RSPO SURVEILLANCE ASSESSMENT REPORT SIME DARBY …RSPO SURVEILLANCE ASSESSMENT REPORT SIME DARBY...

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CONFIDENTIAL 1 RSPO SURVEILLANCE ASSESSMENT REPORT SIME DARBY PLANTATION SDN. BHD. CERTIFICATION UNIT (SOU 29) - GIRAM KUNAK DISTRICT, SABAH, MALAYSIA ASSESSMENT DATE: 14 th - 17 th January 2013 SIRIM QAS INTERNATIONAL SDN. BHD. Building 4, SIRIM Complex, No. 1 , Persiaran Dato’ Menteri, Section 2, 40700 Shah Alam, Selangor Darul Ehsan, Malaysia. Tel: 603 5544 6448 Fax: 603 5544 6763 Website : www.sirim-qas.com.my

Transcript of RSPO SURVEILLANCE ASSESSMENT REPORT SIME DARBY …RSPO SURVEILLANCE ASSESSMENT REPORT SIME DARBY...

Page 1: RSPO SURVEILLANCE ASSESSMENT REPORT SIME DARBY …RSPO SURVEILLANCE ASSESSMENT REPORT SIME DARBY PLANTATION SDN. BHD. CERTIFICATION UNIT (SOU 29) - GIRAM KUNAK DISTRICT, ... HIRARC

CONFIDENTIAL

1

RSPO SURVEILLANCE ASSESSMENT REPORT

SIME DARBY PLANTATION SDN. BHD. CERTIFICATION UNIT (SOU 29) - GIRAM

KUNAK DISTRICT, SABAH, MALAYSIA

ASSESSMENT DATE: 14th- 17th January 2013

SIRIM QAS INTERNATIONAL SDN. BHD. Building 4, SIRIM Complex,

No. 1 , Persiaran Dato’ Menteri, Section 2, 40700 Shah Alam, Selangor Darul Ehsan,

Malaysia. Tel: 603 5544 6448 Fax: 603 5544 6763

Website : www.sirim-qas.com.my

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TABLE OF CONTENT Page No

1.0 Scope of the Certification Assessment 1.1 Introduction.................................................................................................. 6 1.2 Location of Mills and Estates....................................................................... 6 1.3 Production Volume of All Certified Products................................................ 7 1.4 Certification Details...................................................................................... 7 1.5 Description of The Supply Base................................................................. 7 1.6 Date of Planting and Replanting Cycle........................................................ 8 1.7 Time Bound Plan for Other Management Units........................................... 9 1.8 Progress of Associated Smallholders / Smallgrowers Towards Compliance with

Relevant Standard........................................................... 9

1.9 Organizational Information / Contact Person(s).......................................... 9 2.0 Assessment Process 2.1 Certification Body....................................................................................... . 10 2.2 Qualification of Lead Assessor and Assessment Team.............................. 10 2.3 Assessment Methodology........................................................................... 12 2.4 Date of Next Surveillance Visit.................................................................... 12 3.0 Assessment Findings 3.1 Summary of findings.................................................................................... 13 3.2 Identified Non-conformances....................................................................... 49

3.3 Status of Assessment Findings Previously Identified.................................. 49

3.4 Noteworthy Positive Observation................................................................. 49

3.5 Issues Raised by Stakeholders and Findings with Respect to the Issues... 49

3.6 Supply Chain………………………………………………………………………………………….. 50 4.0 Certified organization’s Acknowledgement of Internal Responsibility and Formal sign-

off of assessment findings………………………………………………………..

55

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Abbreviations:

ARM Agriculture Reference Manual

BOD Biochemical Oxygen Demand B.Sc. Bachelor of Science

CA Collective Agreement

CHRA Chemical Health Risk Assessment COD Chemical Oxygen Demand

CPO Crude Palm Oil CUs Certification Units

DID Drainage and Irrigation Department, Malaysia DOE Department of Environment

DOSH Department of Occupational Safety and Health

EAI Environmental Aspect Identification EARA Environmental Auditors Registration Association

EB Executive Board EFB Empty Fruit Bunch

EIA Environmental Impact Assessment EIE Environmental Impact Evaluation

EMP Environmental Management Plan

EPF Employees Provident Fund EQA Environmental Quality Act

ERT Endangered, Rare and Threatened Species FFB Fresh Fruit Bunch

FMA Factory Machineries Act FSC Forest Stewardship Council

GAP Good Agricultural Practice

GPS Global Positioning System Ha Hectares

HCV High Conservation Value HIRARC Hazard Identification, Risk Assessment and Risk Control

IEMA Institute for Environmental Management and Assessment IPM Integrated Pest Management

ISO International Organization for Standardization

IRCA International Register of Certificated Auditors JCC Joint Consultative Committee

MSDS Material Safety Data Sheet MOA Memorandum of Alliance or Agreement

MPOA Malaysian Palm Oil Association MPOB Malaysia Palm Oil Board

MYNI Malaysia National Interpretation

MYNI – WG Malaysia National Interpretation – Working Group NADOOPOD Notification of Accident, Dangerous Occurrence, Occupational Poisoning and

Occupational Disease

NCR Non-Conformity Report NGO Non Governmental Organisation

OER Oil Extraction Rate

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OG Oil & Grease

OSH Occupational Safety and Health

OSHA Occupational Safety and Health Act OHSAS Occupational Health and Safety Assessment Series

Ph.D. Doctor of Philosophy PIC Person-In-Charge

PK Palm Kernel PMM Proposal of Mitigation Measure

POM Palm Oil Mill

POME Palm Oil Mill Effluent PPE Personal Protective Equipment

PTW Permit To Work QMS Quality Management System

RSPO Roundtable on Sustainable Palm Oil SIA Social Impact Assessment

SDPSB Sime Darby Plantation Sdn. Bhd.

SOCSO Social Security Organization SOU Strategic Operating Unit

SOP Standard Operating Procedure SPIEU Sabah Plantation Industry Employees Union

TQEM Total Quality Environment Management UNFCCC United Nations Framework Convention for Climate Change

UKAS United Kingdom Accreditation Services

USA United States of America USECHH Use and Standards of Exposure of Chemicals Hazardous to Health

WWF World Wide Fund for Nature

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List of tables Table 1: Certification units covered in the assessment

Table 2: Location and addresses of mills and estates

Table 3: Actual CPO and PK tonnage since date of last reporting period (16th January 2011 - 15th January 2012)

Table 4: Approximate CPO and PK tonnage (16th January 2012 – 15th January 2013)

Table 5: SOU 29 Giram - Actual FFB production since date of last reporting period (16th January 2011 - 15th January 2012)

Table 6: Percentage of planted area in Giram Estate by age and planting cycle

Table 7: Percentage of planted area in Mostyn Estate by age and planting cycle

List of Attachment

Attachment 1: Location map of SOU 28, 29 and 30 Sabah, Malaysia

Attachment 2: Surveillance Assessment Programme

Attachment 3: Detail of Non-conformities

Attachment 4: Verification on Previous Assessment Findings

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SURVEILLANCE ASSESSMENT REPORT 1.0 Scope of the Certification Assessment

1.1 Introduction This surveillance assessment report described a certification unit of Sime Darby Plantation Sdn. Bhd. (SDPSB) Strategic Operating Unit (SOU) namely SOU 29 – Giram. The SOU is equivalent to a certification unit as defined in the RSPO Certification Systems Document. An SOU consists of one mill and its supply bases. The supply base is made up of estates owned by SDPSB and or without small holders’ plantations which mainly located near the oil mill.

An SOU is equivalent to a certification unit as defined in the RSPO Certification Systems Document. The SOU consists of one mill and its supply bases. The supply base is made up of estates owned by SDPSB. Giram Oil Mill did not take crop from third parties any longer.

The assessment covered a management unit and their supply bases as detai led in Table 1. The supply bases assessed were confined to estates owned by SDPSB.

The focus of the assessment team was to determine SDPSB Certification Units, SOU 29 –Giram conformance against the RSPO P&C MYNI as well as to verify the actions taken on the previous assessment findings.

Details of the SOUs are described in Table 1: Table 1: Certification units covered in the assessment

No. Certification Unit Palm Oil Mill FFB Supplying Estates owned by SDPSB

1. SOU 29 Giram Oil Mill Giram Estate and Mostyn Estate

1.2 Location of Mills and Estates

SOU 29 is located in Kunak District, Sabah, East Malaysia. The locations of the SOUs are shown in Attachment 1. Location details of the SOU 29 are shown in Table 2.

Table 2: Location and addresses of mills and estates

Certification Unit

Estate/Mill GPS Location

Location Address Latitude Longitude

SOU 29 Giram

Giram POM

4º 35’ 60” N 118º 12’ E 91207 Kunak, Sabah

Giram Estate

4º 35΄ N 118º 12’ E 91207 Kunak, Sabah

Mostyn Estate

4º 39΄ N 118º 07’ E 91207 Kunak, Sabah

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1.3 Production Volume for All Certified Products Table 3: Actual CPO and PK tonnage since date of last reporting period (January 2012 - 31st December 2012)

Certification unit

FFB Processed

(mt)

CPO Production

(mt)

PK Production (mt)

Certified CPO (mt)

Certified PK (mt)

SOU 29 176,552.47 40,107.51 8,311.44 40,107.51 8,311.44

Table 4: Approximate CPO and PK tonnage (July 2012 – June 2013)

Certification unit

FFB Processed

(tonne)

CPO Production

(tonne)

PK Production (tonne)

CPO Tonnage claimed for certification

(tonne)

PK Tonnage claimed for certification

(tonne) SOU 29 182,576 41,992 9,128.40 41,992.00 9,128.40

1.4 Certification Details

The name of the certified Unit and its RSPO identification are as follows:

Parent company: Sime Darby Plantation Sdn. Bhd.

Certificate no RSPO 002 - Giram Oil Mill

The date of certification was the date of the RSPO approval which was 16th January 2009.

The certification for SOU 29 - Giram, the certification covers production from Giram Oil Mill with FFB supplied from company owned estates; i.e. Giram and Mostyn Estates.

1.5 Description of The Supply Base

The FFB is sourced only from company owned estates that are certified. Details of the FFB contribution from each source to SOU 29 are shown in the following tables:

Table 5: SOU 29 Giram - Actual FFB production since date of last reporting period (January 2012 - 31st December 2012)

Estates FFB Production

Tonnes Percentage (%)

Giram 80174.68 47.9% Mostyn 87199.78 52.1%

3rd party (if any) NIL NIL

Total 167374.46 100%

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1.6 Date of Planting and Replanting Cycle

Table 6: Percentage of planted area in Giram Estate by age and planting cycle

Year of planting

Planting cycle (1st, 2nd, 3rd,

etc. Generation)

Mature / Immature Planted area

(ha) Percentage of

planted area (%)

1993 3rd Mature 824.63 21.12

1995 3rd Mature 1276.55 32.69

1996 3rd Mature 612.76 15.69 1999 3rd Mature 319.81 8.19

2009 3rd mature 175.89 4.50 2011 3rd Immature 354.23 9.07

2012 3rd Immature 158.94 4.07 2013 3rd Immature 182.11 4.66

Total 3904.92 100.00

Table 7: Percentage of planted area in Mostyn Estate by age and planting cycle

Year of planting

Planting cycle (1st, 2nd, 3rd,

etc. Generation)

Mature / Immature Planted area

(ha) Percentage of

planted area (%)

1957 1st Mature 1.76 0.05

1980 2nd Mature 143.74 3.89 1981 2nd Mature 128.09 3.46

1982 2nd Mature 62.05 1.68

1983 2nd Mature 103.77 2.81 1984 2nd Mature 41.60 1.13

1988 2nd Mature 23.50 0.64 1990 2nd Mature 105.19 2.85

1991 2nd Mature 38.24 1.03 1992 2nd Mature 81.60 2.21

1993 2nd Mature 56.00 1.51

1994 2nd Mature 104.27 2.82 1995 2nd Mature 80.05 2.17

1996 2nd Mature 501.22 13.56 1997 2nd Mature 1003.37 27.14

2002 2nd Mature 338.93 9.17 2003 2nd Mature 165.49 4.48

2005 2nd Mature 70.09 1.90

2007 2nd Mature 6.00 0.16 2009 2nd Immature 200.96 5.44

2010 2nd Immature 236.03 6.38 2011 2nd Immature 205.26 5.55

Total 3697.21 100.00

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1.7 Time Bound Plan for Other Management Units Initially, there were a total of 65 certification units under Sime Darby Plantation Sdn. Bhd. located in Peninsular Malaysia, Sabah & Sarawak in Malaysia and in Kalimantan, Sumatera & Sulawesi in Indonesia. 42 units in Malaysia and 23 units in Indonesia. At the point of this surveillance assessment, there were 61 palm oil mills (58 SOUs – 3 of the SOUs has 2 mills each) and a total of 204 oil palm estates. The variance was due to in Malaysia, 3 palm oil mills (Jelata Bumi, Sg. Sama and Sg. Tawing) had been closed down and another 3 mills (Mostyn, Sepang and Bukit Talang) were assigned to receive crop solely from third parties. 1 mill (Tamiang) in Indonesia has ceased its operation while 3 new mills has been set up in Indonesia undergoing Stage 1 & Stage 2 audits. Sime Darby Plantation Sdn. Bhd is committed to RSPO certification as announced in the earlier assessment. The certification assessments are being conducted as per their plan with the target for completion by December 2011. To date 36 of their SOUs in Malaysia and 16 SOUs in Indonesia are certified and the remaining 6 SOUs in Indonesia have undergone assessment and pending for certification approval.

1.8 Progress of Associated Smallholders/Smallgrowers Towards Compliance with Relevant Standard SDPSB has no explicit contract agreement with smallholders / smallgrowers on trading solely to them. Hence, there is no established plan for the supply base other than SDPSB owned estates to be in conformance with RSPO requirements. 1.9 Organizational Information/Contact Person SOU 29 is championed by the Estate Manager who is also the contact person. The details of the contact persons for each SOU are as shown below: Chairman of SOU 29: Name: Suhaimi Abu Bakar Designation: Head Zone Sabah Central/South Address: P.O. Box 135, 91007 Tawau, Sabah. Phone #: 089-750434 Fax #: 089-750222 e-mail: [email protected]

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2.0 Assessment Process

2.1 Certification Body SIRIM QAS International Sdn. Bhd. is the oldest and leading certification, inspection and testing body in Malaysia. SIRIM QAS International provides a comprehensive range of certification, inspection and testing services which are carried out in accordance with internationally recognised standards. Attestation of this fact is the accreditation of the various certification and testing services by leading national and international accreditation and recognition bodies such as the Department of Standards Malaysia (STANDARDS MALAYSIA), the United Kingdom Accreditation Services (UKAS), the International Automotive Task Force (IATF), and the Secretariat of the United Nations Framework Convention for Climate Change (UNFCC). SIRIM QAS International is a partner of IQNet, a network currently comprising of 36 leading certification bodies in Europe, North and South America, East Asia and Australia. SIRIM QAS International has vast experience in conducting assessment related to RSPO assessment. We have certified more than a hundred palm oil mills and several estates to ISO 14001 & OHSAS 18001. We have also conducted pre assessment against RSPO Principle and Criteria. SIRIM QAS International was approved as a RSPO certification body on 21st March 2008. 2.2 Qualification of Lead Assessor and Assessment Team The assessment team consisted of four assessors. The details of the assessors and their qualification are detailed below:

Assessment Team

Role/Area of RSPO Requirement

Qualification and Experience

Khairul Najwan Ahmad Jahari

Overall Team Leader Assessor / ecology and environmental issues/ HCV / Forestry

Collected 70 auditor days in auditing Forest Management Certification (FMC – MC&I 2002 and MC&I Natural Forest)

Collected 42 auditor days in auditing RSPO

11 years working experience related to forest management, inventory, surveying, HCVF and logging operation.

Successfully completed accredited Lead Assessor training for ISO 14001: 2004, ISO 9001:2008 and OHS 18001:2000

Successfully completed RSPO Lead Assessor Course – 2011.

B. Sc of Forestry (Forest Management)

Mahzan Munap

Assessment Team Leader /

Occupational health & safety and related legal

Collected over 370 days of auditing experience in OHSAS 18001 and MS 1722 OHSMS (72 days for palm oil milling & 8 days for oil palm plantation). and 9 days RSPO

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issues / environmental issues

CIMAH Competent Person with Malaysian Department of Occupational Safety and Health (DOSH) since 1997.

Occupational Safety and Health Trainer at INSTEP Petronas

Successfully completed RSPO Lead Assessor Course – 2008.

Successfully completed Lead Assessor Course for OHSAS 18001-2000.

Successfully completed IRCA accredited Lead Assessor training for ISO 9001-2006

Successfully completed RABQSA/IRCA EMS Lead Assessor Course for ISO 14001in 2008.

MBA, Ohio University.

B.Sc. Petroleum Engineering, University of Missouri, USA.

Selvasingam TK

Assessor / Good Agricultural Practices (GAP) and environmental issues

8 days experience as Technical Adviser to RSPO Audits.

18 days of auditing experience in RSPO.

B. Sc. (Hons) Agriculture – University of Agricultural Sciences, Hebbal, Banglore, India (1969-1973)

A Planter with Kumpulan Guthrie Berhad (1995-2002 – retired) Inclusive of One year in Liberia and 2 years in Estate Department in Guthrie head quarters

Experience in Managing:

Nursery : Rubber and Cocoa Immature Area : Cocoa Replant, Rubber

Replant, Oil Palm Replant & Oil Palm New Clearing

Mature Area: Cocoa, Rubber & Oil Palm.

Dr. Rusli Muhd Assessor / workers’ & community issues and related legal issues

Collected more than 65 auditor days in auditing RSPO and 16 days of Forest Management Certification (FMC).

Reviewed about 5 or 6 FSC Forest Management certification reports

Prepared Consultancy Reports on SIA for WWF, KPKKT and PESAMA

Taught Industrial Relations and International Forestry.

Research on forest certification Ph.D. (Major: Forest Policy); Minor: Public

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Administration, North Carolina State Univ.

M. Phil. (Forest Policy) Univ. of Edinburgh

B.S.(For) UPM 2.3 Assessment Methodology The surveillance assessment was guided by the sampling formula of 0.8 √y. hence, both 2 estates were planned to be assessed namely Giram and Mostyn. The assessment team carried out field and office assessments for conformance against the RSPO-MY principles and criteria. The visits also covered HCV habitats, labour lines, storage areas and other workplaces. Common systems were identified and specific evidences were recorded for individual estates. Interviews, particularly those with employees, local communities and suppliers were conducted formally as well as informally, without the presence of company management personnel. In addition to that, records as well as other related documentation were also reviewed. The assessment programme is in Attachment 2. 2.4 Date of Next Surveillance Visit The next surveillance audit will be scheduled around October/November 2014.

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3.0 Assessment Findings 3.1 Summary of Findings The assessment was conducted as planned using the methodology described in Section 2.3. Findings against each of the RSPO MY-NI indicators are reported below. It was noted that SOU 29 was guided by their Estate/Mill Quality Management System documents for their operations. These documentation were inspired by the ISO 9001, ISO 14001 and OHSAS 18001 requirements. Although Giram Oil Mill has withdrawn to be certified to ISO 9001, ISO 14001 and OHSAS 18001 but Giram Estate was still certified to ISO 14001 only. Despite the withdrawal it remained evident that the system continued to be implemented. The implementation of the internal management system has facilitated the SOUs to maintain the RSPO certification. A total of five (5) non-conformity reports against RSPO MYNI:2008 requirements were raised as shown in Attachment 3. Corrective actions have been taken by the the SOU and all non-conformities have been closed out Previous year non-conformities raised have been satisfactorily closed following verification of the implemented corrective actions. The assessment team examined all the action plans and found them to be adequate. SDPSB showed their commitment to address the non-conformities by establishing action plans as detailed in Attachment 4. PRINCIPLE 1: COMMITMENT TO TRANSPARENCY

Criterion 1.1

Oi l palm growers and millers provide adequate information to other stakeholder on environmental, social and legal is sues relevant to RSPO Cri teria, in appropriate languages and forms to a l low for effective participation in decis ion making. Indicator 1.1.1

Records of requests and responses must be mainta ined. Major compl iance

Guidance : Growers and mi l lers should respond constructively and promptly to requests for information from stakeholders

Audit findings Mostyn and Giram Estate were still continuing to implement their procedure for responding to any communication as outlined in their Estate/Mill Quality Management System documents. The system required response to all communication within a certain time frame. Action may then be taken to fulfill the request or for decision to be made by relevant person-in-charge at the SOU level or Sabah Zone Office. All communications were logged and registered. The records for all communication were identified and maintained in different files depending on the stakeholder. Each record stated the date of communication received, response and remarks whether requests have been addressed. Among the records inspected were correspondences with the authorities, communities and employees.

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Criterion 1.2

Management documents are publicly available, except where this i s prevented by commercia l confidentia l ly or where disclosure of information would result in negative environmental or socia l outcomes. This concerns management documents relating to environmental, social and legal issues that are releva nt to compliance with RSPO Cri teria . Documents that must be publ icly ava i lable include, but are not necessari ly l imited to:- 1.2.1 Land ti tles / user rights (C 2.2) 1.2.2 Safety and health plan (C4.7)

1.2.3 Plans and impact assessments relating to environ mental and socia l impacts (C 5.1, 6.1, 7.1, 7.3) 1.2.4 Pol lution prevention plans (C 5.6)

1.2.5 Deta i l s of compla ints and grievances (C 6.3) 1.2.6 Negotiation procedures (C 6.4) 1.2.7 Continuous improvement plan (C 8.1)

Guidance: Examples of commercially confidential information include financial data such as costs and income, and details relating to customers and/or suppl iers . Data that affects personal privacy should a lso be confidentia l .

Examples of information where disclosure could result in potential negative environmental or socia l outcomes include information on s ites of rare species where disclosure could increase the ri sk of hunting or capture for trade, or sacred s i tes , which a community wishes to mainta in as private.

Audit findings

There was no restriction noted as to the documents made available to the public except those prevented by commercial confidentially or where disclosure of information would result in negative environmental or social outcomes. SDPSB continued to use the internet for disseminating public information. Information relating to land titles, safety and health plans, pollution prevention plans and the procedure for complaints and grievances were available through SDPSB website at http://plantation.simedarby.com. There are no changes since last year to the documents made available for viewing. They are:

Good Agricultural Practices

Social enhancement

Sustainability initiatives Sustainability Management Programmes and;

Complaint and grievances procedure. These documents highlight current SDPSB practices and their continual improvement plans. Besides the above document SDPSB policy on the followings are also available at the same website:

1) Occupational Safety & Health 2) Environment & Biodiversity 3) Social 4) Gender 5) Slope Protection & River, and 6) Quality

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PRINCIPLE 2: COMPLIANCE WITH APPLICABLE LAWS AND REGULATIONS

Criterion 2.1

There i s compl iance with a l l appl icable loca l , national and rati fied internation al laws and regulations

Indicator 2.1.1 Evidence of compl iance with lega l requirement Major compl iance

Indicator 2.1.2 A documented system, which includes wri tten information on lega l requirements . Minor compl iance Indicator 2.1.3 A mechanism for ensuring that they are implemented. Minor compl iance Indicator 2.1.4 A system for tracking any changes in the law. Minor compl iance

Audit findings SOU 29 has a documented system for identifying, accessing and updating the legal requirements and to monitor the status of legal compliance. SDSPB had ensured all applicable legal requirements pertaining to RSPO are established, implemented and maintained. A special department which is based in Kuala Lumpur was responsible in tracking the changes to the Acts and Regulations in their legal register by communicating with the publisher of the documents. This mechanism was outlined in its procedure. The last revision of the legal register was in July 2012 and it has been communicated to SOU 29. SOU 29 was committed to legal compliance as demonstrated by the evidences of compliance to the applicable legal requirements sighted during the assessment. Licenses and permits issued by the relevant government agencies were available and valid. Licences displayed were those for the purchase and storage of diesel. The purchase and storage of CPO and PK and the approval condition for mills operation. Evidences such as the record of periodic inspection by the Department of Occupational Safety & Health on boilers, pressure vessels and hoisting machines were also available and found satisfactory. However, a major non-conformity report was raised against Indicator 2.1.1 where the Giram Oil Mill (GOM) had infringed on three laws. First, it had operated the steam boiler PMD 10604 not in accordance to Factories and Machinery Act (Person In-Charge) Regulations, 1970. The mill has the Mill Manager as 1st Grade Engineer and two others as Grade 2 engine drivers. The FMA 1967 stated in addition to the Mill Manager being the 1st Grade Engineer in charge of the boiler, he is to be assisted by a first or second grade engineer and a first grade driver during each shift. Second, SOU 29 has been operating with an A4 Electrical Chargeman in violation of the Electricity Supply Act 1990 due to the use of a high voltage aerial line power supply from mill to line site (step up from 415v at the mill to 11kv over the overhead transmission cable and then step down to 415 at the line site) when a B4 Electrical Chargeman is required to be in charge.

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Third, it was found that the mill no longer possessed a valid annual Fire Certificate. Its Fire Certificate had expired on 18th June 2009. Additionally, an OFI was raised against the Giram Palm Oil Mill to frequently update and properly maintained the written contract of service for several workers as required by the Sabah Labour Ordinance. Improvements on updating of contracts of service will be verified in the next audit.

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

rights .

Indicator 2.2.1 Evidence of lega l ownership of the land including his tory of land tenure. Major compl iance Indicator 2.2.2

Growers must show that they comply with the terms of the land ti tle. [This indicator i s to be read with Guidance 2] Major compl iance

Indicator 2.2.3 Evidence that boundary s tones along the perimeter adjacent to state land and other reserves are being located and vis ibly

mainta ined. Minor compl iance Speci fic Guidance: Growers should atte mpt to comply with the above indicator within 15 months from date of

announcement of fi rs t audit. Refer to State Land Office for examples of other reserves .

Indicator 2.2.4

Where there are, or have been, disputes, proof of resolution or progress towards resolution by confl ict resolution processes acceptable to a l l parties are implemented. CF 2.3.3, 6.4.1 and 6.4.2. Minor compl iance

Guidance:

1. For any conflict or dispute over the land, the extent of the disputed area should be mapped out in a participat ory way. 2. Where there is a conflict to the condition of land use as per land title, growers must show evidence that necessary action has been taken to resolve the confl ict with the relevant authori ties . 3. Ensure a mechanism to solve the dispute (Refer to C 6.3 and C6.4) 4. Evidence must be demonstrated that the dispute has been resolved.

5. Al l operations shal l cease on land planted beyond the lega l boundary.

Audit findings SOU 29 has the evidence of legal ownership of its land. Copies of land titles for the estates were sighted at Giram and Mostyn Estate. The original ownership documents are kept at SDPSB’s headquarters . The legal ownership and the map to indicate the boundary stone had been sighted for Mostyn Estate. The estate had 17 separate land titles with one title having a lease hold of 60 years, three titles with lease holds or 999 years and the rest with 99 years. The ownership e.g. Country Lease # 29078 dated 15 May 1967 for 99 years lease with terms and conditions for oil palm plantation was clearly stated. The map of the areas, including the boundary stones were made available. Based on document review, it was confirmed the terms of the land title for the estate has been continuously complied with at Mostyn Estate.

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During audit at Giram Estate it was found the country lease # 105369560 was permitted for cocoa cultivation, owned by Harrison Malaysian Plantation and country lease # 17904 was owned by Sabah Plantation Limited. However the correspondence between Land Management Department of Sime Darby and Giram Estate on the Memorandum of Surrender (MOS) dated 16 May 2012 only stated changes of name from Golden Hope Plantation to Sime Darby Plantation (Sabah). Based on the content of the correspondence, the auditor found the issue nee ded more time to resolve especially when involving the merger exercise from different owner companies, that is, from Golden Hope to Sime Darby. Thus, there is a need to keep track on the status of this issue from time to time during every surveillance audit. Therefore OFI 2.2.1 has been raised.

Figure 1: The boundary stone of Giram Estate adjacent with smallholder, Ranggi Estate During the site visit at Giram Estate, it was noted that the estate had managed to locate some of the boundary stones adjacent with the small holdings. The boundary stones were along the perimeter adjacent to state land and other reserves had been sighted during the site visit (figure 1). Generally, the right to use the land had been adequately demonstrated, and is not legitimately contested by local communities with demonstrable rights.

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, pri or and informed consent.

Indicator 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 compl iance

Indicator 2.3.2 Map of appropriate sca le showing extent of cla ims under dispute. Major compl ia nce

Indicator 2.3.3

Copies of negotiated agreements deta i l ing process of consent (C2.2, 7.5 and 7.6). Minor compl iance Guidance: Where lands are encumbered by legal or customary rights, the grower must demonstrate that these rights are understood and are not being threatened or reduced. This cri terion should be considered in conjunction with Cri teria 6.4, 7.5 and 7.6.

Where customary rights areas are unclear these are best established through participatory mapping exercises involving affected and neighbouring communities .

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This criterion allows for sales and negotiated agreements to compensate other users for lost benefits and/or relinquished

rights . Negotiated agreements should be non-coercive and entered into voluntarily, carried out prior to new investments or operations and based on an open sharing of all relevant information in appropriate forms and languages , including assessments of impacts , proposed benefi t sharing and lega l arrangements . Communities must be permitted to seek legal counsel if they so choose. Communities must be represented through institutions or representatives of their own choosing, operating transparently and in open communication with other community members .

Adequate time must be given for customary decision-making and iterative negotiations a l lowed for, where requested. Negotiated agreements should be binding on all parties and enforceable in the courts . Establ ishing certa inty in land

negotiations i s of long-term benefi t for a l l parties .

Audit findings Evidences of ownership (cross refer to section 2.2) are available and were sighted. It was also noted from records sighted, as well as through interviews with stakeholders, that there were no disputes on land rights in the area. PRINCIPLE 3: COMMITMENT TO LONG-TERM ECONOMIC AND FINANCIAL VIABILITY

Criterion 3.1 There i s an implemented management plan that a ims to achieve long -term economic and financia l viabi l i ty.

Indicator 3.1.1 Annual budget with a minimum 2 years of projection Major compl iance

Specific Guidance:

Annual budget may include FFB yield/ha, OER, CPO yield/ha and cost of production that i s not required to be publ icly ava i lable.

Indicator 3.1.2 Annual replanting programme projected for a minimum of 5 years with yearly review.

Minor compl iance

Audit findings The budget documents for their Financial Years 2012/2013 and projection budgets for 2013/2104, 2014/2015 and 2015/2016 were sighted in Mostyn Estate. Financial year is from current year July to following year June. Besides the normal type of operating budgets allocated for the oil palm plantations (that is, FFB yield/ha, and unit cost of production), the budget continues to include allocation for welfare and social services. A replanting programme for years 2012/2013 until 2017/2018 was provided to the assessors. This programme is reviewed once a year and is incorporated in their annual financial budget. The programme was being implemented as scheduled.

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PRINCIPLE 4: USE OF APPROPRIATE BEST PRACTICES BY GROWERS AND MILLERS

Criterion 4.1 Operating procedures are appropriately documented and cons is tently implemented and monitored.

Indicator 4.1.1 Documented Standard Operating Procedures (SOP) for estates and mi l l s Major compl iance

Indicator 4.1.2

Records of monitoring and the actions taken are mainta ined and kept for a minimum of 12 months . Minor compl iance

Audit findings Mostyn Estate continued to adopt a comprehensive SOP for all its estate practices. Operation activities in the estates include from seedlings in nursery to planting of young palms and plantation upkeep that are guided by the standard operating procedures (SOP). They are established as part of the Estate/Mill Quality Management System documents. For the estates, on top of the Estate Quality Management System, technical guidelines as listed in the Agricultural Reference Manual are also used. However, in Mostyn Estate pruned fronds were not stacked as required and hence a major NCR 4.1.1 was issued. Monitoring of the SOP implementation was closely done by person-in-charge and their records, like field cost book, chemical usage form, mature oil palm work programme for fertiliser application, herbicide spraying, etc. and immature oil palm work programme sheets, etc. were verified. Other records sighted were the issuance of agrochemicals and fertilizer through the stock books, store requisition and issue sheets. Briefing on the SOPs and related documents were conducted and workers are frequently reminded about it during the morning muster. Interviews with employees revealed that they understand the requirements of the SOP. It was also noted that relevant SOP were displayed at various work station for easy reference, for example, at estate office notice board and mill workstation notice board.

Criterion 4.2 Practices maintain soil fertility at, or where possible improve soil fertility to, a level that ensures optimal and susta ined yield. MY-NIWG recommends that the indicators in cri terion 4.2 and 4.3 are l inked

Indicator 4.2.1 Monitoring of ferti l i zer inputs through annua l ferti l i zer recommendations . Minor compl iance

Indicator 4.2.2

Evidence of periodic ti ssue and soi l sampl ing to monitor changes in nutrient s tatus . Minor compl iance Indicator 4.2.3

Monitor the area on which EFB, POME and zero -burn replanting i s appl ie d. Minor compl iance

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Audit findings SOU 29 continued to monitor their fertilizer inputs as recommended by their agronomist. The recommendation was made on annual basis as sighted in the ‘Agronomic & Fertilizers Recommendation Reports – Oil Palm 2012/2013 Leaf (tissue) sampling was carried out in March 2012 and its result formed part of the basis for the fertilizers input recommendation. The quantity of fertilizer applied corresponded to the recommended input stated in Agronomic & Fertilizer Recommendation Report – Oil Palm. No fertiliser was to be applied in fields that were due for replanting in 2013/2014 (208.42 Hectares). All the relevant information was recorded in the Manuring Cost Book. Application of Compost, received from the mill, was on going and at a rate of 100 kilos per palm.

Criterion 4.3: Practices minimise and control eros ion and degradation of soi l s .

Indicator 4.3.1; Documented evidence of practices minimizing soi l eros ion and degradation (including maps). Minor compl iance

Specific Guidance: Replanting on s loping land must be in compl iance with MSGAP Part 2: OP (4.4.2.2)

For Sarawak, steep s lopes are considered high risk erosion areas and cannot undergo replanting unless speci fied in the EIA report and approved by the Natura l Resou rces and Environment Board (NREB).

For Sabah, s lopes 25 degree and steeper are considered high ri sk eros ion areas and cannot undergo replanting unless specified in the EIA report [Environment Protection (Prescribed Activi ties)(Environment Impact Assessmen t) Order 2005]

and approved by the Environmental Protection Department (EPD).

Slope determination methodology (s lope analys is ) should be based on average s lope us ing topographic maps or topographica l surveys . Indicator 4.3.2: Avoid or minimize bare or exposed soi l within estates . Minor compl iance

Specific Guidance: Appropriate conservation practices should be adopted.

Indicator 4.3.3: Presence of road maintenance programme.

Minor compl iance Indicator 4.3.4 : Subs idence of peat soils should be minimised through an effective and documented water management programme Minor compl iance Specific Guidance:

Maintaining water table at a mean of 60 cm (within a range of 50-75cm) below ground surface through a network of weirs , sandbags , etc. in fields and watergates at the discharge points of main dra ins .

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

Minor compl iance Guidance:

Techniques that minimise soil erosion are well-known and should be adopted, wherever appropriate. These may include practices such as :

1. Expediting establ ishment of ground cover upon completion of land preparation for new replant.

2. Maximizing pa lm biomass retention/ recycl ing. 3. Mainta ining good non-competi tive ground covers in mature areas . 4. Encouraging the establ ishment/regeneration of non -competi tive vegetation to avoid bare ground. 5. Construction of conservation terraces for s lopes >15o 6. Advocating proper frond heap stacking such as contour/L-shaped stacking. For straight line planting and s tacking a long

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the terrace edges for terrace planting.

7. Appropriate road des ign and regular maintenance. 8. Divers ion of water runoff from the field roads into terraces or s i l t pi ts . 9. Construction of s top bunds to reta in water within the terrace. 10. Mainta ining and restoring riparian areas in order to minimize eros ion of s tream and river banks .

Audit findings Mostyn Estate was committed to minimize soil erosion. In general, the soil and water conservation practices include constructing and maintaining terraces (terrace planting) on hilly to steep terrains, stacking of the pruned fronds and other biomass retention in the field were consistently implemented. The stacking of fronds was not carried out as required and a NCR was issued under 4.1. Mostyn Estate continued to practice only circle and path spraying for field maintenance in the mature areas as stipulated in their SOP. For replanting areas, the company continued to plant and maintain cover crops. Generation of non-competitive ground covers especially Nephrolepis bisserata and soft grasses have significantly minimized the occurrence of bare ground, soil erosion and surface runoff. Mostyn Estate has indicated the legal compliance to the Environmental Impact Assessment (Order 2005) by carrying out Proposal for Mitigation Measure (PMM) for oil palm replant between 100 ha and 500 ha. During the field visit, Mostyn Estate had satisfactory road condition and accessibility were made possible by regular maintenance guided by its road maintenance programmes which consist of road resurfacing, grading and culvert maintenance. The financial support for this operation could be seen in the annual budget. Records of this activity are adequately maintained. Silt pits at estates visited were seen strategically located along the road to collect diverted road runoff to further minimize road rutting. No peat soils were found during the field visit. Generally, Mostyn Estate has complied with the requirement of conserving areas with more than 250 slope gradients to minimise soil erosion and degradation. Consultation with managers indicated that they were fully aware of the requirements to conserve such areas. Inspection indicated that the sites are not adversely disturbed.

Criterion 4.4 Practices mainta in the qual i ty and avai labi l i ty of surface and ground water.

Indicator 4.4.1

Protection of water courses and wetlands, including maintaining and restoring appropriate riparian buffer zones at or before replanting a long a l l natura l waterways within the estate. Major compl iance

Specific Guidance: Riparian buffer zones: Reference to be made to relevant national regulations or guidel ines from state authori ties e.g. Department of Irrigation and Dra inage (DID), whichever i s more s tringent.

Indicator 4.4.2 No construction of bunds/weirs/dams across the main rivers or waterways pass ing through an estate.

Major compl iance Indicator 4.4.3

Outgoing water into main natural waterways should be monitored at a frequency that reflects the estates and mill s current

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activi ties which may have negative impacts (Cross reference to 5.1 and 8.1).

Major compl iance Indicator 4.4.4 Monitoring ra infa l l data for proper water management Minor compl iance Indicator 4.4.5

Monitoring of water usage in mi l l s (tonnage water use/tonne FFB processed). Minor compl iance

Speci fic Guidance: Data trended where poss ible over 3 years to look into resource uti l i zation

Indicator 4.4.6 Water drainage into protected areas is avoided wherever possible. Appropriate mitigating measures will be implemented following consultation with relevant stakeholders. Minor compliance Indicator 4.4.7

Evidence of water management plans .

Minor compl iance

Audit findings Mostyn and Giram Estate were found to be continuing to implement their SOP and Policy on maintenance of riparian zone. The buffers have been identified in accordance with Sabah Water Resources Enactment (1998). Interviews with the workers revealed that they understand the requirement of keeping the riparian zones free from any agricultural activities such as application of fertilizer and chemical weeding. The site visit was conducted to verify the protection of water courses and wetlands, along all natural waterways within the estate. Mostyn and Giram Estate had maintained the protection on water courses, including maintaining and restoring appropriate riparian buffer zones along all natural waterways within the estate. There was no infringement of buffer zone sighted (figure 2).

Figure 2 : buffer zone has been maintain along the Sg Giram Guided by their SOP conduct water quality monitoring in identified waterways, the monitoring stations are well marked within the estates and mapped out. The water analysis reports were shown to the assessor for verification. Among the parameters tested in the analysis were BOD, COD, total solids,

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suspended solids, oil and grease, ammoniacal nitrogen. There was no evidence of any constructions including bunds/weirs/dams took p lace across the main rivers or waterways passing through any of the visited estates in SOU 29.

The data of rain fall and rain days have been well maintained over the past ten years. Monitoring of water consumption by all the mill is also being carried out. Records on water usage (tonnage water use / tonne FFB processed) were sighted. SOU 29 had developed water management plans. The plans consist of data on demand and supply of water for mills and line site consumption as well as for the estates/fields. Among items in the plans are:

Action to reduce treated water Contingency plan for water shortage.

Mostyn Estate had also encouraged rain water harvesting among workers by providing gutters and storage tanks for workers quarters (figure 3).

Figure 3: Facilities for rain water harvesting

Criterion 4.5 Pests , diseases, weeds and invas ive introduced species are effectively managed us ing appropriate Integrated Pest Management (IPM) techniques .

Indicator 4.5.1

Documented IPM system. Minor compl iance

Indicator 4.5.2 Monitoring extent of IPM implementation for major pests . Minor compl iance

Specific Guidance:

Major pests include leaf eating caterpi l lars , rhinoceros beetle and rats . Indicator 4.5.3

Recording areas where pesticides have been used.

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Minor compl iance

Indicator 4.5.4 Monitoring of pesticide usage units per hectare or per ton crop e.g. total quantity of active ingredient (a i ) used / tonne of oi l . Minor compl iance

Audit findings Mostyn Estate maintained the documented IPM techniques as shown in SOP/Section B13/Pest & diseases and ARM/Section B15/Plant Protection. Usage of pesticides was justified and monitored. Information on the quantity of pesticides and areas applied were documented and used to monitor in relations to FFB produced or land area.

Figure 4: Tunera subalata Figure 5: Cassia cobanenesis Beneficial plants from the four major species namely Tunera subulata, Cassia cobanensis, Antigonon leptopus and Euphorbiacae sp. were continued to be planted in SOU 29 to maintain low population of leaf eating caterpillars, hence reduces the need to use chemical treatment (Figure 4 & 5).

Figure 6: A Barn Owl in the Aviary

Figure 7: Barn Owl Box in the Field

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To introduce Barn Owls in Kunak region estates SDRSB had established a Barn Owl Breeding programme in an Aviary (Figure 6) for later release into fields. This programme is aimed at reducing chemical control of rats. In Mostyn Estate 47 Barn Owl boxes (Figure 7) had been put up in the fields. Monitoring of Barn Owl occupancy was carried out monthly. Ganoderma census was continuously done in Mostyn Estate and infected palms have been identified. The disease was mitigated by excavating the infected soil during replanting and exposing it to sunlight. This is in accordance with their Agricultural Reference Manual . Records showing the agrochemicals active ingredient (ai) used per hectare and per metric tonne basis were seen in Mostyn Estate. Likewise, records of location where pesticides have been used were also available.

Criterion 4.6

Agrochemicals are used in a way that does not endanger health or the environment. There i s no prop hylactic use of pesticides, except in specific situations identified in national Best Practice guidelines. Where agrochemicals are used that are

categorised as World Health Organisation Type 1A or 1B, or are l isted by the Stockholm or Rotterdam Conventions , growers are actively seeking to identi fy a l ternatives , and this i s documented.

Indicator 4.6.1 Written justi fication in Standard Operating Procedures (SOP) of a l l Agrochemica ls use.

Major compl iance Indicator 4.6.2

Pesticides selected for use are those officially registered under the Pesticides Act 1974 (Act 149) and the relevant provis ion (Section 53A); and in accordance with USECHH Regulations (2000). Major compl iance

Specific Guidance: Reference shal l a lso be made to CHRA (Chemica l Health Risk Asses sment) Indicator 4.6.3 Pesticides shall be s tored 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 compl iance Specific guidance: Unless participating in established recycl ing programmes or with expressed permission from the authori ties , triple rinsed conta iners shall be pierced to prevent misuse. Disposal or destruction of containers shall be in accordance with the Pesticide

Act 1974 (Act 149) and Envi ronmental Qual i ty Act 1974 (Scheduled Wastes) Regulations 2005.

Indicator 4.6.4 Al l information regarding the chemicals and i ts usage, hazards, trade and generic names must be ava i lable in language understood by workers or explained careful ly to them by a plantation management officia l at operating unit level .

Major compliance Indicator 4.6.5 Annual medica l survei l lance as per CHRA for plantation pesticide operators . Major compl iance Indicator 4.6.6 No work with pesticides for confi rmed pregnant and breast-feeding women.

Major compl iance

Indicator 4.6.7 Documentary evidence that use of chemicals categorised as World Health Organization Type 1A or 1B, or l i s ted by the

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Stockholm or Rotterdam Conventions and paraquat, i s reduced and/or el iminated. Adoptio n of sui table economic

a l ternative to paraquat as suggested by the EB pending outcome of the RSPO study on IWM. Minor compl iance Indicator 4.6.8 Documented justification of any aerial application of agrochemica ls . No aeria l spraying unless approved by r elevant

authori ties . Major compl iance

Indicator 4.6.9

Evidence of chemica l res idues in CPO testing, as requested and conducted by the buyers . Minor compl iance

Indicator 4.6.10 Records of pesticide use (including active ingredients used, area treated, a mount applied per ha and number of applications) are mainta ined for ei ther a minimum of 5 years or s tarting November 2007. Minor compl iance

Audit findings Mostyn Estate continued to use the chemicals that are registered under the Pesticide Act 1974. N o Chemicals listed in the World Health Organization Type 1A or 1B or Stockholm or Rotterdam Convention was used. Usage and method of agro-chemicals applications (pesticides and herbicides) were justified and stipulated in the ARM and SOP as well as in Safety Pictorial procedure. No illegal agrochemicals (stated by local and international laws) in particular paraquat were used or found in SOU 28. Paraquat was totally replaced by another contact herbicide, glufosinate ammonium. Records of agrochemicals use including active ingredients used, area treated, amount applied per ha and number of applications are maintained and kept up-to date. Relevant information of the agrochemical used by estate workers, largely via morning muster and the use of Safety Pictorial poster, were conveyed and understood by all interviewed during the spraying activities and fertilizer application. It was also verified in the training records that training in chemical handling especially to the sprayers and the storekeeper, had been conducted with the aim of disseminating the correct information and ensuring understanding regarding the usage and hazards of the agrochemicals. Chemical stores are locked at all times. At the chemical stores, the safety and communication documentation include a chemical register which indicates the purpose of chemical usage (intended target), MSDS, hazards signage, trade and generic names. Usage and storage of agrochemicals including pesticides are in accordance with Pesticide Act 1974, Occupational Safety & Health Act 1994 and USECHH Regulations 2000. Empty chemical containers are triple rinsed, pierced and stored for disposal in accordance to the legal requirements. Updated records to show agrochemicals purchase, storage and consumption are available in Mostyn Estate. In order to avoid human exposure to concentrates chemicals, pre-mixing was practiced. MSDS were adequate for each agrochemical at the estate stores.

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Based on the recommendation of the CHRA, medical surveillance has been conducted for employees, such as estate sprayers and mill laboratory operators, whose jobs require them to be exposed to chemicals. Pregnant and breast-feeding women are strictly not allowed to work with pesticides. Aerial application of agrochemicals is not practiced. SOU 29 mills have carried out the chemical residue test quarterly although till today no request from their CPO buyer.

Criterion 4.7 An occupational health and safety plan i s documented, effectively communicated and implemented Indicator 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(Act139). Major compl iance

The safety and health (OSH) plan shal l cover the fol lowing:

a . A safety and health pol icy, which i s communicated and implemented. b. Al l operations have been risk assessed and documented. c. An awareness and tra ining programme which includes the fol lowing speci fics for pesticides :

i . To ensure a ll workers involved have been adequately tra ined in a safe working practices ( See a lso C4.8) ii . Al l precautions attached to products should be properly observed and appl ied to the workers .

d. The appropriate personal protective equipment (PPE) are used for each risk assessed operation. i . Companies to provide the appropriate PPE at the place of work to cover a ll potentially hazardous o perations such

as pesticide appl ication, land preparation, harvesting and i f used, burning.

e. The respons ible person (s ) should be identi fied. f. There are records of regular meetings between the responsible person(s) and workers where concerns of workers about health and safety are discussed.

g. Accident and emergency procedures should exis t and instructions should be clearly understood by a l l workers . h. Workers tra ined in Fi rs t Aid should be present in both field and mi l l operations .

i . First Aid equipment should be available at worksites. Indicator 4.7.2

Records should be kept of a l l accidents and periodica l ly reviewed at quarterly interva ls . Major compl iance Specific Guidance: Record of safety performance is monitored through Lost Time Accident (LTA) rate. Indicator 4.7.3

Workers should be covered by accident insurance. Major compl iance

Audit findings Mostyn Estate had adopted SDPSB’s Occupational Safety and Heal th Policy, plan and programme. The SDPSB Safety and Health Policy were seen displayed prominently in Bahasa Malaysia and English on notice boards at mill and estate office and Muster Ground. Random interviewed with employees showed that they generally understood the basic requirements of the policy, i.e. to work safely, comply with legal requirements, to follow established procedures and instructions from supervisor. In the estate, it was noted that clean water was provided in separate containers ( Figure 8) and

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transported to the field for use by the sprayer team for washing their hands before consuming any food during mid-morning work break or rest.

Figure 8 : Containers for clean water for sprayers.

Figure 9: Harvester with the appropriate PPE Appropriate PPE were given to harvesters (Figure 9) in Mostyn Estate and they were seen to be wearing them to cover all potentially hazardous operations during FFB harvesting. However, at time of visit workers applying Rock Phosphate fertiliser mechanically were without appropriate PPE (goggles, mask, and apron). Hence NCR 4.7.1 was issued

Mostyn Estate in order to ensure the safety of workers maintained and used separate vehicles for transporting them to the fields. A special lorry (Figure 10) approved by JPJ is used to transport general workers and harvesters while sprayers are transported along with premixed chemicals in modified tractor drawn trailers (Figure 11).

Figure 10: Lorry for transporting workers

Figure 11: Tractor Trailer for transporting Sprayers

At the estate, each mandore had been seen provided with the First Aid box to take with them when on duty in the field. First Aid box was also provided at all offices visited including the mill. However, at Giram Oil Mill the contents of the first aid box and the records of casualty and treatment given by First Aiders at the mill’s office could be improved to be in line with the DOSH Guideline on First Aid in the

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Workplace (2nd Edition). An OFI was thus raised. Four other OFIs issued to Giram Oil Mill were as follows:

1. The post mortem report following the Emergency preparedness and response drill/exercise could be improved to detail out the chronological event including when was siren activated, time of arrival of first person and last person at assembly point, time finishing head count, time activating fire fighting team or first aiders swing into action, orderliness of evacuation, etc.

2. The evacuation time to reach assembly point had yet to be improved to meet the company’s

stated time of 5 minutes and less. Employee seriousness and shortcomings like siren could not be clearly heard to be looked into.

3. Although noise mapping had been done, a large map could be displayed at the Boiler area,

Engine Room and Kernel Area in addition to the appropriate PPE signage required to remind employees the safety requirements when working in high noise area.

4. JKKP 7 had yet to be submitted to DOSH by the OHD/ Giram Oil Mill for those employees

identified to have hearing problems.

Criteria 4.8

Al l s taff, workers , smal lholders and contractors are appropriately tra ined.

Indicator 4.8.1 A tra ining programme (appropriate to the scale of the organization) that includes regular assessment of training needs and documentation, including records of tra in ing for employees are kept.

Major compl iance

Audit findings SOU 29 had established their training needs and programmes for the year 2011/12. Generally the training programme covers the major training identified such as RSPO awareness, Safety & Health awareness for spraying on 16 October 2012, First Aid on 28th January 2012, Fire Fighting on 10 September 2011, and handling of scheduled waste on 20 December 2012. The training programmes were also extended to the contractors and suppliers. Trainings were either conducted internally by its own staff or externally by other department within Sime Darby Group or consultant. Training records were updated and well maintained.

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.

Indicator 5.1.1 Documented aspects and impacts ri sk assessment that i s periodica l ly reviewed and updated.

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Major compl iance

Indicator 5.1.2 Environmental improvement plan to mitigate the negative impacts and promote the pos i tive ones , i s developed, implemented and monitored.

Minor compl iance

Audit findings SOU 29 had developed its environmental aspects/impacts register associated with their activities. The assessor found that most of the activities were identi fied and evaluated accordingly. Generally, the Environmental Aspect Identification (EAI) and Environmental Impact Evaluation (EIE) were reviewed on annual basis, at the mill, the last review being 13th November 2012. Environmental improvement plan or known as Environmental Management Programmes (EMP) were then established. It is based on the identified significant aspects that can be improved within the SOUs capabilities. Among the EMP at estates level are reduction of diesel consumption and the planting of beneficial plant while EMP at oil mills include ensuring their effluent discharge and boiler smoke emission are within the legal requirements. Monitoring records showed their effluent discharge and smoke emission were within the legal permissible limits.

Criterion 5.2

The s tatus of rare, threatened or endangered species (ERTs) and high conservation va lue habitats, i f any, that exis ts in the plantation or that could be affected by plantation or mi ll management, shall be identified and their conservat ion taken into

account in management plans and operations . Indicator 5.2.1

Identification and assessment of HCV habitats and protected areas within landholdings; and attempt assessments of HCV habitats and protected areas surrounding landholdings .

Major compl iance Indicator 5.2.2

Management plan for HCV habitats (including ERTs) and their conservation. Major compl iance Indicator 5.2.3 Evidence of a commitment to discourage any i llegal or inappropriate hunting fishing or collecting activities, and devel oping respons ible measures to resolve human -wi ldl i fe confl icts . Minor compl iance

Audit findings The Biodiversity Baseline Assessment Report of Sime Darby Plantation for SOU 29 was prepared by PS-RSPO Unit, TQEM Department dated on November 2009. The assessment had covered all the High Conservation Value (HCV) within and adjacent to their estates. The HCV assessment had identified on the rare, threatened and endangered species (ERTs) for Giram Estate, Mostyn Estate, and Giram POM. The management plan and action plan has developed based on the assessment finding and consultation with related stakeholders. The action plan contained of information represented in tabular format with general descriptions of HCV, action steps and monitoring activities.

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During the assessment at Giram Estate it was found the management of Ulu Balong Division has been changed from Jelata Bumi estate to Giram Estate. However the Biodiversity report was still under the Jeleta Bumi Estate management. The HCV map, including the Sipit Division was also not available in the report. Therefore the assessment report need to improved Based on the management plan derived from the assessment, the Giram Estate has established the action plan and conducted the monitoring on yearly basis. During the site review, the Giram Estate had identified and maintained the significant HVC, e.g. HCV4 which is to control and maintained basic service of natural watershed protection and erosion control for river buffer zone at Kalumpang and Giram River and spring water at Kochin Division and Timor Division (Figure 12).

Figure 12: HCV 4 Conservation of basic service of natural spring water at Giram Estate

Giram Estate also had maintained the HCV6 to control and maintained the religious significance including graveyard, and place of worship mosque and temple. The Sree Muniswarar Alayam Temple was identified as HCV6. During the audit it was noted the temple caretaker was requesting by a letter dated 10 October 2012 to the estate management to demolish the temple (shift the temple statue to Melaka). However it was not updated in the assessment report including the action plan.

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Figure 13: The Temple has been demolish as requested by the temple caretaker at Giram Estate The Giram Estate also conserving the 14.48 ha of area > 25° called the Bukit Saleh Yaacob, Bukit Hj Maon, Bukit Raja Ema, Bukit Sharifah Aini and Bukit Mckenzie. Site visit shows the Giram Estate had conserved the area and there is no any spraying or fertilizer application on these areas. The undergrowth has been restored to natural vegetation (Figure 14).

Figure 14: HCV4 to control the soil erosion on >25 at Bukit Salleh Yaacob

In general, the Biodiversity Assessment report for SOU29 needs to be improved. Therefore OFI 5.2.1 has been raised as below:

The Sree Muniswarar Alayam Temple was demolished as requested by the temple caretaker (Figure 13). However it was not updated in the assessment report, including the action plan.

The Ulu Balong Division management has been changed to Giram Estate. However the Biodiversity report was still under the Jeleta Bumi Estate management.

The HCV map, including the Sipit Division in the report need to improve by indicating the significant HCVs area.

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Generally, it was found the SOU 29 had continued monitor and maintained the significant HCVs areas, including the status of rare, threatened or endangered species (ERTs) and high conservation value habitats. During the site review in Giram and Mostyn Estate it was found the signage’s to prohibit illegal hunting of wildlife were clearly displayed within the plantations (Figure 15).

Figure 15 : Signboard prohibition on illegal hunting at Giram Estate

Criterion 5.3 Waste i s reduced, recycled, re-used and disposed off in an environmental ly and socia l ly respons ible manner.

Indicator 5.3.1

Documented identi fication of a l l waste products and sources of pol lution. Major compl iance

Indicator 5.3.2 Having identified wastes and pollutants, an operational plan should be developed and implemented, to avoid or reduce pol lution. Minor compl iance

Specific Guidance: Schedule waste to be disposed as per EQA 1974 (Scheduled Wastes) Regulations , 2005. Reference to be made to the

national programme on recycl ing of used HDPE pesticide conta iners .

Municipal waste disposal as per local authority or district council in accordance to the Minis try of Health guidel ines (i .e. specifications on landfills, licensed contractors, etc) or Workers’ Minimum Standards of Hous ing and Amenities Act 1990 (Act 446).

Indicator 5.3.3

Evidence that crop res idues / biomass are recycled (Cross ref. C4.2). Minor compl iance

Audit findings The SOU 29 has identified the wastes generated from their operations. Among the wastes identified were biomass, mill effluent and general wastes from line site. It was seen that waste is reduced, recycled, re-used and disposed off in an environmentally and socially responsible manner. Waste management plan and SOP for the disposal of the identified wastes was sighted in the SOU 29. For example, Compost produced from EFB at the mill was applied to palms at 100kg per palm. Domestic

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waste was collected, transported and disposed at government landfills. Apart from that, the estates continued to practice chipping of oil palm trunks and returned to the soils via decomposition during replanting activities.

Criterion 5.4 Efficiency of energy use and use of renewable energy i s maximized. Indicator 5.4.1

Monitoring of renewabl e energy use per tonne of CPO or pa lm product in the mi l l . Minor compl iance

Indicator 5.4.2 Monitoring of direct fossil fuel use per tonne of CPO or kW per tonne palm product in the mill (or FFB where the grower has

no mi l l ). Minor compl iance

Audit findings SOU 29 continued to use renewable energy in the mill. Fibre and shell were used to power the boiler and generate steam for the process as well as electricity for the mill complex and labour line. Records of monitoring for both renewable energy and fossil fuel are available as per the requirement of the indicator. Besides that, diesel reduction programme has been initiated and monitored as part of their environmental management program. The consumption or usage data for 2011 and 2012 are as follows:

Year

Water Usage

(MT) / ton CPO

Water Usage (MT) / ton

CPO

Fossil Fuel Usage

(liter) / ton CPO

Renewable energy used

Fiber (MT) / ton CPO

Shell (MT) / ton CPO

2011 0.77 304.070 466909 13933.86 15727.80 2012 0.31 256.001 492149 12911.48 13241.44

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Audit findings Fire was not used in all estate operations, replanting, land clearing and waste disposal. This practice has been adopted company-wide since 1989 in accordance with what had been written in their zero burning policy and also in the Agricultural Reference Manual. All replanting areas in the SOU were developed without the practice of burning. The replanting practice was verified on site at Mostyn Estate where there was no trace of open burning. Instead palms are felled, chipped/shredded and windrowed within the plantation during replanting development. The palm biomass was left to rot naturally.

Criterion 5.6

Plans to reduce pollution and emissions, including greenhouse gases , are developed, implemented and monitored. Indicator 5.6.1

Documented plans to mitigate a l l pol luting activi ties (Cross ref to C5.1). Major compl iance

Indicator 5.6.2 Plans are reviewed annual ly.

Minor compl iance

Specific Guidance: Pol lutants and emissions are identified and plans to reduce them are developed in conformance to national regulations and guidance.

Criterion 5.5 Use of fire for waste disposal and for preparing land for replanting is avoided except in specific situations , as identi fied in

the ASEAN Guidance or other regional best practice. Indicator 5.5.1

No evidence of open burning. Where controlled burning occurs, it i s as prescribed by the Environmental Qual i ty (Declared Activi ties ) (Open Burning) Order 2003.

Major compl iance Indicator 5.5.2

Previous crop should be felled/mowed down, chipped/shredded, windrowed or pulverized/ ploughed and mulched. Minor compl iance Specific Guidance: A special dispensation from the relevant authorities should be sought in areas where the previous crop or s tand is highly diseased and there i s a s igni ficant ri sk of disease spread or continuation into the next crop.

Indicator 5.5.3 No evidence of burning waste (including domestic waste). Minor compl iance

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Audit findings SOU 29 has established and maintained their plans to reduce pollution. These plans are translated into SOP in their Estate/Mill Quality management System and Sime Darby Plantation - Sustainable Plantation Management System or environmental management program. Among the plans were to reduce black smoke emission, enhance the scheduled waste management, reduce diesel consumption and ensure effluent discharge is within the legal requirements. Monitoring of the pollution and emissions plans were carried out as per schedule and result of monitoring showed there were improvements towards positive trend. PRINCIPLE 6: RESPONSIBLE CONSIDERATION OF EMPLOYEES AND OF INDIVIDUALS AND COMMUNITIES

AFFECTED BY GROWERS AND MILLS

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. Indicator 6.1.1 A documented socia l impact assessment including records of meetings . Major compl iance

Specific Guidance: Non-restrictive format incorporating elements spelt out in this cri terion and ra ised through s takeholder consultation including loca l expertise.

Indicator 6.1.2

Evidence that the assessment has been done with the participation of affected parties . Minor compl iance

Specific Guidance: Participation in this context means that affected parties or their official representatives or freely chosen spokespersons are able to express their views during the identification of impacts , reviewing findings and plans for mit igation, and monitoring the success of implemented plans . Indicator 6.1.3 A timetable with respons ibi l i ties for mitigation and monitoring i s reviewed and updated as necessary.

Minor compl iance

Guidance: Identification of social impacts may be carried out by the grower in consultation with other affected parties , including women and migrant workers as appropriate to the situation. The involvement of independent experts should be sought

where this i s cons idered necessary to ensure that a l l impacts (both po s i tive and negative) are identi fied.

Particular attention should be paid to the impacts of outgrower schemes (where the plantation includes such a scheme). Plantation and mi l l management may have socia l impacts on factors such as :

1. Access and use rights .

2. Economic l ivel ihoods (e.g. pa id employment) and working conditions . 3. Subs is tence activi ties . 4. Cultura l and rel igious va lues .

5. Health and education faci l i ties .

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6. Other community va lues, resulting from changes such as improved transport /communication or arriva l of substantia l

migrant labour force.

Audit findings The social impact assessment report for SOU 29 was prepared internally by Sime Darby’s TQEM in 2009 covering the two estates, namely Mostyn and Giram, and Giram mill. The format of the report is almost similar to reports of other Sime estates whereby it presented the background setting of the assessment, highlighted the social issues and proposed mitigation measures. Each of the estates and the mill had to formulate its own action plan to address the issues raised by the various stakeholders. Among the issues raised include housing conditions, lack of social activities, emergency transport, hospital attendant, grievance procedures, Friday prayers and khairat kematian. The SIA report was prepared with the participation of various stakeholders, namely, estate workers, local communities, contractors, vendors and suppliers. Evidence on participation is shown by the schedules of interviews between the assessors of the report and the stakeholders concerned. In addition to the requirements of the standards, Sime Darby requires its estates and mills to conduct stakeholders’ consultation once in six months presumably to obtain feedbacks from its stakeholders on new social issues, if any. The audit found that Giram estate did regularly update its Social Impacts Assessment Action Plan as required by the standards. However, Giram mill did not do so. Only one updated SIA action plan was seen at Giram mill i.e. updated on 01 December 2012. On the other hand, both the estate and mill did not conduct any stakeholders’ consultation at least once in six months as required by the company’s procedure. The last stakeholders’ meeting was held in November 2011 for Giram estate and July 2012 for Giram mill. Due to this non-conformance with the standards and the company’s procedure a Minor NCR 6.1.3 was raised. The stakeholders’ consultation exercises conducted by the estate/mill managed to identify issues which affect the stakeholders. However, the estate/mill has not drawn up the necessary action plans to address these issues. In the interest of the stakeholders and the estate/mill, it is strongly recommended that action plans be formulated to address the issues raised during the stakeholders’ consultations and incorporate them into the existing SIA action plans.

Criterion 6.2 There are open and transparent methods for communication and consultation between growers and/or mi l lers , loca l

communities and other affected or interested pa rties .

Indicator 6.2.1

Documented consultation and communication procedures . Major compl iance

Indicator 6.2.2 A nominated plantation management officia l at the operating unit respons ible for these i ssues .

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Minor compl iance

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

stakeholders . Minor compl iance

Specific Guidance:

Decisions that the growers or mills are planning to make should be made clear, so that loca l communities and other interested parties understand the purpose of the communication and/or consultation.

Communication and consultation mechanisms should be designed in col laboration with loca l communities and other affected or interested parties These should consider the use of existing local mechanisms and languages . Cons ideration

should be given to the exis tence/ formation of a multi -s takeholder forum. Communications should take into account differential access to information of women as compared to m en, vi llage leaders as compared to day workers , new versus establ ished community groups , and di fferent ethnic groups .

Cons ideration should be given to involving third parties, such as disinterested community groups, NGOs, or government (or a combination of these), to faci l i tate smal lholder schemes and communities , and others as appropriate, in these communications .

Audit findings

Sime Darby Plantation has documented communication procedures for the estates and mill to follow (Appendix 5.5.3.2 of the Estate Quality Management System). In addition, the company has also prepared standard operating manuals on customer communications. So far no issue has been found related to communication and consultation. The estate/mill usually communicates with external parties through letters and files are kept according to the agencies or department concerned. In addition, record books are maintained to register the requests or complaints from outside parties. The common departments or agencies which the estate /mill usually communicates include the Health Department, Department of Labour and Department of Education. The estates and mill communicate with their workers through various means, such as briefings and meetings, notice boards, emails and letters. The morning briefings appear to be most popular means by which the estate management communicates with the workers.

As stated in the external communication procedure, the Estate Manager is the nominated person to handle communication and consultation issues in the estates. However, the manager may delegate the responsibility to the assistant manager to handle these issues. Letters appointing assistant managers to be the responsible official in-charge of these issues were seen during the audit.

The estate/mill does maintain and update their lists of stakeholders which comprise vendors, contractors, local communities and government agencies. The latest list of stakeholders for Giram estate, for example, comprises 16 vendors/suppliers, 10 contractors, 11 government agencies and other stakeholders and 2 community leaders. The list of stakeholders for Giram estate could be improved by adding the neighbouring Sime Darby estates.

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Communications between the estate/mill and the various stakeholders is usually done through letters which are kept in files in the estates and mill. The communication files are kept for quite a long time.

Criterion 6.3

There is a mutually agreed and documented system for dealing with complaints and grievances, which i s implemente d and accepted by a l l parties .

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

Major compl iance

Specific Guidance: Records are to be kept for 3 years .

Indicator 6.3.2 The system resolves disputes in an effe ctive, timely and appropriate manner.

Minor compl iance

Indicator 6.3.3 The system is open to any affected parties . Minor compl iance Guidance:

Dispute resolution mechanisms should be established through open and consensual agreements with relevant affected parties .

Complaints may be dealt with by mechanisms such as Joint Consultative Committees (JCC) with gender representation. Grievances may be internal (employees) or external .

Audit findings

Sime Darby Plantation has documented communication procedures followed by the SOU to handle disputes arising from social as well as land issues (refer the Estate/Mill Quality Management Manual). Interviews with the estate management and staffs revealed that there have been no social and land dispute with outside parties or workers during the past years. Therefore, no records are available to judge whether or not the system resolved disputes in an effective, timely and appropriate manner. The estates and mill have also developed procedures also handle grievance or complaints or grievances from workers. Complaints on housing and other services are usually entered into record books or request for service forms. The records include the name of the person who complained, his address, date, and type of service required. The practices among the estates/mills in Kunak and Tawau differ with respect to getting complaints and grievances from their workers and staffs. Certain estates (eg. Jelata Bumi) require their workers to make verbal requests for services while others (eg. Giram) use forms to record the grievances. Others (eg. Tiger) enter complaints into record books. For the purpose of ensuring uniformity of practices as well as to better facilitate monitoring activities, it is recommended that the practices be standardized for all the estates and mills.

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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 insti tutions .

Indicators 6.4.1 Establishment of a procedure for identifying legal and customary rights and a procedure for identifying people enti tled to compensation.

Major compl iance Indicator 6.4.2 A procedure for ca lculating and distributing fair compensation (monetary or otherwise) is established and implemented. This takes into account gender differences in the power to cla im rights , ownership and access to land; and long -establ i shed communities ; di fferences in ethnic groups ’ proof of lega l versus communal ownership of land. Minor compl iance Indicator 6.4.3 The process and outcome of any compensation cla ims is documented and made publ icly ava i lable. Minor compl iance

Speci fic Guidance:

This cri terion should be cons idered in conjunction with Cri terion 2.3.

Audit findings

The SOU has been using the procedures for handling boundary issues developed by Sime Darby Plantation to deal with customary rights and compensation for loss of legal rights (Appendix 3, Plantation Quality Management System). The procedure starts with confirmation of conflict, negotiation with affected parties and, if not resolved, arbitration process will take place. Compensation on loss of legal rights will be determined by the land authority. So far, there has been no dispute involving customary rights in SOU 29.

Criterion 6.5 Pay and conditions for employees and for employees of contractors a lways meet at least lega l or industry minimum

standa rds and are sufficient to provide decent l iving wages . Indicator 6.5.1

Documentation of pay and conditions . Major compl iance

Indicator 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 offi cia l in the operating unit. Minor compl iance

Indicator 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 ava i lable or access ible (not appl icable to smal lholders ).

Minor compl iance

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Guidance: Where temporary or migrant workers are employed, a special labour policy should be established. This labour policy would s tate the non discriminatory practices; no contract substitution of original contract, post arrival orientation program to focus especially on language, safety, labour laws, cultural practices etc; decent living conditions to be provided. Migrant workers are legalised, and a separate employment agreement should be drawn up to meet immigration requirements for foreign workers , and international s tandards , i f rati fied.

Audit findings Pay and work conditions are spelled out in the employment contracts signed by the workers or staffs. These contracts conform to those stipulated in the Collective Agreement (CA), 2011 - 2013 signed by Sime and Sabah Plantation Industry Employee Union (SPIEU). Among others, the contracts spell out the period of employment, wage rate, work benefits, overtime, annual leave and public holidays. For foreign workers, these contracts are renewed every time the worker renews his/her employment with the estate or mill. 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. The appointment letter is in Bahasa Malaysia and quite self explanatory. The CA, however, is in the English language. The estate/mill union leaders interviewed mentioned that they usually get the help of their leaders at the regional office to explain the CA. Otherwise, they get the necessary briefings from the estate management. 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). In all the estates and mill, new two or three bedroom houses have been built to replace the old ones. In every estate there is a surau, clinic, kindergarten, crèche and canteen. In certain estates electricity is provided 24 hours while in some it is given on certain specific time period. Water is provided free of charge. Visits made to the line site show that the houses and compounds are quite well kept.

Figure 16: New houses at Giram estate and fire extinguisher at one of the houses

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Mostyn Estate has provided houses and amenities for the employees. New houses (Figure 17) are being constructed in phases to replace the old ones. In addition, all the estates provide water supply, medical, educational and basic amenities for the workers. Water supply is provided free of charge Other facilities available within the SOUs are primary school, Humana School (Figure 18) for children of foreign workers, clinic, crèche, and sundry shop.

Figure 17: New workers quarters

Figure 18: Humana School.

Criterion 6.6 The employer respects the right of a ll personnel to form and join trade unions of their choice and to bargain col lectively. Where the right to freedom of association and collective bargaining are restricted under law, the employer faci l i tates

para l lel means of independent and free association and bargaining for a l l such personnel . Indicator 6.6.1 Documented minutes of meetings with main trade unions or workers representatives . Major compl iance Indicator 6.6.2 A publ ished s tatement in loca l languages recognizing freedom of association. Minor compl iance

Guidance:

The right of employees and contractors to form associations and bargain col lectively with their employer should be respected. Documented company pol icy recognizing freedom of association.

Labour laws and union agreements or in their absence, di rect contracts of employment deta i l ing payments and other conditions are available in the languages understood by the workers or expla ined careful ly to them by a plantation

management officia l in the operating u nit.

Audit findings The workers in the estates and mill are members of the Sabah Plantation Industry Employees Union (SPIEU) while the administration staffs are members of the All Malaysian Estate Staffs Union (AMESU). In Tiger estate as well as in Merotai mill, there is a SPIEU representative selected among the workers. Nonetheless, there has been no formal meeting with union representatives in the estate and mill.

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However, the union representative in Giram estate has been appointed as a member o f the Safety Committee. No union representative has been appointed as members of the safety committee at Giram mill. Therefore, there appears to be no minutes of meeting between the management and union representatives in Giram mill. Due to this non-conformance, a major NCR 6.6.1 was raised against the standard. Currently, all estates and mills do not have formal regular meetings with union leaders. This practice is quite acceptable because there is no full committee membership of union leaders in the estate/mill. However, the union leaders need to convey or voice the members’ concerns to the estate/mill management. Therefore, if it has been done yet, the union representatives at each estate/mill can be appointed as members of permanent estate/mill committee, for example, the safety committee. A published statement on freedom of association is displayed in the estate and mill.

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

Indicator 6.7.1

Documented evidence that minimum age requirement i s met. Major compl iance

Guidance: Growers and millers should clearly define the minimum working age, together with working hours . Only workers 16 years and older may be employed, with the stated exception of family farms. Smallholders should allow work by chi ldren only i f permitted by national regulations .

The minimum age of workers should be not less than 16 years, or the minimum school leaving age, or the minimum age permitted under national regulations , where higher.

Audit findings

Sime Darby adhere very strict to the child labour policy. As revealed in the latest Employee Master Listing no person below 18 years old was recruited to work either in Giram estate or Giram mill.

Criterion 6.8 Any form of discrimination based on race, caste, national origin, religion, disabi l i ty, gender, sexual orientation, union membership, pol i tica l a ffi l iation, or age, i s prohibi ted.

Indicator 6.8.1 A publ icly ava i lable equal opportunities pol icy.

Major compl iance

Indicator 6.8.2

Evidence that employees and groups including migrant workers have not been discriminated against. Minor compl iance

Guidance: The grievance procedures detailed in 6.3 apply. Positive discrimination to provide employment and benefi ts to speci fic

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communities i s acceptable as part of negotiated agreements

Audit Findings

A policy on non-discrimination is incorporated in the statement of Social Policy of Sime Darby and posted on notice boards in all estates/mills.

There is no evidence of discrimination based on race, gender or national origin or any other factors. As shown in the employment letter, there are no differences in the terms of employment between foreign and local workers or between male and female workers. These workers live in the same housing complex and enjoy similar benefits. However, due to government policies, education opportunit ies differ between local and foreign children. Interviews also revealed that there is no discrimination on any bases in the estates/mill.

Criterion 6.9 A pol icy to prevent sexual harassment and all other forms of violence against women and to protect their reproductive

rights i s developed and appl ied.

Indicator 6.9.1 A pol icy on sexual harassment and violence and records of implementation. Major compl iance

Indicator 6.9.2 A speci fic grievance mechanism is establ ished. Major compl iance Guidance: There should be a clear policy developed in consultation with employees , contractors and other relevant s takeholders , which should be publicly available. The policy is applicable within the boundaries of the plantation/mi l l s or whi le on duty outs ide the premises. Progress in implementing the policy should be regularly monitored and the results of monitoring

activi ties should be recorded. A committee specifically to address concerns of women may be required to comply with the cri terion. This committee wi l l

cons ider matters such as; training on women’s rights, counseling for women affected by violence and child care facili ties to be provided by the growers and mi l lers . The activi ties of the committee should be documented.

Audit findings

Sime Darby Plantation has explicit policy statements on sexual harassment which guide the activities carried out in the estates. In addition, a Manual on the Implementation of Gender Policy has also been documented which incorporates, among others, the grievance procedures. Giram estate and Giram mill have established Gender Committees which organise programs and activities for their members. Examples of activities carried out by the committee at Giram estate are breast feeding campaigns, briefings on ovary cancer and sexual harassment. The grievance procedure is incorporated in the Manual on sexual harassment.

Criterion 6.10

Growers and mi l l s deal fa i rly and transparently with smal lholders and other loca l bus inesses .

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Indicator 6.10.1 Pricing mechanisms for FFB and i nputs/services shal l be documented. Major compl iance Indicator 6.10.2 Current and past prices pa id for FFB shal l be publ icly ava i lable. Minor compl iance

Indicator 6.10.3 Evidence shall be available that a ll parties understand the contractual agreements th ey enter into, and that contracts are

fa i r, lega l and transparent. Minor compliance

Indicator 6.10.4 Agreed payments shal l be made in a timely manner. Minor compl iance Guidance :

Transactions with smallholders should consider issues such as the role of middlemen, transport and s torage of FFB, qual i ty and grading. The need to recycle the nutrients in FFB (under 4.2) should also be considered; where i t i s not practicable to recycle wastes to smallholders, compensation for the va lue of the nutrients exported might be made via the FFB price. Smallholders must have access to the grievance procedure under cri terion 6.3, i f they consider that they are not receiving a

fa i r price for FFB, whether or not middlemen are involved.

The need for a fair and transparent pricing mechanism is particularly important for out growers , who are contractual ly obl iged to sel l a l l FFB to a particular mi l l .

If mi lls require smallholders to change practices to meet the RSPO cri teria, consideration must be given to the costs of such changes , and the poss ibi l i ty of advance payments for FFB could be cons idered.

Audit findings A brief Interview was made with one contractor at Giram estate to understand the business relationships between them and the estate/mill (Figure 19). The contractor has been serving the estate transporting FFB and gravel for more than 30 years and his work is bound by a long term agreement. The contract specifies the terms of the services, like job specifications, pricing and payment systems. The contract is written in the English language. He is paid RM8/ton for transporting FFB and RM11/ton for transporting gravel. The rates of payment are decided by the Sime Darby’s Headquarters are clearly shown in the agreement. The current and past prices paid for FFB was not publicly available due this criterion does not apply to the Giram mill as it does not buy outside crops. The FFB and gravel contractor interviewed mentioned that he understand the contract because he has been servicing the estate and mill for quite a long time (about 30 years). The contractor mentioned that he usually received his payments in the form of cheques the following month after the job was done. He has no complaint on the timeliness of the payment.

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Figure 19: Interviewing contractor (left) and union leader at Giram estate

Criterion 6.11

Growers and mi l lers contribute to loca l susta inable development wherever appropriate.

Indicator 6.11.1

Demonstrable contributions to local development that are based on the results of consultation with loca l communities . Minor compl iance

Guidance: Contributions to local development should be based on the results of consultation with local communities. See also Criterion

6.2. Such consultation should be based on the principles of transparency, openness and participation and should encourage communities to identi fy their own priori ties and needs , including the di fferent needs of men and women. Where candidates for employment are of equal meri t, preference should a lways be given to members of loca l communities in accordance to national policy. Pos i tive discrimination should not be recognized as confl icting with Cri terion 6.8.

Audit Findings Two important contributions of the estate and mill are employment opportunities and use of roads to the local communities. The estate and mill are not empowered to contribute financial support because it is against the policy of Sime Darby. PRINCIPLE 7: RESPONSIBLE DEVELOPMENT OF NEW PLANTINGS

Cri terion 7.1 A comprehensive and participatory independent social and environmental impact assessment i s undertaken prior to establishing new plantings or operations, or expanding existing ones, and the results incorporated into planning, management and operations. Indicators:

7.1.1 An independent and participatory social and environmental impact assessment (SEIA) to be conducted and documented (Cross ref. to C 7.2, 7.3, 7.4, 7.5, 7.6). Major compliance

Speci fic Guidance:

SEIAs to include previous land use / history and involve independent consultation as per national and state regulations, via participatory methodology which includes external s takeholders. For Sabah, slopes 25 degrees and above are considered high risk erosion areas and cannot undergo replanting unless specified in the EIA report [Environment Impact Assessment

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(Order 2005)] and approved by the Environmental Protection Department (EPD). For Sarawak, steep slopes are considered

high risk erosion areas and cannot undergo replanting unless specified in the EIA report [Natural Resources and Environment (Prescribed Activities) Order 1994] and approved by the Natural Resources and Environment Board (NREB). 7.1.2 The results of the SEIA to be incorporated into an appropriate management plan and operational procedures developed, implemented, monitored and reviewed. Minor compliance

7.1.3 Where the development includes smallholder schemes of above 500ha in total, the impacts and implications of how it i s managed should be documented and a plan to manage the impacts produced.

Minor compliance Guidance:

The terms of reference should be defined and impact assessment should be carried out by accredited independent experts, in order to ensure an objective process. Both should not be done by the same body. See also C 5.1 and C 6.1. This indicator i s not applicable to development of smallholder schemes below 500ha. For Sabah, new planting or replanting of area 500ha or more requires EIA. For areas below 500ha but above 100ha, proposal for mitigation measures ( PMM) is required. For Sarawak, only new planting of area 500ha and above requires EIA. Onus is on the company to report back to the DOE on the

mitigation efforts being put in place arising out of the EIA. Assessment of above and below ground carbon storage is important but beyond the scope of an EIA. Note: This aspect will be considered by an RSPO Greenhouse Gas Working Group.

Audit findings

SDPSB has no plan for new planting. The assessors verified that they could not see any new land being opened up for new planting. Thus Principle 7 is not applicable. 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 a l low demonstrable continuous improvement in key operations . MY NIWG commits to demonstrate progress ive improvement to the fol lowing but not l imited to:

Indicator 8.1.1 Minimize use of certa in pesticides (C4.6)

Major compl iance Indicator 8.1.2

Environmental impacts (C5.1) Major compl iance

Indicator 8.1.3 Maximizing recycl ing and minimizing waste or by-products generation.

Major compl iance Speci fic Guidance To work towards zero-waste (C5.3) Indicator 8.1.4

Pol lution prevention plans (5.6)

Major compl iance

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Indicator 8.1.5

Socia l impacts (C6.1) Major compl iance Indicator 8.1.6 A mechanism to capture the performance and expenditure in socia l and environmental aspects . Minor compl iance

Guidance Speci fic minimum performance thresholds for key i ndicators should be established. (See also Cri terion 4.2, 4.3, 4.4, and 4.5).

Growers should have a system to improve practices in l ine with new information and techniques and a mechanism for disseminating this information and throughout the workforce.

Audit findings Generally, SOU 29 has established continuous improvement plans for all the indicators. Most of the plans had been implemented through the requirement of their internal integrated management system. Among the improvement plans are practices to minimize chemical usage by substituting through the planting of cover crops in the immature fields rather than using herbicides for field upkeep; on the welfare of workers front, new housing and facilities are being constructed in phases as part of t he company’s commitment to provide better living conditions. As towards zero-waste, Giram Oil Mill has built and operate a composting plant next to the mill. The compost product are used as fertilizer in the estates.

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3.2 Identified Non-conformities Details of the non-conformities, corrective actions taken by all assessed SOUs, and assessors’ verification of the corrective actions taken are in Attachment 3. All nonconformities have been closed out. 3.3 Status of Non-conformities Previously Identified All previous nonconformities were verified for the corrective actions effectiveness. Corrective action has been taken and verified by the assessor. Details of the verified nonconformities are in Attachment 4. 3.4. Noteworthy Positive Observations SOU 29 had improvement made to their RSPO implementation. This can be seen from physical improvement of housing and related amenities condition, use of cover crops instead of herbicides, as well as chemical and wastes storage area including the changing room for the sprayers. The level of awareness among the workers on the RSPO implementation has also improved. They are able to explain not only the operating procedure related to their work but also the impact of its deviation, the consequence for not following them and the importance in achieving conformity to the RSPO requirements. Commitment from top management on the RSPO implementation is also evident during the assessment. This also includes subsidizing the migrant worker’s children education at the HUMANA school at the SOUs. 3.5 Issues Raised by Stakeholders and Findings with Respect to the Issues Among the stakeholder consulted during the surveillance assessment were:

Workers from different group of tasks Management staff

Union representative

FFB supplier Local community

Female worker representative

Civil work contractor

Generally all stakeholder consulted give positive remarks that they have no issue on dealing/working with all the three SOUs assessed. They have seen some improvements on since the implementation of the RSPO Certification Scheme.

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3.6 Supply Chain RSPO Member Number : 1-0008-04-000-00 (Sime Darby Plantation Sdn Bhd) Address:91207 Kunak SABAH Assessment Date : 6 February 2013 Standard:RSPO Supply Chain Certification Systems, November 2011 Scope of Assessment (specify supply chain model(s) used): Processing of RSPO certified sustainable oil palm fresh fruit bunches (FFBs) to RSPO certified

sustainable crude palm oil and palm kernel using the Segregation (SG) model .

3.6.1 Description of the organization 3.6.1.1 Description of the organization’s activity Giram Palm Oil Mill (GPOM) is one of the subsidiary companies of Sime Darby Plantation (Sabah) Sdn Bhd. The mill is located in Kunak, Sabah. GPOM was commissioned in December 1999 to process oil palm fresh fruit bunches (FFBs) to produce crude palm oil (CPO) and palm kernel (PK). GPOM has 117 workers of which six (6) are executives. The processing of the FFBs to extract the oil was still being done using the conventional method which involved the processes of sterilization, threshing and pressing. GPOM’s main sources of RSPO certified FFBs are the company’s own supply base; the Giram and Mostyn Estates which had been certified against the MY-NI: 2008 of the RSPO Principles and Criteria for Sustainable Palm Oil Production by SIRIM QAS International Sdn Bhd in January 2009. GPOM does not buy and process FFBs from outside suppliers. GPOM has a processing capacity of 40 metric tonnes (MT) of FFBs per hour. It processes about 180,000 MT of FFBs annually to produce 41,400 MT and 9,000 MT of CPO and PK respectively. In 2012, GPOM has received a total of 176,552 MT of RSPO certified FFBs to produce about 40,108 MT and 8,311 MT of certified CPO and PK respectively. Currently, all of the mill’s production of CPO is delivered to the Kunak Bulking Installation (KBI), a subsidiary of Sime Darby Holding Berhad (SDHB). The CPO is later sold locally or exported via ocean vessels by SDHB. GPOM has also been directed by SDHB to supervise the operations of the KBI. KBI is located in Jalan Kastam, Kunak. It provides storing facility for the CPO produced and dispatched by POMs, which are subsidiaries of Sime Darby Plantation (Sabah) Sdn Bhd prior to shipment by ocean vessels. KBI is capable of storing about 15,000 MT of CPO. It has 2 underground pits; one is used for storing certified CPO while the other one for uncertified CPO. The certified CPO in the pit is pumped into a designated tank prior to being emptied into the vessel. KBI also provides its services for storing CPO prior to shipment from other POMs in the eastern part of Sabah. GPOM had been implementing the Segregation (SG) model for its supply chain system beginning in January 2009 after obtaining the RSPO Certificate for Sustainable Palm Oil Production. The CPO

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produced by GPOM had been traded by its parent company, SDHB as GreenPalm. SDHB has also obtained the approval of the RSPO Secretariat to trade the CPO as certified under the RSPO e -trace. However, the company’s registration with the RSPO e-trace would be expiring soon on 14 April 2013. There was no sale contract being issued by the two estates supplying certified FFBs to GPOM. The payment of the in-coming RSPO certified sustainable FFBs to GPOM were being handled at the corporate level. GPOM has not and would not be directly involved in the selling or exporting of the RSPO certified sustainable CPO. All sales and marketing activities were done by the Global Trade and Marketing (GTM) Department of Sime Darby Plantation Sdn Bhd, at the Head Office in Kuala Lumpur.

3.6.1.2 Description of the scope of the certification and specify supply chain model(s) used The scope of the certification of the supply chain system covers from the receiving and processing of the incoming RSPO certified sustainable oil palm FFBs to produce RSPO certified sustainable CPO and palm kernel and the dispatch of these same products to the KBI using the SG model. 3.6.1.3 Annual certified volume of RSPO certified palm oil over a specified period In 2012, GPOM has processed a total of 176,552 MT of RSPO certified FFBs to produce about 40,108 MT and 8,311 MT of RSPO certified CPO and certified PK respectively. 3.6.2 Summary of Audit Findings

i) Documented procedures

GPOM has used the same document entitled ‘Standard Operating Procedure (SOP) for RSPO Supply Chain Certification System and Traceability’ (SOP) dated 1 August 2012 for its supply chain system. This SOP was prepared by the RSPO and Certification Unit of Sime Darby Plantation Sdn Bhd at the Head Office in Kuala Lumpur. This SOP has also been used by the Binuang POM as well as for other POMs under the Sime Darby Group of companies. As mentioned in the RSPO Supply Chain Main Audit Report on Binuang POM, this SOP has not adequately described the procedures and work instructions to address the specific requirements for the SG model of the RSPO Supply Chain Certification Standard, November 2011 (RSPO Supply Chain Standard). The SOP has not described the procedures and work instructions to ensure the implementation of all the elements of the RSPO Supply Chain Standard namely on (1) receiving and goods in for certified FFBs (2) processing (including segregation of certified CPO and measure to avoid contamination (3) sales and good out (dispatch) of the certified CPO products (4) record and maintenance of data on the in-coming RSPO and non-RSPO certified FFBs and (5) claims on the use of the RSPO trademark. The same NCR II 1/2013 which has been raised on the Binuang POM was therefore raised on GPOM. GPOM has appointed Mr. Azlan Abdul as the person responsible for overseeing the implementation and maintenance of the RSPO supply chain system and ensuring it complies will all requirements of the SG model of the RSPO Supply Chain Standard. It was observed that Mr. Azlan has demonstrated a good knowledge and understanding on the requirements of the RSPO Supply Chain Standard and

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on the related procedures which the GPOM has been implementing although they have not been properly documented in the SOP. The RSPO and Certification Unit of Sime Darby Plantation Sdn Bhd at the Head Office in Kuala Lumpur has amended and submitted a revised SOP dated March 2013 which has described the procedures and work instructions on the specific elements for the SG model of the RSPO Suppl y Chain Standard. The auditor has reviewed the revised SOP and was satisfied that it has included the required procedures related to implementation of the elements for the SG model as specified in the RSPO Supply Chain Standard. The corrective action taken has been adequate and therefore NCR II 1/2013 is now being closed out. ii) Purchasing and Goods in The RSPO certified sustainable FFBs were supplied only by BPOM’s own supply bases, the Giram and Mostyn Estates, which had been certified against the MY-NI: 2008 of the RSPO Principles and Criteria for sustainable palm oil production. There was no issuance of a purchase order. A ‘FFB consignment note’, issued by the certified estates, accompanied every lorry load of certified FFBs for delivery to BPOM. The FFB consignment note has indicated clearly the name of the supplying estate. Only FFBs supplied by the mill’s two supply bases were processed as RSPO certified sustainable FFBs. An ‘FFB Receive’ was issued after the lorry load of FFBs has been weighed at the mill’s gate by the Weighbridge Clerk. Similarly the FFB Receive has also clearly indicated the name of the supplying estate. The FFB consignment note issued by the supplying estate and the FFB Receive, were the two most important documents used in tracing the origins of the FFBs. The procedure on purchasing (receiving) and goods in has now been documented in the revised SOP (see NCR II 1/2013) iii) Sales and goods Out (Dispatch) GPOM has not and would not be directly involved in the sale of the RSPO ce rtified sustainable CPO. BPOM would only deliver the certified sustainable CPO to the KBI for storage prior to exporting by ocean vessels. Upon arrival at KBI, the RSPO certified CPO from a tanker is emptied into a separate pit. The oil is then pumped into a tank,which has been assigned for storing RSPO certified CPO. In terms of documentation, it was observed during the visit to the BKI that although the name of the supplying estate was mentioned in all the relevant delivery-related documents such as the dispatch ticket and dispatch note issued by GPOM and the weighbridge ticket and Authorization for CPO On loading issued by BKI, it was difficult to determine the status and the supply chain model of the CPO from these documents as it was not indicated on them. The procedure on the issuance of the delivery-related documents has not been described in the earlier SOP. The revised SOP has now clearly outlined the procedures on the dispatching of certified CPO and the specific information which must be indicated in all the relevant delivery-related documents including a description of the product and the supply chain model (see NCR II 1/2013). iv) Processing GPOM has been processing only its own certified FFBs from the two supplying estates. Therefore,

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the risk of mixing of RSPO and non-RSPO certified FFBs is almost non-existence. The processing of FFBs was still being done using the conventional method involving sterilization, threshing and pressing of the FFBs to extract the oil. The revised SOP has prescribed the measures to be taken to avoid contamination of the certified CPO during dispatching at the mill, storage at BKI and transfer into the vessel. The procedures require flushing, cleaning and sweeping of processing tanks and pipelines to eliminate traces of non-certified RSPO oil. The traceability of a production batch of RSPO certified CPO was made possible by referring to the relevant documents on the in-coming FFBs and delivery of the CPO. v) Record keeping The revised SOP now requires record relating to the RSPO supply chain system to be maintained for a minimum of 5 years. The types of records to be kept include the weighbridge ticket, FFB consignment note, FFB receive note, CPO/PK dispatch note, CPO/PK authorization and other relevant documents related to the supply chain system. It was also observed that GPOM has been using the System Application Productivity (SAP) a computer software for recording the receiving of FFBs at the weighbridge and the Daily CPO Production Record has enabled the company to accurately capture the quantity of FFBs being processed and production of CPO daily as well as compute and monitor the monthly and annual RSPO certified sustainable CPO stock levels. vi) Training The available record on training has indicated that only two of the company’s staff; Mr. Azlan Abdul (Quality Assurance Supervisor) and as the person appointed in charge of the RSPO Supply Chain Certification System and Ms. Hasnita Alimuddin (Assistant Administration Officer) have attended a training on the Supply Chain Certification System. This was the same training held on 11 December 2012 at the Merotai Plam Oil Mill. It was facilitated by Ms. Nurulashida Mohd Saad and Ms. Sheun Su Sin of the RSPO and Certification Unit, Plantation Sustainability and Qual ity Management, Sime Darby Plantation Sdn Bhd Head Office in Kuala Lumpur. GPOM needs to organize a training for the other key personnel whose work is related to the implementation of the specific elements for the SG model of the RSPO Supply Chain Certifi cation Standard. This was therefore raised as NCR II 2/2013. The company has planned to organize a training in March 2013 as corrective action to address this NCR. However, this has yet to be done and as such this NCR has therefore remained outstanding. vii) Claims GPOM has not and will not be directly involved in sale of the RSPO certified sustainable CPO/PK. It will only deliver the certified sustainable CPO/PK to BKI. The company will not be making on -product claims on the RSPO certified sustainable CPO it delivers to the BKI. The activities on the marketing and sale of the RSPO certified sustainable CPO, are currently being done by the Global Trade and Marketing Department at the Head Offices in Kuala Lumpur. However, the SOP has prescribed that the rules of making claims on RSPO certified sustainable CPO must comply with the document ‘RSPO Guidelines on Communications and Claims’.

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3.6.3 Audit Conclusion Based on the findings of the audit, the auditor was of the view that the Giram Palm Oil Mill has not fulfilled all of the requirements for the SG model of the RSPO Supply Chain Certification System, November 2011. GPOM has to take appropriate corrective action to address NCR II 2/2013. The corrective action taken has to be verified by an auditor from SIRIM QAS International Sdn Bhd before a recommendation is made to award GPOM with the RSPO Supply Chain Certificate.

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4.0 Recommendation Based on the evidence gathered it can be concluded that Sime Darby Plantation Sdn. Bhd. Giram-SOU 29 continue to conform to the requirements of the RSPO MY-NI: 2008. All nonconformities including major nonconformities have been closed out through verification of corrective action records. Therefore, the assessment team recommends Sime Darby Plantation Sdn. Bhd. Giram-SOU 29 to continue to be certified against RSPO MY-NI: 2008. 5.0 Certified organization’s Acknowledgement of Internal Responsibility and Formal sign-off

of assessment findings

I, the undersigned, representing SOU 29 acknowledge and confirm the contents of the assessment report and findings of the assessment.

I, the undersigned on behalf of SIRIM QAS International Sdn. Bhd. confirm the contents of the assessment report and findings of the assessment.

Khairul Najwan __________________________ Date : 29 January 2013 Name : KHAIRUL NAJWAN AHMAD JAHARI

(Lead Assessor)

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Attachment 1 LOCATION MAP KUNAK/TAWAU SABAH, MALAYSIA

LOCATION OF SOUs BINUANG, GIRAM AND MEROTAI

Note: Not to scale

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Attachment 2

ASSESSMENT PROGRAMME

SIRIM QAS INTERNATIONAL SDN. BHD. Food, Agriculture and Forestry Section

RSPO Surveillance Audit Plan

1. Objectives The objectives of the assessment are as follows:

(i) To determine Sime Darby Plantation Sdn. Bhd. SOU 28, SOU 29, SOU 30 conformance against the RSPO Principles & Criteria Malaysian National Interpretation (MY-NI).

(ii) To verify the effective implementation of corrective actions arising from the findings of last assessment. (iii) To make appropriate recommendations based on the assessment findings.

2. Date of assessment : 14th – 17th January 2013

3. Site of assessment : Sime Darby Plantation Sdn. Bhd.

SOU 28 Binuang, 91207 Kunak, Sabah

SOU 29 Giram, 91207 Kunak, Sabah SOU 30 Merotai, 91007 Tawau, Sabah

4. Reference Standard a. RSPO P&C MY-NI 2007 and MY-NI Indicators and Guidance 2008 b. Company’s audit criteria including Company’s Manual/Procedures

5. Assessment Team a. Lead Assessor : Khairul Najwan Ahmad Jahari

b. Assessor : Mahzan Munap Dr. Rusli Muhd Selvasingam T Kandiah

If there is any objection to the proposed audit team, the organization is required to inform the Lead Auditor/RSPO Section Manager.

7. Audit Witness: None 8. Audit Method

Site audits including observation of practices, interviews with interested parties (employees, nearby population, etc.), documentation evaluation and evaluation of records.

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9. Confidentiality Requirements SIRIM QAS International shall not disclose any information concerning the c ompany regarding all matters arising or

coming to its attention with the conduct of the programme, which is of confidential in nature other than information,

which is in the public domain. In the event that there be any legal requirements for disclosing any information concerning the organization, SIRIM

QAS International shall inform the organization of the information to be disclosed.

10. Working Language : English and Bahasa Malaysia

11. Reporting a) Language : English

b) Format : Verbal and written c) Expected date of issue : Sixty days after the date of assessment d) Distribution list : Client fi le

12. Facilities Required

a. Room for discussion

b. Relevant document and record c. Personnel protective equipment if required d. Photocopy and printing facility e. A guide for each group

13. Assessment Programme Details : As follows

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Travelling Day: 13 January 2013 (Sunday) Activi ties /areas to be vis ited

Mahzan

Dr. Rus l i

Najwan

Selva

Auditee

Morning Travel ling from KL to Tawau / Flight MH 2664 / ETD 1140 Hrs / ETA 1430 Hrs

Travel ling from Tawau Airport to Kunak

Day one: 14th January 2013 (Monday)

Activi ties /areas to

be vis ited

Mahzan

Dr. Rus l i

Najwan

Selva

Auditee

0800-

0830

Opening Meeting, audit team introduction and briefing on audit objectives, scope, methodology, cri teria and programmes by audit team leader Top mgmt &

Committee Member

0830-0900

Briefing on the organization implementation of RSPO (including action taken to address main assessment findings) Management Representative

0900-

1630

Si te visit and assessment at

Jelata Bumi Estate

Veri fy previous audit findings

Assessment on P1, P2 (2.1-

2.1.1), P4(4.7), P6 ( 6.6, 6.7. 6.8, 6.9, 6.10, 6.11), P8

Workshop

Witness activi ties at site i .e. spraying / weeding harvesting, etc

Chemical stores

Si te visit and assessment at

Binuang Oil Mill

Veri fy previous audit findings

Assessment on P1, P2 (2.1,2.1.1),

P6 (6.1, 6.2, 6.3, 6.4, 6.5) P8

Local communities and s takeholders

Interview with Union representative

Workers Issues

Line site

Continuous improvement

Si te vis i t and assessment at Binuang

Estate

Veri fy previous audit findings Assessment on P1, P2 (2.1, 2.2), P3, P4 (4.4.7), P5 (5.1, 5.2), P8

Conservation area management

Riparian Zone Boundary

Water catchment area Safety & Health practice – witness

activi ties at site

Workshop Witness activi ties at site i.e.

spraying / weeding harvesting, etc

Chemical stores

Continuous improvement

Si te visit and assessment at Sunggang

Estate

Veri fy previous audit findings

Assessment on P1, P2, P3, P4 (4.1, 4.2, 4.3, 4.4, 4.5, 4.6), P5(5.3, 5.5), P8

Commitment to transparency

Laws and regulation Good Agricultural Practice

Chemical store / fertilizer s tore Nursery

EFB mulching

Waste management

Safety & Health practice – witness activi ties at s ite

Continuous improvement

Guide/PIC

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1200-1300

Break

1300-1630

Si te visit and assessment at Binuang Oil Mill

Veri fy previous audit findings Assessment on P1, P2 (2.1), P4(4.7), P6(6.5, 6.6, 6.7. 6.8, 6.9, 6.10, 6.11),

P8

View documentation and records relating to OSH Management

System

Commitments to transparency

Laws & regulations

Commitment to long term economic and financial viability

Safety & Health practice – witness activi ties at s ite

Chemical management Interview workers, safety

committee and contractors

Continuous improvement

Si te vis i t and assessment at

Jelata Bumi Estate.

Veri fy previous audit findings

Assessment on P1, P2

(2.1,2.1.1), P6 (6.1, 6.2, 6.3, 6.4, 6.5) P8

Local communities and s takeholders

Interview with

Union representative

Workers Issues Line site

Continuous improvement

Continue assessment at Binuang Estate Continue assessment at Sunggang Estate

Guide/PIC

1730-

2000

Break

2000-2200

Audit team discuss ion and veri fication on any outstanding i ssues

Note: Assessor to inform a uditee on the required document/records

Relevant PIC

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Day two: 15th January 2013 (Tuesday)

Activi ties

/areas to

be vis ited

Mahzan

Dr. Rus l i

Najwan

Selva

Auditee

0800-1200

Si te visit and assessment at Giram Oil Mill

Veri fy previous audit findings

Assessment on P1, P2 (2.1), P4(4.7), P6(6.5, 6.6, 6.7. 6.8, 6.9, 6.10, 6.11),

P8

View documentation and records

relating to OSH Management System

Commitments to transparency Laws & regulations

Commitment to long term

economic and financial viability Safety & Health practice –

witness activi ties at s ite Chemical management

Interview workers, safety committee and contractors

Continuous improvement

Si te visit and assessment at Giram Estate

Veri fy previous audit findings

Assessment on P2 (2.1,2.1.1), P6, Local communities and

s takeholders

Interview with Union representative

Workers Issues

Line site

Continuous improvement

Si te visit and assessment at Giram Estate

Veri fy previous audit findings

Assessment on P1, P2 (2.1, 2.2), P5 (5.1-5.6), P8

Conservation area management Riparian Zone

Boundary

Water catchment area

Conservation area management

Riparian Zone Boundary

Water catchment area Safety & Health practice –

witness activi ties at s ite

Workshop

Witness activi ties at site i.e. spraying / weeding harvesting, etc

Chemical stores

Si te visit and assessment at Mostyn Estate

Veri fy previous audit findings

Assessment on P1, P2, P3,

P4 (4.1, 4.2, 4.3, 4.4, 4.5,

4.6), P5(5.3, 5.5), P8

Commitment to transparency

Laws and regulation Good Agricultural

Practice

Chemical store / ferti lizer store

Nursery EFB mulching

Waste management

Safety & Health practice – witness

activi ties at site Continuous

improvement

Guide/PIC

1200-1300

Break

1300-1630

Continue assessment at Giram Oil Mill Si te visit and assessment at Giram Oil Mill

Veri fy previous audit findings

Assessment on P1, P2 (2.1,2.1.1),

P6 (6.1, 6.2, 6.3, 6.4, 6.5) P8

Continue a ssessment at Giram Estate Continue assessment at Mostyn Estate

Guide/PIC

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Local communities and s takeholders

Interview with Union representative

Workers Issues

Line site

Continuous improvement

1630-

2000

Travel l ing to Tawau

2000-2200

Audit team discuss ion and veri fication on any outstanding i ssues

Note: Assessor to inform auditee on the required document/records

Relevant PIC

Day three: 16th January 2013 (Wednesday)

Activi ties

/areas to be vis ited

Mahzan

Dr. Rus l i

Najwan

Selva

Auditee

0800-1630

Si te visit and assessment at Merotai Oil Mill

Veri fy previous audit findings

Assessment on P1, P2 (2.1-2.1.1),

P4 (4.1, 4.7), P6 (6.5, 6.6, 6.7. 6.8, 6.9, 6.10, 6.11), P8

View documentation and records relating to OSH Management System

Commitments to transparency

Laws & regulations

Commitment to long term

economic and financial viability

Si te visit and assessment at Tiger Estate.

Veri fy previous audit findings

Assessment on P1, P2 (2.1,2.1.1), P6 (6.1, 6.2, 6.3, 6.4, 6.5) P8

Local communities and s takeholders

Faci lities

Interview with Union representative

Si te visit and assessment at Imam Estate

Veri fy previous audit findings Assessment on P1, P2 (2.1, 2.2), P3,

P4 (4.4.7), P5 (5.1, 5.2), P8

Conservation area management Riparian Zone

Water catchment area

Workshop Chemical stores

Continuous improvement

Si te visit and assessment at Table Estate

Veri fy previous audit findings Assessment on P1, P2, P3, P4 (4.1,

4.2, 4.3, 4.4, 4.5, 4.6), P5(5.3, 5.5), P8

Commitment to transparency

Laws and regulation

Good Agricultural Practice Continuous improvement

Guide/PIC

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Safety & Health practice – witness activi ties at s ite

Chemical management

Interview workers, safety committee and contractors

Continuous improvement

1200-1300

Break

1300-1630

Continue assessment at Merotai Oi l Mi ll

Si te visit and assessment at Merotai Oil Mill

Veri fy previous audit findings

Assessment on P1, P2 (2.1,2.1.1), P6 (6.1, 6.2, 6.3, 6.4, 6.5) P8

Local communities and s takeholders

Faci lities

Interview with Union representative

Continue assessment at Imam Estate Continue assessment at Table Estate

2000-2200

Audit team discuss ion and veri fication on any outstanding i ssues

Note: Assessor to inform auditee on the required document/records

Relevant PIC

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Day four: 17th January 2013 (Thursday) Activi ties /areas to be vis ited

Mahzan

Dr. Rus l i

Najwan

Selva

Auditee

0800-1100

Audit team discussion and verification on any outstanding issues

Guide/PIC

1100-1400

Discussion and preparation on audit findings

1400-1600

Clos ing Meeting

Management and representative

Travelling Day: 18th January 2013

Activi ties /areas to

be vis ited

Mahzan

Dr. Rus l i

Najwan

Selva

Auditee

Travel ling from Tawau to KL / Fl ight MH 2665 / ETD 1520 Hrs / ETA 1800 Hrs

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Attachment 3

4th SURVEILLANCE ASSESSMENT 2013 DETAIL OF NON-CONFORMITY AND CORRECTIVE ACTIONS TAKEN

P & C Indicator

Specification Major/Minor/

OFI

Detail Non-conformances Corrective Action Taken Verification by Assessor

Indicator 2.1.1

NCR #: MM4

Major

Area/Location

: Giram Oil

Mill

(1) The Steam Engineer Grade 1

was not ass is ted by a fi rs t or second grade engineer and

during each shift by such first and second grade drivers as per the Person In-Charge Regulations

1970 of the Factories and Machinery Act 1967.

No fi rs t or second grade engineer exis ted to assist the Mi ll Manager (Steam Engineer Grade 1). Also, the existing Engine Drivers are of Grade 2 only when a Grade 1 Engine Driver i s a lso required.

(2) The Electrica l Chargeman does not possess a va l id Certi ficate of Competency appropriate to the required. category of work as required in

Regulations 23(1) of Electrica l Supply Act 1990 due to a high voltage supply aerial l ine (step-up

from 415v at mi l l to 11kv and then s tep down to 415 at the line s i te) exis ted in the SOU.

The exis ting electrica l Chargeman, En. Andi Muhamad

Nirwan B Andi Todong possess an AO Certi ficate of Competeancy when the Act requires a B4

Chargeman Certi ficate holder, 3) The Giram Oil Mi ll has no va lid BOMBA Fire Certificate. The Fi re Certi ficate expired on 16 June 2009.

(1) and (2). To advertise

hi ring (a) Mi l l Steam Engineer Grade 1 or

Grade 2 (b) Engine Driver Grade 1 and (c) Electrical Chargeman B4 on

JobStreet.com and in the loca l Borneo newspapers . Expected

date to be published 27th Sept on JobStreet and on the weekend (28th -29th Sept) in the print media .**

(2) Giram Oi l Mi l l to carry

out Fi re Certi ficate inspection. Renewal of Certi ficate is in progress . Inspection by BOMBA was conducted on 22nd

November 2012 and awaiting results of inspection.

**Earl ier corrective action submitted (dated 21st February

2013, 2nd Apri l 2013 and 24th June 2013) was not acceptable.

Final corrective action submitted on 23rd September with supporting documents

were found acceptable

Supporting

document showing

advertisement for Mi l l Engineer Grade 1 / 2,

Engine Driver Grade 1 and Electrica l

Chargeman B4 were found acceptable. Veri fication on JobStreet websi te showed i t had been uploaded,

thus OK. Status of NCR is Closed.

Corrective Action taken is

acceptable. However, wi l l

veri fy ava ilabi l i ty of Fi re Certi ficate i ssued by BOMBA

during the next assessment. NCR is cons idered Closed.

Indicator 6.6.1

NCR #: RM1

Major

Area/Location: Giram Estate and Giram Oil

Mill

No documented minutes of meeting between the Giram estate and mill management

and trade unions or workers representatives are available. Union representatives are

present in the mill. However, they have not had any formal meetings with the mill

management neither have they been appointed as members of permanent

An appointment letter for union representative in Giram Estate OSH

Committee was issued on 21 January 2013

A letter of appointment to Mr. Mustari

Amir and Mardiana Sudin was sighted.

Status: accepted

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committees in the mill. Therefore, there is no formal regular channel of communication between the

union and mill.

Indicator 6.1.3

NCR #: RM2

Minor

Area/Location:

Giram Estate

and Giram Oil Mill

The company’s “Tatacara Perundingan Menangani Masalah Sosial” requires the

estate and mill to conduct stakeholders’ consultation once in six months.

Giram estate did regularly update its Social Impacts Assessment Action Plan but Giram mill did not.

On the other hand, both the estate and mill did not any conduct stakeholders’

consultation twice yearly as required by the procedure. Only one updated SIA action

plan was seen at Giram mill. In addition, no minutes of the half yearly stakeholders

meetings was available at both the estate and mill.

Giram Oil Mill will conduct the stakeholders meeting with the contractors,

suppliers and local communities by April 2013

Status: accepted

Indicator 4.1.1

NCR #: SEL1

Major

Area/Locatio: Mostyn Estate

Fronds were not stacked as required.

Pruning- Pruned fronds were not stacked as required especially in the terraced

areas in the tall palm fields. There were fronds in paths and in drains.

Training on Pruning and Frond Stacking was

conducted on 1 February 2013. To apply “U” shape on frond stacking

Records of training

including training material, attendance list

and picture was sighted Status: accepted

Indicator 4.7.1

NCR #: SEL2

Major

Area/Location:

Mostyn Estate

PPE were not supplied to Workers applying fertil izer.

Workers who were loading Rock Phosphate fertil iser into a Fertil iser Spreader were not wearing:

i) Goggles ii) Proper Respirator

Masks iii) Gloves

iv) Apron

The appropriate PPE was issued to the workers whose handle the fertil izer

with spreader and training for PPE usage was given to workers on 30 January 2013

Records of training including

training material, attendance list, PPE Checklist

and picture was sighted. Status: accepted

Indicator 5.2.1

OFI

Identification and assessment of HCV habitats and protected

areas within landholding; and

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Area/Location:

Giram Estate

attempt assessment of HCV habitats and protected areas surrounding landholdings

The Biodiversity Assessment report has been conducted for SOU 29. The Sree

Muniswarar Alayam Temple was identified as HCV6. During the audit it was noted the temple caretaker was

requesting to demolish the temple (shift the temple statue to Melaka). However it

was not updated in the assessment report and action plan.

The Ulu Balong Division management has been changed to Giram Estate. However the Biodiversity

report was stil l under the Jeleta Bumi Estate management.

The HCV map (including the Sipit Division) in the report need to improve by indicating

the significant HCVs area. Generally Biodiversity

Assessment report for SOU29 needs to be improved.

Indicator 2.2.1

OFI

Area/Location:

Giram Estate

Evidence of legal ownership of the land including history

of land tenure. During audit at Giram Estate it was found the country lease #

105369560 were permitted for cocoa cultivation, owned by Harrison Malaysian Plantation and country lease

# 17904 were owned by Sabah Plantation Limited. However the correspondence

between Land Management Department of Sime Darby and Giram Estate on the Memorandum of Surrender

(MOS) only stated changes of name from Golden Hope Plantation to Sime Darby

Plantation (Sabah) only.

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Indicator 2.1.1

OFI

Area/Location

: Giram Oil Mill

Evidence on compliance with legal requirements Sabah Labour Ordinance

requires that the employment of workers and staffs in the estates and mills be covered

by written contracts of service. It was found that the contracts of service for several workers and staffs in

Binuang mill and Giram mill were not updated and properly maintained. The

personal fi les of the workers and staffs concerned either do not have the valid contracts of service or do not

have them at all. In the interest of estate/mill and the employee as well as

for the purpose of complying with the law,it is strongly urged that the responsible

parties take the necessary measures to ensure that the contracts of service be updated and properly

maintained.

Indicator 6.1.3

OFI

Area/Location:

Estate and Oil Mill

A timetable with responsibilities for mitigation and monitoring is reviewed

and as necessary The stakeholders’

consultation exercises conducted by the estate/mill managed to identify issues which affect the stakeholders.

However, the estate/mill has not drawn up the necessary action plans to address these issues.

In the interest of the stakeholders and the

estate/mill, it is strongly recommended that action plans be formulated to address the issues raised

during the stakeholders’ consultations and incorporate

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them into the existing SIA action plans.

Indicator 6.2.3

OFI

Area/Location:

Giram Estate

Maintenance of a l ist of stakeholders, records of communication and record of

actions taken in response to input of stakeholders

Giram and Tiger estates do maintain the list of stakeholders comprising vendors, suppliers,

government agencies, non-governmental organizations and other interested parties.

However, their l ists of stakeholders could be improved by adding a few

other parties. The list for Giram should have the names of the neighbouring estates. On the other hand, the name

Kebun Rimau should be added to the list of Tiger estate.

Indicator 6.3.1

OFI

Area/Location:

Estate and Oil Mill

Documentation of the process by which a dispute was

resolved and the outcome The practices among the

estates/mills differ with respect to getting complaints and grievances from their workers and staffs. Certain

estates (eg. JelataBumi) require their workers to make verbal requests for services while others (eg. Giram) use

forms to record the grievances. Others (eg. Tiger) enter complaints into record

books. For the purpose of ensuring uniformity of practices as well

as to better facil itate monitoring activities, it is recommended that the

practices be standardized for all the estates and mills. This recommendation is also

in l ine with the previous one made during the third surveillance audit.

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Indicator 6.6.1

OFI

Area/Location

:

Estate and Oil

Mill

Documented minutes of meeting with main trade unions or workers representatives

Currently, all estates and mills do not have formal regular

meetings with union leaders. This practice is quite acceptable because there is no full committee

membership of union leaders in the estate/mill.

However, the union leaders need to convey or voice the members’ concerns to the estate/mill management.

Therefore, it is recommended that the union representatives at each estate/mill be appointed as

members of permanent estate/mill committee, for example, the safety

committee.

Indicator 4.7.1

OFI

Area/Location

: Giram Oil Mill

Giram Oil Mill

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

compliance with Occupational Safety and Health Act 1994 and Factories and Machinery Act 1997.

The (a) content of he first aid box and (b) records of

casualty and treatment given by First-Aiders at the office could be improved to be in compliance with the

Guideline on First Aid in the Workplace (2nd Edition) as published by DOSH.

Emergency preparedness and response

The post mortem report could be improved to detail out the chronological event including when was siren activated,

time of arrival of fi rst person and last person at assembly

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Giram Oill Mill

Giram Oil Mill

Giram Oil Mill

point, time finishing head count, time activating fire fighting team or first aiders swing into action, orderliness

of evacuation, etc. The evacuation time to reach

assembly point had yet to be improved to meet the company’s stated time of 5 minutes and less. Employee

seriousness and shortcomings l ike siren could not be clearly heard to be looked into.

Noise Map Although noise mapping had been done, a large map

should be displayed at the Boiler area, Engine Room and Kernel Area in addition to the appropriate PPE signage

required to inform employees of the high noise area.

JKKP 7 had yet to be submitted to DOSH by the OHD/ KKS Giram.

RSPO Supply Chain Standard,

November 2011

Specification Major/Minor/

OFI

Detail Non-conformances Corrective Action Taken Verification by Assessor

D.1.1 (a) Major NCR II 1/2013

Giram POM’s SOP does not have complete written procedures and work

instructions to ensure the implementation of all the elements as specified in these

requirements i.e. on (1) receiving and processing of certified FFBs (2) sales and goods out (dispatch of

certified products) (3) processing (clear procedures on segregation of certified

materials including measures to avoid contamination.

Giram POM had revised the SOP to include the necessary procedures

related to activities (1), (2) and (3)

A copy of the revised SOP dated March

2013 was submitted on 3 March 2013.

The auditor had reviewed, accepted and verified the

revised SOP. This major NCR was therefore

closed out.

D.6.1 Major NCR II 2/2013

It was found out that not all the critical staff has been provided the training as

required to implement the requirements of the supply

A training was held on 22 February 2013 which was attended by 10 of the

Giram POM’s key personnel.

Attendance record on the training was

summited on 23 April 2013. The

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chain certification system. auditor had reviewed, accepted and verified the

attendance record. This major NCR was

therefore closed out.

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Attachment 4

VERIFICATION ON PREVIOUS 3rd SURVEILLANCE AUDIT (2011) NON-CONFORMITY REPORTS FOR SOU 28, SOU 29 & SOU 30

P & C Indicator

Specification Major/Minor

Detail Non-conformances

Corrective Action Taken

Verification by Assessor

Indicator 2.1.1

NCR #:

MM 01A

Major No on-site competent Steam Engineer Grade 1

in-charge of Steam Boiler, Registration SB PMD 10604 (heating surface area is 1100m2)

when it is in operation. The Mill Manager and his Assistant are Grade 2

Steam Engineer in-charge of boiler PMD 10604.

Giram Oil Mill has planned to send its Mill

Manager to sit for First Grade Steam Certificate in June 2012.

The previous Mill Manger had resigned and his

replacement is a qualified First Grade Steam Engineer.

Indicator 2.1.1

NCR #:

MM 01B

Major At Imam Estate, no on-site competent Engine

Driver Grade 1 or Grade 2 in-charge of generator sets when they are in operation. The current

generator sets (85kw and 45kw) were operated by non-

competent person engine driver.

Imam Estate has planned to send its

person in-charge to sit the Grade II exam for engine driver. Application has been

sent to DOSH Sabah on 31/12/2011.

The Imam estate has change the electricity

supply from using generator set to connecting to grid system of SESB (Sabah Electricity

Sdn Bhd) Verification at site found

the generator sets was not running. Electricity bil l latest #

700001464587 was on 3 December 12 was verified Wiring payment for SESB #

for Kg Indah RM45k, verified by engineer on 5 Nov 2012 also has been

evident. Therefore the status of NCR was closed

Indicator

4.8.1

NCR #: MM 02

Major Re-assessment following

training is not done by management, for example, HIRADC training (for Mill

Manager), LOTO system, Use of Standard Exposure of Chemical

Hazardous to Health 2000, etc. Ear Plug was not worn at boiler area where

Giram Oil Mill will

continuously conduct training on safety and importance of PPE and HIRADC. Warning letter

would be issued to those who disobey the requirements.

Corrective actions taken

found to be adequate to close out the NCR. Simple assessment such as

field work observations are means of assessment.

Appropriate PPE including Ear Plug were seen worn in high noise area.

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MSC/RSPO/DOC/06-02 Page 70 of 70 Issue 1 Rev . 0

Signage was clearly displayed requiring use of PPE.

Indicator 2.1.1

NCR #: VS 01

Major Training on scheduled waste as per

requirement of EQA Regulation has yet to be conducted. There has

been no training given for person in-charge of scheduled wastes handling at Jelata Bumi

Estate, Merotai Palm Oil Mill and Imam Estate.

Jelata Bumi has come up with training plan to

train its person in-charge for scheduled waste handling.

SOU 30 has conducted the training on scheduled waste handling on 20/1/2012

and records were sent to the assessor.

The scheduled wastes handlers training at Jelata

Bumi had been sighted and found adequate. Additionally, during this

4th surveillance audit, Binuang estate had taken proactive action by sending their person in-

charge, Mr Firdaus (QA), Mr. Valentino (formen), Ms Muliati (store CC) & Mr. Arthur (HA) to the

scheduled waste training on 20th December 2012.

Status of NCR: Closed

Indicator 6.1.2

NCR #: ZE 02

Minor The current format and contents of the SIA for

SOU 29 (including Giram Oil Mill) and the former SOU 30a (Mostyn

Estate) are generally adequate. However the SIA has not been revised to incorporate potential

impacts of estate activities on external local communities as recommended in the

last surveillance report. The original assessment had been done without

the participation of local communities in the vicinity of Mostyn Estate and Giram POM, neither

has any effort been made to do so since then.

SDPSB has planned to revise its SIA to include

the participation from stakeholders such as Kg. Seri Bahagia, Kg.

Kadazan, Kg. Cenderawasih and Kg. Wawasan.

In all the estates and mills visited, minutes were seen

on the meetings between the estates/mills and various stakeholders. In

the case of Giram mill, the meeting was held at KGTI on 20 July 2012. However, not all representatives

from the kampongs attended the meeting. The actions taken found to

be adequate to close out the NCR.

Indicator 6.3.1

NCR #: ZE 01

Major Documentation of the process for dealing with

complaints and grievances is not available in Mostyn

Estate and Giram Oil Mill.

Grievances were formally recorded in

“Minutes of Stakeholder”. Now the document is renamed

as “Grievance Book” to records any form of complaints.

Record books with updated entries on

external and internal communications were seen at all estates and

mills. So too were procedures for handling disputes.

The actions taken found to be adequate to close out the NCR.