RSPO PRINCIPLES & CRITERIA CERTIFICATION … · RSPO PRINCIPLES & CRITERIA CERTIFICATION REPORT ......

80
SGS RSPO (Principles & Criteria) Doc. Number: GP 7003A Doc. Version date: 01 April 2013 Page: 1 of 80 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: MY03140 Certificate No.: SGS-RSPO-PM/ MY14/01364 Validity Period: 18 Feb 2014 17 Feb 2019 Report Ref. No.: MY03140-SOU 15 Sua Betong Re- Assessment 2012 Report RSPO Membership No.: 1-0008-04-000-00. Client Name: Sime Darby Plantation Sdn Bhd 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: 60 MT/Hr Annual CPO Produced (MT): FY 11/12 (Table 3 ) 54,939.59 Address: Street and number: Town/City State/Country Zip/Postal code Country Head Office Main Tower, Level 3, 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 Sua Betong Oil Mill KM22, Jalan Linggi 71050 Sirusa Port Dickson Negeri Sembilan Malaysia. [email protected] Contact Person: Puan Sabarinah Marzuky Head, RSPO & Certification Unit Tel: +603 78484388 E-mail: [email protected] Mill Contact Person: Wan Syaril Izan B. Wan Sobri , Pengurus Kanan Tel : (606) 6460118 / 019 6663756 Fax : (606) 6460119 Country: Malaysia Plantation Unit Being Evaluated: Supply Base Name & Address Sua Betong palm oil mill and its supply base plantations in SOU 15- Sua Betong, Port Dickson, Negeri Sembilan. Total Certified Area (Ha): 18,747.56 Total FFB Produced (MT): FY 11/12( Table 5 ) 313,956.17 End of Public Summary

Transcript of RSPO PRINCIPLES & CRITERIA CERTIFICATION … · RSPO PRINCIPLES & CRITERIA CERTIFICATION REPORT ......

Page 1: RSPO PRINCIPLES & CRITERIA CERTIFICATION … · RSPO PRINCIPLES & CRITERIA CERTIFICATION REPORT ... Kota Kemuning, 40460 Shah Alam, Malaysia ... Bukit Bachang Division ...

SGS RSPO

(Principles & Criteria)

Doc. Number: GP 7003A

Doc. Version date: 01 April 2013

Page: 1 of 80

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: MY03140 Certificate No.: SGS-RSPO-PM/ MY14/01364

Validity Period: 18 Feb 2014 – 17 Feb 2019

Report Ref. No.: MY03140-SOU 15 Sua Betong Re- Assessment 2012 Report

RSPO Membership

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

Client Name: Sime Darby Plantation Sdn Bhd 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: 60 MT/Hr

Annual CPO

Produced (MT):

FY 11/12 (Table 3 )

54,939.59

Address:

Street and number:

Town/City

State/Country

Zip/Postal code

Country

Head Office

Main Tower, Level 3, 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 Sua Betong Oil Mill

KM22, Jalan Linggi

71050 Sirusa

Port Dickson

Negeri Sembilan

Malaysia.

[email protected]

Contact Person:

Puan Sabarinah Marzuky

Head, RSPO & Certification Unit

Tel: +603 78484388

E-mail: [email protected]

Mill Contact Person:

Wan Syaril Izan B. Wan Sobri ,

Pengurus Kanan

Tel : (606) 6460118 / 019 6663756

Fax : (606) 6460119

Country: Malaysia

Plantation Unit

Being Evaluated:

Supply Base Name & Address

Sua Betong palm oil mill and its supply base plantations in SOU 15-Sua Betong, Port Dickson, Negeri Sembilan.

Total Certified Area

(Ha):

18,747.56

Total FFB Produced

(MT):

FY 11/12( Table 5 )

313,956.17

End of Public Summary

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SGS RSPO

(Principles & Criteria)

Doc. Number: GP 7003A

Doc. Version date: 01 April 2013

Page: 2 of 80

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

BASIC EVALUATION INFORMATION

MAIN EVALUATION

Evaluation Dates: 26th

– 30th

November 2012

Team Leader/Team: James Ong

Affiliate Project Manager: Date:

Report approved by: Haye Semail Date: 18th

Feb 2014

Certification approved by: Kenny Looi Date: 18th

Feb 2014

Database logged by: Othman Shahziela Date: 18th

Feb 2014

SURVEILLANCE 1

Evaluation Dates:

Team Leader/Team:

Affiliate Project Manager: Date:

Report reviewed & approved by: Date:

Certification approved by: Date:

Database logged by: Date:

SURVEILLANCE 2

Evaluation Dates:

Team Leader/Team:

Affiliate Project Manager: Date:

Report reviewed & approved by: Date:

Certification approved by: Date:

Database logged by: Date:

SURVEILLANCE 3

Evaluation Dates:

Team Leader/Team:

Affiliate Project Manager: Date:

Report reviewed & approved by: Date:

Certification approved by: Date:

Database logged by: Date:

SURVEILLANCE 4

Evaluation Dates:

Team Leader/Team:

Affiliate Project Manager: Date:

Report reviewed & approved by: Date:

Certification approved by: Date:

Database logged by: Date:

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TABLE OF CONTENTS

SUMMARY ............................................................................................................................................................... 4

List of Abbreviation ................................................................................................................................................ 5

1. scope of certification assessment ......................................................................................................... 6

1.1 National Interpretation Used ..................................................................................................................... 6

1.2 Certification Scope .................................................................................................................................... 7

1.3 Location and Maps .................................................................................................................................... 7

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

1.5 Date of Planting and Cycle ..................................................................................................................... 14

1.6 Other Certification Held ........................................................................................................................... 16

1.7 Organizational Information and Contact Person ..................................................................................... 16

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 ................................................................................ 17

2. Assessment Process ............................................................................................................................. 17

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

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

2.3 Qualification of Lead Assessor and Assessment Team.......................................................................... 19

2.4 Stakeholder Consultation and List of Stakeholders Contacted ............................................................... 19

3. Assessment Findings ............................................................................................................................ 20

3.1 Summary of Findings .............................................................................................................................. 20

3.2 Corrective Action Request ...................................................................................................................... 60

3.3 Noteworthy Positive & Negative Observation ......................................................................................... 61

3.4 Status of Non-Conformities Previously Identified .................................................................................... 61

3.5 Issues Raised by Stakeholders and Findings ......................................................................................... 61

4. Acknowledgement of Organization Internal Responsibility .............................................................. 61

4.1 Date of Next Surveillance Visit ................................................................................................................ 61

4.2 Date of Closing Non-Conformities .......................................................................................................... 61

4.3 Acknowledgement of Internal Responsibility and Formal Sign-off Assessment Findings ....................... 62

APPENDIX A: CORRECTIVE ACTION REQUEST & OBSERVATION ................................................................ 63

APPENDIX B: NON-CONFORMITIES PREVIOUSLY IDENTIFIED ..................................................................... 77

APPENDIX C: TIMEBOUND PLAN ....................................................................................................................... 78

APPENDIX D: LIST OF STAKEHOLDERS CONTACTED.................................................................................... 80

LIST OF TABLES

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

Table 2 : Production Area, HCV, Certified area, FFB Yield etc ......................................................................... 14

Table 3: Sua Betong Oil Mill Summary FY 2011/2012 ( July 2011-June 2012) ............................................... 14

Table 4 : Summary of Estate crop age profile and area in SOU 15, Sua Betong............................................. 15

Table 5: FFB Production for all Supply Base Estates for SOU 15 .................................................................... 15

Table 6 Area Statement of the Supplying Estates ............................................................................................ 16

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Table 7 : Assessment Programme .................................................................................................................... 18

Table 8 : Auditor's Profile ................................................................................................................................... 19

LIST OF FIGURES

Figure 1: Location Map for the various Estates and Mills within Peninsular ...................................................... 8

Figure 2: Location Map of Estates and mill of SOU 15 ....................................................................................... 9

Figure 3 : Ladang Sungai Baru Estate & its Divisions ......................................................................................... 9

Figure 4 : Home Division .................................................................................................................................... 10

Figure 5 : Ayer Molek Division............................................................................................................................ 11

Figure 6 : Bukit Bachang Division ...................................................................................................................... 12

Figure 7 : Lubok Cina division ............................................................................................................................ 13

LIST OF APPENDICES

Refer to above

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 makes a conscious and concerted effort towards conservation and

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

well-being of the communities in which it operates.

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LIST OF ABBREVIATION

Short Form Meanings

CAR Corrective Action Request

CHRA Chemical Health Risk Assessment

CPO Crude Palm Oil

DID Department of Drainage and Irrigation, Malaysia

Div Division

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

POM Palm Oil Mill

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

SOU Strategic Operating Unit

SPC Senior Plantation Controller

USECHH Use and Standards of Exposure of Chemicals Hazardous to Health

WHO World Health Organisation

yr Year

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1. SCOPE OF CERTIFICATION ASSESSMENT

1.1 Background

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 15 Business Unit and consists of the following: a) Sua Betong Palm Oil Mill, b) Siliau Estate c) Sua Betong Estate d) Sengkang Estate e) Sg Bahru Estate f) Tampin Linggi Estate g) Salak Estate h) Bradwall Estate i) PD Lukut Estate SOU 15 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. Due to the merger of Sime Darby Berhad, Golden Hope Plantations Berhad and Kumpulan Guthrie Berhad, some of the supply base has been consolidated into estate divisions.

Estate Divisions Field Hectarage (Based ON Map)

Sua Betong Estate

Sg Ujong Div 950.93

South 1 Div 991.69

South 2 Div 878.45

Silaiu Estate

Main Div 919.51

Rantau Div 210.55

Linggi Div 574.02

Sengkang

SK I Div 722.75

SK II Div 696.85

Pasir Panjang Div 635.91

Sg Bahru Estate Home Div 412.47

Bukit Bachang Div 254.92

Lubuk China Div 564.50

Ayer Molek Div 145.37

Tampin Linggi Estate - 2103.44

Salak Estate - 2944.36

Bradwall Estate

Main Div 1384.34

Linsum Div 861.05

Segga Div 605.48

PD Lukut Estate - 1,386

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The estates are located in the Malaysian state of Negeri Sembilan and the northern part of Melaka . The Sua Betong Oil Mill is located at about KM22, Jalan Linggi, 71050 Sirusa , Port Dickson , Negeri Sembilan Malaysia. The validity of the certificate is for a period of 5 years, subject to annual surveillance audit. This is an audit report for

the Re-assessment which has been conducted from 26th

– 30th

November 2012.

1.2 National Interpretation Used

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

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

National Interpretation (MY-NIWG dated 26th

April 2008) and RSPO Supply Chain

Certification Standard dated 25 November 2011.

1.3 Certification Scope

The scope of certification includes the operation of Sua Betong 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

Sua Betong Oil Mill is located along the KM22, Jalan Linggi, 71050 Sirusa, Port Dickson ,

Negeri Sembilan , Malaysia (Figure 1). A sample of more detailed information on the estates

location and layouts are shown in Figures 3 – 7. The sampled estate shown is Sungai Baru and

its divisions. The GPS location of the mill is shown in Table 1.

Table 1: Mill and Supply Base GPS Location

Mill/Supply Base Longitude Latitude

Sua Betong Oil Mill N 2° 31’ 42” E 101°53’ 43”

SILIAU ESTATE

71100 SILIAU, NS

N 2° 32’ 06”

E 101° 54’ 0”

SENGKANG ESTATE

N 2° 26’ 095”

E 101° 57’ 72”

SUNGAI BARU

ESTATE

N 2° 26’ 18”

E 102° 5’ 44”

TAMPIN LINGGI

ESTATE

N 2° 30 ‘56.71”

E 101° 59’ 47.11”

SALAK ESTATE

N 2° 34’54”

E 101° 53’ 38”

BRADWALL ESTATE

N 2° 35’ 090”

E 101° 55’ 66"

SUA BETONG ESTATE

N 2° 31' 42" E 101° 53"43"

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PD LUKUT ESTATE N 2° 30’ 59.06” E 101° 50’ 17.47”

Figure 1: Location Map for the various Estates and Mills within Peninsular

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Figure 2: Location Map of Estates and mill of SOU 15

Figure 3 : Ladang Sungai Baru Estate & its Divisions

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Figure 4 : Home Division

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Figure 5 : Ayer Molek Division

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Figure 6 : Bukit Bachang Division

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Figure 7 : Lubok Cina division

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1.5 Description of Supply Base and Mill Processing Capacity

The FFB is sourced from 8 estates which are directly managed by Sime Darby Plantation Sdn

Bhd. The crop yields from each estate are listed in Table 5 below.

Table 2 : Production Area, HCV, Certified area, FFB Yield etc

Estates

(Siliau , Sengkang, Sua Betong, Sungai

Baru, PD Lukut, Tampin Linggi, Salak ,

Bradwall )

Production Area (ha) 13,356

Immature Area ( ha ) 3,081.37

Conservation Area (ha Included under conservation area

HCV Area (ha)

( HCV 4&6) Approx 20

Others 2,290.19

Certified Area (ha) 18,747.56

Annual FFB

Production (MT)

2011/12

313,956

Table 3: Sua Betong Oil Mill Summary FY 2011/2012 ( July 2011-June 2012)

Financial Year

(FY11/12)

Mill Production Figures (MT) (Audited Estate)

FFB Received FFB Processed CPO Produced PK Produced

Certified Crop 257,762.210 256,917.606 54,939.59 12,565.69

Outside crop 0 0 0 0

Total 257,762.210 256,917.606 54,939.59 12,565.69

OER: 21.31% KER: 4.87%

1.6 Date of Planting and Cycle

The age profiles for the estates are simplified in Table 3 below. Palms are considered mature

after 4 years or 48 months. Palms are normally replanted when they reach the age of 25 years.

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A replanting program for all estates involved is available and being projected for the next five (5)

financial years.

Sime Darby Plantation SOU 15, Sua Betong comprises of eight directly managed estates as

listed in Table 1 and a 60MT/Hour mill identified as Sua Betong Palm Oil Mill. The unit only

received FFB input from SOU 15. The location map of the estates is presented in Map 1. The

hectarage statement for individual estates is presented in Table 4.

Table 4 : Summary of Estate crop age profile and area in SOU 15, Sua Betong

Age category (year)

Sengkang Salak Bradwall Tampin-

Linggi Sg Bahru PD Lukut Siliau

Sua Betong

Immature /Replant 314 376.29 1,249.82 278 569.05 131 60.00 373

>4 - 8 338.50 111.73 262.60 - 352.08 - 250.00 842

9 - 14 672.50 548.99 564.62 2,398.06 80.50 278 750.02 1205

15 – 18 1,167 1,196.67 189.49 2,0231.75 - 883 622.40 43

19 – 25 190 199.46 77.80 804.84 - - - 275

> 25 12 207.94 67.75 - - 94 58.29 43

Total cultivated 2,694 2,641.08 2,412.08 1874 1,001.63 1,386 1,740.71 2,781

*Total not cultivated

156.18 303.28 166.92 229.55 111.68 111.73 101.25 266.2

Rubber - - 438.79 - 330.86 - - -

Total certified area ( ha )

2,850.18 2,944.36 3,017.79 2,103.55 1,444.17 1,497.73 1,841.96 3,047.82

Table 5: FFB Production for all Supply Base Estates for SOU 15

Estate 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012

Sengkang 67,406 65,858 61,090 56,831 51,992

Salak 56,767 72,503 60,904 51,268 56,007

Bradwall 27,904.72 29,088.90 28,236.06 31,623.39 32,482.18

Sg Bahru 2,785.51 4,926.04 6,608.39 7,723.10 8,160.87

PD-Lukut 32,183 36,721 33,208 31,679 33,363

Tampin Linggi 49,233 45,200 44,934 40,458 41,451

Siliau 38,968.03 35,308.94 36,838.38 33,698.80 37,980.47

Sua Betong 52,519.65 51,247.16 51,550.45 54,558.29 52,519.65

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1.7 Other Certification Held

SOU 15 does not hold any other certifications

1.8 Organizational Information and Contact Person

The company contact person details are as follows:

Name: Puan Sabarinah Marzuky

Designation: Head, RSPO & Certifications Unit

Address:

Main Tower, Level 3A,

Plantation Tower

No.2, Jalan PJU 1A/7

Ara Damansara

47301 Petaling Jaya, Selangor

Malaysia

Contact No.: +603 78484388

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 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 & 6. Details of

production area (mature/immature) are also listed.

Table 6 Area Statement of the Supplying Estates

Name of supplying

estate

Estates Area (Ha)

Immature Mature Area

Rubber

Non-

Cultivated Total (Ha)

Sengkang 314.00 2,380 -

156.18 2,850.18

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Salak 376.29 2,264.79 - 303.28 2944.36

Bradwall 884.03 1,432.23 438.79 262.74 3,017.79

Sungai Bahru 569.05 432.58 330.86 111.68 1,444.17

Tampin Linggi 278.00 1,596.00 - 229.55 2,103.55

PD – Lukut 131.00 1,255.00 - 111.73 1,497.73

Sua Betong 469.00 2,315.00 - 263.82 3,047.82

Siliau 60.00 1,680.71 - 101.25 1,841.96

3,081.37

13,356

769.65 1540.23 18,747.56

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

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 26th

Nov 2012 – 30th

Nov 2012 ( 5 audit days ) and

involving 8 estates, and the Sua Betong Palm Oil Mill of the SOU 15 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.

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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 7 : Assessment Programme

Date Location Activities

26th November

2012 Opening Meeting Opening Meeting at Sua Betong Palm Oil

Mill, Negeri Sembilan. Supply chain audit at KKS Sua Betong (Documentation review, Mills operation, Workshop and Storage, Water collection point and Interview Session with workers)

27th November

2012 Visit to Sungai Bahru Estate Visit to Tampin-Linggi Estate

Audit at Sg. Bahru Estate (Documentation review, Linesite visit, Workshop and Storage, Riparian/Buffer zone, Field operation, Replanting, Landfill and Interview Session with workers, HA, Gender committee, local communities Storage facilities, Nursery, Sg. Takau bunds and flooded area and Linesite facilities.

28th November

2012 Visit to PD-Lukut Estate Visit to Bradwall Estate Visit to Salak Estate

Audit at PD-Lukut estate (Muster ground, Storage Facilities, Boundary Stones, Document Review, Biodiversity area and Manuring) Audit at Bradwall estate (Manuring operation, HCV area, Storage facilities, Linesite, Documentation Review and interview with ground workers) Visit for facilities (Linesite and storage facilities) Documentation review

29th November

2012 Visit to Sengkang Estate

Audit at Sengkang Estate (Documentation review, Linesite visit, Workshop and Storage, Riparian/Buffer zone, HCV area, Field operation, Replanting, Landfill and Interview Session with workers, HA, cattle owner, kindergarten .

30th November

2012 Closing meeting at Sua Betong Palm Oil Mill

Documentation review Preparation for closing meeting Closing meeting and findings presentation to the management.

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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 8 : Auditor's Profile

Evaluation Team Notes

Team Leader 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 of audits on oil palm plantations.

Auditor 1 –

Plantation

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 is a Lead Auditor for

RSPO, trained by RSPO for auditing against RSPO P&C and involved

in a number of plantation assessments and audit of palm oil mill.

Auditor 2 –

Environment and

Social

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 session 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

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 informal meetings and interviews. During the

audit , meetings with workers, mandores, Hospital Assistant, Kindergarten, Creche minders ,

small holder and local community 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.

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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 for 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-conformity and observation 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 responses to the related stakeholders,

workers and community.

Based on the records, the requests are mainly on social issues.

At the estate level, records are kept and documented e.g.

a) Communication logbook( internal )

b) Communication logbook( external )

c) Complaint Book

In addition , PD Lukut has another book , Request for Repair house and Building –

Due to the frequency of request.

In Sengkang Division 1, records are kept in the Miscellaneous file. In response to one of the requests on road usage made on 10/1012 by a stakeholder, it was noted that prompt action was taken by the Management on the following day. Whatever responses made were recorded in the same file.

No request has been made on environment and legal information

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:

SOU 15 has the following publicly available management policies ( April 2011 ) that are posted on

the notice boards in the estate e.g. sighted at Ladang Sg Bahru and the mill office.

a) Gender policy

b) Social policy

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c) Food safety policy

d) Occupational health & Safety policy

e) Slope and river protection policy

f) Environment & Biodiversity policy

g) Quality policy

h) Lean six sigma policy

On the website: http://www.simedarby.com, commitment to social issues, environment and land ownership are available.

Copies of the land titles are kept in the main office e.g. in Sengkang Estate office rather than in the Division office

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 follows:

1. Objective , Management program & Action Plan

2. 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: Available publicly on website

Plans and impact assessment relating to environmental and social impacts are documented and are publicly available on the website, http://www.simedarby.com

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 mitigating 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: 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.

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 follows:

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

1.2.6 Negotiation procedures (C 6.4)

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Findings In compliance: Yes: X No:

Objective

evidence: Available publicly on website

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 follows:

- 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:

SOU 15 is operating in compliance with Malaysian legal requirements such as Quit rent payment,

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

The mill operating licences and permits are posted on the premise notice board

The followings are some of the licences obtained:

References are made to the following files: Jabatan Alam Sekitar & File Badan Kawal Selia/Air

At the Sua Betong Palm Oil Mill :

MPOB Licence 549681004000( 1/6/2012 - 31/5/2013) for 360,000MT FFB

DOE Licence : 002084 ( 1 July 2012 – 30 Jun 2013 ) for 60 MT per hour . Mode of discharge: Alur air ( Watercourse discharge application )

a) BOD 3 days, 30°C <100 mg /l

b) Suspended Solids < 400 mg/l

c) Oil & Grease < 50 mg/l

d) Ammonical Nitrogen < 150 mg/l

e) Total N < 200 mg/l

f) pH 5.0 – 9.0

g) Temperature < 45° C

For the ‘Pengukuran pelepasan bendasing dari cerobong’ ( stack sampling ) comply with the Malaysian Standard for Air Pollution Control , MS 1596:2003 – emission of 0.4 g/Nm3

For smoke density indicator and alarm, the monitoring is done using the ‘Carta Ringlemann’ which should not be > no. 2 ( for chart ) or an opacity <40%.

Ref; Machinery file has copies of:

a) Boiler / dandang Stim

b) Sterilizer ( 6 units )

c) Air receiver

d) Steam separator

e) Back pressure receiver

f) Water softener )( 2 unit )

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g) Deaerator Storage tank

h) Vertical Air Receiver

i) Deaerator Head

j) etc

The water is sourced from a pond depression along small streams within the Sua Betong Estate WGS 84 : 2◦ 31’ 42”, 101◦ 53’ 43”. From this pond the water is pumped into the reservoir. This water is used for the processes in the mill.

They have their licence approved by the State authority, Badan Kawal Selia Air Negeri Sembilan. Document reference : SUKNS.200(07) 752/60 dated 19

th October 2012.

Based on the application form ( BKSA/NS/AB-RT) , the estimated abstraction amount is 1440m3/day.

For the estate, Ladang PD Lukut, some of the legal compliance viewed were :

a) MPOB licence No: 518323002000 ( Ha : 2094 )

b) Permit Barang Kawalan Berjadual for Fertiliser( 1000 MT ) and Diesel ( 7,460 Lit ) . No. siri: N002042

c) Jabatan Keselamatan – Akta Kilang dan Jentera 1967 ( The Factories and Machinery Act ) Air receiver / Pengandung Tekanan Tak Berapi PMT –NS 15219

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

Findings In compliance: Yes: X No:

Objective

evidence:

SOU 15 has documented their system which includes information on legal requirements in

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

It is found in the :

a. Legal Requirement Register file

b. LORR: Legal and Other Requirements Register

the file includes the legal requirement application and submission for :

a) Occupational Safety & Health

b) Environmental

c) General

d) Other requirement

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.

An evaluation of compliance scorecard of the above is done annually.

The latest evaluation was done on the 1/11/12.

2.1.4 A system for tracking any changes in the law Minor

Findings In compliance: Yes: X No:

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Objective

evidence: Sua Betong follows the ‘ Sime Darby Plantation – Mill Quality Management System’ on Procedure for Legal and other Requirements ( Apendix 5.2.4) .

It states the TQEM-Plantation /Mill is responsible for the update.

All Estates and Mill: the update responsibility has been transferred to Plantation Sustainability Quality Management.

Observation 01

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: 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.

Based on documents, the POM is located inside the land grant No: 35120 , Mukim Linggi , Negeri Sembilan.

Quit Rent receipts are available for view.

In PD Lukut , there are documentation ( 20/11/12) to show that 4 lots are being in the process of being transferred from the previous registered owner , Guthrie Rubber Processing Sdn Bhd and leased to Kumpulan Sua Betong Sdn Bhd.

Land titles were available . Copies of land titles were viewed in both in Ladang Sg Bahru as well in Ladang PD Lukut.

Sengkang Estate titles kept in the main office. They have 11 land lots totalling a hectareage of 2805.45 ha

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: Sg Baru has 39 Land titles. The Estate is in process of submitting their grants to be transferred from rubber to Oil palm cultivation.

E.g. Lot 671 that was submitted 7th Feb 2011 and received the approval from the Alor Gajah Land Office on the 5th Oct 2011.

In PD Lukut, the terms of the titles stated that the lands are to be used for the planting of perennial crop of oil palm only.

Some of the land Grants viewed were: No. Hakmilik 86064, 86067,212793, 87084.

According to records there are 37 titles.

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: Boundaries have been mapped by the PAU, TTAS, R&D Carey Island GPS Department 2008. Only some of the boundary stones remain in most of the estates and these are marked.

For example in PD Lukut , the boundary marker found at the border in field 02B ( adjacent to a housing project ) was visited. N02° 30’ 46.1” , E 101° 50’ 38.4”.

Sengkang: Documented evidence showed that the Boundary stone located within the estate compound.

Minor CAR 01 – Raised

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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: Ladang Sg Bahru: No conflict reported as this estate was established in the 1925s

PD Lukut : No land issues

Sengkang estate was developed in the 1940s. No land 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: In the Sg Bahru Main office, land titles available for all their divisions : Ayer Molek, Lubok China, Bukit Bachang, Home Division are avialble.

Sengkang estate was developed in the 1940s. No land issues

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: The Estates have maps for all the divisions and the estates do not have any claims or disputes.

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.

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 are 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: The annual budget of each estate and the Sua Betong Mill of SOU 15 is found in their respective OPEX 2012-13 document

The POM operating expenditure for the present financial year 2012/13 as well as the projected expenditure to PY 4 or 2015/16 is available.

Categories of expenditures and projected :

a) Estimated Crop from estates

b) Total crop outside

c) Expected crop volume

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d) Rate throughput

e) Mill Utilisation

f) Mill cost : RM/MT FFB

For each estate, Sg Bahru , PD Lukut : Ref: MPlan FY12/13 Budget report available

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.

Following annual budget documents made available during onsite audit:

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

2012/2017 has been completely conducted as program.

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:

The estate like Sg Bahru will refer to the ‘ Estate Quality Management System 1/11/2008’ as the Standard Operating Procedure for Oil Palm Estate.

SOP for the operation ( 2008.v1)

1) Handling environmental Aspects

2) Oil Palm Nursery

3) Estate Upkeep and Cultivation

4) Harvesting and Collection

In addition they will also refer to the Agriculture Reference Manual.

For the Mill, reference is made to the :

a) Mill Quality management system (QMS) for the Palm Oil Mill

b) Mill Quality management system ( QMM ) Quality Management Manual – Standard Operation Manual - management and documentation ( 2008.v1 )

Sua Betong 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:

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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: No: x

Objective evidence:

SOU 15 estates use a workplace inspection form and the mill uses the daily logsheets to monitor the procedures of the various SOPs . The Unit uses this to monitor the effectiveness of the SOP and its safety.

For the mill , daily logsheets of the following were viewed to show monitoring of the various SOPs for the critical points .e.g.

a) Kernel Plant monitoring

b) Supervisor input sheet

c) Nut kernel Station

For e.g. in PD Lukut Estate: Records of ‘Pemeriksaan Tempat Bekerja Work place inspection ‘ was viewed. This is done every 3 months and the latest was done on the 29

th August 2012 on :

a) Spraying

b) Storage procedure

c) Emergency response

The monitoring was also done in Sengkang Division 1 where the estate monitors the PPE usage during spray operation in the ‘Checklist of PPE spraying’

Nevertheless in the same division it was found that no monitoring was done for some of the crucial procedure e.g. Monitoring of triple rinsing procedure.

Minor CAR 02 – Raised

Criterion 4.2: Practices maintain soil fertility at, or where possible improve soil fertility to a level that ensures

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optimal and sustained yield.

4.2.1 Monitoring of fertilizer inputs through annual fertilizer recommendations Minor

Findings In compliance: Yes: x No:

Objective

evidence: Records of monitoring is found in the Fertiliser recommendation and recording file

The file has the agronomic and fertiliser recommendation for both the rubber and oil palm for year 2011/12

The file was viewed to confirmed that in Field OP03 of Sg Bahru Estate : Sept 2012 : NK Mix @ 3.5 kg was applied as per recommended

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

Minor

Findings In compliance: Yes: No: x

Objective

evidence:

Leaf sampling was done in June 2012 and the results were available. It was found to be included in the 2012/13 agronomic & fertiliser recommendation dated 27

th June 2012.

In Sungei Bahru the foliar analysis result was found in the ‘Fertiliser Damage Claims’ file

Observation 02

However in Sungai Bahru/Salak and Sengkang estate the soil sampling results was not able to be presented.

Minor CAR 03

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 is advocated during replanting in SOU 15.

A composting plant beside the Sua Betong POM which has been running since Sept 2011 receives the EFB produced by the Oil Mill . It uses 80 % of the EFB. The EFB is sent by a conveyor to the composting plant.

The balance of the EFB is sent to the Estates and records are kept in the EFB Summary file. E.g. on 23

rd Nov 2012, POM sent to Estate Sengkang 72,720 kg EFB.

Delivery of compost is also recorded in the same file . E.g. on 23/11/12, 2910 kg was sent to Field E286 in Siliau Estate .

POME is discharged through the waterways of Sg Linggi. Mill also monitors the quantity and

quality. Samples taken from the final discharge drain and monitored daily.

In Sungai Bahru Estate, records of EFB received is documented in the ‘Environment Impact Evaluation’ file

E.g. in F2011B the following EFB was applied:

2012

Jul 162,060 kg

Aug 119,600 kg

Sept 315,810 kg

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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:

Reference is made to the policy on slope protection and river buffer zone and the SOP on their documented evidence of practices minimizing soil erosion and degradation. It includes:

a) Soil and water conservation

b) Road construction

c) Road Bridges and culverts

Soil and contour maps are available to identify potential erosion area.

However at Ldg Sg Bahru and Sengkang, no topography map was presented as evidence of availability.

Observation 02

4.3.2 Avoid or minimize bare or exposed soil within estates Minor

Findings In compliance: Yes: x No:

Objective

evidence:

SOU 15 do not advocate blanket spraying and avoids or minimize bare area to reduce soil

erosion.

On mature areas, soft grasses and ferns are maintained. Spraying is confined to circles as well

as selective weeding.

Replant area planted with legume cover crops at a rate of 4.5 - 7 kg per ha. Cover crop Mucuna bractaeta is still being used in some areas sensitive to erosion.

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: X No:

Objective

evidence:

The road maintenance programme is budgeted in the MPlan 2012/13 and monitored through the SAP expenditure system .

For example in the Sg Baru Estate , the followings are the allocations for FY12/13

a) Upkeep road : RM38,969.76 ( spent as of Oct 2012 RM19,583.35 )

b) Bridge/ Culvert : RM 4,269.96 ( spent as of Oct 2012 RM1,925.00 )

PD Lukut has allocated a budget in FY12/13 of RM 75,300 for roads and bridges

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:

A peat area was identified in PD Lukut Estate and left as a bio-diversity area.

4.3.5 Best management practices should be in place for other fragile and problem soils Minor

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(e.g. sandy, low organic matter and acid sulphate soils)

Findings In compliance: Yes: x No:

Objective

evidence:

SOU 15 is a long established estate group and soil has been identified for best

management practices to be used.

In Sungai Bahru Estate, according to the soil map, the soil types identified are Malacca , Munchong and Gajah Mati Series.

In PD Lukut – the peat area identified in Field 07A has been converted to a bio-diversity site of about 4 ha and jungle trees planted.

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:

Streams within the Lubok China Division and PD Lukut Estate were maintained . Jungle plant species are also planted along the streams to establish the flora along the stream.

However in Ladang Sg Bahru , the stream along F2011C had some erosion and there were some slight spraying of woodies.

Observation 03

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.

In Tampin Linggi, bunds parallel to the river are constructed to prevent water from the Sg Takau river from flowing into the estate. During the recent rain, about 200 ha was flooded and due to frequent occurrences, pumps were installed to pump water out from the field to Sg Takau.

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: X No:

Objective

evidence:

As per the legal regulations, results of monitoring are submitted monthly to the Deparment of Environment ( Jabatan Alam Sekitar ) .

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

Department of Environment.

The records for monthly submission to the DOE, results of BOD analysis as well as daily

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

Water samples were submitted to Sime Darby Laboratory for analysis and results

signed by the lab Chemist were available from the file viewed.

At the Sua Betong POM although the results were available, no comments were provided to explain the analysis.

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Observation 04

4.4.4 Monitoring rainfall data for proper water management Minor

Findings In compliance: Yes: x No:

Objective

evidence: In the estate rainfall data is collected daily, monthly and the trend is monitored yearly.

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

Findings In compliance: Yes: x No:

Objective

evidence:

In the Sua Betong POM , no monitoring records of water usage was presented although analysis is done.

Observation 06

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:

Effluent water is not drained into protected areas.

4.4.7 Evidence of water management plans Minor

Findings In compliance: Yes: No: X

Objective

evidence:

For evidence of water management plans the Water Management file was referred.

It was found that in PD Lukut Estate and in Sengkang Estate, water usage records are lacking (eventually found in the ‘working account’ file ) .

The plan is incomplete as it only includes:

• Water reduction plan

• Water contingency plan

• Water management plan for immature oil palm

• Rainfall data

Similarly as in 4.4.5 , water usage was also not monitored at the mill

Minor CAR 04

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 SOU 15.

IPM system is integrated into the Agricultural Reference Manual (ARM) which is disseminated to

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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:

Monitoring extent of IPM implementation for the following major pests are available:

a) Rats

b) Barn owl

c) Bagworm – alert then census programme

In Lubok China division, due to the continuous replanting programme and the high incidence of Rhinocerous Beetle attack in 2011C , the division has decided to start the 2 weekly spray programme as recommended by the Planting Advisor during his annual visit 26

th – 27

th July 2012 .

The estate will apply rat bait according to damage census. From the monitoring record of the Sungai Bahru Estate Home Division, who practices 3 monthly census the last application was in Oct 2011 , the manager recommended spot baiting on some of the fields.

In PD Lukut , due to the low incidences, the estate practices ‘calenderised’ or campaign baiting , whereby baits will be applied during January and July yearly.

At Sungai Bahru Estate, the barn owl census conducted in Nov 2012 gave the results as follows:

No. of Boxes: 11

No. of chicks : 4

No. occupied/adults : 10

4.5.3 Recording areas where pesticides have been used Minor

Findings In compliance: Yes: x No:

Objective

evidence: In Sungai Bahru Estate, areas where pesticides have been used are recorded in the Store Issue Book and Staff Costing Book. Then this will be transferred into Estate SAP computer system at the office.

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: No: X

Objective

evidence: Reference is made to the : Environmental Impact Assessment file

Monitoring of total pesticide acitive ingredient usage per hectare and per tonne FFB Production is available.

PD Lukut : Ref: Total Pesticide usage per MT file Monitoring done on a monthly basis. Includes both insecticide as well as herbicide

Month kg a.i /ha kg a.i / FFB

Oct ‘12 0.75 0.29

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Sept ‘12 0.88 0.33

Aug ‘12 0.63 0.26

Both tabulated and graphical presentation available .

However in Sungai Bahru Estate, no monitoring of herbicide was presented during the audit.

Minor CAR 05

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: The written justifications for all agrochemicals used in SOU 15 are found in their SOP and Agriculture Reference Manual (ARM)

Usage of agrochemical is described in Section A10. Weeding in Section B3: Weeding/Spraying Standard Operating Procedures of the estates. The procedure describes the function /justification and methods of applying the agrochemicals, process of monitoring and records that need to be documented.

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.

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

Major

Findings In compliance: Yes: No: x

Objective

evidence:

The chemical storage sites at Lubok China Division , PD Lukut estate are maintained in good condition with the proper ventilation, lighting, sound roofing and walls with lockable door.

However the followings were some of the non-conformities found with regards to the disposal of used empty containers.

a) Sungai Bahru Estate, Lubuk Cina Division : Reuse of empty chemical containers for fertiliser applications.

b) PD Lukut Estate ( Sengkang Div 1 surau ) : Reuse of chemical containers as loose fruit scrapers and dust pans was found in Badang ( during Muster )

c) Sungai Bahru Estate, Lubuk Cina Division , Home Division & PD Lukut & Sengkang Div 1 - Chemical containers were not properly cleaned as required through the triple rinse method as chemical residues were still evident in containers that had been rinsed.

Major CAR 06 Raised

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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: Although it was found that Emergency Response Plan is available in the chemical store, however upon checking the displayed information, it was found that the relevant MSDS were lacking or incomplete for some of the chemicals.

For example :

a) PD Lukut Estate – MSDS for rodenticide Ebor Bait was lacking

b) Tampin Linggi Estate – MSDS for fungicide Antracol was lacking at the nursery store where it is stored.

Observation 06

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

Findings In compliance: Yes: x No:

Objective

evidence: Report of medical surveillance conducted on 29 June 2012 by Dr Prasanna Nair, Occupational Health doctor at Klinik Pantai for 9 sprayers were viewed.

a) Oji

b) Feri

c) Agung

d) Sakur

e) Jamratul

f) Sobion

g) Muhamad Faizi

h) Abd Ghani Doni

i) Muhammad Izzat – mandore

They were all classified/passed as medically fit

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

Findings In compliance: Yes: x No:

Objective

evidence:

It was verified that no female workers work as sprayers in all estates of SOU 15.

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: No paraquat was used in the SOU 15 estates.

Tampin Linggi was using methamidophos for the control of bagworm attacks through trunk injection whenever the incident of infestation was assessed to exceed the threshold level. Application is confined to outbreak situation only and when the necessity

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for trunk injection intervention of the chemical is recommended by the Advisory Department.

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 was no aerial spraying of agrochemicals in all the estates of SOU 15.

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:

The records of pesticides use (including active ingredients used, area treated, amount applied

per hectare and number of applications) are maintained .

In Sungai Bahru Home Division, this is recorded in the following documents:

a) Sg Bahru Estate Cost Book . Home / Ayer Molek Div

For example :

Date : Oct 6/ 2012 ,

Chemical : Cypermethrin

Field 2012B

Ha: 26.40 ha

Mandays : 6

Chemical usage: 6l ( cost : RM 42 )

Labour cost: RM175

Transport : RM25.90

Cost/ha: RM9.20

PD Lukut

Rat baiting costing book

Date : Aug 5/ 2012 ,

Chemical : Ebor Baits / Warfarin

field 86C

Ha: 47 ha

Mandays : 6

Chemical usage: 6439 baits ( cost : RM 289.75 )

Labour cost: RM163.20

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Transport : RM12.00

Cost/ha: RM9.89

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

Findings In compliance: Yes: No: x

Objective

evidence:

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

Documented OSH plan is stated within the Training Needs & Plan-Record (QSHE/13/6.2.3). The OSH plan for financial year 2012/2013 is available and stated the following activities as required by the relevant laws and regulations:

Submission of JKKP 8 Form;

Safety and Health Committee Meeting;

Work Place Inspection;

Medical Surveillance;

Chemical Exposure Training;

Hearing Conversation Training;

Positive Noise Monitoring;

Audiometric Test;

Hazard Identification, Risk Assessment and Risk Control (HIRARC);

Fire Drill;

Chemical Register;

Mill Inspection/Machinery;

OSH Monthly Report; and

First Aid Training. -

In addition, the company also has established the occupational safety and health policy. The policy dated August 2008 with the following commitments was made available to the auditing team:

The company is committed to enhancing the safety and health of its employees, contractors and visitors through effective OSH management that emphasize the followings:

Safe systems of work are clearly formulated, established and maintained;

Employees are trained towards competencies in their jobs;

Compliance with current legislations, regulations and approved codes of practices where applicable in countries which the company operates; and

Continually improve the OSH performances.

The company is also committed to prevent accidents and promote harmonious, safety and healthy working environment for all its employees. In addition, the policy also states that every employee, including contracts workers and visitors are responsible for OSH within the company’s premises.

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OSH Meeting conducted every quarterly as per required by the Occupational Safety and Health Act, 1994. As of 2012, the company has conducted the OSH meetings as follows:

1. Sua Betong Palm Oil Mill

19 January 2012

20 April 2012

30 May 2012

14 August 2012

2. Bradwall Estate

24 February 2012

25 May 2012

16 August 2012

20 November 2012

3. Salak Estate:

28 April 2012

07 July 2012

08 September 2012

4. Sengkang Estate

05 April 2012

16 July 2012

25 October 2012

5. PD Lukut

07 June 2012

10 Oct 2012

Minutes of Meeting for all OSH Meeting conducted for 2012 are maintained in the safety meeting file and made available to the auditing team during the audit.

However, the auditing team noted that the safety and health officer was not included as one of the members of the safety and health committee meeting.

In PD Lukut Estate, first aid training was done on 24/11/12 by the Medical Assistant , Mohd Riduawan. Attendance list was available that includes: Foreman, worker representative, Mandore, field supervisor.

The followings were the non-conformities identified during the audit:

a) It was sighted that the risk assessment for Sua Betong POM ,Sungai Bahru

Estate and Bradwall has not been updated to cater for accident that occurred during the validity of the HIRARC for FY 12/13.

b) Although SOU 15 has a PPE matrix records to identify the PPE required for the various field operations, records of PPE issuance for FY 12/13 is yet to be made at Sengkang Division 1, PPE gloves were issued to the harvester but not used as the worker complained of being too slippery. In PD Lukut, one of the manuring workers had only one glove during the operation. Similarly, in Bradwall estate, manuring workers were using damaged rubber gloves due to the delay

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in the replacement of the PPE.

c) In PD Lukut Estate , the responsible person- En Faris Abdtholuddin , Asst Manager, was appointed as the Safety Officer on Jan 2

nd, 2012. However there

was no appointment of Safety and Health Officer at the Sua Betong POM.

d) ERP was sighted in the chemical store in PD Lukut Estate while in Sengkang Div 1 , the ERP was placed at the workshop.

e) PD Lukut Estate - First aid kit was missing from the Manuring mandore.

f) Checks on first aid kits showed that they did not contain the same medicines and emergency treatment accessories.

g) POM : first aid kits lacking at Grading Station, No appointed safety and health officer.

h) Tampin Linggi Estate: Harvester on motorbike carrying harvesting sickle without the protective sheath, Nursery mandore – not trained/ not familiar with the contents in the first aid kit. First aid kit contains pills which were not supposed to be in.

Major CAR 07 Raised

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:

Record of accidents are documented and submitted to JKKP.

Accident records are recorded in the JKKP File using the ESH Accident Investigation Report Format. 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 JKKP-6 Form that is recorded on a case by case basis and to be submitted and compiled by the central region plantation office before been submitted to the Department of Occupational Safety and Health (DOSH). Observed the latest record for October 2011 that is the month where the recent accident occurs is available and maintained.

In addition the company also found to be utilizing the JKKP 8 Form that need to be submitted to the DOSH on yearly basis. According to the records, the latest submission of JKKP 8 Form was submitted in January 2012.

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. 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 classifications:

Low – Tolerable risk – No additional risk control measure required

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

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

The records of Hazard Identification, Risk Assessment and Risk Control (HIRARC) for 2012 are maintained and available that is classified according to the job list and working environment identified throughout the company’s operation.

Following to the HIRARC, the company also has established the management plan for

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hazard and risk assessment identified stating the Description of each of the identified Risk, control of the risk and action plans need to be taken. The management plan is found to be properly implemented based on the HIRARC and is reviewed quarterly. Latest revision for oil mill dated September 2012 is available to the auditing team during the main assessment. In addition, verification at the Sengkang Estate also revealed that the risk assessment has been revised to take into consideration an accident occurs in August 2012 causing the lost time injury. The revised risk assessment dated September 2012 is made available to the auditing team during the main assessment.

However, the auditing team noted that the risk assessment for visited Bradwall estate is not updated to take into consideration the accident occurs within the estate’s operation.

In PD Lukut Estate, records are kept in the ‘ Pemberitahuan mengenai kemalangan /Kejadian Berbahaya file

According to the file , the latest accident was recorded on 30/9/12 . recorded as a mini

tractor FFB collector accident involving the driver. The JKKP - 6 was filed and the

company has a reporting form : PSQM-ESH Incident Reporting form

4.7.3 Workers should be covered by accident insurance Major

Findings In compliance: Yes: x No:

Objective

evidence:

SOU 15 workers are covered by accident insurance.

In PD Lukut Estate, reference is made to the ‘Insurance Department’ file

Foreign Workers are insured under the Foreign Workers Compensation Scheme . Master Policy No: D08WFC8606982KL/004 for the period 1/7/12 – 20/6/2013

Local Workers working with Sime Darby are covered with Employees Provident Fund (EPF) and Social Security Organization (SOCSO) that is paid on monthly basis. There is also insurance policy available to cover the workers (both local and foreign workers) through the group insurance.

Observed during the audit that group insurance policy for foreign workers (Policy No. FW035782 – Sua Betong Palm Oil Mill) covering period of 1 July 2012 to 30 June 2013 is available.

Observed also policy for Bradwall and Salak estates for foreign workers (Policy No. FW035638 and FW036202 respectively) covering period from 1 July 2012 to 30 June 2013 is available.

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: Ref: File Training Needs and Plans : A Training Schedule is available that covers the operation, safety & health , RSPO etc for the FY 12/13,

Training Programme and Plan is available. The Training Plan for 2012 is found to be kept within the Training Needs & Plan Records (QSHE/13/6.2.3). The training was found to include all the relevant departments and sections within the operations and activities of the company. As at the date of the audit, the following trainings have been conducted:

No. Training Details Date Remarks

1. Safety Induction Briefing for New

24 July 2012 Sua Betong Palm Oil Mill

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Workers

2. Work Place Inspection – Training and Briefing

15 June 2012 Sua Betong Palm Oil Mill

3. Steriliser Operation 14 June 2012 Sua Betong Palm Oil Mill

4. Gas Tester 14 June 2012 Sua Betong Palm Oil Mill

5. Soxtherm Training 13 June 2012 Sua Betong Palm Oil Mill

6. PPE and Chemical Hazard Training

11 June 2012 Sua Betong Palm Oil Mill

7. Safety Induction Briefing for New Workers

17 March 2012 Sua Betong Palm Oil Mill

8. Safety Induction Briefing for New Workers

12 March 2012 Sua Betong Palm Oil Mill

9. Safety Induction Briefing for New Workers

02 April 2012 Sua Betong Palm Oil Mill

10. Safety Induction Briefing for New Workers

23 February 2012

Sua Betong Palm Oil Mill

11. Mill Quality Management System SOP

25 February 2012

Sua Betong Palm Oil Mill

12. Safety Training 14 February 2012

Sua Betong Palm Oil Mill

13. Safe Driving and Maintenance for Drivers

20 November 2012

Bradwall Estate

14. Schedule waste Training

9 November 2012

Bradwall Estate

15. Safe Operating Procedures for Manuring workers

30 October 2012 Bradwall Estate

16. First Aid Training for Mandore and Officer

9 October 2012 Bradwall Estate

17. Fire Drill Training 12 October 2012 Bradwall Estate

18. Safe Operating Procedures

01 July 2012 Bradwall Estate

19. Safe Operating Procedures - Pruning

04 October 2012 Bradwall Estate

20. Safe Operating Procedures – Manuring

3 October Bradwall Estate

21. Safe Operating Procedures - Spraying

10 September Bradwall Estate

22. Safe Operating 13 August 2012 Bradwall Estate

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Procedures – First Aid

23. Equipment Maintenance safety and Proper Usage

07 August 2012 Bradwall Estate

24. Chemical Handling 27 June 2012 Bradwall Estate

25. Safety and Health Briefing

22 May 2012 Bradwall Esate

26. Trunk Injection Training and Assessment

10 October 2012 Sengkang Estate

27. Fire Drill report 21 September 2012

Sengkang Estate

28. Basic First Aid Training

20 April 2012 Sengkang Estate

29. Workshop Foreman Training

03 March 2012 Sengkang Estate

30. Chemical Handling 21 June 2012 Sengkang Estate

31. Induction Training with Newly Arrived Workers

12 & 14 July 2012

Sengkang Estate

32. Basic First Aid Training

21 November 2012

Sengkang Estate

33. SOP Briefing for Tractor Driver

22,24/10/12 PD Lukut Estate

34. Safety Briefing / first aid treatment

28/9/11 PD Lukut Estate

35. Safety procedure on handling spraying tools- by Mycrop

3/8/12

PD Lukut Estate

36. Fire Drill Training 12/2/2012 PD Lukut Estate

The company also has taken action to organize and implement the fire drill and basic first aid training. Based on records, the latest fire drill and basic first aid training for palm oil mill was conducted on 24 December 2011. As of 2012, the similar training has yet to be conducted. As stated in the training programme, the training is scheduled to be conducted in December 2012.

At the Lubuk Cina Division, we found that there was no training records for P&D sprayers and in Sengkang Estate, the Hospital Assistant do not have copies of the MSDS of the chemical used by the Estates and he has not undergone any training on chemical use awareness.

Observation 07

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:

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Objective

evidence:

The environmental aspect and impact identification form is available (file no: EAI/2012) to identify

all the activity process such as nursery, pest and diseases control, petrol/diesoline, power

station, replanting, workshop, weeding and spraying, road etc. Relevant laws and regulations

were identified for each activity.

Evaluation matrix will provide the weightage score to these activities for their further action plan.

The environmental aspect and impact identification form & environmental impact evaluation form

will be prepared by Assistant Manager Azharuddin B.Md Jay.

In Sengkang Division 1 , the Environment Aspect and Impact identification file has the records of the Environment Aspect and Impact identification and the assessment is reviewed yearly .

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: No: X

Objective

evidence:

In SOU 15, a form known as ‘Quality/Safety/Environment management programme ( for FY 2012/13 ‘ ) is used for the implementation of environmental improvement plan . It is used to monitor or track the implementation at 6 monthly intervals.

Example : Sengkang Division 1 estate uses the form to identify the environmental improvement plan to mitigate the negative impacts and promote the positive ones of the problem issue of ‘to reduce oil spillage and avoid ground spillage’.

Nevertheless in Salak Estate, update on the Environment Improvement plan ( 2008/9 ) ( e.g. Biodiversity , waste management, water usage ) was not carried out. Similarly, although the Environmental Management Plan for Sua Betong Palm Oil Mill FY11/12 is available, the action plan has yet to be updated accordingly.

In the mill the same environmental management plan was found in FY12/13. Since April 2011, same issue such as CEMS was still unable to resolve.

Minor CAR 08

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

evidence:

Baseline assessment done in 2008/09

PSQM has conducted the biodiversity baseline assessment report for SOU15 on July 2008 and April 2009 for the relevant place.

Sengkang Estate HCV identified are:

a) River buffer zone ( HCV 4)

b) Worship area ( HCV 6)

c) Water catchment / Natural ponds ( 3 ponds ) ( HCV 4 )

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d) Hindu cemetery ( HCV 6 )

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

Findings In compliance:

Yes: x No:

Objective

evidence: For the management plan for HCV habitats (including ERTs) and their conservation , the Biodiversity file was referred.

The action plan – Biodiversity of Sime Darby Plantation for Sengkang Estate was available and was dated July 2012, however in Salak Estate the management plan available has not been updated since 2008-2009.

Observation 08

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:

Evidence of a commitment to discourage any illegal or inappropriate hunting, fishing or

collecting activities is through the erecting of signboards at specific locations.

In PD Lukut Estate– evidence of signboard to discourage any illegal or inappropriate hunting, fishing was erected at the entrance to the estate.

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 was available for 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.

The company has the list for identification of waste, types of wastes and the sources. The main types of waste are categorized into schedule waste, domestic waste, recycle waste and clinical waste.

In Sengkang Estate , this is found in the Biodiversity file . It has a section on ‘ Identification & management of Wastewater for FY 12/13’

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:

Procedure for handling domestic waste is in the Sime Darby Plantation Quality

Management system (SPMS) Appendix 9

Sengkang Estate domestic waste is disposed by contractor 2 times per week. During the month of October 2012, 9 trips were made to transport the domestic waste to the official landfill known as Ayer Molek Landfill , Sg Bahru.

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For Scheduled waste, the estate has disposed it to official collector - Kualiti Kitar Alam Sdn Bhd. The latest disposal was documented . Type of waste: SW 102, 305, 306, 409 ( weight – 1,070 kg ) collected on 8/11/2012.

Although SOU 15 has procedures, the followings were found to be in non-conformity:

a) In Sengkang Div 1 Estate and in Sungai Bahru Lubok Cina division, workers has indiscriminately disposed of their motorcycle 4T /2T containers and its black oil into the domestic waste bins.

b) The recycled bins were not used as per the waste identified. ( the waste was not segregated )

c) In Bradwall Estate, empty paint containers were not placed in the Schedule Waste site which is supposed to be categorized and disposed under schedule waste. SW417

d) In Sengkang: a. No scheduled code for the empty pesticide container. b. Oil stain with the saw dust was found on the ground near the storage area ( improper spill kit usage, Oily chemical sump with dead beetles and chemical container covers, Domestic waste / Festival celebration waste improperly disposed ( at frond stack ), Records of disposal incomplete as it records only one disposal for 2012

e) In PD Lukut Estate, the Scheduled Waste storage lubricants do not have an oil trap as well as spill kit.

f) At the POM, Scheduled Waste Drum was used as a stool at the Grading Station and thrown into the Scrap yard site. At the Storage area, spill kit was lacking. Soiled and Oily rags were thrown indiscriminately

Minor CAR 09

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 like EFB are placed back into the fields.

Pruned fronds are placed along the inter-rows.

EFB are applied back to the fields.

POME discharged to watercourse as per DOE licence

In SOU 15, about 80% of the EFB are converted into organic fertilizer through the composting plant and then applied back to the fields. The remaining 20% of the EFB are used for circle mulching the immature palms in the replanted fields. This was observed in Sungai Bahru Estate during the onsite inspection.

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

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Month FFB processed

Fibre consumed

Shell consumed

Power generated(kWh)

kWh/FFB

Jul '13

23,172.75

2,780.73

1,373.62

537,020.00 23.17

Aug '13

25,040.90

3,004.91

1,465.37

589,990.00 23.56

Sep '13

24,512.37

2,941.48

1,413.03

557,220.00 22.73

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.

Month FFB Processed

(MT) Diesel Consumed

(Liter)

Diesel Consumption (Liter

per MT FFB)

Jul '13

23,172.75

1,678

0.07

Aug '13

25,040.90

1,515

0.06

Sep '13

24,512.37

2,033

0.08

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: SOU 15 implements the zero burning policy for waste disposal and replanting activity.

Signage of “No Open Burning” are erected at designated sites within the estate particularly at the office, muster area and the line site.

The company has implemented Good Agricultural Practice- Zero Burning Replanting Technique and available in their website. No evidence of open burning during onsite inspection.

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:

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Objective

evidence: During replanting, mechanized felling, chipping and placement of the palm biomass between the planting rows were fully and completely carried out by excavators.

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

Findings In compliance:

Yes: No: X

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 witnessed evidence of

some burning spots in the line-site.

In Sengkang Estate, some burning of domestic waste was seen at the line site.

Minor CAR 10

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: No: X

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

The SOU Betong has the waste management action plan for 2012/2013. The management plan focused on POME, air pollution and contamination of the natural water course.

The preventive management on pollution has been updated annually (latest version FY12/13).

However, the unsettled issues of CEMS under the purview of DOE regarding Stack monitoring emission still remains unresolved since the Mill was commissioned in 2011.

Major CAR 11

5.6.2 Plans are reviewed annually Minor

Findings In compliance:

Yes: No: X

Objective

evidence:

In Sengkang Estate , the pollution prevention plans were not reviewed annually as the last plan was conducted on 19

th May 2009

Minor CAR 12

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: No: x

Objective

evidence: There is no plan on water table management for the small peat area( 4 ha ) in Sengkang estate.

Minor CAR 13

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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:

A Social Impact Assessment (SIA) for both the estates and the mill dated April 2009 has been established and is made available to the auditing team during the main assessment. 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 also evidence of Social Management Plan that is reviewed annually. The management plan describes the various actions to be taken to mitigate the impacts identified in the SIA as well as the procedures to monitor the impact.

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 Impact 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

Findings In compliance:

Yes: x No:

Objective

evidence:

Procedure for communication and consultation between growers/millers and stakeholders within and surrounding the landholdings has been established and is made available to the auditing team during the main assessment. The document dated 1 November 2008 is found to be integrated within the Sustainable Plantation Management System document. The document specifies procedure to be applied upon the receiving of the complaints from the stakeholders until the issues are resolved either through a direct negotiation, using arbitration or through legal proceedings. In practice several procedures have been established and attached as appendices to the

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Sustainable Plantation Management System for each of the identified issues i.e. Appendix 3 – Flowchart and Procedures on Handling Land Disputes.

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 person among its management as the official person for handling the social issues within the estates and mills. The evidence in the form of a appointment letter was made available to the auditor during the audit specifying:

Investigate any complaints and reports received on any social matters and to recommend any appropriate action upon receiving the complaints in writings;

Compile and record each of the complaints and reports received and also the follow-up action taken for each of the complaints;

Provide counselling and advice for workers with regard to any matters relating to social issues; and

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:

Lists of stakeholders at estates and mill level including the records of communication are 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: The procedures for handling complaints and grievances are outlined in the QSHE/02/4.2.3.

Meetings with external stakeholders and the establishment of grievance resolution books at individual estate was found to be implemented. The recent meeting with the external stakeholders has been conducted on 10 October 2012 (Bradwall Estate), and attended by various stakeholders representing various institutional body covering government agencies, private institutions, schools, contractors, suppliers and National Union for Plantation Workers (NUPW). Among matters discussed during the meeting was continuous relationship between the estates/mill and the stakeholders.

Among others, two major issues were discussed as follows:

Occurrence of cattle encroachment into the estates. The auditing team observed that the estate management has taken proactive action to engage the owners of the cattle to discuss the matters raised and the actions scheduled to be carried out in December 2012 (Bradwall Estate). On the other hand, Salak Estate has been engaging the cattle owners since 2010. Evidence of meeting held in the form of

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copies of invitation letters as well as minutes of the meeting was available;

Dissatisfaction over the pay received by the harvesters following the implementation of the new wage system at Sengkang Estate. The grievances were raised in 2011 and were resolved in a timely manner with a harmonious participatory consultation between the NUPW/Workers Representatives and the Management through a meeting held on 14 February 2012.

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

Findings In compliance:

Yes: No: X

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.

Grievance regarding the wages has been resolved in 2011 while the issues pertaining to encroachment of cattle into estates, the auditing team noted that the cattle encroachment issue has yet to be resolved pending negotiations with the cattle owners. All records covering the discussion, meeting and consultation held with the owners of the cattle is maintained.

On 30/4/12 there was a letter by Bazin Husin of Kg Pinang Dalam who wrote in concerning:

a) Road & old palms leaning dangerously over the road

b) Drainage and water that damage the villages fence

Although the SOU 15 management reported that the action has been taken , no documented evidence for its closure was seen and not recorded in the complaint book.

Minor CAR 14

6.3.3 The system is open to any affected parties Minor

Findings In compliance:

Yes: x No:

Objective

evidence:

Observed during the audit that the above system implemented is open to any affected parties.

For external stakeholders, the above system is made available in the company’s website

http://www.simedarbyplantation.com/

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 15 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

Minor

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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.

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 15 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

evidence: Not applicable as the neighbouring communities are recent migrants (in the 1960s). There are no indigenous communities within or surrounding SOU 15 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:

Every worker is paid the recently government decreed minimum wage and this is well in line with the company’s commitment. The estates also encourage the workers to keep on improving their productivities in order to earn more. Samples of payslip were checked and it was evident that most workers earned more than the minimum wage. A couple of spraying workers and their mandore were interviewed on whether they understood the various pay or deduction items contained in their payslips. The followings are some of the rates obtained from documents at PD Lukut Estate. Some of the rates are based on piece-rated and the amount the worker receives depends on their productivity.

a) Per day RM25 b) Price Bonus ( based on CPO price ) : RM1.60 per day ( Oct 2012) c) Overtime : RM 4.98 per hour d) Phone allowance : RM 5/mth e) Afternoon work / piece rated work f) Festive /religious token : RM 100 ( once per year )

Sime Darby plantations also provide rice and cooking oil for the workers on monthly basis.

For each of the workers, the payment scheme is applied based on the Joint Agreement between MAPA and NUPW. The agreement stipulates the rates as well as the terms and conditions of payment for the various categories of essential work activities in the oil palm plantations. The latest agreement dated 8 April 2011 was available during the audit.

Each worker receives his/her pay slip that contains clear details of the salary paid and deductions made as follows:

Number of days worked in a month

Overtime

Sick leave pay

Annual leave pay

Public holiday pay

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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

Net earnings

Several payslips for harvesters and sprayer workers were inspected. In general, harvesting workers received between RM900-2,200/month depending on how much tonnage of FFB harvested while sprayers received between RM450-1600/month.

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:

The foreign worker’s work contracts were verified. The contracts are written in English and Bahasa Malaysia for Malay, Indian and Indonesian workers. The contracts are found to be specifying the followings:

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.

With regard to the workers insurance, the workers are covered through the group

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

number FW025701E07 was made available to the auditors for inspection.

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: x No:

Objective

evidence:

Workers have access to clean water, segregated sanitary and bathing facilities and electricity. All employees are given adequate housing, medical, educational and welfare amenities and waste disposal facilities in accordance with Workers’ Minimum Standard

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of Housing and Amenities Act. Disposal of domestic solid wastes at the linesite is conducted at least twice weekly

The request for a toilet and a water source for the grading station personnel at the mill has been submitted and pending approval from the management.

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:

Company has a policy that allows workers to join trade union. Workers are reported to be members of NUPW. The auditing team met with a number of union leaders in different estates and confirmed that regular meetings with the management were evidently held. Minutes of such meetings were maintained and made available to the auditing team during the main assessment. The Union has also held meetings with the Management in cases where the matters discussed and actions taken could not resolve the issues concerned at estate or mill level. The minutes for each of the meetings held to discuss internal issues by union or worker representatives and the estate management were available during the audit.

1. Bradwall Estate

8 June 2012 attended by 11 committee members of which 8 of them were the NUPW and workers union representatives.

2. Salak Estate

5 November 2012 attended by 10 committee members of which 8 of them were from NUPW.

28 April 2012 attended by 14 members of which 8 of them were the NUPW and workers union representatives

There was also evidence of request made by the NUPW for additional Deepavali holiday. Records of approval given by the management and evidence of communication dated 26 October 2012 were made available to the auditor during the main assessment.

3. Sengkang Estate

Last meeting with the NUPW was held in 2011 concerning the grievances raised by the harvesting workers on problems arising from the implementation of the new wage system. The Meeting held on 14 February 2011 was attended by 12 Members including 10 NUPW and workers representatives. Based on the Minutes of the Meeting, the auditing team noted that the issues have been resolved through an agreed mechanism for the workers to achieve their desired wages.

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

Findings In compliance:

Yes: x No:

Objective

evidence:

The company’s public social policy (in Bahasa and English) dated April 2011 clearly states that all workers are free to join trade union of their choice and to bargain

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collectively.

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 was met. Sime Darby has a policy not to use underage worker and there is no evidence of children working in the field. Based on the employment record, the youngest workers employed is 24 y-o for local workers and 20 y-o 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 to suggest the existence of any 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 not discriminated in terms of working hours vis-a-vis the local workers. With regards to basic amenities, both foreign and local workers are provided with the same 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.

In addition, the company also has the established Gender Policy Statement specifying the followings:

Recognizing the reproductive rights and motherhood responsibilities of women are

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protected under the Universal Declaration of Human Rights and labour laws;

Endeavour to prevent violence against women and all other forms of violence against all its employees;

To establish a complaints and grievance procedures and mechanisms, acceptable to all parties, to address gender-based issues;

Impose sufficient effort, time and funding in the training and development of its employees to increase their awareness, to enhance their skills and understanding of matters pertaining to the policy;

To give special attention relating to the opportunities for the development of women’s leadership at all levels;

To ensure the participation of women in decision-making which they are required to be a member of the various committees that are already established, such as the OSH Committee or the Joint Consultative Committee;

The Gender Committees in each of the estates of the SOU shall be established and

shall meet at least one in 4 months at the estate level.

6.9.2 A specific grievance mechanism is established Minor

Findings In compliance:

Yes: x 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.

Based on the grievance mechanism, the auditing team noted that the gender committee has the sole authority to receive and investigate the complaints raised using the following process flow;

Any employee who has been harassed may lodge a complaint to any of the Gender Committee Members. Before officially filing the complaint, the complainant is encouraged to discuss the matter in confidence with any member of the committee;

Upon receipt of the complaint, the Gender Committee will carry out investigation that shall be commenced within two days from the date of the filing of the complaint. The findings will be made known to the victim within five days after the commencement of the investigation;

Where there is sufficient objective evidence of sexual harassment, a disciplinary proceeding will be instituted against the harasser and will be followed by a disciplinary action against the person who is found guilty of making sexual harassment.

In addition, the appointment letters of the committee members were also made available to the auditing team detailing the role and responsibilities of each of the committee members as follows:

Investigate any report pertaining to sexual harassment and to recommend appropriate disciplinary action;

To record and maintain all complaints and grievances on sexual harassment raised together with actions taken for the respective reports received;

To provide advice and counselling to the workers that requires assistance and support pertaining to the sexual harassment;

To assist the estate’s management in organizing all programs relating to sexual harassment and effort to eliminate sexual harassment.

Gender Committee Meeting has been established and found to be adequately conducted at all estates and mill according to the Manual on the Implementation of the Gender Policy that requires the meeting to be held once every 4 months for the

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respective financial year. Based on records, for the financial year 2012/2013, the latest meeting was conducted on 16 October 2012 (Bradwall Estate and was attended by 11 committee members) and 06 October 2012 (Salak Estate and was attended by 7 committee members) as well as 24 November 2012 (Sengkang Estate and was attended by 13 committee members).

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: The Sua Betong POM is not sourcing FFB from outside suppliers including smallholders.

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

regards to the pricing mechanism for FFB, the price of FFB is recorded on a 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:

Not applicable as Sua Betong POM does not source FFB from outside suppliers including smallholders.

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 15 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. Discussion with a number of contractors operating in

the SOU shows that the contractors are fully aware of the contract agreement they

have signed with the company to provide the service. The conditions for each service

to be provided are spelt out clearly in the agreement. The agreements are fair and

done on transparent manner

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 revealed that all payments are made in a timely manner. Several contracts with suppliers and contractors were noted to show the evidence that payments were promptly made within 5 working days after the assigned job was certified to have been completed.

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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 estate 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 and surrounding schools and religious institutions are an active exercise for SOU 15 and records of contribution e.g. road upgrading, school sport activities, security issues concerning workers etc are available at each estate.

All activities and contribution rendered are recorded in the Communication File and 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 development of any new plantings within the whole SOU 15.

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:

The use of pesticides was well monitored in SOU 15 as evidenced by the available records of

usage and costing. Usage of herbicides were reduced and minimized through judicious circle

sprayings and selective weeding for the inter-rows as and when the need arises.

The planting of beneficial plants for the proliferation of insect pest predators and parasitoids as

well as the establishment of barn owl boxes to effect biological rat control were efficacious for

reducing pesticides usage.

The use of various major agrochemicals were recorded individually and separately for better

monitoring purpose.

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 Yes: x No:

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compliance:

Objective

evidence:

There were no active recycling programmes.

Observation 09

8.1.4 Pollution prevention plans (C 5.6) Major

Findings In compliance:

Yes: x No:

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 mitigating 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: No: x

Objective

evidence:

In every December, the management will do an Operating Expenditure Budget meeting for the next 4 years. The budget will be prepared by the Assistant and Admin Officer. This will be reviewed by the manager and eventually with General Manager.

In 2012 /13 Social : sports day, funeral, donation , religious festival, food subsidy, transport for workers, phone allowance are also provided.

The followings are some of the expenditures obtained from the estate budget :

a) Sg Baru FY 12/13 : Social RM6,300 , Environmental : RM12,500

b) PD Lukut FY 12/13 : Social & Environmental RM 70,756

c) Sengkang Estate FY 12/13 Social RM95,230 , Environmental : RM45,500

As part of Sime Darby Plantation Sdn Bhd CSR programme, 5 kg of rice and 5 kg of cooking oil are provided to each worker in every 2 months.

Coordination between relevant divisions within the Sime Darby Plantation Sdn Bhd are

still lacking, e.g the need to update the estates and the mill concerning new issues

such as the RSPO Supply Chain Standard, training, documentation assistance was

lacking in the preparation of the unit for the audit.

Newly transferred staff need to be aware of the Unit’s RSPO commitments and its

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updated documentation .

Minor CAR 15

3.1.2 Supply Chain

For supply chain, the Sua Betong Oil Mill has decided to use Module D in this assessment. The

findings and objective evidence found 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 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: X No:

Objective

evidence: Sahrulanwar Bin Mansor was appointed as the PIC for environmental/ quality management system on 1

st November 2012.

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.

The procedure for receiving and processing certified and non-certified FFBs is available in their “Standard Operating Procedures (SOP) for Traceability and RSPO Supply Chain Certificate System” (version 1 & issue date: 01-08-2012

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. Sua Betong POM receives FFB from its own supplying estates which certified together with the mill.

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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: The monthly crop report was inspected and observed to be 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 well documented and stored for 5 years as required 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 and is up to date.

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: No sales of RSPO certified product 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.

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Findings In compliance: Yes: X No:

Objective

evidence: The mill will only receive the certified FFB from its own estates. No FFB from out-growers or smallholders will be received by the mill for processing.

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 of to date, there is no transaction of RSPO segregated certified products. The weight bridge ticket and monthly crop report were able to trace back to the 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 15 Sua Betong does not have any outsource activities for palm kernel crushing.

Module D.6: Training

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

Findings In compliance: Yes: No: X

Objective

evidence: Non Conformance 01

CAR: No training plan or training has been provided for the Supply Chain Certification Systems.

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: No claims made because the CPO is delivered/sold to downstream refineries.. 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 12 Minor issued in the P& C. Please refer to the Appendix A for

the details findings and relevant correction actions that have been taken.

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

that the 3 Major CAR can be closed.

Although the 3 Major CARs are closed, the submitted evidence was insufficient so an

Observation is raised for each of the Major CAR for the auditors to verify on the issues during

the next surveillance.

Out of the 12 Minors raised, SOU 15 also submitted evidence for the closing of the Minors and

the Observation raised. From the evidence submitted, 5 of the Minor CARs were closed and

due to insufficient evidence 2 new Observations were raised.

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For the Supply Chain, a total of 1 Non-conformity was raised in the Sua Betong Palm Oil Mill

RSPO Supply Chain audit. Upon reviewing the submission of evidence by SOU 15, this NC is

considered closed.

3.3 Noteworthy Positive & Negative Observation

There were 09 Observations raised. On submission of evidence within the 60 days after the

audit, one of the Observation was closed.

From the closing of the Major and Minor CARs, 5 new observations were 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 C.

Stakeholders did not provide any comments in writing regarding the SOU 15 Sime Darby

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

stakeholders had positive comments about SOU 15 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

Minor 01 Minor 26-30/11/12 Minor Closed and raised

Observation 10

Minor 02 Minor 26-30/11/12 Closed 17/12/12

Minor 03 Minor 27/11/12 Closed 17/12/12

Minor 05 Minor 28/11/12 Closed 17/12/12

M06 Major 29/11/12 Major 06 closed and raised

Observation 11

M07 Major 28/11/12 Major 07 closed and raised

Observation 12

Minor 10 Minor 26/11/12 Closed 17/12/12

M11 Major 30/11/12 Major 11 closed and raised

Observation 14

Minor 15 Minor 29/11/12 Minor Closed and raised

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Observation 13

b) Supply Chain

Reference Class Issued Close

NC 1 Major 26/11/12 Major Closed 03/01/13

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

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SGS RSPO

(Principles & Criteria)

Doc. Number: GP 7003A

Doc. Version date: 01 April 2013

Page: 63 of 80

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

APPENDIX A: CORRECTIVE ACTION REQUEST & OBSERVATION

a) For P&C

CAR # Indicator CAR Detail

01 2.2.3 Date

Recorded> 30 Nov 12

Due

Date> Next surv

Date

Closed> 17/12/12

Non-Conformance:

Evidence that boundary stones are found within the estate and not along the perimeter adjacent

to state land and other reserves are being located and visibly maintained.

Objective Evidence:

Boundary has been mapped by the PAU, TTAS, R&D Carey Island GPS Department 2008. Only some of the boundary stones remain in most of the estates and these are marked.

For example in PD Lukut , the boundary marker found at the border in field 02B ( adjacent to a housing project ) was visited. N02◦ 30’ 46.1”, E 101◦ 50’ 38.4”.

Sengkang: Documented evidence showed that the Boundary stone located within the estate compound.

Minor CAR 01 – Raised

Close-out evidence:

According to the evidence submitted it was reported that all boundary stones has been

recognised – Evidence attached, however map was not submitted. So the evidence

was incomplete to close the CAR.

An observation is raised for the auditors to verify during the next surveillance.

Minor CAR 01 – Closed

Observation 10 Raised

CAR # Indicator CAR Detail

02 4.1.2 Date

Recorded>

30th Nov

12

Due

Date> Next surv

Date

Closed> 05/12/12

Non-Conformance:

Records of monitoring and the actions taken are not maintained and kept for a

minimum of 12 months.

Objective Evidence:

Monitoring of triple rinsing procedure was not conducted in Sengkang estate.

Close-out evidence:

Submitted evidence of training on triple rinsing and its monitoring based on the

procedure provided by Sungai Baru Estate.

Minor CAR 02 – Closed

03 4.2.2 Date

Recorded>

30th Nov

12

Due

Date> Next surv

Date

Closed> 05/12/12

Non-Conformance:

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CAR # Indicator CAR Detail

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

unavailable.

Objective Evidence:

Results of soil sampling are not available in the estate. Foliar analysis result was not

found in the correct file during the audit.

Leaf sampling was done in June 2012 and the results were available. It was found to be included in the 2012/13 agronomic & fertiliser recommendation dated 27

th June 2012.

In Sungei Bahru the foliar analysis result was found in the ‘Fertiliser Damage Claims’ file

However in Sungai Bahru/Salak and Sengkang estate the soil sampling results was not able to be presented.

Minor CAR 03

Close-out evidence:

Refer to evidence attached:

i. Sg Bahru Soil Analysis Result_pg1

ii. Sg Bahru Soil Analysis Result_pg2

Sengkang Soil Analysis being carried out.

Minor CAR 03 Closed

04 4.4.7 Date

Recorded>

30th

Nov

12

Due

Date> Next surv

Date

Closed>

Non-Conformance:

No evidence of water management plans.

Objective Evidence:

For evidence of water management plans the Water Management file was referred.

It was found that in PD Lukut Estate and in Sengkang Estate, water usage records are lacking (eventually found in the ‘working account’ file ) .

The plan is incomplete as it only include :

• Water reduction plan

• Water contingency plan

• Water management plan for immature

• Rainfall data

Similarly as in 4.4.5 , water usage was also not monitored at the mill.

Minor CAR 04

Close-out evidence:

Sengkang Estate has submitted the record for water usage which was already seen

during the audit but was filed in the wrong file.

Minor CAR 04 maintained

05 4.5.4 Date

Recorded>

30th Nov

12

Due

Date> Next surv

Date

Closed> 17/12/12

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CAR # Indicator CAR Detail

Non-Conformance:

Monitoring of pesticide usage units per hectare or per ton crop is not available.

Objective Evidence:

Reference is made to the : Environmental Impact Assessment file

Monitoring of total pesticide acitive ingredient usage per hectare and per tonne FFB Production is available.

PD Lukut : Ref: Total Pesticide usage per MT file Monitoring done on a monthly basis. Includes both insecticide as well as herbicide

Month kg a.i /ha kg a.i / FFB

Oct ‘12 0.75 0.29

Sept ‘12 0.88 0.33

Aug ‘12 0.63 0.26

Both tabulated and graphical presentation available .

However in Sungai Bahru Estate, no monitoring of herbicide was presented during the audit.

Minor CAR 05

Close-out evidence:

Refer to evidence attached:

i. Sg Bahru Herbicide Usage_pg1

ii. Sg Bahru Herbicide Usage_pg2

Minor CAR 05 – Closed

M06 4.6.3 Date

Recorded>

30th Nov

12

Due

Date>

30th Jan

2013

Date

Closed> 17/12/12

Non-Conformance:

Pesticides empty containers 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:

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CAR # Indicator CAR Detail

The chemical storage sites at Lubok China Division , PD Lukut estate are maintained in good condition with the proper ventilation, lighting, sound roofing and walls with lockable door.

However the followings were some of the non-conformities found concerning the disposal of the empty containers:

a) Sungai. Bahru Lubuk Cina Division : Reuse of empty chemical container as a fertiliser container

b) PD Lukut Estate : Reuse of chemical container in found in Badang ( during Muster ), use as a loose fruit scraper and a dust pan ( Sengkang Div 1 surau )

c) Sungai. Bahru Lubuk Cina Division , Home Division & PD Lukut & Sengkang Div 1 Chemical containers were not properly rinsed using the triple rinse method as required as chemical residue was still evident.

Major CAR 06

Close-out evidence:

a) Sg. Bahru: The identified re-used chemical containers were collected and

recorded into the schedule waste record and kept in the schedule waste store.

Sg Bahru Triple Rinsing Training_pg1 b) Sg Bahru Triple Rinsing Training_pg2 completed in 5

th Dec 2012

c) Sengkang Estate - Refer to evidence attached:Triple Rinsing ( Old training

records were submitted )

From the evidence submitted , this CAR is considered closed however an

observation is raised as the training record submitted was dated prior to the date of

audit.

As a result, an Observation is raised for the auditors to follow up during the next

surveillance

Major CAR 06 – Closed

Observation 11 – Raised

M07 4.7.1 Date

Recorded>

30th Nov

12

Due

Date>

30th Jan

2013

Date

Closed> 17/12/12

Non-Conformance:

Incomplete evidence of documented Occupational Safety Health (OSH) plan which is in

compliance with OSH Act 1994 and Factory and Machinery Act 1967 (Act 139)

Objective Evidence:

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CAR # Indicator CAR Detail

The following are the non-conformities identified during the audit:

a) It was sighted that the risk assessment for Sua Betong POM ,Sungai Bahru

Estate and Bradwall has not been updated to cater for accident that occurred during the validity of the HIRARC for FY 12/13.

b) Although SOU 15 has a PPE matrix records to identify the PPE required for the various field operations, records of PPE issuance FY 12/13 is yet to be made at Sengkang Division 1, PPE gloves were issued to the harvester but not used as the worker complain of being too slippery. In PD Lukut, one of the manuring workers had only one glove during the operation . Similarly, in Bradwall estate, manuring worker was using damaged rubber gloves due to the delayed in the replacement of the PPE.

c) In PD Lukut Estate , the responsible person- En Faris Abdtholuddin , Asst Manager , ( Jan 2

nd , 2012 ) was appointed as the Safety Officer. However

there was no appointment of Safety and Health Officer at the Sua Betong POM.

d) ERP was sighted in the chemical store in PD Lukut Estate while in Sengkang Div 1, the ERP was placed at the workshop.

e) PD Lukut Estate - First aid kit was missing from the Manuring mandore.

f) Checks on first aid kits showed that they did not contain the same medicines and emergency treatment accessories.

g) POM : first aid kit lacking at Grading Station, No appointed safety and health officer.

h) Tampin Linggi Estate: Harvester on motorbike carrying harvesting sickle without the protective sheath, Nursery mandore – not trained/ not familiar with the contents in the first aid kit. First aid kit contain pills which were not suppose to be in.

Major CAR 07

Close-out evidence:

On 11/1/13, Sua Betong POM submitted evidence that a First Aid Kit has been

provided at the Grading Station.

The risk assessment was updated and submitted. It was done by Mr

Yogeswaran.Kandasamy, QMO NS ZONE 2 PSQM who is also in charge of Safety

and Health for Sua Betong Oil Mill .

Sengkang Estate - First Aid kit has been placed in the van accordingly with labelling

As the major shortcomings were shown to have been overcome, this Major Car is considered closed. However, since not all the accompanying minor issues were satisfactorily closed and no adequate documents were submitted as evidence, an Observation is raised for the auditors to check during the next surveillance.

Major CAR 07 Closed

Observation 12 – Raised

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CAR # Indicator CAR Detail

08 5.1.2 Date

Recorded>

30th Nov

12

Due

Date> Next surv

Date

Closed>

Non-Conformance:

Environmental improvement plan to mitigate the negative impacts and promote the

positive ones, is not developed, implemented and monitored.

Objective Evidence:

In SOU 15, a form known as ‘ Quality/Safety/Environment management programme ( for FY 2012/13 ‘ ) is used for the implementation of environmental improvement plan . It is used to monitor or track the implementation at 6 monthly intervals.

e.g. in Sengkang Division 1 estate uses the form to identify the environmental improvement plan to mitigate the negative impacts and promote the positive ones of the problem issue of ‘to reduce oil spillage and avoid ground spillage

Nevertheless in Salak Estate no updated on Environment Improvement plan ( 2008/9 ) ( e.g. Biodiversity , waste management, water usage ) was carried out. Similarly, although the Environmental Management Plan for Sua Betong Palm Oil Mill FY11/12 is available, the action plan has yet to be updated accordingly.

In the mill the same environmental management plan was found in FY12/13. Since April 2011, same issue such as CEMS still unable to resolve.

Minor CAR 08

Close-out evidence:

POM to install 2 units of water flow meter. Unbudgeted CAPEX approved and Purchase

Order already generated by HQ. Awaiting item delivery.

The evidence submitted is insufficient for a closure of this Car.

Minor CAR 08 - Maintained

09 5.3.2 Date

Recorded>

30th Nov

12

Due

Date> Next surv

Date

Closed>

Non-Conformance:

Having identified wastes and pollutants, an operational plan has not been developed

and implemented, to avoid or reduce pollution.

Objective Evidence:

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CAR # Indicator CAR Detail

Although SOU 15 has procedures , the followings were found to be in non-conformity:

a) In Sengkang Div 1 Estate and in Sungai Bahru Lubok Cina division, workers have indiscriminately disposed of their motorcycle 4T /2T containers and its black oil into the domestic waste bins.

b) The recycled bins were not used as per the waste identified. ( the waste was not segregated )

c) In Bradwall Estate, empty paint containers were not placed in the Schedule Waste site which is supposed to be categorized and disposed under schedule waste. SW417

d) In Sengkang: a. No scheduled code for the empty pesticide container. b. Oil stain with the saw dust was found on the ground near the storage area ( improper spill kit usage, Oily chemical sump with dead beetles and chemical container covers, Domestic waste / Festival celebration waste improperly disposed ( at frond stack ), Records of disposal incomplete as it records only one disposal for 2012

e) In PD Lukut Estate, the Scheduled Waste storage lubricants do not have an oil trap as well as spill kit.

f) At the POM , Scheduled Waste Drum was used as a stool at the Grading Station and thrown into the Scrap yard site. At the Storage area, spill kit was lacking. Soiled and Oily rags were thrown indiscriminately.

Minor CAR 09

Close-out evidence:

On 11/1/13, Sua Betong POM submitted evidence

a) The identified SW drums were collected and recorded into schedule

waste record and kept in the schedule waste store.

b) Spill kit placed in the Laboratory temporarily while the pump house

construction to be completed.

c) The soiled and oiled rags collected and stored in the scheduled

waste store.

Sungai Bahru - Already disposed all the motor oil 4T/2T-Refer to evidence attached

Sengkang Estate - Proper distribution for recycle bin – Evidence attached

- Drain has been clean up, all rubbish bins being placed at strategic areas

No submission from the other sites, so the evidences are insufficient to close this

CAR.

Minor CAR 09 - Maintained

10 5.5.3 Date

Recorded>

30th Nov

12

Due

Date> Next surv

Date

Closed> 17/17/12

Non-Conformance:

5.5.3 Evidence of burning waste (including domestic waste)

Objective Evidence:

Evidence of burning waste at the linesite.

In Sengkang Estate , some burning of domestic waste was seen at line site.

Minor CAR 10

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CAR # Indicator CAR Detail

Close-out evidence:

In Sengkang Estate, the site for burning domestic wastes has been cleared and

signboard prohibiting burning has been erected accordingly. Refer evidence.

A briefing cum training session was held to warn and remind the workers against this

prohibited practice.

Minor CAR 10 – closed

M11 5.6.1 Date

Recorded>

30th Nov

12

Due

Date>

30th Jan

2013

Date

Closed> 17/17/12

Non-Conformance:

No documented plans to mitigate all polluting activities.

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.

The SOU Betong has the waste management action plan for 2012/2013. The management plan focused on POME, air pollution and contamination of the natural water course.

The preventive management on pollution has been updated annually (latest version FY12/13).

However, the unsettled issues of CEMS under the purview of DOE regarding Stack monitoring emission still remains unresolved since the Mill was commissioned in 2011.

Major CAR 11

Close-out evidence:

The client submitted evidence of correspondences with the relevant parties within Sime

Darby and the problem they have with the CEMS supplier as well as the problem of the

data unable to continuously transmit due to communication line failures.

In view of the progress and the effort made to rectify the problem, the CAR is

considered closed. However due to the unresolved issue an Observation is raised for it

to be verified again during the next assessment.

Major CAR 11 – closed

Observation 14 – Raised

12 5.6.2 Date

Recorded>

30th Nov

12

Due

Date> Next surv

Date

Closed>

Non-Conformance:

Plans are not reviewed annually.

Objective Evidence:

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CAR # Indicator CAR Detail

In Sengkang estate , the pollution prevention plans were not reviewed annually as the last plan was conducted on 19

th May 2009.

Minor CAR 12

Close-out evidence:

In the documents , Corrective Action Plan for Nonconformities raised during ASA01,

submitted, it was mentioned that ‘Pollution prevention has been reviewed in Dec 2012’

however no information on the plans were submitted for review.

Minor CAR 12 – Maintained

13 5.6.3 Date

Recorded>

30th Nov

12

Due

Date> Next surv

Date

Closed>

Non-Conformance:

Monitor and reduce peat subsidence rate through water table management.

Objective Evidence:

There is no plan on water table management for the small peat area( 4 ha ) in Sengkang estate.

Minor CAR 13

Close-out evidence:

14 6.3.2 Date

Recorded>

30th Nov

12

Due

Date> Next Surv

Date

Closed>

Non-Conformance:

The system did not resolve disputes in an effective, timely and appropriate manner.

Objective Evidence:

The established grievance procedures specify the estimated time that is required to be taken for each of the process to be addressed before proceed to the subsequent process.

Grievance regarding the wages has been resolved in 2011 while the issues pertaining to encroachment of cattle into estates, the auditing team noted that the cattle encroachment issue has yet to be resolved pending negotiations with the cattle owners. All records covering the discussion, meeting and consultation held with the owners of the cattle is maintained.

On 30/4/12 there was a letter by Bazin Husin of Kg Pinang Dalam who wrote in concerning

a) Road & old palms leaning dangerously over the road

b) Drainage and water that damage the villages fence

Although the SOU 15 management reported that action has been taken , no documented evidence for its closure was seen and not recorded in the complaint book.

Minor CAR 14

Close-out evidence:

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CAR # Indicator CAR Detail

15 8.1.6 Date

Recorded>

30th Nov

12

Due

Date> Next surv

Date

Closed>

Non-Conformance:

Inadequate mechanism to capture the performance and expenditure in social and

environmental aspects.

Objective Evidence:

Coordination between relevant divisions within Sime Darby Plantation Sdn Bhd are still

lacking e.g need to update the estate and the mill concerning new issues such as the

RSPO Supply Chain Standard, training and documentation assistance was lacking in

the preparation of the unit for the audit.

Newly transferred staff need to be aware of the Unit’s RSPO commitments and its

updated documentation .

Minor CAR 15

Close-out evidence:

In the documents , Corrective Action Plan for Nonconformities raised during ASA01,

submitted, it is mentioned ‘ Supply chain has been briefed to all staff during staff

meeting held on 14/12/2012’ .

However this CAR refers to the whole P&C not only the Supply Chain, so albeit this

CAR is closed, an Observation is raised .

Minor CAR 15 – closed

Observation 13 – Raised

b) For Supply Chain

CAR # Indicator CAR Detail

NC 01 D.6.1 Date

Recorded> 26/11/12

Due

Date> 26/02/13

Date

Closed> 3/01/13

Non-Conformance:

Criterion D.6.1: The facility has not provide the training for all the staff as required to

implement the requirements of the Supply Chain Certification System.

Objective Evidence:

Non Conformance 01

CAR: No training plan or training has been provided for the Supply Chain Certification

Systems.

Close-out evidence:

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CAR # Indicator CAR Detail

SCCS Training was conducted by PSQM for Sua Betong Palm Oil representative on 3rd

January 2013.

Attendance sheet was submitted.

NC 01 – closed

OBSERVATIONS

OBS # Indicator Observation Detail

01 2.1.4 Date

Recorded> 28/11/12

Due

Date> Next Surv

Date

Closed>

Non-Conformance:

A system for tracking any changes in the law

Objective Evidence:

Sua Betong follows the ‘ Sime Darby Plantation – Mill Quality Management System’ on Procedure for Legal and other Requirements ( Apendix 5.2.4) .

It states the TQEM-Plantation /Mill is responsible for the update.

All Estates and Mill: the update responsibility has been transferred to Plantation Sustainability Quality Management.

Observation 01

Close-out evidence:

02 4.3.1 Date

Recorded>

27&29/11/

12

Due

Date> Next Surv

Date

Closed> 5/12/12

Non-Conformance:

Indicator 4.3.1 ( Minor ) : Documented evidence of practices minimizing soil erosion and

degradation (including maps).

Objective Evidence:

Reference is made to the policy on slope protection and river buffer zone and the SOP on their documented evidence of practices minimizing soil erosion and degradation. It includes:

a) Soil and water conservation

b) Road construction

c) Road Bridges and culverts

Soil and contour maps are available to identify potential erosion area.

However at Ldg Sg Bahru and Sengkang, no topography map was presented as evidence of availability.

Observation 02

Close-out evidence:

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OBS # Indicator Observation Detail

Topography map submitted by Ladang Sungai Baru .

Observation 02 – Closed

Obs 03 4.4.1 Date

Recorded> 27/10/12

Due

Date> Next Surv

Date

Closed>

Non-Conformance:

Indicator 4.4.1 ( Major ) : Protection of water courses and wetlands, including maintaining and

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

within the estate.

Objective Evidence:

Streams within the Lubok China Division and PD Lukut Estate were maintained. Jungle plant species are also planted along the streams to establish the flora along the stream.

However in Ladang Sg Baru , the stream along F2011C had some erosion and there were some slight spraying of woodies.

Observation 03

Close-out evidence:

Obs 04 4.4.3 Date

Recorded> 26/11/12

Due

Date> Next Surv

Date

Closed>

Non-Conformance:

Indicator 4.4.3 ( Major ) : 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).

Objective Evidence:

As per the legal regulations, results of monitoring are submitted monthly to the Deparment of Environment ( Jabatan Alam Sekitar ) .

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

Department of Environment.

The records of monthly submission to the DOE, results of 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 signed by the lab Chemist were available.

At the Sua Betong POM although the results were available, no comments were provided to explain the analysis.

Observation 04

Obs 05 4.4.5 Date

Recorded> 26/11/12

Due

Date> Next Surv

Date

Closed>

Non-Conformance:

Indicator 4.4.5 (Minor ) : No Monitoring of water usage in mills (tonnage water use/tonne FFB

processed).

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OBS # Indicator Observation Detail

Objective Evidence:

In the Sua Betong POM, no monitoring records of water usage were presented although analysis is done.

Observation 06

OBS # Indicator Observation Detail

Obs 06 4.6.4 Date

Recorded>

27-

28/11/12

Due

Date> Next Surv

Date

Closed>

Non-Conformance:

Indicator 4.6.4 ( Major ) : 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.

Objective Evidence:

Although it was found that Emergency Response Plan is available in the chemical store, however upon checking the displayed information, it was found that the relevant MSDS were lacking or incomplete for some of the chemicals.

For example :

a) PD Lukut Estate – MSDS for rodenticide Ebor Bait was lacking

b) Tampin Linggi estate – MSDS for fungicide Antracol was lacking at the nursery store where it is stored.

Observation 06

Close-out evidence:

Obs 07 4.8.1 Date

Recorded> 27/11/12

Due

Date> Next Surv

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, including records of

training for employees are kept.

Objective Evidence:

At the Lubuk Cina Division, we found that there was no training records for P&D sprayers and in Sengkang Estate, the Hospital Assistant do not have copies of the MSDS of the chemical used by the Estates and he has not undergone any training on chemical use awareness.

Observation 07

Close-out evidence:

Obs 08 5.2.2 Date

Recorded> 27/11/12

Due

Date> Next Surv

Date

Closed>

Non-Conformance:

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OBS # Indicator Observation Detail

Indicator 5.2.2 ( Minor ) : Management plan for HCV habitats (including ERTs) and their

conservation.

Objective Evidence:

For the management plan for HCV habitats (including ERTs) and their conservation, the Biodiversity file was referred.

The action plan – Biodiversity of Sime Darby Plantation for Sengkang Estate was available and was dated July 2012, however in Salak Estate the management plan available has not been updated since 2008-2009.

Observation 08

Close-out evidence:

Obs 09 8.1.3 Date

Recorded> 30/11/12

Due

Date> Next Surv

Date

Closed>

Non-Conformance:

Indicator 8.1.3 ( Minor ) : Maximizing recycling and minimizing waste or by-products generation.

Objective Evidence:

There were no active recycling programmes.

Observation 09

Close-out evidence:

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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>

26/11/12 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 1 by SGS ( Malaysia) Sdn Bhd on 26th – 30

th Nov

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 participation by the estate managers at the annual surveillance.

Close-out evidence:

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SGS RSPO

(Principles & Criteria)

Doc. Number: GP 7003A

Doc. Version date: 01 April 2013

Page: 78 of 80

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

APPENDIX C: TIMEBOUND PLAN

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APPENDIX D: LIST OF STAKEHOLDERS CONTACTED

Letters concerning the re-assessment was sent to the list of stakeholders submitted by SOU 15

and the relevant stakeholders includes statutory bodies, indigenous peoples, local communities,

workers’ organizations, smallholders, local and national NGO designed to ensure that all

relevant issues concerning compliance with the RSPO Criteria are identified.

Within the period of the public announcement on 25th Oct 2012, no complaints or comments

were received by the client or by SGS (Malaysia Sdn Bhd.

List of stakeholders interviewed during the assessment

Date Location Stakeholders Issues

27th

November 2012

Visit to Sungai Bahru Estate

Interview with a) ground workers, b) HA, c) shopkeeper, d)gender committee & union representative e) local communities, Kg Lubok Cina

a) Sprayers Prakash, Raskumar,Bimal kumal , Dinish Das,Milan Mular – pay on time, no complaints on housing, Mandore Rajendran

b) Hospital Assistant – accidents recorded

c) Gender committee - No issues d) Kg Lubok Cina – no land issues with

Estate. Sometimes attend meetings

28th

November 2012

PD-Lukut Estate Bradwall Estate

Interview internal Stakeholders – Mandores, workers

Issues on pay date, work hours, worker representative, complaint procedure, housing were discussed. No major issues as the workers seemed satisfied with how the management treats them.

29th

November 2012

Sengkang Estate

Interview with a) HA, Mohd Rawe b) cattle owner (smallholder within

the estate), Mdm Yip Thai c) kindergarten, d) Gender Committee e) and workers harvester Mohd

Yusuf and Muhd San f) Mandore Leow Siew Nyoke ( 22

years with company )

a) Hospital Assistant: No issue. Assist in the first Aid kit stock replacement and local communities minor injuries

b) Cattle owner : No land disputes , allowed to use road, cattle grazing no issue

c) Kindergarten : Check on cleanliness and educational provision

d) Gender committee- Attends meetings. issues recorded in complaint book

e) Workers – no complaints