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Roundtable on Sustainable Palm Oil

Annual Surveillance Audit Report Report no.: ASA 2-096705

Surveillance assessment against the

RSPO Principles & Criteria National Interpretation Indonesia year 2008

PT Perkebunan Nusantara III

Sei Mangke Palm Oil Mill

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

Date of assessment : July 01-06, 2013

Report prepared by :

Fadli (RSPO Lead Auditor)

Certification Decision by : Muhammad Bascharul Asana

(CEO TUV Rheinland Indonesia)

Certification Body : PT TUV Rheinland Indonesia.

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

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

www.tuv.com

TABLE OF CONTENTS

1.0 SCOPE OF CERTIFICATION ASSESSMENT ....................................................... 3

1.1 National Interpretation / Standard Used 3

1.2 Scope of Assessment 3

1.3 Certification Details 3

1.4 Location and Maps 3

1.5 Organisational Information / Contact Person 5

1.6 Description of Supply Base 10

1.7 Actual production volumes and project outputs. 11

1.8 Dates of Plantings and Replanting Cycles 11

1.9 Area of Plantation (Total, Planted and Mature) 12

1.10 Progress Against Time Bound Plan 13

1.11 Audit against the rules for Partial Certification 13

1.12 Progress of associated smallholders or outgrowers towards RSPO compliance 14

1.13 Revised Approximate Tonnages Certified 14

1.14 Recommendation for RSPO Supply Chain Certification 14

1.15 Date of Supply Chain Certificate Issued and Scope of Certificate Error! Bookmark not defined. 1.16 Recommendation for suspension of RSPO Certificate of PTPNIII Sei Mangke Mill and Withholding of Certification of Non-certified Management Units 15

2.0 ASSESSMENT PROCESS ................................................................................... 16

2.1 Certification Body 16

2.2 Qualifications of Lead Assessor and Assessment Team 16

2.3 Assessment Methodology & Agenda 17

3.0 ASSESSMENT FINDINGS ................................................................................... 19

3.1 Summary of Findings pertaining to RSPO Principles & Criteria 19

3.2 Status of Previously Identified Non-conformities 31

3.3 Identified Non-conformances against RSPO P&C Requirements, Corrective Actions Taken and Auditors Conclusions 41

3.4 Description of Supply Chain Management System 49

3.5 Identified Non-conformances against RSPO SCCS Requirements, Corrective Actions Taken and Auditors Conclusions 52

3.6 Noteworthy Positive Components 53

3.7 Issues Raised by Stakeholders and Findings Pertaining to Issues 54

4.0 CERTIFIED ORGANISATION’S ACKNOWLEDGEMENT OF INTERNAL

RESPONSIBILITY ...................................................................................................... 54

4.1 Date of Next Surveillance Visit 54

4.2 Acknowledgements of Internal Responsibility and Formal Sign-Off by Client 54

APPENDICES............................................................................................................. 55

Appendix 1(a): Details of Revised Certificate (if applicable) 55

Appendix 3: List of Abbreviations 55

Appendix 4: List of Stakeholders Interviewed and Contacted 55

Appendix 5: Observations and Opportunities for Improvement 56

RSPO Annual Surveillance Report

- PT Perkebunan Nusantara III –Sei Mangke Mill

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1.0 SCOPE OF ANNUAL SURVEILLANCE ASSESSMENT

1.1 National Interpretation / Standard Used

The operations of the palm oil mill(s) and its supply base of FFB were assessed against National Intepreta-tion Indonesia year 2008 of the RSPO Principles & Criteria (P&C) and the RSPO Supply Chain Certification Systems (SCCS) document (November 2009) on July 1st to 6th 2013.

1.2 Type of Assessment

The annual surveillance audit was carried out on 1 (one) mill and 5 (five) estates (i.e. Dusun Hulu Estate, Gunung Para Estate, Gunung Pamela Estate, Bangun Estate and Rambutan Estate) owned by PT Perke-bunan Nusantara III (PTPN III). The date of latest certification of this unit was 2010-08-16.

The scope of the Supply Chain Certification System assessment covers the implementation of the Mass Balance supply chain model of Sei Mangke Palm Oil Mill

1.3 Certification Details

The details of RSPO certification of Sei Mangke Palm Oil Mill are as per the table below: Table 1: RSPO Certification details of Sei Mangke Palm Oil Mill

1.4 Location and Maps

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

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

Child numbers of each certification unit : -

RSPO Certificate no. : 01 100 096705

Date of first RSPO certification & validity : August 16, 2010 & valid until August 15, 2015

Date of certification audit : June 25 - 29, 2009

Date of previous surveillance audit : June 13 – 17, 2011

CPO tonnages claimed : 37,430 tonnes

PK tonnages claimed : 7,546 tonnes

Name of mill /

estate Location

GPS locations

Latitude Longtitude

Dusun Hulu Estate /(KDSHU)

Nagori, Dusun Ulu, Ujungpandang Sub-district, Simalungun, District 21184

03º 05’ 56.8” 099º 28’ 43.9”

Bangun Estate (KBANG)

Nagori Senio, Gunung Malela Sub-district, Simalungun District, 21151

02º 58’ 27.7” 099º 10’ 05.0”

Gunung Para Estate (KGPAR)

Desa Gunung Para 2, Dolok Merawan Sub-district, Serdang Bedagai District, 20600

03º 09’ 53.2” 099º 06’ 27.8”

Pamela Estate (KGPMA)

Desa Gunung Pamela, Slipispis Sub-district, Serdang Bedagai District, 20692

03º 13’ 19.5” 099º 03’ 51.9”

Rambutan Estate (KRBTN)

Desa Paya Bagas, Tebing Tinggi Sub-district, Kabupaten Serdang Bedagai 20602 & Sei Semujur, Sei Suka Sub-district, Batu Bara District

02º 54’ 04.2” 099º 34’ 00.2”



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Figure 1 : Location of Sei Mangke mill and 5 company-owned estates within its supply base

Assessment location split into 5 districts : 1. Simalungun District 2. Batu Bara District 3. Tebing Tinggi District 4. Serdang Bedagai Dis-

trict 5. Asahan District



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Figure 2.a : Map of Dusun Hulu Estate



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Figure 2.b : Map of Gunung Para Estate



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Figure 2.c : Map of Gunung Pamela Estate



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Figure 2.d : Map of Bangun Estate



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Figure 2.e : Map of Rambutan Estate



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1.5 Organisational Information / Contact Person

Contacts details of the company are as follows:

1.6 Description of Supply Base

Sei Mangke Palm Oil Mill (POM) is one of palm oil mills owned by PT Perkebunan Nusantara III located in Sei Mangke Kecamatan Bosar Maligas Kabupaten Simalungun, North Sumatra. Sei Mangke POM was es-tablished in 1997 through construction permit from the District Head of Simalungun, No. 503/4560/IISIM-1997. Sei Mangke POM has capacity of 30 ton/hour. Since January 2011, company has increased their ca-pacity production from 30 ton per hour to 75 ton per hour. Currently, Sei Mangke POM receives FFB supplies from 5 company-owned estates (i.e. Dusun Hulu Estate, Bangun Estate, Gunung Pamela Estate, Gunung Para Estate, and one division of Rambutan Estate). Sungai Mangke Mill also receives FFB from independent smallholders, who act as middlemen or FFB agents collecting FFB from many small farmers and supply the-se to the mill. The registered agents in 2012are UD Bentasil, UD Sawita Mahdani, UD Gintar, UD Lestari, CV. Ramayana S, CV.Sama Suka, CV. Grahita Puri, UD. Anastesia and CV.L.Mananggei. The FFB supplier and independent smallholders are as listed below:

Table 3: FFB Supply Information for Sei Mangke Palm Oil Mill year 2012

FFB Contributors FFB supplied

Tonnes %

Company owned (certified) estates:

Dusun Hulu Estate (KDSHU) 71,697.78

Bangun Estate (KBANG) 27,822.75

Gunung Para Estate (KGPAR) 15,740.64

Gunung Pamela Estate (KGPMA) 40,144.25

Rambutan Estate (KRBTN)* 11,193.56

Sub Total 166,598.98 49.57

Non Certified Estates :

Bandar Betsy Estate (KBDBY) 100.78

Gunung Monako Estate (KGMNO) 27,498.61

Sei Dadap Estate (KSDDP) 41,723.59

Sarang Ginting Estate (KSGGI) 20.25

Bandar Selamat Estate (KBDSL) 20,302.54

Sub Total 89,645.77 26.68

Independent outgrowers :

UD.Bentasil 21,309.73

UD.Sawita Mahdani 1,395.98

Company Name: PT Perkebunan Nusantara III (Sei Mangke Palm Oil Mill)

Address: Jln. Sei Batang hari No. 2 Medan, Indonesia

Contact Person:

Mr. Tio Handoko

Telephone: 061-8452244

Email: [email protected]



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FFB Contributors FFB supplied

Tonnes %

UD.Gintar 3,217.26

UD.Lestari 31,751.48

CV.Ramayana S 9,301.10

CV.Sama Suka 7,164.23

CV.Grahita Puri 14.61

UD.Anastesia 4,707.32

CV.L.Mananggei 953.63

79,815.34 23.75

TOTAL 336,060.09 100.00

*Note: Only one division of Rambutan estate is supplying FFB to Sei Mangke mill. Other divisions supply to other mills

1.7 Actual production volumes and project outputs.

To date, PTPN III has not sold any CPO as RSPO certified material. The quantity of CPO produced by Sei Mangke POM is provided in the following table:

Table 4: Total and projected CPO and PK production from Sei Mangke Mill

* Tonnages sold from certified estates but not claimed as RSPO certified material

** Actual production from January to December 2012 consisting of material from certified and non-certified FFB.

*** Actual certified product production from January to December 2012, material from certified FFB only.

1.8 Dates of Plantings and Replanting Cycles

The company follows a replanting cycle of 25 years. Information on the dates of plantings is provided in the table below.

Table 5: Age and year of plantings of company estates supplying to Sei Mangke Palm Oil Mill

Age & Year of Plantings

Oil palm planted area at each estate(ha)

KDSHU KBANG KGPAR KGPMA KRBTN Total

0 – 5 yrs (2009 – 2013) 0.00 436.51 0.00 428.91 589.71 1,657.93 6-10 yrs (2004 – 2008) 1,761.65 246.45 29.65 175.50 1,176.22 5,563.40

11-15 yrs (1999 – 2003) 624.97 888.40 522.79 1,421.06 767.16 2,428.79 16-20 yrs (1994 – 1998) 511.49 206.43 0.00 254.41 1,034.40 3,374.31

Amount (MT)

CPO PK

Certified tonnages claimed in certificate 37,430.00 7,546.00

Tonnages sold* 77,463.20 14,400.57

Actual production** 78,150.74 16,240.35

Actual certified product production*** 40,579.51 8,262.58

Projected output for year 2013 102,343.74 20,903.36



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Age & Year of Plantings

Oil palm planted area at each estate(ha)

KDSHU KBANG KGPAR KGPMA KRBTN Total

21-25 yrs (1989 – 1993) 802.30 0.00 0.00 0.00 1,146.42 0.00 TOTAL 3,700.41 1,777.79 552.44 2,279.88 4,713.91 13,024.43

Table 6: Planned and actual oil palm replanting activities for company-owned estates supplying to Sei Mangke mill

Year

Total planned re-

planting area

(ha)

Total planned replanting area for each estate (ha)

Actual total area re-

planted (ha) KDSHU KBANG KGPAR KGPMA KRBTN

2012 334.25 0.00 71.00 0.00 99.95 163.30 334.25

2013 3.40 0.00 0.00 0.00 0.00 3.40 205.55

2014 0.00 0.00 0.00 0.00 0.00 0.00 0.00

2015 0.00 0.00 0.00 0.00 0.00 0.00 0.00

2016 0.00 0.00 0.00 0.00 0.00 0.00 0.00

2017 0.00 0.00 0.00 0.00 0.00 0.00 0.00

2018 0.00 0.00 0.00 0.00 0.00 0.00 0.00

1.9 Area of Plantation (Total, Planted and Mature)

Table 7: Oil Palm Planted Area Summary, FFB Production and Average yield/ha for PTPN III company owned estates

Estate Name Total area

(ha)

Oil Palm Planted area

(ha)

Mature (Production)

area (ha)

Immature (Non-production)

area (ha)

FFB Production**

(ton)

Average yield/ ha

(ton/ha)

Dusun Hulu Es-tate (KDSHU)

4,852.43 3,700.41 3,700.41 0.00 71,862.31 19.42

Bangun Estate (KBANG)

3,378.83 1,777.79 1,507.68 270.11 27,822.75 18.45

Gunung Para Estate (KGPAR) 4,030.00 552.44 552.44 0.00 15,788.73 28.58

Pamela Estate (KGPMA)

5,589.06 1,980.02 1,850.97 129.05 40,914.41 22.10

Rambutan Es-tate (KRBTN)

6,837.67* 4,713.91 4,124.20 589.71 77,761.22 18.85

TOTAL 24,687.99 12,724.57 11,735.70 988.87 234,149.42 19.95

* Note: Data from January to December 2012. Only 50% of FFB production from Division VI (1,099.25 ha)-Rambutan estate is supplying FFB (11,193.56 ton) to Sei Mangkei mill. Other areas are supplying to other mills.

** FFB production on year 2012.

Table 8: Land use data for PTPNIII Company’s owned estates

Estate Name Total ar-ea (ha)

Rubber

Planted Ar-ea (ha)

Oil Palm Planted

Area (ha)

Land used for other purposes (ha)

Road Buildings POM Other land



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Estate Name Total ar-

ea (ha)

Rubber

Planted Ar-ea (ha)

Oil Palm Planted

Area (ha)

Land used for other purposes (ha)

Road Buildings POM Other land

Dusun Hulu Estate (KDSHU)

4,852.43 738.70 3,700.41 87.89 125.34 97.99 102.10

Bangun Estate (KBANG) 3,378.83 1,086.96 1,777.79 92.15 50.00 0.00 371.93

Gunung Para Estate (KGPAR) 4,030.00 2,730.82 552.44 28.15 68.00 0.00 650.59

Pamela Estate (KGPMA) 5,589.06 1,902.45 1,980.02 95.03 123.53 0.00 1,488.03

Rambutan Es-tate (KRBTN)

6,837.67 1,687.50 4,713.91 111.54 185.92 0.00 138.80

TOTAL 24,687.99 8,146.43 12,724.57 414.76 552.79 97.99 2,751.45

1.10 Progress against Time Bound Plan

The company has revised their time bound plan for RSPO certification of other management units as per the schedule below. The plan was revised as the company was awaiting RSPO certification of Sei Mangke mill and its supply base and is applying experience gained from the first certification to prepare other manage-ment units for certification. Table 7: Time Bound Plan of the Other Management Units

Name of Holding

Location Time bound plan for certification

Progress in 2013

PKSMK Sei Mangke / Simalungun August 2010 Certified

PRBTN Tebing Tinggi December 2014 Planned

PSSIL Sei Silau / Asahan December 2014 Planned

PANAS Aek Nabara / L. Batu November 2013 In-process

PSSUT Sisumut / L. Batu November 2014 In-process

PSBAR Sei Baruhur/ L. Batu November 2014 In-process

PPARO Aek Raso/ L. Batu November 2013 In-process

PTORA Torgamba/ L. Batu December 2015 Planned

PATOR Aek Torop/ L. Batu December 2013 In-process

PSDAN Sei Daun/ L. Batu December 2015 Planned

PSMTI Sei Meranti/ L. Batu December 2015 Planned

PHPSG Batangtoru / Tapanuli Selatan

November 2016 Planned

1.11 Audit against the rules for Partial Certification

The assessment of compliance of the PTPN III against the rules for partial certification according to RSPO certification system year 2007 clause 4.2.4 was conducted through document check and interviews. The as-sessment was also conducted by checking findings of concurrent ISO: 9001 at other management units of PTPN III. A summary of findings is listed below.

Partial Certification Requirements Audit Findings



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1.a. The organization is a member of RSPO Yes, PTPN III is RSPO member with RSPO number 1 -0030-06-000-00 (since 14-12-2006)

1.b. A time-bound plan for achieveing certifi-cation of all relevant entities;

Company has a time bound plan for achieving RSPO certification for all relevant entities. However, one of the company’s development area, Muara Upu site, lo-cated at South Tapanuli, is still not included in compa-ny’s Time Bound Plan. Up-date, this area was carried out NPP by Certification Body (Sucofindo) in 2012 years.

1.c. i. There are no significant land conflicts There are some land conflicts/ potential land conflicts ongoing in other PTPNIII management units, such as at Silau Dunia Estate, and Si Sumut estate. The com-pany made a conflict resolution mechanism, however the conflicts are not resolved yet as the mechanism is still not agreed by the land claimants.

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

The company’s development of a new planting area, Muara Upu at South Tapanuli was carried out NPP in accordance with this clause.

1c. iii. No labour dispute that are not being resolved through an agreed process.

No labour issues were found during this surveillance audit.

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

Some of PTPN III’s other management units have not complied certain legal requirements, for example in Si-lau Dunia estate under another PTPN III management unit, there is an issue with the land area stated in the land use right certificate (HGU). However, the compa-ny is taking action by inviting the National Land Agen-cy (BPN) to remeasure the land and resolve the issue. The process is still ongoing.

1.12 Progress of associated smallholders or outgrowers towards RSPO compliance

During surveillance audit, it was found that the company has program towards RSPO compliance for all in-dependent outgrowers that supply FFB to Sei Mangke Palm Oil Mill, such as Memorandum of Understanding between PT Perkebunan Nusantara III (PTPN III) and RSPO with IDH Sustainable Trade Initiative (IDH) (No. 3.12/MoU/01/2012 and 002/MoU/RSPO-PTPN3-IDH/III/2012 and PAL.01.2012.01) regarding “Sustainable Palm Oil Production by Independent Smallholders” and time bound plan for certification independent small-holder (UD.Bentasil and UD.Lestari).

1.13 Revised Approximate Tonnages Certified

The tonnages certified have been revised from the previous amount stated in the RSPO certificate issued in August 2010, as projected production in year 2011 has increased and this was corroborated with records of actual production (refer to Table 4). The revised approximate tonnages certified (as per Appendix 1), based on projection production in year 2013 (Sei Mangke mill) are provided below:

Crude Palm Oil (CPO) : 61,710 tonnes Palm Kernel (PK) : 12,398 tonnes

1.14 Recommendation for RSPO Supply Chain Certification

The audit team has confirmed through the audit process that Sei Mangke Palm Oil Mill has established and maintains an effective system to ensure compliance with the RSPO Supply Chain Certification System re-quirements (dated November 2009). It is also confirmed that the company’s annual volume of CPO and PK sold for the period of January to December 2012 has not exceeded the certified annual tonnages as claimed in the organization’s RSPO certificate no. 01 100 096705.

TUV Rheinland Malaysia recommends that Sei Mangke Mill be approved for certification of compliance to the RSPO Supply Chain Certification System requirements.



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1.15 Chronologic related lifting of suspension of RSPO Certificate of PTPN III Sei Mangke Mill and With-holding of Certification of Non-certified Management Units

TUV Rheinland Malaysia Sdn.Bhn released suspension letter on May 2nd 2012 regarding land dispute issue and muara opu issue. The corrective action proposal was sent by PTPN III and verification was complited on July 7th 2012. Based on the verification, the land dispute issue was deemed clear and then closed by TRM, while the muara opu issue was not clear and can not be closed.

In October 2012 PTPN III conducted the HVC and Social Impact assessment using the external consultant, then continued with NPP program with Sucofindo. In the event of RSPO – CB forum on March 5th to 6th 2013, this issue was communicated to RSPO and the conclusion was muara opu issue does not has impact the cer-tification process, and therefore TUV Rheinland Malaysia Sdn. Bhd stipulated lifting suspension letter on 2 May 2012.



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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 independ-ent testing and assessment services. The TÜV Rheinland Group was established in 1872 with offices located in over 360 locations in 62 countries on all five continents. TUV Rheinland 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 Project Validations and Verifications. TUV Rheinland Ma-laysia’s office is located in Subang Jaya, Selangor, 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, listed below: 1) Fadli 2) Hendra Fachrurozy New assessment team member who was not involved the previous assessment team is listed in the table below:

Name Position Qualifications / Experience

Yusof Khai-ran Nizar Auditor

Education: Diploma in Public Administration- MARA Institute of Technolo-gy, Malaysia (1991). Certificate of Safety and Health Officer-Malaysian In-surance Institute (2003). Bachelor of Corporate Administration (Hons)-MARA University of Technology, Malaysia (2003), Master of Science in Occupa-tional Safety and Health Management-Northern University of Malaysia (2011), Candidate for Phd in Occupational Safety and Health Management-Northern University of Malaysia. Trainings attended: ISO 9001:2000 IRCA/IATCA Lead Auditor Training-International Management & Technology Limited (Kuala Lumpur), ISO 14001:2004 IEMA Approved EMS Advanced Lead Auditor Training Course-Aspects Moody Certification Ltd (United Kingdom). OH&SMS IRCA Certified Lead Auditor Training Course-Moody International (Kuala Lumpur). MS 1722 Lead Auditor Training-Niosh Certification (Kuala Lumpur) Working experience: Experience in managing, consulting, training and au-diting quality, environmental, occupational safety and health management systems such as ISO 9001:2008, ISO 14001:2004, OHSAS 18001:2007, MS1722:Part 1:2005 from 1996-Current. Contract Trainer of OSH & Envi-ronmental Legal & Other Requirements Lead Auditors course for SIRIM Training Services Sdn Bhd & NIOSH Certification Sdn Bhd. Contract Auditor for Environmental Management System for Sirim QAS International (2006). Department of Occupational Safety and Health Malaysia (DOSH) Registered Safety and Health Officer (2003-2006). Approved Human Resources Devel-opment Fund (HRDF) Trainer (2011). Assessor for Prime Minister’s Hibiscus Award and involving assessment for oil and gas companies, plantations in-dustries, manufacturings, utilities, cleaning and transportations services (2003-2011). OSH and Environmental Auditor for TUV Rheinland Malaysia RSPO Principles & Criteria.

Andi Kautsar Al

Marzuki Lubis

Trainee Auditor

Education : Bachelor of Agriculture, Department of Socio and Economic of Agriculture, Padjadjaran University (2005).

Trainings attended : Enterprise Risk Management – Bakrie Sumatera Planta-tion (2010), Lead Auditor QMS 9001:2008 Course (IRCA) (2011), Lead Auditor QMS 14001:2004 Course (IRCA) (2012), Auditor Indonesian Sustainable Palm Oil Training (2013).



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Name Position Qualifications / Experience

Working experiences : Experienced as internal auditor, ISO assistant and Risk Control and Self Assessment Officer (RCSA Officer) of PT. Guntung Id-amannusa (Bakrie Sumatera Plantations Tbk) and currently a TR Cert Auditor (ISO 9001:2008 & ISO 14001:2004) since year 2011.

2.3 Assessment Methodology & Agenda The surveillance assessment combined with supply chain certification assessment was conducted from 01 to 06 July 2013 as per the assessment program information provided in the table below. The assessment was carried out in accordance with TUV Rheinland Malaysia’s RSPO audit procedure as well as the RSPO Certification Systems document and RSPO Supply Chain Certification Systems document. During assess-ment, the qualified TUV Rheinland assessors used the RSPO standard as endorsed for the country in which the assessment took place and recorded their findings.

Because of 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 compromising the integrity of the assessment in anyway.

All 5 estates and 1 mill were visited and document related to RSPO principles and criteria are checked and verified. Specific evidence was recorded for individual estates, while the interviews were conducted at all es-tates and the mill. The company proposed the correction and corrective action for all identified non conformities raised to the certification body 30 days after the closing meeting. Document checks to verify closure of major non-conformances was conducted and implementation of corrective actions for minor non-conformities will be verified during the next surveillance audit. The surveillance assessment agenda is as explained below. 2

nd Surveillance Assessment Agenda

Date Location/ Main

sites Main audit activities

01-07-2013 Sei Mangke Mill Opening meeting Onsite and document verification for all previous audit findings and following aspects :

• Comply to laws and regulations • Transparancy • OSH implementation • Environmental aspect and impact program • Waste management • Chemical application • Supplier Communication • Workers comunication • Best practices

SCCS Closing Meeting

02-07-2013 Dusun Ulu Es-tate

Onsite and document verification for all previous audit findings and following aspects :

• Comply to laws and regulations • Transparancy • HCV area, implementation of HCV management and monitor-

ing plan • Local communities’ communication. • Boundary stone cheking. • Agrochemical application • OSH implementation • Environemntal aspect and impact program • Waste management



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Date Location/ Main


• Chemical application • Best practice • Workers communication • Communication with local communities • Land Claims

Closing Meeting 03-07-2013 Dusun Bangun

Estate Onsite and document verification for all previous audit findings and following aspects:


ing plan • Local communities’ communication. • Boundary stone cheking. • Agrochemical application • OSH implementation • Environemntal aspect and impact program • Waste management • Chemical application • Best practice • Workers communication • Communication with local communities • Land Claims

Closing Meeting 04-07-2013 Gunung Para




Closing Meeting 05-07-2013 Gunung Pamela



ing plan • Local communities’ communication. • Boundary stone cheking. • Agrochemical application • OSH implementation • Environemntal aspect and impact program • Waste management • Chemical application



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Date Location/ Main


• Best practice • Workers communication • Communication with local communities • Land Claims

Closing Meeting 06-07-2013 Rambutan Es-

tate Onsite and document verification for all previous audit findings and following aspects:



Closing Meeting

3.0 ASSESSMENT FINDINGS

3.1 Summary of Findings pertaining to RSPO Principles & Criteria

The totals of 9 non-conformities were assigned against Major Compliance indicators while 11 non conformi-ties were assigned against Minor Compliance Indicator. Further explanation of the non-conformities raised and corrective actions taken by the company are provided in Section 3.2 & 3.3. The observations & oppor-tunities for improvement are listed in Appendix 5. The summary of findings based upon RSPO Principles & Criteria Indonesian National Interpretation year 2008 is provided in the table below.

Principle 1: Commitment to transparency

Criteria assessed : CR1.1, CR1.2

Criteria not assessed : - Findings:

The previous audit finding regarding the commitment of transparency was not closed. There was no ev-idence available regarfing the response to incoming requests for information from stakeholders:

• Letter on 22nd January 2013 No. 04/P/PK FTA/SBSI/SM/I/2013 from Worker Union of Sei Mangkei Village regarding to request to be a partner of loading and unloading process at Sei Mangkei Palm Oil Mill.

• Letter on 29th January 2013 from Banjar Hulu Village regarding to request for donation of of-fice furniture and computer.

• Letter on 24th April 2013 no. 413.1/02/2003/III/2013 from Dusun Hulu Village Head regarding to request of office furniture.

In this case, the company has procedure for controlling and monitoring incoming letter from stake-



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holde, , which is the Procedure no. IK-300-01/01 Rev.04. 01-08-2008 regarding the process of manag-ing letter information and documented procedure no. IK-300-16/01 Rev. 00.01-09-2007 regarding data provided to stakeholders. The company also has a documented logbook for incoming letters from stakeholders for requesting information.

As stated on documented procedure, IK-3-12-01/01 Rev.04. 01-09-200, all information requested and records of response of information requested are to be maintained for a period of time determined by the company by considering the importance of its information. It is also stated on the company’s work-ing instruction IK-3.00-13/01 that all incoming requests for information will be recorded in a specific form.

This was raised as a non-conformity during surveillance audit.

Compliance status: Non Compliance

NCR 2013-01 of 20 (Major)

There is no record for responses being made upon information request from stekholdr as follow : • Letter on 22nd January 2013 No. 04/P/PK FTA/SBSI/SM/I/2013 from Worker Union of Sei Mangkei

Village regarding to request to be a partner of loading and unloading process at Sei Mangkei Palm Oil Mill.

• Letter on 29th January 2013 from Banjar Hulu Village regarding to request for donation of office furniture and computer.

• Letter on 24th April 2013 no. 413.1/02/2003/III/2013 from Dusun Hulu Village Head regarding to request of office furniture.

Principle 2: Compliance with applicable laws and regulations

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

The company can not provide permit letter of plantation conversion from cocoa to palm oil or from rub-ber to palm oil and production incremental permit from goverment. The permit is required based upon Ministry of Agriculture No.357/Kpts/HK.350/3/2002 jo No.26/Permentan/OT.140/2/2007 article 27 & 28, paragraph 1 in Dusun Hulu/Sei Mangke estate and Sei Mangke POM, Gunung Pamela estate, Gunung Para estate, Bangun estate, and Rambutan estate.

This was raised as a non-conformity during surveillance audit.

The company has a list of all applicable laws/legal and other regulations in 2013 years. The process of company’s management system regarding the compliance to the applicable laws is appropriate but the company has not carried out the identification and evaluation of compliance or fulfillment for Minister of Agriculture decree No. 26/Permentan/OT.140/2/2007, dated February 28, 2007 and Ministry of Man-power No. Per.04/Men/1985 (article 138 and 139).

A work instruction for updating the list of applicable laws was available during the audit. All applicable regulations were listed and kept up-to-date by Legal and Risk Management section in Head Office Me-dan. For example, every year, the company complies with the local and provincial government labor minimum wage standard (UMR, upah minimum regional) based on the North Sumatera Governor De-cree. A documented procedure for compliance with relevant legal requirements with responsible staff and division is available at management level, district and estate level, as stated on document FM-3-11-01/01 Rev.2, dated 02/06/2009.

The company has document showing ownership or lease of the land in accordance with relevant laws that is land use certificates (HGU), the details are as follows :

1. Dusun Hulu Estate with total area of ± 4,854.43 ha consists of :

1). Head of National Land Agency decree No.147/HGU/BPN RI/2009, dated on October 16, 2009 for total area of ± 2,013.83 ha (Building Identification Number (NIB) : 02.09.00.00.00007) which is valid until March 25, 2035 (25 years). Decisions above consist of HGU certificate No.9 with



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total area of ± 138.95 ha and No.10 with total area of ± 1,874.88 ha in Dusun Ulu Village, Ujung Padang Sub District, Simalungun District, North Sumatera Province;

2). Head of National Land Agency decree No.29/HGU/BPN/95, dated on April 20,1995 for total ar-ea ± 835.83 ha (Building Identification Number (NIB) : 02.07.13.05.2.00001) which is valid until December 31, 2025 (30 years). Decisions above consist of HGU certificate No.1 with total ar-ea of ± 835.83 ha in Limau Manis Village, Lima Puluh Sub District, Asahan District, North Su-matera Province;

3). Head of National Land Agency decree No.31/HGU/BPN/95, dated on April 20, 1995 for total area of ± 2,002.77 ha (Building Identification Number (NIB) : 02.09.08.08.2.00001) which is val-id until December 31, 2025 (30 years). Decisions above consist of HGU certificate No.1 with total area of ± 2,002.77 ha in Sei Mangke Village, Bosar Maligas Sub District, Simalungun Dis-trict, North Sumatera Province.

2. Bangun Estate with total area of ± 3,378.83 ha consists of :

1). Head of National Land Agency decree No.3/HGU/BPN/2005, dated on January 13, 2005 for to-tal area of ± 2,357.56 ha (Building Identification Number (NIB) : 02.09.03.09.2.00224) which is valid until August 09, 2030 (25 years). Decisions above consist of HGU certificate No.1 with total area of ± 2,357.56 ha in Bangun Village, Gunung Malela (d/h Siantar) Sub District, Sima-lungun District, North Sumatera Province;

2). Head of National Land Agency decree No.102/HGU/BPN/2005, dated on July 08, 2005 for total area of ± 1,021.27 ha which is valid until December 31, 2029 (25 years). Decisions above consist of HGU certificate No.2 with total area of ± 894.68 ha (Building Identification Number (NIB) : 02.09.05.06.00168) and HGU certificate No.3 with total area of ± 126.59 ha (Building Identification Number (NIB) : 02.09.05.06.00169) in Talun Kondot Village, Pane Sub District, Simalungun District, North Sumatera Province;

3. Gunung Pamela estate with total area of ± 5,589.06 ha consists of :

1) HGU certified No.162 with total area of ± 2,100.32 ha (Building Identification Number (NIB) : 02.04.14.03. 00001) which is valid until December 31, 2029 in Jambu Village, Tebing Tinggi Sub District, Deli Serdang District, North Sumatera Province.

2) HGU certified No.1/Buluh Duri with total area of ± 3,488.74 ha which is valid until December 31, 2005 in Buluh Duri Village, Sipispis Sub District, Deli Serdang District, North Sumatera Province. This certificate in the processing of renewal of the land use certificates now (based on letter of Regional Office of National Land Agency in North Sumatera to National Land Agency of Republic of Indonesia No. 540-5336.D, dated on November 11, 2008). Head of Gunung Pamela estate has submitted a letter to the section 3.09 (No. KGPMA/3.09/16/2012, dated on March 13, 2013) in order to accelerate the process of publishing an extension of HGU it.

4. Gunung Para estate with total area of ± 4,030.003 ha consists of :

1) Head of National Land Agency decree No.180/HGU/BPN/2004 for total area of ± 4,040.003 ha which is valid until December 31, 2029 (25 years). Decisions above consist of HGU certificate No.159/Gunung Para II with total area ± 4,040.003 ha which is valid until December 31,2029 in Gunung Para II Village, Dolok Merawan Sub District, Deli Serdang District, North Sumatera Province. Since 2006 years, total area was reduced by 10 ha (based on no. 01/PH/04/2006, dated on April 07, 2006 about statement of the relinguishment of right).

5. Rambutan estate with total area of ± 6,837.67 ha consists of :

1) Head of National Land Agency decree No. 51/HGU/BPN/95, dated on August 04, 1995 for to-tal area of ± 4,373.78 ha which is valid until December 31, 2025. HGU certificate No.1 with total area ± 4,373.78 ha which is valid until December 31,2025 in Paya Bagas Village, Tebing Tinggi Sub District, Deli Serdang District, North Sumatera Province (afd I – V).

2) Head of National Land Agency decree No. 50/HGU/BPN/95, dated on August 04, 1995 for to-tal area of ± 569.32 ha which is valid until December 31, 2025. HGU certificate No.1 with total area ± 569.32 ha which is valid until December 31,2025 in Teluk Mengkudu Sub District, Deli Serdang District, North Sumatera Province (afd VII).

3) Head of National Land Agency decree No. 53/HGU/BPN/95, dated on August 04, 1995 for to-



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tal area of ± 780.45 ha which is valid until December 31, 2025. HGU certificate No.1 with total area ± 780.45 ha which is valid until December 31,2025 in Teluk Mengkudu Sub District, Deli Serdang District, North Sumatera Province (afd VIII).

4) Head of National Land Agency decree No. 35-HGU-BPN RI-2009, dated on February 13, 2009 for total area of ± 793.15 ha (Building Identification Number (NIB) : 02.07.00.00. 00048) which is valid until February 13, 2034. HGU certificate No.18 with total area ± 793.15 ha which is valid until February 13, 2034 in Sei Simujur Village, Sei Suka Sub District (d/h Air Putih), Ba-tubara District (d/h Asahan), North Sumatera Province (afd VII). At the time of previous sur-veillance audit, there is a difference between the measured land area of Sei Simujur divi-sion/region (afd VI) in Rambutan estate (1,133.35 ha) with total area stated in HGU (793.15 ha). The company has a working plan for this resolution (dated on June 30, 2011) but during the 2nd surveillance audit (year 2013) that the company has not been able to show evi-dence/record realization of working plan that has been made. This was raised as a non-conformity during 2nd surveillance audit.

Monitoring of boundary stone has been established for all existing BPN boundary stones which inform-ing condition/performance (good or was broken or missing) and existence (near road, river, society es-tate etc) of boundary stones such as boundary stone No.XXXI (Dusun Hulu Estate), No.II/29 (Gunung Para estate), No.XL and XXXIX (Afd IV – Rambutan estate). Dusun Hulu estate has re-marking of the estate boundary stones such No.XXXV (Block 81). Other than the boundary stone as boundary are trenches.

The company has a documented land dispute and conflict resolution mechanism according to the free, prior and informed consent process, which was last revised on 15 Feb 2010. However, the process of managing identification of community activities within company land areas related to the legal rights, traditional rights and other uses of land need to be improved. During the 1st annual surveillance it was found that several ongoing land disputes with local communities at Bangun estate, Gunung Pamela es-tate and Rambutan estate in which the affected parties have not reached a resolution with the compa-ny. There is no progress for conflict resolution of land disputes between the company and affected par-ties such as Reformasi group in Marjanji village which has a land dispute with the company, and no mechanism which is accepted by both parties to resolve the land conflict. The company has estab-lished a conflict resolution mechanism; however it is not recognized by affected parties.

During this 2nd surveillance it was found that there is improvement on land dispute resolution. There is agreement between Bangun estate, Gunung Pamela estate and Rambutan estate communities.

Regarding to conflict resolution at Kebun Bangun Estate there was evidence of progress under media-tion of local Police officer, Head of Regency (Bupati) and related local government. At this estate there were 3 groups involved within land conflict cases: 1. Futasi as 101.33 Ha within HGU no 3 area 2. Setia Negara as 7.24 Ha within HGU no 2) 3. Rakyat Berjuang as 15.9 Ha. (HGU no 2, wilayah Pemkab Simalungun)

During 2013 surveillane audit found that there was evidence of resolution progress for those land con-flict as follow :

1. Minute of meeting on 13rd May 2011 between Kebun Bangun Estate Management and Pematang Siantar Regency Police Head, Operational Division Head, Ineligent Head, Martoba Subdistrict Polie Head dealing with how to resolve the Futasi land conflict.

2. Record of letter on 9th February 2012 no.: KBANG/x/31/2012 from Manager of Kebun Bangun Es-tate to Pematang Siantar Regency Police Head regarding to request for mediation on land conflict with Futasi. This request would be focused only on Futasi area and 15.9 ha of Rakyat Berjuang Group.

3. Minutes of meeting on 22nd February 2012 regarding the method of clearance of the 15.9 ha area attended by the Secretary of Pematang Siantar, the company management as follow up for the 9th February letter. Action plan from Pematang Siantar Regency Police Head were to invite community member from lowest level, and make coordination with related institution.

4. Record of letter on 5th March 2013 no. KBANG/X/52/2013 to Pematang Siantar Regency Police Head regarding to follow up for the 22nd February 2013 meeting.

5. Record of letter on 12th April 2013 no. B/548/IV/2013 from Pematang Siantar Regency Police Head to Head of National Land Agency regarding to coordination meeting for action plan implementation already agreed.



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For Gunung Pamela Estate there was evidence of resolution progress :

1. Record of letter on 29th January 2013 from estate manager to the Director of PTPN III regarding to final decision from Tebing Tinggi High Court no. 01/PId C/2013 for land conflict in afdeling III area with Harapan peasant Group. This decision says that the company as the winner.

2. Minute of meeting on 17th October 2012 between company and the occupant, that says that the meeting attended by all invoted parties such local government, related local institution but no oc-cupant from desa Marjanji although they got the invitation letter. There was record of attendant list of the meeting.

3. Record of invitation letter on 16th October 2012 to the occupants from Barak, Lombang Kuntil La-nak dan Turunan Panjang area in order to complete the compensation process phase II that would be held on 19th October 2012.

For Kebun Rambutan Estate : There was evidence of conflict resolution process in form of official report about handover of flow pros-es of conflict resolution on 20th June 2011 to all of village Heads surrounding the estate including Sei Bamban village Head where the company has on going land conflict in Samben sub-village. According to interview with the ocupants, there is no social conflict with the company based on this issue until nowday. The occupants refuse to leave the location although the company already met them several times in order to make agreement the government already established some facilities here such as el-ementary school, Sub-district Head office and mosque.

Pertaining to the right for grazing, there is a collective agreement between PTPNIII and the local com-munities dated Wednesday, 11 March 2009 about the area are allowed for the local communitie to car-ry out grazing activities for their livestock in Dusun Hulu Estate Division VI. On-site verification was done at blocks 103 and 135 and observations at block 122. Locations were animal grazing is allowed are the blocks of planted oil palm that are already producing fruit. Based on interviews with villagers, at Gunung Para estate, they acknowledge the agreement with the company and have grazing permits from the company.

During surveillance audit 2013 found mutual agreement no. KGPAR/KB/X/01/V/2011 on 23rd May 2011 regarding to certain location for grazing activity especially for Bendarawan Villagers which not exist dur-ing the 2011 surveillance audit.

In 2012 the company issued a policy by which the grazing activity is forbidden within the concession area . As substitution to grazing location as before, the company already dedicated some kind of ani-mal pool, inline with company’s animal husbandry program. Socialization already made to the villagers on 22th and 24th December 2012 through community of Klembak, Gunung Para II, Panglong, bahjering and Bendarawan villages. Recently the community agreed with the policy and there area 17 cattle al-ready in the pool owned by the Bendarawan villager. Compliance status: Non Compliance


There was no evidence that PTPN III management has comply with decree of Ministry of Agriculture No.357/Kpts/HK.350/3/2002 jo No.26/Permentan/OT.140/2/2007 article 27 & 28, paragraph 1 about the conversion of plants permit and production increased permit.

NCR 2013-03 of 20 (Minor)

There was no evidence that the company has carried out the identification and evaluation of compli-ance or fulfillment for Minister of Agriculture decree No. 26/Permentan/OT.140/2/2007, dated February 28, 2007 and Ministry of Manpower No. Per.04/Men/1985 (article 138 and 139).


The company can not show the evidence/record realization of working plan to solve land discrepancy between HGU and actual plantation area related Sei Simujur area.

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



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Criteria assessed: CR3.1 Criteria not assessed: -

Findings:

The company’s current documented plan used as reference for company’s working plan was the Rencana Jangka Panjang – RJP (Long Term Plan) document, The information in the RJP document was more focused on plans for production, planting and expenditure (cost) + financial (profit and loss) associated with production operations for both estates and mill for a 5 year working period. The RJP document also includes brief information on a working plan for company’s activities related to social aspects, legal compliance, and environmental issues were the responsibility of the company. The RJP includes working plan documents as guidance of activities in all PTPN III estates and mills, and at the assessment time company has established an RJP work plan for the period of 2009 - 2013, include of a RJP for Sei Mangke Mill. The company has evaluated long term plan (RJP) once a years which the results of evaluation contained in the evaluation long term plan (RJP) report.

As an established plantation, PTPN III’s estate included in this assessment have already completed several planting cycles / crop rotations, in accordance with the characteristics of palm oil trees which have a maximum age of productivity of only 25 years. All estates have a replanting program, docu-mented in their RJP document as "Long Term Plan / RJP", made for the year 2009 until the year 2013.

Based on Table 6 above so rambutan estate (afd I) has been done replanting in year 2013 an area of 205.55 ha in which the plan is only 3.4 ha. In 2012 years, the company has been replanting total area of 163.30 ha (rambutan estate (afd I)), area of 71 ha (bangun estate (afd I & III) and area of 99.95 ha (Gunung Pamela estate (afd II to VI)). The oldest oil plam planted was in year 1993, there will be no replanting activities until year 2018. Compliance status: Compliance

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

Criteria assessed: CR4.1, CR4.2, CR4.3, CR4.4, CR4.5, CR4.6, CR4.7, CR4.8

Criteria not assessed: - Findings:

The company has standard operating procedures (SOP’s) which cover all activities in the estates and mill. All the SOP’s of plantation and mill were well documented and established. SOP’s for estates cov-er activities from seeding (nursery), preparation of land, maintenance of unproductive and productive palm tree, harvesting to dispatch of FFB to the palm oil mill. For the mill, SOPs were available for activi-ties from receiving of FFB, sorting, production processes such as sterilizing station, digester, pressing station, clarification station, kernel silo, until dispatch of crude palm oil (CPO), and palm kernel (PK) or palm kernel oil (PKO) to storage tank. At Kebun Bangun found document titled “work instruction / pro-cedur of PT. Perkebunan Nusantara III (PERSERO) – corporate secretary division No. 09 Kbang which contained 37 items. Also found Management system of PT. Perkebunan Nusantara III Medan which contained 20 procedures in it including procedure for land clearing to harvesting.

The company has been certified by ISO 9000/14000, Occupational Safety & Health Management Sys-tem (SMK3), implements a quality management system, and environmental management system. Monitoring activities at the mill was based on their procedure, Quality Plan of Production Process doc no. DP-3.03-05/01 where the monitoring activities for quality was carried out for reception of FFB, steri-lizing process, crude oil tank, clarifier tank, oil tank, oil purifier, vacuum dryer, sludge tank, sludge sep-arator, and storage tank.

Soil fertility was always monitored regularly by PPKS (Pusat Penelitian Kepala Sawit or Oil Palm Re-search Center) in all estates; the result of regular soil and leaf analysis will be used to maintain soil fer-tility through recommendations for fertilizer application. All fertilizer activities were well planned, imple-mented and well recorded in each division. Application of cover crop plantation from leguminoceae family such pueraria javanica (PJ), centrocema pubescent (CP) and mucuna bracheata, calopogonium muconoides especially in immature plantation were also carried out as an alternative method to main-



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tain soil fertility. EFB was applied to certain areas as determined by foliar analysis. Palm oil mill effluent (POME) was used for land application to increase soil fertility as well and the application were regularly monitored. The company maintains and increases soil fertility by use of fertilizer, legume cover crops for unproductive palm tree, composting, and land applications of POME or EFB. Records of all activi-ties are kept as well.

Some sloped areas were found in the company’s area especially for Dusun Hulu and Gunung Pamela estates, where has illustrated in the marginal area map. During site visits to sloped areas at Dusun Hu-lu estate and Gunung Pamela estate, it was observed that good amount of ground cover at planted slope areas and trees were planted using the horse shoe (‘tapak kuda’) method in which the soil where individual trees planted were flat to reduce soil erosion. Estate division offices maintain road mainte-nance programs developed on a 3 month rotation period, as stated in the company’s work instruction (IK 3.01-17/03 Rev.03, issued August 01, 2008 about road maintenance) and include maps to indicate areas where road maintenance is conducted. Since there was no peat soil identified in all company’s area, the company was not required to monitor subsidence level.

The estates have an SOP on protection of riparian river areas has specific instructions on methods for protection of riparian river. The company (some estate) has signs as boundary the agrochemical appli-cation i.e sign “cross” from paint with red colour but there are no signs as boundary the application of chemicals on the area of located near rivers/waterways such as the area of the waterways at the site Oplan (Gunung Para estate). This was raised as a non-conformity during surveillance audit. Palm oil mill effluent was treated and pumped directly to field for land application. Four samples of mill effluent are sent for analysis by the laboratory of the Environmental Department of Simalungun District once every 6 months. Evidence of elements of implemented water management with records is available at all estates and the mill.

IPM implementation was monitored at estate division offices, which maintain 3 month rotation sched-ules to conduct census of nettle caterpillars, rats and Oryctes rhinoceros, and maintain results of cen-sus. Chemical issuance records for 2012 and 2013 show chemicals used for pest control were issued only at fields where pests are found as stated in the company’s work instruction (IK 3.01-17/15 about pest and disease control). However the inconsistency in implementation with work instruction (WI) was found, example: in WI explained that the spraying will be done when plague the nettle caterpillars in the category of middle but result of verification in field that still in the category of low/lightweight (1.7 catter-pillars/stem and 3.08 catterpillars/stem) has been carried out spraying in Dusun Hulu and Bangun es-tate. This is raised as a non-conformity during surveillance audit.

The company uses only approved and registered agrochemicals. Records of all pesticides used includ-ing active ingredients used, area treated, amount applied per ha and number of applications are main-tained. Records show that the agrochemicals used are appropriate and in accordance with product la-bel recommendations for target species. Waste materials from agrochemicals including pesticides con-tainers are properly stored at chemicals warehouse with good ventilated and disposed in accordance with laws and regulations. Implementation in the field found inconsistencies with work instruction (WI) and circulars letter of rambutan estate manager (dated on April 22, 2013) i.e 1). at the warehouse (rambutan estate) found chemicals (paraquat dichloride) which has been banned by the organization not to be used where the company has not been able to provide a clear explanation about condition above because the company has not been able to show a list of chemicals used (including name of ac-tive ingredients and doses used); 2). There are agrochemicals applications (rambutan estate) on the circle path area of immature plants (TBM-1) (block 104/year 2012) where the activity was prohibited in the work instruction (IK 3.01-17/01 Rev.7, dated on October 15, 2012). This was raised as a non-conformity during surveillance audit.

The company has implemented a certified Occupational Health and Safety management system and has an OSH Policy (the document entitled “Komitmen Kebijakan Keselamatan dan Kesehatan Kerja (K3)” dated 8/04/13 approved by Planning and Development Director - PT Perkebunan Nusantara III for implemented in the plantation and mill. The company has occupation safety and health (OHS) commit-tee organization (Panitia Pembina Keselamatan dan Kesehatan Kerja (P2K3)) as responsible person for safety and health programme. The company has provision for accident insurance for worker is JAMSOSTEK as evidenced sampled (Dusun Hulu estate) for payment record for June 2013 covering 513 (85 new workers). Rate 6.54% from basic salary. (2% employee and 4.54% contribution by com-pany). Further sampled on wage slip for one of worker for Juni 2013 shown contribution made to JAMSOSTEK. While at Kebun Gunung Para saw Laporan luran Jamsostek 2013 for January involving 949 workers, February involving 949 workers, March involving 949 workers. Also available as evidence during sampling a list of “Kartu Peserta JAMSOSTEK (KPJ)” Kebun Gunung Para contained 945 work-ers. Health monitoring and examinations are regularly conducted for all workers especially whos ex-



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posed to high risk (once a year) where records of these are available and well kept but not all worker (sprayer) in Dusun Hulu estate monitored and examined by a doctor (Sei Dadap Hospital). This was raised as a non-conformity during surveillance audit. The company has OHS and first aid equipment available at worksites such as helmet, earplug, safety glass, shoes, glove, masker, first aid box, fire ex-tinguishers but found worker not having safety glass in block 134 (Dusun Hulu estate) and fire extin-guishers were not available in the box outside chemical store and also other area such as infront ferti-lizer store (Gunung Para estate). According to information from responsible person (warehouse of-fice) , the fire extinguishers were sent out for services after used during extinguishing fire incident oc-curred at Mill on 12/04/13, however the company did not provide the replacement to prevent emergen-cy condition. First aid kits were provided to all sites of plantation offices and mill office and First Aid trainings are conducted by OHS personnel and nurses at all plantations and the mill but found chemical clerk and his assistant (rambutan estate) not attended first aid training where only trained related to hazardous waste (B3). This was raised as a non-conformity during surveillance audit. Accident rec-ords were maintained and reviewed by OHS committee at the OHS meetings regularly (once a month). Record of work accidents were kept by hospital and OHS personnel and documented in form FM-12-2003. Supervisor at all locations are responsible to investigate accidents and reporting these to the hospital and OHS supervisor. Accident and emergency preparedness procedures were also estab-lished and available. Procedure to handle emergencies were documented under PK3-10 revision 01 dated 06-01-2006, and cover emergencies such as fire, explosion, force major, and public demonstra-tions. Emergency procedures for handling fire at available at office, land and mill and documented in a diagram.

The company has human resource development plan 2013 such as first aid training, waste hazardous waste (LB3) training, integrated pest training, emergency responses to land burning training, prepared-ness training, etc. Records of training for each employee and training has kept such as attendance list, material of training, certificate (if available). Compliance status: Non Compliance

NCR 2013-05 of 20 (Minor) There were no signs of restriction of agrochemical application on the area of located near riv-ers/waterways such as the area of the waterways at the site Oplan (Gunung Para estate)

NCR 2013-06 of 20 (Minor) Inconsistency between implementation with work instruction (WI), example : in WI explained that the spraying will be done when damage the nettle caterpillars in the category of middle but result of verifi-cation in field that still in the category of low/lightweight (1.7 catterpillars/stem and 3.08 catterpil-lars/stem) has been carried out spraying in Dusun Hulu and Bangun estate.

NCR 2013-07 of 20 (Minor) The company has not been able to provide a clear explanation about found chemicals (paraquat dichlo-ride) in warehouse (rambutan estate) which has been banned by the organization not to be used (based on work instruction and circular letter)

NCR 2013-08 of 20 (Major) There were agrochemicals applications (Rambutan estate) on the circle path area of immature plants (TBM-1) (block 104/year 2012) whereas it is activity is prohibited in the work instruction (IK 3.01-17/01 Rev.7, dated on October 15, 2012) and the company (rambutan estate) has not been able to show a list of chemicals used (including name of active ingredients and doses used).

NCR 2013-09 of 20 (Minor) Health monitoring for workers dealing with pesticides in Dusun Hulu estate such as sprayer not regular-ly monitored and examined by a doctor. Only selected worker send to Sei Dadap Hospital;

NCR 2013-10 of 20 (Minor) Found worker not having safety glass in block 134 (Dusun Hulu estate).

NCR 2013-11 of 20 (Minor) Found 2 fire extinguishers were not available in the box outside chemical store and also other area such as infront fertelizer store (Gunung Para estate);

NCR 2013-12 of 20 (Minor) Found chemical clerk and his assistant not attended first aid training (Rambutan estate).



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Principle 5: Environmental responsibility and conservation of natural resources and biodiver-sity

Criteria assessed: CR5.1, CR5.2, CR5.3, CR5.4, CR5.5, CR5.6

Criteria not assessed: Findings:

The company has identified negative environment impacts for all activities in their 5 estates and Sei Mangke mill. In line with implementation of their environmental management system ISO 14001:2004, PTPN III management periodically updates their environmental management program to consider all new and existing negative impacts, with the objectives to mitigate and minimize level of negative im-pacts. The company will periodically report its environmental performance to the local government eve-ry six months (Semester II, year 2012) and every three months (for Land Application report). Positive impacts from estates and mill activities have also been identified in the company’s environmental and social impact assessment documents (AMDAL/UKL/UPL).

A HCV assessment has been conducted by Natural Resources Conservation Office (BKSDA) and Bio-diversity and Biotechnology Research Centre – Bogor Agriculture University (for Bangun estate). The report lists a total of 27 areas in all estates identified as HCV, of which 11 areas are HCV 1, 11 areas identified as HCV4, and 5 areas identified as HCV 6. No HCV 2, 3, or 5 areas were identified. A highly endangered species, the pangolin ('trenggiling') was also identified in several estates. A HCV man-agement and monitoring plan has been done such as planting trees in riparian, maintain conditions around the spring, keep the grave condition, patrol, etc.

Posters and signs prohibiting hunting of protected species and information on identified HCV areas are visible in appropriate scale in all locations that identified as HCV areas. If HCV areas bordering with estate or residential communities then one step made in HCV management plan is socialization to the community to understand the benefits and usefulness so that they have a sense belonging and main-tain but in Gunung Para estate (Afd II, IV and V) has not been socialization to the society/public, espe-cially HCV 4 (river) because there were signs that the area will be replanted again such as preparation land/land clearing and preparation of the planting hole. This was raised as a non-conformity during surveillance audit. There is no evidence or reported about hunting activities carried out by company’s worker. The company assigns personnel assistants (APK) in each estate to monitor plans associated with HCV and ERT species. However the organization (Gunung Pamela estate) has not revised the decree Gunung Pamela estate manager (No. KGPMA/SKPTS/06/2011, dated September 05, 2011) about the HCV monitoring team where the majority of it is personnel have been moved to another es-tate. In addition, personnel who have been trained of HCV are 2 person (assisten head) while others personil have no evidence that they have been trained of HCV. This was raised as a non-conformity during surveillance audit.

Waste products have been identified and categorized as hazardous and non-hazardous waste. Haz-ardous waste is stored in a dedicated store, with appropriate label and disposed of by a licensed com-pany. Generated hazardous waste includes used oil from the workshop and mill, used chemical con-tainers (packing), and old batteries. Non hazardous wastes include household waste. Records of dis-posal of wastes are available. The condition in the field (afd III – Bangun estate) that hazardous waste (neon) mixing with household waste on waste pit. This was raised as a non-conformity during surveil-lance audit. Plans to avoid pollution are in place (documented in Environmental Management Pro-gram) and include careful mixing of agrochemicals, diesel tank, bunding, a dedicated concrete waste store and bounded workshop, oil traps and controlled household waste disposal. During 1st surveil-lance audit (year 2011) was found that management of domestic wastes at Gunung Para estate and Rambutan estate requires improvement as there is evidence of burning of wastes, and in some housing areas domestic wastes are not disposed in the pits but scattered on the ground. Rubbish pits are also located directly adjacent to housing, where leaching into water sources may occur. Unfortunately, dur-ing 2nd surveillance audit (year 2013) this matter was happen again.

It was found that domestic waste was thrown directly into culvert or riverside, for example: 1. At Simbolon housing afdeling IV Bangun Estate, 2. At clinic side housing of Dusun Hulu Estate, 3. At Titi Payung Housing and Pondok 8 Gunung Para Estate, 4. Pondok Tengah housing at afdeling VI Kebun Rambutan Estate.

This non conformity was raised during last surveillance audit.



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It was found that hazardous waste such as fluorescent light was dumed not apart from domestc waste at afeling III Bangun Estate.

The company has a zero burning policy but there are no evidence that the company consistent for im-plemented zero burning policy as required by RSPO P&C because there was found waste burning ac-tivity in several places such as at :

1. Afdeling 6 and afdeling 4 housing and 1 palm oil tree get burned at Block 114 afdeling 6 of Dusun Hulu.

2. Afdeling III and afdeling IV housing of Bangun Estate.

3. Pondok 8 housing of Gunung Para Estate.

4. Pondok 7 afdeling 5 housing of Gunung Pamela Estate.

5. Pondok Tengah housing afdeling VI of Rambutan Estate (this was repetition of non conformity from last surveillance audit).

This non conformity was raised during last surveillance audit.

Renewable energy is generated in Sei Mangke mill such fibre and shell that produced from the mill ac-tivities. Records of monitoring of renewable energy used and its efficiency analysis were available at Sei Mangke mill. Estate has recapitulation of consumption fosil fuel records and eficiency analysis.

The company (estate) was no longer use fire for limited activities such as conversion of rubber planta-tion into palm oil plantation. For oil palm plantation activities. The company has a zero burning policy. The company (mill and estate) has available fire extinguishers and workers quarters (sand and emer-gency facilities also available) for potential emergency and fire.

The company (mill amd estate) has identification of pollution and emissions sources (include GHG (greenhouse gasses emissions) where in AMDAL document. Generated emission from mill activities such as chimney emission are monitored at least once every six months and regularly reported to local government. However, The company has no planning to reduce greenhouse gas emission from the company’s activities. This was raised as a non-conformity during surveillance audit. The SOP for mill includes detailed work instruction on handling of mill effluent, which includes details and specifications of effluent treatment pond facilities, specifications of raw effluent, description and methods for each step of effluent treatment process. Work instructions also include handling of rubber effluent (as mill al-so processes rubber). Compliance status: Non Complaince

NCR 20013-13 of 20 (Minor) Gunung Para estate (Afd II, IV and V) has not been socialization to the public, especially HCV 4 (river).

NCR 2013-14 of 20 (Minor) • The organization (Gunung Pamela estate) has not revised the decree Gunung Pamela estate man-

ager (No. KGPMA/SKPTS/06/2011, dated September 05, 2011) about the HCV monitoring team where the majority of it is personnel have been moved to another estate.

• The organization (Gunung Pamela estate) have not shown evidence that has conducted training for HCV monitoring team except assisten of head (2 person)

NCR 2013-15 of 20 (Major) • It was found that domestic waste was thrown directly into culvert or riverside, for example : 1). at

Simbolon housing afdeling IV Bangun Estate, 2). at clinic side housing of Dusun Hulu Estate, 3). at Titi Payung Housing and Pondok 8 Gunung Para Estate, 4). Pondok Tengah housing at afdeling VI Kebun Rambutan Estate (this non conformity was raised during last surveillance audit).

• It was found in the field (afd III – Bangun estate) that hazardous waste (neon) mixing with household waste on waste pit.


There is no evidence that the company implemented zero burning activities as required by RSPO P&C because there was found waste burning activity in several places such as at :

1. Afdeling 6 and afdeling 4 housing and 1 palm oil tree get burned at Block 114 afdeling 6 of Dusun Hulu.

2. Afdeling III and afdeling IV housing of Bangun Estate. 3. Pondok 8 housing of Gunung Para Estate 4. Pondok 7 afdeling 5 housing of Gunung Pamela Estate



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NCR 2013-17 of 20 (Major because was repetition of NCR from previous surveillance audit) The company (rambutan estate) has no plan to reduce greenhouse gas emission from the company’s activities.

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, , CR6.9, CR6.10 Criteria not assessed : CR6.6, CR6.7, CR6.8, 6.11

Findings:

PTPNIII’s Social Impact Assessment (SIA) document was developed by the Research Institute of the University of North Sumatra in 2009 for Sungai Mangkei Mill, Dusun Hulu estate, Gunung Para Estate and Rambutan estate. During this 2013 surveillance audit it was found that SIA report alreadyy includ-ing social impacts of the company on employees as one of the affected parties.

The documented long-term plan for Social Impact Management for Dusun Hulu Estate and Sungai Mangkei Mill which includes plan for management of social impacts such as public facilities, employ-ment and business opportunities already including details of time frames for implementation of the plan for year 2013.

The company has a communication book containing all records of communication and correspondence with various parties, including the community. Examples of records on the logbook of incoming mail in the Gunung Para Estate are as follows : 1. Letter on 22nd January 2013 No. 04/P/PK FTA/SBSI/SM/I/2013 from Worker Union of Sei

Mangkei Village regarding to request to be a partner of loading and unloading process at Sei Mangkei Palm Oil Mill.

2. Letter on 29th January 2013 from Banjar Hulu Village regarding to request for donation of office furniture and computer.

3. Letter on 24th April 2013 no. 413.1/02/2003/III/2013 from Dusun Hulu Village Head regarding to donation request for office furniture.

The company conducted an event to inform the estate workers union (SPBUN) about company’s work-ing agreement on 6 to 9 June 2011. The information presented including the implementation and eval-uation of Collective Labour Agreement (CLA) from 2010 to 2011, which includes the handling of em-ployee complaints. There is evidence of the participants list.

The company has materials regarding their conflict and land dispute resolution mechanism which can be implemented with affected parties. Meetings with held with local communites to inform them regard-ing their conflict resolution mechanism, i.e. for Paya Bagas Village, Sei Serimah, pertapaan, Sei Belutu, Sei Periuk, Sei Simujur, Sei Bamban villages on 20th June 2011. The company has a bulletin board with contact numbers for stakeholders if they wish to complain to the company, either by mail, electron-ic mail or telephone. However in this 2013 surveillance found that the contact number shown in the bill-board of complaint and grievance procedure can not reached because the number already change without information to the estate managers.

The company has a mechanism to handling complaint from stakeholder including workers. However, there is no record of complaint and handling upon complaint which had been reported by worker at Pondok 8 Gunung Para Estate.

Regarding to sexual harassment and violence policy, the company has a policy on sexual harassment and violence which is publicly published including for prevention of violence against woman.

FFB pricing mechanism at the mill is determined by the Directors Office based on current price of world CPO and kernels. The information is delivered to the mill in the afternoon between the hours of 5-6 pm and will be valid for the next day. There is no detailed explaination about pricing mechanism except conversion factor determination. Suppliers only receive current day’s FBB prices through SMS without explanation about its calculation based on existing price. There is also no information about FFB price calculation in the documented agreement between the mill and suppliers, as view from a sample agreement between the supplier, CV Ramayana, and Sei Mangke mill. At Sei Mangkei Mill, FFB rates put on the bulletin board near the front door of the security post. The price listed is only the current



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day’s price while the previous day’s price was not stated.

FFB payments are made every working day from Monday-Friday. Samples payments made to a suppli-er were sighted and there was a 2% income tax deduction for the payment, however these income tax cuts were not explained in the company’s agreement with the suppliers. This was raised as an observa-tion. The company maintains documentation consisting of proof of payment of expenses, deposits, FFB official payment report and details of acceptance / purchase.

The company’s documented SIA has been used as a reference design and implementation of commu-nity development programs. Social impacts identified include the availability and condition of social fa-cilities and public facilities, employment and business opportunities. One example of positive impact management of employment opportunities is the corporate priority to recruit employees from local resi-dents. There is a circular document to the village No. KDSHU/Afd/Bgn/54/2010 regarding openings to hire new permanent workers in 2010, dated December 30, 2010. This regulation still implemented in every estate in 2013. However, payment implementation of contractor’s worker need some improve-ment because it was found daily rate workers of CV Agung Sejahtera contractor at Gunung Pamela Es-tate got payment only Rp. 15.000 for 7.00-12.00 oclock working time, and CV Graha Wahana Perkasa at Rambutan Estate gained only Rp. 20.000 for 07.00-11.30 oclock working time. This matter was against Governor of Sumatra Utara Province Decree regarding to minimum wage of this pwovince which is Rp. 1,3350,000 per month. Compliance status: Non Compliance

NCR no. 2013-18 of 20 (Major) Billboar of complaint and grievance procedure can not use by stakeholder because : 1. Contained wrong telephone number 2. 3030 message center by short message service is no longer valid. 3. Suggestion box at afdeling 5 office - Gunung Pamela Estate can not be opened because the key

was missing.

NCR no. 2013-19 of 20 (Minor) There is no record of complaint and handling upon complaint which had been reported by worker at Pondok 8 Gunung Para Estate.

NCR no. 2013-20 of 20 (Major). It was found daily rate workers of CV Agung Sejahtera contractor at Gunung Pamela Estate got pay-ment only Rp. 15.000 for 7.00-12.00 oclock working time, and CV Graha Wahana Perkasa at Rambu-tan Estate gained only Rp. 20.000 for 07.00-11.30 oclock working time. This matter was against Gov-ernor of Sumatra Utara Province Decree regarding to minimum wage of this pwovince which is Rp. 1,3350,000 per month.

Principle 7: Responsible development of new plantings

Criteria assessed: CR7.1, CR7.2, CR7.3, CR7.4, CR7.5, CR7.6, CR7.7

Criteria not assessed: Findings:

There are new plantings i.e re-planting and plant conversion (from rubber/cacoa to oil palm) however not in the new land or extention lands so it has a environmental and social impact (EIA / AMDAL) document. The company (5 estate) periodically updates their environmental management program to consider all new and existing negative impacts, with the objectives to mitigate and minimize level of negative impacts. The company will periodically report its environmental performance to the local government every six months (Semester II, year 2012) where include re-planting or plant converting activity. Re-planting and plant conversion done in the area of the old/previous so the company has a land survey (maps of soil type, topography map, class of land, etc), appropriate with regional spatial, this area has been included in the area that has been carried out HCV assessment, there is no evi-dence the area is located on land belonging to another person so that there is no compensation, and implementation of zero burning. Compliance status : Compliance



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

Criteria assessed: CR8.1 Criteria not assessed: -

Findings:

There is evidence that the company has carried out improvement, including correction and corrective action from year 2012 (1st surveillance audit). The company has conducted a review for all improve-ments.

The estates and mill has a monitoring action plan for the year 2012 performance, which includes the targets and steps to take to reduce the usage of natural resources such as water, electricity, fossil fuel (petrol, oil and diesel) and paper documented in their Quality, Environment and Occupational Health Plan. The estates also carry out monitoring on achievement of targets and prepare a monthly report on review results / evaluation of quality, environmental and occupational safety and health objectives.

Compliance status : Compliance

3.2 Status of Previously Identified Non-conformities RSPO P&C

A total of 21 nonconformances were identified during the 1st surveillance assessment. These consisted of 18 major non-conformities and 3 minor 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 Certification System Clause 4.2.4 ; There are no significant land conflicts, no replace-ment of primary forest or any area containing HCVs since November 2005

Non-conformance 2011-01 of 21 (Major)

The company has not include their new development area i.e. Muara Upu site, located at South Ta-panuli into their time bound plan and the development of the area was not in accordance with Principle 7 and the NPP procedure as required by RSPO

Proposed Corrective Action year 2011 : The company is committed to monitor and evaluate the revised time bound plan. Company conduct NPP according to RSPO requirement and assign Sucofindo to conduct NPP assessment.

Verification result year 2013:

Sei Mangke Palm Oil Mill RSPO certificate was suspended before company complies with RSPO re-quirement for New Planting Procedure (NPP). The suspension letter was issued on May 02, 2012. Fol-lowing the suspension condition, PT Perkebunan Nusantara III made Social Impact Assessment (SIA), Environmental Impact Analysis (AMDAL=Analisa Mengenai Dampak Lingkungan) and High Conserva-tion Value (HCV) document for new development area in Muara Upu. New Plantation Procedure audit was done by RSPO approved CB i.e. Sucofindo on 10 to 12 December 2013 as stated on the audit plan and PT Perkebunan Nusantara III Director decree letter no. 3.12/KBN/MO/735/2012 and NCR report from Sucofindo, Suspension of RSPO certificate has been lifted on according to letter from TUV Rhein-land Malaysia to PT Perkebunan Nusantara III, dated on June 10, 2013.

Auditor Conclusions : Closed



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RSPO Certification System Clause 4.2.3 ; Progress of Schemed smallholders towards compliance with Scheme smallholder standards – should be in accordance to the 3 year implementation plan

Non-conformance 2011-02 of 21 (Minor) There is no program made by PTPNIII management for RSPO compliance of independent outgrowers that supply FFB to Sei Mangke Palm Oil Mill.

Proposed Corrective Action year 2011 : The company made a plan for RSPO compliance of all independent outgrowers that supply FFB to Sei Mangke Palm Oil Mill within the 2 next years, as stated in their document ‘RSPO Certification Schedule Year 2011 and 2012’ dated June 2011.

Verification result year 2013 :

The company has Memorandum of Understanding (MoU) with RSPO and IDH sustainable trade initiative (IDH) about sustainable palmoil production by independent smallholders (No. 3.12/MOU/01/2012, 002/MoU/RSPO-PTPN3-IDH/III/2012, PAL.01.2012.01, dated on March 15, 2012) and has 2 independet smallholders as object such as UD Bentasil and UD Lestari.

Auditor Conclusions: Closed. Criterion 1.1 (Major indicator 2) Records of responses to information requests.

Non-conformance 2011-03 of 21 (Major) As stated on the company’s work instruction IK-3.00-13/01 that all incoming requests for information will be recorded in a specific form, and records of response of information requested are to be maintained for a period of time determined by the company by considering the importance of its information. How-ever, there was was no evidence of the company’s responses to incoming requests for information from stakeholders since January 2011. Correction The company made their response to all incoming requests of information from stakeholders especially from the District Manager and Director as required by working instruction. Corrective Action taken: The company conducted retraining of their work instruction IK-3.00-13/01 for all employees to increase their understanding and inform them that it must be implemented.

Verification result year 2013 : The company already made response to all information request letter and keep the record as evidence. There is photo documentation of the training of implementation of IK-3.00-13/01 followed by related of-ficers.

Auditor Conclusions: Closed Criterion 2.2. (Major indicator 1) Documents showing ownership or lease of the land in accord-ance with relevant laws.

Non-conformance 2011-04 of 21 (Major) There is no evidence that PTPNIII management has taken action regarding their responsibility to resolve the difference in total area stated in their HGU for Sei Simujur division located in Rambutan estate (793.15 ha) and actual measurement result (1,133,35 ha) as required in a notification letter received from the National Land Agency. Correction : The company conducted remeasurement to determine the total actual area for HGU area in Sei Simujur, Rambutan Estate. There is a working plan for resolution of this land area difference for Sei Simujur



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Rambutan Estate, and the plan is dated June 30, 2011. Corrective Action taken: The company has developed the plan to resolve the difference in stated land area for Sei Simujur, Ram-butan Estate.

Verification result year 2013 : There is found re-measurement result conducted in year 2011 and Working plan has been available also in the estate, the implementation of working plan has not been able to show it can ben to solve land dis-crepancy between HGU and actual plantation area related Sei Simujur area. This is raised again as non conformties. Auditor Conclusions: Open, raised as NCR No.2013-04 of 17. Criterion 2.2 (Major indicator 2) Evidence that legal boundaries are clearly demarcated and vis-ibly maintained

Non-conformance 2011-05 of 21 (Major): No maintenance program has been established for all existing National Land Agency (BPN) boundary stones. The company has only identified the existing boundary stones but do not maintain them in the field. For example, at Dusun Hulu estate there is a report stating that there are 90 boundary stones with-in the estate. However during visit to the estate site, boundary stones no. 13, 14, 15 and 16 were not found. Correction: PTPN3 Management has issued an internal memorandum to replace all broken and missing boundary stones. A boundary stone maintenance program has been developed for all estates, as stated on the program the boundary stone will be maintained quarterly and six months once. Corrective Action: Each estate will monitor and evaluate condition of boundary stones periodically, as stated in the new boundary stone maintenance program. The report will be checked periodically by management repre-sentative and reported to BPN.

Verification result year 2013 : The company has plan and realization of the maintenance boundary stones for 1st semester (year 2013) of all boundary stone on land map (peta bidang tanah) from National Land Agency where was informed of number of boundary stone (version of National Land Agency and afdeling), current condition, pho-to/documentation, distribution of boundary stone on estate maps. Boundary stone No. 13, 14, 15, and 16 clearly demarcated on site. Auditor Conclusions: Closed. Criterion 2.2 (Major Indicator 2): Where there are, or have been, disputes, proof of resolution or progress towards resolution by conflict resolution processes acceptable to all parties are implemented; and Criterion 2.2 (Minor indicator 2): A mechanism to resolve conflict which is accepted by all par-ties.

Non-conformance 2011-06 of 21 (Major): (Remain as Major NCR from NCR no. 2009- 02 of 20 and raised to Major NCR no. 2009- 03 of 20) There is no progress for conflict resolution of land disputes between the company and affected parties such as such as Reformasi group in Marjanji village and a farmer group called Forum Tani Sejahtera In-donesia (FUTASI) in Bangun estate and no mechanism which is accepted by both parties to resolve the land conflict. The company has established a conflict resolution mechanism; however it is not recog-nized by affected parties. Correction: The company held a meeting with affected parties regarding conflict resolution, made an agreement



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which is accepted by these affected parties and results were distributed to them. Corrective Action: The company developed a plan for resolution of the conflict and to implement the plan accordingly.

Verification result year 2013 :

The company already sent invitation letter to all occupants including Marjanji Villagers, Buluh Duri Vil-lage Head, Gunung Pane Village Head and related local government. However Marjanji villagers did not attend this meeting because the invitation did not cover the Village Head.

For FUTASI, since the claimer did not attend to the scheduled meting the companrelated y used local government as mediator such as Bupati (District Head), Head of Local National Land Agency. There is an official meeting report as evidence that the company already use local government as a mediator in order to gain conflict resolution. The resolution still in progress with FUTASI. Auditor Conclusions: Closed Criterion 2.3 (Major indicator 2) Maps of an appropriate scale showing extent of recognised customary rights.

Non-conformance 2011-07 of 21 (Major) (Raised to Major NCR from NCR no. 2009- 04 of 20) A map of appropriate scale indicating the agreed areas for animal grazing as per the company’s negoti-ated agreement of animal grazing areas in PTPN III estates area as agreed with local communities, and maps of an appropriate scale showing extent of recognized customary rights, including the legal internal and external boundaries of others are not available. Correction: The company made agreement with villagers regarding locations for animal grazing and provided a map of appropriate scale with information on locations for animal grazing. There was an event held to inform the company staff regarding the agreement and specific locations for grazing, dated on June 20, 2011. Corrective Action: Observation, monitoring and evaluating results of implementation of the agreement will be carried out

Verification result year 2013 : All agreement for animal grazing accomplished with map in every available area for this purpose. Auditor Conclusions: Closed Criterion 4.1. (Major indicator 1) Operating procedures are appropriately documented and consistently implemented and monitored.

Non-conformance 2011-08 of 21 ( Major): As stated in the company’s work instruction for planning and management of plantation production and rehabilitation (“IK Perencanaan dan Pengendalian Realisasi Produksi dan Peremajaan di Tanaman - IK-3.01-18/01 Rev.02 Issued 06/05/2011”), all FFB transportation trucks shall be identified as certified sus-tainable palm oil (CSPO) transport trucks with the word ‘CSPO’ in white font and the company’s RSPO member on the truck. However this has not been implemented for all CSPO transport trucks.

Correction: All trucks transporting FFB from RSPO certified estates which supply to Sei Mangke mill has been iden-tified with CSPO marking including the estate name, according to IK-3-01-18/01. Corrective Action: Monitoring and evaluation will be carried out for all incoming FFB transporters which supply to Sei Mangke mill to ensure the marking on trucks is present.



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Verification result year 2013 : Truck transporation FFB from RSPO certified estates has been identified with CSPO marking (his writing of white colored) including the estate name on body of truck, example : CSPO KDSHU, etc. Auditor Conclusions: Closed

Criterion 4.3 (Minor indicator 1) Maps of fragile soils must be available

Non-conformance 2011-09 of 21 (Major) (Raised to Major NCR from NCR no. 2009- 07 of 20) There are no appropriate soil and hydrology maps available at all estates. The estates have only land system maps which were wrongly named as hydrology maps. Correction : The company made a soil map and revised the existing topography map including hydrology map as re-quired. Corrective Action taken: The company documented all maps related to company’s activities and the maps have been approved by relevant government officials.

Verification result year 2013 : The company has soil map, hydrology map, topography map, HCV map, fragile land map, etc. It is available in estate too. In soil map has informed soil type in all area, has scale that appropriate (1:18,409 and have been approved by relevant required. Auditor Conclusions: Closed Criterion 4.4 (Major indicator 1): Protection of watercourses and wetlands, including maintain-ing and restoring appropriate riparian buffer zones at or before replanting.

Non-conformance 2011- 10 of 21 (Major): There was found evidence of agrochemical application at river riparian buffer zone areas such as at Ma-lumbu River Pamela estate and watercourses in Dusun Hulu estate. Correction: Retraining to sprayers regarding avoidance of agrochemical application at river buffer zones was done on June 25, 2011. The company provided sign boards restricting agrochemical application at riparian river buffer zones. The company implements manual weeding for all riparian rivers buffers zones. Corrective Action: Monitoring and observation to ensure that company’s policy has been implemented will be carried out.

Verification result year 2013 : In Malumbu rivers (Gunung Pamela estate) and watercourses (Dusun Hulu estate) has made sign boards and sign of cross with red colour in trees as boundary agrochemical application at riparian river buffer zones and implementing manual weeding. The company was sozialitation/brief to employees on meeting morning about restricting agrochemical application at riparian river buffer zones. Auditor Conclusions: Closed Criterion 4.7 (Minor indicator 6) Evidence of OHS and first aid equipments available at worksites



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Non-conformance 2011-11 of 21 (Major) (Raised to Major NCR from NCR no. 2009- 11 of 20)

1) Some contracted workers at the mill were observed not wearing appropriate PPE, such as helmets, safety shoes or gloves.

2) Contracted sprayers at Rambutan estate also are provided with PPE such as masks and gloves, but no aprons or protective clothing are provided, and sprayers bring their PPE home to wash.

Correction The company issued warning letters to contractor to require use of PPE within the entry gate and inside mill area, stating that there is punishment for all workers that do not comply with this requirement starting June 15, 2011. Corrective Action taken: The company held a meeting with all workers and subcontractors on June 23, 2011 to inform them re-garding the use of PPE and placed sign boards and notification regarding requirements to use PPE.

Verification result year 2013 : During verification audit in mill, contractor workers has wearing appropriate PPE, such as helmets, safe-ty shoes or gloves and there is sign boards regarding requirements to use PPE in mill area. During veri-fication audit in Rambutan estate has provided PPE such as masks, gloves and aprons or protective clothing where could used by sprayers from contractor. Their PPE was washing in especially place (be-hind of division office).

Auditor Conclusions: Closed Criterion 5.2. (Major indicator 3) Measures taken for protecting species and their habitats must be in accordance with relevant laws and included actions to control any illegal or inappropriate hunting fishing or collecting activities.

Non-conformance 2011-12 of 21 (Major) There were some HCV areas found illegally planted with banana and cacao plantation such as areas near block 170 of Gunung Para estates and the riparian river zone of Sibarau Rambutan estate, as well as in the Nasakum (wet land) area. Correction All illegal plantations in HCV areas such as at riparian river buffer zones and Nasakum area has been destroyed, except for some areas in Nasakum which has wild bananas that were still kept as food for Long Tail Monkeys. All illegal plantation area has been replaced with local species of trees for conser-vation management. Corrective Action taken: The company made a program to monitor all HCV areas periodically to prevent re-occurence of illegal activities inside HCV areas.

Verification result year 2013 : In Gunung Para estate (block 170), illegally planted with banana and cocounut plantation has been de-stroyed (dated on June 25, 2011) and give compentation to Iskandar Sinaga. Verification to site that there are no banana and coconout plantation again but there are mahoni trees (Sweitenia mahagoni) as substitute it. Manager estate (Gunung Para estate) have made of preventive action for this conditions is land conflict inventory (include land conflict in riparian buffer zone).

In Sibarau (Rambutan estate), banana and cacao plantation has been destroyed. Verification to site that there are no banana and cacao plantation again but there are mahoni trees (Sweitenia mahagoni) as substitute it. There is statement letter from all growers that they will not plant again in area it.

Auditor Conclusions: Closed



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Criterion 5.2. (Minor indicator 2) Companies are to appoint dedicated and trained officers to monitor any plans and activities as above.

Non-conformance 2011-13 of 21 (Major): (Raised to Major NCR from NCR no. 2009- 13 of 20) There is no appropriately trained person assigned to monitor identified HCV areas. Correction: The company made a training plan for all Assistant Heads. There is email from HR Director no. 3-08/email/267/2011 regarding the HCV training plan. Training will be conducted on 11 to 20 July 2011.

Corrective Action: The company informed all workers and mandor regarding HCV area identification.

Verification result year 2013 : In Gunung Para estate has conducted HCV training on September 20, 2012 with 29 persons. There ara attendance list and training material. In Rambutan estate, there is representative (1 person) of HCV training (dated on 26-30 September 2011 and on 3 October 2012 has conducted HCV training amount 17 person (delegate from afd I-VIII). There are attendance list and training material. Auditor Conclusions : Closed Criterion 5.3 (Minor indicator 1) Management plan of hazardous waste and instruction of dis-posal of agrochemicals and their containers waste in accordance with the product label and existing regulations.

Non-conformance 2011-14 of 21 (Minor):

• Hazardous waste at Gunung Para estate store has been stored for more than 90 days without col-lection by a licensed contractors, which is not in compliance with the company’s license for storage of hazardous wastes

• Management of domestic wastes at Gunung Para estate and Rambutan estate requires improve-ment as there is evidence of burning of wastes, and in some housing areas domestic wastes are not disposed in the pits but scattered on the ground. Rubbish pits are also located directly adjacent to housing, where leaching into water sources may occur.

Correction: The company issued a letter no. 3/03/X/56/2011 dated on June 23, 2011 to the Environmental Office of North Sumatera (‘Biro Lingkungan Hidup Sumatera Utara’) requesting of extension for maximum time for hazardous waste storage to above 90 days, as their amount of collected hazardous waste is very small compared with total company’s area. The company developed a domestic waste disposal area far from water sources, and there is also sepa-ration between organic and inorganic waste. Corrective Action: The company shall coordinate with persons in charge for hazardous waste collection to ensure that there is no more storage exceeding minimum timeframe as per government requirements.

Verification result year 2013 : Found in the hazardous waste store (Gunung Para estate), a board with title “Neraca Limbah B3” listing monitoring stock of battery, oil, neon, toner, majun, oil filter, etc. Monitoring parameter are incoming, source of waste, quantity, maximum days keep (90 days) and status. On the board informed that stock of hazardous and toxic (B3) waste in the store not past the deadline that has been defined (max. 90 days). Dangerous and toxic (B3) waste has collected by a licensed contractor i.e PT Primanru Jaya (Minister of environmental decree No. 234 Tahun 2011 about licence of collecting dangerous and toxic (B3) waste).

Results of verification on site was found that domestic waste was thrown directly into culvert or riverside (for example : at Simbolon housing afdeling IV in Bangun estate, at clinic side housing of Dusun Hulu estate, at Titi Payung housing and pondok 8 in Gunung Para estate, at pondok tengah housing afdeling



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VI in Rambutan estate (this was repetition non conformity from last surveillance audit)), it was found that hazardous waste such as fluorescent light was dumed not apart from domestc waste at afeling III Bangun Estate, and there is no evidence that the company implemented zero burning activities as re-quired by RSPO P&C because there was found waste burning activity in several places (such as : at afdeling 6 and afdeling 4 housing and 1 palm oil tree get burned at Block 114 afdeling 6 of Dusun Hulu, at afdeling III and afdeling IV housing of Bangun Estate, at Pondok 8 housing of Gunung Para Estate, at Pondok 7 afdeling 5 housing of Gunung Pamela Estate, and at Pondok Tengah housing afdeling VI of Rambutan Estate (this was repetition non conformity from last surveillance audit)). Auditor Conclusions: Open, raised as NCR No. 2013-12 of 17 and No. 2013-13 of 17.

Criterion 5.4 (Minor indicator 1) Records of monitoring renewable energy use and its efficiency analysis (energy/ton CPO, or energy/ton palm product)

Non-conformance 2011-15 of 21 (Major) (Raised to Major NCR from NCR no. 2009- 14 of 20) There is no efficiency analysis of the renewable energy usage in Sei Mangke Palm Oil Mill Correction : The mill has made efficiency analysis for renewable energy usage generated from fibre and shell con-sumption. A monthly report has been provided and recorded on a form ‘Fibre and Shell Consumption Report and Efficiency Analysis’ for year 2010 period. Corrective Action taken: Monitoring and evaluation of fiber and shell consumption will be conducted every month.

Verification result year 2013 : The company has been provided of a monthly report and recorded fibre and shell consumption report and efficiency analysis for year 2012 period. Auditor Conclusions: Closed

Criterion 5.6 (Minor indicator 2) Records of efforts and strategies employed to reduce pollution and emissions.

Non-conformance 2011-16 of 21 (Minor): The company has not identified sources of greenhouse gasses emissions both from mill and plantation activities such as from fertilizer application, transportation and palm oil mill effluent production. The company has no plan to reduce greenhouse gas emission from the company’s activities. Correction: The company has identified sources of greenhouse gases emission both in Sei Mangke mill and all es-tates. The information has been recorded on an identification of environmental aspects and impacts document. The company has prepared a feasibility study for CDM implementation at Sei Mangke palm oil mill effluent pond. Effluent pond was identified as the biggest source of greenhouse gases in Sei Mangke mill, and through CDM project, the greenhouse gases released to atmosphere will be reduced Corrective Action: The company has informed all estate and mill officers including the workers to reduce fossil fuel con-sumption.

Verification result year 2013 : The company has been finished a feasibility study for CDM implementation at Sei Mangke POM effluent pond but there has been no development. In rambutan estate has no plan to reduce greenhouse gas emission from the company’s activities (this was repetition non conformity from last surveillance audit).

Auditor Conclusions : Opern, raised as NCR No. 2013-14 of 17 .



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Criterion 6.1. (Major indicator 1) Documented environmental and social impact assessment, including details of positive and negative social effects that may be caused by plantations and mills, and documented participation of affected parties and local communities.

Non-conformance 2011-17 of 21 (Major) The company’s SIA document does not include identification of social impacts of the company on em-ployees as one of the affected parties Correction Social Impact document has been revised to include social impacts to workers as required.

Corrective Action taken: Identification of all relevant parties to include in the SIA assessment and management plan was done.

Verification result year 2013 : The company’s SIA report already covering social impact on employees. Auditor Conclusions : Closed Criterion 6.1 (Minor indicator 1) Regular monitoring and management of social impact, with the participation of local communities.

Non-conformance 2011-18 of 21 (Major): (Raised to Major NCR from NCR no. 2009- 16 of 20) The company does not have a detailed action plan with time frames for management and monitoring of all identified social impacts in year 2011 as recommended in their SIA document. The existing follow up SIA document is only pertaining to responding to requests for donations from the community. Correction: The company made an action plan for all identified social impact including time frames and persons-in-charge to achieve the plan, as stated on document “. Dusun Hulu Estate and PTPNIII Sei Mangke mill Social Impacts Action Plan”. The plan also explains about planned activities, sources of impacts, loca-tions and timeframes for achievement. Corrective Action: A regular monitoring program has been made and make training has been conducted for all relevant workers.

Verification result year 2013 : SIA management plan already established including time frame and person in charge for implementation covering impact on employees.

Auditor Conclusions: Closed Criterion 6.9 (Major indicator 1) A documented company policy on sexual harassment and vio-lence.

Non-conformance 2011-19 0f 21 (Major) (Raised to Major NCR from NCR no. 2009- 18 of 20) The company has a policy on sexual harassment which is publicly published but does not have a policy for prevention of violence against woman. Correction Prevention of violence policy has been established, including a gender committee to accommodate grievance from woman workers. Corrective Action taken: Training about the company’s policy on prevention of violence against women was done on June 30,



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2011 including provision of information about the gender committee.

Verification result year 2013 : The company has a policy on sexual harassment infcluding prevention of violence against women. Auditor Conclusions: Closed Criterion 6.10 (Major indicator 1) Pricing mechanisms for FFB and inputs/services shall be documented (where these are under the control of the mill or plantation).

Non-conformance 2011-20 of 21 (Major) (Raised to Major NCR from NCR no. 2009- 19 of 20) There is also no information about FFB price calculation in the documented agreement between the mill and suppliers, as view from a sample agreement between the supplier, CV Ramayana, and Sei Mangke mill. There is also no detailed explanation about pricing mechanism except conversion factor determina-tion. Suppliers only receive current day’s FFB prices through SMS without explanation about its calcula-tion based on existing price. The company only announces current day’s FFB price, while the previous day’s price is not stated Correction : FFB price calculation has been explained in the agreement with CV Ramayana. The company revised all agreements with outgrowers to include information about FFB price calculation, as seen on example contract between Sei Mangke mill and a supplier. FFB price is announced daily including information about the previous day’s price. Corrective Action: The company will monitor and evaluates FFB pricing mechanism and will inform all suppliers of any changes of company policy or government regulation regarding FFB price.

Verification result year 2013 : The FFB calculation price already attached to work agreement between company and FFB suppliers. Auditor Conclusions: Closed Criterion 8.1 (Major indicator 1) A monitoring action plan based on the social environmental impact assessment, and regular evaluations of plantation and mill operations. As a minimum, these must include, but not necessarily be limited to waste reduction.

Non-conformance 2011- 21 of 21 (Major) The estates do not have a monitoring action plan for proper waste management and reduction or recy-cling of waste for continuous improvement. Correction : The company developed a domestic waste disposal area far from water sources, and there are also separation between organic and an organic waste. The company has made an action plan to monitor waste management and informed all workers and their families regarding waste management, waste separation (organic and an organic) and how to improve their housing environment.

Corrective Action taken The company training program of waste management to all workers and their families was done be-tween June to November 2011.

Verification result year 2013 : The company has a domestic waste disposal area where far from water sources and was done waste management training to all workers and their families (June-November 2011).




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3.3 Identified Non-conformances against RSPO P&C Requirements, Corrective Actions Taken and Audi-tors Conclusions

During this surveillance assessment, a total of 20 nonconformances against the RSPO Principles & Criteria Indonesian National Interpretation year 2008 were identified. These consisted of 9 major non-conformities and 8 minor non-conformities.

For the major non-conformances, the company has taken the necessary corrective action to close most of these non-conformances, and this was verified by the audit team through checks of documents submitted by the company.

For the major non-conformances, the company has taken corrective action against these as well, and 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 :

Criterion 1.1 (Major indicator 2) Records of responses to information requests.

Non-conformance 2013-01 of 20 (Major) (Remain as Major NCR from NCR no. 2011- 03 of 21) As stated on the company’s work instruction IK-3.00-13/01 that all incoming requests for information will be recorded in a specific form, and records of response of information requested are to be maintained for a pe-riod of time determined by the company by considering the importance of its information. However, there was no evidence of the company’s responses to some incoming requests letters : 1. Letter on 22nd January 2013 No. 04/P/PK FTA/SBSI/SM/I/2013 from Worker Union of Sei Mangkei Vil-

lage regarding to request to be a partner of loading and unloading process at Sei Mangkei Palm Oil Mill.

2. Letter on 29th January 2013 from Banjar Hulu Village regarding to request for donation of office furni-ture and computer.

3. Letter on 24th April 2013 no. 413.1/02/2003/III/2013 from Dusun Hulu Village Head regarding to re-quest of office furniture.

Correction :

• Send response letters to the Indonesia Labour Union, to the Head of Banjar Hulu Villageand to the Head of Dusun Hulu Vailage.

• Establishing record of the resposnes letter to stakeholder.

Corrective Action taken : The managers and administration Chief will ensure by implement monitoring schedule that all of incoming letter shall be responsed and the record shall be established. Auditor Conclusions : Closed Verification for Corrective Action: There is evidence of the receipt of was sent response letter and the record of response already estab-lished. Criterion 2.1 (Major indicator 1) Evidence of compliance with relevant legal requirements.

Non-conformance 2013-02 of 20 (Major) There is no evidence that PTPN III management has comply with decree of Ministry of Agriculture No.357/Kpts/HK.350/3/2002 article 17 & 18, paragraph 1 jo No.26/Permentan/OT.140/2/2007 article 27 & 28, paragraph 1 about the conversion of plants permit and production increased permit.



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Correction : Proposed conversion of plant permit and increased of production capacity permit to relevant institution. If authorized institution is province so request for issued of permit by law division but if authorized institute is district so request for issued of permit by estate manager. Corrective Action taken :

• Socialization of The Ministry of Agriculture decree No. 26 year 2007 in PT Perkebunan Nusantara III (level of management).

• Evaluating compliance with regulations and laws must be effective and the organization will be commit-ted follow it related IK.3.11/03/01 Rev.4, issued date May 01, 2012 (tittle : the management licencing for company level).

Auditor Conclusions : Closed with observation

There is internal communication letter from district manager to estate manager regarding Registration Letter of Plantation Busines (Surat Pendaftaran Usaha Perkebunan/SPUP) still valid (based on decree letter from Ministry of Agriculture No. 367/Kpts/HK.350/2002 article 22 jo Ministry of Agriculture No.26 Tahun 2007 ar-ticle 42) that the company only need plantation conversion permit and increase capacity of production per-mit (according to decree letter from Ministry of Agriculture No. 357/Kpts/HK.350/2002 article 17 & 18 para-graph 1 jo Ministry of Agriculture No.26 Tahun 2007 article 27 & 28 paragraph 1).

The company submit permit leter for Plantation Conversion in Bangun estate through decree letter from re-gent head of Simalungun No. 188.45/503/4172/IKT-PPT/2011 dated September 7, 2011 and notification let-ter no. 525/1206/Bun/2013, it was stated that plantation conversion has been comply with agroclimate for planting year 2001 to 2005. Furthermore the company has submit to government regarding proposal for permit letter regarding plantation conversion and increase capacity to relevant institution for Gunung Pame-la estate, Dusun Hulu estate, Gunung Para estate, Rambutan estate and Sei Mangke mill and will be moni-tor frequently the realization of issuing permit letter. The approval process regarding the permit can not be predicted, therefore the letter of request of permit is deemed necessary to close the finding. Criterion 2.1. (Minor) 1).A documented system, which includes written information on legal re-quirements that the palm oil company should comply with. 2).A mechanism for ensuring that com-pliance with relevant legal requirements is implemented

Non-conformance 2013-03 of 20 (Minor) There are no evidence that the company has carried out the identification and evaluation of compliance or fulfillment for Minister of Agriculture decree No. 26/Permentan/OT.140/2/2007, dated February 28, 2007 and Ministry of Manpower No. Per.04/Men/1985 (article 138 and 139). Correction : Conduct identification and evaluation and to include Minister of Agriculture decree No. 26 year 2007 and Minister of Manpower No. Per-04/MEN/1985 in list of laws and regulations.

Corrective Action taken: Up-dating the list of laws and regulations with consistency and evaluating all relevant legal requirements is implemented. Auditor Conclusions: Closed Criterion 2.2 (Major indicator 1) Documents showing ownership or lease of the land in accordance with relevant laws

Non-conformance 2013-04 of 20 (Major) : The company has not been able to show evidence/record realization of working plan to solve land dis-crepancy between HGU and actual plantation area related Sei Simujur area. Correction : Submit and documented evidences of realization of working plan regarding to difference of estate size be-tween land use right certification and actual size in the field.



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Corrective Action: Make a new program regarding to difference of estate size between land use right certificate and actual size in the field and realization of program it.


In the working plan year 2011 (June to December 2011 period) was informed about the stages to solve the problem such as internal coordination between General Affairs department, Plantation department to con-duct remeasurement process by internal surveyor including communication with national land Agency (BPN/Badan Pertanahan Nasional) North Sumatera for land descrapancy in Sei Mujur area. There is found evidence of internal communication such as internal memorandum letter regarding re-measurement from estate manager to legal department, risk management department, and letter from estate manajer to District manager Serdang 2 Legal department and Risk management departement as found on notification letter dated August 25 2008 regarding land descepancy case in sei Mujur area. There is also found re-measurement result Sei Simujur estate signed by Head of land Survey and maping National Land Agency. According to the result the company decide that there is no more problem regarding land descrapancy due to no changes made by BPN for estate map for HGU No. 1 Sei Mujur 793.15 ha the descrapncy is be-cause diffrerence measurent equipment used that affect to different accuration and revised HGU certificate process was stopped.

The company only revised their information in the area statement according to the latest information of to-tal Sei Simujur HGU area according to direction from BPN North Sumatera and has been communicated with BPN Serdang Bedagai for period year 2013 to 2015.

Criterion 4.4. (Minor indicator 1) An implemented water management plan.

Non-conformance 2013-05 of 20 ( Minor) : There are no signs of restriction for chemical application on the area of located near rivers/waterways such as the area of the waterways at the site Oplan (Gunung Para estate). Correction : Establish signboard containing warning for no chemical application near to water resources such as river-side.

Corrective Action : Make sosialisation about Sosialisasi regarding to disallowance of chemical application near to riverside and water resources. Auditor Conclusions : Evidence of immediate action taken was accepted. Effectiveness of imple-mentation to verified at next audit.

Criterion 4.5 (Minor indicator 1) Monitoring extent of IPM implementation including training

Non-conformance 2013-06 of 20 (Minor) Inconsistency between implementation with work instruction (WI), example : in work instruction explained that the spraying will be done when damage the nettle caterpillars in the category of middle but result of verification in field that still in the category of low/lightweight (1.7 catterpillars/stem and 3.08 catterpil-lars/stem) has been carried out spraying in Dusun Hulu and Bangun estate. Correction : - Corrective Action :

• Conduct pest management activity based on applicable work instruction. • Head of Division to monitor the plan of working from contractors who will do the spraying with chemi-

cals to cope pests so ensuring, has accordance with work instruction



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Auditor Conclusions : Evidence of immediate action taken was accepted. Effectiveness of im-plementation to verified at next audit.

Criterion 4.6 (Minor indicator 1): Documentary evidence that use of chemicals categorised as World Health Organisation Type 1A or 1B, or listed by the Stockholm or Rotterdam Conventions, and paraquat, is reduced and/or eliminated

Non-conformance 2013- 07 of 20 (Minor) : There still found paraquate dichloride in Rambutan estate warehouse while this has been restricted by PTPN3 management according to work instruction and circular letter. Correction :

• Paraquate dichloride remove from warehouse in Rambutan Estate

Corrective Action :

• Conduct monitoring to contractor’s workers during maintenance using chemical material. Sosialisation to contractor’s pertaining to disallowance of paraquat using.

• Head of Division to ensure that paraquate dichloride not using. Auditor Conclusions : Evidence of immediate action taken was accepted. Effectiveness of imple-

mentation to verified at next audit. The company made socialization and awareness training to 10 contractors companyregarding procedure for agrochemical application and prohibition to use paraquat. The training was conducted on July 17, 2013 as seen on the list of participant and minutes training and photograps. Criterion 4.6 (Major indicator 2) Records of pesticide use (including active ingredients used, area treated, amount applied per ha and number of applications)


• It was sight agrochemicals applications on the circle path immature plantation at block 104/year 2012 (Rambutan estate) whereas according to the work instruction (IK 3.01-17/01 Rev.7, dated on October 15, 2012) this activity is prohibited,

• The company can not shown list of chemicals used (including name of active ingredients and doses used).

Correction :

• Submit to Certification Body (CB) about recapitulation of the use of chemicals where it has included name of active ingredients and doses used.

Corrective Action :

• Conduct monitoring to contractor’s workers during maintenance activity upon immature crop. • Record of the use of chemicals available and accessible Auditor Conclusions : Closed

According to estate Manager decree letter (No.KRBTN/X/213/2013 tanggal 17 Juli 2013) to CV Wira Anda-lan Mandiri, there is exception for Sei Mujur estate to apply paraquate due to condition on the field need quick action for immature plantation year 2012. This is only temporary and will not longer used.

Rambutan estate has demonstrate recapitulation of the use of chemicals for the second quarter of year 2013 consist if herbicide, insecticide, and fungisicide for oil palm plantation indlucing information about ac-tivie ingredient, total area and doses. Criterion 4.7. (Minor indicator 2) Regular health examination by a doctor for workers in station or exposed to high risk work



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Non-conformance 2013-09 of 20 (Minor) Health monitoring for workers dealing with pesticides in Dusun Hulu estate such as sprayer not regularly monitored and examined by a doctor. Only selected worker send to Sei Dadap Hospital Correction :

• Conduct medical check up for workers using chemical material. • The organization made a planning for implementation of health examination for workers dealing with

chemicals so that regulary and monitored. Corrective Action taken :

• Follow up result of medial check up of the workers by periodical visit to the hospital • Communicated to the contractor related to the obligation to conduct medical examinations for sprayers. Auditor Conclusions : Evidence of immediate action taken was accepted. Effectiveness of imple-mentation to verified at next audit Criterion 4.7. (Minor indicator 4) Records of OHS training

Non-conformance 2013-10 of 20 (Minor) Found chemical clerk and his assistant not attended first aid training (Rambutan estate). Correction :

• Provide training regarding to first aid and chemical handling to related to chemical material workers Corrective Action taken :

• The organization make table monitoring for personil who have training about first aid and handling of chemicals.

• Make documentation of manual book of first aid • Make documentation of manual book of chemical handling

Auditor Conclusions : Evidence of immediate action taken was accepted. Effectiveness of imple-mentation to verified at next audit Criterion 4.7. (Minor indicator 5) Accident and emergency preparedness procedure

Non-conformance 2013-11 of 20 (Minor) Found 2 fire extinguishers were not available in the box outside chemical store and also other area such as infront fertelizer store (Gunung Para estate) Correction

• Provide fire extinguisher at chemical and fertilizer store • Conduct refill for exired fire extinguisher Corrective Action taken:

• Doing monthly monitor to fire extinguisher condition • Make official report of fire extinguisher usage Auditor Conclusions : Evidence of immediate action taken was accepted. Effectiveness of imple-

mentation to verified at next audit Criterion 4.7. (Minor indicator 6) Evidence of OHS and first aid equipments available at worksites



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Non-conformance 2013-12 of 20 (Minor) Found worker not having safety glass in block 134 (Dusun Hulu estate) as they said not suitable to be worn; Correction :

• Provide appropriate PPE to harvester • Increase discipline on the use of PPE where there are rewards and punishments

Corrective Action taken :

• Sosialisation of PPE using to the workers • Search for information safety glass comfortable and suitable

Auditor Conclusions : Evidence of immediate action taken was accepted. Effectiveness of imple-mentation to verified at next audit Criterion 5.2. (Minor indicator 1) Posters and signs warning of the presence of protected species are to be produced, distributed, and made visible to all workers and the community, including guidelines in handling them

Non-conformance 2013-13 of 20 (Minor): Gunung Para estate (Afd II, IV and V) has not been socialization to the public, especially HCV 4 (river). Correction: Doing sosialization to the community regarding to conservation area within Gunung Para Estate. Corrective Action: Make program of sosialization for society near HCV area (especially river). Auditor Conclusions : Evidence of immediate action taken was accepted. Effectiveness of im-

plementation to verified at next audit Criterion 5.2. (Minor indicator 2) Companies are to appoint dedicated and trained officers to moni-tor any plans and activities as above.

Non-conformance 2013-14 of 20 (Minor) :

• The organization (Gunung Pamela estate) has not revised the decree Gunung Pamela estate manager (No. KGPMA/SKPTS/06/2011, dated September 05, 2011) about the HCV monitoring team where the majority of it is personnel have been moved to another estate.

• The organization (Gunung Pamela estate) have not shown evidence that has conducted training for HCV monitoring team except assisten of head (2 person).

Correction : Make revision to decision letter comprise of recent HCV monitoring person incharge. Provide training to HCV monitoring team. Corrective Action : Make documentation about training to HCV monitoring team and Make scheduled monitoring to HCV monitoring personil team. Auditor Conclusions : Evidence of immediate action taken was accepted. Effectiveness of im-plementation to verified at next audit

Criterion 5.3 (Major indicator 2) Estates and mills waste management and disposal are imple-mented to avoid or reduce pollution



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Non-conformance 2013-15 of 20 (Major) :

• It was found that domestic waste was thrown directly into riparian river, for example : 1). at Simbolon housing afdeling IV Bangun Estate, 2). at clinic side housing of Dusun Hulu Estate, 3). at Titi Payung Housing and Pondok 8 Gunung Para Estate, 4). Pondok Tengah housing at afdeling VI Kebun Rambutan Estate (this non conformity was raised during last surveillance audit).

• It was found in the field (afd III – Bangun estate) that hazardous waste (neon) mixing with household waste on waste pit.

Correction:

• Establish waste management program by separate organic waste from hazardous waste and send haz-ardous waste to the hazardous waste store.

• The company developed a domestic waste disposal area far from water sources, and there is also sepa-ration between organic and inorganic waste.

Corrective Action:

• Socialization of handling waste to the employee and their family with effective and monitoring. • Make schedule of collection domestic waste and provide facilities and infrastructure. • Increase discipline on the handling domestic waste where there are rewards and punishments Auditor Conclusions : Closed There is internal letter from estate manajer to their assistance regarding waste control and management according to company’s environmental objective and target year 2013 including its action plan. Companies provide training material regarding domestic waste management such as photopgrap, list of participant and environmental management program for year 2013. The program consists of socialization, identification of waste disposal for anorganic and organic, waste collection process, organic waste man-agement and evaluation of program effectiveness.

It was verify internal letter from estate manager to the assistant regarding hazardouse waste management in housing area, it is not allowed to disposed and scattered in the housing environment and separated with other domestic waste.

Criterion 5.5 (Major indicator 2) Records of implementation of zero burning policy


There is no evidence that the company implemented zero burning activities as required by RSPO P&C because there was found waste burning activity in several places such as at :

1. Afdeling 6 and afdeling 4 housing and 1 palm oil tree get burned at Block 114 afdeling 6 of Dusun Hulu

2. Afdeling III and afdeling IV housing of Bangun Estate.

3. Pondok 8 housing of Gunung Para Estate.

4. Pondok 7 afdeling 5 housing of Gunung Pamela Estate.


Correction : Establish waste management program.

Corrective Action taken: Make sosialisation Republic Indonesia Law no. 18, 2008 regarding to waste management. Auditor Conclusions: Closed There is internal letter from estate manajer to their assistance regarding waste control and management according to company’s environmental objective and target year 2013 including its action plan.



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Companies provide training material regarding domestic waste management such as photopgrap, list of participant and environmental management program for year 2013. The program consists of socialization, identification of waste disposal for anorganic and organic, waste collection process, organic waste man-agement and evaluation of program effectiveness.

It was verify internal letter from estate manager to the assistant regarding hazardouse waste management in housing area, it is not allowed to disposed and scattered in the housing environment and separated with hazardouse waste and other domestic waste and prohibited to burn, separated with azardouse waste.

Criterion 5.6 (Minor indicator 1) Records of efforts and strategies employed to reduce pollution and emissions.

Non-conformance 2013-17 of 20 (Major escalation form NCR No.2011-16 of 21 (Minor)) : The company (Rambutan estate) has no plan to reduce greenhouse gas emission from the company’s ac-tivities. Correction:

Establish program of greenhouse gas emission reduction Corrective Action: Make documentation of implementatipn of greenhouse gas mitigation. Auditor Conclusions : Closed

Rambutan estate has provide working plan to mitigate GHG emission year 2013 such as, identification GHG sources, training for GHG emission to estate managers and estate staffs, distribution energy saving stiker in many places, AC and electrical instalation maintenance program, vechicle maintenance program, conservation program through planting forest tree in riparian, zero burning policy, air emission monitoring and measurement program, emergency and preparedness for land burning program and evaluation of pro-grams implementation.

It was sight realization conservation program for planting of forest tree di riparian river with total 13,826 tree until Juni 2010. The company also has standar operation procedure for inventarization, calculation balance, mitiation and reduction GHG. Criterion 6.3. (Major indicator 1) An open system, which is accepted by affected parties, to receive complaints and to resolve dispute in an effective, timely and appropriate manner.

Non-conformance 2013-18 of 20 (Major) Signboard of complaint and grievance procedure can not use by stakeholder because : 1. Contained wrong telephone number 2. 3030 message center by short message service is no longer valid. 3. Suggestion box at afdeling 5 office - Gunung Pamela Estate can not be opened because the key was

missing. Correction :

1. Revise the non valid phone number. 2. Ensuring 3030 sms center number good in service. 3. Replace the key of suggestion box

Corrective Action taken: Make sosialisation regarding to complaint and grievance procedure to stakeholder. Auditor Conclusions: Closed Company provides photograph and documentation about internal and external communication procedure and revise the telephone number 3030 was deleted for sms service. Company revised the hotline number replaced with suggestion box in all division office in Gunung Pamela. Company provide socialization and awareness training evidence regarding procedure for complaint for local communities such as workers, staff, head of village, and worker Union (SPBUN).



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Criterion 6.3 (Minor indicator 1) Records of handling of the complaints.

Non-conformance 2013-19 of 20 (Minor) : There is no record of complaint and handling upon complaint which had been reported by worker at Pon-dok 8 Gunung Para Estate. Correction: Make record of avery complaint and grievance from stakeholder in the log book o fcommunication with stakeholder. Corrective Action: Make Sosialisation to stakeholder regarding to communication method. Auditor Conclusions: Closed Criterion 6.5 (Major indicator 1) A documented company policy on sexual harassment and vio-lence.

Non-conformance 2013-20 of 20 (Major) It was found daily payment for workers of CV Agung Sejahtera contractor at Gunung Pamela Estate only Rp. 15.000 for 4 working hours (from7.00-12.00 am), and CV Graha Wahana Perkasa at Rambutan Es-tate only pay Rp. 20.000 for 3.5 working hours (from 07.00-11.30 am). This is against to Governor of Sumatra Utara Province Decree Letter regarding to minimum wage of North Sumatera province which is Rp. 1,350,000,- per month. Correction Establish basic calculation method of price decision for contract service based on working load and local government minimum wage. Corrective Action taken: Make investigation and evaluation upon wage payment implementation of contractor’s worker. Auditor Conclusions: Closed The company provides a table calculation of worker wages including premi allowance according to re-quired minimum wage. The table explain that there is adjustment from existing wage into Rp. 25,000,- for 4 working hours ( 7.00-11.00am). Now based on writen information signed by the worker in the recent wage receipt, the workers already accepted the wage which has been fulfill minimum wage required by lo-cal government.

3.4 Description of Supply Chain Management System The following is a description of the company’s supply chain management system according to the RSPO SCCS requirements, including non-conformities found.

1. Documented procedures

Findings:

Based on the company’s Director Meeting on December 21, 2010 (Director letter No. 3.12/Email/431/2010) jo Director decree No. 3.03/SKPTS/01/2012 (dated on January 2, 2012) the or-ganization has chosen to establish the Mass Balance (MB) option for supply chain certification system (SCCS).

The organization has integrated the SCCS System with Quality Management System Certification ISO 9001:2008 and Environment Management System ISO 14001:2004.

The organization has established and maintained a supply chain certification system procedure dated



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06 June 2011. The SCCS procedures covers the following : - Work Instruction of FFB purchased and processing from external parties (IK-3.03-12/01) - Work Instruction for reception of FFB at Palm Oil Mill (IK-3.03-01/16 Rev.03) - Work Instruction for Palm Oil Processes (IK-3.03-01/19) - Work Instruction of Palm Oil Product Storage (IK-3.03-01/24) - Work Instruction of sales palm oil certified to Belawan Instalation, PT Sarana Agro Nusantara, PT

IKN dan other parties (IK-3.03-07/02). - Work Instruction of planning and controlling production process and re-planting (IK-3.01-18/01) - Work Instruction of grading FFB (IK-3.03-04/01 Rev.06) - Work Instruction of Weighbridge

Form no. PB-25.01 is the transport document for used for certified FFB which is also stamped with ‘CSPO’ wording. Trucks used to transport RSPO certified palm oil have been marked as certified sus-tainable palm oil (CSPO) trucks.

Sei Mangke palm Oil Mill has appointed personnel who has the responsibility and authority to imple-ment the SCCS Requirements is Manager POM, vice of head and assisten (based on Director decree No. 3.12/SKPTS/16/2011 dated on June 30, 2011). Compliance status : Compliance

2. Purchasing and goods in

Findings:

Procedures regarding reception of certified FFB and goods is covered in the company’s Work Instruc-tion of FFB Purchased and Palm Oil Processes (IK-3.03-12/01 Rev.03) where informed about definition certified FFB and verify FFB sources. A person has been appointed to be responsible to check and en-sure the FFB quality and quantity as per purchase documents.

When receiving RSPO certified palm, personnel in the material warehouse are to verify the claimed category of the material under mass balance system, supplier supply chain certification number, and quality and quantity of products. The organization will identfy certified FFB and non certified FFB ac-cording to the following methods :

Category Certified FFB Non certified FFB

Transport documents Stamped as ‘CSPO’ No stamp Name boards Stated as CSPO Not stated as CSPO Transport form no. PB-25.01 CSPO Stamped No stamp Transport truck Marked with ‘CSPO’ sign No CSPO signs on trucks

The organization has established a procedure/mechanism for handling non conforming materi-al/documents and declassfying the RSPO material when the supplier supply chain certification number is found to be invalid. Compliance status : Compliance

3. Record keeping

Findings :

The organization has established a mechanism for control and maintenance of the data and document used in the implementation of the mass balance system. The retention time for all records and reports is at least for five (5) years. The storage and maintainance of documents is the responsibility of the re-spective departments. The organization has divided the records to be kept to three (3) categories of documents i.e. Active documents (should be stored at least for 1 years), inactive documents (should be stored for at least 1 – 5 years) and permanent documents (Should be stored for more than 5 years and under 30 years). All records pertaining to SCCS implementation are categorized as permanent docu-ments.



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The organization retains records and balances of certified palm oil received and deliveries on a monthly basis in ‘CPO Stock (“Neraca Minyak dan Inti Sawit”) form and ‘CPO Production’ (“Produksi Minyak Sawit and Inti Sawit”) form. All volumes of palm oil that are delivered are deducted from the material accounting system according to actual daily conversion ratios and delivery product from a possitive stock.

The mill has not outsources activities to an independent palm kernel crush. Compliance status : Compliance

4. Sales and goods out

Findings:

The sales and goods out mechanism of the company is described in their procedure of sales of RSPO certified palm oil made to Belawan Installation (storage tank in Belawan port owned by PTPNIII), PT Sa-rana Agro Nusantara (a trader of CPO and PK and sister company of PT PN3), PT IKN (a trader and sister company of PTPNIII only for rubber trading) and other parties (IK-3.03-07/02). The supply chain procedure of the company is also implemented for trading of rubber products. Records of all sold RSPO certified materials are recorded in material despatch forms, notifications on material quality and receipts of received palm oil.

The organization has ensured all invoices (Tanda Terima Penyerahan Kelapa Sawit) issued for certified palm oil has included information of name and address of the buyer, dates of when it was issued, de-scription of the products, model of supply chain, quantity the products and references to the transport documents.

Until present, organization has not yet sold their certified palm oil products as certified CSPO. Compliance status : Compliance

5. Training

Findings:

The company’s supply chain certification system training mechanism is covered in the training proce-dure (IK3.08-11/01 Rev.07). The organization has established and specified the training records as fol-lowed : - FM-3.08-11/01-01 Human resources Development Programs - FM-3.08-11/01-02 Training Plan/Schedule - FM-3.08-11/01-05 Training Attedance List - FM-3.08-11/01-08 Personal Training evaluation for the Training Implementation - FM-3.08-11/01-09 Training Evaluation - FM-3.00-01/02-01 Recapitulation of Document at Working Area

The organization has conducted supply chain certification system standard training for all Sei Mangke Palm Oil Mill employees (dated on June 24, 2011). Compliance status : Compliance

7. Claims

Findings:

Until present, the company still has not sold their oil palm products as CSPO. As the company has not made any sale of RSPO certified palm oil, it was not required to verify the accuracy of claims made by



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the company. Compliance status : Compliance

3.5 Status of Previously Identified Non-conformities RSPO SCCS

A total of 4 nonconformances were identified during the 1st surveillance assessment.

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.

SCCS Non-conformance ref.1.1 / 2011-1 of 4:

Findings: The company has not established a Policy for the selected Supply Chain Certification System (mass bal-ance), or assigned personnel who have the authority and responsibility for system implementation. Correction: The top management (Director) has made a statement policy about RSPO SCCS Corrective Action: Training about RSPO policy was conducted on June 23, 2011. Verification result year 2013 :

The company has provided the RSPO policy on implementation of mass balance and training evidence (material of presentation and attendance list). Based on the company’s Director Meeting on December 21, 2010 (Director letter No. 3.12/Email/431/2010) jo Director decree No. 3.03/SKPTS/01/2012 (dated on January 2, 2012) the organization has chosen to establish the Mass Balance (MB) option for supply chain certification system (SCCS)

Sei Mangke palm Oil Mill has appointed personnel who has the responsibility and authority to implement the SCCS Requirements is Manager POM, Vice of Manager and Assisten (based on Director decree No. 3.12/SKPTS/16/2011 dated on June 30, 2011). Auditor Conclusions : Closed SCCS Non-conformance ref. 2.1/ 2011-02 of 4:

There is no records of purchasing document for all certified FFB procurement inform about claim category, Identity Preserved, Segregated atau Mass Balance. Correction :

Purchase orders for RSPO certified palm oil or palm oil product bought by the mill do not specify the ma-terial category (Identity Preserved, Segregated or Mass Balance). Corrective Action : All purchase document now include information about certified balance and claim category Verification result year 2013 :

Certified FFB reception, personnel in the material warehouse are to verify the claimed category of the material under mass balance system, supplier supply chain certification number, and quality and quantity of products.

The organization will identfy certified FFB and non certified FFB according to the following methods :

Category Certified FFB Non certified FFB



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Transport documents Stamped as ‘CSPO’ No stamp Name boards Stated as CSPO Not stated as CSPO Transport form no. PB-25.01 CSPO Stamped No stamp

Transport truck Marked with ‘CSPO’ sign No CSPO signs on trucks Auditor Conclusions : Closed

SCCS Non-conformance ref. 3.1/2011-03 of 4:

The organization’s sales invoices do not include information on the applicable supply chain model (i.e. mass balance) and the organization’s SCCS certificate number.

Correction:

The company’s sales and delivery invoice format has been revised to include statement of supply chain model of product. The format also includes a space to state the organization’s SCCS number, which will be filled in after SCCS certificate number is granted. Corrective Action:

The company has conducted training to staff to include information on their selected supply chain model (Mass Balance) in all relevant sales documents. Verification result year 2013 :

The organization has ensured all invoices (Tanda Terima Penyerahan Kelapa Sawit) issued for certified palm oil has included information of name and address of the buyer, dates of when it was issued, de-scription of the products, model of supply chain, quantity the products and references to the transport documents.

Until present, organization has not yet sold their certified palm oil products as certified CSPO. Auditor Conclusions : Closed SCCS Non-conformance ref. 6.1/2011-04 of 4 : There is no evidence that the organization has conducted supply chain certification system standard training for all Sei Mangke Palm Oil Mill employees. Correction: An SCCS training was done on June 24, 2011, attended by 50 people from company’s staff Corrective Action: The company made an SCCS training program for semester 2 of year 2011. Verification result year 2013 :

The organization has conducted supply chain certification system standard training for all Sei Mangke Palm Oil Mill employees (dated on June 24, 2011). Auditor Conclusions : Closed

3.6 Noteworthy Positive Components

Positive observations on the company’s performance pertaining to RSPO compliance is as follows : 1. The company is carrying our enrichment planting with local plant species such as Mahoni, Pulai and Jabon

species at river borders 2. There is good cooperation from all parties during the audit.



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3. Mechanisms for stakeholder communication have been published in various public locations.

3.7 Issues Raised by Stakeholders and Findings Pertaining to Issues There are no issues raised by stakeholder during 2nd surveillance audit.

4.0 CERTIFIED ORGANISATION’S ACKNOWLEDGEMENT OF INTERNAL RESPONSIBILITY

4.1 Date of Next Surveillance Visit

The next surveillance visit is planned for June 30, 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 assessment findings and report content.

Signed on behalf of PT PN III …………………………………………. Tio Handoko, Head of Management System Date : September 04, 2013

Signed on behalf of TUV Rheinland Malaysia ………………………… Fadli Lead Auditor Date : September 04, 2013



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APPENDICES

Appendix 1(a): Details of Revised Certificate (if applicable) [Details of certificates to be included upon approval of ASA report and issuance of certificate]

Appendix 3: List of Abbreviations

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

CHRA Chemical Health Risk Assessment CPO Crude Palm Oil CSPO Certified Sustainable Palm Oil EIA Environmental Impact Assessment ERTs Endangered, Rare & Threatened species ESH Environmental Safety & Health FFB Fresh Fruit Bunches EFB Empty Fruit Bunches HCV High Conservation Value HGU Hak Guna Usaha (Land Use Certificate) HIRARC Hazard Identification, Risk Assessment and Risk Control IPM Integrated Pest Management IK Instruksi Kerja (Work Instruction) KBANG Kebun Bangun (Bangun estate) KDSHU Kebun Dusun Ulu (Dusun Ulu estate) KGPAR Kebun Gunung Para (Gunung Para estate) KGPMA Kebun Gunung Pamela (Gunung Pamela estate) KRBTN Kebun Rambutan (Rambutan estate) LTA Lost Time Accident MSDS Material Safety Data Sheets MB Mass Balance NGO Non-Government Organization OSH Occupational Safety & Health PKO Palm Kernel Oil POME Palm Oil Mill Effluent PPE Personal Protective Equipment PPKS Pusat Penelitian Kepala Sawit (Oil Palm Research Center) PSMKI Pabrik Sei Mangkei (Sei Mangkei Palm Oil Mill) PTPNIII PT Perkebunan Nusantara III RKL Rencana Pengelolaan Lingkungan (Environmental Management Plan) RPL Rencana Pemantauan Lingkungan (Environmental Monitoring Plan) SIA Social Impact Assessment SMK3 System Manajamen Kesehatan dan Keselamatan Kerja

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

Appendix 4: List of Stakeholders Interviewed and Contacted

No. Name of Institution - Address Remark



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Stakeholder

Stakeholders Interviewed On-Site

1. Ir. Eighbert SH Pakpahan Manager of Sei Mangkei POM 2. Drs Sovitar Siregar MASKEP of Sei Mangkei POM 3. Parel Gurning Asisten Pengolahan Sei Mangkei POM 4. Suhartoyo Asisten Personalia Sei Mangkei POM 5. Riadi Mandor Kebun Dusun Hulu 6. Clara Br. Sinaga

Petugas Kesehatan Kebun Dusun Hulu

7. Arifin Pembantu Kesehatan Kebun Dusun Hulu

8. Leliyana Petugas Kesehatan Kebun Bangun 9. Agus Chemical Clerk Kebun Bangun 10. Suhartono DECIS Kebun Bangun 11. Suharno Chemical Clerk Kebun Gunung Para 12. H. Tambal Siregar Manager Kebun Gunung Pamela 13. Rahmachandra

Asisten Kerani Gudang Kebun Gunung Pamela

14. Suyong Kerani Gudang Kebun Gunung Pamela

15. Sawaludin Siregar Genset Staff Kebun Gunung Pamela 16. Ir. Kasir Karo Karo Manager Kebun Rambutan 17. Mhd Aulia SP Asisten Afdeling VI 18. Suhartono Asisten Afdeling VII 19. Kamdi Mandore Pupuk

Appendix 5 : Observations and Opportunities for Improvement

No. Observations / Opportunities for Improvement Criteria

1 - -