from government, civil society, academic parties and press has been identified and listed. Contact persons, official address and phone number has also recorded in the list. Record of community aspirations has been maintain as determined by the procedure of document control. Ev-idences showed during audit such as: a. Log Book: Record of Stakeholder Communication 2014. There 23 letters from stakeholders registered in-

to this book, and that has been responded by PN III Torgamba Management. Most of the letters regard-ing request for support and donations.

b. Maintained letters (samples): - A letter from local village office, April 12th2014, regarding request for support/donations. This letter

has been responded in April 22nd 2014. - A letter from local villages office, April June 6th2014, regarding request for support/donations for small

bridges development. This letter has been responded in June 9th 2014. - All of the letters has been accepted by managers and dispositioned to ATU/APK staff.

Dedicated person has appointed to conduct and coordinated the communication and consultation process with stakeholder. As stated in the procedure, dedicated person conducting communication and consultation with stakeholders are Division Head, District manager, and estate/mill manager. Persons in charge at those position has always changes gradually as part of board policy. Every changes person has always been, and would be communicate and introduce to strategic stakeholders. It also authorize by PTPN III Torgamba Man-ager decree February 24 2015, regarding appointment of officer responsible for conducting consultation and communication to communities. Compliance status: Full Compliance

Criterion 6.3: There is a mutually agreed and docum ented system for dealing with complaints and grievances, which is implemented and accepted by al l parties.

Findings: Company has no specific procedure dealing with complaint and grievances from external stakeholder, but as mentioned in SOP No. PK3.00-03 point 7.1.1 state that external could submit their aspiration, advice, re-sponse regarding PN II performance to management of PT PN III. Every submitted communication in any forms, including complaints and grievances would be responded by manager (estates/mill/district). This pro-cedure has been communicated to relevant stakeholders by direct communications, mails and signboards (flowcharts). Field verification found that signboard has placed around estates office and emplacements. Procedure also stated that if any complaints and/or aspiration use short messege centre number (SMS cen-tre number) i.e.: 9600. But, when the SMS centre number tested bu auditor, doesn’t work. Then the company they don’t know that the SMS centre doesn’t work anymore. This is raised as a nonconformity . (NCR 2015 – 11 of 12 ).


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For internal stakeholder, company has documented complaint and grievances mechanism in the Collective Working Agreement (PKB), art No. 67 regarding The Procedures of Worker Complaint/Grievances Handling. This article consist information such as:

a. Every worker grievances firstly discussed with their supervisor. b. If the its not found resolutions, then the problem will be handle as Law no. 2 year 2004. c. Industrial action conducted must be complied with law no. 13 year 2003. d. Bipartite Association Institutions is part of grievances/complaints handling channel.

For some issues, labour union is taking part as a channel of worker grievances acceptances and handling. Records of complaint and handling process has been made and kept as the documents retention time pro-cedure. Compliance status: Non Compliance NCR 2015 – 11 of 12 Based on field and test verification, that the SMS centre uses by company to accept any complaints and/or aspiration from external and internal doesn’t work anymore. Criterion 6.4: Any negotiations concerning compensa tion 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 t heir own representative institutions. Findings: Company has no specific procedure of compensation, but already has procedure of conflict resolutions that consist of compensation procedures. The conflict resolutions documented into Procedure no. PK-3.11-12 re-garding Conflict Resolutions with working instruction No. IK 3-11-12. This procedure has refer to national regulations such as Law No. 5 year 1960, Law no. 18 year 2014 regarding Plantation and Law of HGU (land title). The flow process has been publicized to local community by a signing board and direct communication. There are socialization material and attendant lists showed (Bagan Manunggal Villagers) regarding the pro-cess records. There is no social conflict and/or land disputes, complaints and grievances recorded in Torgamba Estates. It has been confirmed in public consultation meeting. Stakeholders consultation result showed that no social is-sues regarding company’s performances. Compliance status: Full Compliance

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

Findings: Based on Collective Labor Agreement (PKB) of PTPN III 2014-2015, there are stated about worker, Chapter IV “Industrial Relations”, Article 13, “Worker classification and structural stratification”, consist information such as: a. Worker classification divide into 7 strata. b. Each strata divide into group level stratification Chapter VII of the PKB, article 30 stated about group of wage, mentions about 16 group of worker that de-tailed in annexure. Beside all that permanent worker, in PN II estates also has some workers that work under contractors/partner for maintenance and other plantation activities. This kind of worker known as un-permanent daily worker that paid based on related normative rate (tonnage, hectares etc.). PT PN III Sei Torgamba Mill and it’s supply bases has implemented their commitment regarding minimum wage payment. Relevant regulations such as Governor Decree of minimum wage has been followed up by company and implemented to all permanent workers. There are evidences such as copy of relevant regula-tions and pay-slips such as: a. Director Decree No. 3.08/SKPTS/R/08/2015 regarding Worker Wage Improvement, Januari 12th 2015: a)

Minimum payment comply to province minimum wage payment; b) based on Collective Labor Agreement 2014-2015 article 31, the minimum wage payment must adjusted to improvement of North Sumatera Province Minimum Wage. Attached to this decree letter a lists of Basic Wage and fix allowance 2015.

b. Pay Slip for worker level IA/0 (3 person). Basic wage stated IDR 1.218.750; Fix allowance IDR 406.250;


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Rice Allowance IDR 143.250; social Allowance IDR 179.156. Minimum payment of Labuhan Batu Se-latan based on Governor decree of District Minimum Wage Payment was IDR 1.870.000. Based on the pay-slips of lowest level permanent, PT PN III has comply to this regulations.

There are some daily un-permanent workers that work in PT PN III Torgamba estates operations areas. The worker status are contractor’s worker for jobs like maintenance and fertilizing. Field check and interview with contractor workers conducted in afdeling I and IV. Interview result with 10 workers in afdeling I showed that contractor has paid IDR 25.000 in this last 2 years for 3 type of jobs (manual, DAK and chemist). This kind of jobs has different allocated time needed (DAK and Manual allocate 2.5 hours; chemist allocate 3.5-4.5 hours). There is no wage improvement as improvement of The minimum wage payment regulation. On the other side, contractor’s workers that work in afdeling VI has been payment has comply to regulations. This finding rise as non-conformity . (NCR 2015 – 12 of 12 ). Working regulations in PT PN III Sei Torgamba Mill and estates refer to Collective Labor Contract 2014 – 2015. This document has determines 18 chapter of 76 articles agreements that must followed by all level of PN III workers. This document has communicate and socialized to all level of worker by the labor union (SP BUN). Some evidences regarding PKB socialization has shown during audit. Company has develop a small booklet and contribute to all level managers. Articles regarding worker rights such as: a. Article 17, Working Days and Working Hour b. Article 18, Official Working Hour c. Article 19, Overtime d. Article 20, Premium e. Article 21-29, work leave f. Article 30-31, wages and salary g. Article 41, Tax, contribution and premium PT PN III Torgamba Mill and estates has provide Adequate Housing facilities for workers completed with elec-tricity and water supplies. This facilities provide to workers as part of Collective Labor Agreement. Article 37, “Amenities and social support” determines any facilities that part of worker rights. Evidences showed during recertification audit such as: a. Monthly Report of General Affair (LPMU), February 2015 (for Mill and estates), consist information such

as report regarding housing facilities (LPMU-22), social building (LPMU-22A), education (LPMU-23). b. List of asset per February 2015 (for Mill and estates). Consist information regarding existing conditions

of facilities used by workers. c. Budget Plan 2015 (for mill and estates). Consist information regarding budget for housing and general

social facilities maintenance. d. Pay-slips of 3 lowest level worker, March 2015. Mentioned about incentives regarding electricity, water

supplies and rice. Field checked during recertification found that every emplacement has some small store that sell daily con-sumptions need, and a good access to local market. Worker access to adequate and affordable food moni-toring and improvement program is not needed. No emplacement placed in a remote areas, external con-sumption trader is freely entry to estates to trade their goods with local stores. Food sufficient is not an issue for workers in PN III areas. On the other hand, company has provide rice allowance for all worker as part of agreement (PKB). Compliance status: Non Compliance NCR 2015 – 12 of 12 Field check and interview with contractors worker conducted in division I and IV. Interview result with 10 workers in division I showed that contractor has paid IDR 25.000 in this last 2 years for 3 type of jobs (manu-al, DAK and chemist). This kind of jobs has different allocated time needed (DAK and Manual allocate 2.5 hours; chemist allocate 3.5-4.5 hours).There is no wage improvement as improvement of The minimum wage payment regulation. On the other side, contractor’s workers that work in division VI has been payment has comply to regulations. Criterion 6.6: The employer respects the right of a ll 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 f acilitates parallel means of independent and free association and bargaining for all such personnel.


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Findings: PT PN III has no specific documented policy regarding respects the right off all personnel to form and join trade unions of their choice and to bargain collectively. But as a commercial institutions owned by the na-tional government (State), PN III follow all laws, rules and regulations produced by national government. In this case, PN III following the Law of Republic Indonesia, no. 21 year 2000, regarding Labor Union. This commitment has implemented by the existing of Plantation Worker Union (SP-BUN) in every mills and es-tates, so does in Torgamba Mill and estates. There were evidences showed during audit regarding the exist-ence of union labor in company’s operations areas and PN III workers as the members, such as: a. Member List of Plantation Labor Union (SP-Bun) of PN III, Torgamba Estate, March 2015. b. Name list of Plantation Labor Union (SP-Bun) of PN III members and organizing committee Torgamba

Estate, March 2015 c. Collective Labor Union (PKB) of PN III, 2014-2015. This agreements is made by Bipartite Cooperation

Institution that consist of Labor Union and Company’s Management. In this agreements stated some clauses consist of recognition to Plantation Labor Union (SP-BUN) that has been legally recognized.

During audit, evidences showed that labor union in all bases were work effectively as indicated by records and documentations showed regarding their activities. There are some samples evidences of labor union documented activities records, such as: a. Meeting note, Working Meeting October on 23rd, 2013. Based on attendant list, there were 7 commis-

sioners (members) has attended to the meeting. b. Meeting note, Working Meeting April 13th, 2013. Based on attendant list, there were 27 workers (mem-

bers) has attended to the meeting. c. A letter from management of PN III Torgamba to Labor Union Lead, October 30th 2014, requesting a ne-

gotiations meeting. The meeting has been conducted and recorded in a meeting summary. Compliance status: Full Compliance Criterion 6.7: Children are not employed or exploit ed. Work by children is acceptable on family farms, under adult supervision, and when not interfering w ith education programmes. Children are not ex-posed to hazardous working conditions. Findings: PT PN III has commitment to employ only 18 years above, this commitment has documented in Collective Working Agreement (PKB) 2014-2015, article 11 regarding recruitment. In this article state that minimum age requirement for worker at unit and director office is above 18 years. This policy has implemented into the system by documented a Working Instruction No. PK-3.08-01. Point 7.1.a.1, regarding “executive worker recruitment”, sub chapter a.2.1. mentions statement regarding worker recruitment requirements, such as: a. Minimum Educations background is certified basic school or relevant and the highest is certified senior

high school or relevant. b. Minimum age is 18 to 30 years old. c. Selection conducted by the company. This commitment and policy implemented to all estates and mills, for internal and external worker that work-ing in PN III operational areas. Socialization regarding this policy has been conducted to all worker and resi-dents. One of evidences showed regarding this activity were meeting record in January 7th 2015. Other evidences showed during audit were worker list per March 2015 of all estate and mill, and found comply with the procedures. Field check to (samples) field work locations has conducted during certification in three kind activities such as chemist/spraying, harvesting and maintenance. No worker under 18 years old employed (by company or by contractors) in operations areas. Compliance status: Full Compliance

Criterion 6.8: Any form of discrimination based on race, caste, national origin, religion, disability, gen-der, sexual orientation, union membership, politica l affiliation, or age, is prohibited.

Findings: PT PN III has no specific documented policy regarding anti-discrimination based on race, caste, national origin, disability, gender, sexual orientation. But as a commercial institutions owned by the national govern-ment (State), PT PN III follow all laws, rules and regulations produced by national government. In this case,


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PT PN III following the Law of Republic Indonesia, no. 40 year 2008, regarding Abolishment of Discrimination Based on Ethnic and Race. Based on article 3, the abolishment of discrimination based on race and ethnics have main goals to manifest familiarity, brother/sisterhood, friendship, peace, harmony, safety and life with in-come generative activities among nations. This law has adopt and implemented by PT PN III on their work-forces management system, and documented in collective labor agreement, procedures and working instruc-tions, such as: a. Code of Conduct, chapter regarding PT PN II commitment to their worker stated that PT PN III respects

all workers/employee as corporate asset with dignities and treat them equally without dividing any differ-ences of race, skin color, religion, origin, physical barriers, gender, and age.

b. PKB 2014 – 2015, article 11 regarding recruitment and Working Instruction No. PK-3.08-01, regarding re-cruitment. Both documents stated general terms regarding worker requirements determinations.

Audit evidences showed during certification are worker list, General Affair Report and Annual worker promo-tions, as follow: a. Socialization with specific regarding discrimination issues is not conducted, on the other hand, PN III Tor-

gamba has conducted socialization of Code of Conduct. This socialization has conducted in September 26th 2015.

b. Worker list, February 2015 for Torgamba Mill and Estates. This list consist information of workers based on age, gender, race, religion and ethnics. Some ethnical background worker look higher than other. It’s not represent discrimination issues, but it’s represent local workforce that has recruited by the company.

c. General affair report for Torgamba Mill and Estates, March 2015. This report shows all level of workers with additional information such as beneficiaries, education, gender, religion and public facilities build by the company such worshiping building (mosque and church). This record shows that all level workforce could be occupied by all kind social background. Company also provide facility for religion activities.

d. Annual PTPN III worker promotions 2015. This list show all workers (include Torgamba mill and estates) of PT PN III who has annually promoted. No indication found that the promotions has some discrimination issues.

e. A letter to local heads of villages, March 14th 2014, regarding announcement of recruitment, September 12th 2013. No contained text indicated discrimination issues violations.

Field visit and verification conducted in mill and estates, some workers such as harvester, maintenance and chemist workers has been interviewed. They confirmed that their supervisor treat them equally among work-ers and no such favorite worker in field. Most of un-permanent workers (maintenance) who works as under contractor are spouse of permanent worker (harvester, security, etc.). They stated that has treat equally by the supervisor from PT PN III like the permanent worker. Compliance status: Full Compliance

Criterion 6.9: A policy to prevent sexual harassmen t and all other forms of violence against women and to protect their reproductive rights is develop ed and applied.

Findings: PT PN III has documented a Policy to prevent sexual harassment and all other forms again violence against women, and to protect their reproductive rights. This policy has clearly stated about definition of sexual har-assment and potentials place that could be a violations places. This policy has also stated the terms of actor and victims. Company already has specific procedure in handling grievances and complaints regarding gen-der based violations (March 5th 2015). Policies to protect reproductive rights has documented and being parts of Collective Labor Agreement (PKB) 2014-2015, such as: a. Article 26, Maternity Leave b. Article 27, Monthly female period leave c. Article 45, Woman Worker as Head of her Family rights During audit, company showed evidences regarding maternity leave and monthly period leave such as filled forms that has issued and approved by the assistant manager. Field visit found that company also provide a daycare in every emplacement for female worker who has children under 5 years old. This policy has communicate to all level of workers and contractors. Field check and interview found that some of un-permanent worker that mostly female, aware of this company’s policy. Specific grievance mech-anism regarding gender based violation has develop and documented as a flowchart in March 5th 2015. This mechanism has communicated and socialized along with the policy, and has specifically report a grievances procedure against supervisor. The flow chart has stated procedural steps as follows: a. If there is a case of sexual harassment among workers, the case must report to foreman,


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b. If there is a case of sexual harassment among workers conducted by foreman, then the case must report to foreman I,

c. If there is a case of sexual harassment among workers conducted by foreman I, then the case must re-port to Assistant,

d. If there is a case of sexual harassment among workers conducted by organizing employee, then the case must report to manager.

This policy and procedures has communicated to workers, based on evidences of meeting records, May 11th 2015. Based on logbook of woman grievances and complaint records, there is no cases regarding sexual harassment and gender based violence found. Interview result with woman workers, emplacement chief and foreman confirmed that there is no such cases happened and/or reported. Compliance status: Full Compliance

Criterion 6.10: Growers and mills deal fairly and t ransparently with smallholders and other local busi -nesses.

Findings: Current and Past FFB Price for 3rd parties records available during audit, communicate to supplier by cellular short message and on signboard near the weigh bridge. All FFB buying price determined by Directorate of-fice of PT PN III, via division of commercials (3.07). District office level accepted internal memo regarding FFB price information (No. 3.07/MO/50/2015) then distribute to all mill under district areas. The FFB Price guidance has formulate by directorate office and Torgamba Mill and estate has 3rd parties FFB suppliers: CV Jaya Utama and CV Karya Mandiri. Contract agreement between FFB supplier arranged by district level office, a sample evidence has shown during audit (No. DLAB.I/SPJ/31/2015, March 28 2015). This agreement has stated clauses that has been agreed by both parties, such as: a. Yield (Randemen) Potentials analysis. b. Selling price of CPO, c. Processing cost d. Selling cost e. CPO selling price based memo from directorate office of PN III Torgamba Mill has 3rd parties FFB suppliers, UD Waskita Jaya and UD Mandiri Pratama. Evidences showed that Mill has conducted Yield Potentials analysis for both of them as recorded by Assistant of laboratory, March 13th to 15th 2015. Contract agreement between FFB supplier arranged by district level office, this agreement has stated clauses that has been agreed by both parties, such as: a. Article 1, The sum of FFB quota b. Article 2, The quality of FFB c. Article 3, FFB Shortage and grading determination d. Article 4, Requirement of FFB Reception e. Article 5, Price f. Article 6, Implementation Monitoring of FFB Buying g. Article 7, Payment procedure h. Article 8, Mill Ability i. Article 9, Force Major As stated in Article 7, regarding payment procedure, there are some conditions that has agreed, such as: a. Seller could receive payment every 2 weeks at Labuhan Batu Selatan Office after completely submit ad-

ministrative requirements. b. Every payment conducted by submitting Cheque Giro (Bilyet) in the name of seller. Torgamba Mill could show their compliance to the agreement by providing evidences such as: a. Cash Out Note for FFB payment, May 2015, prepared by finance staff, checked by division head of fi-

nance and approved by district manager. b. Payment note for FFB buying from 3rd parties, this note consist information of c. Detail buying reception of FFB supplier, May 2015, d. Supplier invoice letter, April 2015. PTPN III Torgamba show evidence regarding FFB Price transparency. Head of administrative has conducted RSPO socialization regarding RSPO P&C to all FFB supplier, active and inactive. As recorded on attendant list, Mai 11th 2015l, (8 suppliers attended the meeting. Two FFB suppliers has attended public consultation meeting during recertification, and has been time allocated for them to speak out their aspirations. They stat-ed that there is no complaint or grievances from them according to their agreements. No violations conducted


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by both parties regarding the agreement they have made with PN III. They hope that the cooperation with Sei Torgamba Mill would be keep continues. Compliance status: Full Compliance

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

Findings: Local development needs and priorities has identified in Social Impact assessment of Mill and every estate. The SIA report has identified impacted and affected villages that would receive contribution from PT PN III and has consulted to stakeholders. The contribution divide into two categories, partnership program and so-cial donation/contribution program (known as environment empowerment – bina lingkungan). There is a report shows that local business has been part of partnership program, received soft loans from PT PN III to develop their business, such as: a. UD Rika Sembako, Kapuas Bagan Batu Street, Labuhan Batu Selatan, 2013, soft loan IDR 25.000.000,- b. UD Iqbal, Bagan batu Komplek, Labuhan batu Selatan, 2013, soft loan IDR 25.000.000,- c. UD Fretsita, Kapuas Bagan Batu Street, Labuhan Batu Selatan, 2013, soft loan IDR 25.000.000,- This program still monitored by district office, and reported to PT PN III head office. Implementation evidence showed during regarding PN III contribution to local development, such as: a. A letter from Torgamba Estate manager to Directorate office, January 26th 2012 regarding social envi-

ronment empowerment program. This letter consist of proposals recapitulations from community and stakeholders that need approval by the director. There are 5 incoming proposals with varies of projects and values.

b. Memo Letter, may 30th 2013, regarding Distribution of community soft loan for business capital support. No Smallholder scheme in PT PN III Sei Torgamba Mill supply based Estates. Local Business Partnership program is obligation from governance as exchange program that must be conducted by Plantation without smallholder schemes. Compliance status: Full Compliance

Criterion 6.12: No Form of forced or trafficked lab our are used.

Findings: No Foreign worker employ at all PN III operations. All workers are coming from varies place of Indonesia fol-lowing recruitment procedure conducted by PN III. Most of contractor workers, un-permanent daily/piece rate workers are spouses of permanent workers. They freely apply and resign of PN III employment system (and contactor worker assignment). No forced labor trafficked worker issued relevant in PN III Mill and estates. Compliance status: Full Compliance

Criterion 6.13: Growers and millers respect human r ights

Findings: PT PN III has no specific policy titled Human Rights, but has a varies of documented policy that respecting human rights. The policy respecting human rights such as: a. Respecting freedom of speak and joining trade union. This policy documented in PKB 2014-2015, article

5, 6 and 7. b. Respecting reproductive rights and prohibiting sexual harassments and gender based violence. This pol-

icy documented in: - Policy of Sexual Harassment Prevention, March 5th 2015. - PKB 2014-2015, article 26, 27 and 45.

c. Respecting communities property and economical activities. This policy documented in: - PKB 2014-2015, chapter 4 to 10 and XIV.


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- Procedure No. SOP No. PK3.00-03 regarding Communication and Consultation - Procedure no. PK-3.11-12 regarding Conflict Resolutions

d. Respecting equal working opportunity and anti-discrimination - PKB 2014-2015, article 11. - Working Instruction No. PK-3.08-01 regarding recruitment

There is no specific socialization and communication process regarding Respect to Human right Policy. All of human rights components has stated in Collective Labor Agreement. Socialization according to this policy was automatically part of the PKB agreement. Compliance status: Full Compliance Criterion 7.1: A comprehensive and participatory in dependent social and environmental impact as-sessment is undertaken prior to establishing new pl antings or operations, or expanding existing ones, and the results incorporated into planning, m anagement and operations. Findings: There is no new planting activity since November 2005 in all estate. All planted area since November 2005 came from replanting activity, evidenced based on field assessment. So, the new SEIA document for this company for new planting no available. All process in the estate and mill already covered in SEIA document and already verified as explained above. So this criteria not applicable and did not verify. Compliance status: Not Applicable

Criterion 7.2: Soil surveys and topographic informa tion are used for site planning in the establishmen t of new plantings, and the results are incorporated into plans and operations.

Findings: There is no new planting activity since November 2005 in all estate, information about soil type and topogra-phy conditipn already explained in the EIA document and explained above. So this criteria not applicable and did not verify. Compliance status: Not Applicable

Criterion 7.3: New plantings since November 2005, h ave not replaced primary forest or any area re-quired to maintain or enhance one or more High Cons ervation Values.

Findings: There is no new planting activity since November 2005 in all estate, year of planting 2005 until 2010 came from replanting activity. The young of year planting from 2011 – 2015 came from re-planting also. So this cri-teria not applicable and did not verify. Compliance status: Not Applicable

Criterion 7.4: Extensive planting on steep terrain, and/or on marginal and fragile soils, is avoided.

Findings: There is no new planting activity since November 2005 in all estate, the topography and slope condution al-ready explained in EIA and HCV document assessment, and the estate already implemented terracing for sloping area. So this criteria not applicable and did not verify. Compliance status: Not Applicable


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Criterion 7.5: No new plantings are established on local peoples’ land without their free, prior and i n-formed consent, dealt with through a documented sys tem that enables indigenous peoples, local communities and other stakeholders to express their views through their own representative institu-tions. Findings: There is no new planting activity since November 2005 in all estate, and there is no information from stake-holder consultation that the palm oil development of Torgamba are dislike by community, and based on con-sultation stakeholder, local community agreed with Torgamba palm oil development. So this criteria not appli-cable and did not verify. Compliance status: Not Applicable

Criterion 7.6: Local people are compensated for any agreed land acquisitions and relinquishment of rights, subject to their free, prior and informed c onsent and negotiated agreement

Findings: There is no new planting activity since November 2005 in all estate, so this criteria not applicable and did not verify, because there is no information and recording related compansation process from company and relat-ed stakholders during public consultation. Compliance status: Not Applicable

Criterion 7.7: Use of fire in the preparation of ne w plantings is avoided other than in specific situa -tions, as identified in the ASEAN guidelines or oth er regional best practice.

Findings: There is no new planting activity since November 2005 in all estate, so this criteria not applicable and did not verify. Based on field assessment replanting process already done by manual land clearing not burn activity. Compliance status: Not Applicable

Criterion 7.8: New plantation developments are desi gned to minimise net greenhouse gas emissions.

Findings: There is no new planting activity since November 2005 in all estate, so this criteria not applicable and did not verify. Compliance status: Not Applicable

Criterion 8.1: Growers and millers regularly monito r and review their activities and develop and im-plement action plans that allow demonstrable contin uous improvement in key operations.

Findings: The Company has an internal audit for the evaluation and improvement of the best practice activities in the field accordance to the company procedure and/or work instructions. Company also has effort to keep the soil erosion through the terracing and cover crop implementation to min-imize the runoff. For environmental management the company already done reported the environmental management and monitoring implementation to the related official government every six month periodically. The report showed the result of measurement of environmental parameters, such as water surface quality, land application measurement, air pollution and ambient, waste water/POME measurement. Based on certificate result of


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measurement all of parameters still under below standard. The, company also commit to maintain and keep their HCV area, through the periodically monitoring by secu-rity to ensure the HCV area still safe. Workers welfare, the company has provided housing, school, school bus, water, and other public facilities in emplacement. Compliance status: Full Compliance

3.2 Identified Non-conformances against RSPO P&C Re quirements, Corrective Actions Taken and Audi-tors Conclusions During this certification assessment, a total of 12 nonconformance against to the RSPO Principles & Criteria Generic year 2013 were identified. These consisted of 7 major non-conformities and 5 minor non-conformities. While for RSPO SCCS found 1 major nonconformaces against to the RSPO SCCS Requirement System No-vember 2014. For the major non-conformances, the company has taken the necessary corrective action to close most of these non-conformances, and this was verified by the audit team through checks of documents submitted by the company. For the minor non-conformances, the company has taken corrective action against these as well, and the clo-sure of these minor non-conformities will be assessed during the next surveillance audit. A summary of all identified non-conformances, corrective actions taken and auditor conclusions is as below:

Criteria 2.1.1 (Major) Evidence of compliance with relevant legal requirements shall be available

NCR 2015 – 01 of 12 (Major) Found during field assessment in field number X23, division VI, sprayers foreman who work with chemical not provide medical test by company.

Correction : Carry out the medial test (cholinestrase test) for related person, because during the medical test carried out, that person was not coming. Corrective Action taken : Ensure all workers who was work with chemical, should follow the medical test. Auditor Conclusions : Closed Verification result: The company submitted the medical test result for spraying foreman for 8 foreman, example medical test result number RSTOR/SKHPK/16/VI/2015 dated on June 15, 2015, this foreman based on medical test, was in good condition, and the doctor gave the suggestion when his work, should use the complete PPE. Date of closure: July 30, 2015 Criteria 2.2.1 (Major) Documents showing legal owne rship or lease, history of land tenure and the actual legal use ofh the land shall be available.

NCR 2015 – 02 of 12 (Major) Torgamba estate based on decree letter number SK.44/Menhut-II/2005 dated on February 16, couldn’t showed that the concession area not include in forest area.

Correction : Carried out communication and coordincation to the Forestry Official Government of North Sumatra about follow up process from letter number 3.11/X/82/2014 dated on September 2014.


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Corrective Action taken : Complete all document related forest release area to the related official government. Verification result: The company submitted the map of designation forest area in North Sumatra, this map uncleared number and identification identity, but based on map showed that the Torgamba estate was exclude from the for-est limited area, indication with the orange colour as limited forest area was not include in Torgamba con-cession area. This is already follow up by the company through the submit request letter ofr forest release in Oktober 31, 2014 document number 3.11/X/104/2014, and still process from related offical government for forest release and information letter to explained that the Torgamba concession area was exclude from forest area. Auditor Conclusions : Closed Date of closure: July 30, 2015

Criteria 4.4.1 (Minor) An implemented water managem ent plan shall be in place.

NCR 2015 – 03 of 12 (Minor) Record of water analysis from surface water in division VI field number Y-23 couldn’t showed or not avail-able in place. Correction : Carried out the water surface monitoring in division VI field number Y23 and the result should document-ed. Corrective Action taken : Ensure all of water resource in Torgamba concession area will monitored through the quality analysis of surface water. Auditor Conclusions: Evidence of correction/correct ive action will be verified during next audit. Criteria 4.6.5 (Major) Pesticides shall only be han dled, used or applied by persons who have com-pleted the necessary training and shall always be a pplied in accordance with the product label. Appropriate safety and application equipment shall be provided and used. All precautions attached to the products shall be properly observed, applied , and understood by workers.

NCR 2015 – 04 of 12 (Major) The company couldn’t showed evidence that the PPE has been given to sprayer compliance with the PPE identification needs matrix. Correction : Complete evidence PPE distribution to all spraying workers and ensure that the workers use the PPE dur-ing on duty and the PPE use appropriate with their job. Corrective Action taken : Documented the PPE distribution to sparying workers and ensure the PPE use during on duty. Verification result: The company submitted the evidence of PPE distribution to spraying workers on June 8, 2015, with the PPE type was safety shoe, mask, gloove and helmet, and complete with attendant list and photograph of PPE distribution. Auditor Conclusions : Closed Date of closure: July 30, 2015


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Criteria 4.6.7 (Minor) Application of pesticides sh all be by proven methods that minimise risk and impacts.

NCR 2015 – 05 of 12 (Minor) Found based on workers sprayer interviewed, that the sprayer tools (kep solo) cleaned after used and keep in chemical house (division office) as a mentioned in company regulation, work instruction number IK-3.01-03/14. Correction : Ensure all of sprayers tools (kep solo) cleaning and keep in chemical house in division office as a men-tione in company work instruction. Corrective Action taken : Ensure all chemical workers keep their tools and PPE at chemical house in division office, and document-ed that. Auditor Conclusions: Evidence of correction/correct ive action will be verified during next audit.

Criteria 4.6.10 (Minor) Proper disposal of waste ma terial, according to procedures that are fully un-derstood by workers and managers shall be demonstra ted.

NCR 2015 – 06 of 12 (Minor) There is no found the records of hazardous waste from estate and mill has been disposed to the author-ized collector as a mention in national regulation. Correction : Complete the evidence of hazardous authorized collecting (hazardous manifest) and ensure the all of li-cense of hazardous collector and work agreement is in valid condition. Corrective Action taken : Documented all hazardous manifest and ensure all hazardous was collect by authorized collector as a mentioned in government regulation. Auditor Conclusions: Evidence of correction/correct ive action will be verified during next audit.

Criteria 4.6.11 (Major) Specific annual medical sur veillance for pesticide operators, and docu-mented action to treat related health conditions, s hall be demonstrated.

NCR 2015 – 07 of 12 (Major) Based on sprayer workers interviewed and document verification, record of medical test for cholinesterase test not available in place, for sprayer workers employed by CV Rudin Sejahtera in division I. Correction : Carry out the cholinesterase medical test to all third party (outsource) chemical workers. Corrective Action taken : Documented the medical test result. Auditor Conclusions : Closed Verification result: The company submitted the cholinesterase medical test result for third party chemical workers (out-source), with evidence document number 542/E/LHU-KES/BK3-MDN/V/2015 dated on October 25, 2015 for 18 person thord party chemical workers and document number 542/E/LHU-KES/BK3-MDN/V/2015 dat-ed on October 20, 2015 for 21 person chemical third party workers. Based on test result all of chemical workers was in good condition. This medical test carried out in Health and Safety Regional Office of Me-


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dan. Date of closure: July 30, 2015

Criteria 5.2.4 (Minor) Where a management plan has been created there shall be ongoing monitor-ing.

NCR 2015 – 08 of 12 (Minor) Torgamba estate has carried out the HCV monitoring and management, but especially for species abun-dance not carry out by estate. This is required in HCV management plan. Correction : Carry out the HCV monitoring as mentioned in PK-3.01-08 and ensure that abundance of species also measurable. Corrective Action: Ensure the HCV monitoring result was complete and documented. Auditor Conclusions: Evidence of correction/correct ive action will be verified during next audit.

Criteria 5.6.2 (Major) Significant pollutants and g reenhouse gas (GHG) emissions shall be identi-fied, and plans to reduce or minimise them implemen ted.

NCR 2015 – 09 of 12 (Major) The company doesn’t have GHG mitigation management program from result of identified significant pollu-tant and emission already done by company. Correction : Carry out the GHG identification and calculation use GHG RSPO new version and make the action plan to mitigate the GHG emission. Corrective Action taken : Ensure the calculation sould carry out in every year also make the mitigate program. Auditor Conclusions : Closed Verification result: The company submitted the document of GHG mitigation work plan for 2015, with the activity such as: record of fertilizer used, chemical use, fossile fuel use, electricity use and the GHG mitigation progam was reduce the chemical use, vegetation enrichment and maintained the vehicle periodically. Date of Closure: July 30, 2015 Criteria 5.6.3 (Minor) A monitoring system shall be in place, with regular reporting on progress for these significant pollutants and emissions from est ate and mill operations, using appropriate tools. NCR 2015 – 10 of 12 (Minor) GHG calculation used by company not appropriate tools approved by RSPO. Correction : Carry out the GHG calculation use RSPO GHG calculation new version and make the mitigation progam. Corrective Action taken : Ensure the GHG calculation and mitigation program should prepare every year and communicate to the all level workers.


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Auditor Conclusions: Evidence of correction/correct ive action will be verified during next audit.

Criteria 6.3.1 (Major) The system, open to all affe cted parties, shall resolve disputes in an effectiv e, timely and appropriate manner, ensuring anonymity o f complainants and whistle-blowers, where requested. NCR 2015 – 11 of 12 (Major) Based on field and test verification, that the SMS centre uses by company to accept any complaints and/or aspiration from external and internal doesn’t work anymore. Correction : Activited again the SMS centre 9600 and/or others service to collect the complaints and aspiration if any changes. Corrective Action taken : Ensure that SMS service centre still active Auditor Conclusions : Closed Verification result: The company submitted the information through the signboard and billboard that the SMS service centre is active again. Date of Closure: July 30, 2015

Criteria 6.5.1 (Major) Documentation of pay and con ditions shall be available.

NCR 2015 – 12 of 12 (Major) Field check and interview with contractor workers conducted in division I and IV. Interview result with 10 workers in division I showed that contractor has paid IDR 25.000 in this last 2 years for 3 type of jobs (manual, DAK and chemist). This kind of jobs has different allocated time needed (DAK and Manual allo-cate 2.5 hours; chemist allocate 3.5-4.5 hours). There is no wage improvement as improvement of The minimum wage payment regulation. On the other side, contractor’s workers that work in division VI has been payment has comply to regulations. Correction : Make calculation salary formula for outsource workers and ensure that the formula compliance with regu-lation. Corrective Action taken : Ensure the salary formula should accpeted by all outsource workers. Auditor Conclusions : Closed Verification result: The company submitted the document of salary paid process for 2015 and also salary formula socializa-tion to all outsource workers dated on June 8, 2015, with the formula was minimum payment based on regulation in 2015 about IDR 2,015,000, working/hours 173/month, IDR 11,647/hours. This formula was accepted by third party workers. And the salary recapitulation payment showed the salary has been paid was compliance. Date of Closure: July 30, 2015


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3.3 Description of Supply Chain Management System

E.1 Definition

Findings: Torgamba Palm Oil Mill will implemented the RSPO SCCS Modul E, whereas this modul was Mass Bal-ance. This system will allow the palm oil mill to receive certified and uncertified FFB in one time and/or produce the certified and uncertified product in the same time, the keep in CPO storage tank together, but shall be control by mass balance system, to ensure the certified raw material until certified product still treace and recorded, and only certified product can be claime certified by palm oil. Based on informastion record for 2014 and 2015, Torgamba Palm Oil mill received FFB from owned es-tate uncer certification scope (Torgamba estate), others estate under PT PN III and third party/outgrowers. In 2014, Torgamba mill received FFB from Torgamba estate about 121,848.97 mt, from others estate un-der PT PN III about 21,406.75 mt, and from outgrowers about 71,781.58 mt. while in 2015, FFB received from Torgamba estate about 142,939.700 mt, from others estate under PT PN III about 16,647.290 mt and from outgrowers about 60,421.290 mt. Until during the certification assessment, Torgamba estate didn’t claimed any certified product. Compliance status : Full Compliance

E.2 Explanation

Findings: Torgamba Palm Oil Mill has record of estimated certifed products production (CPO and PK) that could po-tentially be produced from owned estate under Torgamba supplied based/audit scope i.e.: Torgamba es-tate. Also, this estimation was include in long term production budget. The estimated certified production will presented on the public summary in Table 4. Torgamba Palm Oil Mill during the certification assessment, did not registered yet in RSPO IT Platform/e-Trace, and also during the certification assessment, the mill still prepared and developed the system to preventiv action when the RSPO SCCS MB system will run in the mill. Compliance status : Full Compliance

E.3 Documented Procedures

Findings: Torgamba Palm Oill Mill has established the procedures to implementation RSPO SCCS MB, where the procedures such as:

- IK-3.03-03/02 Rev00 about weighbridge activity - IK-3.03-03/11 Rev00 about FFB grading in loading ramp - PK-3.03-11 Rev01 about supply chain mechanism system - IK-3.03-02/02 Rev00 about production storage - PK-3.03-08 Rev01 delivery product in to Belawan installation, PT SAN, PT IKN, PKSMK and oth-

ers buyer - IK-3.03-12/01 Rev01 about FFB receiveing process in palm oil mill - PK-3.07-42 Rev00 about sales certified RSPO SCCS product mechanism - PK-3.07-43 Rev00 about certified RSPO SCCS kernel sale

This procedure above, expalined about the RSPO SCCS MB handling from incoming raw material, prod-cution, storage in tank until delivery certified product and also explained about mass balance system. But this procedure still explained about RSPO SCCS SG in mill, this is not meet with the RSPO SCCS Nov 2014 new standard, that the SG in mill was not valid again. Also found in director decree explained about the RSPO SCCS will implemented in Torgamba estate still mentioned about RSPO SCCS SG. This is raised as a nonconformity . Torgamba mill has established the person will be incharge to the RSPO SCCS implementation in mill, while the person in charge has been trained by company on March 19 – 20, 2015. Mill also carried put the


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RSPO SCCS brief/socialization on May 12, 2015 and attendant by 20 person from mill manager, produc-tion clerk, grading officer, weighbrigde operator, laboratory assisstant, assisstant mill manager and prod-cution assisstant. But, during the field observation in weighbridge process, found the wheibrigde operator not understood yet about how to handling/recevied process for certified and uncertified FFB. This is raised as a nonconformity . Torgamba palm oil mill has mechanism/procedure for receiving and processing certified and uncertified FFB’s in the mill, in document number PK-3.03-11 Rev01 about supply chain system mechanism. On this procedure explained, every certified FFB received in mill through the wighbridge, the person incharge in the weigbirde should ensure the FFB transport slip (PB25) complete by RSPO SCCS information and stamp. Compliance status : Non Compliance NCR 2015 SCCS – 01 of 01 Found in company procedure and management decree about RSPO SCCS implementation in Torgamba palm oil mill, still mentioned and explained about RSPO SCCS SG in mill, then also based on field as-sessment in weighbridge process, found the operator in weighbridge not understood yet about how to handling the incoming certified and uncertified FFB.

E.4 Purchasing and goods in

Findings: Torgamba palm oil mill has record of FFB incoming and FFB process in 2014 and 2015. Basedn produc-tion record, Torgamba mill has separetly in mass balance record between FFB owned estate and out-growers. Because Torgamba mill will implement RSPO SCCS MB, so the mill not necessary separetly in mill process between certified and uncertified raw material and product, but mill shall control in mass bal-ance record. Only FFB come from Torgamba estate will claime as a certified FFB source under Torgamba mill audit scope. And for this, Torgamba mill has verify and identify also record the FFB produced and in-coming from Torgamba estate. Torgamba palm oil mill has mechanism to infor the CB if any over production projected through the email. But during the certification assessment, Torgamba mill not produced yet the certified product claimed as MB. Compliance status : Full Compliance

E.5 Record keeping

Findings: Torgamba palm oil mill has no record related of RSPO SCCS MB FFB’s receiving, and production certified and certified product delivery also three montly basis. Because during the certification assessment mill still developed the system, and Torgamba mill has record for this. Mill has identified and separtely in produc-tion record between FFB’s incoming from owned estate and outsource through the mass balance record production. This mass balance record showed information about date of incoming FFB, FFB origin, pro-duction process, product (CPO and PK), delivery to the storage tank and dispatch process from certifed and uncertified raw material until product. Mass balance record also showed the three monthly basis for-mat, if RSPO SCCS MB will run in the future. Then, procedure also mentioned mill can be deliver product if mass balance stock is positive. Torgamba mill no have any outsources activities related their production activity. Compliance status: Full Compliance

3.4 Identified Non-conformances against RSPO SCCS R equirements, Corrective Actions Taken and Audi-tors Conclusions

During the certification assessment audit, there are found 1 major non-conformities found regarding RSPO SCCS requirement as explained on thefollowing summary of identified non-conformances, corrective actions taken and auditor conclusions.


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E.3 Documented procedures

NCR 2015 SCCS – 01 of 01 Found in company procedure and management decree about RSPO SCCS implementation in Torgamba palm oil mill, still mentioned and explained about RSPO SCCS SG in mill, then also based on field as-sessment in weighbridge process, found the operator in weighbridge not understood yet about how to handling the incoming certified and uncertified FFB. Correction:

1. Revised the procedure and work instructions related RSPO SCCS with delet the RSPO SCCS SG in mill and disrtributed the new procedure and work instruction to all department.

2. Revised the director decree with delete the information about RSPO SCCS SG in mill. 3. Provide training and socialization about RSPO SCCS to all person incharge from weighbridge of-

ficer, grading officer, processing officer, dispatch officer and others related department. Corrective Action taken:

1. Documented the new revise procedure and work instruction and communicated to all related de-partment.

2. Distributed and documented the new director decree about RSPO SCCS in Torgamba mill 3. Documented and brief/socialization the new procedure to all related person incharge.

Auditor Conclusions : Closed Verification result: The company submitted the evidenced to close this conformity, i.e.: documentation of RSPO SCCS MB brief/socialization in July 24, 2015 to all related person incharge, this brief was attendant by 15 person from all department in Torgamba mill, complete with brief photograph.

3.5 Noteworthy Positive Components

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3.6 Issues Raised during Stakeholder Consultation M eeting

Below is a summary of issues raised by stakeholders interviewed during stakeholder consultation meeting.

No. Issues Raised Management Response Audit Verification

1.

Positive aspects • The company has always supported • Provide assistance to reli-gious facilities Negative aspects • Assistance provided by PTPN III quality is often not in line with expectations so that the donated items quickly bro-ken. For example bookcase of materials carelessly • The provision of a slow Hope: • Request for help to provide faster processing • Company employees pay

- The company always supports the environment and social activities outside the company related to religious activity.

- The Aid program associated facilities proposed religious has given the company such as the use of assistance vehicles, infrastructure, physical materials religious buildings.

- Goods can only be granted in accordance with the specification of goods costs amount existing capabilities.

Positive comment no need to be verifed.


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more attention to worship • In order PTPN IIII along with religious leaders support the ministry of spirituality • Good cooperation will pro-duce good • Ensuring recruitment from the surrounding environment • Improve the community de-velopment program (such as bazaar) • Not seen their refreshment

in the religious field

- Related quality of goods received by the management of affected parties will conduct inspection before handing over the goods.

- Management Party intervened in check the number and quality of the goods given to the affected parties to avoid deviations from the costs incurred KBL party.

- Religious refreshment still held every activity religious holidays such as the Prophet's Birthday, Christmas Day.

2.

• There are no problems with employees

• Cooperation between the management and interested parties need to be main-tained and improved

- Cooperation between the worker union and management has always been good in meeting the targets of the company as well as the welfare of employees.

- Management remains enhance the good cooperation with the worker union.

No need to verify as it is positive commnet.

3.

• Environmental Development Program continue to be held (2 times a year), for exam-ple cheap bazaar, roadwork

• To be in receipt of the com-pany's employees more put residents around

• Operational results in sew-age plant

- Sei Daun Estate Management improve coordination with the KBL KBL to continue assistance.

- Sei Daun Estate management prioritizing residents around the estates that are willing and qualified as labor into Sei Daun Estate.

Commununity surounding Sei Daun and itd supply base has been eployeed by the company for casual worker sometime could become monthly payment staff

4.

• The company provides skills training for children of em-ployees and unemployed

• The Company has been im-plementing legislation in the field of employment with a good example report obliga-tory, EMC report, P2K3 re-port, employees' wages are in accordance with the mini-mum wage set.

• There is no question of indus-trial relations between the company and employees en-tering Disnakertrans

• Contract employees needs to be enrolled in Disnakertrans

- Baking Training for children of employees who work closely with the KBL already been implemented.

- Management advise and cooperate with section KBL employees so that children are unemployed to be made in the training program KBL.

- Management remains and always respect the laws and regulations.

- Management KSDAN trying to have no problems with employees about industrial relations.

- KSDAN management already advocated to the contractor so that the

No need to verify as it is positive commnet. Working agreement has been approved by local manpower and transmigration officer. - Company has evaluate their

compliance to legal regulation including regulation for workers issues.


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workers register with Manpower.

5.

• There is contamination but they can be overcome

• Improve environmental man-agement so as leader in the management of hazardous waste

• The company has normalized before there were complaints from the public, such as giving the fish in the river

• Environmental pollution occurs but not until there is loss of life or through the legal system

• There has never been a com-plaint from the public to BLH

• Companies can improve the conservation area on the banks of the river flow

• The company obedient in giv-ing reporting but always late

• Hazardouse waste Transpor-tation always late and so manifest it's too late delivered

• For the transport of LB3 notify the BLH so they can be super-vised

• In order to inform the Compa-ny's activities regarding WWTP Normalization

• BLH will give seedlings to be planted on the riverbank on the sidelines of the principal oil (not including the cost of plant-ing)

- Management always reminded all workers to guard against contamination.

- Control of hazardous waste in Sei Daun Estate already implemented according to the working procedures and will always strive to improve environmental management.

- Management's own socialization to employees and the community about the preservation sungai border region and not to hunt protected animals.

- The company always keeps the parties in order to avoid environmental pollution, while the possibility conducted by parties who are not responsible.

- Company has confirmed to the public if there is a problem that is reported to the BLH.

- The company has improved the preservation of watershed conservation areas by planting Jabon, mahogany, gelaga and bamboo.

- Management remains confirmed to subordinate personnel that any reporting done on time.

- Hazardous waste transportation fleets and workers delayed by the carrier are limited.

- Transportation of hazardous waste has been notified to the BLH and has been accompanied during transport takes place.

- Until now the BLH still not provide seedlings on purpose yet.

Company provide secondary contaimnent to minimze spillade and prevent contamintatio to other. Company has environemntal management program and SOP for hazardouse waste handling. Company always late to dispose hazardouse waste, this is concern this has been raise as potential for improvement. Some comment will be check again during next audit.

6.

• The company has always communication, consultation and coordination

• The company gave a good contribution to the village Torgamba

• For companies more con-scientious in dealing with the environmental impacts

- Torgamba Estate is always communication, consultation and coordination with the local community and contribute well to the village Torgamba including the handling of the environmental impact according to ISO 14001



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clause.

7.

• Please keep hiring by the company conveyed through the adjoining villages

• Ask that all proposals re-sponded to quickly by the company

• Please made a race like quiz for Muslim children in the village

- Accordining to the discretion of the Board of Directors that the recruitment process conducted by LPP Medan.

- All proposals are always responded and adapted to the SIA program that has been agreed.

- Smart-race closely for Muslim children is still limited between TPI is located in the Estate, and it is possible for inter-village.

The company has response incoming proposal from community, there are a lot of incomingproposal as documented on log book incoming and outgoing letter.

8.

• The company is expected to be more serious in manag-ing the environment

• Using of the CSR fund by companies more transpar-ent

• Establish a special institution that manages the fund com-panies such as the repre-sentatives of the community, local government and the company.

- Companies are always trying to manage the environment as possible for its preservation.

CSR fund management authority of Section 3:10 in Head Office.

There is a book called environmental management program to conserve. Total donation CSR program in PT PN III is 1% from net company’s profit as required by governemnet regulation.

9. • Good relations with the

communities that have been well maintained


10. • Houses of worship that have

been unsuitable please re-paired

- The whole house of worship has been fixed in accordance with the priority scale verification results Survey Team.

To be checked again during next audit.

11.

• Company Recruitment pro-cess in the estate level in-stead of at the Campus LPP Medan


12.

• Improve third parties FFB re-ceiving process in POM

• Palm oil which is not good please note because some manyof them are attacked by pests

- Management develops Integrated Pest controls.

Company received FFB from outgrowers, however the mechanism to ensure FFB orign has to be improved. Company implement IPM in all estates area.

13.

If there is a contractor's work in the estate in order to priori-tize local contractors and im-plemented by the communities that exist around all bun / local village Providing assistance to in-creasing the company's CSR and prioritized at the local vil-lage and conducted openly More open in recruitment in

- Bukit Tujuh Estate seeks to prioritize local contractors registered in PTPN3 partners as needed and prioritizing community workers around.

- Bukit Tujuh Estate always forward proposals submitted to the relevant section and prioritize the proposals that have been established

Commununity surounding Sei Daun and itd supply base has been eployeed by the company for casual worker sometime could become monthly payment staff. Company has envirnmental program including water management plan ad environmental program.


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coordination with village gov-ernment More conserve the environ-ment and water resource

under the SIA. - According to Board of

Directors policy in terms of recruitment through the LPP Medan.

- To protect the environment and water resources Bukit Tujuh Estate planting trees on the border river conservation.

14.

Companies can improve peo-ple's lives More Recruitment for local workforce EIA is irreparably For more company prioritize local contractors rather than an outside contractor

- • Torgamba Estate seeks to meet increasing living standards of employees and surrounding communities.

- Recruitment at the discretion of the Board of Directors through the LPP Medan.

- Torgamba Estate always implement continuous improvements on EIA

- Torgamba Estate seeks to prioritize local contractors are unlisted in the bylaws.


15.

The aid program for orphans and renovation of houses of worship should not be elimi-nated

- The aid program to orphans still be awarded and provision of physical material renovation for houses of worship gradually

to be verified again during next audit.


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4.0 CERTIFIED ORGANISATION’S ACKNOWLEDGEMENT OF INT ERNAL RESPONSIBILITY

4.1 Acknowledgements of Internal Responsibility and Formal Sign-Off by Client

It is acknowledged that the assessment visit was carried out as described in this report and we accept the assessment findings and report content.

Signed on behalf of PT Perkebunan Nusan-tara III …………………………………………. Tio Handoko, Head of Management System Date : August 9, 2016

Signed on behalf of TUV Rheinland Indonesia ……………………………………… Mhd Fundy C Kurniawan Lead Auditor Date : August 9, 2016


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APPENDICES

Appendix 1: Details of Certificate


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Appendix 2: List of Abbreviations

AMDAL Analisis Dampak Lingkungan & Sosial (Social & Environmental Impacts Assessment)

BPN Land used Agendy (Badan Pertanahan nasional) CHRA Chemical Health Risk Assessment CPO Crude Palm Oil CSPO Certified Sustainable Palm Oil EIA Environmental Impact Assessment ERTs Endangered, Rare & Threatened species ESH Environmental Safety & Health FFB Fresh Fruit Bunches EFB Empty Fruit Bunches GHG Green Houses Gases HCV High Conservation Value HGU Hak Guna Usaha (Land Use Rights) HIRARC Hazard Identification, Risk Assessment and Risk Control HPL Land Manage Right (Hak Pengelolaan Lahan) IPM Integrated Pest Management IK Instruksi Kerja (Work Instruction) LTA Lost Time Accident MSDS Material Safety Data Sheets MB Mass Balance NGO Non-Government Organization NIB Building Identification Number (Nomor Indentifikasi Bangunan) OSH Occupational Safety & Health PKO Palm Kernel Oil POME Palm Oil Mill Effluent PPE Personal Protective Equipment PPKS Pusat Penelitian Kepala Sawit (Oil Palm Research Institute) PT PN III PT Perkebunan Nusantara III RKL Rencana Pengelolaan Lingkungan (Environmental Management Plan) RPL Rencana Pemantauan Lingkungan (Environmental Monitoring Plan) SIA Social Impact Assessment SMK3 Sistem Manajamen Kesehatan dan Keselamatan Kerja

(Occupational Safety & Health Management System) SOP Standard Operating Procedure SPBUN Serikat Pekerja Perkebunan (Estate Workers Union) UKL Upaya Pengelolaan Lingkungan (Environmental Management Efforts) UPL Upaya Pemantauan Lingkungan (Environmental Monitoring Efforts)

Appendix 3: List of Stakeholders Interviewed and Co ntacted

No. Name of

Stakeholder Institution - Address Remark

Stakeholders Interviewed On-Site

1. Elvin Ginting Supervisor Head Office 2. Khairul Anwar Land tittle staff Head Office 3. Sahat Simanjuntak Head Office document controller Head Office 4. Leni Sprayer worker 5. Sriyati Sprayer worker 6. Sarjono Sprayer worker 7. Baginda Tua Rambe Sprayer foreman 8. Abdul Hamid Tanjung Assisstant division VI 9. Silalahi Mill 10. Panggabean Grading foreman 11. Fajri Laboratory Assisstant


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Appendix 4: Attendend list of stakeholder consultat ion meeting


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Appendix 5: Observations and Opportunities for Improvement

No. Observations / Opportunities for Improvement Crit eria

1. Torgamba estate has identified the high risk erosion area and was proposed the budg-et to maintain this area in the next year. But, wait still the budget, company need to car-ry out the preventif action to minimize the erosion.

4.4

2. The company need to ensure that the work agreement with third party of worker spray-er should be compliance with law and regulation as a mentioned in work agreemen es-pecially OHS implementation.

4.7