kelapa sub-district, bangka barat regency, bangka belitung province. 01º 58' 24.29" s...

PT. MUTUAGUNG

LESTARI

ASSESSMENT REPORT

Roundtable on Sustainable Palm Oil Certification

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

Plantation Management/Owner : PT MASKAPAI PERKEBUNAN LEIDONG WEST

INDONESIA – PT SMART Tbk

Plantation Name : LEIDONG WEST POM – Leidong West Selatan

Estate & Leidong West Utara Estate (PT MP

LEIDONG WEST INDONESIA), Bukit Intan

Estate & Bukit Mas Estate (PT Bumi Permai

Lestari)

Location :

Kelapa Sub-district, Bangka Barat Regency, Bangka Belitung Province, INDONESIA

Certificate Code : MUTU-RSPO/xxx

Date of certificate issue :

Date of expiry of certificate :

Assessment Assessment

Date PT. Mutuagung Lestari

Auditor Checked

by Approved

by

ST-02 25th – 29th November 2013 Y. Wisnu Rahmanto, Naila Karima,

Rudi Ramdani, Bukti Bagja

Octo HPN

Nainggolan

Taufik Margani

Mutuagung Lestari • Raya Bogor Km 33,5 Number 19 • Cimanggis • Depok 16953• Indonesia

Telephone (+62) (21) 8740202 • Fax (+62) (21) 87740745/6

Email : [email protected] ● www.mutucertification.com

MUTU Certification • Approved by RSPO Secretariat on June 2008

Assessment Submitted

to RSPO on: Approved

by RSPO on: Approved

by MUTUAGUNG LESTARI on:

ST-02 January 6th, 2014

http://www.mutucertification.com/

PT MUTUAGUNG LESTARI

ASSESSMENT REPORT

SPO – 4006a.5 Prepared by Mutuagung Lestari for LEIDONG WEST POM – PT MASKAPAI PERKEBUNAN LEIDONG WEST INDONESIA

TABLE OF CONTENT

Figure 1. Location Map of PT MASKAPAI PERKEBUNAN LEIDONG WEST INDONESIA 1

Figure 2. Location Map of PT PT BUMI PERMAI LESTARI 2

Figure 3. Operational Map of PT MASKAPAI PERKEBUNAN LEIDONG WEST INDONESIA - LWUE 3

Figure 4. Operational Map of PT MASKAPAI PERKEBUNAN LEIDONG WEST INDONESIA - LWSE 4

Figure 5. Operational Map of PT BUMI PERMAI LESTARI - BMSE 5

Figure 6. Operational Map of PT BUMI PERMAI LESTARI - BINE 6

1.0 SCOPE OF THE CERTIFICATION ASSESSMENT 7

1.1 National Interpretation Used 7

1.2 Organization Information 7

1.3 Type of Assessment 7

1.4 Locations of Mill, Plantations and Area Statement 7

1.5 Area Statement 8

1.6 Description of Supply Base 8

1.7 Year of Plantings and Cycles 9

1.8 Approximate Tonnage Certified 9

1.9 Other Certifications 10

1.10 Time Bound Plan for Other Management Units 10

2.0 ASSESSMENT PROCESS 12

2.1 Certification Body 12

2.2 Assessment Team 12

2.3 Assessment Methodology, Assessment Process and Locations of Assessment 12

2.4 Stakeholder Consultation and List of Stakeholders Contacted 15

2.5 Determining Next Visiting 15

3.0 ASSESSMENT RESULT 16

3.1 Summary of Assessment Report of the RSPO Certification 16

3.2 Summary of Assessment Report of Supply Chain 29

3.3 Conformity Checklist of Certificate and Logo Use 33

3.4 Summary of RSPO Partial Certification. 34

3.5 Identification of Findings, Corrective Action, Observations, Opportunity for Improvement and Noteworthy Positive Components. 35

3.6 Summary of Arising Issues from Public, Management and Auditor Response 43

4.0 CERTIFIED ORGANISATION'S ACKNOWLEDGEMENT OF INTERNAL RESPONSIBILITY 50

4.1 Formal Sign-off of Assessment Findings 50

APPENDICES 51

Appendix 1 List of Stakeholder Contacted in the RSPO Certification Process 51

Appendix 2 Assessment Program 52

Appendix 3 Glossary 54

PT. MUTUAGUNG LESTARI

ASSESSMENT REPORT

SPO – 4006a.5 Page 1 Prepared by Mutuagung Lestari for LEIDONG WEST POM – PT MASKAPAI PERKEBUNAN LEIDONG WEST INDONESIA

Figure 1. Location Map of PT MASKAPAI PERKEBUNAN LEIDONG WEST INDONESIA


ASSESSMENT REPORT


Figure 2. Location Map of PT PT BUMI PERMAI LESTARI


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Figure 3. Operational Map of PT MASKAPAI PERKEBUNAN LEIDONG WEST INDONESIA - LWUE


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Figure 4. Operational Map of PT MASKAPAI PERKEBUNAN LEIDONG WEST INDONESIA - LWSE


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Figure 5. Operational Map of PT BUMI PERMAI LESTARI - BMSE


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Figure 6. Operational Map of PT BUMI PERMAI LESTARI - BINE


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1.0 SCOPE OF THE CERTIFICATION ASSESSMENT

1.1 National Interpretation Used National Interpretation, RSPO Principles and Criteria (P&C) for Sustainable Palm Oil

Production, Republic of Indonesia - RSPO INA-NIWG, May 2008, RSPO INA-SWG, and RSPO

Supply Chain Certification Standard November 2011.

1.2 Organization Information

1.2.1 Company name PT MP LEIDONG WEST INDONESIA - SMART Tbk.

1.2.2 Contact person Ismu Zulfikar

1.2.3 Company address and site address Head Office: Sinarmas Land Tower 2, 30th Floor JL. MH Thamrin No 51 Kav 22 Jakarta 10350 Indonesia Site: Kelapa Sub-district, Bangka Barat Regency, Bangka Belitung Province.

1.2.4 Telephone (+62-21) 318 1388

1.2.5 Fax (+62-21) 318 1389

1.2.6 E-mail [email protected]

1.2.7 Web page address www.smart-tbk.com

1.2.8 Company status Private

1.2.9 Management Representative who completed the application for certification

Ismu Zulfikar (Head of Environmental Departement)

1.2.10 Registered as RSPO member 1-0019-05-000-00, 30th January 2005

1.3 Type of Assessment

1.3.1 Scope of Assessment Mill and Oil Palm Estate

1.3.2 Type of certificate Single

1.3.3 Company names listed in the certificate

PT MASKAPAI PERKEBUNAN LEIDONG WEST INDONESIA

1.3.4 Number of management unit 1 (one) unit of Leidong West POM and its supplied by Leidong West Selatan Estate (PT MPLWI), Leidong West Utara Estate (PT MPLWI), Bukit Intan Estate (PT BPL), Bukit Mas Estate (PT BPL)

1.4 Locations of Mill, Plantations and Area Statement

1.4.1 Location of Mill

Name of Mill Location

GPS

Latitude Longitude

Leidong West POM Kelapa Sub-district, Bangka Barat Regency, Bangka Belitung Province.

01º 54' 05.01" S 105º 28' 35.09" E

1.4.2 Location of Supply Base

Name of Supply Base Location GPS

http://www.smart-tbk.com/


ASSESSMENT REPORT


Latitude Longitude

Leidong West Selatan Estate (LWUE)

Kelapa Sub-district, Bangka Barat Regency, Bangka Belitung Province.

01º 58' 24.29" S 105º 26' 59.71" E

Leidong West Utara Estate (LWSE)


01º 44' 17.68" S 105º 29' 53.02" E

Bukit Intan Estate (BINE)


01º 52' 33.78" S 105º 30' 35.16" E

Bukit Mas Estate (BMSE)


01º 54' 03.40" S 105º 28' 05.95" E

1.4.3 Tenure

Private

State* Ha

PT MP LEIDONG WEST INDONESIA Indonesia - Land title certificate (Sertifikat HGU) No. 15 dated 25th September 2004 covered 746.52 Ha.

- Land title certificate (Sertifikat HGU) No. 16 dated 25th September 2014 covered 642.72 Ha.

PT Bumi Permai Lestari - Land title (SK HGU) No.1/R1t/HGU/BPN RI/2013 covered 10,900.56 Ha.

- Land title (SK HGU revised) No.1 dated 8th August 1996 covered 8,234.13 Ha.

Community**

1.4.7 Area Statement

Total area 9,623.37 Ha

Mature area 8,962.39 Ha

Immature area - Ha

Mill/building/roads 477.93 Ha

Ditch outside 53.60 Ha

Reserve area 129.45 Ha

Conservation area 241.48 Ha*)

*) Referring to the analysis of HCV, conservation areas overlap with the area estates in certain lands were planted before 2005 but treated as a special treat HCV

1.5 Description of Supply Base

1.5.1 Description of Mill

Name of Mill Capacity

(tonnes/ hour)

FFB Processed

(tonnes/ year)

CPO Palm Kernel PKO

Out put (tonnes)

Extraction (%)

Out put (tonnes)

Extraction (%)

Out put (tonnes)

Extraction (%)

Leidong West POM 60 191,695.22 41,699.49 21.75 11,289.51 6.00 - -

*source: received and process of Leidong West POM November 2012 – October 2013

1.5.2 Description of Estate(s)

Name of Estate(s) Total Area

(Ha)

Planted Area (Ha)

FFB (tonnes/year)

Yield (tonnes/ha/year

)

Supplied to Mill

FFB (tonnes/year

) %

Leidong West Selatan Estate 642.73 627.12 14,816.05 23.63 14,816.05 7.73


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Leidong West Utara Estate 746.52 661.63 14,503.89 21.92 14,503.89 7.57

Bukit Intan Estate 5,050.61 4,656.87 98,682.57 21.19 98,682.57 51.48

Bukit Mas Estate 3,183.51 3,016.77 63,451.46 21.03 63,451.46 33.10

Total 9,623.37 8,962.39 191,453.97 21.36 191,453.97 99.87

*source: FFB received of Leidong West POM November 2012 – October 2013

1.5.3 Smallholder(s) and other source

Name of

source(s) Member(s) Location

Total Area (Ha)

FFB (tonnes/year)

Supplied to Mill

FFB (tonnes/year

) %

Bukit Perak Estate - Bangka Barat - - 54.73 0.03

Bukit Permata Estate

- Bangka Barat - - 121.81 0.06

Bukit Permai Estate - Bangka Barat - - 64.71 0.03

TOTAL - - - - 241.25 0.13

*source: FFB received of Leidong West POM November 2012 – October 2013

1.5.4 Product categories FFB/CPO/PK /PKO

1.6 Year of Plantings and Cycles

1.6.1 Age profile of planted palms*

Planting

Year

Hectarage

LWSE (Ha)

LWUE (Ha)

BINE (Ha)

BMSE (Ha)

TOTAL (Ha)

1992 - - 85.28 - 85.28

1993 - - 4,354.02 2,534.01 6,888.03

1994 - - 156.68 482.76 639.44

1995 - - 60.89 - 60.89

1996 627.12 - - - 627.12

1997 - 341.45 - - 341.45

1998 - 320.18 - - 320.18

TOTAL 627.12 661.63 4,656.87 3,016.77 8,962.39

1.6.2 New Planting area after November 2007 - Ha

1.6.3 Planting Cycle 1stCycle 25 Years

1.7 Approximate Tonnage Certified

1.7.1 Past Annual Claim Certified Product (will be completed if geting certificate)

FFB Production - Tonnes/year

CPO Production - Tonnes/year

Palm Kernel (PK) Production - Tonnes/year

Palm Kernel Oil (PKO) Production - Tonnes/year

1.7.2 Claim Certified Tonnage of FFB

Name of Estate(s)

Total Area (Ha)

Planted Area (Ha)

FFB (tonnes/year)

Yield (tonnes/ha/year)


ASSESSMENT REPORT


Leidong West Selatan Estate 642.73 627.12 15,705.01 25.04

Leidong West Utara Estate 746.52 661.63 15,374.12 23.23

Bukit Intan Estate 5,050.61 4,656.87 104,603.52 22.46

Bukit Mas Estate 3,183.51 3,016.77 67,258.54 22.29

TOTAL 9,623.37 8,962.39 202,941.19 22.64

1.7.3 Claim Certified Tonnage of Palm Product

Name of Mill Capacity

(tonnes/ hour)

FFB Processed

(tonnes/ year)

CPO Palm Kernel PKO

Out put (tonnes)

Extraction (%)

Out put (tonnes)

Extraction (%)

Out put (tonnes)

Extraction (%)

Leidong West POM

60 202,941.19 44,647.06 22 11,669.12 5.75 - -

1.8 Other Certifications

1.8.1 ISO 9001:2008/ISO 14001: 2004 -

1.8.2 OHSAS 18001:2007 -

1.8.3 HACCP -

1.8.4 Others ISCC (International Sustainablity and Carbon Certification) Certificate No. EU-ISCC-Cert-DE104-07781361,14th August 2013 issued by GUTcert.

PROPER Blue Level period 2011 – 2012 and 2012 – 2013

1.9 Time Bound Plan for Other Management Units

SMART Tbk has committed to making the time bound plan for the overall of another unit that is under management in applying the standard of the P & C or obtain RSPO certification and audit team has been considering this plan in accordance with the RSPO Certification System for Partial Certification. The development and follow-up of this plan will be verified and reported on an annual routine visit.

Mill Estate (FFB Supplier) Address

Time Bound Plan

Status per Jan 2013

Padang Halaban Mill

Padang Halaban Estate; Pernantian Estate; Adipati Estate; Kanopan Ulu Estate

North Sumatera 2011 Certified

Batu Ampar Mill Batu Ampar Estate; Batu Mulia Estate; Sungai Panci Estate; Sungai Panci KKPA

South Kalimantan 2012 Certified

Tanah Laut Mill Tanah Laut Estate; Kintapura Estate South Kalimantan 2012 Certified

Langga Payung Mill

Langga Payung Estate; Paya Baung Estate; Normak Estate

North Sumatera 2012 Certified

Hanau Mill Hanau Estate; Tasik Mas Estate; Tanjung Paring Estate; Langadang Estate; Medang Sari Estate

Central Kalimantan

2012 Certified

Leidong West Mill Leidong West; Utara Estate; Leidong West Selatan Estate; Bukit Intan Estate; Bukit Mas Estate

Bangka 2013 Audited

Semilar Mill Semilar Estate; Sei Rindu Estate; Mandang Estate Puri Estate

Central Kalimantan

2012 Audited

Jak Luay Mill Pantun Mas Estate; Pantun Mas Kkpa; East Kalimantan 2014 Preparation


ASSESSMENT REPORT


Jak Luay Estate; Jak Luay KKPA; Long Buluh Estate; Bukit Subur Estate; Bukit Subur KKPA.

Gunung Kombeng Mill / Muara Wahau Mill

Gunung Kombeng Estate ; Gunung Kombeng KKPA; Muara Wahau Estate; Rantau Panjang Estate; Rantau Panjang KKPA.

East Kalimantan 2013 Internal Audit Completed

Jelatang Mill Batang Merangin Estate Jambi 2013

Internal Audit Completed

Kubang Ujo Plasma, Pamenang Plasma

Jambi 2014 Gap Analysis Completed

Pelakar Mill Pelakar Estate Jambi 2014


Tiga Serumpun KKPA; Bukit Bungkul KKPA


Langling Mill Bangko Inti Estate Jambi 2013


Bangko Plasma Jambi 2014

Gap Analysis Completed

Sungai Bengkal Mill

Sungai Bengkal Estate; Batang Gading Estate; Kilis Estate

Jambi 2014 Internal Audit Completed

Sungai Bengkal KKPA; Batang Gading KKPA; Kilis KKPA


Bukit Kapur Mill Sungai Cantung Estate; Bukit Kapur Estate South Kalimantan 2015 Preparation


ASSESSMENT REPORT


2.0 ASSESSMENT PROCESS

2.1 Certification Body

PT Mutuagung Lestari

Jl. Raya Bogor Km 33,5 No. 19, Cimanggis - Depok 16953

Telp. +62-21-8740202; Fax +62-21-87740745/46

Website: www.mutucertification.com Email : [email protected]

2.2 Assessment Team

2.2.1 Lead Assessor and Assessment Team

ST-2 1. Yudwi Wisnu Rahmanto (Lead Auditor). Bachelor of Forestry with Silviculture background, University of Gadjah Mada. He worked at professional independent Certification Body as an Auditor for last 3 years and has involved in auditing activities with various certification schemes. Selected training which have been followed, such as RSPO Endorsed Lead Auditor Training Course, ISPO Auditor/Lead Auditor Course, Quality Management System (QMS) ISO 9001:2008 Auditor/Lead Auditor Course, GIS-Basic Mapping and Spatial Analysis, Timber Legality Assurance System (SVLK), Verification Organization Training C.A.F.E Practices (Starbucks) and others internal training programs. He has involved in auditing activities, such as Sustainable Forest Management by FSC FM/COC Scheme, Sustainable Palm Oil by RSPO and ISPO Scheme, Coffee And Farmer Equity (C.A.F.E Practices) Starbucks, Organic Standard (EU, NOP, JAS) for Coffee Farmers and Organic Exchange for Textile. During this audit, he assigned to verify of Legal aspect..

2. Naila Karima (Auditor). Bachelor of Public Health, Department of Occupational Health and Safety. Faculty of Public Health, University of Indonesia. She had experience working in private oil palm plantation companies in Indonesia. She had followed training such as ISPO Lead Auditor, awareness training the RSPO certification system, awareness training Occupational Health and Safety Management System (PP No. 50 tahun 2012), and Integrated Management System (OHSAS 18001:2007, ISO 14001:2004, and ISO 9001:2008).

3. Rudi Ramdani (Auditor). Bachelor of Agriculture Majoring in Agronomy, Agriculture Faculty of Bogor Agricultural University. He has experienced more than two years as an operational staff in a private oil palm plantation company in Indonesia. He also followed training he namely: Indonesian Sustainable Palm Oil auditor, Awareness RSPO, Management System Certification (ISO 9001-2008) training and awareness OHSAS. Currently he works for Independent Certification Body.He had involved activities RSPO and ISPO certification assessment as an auditor.

4. Bukti Bagja (Auditor). Master of Science majoring environment, Indonesia University. He had involved in RSPO assessment and HCV for GIS. The training he has followed namely. ArcGIS, MAPInfo, Global Mapper, ER MAPPER, ERDAS Imagine, Indonesian Sustainable Palm Oil auditor and Awareness RSPO

2.3 Assessment Methodology, Assessment Process and Locations of Assessment

2.3.1 Figure of person days to implement assessment

ST-2 Number of Auditor : 4 Auditor Number of days for ST-2 on site : 5 Days Number of man days for ST-2 on site : 20 Mandays

2.3.2 Detail process of assessment

ST-2 The assessment was conducted by measuring the sufficiency of implementation with the consistency done by the PT MASKAPAI PERKEBUNAN LEIDONG WEST INDONESIA INDONESIA to the requirements of National Interpretation of the Republic of Indonesia from RSPO Principles and Criteria for Sustainable Palm Oil Production (RSPO INA-NIWG, May 2008 and Supply Chain Requirement for CPO Mill The assessment was conducted in three methods: (1) document review, aiming to observe the sufficiency of types or substances from required documents; (2) interview, aiming to obtain more detailed information and cross check the information; and (3) field observation, aiming to observe directly the sufficiency of implementation on site.

http://www.mutucertification.com/

mailto:[email protected]


ASSESSMENT REPORT


Some opportunities for improvement of the results ST-2 delivered by the auditor MAL to the management unit and the results are the subject will be verified at the next assessment phase (S-1). Improvement of findings from main assesment findings were observed by auditors at this ST-2 assessment. All information obtained was recorded in Check List of PT Mutuagung Lestari (MUTU) and part of S-1. The assessment program please find Appendix 2

2.3.3 Location of Assessment

ST-2 The visited locations are presented like below: 1. Boundary Poles in the whole LWSE ranging from block X08 to X32. All the whole boundaries are in the maintained

condition. 2. HCV Area in LWSE :

- Riparian in block X30. - Grave in block Y15. - Sacred Forest in block X22. - Lebung Swamp in block X10. - Pelur riparian in block X18. - Boundary of HGU in BINE: Boundary in Division 4 block U42, U37, dan U32. All the boundaries are in the

maintained condition. 3. HCV (High Coservation Value) Area in LWSE :

- Seralung riparian in block U25. - Sacred grave in block U26. - Bukit Selam Sacred forest in Block N29.

4. Communities’ Estate Areal in HGU area in block U42, and P33. 5. A visit to the nearby village of companies:

- Berang Village Communities: Interviews with the communities related to the social aspects, land ownership, complaints, communication and consultation, and responses to the units management of PT MP LWI. Further complete results of the consultation can be found on page 51.

- Terentang Village Communities: Interviews with the communities related to thesocial aspects, land ownership, complaints, communication and consultation, and the responses to the units management of PT MP LWI. Further complete results of the consultation can be found on page 51.

- Related agencies: The results of consultation with government agencies can be found on page 51. 6. Leidong West Mill (LWSM) as follows :

- Treatment process (loading ramp to dispatch). Observations related to the processing of FFB into crude palm oil (CPO), fire emergency response facilities in Mill, First Aid Kit, and implementation of OHS.

- Supporting facilities. Observations conducted to supporting facilities such as workshop, warehouse material, Hazardous waste warehouse, Chemicals warehouse, Water Treatment Plant.

- Installation of Wastewater Management. Observation of liquid waste management of mill consists of 7 ponds. Leidong West Selatan Estate (LWSE) :

1. Block X20-X21, Division 1: Observations and interviews with the harvest supervisor, harvesting workers and related picker about safe working techniques before, during and after work, usage of personal protective equipment (helmet, gloves, boots), occupational first aid emergency , availability of First Aid Kit in the field, wages and work day, union and workers’ health insurance services.

2. Block X14, Division 1: Observation of the owl's nest (BOB) and APH. Owl nest inhabited by 1 breeders and there are biological control agent plants, Turnera subulata along the MR & CR.

3. Manure warehouse. Observations manure storage activities, availablity of MSDS (Material Safety Data Sheet) and work instructions of handling manure at the bottom of fertilizer cover and no contamination to the floor, as well as adequate ventilation.

4. Office of Divison I: Interviews with: - Deputy Chairman of the PUK PT MPLWI Unions: According to the deputy chairman of the PUK, so far the

union relationship with the company runs well. Different perceptions about the rice subsidy between the


ASSESSMENT REPORT


union and the company have been settled by the industrial relations and were won by the company. Currently, the union is pursueing a review by the MA (Supreme Court).

- Gender Committee members: Based on information from the Gender Committee members, the company has been known facilitating the reproductive rights of women workers and protecting them. Throughout the year of 2013, there are no problems related to sexual harassment in the scope of Estate and Mill.

- Spraying and fertilizing workers: Based on interviews with the supervisors, spraying workers, as well as fertilizing workers have known that they understand safe working techniques before, during and after work, provision of equipment / personal protective equipment (helmet, mask, rubber gloves, apron, boots), the supervisors understand occupational first aid emergency, the availability of first aid kit in the field, wages and work days, knowing the existence of a gender commission, H1 & H2 leave entitlements, union existence and workers’ health insurance services

5. Management of Agrochemical and used agrochemical package. Observation at mixing pesticides, washing (used pesticide packages, used fertilizer bags, PPE, spraying workers’ tools) equipped with tanks. The water in the tank is reused for land application.

6. Hazardous Waste Temporary Warehouse. Observation of hazardous waste storage activities before being delivered to licensed hazardous waste temporary warehouse, there are symbols, hazardous waste labels, fire extinguisher, and a recapitulation of the outgoing and incoming waste.

7. Generator house. Observation of the operation and maintenance generator activities, hazardous waste management verification (used oil). Machine operators equipped with personal protective equipment (helmet, earmuff and shoes), the building is equipped with fire extinguisher, oil trap, and the watertight ground floor to prevent spills of used oil directly into the ground.

8. Emergency Response Post. Observation of fire prevention facilities and infrastructure such as tanks equipped with fire pumps and hoses, and other equipment such as gaff hook, fire batons, bags, helmets, knapsack, all the equipment in a condition ready for use.

9. Infrastructure Facilities for Employees. Observation of emplacement facilities, water supply, religious facilities, and sports facilities provided by the company

10. Landfill. Observation of inorganic waste landfill activities in Block X24, which is located 2 kilometers from the housing and water resources.

Bukit Intan Estate (BINE) :

1. Office of Division 2: Interviews with: - Union of PUK members: According to the deputy chairman of the PUK, so far the union relationship with the

company runs well. Different perceptions about the rice subsidy between the union and the company have been settled by the industrial relations and were won by the company. Currently, the union is pursueing a review by the MA (Supreme Court).

- Gender Committee: Based on information from the Gender Committee members, the company has been known facilitating the reproductive rights of women workers and protecting them. Throughout the year of 2013, there are no problems related to sexual harassment in the scope of Estate and Mill.

2. Block P27/28 Divison 2: Based on interviews with the supervisors, spraying workers, as well as fertilizing workers have known that they understand safe working techniques before, during and after work, provision of equipment / personal protective equipment (helmet, mask, rubber gloves, apron, boots), the supervisors understand occupational first aid emergency, the availability of first aid kit in the field, wages and work days, knowing the existence of a gender commission, H1 & H2 leave entitlements, union existence and workers’ health insurance services

3. Block S26/25, Division 2: Observation and field interviews with research staff about EFB, observation of owl nest (BOB) and APH (Turnera subulata) plant. BOB occupied by 2 adult owls.

4. Block S26/27: Observations and job interviews with the harvest supervisor, harvesting workers and related picker about safe working techniques before, during and after work, usage of personal protective equipment (helmet, gloves, boots), occupational first aid emergency , availability of First Aid Kit in the field, wages and work day, union and workers’ health insurance services.

5. Infrastructure Facilities for Employees. Observation of emplacement facilities, education facilities, health faclities, water supply, religious facilities, sports facilities and other other facilities (employees center, child care center and shcool buses) provided by the company

6. Generator house. Observation of the operation and maintenance generator activities, hazardous waste


ASSESSMENT REPORT


management verification (used oil). Machine operators equipped with personal protective equipment (helmet, earmuff and shoes), the building is equipped with fire extinguisher, oil trap, and the watertight ground floor to prevent spills of used oil directly into the ground.

7. Management of Agrochemical and used agrochemical package. Observing mixing pesticides, washing (used pesticide packages, used fertilizer bags, PPE, spraying workers’ tools) equipped with tanks. The water in the tank is reused for land application.

8. Landfill. Observation of inorganic waste landfill activities in Block X24, which is located 2 kilometers from the housing and water resources.

9. Manure warehouse. Observations manure storage activities, availablity of MSDS (Material Safety Data Sheet) and work instructions of handling manure at the bottom of fertilizer cover and no contamination to the floor, as well as adequate ventilation.

10. Emergency Response Post. Observation of fire prevention facilities and infrastructure such as tanks equipped with fire pumps and hoses, and other equipment such as gaff hook, fire batons, bags, helmets, knapsack, all the equipment in a condition ready for use.

11. Workshop. Observasi activities of heavy equipments and vehicles. 12. Hazardous Waste Temporary Warehouse. Observation of hazardous waste storage activities before being

delivered to licensed hazardous waste temporary warehouse, there are symbols, hazardous waste labels, fire extinguisher, and a recapitulation of the outgoing and incoming waste.

13. Clinic. Observasi health services activities for employees and the families.

2.4 Stakeholder Consultation and List of Stakeholders Contacted

2.4.1 Stakeholder Consultation and List of Stakeholders Contacted

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

2.4.2 List of stakeholder contacted

Please find appendix 1

2.5 Determining Next Visiting

The next visit (S-1) will be determined one year after issued certified.


ASSESSMENT REPORT


3.0. ASSESSMENT RESULT 3.1. Summary of Assessment Report of the RSPO Certification MUTUAGUNG LESTARI has conducted an assessment of LEIDONG WEST POM – PT MASKAPAI PERKEBUNAN LEIDONG WEST INDONESIA INDONESIA operation consisting of one (1) Mill and four (4) Estate (Leidong West Utara Estate, Leidong West Selatan Estate, Bukit Intan Estate, Bukit Mas Estate). During the assessment (ST-2) carried out, there were three (3) Nonconformities were assigned against Minor Compliance Indicators; and five (5) opportunities for improvement were identified. MUTUAGUNG LESTARI found that LEIDONG WEST POM – PT MASKAPAI PERKEBUNAN LEIDONG WEST INDONESIA complied with the requirements of RSPO Principles & Criteria and National Interpretation, RSPO Principles and Criteria (P&C) for Sustainable Palm Oil Production, Republic of Indonesia - RSPO INA-NIWG, May 2008 and RSPO Supply Chain Certification Standard November 2011. Therefore MUTUAGUNG LESTARI Recommends RSPO Certification of compliance is issued.

Ref Std. VERIFICATION RESULT of MUTU-Certification

PRINCIPLE #1 COMMITMENT TO TRANSPARENCY

1.1 Plantation and Palm Oil Factory have to give adequate information for stakeholders in appropriate language and forms, to ensure the effective participation of stakeholders in decision-making.

The company already has a request and an information response mechanism that is adequate to stakeholders, in SOP of request and information response (SOP/SPO/SMART/LH-01) dated July 1, 2010. The request and information respons recorded in the "Request of Information & response Note Book ". Examples of requests and information responses record, such as Letters of Bangka Barat Head Distric No. 050/506/1.06.01/2013 and No.050/569/1.06.01/2013 dated June 15, 2013 concerning the request of data location of HGU of Perkebunan Besar in the Bangka Barat , and has been addressed by the company on July 17, 2013 a response letter No.004 / D & L-LWI/VII.2013 and NO.003 / D & L-BPL/VII/2013 regarding the submission location data of PT MPLWI and PT BPL. The request and information respons record and other documents that have been archived, stored at the Sustainable Palm Oil Secretariat in each unit. Based on Standard Operating Procedure (SOP) and the Control Period Save Documents (SOP/SPO/SMART/LH-02), the document of request and information response and the other documents related to the implementation of Sustainable Palm Oil (SPO) is 5-year shelf time.

Status: Full Compliance

1.2 Management documents are publicly available, except where this is prevented by commercial confidentiality or where disclosure of information would result in negative environmental or social outcomes.

There are socialization evidence in the form of attendance list of SOP Socialization of Communications, Consultation, Complaints and Conflict Resolution of Land and Information Register dated December 16, 2011 at the BINE Long House Room which were attended by the public figure & civil servant of surrounding village of Terentang, Kedondong, Pangkalan Beras, Berang & Rajek. There are SOP of life cycle and control of document (document number SOP/SPO/SMART/LH-02) that manage about : kind of information can be accessed by public: 1. The evidence of HGU certificate ownership 2. List of employees and TIN and the information for the PBB (Tax on Land Building) calculation 3. Payment of local taxes / levies 4. Deed of Establishment and its amendments, area and production data, and also fertilizing application data.


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5. Study of EIA, environmental management plan / environmental monitoring plan dan LA permit along with the implementation monitoring document

6. HCV Assesment report 7. Social Impact Assessment report 8. Social Activities Document/ CSR of the company 9. Quarterly report of Guiding Committee Of Occupational Safety & Health, Occupational Accident and Labour Social

Assurance Based on the documents list for Stakeholder information, the type of information that can be accessed by the parties are :

Evidence of Ownership such as HGU certificate.

Number of Employees and Cost of Employee Wages Register, In general, almost all of workers are local people. We have revised the report. Based on data of workers in November 2013, the percentage of local workers from the total are 79.76%.

List of Employees and TIN and information for the calculation of Land and Building Tax

Payment of local taxes / levies

Deed of Establishment and its amendments, the area and production data, as well as fertilizing application data.

EIA Study, RKL / RPL Environmental Management Plan / Environmental Monitoring Plan and LA Permit along with control Implementation document. Information of waste management and disposal plan, as well as pollution prevention plans on plantations and in mills is included in document of Environmental Management Plan/Environmental Monitoring Plan (RKL & RPL). The company is peridiocallly (one semester) prepare these document and submit to Environment Agency of District.

HCV Assessment Report.

Social Impact Assessment Report, Company’s Social Work / CSR Document.

Quarterly Report of P2K3 (Guiding Committee Of Occupational Safety & Health), occupational accidents and Labour Social Assurance data.

The records must be maintained in accordance with the SOP of Document Control and life cycle document (document number SOP/SPO/SMART/LH-02). In the SOP stated that the life cycle of the document accordance with the SOP is ± 5 that stored in SPO secretariat in each unit. Then related to the old documents destruction, if the documents are still necessary for other legal purposes, they will remind stored in SPO secretariat and marked "Obsolete Document". Control of documents conducted by SPO Officer at MCC & Estate Unit. Based on information from the staff, it is known that until now, there are not document destruction activities. In addition, there is also a document of Circular Letter from RC and PC Bangka - Belitung to numbers 001/SE-RC/PC/Babel/X/13 for PT MPLWI and numbers 002/SE-RC/PC/Babel/X/13 for PT BPL, dated October 3, 2013 regarding: Description of retention Archive document and record related to SPO for POM and Estate wich still reference to SOP of control and life cycle of the documents which state that document related to the legality of the law, the environment and other applicable over 5 years, then the document is stored during the company operates.


PRINCIPLE #2 COMPLIANCE WITH APPLICABLE LAWS AND REGULATIONS

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

The company already has a mechanism to evaluate compliance with laws and regulations relating to the management of POM through the SOP on Regulations and Other Requirements (SOP/SPO/SMART/LH-03) issued by ENVD (Environment Department) in July 1, 2010. In SOP explained that the identification and verification of all relevant legislation once every 6 months, while the renewal of the license to be done at least in a year. PT MP LWI also can show a legitimate Plantation Business Permit (mill) in accordance with applicable regulations. Thus CAR No. 2013.01 stated CLOSED.

The company has a compliance evaluation to the rules, regulations and other requirements for these fields: Licensing plantations, Employment, High Conservation Value / HCV, Environment and OHS. Recording of regulatory adjustments are recorded in the Update Rule Book.


ASSESSMENT REPORT


The Company is committed to compliance with all applicable laws and regulations relating to Occupational Health and Safety. For example:

The Company has fulfilled its obligations over Regulation of Labour Ministry No. 01 In 1976 by involving the company’s doctor following the Hiperkes training (on behalf of dr. Edi No. Rahman. Certificate 20.209/DH-I/08)

The Company has fulfilled its obligations Regulation of Labour Ministry No.01 In 1979 by involving the company’s paramedics following the Hiperkes Training (e.g. No. Certificate 14.394/PM-IX/1 for nurses)

The Company has fulfilled its obligations over Regulation of Labour Ministry No. 01 year of 1988 by involving boiler operator following OHS training to become boiler operators to (eg License No.. 13/OPK3-PUBT/BI/XI/2011-P1 for boiler operators).

The Company has fulfilled its obligations over Regulation of Labour Ministry. No 09 year 2010 by involving crane operators, crane grapple, backhoe loaders, well loaders, tractors, and motor graders following OHS training to become forklift operator (eg, License No. 1467/OPK3/HOIST/PAA/XI/2011 for crane operators).

The Company has fulfilled its obligations over Regulation of Labour Ministry. No 04 year 1985 by involving generator operators following OHS training to become engine room operator (eg license No. 2730/OPK3/G/PTPT/XI/2011 for engine room operator).

The Company has fulfilled its obligations over Regulation of Labour Ministry. No. 02 year1982 by involving Welders following OHS training to become welders (eg license No. S.808/JL/PNK3/XI/2011 for welder).

The Company has fulfilled its obligations over Directorate General of Industrial Relations (Kepdirjen PHI & PK). No. 311 by by involving electrician following OHS taining of electrician (eg license No. 3344/TK3-LISTRIK/XI/2011 for electrician).

The Company has fulfilled its obligations POM engine certification, eg Deed of license No. 02/W7/K3/545/2001 for Boiler I, Deed of license No. 03/W7/K3/545/2001 for Boiler 2, Deed of licence No.MD.02/W7/K3/545/2001 for Diesel Generator 1 and Deed of license No. MD.01/W7/K3/545/2001 for Diesel Generator 2.


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

Document of land tenure and utilization by the company include: Location Permit, Deed Company , HGU Certificate , Permanent Licenses , HGB for Plant and legitimate Plantation Business Permit ( mill ) in accordance with applicable regulations . Thus CAR No.2013.02 stated CLOSED. Whereas documentary evidence that showed tenure and utilization land within the scope of certification Leidong West POM as follows:

No Unit Management

Estate Land Use Permit or IUT/IUP/SPUP (Ha)

Land Title or HGU (Ha)

Areal Statement (Ha)

1 PT MP LWI LWSE 10.000,00

746.52 746.52

LWUE 642.73 642.73

Sub total A 10,000.00* 1,389.25 1,389.25

2 PT BPL BINE 8.234,12

5,050.61 5,050.61

BMSE 3,183.51 3,183.51

Sub total B 8,234.12** 8,234.12 8,234.12 Total scope 18,234.12 9,623.37 9,623.37

* source: Merger Decree (Surat Persetujuan Penggabungan) of Company No: 349/III/PMDN/1998, No. Project: 1110/3115-07/13-09443, issued on 21 October 1998 from State Minister of Invesment (Menteri Negara Investasi/BKPM). ** source: SPUP No: HK.350/183/BUN.5/III/2001 dated 16 March 2001.

Meanwhile, the entire estate legal boundaries has been clearly demarcated by referring to the Land Map / Letters Measure of Land Title (HGU) and well maintained through monitoring every 4 months . If there is a dispute related to land conflicts, the company already has a land conflict resolution mechanisms ( SOP/SPO/SMART/LH-04 ) which the solution step consists of several stages and involves the parties. Based on verification of boundary stones/poles during field visit at Leidong West Selatan Estate (whole boundar

There is land that owned by community at the beginning of the development phase , where as many as 146 owners of land ( 105.23 ha ) in Berang village and 190 owners of land ( 363.78 ha ) in Tumbak Petar village has been compensated since 1995 to 1999 , according to established procedures and known by related parties . Thus CAR No. 2013.03 stated CLOSED. Socialization Communication and consultation procedures, complaints and Land Conflicts have been conducted with the


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parties involved. This is evidenced through interviews with villagers of Berang village and Terentang Village during Stage - 2 assessment activity.


2.3 Use of the land for oil palm does not diminish the legal rights, or customary rights, of other users, without their free, prior and informed consent.

Although land use of PT MPLWI is not on the traditional land rights, but based on a letter of head village in 2004, there are several arable public land acquisitions. This indicates that the people of arable land have legal rights and there should be evidence release. PT MP LWI can show evidence of arable public land acquisition at the beginning of the development phase, where as many as 146 owners of land (105.23 ha) in Berang village, 190 owners of land (363.78 ha) in Tumbak Petar village has been compensated since 1995-1999. Thus CAR.No. 2013.03 stated CLOSED.


PRINCIPLE #3 COMMITMENT TO LONG-TERM ECONOMIC AND FINANCIAL VIABILITY

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

The documents of long-term work plan of PT MPLWI perioe 2013 - 2016 (dated 30 September 2013 by the Director) is available, which also have discussed about: Profitability :

TBS Production years (2013-2016).

CPO and PKO Production (ton) period 2013-2016.

Revenue CPO and PKO period 2013-2016.

Cost Estate (Upkeep, Manuring, Harvesting, Transport, Overhead, Depreciation).

Mill Costs (Processing, Repair & Mantenance, Overhead, Depreciation, Inventory Movement).

Operating Expenses (Manajemen FEE, G&A expenses).

Profit/Loss; Profit 2013 – 2016. Budget worksheet 2013-2016 of PT LWI :

Mature Area

Estate Cost

FFB Yield/Ha

PP Produced (CPO, % OER, % PK, & KER)

Mill Cost

Cost/kg.

Operating Expenses (Manajemen Fee, Bulking Expenses, G&A Expenses). Summary long-term work plan of PT LWI 2013-2016 :

FFB, Mill Cost, PP Cost.

Planting Plan

Replanting Plan

FFB, CPO and PK production

POM capacity of LWSM.

Profitability. And the consideration of the exchange rate. Cost were controlled by Accounting Departement and audited through AAA (Audit Agronomy & Advisory) for Estate, MAA (Mill Audit & Agronomy) for Mill, Operational Internal Audit for Estate & Mill every year. These replanting program of PT Maskapai Perkebunan of Ledong West Indonesia also considers several aspects:

Based on SOP / SMART / MCAR / II / N-RP June 12, 2012: that the nursery in preparation for replanting, where demand of sprouts refers to Appendix No.LAMP/II/TA-PRP/01-Needs.

Memorandum of VPA PSM 2 for RC and All EM PSM2 dated July 1, 2013, concerning: the use of seeds / kecambahbersertifikat is available.


ASSESSMENT REPORT


Replanting program document for the next 10 years 2011-2021 is available for Sinar Mas Estate II from Department of Agronomy Palembang (dated 27 September 2013, approved by the RC Palembang), where for:

LWSU: planned activities replanting began in 2022 covering an area of 341.45 ha.

LWSE: planned activities replanting began in 2022 covering an area of 400 ha and 227.12 ha in 2023.

BINE: replanting activities planned for the year 1993 began planting in 2016 covering an area of 870.80 hectares; 2017 covering an area of 956.08 hectares; 2018 covering an area of 870.80 hectares; 2019 covering an area of 870.8 hectares; 2020 covering an area of 870.80 hectares; 2021 covering an area of 156 , 69 and 2022 covering an area of 60.89 Ha Ha. Planting as well as for the year 1994 BINE planned replanting activities started in 2019 and 2020.


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

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

SOP - IK Technical of Palm Oil Cultivation (CAR, 2012) which also discussed the activities from LC to Harvest is availabl. Includes standard operating procedures regarding the processing of palm oil mill of PT. SMART Tbk, revision-4, which has run the procedure: FFB receiving station, sterilization, threshing station, pressing station, clarification station, nut and kernel stations, boiler and engine rooms, water treatment, final effluent and tank washing storage. Dispatch CPO and PKO procedures are available in: Work Insturction of Despatch Oil No. IK/LWSM/DO/01 dated January 2, 2011 which has been discussed regarding: objectives, scope, duties and responsibilities, definitions, admission procedure descriptions/DO, weighing entrance / loading of CPO tank trucks and kernel truck, weighing out, after operation, abnormal conditions. There is also a Table of Contents of OHSAS Standard Operating Procedure (SOP) dated June 1, 2012 number SOP/SMK3/SMART/LH-01 to number 26 which also regulates the establishment, maintenance and communication OHS policies, hazard identification, assessment and control , the identification of regulatory and other requirements until contractor control. The SOP are available throughout the POM unit and Estate. Operational checks for Estate and POM performed at least every 6 months in the form: AAA activities (Audit & Advisory Agronomy) that emphasis on the technical side of farming and its cost), the OIA (Operational Internal Audit) emphasis on administrative procedures and unit costs), and MAA (Mill Audit Agronomy) emphasizing the operational of POM. The company has been regularly documented operational activity report of Estate and POM ranging from supervisor daily reports to a manager monthly report manager.


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

The company has a policy against soil analysis as follows: before 2011, the analysis of soil per 5 years; then in 2012 set per year of planting soil analysis namely to: plant age 3 years, 8 years, 13 years, 18 years, 23 years (in MCAR 2012), and leaf analysis every year. There are examples of the results of analysis of soil and leaf analysis as follows : Soil Analysis Sample that provided is :

BINE : results of soil analysis dated July 5, 2011 regarding the results of analysis of soil samples with 17 samples for the parameters of texture, pH, organic C, total N, C / N, CEC, KB for Ca, Mg, K, Na, ppm for Cu, Zn, Mn, Fe, B. Available for BINE leaf analysis results based on reference 258/DAUN/LAB-SMARTRI/IV/2013 dated 18 April 2013 to 12 sample routine inspection, fe and Cl among others: KA, N, P, K, Mg, Ca, Mn, B , Zn, Cu, Cl, Fe, Na.

LWSE : There is the results of analysis of soil samples dated August 27, 2006 for a sampleof 18 samples for the parameters pH, C, N, P and K, Mg, Pbray1, CEC.

There are the results from the leaf analysis Smarti on April 18, 2013 under reference 260/DAUN/LAB-SMARTRI/IV/2013 for 17 samples of mineral soil-sand routine with parameters (N, P, K, Mg, Ca, B, Cu), Fe and Fe, Cl.

Fort those 3 analysis used as basis for consideration in determining fertilizer recommendations. Available documents and the actual application of fertilizer recommendations SMT 1-2013 to BINE and LWSE.


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The company has been well documented throughout the operational activities of plantation, such as:

Legume crops: LCC companies use Pueraria javanica types and Calopogonium muconoides.

There is no wastewater applications in LWSE, but in BINE and has been carefully monitored.

Recapitulation of EFB application for LWSE & BINE, which identifies itself to the plantation area of application and dose determination, refers to the MCAR 2012.

There are examples of documents for EFB application data for LWSE, for example: Block Y17 covering an area of 11.58 Ha, on July as much as 4.2 ha, August 5 ha.

Fertilization Realization Report semester 1 in 2013 LWSE and BINE where the entire program has been completed.

Spraying Report of LWSE & BINE until September 2013.


4.3 Practices minimize and control erosion and degradation of soils.

Soil maps is available in the form of Semi Map Details for PT. BPL and PT. MPLWI made under semi-detailed soil survey in 2002 and the review on June 21 to 27, 2005. The maps contain sufficient information on the soil map units that exist in the estate and other information, namely: soil map unit code, classification of soil, topography, rocks, texture, solum depth, effective depth, land suitability classes, the limiting factor, as well as their broad-each type of soil map units.

As a guide to planting on slopes> 15%, there is an explanation in SOP Clearing (point 5.9) which describes the actions of management and conservation of land, namely through: monitoring and evaluation of the rate of erosion, contour midrib preparation, manufacture rorak were cut from cr and MR into blocks to control storm water runoff, planting vetiver grass and bamboo. In addition, the available procedures for monitoring the rate of erosion in the SOP with SOP PTBPL-BNE/SOP/29 code Erosion Measurement, dated June 1, 2012, in which to discuss about: measurement methods, measurement, design and location of erosion measurement stakes.

SOP concerning riparian zone management, Number SOP/SPO/SMART/LH-06 concerning Protection of Riparian Zone. Several protection steps are:

No new plantation development or replanting within riparian area (50 meters left and right side of river for small river or 100 meters for big river).

No land utilization in riparian area

Installment of sign board in riparian area for public awareness

Boundary road between planted area and protected area.

Trees enrichment in high erosion risk area

SOP of road maintenance refers to SOP no. PTBPL-BINE/SOP/10 about Road Maintenance dated June 1, 2012. Road maintenance program done routinely consist of: a regular program made based on estate chariman’s planning and insidental program that made as necessary if there is a roadwork. Period 2006 - 2018 which shows the allocation of road maintenance in each estate and division. In 2013 recurrence of road maintenance (ecer) for 30% of the estate area and implied for 40% of the estate area. As an elaboration of the general plan, the road maintenance plan has been drawn up in 2013 to BINE and LWSE that compiled by estate manager along with the assistant and senior assistant.

There is no peat soil in PT MPLWI

The company also has marginal land and other critical land management strategy described in MCAR, as: area with topography of 15-40% managed through making conservation terrace, contour terraces, hooves with rorak, conservation planting such as vetiver grass and beans. The areas with impeded drainage are managed through the production or drainage ditch, while the sandy area applied with EFB.


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

To protect rivers, ground water, and lebung swamp around the estate area, the company implements protective measures such as: 1) the establishment of the riparian protection procedures, 2) the establishment of a policy to not clear riparian area as wide 50-150 meters at the time of land clearing or new planting, 3) management policies for the protection of river banks by stopping the use of chemicals in river banks, manure application manually, erosion control planting in landslides prone


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area, river bank protection socialization and setting up the warnings restrictions river banks, 4) Setting swamp lebung as conservation areas (HCV), 5) the river water quality monitoring on a regular basis (every six months), 6) Monitoring of ground water quality on a regular basis (once in a year), 7) Making WWTP to manage waste and land application of application to avoid disposal of liquid waste to the water bodies.

Source water protection record is availabel as in the form of : 1 ) records of setting up riparian boundary , 2 ) record of setting up spray boundary in blue line, 3 ) record of maintenance of riparian through grass vertiver , 4 ) recording of vertiver grass plant nursery , 5 ) record of riparian conservation area noticeboard , 6 ) record of HCV and riparian area monitoring 7 ) record of periodically river water quality monitoring every six months with the result shows all the parameters are in accordance with the provisions of governmental quality standards , 8 ) records of management and monitoring wastewater , 9 ) record of groundwater quality monitoring/ wells around the housing that used as a source of clean water , where ground water testing results showed that the total of coliform parameter above threshold standards by the Ministry of Health Regulation No. 416 year 1990. The high number is an indication of coliform contamination / dangka groundwater contamination by organic / domestic waste due to inadequate waste disposal. However, the company has not indicated the recording and evaluation of remedial action to ensure there is no contamination of groundwater contaminants, including microbiological contaminants such as coliform. Thus there is a non conformity between groundwater management practices with the applicable standards. NC No. 2013.05.

The company also has a recording of monitoring BOD liquid waste result that is done every month and reported to the relevant agencies every three months. Monitoring results showed all parameters in accordance with the quality standards for land application of wastewater (BOD <5.000).

Record of water uses for palm oil processing that is made based on water usage daily reports at the estate. Records of the use of water for the last three months shows in general, the ratio of water use per tonne of FFB by POM still below its budget in the amount of 1.16 m3/ton TBS.

Minor 4.4.1 Status: Non Compliance

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

The company already has a program and implement it, Integrated Pest Management (IPM) for the whole estate, for example LWSE & BINE, as follows:

Mice census program planned every month.

Program detection of Leave Worms (Palm Oil leaves eaters for caterpillars and bagworms) implementation of activities planned each harvest through observation of worms on frond.

Tyto Alba Monitoring Program planed each month.

Host Plant Care Work Program Care and planting / interpolation Host Plants planned every month.

Census ganoderma Program once in a year IPM Training Attendance List document is available to census IPM census methods dated June 22, 2013 in Long House BINE, which was attended by 12 participants from PT Maskapai Leidong West and PT BPL. There is also an attendence list of participants on March 7, 2011 in Long house BINE about fertilization and IPM training that was attended by 24 participants. In addition, there is also record of Pesticide Use Training Limited held on May 19, 2011 at the Long house BPRE in cooperate with limited pesticide manufacturers and Pesticides Committee and attended by 72 participants from BPL PT and PT MPLWI. Based on field interview with IPM foreman/supervisor and observation on barn owl boxes at Block X14 Division 1 LWSE has known that he was understand about an IPM program which has commenced. The barn owl box was filled by a bird. Meanwhile, the company was planted and upkeep of beneficial plants with species of Turnera subulata and Antigonon leptopus. There are monitoring pest and plant diseases control activities documents for each estate, eg for BINE as follows :

Detection of leaf worm (UPDKS) Data at BINE Estate , for example : Block N30 ( 13.76 Ha ) dated August 1, 2012 with the technical direction of the north - western entrance no way pioneered 5 , 10 . 15, 20, 25, 30, 35 left right line position, results : no attack.

Biological Control Agency Care Data (Weeds Useful) Turnera subulata and Antigonon leptosus the period January-


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December 2013: Antigonon leptosus of 19.394 meters; Turnera subulata 37 254 meters.

Cutouts Mouse Census Document of 2013 for BINE , where during the period January - September 2013 where the average attack rate is still below the threshold .

Available recapitulation census ganoderma attack program of BINE Estate in 2013 which also contains information on the principal amount of ganoderma attacked. The census results is being purpossed the management’s follow-up.

Owl Monitoring for period of August 2013 division 1-5 with barn owl boxes (gupon) number of 487 ( 1:10 ratio ha ) , damaged 69 , good 418 , 418 active , active 86 % , adults 91 , owlet in barn owl box 440, 332 owl eggs.

The company also has monitored the use of pesticides in the form of active ingredient per ton FFB, for example to BINE as follows:

Name of Product

Active Ingredients % Active

Ingredients

The Number of Application

(Liter atau Kg)

Total of Active Ingredients

FFB Production

(Ton) Pesticide Unit

Erkafuron Methyl metsulfuron 0.2 3.8 0.76 7,944 0.00000001915

Roll Up Gliphosate 0.41 111.25 45.61 7,944 0.00000114840

Rolixone Parakuat diclorida 0.42 74.37 31.23 7,944 0.00004325529

Starane Fluoroxypir 0.3 32.08 9.62 7,944 0.00000060577


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

The Company has a wholly Pesticides registered and authorized by the competent authority. There are also record of Pesticide Use Training Limited in 2013 which was held on May 19, 2011 at the Long house BPRE and was attended by 72 participants from BPRE and LWSE. There are Pesticide Use Reports Document in 2013 as follows:

LWSE: circle spraying realization and harvesting path for broadleaf weed and Pakisan control until September 2013 using Rollixone (Paraquat) of 137.73 liters on an area of 658.47 hectares, thus the use per hectare is 0.2092 liters / ha. Rotation of use once per year.

BINE: circle spraying realization and harvesting path for broadleaf weeds and woody control until September 2013 using Erkafuron (Methyl metsulfuron) of 25.98 liters on an area of 494.22 hectares, thus the use per hectare is 0.0524 liters / ha. Rotation uses twice per year.

Records of pesticide use Division Work Program describe several aplication for each chemis activity. Dose and type of pesticide refer to product labels and the testing results of done by Smartri forth in MCAR (Physical Standard Budget), for example:

LWSE: circle spraying realization and harvesting path for narrow-leaved weed control until September 2013 using a roll-up (glyphosate) of 35.85 liters on area of 313 hectares, thus the use per hectare is 0.1145 liters / ha. Rotation of use once per year.

BINE: circle spraying realization and harvesting path for broadleaf weeds and grasses control up to September 2013 using the roll-up (glyphosate) of 1326.75 liters in an area of 10140.70 hectares, making use per hectare is 0.1308 liters / ha. Rotation twice per year.

The Company does not undertake agrochemical waste disposal activities, but agrochemical waste management (waste of used pesticide containers, etc.) and submit these to the authorized collector. The company has had SOP of waste management document number: SOP/SPO/SMART/LH-09 which was ratified on July 1, 2010, contains about: the purpose, scope, references, and definitions of waste, such as: Hazardous waste from the rest an activity that contain hazardous and toxic materials. Based on letter No. B-6381/Dep.IV/LH/PDAL/05/2012 dated May 25, 2012 and Minutes of meetings with representatives of the Ministry of Environment (MoE) which states that the used pesticide containers can be washed so it does not contain Hazardous material properties.


ASSESSMENT REPORT


There are procedures governing the reuse of waste in the form of a Memorandum from RC Bangka Belitung Number 001/MEO-RC BABEL/XI/2012 dated 27 November 2012 regarding: the reuse of used pesticide containers measuring 20 liters as a water container to spray. Used waste pesticide containers measuring 20 liter is stored in a special barn (1 barn specifically for 1 estate). For the used pesticide containers measuring of 0.5 kg, the company has managed by handed overing to PT PRIMANRU JAYA. Certificate available from BLH (Environment Bodies) of Bangka Barat Distric that allowing Hazardous waste store in Estate storage for maximum 90 days, before being delivered to licensed TPS of Hazardous waste and licensed polling stations or returned to the producer.

The company has demonstrated paraquat usage data ranging from 2010 to August 2013 as follows: BINE: the use of paraquat year 2010 were 2,220 liters, in 2011 were 1,876 liters, in 2012 of 1,589 liters in 2013 (up to September 2013) is 511 liters.

LWSE: the use of paraquat in 2009 were 200.95 liters, in 2010 were 180.10 liters, in 2011 were 189.10 liters, 2012 were 162.74 liter and in 2013 (up to September 2013) is 137.73 liter.

The spraying workers sent for medical check up every six months. The spraying worker medical check up in the form of cholinesterase check up performed on 26 - 27 September 2013 by the Hyperkes Center of Bangka Belitung province. Based on the results of the examination, the spraying workers in a healthy stated with the normal limits of chemical levels in the blood. Based on interviewed with sprayer (Block P27/28 Division 2 Bukit Intan Estate) are in the normal condition, there are no disease from skin disorders or rashes, breathing difficulties or nail problems which are classical symptoms of toxic reactions.


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

The company has have OHS policy established on January 03, 2011 by the management chairman as the company's commitment to the OHS implementation, that is to comply with all OHS regulations, involve OHS to the work aspects, planning, developing, implying and monitoring the OHS program, providing healthy and safe workplace for all the workers (both direct and indirect workers, and also continually improving the best industrial OHS practise. The person in charge for occupational health and safety programs such as Guiding Committee Of Occupational Safety & Health formed in each unit Mill and Estate with the structure management such as the chairman, deputy chairman, secretary, deputy secretary, field evaluations, field supervision, field research, field extension, and health field. Guiding Committee Of Occupational Safety & Health was approved by the Labor Agency of Bangka Barat District. Guiding Committee Of Occupational Safety & Health has conducted regular meetings every month to discuss issues and reporting activities OHS, Guiding Committee Of Occupational Safety & Health regularly every 3 months for labor social service of Bangka Barat Distrct. Occupational accident insurance in the company in the form of Labour Social Assurance (Jamsostek). Overall the worker has been registered as a member of Jamsostek. There is evidence that Jamsostek payment in October 2013 had made on 15 November 2013. Periodic health check up for the high risk workers of the Mill and Estate conducted by the company’s doctors in cooperate with the Hyperkes Center of Bangka Belitung Islands on 26 to 27 September 2013. Type a medical examination audiometry for the workers work in noise area and Cholinesterase is for workers in chemicals area. The medical examination results shows , cholinesterase examintation in laboratory workers , WTP operators , spraying workers and a warehouse clerk at Mill and Estate shows the chemical levels in the blood within normal limits . But the result of audiometric examination indicates that there are workers who get hearing loss include 10 mill workers and 6 generator operators in estate. From the results, the doctor of the company recommends for further examination to an ENT specialist in Bhakti Timah Hospital in Bangka. Based on an interview with company doctor during field audit, in January 2014, the company was carried out of further medical check to the Ear Nose & Throat (ENT) specialist doctor at Bhakti Timah hospital for 10 mill employees and 6 generator operators which indicated of hearing impairment. As the test conclude that 3 of 16 employees was suffered impairment and the rest of 13 employees are normal. Corrective actions from the company are displacement position for generator operator


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become to water pump operator through Estate Manager decree No: 070/SK/BPL-BINE/III/2014 dated March 6, 2014 and also reported to Jamsostek (worker insurance) on March 4, 2014. Meanwhile, for the power house and boiler operator had been equipped with appropriate PPE (ear plug) as recommendation by the doctor. Besides, monitoring of PPE used and periodically awareness or training will applied tightly by the company. Risk analysis record is availabel in the form of Hazard Identification Risk Assessment and Determining Control associated with all the activities at the Mill and Estate. Preparation of documents created with the flow as follows: all of the activities and work processes in Mill Estate identified hazards and potential based on sources / events and the impacts,then determined level of risk and risk control as elimination, substitution, engineering, administrative, or use of PPE. OHS training programs has conducted and there is OHS training schedules in each unit and Mill Estate, a training record in the form of attendance list and news events, such as training and First Aid Emergency training in Mill Estate in September 2013 that delivered by company’s doctors with the the participants from physicians supervisor. The company already has a preparedness and emergency response procedures in the form of SOP of Emergency Response ( SOP/SMK3/SMART/LH-09 ) agreed by Div Head Envd & Sustainabilty on July 1, 2010 . The identified emergency such as: fire, explosion pollution , natural disasters , riots , demonstrations ,and occupational accidents . Generally, the SOP contains the definition of emergency response and the emergency response team, emergency response reporting flow, the duties and responsibilities of emergency response teams, planning and response actions when in emergency, and recovering from an emergency. As the implementation of the procedures, the company formed an emergency response structure, including the founder , chairman , executive director , secretary , general helpers , the head of the fire brigade, fire extinguisher group , the hidrant / brigade tank team, sand / mud team, fire blanket team, pole hook team, health team, safety team, refugee team , liaison teams, and evacuation team.

Based on field observations in Mill and Estate, the company has provided equipment of OHS and First Aid Emegency programs in the workplace, for example: PPE has been provided to all employees according to the hazards and risks of the job, such as a PPE boiler operator e.g. helmet, earplug/earmuff, masks, gloves, aprons, safety shoes.

First Aid Emergency is available at the Mill station, offices, public facilities of Mill and estate employees, and specialy for estate supervisors provide with First Aid Emergnecy bag. The operational workers in field and factory that designated as First Aid Emergency officers have been trained First Aid Emergency delivered by the company doctor.

The fire prevention equipment such as hydrant and fire extinguisher in the Mill, tank and tractor trailer fire engine equipped with a pump, hose and nozzle and fire extinguisher in Estate are ready to use with a monitoring tool checks every month.

Occupational Accident reportinf refers to SOP/SMK3/SMART/LH-10 agreed on July 1, 2010 by Div Head Envd & Sustainaibiltiy. Reporting using Accident Report form 1 x 24 hours (No. Doc: FP-01/SMK3/SOP-10) and Accident Investigation Reports from the Assistant (No. Doc: FP-02/SMK3/SOP-10). Based on statistical analysis of occupational accidents (FP 04/SMK3-SOP-10) from January to October 2013 there were 8 cases of occupational accidents with 75 days lost. Recording of occupational accidents has been well documented and reviewed periodically by the secretary of Guiding Committee Of Occupational Safety & Health and preventive action is available so that similar incidents are not recurrence.


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

The Company has an ongoing training program for staff and employees in accordance with their competence - each office, for example internal training programmed of emergency preparedness is programmed for staff (Mill Assistant), and Mill employees (operators, maintenance, and laboratory analyst), use of fire extinguisher training is programmed for staff (manager, head of administration, chief assisstant, division asisstant), employees (security unit, administration, workshop, harvesting workers, maintenance workers). Training records for each employee has been well documented, in the form of training records, for example Assistant of Estate OHS Expert training on 28 March to 8 April 2011. While training for contractors such as news events of safety inspection, OHS, labor regulation socialization to the contractor of PT Asindo Tech dated June 18, 2013.


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SPK local No. LWI-LWSM/SPKL/06/2013/005-Boiler Fixing. 1 Contractor's PT Asindo Tech which is located in Lampung with the work period of 16 to 26 June 2013. As evidence of companies using contractors who are trained, there is company profile of PT Asindo Tech stating that PT Asindo Tech is a steel fabrication and construction company that has been working on a lot of production processes machines and continues to develop engineering design, and involved in several projects for the design, fabrication, until commissioning. There is also business permit such as IMB (Building Construction Permit), trade business permit, and the tax as legal evidence of company.


PRINCIPLE #5 ENVIRONMENTAL RESPONSIBILITY AND CONSERVATION OF NATURAL RESOURCES AND BIODIVERSITY

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

There are environmental impact analysis documents available for PT. MPLWI and PT. BPL which has been endorsed by the local government in the form of: 1) Environmental Management Efforts / Environmental Monitoring Efforts document(UKL / UPL) of palm oil Mill and Estate of PT. MP LWI endrosed in 1995 and revised through the preparation of "Document Management Environment of PT. MP Leidong West Indonesia in 2011; 2) EIA documents of PT. Bumi Lestari Permai year 1996 which was approved by the local government. The two documents contain environmental impact assessment will be administered and monitored by the estate in the form of: River water quality degradation, erosion, noise, endangered species, plant pests, employment, and social unrest 1. The Company has periodically report the results of monitoring and environmental management in the form of RKL / RPL

to relevant agencies, as indicated by: RKL / RPL for PT. MPLWI ( LWS Estate and LW POM). There is receipt of RKL / RPL Semester I of PT MPLWI year 2013 reported to BPDLD of Bangka Barat District the and accepted by BPDLD staff of Bangka Barat Refency on July 30, 2013.

2. RKL / RPL. BPL (Estate BIN). There ia receipt of RKL / RPL Semester PT. BPL in 2013 was reported to BPDLD of Bangka Barat District accepted by BPDLD staff of Bangka Barat District on July 30, 2013.

The company revised the document management environment due production capacity changes of 30 tonnes FFB / hour, to 60 tonnes FFB/Hr. Revision of environmental management documents done for PT. MPLWI with DPLH preparation as described above.


5.2 The status of rare, threatened or endangered species and high conservation value habitats, if any, that exist in the plantation or that could be affected by plantation or mill management, shall be identified and their conservation taken into account in management plans and operations.

There is record of identification of protected, rare, or endangered species and high conservation value habitats in the report of Identification & Analysis of High Conservation Value Areas Presence of PT MP LEIDONG WEST INDONESIA Indonesia 2012 that was conducted by the assessment team that has been registered in the RSPO. There are no species with status of CR or EN in the estate of mill area. The area identified HCVs include HCV 1.1; 1.3; 4.1 and 6 with a total HCV area within the scope of the certification area of 311.31 Ha, 101.99 Ha is in PT MP LWI and 209.32 ha in PT BPL. Encountered a number of protected species such as: Bubulcus ibis, Halcyon smyrnensis, Ardea sumatrana, Elanus caeruleus, Ictinaetus malayensis, Felis bengalensis, Hystrix bracyura, Muntiacus muntjac, and Nepenthes mirabilis. To manage HCV and wildlife protected areas, ther is protection measures record through: 1) riparian protection policies width of 50-150 m (depending on the width of the river) . In these areas must be mounted notice board that the area should not be worked on and should be protected. 2 ) the prohibition policy to all staff and non- staff employees to capture , injure , maintaining , transporting , trading alive protected species , including storing , possessing, caring for , transporting and trading of dead protected animals. 3 ) Determination of management policies and monitoring of HCV according to SOP , no land clearing in the primary forest , no clearing of peat , although only for straightening the block or making the main road and road collection , 4 ) Protection of Rare and Endangered animals Policy, 5 ) Socialization of HCV to employees done every day at morning, while done to the people for at least once in a year . 6 ) installation of riparian boundary management , board warnings of HCV , the board ban on hunting


ASSESSMENT REPORT


Protection Step of HCV and rare animal are in compliance with the applicable statue: Kepress 32 year 1990 regarding the management of protected areas, and statue Number 5 year 1990 on Conservation of Natural Resources Conservation and ecosystems that is statue of rare species and protected animal.

The company has made socialization facilities through posters / warning, publications, and explanations to employees and the public about protected species and information of managing it as shown by the following records:

1. Documentation signboard in LWSE which includes 10 signboard posted October 6, 2012 for HCV 1, HCV 6, and warning board of hunting. Installation of signboard in BINE which includes 14 signboards that setted up on August 30, 2013 in the form of HCV warnings, no hunting, protected animals, and posters.

2. Socialization

HCV public consultation on 11 May 2012 to 6 villages around the estate which was attended by about 41 participants; internal Socialization in division 1 LWSE on June 27, 2013 was attended by 20 employees; internal Socialization in division 3 BINE on 29 May, 2013,on May 20, May 27 2013 in the Division 1 BINE, May 16, 2013 in Division 2 BINE, May 23, 2013 in Division 4 BINE; Installation of leaflets on Tuesday, October 1, 2013 in Terentang village.

Besides that, there is a special officer of HCV in every estate designated / appointed by the estate manager. All officers have been trained through a internal training program, the training is shown by evidence of implementation (list of attendees and training materials) on May 2, 2013 by trainer who have received formal HCV training on 6-7 May 2011 which was attended by 26 participants from the company's employees.


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

The Company has identified the sources of waste and pollution in the estate and mill that is in the document of "List and Evaluation of Environmental Aspects". Environmental documents prepared by the PIC with the approval of the head of each unit. The document outlines the types of activities in the estate/ plant, environment-related aspects; types of waste generated; potential impact; aspect values, and action control / management plan.

Besides the previous documents, the company also has a waste management plan to reduce the impact to the environment in the form of documents of Program and Actualization Program waste and hazardous waste control in POM and estate. The plan described in the waste management plan such as: liquid waste used for land application, Hazardous waste is collected by licensed collectors, separating organic and inorganik waste for domestic solid waste and dispossed to hazardous waste temporary warehouse, used goods will be collected at a particular place to be sold to a particular collectors . These plan documents are reviewed regularly every 6 months.

Hazardous waste management plan is also included in the document of "Program and Actualization of waste and Hazardous waste control ". As an explanation of available SOP hazardous waste management, states that Hazardous waste is managed according to the rules that apply, they are: collected and stored temporarily in licensed hazardous waste temporary warehouse, recorded in the balance sheet of hazardous waste, and submitted to a licensed hazardous waste collector.

The company already has one licensesd hazardous waste landfill that is placed in the mill. Hazardous waste temporary warehouse obtained permit from the head district of Bangka Barat on June 2012. Hazardous waste produced in the estate temporary stored in the estate no more than 3 months before being sent to the hazardous waste temporary warehouse in the mill, then it will be sent by a third party who has permission. Hazardous waste storage in the estate for a maximum of 3 months was approved by BAPEDAL (Environment Impact Control Agency) of Bangka Barat through letter No. 660/283/1.08.02/2013 about Hazardous waste Management. With the approval of hazardous waste storage in the estate of

PT. BPL and PT. MPLWI for a maximum of three months as mentioned above, the potential non conformity CAR.2013.04. stated CLOSED.

For hazardous waste disposal, the company has been working with a licensed third party, PT. Primanru Jaya. The latest shipment had been made on November 20, 2013 as indicated by the shipping manifest. For the disposal of infectious medical waste, the company has been working with RS Arsani Sungailiat as the agreement dated July 20, 2013. The latest clinical hazardous waste delivery to RS Arsani Sungailiat held on October 9, 2013.


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For the used agrochemical packaging waste, the company does an optimization (reuse) after washing. The optimization activities have been approved by the Ministry of Environment of Indonesia as shown by the minutes of the meeting on April 2012 about waste management of used agrochemicals packaging and letter No.. B-5301/Dep. IV/LH/PDAL/05/2012 dated May 25, 2012 from the Ministry of Environment of Indonesia concerning the response to the activities of rinsing (washing) of used pesticide packaging addressed to the Chairman of PT. Rolimex Kimia Nusamas as a subsidiary of PT. SMART, Tbk. The core of the response from the Ministry of Environment is in optimization effort of the used of pesticide by PT. SMART, Tbk and extended producer responsibility (EPR) effort by PT. Rolimex Kimia Nusamas to refill, so PT. SMART, Tbk and PT. Rolimex Kimia Nusamas asked to deliver it - the following things:

1. Data of location , the coordinates and the optimization area of the use of pesticides ;

2. Optimizing process of pesticides use thus the packaging does not contain hazardous waste (in units of ppm / ppb) ;

3. Process of Reusing water as the result of the optimization thus nothing is wasted to the environment (zero waste) ;

4. Document of packaging Receiving as the results for the optimization process to do the refill;

5. Analysis result as a measure that the washing of used packaging is clean (parameters and levels) ;

6. Data of usage plan of used pesticide package washing result results and its life cycle;

7. In order to control, PT. Smart TBK and PT. Rolimex expected to report those activities to the Ministry of Environment at - least every 6 months. Reporting includes: time , number of refill packs, the results of the optimization of water use and others. The document was signed by the Deputy Management of Hazardous Waste and Materia then copied to the Minister of Environment of Indonesia (as the report ) and the Head of Environment Department of PT SMART Tbk .

As a form of compliance, there is an evidence of submission of the report submitted to the Ministry of Environment dated 27 November 2013.

To monitoring and analysing the waste, there is record of the monitoring result of wastewater using periodically measurement of discharge and effluent BOD. Wastewater discharge was measured every day while the wastewater quality is monitored every month. The total of land application of wastewater for July: 13,846 m3, August: 10,573 m3, September: 14,971 m3. Wastewater BOD values comply with all quality standards.

Hazardous waste monitoring is done through recording it in the logbook of hazardous waste in hazardous waste temporary warehouse and making of hazardus waste balance periodically reported to the authorities. Examination of sample of the balance hazardouse waste documents for September 2013 shows all the waste has been recorded well. Solid waste in the form of fiber and shells are used as fuel for boilers and EFB are applied in the estate also has to be carefully monitored, as shown by the records of solid waste at the mill were reported to the government each semester.


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

Renewable energy used by the company is "fiber" which is a waste of FFB processing. Combustion fiber is used to heat water vessel (boiler) that is used to drive turBINEs and generate electricity. To monitor the use of renewable energy, documentation is available for monitoring the use of fiber and the analysing of the efficiency in the form of fiber usage data-tabulation for boiler fuel in 2013. According to the record, until October 2013, the use of fiber is 18,814.56 tons. Based on the calculation of the energy result, the use of fiber for boiler fuel equivalent with the energy of 329,626kkal / ton FFB assuming constant energy per kg fiber of 2,637 Kcal.

Examination also has the use of fossil fuels monitoring recording and the analysis of its efficiency, to use in the mill and estate. For factory, data of budget and actual diesel usage data are available in leidong west mill (LWSM) months from January to October 2013. In Mills, Fossil fuels used for vehicles, generators, and heavy equipment such as wheel loaders and dump trucks. The total usage of diesel until October 2013 was 123,666 liters, or an average of 12,366 liters per month. Given the use of renewable energy in the form of plant fiber, the company has conducted an analysis of use renewable energy efficiency to replace fossil energy. The amount of solar useage efficiency of renewable energy for the period from January to October is 38,376 liters of diesel, or an average of 3,837 liters per month.

For use in the estate, there is usage record of diesel in estate as shown by the records in January to December 2013. The total of diesel usage in 2013 to October in BINE estate is about 25,820 liters with an average of 2,580 liters per month (1


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division), while in LWSE to use of solar in 2013 was 255,060.5 liters or 25,506 liters per month (for 5 divisions). For the analysing of diesel usage in the estate, the company has calculated the average diesel usage per tonne of FFB during the year of 2013 is equal to 3.31 liters per tonne of FFB.


5.5 Use of fire for waste disposal and for preparing land for replanting is avoided except in specific situations, as identified in the ASEAN guidelines or other regional best practice.

No replanting activities in PT MPLWI and PT BPL until the assessment audit conducted. But the company has a commitment to not burn on the land clearing preparation either for planting or replanting. This is manifested in the form of SOP of new land clearing (SOP / SMART / MCAR / IV / TA-PLB) contained in the Management Committee Agronomy and Research (MCAR). This SOP aims to prepare new land clearing for palm oil cultivation using principles without fuel (zero burning) in accordance with the technical agronomy. SOP of land Fire Management (SOP/NP/SMART/XI/LH002) approved by Div Head SMARTRI on July 01, 2010. These procedures includes: the formation of firefighter team and the training, and the procedures of handling fire in case the of fire; ranging from the preparation, equipment, and fighting techniques. As a form of implementation of the company procedures simulates the fires on October 29, 2013, located in Block N34 BINE Division 1, with Emergency Response Team participants of Mill and Estate, PIC SPO, RC / PC, Manager, aides staff, security guards, nurses, and employees. Based on field observations in LWSE and BINE, there are a firefighting post at Estate with the facilities such as fire extinguishers, extinguisher tractor trailer equipped with pumps and hoses, and other equipment such as gaff hook, fire clubs, bags, helmets, knapsack, and all the equipment in a condition ready for use.


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

Examination of available documents show that there has been the identification of pollution sources and emission at mills in the form of: 1. Environmental document in the form of Management Environment Document (DPLH) of palm oil mills of PT. MP Leidong

West Indonesia, compiled in 2011. 2. Register and evaluation of environmental aspects in POM of LWSM made by the PIC of environment and known by the

Mill Manager on January 5, 2013. The document lists the sources of greenhouse gas emissions from mill’ s activities such as: emissions of greenhouse gases as the result of combustion in boilers and generators, greenhouse gas emissions from transportation and heavy equipment, noise from the cooking chamber, wastewater from palm oil processing, waste spills from various activities such as laundry factory floor, door molten stew and steam pressure; spilled motor oil, etc.

In accordance with the requests of environmental documents, the company has demonstrated of emissions quality monitoring record from palm oil mill periodically every 6 months by the Environmental Laboratory of UPTB Province Governer Environment Agency (accredited). There are reports of the the emissions quality monitoring result in the document of RKL / RPL semester 1 Year 2013 PT MPLWI:

Ambient air quality measurement date on June 9, 2013 which is conducted at two points outside the mill with paramteter: temperature, humidity, SO2, CO, NO2, TSP, noise. The measurement results showed all the parameters in accordance with the applicable standards in the PP. 41 of 1999.

Measurement of emissions quality on June 10, 2013 for boilers and generators with parameters: particulate, SO2, NO2, HCL, Cl2, NH3, HF, particulates, CO2, CO, and opacity. The measurement results showed all the parameters in accordance with the applicable standards in the Regulation of Environmental Ministry Number 07 of 2007 and Regulation of Environmental Ministry Number LH. 21 of 2008 Lamp. IV A There has been available, efforts and plans record to reduce pollution and emissions, such as in the form of: (1) List and evaluation of environmental aspects in the mill and in the estate which includes handling of pollution and emissions, (2) Records of the implementation of routine maintenance of equipment and machines such emissions generators and boilers, (3). Records of the use of renewable energy to replace fossil energy as described in 5.4.1 minor indicator (4) Records of the


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implementation of land application as an effort to reduce pollution in the waterbodies as described in indicator 5.6.2 .. POME has been managed well. POME identification is available in the enviromental document (EIA and Environmental Aspect) that identifies the source of wastewater from milling operations. POME management methodology listed in: Waste Management SOP Number SOP/SPO/SMART/LH-09 that explains the wastewater as the result of processed FFB fully utilized for plantation activities as an organic liquid fertilizer (land application) after processing in the WWTP pond to meet the quality requirement as standards appropriate regulations. To manage waste there is WWTP facility consists of an 8 WWTP pools (1 stand-by) that bertanggul with 2 buffer pools were used as overflow wastewater anticipation and waste spills from an end pool(at the location of the pump). The total capacity of the WWTP pool is 8,0000 m3. WWTP ponds charging system is the multi-feeding system that is distributing the waste water from the sludge pit to the entire pool of existing waste (7 pools) in parallel and BOD decrease by relying on the retention time. WWTP is also equipped with a pump house facilities equipped digital flowmeter, rest house for WWTP personnel, and signboard.

POME has been well monitored through daily monitoring of wastewater discharge, monthly monitoring of wastewater quality through testing by an accredited lab, as well as 6-month monitoring of monitoring wells around the WWTP and The LA as presented in the document of RKL / RPL sent to the relevant agencie

For land application, there is land application permit from head district of Bangka Barat Number 188.45/283/1.08.02/2013 about the extension permit of industrial wastewater Palm Oil Industry utilization for applications on land of the palm oil plantation in PT. MPLWI dated May 23, 2013. The validity of license is for 2 years from the date of enactment. The permitted land area of 576 hectares located in Terentang village,Kelapa Sub District, Bangka Barat District.


PRINCIPLE #6 RESPONSIBLE CONSIDERATION OF EMPLOYEES AND OF INDIVIDUALS AND COMMUNITIES AFFECTED BY GROWERS AND MILLS

6.1 Aspects of plantation and mill management, including replanting, that have social impacts are identified in a participatory way, and plans to mitigate the negative impacts and promote the positive ones are made, implemented and monitored, to demonstrate the continuous improvement.

Implementation of environmental and social impact assessment is carried out through two studies: (1) the environmental impact study is in the form of DPL for PT MP LEIDONG WEST INDONESIA and Environmental Impact Assessment (EIA) for PT. BPL. (2) Social Impact Study (SIA) conducted by an internal team of PT. BPL and LWSE in November 2012. Positive social impacts identified eleven impacts: reducing unemployment, welfare of employees, gender equity, improved economic opportunities and rural economic development, mobilization activities and other sources of livelihood, the smoothness of worship, increased awareness of the importance of education, social assistance. Negative social impacts: social unrest due to poor communication links and river water pollution due to mud flows that enter the river at the time of the construction of the bridge.

Community participation in the formulation of management plans and monitoring the impact (document SIA) indicated by the absence of public consultation dated May 11, 2012 which was attended by people from the Terentang village, Pangkal Beras Village, Jebus Village, Ranggi Village, Berang Village, Plantation Agency, Office, representatives of military command, police station, Head of Sub-district, as well as deputy of the company. During the execution of the study, there is evidence of gathering people's aspirations through interviews and questionnaires involving the community, as shown by the evidence of the study respondents list of 7 villages in the company (about 105 selected respondents) and interviews / questionnaires used in the study. Monitoring of environmental impacts as a follow-up of SIA scheduled glorified in December of 2013.

As described in 5.1.1 Major indicators. The company has adjusted / revised documents to respond a change in regulatory requirements. In early plantations activity, the company has had a UKL / UPL for Palm Oil Plantation and Mill of PT. MP LWI in Jebus Sub distric, Bangka Distric, South Sumatera Province in 1995. Related to the issuance of the Minister of Environment Regulation Number 14 year 2010 concerning the environmental documents for a business or activity that has had a business license and or activities but does not have the environmental document which PT. MP Leidong West Indonesia has made the construction of the POM since 2000 with a building area of 11, 467 hectares, PT. MP Leidong West Indonesia are required to undertake the preparation of the "Document Management Environment" or DPLH

As a form of the environmental impact management and monitoring implementation, the company has prepared a report on


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environmental management and monitoring through regular and scheduled RKL-RPL documents are sent periodically to the government as represented in the indicators described in 5.1.2. In accordance with the environmental documents, environmental and social components that need to be managed are: air quality and noise, water quality and waste water, aquatic biota, public health, and public perception. However, RKLRPL reports are compiled does not show / include evidence of community involvement in the the implementation of management and monitoring social environment impact. Thus there is a mismatch between the RKL-RPL reporting standards with the practice runs. NC No.2013.06.

Minor 6.1.3 Status: Non Compliance

6.2 There are open and transparent methods for communication and consultation between growers and/or millers, local communities and other affected or interested parties.

The company already has a SOP of Communication and Consultation (No. Doc: SOP/NP/SMART/XIV/MCAR003), dated July 1, 2010. In the consultation and communication procedures include: External and Internal.

External communication includes stakeholders: communities around the estate, government agencies, labour unions, NGOs, partners, etc. Media in communication can be through incidental meetings or suggestion box. The entire communication is written in the Communications and Consultation book.

Communication and Consultation Book record includes the Inbox (Letter Number, Date In, Sender, Subject, and Internal Process) and Response (Letter Number, Date, of Out Letters, Addressed, Subject, and Status). The whole Aspirations articulated by society has always responded quickly by the leadership of the management unit (Estate Manager). Based on information from villagers and Terentang village and Berang Village, aspiration which was delivered to the company uses a mechanism that is specified using a known proposal by the Village. PT MPLWI has stakeholder list consists of: Government Agencies / Statutory Bodies (12 agencies); Village Head / Head of Villages (8 Village), Community Leaders / Community Leaders or Prominent (5 persons), Organization of Workers / Workers Organization (5 people) , Local Contractors (3) and NGOs (2 institutions). Officer in charge of communication and consultation with the public is Estate Manager each management unit (garden).


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

An open system, which is accepted by all affected parties, to receive complaints and resolve disputes effectively, in time and correctly specified in the Technical Guidelines for Preparation of Land (Palm Oil Plant) Chapter XII of Handling Complaints and dissatisfaction (Document Number : SOP/NP/SMART/XII/MCAR001 dated July 1, 2010 consists of Handling Internal and external complaints and also to the female workers. Responses to the complaint and dissatisfaction are given no later than 1 month after the issue received.

The entire recording and handling complaints related / objection recorded in the Monitoring Form of Handling Complaints and dissatisfaction. In the form consists of: Complaints (Date, Location, Name, Contacts Number, Problems, and Registry) and response (Date, Action, Current Status, PIC) and Target Completion.

For LWSE and BINE during the years 2012-2013 there were no complaints. As for LWSM there are complaints from employees (example: June 4, 2013) related to improved sanitation facilities housing. Responses made within 6 days.


6.4 Any negotiations concerning compensation for loss of legal or customary rights are dealt with through a documented system that enables indigenous peoples, local communities and other stakeholders to express their views through their own representative institutions.

Identification procedures, calculation and compensation for loss of legal rights and traditional rights by involving community representatives and related agencies described in land conflict resolution mechanisms (SOP/SPO/SMART/LH-04) dated July 1, 2010 that the completion of steps to follow several steps and the parties involved. Records of identification, negotiation and payment for parties that receive compensation for cultivated land acquisition at the beginning of the community estate development, where as many as 146 owners of land (105.23 ha) in the Berang village and


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190 owners of land (363.78 ha) at Tumbak Petar Village has been replaced loss since the year 1995 to 1999. Thus NC. 2013.03 stated CLOSED.


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

Wage system of the company created by decree of the Bangka Belitung Governor Number: 188.4472/TK.T/2012 the determination of Sectoral Minimum Wage (UMSK) in 2013 amounted to Rp. 1,736 million, -. Based on the observation recapitulation documents and interviews with employees wages and Mill Estate, note that the wage received by workers in accordance with the provisions and comply Sectoral Minimum Wage (UMSK) in 2013. The Company has the 2011-2013 Collective Bargaining Agreement between PT MPWLI & PT BPL with SPPP PUK SPSI PT-PT BPL-PT MPLWI. CLA has been registered and has received approval from the Office Dinsosnakertrans Bangka Barat Regency on March 15, 2011. Based on observations in the field of estate and mill’s employees housing, the company has provided a means of shelter, education , clean water , health and other public facilities to its workers , for example : :

Housing of the employees with permanent buildings consisting of 2 bedrooms, living room, fitted kitchen and bathroom with WC. Illumination comes from generators.

Education facilities, the company provides kindergarten and elementary school located in BINE as fomal education as well as informal education Smart House is a program of United Indonesia CaBINEt Wives Solidarity Volume II, chaired by First Lady Ani Yudhoyono ( First Lady ) and in cooperation with PT SMART Tbk (June 7, 2012 . Additionally the company provides a shuttle bus to the school, which is located far away from the school.

Source of water supply comes from wells that have been conducted water quality testing by PT Unilab Perdana Environmental Laboratory (accredited by KAN No. . LP - 195 - IDN) . However, based on the results of water testing in the West Leidong Selatan Estate cottage, there are Coliform parameters that have not been appropriate with water quality standards (Minister Regulation of 416 in 1990), so that the water supply is not adequate. NC No. 2013.07

Health facilities , the company provides a clinic located in BINE and clinics located in LWSE aides and medical personnel ( doctors and nurses companies )

Public facilities such as places of worship such as mosques and churches, sports facilities company providing soccer field, volleyball, tennis and badminton. Also available as a meeting hall employees and posyandu activities.

There are minutes of heavy equipment lease agreement between BINE and CV Bangka Jasa with agreement number BINE/SPK/Jun – 12/002 – SWAB dated June 12, 2012. Article 5 Paragraph 11 explains that the second party (CV. Bangka Jasa) states that it is able to meet occupational health and safety throughout its workforce and labor required to complete the second part of PPE in accordance with applicable regulations.

Minor 6.5.1 Status: Ketidaksesuaian lihat NC No. 2013.07

6.6 The employer respects the right of all personnel to form and join trade unions of their choice and to bargain collectively. Where the right to freedom of association and collective bargaining are restricted under law, the employer facilitates parallel means of independent and free association and bargaining for all such personnel.

There is Company policies related to freedom of association as follows: Circular letter from CeO2 to VPA, VPM. RC, PC, HR Ops Head number 094/CEO2-SE/12/2010 dated December 14, 2010 concerning Freedom of Association in the organization of workers / laborers with reference to Act No. 21 of 2000 concerning the union that the company respects the freedom of workers to organize (Theo Biao Leng). There are documents of Collective Labour Agreement (CLA) 2011-2013 between PT LWI & PT BPL with SPPP PUK SPSI PT BPL-PT LWI, set in Muntok, March 15, 2011 where the Section III discusses: Recognition of the Rights of the Company and the Unions. In Article 46 of Chapter XIII stated that CLA is valid for 2 years and The validity period can be extended up to 1 year later. The CLA has the scope, include staff workers to Daily SKU. In the process of recruitment of BHL employees, there is written agreement that includes explaining the employment about the agreement for BHL. The Federation of Agriculture and Plantation for PT MPLWI and PT BPL Branch Board has formed. Available:


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Examples treatise bipartite negotiations between the company and the PUK SPSI PT BPL & PT LWI dated June 29, 2012 at the Municipal Office PT BPL in Pangkal Pinang, Bangka Province with the discussion of the rice money workers. The meeting was attended by: 5 representatives of the management company (Mgr BPRE, MGR BINE, Mgr BPRM, D & L PGO) and 7 representatives of Unions (Acting Chairman of PUK SPSI, Secretary of the PUK, Deputy chairman of PUK SPSI), 1 representative of the DPD KSPSI of Babel provintion


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

Circular letter is available from the HR Director to all Head Unit number 002/SE-HRDV/03/09 dated March 31, 2009 regarding the minimum age limit that in connection with the implementation of the law No. 13 of 2003 concerning employment of article 68 concerning prohibition employs it with this kid submitted that the recruitment process set the minimum age is 18 years (Michael Ardiyanti). Based on information from the staff explained that the recruitment process requires workers to be above the age of 18 years. Recapt is available for list of workers in August 2013, which contained information on the age of workers for PT MPLWI, as follows:

LWI Mill: 136 workers and 24 PKWT workers, and no workers under 18 years of age.

BINE: 123 BHL (temporary workers) there are not found of workers under 18 years old.

LWSE: 494 workers where there are not found of workers under 18 years old. During an interview and field observation with workers (harvester, POM workers and housing) it was known that entire workers has been understand related to minimum age requirements is 18 years old. The percentage of local workers from the total workers are about 79.76%.


6.8 Any form of discrimination based on race, caste, national origin, religion, disability, gender, sexual orientation, union membership, political affiliation, or age, is prohibited.

There are also Circular Letter from the CEO to all unit leaders (CC: VPA, VOM, RC, PC, HR Ops Head) on the Implementation of Industrial Relations Unit, with the numbers: 096/CEO2-SE/12/2010, dated December 14, 2010 , the whole head unit, which is the point that in order to realize harmonious industrial relations, dynamic and equitable, so that the work carried out in each operational unit, for the realization of industrial relations without distinction of race, religion, race and sex in any kind of field work. Based on the review of the employment documents of each estate, in the employees Biodata registration documents that describe employees come from various tribes and regions.


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

The Company has a policy to prevent sexual harassment and all forms of violence against women and to protect their reproductive rights, such as:

Circular Letter of CEO2 to all unit leaders (CC: VPA, VPM, RC, HR Ops Head) number 003/CEO2-SE/01/2011 dated January 10, 2011 issue of the socialization of sexual harassment which states that in order to apply the mandate of the law regarding sexual harassment, which states that all unit leaders and their staffs to be able to disseminate to all employees regarding the prevention and handling of sexual harassment.

Circular letter of CeO2 dated December 14, 2010 to all unit leaders (CC: VPA, VPM, Div Head FA2, RC, PC, HR Ops Head, Div Head OIA) number 095/CE02-SE/12/2010 regarding licensing menstrual periods that: under the law Number. 13 of 2013 article 81 declare that the workers / laborers are women in the menstrual period and the pain felt by companies and physician examination or paramedic and deliver to the employer is not obliged to work on the first day and the second at the time of menstruation so that each unit to enforce these conditions effectively.

The policy has been implemented in all units of the company through outreach to workers, for example : 1. Socialization document of handling sexual harassment is available dated June 7, 2013 at the IHC Housing POM of


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Leidong West which was attended by 30 participants. 2. There are minutes of socialization handling sexual harassment, permit leave menstrual and pregnant dated June 7,

2012 was attended by 35 participants in the residential neighborhood health center Leidong West Mill. 3. Results of Socialization Sex Harrasment Minutes dated 7 April 2011 to BINE located in Employess Center in Duren Hall

cottage which was attended by 138 participants.

SOP Gender Committee SOP is available (SOP/SPO/SMART/LH-15 dated July 1, 2010 by the Division of Head Envd & Sustainability) at which point 12 of the job step to discuss the handling of complaints of sexual harassment. The company also has a SOP of submission of complaints and grievances of workers in the Preparation of Technical Guidelines Lahan/SOP/NP/SMART/XII/MCAR001 (Orange Book) which in Chapter 12 discusses the external and internal complaints, including complaints regarding special for female workers. Based on the procedure outlined that:

The unit facilitates the formation of associations of women workers.

Women workers can make complaints and grievances related to specific issues concerning women bride, individually or through associations of women workers to the head unit. Complaint handling mechanisms are described and recorded in the form of monitoring the handling of complaints (F/SMART/MCAR/01) and refers to the procedures for handling complaints and dissatisfaction.

Complaints received verified by EM to determine the facts in the field.

Mecanism of further settlement refers to the internal handling of complaints..


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

POM Leidong West does not received FFB from outside suppliers or farmers, while PT MP LWI has no partnership Plasma farmers. Therefore, pricing is managed by an internal FFB and follow the prices set by the Estates Department. Update results of Pricing of Palm Oil of FFB Kep. Bangka Belitung on November 2013. As letter number: 525/4587/DPPP-BUN/XI/2013 dated 19 November 2013, on the Determination Results of Meeting Notices Index "K" and the Price of Oil Palm FFB November 2013 period.

The company also has cooperation with related local contractors which became from surrounding villages, in example: development of LWSE housing. This cooperation can be proven by agreement letter (i.e. SPK No: 036/LWSE/05/2011-BGN between company and CV Berlian Utama as a contractor). In the agreement was described of payment mechanism which had been deal both of them. Payment slip is available for sampling on dated July 12th, 2013.


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

A contribution of plantation and mill in regional development through payment of taxes and levies as well as the realization of a CD / CSR involving the surrounding community. Examples of tax payment obligations and charges include:

1. Land and Building Tax (PBB) of PT Bumi Lestari Permai (BINE and BMSE): SPPT in 2012 (July 4, 2012), the Tax Payment issued on August 29, 2012 and paid through Bank Rakyat Indonesia on 3 September 2012.

2. Land and Building Tax (PBB) of PT MP LEIDONG WEST INDONESIA Indonesia (LWSE and LWUE): the Tax Payment issued on 18 September 2012 and has paid the appropriate State Receipt dated 20 September 2012.

3. Tax levy for Land Surface Water of PT MPLWI (LWSE, LWUE) according DISPENDA letter number: 973/95/UPTD.BABAR/DPPKAD/2013 dated June 12, 2013, was paid every month, June 11, 2013 (Levy in May), July 12 2013 (levy in June), August 15, 2013 (levy in July)

4. Tax levy for Land Surface Water of BPL (BINE, BMSE) according DISPENDA letter Number: 973/94/UPTD.BABAR/DPPKAD/2013 dated June 12, 2013 and Local Tax Assessment Letter June 15, 2013, was paid every month ie July 12, 2013 (levy in June), August 15, 2013 (levy in July).

Realization of CD / CSR of 2013 LWSM /POM units for the field of social / environmental period from January to June 2013. Activities that have been implemented include

a. Help borrow heavy equipment / Wheel Loader. Dated March 10, 2013. Objective: Flatten the ground as a foundation in the Terentang village mosque.


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b. Trash Giving as much as 10 units. April 2, 2013. Target: BAPEDALDA Kab. West Bangka. Location: Muntok. c. Help of Pole and Volley Ball. Date: June 18, 2013. Target: SDN 13 Kelapa, the Terentang village stretched.

Realization of CD / CSR in 2013 BINE units for field social / environmental period from January to June 2013. Activities that have been implemented, for example:

a. Social Activity of Eye Health Examination and Glasses Free (2011), Public Health Foundation of Buddhist Tzu Chi dated 27 April 2013.

b. Aid of Community Needs Assistance of Heavy Equipment (March 2, 2013) in Sub-village Belar, BerangVillage. c. The rest in the form of donations and honoraria.


PRINCIPLE #7 RESPONSIBLE DEVELOPMENT OF NEW PLANTINGS

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

Information of social and environmental aspects before the construction of the estate is presented in the UKL-UPL document of PT MPLWI IN 1995. Thus the document revison result the document is presented in the UKL-UPL PT MPLWI 1995. As a result of the revision of the document, the document is already available also Environmental Management (DPLH) for PT. MP LWI compiled in 2011. For PT BPL, the Company also has a document of Environmental Impact of Palm Oil Plantation and Processing Plant in Kelapa Sub Distric, Bangka District, South Sumatra made by consultant of PT. HSW International. EIA of PT BPL has been approved by the Minister of Agriculture Number 046/ANDAL/RKL-RPL/BA/II/1996 on February 16, 1996. In the environment document within the PT BPL included social aspects which include: state of the population, composition of the population based on religion, Livelihoods and Figures Dependence, Formal Education, Public Health, Water Availability, Security. In addition, there are activities such as Public Perception of the positive impacts include: Work Opportunities, Increased income per capita, business opportunity, as well as the increasing number of public facilities and infrastructure.

In addition, the company In addition, the company also has done a Estate and Mill of Palm Oil Social impact identification in the SIA study conducted in 2012 in 7 villages affected by plantation activities. In the environmental documents (EIA and DPLH), provided oprerational procedure plsn that adequate for environmental management and monitoring. Management and monitoring of social impacts as a follow-up of EIA done regularly every semester, while the management and monitoring of social impacts as a follow-up study has not been done because SIA is scheduled in 2013, but has provided a work program of social impact management plan that will be done once a year which includes 2 impact negative: social unrest related to poor communication, and river water pollution due to mud flow into the river during bridge construction.


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

There are no new developments or extention in the area of PT MPLWI.


7.3 New plantings since November 2005, have not replaced primary forest or any area required to maintain or enhance one or more High Conservation Values.

PT MPLWI does not have a new developing areas and or replanting activities. Data of Crop accordence with area statements include: that the oldest plant in 1991 and the youngest in 1997. Based on licenses, planting is done in the status area of other uses land area (Spatial of Bangka).


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


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Refer to Criterion 4.3


7.5 No new plantings are established on local peoples’ land without their free, prior and informed consent, dealt with through a documented system that enables indigenous peoples, local communities and other stakeholders to express their views through their own representative institutions.

There are no new plantings in the plantation area of PT MPLWI above the traditional ground. Social aspects information is presented in the UKL-UPL (Environmental Management Efforts / Environmental Monitoring Efforts )of PT MPLWI in 1995. In the document states only monograph data from 8 villages located around the plantation business, does not specifically address the impact of plantation activities.

There are also documents of Environmental Management (DPLH) for POM 60 tonnes FFB / hour in 2011. In the document includes discussion of social aspects which include: state of the population, composition of the population based on religion, Livelihoods and Figures Dependence, Formal Education, Public Health, Water Availability, and Security. Besides that, there are Public Perception of activities such as the positive impacts include: Employment Opportunities, Increased the income per capita, business opportunity, and also the increasing of the number of public facilities and infrastructure Meanwhile, the company also has done social impact identification of the Mill and the Oil Palm Plantations in 2012. A total of 7 villages affected by activities including: Ibul Village, Berang Village, Jebus Village, Mislak Village, Ranggi Asam Village, Terentang village and Tumbak Petar village. In the document discussed the factors that cause the effects such as: rights of access and use rights, livelihoods including activities and working conditions, cultural and religious value. Refer to 5.1; 6.1; 7.1

Status : Not Applicable

7.6 Local people are compensated for any agreed land acquisitions and relinquishment of rights, subject to their free, prior and informed consent and negotiated agreements.

PT MPLWI does not expand or new plantings in area of operations. The impact of the loss of access and rights to land had to be identified through UKL-UPL, DPLH and Social Impact Identification Report. There is arable public land acquisition at the beginning of the development phase, where as many as 146 owners of land (105.23 ha) in the Berang village and 190 owners of land (363.78 ha) in the Tumbak Petar village has been replaced loss since 1995 to 1999, according to established procedures and known by related parties. So the NC No. 2013.03 stated CLOSED.


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

There is a new development in the plantation area of PT MPLWI and PT BPL. Based on the youngest plant area statement in HGU area of PT MPLWI is a plant of 1998 and PT BPL is a plant of 1995


PRINCIPLE #8 COMMITMENT TO CONTINUOUS IMPROVEMENT IN KEY AREAS OF ACTIVITY

8.1 Growers and millers regularly monitor and review their activities and develop and implement action plans that allow demonstrable continuous improvement in key operations.

There is an emorandum to reduce the use of Paraquat signed VPA-PSM 2 to the RC and the entire EM Region 2 (No. 002/MEMO-VPA PSM2/04/2011) which emphasizes the use of herbicides that naturally limited such as Paraquat should decrease each year by using a weed control as detailed technical in Chapter VI points 6.3.1,: 1. Handling of major crop plants such as: develop / conserve useful plants, destroy noxious weeds, limit soft weed growth 2. Applying the concept of integrated weed management.

If weed control is done chemically, it should pay attention to the general instructions about safety working with pesticide, such as: the choice of pesticides, pesticide storage, pesticide use, how to handle in case of pesticides contamination. The results of the internal audit RSPO documents is available for PT MPLWI held on 27-31 May 2013 by Hendi Hidayat, Firmasyah, Kurniawan IP, Mahya Ashari and Yosaphat AR with 7 findings related to RSPO P&C and 1 finding related to


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SCCS. There is also documentation of the Meeting Minutes of Management Review Internal Audit RSPO PT MPLWI Region Babel of dated July 1, 2013 which was attended by 25 workers with a material improvement over the follow-up of Internal Audit findings RSPO, for example: the unavailability of copies of certificate of incorporation and the beginning of the last change. This has been followed up by the management unit.



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3.2. Summary of Assessment Report of Supply Chain

Clause (Module E) Pabrik CPO – Persyaratan Mass Balance

1 Documented procedures

1.1

The facility shall have written procedures and/or work instructions to ensure the implementation of all the elements specified in these requirements. This shall include at minimum the following:

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

a. The name of the person having overall responsibility for and authority over the implementation of these requirements and compliance with all applicable requirements. This person shall be able to demonstrate awareness of the facilities procedures for the implementation of this standard.

a. SOP of identification and traceability (Doc No.: PT MPLWI-LWSM/SOP/01, Rev.02) dated 21 November 2013. These documents include: - Objective: To ensure that the products produced by palm oil mills can be traced and can be ensure that FFB comes

from sources that implement the principles and criteria continualy - Scope: The process of FFB admission as raw materials to the processed product delivery. Supply chain system is

implemented based on the principle of Mass Balance where FFB from the different source processed together. - References: SOP of Palm Oil Mill Processing of PT SMART Tbk. 2010 (MCMD # 1); ISCC 204 Mass Balance

Calculation Methodologies, April 2010. RSPO Supply Chain Certification Systems, 25 November 2011; RSPO Supply Chain Certification Standard, CPO-Mills Module E: Mass Balance, 25 November 2011.

- Duties and Responsibilities. - Work flows: Accepting FFB (Core Estate, Plasma Estate, Supplier); Grading of FFB; Processing of TBS; Quantity

Monitoring; Quality Monitoring; Delivery Products; Maintenance Records. Document. - Documentation

b. Duties and Responsibilities - Assistant: Monitoring of received FFB appropriate with approved standards and criteria; Supervisioning of FFB

process and analysis process of products quality. - Head of Administration: Recording and reporting the quantity and quality of the products on a regular basis;

Supervisioning administration process of FFB received and delivery of the products; Supervisioning essential tools in the supply chain in a preserved condition; Mass Balance Calculations based on the number of products that can be claimed as certified product.

- Manager: responsible for the entire supply chain process can be done well; Ensuring Mass balance calculations have been appropriate in determining the amount of certified product; provide information to those who need relevant amount of certified product.

- Regional Controller: Ensure and assure that products are traceable from sources and delivery products are acceptable according to their quantity and quality.

Status: Comply as required.

1.2

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

POM of Leidong West has SOP of identification and traceability (Doc No.: PT MPLWI-LWSM/SOP/01, Rev.02) contains:

6.1. FFB Receive Sources of FFB Suppliers that received by mill: Own Estates and Supplier (Independent Smallholders).

6.1.1. FFB Core Estate: SPB signed by related staff of core estate regarding to the information: Original Division, Distance from Division to POM, plate number of vehicle, type of vehicle, number of bunch, Weight, Block, date / time of receipt FFB. For estate that runs the certification of ISCC is appended GHG Emmission and the number of Certified Product claims. As for the estate that underwent RSPO certification, imprinted stamp "Mass Balance" on the SPB documents.

6.1.2. FFB Supplier (Independent Smallholder): SPB signed by related suppliers using suppliers SPB without


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Mass Balance (RSPO) and no GHG Emmission value and the number of claims of certified product

Leidong West POM has had code simulation inclusion Mass Balance in related documents, such as:

6.1 SPB (serial numbers: 110 129). There is the inclusion of stamp of Mass Balance and GHG Emission: 102.74 kgCO2eq/ton.

6.2 Weigh Card (Card Weighbridge) code K132LWSM L 09389, printed Mass Balance code.

Letter of Product Delivery (Delivery Note) code S132 LWSM T 01296, for delivery of the certified product (CPO / PK) with Mass Balance included. In Delivery Note contains information such as: Objective (bulking), reference number DO / Contract, delivery date, Reference Weighbridge card, Quantity, Quality (FFA, Impurities, Moisture), Seal No., Temperature, Vehicle No., Name of Rider, No. of driving lisence of the rider, time departure, time of arrival and the destination, sign of the receiver at the destination.


2 Purchasing and goods in

2.1

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

Leidong West POM has SOP OF identification and traceability (Doc No.: PT MPLWI-LWSM/SOP/01, Rev.02). See Clause 1.2.


2.2

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

POM of Leidong West has SOP of identification and traceability (Doc No.: PT MPLWI-LWSM/SOP/01, Rev.02).

6.4 Calculating Mass Balance 6.4.1. Recording and Reporting Product Quantity and Quality: Measurement using sounding and checking

the water content / FFA method. Recording and reporting data of the CPO quantity / quality can be used as a guide in calculating Mass Balance

6.4.2. Calculating Mass Balance: Calculation using Volume approach of Credit Option is the number of produced products from certified sources in a certain time. The calculation must consider the amount of certified product that can be claimed each month. The number of products that can be claimed as a certified product stated in the Letter of Product Delivery (Delivery Note).

For RSPO certified product, if the certified product projections is bigger than the certified products that have been claimed, then the things to do is:

- Inform to the relevant RSPO Certification Body and the RSPO IT System (e-trace). - Analyze the production data and Mass Balance reports that have been made. - Perform calibration and re-checking the weighbridge and its supporting tools. - Decide the new certified product projection by considering the mistake level for maximum 5% of total projection that

has been made.


3 Record keeping

3.1

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

POM of Leidong West has SOP of identification and traceability (Doc No.: PT MPLWI-LWSM/SOP/01, Rev.02) dated 21 November 2013: Maintenance of Documents and Records: Identification and traceability document must be stored within a period of 10 years in the office mill in accordance with control procedures document.Daily and monthly record completely recorded and up to date then stored in their internal system using SAP.


3.2


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

Leidong West POM has SOP of identification and traceability (Doc No.: PT MPLWI-LWSM/SOP/01, Rev.02) dated 21 November 2013: Maintenance of Documents and Records: Identification and traceability document must be stored within a period of 10 years in the office mill in accordance with control procedures document.


3.3 (a) The facility shall record and balance all receipts of RSPO certified FFB and deliveries of RSPO certified CPO, PKO and

palm kernel meal on a three-monthly basis. (b) All volumes of palm oil and palm kernel oil that are delivered are deducted from the material accounting system

according to conversion ratios stated by RSPO. (c) The facility can only deliver Mass Balance sales from a positive stock. However, a facility is allowed to sell short.

a. Leidong West POM has simulated record document of Mass Balance Product Reports (CSPO) by 2013. b. SOP of identification and traceability (Doc No.: PT MPLWI-LWSM/SOP/01, Rev.02) dated 21 November 2013: 6.4 Calculating of Mass Balance

6.4.1. Recording and Reporting Product Quantity and Quality: Measurement using sounding and checking the water content / FFA method. Recording and reporting data of the CPO quantity / quality can be used as a guide in calculating Mass Balance.

6.4.2. Calculating Mass Balance: Calculation using Volume approach of Credit Option is the number of produced products from certified sources in a certain time. The calculation must consider the amount of certified product that can be claimed each month. The number of products that can be claimed as a certified product stated in the Letter of Product Delivery (Delivery Note).


3.4 The following trade names should be used and specified in relevant documents, e.g. purchase and sales contracts, e.g. *product name*/MB or Mass Balance. The supply chain model used should be clearly indicated.

Leidong West POM has had code simulation of Mass Balance in related documents, such as: 6.4 SPB (serial numbers: 110129). There is the inclusion of Mass Balance stamp and GHG Emission: 102.74 kgCO2eq/ton. 6.5 Weighbridge card code K132LWSM L 09 389, printed Mass Balance code. 6.6 Letter of Product Delivery (Delivery Note) code S132 LWSM T 01296, for delivery of the certified product (CPO / PK) with Mass Balance included. In Delivery Note contains information such as: Objective (bulking), reference number DO / Contract, delivery date, Reference Weighbridge card, Quantity, Quality (FFA, Impurities, Moisture), Seal No., Temperature, Vehicle No., Name of Rider, No. of driving lisence of the rider, time departure, time of arrival and the destination, sign of the receiver at the destination. Leidong West POM does not do direct selling, the entire palm oil shipped from the mill to bulking.


3.5 In cases where a mill outsources activities to an independent palm kernel crush, the crush still falls under the responsibili ty of the mill and does not need to be separately certified. The mill has to ensure that the crush is covered through a signed and enforceable agreement.

Not Applicable. Leidong West POM does not have Palm Kernel processing (Kernel Crushing Plant).

Status: Not Applicable

4 Sales and goods out

4.1

The facility shall ensure that all sales invoices issued for RSPO palm oil delivered include the following information:

(a) The name and address of the buyer


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(b) The date on which the invoice was issued

(c) A description of the product, including the applicable supply chain model (Segregated or Mass Balance)

(d) The quantity of the product delivered

(e) Reference to related transport documentation

Leidong West POM has had code simulation of Mass Balance in related documents, such as: 6.4 SPB (serial numbers: 110129). There is the inclusion of Mass Balance stamp and GHG Emission: 102.74 kgCO2eq/ton. 6.5 Weighbridge card code K132LWSM L 09 389, printed Mass Balance code. 6.6 Letter of Product Delivery (Delivery Note) code S132 T LWSM 01296, for delivery of the certified product (CPO / PK) with Mass Balance included. In Delivery Note contains information such as: Objective (bulking), reference number DO / Contract, delivery date, Reference Weighbridge card, Quantity, Quality (FFA, Impurities, Moisture), Seal No., Temperature, Vehicle No., Name of Rider, No. of driving lisence of the rider, time departure, time of arrival and the destination, sign of the receiver at the destination. Leidong West POM does not do direct selling, the entire palm oil shipped from the mill to bulking.


5 Training

5.1

The facility shell specifies and provides the training for all staff as required to implement the requirements of the Supply Chain Certification Systems.

News Events of SCCS LWSM Training on 21 November 2013. Training material: Understanding of the SCCS. Giver material: EHSD - Sustainability Division. Participants: SPO Officer Mill, Security, Weight Bridge operator.


6 Claims

6.1 The facility shall only make claims regarding the use of or support of RSPO certified oil palm products that are in compliance with the RSPO Rules for Communications and Claims.

Leidomg West POM does not do Direct Selling, entire shipments of CPO addressed to bulking (PT BPL). So the procedure refers to the RSPO Rules on Market Communication and Claims under the authority of the Sales Department of Jakarta.



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3.3. Conformity Checklist of Certificate and Logo Use

1. Evidence of permission or approval certificate and logo from Certification Body which submitted by Client

X or√

ST-2 - NA

Status: - 2. Implementation of certificate and logo used by Client comply with size and type (shape)

against Guideline of Logo Use X or√

ST-2 - NA

Status: -

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

X or√

ST-2 - NA

Status: -

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

X or√

ST-2 - NA

Status: -


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3.4. Summary of RSPO Partial Certification.

Total companies observed (0.5 √Y) Where Y is the total of uncertified RSPO registered company The Management Unit name : ..........

2.1

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

X or√

The entire units operating under PT SMART Tbk (subsidiary) carry out the certification process according to TIME BOUND PLAN.

Status:

2.2

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

X or√


Status:

6.3

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

X or√


Status:

6.4

Any negotiations concerning compensation for loss of legal or customary rights are dealt with through a documented system that enables indigenous peoples, local communities and other stakeholders to express their views through their own representative institutions.

X or√


Status:

7.3

New plantings since November 2005, have not replaced primary forest or any area required to maintain or enhance one or more High Conservation Values.

X or√


Status:

7.5

No new plantings are established on local peoples’ land without their free, prior and informed consent, dealt with through a documented system that enables indigenous peoples, local communities and other stakeholders to express their views through their own representative institutions.

X or√


Status:

7.6

Local people are compensated for any agreed land acquisitions and relinquishment of rights, subject to their free, prior and informed consent and negotiated agreements.

X or√


Status:


ASSESSMENT REPORT


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

3.5.1 Identification of Findings, Corrective Actions and Observations at (ST-1) Assessment

CAR No

Ref Std

Finding Area Grade Time

Limits Corrective Action Observation Status

Closing Date

2013.01 Major

2.1.1

Compliance Applicable Regulatory Based on documents review, it is known that PT MP LWI has not been able to demonstrate a legitimate Plantation Business Permit (estate and mill) in accordance with applicable regulations.

Mill & Estat

e

Potential NC

Prior to

Stage-2

The company must have evidence of compliance of the regulations

Root Cause: PT MP LWI has had a legitimate Plantation Business Licensing (estate and mill) in accordance with applicable regulations. But the documents have not been able to demonstrate clearly related area before discharge Permanent Business License No. 610/T/PERTANIAN/INDUSTRI/2009.

Problem Solving: Tracing the licensing process related to estates of legitimate businesses (farm and factory) in accordance with applicable regulatory approval of the merger Letter (merged) company No.349/III/PMDN/1998 dated October 21, 1998 which has been explained about the extent and FFB production capacity and has amended in No. Permanent Business License. 610/T/PERTANIAN/INDUSTRI/2009.

Preventive Action:

PT MP LWI can show documents - related documents and business licensing plantation.

Closed 26 Nov 2013


ASSESSMENT REPORT


CAR No

Ref Std



Closing Date

Auditor Observation:

26 November 2013 In documents Merger or the Merger Agreement Letter Company No: 349/III/PMDN/1998, No.. Project: 1110/3115-07/13-09443, dated October 21, 1998 issued by the Minister of State for Investment / BKPM, has been widely noted land use for PT MP LEIDONG WEST INDONESIA Indonesia is 10,000 ha. The document as a basis for the issuance of business licenses Permanent Head of BKPM Decree No.: 610/T/PERTANIAN/INDUSTRI/2009, dated June 16, 2009 as a valid document permitting plantation owned businesses. So that the potential non conformance stated CLOSED

2013.02 Major 2.2.1

Documents of land ownership and land use.

PT MP LWI has had a form of land tenure document in the form of HGU certificate issued in 2004. However, documents in the form of land exploitation legitimate Plantation Business Permit (mill) can not be demonstrated.

Mill & Estat

e

Potential NC

Prior to

Stage-2

Companies must be able to show the documents of land cultivation (plantation business permit) in accordance with applicable regulations.

Root Cause: PT MP LWI has had a legitimate Plantation Business Licensing (mill) in accordance with applicable regulations. But the documents have not been able to demonstrate clearly related area before discharge Permanent Business License No.. 610/T/PERTANIAN/INDUSTRI/2009.

Problem Solving:

Tracing the licensing process related to

Closed 26 Nov 2013


ASSESSMENT REPORT


CAR No

Ref Std



Closing Date

estates of legitimate businesses (farm and factory) in accordance with applicable regulatory approval of the merger Letter (merged) company No.349/III/PMDN/1998 dated October 21, 1998 which has been explained about the extent and FFB production capacity and has amended in No. Permanent Business License. 610/T/PERTANIAN/INDUSTRI/2009.

Preventive Action:

PT MP LWI can show documents - related documents and business licensing plantation.

Auditor Observation:

26 November 2013 In documents Merger or the Merger Agreement Letter Company No: 349/III/PMDN/1998, No.. Project: 1110/3115-07/13-09443, dated October 21, 1998 issued by the Minister of State for Investment / BKPM, has been widely noted land use for PT MP LEIDONG WEST INDONESIA Indonesia is 10,000 ha. The document as a basis for the issuance of business licenses Permanent Head of BKPM Decree No.: 610/T/PERTANIAN/INDUSTRI/2009, dated June 16, 2009 as a valid document permitting plantation owned businesses. So that the non conformance stated CLOSED.


ASSESSMENT REPORT


CAR No

Ref Std



Closing Date

2013.03 Minor 2.2.1

Major 2.3.1; 2.3.2; 2.3.3

Minor 6.4.1; 6.4.2; 6.4.3

Major 7.5.3

Major 7.6.1

Minor 7.6.1; 7.6.2; 7.6.4

Completion evidence of land acquisition and compensation records. PT MP LWI has not been able to provide evidence related to the completion of land acquisition and compensation process of recording has been made.

Estate

Potential NC

Prior to

Stage-2

Companies must be able to show all the recorded evidence completion of land acquisition and compensation have been implemented.

Root Cause

PT MP LWI has undergone the completion of land acquisition, but has not been able to demonstrate evidence of recording compensation process that has been done.

Problem Solving:

Showing evidence of compensation process record that has been done.

Preventive Action:

Documentation can be done in the unit location. Auditor Observation:

26 November 2013 Companies can show the evidence of completion of land acquisition in accordance with the reference No. SK Beaver Village Head. 05/2007/3-2004 (146 land owners) and Decree No. Petar Tumbak village head. 470/04/2003/2004 (190 land owners). So that the non conformance stated CLOSED.

Closed 26 Nov 2013

2013.04 Minor 5.3.1

Hazardous Waste Management

Based on a documents review and interviews, it is known that Hazardous well has been well managed. However, there is still a hazardous waste stored outside depositories licensed Hazardous

Estate

Potential NC

Prior to

Stage-2

. Companies must ensure that hazardous waste management in accordance with applicable regulations.

Root Cause:

Permission Hazardous waste temporary storage not yet clearly state the location and its life cycle in support units (estate, bulking and transport.).

Problem Solving:

Closed 26 Nov 2013


ASSESSMENT REPORT


CAR No

Ref Std



Closing Date

Waste Temporary Storage. The Company filed a petition regarding the direction and approval of the support unit hazardous waste management to enviroment bodies of Bangka Barat Distric and has been approved with storage period for 3 months before being sent to the hazardous waste temporary storage of the mill as a letter No. 660/282/1.08.02/2013 and No. 660/283/1.08.02/2013.

Corrective Action:

The company ensures that the hazardous waste from hazardous waste temporary storage unit support that has been transported to the mill before 3 months.

Observasi Auditor:

26 November 2013

In accordance with the Hazardous waste management record indicated by PT. BPL and PT. MPLWI, hazardous waste produced in estate (real) sent periodically to the permitted Hazardous Waste Temporary Warehouse polls in Mills (BPRM and LWSM) with a minimum period of 3 months to be sent to a third party who has permission.

Collection in TPS with a minimum period of 3 months has received approval from Bangka Barat Regional Environment Impact Control Agency as the competent authority through letter No.660/282/1.08.02/2013


ASSESSMENT REPORT


CAR No

Ref Std



Closing Date

about Hazard Waste Management in response to a request the opinion / advice of the company to Regional Environment Impact Control Agency through letter no. 014/PC-BB/X/2013 on Hazardous waste management. With the approval of Hazardous waste storage permit in PT. BPL and PT. MPLWI for a maximum of three months as mentioned above, the non conformance CAR.2013.04. stated CLOSED.

3.5.2 Identification of Findings, Corrective Actions and Observations at (ST-2) Assessment

CAR No

Ref Std



Closing Date

2013.05 Minor 4.4.1

Groundwater contamination by pollutants The results of water testing in 2012 showed that residential water wells in a LWSE contain contaminants,Coliform, bove the clean water quality standards. However, the company has not shown the evidence of evaluation and corrective actions to ensure that no groundwater contamination by pollutants corresponding water quality standards (Minister Regulation. 416 1990).

Estate

NC Minor

S-1 The Company must show evidence of management actions to ensure water sources are not contaminated by pollutants.

Root Cause:

Problem Solving:

Preventive Action:

Auditor’s observation:

Open

2013.06 Minor 6.1.3

Monitoring of social impacts The company has not shown evidence of

Kebu NC S-1 The Company must show Root Cause: Open


ASSESSMENT REPORT


CAR No

Ref Std



Closing Date

implementation of the social impact monitoring of participatory and involve relevant communities.

n dan Pabri

k

Minor evidence of monitoring implementation social impact is participatory and involve relevant communities

Problem Solving:

Preventive Action

Auditor’s observation

2013.07 Minor

6.5.1

Provision of Adequate Water Facility The company has been providing water supply that is sourced from shallow groundwater (wells) in the housing and has conducted water quality testing. However, based on the results of water testing in the South West Leidong Estate cottage, there are Coliform parameters that have not been appropriate with water quality standards (Minister Regulation. Number 416 in 1990), so that the water supply is not adequate.

LWSE

NC Minor

S-1 The company should ensure that an adequate water supply for workers in accordance with the defined quality standards.

Root Cause:

Problem Solving:

Preventive Action:

Auditor’s observation:

Open

3.5.3 Opportunity for Improvement (ST-2)

No Ref Std Descriptions

1 Minor 4.3.2.

The Company needs to consider the calculation of the rate of erosion (ton / ha / year) as part of the monitoring of erosion in plantations.


ASSESSMENT REPORT



2 Minor 4.7.3

The Company needs to ensure that activities in all work units (Plantation and Factory) have been reviewed (review) in detail for hazard identification and risk control.

3 Minor 5.1.2

The company needs to make sure the test results of aquatic biota and public health monitoring has been done in semester 2 year 2013 was entered into the RKL-RPL periodically.

4 Minor

5.3.1

The company needs to consider waste toxicology tests for agrochemical packaging that has been through the process of optimization.

5 Minor 6.11.1

The Company has opportunities in CSR program improvement that oriented at development otential of the surrounding community. Such as: cooperation in planting vegetables, livestock, craft / skill (rattan), and so on.

3.5.4 Noteworthy Positive Components (ST-2)


1. The company's commitment to apply the principles of sustainable palm oil management.

2. Providing personal (PIC) with sufficient competence for each field related to P & C RSPO.

3 The Company has received ISCC certificate dated February 3, 2012 by GUTCert.

4 MP Leidong West Indonesia has received PROPER Blue (2011-2012 and 2012-2013).

5 The company has been providing common facility such as Rumah Pintar (Smart House) as a program of United Indonesia CaBINEt Wives Solidarity Volume II, chaired by First Lady Ani Yudhoyono (First Lady) and in cooperation with PT. SMART, Tbk (June 7, 2012)


ASSESSMENT REPORT


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

Public Issues (Institution/ NGO/Community)

Management Responses Auditor Responses

26 November 2013

Forest and Agriculture Agency of Bangka Barat District

The Company Permit, especially HGU is less

transparent informed to the agency, thus Forest and

Agriculture Agency does not know work area of PT

MP LWI and PT BPL is inside or outside the defined

forest area. Based on the guidelines of the Ministry of

Forestry decree Number SK798/Menhut-II/2012,

company entered into the area of production forest

area Jering Menduyung of ± 20 Ha.

PT MP LWI and PT BPL has 5 estate classes (very

bad), so that the commitment in the implementation

of the management of palm oil is not in accordance

with the regulations

The Company must immediately renew the plantation

business permit in accordance with Permentan

Number 98 year 2013.

CSR from the company to the public valued less, this

can lead to potential social unrest in the future.

Communication and coordination with the parties,

especially related institutions perceived lack.

The Company has obtained the concession decree,

the process to get the HGU is one recommendation

from the local Forest Service. in this case the

company has received a recommendation from the

Department related to the decree issued by the

concession PT MPLWI and BPL long before the

release of SK 798/Menhut-II/2012 and this we have

to convey to interested parties.

The company has filed a reassessment of the garden

class on August 27, 2013 to Dishutbun districts and

provinces, and the assessment will be conducted by

Dishutbun on December 4, 2013

The Company will immediately undertake rectification

plantation business permit in accordance with

Permentan. Number 98 in 2013

The company has been doing a CD / CSR based on

the company’s program and the company's as a

response of the relief stakeholders requirement

proposal. Currently the company has made the

preparation of Strategic Plan CSR programs as a

guide in the implementation of the next CD / CSR

The management of PT MPLWI has proven ownership of

land rights legally acquired and is not required by the

surrounding community. The Company has made the

demarcation of land ownership rights by putting up signs in

accordance coordinate limits set by BPN. Limit sign has been

properly maintained.

The management of PT MPLWI is filing a class assessment

process back to the estate on August 27, 2013.

The company has a mechanism with compliance regulations.

CSR program follows the the direction of the head area. The

company has an opportunity to further increase community

involvement in the preparation and evaluation of the

implementation of CSR program

PT MPLWI conducted comunication and consultation with

the company’s stakeholder base on Mechanisms that have

been prepared. The company should improve the procedures

socialization to stakeholders regularly, due to changes in the

official PIC and community institutions each year.


ASSESSMENT REPORT




Because so far, every visit to the official site from the

plantation must be through a convoluted procedural.

Coordination for the revitalization program

partnership with the community is very difficult, all

decisions must go through the central office.

that is more targeted.

During this time the company keeps in touch and always responds to every cofficial visit in accordance with the existing mechanisms in the company.

The company strongly supports the partnership revitalization program but must follow the procedures clearly and precisely so that in the future the problem does not occur.

The Company has procedures in providing information to relevant stakeholders.

26 November 2013

Supervision Department of Labour and Transmigration of

Bangka Barat Distric

The Company has submitted a labor report to the

department of on a regular basis, such as

Compulsory Labor Report (every year), Guiding

Committee Of Occupational Safety & Health (quarter

period), etc

The minimum wage given to workers has been

followed Regional Minimum Wage of Bangka Barat

Distric.

The company submits the report to the agency in accordance with the letter Number: 560/234/1.13.01/2011 of Bangka Barat District about filling forms required to report the company.

The company pays the wages of employees in accordance with UMSK set by the government each year

The company has run a rights dispute resolution process (rice supply of employees) in accordance with the Collective Bargaining Agreement and the Law no. 2 of 2004 on Industrial Relations Dispute

Management of PT MPLWI has fulfilled its obligations related labor (minimum wage, social security, employment reporting, accidents and liabilities operator's license). The difference of views on the rice supply has been completed by the two parties in accordance with applicable law.


ASSESSMENT REPORT




There ever happen labor strikes in 2012 related to

supply of rice and about the Collective Bargaining

Agreement.

In case of accidents, the company should report

immediately according to the rules that apply within

2x24 hours, it relates to Social Security claims for

labor.

The Company needs to deliver the number of

operators who have had SIO and continue to monitor

the SIO period of validity of each of the SIO.

Settlement.

In case of accidents, the company reports it to the Social Security and Dinsosnakertrans within 2x24 hours

The company has made a recap of operators have SIO to monitor the validity and report to relevant agencies.

26 November 2013

Supervisory Environmental Impact, BAPEDALDA of Bangka

Barat District.

Hazardous waste reports have been carried out

regularly by the company to the local BLHD, but the

information in it has not fully delivered as used

grochemical packaging, medical waste, etc..

The company has got PROPER Certificate as the

blue category

BLHD has also conducted field visits as a function of

The company has incorporated agrochemical packaging waste and medical waste into the balance sheet and report it to the BAPEDALDA of Bangka Barat District on 27 November 2013, and it will regularly reported in the quarterly report of environmental and RKL / RPL.

Perusahaan telah mendapat sertifikat PROPER dengan kategori Biru di tahun 2012 dan 2013.The company has got PROPER Certificate with blue category in 2012 and 2013.

Management of PT MPLWI has done the obligation of management and reporting the environmental impacts based on environmental and regulations documents. The results of the public consultation shows that there are no occurrences / complaints of environmental pollution caused by the activities of the company.


ASSESSMENT REPORT




supervision (July-August 2013), as long as there are

no environmental issues were identified.

The company routinely conducts environmental monitoring in accordance with applicable regulations and reports them to the relevant agencies.

26 November 2013

Land Agency Office, National Land Agency of Bangka Barat

District:

During there no indication of land disputes or

disputes over land occurred in the area of the

concession licenses of both companies.

The last revision of decision letter of HGU to PT BPL

(BINE & BMSE) shows the increase in areal extents

from the the results of previous measurements, but

the physical in the field and map ther is no change

(still with prior permission) This is the error from the

the BPN where the initial HGU permit using simple

technology method. While the results of recent

measurements made using current technology, it

turns out there is a difference in the area.

Good relationship with the company, the community and the government run so well that in the event of a dispute can be quickly resolved.

The company is always committ to always make improvements to the licensing of any error in the earlier time without any element of intent and adjust with the applicable regulations.

Based on the results of consultations with stakeholders PT MPWLI inform that this time there are no disputes / land disputes. PT MPLWI Management has has company operational permit.

27 November 2013

Communication does not run well, because it is very rare for

staff to visit plantation (friendship).

Socialization is rarely conductd by the company

CSR for the communities is less, need to improve in

The Company has procedures for communication and consultation, the company has always tried to establish good relations with Berang Village.

Socialization is done with the villagers adapted to

The management of PT MPLWI has communication and consultation procedures with stakeholer. Management should increase the frequency of the procedure socialization and CSR programs of the company.


ASSESSMENT REPORT




the future. existing programs in the company.

The Company has procedures in response to any request for assistance from the public, it can be proved in the communication book and the book aspiration.

28 November 2013

Terentang Village of Kelapa Sub District

During the company began to operate, there is never any

problems identified of land disputes because the whole area

has been in the form of concession.

Communication and coordination between the public

and the company so far so good, this is due to many

Terentang villagers work in plantation and plant.

CSR provided by the company so far enough to help

the development community.

Because the entire area of the concession is wholly owned by the Company has been conducted land restitution process in accordance with the procedures, and boundaries of the concession company is well known by the local community.

The Company currently has always tried to maintain good relations with the surrounding community and the currently relationships will be improved.

Maintain the harmonious relationship while keep responding to requests for assistance in accordance with existing procedures

Operational boundaries in accordance with the concession company has owned, so there are no disputes / land disputes with local communities. The management of PT MPLWI have CSR programs. Companies should increase community involvement in the preparation and supervision of the implementation of CSR programs that exist.

27-28 November 2013

PUK Federation SPPP of PT MPLWI dan PUK Federation of

SPPP SPSI of PT BPL-BINE :

The company gives freedom to the workers to

organize. SPPP federation formed in PT MPLWI & PT

BPL.

In 2012 a dispute happenned related the workers

money rice statutes then settled in industrial disputes.

Freedom of association is given to employees based on the Collective Bargaining Agreement approved by the employee and the employer.

The company has been running the wage system according Collective Agreement and the Collective

The Company has implemented freedom of association.. The company showed clear sequences of the legal process related to these problems until the publication of legal decisions at the provincial level. Currently, the PT MPLWI


ASSESSMENT REPORT




SPSI party wants the money rice excluded from the

calculation of basic salary of workers, in contrast to

the policy set by the company. At the provincial level

court, the company declared won. SPSI party was

not satisfied with the decision thus they pursued

further reconsideration at MA level.

Out of this case, during 2013 there are no

issued/dispute/other conflict

Bargaining Agreement, but there is a difference of interpretation of the rice supply, causing disputes over rights of employees. The rights disputes, the company has made efforts to resolve the appropriate CLA and Law. 2 of 2004. The process now is awaiting Supreme Court decision over the appeal filed by the SPSI Parties.

During the year of 2013 there are no issues/dispute/conflict between employees and the company.

and union is awaiting a decision from the Supreme Court.

27-28 November 2013 Gender Committee Member of LWSE & BINE :

Commission on Prevention of Sexual Harassment has been established since 2011 in every unit of plantation.

Commission charge to provide an understanding / awareness to women workers to other forms of sexual abuse, treatment / investigation of complaints, assistance to attempt the settlement of complaints of sexual harassment. An understanding of the forms of sexual harassment routinely performed at the weekly recitation.

Sexual settlement mechanism has been disseminated and understood by the officials as well as female workers. Settlement can be taken internally / family to legal action

Since the year 2011 to the present, there are no complaints related to sexual harassment of women workers..

Gender Committee was formed as an organization that provides an understanding / awareness to women to avoid sexual harassment in the workplace through socialization.

The company facilitates women workers to form a gender commission. The existence and function of this committee has been sufficiently known and understood by women workers.


ASSESSMENT REPORT




29 November 2013

Head of Pangkalan Beras Village (Bpk Ali) & Ex-Head of

Kacung Village (Bpk. H.Syahbandar/on behalf of Committee

of CSR Imbas of PT BPL) :

Based on the information given to them during the

examination of legal boundaries (peg) of the companies in the

location block U42, the following this are delivered :

Payment of CSR of villages around PT. BPL is not

appropriate with annual budget and not in

accordance with the wishes of the people.

Workers‘ rice money does not accounted since 2007

There is no THR for the daily bulking workers and it

less concerned.

The Company has not transparently convey

information that can be accessed by the public.

CSR has been implemented by PT.BPL appropriate with policy decided by the Regent of Bangka Barat. Bangka Barat Regent prohibit CSR is given in the form of cash, current CSR program is still in progress except the Kacung village because CSR is requested only for the benefit of certain parties and not for the benefit of the general society.

Money rice of PT.BPL employees are required by all employees through PUK. SPSI actually has been paid because the rice money had entered the wage component. As a result of this dispute, they forced to go through legal channels to Pangkal Piang court, and the case is won by PT BPL. Nowadays, the rice money problems has been followed up to MK because PUK. SPSI are not satisfied thus they continued it to the Court.

THR for the daily bulking workers is not paid accordance with government regulation.

All the information that needed by the people need about PT BPL always conveyed in a transparent manner, but there are some people or groups who are not satisfied because they want to look for their own benefit in the name of society

PT MPLWI Management has implemented CSR programs in

accordance with the direction of the local government.

Companies that regularly increase communication and

consultation procedure socialization and community

involvement in the preparation and supervision of the

implementation of CSR programs.

The company and the workers agreed to resolve the issues

regarding the rice money through legal channels.


ASSESSMENT REPORT


4.0 CERTIFIED ORGANISATION'S ACKNOWLEDGEMENT OF INTERNAL RESPONSIBILITY

4.1 Formal Sign-off of Assessment Findings

Hereunder sign by management representative from inspected company to acknowledge a field assessment and agree for all content explained in this assessment report, included of non-compliance findings.

Signed on behalf of:

PT MASKAPAI PERKEBUNAN LEIDONG WEST INDONESIA INDONESIA MUTUAGUNG LESTARI

Head of Environmental Departement Lead Auditor RSPO

Ismu Zulfikar Yudwi Wisnu Rahmanto

29/November/2013 29/November/2013


ASSESSMENT REPORT


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

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

Date of Contact

1 Plantation and Forestry Agency (Dinas Perkebunan dan Kehutanan Kabupaten Bangka Barat)

Bangka Barat - Direct visit 26 November

2013

2 Environmental Agency (Badan Lingkungan Hidup Kabupaten Bangka Barat)


2013

3 Labour and Transmigration Agency (Dinas Tenaga Kerja dan Transmigrasi Kabupaten Bangka Barat)


2013

4 National Land Agency (Kantor Pertanahan Nasional Kabupaten Bangka Barat)


2013

5 Berang Village, Simpang Teritip Sub District


2013

6 Terentang Village, Kelapa Sub District


2013

7 Pangkalan Beras Village Bangka Barat - Direct visit 28 November

2013

8 Worker Union PT MASKAPAI PERKEBUNAN LEIDONG WEST INDONESIA INDONESIA

- Direct visit 28 November

2013

9 Committee Gender PT MASKAPAI PERKEBUNAN LEIDONG WEST INDONESIA INDONESIA

- Direct visit 28 November

2013

10

WALHI Bangka Belitung

Jln. Belanak Raya No. 64 RT.02, RW.02, Kel. Air Salemba, Kec. Pangkalbalam, Kota Pangkal Pinang, Prop. Kep. Bangka Belitung.

- Email 18 November

2013

11 Sawit Watch

Perumahan Bogor Baru Blok C1 No 10, Bogor, Jawa Barat

- Email 18 November

2013


ASSESSMENT REPORT


Appendix 2 Assessment Program

DATE 25th – 29th November 2013

PLANNED TIME

ACTUAL DURATION

PROCESSES / CLAUSES TO BE AUDITED AUDITOR

Monday, 25th November 2013

07.00 – 08.30

09.00 – 10.30

11.00 – 12.00

12.00 - 14.00

14.00 - 17.00

07.00 – 08.30

09.00 – 10.30

11.00 – 12.00

12.00 - 14.00

14.00 - 17.00

Flight from Jakarta to Pangkal Pinang

Traveling Pangkal Pinang – Location at PT MP LEIDONG WEST INDONESIA Indonesia

Opening Meeting

Break & Lunch Completing checklist, in e.g.

Documentation review e.g. Commitment to transparency (1.1; 1.2),

Compliance with applicable laws and regulations (2.1; 2.2; 2.3)

Commitment to long-term economic and financial viability (3.1)

Use of appropriate best practices by growers and millers (4.5; 4.6; 4.7; 4.8)

Use of appropriate best practices by growers and millers (4.1; 4.2; 4.3; 4.4; 8.1; 8.2)

Environmental responsibility and conservation of natural resources and biodiversity (5.1; 5.2; 5.3; 5.4; 5.5; 5.6)

ALL TEAM

Tuesday, 26th November 2013

08.00 – 12.00

12.00 - 14.00

14.00 - 17.00

08.00 – 12.00

12.00 - 14.00

14.00 - 17.00

Stakeholder’s consultation to relevant agencies.

Field observations:

Leidong West POM: Mill Processing, OHS Implementation, POM waste management (hazardous, emission, pollution, POME, etc.), Water management.

Break & Lunch

Continuing of Completing checklist, in e.g.

Responsible consideration of employees and of individuals and communities affected by growers and mills (6.1; 6.2; 6.3; 6.4; 6.5)

Responsible consideration of employees and of individuals and communities affected by growers and mills (6.6; 6.7; 6.8; 6.9; 6.10; 6.11)

Responsible development of new plantings (7.2; 7.3; 7.4) Responsible development of new plantings (7.1; 7.3; 7.5; 7.7) Continuous Improvement (8.1)

YWR

BB, NK

BB, NK, RR

Wednesday, 27th November 2013

08.00 - 12.00

12.00 - 14.00

14.00 - 17.00

08.00 - 12.00

12.00 - 14.00

14.00 - 17.00

Stakeholder consultation with the nearest village

Field observations:

Leidong West Selatan Estate:

Legal boundary, HCV management area, land fire

Manuring, Spraying, Harvesting, IPM, Workers safety

Workers facilities (housing, worship, health care, school, union, etc.)

Waste management (landfill, sanitary)

Break & Lunch

Verification of field visit findings and completing checklist

BB

YWR

RR

NK

NK

ALL TEAM

Thursday, 28th November 2013

08.00 - 12.00

08.00 - 12.00

Stakeholder consultation with the nearest village

Field observations:

Bukit Intan Estate:

Legal boundary, HCV management area, land fire

Manuring, Spraying, Harvesting, IPM, Workers safety

Workers facilities (housing, worship, health care, school, union, etc.)

Waste management (landfill, sanitary)

BB

YWR

RR

NK


ASSESSMENT REPORT


DATE 25th – 29th November 2013

PLANNED TIME

ACTUAL DURATION

PROCESSES / CLAUSES TO BE AUDITED AUDITOR

12.00 – 14.00

14.00 – 17.00

12.00 – 14.00

14.00 – 17.00

Break & Lunch

Verification of field visit findings and completing checklist

YWR

Friday, 29th November 2013

08.00 - 10.00

10.00 – 12.00

12.00 – 13.00

13.00 – 14.30

17.00 – 18.30

08.00 - 10.00

10.00 – 12.00

12.00 – 13.00

13.00 – 14.30

17.00 – 18.30

Preparation of NCR and internal discussion team

Closing Meeting

Break & Lunch

Traveling from Estate to Airport

Return flight to Jakarta

ALL TEAM


ASSESSMENT REPORT


Appendix 3 Glossary

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

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

B3 : Bahan Beracun dan Berbahaya (Hazardous Material Waste)

BHL : Karyawan Harian Lepas (Daily Non-permanent Employee)

BMSE : Bukit Mas Estate

BINE : Bukit Intan Estate

BOD : Biological Oxygen Demand

BPN : Badan Pertanahan Nasional (National Land Agency)

CPO : Crude Palm Oil

CSR : Corporate Social Responsibility

EIA : Enviromental Impact Assessment

FPIC : Free, Prior and Informed Consent HCV : High Conservation Value (Nilai Konservasi Tinggi)

HGU : Hak Guna Usaha. (Land Use Permit)

IUP : Izin Usaha Perkebunan (Plantation Operation Licence)

IPAL (WWTP) : Instalasi Pengelolaan Air Limbah (Wastewater Treatment Plant)

JAMSOSTEK : Jaminan Sosial Tenaga Kerja (Social Assurance of Labor)

Jankos / EFB : Janjangan Kosong / Empty Fruit Bunch

K3 (OHS) : Keselamatan dan Kesehatan Kerja. (Occupational Health and Safety)

KER : Kernel Extraction Rate

LA : Land Application

LSC : Land and Soil Capabilty

LC : Land Clearing

LWSE : Leidong West Selatan Estate

LWSM : Leidong West Mill / Leidong West POM

LWUE : Leidong West Utara Estate

MAA : Mill Audit and Advisory

MCAR : Management Committee Agronomy and Research

MCMD Management Committee for Mill Development

OER : Oil Extraction Rate

P2K3 : Panitia Pembina Keselamatan dan Kesehatan Kerja (Committee of Occupational Safety & Health)

PC : Production Controller

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

PK : Palm Kernel

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

POME : Palm Oil Mill Effluent

PT BPL : PT Bumi Permai Lestari

PT MPLWI : PT MASKAPAI PERKEBUNAN LEIDONG WEST INDONESIA

RC : Regional Controller

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

RSPO : Roundtable on Sustainable Palm Oil

SIA : Social Impact Assessment

SIO : Surat Ijin Operator (Operator License)

SKU : Syarat Kerja Umum (Daily Permanent Employee)

SOP : Standard Operating Procedure

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

VPA : Vice President Agronomy