rspo annual surveillance assessment 2 … annual surveillance assessment 2 public summary report pt....

RSPO ANNUAL SURVEILLANCE ASSESSMENT 2

PUBLIC SUMMARY REPORT

PT. TUVNORD Indonesia System Certification Management

Has assessed

PT PP London Sumatra Indonesia, Tbk

Palm Oil Mill(s) and Supply Base for Compliance to RSPO Principles and Criteria for Sustainable Palm Oil Production

Annual Surveillance Assessment 2 – Public Summary Report PT PP. London Sumatra Indonesia, Tbk

TABLE OF CONTENTS

Summary

Abbreviations Used Page

1. SCOPE OF THE SURVEILLANCE ASSESSMENT REPORT 4

1.1. Identify of Certification Unit: Location (map and GPS 4

1.2. Production volume of ALL certified products, actual annual volumes since date of last reporting period and

projected volumes for the next 12 months from current reporting period 8

1.3. Certification Details 11

1.4. Progress Against Time-Bound Plan 12

1.5. Progress of Associated Smallholders or Out growers Toward Compliance with Relevant Standards

(Should be in Accordance to The 3 Years) Implementation Plan 12

1.6. Organizational Information / Contact Person(s) 12

2. ASSESSMENT PROCESS 12

2.1. Names of Assessment Team Member and CVs of New Members Not On The Last Assessment Team 14

2.2. Assessment Program 16

3. ASSESSMENT FINDINGS 23

3.1. Summary of Findings by Each Principle and Some Example Criteria 23

3.2. Identified Non-Conformances and Noteworthy Positive and Negative Observation 35

3.3. Status of Non-Conformities (Both Minor and Major) Previously Identified 41

3.4. Issues raised by stakeholders 42

4. CERTIFIED ORGANISATION’s ACKNOWLEDGEMENT OF INTRNAL RESPONSIBILITY 48

4.1. Date of next surveillance visit 48

4.2. Date of closing non-conformities (both major and minor) 48

4.3. Sign-off surveillance assessment findings 48

ANNEXES Annex – A : Draft of RSPO Certificate 49


Summary

PT. TÜVNORD Indonesia (TNI) – Certification Body is a member of the German worldwide TÜV NORD group. PT. TÜVNORD Indonesia has performed a comprehensive the surveillance assessment of PT PP. London Sumatra Indonesia, Tbk (LONSUM) hereby, and complies with the Indonesia National Interpretation of the RSPO Principles and Criteria (RSPO INA-NIWG) version May 2008 for the scope sustainable production of palm oil following

− Turangie Palm Oil Mill (POM) 44,880 tonnes CPO / year* − Begerpang Palm Oil Mill (POM) 58,875 tonnes CPO / year* − Dolok Palm Oil Mill (POM) 34,687 tonnes CPO / year* − Gunung Melayu Palm Oil Mill (POM) 30,900 tones CPO / year*

TOTAL 169,342 tonnes CPO/ year * Unlike in 2007 production (whereas Bagerpang POM as one of the certified four mills produced the PKO, all 4 (four) POMs are not processing the kernel to be PKO. They only sell kernel to the outside companies. The 2010 Palm Kernel Production is shown below. Turangie POM : 12,064 tonnes Begerpang POM : 15,192 tonnes Dolok POM : 8,689 tonnes Gunung Melayu POM : 7,975 tonnes TOTAL : 43,920 tonnes

*) Data source: January-December 2010 PT. TÜVNORD Indonesia therefore recommends PT PP London Sumatra Indonesia, Tbk (LONSUM) be approved as a producer of RSPO Certified Sustainable Palm Oil.

Abbreviations Used AMDAL Analisis Monitoring Dampa Linkungan

(Environmental Monitoring Impact Analysis)

Bapedalda Badan Pengendalian Dampak Lingkungan Daerah (Local Environment Body)

B3 Bahan Berbahaya dan Beracun (Toxic and Hazardous Materials)

BOD Biological Oxygen Demand CPO Crude Palm Oil COD Chemical Oxygen Demand CSR Corporate Social Responsibility Deperindag RI

Departemen Perindustrian dan Perdagangan (Department of Industrial Affairs and Commerce of the Republic of Indonesia)

EMS Environmental Management System ECSR Environmental Corporate Social

Responsiblity EIA Environmental Impact Assessment FFB / EFB Fresh Fruit Bunch / Empty Fruit Bunch GPS Global Positioning System HCV High Conservation Value HGU Hak Guna Usaha (Land Use Permit) IPM Integrated Pest Management

JAMSOSTEK Jaminan Sosial Tenaga Kerja (Employees Social Security)

LONSUM PT PP.London Sumatra Indonesia Tbk LCC Legume Cover Crop LD-50 Lethal Dosage – 50 MSDS Material Safety Data Sheet PKO Palm Kernel Oil PK Palm Kernel POM / POME Palm Oil Mill / Palm Oil Mill Effluent PPE Personal Protective Equipment

PLN Grid Jaringan Perusahaan Listrik Negara (State Electricity Company Grid)

RKL-RPL Rencana Kelola Lingkungan dan Rencana Pemantauan Lingkungan (Environment Management Plan – Environmental Monitoring Plan)

SMK3 Sistim Manajemen – Keselamatan dan Kesehatan Kerja (Management System of Occupational Safety and Health)

SPO Sustainable Palm Oil UKL/UPL Upaya Kelola Lingkungan/Upaya

Pemantauan Lingkungan (Environmental Management Efforts and Environmental Monitoring Efforts)


1. Scope of The Surveillance Assessment Report

The standard requirements of the Indonesian National Interpretation of RSPO Principles and Criteria (RSPO INA-NIWG) version May 2008 was used to assess the operation of the Palm Oil Mills and the supply basis of FFB. The scope for annual surveillance assessment includes the production from 4 (four) palm oil mills and 12 (twelve) company owned plantations. There was no FFB coming from outgrowers in 2008, 2009 and 2010. Therefore, the FFB was fully supplied by LONSUM’s estates.

1.1. Identify of Certification Unit: Location (map and GPS) LONSUM has 4(four) mills and 12(twelve) company-owned plantations and all of them located in Province of North Sumatra. The following is the location of those 4 (four) mills and 12 (twelve) plantations including their GPS identification shown on table 1 and table 2. The location by map is also shown by figure 1 & figure 2.

The GPS reading were taken in the estate/plantation office (inside estate/plantation areas). Otherwise, the GPS source data’s taken from Atlas Indonesia, Satellite Imagery-Trimble GPS Geo XT on October 2008.

Table 1: Mills GPS locations

Mills Northing Easting

Turangie 3°28'41" 98°16'4" Begerpang 3°27'33" 98°49'27" Dolok 3°9'53" 99°25'49" Gunung Melayu 2°42'4" 99°34'26"

Table 2: Plantations GPS locations for Plantation/Estate Office (inside the plantation/estate areas)

Plantation Office Northing Easting

Bungara 3°31'57" 98°11'16" Pulo Rambong 3°9'27" 98°14'24" Turangie 3°29'52" 98°13'4" Sei Merah 3°30'32" 98°49'26" Begerpang 3°26'40" 98°49'12" Rambong Sialang 3°26'18" 99°0'33" Sibulan 3°15'1" 99°9'39" Bah Bulian 3°12'0" 98°58'40" Bah Lias 3°10'53" 99°20'39" Dolok 3°9'55" 99°25'47" Gunung Melayu 2°41'40" 99°33'39" Sei Rumbiya 1°1'30" 100°5'5"

The FFB is sourced from the 12 (twelve) company-owned plantations and continuously supply the 4 mills (no FFB supplies from out growers), and it is shown on figure 2 & figure 3


Location Mills and the Estates of PT PP London Sumatra Indonesia, Tbk (LONSUM) Figure 1: Map of Sumatra Island and Indonesia Islands


Location Mills and the Estates of PT PP London Sumatra Indonesia, Tbk (LONSUM) Figure 2: The Mills and FFB Supply base (Gunung Melayu POM, Turangie)


Location Mills and the Estates of PT PP London Sumatra Indonesia, Tbk (LONSUM)

Figure 3: The Mills and FFB Supply base (Dolok POM, Begerpang POM)


1.2. Production volume of ALL certified products, actual annual volumes since date of last reporting

period and projected volumes for the next 12 months from current reporting period. LONSUM has collected production data’s volume of the FFB from 12 (twelve) company-owned estates and 4(four) mills since 2007 and projected volume to the end 2011. The performance of achievement production all certified products for 4(four) mills and 12(twelve) company-owned estates are shown on table 3, table 4 and table 5. The age profile of planted palms in 12 areas after certification assessment 2008 and total oil palm planted and mature statistic are shown on table 6 and table 7.

Table 3: Approximated tonnages offered for RSPO certification 2007 and Actual Annual Outputs 2008 & 2009

Outputs Year 2007 (tonnes)*

Actual Annual Outputs Year 2008 (tonnes)*

Actual Annual Outputs Year 2009 (tonnes)* Mills

CPO PKO PK CPO PKO PK CPO PKO PK

Turangie POM 50,148 - 13,236 44,817 - 11,783 45,945 - 12,402

Begerpang POM 53,236 2,772 13,484 50,967 696,813 13,141 57,255 - 14,780

Dolok POM 31,211 - 7,960 30,870 - 7,749 33,799 - 8,671

Gunung Melayu POM 34,885 - 8,821 33,587 - 8,477 35,117 - 9,003

*) Statistic tonnages production outputs achieved January – December 2009 Table 4: Projection tonnages RSPO certification 2011 and actual output 2010

Actual Annual Outputs year 2010 (tonnes)

Actual June Year 2011 (tonnes)*

Projection Outputs Year 2011 (tonnes)* Mills

CPO PKO PK CPO PKO PK CPO PKO PK

Turangie POM 44,880 - 12,064 20,609 - 5,409 45,377 - 11,846

Begerpang POM 58,875 - 15,192 29,445 - 7,565 63,768 - 15,617

Dolok POM 34,687 - 8,689 18,791 - 4,720 41,467 - 10,239

Gunung Melayu POM 30,900 - 7,975 12,679 - 3,249 34,653 - 8,486

*) Statistic tonnages projection production outputs January - December Table 5: Production volumes Mills and estates in tones 2007 – 2010, and projection 2011

Estates 2007 (tones)

2008 (tones)

2009 (tones)

2010 (tones)

Actual June 2011

Budget annual 2011

Turangie 78,339 74,615 75,702 72,392 32,251 72,443 Pulo Rambong 66,623 61,206 61,738 62,930 28,763 59,554 Bungara 63,616 55,259 59,981 58,069 26,613 59,065 Sei Merah 39,708 38,815 43,704 38,217 16,788 44,532 Begerpang 98,980 101,725 114,489 102,306 46,076 112,805 Rambong Sialang 76,171 69,565 76,787 99,886 60,109 102,939 Dolok 60,618 58,092 60,460 56,882 27,676 61,710 Si Bulan 12,739 13,178 12,923 13,035 6,176 13,107 Bah Bulian 8,347 12,752 15,988 16,905 11,935 23,649 Bah Lias 44,856 43,839 50,745 58,140 33,373 72,180 Gunung Melayu 111,450 103,228 111,655 100,342 38,866 106,176 Sei Rumbiya 32,083 33,576 34,045 29,894 14,580 35,265


TRPOM 208,577.340 191,079.740 197,420.600 202,130.000 87,627 191,062 BGPOM 214,858.500 210,104.890 234,979.340 242,910.000 122,973 260,276 DLPOM 126,559.500 127,860.620 140,115.580 149,325.000 79,160 170,646 GMPOM 143,533.600 136,803.760 145,699.640 147,148.000 53,445 141,441 763

Total 693,528.940 665,849.010 718,215.160 741,513.000 343,205 763,425 Table 6: Age profile of planted palms in 12 areas after certification assessment 2008

Estates 0 - 5 % 6 - 10 % 12 - 15 % 16 – 20 % 21 - 28 % Total

Turangie 0 0 0 0 1,207.62 42.59 1,199.80 42.31 428.31 15.10 2,835.73

Bungara 0 0 0 0 1,001.17 39.31 1,301.68 51.11 244.06 9.58 2,546.91 Pulo Rambong 18.00 0,70 0 0 657.56 25.58 740.01 28.79 1,154.74 44.93 2,570.31

Sei Merah 141.68 8.31 395.55 23.20 469.12 27.52 286.36 16.80 411.95 24.17 1,704.66

Begerpang 1,477.72 26.92 1,083.96 19.75 1,185.77 21.60 1,082.61 19.72 659.60 12.02 5,489.66

Rambong Sialang 2,293.82 45.83 1,227.99 24.53 909.33 18.17 555.94 11.11 18.43 0.37 5,005.51

Bah Lias 2,449.90 64.86 750.26 19.86 326.37 8.64 213.91 5.66 36.73 0.97 3,777.17

Dolok 715.90 24.23 820.57 27.77 789.79 26.73 564.75 19.12 63.34 2.14 2,954.35

Si Bulan 0 0 280.87 55.74 196.98 39.09 26.06 5.17 0 0 503.91

Bah Bulian 1,207.83 81.04 191.37 12.84 91.14 6.12 0 0 0 0 1,490.34

Gunung Melayu 281.77 5.95 521.70 1.01 2,088.85 44.09 1,221.36 25.78 624.14 13.17 4,737.82 Sungai Rumbiya 129.04 8.07 409.29 5.61 149.47 9.35 103.75 6.49 806.67 50.47 1,598.22

Table 7: Total oil palm planted and mature statistic Area Summary (ha) *

Estate Location Total Planted Oil Palm Mature Immature

Turangie Kabupaten Langkat, Sumatra Utara 3,156.45 2,835.73 2,835.73 0

Bungara Kabupaten Langkat, Sumatra Utara 2,736.57 2,546.91 2,546.91 0

Pulo Rambong Kabupaten Langkat, Sumatra Utara 2,822.83 2,570.31 2,552.31 18.00

Sungai Merah Kabupaten Deli Serdang, Sumatra Utara 1,769.14 1,704.66 1,683.88 20.78

Begerpang Kabupaten Deli Serdang, Sumatra Utara 5,681.49 5,489.66 4,606.74 882.92

Bah Lias Kabupaten Simalungun, Sumatra Utara 5,230.62 5,005.51 4,658.51 347.00

Dolok Kabupaten Batubara, Asahan, Simalungun Sumatra Utara 3,994.33 3,777.17 3,109.81 667.36

Bah Bulian Kabupaten Simalungun, Sumatra Utara 3,077.72 2,954.35 2,659.68 294.67

Si Bulan Kabupaten Serdang Berdagai, Sumatra Utara 1,403.40 503.91 503.91 0

Rambong Sialang Kabupaten Serdang Berdagai, Sumatra Utara 1,677.12 1,490.34 1,055.86 434.48

Gunung Melayu Kabupaten Asahan, Sumatra Utara 4,790.06 4,737.82 4,536.82 201.00

Sei Rumbiya Kabupaten Labuhan Batu, Sumatra Utara 5,860.70 1,598.22 1,598.22 0

*) Data source June 2011


1.3. Certification Details

The Executive Board of the RSPO has approved PT PP London Sumatra Indonesia (LONSUM) to be member of RSPO according to letter of Ordinary Membership date 11 April 2005. The membership number is 011-05(O). LONSUM has registered the certificates as a producer of RSPO certified sustainable palm oil following 1. Turangie POM Certificate No. TNI-RSPO 001.2008 Valid Certificate 2014.04.29 2. Begerpang POM Certificate No. TNI-RSPO 002.2008 Valid Certificate 2014.04.29 3. Dolok POM Certificate No. TNI-RSPO 003.2008 Valid Certificate 2014.04.29 4. Gunung Melayu POM Certificate No. TNI-RSPO 004.2008 Valid Certificate 2014.04.29 The certification assessment was completed on the following dates, namely 15 to 18 September 2008; 06 to 09 October 2008, and 14 to 15 & 17 to 18 October 2008. Annual Surveillance Assessment 2 was completed in June 20, 2011 to July 01, 2011 (see audit plan). 1.4. Progress against time-bound plan The management of PT PP London Sumatra Indonesia, Tbk has defined a time bound plan for the other management units to achieve RSPO certification (see table 4 below) location at Sumatra Selatan. Internally, in 2005 LONSUM identified its HCV areas in the development areas referred to its EIA documents and HCV toolkit 2003. In order to strengthen the data and to be more independent, in 2006 LONSUM re-identified its development areas in South Sumatra by involving Aksenta as HCV assessor and WWF Indonesia as observer. The time bound challenging for these areas may be seen from table 4. Table 4: Time bound plan for other PT PP London Sumatra Indonesia, Tbk management

Annual Outputs* No Mills Location CPO

(tonnes) PK

(tonnes)

Proposed Time for

Certification

1 Gunung Bais Musi Rawas, Sumatera Selatan 10,683 2,139 December 2011

2 Arta Kencana Lahat, Sumatera Selatan 18,330 4,112 December 2012 3 Belani Elok Musi Rawas, Sumatera Selatan 50,799 12,837 December 2013 4 Sei Lakitan Musi Rawas, Sumatera Selatan 64,828 16,183 December 2014 5 Terawas Musi Rawas, Sumatera Selatan 21,533 4,796 December 2015

Area Summary* No Estates Location Total

(ha) Planted

(ha)

Proposed Time for

Certification

1 Sei Kepayang Musi Rawas, Sumatera Selatan 3,709.1 2,384.3 December 2013 2 Bukit Hijau Musi Rawas, Sumatera Selatan 3,229.1 1,215.1 December 2013 3 Ketapat Bening Musi Rawas, Sumatera Selatan 1,723.6 1,418.3 December 2013 4 Belani Elok Musi Rawas, Sumatera Selatan 5,053.0 1,999.2 December 2013 5 Batu Cemerlang Musi Rawas, Sumatera Selatan 4,114.1 1,393.3 December 2014 6 Sei Lakitan Musi Rawas, Sumatera Selatan 4,818.0 2,705.5 December 2014 7 Riam Indah Musi Rawas, Sumatera Selatan 5,698.5 3,182.3 December 2014 8 Sei Gemang Musi Rawas, Sumatera Selatan 5,509.5 3,113.0 December 2014 9 Gunung Bais Musi Rawas, Sumatera Selatan 3,050.0 1,789.3 December 2011

10 Arta Kencana Lahat, Sumatera Selatan 2,099.1 1,673.5 December 2012 11 Kencana Sari Lahat, Sumatera Selatan 2,566.0 1,592.1 December 2012

12 Issuy Makmur Kutai Barat, Kalimantan Timur 27,117.1 1,712.4 Waiting for the mill commencing

13 Pahu Makmur Kutai Barat, Kalimantan Timur 16,341.9 2,843.7 Waiting for the mill commencing


*) Data as per January – December 2010 However, mills and oil palm plantations in South Sumatra, management LONSUM already have the desire to obtain the RSPO certification for 5 (five) mills and its supply base as shown in table 4 and future plans to provide training and awareness about the RSPO certification process to smallholders / out growers. LONSUM Mills that receives the fruit of the plasma is located in South Sumatra. Based on time-bound challenging, LONSUM prepare for the South Sumatra area of certification. One of these preparation programs is introducing RSPO certification toward the plasma through the training implementation of RSPO Principles and Criteria, in cooperation with the RSPO Indonesia Liaison Office (RILO), Ministry of Agriculture, and WWF Indonesia. Induction described in this training and the impact of RSPO sustainable palm oil, which the farmers will accept if they were in the certification. Because the factory is not yet available LONSUM RSPO certified in the area of South Sumatra will receive the fruit farmers, then there is no commitment or declaration in this training.

1.5. Progress of Associated Smallholders or Out growers Towards Compliance with Relevant

Standards (Should be in Accordance to The 3 Years) Implementation Plan Auditor observed challenging time bound program during annual assessment against the last annual surveillance assessment in 2010. The challenging time bound does not apply to LONSUM in North Sumatra after last visit of annual surveillance assessment in 2010. The auditor proves whole process of supplying the FFB sent to 4 (four) mills that, all the FFB received from company owned plantation rather than originating from 3rd parties (smallholders / out growers). Management LONSUM has a commitment receive only the FFB from 12 company owned estates, which has been RSPO certified. 1.6. Organizational Information / Contact Person(s) All information in respect to certification assessment of RSPO may be addressed to:

Contact Person: Mr. Adi Bastomi Position: Head of Environment and CSR Coordination Organization name: PT PP London Sumatra Indonesia Tbk Address: Jl. Ahmad Yani No.2, Medan Postal code, city: 20111, Sumatra Utara Country: Indonesia Telephone Nr: +62 61 4532300 Fax Nr: +62 61 4550421 Email: [email protected] Website: www.londonsumatra.com

2. Assessment Process

The annual surveillance assessment 2 of the sustainable palm oil management; PT PP London Sumatra, Tbk had been performed in June 20, 2011 to July 1, 2011. The annual surveillance assessments consist of 4 (four) phases: A desk audit (document check) of the LONSUM management system documentation and supporting

documents with the use of a customised RSPO audit checklist according to RSPO manual, procedures and palm oil mill and plantation working instructions;

Certification Body review the result of consultation process (stakeholder meeting) performed, prior to annual surveillance assessment.


Back ground investigation (published dispute, public comment on preliminary announcement) and followed by interviews with personnel of the organization RSPO management, employees and the stakeholders (people surrounding, NGO representatives, land regulators, social watchers, labour union).

Verification of proposed corrective action continued by review of the assessment report by the internal veto persons (board of directors of PT. TÜV NORD Indonesia)

The summary public report of surveillance assessment includes Corrective Action Taken Plan, Verification of Corrective Action Taken. Auditors will verify the certification audit findings and corrective actions, as well as reviewing the effectiveness of the implementation of follow up corrective actions on the next surveillance audit. Request for Corrective Action to close Non Conformity outlined below Major Non Conformity:

− mistakes have been made in the assumptions of the LONSUM management documentation and RSPO Principles and Criteria, which will directly influence the certification assessment results;

− the requirements deemed to be relevant with the certification adopting certain RSPO principle and criteria indicators have not been met or, in other words there has been Non-fulfilment of requirements of the RSPO Principles and Criteria for major indicators;

− A situation that gives rise to considerable doubt as to the capability of the LONSUM management system to achieve the desired results;

Minor Non Conformity: − Where information is insufficient, unclear, or not transparent enough to establish whether is meeting

with a requirement, or Non-fulfilment of requirements of the RSPO Principles and Criteria for minor indicator has existed.

Potential for Improvement − Items and circumstances surrounding the organization of LONSUM management that would allow

optimization in relation to the requirements of the relevant standard; − Which includes potential risks and weaknesses, and strengths;

Annual Surveillance Assessment Checklist of Principles and Criteria

In order to ensure consideration of all relevant assessment of RSPO principles and criteria, auditors use assessment checklist as guideline to verify RSPO implementation as actual against record The checklist shows in a transparent manner, the principles and criteria, and the means employed by SPO management system and the results of the surveillance of the identified criteria. The surveillance assessment checklist serves the following purposes: - It organizes, details and clarifies the principles and criteria that a certification assessment is expected to

meet; - It ensures a transparency in the certification process where principles and criteria have been applied

within the organization of LONSUM management. The surveillance assessment checklist consists of National Interpretation of RSPO Principles and Criteria. Review of documents

SPO documentation and supporting documents for status current revision of mills procedures, estates procedures reviewed before annual surveillance assessment.

Onsite and Follow-up interviews


The audit team collected all information related to LONSUM management system to find evidence conformity of its implementation objectively on a random sampling audit basis. Interview of the respective staffs, workers and some stakeholders in charge were carried-out in a manner and circumstances where the LONSUM management system was implemented within the organization. The TÜV NORD Indonesia performed the on-site interviews with the organization of LONSUM management, palm oil mill operating personnel to confirm selected information and to resolve issues identified in the document review and LONSUM management implementation. The key with respect to and concerned the main topics of the interviews is summarised below Interviewed Persons & Interview topics for Manager, Staff, Workers, Contractors − General aspects of the certification and the certification boundary; − Chemical stores; Water management; Details of paraquat reduction calculation; − Approval documentation and status; Legal aspects related to SMM management; − Management Policy and Quality, SM-K3 and Environmental Management System; − Involved personnel and responsibilities; − Justification of RSPO principles and criteria; − Monitoring and measurement of environmental performance for waste water treatment plant operation; − Identification of environmental aspects and Environmental impacts; − Flora, fauna, Ecology and biodiversity; − Land and conversion planting; Replanting inspection and handling of chemical packaging wastes; Zero

burning ; − Socio economic impacts on local population; Sanitary and hygiene of employee’s housing complex

environment; − License, operation & maintenance authority and responsibility; − IPM (Integrated Pest Management); − The HCV’s identification; − Mill operation including Inspection of receiving of FFB, Transportation of FFB, Road maintenance, and

Workshops for heavy truck, loader etc Interviewed Persons & Interview topics for Stakeholders including NGO’s − Environmental protection within the estate(s) and mill(s) include using of pesticides, waste and effluent

management; Company approach to community development. − Environmental protection within the estate(s) and mill(s) include using of pesticides, waste and effluent

management; Provision of housing, sanitation, amenities and educational support. − Biodiversity conservation within the estate(s) and surroundings (where possibly impacted by the

estate/mill operations); − Opportunities of earning fair wages, overtime and piece-rated work; Resolution of Corrective action

The SPO management of LONSUM is required to resolve or close out by providing the corresponding response to the Non Conformity Report and submission of the documentation on LONSUM manual or procedures and working instruction as well as supporting documents. In this annual surveillance assessment report, the audit team has raised 3 minor non-conformities reports and some improvements. The non-conformity reports and improvements, as outputs result of the surveillance assessment.


2.1. Names of Assessment Team Member and CVs of New Members Not On the Last Assessment Team

Lead Assessor : Sudarmadji He has a background in electrical engineering; and qualified in environmental auditing with sustainability management system such as EMS. He has completed training as Lead Auditor ISO 14001, ISO 9001 and CDM certification. He has completed training as Lead Assessor / Internal Assessor Sustainable Palm Oil by Indonesia Palm Oil Board and KAN (National Accreditation Committee). He is an experienced auditor in several audits palm oil manufacturers assessment based on ISO 14001, with a total of 15 days of audit. He has more knowledge in Occupational Health & Safety management system as Lead Auditor. As team member involved in RSPO certification assessment for PT. London Sumatra Indonesia, Tbk in October – November 2008; and PT. Sawit Mewah dan Makmur in December 2009. Assessor : Wieke Savitri Graduated from Agriculture Faculty in Bogor Agricultural University. Then, consultant at Perkumpulan Untuk Peningkatan Usaha Kecil, a foundation to promote small scale enterprises by offering training and consultation in business management, human resources, marketing and IT. Before joining TUV NORD Indonesia, she spent 7 years working for Danone–Aqua, a beverage company, in which she held various positions, such as Quality Control Manager at Pandaan factory in East Java before her last position as Quality Assurance Manager at Klaten factory in Central Java. Her passion for environmental and social issues had led her to join Aqua Foundation even while working in Danone-Aqua - to develop community development programs for people living around her factory. She also attended a Workshop for Community-based Environmental Educators by the United Nations of Environmental Program in Bangkok. Finally,joined PT. TUV NORD Indonesia in September 2006 as QMS auditor, and appointed Surabaya Branch Manager in May 2008. She is an experienced auditor in palm oil manufacturing and oil palm estates. Attended DOEN RSPO auditors training in 2008. As team member involved in RSPO P &C certification assessment in PT. Perkebunan Nusantara IV, PT. Aek Tarum- Sampoerna Agro, PT. PP. London Sumatra Tbk, Musi Banyuasin Region and PT. Tapian Nadenggan . She is also team member for RSPO Supply Chain Certification System in PT. Multimas Nabati Asahan, PT. Mustika Sembuluh, PT. Kerry Sawit Indonesia and PT. Sinar Alam Permai. Assessor : Anita Masduki She has a bachelor degree in Chemical Engineering from Institute Technology Bandung (ITB), and holds diploma in Biological Treatment from Hiroshima University, Japan, besides holds diploma in Environmental Management from Institute Environmental Management and Assesment in UK. She attended trainings such as Ozone Depleting Substance Program; Indonesia Cleaner Industrial Program and RSPO lead assessor training in 2011. She is an experienced auditor in quality management system ISO 9001, environmental management system ISO 14001 and OHSAS 18001 in various organization. Before joining TUV NORD Indonesia in 2011, she has a long time job as a consultant for 17 years in management system. As team member involved in RSPO P &C certification assessment in PT. Salim Ivomas and PT. Tapian Nadenggan. She is a lead assessor for RSPO Supply Chain Certification System in PT. Multimas Nabati Asahan, PT. Mustika Sembuluh, PT. Kerry Sawit Indonesia and PT. Sinar Alam Permai. Technical Expert : DR. Herdhata Agusta He has a bachelor degree in Agriculture from Bogor Agricultural University (IPB), and holds a doctorate (S3) in Landscape Ecology from University of Hohenheim, Germany. He has a strong background and experience in the Evaluation for Environmental Impact Assessment and aspects of agriculture as a lecturer in Agriculture, Environment and Ecology. Has extensive experience in research such as application of waste of forestry and agriculture for erosion control, weed control and conservation of water soluble phosphate in the soil; ecological performance influencing productivity of people`s plantation.


2.2. Assessment Program

Client: PT PP LONDON SUMATRA INDONESIA, Tbk (LONSUM)

Address: Jl. Jend. A. Yani No. 2 PO Box 1154, Medan

MR Name, Pos.: Mr. Bryan Dyer, Managing Director; Mr.Adi Bastomi, Env. & CSR Manager

Number of Mills: 4 Number of estate(s): 12 Order No. - Business No. -

Mill(s), Location Estates, Locations

- Gunung Melayu POM, Turangie POM, Dolok POM, Begerpang POM

− Gunung Melayu ; Sei Rumbiya; Turangie; Sei Merah; Rambong Sialang; Begerpang; Dolok; Si Bulan; Bah Bulian; Bah Lias; Pulo Rambong; Bungara

Standard: RSPO P&C (Principles & Criteria) May 2008

Type of audit: Annual Surveillance Assessment 2 (ASA 2)

Audit date: 20.06.2011 to 01.07.2011

Lead Auditor: Sudarmadji (SD) Trainee / Expert: Herdhata Agusta (HA)

Auditor(s): Wieke Savitri (WS); Anita Masduki (MS) Audit days on-site: 10 days

Date / Time1)

Site / Shift / Organizational Unit Auditor (Abbrev.)

Interview- partner

2)

Requirements

Day -1: 20.06.2011 Head Office in Medan

09.00-10.00 Opening Meeting SD, WS,AM

Managing Director, Lonsum RSPO team

Introduction team and fine tune audit plan

10.00-12.00 Travelling to Begerpang

12.0 0-13.00 Break and lunch

13:00 – 14:30 - Sites: Begerpang Office for

Begerpang, Sei Merah, Rambong Sialang

WS, AM Lonsum-RSPO team

- General issues for RSPO certification assessment

- The SPO documentations and records

- Environmental Policy - Justification for RSPO principles

and criteria - Principle – 1: 1.1, 1.2 - Principle - 2: 2.1 - Principle – 3: 3.1


Date / Time1) Site / Shift / Organizational Unit Auditor (Abbrev.)

Interview- partner 2) Requirements

14:30 – 17:00 - Mill Operation: Begerpang POM AM Lonsum-

RSPO team

- Quality, SM-K3 and Environmental Management System

- Involved personnel and responsibilities

- Chemical stores. - Monitoring and measurement of

environmental performance of waste water treatment plant.

- Mill operation including inspection of incoming FFB, FFB transport, road maintenance and workshops for heavy trucks, loaders, etc

- Principle - 4: 4.1, 4.4, 4.7, 4.8 - Principle – 5: 5.4, 5.6 - Principle – 6: 6.1, 6.2, 6.3, 6.5,

6.6, 6.8, 6.10, 6.11 - Principle – 8: 8.1

14:30-17:00 Estate operation: Bagerpang Estate WS Lonsum-

RSPO team

- Flora, fauna, ecology and biodiversity

- Land and conversion planting - Decreased paraquat use - HCV identification - IPM (Integrated Pest

Management) - Replanting and handling of

chemical packaging wastes - Zero burning - Principle - 4: 4.1, 4.2, 4.3, 4.4,

4.5, 4.6, 4.7, 4.8 - Principle – 5: 5.1, 5.2, 5.5 - Principle – 6: 6.1, 6.2, 6.3, 6.4,

6.5, 6.6, 6.7, 6.8, 6.10, 6.11 - Principle – 8: 8.1

14:30-17:00 Estate operation: Sei Merah Estate SD Lonsum-

RSPO team






6.5, 6.6, 6.7, 6.8, 6.10, 6.11 - Principle – 8: 8.1

End of audit day 1


Date / Time1)

Unit Site / Shift / Organizational Unit

Auditor (Abbrev.)

Interview- partner

2)

Requirements

Days –2 : 21.06.2011 Stakeholders contacted at Bagerpang Estate, Sei Merah Estate, Rambong Sialang Estate

08:00-12:00 Rambong Sialang Estate Office SD, WS, AM Lonsum-RSPO team

- Consultation, Interviews stakeholders (Indigenoes people , NGO, Chief of village)

- Housing facilities - Public facilities - School, Health program, - Social Responsibility program - Workshop, Clinic

12:00 -13:00 Break and pray

13:00 – 17:00

Estate operation: Rambong Sialang Estate

WS Lonsum-RSPO team






6.5, 6.6, 6.7, 6.8, 6.10, 6.11 - Principle – 8: 8.1

13:00 – 17:00

Continue Mill Operation : Bagerpang Sites: Office and Mill - Mill Operations: Begerpang

POM

SD, AM Lonsum-RSPO team






- Principle - 4 : 4.1, 4.4, 4.7, 4.8 - Principle – 5 : 5.4, 5.6 - Principle – 6 : 6.1, 6.2, 6.3, 6.5,

6.6, 6.8, 6.10, 6.11 - Principle – 8 : 8.1

End of audit day 2


Date / Time1)

Unit Site / Shift / Organizational Unit

Auditor (Abbrev.)

Interview- partner

2)

Requirements

Day -3: 22.06.2011 Turangie Estate and Office :

09:00-12.00

Site : Turangie Estate Office for Turangie Estate, Pulo Rambong Estate and Bungara Estate

WS Lonsum-RSPO team





12:00 – 13:00 : Break and lunch

13.00-17.00 Desk audit in Turangie Estate WS Lonsum-RSPO team

- Principle - 4 : 4.1, 4.2, 4.3, 4.4, 4.5, 4.6, 4.7, 4.8

- Principle – 5 : 5.1, 5.2, 5.5 - Principle – 6 : 6.1, 6.2, 6.3, 6.4,

6.5, 6.6, 6.7, 6.8, 6.10, 6.11 - Principle 8 : 8.1

09:00 – 17:00 - Estate operation: Pulo Rambong Estate

AM Lonsum-RSPO team

- Flora, fauna, ecology and

biodiversity - Land and conversion planting - Decreased paraquat use - HCV identification - IPM (Integrated Pest


chemical packaging wastes - Zero burning - Principle - 4 : 4.1, 4.2, 4.3, 4.4,

4.5, 4.6, 4.7, 4.8 - Principle – 5 : 5.1, 5.2, 5.5 - Principle – 6 : 6.1, 6.2, 6.3, 6.4,

6.5, 6.6, 6.7, 6.8, 6.10, 6.11 - Principle 8 : 8.1

09:00-17:00 Estate operation: Bungara Estate SD Lonsum-RSPO team

- Flora, fauna, ecology and

biodiversity - Land and conversion planting - Decreased paraquat use - HCV identification - IPM (Integrated Pest




6.5, 6.6, 6.7, 6.8, 6.10, 6.11 - Principle 8 : 8.1

End of audit day 3


Date / Time1)

Site / Shift / Organizational Unit Auditor (Abbrev.)

Interview- partner

2)

Requirements

Day -4: 23.06.2011 Turangie Mill and Office : Stakeholders contacted at Turangie POM, and Turangie Estate, Pulo Rambong Estate, Bungara Estate

08:00-12:00 Lonsum operation:

SD, WS, AM, HA

Lonsum -RSPO team

- Consultation, Interviews stakeholders (Police officer , NGO, Chief of village)

- Employees housing facilities - Public facilities - School, Health program, - Social Responsibility program - Workshop, Clinic

12:00 – 13:00 : Break and lunch

13:00 – 17:00 - Sites: Office and Mill - Mill Operations: Turangie

POM

SD, AM Lonsum-RSPO team







6.6, 6.8, 6.10, 6.11 - Principle – 8 : 8.1

13:00 – 17:00 - Estate Operation: Turangie Estate WS,HA Lonsum-

RSPO team






6.5, 6.6, 6.7, 6.8, 6.10, 6.11 - Principle 8 : 8.

End of audit day 4


Days –5 :24 .06.2011 Closing Meeting for Bagerpang POM, Turangie POM, Rambong Sialang Estate , Sei Merah Estate, Pulo Rambong Estate and Bungara Estate

Date / Time1)

Site / Shift / Organizational UnitAuditor

(Abbrev.)

Interview-

partner 2)

Requirements

08:00-10:00 Auditor room SD, WS, AM, HA

- Preparation Audit finding and report

10:00-12:00 Meeting room SD, WS, AM, HA

- Presentation annual assessment finding, propose corrective action

End of day 5 and travelling to Medan


Days-6: 25.06.2011 Bah Lias Estate & Bah Bulian Estate

08:15-12:00 Estate operation: Bah Lias EstateAM Lonsum-RSPO team






6.5, 6.6, 6.7, 6.8, 6.10, 6.11 - Principle – 7 - Principle – 8 : 8.1

12:00 -13:30 Break and lunch

13:30 – 17:00 Estate operations: AM Lonsum-RSPO team





08:15-12:00 Estate operation: Bah Bulian Estate WS Lonsum-

RSPO team








13:30 – 17:00 Estate operations: Bah Bulian Estate WS Lonsum-

RSPO team





End of audit day 6 and travelling to Medan


Days –7 : 27.07.2011 Gunung Melayu Estate & Sei Rumbiya Estate

08:15-12:00 Estate operations: Gunung Melayu Estate WS Lonsum-

RSPO team








13.30 – 17.00 Estate operations: Gunung Melayu Estate WS Lonsum-

RSPO team





08:15-12:00 Estate operations: Sei Rumbiya Estate AM Lonsum-

RSPO team







- 12:00 -13:30 Break and lunch

13.30 – 17.00 Estate operations: Sei Rumbiya Estate AM Lonsum-

RSPO team





End of audit day 7


Day 8: 28.06.2011 : Gunung Melayu POM & Si Bulan Estate

08.00 – 12.00 Mill Operation: Gunung Melayu POM WS Lonsum -

RSPO team







6.6, 6.8, 6.10, 6.11 Principle – 8 : 8.1

12.00 – 13.30 : Break and lunch

14.00-16.30 Lonsum operation: WS Lonsum -

RSPO team



08:15-12:00 Estate operations: Si Bulan Estate AM Lonsum-

RSPO team







End of audit day 8 : AM travelling to Medan


Days –9 : 30.06.2011 Dolok Estate & Dolok POM

08:10-12:00 Estate operations: Dolok Estate WS Lonsum-RSPO team








13.00 – 15.00 Mill operations: Dolok POM WS Lonsum-RSPO team







6.6, 6.8, 6.10, 6.11 - Principle – 8 : 8.1

15:00-17:00 Site: Dolok Office WS Lonsum-RSPO team





End of audit day 9


Days –10 :01 .07.2011 Stake holder meeting and Closing Meeting for Dolok POM, Dolok Estate, Gunung Melayu POM, Gunung Melayu Estate, Bah Bulian Estate

Date / Time1)

Site / Shift / Organizational UnitAuditor

(Abbrev.)

Interview-

partner 2)

Requirements

09.00-10.30

Lonsum operation: Stakeholder meeting for Dolok POM and Dolok Estate

WS Lonsum -RSPO team



10.30-12.00 Closing meeting WS Lonsum -RSPO team

Presentation of annual assessment findings, propose corrective action

Break and lunch and travelling to Medan. End of Annual Surveillance Assessment 2


3. ASSESSMENT FINDING 3.1. Summary of Findings by Each Principle and Some Example Criteria The objective evidence obtained during the annual surveillance assessment. The whole information was comprehensively asked in accordance with the RSPO indicators for 4 (four) mills and each of the 12 (twelve) plantations. The result for each of the RSPO indicators assessed of operational areas within the LONSUM management to provide an assessment result is compliant. The major and minor indicator of the criterion has been aggregated to provide the objective of finding for the audit team. Identified Non-Conformities and noteworthy Positive and Negative Observation see on 3.2. The audit team has issued this surveillance assessment in compliance with the implementation within the criterion of the RSPO principles and criteria with 3 (three) minor non-conformity and some opportunities of improvements. The LONSUM management has been ready to submit the documents needed to fulfill the requirements, and corrective action plan addressing each of the incompliant criterion of the RSPO principles and criteria. PT. TUVNORD Indonesia has reviewed the corrective action plan and the date for its implementation. The effectiveness of the implementation of corrective action on next 2nd annual surveillance assessment will be checked for minor nonconformity findings. Instead, the major findings shall be closed within 60 days. The assessment of LONSUM management operations comprise 4 (four) palm oil mills and, 12 (twelve) oil palm plantations, whole facilities and infrastructures as well as supporting services. The audit team has concluded this assessment for recommendations to PT PP London Sumatra Indonesia, Tbk operations to comply with requirements of RSPO Principle and Criteria, and National Interpretation version of May 2008. Thus, PT. TUVNORD Indonesia recommends that, PT PP London Sumatra Indonesia, Tbk be approved as a producer of RSPO Certified Sustainable Palm Oil. Criterion of RSPO Principles and Criteria incorporated into the implementation within palm oil mill and oil palm plantation operations is outlined below:

Criterion 1.1 Provide adequate information to other stakeholders on environmental social and legal issues relevant with RSPO Criteria, in appropriate languages and forms to allow for effective participation in decision-making LONSUM has a procedure to provide information to interested stakeholders on request, based on Operating Procedure on Communication issued 10.08.2009. The request and the response of management LONSUM in associated with stakeholder’s information recorded in "List of Demand and Response". According to the procedure, request can be verbal or written, both of them will be followed up properly, nevertheless, if community request for some donation or aid, LONSUM will only follow up a written request. Assessors has sighed thoroughly, most of requests generally ask for donation or aid. As stated by procedure, request for some donation accepted by Estate/ Mill Manager will be forwarded to Area Manager Agronomy (AMA) before compiled every month by Head of CSR and Environment Department. As said by interviewed Estate Manager, donation less than Rp 250.000,- could be approved by Estate Manager without forwarded to AMA. Records of information request and records of responses to information request are kept properly with retention time for five years. Assessor observed during surveillance assessment the implementation of this criterion after 2 (two) years of certification assessment and to the last surveillance assessment, that RSPO principle & criteria is full compliance. Criterion 1.2 Management documents are publicly available, except where these are prevented by commercial confidentiality or where disclosure of information would result in negative environmental or social outcomes


The mills and estates’ profiles, compliance to regulations, environment achievement, health and safety implementation, CSR governance is informed in the stakeholders meeting. Copies of legal documents was filed at each the mills and estates including information on land titles and user rights document are available to stakeholders. The information is available to stakeholders for safety and health program, continual improvement, result of environmental monitoring and measurement of environmental impact and social impact, which documented in AMDAL that was approved by local environmental agency of North Sumatra, and LONSUM Environmental Impact Assessment (EIA) document that approved by Head of Environment and CSR Coordination. It was found that some estates had received information requests by local council members regarding environmental-social issues, and taxes. There were Notification letters that they will visit and inspect the estates to investigate the issues. LONSUM had responded the requests and accepted the visits, however there was no minutes meeting nor records provided what kind of information had been delivered during the visits, except the records of total money given to the local council members after the visits. The interviewed Estate Manager confessed that the local council members just looking around the estate and didn’t care about the environmental-social information, and it happened several times. Assessor observed during surveillance assessment the implementation of this criterion after two (two) years of certification assessment and to the surveillance assessment, that RSPO principle & criteria is compliance with observation. Criterion 2.1 There is compliance with all applicable local, national and ratified international laws and regulations

LONSUM has implemented to measure the fulfillment and its compliance applicable legal and other requirement in accordance legal procedure (EMS P02). LONSUM keep all applicable legal and other regulations, which are registered in applicable regulation list (EMS F-02a), in a manner that the SPO management complies with applicable regulation. The Head of Environment & CSR Coordination Department and respective mills and estates managers identify applicable legal and other requirements including license and permits based on their activities. The updating of regulation is the responsibility of Head of Environment & CSR Coordination Department. Internal auditors have assessed relevant legal to its compliance of applicable local, and national as well as ratified international and other regulation through integrated EMS and RSPO internal audit on yearly basis. Assessor inspected all records of legal compliance evaluation on period February 2011. The result of applicable legal evaluation mostly compliance shown in legal compliance document – EMS 1A-C6., however, the list of permits was not properly recorded and the status was not monitored to assure that the permit is still valid, it was found that the permit to use surface water was not valid on October 10, 2010, however, the management letter to ask for the extension of the permit was made on November 3, 2010. Compliance status : Not compliance see NCR T01.06/11. Criterion 2.2 The right to use the land can be demonstrated and is not legitimately contested by local communities with demonstrable rights

Within the operation of SPO management after 2 years of certification assessment in 2008 and it’s approved as a producer of RSPO certified sustainable palm oil in 2009 that, none of illegal land occupying by LONSUM Management.. General Affairs department and Legal department are responsible to solve if there is a conflict of land acquired, however, if the land conflict can not be resolved by negotiation, the last option is to bring it into court. Mills manager and estates manager have registered properly for the certificate of HGU in land acquiring register list. The whole land use for oil palm planted by identification and demarcated by stone boundary shall be managed. There was evidence that legal boundary periodically monitored to ensure that they are not broken, had been moved or missing, however, if this case happens, an action plan should be carried out to fix the boundary stone accordingly.


Assessor observed during surveillance assessment the implementation of this criterion after 2 (two) years of certification assessment and to the surveillance assessment, that RSPO principle & criteria is compliance with observation. Criterion 2.3 Use of land for oil palm does not diminish the legal rights or customary rights of other users, without their free, prior and informed consent

As observed in the surveillance assessment of RSPO Principles and Criteria implementation within LONSUM operation, there is no any customary right of other users. Criterion 3.1 There is an implemented management plan that aims to achieve long term economic and financial viability

LONSUM has 5 years of crop projection that includes key performance mill and estates and has a long terms program to commit provision of economic and financial viability. LONSUM has also the business plan cultivating to increase FFB production capacity by long terms projection. The continuous long term program are the long term range replanting program of long term crop projection, and long term financial forecast. Assessor inspected whole document respects to North Sumatra Replanting Program 2011 – 2016 for the long term financial forecast is a 5 year financial projection to work out the anticipated profits taking into consideration the latest yield estimates, projected CPO prices and projected budgeted operational costs is comply with RSPO principle & criteria. Assessor observed during surveillance assessment to implementation of this criterion after 2 (two) years of certification assessment and to the surveillance assessment, that RSPO principle & criteria is full compliance. Criterion 4.1 Operating Procedures are appropriately documented and consistently implemented and monitored

Environment department and supported respective function have prepared and established standard operation procedures that incorporate best practices for all areas of the mills and the plantations operation. Most of the standard operation procedures integrated with quality management system and environmental management system. More than 20 standard operation procedures established for mills operation. The following procedures applicable and implemented within sustainable palm oil,

a. SOP for Oil Palm (containing aspects from nursery, land preparation, planting, upkeep, harvesting, waste management, HCV, emergency preparedness and response, and environmental monitoring).

b. SOP for Palm Oil Mill (containing stages of process, boiler, power generation, water treatment, land application, electrical system, quality (inc monitoring of CPO parameters), dispatch and laboratory).

c. Manual and SOP for Environment Management System, Health & Safety and SPO. Any changes or revisions to the standard operation procedure for the respective section in charge of mills and plantations will receive the status as update. The standard operation procedure to monitor FFA parameters and moisture of CPO during in process before delivery to end user inspected by quality control inspector and laboratory analyst. Monitoring Records of inspection are available in a laboratory cabinet with appropriate identification and kept for 5 years according to control of record procedure. Records and documents in mills usually well maintained and controlled than in some estates. In morning call event usually the checklist records should be kept more properly. There was revision on SOP about IPM, “Pengendalian Hama dan Daun” but didn’t socialized yet or distributed. Assessor observed during surveillance assessment the implementation of this criterion after 2 (two) years of certification assessment and to the surveillance assessment, that RSPO principle & criteria is compliance with observation.


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

Bah Lias Research & Development has carried out and made annual fertilizer recommendation based on oil palm soil testing and analysis which are regularly performed on a 5 years basis, while leaf of oil palm analyses are done only 5% from total of LSU or 10 – 20 per ha of LSU. The leaf analysis testing in yearly basis performed. The use of beneficial weeds mentioned in the criterion 4.5. The SPO management has a method to monitor the best practice crops protection applies legume cover crops (LCC) to protect soil from erosion, add nutrients and prevent weeds. The remaining recommended species of LCC merely Muccuna brachteata for the reason that it can grow faster and live longer than other species such as Pueraria javanica and Calopogonium caeruleum In order to reduce application of in-organic fertilizer and reduce cost, in some areas, the SPO management also applies EFB (empty fruit bunch), enriched mulch and POME for land application. The result of land analysis is consideration to improve content of land nutrient and as recommendation for consumption of fertilizer quantity per Kg/LSU or pe r kg/ palm. The recommended in-organic fertilizer from BLRS are Super dolomite, MOP, RP, Urea, and Kieserite. Consumption of Super dolomite recommended in January 2011 is 1.75 kg / palm in Block 072003 shall be 7,788 kg per block, but the realisation was done in February 2011 only 5,700 kg without justification. During audit, the auditee team could not explain the difference between planning and realization of fertilizer use, because if the dosage is not appropriate, the palm will suffer nutrient deficiency. A corrective action had been made to explain the applied fertilizer only for original palms, not total palms, because there were some supplied palms in that field, the corrective action had been accepted, however the asssessor suggested if there is difference between recoomendation and application, justification should be verified accordingly. Compliance status : Not Compliance (NCR no.T02.06/11). Criterion 4.3 Practices to minimize and control erosion and degradation of soils

LONSUM has committed to make efforts to practice showing with the evidence obviously to minimize and to control soil degradation at some of plantations. LONSUM is making efforts to practice this with the evidence to minimize and to control soil degradation at some of plantations. LONSUM applies some techniques to reduce erosion, especially while land preparation for replanting/conversion, such as planting LCC (legume cover crops), terracing/platforms, frond stacking, and borrow pit and windrowing. In addition, using of LCC applied another method or some of best practicing implemented following up keep terrace; up keep drain including main drain, collect drain, and sub drain; upkeep connecting pitch; up keep outlet drain. Erosion monitoring were plots constructed in some areas, in order to get information on the erosion level based on soil types, slope, and ground covers. This started from the replanting or conversion area until the canopy of the palm oil leaves touching each other. The monitoring proves that LCC application is effective to reduce erosion. The SPO management has implemented the riparian buffer zones program and monitoring for the existing of erosion control at field, FN93101 (Sungai Kali Bening) convinced. The factual planned action is sufficient documented. ECSR Department and Bungara Estate are to monitor the river water quality of Sungai Kali Bening periodically (compared to PP 82 of 2001). Bungara Estate is to manage the riparian strip in line with the coming RSPO HCV Management Monitoring Toolkit. LONSUM has highly protected the whole areas of estates, if there is found the wetland in North Sumatra. The audit team did not find any wetland within the whole company owned estate. Assessor observed during surveillance assessment the implementation of this criterion after 2 (two) years of certification assessment and to the surveillance assessment, that RSPO principle & criteria is full compliance. Criterion 4.4 Practices to maintain the quality and availability of surface and ground water


LONSUM has facilitated provision of water in storage tanks consume daily operation mills and estates and employee’s housing. The water for industrial use is supplied from the river and for household/domestic use is from water sources (HCV 4). LONSUM management policy is to remain and maintain the water sources as HCV 4; protect the existing riparian strip as stated in their procedure for riparian strip; and remain the rubber trees while converting to palm oil as pioneer trees. Sign boards of HCV 4.1 to warn people for not hunting and fishing and to remind workers for not applying fertilizer and pesticides to oil palms in the riparian zones should be multiplied along Wampu river in Turangie Estate. Some water sources still existed since hundred years ago proved that LONSUM concerns to protect this type of HCV 4 for environment and social points of views, such as in Turangie Estate and Begerpang Estate, the area surrounding the spring water source is well maintained and protected, especially at Begerpang Estate that utilized as resort area or meeting place. They have other source of water as deep well with capacity of flow rates 14,000 M3/month taken from Sungai Asahan . There is program in 2011 to build 1 unit watergate 5 meters wide for nursery at Rambong Sialang Estate, from March to May 2011 the progress was 10%. Monitoring consumed water to all employees housing and mills are recorded based on mass balance of water. The data is available to daily monitor accurately water balancing for daily consumption. Most of the water is purpose to clean some dirty area in the mills, water drinking, and showers and for employee’s housing complex. For the water that used in the mill is monitored and measured against of the FFB inputs. The limitation of water consumption base on total of tonnage CPO per FFB is 1.25 tones/FFB. This basis is as KPI’s of whole mills as performance, and assessor found that the average water consumption for all mills are comply. The Biological Oxygen Demand (BOD) of wasted water treatment (POME) is environmental parameter has been monitored and measured by external laboratory and independent 6 (six) months basis. Result of BOD monitoring is into documents of RKL/RPL (Environment Management Plan – Environmental Monitoring Plan) and UKL/UPL (Environmental Management Efforts and Environmental Monitoring Efforts) sent to Bapedalda. Therefore, as a result that LONSUM have maintain the quality of surface and ground water, water quality monitoring of community well that is used for drinking water should be available. Assessor observed during surveillance assessment the implementation of this criterion after 2 (two) years of certification assessment and to the surveillance assessment, that RSPO principle & criteria is compliance with observation. Criterion 4.5 Pests, diseases, weeds and invasively-introduced species are effectively managed using appropriate Integrated Pest Management (IPM) Techniques LONSUM has identified and documented an Integrated Management System Annual Program (2011) on “Budget Plan 2011” which implemented in all estates. The company’s IPM strategy includes field condition checks prior to spraying of herbicides and monitoring of pests and diseases. Monitoring of insect pests is carried out routinely and outbreaks are reported Most of pests attacking the leaves of plantation are insect and rats that eat the palm fruits. Pests engineer is to monitor regularly the spreading of pest in each estate by one of methods includes detection, cencus, examination, treatments, evaluation, monitoring and organisation.. The IPM techniques and natural control confirmed to all plantations to be inspected. Monitoring on consumption of quantity herbicides is recorded in each of the estates and displayed by the estate managers. Using of herbicide uncontrollably can sensitively endanger spray operator in terms of his/ her health. LONSUM also applies beneficial weed to reduce the use of chemical while handling pest, such as Turnera subulata (bunga pukul delapan), Antigonon leptopus (air mata pengantin), Euphorbia heterophylla (patik emas), .Agerotum conyzoides (babadotan), and Oxalis borreliari (belimbingan). As well as, controlling of pest using by virus and fungicide are well effective. The recommended repeated census should be done accordingly without delay before continue to the next stage at Bah Lias Estate.


Assessor observed during surveillance assessment the implementation of this criterion after 2 (two) years of certification assessment and to the surveillance assessment, that RSPO principle & criteria is compliance with observation. Criterion 4.6 Agrochemicals are used in a way that does not endanger health or the environment. There is no prophylactic use of pesticides, except in specific situations identified in National Best practice guidelines. Where agrochemicals are used that are categorized by the world health organization as types 1 A or 1 B, or are listed by Stockholm or Rotterdam Conventions, Growers are actively seeking to identify alternatives and this is documented

The information is available in related agrochemicals used which is regulated by who health organization for type 1A or 1B. Head of Environment and CSR Coordination, and oil palm plantation researcher have declared a commitment to minimize hazardous agrochemicals. Since year 2005 only approved agrochemicals that have been registered are to be applied in the plantations. There is a document stating the use of pesticides in electronic files. The consumption of agrochemicals are used based on internal regulation issued by ead of Environment and CSR coordination, and Researcher manager, and in accordance with the Managing Director Operation declarations, standard operation procedures, and MSDS. There is evidence of decreasing use of paraquat (i.e Gramoxone) in all estates as LONSUM management commitment to reduce paraquat in their operations, the paraquat only used in immature palms area or replanting area due to severe occurence of fern and lalang (Imperata cylindrical). LONSUM provides the health care facilities for sprayer operators, workers, and staff as well as people living around the employee’s housing complex. The patients are registered with his/her disease medical book to ensure to be investigated and reported to the SPO management. Each of the estates has a health care facility and a doctor visits them every week to remedy the people’s need with medical care. LONSUM states its policy for handling PPE while using agro-chemicals in SOP – Guide to the Safe Use of Pesticides. This contains toxicity, storage safety precautions, solution preparation and application, pesticide waste disposal, first aid, protective clothes and list of pesticides allowed by the regulations. It was evident shown on record of monitoring pesticide used for immature palm and nursery in plantations. Monitoring agrochemical used well recorded for using pesticide The SPO Management also constructed standardized warehouses for temporary B3 (toxic and hazardous materials) waste and permitted by the Ministry of Environment. All B3 wastes are recorded including agrochemicals containers, fertilizer bags generated from the estates, and used oil and spare parts from workshops, and properly placed in these warehouses for 90 days, then must be sent to wastes company, whose has legal permit from the ministry of environmental living. The spraying operators are yearly checked-up and get proper training for use of pesticides. ) Assessor observed during surveillance assessment the implementation of this criterion after 2 (two years of certification assessment and to the surveillance assessment, that RSPO principle & criteria is full compliance. Criterion 4.7 An Occupational Health and Safety Plan are documented, effectively communicated and implemented

The SPO management established a safety, health and environment policy was approved by President Director since June 2006.. Implementation of the policy is well comprehensive and induction policy is to be the responsibility of safety engineer (SM-P2K3). The policy is available in the mills and the plantations; and it is communicated to all subcontractors. A safety engineer on a daily basis does monitor and inspect all facilities of mill operation relating to emergency conditions. Records of mill facilities and its operation are kept properly and identified and retrievable in the safety engineer’s room. If there is an accident in the mills caused by the workers violating a working procedure or other instructions, investigation of the accident is to be conducted and distributed to mill manager as of the agenda in safety meeting. In one of the mills which should conducted safe practices in accordance with environment safety (SM-P2K3) some safety concern was found due to the non-compliance with and not following safety program, identification of hazard and risk assessment, and the monitoring achievement of safety program was not available. Assessor found that Fire extinguisher No.32 in pump house was not regularly checked.


Audit team observed some of the estates show their implementation on Safety and Health with the identification of risk source was in form P-07; and objectives, targets and programs in form P-05. The estates report to Safety and Health Coordinator regarding the progress of programs on monthly basis. LONSUM has also well conducted to medical check-up for workers in last December 2010. Training plan program 2010 -2011 for identification hazard and control of risk was documented and recorded to consider set of safety program for all workers. The emergency drills and evacuation practice are regularly performed in 2 or 3 months basis. Assessor found that noise test result in genset area in January 2010 exceed the maximum level of 85 db, the workers in such area were sent for audiometric test and it was found that there were 6 workers had hearing disturbance but they are still working in this area in June 2011. The case was caused by late delivery of test result to the unit so they could not take follow up action immedeately. Compliance status : Not compliance, NCR T02-06/11. Criterion 4.8 All staff, workers, smallholders and contractors are appropriately trained

LONSUM provide internal and external training for all its staff and employees. LONSUM has developed procedure for training in SOP/P-09-K3 dated 10th January 2007. Mill managers and Estate managers identify training needs and establish training programs annually. There are several training programmes for workers, for example : fire prevention, hazardous waste materials management, spraying practices, Integrated Pest Management, and Occupational Health and Safety. The training records were available indicated date, training material, trainer and participants, and photographs as evidence. Evaluation of training effectiveness is conducted regularly to ensure all staff and workers particularly are updated with sufficient training. The smallholders have been trained for induction of emergency procedure. LONSUM also facilitated smallholders training for best agricultural practices of oil palm cultivation in sustainable manner which held at LONSUM training center at Rambong Sialang. All training records were checked, including some contractors to verify the corrective action for nonconfirmity raised in last surveillance. Assessor observed during surveillance assessment the implementation of this criterion after 2 (two) years of certification assessment and to the surveillance assessment, that RSPO principle & criteria is full compliance. Criterion 5.1 Aspects of Plantation and mill management, including replanting, that have environmental impacts are identified and plans to mitigate the negative impacts and to promote the positive ones are made, implemented and monitored to demonstrate continuous improvement

As observed in some estates, identification and monitoring plan to mitigate environmental impacts and re-planting identification were satisfactorily during 2nd annual surveillance assessment to ensure LONSUM is concerned to monitor these activities. The assessment is well performed in environmental management efforts and environmental monitoring efforts (UKL/UPL) and be reported to Bapedalda every 6 months. LONSUM has re identification of environmental aspect and social, and analyzed of the impact before land clearing for replanting. Identification and evaluation of environment and social aspects and impact for palm oil estates was updated every 6(six) months and documented in EMS F-01a issues No.3; the activity of replanting is informed in environment management plan – environment monitoring plan (RKL/RPL) period July 2010 – December 2010. LONSUM has also well informed other activities, which documented in RKL/RPL including information of social responsibility program and achievement, safety and health program of fogging for employees housing complex, Monitoring use POME for land application, water quality of river, monitoring of air quality emission. Assessor has checked record of water effluent monitoring for POME for Semester I and II 2010 in RKL/ RPL report. The environmental parameters have not exceeded effluent quality standard for BOD and COD. Assessor observed during surveillance assessment the implementation of this criterion after 2 (two) years of certification assessment and to the surveillance assessment, that RSPO principle & criteria is full compliance.


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

LONSUM has prepared and developed all information as well for flora and fauna due to the certification. The flora and fauna are comprehensively identified in “Executive Summary of High Conservation Value Report 2009”. The HCV’s areas are recognized with HCV’s 4.1, 4.2, and 6, which most of HCV’s are available in the whole of the plantations. The HCV’s area at the field is well identified with signboards. Identification of HCV’s was updated for 2010 and its accordance government regulation No. 07 Tahun 1999. The identification of HCV’s whole in LONSUM was documented in” List of Protected Species”. The HCV’s identified are HCV 4.1, HCV 4.2, and HCV 6 The maps of HCV were formally issued by BLRS (Bah Lias Research Station) in 2008 completed with types of HCVs and GPS points. The areas of Lonsum’s North Sumatra has been cultivated since more than 100 years, however while audited, some types of HCVs, such as water sources, riparian strips, and biodiversity are still found. This proves that the management concern to the protection of HCVs. LONSUM also monitor the quality of the river water periodically based on PP 82 of 2001 to ensure that the operation doesn’t affect significantly to the reduce of water quality. Assessor has compared to the identification of HCV at the certification assessment 2008, that the results of the identification of 2011 when the implementation of the annual surveillance audit, the identification of HCV there was no change or the emergence of new species-species of flora and fauna. However, the identification of HCV area in some sites with sign boards were slightly informative for common people to be understood the message, some HCV area only identified with written pillars “HCV 4.1 or HCV 4.2” without any information. Assessor observed during surveillance assessment the implementation of this criterion after 2 (two) years of certification assessment and to the surveillance assessment, that RSPO principle & criteria is compliance with observation. Criterion 5.3 Waste is reduced, recycled, re-used and disposed of in an environmentally and socially responsible manner

Suitable method is used as environmental aspects identification and environmental impacts assessment to control all sources of significant environmental aspects including management of wastes. The wastes of used agrochemical jar are disposed in chemical store permanent area which is kept away from rain. Prior to be stored in chemical permanent area, the wastes are crushed in a manner not to be re-used. Some wastes have economical values for metal scraps generated from workshop waste. Most of metal scraps were sold to the recycler. In addition, the EFB wastes are used as composting for several plantations and it is well implemented. Discharge of liquid wastes to waste treatment plant for BOD, COD and PH are regularly measured to ensure that the parameters are under control in accordance with waste water regulation. Assessor has compared to the implementation of reducing, recycle, and disposal wastes (wastes management) at the certification assessment 2008, that the implementation of wastes management during the annual surveillance audit observed, that the wastes management is well implemented the whole of Mills and Estates. This criterion was observed thoroughly that the implementation in the annual surveillance assessment has fully compliance with RSPO principles & criteria. Criterion 5.4 Use of energy use and use of renewable energy is maximized

LONSUM management applies the efficiency program for energy, which is called as renewable energy program. Boilers use fiber and palm kernel shell as fuel (environmentally friendly) fiber and palm kernel shells are burned in furnace heats water in a boiler to generate high pressure steam (heat). This high pressure steam is used as a means for driving the turbine shaft is connected to the shaft generator unit (generator) to produce electricity. Electricity were generated from these plants to meet electricity needs internally (factories,


employee housing, guest house and public facilities. The abnormal daily operation uses fuel as power source of generator set to produce electricity as back up for office operation and using other power source of electricity from PLN Grid connected to employees housing complex, guesthouse, etc. Assessors has checked that corrective action from NCR issued last year has been implemented consistently. All mills has modified the report of monitoring of renewable energy consumption (litre HSD use per ton FFB and litre HSD use per ton CPO produce) and also put the use of HSD for Gen-set into the total HSD consumption, and then calculates the efficiency based on the actual vs. standard. Until May 2011, usage of fossil fuel only 10% comparing usage of kernel. Assessor observed during surveillance assessment the implementation of this criterion after 2 (two) years of certification assessment and to the surveillance assessment, that RSPO principle & criteria is full compliance. Criterion 5.5 Use of fire for waste disposal and for preparing land for replanting is avoided except in specific situations as identified in the Asean guidelines or other regional best practices

LONSUM management has high commitment to do zero burning policy. This zero burning policy was supported by managing director of LONSUM. The audit team has checked to confirm zero burning policy on the whole of mills and estates are well implemented. The wastes that are generated by mills and plantations activities are treated properly within the SPO management operation. It was observed at Gunung Melayu Estate in replanting area OP 915000 there was a sign board to prohibit use of fire in replanting area. Assessor observed during surveillance assessment the implementation of this criterion after 2 (two) year of certification assessment and to the surveillance assessment, that RSPO principle & criteria is full compliance. Criterion 5.6 Plans to reduce pollution and emissions, including greenhouse gases are developed, implemented and monitored

The prevention of pollution is a part of the SPO Management Policies on health & safety; and environment. Monitoring and measurement on emission parameters are implemented accordance emission regulation. On 6 (six) monthly basis, the emission of boiler and vehicle for transportation of FFB are tested by external independent laboratory. Results of emissions are reported to Head of Environment and CSR Coordination to ensure that necessary actions are taken. The result of emission monitoring and management, and monitoring effluent of wastewater (POME) are also reported to the local Environment Agency (Bapedalda) as part of RKL-RPL (Environment Management and Monitoring) Semester Report. Assessor observed during surveillance assessment the implementation of this criterion after 2 (two) years of certification assessment and to the surveillance assessment, that RSPO principle & criteria is full compliance. Criterion 6.1 Aspects of plantation and mill management including replanting that have social impacts are identified in a participatory way and plans to mitigate the negative impacts and promote the positive ones are made, implemented and monitored to demonstrate continuous improvement

LONSUM has developed and has a method to monitor all information due to social aspects surrounding people who are living at neighborhood and within the employee’s housing. All information related social aspects are identified and assessed using appropriate method such as environmental aspects and impacts assessment. Result of the assessment for social aspects is reported to Head of Environment and CSR Coordination, and distributed to respective concerned party such as environmental impact-controlling agency every 6 months basis. The stakeholders meeting are conducted to identify and address the social impacts due to the estates and mills operation receiving inputs to LONSUM management. Assessor observed during surveillance assessment the implementation of this criterion after 2 (two) years of certification assessment and to the surveillance assessment, that RSPO principle & criteria is full compliance. Criterion 6.2 There are open and transparent methods for communication and consultation between growers and/or miller, local communities and other affected or interested parties


LONSUM has implemented effectively regular meetings annually with stakeholders in accordance with relevant procedures., the mechanism to conduct stakeholders meeting as stated in SOP “Komunikasi” or Communication EMS-P.05 page 5/7. LONSUM conducted consecutive meetings performed with stakeholders in May 2011 for each unit, for example : Turangie Mill and Estate, Bungara Estate and Pulo Rambong Estate on May 16, 2011, Begerpang Estate on May 18, 2011 and Gunung Melayu Estate on May 25, 2011. (6.2.1). List of stakeholder includes local communities, NGO’s, indigenous people, organization workers, and police or military representative. Some stakeholders have been contacted for the consultation. (6.2.2). Adjacent estate officers are responsible for communication associated with the estate activity with the respective party concerned. These meetings were conducted in order to fulfill the RSPO principles and criteria and as a LONSUM’s management commitment. Discussion during these meetings include, progress on the responses of the stakeholders meetings in the last year, environmental management programs and health programs to the communities surrounding the mills and the families of employees, information relating to regulation and legislation, as well as environmental and social issues. The CSR programs for this year also communicated during the meetings, all aspiration commenced during stakeholders meetings will become input to arrange CSR programs for next year. Results of LONSUM management meeting which represent the Head of Environment & CSR Coordination has been well noted by the meeting minutes and maintained within the results of a hearing of stakeholders that contains the above questions and responses to LONSUM management performance, which has been certified RSPO. The results meetings with stakeholders concluded and submitted by the Head of Environment & CSR Coordination to the Top management of LONSUM., then distributed to the mill managers and estate managers for further action. All information and records of communication of both parties are available in every unit of mills and estates. The unit managers and estate managers are responsible to keep this information at least 5 years. (6.2.3). The community development manager assumes responsibility to ensure that community program must run effectively and communication and consultation with stakeholders are effective. The community development manager assumes responsibility to ensure that community program must run effectively as well the communication and consultation with stakeholders. (6.2.4). Assessors noted that aspiration from stakeholders to the company which had been recorded in minutes of meetings, mostly repeated during public consultation between stakeholders and assessor team. It is suggested that responses or followed actions by company to stakeholders’ aspiration that had been accepted by all parties should be signed by all attendants with recommended time framing. Assessor observed during surveillance assessment the implementation of this criterion after 2 (two) years of certification assessment and to the surveillance assessment, that RSPO principle & criteria is compliance with observation. Criterion 6.3 There is a mutually agreed and documented system for dealing with complaints and grievances, which is implemented and accepted by all parties

LONSUM established a complaints, grievance, and dispute procedure, which is integrated with the communication procedure for EMS. This procedure has been communicated to all stakeholders at each mills and estates. The positive response from the stakeholders regarding this communication was inspected. During the visit to the stakeholder, the audit team is ensured no any complaints, grievances and disputes occurred in the interviews. Record of the handling of complaints turn of the land has been handled well by replacing the money according to regulations. Assessor observed during surveillance assessment the implementation of this criterion after 2 (two) years of certification assessment and to the surveillance assessment, that RSPO principle & criteria is full compliance. Criterion 6.4 Any negotiations concerning compensation for loss of legal or customary rights are dealt with through a documented system that enables indigenous people, local communities and other stakeholders to express their views through their own representative institutions


LONSUM has developed OP Land Acquisition and Compensation. (OP2.2). Within the surveillance assessment, the audit team verified and inspected the whole information regarding the compensation. There was no evidence. However, the compensation procedure has been established and communicated to stakeholders. Assessor team have checked all evidence of LONSUM ownership. Assessor observed during surveillance assessment the implementation of this criterion after 2 (two) years of certification assessment and to the surveillance assessment, that RSPO principle & criteria is full compliance. Criterion 6.5 Pay and conditions for employees of contractors always meet at least legal or industry minimum standards and are sufficient to provide decent living wages

List of pay and conditions of employees are in detail described according to level and rank for their position. LONSUM has committed to follow related legislation, which arranges working days normally in a month including working time, salary standard refer to regional payment minimum rates, employees insurance for JAMSOSTEK, except for piece-rate workers and there were working agreement with contractors. LONSUM kept records of the salaries paid to workers based on letter of North Sumatera Governor, Ref. 188.44/674/KPTS/2010 dated on. 24.11. 2010 that regional minimum pay for Plantation workers was set at Rp. 1,035,500/month, and followed by Interrnal Memorandum from Head Office No.017/HRD/CIR/I/2011 dated on 21.02. 2011 that basic pay was beyond the regulation, for permanent workers in the lowest level was set at Rp 1,090, 425 and for Piece-rate Workers wages was Rp 41,420/ day. It was stated in this Internal Memorandum that the Piece-rate Workers shall work for 7 hours / day and maximum 40 hours/ week. Besides the basic pay, the workers also have premi or incentives. Interviews with some harvesting workers noted that the incentives or premi depend on area difficulty and age of palm, for flat area the incentive is differrent from undully or rolling area, they told that they could gain Rp 2,000.000 to Rp 2,500,000/ month, and even up to Rp 3,000,000 during peak season. Checks on salary list found it comply. In addition, the workers were provided with rice allowance, for single worker is 15 kg rice, for head of family is 15 kg plus 12 kg for wife and 7.5 kg for each children (maximum 3 children). Assessor team noticed during public consultation asking the staus of piece-rate workers. LONSUM provide their workers with housing facility, electricity and clean water is distributed twice a day. Medical treatment is free for workers, there were policlinic in every housing complex. Elementary schools are located in LONSUM estates and there are junior and high schools nearby the estates, and LONSUM provide school buses for the students. Assessor observed during surveillance assessment the implementation of this criterion after 2 (two) years of certification assessment and to the surveillance assessment, that RSPO principle & criteria is compliance with observation.

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

Workers and management level agreed to establish labor union in accordance with national legislation, UU No. 13 2003 and letter of Head of Human Resource Department No. 006/HRD/DIR/I/2004. Minutes of understanding with all contractors have been made by working agreement for project within the SPO management including time payment, safety for contractor workers have of both of parties. Record of minutes meeting between the SPO management with employees and labor union was inspected. Assessor observed during surveillance assessment the implementation of this criterion after 2 (two) years of certification assessment and to the surveillance assessment, that RSPO principle & criteria is full compliance. Criterion 6.7 Children are not employed or exploited. Work by children on family farms, under adult supervisors and when not interfering with education programs. Children are not exposed to hazardous working conditions.


All information of the workers that they have being working in the mill and the plantation was registered in employees’ personal data, which contain age of workers, status of employees, position and ranks, location of works, date of entry into working at the mills and the plantation. The data was inspected and confirmed that no one of workers were under of 16 years old, which is regulated in accordance with legislation of Republic of Indonesia – UUD RI No. 13 Tahun 2003. Assessor observed during surveillance assessment the implementation of this criterion after 2 (two) years of certification assessment and to the surveillance assessment, that RSPO principle & criteria is full compliance. Criterion 6.8 Any form of discrimination based on race, caste, national origin, religion, origin, disability, gender, sexual orientation, union membership, political affiliation, or age is prohibited.

LONSUM has good commitment and policy regarding equal opportunity of jobs position. Employees are possible to have good position for his/her career in the mills and the plantations. Head of general affairs department has developed for the career promotion of employees, which declared in letter no. 052/GAD/042/2003. Information of jobs opportunity was announced on local newspaper and/or LONSUM website is available. Assessor observed during surveillance assessment the implementation of this criterion after 2 (two) years of certification assessment and to the surveillance assessment, that RSPO principle & criteria is full compliance. Criterion 6.9 A policy to prevent sexual harassment and all other forms of violence against women and to protect their reproductive rights is developed and applied

There is a policy displaying and a rule is made regarding proprietary right of women. General affairs department has developed this rule and it has communicated to all workers to ensure they understood the rule, nevertheless, assessor suggested a detail definition about indecent manner should be listed in letter No. 028/HRD/CIR/2011 or Code of Conduct. Protection and prevention of sexual harassment was well informed to all workers, management levels and communicated to stakeholders. Records of these meetings were kept and retrievable in the appropriate place. Assessor observed during surveillance assessment the implementation of this criterion after 2 (two) years of certification assessment and to the surveillance assessment, that RSPO principle & criteria is compliance with obervation. Criterion 6.10 Growers and mills deal fairly and transparently with smallholders and other local business.

There was no transaction and has no contract purchase for the agreement with smallholder or local business private companies regarding the sales and purchase of the FFB after last certification assessment. Other purchasing activity of the FFB transaction does not exist, instead for a project service or maintenance and repairs of mill equipments, which are contracted. List of approval contractors has been inspected to ensure that, the SPO management use only qualified contracted whole of area concerned. Assessor observed during surveillance assessment to implementation of this criterion after 2 (two) years of certification assessment and to the surveillance assessment, that RSPO principle & criteria is full compliance. Criterion 6.11 Growers and miller contribute to local sustainable development wherever appropriate

Based on identification of community needs and the company’s budget, LONSUM contributed to community development and included infrastructures (buildings, rehabilitation of schools, mosques, church, roads, and local community assembly), which are documented at Government and Community Relation Annual Report and distributed to each estate and mill. LONSUM provides assistance and conduct the meeting regularly with local communities in response to requests. LONSUM provides free medical treatment at the clinics to local communities in case the needs arise, and CSR program 2010 - 2011.


Assessor observed during surveillance assessment the implementation of this criterion after 2 (two) years of certification assessment and to the surveillance assessment, that RSPO principle & criteria is full compliance. Criterion 7.1 to 7.7 N/A Top of SPO management system is convincing to this requirement not applicable and there has no new planting since November 2005 as planned. Criterion 8.1 Growers and millers are regularly monitored and reviewed of their activities and develop and implement action plans that allow demonstrable continuous improvement in key operations

LONSUM management’s commitment of palm oil mills and supply base, that continuous improvement is evidently taken for improvement of the delivered goods of FFB to mills. Concerning environment emission prevention, the environmental impact assessment was adopted to ensure vehicles and operating boiler emissions for uncontrolled parameters were detected. Reduced consumption of dangerous agrochemicals (paraquat) was inspected and confirmed in accordance with LONSUM top management‘s policy. The following continuous improvement program was checked by auditors during annual surveillance assessment are the used agrochemical jars or containers have been handled and stored in proper chemicals house. The modification area storing of chemical house is better including safety sign and also chemicals rack, improvement production capacity boiler up to 30 tones/hr, reduce used chemical containers and chemical consumption replaced with chemical environment friendly, environmental improvement program for Palm Oil Mill was documented in EMS F-04d. Assessor observed during surveillance assessment the implementation of this criterion after 2 (two) years of certification assessment and to the surveillance assessment, that RSPO principle & criteria is full compliance .


3.2. Summary of Findings by Each Principle and Some Example Criteria

Non Conformity Report – T01.06/11 Date of issue 24.06.2011 NCR issued by : Wieke Savitri

Location PT. PP London Sumatra Tbk

Turangie Estate

Discussed with : Managers and staff

RSPO – Criterion : 2.1 There is compliance with all applicable local, national and ratified international laws and regulations at could be affected by plantation or mill management, shall be identified and their conservation taken into account in management plans and operations.

Description of Finding/Objective Evident: The list of permits was not properly recorded and the status was not monitored to assure that the permit is still valid, it was found that the permit to use surface water was not valid on 10 October 2010, however, the management letter to ask for the extension of the permit was made on 3 November 2010.

Classification Major Minor

Corrective Action Taken: Date of implementation: July 2011 The list of permits will be recorded and the status will be monitored regularly to assure that the permit is still valid, the validity period will be added in the list.

Auditee sign:

Adi Bastomi Bryan Dyer Head of Environment & CSR Coord Department Managing Director Operations

Auditor Comments: Corrective action taken by the organization for the documentation submitted has been verified and accepted.

Auditor Comments and Conclusion To check in next verification visit Appropriate action taken Appropriate action not taken Corrective action in compliance with the requirement

Date of verification: July 25,2011

Auditor(s) sign:




Rambong Sialang Estate


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

Description of Finding/Objective Evident: The recommended fertilizer from Sumatera Bio Science in January 2011 for Super Dolomite is 1.75 kg/ palm in block 072003 and 073001 shall be 7,788 kg per block , but the realisation was done in February 2011 only 5,700 kg and 7,300 kg without justification.


Corrective Action Taken: Date of implementation: July 2011 Fertilizer applicatioins based on total palm multiply by dosage/ palm in order to avoid excessive fertilizer spread on the field. In case of FN 073001, ( FN 072003 No Super Dolomite recommendation nor applied) consist of original and supplied palm.

Field No Original

palm Supplied palm

Total palm

Super Dolomite recommendation

Super Dolomite applied

073001 4174 276 4450 1.75 x total palm 1.75 x original palm

During this period, 276 palm were supplied in this field and based on SOP (attached) supplied palms should be applied with agroblend 300 gr/palm with no more any kind fertilizer applied for a year. It is explain the different between Super Dolomite recommendation and applied

Auditee sign:

Adi Bastomi Bryan Dyer Head of Environment & CSR Coord Department Managing Director Operations

Auditor Comments: Corrective action taken by the organization for the documentation submitted has been verified and accepted.If there is difference between recommendation and application, a justification should be verified, a column of supplied and original palm should be added in report, not only total palm.



Auditor(s) sign:




Rambong Sialang Estate, Turangie Estate


RSPO – Criterion : 4.7 . An occupational health and safety plan is documented, effectively communicated and implemented

Description of Finding/Objective Evident: 1. Noise test result in genset area in January 2010 exceed the maximum level of 85 db, the workers in

such area were sent for audiometric test and it was found that there were 6 workers had hearing disturbance but they are still working in this area in June 2011.

2. Fire extinguisher No.32 in pump house was not regularly checked.


Corrective Action Taken: Date of implementation: July 2011

1. a. Medical test result and work environment test result will be immedeately delivered to unit mills/ estates in order to carried out followed action accordingly.

b. Workers that has hearing disturbance were moved in less noisy area.

2. A Masterlist of safety equipments will be established to monitor all safety equipments have been checked properly.

Auditee sign:

Adi Bastomi Bryan Dyer Head of Environment & CSR Coord Department Managing Director Oprations

Auditor Comments: Corrective action taken by the organization for the documentation submitted has been verified and accepted.



Auditor(s) sign:


Table 8: Findings management by RSPO Criterion

Audit type Certification Assessment 1st Surveillance Assessment

Criterion Audited Comply Major Minor No of

NC Audited Comply Major Minor No of NC

1.1 No 1 1 Yes 1.2 No 1 1 Yes 2.1 Yes Yes 2.2 Yes Yes 2.3 Yes Yes 3.1 Yes Yes 4.1 Yes Yes 4.2 Yes Yes 4.3 Yes Yes 4.4 No 1 1 Yes 4.5 No 1 1 Yes 4.6 Yes Yes 4.7 No 1 1 Yes 4.8 Yes No 5.1 No 1 1 Yes 1 1 5.2 Yes Yes 5.3 Yes Yes 5.4 Yes No 1 1 5.5 Yes Yes 5.6 Yes Yes 6.1 Yes Yes 6.2 Yes Yes 6.3 Yes Yes 6.4 Yes Yes 6.5 Yes No 1 1 6.6 Yes Yes 6.7 Yes Yes 6.8 Yes Yes 6.9 Yes Yes 6.10 Yes Yes 6.11 Yes Yes 7.0 N/A - - 8.1 Yes Yes Total of Nonconformities 4 2 6 1 2 3


Audit type 2nd Surveillance Assessment Criterion

Audited

Audited Comply Major Minor No of

NC 1.1 Yes 1.2 Yes 2.1 No 1 1 2.2 Yes 2.3 Yes 3.1 Yes 4.1 Yes 4.2 No 1 1 4.3 Yes 4.4 Yes 4.5 Yes 4.6 Yes 4.7 No 1 1 4.8 Yes 5.1 Yes 5.2 Yes 5.3 Yes 5.4 Yes 5.5 Yes 5.6 Yes 6.1 Yes 6.2 Yes 6.3 Yes 6.4 Yes 6.5 Yes 6.6 Yes 6.7 Yes 6.8 Yes 6.9 Yes 6.10 Yes 6.11 Yes 7.0 N/A - 8.1 Yes Total of Nonconformities - 3 3


Noteworthy positive components

Safety and Health, Waste Management: • The mills and the estates have documented safety guidelines and working instructions as well as

safety monitoring in accordance SM-K3 implementation. • Zero accident program of all area in the Palm Oil mill and the Estates • Safety instruction, MSDS and symbol of hazardous materials and contents are very clear and well

informed. • Disposal of used agrochemical is stored properly in hazardous bins and clearly identified. Prior to

be sending to legalized sub-contractor the monitoring of disposal of used agrochemical is recorded to ensure the waste well under controlled.

Zero Burning: Information on zero burning is comprehensively communicated to all respective parties concerned. Protection of Plantations Land: LONSUM has good commitment into protection of palm plantation from fire, therefore fire facilities and equipments were provided for fire brigade team available every time and vehicle moveable water storage in response land burning. Protected HCV areas: LONSUM management has set a high priority on protection of All HCV’s at the whole plantation areas and other places that have been identified internally by Environmental protection team. The HCV areas were shown on The HCV Identification book updated in January 2009. Organic wastes and land application: Empty fruits bunch were placed in palm plantation in such a manner that the organic – composting waste and soil quality increase. Effluent of waste treatment plant discharged to the plantation as land application. Awareness and commitments: The top management of LONSUM is strongly and has a committed to aware of concerns in RSPO principles and criteria implementation. Future, The integrated management system (ISO14001, ISO9001, OHSAS) implementation will be applied to ensure the RSPO principles and criteria more effective monitoring and measurement. Environmental Concern: The SPO management has set a high priority on the protection and prevention in consideration of environmental significance aspects and their impacts identified, as well as to provide training sufficiently and to arouse awareness. The environmental management program in order to monitoring for prevent pollution of boiler emission, FFB transformation emission, and power generation by generator-set operation. The method of environmental aspects and environmental impacts assessment is advantageous and this method was developed and able to be adopted into other sustainable management system for the RSPO principles and criteria, in order to identify social-environmental aspects and impacts. CDM Program: The SPO management has more advantage consideration to Green House Gases (GHG) for CDM Program of Methane Capture.


Some Recommendation Opportunities for Improvement (Including Negative Observation) to area concerned at the Mills and the Estates: Begerpang POM 1. A detail definition about indecent manner should be listed in letter No. 028/HRD/CIR/2011 or Code

of Conduct. Rambong Sialang Estate 2. Water flow rate from Dedet well should be calculated after used in the morning and in the afternoon. 3. HCV 4.2 in Gua Lele should be demarcated with informative sign board. 4. Internal test of spraying nozzle flow rate should be in written

Pulo Rambung Estate 5. Records of Morning Muster should be controled properly and noticed for followed action, such as

wearing PPE. Turangie POM and Estate 6. A detail definition about indecent manner should be listed in letter No. 028/HRD/CIR/2011 or Code

of Conduct. 7. Law enforcement should become a CSR program. 8. Inovation about water and energy efficiency should be well documented. 9. Sign boards of HCV 4.1 to warn people for not hunting and fishing and to remind workers for not

applying fertilizer and pesticides to oil palms in the riparian zones should be multiplied along Wampu river in Turangie Estate

Si Bulan Estate 10. The mechanism to conduct stakeholders meeting as stated in SOP “Komunikasi” or Communication

EMS-P.05 page 5/7. It is suggested that responses or followed actions by company to stakeholders’ aspiration that had been accepted by all parties should be signed by all attendants with recommended time framing.

Sei Rumbia Estate 11. The water quality in housing complex should be monitored and available on site. 12. CSR program should be based on urgency and priority of local community need such as education

improvement. Bahlias Estate 13. Harvesting helper for loose fruit picking and pruning should be provided with PPE in accordance

with related Working Instruction. 14. The water quality in housing complex should be monitored and available on site 15. SOP OP.4.6 dan OP,4,7 “Fruit Handling and Transport Crop Measurement and Recording” should

be completed with safety requirements. 16. Follow up action from IPM program noted that re-census should be carried out accordingly, there is

no evaluation of the the follow up action.) Bah Bulian Estate (25.06.2011) 17. Sosialization and inspection of PPE for harvesting workers should be improved. 18. Records of information request should be completed not only for donation request.

Gunung Melayu POM & Estate (27-28.06.2011) 19. Followed action should be done accordingly to fix or replace boundary stones which has been

reported broken or missing. 20. The identification of HCV area in some sites with sign boards should be more informative for

common people to be understood the message, such as not cutting trees, not applying fertilizers and pesticides for workers, no hunting, no fish poisoning.

21. Disease data in Policlinic should be classified between workers and workers family to figure out working disease.

22. Policlinic area should be clean and free from dust.


23. Security officer should inspect trucks while entering and leaving mill area in order to fulfill safety requirements, such as wearing PPE, safety nets etc.

Dolok POM & Estate (30-06.2011- 01.07.2011)

24. A followed action should be done accordingly to fix or replace boundary stones which has been reported broken or missing

25. The identification of HCV area in some sites with sign boards should be more informative for common people to be understood the message, such as not cutting trees, not applying fertilizers and pesticides for workers, no hunting, no fish poisoning.

26. Activities records in Policlinic should be improved, such as : use of needles and syringes, list of obsolete medicine, the medicine removal records should be signed by the doctor

27. Storage for specific medicine should be in proper condition, e.g temperature shall below 25˚C, not to be exposed with direct light.

28. Washing area in front of hazardous waste storage should be maintained from leakage. 29. Interview with stakeholders asking information transparency for projects that can involving local

community. 3.3. Status non-conformities (both minor and major) previously identified, even already closed out

Auditor has verified the corrective action plan for its implementation of the last certification assessment for both major and minor nonconformities and closed. The result of the implementation of corrective action when observed in the surveillance assessment is effective

. 3.4. Issues raised by stakeholders LONSUM conducted consecutive meetings performed with stakeholders in May 2011 for each unit/ group, for example : Turangie POM and Estate, Bungara Estate and Pulo Rambong Estate on May 16, 2011, Begerpang POM and Estate and its supply base on May 18, 2011 and Gunung Melayu POM and Estate and its supply base on May 25, 2011. Assessors has sighed thoroughly, most of requests generally ask for donation or aid, and several complaints, nevertheless, the audit team did not find any major issues and comments to be considered from the stakeholders meetings on environmental impacts or social performance of the mills and the estatates operations between LONSUM and the stakeholders or intersted parties. The assessor team also lead public consultation with stakeholders as planned in Audit Schedule. Begerpang POM and its supply base on 21.06.2011; Turangie POM and its supply base on 23.06.2011; Gunung Melayu POM and supply base on 28.07.2011 and Dolok POM and its supply base on 01.07.2011. Besides conducting public consultation gathering in one place, assessor team also visited some stakeholders in villages nearby the estates or doing interview on site with workers and family of workers. Interviews were used to obtain feedback – whether positive or negative - from the stakeholders, for which the audit team had prepared some questions. The questions are given in Section 2.10., even questions about land conflict. The audit team did not receive any major issues and comments to be considered from the public consultation on environmental impacts or social performance of the mills and the estates operations within LONSUM. Most of the stakeholder comments on RSPO certification were positive, under which were usually requests for help. The comments are given below: Bagerpang POM and its supplybase on 21.06.2011 at Rambong Sialang Training Center. Mr. Suparno, S.Pd (Vice Principal SMPN 2 Sei Rampah)

LONSUM has contributed to give donation for school since 1992, such as 5 unit computers and computer training for teachers, scholarship for students, extra curriculum support for sport activities, and provide teacher housing in LONSUM housing complex. The support need to be continued.


LONSUM response We will continue the support.

Mr. Iman (Chief Village Rambong Sialang Tengah) Almost the villagers are LONSUM permanent workers (70%), unemployeed community still need for jobs even as piece workers to reduce unemployment. Need a type machine to serve the community. Appreciate that some retired employees still allowed to live in LONSUM housing complex.

LONSUM response Some piece workers have been promoted as permanent workers gradually, LONSUM will open job vacation depend on condition and urgency. A computer will be donated instead of type machine.

Mr. Yusman (Villager from Bunder Rejo Village/ LONSUM ‘s employee for 20 years) Mosque minaret since 2010 had not been finished yet. Every religous holidays such Ied Fitri and Christmas LONSUM always give gift to the community. The support need to be continued.

LONSUM response Please submit proposal in accordance with LONSUM procedure. We will continue the support.

Mr. Kartimin (Chief Village of Sukasari Village) Many villagers have cattle, they need grass to feed the cattle, but the sprayer workers had used agrochemicals that remove all grass and other leaves for cattle, more over LONSUM disallow the cattle grazing in estates area.

LONSUM response The sprayer workers did not do the blanket method for spraying. It’s better if the owner look for grass than the cattle grazing alone in estates area, the cattle will be allowed to graze in estates area only under supervising of the owner/ cowboys in order not to eat young palms and loose fruit (berondolan) on the ground or beneficial weeds such as Turnera subulata.

Verification by assessor team Checks on records noted that LONSUM use selective weeding method instead of blanket method, during visit in estates it was found that some cattle eating loose fruit/ beneficial weeds without supervising by the owner, or if the cattle accompanied by the owner they just let the cattle eat the loose fruit/ beneficial weeds. There should be a win-win solution between LONSUM and community, if LONSUM allow the cattle grazing in estate under supervising of the owner, the community should be aware and pay attention that their cattle don’t eat young palms, loose fruit or beneficial weeds.

Mr. Satino (Kaur Kesra, Pergulaan Village) LONSUM has provide many job vacation for villagers in Pergulaan Village, but there were still piece workers. Graveyards in the village need to be extended. Pergulaan Village was left behind in CSR and Community Development program than other villages due to the dispute of few villagers and LONSUM.

LONSUM response Piece workers will be promoted as permanent workers gradually. Please submit proposal in accordance with LONSUM procedure. CSR and CD program had been started, there is kindergarten in Pergulaan Village developed under guidance Indonesian Holistic Foundation by Dr. Ratna Megawangi from Bogor, West Java. Pergulaan Village will be developed as an example village of CSR and CD program.

Verification by assessor team Assessors have checked all the legal evidences of land ownership in Pergulaan Village that had become issue for a long time and found the LONSUM’s ownership was right. The process had been finalised with decree from Supreme Court in 2008. Interviews with some villagers revealed that the minority villagers prohibit the majority villagers to be involved in CSR and Community Development program.


Majority villagers have motto “ Yang lalu biarlalh berlalu” or let bygone be bygone, they want to be involved in CSR and Community Development Program.

Mrs. Hj. Nagrah (Principal SD 1018888 Sei Merah) LONSUM has contribution for school such as gave addition salary for their teachers, provide clean water for school and housing for teachers in Sei Merah. Need volleyball and badminton yard in school.

LONSUM response Please submit proposal in accordance with LONSUM procedure.

Mr. Lilik Sumarno (Chief Village Tj.Siporkis) LONSUM should have program to fix poor people’s houses in our village to fulfill the government program in Kabupaten Serdang Bedagai.which has target for 10.000 houses.

LONSUM response LONSUM have priority that public facility should come first, not individual need.

Mr. Rudiyanto (Head of SPSI/ Union in Begerpang Estate) Working equipments for harvesting was not always available in location, the quality of the equipments was not good, it could affect the productivity of workers that their premi/ incentive low was as a result.

LONSUM response Division Office will issue an internal letter to provide working equipments standby in warehouse. Procurement will find new supplier with better quality.

Mr. Salim (Head of Union in Rambong Sialang) The payment date in LONSUM was not on the same date in every month, because the payment date is on the second and the fourth Saturday every month, sometime there are 5 weeks in a month, the workers can not wait too long. We suggest the payment date will be fixed on 5th and 20th day every month. Piece workers need to be promoted as permanent workers.

LONSUM response The payment date will be bring to BOD in September 2011 since LONSUM has implemented SAP program and it takes time to adjust new payroll system. Piece workers will be promoted as permanent workers gradually, in this year there are 60 new permanent workers has been promoted.

Turangie POM and its supplybase on 23.06.2011 at Turangie Guest house. Mr. Sunardi (Chief Village Turangie)

Usually LONSUM give gifts on religious holidays such as Ied Fitri and Chrismas, in the past time the gifts are sufficient such “sembako’ or staple food and sarongs, but in the recent years the gifts is only “sembako”, the quantity were reduced. The gifts should be increased not reduced.

LONSUM response The quantity of gifts for each recipient were reduced because the total recipients were multiplied and the priority is for really needy people.

Mr. Sutrisno (District Secretary Kecamatan Bahorok) LONSUM has contributed in education and health such as established integrated kindergarten and fogging to eradicate dengue fever not only in LONSUM estates but cover nearby villages. The support need to be continued and job oppotunity for villagers.

LONSUM response We will continue the support. The job oppotunity is depend on condition and urgency.


Mr. Mujuri Surbakti (Chief of local community Merga Silima/ Karo ethnic group) LONSUM has build mosque in the village in 2009. Need job opportunity for unemployeed young men. EFB and FFB often fall on the road since the tranporter don’t cover the trucks with nets.

LONSUM response The job oppotunity is depend on condition and urgency. There is SOP for internal transporter and contract agreement for external transporter.

Verification by assessor team The assessors have checked on SOP and some contract agreement, it was found during visit in estates and mills that there were some trucks which not covered with nets. It should be checked by the security.

Kapolsek Kecamatan Bohorok (Police Chief). Many security job have been supported by LONSUM. LONSUM should be more tolerant in handling the local community who break the law. There was accident that a villager fell down into security drain while riding motorcycle. The security drain should installed with warning board.

LONSUM response LONSUM will educate local community about law enforcement. Security drains will be installed with sign board or planted with bamboos to avoid people or animal fell down.

Mrs. Endang (non staff woman worker) LONSUM give leave for women workers during menstruation illness, pregnant and breast feeding. PPE should be provided by the company, such as safety booths and gloves not provided by the worker herself.

LONSUM response The use of PPE depend on HIRAC and SOP, the priority use of PPE is for highly riskLONSUM will provide the PPE gradually to all workers based on budget.

Verification by assessor team Checks on HIRAC and SOP noticed that worker shall wear PPE for this job

Idris Harahap (Head of HIKMA, Mandailing ethnic group) Although LONSUM do not accept FFB from smalholders/ local community, nevertheless LONSUM has contribution to promote local commmunity in oil palm sustainbale manner. There were twelve oil palm farmers has been trained at LONSUM training center in Rambong Sialang. The suppot need to be continued

LONSUM response We will continue the support.

Mr. Sunarto (Head of Pandawa Lima, Javanese ethnic group) We are satisfied with LONSUM operations and support, no other comments.

Gunung Melayu POM and its supplybase on 28.06.2011 at Gunung Melayu Office Mr. Suyadi (NGO Pijar Keadilan)

There is no land conflict in this area or major social issues, our NGO has contribution for law awareness and law enforcement to the local community, the frequency of fruit stealing has been reduced in year 2010 there were two cases of fruit stealing, until now in June 2011 there is no case. LONSUM should be more tolerant, it’s better if it can be resolved by adat/ local custom law first before directly bring them to police.

LONSUM response LONSUM will tolerate as long as the thieves are old and poor women and steal little loose fruit not fruit bunches, but if the thieves are men they will be sent to police because if they are released easily by adat they will repeat their habit.


Mr. Surya (Chief Village Anagogo) LONSUM has contributed to promote local community health by montly donation to Posyandu (Integrated Service Center for health) such as food supplement for children, pregnant and breasfeeding women. LONSUM is more tolerant than other oil palm company nearby, LONSUM allows cattle grazing in estates under supervision instead of make fences around the estates. The mutual relationship need to be continued.

LONSUM response We will continue the mutual relationship as long the local community are cooperative, such as aware if the cattle eat young palms/ loose fruit/ beneficial weeds.

Dolok POM and its supplybase on 01.07.2011 at Gunung Melayu Office Mr. Kamal (NGO Indonesia Corruption Watch)

LONSUM should give opportunity and priority for local community as contractor to join the projects in their area. The contractors always come from outsider area.

LONSUM response The local community have the same chance to be a contractor for some local projects, but they fail in tender process.

Verification by assessor team The announcement of the projects are not published transparently, the local community know the projects after they has running, they need to be informed if there is project in this area just like in other estate (Bah Lias Estate).

4. Certified organization’s acknowledgement of internal responsibility

4.1. Date of next surveillance audit PT TUVNORD Indonesia will perform 3rd annual assessment to the SPO management of LONSUM on March 2011 accordingly.

4.2. Date of closing non-conformities (3 minor) Auditor closed to the minor non-conformities on July 25, 2011.


4.3. Sign-off surveillance assessment findings

Please sign on the certification assessment and confirm the acceptance of the assessment report contents including assessment findings. The company Operation Director and Head of Environment and CSR Coordination will sign for the certification assessment report. Complete signatures are shown in section below

Medan Signed for and on behalf of

PT PP London Sumatra Indonesia, Tbk Head of Environment and CSR

Coordination Managing Director Operations

29.07.2011

Adi Bastomi

Bryan Dyer

Signed for and on behalf of PT. TÜV NORD Indonesia – System Certification Management

Jakarta

29.07.2011

Auditor : Wieke Savitri

rspo annual surveillance assessment 2 … annual surveillance assessment 2 public summary report pt....

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