· PT MUTUAGUNG LESTARI ASSESSMENT REPORT SPO – 4006a.5 1 Prepared by Mutuagung Lestari for Angsana POM – PT Ladangrumpun Suburabadi Figure 1

PT. MUTUAGUNG

LESTARI

ASSESSMENT REPORT

Roundtable on Sustainable Palm Oil Certification

[ ]Stage-1 [ ] Stage-2 [√] Surveillance 2 [ ] Re-Assessment

Plantation Management/Owner : SIME DARBY Plantation Sdn Bhd

Plantation Name : Angsana POM, Angsana Estate Gunung Sari

Estate, Pantai Bonati Estate and KKPA-4

Estate (PT. Ladangrumpun Suburabadi and PT

Sajang Heulang – Minamas Plantation)

Location :

Sub District of Angsana, District of Tanah Bumbu, Province of Kalimantan Selatan, Indonesia

Certificate Code : MUTU-RSPO/006a LSI

Date of certificate issue : 6 Juli 2011

Date of expiry of certificate : 6 Juli 2016

Assessment Assessment

Date PT. Mutuagung Lestari

Auditor Checked

by Approved

by

ST-2 4-9 October 2010 Deni A. Novendi, Heri Satono, Muardi Marwas, Ibnu Satria

Taufik Margani

Tony Arifiarachman

S-1

24 – 26 April 2012 Octo H.P.N Nainggolan,

Oktovianus Rusmin, Rudi Ramdani.

Taufik Margani

Tony Arifiarachman

S-2 29 April -1 May 2013

Octo H.P.N Nainggolan, Marsudi Eko Santoso, Moh Arif Yusni, Syarip Lambaga, Sandra

Purba

Taufik Margani

Tony Arifiarachman

Mutuagung Lestari • Raya Bogor Km 33,5 Number 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

Assessment Submitted

to RSPO on: Approved

by RSPO on: Approved

by MUTUAGUNG LESTARI on:

S-2 26 June 2013 - 10 June 2013

http://www.mutucertification.com/

PT. MUTUAGUNG

LESTARI

ASSESSMENT REPORT

SPO – 4006a.5 ii Prepared by Mutuagung Lestari for Angsana POM – PT Ladangrumpun Suburabadi

TABLE OF CONTENT

FIGURE

Figure 1. Location Map of PT Ladangrumpun Suburabadi Figure 2. Operational Map of PT Ladangrumpun Suburabadi

1 2

1.0 SCOPE of the SURVEILLANCE ASSESSMENT

1.1 National Interpretation Used 3

1.2 Organization Information 3

1.3 Type of Assessment 3

1.4 Location of Plantations, Mill and Area Statement 3

1.5 Description of Supply Base 4

1.6 Dates of Plantings and Cycles 5

1.7 Tonnage Certified 5

1.8 Other Certifications 6

1.9 Time-Bound Plan for Other Management Units 6

2.0 ASSESSMENT PROCESS

2.1 Certification Body 8

2.2 Assessment Team 8

2.3 Assessment Methodology, Assessment Process and Locations of Assessment 8

2.4 Stakeholder Consultation and List of Stakeholders Contacted 11

2.5 Date of Next Surveillance Visit 11

3.0 ASSESSMENT FINDINGS

3.1 3.2

Summary of Assessment Report of the RSPO Certification Summary of Assessment Report of Supply Chain Requirement

12 34

3.3 Conformity Checklist of Certificate and Logo Use 39

3.4 Summary of RSPO Partial Certification 40

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

43

3.6 Summary of Arising Issues from Public, Management and Auditor Responses 50

4.0 CERTIFIED ORGANIZATION’S ACKNOWLEDGEMENT OF INTERNAL RESPONSIBILITY

4.1 Formal Signing of Assessment Findings 52

APPENDICES

1. List of Stakeholders Contacted in the RSPO Certification Process 53

2. Assessment Program 54

3. Glossary 55

PT MUTUAGUNG LESTARI

ASSESSMENT REPORT

SPO – 4006a.5 1 Prepared by Mutuagung Lestari for Angsana POM – PT Ladangrumpun Suburabadi

Figure 1. Location Map of PT Ladangrumpun Suburabadi

PT MUTUAGUNG LESTARI

ASSESSMENT REPORT

SPO – 4006a.5 2 Prepared by Mutuagung Lestari for Angsana POM – PT Ladangrumpun Suburabadi

Figure 2. Operational Map of PT Ladangrumpun Suburabadi

PT. MUTUAGUNG LESTARI

ASSESSMENT REPORT

SPO – 4006a.5 Page 3 Prepared by Mutuagung Lestari for Angsana POM – PT Ladangrumpun Suburabadi

1.0 SCOPE OF THE CERTIFICATION ASSESSMENT

1.1 National Interpretation Used National Interpretation, RSPO Principles and Criteria (P&C) for Sustainable Palm Oil Production, Republic of Indonesia - RSPO INA-NIWG, May 2008 and RSPO Supply Chain Certification Standard November 2011.

1.2 Organization Information

1.2.1 Company name SIME DARBY Plantation Sdn Bhd

1.2.2 Contact person Mohamad Pirabaharan

1.2.3 Company address and site address The Plaza Lt. 36 Jl MH Thamrin Kav. 28-30 Jakarta 10350

1.2.4 Telephone +62-21-2992650

1.2.5 Fax +62-21-5711652

1.2.6 E-mail [email protected]

1.2.7 Web page address www.simedarby.com

1.2.8 Company status Swasta

1.2.9 Management Representative who completed the application for certification

Mohamad Pirabaharan (Head of TQEM Plantation)

1.2.10 Registered as RSPO member 1-0008-04-000-00 date of 08 September 2004

1.3 Type of Assessment

1.3.1 Scope of Assessment Palm Oil Mill and supply base

1.3.2 Type of certificate Single

1.3.3 Company names listed in the certificate PT Ladangrumpun Suburabadi

1.3.4 Number of management unit

1.4 Locations of Mill, Plantations and Area Statement

1.4.1 Location of Mill

Name of Mill Location

GPS

Latitude Longitude

Angsana POM Sub District of Angsana, District of Tanah Bumbu, Province of Kalimantan Selatan

030 36’ 43,7”

1150 26’ 35,3”

1.4.2 Location of Supply Base

Name of Supply Base Location

GPS

Latitude Longitude

Angsana Estate Sub District of Angsana, District of Tanah Bumbu, Province of Kalimantan Selatan

30 38’ 45” – 30 35’ 39”

1150 34’ 04”-1150 38’ 11”

Gunung Sari Estate

Sub District of Angsana, District of Tanah Bumbu, Province of Kalimantan Selatan

30 41’ 27” – 30 37’ 40” 1150 33’ 34”-1150 39’ 46”

Pantai Bonati Estate

Sub District of Satui, District of Tanah Bumbu, Province of Kalimantan

1150 32’ 23” – 1150 41’ 56”

3041’35” – 3046’05”

mailto:[email protected]

http://www.simedarby.com/


ASSESSMENT REPORT


Selatan

KKPA4

Sub District of Angsana and Sungai Loban, District of Tanah Bumbu, Province of Kalimantan Selatan

1150, 625 – 1150, 725 E 3.650 - 3,750 S

1.4.3 Tenure

Private

State 11,571.85 Ha

Community

1.4.7 Area Statement

Total area 11,571.85 Ha

Mature area 10,799.91 Ha

Immature area - Ha

Mill 43.51 Ha

Emplashment 326.33 Ha

Infrastructure 106.26 Ha

Nursery - Ha

Occupation 46.33 Ha

Others area 89.51 Ha

HCV 160 Ha

1.5 Description of Supply Base

1.5.1 Description of Mill

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 (%)

Angsana POM 30

267,994

60,492

22.57

13.186

4.92

- -

*Source Production Data on April 2012 – Maret 2013

1.5.2 Description of Estate(s)

Name of Estates Total Area

(Ha)

Planted Area (Ha)

FFB (tonnes/year)

Yield (tonnes/ha/year)

Supplied to Mill

FFB (tonnes/year)

%

Angsana Estate 3,269.89 3,047.56 65,908 21,62 65,889 99.97

Gunung Sari Estate 2,873.95 2,571.35 61,615 23,96 61,412 99.67

Pantai Bonati 2,715.00 2,505.00 64,684 25,82 37,891 58.58

KKPA4 2,713.01 2,676.00 62,033 23,18 42,319 68.22

TOTAL 11,571.85 10,799.91 254,240 23,645 207.511 77.43


1.5.3 Smallholder(s) and other source

Name of sources

Members Location Total Area

(Ha) FFB

(tonnes/year)

Supplied to Mill

FFB (tonnes/year)

%


ASSESSMENT REPORT


KKPA1 - - 4,055.32 104,730.190 51,809.240 49.47

KKPA 5 - - - 55,097.700 8,659.580 15.72


1.5.4 Product categories FFB/CPO/PK/PKO

1.6 Dates of Plantings and Cycles

1.6.1 Age profile of planted palms*

Planting Year Hectarage (Ha)

Angsana Estate

Gunung Sari Estate

Pantai Bonati Estate

KKPA 4 Total (Ha)

1995 - 593.99 - - 593.99

1996 629.55 838.37 254 - 1721.92

1997 - - 440 - 440.00

1998 1,622.53 1138.99 1811 4572.52

1999 167.38 - - - 167.38

2000 84.04 - - 741 908.38

2001 - - - 92 92.00

2002 - - - 347 347.00

2003 - - - 1,431 1431.00

2006 325.54 - - 65 390.54

2007 181.9 - - 181.90

2008 36.62 - - 36.62

Total 3,047.56 2,571.35 2,505 2.676 10.799.91

1.6.2 New Planting area after November 2007 36.62 Ha

1.6.3 Planting Cycle 1st/2nd Cycle 25 Tahun

1.7 Approximate Tonnage Certified

1.7.1 Past Annual Claim Certified Product

FFB Production 259,611,132 Tonnes/year

CPO Production 58,039,772 Tonnes/year

Palm Kernel (PK) Production 11,203,507 Tonnes/year

Palm Kernel Oil (PKO) Production - Tonnes/year

1.7.2 Claim Certified Tonnage of FFB

Name of Estate(s) Total Area

(Ha) Planted Area

(Ha) FFB

(tonnes/year) Yield

(tonnes/ha/year)

Angsana Estate 3,269.89 3,047.56 68,570 22.5

Gunung Sari Estate 2,873.95 2,571.35 62,998 24.5

Pantai Bonati 2,715.00 2,505.00 66,383 26.5

KKPA4 2,713.01 2,676.00 65,562 24.5

TOTAL 11,571.85 10,799.91 263,513 24.4


ASSESSMENT REPORT


1.7.3 Claim Certified Tonnage of Palm Product

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 (%)

Angsana POM 30 263,513 59,817 22.7 13,176 5.00 - -

1.8 Other Certifications

1.8.1 ISO 9001:2008/ISO 14001: 2004 -

1.8.2 OHSAS 18001:2007 -

1.8.3 HACCP Certified No. 026/MC HACCP/2009 from Mutuagung Lestari and valid until January 21, 2016.

1.8.4 Others -

1.9 Time Bound Plan for Other Management Units

Management Unit Location

Hectarage (Ha)

Time Bound Plan

Status Mills Estates

Sekunyir PT. Indotruba Tengah District of Seruyan and Kotawaringin Barat – Province of Central Kalimantan

7,734.60 2009 Certified

2010

Manggala PT. Tunggal Mitra Plantations

District of Rokan Hilir – Province of Riau

13,836.00 2009 Certified

2010

Bukit Ajong PT. Sime Indo Agro District of Sanggau – Province of West Kalimantan

11,652.00 2009 Certified

2010

Teluk Siak PT. Aneka Inti Persada City of Pekanbaru and District of Siak – Province of Riau

11,134.00 2010 Certified 2011

Sungai Pinang PT. Bina Sains Cemerlang District of Musi Rawas – Province of South Sumatera

6,513.00 2010 Certified

2012

Sukamandang PT. Kridatama Lancar District of Seruyan and Kotawaringin Timur – Province of Central Kalimantan

14,779.92 2010 Certified 2011

Pemantang PT. Teguh Sempurna District of Seruyan and Kotawaringin Timur – Province of Central Kalimantan

16,601.66 2010 Certified 2011

Alur Dumai PT. Lahan Tani Sakti District of Rokan Hilir – Province of Riau

3,759.02 2010 Certified

2012

Teluk Bakau PT. Bhumireksa Nusasejati

District of Indra Giri Hilir – Province of Riau 25,662.00

2010 Certifed 2011

Mandah 2013 -

Mustika PT. Sajang Heulang District of Tanah Bumbu – Province of South Kalimantan

7,794 2012 Certified 2011

Angsana Mini Full Manage smallholders (KKPA)

16,000 2010 Certified 2011

2013 Audited

2013

Angsana PT. Ladangrumpun Suburabadi

District of Tanah Bumbu – Province of South Kalimantan

6,077.00 2010 Certified 2011

Gunung Aru PT. Bersama Sejahtera Sakti

District of Kotabaru – Province of South Kalimantan

12,704.54 2010 Certified 2011

Ladang Panjang PT. Bahari Gembira Ria District of Muaro Jambi – Province of Jambi

1,202.04 2010 Certified

2012

Bebunga PT. Langgeng Muaramakmur

District of Kotabaru – Province of South Kalimantan

16,361.77 2011 Certified

2012


ASSESSMENT REPORT


Pondok Labu PT. Paripurna Swakarsa District of Kotabaru – Province of South Kalimantan

14,892.00 2011 Certified

2012

Selabak PT. Swadaya Andika District of Kotabaru – Province of South Kalimantan

10,361.18 2011 Certified

2012

Rantau PT. Laguna Mandiri

District of Kotabaru – Province of South Kalimantan 15,299.80

2011 Certified 2011

Betung 2013 -

Ungkaya PT. Tamaco Graha Krida District of Morowali – Province of Central Sulawesi

4,145.00 2011 Certified

2012

Rantau Panjang PT. Guthrie Pecconina Indonesia

District of Musi Banyuasin – Province of South Sumatera

10,139.91 2011 Certified

2012

Lembiru PT. Sandika Natapalma District of Ketapang – Province of West Kalimantan

8,406.21

2011 Audited 2011

PT. Budidaya Agrolestari District of Ketapang – Province of West Kalimantan

2011 Audited 2011

MAS PT. Mitra Austral Sejahtera District of Sanggau – Province of West Kalimantan

8,741.29 2011 Audited 2011

Blang SImpo PT. Perkasa Subur Sakti PT. Padang Palma Permai PT. Perusahaan Sri Kuala

District of Aceh Tamiang and District of Aceh Timur- Province of Nanggroe Aceh Darussalam

6,451.99 1,128.90

2011 Certified

2013

Sime Darby has been certified on all 39 units management in Malaysia and 21 units management in Indonesia.

There is a change Time Bound Plan that caused the company delay the certification process as follow :

1. PT Mitra Austral Sejahtera. There are unresolved problems (issues) social. Palm Oil Farmers Union (SPKS) Sanggau have not yet agreed the demands of society and improvement of conflict resolution in accordance with RSPO principles and criteria.

2. PT Sandika Natapalma and PT Agro Lestari have been assessed in June 2011, however there are some noncompliance that must be resolved related to regulatory compliance.

Sime Darby has informed the Time Bound Plan and Mutuagung has considered that Sime Darby still meet the requirements of the RSPO for Partial Certification.


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]

2.2 Assessment Team

S-2 Lead Assessor and Assessment Team: 1. Octo H.P.N Nainggolan (Lead Auditor). A Indonesian citizen, Bachelor of Agriculture, majoring of Social

Economics of Agriculture (Agribusiness). Seven years working experience since 2004 at oil palm Plantation Company in Indonesia and followed several trainings namely: Training of Conservation of Natural and Biological Resources in supporting HCV, Basic Plantation Management Program, Plantation Integrated Pest Management training, Management System Certification (ISO 9001-2008/SNI 19011-9001:2008), Environment Management System (ISO 14001:2004), SMK3 based on OHSAS, RSPO Lead Auditors Training Course endorsed by Proforest and Wildasia, Indonesian Sustainable Palm Oil (ISPO) Lead Auditor training course, supply chain certification system training and RSPO Renewable Energy Directive Lead Auditor training. Currently he worked as an auditor at Certification Body. In Surveillance 2, He assesses the legality, best practices, environmental and Social aspect.

2. M. Syarip Lambaga (Auditor). Bachelor of Agriculture from UNHAS, Master of Science Program Post Harvest Technology of IPB, trainings have been followed among others, Lead auditor training RSPO, In House Training for ISO 9000 and 14001 Lead Auditor Training SFM as Social Expert, ISO 22000 Lead Auditor Training, ISPO Lead Auditor Training, and Malcolm Baldrige Training. Having experience in the plantation of more than 5 years, and experience as a food safety auditor for more than 5 years, team members evaluator SNI BSN Awards, and as a team member for socialization RSPO smallholder and large estates conducted by DMSI 2006-2009. Surveillance 2, He assess the legality and Occupational Health and safety.

3. Marsudi Eko Santoso (Auditor). Bachelor of Agriculture, majoring in Agro technology. Followed the Management System Certification (ISO 9001-2008), Awareness HACCP certification, training of RSPO auditor and training of RSPO Lead Auditor training, ISPO Lead auditor training and distribution quality management process - APMEA. He had involved several time in RSPO certification assessment activities as an auditor. Currently he works for Independent Certification Body. In Surveillance 2, He assess on the legality aspect, employment, welfare workers, fire prevention, child labor and OHS Implementation

4. Moh. Arif Yusni (Auditor). Bachelor of Agriculture, majoring of Plant Pest and Diseases (Plant Protection). He has a working experience in oil palm Plantation Company in Indonesia. Trainings attended namely: Indonesian Sustainable Palm Oil (ISPO) Lead Auditor training course. Now he worked at Independent Certification Body as Auditor. He has been several times following audit related to sustainable palm oil certification system as an observer and auditor. In Surveillance 2, He assess on best practice and worker welfare.

5. Sandra Purba (Trainee Auditor) Bachelor of Forestry, Department of Forest Products Technology, Faculty of Agriculture, University of North Sumatra. Have experience working in oil palm plantations Company. She had attended such training: Training Expert of OHSAS General, Training ISPO Auditor. In Surveillance 2, She assess on the employment, worker welfare and OHS Implementation

2.3 Assessment Methodology, Assessment Process and Locations of Assessment

2.3.1 Figure of person days to implement assessment

S-2 Number of auditors : 5 auditor Number of days for S-2 at site : 3 days Number of working days for S-2 at site :15 Working days

2.3.2 Detail process of assessment

S-2 The assessment was conducted by measuring the sufficiency of implementation with the consistency done by the PT Ladangrumpun Suburabadi & KKPA SHE 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 Scheme

http://www.mutucertification.com/

mailto:[email protected]


ASSESSMENT REPORT


Smallholders October 2009) and Supply Chain Requirement for CPO Mill 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. Some opportunities for improvement of the results S-2 delivered by the auditor MAL to the management unit and the results are the subject will be verified at the next assessment phase (S-3). Improvement of findings from main assesment findings were observed by auditors at thisS-2 assessment. All information obtained was recorded in Check List of PT Mutuagung Lestari (MUTU) and part of S-2. The assessment program please find Appendix 2

2.3.3 Locations of Assessment

S-2 Sample Locations in assessment activities was focused by team auditor are Angsana POM, Gunung Sari Estate and KKPA-4 Estate. Angsana POM:

1. Production Process (Loading ramp until dispatch). Observation related with FFB processing to produce

CPO, emergency response facilities in mill, interview with mill workers (boiler operator and engine room

operator) related with medical checkup, operator's license, wages, grievance , implementation of

Occupational Health and Safety (OHS), training, safe work method, adequacy of PPE and mechanism mass

balance of supply chain model.

2. Chemical storage. Observation of chemicals handling and interviews with warehouse staff about

procedures for chemicals handling, emergencies and implementation of Occupational Health and Safety

(OHS)

3. Water Treatment Plan. Observation on clean water supply that run first

4. Workshop. Observation on emergency facilities and first aid emergency. Interviews with welder about

training, medical checkup, OHS implementation, safety work, grievance mechanism, freedom of association

and wages

5. Diesel fuel tank. Observation on fire-fighting facilities

6. Hazardous waste temporary warehouse. Observation on hazardous waste management in accordance

with regulations and interviews with warehouse staff about medical checkup, hazardous waste handling

procedures and availability of facilities handling exposure and pollution.

7. Waste water treatment plant. Observation of liquid waste treatment plant and handling pollution reduction.

Gunung Sari Estate:

1. Block G8 harvest activities. Observation and interviews with personnel related with the understanding of

SOP, the use of PPE, employee benefits and housing facilities

2. Block G2 maintenance activities. Observation and interview with Spray Foreman and Sprayer team about

corporate policy on application of chemical in riparian areas, company’s policy on periodic medical

examinations, the use and adequacy of PPE, training on spraying techniques, training on OHS, training on

First Aid emergency, gender specific grievance mechanisms, employee benefits and remuneration.

3. Block F15, Integrated Pest Management. Existence of Gupon (owl box), dirt, food residue, and found the

owl).

4. Block F20 Fertilizer activities. Observation and interview with fertilizer workers about corporate policy on

application of chemical in riparian areas, company’s policy on periodic medical examinations, the use and

adequacy of PPE, training on spraying techniques, training on OHS, training on First Aid emergency, gender

specific grievance mechanisms, employee benefits and remuneration.

5. Employee housing. Observation on facility are provided by the company, clean water supply, household


ASSESSMENT REPORT


waste management, lighting / electrical, interviews with employees who live in house about complaints,

socialization and committee gender.

6. Genset room, Observation of security standards, existing grease trap and the function, handling used oil

generators, gensets officers who get regular health checks and trained

7. Agrochemical warehouse, observation on completeness safety sign standards for chemical warehouse

and placement, first aid emergency boxes and workers understanding about it . Do not use chemicals

active ingredient like paraquat.

8. Central warehouse. Observation of standard safety sign for fertilizer warehouse and the storage, first aid

emergency boxes in chemical warehouse and workers understanding about first aid emergency.

9. Diesel fuel tank. Observation of Safety standards. Diesel fuel tank has been paired roof and wall

containment to prevent contamination directly into the ground

10. Hazardous warehouse. Observation of hazardous waste handling that generated in the estate. Warehouse

Waste has protected so isolated and limited access. According to the worker, hazardous waste sent to

hazardous waste temporary warehouse of Angsana Mini POM

11. Workshop, observation of safety standards, management of used oil, according to warehouse personnel,

used oil directly send to hazardous waste temporary warehouse, first aid emergency, understanding of

officers, officers have trained in accordance with competence

12. Fire Fighting Command Post. observation of fire emergency response facilities in KKPA 1, regular checks

every month has scheduled and implemented

13. Infrastructures, There are places of worship in a residential KKPA 1, Bus for pick-up school children and

posyandu officers, drill water wells that have tested the feasibility.

14. Boundaries pole of land use title( HGU) No.2 dan No.9 in Division II GSE

KKPA-4 Estate:

1. Blok I53 harvest activities. Observation and interviews with harvester related with the understanding of

SOP, the use of PPE, employee benefits and housing facilities

2. Block J59 maintenance activities. Observation and interview with Spray Foreman and Sprayer team about

corporate policy on application of chemical in riparian areas, company’s policy on periodic medical

examinations, the use and adequacy of PPE, training on spraying techniques, training on OHS, training on

First Aid emergency, gender specific grievance mechanisms, employee benefits and remuneration.

3. Block I59, Integrated Pest Management. Existence of Gupon (owl box), dirt, food residue, and found the

owl.

4. Block I60 Fertilizer activities. Observation and interview with fertilizer workers about corporate policy on

application of chemicall in riparian areas, company’s policy on periodic medical examinations, the use and

adequacy of PPE, training on spraying techniques, training on OHS, training on First Aid emergency, gender

specific grievance mechanisms, employee benefits and remuneration.

5. Employee housing. Observation on facility are provided by the company, clean water supply, household

waste management, lighting / electrical, interviews with employees who live in house about complaints,

socialization and committee gender

6. Genset room, Observation of security standards, existing grease trap and the function, handling used oil

generators, gensets officers who get regular health checks and trained

7. Agrochemical warehouse, observation on completeness safety sign standards for chemical warehouse

and placement, first aid emergency boxes and workers understanding about it . Do not use chemicals

active ingredient like paraquat.

8. Central warehouse. Observation of standard safety sign for fertilizer warehouse and the storage, first aid

emergency boxes in chemical warehouse and workers understanding about first aid emergency.

9. Diesel fuel tank. Observation of Safety standards. Diesel fuel tank has been paired roof and wall


ASSESSMENT REPORT


containment to prevent contamination directly into the ground

10. Hazardous warehouse. Observation of hazardous waste handling that generated in the estate. Warehouse

Waste has protected so isolated and limited access. According to the worker, hazardous waste sent to

hazardous waste temporary warehouse of Angsana Mini POM

11. Workshop, observation of safety standards, management of used oil, according to warehouse personnel,

used oil directly send to hazardous waste temporary warehouse, first aid emergency, understanding of

officers, officers have trained in accordance with competence

12. Fire Fighting Command Post. observation of fire emergency response facilities in KKPA 1, regular checks

every month has scheduled and implemented

13. Infrastructures, There are places of worship in a residential KKPA 1, L300 Cars for pick-up school children

and posyandu officers, drill water wells that have tested the feasibility

14. Boundarie poles KKPA ~ PT Sajang Heulang already mapped in each village and each landowner. village

boundary following the boundaries that have been set by the government. For examples boundary of

Purwodadi village with Bayan Sari village

Village and Agencies:

1. Forestry and Plantation agency Tanah Bumbu district. Interviews related to warning against

discontinuation of LSI plantation business activity.

2. Environment Agency, Tanah Bumbu district. Interviews related to revocation of the environmental

documents (EIA) of LSI.

3. Manpower and Transmigration Agency , Tanah Bumbu district. Interview related with labor laws.

2.4 Stakeholder Consultation and List of Stakeholders Contacted

2.4.1 Summary of stakeholder consultation process.

Summary of stakeholder consultation process Consultation of stakeholders for PT Sajang Heulang was held by public consultation meeting with internal stakeholders by interviews and local stakeholders conducted by visits to villages and interviews with local peoples. Numbers of input from stakeholders were clarified by PT Sajang Heulang

2.4.2 List of stakeholder contacted

Please find appendix 3

2.5 Determining Next Visiting

The next visit (S-3) will be determined one year after this S-2


ASSESSMENT REPORT


3.0. ASSESSMENT RESULT

3.1. Summary of Assessment Report of the RSPO Certification

MUTUAGUNG LESTARI has conducted an assessment of Angsana POM – PT Ladang Rumpun Subur Abadi Sime Darby Plantation Sdhn Bhd operation consisting of one (1) mill and four (4) oil palm estates. During the assessment, there were two (2) Nonconformities were assigned against Major Compliance Indicators, two (2) nonconformities were assigned against Minor Compliance Indicators; and no nonconformance against supply chain requirement for CPO mill and six (6) opportunities for improvement were identified. Further explanation of the non-conformities raised and corrective actions taken by the company are provided in section 3.5. The company has already prepared and implemented the corrective action(s) that had been reviewed and accepted by Auditor(s) in form of documentation evidence(s) e.g. (document record/photographic). Those corrective action(s) taken that consist of two (2) Major non-conformities and two (2)) Minor non-conformities had been closed out shall be verified during next assessment. MUTUAGUNG LESTARI found that Angsana POM – PT Ladang Rumpun Subur Abadi & KKPA SHE , Sime Darby Plantation Sn Bhd complied with the requirements of RSPO Principles & Criteria and National Interpretation, RSPO Principles and Criteria (P&C) for Sustainable Palm Oil Production, Republic of Indonesia - RSPO INA-NIWG, May 2008 Therefore MUTUAGUNG LESTARI Recommends RSPO Certification of compliance is 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.

There is a recording of information order in External and Internal Communication Log Book (Incoming Mail and Outgoing Mail Registration) at each Estate. It describe about information order and its response. For example, there was a letter from the Head of State Vocational School 1 of Sungai Loban number 421.5/018-HM/SMKN 1 TLS/Disdik/2013 dated December 17th, 2012 Information Order concerning the Placement of Intern at Industrial Area. It was responded by a Letter from GSE Manager on February 28th, 2013 number GSE-eks/149/II/2013. It stated that the management of company would like to receive intern from of State Vocational School 1 of Sungai Loban.

In accordance with the SOP of Records Control number.704/TQEM-ESH/10 point 6.5, on April 4th, 2010, the life time of recording is controlled by its interest.

All infoomation and donation orders have been well responded by LSI. Its responding time is also in accordance with the determined procedure namely 14 days at the maximum.

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.

The type of information and respond covers document and meet the valid national regulation. In accordance with the SOP of Information Answer number AI 0900, on April 1st, 2010, information and response can be submitted to stakeholders.

There was a memoir related with document order consultation to the central management such as a memoir from the CEO number M-024/CEO/V/2008 on May 7th, 2008 concerning Information Submission. It stated that information submission related with strategy, concept, and company’s plan should be approved by the Group Chief Executive Sime Darby through Corporate Communications Departments currently known as Plantation Services Department.


ASSESSMENT REPORT


In accordance with the SOP of Records Control number.704/TQEM-ESH/10 point 6.5, on April 4th, 2010, the life time of recording is controlled by its interest.

All information order recordings are still saved and recorded in information order and response document at PT LSI.


PRINCIPLE #2 COMPLIANCE WITH APPLICABLE LAWS AND REGULATIONS

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

Angsana POM and its supplier (Angsana Estate, Gunung Sari Estate, Pantai Bonati Estate and KKPA 4 Estate) have met regulations and rules, as follow:

1. Completing the permit on the use of Hazardous and Toxic Waste Storage Warehouse in accordance with the Government Regulation number 18 Year 1999;

2. Training, job opportunity, good working relationship with workers, salary in accordance with the regulation, opportunity to join with organization have meet Law number 13 Year 2003 concerning Manpower.

3. Permit for the application of liquid waste from palm oil mill has met the Decree of Environmental Minister Number 29 year 2003 concerning permit for the use of liquid waste from palm oil mill.

4. LSI has document of Plantation Business Registration Letter as an effort for plantation business Number 458/Menhutbun-VII/2000 on April 25th, 2000. The wide area of plantation and capasity of palm oil mill is 60 Ton FFB/hour. It has met the Regulation of Agriculture Minister Number 26 Year 2007 concerning plantation business permit.

Based on the result of public consultation with Local Environmental Agency and Plantation Agency of Tanah Bumbu Regency, there were several letters on:

1. Termination of plantation activity and activity at palm oil mill owned by PT Ladangrumpun Suburabadi according to the Letter from Forestry and Plantation Agency of Tanah Bumbu Regency Number 525/254/Bun.1/2012 on July 5th, 2012.

2. Decree of Head of Local Environmental Agency of Tanah Bumbu Regency Number 660/44/BLHD/2012 May 2nd, 2012 concerning Revocation on the Decree of Tanah Bumbu Regent Number 380 Year 2010 concerning Environmental Feasiblity of Plantation Activity and Palm Oil Mill owned by PT Ladangrumpun Suburabadi

Based on the above two letters, LSI has an objection to State Administrative Court (PTUN) towardds this decree. It will be an observation by team auditor to the meet of regulation by LSI because LSI ha environmental impact assessment (EIA) document that has been previously approved by The Regent of Tanah Bumbu, South Kalimantan.

There was an effort to adjust rules fulfillment and change by Angsana Mini POM and its suppliers such as the company has paid salary in accordance with the Decree of South Kalimantan Governor Number 188.44/0502/KUM/2012 on October 22nd, 2012 concerning Minimum Wage in South Kalimantan Province in 2013 as much as Rp. 1,365,000,-

LSI has a documented system that provide information and legal requirement that must be fulfilled by the company as stipulated in the SOP of Guideline in Sustainable Plantation Management Number 724/TQEM-SPMS/09 in Chapter 1.2 that clarify about pursuance to Law and Government Regulation. SOP of Legal Requirement by PT. Ladang Rumpun Suburabadi Minamas Plantation Number 701/TQEM-ESH/10 was approved on March 6th, 2012 which clarifies about the identification mechanism of valid and related regulation compliance.

The evaluation mechanism of valid and related legal requirement compliance implementation is stupulated in the SOP of Legal Requirement of PT.L SI Minamas Plantation Number 701/TQEM-ESH/10 by doing: 1. Identification and inventory of legal requirement:

- Routenely contact government institution and non government institution to identify newest regulation valid in international, national, and local

- Actively visit related websites. - Update it every year.

2. Compliance - Summarize the identification result of related regulation and summarize it in the document of K3LL

(Occupational Safety, Health & Environmental Protection) Regulation Summary


ASSESSMENT REPORT


- To inform stakeholder about the valid regulations - To update the summary of regulation related with K3LL (Occupational Safety, Health & Environmental

Protection) every 6 months by company.

To inspect and analyse operational data through internal and external audit.


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

PT LSI has showed land tenure document conversed to palm oil plantation. Land tenure documents are proved by 4 certificates of Land Use Title, such as:

1. Certificate of Land Use Title Number 19, on July 8th, 1999 published by the Land Office of Kotabaru, wide area is 5,909 Ha.

2. Certificate of Land Use Title Number 43, on June 25th, 2004 published by the Land Office of Tanah Bumbu, wide area is 45.50 Ha

3. Certificate of Land Use Title Number 44, on June 25th, 2004 published by the Land Office of Tanah Bumbu, wide area is 112 Ha

4. Certificate of Land Use Title Number 45, on June 25th, 2004 published by the Land Office Tanah Bumbu, wide area is 10.50 Ha.

TOTAL Areal PT. LSI that have Land Use Title is 6,077 Ha

Cooperative Credit Scheme/KKPA: There is a Project Land Owner Name List of KKPA KUD Tuwuh Sari cooperated with PT. Sajang Heulang accordance with its type. This document contains the membership of KUD, name of farmers, date and place of birth, beneficiaries, number of land, block, and wide area.

There is a Pilar Book show the coordinate of boundaries that have been well mapped. Gunung Sari Estate (GSE)-PT. Ladangrumpun Suburabadi (PT. LSI) has censused the navigation of stakes coordinate position of Land Use Title at Gunung Sari Estate in year 2012. Based on the result of this navigation, there were 93 lost stakes consist of 2 big stakes and 91 small stakes. Due to the lost of these boundaries stakes, GSE-PT LSI has composed action plan to make and replace these boundaries stakes. These boundaries stakes will be placed in July - October 2013. Now, boundaries stakes at the field have been removed and well maintained. In addition of boundaries stakes maintenance, GSE-PT. LSI has conducted a demarcation between Land Use Title boundaries and outer boundaries by making road (wide of road is 3 meter). It was in a good condition at the time of audit.

The maintenance of stake boundaries between KKPA estate that share the same borders with main estate of PT. Ladangrumpun Suburabadi and PT. Sajang Heulang are conducted by each main estate managed during the outer boundaries maintenance. The boundaries maintenance of KKPA area that share the same borders with village area is conducted by each KKPA manager in accordance with the block location of each estate.

In 2012-2013, there was no land claim from the outer party to Land Use Title area of GSE-PT. LSI. Pre-existing dispute has been well solved by GSE-PT. LSI and it has been verified during the implementation of Survellance-1 (S1). It has been stated that this problem was finished.

Conflict solving at PT. LSI refered to the procedure of Occupational Land Acquisition Number 343/PSD-OKUP/11 on February 23rd, 2012 published by Minamas Plantation. It describes about a clear and well planned compensation payment implementation.


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.

Based on the interview result with community figure in Purwodadi Village (Mr. Hasan), there was no tenure area at GSE area - PT. LSI. Purwodadi Village and Bayan Sari Village are transmigrated villages. The status of land at GSE-PT LSI has been legalized by The Office of Land Agency at Tanah Bumbu with the Number 000/175/KP.12, on July 15th, 2010 to clarify that there is no tenure land in the area of PT. LSI and GSE. The result of HCV identification at PT. LSI by


ASSESSMENT REPORT


Politto in 2010, there was no HCV 6. This document has been socialized to many stakeholders.


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.

Each estate has company’s work short plan document namely Work Plan in 2013-2014 and those written in the Budget 2013-2014 for Angsana Estate, Gunung Sari Estate, Pantai Bonati Estate, KKPA 4 Estate and Angsana Mini POM.

1. For the management of estate unit, there is approved operational cost plan. The distribution of this work plan is described below:

a. Production forecast in 2013-2016, yield production (ton/ha), administration cost, labor cost, mature upkeep, manuring, harvesting and collection, transportation, etc.

b. For environmental management plan, the company has allocated this cost plan for workers water supply cost, Occupational Health and Safety cost, RSPO, HCV, Environmental Impact Assessment/EIA, etc.

c. For corporate social management, the company has allocated this cost for religious holidays fund, teachers cost, CSR program, and social donation for the community, etc.

2. Angsana Mini POM has operational cost plan that has been approved by Mill Manager, GM Mill, SGM Plantation Operation Region Kalimantan/Sulawesi, Head Plantation Operation, and Upstream Productivity Department. The distribution of this work plan is described as follow:

a. Forecast mill intake (FFB), CPO extraction, kernel extraction, processing cost, admin cost, training cost, environment cost, health cost, transport cost, etc.

b. For environmental management plan, the company has allocated this cost plan for the making, installation, and maintenance of Occupational Health and Safety and non Occupational Health and Safety, board, laboratory analysis service cost for CPO analysis, waste delivery to thrid party, etc.

c. For corporate social management, the company has allocated this cost for donation to third parties such as honor, proposal of celebrarion, socialization cost for Occupational Health and Safety, RSPO, HCV, Social Assurance of Labor, Safety and Health, etc.

The company has implemented SAP program to monitor its financial condition. Based on the observation to company’s documnets, the company has projected several activities such as production, CPO extraction, kernel palm extraction to 2014/2015.

PT SHE – Pantai Bonati Estate needs to consider readjusting the determination of operational wide area and target of production, because there was a conflict between SHE (Pantai Bonati Estate) with mining companies during the implementation of surveillance-2. It was won according to the decision by the court in Tanah Bumbu Regency. (explained at Indicator 2.2.1)

LSI has Long Range Replanting Program that will be started in 2015/2016 at Angsana Estate (298.1 Ha), in 2015/2016 at Gunung Sari Estate (220,65 ha). Replanting program will need seedlings and allocation cost. However, the next 5 years replanting plan has not been conducted by KKPA-4 estate. Every year, replanting review is conducted related with requirements that must be noticed in the determination of replanting area, such as:

a. Age of plant > 25 year b. Production yield (Ton/Ha) < 18 Ton/Ha/Year c. Height of plant > 15.1 meter d. Replanting is systematically conducted (centered), it should not scattered, and it should follow the pattern for BHS

(Block Harvesting System), BMS (Block Manuring System), BSS (Block Spraying System). e. Field with limitations – flood prone, accessibility, inadequate soil conservation practices like terraces, high risk to

accidents, boundary with smallholders and theft prone.



ASSESSMENT REPORT


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

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

Until the implementation of surveillance 2, there was no change in the procedure related with the operational of estate and mill at PT. LSI. The SOP of estate from Land Clearing to harvesting is written in the SOP of AGRICULTURAL REFERENCE MANUAL Number of Policy: 110/EST-ARM/08, approved on December 22nd, 2008 by the CEO, GM, Controller, HPO, SGM. The SOP of mill from the acceptance of FFB, processing to dispatch of CPO & PKO/Palm Kernel Oil for the operational cost at Angsana Palm Oil Mill has been approved on July 26th, 2010 by the Head Plantation Operations (HPO)

The company has a mechanism for checking or monitoring to operational activities, such as:

Audit internal every 6 months conducted by internal auditor of Region Office,

Plantation advisory (2 times a year). The scope of this activity is production achievement, Occupational Health and Safety activity,, best management practices, environment and follow up of the former findings by audit internal (last audit was conducted on April 15th – 17th, 2013)

Mill Advisory (MA). The scope of monitoring in this activity is financial aspect, purchasing and goods inventory, production of CPO/Kernel and delivery, and follow up of the former findings by audit internal (last audit was conducted in November 2012).

RSPO audit is conducted once a year. The scope of this activity is monitoring to company’s compliance to the principle and criteria of RSPO ( on November 13th – 22th, 2012)

Quality monitoring is conducted every month by PSQM (Plantation Suistainable Quality Management).

All operational activities are recorded in Manager Report available at, estate or palm oil mill (POMS). There is also management report every month for the estate. It report about all operational activities at the estate unit. Monthly Report is available for POM and it contains the operational activities at the mill such as: the statistic of production, the capasity and utility of mill, quality of production, financial lost to process FFB (the percentage of palm oil financial lost to processed FFB and palm oil kenerl to processed FFB).


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

To maintain and increase the fertility of soil for optimal yield and sustainable production, there were several efforts that have been conducted by the company, such as:

1. The company has conducted soil analysis, leaves analysis, and visual observation activities at the field. In detail, below is the description a. Soil Analysis

There is a semi-detailed soil analysis recording in 2012 conducted by Minamas Research Center. It itemizes the result of laboratory analysis to the condition and content of soil nutrient of each sample and the recommendation of fertilizer to maintain the balance of nutrient in the soil. There is a semi-detailed soil analysis recording conducted at Gunung Sari Estate and KKPA 4

b. Leaves Analysis The company has also regularly analyzed leaves once a year. Based on the result of leaves analysis, a recommendation of fertilizer doze was published in order to produce optimal palm oil fruit. There is a semi-detailed soil analysis recording conducted at Gunung Sari Estate and KKPA 4

c. Visual Observation

In addition of soil analysis and leaves analysis, MRC also conducted visual observation during sampling activity at the field.

There are several considerations to determine sampling during the implementation of soil analysis, leaves analysis, and


ASSESSMENT REPORT


visual observation. Those are year of planting, type of soil, and type of seedling.

CAR 2012.01 dinyatakan Closed

2. The company has conducted fertilization, empty fruit bunch application, utilization of liquid waste from palm oil mill for land application. It is proved by the recording of fertilization activity, empty fruit bunch application and land application. For example:

Fertilization according to the recommendation of fertilizer application in 2012-2013

Empty fruit bunch application. There is a recording empty fruit bunch application in 2012-2013 to March 2013.

Selective weeding: in the monthly report of manager in crops maintenance in order to keep the humidity of soil

Liquid waste application document. LSI has liquid waste utilization permit according to the Decree of Tanah Bumbu Regent Number426 Year 2007. It describe about the location of application such as Angsana Estate for 205 Ha (block B-21, B-20, B-19, B-18, C-21, C-20, C-19, C-18, C-17, D-21) and Gunung Sari Estate for 76 Ha (Blobk D-20, D-19, D-18, D-17) dan and PT Sajang Heulang block H19, H20 dam H21 (60.96 Ha). There is a recording about liquid waste application from PT LSI as much as 8,303 m3 in January, April 2013 from Angsana mini as much as 5,595 m3.


4.3 Practices minimize and control erosion and degradation of soils.

The organization has map of marginal land. Based on the result of soil analysis at KKPA 4 of PT Sajang Heulang each SPT showed an actual suitability level S3 (Marginal Suitable) The land suitability level at Gunung Sari Estate is N1. However, both of them have a quite big potency to become S1 (Highly Suitable) and S2 (Suitable). . In addition, there is no peat area in the operational area of company.

Land topography at KKPA4 is flat . Meanwhile, based on the semi-detailed map, land topography at Gunung Sari Estate asthere is an area with slope 4-12% as many as 59,58% and slope 12-24% as many as 9%. For this certain slope area, the company has a guidance for land erosion measurement (Number of Policy II-04/MRC-SOP/10) concerningerosion control in accordance with the valid regulation (Government Regulation Number150 Year 2000). This monitoring activity is conducted by measuting the erosion of land by using Erosion Stakes Method installed at several sampling points. It is then measured. The company had monitored this by using several erosion stakes installed at several points and measurement was then conducted in 2012 at block (E24, F23, F22,G22, G21). The result of measurement of erosion staed that land erosion in 2012 was 7.33 mm.

The company has document of Road Maintenance Evaluation which describe about the program and realization of road (all weather roads), construction of non flooded road, and construction of side drain to flow the water to collection drink at the block. Based on the result of field survey, the condition of road was good. There were several heavy vehicles used for road maintenance at Gunung Sari Estate such as 1 unit of compactor, 1 unit of greader, and 1 unit of TLB. Meanwhile, heavy vehicles used for road maintenance at KKPA 4 were 1 unit of compactor, and 1 unit of greader..

First strategies for marginal land and other critical land treatment by the company are written in the Final Document of Semi Detailed Land Survey, such as:

Soil fertility improvement by planting land cover crops such as soft fern (Nephrolephis sp), empty fruit bunch application ; selective weeding; MOP fertilizer application with the doze of 2,5-3 kg/tree/year..

Management of fertilizer: an effort to maintain the balance of nutrient especially N, P, and K and other fertilizers with a balanced doze to the need of crops and nutrient coming out from harvesting activity, shoots, leaching prevention, run off, and volatility.

To decrease leaching and to increase water availability especially plintudults type (easy for surface run off and flooding potency), hapludults type/sandy mud (easy for leaching). There are several efforts such as: to close area around the water to keep water reserve, field drain design at each block with the ratio of 1:8 for water reservoir and flooding prevention; organic material application especially for clay and sandy soil; mulching with empty fruit bunch.


4.4


ASSESSMENT REPORT


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

LSI has composed management strategy plan for High Conservation Value/HCV including river buffer zone management and other water sources managed as HCV 1.4 and HCV 4.2. Based on the field survey at the riparian area Block J-18 KKPA-4 Estate and E-25 at Gunung Sari Estate, there were 660 mahogany trees,several markings at the buffer zone in the form of circular yellow paint in palm tree trunk at the distance of 5 (five) trees from the riverside. KKPA-4 plans to plant bamboo in buffer zone area.

Water management program by LSI was conducted in the second semester of 2012. It was conducted by routine quality analysis of river water from area before mill, after mill, community well (Division II Angsana Estate monitored well water (Block B-21 and B-22 Angsana Estate). It was routenely conducted by accredited institution (BARISTAN, Banjarbaru-South Kalimantan) every 6 months. Based on the result of water quality analysis at several locations showed that the water quality still in its Threshold Value (NAB) in accordance with the valid regulation. The recording of water quality analysis is well available and routinely reported by LSI to the related institution to meet all required regulations. The company also maintain the quality of produced waste from the mill so it still below its valid measuring standard.

The monitoring to BOD of liquid waste produced by Angsana Mini POM is routinely conducted every month to monitor the quality of liquid waste so it still below its valid measuring standard. Based on the observation result, BOD of liquid waste from pool number r8 (effluent) still below its stipulated quality standard. The sample of BOD test in July - October 2012 for liquid waste produced by Palm Oil Mill at Angsana Mini is: July (1,245 mg/l), August(720 mg/l), September (525 mg/l), October (453 mg/l).

Based on the observation result to the document of water utilization in mill (per ton of fresh fruit bunch), Palm Oil Mill at Angsana Mini use water for processing (processing and boiler) and domestic needs in employee housing. Palm Oil Mill at Angsana Mini has recorded the use of water in the document of water use evaluation. It is conducted every day and well recorded. The result of water use evaluation since January – March 2013 the average use was 2.29 M3/ton FFB (process was 1.9 M3/ton FFB and domestic was 0.39 M3/ton FFB). Palm Oil Mill at Angsana has implemented water use saving by reusing washing water from the mill.


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

The company has implemented integrated pest control, such as:

Census program of palm leaves eating caterpillar is conducted every month and other pest (rat, oryctes, and ganoderma) census is conducted every 2 months or six month in a year

Planting plan and beneficial crop maintenance 2012-2013 such as Turnera subulata, Antigonon and Casia tora.

Gupon monitoring program (owl nest) in 2013, every month (there are 20 gupons at Gunung Sari Estate 1 and 33 gupon at KKPA 4)

Integrated pest control program conducted by company has been monitored and its wide area was reported to the company. It is routinely conducted every month. It describes the wide area of PHT, monitoring to the level of pest and disease attack, monitoring to the pest and disease control. Based on the result of study to document and field study in 2012 -2013, there was no pest and disease attack above its economic threshold. Based on the field study at Gunung Sari Estate Block F15 and KKPA 4 Block I59, owl nest was in active condition, shown by the presence bird dropping, dead rats, and bird wings. In 2012-2013, the company has implemented PHT/Integrated Pest Control training program. The last training program was held on September 17th, 2012 at KKPA 4 and April 15th, 2013 at Gunung Sari Estate.

Related to the use of pesticide, the company also has monitored it such as the use of pesticide, the use of active material, active material per Ha and active material per ton of fresh fruit bunch.


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


ASSESSMENT REPORT


documented.

There is a list of pesticide used by the company. It is based on the Book of Pesticide for Agriculture and Forestry in 2011 published by the Directorate of Fertilizer and Pesticide, the Directorate General of Facilities and Infrastructure, the Ministry of Agriculture, Republic of Indonesia in 2011. All pesticides used by the company has been licensed and registered. In addition, the company also has committed to not use herbicide containing Paraquat as its active ingredient. It is based on the memo from the Research Department number MRC/Controller/HPO/698/X/2008, on November 4th, 2008 concerning on November 4th, 2008 concerning the recommendation of active ingredient replacement namely Paraquat - Gramoxone at Minamas Plantation. Based on the monitoring Warehouse Card at Gunung Sari Estate and KKPA 4 can be proved that paraquat was not used anymore.

The use of pesticide by the company at each state has been well recorded. It described the amount of pesticide use, working item (chemist disk, bear market and stacking of sheath), the use of pesticide per hectare, and the number of application.

The company provides MSDS (Material Safety Data Sheet) as the reference for first aid for officer directly contact with chemical material. Most of the MSDS have been provided in Bahasa so it easy to be understood by all level of worker. Based on the result of study to the document and field survey, pesticide used by the company has met its doze, target, and trained operator. Every morning, before the spraying, briefing is always conducted, about the use of APD/Personal Protective Equipment such as spraying, right spraying technique, and food supplements provision such as egg and milk.

The company also has procedure about agrochemical waste and pesticide pack management (SOP of Hazardous and Toxic Waste and non Hazardous and Toxic Waste number RA012/ASF/SOP.ESH/10, April 12th, 2010 for Angsana Factory; and SOP number RSPO/5.3/PLB3&BB3 for Angsana Mini Mill and SHE Estate). This procedure is conducted by using reduce and reuse technique. Reduce technique is conducted by selling to the licensed third party or efficient use. Meanwhile, reuse is a technique to use something for couple times (such as, used water for knapsack washing can be reused for the next dilution of chemical material).

The company has conducted a routine medical checkup for spraying employee. It is conducted every 6 months. There is a routine medical checkup at Gunung Sari Estate on January 23rd, 2013 and KKPA 4 onDecember13th, 2013 by central policlinic doctor. Based on the result of medical checkup, all employees were healthy.

The company has a policy about the Prohibition to Pregnant Worker and Breastfeeding Worker to work as spraying and fertilizing worker. It is based on the memo from Manager of Gunung Sari Estate to this assistant number GSE-gme/131/XI/2009/S, on November 18th, 2009. Based on the result of field survey and interview with workers, there was no pregnant worker and breastfeeding mom.


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

The company showed the document of Occupational Health and Safety policy approved by CEO of Minamas Plantation on July 5th, 2008. It contains the following commitment:

The company is responsible to the implementation of Occupational Health and Safety program at all operation activity in plantation area and mill. To realize this goal, the company has determined a procedure of operation activities at all plantation area and mill. This willing is realized in the compliance of Occupational Health and Safety regulation of workers, continuous and sustainable improvement so it can be used for risk monitoring and management of company’s business.

There is a procedure of Occupational Health and Safety Number: 711/TQEMS-P2K3/07, Minamas Plantation. It was approved onDecember14th, 2007 by the Head Plantation Operation

KKPA (Cooperative Credit Scheme) plantation area has the structure of organization of P2K3 (Occupational Health and Safety Guiding Committee). It identifies the person in charge in Occupational Health and Safety. Program in accordance with the Decree of Head of Manpower Agency of Tanah Bumbu Regency number 560/19/BNWS-WAS/2013 onMarch5th, 2013. Manager of estate was determined as the person in charge for P2K3 program (Occupational Health and Safety Guiding Committee) and the secretary was Agus Gunawan (Expert of Occupational Health and Safety in accordance with the Expertise Certification of Public K3/Occupational Health and Safety number 10.3929/AK3-U/DJPPK-P2K/III/2010). Meeting of P2K3 (Occupational Health and Safety Guiding Committee) has not been conducted


ASSESSMENT REPORT


yet because the meeting was planned to be conducted in April 2013 (1 month after its formation). It is in accordance with the Decree of Manpower Minister number 155 year 1984 section 16 and Report of P2K3 (Occupational Health and Safety Guiding Committee) submitted on June 2013 (3 months after its formation)..

In addition of formal information, training, and meeting, communication media for Occupational Health and Safety can be given in the form of poster, signs, slogans, newsletter, backup management system, and campaign. There is a team for emergency situation and fire officers as well as First Aid Emergency Officer.

There was a meeting of P2K3 (Occupational Health and Safety Guiding Committee) at TC Room on April 6th, 2013 attended by 39 participants. It discussed about the evaluation of meeting onJanuary9th, 2013 and the implementation of separated harvesting equipment and workers.

There is a minutes of meetion on Occupational Health and Safety for GSE, conducted once in three months, such as minutes of meeting on January 3rd, 2013, and April 8th, 2013.

There is paramedic at KKPA 4 Clinic and Central Clinic. Paramedic had resigned on March 5th, 2013 and a letter of paramedic application is available. Currently, health service is transferred to Health Center in Sebamban Village 2; KKPA 2. The name of paramedic is Hendrik Kusworo) and Center of Clinic.

The company has included the employee in Social Assurance of Labor. Total workers at SKU H is 242 people and SKU B is 36 people. For, KKPA 4 and GSE, total workers participated in Jamsostek program/Social Assurance of Labor is 351 people SKU-H and 65 people SKU-B. All the evidence documents of participation in employment insurance are available at each estate.

PT SHE has conducted routine medical checkup for plantation workers who work at high risk stations such as generator, workshop, and warehouse. It can be seen from the result of routine medical checkup at KKPA-4 (checkup was conducted on February 6th, 2013) and the recording of routine medical checkup at GSE every 6 months (the latest medical checkup was conducted on March 22nd, 2013 by dr. David Terny Tumbel, No Reg. SKP : 141/PPK-PNK3/KK/X/2010). Medical checkup at Angsana Factory was conducted by company’s doctor (dr. David Terny Tumbel) on January 19th, 2012 and June 7th – 9th, 2012. ased on the newest schedule in 2013, routine medical checkup will be conducted every 6 months. However, it has not been conducted yet as scheduled (first phase of medical checkup in 2013), the company can realize first phase medical checkup program in 2013 (Jan-Jun) and adjust the second phase medical checkup program in accordance with its 6 month period.

The company already has HIRAC document at Estate including the analysis of hazards potential source, impact/risk, level of danger, and recommendation for each work actiivty at the coverage and operational of company.

There is also training document for Occupational Health and Safety program such as certificate/SIO operator as follow:

Recommendation of welder Class III

Training for Lift and Transport and has operator permit

Certificate of Health Technique Development and Working Safety of Aircraft Power and Production

All recordings and training documents of Occupational Health and Safety program are available at each estate.

The company has SOP of emergency responses, such as:

o Procedure of Emergency Response, ASF/SOP.ESH/14, on April 8th, 2010 o Fire countermeasure No. 727/TQEM-ESH/10 on April 1st, 2010, o Identification and evaluation of emergency potential 724/TQEM-ESH/10 on April 1st, 2010, o Earthquake 746/TQEM-ESH/10 on April 1st, 2010, o Evacuation 726/TQEM-ESH/10 on April 1st, 2010, o Explosion countermeasure 728/TQEM-ESH/10 on April 1st, 2010, o Emergency training 733/TQEM-ESH/10 on April 1st, 2010,

Preparedness and response as well as emergency recovery number 725/TQEM-ESH/10 on April 1st, 2010.

As a part of emergency response, every guest who will conduct an activity at the mill area will receive safety briefing by staff of Palm Oil Mill. Every morning, before employee start to work, socialization and checking on the use of Personal Protective Equipment of Palm Oil Mill’ staffs at Angsana are conducted. Response plan is also explained at the opening meeting.


ASSESSMENT REPORT


The company provide emergency response equipments, such as:

11 units of APAR (Fire Extinguisher), 3 boxes of first aid kits, 1 unit of water tank, 1 unit of water pump, 50 meter of fire hose, 50 meter of small hose, 5 hoes, 2 machetes, and 5 helmets for KKPA 4 and first aid kits boxes at GSE as many as 9 boxes at each station and high risk building (based on the risk analysis), such as warehouse and workshop/traction.

Workers have been trained for first aid kits such as first aid kits simulation on March 30th, 2012 at Angsana Estate Sport Hall. It was conducted by company’s doctor and attended by 75 workers (foremen, teacher, workers, and staffs) from Gunung Sari Estate, Angsana Estate and Angsana Mini POM. This training described the basic skills for first aid kits handling, simulation of first aid kits (burns, animal bites, unconscious, drowning victim, injuries caused by sharp weapon, fracture) and discussion.

Minutes of meeting and list of attendance during first aid kit straining are available. The training was directed by dr. David Terny Tumbel on November 30th, 2012 at Estate Sport Hall of KKPA 3. It was attended by 37 workers of mill and KKPA/Cooperative Credit Scheme (Estate Manager, foremen, spraying workers, driver, fertilizing foremen, and spraying foremen).

There is monthly report about accident at each unit in the form of “working accident monitoring at the plantation area/Palm Oil Mill” in KKPA 1. It contains the summary of accident in a month. There is also report of accident at work submitted every one semester. The last report for Jul-Dec 2012 period “Evaluation of Accident at Work in Gunung Sari Estate”, Number of Document is GSE-div/007/I/2013 was submitted on January 7th, 2013. The company investigated each accident.


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

The organization has training program for the staff in the form of Plantation Management Committee Indonesia (Report On Human) Report on April 24th, 2012, such as Minamas Learning Design for 2012-2013, It contains Mandatory Training (Related to Employee Level : Core Executive Program) for Supervisor/Assistant of Supervisor (G/H Level), Assistant of Manager/Senior Assistant (F level), Manager and Senior Manager (D/E Level), General Manager (C level up).

The organization also has identification matrix of training and training plan for non-staff in 2013. It will consist of maintenance, spraying, fertilizing, harvesting, sortation of fresh fruit bunch, fire extinguisher, pollution prevention, public Occupational Health and Safety, chemical material Occupational Health and Safety-first aid kits, Occupational Health and Safety for electricity, RSPO, management of Occupational Health and Safety.

Based on the interview result with becho loader operator at division 2 GSE (on behalf of Asmari), he has not SIO certificate as the proof of his competence and there is no training program yet to get SIO.

There is noncompliance CAR.2013.01 with Major category

LSI, GSE has made training program for heavy equipment operator (lift and transport) in September 2013. It will be used as observation material for auditor team to the compliance of this training plan (indicator 4.8.2). CAR.2013.01 closed with observation.

There is a training record that has been conducted by LSI for staff and employee, such as:

1. Supervisory Management training on May 10th 2011 for 16 hours at the Meeting Room of the Representative Office of Banjarbaru.

2. Training & Key in Business Planning Consolidation for 40 hours on June 9th, 2012.

The recording of KKPA 4 staffs training, such as:

1. Training of fire simmulation on March 9th, 2012 attended by 21 participants (foremen, foremen I, office clerk and workers)

2. Training of harvesting on April 16th, 2013 attended by 14 participants (foremen, foremen I, office clerk and workers). 3. Training of fertilization on April 11th, 2013 attended by 28 participants (foremen, foremen I, office clerk and workers). 4. Training of Integrated Pest Control on September 17th, 2012 attended by 13 participants (foremen, foremen I, office

clerk and workers)


ASSESSMENT REPORT


The recording of GSE staffs training, such as:

1. Training of harvesting at Division III GSE on August 11th, 2012 attended by 17 participants (foremen, foremen I, office clerk and workers)

2. Training of fertilization at the Office of GSE on November 12th, 2012 attended by 15 participants (foremen, foremen I, office clerk and workers)

3. Training of spraying on January 3rd, 2013 attended by 14 participants (foremen, foremen I, office clerk and workers).

Based on the field interview with spraying workers, fertilizing workers, and harvesting workers, they clarify that every activity has been completed with right technique learning such as right spraying technique, fertilizing technique, and harvesting technique. The company also stated that every morning assembly, safety briefing is conducted to deliver right working technique.

There is a proof that the company use trained contractor such as a requirement to implement Occupational Health and Safety and show the license of contractor’s workers, such as: there is a Letter of Agreement. The number of Letter of Agreement is GSE/SPK-LKL/X/2011/023 concerning an agreement to palm fruit transportation (fresh fruit bunch) from PT LSI-Gunung SARI to Angsana Mini POM Factory with Istikah/contractor, in Sebamban II, Mekar Jaya Village, Angsana, Tanah Bumbu, section 7concerning Working Safety sub section 2, each contractor must have and install safety net, and sub section 3, the contractor must comply the valid regulation of K3/Occupational Health and Safety in the company such as: a. All operators must turn the vehicle’s lights at the plantation area during the day, b. all operators should wear APD/Personal Protective Equipment (helmet and safety shoes) c. all operators should have valid Driving License (drivers).


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.

PT LSI has composed EIA for PT. Ladangrumpun Suburabadi’s estate and palm oil mill in Angsana Sub District, Tanah Bumbu Regency South Kalimantan 2010. It has been approved by the Comission of Assessor and Technical Team for EIA/UKL-UPL Tanah Bumbu Regency Number 32, Duk 660/32/Bapedalda/10, on June 2nd, 2010 and Decree of Tanah Bumbu Regency Number 390 Year 2010, was published on July 20th, 2010, concerning Environmental Feasibility of PT. Ladangrumpun Suburabadi’s Estate and Palm Oil Mill Activities at Angsana Sub District Tanah Bumbu Regency South Kalimantan Province. During the clarification with the Commission of EIA at Local Environmental Agency of Tanah Bumbu Regency (Mr. Rahmad) and Head of Plantation Department, Forestry and Plantation Agency of Tanah Bumbu Regency, the Decree of Tanah Bumbu Regent number 390 Year 2010 on July 20th 2010 has been revoked by the Head of Local Environmental Agency of Tanah Bumbu Regency number 660/44/BLHD/2012 on May 2nd, 2012 and followed by the Letter from Forestry and Plantation Agency Number 525/254/Bun.1/2012 on July 5th. Cased on the clarification, the management of PT. LSI justify this revocation (Noncompliance please see NC CAR 2013.02).

May 25th, 2013.

LSI has showed testimonial letter from the Environmental Ministry of the Republic of Indonesia Number B-5459/Dep.I/LH/PDAL/05/2013 on May 10th, 2013 concerning the Clarification of Environmental Document of PT Ladangrumpun Suburabadi. It clarifies that environmental document owned by PT LSI (UKL-UPL) Number 191/II/DAR-3/1999 is still valid. However, improvement is needed for environmental document compliance in accordance with the regulation (DELH) because the capasity of LSI’s PMO to 60 ton/hour has been conducted.

New environmental document improvement process and and compliance will become observation materail by auditor team at the next visit. Status. CAR.2013.02 is closed with observation

Eventhough, EIA permit has been revoked, PT LSI still delivers the Impplementation Report of RKL and RPL of PT LSI, First Semester Period of January – June 2012. It was accepted by Hj. Laila (staff of Environmental Agency of Tanah Bumbu Regency) on August 13th, 2012. The second semester report for the period of July – December 2012 was accepted by Zain Arrasyip (staff of Environmental Agency of Tanah Bumbu Regency) on February 11th, 2013. There is an evidence of RKL/RPL implementation report for First Semester and Second Semester to staff of Environmental


ASSESSMENT REPORT


Agency of Tanah Bumbu Regency.

Until today, there was no change in operational area or company’s activities.


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.

There is a recording of HCVA identification result of PT LSI conducted by POLITTO, in January 2010.

The identification result in this final report showed that there was no protected, rare, uncommon, and endangered species. Identified HCV in this area is HCV 1.1. Area that support the function of diversity for protected area or conservation (riparian) and HCV 4.1 Area or ecosystem that importas as water spring and flood control for downstream community (riparian). .

To protect identified HCV such as HCV 1.1 and HCV 4.1, GSE-PT LSI has made boundaries marker, announcement board, permanent plot maker for vegetation and wildlife, planting of trees that able to capture water and animal nest, erosion observation plot making, palm mudrib collecting in slope area.

Based on the field survey, it can be seen that the company has implemented those above activities, such as:

- Sign board installation that provide the information of importat biodiversity area (1.1), area that provide natural environmental services (4.1), prohibition for hunting and fish poisoning, prohibition for wildlife hunting such as protected animals.

- To make vegetation and wildlife plot. It has been routinely monitored. - To plant tree along the riparian area for +/-50 m widht by using vertifer tree, mahogany, bamboo, or jackfruit

tree. - To make erosion observation plot.

PT LSI has conducted several actions to protect protecte animal and HCV, such as: bourdaries marker making, sign board installation, permanent plot making for vegetation and wildlife, planting of trees that able to capture water and animal nest, erosion observation plot making, palm mudrib collecting in slope area, Sign board installation that provide the information about prohibition for hunting, buffer zone marking, poisoning prohibition, and fish shocking. At these locations, there was also a clear management boundary area such as HCV area in the form of circular yellow paint in palm tree trunk along the boudaries area..

PT. LSI has made sign board in the tributary of Sebamban River as HCV 1.1. and HCV 4.1 area for 2 HCV sign boards, 2 sign board of protected animal pictures, and 2 signboards of fish poisoning prohibition.

Socialization to the employee about the presence of HCV has been conducted on June 30th, 2010; June 11th, 2010; and September 30th, 2010. However, there was no enough evidence that this socialization was effective. It can be proog by the result of interview with workers. There were several workers who did not know about the presence of signboards. PT LSI has not determined yet the action plan to the result of this ineffective socialization, (Noncompliance NC CAR 2013.03).

LSI has showed the evidence of resocialization about the understanding of HCV and protected animals to 17 spraying workers at Division III Gunung Sari Estate on May 16th, 2013 in the form of document and pictures.

It can be used as the observation material in the understanding of HCV and protected animal at the next surveillance.

CAR.2013.03 closed with observation

Management of PT. Ladangrumpun Subur Abadi has determined HCV offcer at each estate, such as:

1. SK Number ASE/Int/12/III/053, on March 28th, 2011 for Mr. Samsu. 2. SK Number GSE-Int/264/IV/2010, April 19th, 2010 for Mr. Agus Hariadi

Training plan for HCV officer need to be composed in order to improve their knowledge on HCV management.



ASSESSMENT REPORT


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

There is a document of waste identification at PKS and estate. It informs about the name of waste, type/phase of waste, classification (Hazardous and Toxic Waste & Non Hazardous and Toxic Waste), frequency, unit, number/month management (reuse/recycle/disposal), disposal site, purpose, and note of management.

During the implementation of document audit, management plans have been written in several documents, such as:

a. Identification of Waste Sources and Management b. SOP of Hazardous and Toxic Waste and non Hazardous and Toxic Waste management Number RA012/ASF/

SOP.ESH/10, April 1st, 2010 for Angsana Factory. It regulates about waste management.

The implementation of this waste management is based on the field observation, as follow:

a. Application of empty fruit bunch solid waste at the plantation area b. The use of shells solid waste for boiler fuel c. Waste from household can be managed by using landfill method

There is TPA /Final Disposal Site at each estate used to process domestic waste by using landfill method. The transportation of waste from each housing area to TPA/Final Disposal Site is conducted two times a week in accordance with the recording of regular waste transportation at each estate, for example at GSE Block H18 and KKPA 1 Block J10.

d. Liquid waste is used for land application.

e. Hazardous and Toxic Waste

MedicalHazardous and Toxic Waste was delivered to RS. Ulin Banjarmasin number of agreement is MGG/Limbah.M/VII/2010 and 660/3147/Kum-Inf/RSUDU between PT. Minamas Gemilang Group (LSI,SHE,BSS,SWA,LM,PPS,LMM,ITT,KLR,TGS) and public hospital i Ulin Banjarmasin.

The company has temporarty licensed disposal site and Hazardous and Toxic Waste

Used oil, filter, batteries, Kep Nalco were delivered to licensed third party.

In accordance with the manifest document and minutes of meeting of delivery, of Hazardous and Toxic Waste

Based on the result of monitoring document to Hazardous and Toxic Waste, balance of B3/Hazardous and Toxic Waste, and field observation, that::

The company has not managing Hazardous and Toxic Waste (contaminated cloth) yet in accordance with tvalid SOP. To S2, contaminated cloth was disposed at Final Land Fill.

Based on the result of monitoring document to Hazardous and Toxic Waste, balance of B3/Hazardous and Toxic Waste, and field observation, that the company has not managing Hazardous and Toxic Waste (pesticide used packaging). It still at the Temporare Disposal Site Hazardous and Toxic Waste for more than 90 days.

Hazardous and Toxic Wastes (Used oil, filter, batteries, used pesticide packaging) at AMF are still kept at Temporare Disposal Site Hazardous and Toxic Waste for more than 90 days.. Noncompliance NC CAR 2013.04

LSI (Gunung Sari Estate) has evaluated and identified the source of waste and its management by determining contaminated cloth as Hazardous and Toxic Waste that must be managed in accordance with the regulation and it should not be disposed to landfill. It is supported by confidential letter from the management of Gunung Sari Estate on May 2nd, 2013 concerning the Management of Hazardous and Toxic Waste (contaminated cloth) following the requirement.

June 2nd, 2013

LSI has showed the socialization evidence of contaminated cloth collecting to Hazardous and Toxic Waste. Socialization was conducted to the employee on May 29th, 2013 at Gunung Sari Estate. The improvement evidence given to auditor team was in the form of socialization list and pictures.

This point will become observation material for auditor team in the next surveillance.

CAR.2013.04 Closed with observation


ASSESSMENT REPORT


The recording of monitoring/analysis, such as:

a. Logbook Hazardous and Toxic Waste at Warehouse Hazardous and Toxic Waste:

Mustika PMO for Hazardous and Toxic Waste at KKPA. Log book is used to record the incoming and outgoing Hazardous and Toxic Waste to the warehouse in accordance with its type. Based on the valid regulation, the balance of Hazardous and Toxic Waste should show total mutation of Hazardous and Toxic Waste every month. It should be in accordance with the determined format.

GSE. There is a recording of Hazardous and Toxic Waste monitoring used to record incoming and outgoing Hazardous and Toxic Waste to the warehouse in accordance with its type. Based on the valid regulation, the balance of Hazardous and Toxic Waste should show total mutation of Hazardous and Toxic Waste every month. It should be in accordance with the determined format

b. Production recording and solid waste reuse in the form of empty fruit bunch. Empty fruit bunch has been applied and its number has also been monitored. The recording of empty fruit bunch application is written in daily report and monthly report of each plantation unit.

c. Solid waste such as shells and fibers has been effectively used. The recording of monitoring has been written in the document of Renewable Energy Usage for Financial Year 2012/2013.

d. The monitoring of liquid waste is written in the daily report of Palm Oil Mill production.


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

The monitoring record on the use of energy is described in the document of Fiber and Shell Use Data for Boiler Fuel in March 2013 There were 1,494 ton of fiber and 1,608 ton of shells were used for fuel. It produced 574.28 energy and 4,175.69 of CPO. Based on the monitoring in April 2013, the use of renewable energy was 13.75 kwh/ton CPO.

Angsana Mini POM showed the use of fossil fuel (diesel) since April 2012 – March 2013 in evaluation document of diesel usage and analysis of fossil usage efficiency (diesel). In January 2013, the use of diesel was 1,92 liter/ton fresh fruit bunches, in February was 1,97 liter/ton fresh fruit bunches and in March was 1,77 liter/ton fresh fruit bunches. LSI has used renewable fuel such fiber and shell to substitute the use of fuel in fresh fruit bunches processing so the efficiency of fossil fuel (diesel) can be maximum


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.

The company has zero burning policy (land clearing with no burning) which stipulated in the Procedure of Land Preparation, the third part of SOP number of Policy 110/EST-ARM/08. It is strengthen by the determination of SOP for Sustainable Plantation Management Guideline number of policy: 724/TQEM-SPMS/09, point 5.7.2 concerning Zero Burning Technique, page 24 of 31.

The company has monitoring report of burning for Gunung Sari Estate and KKPA 4 in March 2013 related with the burning report in and outside area of plantation. In March 2013, there was no fire.

SOP of Fire Prevention and SOP of Fire Fighting in 2010. SOP of Land Fire Fighting, number of document is 727/TQEM-ESH/10 on April 1st, 2010. It contains: reference, definition, general information, person in charge, procedure, certain condition, facilities and administration, appendix.

SOP of Land Fire Response Plan: Number 724/TQEM-ESH/10 is uspported by the recording of emergency response, such a s:

Evacuation path and assembly point during the emergency situation such as main office and Housing area of Division 2 GSE and Junior High School of Gunung Sari Estate are available.

Evacuation path and assembly point during the emergency situation such as Mess KKPA 4 are available.

The identification of fire danger potential location and water sources location are available

There is a document of minutes of meeting of Land Fire Extinguisher Simulation by PT LSI and SHE (smallholders/KKPA) on March 2nd, 2012 at 14.40 p.m. A simulation of land fire extinguisher at Angsana Estate has been


ASSESSMENT REPORT


conducted. The document of training and simmulation are available at LSI and SHE.

Based on the survey, the condition of equipments was good.

Based on the interview result with the head of firemen that firemen understand about the action that must be conducted in case of land fire.

There is a team of firemen at KKPA 4 led by Mr. Supriyanto. It was legalized on March 2nd. There is also a team of firemen at GSE consist of 3 groups led by Mr. Supariyanto and coordinator is Mr. Ginandar Putra Bima.


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

There is a document of pollution and emmision source identification at Angsana Mini POM that describe about its such as Boiler, generator, motor vehicle exhaust, Wastewater Treatment Plant that produce methane gas

PT LSI has owned an evidence of work environment noise intensity, Ambient Air Quality Test, Emission Test, Air Quality At Work Environment. Emission quality and noise intensity test was conducted by Occupational Health and Safety Agency of South Kalimantan Province in December 2012 while water and waste water test was conducted by the laboratory of commodity and environment test, Research and Industrial Standardization Agency, Agency for the Assessment of Climate Policy and Industrial Quality of South Kalimantan. The test is conducted every 6 months. The last test was conducted on September 7th, 2012. Emmission gas test to all vehicles have been conducted on May 25th, 2012 by Transportation Agency of Banjar Regency.

Efforts and plan to reduce pollution and emission are listed below:

1. Monitoring and testing every 6 months.. 2. Evaluation to the improvement of sources in case of exceeding parameter above its required measuring

standard.. 3. The use of earplug for workers at high level noise. For example, worker who work at Turbin-Genset with 97.4

dBA noise intensity (noise level standard is 85 dBA) must wear earplug.

Identification of POME comes from palm oil processing at Angsana Mini POM-PT LSI. To ensure that the effectivity of Wastewater Treatment Plant, waste water testing is conducted every month. There are several tested parameters such as Ph, BOD, COD, oil and grease, cadmium, copper, lead, and zinc.

Liquid waste management was conducted by using POME as land application at Gunung Sari Estate. Based on the recording, PT. LSI already has liquid waste utilization permit according to the Decree of Tanah Bumbu Regent Number426 Year 2007. Based on the data in January 2013, there was 8,303 m3 debit of POME flowed to the estate applied at Block D17-20 as many as 76 ha.


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.

There are two documents describing about the social impact of plantation activities by PT. Ladangrumpun Suburabadi:

1. Environmental Impact Statement (EIS) document in 2010 (page V .30 – 41). Appendices of Environmental Impact Statement (EIS) document is:

Minutes of Meeting of Socialization/Public Consultation of Estate and Palm Oil Mill by PT. Ladangrumpun Suburabadi di Banjarsari Village, Bayansari Village and Purwodadi Village, Angsana Sub District, South Kalimantan Province.

Minutes of Meeting of Socialization/Public Consultation of Estate and Palm Oil Mill by PT. Ladangrumpun Suburabadi di Banjarsari Village, Bayansari Village and Purwodadi Village, Angsana Sub District, South


ASSESSMENT REPORT


Kalimantan 2. Document of Social Impact Study to Palm Estate Management PT. Ladangrumpun Suburabadi by Pollito in 2010.

There is an appendix and it lists the name of stakeholder consultation in the compilation of Social Impact Study in 2010.

There is also a management and monitoring plan to social impact study that has been composed by GSE-PT. LSI inn RKL RPL document by PT. LSI. It is reported every 6 months to Environmental Agency of Tanah Bumbu Regency.

There is EIA document in 2010 for the estate and mill of LSI. It replaced UKL/UPL document in 1999 and covered 6,077 ha of estate and POM with the capsity of 60 ton/hour. This EIA document has been approved by the Commission EIA/UKL/UPL of Tanah Bumbu Regency Number 60/32/Bapedalda/10 on July 26th, 2010. It is also approved by the Assessment Commission and Technical Team of EIA/UKL-UPL Tanah Bumbu Regency Number 32, Duk 660/32/Bapedalda/10, on June 2nd, 2010 and Decree of Tanah Bumbu Regent Number 390 Year 2010 was published on July 20th 2010 concerning Environmental Feasibility of Plantation and Palm Oil Mill Activity by PT. Ladangrumpun Suburabadi at Angsana Sub District, Tanah Bumbu Regency, South Kalimantan Province. Howeverm this Decree by Tanah Bumbu Regent Number 390 Year 2010 on July 20th, 2010 has been revoked by Head of Local Environmental Agency of Tanah Bumbu Regency number 660/44/BLHD/2012 on May 2nd, 2012 and followed by the letter from Forestry and Plantation Agency Number 525/254/Bun.1/2012 on July 5th.

Parameter of social impact has been written in RKL/RPL document. This RKL/RPL document is reported to Environmental Agency of Tanah Bumbu Regency every 6 months. First Semester Period of January – June 2012 has been submittedon August 13th, 2012. The second semester report for the period of July – December 2012 has also been submitted on February 11th, 2013. These reports have been accepted by Environmental Agency of Tanah Bumbu Regency

There is 16,000 ha smallholders of Cooperative Credit Scheme (managed by KUD Tuwuh Sari). It involves 10.892 people from 36 villages consist of KKPA 1 (3,864 ha), KKPA 2 (3,792 ha), KKPA 3 (3,012 ha), KKPA 4 (2,676 ha), and KKPA 5 (2656 ha).

In accordance with the result of social impact study by POLLITO, there is an influence to the economy of local community (scheme smallholders) by the presence of company. The benefit of KKPA can be felt by the members Cooperative Credit Scheme) who are already in normal harvesting period such as Angsana Village, Karang Indah Village, Bakarangan Village, and Karangmulya Village.


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.

There is a new procedure for the communication and consultation with the community, SOP of Communication and Consultation with the Community, Number of Policy: 704/TQEM-ESH/10. It valid since April 3rd, 2012 and valid for Cooperative Credit Schem.)

There is also a procedure on communication and consultation with the community (No. KKM) on April 2nd, 2009 completed with flowchart. The SOP Communication and Consultation with the Community valid for Inti (GSE). The socialization of Procedure Communication and Consultation has been conducted such as socialization in, Waringin Tunggal Village on March 14th, 2013. It was attended by 25 participants. The communication and consultation with the community was recorded in Incoming Mail and Outgoing Mail.

There is a list of stakeholder of PT. Ladangrumpun Suburabadi in 2013 which informs about the stakeholders of PT LSI, such as:

1. Related department at the national level : 8. 2. Head of Level I and Related Institution : 13 3. Head of Level II and Related Institution : 12 4. NGO, Cooperation, University, and other company : 9 5. Head of Sub District & Vacational School : 13 6. Community Figures : 6

The company has list of internal-external complaint recording to record all aspirations. This document cover several


ASSESSMENT REPORT


information such as: date of acceptance, name of applicant, type of information/aspiration, person in charge, date of response, type of action, and status of completion.

Based on the SOP of Communication/Consultation with the Comunity, Procedure of Information Acceptance Document, since February 21st, 2012, manager of unit is responsible in the communication and consultation with community


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

PT LSI has communication procedure Number PKM. This communication prosedure explains about the mechanism of complaint management. The procedure can be evaluated to manage the mechanism of unwritten complaints management.

Based on the record of incoming mail to PT LSI-GSE, there was no complaint to the management of Gunung Sari Estate, both internal complaint and external complaint.

Based on the interview result with the worker on May 2nd, 2013 at harvesting area, weeds control and fertilization area, the worker feel pleasant with current conditions such as housing facilities, salary, health, and social security. In this interview, the worker ever delivered unwritten complaint to the assistant related with poor bath room quality at the housing area of BSS. This complaint was responded by the assistant by clearing the water (purification) in bathroom by using chlorine and alum.

There is a procedure of occupational land acquisition number 343/PSD-OKUP/11 on February 23rd, 2012. In this procedure, the phase of payment implementation to removed land is explained.


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.

There is an occupational land acquisition Number 343/PSD-OKUP/11 on February 23rd, 2012. In this procedure, there are severa phase, such as: 1). Before the payment of land clearing, Minutes of Negotiation Meeting should be made, 2). Compensation payment process should be witnessed/known by several parties such as head of sub district, head of village, etc), 3) compensation payment of land clearing should be conducted after the signature of several documents (Minutes of Meeting of Joint Agreement, Waiver Letter of Land Rights, Statement Letter, Receipt of Financial Lost Compensation, Recapitulation of Compensation, Map of Compensation). These documents should be signed by the holder of land rights (the receiver of land compensation payment), representative of company, head of sub district/PPAT, and head of village and/or local RT (the lowest governance level)..

During the implementation of audit process, there was no land claim to GSE-PT. LSI in the last two years and/or in the process of claim. .


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.

The company has committed to pay the salary in accordance with the valid regulation (Decree of South Kalimantan Governor number 188.44/0502/KUM/2012 onOctober22nd, 2012. The minimum wage for palm estate sector is Rp. 1,365,000. This commitment is realized in the form of monthly employee’s salary structure in 2013. The determined lowest wage is Rp. 1,392,505

Based on the study to the list of salary in March 2013, wage payment by the company has been following related regulation.

There is a Collective Labor Agreement for the period of 2012-2014. It has been approved by the Labor and Transmigration Minister number B.98/PHIJSK-PKKAD/PP&PKB/VI/2012 on June 6th, 2012 and Company Regulation in 2012-2014 approved by Labor and Transmigration Agency of Tanah Bumbu Regency Number 560/483/PP/Naker/2012


ASSESSMENT REPORT


on July10th, 2012 - 2014.

The company has several facilities such as praying house, drilling well for employee’s housing, housing for each family, sport hall, playing ground, school bus and scholl building. ,

There is also a Letter of Agreement. The number of Letter of Agreement is 109/KKPA-4/SPK-LKL/IV/13 between KKPA-4 and Mustika Warni (contractor) for fresh fruit bunch transportation. The safety provisions are written in section 14. Each contractor should have and install safety net and sub section 3, the contractor should comply the regulation of K3/Occupational Health and Safety valid in the company, such as: a. All operators must turn the vehicle’s lights at the plantation area during the day, b. operators should wear Personal Protective Equipment (helmet and safety shoes), c. All operators should have valid driver license and politely behave.


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 management of KKPA PT. SHE has the Guidance of Sustainable Plantation Management (Number of Policy 724/TQEM-SPMS/09). At point 5, there is a social policy related with the freedom to form a worker union. There is also a document of Collective Labor Agreement (PKB) for period of 2012-2014 section 8 subsections 1. It states that the employer admitted that worker union is a legal organization that can represent and act for the name of all the member of union. There is a summary of Minamas Collective Labor Agreement Extension Agreement in 2012-2014 held at Novotel Hotel, Surabaya on February 22nd, 2012. It was attended by 2 employers, 7 witnesses, 2 representatives of workers and 7 witnesses. It was also completed with the minutes of meeting and the result of discussion.

The management of Cooperative Credit Scheme of PT. SHE also showed:

1. Document of Collective Working Agreement for the period of 2012 – 2014 by Business Group of PT. Anugerah Sumber Makmur and PT. Minamas Gemilang with Minamas Plantation Workers & Non Workers Federation Union of PT. Anugerah Sumber Makmur & PT. Minamas Gemilang. (It has been approved by the Ministry of Labor and Transmigration, Directorate General of Industrial Relationship Development and Labor Social Security on June 19th, 2012 with the number Kep.98/PHIJSK-PKKAD/VI/2012 on behalf of: Directorate General: R. Irianto Simbolon, SE. MM).

2. Document of By Law Unions of Workers at Cooperative Credit Scheme &Palm Oil Mill at Mustika PT. Sajang Heulang (It was approved by the Chairman of Trade Union of Workers at Cooperative Credit Scheme &Palm Oil Mill at Mustika, PT. Sajang Heulang onJanuary7th, 2013).

3. Document of by Law Unions of Workers at Cooperative Credit Scheme &Palm Oil Mill at Mustika PT. Sajang Heulang, completed with the figure of meeting in order to establish the union and list of attendance. It was attended by 9 participants from Cooperative Credit Scheme 1- 5 (Signed by 5 Chairmen of the Unions of Workers at KKPA 1 - KKPA 5 on January 7th, 2013).

4. Certificate Document on Behalf of Achmad Raihani/Trustees 1/Head of Labor Development and Monitoring, the Social, Labor, and Transmigration Agency, Tanah Bumbu Regency on March 13th, 2013 state that Cooperative Credit Scheme PT. SHE has registered the workers union at the Social, Labor, and Transmigration Agency, Tanah Bumbu Regency.

There is a minutes of meeting during the establishment of workers union of Cooperative Credit Scheme PT. SHE. It was conducted on February 15th, 2013 and attended by the representative of each Cooperative Credit Scheme


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.

The organization has a document about Sustainable Plantation Management Guideline (Number of Policy is 724/TQEM-SPMS/09). It regulates social policy. At point 6, Plantation Upstream Indonesia does not use under age workers (kids).

It is also stated in the Collective Working Agreement for the period of 2012-2014 in the section 16 Workers Recruitment, sub section 1.1.2.2 general requirement that must be conducted during recruitment of worker candidate is the minimum


ASSESSMENT REPORT


age of 18 years old at the recruitment process.

There was no worker below 18 years old. It can be seen from the document of Worker at KKPA 4 in 2013. For example, Yatin Rinto Rifa’i was born on June 10th, 1994. It also can be seen from the employee data at GSE 2013 the youngest worker was Bernadus. He was born on August 15th, 1994.


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.

The company does not condone any act of discrimination during the implementation of its operational activity. It is stipulated in the Sustainable Plantation Management Number of Policy 724/TQEM-SPMS/09, on 08/27/2010 page 13 of 31, point 1 states that all staff/worker should be fairly treated in recruitment, progression, condition, and work overview irrespective of race, degree, race, gender, color of skin, imperfection/disability, orientation of sex, membership of organization, political view, religion, and age. Memorandum was also available for the promotion of staff on June 10th, 2011 from the Head Plantation Upstream Indonesia, number 333k-HRM-VI-11, PROMOTION OF STAFF AND NON STAFF: It contains 1. Background, 2. Terms of promotion, 3. Process, 4. Appendix about the sample of form for Promotion of Staff and Non Staff and Summary of Proposed Prospective Trainee.

There is an Analysis and Proposal of Level Promotion for Staff, Monthly Worker an SKU in 2011-2012. It contains the position of level this year, proposal of level promotion from the estate manager to GM Estate, and proposal from SGM Plantation Operation. Kalimantan – Sulawesi. Proposal.

Based on the study “employee data of KKPA 4 2013” document, it can be seen that employees recruitment did not have any discrimination. It can be seen from the employee data of KKPA 4 and GSE in 2013. Recruited employee comes from various ethnic groups.


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.

PT LSI has determined the policy for sexual harassment prevention and reproduction rights protection in Sustainable Plantation Management page 13 of 31, Social Policy point 4 states: to develop and implement the policy in protecting female worker from any sexual harassment and crime and protecting rights related with female reproduction. The management of KKPA (Cooperative Credit Scheme) PT. SHE has Sustainable Plantation Management (Number of Policy 724/TQEM-SPMS/09) page 13 of 31, Social Policy point 4 states: to develop and implement the policy in protecting female worker from any sexual harassment and crime and protecting rights related with female reproduction. There is also policy in Collective Labor Agreement/Company Regulation in 2012 – 2014 namely after birth days off section 33 subsection 1: maternity/miscarriage, sub section 2 paid rest. Section 34 sub section 1 point 1.6 for period/menstruation leave for 2 days..

The management of Cooperative Credit Scheme of PT. SHE has established internal organization to protect female workers namely Gender Committee on July 1st, 2011 by Mr. Udin L. Lasiata (SM at KKPA). A promotion letter number 001/KKPA-SHE/SK/VII/11/G is available. Ms. Susilowati was promoted as the Chairman of Gender Committee Board. Gunung Sari Estate has established a Gender Committee led by Zoharoh Hawaris (Period of July 2012- June 2013). There is a work program for gender committee for 2013, a report of Socialization of Gender Committee to all fertilizing workers, spraying workers, harvesting workers, and other maintenance on April 29th, 2013

There is a GSE management policy concerning a Prohibition for Pregant Woman and Breastfeeding Mother to Work at Spraying and Fertilization Section, the number is GSE-gme/131/XI/2009/S. It was published by the Manager of Gunung Sari on November 18th, 2009. There is a lockout policy for pregnant woman and breastfeeding mother for two years after birth. It is stipulated in the memorandum number 02/VI/2013/KKPA-4. However, the management of KKPA 4 needs to determine the border for job that cannot be conducted by pregnant woman and breastfeeding mom to avoid discrimination indication.

Maternity leave right and break right are regulated in Collective Labor Agreement of employee in 2012-2014 section 33 concerning leave rights granting.


ASSESSMENT REPORT


There is a Gender Policy approved by HPU Indonesia (Mohd Ghozali Yahya) in April 2011. There is a mechanism of complaint submission, sexual harassment prohibition, and discrimination prohibition to woman (Number 028/PSQM-UM/VII/2012). KKPA 4 and GSE have determined SOP as the guidance of Gender Committee Policy Implementation at PT SHE. Number of document is KP/02, on April 1st, 2012, by using complaint form such as appendix number 9.3 (number of document is 700/PD-KG/10


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

The price determination of fresh fruit bunch involves several stakeholders such as representative of farmers, representative of company, representative of government. The result of meeting in fresh fruit bunch price determination is openly announced in KUD (Village Cooperative Unit), company, and office of village.

There is a document of fresh fruit bunch price, in April 2013 (525/653/ PUPPH-2) that have been regulated by Plantation Agency of South Kalimantan Province on April 17th, 2013. Fresh fruit bunch price is determined by Plantation Agency of South Kalimantan Province according to the meeting with several parties. There were several parties who attended the meeting for the determination of fresh fruit bunch price, such as Plantation Agency of South Kalimantan Province, Economic Bureau of South Kalimantan, Industrial and Trading Agency, Cooperative and Small and Medium Enterprises Agency, Head of Palm Employers Association of Indonesia (GAPKI)/Indonesia Plantation Company Association (GPPI) of South Kalimantan, the representative of palm oil processing company and member/ representative of several Scheme Smallholders. For example, the highest price is Rp. 1,318.44.- and the lowest price is Rp. 965.45.-

Based on the interview result with the board of Tuwuh Sari Female Cooperative, letter of monthly pricing has been known by the cooperative.

The company and contractor had shown a evidence that all parties have agreed with their contract and this contract is fear, legal, and transparant, such as:

a. An agreement between the company and contractor (Ramli Ali) such as at KKPA-4 Estate which stipulated in the Work Agreement Number BGE/SPK-LKL/III/2013/018-FFB and empty fruit bunch on December 1st, 2012. These have been agreed.

b. KKPA 4: Work Agreement of palm oil transportation on behalf of H. Usman. The number of Work Agreement is KKPA-4/SPK-LKL/II/13/098

c. GSE: Work Agreement between GSE (EM Manager) with Istikah/contractor for fresh fruit bunch transportation. The number of Work Agreement is GSE/SPK-LKL/XII/2012/026, published on January 12th, 2013

There is receipt of payment “Summary of smallholders Plantation Report at Angsana Village” for the period of 2012/2013. The mechanism of payment is listed below:

The report of smallholders plantation management is signed by the Head of KUD, treasurer of KUD, senior manager of KPA, GM KKPA, SGM KKPA and Head of Plantation. It is then delivered from management unit to Head Office. Based on this report, GM KKPA instruct the payment (transfer) of profit sharing of KKPA to the Head of Treasury to the account of KUD.

KKPA-4: There is a minutes of payment for the palm fruit transportation to contractor on behalf of H. Usman. The number of Letter of Agreement is KKPA-4/SPK-LKL/II/13/098 as much as Rp 446,610,- on March 18th 2013

GSE: There is a minutes of payment for the contractor work (BAPP) for the palm fruit transportation on behalf of contractor/Istikah (number of Work Agreement is GSE/SPK-LKL/XII/2012/026) as much as Rp 41,869,435,- on February 15th, 2013.


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

There are several documents related to the contribution of PT. SHE/KKPA to the local development, such as:

Minamas – Sime Darby Scholarship Program 2012 for Diploma III Technology and Production Management, Bogor Agricultural University (IPB) (Memorandum No. 027 – HRM-17-III-12 on March 9th, 2012).

Realization of Scholarship Program. Based on the interview with two interns on behalf of Zaidan Ersyad (Teluk Siak


ASSESSMENT REPORT


Estate) and Linggar Eko Setiawanto from Tamiang Factory (scholar – Simedarby 2010, Technology and Production Management, Bogor Agricultural University). He is active to go to campus since August 23rd, 2010. The scholarship is used for tuition fee per semester, living cost per month, book cost per semester and laptop).

The summary of payment to local contractor (Please see 6.10).

Other type of contributions from company to the community around the company’s area is the development of palm plantation area through KKPA (Cooperative Credit Scheme) program for 16,000 hectares (productive plants for 16,000 hectares). It involves 3,258 members. Based on the data of KKPA (Cooperative Credit Scheme) member, KUD Tuwuh Sari (Village Cooperative Unit)and Community Development/CD SHE, the detail of KKPA (Cooperative Credit Scheme) member is listed below: Bakarangan Village- 45 members, Kuranji Village - 20 members, Tiberao Panjang Village - 16 members, Angsana Village - 129 members, Sebambam Lama Village - 331 members, Waringin Tunggal Village - 507 members, Giri Mulya Village - 494 members, Mustika Village - 527 members, Karang Mulya Village - 894 members, and Karang Indah Village - 295 members.


PRINCIPLE #7 Responsible development of new plantings

7.1 A comprehensive and participatory independent social and environmental assessment is undertaken prior to establishing new plantings or operations, or expanding existing ones, and the results incorporated into planning, management and operations.

Not Applicable.

During the implementation of surveillance-2, there was no new plantation at the operational area of Gunung Sari Estate, Angsana Estate, Pantai Bonati Estate and KKPA-4 Estate. The last planting was conducted to add new scoping at KKPA-4 in 2006. The new planting at Angsana Estate in 2007 - 2008 was conducted at Land Use Title. It did not located at HCV area and forest area.

Status: Not Applicable

7.2 Soil surveys and topographic information are used for site planning in the establishment of new plantings, and the results are incorporated into plans and operations.

Not Applicable.



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.

Not Applicable.



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

Not Applicable.

During the implementation of surveillance-2, there was no new plantation at the operational area of Gunung Sari Estate, Angsana Estate, Pantai Bonati Estate and KKPA-4 Estate. The last planting was conducted to add new scoping at


ASSESSMENT REPORT


KKPA-4 in 2006. The new planting at Angsana Estate in 2007 - 2008 was conducted at Land Use Title. It did not located at HCV area and forest area.


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.

Not Applicable.



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.

Not Applicable.



7.7 Use of fire in the preparation of new plantings is avoided other than in specific situations, as identified in the ASEAN guidelines or other regional best practice.

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.

There is monitoring action plan for sustainable improvement such as Health and Hygiene Section. Domestic waste has been collected (housing area) every two weeks and it was then delivered to landfill.

Based on the result of Surveillance 2 RSPO, the company has shown the improvement to mismatch that identified at Surveillance 1.



ASSESSMENT REPORT


3.2. Summary of Assessment Report of Supply Chain

Clause (Module D) CPO Mills - Segregation Requirements

1 Documented Procedures

1.1

The 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.

Angsana POM , LSI have procedures and work instructions to ensure implementation of supply chain system, as follow :

a. SOP Angsana POM refer to Technical guidelines for palm oil mill 1, 2 and administration that appropriate with Memorandum of Head Plantation Operation No.POD-UM-154/VII/2010 dated July 26, 2010 which explain :

FFB Receipt No.110/POD-FAC/07, sterilization No.. 110/POD-FAC/07, striping No. 110/POD-FAC/07, digesting No. 110/POD-FAC/07, pressing No.. 110/POD-FAC/07, Purification (clarification) No.110/POD-FAC/07, Separation of kernel and fiber No. 110/POD-FAC/07, Kernel Station No. 110/POD-FAC/07, Palm Oil storage No. 110/POD-FAC/07.

Angsana POM have SOP Identification and traceability Products at POM Minamas Plantation No.501/SHE-AMF-03/12 approved on October 20, 2011 by POM Manager and estate manager

SOP Identification and traceability Products at POM Angsana PT Ladangrupun Suburabadi Minamas Minamas Plantation No.RSPO/65/SCPP/SHE that explain segregation model in the supply chain

b) Personnel who responsible in these requirements include:

Manager of Angsana POM : store and maintain all documents and records of all raw materials, supporting materials used in the production process and the quality of the final product.

Assistant Plantation Sustainable Quality Management (PSQM): examine the quality of FFB at POM and make recapitulation daily.

Laboratory Assistant : analysis and test quality of raw materials and products at all stages of production process POM Mangala.

Assistant / Senior Assistant / Manager Bulking are responsible for transportation CPO and PKO products from POM to bulking station.


1.2

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

Angsana POM, LSI have documentation system for receipt and processing of FFB certified, among other:

a. FFB delivery Ticket

b. Weigh tickets

c. SIME Weight application program that explain origin of FFB (Division, block harvest, planting year, the number of

fruit bunch)

d. Document production recapitulation of certified RSPO and non RSPO certified certified every month

FFB processed in Angsana POM, mostly come from nucleus RSPO certified PT.LSI (Angsana Estate and Gunung Sari Estate) where not all FFB processed is not RSPO certified because there is FFB non RSPO certified from smallholders (KKPA1 and KKPA 4 ) that full managed by PT . SHE



ASSESSMENT REPORT


2 Purchasing and goods in

2.1

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

Angsana POM, LSI shown the documents to verify FFB volume of certified and non-certified products in documents to separated certified RSPO and non-certified RSPO. Angsana POM, LSI have determined Segregation in the application of Supply Chain Model. In the next period , smallholders KKPA-1 and KKPA-4 have acknowledged supply material of FFB certified. Documentation is done by Angsana Mini POM with marked documents of FFB certified using the stamp "RSPO certified" and "non- RSPO certified ".


2.2

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

Since July 8, 2012 until Surveillance-2 (April 30, 2013), Angsana POM listed claim against CPO products of 35,574.081 tonnes (78.51% of the claim) and the Kernel of 7,435.102 tonnes (87.9%).

The amount of product that can be claimed by Angsana POM did not exceed from projection :

a. 13,256 tonness of CPO b. 2,726 tonnes of Kernel

Angsana POM, LSI will give information to Mutu Agung Lestari if there is excess production than projection.


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 recording and reporting has been made and stored fully by company. Storage system in the form of soft copy documents in the System Application Program (SAP), SIME Weight program and hard copy (FFB delivery Ticket, weigh Tickets, Delivery orders) are stored in the administration room of Angsana POM


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

Angsana POM, LSI have determined shelf life and shown records related to FFB receipts until the oil storage in storage tank. For example: Daily reports, data of entry and processed FFB, factory utilization, quality and capacity CPO and Kernel, Quality of oil in storage tanks, and Data of Kernel and CPO delivery (Delivery Order) and document Process Control Report for 5 years.

All recording and reporting documents have been stored properly at the office of Angsana POM


3.3 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.

CPO and Kernel that produced by POM Angsana, did not all products can be claimed as RSPO certified product. The products that can be claimed is derived from the nucleus PT LSI (Angsana Estate and Gunung Sari Estate), while derived from smallholders (KKPA 1 and KKPA 4) cannot be claimed as a certified product.

All FFB receipts and shipments CPO and Kernel of Angsana POM accounted well for the three-month period in Monthly


ASSESSMENT REPORT


FFB document production and document delivery CPO and Kernel.


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.

Angsana POM, LSI shown evidence of trade documents such as sales contracts that describe the products certified and used Segregation models, such as:

1. Sales Contract No.0016/SHE/KTR-MKS/LOK/II/2013 dated February 27, 2013 that explained: a. Company buyers b. Products purchased (CPO) c. Quality (FFA 5.00% Max, Moisture and Impurities 0.50% Max) d. Quantity 1.000,000 Kg e. Term of Delivery with delivered (franco) f. Delivery Period March 2013 g. Payment Terms 98% before delivery h. Price

2. Sales Contract No.00124/SHE/KTR-IKS/LOK/II/2013 dated February 22, 2013 that explain: 1. Company buyers 2. Products purchased (CPO) 3. Quality (Moisture, Impurities, Dirt and Shell 16.00% Max) 4. Quantity 300,000 Kg 5. Term of Delivery with Ex Mill (Loco) 6. Delivery Period February 2013 7. Payment Terms Advance payment 98% before delivery 8. Price 9. Customs terms


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, including the applicable supply chain model (Segregated)

(d) The quantity of the product delivered

(e) Reference to related transport documentation

Angsana POM, LSI shown invoice documents of RSPO certified products and used Segregation models, such as:

1. Invoice No. DN/00223/LSI/I/2013 dated February 5, 2013 with amount of 750,960 kg CPO for Sales Contract and Delivery Order No.00223/LSI/KTR-MKS/LOK/I/2013 and Delivery Order No.00289/00223/01/13/L-LSI-MKS

2. Invoice No.00432/LSI/II/2013 dated February 28, 2013 with amount of 294,000 Kg Kernel Sales Contract No.0017/LSI/KTR-IKS/LOK/I/2013 dan Delivery Order No.00125/00107/03/13/L-LSI-IKS

Document Invoice is contained information, such as

(a) Name and address of buyer (b) Invoice date issued; (c) Description of the product; include supply chain model (segregation) (d) The number of products (e) Reference to the relevant transport documentation


ASSESSMENT REPORT



5 Processing

5.1

The facility shall assure and verify through clear procedures and record keeping that the RSPO certified palm oil is kept segregated from non certified material including during transport and storage and be able to demonstrate that is has taken all reasonable measures to ensure that contamination is avoided. The objective is for 100 % segregated material to be reached. The systems should guarantee the minimum standard of 95 % segregated physical material9; up to 5 % contamination is allowed.

Angsana POM have procedures and records that describe the separation of RSPO-certified products in the transport and delivery mechanisms to ensure protected from contamination. Documents and records verification of the separation of certified products is available at Angsana POM office.


5.2

The facility shall provide documented proof that the RSPO certified palm oil can be traced back to only certified segregated material.

Angsana Mini POM shown evidence of documentation for RSPO certified product such as CPO and kernel that can be tracked. This is supported by the following documents:

a. Daily Production report of Angsana POM describe of

FFB processed

Utilities

Outcomes and Quality of CPO

Outcomes and Quality of Kernel

CPO delivery

Kernel delivery

Production of empty fruit bunch

Production of shell

Production of waste

The number and origin of FFB received

FFB Quality

Water Usage

Losses Oil, Unstrapped Bunch, Nuts

Stock and Quality of CPO in Bulking

Stock and Quality of CPO in Storage

Stock CPO

Stock Kernel

Stock and Quality Kernel in POM

Production Fiber and Shells

Data Delivery (Shipping) CPO and Kernel

b. Shipping Documents of CPO and Kernel

c. Working Sheet Oil Extraction (Ritchie and Beset)

d. Working Sheet Kernel Extraction (Ullage)

e. FFB Receive Detail Report By Supplier

f. Weight Ticket

g. FFB delivery Ticket


ASSESSMENT REPORT


Based on document review dated 2 May 2013 note that the production of CPO and Kernel can be traced back to the origin of suppliers estate. All documents properly recorded and stored by the Angsana POM, LSI.


5.3

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 operator conforms to these requirements for segregation

The crush is covered through a signed and enforceable agreement

Not Applicable; Angsana POM, only sell Palm Kernel and not to cooperate with Kernel Crushing Plant.


6 Training

6.1

The facility shall provide the training for all staff as required to implement the requirements of the Supply Chain Certification Systems

LSI has conducted training of supply chain model comprehension for FFB receipt until despacth palm oil in the form of Supply Chain Training Program for PT Ladangrumpun Suburabadi, Angsana POM that was held on April23, 2013 in the meeting room Angsana POM and attended by 9 employees of Angsana POM, PT LSI Training documents are available and stored properly at Angsana POM office.


7 Claims

7.1 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.

Sales of CPO and PK claimed from Angsana POM, LSI make claims for certified products according to RSPO Communication and Claim. The claim process use E-trace by UTZ.



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

X or√

S-2 SHE has logo and certificate approval/permit number MUTU-RSPO/006a LSI √

Status:

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

X or√

S-2 The Company does not use the logo both on-product and off-product within the scope of Angsana POM (PT Ladangrumpun Suburabadi) and its supply base.

√

Status:

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

X or√


√

Status:

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

X or√


√

Status:


ASSESSMENT REPORT


3.4. Summary of RSPO Partial Certification.

Total companies observed (0.5 √Y) Where Y is the total of uncertified RSPO registered company. The Management Unit name : PT Guthrie Pecconina Indonesia (KKPA Sungai Jernih). Date of Observation: 29 January 2013 – 2 February 2013

2.1

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

X or√

There is evidence of law fulfillment include: 1. Tenure of land compile with UU. 5 year 1960 on Agrarian Principles, namely HGU

Certificate No. 664/2003, 552/2003 for an area of 10139.91 ha. 2. Providing social security such as labour social assurance (Jamsostek) compile with UU

No. 3 year 1992. 3. Providing equipment Occupational Safety and Health program (K3) for all employees

compile with UU No. 1 year 1970. 4. Environmental management document preparation progress (RKL / RPL) compile with

UU no. 23 year 1997. 5. No land clearing by burning compile with UU No. 18 year 2004. 6. No discrimination against employees compile with UU No. 21 years 1999 - ratification of

the ILO's anti-discrimination stated in Collective Labor Agreement. 7. Allocating some of the area as a protected area compile with Presidential Decree No.

32 year 1990 and UU No. 41 year 1999 about Forestry. (Identification of HCV by Aksenta in July 2012).

8. Giving wages above the minimum wage. Corporate compliance to legality of land tenure, the implementation of environmental and social governance, labor protection, as well as the submission of the report to agencies (e.g. Environment Agency, Government, and the Department of Forestry and Plantations Musi Banyuasin) stated that the GPI is quite obedient and consistent with the rules.

√


2.2

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

X or√

Company shown the documents of : 1. location Permit compile with Regent of Musi Banyuasin decree No 262 year 2011

covering area of 4,000 ha 2. location Permit compile with Regent of Musi Banyuasin decree No 0217 year 2011

covering area of 2,000 ha 3. Determination of smallholder as 262 Candidates compile with Regent of Musi Banyuasin

decree No. 0258 year 2010. 4. Cooperation Agreement with KUD Sinar delima No.001/Plasma/GPI-KUD/I/2012 about

development of Oil Palm Plantation with KKPA Partnership (Cooperative Credit Scheme) 5. Plantation business permit (IUP) smallholder based on regent decree No. 0265 of 2010

(Core 800 ha and smallholder 1200 ha in Gajah Mati village, Sungai keruh subdistrict) and IUP based on regent decree No. 282/KPTS/IUP/DISBUN/2011 (Core 1600 ha and smallholders 2400 ha).

6. Distribution plan had already plots, is waiting approval from village cooperative unit (KUD) distribute to smallholders

There is statement of the land handover from land owners such as pedestal Business Right and letter of recognition. For example, land handover statement on behalf of Aziz Ali with pedestal Business Rights and letter of recognition dated July 9, 2007 for an area of 2.8 ha approved by Head of Gajah mati Village and a letter of recognition on behalf of Aziz Alifor land area of 2.8 hectares in Gajah Mati Village on February 24, 2008 and registered in Subdistrict Office No.593/126/2009/XII/2008 dated December 3, 2008.

√



ASSESSMENT REPORT


6.3

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

X or√

There is Consultation and Communication procedures to Community (RSPO/6.2/KKM), Society Complaint Handling (RSPO/6.3/PKM), Employee Complaints Handling (RSPO/6.5/PKK) and conflict resolution (RSPO/2.2/PK) . It had socialize to communities around the estate are (1) Talang Piase Village (May 14, 2011), (2) Talang Ilo III village (May 27, 2011), (3) NAPAL Village (May 29 20 110) and (4) Karang Ringin Village II (May 26, 2011), (5) Rantau Kasih Village (May 13, 2011). The socialization Record consist of time, place, material, photo and attendees list. Technical of disputes solution as effective, timely and correct manner describe in mechanism (flow chart) the complaints handling as follow : Complaints from internal / external received by Kasie and note it, then delivered to the manager to make decision or if needed to consult with head department and last made decision. Complaints from workers can solve in two days (counting from the complaint entered into management until realization decision), while society complaints handling is depending on the type of complaints, if the complaint was mild and the facilities available, it can solve more or less three days, but if complaints is significant and need consultation with head office management, approximately one week.

√

Status: Full compliance

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.

X or√

Procedures to identify and calculate the compensation for loss of legal or customary rights over the land covered by procedure (SOP) Conflict Resolution (RSPO/2.2/PK) and have been socialized All evidence related with conflict resolution is available in form of statement of the land handover from land owners such as pedestal Business Right and letter of recognition.For example land handover statement on behalf of Aziz Ali with pedestal Business Rights and letter of recognition dated July 9, 2007 for an area of 2.8 ha approved by Head of Gajah mati Village and a letter of recognition on behalf of Aziz Alifor land area of 2.8 hectares in Gajah Mati Village on February 24, 2008 and registered in Subdistrict Office No.593/126/2009/XII/2008 dated December 3, 2008.

√


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.

X or√

There is identification of HCV conducted in July 2011 by AKSENTA. These documents ensure that no area of HCV is used for development of new KKPA plantations.

√


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.

X or√

Procedures to identify and calculate the compensation for loss of legal or customary rights over the land covered by procedure (SOP) Conflict Resolution (RSPO/2.2/PK).There is no contents revisions or mechanisms of compensation calculation. It is similar to previous audits. There is statement of the land handover from land owners such as pedestal Business Right and letter of recognition. For example, land handover statement on behalf of Aziz Ali with pedestal Business Rights and letter of recognition dated July 9, 2007 for an area of 2.8 ha approved by Head of Gajah mati Village and a letter of recognition on behalf of Aziz Alifor land area of 2.8 hectares in Gajah Mati Village on February 24, 2008 and registered in Subdistrict Office No.593/126/2009/XII/2008 dated December 3, 2008.

√


ASSESSMENT REPORT


Development of smallholder based on agreement between KUD Sinar delima with PT GPI in accordance of Cooperation Agreement No.001/Plasma/GPI-KUD/I/2012 about development of Oil Palm Plantation with KKPA Partnership (Cooperative Credit Scheme). Determination of smallholder as 262 Candidates compile with Regent of Musi Banyuasin decree No. 0258 year 2010.


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.

X or√

There is statement of the land handover from land owners (pedestal Business Right and letter of recognition) that voluntarily agreed. For example, land handover statement on behalf of Aziz Ali with pedestal Business Rights and letter of recognition dated July 9, 2007 for an area of 2.8 ha approved by Head of Gajah mati Village and a letter of recognition on behalf of Aziz Alifor land area of 2.8 hectares in Gajah Mati Village on February 24, 2008 and registered in Subdistrict Office No.593/126/2009/XII/2008 dated December 3, 2008.

√



ASSESSMENT REPORT


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

3.5.1 Identification of Findings, Corrective Actions and Observations at S-1 Assessment

CAR

No

Ref

Std Finding Area Grade

Time

Limits Corrective Action Observation Status

Closing

Date

CAR

2012.01

Minor

4.2.1

Soil survey.

LSI has conducted semi-detailed soil

survey in 2006, however through 2012

semi detailed soil surveys to support

the are planned every 5 years has not

been done by LSI

Estate Minor S-2 LSI must conduct soil analysis are

planned every 5 years to improve

soil fertility

May 1st, 2013.

Company have tested soil analysis by MRC (Minamas Research Centre) that presented in Survey report of review the land and land suitability class for palm oil such as in Angsana Estate (October 2013), Gunung Sari Estate (March 2013) that explain suitable level that can be managed and planted palm oil.

The records and result of land analysis are available in each estate

Closed with observation

May 1st, 2013.

CAR

2012.02

Minor

4.7.2

Periodic checks of workers at high

risk.

Based on the observations of the

document is known that periodic

medical examinations to workers,

especially workers who are at high risk

such as the station operator, chemical

sprayers, B3 and fertilizer warehouse

officer not exceeding one year in

accordance with the PT.LSI health

checks plan and do not correspond

with the Minister of Manpower

regulation 2 of 1980 on labor health

check.

Mill Minor S-2 LSI must conduct health check

periodically to workers who work at

high risk such as station operator,

chemical sprayers, hazardous

waste warehouse workers,

fertilizer workers, at least 1 year

according to Manpower Regulation

No 2/1980 about employment

medical examination

May 1st, 2013.

The company has conducted a routine medical checkup for worker who work in high risk station for 12 workers by company’s doctor who have certified of company hygiene & occupational health on January 19th, 2012 and Jun 9th, 2012 ,

All records of examination are available at Central Clinic

Closed May 1st, 2013


ASSESSMENT REPORT


CAR

2012.03

Major

5.6.2

Emission quality monitoring.

LSI has not carried out the quality of

motor vehicle emissions monitoring in

the Estate and Angsana Mill in

accordance with the Environmental

Ministry Regulation No.5 year 2006 on

Threshold for vehicle exhaust

emissions.

Mill

and

Estate

Major 60

days

LSI has conducted monitoring and

evaluation of emissions contained

in the document Summary of

Motor Vehicle Emissions Test

Results on May 25, 2012 to PT.

Ladang Rumpun Suburabadi,

Angsana POM and estate for 20

units conducted emissions testing

of vehicles and six vehicles in

Gunung Sari estate.

Based on evidence of motor vehicle

emissions test results given LSI has

complied with standard. (Will be observe

at next surveillance audit)

Closed June 3,

2012

CAR

2012.04

Major

6.5.2

Company regulations.

LSI already has a regulation that has

been agreed by LSI management and

employee representatives, however

has not been registered to the relevant

agencies

Mill

and

Estate

Major 60

days

LSI has shown evidence of

company regulation handover

approval on May 21, 2012 to the

Social Labour and Transmigration

Agency Tanah Bumbu District,

South Kalimantan.

Based on evidence of Company

Regulation that have been submitted and

approve from the relevant agency LSI has

been complied with the standard.

Closed June 3,

2012

CAR

2012.05

SCCS

1.2

Certified and uncertified product

documentation procedure.

PT.LSI Angsana Mill doesn’t have

documented procedures for receiving

and processing certified and non-

certified FFBs.

Mill NC 60

days

Angsana mill have documented

procedures for receiving and

processing certified and non-

certified FFBs accordance to

supply chain procedure.


Regulation that have been submitted

Angsana mill has been complied with the

standard.

Closed May 3,

2012

CAR

2012.06

SCCS

2.1

FFB received document.

PT.LSI Angsana Mill has not been able

to show separation documents and

receipts for RSPO certified and

uncertified FFB.

Mill NC 60

days

Separation document procedure

has been made for certified and

uncertified product accordance to

supply chain procedure.




standard.

Closed May 3,

2012

CAR

2012.07

SCCS

3.3

Records of FFB, CPO and Palm

Kernel certified and uncertified.

PT.LSI Angsana Mill has not been able

Angsa

na Mill

NC 60

days

Angsana Mill has showed the

document recording and balancing

FFB for shipment of RSPO




Closed May 3,

2012


ASSESSMENT REPORT


to show the document recording and

balancing FFB for shipment of RSPO

certified palm oil and Palm Kernel for

every 3 months

certified palm oil and Palm Kernel

for every 3 months

standard.

CAR

2012.08

SCCS

3.4

Supply chain model used.

Based on the observations of the

document is known that the Sales

Contract document does not explain

the Mass Balance model of supply

chain in accordance with SOP

Angsana Mill and not describe the

product being sold is RSPO certified

products.

Angsa

na Mill

NC 60

days

Sales Contract document has

explained the Mass Balance model

of supply chain in accordance with

SOP Angsana Mill.




standard.

Closed May 3,

2012

CAR

2012.09

SCCS

5.1

Supply chain training.

LSI Angsana mill has not been able to

show that the training requirements

relating to the implementation of

Supply Chain Certification System

were conducted for all staff.

Angsa

na Mill

NC 60

days

Angsana mill has conducted

supply chain training to related

staff for implementing this supply

chain and traceability.




standard.

Closed May 3,

2012

CAR

2012.10

SCCS

6.1

RSPO certified claims support.

Angsana Mill, PT.LSI have not been

able to show the use of claims to

support the RSPO certified palm oil

according to the RSPO Guidelines for

Communication and Claims, both of

which are listed in the Sales Contract,

Delivery Order and Invoice.

Angsa

na Mill

NC 60

days

Angsana Mill has showed the use

of claims to support the RSPO

certified palm oil according to the

RSPO Guidelines for

Communication and Claims, both

of which are listed in the Sales

Contract, Delivery Order and

Invoice.




standard.

Closed May 3,

2012


ASSESSMENT REPORT


3.5.2 Identification of Findings, Corrective Actions and Observations at S-2 Assessment

CAR

No

Ref Std

Finding Area Grade Time

Limits Corrective Action Observation Status Closing Date

CAR

2013.01

Major

4.8.1

Load Lift Operator Training Program. Based on interviews with operators becho loader division 2 GSE (on behalf of Asmari), He is not have SIO as evidence of competency and SIO training program are not available

Major Gunung Sari

Estate

July, 3rd 2013

Company must comply training programs and the realization for employees in accordance with their competence in each position

May 3rd, 2013

LSI, GSE have made training program for heavy equipment operator (lifting and transport) in September 2013, It will be observed by team auditor against fulfillment of the training plan (indicator 4.8.2)

Close with observation

May 3rd, 2013

2013.02

Major 5.1.1

Analysis Impact Documents Environmental document

(EIA) PT LSI has been

revoked and deemed invalid

based on Decree of Regional

Environmental Agency Tanah

Bumbu district Number

660/44/BLHD/2012 dated May

2nd, 2012 about revocation

based on Decree of Tanah

Bumbu Regency No. 380 year

2010 about eligibility

Plantation and mill activities

and of PT Ladangrumpun

Suburabadi, Angsana

subdistrict, Tanah bumbu

district, South Kalimantan

Major POM July, 3rd 2013

Company must have valid document of environmental impact and approved according to regulation

PT LSI has been shown valid documents from state minister for the environment No.B-5459/Dep.I/LH/PDAL/05/2013 dated May 10th, 2013 about Clarification Environmental Document PT Ladangrumpun Suburabadi that explained environment document to PT LSI (UKL-UPL) No.191/II/DAR-3/1999 remain valid, but improvements to the fulfilment of environmental documents in accordance with the regulations (DELH) because LSI POM capacity has been upgrade to 60 tons / hour.

Process improvement and compliance with new environmental document will be observed by team auditor on the next visit.

Closed June 2nd, 2013


ASSESSMENT REPORT


Province

2013.03

Minor 5.2.1

Effectiveness HCV socialization There is not sufficient evidence that socialization was effective, based on interviews results with workers (harvesters, fertilizers, sprayers). They do not understand what kind of animals are protected as in the sign board that installed by company.

Gunung Sari Estate

Minor S-3 Company must ensure and re-evaluate of HCV Socialization for effectiveness

June 2nd, 2013

LSI has shown evidence of re-socialization of HCV understanding and animal species are protected to 17 spraying workers in Division III Gunung Sari Estate on May 16th, 2013 in the form of documents and photos. The understanding of HCV and animal species are protected will be observed in next surveillance visit


CAR

2013.04

Minor

5.3.1

Implementation of Hazardous Waste Management Plan

Based on review documents

of hazardous waste

monitoring and balance, also

field observations was known

that the company did not

manage hazardous waste in

accordance with applicable

SOP (SOP No RA 012) about

hazardous waste

management, that are not

POM Minor S-3 Companies must conduct hazardous waste management in accordance with SOP and regulations

May 3rd, 2013

LSI (Gunung Sari Estate) has evaluated identification sources of waste and its management by setting the fabric rags as hazardous waste so it managed in accordance with the rules and not dumped into landfills. It supported by an Gunung Sari Estate management statement letter Management dated May 2nd, 2013 about hazardous waste management (fabric rags) according to the rules



ASSESSMENT REPORT


appropriate include:

Fabric rags in GSE did not

store in the hazardous

waste temporary

warehouse

Hazardous waste except batteries stored in the hazardous waste temporary warehouse more than 90 days

June 2nd, 2013 LSI has shown evidence of socialization fabric rags collection as hazardous waste to employees on May 29th, 2013 at Gunung Sari Estate. The Evidence presented in form of documents of socialization list and photos. It will be observed by team auditor during the next surveillance visit.


ASSESSMENT REPORT


3.5.3 Opportunity for Improvement

No Ref Std Descriptions

1 Major 2.1.1 PT LSI has received decree of Forestry and Plantation Agency Tanah Bumbu Distrct NO 525/254/Bun.1/2012 dated July 5th, 2012, related termination of

company's operations both in estate and mill, but it will be observed by team auditor to compliance with regulatory if the plantation permit is no longer valid

2 Major 3.1.1 PT SHE - PBE need to consider adjustments of determination Operational area and production targets, (described in Indicator 2.2.1)

3 Minor 4.7.4 LSI need to reevaluate the periodic health examination program in the planned period in 2013 to workers whowork at high risk.

4 Minor 5.2.2 Training plan should be considered in order to produce HCV officers who trained in manage HCV

5 Major 6.2.1

Major 6.3.1

Company should be considered to accommodate grievances, aspirations and requests for information are not written on the communication procedures

6 Minor 6.9.2 Company can review the policy for pregnant and lactating women for 2 years after giving birth in KKPA 4 (Memorandum No. 02/VI/2013/KKPA-4)

3.5.4 Noteworthy Positive Components

No Ref Std Descriptions

1 Minor 6.5.1 Facilities and infrastructure for the employees is adequate. It is proofed by the achievement of an award from Regional Government Tanah Bumbu district for GSE housing, educational facilities (play group, Primary School and Secondary School first)

2 Minor 6.11.1 Company have scholarship program for children workers and community around

Company have developed smallholder scheme for area of 16,000 Ha


ASSESSMENT REPORT


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

Public Issues (Institution/ NGO/Community)

Management Responses Auditor Responses

Forestry and Plantation Agency Tanah Bumbu district.

LSI estate has been given a warning letter related to revocation of environmental documents (EIA) of PT LSI are considered invalid and automatically it will affect the business license of PT LSI.

LSI felt decision of Forestry and Plantation Agency, Tanah Bumbu district was not appropriate and has submitted objections to State Administrative Court .

This condition will observe in next assessment, because LSI have documents of Business Registration License (SPUP) No.458/Menhutbun-VII/2000 dated 25 April 2000 with extensive plantation and palm oil mill capacities 60 Tons FFB / hour, it was complied with Regulation (Permentan) No.26 Year 2007 about plantation business permit. (Indicator 2.1.1)

Environment Agency, Tanah Bumbu district.

Environmental document (EIA) PT LSI has been revoked and deemed invalid based on Decree of Regional Environmental Agency Tanah Bumbu district Number 660/44/BLHD/2012 dated May 2nd, 2012

Revocation based on Decree of Tanah Bumbu Regency No. 380 year 2010 about eligibility Plantation and mill activities and of PT Ladangrumpun Suburabadi.

LSI have environmental documents (EIA) which is legal based on Decree of Tanah Bumbu Regency No. 380 year 2010 on Feasibility of environmental Plantations and Palm Oil Mill Activities PT Ladangrumpun Suburabadi. The documents were prepared under direction of BLHD Tanah Bumbu district,so that LSI objected that EIA document was held to be invalid.

Environmental documents (EIA) PT LSI has been deemed invalid based on decree of Regional Environmental Agency Tanah Bumbu district Number 660/44/BLHD/2012 dated May 2, 2012, the revocation based on decree of Tanah Bumbu Regency year 2010 on Feasibility of environmental Plantations and Palm Oil Mill Activities PT Ladangrumpun Suburabadi.. (Indicators 2.1.1 and 5.1.1)

Manpower and Transmigration Agency, Tanah Bumbu district. In the operational area PT LSI is not employment issues. LSI has been trying to apply and fulfill all labor laws.

LSI committed to comply all relevant regulations and respects the right of all personnel to form and join trade unions and prohibited all forms of discrimination.

LSI has endeavored to comply with all applicable labor laws.


ASSESSMENT REPORT


Public Issues (Institution/ NGO/Community)

Management Responses Auditor Responses

Farmers & Community Leaders, Kuranji Village Positive impact of KKPA program (cooperative credit scheme), among others: 1. Economic development for rural residents (income source). 2. Open new job opportunities for people who work in the oil palm

plantation sector (such as harvester and plant maintenance) 3. Village road maintenance 4. Aid of sacrificial animals during Eid Idhul Aspirations: 1. Community expected assistance in education aspect (eg,

procurement package books) 2. Business Profits (SHU) of KUD Tuwuh Sari should be clearly

explained and distribute to all farmers, not only to village representatives.

The aid of pack books have not been made but company give scholarship for high school graduates to go to college An Explanation of SHU have been done, and about explanation directly to all farmers will be coordinated with the KUD.

KKPA managers should implement the CD / CSR program based on community’s priority

BPD Chairman and Village Empowement , Bayan Sari Village Information obtained: 1. LSI and village governments have a good relationship so communication with the villagers is going well. 2. Up to now there are no cases of land conflicts. The positive impact is felt by the community on plantation of cooperative credit scheme that built by LSI (Minamas Plantation - Sime Darby)

Bayan Sari village is one of smallholders PT LSI. Bayan sari village administratively bordering with Gunung Sari estate. For the village, the company has given lot of contribution in the improvement of rural development through the Community Development and CSR programs. So that the relationship between the Bayan Sari village and PT LSI is going well.

LSI has tried to establish good relations with the surrounding villages. The company also contributes to rural development

Head of Bunati Village Information obtained: 1. PT SHE has contributed to Bunati village, but it expected to

improved. 2. The company has given employment opportunities based on

company needs and the availability of appropriate human resources.

3. There are no areas that belong to cultural heritage. 4. Only Bunati villages do not cooperate in smallholders scheme

1. Company routinely have CD / CSR program for Bunati village that programed in CD / CSR Bunati Estate

2. Company prioritize labor from surrounding villages in accordance with the qualifications and requirements of the company.

3. There are no areas that belong to the cultural heritage. 4. During the development smallholders phase, Bunati

village represented by village head were not willing to participate in the smallholders program.

Company should further improve implementation of CD / CSR program according to community’s priority.


ASSESSMENT REPORT


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:

Company Name

Mutuagung Lestari

Management Representative

Lead Auditor

Mohamad Pirabaharan

Octo Nainggolan

Monday, 10 June 2013

onday, 10 June 2013


ASSESSMENT REPORT


No Institution/NGO/Community Address Phone/Email Form of Contact

Date of Contact

1 Dinas Perkebunan dan Kehutanan Tanah Bumbu (Tanah Bumbu District of Plantation and Forestry Agency)

Jl. Dharma Praja No. 2 Gunung Tinggi

0518 – 607 6051 / 0518 – 39425 [email protected]

interview 30 April 2013

2 Dinas Sosial Tenaga Kerja Tanah Bumbu (Social Labour Agency of Tanah Bumbu District)

Jl. Dharma Praja No. 4 Gunung Tinggi, Kec. Batu Licin

0518 – 71135 [email protected]


4 Badan Pengelolaan Lingkungan Hidup Daerah Tanah Bumbu (Environment Management Body of Tanah Bumbu District)

Jl. Transmigrasi No. 94 Km. 3,5 72271

[email protected]


4. Smallholder’s Farmers &

Community Leaders Kuranji

Villages

Kuranji Villages -

interview

19 March 2013

5. Smallholder’s Farmers Bekarangan

Villages

Bekarangan Villages -

interview 19 March 2013

6.

KUD Tuwuh Sari

Purwodadi village, subdistrict of Angsana, District Tanah of Bumbu, South Kalimantan.

-

interview 19 March 2013

7. BPD Chairman and Village

Empowement , Bayan Sari Village

Bayan Sari Village

-

interview 1 May 2013

8 Sumpit community South kalimantan - interview 1 May 2013

9 Head of Bunati village Bunati village - interview 1 May 2013

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


ASSESSMENT REPORT


Monday, 29 April 2013

06.00 - 08.00

08.30 - 14.00

15.00 – 15.30

15.30 - 17.30

15.30 – 17.30

Jakarta - Banjarmasin Banjarmasin – PT LSI Opening Meeting Document review: verification nonconformities in surveillance -1 (previous Audit)

ON / MES / SL / MAY / SP





Tuesday, 30 April 2013

08.00 – 12.00

14.00 – 17.00

Public Consultation Agency (BLH, BPN, Disbun, Disnaker) Surrounding Villages . Observation at KKPA 4 Estate

Harvesting, Maintenance (spraying and fertilizing)

Housing, Facilities workers, Hazardous waste management, health facility

Operational Boundary and utilization areas, Conservation Areas Observation at Gunung Sari Estate:

Harvesting, Maintenance (spraying and fertilizing)

Housing, Facilities workers, Hazardous waste management, health facility

Operational Boundary and utilization areas, Conservation Areas Internal stakeholders consultation (Worker union, Gender committee)

ON / SP

MES / SL / MAY

ON / SL / MES

MAY / SP

Wednesday , 1 May 2013

08.00 - 12.00

Field observation Angsana P.O.M

Documentation, workers interview (payment, training, facilities, racial harassment), safe working practices, safety and health equipments, fuel, water usage, process station, waste water treatment plant, workshop, hazardous waste storage and handling,

Public consultation and field observation clarification

ON / SL

MES / MAY / SP

Friday , 3 May 2013

08.00 - 09.00

09.30 - 11.00

12.00 - 17.00

Preparation assessment conclusions results (Noncompliance) Closing Meeting PT LSI - Banjarmasin

ON / SL / MES / MAY / SP

Appendix 2. Assessment Program

DATE 29 April - 3 May 2013

ACTUAL PROGRAM PROCESSES / CLAUSES TO BE AUDITED AUDITOR


ASSESSMENT REPORT


Appendix 3. Glossary

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

APD (PPE) : Alat Pelindungan Diri (Personal Protective Equipment)

ASE : Angsana Estate

ASF : Angsana Factory

B3 : Bahan Beracun dan Berbahaya (Hazardous Material Waste)

BOD : Biological Oxygen Demand

CPO : Crude Palm Oil

CSR : Corporate Social Responsibility

GSE : Gunung Sari Estate

HCV : High Conservation Value (Nilai Konservasi Tinggi)

HGU : Hak Guna Usaha. (Land Use Permit)

IUP : Izin Usaha Perkebunan. (Plantation Operation Licence)

IPAL (WWTP) : Instalasi Pengelolaan Air Limbah (Wastewater 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

KKPA-4 : Full Managed Plasma–4 Estate (PT Sajang Heulang Management)

LC : Land Clearing

LSI : PT Ladangrumpun Suburabadi

MRC : Minamas Research Center

OER : Oil Extarction Rate

P2K3 :

Panitia Pembinaan Keselamatan dan Kesehatan Kerja (Guiding Committee of Occupational Safety & Health)

PBE : Pantai Bontai Estate

PHT (IPM) : Pengendalian Hama Terpadu (Integrated Pest Management)

PK : Palm Kernel

PKS (POM) : Pabrik Kelapa Sawit (Palm Oil Mill)

POME : Palm Oil Mill Effluent

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

RSPO : Roundtable on Sustainable Palm Oil

SIA : Social Impact Assessment

SOP : Standard Operating Procedure

S1 : Surveillance 1

S2 : Surveillance 2

TBS (FFB) : Tandan Buah Segar (Fresh Fruit Bunch)

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