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Roundtable on Sustainable Palm Oil

Annual Surveillance Audit Report Report no.: ASA2_ 117289

Surveillance assessment against the

RSPO Principles & Criteria Indonesia National Intepretaion (INA-NI) year 2008 and RSPO SCCS year 2011

Name of client Wilmar International Limited

PT Tania Selatan Plantation – Burnai Timur Mill Head Office :

Lintas Timur Km 100 Desa Purwo Asri Lempuing Sub-district, Ogan Komering Ilir District

South Sumatera Province, Indonesia Date of Surveillance Audit : April 8th to 11th , 2013

Report prepared by: Aswan Hasibuan

(RSPO Lead Auditor)

Certification decision by: Manfred Herbert Lottig

(COO TUV Rheinland Malaysia)

Certification Body: TUV Rheinland Malaysia Sdn. Bhd.

No. 26 – 32, Jalan Perindustrian USJ 1/6, Taman Perindustrian USJ 1,

47600 Subang Jaya, Selangor Darul Ehsan, Malaysia.

Tel: +6 03 8024 2400 Fax: +6 03 8023 1505

www.tuv.com

TABLE OF CONTENTS

1.0 SCOPE OF ANNUAL SURVEILLANCE AUDIT 3

1.1 National Interpretation Used 3

1.2 Type of Assessment 3

1.3 Certification Details 3

1.4 Location and Maps 3

1.5 Organisational Information / Contact Person 4

1.6 Description of Supply Base 4

1.7 Actual production volumes, tonnages and projected 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 Compliance to Rules for Partial Certification 9

1.12 Progress of associated smallholders or outgrowers towards RSPO compliance 10

1.13 Approximate Tonnages Certified 10

2.0 ASSESSMENT PROCESS 11

2.1 Certification Body 11

2.2 Qualifications of Lead Assessor and Assessment Team 11

2.3 Assessment Methodology & Agenda 11

3.0 ASSESSMENT FINDINGS 13

3.1 Summary of Findings 13

3.2 Status of Previously Identified Non-conformities 25

3.3 Identified Non-conformances, Corrective Actions Taken and Auditors Conclusions 34

3.4 Noteworthy Positive Components 38

3.5 Issues Raised by Stakeholders and Findings Pertaining to Issues 38

4.0 CERTIFIED ORGANISATION’S ACKNOWLEDGEMENT OF INTERNAL

RESPONSIBILITY 39

4.1 Date of Next Surveillance Visit 39

4.2 Acknowledgements of Internal Responsibility and Formal Sign-Off by Client 39

APPENDICES 40

Appendix 1: List of Abbreviations 40

Appendix 2: List of Stakeholders Interviewed and Contacted 40

Appendix 3 Observations and Opportunities for Improvement 41

RSPO Annual Surveillance Audit Report

- PT Tania Selatan– Burnai Timur Mill – South Sumatera -

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1.0 SCOPE OF ANNUAL SURVEILLANCE AUDIT

1.1 National Interpretation Used

The operations of the palm oil mill(s) and its supply base of FFB were assessed against the national interpretion Indonesia year 2008 of the RSPO Principles & Criteria and RSPO SCCS, November 2011.

1.2 Type of Assessment

The annual surveillance certification assessment was carried out on 1 (one) mill and 2 (two) estates (Burnai Barat estate & Burnai Timur estate) under PT Tania Selatan owned by Wilmar International Group. The date of certification of this unit was 2011-05-15.

1.3 Certification Details

The details of RSPO certification of PT Tania Selatan – Burnei Timur Palm Oil Mill are as per the table below : Table 1: RSPO Certification details of PT Tania Selatan - Burnei Timur mill

1.4 Location and Maps

PT Tania Selatan location is in Muara Burnei Village, Lempuing Sub-district , Ogan Komering Ilir District, South Sumatera. This location is 100 km or 3 hours by drive from Palembang City the capital of South Sumatera. Table 2: GPS locations for all estates and mills included in annual surveillance assessment

RSPO Membership no.: 2-0017-05-000-00.

RSPO Certificate no.: 01 100 117289

Date of first RSPO certificate & validity: 2011-05-15 to 2016-05-14

Date of certification audit: August 02 to 07, 2010

Date of previous surveillance audit: March 12 to 15, 2012

Date of revised RSPO certificate & va-lidity (if applicable):

-

CPO tonnages claimed: 13,700

PK tonnages claimed: 3,100

Name of mill / es-

tate Location

GPS locations

Latitude Longitude

Burnai Timur Mill Muara Burnai Village, Lempuing Sub-district, OKI District, South Sumatera Province, Indonesia

03°37’36.0” 104°52’05.29”

Burnai Timur estate Muara Burnai Village, Lempuing Sub-district, OKI District, South Sumatera Province, Indonesia

03°37’26.9” 104°51’10.9”

Burnai Barat estate Purwo Asri Village, Lempuing Ja-ya Sub-district, OKI District, South Sumatera Province, Indonesia

03°36’43.6” 104°39’33.9”



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Figure 1 : Location of PT Tania Selatan Estates within Ogan Komering Ilir District of Palembang, Indonesia (includes location of Burnai Timur estate, Burnai Barat estate and Bambu Kuning estate which is not included in the main assessment)

1.5 Organisational Information / Contact Person

Contacts details of the company are as follows :

1.6 Description of Supply Base

Burnai Timur mill is one of the palm oil mills owned by Wilmar International in South Sumatera. Burnai Timur mill was established in 1993 with a production capacity of 60 tonnes/hours. The company was initially a National In-vestment Company, but changed status to a Multinational Investment Company upon approval from the Indone-sian Capital Investment Coordination Board (‘Badan Koordinasi Penanaman Modal’ - BKPM) in their BKPM de-

Company Name: PT Tania Selatan - Burnei Timur Mill

Address: Estate : Muara Burnai Village, Lempuing Sub-District, Ogan Komering Ilir District, South Sumatera Province, Indonesia

Head office : Multivision Tower 15rd floor, Jl. Kuningan Mulia Kav.9B, Ja-karta Selatan, Indonesia

Contact Person:

Mr. Low Kim Seng

Telephone: +08127555262

Email: [email protected]; [email protected]



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cision letter no. 696/III/PMDN/1989 dated September 16, 1989 and BKPM decision letter no. 47/II/PMDN/1996 regarding extension of share investment. Currently Burnai Barat Mill is receiving approximately 31.91% of its supplies of Fresh Fruit Bunches (FFB) from 2 company-owned estates (Burnai Timur Estate and Burnai Barat Estate) and the remaining 68.09% from the company-owned (non-certified) estate, sister company and compa-ny’s smallholder schemes and independent outgrowers. The land use rights certificate (Hak Guna Usaha – HGU) which is equivalent to the land title for Burnai Timur includes also the area of another estate, which is Bambu Kuning estate. However, due to the long distance of Bambu Kuning estate to Burnai Timur Mill , this es-tate does not supply to Burnai Timur Mill but to the another palm oil mill (Buluh Cawang Indah Mill) also under Wilmar International.

In year 2012, the company has 5 smallholders groups supplying FFB to Burnai Timur mill i.e. Divisi Mandiri (DKP), KUD Bumi Jaya, KUD Tunggal Mulia, KUD Sinar Bahagia and KUD Patwa Usaha Mandiri, while the mill only purchases FFB from independent outgrowers that have already signed a contract with Burnai Timur POM, and currently there are 20 independent outgrowers that have signed contracts wit the mill and are committed to supplying only legal and responsible FFB to Burnai Timur Mill. Details of the mill’s supply base are as per the table below :

Table 3 : FFB Supply Information for Burnai Timur mill in 2012 year and 2013 year

FFB Contributors FFB supplied (year 2012) FFB supplied (year 2013)*

Tonnes** % Tonnes %

Company owned (certified) estates :

Burnai Timur Estate 60,840.44 24.86 8,108.13 25.08

Burnai Barat Estate 17,255.75 7.05 1,600.17 4.95

Sub Total 78,096.19 31.91 9,708.30 30.03

Company owned (non-certified) estates :

Bambu Kuning Estate 13,507.05 5.52 0.00 0.00

Sub Total 13,507.05 5.52 0.00 0.00

Sister company estates :

PT Buluh Cawang Plantation 4,893.64 2.00 0.00 0.00

Sub Total 4,893.64 2.00 0.00 0.00

Scheme Smallholder :

Divisi Mandiri 8,548.71 3.49 884.14 2.73

KUD Bumi Jaya 27,851.37 11.38 4,266.53 13.20

KUD Tunggal Mulia 11,059.72 4.52 2,335.40 7.22

KUD Sinar Bahagia 18,158.09 7.42 1,838.28 5.69

KUD Patwa Usaha Mandiri 6,676.47 2.73 1,333.66 4.12

Sub Total 72,294.36 29.54 10,658.01 32.96

Independent Outgrower : 75,967.19 31.03 11,964.45 37.01

TOTAL 244,758.43 100.00 32,330.76 100.00

Note : *) Data from January to March 2013 (after deduction)

**) Total received (before deduction). Total received in year 2012 (after deduction) is 228,886.99 tonnes consists of Bur-nai Timur + Burnai Barat = 68,878.21 tonnes, and outsider (Bambu Kuning estate, PT Buluh Cawang Plantation, scheme smallholder and independent outgrower) = 160,512.63 tonnes



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1.7 Actual production volumes, tonnages and projected outputs.

Table 4 : Certified tonnages claimed, certified tonnages purchased or sold, total and projected CPO and

PK production from Burnei Timur Mill

Note : *) Data form Januari to December 2012 (after deduction), sold to PT Sinar Alam Permai - Palembang

**) Data from January to December 2012

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 table below. Table 5: Age and year of plantings of company estate supplying to Burnei Timur Mill

Age & Year of Plantings Oil palm planted area at each estate(ha)

Burnei Timur Burnei Barat *

0 – 5 yrs (2009 – 2013) 25.10 14.25

5-10 yrs (2004 – 2008) 225.73 937.28

10-15 yrs (1999 – 2003) 219.51 0.00

15-20 yrs (1994 – 1998) 255.98 0.00

20-25 yrs (1989 – 1993) 1,951.52 0.00

TOTAL 2,677.84 951.53

Note : *). Total area different with previous surveillance assessment because there are reduction area (Mr Ali’s area : 10 ha such as block 021 : 3.35 ha and block 121 : 6.65 ha) and new planting (2 ha)

Due to analysis report from trend of production, company revised their replanting plan as seen on the table be-low :

Table 6: Planned and actual oil palm replanting activities for PT Tania Selatan

Year Total planned

replanting area (ha)

Total planned replanting area for each estate (ha) Actual total area

replanted (ha) Burnai Timur Burnai Barat

2013 331.43 331.43 - -

2014 330.42 330.42 - -

2015 323.63 323.63 - -

2016 357.94 357.94 - -

2017 323.64 323.64 - -

Amount (MT)

CPO PK

Certified tonnages claimed 13,700.00 3,100.00

Certified tonnages sold* 13,700.00 0.00

Certified tonnages purchased 0.00 0.00

Actual Production** 46,798.74 11,472.99

Extraction Rate 20.45 5.01

Projected output for next 12 months 59,289.00 15,630.00



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Year

Total planned

replanting area (ha)

Total planned replanting area for each

estate (ha) Actual total area replanted (ha)

Burnai Timur Burnai Barat

2018 342.57 342.57

1.9 Area of Plantation (Total, Planted and Mature)

There is no realization of replanting program both in Burnei Timur and Burnei Barat estate. There is reduction plantation area of 10 ha in location Burnei Barat estate that this area include in Burnei Barat location permit 1,302.55. In year 2012, the company had purchased 0.2 ha community land for road construction.

Table 7 : Oil Palm Planted Area Summary, FFB Production and Average yield/ha for PT Tania Selatan

Estate Name Total area

(ha)

Oil Palm Planted area

(ha)

Mature (Production)

area (ha)

Immature (Non-production)

area (ha)

FFB Production

(tonnes)

Average yield

(tonnes/ ha)*

Burnai Timur 2,771.19 2,677.84 2,652.74 25.10 55,567.23 20.95

Burnai Barat 1,294.53 951.53 937.28 14.25 15,600.90 16,64

TOTAL 4,065.72 3,629.37 3,590.02 39.35 71,168.13 18.75

Note : *) Data from January to December 2012

Table 8: Other land use data for PT Tania Selatan

Estate Name Total area

(ha)

Oil Palm Planted

Area (ha)

HCV/ Land used for other purposes (ha)

Potential

HCV ar-eas (ha)

Office,

Housing & Road

Nursery

Other Land

(Non Planta-ble)

Burnai Timur 2,771.19 2,677.84 0.30 54.96 6.44 32.09*

Burnai Barat 1,306.80 951.53 314.67 22.10 5.00 13.5

TOTAL 4,077.99 3,629.37 314.97 77.06 11.44 45.59

Note : *). Include POM area is 13.11 ha

1.10 Progress against Time Bound Plan

Table 9: Time Bound Plan of the Other Management Units (Mill)

Name of Holding Location

Time bound plan

for certifi-cation

Remarks

PT Perkebunan Milano North Sumatra 2009 Certified, 3rd

surveillance au-dit completed

PT Mustika Sembuluh Central Kali-

mantan

2009 Certified, 3rd surveillance au-

dit completed

PT Kencana Sawit Indonesia West Sumatra. 2010 Certified, 2nd

surveillance au-dit complete

PT Kerry Sawit Indonesia Central Kali-mantan

2010 Certified, 1st




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Name of Holding Location

Time

bound plan

for certifi-

cation

Remarks

PT Tania Selatan South Sumatra 2010 Certified, 2nd


PT AMP Plantation West Sumatra 2011 Certified

PT Primatama Muliajaya West Sumatra 2011 Certified

PT Agro Nusa Investama (Sambas) West Kaliman-tan

2012 Planned

PT Buluh Cawang Plantations (in-clude Bambu Kuning estate (PT Tania Selatan))

South Sumatra 2012 Main Assessment completed

PT Bumi Sawit Kencana Central Kali-mantan

2012 Planned

PT Gersindo Minang Plantations West Sumatra 2012 Main Assessment completed

PT Sarana Titian Permata Central Kali-mantan

2012 Finished for main audit in June 2012

PT Citra Riau Sarana Riau 2013 Planned

PT Daya Labuhan Indah North Sumatra 2013 Main Assessment completed

PT Mentaya Sawit Mas Central Kali-mantan

2013 Planned

PT Sinarsiak Dianpermai Riau 2013 Planned

PT Permata Hijau Pasaman West Sumatra 2013 Planned

PT Mentaya Sawit Mas Central Kali-mantan

2013 Planned

PT Pratama Prosentindo West Kaliman-tan

2013 Planned

PT Putra Indotropical West Kaliman-tan

2013 Planned

PT Agro Nusa Investama (Landak) West Kaliman-tan

2014 Pre Assessment completed

PT Murini Sam Sam Riau 2014 Planned

PT Karunia Kencana Permaisejati Central Kali-mantan

2014 Planned

PT Daya Landak Plantation West Kaliman-tan

2013 Planned

PT Indoresins Putra Mandiri West Kaliman-tan

2013 Planned

PT Agro Palindo Sakti South Sumatra 2014 Planned

PT Musi Banyuasin Indah South Sumatra 2014 Planned

There are several changed on the company’s timebound plan due to some reason such as :

1. PT Bumi Sawit Kencana some social issue still not resolved and community still not agree with the compa-ny’s proposed Memorandum of Understanding regarding conflict resolution process according to RSPO cri-teria.

2. PT Sinarsiak Dian Permai, PT Daya Labuhan Indah-2, PT Citra Riau Sarana, PT Gersindo Minang Planta-tion, PT Mentaya Sawit Mas due to some social issue and land legality still not finished.



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3. PT Asiatic Persada has been sold to other company and not belong Wilmar International Plantation

1.11 Progress of associated smallholders or outgrowers towards RSPO Compliance

Burnai Timur mill has 5 (five) scheme smallholders and 20 (twenty) Independent outgrowers that supplied FFB to their mill. All scheme smallholders have permanent contract with Burnai Timur mill but all independent outgrowers have not permanent contract with Burnai Timur mill. Free trade market is now applied for all independent out-growers that supplied for Burnai Timur mill. Meeting of smallholder between auditee with smallholder (cooperation unit) conducted dated on September 19, 2013. The results of the meeting informed that the auditee has not agreed with smallholder related benefits to be received by smallholder and operational cost of certification (prepa-ration, implementation and follow-up).

1.12 Compliance to Rules for Partial Certification

Compliance of the uncertified management units of Wilmar Plantation Limited against the rules for partial certifi-cation according to RSPO Certification System clause 4.2.4 was assessed through document check for all com-pany’s self assessment report for uncertified unit. A summary of findings is as stated below.

Partial Certification Requirements Audit Findings

(a) The parent organization or one of its majority owned and / or managed subsidiaries is a member of RSPO.

Wilmar International Indonesia is RSPO member with membership number 2-0017-05-000-00.

(b-d) A challenging time-bound plan for certifying all its relevant entities is submitted to the Certification Body (CB) during the first certification audit. The time-bound plan should contain a list of subsidiaries, estates and mills.

Any revision to the time-bound plan or to the circum-stances of the company shall cause the plan to be reviewed. for whether it is still appropriate, such that changes to the time-bound plan are permitted only where the organisation can demonstrate that they are justified

See table above, some changes on company’s time bound plan due to several reason explained above.

(e) No replacement of primary forest or any area identified as containing High Conservation Values (HCVs) or required to maintain or enhance HCVs in accordance with RSPO criterion 7.3. Any new plant-ings since January 1st 2010 must comply with the RSPO New Plantings Procedure

There is some new development plantation under Wilmar Indonesia such as in Jambi and West Ka-limantan. None of new plantation area replace of primary forest. Wilmar has been following RSPO New Planting Procedure (NPP) for new plantation areas such as PT Agrindo Indah persada Jambi by TUV rheinland Indonesia, in year 2012 the NPP report was submitted to RSPO and approved by RSPO Executive and PT Agri Nusa Indah West Kalimantan by PT Mutugung Lestari in year 2012.

(f) Land conflicts, if any, are being resolved through a mutually agreed process, e.g. RSPO Grievance procedure or Dispute Settlement Facility, in accord-ance with RSPO criteria 6.4, 7.5 and 7.6.

Update information that PT Asiatic Persada has been sold to other company and not belong Wilmar International Plantation.

(g) Labour disputes, if any, are being resolved through a mutually agreed process, in accordance with RSPO criterion 6.3.

In 2nd surveillance audit, labour conflict in Tania Selatan has been completed because “Bonus” has been distributed.

(h) Legal non-compliance, if any, are being resolved in accordance with the legal requirements, with ref-

Some of Wilmar’s other management units have not complied with certain legal requirements, for example in Sarana Titian Permai, Kerry Sawit In-



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Partial Certification Requirements Audit Findings

erence to RSPO criteria 2.1 and 2.2. donesia estate under another Wilmar International management unit, there is an issue with the land area stated in the land use right certificate (HGU). However, the company is taking action by inviting the National Land Agency (BPN) to remeasure the land and resolve the issue. The process is still on-going.

1.13 Approximate Tonnages Certified

The approximate tonnages certified shall be the same as per the original certificate, which is as follows Crude Palm Oil (CPO) : 13,700 tonnes Palm Kernel (PK) : 3,100 tonnes



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2.0 ASSESSMENT PROCESS

2.1 Certification Body TUV Rheinland Malaysia Sdn. Bhd. 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 490 locations in 62 countries on all five continents. TUV Rheinland Malaysia 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 Validations and Verifications. TUV Rheinland Malaysia’s office is lo-cated in Subang Jaya, Malaysia.

2.2 Qualifications of Lead Assessor and Assessment Team The assessment team members of this surveillance audit that were part of the same assessment team for the certification audit are as follows: 1) Hendra Fachrurozy New assessment team members that were not part of the previous assessment team are as per the table be-low:

Name Position Qualifications / Experience

Irpan Kadir Auditor

Education: Sarjana Pertanian, Jurusan Sosial dan Ekonomi Pertanian Institute Pertanian Bogor. Trainings attended: Pelatihan untuk asesor Pengelolaan Hutan Produksi Alam Lestari – PHAP, (Mei 2003); pelatihan asesor Pengelolaan Hutan Tanaman Les-tari (Augutus 2003). Pelatihan auditor ISPO bulan Maret 2012 dll. Working experience: 3 tahun pengalaman sebagai auditor PT TUV Rheinland Indonesia dalam sertifikasi PHPL, PHTL dan RSPO. Pengalaman dalam melakukan pemetaan social untuk perusahaan pertambangan dan kehutanan. 7 tahun sebagai peneliti senior dan pelatih untuk program CSR di PT CSR Indo-nesia.

Aswan Hasibuan Auditor

Education: Bachelor of Indudstrial Engineering, University of North Sumatera. Trainings attended: ISO 9000:2000 Series Auditor / Lead Auditor Training - PE International (Jakarta), IEMA Advanced EMS Auditor (IEMA / EARA ISO 14001) Auditor / Lead Auditor Training Course - PE International (Jakarta), OHSAS 18001 Lead Auditor Training Course - PE International (Jakarta). Working experience: Experienced in Quality Control from 1994-2004. Auditor for Quality Management System since 2004 – present. Auditor for Environmental Management System since 2005 – present. Auditor for OHSAS 18001 since 2007 - present. Conduct-ed over 100 Quality Management System audits since 2004, over 50 Environ-mental Management System audits since 2006 , and over 25 OHSAS audits since 2007

2.3 Assessment Methodology & Agenda The surveillance assessment was conducted between April 08th to 11th , 2013 as per the assessment program below. The assessment was carried out in accordance with TUV Rheinland Malaysia’s RSPO audit procedure as well as the RSPO Certification Systems document. During assessment, the qualified TUV Rheinland asses-sors 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 possible to carry out both field and document assessments of all estates and the mill within the time frame without com-promising the integrity of the assessment in anyway.



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All 2 estates and 1 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 evidence 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 cer-tification body 30 days after the closing meeting. Verification of closure of major non-conformances was con-ducted 2 months after the closing meeting of the surveillance audit and implementation of corrective actions for minor non-conformities will be verified during the next suriveillance audit. The surveillance assessment agenda is as explained below. 2nd Surveillance Assessment Agenda.

Date Location/

Main sites Main activities

April 08 , 2013

Burnai Timur estate

Opening Meeting Verification of main audit findings

April 09 , 2013

Burnai Timur Estate

Site visit: HCV Monitoring Best practice for plantation Occupational Health and Safety Legal land issue Housing area in Burnai Timur estate Interviews with harvestors and manurers Workshop, chemical and fertilizer store, barn owl box (block 07), temporary haz-ardous waste store, land application area (block 12), estate clinic Visited Muara Burnai village.

April 10 , 2013

Burnai Timur Mill

SCCS audit

Burnai Barat Estate

HCV monitoring plan Land conflict verification Best practice for plantation Occupational Health and Safety Legal land issue Housing area in Burnai Barat estate Interviews with harvestors and manurers Workshop, chemical and fertilizer store, temporary hazardous waste store, hous-ing, landfill, estate clinic Interview with Suhaemi Famili in Tanjung Lubuk Village Interview with villager in Ulak Kapal village

April 11 , 2013

Burnai Timur Mill

Mill security post, loading ramp, engine room, central workshop and mill work-shop, hazardous waste store Interviews with engine room operators, central workshop operators

Burnai Timur estate

Preparation or closing meeting Closing Meeting and present findings



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3.0 ASSESSMENT FINDINGS

3.1 Summary of Findings The following is a summary of findings during this surveillance audit for the criteria listed in the RSPO Princi-ples & Criteria Indonesian National Interpretation year 2008. This audit generate 5 Nonconformities Major and 2 Nonconformities Minor against RSPO Principles & Criteria Indonesian National Interpretation year 2008 and 2 non conformity against SCCs.

• RSPO P&C

Principle 1: Commitment to transparency

Criteria assessed: CR1.1, Criteria not assessed: CR 1.2

Findings: Companies keep records of requests and responses for information from stakeholders. There is a log book documents the external incoming letter and outgoing mail from external stakeholders that a com-pany's response to requests for information/donation/external complaints. Check the log book of the external incoming letter, most are letter applications for assistance.

Company still implement consistently SOP about records control no doc: PRO-GEN-002, REV 02, is-sued January 2009 about retention time for records keeping is at least for 3 years for administration ar-chive where the request of information and the responses are included except financial and accounting records for which the retention time is 10 years.. Compliance status: Full Compliance

Principle 2: Compliance with applicable laws and regulations

Criteria assessed: CR2.1, CR2.2, CR2.3 Criteria not assessed:

Findings:

Company’s standard operation procedure for periodic evaluation of their compliances to all applicable le-gal and other requirements still applicable, as stated on procedure dated January 1, 2009 "Compliance Requirements / Obligations (Compliance) On Law and Legislation”. The company’s Department of Com-munity Development and Environment, Health & Safety (EHS) Department is responsible to evaluate company’s compliances to all applicable legal and other requirements. The company also has a proce-dure for "Identification and Evaluation of Aspects of Applicable Laws and Regulations" dated January 1, 2012. As stated on the procedure evaluation of compliances to legal and other requirement will be con-ducted once a year.

The company maintains a list of all applicable legal requirements relating to environmental, occupational safety and health, company plantation, and employment (FRM-GEN-022 Rev.04, effective since January 26, 2012) as well as records of internal compliance checks to legal requirements, example : the fulfillment of labor regulations, the company has been updating and implementing decision of the Governor of South Sumatera No. 825/KPTS/DISNAKERTRANS/2011 on provincial minimum wage where the company also submitted documents of employment required report (in accordance Law No. 7 of 1981) in February 2013. However there are still found that company still not comply with several legal compliances this is raised as non conformities (NCR No. 2013-01 of 07), such as : - there is no evident for evaluation or monitoring Social Impact Assessment (point 6,7 and 8 of

UPL/UKL) as planned.



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The Burnai Timur estate and Bambu Kuning estate has cultivation right title (Hak Guna Usaha) based on decree of the Minister of State for Agrarian Affairs / Head of National Land Agency No. 21/HGU/BPN/95 with valid until December 31, 2029. Whereas the cultivation right title (Hak Guna Usaha) for Burnai Barat estate in-process where current condition that is :

• Burnai Barat has been received for location permit (extention time) i.e Decree Head of Ogan Komering Ilir District No. 63/KEP/III/2012 dated on February 06, 2012;

• The company submit letter (No. 238/TS-BM/Ext/X/2012 dated on October 24, 2012) to Head of Re-gional Office of the National Land Agency in South Sumatera Province about request of cadastral measurement amount of 1,300 Ha;

• Letter from Head of Regional Office of the National Land Agency in South Sumatera Province to the company about the notification of deficiencies requirement for request of cadastral measurement (sur-veying and mapping) amount of 1,300 Ha;

• The company submit letter (No. 08/TS-BM/Ext/I/2013 dated on January 25, 2013) and addition docu-ment to Head of Regional Office of the National Land Agency in South Sumatera Province about sub-mission of the document on deficiencies requirement for request of cadastral measurement (surveying and mapping) amount of 1,300 Ha;

Burnai Timur estate has been conducting visibly maintenance of boundary.

There are two cases of land issues in the East Burnai in Block 308 claims covering an area of 35 hec-tares and in Block 04, an area of 122 ha. Claimer is Pedamaran District residents. But until the 2nd sur-veillance, there was no further response from the claimer. On March 13, 2013, the Pedamaran District sent a letter to facilitate checking the claimed location. Dated March 20, 2013, the claimer with represent-atives the district government have checked the site and the results are still awaiting a decision from The OKI (Ogan Komering Ilir) Regents.

Procedures for completion of dispute / dispute of land use document-BNM PRO-005 effective from 20 April 2011.PT Tania Selatan also make flowchart on land settlement mechanismIf the company and the claimer does not result in a decision, then continued by asking for consideration of the OKI Regent.

There is no change in the company's recognition of the traditional rights of communities such as Lebak Lebung activities (an auction to take fish in the river) which takes place in HGU area. NCR No. 2013-01 of 07 Evaluation Report have been performed dan reported to government side, for period of 1st Semester and 2nd Semester year of 2012, but there is no evident for evaluation or monitoring Social Impact Assessment (point 6,7 and 8 of UPL/UKL) as planned. Compliance status : Not Compliance

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

Criteria assessed: CR3.1 Criteria not assessed: -

Findings :

Every year company revise their long term management plan for next coming 5 years period (2013-2018). The management plan including all company’s actvities, from operational activities in mill and estate, su-porting activities, environmental monitoirng, CSR including budget for each planned activities on this document consisting of company planning of Profit and Loss information from Total Revenue and Total Operating Cost, including information about Gross operating cost, Profit/loss before tax and profit and loss after tax.

Company made replanting program as stated on the table 6 above. Replanting program will be carried out only in Burnai Timur estate, since Burnai Barat plantation still consists of predominantly young palms. Due to analysis report from trend of production so auditee revised their replanting plan in Burnai Timur i.e will begin in year 2013 with total replanting area covering 331.43 ha (block 017, block 023, block 024, and



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block 031) for an area planted in year 1989. In year 2014 replanting will be carried out for total area of 330.42 ha (block 019, block 020, and block 029), while in year 2015 replanting will be in block 005, block 009, block 013, blcok 015, block 028, and block 030 with total area of 323.63 ha, year 2016 is 357.94 ha and year 2017 is 323.64 ha. The company applies for a 20-25 years rotation period for one cycle oil palm plantation depending on seed quality and plantation maintenance. The oldest palms in Burnei Timur es-tate are 20 years now and is still of high productivity, producing 20.9 tonnes of FFB per ha.

There is no significant change found during 2nd Surveillance audit. Compliance status: Full Compliance

Principle 4: Use of appropriate best practices by growers and millers

Criteria assessed : CR4.1, CR4.2, CR4.3, CR4.4, CR4.6, CR4.7, CR4.8

Criteria not assessed : CR4.5 Findings:

The company has a revised version of Wilmar’s Standard Operating Procedure (SOP) for Oil Palm dated 2011, as well as company specific SOPs for all mill and estate operations. Samples checks of conform-ance to the mill and estate SOPs were carried out. For example, documentation of mill FFB sorting and weighing are maintained in accordance with the mill’s SOP for sortation (SOP-MIL-002 dated 20 April 2010) and weighbridge operation (SOP-MIL-001). Both estates have company own SOPs as well as a general SOP for Wilmar group companies, named Standard Operating Procedure for Oil Palm 2011 (re-vised from 2007). There are inconsistence between procedure with implement in field for EFB application because procedure (SOP No. SOP-EST-013 Rev.01) not updated with Agricultural Circular No.24 as tech-nical advice/policy. This was raised as Non Conformities (NCR No.2013-02 of 07).

Leaf analysis results for sampled fields of Burnai Timur and Burnei Barat estates are also available and documented the fertilizer recommendations report for each respective estate. Effort to maintain and in-crease soil fertility the use of fertilizer (anorganic), land application of POME and the use of Empty Fruit Bunch (EFB). Records of the use of anorganic fertilizer was available such as recapitulation of the use fertilizer, schedule of manuring each block (include information of type of fertilizer, doses per tree, total fertilizer (estimate), date of realization, volume of realization fertilizer, area of implementation), material requisition & issue slip, material book, list of wage for daily employee-maintainance and evidence/slip of handover for hazardous waste (empty sack). On record of plan & realization fertilizer (Kieserite) year 2012 where has approved by FO, stated that block 016 (amount of trees is 1,820 trees and implement of fertility with dosage 0,3 kg/ha) already finished in November 2012 but based on record of fertilizer stock card (Kieserite) in Burnai Barat warehouse show that fertilizer carry out amount of 505 kg and then fol-lowed out amount of 41 Kg in December 2012. This was raised as Non Conformities (NCR No.2013-03

of 07).

Burnai Barat has a soil analysis report conducted by a consultant, Param Agricultural Soil Surveys Sdn. Bhd. dated August 2008, Soil map for Burnei Timur estate dated 29 December 2009 was also sighted. A semi-detailed soil map for Burnai Barat estate is available in the soil analysis report conducted by Param Agricultural Soil Surveys Sdn. Bhd. The soil survey reports for Burnai Timur and Burnai Barat estate shows that there are no steep areas.Burnai Timur estate consists mainly of flat to undulating land areas of 0-12% slope, while small areas of rolling land (12-24%) occur along the valley areas. All areas in Bur-nai Barat estate have less than 8% slope. Therefore management of plantings on steep land is not re-quired.

PT Tania Selatan has a monthly road maintenance programme for year 2012 and year 2013 (Jan-March) made by each estate manager as stated on the estate’s SOP for road maintenance which includes the budget for road maintenance activities for each estate, and records of actual road maintenance activities conducted such graveling, road service, and re-surfacing. The Assistant Road Superintendant is respon-sible for ensuring road maintenance activities are carried out according to plan. Records (daily activity heavy equipment dated on 1-2 March 2013) of actual road maintenance activities conducted shows that maintenance is regularly carried out.

Based on estate hydrology maps (data source ‘Shuttle Radar Topography Mission’ Tahun 2006) and in-formation from the UPL/UKL document of Burnei Barat estate, PT Tania Selatan estate are located adja-



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cent to 2 large rivers, which are Komering River (4km from Burnei Barat estate) and Ogan River (7km away). These rivers do not pass through the estate area, only several small rivers/drains pass within the estate and do not flow out. Burnai Barat estate has approximately 29% of land area covered with peat soil, however the company has not planted on these areas and has plans to conserve these as HCV are-as. The company developed a high conservation value (HCV) management plan for year 2012 and 2013 for the swampland area of Burnei Barat estate, which states that signboards will be placed at the swamp-land areas stating these are conservation areas where activities such as fishing with poison, and pollution of the area is not permitted. Such signboards put in place were sighted on-site. Based on visit to field, There are not carry out manuring near rivers and water bodies, and the estate has installed poles along the boundaries of swampland areas to indicate oil palm trees along the boundary of the swamp cannot be sprayed or applied with fertilizer.

The company has developed water gate (location : block 002 BC or X : 465093; Y : 9601800) to maintain water levels for peat land HCV in Burnei Barat estate during dry season. As such, in period of November 2012 – March 2013 that water level not over 75 cm from the top soil (required level only 50-75 cm). Based on the results of monitoring and burning land is there are not signs of potential of land fire.

The mill has data on mill water usage per tonne FFB for 2012 to 2013 (until March 2013), divided into process water usage per tonne FFB and domestic water usage per tonne FFB, and data is shown in graphical form for easy monitoring. Records for 2012 show that water usage for process has been main-tained at the average of 1.48 m3 per tonne FFB for the year, while for year 2013 (Jan-March 2013), aver-age water use was 1.19 m3 per tonne FFB, but showed slightly a decreasing trend. The mill conducts sampling of effluent BOD with tests conducted externally.

Sample results show that effluent BOD for land application is below 5000 pm, as required in the mill's land application permit.

Usage of chemical only by recommendation by Commision of Pesticide and Fertilizer Controller of Ko-mering Ilir District, as letter No. 521/548/Kompukpes/VII/2011 regarding Recommendation usage of Pes-ticide.

In accordance with the company’s SOP for washing of chemical containers (SOP-GEN-024 rev.02 effec-tive 20 April 2011), used chemical containers are triple rinsed and stored in a designated secure store. Records of amounts of containers stored are maintained, however, as sighted from records and viewed on-site, the company is reusing containers as flower pots and for uses such as containing water for mix-ing with cement, and this is also permited in the company’s SOP for washing chemical containers. As checked from the contractor’s license for collection of hazardous wastes, they are not permitted to collect chemical containers, and the company has not been able to locate a suitable contractor for collection. This has been raised as an observation that the company should avoid reusing chemical containers for such purposes. In the field found used fertilizer packaging left in Palm Crop Circle which againts SOP-GEN-013 regarding Storage of Pesticide and used Packaging. This was raised as Non Conformities (NCR No.2013-04 of 07).

The company still does not have a documented plan for reduction of WHO type 1A chemicals and para-quat, however there is evidence of efforts taken to reduce or eliminate the use of these chemicals. Sight-ed from records of chemical usage usage for both estates in year 2012 and 2013 and confirmed through interviews with chemical sprayers, the company is no longer using Gramoxone or any chemicals contain-ing paraquat, and no longer uses rat bait as management of rat pests is through biological treatment. Al-so sighted from chemical usage records, that there was some usage of the chemical

There is evidence of regular medical check-up conducted for sprayers and operators who apply chemi-cals. An internal physical check-up for hearing, nose and throat was conducted for all workers in 12 June 2012 by the company doctor for estate and mill workers, including urine tests for female sprayers to check for pregnancy.

External medical checks by Hyperkes (Company Hygiene and Occupational Health) Department for se-lected workers are also carried out for selected workers annually. The last Hyperkes medical check was done in June 12, 2012 for selected mill and estate workers, including cholinesterase tests and audiome-tri. The company’s latest occupational safety and health was last reviewed and dated September 2010 and still valid till the audit day.

The company maintains records of OHS trainings conducted, for example, training on SOPs for spraying and manuring for new workers, and emergency response procedures at the estate and mill ere sighted for examples : Training of First Aid in 6 Feb 2013 and 27 March 2013, attended by field auditor, field con-



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ductor in afdeling where trainer is Suprapti (as Company Nurse).

Estate field workers are provided with appropriate personel protectice equipment (PPE). As sighted dur-ing interviews with estates workers at Burnei Timur estate and Burnei Barat estate, harvestors wear safe-ty boots and safety helmets (except Burnet Barat estate, where young palms are still short, therefore there is no risk of being injured by falling FFB), manurers wear cloth masks, aprons, safety booth, cloth gloves and goggles. While there were no spraying activities conducted during time of audit, workers in-terviewed stated that PPE used by sprayers include rubber gloves, goggle, aprons, safety boots and masks. Sprayers and manurers at Burnei Barat estate have a designated washing area for their PPE and spraying equipment, and they store these at the chemical store. There is also washing area for sprayers and manurers at Burnei Timur estate to wash their PPE. In the mill, There is no available safety gloves in chemical dosing area of water treatment. This was raised as Non Conformities (NCR No.2013-05 of 07).

First aid kits are made available at various sites of Burnei Timur and Burnei Barat estate, including in the field , estate office, estate workshop, chemical store and fertilizer store.

Company only use well Trained Contractor for FFB transportation as contract no : 010/TS-BB/X/2012 be-tween PT Tania Selatan and Siti Maryam on 01 Oct 2012 and PT Jasuma Equator as Contract No: 001/SPK/BB-TS/I/2007.

Compliance status : Noncompliance

NCR No. 2013-02 of 07

SOP No. SOP-EST-013 Rev.01 regarding EFB application was inline with Agricultural Circular No.24

NCR No. 2013-03 of 07 Based on record of plan & realization fertilizer (Kieserite) year 2012 where has approved by FO, stated that block 016 (amount of trees is 1,820 trees and implement of fertility with dosage 0,3 kg/ha) already finished in November 2012 but based on record of stock fertilizer (Kieserite) in Burnai Barat warehouse show that fertilizer carry out amount of 505 kg and then followed out amount of 41 Kg in December 2012. NCR No. 2013-04 of 07 It found used fertilizer packaging left in Palm Crop Circle which againts SOP-GEN-013 regarding Storage of Pesticide and used Packaging NCR No. 2013-05 of 07 There is no available safety gloves in chemical dosing area of POM Water treatment

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

Criteria assessed: CR5.1, CR5.2, CR5.3, CR5.5, CR5.6

Criteria not assessed : CR5.4, Findings:

During the 2nd surveillanve assessment, there is no change that affected to company ability to fulfill RSPO principle and Criteria.

Evidence of submission of 6 mothly evaluation reporting (RPL/RKL semester 2 year 2012 PT Tania Se-latan on Januari 25th, 2013. to the local environmental department of Ogan Komering Ilir. The document includes information on physiology and geology of the estate, hydrology, soil, terrestrial and water biota and identification of environmental impacts and aspects of the estate pertaining to air quality, noise, wa-ter quality, and social and economic aspects, and also a plan for management and monitoring of envi-ronmental impacts..

The company has developed a HCV management and monitoring plan for their identified HCV area to ensure that conservation values of identified HCV areas are preserved, e.g. riparian buffer zones at rivers were established to prevent erosion, and the company will focus on monitoring the quality of watercours-es and plant vertiver grass to reduce erosion at river banks, as well as prohibit agrochemical application



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at all river banks, maintain clear boundary markings, planting Gelam trees (Melaleuca leucadendron), de-velop of water gate in near peat land and conduct regular patrol program (include monitoring of water level elevation and subsidence of peat). The company already improve their patrol programs, not only fo-cused on monitoring company's assets and illegal activities but also to monitor identified HCV areas and ensure no wildlife hunting is carried out. Enrichment planting activities of several wet land species inside the area still continuing. The company has taken actions to protect identified HCV areas or identified po-tential HCV areas. Company employees are prohibited from hunting and taking of fauna from the planta-tion and adjacent land. Posters and signs warning of the presence of protected species were produced, distributed and made visible in all PT Tania Selatan estates.

The company has been assigned environmental, health and safety (EHS) officer for all PT Tania Selatan as mr. Edward Pangaribuan and as Sectretary of OHS committee area to monitor and has been trained to improve their knowledge and competency about HCV management and monitoring activities.

The company provides separate bins for organic and inorganic wastes and housing, office and work sites and these are collected regularly and transported to separate landfills located within the estates, which are located away from housing and waterways and covered when full. And still well maintained.

Fiber and shell as production waste are used as material to produce renewable energy i.e. used for boiler operation. Monitoring of fiber and shell consumption are monitored every month. Fossil fuel consumption year 2012 in mill amount of 209,470 litter.

There is no evidence of fire for replanting. The company has a documented Emergency Response Pro-cedures (ERP) dated 20 April 2011, which include response for land burning. The company has records of fire extinguisher training conducted for security officers for 13 staff on 18 may 2011, fire simulation conducted at the mill on 7 May 2010, and training on usage of fire extinguishers on 22 harvesters on 9 February 2012, 4 sprayers, 35 manurers/maintenance workers on 8 March 2012 and year 2013 not con-ducted. Workers interviewed stated that the company has informed them that they are no permission to carry out any land burning. Fire extinguishers were sighted at relevant sites of the estates and mill and have records of pressure checks done attached to each unit. Burnei Barat estate was also sighted to have an emergency mobile water tank, which is filled.

Monitoring of pollution and emission quality of the sources identified is conducted periodically by an ac-credited laboratory it is reported perodically to local government. It was showed on 2nd semester year 2012 monitoring report, all parameter complied with government as well as emission standard from non moving sources, the opacity has been improved compared with condition during RSPO main audit result in year 2010.

Monitoring and analysis of POME which is conducted every month are within the legal standrad such as BOD > 5000 ppm, PH 6-9, etc. The methodology for POME management is complies with standard oper-ation procedure (PRO-MIIL-007) before it is applied to the plantation area. Compliance status: Full compliance

Principle 6: Responsible consideration of employees and of individuals and communities af-fected by growers and mills

Criteria assessed: CR6.1, CR6.2, CR6.3, CR6.4, CR6.5, CR6.6, CR6.7, CR6.8, CR6.9, CR6.10,

CR6.11

Criteria not assessed : Findings:

PT Tania Selatan has made RKL and RPL (Management and monitoring environmental aspect) report for semester I and II in 2012. Companies also made a report on Management and Monitoring Social Impact Program in 2012. Monitoring activities conducted on community economic development programs, the risk of accident and health, community perception, employment, marginalization minor groups, social con-flict, increase income, increase human resource capacity, strengthening the organization, change habits and environment. The document mentions the monitoring is done on a regular basis every month.

There are document fostering programs which use the form FRM plasma-EST-021, containing the schedule of training for members of the East Burnai Plasma Cooperation (KUD). Training materials are



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delivered among other criteria-quality crop harvest, pruning and fertilization. Training is done every month for 12 KUD and performed by rotation. Also obtained the attendance list of participants. Obtained confir-mation from head of KUD Tunggal Mulya on the implementation of these activities.

Communication and consultation procedure using SOP document No. PRO-BNM-012 revision 02 dated July 26, 2012. The company also has established public speaker teams responsible communication / consultation consisting of Community Development Officer, Bina Mitra (Foster Partner).

Written communication with external parties are documented in log book of external stakeholder incom-ing letter and reponse. Check the log book of the external incoming letter, most are letter applications for assistance. In addition, the company also communicate directly with the plasma as well as with communi-ty members through community development officer and Bina Mitra visits.

The company has a document which consist of stakeholders list No. FRM-GEN-033 dated March 2013. Stakeholder grouped into governments, universities and NGOs, mass media, civil society organizations, farmers' groups, unions, contractors and partners, suppliers FFB.

The Company has procedures for communication and consultation, and in practice, complaints, objec-tions, requests for information from the public or Plasma can be submitted through regular meetings, ask to community development officer, delivered directly to the estate or mill office, as well as through a sug-gestion box. As for employees, report complaints and objections discussed in the meeting of bipartite co-operation institution (LKS Bipartit), or report to the leader of the neighborhood in employee housing.

Covering an area of 157 hectares of land in the Burnai Barat Estate is still disputed by some claimer. Lat-est progress, the district government facilitated claimer Pedamaran with the company to check the loca-tion of land claimed.

Settlement of land claims made by first contacting the parties to know the history of the land. If true, the next company to negotiate with the claimer about compensation including the value of crops. Checking the documents of land claims settlement in 2012 covering an area of 3 hectares in Burnai Barat Estate, the company made agreement report, land ownership letter, proof of purchase of land, and the receipt of payment.

In response to the decision of the Governor of South Sumatera No. 825/KPTS/DISNAKERTRANS/2011 on provincial minimum wage, PT South Tania has issued an internal memorandum no 29/WIP-HRD/Int-XII/2011 on daily wages for Rp1.256.175 policy. Checks on employee paychecks, the company has paid the minimum wage of workers in accordance with the Rp50.247 per day. Confirmation to the mainte-nance worker at Blok 19 journeyman payment information is obtained by Rp50.247. For regular daily em-ployee, salary structure consists of: basic salary (basic salary, allowances years of service, wages in kind), allowances, cuts social security and withholding taxes.

As a reference work relationship (rights and obligations of both the company and employees), they have set Collective Labor Agreement (Perjanjian Kerja Bersama (PKB)). At Burnai Barat Estate, PKB has been agreed by both parties on April 9, 2013 and is valid until 2015. Confirmation to the workers, claimed they had seen and read the Collective Labor Agreement. They also said there are monthly dues for union members. Working contract with the loading & unloading labor union already expired since December 31th, 2011 (article 7), but no renewal contract till audit day. This was raised as Non Conformities (NCR No.2013-06 of 07).

Employees get facilities such as housing (222 units in East Burnai, 94 units in the West Burnai and 114 units in the Mill), clinics, places of worship, kindergartens, and sports facilities. Water and electricity is al-so provided by the company. Checking the water treatment plant and a water bath in employee housing in East Burnai, clean water can be used for bathing, washing and toilet needs. For children of employees, the company provides transportation to and from school elementary and junior high school that are out-side the estate.

The company has a policy of freedom for employees to organize. Employees choose to form Serikat Ker-ja Wilmar Indonesia (Labor Union of Wilmar Indonesia) while at Burnai Timur Estate they joined with KASBI (Kongres Aliansi Buruh Indonesia). Retrieved documents settlement agreement dated April 11, 2012 which discussed the case of payroll deductions and the minutes of the meeting on April 3, 2012 to discuss the demands of employee bonuses.

Companies still consistently implement policies related to minimum age of employees is 18 years. The company installed a sign board at the estate office related restrictions of child labor. Checks on payroll and Labor Mutation in 2013 document, there was not found workers aged less than 18 years.



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The company has a policy of employment and promotion opportunities are open to everyone without any discrimination. Interviews with employees found no complaints of discriminatory practices.

PT Tania Selatan both estate management and mill management still commit with their policy regarding prevention of sexual harassment and violence agains woman. The company is able to demonstrate their commitment to protect woman reproductive right. Retrieved documents gender work program for 2013 and documentation of the implementation of gender committees perform informing about sexual harass-ment.

Company allow woman worker to take maternity leave and give sufficient time during breastfeeding. The company is not allowing breastfeeding woman working as chemical sprayer or manuring.

Currently the company does purchase FFB from external suppliers, so the company did inform the FFB price to the supplier, or make FFB pricing mechanism. FFB pricing has documented by mill. Based on interview that there are no complaints received from suppliers and KUD regarding payment from the company. As informed by supplier through interview, the company has been consistently making timely payment.

In the mill, there is driver truck for FFB police no BG 9245 K, inisial name N, tranporter from SP5 only hold SIM A (driving Licence type A), while his vehicle required SIM B Umum (Driving licence type B General) as mandatory. This was raised as Non Conformities (NCR No. 2013-07 of 07).

Company's contribution to local development channeled through activities such as community economic development in the village Pedamaran 6, Sinar Harapan Mulya, Sari Mukti, Gadung rejo. In addition the company also contributed in the form of donations and loans heavy equipment. Do check the eel breed-ing program at Hope Village Mulya. The program does not continue because the participants do not have the technical capability Compliance status : Non Compliance

NCR No. 2013-06 of 07 Working contract with loading & unloading labor Union already expired since December 31th, 2011, but no renewal contract till audit day. NCR No. 2013-07 of 07 Driver truck for FFB police no BG 9245 K, inisial name N, tranporter from SP5 only hold SIM A (driving Li-cence type A), while his vehicle required SIM B Umum (Driving licence type B General) as mandatory.

Principle 7: Responsible development of new plantings

Criteria assessed: CR7.1, CR7.2, CR7.3, CR7.4, CR7.7 Criteria not assessed: CR7.5, CR7.6,

Findings:

Principle 7 only applies to Burnai Barat estate but not Burnai Timur estate, which has not carried out any new plantings. While the total HGU area of Burnei Timur estate has increased by 2.0 ha (until March 2013) where this additional land area was previously under ownership of the local communities who had already planted this area with oil palm then sold the area to the company, and reduce by 10.0 ha (Mr H.Ali’s area) because one of the results of resolution conflict. The company has since only received the HGUs for the two land areas in 2011 and 2010 respectively, but as there was no new planting of these areas at Burnei Timur, Principle 7 does not apply to this estate.

A documented social impact assessment (SIA) and environmental impact assessment (AMDAL) docu-ment that includes the expansion of existing areas and plantations of Tania Selatan is available. Burnai Barat and Burnai Timur estate has documented UPL/UKL document approved by the local environmental department of Ogan Komering Ilir District. The document includes information on physiology and geology of the estate, hydrology, soil, terrestrial and water biota and identification of environmental impacts and aspects of the estate pertaining to air quality, noise, water quality, and social and economic aspects, and also a plan for management and monitoring of environmental impacts. The companies also made a re-



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port on Management and Monitoring Social Impact Program in 2012. Monitoring activities conducted on community economic development programs, the risk of accident and health, community perception, em-ployment, marginalization minor groups, social conflict, increase income, increase human resource ca-pacity, strengthening the organization, change habits and environment. Detail information about SIA has descripted on Criterion 6.1.

Information on Burnei Barat’s topography, climate, soil type, soil fertility, water table depth and drainage are available in the UPL/UKL document of the estate.

New plantings in Burnai Barat estate have not replaced primary forest or HCV areas as new plantings were done in ex-farmlands (non-forested land) that were purchased from local communities. It was veri-fied from the UPL/UKL document of Burnei Barat estate approved March 2008 that the estate area was previously secondary forest and bushes, and some area consists of swamp forest area. Burnei Barat only planted oil palm in area where there are no swamp areas, and these are set aside as HCV areas.

A semi-detailed soil map for Burnai Barat estate identifying marginal and fragile soils is available in the soil analysis report conducted by Param Agricultural Soil Surveys Sdn. Bhd., which states that the estate soils are of low to moderate fertility.

At Burnai Barat estate, there are no plantings on areas with peat soils (Gondang series soils) and only limited plantings on wetland areas (Binjai series soils). Most of the planted areas of the estate are those areas of the Terap series which are soils of low fertility, and the estate's soil analysis report includes rec-ommendations to have a good fertilizer programme, monitor and mitigate soil erosion through cover crop establishment, terracing and application of EFB as well as frond stacking. The estate has implemented all these best practices in the management of their planted areas (except application of EFB, and the estate is a far distance away from the mill).

As described under CR5.5 above, there is no evidence of fire for replanting. Land clearing of the newly planted area of 12 ha in year 2011 at Burnei Barat estate was done by manual slashing of shrubs by company’s workers, and this was confirmed through interviews with the company’s workers. Compliance status: Full Compliance

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

Criteria assessed: CR8.1

Criteria not assessed: - Findings: Tania Selatan estate has an environmental management and monitoring plan as per their UPL & UKL document which includes requirements to monitor water quality and biota, and dryness and land burn-ing as well as social aspects such as work opportunities and increase in income, increase in road traf-fic, community perception. In addition, although the company still does not have a documented plan for reduction of WHO type 1A chemicals and paraquat, however there is evidence of efforts taken to reduce or eliminate the use of these chemicals. Sighted from records of chemical usage usage for both estates in year 2011 and 2012 and confirmed through interviews with chemical sprayers, the company is no longer using Gra-moxone or any chemicals containing paraquat, and no longer uses rat bait as management of rat pests is through biological treatment. Also sighted from chemical usage records, that there was some usage of the chemical Cymbush (a.i. cypermethrin, which is a WHO Type 1b chemical used for treatment of caterpillar pests in the nursery in year 2010 at Burnei Timur estate), and significant reduction in usage of Cymbush in year 2011 (only 9 November 2011 at Burnei Timur estate, while only 0.11 liters of chem-ical was used only in July and 0.1 litres used in October 2011 at Burnei Barat estate). In year 2012, there has been no usage of this chemical at both estates up to time of audit. Compliance status : Full Compliance



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• RSPO SCCS

1. Documented procedures

Findings:

There is a set of existing standard operation procedure since incoming FFB until product dispatch, while incoming order procedure is handled by trading department in Wilmar head Quarter. Company implement quality management system ISO 9001:2008 as a part of compliance to this standard company has to es-tablish complete and up to date standard operation procedure. Burnai Timur POM has defined SCC Model i.e Mass Balance (MB).

There are several existing standard operation procedure such as : - Incoming FFB procedure (PRO-Mill-001), - Production process procedure CPO & PK (PRO-MIL-002), - Delivery Order (DO) procedure (PRO-MIL-004), - Dispatch CPO & PK procedure (PRO-MIL-005 Rev.003), - Supplier evaluation procedure FFB (PRO-MIL-008) - Controling document and record procedure (PRO-GEN-002 Rev.004), - To inform the CB immediately if there is a projected overproduction procedure (PRO-MILL-012

Rev.00), - Traceability of CPO & PK product (PRO-MILL-013 Rev.00)

A set of production working instruction has been established such as : • SOP-MILL-001 Rev.03 issued on April 01, 2012 about weightbridge; • SOP-MIL-003 Rev.02 issued on April 20, 2011 about Loading Ramp; • SOP-MIL-004 issued on April 20, 2011 about Rebusan; • SOP-MIL-005 issued on April 20, 2011 about Capstand; • SOP-MIL006 issued on April 20, 2011 about Hoisting Crane; • SOP-MIL-007 issued on April 20, 2011 about Digester; • SOP-MIL-007 issued on April 20, 2011 about Theresing, • SOP-MIL-008 issued on April 20, 2011 about Digester, • SOP-MIL-009 issued on April 20, 2011 about Press, • SOP-MIL-010 issued on April 20, 2011 about Purifire; • SOP-MIL-011 issued on April 20, 2011 about Vacum Dryer, • SOP-MIL-012 issued on April 20, 2011 about Decanter; • SOP-MIL-014 issued on April 20, 2011 about Kernel Station, • SOP-MIL-015 issued on April 20, 2011 about Bolier, • SOP-MIL-016 issued on April 20, 2011 about Boiler Blowdown, • SOP-MIL-017 issued on April 20, 2011 about Genset, • SOP-MIL-018 issued on April 20, 2011 about Turbin uap, • SOP-MIL 019 issued on April 20, 2011 about WTP, • SOP MIll-020 issued on April 20, 2011 about Pompa Air, • SOP-MILL-44 Rev.03 issued on April 20, 2011 about purchasing FFB from third party/external sup-

plier; • SOP-MIL-047 issued on April 20, 2011 about Static Crane, • SOP-MILL-052 Rev.00 issued on April 01, 2012 about communication of certified product claim,

Based on decree letter No. 203/TS-TH/PKS-BT/VIII/2011 dated on August 13, 2011 that Mr Amir Ham-zah (employee number : 0705TS91126512) assign as Management Representative (MR) in Burnai Timur POM. He is replacing of Mr Hendra Gunawan position because he is mutation to other POM. MR having overall responsibility for and authority over the implementation of these requirements and compliance with all applicable requirements. Results of interview with MR that he can not demonstrate sufficient knowledge in implementing SCCS because he can not distinguish between the categories of FFB certi-fied with FFB non-certified. This condition was raised as Non Confomities (NCR SCCS No.2013-01 of 02).

Compliance status : Non Compliance



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NCR SCCS No. 2013-01 of 02

MR of Burnai Timur POM can not demonstrate sufficient knowledge in implementing SCCS because he can not distinguish between the categories of FFB certified with FFB non-certified

2. Purchasing and goods in

Findings :

Burnai Timur Palm Oil Mill has mechanism to receive FFB both from certified sources and non certified sources. The document to be verified from certified sources are: “Surat Pengantar Buah (FFB delivery note)” including wet stamp from the origin estate and certified code (include certificate number of origin estate) example FFB delivery note no.BB.000300 (dated on April 08, 2013) from Burnai Barat estate, FFB delivery note no.BT.019496 (dated on April 10, 2013) from Burnai Timur estate and some FFB delivery note from smallholder estate. During reception of FFB, the weigh bridge receives information about the certified status, which example records seen from Weightbridge (WB) slip No. 830101-83925 dated on April 10, 2013 (for FFB delivery note no.BB.000300 (dated on April 08, 2013) from Burnai Barat estate) and Weightbridge (WB) slip No. 83460-76933 dated on April 10, 2013 (for FFB delivery note no.BB. 019496 (dated on April 10, 2013) from Burnai Timur estate).

A person has been appointed to be responsible to check and ensure the FFB quality and quantity as per purchase documents.

When receiving RSPO certified palm, personnel in the material warehouse are to verify the claimed cate-gory of the material under mass balance system, supplier supply chain certification number, and quality and quantity of products

The company has mechanism to inform the Certification Body (CB) immediately if there is a projected overproduction (PRO-MILL-012 Rev.00). Compliance status : Full-compliance

3. Records Keeping

Findings:

The organization has established a mechanism for control and maintenance of the data and document used in production process following ISO 9011:2008 requirement i.e PRO-GEN-002 Rev.04 issued on April 01, 2012 where the retention time for all records and reports has defined for at least for five (5) years. The storage and maintainance of documents is the responsibility of the respective departments while there are different of information between mass balance document with weighbridge software about volume of received FFB for period of January 2013 so auditee not maintain accurate of information. This condition was raised as Non Confomities (NCR SCCS No.2013-02 of 02).

The mill has record and balance all receipts of RSPO certified FFB and deliveries of RSPO certified CPO & PK on daily basis. The material balance includes information about incoming FFB from company’s es-tate and outgrower, FFB produced, CPO result including OER, PK result including KER, product dispatch and balance product in the storage tank including the mass balance percentage.

All volumes of palm oil that are delivered are deducted from the material accounting system according to actual daily conversion ratios. The material balance can show deliver product sales from a positive stock.

The mill has indicated product name and supply chain model in Weighbridge slip, including information about RSPO certificate number, and Mass Balance for CPO and Palm Kernel product. The mill does not sale Palm Kernel Oil (PKO), and all Palm Kernel (PK) and CPO product from Palm Oil Mill (POM) were sold to PT Sinar Alam Permai – Palembang so there is not outsources activities to an independent palm kernel crush.



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Compliance status : Non Compliance

NCR SCCS No. 2013-02 of 02

there are different of information between mass balance document with weighbridge software about vol-ume of received FFB for period of January 2013 so auditee not maintain accurate of information.

4. Sales and Good Out

Findings :

The sales and goods out mechanism of the company is described in their procedure of sales of palm oil. Records of all sold RSPO certified materials are recorded in material balance sheet.

All product dispatched is to PT Sinar Alam Permai - Palembang, a refinary owned by Wilmar, and every certified product (CPO & PK) is delivered with Weight Bridge Slip (WBS). Information on WBS includes data about : reference number, date of issued, delivery order number, contract number, the name and ad-dress of the buyer, name of product, quantity of the product delivered, reference of transport used. On delivery document for certified product (CPO & PK) has indicated/identified a information i.e RSPO certifi-cate number, and supply chain model. Compliance status : Full Compliance

6. Training

Findings :

Burnai Timur estate has training procedure and annual training program for their employee. In year 2012, Burnai Timur POM has conducted SCCS training on date of March 30 and June 25, 2012 with training ev-idence such as list of particioant and training material. While on year 2013, Burnai Timur POM has been provided training program for Burnai Timur POM workers and other relevant staff where one of which i.e RSPO SCCS training. Compliance status: Full Compliance

7. Claims

Findings:

The company has specific SOP relating RSPO and SCC logo used and claim including communication with relevant parties. This procedure has reference from RSPO rules on market communication & claims (Nov, 2011). Compliance status : Full Compliance



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3.2 Status of Previously Identified Non-conformities

During 1st surveillance audit, a total of 12 nonconformances were identified for RSPO P&C. These consisted of 8 major non-conformities and 4 minor non-conformities. Whereas, total of nonconformance of RSPO SCCS is 9 non-conformities.

The following is a description of the evidence of action taken to close the non-conformities raised during the previous assessment, as well as auditor’s conclusions on the status of the non-conformities.

• RSPO P&C

Clause 4.2.3 (RSPO Certification System)

Non-conformance No. 2012-01 of 12

There is no evidence of company’s management plan for Burnei Timur Smallholder Scheme and outgrow-ers comply to RSPO P&C within 3 years after RSPO certificate issued, as require by RSPO Certification System

Corrections :

Made planning for RSPO certification Burnei Timur and Burnei Barat estate’s smallholder scheme and follow up action for each stage.

Corrective Action :

Ensuring implementation of RSPO certification plan for smallholder scheme as scheduled. Auditor Conclusions : Closed.

Verification result :

Auditee has management plan for smallholder scheme & outgrowers to comply RSPO certification where their activity such as socialitation, collacting inspiration from smallholder, government and stakeholder about smallholder program, identification of plant feasibility, identification of legality and ownership of land, identifi-cation of participation society, establishment and legality of cooperative, capacity building for personil in management cooperative, and comparative study to other smallholder cooperative.

Auditee has conducted last meting on February 19, 2013 about smallholder scheme with smallholder. Re-sults of meeting is has not obtained an agreement between the company and smallholder about the cost of preparation and execution of the certification where the smallholder do not have money for it. Based on in-terview with representative of sustainabilty department in Head Office that the company (group) is pro-cessing collaboration with funding agency/company related finance.

Criterion 2.1. (Major indicator 1) Evidence of compliance with relevant legal requirements.

Non-conformance 2012-02 of 12 (Major non-conformity)

There is no company’s plan that has been established to fulfill company’s responsibility to establish smalholder scheme in Burnei Barat Estate as required by Site Permit/Location PT Tania Selatan on Bupati Ogan Komering Ilir Decree Letter no. No. 53/Kep/III/2012 and Permentan No. 26 year 2007.

Correction :

1. Personnel meetings with community and their leader to discuss planning to make smallholder scheme.

2. Seek final agreement from community and their leaders

3. If development of agreement approved, company and community will make Work Programme (action plan).

Corrective Action:

Ensure that outlined activities stated in correction action is executed in accordance with the planning Auditor Conclusions : Closed Verification result :



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PT Tania Selatan provided the documented action plan for smallholder scheme establishment in Burnei Barat estate. The company provide records of minutes meeting between Tania Selatan management and representative from Ulak Kapal Village and Tanjung Baru on April 12, 2012 to discussed about possibility of smallholder scheme in Burnai Barat estate as stated on approved location permit. The meeting was at-tended by 16 people from Burnai barat estate management, Public Relation Wilmar, head of village from Tanjung Baru, Ulak Kapal, witnessed by Head of Sub District Tanjung Lubuk. There is also list of participant record provided as evidence that the meeting had been conducted. The 1st meeting result is 50% villagers agree to make smallholder scheme and the rest still not agree. The participant agrees to make another meeting on May 2012 to follow up planning for smallholder scheme establishement but it is not conducting because not obtained an agreement and some of the villagers have no interest in the establishment of smallholder scheme from Tania Selatan.

In the minutes meeting dated on June 14, 2012 stated that villagers for temporary time not agree with this planning. The company provided photographs and attendance list (20 person) of meeting. This meeting was attended also by Head of village (Tanjung Baru and Ulak Kapal village) and community leaders. In March 2013, there are villagers in Ulak Kapal village agree with establishment of smallholder scheme.



No evidence that company submitted their plantation development report to Bupati Ogan Komering Ilir every 3 months as required by Document of Location Permit Extention No. 53/Kep/III/2012 issued on March 2011 and Permentan No. 26 year 2007.

Correction :

The plantation development report has been submitted to Bupati Ogan Komering Ilir

Corrective action :

• Internal communication and coordination between the person-in-charge in Plantation and Community Partners more effectively

• Ensure the plantation development report will be sent to the Bupati Ogan Komering Ilir every 3 months. Auditor Conclusions: Closed


Company provides evidence i.e. letter of submission report of plantation development no. 01/TS-BM/Ext/IV/2012 and transmittal note dated April 12, 2012. The letter was received by officer from Head of Ogan Komering District. This letter showed that company already fulfill requirement from Bupati Ogan Ko-mering Ilir District. Other month, auditee has submission report of plantation development (Burnai Barat and Burnai Timur estate) for period November 2012 and those report has received by plantation instance of Og-an Komering Ilir District on December 20, 2012.

Criterion 2.1.(Major indicator 1) Evidence of compliance with relevant legal requirements.


Soil quality analysis for land application location still not conducted properly as required by Land Application permit No. 660.1/14/KEP/BPLH.ESDM/2007 and not reported regularly to BLHD Ogan Komering Ilir District.

Corrections :

1. LA analyzing for quality of soil on the test point that has not been done before to complete the require-ments of the Decree permits no. No LA. 660.1/14/KEP/BPLH.ESDM/2007.

2. Completing all of the data analysis of soil quality in accordance with the terms and LA and reported to BLHD

Corrective action:



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1. Conduct analysis of soil quality in accordance with the requirements of LA Permit for each year.

2. Improvements in planning and LA analysis of soil quality to enable communication with the BLHD for re-porting

Auditor Conclusions : Closed

Verification result : There is a letter issued by PT Tania Selatan regarding request of monitoring soil quality analysis result in land application area i.e. letter no. 097/TS-MM/PKS-BT/III-2012 to BLH officer South Sumatera Province dated March 26, 2012. The letter also asking BLHD to take water sample in control well at community hous-ing. Company asking to monitor all required parameter as tested on land application permit.

There is a letter about confirmation that Local Environmental Officer Laboratory will take sample for required environmental parameter as stated on Land Application permit No. 660.1/14/KEP/BPLH.ESDM/2007 both for soil analysis and control well. The analysis of results has available/issued and appropriate requirement so auditee has submited report to BLHD Ogan Komering Ilir District.

Criterion 4.3. (Minor indicator 4) Subsidence of peat soils should be minimised under an effective and documented water management programme

Non-conformance 2012-05 of 12 (Minor non-conformity

There is no mechanismin to maintain water level for peat land HCV in Burnei Barat estate during dry season in September 2011 water level sight in level 193 cm from the top soil (required level only 50-75 cm), this condition caused land burning on September 2011 during dry season

Correction :

Mechanism to maintain the water level in HCV peat lands in the Burnai Barat Estate done by : 1. Monitoring of water level elevation 2. Make the water gate, and 3. Conservation trees planting at the site

Corrective action :

Implement control and monitoring mechanisms that maintain the water level and evaluate its effectiveness Auditor Conclusions: Closed Verification result :

Watergate has finished build and auditee has been monitoring water level where period November 2012 – March 2013 that water level in gate not over 75 cm from top soil (condition water level on last few month is 0 cm from top soil). There are monitoring activity and conservation activity around HCV peatland. Monitoring on progress.

Criterion 4.7. (Minor indicator 6) Evidence of OHS and first aid equipments available at worksites

Non-conformance 2012-06 of 12 (Minor non-conformity)

A pollinator was found not wearing proper gloves during insecticide spraying process of bunches when he did bunch covering process in Dura Block Plantation 103.

Correction:

Give warning to pollinators who not use a hand glove as well as monitoring implementation of appropriate use of PPE for all pollinators

Corrective action:

Communicating of the importance of using PPE to all pollinator, and always ensure the completeness of PPE for all workers.



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Auditor Conclusions : Closed


All pollinator have been equipped by hand gloves and other PPE, their working area completed by sign board.

Criterion 4.7. (Minor indicator 6) Evidence of OHS and first aid equipments available at worksites


There is a washing area for sprayers and manurers at Burnei Timur estate to wash their PPE, however the workers take their washed PPE home as there is no designated store for storage of PPE

Correction:

Make sufficient PPE storage room for sprayer

Corrective action :

Ensuring all sprayer store their PPE in provided storage room and ensure that no more sprayer bring PPE and their used clothes to their home. Auditor Conclusions: Closed

Verification result;

PT Tania Selatan already provides storage room for PPE, in each estate to keep PPE taken home by spray-er.

Criterion 5.1. (Major indicator 2) Records of regular report on environmental management in ac-cordance with relevant regulations.


Burnei Barat estate has not prepared any report to the local government on their implementation of the UPL/UKL which is required to be done once every 6 months.

Correction:

Make UKL/UPL report and send it to local government (BLHD) as required.

Corrective action:

Define schedule to make UKL/UPL report every year and ensure the report is sent to local government on schedule(BLHD).

Auditor Conclusions: Closed. Verification result;

PT Tania Selatan provides UKL/UPL report for Burnai Barat estate for period semester 2 year 2011 (July to December 2011). There is also transmittal note evidence to Balai Lingkungan Hidup Daerah (BLHD) Ogan Komering Ilir District dated April 11, 2012.

Criterion 5.2. (Major indicator 2) If, rare, threatened or endangered species, or high conservation value habitats are present, appropriate measures to preserve them are to be taken.


The existing HCV management and monitoring program is still not sufficient to protect HCV area peatland from land burning cases, as what occured on September 2011.

Correction:

To avoid fires in the peat soil HCV management and monitoring through implementation of the program 1. Monitoring of water level elevation



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2. Monitoring of subsidence of peat 3. Making water gate

Corrective action:

Control and monitoring the program and evaluate its effectiveness Auditor Conclusions : Closed

PT Tania Selatan provide new HCV management and monitoring program especially for peat land area, there is several records of communication to communities, workers and their family regarding HCV man-agement and monitoring program to improve level of awareness from local people to protect HCV area.

There are 10 program planned by Burnei Barat estate i.e : 1.Water level monitoring 2. Enrichment planning with hardwood species in surrounding HCV area 3. Monitoring of existing wild live 4. provide signboard in front HCV area 5. Improve awareness of companie staff, workers and relevant stakeholder 6. Training about fire protection for company’s staff and relevant parties 7. Water gate construction 8. Piscall meter installation 9. Drainage system 10. Subsidence monitoring and water level control

Realization from program above is watergate has finished build, conducting monitoring of water level and subsidence, enrichment with Gelam tree (Meulaleuca leucadendron) in surrounding HCV area, installation signboard infront of HCV area,

Criterion 5.3 (Major indicator 1) All waste and pollutions sources are identified and documented.


Waste water from fungicide in seed production room was disposed to the land without specific treatment.

Correction :

Make waste water room for used fungicide before being re-used.

Corrective action :

Ensuring all waste water from fungicide waste treated through collecting in waste water storage before re-used.

Auditor Conclusions: Closed Verification result :

The company provided photographs of water storage method including pipe channel from washing area to used water storage. Implementation as stated in correcetive action.

Criterion 6.1.1 (Minor Indicator 1): Regular monitoring and management of social impact, with the participation of local communities

Non-conformance 2012-11 of 12 (Raised to Major non-conformity from previous audit)

There is no evidence that social impact management and monitoring plan has been made through participa-tory method in Burnei Timur Estate and there is no monitoring activity for social impact monitoring program.

Document of social impact management and monitoring plan (which is made with participatory method) is not available on Burnai Barat estate office. Correction:

1. Monitoring and managing the social impact program through participatory involvement in accordance with the plan of management of social programs in the Burnai Timur Estate had been identified.



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2. Determining a fixed schedule in the management and monitoring of social impacts program to involve participants at Burnai Barat Estate.

Corrective Action:

To evaluate the effectiveness of the implementation of social impact monitoring program on Burnai Timur and Burnai Barat Estate. Auditor Conclusions: Closed

Verification result:

There is a record of revised social impact management and monitoring plan including evidence of participa-tion from local communities such as sign agreement from Muara Burnei village representative and Purwoasri village representative.

A social impact management and monitoring plan for Burnei Barat estate was also prepared with participa-tion by local communities such as representatives from Ulak kapal village and Tanjung Baru village.

Criterion 8.1. (Major indicator 1) A monitoring action plan based on the social environmental im-pact assessment, and regular evaluations of plantation and mill operations. As a minimum, these

must include, but not necessarily be limited to: • Reduction in use of certain chemicals (criterion 4.6). • Environmental impacts (criterion 5.1). • Waste reduction (criterion 5.3).

• Pollution and emissions (criterion 5.6). • Social impacts (6.1).


There is no correction and corrective action for HCV area land burning (peat area) in Burnei Barat estate.

Correction:

Review correction and corrective action taken to anticipate fire in HCV areas through: - Construction of water gates - Planting conservation trees species in HCV area.

Corrective action:

Ensuring correction taken through evaluate the effectiveness of action taken to prevent problem reoccurring such as fire in HCV area. Auditor Conclusions: Closed


There are photographs of water gate construction and enrichment planting with hardwood species, as well as company provide new HCV management program as explained on NCR no. 2012-09 of 12 above. im-plementation is comply and good implemented.

• RSPO SCCS

SCCS Non-conformance 2012-01 of 09 :

BT mill has complete procedure for incoming FFB until finished good dispatch, however the procedures still not inform about handling for certified and non certified material/product including system to trace product from incoming FFB to outgoing product. The mill still not defined SCC model to be implemented. Correction :

Established traceability procedure for certified product and non certified product (since incoming CPO until CPO & PK dispatch). The mill manager issued statement regarding SCC model to be implemented as stat-ed on Memorandum of Mill head.



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Corrective Action :

The mill manager shall be responsible for checking and ensuring the implementation of existing procedure through records and report required every month. Auditor Conclusions: Closed.


The mill has new procedure for traceability certified product (PRO-MILL-013 Rev.00) since incoming mate-rial until product dispatch. The procedure explains about incoming FFB including relevant records and all format used for product dispatch and relevant contract/ purchase orders (PO) from buyer. SCCS Non-conformance 2012-02 of 09:

Burnai Timur mill have not decided the name of the person having overall responsibility for and authority over the implementation of these requirements and compliance with all applicable requirements. Correction :

Appoint and establish assignment decree letter for personnel who has responsibility and authority for SCC requirement implementation. Corrective Action :

Tracebility Supply Chain. Monitoring and ensuring implementation of defined responsibility and authority on SCC implementation

Auditor Conclusions: Closed Verification result :

Management Tania Selatan appoints Mr. Hendra Gunawan as person having overall responsibility for and authority over the implementation of SCC RSPO requirements. It is showed decree letter no. 002/PKS-TS/SKD-HRR/III/2012 signed by Wilmar Technical head Mr. Kamaludin dated on March 16, 2012. The let-ter inform about job description, authority and responsibility of Mr. Hendra Gunawan as SCC RSPO man-agement representative.

During audit, Mr Hendra Gunawan has replaced by Mr Amir Hamzah assign as Management Representa-tive (MR) in Burnai Timur POM (based on decree letter No. 203/TS-TH/PKS-BT/VIII/2011 dated on August 13, 2011. SCCS Non-conformance 2012-03 of 09 :

The company has no mechanism to inform the CB immediately if there is a projected overproduction Correction :

Procedure for incoming FFB and product dispatch has been revised to cover mechanism to inform the CB immediately if there is a projected overproduction

Corrective Action :

Ensuring that relevant person in charge makes overproduction report and inform to CB accordingly includ-ing received response from CB Auditor Conclusions : Closed


The company has revised procedure about incoming FFB (Pro-Mill-012 rev.0 dated April 01, 2012). The



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procedure explaining about mechanism to inform the CB immediately if there is a projected overproduction.

SCCS Non-conformance 2012-04 of 09:

The company has procedure for records control i.e PRO-GEN-002 issued on April 02, 2011 however the retention time for records keeping does not comply with RSPO SCCS requirement of 5 years, company on-ly state 1 year for the retention time. Correction :

Revise procedure PRO-GEN-002 regarding retention time for all SCCS product records at least 5 years.

Corrective Action :

Ensuring that all records and data available and well maintained until at least 5 years.

Auditor Conclusions: Closed Verification result:

The company provide revised records control procedure PRO-GEN-002 rev. 04 dated April 01, 2012 to cover SCC RSPO requirement about retention time for all SCC product records.


There is no balance record for palm kernel product dispatched Correction :

Established format to record mass balance for Palm Kernel starting since April 20, 2012. Corrective Action :

The mill manager shall be the responsible person to monitor and checking all implementation of SCCS re-quirement including mill standard operation procedure, and will ensure data accuracy and mass balance calculation every month.

Auditor Conclusions : Closed. Verification result :

The company has provide new format to record mass balance for PK data, PK production and dispatch since April 20, 2012.


Delivery document for Palm Kernel product still not indicate information about RSPO certificate number, and Mass Balance system.

Correction :

The mill revised the SOP require to put wet stamp (certified marking) in all delivery document both for certi-fied CPO and PK to inform about certificate number and supply chain model Corrective Action :

Ensuring all delivery documents for CPO and PK has certified marking.

Auditor Conclusions: Closed



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There are some records of delivery document such as Weigh bridge Slip, Delivery Order, cleaning tank statement, Vehicle control form has specific marking (i.e. certified marking) to inform about certified product status.


Weigh bridge sheet as product transport document does not indicate the buyer's address Correction :

Completing weigh bridge slip for CPO and PK with buyer information including buyer address. Auditor Conclusions: Closed


Buyer address has been stated on all delivery documents such as delivery document such as Weigh bridge Slip, Delivery Order, cleaning tank statement, and vehicle control form.


There is no training evidence for all staff that required to implement the requirements of the Supply Chain Certification Systems Correction :

Conduct SSC awareness training Mass balance system for relevant personnel Corective Action :

Include SCC awareness training program into mill annual training program in POM. Auditor Conclusions: Closed.

Date of closure: March 19, 2012


SCC training was conducted i.e. on March 30 and June 25 year 2012. All relevant operators attended the training as seen on training evidence such as list of participant and training material.


There is no specific SOP for making claims regarding the use of or support of RSPO certified oil palm product according RSPO communication and claims Correction :

Establish specific SOP for claim certified product according to RSPO communication and claim. Corrective Action :

The management representative will control and monitor the implementation of SOP for claim CSPO and CSPK product every month to ensure that all process and claim consistent with existing SOP. Auditor Conclusions : Closed.




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The company provides new procedure relating RSPO and SCC logo used and claim including communica-tion with relevant parties.

3.3 Identified Non-conformances, Corrective Actions Taken and Auditors Conclusions During 2nd surveillance audit, a total of 7 nonconformances were identified against RSPO P&C these consisted of 3 major non-conformities and 4 minor non-conformities and 2 nonconformties against RSPO SCCS. For the major non-conformances, the company has taken the necessary corrective action to close these non-conformances within 60 days of completion of the assessment, and this was verified by the audit team through documents submitted by the company. For the minor non-conformances, the company has taken corrective ac-tion against these as well, and for those which could not be verified as closed through document checks, the closure 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 :

• RSPO P&C



Evaluation Report have been performed dan reported to government side, for period of 1st Semester and 2nd Semester year of 2012, but there is no evident for evaluation or monitoring Social Impact Assessment (point 6,7 and 8 of UPL/UKL) as planned.

Correction :

To complete the report the unsufficient report content and submit the new report to government side. Corrective Action:

1. Re educate reporting PIC for more carefull in reporting 2. To ensure that report of environment evaluation and monitoring following definitive matrix of report-

ing.


Date of closure: June 12th

, 2013


Company already revised Environment Monitoring and Evaluation and submitted the new report to district office. Sosial issue will be part of evaluation and controlled by Tabel of Social Minitoring.

Implementation of these corrective action will be verified in next audit.

Principle 4.1. (Minor indicator 1) Records of checking or monitoring of operations


In report of Plan and Realization Fertilizing of Kiesirite year 2012 approved by FO, for Block 016 stated that already done in November 2012 while actual data of Goods Issued Note in warehouse shows that on-ly 505 kg Kiesirite issued during November and 41 Kg in December. Correction :

To revised any wrong data regarding realization of fertilizer Kieserite year 2012, as per actual data goods issued notes.



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Corrective Action :

1. To ensure PIC for recording usage of fertilizer to be more carefull while recording. 2. To ensure all the report of fertilizing ctivity will be recheck before submitted to FO 3. To ensure the authorized PIC to check before sign Auditor Conclusions: Closed with observation Date of closure: June 12th, 2013


Realization of fertilizer “Kieserit” period 2013 has corrected/revised appropriate with actual and data from warehouse (goods issued note). Corrective action implementation will be verified in the next audit.

Principle 4.1. (Major indicator 1) SOPs for estates from land clearing to harvesting


SOP No. SOP-EST-013 Rev.01 regarding EFB application was inline with Agricultural Circular No.24

Corrections :

To revise SOP No. SOP-EST-013 rev.01 regarding Application EFB to inline with Agriculture Circular No.24

Corrective action:

Tto ensure all procedure up to date, and inline with actual reference.


Date of closure: June 12, 2013

Verification result : PT Tania Selatan has revised the procedure (No. SOP-EST-013 rev.02) and socialize to all department

Principle 4.6 (Major indicator 4) Waste material from agrochemicals including pesticides con-tainers are properly disposed in accordance with laws and regulations

NCR No. 2013-04 of 07 (Major non-conformity)

It found used fertilizer packaging left in Palm Crop Circle which againts SOP-GEN-013 regarding Storage of Pesticide and used Packaging Corrections :

To clean up and remove all left used packaging in block 18D to dedicated warehouse and rinse prior ac-cordance to SOP-GEN-013.

Corrective action :

1. To re-educate all fertilizing foremen, FC and FO regarding controlling fertilizer used packaging ac-cordance to SOP-GEN-013.

2. To ensure that no more used packging kept outside dedicated warehouse of used packaging.



Verification result : PT Tania Selatan already perform housekeeping in plantation to ensure no more used packaging in Crop Circle, Socialization of housekeeping procedure on April 18th, 2013 to Foreman, FC and FO by EHS dept,



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and implementing rinsing procedure before store used packaging. Further implementation will be verified in next audit.

Criterion 4.7. (Minor indicator 6) Evidence of OHS and first aid equipments available at

worksites

NCR No. 2013-05 of 07 (Minor non-conformity)

There is no available safety gloves in chemical dosing area of POM Water treatment

Correction :

To provide safety handgloves in POM water treatment area as well

Corrective action :

To ensure appropriate PPE available in all area and check its condition in regular time

Auditor Conclusions : Closed with observation


Effectiveness of implementation to verified at next audit.

Criterion 6.5 (Minor indicator 1) Agreements entered into with contractors are to specify that contractors abide by labor laws.

Non-conformance 2013-07 of 07 (Minor non-conformity) Truck Driver for FFB police no BG 9245 K, inisial name N, tranporter from SP5 only hold SIM A (driving Li-cence type A), while his vehicle required SIM B Umum (Driving licence type B General) as mandatory Correction: To ensure that the truck and its compliance and ensure that the driver have the correct Licence. Corrective action: 1. To ensure that the security check all vehicle entering company area 2. To deny all the out of condition vehicle not to entering company (Mill) area Auditor Conclusions: Closed.

Date of closure: September 12, 2013 Verification result; Cooperation as owner of the truck already educated to control the driver condition, and educate security to deny under-condition truck entering POM area, company also improve security system to ensure this condition re-occurrence.

Criterion 6.10. (Minor indicator 1) Evidence shall be available that all parties understand the contractual agreements they enter into and that contracts are fair, legal and transparant.


Working contract with Loading & unloading labor Union already expired since December 31th, 2011, but no renewal contract till audit day Correction : To renewal contract for Loading & unloading labor Union Corrective action :



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Ensuring all existing working contract with second party in valid period. Auditor Conclusions: Closed


Tania selatan already renewing existing contract with second party.

Evidence of immediate action taken was accepted. Effectiveness of implementation to verified at next audit.

• RSPO SCCS


MR can not demonstrate sufficient knowledge in implementing SCCS because he can not distinguish be-tween the categories of FFB certified with FFB non-certified. Correction :

• The facility was conducte re-training about RSPO SCCS to Mr Amir Hamzah including the definition of FFB certified and FFB Non Certified.

• The facility was replace Mr Amir Hamzah with Mr Heru Yuswandono assign as MR RSPO SCCS in Bur-nia Timur POM

Corrective Action :

The ensure of competency/knowledge a MR always update Auditor Conclusions : Closed.

Date of closure: June 12, 2013 Verification result :

The company has conducted update RSPO SCCS training on dated of April 27, 2013. The company pro-vide evidence conducting training such as resume of training, attendance list (one of which is Mr Amir Hamzah and Mr Heru Yuswandono), documentation/foto and material/presentation training and the com-pany provide decree letter No. 2099.01/TS-HRR/SK/IV/2013 dated on April 11, 2013 that Mr Heru Yus-

wandono,ST assign as Management Representative (MR) RSPO SCCS in Burnai Timur POM. He is re-placing of Mr Amir Hamzah position too.


Auditee not maintain accurate of information because there are different of information between mass bal-ance document with weighbridge software about volume of received FFB for period of January 2013.

Correction :

Correction of data of FFB receipt in mass balance sheet with information from weighbridge software.

Corrective Action :

• Provide direction to PiC of record keeping to be more concerned about the accuracy of the data which received and recorded

• To ensure that there are not different information between mass balance sheet with weighbridge soft-ware

Auditor Conclusions : Closed with observation.



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Date of closure: June 12, 2013 Verification result :

The company has provided correction data about FFB receipt on mass balance sheet. These information has appropriate between mass balance sheet with weighbridge software. Effectiveness of implementation to verified at next audit.

3.4 3.4 3.4 3.4 Noteworthy Positive Components

There is not new positive components by stakeholders during 2nd surveillance audit

3.5 Issues Raised by Stakeholders and Findings Pertaining to Issues There is not new issues raised by stakeholders during 2nd surveillance audit.



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4.0 CERTIFIED ORGANISATION’S ACKNOWLEDGEMENT OF INTERNAL RESPONSIBILITY

4.1 Date of Next Surveillance Visit

The next surveillance visit is planned for March 2014

4.2 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 as-sessment findings and report content. Signed on behalf of PT Tania Selatan Simon Siburat Group Sustainability Coordinator Date : June 18, 2013

Signed on behalf of TUV Rheinland Malaysia Aswan Hasibuan Lead Auditor Date : June 18, 2013



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APPENDICES

Appendix 1: List of Abbreviations

AMDAL

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

BLHD Balai Lingkungan Hidup Daerah (local environmental officer) CPO Crude Palm Oil EIA Environmental Impact Assessment ERTs ERP

Endangered, Rare & Threatened species Emergency response procedure

ESH Environmental Safety & Health FFB Fresh Fruit Bunches EFB Empty Fruit Bunches HCV Hyperkes IFC-CAO

High Conservation Value Hygiene Perusahaan & Kesehatan Kerja (Company Hygiene and Occupational Health) International Finance Corporation - Compliance Advisor/Ombudsman.

IPM Integrated Pest Management LTA Lost Time Accident MSDS Material Safety Data Sheets NPP New Planting Procedure NGO Non-Government Organization OSH Occupational Safety & Health PKO Palm Kernel Oil POME Palm Oil Mill Effluent PPE Personal Protective Equipment RKL Rencana Pengelolaan Lingkungan (Environmental Management Plan) RPL Rencana Pemantauan Lingkungan (Environmental Monitoring Plan) SIA Social Impact Assessment SOP SPPI SPSI

Standard Operating Procedure Serikat Pekerja Perkebunan Indonesia (Indonesian Plantation Labour Union) Serikat Pekerja Seluruh Indonesia (Indonesia Labour Union)

UKL Upaya Pengelolaan Lingkungan (Environmental Management Efforts) UPL Upaya Pengelolaan Lingkungan (Environmental Management Efforts)

Appendix 2: List of Stakeholders Interviewed and Contacted

No. Name of

Stakeholder Institution - Address Remark

Stakeholders Interviewed On-Site

1. Pak Dika Estate doctor 2. Pak Marianto Harvestor mandore (Burnei Timur

estate)

3. . Pak Sulistiono Harvestor (Burnei Timur estate) Permanent worker 4. Pak Muntako Harvestor (Burnei Timur estate) Permanent worker 5. Pak Supirhadi Harvestor (Burnei Timur estate) Permanent worker 6.

Pak Iwan Sprayer & manurer (Burnei Timur estate)

Permanent worker

7. Pak Junaidi Sprayer & manurer (Burnei Timur estate)

Permanent worker

8. Pak Sunardi Manurer & maintenance (Burnei Timur estate)

Daily paid worker



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No. Name of

Stakeholder Institution - Address Remark

9. Bu Rahminengser Manurer & maintenance (Burnei Timur estate)

Daily paid worker

10. Bu Munasih Manurer & maintenance (Burnei Timur estate)

Daily paid worker

11. Bu Sumimi Manurer & maintenance (Burnei Timur estate)

Daily paid worker

12. Bu Sutarni

Manurer & maintenance (Burnei Timur estate)

Daily paid worker

13. Pak Dwisantoso Chemical store clerk (Burnei Timur estate)

14. Pak Irbain Harvestor mandore (Burnei Barat estate)

15. Pak Kurniaratu Harvestor (Burnei Barat estate) 16. Pak Jurit Harvestor (Burnei Barat estate) 17. Bu Monika Agus Manurer’s mandore (Burnei Barat

estate) Daily paid worker

18. Bu Ayuna Manurer (Burnei Barat estate) Daily paid worker 19. Bu Holijah Manurer (Burnei Barat estate) Daily paid worker 20. Bu Rosidah Manurer (Burnei Barat estate) Daily paid worker 21. Bu Siwil Manurer (Burnei Barat estate) Daily paid worker 22. Pak Sipayung Chemical store clerk (Burnei Barat

estate)

23. Pak Sidek Workshop (Burnei Barat estate) 24. Bu Mariam Sprayer & maintenance (Burnei

Barat estate) Daily paid worker

25. Pak Mulyono Mill security 26. Pak Rumano Mill security 27. Pak Unting Sinaga Mill engine room operator 28. Pak Feriandi Mill engine room operator 29. Pak Supari Mill boiler room operator 30. Pak Indratno Mill boiler room operator 31. Pak Jhon Zulkarnain Mill boiler room operator

Appendix 3 : Observations and Opportunities for Improvement

No. Observations / Opportunities for Improvement Criteria

1 The company’s safety and health policy itself states that it will be periodically reviewed, however, it is not clearly specified what is the maximum interval be-tween reviews.

4.7

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