public summary report sapta tunggal compiled

Roundtable on Sustainable Palm Oil Public Summary Report

Report no.: 824 502 16036

Certification assessment against the

RSPO Standard for Group Certification Year 2010 (Amendment April 2013)

Perhimpunan Sapta Tunggal Mandiri Desa Tania Makmur /SP 5A Kecamatan Lempuing Jaya, K abupaten Ogan Komering Ilir,

Provinsi Sumatera Selatan, Indonesia

Date of assessment : 25 to 29 January 2016

Report prepared by:

Naik Monang Parlindungan Lingga (Under Supervised by

Dian S Soeminta RSPO Lead Auditor)

Certification decision by:

Nyoman Susila (Managing Director - TUV Rheinland Indonesia)

Certification Body: PT. TUV Rheinland Indonesia

Menara Karya Building, 10th Floor Jl. H.R. Rasuna Said, Block X-5 Kav. 1-2

Jakarta 12950 Indonesia.

Tel: +62 21 57944579 Fax: +62 21 579 44 575

www.tuv.com/id

TABLE OF CONTENTS

1.0 SCOPE OF CERTIFICATION ASSESSMENT ............. .......................................... 3

1.1 National Interpretation Used 3

1.2 Type of Assessment 3

1.3 Location and Maps 3

1.4 Dates of Plantings and Replanting Cycles 5

1.5 Area of Plantation (Total, Planted and Mature) 6

1.8 Detail information about RSPO certification 7

1.9 Organisational Information / Contact Person 8

1.10 Approximate Tonnages Certified 8

The approximate tonnages certified, based production in year 2013 from members owned estate only, are as follows : 8

1.11 Recommendation for Certification 8

1.12 Date of Certificate Issued and Scope of Certificate 8

2.0 ASSESSMENT PROCESS .................................................................................... 9

2.1 Certification Body 9

2.2 Qualifications of Lead Assessor and Assessment Team 9

2.3 Assessment Methodology 11

2.4 Stakeholder Consultation and Stakeholders Contacted 12

2.5 Date of Next Surveillance Visit 12

3.0 ASSESSMENT FINDINGS ....................................................................................13

3.1 Summary of Findings 13

3.2 Identified Non-conformances, Corrective Actions Taken and Auditors Conclusions 49

3.3 Issues Raised by Stakeholders and Findings Pertaining to Issues 60

3.4 Acknowledgements of Internal Responsibility and Formal Sign-Off by Client 61

APPENDICES .............................................................................................................63

Appendix 1: List of Sample Individual Member 59 Appendix 2: Details of Certificate 63

Appendix 3 : Certification Audit Plan 69

Appendix 4 : List of Abbreviations 75

Appendix 5: List of Stakeholders Interviewed and Contacted 76

Appendix 6 : Observations and Opportunities for Improvement 77

RSPO Certification Assessment Report

Perhimpunan Sapta Tunggal Mandiri

Desa Tania Makmur /SP 5A Kecamatan Lempuing Jaya,

Kabupaten Ogan Komering Ilir, Provinsi Sumatera Selatan, Indonesia

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QMF: RSPO-007a-11(Rev.0)

1.0 SCOPE OF CERTIFICATION ASSESSMENT

1.1 National Interpretation Used

The operations of the palm oil plantation were assessed against RSPO Standard for Group Certification Year 2010 (Amendment April 2013) of the RSPO Principles & Criteria and RSPO Standard for Group Certification year 2010 refering to RSPO P & C 2013.

1.2 Type of Assessment

The main certification assessment was carried out on independent smallholder group Perhimpunan Sapta Tunggal Mandiri in Tania Makmur/SP 5A village, Lempuing Jaya Sub District, Ogan Komering Ilir District, South Sumatera Province, Indonesia.

1.3 Location and Maps

Table 1: GPS locations for all smallholder groups i ncluded in certification assessment

Name of group Number of members

Location GPS locations

Latitude Longitude BUMI JAYA/ SP 1 575

Desa Bumi Harapan, Kec. Teluk Gelam, Kab. OKI, Sumatera Selatan

03° 40' 01.74" S 104° 47' 36.59" E

Patwa Usaha Mandiri/ SP 2 200

Desa Panca Tunggal Benawa, Kec. Teluk Gelam, Kab. OKI, Sumatera Selatan

03° 41' 06.73" S 104° 47' 37.64" E

TUNGGAL MULYA/ SP 3 296

Desa Burnai Timur, Kec. Pedamaran, Kab. OKI, Sumatera Selatan

03° 42' 26.10" S 104° 47' 2.23" E

Sinar Sawit Bahagia/ SP 4 316

Desa Burnai Timur, Kec. Pedamaran, Kab. OKI, Sumatera Selatan

03° 36' 23.51" S 104° 51' 8.62" E

DWI TUNGGAL/SP5A & SP 5B

660

SP 5A: Desa Tania Makmur Sp.5A Kec Lempuing Jaya - OKI

SP 5B: Desa Lempuing Indah SP. 5B Kec Lempuing Jaya- OKI

3° 49' 24.052" S 104° 57' 51.968" E

TANI MANDIRI/SP6

322 Desa Suka Maju Sp.6 Kec. Lempuing Jaya- OKI

3° 42' 23.520" S 105° 0' 5.90" E

MAJU JAYA/SP7 347

Desa Suka Jaya Sp.7 Kec Lempuing Jaya- OKI

3° 41' 31.799" S 104° 59' 9.835" E





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Figure 1 : Location of Independent Smallholder Group Perhimpunan Sapta Tunggal Mandiri in South Sumatera, Indonesia





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Table 2: Total and projected FFB production from In dependent Smallholder Group Perhimpunan

Sapta Tunggal Mandiri

Group Member FFB Production (Kg) for January

to December 2015

Projected output for

next 12 months 2016

(Kg)*

CPO Equivalent

(mt)**

PK Equivalent

(mt)**

Bumi Jaya/SP 1 19,222,354 1,616,218 323.25 80.81

Patwa Usaha Mandiri/ SP 2 3,811,757 6,000,000 1,200.00 300.00

Tunggal Mulya/SP 3 8,190,249 8,878,000 1,775.60 443.90

Sinar Sawit Bahagia/SP 4 12,473,705 9,480,000 1,896.00 474.00

Dwi Tunggal/SP5A & SP 5B 23,250,268 13,250,000 2,650.00 662.50

Tani Mandiri/SP6 10,766,306 9,600,000 1,920.00 480.00

Maju Jaya/SP7 14,232,855 14,000,000 2,800.00 700.00

Total FFB Production 91,947,494 62,824,218 12,564. 85 3,141.21

Note:

*) Projected year 2016 potentially decrease impact of long dry seasson in year 2015 and plantation age more than 20 years.

**) Base on estimation OER 20% and KER 5% from FFB projection 2016

1.4 Dates of Plantings and Replanting Cycles Independent Smallholders Group follows a replanting cycle of 25 years. Information on the dates of plantings is as per the table below.

Table 3: Age and year of plantings of independent smallholder estate

Oil palm planted area at each estate (ha)

Age & Year of Plantings

0-5

(2011-2015)

6-10

(2006-2010)

11-15

(2001-2005)

16-20

(1996-2000)

20-25

(1991-1995)

< 1990

Bumi Jaya/SP 1 0 0 0 0 1,089.79 0

Patwa Usaha

Mandiri/ SP 2 0 0 0 0 379.93 0

Tunggal Mulya/SP 3 0 0 0 0 553.65 0

Sinar Sawit Bahagia/SP 4

0 0 0 0 606.53 0

Dwi Tunggal/SP5A & SP 5B 0

0 0 0 1,226.64 0

Tani Mandiri/SP6 0 0 0 0 577.72 0

Maju Jaya/SP7 0 0 0 0 654.69 0

Total 0 0 0 0 5,088.95 0





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Based on information above that independent smallholder group replanting program begins in:

Table 4: Replanting plan for group member under “Perhimpunan Sapta Tunggal Mandiri”

Cooperation name Year of Replanting plan Actual

2017 2018 2019 2020 2021 2016

Bumi Jaya/SP 1 - - - 1,150 - -

Patwa Usaha Mandiri/

SP 2 - - - 400 - -

Tunggal Mulya/SP 3 - 592 - - - -

Sinar Sawit Bahagia/SP 4

- 632 - - - -

Dwi Tunggal/SP5A &

SP 5B 400 475 498.8 - -

-

Tani Mandiri/SP6 - - - 500 167 -

Maju Jaya/SP7 - - - 708.1 - -

Total 400 1,699 498.8 2,758.10 167 -

1.5 Area of Plantation (Total, Planted and Mature)

Table 4 : Oil Palm Planted Area Summary, FFB Production and A verage yield/ha for Independent Smallholder Group Perhimpunan Sapta Tunggal Mandiri

Estate Name Total area (ha)

Oil Palm Planted

area (ha)

Mature (Production)

area (ha)

Immature (ha)

FFB Production

(tonnes)

Average yield

(ton/ha)*

Bumi Jaya/SP 1 1,147.29 1,089,79 1,089,79 0 19,222,354 17.638 Patwa Usaha Mandiri/ SP 2

399.93 379.93 379.93 0 3,811,757 10.032

Tunggal Mulya/SP 3 583.25 553.65 553.65 0 8,190,249 14.793 Sinar Sawit Bahagia/SP 4

638.31 606.53 606.53 0 12,473,705 20.565

Dwi Tunggal/SP5A &

SP 5B 1,292.64 1,226.64 1,226.64 0 23,250,268 18.355

Tani Mandiri/SP6 615.92 577.72 577.72 0 10,766,306 18.635 Maju Jaya/SP7 689.59 654.69 654.69 0 14,232,855 21.739

Total 5,366.93 5,088.95 5,088.95 0 91,947,494 18.068





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Table 5: Land use data for Independent Smallholder Group Sapta Tunggal Mandiri

Estate Name Total area

(ha)

Oil Palm Planted Area

(ha)

HCV/

Potential HCV

areas* (ha)

Land used for other purposes

(ha)

Jalan Bumi Jaya/SP 1 1,147.29 1,089,79 2.22 57.50 Patwa Usaha Mandiri/SP 2 399.93 379.93 2.47 20.00 Tunggal Mulya/SP 3 583.25 553.65 2.37 29.60 Sinar Sawit Bahagia/ SP 4 638.81 606.53 1.08 31.60 Dwi Tunggal/SP5A & SP 5B 1,292.64 1,226.64 11.90 66.00 Tani Mandiri/SP6 615.92 577.72 9.36 32.20 Maju Jaya/SP7 689.59 654.69 8.40 34.90

Total 5,366.93 5,088.95 35.33 271.80

1.8 Detail information about RSPO certification0

Detail information about RSPO certification in Independent Smallholder Group Perhimpunan Sapta Tunggal Mandiri as follows:

Note: according to FFB projection year 2016.

RSPO membership no. and date : 1-0194-15-000-00 (dated October 29, 2015)

RSPO certificate no.:

Date of first RSPO certificate & validity:

Date of certification audit : 25 to 29 January 2016

Date of previous surveillance audit : -

Date of revised RSPO certificate & validity (if applicable) :

-

FFB tonnages claimed: 62,824,218*





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1.9 Organisational Information / Contact Person

Contacts details of the company are as follows:

1.10 Approximate Tonnages Certified

The approximate tonnages certified, based on FFB production from the existing members own estates and projected additional FFB from new farmer members that will join in year 2016 , are as follows:

Fresh Fruit Bunch (FFB): 62,824,218 tonnes

1.11 Recommendation for Certification Independent Smallholder Group Perhimpunan Sapta Tunggal Mandiri has established and maintains an effective system to ensure compliance with the RSPO Principles & Criteria for Sustainable Palm Oil Production Independent Smallholders - Indonesia National Interpretation (INA-NI), July 2010 and RSPO Standard for Group Certification 2010. The audit team has confirmed through the audit process that the company’s practices complies with, adequately maintains and implements the requirements of RSPO Principles & Criteria for Sustainable Palm Oil Production Independent Smallholders - Indonesia National Interpretation (INA-NI), July 2010.

TUV Rheinland Indonesia recommends that Independent Smallholder Group Perhimpunan Sapta Tunggal Mandiri be approved as a producer of RSPO Certified Sustainable FFB.

1.12 Date of Certificate Issued and Scope of Certif icate

The scope of the certificate covers production of FFB from Independent Smallholder Group Perhimpunan Sapta Tunggal Mandiri, which includes group of farmer of Bumi Jaya/SP 1, Patwa Usaha Mandiri/SP 2, Tunggal Mulya/SP 3, Sinar Sawit Bahagia/SP 4; Dwi Tunggal/SP5A & SP 5B, Tani Mandiri/SP6 and Maju Jaya/SP7

The date of certificate issued is ……………. Further details of the certificate are as per Appendix 2.

Company/Organization Name :

Perhimpunan ‘‘Sapta Tunggal Mandiri‘

Address : Desa Tania Makmur /SP 5A Kecamatan Lempuing Jaya,


Contact Person : Contact person: Mr. Amin Rohmad

Telephone : Tel : +62821-7630-2288

Email : Email:[email protected]





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2.0 ASSESSMENT PROCESS

2.1 Certification Body PT TUV Rheinland Indonesia is member of Group TÜV Rheinland Group, a global leader in independent testing and assessment services. The TÜV Rheinland Group was established in 1872 with offices located in over 490 locations in 62 countries on all five continents. TUV Rheinland Indonesia offers certification for a wide range of management systems according to established international standards including ISO 9001, ISO 14001, OHSAS 18001, SA 8000, as well as CDM Validations and Verifications. PT TUV Rheinland Indoneisa office is located in Jakarta, Indonesia.

2.2 Qualifications of Lead Assessor and Assessment Team

Name Position Qualifications / Experience

Dian S Soeminta

Lead Auditor

Education: Bachelors Degree in Forestry - Bogor Agriculture Institute. Indonesia, (1990 to 1995).

Trainings attended : ISO 9001:2000 lead assessor course 1996 - Neville Clark; ISO 14001 lead assessor course - PE International; OSHAS: 2007 training, Sustainable Forest Management (SFM) - Forest Stewardship Council (FSC) system training; Chain of Custody training for FSC System. RSPO lead Auditor training year 2010 by Pro Forest and Wild Asia. SCCS training by David Ogg Consulting. ISPO Lead Auditor training Working experience: Professional forester since 1995 to 2000. Lead Auditor for Forest Stewardship Council (FSC), Sustainable Forest Certification (SFC) and Chain of Custody (COC) Certification. Lead auditor for Environmental Management System (EMS) and Quality Management System (QMS) audits. Conducted sustainable forest management certification audits on FSC and Indonesian Ecolabel Institute (Lembaga Ecolabel Indonesia - LEI) standards for 20 companies, 50 COC FSC/LEI audits, and EMS and QMS audits at more than hundred companies for TUV Rheinland Indonesia. Instrumental in the preparation of TUV Rheinland Indonesia for Sustainable Forest Management Certification System and TUV Rheinland Malaysia for RSPO Certification. Member of Task Force for Indonesian National Interpretation (Guidance on scheme smallholder RSPO certification). Developed TUV Rheinland RSPO acceditation process and report template.

Naik Monang Parlindungan

Lingga

Lead Auditor (under

Monitoring)

Education: Bachelor of Forestry, Gadjah Mada University. Training attended : ISPO Auditor, Quality Management System (QMS) Auditor/Lead Auditor (ISO 9001:2008) by IRCA, Environmental Management Systems Auditor/Lead Auditor Conversion Training by IRCA (ISO 14001-2004), Lead Auditor RSPO Training, and HCVA Training Working experience: Field Assistant PT Sapta Karya Damai (2008-2013), Auditor in PT Sucofindo (2013-2015), and Auditor in PT TUV Rheinland Indonesia (2015-present).

M. Fundy Cholis

Kurniawan Auditor

Education : Bachelor of Agriculture (social and economic of agriculture) – Bogor Agriculture University. Trainings attended : ISO 9001:2008 Lead Auditor training – TUV Rheinland Indonesia, Sustainable Forest Management training –Forest education and training center, ISPO training - Commission of ISPO. Working experience : Social research – Indonesian Centre for





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Agricultural (Social Economic and Policy Studies) since 2003-2007, Social Researcher – CSR Indonesia since 2007-2010, Social Economic Expert – Mott MacDonald Indonesia since 2010-2011, Personal consultant in research and development – Colors Media Group since 2011-2013, RSPO & ISPO auditor at TUV Rheinland Indonesia since 2013 -present.

Harso Yuli Antena

Auditor

Education: Bachelor of Agriculture (social and economic of agriculture) – Bogor Agriculture University. Trainings attended: ISO 9001:2008 Lead Auditor training – TUV Rheinland Indonesia, Sustainable Forest Management training –Forest education and training center, ISPO training - Commission of ISPO. Working experience : Social research – Indonesian Centre for Agricultural (Social Economic and Policy Studies) since 2003-2007, Social Researcher – CSR Indonesia since 2007-2010, Social Economic Expert – Mott MacDonald Indonesia since 2010-2011, Personal consultant in research and development – Colors Media Group since 2011-2013, RSPO & ISPO auditor at TUV Rheinland Indonesia since 2013 -present.





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2.3 Assessment Methodology The certification assessment was conducted between 25 to 29 January 2016 as per the assessment program below. The assessment was carried out in accordance with TUV Rheinland Indonesia RSPO audit procedure as well as the RSPO Certification Systems document. During assessment, the qualified TUV Rheinland assessors used the RSPO standard as endorsed for the country in which the assessment took place and recorded their findings.

Due to the location and proximity of the estates, combined with common management systems, it was possible to carry out both field and document assessments of all estates within the time frame without compromising the integrity of the assessment in anyway.

All 7 (seven) schemes were visited and the assessment team carried out field and document assessments of compliance to all the RSPO principles and criteria. Common systems were identified and specific evidence was recorded for individual estates. Interviews were conducted at all estates.

The auditee proposed the correction and corrective action for all identified non conformities raised to the certification body 30 days after the closing meeting. Verification of closure of major non-conformances was conducted 2 months after the closing meeting of the main assessment and implementation of corrective actions for minor non-conformities will be verified during the next surveillance audit. The certification assessment agenda is as explained below.

Main Assessment Agenda

Date Location/ Main sites Main activities 25.01.2016 Kayu Agung town

Ogan Komering Ilir Consultation with local institution

26.01.2016 ICS Office Perhimpunan Sapta Tunggal Mandiri

Group Manager system management. Verification document related smallholder member, amount of smallholder member, legal land use rights, procedure, policy, record fo training and briefing, flora and fauna list, spraying and fertilizing activity record, IPM record, water surface management record, waste management, budget production projection for three years, environmental management.

27.01.2016 ICS Office KUD Dwi Tunggal SP4 Bumi Jaya/SP 1

FFB production Projection for year 2016 Replanting plan 2016 to 2018 Wage issues Field visit: field number 109 (Kelompok 4) YoP 1992; field number 107 (Kelompok 4) YoP 1992 spraying activities, field number 182 (Kelompok 8) YoP 1992, and others. Interviewd with smallholder related spraying, fertilizing, legal land use rights, land conflict, boundary pillars and riparian protection. Field visit: check riparian protection in block 69, kavling pillar checking

28.01.2016 SP 2 KUD Maju Jaya

Field visit: field number 839 (Kelompok1) YoP 1992; field number 816 (Kelompok 5) YoP 1992; field number 714 (Kelompok 3), and others. Interviewed with smallholder related spraying, fertilizing, legal land use rights, land conflict, boundary pillars and riparian protection. Field visit: check riparian protection in block 69, kavling pillar checking

29.01.2016 ICS Office Perhimpunan Sapta Tunggal Mandiri

Closing meeting





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2.4 Stakeholder Consultation and Stakeholders Conta cted The stakeholder consultation involved both external and internal stakeholders. External stakeholders were notified to make comments on the certification assessment by placing an invitation to comment on the RSPO website. Stakeholders included those immediately linked with the operation of the Perhimpunan Sapta Tunggal Mandiri such employees, outgrowers, the local government, NGO’s, local communities.

Stakeholder consultation took place in the form of meetings and interviews. Meetings with stakeholders were held to seek their views on the performance of the organization with respect to the sustainability practices outlined in the RSPO Principles & Criteria, and to comment on aspects where improvements could be made. Meetings with local communities were held at their respective premises within and near the organization area. A stakeholder consultation meeting was also Palembang on January 25, 2016. Letters inviting individual stakeholders to the stakeholder consultation meeting were prepared and sent to the individual stakeholders, while telephone calls were made to arrange the meetings.

In all the interviews and meeting, the objectives of the RSPO and the purpose of the assessment was clarified at the outset followed by an evaluation of the relationship between the stakeholders and the Organization before discussion proceeded to obtain the stakeholders feedback on the Organization’s compliance to different aspects of the RSPO Principles & Criteria. Although several stakeholders were not familiar with RSPO but they agreed with its objective and expressed their willingness to collaborate in the promotion of sustainable palm oil in South Sumatera province. In all interviews and meeting, the assessment team did not restrict discussion of both the positive and negative aspects of operations conducted by Organization estate’s estates.

The stakeholder consultation meeting held with stakeholders during the audit was extensive and productive, with an attendance of more than 20 persons. This was followed by site inspections, including visits to the local communities, interviews with worker and member of Organization, and inspections of worker infrastructure. All stakeholder issues raised were recorded and forwarded to the management for their written response, and this is summarized in Section 3.4.The list of stakeholders that attended the stakeholder consultation meeting and stakeholders interviewed during the assessment is included as Appendix 4.

2.5 Date of Next Surveillance Visit The next surveillance visit is planned for January 2017.





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3.0 ASSESSMENT FINDINGS

3.1 Summary of Findings

During the certification assessment, there are 24 nonconformities consist of 14 nonconformities (RSPO Group Certification) and 10 nonconformities RSPO P&C Independent Smallholder: 20 were assigned against Major Compliance indicators; and 4 nonconformities were assigned against Minor Compliance Indicators. There are 11 observations or opportunities for improvement were identified. Further explanation of the non-conformities raised and corrective actions taken by the company are provided in Section 3.2. The observations & opportunities for improvement are listed in Appendix 5.

The following is a summary of findings made for the criteria listed in the RSPO Principles & Criteria for Group Certification, Juli 2010 and for Independent Smallholder, Juli 2010. A. Findings against requirements for Group Certific ation :

Element 1.1: Group elements

Findings :

Perhimpunan Sapta Tunggal Mandiri is association of smallholder cooperation; the organization was founded on March 24, 2015, as stated on notariat decree no. 93. Sapta Tunggal Mandiri as Group Manager as central administration activities, the group element of Perhimpunan Sapta Tunggal Mandiri consist of has 8 members of independent smallholder cooperation Each cooperation devided into group of individual smallholder, each group of smallholder consist of individual farmer. The figure of group element can be showed on the table below:

Group Manager

Group Member Total

Smallholders group

Total individual farmers

MoU Number

Sapta Tunggal Mandiri

Bumi Jaya/SP 1 24 575 01/PSTM-MoU/VIII/2015

Patwa Usaha Mandiri/ SP 2 8 200 02/PSTM-MoU/VIII/2015

Tunggal Mulya/SP 3 12 296 03/PSTM-MoU/VIII/2015

Sinar Sawit Bahagia/ SP 4 13 316 04/PSTM-MoU/VIII/2015

Dwi Tunggal/SP5A & SP 5B 29 660 05/PSTM-MoU/VIII/2015

Tani Mandiri/SP6 14 322 06/PSTM-MoU/VIII/2015

Maju Jaya/SP7 14 347 07/PSTM-MoU/VIII/2015

Perhimpunan Sapta Tunggal Mandiri not yet has a monitoring mechanism for membership status. The condition above was raised as non-conformities (NCR RSPO 00017)

The representative management of Perhimpunan Sapta Tunggal Mandiri is Mr. Amin Rochmad. He was asigned during members meeting on consensus on the meeting on October 18, 2015. This is stated on notarial act document Rudi Efriansyah, S.H.M.Kn No. 93 dated March 24, 2015. Group Manager responsibility is to ensure that all group members comply with the RSPO standard.

There are agrement between Perhimpunan Sapta Tunggal Mandiri is a statement document of 8 (six) farmer groups to join in the Perhimpunan dated 19 September 2013, to support the initiative on sustainable palm oil and RSPO certification that initiated by Perhimpunan Sapta Tunggal Mandiri, and established documentation improvements especially in best practice cultivation, including environmental and





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community as required by RSPO P & C. Perhimpunan Sapta Tunggal Mandiri has 8 (eight) cooperative members consist of Bumi Jaya/SP1, Patwa Usaha Mandiri/SP2, Tunggal Mulya/SP3, Sinar Sawit Bahagia/SP4, Dwi Tunggal/SP5, Tani Mandiri/SP6, Maju Jaya/SP7. Individual farmer, the MOU as explained on the table above.

Perhimpunan Sapta Tunggal Mandiri has not set maximum limit of the number of members. The condition above was raised as non-conformities (NCR RSPO 00018) Compliance status: Non Compliance NCR NCR RSPO 00017 (Major non-conformity) : Perhimpunan Sapta Tunggal Mandiri not yet has a monitoring mechanism for membership status NCR NCR RSPO 00018 (Major non-conformity) : Perhimpunan Sapta Tunggal Mandiri has not set maximum limit of the number of members

Element 1.2 : Compliance with standards

Findings :

There is agrement between Perhimpunan Sapta Tunggal Mandiri require to all member to comply with RSPO requirement. In order to ensure compliance of group with relevant RSPO standards, the group manager and assistants conducted an audit to the group members. The results of the audit were that the group adheres and implements the RSPO P & C.

Perhimpunan Sapta Tunggal Mandiri has not established SOP to monitor and to ensure that all members of Sapta Tunggal Mandiri compliance with the RSPO requirements, Group Manager established a monitoring program to all members. Currently, there is no prospective group to join in efforts to comply with the RSPO P & C. Some programs had been implemented by the Group Manager of the group i.e. location mapping, collect information about the activities carried out in groups, distributing subsidized fertilizer, and education about sustainable cultivation of plantation as well.

Group of farmers has signed statement of commitment to comply RSPO requirementas stated on the agreement. Some evidence was found there i.e signed agrement between members and Sapta Tunggal Mandiri. A copy the commitment is being held by Group Manager and each member.

All members of the Gapoktan abide by the rules imposed by the Group program manager as follows:

1. There is a signature on the consent of members to be involved in promoting sustainable palm oil

2. Information on land area and the amount of the principal at each farmers

3. There are records regarding to fertilizer application and dosage of each member of Farmer Group during 2012-2013

4. There are notes about types of pesticides used in 2012-2013 by each member including the name of the pesticide

5. There is information about the source of seed being planted

6. Copy of land certificate

This certification audit was carried out currently to ensure that the Group manager complied with RSPO Standard for Group Certification. The result is that there is some nonconformity as described in the NCR in special section below.

Evidence showing that the formal group members continually strive to maintain their compliance with the relevant standards of the RSPO for group member will be seen in the annual surveillance.

Perhimpunan Sapta Tunggal Mandiri not yet has a Statement of Environmental Management. This condition was raised as non-conformities (NCR RSPO 00019) and Perhimpunan Sapta Tunggal Mandiri not yet has internal communication mechanism. This condition was raised as non-conformities (NCR





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RSPO 00020)

Compliance status: Non Compliance NCR RSPO 00019 (Major non-conformity) : Perhimpunan Sapta Tunggal Mandiri not yet has a Statement of Environmental Management NCR RSPO 00020 (Major non-conformity) : Perhimpunan Sapta Tunggal Mandiri not yet has internal communication mechanism Element 1.3: Group Manager. The Group Manager of the Group shall demonstrate it s capacity for managing group certification and performance assess ment against the RSPO Standard for Group Certification. Findings :

Based on notarial deed Rudi Efriansyah, S.H, M.Kn No. 93 dated March 24, 2015, appointed Group manager is Mr. Amin Rochim who is Chairman of the Perhimpunan Sapta Tunggal Mandiri, secretary Mr. Poniran, and treasurer Mr. Taufik Saleh.

There is a Perhimpunan Sapta Tunggal Mandiri organizational structure that contains a general description of the positions and responsibilities of each personnel.

The language used in daily activities of Perhimpunan Sapta Tunggal Mandiri is Javanese, Balines and National language. Group manager can smoothly communicate with all members because both come from the ethnic of Java and the Javanese language.

From interviews and observations of the group manager and Sapta Tunggal Mandiri known that Group managers and administrators understand the requirements and applicable RSPO standards. There is no conflict of interest that would affect its capacity to meet the requirements of the RSPO.

In day-to-day activities Group manager assisted by a sufficient number of personnel. There is an organizational structure that ensures that all activities related to organization are well performed. The organizational structure consists of an adviser, administrators, and members. Board consists of a chairman, secretary and treasurer. There is a monitoring and management program to ensure the compliances of RSPO P & C in all members, the implementation of the program will be monitored by an assigned person.

For financial purpose, each members has their owned business audh as Margin from FFB soldcomission.

Do their-own business such saving and credit mechanism, Perhimpunan Sapta Tunggal Mandiri also received support from the RSPO. Located within the village itself and the relatively close distance from home (1-2 Km) greatly facilitates visits to the plantation if required. Gapoktan official existence that is always ready to help lead Group Manager Group Manager full support to carry out their duties.

Group Manager has the capacity to perform controlling, monitoring and evaluation. To carry out the task, Group Manager has a written schedule for monitoring activities or field trips for the period August 2013-December 2014, namely:

• Last audit findings correction: August - September • Socialization of findings: August • Scheduled site visit: August, October, December, February, April, June, August, October, December • Boards meeting: August-December • Coordination meeting: not scheduled • Chemical fertilizer application: September, December, March, June, September, and December. • Organic fertilizer application: August, November, February, May, August, November. • Harvesting: not scheduled yet.

Internal control systems not yet have a mechanism to control, monitoring and evaluation of all members for verification of conformity to the requirements of RSPO, including communication and visiting members. This condition was raised as non-conformities (NCR RSPO 00021). Perhimpunan Sapta Tunggal Mandiri





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not yet has policies and procedures for communication between the group manager and group members. This condition was raised as non-conformities (NCR RSPO 00022). Group Manager not yet has a mechanism to ensure the sale and claim FFB RSPO certified not exceed total FFB production certified. This condition was raised as non-conformities (NCR RSPO 00023) Compliance status: Non Compliance NCR RSPO 00021 (Major non-conformity) : Internal control systems not yet have a mechanism to control, monitoring and evaluation of all members for verification of conformity to the requirements of RSPO, including communication and visiting members. NCR RSPO 00022 (Major non-conformity) : Perhimpunan Sapta Tunggal Mandiri not yet have policies and procedures for communication between the group manager and group members NCR RSPO 00023 (Major non-conformity) : Group Manager not yet have a mechanism to ensure the sale and claim FFB RSPO certified not exceed total FFB production certified Element 2.1: Group Management Documentation Structu re and Content. The Group Manager shall have its operational structure, policies and proced ures and basic information on individual group members documented. The system verifies whether op erations within the group comply with the RSPO Standard for Group Certification Requirement and th e relevant RSPO Standard for Sustainable Oil Palm Production. Findings :

Group Manager has operational structure to manage system documentation groups, and decision-making responsibilities within the group. In the constitution and bylaws stated that each member entitled to vote and be elected into the board and has the right to participate in organized activities such as training and education, receive financial aid or loans, issued an opinion in a meeting of members.

The highest authority in gapoktan owned by the congress, which will be held the 1st time in 5 years as the highest decision-making. Congress implemented aims to select chairman and board of Gapoktan and also formulate AD / ART and organizations strategic plan for the next 5 years. Congress would implemented if the presence of members of at least two thirds the number of members. Special congress will be held in the event of specific events such as the 50% Gapoktan can not work or do not work in accordance with its mandate. In addition to Congress annual meeting of members are also authorized to establish annual plans of Gapoktan. The annual meeting will be attended by members of the board, the group heads, supervisors and all members.

All records related to Gapoktan, farmer groups and members will be kept in the 5-year period. Perhimpunan Sapta Tunggal Mandiri not yet have acceptance of new members mechanism, a mechanism to leaving the membership, remedial system for members that is not in accordance and for members taken out. This is raised as nonconformity (NCR RSPO 00024) Perhimpunan Sapta Tunggal Mandiri not yet have policies and procedures for receiving / removing members, policies and procedures to handling complaints, policies and procedures for monitoring the group including updating risk assessment group. This is raised as nonconformity (NCR RSPO 00025) Perhimpunan Sapta Tunggal Mandiri not yet have list of information membership that regularly updated includes the manufacturer's name, address, contact details, type of land ownership, land use, location. This is raised as nonconformity (NCR RSPO 00026). Perhimpunan Sapta Tunggal Mandiri not yet have summary of all the data of land use which is updated regularly. . This is raised as nonconformity (NCR RSPO 00027).

Gapoktan also has a record for each member of which contains information on the total annual production and production per unit area (hectare) for previous years, from at least one year prior to joining the group, and the estimated production for the current year. There is a record of production Gapoktan members in each group, which contains information about the production in the past one year.





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Compliance status: Non Compliance NCR RSPO 00024 (Major non-conformity) : Perhimpunan Sapta Tunggal Mandiri not yet have acceptance of new members mechanism, a mechanism to leaving the membership, remedial system for members that is not in accordance and for members taken out NCR RSPO 00025 (Major non-conformity) : Perhimpunan Sapta Tunggal Mandiri not yet have policies and procedures for receiving / removing members, policies and procedures to handling complaints, policies and procedures for monitoring the group including updating risk assessment group NCR RSPO 00026 (Major non-conformity) : Perhimpunan Sapta Tunggal Mandiri not yet have list of information membership that regularly updated includes the manufacturer's name, address, contact details, type of land ownership, land use, location. NCR RSPO 00027 (Major non-conformity) : Not yet have summary of all the data of land use which is updated regularly

Element 2.2: Internal assessment system

Findings :

No other prospective farmer groups involved in the certification process at the moment. Perhimpunan Sapta Tunggal Mandiri was established by a group of cooperation whom wish to comply with RSPO standards.

When the audit was conducted, there is evidence that the Group Manager has conducted regular internal assessment as required for RSPO certification standard for group.

Compliance status : Full Compliance Element 3.1: The group manager shall document and i mplement a system for the tracking and tracing of FFB produced by the group members and in tended to be sold as RSPO certified FFB Findings : The result of FFB was produced by each farmer is documented in the handbook of good gardening method. The organization has information/data about result of harvest (volume of FFB (tonnasse) basis monthly and each farmer. While the recapitulation of result of harvest per farmer group stated in a the record of harvest farmer groups (informed about name of farmers, land area per farmer, year plants, trees per hectare/the number of plants, and volume of FFB). Perhimpunan Sapta Tunggal Mandiri has not system for tracking, the FFB produced by group member and which is claimed as FFB RSPO certified. This condition was raise as nonconformity (NCR RSPO 00028)

Compliance status : Non Compliance NCR RSPO 00028 (Major non-conformity) : Perhimpunan Sapta Tunggal Mandiri not have a system for tracking, tracing the FFB produced by group member and which is claimed as FFB RSPO certified Element 3.2: There shall be a collective group proc edure for the sale of all certified FFB originating from the plantations of group members that is agree d by the group members and the Group Manager and is designed to ensure that non-certifie d FFB are not sold as RSPO certified FFB. This shall be contained in any group marketing system th at is developed for the group, and shall follow





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one of the supply chain models as per the RSPO Supp ly Chain Certification Systemsii, i.e. Identity Preserved, Segregation or Mass Balance Findings :

At the audit time, the group manager has no established procedure for the sale of all certified FFB originating from the plantations of group members that is agreed by the group members and the Group Manager and is designed to ensure that non-certified FFB are not sold as RSPO certified FFB.

There is no document has been inform which the supply chain models as per the RSPO Supply Chain Certification Systems that will be implemented. Thers is no mechanism has been developed for group marketing syatem.

The current practice, all FFB directly sold to the mill from each group member. Individual member/farmer will harvest and grup member collect the FFB to be transport to the mill. The records of summary FFB sold available in each group member office (the cooperation office). However there is information about certified and non certified status of the FFB. Every month group member head will inform and send summary of FFB sold to the mill to the group manager. This is raised as non conformity (NCR RSPO 00029)

Compliance status : Non Compliance NCR RSPO 00029 (Major non-conformity) : No mechanism or procedure which regulates the sale of FFB RSPO certified collectively, and make sure there are no certified FFB sold and claims to be certified, and specified the type of supply chain certification system model.

Element 3.3: The group manager shall ensure that al l invoices for sales of RSPO certified FFB originating from the group are issued with the requ ired information as per the adopted supply chain model requirements within Annex 6 of the RSPO Suppl y Chain Certification Systems document – November 2009 Findings : As explained on the element 3.2 above, current practice for FFB sale is all FFB directly sold to the mill from each group member. Individual member/farmer will harvest and grup member collect the FFB to be transport to the mill. The records of summary FFB sold available in each group member office (the cooperation office). The group member (Cooperation head) will issue invoice directly to the mill without information to the group manager, this make the group manager lack information about invoice of FFB sold to the mill. The invoice format has no follow requirement that stated on Annex 6 of the RSPO Supply Chain Certification Systems document – November 2009, i.e.

• The name and address of the buyer; • The name and address of the seller; • The loading or delivery date; • The date on which the documents were issued; • A description of the product, including the applicable supply chain model (Identity Preserved,

Segregated or Mass Balance or the approved abbreviations); • The quantity of the products delivered; • Any related transport documentation; • Supply chain certificate number; • A unique identification number

No mechanism has been established that FFB sale acknowledges by the group manager the body that is responsible of group manager. This is raised as non conformity (NCR RSPO 00030)

Compliance status : Non Compliance NCR RSPO 00030 (Major non -conformity) :





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Group manager must have a mechanism to ensure that all sales invoices of FFB certified issued accordance with the information specified in the RSPO Certification Group 3.5

Element 3.4: The physical transporting of RSPO cert ified FFB originating from the plantations of group members shall be done either directly by the group (i.e. through own transportation), or via sub-contracted intermediaries. For intermediaries t he requirements as outlined in 3.7 shall also apply Findings :

Perhimpunan Sapta Tunggal Mandiri has owned truck for FFB transport. Truck used in transporting FFB to mill. It’s mean the company not using Subcontrator vechicle.

Compliance status: Full Compliance Element 3.5: All sales of FFB originating from the plantations of group members shall be documented. Findings : Group member records FFB weighing result for each farmer on weighbridge slip note. There is FFB sold payment records as seen marketing unit from farmet to group member. Information stated on the payment slip are, total FFB date of loading, nominal of receive (Rp), name of farmer and sign of farmer. While payment records for buyer also keep by marekting unit including copy of invoiced issed and FFB grading result. All FFB from Perhimpunan Sapta Tunggal Mandiri will be sold to Burnei Timur palm oil mill belong to PT Tania Selatan that has been RSPO certified. There is type of FFB delivery notes; the documents contain information about vechicle number and model, FFB description including quantity, farmer’s name, farmer address and source of FFB location. Organization has kept a copy of all document and records of transactions period one year. The organization will maintain transaction products for 5 years. Due to the organization using its own vechicle and/or using a rent vechicle for delivery of FFB from estate to the mill, that is mean there is no activity being conducted by intermediary or sub-contractor in Sapta Tunggal Mandiri.

Compliance status: Full Compliance. Element 3.6: The Group Manager shall maintain copie s of all relevant documentation and records of group product transactions for a period of 5 years Findings : The group manager has been establishing a format to records all FFB transaction both FFB that will be claimed as certified and none certified. The records control procedure state that all records will be maintained for at least 5 years period. Compliance status: Full Compliance Element 3.7: If an intermediary exists in the suppl y chain from the group to the mill that wants to be included within the group certification control rat her than obtain their own supply chain certification, the intermediary shall be identified by the Group Manager. The Group Manager shall have a contract with the intermediary to fulfill th e RSPO Standard for Group Certification and agree to be assessed on an annual basis by the Group Mana ger as well as in certification assessments. Findings : There is no intermediary used for Perhimpunan Sapta Tunggal Mandiri’s FFB, because the group manager has direct contract with PT Tania Selatan (Burnei Timur Palm Oil Mill. This element not applicable for Perhimpunan Sapta Tunggal Mandiri.





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Compliance status: Not applicable

B. Findings against RSPO Independent Smallholder :

Criterion 1.1: Plantation and mills provide adequat e information to other stakeholders on environmental, social and legal issues relevant to RSPO criteria, in appropriate languange & forms to allow effective participation on decision making . Findings: KUD Bumi Jaya has communication procedur for internal (BJ-SOP-003-18 revision 0 valid date August 19, 2015) and external (BJ-SOP-003-revision 0 valid date August 20, 2015) and KUD Maju Jaya also has communication procedur for internal (MJ-SOP-003-18 revision 0 valid date August 19, 2015) and external (BJ-SOP-003-revision 0 valid date August 20, 2015). In the procedur was regulated about due date for responded that information request. KUD Bumi Jaya has a record control procedure with the document number BJ-Pro-004-11 rev 0 effective date August 20, 2015. In the procedure has been set that storage period of a recording ie:

• For administration file is 5 year • For tax file, financial and related agencies is 10 year • For personalia file and clinic after the employee resign or did not work again is 5 year

SP2 Based on interview with Head of Cooperation (KUD), mentioned that the information request by the stakeholders was related with price, salary, harvesting, Bank loan and others information related the cooperation bussines process. Cooperation (KUD) has procedure for internal and ekternal communication with document number PM-SOP-003-018 Rev 0 dated on 19/08/2015 (for internal commuication) and PM-SOP-003-019 Rev 0 (for external communication). Procedure for record control number PM-PRO-004-002 Rev 0 dated on 19/08/2015 also available. On that procedure, mentioned the retention time for all record and document related RSPO will keep for 5 years, administration document and record will keep for 5 yaers and related accounting will keep for 10 years. Record for incoming letter and responses available on the logbook. Logbook was recorded well all of incoming letter and response letter, dated of incoming letter, addrassed and other information related. Majority incoming letters was about training information about RSPO from Sapta Tunggal to all members. SP4 Based on interview with Head of Cooperation (KUD), same with SP4 above, information request from stakeholders related for price, salary, harvesting and Bank loan. This KUD also has procedure for internal and external communication with document number SSB-SOP-003-018 Rev 0 dated on 20/08/2015 (for internal communication), and SOP-003-019 Rev 0 dated on 20/08/2015 (for external communication). Procedure for record and document control also available, with information retention time for keep the document and record related RSPO and administration will 5 years and accounting will keep in 10 years. The information request and information provision mechanism was directly come to KUD office and/or telphone. KUD has record of Logbook were recorded about incoming letter and respons letter with available evidenced (letter) from stakeholders. But, every letter responses submitted without receipt document, so can’t ensure the letter was accepted by KUD member or not. This is raised as an observation for improvement, because, when verification carried out to the KUD members they stated they had received the letter . Procedure also has a mechanism for verbal communication, telephone, fax, notice board, signage, logbook or ordinasry, blackboard, hand writer note, radio and others manual document, include the electronic document. Compliance status: Compliance with observation





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Criterion 1.2: Management documents are publicly av ailable, except where this is prevented by commercial confidentiality or where disclosure of i nformation would result in negative environmental or social outcomes.

Findings: KUD Bumi Jaya has letter of document transparency information with document number 03/KUD-BJ/BH/VIII/2015 date August 20, 2015. In the letter the information open to the public i.e certificate of cooperative, annual report of cooperative, cooperative policy, permit of cooperative, monthly report of plantation operational, area statement of plantation operational, river map inside estate, mechanism/plantation operational procedure, structure of cooperative, HCV report and HCV management plan, SIA report, employee data of cooperative, estate area statement, production data every month until every year, land certificate for every member and realization report of social community activity/CD and cooperative CSR. KUD Bumi Jaya has document of social impact assessment which prepared by social impact assessment team in November 2013 and HCV management and monitoring program year 2015 and 2016. Both of KUD (SP2 and SP4) has document number 06/KUD-PUMA/SP2/IX/2015 dated on September 10, 2015. This document mentioned about publically available document, i.e.:

• Yearly report • Policy • Licensing • Monthly report • Oprational area • Hydrology map/natural streams water in the production area • Procedures for estate operational • Organization flowchart • HCV report and management plan • SIA report • Employee report • Hectarage statement • Monthly and yearly production report • Land use rights certificate • CSR report • Seed origin

All the member of group smallholder has received the information above and also they understood if the document above wills publically available if any stakeholder asked. Based on interviewed with head of member of Group Smallholder, said that the information asked by stakeholder related FFB update prices, how to become smallholder member, FFB production and others. During the main assessment, there is no information request from stakeholder related environmental impact or social negative impact assessment. Logbook both of two smallholder member (SP2 and SP4) contain information about date of incoming letter, source letter, letter date and letter subject. Compliance status: Full Compliance

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

Findings: Perhimpunan Sapat Tunggal Mandiri has record of list law and regulation environmental, health and safety, with document number FM-Rev00 dated on January 1, 2016. Inside of this document has mentioned about list law and regulation should be fulfill, complete with fulfill level compliance of the regulation.





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Mechanism for ensure the law and regualtion implemented well also available accordance to Evaluation and Identification Law and Regulation document number TM-PRO-004-003 Rev0 dated od 19/08/2015. On this procedure, was identified and evaluated the kind of law and regulation in every once year, then procedure also stated the person will responsible to carry out the evaluation and identification should be reported and ask to the lawyer about critics, suggestion about law and regulation. Found in smallholder member (SP2) some of legal document was not valid example is Location permit (Surat Izin Tempat Usaha) number 142/V/SK/2001, based on Head of Dictrict Ogan Komering Ilir about located cooperation office in Panca Tunggal Benawa Sub Dictsrict, Tanjung Lubuk, Kayu Agung District. Issued on April 17, 2001, valid for 5 years. And during the audit this license was not valid. This is raised as a nonconformity (NCR RSPO 00031) KUD Bumi Jaya has legal information i.e:

1. Minister of cooperative and small business decree , No. 185/Kpts/BHK/KWK.61/IV/1997 date April 3, 1997 about legistation of cooperative establishment act of KUD Bumi Jaya

2. Business licences (SIUP) No. 158/PTSP-BPPM/SIUP/IV/2015 dated April 22, 2015 3. Company registration letter (TDP), No. 205/PTSP-BPPM/TDP/IV/2015 date April 22, 2015, No.

206/PTSP-BPPM/TDP/IV/2015 date April 22, 2015, No. 207/PTSP-BPPM/TDP/IV/2015 date April 22, 2015

4. Permit Place of Business (SITU) No. 201/PTSP-BPPM/SITU/IV/2015, dated April 22, 2015 5. Nuisance Permit (HO), No. 178/PTSP-BPPM/IG/IV/2015 dated April 22, 2015.

KUD Maju Jaya has legal information i.e:

1. Minister of cooperative and small business decree , No. 120/Kpts/BHK.6/KWK.61/IV/1997 date April 3, 1997 about legistation of cooperative establishment act of KUD Maju Jaya

2. Business licences (SIUP) No. 71/06.09/PK/XI/1997 dated November 18, 1997 3. Company registration letter (TDP), No. 06092600060 date November 18, 1997 4. Permit Place of Business (SITU) No300/SK/II/1997, December 1997

Some legal documents belong to the group members have expired. For example, SP 2 and SP 7. The condition above was raised as non-conformities (NCR RSPO 00031) SP5 SP5 farmer group members form a legal organization known as Village Cooperative Unit (KUD). This organization maintains and organizes member’s (Farmer Group 1 to 29 and its members) plantation activities such as agricultural practices, FFB marketing/selling and income distributions to each member. Legal requirement as commercial/business organization has shown during audit, such as:

1. Minister of Cooperative and Small Business Decree, No. 015/KPTS/BH/KWK-6/I/1997, regarding legislation of Cooperative Establishment Act of Cooperative Village Plantation Unit Palm Oil Dwi Tunggal.

2. Company Registration Letter (TDP) for Cooperative, No. 512/PTSP-BPPM/TDP/2012. 3. Business Licenses (SIUP) No. 431/PTSP-BPPM/SIUP/2012 for Personal Loan Business. 4. Permit Place of Business (SITU) No. 469/PTSP-BPPM/SITU/VI/2012. 5. Nuisance Permit (HO), No. 474/PTSP-BPPM/IG/VI/2012.

KORPRI During audit found that KORPRI as a smallholder group was listed as Sapta Tuggal Mandiri member, but Legality organization of group member for KORPRI can not show. Interview to the head of the group found that this group base on Head of District Decree 1992 regarding the licenses for a group of people to use a specific land located in Ogan Komering Ilir District. There’ is no document regarding legal requirement that clearly stated the form of this organization. This finding rise as non-conformity (NCR RSPO 00031) Compliance status: Non Compliance NCR RSPO 00031 (Major non-conformity) :

1. Legality organization of group member for KORPRI can not shown





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2. Some legal documents belong to the group members have expired. For example, SP 2 and SP 7

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

Findings: Both of smallholders member has record of legality, example prensted below: SP4 KUD SSB has record of legality, such as: 1. Company registered Marked number 805/PTSP-BPPM/TDP/XII/2012 with company registered

number TDP 0609.2.01.805 valid until December 4, 2017 named KUD Sinar Sawit Bahagia. Issued on December 5, 2015.

2. HO licensed number 795/PTSP-BPPM/IG/XII/2012, issued on December 6, 2012. 3. Bussiness Location License (Surat Izin Tempat Usaha) number 758/PTSP-BPPM/SITU/XII/2012,

valid for 5 years, issued on December 6, 2012 until December 5, 2016. During the audit, the licensed still valid.

4. Certificate ammandement Cooperation SSB located in Burnai Timur Sub District dated on February 6, 1997.

KUD Patwa Usaha Mandiri (SP2) KUD Patwa Usaha Mandiri has record of legality, such as: 1. Company registered marked number 060926000167 valid until July 11, 2016 on behalf Patwa

Usaha Mandiri, with acitivity transportation services (KLUI Number 60231). Issued by Cooperation Ministry issued number 02/BH.KDK.6.8/III/1999, dated in July 11, 2001.

2. Location permit (Surat Izin Tempat Usaha) number 142/V/SK/2001, based on Head of Dictrict Ogan Komering Ilir about located cooperation office in Panca Tunggal Benawa Sub Dictsrict, Tanjung Lubuk, Kayu Agung District. Issued on April 17, 2001, valid for 5 years. And during the audit this license was not valid.

3. Bussines licensed number 167/06.08/PK/VII/2001, issued on July 2001 in Kayu Agung. 4. Decree Ministry of Cooperatives number 02/BH/KDK.68/III/1999 about certificate establishment of

“koperasi Perkebunan Kelapa Sawit Patwa Usaha Mandiri” number 01/KPKS/PUMA, dated on March 12, 1999.

5. Cooperatives license Patwa Usaha Mandiri (SP2) Burnai Barat in Panca Tunggal Benawa village, Tanjung Lubuk subdistrict number 02/BH/KDK.6.8/III/99 dated on March 19, 1999.

6. Register Tax Number on behalf Cooperatives of Patwa Usaha Mandiri (SP2) number 004632-3069 with tax number identity 1.839.060.2-306

Based on field assessment for SP2 and SP4, field boundary was in natural boundaries such as forest tree and others. There is no any land conflict between smallholder members, because they have natural boundaries. SP2 and SP4 have record of legal land use rights. During the main assessment, sampling for legal land use rights was taken based on statistic methode. The data of legal land use rights presented below: Land owned certificate sampling for SP2:

No. Land entity Total area (m 2) Owned name in certifica te

1 Land owned certificate No. 491, Desa Harapan Mulya, Tanjung Lubuk subdistrict, based on decree letter of Regional Land Agency of South Sumatera Province dated on November 29, 1999 No. 32/HM.1/PIRTRANS-AT/BPN-26/1999. Issued in Kayu Agung on December 21, 1999.

19,845 Nanang Lisnaini





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2 Land owned certificate No. 273, Desa Panca Tunggal Benawa, Tanjung Lubuk subdistrict, based on decree letter of Regional Land Agency of South Sumatera Province dated on October 31, 1996 No. 520.1/56/SPK-TS/26/1996. Issued in Kayu Agung dated on 03/02/1997.

20,165 Hamdani B Harudani

3 Land owned certificate No. 318, Desa Panca Tunggal Benawa, Tanjung Lubuk subdistrict, based on decree letter of Regional Land Agency of South Sumatera Province dated on November 01, 1999 No. 520.1/08/SPK-TS/26/1996. Issued on Kayu Agung, dated on 03/02/1997.

19,845 Wanhar B Abdul Muin

4 Land owned certificate No. 211, Desa Panca Tunggal Benawa, Tanjung Lubuk subdistrict, based on decree letter of Regional Land Agency of South Sumatera Province dated on October 31, 1996 No. 520.1/56/SPK-TS/26/1996. Issued on Kayu Agung on 03/02/1997.

20,165 Tarmizin B Mansyur

5 Land owned certificate No. 340, Desa Panca Tunggal Benawa, Tanjung Lubuk subdistrict, based on decree letter of Regional Land Agency of South Sumatera Province dated on November 1, 1996 No. 520.1/08/SPK-TS/26/1996. Issued on Kayu Agung on 03/02/1997.

19,890 Efendi B Mahmud

6 Land owned certificate No. 486, Desa Harapan Mulya, Tanjung Lubuk subdistrict, based on decree letter of Regional Land Agency of South Sumatera Province dated on November 29, 1999, No. 32/HM.1/PIRTRANS-AT/BPN-26/1999. Issued in Kayu Agung on December 21, 1999.

18,890 M Yun Kurniawan

7 Land owned certificate No. 421, Desa Panca Tunggal Benawa, subdistrict Tanjung Lubuk, based on decree letter of Regional Land Agency of South Sumatera Province dated on November 29, 1999 No. 32/HM.1/PIR/BPN/2000. Issued on Kayu Agung on May 16, 2000.

20,190 Muslih

8 Land owned certificate No. 368, Desa Panca Tunggal Benawa, Tanjung Lubuk subdistrict, based on decree letter of Regional Land Agency of South Sumatera Province dated on November 1, 1996, No. 520.1/08/SPK-TS/26/1996. Issued in Kayu Agung on 03/02/1997

18,945 Kiman B Sardi

9 Land owned certificate No. 367, Desa Panca Tunggal Benawa, Tanjung Lubuk subdistrict, based on decree letter of Regional Land Agency of South

19,320 Sakam





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Sumatera Province dated on November 1, 1996 No. 520.1/08/SPK-TS/26/1996. Issued in Kayu Agung on 03/02/1997.

10 Land owned certificate No. 417, Desa Panca Tunggal Benawa, Tanjung Lubuk subdistrict, based on decree letter of Regional Land Agency of South Sumatera Province dated on May 15, 2000, No. 1/HM.1/PIR/BPN/2000. Issued in Kayu Agung, on May 10, 2000.

19,270 Basmin

11 Land owned certificate No. 256, Desa Panca Tunggal Benawa, Tanjung Lubuk subdistrict, based on decree letter of Regional Land Agency of South Sumatera Province dated on October 31, 1996, No. 520.1/56/SPK-TS/26/1996. Issued in Kayu Agung on 03/02/1997.

20,085 Toha Mari B Suratno

12 Land owned certificate No. 284, Desa Panca Tunggal Benawa, Tanjung Lubuk subdistrict, based on decree letter of Regional Land Agency of South Sumatera Province dated on October 31, 1996, No. 520.1/56/SPK-TS/26/1996. Issued in Kayu Agung on 03/02/1997.

20,165 Iman H

Land owned certificate sampling for SP4:

No. Land entity Total area (m 2) Owned name in certificate

1 Land owned certificate No. 394, Desa Burnai Timur, Pedamaran subdistrict, based on decree letter of Regional Land Agency of South Sumatera Province dated on November 1, 1996 No. 520.1/10/26/PIR-TS/1996. Issued in Kayu Agung, dated on 04/01/1997.

20,000 Tulas Agung Sasmita bin Kayat

2 Land owned certificate No. 340, Desa Burnai Timur, Tanjung Lubuk subdistrict, based on decree letter of Regional Land Agency of South Sumatera Province dated on November 1, 1996 No. 520.1/10/26/PIR-TS/1996. Issued in Kayu Agung on 04/01/1997.

18,930 Dukut bin Paijan

3 Land owned certificate No. 634, Desa Burnai Timur, Pedamaran subdistrict, based on decree letter of Regional Land Agency of South Sumatera Province dated on May 15, 2000 No. 1/HM.1/PIR/BPN/2000. Issued in Kayu Agung, dated on May 16, 2000.

18,200 Husni bin Nangak

4 Land owned certificate No. 595, Desa Burnai Timur, Pedamaran subdisctrict, based on decree letter of Regional Land Agency of South Sumatera Province dated on November 29, 1999 No. 32/HM.1/PIRTRANS-AT/BPN-26/1999.

19,400 Solikhin bin Yarkasi





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Issued on Kayu Agung, dated on December 21, 1999.

5 Land owned certificate No. 642, Desa Burnai Timur, Pedamaran subdistrict, based on measurable letter dated 07/03/2001 No. 02/Burnai Timur/2001. Diterbitkan di Kayu Agung pada 12 Maret 2001

19,680 Normansyah

6 Land owned certificate No. 377, Desa Burnai Timur, Pedamaran subdistrict, based on decree letter of Regional Land Agency of South Sumatera Province dated on November 1, 1996 No. 520.1/10/26/PIR-TS/1996. Issued in Kayu Agung on 04/01/1997.

19,140 Tukimin bin Koseri

7 Land owned certificate No. 589, Desa Burnai Timur, Pedamaran subdistrict , based on decree letter of Regional Land Agency of South Sumatera Province dated on November 21, 1996 No. 32/HM.1/PIRTRANS-AT/BPN-26/1999. Issued in Kayu Agung on 21 Decemeber 1999.

22,000 Siswanto/Ngatino bin Torjo

8 Land owned certificate No. 637, Desa Burnai Timur, Pedamaran subdistrict, based on decree letter of Regional Land Agency of South Sumatera Province dated on May 15, 2000 No. 1/HM.1/PIR/BPN/2000. Issued in Kayu Agung on May 16, 2000.

5,015 Ali Tambat bin Toke


18,550 Wagiman bin Marto Suman

10 Legal land certificate No. 455, Desa Burnai Timur, Pedamaran subdistrict, based on decree letter of Regional Land Agency of South Sumatera Province dated on November 1,1996 No. 520.1/10/26/PIR-TS/1996. Issued in Kayu Agung on 04/01/1997.

20,000 Aronsin


20,000 Senen bin Warto Rejo

12 Land owned certificate No. 552, Desa Burnai Timut, Pedamaran subdistrict, based on decree letter of Regional Land Agency of South Sumatera Province dated on November 1, 1996 No. 520.1/10/26/PIR-TS/1996. Issued in Kayu Agung on 04/01/1997.

18,920 MY Ritonga





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SP 5 During audit, Cooperative Dwi Tunggal (SP 6) could demonstrate the right to use the land of all their members by showing their land title known as freehold tittle (Sertifikat Hak Milik). Sampel has determined by clustering random technique, as follow:

1. All of Cooperative Dwi Tungal (SP6) members plantation area are low risk area. 2. Cooperative Dwi Tunggal consist of 29 farmer group, there are 6 of them choosed randomly as

farmer group sampel. 3. Each farmer group has different number of member, sampel choosen randomly by calculation

(0.8√y), detail as follow:

Criteria Dwi Tunggal Farmer Group Member

Farmer Group 1 7 13 21 26 29

Number of Member 25 30 25 26 22 10

Number of Sampel 4 6 4 5 4 3

Document check to the list of Smalholder Plantation of Cooperative Dwi Tunggal found that almost all of members hold Land Tittle (SHM). Some of the land title has renamed to the new owner. According to interview result with Cooperative Committee and the members, most of the new owner are their children (beneficiaries). Farmer Group 29 members, different from other group members of Dwi Tunggal Cooperative, only hold Letter of Land owner issued by local head of Village. This group were additional group of transmiration program run by Government of Indonesia in 1992. This following table shows each land tittle of samples.

No Name Farmer Group

Land Tittle number

Width (Ha)

Remark

1 Gunarto 1 0077 21.925 -

2 Made Sukre 1 0001 19.440 Rename to Wayan Swarti;

Sukadana; Wekan and Swarte

3 Judin Bin Marpu 1 0025 19.250 - 4 Aspar 1 0029 19.815 Rename to Kabul Marzuki 5 Ahmad Faujan 7 0928 20.050 Rename to Sutarman 6 Sugeng Winardi 7 0073 18.740 Rename to I Wayan Rewa 7 Paid 7 0003 19.995 - 8 Jumino 7 0932 19.990 Rename to Ketut Budi 9 Suripto 7 0014 19.990 - 10 Darto 7 0015 19.980 - 11 Purwanto 13 0112 19.000 Rename to Sugiyono 12 Sriyono 13 0430 20.080 Rename to I Wayan Sawat 13 Mukamad 13 0431 20.215 - 14 Petrus 13 0330 18.620 - 15 Suwardi 21 0274 19.520 - 16 I Nyoman Sarna 21 0279 19.520 Rename to I Wayan Suarta 17 Ujang Kusnani 21 0284 19.650 I Nyoman Rake 18 Ali Muslimin 21 0289 19.820 - 19 Nana 21 0294 19.820 Rename to Wayan Triyono 20 Wahyuni 26 0396 21.690 Rename to Juwandi 21 Sugino 26 0395 22.000 - 22 Iswajis Setiawan 26 0373 19.560 -





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23 Wahyudin 26 0376 19.580 - 24 Silitonga 29 SKT/272 20.000

Letter of Land Owner issued by local head of Village. 25 Nengah Wartono 29 SKT/275 20.000

26 Sarmiadi 29 SKT/195 20.000

Based on field visit and interview with head of cooperative and head of group that there is no land disputes between fellow members or between members with communities because there are poles from PVC material as mark of boundary. KORPRI The right to use the land as Palm Oil Plantation of KORPRI member is legalize by a few documents as follow:

1. District Head of OKI Decree No. 115/SK/Bappeda/1986, October 22nd 1986, regarding Korpri Planed Plantation Land .

2. District Head of OKI Decree No. 115a/SK/Bappeda/1987, March 26th 1987, regarding the changes of Korpri Planed Plantation Land .

3. District Head of OKI Decree No. 94/SK/I/1992, regarding Land Clearing Permittion for Imron dkk. 4. District Head of OKI Decree No. 216/SK/I/1993, August 22nd 1993, regarding Using Pemit of

Korpri Plantation Land Mandate to Abu Bakar Pako dkk 185 KK/332 Ha.

Base on these documents, Korpri member who actually utilized the land as a plantation could upgrade their land rights into freehold status (SHM). During the certification process, not all of of Freehold document (sample) could showed. It rise as non-conformity. There are some land dispute cases risen between Korpri and local community since 1988, the record present as follow:

a. A declaration Letter of SY, December 10th 1988, regarding confirmation from SY (and 30 people) that they only use without right the Korpei’s land and as a paddy field, and a commitment the they would return back to the Korpri after harvesting season.

b. District Head of OKI Decree No. 38/SK/SOSPOL/1989, regarding Monitoring and enforcement of Land Acquistion inside Korpri Planned Plantation Land Areas.

c. Head of Lempuing Sub District No. 101/1014/Lemp/1992 regarding Report of Field Survey on Plantation Area. This report mentioned that Korpri’s Land has claimed by SY.

d. Head of Muara Burnai Village, No. 593/177/MB/LEMP/1992, October 19th 1992 reporting that SY has sold the KORPRI land without rights and authorization.

e. Head of OKI District Letter to South Sumatera Governor No. 101/0872/I/1996, Clarify of MS complaint that has use the Korpri Land.

f. Head of Plantation District Office of OKI letter No. 525/029/Perke/2001 regarding Korpri Land Claimed by community of Muara Burnai.

g. Letter of Head of OKI District to Governor of South Sumatera no. 1946/I/2001, regarding land claim by MS on Korpri’s Land

h. Letter of Head of OKI District to Governor of South Sumatera no. 345/I/2002, regarding land claim by WR on Korpri’s Land

During certification, some of Korpri’s area still in a conflict situation with local community. Both parties claim the their documents are original regarding the land rights. The case has reported to local police office and has recognized by local district government. Field checking also has been conducted involving multi stakeholders such as National Land Body (BPN) and district officers. The verification and field checked result still studied by local authority. KUD Bumi Jaya and KUD Maju Jaya have record of legal land use rights. During the main assessment, sampling for legal land use rights was taken based on statistic methode. The data of legal land use rights presented below: Land owned certificate sampling for KUD Bumi Jaya:





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No. Land entity Total area (m 2) Owned name in certificate

1 Land owned certificate No. 1033, Bumi Harapan Village, Tanjung Lubuk subdistrict, based on decree letter of Regional Land Agency of South Sumatera Province dated on May 15, 2000 No. 1/HM.1/PIR/BPN/2000 (05)

19,210 Suparno

2 Land owned certificate No. 917, Bumi Harapan Village, Tanjung Lubuk subdistrict, based on decree letter of Regional Land Agency of South Sumatera Province dated on November 1, 1996 No. 520.1/08/SPK-TS/26/1996 (231)

19,990 Suwardi B Rohman

3 Land owned certificate No. 684, Bumi Harapan Village, Tanjung Lubuk subdistrict, based on decree letter of Regional Land Agency of South Sumatera Province dated on September 28, 1999 No. 26/HM.1/BPN-26/1999

20,210 Sugianti


18,990 Idad B Ukar


18,990 Senen B Dite


19,960 Alek Salam B Alwi


19,580 Fisol B H.Muhtar

8 Land owned certificate No. 561, Bumi Harapan Village, Tanjung Lubuk subdistrict, based on decree letter of Regional Land Agency of South Sumatera Province dated on October 31, 1996 No. 520.1/56/SPK-TS/26/1996 (91)

20,660 M.Sidik B Matekun

9 Land owned certificate No. 801, Bumi Harapan Village, Tanjung Lubuk

19,000 Tohari B Saparuddin





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subdistrict, based on decree letter of Regional Land Agency of South Sumatera Province dated on November 1, 1996 No. 520.1/08/SPK-TS/26/1996 (115)


18,725 Suwarno B Saijo


19,790 Radi B Paikan


20,540 Bambang Sadi B Joyo Sopo


20,540 Muhrodi B Supaat


19,745 Mukini


20,335 Rohman Rasia B Marta


20,385 Marno B Atmo Jasmin

17 Land owned certificate No. 742, Bumi Harapan Village, Tanjung Lubuk subdistrict, based on decree letter of Regional Land Agency of South

19,670 Habib B Mahrur





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Sumatera Province dated on November 1, 1996 No. 520.1/08/SPK-TS/26/1996 (56)

18 Land owned certificate No. 1058, Bumi Harapan Village, Tanjung Lubuk subdistrict, based on decree letter of Regional Land Agency of South Sumatera Province dated on May 24, 2000 No. 5/HM/1PIR/BPN/2000 (17)

19,800 Sofyan Bin Noyodikromo


19,990 Ponimin

20 Land owned certificate No. 1043, Bumi Harapan Village, Tanjung Lubuk subdistrict, based on decree letter of Regional Land Agency of South Sumatera Province dated on May 24, 2000 No. 5/HM/1PIR/BPN/2000 (01)

21,030 Soiran bin Soirono

Land owned certificate sampling for Maju Jaya:

No. Land entity Total area (m 2) Owned name in

certificate 1 Land owned certificate No. 87, Suka

Jaya Village, based on decree letter of Regional Land Agency of South Sumatera Province dated on November 1, 1996 No. 520.1/07/SPK-TS/26/1996 (244)

19,840 Suparno B bin Citro Utomo

2 Land owned certificate No. 21, Suka Jaya Village, based on decree letter of Regional Land Agency of South Sumatera Province dated on October 31, 1996 No. 520.1/55/SPK-TS/26/1996 (82)

20,250 KT Katon b KT Lajor


21,070 Sudirman b Dalom Sahade


21,535 Wasiman b Saintono

5 Land owned certificate No. 233, Suka Jaya Village, based on decree letter of Regional Land Agency of South Sumatera Province dated on November 1, 1996 No. 520.1/07/SPK-TS/26/1996 (390)

18,200 Muhari

6 Land owned certificate No. 350, Suka Jaya Village, based on decree letter of

19,460 Atmo Sutrisno bin Karto S





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Regional Land Agency of South Sumatera Province dated on May 15, 200 No. 1/HM.1/PIR/BPN/2000 (138)


21,960 Santoso b Ismail

8 Land owned certificate No. 365, Suka Jaya Village, based on decree letter of Regional Land Agency of South Sumatera Province dated on May 15, 200 No. 1/HM.1/PIR/BPN/2000 (153)

21,525 Kasimin bin Mudasir


19,780 Tauhid bin Sodik

10 Land owned certificate No. 325, Suka Jaya Village, based on decree letter of Regional Land Agency of South Sumatera Province dated on November 29, 1999 No. 32/HM.1/Pirtrans-AT/BPN-26/1999 (232)

21,960 Daryo bin Parto Rejo


20,160 Jahri bin Mahmud

12 Land owned certificate No. 298, Suka Jaya Village, based on decree letter of Regional Land Agency of South Sumatera Province dated on November 29, 1999 No. 32/HM.1/Pirtrans-AT/BPN-26/1999 (205)

19,580 Sadiman bin Mamadi

Some of the legality of land ownership is still not available. Example: SP 7 Kav: 1030, 1093, 1041. This finding rise as non-conformity (NCR RSPO 00032) Compliance status : Non-Compliance NCR RSPO 00032 (Major non-conformity) : Some of the legality of land ownership is still not available. Example: SP 7 Kav: 1030, 1093, 1041

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

Findings:

There are no traditional rights or other rights in this area, in addition to the rights of farmers who were participants of a government resettlement program in 1986. Farmers manage the land belonging to the Gapoktan land allocated by the government for public transmigration program, self innitiative transmigration program in 1986. In addition to the open land also acquired land or land residual leftover





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located next to the land that is rightfully farmers themselves, it is not shared by the government as a swamp or tidal land that can not be processed at this time. There is also land acquired by purchasing from other villages. SP5

Most of the Cooperation/Smallholder member was coming from java and Bali island. Every member has gifted by the government (by this program) rights of land including: land of housing and garden and plant area with total 2.5 ha (in average). Regarding to the statements of local community leader there are no grievances and protest from indigenous communities according to the transmigration and smallholder program that conducted by the government, since the first year they come until this day. Some local people has also take part of transmigration program and organized as Group Farmer 29.

KORPRI There are some decree has issued by Local govenment according to District Head of OKI Decree No. 115a/SK/Bappeda/1987, March 26th 1987, regarding the changes of Korpri Planed Plantation Land, such as:

1. The location which planed for local government official start at 18th KM to 20th KM, width ± 2000 x ± 3000 metres changes into location that start at 17th KM to 20th KM, width ± 3000 x ± 2000 metres.

2. Order to Plantation Development Committee to start the land utilization. This land has claimed by local community and Korpri could not continue their production process in some areas. As the meeting result with Burnai Timur Head of Village, the claim based on record and documents, such as:

1. List of land owner, Burnai Timur Village, issued September 1997 by Local Head of Village. 2. Samples of Land Owner Letter (SKT) issued by local head of Village at February 11th 1990.

Both parties claim that they hold original legal records and documents. The case has been submitted to local district government for legal resolution. Both parties wait for the authority decree regarding the conflict resolution. Compliance status : Full Compliance

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

Findings :

Perhimpunan Sapta Tunggal Mandiri and each group member has/has no operational work plan for year 2016, 2017 and 2018. Operational work plan were made for 3 year and will be reviwed every year during yearly member meeting (‘Rapat Anggota Tahunan’). There is document “Rencana Kegiatan Perhimpunan Sapta Tunggal Mandiri tahun 2016-2018” consit of 21 activities such as: annual member meeting, internal management meeting for group manager and internal control system, monitoring audit to all individual member, operational vechicle procurement meeting, socialization and training including simulation of land fires, program for land fire preventive action through signboard instalment, etc.

Group manager has replanting program, replanting will begin in year 2017 for 400 ha in KUD Dwi Tunggal and finished in year 2020 in KUD KORPRI, detail replanting program has been explained on table 4 above. SP2 Record of budget and realization for 2015 available on the site with document number PM-FRM-005-06 Rev0 dated on December 31, 2015, with production budget was 4,130.00 tonnage and actual production realization in 2015 was 3,862.35 tonnage, with target achievement was 93.52%. Budgte record for 3 years projection from 2016 to 2019 also available on the site, when the production projection for 2016 is 6,000 tonnage with production per hectarage is15 tonnage/Ha. There is no budget or plan for replanting because the year of planting still in productive.





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The document also mentionade production cost projection for three years from 2016 to 2019, when the budget covered all activities for plantation such as circle and path spraying, road maintenance, IPM, fertilizing, harvesting, transportation, supervision, HCV maintenance, RSPO cost and others. SP4 Budget record and realization record also available in SP4 for 2015, when the budget production was 9,930.00 tonnage and yield per hectarge budget was 16 tonnage FFB/Ha. Based on production realization record, FFB production was 11,732.09 tonnage, with per hectarage production was 18.56 tonnage FFB/Ha, then the realization achievement was 118% from the budget. Based on budget production record for 2016, hectarage production will 15 tonnage FFB/Ha, and the total budget production for 2016 is 9,480.00 tonnage. Until during the audit, there is no any replanting program was mentioned in the budget and based on managerial interview, the smallholder manager said that the palm oil still in productive and no need to replanting process. Then, budget for three years document also available on the site, with document number SSB-FRM-005-004 Rev0 dated on 20/08/2015 about report of estate activity and projection for three years. This document showed the operation production cost from spraying activity, fertilizing, IPM, harvesting, road maintenance, salary and other cost related plantation operational. Compliance status : Full Compliance

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

Findings :

Perhimpunan Sapta Tunggal Mandiri has manual or guide of Good Agriculture practice in key activities, i.e. harvesting, maintenance/manuring (mature and immature), fertilization, land clearing, nursery, and pest management. The procedure also available at each group member e.g. in KUD Maju Jaya the list of procedures are:

• SOP Nursery (MJ-SOP-003-001)

• SOP Land Clearing (MJ-SOP-003-002)

• SOP Oil Palm Planting( MJ-SOP-003-003)

• SOP Fertilizer (MJ-SOP-003-004)

• SOP planting cover crop (MJ-SOP-003-005)

• SOP Spraying (MJ-SOP-003-006)

• SOP Kastration (MJ-SOP-003-007)

• SOP Pruning ( MJ-SOP-003-008)

• SOP Harvesting (MJ-SOP-003-009)

• SOP Loading FFB (MJ-SOP-003-010)

It was observed during the audit the implementation of SOP fertilizer was not consistent, manuring application dosage, volume was from smallholder and member agreement (meeting result) not from research recommendation as stated on the SOP MJ-003-004, e.g. meeting result on November 30, 2015 discussed about manuring program for year 2016. SP2 and SP4 Group smallholder has record document list about all of plantation activity with the procedure has covered from land clearing, nursery, fertilizing application, cover crop planting, sparying, prunning, harvesting, FFB loading, spraying calibration, IPM, hazardous waste management, triple rinshing for chemical container, chemical expired handling, internal and external communication, riparian bufferzone maintenance, HCV management, flora and fauna protection, natural stream management, and others.





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SP4 The SP4 has record of procedure implementation, example: 1. Fertilizing procedure number SSB-SOP-003-004 Rev 0 dated on 20/08/2015. This document

mentioned the fertilizing activity carried out based on research reecommendation from foliar sampling (soil and leaf analysis), accordance to dosage recommendation, time and application methode, and the fertilizing workers should use PPE during the activity. But, based on fertilzing record verification in Kelompok 3 Jaten Mulyo member dated in January 10, 2016, fertilizer type, and fertilizer dosage application (NPK PHONSKA), there is no mentioned about dosage, and fertilizing application also no meet with the procedure has sett by group smallholder. This is raised as a nonconformity.

2. Spraying procedure number SSB-SOP-003-006 Rev0 dated on 19/08/2015. The procedure mentioned, for path and circle spraying should use glyphosate+methyl metsulfuron and should use PPE during the activity. But based on field verification in field number 107 Member 4 (Kelompok 4) found the sprayers workers carried out the spraying activity without PPE and doesn’t have any training related spraying and still used Gramoxon. So this is no complie with group smallholder procedure. So this is raised as a nonconformity.

3. Procedure number SSB-SOP-003-004 Rev 0 dated on 20/08/2015 about fertilizing activity, mentionade that fertilizer application should carried out 10 pcs (sak) per 2 Ha. But there is no any explanation for this statement. This is raised as a observation for improvement.

Based on field assessment in: 1. Field number 109 member number 4 (Kelompok 4) S 3o35’57.00’’ E104o50’52.553’’ 2. Field number 182 member number 8 (Kelompok 8) S 3o35’56.769’’ E104o48’19.886’’ 3. Field number 221 member number 9 (Kelompok 9) S 3o34’42.399’’ E104o52’9.277’’ 4. Field number 232 member number 12 (Kelompok 12) S 3o34’17.871’’ E104o53’4.457’’ 5. Field number 267 member number 10 (Kelompok 10) S 3o34’59.142’’ E104o52’58.307’’ 6. Field number 309 member number 13 (Kelompok 13) S 3o35’53.786’’ E104o52’46.667’’ Field condition showed the all field has flat slope without undulating or hilly area. Only small area found in flied number 309 with litte undulating. This location have YoP 1992 (old planting) so there is no found any terracing has been applied for this location. All of location no have natural streams cross the area. But the smallholder (KUD) has sett the river protection for river in outside the field through provide the bufferzone with yellow marked in palm oil tree. SP2 The SP2 has record of procedure implementation, example: 1. Procedure number PM-SOP-003-006 Rev0 dated on 19/08/2015 about spraying. The procedure

mentioned, for path and circle spraying should use glyphosate+methyl metsulfuron and should use PPE during the activity. Also for chemical container after triple rinshing should keep in hazardous werehouse, and spraying tools also should washing after that keep in the box and not allowed for brought to home. Based on field assessment the KUD has place for chemical cleansing area and box for keep the PPE, but the sprayer workers still brought their PPE to their home. This not complie with the procedure, so this is raised as a nonconfromity.

2. Procedure for hazardous waste handling document number PM-SOP-003-014 Rev0 dated on 19/08/2015. The procedure mentioned all of hazardous waste type produced by estate should keep in hazardous store. But found the cartridge still not keep in the hazardous store. This is not complie with the procedure, so this is raised as a nonconformity.

3. Procedure number PM-SOP-003-24 Rev0 dated on 19/08/2015. This procedure mentionade river bank marks. Based on field assessment in field number 785 Member 6 (Kelompok 6) Mara Dua river bank has a river bank marked in palm tree with yellow colour, but this marked only applied in several tree closed to road, but for palm tree inside the field there is no found any marked in river bank area. This is observation for improvement.

Both of member group smallholders (SP2 and SP4) found some inconcistency of procedure implementation in the field such as sparying, fertilizing and waste management as explained above. This is raised as nonconformity (NCR RSPO 00033) Based on field assessment in field number:

1. Field number 785 member 6 (Kelompok 6) S 3o41’4.482’’ E104o47’14.839’’ 2. Field number 816 member 5 (Kelompok 5) S 3o41’4.48’’ E104o47’14.839’’





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3. Field number 839 member 1 (Kelompok 1) S 3o40’59.715’’ E104o47’40.912’’ 4. Field number 714 member 3 (Kelompok 3) S 3o40’41.13’’ E104o48’5.887’’ 5. Field number 665 member 4 (Kelompok 4) S 3o41’5.281’’ E104o48’7.745’’ 6. Field number 619 member 8 (Kelompok 8) S 3o40’59.829’’ E104o48’19.866’’

Field assessment showed the all of area has flat slope, and there is no found any undulating area. Also found in several areal crossed by river/natural streams. The KUD has sett and provide the river bank protection through the plat yellow colour installated in palm oil tree as a river bank marked protection from chemical activity. Compliance status: Non conformance NCR RSPO 00033 (Minor non-conformity) : Found inconsistencies between the applications of existing procedures in the field. Example: SOP Fertilization: SSB-SOP-003-004, SOP spraying: SSB-SOP-003-006

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

Findings:

Smallholder organization has keeps the fertilizer application record year 2014 and 2015. Types of fertilizers were used in KUD Maju Jaya are Ponskha, Urea as agreed during meeting on November 30, 2015. Volume of fertilizer used by each farmer in year 2016 such as Ponskha 10 zak/ kavling/ farmer equal with 500 kg per kavling. There are records of Urea distribution Desember 2015 and Ponska January 2015.

Smallholder organization kept year 2014 and 2015, FFB production for year 2014 for KUD Maju Jaya 12,792,390 kg yield 18.32 ton/ha and for year 2015 was 14,232,855 kg with yield 20.39 ton/ha

For all was as determined on the table below:

Estate Name Total area (ha)

Oil Palm Planted

area (ha)

Mature (Production) area

(ha)

FFB Production

(tonnes) 2014

FFB Production

(tonnes) 2015

Average yield

(ton/ha)* 2015

Bumi Jaya/SP 1 1,150 1,150 1150 19,222,354 16.715

Patwa Usaha Mandiri/SP 2

400 400 400 3,811,757 9.529

Tunggal Mulya/ SP 3

592 592 592 8,190,249 13.84

Sinar Sawit Bahagia/ SP 4

632 632 632 12,473,705 19.73

Dwi Tunggal/SP5A & SP 5B

1,373.80 1,373.80 1373.80 23,250,268 16,92

Tani Mandiri/SP6 691 691 691 10,766,306 15.58 Maju Jaya/SP7 698 698 698 12,792,390 14,232,855 20.39 KORPRI 496 496 496 5,208,708 10.50 Total 6,033 97,156,274 16.10

SP4 SP4 has record for fertilizing application carried out in January 10, 2016 for Member number 3 (Kelompok 3) based on minutes of fertilizer activity, but the document record no mentioned about dosage application this was raised as a nonconformity in principle and criteria 4.1 above. Member group smallholder has record of total fertilizer application for 2015, this date showed the total fertilizer has been application by smallholders. The data will presented below:

No. Member Name Tonnage





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1 Cahaya Maju 1,106.065 2 Tani Rejo 1,162.526 3 Jaten Mulyo 1,179.592 4 Ngudi Rejeki 1,093.533 5 Darma Tani 806.707 6 Bina Karya 1,250.332 7 Harapan Baru 1,086.862 8 Sejahtera 776.414 9 Sembilan Sakti 730.420 10 Danau Jaya 531.151 11 Danau Indah 489.033 12 Tani Mulya 591.102 13 Makarti 928.362 Total 11,732.099

SP2 Record of fertilizer application available in the site, but the record no mentioned about dosage application, only showed the fertilizing application process based photograph. This also has been mentioned as nonconformity in principle and criteria 4.1 above. Member group smallholder has record of total fertilizer application in 2015, i.e.:

Member number

Member of person

Total palm tree planted

Tonnage

1 25 6,750 368.148 2 24 6,480 447.207 3 25 6,750 460.588 4 25 6,750 521.273 5 25 6,750 399.263 6 25 6,750 435.970 7 25 6,750 585.215 8 26 7,020 635.215

Total 54,000 3,862.356 Compliance status: Full Compliance

Criterion 4.3: Practices minimise and control erosi on and degradation of soils.

Findings : Based on field observations on KUD Maju Jaya, independent farmers' land has flat topography so it does not have a program to conduct the conservation. KUD Bumi Jaya has HCV management and monitoring program in 2016 include planting trees on river banks and monitoring of existing HCV signboard. Based on existing recordings, have been implemented the installation of a sign of HCV that is highlighted in yellow in the tree as a sign of the conservation of river border. The sign is a sign of prohibition to conduct chemis and fertilizer in the river border. During a visit to the field, seen that all the plant is mature that the planting year 1991 dan1992 so has not been seen again planting land cover. Based on information from soil maps and field observations, there are no peat in the area KUD Maju Jaya so that there is no program for the drainage system. Both of SP4 and SP2 based on field assessment in field above (criteria 4.1) the current condition was old planting with year of planting was 1992, so there is no cover crop found and no terracing. All area member smallholder above majority has flat slope with little undulating in some area. But, the KUD has prepare procedure for cover crops and terracing if replanting will carry out by group smallholder, and there is no peat soil in the area with procedure number PM-SOP-003-005. Compliance s tatus: Full Compliance





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

Findings :

Organization has keeps record on pesticide and fertilizer application year 2012 and 2013. Information about record fertilizer application has described on indicator 4.2 above. Pesticides (herbicides) used are Supretox 276 SL (Paraquat dichloride 276 g/l), Gramoxone 276 SL (Paraquat dichloride 276 g/l), supremo, Roundup 486 SL (isopropylamina glyphosate 486 g/l) and Noxone 297 SL (Paraquat dichloride 297 g/l).

Organization has conducted awareness programs about maintain natural water resources (river and swamp) in form of signboard where the signboard are installed on the main road, estate and strategic location, terracing and setting palm fronds in parallel with water flow. Both of SP4 and SP2, they have surface water quality protection, the smallholder member group has carried out activity to protect the surface water quality, such as river bank protection from any chemical activity through the yellow marked in the palm tree and the group smallholder has carried out periodically the water quality analysis. Based on water quality analysis record, the water condition still meet with regulation and standard.

Compliance status : Full Compliance

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

Findings : KUD Maju Jaya has provided integrated pest control procedures with the document number MJ-SOP-003-013 rev 0 effective date August 19, 2015. In the procedure stated that the monitoring carried rutin1 times a year. The cooperative has conducted monitoring and control of pests and diseases, among others, the monthly census rat pests, pest attack leaf census and census fire caterpillar. Leaf pest census conducted in May 2015, the census rat and fire caterpillar census conducted in August 2015. KUD Maju Jaya has conducted training on integrated pest management, and fertilizer spray application on September 29, 2015 conducted in KUD Tunggal Mulia SP3. Evidence of training records is attendance list and photographs of training implementation. Group smallholder has procedure for IPM with document number PM-SOP-003-013 Rev0 dated on 19/08/2015. The procedure mentioned the census should carry out as early warning system for mature and immature palm oil for all pest and desease type minimum in once year, or depend on pest and desease condition in the field. Smallholder has person incharge for IPM implementation and has been trained by group smallholder evidenced with training certificated. The training carried out on September 29, 2015. Based on field assessment, there is no indication of pest and desease attack, because the year of planting both of two members group smallholder (SP2 and SP4) was in 1992. For this, the smallholder not carried out early warning system or census, so this is an observation fro new improvement. Compliance status : Compliance with observation





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

Findings :

Organization has conducted how to use agrochemicals and OHS training (include agrochemical storage, how to spraying which safe and efectif, emergency actions and handling of waste agrochemical container) on date of June 30, 2015 where attendance list and documentation available.

Agrochemicals for pesticide (herbiside) used are supretox 276 SL (Paraquat dichloride 276 g/l), gramoxone 276 SL (Paraquat dichloride 276 g/l), supremo, roundup 486 SL (isopropylamina glyphosate 486 g/l) and noxone 297 SL (Paraquat dichloride 297 g/l) and these pesticides have been registered and approved by The Ministry of Agriculture. Number of register for roundup 486 SL (isopropylamina glyphosate 486 g/l) is RI.01030120001 560, gramoxone 276 SL (Paraquat dichloride 276 g/l) is RI.01030113 436, noxone 297 SL (Paraquat dichloride 297 g/l) is RI.1907/1-2008/T, and supretox 276 SL (Paraquat dichloride 276 g/l) is RI.2087/9-2008/T.

Implementation of spraying in field was appropriate best practice such as the use of agrochemical according to species, dosage, application method and time as seen as 4 smallholder’s scheme area; and the use of PPE (masker, helmet, boots, long shirts and gloves). Based on record and interview with farmer that there are no cases of pesticides poisoning of applicator.

Pesticides storage placed in location not easily reached by childrens and separated from other materials. Futhermore, waste pesticides container disposed in a hole that has been provided or collected at the secretariat independent smallholder group (Gapoktan) as illustrated in flowchart of disposal of waste pesticide storage. If has full so the hole will be backfilled soil. Both of SP4 and SP2 there is no record showed that the sprayers has been trained about chemical handling, becuase found the sprayers still used the gramoxene. This is raised as a nonconformity in principle and criteria 4.1.1 above. Then during the field assessment in member smallholder in SP4 found the sprayer workers not used PPE during the spraying activity. This is raised as nonconformity (00034) Then when asked to sprayer, they said that the chemical not stored in chemical stored but, they brought to home, this is not comply with group smallholder procedure and raised as a nonconformity (NCR RSPO 00035) Compliance status : Non Compliance NCR RSPO 00034 (Minor non-conformity) : Found the workers are not wearing PPE when doing the spraying. Example: SP 4 NCR RSPO 00035 (Minor non-conformity) : Agrochemical for spraying material stored in each home worker

Criterion 4.7: An occupational health and safety pl an is documented, effectively communicated and implemented.

Findings :

Perhimpunan Sapta Tunggal Mandiri and all members define a policy on health and working safety signed by chief of grop member (Ketua KUD) and the secretary.

PerhimpunanSapta Tunggal Mandiri and all members has owns a document of risk analysis from working stages such as activity of spraying, fertilizing, harvesting, weeding, slashing midrib, however risk assessment for FFB transportation, loading of FFB to truck etc and preventive action it are not inlcuded on the risk assessment document (FRM-MJ-005) dated August 19, 2015.





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There is evidence of participating in a training on safe working practices and emergency actions, procedure and handling an accident, if occurs for listed workers in KUD Maju Jaya dated January 28, 2016. There are attendance list, photograph as evidence of training performance. There are list of 11 harvesters (FRM-MJ-008); list of 11 Sprayer; list of 11 manuring workers. Both of SP2 and SP4, they have the policy for Health and Safety, with contained about the smallholder will fulfill all regulation related health and safety, communicate to all workers level, contractor and client also for guest. This policy issued on 2015 and signed by Head KUD. Record of safety and health training and briefing for all level workers are available, example: 1. Minutes of training for first aid and PPE, spraying and fertilizing callibration conducted on

September 10, 2015, attended by all of member of KUD Sapta Tunggal i.e.:43 person from 8 member of group smallholder.

2. Minutes of training fro safety and health, HCV and Human resources conducted on September 28, 2015, attendad by 25 person from all KUD member under Sapta Tunggal Mandiri.

3. Minutes of briefing for PPE using conducted on October 17, 2015 evidenced with photograph. Record of environmental health and safety risk assessment also available with document number SSB-FRM-005-011 for SP4 and PM-FRM-005-14 for SP2. This document has informed about work incident and risk assessment identification for all work location in estate. The document also informed how to handling and control the risk and minimize to incident. SP2 Procedure for OSH identification with document number PM-SOP-003-26 and SSB-SOP-003-026, has sett the how to measurable scoring for OSH identification risk and how to handling, source of contamination/pollution, and others. Type of risk has been categorized into several level such as trivial, tolerable, moderate, significant and intoralable. Record of risk identification also available, and has been identified all activity such as harvesting, prunning, FFB loading, spraying, fertilizing. Record of first aid and PPE briefing available, conducted on September 10, 2015, attendad by 4 person from every member of SP2. Compliance status : Full Compliance

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

Findings :

Perhimpunan Sapta Tunggal Mandiri has a training program/plan year 2015/2016 including topics such as nursery training, dynamic group training, cooperative training, HCV training, agrochemical and OHS training and Good Agriculture Practice training. Record of training record and human resoruce development for SP2 are available. On the training record has been identified training program for 2015, with type of training covered RSPO brief, OSH and first aid brief, PPE brief for harvesters and sprayers, HCV, IPM, and others. Record of training implementation for 2015 above has been conducted, complete with training date, and relization status. Both of SP4 and SP2, has a training record program for 2016 also available, in document number FRM-SSB-010 dated on January 28, 2016 with training identification needed. Compliance status : Full Compliance

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

Findings :





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Each group member (farmer cooperatiion) has idetify their environmental aspect, impact and risk from all existing activities. It was shosed during the audit KUD Dwi Tunggal has document “ Identifikasi Aspek/Bahaya K3 & Dampak AK/resiko K3” issued on August 15, 2015, however identification of aspek/impact/risk and hazard only cover activities from Harvseting, Pruning, and planttaion maintenance. There no information for others activities such as FFB transportation, warehouse activities and agrochemical storate and hazardouse waste storage activities both in KUD Dwi Tunggal and other group members activities.

From identified idetified aspect, risk and impact it was sight KUD Dwi Tunggal has planing to manage all identified environmental impact such as waste water management through simple waste water treatment. Located behind cooperation office. However there is no record of environemntal management that has been conducted. Compliance status : Full Compliance

Criterion 5.2: The status of rare, threatened or en dangered species (ERTs) and high conservation value habitats, if any, that exist in the plantatio n or that could be affected by plantation or mill management, shall be identified and their conservat ion taken into account in management plans and operations.

Findings :

Each member of Perhimpunan Sapta Tunggal Mandiri has SOP for flora and fauna protection (DT-SOP-003-023) for KUD Dwi Tunggal issued on August 19, 2015. They have list of protected flora and fauna suh as: Mamal: Malayan porcupine(Hystrix brachyuran); Sunda pangolin (Manis Javanica); Aves: Javan ponheron (Ardeola speciosa); Black winged kite (Elanus caeruleus); Crested serpenteagle (Sprilornis cheela); Blue-eared kingfisher (Alcedo meninting); White-throated kingfihser (Halcyon smyrnensis); Stork billed kingfisher (Pelargopsis capensis) There is a dedicated person in each smallholders group has been appointed to monitor conservation area, in KUD Tani Mandiri has decree letter no. 02/SK/KUD-TM/SM/LPJ/2015 rearding assignment person incharge for monitoring conservation area and community social culture as hig conservation value. Farmers could explain the procedure/mechanism to handle conflict with protected species. Both of SP2 and SP4, there is no record of list flora and fauna protected by national and international law. This is raised as a nonconformity (NCR RSPO 00036). Smallholder group has procedure for conservation flora and fauna with document number SSB-SOP-003-023 Rev0 for SP4 and PM-SOP-003-23 Rev0 for SP2 dated on 16/09/2015. Procedure has mentioned and sett for wildlife conflict, flora and fauna protection, until punishment for workers if any illegal hunting, catching and others activity will damage the flora and fauna. Smallholder has provide the HCV training conducted on September 28, 2015 for all workers level, then the SP4 has appointed person in charge for HCV management implementation through the letter number SK.No. KUD-SSB/SP4/IX/2015 dated on September 15, 2015. And for SP2, HCV training has been carried out on September 28, 2015, and also has been appointed person in charge for HCV management implementation through letter number SK No. 08/KUD-PUMA/SP2/IX/2015 dated on September 15, 2015.

Compliance status : Non Compliance NCR RSPO 00036 (Major non-conformity) : Not all species of flora and fauna that exist in the estate already identified

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

Findings :





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Group management can explain clearly the measurement to dispose hazardous agrochemical and their cotainer. Group manager provide separation waste bin for hazardouse waste and non hazardouse waste. However it was observed during the field checking in KUD Dwi Tunggal, group manager has not provide proper storage location for hazardouse waste such as used container (pesticide). The company has instalation for waste water, however it was sight Sapta Tunggan (in KUD Dwi Tunggal) directly dispose the waste through publict drain without ensuring that the waste water quality still under goverrement regulation. Sapta Tunggal also has not specified record for hazardouse waste (used diesel oil) monitoring in accordance to instruction labels as stated by the manufacturer. This is raised as non conformity. No SOP for hazardouse management for collecting storage and disposed to licensed vendor

Sapta Tunggal Mandiri prepares mechaism for recivieng complaint from local community and other parties. Until the audit time there is no complaints from local communities related to disposal of hazardous chemicals and its resolution, if any, were kept by document control staff. Both of SP2 and SP4 has carried out waste handling management, but found for hazardous waste i.e.: cartridge still not managed very well, when the cartridge found not keep in hazardous waste store, this is raised as a nonconformity (NCR RSPO 00037). There is no any record about complaint related hazarodus waste handling from local community, this is will verify in the next audit. Compliance status : Non Compliance NCR RSPO 00037 (Major non-conformity) : Perhimpunan Sapta Tunggal Mandiri not yet have hazardous and toxic waste disposal mechanisms and non-hazardous and toxic since the waste produced.

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

Findings :

This criterion is not applicable to independent smallholders. Compliance status : Not Applicable

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

Findings :

Perhimpunan Sapta Tunggal Mandiri has zero burning policy for all plantation activities and waste disposed. It is stated on Environmental policy section 3 document PSTM-KBJ-04 rev 0, issued on January 20, 2016. All group members also has similar policy, it was sight on Environmental Policy KUD Tunggal Mulya. During audit, organization was not used fire for elimination of pest and diseases but farmers understand emergency responses procedure/mechanism against land fires.

There is land burning on Ocotber 10, 2015 in Dwi Tunggal smallholder area with total 142 ha and still has potential risk for fire in planttaion area especially during dry seassion, however this is no identify as high potential risk in Risk assessment document. Sapta Tunggal Mandiri has procedures emergency responses againt land fires (DT-PRO-004-06) issued on August 19, 2015. The procedures also require all member has fire protection equipment such as water pump; hose; nozzle; spayer kap; etc. However during the audit all infrastructures required are not avaiable yet both in Sapta Tunggal office and also in KUD Dwi Tunggal location. This is raised as non conformity. (NCR RSPO 00038)

Perhimpunan Sapta Tunggal Mandiri has fire protection team as stated on DT-STR-001-02 dated August 19, 2015.





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Compliance status : Non Compliance NCR RSPO 00038 (Minor non-conformity) : Fire-fighting equipment is not enough for overcome the potential for a major fire

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

Findings :

This criterion is not applicable to independent smallholders. Compliance status : Not Applicable Criterion 6.1: Aspects of plantation and mill manag ement that have social impacts are identified in a participatory way and plans to mitigate the negat ive impacts and promote the positive ones are made, implemented and monitored, to demonstrate con tinuous improvement. Findings: Social impact of Smallholder Group activities has participatory identified based on a report that developed and facilitated by PT Tania Selatan in November 2013. There are three main informants that have been participated to the social impact identification and the development of management plan. All of those three participants has involved in interview process, Focus group Discussion and participatory field observation and field verification. Impacts that has been identified are:

1. Smallholder income 2. Working opportunity to local community 3. Education Improvement opportunity 4. Health Facilities Improvement 5. Security Thread such as improvement of criminality 6. Improvement of community lifestyle 7. Improvement of public Facilities 8. Improvement of new local small medium business

An Impact Management and Monitoring plan has been develop and documented as a matrix. This matrix has detail information such as Objectives, indicator, baseline, target, activity, monitoring, budget, and PIC. There are 7 objective that has determined in order to manage and monitor the 8 kind of social impacts, such as:

1. Improvement of smallholder quality and capacities 2. Institution Empowerment 3. Form and organized Farmer/Smallholder Group 4. Socialization and communication regarding harvesting techniques; FFB requirements; and

best agriculture practice 5. Improvement of interaction and communication with main grower and Mill. 6. Improvement of interaction and communication with smallholders 7. Develop a demonstration plot for independent smallholder

This management plan has consulted with affected parties on September 2013, such as SP5 committee, smallholder member and local community leader. A Minute of Meeting, September 05 2013 has shown during audit as the evidences of local affected parties participation on Social Impact Management Plan Development. The documents and records regarding Social Impacts scope only cover actifities of SP1, SP2, SP3, SP4 and Korpri. Three other group member of Sapta Tunggal Mandiri (SP5, SP6 and SP7) has not yet being part of these documents scope. This three groups member also could not show evidences regarding





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social impacts assessment and management plan. and the group committee can not clearly explain regarding smallholder activities impacts. Records and/or documents regarding social impacts of smallholder operation cannot showed during certification. This situation rise as non-conformity. SP5, SP6, SP7 has not yet showed evidences regarding the development of Social Impact Management Plan. This situation also rises as non-conformity (NCR RSPO 00039) Compliance status: Non – Compliance NCR RSPO 00039 (Major non-conformity) : Social Impact Assessment has not covered SP 5, 6, 7

Criterion 6.2: There are open and transparent metho ds for communication and consultation between growers and/or millers, local communities a nd other affected or interested parties.

Findings: Smallholders has documented procedure regarding communication at August 19th 2015. Dwi Tunggal Cooperative (sample) has also documented procedure regarding communication such as: a. SOP No. DT-SOP-003-018, “Communication of Internal Circumstance”. This procedure only stated

scopes, application, PIC and requirement (time limit and communication tools/devices). b. SOP No. DT-SOP-003-018, “Communication of External Circumstance”. This procedure stated scope,

application and requirements as follow: • External Communication acceptance: a) Regular-Routine communication with legal stakeholder; b)

Information request from Media and NGO • Response to Communication.

c. SOP No. DT-PRO-004-013, “Communication, Consultation and Coordination with Stakeholder”. This procedure stated scope, application, responsible person, and reference, kind of communication, operational definition, procedure and general requirement. The main responsible officer that has clearly defined is “public speaker” and “public relation” (HUMAS).

During audit, Smallholders has shown evidences regarding communication in order to provide information to stakeholders, that has recorded in a logbook, such as: a. Internal incoming and out-coming logbook. This logbook only record communication process with

members. Communication recorded on this logbook such as information distribution regarding FFB prices.

b. External incoming and out-coming logbook. This logbook only record communication process with external stakeholder. Communication recorded on this logbook such as: • Regular letters from OKI District Office of Plantation regarding official FFB price. • Regular letters from Tania Selatan regarding invitation for meetings. • Regular letters from local partner for fertilizer supplies • Letters from local village stakeholders such as Head of Village, local community that has some

kind of importance such as meeting, coordination and fund support request. The external letters has responded and archived as determined retention time stated by the procedure. c. Minute Meetings with relevant stakeholders such as members (Smallholders), PT Tania Selatan, Local

Head of Village and local Head of Sub District. As stated by the procedure No. DT-PRO-004-013, the dedicated person responsible for communication and communication wit stakeholder is known as Public Relation Officer. The dedicated person appointed as Public relation is Lead of SP 5 Cooperative Committee. The Job Desk of public relation has documented on doc No. DT-TTJ-002-017, “Public Relation: Task and Responsibility”, issued on August 15th 2015. Compliance status: Full Compliance Criterion 6.3: There is a mutually agreed and docum ented system for dealing with complaints and grievances, which is implemented and accepted by al l parties.





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Findings: Smallholder Group has issued a policy regarding communication. This policy consist two main sub issues as follow:

a. Publicly and non publicly available document. b. Open communication to all stakeholders to gain better understanding regarding smallholders

group operations and performances. This policy has two operational guidances that documented as SOP. First SOP regarding internal communication and the second regarding the external communication. On the second SOP (External Environment Communication) stated that all incoming communication must response acurately by the head of smallholder group (KUD). All of communication records will be maintained by the secretary. The policy and the SOP has maid by KUD/Smallholder group committee and has socialized to all members and also attended by some strategic eksternal stakeholders. There are some communication records with stakeholders showed during audit (as sample), such as: a. A Letter from Dwi Tunggal Cooperative No. 048/2015 to Local Office of Plantation, asking for the

shifting of group 27 member plantation area. b. A letter from Local School No. 41/2015 to Dwi Tunggal Cooperative asking for Student Intership

Placement. This letter has responded by a letter No. 93/2015, regarding internship permittion to the 4 students.

c. Minute of Meeting, September 5th 2013 regarding HCV areas, attended by farmer groups committee and management officer of PT Tania Selatan.

Compliance status: Full Compliances Criterion 6.4: Any negotiations concerning compensa tion 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 throug h their own representative instit utions. Findings: Cooperative has develop procedure regarding communication to stakeholders, such as: a. SOP No. DT-SOP-003-018, “Communication of External Circumstance”. And SOP No. DT-PRO-004-

013, “Communication, Consultation and Coordination with Stakeholder”. These two procedure are also genaral communication guidance for conflict/dispute resolution.

b. SOP DT-PRO-004-04, sissued at August 19th 2015, regarding “Conflict Resolution”. This procedure clearly stated about how to response and investigate claims and found resolutions.

Interview with Cooperative committee and Farmer group committee found that there were no social conflict or land dispute among members and/or local community. There were no compensation that paid for external parties. The only compensation case were compensation for members whose plant was burn. Cooperative facilitate members to ask compensation to Private Grower regarding their loss because of their burn plantation during summer season (2015). Negotiation regarding the value of compensations still on process.

Compliance status: Full Compliance

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

Findings: Smallholder group employ some workers for maintenance and harvesting activities. Most of these jobs order (working activities) manage by the committee. Committee responsible for recruiting, manage and





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pay the workers. All of worker status were piece rate worker. Payments records to workers has shown during certification. The payment records (such as payment record in January 14th 2016) consist information as follow:

a. Acivities: Harvesting b. Farmer Group name : Group 26. c. Working days total: 110 Working days d. Salary paid: IDR 7.700.000,-

Base on this record, the rate of harvesting activities is IDR 77.000 per working days. This records has no infomation regarding how many worker that has involved to this activities and detail information regarding each workers payments. Workers of two main activities (harvesting and Maintenance) has interviewed to verify the payment records complience to minimum wage regulations. The interview ressult detail as follow: a. A harvester is paid as piece rate, IDR 2.000 per bunch. The harvesting productivity range are 120 to

300 bunch per day for a couple (2) harvester. It means that a harveter could earn IDR 120.000 to 300.000 per day. This number has over the minimum wage requirements.

b. A maintenance worker (pruning) piece rate is IDR 600.000 per kavling. They could finish this job order from 3 to 5 days. It means that the worker earn around IDR. 120.000 to 200.000 per day. This number has over minimum wage requirement.

All worker were un-permanent worker that paid as piece rate worker. There’s no benefits such as health insurance provide by cooperative for them. Interview result found that most of the worker do not hold BPJS (Health Insurance). The most reason is they dont know how to apply this insurance. They hope, cooperative would colectively coordinate the worker health insurance aplication. This situation rise as an observation for improvement. Compliance status: Compliance With obeservation Criterion 6.6: The employer respects the right of a ll personnel to form and join trade unions of choice and to bargain collectively. Where the right to freedom of association and collective bargaining are restricted under law, the employer f acilitates parallel means of independent and free association and bargaining for all such person nel. Findings: Cooperatives has documented a policy respecting the right of all personel right to freedom of association. The freedom of associations scope according to this policy detail as follow: a. To all monitoring body, staff and members, both male and female. b. To all personnel that has no specific task because of emergency situations, or because of order and/or

mandate from committee and stakeholders. c. As fulfillment of citizen’s aspiration rights. d. As compliance to regulations and laws. Interview result with workers confirm that there’s no prohibition to them for joining social, politics and all kind of association. Some of cooperative member were found as active member of a political group and social group. Cooperative it self is a group that consist of 29 social group known as palm oil farmer group 1 to 29. Compliance status: Full Compliance Criterion 6.7: Children are not employed or exploit ed. Work by children is acceptable on family farms, under adult supervision, and when not interf ering with education programmes. Children are not exposed to hazardous working conditions. Findings: Cooperative has documented a policy regarding child worker. The policy stated that the smallholder organization has commitment of creating a conducive working environment which prohibited child worker





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in all level operations area including all business partners. The child worker difine as a worker under 18 years old as refer to ILO convention. This policy has communicate to all farmer group committee and workers. Checking into worker list found that all workers were above 18 years old. Field check to 6 working areas of different farmer group has conducted during audit, there was no child found working on these areas. Compliance status: Full Compliance

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

Findings: Cooperative has documented a policy regarding Equal Opportunity. In order to operate the business, cooperative force their self to comply their commitments to support principles of justice and non discriminative practices, treat all personnel with repectfull treatment, free from discriminative issues. This policy has specific objectives, such as:

a. Prohibit discrimination based on gender, race, etnic background, disabilities, sexual orientation, age and religional believe at all level of operations area.

b. Commitment to develop global workforce that has cappacities bases assessment and recruitment.

Records regarding members and worker list has shown as follow:

a. List of Cooperative members from Group 1 to 29 year 2016. b. Cooperative worker list 2016.

These records showed that members and workers consist of various ethnics, religion and gender background. No Indication found that the group has discrimination issues. Interview result with members and workers confirm that cooperative committee and farmer group committee treat them well and in equal opportunity manner. Male and Female worker accept the same rate for the same jobs order (chemist and fertilizing). Compliance status: Full Compliance

Criterion 6.9: A policy to prevent sexual harassmen t and all other forms of violence against women and to protect their reproductive rights is d eveloped and applied.

Findings: Smallholder Group has documented a policy regarding protection to sexual harrassment. This policy has clearly stated sexual harrasment definitions, how to implemented this policy, how to manage the case and the enforcement priciples. A procedure has also documented as the implementation guidance. The procedure documented as doc No. DT-PRO-004-09, august 19th 2015, signed by Cooperative Committee. This procedure has clearly stated the goals/objectives, scope, responsible person, refference, definitions, and detail procedures. There is not found recording of socialization sexual harassment policy and complaint procedure. This situation also rises as non-conformity (NCR RSPO 00040).

Compliance status: Non Compliance NCR RSPO 00040 (Major non-conformity) : Records of socialization sexual harassment policy and complaint procedure have not available yet.

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





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Findings: Smallholder group (that has been organized themselve as an Cooperative) has farmer groups as their member that consist of smallholders. The payment to each farmer coordinated by farmer group committee. Dwi Tunggal Cooperative has 29 farmer Group members. All of farmer groups has a person that stand as Cooperative committee member that has main responsibility on monitoring cooperative operations regarding agricultural practice and financial management, including payment to each smalholder. This system give all members guarantee regarding transparency. There were payment records to each farmer group showed during certification (evidence sample of Dwi Tunggal):

a. Payment List Receipt of Smallholder Group Members, October 15th 2015. This record contain information regarding each Farmer Group Committee (Head and Finance) who recieve the payments; the number of each group member and; the number of payments; .

b. Payment list to each smalholder members, September 09th 2015 (group 16). The list consist information regarding farmers name of farmer group; gross payment, deduction as members commitment to cooperatives and farmer groiup; saving; and nett payment.

c. A letter from District Office of Plantation, March 17th 2015, regarding FFB price. d. FFB Price list per January 2016. This records attached at office information board and also

distribute to all farmer group committee. There were 12 smallholders form different farmer group has been interviewed. They all exclaim that all transactions has conducted tranparently. If there’s any questions regarding payment, they will first ask to farmer group committee (that has also part of Cooperative committee). If the farmer group committee, could not give detail technical answer, the member would facilitate to meet the relevant cooperative committtee. Compliance status: Full Compliance

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

Findings: Smallholders Group (sample) showed logbook of social contribution. The book consist information regarding all of fund that spent by the group to social activities. This book has records all transaction since March 2013. The fund rise from cooperative operations profit (transportation and saving-loans business). As recorded at the book, the contribution for local community are (example):

a. Charity for a passed away members family (descendant), April 20th, 2013, IDR 1.000.000,-. b. Contribution to local kindergarden facilities, November 1st, 2013, IDR 2.000.000,- c. Contribution for Local Football Team, March 20th, 2015, IDR. 2.000.000,-

Compliance status: Full Compliance

Principle 7: Responsible development of new plantin gs

Findings:

This principle is not applicable because there is no new planting or activities outside of the existing area. The oldest planting activitiy was done in 1997. There are planted trees after year 2005 however it were not conducted at new development area that is conversion from rubber trees.

Not Applicable.

Criterion 8.1: Growers and millers regularly monito r and review their activities and develop and implement action plans that allow demonstrable cont inuous improvement in key operations.





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Findings:

Perhimpunan Sapta Tunggal Mandiri has internal audit procedure with document number PSTM-Pro-004-010 rev 00 valid date January 20, 2016. KUD Bumi Jaya has conducted internal audit for fulfill requirement and RSPO certification preparation on October 21, 2015. KUD Bumi Jaya has result of internal audit and has conducted corrective action for the raise nonconformity. Compliance status: Full Compliance

3.2 Identified Non-conformances, Corrective Actions Taken and Auditors Conclusions

A total of 24 nonconformances were identified during the main certification assessment. These consisted of 20 major non-conformities and 4 minor non-conformities. For the major non-conformances, the company has taken the necessary corrective action to close these non-conformances within 60 days of completion of the assessment, and this was verified by the audit team through checks of documents submitted by the company. For the minor non-conformances, the company has taken corrective action against these as well, and for those which could not be verified as closed through document checks, the closure of these minor non-conformities will be assessed during the next surveillance audit. A summary of all identified non-conformances, corrective actions taken and auditor conclusions is as below:

Element 1.1. Major indicator 3 of RSPO Group Certification : The Group Management Documentation shall include th e documenting and monitoring of all the individual group members for membership status, pro duction process, and other relevant aspects to ensure compliance with the relevant RSPO Standar d for Sustainable Oil Palm Production and the RSPO Group C ertification Requirements. NCR RSPO 00017 (Major non-conformity) : Perhimpunan Sapta Tunggal Mandiri not yet have a monitoring mechanism for membership status Correction : Have been established a monitoring mechanism for membership status. Corrective Action: Ensured a monitoring mechanism for membership status established, documented and socialized to all members and understood Date of Closure : February 25, 2016 Auditor Conclusions : Closed The Company has submitted evidence of improvements such as union memberships mechanism procedure with document number PSTM-SOP-06-06 revision 0 the effective date of February 19, 2016. In the procedure listed union membership requirements, the requirements for becoming a new member, the requirement to stop or get out of the membership and the replacement membership and mechanism to dismiss or remove members. Element 1.1. Major indicator 4 of RSPO Group Certification : The Group Manager shall specify in the Group Manage ment Documentation the maximum number of members that can be supported by the management system and the human resource and technical capacities of the Group Manager. NCR RSPO 00018 (Major non-conformity) : Perhimpunan Sapta Tunggal Mandiri has not set maximum limit of member numbers Correction : Has set the maximum limit the number of members adapted to the conditions Sapta Tunggal Mandiri





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currently Corrective Action: Ensured the determination of the maximum limit number of members are documented and socialized to all members Date of Closure : February 20, 2016 Auditor Conclusions : Closed The Company has submitted evidence of improvements such as union memberships mechanism procedure with document number PSTM-SOP-06-06 revision 0 the effective date of February 19, 2016. In the procedure listed on limiting the number of group members Sapta Tunggal Mandiri. The procedures contained in the maximum number of members that can be managed by the Association of Sapta Tunggal Mandiri as much as eight cooperatives with the maximum number of farmers as many as 3,000 farmers Element 1.2. Major indicator 1 of RSPO Group Certification : All group members that are formal members of the gr oup seeking RSPO certification under group certification shall comply with the required releva nt RSPO Standard for Sustainable Oil Palm Production. NCR RSPO 00019 (Major non-conformity) : Perhimpunan Sapta Tunggal Mandiri not yet have a Statement of Environmental Management Correction : SPPL document is available to all group members. Corrective Action: Ensured all members have SPPL documents required by laws and regulations Date of Closure : February 27, 2016 Auditor Conclusions : Closed The Company has submitted evidence of improvements such as letter of a request for Statement of Environmental Management (SPPL) to the Environment Agency Ogan Ogan Ilir on behalf of the Association of Sapta Tunggal Mandiri with the letter number 07 / STM / EXT / III / 2016 dated March 24, 2016 Element 1.2. Major indicator 4 of RSPO Group Certification : All the individual group members shall adhere to an d show evidence that the internal requirements, as set out in the systems, programmes or policies adopted by the Group Manager are met. NCR RSPO 00020 (Major non-conformity) : Perhimpunan Sapta Tunggal Mandiri not yet have internal communication mechanism Correction : Internal communications mechanisms already established on SOP Internal Communication and documented and socialized Corrective Action: Ensured that the effectiveness of document storage system enhanced so it is easy to search documents including internal communications mechanisms Date of Closure : February 20, 2016 Auditor Conclusions : Closed





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The Company has submitted evidence of improvements such as internal communication procedures and group member with document number PSTM-01 SOP-06-01 revision effective date March 11, 2016. In the procedure has been explained mechanism of communication and interaction between members of a group, between groups and between members both of farmers and the group members to the Perhimpunan Sapta Tunggal Mandiri Element 1.3. Major indicator 7 of RSPO Group Certification : The Group Manager shall have the capacity to contro l, monitor and evaluate all members pertaining to their compliance to the RSPO requirem ents including communicating with them and visiting them at the required frequencies. NCR RSPO 00021 (Major non-conformity) : Internal control systems have no mechanism to control, monitoring and evaluation of all members for verification of conformity to the requirements of RSPO, including communication and visiting members. Correction : Established a mechanisms to control, monitoring and evaluation of all members for verification of conformity to the requirements of the RSPO, including communication and visiting members are provided and documented Corrective Action: Ensured the mechanisms for control, monitoring and evaluation of all members for verification of conformity to the requirements of the RSPO, including communication and visiting members are available and implemented by the Internal Control System Date of Closure : February 25, 2016 Auditor Conclusions : Closed The Company has submitted evidence of improvements such as internal audit procedures with the document number PSTM-Pro-004-010 revision 0 effective date January 20, 2016. In the procedure listed about the mechanism of internal audit to verify that the operational activities throughout the cooperatives in accordance with the principles and criteria of the RSPO. This procedure is applied for all operational activities of the Perhimpunan Sapta Tunggal Mandiri. Element 1.3. Major indicator 9 of RSPO Group Certification : There shall be clear policies and procedures for co mmunication between the Group Manager and group m embers. NCR RSPO 00022 (Major non-conformity) : Perhimpunan Sapta Tunggal Mandiri have no policies and procedures for communication between the group manager and group members Correction : Policies and procedures for communication between the group manager and group members are provided and documented Corrective Action: Ensured the document storage including policies and procedures for communication between the group manager and group members is better so it can be found when needed Date of Closure : February 20, 2016 Auditor Conclusions : Closed The Company has submitted evidence of improvements such as communication policy with the document number PSTM-KBJ-03 revision 0 the effective date of March 11, 2016. This communication policy is a





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statement that the Perhimpunan Sapta Tunggal Mandiri to open themselves to communicate with all stakeholders in a transparent in the implementation of RSPO management Element 1.3. Major indicator 12 of RSPO Group Certification : The Group Manager shall ensure that the total of al l sales and claims of RSPO certified FFB production from group members does not exceed the t otal certified FFB production of the group in its entirety. NCR RSPO 00023 (Major non-conformity) : Group Manager have no mechanism to ensure the sale and claim FFB RSPO certified not exceed total FFB production certified Correction : Mechanisms to ensure the sale and claim of FFB certified RSPO not exceed total production of FFB certified has provided and documented Corrective Action: Ensured the mechanisms to ensure the sale and claim of FFB RSPO certified not exceed total FFB certified production are made available in all the group members, socialized and understood Date of Closure : February 25, 2016 Auditor Conclusions : Closed The Company has submitted evidence of improvements such as:

1. The information for increased number production procedure with document number PSTM-SOP-06-03 revision 0 the effective date of February 19, 2016. In the procedure stated that the procedure is aims to provide information to the certification body when there is an increasing number of FFB

2. Procedure material balance with document number PSTM-SOP-06-04 revision 0 the effective date of February 19, 2016. This procedure aims to ensure the compliance or accuracy of the data balance of production and delivery of fresh fruit bunches

Element 2.1. Major indicator 3 of RSPO Group Certification : The Group Manager shall have documented membership requirements for the participation of individual members in the group . NCR RSPO 00024 (Major non-conformity) : Perhimpunan Sapta Tunggal Mandiri have no mechanism for acceptance of new members and mechanism to leaving the membership, remedial system for members that is not in accordance and for members taken out Correction : The mechanism of acceptance new members, a mechanism for leaving the membership, remedial system for members who does not accordance and to members who taken out provided and documented Corrective Action: Ensured the mechanisms of acceptance new members, a mechanism for leaving the membership, remedial system for members who does not accordance and to members taken out be socialized to all members until the individual member and understand Date of Closure : February 25, 2016 Auditor Conclusions : Closed The Company has submitted evidence of improvements such as union memberships mechanism procedure with document number PSTM-SOP-06-06 revision 0 the effective date of February 19, 2016. In the procedure listed union membership requirements, the requirements for becoming a new member, the





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requirement to stop or get out of the membership and the replacement membership and mechanism to dismiss or remove members.

Element 2.1. Major indicator 4 of RSPO Group Certification : There shall be a group-level operation manual

NCR RSPO 00025 (Major non-conformity) : Perhimpunan Sapta Tunggal Mandiri have no policies and procedures for receiving / removing members, policies and procedures to handling complaints, policies and procedures for monitoring the group including updating risk assessment group Correction : Policies and procedures to accept / removing members, policies and procedures for handling complaints and the policies and procedures for monitoring the group including updating risk assessment group has been provided and documented Corrective Action: Ensured the policies and procedures to accept / removing members, policies and procedures for handling complaints and the policies and procedures for monitoring the group including updating risk assessment group in all group membr, socialized and understand Date of Closure : February 25, 2016 Auditor Conclusions : Closed The Company has submitted evidence of improvements such as memberships mechanism procedure with document number PSTM-SOP-06-06 revision 0 the effective date of February 19, 2016. In the procedure stated about membership requirements, the requirements for becoming a new member, the requirement to stop or get out of the membership and the replacement membership and mechanism to dismiss or remove members. and mechanisms of acceptance and handling of complaints from members Element 2.1.5. Major indicator 1 of RSPO Group Certification : A copy of each group member ‟s application form to the group with relevant infor mation for each member that is updated regularly, i.e. name of prod ucer, address, contact details, type of land ownership, size of plantation area, location, etc. NCR RSPO 00026 (Major non-conformity) : Perhimpunan Sapta Tunggal Mandiri have no list of information membership that regularly updated includes the manufacturer's name, address, contact details, type of land ownership, land use, location. Correction : List of membership information that updated on a regular basis that includes the manufacturer's name, address, contact details, type of land ownership, land area, the location has been provided to all group members Corrective Action: Ensured all group member has a list of information regularly updated membership that includes the manufacturer's name, address, contact details, type of land ownership, land use, location and updated at least 1 times a year Date of Closure : February 25, 2016 Auditor Conclusions : Closed The Company has submitted evidence of improvements such as a list of members per each group and hectarage of each farmer in accordance with those specified in the land title





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Element 2.1. Major indicator 6 of RSPO Group Certification : A summary of all the data on land use (in hectares) shall be kept and regularly updated covering the entire group NCR RSPO 00027 (Major non-conformity) : Not yet have summary of all the data of land use which is updated regularly Correction : A summary of all the data of land use the group member is updated in accordance with the actual usage Corrective Action: Ensured the summary data of all land use data from the group members regularly updated and documented Date of Closure : February 25, 2016 Auditor Conclusions : Closed The company has submitted the evidence of improvements such as a summary of land area per each cooperative. The total area is 5,366.93 ha with detailed planting area is 5,088.95 ha, road is 271.8 ha and hcv area is 35.33 ha. Element 3. Major indicator 1 of RSPO Group Certification : The group manager shall document and implement a sy stem for the tracking and tracing of FFB produced by the group members, and intended to be s old as RSPO certified FFB. NCR RSPO 00028 (Major non-conformity) : Perhimpunan Sapta Tunggal Mandiri not have a system for tracking, tracing the FFB produced by group member and which is claimed as FFB RSPO certified Correction : The mechanism or system for tracking, tracing the FFB produced by group member that claimed to be FFB RSPO certified has been provided and documented Corrective Action: Ensure the mechanisms or systems for tracking, tracing the FFB produced by group member that claimed to be FFB RSPO certified provided, documented, be socialized to all group members and understood Date of Closure : February 20, 2016 Auditor Conclusions : Closed The Company has submitted evidence of improvements such as: 1. Procedures of FFB production traceability with document number PSTM-SOP-06-05 revision 0 the

effective date of January 28, 2016. In the procedure explained about delivery mechanism for FFB from each member so that clearly that FFB come from members association and come from sustainable FFB or not


Element 3. Major indicator 2 of RSPO Group Certification : There shall be a collective group procedure for the sale of all certified FFB originating from the plantations of group members that is agreed by the group members and the Group Manager and is designed to ensure that non-certified FFB are not s old as RSPO certified FFB. This shall be contained in any group marketing system that is dev eloped for the group, and shall follow one of the supply chain models as per the RSPO Supply Chai n Certification Systems ii , i.e. Identity





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Preserved, Segregation or Mass Balance.

NCR RSPO 00029 (Major non-conformity) : No mechanism or procedure which regulates the sale of FFB RSPO certified collectively, and make sure there are no certified FFB sold and claims to be certified, and specified the type of supply chain certification system model. Correction : Mechanisms and or procedures that regulate the sale of FFB RSPO certified collectively, and ensure there are no certified FFB sold and claimed as certified and specified the type of supply chain certification system model has been provide and documented Corrective Action: Ensure the mechanisms and or procedures that regulate the sale of FFB RSPO certified collectively, and ensure there are no certified FFB sold and claimed as certified and specified the type of supply chain certification system model provide, documented, be socialized to all group members and understood Date of Closure : February 20, 2016 Auditor Conclusions : Closed The Company has submitted evidence of improvements such as: 1. Procedures of FFB production traceability with document number PSTM-SOP-06-05 revision 0 the

effective date of January 28, 2016. In the procedure explained about delivery mechanism for FFB from each member so that clearly that FFB come from members association and come from sustainable FFB or not


Element 3. Major indicator 3 of RSPO Group Certification : The group manager shall ensure that all invoices fo r sales of RSPO certified FFB originating from the group are issued with the required information as per the adopted supply chain model requirements within Annex 6 of the RSPO Supply Chai n Certification Systems document – November 2009. NCR RSPO 00030 (Major non-conformity): Group manager must have a mechanism to ensure that all sales invoices of FFB certified issued accordance with the information specified in the RSPO Certification Group 3.5 Correction : The mechanisms to ensure all sales invoices FFB certified has been provide and socialized Corrective Action: Ensure mechanisms to ensure that all sales invoices FFB certified published, disseminated and understood by all members Date of Closure : February 20, 2016 Auditor Conclusions : Closed The Company has submitted evidence of improvements such as delivery procedure with document number PSTM FFB-SOP-06-05 revision 1 effective date March 22, 2016. In the procedure be explained that a letter of introduction of fresh fruit bunches have been published which includes the information as required in the RSPO Certification Group 3.5 and have been described supply chain model and status of fresh fruit bunches are certified and not certified.





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Criterion 2.1 (Major indicator 1): Evidence of compliance with essential regulations r elevant and related to oil palm cultivation. NCR RSPO 00031 (Major non-conformity):

• Legality organization of group member for KORPRI can not shown

• Some legal documents belong to the group members have expired. For example, SP 2 and SP 7 • Can not shown AD / ART of some members of the group. Example: KUD Maju Jaya and Bumi

Jaya

Correction : • KORPRI has been given time to complete the business legality but until the designated time

constraints still can be equipped so that in accordance with SOP Mechanism Association Membership (PSTM-SOP-06-06) it was decided that KORPRI not to include in the scope RSPO Certification Audit Independent Smallholder and expelled from membership Sapta Tunggal Mandiri, because it can not complete the legality in accordance with the requirements of membership.

• Documents legality SP2 and SP 7 renewable. • AD / ART for KUD Maju Jaya and Bumi Jaya equipped and documented.

Corrective Action:

• Ensure that all member associations Sapta Tunggal Mandiri obey membership requirements specified in SOP Mechanism Membership Association, PSTM-SOP-06-06.

• Make sure all members of Sapta Tunggal Mandiri have valid legal documents and not expired, and has a mechanism to monitor the legality validation

Date of Closure : February 27, 2016 Auditor Conclusions : Closed The Company has submitted evidence of improvements such as a decision letter that stated with document numbers PSTM-FRM-007-09 revision 0 effective date March 28, 2016 about the evaluation results of membership dated March 18, 2016 that KORPRI be taken out from membership the Association of Sapta Tunggal Mandiri because until the time limit can not fulfilled with the membership requirements, such as legality of the group and the legality of member lands.

Criterion 2.2 (Major indicator 1): Smallholders are able to show legal ownership of th e land or land-use rights.

NCR RSPO 00032 (Major non-conformity): Some of the legality of land ownership is still not available. Example: SP 7 Kav: 1030, 1093, 1041 Correction : Legality of land for SP 7 Kav: 1030, 1093, 1041 has been completed and documented in KUD SP 7 Corrective Action: Ensure all the legalities land for all of plots on all of members Sapta Tunggal Mandiri is available and documented at each office KUD Date of Closure : February 20, 2016 Auditor Conclusions : Closed





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The Company has submitted evidence of improvements such as legality land of SP 7 members i.e the certificate of land property rights with kavling numbers 1030, 1093 and 1041.

Criterion 4.1 (Minor indicator 1): Evidences of implemented procedures are available.

NCR RSPO 00033 (Minor non-conformity): Found inconsistencies between the applications of existing procedures in the field. Example: SOP Fertilization: SSB-SOP-003-004, SOP spraying: SSB-SOP-003-006 Correction : Conducting a review of SOP Fertilization: SSB-SOP-003-004, SOP spraying: SSB-SOP-003-006, and adapted to the field activity Corrective Action: Ensure all existing SOPs are reviewed and adapted to the actual implementation in the field Date of Closure : February 20, 2016 Auditor Conclusions : Closed Evidence of immediate action taken was accepted. Effectiveness of implementation to verified at next audit.

Criterion 4.6 (Minor indicator 3): Evidence of implementing safe procedure (Program Ke sehatan dan Keselamatan Kerja (K3)) in applying agrochemica ls.

NCR RSPO 00034 (Minor non-conformity): Found the workers are not wearing PPE when doing the spraying. Example: SP 4 Correction : Conducting socialization about the importance of using PPE for health and safety to all employees Corrective Action: Ensured all workers of harvesting and spraying using PPE that have been provided Date of Closure : February 20, 2016 Auditor Conclusions: Closed Evidence of immediate action taken was accepted. Effectiveness of implementation to verified at next audit.

Criterion 4.6 (Minor indicator 4): Evidence of pesticides storage and disposing pestic ides container according to current regulation.

NCR RSPO 00035 (Minor non-conformity): Agrochemical for spraying material stored in each home worker Correction : Conducting re-socialization about chemical hazards and the prohibition of carrying chemicals to workers home Corrective Action: Ensure all of agrochemical not be taken to home by the worker and stored in a agrochemical storage that have been provided





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Date of Closure : February 20, 2016 Auditor Conclusions: Evidence of immediate action taken was accepted. Effectiveness of implementation to verified at next audit.

Criterion 5.2 (Major indicator 1): Smallholders are able to list protected flora and f auna in their local areas.

NCR RSPO 00036 (Major non-conformity): Not all species of flora and fauna that exist in the estate already identified Correction : Types of flora and fauna that exist in all areas included in the scope of the RSPO certification already inventoried Corrective Action: Ensure that all types of flora and fauna are protected in all areas included in the scope of the RSPO certification and ensured the socialization to all of PIC related Date of Closure : February 20, 2016 Auditor Conclusions : Closed The Company has submitted evidence of improvements such as: 1. Addition of fauna found in the plantation members of association Sapta Tunggal Mandiri 2. Minutes of socialization and interviews about the flora and fauna which was held on February 11, 2016

to members the Association of Sapta Tunggal Mandiri which is equipped with documentation socialization

Criterion 5.3 (Major indicator 1): Smallholders can explain measures to dispose hazard ous agrochemicals and their containers in accordance to instruction labels as stated by the manufacturer. NCR RSPO 00037 (Major non-conformity): Perhimpunan Sapta Tunggal Mandiri not yet have hazardous and toxic waste disposal mechanisms and non-hazardous and toxic since the waste produced. Correction : Waste hazardous and toxic disposal mechanisms and non-hazardous and toxic documented on SOP Corrective Action: Ensure the SOP of handling waste hazardous and toxic is available, socialized and documented Date of Closure : February 20, 2016 Auditor Conclusions : Closed The Company has submitted evidence of improvements such as procedures for handling toxic and hazardous waste (LB3) with document number PSTM-01 SOP-06-08 revision effective date February 19, 2016. In the procedure explained about separation of toxic and hazardous waste in accordance with the type and characteristics, and given symbol and the label on the B3 waste packaging and stored at transit room in accordance with the applicable storage period until transported by a third party which has the permission of transportation

Criterion 5.5 (Minor indicator 1): Smallholders organisation owns simple fire control equipments





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NCR RSPO 00038 (Minor non-conformity): Fire-fighting equipment is not enough for overcome the potential for a major fire Correction : Completing firefighting equipment that enough to overcome the land fires Corrective Action: Ensure all members Sapta Tunggal Mandiri has sufficient fire-fighting equipment to tackle land fires that could potentially occur Date of Closure : February 20, 2016 Auditor Conclusions: Evidence of immediate action taken was accepted. Effectiveness of implementation to verified at next audit.

Criterion 6.1 (Major indicator 1): Smallholders could explain the social impact of the ir planttaion activiity and provide constructive respond evidence against complain, if any.

NCR RSPO 00039 (Major non-conformity): Social Impact Assessment has not covered SP 5, 6, 7 Correction : SIA Report for SP 5, 6 and 7 completed. Corrective Action: Ensure the SIA report is available to all members Sapta Tunggal Mandiri Date of Closure : February 25, 2016 Auditor Conclusions : Closed The Company has submitted evidence of improvements such as the results of social impact assessments which include KUD Duumvirate, and KUD KUD Tani Mandiri Maju Jaya. that social impact study was conducted through focus group discussions were held on 23 to 28 March 2015. The things that become of social issue which found among others toward human resources (employment, public health, education), natural resources, financial (source of income, the development of economic sectors), social and cultural (arts and sports, lectures and social gathering, social communication, social assistance), physical (construction of village roads, construction of buildings / public facilities). Criterion 6.9 (Major indicator 1): Smallholders organisation has established documents that advise its members against sexual harassments and forms of violence against women and to protect their reproductive rights and implement it NCR RSPO 00040 (Major non-conformity): Records of socialization sexual harassment policy and complaint procedure are not available Correction : Conducting socialization related to the Sexual Harassment Prevention Policy to all members and the individual grievance mechanism set as a mechanism an agreed and documented Corrective Action: Ensure all members of KUD chairman until the individual members get the socialization of all the policies set including sexual harassment policy and ensured grievance mechanism established and socialized to the level of individual member





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Date of Closure : February 15, 2016 Auditor Conclusions : Closed The Company has submitted evidence of improvements such as:

1. Procedures for submission and handling of cases of sexual harassment for KUD Bumi Jaya with document number BJ-01 Pro-004-13 revision 01 effective date August 19, 2015, revision dated February 20, 2016. In the procedures regulated about sexual harassment grievance procedure to the existing of committee gender so that the committee gemder can follow up on complaints.

2. Procedures for submission and handling of cases of sexual harassment for KUD Patwa Usaha Mandiri with document number PM-Pro-004-13 revision 01 effective date August 19, 2015, revision dated February 20, 2016. In the procedures regulated about sexual harassment grievance procedure to the existing of committee gender so that the committee gemder can follow up on complaints.

3. Minutes of socialization about the understanding of committee's gender and procedures for submission and completion of sexual harassment cases were held on Tuesday, February 23, 2016 which is equipped with photo documentary evidence and the signature of attendance participant

3.3 Issues Raised by Stakeholders and Findings Pert aining to Issues A) Issues Raised during Stakeholder Consultation Me eting

No. Issues Raised Management Response Audit Verification

1

On the second rotation between plasma and inti can having more good in relationship to avoid a conflict.

Perhimpunan Sapta Tunggal Mandiri will continue to maintain a good relationship with the company that co-operation between both parties’ runs smoothly.

Company explaination is accepted, will be verified on the next audit.

2

In order to a better engage, the community has to be more proactive to protect the environment as well as for the progress of the public itself

Perhimpunan Sapta Tunggal Mandiri will try to increase public awareness also its members to maintain the environment.


3

We already spread the RAT schedule list for a good time. The obligations are the meeting results report, RAT on time, technical administrative extension refers to the provision trap worked per month on 31

Annual Member Meeting is an obligation in a cooperative, for the start of the schedule, the invitations, and the activity report will be prepared as well


4

Disnakertrans has been encouraged to participate must report, BPJS & K3 Anyone who feels subject and completed Disnakertrans will be implemented

Perhimpunan Sapta Tunggal Mandiri and its members will follow the conditions of employment and K3 in accordance regulations.


5

The impact of price declines, FFB fertilizers unabsorbed. The area around the construction has not been paid. The environmental impacts

FFB price decline seriously affected the plantation operations, including the purchase of fertilizers due to a decrease in the income of farmers. But for the price of FFB has been arranged by the local government. Problems smoke caused by fires a






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No. Issues Raised Management Response Audit Verification

need to be considered, problems trench, smoke problem

few months ago, a lesson for all members of the Sapta Tunggal Mandiri so that cooperate with the company doing careful planning to do a fire-fighting

6

The highest expectations, there are a business and rubber plantation. Is there a certification of rubber products?

In Indonesia has existed certification for rubber commodity, but this time Sapta Tunggal Mandiri is focusing only on the certification of palm oil.

No need to be verified.

7

Community expect, Perhimpunan Sapta Tunggal Mandiri could:

1. Given the rapid response and resolved.

2. If indeed the language communities legally wrong. The village head enclave guarantee that society will not ‘enclave’.

3. Please quickly resolved, because the public already tired encountered

According to the procedure Perhimpunan Sapta Tunggal Mandiri regarding communication consultations with stakeholders, the entire question / suggestion / complaint will be responded by “Perhimpunan Sapta Tunggal Mandiri”


B) Issues Raised during Stakeholder Interviews On-s ite 3.4 Acknowledgements of Internal Responsibility and Formal Sign-Off by Client It is acknowledged that the assessment visit was carried out as described in this report and we accept the assessment findings and report content.

Signed on behalf of Perhimpunan Sapta Tunggal Mandiri

…………………………………………. Head of Independent Smallholder Group Date : 06 June 2016

Signed on behalf of TUV Rheinland Indonesia

………………………………. Monang Lingga (under supervised by Dian S Soeminta) Lead Auditor Date : 06 June 2016





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APPENDICES

Appendix 1: List of Sample Individual Member

Individual sampled Address Member ID Total Area Lan d Title

KUD Bumi Jaya (SP 1) Suparno Bumi Harapan

Village 19,210 Land owned

certificate No. 1033

Suwardi B rohman Bumi Harapan Village

19,990 Land owned certificate No. 917

Senen B Dite Bumi Harapan Village


Idad B Ukar Bumi Harapan Village


Senen B Dite Bumi Harapan Village


Alek Salam B Alwi Bumi Harapan Village


Fisol B H.Muhtar Bumi Harapan Village


M.Sidik B Matekun Bumi Harapan Village


Tohari B Saparuddin

Bumi Harapan Village


Suwarno B Saijo Bumi Harapan Village


Radi B Paikan Bumi Harapan Village


Bambang Sadi B Joyo Sopo



Muhrodi B Supaat Bumi Harapan Village


Mukini Bumi Harapan Village


Rohman Rasia B Marta



Marno B Atmo Jasmin



Habib B Mahrur Bumi Harapan Village


Sofyan Bin Noyodikromo







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Ponimin Bumi Harapan Village


Soiran bin Soirono Bumi Harapan Village


KUD Patwa Usaha Mandiri (SP2) Nanang Lisnaini Harapan Mulya

Village 19,845 Land owned

certificate No. 491 Hamdani B Harudani

Panca Tunggal Benawa Village


Wanhar B Abdul Muin

Panca Tunggal Benawa Village


Tarmizin B Mansyur Panca Tunggal Benawa Village


Efendi B Mahmud Panca Tunggal Benawa Village


M Yun Kurniawan Harapan Mulya Village


Muslih Panca Tunggal Benawa Village


Kiman B Sardi Panca Tunggal Benawa Village


Sakam Panca Tunggal Benawa Village


Basmin Panca Tunggal Benawa Village


KUD Maju Jaya (SP 7) Suparno B bin Citro Utomo

Suka Jaya Village 19,840 Land owned certificate No. 87

KT Katon b KT Lajor Suka Jaya Village 20,250 Land owned certificate No. 21

Sudirman b Dalom Sahade


Wasiman b Saintono


Muhari Suka Jaya Village 18,200 Land owned certificate No. 233

Atmo Sutrisno bin Karto S


Santoso b Ismail Suka Jaya Village 21,960 Land owned certificate No. 36

Kasimin bin Mudasir Suka Jaya Village 21,525 Land owned certificate No. 365

Tauhid bin Sodik Suka Jaya Village 19,780 Land owned certificate No. 112

Daryo bin Parto Rejo


Jahri bin Mahmud Suka Jaya Village 20,160 Land owned certificate No. 16

Sadiman bin Mamadi


KUD Sinar Saeit Bahagia (SP 4) Tulas Agung Sasmita bin Kayat

Burnai Timur village 20,000 Land owned certificate No. 394

Dukut bin Paijan Burnai Timur village 18,930 Land owned





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certificate No. 340 Husni bin Nangak Burnai Timur village 18,200 Land owned

certificate No. 634 Solikhin bin Yarkasi Burnai Timur village 19,400 Land owned

certificate No. 595 Normansyah Burnai Timur village 19,680 Land owned

certificate No. 642 Tukimin bin Koseri Burnai Timur village 19,140 Land owned

certificate No. 377 Siswanto/Ngatino bin Torjo


Ali Tambat bin Toke Burnai Timur village 5,015 Land owned certificate No. 637

Wagiman bin Marto Suman


Aronsin Burnai Timur village 20,000 Legal land certificate No. 455

Senen bin Warto Rejo


MY Ritonga Burnai Timur village 18,920 Land owned certificate No. 552

KUD Dwi Tunggal (SP5) Gunarto 21,925 Land owned

certificate No. 0077 Made Sukre


Judin Bin Marpu 19,250 Land owned certificate No. 0025

Aspar 19,815 Land owned certificate No. 0029

Ahmad Faujan 20,050 Land owned certificate No. 0928

Sugeng Winardi 18,740 Land owned certificate No. 0073

Paid 19,995 Land owned certificate No. 0003

Jumino 19,990 Land owned certificate No. 0932

Suripto 19,990 Land owned certificate No. 0014

Darto 19,980 Land owned certificate No. 0015

Purwanto 19,000 Land owned certificate No. 0112

Sriyono 20,080 Land owned certificate No. 0430

Mukamad 20,215 Land owned certificate No. 0431

Petrus 18,620 Land owned certificate No. 0330

Suwardi 19,520 Land owned certificate No. 0274

I Nyoman Sarna 19,520 Land owned certificate No. 0279

Ujang Kusnani 19,650 Land owned certificate No. 0284





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Ali Muslimin 19,820 Land owned certificate No. 0289

Nana 19,820 Land owned certificate No. 0294

Wahyuni 21,690 Land owned certificate No. 0396

Sugino 22,000 Land owned certificate No. 0395

Iswajis Setiawan 19,560 Land owned certificate No. 0373

Wahyudin 19,580 Land owned certificate No. 0376

Silitonga 20,000 SKT/272 Nengah Wartono 20,000 SKT/275 Sarmiadi 20,000 SKT/195

Total of sample number is:

• KUD Bumi Jaya (SP1): 20 sample • KUD Patwa Usaha Mandiri (SP2): 10 sample • KUD Maju Jaya (SP7): 12 sample • KUD Sinar Sawit Bahagia (SP4): 12 sample • KUD Dwi Tunggal (SP5): 26 sample





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Appendix 2: Details of Certificate





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Appendix 3: Certification Audit Plan

Date / Time (1) Organizational Unit and Processes

Auditor / Abbrev.

Interviewee Principle & Criteria

Monday , January 25, 2016 07.30-08.45

Flight from Jakarta to Palembang

All Auditor

08.45-14.00 Travelling from Palembang to site All Auditor 14.00-17.00 Public consultation All Auditor 17.00 End day 1 Tuesday, January 26, 2016 08.00-09.00 - Opening meeting

- Company profile presentation

All Auditor Group Manager

09.00-12.00 Document check related P&C: Group requirement:

- Group element - Fulfill standard - Graoup Manger

Documentation of Group Management Requirement:

- Structure documentation and group management content

- Internal assessment system

Law and legal issue:

- Compliance to law and regulation

- Best practice and environmental issue

- Training - Fire - NPP issue

Continues improvement

DSS & NM Group Manager, Gapoktan & Poktan

Prinsip 1 Kriteria 1.1, 1.2, 1.3 Prinsip 2 Kriteria 2.1, 2.2 Prinsip 1 Kriteria 1.1, 1.2 Prinsip 2 Kriteria 2.1 Prinsip 4 Kriteria 4.8 Prinsip 5 Kriteria 5.5 Prinsip 7 Kriteria 7.7 Prinsip 8 Kriteria 8.1

09.00-12.00 Document check related P&C: Chain of custody Economic, Law and regulation issue:


- Legal land - Management plan

Best Practice and OSH issue: - Procedure or best

practice manual - Soil fertility - Erotion control anmd

degradation - Water quality - IPM

MK Grup Manager Gapoktan

Prinsip 3 Kriteria 3.1 s/d 3.7 Prinsip 2 Kriteria 2.1, 2.2 Prinsip 3 Kriteria 3.1 Prinsip 4 Kriteria 4.1, s/d 4.7





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Auditor / Abbrev.


- Agrochemical - OSH

Environmental issue: - Environmental impact - HCV - Waste

NPP Issue: - Environmental impact

assessment - Soil survey and topografi

information - Primer forest not

change/HCV (since Nov 2005)

- Terrace and marginal land

Continous improvement

Prinsip 5 Kriteria 5.1, 5.2, 5.3 Prinsip 7 Kriteria 7.1 s/d 7.4 Prinsip 8 Kriteria 8.1

09.00-12.00 Document check related P&C: Chain of custody Economic, Law and regulation issue:



Best Practice and OSH issue:

- Procedure or best practice manual

- Soil fertility - Erotion control anmd

degradation - Water quality - IPM - Agrochemical - OSH

Environmental issue:

- Environmental impact - HCV - Waste

NPP Issue:

- Environmental impact assessment

- Soil survey and topografi information

- Primer forest not change/HCV (since Nov 2005)


Continous inprovement

HYA

Grup Manager

Gapoktan

Prinsip 3 Kriteria 3.1 s/d 3.7 Prinsip 2 Kriteria 2.1, 2.2 Prinsip 3 Kriteria 3.1 Prinsip 4 Kriteria 4.1, s/d 4.7 Prinsip 5 Kriteria 5.1, 5.2, 5.3 Prinsip 7 Kriteria 7.1 s/d 7.4 Prinsip 8 Kriteria 8.1

12.00-13.00 Lunch Break 13.00-17.00 Continuing previous agenda Related Manager





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Auditor / Abbrev.


Weneds ay, January 27, 2016

08.00-12.00

Bumi Jaya/SP 1

Document check related P&C: Group requirement

- Group elemen - Standar requirement - Grup Manager

Group Management documentation requirement

- Structure documentation and content

- Group management - Internal system

assessment Transparancy and Law and Regulation Issue

- Law and regulation compliance

Best Practise and Environmental Issue

- Training - Fire

NPP Issue (New Planting Procedure)

- Fire Continous improvement

DSS & NM Group Manager

Poktan

Prinsip 1 Kriteria 1.1, 1.2, 1.3 Prinsip 2 Kriteria 2.1, 2.2 Prinsip 1 Kriteria 1.1, 1.2 Prinsip 2 Kriteria 2.1 Prinsip 4 Kriteria 4.8 Prinsip 5 Kriteria 5.5 Prinsip 7 Kriteria 7.7 Prinsip 8 Kriteria 8.1

08.00-12.00

Sinar Sawit Bahagia

Site visit related P&C: Chain of Custody Economic, Law and regulation issue:








- Environmental impact

MK Group Manager Poktan






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Auditor / Abbrev.


- HCV - Waste

NPP Issue:






08.00-12.00

Dwi Tunggal/SP5

A

Site visit related P&C: Law and regulation, social issue


- Land prior without FPIC - Social impact - Communication and

consultation - Complaint and response - Compentation - Wage - Labour - Child labour - Employee discrimination - Sexual harassment - Transparancy - Contribution to regional

development NPP Issue

- Social impact assessment - FPIC - Compentation


HYA Poktan Prinsip 2 Kriteria 2.1, 2.3 Prinsip 6 Kriteria 6.1 s/d 6.11 Prinsip 7 Kriteria 7.1, 7.5, 7.6, Prinsip 8 Kriteria 8.1

12.00-13.00 Lunch Break 13.00-17.00 Continuing previous agenda Poktan Thursday, January 28, 2016 08.00-12.00

Maju Jaya

Site visit related P&C: Group requirement

- Group elemen - Standar requirement - Grup Manager

Group Management documentation requirement

- Structure documentation and content

DSS & NM Group Manager

Poktan

Prinsip 1 Kriteria 1.1, 1.2, 1.3 Prinsip 2 Kriteria 2.1, 2.2 Prinsip 1 Kriteria 1.1, 1.2 Prinsip 2 Kriteria 2.1 Prinsip 4 Kriteria 4.8





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Auditor / Abbrev.


- Group management - Internal system

assessment Transparancy and Law and Regulation Issue


Best Practise and Environmental Issue

- Training - Fire

NPP Issue (New Planting Procedure)

- Fire Continous improvement

Prinsip 5 Kriteria 5.5 Prinsip 7 Kriteria 7.7 Prinsip 8 Kriteria 8.1

08.00-12.00

KORPRI

Site visit related P&C: Chain of Custody Economic, Law and regulation issue:








- Environmental impact - HCV - Waste

NPP Issue:





MK

Grup Manager

Poktan






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Auditor / Abbrev.



08.00-12.00

Patwa Usaha

Site visit related P&C: Law and regulation, social issue


- Land prior without FPIC - Social impact - Communication and

consultation - Complaint and response - Compentation - Wage - Labour - Child labour - Employee discrimination - Sexual harassment - Transparancy - Contribution to regional

development NPP Issue

- Social impact assessment - FPIC - Compentation


HYA

Poktan

Prinsip 2 Kriteria 2.1, 2.3 Prinsip 6 Kriteria 6.1 s/d 6.11 Prinsip 7 Kriteria 7.1, 7.5, 7.6, Prinsip 8 Kriteria 8.1

Friday, January 29, 2016 08.00-09.00

Gapoktan Office

Closing Meeting

All Auditor Group Manager, Chief Gapoktan and

Head of Poktan





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Appendix 4: List of Abbreviations BLHD FFB HCV IPM Gapoktan OHS NPP SHM SPPL PPE

Badan Lingkungan Hidup Daerah (Local Environmental Agency) Fresh Fruit Bunches High Conservation Value Integrated Pest Management Gabungan Kelompok Tani (Independent Smallholder Group) Occupation, Health and Safety New Planting Procedure Sertifikat Hak Milik (certificate of ownership) Surat Pernyataan Pengelolaan Lingkungan (Environmental Impact Statement Letter) Personal Protection Equipment





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Appendix 5: List of Stakeholders Interviewed and Co ntacted

No. Name of Stakeholder Institution / Position Remarks Stakeholders Interviewed during Public Consultation Meeting

1 Ahmad Rosidan Head of institutional businesses and human resources of Plantation Agency

- Humas resources for plantation technique for smallholder

- FFB price notifications - Development nucleus and

smallholder 2 Nawawi Land agency of Ogan Komering

Ilir District - Basis of land ownership

3 Yerilewis Land agency of Ogan Komering Ilir District

- Distribution of land

4 Radian Fahmi Forestry agency of Ogan Komering Ilir District

5 Tatang Sambar Environmental agency of Ogan Komering Ilir District

6 Rusdi Section Head of Monitoring, District office of Cooperative and small medium enterprize

- Cooperative Performance (SP1, SP2, SP3, SP4, SP5, SP6 and SP7).

- Cooperative compliance to regulations

- Cooperatives social impacts

- Recomendation to improve the performance.

7 Jalaludin A. SH. District Officer of Workforce - Minimum payment

- Worker Status - Worker benefits - Industrial relations

8 Syarifudin Head of District Office of Agriculture

- Relations with Sapta Tunggal Mandiri and Members (Farmer Group)

- Socialization regarding palm oil waste for fertilizing

Stakeholders Interviewed On-Site 1 Yono Worker (Chemist) - Payment and conditions

- Occupation Health and Safety

- Gender and sexual harrasment

- Equal opportunity and Non Discrimination policy

- Child Worker - Freedom of associations

2 Jujun Worker (Chemist) 3 Joko S Worker (Harvesting) 4 Ali M Worker (Harvesting) 5 Taufik Worker (Fertilizing) 6 Rahmat Worker (Fertilizing) 7 Pardio Worker (Harvesting) 8 Warto Worker (Harvesting) 9 Ngadikir Worker (Harvesting)

10 Agus Worker (Chemist) 11 Nurul Worker (Chemist) 12 Arsani Head of Village Social impacts of Cooperative

Operations as a group of palm oil smalholder





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Appendix 6: Observations and Opportunities for Impr ovement

No. Observations / Opportunities for Improvement Criteria

1 Perhimpunan Sapta Tunggal Mandiri should have a program for capacity building for prospective members will be entered into the scope of the certification, so that they can fulfill the requirements RSPO smallholder.

1.2.2

Group Certification

2

People who joined in the organization structure of Sapta Tunggal Mandiri from Group Manager until Group members (prospective members and individual members) have not sufficiently demonstrated their understanding of the independent RSPO smallholder and group certification.

1.3.4; 1.3.10

Group Certification

3 Job Description all management which joined in the organizational structure should be made clear to each of their respective positions with the limits and clearly responsibilities

2.1.1

Group Certification

4 Internal audit program for 2016 should be provided by taking a sample based on the RSPO standard for group certification 2.2.2.5 and 2.2.2.6

2.2.1

Group Certification

5 Group managers must ensure the delivery of certified and non-certified FFB must be made directly by the group or subcontractors (if using subcontractors 3.7 then the principle should be applied).

3.4 Group

Certification

6 Group manager should have a standard form for sale of FFB certified that contains invoice information, transport information, identification member group, product description, volume, and destination.

3.5 Group

Certification

7 List of existing legislation should be given to all members, because in SP2 has not received a copy.

2.1.1

8 Boundary markers between kavling should be given a clear number based on the number of kavling 2.2.2

9 Make sure the liquid waste dumped in water bodies have been checked quality. 4.4

10 Group manager and group member and a member of the group should ensure that all employees related with chemicals should receive training.

4.6.1

11

- Spray workers should leaves the PPE and work tools related with chemicals in the warehouse or the place that has been provided by KUD.

- Ensure that all activities conducted in the group members have put into the risk OSH and environmental identification

4.7