rspo annual surveillance assessment3 public …107° 53' 00.2" 02° 36' 43.3"...

PT. TÜV NO.RD Indonesia

Audit Report

Form Title

Revision No..

Effective Date

Page

: FRSPO-TNI-05

: 1

: 04.01.2011

: 1 of 38

FRSPO-TNI-05-R2-Audit Report-SMM_ASA3_R0-Reviewed

RSPO ANNUAL SURVEILLANCE ASSESSMENT3

PUBLIC SUMMARY REPORT

PT. TÜV NORD Indonesia

System Certification Management

Has assessed

PT. SAHABAT MEWAH DAN MAKMUR

< Jangkang Mill and its Supply Bases>

for Compliance to RSPO Principles and Criteria

for Sustainable Palm Oil Production

Date of assessment:

October 7 to 11, 2013

Report Number: P&C-J-131

Head Office

System Certification Management

Perkantoran Hijau Arkadia Tower F,

7th Fl Suite 706

Jl. Let. Jend. TB Simatupang Kav. 88

Jakarta 12520 – Indonesia

Tel : +6221 7883 7338

Fax : +6221 7883 7336

Laboratory Division

Jl. Jababeka XVII E Blok U No.. 27B

Kawasan Industri Jababeka I Cikarang Bekasi 17530 – Indonesia

Tel : +6221 898 403 18 – 19

Fax : +6221 898 403 20

Branch Office

Intiland Tower 11th

Fl, Suite 1E

Jl. Panglima Sudirman 101-103

Surabaya 60271 - Indonesia

Tel : +6231 53 444 54

Fax : +6231 53 4 44 82

President Director:

Mr. Robert Napitupulu

Email: [email protected]

Website: www.tuv-nord.com or www.tuev-nord.de

mailto:[email protected]

http://www.tuv-nord.com/

http://www.tuev-nord.de/


Audit Report

Form Title

Revision No..

Effective Date

Page

: FRSPO-TNI-05

: 1

: 04.01.2011

: 2 of 38


List of Contents

1 Scope of Surveillance Assessment Report ........................................................................................................ 4

1.1 Type of Assessment (Mill, Estate and Mill, etc.) ................................................................................... 4

1.2 Location, mill, and or hectare statement ............................................................................................... 4

1.5. Description of Supply Base ................................................................................................................... 7

1.5.1. Description of Plantation (Fruit Sources) ............................................................................ 7

1.5.2 Replanting program ................................................................................................................ 8

Table 1-5. Replanting program for Each Estate ............................................................................ 8

1.6. Progress of Time-bound Plan (for other management units and justifications). ................. 9

1.7. Organizational Information/Contact Person .......................................................................................... 9

2. Assessment Process .......................................................................................................................................... 9

2.1. Assessment Methodology (Program, Site Visits) .................................................................................. 9

2.1.1. General Overview .................................................................................................................. 9

2.1.2 Assessment Agenda ............................................................................................................... 9

2.2. Assessment Team ............................................................................................................................... 11

2.2.1. Lead Assessor: Wieke Savitri ........................................................................................... 11

2.2.2. Assessment Team Members ............................................................................................ 11

2.3. Certification Body ................................................................................................................................ 12

3. Assessment Findings ....................................................................................................................................... 13

3.1. Summary of the Findings by Criteria ................................................................................................... 13

3.2. Identified Non Conformances and Noteworthy positive components. ................................................ 25

3.2.1. Detail of Non Conformity. .................................................................................................. 25

3.2.2 Resume of Audit Results. ................................................................................................. 26

3.3 Status of non-conformities (both minor and major) previously identified .............................................. 27

a. Issues Raised by Stakeholders ........................................................................................................... 27

4. Certified Organization‟s Acknowledgement of Internal Responsibility ............................................................. 28

4.1 Date of next surveillance visit .............................................................................................................. 28

4.2 Date of closing non-conformities (both major and minor) ................................................................... 28

4.3 Formal Sign-off of Surveillance Assessment Findings ........................................................................ 29


Audit Report

Form Title

Revision No..

Effective Date

Page

: FRSPO-TNI-05

: 1

: 04.01.2011

: 3 of 38


List of Figures

Figure 1a. Location Maps of PT. Sahabat Mewah dan Makmur....................................................................5

Figure 1b. Maps of Jangkang Mill and Supply Base.......................................................................................6

List of Tables Table 1-1 Location of the mill and supply bases ...........................................................................................................................4

Table 1-2. Production volume of CPO and PK to be claimed................................................................................... 6

Table 1-3: Production volumes of FFB and its source.............................................................................................. 6

Table 1-4:. Statistic of supply base................................................................................................................................ . 6

Table 1-5: Replanting program for Each Estate from 2010 to 2019 ................................................................................7

Table 1-6a Time bound plan for mills and estates under PT. Austindo Nusantara Jaya ................................................................................................................................................................................ .7

Table 2-1 Audit Schedule ........................................................................................................................................... 9

Table 3-1 Summary of Findings by Criteria ......................................................................................................... 14

Table 3-2 Resume of Audit Results ......................................................................................................................... 26

List of Appendices

Appendix 1 List of Abbreviations ........................................................................................................................ 30

Appendix 2 Summary of the findings for compliance with the RSPO Supply Chain Module E (Mass Balance) ver.

November 2011 .................................................................................................................................................. 31


Audit Report

Form Title

Revision No..

Effective Date

Page

: FRSPO-TNI-05

: 1

: 04.01.2011

: 4 of 38


1 Scope of Surveillance Assessment Report

1.1 Type of Assessment (Mill, Estate and Mill, etc.)

Jangkang Mill is supplied by three (5) own estates, i.e. Jangkang Estate, Balok Estate and Ladang Jaya

Estate, Air Ruak Estate and Sari Bunga Estate, which are under PT. Sahabat Mewah dan Makmur known

as SMM, a subsidiary of PT. Austindo Nusantara Jaya (ANJ).

The annual surveillance assessment was done as per National Interpretation of RSPO Principle and

Criteria for Sustainable Palm Oil Production - Republic of Indonesia (RSPO Indonesian National

International <INA-NI. ver. May 2008 Standard), as well as RSPO Supply Chain Standard for Mills (module

E: Mass Balance) ver. November 2011.

The scope of this annual surveillance assessment 3 was for Jangkang Mill and its supply bases, i.e. Jangkang

Estate, Balok Estate and Ladang Jaya Estate, while Air Ruak Estate and Sari Bunga Estate will be assessed in

the next surveillance assessment. The mill also processes third party FFB, but they are not included in this

assessment.

1.2 Location, mill, and or hectare statement

. The detail of coordinate‟s location can be seen in the table below:.

Table 1-1: Location of the mill and supply bases

Abbreviation Name of Mill and Estate

Location GPS

E N

JKM Jangkang Mill

Desa Jangkang, Kecamatan Dendang, Kabupaten Belitung Timur, Propinsi Bangka Belitung – Indonesia

107° 52' 30.4" 02° 59' 55.2"

JKE

Jangkang Estate

Desa Jangkang, Kecamatan Dendang, Kabupaten Belitung Timur, Propinsi Bangka Belitung – Indonesia

107° 52' 28,1"

02° 59' 45.0"

BLE

Balok Estate Desa Balok, Kecamatan Dendang, Kabupaten Belitung Timur, Propinsi Bangka Belitung – Indonesia

107° 54' 53.9"

03° 02' 00.8"

LJE

Ladang Jaya Estate

Desa Jangkang, Kecamatan Dendang, Kab. Belitung Timur, Propinsi Bangka Belitung – Indonesia

107° 53' 00.2"

02° 36' 43.3"

SBE

Sari Bunga Estate*

Desa Nyuruk, Kecamatan Dendang, Kabupaten Belitung Timur, Propinsi Bangka Belitung – Indonesia

107° 52' 11.3"

02° 55' 16.0"

ARE Air Ruak Estate*

Desa Simpang Tiga Kecamatan Simpang Renggiang, Kabupaten Belitung Timur, Propinsi Bangka Belitung - Indonesia

107° 56' 03.8" 02° 59' 59.9"

*Note : did not assessed in this surveillance audit


Audit Report

Form Title

Revision No..

Effective Date

Page

: FRSPO-TNI-05

: 1

: 04.01.2011

: 5 of 38


Figure 1a. Location Maps of PT. Sahabat Mewah dan Makmur


Audit Report

Form Title

Revision No..

Effective Date

Page

: FRSPO-TNI-05

: 1

: 04.01.2011

: 6 of 38


Figure 1b. Maps of Jangkang Mill and Supply bases


Audit Report

Form Title

Revision No..

Effective Date

Page

: FRSPO-TNI-05

: 1

: 04.01.2011

: 7 of 38


1.3. Production volume of all certified products

The production tonnages for CPO and PK for period of certificate and projected output are listed in Table 1-2.

Table 1-2. Production volume of CPO and PK to be claimed

Name of mill and Capacity

(ton/hour

Certification volume in 2009

(ton)

Actual production in 2010

(ton)


(ton)


(ton)

CPO PK CPO PK CPO PK CPO PK

Jangkang

Mill

60

65,518 13,977 60,166 13,836 62,931.56 13,531.99 67,614 15,545

Actual production to date in

September 2013 (ton)

Projected production

in 2013 (ton)

CPO PK CPO PK

42,221 9,877 73,755 15,505

1.4. Certification details

RSPO membership number: 1-0084-09-000-00

Jangkang Mill Unit Certificate number :TNI-RSPO-005.2009

Date of previous assessment: July 2-6, 2012

Date of certification approved/ issued: 06.01.2011 and valid until 2016.01.05

1.5. Description of Supply Base

1.5.1. Description of Plantation (Fruit Sources)

Oil palm fruit is sourced from company owned estates and third party. The certified FFB counted from 5 (five)

company owned estates is listed in Table1-3.

Table 1-3 Description of fruit supply base (fruit sources)

Estates

Certified

volume

in2009

(ton)

Actualprodu

ction in2010

(ton)

Actualprod

uction in

2011

(ton)

Actual

production

in2012

(ton)

Projected

production

in 2013

(ton)

JangkangEstate 58,571.69 56,426.74 59,414.00 65, 599.61 71,528.00

BalokEstate 59,904.81 56,458.30 58,530.00 64,440.13 69,230.00

LadangJaya Estate 45,052.65 41,990.35 43,373.00 45,110.62 44,397.00

SariBungaEstate 38,451.47 36,196.32 36,840.00 45,133.08 47,666.00

AirRuak Estate 71,009.69 71,167.01 79,451.00 79,846.29 82,179.00

FFB own estates 272,990.30

262,238.72 277,218.00 300,129,73 315, 000.00

FFB purchased 2,367.69

2,780.98 4,562.87 7,756.09 0

Total FFB processed 275,357,990 265,019,700 281,780,870 307,885,820 315,000,000

% FFB own estates 99.14 98.95 98.38 97.48 100.00

% FFB purchased 0.86 1.05 1.62 2.52 0.00

% Total FFB processed 100.00

100.00 100.00 100.00 100.00

*Source data: Based on production report 2012, and budget report 2013


Audit Report

Form Title

Revision No..

Effective Date

Page

: FRSPO-TNI-05

: 1

: 04.01.2011

: 8 of 38


Table 1-4. Palm Age Profile

Year of planting

Planted Area Total Planted

Area Jangkang Estate

Balok Estate

Ladang Jaya Estate

Sari Bunga Estate

Air Ruak Estate

1990 940.84 207.20 824.30 1,972.34

1991 83.20 640.20 501.41 186.7 1,411.51

1992 118.54 631.90 435.02 259.5 1,444.96

1993 88.90 - 1148.3 1,237.20

1994 - - 81.8 81.80

1995 400.50 672.40 1,072.90

1996 79.56 283.40 727.9 1,090.86

1998 203.40 792.199 267.2 1,262.80

1999 234.60 - 400.2 801.2 1,436.00

2000 360.90 - 463.59 430.23 1,254.72

2001 - 43 43.00

2004 129.97 239.20 369.17

2005 581.06 359.83 361.73 1,302.62

2006 - - - 38.63 210.8 249.43

Total 3,018.07 2,877.70 2,117.91 2,151.17 4,064.46 14,229.31

Table 1-5. Statistic of Supply base

Estates

Area Summary

Planting year Total

(Ha)

Planted

with Oil Palm (Ha)

Mature

(Ha)

Immature

(Ha)

Jangkang

Estate 3,678.21 3,018.07 3,018.07 0 1990 – 2005

Balok Estate 3,157.20 2,877.70 2,877.70 0 1990 – 2004

Ladang

Jaya Estate 2,157.88 2,117.91 2,117.91 0 1990 – 1998

Sari Bunga

Estate 2,397.50 2,151.17 2,151.17 0 1991 – 2006

Air Ruak

Estate 4,886.08 4,064.46 4,064.46 0 1992 – 2006

Total 16,276.87 14,229.31 14,229.31 0

Source : Hectare statement in September 2013

1.5.2 Replanting program

Table 1-5. Replanting program for Each Estate

Year of Replanting

Planted Area (ha) Total Area to be

planted (ha)

Jangkang Estate

Balok Estate Ladang Jaya

Eestate Air Ruak Estate

Sari Bunga Estate

2013 - - - - - -

2014 300.46 300.46

2015 335.00 335.00

2016 207.20 824.30 157.27 1,188.77

2017 940.84 70.02 1,010.86

TOTAL 940.84 207.20 824.30 862.75 2,835.09


Audit Report

Form Title

Revision No..

Effective Date

Page

: FRSPO-TNI-05

: 1

: 04.01.2011

: 9 of 38


1.6. Progress of Time-bound Plan (for other management units and justifications).

SMM does not have any mill and estates than other than those which being certified in this certification

process, so there is no time bound plan for other unit mill and estate.

1.7. Organizational Information/Contact Person

Contact Person Philip Liu C.K

Position Head of Operations

Organization name PT. Sahabat Mewah dan Makmur ( SMM)

Address Wisma BII Jl. Diponegoro Nr. 18 7th Floor

Postal code, city Medan

Country Indonesia

Telephone Nr +62 61-4537480

Fax Nr +62 61-4538366

Email [email protected]

2. Assessment Process

2.1. Assessment Methodology (Program, Site Visits)

2.1.1. General Overview

The assessment was carried out by referring to TÜV NORD Indonesia Certification Procedure, PRSPO-TNI-01

Rev. 1, dated 01.04.2013.

2.1.2 Assessment Agenda

The annual surveillance assessment 3 was conducted on October 07 to 11, 2013 for Jangkang Mill, Jangkang

Estate, Balok Estate and Ladang Jaya Estate while Air Ruak Estate and Sari Bunga Estate were not assessed in

this third surveillance assessment, which led by Ms. Wieke Savitri (WS) as lead auditor, Ms. Karlina Bone (KB) as

auditor and was assisted by Mr. Adi Firmansyah (AF) as social expert and Mr. Dr. Supijatna (SUP) as Agronomy

expert.The audit schedule available as below.

Table 2-1 Audit Schedule

Client: PT. Sahabat Mewah dan Makmur (SMM)

Address: Desa Jangkang, Kecamatan Dendang, Kabupaten Belitung Timur– Propinsi Bangka Belitung,

Indonesia

MR Name, Pos.: Mr. Antoperis Tarigan

Number of Mills: 1 Number of estate(s): 3 Order No. - Business No. -

Mill(s), Location Estates, Locations

- Jangkang POM, Jangkang Village, East Belitung

Regency, Bangka BelitungProvince, Indonesia

1. Jangkang Estate , Jangkang Village

2. Ladang Jaya Estate, Ladang Jaya Village

3. Balok Estate, Balok Village

All of them located at East Belitung District, Kepulauan Riau

Province, Indonesia

Standard: RSPO P&C (Principles & Criteria) INA NI May 2008;and Module E: Mill Supply Chain, Nov 2011

Type of audit: Surveilance Audit -3 Audit date: 07 – 11.10.2013

Lead Auditor: Wieke Savitri (WS) Trainee / Expert: Supijatna (SUP); Adi Firmansyah (AF)

Auditor(s): Karlina Bone (KB)

Audit days on-site: 5


Audit Report

Form Title

Revision No..

Effective Date

Page

: FRSPO-TNI-05

: 1

: 04.01.2011

: 10 of 38


Date / Time1)

Site / Shift /

Organizational Unit Auditor

(Abbrev.) P&C Explanation

Day 1: 07.10.2013 at Balok Estate

10:00 – 10:30 Opening WS, KB, SUP, AF All - Briefing and prepration for audit

- Verification NC of previous audit 10:30 – 18:00 Balok Estate WS, KB, SUP, AF - 1.1, 1.2

- 2.1, 2.2, 2.3, 3

- 4.1 – 4.8

- 5.1-5.6

- 6.1-6.11

-

- Request of info and respons

- Regulation compliance, land-use right, customary right, actual and budgeted production

- SOP, Soil Control, Errosion Control,Water Mgt, IPM, Chemical Mgt

- EIA, HCV, Burning Issues, Waste Mgt, Agrochem.

- Wages,Trade Union, Anti Child Labour/ Discrimination/Sexual Harrasment, Payment to Outgrower, CSR

18:00 - End of day one

Day 2: 08.10.2013 at Ladang Jaya Estate 08:30-09:00 Opening WS, KB, SUP, AF All -Briefing and prepration for audit

-Verification NC of previous audit

09:00-17:00 Ladang Jaya Esatate WS, KB, SUP, AF - 1.1, 1.2

- 2.1, 2.2, 2.3, 3

- 4.1 – 4.8

- 5.1-5.6

- 6.1-6.11





- Wages,Trade Union, Anti Child Labour/ Discrimination/Sexual Harrasment, Payment to Outgrower, CSR 17:00 End of day one

Day 3: 09.10.2013 at Jangkang Estate

08:30-09:00 Opening WS, KB, SUP, AF All -Briefing and prepration for audit -Verification NC of previous audit

09.00 – 12.00 14.00 – 17.00

Jangkang Estate Public Consultation at Jangkang Mill

WS, KB , SUP, AF - 1.1, 1.2

- 2.1, 2.2, 2.3, 3

- 4.1 – 4.8

- 5.1-5.6

- 6.1-6.11





- SIA, Comm&Consult, Dispute Resolution, Costumary rights, Wages,Trade Union, Anti Child Labour, Non-Discrimination,Sexual Harrasment, Payment to Outgrower, CSR

17:00 End of day 3 - -

Day 4: 10.10.2013 at Jangkang Mill

08.30 – 09.00

Opening WS, KB, SUP, AF All -Briefing and prepration for audit -Verification NC of previous audit

09.00 – 17.00

Jangkang Mill

WS, KB, SUP, AF - 2.1, 2.2, 2.3, 3

- 4.1 – 4.8

- 5.1, 5.3, 5.4,5.6

- 6.1-6.11


- SOP, Water Mgt, Safety, Training

- EIA,Waste&Energy Mgt,, Agrochemical.

- SIA, Comm&Consult, , Wages,Trade Union, Anti Child Labour, Non-Discrimination, Sexual Harrasment, Payment to Outgrower

- SC: Module E Jangkang Mill WS, KB - Supply chain

Module E -

17:00 End of day 4

Day 5: 11.10,2013 at Jangkang Mill

08:00 -10.00 Reporting WS, KB -

10:00 -12.00 Closing Meeting WS, KB All Presentation of audit result

12:00 End of surveillance audit and travelling to Jakarta


Audit Report

Form Title

Revision No..

Effective Date

Page

: FRSPO-TNI-05

: 1

: 04.01.2011

: 11 of 38


2.2. Assessment Team

2.2.1. Lead Assessor: Wieke Savitri

Qualification Compliance

Educational Background

Has a bachelor degree from Agriculture Faculty, Bogor Agricultural University Yes

Working Experience

1995-1997: PUPUK Foundation (Perkumpulan Untuk Peningkatan Usaha Kecil,

A Non Government Organization for promoting small scale enterprises supported and financed by GTZ-Germany and Swiss Contact, as Management Consultant. Responsibilities : To arrange projects regarding business management, human resources, marketing and IT to promote small scale enterprises.

1997-2004: PT. Varia Industri Tirta and PT.Tirta Investama.

Bottled water companies under Danone management as Quality Control Manager/ Quality Assurance Manager/ Internal Auditor and Trainer. Responsibilities : deliver training and implementing management systems for ISO 9001, ISO 14001, HACCP, GMP, ISO 22000, 5S, QCC, SPC

1997-2004: Danone-Aqua Foundation as Associate Representative in factory. Responsibilities: to develop community development programs for people living around factory.

2004- 2005: PT. Tribina Mediartha Sarana. A consulting company, as a Consultant and Trainer. Responsibilities : deliver training and consultancy for companies and organizations for ISO 9001, ISO 14001, SMK3, HACCP, GMP, ISO 22000, 5S, QCC, SPC

2005-2006: PT. Global Certification Indonesia. Certification Body based in UK as Operations Manager. Responsibilities: Running daily operation and reporting to Head Office in UK.

2006-Now: PT. TUV NORD Indonesia as ISO 9001/RSPO/ISPO Lead Auditor. Branch

Manager Surabaya Office. Responsibilities : Running daily operation in Branch Office, conduct audit and reporting.

Yes

RSPO Training

Certified RSPO Lead Auditor Training by ProForest-Wild Asia on July 7-11, 2008, Indonesia.

Yes

Other Training

- Internal Auditor Training of Environmental Management System (ISO 14001:1996) EARA - REDECON, 2000, Indonesia.

- Internal training SMK3, Indonesia.

- Workshop for Community-based Environmental Educators by the United Nations of Environmental Program, 2002, Thailand.

- Process based audit ISO 9001;2000 by PSB Certification, 2002, Indonesia.

- ISO 22000 by SAI Global, 2005, Indonesia.

- ISO 9001:2000 Advanced Lead Auditor Training Course, by IQCS International Certification Services, 2006, Indonesia.

- ISO 9001:2008 upgrading training, by TUV NORD Indonesia.

- ISPO training in 2011.

Yes

Experience related to RSPO

RSPO to date (Aug 2010 -May 2013)

- More than 25 x pre-assessments and main assessment of RSPO P&C in Indonesia, (RSPO P&C)

- 1 x NPP assessments in Indonesia

- 3 x RSPO SCC assessments in Indonesia

Yes

2.2.2. Assessment Team Members

RSPO REQUIREMENT ASSESSOR QUALIFICATIONS COMPLIA

NCE

Fluent in main local languages and English.

Karlina Bone (KB) Adi Firmansyah (AF) Supijatna (SUP)

Indonesian citizen, fluent both in Bahasa and English Yes

Field working experience in the palm

SUP He holds a doctorate in Environmental and Natural Resources Management from Bogor Agricultural

Yes


Audit Report

Form Title

Revision No..

Effective Date

Page

: FRSPO-TNI-05

: 1

: 04.01.2011

: 12 of 38


oil sector, or a demonstrable equivalent.

University (IPB), and has a strong background and experience in Agronomy aspects. He has been working in IPB since 1986 as a lecturer in Agronomy, including Palm Oil Plantation subject.

Good agricultural practices (GAP), integrated pest management (IPM), pesticide and fertilizer use.

SUP

He has extensive experiences in research, such as in plant water and nutrient requirements, irrigation and fertilizer application, seedling selection and Integrated Pest Management; Several research subjects that had been done, for example: Research of high grow fertilizer effect on growth and production of oil palm, Cisalak Baru Plantation, PTP VIII, Banten; Feasibility study of upgrading existing swamps for oil pam development in Riau and Jambi Province; Research on Green Giant NPK Fertilizer Effect on Immature Oil Palm Growth at Cikabayan Research Station, Bogor; and many more.

Yes

KB She has a bachelor degree in Biological Science, in ecology major. Done a research in a nitrification and denitrification in a recirculation water treatment project.

Health and Safety assessment on the farm and in processing facilities. (For example OHSAS 18001 or occupational. Health and safety assurance system).

KB

Observed audit in OHSAS Audit as a trainee for Indonesian contractors, such as PT. Inti Indah, PT. Virajaya Riauputra, etc. Other than that, observed as a trainee as well RSPO P&C for PT. Inti Indo Sawit - Tungkal Ulu (CA), PT. London Sumatra (ASA III), UPOIC (CA stage 1 and stage 2), PT. Sahabat Mewah Makmur (ASA I), etc.

Yes

Workers welfare issues and social assessment experience. (For example with SA8000 or related social or ethical accountability codes);

EcoNo.mic issues

AF

Received a bachelor degree in Agriculture Social EcoNo.my from Bogor Agricultural University (Institut Pertanian Bogor – IPB) in 2002. Has been working for CARE-IPB since 2007, a Centre for Alternative Dispute Resolution and Empowerment under Research and Community Service Institution (LPPM – Lembaga Penelitian dan Pengabdian kepada Masyarakat), Bogor Agricultural University. Involved in numerous projects, such as ISPO Gap Analysis for PT. JA Wettie (2012), Community Perception Study on Comdev VICO Indonesia (2011), CSR Program Design for PKT Bontang (2010-2011), Social Impact Assessment for Sime Derby Plantation, PT. BAL & PT. SNP, West Kalimantan (2009), Policy Study for Social Empowerment Division for PT. Hamas Aeba Management (2005-2006), Study for Dispute Resolution Model for Mining, feasibility Study for Integrated Palm Oil Industry for PT. Cipta Futura, at Bangka Belitung Province (2004-2005), Environmental Impact Assessment for Sorong City, Papua Province (2002), Pre Feasibilty Study for Agro Terminal and Industrial Area in Banten Province (2002), etc.

Yes

Yes

Environmental and ecological assessmenting. (For example experience with organic agriculture, ISO 14001)

SUP

He qualifies in biodiversity assessment and biodiversity science. Underwent auditor training in oil palm estates and palm oil mill in EMS and RSPO P & C. Member of the team in RSPO certification assessment of PT. Perkebunan Nusantara IV, PT.Socfin Indonesia, and many more.

Yes

2.3. Certification Body

PT. TÜV NO.RD Indonesia is a subsidiary of the German TÜV NORD Group. Our company is a market

leader in Indonesia for inspection, testing and certification services. Through more than 800 clients, we

offer Not just a high added value service but also the trust and confidence embedded in our issued


Audit Report

Form Title

Revision No..

Effective Date

Page

: FRSPO-TNI-05

: 1

: 04.01.2011

: 13 of 38


certificates/reports. We satisfy No.t only our direct customers but also other stakeholders, like

regulators and interested society including NGOs, through our competent auditors, inspectors and analysts.

PT. TÜV NORD Indonesia, under its HQ in Germany, is a member of International Accreditation Forum

(IAF) and accredited by DAR–German and by the Indonesian Accreditation Committee (KAN). Services

provided by the Strategic Business Unit Systems Certifications are: Food Safety Management System ISO

22000, Information Security Management System ISO 27001, Social Accountability SA 8000, Food

Hygiene HACCP, Medical Device Directive MDD, ISO 13485, Occupational Health and Safety OHSAS

18001, Product Certification: GS-Mark, CE-Mark, SNI Mark, Inspection for ISPS Code, Clean Development

Mechanism (CDM) Validation & Verification, British Retail Consortium (BRC) and ISCC.

.

3. Assessment Findings

3.1. Summary of the Findings by Criteria

Objective evidences were obtained separately for each of the indicators for mill and estates in the annual

surveillance assessment. The results for each indicator from the different operational areas were

aggregated to assess the overall conformances of the company‟s operations to each criterion. A statement

is made for each indicator on the finding. A summary of the Non-Conformities is given in Appendix 3.

During the annual surveillance assessment 3, 2 (two) major non-conformities and 8 (eight) minor non-

conformities have been raised against RSPO Principals and criteria, whilst 0 (zero) major non-conformities

have been raised against RSPO Supply Chain Standard –module E (mass balance).

SMM and its supply bases have prepared a Corrective Active Plan which each date for implementation has

been accepted by PT. TÜV NORD Indonesia. Thus, SMM and its supply bases are still recommended

to extend the certification of RSPO Principal and Criteria which valid until 2016.01.05

The following is a summary of the findings for compliance with the RSPO Principles & Criteria for

Indonesian National International <INA-NI ver. May 2008 Standard). While a summary of the findings for

compliance with the RSPO Supply Chain Module E (Mass Balance) ver. November 2011 is attached in

Appendix 2. Summary of the findings for compliance with the RSPO Supply Chain Module E (Mass

Balance) ver. November 2011.

.


Audit Report

Form Title

Revision No..

Effective Date

Page

: FRSPO-TNI-05

: 1

: 04.01.2011

: 14 of 38


Table 3-1 Summary of Findings by Criteria

FINDINGS/COMMENTS

Criterion 1.1 (C.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

PT SMM still maintain the procedure to provide adequate information to other stakeholders on environmental, social and legal issues relevant to RSPO, through procedure Penanganan Komunikasi Stakeholder, Stakeholder Communication Procedure (PRS-SDV-006) rev.01, and Prosedur Stakeholder Meeting, (PRS-SDV-007) held by

Community Relation Officer. This procedure explains communication mechanism with stakeholders, how to receive information and aspirations of the parties, in addition the system also requests to all head of mill and head of estates to communicate with local communities and stakeholders as insufficient evident is found. According to the procedure, all information received from related parties and its responses was performed in Rekaman Penerimaan Informasi dan Tanggapan Stakeholder, Record of Information Request and Respond, dan Rekaman Penanganan Informasi dan Tanggapan. The records contain information of date, name, organization, information requested, action taken to request, person in charge whom follow up or, and other references i.e. letter. The record was summarized and updated yearly and last resume was updated on September 2013. All records were maintained under procedure Prosedur Umum Penyimpanan Dokumen Perusahaan, General Procedure of Company’d Keeping Records, (PRS-SDV-002), that stated all records are maintained for at least five years.

Auditor team assessed the implementation of this procedure and found that:

There is no written evidence in response to a letter No. 050/80/BLK/XII/2012 from the Head of Balok Village Mrs. Liliyanti about land lease proposal for the development plans of fishing warehouse at sacred sites in the concession

A major nonconformity was raised (See NCR-SMM-01). Both correction and corrective action have been submitted,

being reviewed and accepted by auditor.

Compliance Status : Close, after correction and corrective action.


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

PT SMM Management has a policy of no objection for documents to be made publicly available, which are in accordance with Government regulations, such as legal, social and environmental documents. Only documents which contain confidential and sensitive information are not publicly available and this has been verified by the auditor team. The documents are availale for public viewing upon request, such as: • AMDAL, UKL-UPL, Social Impact Assessment (environmental and social impact assessment), ) • Laporan Pemantauan RKL/RPL (Environmental Management and Monitoring Reports). • Hak Guna Usaha/HGU (Land Use Title, Land titles/user rights (Site Permit Izin Lokasi) • Plantation Operation Permit (Izin Usaha Perkebunan). • Identifikasi HCV (HCV identification), • The Health and Safety Manual and Program. • Current and past FFB prices • Compensation claims mechanism During annual surveillance 3, the auditor team checked the all documents above and reported in relevant principle and criteria below. Those documents are available for public upon request or submitted to relevant stakeholders. All estates have been identified for total of land use occupied by SMM that well informed and displayed on HGU board. Environmental impact and social impact, which documented in AMDAL that was approved by local environmental agency of Belitung Timur and environmental monitoring report in RKL/ RPL documents are submitted regularly every six‐month to Government. Assessor confirmed the availability of July – December 2012 and January-June 2013

reports.

Compliance Status : Comply.


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

SMM has a system to maintain and monitor applicable law and regulation, and measure its compliance through Prosedur Evaluasi Pemenuhan Peraturan, Procedure of Regulation Compliance Evaluation (PRS-CLS-001). Head of Legal Department has regularly monitored the regulation compliance in order to ensure that they can and will comply with applicable law and regulation. Legal Requirement Fullfilment is annually reported by Legal Department. The latest evaluation report was made in June 1, 2013 (FRM-SOP Leg 01-02).

This list of law and regulation including Land Titles, Environmental, Forestry, Water and Air Pollution prevention, Safety, Labour Wage, Waste Management, and relevant permits whichare applicable to mill and plantation operations. Auditor team has assessed that company has reveiwed to all applicable laws and regulations as well as operation licenses needed such as licences of the operators, and found that:.

a. All electricians do not have OHS Competency Certificate for Electrician. This does not comply to Kepdirjen Pembinaan Hubungan Industrial and Pengawasan Ketenagakerjaan No. Kep.311/BW/2002.


Audit Report

Form Title

Revision No..

Effective Date

Page

: FRSPO-TNI-05

: 1

: 04.01.2011

: 15 of 38


b. All welders do not have welder„s certificate. This does not comply to a Decree of The Minister of Manpower and Transmigration RI No. Per02/1982.

A Major nonconformity was raised (See NCR-SMM-02). Both correction and corrective action has been submitted, being reviewed and accepted by auditor.



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

SMM and estates have full the right to use the land for palm oil estate. SMM has license or land permit from the governmental concern such as Tanda Daftar Perusahaan, Daftar Ijin Lokasi, Sertifikat HGU, Ijin Usaha Perkebunan, (Company Registration Location Permit, Certificate of HGU, and Plantation Permit ). Auditor cheked the validity all of them, and found the compliance to the government regulation. The Company Registration No: 02.12.1.01.04115 dated January 28, 2008 and valid until February 3, 2013. The Plantation Permit No. 525.26/9541/2007) dated, 2 Nov 2007. The Location Permit No: 460.1466/IL/X/1995, dated 9 Oct 1995.

Below are the summary of concession are of SMM :

HGU number Location Area (Ha)

1 Jangkang 4,032.00

1 Nyuruk 6,955.20

2 Nyuruk 403.64

1 Renggiang 4,886.08

Total HGU area 16,276.87

Scattered boundary stones were encountered along the legal boundaries of all the estates. Most of them were observed to be properly maintained. List and photograph of boundary stones were available and they appeared properly maintained. The legal status of boundary stones was approved by Badan Pertanahan Nasional (National Land Body). Monitoring and maintenance of legal boundaries were instructed through Internal Memo from General Manager of Estate dated 1 November 2011. The last monitoring was conducted in September 2013 by Field Assistants.

In the concession area of PT. SMM there are enclave lands that had been cultivated by local comminity with sengon wood, rubber and pepper since the company took over the estates, the total enclave in entire of PT. SMM concession area is 100 ha, located in the Ladang Jaya Estate. Auditor team checked the area and found that no information in the area and no clear boundaries to separate between SMM area and local community, for example with bamboos, since the area within the concession area, the company can not install BPN pegs.

OFI : A clear boundary should be given around the planted area by local community and information board of total area to prevent potential territorial expansion.

For the OFI issued, SMM has submit corrective action by installing sign board in this area and socialized to land tiller.

Compliance Status : Comply, with observation.


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.

It was confirmed during annual surveillance assessment 3 as well as during interview with stakeholders that there were no findings which indicated that SMM diminish the legal rights or customary rightsof other users, without their free, prior and informed consent as there were 100 Ha of SMM consession area in Ladang Jaya Estate were planted by local community. SMM has no attempt to make compensation for the land which is located in the concession area, since they didn‟t want their land to be compensated



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

SMM has long term projection (2011 – 2016) for its crop, including key performance data for its mill and estates as part of its long term economic planning, including mill allocation, production of FFB (tonnage); FFB/ ha (yield); production CPO and PK; OER, by predicting inflation rate; exchange rate; interest rate; portion cash; dividend; non deductible expensive; working hours; turnover; % allowance for doubtful accounts, age of asset; price of FFB as stated in “Financial Projection PT. SMM”.

SMM also provide replanting program for its supplybbases as shown in Table 1-5. During annual surveillance assessment auditor verify the replanting program.



Audit Report

Form Title

Revision No..

Effective Date

Page

: FRSPO-TNI-05

: 1

: 04.01.2011

: 16 of 38



Operating Procedures are appropriately documented and consistently implemented and monitored

SMM has Standard Operating Procedures with the best practices for its mill and estates operations. Most of the

Standard Operation Procedures are incorporated in the SM-K3 management. The following procedures applicable and

implemented within sustainable palm oil,

a. SOP for Oil Palm : SMM-Est-001 up to 19 (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 : SMM-Mill-001 up to 16 (containing stages of process, boiler, power generation, water

treatment, land application, electrical system, quality (inc monitoring of CPO parameters), dispatch and

laboratory).

c. SOP for Environment Management System, Health & Safety which are incorporated with all procedures

(containing application of pesticides, use of PPE , emergency preparadness) .

SMM and estates have been certified for ISO14001, Safety and Health Management System, and ICCS. These

procedures and work instructions are incorporated in the RSPO management system.

During the assessment, the auditor review of availability of procedures and its implementation Updated procedures are

developed at the SMM office and then will be sent to the Section Head of each estates whenever there are changes

made. The procedures and work instructions are consistently implemented. Records of operation activities based on

the relevant procedures and work instructions are kept properly. The performance of mill is monitored on a shift basis

and recorded daily. A monthly report is produced by each estate for management meeting that will be held at SMM

office to review the monthly implementation and any changes that may affect to the implementation of each estate.

The implementation and operations are monitored through Internal Audit Operations, Engineering and Agronomy Visit,

and and Internal RSPO Audit. Monitoring of estate operations recorded in Internal Audit File includes house keeping,

warehouse, field maintenance and harvesting. Internal audit and external financial audit is done once a year.

Compliance Status :Comply..

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

SMM has developed SOP to maintain soil fertility and water quality as stated in SOP-OPR- 005, Konservasi Tanah dan Air dated on 1 May 2005. Regular soil analysis is done every 5 year the last report was in 2011, while Leaf sampling

on block basis is carried out by external laboratory every year to analyze for leaf N, P, K, Mg, Ca and B status.

The fertililizer recommendation was established by Head of Agronomy. For the year 2013 the recommended dose of fertilizer such as : Kieserit (not all blocks) at a dose of 1-1.5 kg / plant / yr; Borate 0.10 to 0.12 kg / plant / yr; RP with a dose of 0.75 to1.5 kg / plant / yr; Hikay 6-8 kg / plant / yr and ZA 1 to 1.5 kg / plant / yr. To maintain soil fertility the company also used palm by-products such as POME and EFB. These nutrient- containing mill wastes are applied in the fields to improve the soil organic matter content and to substitute or supplement inorganic fertilizer inputs. Fronds are systematically stacked in the palm inter-rows to prevent soil erosion following pruning and after harvesting of FFB.

EFB is applied as fertilizer for beneficial plant and also as mulching. According to Internal Memorandum from General Manager dated February 18, 2011 regarding the usage of EFB, the EFB dosage was 40 ton/ha. The priority of EFB application was focused in Sari Bunga Estate since it has higher area of marginal land (sandy) than other estates. For example, EFB applications in LJE only in Block 20 Division 11 while the planning of EFB application by Estate manager in 2013 were 9 blocks, but the decision to distribute EFB determined by GM Manager as the capacity of FFB is limited.


Criterion 4.3 (C.4.3) Practices to minimize and control erosion and degradation of soils

SMM has developed SOP Pengelolaan Tanah Marginal, Marginal Soil Maintainance (SOP-OPR-029) dated on 1 June 2009 for managing fragile soils. This SOP shows that the management of SMM group is care about the practices to minimize and control erosion and degradation of soils and applicable for all companies within the group.

The management of SMM has committed to make efforts to practice showing with the evidence obviously to minimize and to control soil degradation at some of estates. General topography of SMM estate is flat to gently rolling. Approximately only 5 % of the planted hectarage in SMM is of hilly terrain of more than 25 degrees. The SMM Management applies some techniques to reduce erosion, especially while land preparation for replanting/conversion, such as planting LCC (legume cover crops e.g.,: Mucuna brachteata sp), terracing/platforms, frond stacking, borrow pit and windrowing. SMM also has vetiver grass planting program on sloped land to minimise soil erosion. Erosion monitoring plots in some areas were constructed 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. SMM has highly protected the whole areas of estates, if there is found the wetland. The audit team did not find any wetland within the whole company owned estate. The strategic of fragile and problem soils such as sandy, low organic matter acid sulphate soils have been managed and monitored showing on” the Red Black Explanation Summary” at Air Ruak Estate.

Roads were very well maintained, SMM has established SOP to maintain road as stated in Prosedur Perawatan Jalan (PJ-CWT-002), The maintenace of road comprise for grading work, composting and cambering to ensure that supply of the FFB access to the mill without delay. Surface run off is reduced by having a systematic road upkeep and


Audit Report

Form Title

Revision No..

Effective Date

Page

: FRSPO-TNI-05

: 1

: 04.01.2011

: 17 of 38


maintenance program.. Roads are cambered and graded periodically to ensure proper channeling of rain wate.r Record of road maintenance was kept in Program Pemeliharaan Jalan, Road Maintenance Program.


Criterion 4.4 (C.4.4) Practices to maintain the quality and availability of surface and ground water

SMM has developed SOP to maintain soil fertility and water quality as stated in SOP-OPR- 005, Konservasi Tanah dan Air dated 1 May 2005. Prosedur Pengelolaan Sempadan Sungai, Riparian Management (PRS-SDV-004). During annual surveillance assessment 3, the auditor team confirmed the compliance the procedure for example: in Nyatoh springs area in Block 39 Division LJE were well protected, wire fenced and bamboos around it. There were marks the for boundary delineation for workers to probihit maintenance of oil palms with chemicals. Information boards HCV 4.1 and 5 and sign prohibition was quite clear.

Water management included monitoring of rainfall and all water usage and discharge (water as they enter and leave mills and plantations). Rain fall monitoring is done as per “Rain Fall SOP” no SOP-OPR-029 Rev 01 dated June 29, 2004. Rain gauge has been installed at each estate. The data is daily recorded at 07:00 am. Company provided the water balance, including monitoring of daily water consumption entering mills and plantation. Outgoing waste water into main natural waterways, such as drains, waste water runway, and POME for land application were monitored monthly.

Biological Oxygen Demand (BOD) from waste water treatment plant and pounded for land application was measured by external laboratory monthly. Result of measurement was monitored and recorded into documents of RKL/RPL (Environment Management Plan – Environmental Monitoring Plan), both for plantations and mill and sent to local environmental agency every 6 (six) months. Result of BOD measurement still below the permitted BOD level, 5000 ppm. See section 5.6.

Water usage for mill operations was available and recorded as Program Pengelolaan Air di Pabrik (Water Management

for Mill).


Criterion 4.5 (C.4.5) Pests, diseases, weeds and invasively-introduced species are effectively managed using appropriate Integrated Pest Management (IPM) Techniques

SMM has provided procedure for Integrated Pest Management (IPM) plan outlined in SOP Agronomi (Pengendalian Hama Terpadu SOP-OPR-026). The procedure aims for controlling pests, diseases and weeds. Implementation of the

IPM program recorded in Management Plan and Pesticide Use Reports

IPM comprises both chemical and biological control. Biological control for caterpillar i.e by planting of beneficial plants such as Antigonon leptosus (air mata pengantin),Turnera subulata (bunga pukul delapan) Euphorbia heterophylla (patik emas),Casia cobanensis, The plants are hosts for Cikanus sp(caterpillar predator).

Report of IPM Program was recorded as Report of Pest and Disease. Rat control was conducted through rat census and barn owl (Tyto alba) monitoring. However, the auditor found that:

a.The rat census in April 2013 showed there were rat infestation at all estates which the attack rate has exceeded the threshold 5%, while rat bait application was recently conducted in July 2013 due to lack of stock rat bait which is not comply with SOP Pengendalian Tikus dengan Rat Bait (SOP-OPR-032/ Rev1/ 20 Nov 2010. However it happened again in August 2013 that the rat cencus showed that the attack rate still exceeding the threshold, while the rat bait only applied at Ladang Jaya Estate and Sari Bunga Estate, but no application of rat bait at Balok Estate and Jangkang Estate.

b.According to SOP Pengendalian Tikus dengan Rat Bait (SOP-OPR-032/ Rev1/ 20 Nov 2010, rat bait application will be done if exceeding the threshold 5% or 10% if the block is installed with nest boxes occupied by barn owl, however, there were no reports of bird census data evaluation used as consideration for rat bait application.

A Minor nonconformity was raised (See NCR-SMM-03). A corrective action has been submitted, being reviewed and

accepted by auditor.

Monitoring of pesticide toxicity units records was available per estate‟s division, were calculated based on the total usage of the pesticide per hectare, multiply by LD 50 for oral and dermal stated by the manufacture, and multiply by the active matter.


Criterion 4.6 (C.4.6) Agrochemicals are used in a way that does No.t endanger health or the environment. There is No. prophylactic use of pesticides, except in specific situations identified in national Best Practice guidelines. Where agrochemicals are used that are categorized as World Health Organization Type 1A or 1B, or are listed by the Stockholm or Rotterdam Conventions, growers are actively seeking to identify alternatives, and this is documented.

There is a List of pesticides used and pesticides stocks is listed in the”Balance Stock Agrochemical in 2012 and 2013”.,

those can be bought for application are in accordance with the Permentan No 1/2001, WHO and Rotterdam

convention, are issued and distributed to Procurement division. Only procurement division can buy and supply the

matter. SMM has a procedure on how to apply agrochemicals, refers to Peraturan Menteri Pertanian No.

07/Permentan /SR.140/ /2007, or Regulation No. 07/ Permentan /SR.140/ 2/2007 Ministry of Agriculture Republic of

Indonesia.. All the agrochemicals used are registered and approved by Pusat Perizinan dan Investasi Sekertariat

Jenderal Departemen Pertanian 2008, or Invesation and Permit Center, Agriculture Department, Republic of Indonesia.


Audit Report

Form Title

Revision No..

Effective Date

Page

: FRSPO-TNI-05

: 1

: 04.01.2011

: 18 of 38


SMM has established procedure to handling hazardous agrochemicals, provide MSDS, emegecy facilities such as shower water and soap available if emergency situation happened. provide bin for hazardous wastes, sand, and fabric cotton waste. SMM also established procedure for handling hazardous agrochemicals spills and only trained persons for pesticide application technique are permitted and instructed for pesticides application in the field.

Refer to Agriculture Ministry, through its decree No. 1/2007 regarding Bahan Aktif Pestisida Yang Dilarang Dan Pestisida Terbatas (Prohibited active ingredients in pesticides and Restricted Pestcides), Head of Sustainable Department has issued memorandum No.: 053/GM/YZ/Int/V-2011 dated on May 14, 2011 regarding Penggunaan Pestisida Berbahan Aktif yang dilarang (Usage of Pesticides with Prohibited Active Ingredient). In this regulation, paraquat was prohibited in all SMM mill and estates. Checks on the records of agrochemicals used found that they complied with the regulation. There was no usage of paraquat in all SMM Estates. Regular training/ socialization for chemical sprayers was conducted. Regular training/ socialization for chemical sprayers was conducted.. SMM has policy that pregnant and breast-feeding women are prohibited to work with agrochemical, auditor confirmed that it was comply. SMM conduct general medical check-ups for workers involved in handling hazardous chemicals. However, during audit it was found that:

Only for sprayers who have been work above five years that will be annually examined for specific health check parameter (cholinesterase). It was found that no specific medical health examination result can be shown for several sprayers in all divisions. For example, Parto (BLK div IV), Rianti, Munah and Maryani (LJE div. 8), etc. This does not comply with the Decree of The Minister of Manpower and Transmigration RI No. 3/1986 clause 7 which stated that specific health examination shall be done for all sprayers at least once in a 6 months period.

A Minor nonconformity was raised (See NCR-SMM-04). Both correction and corrective action has been submitted,


Compliance status : Close, after correction and corrective action.

Criterion 4.7 (C.4.7) An occupational health and safety plan is documented, effectively communicated and implemented.

Top management of SMM has established enviromental, health and safety policy as stated in “Kebijakan Lingkungan, Keselamatan dan Kesehatan Kerja” dated 1 March 2011. PT. SMM has implemented health and safety management system as required by Indonesian Government and obtain SMK3 certification. Organisation Structure of OHS (Tim Panitia Pembina Keselamatan dan Kesehatan Kerja / P2K3) has been established and updated regularly,. The report of P2K3 was submitted to Manpower Department in East Belitung Regency Dinas Tenaga Kerja every 3 months. Organizational structure of Health Committee was available and chaired by Mr Subhi whose held the Sertifikat Ahli K3 Umum (Certificate for General OHS Expert). There was regular OHS Committee meetings conducted at monthly interval to give relevant explanations to all mill and plantation supervisors. . The agenda about the safety issues. Emergency Team was available on site.

All the operations have been risk assessed for obtaining SMK3 certification. With the assessment results, procedures for accidents and emergencies were developed. All the workers are assumed to have a work permit issued by Ahli K3 (Safety Officer) since the auditee has already implemented SMK3. There is a SOP for safekeeping of toxic chemicals and also for keeping records on their use. An area sprayed with a toxic chemical would have a signboard posted warning people of the danger and telling them to keep away.

All workers are insured by PT. Jaminan Sosial Tenaga Kerja (Jamsostek), the national insurance body; records of member list and payment were available. PT. SMM provides health care facilities for spraying operators, workers, and staff as well as people living around the employee‟s housing complex. The patient data were registered in their medical record. Each plantation has a health care facility and is visited by a doctor every week.

PT. SMM has identified, controlled, and monitored the occupational hazard and risk and in form of Hazard Identification and Risk Assessment Control (HIRAC). This asessment was understood and implemented properly by employees in general, and recorded properly. PT. SMM conduct regular measurement regarding safety working environment in mill and estates such as noise level. Workers who are exposed to high risk were identified and regular health examination was conducted as stated in SOP Prosedur Pemeriksaan Kesehatan (SOP-EHS-024). However, it was found that:

No specific medical examination, i.e. Spirometri and/or Audiometri for workers who work at high risk work station (boiler

station, engines room, genset room, etc. .

A minor nonconformity was raised (See NCR-SMM-05). Both correction and corrective action have been submitted, being reviewed and accepted. by auditor.

Daily and before work commences, supervisors of mill and plantations will conduct morning briefing to all workers regarding their jobs for the day including briefing on safety aspects. Record of training, socialization of OHS, morning meeting, certificate of training, use of safety equipment such as fire extinguisher were available. There are regular meetings between management and workers on health and safety issue. SMM developed training program annually. Training programmes on health and safety issues for 2012 -2013 was available, however, not all the training program had been conducted as scheduled in time table. The auditor team checked the records, and found that :

a.The records OHS induction training for the new recruited EHS officer cannot be shown.

b.No first aid training records for harvester supervisors at Ladang Jaya Estate.

A minor nonconformity was raised (See NCR-SMM-06). Both correction and corrective action have been submitted, being reviewed and accepted. by auditor.

Personnel protection equipment should be given to all high risk employees as required by related HIRAC and working instructions. However, it was found that :

a. None of harvesting workers wear safety goggles, the HIRA report did not mention the risk of accidents of injuried eyes.

b. During site visit there was construction work to replace roof at mill without installation of fall protection equipments


Audit Report

Form Title

Revision No..

Effective Date

Page

: FRSPO-TNI-05

: 1

: 04.01.2011

: 19 of 38


such as warning sign and warning line surrounding the areas

A minor nonconformity was raised (See NCR-SMM-07). Both correction and corrective action have been submitted, being reviewed and accepted. by auditor..


Criterion 4.8 (C.4.8) All staff, workers, smallholders and contractors are appropriately trained.

SMM still maintain the procedure to improve the competency of its worker,as well as for its subcontractor. The

procedure mentioned the training mechanism for its staff, worker, subcontractor, and out grower. Training programme

is formulated on yearly basis. Mill manager and Estate managers identify training need annually for technical skill

improvement as well as on safety. There are several training programs for workers, i.e spraying practices, Integrated

Pest Management, Occupational Health and Safety, toxic and hazardous substances, toxic and hazardous waste

management, and fire prevention and control. Some contractors and small holders are trained for safety training,

including induction of emergency procedure and use of PPE, as well as the information about FFB price.

Interviews with staffs and workers of mill and plantations showed that they are aware of the risk of their job. It was

confirmed that the training was effective and the competence of worker was enough to support their job. Interviews with

external FFB smallholders showed that they knew what is personnel protection equipment (PPE) and its purpose, and

about the FFB price regulation. Training programmes for 2012 -2013 was available. All training records during 2012

and 2013, including attendance lists, photographs, and training material were available and maintained properly. There

was evaluation of the effectiveness of the training for all those trained participants. The mill and estates have the

individual training record files for all their employees.


Criterion 5.1 (C.5.1) Environment aspects of plantation and mill management, including replanting, that have environmental

impacts are identified, and plans to mitigate the negative impacts and promote the positive ones are made, implemented and monitored, to demonstrate continuous improvement.

PT SMM has performed first Environmental Impact Assessment (AMDAL/RKL-RPL) which was approved on 28 May

1994, No. RC 220/948/B/V/1994, and it is updated quarterly as Laporan Monitoring Rencana Kelola dan Pemantauan Lingkungan / RKL-RPL (Monitoring Report of Environmental Management and Monitoring Program) based on Decree of Agricultural Ministry No.SK/Mentan. 014/ ANDAL/RKL-RPL/BA/V/95 dated 3 Mei 1995

The AMDAL information classified the activities into negative and positive impact. The listed negative impacts consisted of : 1) provision of non forest areas, 2) land clearing, and 3) procurement of infrastructure; while the positive impacts include: 1) Procurement of infrastructure, 2) Cover crop planting, 3) Planting of main crops, 4) maintenance of Immature and Mature crops, 5) Labour vacancy and 6) Increased of community wages .

Auditor team reviewed the last RKL/RPL updated on Quarter 1 and 2, of 2013. The assessment covered both the mill and estates of SMM in five estates, JKE, BLE, LJE, SBE and ARE. The document was regularly submitted to Badan Pengendali Dampak Lingkungan Daerah/BAPEDALDA or Local Environmental Impact Assessment Agency every semester (6 months).


Criterion 5.2 (C.5.2) The status of rare, threatened or endangered species and High Conservation Value habitats, if any, that exist in the plantation or that could be affected by plantation or mill management, shall be identified and their

conservation taken into account in management plans and operations.

The SMM management has prepared and developed all information as well for flora and fauna which are

comprehensively identified in “Executive Summary of High Conservation Value Report 2009”. The HCV‟s areas are

recognized with HCV‟s 1.3, 4.1, 4.2, and 6, which most of HCV‟s are available in the whole of the estates. The HCV‟s

area at the field is well identified with sufficient signboards, for example : HCV area 1.3 and 6 with total area 92.35 ha

to preserve cemetery of K.A. Yakub (Cakraningrat I), the first King of Balok (1618-1661) and Syech Abdul Jabar

Samsudin, a Moslem saint (Wali) which considered as the first person who taught Islam in Belitung. SMM has

established SOP to manage and monitor HCV as stated in Prosedur Pengelolaan dan Pemantauan Nilai Konservasi

TInggi (NKT, No PRS – SDV – 003 Rev 1 tgl 1 Sept 2009. Sign board and posters to inform or warn people not to hunt

or kill the protected species, and monitoring the presence of each HCV are available. SMM also develop management

plan and preparing budget 2013 to maintain HCV area.

Compliance Status :Comply.

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

SMM has identified all waste streams and the waste management plan appropriately. Office waste and household

waste were segregated, recycled where possible with rest to the landfill. Fibre was used as fuel for furnace and EFB

for fertilizer as mentioned in Section 4.2. Palm oil mill effluent (POME) was used for land application as fertilizer

supplement. POME from mill was pounded and digested an-aerobically. The treated effluent with reduced BOD was


Audit Report

Form Title

Revision No..

Effective Date

Page

: FRSPO-TNI-05

: 1

: 04.01.2011

: 20 of 38


then applied to the land in flat beds. The BOD level from ponds were monitored monthly and reported in the RKL-RPL

Report. To avoid spillage on the soil, there was secondary containment and oil traps in fuel/oil storage.

Air pollution from the activities boiler and generator was controlled by routine maintenance, and the air quality from the

emission stack was monitored every six month.

Hazardous wastes in the estates and mill are well recorded. The wastes include pesticide containers, batteries, and

waste oil and used oil filters. There was procedure to manage waste. This procedure was communicated to waste

officer at all SMM estates and mill. Copy of permit/licence of waste collector were available both at SMM mill and

plantations.

Toxic and hazardous waste was collected at centralised hazardous warehouse and PT Bearing Grease Jaya collected

the wastes regularly. PT Bearing Grease Jaya has a licensed as collector for toxic and hazardous waste based on

Decree Letter No 138/2011, from Ministry of Environment (MoE). There was hazardous transporter licence from

Transportation Department valid from 22.10.2009 until 22.10.2014 and hazardous central warehouse has also licence

from MoE No. 377A/2009 valid from 9.7.2009 until 2014. The monitoring of waste water quality, and emissions

complied to applicable regulation and reported in RKL-RPL report every six month and submitted to the Environmental

Agency of Belitung Timur Regency, Bangka Belitung Province.



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

SMM use fibre and shells used as energy source in the mill. Electrical energy comes from turbine (bio fuel) while fossil foil use for generator (diesel) only for back up to generate electricity when the main turbine at mill and public electricity for all estates is shut down. SMM also use fossil fuel for vehicles both in mill and estates. Records of energy used consist of fibre and shells used as renewable energy and fossil fuel as “Laporan Penggunaan Fibre Shell and Fossil Fuel”. The records was maintained properly and monitored in the manager‟s Monthly Report on the mill. During 2012 the use of fibres was 38,486 ton (70.5 %), while use of shelsl was 16,167 ton (29.5%). Until September 2013 the use of fibres was 24,450 ton (80,1%), while the use of shells was 6,076 ton (19.9%).


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 practice.

The use of fire with any reason is strictly prohibited, such as activities in land preparation of new developments and replanting. under RSPO policy and procedure according to the policy was SOP Agronomi SOP-OPR-003 SOP Land Clearing with Zero Burning Technique. Zero burning policy is also stated in contractor‟sagreement, SOP-EHS-006 of Fire Handling , and SOP-SAF-006 SOP of Emergency Action Plan and were well implemented. The wastes that are generated by mill and plantations activities are treated properly. A notable achievement has been made for the elimination of fire for disposal of garden waste and packaging materials at housing. The company has installed fire protection systems and training for preparedness in fighting fire at all estates and other infrastructure. The analysis and maps of critical land was recorded as report, namely “Analisis Tingkat Kerawanan Kebakaran Lahan”, “Peta Tingkat Kerawanan Kebakaran Lahan”,and “Daftar Sarana dan Prasarana Penanggulangan Kebakaran Lahan” which available at all plantations. Siren or emergency alarm for getting attention and help during emergency was available and checked regularly. Simulation of fire drill was held on March 29, 2013 in Balok Estate.

SMM has implemented zero burning policy in their concession area, but SMM can not prevent or prohibit people who clear land by burning because it is a habit and no decisive action from the government. During annual surveillance assessement 3, it was reported that the local community will conduct land clearing by burning the land near to Block 183 Division 7, the company anticipates the land burning by monitoring the process of land clearing by a team of security and fire fighting and provide proper equipments such as water tanker.

During annual surveillance assessement 3, the auditor team has checked to confirm zero burning policy is well implemented as in land clearing process for plasma farmers in 2013, but there were obviously evidence of former land-burning in the communities‟ land next to the smallholder area. The auditor team raised OFI as below:

The partnership agreement should be including that the requirements of public land to be handed over is not derived from the former shifting cultivation and land burning.

A clear barrier between land partnerships with community land should be given and farmers partners should also be involved for fire patrol to prevent land burning.

SMM has made corrective action for this OFI by adding a clause in the partnership agreement regarding this issue.

Compliance Status : Comply with observation.

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

SMM has identified pollution and emission sources, which comes mainly from boilers, generator sets and motor vehicles . Air pollution measurement was conducted by external independent laboratory reported as “Laporan Hasil uji emisi sumber tidak bergerak, kualitas udara lingkungan kerja & emisi sumber bergerak” (Air Emission Monitoring Report ). SMM has a pollution and emission reduction program in which is prohibited the burning of EFB and domestic wastes in the mill, estates and housing complex .


Audit Report

Form Title

Revision No..

Effective Date

Page

: FRSPO-TNI-05

: 1

: 04.01.2011

: 21 of 38


Since the palm oil mill is not one of the industries mentioned in Environmental Ministry Decree (KepmenLH) No. 13/1995 section 2 article 1, thus it is not an obligatory to install smoke density monitoring and recorder control equipment. But the mill is obliged to monitor the emission parameters in accordance with the regulations twice a year as per Environmental Ministry Regulation (PermenLH) No. 7/2007 section 6b.

The parameters tested for boiler are SO2, NO.2, H2S, particulate, etc. as per the Ministry of Environment Indonesia regulation “Peraturan Menteri Lingkungan Hidup No. 07/2007”. The average of 2 (two) times measurements in 2013 showed that all parameters were under controlled.

For Genset emission was tested against KepmenLH No. Kep-13/MENLH/3/1995, where the average result in 2012 was comply with the standards

Ambience air quality monitoring result showed no parameters above standard as per Government Regulation (Peraturan Pemerintah RI/PP RI) No. 41/1999.

A procedure to treat POME has been established and the records of monitoring POME are kept properly and were sighted.. POME are processed through 8 series of settling ponds where anaerobic bacteria was used to digest wastes and reduce BOD. The treated effluent was applied to the field in flat beds and ready to use as land application. Usage of POME for land applicatiion was aimed at reducing the use of inorganic fertilizers.

The prevention of pollution is a part of the SMM Management Policies on health & safety; and environment. Monitoring and measurement on emission parameters are planned and implemented in accordance with emission regulation. On 12 monthly basis, the emission of boiler and vehicle for transportation of FFB are tested by external independent laboratory. Results of emissions are reported to environment manager to ensure that necessary actions are taken. The result of emission monitoring and management is also reported to the local Environment Agency (Bapedalda) as part of RKL-RPL (Environment Management and Monitoring) Semester Report.

SMM has program to reduce GHG emission as a project of Austindo Aufwind New Energy (AANE), is a joint venture established by PT ANJ Agri (Indonesia) and Aufwind New Energy GmbH (Germany). Main process of the Biogas Plant is to collect the gas emission resulted from the anaerobic decomposition of Palm Oil liquid waste processing and increase the efficiency of anaerobic treatment process so that it produces gas more stable and optimal. In natural conditions this methane gas is emitted from wastewater treatment processes using open ponds. The final product of this facility is Biogas (+ 60% mixture of methane (CH4), + 35% carbon dioxide (CO2) and other gas mixture). Simple hydrocarbon methane is a flammable gas which is also listed as Greenhouse Gas (GHG) within the framework of Clean Development Mechanism (CDM) of the UNFCCC (United Nations Framework Convention for Climate Change)

Economic benefits of the Biogas Plant are :

•Methane capture this process will significantly reduce Greenhouse Gas emissions (GHG) that allows the Company has obtained the Certified Emission Reduction (CER) in the CDM process. From this facility, the estimated annual CER potential of more than 30 000 tCO2e (tonnes of CO2 equivalent) with an economic value between 13-17 USD per tonne of CER.

•Biogas is a combustible mixture with a calorific value + 6 kwh per cubic meter. With the utilization of using Gas Engine Generator can produce approximately 2 kWh per cubic meter of Biogas. Technically Biogas generated from the facility in PT SMM has the potential to generate power between 700 kW to 1.3 MW. And in accordance with the regulations of Renewable Energy power plant under 10 MW, the price of electricity sales shall get the incentives as part of the government's commitment towards the development and use of renewable energy.

During the annual surveillance assessment 3, two of the existing waste pond have been modified with the construction process for Biogas Plant. Geomembrane and double membrane air pressured cover have been installed to capture methane generated at the same time as the gas storage dome, and fermentation can be optimized with the agitation system.

Auditor checked and verified that all waste water, hazardous waste, and emissions complied to applicable regulation and reported in RKL-RPL report every six month and submitted to the Environmental Agency of East Belitung Regency, Bangka Belitung Province.


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.

SMM and estates have established the social impact assessment report integrated in the Environmental Impact

Assessment (AMDAL/RKL-RPL) issued by Bangka Belitung Province No.188.44/504/Bapedalda / 2002 on

Environmental Feasibility Activities Oil Palm and Rubber and Palm Oil Factory for PT SMM, dated December 13, 2002.

There was not many information about social impact assessment for estates and mill in this assessment. The social

impact assessment noted the positive impacts on activities related to labour vacancy and increase in community

wages. The data on social and economic analysis and impacts were collected through questionnaire surveys. There

were records of Corporate Social Responsibility (CSR) activities for year 2012-2013. The program covered such as

training on best practices for palm oil to farmer and smallholder, contribution given to community, such as road repair,

school contribution. Social impact of company was discussed during stakeholder meeting on October 13, 2013, and

matters of concerned were discussed in detail in section 3.3 of this report.


Criterion 6.2

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


Audit Report

Form Title

Revision No..

Effective Date

Page

: FRSPO-TNI-05

: 1

: 04.01.2011

: 22 of 38


SMM has an effective communication and consultation procedure with smallholders and its local communities.

through procedure Penanganan Komunikasi Stakeholder, Stakeholder Communication Procedure (PRS-SDV-006)

rev.01, 01.12.09, and Prosedur Stakeholder Meeting, (PRS-SDV-007) held by Community Relation Officer.

Consultation with stakeholders is done at least yearly . PT SMM has prepared a system on how to provide adequate

information to other stakeholders on environmental, social and legal issues relevant to RSPO,. Record of stakeholder

list and minutes of stakeholder meeting was available. SMM has assigned External Affair Manager, Mr. Hendri Tjen,

as as relation officer who responsible for consulting and communicating with local communities Mr. Hendri Tjen to

communicate with stakeholders.

Auditor team assessed the implementation of this procedure and found that all information received from related

parties and its responses was performed in Rekaman Penerimaan Informasi dan Tanggapan Stakeholder, Record of

Information Request and Respond. The records contain information of date, name, organization, information

requested, action taken to request , person in charge whom follow up or, and other references i.e. letter. A list of SMM

stakeholders includes the local communities, NGOs, labour union, contractors and local government. The public

consultation meeting is done at least yearly, in 2013 there were three public consultation meetings conducted. First on

June 7, 2013 in Balok Estate, the second was on June 14, 2013 in Ladang Jaya Estate, and the latest on June 21,

2013 in Air Ruak Estate. Auditor team also conducted stakeholder meeting on October 9, 2013 to verify the

implementation of the procedure and to get feedback from stakeholders.


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.

PT SMM has procedure and mechanism on how to handle disputes, noted in memorandum No.

022/HR&GA/CP/Perbedaan Pendapat/06-09. This policy has mechanism for difficult-to- resolve conflicts whereby such

cases would be brought to courts for legal judgements. The policy has been socialized to internal and external

stakeholders.

All information received from related parties and its responses was performed in Rekaman Penerimaan Informasi dan

Tanggapan Stakeholder, Record of Information Request and Respond.These records were maintained for at least five

years. The policy was covered purpose of the policy, definition, record‟s handling procedure, report, etc. The procedure

to deal with the disputes (if any) indicated that in case of disputes is not resolved by two parties, the court will be used

to find the solution. For the receiving external complaints and grievances, complaints box is used to receive the

complaints and grievances. Currently, there are no complaints from either stakeholder or their employee so far. To

ensure that the stakeholder and employee have the right to give the complaints and grievances, the procedures have

been communicated to all stakeholders at each mill and estate. It was noted that the responses from stakeholders

have been positive. Based on the public consultation meeting at Jangkang estate office dated on October, 2013 auditor

found that there were no evidence of disputes and complaints raised by stakeholder and communities


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

PT SMM has a policy on compensation for loss of legal or customary rights. The compensation mechanism indicated

in Company‟s policy of Land Compensation No.021/HR & GP/CP/Pembebasan Lahan/06-09, dated June 1, 2009,

which was signed by Managing Director has been communicated to stakeholders through the public consultation

meeting. Details of compensation settlement and records of land compensation was available and signed by both

parties on March 2, 2005 and all of the compensation was paid on March 4, 2005. All records are kept properly, and

audit team checked on Surat Ganti Rugi Tanah, Surat Perjanjian Ganti Rugi Tanah, Bukti Pembayaran Ganti Rugi

Within the annual surveillance assessment 3, there was no new compensation has been installed. Based on public

consultation with stakeholders held on October 2013, auditor found that the stakeholders were aware and understood

the content of the procedure. There was no conflict between SMM and local community, eventhough there were 100

Ha of SMM consession area in Ladang Jaya Estate were planted by local community, SMM has no attempt to make

compensation for the land which is located in the concession area, since they didn‟t want their land to be compensated.

SMM plans to propose a revision of the HGU license when validity period expires, in order they don‟t have to pay

excess land taxes.


Criterion 6.5

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

The UMP (Provincial Minimum Wage) of Bangka-Belitung in 2013 amounted to IDR 1,622,4 000. This determination

has been approved by Decree (SK) Governor Number 188.44/792/TKP/2012 since 30 November 2012. SMM set the

salary based on the UMP, which consists of basic wage and allowance. Terms of wages and allowance set in the

Working agreement 2011-2013, Article 21. Pay rates including working time, overtime pay terms are included in work


Audit Report

Form Title

Revision No..

Effective Date

Page

: FRSPO-TNI-05

: 1

: 04.01.2011

: 23 of 38


contract (Perjanjian Kerja Bersama - PKB). Pay rates are based on Undang-Undang No.32 Year 2004 and Workers

Union Agreement and, audit team checked on List of Worker‟s Salary in 2013, Worker‟s Contract Agreement, and

payment of worker insurance.

Payment records showed that the workers are receiving more than the minimum wage. Payment records are signed by

the workers to acknowledge receiving the payment in full and understand the calculation. Interview with workers

confirmed that they understand the pay rate and the payment was on time and never delay. However, for contractor‟s

worker, the auditor team found that:

No clauses that specify contractor‟s obligation to abide the labor laws (Labor Act RI No. 13/2003) within the contract

with local contractor.

A Minor non conformity was raised. (See NCR-SMM-08). Both correction and corrective action has been submitted,


Company provides housing for each family, water supply, electricity supply, medical facility, bus stop, school buses,

church, mosque, kindergarten, sports activities, separated domestic waste collection, and other general social

facililities. However, during annual surveillance assessment 3 the auditor team found that :

a. Regarding water supply for employee housing :

Water quality testing of reservoirs for employees housing at Air Ruak Estate, Sari Bunga Estate, Ladang Jaya

Estate, Jangkang Estate and Jangkang Mill have not all refer to Permenkes 416/1990 on the terms of inorganic

chemical parameters, for example: As, Hg, Cd, Cr, Pb, Se and microbiological parameter E.coli.

Total coliform test results of water reservoirs at Balok Estate in July 2013 was 130 colonies / 100 ml, exceeding the

maximum standard of 50 colonies/100 ml, but no corrective action was performed.

Water quality testing for Pagu spring at Jangkang Estate and Nyatoh spring at Ladang Jaya Estate have not done

yet while the water from the springs are distributed to the employees housing.

b. Regarding health/ medical facility:

LJE midwife does not have HIPERKES certificate. This does not comply with Permenakertrans No. 01/1979.

No Clinic License can be shown for LJE clinic. This does not comply withPermenkes No. 28/2011.

A midwife has an authority to prescribe a hard drug without residence doctor approval. No mechanism available.

Medical equipment (scissor, etc.) have not been sterilized yet after-used.

A mortar was found in dirty condition. It was not directly cleaned after-used




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.

SMM has an agreement with the workers and management staff to allow them to establish a labour union in

accordance with national legislation UU No. 13/ 2003. However, only non-staff employees can be Union officers to

obviate any conflict of interest. The Union and management of SMM negotiate the Perjanjian Kerja Bersama, or

Mutual Working Agreement regularly. Union Worker also provided with the facility of room/ building and furniture. The

minutes of some meetings were checked.


Criterion 6.7

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

List of historical workers was checked during surveillance assessment and found it comply. .All information of the

workers that they have being working at the mill and the estates 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 estate. Checking the records of the last recruitment and interviews with employees confirmed that no one

under 18 years old has been employed - in compliance with Indonesian national legislation UU RI No. 13 Tahun 2003,

article 68 . The oldest worker during the last recruitment was 20 years.


Criterion 6.8 Any form of discrimination based on race, caste, national origin, religion, disability, gender, sexual orientation,

union membership, political affiliation, or age, is prohibited.

PT SMM has a policy based on Undang-Undang no. 13 tahun 2003 tentang Tenaga Kerja (Act no 13/2003 about Labour) about equal opportunities for each mill and estates, which publicly published on 27 July 2012 about an equal opportunity employer with promotion mainly based on merit, documented in Decree of Working Agreement


Audit Report

Form Title

Revision No..

Effective Date

Page

: FRSPO-TNI-05

: 1

: 04.01.2011

: 24 of 38


(Penetapan Perjanjian Kerja Bersama) as per Kep Men No. KEP.48/MEN/IV/2004 tahun 2011 to 2013. This policy was socialized to either worker or contractor. The personal department located in SMM has responsible to identify and recommend candidates for promotion.

Job vacancies are posted on notice boards of SMM and estates when new face employee is needed and documented in Procedure of Employee Recruitment/Appointment/Promotion/Demotion (SOP Pedoman Penerimaan/ Pegangkatan/Promosi/Demosi Karyawan) No. 013/HR & GA/CP/07-2007). It was observed that the details of job vacancies posted in the notice boards indicated only position that is looking for, basic qualification either education background and working experience. There were no any words to lead for discrimination posted in the notice board such as gender, religion and nationality. It was also observed that some position hold both by female and male in the mill and estates such as assistant estate manager, environmental officer and sprayers for example.


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.

SMM and all estates have a policy on prevention of sexual harassment displayed at various locations in mill and estates. Policy on sexual harassment was in Internal memorandum of General Manager No. 043/GM/rf/06-2009 about Guest List Book And Procedure Of Handling Of Sexual Harassment And Violence dated June 23, 2009. was well informed to all workers, management levels and communicated to stakeholders. Record of this meeting was kept and retrievable in the appropriate place. There is a gender committee to prevent sexual harassment which established through the General Manager‟s letter No. 001/SK/GM/06-2009 date 23.06.2009. The committee has regular meeting between its member. There was training of the sexual harassment prevention and records of the training was kept and maintained. Based on the result of interview women employees, it confirmed that that they understood the policy and knew the grievance mechanism for complaints such as go to any members of gender committee

Female employees are entitled to pregnant and childbirth leave of 3 months for each instance and also allowed to breastfeed for up to 6 months at least 30 minutes everyday, as stated in PKB (Working Ageement ) article 20. Other than the „PKB‟, SMM has an Internal memo ref. no. 041/GM/srs/06-2009 to protect the reproductive right from General Manager to all estate and mill managers. Through this internal memo, the GM gives an instruction not to put a pregnant/breastfeeding woman in a spraying/chemicals group Records of maternal leave and menstruation leave are available, for examples :

Jamila from Division 02 took mestruation leave on 08 to 09 October 2013 with reference letter from policlinic.

Ika N was pregnant and just delivered the baby. Record showed that she received first period of pregnancy leave from Sept 3, 2013 until Oct 18, 2013, and received a laboring leave from Oct 07, 2013 until Nov 11, 2013.


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

SMM commited to establish fair, legal and transparent agreements with its suppliers / contractors and independent smallholders/ outgrowers. There are transactions and purchase contracts with contractors and local companies on sale and purchase of FFB, FFB transport and service, maintenance and repair of mill equipment. The price for FFB is determined by the Head of Regional Plantation Section, Agriculture Department of Province Bangka Belitung via a mechanism based on the CPO price, kernel price (index K) from all palm oil producers and palm oil estates in North Sumatra. Interviews with some contractors confirmed that they understood the terms of their contracts well and thought them fair, legal and transparent and found no grievance about the price.

However, payment to contractors and independent smallholders have not always been on time as inspected by auditor : 3 out of 7 payments that had been done to “Koperasi Bumi Makmur” in 2013 were late. In the contract, it has been agreed that the payment will be done no longer than date 20th, i.e. for Feb 2013 payment was received in March 26, for Mar 2013 payment was received in Apr 24, and for Jul 2013 payment was received in Aug 23, 2013.



Compliance status : Close, after correction and corrective action.

Criterion 6.11 Grower and mills contribute to local sustainable development wherever appropriate.

The SMM management has strong commitment to contribute to community development and documented in Policy

of Corporate Social Responsibility which covers Business Ethique Realization Human Resource Policy, Fair Practice,

Occupational Health and Safety, Environmental Policy, is available, dated December 1, 2009 and signed by Mr. Philip

Liu as working Head of Operations. Program for CSR Activity on 2012 and 2013 were availbale. The activities planned

were varied, such as socialization of shareholders program for the locals, aids for local teachers, free medical treatment

for the locals, making a well for locals, etc.

Example of contribution of SMM :

1. Tax of surface water usage

2. Land & Building tax

3. CSR program report such as :

Provide road maintenance for villages closed to plantations using company‟s grader machines


Audit Report

Form Title

Revision No..

Effective Date

Page

: FRSPO-TNI-05

: 1

: 04.01.2011

: 25 of 38


Provide transportation (school bus) and education facilities to play groups, elementary school, junior and senior high school for employees and communities around estates and mill

Provide and improve health facilities for villages closed to plantations.

Provide maintenanance and developing religious building (Mosque, mushalla, church)

Charity to local community on festival days, such as festival day of Idul Fitri and Idul Adha. Develop schemed smallhoder outside concession area. Eventhough SIUP (Plantation Business Permit ) of

SMM has been obtained before the regulation regarding plasma issued as stated in Peraturan Menteri Pertanian Number 26 year 2007, SMM has develop schemed smallholder as part of CSR.

Records of CSR were properly maintained.


Criterion7.0

No new planting planned on any estate included in the scope of this assessment.

Principle 7 is not applicable to this assessment, since no new planting.

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

SMM has committed to a process of continuous improvement by adopting the RSPO P & C and managment system

such as SMK# and ISO 14001. An internal audit and management review is done at least yearly to evaluate the

systems. Action plans have been developed for the next one to three years for continual improvement in key

operations through quality objectives for the mill and also can be implemented in estates, such as reducing fossil fuel

consumption, reducing usage of agrochemicals and no paraquat used since 2010. Concerning prevention of emission

by releasing of carbon emission to environment generated from palm estate and methane capture and transformed into

electricity.


3.2. Identified Non Conformances and Noteworthy positive components.

This section gives an over view of new or revised non-conformities raised during this assessment and of

action taken to close out non-conformities rose during the previous assessments.

3.2.1. Detail of Non Conformity.

All raised non conformities are summarized and attached in Appendix 3 Summary of Non-Conformity Report (NCR).


Audit Report

Form Title

Revision No..

Effective Date

Page

: FRSPO-TNI-05

: 1

: 04.01.2011

: 26 of 38


3.2.2 Resume of Audit Results.

Table 3-2 Resume of Audit Results

P&C 1.1 1.2 2.1 2.2 2.3 3.1 4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8 5.1 5.2 5.3 5.4 5.5 5.6 6.1 6.2 6.3 6.4 6.5 6.7 6.8 6.9 6.10 6.11 7 8.1

Status

3 1 3 1 1 1 1 1 1 1 2 2 2 1 1 1 1 1 1 1 1 1 1 1 2 1 1 1 2 1 NA

1

#NC 1 0 1 1 0 0 0 0 0 0 1 1 3 0 0 0 0 0 0 0 0 0 0 0 2 0 0 0 1 0 - 0

RSPO Supply Chain Certification Standard: Module E – Mass Balance

SCC 1.1 a 1.1 b 1.2 2.1 2.2 3.1 3.2 3.3 a 3.3 b 3.3 c 3.4 4.1 5.1 6.1

Status

1 1 1 1 1 1 1 1 1 1 1 1 1 1

#NC 0 0 0 0 0 0 0 0 0 0 0 0 0 0

NO.TE: Audited: “1” Conforming; “2” Minor Non-Conformity; “3” Major Non-Conformity; “NA” Not applicable, “#NC” : Number of Non-Conformities found

AUDIT OUTCOME

P&C audit, 2 Non-Conformities MAJOR

8 Non-Conformities MINOR

SCC audit

3.3module E 0 Non-Conformities MAJOR


Audit Report

Form Title

Revision No..

Effective Date

Page

: FRSPO-TNI-05

: 1

: 04.01.2011

: 27 of 38


3.3 Status of non-conformities (both minor and major) previously identified

NCR from Certification Assessment :

1. Operational lisence certificate for Mr. Hamnan and Mr. Budiman who operate a forklift, both are expired, while for Mr. Rudi Hartono who operate a bechoe loader (BL03) do not have operational lisence certificate by the time of this assessment was carried. No monitoring system to ensure the validity of operational lisence certificate of worker (P & C 2.1MJ). The effectiveness of corrective action has been verified by auditor. Closed, for this case..

2. The records of training, which were randomly checked for three (3) new employed harvesters within division I at the late of 2011, were not available. (P & C 4.8 MJ). The effectiveness of corrective action has been verified by auditor. Closed.

3. The social impact assessment was performed as integrated part with environmental impact assessment. However there is no regular monitoring and management of social impact so far. (P &C 6.1 MN). The effectiveness of corrective action has been verified by auditor. Closed.

a. Issues Raised by Stakeholders

During annual surveillance assessment 3 the Assesor team also conduct Public consultation with stakeholders in Jangkang Office on October 9 2013 and also by interviewing in personal with employees, contractors, labour union, gender representative, or village chiefs near the plantation and reviewed againts previous minute meetings of Stakeholders conducted by SMM. Subjects discussed during the interview with stakeholders were:

1. Knowledge of RSPO;

2. Benefits of the existence of palm oil plantation on the community;

3. Problems experienced related to the presence / activities of the plantation;

4. The solution to address the problems that occur.

The results of interview with stakeholders are as follows:

1. In general, mostly stakeholders were briefed on issues regarding RSPO, though their understandings were observed to be variable. Participants who were relatively more aware of RSPO were mainly participants living close to plantations, such as labor union, the village chief, and thecommunity leader. They knew this RSPO information from the management/ staff during the socialization of RSPO.

2. Mosty the stakeholders interviewed stated that the existence of oil palm plantation has provided benefits to society. The perceived benefits include:

a. Provision of employment, both directly related to maintenance activities and the cultivation of oil palm. Indirectly through partnership such as procurement of equipment, workmanship maintenance of facilities (roads, bridges, building / office). It is also recognized by the representatives of the Social Service and the local Labor.

b. Improved local economy, especially felt by contractor who supply FFB or other services. Indicators of economic improvement, among others, the condition of the residential houses, ownership of motor vehicles, both motorcycles and cars. Currently almost all owners of plasmas have motorcycles, and quite a number of them own cars. Another indicator is many children can afford to attend school.

c. Improving the economic prosperity and status of the community.

d. Corporate Social Responsibility (CSR) Program

Improvement of road infrastructure.

Improvement of the health service.

Improvement of education.

Contributions for celebrating the national and religious festivals or other grand activities. The company provides assistance in cash or in kind for religious activities (Eid al-Fitr, Eid al-Adha) and national holidays (Independence Day). Assistance is generally provided based on public requests through proposals.

Develop schemed smallhoder outside concession area eventhough SIUP (Plantation

Business Permit ) of SMM has been obtained before the regulation regarding plasma issued

as stated in Peraturan Menteri Pertanian Number 26 year 2007.

The progress of schemed smallholder as per September 2013 as interviewed with stakeholders:


Audit Report

Form Title

Revision No..

Effective Date

Page

: FRSPO-TNI-05

: 1

: 04.01.2011

: 28 of 38


In Simpang Pesak village and Lilangan village there were village forest that has not been opened

but including APL and free of mining permits.

Early submission land to be developed of 14 hectares (SKT) in 2011 in Dendang Village. MOU

between the two parties companies and cooperatives Mitra Lestari, without involving third party

(Bank as finacial assurance). Government provisions by Decree No. Dirjenbun. Kpts /

RC/110/6/2011 tentang Satuan Biaya Maksimum Pembangunan Kebun Peserta program

Revitalisasi Perkebunan di Lahan Kering tahun 2011, ( maximum cost unit for developing

plantation) a maximum of Rp 43,512,000 / ha (Region II: South Sumatra and Bangka Belitung).

Currently there is no agreement what the bank will be appointed.

MOU with the Simpang Pesak Village in 2012, land clearing process in 2013, while in Lilangan

village the agreement start in 2013, land clearing process in 2013.

In Simpang Pesak Village as much as 32 families, constraints : most of the community didn‟t have

KTP/ identity cards that can slow down processing of Regent Decree.

3. Problems experienced related to the presence / activities of the plantation

There was no significant issue raised during interviews with stakeholders.

4. Certified Organization’s Acknowledgement of Internal Responsibility

4.1 Date of next surveillance visit

The next surveillance assessment will be conducted within 12 month, approximately in October 2014.

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

All the minor and major nonconformities have been closed, but the effectiveness will be verified in the next surveillance audit.


Audit Report

Form Title

Revision No..

Effective Date

Page

: FRSPO-TNI-05

: 1

: 04.01.2011

: 29 of 38


4.3 Formal Sign-off of Surveillance Assessment Findings

I the undersigned, being the legal representative of the inspected company, agree with the contents of this

report and accept the liability in execution of the instructions given in the report.

Signed for and on behalf of

PT. Sahabat Mewah dan Makmur

Jakarta – December 2013

Head of Sustainability Department

(Mr.Philip Liu CK)

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

Jakarta –December 2013

Lead Auditor

(Wieke Savitri)


Audit Report

Form Title

Revision No..

Effective Date

Page

: FRSPO-TNI-05

: 1

: 04.01.2011

: 30 of 38


Appendix 1 List of Abbreviations

AMDAL Analisis Mengenai Dampak Lingkungan

(Environmental Impact Assessment)

OER Oil Extraction Rate

BOD Biological Oxygen Demand OHS Occupational Health and Safety

BPN Badan Pertanahan Nasional (National Land Body)

OHSAS Occupational Health and Safety Assessment Scheme

CPO Crude Palm Oil P&C Principle and Criteria

CSR Corporate Social Responsibility PK Palm Kernel

EFB Empty Fruit Bunch PKB Perjanjian Kerja Bersama (Collective Agreement)

EMS Environmental Management System POM Palm Oil Mill

FFB Fresh Fruit Bunch POME Palm Oil Mill Effluent

GPS Global Positioning System PPE Personal Protective Equipment

HCV High Conservation Value PT Perseroan Terbatas (Limited Company)

HGU Hak Guna Usaha (Land Right/ Land Use Title) R&D Research and Development

HIRA Hazard identification and risk assessment RKL Rencana Pengelolaan Lingkungan Hidup

(Environmental Management Plan)

IPM Integrated Pest Management RPL Rencana Pemantauan Lingkungan Hidup

(Environmental Monitoring Plan)

IUP Ijin Usaha Perkebunan (Land use permit) RSPO Roundtable on Sustainable Palm Oil

Jamsostek Jaminan Sosial Tenaga Kerja (Social Insurance for Employees)

RSPO NI

Roundtable on Sustainable Palm Oil National Interpretation

Kapospol Kepala Pos Polisi (Head of Police Station) SA8000 Social Accountability 8000

MOU Memorandum of Understanding SIA Social Impact Assessment

K3 Kesehatan dan Keselamatan Kerja

(Occupational Health and Safety)

SMM PT. Sahabat Mewah dan Makmur

KER Kernel Extraction Rate SOP Standard Operating Procedure

KUD Koperasi Unit Desa (Village Cooperatives) UKL Upaya Pengelolaan Lingkungan Hidup

(Environmental Management Effort)

MSDS Material Safety Data Sheet UPL Upaya Pemantauan Lingkungan Hidup

(Environmental Monitoring Effort)

NC Non Conformity SEL Studi Evaluasi Lingkungan

Evaluation of Environmental Study


Audit Report

Form Title

Revision No..

Effective Date

Page

: FRSPO-TNI-05

: 1

: 04.01.2011

: 31 of 38


Appendix 2. Summary of the findings for compliance with the RSPO Supply Chain Module E (Mass Balance) ver. November 2011

STANDARD SG MB RESULT

1. DOCUMENTED PROCEDURES

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

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

√ √ The SOP “PT TN-LPYM/SOP/01 Identifikasi dan Mampu Telusur is

available on site.

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

√ √ The Mill Manager, was appointed to be a person who is

responsible over SCC requirement‟s implementation.

1.2

The facility shall have documented procedures for receiving and processing certified and No.n-certified FFBs.

√ √

SOP “PT TN-LPYM/SOP/01 Weighbridge officer will be responsible

to administratively documenting the delivery order from estates to

mill.

2. PURCHASING AND GOODS IN

2.1 The facility shall verify and document the volumes of certified and No.n-certified FFBs received.

√ √

Verification will be in a form of stamp “MASS BALANCE”. But in real implementation, no stamp of mass balance availabe.

A corrective action has been submitted, verified and accepted by auditor.

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

√ √

Once there is a projected overproduction SMM has a mechanism to inform CB. The projected overproduction number will be informed directly via email to related CB‟s sales person carbon copied (cc.) to related auditor(s) and CB System Certification Manager. The projected overproduction Notification will be attached with the evidence needed to prove the ability of SMM to achieve an overproduction.

3. RECORD KEEPING

3.1

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

√ √ SOP “PT TN-LPYM/SOP/01 The records is maintained by weighbridge officer daily, monthly, as well as quarterly (3 monthly). All production data are recorded to an SAP, Systems Application Programming..


Audit Report

Form Title

Revision No..

Effective Date

Page

: FRSPO-TNI-05

: 1

: 04.01.2011

: 32 of 38



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

√ √ As SOP “PT TN-LPYM/SOP/01 , the records will be kept for 10 years.

3.3

a. The facility shall record and balance all receipts of RSPO certified FFB and deliveries of RSPO certified CPO, PKO and palm kernel meal on a three-monthly basis.

√ √ As per SOP “PT TN-LPYM/SOP/01 . Can be trace down in CPO Production Report 3 Monthly Basis

b. All volumes of palm oil and palm kernel oil that are delivered are deducted from the material accounting system according to conversion ratios stated by RSPO.

x √ As per SOP “PT TN-LPYM/SOP/01

c. The facility can only deliver Mass Balance sales from a positive stock. However, a facility is allowed to sell short.

x √ No. transaction has been made, will be verified in the next surveillance audit in 2014.

3.4 The following trade names should be used and specified in relevant documents, e.g. purchase

√ √ Actual implementation could only be verified if any transaction has been made in the next surveillance audit.

4. SALES AND GOOD OUT

4.1

The facility shall ensure that all sales invoices issued for RSPO certified products delivered include the following information: a) The name and address of the buyer; b) The date on which the invoice was issued; c) A description of the product, including the applicable supply chain model (Segregated) d) The quantity of the products delivered; e) Reference to related transport documentation.

√ √ As per SOP “PT TN-LPYM/SOP/01

5. PROCESSING

5.1

The facility shall assure and verify through clear procedures and record keeping that the RSPO certified palm oil is kept segregated from No.n-certified material including during transport and storage and be able to demonstrate that is has taken all reasonable measures to ensure that contamination is avoided. The objective is for 100 % segregated material to be reached. The systems should guarantee the minimum standard of 95 % segregated physical material9; up to 5 % contamination is allowed.

√ x N/A for Mass Balance


Audit Report

Form Title

Revision No..

Effective Date

Page

: FRSPO-TNI-05

: 1

: 04.01.2011

: 33 of 38



5.2

The facility shall provide documented proof that the RSPO certified palm oil can be traced backto only certified segregated material.


5.3

In cases where a mill outsources activities to an independent palm kernel crush, the crush still falls under the responsibility of the mill and does No.t need to be separately certified. The mill has to ensure that: ·The crush operator conforms to these requirements for segregation·The crush is covered through a signed and enforceable agreement


6. TRAINING

6.1

The facility shall provide the training for all staff as required to implement the requirements of the Supply Chain Certification Systems.

√ √

Procedure for training is described in

SOP Training Human Resources

7. CLAIMS

7.1

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

√ √

A procedure/mechanism of claim as per RSPO Rules for communication and claims are stated in the procedure of supply chain SOP “PT TN-LPYM/SOP/01 recited from RSPO Rules for Communication and Claims. The implementation will be further verified during the next surveillance audit, after the certification is approved


Audit Report

Form Title

Revision No..

Effective Date

Page

: FRSPO-TNI-05

: 1

: 04.01.2011

: 34 of 38



Audit Report

Form Title

Revision No..

Effective Date

Page

: FRSPO-TNI-05

: 1

: 04.01.2011

: 35 of 38


Appendix 3 Summary of Non-Conformity Report (NCR) P & C

A. Major Non-Conformities (NC)

Major NC:

A certificate of conformance with the RSPO Criteria cannot be issued while any major non-conformities are outstanding.

Major nonconformities raised during surveillance assessments must be addressed within 60 days, or the certificate will be suspended.

Major nonconformities not addressed within a further 60 days will result in the certificate being withdrawn.

NCR No.

Criterion No

NCR Correction Root Cause Corrective Action Conclusion

1. NCR-SMM-01

1.1 MJ1 There is no written evidence in response to a letter No. 050/80/BLK/XII/2012 from the Head of Balok Village Mrs. Liliyanti about land lease proposal for the development plans of fishing warehouse at sacred sites in the concession.

Make a response letter to Head of Balok Village

Response to Head of Balok Village only verbally.

All incoming letters must be answered in writing.

Accepted and verified.

2. NCR-SMM-02

2.1 MJ 1 a. All electricians do not have OHS Competency Certificate for Electrician. This does not comply to Kepdirjen Pembinaan Hubungan Industrial and Pengawasan Ketenagakerjaan No. Kep.311/BW/2002

b. All welders do not have welder„s certificate. This does not comply to a Decree of The Minister of Manpower and Transmigration RI No. Per02/1982.

Provide training to the welders and electricians

Lack of awareness that welders and electrician have to be certified.

Provide training to the welders and electricians

Accepted and verified


Audit Report

Form Title

Revision No..

Effective Date

Page

: FRSPO-TNI-05

: 1

: 04.01.2011

: 36 of 38


B. Minor Non-Conformities (NC)

Minor NCR: Minor nonconformities will be raised to major if they are not addressed by the following surveillance assessment

NCR No.

Criterion No

NCR Correction Root Cause Corrective Action Conclusion

3. NCR-SMM-03

4.5 MN1 a.The rat census in April 2013 showed there were rat infestation at all estates which the attack rate has exceeded the threshold 5%, while rat bait application was recently conducted in July 2013 due to lack of stock rat bait which is not comply with SOP Pengendalian Tikus dengan Rat Bait (SOP-OPR-032/ Rev1/ 20 Nov 2010. However it happened again in August 2013 that the rat cencus showed that the attack rate still exceeding the threshold, while the rat bait only applied at Ladang Jaya Estate and Sari Bunga Estate, but no application of rat bait at Balok Estate and Jangkang Estate.

b. According to SOP Pengendalian Tikus dengan Rat Bait (SOP-OPR-032/ Rev1/ 20 Nov 2010, rat bait application will be done if exceeding the threshold 5% or 10% if the block is installed with nest boxes occupied by barn owl, however, there were no reports of bird census data evaluation used as consideration for rat bait application.

Implement appropriate rat bait to applicable SOPs.

Rat bait stock available in August 2013.

Census of rat and census of barn owl in different forms.

Revise the SOP with appropriate factual conditions.

Revise the owl census form with % of rat infestation as evaluation.


4. NCR-SMM-04

4.6 MN2 Only for sprayers who have been work above five years that will be annually examined for specific health check parameter (cholinesterase). It was found that no specific medical health examination result can be shown for several sprayers in all divisions. For example, Parto (BLK div IV), Rianti, Munah and Maryani (LJE div. 8), etc. This does not comply with the Decree of The Minister of Manpower and Transmigration RI No. 3/1986 clause 7 which stated that specific health examination shall be done for all sprayers at least once in a 6 months period.

Conduct specific examination for all sprayers.

General medical examination that had been conducted in the past considered sufficient.

Establish mechanism to conduct specific medical examination to all sprayers.



Audit Report

Form Title

Revision No..

Effective Date

Page

: FRSPO-TNI-05

: 1

: 04.01.2011

: 37 of 38


5. NCR-SMM-05

4.7 MN2 No specific medical examination, i.e. Spirometri and/or Audiometri for workers who work at high risk work station (boiler station, engines room, genset room, etc

Conduct specific examination for all workers who work at high risk station.

General medical examination that had been conducted in the past considered sufficient.

Establish mechanism to conduct specific medical examination to all workers who work at high risk station.


6. NCR-SMM-06

4.7 MN4 a.The records OHS induction training for the new recruited EHS officer cannot be shown.

b.No first aid training records for harvester supervisors at Ladang Jaya Estate.

Provide OHS induction training to EHS Officer.

Provide first aid training for harvester supervisor.

No Training Need Analysis had been developed.

Make Training Need Analysis.

All new employees will be provides with OHS induction training.


7. NCR-SMM-07

4.7 MN6 a.None of harvesting workers wear safety goggles, the HIRA report did not mention the risk of accidents of injuried eyes.

b.During site visit there was construction work to replace roof at mill without installation of fall protection equipments such as warning sign and warning line surrounding the areas.

Provide appropriate safety goggles to harvesters.

OHS inspection for PPE.

HIRA report consider the risk of injured eyes were tolerable.

Lack of awareness of OHS for contractor workers.

Revise the HIRA report.

Dissemination of OHS procedures to all workers, including contractor workers.


8. NCR-SMM-08

6.5 MN1 a. Regarding water quality for employee housing :

Water quality testing of reservoirs for employees housing at Air Ruak Estate, Sari Bunga Estate, Ladang Jaya Estate, Jangkang Estate and Jangkang Mill have not all refer to Permenkes 416/1990 on the terms of inorganic chemical parameters, for example: As, Hg, Cd, Cr, Pb, Se and microbiological parameter E.coli.

Total coliform test results of water reservoirs at Balok Estate in July 2013 was 130 colonies / 100 ml, exceeding the maximum standard of 50 colonies/100 ml, but no corrective action was performed.

Water quality testing for Pagu spring at Jangkang Estate and Nyatoh spring at Ladang Jaya Estate have not done yet while the water from the springs are distributed to the employees housing

b. Regarding health facility:

LJE midwife does not have HIPERKES certificate.

a. Regarding water quality:

Reconduct water quality testing as Permenkes 416/1990 and evaluated the result.


Provide HIPERKES training for midwife.

Permit of the clinic has been filed but not yet completed.

Make consultation record with company doctor whenever if needed to give prescription of hard drugs.

Implement hygienic practices in clinic.

a.Regarding water quality :

Lack of awareness of the Permenkes 414/1990 and didn‟t concern of the result.

Taking water from Pagu spring and Nyatoh spring are not done everytime, only in the dry season.

a. Regarding health faciity:

Did not monitor the certificate of midwife and permit of clinic.

Permission of hard drug delivery is done through telephone consultation with

a.Regarding water quality :

Always conduct water quality testing as required by Permenkes 416/1990 and evaluated the result.


Always monitor the license and permit of midwife and clinic.

Develop mechanisme of hard drugs prescription during docto absence.

Always implement hygienic practices in clinic.



Audit Report

Form Title

Revision No..

Effective Date

Page

: FRSPO-TNI-05

: 1

: 04.01.2011

: 38 of 38


This does not comply with Permenakertrans No. 01/1979.

No Clinic License can be shown for LJE clinic. This does not comply withPermenkes No. 28/2011.

A midwife has an authority to prescribe a hard drug without residence doctor approval. No mechanism available.

Medical equipment (scissor, etc.) have not been sterilized yet after-used.

A mortar was found in dirty condition. It was not directly cleaned after-used

company‟s doctor but not recorded

Lack of hygiene practice.

9. NCR-SMM-09

6.5 MN2 No clauses that specify contractor‟s obligation to abide the labor laws (Labor Act RI No. 13/2003) within the contract with local contractor.

Add clausa in working contract about the employment as required in Labor Act.

Contractors were considered to have understood the Labor Act and does not specifically set out in the contract.

Make sure that the contrators understand the contents of the revised contract in accordance with Labor Act.


10. NCR-SMM-10

6.10 MN2

3 out of 7 payments that had been done to “Koperasi Bumi Makmur” in 2013 were late. In the contract, it has been agreed that the payment will be done no longer than date 20th, i.e. for Feb 2013 payment was received in March 26, for Mar 2013 payment was received in Apr 24, and for Jul 2013 payment was received in Aug 23.

Issued Internal Memo to install payment in accordance with the contract.

No monitoring of late payment.

Make sure that no late payment in accordance with the contract


rspo annual surveillance assessment3 public …107° 53' 00.2" 02° 36' 43.3"...

Documents