RSPO PRINCIPLES & CRITERIA CERTIFICATION REPORT ......SGS RSPO (Principles & Criteria) Doc. Number:...

64
SGS RSPO (Principles & Criteria) Doc. Number: GP 7003A Doc. Version date: 01 April 2013 Page: 1 of 64 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: MY03222 Certificate No.: SGS-RSPOPM-MY13/01284 Validity Period: 30/09/2013-29/09/2018 Report Ref. No.: MY03222-SOU 13 Labu Re- Assessment 2012 Report RSPO Membership No.: 1-0008-04-000-00 Client Name: Sime Darby Plantation Sdn Bhd Strategic Operating Unit (SOU) 13 - Labu Website: http://www.simedarby.co m 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: 28 MT/Hr Annual CPO Produced (MT): 26,913.71 Address: Street and number: Town/City State/Country Zip/Postal code Country Head Office Main Tower, Level 3A, Plantation Tower No.2, Jalan PJU 1A/7 Ara Damansara 47301 Petaling Jaya, Selangor Malaysia Tel: (603) 7848 4000 Fax: (603) 7848 4172. Mill Address Pusat Teknologi Kilang Sawit (POMTEC) MPOB, 71900 Labu, Negeri Sembilan, Malaysia. [email protected] Contact Person: Sabarinah Marzuky Assistant Vice President I Phone No.: +603 7848 4388 E-mail: [email protected] Mill Contact Person: Mohd Azhar Md Zain Tel : (606) 791 6795 Fax : (606) 791 6796 Country: Malaysia Plantation Unit Being Evaluated: Supply Base Name & Address Labu Palm Oil Mill and its supply base plantation in SOU 13, Labu, Negeri Sembilan. Total Certified Area (Ha): 6,613.7 ha Total FFB Produced (MT): 124,309.88 Evaluation Date: Main Assessment 24 th - 26 th June 2009 ( by Control Union ) Re- Assessment 8 th 10 th October 2012 ASA 01

Transcript of RSPO PRINCIPLES & CRITERIA CERTIFICATION REPORT ......SGS RSPO (Principles & Criteria) Doc. Number:...

Page 1: RSPO PRINCIPLES & CRITERIA CERTIFICATION REPORT ......SGS RSPO (Principles & Criteria) Doc. Number: GP 7003A Doc. Version date: 01 April 2013Page: 1 of 64 SGS RSPO, SGS (Malaysia)

SGS RSPO

(Principles & Criteria)

Doc. Number: GP 7003A

Doc. Version date: 01 April 2013

Page: 1 of 64

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: MY03222 Certificate No.: SGS-RSPOPM-MY13/01284

Validity Period: 30/09/2013-29/09/2018

Report Ref. No.: MY03222-SOU 13 Labu Re- Assessment 2012 Report

RSPO Membership

No.: 1-0008-04-000-00

Client Name:

Sime Darby Plantation Sdn Bhd

Strategic Operating Unit (SOU) 13 -

Labu

Website: http://www.simedarby.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: 28 MT/Hr Annual CPO

Produced (MT): 26,913.71

Address:

Street and number:

Town/City

State/Country

Zip/Postal code

Country

Head Office

Main Tower, Level 3A, Plantation Tower No.2, Jalan PJU 1A/7 Ara Damansara 47301 Petaling Jaya, Selangor

Malaysia Tel: (603) 7848 4000 Fax: (603) 7848 4172.

Mill Address

Pusat Teknologi Kilang Sawit

(POMTEC) MPOB,

71900 Labu, Negeri Sembilan,

Malaysia.

[email protected]

Contact Person:

Sabarinah Marzuky

Assistant Vice President I

Phone No.: +603 7848 4388

E-mail: [email protected]

Mill Contact Person:

Mohd Azhar Md Zain

Tel : (606) 791 6795

Fax : (606) 791 6796

Country: Malaysia

Plantation Unit

Being Evaluated:

Supply Base Name & Address

Labu Palm Oil Mill and its supply base plantation in SOU 13, Labu, Negeri Sembilan.

Total Certified Area

(Ha):

6,613.7 ha

Total FFB

Produced (MT):

124,309.88

Evaluation Date:

Main Assessment 24th- 26th June 2009 ( by Control Union )

Re- Assessment 8th – 10th October 2012

ASA 01

Page 2: RSPO PRINCIPLES & CRITERIA CERTIFICATION REPORT ......SGS RSPO (Principles & Criteria) Doc. Number: GP 7003A Doc. Version date: 01 April 2013Page: 1 of 64 SGS RSPO, SGS (Malaysia)

GP 7003A Page 2 of 64

ASA 02

ASA 03

ASA 04

End of Public Summary

TABLE OF CONTENTS

SUMMARY ............................................................................................................................................................... 3

List of Abbreviation ................................................................................................................................................ 4

1. scope of certification assessment ......................................................................................................... 5

1.1 National Interpretation Used ..................................................................................................................... 5

1.2 Certification Scope .................................................................................................................................... 6

1.3 Location and Maps .................................................................................................................................... 6

1.4 Description of Supply Base and Mill Processing Capacity ...................................................................... 14

1.5 Date of Planting and Cycle ..................................................................................................................... 15

1.6 Other Certification Held ........................................................................................................................... 15

1.7 Organizational Information and Contact Person ..................................................................................... 15

1.8 Time-bound Plan for Other Management Units ...................................................................................... 16

1.9 Area of Plantation ................................................................................................................................... 16

1.10 Date Certificate Issued and Scope of Certificate ................................................................................ 16

2. Assessment Process ............................................................................................................................. 16

2.1 Certification Body .................................................................................................................................... 17

2.2 Assessment Methodology, Programme, Site Visits ................................................................................ 17

2.3 Qualification of Lead Assessor and Assessment Team.......................................................................... 18

2.4 Stakeholder Consultation and List of Stakeholders Contacted ............................................................... 18

3. Assessment Findings ............................................................................................................................ 19

3.1 Summary of Findings .............................................................................................................................. 19

3.2 Corrective Action Request ...................................................................................................................... 50

3.3 Noteworthy Positive & Negative Observation ......................................................................................... 50

3.4 Status of Non-Conformities Previously Identified .................................................................................... 50

3.5 Issues Raised by Stakeholders and Findings ......................................................................................... 50

4. Acknowledgement of Organization Internal Responsibility .............................................................. 51

4.1 Date of Next Surveillance Visit ................................................................................................................ 51

4.2 Date of Closing Non-Conformities .......................................................................................................... 51

4.3 Acknowledgement of Internal Responsibility and Formal Sign-off Assessment Findings ....................... 52

LIST OF TABLES

Table 1: Mill and Supply Base GPS Location ...................................................................................................... 7

Table 2 : Area and Yield ( 2011/12 ) .................................................................................................................. 14

Page 3: RSPO PRINCIPLES & CRITERIA CERTIFICATION REPORT ......SGS RSPO (Principles & Criteria) Doc. Number: GP 7003A Doc. Version date: 01 April 2013Page: 1 of 64 SGS RSPO, SGS (Malaysia)

GP 7003A Page 3 of 64

Table 3 : Mill Processing Data and Crop Source ( 2011/12) ............................................................................. 14

Table 4 : Age Profile of the Supply Estates ....................................................................................................... 15

Table 5 : Area Statement of the Supplying Estates ........................................................................................... 16

Table 6 : Assessment Programme .................................................................................................................... 17

Table 7: Auditor's Profile .................................................................................................................................... 18

LIST OF FIGURES

Figure 1 : Location Map for the various estate and Mills within peninsular Malaysia ......................................... 8

Figure 2 : Location Map of SOU 13 . ................................................................................................................... 9

Figure 3 : New Labu Estate Layout .................................................................................................................... 10

Figure 4 : Labu Estate Layout ............................................................................................................................ 12

LIST OF APPENDICES

Appendix A : CORRECTIVE ACTION REQUEST & OBSERVATION ............................................................. 53

Appendix B : NON-CONFORMITIES PREVIOUSLY IDENTIFIED .................................................................. 60

Appendix C : TIMEBOUND PLAN ..................................................................................................................... 62

Appendix D : LIST OF STAKEHOLDER CONTACTED ................................................................................... 64

SUMMARY

The 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 make a conscious and concerted effort towards conservation and

Page 4: RSPO PRINCIPLES & CRITERIA CERTIFICATION REPORT ......SGS RSPO (Principles & Criteria) Doc. Number: GP 7003A Doc. Version date: 01 April 2013Page: 1 of 64 SGS RSPO, SGS (Malaysia)

GP 7003A Page 4 of 64

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

well-being of the communities in which it operates.

LIST OF ABBREVIATION

Short Form Meanings

Page 5: RSPO PRINCIPLES & CRITERIA CERTIFICATION REPORT ......SGS RSPO (Principles & Criteria) Doc. Number: GP 7003A Doc. Version date: 01 April 2013Page: 1 of 64 SGS RSPO, SGS (Malaysia)

GP 7003A Page 5 of 64

BOD Biological Oxygen Demand

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

LE Labu Estate

M Meter

Mg Magnesium

Mm Millimeter

Mt Metric ton

MYNI Malaysia National Interpretation

N Nitrogen

NGO Non Governmental Organisation

NLE New Labu Estate

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

PT Pejabat Tanah (Coding for Pahang Land Office)

SOP Standard Operating Procedures

Sdn Bhd Sendirian Berhad (Private Limited)

SEIA Social and Environment Impact Assessment

Sg Sungai or River

SGS Societe Generale de Surveillance

SOP Standard Operating Procedures

SPC Senior Plantation Controller

USECHH Use and Standards of Exposure of Chemicals Hazardous to Health

WHO World Health Organisation

yr Year

1. SCOPE OF CERTIFICATION ASSESSMENT

1.1 Background

Page 6: RSPO PRINCIPLES & CRITERIA CERTIFICATION REPORT ......SGS RSPO (Principles & Criteria) Doc. Number: GP 7003A Doc. Version date: 01 April 2013Page: 1 of 64 SGS RSPO, SGS (Malaysia)

GP 7003A Page 6 of 64

Sime Darby Plantation Sdn Bhd consists of 62 Strategic Operating Unit (SOU) all over Malaysia and Indonesia. The plantation management unit to be audited is known as SOU 13 Business Unit consists of the following: a) Labu Palm Oil Mill, b) Labu Estate c) New Labu Estate. SOU 13 has been audited against the Roundtable on Sustainable Palm Oil (RSPO), Principles and Criteria (P&C) – Malaysia National Interpretation (MYNI). In June 2009, the certification body, Control Union audited and issued a certificate for both SOU 13 ( Labu Palm Oil Mill ) and SOU 15 ( Rantau Palm Oil Mill ) . Sime Darby Plantation Sdn Bhd eventually built another new mill at Sua Betong to replace the Rantau Palm Oil Mill and due to the realignment of the supply base, decided to have the SOU 13 and SOU 15 to be re-audited separately. SGS( Malaysia ) Sdn Bhd was eventually appointed to be the certification body for the audit. Labu Estate located in the Malaysian state of Negeri Sembilan in the district of Labu is made up of 2 division a) Labu Division b) Ampar Tenang Division. Established in the 1930s as a rubber and tea plantation, it is now fully planted with oil palm. Due to the country’s infrastructure rapid development, certain tracts of land had been acquired by the authorities. According to information provided by Labu Estate, Ampar Tenang has been criss-crossed with highways and rail-line and 972 ha has been acquired for future development by Sime Darby Property. New Labu Estate located in the similar district with Labu Estate is also split by the Seremban-Nilai Highway. It is made up of a) New Labu Division and b) Kirby Division. It shares common boundaries with Labu Estates, villages and smallholders. It also has a common boundary with a quarry that is causing siltation on the streams and dust pollution. Certain section of the estate has been demarcated for High Tension Grid power lines. Due to the vicinities with villages, the management faces problems of cattle encroaching into their planted area. The Labu Palm Oil Mill is located within Labu Estate addressed at Pusat Teknologi Kilang Sawit (POMTEC) MPOB, 71900 Labu, Negeri Sembilan, Malaysia. The validity of the certificate is a period of 5 years and subjected to annual surveillance audit. This is the audit report for the Re-assessment which has been conducted on the 8

th – 10

th October 2012.

1.2 National Interpretation Used

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

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

National Interpretation (MY-NIWG November 2010) and RSPO Supply Chain Certification

Standard dated 25 November 2011.

1.3 Certification Scope

The scope of certification includes the operation of Labu 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 MYNI

Standard”.

1.4 Location and Maps

SOU 13 Business Unit is located in Pusat Teknologi Kilang Sawit (POMTEC) MPOB, 71900

Labu, Negeri Sembilan, Malaysia (Figure 1). More detailed information on the estates location

Page 7: RSPO PRINCIPLES & CRITERIA CERTIFICATION REPORT ......SGS RSPO (Principles & Criteria) Doc. Number: GP 7003A Doc. Version date: 01 April 2013Page: 1 of 64 SGS RSPO, SGS (Malaysia)

GP 7003A Page 7 of 64

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 GPS Location

Mill/Supply Base Longitude Latitude

Labu Palm Oil Mill N 02° 44’ 56.0” E 101° 48’ 17.1

Labu N 4°12'90”

E101°51' 45”

New Labu N 4°12'90”

E101°48' 45”

Page 8: RSPO PRINCIPLES & CRITERIA CERTIFICATION REPORT ......SGS RSPO (Principles & Criteria) Doc. Number: GP 7003A Doc. Version date: 01 April 2013Page: 1 of 64 SGS RSPO, SGS (Malaysia)

GP 7003A Page 8 of 64

Figure 1 : Location Map for the various estate and Mills within peninsular Malaysia

Page 9: RSPO PRINCIPLES & CRITERIA CERTIFICATION REPORT ......SGS RSPO (Principles & Criteria) Doc. Number: GP 7003A Doc. Version date: 01 April 2013Page: 1 of 64 SGS RSPO, SGS (Malaysia)

GP 7003A Page 9 of 64

Figure 2 : Location Map of SOU 13 .

SOU 13 Labu

Page 10: RSPO PRINCIPLES & CRITERIA CERTIFICATION REPORT ......SGS RSPO (Principles & Criteria) Doc. Number: GP 7003A Doc. Version date: 01 April 2013Page: 1 of 64 SGS RSPO, SGS (Malaysia)

GP 7003A Page 10 of 64

Figure 3 : New Labu Estate Layout

a) New Labu Estate

i) New Labu Division

Page 11: RSPO PRINCIPLES & CRITERIA CERTIFICATION REPORT ......SGS RSPO (Principles & Criteria) Doc. Number: GP 7003A Doc. Version date: 01 April 2013Page: 1 of 64 SGS RSPO, SGS (Malaysia)

GP 7003A Page 11 of 64

ii) Kirkby Division

Page 12: RSPO PRINCIPLES & CRITERIA CERTIFICATION REPORT ......SGS RSPO (Principles & Criteria) Doc. Number: GP 7003A Doc. Version date: 01 April 2013Page: 1 of 64 SGS RSPO, SGS (Malaysia)

GP 7003A Page 12 of 64

Figure 4 : Labu Estate Layout

b) Labu Estate

i) Main Division

Page 13: RSPO PRINCIPLES & CRITERIA CERTIFICATION REPORT ......SGS RSPO (Principles & Criteria) Doc. Number: GP 7003A Doc. Version date: 01 April 2013Page: 1 of 64 SGS RSPO, SGS (Malaysia)

GP 7003A Page 13 of 64

ii) Ampar Tenang Division

Page 14: RSPO PRINCIPLES & CRITERIA CERTIFICATION REPORT ......SGS RSPO (Principles & Criteria) Doc. Number: GP 7003A Doc. Version date: 01 April 2013Page: 1 of 64 SGS RSPO, SGS (Malaysia)

GP 7003A Page 14 of 64

1.5 Description of Supply Base and Mill Processing Capacity

The FFB is sourced from 2 estates (4 Divisions) which are directly managed by Sime Darby

Plantation Sdn Bhd. The budgeted crop yields from each estate are listed in Table 2 below.

Table 2 : Area and Yield (2011/12)

Name of estate Labu Estate New Labu

Estate

Total

Production Area (ha) 3038.16 1729.66 4767.82

Immature Area ( ha ) 522.53 438.20 960.73

Conservation Area (ha 24.08 ha 60.51 84.59

HCV Area (ha)

Included under

conservation

area

22.35 22.35

Others 49.59 528.62 578.21

Certified Area (ha) 3634.36 2779.34 6,413.7

Annual FFB

Production (MT)

2011/12

65,050.24

Processed in

Labu Mill

:64,036.211 mt

*Others :

443.35 mt Kok

Foh Oil Mill

44.05 mt

Sepang Oil Mill

526.63 mt

Tanah Merah

Oil Mill

* Crop

diversion

43, 702.85

Processed in

Labu Mill

42, 575.23 mt

*Others :

East : 22.02 mt

Tanah Merah

756.44 mt

Kok Foh

349.16mt

* Crop

diversion

108,753.09

Table 3 : Mill Processing Data and Crop Source (2011/12)

Financial Year Mill Production Figures (MT) (Audited Estate)

Page 15: RSPO PRINCIPLES & CRITERIA CERTIFICATION REPORT ......SGS RSPO (Principles & Criteria) Doc. Number: GP 7003A Doc. Version date: 01 April 2013Page: 1 of 64 SGS RSPO, SGS (Malaysia)

GP 7003A Page 15 of 64

(FY11/12) FFB Received FFB Processed CPO Produced PK Produced

Certified Crop 106,611.44 (85%) 105,836.75 22,871.32 5249.50

Crop from other Sime

Darby Estates 17,698.44 (15%) 18,677.07 4042.39 924.78

Outside crop 0 0 0 0

Total 124,309.88 124,513.83 26,913.71 6,174.28

OER: 21.61% KER: 4.96%

1.6 Date of Planting and Cycle

The age profile for the estates are simplified in Table 4 below. Palms are considered mature

after 3 years or 36 months. Palms are normally replanted when they reach the age of 25 years.

A replanting program for all estates involved are available and being projected for the next five

(5) financial years.

Table 4 : Age Profile of the Supply Estates

Name of

supplying

estate

Planting Age (Ha)

Immature

<3 years 4 - 8 years

9-14 years 15-18 years 19 - 25

years >25 years

New Labu 438.20 439.16 810.27 111.91 92.74 275.58

Labu 522.53 990.01 1260.14 62.74 311.00 414.27

Total 960.73 1429.17 2070.41 174.65 403.74 689.85

1.7 Other Certification Held

SOU 13 does not hold any other certifications

1.8 Organizational Information and Contact Person

The company contact person details are as follows:

Name: Sabarinah Marzuky

Designation: ( Assistant Vice President I )

Address: Main Tower, Level 3A,

Plantation Tower

No.2, Jalan PJU 1A/7

Ara Damansara

47301 Petaling Jaya, Selangor

Malaysia

Contact No.: Tel: (603) 7848 4000

Fax: (603) 7848 4172.

Page 16: RSPO PRINCIPLES & CRITERIA CERTIFICATION REPORT ......SGS RSPO (Principles & Criteria) Doc. Number: GP 7003A Doc. Version date: 01 April 2013Page: 1 of 64 SGS RSPO, SGS (Malaysia)

GP 7003A Page 16 of 64

Email address: [email protected]

1.9 Time-bound Plan for Other Management Units

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, Indonesia and Africa. 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.

1.10 Area of Plantation

The areas of supplying estates for this operating unit are listed in Table 4. Details of production

area (mature/immature) are also listed.

Table 5 : Area Statement of the Supplying Estates

Name of supplying estate

Estates Area (Ha)

Immature Mature Area Non-Cultivated Total (Ha)

New Labu 438.20 1729.66 611.48 2779.34

Labu 522.53 3038.16 73.67 3634.36

Total 960.73 4767.82 685.15 6413.70

1.11 Date Certificate Issued and Scope of Certificate

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

The 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

2. ASSESSMENT PROCESS

Page 17: RSPO PRINCIPLES & CRITERIA CERTIFICATION REPORT ......SGS RSPO (Principles & Criteria) Doc. Number: GP 7003A Doc. Version date: 01 April 2013Page: 1 of 64 SGS RSPO, SGS (Malaysia)

GP 7003A Page 17 of 64

2.1 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

than 1180 offices, 321 laboratories and 50’000 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.

2.2 Assessment Methodology, Programme, Site Visits

The assessment was conducted on 8th

Oct 2012 – 10th

Oct 2012 ( 3 audit days ) and

involving 2 estates, namely New Labu Estate and Labu Estate and the Labu Palm Oil Mill of

the SOU 13 Business Unit of 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. A sample of

stakeholders was consulted during the assessment to get their feedback on the management

doing.

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 5 below.

Table 6 : Assessment Programme

Date Location Activities

8th

October 2012 Opening Meeting Visit to Labu Estate

Opening Meeting at Labu Estate, Negeri Sembilan. Audit at Labu Estate (Documentation review, Linesite visit, Workshop and Storage, Riparian/Buffer zone, Field operation, Landfill and Interview Session with workers) Interview session with Stakeholder :

a) Small holders and their cattle issue b) Village Head JKKK

9th

October 2012 Visit to New Labu Estate

Audit at New Labu Estate (Documentation review, Linesite visit, Workshop and Storage, Riparian/Buffer zone, Field operation, Landfill and Interview Session with workers) Interview session with Stakeholder :

c) Orang Asli d) Village Head JKKK

Page 18: RSPO PRINCIPLES & CRITERIA CERTIFICATION REPORT ......SGS RSPO (Principles & Criteria) Doc. Number: GP 7003A Doc. Version date: 01 April 2013Page: 1 of 64 SGS RSPO, SGS (Malaysia)

GP 7003A Page 18 of 64

e) contractors

10th

October 2012 Visit to Labu Palm Oil Mill Closing meeting at Labu Palm Oil Mill

Audit at Labu Palm Oil Mill (Supply Chain and P&C Requirements) Schedule waste disposal, Storage, Linesite and Field operation Documentation review Preliminary results and findings from the audit were presented to the management.

2.3 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

6 below.

Table 7: Auditor's Profile

Evaluation Team Notes

Team Leader -

Plantation

James S H 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 1 –

Social

Mohd Faisal Jaafar is an auditor of Roundtable on Sustainable Palm

Oil (RSPO). He also has been involved in a number of Forest

Management (FM) certification. In addition, he has successfully

completed the RSPO Lead Auditor Course for auditing against RSPO

P&C and have been involved in a number of plantation assessments

and audit of palm oil mill.

Auditor 2 –

Environment &

Supply Chain

Hoo Boon Han is the SGS SEAP Program Coordinator, Bio Fuels

Sustainability. He has successfully completed the RSPO Lead auditor

training course for both P& C as well as the Supply Chain. He has

conducted both P&C audits as well as Supply Chain audits.

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

2.4 Stakeholder Consultation and List of Stakeholders Contacted

As this was a re-assessment, a public announcement was submitted to RSPO for publication 4

weeks before the audit. Similarly a wide range of stakeholders were contacted 4 weeks before

the planned evaluation to inform them of the evaluation and ask for their views on relevant palm

Page 19: RSPO PRINCIPLES & CRITERIA CERTIFICATION REPORT ......SGS RSPO (Principles & Criteria) Doc. Number: GP 7003A Doc. Version date: 01 April 2013Page: 1 of 64 SGS RSPO, SGS (Malaysia)

GP 7003A Page 19 of 64

oil sustainability issues. These included environmental interest groups, local government

agencies and forestry authorities, social groups and workers’ unions etc.

Stakeholder consultation took place in the form of meetings and interviews. During the audit,

meetings with contractors, local village JKKK and indigenous people were conducted in

respective premises within and near the estates. In all the interviews and meetings the purpose

of the audit was clarified at the outset followed by an evaluation of the relationship between the

stakeholder and the company before discussions proceeded in accordance with relevant RSPO

principles, criteria and indicators. See Appendix D for stakeholder’s details and comments.

3. ASSESSMENT FINDINGS

3.1 Summary of Findings

3.1.1 Principles & Criteria

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

for the mill 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.

If there are non-conformities, they will be identified under ‘Major’ or ‘Minor’ during this assessment.

Some areas identified with potential areas for improvement are classified under ‘Observations’ in the

P& C. If the non-conformities evidence submitted of the closing of ‘Major’ or ‘Minor’ is insufficient, an

Observation may be raised.

As for the RSPO Supply Chain for the Mill, all non-conformities raised are considered as ‘Major’.

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

Major Non-conformities have to be 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 the RSPO approval of

Main Assessment.

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:

The estates are maintaining records on request and responds to the related

stakeholders, workers and community.

Objective evidence: The auditors checked on the records as below:

a) Complaints Books / for repairs of line-site

b) Housing repair file – records the repair done

c) CSR file – for request from other stakeholders. e.g.: school requesting for grass cutting,

access through the estate. e.g.: Propel programme for grass cutting

d) ‘Others’ file – record of religious and miscellaneous request. Letter of permission granted

Page 20: RSPO PRINCIPLES & CRITERIA CERTIFICATION REPORT ......SGS RSPO (Principles & Criteria) Doc. Number: GP 7003A Doc. Version date: 01 April 2013Page: 1 of 64 SGS RSPO, SGS (Malaysia)

GP 7003A Page 20 of 64

available.

e)

Observation 01

Labu Estate: Record of action undertaken by estate for stakeholder in the CSR file lacking

although the work is done e.g. grass cutting done in school.

NLE: ‘Buku aduan’ or grievance book was not at the designated box

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)

Findings In compliance: Yes: x No:

Objective

evidence:

The auditors observed evidence of land titles and related documents as follow:

a. Quit rent file. In the records Labu Estate has 19 Land titles with payment of Quit Rent

amounting to RM 148,533.

b. For Ampar Tenang Division, the land was transferred to the Property Division and the quit

rent is paid by the Division.

1.2.2 Safety and health plan (C 4.7)

Findings In compliance: Yes: x No:

Objective

evidence:

The auditors observed evidence of safety and health plan as follow:

a. Objective , Management program & Action Plan

b. Safety and Health plan

1.2.3 Plans and impact assessment relating to environmental and social impacts

(C 5.1, 6.1, 7.1, 7.3)

Findings In compliance: Yes: x No:

Objective

evidence: Plans and impact assessment relating to environmental and social impacts are documented.

Evidence for the identification of environmental aspects and impacts at the mill and estates level are available that is prepared by the OSH coordinator and approved by the manager. There is a provision to review these aspects and impacts annually.

There is evidence of Social Management Plan that is reviewed annually. The management plan describes the plan for mitigate the impacts as identified in the SIA as well as plan to monitor the impact such as safety and health in working environment

1.2.4 Pollution Prevention Plan (C 5.6)

Findings In compliance: Yes: x No:

Objective

evidence: The Pollution Prevention Plan is captured in the Environmental Improvement and Pollution Prevention Plan file.

It identifies the source of the pollution and means to mitigate the identified pollution activities

1.2.5 Details of complaints and Grievances (C 6.3)

Findings In compliance: Yes: x No:

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)

Findings In compliance: Yes: x No:

Page 21: RSPO PRINCIPLES & CRITERIA CERTIFICATION REPORT ......SGS RSPO (Principles & Criteria) Doc. Number: GP 7003A Doc. Version date: 01 April 2013Page: 1 of 64 SGS RSPO, SGS (Malaysia)

GP 7003A Page 21 of 64

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)

Findings In compliance: Yes: x No:

Objective

evidence: The Sime Darby website http://www.simedarbyplantation.com shows the commitment of the Group towards social, sustainability and the care for the environment.

Yearly, the estates and mill will prepare their following year’s budget after identifying areas of improvement and expenditure.

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

Findings In compliance: Yes: x No:

Objective

evidence:

The company are operating in compliance with Malaysian legal requirement such as Land Titles,

Operating Permit, Fire Extinguisher, Air Compressor, Diesel Permit and License.

The mill operating licences and permits are available on the premise wall. The mill water source

comes from Sungai Jijan, Mukim Labu, Seremban, Negeri Sembilan which was being diverted into

a pond before pumped into the reservoir with a legal licence. The license allows the mill to extract

water at the quantity on 216,000m3 for commercial use.

Some of the legal compliances viewed at the mill are:

a. MPOB Licence: 528298004000 ( 1 April 2012 - 31 March 2013) for 96,000MT FFB

b. DOE Licence: 002075 (1 July 2012 – 30 Jun 2013) for 30 MT per hour capacity. The

discharge method of wastewater allowed by the Department of Environment (DOE) is

through Land Application.

c. IDD License: BKSA-SBN/752/11/2012/0061( 5/5/2012-4/5/2013) – Irrigation and Drainage

Department (IDD)

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

Findings In compliance: Yes: x No:

Objective

evidence:

The operating unit have documented their system which includes information on legal

requirements in Malaysia. The information and copy of licence are kept at individual estate as

reference.

Objective evidence:

The auditor evidence sufficient available documents as follow:

a. Legal Requirement Register file

b. LORR: Legal and Other Requirements Register

Occupational Safety and Health

Factories and Machineries

Uniform Building By law

Pesticide

Electrical supply

Petroleum

Fire Services

Enviroment Quality

Local Government

Page 22: RSPO PRINCIPLES & CRITERIA CERTIFICATION REPORT ......SGS RSPO (Principles & Criteria) Doc. Number: GP 7003A Doc. Version date: 01 April 2013Page: 1 of 64 SGS RSPO, SGS (Malaysia)

GP 7003A Page 22 of 64

Housing and

Amenities

Labour

EPF

SOCSO

Union

Sime Darby ( GPA)

Jadual Pematuhan ( DOE )

2.1.3 A mechanism for ensuring that they are implemented Minor

Findings In compliance: Yes: x No:

Objective

evidence:

The operating unit was implementing a documented system to ensure that all legal regulations

and requirements are in place.

Documents as follow:

a. Legal Requirement Register file

b. The management of the estate or the mill will be responsible that all the permits and

licences are renewed and updated.

2.1.4 A system for tracking any changes in the law Minor

Findings In compliance: Yes: x No:

Objective

evidence:

Sime Darby Plantation has established a Legal Division to monitor any changes required by the

law. All information and updates will be notified to the operating unit through letter and email from

the TQSM team.

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

Findings In compliance: Yes: x No:

Objective

evidence: Legal ownership including history of land tenure is evidence through the presentation of the land titles and the payment of quit rent.

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

Findings In compliance: Yes: x No:

Objective

evidence:

Observed that both Labu Estate and New Labu Estate have been established since 1930’s and

has no land issue.

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

Minor

Findings In compliance: Yes: x No:

Objective

evidence:

The availability of boundary stones map in the estate and on-site observation by auditor during

site visit.

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

Findings In compliance: Yes: x No:

Objective

evidence:

There is no land issue as this estate has been established since 1930’s. However, procedure for

complaints and grievance is available in company websites for Boundary Disputes, Squatter

Page 23: RSPO PRINCIPLES & CRITERIA CERTIFICATION REPORT ......SGS RSPO (Principles & Criteria) Doc. Number: GP 7003A Doc. Version date: 01 April 2013Page: 1 of 64 SGS RSPO, SGS (Malaysia)

GP 7003A Page 23 of 64

Disputes and Social Issues.

The procedures of complaint and disputes is available can be referred on the company website at:

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

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

Findings In compliance: Yes: x No:

Objective

evidence:

There was no land issue since the establishment of these estates.

Land titles are available for the auditors to show the rights on the area.

A map of the boundary stones and land surveyed are available for the auditors during the audit.

Area statements are also available at the estates.

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

Findings In compliance: Yes: x No:

Objective

evidence:

There was no land issue or disputes since the establishment of these estates. Land titles are

available for the auditors to show the rights on the area.

Maps of appropriate scale that show the blocks and the surroundings were available at site.

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

Findings In compliance: Yes: x No:

Objective

evidence: There was no land issue or disputes since the establishment of these estates. All copies of legal negotiations are kept by the legal division of Sime Darby Plantation Sdn Bhd

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

Findings In compliance: Yes: x No:

Objective

evidence:

Annual budget projection for the estates is available for five years period. The evidence was

shown to the auditors through access of soft copy in “BPC-Citrix Computer System” in Sime Darby

Plantation System. The budget has been projected up to financial year 2015/2016.

The auditors evidence available documents as follow:

a. Master Plan FY 2012/2013 Budget Report

b. BPC-Citrix Computer System

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

Findings In compliance: Yes: x No:

Objective

evidence:

Estates Replanting Programme for five year is available. Replanting program for this financial year

2011/2012 has been completely conducted as program.

Documents available during the audit is:

a. Estate Replanting Program FY 2013/2017

b. Five year Replanting Program for Labu and New Labu Estate

2013 2014 2015 2016 2017

LE 171.08 Nil 84 43 Nil

Page 24: RSPO PRINCIPLES & CRITERIA CERTIFICATION REPORT ......SGS RSPO (Principles & Criteria) Doc. Number: GP 7003A Doc. Version date: 01 April 2013Page: 1 of 64 SGS RSPO, SGS (Malaysia)

GP 7003A Page 24 of 64

NLE 99.34 Nil 65.11 Nil Nil

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

Findings In compliance:

Yes: x No:

Objective

evidence:

Both Labu Estate and New Labu estate have group Standard Operating Procedure as “SOP for

Oil Palm Estates” version 1:2008 and issued on 1 November 2008 and the ‘Estate Quality

Management system/2008’. The document describes operational procedure of nursery practice,

estate upkeep and cultivation, harvesting and collection, employee’s welfare as well as

workshop and maintenance.

For the Mill:

Ref: Quality management Manual(QMM) for the Palm Oil Mill

SOP for the operation

Standard Operation Manual – management and documentation

Labu Palm Oil Mill has documented Standard Operating Procedure (SOP) (MQMS/SOP/08) and

Standard Operating Manual (SOM) version 1:2008 and issued on 1 November 2008. The SOP

contains the information on the process involve as follows:

a) Reception Station,

b) Fruit Handling Station,

c) Sterilization 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 and Despatch,

l) Laboratory,

m) Oil Recovery Station,

n) Water Treatment Plant,

o) Effluent Treatment Plant, and

p) Workshop and Maintenance

q) Training needs with regard to the operating procedure and safety and health.

The SOM indicates sectional information of process involved in the Quality Management

System, Management Responsibility, Resource Management, Product Realization and

Measurement Analysis and Improvement.

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

Minor

Findings In compliance:

Yes: x No:

Objective evidence:

It was observed that records of monitoring for period July 2011 to June 2012 was shown to the

auditors. The Unit uses this to monitor the effectiveness of the SOP and its safety.

In Labu Estate : Records of ‘Pemeriksaan Tempat Bekerja / Work place inspection ‘ records to

monitor work done available for Mar 2012 and Jul 2011.

Similarly for the Mill : Records of ‘Pemeriksaan Tempat Bekerja/ Work place inspection’ records

to monitor work done available .

Observation 02

Page 25: RSPO PRINCIPLES & CRITERIA CERTIFICATION REPORT ......SGS RSPO (Principles & Criteria) Doc. Number: GP 7003A Doc. Version date: 01 April 2013Page: 1 of 64 SGS RSPO, SGS (Malaysia)

GP 7003A Page 25 of 64

Nevertheless it was shown that this monitoring was not updated :

e.g.

Labu Estate: This record was not updated as the next monitoring in Jun12-Jul 12 was not available

For the mill , the records show this monitoring was done May 2012 and Oct 2011, when the inspection need to be conducted every 3 months as per SOP ‘Occupational Safety and Health manual – Workplace inspection’

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

Findings In compliance:

Yes: x No:

Objective

evidence:

Both Labu and New Labu Estate received the fertilizer recommendations from agronomist of

Sime Darby Plantation. The fertilizer recommendations provided are based on leaf analysis that

carried out annually. The results obtained are followed by fertilizer recommendations from Sime

Darby Plantation R&D for annual manuring program.

The quantity of fertilizer and dosage recommended from the agronomist can be found in the

files (New Labu Estate Actual Monitoring Application for Month) together with the records of

applications (Dates, Quantity of Bags Applied, and Field Applied).

Field 2006A recommended applying with Ammonium Chloride, Muriate of Potash and Rock

Phosphate however they are using CCM 44 with the advice from the agronomist.

The auditors observed annual Manuring Program for Estate which evidences the Agronomic &

Fertilizer recommendation FY2011/2012. Examples of fertilizer applied is:

a. Field : 03A

b. Quantity Applied: 2kg Muriate of Potash/Palm (as recommended by the Agronomist)

c. Application Period: July 2012 to September 2012

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

Minor

Findings In compliance:

Yes: x No:

Objective

evidence:

The foliar sampling and analysis in New Labu Estate are conducted by the agronomist annually.

The last analysis found conducted in October 2011 for 2012 fertilizer recommendation. The

analysis including annual rainfall records as well as the manuring history.

The report is prepared by Mr. Shaharudin Bakar, titled ‘New Labu Estate 2012 Agronomic and

Fertilizer Recommendations Report-Oil Palm’.

Leaf sampling for Labu estate has been conducted in March 2012 while latest soil sampling was

conducted in 2010. The group Plantation Manual referred stated that soil sampling will be

monitored every 5 years.

Objective evidence:

Documents and records observed by the auditors is:

a. Research and Analysis File

b. 2012/2013 Agronomic & Fertilizer Recommendation Report (9th July 2012)

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

Findings In compliance:

Yes: x No:

Objective

evidence:

Zero-burn policy advocated during replanting.

The EFB applied at the inter-row of palm oil and the records of field applied, date of

application and quantity applied are recorded. Ref: Monitoring and Measurement file.

Page 26: RSPO PRINCIPLES & CRITERIA CERTIFICATION REPORT ......SGS RSPO (Principles & Criteria) Doc. Number: GP 7003A Doc. Version date: 01 April 2013Page: 1 of 64 SGS RSPO, SGS (Malaysia)

GP 7003A Page 26 of 64

FY12/13 mature: EFB Application Programme records the application for the fields using the

‘Giltrap’ application method.

Eg in 01E the following was recorded and applied:

Month Quantity ( MT )

Jul 395.25

Aug 1331.27

Sept 100.79

LE receives the palm effluent from the Mill through the Land application system. For

example: POME is applied in field 03A. The latest result recorded was in Feb 2011.

Volume recorded: 1,406 MT.

Mill: In the Daily EFB Report, records of the daily delivery of EFB to the estate

are documented.

The mill records the amount sent to the estate. Date delivered NLE LE

6 Oct 2012 36.7 MT 100.82 MT

2 Sept 2012 257.25 MT 2,720.177 MT

Mill also monitors the quantity of POME released to the estate. Samples taken from the

discharge drain and monitored daily before released to the field. Records of POME

recorded in the ‘Quarterly Returns Raw Effluent ‘ book.

In Sept 2012, 7,837.20 m3 was pump to the estate for Land Application( LA) .

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

Findings In compliance:

Yes: x No:

Objective

evidence:

SOP for practices of Soil conservation documented.

Road maintenance program for both estates are available during the audit.

Soil and contour map is available to monitor potential erosion area in the estates.

4.3.2 Avoid or minimize bare or exposed soil within estates Minor

Findings In compliance:

Yes: x No:

Objective

evidence:

The estates maintain no bare area to reduce soil erosion. All bare area was planted with

legume cover crop to avoid soil erosion.

The estates maintain soft grasses and ferns in open and bare area. All replanting area

were planted with cover crop at the ratio of 13kg per ha.

Spraying is confined to circles as well as selective weeding

Road maintenance program for both estates are available during the audit. Soil and

contour map is available to monitor potential erosion area in the estates.

4.3.3 Presence of road maintenance programme Minor

Findings In compliance:

Yes: No: x

Objective

evidence:

The estate management has allocated budget the budget for road maintenance and upkeep in

order to minimize soil erosion in the plantation area. Road upkeep and maintenance will be

Page 27: RSPO PRINCIPLES & CRITERIA CERTIFICATION REPORT ......SGS RSPO (Principles & Criteria) Doc. Number: GP 7003A Doc. Version date: 01 April 2013Page: 1 of 64 SGS RSPO, SGS (Malaysia)

GP 7003A Page 27 of 64

conducted when necessary although the budget has been allocated. The records of roads

repaired and machineries for road maintenance is evidence.

The objective evidence observed during the audit are as follows:

a. Monitoring and Maintenance FY2012/2013 file

b. Examples of budget allocated for Labu Estate evidence by the auditor is:

i. Road upkeep: RM 66,361.50

ii. Bridge upkeep: RM 3,079.97

iii. Culvert maintenance/construction: RM 11,231.96

Minor 01

However in New Labu Estate, there was erosion along the F2006 road as well as the stream

crossing at the TNB-Goat shed area.

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

Minor

Findings In compliance:

Yes: x No:

Objective

evidence:

There is no peat area observed in the estate.

However, the estate has maintained buffer zone area for riverine and streams in order to

maintain the watercourses.

Soil and topography map was available

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

Findings In compliance:

Yes: x No:

Objective

evidence:

There is no fragile soil evidence in the estate area during the audit.

The soil map available. Type of soils: Renggam and Serdang series.

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:

The estates StOP mentioned about the maintenance and protection of watercourses and

riparian. The buffer zone has been specified according to the riverine/stream size.

Major 02

The auditors found evidence occurrence of spot spraying activities in the buffer zone area in

New Labu estate (Field F-2006).

During visit to Labu Estate, Field F06-A-01C in Sungai Jijan, the auditors observed scorching

on the weeds due to fertiliser application around palms within the buffer zone area.

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

Major

Findings In compliance:

Yes: x No:

Objective

evidence:

There was no evidence of bunds constructed across the main rives and waterways in the estate

during the audit visit.

Page 28: RSPO PRINCIPLES & CRITERIA CERTIFICATION REPORT ......SGS RSPO (Principles & Criteria) Doc. Number: GP 7003A Doc. Version date: 01 April 2013Page: 1 of 64 SGS RSPO, SGS (Malaysia)

GP 7003A Page 28 of 64

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

Findings In compliance:

Yes: No:

Objective

evidence:

Ref: Water management file

NLE did monitor the water quality that flowing in and out from the estate. The April 2012 results

of outgoing water quality monitored in the upstream, mid-stream and downstream are available.

The mill also keeps a record of water quality for discharge which is allowed by Department of

Environment. The BOD allowable at 3 days, 30°C must not be more than 5000mg/L.

The records of monthly submission to the DOE about the BOD analysis as well as daily reading

of the quantity discharge is available in the DOE Return File.

The water samples were also submitted to Sime Darby Laboratory for monitoring and the

results from Chemist were found available.

E.g.

Month BOD mg/l Volume ( m3)

Sept 12 780 6,431.60

Aug 12 710 7,610.40

Jul 12 301 3,976

Observation 03

NLE: Results were available but no comments were provided to explain the analysis.

Map to show where the sample taken from need to be updated (so that the next management

team is aware of the location).

The presence/absence of the ‘natural reservoir ‘also need to be corrected.

4.4.4 Monitoring rainfall data for proper water management Minor

Findings In compliance:

Yes: x No:

Objective

evidence:

The estates collects and monitors the daily rainfall data

Observed in Labu Estate, a log book “Rainfall Monitoring” is use to records daily rainfall data.

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

Findings In compliance:

Yes: x No:

Objective

evidence:

Labu Palm Oil Mill monitors the usage of water in their daily operation.

Observed from the Monitoring and Measurement File, the monthly record for water consumption

for year 2012/2013 is tabulated in graph to monitor the trend.

For the period of one year, the monthly water consumption per tonne FFB range from 1.20 to

1.98 in March and July 2012.

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

Minor

Findings In compliance:

Yes: x No:

Objective

evidence:

Water is not drain into protected areas

Page 29: RSPO PRINCIPLES & CRITERIA CERTIFICATION REPORT ......SGS RSPO (Principles & Criteria) Doc. Number: GP 7003A Doc. Version date: 01 April 2013Page: 1 of 64 SGS RSPO, SGS (Malaysia)

GP 7003A Page 29 of 64

4.4.7 Evidence of water management plans Minor

Findings In compliance:

Yes: x No:

Objective

evidence:

Water Management Plan for Labu and New Labu Estate is available during the audit.

The water management plan contains the information of:

a. Action plan for reduction of water usage (for the workshop and nursery)

b. Rainfall record

c. Records of summary water charges

d. Contingency plans during water shortage FY 12/13

Labu Palm Oil Mill‘s Water Management Plan is also available.

a) Records of water abstracted into the water treatment plant.

b) Water is sourced from a man-made reservoir beside Sg. Jijan

c) Quantity of water abstracted is monitored daily and summarized.

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

Findings In compliance:

Yes: x No:

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

4.5.2 Monitoring extent of IPM implementation for major pests Minor

Findings In compliance:

Yes: x No:

Objective

evidence:

The monitoring of pest attack in the estate is carried out for:

a) Rhino beetles

b) Rats

c) Termites

d) Bagworm

e) Cattle

f) Ganoderma

The estate are handling and monitoring Rhino Beetles attack by doing census and using

spraying techniques at bi-weekly programme.

Due to low incidence and occurrence of rats attack, the operating unit just doing “Campaign

Baiting” every six month to control the rat population in their estates. Each campaign is 5 to 6

rounds in every 4 to 7 days. The operating unit is using Warfarin for the baiting campaign. Once

the replacement is <20%, baiting ceases.

Barn owl is used in the estates as a biological control for rats .

A Monitoring File keeps a record of last census of Barn Owl Box. The census conducted in

September 2012 identified:

a. No. Of Boxes: 171

b. Boxes Occupied: 47

c. Ratio 1:17

4.5.3 Recording areas where pesticides have been used Minor

Findings In compliance:

Yes: x No:

Objective The management unit are monitoring the records of chemical activities in the estates. The

Page 30: RSPO PRINCIPLES & CRITERIA CERTIFICATION REPORT ......SGS RSPO (Principles & Criteria) Doc. Number: GP 7003A Doc. Version date: 01 April 2013Page: 1 of 64 SGS RSPO, SGS (Malaysia)

GP 7003A Page 30 of 64

evidence: records of chemical issued and field for application were recorded in the Chemical Stock

records issued by the store keeper.

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

Findings In compliance:

Yes: x No:

Objective

evidence:

During the audit, the Analysis of Data file is viewed by the auditor.

The quantity of pesticides usage is monitored on a monthly basis.

The records of date of application, workers name, chemical name and quantity are

available in the daily records.

The quantity of pesticides (a.i) usage per hectare and per kilogram of FFB processed

are as follows:

Month kg a.i/hectare kg a.i/FFB processed

Sep 2012 2.181 0.94

Aug 2012 0.777 0.308

Jul 2012 0.121 0.046

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.

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

Major

Findings In compliance:

Yes: x No:

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

Findings In compliance:

Yes: x No:

Objective

evidence:

It was observed that all the herbicides and pesticide used are those officially registered in

Malaysia.

Observation 04

However in LE: Older herbicide e.g. tri- ester herbicide not used up but kept in store.

4.6.3 Pesticides shall be restored 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

Findings In compliance:

Yes: No: x

Objective

evidence:

The Chemical store in New Labu Estate was found to be systematically stored in a good

ventilation building and locked with alarm system. The MSDS for all chemical stored is found

available during the audit.

In LE, Storage in the Main as well as the nursery store was proper.

Nevertheless there were some storage , safety and environmental issues identified during our

Page 31: RSPO PRINCIPLES & CRITERIA CERTIFICATION REPORT ......SGS RSPO (Principles & Criteria) Doc. Number: GP 7003A Doc. Version date: 01 April 2013Page: 1 of 64 SGS RSPO, SGS (Malaysia)

GP 7003A Page 31 of 64

audit :

Major 03

In NLE Nursery store :

a) Lack MSDS

b) Empty chemical containers not sent to the empty container store for proper storage &

disposal

c) Improper disposal as empty chemical box, Antracol found in the dustbin

d) Proper stacking and records

e) NLE: Reuse as an oil or fuel storage container. ( still has the label ) at the water pump at

the seedling nursery

At the Line site :

a) NLE: Reuse of empty chemical container as a potting container / chilli seedlings

b) NLE: Reuse as a loose fruit scraper ( found in the line site )

c) LE: Reuse of empty container as a planting pot as well as a clothes soaking

container at the line site

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

Findings In compliance:

Yes: x No:

Objective

evidence:

Emergency Response Plan is available in the chemical store and workshop. All chemical in the

chemical store were attached with complete MSDS and handling instruction. The MSDS were

prepared in English and Bahasa Melayu to make in understandable by the workers.

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

Findings In compliance:

Yes: x No:

Objective

evidence:

Records of medical surveillance conducted on 5 March 2011 are viewed for 9 pesticide

operators.

OSH practitioner Dr. Premalathe Das,

New list of Medical Surveillance for sprayers conducted on 3rd

September 2012 are

available. The result of medical surveillance for new workers is still in progress.

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

Findings In compliance:

Yes: xx No:

Objective

evidence:

The company SOP stated that pregnant and breast feeding women were not allowed to do

spraying work. During the visit in New Labu Estate, the estate did not have female sprayers.

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

Findings In compliance:

Yes: x No:

Objective

evidence:

The approved list of herbicide is available during the audit. Observed that no Paraquat used in

the estate operation.

Page 32: RSPO PRINCIPLES & CRITERIA CERTIFICATION REPORT ......SGS RSPO (Principles & Criteria) Doc. Number: GP 7003A Doc. Version date: 01 April 2013Page: 1 of 64 SGS RSPO, SGS (Malaysia)

GP 7003A Page 32 of 64

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

Major

Findings In compliance:

Yes: x No:

Objective

evidence:

There is no aerial spraying activity conducted in the estate.

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

Minor

Findings In compliance:

Yes: x No:

Objective

evidence: There was no request by buyers for evidence of chemical residues in CPO testing.

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

Findings In compliance:

Yes: x No:

Objective

evidence:

Records of pesticides used in estate operation are available. The estates also provide Master

Plan for Circle and Spot Spraying FY 2012/2013. The auditors evidence the record of pest and

disease activities which kept in P&D Costing Book.

Examples of the information recorded are as follows:

NLE

a) Date: 18/8/12

b) Chemical Name: Cypermethrin

c) Field: 2009

d) Area: 21.43 ha

e) Chemical Quantity: 16L

f) Labour Cost: RM 163.20 ( mandays: 6 )

g) Chemical Cost: RM 112.00 ( 16 lits )

h) Transportation Cost: RM 104.00

i) Cost/ha: RM 17.69

Records of herbicide spraying were recorded in the Spraying Costing Book. Examples of

records kept are as follows:

a) Date: 6 October 2012

b) Chemical Name: Kenlon

c) Field: 2006

d) Area: 12.16 ha

e) Workers: 6 (60 pumps)

f) Chemical Cost: RM 99.05

g) Labour Cost: RM 163.20

h) Cost per Ha: RM 21.56

The evidence of the spraying program is as follows:

a) Spraying and Costing Books FY 2012/2013

b) MPlan for Selective Spraying (2012/2013)

c) MPlan for Circle Spraying (2012/2013)

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

Page 33: RSPO PRINCIPLES & CRITERIA CERTIFICATION REPORT ......SGS RSPO (Principles & Criteria) Doc. Number: GP 7003A Doc. Version date: 01 April 2013Page: 1 of 64 SGS RSPO, SGS (Malaysia)

GP 7003A Page 33 of 64

Findings In compliance:

Yes: No: x

Objective

evidence:

Sime Darby has adequately documented the occupational health and safety plan, which includes a health and safety policy, work procedures, training and monitoring system.

Workers have been trained in safe working practices and PPE supplied for all workers, both in the estates and mills. There is a daily briefing by the supervisors during the morning call for workers prior to commencing work, during which workers are reminded of OSH requirements and their PPE checked.

Ref: PPE Records: PPE matrix records the PPE required for the operation. ‘Permit to work’ form records the type of work as well as the PPE required to be used for the work.

Procedure for Identification of Hazard, Risk Assessment and Risk Control dated April

2008 is made available. The procedure describes the method in conducting the

assessment that need to be conducted on yearly basis. This is review yearly or done

after every accident. When an accident happen, a report is submitted to JKKP to

inform of the accident and SOCSO for compensation claim.

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 are

maintained and available that is classified according to the job list and working

environment. However, the auditor note that the risk assessment for 2012 is not

updated to take into consideration of the review and findings evident based on the

accident occur for the 2011.

For the Mill , En Abd Rahim Omar , Supervisor ( 1 st Ogos 2012 ) has been appointed as

safety site supervisor

With regard to the OSH Meeting, the Meeting has been conducted i.e. on 26 March 2012

and 26 September 2012 for New Labu Estate. Minutes of the meeting conducted in

March is available to the auditing during the audit. Nevertheless, for the meeting

conducted in September 2012, there are no minutes available yet. Both meeting was

chaired by the Senior Assistant Manager of the estate and attended various members

representing the workers as well as the management of the company.

On the other hand, the OSH Meeting for Labu Estate has been conducted thre times in

2011 i.e. on 13 March 2012, 12 June 2012 and 12 September 2012. The Minutes of

meetings are maintained and made available to the auditors during the audit. All

meetings conducted in Labu Estate are chaired by the Estate Manager and attended

by various members representing the workers as well as the management of the

company.

OSH meeting s for the mill are filed in the ‘Training Records and Minutes of meeting’

meetings are conducted quarterly . The latest meeting was held 14th Sept 2012. The

previous meeting 14th Jun 2012.

All of the OSH Meeting discussed the following matters:

Safety and accident reports at quarterly basis;

Inspection at the working area;

Training report and record;

Health report;

Arising matters and recommendation.

ERP and first aid kits were found at the sites.

Although there were documented evidence on OSH nevertheless the following were some

implementation issues that were identified during the audit:

Major 04

LE: Pesticide Spray at 11B . Spray worker Muslimin did not have his goggles and

another sprayer’s spray equipment was leaking at the trigger handle.

Page 34: RSPO PRINCIPLES & CRITERIA CERTIFICATION REPORT ......SGS RSPO (Principles & Criteria) Doc. Number: GP 7003A Doc. Version date: 01 April 2013Page: 1 of 64 SGS RSPO, SGS (Malaysia)

GP 7003A Page 34 of 64

NLE: Sickles without its cover found at the line site

NLE: Update the information at the nursery store ( still has the former company

‘Synergy Drive’ letterhead)

LE : First aid item leaking till empty in the first aid kit – Pesticide mandore Bakri

Mill : to update the PPE matrix form

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

Major

Findings In compliance:

Yes: X No:

Objective

evidence:

Records is kept of all accidents and periodically reviewed at quarterly intervals.

Accident records are recorded in the Accident, Incident and NCR Record and Forms. All

accidents records are found to be reviewed on a case by case basis and the findings during the

review process are forwarded for further discussion during the OSH Meeting.

In addition, 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 May 2012

that is the month whereby the recent accident occurs is available and maintained.

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. According to the

records, the latest submission of Borang JKKP 8 was submitted in January 2012.

4.7.3 Workers should be covered by accident insurance Major

Findings In compliance:

Yes: x No:

Objective

evidence:

All the workers in Labu Estate found to cover by insurance. There is also insurance

policy available to cover the workers (both local and foreign workers) through the

group insurance. During the audit, the insurance policy for workers bearing policy

number FW025701E07 (New Labu Estate), 0285500585 (Labu Estate) and

CKRRM035 (Mill) are available to the auditors.

Records and letters of contribution to NUPW are available for auditors. Evidence in the

payslip show monthly deduction from salary for NUPW contribution with amount RM

11.00 per month.

Some of the workers willing to purchase own insurance policy to add more protection for

them. All the letters of NUPW compiled in NUPW File No. 9 and cross reference done

through workers payslip.

Local Workers working with Sime Darby are covered with EPF and SOCSO that is paid

on monthly basis.

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

Findings In compliance:

Yes: x No:

Objective

evidence:

Training records for executives, staffs and workers are kept and available in Training and

Learning File 06. All training comes with Borang Latihan dan Pembangunan and attendance

records as compiled in Training and Learning File 06. Occupational Safety and Health Training

and Activity Plan 2012/2013 are also available. Training done in 2012 can be listed as follows:

a) Chemical Handling Training – Mr. Yogeswaran – 27 Apr 2012

b) Safety Awareness PPE for Sprayers – Bayer Crop Science – 29 Sep 12

c) ISCC Briefing – 28 Mar 12

d) Calibration of Spraying Equipment – 11 May 12

e) First Aid Training – 5 Sept 12

Page 35: RSPO PRINCIPLES & CRITERIA CERTIFICATION REPORT ......SGS RSPO (Principles & Criteria) Doc. Number: GP 7003A Doc. Version date: 01 April 2013Page: 1 of 64 SGS RSPO, SGS (Malaysia)

GP 7003A Page 35 of 64

f) Harvesting Operations – 19 Jul 12

Labu Estate are doing risk assessment for all activity involved in daily operations. The reports of

risk assessment carried out are compiled in Hazard Identification, Risk Assessment and Risk

Control (HIRARC-OSH File 02).

For the Mill : Records of training conducted are observed through:

a) Sime Darby Training File

b) Training Plan FY 2012/2013

c) Training Attendance Records

Observation 05

Mill : Competency records lacking for employees

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

Findings In compliance:

Yes: x No:

Objective

evidence:

Documented evidence for the identification of environmental aspects and impacts at the mill

and estates level are available that is prepared by the OSH coordinator and approved by the

manager. 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 management activities in SOU 13 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

Findings In compliance:

Yes: x No:

Objective

evidence:

Environmental improvement plan is implemented through the establishment and implementation of environmental impact evaluation matrixes.

Activities with high environmental impact rating have proposed mitigation measures whereas low impact activities are monitored.

Furthermore, Environmental Improvement and Pollution Prevention Plan is evident during the main assessment as a means to mitigate the identified pollution 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

Findings In compliance:

Yes: x No:

Objective There is a Biodiversity Baseline Assessment Report for SOU 13 for both Estates and Mill dated

April 2009. The document specifies the assessment process in summary covering the objective

Page 36: RSPO PRINCIPLES & CRITERIA CERTIFICATION REPORT ......SGS RSPO (Principles & Criteria) Doc. Number: GP 7003A Doc. Version date: 01 April 2013Page: 1 of 64 SGS RSPO, SGS (Malaysia)

GP 7003A Page 36 of 64

evidence: of the assessment, the scope of the assessment, biodiversity assessment process covering the

methodology for the assessment, the findings, and the 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.

Latest revision of the HCV assessment has been conducted on February 2012 to includes the action plan to be implemented covering all the identified HCV

Observation 06

Classification of the river/stream as HCV or buffer zone is still unclear.

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

Findings In compliance:

Yes: x No:

Objective

evidence:

Based on the assessment conducted, the company has identified the method in managing the

HCV identified that covers the following:

Each areas identified to be set aside for conservation naturally;

Periodically inspected through scheduled monitoring and a joint collaboration with the

Department of Wildlife and National Parks;

Rehabilitation and Habitat Enhancement to enhance the biodiversity values;

Conduct the education and awareness program as well as to encourage further research on

specific biodiversity values;

Introduction of the new policy to take into consideration the findings highlighted during the

assessment process;

Proper signage to be established to increase the awareness for the conservation and

protection of the HCV.

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

Findings In compliance:

Yes: x No:

Objective

evidence:

The management of the individual estates has taken action to discourage any illegal or

inappropriate hunting fishing or collecting activities. This is in the form of placing signage in

appropriate locations and briefing workers.

During the audit, the management has also taken action of asking 2 outsiders to leave who was

about to cast their net to catch fish in a ‘No Fishing’ pond within the estate.

Observation 07

Nevertheless, at LE , the auditing team observed that the shopkeeper was keeping bird (e.g.

local parrot-parakeet ) which is considered protected species

Page 37: RSPO PRINCIPLES & CRITERIA CERTIFICATION REPORT ......SGS RSPO (Principles & Criteria) Doc. Number: GP 7003A Doc. Version date: 01 April 2013Page: 1 of 64 SGS RSPO, SGS (Malaysia)

GP 7003A Page 37 of 64

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

Findings In compliance:

Yes: x No:

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.

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

Minor

Findings In compliance:

Yes: No: x

Objective

evidence:

A procedure for handling domestic waste in is available in Sime Darby Plantation Quality

Management System (Appendix 9). Domestic waste in the estate will be collected by a

contractor hired by Sime Darby. Labu estate did campaign for 3R program (Reduce, Reuse and

Recycle) to be practice in the estate. However, the awareness and implementation regarding

this campaign is lacking.

Minor 06 – Raised

NLE : Domestic waste behind the linesite near the palm area were seen to be covered with soil

when it supposed to be disposed off in the 10MT bins

LE: empty chemical containers ( 20 Lits ) were found in the fertiliser ag storage area

LE: Empty scheduled waste drums were found in the fertiliser bag storage area

LE: a pile of mix waste was found dumped at the side of the storage area

LE: landfill require some proper segregation of waste to reduce the landfill sites.

LE: proper labelling of the spill kit: Used and Unused

NLE: SW drums were placed n the scrap iron site when it was suppose to be in the SW store

NLE: Similarly the biodiesel drums need to be stored in a proper storage area to avoid rusting.

NLE: Labelling of SW items or store with the proper code

NLE: Collecting sump for the ‘hanging’ outlet at the SW store

NLE: Spill kit for the Nursery waterpump lacking

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

Findings In compliance:

Yes: x No:

Objective

evidence:

From the field visit , it can be seen that crop residues are placed back into the fields.

Pruned fronds are placed along the inter-rows.

EFB are applied back to the fields

POME are applied back to fields closed to the Mill

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

Findings In compliance:

Yes: x No:

Objective

evidence:

The use of shell and fibre used are recorded and monitored as quantity used per tonne of FFB. The mill also monitors the electricity generated using the shell and fibre and is recorded on Monthly basis.

Page 38: RSPO PRINCIPLES & CRITERIA CERTIFICATION REPORT ......SGS RSPO (Principles & Criteria) Doc. Number: GP 7003A Doc. Version date: 01 April 2013Page: 1 of 64 SGS RSPO, SGS (Malaysia)

GP 7003A Page 38 of 64

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

Findings In compliance:

Yes: x No:

Objective

evidence:

Diesel usage per tonne of FFB is monitored.

Recorded in the Diesel Usage file , Production report as well as tabulated graphically and monitored monthly.

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

Findings In compliance:

Yes: x No:

Objective

evidence:

Sime Darby Plantation is committed towards promoting zero burning. A policy on open burning

has been established in 2008 to implement in all operating unit.

Objective evidence:

The company policy, Zero Burning Policy, 2008

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

Minor

Findings In compliance:

Yes: x No:

Objective

evidence:

During replanting , the palms are felled and chipped and stacked between the planting rows.

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

Findings In compliance:

Yes: x No:

Objective

evidence:

Sime Darby Plantation has developed Zero Burning Policy to show their commitment towards

zero open burning.

However, the workers awareness is still lacking as the auditors evidence burning spot in the

linesite.

Observation 08

There are evidence of open burning at the linesite, such as:

a) Burning of shoes and domestic waste (Labu Estate)

b) Burning of domestic waste at linesite (New Labu Estate)

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

Findings In compliance:

Yes: x No:

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

5.6.2 Plans are reviewed annually Minor

Findings In compliance:

Yes: x No:

Page 39: RSPO PRINCIPLES & CRITERIA CERTIFICATION REPORT ......SGS RSPO (Principles & Criteria) Doc. Number: GP 7003A Doc. Version date: 01 April 2013Page: 1 of 64 SGS RSPO, SGS (Malaysia)

GP 7003A Page 39 of 64

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

Findings In compliance:

Yes: x No:

Objective

evidence:

No peat

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

Findings In compliance:

Yes: x No:

Objective

evidence:

There is a social impact assessment for both the estates and the mill dated April 2009 is

available.

The document 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.

There is evidence of Social Management Plan that is reviewed annually.

The management plan describes the plan for mitigate the impacts as identified in the SIA as

well as plan to monitor the impact such as safety and health in working environment as well as

in the line site, road access ad conditions, facilities and environment in line site and workers

housing, workers rights, pollution at both working areas and line site and sexual

harassment/crime against women.

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

Minor

Findings In compliance:

Yes: x No:

Objective

evidence:

All records of meetings, consultation takes place during the SIA is incorporated in the

assessment 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

Findings In compliance:

Yes: x No:

Objective

evidence:

There is an Action Plan for Social Assessment established specifying the issues and strategies

to be implemented on a yearly basis in relation to the social impact assessment. The Action

Plan also specifies the responsible person to implement and the timeframe for the action plan to

be conducted. The action plan is found to be reviewed on a yearly basis.

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

Page 40: RSPO PRINCIPLES & CRITERIA CERTIFICATION REPORT ......SGS RSPO (Principles & Criteria) Doc. Number: GP 7003A Doc. Version date: 01 April 2013Page: 1 of 64 SGS RSPO, SGS (Malaysia)

GP 7003A Page 40 of 64

Findings In compliance:

Yes: x No:

Objective

evidence:

There is a procedure for communication and consultation between growers/millers and

stakeholders within and surrounding the landholdings. The document dated 1 November 2008

is stated within the Sustainable Plantation 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.

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

Minor

Findings In compliance:

Yes: x No:

Objective

evidence:

Sime Darby has identified the responsible person as the official person for handling the social

issues within the estates and mills. The evidence through the appointment letter is made

available to the auditor during the audit specifying:

Investigate any complaints and reports received regarding the social and to recommend

any action following the complaints received;

To compile and record each of the complaints and reports received and also action taken

for each of the complaints;

To provide counselling and advise for workers with regard to any issues relating to social;

and

To assist the mill and estates in organizing any social programme and activities including

training.

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

Findings In compliance:

Yes: x No:

Objective

evidence:

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

Findings In compliance:

Yes: x No:

Objective

evidence:

Protocols documented and records kept of the issues and their outcomes. The procedures for

handling complaints and grievances are available. Meetings with external stakeholders and

the grievance resolution books at individual estates is found to be implemented.

For New Labu Estate, the recent meeting with the external stakeholders has been conducted on

28 September 2012 and attended by various stakeholders representing various institutional

body covering government agencies, local communities, schools, contractors, suppliers and

NUPW. Among matters discussed during the meeting is continuous relationship between the

estates/mill and the stakeholders.

As for Labu Estate, the recent meeting with the external stakeholders was conducted on 4

October 2012 and was attended by the relevant stakeholders representing various stakeholder

groups such as relevant government agencies, local communities, schools, contractors,

suppliers, NUPW and representative from the workers. Among matters discussed are issues

concerning the access road through the estate that been used by the local communities. In

addition, continuous contribution by the company to the various stakeholders is discussed.

Furthermore, there is a request from the schools to set up a fence surrounding the schools field

due to the cows entering into school compound. The estate noted the request and agreed to

Page 41: RSPO PRINCIPLES & CRITERIA CERTIFICATION REPORT ......SGS RSPO (Principles & Criteria) Doc. Number: GP 7003A Doc. Version date: 01 April 2013Page: 1 of 64 SGS RSPO, SGS (Malaysia)

GP 7003A Page 41 of 64

take action by establishing the fence surrounding the school field.

For mill, the external stakeholder meeting has been conducted on 03 October 2012 and was

attended by 12 representatives from stakeholder such as government institutional, schools and

workers representative from the mill.

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

Findings In compliance:

Yes: x No:

Objective

evidence:

The established grievance procedures specify the estimated time that required to be taken for

each of the process to be addressed before proceed to the subsequent process.

6.3.3 The system is open to any affected parties Minor

Findings In compliance:

Yes: x No:

Objective

evidence:

Communication to the affected parties is evidenced. For instance, any internal 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. With regard to the external issues,

the issues are communicated during the meeting with external stakeholders conducted between

the estates/mill and the relevant stakeholders.

NLE: Gender committee have a flowchart or mechanism that shows how a dispute is resolve

although during interview with the committee, no issues seemed to require the committee

intervention

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

Findings In compliance:

Yes: x No:

Objective

evidence:

Not applicable as the neighbouring communities are recent migrants (in the 1960s). There are

no indigenous communities within or surrounding SOU 13 that hold legal or customary rights

over the land.

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

Findings In compliance:

Yes: x No:

Objective

evidence:

Not applicable as the neighbouring communities are recent migrants (in the 1960s). There are

no indigenous communities within or surrounding SOU 13 that hold legal or customary rights

over the land.

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

Minor

Findings In compliance:

Yes: x No:

Objective Not applicable as the neighbouring communities are recent migrants (in the 1960s). There are

Page 42: RSPO PRINCIPLES & CRITERIA CERTIFICATION REPORT ......SGS RSPO (Principles & Criteria) Doc. Number: GP 7003A Doc. Version date: 01 April 2013Page: 1 of 64 SGS RSPO, SGS (Malaysia)

GP 7003A Page 42 of 64

evidence: no indigenous communities within or surrounding SOU 13 that hold 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

Findings In compliance:

Yes: x No:

Objective

evidence:

For each of the workers, the payment scheme is applied based on the Joint Agreement

between MAPA and NUPW. The agreement specifies the stipulated rates for the workers to

earn for their respective roles in the oil palm plantation. The latest agreement dated 8 April

2011 is available during the audit.

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);

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

compensation scheme);

Advance collected in the mid month;

Gross earnings; and

Net earnings.

Several payslips for harvester and general workers are inspected. In general, harvester workers

receive between RM700-1,800 depending on how much tonnage of FFB harvester while

general workers receive between RM600-1300.

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

Findings In compliance:

Yes: x No:

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 and are

explained carefully to them by a plantation management official in the operating unit.

Objective evidence:

The foreign worker’s work contracts are verified. The contracts are written in English and

Bahasa Malaysia for Malay, Indian and Indonesian workers. The contracts are found to be

specifying the following:

Working hours;

Salary rates (with reference to the agreement between MAPA and NUPW);

Deduction;

Payment for overtime;

Leave entitlement covering annual leaves, sick leaves, maternity leave and public holiday;

Entitlement for basic amenities in term of housing, electricity, water supply;

Workmen Compensation Scheme for Foreign Workers;

Procedure for dismissal and period of notice; and

Safety and health of the workers.

Page 43: RSPO PRINCIPLES & CRITERIA CERTIFICATION REPORT ......SGS RSPO (Principles & Criteria) Doc. Number: GP 7003A Doc. Version date: 01 April 2013Page: 1 of 64 SGS RSPO, SGS (Malaysia)

GP 7003A Page 43 of 64

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

Findings In compliance:

Yes: No: x

Objective

evidence:

Workers are provided with 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 line-site is conducted at least twice weekly.

Despite the above, the following issues were found :

Minor 07

NLE: Fire extinguisher missing from one of the houses at the line-site

NLE: Although a ‘ No rearing of poultry’ was erected, there were evidence that poultry is being

reared by the workers

LE: mosquito larvae was found in the disuse tyres at the storage area

LE: The key to unlock fire extinguisher was missing at the line-site.

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

Findings In compliance:

Yes: x No:

Objective

evidence:

There is proof of documented minutes of meetings with representatives of the National Union of

Plantation Workers (NUPW) at the mill and estate levels. Latest meeting with the NUPW has

been conducted as follows:

Date Estates Details

29 February 2012 New

Labu

Chaired by the estate manager and attended

by 14 members out of which 9 of them

representing the unions.

12 September 2012 Labu Chaired by the estate manager and attended

by 23 members of which 12 of them

representing the unions.

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

Findings In compliance:

Yes: x No:

Objective

evidence:

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 Manager of the Estates and Mill. The

policy specifies the company’s commitment to 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 “”

Section 5(1) Industrial Relations Act 1967 stated that “”

The policy also stated companies’ 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.

Page 44: RSPO PRINCIPLES & CRITERIA CERTIFICATION REPORT ......SGS RSPO (Principles & Criteria) Doc. Number: GP 7003A Doc. Version date: 01 April 2013Page: 1 of 64 SGS RSPO, SGS (Malaysia)

GP 7003A Page 44 of 64

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

6.7.1 Documented evidence that minimum age requirement is met Major

Findings In compliance:

Yes: x No:

Objective

evidence:

There is documented evidence in the form of individual worker’s particulars and contracts

demonstrating that the minimum age requirement is met. Sime Darby has policy not to use

underage worker and there was no evidence of children working in the field.

Based on the employment record in LE, the youngest workers employed is 24 years old for

local workers and 20 years old for foreigners.

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

Findings In compliance:

Yes: x No:

Objective

evidence:

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

Findings In compliance:

Yes: x No:

Objective

evidence:

There is no evidence which confirmed the discrimination against foreign workers. Equal

opportunities are demonstrated through issues such as similar daily wages for foreign workers

and local workers. In addition, the foreign workers are also does not discriminate in term of

working hours with the local workers. With regard to the basic amenities, both foreign and local

workers received similar facilities.

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

Findings In compliance:

Yes: x No:

Objective

evidence:

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

Findings In compliance:

Yes: No:

Objective

evidence:

Grievance mechanism is in place that is built in within the procedures for handling complaints

and grievances. 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 established at

all estates and mill.

Page 45: RSPO PRINCIPLES & CRITERIA CERTIFICATION REPORT ......SGS RSPO (Principles & Criteria) Doc. Number: GP 7003A Doc. Version date: 01 April 2013Page: 1 of 64 SGS RSPO, SGS (Malaysia)

GP 7003A Page 45 of 64

Based on records, for New Labu Estate, the latest meeting conducted on 3 September 2012

and was attended by 20 committee members.

With regard to the Labu Estate, the latest meeting was conducted on 6 September 2012 and

was attended by 11 committee members. Among the matters discussed during the both

meetings are the salary scale of the women workers, safety and health as well as basic

amenities for health treatment for women, sexual crime/harassment, women welfare and

forthcoming activities to be conducted.

For mill the gender committee has been established and based on record, the latest meeting of

the gender committee has been conducted on 04 October 2012. Nevertheless, the minutes of

the meeting has yet to be finalized and hence is not available to the auditor during the audit.

The auditor observed that the complaint form for sexual harassment is established and made

available to the auditor during the audit. Nevertheless, so far there are no complaints evident

and lodged by the women workers.

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

Findings In compliance:

Yes: x No:

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. With regard to the pricing

mechanism for FFB, the price for FFB is recorded on the daily basis. Observed during the audit

the documented Daily Palm Oil Market Price dated 10 October 2012 specifying the price list of

the FFB, Crude Palm Kernel Oil, Palm Kernel and Crude Palm Oil.

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

Findings In compliance:

Yes: x No:

Objective

evidence:

The mill receives FFB from their Sime Darby Estates.

The documented Daily Palm Oil Market Price dated 10 October 2012 also states the monthly

price for the FFB, CPO, CP Kernel and Palm Kernel for year 2012.

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

Minor

Findings In compliance:

Yes: x No:

Objective

evidence:

SOU 13 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. Several contracts with suppliers have been

verified and the auditor observed that all contracts are fair, legal and transparent. The verified

contracts are found to be signed by both parties.

6.10.4 Agreed payments shall be made in a timely manner Minor

Findings In compliance:

Yes: x No:

Objective

evidence:

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.

Page 46: RSPO PRINCIPLES & CRITERIA CERTIFICATION REPORT ......SGS RSPO (Principles & Criteria) Doc. Number: GP 7003A Doc. Version date: 01 April 2013Page: 1 of 64 SGS RSPO, SGS (Malaysia)

GP 7003A Page 46 of 64

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 consultation with local communities

Minor

Findings In compliance:

Yes: x No:

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 religious celebrations, for the upkeep and

maintenance of schools, family day, sports day etc.

Contribution to local community is an active exercise for SOU 13 and records of contribution eg

road upgrading, 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 File

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

Findings In compliance:

Yes: x No:

Objective

evidence:

SOU 13 monitors the usage of pesticides as evidence in the records and costing. As for

herbicide usage, the Unit only does spraying within the circles as well as selective weeding to

minimise herbicide usage.

The use of beneficial plants as well as the establishment of barn owl to minimise the pest

population resulting in reduced pesticide usage.

Chemical is monitored individually e.g. rat bait.

8.1.2 Environmental impacts (C 5.1) Major

Findings In compliance:

Yes: x No:

Objective

evidence:

Environmental management is supported by Environmental Improvement and Pollution Prevention Plan.

This is reviewed and assessed annually

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

Findings In compliance:

Yes: x No:

Objective

evidence:

The Unit encourages recycling with the establishment of the recycling bins at the office and line site.

During their regular meetings with the workers and representatives, workers and staff reminded on the concept of recycling.

8.1.4 Pollution prevention plans (C 5.6) Major

Findings In Yes: x No:

Page 47: RSPO PRINCIPLES & CRITERIA CERTIFICATION REPORT ......SGS RSPO (Principles & Criteria) Doc. Number: GP 7003A Doc. Version date: 01 April 2013Page: 1 of 64 SGS RSPO, SGS (Malaysia)

GP 7003A Page 47 of 64

compliance:

Objective

evidence:

Similar to the environmental management, improvement and pollution plan, this is reviewed and assessed annually.

Identification of pollution sources and mitigation measures are identified at each location and action plans are implemented.

8.1.5 Social impacts (C 6.1) Major

Findings In compliance:

Yes: x No:

Objective

evidence:

The SIA for the mill as well as the 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

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

Minor

Findings In compliance:

Yes: x No:

Objective

evidence:

For the estates and Mill :

Annual expenditure is done by yearly during budget meeting at the beginning of the year which

is participated by Managers, General Managers and Assistant Manager.

Mill :

The expenditure for Labu Palm Oil Mill is captured in the budget FY12/13. RM 19,250 has been

allocated for Social Responsibility such as Family Day for Workers, Religious Festival and

Football Day. Another RM 31,843.84 has been allocated for Water Treatment Plant.

Observed that most of the environment responsibilities are allocated under the Mill Operation

Expenditure.

3.1.2 Supply Chain

For supply chain, the Labu Palm Oil Mill has decided to use Module D in 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.

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

Findings In compliance: Yes: X No:

Objective

evidence: The company has a procedure “Standard Operating Procedures (SOP) for Traceability and RSPO Supply Chain Certificate System” (version 1 & issue date: 01-08-2012) to provide guideline for the

Page 48: RSPO PRINCIPLES & CRITERIA CERTIFICATION REPORT ......SGS RSPO (Principles & Criteria) Doc. Number: GP 7003A Doc. Version date: 01 April 2013Page: 1 of 64 SGS RSPO, SGS (Malaysia)

GP 7003A Page 48 of 64

whole supply chain system.

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.

Findings In compliance: Yes: No: X

Objective

evidence: Non Conformance 01

There is no appointed person for having overall responsibility for and authority over these requirements and compliance with all applicable requirements.

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

Findings In compliance: Yes: x No:

Objective

evidence: The mill Weighbridge SOP and the Outside Crop Procedures ensure the receiving and processing certified and non-certified FFBs.

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.

Findings In compliance: Yes: X No:

Objective

evidence: The mill records all volumes of certified FFB received. Labu POM receives FFB from its own supplying estates which already being certified.

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

Findings In compliance: Yes: X No:

Objective

evidence: There is no overproduction as they have the internal monitoring and reporting mechanism in place.

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.

Findings In compliance: Yes: X No:

Objective

evidence: Inspection the report, such as monthly crop report is up to date.

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

Findings In compliance: Yes: X No:

Objective

evidence: All records and reports are achieved and stored for 5 years as indicated in the SOP.

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.

Findings In compliance: Yes: X No:

Objective

evidence: The weighbridge ticket and delivery note record the sources and weight of all the RSPO certified FFB.

Monthly crop report indicates the source of estate, FFB, PO and PK up to date.

Page 49: RSPO PRINCIPLES & CRITERIA CERTIFICATION REPORT ......SGS RSPO (Principles & Criteria) Doc. Number: GP 7003A Doc. Version date: 01 April 2013Page: 1 of 64 SGS RSPO, SGS (Malaysia)

GP 7003A Page 49 of 64

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.

Findings In compliance: Yes: X No:

Objective

evidence: Up to date, there is no any sale of RSPO certified product yet.

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

Findings In compliance: Yes: X No:

Objective

evidence: Up to the date, there is no any transaction for RSPO certified material yet. Relevant requirements already stated in procedure “Standard Operating Procedures (SOP) for Traceability and RSPO Supply Chain Certificate System”.

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.

Findings In compliance: Yes: X No:

Objective

evidence: Labu POM only receives FFB from the certified estates..

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.

Findings In compliance: Yes: X No:

Objective

evidence: As to date, there is no transaction of RSPO segregated certified products. The weight bridge ticket and monthly crop report able to trace back to certified segregated material.

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

Findings In compliance: Yes: X No:

Objective

evidence: SOU 13 Labu did not have any outsources activities for palm kernel crushing.

Module D.6: Training

Page 50: RSPO PRINCIPLES & CRITERIA CERTIFICATION REPORT ......SGS RSPO (Principles & Criteria) Doc. Number: GP 7003A Doc. Version date: 01 April 2013Page: 1 of 64 SGS RSPO, SGS (Malaysia)

GP 7003A Page 50 of 64

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.

Findings In compliance: Yes: No: X

Objective

evidence: Non Conformance 02

The training to implement the requirements of the Supply Chain Certification System has not been provided to the employee.

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.

Findings In compliance: Yes: X No:

Objective

evidence: SOU 13 Labu POM has not made any claims yet. The RSPO Trademark License Number for Sime Darby Plantation Sdn Bhd is RSPO-1106024.

3.2 Corrective Action Request

There are total of 3 Major and 3 Minor issued in the P& C. Please refer to the Appendix A for

the details findings and relevant correction actions have been taken.

Upon reviewing the submission of the evidence of the closing of the non-conformities, it

is noted that Major CAR 01 is closed.

Major CAR 2 is closed, however, the evidence was insufficient so it has been raised to

an Observation. Since an Observation was already raised under training, this

Observation is raised under Observation 05.

As for Major CAR 03, this non-conformity is closed, however a new Observation 09 is

raised due to the fact that the evidence submitted was not specific.

For the Supply Chain, a total of 2 Major Non-conformities are raised in the Labu Palm Oil Mill

RSPO Supply Chain audit.

On submission of evidences by Cik Asdina Musa from the Sime Darby RSPO &

Certifications Unit, Department of Plantation Sustainability & Quality Management

(PSQM) within the stipulated period, the auditor is satisfied that the evidences are

sufficient to close the 2 Major Non-conformities raised in the Supply Chain Audit.

3.3 Noteworthy Positive & Negative Observation

There were 9 Observations raised.

3.4 Status of Non-Conformities Previously Identified

Please refer to Appendix B for the previous audit.

3.5 Issues Raised by Stakeholders and Findings

This was a re-assessment audit.

A list of stakeholders contacted is included as Appendix D.

Page 51: RSPO PRINCIPLES & CRITERIA CERTIFICATION REPORT ......SGS RSPO (Principles & Criteria) Doc. Number: GP 7003A Doc. Version date: 01 April 2013Page: 1 of 64 SGS RSPO, SGS (Malaysia)

GP 7003A Page 51 of 64

Stakeholders did not provide any comments in writing regarding the SOU 13 Sime Darby

Plantation Sdn Bhd on issues regarding environmental and social performance. All interviewed

stakeholders had positive comments about SOU 13 Sime Darby Plantation Sdn Bhd

4. ACKNOWLEDGEMENT OF ORGANIZATION INTERNAL RESPONSIBILITY

4.1 Date of Next Surveillance Visit

The next annual surveillance audit is planned on one year after the approval of this report by

RSPO as this is a re-assessment.

4.2 Date of Closing Non-Conformities

a) P&C

Reference Class Issued Close

M02 Major 8-9/10/12 11/10/12

M03 Major 8-9/10/12 12/10/12 and raised

Page 52: RSPO PRINCIPLES & CRITERIA CERTIFICATION REPORT ......SGS RSPO (Principles & Criteria) Doc. Number: GP 7003A Doc. Version date: 01 April 2013Page: 1 of 64 SGS RSPO, SGS (Malaysia)

GP 7003A Page 52 of 64

Observation 05

M04 Major 8-9/10/12 12/10/12 and raised

Observation 09

b) Supply Chain

Reference Class Issued Close

NC 1 Major 10/10/12 4/12/12

NC 2 Major 10/10/12 8/12/12

4.3 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

Page 53: RSPO PRINCIPLES & CRITERIA CERTIFICATION REPORT ......SGS RSPO (Principles & Criteria) Doc. Number: GP 7003A Doc. Version date: 01 April 2013Page: 1 of 64 SGS RSPO, SGS (Malaysia)

GP 7003A Page 53 of 64

Appendix A : CORRECTIVE ACTION REQUEST & OBSERVATION

a) For P&C

CAR # Indicator CAR Detail

01 4.3.3 Date

Recorded> 8/10/12

Due

Date> 8/10/13

Date

Closed>

Non-Conformance:

Presence of road maintenance programme available however erosion was still evidenced

Objective Evidence:

However in New Labu Estate, there was erosion along the F2006 road as well as the stream

crossing at the TNB-Goat shed area.

Minor 01 - Raised

Close-out evidence:

M02 4.4.1 Date

Recorded> 8,9/10/12

Due

Date> 8,9/12/12

Date

Closed> 11/10/12

Non-Conformance:

Water courses and wetlands were not protected , including maintaining and restoring

appropriate riparian buffer zones at or before replanting along all natural waterways within the

estate.

Objective Evidence:

The auditors found evidence occurrence of spot spraying activities in the buffer zone area in

New Labu estate (Field F-2006).

During visit to Labu Estate, field F06-A-01C in Sungai Jijan, the auditors observed scorching on

the weeds due to fertiliser application around palms within the buffer zone area.

Major 02 - Raised

Close-out evidence:

Submission of evidence (pictorial and attendance) that training was conducted on Oct 11,2012

on ‘Awareness on spraying & Manuring of buffer zone Area’ by the Labu Estate Manager, En

Sairani Ariffin, and the assistants to the 9 spray workers.

Major 02 – Closed

M03 4.6.3 Date

Recorded> 8,9/10/12

Due

Date> 8,9/12/12

Date

Closed> 11/10/12

Non-Conformance:

Pesticides was not 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).

Objective Evidence:

Page 54: RSPO PRINCIPLES & CRITERIA CERTIFICATION REPORT ......SGS RSPO (Principles & Criteria) Doc. Number: GP 7003A Doc. Version date: 01 April 2013Page: 1 of 64 SGS RSPO, SGS (Malaysia)

GP 7003A Page 54 of 64

CAR # Indicator CAR Detail

In NLE Nursery store :

a) Lack MSDS

b) Empty chemical containers not sent to the empty container store for proper storage &

disposal

c) Improper disposal as empty chemical box, Antracol found in the dustbin

d) Proper stacking and records

e) NLE: Reuse as an oil or fuel storage container. ( still has the label ) at the water pump at

the seedling nursery

At the Line site :

a) NLE: Reuse of empty chemical container as a potting container / chilli

seedlings

b) NLE: Reuse as a loose fruit scraper ( found in the line site )

c) LE: Reuse of empty container as a planting pot as well as a clothes soaking

container at the line site

Major 03-Raised

Close-out evidence:

a) On the day of closing , NLE has already taken steps to improve the

chemical storage at the Nursery and evidence were submitted .

b) Further submission of evidence (pictorial and attendance) that training

was conducted by the QMO , Mr Yogeswaran and En Mohd Nazri on ‘ Chemical

handling / ‘Tatacara pengendalian Racun’ to field supervisors, storekeeper, head gang,

mandore and general workers.

Major 03 – closed

However, an Observation is raised as the training is not specific.

Refer to Observation 05 – Raised under 4.8.1 Training

CAR # Indicator CAR Detail

M04 4.7.1 Date

Recorded> 8-10/10/12

Due

Date> 8-10/12/12

Date

Closed> 12/10/12

Non-Conformance:

Indicator 4.7.1 ( Major ) : Evidence of documented Occupational Safety Health (OSH) plan

which is in compliance with OSH Act 1994 and Factory and Machinery Act 1967(Act 139).) but

inadequately implemented.

Objective Evidence:

Although there were documented evidence on OSH nevertheless the following were some

implementation issues that were identified during the audit:

LE: Pesticide Spray at 11B. Spray worker Muslimin did not have his goggles and another

sprayer’s spray equipment was leaking at the trigger handle.

NLE: Sickles without its cover found at the line site

NLE: Update the information at the nursery store ( still has the former company ‘Synergy

Drive’ letterhead)

LE : First aid item leaking till empty in the first aid kit – Pesticide mandore Bakri

Mill : to update the PPE matrix form

Major 04 – Raised

Close-out evidence:

Page 55: RSPO PRINCIPLES & CRITERIA CERTIFICATION REPORT ......SGS RSPO (Principles & Criteria) Doc. Number: GP 7003A Doc. Version date: 01 April 2013Page: 1 of 64 SGS RSPO, SGS (Malaysia)

GP 7003A Page 55 of 64

CAR # Indicator CAR Detail

Submission of evidence of training and attendance sheet of

a) First aid kit training

b) Chemical training & PPE Awareness (12/10/12 ) by Mr Heng of Mycrop on

the usage of PPE, Inter-pump sprayer usage and maintenance and chemical handling.

Major 04 – closed

However an Observation is raised as the evidence and submission is not specific as some of

the issues like issues of ‘sickle without cover found at the line site’ is still pending.

Observation 09 – Raised

05 5.3.2 Date

Recorded> 8-10/10/12

Due

Date> 8-10/10/13

Date

Closed>

Non-Conformance:

Indicator 5.3.2 (Minor): Having identified wastes and pollutants, operational plan was not

implemented, to avoid or reduce pollution.

Objective Evidence:

NLE : Domestic waste behind the line-site near the palm area were seen to be covered with soil

when it supposed to be disposed off in the 10MT bins

LE: empty chemical containers ( 20 Lits ) were found in the fertiliser ag storage area

LE: Empty scheduled waste drums were found in the fertiliser bag storage area

LE: a pile of mix waste was found dumped at the side of the storage area

LE: landfill requires some proper segregation of waste to reduce the landfill sites.

LE: proper labelling of the spill kit: Used and Unused

NLE: SW drums were placed n the scrap iron site when it was suppose to be in the SW store

NLE: Similarly the biodiesel drums need to be stored in a proper storage area to avoid rusting.

NLE: Labelling of SW items or store with the proper code

NLE: Collecting sump for the ‘hanging’ outlet at the SW store

NLE: Spill kit for the Nursery water pump lacking

Minor 05 - Raised

Close-out evidence:

06 6.5.3 Date

Recorded> 8-9/10/12

Due

Date> 8-9/10/13

Date

Closed>

Non-Conformance:

Indicator 6.5.3 ( Minor ) : Although the Unit provide adequate housing, water supplies, medical,

educational and welfare amenities, where no such public facilities are available or accessible

(not applicable to smallholders ) however safety items were missing and instruction not adhered

Objective Evidence:

NLE: Fire extinguisher missing from one of the houses at the lin-esite

NLE: Although a ‘ No rearing of poultry’ was erected, there were evidence that poultry is being

reared by the workers

LE: mosquito larvae was found in the disuse tyres at the storage area

LE: The key to unlock fire extinguisher was missing at the line-site.

Minor 06- Raised

Close-out evidence:

Page 56: RSPO PRINCIPLES & CRITERIA CERTIFICATION REPORT ......SGS RSPO (Principles & Criteria) Doc. Number: GP 7003A Doc. Version date: 01 April 2013Page: 1 of 64 SGS RSPO, SGS (Malaysia)

GP 7003A Page 56 of 64

b) For Supply Chain

CAR # Indicator CAR Detail

NC 01 D.1.1.2 Date

Recorded> 10/10/12

Due

Date> 10/12/112

Date

Closed>

Non-Conformance:

There was no named person having overall responsibility for and authority over the

implementation of these requirements and compliance with all applicable requirements

Objective Evidence:

Non Conformance 01

There is no appointed person for having overall responsibility for and authority over these requirements and compliance with all applicable requirements.

Close-out evidence:

On 4/12/12, Cik Asdina Musa from the Sime Darby RSPO & Certifications Unit, Department of Plantation Sustainability & Quality Management (PSQM) submitted evidence in the form of an appointment letter of Muhammad Izzad bin Ramli , Assistant Manager II of the mill as the person appointed for having overall responsibility for and authority over these requirements and compliance with all applicable requirements.

NC 01 – Closed

NC 02 Criterion

D.6.1 Date

Recorded> 10/10/12

Due

Date> 10/12/12

Date

Closed> 08/12/12

Non-Conformance:

The facility did not provide the training for all the staff as required to implement the

requirements of the Supply Chain Certification System.

Objective Evidence:

The training to implement the requirements of the Supply Chain Certification System has not been provided to the employee.

Close-out evidence:

On 8/12/12 a training titled RSPO Training ( SCCS Training ) on the requirements of the

Supply Chain Certification System was conducted for the Mill personnel like the assistant

engineers, supervisors, clerks, bunch checker and an attendance sheet was submitted

by Cik Asdina Musa from the Sime Darby RSPO & Certifications Unit, Department of

Plantation Sustainability & Quality Management (PSQM) as evidence.

NC 02 – Closed

OBSERVATIONS

Page 57: RSPO PRINCIPLES & CRITERIA CERTIFICATION REPORT ......SGS RSPO (Principles & Criteria) Doc. Number: GP 7003A Doc. Version date: 01 April 2013Page: 1 of 64 SGS RSPO, SGS (Malaysia)

GP 7003A Page 57 of 64

OBS # Indicator Observation Detail

Obs 01 1.1.1 Date

Recorded> 8/10/12

Due

Date>

Date

Closed>

Non-Conformance:

Indicator 1.1.1 ( Major ) Records of requests and responses was not maintained

Objective Evidence:

Labu Estate: Record of action undertaken by estate for stakeholder in the CSR file lacking

although the work is done e.g. grass cutting done in school.

NLE: ‘Buku aduan’ or grievance book was not at the designated box

Observation 01

Close-out evidence:

Obs 02 4.1.2 Date

Recorded> 8/10/12

Due

Date>

Date

Closed>

Non-Conformance:

Indicator 4.1.2 ( Minor ) : Records of monitoring and the actions taken was not

maintained and kept for a minimum of 12 months.

Objective Evidence:

LE: This record was not updated as the next monitoring in Jun-Jul 12 was not available

For the mill , the records show this monitoring was done May 2012 and Oct 2011, when the

inspection need to be conducted every 3 months as per SOP ‘Occupational Safety and Health

manual – Workplace inspection’

Observation 02

Close-out evidence:

Obs 03 4.4.3 Date

Recorded> 8/10/12

Due

Date>

Date

Closed>

Non-Conformance:

Indicator 4.4.3 ( Major ) : Outgoing water into main natural waterways were not 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).

Objective Evidence:

In NLE:

Results were available but no comments were provided to explain the analysis.

Map to show where the sample taken from need to be updated (so that the next

management team is aware of the location).

The presence/absence of the ‘natural reservoir ‘also need to be corrected in the map.

Observation 03

Close-out evidence:

OBS # Indicator Observation Detail

Obs 04 4.6.2 Date

Recorded> 8/10/12

Due

Date>

Date

Closed>

Page 58: RSPO PRINCIPLES & CRITERIA CERTIFICATION REPORT ......SGS RSPO (Principles & Criteria) Doc. Number: GP 7003A Doc. Version date: 01 April 2013Page: 1 of 64 SGS RSPO, SGS (Malaysia)

GP 7003A Page 58 of 64

OBS # Indicator Observation Detail

Non-Conformance:

Pesticides selected for use are those officially registered under the Pesticides Act

1974 (Act 149) and the relevant provision (Section 53A); and in accordance with

USECHH Regulations (2000

Objective Evidence:

However in LE: Older herbicide e.g. tri ester herbicide not used up but kept in store.

Observation 04

Close-out evidence:

Obs 05 4.8.1 Date

Recorded> 10/10/13

Due

Date>

Date

Closed>

Non-Conformance:

Indicator 4.8.1 ( Major ) : A training programme (appropriate to the scale of the organization)

that includes regular assessment of training needs and documentation, but records of

competency for employees are not kept.

Objective Evidence:

a) Mill : Competency records lacking for employees

b) Inadequate training for closing Major CAR Indicator 4.6.3, an Observation is raised as

the training is not specific.

Observation 05

Close-out evidence:

Obs 06 5.2.1 Date

Recorded> 8/10/13

Due

Date>

Date

Closed>

Non-Conformance:

Indicator 5.2.1 (Major) : Identification lacking of HCV habitats and protected areas within

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

landholdings

Objective Evidence:

Classification of the river/stream as HCV or buffer zone is unclear.

Observation 06

Close-out evidence:

Obs 07 Date

Recorded> 09/10/12

Due

Date>

Date

Closed>

Non-Conformance:

Indicator 5.2.3 ( Minor ) : Evidence of a commitment to discourage any illegal or inappropriate

hunting, fishing or collecting activities, and developing responsible measures to resolve

human-wildlife conflicts.

Objective Evidence:

Page 59: RSPO PRINCIPLES & CRITERIA CERTIFICATION REPORT ......SGS RSPO (Principles & Criteria) Doc. Number: GP 7003A Doc. Version date: 01 April 2013Page: 1 of 64 SGS RSPO, SGS (Malaysia)

GP 7003A Page 59 of 64

LE: Shopkeeper was keeping birds (e.g. local parrot-parakeet ) which is considered protected

species

Observation - 07

Close-out evidence:

Obs 08 5.5.3 Date

Recorded> 8-9/10/12

Due

Date>

Date

Closed>

Non-Conformance:

Indicator 5.5.3 ( Minor ) : There was evidence of burning waste (including domestic waste).

Objective Evidence:

LE: Burning of waste was observed at linesite and domestic waste/plastic was found behind

temple. Shoes was found in the burning residue.

NLE: Burning of domestic waste /plastic at linesite

Observation 08

Close-out evidence:

Obs 09 4.7.1 Date

Recorded> 12/10/12 Due Date>

Date

Closed>

Non-Conformance:

Indicator 4.7.1 ( Major ) : Evidence of documented Occupational Safety Health (OSH) plan

which is in compliance with OSH Act 1994 and Factory and Machinery Act 1967(Act 139).) but

inadequately implemented.

Objective Evidence:

Major 04 – closed

However an Observation is raised as the evidence and submission is not specific as some of

the issues like issues of ‘sickle without cover found at the line site’ are still pending.

Observation 09 – Raised

Close-out evidence:

Page 60: RSPO PRINCIPLES & CRITERIA CERTIFICATION REPORT ......SGS RSPO (Principles & Criteria) Doc. Number: GP 7003A Doc. Version date: 01 April 2013Page: 1 of 64 SGS RSPO, SGS (Malaysia)

GP 7003A Page 60 of 64

Appendix B : NON-CONFORMITIES PREVIOUSLY IDENTIFIED

CAR # Indicator CAR Detail

01 6.1.3 Date

Recorded> 19/05/09

Due

Date> Next surv

Date

Closed>

8/10/12 Re-

Assessment

Non-Conformance:

There was no timetable with the responsibilities for mitigation and monitoring is reviewed and

updated as necessary

Objective Evidence:

The social impact assessment do not include clear responsibilities for mitigation and

monitoring and it is not clear and when they are reviewed and updated

Close-out evidence:

During the re-assessment of SOU 13 by SGS ( Malaysia) Sdn Bhd on 8-10 Oct 2012,

the auditors found that there is an Action Plan for Social Assessment established

specifying the issues and strategies to be implemented on a yearly basis in relation to

the social impact assessment. The Action Plan also specifies the responsible person to

implement and the timeframe for the action plan to be conducted. The action plan is

found to be reviewed on a yearly basis.

CAR 01 – Closed

Observation

Obs # Indicator Observation Detail

01 5.2.1 Date

Recorded> 19/05/09

Due

Date> Next surv

Date

Closed>

Non-Conformance:

The Unit lack the 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:

There is still a general misunderstanding of the HCV concept with some riparian zone

classified HCV 4 when it is quite clearly inappropriate to do so. Whilst there are

biodiversity plans for all the estates which identify HCV and give a management plan, it

is an observation at this time that local knowledge is poor.

Training of local managers would be of benefit and the audit team will expect to see a

more pro-active by the estate managers at the annual surveillance.

Close-out evidence:

Page 61: RSPO PRINCIPLES & CRITERIA CERTIFICATION REPORT ......SGS RSPO (Principles & Criteria) Doc. Number: GP 7003A Doc. Version date: 01 April 2013Page: 1 of 64 SGS RSPO, SGS (Malaysia)

GP 7003A Page 61 of 64

Page 62: RSPO PRINCIPLES & CRITERIA CERTIFICATION REPORT ......SGS RSPO (Principles & Criteria) Doc. Number: GP 7003A Doc. Version date: 01 April 2013Page: 1 of 64 SGS RSPO, SGS (Malaysia)

GP 7003A Page 62 of 64

Appendix C : TIMEBOUND PLAN

Page 63: RSPO PRINCIPLES & CRITERIA CERTIFICATION REPORT ......SGS RSPO (Principles & Criteria) Doc. Number: GP 7003A Doc. Version date: 01 April 2013Page: 1 of 64 SGS RSPO, SGS (Malaysia)

GP 7003A Page 63 of 64

Page 64: RSPO PRINCIPLES & CRITERIA CERTIFICATION REPORT ......SGS RSPO (Principles & Criteria) Doc. Number: GP 7003A Doc. Version date: 01 April 2013Page: 1 of 64 SGS RSPO, SGS (Malaysia)

GP 7003A Page 64 of 64

Appendix D : LIST OF STAKEHOLDER CONTACTED

External Stakeholders

interviewed during the audit

Comments

JKKK of surrounding village No issues with the Unit.

Contractors No issues and happy with the management

Indigenous People Head No issues and happy with assistance rendered when

required