RSPO PRINCIPLES & CRITERIA CERTIFICATION REPORT Public … · 2014-11-02 · GP 7003A Page 12 of 61...

SGS RSPO

(Principles & Criteria)

Doc. Number: GP 7003A

Doc. Version date: 01 April 2013

Page: 1 of 61

SGS RSPO, SGS (Malaysia) Sdn. Bhd., No. 26, Jalan Anggerik Vanilla, 31/93, Kota Kemuning, 40460 Shah Alam, Malaysia CONTACT PERSON: ABDUL HAYE SEMAIL Tel: +6 (03)5121 2320 - Fax: +6 (03)5122 5927

WWW.SGS.COM

RSPO PRINCIPLES & CRITERIA CERTIFICATION REPORT

Public Summary Information

Project Number: MY 02024 Certificate No.: SGS-RSPO/PM-00715

Validity Period: 29/03/2011 – 28/03/2016

Report Ref. No.: MY02024-SOU 24 Hadapan ASA 02 Report

RSPO Membership No.:

1-0008-04-000-00

Client Name:

Sime Darby Plantation Sdn Bhd

Strategic Operating Unit (SOU) 24 - Hadapan

Website: www.simedarbyplantation.com

Scope: Receiving and processing of RSPO certified Fresh Fruit Bunches (FFB) from its supply base, production and sales of RSPO certified Crude Palm Oil (CPO) and Palm Kernel (PK) under Module D (CPO Mill: Segregation) of RSPO Supply Chain and RSPO MY-NI standard.

Type of Certificate Holder:

INDIVIDUAL

Number of Mill: 1 Number of Sites: 1

Mill Capacity: 60MT/hour

Annual CPO Produced (MT): FY2011/12 (Table 3 )

49,115.74 ( Amount FFB processed : 226,992.97 MT )

Address:

Street and number:

Town/City

State/Country

Zip/Postal code

Country

Head Office

Sime Darby Plantation Sdn Bhd

Main Tower, Level 3A, Plantation Tower,

No. 2, PJU 1A/7, Ara Damansara,

47301 Petaling Jaya, Selangor

Tel: 03 7848 4000 Fax: 03 7848 4172

Mill Address

Kilang Kelapa Sawit (KKS) Hadapan,

Batu 6, Jalan Bukit Permai, Bukit Permai,

81850 Layang-Layang, Johor

Tel: + 012 779 2755

Fax: +012 737 4182

Email: [email protected]

Contact Person:

Sabarinah Marzuky

Assistant Vice President I

Tel: +603 7848 4388


Contact Person (Mill Manager):

Name: Abdul Halim Shahor

Position: Mill Manager (Hadapan)

Contact : +6012-6176405


Country: Malaysia

Plantation Unit Being Evaluated:

Supply Base Name & Address

1. Kulai Estate, 81000 Kulai, Johor

2. Seri Pulai Estate, 81000 Kulai, Johor

3. CEP Renggam Estate, 86309 Renggam

4. Layang Estate, 81850 Layang-layang

Total Certified Area (Ha):

11,375.84 Ha

Total FFB Produced (MT):

197,457.19 MT

( Supply Base Estates )

Evaluation Date:

Main Assessment 15th

to 18th December 2008

ASA 01 13th

to 17th February 2012

ASA 02 12th

to 14th March 2013

ASA 03

ASA 04

mailto:[email protected]

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End of Public Summary

TABLE OF CONTENTS

1. SUMMARY ................................................................................................................................................. 3

List of Abbreviation ................................................................................................................................................ 6

2. scope of certification assessment ......................................................................................................... 7

2.1 National Interpretation Used ..................................................................................................................... 7

2.2 Certification Scope .................................................................................................................................... 7

2.3 Location and Maps .................................................................................................................................... 7

2.4 Description of Supply Base and Mill Processing Capacity ...................................................................... 12

2.5 Date of Planting and Cycle ...................................................................................................................... 13

2.6 Other Certification Held ........................................................................................................................... 13

2.7 Organizational Information and Contact Person ..................................................................................... 13

2.8 Time-bound Plan for Other Management Units ....................................................................................... 13

2.9 Area of Plantation.................................................................................................................................... 14

2.10 Date Certificate Issued and Scope of Certificate ................................................................................ 14

3. Assessment Process ............................................................................................................................. 14

3.1 Certification Body .................................................................................................................................... 14

3.2 Assessment Methodology, Programme, Site Visits ................................................................................. 15

3.3 Qualification of Lead Assessor and Assessment Team .......................................................................... 16

3.4 Stakeholder Consultation and List of Stakeholders Contacted ............................................................... 17

4. Assessment Findings ............................................................................................................................ 17

4.1 Summary of Findings .............................................................................................................................. 17

4.2 Corrective Action Request ...................................................................................................................... 48

4.3 Noteworthy Positive & Negative Observation .......................................................................................... 48

4.4 Status of Non-Conformities Previously Identified .................................................................................... 48

4.5 Issues Raised by Stakeholders and Findings ......................................................................................... 48

5. Acknowledgement of Organization Internal Responsibility .............................................................. 48

5.1 Date of Next Surveillance Visit ................................................................................................................ 48

5.2 Date of Closing Non-Conformities ........................................................................................................... 49

5.3 Acknowledgement of Internal Responsibility and Formal Sign-off Assessment Findings........................ 49

APPENDIX A: CORRECTIVE ACTION REQUEST & OBSERVATIONS ............................................................. 50

APPENDIX B: NON-CONFORMITIES PREVIOUSLY IDENTIFIED ..................................................................... 53

APPENDIX C: TIMEBOUND PLAN ....................................................................................................................... 58

APPENDIX D: LIST OF STAKEHOLDERS CONTACTED ................................................................................... 61

LIST OF TABLES

Table 1: Mill and Supply base Estates GPS location ......................................................................................... 7

Table 2 : Area and FFB Production from the Supply base Estates (FY2011/2012) ........................................ 12

Table 3: Mill Processing Data ( FY 2011/2012 ) . ............................................................................................. 12

Table 4: Planting Age Profile for SOU 24 Supply Base Estates ( 2011/12) .................................................... 13

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Table 5: Area Statement SOU 24 Supply Base Estates .................................................................................. 14

Table 6 : Assessment Programme .................................................................................................................... 15

Table 7 : Auditor's Profile ................................................................................................................................... 16

LIST OF FIGURES

Figure 1: Location Map for all the Strategic Operating Unit ( SOU 24 ) in Peninsular Malaysia ....................... 8

Figure 2: Location of SOU 24 and its supply base estates .............................................................................. 10

Figure 3: Regioanl SOU 24 Estates ( Source - Google Map ) ......................................................................... 11

1. SUMMARY

The recent merger of Sime Darby Berhad, Golden Hope Plantations Berhad and Kumpulan Guthrie

Berhad which was completed on November 27, 2007, establishes Sime Darby Plantation Sdn Bhd.

Sime Darby Plantation Sdn Bhd represents one of the five core Divisions of Sime Darby Group and is

involved in the following:-

Oil palm cultivation

Agribusiness & Food

Research & Development

The Plantation Division spans across Peninsular Malaysia, Sabah and Sarawak in Malaysia

and Kalimantan, Sumatera and Sulawesi in Indonesia representing a total of 524,626 hectares of

planted oil palm. The operations involve the management of 208 estates and 65 mills.

The Division’s downstream operations are represented in 15 countries namely: Malaysia,

Singapore, Thailand, Vietnam, Japan, China, Germany, United Kingdom, Bangladesh, South Africa,

United Arab Emirates, The Netherlands, Brazil, Canada and the United States of America.

Alongside oil palm, plantation division is also involved in agri-business activities and cultivation

of rubber. As an integrated oil palm company, Sime Darby Plantation’s business activities cover the

whole spectrum of the value chain. Committed to sustainable development, the Company’s Upstream

and Downstream activities adhere strictly to industry-proven Best Agricultural Practices.

In keeping with the aspiration of making a sustainable future real for everyone, Sime Darby

Plantation Sdn Bhd claims to makes a conscious and concerted effort towards conservation and

protection of the environment, the rehabilitation of forests, protection of wildlife and promotion of the

well-being of the communities in which it operates.

The Strategic Operating Unit, SOU 24- Hadapan comprises of the Hadapan Palm Oil Mill and

four supplying estates , Layang Estate, Seri Pulai Estate, Kulai Estate and CEP Rengam Estate. The

Oil Mill occasionally receive FFB from other Sime Darby Estates e.g. SOU 23 – Ulu Remis.

Below is the 2011/12 organization chart.

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LIST OF ABBREVIATION

Short Form Meanings

CAR Corrective Action Request

CHRA Chemical Health Risk Assessment

CPO Crude Palm Oil

DID Department of Drainage and Irrigation, Malaysia

DOE Department of Environment, Malaysia

EFB Empty Fruit Bunch

EIA Environment Impact Assessment

EMS Environmental Management System

EQA Environmental Quality Act

ERT Endangered, Rare and Threatened species

ESA Environmentally Sensitive Area

FFA Free Fatty Acids

FFB Fresh Fruit Bunches

FR Forest Reserve

Ha Hectare

HCV High Conservation Value

HDPE High Density Polyethylene

IPM Integrated Pest Management

ISO International Organisation for Standardisation

IUCN International Union for Conservation of Nature and Natural Resources

JCC Joint Consultative Committee

JUPEM Jabatan Ukur dan Pemetaan Malaysia (Department of Survey and Mapping Malaysia)

K Potassium

kW Kilowatt

M Meter

Mg Magnesium

Mm Millimeter

Mt Metric ton

MYNI Malaysia National Interpretation

N Nitrogen

NGO Non Governmental Organisation

OA Orang Asli (Indigenous People)

OER Oil Extraction Rate

OSH Occupational Safety & Health

P Phosphate

P & C Principles and Criteria

PK Palm Kernel

POME Palm Oil Mill Effluent

PPE Personal Protective Equipment

SOP Standard Operating Procedures

Sdn Bhd Sendirian Berhad (Private Limited)

SEIA Social and Environment Impact Assessment

Sg Sungai

SGS Societe Generale de Surveillance

SOP Standard Operating Procedures

yr Year

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2. SCOPE OF CERTIFICATION ASSESSMENT

2.1 National Interpretation Used

The operations of the mill and their supply base of FFB were assessed against the Roundtable

on Sustainable Palm Oil (RSPO), Principles and Criteria (P&C) – Malaysia National

Interpretation Working Group (MY-NIWG) Standard, November 2010 and RSPO Supply

Chain Certification Standard, November 2011.

2.2 Certification Scope

The scope of this certification includes the operation of Hadapan Palm Oil Mill and its supply

base as “Receiving and processing of RSPO certified Fresh Fruit Bunches (FFB) from its

supply base, production and sales of RSPO certified Crude Palm Oil (CPO) and Palm

Kernel (PK) under Module D (CPO Mill: Segregation) of RSPO Supply Chain and RSPO

MY-NI Standard”.

2.3 Location and Maps

Hadapan Palm Oil Mill is operating and located in Layang-Layang, Johor, Malaysia (Figure

1). The mill is grouped under one strategic operating unit, SOU 24 with four (4) supplying

estates which is directly managed by Sime Darby Plantation Sdn. Bhd. More detailed

information on the estates location and layouts is shown in Figures 2, 3 and 4. The GPS

locations of the mills are shown in Table 1.

Table 1: Mill and Supply base Estates GPS location

Mill/Supply Base Longitude Latitude

Hadapan Palm Oil Mill N 1.80853 E 103.45424

Layang Estate N 1.78659 E 103.458

Seri Pulai Estate N 1.60343 E 103.497

Kulai Estate N 1.63153 E 103.536

CEP Renggam Estate N 1.87194 E 103.38

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Figure 1: Location Map for all the Strategic Operating Unit ,SOUs, in Peninsular Malaysia

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Figure 2: Location of SOU 24 and its supply base estates

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Figure 3: Regional SOU 24 Estates ( Source - Google Map )

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2.4 Description of Supply Base and Mill Processing Capacity

The FFB is sourced from four (4) estates which are directly managed by Sime Darby

Plantation Sdn. Bhd under Strategic Operating Unit (SOU) 24. The actual crop figures from

each estate in the financial year 2011/2012 are listed in Table 2 below.

Table 2 : Area and FFB Production from the Supply base Estates (FY2011/2012)

Name of estate

Plantation area Annual FFB Production

(MT)

Title area Immature

Production (ha)

Conservation/HCV (ha)

*Others

Layang Estate

3,116.8

184.67 2,586.51 26.02 319.6 44,117.62

Seri Pulai Estate

2,101.02

95.62 1,819.64 91.62 94.14 45,145.47

Kulai / Kelan Estate

3,064.64 575.60 2,173.46 73.32 242.26 47,444.28

CEP Rengam

3,093.38

198.68 2,689.39 28.63 176.68 60,749.82

Total

11,375.84 1,054.57 9,269.00 219.59 832.68 197,457.20

*Others : TNB Rentice, Road, line site, office etc

Table 3 below shows the mill production figures for FY2011/2012. The mill is receiving FFB

from SOU 24 and from other SOUs which are directly managed by Sime Darby Plantation Sdn

Bhd which are also certified under RSPO scheme. Receiving of FFB from out growers (Kwong

Yak Hong and Choon Guan Oil) has been discontinued since June 2012.

Table 3: Mill Processing Data ( FY 2011/2012 ) .

Financial Year

(FY11/12)

Mill Production Figures (MT)

FFBs Received FFBs Processed CPOs Produced PKs Produced

Hadapan Palm Oil Mill 226,892.97 226,992.97 49,115.74 12,663.93

OER : 21.63% KER: 5.58%

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2.5 Date of Planting and Cycle

SOU 24, Hadapan, Sime Darby Plantation Sdn Bhd estates age profiles are summarized as

12.15% immature palms, 86.71% mature palms and 1.03% tall palms which is only available

in Hadapan Estate. A replanting program for all estates involved are available and being

projected for the next five (5) financial years (FY11/12 to FY15/16). The age profiles for all the

estates are summarized in Table 4 below.

Table 4: Planting Age Profile for SOU 24 Supply Base Estates (2011/12)

Name of supplying

estate

Planting Age (Ha)

Immature >4 - 14 years >14 - 25 years >25 years

Layang Estate 184.67 2,316.31 270.20 0

Seri Pulai Estate 95.62 1,010.95 808.69 0

Kulai / Kelan Estate 575.60 1,077.88 1,007.13 88.45

CEP Rengam 198.68 1,113.92 1,561.85 13.62

Total 1,054.57 5,519.06 3,647.87 102.07

2.6 Other Certification Held

During the audit, Sime Darby Plantation Sdn Bhd Strategic Operating Unit 24 (SOU 24)

currently is being certified under RSPO and ISCC schemes.

2.7 Organizational Information and Contact Person

The company contact person details are as follows:

Name: Abdul Halim Shohor

Designation: Mill Manager

Address: Batu 6, Jalan Bukit Permai, Bukit Permai,

81850 Layang-Layang, Johor

Contact No.: +6012-6176405

+6012-7792755

Email address: [email protected]

2.8 Time-bound Plan for Other Management Units

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Sime Darby Plantation Sdn Bhd is a member of RSPO and has been involved in the

certification since 7 September 2004. The membership number with RSPO is 1-0008-04-000-

00.

Sime Darby Plantation Sdn Bhd owns and operates with 62 strategic operating units covering

approximately 521,924 ha in Malaysia and Indonesia. They have developed a time-bound plan

(Appendix C) for the phased implementation of the RSPO P&C, commencing with mills and

estates. Sime Darby Plantation Sdn Bhd will use the experience gained from achieving

certification of the first few mills and estates to implement the RSPO P&C in parallel with the

remainder of its operations. The SGS assessment team considers that Sime Darby Plantation

Sdn Bhd is on the right track which is reasonable and challenging, given the widespread

geographic locations of its properties, the resources required and the numbers of smallholders

involved.

2.9 Area of Plantation

The areas of supplying estates for this operating unit are listed in Table 5. Details of production

area (mature/immature) are also listed.

Table 5: Area Statement SOU 24 Supply Base Estates

Name of supplying estate

Estates Area (Ha)

Immature Mature Area Non-Cultivated Total (Ha)

Layang Estate 184.67 2,586.51 345.62

3,116.8

Seri Pulai Estate 95.62 1,819.64 185.76

2,101.02

Kulai / Kelan Estate 575.60 2,173.46 315.58

3,064.64

CEP Rengam 198.68 2,689.39 205.31

3,093.38

Total 1,054.57 9,269.00

1,052.27

11,375.84

2.10 Date Certificate Issued and Scope of Certificate

The certificate issue date is the date of RSPO approval of this assessment report. This

certification scope is “Receiving and processing of RSPO certified Fresh Fruit Bunches (FFB)

from its supply base, production and sales of RSPO certified Crude Palm Oil (CPO) and Palm

Kernel (PK) under Module D (CPO Mill: Segregation) of RSPO Supply Chain and RSPO MY-NI

Standard”.

3. ASSESSMENT PROCESS

3.1 Certification Body

Founded in 1878, the SGS Group is the world’s largest auditing, inspection, testing and

verification organization. Truly global and benefiting from unique international network of more

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than 1,180 offices, 321 laboratories and 70,000 full time staff, the SGS Group is able to provide

its international clientele with a comprehensive range of services in more than 145 countries.

SGS has no manufacturing, trading or financial interests which could compromise its

independence. Its guarantee of independence, its reputation for professionalism, integrity and

impartiality, as well as it remarkable international network, place the SGS Group in a unique

position.

The RSPO Programme is the SGS Group’s RSPO Certification Programme internationally

accredited by the RSPO Executive Board to carry out oil palm plantation and supply chain

certification/verification and accreditation for global RSPO certification.

3.2 Assessment Methodology, Programme, Site Visits

The assessment was conducted in three audit days and involving two sampled estates

(Layang and Seri Pulai Estate) of SOU 24, Hadapan, Sime Darby Plantation Sdn Bhd. The

audit covers documentation review, internal procedures, management system, field inspection

as well as identification of any significant issues for both environment or social issues.

The assessment was conducted based on random samples and therefore nonconformities may

exist which have not been identified. The methodology for objective evidence collection

included physical site inspection, observation of tasks and processes, interview with workers,

families and stakeholders, documentation review and monitoring data. The assessment

program is included as shown in Table 6 below.

Table 6 : Assessment Programme

Date Location Activities

12th

Mar 2013 Hadapan POM Meeting Room

Opening Meeting by SGS

Presentation of previous CAR closure

Layang Estate (Hadapan Division)

Good Agricultural Practices

Boundary Stone

Buffer Zone

Storage facilities

Landfills

Layang Estate (Layang Division)

Documentation Review

Storage Facilities

Safety

Social (interview with workers)

Hadapan POM Meeting Room


Supply Chain Audit

Recaps on findings of Day 1

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13th

Mar 2013 Seri Pulai Estate Meeting Room


Good Agricultural Practices

High Conservation Value

Boundary Stone

Social (Interview with workers)

Nursery

Storage facilities

Landfill

Recaps on findings of Day 2

14th

Mar 2013 Layang Estate (Layang Division)

Continue on Documentation Review

Linesite / Facilities

Hadapan POM Meeting Room

Composting Plant

Storage facilities

Waste Management

Closing Meeting by SGS

Presentation of audit findings and CAR raised

3.3 Qualification of Lead Assessor and Assessment Team

SGS Malaysia Sdn Bhd holds copies of educational qualifications, certificates and audit logs for

each of the audit team members. SGS has evaluated the qualifications and experience of each

audit team member and has registered the following designations for conducting RSPO

Assessment. Summary of auditors’ educational background and experience are listed in Table

7 below.

Table 7 : Auditor's Profile

Evaluation Team Notes

Lead Auditor James Ong, a Bachelor of Agriculture Science holder and agronomist in SGS (M) Sdn Bhd. He has many years working experience in agriculture sector in Malaysia and has been working in estates as well in the agrochemical and fertilizer industry. He is well versed with agrochemical and fertilizer applications. Has undergone ISO 14001 and RSPO Lead Auditor training and involved in a number audits on oil palm plantations.

Auditor Mohd Faisal Jaafar is a degree holder in forestry from Universiti Putra Malaysia. Faisal has a 7 years experience in operating Malaysian Timber Certification Scheme with specialization in forest management certification and forest plantation management certification. Has undergone the necessary ISO 9000 Lead Auditor course and has gathered substantial auditing experience pertaining to forest certification.

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Trainee Auditor Muhammad Shazaley Abdullah, a graduate in Bachelor of Forestry Science, is a Trainee Auditor for Roundtable on Sustainable Palm Oil (RSPO). He has attended an awareness training of RSPO and currently undergoing training session as an auditor in future to serve the industry well.

3.4 Stakeholder Consultation and List of Stakeholders Contacted

This is Annual Surveillance Audit 02, hence no stakeholder’s consultation conducted. However,

some of the stakeholders met during the visit were interviewed and no issues raised regarding

the performance of SOU 24, Hadapan.

4. ASSESSMENT FINDINGS

4.1 Summary of Findings

4.1.1 Principles & Criteria

As outlined, objective evidence was obtained separately for each of the RSPO Indicators and criterion

for the mills and estates. The results for each indicator from each of the operational areas were

evaluated to provide an assessment of conformity. A statement is provided for each of the RSPO

indicators in order to support the findings of the assessment team.

There is 0 Major Non-conformities and 3 Minor Non-conformities identified during this assessment.

Some areas identified with potential areas for improvement has leaded into 5 Observations raised.

Details for each Non-conformities and observations are given in Appendix C. Major Non-conformities

has been closed out within the period of 60 days after the assessment. Minor Non-compliances and

Observations will be followed up during the next Annual Surveillance Audit which is scheduled to be

conducted within the period of twelve months after RSPO approval of this report.

Principle 1: Commitment to Transparency

Criterion 1.1: Oil palm growers and millers provide adequate information to other stakeholders on environmental, social and legal issues relevant to RSPO Criteria, in appropriate language & forms to allow for effective participation in decision making.

1.1.1 Records of requests and responses must be maintained. Major

Findings In compliance: Yes: X No:

Objective evidence:

There is no request for information from stakeholders yet received by the estate. However, record of stakeholder meeting is available. Latest meeting with stakeholder conducted on 8

th March 2013.

A minute of previous meeting on 7th April 2012 is available and the approach is according to the SOP dated November 2008. Records and communication log was recorded in file named Principle 1: Commitment to Transparency.

Criterion 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

1.2.1 Land titles / user rights (C 2.2)


Objective evidence:

Land titles for Land title for Layang Estate is maintained with total land titles area 3,108.08ha with 13 different land title numbers. Records of Land Tax Payment for 2012 are made available. The record was maintained and readily accessible in file Principle 1: Commitment to Transparency

Evidence of land titles for Seri Pulai Estate with total area of 2,100.9860Ha is available. All the

land titles are meant for palm oil plantings. List of the land titles for Seri Pulai estate are as follows:

Land Title No. Area (Ha)

GN 00319647 55.6914

GN 00238102 52.7689

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GN 00326459 165.0105

GN 00326460 38.0657

GN 00326461 1,417.5809

GN 00326462 370.4897

GN 00238097 1.3784

Total 2,100.9860

1.2.2 Safety and health plan (C 4.7)


Objective evidence:

Sime Darby has a policy on the implementation of OSHA and published publicly in their website. Layang estate has appointed a safety committee and the meeting will be conducted every three months. An organization chart of safety committee FY2013 is available.

An updated Environment, Safety and Helath Plan for Layang estate are available and approved by Mr. Mohd Idzaruddin Hassan (Estate Manager). The plan covers:

a) ESH Risk Management

b) Incident Reporting

c) Chemical Safety Management

d) Vehicle & Machinery Safety Management

Seri Pulai estate has prepare a training matrix and programme for OSHA. Training calendar FY2012/2013 and records is available. Latest training on safety (Fire Fighting) conducted on 26

th

January 2013.

1.2.3 Plans and impact assessment relating to environmental and social impacts

(C 5.1, 6.1, 7.1, 7.3)


Objective evidence:

Environmental Aspect and Impact Identification form for Layang and Seri Pulai estate is updated FY 2012/2013. Examples of environmental aspect and impact assessed are:

Main Entrance

Compound (Grass Cutting, Herbicide Spraying)

Harvesting and Collection

Pest and Diseases Control

Road Maintenance (Grading, Re-surfacing)

FFB Transportation (FFB Stacking, Net Fixing and Sealing, FFB Loading)

Weeding and Spraying (Maintenance Spraying Equipment, Selective weeding)

Road Maintenance (Re-Surfacing, Grading)

1.2.4 Pollution Prevention Plan (C 5.6)


Objective evidence:

Pollution Prevention Plan (PPP) for FY 12/13 is available and updated in in Layang and Seri Pulai estate. The PPP includes:

a) Leakage of pesticides during mixing and washing into outside land.

b) Unavailable/Leakage/Clogged of oil sump for workshop.

c) Empty chemical container/schedule waste.

Pollution prevention plan also identified possible environment issue, mitigating measures ans responsible person.

1.2.5 Details of complaints and Grievances (C 6.3)

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Objective evidence:

Procedure is available as in Appendix 5: Sustainability Plantation Management System, Flowchart and Procedure on Handling Social Issues dated 1 November 2008.

The procedures are also publicly available at the company website as follow:

- http://www.simedarbyplantation.com/Negotiation_Procedures.aspx

1.2.6 Negotiation procedures (C 6.4)


Objective evidence:

Procedure is available as in Appendix 5: Sustainability Plantation Management System, Flowchart and Procedure on Handling Social Issues dated 1 November 2008.

The procedures are also publicly available at the company website as follow:

- http://www.simedarbyplantation.com/Negotiation_Procedures.aspx

1.2.7 Continuous improvement plan (C 8.1)


Objective evidence:

Budget allocation for social and environment responsibility is available as located in FY2012/2013 Budget for Layang estate. An action plan for Social Assessment FY12/13 is updated includes:

a) Problem regarding road access to smallholders.

b) Dusty road due to FFB transportation/cars/motorcycles.

c) Organize more social activities for workers.

Records of road maintenance are available and updated accordingly as evidence in Road Upkeep Program FY2012/2013. A map of road used by smallholder is available.

Principle 2: Compliance with Applicable Laws and Regulation

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

2.1.1 Evidence of compliance with legal requirements Major


Objective evidence:

Both estates have compiled a list of Legal and Other Requirements Register (LORR). The list was updated and approved by Mr. Azam Abdullah on January 2013. The list covers legal requirements such as:

a) OSHA

b) Environmental Quality Act 1974

c) Factories and Machineries Act

d) Pesticides Act & Regulations

e) Biological Diversity

f) Employment Act

All necessary renewable permits pertaining to crop production and milling are in place and displayed in the form of certificates in the estates and mill. Legal requirements for machinery maintenance and power generation have also been complied with. Workers health requirements and pesticide regulations have also been fulfilled. Related legal requirement available are as below:

a) Department of Environment (DOE) license No. 002167 Mill License under Section 18(1) till 30 Jun 2013.

b) MPOB license number 510425004000 is valid from 1 March 2013 – 28 February 2014 for processing of 210,000 FFB / year.

2.1.2 A documented system, which includes written information on legal requirements Minor


Objective Evidence of documented system, which includes written information on legal requirements. Sime

http://www.simedarbyplantation.com/Negotiation_Procedures.aspx

http://www.simedarbyplantation.com/Negotiation_Procedures.aspx

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evidence: Darby subscribes to free service for amendments updates from publishers. All relevant laws and regulations are compiled in the register of legal document - QSHE/04/5.2.4 and are made available to the auditor during the audit.

2.1.3 A mechanism for ensuring that they are implemented Minor


Objective evidence:

Mechanism for ensuring that they are implemented is available. A mechanism to ensure compliance of law is documented in Agricultural Reference Manual (ARM) which has been distributed to the SOU and is implemented throughout the Mill as well as the four estates.

2.1.4 A system for tracking any changes in the law Minor


Objective evidence:

A system for tracking any changes in the law is available. Sime Darby has developed procedures for tracking any changes in laws. Document Standard Operating Manual 5.2 (5.2.4a) assigns responsibility for observing changes of law. As reflected in the document, the management of estate and mill is required to ensure that all applicable legal requirements and other requirements to which the company is subscribe are taken into account that includes monitoring the changes of the subscribed laws and regulations.

The company also subscribes to service for updated law books from publishers, and receives information on relevant legal amendments from Malaysian Agricultural Plantation Association.

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

2.2.1 Evidence of legal ownership of the land including history of land tenure Major


Objective evidence:

The estates within SOU24 comprise of many separate land titles. Copies of the relevant documents are available at each estate. As evidence of compliance with the terms of the land title, records of annual payment of the tax etc. are kept by each estate. Copies of land titles and payment of quit rent are available. The list of land titles are as follow:

Land Title (Layang Estate) Land Title (Seri Pulai Estate)

HS(D)00000029 GN 00319647

GN 00291420 GN 00238102

GN 00087677 GN 00326459

GN 00086438 GN 00326460

GN 00095500 GN 00326461

GN 00087146 GN 00326462

GN 00087131 GN 00238097

2.2.2 Growers must show that they comply with the terms of the land title. [This indicator is to be read with Guidance 2]

Major


Objective evidence:

All land titles (Borang 5BK) for both Seri Pulai and Layang estate are specifically meant only for palm oil planting purposes.

2.2.3 Evidence that boundary stones along the perimeter adjacent to state land and other reserves are being located and visibly maintained

Minor


Objective Site visit in Seri Pulai estate show an evidence of boundary stone is maintained and clearly visible in field P 92. A map of Boundary Stone location is also available which indicates their locations in

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evidence: field P89 (Replanting), P05, P90 and P92.

2.2.4 Where there are, or have been, disputes, proof of resolution or progress towards resolution by conflict resolution processes acceptable to all parties are implemented. (CF 2.3.3, 6.4.1 and 6.4.2)

Minor


Objective evidence:

There is no dispute reported at the time of audit. SOU 24 estates is bordering with other Sime Darby Plantation estate under SOU 24.

Criterion 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.

2.3.1 Where lands are encumbered by customary rights, participatory mapping should be conducted to construct maps that show the extent of these rights.

Major


Objective evidence:

There is no dispute reported at the time of audit.

2.3.2 Map of appropriate scale showing extent of claims under dispute Major


Objective evidence:

There is no dispute reported at the time of audit.

2.3.3 Copies of negotiated agreements detailing process of consent (C 2.2, 7.5, 7.6) Minor


Objective evidence:

There is no dispute reported at the time of audit. However, the procedure for negotiation is made publicly available in the company website at:

http://www.simedarbyplantation.com/Boundary_Disputes_.aspx

Principle 3: Commitment to Long-Term Economic and Financial Viability

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

3.1.1 Annual budget with a minimum of 2 years of projection Major


Objective evidence:

Annual budget for 5 years cost comparison available in Report E11.0: Estate Cost. The report was kept in file Principle 3: Commitment to long term economic and financial viability. Annual

budget for Seri Pulai estate is available. Cost per hectare budgeted for year 2013/2014 are RM 5,014.55 an increase from previous year which is only RM 4,641.91. A summary and detailed budget for five years is evidence to the auditors during the audit and can be referred to MPlan 2013/2014 Budget-Summary Cost for Seri Pulai Estate.

3.1.2 Annual replanting programme projected for a minimum 5 years with yearly review Minor


Objective evidence:

Replanting programme is available for all individual estates. A minimum 5 year replanting programme is available for all estates. Latest replanting activities held in Layang Estate is Field 2011 and next replanting will be in 2013 in Hadapan Division.

Seri Pulai estate is currently having a replanting site on Field 1989 with total area hectarage of 95.62ha. Next replanting in Seri Pulai estate will be on Field 1990 with area total area hectarage of 180.86ha and will be conducted in FY2014/2015.


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Principle 4: Use of Appropriate Best Practices by Growers and Millers

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

4.1.1 Documented Standard Operating Procedures (SOP) for estates and mills Major


Objective evidence:

Evidence of documented procedure is available during the audit. The Agricultural Reference Manual (ARM) for Oil Palm estates is available and issued on 1 July 2011. A procedure for Plantation Quality Management System is also available dated 1 November 2008 which contains the procedure for:

a) Policy and Objectives

b) Organizational Structure

c) Documentation and Communication

d) General Information (Land use, History, Location)

e) Planning

f) Quality, Safety & Health and Environmental Management

g) Implementation and Control

The unit will follow the following documentation as their SOP:

a) Agricultural Reference Manual – Guideline for work

b) Standard Operating Manual

c) EQMS Standard Operation Procedure

d) Sustainable Plantation Management System

e) Pictorial Safety Standard

These copies were marked as the ‘Control Copy’. Separate copies are reported to be accessible by estate staff. Copies of relevant sections were seen posted at workstations. The SOPs are currently available in English, with some sections available in Bahasa Malaysia

Hadapan Palm Oil Mill is operating based on Mill Quality Management System (SOP and Manual) dated 1 November 2008. The SOP explains the details of processes involved in mills daily operation such as:

a) Reception Station (Weighbridge, Loading Ramp, FFB Conveyor, Fruit Cages, Locomotive)

b) Fruit Handling Station (Tipper, Vehicles)

c) Sterilization Station (Sterilizer, Railway Line, Trolley Bridge)

d) Threshing Station (EFB Conveyor, FFB/EFB Elevator, EFB Ramp)

e) Pressing Station (Digester, Screw Press, Vibrating Screen, Crude Oil Pump)

f) Clarification Station (Sludge Tank, Vacuum Dryers, Centrifuges)

g) Depericarping Station (Cake Breaker Conveyors, Nut Polishing Drums, Fibre Cyclone)

h) Kernel Recovery Station

i) Boiler Station

j) Product Storage and Despatch (CPO Storage Tank, Flowmeter, Despatch Conveyor)

k) Laboratory

l) Water Treatment Plant (Water catchment, Overhead Water Tank, Softeners)

m) Effluent Treatment Plant (Cooling Pond, Digester Tank, Aerobic and An-aerobic)

n) Workshop and Maintenance (Welding Set, Lathe Machine)

4.1.2 Records of monitoring and the actions taken are maintained and kept for a minimum of 12 months

Minor


Objective evidence:

A report of Plantation Advisor audit is available in Plantation Adviser Report No. 01/11-12. The report contains recommendations to improve the yield in the planting field. The visit has been conducted by PA on 7-11 May 2012 by Zainuddin Sukur. Records of monitoring for pesticides and fertilizer application are available in monthly stock record.

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

4.2.1 Monitoring of fertilizer inputs through annual fertilizer recommendations Minor


Objective evidence:

Agronomic and fertilizer report is prepared by Sime Darby Research Sdn. Bhd. Fertilizer recommendations made are based on palm nutritional status resulting from foliar analysis. Observed during the audit, the record of agronomic and fertilizer application and recommendation for 2013 is available for Seri Pulai and Layang estate is available.

Information of field number, soil series and recommended fertilizer rate are listed in the report. In example, field OP02A of Layang estate was recommended to apply with 1.5kg CIRP in October 2012. In Seri Pulai estate, application of CIRP 1.5 kg per palm for palms planted 2002 was followed as per recommendation.

4.2.2 Evidence of periodic tissue and soil sampling to monitor changes in nutrient status Minor


Objective evidence:

Summary of leaf Nutritional status available in “Seri Pulai 2012/13 Agronomic & Fertilizer Recommendation report”. Foliar analysis is conducted twice a year by Sime Darby agronomist. Latest for foliar analysis report for Layang estate is dated 24

th May 2012.

Latest soil sampling conducted in Layang Estate is on 29 April 2010. In practice, the soil sampling is conducted by the R&D Division of the Sime Darby Plantation on estate by estate basis. The procedure in conducting the soil sampling analysis is stipulated in the Section 4 of the Sustainable

Plantation Management System. The unit has submitted an application to the Plantation Research and Advisory since last year after the surveillance audit for a request to do a soil sampling analysis.

4.2.3 Monitor the area on which EFB, POME and zero-burn replanting is applied Minor


Objective evidence:

Section 8, Subsection 3.2: EFB Application and Subsection 3.3: POME Application in Sime Darby Agricultural Reference Manual are encouraging the application of EFB and POME in

land. There is no application of POME in Layang estate. Monitoring of EFB application was recorded in “EFB Daily Record” book and latest application done on 1 February 2013.

Criterion 4.3: Practices minimize and control erosion and degradation of soils.

4.3.1 Documented evidence of practices minimizing soil erosion and degradation (including maps)

Minor


Objective evidence:

The estates are practicing according to procedure stated in Sime Darby Agricultural Reference Manual (ARM) date 1 July 2011. Section 17: Leguminous Cover Crop Establishment explains the method of planting cover crop such as Pueraria Javanica, Calopogonium mucunoides and Mucuna Bracteata. Section 4: Land Preparation explains the method of terrace construction in

order to minimize soil erosion. Slope and contour map is for Layang estate indicates that there is no steep slope (>25 degree) area in the estate. The practices of minimizing soil erosion are conducted such as terracing and silt pit construction.

4.3.2 Avoid or minimize bare or exposed soil within estates Minor


Objective evidence:

There is no evidence bare or exposed soils observed throughout Seri Pulai and Layang estate during the field visit. There is also no evidence of spraying along the road side as well as the buffer zone. Soft grasses and ferns are maintained in the area to prevent soil erosion.

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Section 17, Subsection 1: General Information and Justification for Establishment of Legumes in Sime Darby Agriculture Reference Manual has specified that there should not be any area of exposed or bare soils in the estate by planting legume cover crop such as Pueraria Javanica, Mucuna Bracteata, Calopogonium mucunoides and Calopogonium caeruleoum.

4.3.3 Presence of road maintenance programme Minor


Objective evidence:

Road Upkeep Program FY12/13 is available. Both divisions are included in the road maintenance program, however, the implementation are a bit delay in December 2012 and January 2013 due to high rainfall season. Observed during the audit, road maintenance program for FY2012/2013 includes the following activities:

New and desilting silt pit

Road side pruning

Road grading

Patching pot hole

Road upkeep and resurfacing

Bridges upkeep and repair

Fixing new and repair culverts

A total of RM 177,398.00 is allocated for road maintenance. As per November 2012, an amount of RM 29,966.00 already spent.

4.3.4 Subsidence of peat soils should be minimized through an effective and documented water management programme

Minor


Objective evidence:

Approximately 10% of the area in Seri Pulai estate is deep peat. The action plan to manage those areas is available and the management is familiar with the requirements of peat management. The unit follows the Agriculture Reference manual on Land preparation for Peat Planting (Version 1 July 2011) and the SOP manual on Felling and Land preparation.

It includes the construction of the pre-lining for CECT (close-end conservation trenches) and its subsidiary drains to maintain the water level. Water level monitoring is being undertaken.

4.3.5 Best management practices should be in place for other fragile and problem soils (e.g. sandy, low organic matter and acid sulphate soils)

Minor


Objective evidence:

The unit follows the Agriculture Reference manual on Land preparation for Peat Planting (Version 1 July 2011) and the SOP manual on Felling and Land preparation. It includes the construction of the pre-lining for CECT (close-end conservation trenches) and its subsidiary drains to maintain the water level. Water level monitoring is being undertaken. Peat areas are identified in the estate soil map.

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

4.4.1 Protection of water courses and wetlands, including maintaining and restoring appropriate riparian buffer zones at or before replanting along all natural waterways within the estate.

Major

Findings In compliance: Yes: No: X

Objective evidence:

Sime Darby has a policy on Slope and River Protection Policy dated April 2011 and signed by Executive Vice President. The policy stated the buffer zone required to maintain as follows:

River Width

>3m <5m 5-10m 11-20m 21-40m >40m

Buffer Zone

20m 5m 10m 20m 40m 50m

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Observation 01

Buffer zones maintained along the natural waterways. There was some slight spraying of woodys along the slope along the culvert at F03-02 (Seri Pulai). Evidence of spraying was observed within the conservation area which included a water source (Hadapan Estate Nature Conservation Area).

4.4.2 No construction of bunds/weirs/dams across the main rivers or waterways passing through an estate

Major


Objective evidence:

No evidence on construction of bunds/weirs/dams across the main rivers or waterways passing through an estate. Visit during the surveillance visit evident that no construction of bunds, weirs and dams were observed in the estates. All provisions stipulated in the Department of Irrigation and Drainage (DID) is fulfilled.

4.4.3 Outgoing water into main natural waterways should be monitored at a frequency that reflects the estates and mills current activities which may have negative impacts (Cross reference to 5.1 and 8.1)

Major


Objective evidence:

Seri Pulai and Layang estate does monitor water quality flowing through the estate. Sampling points are available in water Hydrology Map. Both the treated water and the natural waterways water are analysed.

Seri Pulai estate is collecting water from Sg Gunung Pulai and treated before distribution. Treated water is monitored to conform to INWQS Class1 and natural water ways is monitored to conform to INWQS Class IIA, IIB. The water is analyzed every three month by Sime Darby Research Lab.

4.4.4 Monitoring rainfall data for proper water management Minor


Objective evidence:

Section 18: Rainfall Recording in Sime Darby Agricultural Reference Manual, Version 3 (1 July 2011) clearly describe the rainfall data collection procedure. Records of rainfall data is

available and recorded daily. Records from last financial year are available.

4.4.5 Monitoring of water usage in mills (tonnage water use/tonne FFB processed) Minor


Objective evidence:

The water usage is monitored on a monthly basis under the water management plan that is classified according to the following usage:

Mill – total to overhead tank, processing, steriliser station, fire house, boiler station.

Linesite – domestic usage

Composite plant – plant usage

Water usage for every tonne FFB processed is also monitored on a monthly basis and captured in the Form A of the Monthly Mill Environment Compliance and Performance Monitoring Document. The flow meter was replaced in August 2012 to monitor the water usage. The usage of water after August 2012 ranges from 1.14 -1.41 m

3/FFB. The water usage including of Processing (Mill

process, Sterilizer, Boiler) and domestic usage.

4.4.6 Water drainage into protected areas is avoided wherever possible. Appropriate mitigating measures will be implemented following consultation with relevant stakeholders.

Minor


Objective evidence:

All water usage in the estates is monitored and recycled where possible to be reused in other application such in the workshop. Used water channelled out from estates is filtered using water filter and oil trap before been channelled to the nearby pond or water stream.

Any complaints from stakeholders received with regard to the water quality in the main stream are

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recorded in complaints log book. Each of the complaints received from the stakeholder is addressed using the Appendix 5: Flowchart and Procedure of Handling Social Issues of the Sustainable Plantation Management System Document. A mitigation measures is subsequently scheduled and conducted through the usage of the Appendix 5.4.1a: Hazard Identification, Risk Assessment and Determining Controls (HIRADC) Procedure of the

Standard Operating Manual (SOM) of the Estates Quality Management System.

4.4.7 Evidence of water management plans Minor


Objective evidence:

Water management plan for 2012/13 is available in the QHSE Objective Management Program and Action Plan. The plan includes:

Reduction of water usage for financial year 2012/2013

Contingency Plan During Water Shortage for financial year 2012/2013

Water usage for monthly basis for financial year 2012/2013

Seri Pulai estate is collecting water from Sg. Gunung Pulai and treated before distribution. Treated water is monitored to conform to INWQS Class1 and natural water ways is monitored to conform to INWQS Class IIA, IIB. The water is analyzed every three month by Sime Darby Research Lab.

Minor CAR 38

However some of the parameters for domestic water usage like coliform analysis are not tested. The chloride content for both the local and outside test was above the recommended. In February 2013, tested chloride of 49 – 51 mg/l and the COD is 12 – 24 mg/l which is above than the recommended.

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

4.5.1 Documented IPM system Minor


Objective evidence:

Documented IPM system is available in both estates. IPM system is integrated into the Agricultural Reference Manual (ARM) which is disseminated to all estates. The latest version of the ARM is available and inspected. Observed that the IPM is incorporated in the ARM in Section 15: Plant Protection that covers the following items:

Occurrence of Rhino beetle in Young Oil Palm

Chemical Control of Common Oil Palm Pests

Bagworm and Nettle Caterpillar Control

Use of Beneficial Plants for Natural Control of Oil Palm Leaf Pests

Control of Rats in Oil Palm

Barn Owls for biological control of rats in oil palm

Control of basal and upper stem rot

Certification of best practices towards minimizing ganoderma inoculum in replants

Use of arbuscular mychorrizal fungi for management of ganoderma basal stem rot

Chemical control on termite infestation

Section 16: Weeds Control indicates the procedure of implementation for the following items:

General weed control

VOPs eradication and general weed control in first year oil palm

Avoiding herbicide contamination of oil palm

In all the estates evaluated, elements of IPM have been observed. Pest and weed infestation is recorded as minimal in these estates. The introduction of biological control is being promoted and the use of Barn Owls for rat control is also being investigated. Some attempt has been made to establish beneficial predator and parasitoid host plants e.g. Tunera subulata, Cassia cobannensis and Antigonon leptopus.

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4.5.2 Monitoring extent of IPM implementation for major pests Minor


Objective evidence:

The implementation of IPM is monitored on a Monthly basis. Observed the following IPM implementation at the visited estates:

a) Barn Owl nest are build to increase the population of barn owl for the control rat population. Ref : Preventive Action Report – barn owl location

b) Monitoring census records for 2008 to 2012 in Seri Pulai is available as below:

i. Barn Owl Census: Aug 2012 Census - No. of Boxes , eggs, chicks and adults are recorded in the ‘Barn owl Census Form ‘

ii. Ref: Rat Bait Records: During low rat population, SOU 24 would practice ‘Calendar Baiting’. Rat Bait application is monitored and recorded. When the uptake falls below 20%, the baiting application will cease.

iii. Ref: Ganoderma Census files. Ganoderma census to control the occurrence of ganoderma at matured trees. The records are observed to be captured on block by block basis. Monitoring records for 2008 to 2012 (up to March 2012) is available; done annually. Census categorises the severity of the infection. The highest infected area has an infection of 0.42% (1989 planting – which has since been felled).

iv. Beneficial plant planting is also recorded.

c) Monitoring of IPM implementation is available as below:

i. Rhinocerous Beetle census records available. Uses Pheromone traps to monitor population. Cypermethrin spray use to protect the young palms.

Minor CAR 39

ii. Bagworm census records are available. However, records of threshold reached and comments from estate management for the application of chemical is lacking. The application of Cypermetrin is using mist blowing. Records on usage of cypermethrin for bag worm campaign are available in the stock card as evidence the last application in July 2012.

4.5.3 Recording areas where pesticides have been used Minor


Objective evidence:

Pesticides usage on each of the oil palm areas/blocks is captured in the work programme document that describes intensity, type and amount of the pesticide applied to the particular oil palm areas/blocks in the costing file including chemical cost, labour cost and cost per ha.

4.5.4 Monitoring of pesticide usage units per hectare or per ton crop e.g. total quantity of active ingredients (a.i) used/tone of oil

Minor


Objective evidence:

Monitoring of pesticides usage for units per hectare or per ton crop is recorded in the Table of Monitoring Pesticide Usage per Hectare per Ton FFB Production. Data is recorded based on the type of pesticides used and recorded on a monthly basis. Observed during the audit the records for year 2011/2012 that is available.

Observation 02

Updated pesticide monitoring is lacking as available records only up to 2011 (Seri Pulai)

Some pesticides like rat baits usage were not captured in the monitoring documents usage and units of the chemical used were wrong (kg used instead of grams) (Layang Estate).

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

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4.6.1 Written justification in Standard Operating Procedures (SOP) of all agrochemical use

Major


Objective evidence:

Usage of agrochemical is described in the Section A10: Weeding and Section B3: Weeding/Spraying of the Standard Operating Procedures of the estates. The procedure

describes the function/justification and methods of applying the agrochemical, process monitoring and records that need to be comply with.

4.6.2 Pesticides selected for use are those officially registered under the Pesticides Act 1974 (Act 149) and the relevant provision (Section 53); and in accordance with ESECHH Regulations (2000)

Major


Objective evidence:

Pesticides selected for use are those officially registered under the Pesticides Act 1974 (Act 149) and the relevant provision (Section 53); and in accordance with ESECHH Regulations (2000).

A chemical register is available and recorded in ‘Daftar Bahan Kimia Membahayakan Kesihatan’ list. Type of chemical, areas of application, suppliers name and chemical class is available. All chemical used are listed and compiled with MSDS in the chemical store.

4.6.3 Pesticides shall be stored in accordance to the Occupational Safety and Health Act 1994 (Act 514) and Regulations and Orders and Pesticides Act 1974 (Act 149) and Regulations

Major


Objective evidence:

The pesticide used are stored in the chemical store and clearly labelled. The store is locked and only accessible by the store supervisor for issuance and recorded in bin cards. A place for chemical mixing is properly maintained. Waste from the chemical mixing area will be collected and reuse for the next day.

Observation 03

MSDS for Antracol was lacking in the Chemical Store and no MSDS available at the nursery store.

4.6.4 All information regarding the chemicals and its usage, hazards, trade and generic names must be available in language understood by workers or explained carefully to them by a plantation management official at operating unit level

Major


Objective evidence:

Fertilizer and chemical are stored in a systematically arrangement and labelled. All MSDS for fertilizer and chemical (pesticides and herbicides) are compiled in a file which located inside the store. With regard to the foreign workers, all safe operating procedures in handling the pesticides is given through a briefing and a slot of training that to be given to all workers at prescribed interval. Records of training given is kept and maintained.

4.6.5 Annual medical surveillance as per CHRA for plantation pesticide operators Major


Objective evidence:

Annual Medical Surveillance for pesticides operators in Layang and Seri Pulai estate is available for all sprayers. The annual Occupational Medical surveillance for the CDA sprayers were identified in the field and their CHRA checked for the following workers:

a) Arif – CDA sprayer

b) Lukman – CDA sprayer

c) Che Hat – Mandore sprayer

d) Rakim Mohd Raduan – Staff

Result shows that all employees had successfully passed the CHRA. The OSH doctor gave an “all-clear” remark for the employees.

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4.6.6 No work with pesticides for confirmed pregnant and breast feeding women Major


Objective evidence:

No women sprayers’ evidence in both Layang and Seri Pulai estates.

4.6.7 Documentary evidence that use of chemical categorized as World Health Organization Type 1A or 1B, or listed by the Stockholm or Rotterdam Conventions and paraquat, is reduced and/or eliminated. Adoption of suitable economic alternative to paraquat as suggested by the EB pending outcome of the RSPO study on IWM

Minor


Objective evidence:

No Type 1A or 1B chemical evidenced used in the estate.

4.6.8 Documented justification of any aerial application of agrochemicals. No aerial spraying unless approved by relevant authorities

Major


Objective evidence:

No evidence aerial spraying conducted in Layang and Seri Pulai estate.

4.6.9 Evidence of chemical residues in CPO testing, as requested and conducted by the buyers

Minor


Objective evidence:

No buyer requested for testing of chemical residues in CPO.

4.6.10 Records of pesticides use (including active ingredients used, area treated, amount applied per hectare and number of applications) are maintained for either minimum of 5 years or starting November 2007

Minor


Objective evidence:

Data is recorded based on the type of pesticides used and recorded on a monthly basis. Observed during the audit the Costing Book for each operation (Spot spraying, Circle spraying, CDA).

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

4.7.1 Evidence of documented Occupational Safety Health (OSH) plan which is in compliance with OSH Act 1994 and Factory and Machinery Act 1967 (Act 139)

Major


Objective evidence:

The safety and health (OSH) plan shall cover the following: a. A safety and health policy, which is communicated and implemented: Hadapan POM maintain

the Occupational Safety and Health Policy. b. All operations have been risk assessed and documented: The latest risk assessment was

done on 12th and 16th Nov 2012. c. An awareness and training programme which includes the following specifics for pesticides to

ensure all workers involved have been adequately trained in a safe working practice (Layang Estate).

d. All precautions attached to products should be properly observed and applied to the workers. e. The appropriate personal protective equipment (PPE) is used for each risk assessed

operation: Identification of Proper PPE lacking. f. Companies to provide the appropriate PPE at the place of work to cover all potentially

hazardous operations such as pesticide application, land preparation, harvesting and if used, burning.

g. The responsible person should be identified: Ahmad Hatim B Muhammad Nasir (Assistant Engineer) has been appointed as OSH Coordinator according to appointment letter dated 3 January 2013.Layang estate has appointed Amirul Basri (Assistant Manager) as the OSH coordinator.

h. There are records of regular meetings between the responsible person(s) and workers where concerns of workers about health and safety are discussed. Records of the regular meeting kept in the OSH Documentation. Safety meeting will be held every 3 months. Latest meeting

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was on 8th March 2013 and chaired by the Mill Manager. Latest safety committee meeting for Layang estate is 17th January 2013, chaired by the estate manager and attended by staffs and workers representative.

i. Accident and emergency procedures should exist and instructions should be clearly understood by all workers.

j. Workers trained in First Aid should be present in both field and mill operations. k. First Aid equipment are available at worksites

Observation 04

First aid training records for the contract harvesting mandore was missing and Contract harvesting worker did not have his safety helmet during operation (Seri Pulai).

Records of fire extinguisher location and condition of 2012 were used (Layang estate).

4.7.2 Records should be kept of all accidents and periodically reviewed at quarterly intervals

Major


Objective evidence:

Records of all accidents are kept and periodically reviewed at quarterly intervals. Accident records are recorded in the document Accident, Incident and NCR (OSH/05/4.5.3). All accidents records are reviewed on case by case basis and the findings from the review are discussed in the OSH Meeting. There is also evidence on the usage of Borang JKKP 8 that need to be submitted to the Department of Occupational Safety and Health (DOSH) on yearly basis. Latest submission of Borang JKKP 8 was in January 2013.

There is also evidence on the usage of the form PQSM-OSH Monthly Update that is recorded on a monthly basis that is to be submitted and compiled by the central region plantation office before been submitted to DOSH. Observed the latest record for December 2011 is available and maintained.

Procedure for Identification of Hazard, Risk Assessment and Risk Control dated November 2008 is made available. The procedure describes the method in conducting the assessment that need to be conducted on yearly basis. In addition, the procedure also describes the method in calculating the rate of risk (i.e. by multiplying the Probability of Harm Occurring with the Severity of the Harm). Based on the procedure, the calculated risk is subsequently classified according to the following classification:

Low – Tolerable risk – No additional risk control measure required

Medium – Moderate risk – Current risk control measure may need to be improved

High – Intolerable risk – Immediate action required to control the hazards or stop the operation

The records of Hazard Identification, Risk Assessment and Risk Control (HIRARC) are maintained and available that is classified according to the job list and hazard or working environment. Based on records, the HIRARC for Layang Estate dated 1 July 2012 is available. The auditing team observed there are accidences occur following to the establishment of the HIRARC. The HIRARC was subsequently reviewed to reflect and update on the issues and hazard contribute to the accident. The revised HIRARC dated 03 November 2012 is made available to the auditor during the audit. On the other hand for Seri Pulai Estate, the HIRARC dated 17 January 2013 is made available to the auditing team that takes into consideration all accidents occur in 2012 that was established and tabled during the OSH Meeting.

Accident records are recorded in the document Accident, Incident and NCR (OSH/05/4.5.3). All accidents records are kept and maintained on monthly basis and reviewed and discussed every three months during the OSH Meeting. There is also evidence on the usage of the form PQSM-OSH Monthly Update that is recorded on a monthly basis that is to be submitted and compiled by the central region plantation office before been submitted to the DOSH. Observed the latest record for January 2013 is available and maintained.

4.7.3 Workers should be covered by accident insurance Major


Objective evidence:

All workers are covered by insurance provided by AIG. Workers in Layang estate are covered as per stated in Master Policy No. FW036125. Latest contribution payment made by Layang Esate is on February 2013 which covers the workers for period of 1 July 2012 to 30 June 2013. Employee’s allowances and subsidies deduction list FY12/13 is available.

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

4.8.1 A training programme (appropriate to the scale of the organization) that included regular assessment of training needs and documentation, including records of trading for employees are kept

Major


Objective evidence:

A training program FY12/13is available. The training program includes:

a) OSH Act and Regulation 1984

b) Harvesting Induction Training

c) First Aid training

Records of training conducted are available and kept in Training files. Samples of training that has been conducted are as follow:

Date Training Title

2 Feb 2013 Fire Prevention Training

18 Jun 2012 Pump Maintenance Training

3 Apr 2012 Latihan Meracun dan Cara Menggunakan Pump CDA dan ST201

Principle 5: Environmental Responsibility and Conservation of Natural Resources and Biodiversity

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

5.1.1 Documented aspects and impacts risk assessment that is periodically reviewed and updated

Major


Objective evidence:

Documented aspects and impacts risk assessment is available. Documented evidence for the identification of environmental aspects and impacts at the mill and estates level for 2012/2013 is available. The document is found to be updated that covers all activities that is in practice within the operation of the SOU as follows:

Nursery;

Replanting;

Manuring;

Weeding and spraying;

Pest and disease control;

Harvesting and collection;

Field FFB transportation;

Road maintenance;

Workshop;

Scheduled waste store;

General store;

Diesoline station;

Dispensary; and

Estates compound. (Minor CAR 35 closed)

There is a provision to review these aspects and impacts annually. Environmental impact evaluation matrixes with compliance rating have also been undertaken. The matrix represents a register and focuses on control and management of impacts for most production activities. Activities with high environmental impact rating have proposed mitigation measures whereas low impact activities are monitored. Environmental management is also supported by and Environmental Improvement and Pollution Prevention Plan. In general, environmental

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management activities in SOU 24 are undertaken adequately in both mill and estates.

5.1.2 Environmental improvement plan to mitigate the negative impacts and promote the positive ones, is developed, implemented and monitored

Minor


Objective evidence:

Environmental improvement plan to mitigate the negative impacts and promote the positive ones, is developed, implemented and monitored. This has been done through the implementation of the environmental impact evaluation matrixes with compliance rating have also been undertaken. The matrix represents a register and focuses on control and management of impacts for most production activities.

Criterion 5.2: The status of rare, threatened or endangered species (ERTs) and highly 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.

5.2.1 Identification and assessment of HCV habitats and protected areas within land holdings and attempt assessments of HCV habitats and protected areas surrounding landholdings

Major


Objective evidence:

Identification and assessment of HCV habitats and protected areas within land holdings; and attempt assessments of HCV habitats and protected areas surrounding landholdings are available. There is a Biodiversity Baseline Assessment Report for SOU 24 for both Estates and Mill dated December 2008. The document specifies the assessment process in summary covering the objective of the assessment, the scope of the assessment, biodiversity assessment process covering the methodology for the assessment, findings, management prescription of the area identified and the monitoring of the area identified.

There is also a section of monitoring of the biodiversity for each of the identified HCV within the assessment. The assessment stated that the monitoring program to be conducted annually and throughout the year where any sighting or new observation and identification of the ERT Species is recorded accordingly. The document with a validity period of 5 years is due for revision in 2013. This will be verified during the next surveillance audit.

5.2.2 Management plan for HCV habitats (including ERTs) and their conservation Major


Objective evidence:

Evidence of management plan for HCV habitats (including ERTs) and their conservation. Based on the assessment conducted, the company has identified the method in managing the HCV identified that covers the following:

a) Each areas identified to be set aside for conservation naturally;

b) Periodically inspected through scheduled monitoring and a joint collaboration with the Department of Wildlife and National Parks;

c) Rehabilitation and Habitat Enhancement to enhance the biodiversity values;

d) Conduct the education and awareness program as well as to encourage further research on specific biodiversity values;

e) Introduction of the new policy to take into consideration the findings highlighted during the assessment process; and

f) Minimizing interface with animals. Proper signage to be established to increase the awareness for the conservation and protection of the HCV. The company also committed to raise the awareness of the identified HCV areas as well as protected wildlife its employees.

5.2.3 Evidence of a commitment to discourage any illegal or inappropriate hunting, fishing or collecting activities and developing responsible measures to resolve human-wildlife conflicts

Minor


Objective evidence:

Evidence of a commitment to discourage any illegal or inappropriate hunting, fishing or collecting activities, and developing responsible measures to resolve human-wildlife conflicts. The management of the individual estates has taken action to discourage any illegal or inappropriate

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hunting fishing or collecting activities. This is the form of placing signage in appropriate locations and briefing workers.

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

5.3.1 Documented identification of all waste products and sources of pollution Major


Objective evidence:

Evidence of documented identification of all waste products and sources of pollution. Schedule waste produced at both estates and mill are captured and recorded in the Waste Management Action Plan. Several wastes has been identified as follows:

Scheduled waste:

o Used lubricants;

o Empty pesticide container; and

o Used batteries, tyres and tubes

Domestic waste

Empty Fruit Bunch/Palm Oil Mill Effluent; and

Clinical waste

On the other hand wastes sourcing and derived from mill is identified and recorded on a monthly basis where all wastes produced is subsequently be applied as fertilizer in the surrounding estates. Generally the waste identified is as follows:

EFB

Compost

Decanter Cake

Boiler Ash

Debris (sand, stone, and rubbish)

5.3.2 Having identified wastes and pollutants, an operational plan should be developed and implemented to avoid or reduce pollution

Minor


Objective evidence:

Operational plan to avoid or reduce pollution is not properly implemented. Waste management plan is not properly documented to avoid or to reduce pollution.

Minor CAR 40

Evidenced of domestic waste is not segregated at the line site (i.e. observed glass, aluminium can, plastic bottle, tyres).

There is evidence of container of black oil found on the field. In addition, there is evidence of oil trap is not functioning properly (Seri Pulai).

5.3.3 Evidence that crop residues/biomass are recycled (Cross reference C 4.2) Minor


Objective evidence:

Crop residues / biomass are recycled. All wastes derived from POM are categorized as Empty Fruit Bunch (EFB), compost and Decanter Cake. Amount of wastes generated and recycled are recorded on monthly basis.

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

5.4.1 Monitoring of renewable energy use per ton of CPO or palm product in the mill Minor


Objective evidence:

Evidence of monitoring of renewable energy use per tonne of CPO or palm product in the mill is available. The mill has monitored the usage of EFB to generate electricity in and recorded on Monthly basis.

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5.4.2 Monitoring of direct fossil fuel use per ton of CPO or kW per ton palm product in the mill (of FFB where the growers has no mill)

Minor


Objective evidence:

There is no diesel consumption in the mill operation. The mill is using steam turbine and electricity from TNB grid.

Criterion 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 Guidance or other regional best practice.

5.5.1 No evidence of open burning. Where controlled burning occurs, it is as prescribed by the Environmental Quality (Declared Activities) (Open Burning) Order 2003

Major


Objective evidence:

No open burning was observed during onsite audit.

5.5.2 Previous crop should be felled/mowed down, chipped/shredded, windrowed or pulverized/ploughed and mulched

Minor


Objective evidence:

Previous crops are felled/mowed down, chipped/shredded and windrowed. Refer indicator 5.5.1. In general, all felled trunks are chipped and windrowed.

5.5.3 No evidence of burning waste (including domestic waste) Minor


Objective evidence:

Observation 05

Visit to estates line site evidence of waste burning. An open burning also evidence (plastic included) performed in the hut at the replanting area (Seri Pulai).

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

5.6.1 Documented plans to mitigate all polluting activities (Cross reference C 5.1) Major


Objective evidence:

A documented plan to mitigate all polluting activities is available. Environment Management Programme to mitigate polluting activities for financial year 2012/2013 is in place and implemented. Among the objectives highlighted for the implementation of the programme are as follows:

Felling & clearing (soil erosion);

Felling & Clearing (Destruction of ground vegetation);

POME application;

Servicing and repair to vehicles;

Engine/vehicles overhaul/ repair;

Maintenance station;

Rubbish disposal;

Zero open burning; and

Leakage of pesticides during chemical mixing and washing into outside land.

According to the plan, the data is collected every 3 months. Records of plan implementation and monitoring of effectiveness is available and observed.

5.6.2 Plans are reviewed annually Minor


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Objective evidence:

Plans are reviewed annually. The EMP is conducted according to Section 5.4.2: QSHE Management Programmes/Action Plans of the Standard Operating Manual (SOM) and reviewed on a yearly basis upon achieving the objective highlighted for the particular year.

5.6.3 Monitor and reduce peat subsidence rate through water table management (Within ranges specified in C 4.3)

Minor


Objective evidence:

Water table management is available. Water management plan for Seri Pulai Estate is available and observed during the visit. The plan describes specific section detailing the monitoring and managing the peat within the estate. However, the management plan needs to be updated.

Principle 6: Responsible Consideration of Employees and of Individuals and Communities by Growers and Millers

Criterion 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 continuous improvement.

6.1.1 A documented social impact assessment including records of meetings Major


Objective evidence:

A documented social impact assessment including records of meetings is available. The SIA for the mill as well as the four estates are available outlining the methodology approach of the document. The document dated December 2008 specifies the scope of the assessment, the objective and methodology in conducting the assessment, assessment process covering the stakeholder engagement, the assessment analysis and the social management plan. The assessment also specifies the record of meeting that has been conducted during the assessment process.

6.1.2 Evidence that the assessment has been done with the participation of affected parties

Minor


Objective evidence:

There is evidence that the assessment has been done with the participation of affected parties. All records of meetings, consultation takes place during the SIA is incorporated in the document. List of the stakeholders consulted are also available.

6.1.3 A timetable with the responsibilities for mitigation and monitoring is reviewed and updated as necessary

Minor


Objective evidence:

A timetable with responsibilities for mitigation and monitoring is reviewed and updated. There is evidence of Action Plan for Social Impact Assessment that is reviewed annually. The revised management plan for FY 2012/2013 describes the plan for the following issues:

Problem regarding road access to smallholder;

Dusty road due to FFB transportation/cars/motorcycles;

Request of street lights from main entrance to line site;

Transportation for children to go to school;

Emergency transport ambulance to send workers to clinic or hospital in case of emergency;

Safety awareness training at line site;

Awareness training to the auxiliary police on their rights and power as well as responsibilities;

Organizing more social activities; and

Freedom of association to workers.

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Criterion 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.

6.2.1 Documented consultation and communication procedures Major


Objective evidence:

Consultation and communication procedures are available and documented. There is a procedure for communication and consultation between growers/millers and stakeholders within and surrounding the landholdings. The document dated 1 April 2008 is stated within the Standard Operating Manual of the Estate Quality Management System. The document specifies procedure to be applied upon the receiving of the complaints from the stakeholders until the issues resolved either through a direct negotiation, using arbitration or through legal proceedings. In addition, a flowchart describing the steps to be taken from the receiving of complaints until the issues resolve is made available to the auditing team in the same document.

6.2.2 A nominated plantation management official at the operating unit responsible for these issues

Minor


Objective evidence:

Sime Darby has identified the responsible person i.e. the Assistant Manager as the official person for handling the social issues within the estates and mills. Evidence of nomination of the Assistant Manager as the person to handle social issues is made available to the auditing team that specifies the following responsibility:

Investigate any report or claim with regard to social issues and to recommend applicable disciplinary act, where necessary;

Keeping all record of reports and action taken for each of reports received;

Provide advice and counselling to workers that need such service; and

Assist the estate management in organizing any social related events.

6.2.3 Maintenance of a list of stakeholders, records of all communication and records of actions taken in response to input from stakeholders

Minor


Objective evidence:

List of stakeholders, records of all communication and records of actions taken in response to input from stakeholders is maintained. List of stakeholders at estate and mill level and records of communication is available. These include local banks, contractors, vendors, local community heads, local authority services, government agencies including the list for NGOs, neighbouring mills and estates etc.

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

6.3.1 Documentation of the process by which a dispute was resolved and the outcome Major


Objective evidence:

Documentation of the process by which a dispute was resolved and the outcome is available. The procedures for handling complaints and grievances are outlined in the Procedures on Handling Social Issues of the Sustainable Plantation Management System document. The procedures dated 1 November 2008 specifies the process in receiving and addressing the grievances received from the stakeholders until the ultimate means in resolving issues i.e. through the legal proceeding. Meetings with external stakeholders and the grievance resolution books at individual estates have been initiated.

6.3.2 The system resolves disputes in an effective, timely and appropriate manner Minor


Objective evidence:

The system resolves disputes in an effective, timely and appropriate manner. The established grievance procedures specifies the estimated time shall be taken for each of the process to be addressed before proceed to the subsequent process.

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6.3.3 The system is open to any affected parties Minor


Objective evidence:

The system is open to any affected parties. Communication to the affected parties is evidenced. For instance, any social issues is communicated through either Gender Committee (for women issues) or during briefing during daily Muster Call or during the Safety and Health Briefing.

Criterion 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.

6.4.1 Establishment of a procedure for identifying legal and customary rights and a procedure for identifying people entitled to compensation

Major


Objective evidence:

Not applicable as the neighbouring communities are recent migrants (in the 1960s). There are no indigenous communities within or surrounding SOU 24 that holds legal or customary rights over the land. There is no dispute reported at the time of audit. However, the procedure for negotiation is made publicly available in the company website at:


6.4.2 A procedure for calculating and distributing fair compensation (monetary or otherwise) is established and implemented. This takes into account gender differences in the power to claim rights, ownership and access to land; and long-established communities; differences in ethnic groups’ proof of legal versus communal ownership of land.

Minor


Objective evidence:

Not applicable as the neighbouring communities are recent migrants (in the 1960s). There are no indigenous communities within or surrounding SOU 24 that holds legal or customary rights over the land. There is no dispute reported at the time of audit. However, the procedure for negotiation is made publicly available in the company website at:


6.4.3 The process and outcome of any compensation claims is documented and made publicly available

Minor


Objective evidence:

There are no indigenous communities within or surrounding SOU 24 that holds legal or customary rights over the land.

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

6.5.1 Documented of pay and conditions Major


Objective evidence:

Evidence of documentation of pay and conditions is available. Each worker received his/her pay slip that contains clear details of the salary paid and deductions made that is as follows:

Number of days worked in a month

Overtime

Sick leave pay

Annual leave pay

Public holiday pay

Off day pay

Worker’s daily attendance incentive

EPF contribution and deduction (except for foreign workers)



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SOCSO contribution and deduction (except for foreign workers but replaced by workmen compensation scheme)

Advance collected in the mid month

Gross earnings

Net earnings

Based on records, the company has implemented the minimum wages rules as defined by the Federal Government whereby the minimum wage for workers employed in private sector in West Malaysia is set at RM 900. Several payslips for harvester and sprayer workers are inspected and evidenced that harvester workers receive between RM900-3,500 depending on how much tonnage of FFB harvested (harvester), while sprayers receive between RM900-1,600.

6.5.2 Labour laws, union agreements or direct contracts of employment detailing payments and conditions of employment (e.g. working hours, deductions, overtime, sickness, holiday entitlement, maternity leave, reasons for dismissal, period of notice, etc) are available in the language understood by the workers or explained carefully to them by a plantation management official in the operating unit

Minor


Objective evidence:

Labour laws, union agreements or direct contracts of employment detailing payments and conditions of employment are available in the language understood by the workers. The foreign worker’s work contracts are verified. The contracts are written in English for Nepal and Myanmar national workers and Bahasa Malaysia for Malay and Indonesian workers. In addition, the pay slip and contracts are also available in the respective languages.

6.5.3 Growers and millers provide adequate housing, water supplies, medical, educational and welfare amenities in accordance with Workers’ Minimum Standard of Housing and Amenities Act 1990 (Act 446) or above, where no such public facilities are available or accessible (not applicable to smallholders)

Minor


Objective evidence:

Adequate housing, water supplies, medical, educational and welfare amenities provided to workers. Workers have access to clean water, segregated sanitary and bathing facilities and electricity. All employees are given adequate housing, medical, educational and welfare amenities and waste disposal facilities in accordance with Workers’ Minimum Standard of Housing and Amenities Act. Disposal of domestic solid wastes at the linesite is conducted at least twice weekly.

Criterion 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.

6.6.1 Documented minutes of meetings with main trade unions or workers representatives

Major


Objective evidence:

Documented minutes of meetings with main trade unions or workers representatives are available. There is proof of documented minutes of meetings with representatives of the National Union of Plantation Workers (NUPW) at the mill and estate levels. Based on records, the Meetings held since last surveillance audit for visited estates and mill are as follows:

Estate/Mill Date Attendance

Layang Estate

7 March 2013 7 members

21 May 2012 10 members

07 March 2012 General Meeting with Members. All 10 members are attended

04 July 2012 9 members

19 July 2012 6 members

Seri Pulai Estate 19 December 2012 9 members

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30 October 2012 Integrated meeting with OSH Meeting

17 July 2012 Integrated meeting with OSH Meeting

30 April 2012 Integrated meeting with OSH Meeting

Hadapan POM

28 March 2012 Integrated meeting with OSH meeting

20 July 2012 Integrated meeting with OSH meeting

6 December 2012 Integrated meeting with OSH meeting

6.6.2 A published statement in local languages recognizing freedom of association Minor


Objective evidence:

A published statement in local languages recognizing freedom of association is available. There is a published statement in English and Bahasa Malaysia under the SOU’s Social Policy recognizing freedom of association that is signed by the of Manager of the Estates and Mill. The policy specifies the company’s commitment to in full respect and with no intention of obstruction for workers to get involve in workers union as it is stated in the workers union act 1959 that highlighted:

Section 8 of Employment Act 1955 stated that “Nothing in any contract of service shall in any manner restrict the right of any employee who is a party to such contract:

(a) to join a registered trade union; (b) to participate in the activities of a registered trade union, whether as an officer of such union or otherwise; or (c) to associate with any other persons for the purpose of organising a trade union in accordance with the Trade Unions Act 1959 [Act 262].”

Section 5(1) Industrial Relations Act 1967 stated that “No employer or trade union of employers, and no person acting on behalf of an employer or such trade union shall -

(a) impose any condition in a contract of employment seeking to restrain the right of a person who is a party to the contract to join a trade union, or to continue his membership in a trade union; (b) refuse to employ any person on the ground that he is or is not a member or an officer of a trade union; (c) discriminate against any person in regard to employment, promotion, any condition of employment or working conditions on the ground that he is or is not a member or officer of a trade union; (d) dismiss or threaten to dismiss a workman, injure or threaten to injure him in his employment or alter or threaten to alter his position to his prejudice by reason that the workman -

(i) is or proposes to become, or seeks to persuade any other person to become, a member or officer of a trade union; or (ii) participates in the promotion, formation or activities of a trade union; or

(e) induce a person to refrain from becoming or to cease to be a member or officer of a trade union by conferring or offering to confer any advantage on or by procuring or offering to procure any advantage for any person.”

The policy also stated company’s commitment to allow each worker that is eligible to be represented by the union if there is any argument that will be discussed accordingly to the Collective Agreements basis.

Criterion 6.7: Children are not employed or exploited. Work by children is acceptable on family farms, under

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adult supervision, and when not interfering with education programmes. Children are not exposed to hazardous working conditions.

6.7.1 Documented evidence that minimum age requirement is met Major


Objective evidence:

The estate and mill keeps the employment record of each worker. The records evidence that there is no underage worker (below 18 years old) employed.

Criterion 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.

6.8.1 A publicly available equal opportunities policy Major


Objective evidence:

A publicly available equal opportunities policy is available. There is a Social Policy available which states, among others, the SOU’s policy for equal opportunities in terms of “recruitment, progression, terms and conditions of work and representation, irrespective of race, caste, national origin, gender, colour, disability, sexual orientation, union membership, political opinion, religion and/or age”.

6.8.2 Evidence that employees and groups including migrant workers have not been discriminated against

Minor


Objective evidence:

Evidence that employees and groups including migrant workers have not been discriminated against. There is no evidence, anecdotal or documentary which points to discrimination against foreign workers. Equal opportunities are demonstrated through examples such as similar daily wages for migrant workers and local workers.

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

6.9.1 A policy on sexual harassment and violence and records of implementation Major


Objective evidence:

A policy on sexual harassment and violence and records of implementation is available. There is a Social Policy available which states, among others, the SOU’s policy for the prevention of sexual harassment and all other forms of violence against women and to protect their reproductive rights.

6.9.2 A specific grievance mechanism is established Minor


Objective evidence:

A specific grievance mechanism is established. Grievance mechanism is in place that is built in within the procedures for handling complaints and grievances (QSHE/02/4.2.3). The document details the procedures and mechanism applied to resolve all disputes and grievances raised by the relevant stakeholders.

In addition there is a gender committee and a nominated gender representative at all the four estates and mill. The official appointment letter signed by the manager of each of the estates and mill is also made available to the auditing team during the Surveillance Audit that specifies the following:

To investigate any report pertaining to the sexual harassment and to suggest the disciplinary action for the harassment occur;

To record and keep secret all records of report made by the complainant pertaining to the sexual harassment as well as action taken for each of the complaints received;

To give advice and counseling to the particular workers that require assistance on issues relating to sexual harassment; and

To assist the estates and mill in organizing all programs and trainings that aims to reduce the occurrence of sexual harassment in workplace.

Based on records, since last Surveillance Audit the Gender Committee has been convened for the

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visiting estates and mill on the following dates:

Estate/Mill Date

Layang Estate

02 February 2012

25 February 2012

25 May 2012

09 March 2012

Seri Pulai Estate

20 July 2012

11 May 2012

24 February 2012

Hadapan POM

20 February 2013

22 August 2012

08 February 2012

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

6.10.1 Pricing mechanisms for FFB and inputs/services shall be documented Major


Objective evidence:

Pricing mechanisms for FFB and inputs/services is documented. The pricing of inputs/services such as road maintenance contracts, supplier’s pricing details are clearly stated in the individual contracts for suppliers/contractors.

6.10.2 Current and past prices paid for FFB shall be publicly available Minor


Objective evidence:

Current and past prices paid for FFB is publicly available. There is a tender process for suppliers/contractors at the estate and mill levels, inviting the quotations from the stakeholders. All prices paid for the FFB is available in the payment chit which is traceable for the present and past prices.

6.10.3 Evidence that all parties understand the contractual agreements they enter into and that contracts are fair, legal and transparent

Minor


Objective evidence:

Adequate evidence that all parties understand the contractual agreements they enter into, and that contracts are fair, legal and transparent. SOU 24 does not have a policy to purchase FFB from smallholders. However, there is a tender process for suppliers/contractors at the estate and mill levels, inviting the quotations from the stakeholders.

6.10.4 Agreed payments shall be made in a timely manner Minor


Objective evidence:

Agreed payments are made in a timely manner. Interviews with suppliers and contractors at the estates reveal that all payments are made in a timely manner. Several contracts with the suppliers and contractors evidenced that for each of the works employed to the suppliers and contractors, the term and payment are made within 5 working days after the receipt or finalization of the agreed job.

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

6.11.1 Demonstrable contributions to local development that are based on the results of Minor

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consultation with local communities


Objective evidence:

The individual estates and the mill have a very basic form of corporate social responsibility (CSR), which usually involves stakeholders, especially the local communities approaching them for donations on various occasions such as deaths, religious celebrations, for the upkeep and maintenance of schools, family day, sports day etc.

Contribution to local community is an active exercise for SOU 24 and records of contribution i.e. road upgrading, Transport for water supply during drought, school sport activities, security issues concerning workers etc are available at each estate. All activities and contribution rendered are recorded in the Corporate Social Responsibility Report for each of the financial year.

Principle 7: Responsible Development of New Plantings

This whole Principle is not applicable to this assessment as there are no new plantings. The company is only involved in re-planting programme after felling of old palms and there is no plan for expansion.

Principle 8: Commitment to Continuous Improvement in Key Areas of Activity

Criterion 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.

8.1.1 Minimize use of certain pesticides (C 4.6) Major


Objective evidence:

Evidence of commitment to minimise use of certain pesticides. SOU 24 is taking effort to make continuous improvement in key areas of activity. There is evidence that effort has been made to minimise use of agrochemicals with the introduction of biological control agents such as barn owl and beneficial plants.

8.1.2 Environmental impacts (C 5.1) Major


Objective evidence:

Commitment to mitigate environmental impacts. A mechanism is in place for environmental management within the operation of the SOU. The document mechanism is found to be updated that covers all activities that is in practice within the operation of the SOU as follows:

Nursery;

Replanting;

Manuring;

Weeding and spraying;

Pest and disease control;

Harvesting and collection;

Field FFB transportation;

Road maintenance;

Workshop;

Scheduled waste store;

General store;

Diesoline station;

Dispensary; and

Estates compound.

The auditor also observed that a budget is in place for workers pertaining to the enhancement and desilting of drains to ensure smooth water flow to the nearby streams.

8.1.3 Maximizing recycling and minimizing waste or by-products generation Major

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Objective evidence:

Commitment to Maximizing recycling and minimizing waste or by-products generation. There is a documented programme in place that promotes maximising recycling and minimising waste or by-products generation in both estates and mill. The identification of waste and by-products generation is adequate. At line site, the management of the estates and mill has allocated a numbers of recycling bin to promote the recycling among the workers and their families. All garbage meant for recycling are subsequently be sold to the garbage collector for recycling purpose.

8.1.4 Pollution prevention plans (C 5.6) Major


Objective evidence:

Commitment for prevention of the pollution. Environment Management Programme to mitigate polluting activities for financial year 2012/2013 is in place and implemented. Among the objectives highlighted for the implementation of the programme are as follows:

Felling & clearing (soil erosion);

Felling & Clearing (Destruction of ground vegetation);

POME application;

Servicing and repair to vehicles;

Engine/vehicles overhaul/ repair;

Maintenance station;

Rubbish disposal

According to the plan, the data is collected every 3 months. In addition, records of plan implementation and monitoring of effectiveness is available and observed.

The EMP is conducted according to Section 5.4.2: QSHE Management Programmes/Action Plans of the Standard Operating Manual (SOM) and reviewed on a yearly basis upon achieving the objective highlighted for the particular year.

Water management plan for Seri Pulai Estate is available and observed during the visit that describes specific section detailing the monitoring and managing the peat within the estate. The plan is found to be implemented adequately and periodically monitored.

8.1.5 Social impacts (C 6.1) Major


Objective evidence:

Commitment towards social impacts. The SIA for the mill as well as the four estates are available outlining the methodology approach of the document. All records of meetings, consultation takes place during the SIA is incorporated in the document. List of the stakeholders consulted are also available. There is evidence of action plan incorporated in the SIA. The action plan describes the plan for mitigate the impacts identified in the SIA as well as plan to monitor the impact.

There is evidence of Action Plan for Social Impact Assessment that is reviewed annually. The revised management plan for FY 2012/2013 describes the plan for the following issues:

Problem regarding road access to smallholder;

Road upgrading;

Dusty road due to FFB transportation/cars/motorcycles;

Request of street lights from main entrance to line site;

Transportation for children to go to school;

Emergency transport ambulance to send workers to clinic or hospital in case of emergency;

Organizing more social activities; and

Freedom of association.

A budgeted list covering a period representing the FY 2013/2014 on all matters pertaining to social welfare of workers and their families covering both work places and line sites are available.

8.1.6 A mechanism to capture the performance and expenditure in social and environmental aspects

Minor

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Objective evidence:

A mechanism to capture the performance and expenditure in social and environmental aspects are available. General budget for Corporate Social Responsibility Programme (CSR) and Environmental Control Budget for a period of financial year 2013/2014 are available. The budgeted programme are found to be covering the following:

Road maintenance for estates and line sites;

Maintenance and enhancement of drains to increase the efficiency of water flowing from the drains into the nearby streams;

Maintenance of housing at line sites;

Installation of proper water piping supplied by the State Government Agency;

Upgrading the tools to be used for workers at workplace;

To allocate a portable water pump to draw water from nearby water source into the trailer tank during dry periods as a standard policy; and

Installation of alarm system at work place and line sites to increase safety and security

4.1.2 Supply Chain

For supply chain, Hadapan Palm Oil Mill has decided to change the certification module scope from

Module E (CPO Mill: Mass Balance) to Module D (CPO Mill: Segregation) for this assessment.

The findings and objective evidence find during the assessment are outlined in the table below. The

results for each indicator from each of the operational areas were evaluated to provide an

assessment of conformity. A statement is provided for each of the RSPO indicators in order to

support the findings of the assessment team. As to date, there is no any transaction for RSPO

certified product yet for Hadapan Palm Oil Mill.

Module D: Segregation

Module D.1: Documented Procedures

Criterion D.1.1: The facility shall have written procedures and/or work instructions to ensure the implementation of all the elements specified in these requirements.

D.1.1.1 Complete and up to date procedures covering the implementation of all the elements in these requirements


Objective evidence:

In the Mill Quality Manual System, the following SOP is available both in hard copy and soft copy. The SOPs are also available at the Work Station. The SOP includes:

a) Reception Stations

b) Fruit handling stations

c) Sterilisation station

d) Threshing station

e) Pressing Station

f) Clarification station

g) Depericarping station

h) Kernel Recovery station

i) Boiler Station

j) Power generation

k) Product Storage & Despatch

l) Laboratory

m) Oil Recovery Station

n) Water treatment plant

o) ETP

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p) Workshop and maintenance

D.1.1.2 The name of the person having overall responsibility for and authority over the implementation of these requirements and compliance with all applicable requirements

Verifiers and guidance:

This person shall be able to demonstrate awareness of the facilities procedures for the implementation of this standard.


Objective evidence:

En. Ahmad Faiz b. Abu Bakar (Assistant Engineer) was appointed for an authority over the implementation of these requirements and compliance with all applicable requirements on 6th Feb 2013. Evidence of letter appointment is available.

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


Objective evidence:

Inter-office mail was submitted for the management approval on 12th

March 2013 by the PSQM Department to inform that a revised SOP Version 2.0. The SOP contains documented procedures for receiving and processing of certified and non certified FFB.

Module D.2: Purchasing and Goods In

Criterion D.2.1: The facility shall verify and document the volumes of certified and non-certified FFBs received.


Objective evidence:

Hadapan POM only receives from SOU 24 estates and directly managed estates by Sime Darby which are RSPO certified. As of today they do not receive from non-certified sources.

Criterion D.2.2: The facility shall inform the CB immediately if there is a projected overproduction.


Objective evidence:

Inter-office mail was submitted for the management approval on 12th

March 2013 by the PSQM Department to inform that a revised SOP Version 2.0. The SOP contains a procedure to inform CB for any projected overproduction.

Module D.3: Record Keeping

Criterion D.3.1: The facility shall maintain accurate, complete, up-to-date and accessible records and reports covering all aspects of these requirements.


Objective evidence:

Hadapan POM keeps all updated records and reports covering all aspect of Supply Chain Certification System and made readily accessible. List of records available are as follow:

a) CPO Contract.

b) Month End Stock Figures (up to Nov 2012).

c) Reconciliation statement report.

d) Weighbridge FFB receives ticket.

e) Weighbridge ticket dispatch.

f) Monthly Crop Report.

g) Monthly theoretical OER for Group Estates.

h) Daily Production Summary Report.

i) Monthly Production Report (Physical movement).

j) DOE Quarterly Wastewater return form AS4 (Approved BOD for land application: 5,000mg/l).

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


Objective evidence:

Retention times for all records and reports is at least five (5) years as stated in the SOP for Traceability and RSPO Supply Chain Certification System (Version: Aug 2008).

Criterion D.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.


Objective evidence:

Non-Conformance 01

The facility do not have 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.

Closed Out Evidence

Hadapan POM has submit the evidence of record and balance of all RSPO certified FFB received, delivered CPO, PKO and Palm Kernel meal on a three monthly basis. Example of transactions for second Quarter 2013 evidence are as below:

a. FFB Received: 45,884.32MT b. CPO Produced: 9,998.59MT c. Certified RSPO Despatched: 10,135.27MT

NC01 is closed.

Criterion D.3.4: The following trade names should be used and specified in relevant documents (e.g. purchase and sales contracts, *product name*/SG or Segregated). The supply chain model used should be clearly indicated.


Objective evidence:

Up to date, there is no any sale of RSPO certified product yet. However, Hadapan POM shows a template that the receiving and delivery WB ticket has shown that the material is specified as *product name*/SG. Samples observed are as follow:

1) FFB Receive Ticket:

a) Ticket No: 72900 (11/3/2013)

b) Supplier: Layang Estate

c) Crop Type: FFB B Crop/SG

d) In the Template Delivery ticket

2) CPO Dispatch Ticket:

a) Ticket No: 006349 (11/3/2013)

b) Customer: Pan Century Edible Oils Sdn Bhd

c) Product Type: Crude Palm Oil/SG

Module D.4: Sales and Good Out

Criterion D.4.1: The facility shall ensure that all sales invoices issued for RSPO certified products 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 products delivered

e) Reference to related transport documentation


Objective Hadapan POM has a template of sales invoices issued for RSPO certified products delivered. The

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evidence: samples Despatch Ticket (No: 006349) includes the following information:

a) Name and address of the buyer: Pan Century Edible Oils Sdn Bhd

b) Date issued: 11th March 2013

c) Product Description: CPO/SG

d) Quantity: 39,650kg

Module D.5: Processing

Criterion D.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 material; up to 5% contamination is allowed.


Objective evidence:

Hadapan POM has been receiving certified material from Sime Darby Plantation directly managed estates since July 2012. The systems should guarantee the minimum standard of 95% segregated physical material.

Criterion D.5.2: The facility shall provide documented proof that the RSPO certified palm oil can be traced back to only certified segregated material.


Objective evidence:

The facilities only received certified material from their own Group. They are able to track back the source from the production and reception records.

Criterion D.5.3: In cases where a mill outsource activities to an independent palm kernel crush, the crush still falls under the responsibility of the mill and does not need to separately certified. The mill has to ensure that:

a) The crush operator conforms to these requirements for segregation

b) The crush is covered through a signed and enforceable agreement


Objective evidence:

Hadapan POM did not have any outsources activities for palm kernel crush. They sell their palm kernel to other company and did not buy back any Palm Kernel.

Module D.6: Training

Criterion D.6.1: The facility shall provide the training for all the staff as required to implement the requirements of the Supply Chain Certification System.


Objective evidence:

Training records shows that SCCS training for Johor Oil Mills was conducted on the 4th February 2013 at Bukit Benut Oil Mill. The training was conducted by PSQM Unit (RSPO & Certifications Unit). A record of attendance list is available and attended by:

a) Assistant Engineer

b) QA Supervisor

c) Office Staff

Non-Conformance 02

There is no training conducted for operating station on the requirements of the SCCS. During interview, the Weighbridge staff is not familiar with the terms of “Mass Balance” and “Segregation”.

Closed Out Evidence

Hadapan POM has submitted an evidence of training for RSPO Supply Chain. The training has

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been conducted by Mr. Ahmad Faiz Abu Bakar on 2nd

May 2013. The training conducted for all relevant staff such as weighbridge operator, QA and Lab operator and attended by 13 people.

NC02 is closed.

Module D.7: Claims

Criterion D.7.1: The facility shall only make claims regarding the use of or support of RSPO certified palm oil that are in compliance with the RSPO Rules for Communication and Claims.


Objective evidence:

Hadapan POM has not made any claims yet. The RSPO Trademark License Number for Sime Darby Plantation Sdn. Bhd. is RSPO-1106024.

4.2 Corrective Action Request

There are total of 3 Minor non conformances (P&C) and 2 Non-conformance against Supply

Chain Requirement were raised. Please refer to the Appendix A for the details findings and

relevant correction actions have been taken.

4.3 Noteworthy Positive & Negative Observation

For the audit, the audit teams observed some positive effort of the estate management which is

indicated as below:

a) There is no land dispute, which indicates that the land acquisition process was well

executed and is equitable.

b) The estates are committed towards minimizing usage of water and actively doing rainwater

harvesting to promote recycle water source.

4.4 Status of Non-Conformities Previously Identified

All non-conformity and CAR from previous audit is remaining in this report. Please refer to

Appendix B for the previous audit CAR logs and their status.

Due to insufficient evidence submitted within the required time, one CAR is maintained and 2

Observations are raised from the Non-Conformities previously identified in 2012

4.5 Issues Raised by Stakeholders and Findings

This is Annual Surveillance Audit 02; hence no stakeholder’s consultation is conducted.

However, during the audit, some of the stakeholders met were interviewed. All interviewed

stakeholders had positive comments about Sime Darby Plantation Sdn Bhd.

5. ACKNOWLEDGEMENT OF ORGANIZATION INTERNAL RESPONSIBILITY

5.1 Date of Next Surveillance Visit

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The next surveillance audit is planned within twelve months of the date approval of this report

by RSPO.

5.2 Date of Closing Non-Conformities

Date of closing non-conformance has been specified in RSPO Certification System, June 2007.

Major non-conformance raised during surveillance assessment must be addressed within 60

days, or the certificate will be suspended. Minor non-conformities will be raised to major if they

are not addressed by the following surveillance assessment. Details of due date for non-

conformities is attached in Appendix A.

5.3 Acknowledgement of Internal Responsibility and Formal Sign-off Assessment Findings

SGS Malaysia acknowledges and confirms acceptance of the Report contents and including

the assessment findings. SGS Malaysia accepts the responsibility for addressing the

opportunities of improvement detailed in this report.

Signed on behalf of Sime Darby Plantation Sdn Bhd

Signed on behalf of SGS Malaysia Sdn Bhd

Name: En Muhammad Ali Nuruddin

Designation: Vice-President II

Name: Haye Semail

Designation: Manager – Natural Resources

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APPENDIX A: CORRECTIVE ACTION REQUEST & OBSERVATIONS

CAR # Indicator CAR Detail

38 4.4.7 Date Recorded>

14th

Mar 13 Due Date> 13th

Mar 14 Date

Closed>

Non-Conformance:

Evidence of water management plan is no available.

Objective Evidence:

No action conducted to look into the results of water sampling analysis. Some of the parameters for domestic water usage like coli form analysis are not tested. The chloride content for both the local and outside test was above the recommended. (i.e: In Feb 2013 tested chloride of 49-51mg/l and the COD is 12-24mg/l.

Close-out evidence:


14th


Mar 14 Date

Closed>

Non-Conformance:

Monitoring extent of IPM implementation for major pests is not conducted.

Objective Evidence:

IPM implementation is not monitored in accordance to SOP. In Layang estate, records of census for bagworm were available. However, records of threshold reached and comments from estate management for the application of chemical is lacking.

Close-out evidence:


14th


Mar 14 Date

Closed>

Non-Conformance:

Wastes and pollutants and an operational plan should be identified and developed, but not implemented to avoid or reduce pollution.

Objective Evidence:

a) Chemical containers (Supersate) are not triple rinse before stored into the Schedule Waste store and contaminated gloves and racks in the mill workshop are not disposed in Schedule Waste bin.

b) Evidence of reused chemical container as loose fruit scrapper (contract workers & loose fruit collection station.

c) Indiscriminate disposal of domestic waste into Moisture Conservation Pit (MCP) d) Clinical wastes in Layang estate are not being disposed off accordingly.

Close-out evidence:

NC01 D.3.3 Date Recorded>

14th


May 13 Date

Closed> 6

th May 13

Non-Conformance:


Objective Evidence:

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Close-out evidence:

Hadapan POM has submit the evidence of record and balance of all RSPO certified FFB received, delivered CPO, PKO and Palm Kernel meal on a three monthly basis. Example of transactions for second Quarter 2013 evidence are as below:

d. FFB Received: 45,884.32MT e. CPO Produced: 9,998.59MT f. Certified RSPO Despatched: 10,135.27MT

NC01 is closed.

NC02 D.5.1 Date Recorded>

14th


May 13 Date

Closed> 6

th May 13

Non-Conformance:

The facility inadequately provides the training for all the staff as required to implement the requirements of the Supply Chain Certification System.

Objective Evidence:

There is no training conducted for operating station on the requirements of the SCCS. During interview, the Weighbridge staff is not familiar with the terms of “Mass Balance” and “Segregation”.

Close-out evidence:

Hadapan POM has submitted an evidence of training for RSPO Supply Chain. The training has been conducted by Mr. Ahmad Faiz Abu Bakar on 2

nd May 2013. The training conducted for all

relevant staff such as weighbridge operator, QA and Lab operator and attended by 13 people. NC02 is closed.

OBSERVATIONS

OBS # Indicator Observation Detail

01 4.4.1 Date

Recorded> 14

th Mar 13 Due Date>

Date

Closed>

Non-Conformance:

Protection of water courses and wetlands including maintaining and restoring appropriate buffer

zone is not being monitored.

Objective Evidence:

Evidence of slight spraying of woodys along the slope in field F3-02 (Culvert).

Close-out evidence:

02 4.5.4 Date

Recorded> 14

th Mar 13 Due Date>

Date

Closed>

Non-Conformance:

Monitoring of pesticides usage units per hectare or per ton crop is not updated.

Objective Evidence:

Updated pesticides usage in Seri Pulai estate is lacking (up to 2011) and usage of rat baits in

Layang estate not included in the monitoring documents.

Close-out evidence:

03 4.6.3 Date

Recorded> 14

th Mar 13 Due Date>

Date

Closed>

Non-Conformance:

MSDS is missing from the chemical storage area.

Objective Evidence:

MSDS for Antracol was found not available in chemical store and no MSDS in the nursery store

of Seri Pulai.

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OBS # Indicator Observation Detail

Close-out evidence:

04 4.7.1 Date

Recorded> 14

th Mar 13 Due Date>

Date

Closed>

Non-Conformance:

Evidence of documented OSH plan is not properly addressed.

Objective Evidence:

a) There is no specific PPE identified in the HIRARC of Hadapan Palm Oil Mill.

b) First Aid training records for the contract harvesting mandore was missing.

c) Missing of fire extinguisher in the linesite.

Close-out evidence:

05 5.5.3 Date

Recorded> 14

th Mar 13 Due Date>

Date

Closed>

Non-Conformance:

Evidence of burning waste in the field and linesite.

Objective Evidence:

Burning of waste (including plastic and domestic waste) evidence in the replanting area (Seri

Pulai) and workers linesite (Layang).

Close-out evidence:

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APPENDIX B: NON-CONFORMITIES PREVIOUSLY IDENTIFIED


03 4.2.2 Date

Recorded> 18/12/08 Due Date> 17 Feb 12

Date

Closed> 17 Feb 12

Non-Conformance:

Inconsistency of periodic tissue and soil sampling being carried out to monitor changes in

nutrient status.

Objective Evidence:

Soil sampling not undertaken to support best management practices.

Soil maps found inadequate and need to be updated.

Close-out evidence:

In practice, the soil sampling is conducted by the R&D Division of the Sime Darby Plantation on

estate by estate basis. The procedure in conducting the soil sampling analysis is stipulated in the

Section 4 of the Sustainable Plantation Management System. Based on the procedure, the

interval of the soil sampling analysis is conducted every 25 years. Soil/Foliar Analysis for

2010/2011 is available. In addition, Soil/Foliar Analysis for 2011/2012 is budgeted in the estate

budget

10 4.4.7 Date


Date

Closed> 17 Feb 12

Non-Conformance:

Inadequate water management plan.

Objective Evidence:

Onsite management planning inadequate.

i. Onsite Management Planning inadequate.

Plans detailing the different aspects of ground and surface water management not available.

Close-out evidence:

Water management plan is available for financial year 2011/2012. The plan is divided into three

sections as follows:

Reduction of water usage for financial year 2011/2012

Contingency Plan During Water Shortage for financial year 2011/2012

Water usage for monthly basis for financial year 2011/2012

Observation made in the estates visited evidenced the availability of Action Plan with regard to

the managing of water usage such as:

Action Plan for Reduction of Water Usage; and

Action Plan for Water Sampling from stream and river

In addition, there is also the Water Management in Coastal and Peat Plantings that is described

in the Agricultural Reference Manual (ARM)

13 4.6.1 Date


Date

Closed> 17 Feb 12

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Non-Conformance:

Insufficient written justification in Standard Operating Procedures (SOP) of all agrochemicals

use.

Objective Evidence:

Written justification for all agrochemicals used not comprehensive.

Written justification only available for certain agrochemicals thus not comprehensive.

Close-out evidence:

Usage of agrochemical is described in the Section A10: Weeding and Section B3:

Weeding/Spraying of the Standard Operating Procedures of the Estates. The procedure

describes the function/justification and methods of applying the agrochemical

20 5.6.2 Date


Date

Closed> 17 Feb 12

Non-Conformance:

Lacks of plans are reviewed annually.

Objective Evidence:

No evidence of stated periodicity review of pollution and emission reduction plans.

Close-out evidence:

The EMP is conducted according to Section 5.4.2: QSHE Management Programmes/Action

Plans of the Standard Operating Manual (SOM) and reviewed on a yearly basis upon achieving

the objective highlighted for the particular year

23 5.6.2 Date


Date

Closed> 17 Feb 12

Non-Conformance:

Inadequate timetable with responsibilities for mitigation and monitoring

Objective Evidence:

The revised SIA does not exhibit a timetable which sufficiently addresses responsibilities for

mitigation and monitoring. Only Kulai estate provided a revised social management plan during

the close-out visit which includes responsibilities for mitigation. However, it does not address

monitoring of impacts identified during the SIA. In conclusion, there is no proof of monitoring and

allocation of responsibility for mitigation and monitoring for most of the estates and mill.

Close-out evidence:

There is evidence of action plan incorporated in the SIA. The action plan describes the plan for

mitigate the impacts identified in the SIA as well as plan to monitor the impact.

26 6.11.1 Date


Date

Closed> 17 Feb 12

Non-Conformance:

Inadequate timetable with responsibilities for mitigation and monitoring

Objective Evidence:

i) There is no evidence of demonstrable contributions to local development that are based on the

results of consultation with local communities, i.e. to identify their own priorities and needs,

including the different needs of men and women.

ii) There is no clearly defined CSR objective/goals or plan of action. The CSR evidence

demonstrates that CSR at the estate level is ad-hoc, i.e. there is no medium/long-term planning

for CSR activities.

iii) The percentage of the plantation’s profit/turnover for social development projects is unclear.

Close-out evidence:

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The individual estates and the mill have a very basic form of corporate social responsibility

(CSR), which usually involves stakeholders, especially the local communities approaching them

for donations on various occasions such as deaths, religious celebrations, for the upkeep and

maintenance of schools, family day, sports day etc.

Contribution to local community is an active exercise for SOU 24 and records of contribution eg

road upgrading, Transport for water supply during drought, school sport activities, security issues

concerning workers etc are available at each estate.

All activities and contribution rendered are recorded in the Corporate Social Responsibility

Report for each of the financial year.

27 4.4.1 Date


Date

Closed> 17 Feb 12

Non-Conformance:

Inadequate demonstration of the protection of water courses and wetlands, including maintaining

and restoring appropriate riparian buffer zones at or before replanting along all natural

waterways within the estate.

Objective Evidence:

Buffer zone restoration and demarcation is inconsistently undertaken in the different states.

Management guidance is not uniform not formalized.

Close-out evidence:

There is a Policy Slope and River Protection, signed by top management of Sime Darby

Plantation dated April 2011.

In addition, all buffer zones identified within the estates are mapped. Observed evidence of map

depicting buffer zone and waterways in the estates visited.

28 4.4.2 Date


Date

Closed> 17 Feb 12

Non-Conformance:

Evidence on construction of bunds/weirs/dams across the main rivers or waterways passing

through an estate.

Objective Evidence:

The conditions required by the Jabatan Pengairan dan Saliran in a letter dated on the 5th

of

January need to be fulfilled.

Close-out evidence:

Visit during the surveillance visit evident that no construction of bunds, weirs and dams were

observed in the estates. All provisions stipulated in the Department of Irrigation and Drainage

(DID) is fulfilled

29 5.2.1 Date

Recorded> 01/04/09 Due Date> Next surv

Date

Closed>

17 February

2012

Non-Conformance:

Inadequate Identification and assessment of HCV habitats and protected areas within land

holdings; and attempt assessments of HCV habitats and protected areas surrounding

landholdings.

Objective Evidence:

Identification and assessment of HCV habitats and protected areas not undertaken.

i. Identification and assessment of HCV habitats has not been undertaken with the six HCV

values accepted at international level.

ii. Inadequate biodiversity baseline assessment was attempted.

Inspection into the baseline assessment report evidenced several fauna species that is found

observed in the estate that is classified as non-ERT. However, verification in the WCA, 2010

evidenced that three fauna species i.e. white egret and kingfisher are listed as protected species

thus require stakeholder and expert review on ERT identification.

(Minor CAR 29 upgraded to Major CAR 36).

Close-out evidence:

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30 5.6.1 Date


Date

Closed> 17 Feb 12

Non-Conformance:

Inadequate documented plans to mitigate all polluting activities.

Objective Evidence:

Records of plan implementation and monitoring of effectiveness inadequate.

Close-out evidence:

Environment Management Programme (Form MR-03/QSHEP) to mitigate polluting activities for

2011/2012 is in place and implemented highlighting two objectives i.e. (i) Zero Spillage at POME

application and (ii) to achieve black smoke density of less than 40% for less than 15 min per day

for financial year 2011/2012. According to the plan, the data is collected every 3 months. In

addition, records of plan implementation and monitoring of effectiveness is available and

observed.

31 6.1.1 Date


Date

Closed> 17 Feb 12

Non-Conformance:

Inadequate documented social impact assessment including records of meetings.

Objective Evidence:

The SIA still lacks detail and falls short of its own goals and criteria which were outlined in the

methodology/approach

Close-out evidence:

The SIA for the mill as well as the four estates are available outlining the methodology approach

of the document

32 4.4.3 Date


Date

Closed>

Non-Conformance:

Outgoing water into main natural waterways is not monitored at a frequency that reflects the

estates and mills current activities which may have negative impacts

Objective Evidence:

No monitoring takes place for every water analysis taken

Minor CAR 32.

Close-out evidence:

Submitted evidence was insufficient so this CAR is maintained.

33 4.7.1 Date


Date

Closed>

Non-Conformance:

Evidence of documented Occupational Safety Health (OSH) plan that is not compliance with

OSH Act 1994 and Factory and Machinery Act 1967(Act 139).

Objective Evidence:

Visit to the estates observed that workers handling of first aid kit are not properly trained as

evident in Layang-layang and Seri Pulai. First aid is also not present in the working field.

Minor CAR 33.

Close-out evidence:

Submitted evidence do not show that the mandores are competent in handling the first aid kits

after training .

This CAR (mistakenly raised as a Minor when in fact a Major ) is closed and Observation 06 is

raised for the auditors during the next surveillance to verify .

Observation 06 – Raised

34 4.8.1 Date


Date

Closed>

Non-Conformance:

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Inadequate training programme that includes regular assessment of training need and

documentation, including records of training for employees.

Objective Evidence:

Record showed that there is no chemical handling training conducted to Health Assistance. In

addition, the manuring workers are observed to be not adequately trained.

Minor CAR 34.

Close-out evidence:

Submitted evidence do not show that the HA attended the chemical handling or awareness and

the manuring training material and attendance were not able to be produced although the

programme said training was conducted.

This CAR (mistakenly raised as a Minor when in fact a Major ) is closed and Observation 07 is

raised for the auditors during the next surveillance to verify .

Observation 07 – Raised

35 5.1.1 Date

Recorded> 17/02/12 Due Date> 14 Mar 13

Date

Closed> 14 Mar 13

Non-Conformance:

Inadequate documented aspects and impacts risk assessment.

Objective Evidence:

The documented of environmental aspect is incomplete e.g. manuring and replanting.

Minor CAR 35.

Close-out evidence:

The environmental aspect and impact has been updated into HIRARC and made available

during ASA02.

M36 5.2.1 Date

Recorded> 17/02/12 Due Date> 16/05/12

Date

Closed> 14/04/2012

Non-Conformance:

Inadequate Identification and assessment of HCV habitats and protected areas within land

holdings; and attempt assessments of HCV habitats and protected areas surrounding

landholdings.

Objective Evidence:

Inspection into the baseline assessment report evidenced several fauna species that is found

observed in the estate that is classified as non-ERT. However, verification in the WCA, 2010

evidenced that three fauna species i.e. white egret and kingfisher are listed as protected species

thus require stakeholder and expert review on ERT identification.

Close-out evidence:

Sime Darby has submitted the details of stakeholder consultation takes place to identify the

population status of the species listed in the biodiversity assessment. The list of the stakeholder

consulted is also available.

37 5.3.2 Date

Recorded> 17/02/12 Due Date> 16/05/12

Date

Closed> 14/04/2012

Non-Conformance:

Operational plan to avoid or reduce pollution is not properly implemented.

Objective Evidence:

Waste management plan is not properly documented to avoid or to reduce pollution.

Evidenced domestic waste is not segregated at the line site i.e. observed glass, aluminium can,

plastic bottle, and tyre.

In Seri Pulai there is evidence of container of black oil found on the field. In addition, there is

evidence of oil trap is not functioning properly

Minor CAR 37.

Close-out evidence:

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Evidence was submitted to show that :

Waste management plan is properly implemented to avoid or to reduce pollution.

Evidenced domestic waste is now segregated at the line site with the placement of recycle bins

to collect recycle materials

In Seri Pulai, the black oil was sent to the Schedule Waste Store and that the oil trap at the

workshop and the Schedule waste Stroe is now constructed to cater for heavier discharge.

Minor CAR 37 is considered closed

APPENDIX C: TIMEBOUND PLAN

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APPENDIX D: LIST OF STAKEHOLDERS CONTACTED

As this was surveillance no external stakeholders were interviewed.

Interviews were done with the internal stakeholders – e.g Mandores, workers, employees ,

Hospital assistant etc.

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