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PT. MUTUAGUNG LESTARI

ASSESSMENT REPORT

Rountable on Sustainable Palm Oil Certification

[ ] Stage 1 [ ] Stage2 [√] Surveillance

Plantation Manager/Owner : PT IVOMAS TUNGGAL

Mill and Plantation Name : Nagasakti POM dan Nagamas Estate, Nagasakti Estate (PT. Buana Wiralestari Mas) dan Ramabakti Estate (PT Ramajaya Pramukti)

Location : Village of Sekijang and Petapahan Village, Sub-district of Tapung Hilir, District of Kampar, Province of Riau, INDONESIA

Certificate Code : MUTU-RSPO/012

Date of certificate issue : January, 13th 2012

Expiry date of certificate : January, 13th 2017

Assessment Date

Report Finalization Date

PT Mutuagung Lestari Auditor

Checked By Approved By

ST-2 04-07, 12/July/2011 12/August/2011

Aryo Gustomo Nanang Mualib Ibnu Satria. P

Octo H.P.N Nainggolan

Taufik Margani

Tony Arifiarachman

ASA-01 05 – 09/

November/12 16/January/2012

Octo HPN Nainggolan Ibnu Satria Prabudi;

Naila Karima; Bukti Bagja

Tony Arifiarachman

Mutuagung Lestari • Raya Bogor Km 33,5 Nomor 19 • Cimanggis • Depok 16953• Indonesia

Telephone (+62) (21) 8740202 • Fax (+62) (21) 87740745/6

Email : [email protected] ● www.mutucertification.com

MUTU Certification • Approved by RSPO Secretariat on June 2008

Submitted to RSPO Secretariat Approved by RSPO Secretariat on Approved by CB on

20 February 2013

19 December 2012

mailto:[email protected]

http://www.mutucertification.com/


ASSESSMENT REPORT

SPO – 4006a.4 i Prepared by Mutuagung Lestari for PT. Buana Wiralestari Mas – Nagasakti POM

TABLE OF CONTENT Page

Figure

Operational Map of PT. Buana Wiralestari Mas (Nagasakti Estate and Nagamas Estate) 1

Operational Map of PT. Ramajaya Pramukti (Ramabakti Estate) 2

1.0 SCOPE OF CERTIFICATION

1.1 National Interpretation Used 3

1.2 Organization Information 3

1.3 Type of Assessment 3

1.4 Locations of Plantations, Mill and Hectare Statements 3

1.5 Description of Supply Base 5

1.6 Cycles and Planting year 5

1.7 Tonnage Certified Product 6

1.8 Other Certifications 6

1.9 Time Bound Plans for Other Management Units 7

2.0 ASSESSMENT PROCESS

2.1 Certification Body 8

2.2 Lead Auditor and Auditor Team 8

2.3 Assessment Methodology, Progress, and Site Visit 9

2.4 Stakeholder Consultation and List of Stakeholder Contacted 11

2.5 Next visitation 11

3.0 ASSESSMENT RESULT

3.1 Summary of Assessment Report of the RSPO Certification 12

3.2 Summary of Assessment Report of Supply Chain 43

3.3 Checklist Conformity of Certificate and Logo Use 47

3.4 Summary of Time Bound Plan Verification of the RSPO Certification 48

3.5 Identification of Findings, Corrective Action, Observations, Opportunity for Improvement and Noteworthy Positive Components

49

3.6 Summary of Arising Issues from Public, Organization and Auditor Response 66

4.0 CERTIFIED ORGANIZATION’S ACKNOWLEDGEMENT OF INTERNAL RESPONSIBILITY

4.1 Formal Sign-off of Assessment Findings 70

ANNEXES

1 List of Stakeholder Contacted in the RSPO Certification Process 71

2 Audit Plan 72

3 Glossary 73


ASSESSMENT REPORT

SPO – 4006a.4 Page 1 Prepared by Mutuagung Lestari for PT. Buana Wiralestari Mas – Nagasakti POM

Figure 1. Operational Map of PT. Buana Wiralestari Mas (Nagasakti Estate and Nagamas Estate)


ASSESSMENT REPORT


Figure 2. Operational Map of PT. Ramajaya Pramukti (Ramabakti Estate)


ASSESSMENT REPORT


1.0

SCOPE OF CERTIFICATION

1.1 National Interpretation Used National Interpretation, RSPO Principles and Criteria for Sustainable Palm Oil Production, Republic of Indonesia - RSPO INA-NIWG, May 2008 and Supply Chain Requirement for CPO Mill.

1.2

Organization Information

1.2.1 Company Name IVO MAS TUNGGAL

1.2.2 Contact person Ismu Zulfikar

1.2.3 Business address

Head Office: Plaza BII Tower 2, 30th Floor JL. MH Thamrin No 51 Kav 22 Jakarta 10350 Indonesia Site: Sekijang Village and Petapahan Village, Tapung Hilir Sub-district, Kampar District

1.2.4 Telephone (+62-21) 318 1388

1.2.5 Fax (+62-21) 318 1389

1.2.6 E-mail [email protected]

1.2.7 Website www.smart-tbk.com

1.2.8 Type of enterprise Private

1.2.9 Application information completed by duly authorized representative

Ismu Zulfikar (Head of Environmental Departement)

1.2.10 RSPO member registration 17 June 2008

1.3 Type of Assessment

1.3.1 Certification scope Palm Oil Mill and Estate

1.3.2 Type certificate Single

1.3.3 Names of company covered in this certificate PT. BUANA WIRALESTARI MAS (PT. BWL) PT. RAMAJAYA PRAMUKTI (PT. RJP)

1.3.4 Number of management unit 1 (one) unit POM (Nagasakti Mill) which receives FFB Supply from Nagamas Estate (PT BWL), Nagasakti Estate (PT BWL) dan Ramabakti Estate (PT RJP)

1.4 Location of Estates, Mill and Hectarage

1.4.1 Location of Estate

Name of Estate Location

GPS reference

Latitude Longitude

Nagamas Estate (PT BWL)

Tapung Hilir Sub-district, Kampar District, Riau Province 00 47' 00.19” N 1010 06' 14.70” E

http://www.smart-tbk.com/


ASSESSMENT REPORT


Name of Estate Location

GPS reference

Latitude Longitude

Nagasakti Estate (PT BWL)

Tapung Hilir Sub-district, Kampar District, Riau Province

00 46' 12.69” N 1010 02' 46.95” E

Ramabakti Estate (PT RJP)

Tapung Hilir Sub-district, Kampar District, Riau Province

00 50' 32.88” N 1010 10' 19.56” E

1.4.2 Location of Mill

Name of Mill Location

GPS refernce

Latitude Longitude

Nagasakti Mill Tapung Hilir Sub-district, Kampar District, Riau Province

00 46' 59.58” N 1010 03' 01.03” E

1.4.3 Maps Figure 1 and 2

1.4.4 Country Indonesia

1.4.5 Region Southeast Asia

1.4.6 Village/Sub-district/District/Province Sekijang Village, Tapung Hilir Sub-district, Kampar District, Riau Province

1.4.7.1 Private

1.4.7.2 State 13,113.69 Ha

- Nagamas Estate 5,103.65 Ha *)

- Nagasakti Estate 5,106.25 Ha **)

- Ramabakti Estate 2,903.79 Ha ***)

*)

**)

***)

Based on Land Title Certificate No. 02/1995 Based on Land Title Certificate No. 02/1995 and Land Title Certificate No.01/1997 Based on Land Title Certificate No. 146, 147 and 148/2001

1.4.7.3 Community

1.4.8 Description of Land Use

Total areal 13,082.75 Ha

Mature area 12,732.27 Ha

Immature area - Ha

Mill and housing 69.1 Ha

Infrastucture (nursery, roads, etc) 190.38 Ha

Replanting Program - Ha

Occupation - Ha

High Conservation Value 498.21 Ha*)

- Nagamas Estate 231.87 Ha

- Nagasakti Estate 148.25 Ha

- Ramabakti Estate 118.09 Ha

*) including on the mature area


ASSESSMENT REPORT


1.5 Description of Supply Base

1.5.1 Estate

Name of Estate

Total Area (Ha)

Planted Area (Ha)

FFB (tonnes/yeaer)

Yield (tonnes/ha/year)

Pasokan ke PKS

FFB (tonnes/yeaer)

%

Nagamas Estate 5,103.65 4,988.48 150,383.25 30.15 138,111.24 38.95

Nagasakti Estate 5,083.19 5,037.51 151,209.48 30 148,407.31 41.85

Ramabakti Estate 2,895.91 2,706.28 77,394.05 28.59 16,512.67 4.66

TOTAL 13,082.75 12,732.27 378,986.53 29.76 303,031.22 85.45

Source: Estate data production period October 2011 – September 2012

1.5.2 Smallholder Scheme and Another Source

Smallholder Scheme Member(s) Location

Total Area (Ha)

FFB Production (tonnes/year)

Supplied to Mill

FFB (tonnes/yeaer)

%

Kijang Estate (PT. BWL)

- Sekijang Village - 57,716.47 22,118.93 6.24

Kijang Plasma - Sekijang Village - 360.05 360.05 0.10

Sungai Tapung Plasma

- Petapahan Village - 29,107.52 29,107.52 8.21

Dami Mas Estate - Petapahan Village - 7.1 7.1 0.002

TOTAL - - - 87,191.14 51,593.60 14.55

Source: Estate data production period October 2011 – September 2012

1.5.3 Deskripsi Pabrik

Name of

Mill

Capacity (tonnes/h

our)

FFB Processed (tonnes/year)

CPO PK PKO

Out put (tonnes)

Extraction (%)

Out put (tonnes)

Extraction (%)

Out put (tonnes)

Extraction (%)

Nagasakti Mill

60 354,624.82 78,762.17 22.21 19,823.53 5,59 - -

Source: Nagasakti POM production Period on October 2011 – September 2012

1.5.4 Type of Product FFB/CPO/PK /PKO

1.6 Planting Year and Cycles

1.6.1 Age profile of planted palms

Planting Year

Hectarage (Ha) Total

NMAE NSAE RBKE

1993 2,310.69 773.61 - 3,084.30

1994 2,151.07 3,003 - 5,154.07

1995 - 1,069 1,256.48 2,325.48

1996 - - 993.35 993.35


ASSESSMENT REPORT


1997 - - 456.45 456.45

1998 - - - -

1999 - - - -

2000 - - - -

2001 63.35 - - 63.35

2002 463.37 191.90 - 655.27

TOTAL 4,988.48 5,037.51 2,706.28 12,732.27

1.6.2 Area restocked by replanting after 2005 - Ha

1.6.3 Cycles 25 Year (s)

1.7 Tonnage Certified Product

1.7.1 Annual Actual Claims of Certified Product

FFB Production 349,285 Tonnes/year

CPO Production 85,574 Tonnes/year

Palm Kernel (PK) Production 19,210 Tonnes/year

Palm Kernel Oil (PKO) Production - Tonnes/year

1.7.2 FFB Certified Claim Production

Name of Estate (s)

Total Area (Ha)

Planted Area (Ha)

FFB Production (tonnes/year)

Yield (tonnes/year)

Nagamas Estate 5,103.65 4,988.48 155,961 31.26

Nagasakti Estate 5,083.19 5,037.51 154,918 30.75

Ramabakti Estate 2,895.91 2,706.28 21,074 7.79

TOTAL 13,082.75 12,732.27 331,953 26

1.7.3 Certified Production of Palm Oil Product Claim

Name of

Mill

Capacity (tonnes/

hour)

FFB Processed

(tonnes/ year)

CPO Palm Kernel PKO

Out put (tonnes)

Extraction (%)

Out put (tonnes)

Extraction (%)

Out put (tonnes)

Extraction (%)

Nagasakti Mill

60 331,953 76,349.19 23 18,257.97 5.5 - -

1.8 Other Certifications

1.8.1 ISO 9001:2008/ISO 14001: 2004 -

1.8.2 OHSAS 18001:2007 -

1.8.3 HACCP -

1.8.4 Other (s) - ISCC (International Sustainablity and Carbon Certification) since 3 Februari 2012 by GUTCert.


ASSESSMENT REPORT


- Certificates Gold Flag of SMK3 from PT Sucofindo since May 4, 2010

1.9 Time Bound Plan for Other Management Units

IVO MAS TUNGGAL has committed to making the time bound plan for the overall of another unit that is under management in applying the standard of the P & C or obtain RSPO certification and audit team has been considering this plan in accordance with the RSPO Certification System for Partial Certification. The development and follow-up of this plan will be verified and reported on an annual routine visit.


ASSESSMENT REPORT


2.0

ASSESSMENT PROCESS

2.1

Certification Body

PT Mutuagung Lestari Jl. Raya Bogor Km 33,5 No. 19, Cimanggis - Depok 16953 Telp. +62-21-8740202, Fax +62-21-87740745/46 Website: www.mutucertification.com

Email : [email protected] Approved by RSPO Secretariat on June 2008

2.2 Lead Auditor and Auditor Team

2.2.1 Auditor Team

ST2

1. Aryo Gustomo (Lead Auditor). 2. Nanang Mualib (Auditor). 3. Ibnu Satria Prabudi (Auditor). 4. Octo Hombar P. N Nainggolan (Auditor).

ASA-01 1. Taufik Margani (Witness Lead Auditor). Bachelor of Science in Forestry, majoring in Forest Management. Specialist in Ecology and Environmental. He has led several audits for Sustainable Forest Management in Indonesia (under LEI- Indonesian Ecolabel Institute and FSC- Forest Stewardship Council) and he is a Lead Auditor for FSC chain of custody and Forest Management. Other experience: He is IRCA Lead auditor IRCA registered for Environment Management System and Quality Management System. Since 1999 he has been working for independent certification body and has conducted Environment Management System audits in Indonesia and Malaysia. Currently he is the General Manager of Management System Certification.

2. Octo H.P.N Nainggolan (Laead Auditor Witnessed). A bachelor of Agriculture, majoring of Social Economics of Agriculture (Agribusiness). He has a working experience since 2004 oil palm Plantation Company in Indonesia. Trainings attended namely: Training of Conservation of Natural and Biological Resources in supporting HCV, Basic Plantation Management Program, Plantation Integrated Pest Management training, Followed the Management System Certification (ISO 9001-2008/SNI 19011-9001:2008), Environment Management System (ISO 14001:2004) , RSPO Lead Auditors Training Course, Indonesian Sustainable Palm Oil (ISPO) Lead Auditor training course and supply chain certification system training by BM Trada. Currently, he worked at Professional Certification Body. In the assessment activity, he assessed on legal aspect, best practices, environment aspect, social aspect, workers welfare, FFB Processing and supply chain requirement.

3. Ibnu Satria Prabudi (Auditor). Bachelor of Agriculture Majoring in Agro-technology, Agriculture Faculty of Instiper Yogyakarta. Currently he has been working with an independent certification agency as an auditor. Training he has followed are: Lead Auditor RSPO, Auditor ISPO, Lead Auditor ISO 9001;2008, Awarness HACCP certification, Awarness SQMS Mc Donald, In House Training Green House Gass, and he has engaged on the field test of ISPO standard and then has conducted several audit for sustainable palm oil certification as an Auditor. In this activity, he has assessed for best practices aspect and environment.

4. Naila Karima (Trainee Auditor). Bachelor of Public Health, Department of Occupational Safety and Health. Faculty of Public Health, University of Indonesia she attended training of understanding the RSPO certification system and Lead Auditor Training of ISPO. Besides certified Integrated Management System (Health and Safety Management System OHSAS 18001:2007 Occupational, Environmental ISO 14001:2004, ISO 9001:2008 Quality). She is currently working on an independent certification body. In this activity, she has assessed of OHS system aspect.

http://www.mutucertification.com/

mailto:[email protected]


ASSESSMENT REPORT


5. Bukti Bagja (Trainee Auditor). Master of Science in the field of Environmental Sciences, University of Indonesia. Training he has followed are: awarness of RSPO certification system. He has followed several activities GAP Analysis of the RSPO Principles and Criteria implementation in several oil palm plantations in Indonesia as assessor. Besides that he is also involved in several assessments HCV / HCV as an assessor with the specifications in the field of GIS (mapping). He has expertise in mapping such as ArcGIS, MapInfo, Global Mapper, ER Mapper, Erdas Imagine. In this activity, he has assessed for environment aspect and management of waste.

Curriculum Vitae (CV) of the auditor team available at Mutuagung Lestari’s office

2.3

Assessment Methodology, Progress, and Site Visit

2.3.1 Assessment Methodology

ASA-01 The assessment was conducted in three methods: (1) Document Review, aiming to observe the sufficiency of types or substances from required documents; (2) Interview, aiming to obtain more detailed information and cross check the information; and (3) Field Observation, aiming to observe directly the sufficiency of implementation on site. The scope of the certification activity is 1 (one) Mill (Nagasakti Mill) with 3 Estate for supply base of FFB namely Nagamas Estate (NMAE), Nagasakti Estate (NSAE) and Ramabakti Estate (RBKE). In assessing the audit team using the formula 0.8 √y to determine the focus of the estate sampling assessment. Based on the formula auditing team determines NSAE and NMAE for the estate sampling.

2.3.2

Estimate of person days to implement assessment

ASA-01 Number of auditors : 4 persons Number of days for ASA-01 at site : 4 days Number of working days for ASA-01 at site : 16 Main days

2.3.3

Detail of Assessment Process

ASA-01 The assessment was conducted by measuring the sufficiency of implementation with the consistency done by the Buana Wiralestari Mas (BWL-Nagasakti Mill Scope) to the requirements of National Interpretation of the Republic of Indonesia from RSPO Principles and Criteria for Sustainable Palm Oil Production (RSPO INA-NIWG, May 2008) and Supply Chain Requirement for CPO Mill Some directions for improvement of the results Annual Surveillance-1 delivered by the auditor MAL to the manager and the results are the subject of verification at the next assessment phase (Surveillance-2). The assessment processes please find Appendix 2. Improvement of findings from Main Assessment findings were observed by auditors at this first surveillance assessment. All information obtained was recorded in Check List of PT Mutuagung Lestari (MUTU) and part of Surveillance report.

2.3.4

Sampling Location of Assessment

ASA-01 The sampling locations which selected by Audit Team based on : 1. Number of sites visited, which is determined by the formula 0.8 √ y. 2. The sites selected represent each of operational working area. 3. The consideration of issues arising from the results of public consultations and document review activity that is fundamental

and crucial. The sites visited are completely presented as follows:


ASSESSMENT REPORT


Location 1 – Div I NSAE. The audit team conducted observation related to spraying activities, implementation of OHS at work area, remuneration, facilities and infrastructure provided by the company, the training has been given by the company and implementation of IPM.

Location 2 – Div I NSAE. The audit team conducted observation related to the harvest, K3 implementation in the workplace, wages, premiums (incentives), and facilities and infrastructure provided by the company.

Location 3 – Div I NMAE. The audit team conducted observation related to spraying activities, implementation of OHS at work area, remuneration, facilities and infrastructure provided by the company, the training has been given by the company and implementation of IPM.

Location 3 – Div I NMAE. The audit team conducted observation related to the harvest, K3 implementation in the workplace, wages, premiums (incentives), and facilities and infrastructure provided by the company.

Location 4 – Workshop NSAE. The audit team conducted observation related to the implementation of OHS in the work area, and fire-fighting infrastructure.

Location 5 –NSAE Hazardous Waste Storage. The audit team conducted observation related to the waste management, OHS implementation and hazardous waste balance.

Location 6 – Public Service (For example: housing, children care place and Clever Home). The audit team conducted observation related to public services for workers.

Location 7 – HGU Pole No. II and 370 NSAE. The audit team conducted observation related to the maintenance company boundaries clearly demarcated and maintained.

Location 8 – Blok A40 NSAE. The audit tema conducted observation related to EFB Application, water management in the peat land area and riparian management.

Location 9 – Nagasakti Mill. The audit team conducted observation related to the operational of Mill, OHS Implementation, and Fire facilities, First Aid, Storage of Hazardous Waste, Workshop and Hazardous Storage.

2.4

Stakeholder Consultation and List of Stakeholder Contacted

2.4.1 Summary of Public Consultation Process

Stakeholder public consultation was done in three 2 methods : (1) Public announcement in the RSPO website (www.rspo.org) minimum 30 days before ASA-01 conducted. (2) Conduct visits and interviews with stakeholders located in Kampar District and community. Public consultation

conducted on Novemberr, 05th 2012 (for stakeholders from relevant agencies) and November, 06th 2012 (for the stakeholders of the community and workers). A number of verbal inputs from stakeholders both positively and negatively received by the audit team as a material consideration in the assessment of surveillance 1.

2.4.2 The contacted list of stakeholders

Please find appendix 2

2.5

Next visit

The next visit (Surveillance 2) will be determined one (1) year later after ASA-01 conducted (October 2014)

http://www.rspo.org/


ASSESSMENT REPORT


3.0. ASSESSMENT RESULT 3.1. Summary of Assessment Report of the RSPO Certification

MUTUAGUNG LESTARI has conducted The Annual Surveillance Assessment 1 (ASA-01) to PT. Buana Wiralestari Mas

(BWL) with the scope consist one (1) POM and three (3) Estates. MUTUAGUNG LESTARI stated that PT. BWL has fulfillment

of RSPO Standard National Interpretation RSPO Principles and Criteria (P&C) for Sustainable Palm Oil Production, Republic

of Indonesia - RSPO INA-NIWG, May 2008. MUTUAGUNG LESTARI recommended of PT. BWL for RSPO Certificate was

maintained.

Ref Std. VERIFICATION RESULT of MUTU-Certification

PRINCIPLE #1 COMMITMENT TO TRANSPARENCY

1.1 Plantation and Palm Oil Factory have to give adequate information for stakeholders in appropriate language and forms, to ensure the effective participation of stakeholders in decision-making.

Company already has an SOP related to the provision of information that is contained in the SOP of Communication and Consultation (SOP/SPO/SMART/LH-19) dated 1 July 2010. Company has been consistently keeping records of all requests and provision of incoming information. All records of information requests are registered in the “Communication Book” while the records of information provision are registered in the “Information Book”. For example: the record of a written request of fieldwork practice from Head of Corporate and Placement of Polytechnic LP3I dated 19 June 2012 (Number of Letter 106/C&P/BI/LP3I-MDN/VI/2012). The letter was addressed to Estate Manager of Nagasakti. The letter was received on 5 July 2012 and responded on 16 July 2012. The storage of the document is specified in the SOP of Document Control and Validity (SOP/RJP/Dok) dated 5 February 2010 that describes: a. Validity period of the SOP is 3 years. b. Document retention time is 5 years. c. Based on the information from the management (Tito Y) the documents related to licensing, regulatory and corporate legal

documents are stored as long as the document of licensing, regulations and legal are still valid.

Status: Full Compliance

1.2 Management documents are publicly available, except where this is prevented by commercial confidentiality or where disclosure of information would result in negative environmental or social outcomes.

BWL has determined the types of documents that can be accessed by relevant stakeholders (there are 13 types of information). The types of information that can be accessed by public are:

- The number of employees and list of employees’ basic salary.

- List of employees, taxpayerregistration number and information related to Tax on Land and Buildings calculation.

- Payment of local taxes/retributions.

- Documents of EIA, Environmental Management Plan/Environmental Monitoring Plan and Land Application Permit.

- Deed of establishment and changes in the company, data of areas, production and manuring application.

- Proof of land ownership (Land Use Title, Building Use Title etc.).

- Identification report of HCV


ASSESSMENT REPORT


- Report of SIA (Social Impact Assessment).

- Documentation of social activities (CSR)

- Occupational accident report.

- Report of Guiding Committee of Occupational Health and Safety.

- Report of the implementation of Environmental management plan/Environmental Monitoring plan.

- Report of the Log Book/Balance Sheet of Hazardous Waste.


PRINCIPLE #2 COMPLIANCE WITH APPLICABLE LAWS AND REGULATIONS

2.1 There is compliance with all applicable local, national and ratified international laws and regulations.

Company has conducted training for spray workers of restricted pesticide (paraquat) held by Pesticide Committee of Plantation Agency of Riau Province (Sdr. Suratmo, SP) on 8 February 2011 and attended by the officers of Kijang Estate, Nagamas Estate, Ramabakti Estate, Rama-Rama Estate and Nagasakti Estate. Heavy equipment operators have obtained Operator License (SIO) for example: a. 17 persons in Nagasakti Estate, for example; Mr. Sumardiono has obtained operator certificate of Forklift and Conveying

with the type of Overhead Traveling Crane Class III with number of Certificate 09.2119/Otc/KK/XI/2009 dated 9 November 2009 valid until 9 November 2014 that was issued by Directorate General of Manpower Development and Inspection, Ministry of Manpower and Transmigration.

b. In Nagasakti Mill; document of Operator License (SIO) for NSAM operators is available including 11 persons with the following details:

- Boiler Operator :5 persons (Class I)

- Forklift and Conveying :2 persons

- Power and Production Operator: 1 person (diesel/genset)

- Power and Production Operator: 1 person (steam turbine)

- Welder: 1 person (Class II)

- Occupational Health and Safety Expert: 1 person (General OHS Expert) Company has compiled a Report on Investment Activity (LKPM) to the Center Investment Coordinating Board (BKPM), for example: a. Report on Investment Activity (LKPM) of PT. BWL was reported through the Letter No. 29/VI-II/AB.V/BWLM dated 20 June

2011 concerning the Report on Domestic Investment Activity for the report of second semester of 2010 which was accepted by relevant agency officer (BKPM-Head office) on 21 June (Moh. Horib).

b. Based on the information from the management, Report on Investment Activity (LKPM) of the first semester of 2011 is in the process of drafting by the central management.

Company already has a mechanism in evaluating the compliance with rules and regulations related to the management of oil palm plantation through SOP on Regulation and Other Requirements (SOP/SPO/SMART/LH-03) issued by ENVD (Environment Department) on 1 July 2010. The SOP explains that the evaluation of the compliance with regulation is conducted every 6 (six) months.

Company has determined the type of rules and regulations that has to be met by the plantation companies. BWL (Nagasakti Estate) classifies the types of rules that must be complied with as follow:

- Regulation related to the HCV (7 related regulations)

- Regulation related to the Employment (33 related regulations)


ASSESSMENT REPORT


- Regulation related to Environment (27 related regulations)

- Regulation related to Licensing (11 related regulations)

- Regulation related to OHS (42 related regulations) Company already has a mechanism in evaluating the compliance with rules and regulations related to the management of oil palm plantation through SOP on Regulation and Other Requirements (SOP/SPO/SMART/LH-03) issued by ENVD (Environment Department) on 1 July 2010. The SOP explains that the evaluation to the compliance with regulation is conducted every 6 (six) months. However, there are still several regulations that have not been updated due to the changes. For example: 1. Regulation of Agricultural Ministry No. 07 year 2007 Regulation of Agricultural Ministry No.24 year 2011 on the

requirement and procedures for pesticide registration. 2. Government Regulation No.18 year 1999 Government Regulation No.85 year 1999 on Amendment of Government

Regulation No.18 year 1999 on Hazardous Waste Management. 3. Government Regulation No.27 year 1999 Government Regulation No.27 year 2012 on Environmental Licensing. 4. Article 3 Regulation of Ministry of Manpower No.15 year 2008 on First Aid Emergency.

(Please See OFI. No.01).

Minor 2.1.2 Opportunity for Improvement No. 01

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

In land tenure, company has provided documentary evidence such as; a. Decree of Governor of Riau No. Kpts.08 PT.VI/1990 on reserve land covering approximately 22,000 hectares inSekijang

Villageof Siak Hulu Subdistrict, Kampar District for Oil Palm Plantation of PIR-Trans Pattern on behalf of PT. Buana Wiralestari dated 12 June 1990.

b. Decree of Head of Land Affair Agency of Kampar District No. Kpts.42/KP/VI/1995 regarding the location licensing on 6 June 1995.

c. Plantation Business Permit; 1. Principle Agreement No. KB.320/222/Mentan/VI/1988 on Principle Agreement of Oil Palm Development of PIR-TRANS

Pattern dated 8 June 1988 covering 15,000 hectares including 10,000 hectares of estate and 5,000 hectares of infrastructure, housing, yards and food crops that is valid for 12 months.

2. Principle Agreement of Plantation Business No. HK.350/E5.286/05.95 regarding the Agreement of Oil Palm Plantation Business Expansion covering 2,700 hectares in Siak Hulu Subdistrict, Kampar District of Riau Province dated 1 May 1995 (Nagasakti Estate).

a. Decree of Governor of Riau Province No.Kpts.559/K/1990 on reverse Land covering approximately 7,000 hectares in Siak Hulu Sub-district, Kampar District of Riau Province for the Development of Oil Palm Plantation on behalf of PT.BWL.

b. License of Forest Acquisition from the Minister of Forestry No. 108/Kpts-II/1991 dated 20 February 1991 on the Acquisition of a part of Forest Groups of Tapung Kanan River covering of 23,312 hectares which is located in Kampar District of Riau Province for the plantation cultivation on behalf of PT. Buana Wiralestari Mas.

c. Certificate of Land Use Rights (HGU) No.02 (Sekijang Village) dated 4 February 1995 equipped with Specific Situation Map Image No 09/1995 covering 7,193.809 hectares on 4 February 1995 which is valid until 31 December 2029.

d. Certificate of Land Use Rights (HGU) No.01 dated 29 September 1997 equipped with Measurement Certificate No 6036/SLN/1997 which is valid until 29 September 2032 covering 3,016 hectares.

e. Area hectarage distribution of raw materials suppliers of FFB of Nagasakti Mill is based on Land Use Title Permit as described in the chart below;


ASSESSMENT REPORT


Documents of land acquisition are completely available in the Company’s legal document in the forms of Statements Letter of Waiver, Minutes of Planted Land Acquisition of Sekijang Village, and receipts of land compensation by each recipient witnessed by Head of Land Affair Agency of Kampar District, 1stAssistant of Kampar District Office, Head of Subdistrict of Siak Hulu, and Head of Sekijang Village. Lists of Construction, Plants, and Land owners/workers Recapitulation are available whose compensation will be paid by PT. Buana Wiralestari based on the decision result of the Regional Committee Court of Land Acquisition of Kampar District on 17 March 1992 in Bangkinang, which outlines the Name of the Owners/Workers, Land hectarage, Land Location, Price of Compensation/m2, Total Amount of Compensation, Type of Compensation/Souvenirs, Type of Plants, Construction Compensation, Total Amount of Compensation and Signatures of the compensation beneficiaries.

BWL has been monitoring consistently the condition of boundaries pole. Company can show the Checklist of Boundaries Pole Condition Monitoring (National Land Agency) of Nagasakti Estate in 2011 and 2012. Maintenance program of BPN poles consists of poles monitoring, repairing, painting and cleaning the location. Based on the record of boundaries pole monitoring, the information shows that the 17 poles within the work area of Nagasakti Estate are in good condition.

In accordance with the results of ST1 and ST2 audit, until the time of surveillance 1, there were no indication of conflicts between the company and community in PT.BWL, either around Nagasakti Estate, Nagamas Estate or Ramabakti Estate (PT.RJP). The checking was carried out through interviews with SIA, CSR and RC Plasma officers then continued to cross-checking with the village sample, namely Kota Bangun Village. The result of cross-checking strongly indicated a good relationship between community and the plantation.

The pattern of the estate clearing with PIR-trans system followed by intensive coaching by the estate causes the level of public satisfaction with the plantation performance is quite high. Compensation process went well and was completed as described in the following criterion 2.2.4.

A number of steps the company has taken such as: placement of assistants and supervisors in each Village Cooperative Unit that work to apply the company’s agronomy standard, free leaf analysis, interest-free fertilizer credit program, replanting savings program, transparent BS pricing, rural assistance through CSR activities and so forth, can be accepted and got a very positive appreciation from public.

In accordancewith the result of ST1 and ST2 audit, land acquisition in the plantation area of PT. BWL especially Nagamas and Nagasakti Estate, along with Ramabakti Estate (PT. RJP) has completed in the early period of the development of estate. The verification in ST2 and additional samples check-up in Kota Bangun Village show that there are no more conflicts related to the public land acquisition.

The document of land acquisition is quite comprehensive in the company’s legal document that contains Waiver Statement, Minutes of Land Acquisition, and land compensation receipt of each compensation beneficiary. In accordance with the result of ST1 and ST2 audit, a mechanism of land conflict resolution is available (SOP/BWL/PKL) dated 5 February 2010 which in the completion steps following several stages and involving parties as described in ST2 audit, there were no internal changes until Surveillance 1 was implemented.


No. No HGU Tahun Estate Luas Estate dalam HGU

1 HGU No 02 1995 7,193.81 Ha Nagamas Estate 5,103.65 Nagasakti Estate 2,090.25

2 HGU No 01 1997 3,016 Ha Nagasakti Estate 3,016.00 3 HGU No 146 2001 805.31 Ha Ramabhakti Estate 805.31 4 HGU No 147 2001 1,365.41 Ha Ramabhakti Estate 1,365.41 5 HGU No 148 2001 733.07 Ha Ramabhakti Estate 733.07

Totall 13,113.69 Ha 13,113.69

Luas HGU


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2.3 Use of the land for oil palm does not diminish the legal rights, or customary rights, of other users, without their free, prior and informed consent

The same as at the time of ST2 implementation, that based on information of the management of PT. BWL and result of the interview with the head of village/community leaders of Sekijang and Koto Aman Village that are indigenous villages stated that: a. There is no ownership of traditional rights (customary land/ulayat) within the land use right of PT. BWL. In the process of land

acquisition during the estate clearing, the company involved community leaders and customary leaders (Nini Mamak) through villagers meeting.


PRINCIPLE #3 Commitment to long-term economic and financial viability

3.1 There is an implemented management plan that aims to achieve long term economic and financial viability.

Documents of the company’s long-term plans have not been changed since the Stage-2 was implemented. The company’s work plan documents include document of Company’s Work Plan of PT. Buana Wiralestari Mas, Period of 2010 until 2017. The documents have received approval from the top management (CEO PSM V – Mr. Fransiscus Costan). The documents consist of production forecast, FFB cost, Mill cost, palm product cost/kg, recapitulation of mill production (OER and KER) and other financial parameter. Legalization of the documents made by CEO PSM 5 (Fransiscus Costan). The documents include: production forecast, FFB cost, mill cost, palm product cost/kg, recapitulation of mill production (OER and KER), and other financial parameters. Company already has a replanting plan that will be done in 2017. The plan was then reviewed so the replanting plan was revised in 2017 to 2016. Change in the plan is a form of annual study conducted by the company relating to replanting activity. The study itself is conducted based on the plant age criteria, production estimates, price forecast, plant cost and height (according to the one of replanting criteria based on the SOP owned).


PRINCIPLE #4 Use of appropriate best practices by growers and millers

4.1 Operating procedures are appropriately documented and consistently implemented and monitored.

There are no changes to the operational SOP of the estates and mills. Nagasakti Estate still refers to the standard operational procedures (SOP) of the Technical Guide of Oil Palm Cultivation document, compiled by the team of MCAR (Management Committee Agronomy and Research), ratified on 5 May 2007. The document contains operational techniques of the estate from LC to harvest including environmental management, breeding, and plant planning. As for the mill operational, Nagasakti Mill still refers to the SOP document of Palm Oil Mill Processing of PT. SMART Tbk. In addition to the operational procedures Nagasakti Mill has also established procedures related to the product traceability (Supply Chain) in the form of Supply Chain SOP (PT BWL-KJGM/SOP/01), ratified on 2 January 2012 (a revision form of the previous procedure). All SOPs are available in each management unit and based on the field observation, the SOPs have been well implemented. It is proven with the results of interview with the workers in the field. BWL consistently continues to monitor the operational activities of the estate and mill at least once a year. The activities carried out are:


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- Agronomy Audit & Advisory (AAA). The scope of the activities of AAA is: Area Statement, Human Resources, Rainfall, Production, Production Quality, Harvest Standard, Mature Plant Maintenance, Manuring, Heavy Equipment, Truck, Workshop, Warehouse, Estate Safety, Production cost. The latest assessment was conducted in February 2012 (Nagasakti Estate). A

- Operations Internal Audit (OIA). The scope of the examination in OIA is: the bank’s cash administration and memorial, inventory, plant and plantation area maintenance, plant production, wage and personals. Conducted at least once a year by Department of Internal Audit. The latest examination was on 5 June 2012 (Nagasakti Estate).

- Mill Audit Advisory (MAA). The examination of MAA includes: Production, Processing Plan, Power and Consumable Usage, Controlling Process, Quality Control, Maintenance, Safety Equipment, Grading, Laboratory. This examination is conducted at least once a year by Department of Internal Audit. The latest examination was on 5-9 May 2012.

- Internal Audit related to the application of principles and criteria of RSPO. The latest assessment was on 6-10 August 2012. BWL also conducted a management review to the principles and criteria of RSPO. The management review was conducted on 10 October 201 to see the progress status of audit findings.

The operational activities of the estate and mill are always recorded and well documented by BWL. The records of operational activities of the estate and mill are:

- Record of the operational activities in Nagasakti Mill is in the form of Monthly Processing Report that includes: FFB Intake Statement, Production record, production and extraction statistic summary, production stock, monthly report summary, monthly laboratory report, water treatment and boiler chemical, ripple mill efficiency, staff and SKU labour, etc.

- Record of operational activities in Nagasakti Estate is in the form of Agronomy Monthly Report that includes: FFB Safety Report, Estate Safety report, Security Unit Report, Reception of Oil Palm Sprout Report, Pruning report, Insertion, Fertilizer Order and Supply, Manuring Application, Empty Fruit Bunch (EFB) Application, Effluent Application, Tyto Alba Application, Heavy Equipment Utilization, Non-Plant Capital, Weekdays, Manpower, Fertilizer Spreader, Progress of Land Clearing, Progress of Planting.


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

Company has had a record of soil analysis for each estate which is conducted every 3 (three) year. However, one of the staffs of SMARTRI (Smart Research Institute) explained that the implementation of soil analysis is conducted every 5 (five) year and is adjusted for planting year. Changes in duration of the soil analysis activity are done in order to ensure the soil fertility monitoring becomes better and more effective. Record activity of soil analysis includes physical (texture) and chemical fertility analysissuch as pH, C-organic, N total, backup elements of P and K, P element available, Cation Exchange Capacity (KTK), and so on.Soil sampling is conducted in accordance with the SOP (Work Instruction of Soil Sampling Unit (SSU) available that is 1 soil sample (soil sampling unit) represents 60 hectares. From 1 soil sample unit, the sampling is conducted at 3 (three) sample spots where every spot consists of 15 (fifteen) sample points. Company has also been conducting leaf analysis regularly, that is conducted every 1 (one) year. The leaf sampling (Leaf Sampling Unit) is conducted in accordance with sampling method in soil analysis. BWL has been consistently recording the activities of manuring, empty fruit bunch application. Manuring, empty fruit bunch application and land application are conducted based on the results of soil analysis and marginal land map owned by the company. For example:

- Empty fruit bunch application at Block A-40 Nagasakti Estate is applied at a dose of 60 tons/hectare.

- Land Application at Block G-40 Nagasakti Estate is applied covering 35.15 hectares of application area.


4.3 Practices minimize and control erosion and degradation of soils.


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Company already has a land map for each estate (Nagamas Estate, Nagasakti Estate, and Ramabakti Estate) which becomes an integral part of the document of Land Suitability Class. The document contains information about the land suitability class, slope, texture, limit factors, land width and classification. The land map is also equipped with the scale of 1:40,000 and legend. For example, for SPT 179 of Nagasakti Estate: type of soil Typic Haplosaprists; slope of 0-3%, level of peat maturity is Saprik; depth (solum) > 120 cm; peat depth 150-300 cm; level of drainage is rather poor; land suitability class is S3 (corresponding marginal); the limit factors are drainage and peat thickness; covering 234.71 hectares (4.6% of total area). Management strategies on the slope area conducted by the company are adapted to the available SOP on Preparation Before Planting (SMA/MCAR/03/05-07) that refers to Table 3.1.1 on Sloping Classification and terrace purposes. Based on the SOP land with the slope of > 40% is not recommended for planting. Document of plan and realization of road maintenance is available. The road maintenance is conducted by using heavy equipment (Greader). Until the surveillance-1 is carried out (up to October 2012) BWL (Nagasakti Estate) has conducted road maintenance as far as 168,000 meters. Based on the identification of land suitability, there are peat areas with a depth of < 3 meters at BWL work area. The company has done well managing the peat areas. Things done by the company to carry out management are as follow:

- Company has set a budget for managing peat areas, by allocating the budget for constructing/maintaining dams (water level) and observing Piezometer.

- BWL has provided maps of peat areas and water management.

- Company had been monitoring the water level, by maintaining water surface at the level of 50-70 cm. The latest observation of water level (on 29 October 2012) showed that the water was at the average height of 70.3 meters.

BWL (Nagasakti Estate) has been routinely conducting empty fruit bunch application to the areas identified as areas with low organic material content, low potassium content and tendto be sandy. For example at Block A 40 Nagasakti Estate. Considerations for determining application blocks are soil structure, increasing the K content of the leaves, and reducing MOP fertilizer.


4.4 Practices maintain the quality and availability of surface and ground water.

In accordance with ST1 and ST2, it is known that the company has made efforts to protect streams, wetlands and riparian streams through management policies such as Circular Letter from Vice President of Agronomy PSM 5 (No: 002/SE-VPA-5/RSPO/01/2010) dated 5 January 2010 on the Management of Watershed Area. The letter contains technical arrangements cultivation of the plants found in the watershed, namely 5 (five) oil palm tree on the left and right side of the river in order to be guided by the following: 1) Plant treatments do not use chemical substance (chemist) but it is carried out manually; 2) Manuring is not carried out mechanically (device or emdeks), but manually; 3) Planting erosion-preventing plants on the landslide-prone cliff. Following this circular letter, an SOP of riparian management has been issued with the Number: SOP/RJP/KSS ratified on 15 February 2010 by Vice President of Agronomy PSM 5 which contained a guideline of riparian management in plantation area of PT. BWL. In the surveillance 1, the company has also checked the progress of planting the erosion-barrier plants along the riparian which was conducted in 2011 and 2012. Based on the company’s report, the planting took place at five riparians inside the plantation area of Nagamas Estate and three riparians inside the plantation area of Nagasakti Estate. The selected plants this time are vertifier grass and Guatemala, since most of stream areas are shaded by oil palm trees. Planting the hard crop trees is planned for replanting period. Field-checking for the planting is done randomly in the riparian of


ASSESSMENT REPORT


Perbadoran River and Banal 1 River. From the field-checking, it can be certain that the warning signs for watershed protection are available, painting the border of chemical treatment to the oil palm trees, installing metal plates of chemical treatment borders, as well as planting erosion-barrier plants along the riparian. For the purposes of monitoring the progress of planting, the company has also compiled a recap of monitoring result of erosion-barrier plants in riparian that is reported every month. Recapitulation of planting (clumps) at six riparians until November 2012 is as follows (including planting and insertion): Result of planting monitoring in riparian:

No Type of Plants Banal River

Pijar River

Parbadoran River

Heloka River

Durian River

Banal 1 River

Kampas River

Cuko River

1 Vertifier 320 451 2065 380 382 300 200 200

2 Guatemala 68 165 425 0 134 600 400 400

For the purposes of maintaining the plants, company has made a report of the maintenance of the plants that is made every trimester. The company can show the maintenance reports of December 2011, March 2012, June 2012, and September 2012. The reports present information about the location of the riparians, planting space, time of the planting, and maintenance actions. In accordance with the results of stage 1 and stage 2 audit, under the surveillance at PT. BWL Nagasakti and Nagamas Estate, it is found that the company has continuously monitor the quality of surface water according to the applicable regulation, namely: - Quality monitoring of well water for consumption around the housing of estate and mill workers.

The monitoring is conducted regularly every 6 (six) months. The result of water quality monitoring for the latest period (2 July 2012) is available and can be shown, namely the result of the measurement by Health Service of Pekanbaru on 7 June 2012. Sampling locations are:

The well around the staff housing of Nagasakti Estate (1 sample)

The well around the staff housing of Nagamas Estate (1 sample)

The well around the workers of Nagasakti Mill (1 sample) Parameters of the water measured include physical characteristics (odor, turbidity, taste, temperature, color, TDS), organic chemistry (KMnO4), inorganic chemistry (iron, hardness, chloride, etc.), and biological (bacteriological). The result of the measurement showed that all parameters measured had met the quality standard threshold based on the Regulation of Health Ministry 416 Year 1990.

- Water quality monitoring in Water Treatment at the Palm Oil Mill. The water management program is conducted by the Mill, by manufacturing water treatment to get clean water for the processing of Fresh Fruit Bunch. There is a document that shows the monitoring of water volume used and the result of water quality measurement to be used for the processing of Fresh Fruit Bunch.

- The monitoring of surface water quality of the river stream that flows in the plantation (inlet and outlet). The monitoring is conducted in eight rivers that flow in the plantation namely: - Banal 1 River, Kampas River, and Cuko River in Nagasakti Estate. - Banal 2 River, Pijar River, and Parbadoran River, Heloka River, Durian River. The result of latest measurement shown are for Semester 1 year 2012 namely in February 2012 for Nagasakti Estate and on 22 May 2012 for Nagamas Estate. The tests were conducted in SMART Research Institute Laboratory in Kandis, Riau (accredited). Parameters measured were chemical characteristic of water included: pH, TSS, TDS, DO, BOD5, COD, NO3, NO2, NH3, Phosfor, Cu, Zn, Mn, Fe, Pb, Cd, B, Cl, SO4, and O&G. Table of surface water quality (inlet and outlet) based on the measurement on February and May 2012.

No Locations DO BOD5 COD O & G

in out In out in out in out

1 Banal 1 River 8 8 5 5 16 16 3 -

2 Kampas River 8 7 4 5 13 13 8 3

3 Cuko River 8 8 5 5 18 17 3 3

4 Banal 2 River 7 6 8 9 34 35 50 36

5 Pijar River 6 7 9 8 37 33 67 54


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6 Parbadoran River 5 6 10 9 40 38 65 39

7 eloka Hulu River 7 6 8 9 33 35 62 44

Quality Standard (PP 82/ 2001) 4 mg/l 3 mg/l 25 mg/l 1 mg/l

From the results of these measurement, it is known that a number of important parameters of river water which are: DO, BOD, COD have exceeded the quality standard in both inlet and outlet position as seen in the table above. This shows that the river water has been polluted from upstream, even before the water flows into the plantation area. Some of the measurement data of the river have been incorporated in the documents of Environmental Management Plan/Environmental Monitoring Plan, so in the next days, the company likely to improve the performance by including the results of monitoring of all the rivers in the Report of Environmental Management Plan/Environmental Monitoring Plan.

- Observing the quality of monitoring well water related to the liquid waste application in the Estate (LA). Associated with the use of Liquid Waste of Palm Oil Mill for the oil palm, company conducts the water quality monitoring in monitoring wells that have been determined. There are 3 (three) elements used to monitor the quality of ground water associated with the Liquid Waste of Palm Oil Mill in Nagasakti Estate from Nagasakti Mill. The measurement is conducted routinely every 6 (six) months by the Laboratory of SMART Research Institute in Kandis, Riau (accredited). Parameters measured were: pH, BOD5, NO3, Cu, Zn, Cl, Pb, Cd, DO, NH3, SO4, COD, and temperature. The result of the latest measurement available is the data for Semester 1 year 2012 whichwas performed on 2 February 2012. The measurement result generally shows that the water quality in the monitoring wells is in accordance with regulatory standard threshold according to Regulation of Ministry of Health No. 416/1990..

In accordance with the result of audit stage 2, the company has been monitoring the quality of effluent discharged into the Land Application site on a regular basis every month. The full report of the monitoring result for the first half of 2012 is available in the report of Environmental Management Plan/Environmental Monitoring Plan, coupled with the documents of monitoring/testing result for the month of July, August, September and October (as report materials for the second half of 2012). Measuring the quality of wastewater to be discharged to the land application conducted by Laboratory of SMART Research Institute in Riau (accredited laboratory) for the parameters: pH, TS, O&G, BOD5, COD, VFA, TA, N, P, K, Mg, Ca, Cu, Zn, Pb, Cd, NH32, and TSS.Here are the results of BOD measurement and comparison to the quality standard threshold that apply: BOD measurement result of wastewater for the last 3 months for Land Application in Nagasakti Mill.

No Month BOD(mg/l) Quality Standard

Threshold(Kepmen LH 29/2003)

1 August 2012 3.581 5000

2 September 2012 2.991 5000

3 October 2012 2.735 5000

In accordance with the result of the audit in stage 2, it is also known in the surveillance 1 that the monitoring of water use for processing in the mill is carried out every day. Daily data is then recapitulated in a month to be materials of report and analysis. In the document examination, the records of water use every month can be shown in a form of Recapitulation Document of Water Use and Distribution Year 2012 for Nagasakti Mill, PT. BWL, for the period of January-September 2012. Based on the monitoring data, the use of the water for the mill is still under the budget has been set, namely: Water use ratio table with FFB tonnage every month in 2012.

Pengunaan Air (M3/Ton TBS)

Jan Feb Mar Apr Mei Jun Jul Aug Sept

Actual 0.94 0.84 0.86 0.83 0.77 0.87 0.69 0.75 0.7

Budget 1.11 1.11 1.11 1.11 1.11 1.11 1.11 1.11 1.11

In addition, a number of water-saving measures have been taken as in audit stage 2 is still running, such as: socializing the efficiency use of water, recycling the turbines cooling water to the dam to be reused in the mill processing, monitoring water usage per day/week/month, and recapitulating data of processing with domestic water use separately.


ASSESSMENT REPORT



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

Company already has an IPM program in each Estate (Nagamas Estate, Nagasakti Estate, and Ramabakti Estate) that has been incorporated into the company’s operational budget, such as: 1. Pest and Disease Management Program in 2012 of Nagasakti Estate include: detecting nettle caterpillars, rat attack

census, maintaining host plants, checking Tyto Alba’s cage. 2. Pest and Disease Management Program in 2011 of Nagamas Estate include: detecting nettle caterpillars, rat attack census,

maintaining host plants, checking Tyto Alba’s cage. 3. Pest and Disease Management Program in 2011 of Ramabakti Estate include: detecting nettle caterpillars, rat attack

census, maintaining host plants, checking Tyto Alba’s cage.

Company has recapitulated monitoring records of IPM extent in Nagamas Estate, Nagasakti Estate, and Ramabakti Estate in 2012. The information obtained from the recapitulation is about the extent of beneficial plant maintenance and treatment/checking tyto alba’s cage (gupon). For example: monitoring record of IPM extent in Ramabakti Estate; treatment of biological control agents in 1 block six points (antigonon leptopus) with the area covering 30 hectares, the number of gupon until June 2011 is 237 units. Based on the field visit in Nagamas Estate, Nagasakti Estate and Ramabakti Estate, there has been sufficient evidence that the company has implemented IPM. The antigonon leptosus has been planted on each corner of the block along with Nephrolepsis that has been planted inside the block. BWL has also conducted training on integrated pest management in Nagasakti Estate Building (NSAE) on 8 February 2010. The training was performed by SMART Research Institute of Riau Region. The training was served for all estates (Nagamas, Nagasakti and Ramabakti Estate). Monitoring record of pesticide toxicity in Nagasakti Estate in 2012 is available. For example: pesticide toxicity monitoring (active ingredient/LD50 per ton FFB for Rolls Up S pesticide equals to 0.000010273 liters/ton FFB).


4.6 Agrochemicals are used in a way that does not endanger health or the environment. There is no prophylactic use of pesticides, except in specific situations identified in national Best Practice guidelines. Where agrochemicals are used that are categorized as World Health Organization Type 1A or 1B, or are listed by the Stockholm or Rotterdam Conventions, growers are actively seeking to identify alternatives, and this is documented.

A list of pesticides used by BWL (Nagasakti Estate) is available, namely: 1. Roll up. Active ingredient: Isopropilamina Glifosat. RI. 2133/4-2009/T. License period until 30 April 2014. 2. Rolixone. Active ingredient: Paraquat diclorida. RI. 2467/5-2006/T. License period until 27 June 2011. 3. Starane 250 EC. Active ingredient: Fluroxypyr methylhepty ester. RI. 3155/3-2008/T. License period until 10 August 2014. 4. Erkafuron. Active ingredient; Metsulfuron Methyl. RI. 2450/5-2006/T/ Licensed priod until 27 June 2011.

Based on the Book of Agricultural and forestry pesticides issued by Directorate General of Fertilizer and Pesticides Directorate General of Agricultural Facilities and Infrastructure of the Ministry of Agriculture of Republic of Indonesia, it is known that all types of pesticides used by PT. BWL have been registered. Record of pesticides used by PT. BWL (Nagasakti Estate) in the form of recapitulation of agrochemical use is available. For example: Record of pesticides used in 2012 in Nagasakti Estate.


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- Roll up; Dose: 0.2413 liter/hectare; active ingredient glyphosate; rotation 2 times/year; area applied 5,037.5 hectares.

- Rolioxone; dose 0.2138 liter/hectare; active ingredient paraquat; rotation 1 time/year, area applied 5,037.51 hectares.

- Erkafuron; dose: 0.0222 liter/hectare; active ingredient metyl metsulfuron; rotation 2 times/year; area applied 5,037.51 hectares. Erkafuron;

- Starane; dose 0.0003 liter/hectare; active ingredient Floroksifir; rotation 1 time/year area applied 24 hectares. Company already has a documentation of the use of agrochemical materials that provides information on the target species and the dose used by PT.BWL (Nagasakti Estate). For example: Documentation of the use of agrochemical materials in 2012 in Nagasakti Estate.

- Roll up;active ingredient: Glyphosate; dose: 0.2413 liter/hectare; target weeds: broadleaf and narrowed.

- Rolixone; active ingredient: paraquat; dose: 0.2138 liter/hectare; target weeds: broadleaf and fern.

- Erkafuron; active ingredient: metal metsulfuron; dose: 0.0222 liter/hectare; target weeds: broadleaf and woody. Company has conducted training for the use of agrochemical materials. This was evidenced by the attendance list of participants and the materials presented. To perform pesticide packaging waste management, the efforts made by the company are: 1. SOP (SOP/BWL/LBH revision 01) concerning waste management in particular pesticide used packaging waste. 2. BWL has obtained Permit of Hazardous Waste Temporary Warehouse for PT. Buana Wiralestari Mas through Decree of

Head of Environment Bodies of Kampar District No: 660/BLH-WAS/13 valid for 5 years (there is also evidence available of re-license permit of hazardous Waste Temporary Warehouse of PT. BWL. There are 3 points allowed:

- Nagasakti Mill with a size of 2 m x 4 m x 3.5 m, with the coordinates of 000 46’ 56” N and 1010 03’ 08.4” E.

- Nagamas Estate with a size of 4 m x 8 m x 3.5 m, with the coordinates of 000 47’ 06” N and 1010 06’ 10.7” E.

- Nagasakti Estate with the size of 7 m x 8 m x 4 m, with the coordinates of 000 46’ 10.7” N and 1010 02’ 47.6” E. 3. Managing the used packaging of pesticide is done by washing before storing it in the central warehouse of Nagasakti Estate

to be returned to the supplier later. For example: Minutes of Handover Packaging Ex-Pesticide dated 13 September 2012 informs that there were 17 jerry cans of ex Rolixone. The minute was signed by the Division Assistant, PIC RSPO and Senior Manager of Nagasakti Estate.

4. BWL restored the waste of used packaging to the supplier (Rolimex). There is a Minute of the handover of Ex-Pesticide packaging available dated 29 October 2012 which was signed by Nagamas Estate Manager and from Rolimex. Basedon the minute, the used packaging restored to the supplier were 753 bottles of Ex-Erkafuron; 341 bottles of Eks-Starane; 172 jerry cans of Eks-Rollixone and Roll Up; 9 jerry cans of Ex-Regent.

5. BWL has also reported the activities of hazardous waste management (including chemical waste) to the relevant institution every 3 months. For example: Report of The Third Quarter in 2012 presented to the Head of Environment Bodies of Kampar District on 29 October 2012.

BWL (Nagasakti Estate) consistently reduces the use of paraquat every year. This is proven by the chart data of paraquat use in NSAE. Information obtained from the graph is that the use of paraquat in NSAE estate has been decreasing every year. See the graph of paraquat use in NSAE from 2009-2012 below:

19231504 1653 1535

0

1000

2000

3000

Year 2009 Year 2010 Year 2011 Year 2012


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BWL (Nagasakti Estate) has conducted 2 medical screenings for the spray workers on 10-11 February 2012 that included physical examination (respiratory, toxicity and irritation) and on 25-27 June 2012 that included specific examination (urine, blood, Rontgen). The results of the workers medical screenings showed that all spray workers’ health have been examined. For example: From the medical screening, Mrs. Suci (spray worker of Division I) is known to be healthy. Company already has a policy on the prohibition of female spray workers who are pregnant of nursing to work, issued by the Vice President of Agronomy PSM V No. 001/SE/VPA5/12/08. Based on the result of regular medical screening for spray workers in central clinic, there is no evidence of the existence of the pregnant or nursing female spray workers. Company also conducted prenatal care for female workers and if through the medical screening there are pregnant female workers found, then they will be moved to an area that is not in keeping with chemical materials.


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

There is a Policy of Occupational Health and Safety available in Nagasakti Mill which was ratified on 2 July 2012 and OHS Policy in Nagasakti Estate which was ratified on 2 January 2012. The policy is a change from the existing one. The change was done based on the result of the review conducted regularly by the company. The change was about the amendment of Regional Controller as there were no changes for the content of the policy. From the result of the interview with SPO PIC in the Mill and Estate, the dissemination of OHS policies in Nagasakti Mill and Nagasakti Estate were conducted through notice board media and verbally made during the morning circle (briefing prior to the commencement of the work).

Based on the result of field visit, the implementation of OHS in Nagasakati Mill and Nagasakti Estate includes the establishment of Guiding Committee of Occupational Health and Safety, the use of PPE for workers, installation of warning signs, training, socialization, etc. However, there are still signs of hazardous materials and hazardous waste that are incompatible with the types of hazardous materials and hazardous waste existing. For example in Nagasakti Estate, in oil storage there is a symbol of flammable liquid material attached, and in the Temporary Hazardous Waste Warehouse there is a symbol of explosive hazardous waste attached. PT. BWL is expectedly able to review the installation of the symbols of hazardous materials and hazardous waste according to the applicable regulation.(Opportunity for ImprovementNo. 02)

In 2012, structure of Guiding Committee of Occupational Health and Safety of Nagasakti Mill and Nagasakti Estate held a change of management personnels. The company has filed the new structure of Guiding Committee of OHS to the Labour and Social Agency of Kampar District and has been authorized by:

- Decree of the Head of Social and Labour Agency of Kampar District No. KPTS.700/DSTK-PHI/2012/12 The Guiding Committee of OHS Nagasakti Mill of PT. BWL which was ratified on 10 September 2012 with the chairman Elviator Sinaga and secretary Sony Wijaya (certified expert of Occupational Health and Safety No. 2357/AK3/AJ/2012, valid until 6 October 2014).

- Decree of Social and ManpowerService of Kampar District No.KPTS.700/DSTK-PHI/2011/17 Guiding Committee of OHS Nagasakti Estate of PT. BWL ratified on 21 November 2011 with the chairman H. Sukirman and secretary M. Afrizal (certified expert of Occupational Health and Safety No. 10.391/AK3-U/DJPPK-P2K/III/2010, valid until 15 March 2013).

Regular meeting of Guiding Committee of Occupational Health and Safety of Nagasakti Mill and Nagasakti Estate has been performed consistently once a month. For example:

- Regular meeting of Guiding Committee of Occupational Health and Safety of Nagasakti Mill held on 8 October 2012 discussed evaluation of activities, preparation of RSPO Audit team visit, cleaning in the mill area, condition of hazardous waste warehouse, report of medical screening and processing control.

- Regular meeting of Guiding Committee of Occupational Health and Safety of Nagasakti Estate held on 14 October 2012 discussed re-inventorying the PPE, preparation of audit team visit, workers’ extra-fooding, listingthe needs and thelack of


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Hazardous Material warnings.

Report of Guiding Committee of Occupational Health and Safety submitted to the Social and Manpower Service of Kampar District is conducted on a regular basis every trimester, including:

- The Guiding Committee of Occupational Health and Safety Quarterly Report (July-September 2012) of Nagasakti Mill based on Minutes of Guiding Committee of Occupational Health and Safety Report Handover was submitted on 3 October 2012.

- The Guiding Committee of Occupational Health and Safety Quarterly Report (July-September 2012) of Nagasakti Estate based on Minutes of Guiding Committee of Occupational Health and Safety Report Handover was submitted on 7 October 2012.

There is a request for payment available with the number of Doc. 15005564 dated 1 October 2012 for the payment of Labour Social Assurance of Nagasakti Estate in September 2012, amounting to IDR 49,930,214 with the detail number of employees registered in Labour Social Assurance are 51 monthly SKU employees, 477 daily SHU employees, and 34 new daily SKU employees, enrolled a total of 562 employees registered to Labour Social Assurance. Under the Circular Letter No. 001/SE-RC-KAMPAR/07/2010, regular medical screening includes physical and specific examination. Physical examination is carried out annually with the types of examination such as height, weight, blood pressure, and complaints. Specific examination is carried out twice a year which is in June and December. The examination includes Audiometry for workers who work in the area with the noise levels exceeding Threshold Limit Value, as for employees in contact with chemicals the examination includes blood, urine, Cholinesterase, and Thorax. Specific examination is carried out by the third party, namely Thamrin Laboratory Clinic.

Regular medical screening in Nagasakti Mill:

- Physical health examination is scheduled for January to December 2012 with an excuse not to interfere the production, done in stages for all employees.

- Audiometric examination on 26 June 2012 with the number of workers examined 19 persons, and the results are: examination result on behalf of M. Taufik (Clarification) right ear has mild CHL, Suparno (Boiler) left ear has mild CHL, Jasril (Workshop) both ears has mild CHL, and Listiawan (Workshop) left ear has milld NSHL. There is a request for referral to the Central Clinic No. 025/NSAM/08/2012 dated 19 September 2012 on behalf of M. Taufik and Jasril, for further examination to an otolaryngologist. Based on the interview with SPO PIC, there is no further information whether further examination has been conducted or not. Company needs to create a mechanism of follow-up medical screening result carried out in the event of health disorder/not normal. For example, to set the time limit of follow-up so there will be not too long to make a written request for referral to the clinic doctor and to ensure further examination to be carried out immediately.(Opportunity for Improvement No. 03)

- Examination of the blood test, urine, cholinesterase and thorax for employees of Nagasakti Mill Laboratory on 26 June 2012 confirmed that the number of employees examined is 10 persons, all under normal condition, while the result of urine examination of 1 person showed a health disorder.

Regular medical screening in Nagasakti Estate:

- Specific examination on 26-28 June 2012 with the number of employees examined of 107 persons. Recapitulation of the MCU of urine test result: 3 persons have been affected, the result of cholinesterase test are normal, thorax examination is normal, and from the blood test it is found that 64 persons have mostly high Eosinofil disorder.

- Audiometric examination for generator and water pump operators of 8 persons, with the result of examination on behalf of Sadibeng has mild hearing disorder/Conductive Hearing Loss (CHL). Referral to the otolaryngologist on 30 October 2012 for further examination, and diagnose of ear wax buildup.

There is a Hazard Identification and Risk Assessment (ISBPR) of Nagasakti Mill available for the period of January-December 2012 include: Security, Weightbridge, Grading of Fresh Fruit Bunch, Loading Ramp, Transfer Carriage, Sterilizer, Hoisting Crane, Tippler, Thresher, Press, Clarification, Boiler, Kernel, Engine Room, Water Treatment, Effluent, Workshop, Warehouse, Archive/File Warehouse, Hazardous Materials and Hazardous Waste Warehouse, Diesel Tank, Laboratory, Office, CPO Dispatch,


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installation of machinery units, fire extinguisher, and vehicle traffic.

There is a Hazard Identification and Risk Assessment (ISBPR) of Nagasakti Estate available for the period of January-December 2012 include: ditch cleaning, manual treatment, chemical place, maintenance of circle and harvesting path, manuring, grass elimination, pest, weeds and disease control, road maintenance, land application, harvest, warehouse (fertilizer, diesel, chemical, spareparts, oil), emplacement maintenance, workshop, infrastructure, polyclinic, water pump engine room, housing, office of estate, caps and used sack laundry.

However in the hazard identification and risk assessment of Nagasakti Estate for example in Land Application and Diesel Tank showed the impact of the environment (spills, soil contamination) not to the persons/workers). So PT. BWL can expectedly review the hazard identification and risk assessment of all activities either in the Mill or in the Estate.(Opportunity for Improvement No. 04) There is a record of training based on the work program of OHS Management System in Nagasakti Mill in 2012 available that includes: First Aid Emergency Training conducted on 14-15 September 2012, Fire Extinguisher training conducted on 22 September 2012. MSDS Training and Hazardous Material Handling on 29 September 2012 and 2 October 2012 by PT. Inter Chemicals Perkasa as the vendor of chemical materials for PT.BWL. There is a record of training available based on the work program of OHS Management System of Nagasakti Estate in 2012 that includes: First Aid Emergency Training by the company doctor held on 14-15 September 2012, and IPM Training on 13 September 2012.

There are Emergency Response Teams available which were approved by the Social and Manpower Service of Kampar District: Nagasakti Mill on 10 September 2012 and Nagasakti Estate on 21 September 2012.The team structures are: Chairman, Administrator, Secretary, General Assistant, Fire Team, Medical team, Security Team, Elimination Team, Connector Team, and Evacuation Team. M. Abib Saleh (Processing Supervisor) was certified as a Fire Officer from Manpower Service with certificate number 1709/Peran/K3-KEB/VI/2011-P that valid until 16 June 2014. Simulation of residential and field fire and earthquake were held on 22 September, took place at Cottage 2 Division 4/5 of Nagasakti Estate. Participants of the simulation were RC/PC of Kampar Region, Mill and Estate Unit Leader of Kampar Region, SPO PIC and OHS Expert Unit of Kampar Region, Coordinator of SPO5 PSM 5, Emergency Response Team of Kampar Region Unit.This simulation was a combined simulation of Kampar Region namely PT. RJP (Rama-rama Mill and Rama-rama Estate) and PT. BWL (Nagasakti Mill and Nagasakti Estate, Nagamas Estate, Kijang Mill, and Kijang Estate). Fire fighting facilities and infrastructures in Nagasakti Mill, among others:

- 37 tubes of Fire Extinguisher (dry power and CO2)

- 1 unit of Hydrant Pillars and 9 units of Hydrant box.

- 6 units of Bakortiba Drum (Sand, shovel, burlap sack)

- Layouts of hydrant and Fire Extinguisher distribution. Fire fighting facilities and infrastructures in Nagasakti Estate, among others:

- 37 tubes of Fire Extinguisher (3 types of foam and 34 types of dry power


- 4 units of hook

- 1 unit of water tank, nozzle and rubber tube

- Layouts of fire fighting facilities and infrastructures distribution.

Based on the result of field visit, such as in Nagasakti Estate Workshop, the fire fighting facilities and infrastructures such as water tank and other equipment are in good condition and ready to use. In addition, there is a list of examination conducted once a month available.

There are 6 units of First Aid Emergency boxes in Nagasakti Mill that spread across the maintenance office, NSAM office, warehouse, security post, water treatment and laboratory. In Nagasakti Estate, there are 16 units of First Aid Emergency boxes, 46 sets of First Aid Emergency bag for Supervisors. Based on the field observation, the checklist of the content of the boxes are;


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in Hazardous Waste Temporary Warehouse of Nagasakti Estate (Povidon Iodin 15 ml should be 60 ml) and in Hazardous Waste Temporary Warehouse of Nagasakti Mill (there are no instant plaster, Povidon Iodine 15 ml should be 60 ml, and aquadest 50 ml should be 100 ml). PT. BWL can re-evaluate the checklist of the boxes of First Aid Emergency in the Mill and Estate work unit. (Opportunity for Improvement No. 05)

The First Aid Emergency officers have been licensed in accordance with the Regulation of Ministry of Manpower No. 15 year 2008, proven by the availability of the First Aid Emergency Certificate from the Ministry of Manpower and Transmigration on behalf of Junita Sinulingga (nurse) No. 517/P3K/VII/11 and on behalf of Desvasari (Maintenance Clerk) No. 519/P3K/VII/11 dated 8 July 2011. Internal training of first aid emergency by the company’s doctor was conducted on 14 to 15 September 2012, attended by Supervisors and Assistants. There is an SOP of Occupational Accident Management available with number of document PT BWL-NSAM/SOP/12, Diagram of Occupational Accident Emergency Management and Diagram of Accidental Handling Flowchart. Accident reporting lines, among others:: - KTU inform the other parties if necessary. - State/staff involved in the accident is to report the occupational accident to the human resources department within 1 x 24

hours. - Human resource personnel handle for the medication administration and claims to PT. Jamsostek through its representative

office. - Assistant and Secretary of first aid emergency investigate the accident and make a report and a suggestion of corrective and

preventive actions so that accidents will not happen again. - The effectiveness and corrective actions taken need to be monitored. Based on the Report of Annual Recapitulation of FR and SR, an occupational accident monitoring available in Nagasakti Mill and Nagasakti Estate during January to October 2012 is zero occupational accident.

Major 4.7.1 Minor 4.7.2 Minor 4.7.3 Minor 4.7.6

Opportunity for Improvement No. 02 Opportunity for Improvement No. 03 Opportunity for Improvement No. 04 Opportunity for Improvement No. 05

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

Program and training realization conducted in PT. BWL such as:

- Fire Extinguisher Training on 22 September 2012.

- MSDS Training and Hazardous Waste Handling on 29 September and 2 October 2012 by PT. Inter Chemicals Perkasa as a supplier of chemical materials.

- First Aid Emergency Training by the company’s doctor on 14 to 15 September 2012.

- HPT Training on 13 September 2012.

- Training for scheme smallholders (Amarta Jaya Plasma) was conducted simultaneously on HPT and Spray Training for workers, located in SMP NSAE School Building on 13 September 2012.

Agreement/working agreement with the contractor requires an expert contractor, for example on the working agreement on behalf of Riyanto (UD. Bina Karya) as the transporter for transporting FFB to Rama-Rama POM, Nagasakti POM, Kijang POM, Libo POM, Ujung Tanjung POM and Sam-sam POM No. 002/NSAE/01/2012/KBN-Akt/TBS: Article 6 Work Facility, point 3: vehicle used as a transporter must have legal documents such as Certificate of Ownership of Motor Vehicle, Vehicle Registration Certificate and KIR and the driver must have Driving License (SIM).



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PRINCIPLE #5 Environmental responsibility and conservation of natural resources and biodiversity

5.1 Aspects of plantation and mill management, including replanting, that have environmental impacts are identified, and plans to negative impacts and promote the positive ones are made, implemented and monitored, to demonstrate continuous improvement.

In accordance with the result of audit ST2, BWL already has impact analysis documents such as: 1. Document of Environmental Impact Assessment (EIA) which was approved through the Letter No.

IRC.220/888/B/V/1994 dated 19 May 1994 with the mill capacity of 60 tons FFB/hour. The areas included in the EIA are Nagasakti and Nagamas Estate.

2. Document of Environmental Evaluation (DELH) made in 2012 for Scheme Smallholder POM of Ramabakti Estate on behalf of PT. Ramajaya Pramukti (PT. RJP). Although that administratively RBKE is included under the management of PT. RJP, however RBKE estate has been supplying fruits to Nagaksakti Mill in PT. BWL, so it is included in scope of audit of PT. BWL.

3. Document of Social Impact Assessment (SIA) made in November 2010 by the internal team of PT. BWL (Tomi Hendratomo, Yosaphat Ardhilla R, Nazlya Syahputri) that includes villages around PT. BWL.

In accordance with the applicable regulation, company has an obligation to report the environmental management to local government every 6 months in the form of environmental management and monitoring report. In addition, the company is also asked to report on monitoring the management of palm oil mill effluent every 3 months and the result of effluent monitoring for land application every 3 months.

In audit of ST2, it is known that the company has done reporting the environmental monitoring and management at regular intervals. In surveillance 1, the checking on the documents of environmental monitoring and management report to government has been done. The reports document can be shown from the document examination as follow:

1. Implementation Monitoring Report for Environmental Management Plan (RKL) and Environmental Monitoring Report (RPL) in the period of the first-half of 2012 for Nagasakti and Nagamas Estate. Documents were submitted to the Environment Bodies of Kampar District on 27 August 2012 (according to the receipt stamped by the Environment Bodies).

2. Implementation Monitoring Report for Environmental Management Plan (RKL) and Environmental Monitoring Report (RPL) in the period of the first-half of 2012 for Ramabakti Estate, PT. RJP because although administratively RBKE is included in the management of PT. RJP, the estate operationally supplies fruits to Nagasakti Mill. Documents were submitted to Environment Bodies of Kampar District on 2 November 2012 (according to the receipt stamped by Environment Bodies). For this report, the company is suggested to send the report more timely in the future.

3. Six-monthly report of Monitoring of the Effluent Application Implementation of Nagasakti POM period of The First-Half of 2012. Submitted to Environment Bodies of Kampar District on 27 August 2012.

4. Environmental Quarterly Report of PT. Buana Wiralestari Mas Nagasakti POM Unit for period of Third-Quarter of 2012, submitted on 29 October 2012.

5. Balance Sheet and Logbook of Hazardous Material Waste of PT. Buana Wiralestari Mas unit Nagasakti POM for the period of Third-Quarter/2012, submitted on 29 October 2012.

6. Optimization and pesticide waste management report to the Ministry of Environment through Sumatra region office in October 2012.

In accordance with the result of audit in ST1 and ST2, there are no changes in the company’s operating areas of activities in Nagasakti Mill and Kijang Mill (Capacity of each palm oil mill has not been different from the capacity in EIA Document which is 60 tons FFB/hour).



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5.2 The status of rare, threatened or endangered species and high conservation value habitats, if any, that exist in the plantation or that could be affected by plantation or mill management, shall be identified and their conservation taken into account in management plans and operations.

In accordance with the audit in ST2, the company has a HCV Identification Document compiled by the company’s internal team consisting of: Norman Faried Mustakim (approved RSPO HCV Assessor), Kusuma Widya Rochmah (approved RSPO HCV Assessor) assisted by Tomi Hendartomo, Nazlya Syahputri and Bambang Setyaji approved in February 2011. A peer review has been conducted by an external Consultant, Dwi Rahman Muhtaman in October 2010. From the document, it is identified that there is a High Conservation Value (HCV) 1.1, 1.2 and 4.1 with an overall HCV areas covering 380.12 hectares. Protected fauna have also been identified, namely white-throated kingfisher (Halcyon smyrnensis) and asian leopard cat (Felis bengalensis).

The document also outlined Management and Monitoring Plan of the HCV area although it has not been equipped with a detailed description such as a clear timeline, targets, opportunities, constraints, resource requirement, etc. So as for the future, the company is likely to improve the performance of conservation area management by making a more systematic, measurable plan such as timeline, job description, constraints, resource requirement, etc. Company should be able to expand the planting area of hard crop trees for all riparians with high erosion potential in the work area of the estate.(Opportunity for Improvement No. 06)

In accordance with the result of audit in ST2, the document of HCV Identification Report has mentioned the protected species and HCV area in the plantation area of PT. BWL Nagasakti Estate and Nagamas Estate, namely Asian Leopard Cat (felis bengalensis) with protected status according to the Government Regulation No. 7 Year 1999 and is included in Appendix II CITES; and White Throated Kingfisher (Halcyon smyrnensis)with protected status according to Government Regulation No. 7 Year 1999.. The steps taken to protect endangered species among others are: 1. Making warning boards regarding the species preservation.

The company has made about 18 warning boards in Nagamas Estate and 13 warning boards for Nagasakti Estate containing warning for the presence of the protected species and for the protection of the riparian, along with a number of warning boards about prohibition of animal hunting, fish poisoning and land burning. Supporting the management, company has a map that shows the distribution of the warning boards.

2. Socialization conducted not only to employees but also to community around about the species preservation. Continuing the socialization activity in 2011 as described in ST2, company has continued socialization to the employees on 3-5 September 2012, and socialization to the community on 7 August 2012. There is documented evidence available about the socialization in the form of photographs and attendance list.

3. Species Monitoring. Company has conducted HCV monitoring activity including monitoring the presence of the endangered species carried out every week in the same line. For example, in Nagamas Estate there are 2 monitoring lines for asian leopard cat which are Line F30 – 27and Line D08 – 10 Bounders, and Line Riparian Perbadoran River and Riparian Pijar River for white throated kingfisher. The monitoring result was recapitulated in the Form of HCV Monitoring recapitulation/HCV to determine the frequency of encountering every kind of protected species in each monitoring line.

4. Planning revegetation in the buffer zone at the time of replanting.

From the interview with an HCV monitoring officer and also from field observation, during the period of 2012 there were no more hunting in the plantation area. In addition, as a form of evaluation to the HCV management performance, company has also compiled an annual report of HCV management and monitoring implementation in the document entitled: Report of HCV Management and Monitoring period of 2011-2012 for PT. BWL unit Nagamas Estate, Nagasakti Estate and Kijang Estate, containing the result of monitoring the protected species existed in the plantation area. The report was compiled by the Biodiversity and Conservation Department, Sustainability Division based on the result of the fieldwork. In the audit of ST2, a number of steps taken by the company to manage the HCV area and the protected species (see the criterion 5.2.1 and 5.2.2 above) have been identified. In general, there were no actions on the contrary with the applicable laws in Indonesia. In fact, these actions generally go along together with the regulations, especially with the Presidential Decree No 32


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year 1990 on Management of the Protected Area and Statute No.5 year 1990 on Conservation of Biological Resources (KSDAH) and its ecosystems. To conduct the socialization to the community and also the company’s internal party on 25 July 2011, company has provided evidence of HCV socialization to communities around the estate in the form of invitation letter of socialization to Head of Sekijang Village, the village officials and residents; minutes of the HCV socialization; attendance list of activities along with the documentation (in the form of photographs) of the event. Continuing the socialization activity in 2011 as described in ST2, company has continued socialization to the employees on 3-5 September 2012 addressed to all workers in Cottage 1, 2 and 3, workshop workers, and socialization to the community on 7 August 2012 in Flamboyan Village, attended by 44 people. There is documented evidence available about the socialization in the forms of invitation letter, photographs and attendance list. In accordance with the result of audit in ST2, the company has made posters, warning signs and flyers (posters in small size), and has conducted socialization to the internal and external parties. As an addition to the steps, there are also records of other steps taken, such as:: - Constructing/repairing approximately 18 warning sign boards in Nagamas Estate and 13 warning sign boards in Nagasakti

Estate, containing the warning about the existence of the protected species and about protection of riparian, in addition to a number of warning sign boards alerting the prohibition of animal hunting, fish poisoning and land burning. Supporting the management, the company provides a map showing the distribution of the warning sign boards.

- Continuing the socialization activity in 2011 as described in ST2, company has continued socialization to the employees on 3-5 September 2012 addressed to all workers in Cottage 1, 2 and 3, workshop workers, and socialization to the community on 7 August 2012 in Flamboyan Village, attended by 44 people. There is documented evidence available about the socialization in the form of invitation letter, photographs and attendance list.

In accordance with the result of the audit in ST2, the company already has a special officer assigned to monitor the management of the protected area (HCV) and the protection of the wildlife. At the head office (HO) support for management of HCV in the field is the responsibility of Sustainability Department (led by Mr. Haskarlianus Pasang). Within the Sustainability Department there is Division of HSE (led by Mr. Ismu Zulfikar) in which there are Biodiversity and Conservation section (led by Mr. Norman Faried M). In the Division of B&C there are 7 officers that support the operational management of HCV in the field. For the operational in the estate, there is one person as an HCV PIC in Nagasakti Estate (Amin), one in Nagamas Estate (Nurcahyo), and one in Ramabakti Estate (Aminullah). Each assistant is assisted by a supervisor. All officers in the field (PIC and supervisors) are responsible to the Estate Manager and had received an official assignment letter from each Estate Manager. Several trainings for the officers have been done by the company. Officers in the HO generally had received official certification training. In November 2012, one of the officers namely Dede M. Nasir had a training in Yogyakarta (cooperation between Tropenbosh and Instiper Yogyakarta). A number of internal training for PIC and supervisors including PIC in Nagasakti, Nagamas and Ramabakti Estate have been conducted on 23 June 2012 (9 participants), 3 June 2012 (3 participants), on 26 May 2011 (5 participants), on 28 October 2010 (9 participants). Documentation of the training is available in the form of attendance list, training material, and photographs.

Major 5.2.1 Opportunity for Improvement No. 06

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

In accordance with the results of the audit in ST1 and ST2, at PT. BWL especially in Nagasakti Mill there are a number of documents used to identify the waste generated from the plantation activities and CPO production. The documents found in Surveillance 1 are: 1. Document of EIA of PT. BWL for Nagasakti Estate which was approved through Letter No. IRC.220/888/B/V/1994 dated 19

May 1994. In the EIA document, the waste identification is focused on effluent identification from oil palm processing.


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2. Document of Environmental Evaluation (DELH) compiled in 2011 for Scheme Smallholder POM of Ramabakti Estate on behalf of PT. Ramajaya Pramukti (PT. RJP). In the document, there is an identification of waste specifically hazardous material waste generated from the plantation activities in Ramabakti Estate (PT. RJP).

3. List of Environmental Aspects of Nagasakti Mill which includes environmental aspects, potential impacts, control measures and document control related in the processing of Fresh Fruit Bunches in Nagasakti POM.

4. List of Environmental Aspects of Nagasakti and Nagamas Estate which includes environmental aspects, potential impacts, control measures and document control related in the production in Nagasakti and Nagamas Estate.

5. List of Environmental Aspects of Ramabakti Estate (PT. RJP) that includes environmental aspects, potential impacts, control measures and document control related in the production in Ramabakti Estate (PT. RJP).

However, there has not been any separation of hazardous material waste in both of waste identification documents above (documents of EIA and environmental aspects). In addition, the documents have not been equipped with estimated volume of waste will be arised from. So, the company has the opportunity to improve performance by estimating volume of waste generated. (Opportunity for Improvement No. 07).

In accordance with St1 and ST2, in addition, document of waste management plan is available in the form of:

− Waste management plan in the Environment Management Plan-Environment Monitoring Plan of Nagasakti Mill compiled in the beginning of plantation activities. In the Environment Management Plan-Environment Monitoring Plan document, the waste management plan focuses on effluent of palm oil mill.

− Waste management plan in Document of Environmental Evaluation (DELH) of Ramabakti Estate compiled in 2011. In the document, there is a description of waste management that has been and will be conducted, focusing on effluent and hazardous material waste.

− Document of List of Environmental Aspects in Nagasakti Mill which consists of aspect codes, environmental aspects arising, potential impacts, related fields and related procedures. The document contains more types of waste identified and the management plan.

− Document of List of Environmental Aspects in Nagasakti and Nagamas Estate which consists of aspect codes, environmental aspects arising, potential impacts, related fields and related procedures. The document contains more types of waste identified and the management plan.

However, the document of environmental aspects both in the mill and in the estate has not been completed with estimated volume of waste to be generated. So, the company has the opportunity to improve performance by including the estimated volume of waste that will be generated. Moreover, there is still no waste categorization made based on the hazardous and toxic characteristics.(Opportunity for Improvement No. 07). As the implementation, there are waste management activities of Palm Oil Mill in PT. BWL, namely:

− Mill solid waste management, which is done through the utilization of the excess plant fiber and shells as a fossil fuel saving, the policy implemented is by operating Boiler and Turbine using fuel made of fiber and shells. Solid waste in the form of empty bunches is applied as fertilizer in the estate.

− Mill effluent management which is done by using the mill effluent for the application with the land application system to the estate area, and by analyzing the effluent sample regularly.

− Hazardous waste management by accommodating and to temporarily storing the hazardous material waste in a specific place and also by constructing a hazardous waste temporary warehouse, recording it and submitting it to the licensed hazardous waste collectors.

Surveillance 1 noted that the company has a document of hazardous waste management in the form of:

1. Document of List of Environmental Aspects in Nagasakti and Nagamas Estate which consists of aspect codes, environmental aspects arising, potential impacts, related fields and related procedures. The document contains more types of waste identified and the management plan.

2. Document of List of Environmental Aspects in Nagasakti Mill which consists of aspect codes, environmental aspects arising, potential impacts, related fields and related procedures. The document contains more types of waste identified and


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the management plan.

3. Document of List of Environmental Aspects in Ramabakti Estate which consists of aspect codes, environmental aspects arising, potential impacts, related fields and related procedures. The document contains more types of waste identified and the management plan.

In general, the instruction of hazardous waste management measures is available in the ratified SOP, namely: SOP/SPO/SMART/LH-09 on Waste Management, SOP/SPO/SMART/LH-11 on Environmental Aspect Identification and SOP/SPO/SMART/LH-18 on Hazardous Waste Management.

Hazardous waste management in Nagasakti Mill follows the defined procedure by collecting the waste to the licensed temporary warehouse for (maximum) 180 days before being transported by a licensed waste collector (PT. Binasamsurya Mandalaputra). The permit letter of hazardous waste storage given by the government can be shown namely Letter No. 660/BLH-WAS/ILB3.PWP/05 dated 24 September 2012. In addition, the company has conducted an optimization process to eliminate the nature of hazardous waste so Non conformance CFA-2011.28 found in ST2 is declared closed.

For medical waste, the company has also been working together with the third party, in this case Bangkinang General Hospital, Kampar, which acts as a waste collector.

Especially for the pesticide packaging waste, company showed a specific procedure namely optimization procedure. This procedure is to clean the pesticide packaging waste in a particular place and with a particular method. In the process, the company claims the pesticide waste is no longer hazardous waste. PT. BWL should likely ensure the optimization process had removed the nature of hazardous waste on the former pesticide packaging through a laboratory test in accordance with the Government Regulation No. 18 jo. 85 year 1999 article 7 and 8 on Hazardous Waste Management. (Opportunity for Improvement No. 08)

Legally, the company has consulted with the Ministry of Environment on 13 April 2012 regarding the implementation of optimization process for hazardous packaging waste. The Ministry of Environment was represented by Amsor (Deputy IV Staff of Ministry of Environment). Points of the consultation were:

1. With the optimization process, pesticide packaging no longer contains hazardous material. Furthermore, company is required to return the packaging to manufacturer in a clean state for the refill.

2. Company is required:

- To deliver the location, coordinates and width of the area where the optimization process of pesticide use takes place.

- To deliver the optimization process so that the packaging no longer contains hazardous material.

- Admission for the refill packs.

3. As an effort to control, PT. SMART and PT. Rollimex are to report the activities to Ministry of Environment at least every 6 months.

Examination of document found that:

1. Company has submitted the report of optimization process of pesticide packaging hazardous material to the Ministry of Environment through Regional Environment Agency of Sumatera in Pekan Baru.

2. In practice, during the optimization process, the pesticide packaging is properly washed and controlled, and then is stored in a special, unreachable place. Furthermore, the pesticide packaging has been taken back by the manufacturer. Thus, the non-conformance CFA-2011.27 with category of Comment for Action is declared closed.

In accordance with the audit in ST2, company has been monitoring waste arised through among others:

- Monitoring debit and volume of wastewater application for Land Application. Monitoring debit is conducted every day by recording from flow meter instrument installed in the pumping house in WWTP pond. The daily recording data is then recapitulated to monthly data reported every 3 months and 6 month to the relevant institution. For the last month’s data, the average of daily wastewater rate of flow of Nagasakti Mill is 967 m³/day while the volume of the waste are:


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Month Volume

July 13,778 m3

August 21,336 m3

September 28,039 m3

- Monitoring BOP of wastewater applied to the land, is conducted every month by SMARTRI Laboratory. Data from BOD monitoring is reported to relevant institution every 3 months (see criterion 4.4.3 above for the last three months of BOD data).

- Monitoring hazardous waste collected in a licensed Hazardous Waste Temporary Warehouse is carried out every day. From daily report, there is a logbook and a balance sheet of monthly hazardous waste. Furthermore every 3 months, there is a report of hazardous waste monitoring result to the relevant institution. Every particular period (< 6 months) the hazardous waste is taken by a licensed third party namely PT. Binassamsurya Mandalaputra, as for the medical waste is distributed to RSUD Bangkinang. Data from hazardous waste balance sheet of July – September 2012 shows the following information:

Type of waste Volume Actions

Used filter 33 kg Have been distributed to the third parties as many as 40 kgs.

Used rag cloth 13 kg Have been distributed to the third parties as many as 25 kgs.

Used lamp 17.5 kg Have been distributed to the third parties as many as 3 kgs.

Used battery 1 unit Has been distributed to the third parties as many as 9 units.

Used lubricating oil 140.14 kg Has been distributed to the third party as much as 646.8 kgs.

As for the pesticide packaging, company has made a special consultation with the Ministry of Environment on 13 April 2012 regarding optimization process to remove the nature of hazardous material in packaging waste so it will be unnecessary to include pesticide packaging in hazardous waste balance sheet. As the result, company is permitted to carry out the optimization (removing hazardous and toxic content through leaching) with the condition that the company must report the result to the Ministry every 6 months.

- Monitoring solid waste (fiber and shells) collected for Boiler fuel (see criterion 5.4.1).

- Monitoring solid waste (empty fruit bunches) to be applied to the estate.

Major 5.3.1 Major 5.3.2 Minor 5.3.1

Opportunity for Improvement No. 07 Opportunity for Improvement No. 08

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

In accordance with the results of audit in ST1 and ST2, company has continued using shells and fiber as renewable energy to fuel the boiler. At surveillance 1, company showed the document of monitoring the fiber and shells use in FFB processing at the mill for the last 4 years (2009 – September 2012). The document compiled by SPO officer and acknowledged by Manager of Nagasakti Mill also analyzed the solar savings produced from the use of renewable energy mentioned. Data in the monitoring table is as follow:

Year Fiber Volume Shells Volume Solar Savings (liters)

2009 41,288 tons 18,166 tons 2,001,660

2010 37,243 tons 16,387 tons 1,851,940

2011 39,743 tons 17,487 tons 1,996,475

UntilSept 2012 34,041 tons 14,978 tons 1,593,580


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In accordance with ST1 and ST2, company had been monitoring the use of fuel (solar) to ensure the fuel efficiency running in the company. Budget of the solar in Nagasakti Mill until September 2012 was 51,293, and compared with the use of solar until September 2012 it is not exceeded (the actual budget is not exceeded).As for the estate, the use of solar per month average is: 8.3 thousand liters. Examination of document provided a graph showing decreasing trend of solar use in the estate. Data on the use of solar in estate for the last three months showed the following:

Month Volume

July 11,698 liters

August 7,067 liters

September 6,230 liters

Based on the data of solar monthly use, company also has analyzed the ratio of fuel per tone of FFB per year. Document of monitoring shows that solar consumption for the last three years has a tendency to decrease. Ratio of monthly solar to FFB tons in the estate for the year of 2012 is 0.28 liter/ton FFB. In addition to the data in the estate, company also has document that shows the use of solar monitoring in the mill. Average use of solar per month in the mill is 29,245 liters. Data of solar consumption for the last three months are as follow:

Month Volume

July 31,184 liter

August 27,881 liter

September 30,036 liter


5.5 Use of fire for waste disposal and for preparing land for replanting is avoided except in specific situations, as identified in the ASEAN guidelines or other regional best practice.

BWL still refers to the SOP on zero-burning land clearing contained in the Management Committee Agronomy and Research regarding the land clearing and planting (SMA/MCAR/05/05-07) Chapter V related to the zero-burning policy. Company is committed to not to burn during the land clearing. Based on the examination result of document and field visit, there were no areas of new clearing. Based on the SOP of land clearing and planting, company conducted the land clearing in various stages, such as: spatial planning, path-blocking, cutting small logs into diameter <15 cm, uprooting, mechanical stacking, staking and chopping. For the procedure of field fire emergency response, RJP still refers to the SOP of Land Fire Handling in the Plantation Area (SOP/BWL/KBR) which was ratified on 5 February 2010. Team of Emergency Response in Nagasakti Estate was authorized by Social and manpower Service of Kampar District on 21 September 2011 with the structure of: Chairman, Administrator, Secretary, General Assistant, Fire Team, Medical Team, Security Team, Elimination Team, Connector Team, and Evacuation Team. Simulation of land fire was conducted on 22 September that took place in Cottage 2 Division 4/5 of Nagasakti Estate. Participants of this simulation were RC/PC of Kampar Region, Mill and Estate Unit Leader of Kampar region, SPO PIC and OHS Expert Unit of Kampar Region, Coordinator of SPO5 PSM 5, Emergency Response Team Unit of Kampar Region. This simulation actually was a combined simulation of Kampar Region namely PT. RJP (Rama-Rama Mill and Rama-Rama Estate) and PT. BWL (Nagasakti Mill, Nagasakti Estate, Nagamas Estate, Ramabakti Estate, Kijang Mill and Kijang Estate).

Fire fighting facilities and infrastructures in Nagasakti Estate, among others:


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- 37 tubes of Fire Extinguisher (3 types of foam and 34 types of dry power)


- 4 units of hook

- 1 unit of water tank, nozzle and hose.

- Layouts of fire fighting facilities and infrastructures distribution. Based on the result of field visit, such as in Nagasakti Estate Workshop, the fire fighting facilities and infrastructures such as water tank and other equipment are in good condition and ready to use. In addition, there is a list of examination conducted once a month.


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

In accordance with ST1 and ST2 audit, company has evidence of the identification of pollution sources and emissions in the mill, as listed in the document:

- Environmental aspect of activities in Nagasakti POM, which is a matrix of description of detailed activities in the mill and potential waste/emissions produced from the activities.

- Waste management activities of Palm Oil Mill, semester II/2011 of Nagasakti Mill. Types of pollution sources and mill emissions are: mill gases waste that comes from the boiler chimney and generator engines; noise, vibration, and lighting from the work hall in the mill.

In accordance with the result of ST1 and ST2, company has also made an innovation to reduce gas emissions from the boiler by using a method of Fuel Balancing Control; it means in the boiler station, the fuel feeding with fiber and shells is done automatically by taking into account the composition of fuel volume that comes into the boiler kitchen; thus avoiding excessive pressure on the boiler. Based on the field visit, the boiler has been equipped with dust controller that works as an ash catcher before going out of the boiler chimney. Maintenance of dust boiler is carried out once a month. Company also showed documentation on monitoring of fuel use in the mill and estate as an effort to reduce emissions. In the future, company has begun to roll out the discourse of using methane-trapping technology to reduce emissions from effluent in the Palm Oil Mill. In accordance with the result in ST1 and ST2, company has a document that shows activities of monitoring and management of POME. In surveillance 1, company can show the layout (design) document of POME explaining that in Nagasakti Mill, there are 8 effluent ponds with the capacity of 10,000 m³ each, which are equipped with control tub and pumping house. Monitoring the quality of waste is conducted regularly (monthly) to assess quality of effluent to be applied to the plantation (land application). In addition, debit of waste is also measured every day using flow meter. Data of effluent quality can be viewed in criterion 4.4.3 above, as for the daily data contained in criterion 5.3.4 above. As a guide to management of POME, company has an SOP of POME management that explains Final Effluent Management (Chapter IX) in SOP of Palm Oil Mill Processing of PT. SMART (4th revision). The SOP describes definition, work plan, operational procedures, effluent analysis, effluent testing methods and effluent monitoring.


PRINCIPLE #6 Responsible consideration of employees and of individuals and communities affected by growers and mills

6.1 Aspects of plantation and mill management, including replanting, that have social impacts are identified in a participatory way, and plans to mitigate the negative impacts and promote the positive ones are made, implemented and monitored, to demonstrate the continuous improvement.


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In accordance with the result of ST1 and ST2 audit, company already has a document analysis of social and environmental impacts in the form of:

1. Survey for the condition of Social, Economic, Culture and public perception in the village around the plantation/mill of PT. BWL especially Nagasakti and Nagamas Estate that is used as a document of Social Impact Assessment, compiled internally by the company (Mr. Tomi Hendartomo, Yosaphat Ardhilla Renato and Nazlya Syahputri) in November 2010.

Analysis of Social Impact Assessment (SIA) is also equipped with document of Social Impact Management Plan that describes Type of Social Impact, Sources of Impact, Impact Management Measures, Management Parameters, Management Location, Management Period/Schedule, detailed activities of impact management and related parties involved.

2. EIA of PT. BWL for Nagasakti Estate, Document of Environmental Impact Analysis (EIA) approved through Letter No IRC.220/888/B/V/1994 dated 19 May 1994. The EIA document includes an identification of social impact that might be arise from activities in the palm oil mill.

Following up the audit result in ST2, in surveillance 1, checking the social impact management realization in accordance with the planning (SIA) previously made have been done. In document assessment, company showed the SOP used to conduct the analysis of social impact and SOP to manage the social impact that contained in: SOP No. SOP/SPO/SMART/LH-13 on Social Impact Assessment (SIA) and SOP No. SOP/SPO/SMART/LH-12 on Social Impact Management and Monitoring.

In the document of SIA analysis, there are three kinds of negative social impacts identified and soon to be managed as follow:

- The road damage that will be managed with road repair using heavy equipment (evaluated every year). The location of the repair is not specifically mentioned in the study, so that the repair is only as a response/reaction to the request.

- Waste and air pollution will be monitored every 6 months through ambient air quality measurement.

- Recruitment, employment vacancies, and local business improvement have not been evenly distributed.

In accordance with SOP of management and monitoring of social impacts, company has compiled a report on social impact management and monitoring. Report of the period of November 2010 has been able to be demonstrated in the form of document with the title of Implementation Report of Social Impact Management.The report showed several social impacts management activities as follow:

- Repair of the road damage around Nagasakti and Nagamas plantation has been done 5 times in the form of aid delivery of heavy equipment (greader) and operational cost in April 2010 (Sekijang Village), June 2012 (Pelambaian Village), July 2011 (Sekijang Village), 8 November 2011 (Indrasakti Village). However, the implementation model of the roadwork is still a reaction to the request for assistant and not well planned. It is suggested that road maintenance around the plantation area is conducted in more well-planned and programmed.

- Monitoring air and water quality around the plantation (ambient) by Laboratory of Department of Manpower and Transmigration, OHS Agency, Medan. Monitoring result of the first-half of 2011 can be presented and from all parameters the ambient of the air is below quality standard treshold.

- Communication of manpower needs from Estate Manager to the villages around the plantation especially the villages which get the impact through the letter to the village boards in the form of several letter archives to the head of the village, namely Head of Sekijang Village. As the realization, 95 people from Sekijang Village were accepted to work in the estate.

Company has the opportunity to improve the performance of managing and monitoring the social impacts by making plan and monitoring to be more planned and systematic, so that the progress of management and monitoring can be more measurable especially in the villages that have been identified as the village affected. (Opportunity for Improvement No. 09). In accordance with the results of ST1 and ST2 audit, there has been no change in the scope of company’s operations as listed in document of EIA year 1994 which was ratified through Letter No. IRC.220/888/B/V/1994 dated 19 May 1994 for the scope of Nagasakti and Nagamas Estate. However, company continues to compose Document of Survey for the Condition of Social, Economic, Culture and Public


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Perception around the plantation/mill of PT. Buana Wiralestari Mas in November 2010 as an analysis of company social impact to the surrounding communities. From the document assessment in surveillance 1, it is known that company regularly compiles reports of environment management and monitoring on a regular schedule in the form of: 1. Report of Environment Management Plan-Environment Monitoring Plan is submitted regularly to the relevant institution

(Regional Environment Bodies) every 6 months. Report of the first-half of 2012 was submitted on 27 August 2012 to the Environment Bodies of Kampar District, according to the receipt document presented by the company.

2. Quarterly Report of Environment of PT. Buana Wiralestari Mas unit Nagasakti POM in the 3rd period of 2012. 3. Report of hazardous waste management result (Balance Sheet and Logbook of Hazardous Waste) of PT. BWL unit

Nagasakti Mill in the 3rd period of 2012. 4. Annual report of social impact management implementation for PT. BWL. 5. Annual report of HCV management and monitoring for PT. BWL. In accordance with the result of ST2 audit, the scope of the assessment is based on the supply of FFB to Nagasakti Mill. Nagasakti Mill does not receive supplies of FFB from outside the smallholders estate (smallholders/scheme smallholders).

Minor 6.1.1 Opportunity for Improvement No. 09

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

- Company already has an SOP related to the provision of information as described in SOP of Communication and Consultation (SOP/SPO/SMART/LH-19) dated 1 July 2010.

- Record of communication with the stakeholders is in the form of Book of Communication and Information equipped with physical evidence of information requests and also process of response and the latest status of the information requests. For example: Record of application letter for fieldwork practice from Head of Corporate & Placement of LP3I Polytechnic dated 19 June 2012 (No. 106/C&P/BI/LP3I-MDN/VI/2012). The letter was addressed to Nagasakti Estate Manager.

BWL can show a list of relevant stakeholders. There is a change of persons in charge in Tapung Hilir Subdistrict. The list of PT. BWLS’s stakeholders consists of: Statutory Bodies (16 agencies), Indigenous people (3 persons), Local Communities (4 persons), Workers Organization (8 persons), Smallholders (8 Village Cooperation Units), Independent Suppliers of FFB and services (6 institutions) and NGOs (3 institutions). Records of aspirations from the community accepted by the company were in the form of request for assistance either for heavy equipment, participation in religious ceremonial/national holiday activities or for other activities needed by stakeholders. For example: Record of application letter for fieldwork practice from Head of Corporate & Placement of LP3I Polytechnic dated 19 June 2012 (No. 106/C&P/BI/LP3I-MDN/VI/2012). The letter was addressed to Nagasakti Estate Manager. Company has appointed an officer responsible for communication and consultation who is from Nagasakti Estate: Mr. H. Sukirman based on letter of RC Kampar No. 002/RC-Kampar/RSPO/10/2010 dated 1 October 2010.


6.3 There is a mutually agreed and documented system for dealing with complaints and grievances, which is implemented and accepted by all parties.

BWL still refers to SOP of Complaint and Dissatisfaction (Document No: SOP.NP/SMART/XII/MCAR001 dated 1 July 2010) that consists of Internal-External Complaint Handling and against female workers. In the attachment part, there is a flowchart of


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complaint handling for each complaint available. In accordance with activities in ST2 in which all records of information requests or complaints are documented ina Communication Book that contains Number, Date, Letter’s Number, Sender’s Name, Home Institution, for the purposes of, initial of decision-maker, disposition, reff number/receipt and final status. There is an SOP of land conflict handling (SOP/BWL/PKL) dated 5 February 2010 available that involves the participation of the community and relevant institutions in handling land conflict.


6.4 Any negotiations concerning compensation for loss of legal or customary rights are dealt with through a documented system that enables indigenous peoples, local communities and other stakeholders to express their views through their own representative institutions.

Company already has a procedure in handling land conflict (SOP/BWL/PKL) dated 5 February 2010 where in the procedure there is a mechanism to identify and calculate land compensation, as at the time of ST2, the compensation process has been completed by the company to the Land Use Title areas belong to it since 1994. Based on the interview with community leaders of Sekijang Village and Koto Aman Village which are native villages, it is stated that the process of land acquisition before had been conducted in accordance with the involvement of customary leaders, the village boards, Land Acquisition Committee (consisted of village boards, officers of national Land Agency, District officers) and other relevant parties according to the applicable regulation at the time. Related to the land acquisition, the information received is still the same as at the time of ST2; there are documents of compensation process and records of identification of beneficiaries available, for example: Recapitulation list of Land owners/workers, Plants and Construction will be paid by PT. Buana Wiralestari based on the decision result of the Regional Committee Court of Land Acquisition of Kampar District on 17 March 1992 in Bangkinang, which outlined the Names of the Owner/Worker, Land Width, Land Location, Price of Compensation/m2, Total of Compensation, Types of Compensation/Souvenirs, Types of Plants, Construction Compensation, Total Amount of Compensation and Signatures of the compensation beneficiaries. In this record, there are 707 farmers with the total areas of 2,467.2 Ha with total amount of compensation IDR 287,604,300.00. Signed by Committee of Land Acquisition of Kampar District that consisted of persons from National Land Agency, Kampar District government, Plantation Agency of Kampar District, Head of Siak Hulu Sub-district, and known to the Head of Kampar District.


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

- Regulation of Riau Governor No. 48 year 2011 on Provincial Minimum Wage (UMP) in 2012 and Regulation of Riau Governor No. 54 year 2011 regarding Minimum Wage of 12 districts/municipalities of Riau Province in the year of 2012 is set as much as IDR 1,238,000/month.

- Wage provision of PT. BWL refers to the Circular Letter from Cooperative Agency of Plantation Companies of Sumatera (BKS-PPS) No. 15/BKS-PPS/2012 dated 9 February 2012 which sets the lowest amount of wage for daily workers is as much as IDR 1,282,200/month (higher than provincial minimum wage). Under the term, PT. RJP sets the wage provision based on the decrees as follow:

a. Decree No. 005/CEO 5/HR PSM 5/02/12 regarding Permanent Daily Workers Wage (SKU-H), the determination on 1 January 2012, for the workers with working period less than 1 year is of IDR 1,282,200/month and for those whose working period 1 year or more is of IDR 1,284,700/month.


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b. Decree No. 006/CEO 5/HR PSM 5/02/12 regarding Monthly SKU Workers Wage, set on 1 January 2012 according to the lowest class of G1 IDR 1,339,500/month to the highest of A8 IDR 2,264,350/month.

c. Decree No.004/CEO 5/HR PSM 5/02/12 on Daily Wage of Freelance Workers (BHL) set on 1 January 2012 in the amount of IDR 55,578/day. Based on the interview with HRD Staff, there is no provision of the company that if Freelance Workers who work for 20 days/month for 3 consecutive months will be appointed employees. It depends on the decision in each operational unit and depends on the workers whether they are willing to be Permanent Daily Workers (SKU-H) or not.

There is a List of Detailed Salary of the SKU Employee of Nagasakti Mill and Nagasakti Estate in the period of September 2012 available, along with the allowances, overtime and premiums earned by the employees. There is a Company Regulation of PT. SMART Tbk. year 2011-2012 which has been ratified by Directorate General of Industrial Relation and Labour Social Assurance No. 808/PHIJSK-PKKAD/PP/XII/2010. Content of the regulation is still the same with the Company Regulation 2010-2011. Based on the field visit in Pondok 3 Nagasakti Estate, the facilities available are house type G1, housing type G2, mosque, school, daycare center, sport facilities, clean water tanks and an employee hall. Work agreement with the contractors in the term of employment requires the contractors as follow:

- Article 4 of Tax and Labour Social Assurance, point 8: The Labour Social Assurance and its premium on employee employed to carry out the work mentioned in Article 5 shall be managed and paid by the second party according to the rules and regulation.

- Article 5 Job on specification and requirement point 15; in carrying out the job, the second party ensures occupational health and safety of its workforce and the second party is required to equip its workforce with personal protective equipment according to the applicable regulation.

- Article 6 Work Facilities, Point 2 the second party shall provide 3 dump trucks minimum with bin system capacity of 6-10 tons/truck in good condition and ready to use, point 3 legal documents of vehicle and driver such as Certificate of Ownership of Motor Vehicle (BPKB), Vehicle Registration Certificate (STNK), KIR, Driving License and First Aid.

Based on the document review and implementation, there is a work contract on behalf of Riyanto (UD. Bina Karya) as the transporter for transporting FFB to Rama-Rama POM, Nagasakti POM, Kijang POM, Libo POM, Ujung Tanjung POM and Sam-Sam POM No. 002/NSAE/01/2012/KBN-Akt/TBS with the term of 5 years contract from 1 January 2012 until 30 June 2017. Based on the contractor safety inspection on 16 June 2012, the contractor has not met the employment related to Labour Social Assurance. Company has advised the contractor to enroll the employee to Labour Social Assurance and as a follow-up the company has sent a letter to UD. Bina Karya Contractor related to the Labour Social Assurance of the contractor employment.


6.6 The employer respects the right of all personnel to form and join trade unions of their choice and to bargain collectively. Where the right to freedom of association and collective bargaining are restricted under law, the employer facilitates parallel means of independent and free association and bargaining for all such personnel.

The circular letter No. 045/CEO5-SE/11/2010 dated 16 November 2010 made by CEO5 Fransiscus Costan explains about the freedom to unite for the workers in the company. There has been a change in management of workers union in Nagasakti Estate and record has been made to the Social and Manpower Agency with a ratification of membership of Plantation Workers Union Forum of Kampar District with Decree No. Kep.01/DPC-FSP.PP-SPSI/X/2012 on 23 October 2012. There is a Minute of Discussion Meeting Result of Work Unit PUK.FS.PPP.SPSI-NSAM available with the following plenary composition per 17 April 2011: Chairman: Martogi Simbolon, Vice Chairman: M. Markus, Secretary: Andar Ajud Ginting, and Treasurer: Hamlan Marpaung. There are records of regular meeting once a month, one of the meetings was conducted on 10 October 2012 at the office of division 3. The meeting discussed cabin cleanliness and was attended by 16 employees and boards.


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6.7 Children are not employed or exploited. Work by children is acceptable on family farms, under adult supervision, and when not interfering with education program. Children are not exposed to hazardous working conditions.

Related to the policy of not employing children under age, BWL still refers to the company policy regarding employee’s age requirement that stipulated in HR Director Circular Letter No. 002/SE-HRDV/03/09 dated 31 March 2009 that the minimum age limit for the employees is 18 years old. There are data of Nagasakti Estate employees updated on 1 October 2012 that presents name of the employees, sex, date of birth, date of entry into employment, ethnic and religion. Based on the document, there are no employees under the age of 18.


6.8 Any form of discrimination based on race, caste, national origin, religion, disability, gender, sexual orientation, union membership, political affiliation, or age, is prohibited.

There is a circular letter No. 003/CEO5-SE/06/2009 on 24 June 2009 that rules the implementation of industrial relation in the unit, one of the rules is that the company gives freedom for workers to work in any kind of field work without any discrimination of ethnic, religion, race and gender. There are data of Nagasakti Estate employee updated on 1 October 2012 available that presents the name of employee, sex, date of birth, date of entry into employment, ethnicity and religion. Based on these documents, workers come from various ethnics for example Javanese, Batak, Nias, Flores, Mandailing, and Karo; Islamic and Christian religion. It shows that the company provides the same opportunity without considering ethnic, religion, or gender.


6.9 Policy to prevent sexual harassment and all other forms of violence against women and to protect their reproductive rights is developed and applied.

There is a Circular Letter from Agronomy Unit Head No.001/CEO5-SE/02/2009 dated 20 February 2009 ratified by Fransiscus Costan that rules the efforts to socialize prevention and handling of the sexual harassment to all workers. There is a Circular Letter No.001/SE-VPA5/SPO/07/2011 ratified by B. Vijayakumaran on 8 July 2011 that pregnant and nursing female workers are prohibited to work in spraying activities and any works that directly related to the management of hazardous chemicals in accordance with the applicable regulation. There is also a Circular Letter No.002/CEO5-SE/03/2009 dated 2 March 2009 that was ratified by Fransiscus Costan (CEO 5) regarding permit of periodicity of D1, female workers are not obliged to work on the first and second day of menstruation based on the examination from company’s doctor. Organizational structure of Women Commission in Nagasakti Estate ratified on 2 January 2012 is still chaired by Ms. Umi Khalsum by the appointment decree No.001/SK/PUK SPSI NSAE/2/2010. The work program of women commission in Nagasakti Estate among others: sexual harassment counseling to all female workers in Nagasakti Estate every 6 months, checking the daycare centers, and Posyandu (Integrated Health Service Post) activities every month. The procedure of handling sexual harassment is available as follows:

1. In case of sexual harassment, the victim can complain to IKISTRA (Women Association of Riau II Staff) or Women Workers Commission Board (SPSI) orally or in written, then IKISTRA and SPSI will analyze/process the complaint based on the information from the victim.


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2. IKISTRA and Indonesian Workers Union accompany the victim to report to the Head of Unit. 3. Based on information and data obtained, the Head of Unit conducts investigation to obtain evidence. 4. Once the offender is found guilty, the Head of Unit may impose sanction in accordance with Company Regulation or by

law. One of the activities of Women Commission is Posyandu conducted every month, and socialization of sexual harassment on 10 April 2012, located in Employee Hall of Pondok I, attended by 40 participants consisted of wives of employees and Cadre of Family Welfare and Empowerment (PKK) of Pondok I. There is an employee on maternity leave (D2) on behalf of Wan Fazirah. Based on medical report from company’s doctor dr. Noverma, D2 leave started from 30 April 2012 to 29 July 2012, the salary is still paid based on the wage slip of July 2012. The implementation evidence of D1, in the attendance list of period 1-31 July 2012, an SKU employee named Suyatmi took a D1 leave on 27 and 28 July 2012 and it was still counted as workdays. Employee’s complaint came from Head of Work Unit of Indonesian Workers Union of Nagasakti on 10 April 2012 concerning the request of water tank to water the road passed by FFB trucks to prevent from too much dust and especially to maintain the health and comfort of the residents of Pondok 1. There is a minute of water tank use on 12 April 2012 informing that the watering has been done around Pondok 1 using estate water tank to remove existing dust due to many trucks that passed through the road of Pondok 1. The watering was also done around Elementary School and Junior High School Nagasakti.


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

Nagasakti Mill does not accept any supplies from outside of the smallholder’s estate. Nagasakti Mill just only received from the other estate with the same management.


6.11 Growers and millers contribute to local sustainable development wherever appropriate.

In accordance with the results of audit in ST1 and ST2, a number of recordings that show the contribution the company gives to regional development can be shown for Kijang Estate and Ramabakti Estate, among others: a. CSR Recapitulation Document of Nagasakti Estate and Nagamas Estate in the period of 2012 which is documented in CSR

documents. From recapitulation document of CSR implementation in Nagasakti Estate which was signed by Nagasakti Estate Manager, total expenditure for Nagasakti Estate in 2012 ranged from IDR 400,105,144 on following activities: helping the teachers’ honorarium (Kindergarten, Elementary and Junior High School), contributing in road repairing, youth events, local government events, religious social activities, etc. As from recapitulation document of CSRR implementation in Nagamas Estate signed by Nagamas Estate Manager, total expenditure in Nagamas Estate was IDR 296,173,542 that was used for: helping the teachers’ honorarium (Kindergarten, Elementary, Tsanawiyah School (MTs), Diniyah Awaliyah School (MDA)), contributing in repairing infrastructures, youth events, local government events, religious social activities, etc.

b. Document of Local SPK and Local Purchasing by Nagasakti and Nagamas Estate. c. Documents of Local SPK and Local Purchasing by Nagasakti and Nagamas Estate in the period of 2012 which were

documented in Recapitulation Document of Internal Purchasing Demand (Local PPI) and Recapitulation of Local SPK (Local PO).

d. Tax payment documents for example VAT/Income Tax.



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PRINCIPLE #7 Responsible Development of New Plantings

Not Applicable; company did not open / develop new oil palm plantations after November 2005.

Status : Not Applicable

PRINCIPLE #8 Commitment to Continuous Improvement in Key Areas of Activity

8.1 Growers and millers regularly monitor and review their activities and develop and implement action plans that allow demonstrable continuous improvement in key operations.

Company already has a mechanism of Internal Audit related to the implementation of RSPO principles and criteria. The latest assessment was conducted on 6-10 August 2012. BWL also conducted Management review to the implementation of RSPO principles and criteria on 10 October 2012. It was conducted to see the progress status of audit findings.



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3.2. Summary of Assessment Report of Supply Chain

Clause Requirements of Mass Balance Supply Chain Models

1 Documented Procedures

1.1The facility shall have written procedures and/or work instructions to ensure the implementation of all the elements specified in these requirements. This shall include at minimum the following:

a) Complete and up to date procedures covering the implementation of all the elements in these requirements.

b) The name of the person having overall responsibility for and authority over the implementation of these requirements and compliance with all applicable requirements. This person shall be able to demonstrate awareness of the facilities procedures for the implementation of this standard.

a) Company has compiled Procedure on Identification and Traceability (PT. BWL-NSAM/SOP/01), ratified on 8 July 2012. The procedure describes mechanism of fruits receipt (from smallholders estate, scheme smallholders, and supplier/independent smallholders), processing, storing oil and palm kernel in the storage tank, as well as the delivery of products (Crude Palm Oil/CPO and palm kernel) to Dumai Bulking Station. This procedure also provides Supply chain system that is applied based on Mass Balance principles where the Fresh Fruit Bunches (FFB) derived from different sources are processed together. The procedure sets to distinguish the recording between FFB from smallholders’ estate and FFB from non- smallholders’ estate (the receipt code is in the weighbridge station). The recording provided for example: weighbridge card. Furthermore, the FFB are processed simultaneously, while the CPO or palm kernel claimed to be certified products was delivered using Product Delivery Note.

b) Persons that are responsible for the application of these requirements are:

Assistant is responsible for supervising the FFB received to be in accordance with the standards and criteria set, to supervise the processing of FFB, to supervise the process of quality analysis of the processed products.

Head of Administration is responsible for recording and reporting the quantity and quality of the processed products on a regular basis, to supervise the administration process of FFB receipt and delivery of processed products, to supervise important equipment in supply chain are always in good condition, accurate, licensed and well-maintained.

Mill Unit Head (Management Representative) is responsible for ensuring the whole process in supply chain can be carried out well, ensuring that Mass Balance calculation has been done correctly to determine the number of certified products, providing information the parties who need information related to certified products.

Production Controller (Top Management) is responsible to ensure and to guarantee that the products produced can be traced to their sources and the delivery of the products is acceptable in accordance with the quantity and quality.

Status : Full Compliance

1.2The facility shall have documented procedures for receiving and processing certified and non-certified FFBs.

See explanation 1.1 BWL provides mass balance model to determine certified and non-certified products. Implementation of this determination of certified and non-certified products is by putting “Mass Balance Mark” in the Fruit Delivery Note.


2 Purchasing and goods in

2.1

The facility shall verify and document the volumes of certified and non-certified FFBs received.

FFB received by Nagasakti POM were derived from the smallholders’ Estate namely Nagamas Estate, Nagasakti Estate, and Ramabakti Estate (have been certified RSPO). BWL already has a mechanism to determine certified and non-certified FFB.


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The determination is done by putting “Mass Balance Mark” for the FFB derived from the estates which have been RSPO certified. For example: - Fruit Delivery Note (SPB) (No. NMAE/TBS/01/6/12/83389) FFB Origins Block C22, C21, C20 NMAE; Date 6

November 2012; Quantity 6,610 Kg; Amount of bunches 443 bunches; License Plate Number BM 9510 FK; SPB accompanied by “Mass Balance Mark”.

- Fruit Delivery Note (SPB) (No. STPA/TBS/05/11/5/8628) FFB Origins Block C13 Tapung River Smallholder; Date 23 May 2012; Quantity 10,850 Kg; Amount of bunches 9780 bunches; Licensed Plate Number BM 8037 SG; SPB is not accompanied by “Mass Balance Mark” since the FFB from smallholder has not been RSPO certified.

- CPO Delivery Note (No. 2050/CPO/TT/12/11/2885) from Nagasakti POM to Bulking Station dated 5 November 2012,Quantity 35, 210 kg and accompanied by “Mass Balance Mark”.

- Weight bridge Card (No. A091005) FFB Origin Nagasakti Estate; Quantity 6,610 Kg; Delivery Note 2020/TBS/01/12/11/3389; Weight bridge Card accompanied by “Mass Balance Mark”.


2.2

The facility shall inform the CB immediately if there is a projected overproduction.

BWL (Nagasakti POM) has projected CPO production in 2012 in the amount of 22,408 tons and the realization until September 2012 is 18,943 tons. Based on the SOP of Identification and Traceability (PT.BWL-NSAM/SOP/01), it is stated that BWL is committed to reporting to the Certification Body if CPO production exceeds the product claim projected.


3 Record keeping

3.1

The facility shall maintain accurate, complete, up-to-date and accessible records and reports covering all aspects of these requirements.

All records and reports have been made and fully stored by the company. Documents in the form of soft copy are kept in System Application Program (SAP) and documents in the form of hard copy (printed out) are stored in the cabinet in administration room of Nagasakti POM.


3.2

Retention times for all records and reports shall be at least five (5) years.

The procedure of Identification and Tracing Ability (PT. BWL-NSAM/SOP/01) stated that retention time of all records and reports from FFB revenues in POM, palm oil processing, storage of CPO products, Palm Kernel and CPO delivery is 10 (ten) years.


3.3 (a) The facility shall record and balance all receipts of RSPO certified FFB and deliveries of RSPO certified CPO, PKO and

palm kernel meal on a three-monthly basis. (b) All volumes of palm oil and palm kernel oil that are delivered are deducted from the material accounting system

according to conversion ratios stated by RSPO. (c) The facility can only deliver Mass Balance sales from a positive stock. However, a facility is allowed to sell short. a. Nagasakti POM has recorded all FFB which is RSPO certified by giving special marking for the FFB derived from certified

estates. However, based on the information from on of the Nagasakti POM staffs, Nagasakti POM has not sold certified CPO. b. Nagasakti POM can show recording of volume of the CPO and PKO delivery to the Bulking Station. For example: Record of


ASSESSMENT REPORT


CPO Delivery to the Bulking Station dated 30 October 2012 in the amount of 38,500 kg of CPO. c. NSAM has set the Mass Balance Supply Chain model; however, it is acknowledged that the company did not sell CPO that

has been RSPO certified.

Status: Observation

3.4 The following trade names should be used and specified in relevant documents, e.g. purchase and sales contracts, e.g. *product name*/MB or Mass Balance. The supply chain model used should be clearly indicated.

NSAM has determined that the supply chain model used is Mass Balance. NSAM implements the Mass Balance model only on the FFB revenues process to CPO dispatch until reaching the Bulking Station. However, NSAM does not sell CPO that has been RSPO certified.


3.5 In cases where a mill outsources activities to an independent palm kernel crush, the crush still falls under the responsibility of the mill and does not need to be separately certified. The mill has to ensure that the crush is covered through a signed and enforceable agreement.

Not Applicable. NSAM does not process Palm Kernel.

Status : Not Applicable

4 Sales and goods out

4.1

The facility shall ensure that all sales invoices issued for RSPO palm oil delivered include the following information:

(a) The name and address of the buyer

(b) The date on which the invoice was issued

(c) A description of the product

(d) The quantity of the product delivered

(e) Reference to related transport documentation

There is Sales Contract No. 005/BWL/CPO/EX/12 available that contains information including: (a) Name and address of the buyer Golden Agri International PTE,LTD; Address 108 Pasir Panjang Road #06 – 00

Golden Agri Plaza Singapore 118535. (b) Date of invoice issued 16 May 2012. (c) A description of the product; including applicable supply chain model (segregation or Mass Balance) there is a CPO

product specification delivered to buyer. For example: FFA content. However, in the sales contract document there is no explanation about supply chain model applied and information about RSPO Certified.

(d) Amount of products delivered 4,000 tons CPO.

Status : Opportunity for Improvement No. 10

5 Training

5.1

The facility shell specifies and provides the training for all staff as required to implement the requirements of the Supply Chain Certification Systems.


ASSESSMENT REPORT


NSAM has conducted training for all staffs related to the procedure of Supply Chain Certification System. The training has been done twice. Earlier training was conducted on 11 August 2011. At the time of surveillance NSAM showed the latest training conducted on 12 March 2012 located in Meeting Room of PC/RC Office which was attended by all staffs of NSAM.


6 Claims

6.1

The facility shall only make claims regarding the use of or support of RSPO certified oil palm products that are in compliance with the RSPO Rules for Communications and Claims (refer to Annex 10).

NSAM has not been able to show the use of claim to support RSPO certified palm oil in accordance with RSPO Guidelines for Communication and Claims stated in Sales Contract, Delivery Order and Invoice.

Status : Opportunity for Improvement No. 10


ASSESSMENT REPORT


3.3. Conformity Checklist of Certificate and Logo Use

1. Evidence of permission or approval certificate and logo from Certification Body which submitted by Client

Status

The Company has received evidence of approval / clearance for using the RSPO certificate and logo from Certification Body Mutuagung Lestari (Letter No. 099.19/MUTU/I/2012)

√

2. Implementation of certificate and logo used by Client comply with size and type (shape) against Guideline of Logo Use

BWL use the logo at off-product in the scope of PT. BUANA WIRALESTARI MAS – Nagasakti Mill Scope

√

3. Implementation of Certificate and Logo is not used on product

BWL does not use the logo both at on-product in the scope of PT. BUANA WIRALESTARI MAS – Nagasakti Mill Scope

√

4. Controlling of Certificate and Logo, including withdrawing inappropriate logo

BWL, Nagasakti POM has controlling the certificate and logo in the operational area √


ASSESSMENT REPORT


3.4. Summary of Time Bound Plan Verification of the RSPO Certification

Total companies visited (0.8 √Y) Where Y is the total of one holding company. The company name : Indrasakti Mill (PT. Buana Wiralestari Mas) with 4 (one) Estate such as Indrasakti Estate, Indrasakti Plasma, Indragiri Plasma, Indralestari Plasma (PT. Meganusa Inti Sawit)

2.1

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

Indrasakti POM (PT. Buana Wiralestari Mas) is compliance with applicable laws and regulations. √

2.2

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

Indrasakti POM (PT. Buana Wiralestari Mas) has demonstrated land use and not legitimately contested by local communities.

√

6.3

There is a mutually agreed and documented system for dealing with complaints and grievances, which is implemented and accepted by all parties.

Indrasakti POM (PT. Buana Wiralestari Mas) has documented system for dealing with complaints and grievances, which is implemented and accepted by all parties

√

6.4

Any negotiations concerning compensation for loss of legal or customary rights are dealt with through a documented system that enables indigenous peoples, local communities and other stakeholders to express their views through their own representative institutions.

Indrasakti POM (PT. Buana Wiralestari Mas) has SOP of Land Compensation Standard and Identification No. SOP/NP/SMART/VII/D&L002, describe Land identification, settlement patterns, Consultative Process Claims, Payment and Reporting Procedures.

√

7.3

New plantings since November 2005, have not replaced primary forest or any area required to maintain or enhance one or more High Conservation Values.

Indrasakti POM (PT. Buana Wiralestari Mas) and its supply base have not replaced primary forest or any area required to maintain or enhance one or more High Conservation Values

√

7.5

No new plantings are established on local peoples’ land without their free, prior and informed consent, dealt with through a documented system that enables indigenous peoples, local communities and other stakeholders to express their views through their own representative institutions.

Indrasakti POM (PT. Buana Wiralestari Mas) and its supply base no plantings established on local peoples’ land without their free, prior and informed consent

√

7.6

Local people are compensated for any agreed land acquisitions and relinquishment of rights, subject to their free, prior and informed consent and negotiated agreements.

Indrasakti POM (PT. Buana Wiralestari Mas) and its supply base no plantings established on local peoples’ land without their free, prior and informed consent

√


ASSESSMENT REPORT

SPO – 4006a.4 Halaman 47

Prepared by Mutuagung Lestari for PT. Buana Wiralestari Mas – Nagasakti POM

3.5 Identification of Findings, Corrective Action, Observations, Opportunity for Improvement and Noteworthy Positive Components

Further explanation of the non-conformities raised and corrective actions taken by BWL are provided in this section. BWL prepared a corrective action that was reviewed and accepted by MUTU and corrective actions taken to close all non-conformities shall be verified during next assessment.

3.5.1 Identification of Findings, Corrective Action, Observations at Stage-2 Assessment

No. Ref Std/ Indicator

Non-conformance Grade Location Requests for Corrective Actions

Time Limit

Observation and Date Status Closed date

2011.25 Minor 4.7.2

Audiometric Test Examination – The Company has not conducted the audiometric test and the evaluation result for workers at station with the noise intensity over the threshold set by the regulation to ensure OHS for the workers.

CFA Mill It is suggested to provide audiometric test and evaluation result evidence for workers at station with the high noise intensity the threshold set by the regulation.

S1 July, 15, 2011 The Company has done audiometric test to workers who work at station with the noise intensity over the limit set by the regulation. The Company has also evaluated the audiometric test result.

Closed 15-July-2011

2011.26 Major 5.2.2

HCV management program – The company has arranged HCV monitoring and management plan. However, there was evidence that HCV socialization to the community which was planned to be held in May 2011 has not been done. It is strongly suggested to do socialization of HCV to the community as planned.

CFA Estate The company has to provide evidence of HCV socialization to the community

S1 July, 25, 2011 The Company has provided evidence of HCV socialization to the public around the estate on July 18, 2011 in the form of socialization HCV letter invitation to the Sekijang Village head, village officials and Sekijang villagers; minutes of the HCV socialization; attendance list of activities and documentation (in the form of photographs of events).

Closed 25-July-2011

2011.27 Minor 5.3.1

Hazardous waste management – Based on the field visit, hazardous waste that has not collected in permitted place was

CFA Mill It is suggested the waste of chemical material’s used packaging was collected in licensed

S1 07 Nopember 2012 - Based on the study of

documents, packaging pestisda been submitted

Closed 08-November-

2012


ASSESSMENT REPORT



still found. For instance: chemical material’s used packaging waste in Naga Sakti POM. The company explained that the collection was only temporary before the waste was returned to the supplier. However, the company needs to consider collecting chemical material’s used packaging waste in the permitted place as required by the regulation (Government Regulation no 18 year 1999).

places. to the supplier. - The Company has

implemented a practice of "Optimization" to remove properties from the former packing hazardous chemicals. It has consulted with relevant agencies (Ministry of Environment).

2011.28 Minor 5.3.1

Hazardous Waste Monitoring Reporting – The company has not conducted the advance action related to hazardous waste storage which has been stored over the retention time which is of 90 days, (e.g.: the waste of Erkafuron pesticide used packaging in hazardous waste storage of Naga Sakti Estate); and the company also suggested to report hazardous waste monitoring result (e.g.: chemical material’s used packaging in Naga Sakti POM and the waste of pesticide used packaging in hazardous waste storage of Naga Sakti estate) to the related agencies.

CFA Mill and Estate

The company is suggested to conduct the advance action related to hazardous waste management which has been stored over 90 days has been treated based on the regulation; the company also has to provide the reporting evidence of chemical material’s used packaging to the related agencies.

S1 07 Nopember 2012. - BWL already have a

license of hazardous waste storage (No. 660/BLH-WAS/ILB3.PWP/04 dated 24 September 2012) with shelf life until 180 days.

- BWL (Nagasakti Mill) have also been delivered to the BLH LB3 monitoring report dated October 29, 2012 and submit a report to the pesticide packaging waste former Ministry of Environment.

Closed 08-November-

2012


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3.5.3 Identification of Findings, Corrective Action, Observations at Annual Surveillance 1 Assessment

No. CAR

Ref Std

Findings Grade Location Corrective Action Time

Limits Observations and Date Status

Closing date

- - During the second surveillance BWL (Nagasakti POM scope) has provide good implementation of RSPO standard and there was no non-conformance raised.

- - - - - - -


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3.5.3

Opportunity for Improvement

No Ref Std Descriptions

1 Minor 2.1.4

Companies preferably review the mechanisms evaluate compliance regulations related to the management of oil palm perkebnunan (update relevant regulations).

2 Major 4.7.1

BWL be reviewing the field, such as ensuring implementation of OHS fitting symbol of hazardous and hazardous waste synbol in accordance with the regulation.

3 Minor 4.7.2

Companies need to create a mechanism of follow up medical examination carried out in the event of interruption / not normal, for instance, set a time limit follow-up so not too long to make a written request referral to a physician clinic and make further checks to be done.

4 Minor 4.7.3

BWL preferably able to review the hazard identification and risk assessment of all work at the Mill and in the Estate. For example: on Land Application and Solar tank of the results in the form of environmental hazard identification and not the impact on workers.

5 Minor 4.7.6

BWL can reevaluate completeness first aid box in the work unit (Mill and Estate) was found in first aid box at hazardous waste storage Nagasakti Estate (Povidone Iodine 15 ml should be 60 ml), and hazardous waste storage Nagasakti Mill (no plaster quickly, povidone iodine 15 ml , should be 60 ml, 50 ml distilled water, should be 100 ml)

6 Major 5.2.1

- The Company an opportunity to increase the performance of the management of conservation areas to create a more systematic and measurable, such as one timeline, activity description, constraints, and resource requirements etc..

- The company should be able to expand planting perennials for the entire river border that are at work in the plantation area.

7 Major 5.3.1

Major 5.3.2

Companies an opportunity to increase waste management performance by including the estimated total volume of waste generated and categories of waste (or non-hazardous and hazardous materials).

8 Minor 5.3.1

BWL should ensure that the optimization process has removed the packing properties of Hazardous on former chemicals through laboratory testing in accordance with Regulation 18 jo. 85 of 1999 articles 7 and 8 of B3 Waste Management.

9 Minor 6.1.1

BWL an opportunity to increase performance management and monitoring of the social impact of the plan and more systematic monitoring. For example: create a timeline, targets, constraints and resource requirements.

10 SC 4.1 6.1

NSAM preferably able to inform the buyer in the sale document CPO / PKO / PK that the resulting product is RSPO certified products since January 20, 2012.


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3.5.4

Noteworthy Positive Components

No Ref Std

Descriptions

1 Kriteria 4.7

NSAM have been certified Gold Flag of OHS since May 4, 2010.

2 Minor 6.1.4

Relationships and special attention given to the farmers by the change very well. This is evidenced by placing an assistant and foreman for each KUD, fertilizer loans without interest, savings replanting, competency enhancement training farmers etc.

3 Kriteria 8.1

Have been certified for Sustainability and Carbon since February 3, 2012.


ASSESSMENT REPORT



3.6 Summary of Arising Issues from Public, Organization and Auditor Response

Public Issues Organization Response Auditor Response

Kampar Environmental Agency (Mr. H.M Itarius, Head of Controller)

In general, We considered that RJP and BWL have complied with the provisions of the protection of environmental management in terms of the completeness of the documents such as EIA, wastewater discharge permits, waste discharge permit B3.

In relation to reporting, the company also considered quite docile in terms of sending regular reports monitoring and environmental management in the form of RKL / RPL, wastewater management reports, reports of B3 waste management, etc.

In addition to the report, we routinely monitoring. Based on the monitoring results, there is no conflict or disagreement among community with the company.

Other positive aspects of the company is a cooperative attitude to implementing of our direction. The company always to actively communicate the problems faced.

With these positive notes, the company is still considered worthy of RSPO certified environmental aspects.

RJP and BWL always strive to comply the environmental regulations that apply in the local area. Commitments that have been demonstrated is expected to be maintained in the future.

Based on the observation of the documents and field visits, the audit team assessed the company has consistently implemented environmental management quite well.

Kampar Labor Agency (Mr. Irwan S.M.H.K, Head of Industrial Relations) In general, we assess the performance of the company quite well in terms of employment. Referring to the provisions of Act 13 of 2003, the company has complied with the applicable regulations, such as in the form of: - The minimum wage is in conformity with the provisions

of the UMP. UMP in 2012 was IDR. 1,345,000,- and for

Companies view employee is an asset to be one of the motor company's success. Therefore, BWL and RJP apply the standard of work and remuneration as well as the Occupational Health and Safety (OHS) according regulations. Achievement is currently a whip to do better in the future so that the relationship with the worker still

Based on observations document and interviews with the worker known company has been giving facilities to its workers decent enough. For example: Wages are adjusted by setting the Governor of Riau, housing, clean water, lighting and other premiums.


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2013 is IDR 1,490,000,- - Reporting regularly P2K3 implementation in the

company. Reports for the period July to September are generally acceptable and in accordance with the contents of the systematics and content is governed by labor laws.

- Accident Reports has submitted periodically - Do not employ child labor - Daily employees who work for 3 (three) months have

been appointed as permanent employees. - Operators of production equipment has a certificate,

there are even plans to train helpers to have a certificate.

- The company has been quite obedient in the provision of personal protective equipment although sometimes ignore labor for a reason. Department of Labor advised even if the necessary disciplinary sanctions can be imposed for employees who do not comply with PPE.

Supervision of the Department of Labor, to date there are no reports or findings regarding the dispute between the company and its workforce. With these positive notes, the company is still considered worthy of RSPO certified aspect of employment.

running mutual and harmonious.

Kampar Plantation Agency (Mr. Nusyirwan; Head of Plantation Unit) In general, from the point of view of the Plantation Office no significant negative note from RJP and BWL, on the contrary, many of the positive aspects of the implementation of the plantation by RJP and BWL from side to improve the welfare of the people. When compared with some other

The existence of the company is also expected to raises benefits for the surrounding community. RJP and BWL regularly sends reports to the Plantation Office. The achievement now will be a benchmark in order to do a better job in the future.

Based on the observation document is known that the company has consistently tried to comply with all applicable regulations in the management of oil palm plantations. Such as: do reporting Developing plantation (LPUP), FFB pricing etc.


ASSESSMENT REPORT




neighboring companies, Sinar Mas Group's performance is much better. Not a few farmers from around the company that wants to plasma Sinar Mas. Supervision plantation carried out by the Provincial Government with the support of the Plantation Office District. This includes setting FFB is facilitated by the Provincial Government every week. In a meeting FFB pricing were representatives of the District Department of Plantations, companies, and communities. Reports plantation business (LPUP) routinely submitted to the Department of Plantations. From the Plantation Office records note that the report for the first half has been submitted. Systematics and the contents of the report are in accordance with applicable regulations.

Kayu Aro Village (Mr. Gunawan; Head of Village) For the communities, the existence of the RJP is helpful to improve the welfare significantly. Some progress is evident with the pattern of the company's work is transparent. When compared to other companies operating in Kampar, including Sinar Mas best. Some of the benefits of society: - FFB price is guaranteed - Provision of fertilizer more secure from fraud and error

selection - The Convenient supplying fertilizers and medicines with

no-interest loans - Program funds replanting preparation - Corporate social responsibility for the village in various

aspects such as: educational, religious, youth, street repairs, etc.

Partnership through the core-plasma provides valuable lessons in engaging the community in the core business that is being run by the company. Programs that apply to farmers plasma is an indirect education on how to run this business. Expected relationships with smallholders to remain harmonious and mutually support each other.

Based on the observation of documents and visits to the field, it is known that the company has made the management of oil palm smallholder’s pattern very well. The relationship between the company and farmers established harmony.


ASSESSMENT REPORT




- Technical guidance in the form of provision of Assistant Foreman with skill and good enough to ensure the plantation by KUD going well according agronomic principles, as in the case of: fertilizer, crop rotation, fertilizers rotation, treatments, etc.

- The development of cooperation also on employment opportunities for the surrounding community.

Until now, We noted there are not complaints from the public, both in terms of environmental damage due to the relatively remote location of the MCC Ramarama atauapun other losses. The problems that happened can usually be resolved quickly because of Communications intense every day, either directly or through officers to the leadership of the company in the KUD. So far there are no barriers in terms of communication. In itself there is a mechanism in KUD monthly meetings between farmer groups with KUD officials to discuss various issues. At the meeting the ever-present corporate officer stationed at KUD. Society did not mind if the companies get RSPO certificate because of the aspect of community development has proven successful.


ASSESSMENT REPORT

SPO – 4006a.4 Halaman 56 Prepared by Mutuagung Lestari for PT. Buana Wiralestari Mas – Nagasakti POM

4.0 CERTIFIED ORGANISATION'S ACKNOWLEDGEMENT OF INTERNAL RESPONSIBILITY

4.1 Formal sign-off of assessment findings

Hereunder sign by management representative from inspected company to acknowledge a field assessment and agree for all content explained in this assessment report, included of non-compliance findings.

Signed on behalf of:

PT. RAMAJAYA PRAMUKTI

MUTUAGUNG LESTARI

Head of Environmental Departement

Lead Auditor

Ismu Zulfikar

Octo HPN Nainggolan

Thursday, November, 08th, 2012

Thursday, November, 08th, 2012


ASSESSMENT REPORT


Annex 1. List of Stakeholder Contacted in the RSPO Certification Process

No Institution/Department Address Phone/Email Form of Contact

Date of Contact

1 Environmental Agency, District of Kampar

Bangkinang - Interview

05-Nop-2012

2 Manpower Agency, District of Kampar


05-Nop-2012

3 Plantation Agency, District of Kampar


05-Nop-2012

4 Kayu Aro Village Desa Kayu Aro - Interview 02-Nop-2012


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Annex 2. Audit Plan

DATE 05 - 09 November 2012

PLANNED TIME

ACTUAL DURATION

PROCESSES / CLAUSES TO BE AUDITED AUDITOR

05.11.2012 08.00-17.00

08.00-17.00

Document Review / Observation : Verification of Main Assessment / Observation :

All Team

06.11.2012 08.00-12.00

14.00-17.00

08.00-12.00

14.00-17.00

Field Observations to the PT Buana Wiralestari (Nagasakti POM) weighting of fresh fruit bunch (FFB), grading areas, loading ramp, sterilizer, clarifier, pressing areas, boilers, CPO storage, drainages, safety (EPR), liquid waste pond, workshop, and warehouse; Supply Chain Implementation. Continued for field observations (Interview with local villagers)

All Team

07.11.2012 08.00-12.00

14.00-17.00

08.00-12.00

14.00-17.00

Field Observations (Nagamas Estate) Nursery, Land Preparation, manuring, spraying, harvesting, FFB Transportation, land application, housing complex, chemical storage, workshop. Clarification of findings

All Team

08.11.2012 08.00-12.00

14.00-17.00

08.00-12.00

14.00-17.00

Field Observations (Nagasakti Estate) Land Preparation, manuring, spraying, harvesting, FFB Transportation, land application, housing complex, chemical storage, workshop Clarification of findings

All Team

09.11.2012

08.00-10.00 10.00-12.00

08.00-10.00 10.00-12.00

Preparing Closing Meeting Closing Meeting

All Team

Noted: - Lunch and pray conducted at 12.00 – 14.00 pm - Consultation public with the relevant agency in the Kampar District conducted together with PT. BWL at November, 05th 2012 - Closing Meeting conducted together with PT. Ramajaya Pramukti on November, 09th 2012.


ASSESSMENT REPORT


Annex 3. Glossary

AAA : Agronomy Audit and Advisory

AMDAL : Analisis Mengenai Dampak Lingkungan (Social and Environmental Impact Assessment)

APD / PPE : Alat Pelindung Diri (Personal Protection Equipment)

ASEAN : Association of South East Asian Nations

AVP : Assisstant Vice President

B3 : Bahan Beracun dan Berbahaya (Hazardous Material Waste)

BOD : Biological Oxygen Demand

CEO : Chief Executive Officer

CFA : Comment For Action

CPO : Crude Palm Oil

CBD : Convention on Biodiversity

ENDV : Environment Division

HCV : High Conservation Value

HGU : Hak Guna Usaha. (Land Use Permit)

ISBPR / HIRARC :

Identifikasi Sumber Bahaya, Penilaian, dan Pengendalian Resiko / Hazard Identification Risk Assessment and Risk Control

IUP : Izin Usaha Perkebunan. (Plantation Operation Licence)

IP : Identity Preserved

IPAL / WWTP : Instalasi Penyaluran Air Limbah / Waste Water Treatment Plant

JAMSOSTEK : Jaminan Sosial Tenaga Kerja (Social Assurance of Labor)

Jankos / EFB : Janjangan Kosong / Empty Fruit Bunch

K3 / OHS : Keselamatan dan Kesehatan Kerja / Occupational Health and safety

KER : Kernel Extarction Rate

LC : Land Clearing

MAA : Mill Audit Advisory

MB : Mass Balance

NSAE : Nagasakti Estate

NSAM : Nagasakti Mill

NC : Non Comformance

OIA : Operations Internal Audit

OER : Oil Extarction Rate

P2K3 :

Panitia Pembina Keselamatan dan Kesehatan Kerja (Occupational Safety and Health Committee)

PC : Production Controller

PHT / IPM : Pengendalian Hama Terpadu / Integrated Pest Management

PK : Palm Kernel

PKS / POM : Pabrik Kelapa Sawit / Palm Oil Mill

PSM : Perkebunan Sinarmas

RBKE : Ramabakti Estate

RJP : Ramajaya Pramukti

RC : Region Controller

RKL/RPL : Rencana Kelola Lingkungan/ Rencana Pemantauan Lingkungan. (Environmental Management Plan/ Environment Monitoring Plan)

ASA-01 : Surveillance 1


ASSESSMENT REPORT


SMARTRI : Smart Reseach Institute

SOP : Standard Operational and Procedure

ST 1 : Stage 1

ST 2 : Stage 2

TBS / FFB : Tandan Buah Segar / Fresh Fruit Bunches

UKL/UPL : Upaya Kelola Lingkungan/ Upaya Pemantauan Lingkungan. (Environmental Management Efforts/ Environmental Monitoring Efforts)

VPA : Vice President Agronomy

VPM : Vice President Manufacture