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PT MUTUAGUNG LESTARI Sustainable Palm Oil Certification Public Summary Report

Plantation Owner : Minamas Plantation - Sime Darby Group Plantation Name : PT TUNGGAL MITRA PLANTATION

Region and Country : Riau Province – Indonesia

Certificate Number

: MUTU-RSPO/002

Date of certificate issue : 25 November 2010

Date of expired : 25 November 2015

Assessment date

Finalization date of Report

Auditors Checked by

Pre-Assessment

09-13/02/09 3/3/2009 D.A. Novendi; E. Syntia;

Artamur; S. Nugroho; S. Rahardja

Tony Arifiarachman

Main Assessment

25-30/05/09 25/06/2009 T. Margani; D.A. Novendi;

T. Wijaya; A. Gustomo Tony Arifiarachman

Submitted to RSPO on: Reviewed by RSPO on:

CB Responds on:

Approved by RSPO on:

11/07/2009

12/01/2010 28/08/2010 06/10/2010

23/01/2010 30/08/2010 10/10/2010

25 November 2010

Mutuagung Lestari • Jl Raya Bogor Km 33.5 No.19 • Cimanggis • Depok 16953• Indonesia

Telephone (+62) (21) 8740202 • Fax (+62) (21) 87740745/6 email: [email protected] • www.mutucertification.com

MUTU Certification • Approved by RSPO Executive Board on June 2008

PT MUTUAGUNG LESTARI Sustainable Palm Oil Certification

Assessment Report

PT MUTUAGUNG LESTARI Sustainable Palm Oil Certification

Assessment Report

http://www.mutucertification.com/�

List of Contents Page 1.0 SCOPE OF CERTIFICATION 1 1.1 National Interpretation used 1 1.2 Auditee information 1 1.3 Type of Assessment 1 1.4 Locations of mill and estates and area statement 1 1.5 Description of Supply Base 2 1.6 Years of Crop Planting and Palm Age Profiles 2 1.7 Volumes of CPO and PK claimed for certification 6 1.8 Other Certifications Held 6 1.9 Time-Bound Plan for Certification of Other Management Units 6 2.0 ASSESSMENT PROCESS 8 2.1 Background of Certification Body 8 2.2 Qualifications of Lead Assessor and Assessor Team 8 2.3 Assessment Methodology 10 2.4 Stakeholder Consultation and List of Stakeholders Contacted 13 2.5 Date of Next Surveillance Visit 14 3.0 ASSESSMENT FINDINGS 15 3.1 Summary of Non Conformances, Corrective Actions taken and Comments by CB 15 3.2 Summary of main issues raised by stakeholders, auditee’s responses and assessor findings 19 4.0 AUDITEE’s ACKNOWLEDGEMENT OF INTERNAL RESPONSIBILITY 21 4.1 Formal sign-off of assessment findings ANNEXES 1 Checklist of RSPO P&C for Certification Assessment on PT TUNGGAL MITRA

PLANTATION 22 2 Mutuagung Peer Reviewer’s Report 47 3 Results of RSPO Panel Committee of Mutuagung Lestari 50 4 List of stakeholders consulted 51 MAPS Figure 1 Location of PT Tunggal Mitra Plantation (TMP) 3 Figure 2 Distribution of Crop by Age in 2009 4 Figure 3 Soil Map of TMP 5 TABLES Table 1 Age Profile of palms 2 Table 2 Time-Bound Plan To Certify Remaining Management Units 6 Table 3 CSR Program of TMP 38 Table 4 The Completeness of land conflict resolution during 1990-1999 40

Prepared by Mutuagung Lestari for Tunggal Mitra Plantation 1

1.0 SCOPE OF CERTIFICATION 1.1 National Interpretation used

Principles and Criteria for Sustainable Palm Oil Production. Issued by RSPO Indonesia - National Interpretation Working Group (RSPO INA-NIWG) on May 2008.

1.2 Background of auditee 1.2.1 Name SIME DARBY 1.2.2 Contact person Mohamad Pirabaharan 1.2.3 Address

The Plaza, 36th Floor, Jl. M. H. Thamrin Kav. 28-30, Jakarta 10350 Indonesia

1.2.4 Telephone +62-21-29922650 1.2.5 Fax +62-21-5711652 1.2.6 e-mail [email protected] 1.2.7 Website www.simedarby.com 1.2.8 Type of enterprise Private limited company 1.2.9 Authorised person requesting

certification Mohamad Pirabaharan (Head of TQEM Plantation)

1.2.10 RSPO Member registered September 8th, 2004 1.2.11 Number of staff employed 1,480 1.3 Type of Assessment 1.3.1 What is audited One management unit of palm oil mill and three estates

supplying FFB for processing 1.3.2 Type of certificate Single 1.3.3 Name of management unit audited PT Tunggal Mitra Plantation 1.3.4 Details of management unit One palm oil mill and three estates supplying FFB –

Manggala 1 (MGE 1), Manggala 2 (MGE 2) and Manggala 3 (MGE 3).

1.4 Locations of mill and estates and area statement 1.4.1 Locations of plantations Latitude 1º 40' - 1º 30' N Longitude 100º 35' - 100º 45' E 1.4.2 Location of mill Latitude 1º 31'00.79' - 1º 31'04.32" N Longitude 100º 43'58.90" - 100º 43'5.78" E 1.4.3 Maps See Figures 1 – 3 1.4.4 Country Indonesia 1.4.5 Region Riau 1.4.6 Village/Sub District/District Pujud, Rokan Hilir 1.4.7 Land ownership State land alienated to PT Tunggal Mitra Plantation on 35

years renewable lease. Private (area in hectares) 0 State (area in hectares) 13,836 Community (area in hectares) 0

mailto:[email protected]�

http://www.simedarby.com/�


1.6 Date of planting of palms 1.6.1 Age profile of palms

Table 1. Age Profile of palms

1.5 Description of Supply Base 1.5.1 Total area (hectares) 13,836 1.5.2 Protected area (hectares) - 1.5.3 High Conservation Value areas

(hectares)

-

1.5.4 Non-oil palm use (hectares) 2,874 1.5.5 Net oil palm area (hectares) 10,962 1.5.6 Mature oil palm (hectares) 10,853 1.5.7 Products FFB (Fresh Fruit Bunches) 1.5.8 Average annual yield, 2004 - 2008

(simple average of three estates) (t/ha)

20.04

Manggala 1 (MGE-1) 21.17 Manggala 2 (MGE-2) 20.69 Manggala 3 (MGE-3) 18.25 1.5.9 Yield in 2008 (simple average of

three estates) (t/ha) 21.45

Manggala 1 (MGE-1) 21.81 Manggala 2 (MGE-2) 22.59 Manggala 3 (MGE-3) 19.96

MGE-01 MGE-02 MGE-03 Estate/

Planting Year

Area (ha) 3,730

Age (Years)

Estate/ Planting

Year

Area (ha) 3,641

Age (Years)

Estate/ Planting

Year

Area (ha) 3,591

Age (Years)

1990 993 19 1991 160 18 1989 134 20 1991 637 18 1992 1513 17 1990 969 19 1992 1,499 17 1993 108 16 1991 794 18 1993 157 16 1994 305 15 1992 434 17 1994 261 15 1995 111 14 1993 797 16 1995 93 14 1996 38 13 1994 93 15 1996 8 13 1997 328 12 1995 38 14 1997 67 12 1998 285 11 1996 13 13 1998 15 11 1999 246 10 1997 118 12

Average 17.32 2000 323 9 1998 151 11 2001 33 8 2000 50 9

2002 12 7 Average 17.02 2003 70 6 2004 49 5 2006 60 3

Average 13.89


Figure 1. Locations of PT Tunggal Mitra Plantations (TMP) on Sumatra Island.

Country

INDONESIA

Land ownership

Government land leased to PT Tunggal Mitra Plantation

Province Riau Private 0 ha Sub-District/District Pujud /Rokan Hilir Government 13,836 ha

Community 0 ha

1. MG1 - Pekanbaru = 250KM2. MG1 - Dumai = 112KM3. MG1 - Duri = 110KM4. MG1 - Baganbatu = 63KM5. MG1 - Medan = 464KM6. Main Office MG1-MG2 = 11KM7. Main Office MG1-MG3 = 2,5KM8. Main Office MG2-MG3 = 13,5KM9. MG1 - ADE = 62KM

Travel Distance:


Figure 2. Age profile of palms in PT Tunggal Mitra Plantation, 2009


Figure 3. Soil Map of PT Tunggal Mitra Plantation as at MGE-1, MGE-2, and MGE-3.

Peat Mineral


1.6.2 Area replanted after 2004 60 ha 1.6.3 New planting after 2004 0 1.6.4 Harvesting Cycle 7 days 1.7 Volumes claimed for certification Oil extraction rate 23,75% FFB (tonnes/year) 241,128 CPO (tonnes/year) 57,268 PK (tonnes/year) 11,723 1.8 Other certifications held 1.8.1 ISO 9001:2008/ISO 14001: 2004 None 1.8.2 OHSAS 18001:2007 None 1.8.3 HACCP None 1.8.4 Others None 1.9 Time-bound plan to certify remaining management units SIME DARBY has committed to the time bound plan for both challenging and realistic regarding their all management units of palm oil for achieving certification (submitted and stated by Sime Darby). And the Assessor team considered this plan in accordance with the RSPO requirements for Partial Certification as mentioned in the RSPO Certification System Document, June 2007, section 4.2.4. The progress will be verified and reported on the next surveillance visits. Table 2. Time-Bound Plan To Certify Remaining Management Units TIME-BOUND PLAN FOR CERTIFYING OTHER

OPERATING UNITS

SOU

Certification Body

2008 (January – June)

1. SOU 28 Binuang (Certified) 2. SOU 29 Giram (Certified) 3. SOU 30 Merotai (Certified) 4. SOU 30b Mostyn (Certified) 5. SOU 26 Sandakan Bay (Certified)

SIRIM SIRIM SIRIM SIRIM BSI

2008 (July – December)

6. SOU 14 Tanah Merah 7. SOU 16 Kempas 8. SOU PT SIA (Indonesia)

BSI SIRIM BSI


32 SOUs in Malaysia 2 SOUs in Indonesia

Control Union, BSI, SGS & Moody. Mutuagung

2010 (January – December)

6 SOUs in Indonesia To be identified

2011 (January – December)





1.9.1 Sime Darby plantations in Indonesia yet to be certified

Name of Management Unit Location Hectares Time Bound Plan

PT Tunggal Mitra Plantation District Rokan Hilir - Riau 13,836 2009 PT Indotruba Tengah District Seruyan – Central

Kalimantan 7,735 2009

PT Kridatama Lancar District Seruyan – Central Kalimantan

14,780 2010

PT Teguh Sempurna District Kota Waringin Timur and Seruyan – Central Kalimantan

16,602 2010

PT Ladangrumpun Suburabadi District Tanah Bumbu – South Kalimantan

6,082 2010

PT Sajang Heulang District Tanah Bumbu – South Kalimantan

7,794 2010

PT Bersama Sejahtera Sakti District Kotabaru – South Kalimantan

13,925 2010

PT Lahan Tani Sakti District Rokan Hilir – Riau 3,759 2010 PT Aneka Intipersada District Siak, Pekan Baru – Riau 11,612 2011 PT Bhumireksa Nusasejati District Indragiri Hilir – Riau 25,731 2011 PT Bina Sains Cemerlang District Musi Rawas –

South Sumatera 7,052 2011

PT Bahari Gembira Ria District Muaro Jambi – Jambi 4,000 2011 PT Tamaco Graha Krida District Morowali – Central Sulawesi 4,712 2011 PT Laguna Mandiri District Kota Baru –

South Kalimantan 15,300

2011

PT Swadaya Andika District Kota Baru – South Kalimantan

10,429 2011

PT Langgeng Muaramakmur District Kota Baru – South Kalimantan

14,328 2012

PT Paripurna Swakarsa District Kota Baru – South Kalimantan

16,428 2012

PT Padang Palma Permai District Aceh Tamiang – Nangroe Aceh Darusalam

2,581 2012

PT Perkasa Subursakti District Aceh Tamiang – Nangroe Aceh Darusalam

6,239 2012

PT Guthrie Pecconina Indonesia District Musi Banyuasin – South Sumatera

13,961 2012

PT Mitra Austral Sejahtera District Sanggau –West Kalimantan 14,202 2012 PT Sandika Natapalma District Ketapang – West Kalimantan 19,731 2012 PT Sime Indo Agro District Sanggau – West Kalimantan 20,663 2009


2.0 ASSESSMENT PROCESS 2.1 Certification Body PT MUTUAGUNG LESTARI

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

Tell. +62-21-8740202 Fax +62-21-87740745/46 Website: www.mutucertification.com Email : [email protected] 2.2 Lead Assessor and Assessment Team 2.2.1 Assessment Team The assessment team comprises: 1) Taufik Margani (Lead Assessor): Bachelor of Science in Forestry. He has led several audits in

Forest Management in Indonesia (including FM joint certification under LEI and FSC schemes) and is a Lead Auditor for FSC Chain of Custody and RSPO Certification. Other experiences: IRCA Lead Auditor for Environment Management Systems and Quality Management Systems. Worked for an independent certification body as General Manager and has conducted several Environmental Management System and RSPO Certification audits. Passed training for RSPO assessor/lead assessor conducted by Pro Forest in 2008, IRCA Lead Auditor Course for Quality Management System and Environmental Management System, Chain of Custody Assessor Training Course, Training of Certification Program of Sustainable Forest Management, Lead Auditor OHSAS 18001 Training, and many more. During this assessment he was focused on Ecological aspect

2) Deni A Novendi (Assessor): Bachelor of Science in Forestry, majoring in Forest Conservation. Passed training for RSPO assessor/lead assessor conducted by DMSI (Indonesia Palm Oil Council). Has varied experiences in forest conservation and forest planning in Indonesia forest concessions in 13 years. Has worked for an independent certification body and conducted several assessments as Forest Management Certification Auditor, ISO 9001 Auditor and RSPO Certification Auditor. During this assessment he was focused on Ecology and Best Practices aspects

3) Taryanto Wijaya (Assessor): Bachelor of Management in Economics and Social Sciences. An experienced facilitator working to build capacity in marginal societies, developing small scale community enterprises, carrying out project surveys and evaluation, facilitating participative planning, and consultant for Community-Based Forest Management (CBFM) certification. Has been a social auditor on RSPO Certification audit. During this assessment he was focused on social aspect.

4) Aryo Gustomo (Technical expert): Bachelor of Agriculture, majoring in Agronomy, and a Specialist in Oil Palm Plantations. Has worked in oil palm seed production in Malaysia, and as Plant Breeder/Agronomist. Also, has been a Field Assistant in an oil palm plantation. Currently, working in an independent certification body as Technical Expert. Passed training for RSPO assessor/lead assessor conducted by KMSI (Indonesia Palm Oil Council) in 2009, training in Identification of HCV areas by FCG Consultant, awareness of ISO 9001:2008 and Training as ISO 14001 Lead Auditor. Approved by BM TRADA and has been technical expert in ISO 9001 and RSPO Certification audits.

Team members’ CVs are held on file at PT Mutuagung Lestari office.

http://www.mutucertification.com/�


2.2.2 Report Peer Review and Panel Committee of Mutuagung Lestari

Before submission to RSPO for approval, this report was reviewed on 24th June 2009 by:

1) Dr. Ir. Mahmud Thohari DEA: Doctorate in Ecology and Genetics of Mammals from Institute des Sciences Evolution, Universite des Sciences et Techniques du Languedoc (USTL), Montpellier, France. Has been involved in many forestry and environmental activities like forest certification as review panellist, research with results presented in international conferences, and he is competent in the conservation of natural resources with good expertise in fauna and many others related areas. He is involved in several organizations - Indonesian Oil Palm Society (MAKSI) as Vice Chairman, Indonesian Biology Association (PBI), Indonesian Birds Conservation (PBI), and several others related to the conservation of natural resources. Currently, he is post-graduate lecturer in the Faculty of Forestry, Bogor Institute of Agriculture - Indonesia.

2) Dr. Ir. Hariyadi, MS: Doctorate in Plantation Ecology with considerable experience in several areas of oil palm plantation activities, such as expert auditor in RSPO Implementation, ISO 14000, feasibility studies, and has carried out research in Plantation Best Management Practices. Has been keynote speaker and participant in several seminars and training programs concerned with RSPO implementation, ecological aspects, oil palm agribusiness management, National Conference on Coconut, and a trainer in oil palm plantation management – in Beijing Ming Yuan University. Is involved in many organizations - Perhimpunan Agronomi Indonesia (PERAGI) or Indonesian Agronomy Association, Persatuan Insinyur Indonesia (PII), and Indonesian Horticulturist Association. Currently lectures in the Faculty of Agriculture, Bogor Institute of Agriculture (IPB), and is Head of the Experiment Site on IPB.

The report was further reviewed on 26th June 2009 by:

1) Prof. Dr. Ir Sudirman Yahya MSc: Doctorate in Agronomy, University of Wisconsin, USA. Besides being a university lecturer, he is also an expert on oil palm Best Practices and Ecology. Has great experience in education, and environmental and oil palm sectors, and has been involved in research in Community Development, International Training in Oil Palm Plantation, Beijing, inspection of oil palm estates in smallholder projects, consultancy in Environmental Management and Monitoring "Small Holder Tree Crop Processing Project", consultancy in International Agriculture Development Project, feasibility study on oil palm smallholder project, and many more. The organisations he is involved in are the Indonesian Agronomy Association (PERAGI), Sigma Xi - Scientific Research Society, American Society of Agronomy, and Crop Science Society of America.

2) Ir. Siswoyo, MSi: Masters in Conservation of Forestry Resources. He is an expert in ecology, and has been involved in several forestry and oil palm projects concerning the environment, such as, Monitoring the Biological Environment, Impact of Forest Fire on Plant Diversity, Promoting Selected Non-Timber Forest Products - supporting sustainable forest management, research in HCV forests, identification and assessment of HCV forests, identification and social analysis for social sustainability in oil palm plantations, and other related activities. He is also involved in several organizations, such as, Indonesian Network for Flora Conservation, Indonesian Engineers’ Association (PII), Biofarmaka Study Program, and is a National Working Member of Indonesian Pharmacy.

3) Handian Purwawangsa, S.Hut, Msi: Masters in Forestry Science, Bogor Institute of Agriculture. He is a social expert, and been involved in many forest and oil palm projects, such as, Drawing Social Roadmaps in Oil Palm Plantations, compiling documents for environmental management, strategizing Forest Investment, ex-post Evaluation of Upland Plantation and Land Development, analysis of village energy needs in forest environment, improving village organisation, planning the local community effort in production forests, increasing farmer and fishermen income program, and many more. Currently, lecturing in the Forest Management Department, Bogor Institute of Agriculture.

The reviews are given in Annexes 2 and 3. The CV’s of the review members are available from the PT Mutuagung Lestari office.


2.3 Assessment Methodology 2.3.1 Assessment dates Pre-assessment: 09 - 13 February 2009 Main Assessment: 25 - 30 May 2009 2.3.2 Estimated man-days required for assessment Pre-Assessment: 25 Main assessment: 24 2.3.3 Assessment process

The assessment was done in two stages: (1) Pre-Assessment, and (2) Main Assessment. The Pre-Assessment was essentially a check on the company documentation with a field visit made to verify that the field conditions are as documented. Any noted non-compliances to the RSPO P & C along the way were communicated to the Manager for rectification before the Main Assessment.

The Main Assessment was when the whole operation of the company was checked one-by-one against the individual criteria in the RSPO P&C – including document review, interviews with stakeholders and site visit to observe the company operations.

On the first day, the Assessment Team focussed on document review - on documents pertaining to legal, environmental, social and management issues. Plans were made for field visits, for which the team was divided into three group, viz.,

Team I (Social, economic, and legal Issues): To asses land disputes, conflict resolution, security, labour and payment system, corporate social responsibility and handling of community grievances. Team II (Environment, Health and Safety): To assess site/area plan, implementation soil and water conservation, application of agrochemicals and disposal of empty pesticide containers, and implementation of Health and Safety policy. Team III (Best Management Practice and Integrated Pest Management): To assess the long-term working plan of the company, implementation of IPM, agrochemicals practices, land application practices, maintenance of surface and ground water quality and availability, and supply chain implementation.

25th May 2009: Opening meeting in Manggala 1 Estate attended by managers of Manggala Palm Oil Mill and Manggala 1, 2 and 3 estates, and key staff. The lead auditor explained the main assessment process and scope, confidentiality of the information received and public viewing of the eventual report. The team members were introduced with their functions stated and itineraries given. The purpose of the audit was explained – to ensure compliance with the RSPO P&C. Finally, the senior manager of the auditee disclosed the steps already taken by the company to adopt the RSPO P&C.

26th May 2009: Public consultation with stakeholders. Assessment team divided into two groups - Group I (Taufik and Aryo) met with local government officials and NGOs in Bagan Siapi-api, while Group II (Taryanto and Deni) met with the local communities. The public consultation took half the day, after which the issues raised were reviewed.

Prepared by Mutuagung Lestari for Tunggal Mitra Plantation

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27th May 2009: Document review. Assessment team divided into three groups - Group I on social aspects, Group II on ecology/environment, and Group III on best practices. Following a document review, the team decided on the places to visit the next day, and this was conveyed to the TMP management.

28th May 2009: Site visits. Assessment Team divided into three groups, each accompanied by a person from PT TMP. Group I (Social) visited near-by villages and learnt of the interaction with the estates, Group II and III (Environment and Best Practices) visited the riparian areas, observed peat soil management, inspected the boundary and areas beyond and observed the management of surface water.

29th May 2009: Environmental and Best Practices groups visited Manggala Palm Oil Mill, while the Social group continuing visited near-by villages and learnt of the interaction with the estates. Discussed and report writing in the evening.

30th May 2009: Closing meeting in Manggala Palm Oil Mill. Key attendees were the Mill General Manager, TQEM Manager, Senior Mill Manager, all Estate Managers and staff of relevance. Departure in evening to Pekan Baru.

31st May 2009: Internal meeting of Assessment Team, discussion and review of government rules and regulations for addition information.

01 June 2009: Assessment report completed. 02 June 2009: Return to Jakarta 2.3.4 Reasons for selecting the things to observe and places to visit.

The main considerations were: 1) weaknesses spotted in the pre-assessment, 2) issues raised in the public consultation, 3) concern with particular issues, 4) RSPO requirements for improvement, 5) represent whole of management area condition and their issues. The site visits were arranged for each group depending on their area of assessment:

Sites visited by Team I (Social, Economic and Legal issues):

Location-1, Sukajadi Village. To assess complaint about flies in the rainy season. Ibu Sumiatun said that the problem was caused by EFB application in the PT TMP area nearby.

Location-2, Pujud Village. To assess resolution of land conflict between local farmers and PT TMP. Mr. Basri (55 years old) released about 40 ha land to PT TMP, but did not receive adequate compensation. He was only offered Rp18 million non-negotiable. However, he did not have any documentary proof nor even remembered where the land is and details of his discussion with the company.

Location-3, Sei Pinang Vilage. Visited riparian belt of Sei Pinang river, and river was littered by domestic waste (organic and an-organic wastes).

Location-4, Pujud Village. Checking on complaints. (1) Harsh treatment by PT TMP has caused many of its workers to leave and fish in the river. (2) The river has become polluted, especially over the last 10 years, and the catch has fallen by about 30%.

Location-5, Bencak Seribu Sub-Village. To check on a complaint of flooding. The village is located at the water outlet from PT TMP. The villages have maintained the area as best they can, but it has become heavily silted. Requests to PT TMP to de-silt the area have fallen on deaf ears.

Location-6, Sukajadi Village. To assess complaint of dust pollution caused by FFB transport. Mr. Brutu, small shop owner at the boundary of PT TMP with the main road, said that he expected PT TMP to be more responsible and spray the main road continually in the dry season. However, he has had to do this himself 2 or 3 times a day.

Location-7, Blocks F09 and G08. To assess a land dispute. The Tampubolon family claimed 20 ha under PT TMP HGU (Hak Guna Usaha) taken by PT TMP. They bought the land from Mr. Junadi in 2007 with the proper legal documents, such as official land ownership letter (Surat Keterangan Tanah/SKT) issued by Head of Local Community (Kepala Desa) and Head of Sub District region (Kepala Camat). This letter was the evidence for the Tampubolon Family to get Statement Letter of Compensation Settlement (Surat Keterangan Ganti Rugi/SKGR) issued by Kepala Desa and Camat (Head of local community).


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1 (one) Letter of Compensation (SKGR) covers 2 ha, and they have 10 letters/SKGR. The Tampubolon family have used the letters as collateral against a loan from Bank Rakyat Indonesia (BRI). They realise that their land has now been planted by PT TMP, and they are prepared to let PT TMP have it for Rp60 million/ha compensation. There are another 8 (eight) similar claimants - 1.5 ha (Pratno), 2 ha (Pasaribu), 2.5 ha (Sukatani villager), 2 ha (Surya), 4 ha (Suyud), 2 ha (Pratno), 2 ha (Irpan) and 2 ha (Supri). These areas are out of TMP’s planted area and not influenced production yield. Other than these disputes, there is a good relationship between TMP and the villagers. They cooperate in security and fire prevention. On 17-18 August, there was a joint effort to dowse a fire in the TMP area.

Location-8, Pematang Damar Village. Visited the road connecting Pematang Damar to Teluk Nayang Village. The local community claimed that PT TMP has blocked the road. Mr. Bahrum (representative of Pematang Damar) said that PT TMP has blocked the road between the two villages by planting the area with oil palm. The two communities had very close links previously, but now only cooperate in: 1) coordination between these two villages, 2) farmers selling their rubber in Teluk Nayang market (Pasar Km 20). When the Team checked the road to the market, it was found to be in good condition, passable by motorcycle or double-cabin car (pick-up car).

Location-9: Block J54. To check illegal land occupation, planted with rubber. The land was ‘bought’ by Mr. Parmin from Mr. Amroni, and planted with rubber. In buying the land, Mr. Parmin knew that it was owned by PT TMP. His argument is that the land ultimately belongs to the government and as such, all and sundry would have a right to use it. In gist, he is prepared to surrender the land for Rp. 30 million/ha. The villagers who occupied land also safeguard the area from fire and theft.

Locations visited by Team II (Environment, Health and Safety):

Location 1, Block H37 MGE-3, Division IV. Observed and interviewed mandor/supervisor on EFB (empty fruit bunches) application, soil fertility and erosion, harvesting practices and FFB transport concerning on supply chain system to ensure the products are claimed as certified CPO. And ensuring certified CPO balance between CPO inputs and outputs in palm oil mill.

Location 2, Division IV MGE-3 Office and Worker Quarters. Interviews and observations on planning, procedures and documentation of division work. Example: monthly plans for spraying, desisting of sediment pits, harvesting, Health and Safety practices. Also, observed sanitation around worker quarters.

Location 3, Block H23 MGE-3. To observe area set aside for wildlife sanctuary, and 6 hectares for cemetery.

Location 4, MGE-3. To observe nesting boxes set up for barn owl (Tyto alba) for rat control. Location 5, Main Store and workshop. Observed Agrochemical storage and environmental control.

Location 6: MGE-3. To observe house of spraying devices and observed the agrochemical usage and reused of ex water of knapsack washing (liquid wastes).

Location-7, Block H9 MGE-3. To observe water table maintenance in peat – measuring water depth and adjusting the weirs accordingly.

Location-8, Central Clinic MGE-2: To observed and interview medical officer on his rounds for checking workers - sprayers’ workers, harvesters and manuring workers. Also, observed disposal of medical wastes.

Location-9, Manggala Palm Oil Mill. To observe CPO extraction from FFB, health and safety precautions and environmental management. And also concerning on supply chain system to ensure that the certified CPO produced tallies with the FFB inputs.


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Sites for Team III (Best Management Practices and Integrated Pest Management)

Location 1: MGE 1. Beneficial plants nursery.

Location 2: House of Block Spraying System (BSS) in MGE 1. To observe spraying practices procedure, safety measures taken and protective clothing worn.

Location 3: Division 3 Office in MGE 1. Interview of staff on daily monitoring of pests, manuring, agrochemical use, yield obtained.

Location 4, Block F17 MGE-1. Spraying of circle and harvesting path using herbicide AUDIT and METAPRIMA. Interviewed mandor (supervisor) on herbicide dosage, health and safety precautions, and policy on spraying.

Location 5, Block F15 MGE-1. Observed POME application and well for monitoring water quality. Location 6, Block E19 and E20 MGE-1. Observed road maintenance for FFB transport.

Location 7, Block A34 MGE-1. Examined riparian buffer along Sungai Bangko which has been reforested, and demarcation of area with boundary posts.

Location 8, Block D32 MGE-1. Visited estate boundary near Pematang Damar village.

Location 9, Block C45 MGE-2. Observed harvesting, enquired Muhammad (harvester) and wife about health and safety precautions taken in harvesting.

Location 10, Blocks A42 and A43 (Planted 2006). To observe in filled area, spraying near trenches (no spraying to 3 palms away), water management in peat area, water depth monitoring and fertilizer application.

Location 11, Blocks A44 and A49. To observe water management practice in peat.

Location 12, Main Store in MGE-2. Observed temporary storage for pesticides and hazardous waste containers, spare parts storage and fuel tank. Interviewed store keeper on health and safety issues and documentation of pesticide use.

Location 13, Head Office MGE-2. Interviewed administrative officer (Kepala Tata Usaha) on labour regulation, payment system, health and safety training, health and safety equipment for harvesters, sprayers, manuring labour, store, workshop and fire department.

Location 14, Hospital MGE-2. Interviewed nurse (Jamaludin Gultom) on medical check-ups for spraying and manuring workers, medical care for workers and their families, and surrounding communities.

2.4 Stakeholder Consultation and List of Stakeholders Contacted 2.4.1 Summary of stakeholder consultation process

The first public announcement of the audit was made more than 30 days before the audit on the websites in RSPO and Mutu Certification. Emails and letters were sent to stakeholders inviting them to a public consultation.

47 stakeholders were contacted, from who 9 (nine) written comments were received and more than 15 other responses before the public consultation. The meeting (there were actually two concurrent sessions) was held on 26th May 2009 in Bagan Siapi-api for the local government (10 stakeholders present) and at Manggala Estate for the local communities (18 stakeholders present).

2.4.2 List of stakeholders contacted See Annex 4 2.4.3 Summaries of main issues raised by stakeholders 2.4.3.1 Positive Issues

- In an environmental assessment, PT Tunggal Mitra Plantation was categorized as Blue (best result). The test was conducted by PROPER, Badan Penanggulangan Dampak Lingkungan Daerah (Bapedalda) District Rokan Hilir, Riau, in 2008.

- The local government strongly supports Tunggal Mitra Plantation getting RSPO Certification


14

- It has not yet information regarding land disputes and land conflict in TMP area due to land ownership.

- PT TMP applies POME as irrigation and fertilization, making good use of the liquid waste.

2.4.3.2 Negative Issues

- Environmental issues should be considered in estate practices, for example, EFB application attracts flies which are a nuisance to those living nearby.

- TMP does not care about the local community, e.g., it does not support education or local activities, and does not adopt oil palm best management practices, etc.

- The locals are not given any preference for employment – most of the workers are imported from far away.

- TMP should comply with all regulations, local and national, e.g. Permentan No.26/2007. - Regional income of Rokan Hilir District due to company retribution to local government. - TMP needs to implement a Corporate Social Responsibility (CSR) program for the local

communities.

2.4.3.3 Other Issues None 2.5 Date of Next Surveillance

The next surveillance visit will be within 12 months of approval of this certification.


3.0 ASSESSMENT FINDINGS 3.1. Summary of Non Conformances, Corrective Actions Taken and Observations

No. Ref Std

Non Conformance Indicator Corrective Action

required Time

Limits Date and

Observation Status

Closing Date

2009.01 1.1; 1.2: 6.4

Organization has not been provided adequate information for stakeholders, especially for local government, as required to relevant regulation. And also has not specified retention time of documents due to information requests and responses to stakeholders. For example: information request of number of worker for Labour Dept. and CSR program for local communities.

CFA Organization should provide adequate information to stakeholders as required with relevant regulation; and should determine the retention time of documents of request and responses information to stakeholders.

Next surveillance visit

Open

2009.02 2.1 There were not adequate evidences of documented system for evaluation of legal requirements. E.g. No adequate management in the protected areas - Presidential Decision No.32/1990 and UU 41/1999; Water management and waste contamination management – PP No. 82/2001.

MINOR Organization should provide a procedure due to evaluation of relevant regulation, to ensure all regulation are complied and implemented properly.


Open

2009.03 2.2 Although PT TMP has evidence of legitimate use of its land, there remain some areas disputed by the local communities with no accepted mechanism for resolving the conflict. However, the disputed land is not included in its production area covered in this audit, and so should not affect the claim for certification.

MINOR The organization must develop a conflict resolution procedure acceptable by all the relevant stakeholders.


Open


2009.04 3.1 The organization has a long term plan for at least 5 years. The present budget (2009/2010) has projections until 2011 - 13. However, the proposed activities should be separated into their different areas - environmental, production and social management.

CFA The organization should review the long term plan to draw up a detailed action plan, e.g., for managing the environment, production and social planning.


Open

2009.05 4.2; 4.3; 4.4

Soil analysis should be carried out to plan the management for fragile soils and maintenance of soil fertility. The analysis should include the soil nutrients content. In addition, the topography should be mapped, and the water depth for the peat areas gauged and plotted.

CFA The organization should demonstrate a detail of soil survey and draw up a soil map for all its areas. In addition, a topography map should be done.


Open

2009.06 4.5 A training program is needed for Integrated Pest Management in order for it to be implemented efficiently by the field conductors. It would include the evaluation of Tyto alba control against rats, the use of beneficial plants for pest control in order to reduce the application of pesticides.

CFA The organization has to develop a program to increase the workers’ ability in Integrated Pest Management.


Open

2009.07 4.7; 4.8

A risk analysis has been done for the Health and Safety program. However, its implementation has to be monitored in the field. E.g. Health and Safety tools for harvester’s family Genk (helper), manuring workers, contractor, etc

CFA The organization should review all the procedures and policies in health and safety for the workers, including temporary workers and harvester’s family Genk (helper)


Open


2009.08 5.2 The organization should improve its identification and evaluation of HCV areas for rare, threatened or endangered species that could be affected by the plantation or mill operations. There should be a monitoring period of 3 months by trained workers.

CFA There should be a system developed for managing the protected areas to safeguard the rare, threatened and endangered species identified.


Open

2009.09 5.3 PT TMP is monitoring its liquid wastes, like POME, production. However, it has not evaluated their quality against the relevant standards. In some locations, liquid wastes were simply discarded without treatment, e.g., washings from knapsack sprayers poured into trenches (Division 3 MGE-1), fuel spills in the fuel depot, etc.

MINOR There should be a review of the liquid waste disposal procedures to ensure no contamination in excess of that officially allowed.


Open

2009.10 5.4 The use of renewable energy use is being monitored, e.g., electricity and bio fuel, but there is no evaluation of the efficiency of use.

MINOR Organization should evaluate renewable energy use to ensure the efficiency of use.


Open

2009.11 5.5 Organization has implemented the procedure of emergency response to land burning and has been carried out fire drills. The procedure, however, is not involving the local communities in preventing the unjustified use of fire.

CFA TMP needs to review the system, policy and procedures of response to land burning to involve the local communities in preventing the unjustified use of fire.


Open


2009.12 6.1 TMP has owned and distributed questionnaire to local communities. However it has not been included social and environmental impact caused by plantation and mill operation.

MINOR The organization should review its questionnaire used for the social impact assessment, to cover the social economic impacts caused by the plantation and mill operation.


Open

2009.13 8.1 There is monitoring but no evaluation on some of the management actions, e.g., efficiency of energy use, medical check-ups for workers, hazardous waste container disposal, boiler efficiency and routine maintenance for boiler and generator, Tyto alba as biological control against rats, etc.

MINOR Organization should follow through on all monitoring by evaluating the data and undertaking corrective action.


Open


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3.2 Summary of main issues raised by stakeholders, Organization responses, and Assessor finding. Public issues Organization responses Assessor finding

Empty Fruit Bunch (EFB) application has caused a lot of flies to Sungai Pinang village.

The organization realized that EFB application has brought flies to the neighbourhood.

The flies were not caused by the EFB application alone, but also by a lack of sanitation around the village.

Organization does not show much concern over the local communities, such as in providing educational support, being a member of the local organization, and providing technical advice on oil palm agronomy, etc.

The organization recognized its failings in this but has no budget for local philanthropy.

Organization has no funds to help the local communities, and the people would have to help themselves.

There is a poor relationship between the organization and local communities, especially over public facilities, e.g., no maintenance of the main road, since 2003, in Sungai Pinang village, despite an earlier promise to do so.

The organization admitted no road maintenance since 2003, the reason being to prevent theft of oil palm fruits. There are two ways outside the estate that the people can use instead.

Organization argues that maintenance of the road near Sungai Pinang village would increase its crop loss. The Auditing Team found on location that every time PT TMP sent its heavy vehicles to maintain the road in Sungai Pinang village, the people would propose maintaining another road far away instead.

There is a complaint that the workers employed are mostly from the outer communities.

The organization has the right to employ whoever it wants. Usually, the immediate locals prefer working in the mill to estates. They are better qualified and prefer the more skilled jobs for the higher pay, whereas the further communities are less qualified.

The audit team found many locals in the estate office working in administration. PT TMP has also offered high school students apprenticeship in the estate, but not yet organized vocational training to develop skills in its staff.

The organization follows Government Regulation No. 26/2007 on work in partnership with the local communities for plantation companies.

Nevertheless, PT TMP acknowledges that it may not yet have fully complied with the regulation, being a new company just starting up.

PT TMP plans to improve its partnership with the local communities when they replant in a few years’ time.

Most companies in District Rokan Hilir have not fully paid their tax to the Government, especially for using the public roads.

The organization has fully paid all its dues for using the public road to Dinas Pendapatan Daerah (Dept. of District Revenues).

PT TMP has evidences of the payments made.

Most companies in District of Rokan Hilir have not yet paid their tax. E.g. Land Tax, Company Income Tax.

PT TMP has fully paid its tax for year 2007 and 2008.

PT TMP has evidence of its tax payment for 2007 and 2008.


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TMP should be consistent in complying with all national and local regulations.

PT TMP admitted its inconsistency in compliance. It will try for full compliance in the next period.

TMP has not prepared a full list of the relevant regulations. This will be completed eventually.

A Corporate Social Responsibility (CSR) program needs to be implemented by TMP for local communities and societies.

The organization has already implemented a CSR program for the local needs, such as a contribution to celebrate Hari Raya ‘aidil Adha by of bulls and rams for sacrifice.

Despite its contribution for Hari Raya, there is as yet no meaningful CSR program.

Local communities were asked for TMP’s land ownership status.

There are several claims to land ownership by the locals in the TMP area.

Some people have Official Statement of Land Ownership Letter (SKT) and Statement Letter of Compensation Settlement (SKGR) for land within the TMP area. PT TMP is planning to compensate the claimants to settle the matter.

Insufficient availability of public information.

The organization has prepared a procedure for the public to request information, and also some basic information likely to be sought.

The organization has not responded to all the public requests for information, only to the formal requests.

Much dust is created in the main road within the estate.

The organization admitted to dustiness in the dry season. It has since been spraying the road to reduce the problem.

On site, the Team verified the complaint. There was some spraying done, but not at all regularly.


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4.0 CERTIFIED ORGANISATION'S ACKNOWLEDGEMENT OF INTERNAL RESPONSIBILITY

4.1 Formal sign-off of assessment findings

PT Tunggal Mitra Plantation acknowledges and confirms acceptance of the Assessment Report contents, including assessment findings. PT Tunggal Mitra Plantation accepts the responsibility for implementing the corrective actions and addressing the opportunities for improvement detailed in the Assessment Report.

Signed on behalf of:

PT TUNGGAL MITRA PLANTATION

PT MUTUAGUNG LESTARI

Head of TQEM Lead Assessor

Mohamad Pirabaharan

Taufik Margani


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Annex 1. Checklist of RSPO P&C for Certification Assessment on PT TUNGGAL MITRA PLANTATION

RSPO REMARK STATUS REF.

1 COMMITMENT TO TRANSPARENCY

1.1 Oil palm growers and millers provide adequate information to other stakeholders on environmental, social and legal issues relevant to RSPO Criteria, in appropriate languages & forms to allow for effective participation in decision making.

2009.01

PT TMP has a procedure to provide Information to interested stakeholders on request, issued 4th April 2009. Every request is categorized by the type of information required, and then replied by the Head of Administration in the estate and mill, e.g., number of workers employed by the Labour Department. A copy of all requests and replies is kept in the Registration Book of Information Requests. PT TMP has drawn up a list of interested stakeholders in its operations.

Requests for help by the local communities are entertained although it is preferred to give the help monetarily, e.g., donation for Independence Day celebrations, donation for road maintenance, etc. Verbal requests for information are not properly documented, e.g., the Head of Local Community (Kepala Desa) and Head of Sub district (Pak Camat) claimed that they asked several times about the number of workers employed and Community Development (CD) by PT TMP, and it has admitted by TMP’s Head of Administration. But the request was not recorded in the Registration Book of Information Requests.

All responses to requests for information are filed by the Head of Administration in the estate and mill. All the responses are duly reported routinely to the relevant department, e.g., Report of environmental impact (RKL/RPL), implementation CSR program, etc.

The Standard Operation Procedure (SOP) for information requests states that there should be a time limit to reply. But the organization has yet to determine the limit.

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

2009.01

The legal documents and permits of PT TMP are categorised by the issuing authorities, e.g., National Permits (Extrication of Forest Area by the Forestry Department, Land Use Title/HGU by the Land Affairs Corporation/BPN, Permanent Operation Permit by BKPM), Province (Official Statement of Land Reserve by the Governor, Official Statement of Site Permit by BPN) and District (Building Permit, Land Application Permit, Environmental and Social Impact documents by Head of District Region, etc). Furthermore, the legal documents for right to use the land (HGU) are: 1. Land Use Title (HGU) Certificate No. 2, 28 July 1999, expiry 28 July 2034, covering 13,836 ha. 2. Extrication of Forest Area Permit by Forestry Department: - No. 793/Kpts-II/1996 on 20 December 1996 for Unit II for 13,370 hectares, - No. 794/Kpts-II/1996 on 20 December 1996 for unit I for of 2,790 hectares.


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Public requests are responded to in 3 way; 1) uploaded on the Sime Darby website, 2) Distributing company information leaflets, and 3) postings on notice boards throughout the estate(s). PT TMP plans to produce information leaflets on its management practices for the public on: 1) Erosion control, 2) Beneficial plants, and 3) Water management in peat. However, information of a confidential nature or those which release would compromise the environment and social issues will not be divulged.

PT TMP has had an Environmental and Social Impact Assessment (AMDAL/RKL-RPL) done, dated 23th August 2006, by BAPEDALDA District Rokan Hilir No. 666.1/AMDAL-BAPEDALDA/2006/12. The areas covered are its palm oil mill with capacity 45 – 60 t/hour, and estate (Sub district Pujud, District Rokan Hilir) of 18,000 hectares, the HGU area of 13,836 hectares. Information of its environmental activities is included in its Environmental Management Plan (RKL) PT TMP, and regularly reported to the relevant Departments every 6 months. PT TMP has contracted Riau University to carry out a Social Impact Assessment on its estate. The assessment will start in 2 months, in July 2009.

Social Documentation: Social activities carried out are recorded in the General Affair Department, under the care of Head of Administration (KTU). The information recorded are: 1) all help requested by the communities, such as loan of Grader for road maintenance, 2) provision of transport and educational support, such as schooling for all the workers’ families and local communities as well, 3) provision of medical care, 4) funeral transport, 5) emergency responses to land burning, 6) donation of sacrificial animals at least once a year, and 7) repair of road to traditional market to ease plight of local communities. Some of the documents are available as pictures on information boards in the estate and mill offices.

Health and Safety Plan: The Health and Safety Program (K3) is available in all the estates (Manggala-1, Manggala-2, and Manggal-3 Estate) and palm oil mill. It contains the procedures for identification of working accidents and Health and Safety activities. The training to be provided is integrated. The program is in separate documents - Official statement of Occupationally Health and Safety (OHS), training programmes and meetings for reduction of work accidents, and maintenance of Health and Safety facility. The program will be regularly revised for continuous improvement, starting next month.

Continuous Improvement Plan: Organization has not demonstrated specific documentation for a continuous improvement program due to results of environmental evaluation and monitoring. The continuous improvement plan can be monitored in the SOU (Strategic Operation Unit) monthly meeting of PT TMP, which is attended by key personal of TMP management and Alur Dumai, such as SOU-11 Chairman, Mr. Apen S Meliala. The agenda of monthly meeting as follows: discussion of action plan within previous meeting, SOU Performance, Crop Losses in the estate, mill Losses, EFB application, POME application, sanitation of emplacement, environmental issues, etc. The minutes will be presented as a monthly meeting report.

The SOP for Information Request is already available, including the maintenance of records for a period of time, but the organization has not determined the specific period of retention due to the interest shown.


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2 COMPLIANCE WITH APPLICABLE LAWS AND REGULATIONS

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

2009.02

There is evidence of compliance with the relevant legal requirements, such as: (1) Payment of wages above the minimum rate as per the Official Statement by the Governor

of Riau, No. 9 Year 2009 - Regional Minimum Wages (UMR); (2) Insurance for workers (JAMSOSTEK) as per Government Regulation (UU) No. 3 Year

1992 - Social Insurance. The organization pays 3.25% of the worker’s wage and the worker 2% as premium. All the workers are members of JAMSOSTEK insurance; the premiums are paid monthly to the JAMSOSTEK Insurance in District Dumai, which covers District Rokan Hilir.

(3) No work is forced by TMP, following the ratified ILO Convention No. 29 Year 1930. (4) TMP has a permit relevant to UU 18 Year 2004 and PP 40 Year 1996. (5) Environmental monitoring and reporting is done by TMP (every 6 months), including on

environmental management in the plantations and mill, e.g., on hazardous wastes, air emissions, liquid wastes, etc.

Several erroneous implementations were found on the regulations, such as: (1) No adequate management in the protected areas - Presidential Decision 32/1990 and UU

41/1999; (2) Inappropriate erosion control - Ministry of Environment Regulation 150/2000; (3) Hazardous waste management - PP 74/2001; (4) Water management and waste contamination management - PP 82/2001; (5) Use of peat land - Ministry of Agriculture Regulation 14/2009. Compliance with changes in the regulations is made by TMP, e.g., (1) Changes in Minimum Regional Wages based on Governor Decision Letter No. 9 Year 2009; (2) CEO of PT TMP issued memo MRC/controller/HPO/698/X/2008 on 4 November 2008 prohibiting use of Paraquat, as also in the Ministry Agriculture Decision (Permentan) 01/Permentan/OT.140/1/2007, and (3) estate and (1) mill manager issued memo on management of water contamination in the rivers and trenches and protected areas. The organization has a list of regulations and legal requirements relevant to the estates and mill. However, key international laws and conventions must be set out in the Annex of Related Laws & Regulations as these documents are not known by the workers at all levels of management. The award for compliance was not granted.

There is no mechanism to comply with changes in the regulations, and no evaluation of implementation of the regulations in the estates and mill. For example: No measurement and evaluation of air pollution due to PP 41/1999; No evaluation of allocated of 20 % total area for local community as stated on Permentan 26/2007; No evaluation of a minimum wage for workers that should be paid by company due to UU 13/2003; No measurement of the depth of peat area as required on Permentan 14/2009; etc.


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

2009.03

TMP has the legal documentation for the land it cultivates. They are maintained by their year of issue: 1. Decision Letter from the Forestry Minister (585/VII-4/1988) - Dispensation for Land Clearing. 2. Governor’s Decision Letter, Province of Riau (44/I/1992) of 29 January 1992 - Reservation area of 18,000 ha in Sub district Tanah Putih, District Bengkalis, for oil palm plantation to PT Tunggal Mitra Plantation. 3. Decision Letters from Forestry Minister (793/Kpts-II/1996 and 794/Kpts-II/1996) on 20 December 1996 – Part extrication of forest (2,790 ha) for oil palm plantation to PT Tunggal Mitra Plantation. 4. Site permit for plantation, issued by Land Affairs Corporation (BPN) (21-401/PGT/IL/X/1997) on 17 October 1997 for 18,000 ha. 5. HGU Certificate (2/1999), valid from 28 July 1999 to 28 July 2034 – giving the rights to use land of 13,836 ha in District Bengkalis, Riau Province.

Despite the legal documents, some of the areas are claimed by the locals holding official land ownership letters (Surat Keterangan Tanah/SKT) and statement letters of compensation settlement (Surat Keterangan Ganti Rugi/SKGR), issued by the Head of Local Communities (Kepala Desa, Camat) in 1995. In 1999, 7,142.82 ha were resolved by TMP agreeing to pay 886 people Rp. 1,738,633,925 in 33 instalments. As of May 2009, there are 2,405 ha remaining in conflict with no negotiation yet started.

Based on the Map and Letter from the Land Affairs Corporation, District Bengkalis No. 16/1992 on 9 November 1992, PT TMP has established the boundaries in all its HGU areas demarcated by concrete poles. In the beginning, when TMP started its operation, the area allotted it was 16,160 ha, but this has since been reduced (document BPN No. 16/1992 on 30 December 1998) to the current 13,836 ha. Trenches/drains have been dug between the TMP land with local community areas, and the land along – on the TMP side - planted with palms. The trenches/drains are 2 meters deep and 4 meters wide. On the other side, the border is demarcated as determined by the Land Affair Corporation (BPN) with poles set up by TMP. The poles are maintained by TMP and indicate the limits of its land.

One of the boundary poles in Block A35 was in good condition. The pole shape was square (20 cm x 20 cm) and 50 cm tall, marked BPN/TMP06. This pole is on the boundary with the PT Salim Group area. For the areas next to local communities, the boundary is landscaped with plants, e.g., Palmae, planted 1 m apart.


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In 1999, some of the areas in conflict were resolved (7,142.82 ha) by TMP agreeing to compensate 886 people a total sum of Rp. 1,738,633,925 in 33 instalments. There are evidences for the conflict resolution - Judicial Procedure, Statement Letter for land extrication and Statement of Unprosecution. They have been viewed by the Head of Local Communities (Kepala Desa and Camat).

However, according to the Notes of Minamas Management Meeting No. XXX/2008 (December 2008), there remain 2,405 ha occupied within the TMP HGU area. TMP has produced a map of the areas, and the resolution process has started under Minamas Plantatios as ‘owner’. These disputed areas are not included in the production area of PT TMP. Most of it is planted with rubber and oil palm, with some still under bush. Two options are being considered for the conflict resolution: 1) moving the settlers to alternative land, and 2) excising the occupied land from the TMP HGU area.

TMP has not demonstrated evidence of conflict resolution acceptable to all parties.

The documents of resolution are copied - one for each side of the dispute, i.e., settler and PT TMP. The documents comprised: 1) submission of compensation letter, 2) agreement made, 3) Statement Letter of authority extrication, 4) Statement Letter of Unprosecution, and 5) receipt of compensation. All these documents are available for the 7,176 ha resolved, including 18.1 ha of uncompleted negotiation. According to the local community representative at the public consultation meeting on 26 Mei 2009, PT TMP has resolved the land occupation by locals with an agreement acceptable by all.

TMP has a SOP for Resolution of Conflicts (RSPO/2.2/PK) dated 02 April 2009. It gives the Objective, Scope, Procedure, Person-In-Charge, Registration Book of Conflict Monitoring and flow chart for the resolution process. However, this procedure has yet to be agreed by the other parties. There is a Monitoring Book for resolution of land conflict progress and a time-bound plan to resolve all the conflicted areas, and both are properly recorded. The mechanism for unfinished negotiations over illegal land occupation is in preparation.

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

Closed

There is proper documentation of negotiation between the traditional owners of land and PT TMP. TMP has divided the disputes into two categories by the stand taken by the owners: 1) willing to accept compensation, and 2) trenchant owners, of 99 owners surveyed by TMP, 31% were in agreement and 69% trenchant. TMP is prepared the pay the compensated requested. But for those refusing to move, TMP has considered various options, such as: 1) excise the HGU land from its holdings with the help of BPN, Forest Ministry and Agriculture Ministry; 2) take legal action, and 3) apply the conflict resolution process, dangling the carrot of Community Development as part of the CSR implementation. However, TMP has not been able to resolve the conflict, and has since transferred the matter to Minamas Holdings, a negotiator appointed by the Land Committee Department.


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According to the Head of Land Affairs Corporation (BPN), District of Rokan Hilir, Province of Riau, there are no longer any traditional land owners in Rokan Hilir. This means that there is no longer be any more land claims. Nevertheless, TMP has produced a Land Situation Map (Sheet Kaart) of the traditionally-owned areas, in order to pay better attention to the local communities. The map is formally agreed with the local communities, and included in the Official Statement Letter of Land (SKT). TMP has a copy of the entire document in its folder on Compensation of Negotiation Land Occupation, Years 2005 and 2008, in Manggala Estate-2.

TMP has documented the negotiation process for its completed land area, and keeps the file in the PSD Department, Pekan Baru Branch Office. For uncompleted negotiated occupied land, TMP has all the documents involved - name of occupier, total area, contents of occupied land, approximate prices, demeanour of occupier, compensation requested, and completeness of ownership documentation. These records are available in all units of the estate.

3 COMMITMENT TO LONG-TERM ECONOMIC AND FINANCIAL VIABILITY

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

2009.04

There is a projected working plan for the company: Blue Print for Implementation 2006 - 2010, 2) Budget Presentation 2009 - 2010 & Projection 2011 - 2013 for TMP. The Plan has 5 strategic objectives: 1) maximization of production, 2) optimum production efficiency, 3) increased production and quality of work, 4) cost reduction, and 5) improving the human resources. These objectives have been incorporated in the detailed activities, such as statement area, plant population, annual production, FFB Budget, yield estimates, labour situation, housing, non plant capital, analysis of transport needed, running account analysis, total cost, daily labour wage, analysis of harvest cost, analysis of up-keep cost, analysis of land clearing, and analysis of seedling cost.

The working plan also covers environmental and social issues, but with rather skimpy details. They may, therefore, just be a smoke screen of care, with the main thrust on production. The company should be more forthright and serious on what it wants done on the environmental and social aspects.

TMP does not as yet have a replanting programme because the palms are all still young – the oldest are just 16 years. However, there is a plan for replacement planting. In MGE-2, 49 ha were replaced in 2004, and 60 ha in 2006. Both areas were planted in 1990 but were badly affected by puddle.

4 USE OF APPROPRIATE BEST PRACTICES BY GROWERS AND MILLERS

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

Closed

There is a Standard Operating Procedure (SOP 110/EST-ARM/08) for all estate activities, covering aspects like land clearing, nursery practice, replanting, palm upkeep, plant protection, harvesting and transport. The SOP applies to all Sime Darby - Minamas plantations. In TMP, there is evidence that all of the procedures are followed, e.g., EFB application, provision of nesting boxes for Tyto alba, planting of beneficial plants for controlling caterpillar, drainage in peat areas, etc.


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The operational procedures for the palm oil mill are documented in Guidance of Palm Oil Mill Technique Policy 110/POD-FAC/07, issued by Minamas Plantation. They include the reception of FFB, weighing, loading ramp, processing and dispatch of CPO/PKO. There is also a procedure for the supply chain, issued 4 March 2009, for reception of FFB in the mill, FFB processing and dispatch of CPO/PKO to the buyer. The procedures comprises: 1) Mass balance Supply Chain, in which is mentioned that the mill only receives FFB from the SPO-certified estates, such as the Manggala estates, 2) FFB supplied only from SPO certified, 3) ensuring material forms are numbered by RSPO certificates, and 4) recording of all material balances in the Daily Production Report.

According to the Daily Production Report, on 28 May 2009, the mill received 547.35 tonnes FFB - from MGE-1, 207.95 tonnes (48 trips), from MGE-2 185.09 tonnes (45 trips) and from MGE-3 154.31 tonnes (37 trips). The team has checked the FFB Delivery Notes, (Surat Pengantar Buah) 273/05/09/4/MG3, 274/05/09/4/MG3 and 278/05/09/4/MG3, for appropriateness of amounts, driver names, and date of dispatch.

There is a company policy to carry out internal auditing at least 2x a year (SOP Internal Audit 421/HRM-DIQ/08 on 02 January 2009) for all the estate and mill activities. The last internal audit was conducted on 29 April 2009. It focussed on (1) work time claims, (2) broken generator, (3) broken cake breaker conveyor disrupting the FFB processing, and (4) use of aluminium sulphate and soda ash for water treatment. In addition, TMP carries out routine monthly checks on the progress of its programs, e.g., meeting on mill operation on 26 February 2009 attended by Senior mill manager, and 12 department deputies; and evidence of meeting on 18 March 2009 to discuss the new boiler 3. The operational results are documented in the Estate Monthly Report. They include the insertion plant (by seedlings), manuring, pest and disease management, harvesting and transport. For the supply chain, Manggala oil palm mill records FFB processed to CPO/PKO in its daily reports, e.g., last FFB stock the previous day of 108.94 tonnes, FFB received that day of 547.35 tonnes, FFB processed 517.50 tonnes, last stock of FFB that day 138, 790 tonnes; and crude palm oil produced of 124.76 tonnes (24% OER).

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

2009.05

No soil analysis of any detail has been done with data on the topography, peat depth and soil type. Rather, there is just a classification of the soils into mineral and peat in a map. Mineral soils cover 6,454 ha (59% of the total area) and peat 4.434 ha (41%). None of the peat has been gauged for depth. From observation, most of TMP is flat to rolling. The Minamas Research Centre (MRC) of TMP in Teluk Siak carries out leaf analysis every year for fertilizer recommendation. TMP has a complete set of leaf analysis results for 2008/2009., while leaf analysis for 2009/2010 is in progress.


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There is a record of monitoring to increase soil fertility, such as EFB application report, leaf nutrient levels and inorganic fertilizer applied. These are included in the monthly Estate report. Example: (1) EFB application in 2008: 44,136 tonnes on 1,486.67 ha; in 2007: 42,640 tonnes on 1,340.1 ha; in 2009 (March): 11,214 tonnes on 354.7 ha. The EFB application program is planned beforehand.

4.3 Practices minimise and control erosion and degradation of soils. 2009.05

TMP has a map of its soils showing 6,454 ha (59%) mineral soils and 4,436 ha (41%) peat (Figures 3.) However, the peat depth has not been gauged.

From visual observation, the TMP topography is flat to rolling. Several good management

practices are implemented in the hilly areas, including digging silt pits, placing the frond piles at right angle to the slope, EFB application and allowing Nephrolepis cover. The peat area has a drainage system for managing the water level with field drains every 4 rows of palms). However, TMP has not evaluated the effectiveness of the protection measures taken against erosion and soil degradation. There was no data on the erosion rate or of peat shrinkage. Road maintenance is included in the yearly budget of PT TMP. The roads are maintained twice a year. In 2008, there were 359 km of damaged roads - 112 km main roads and 247 km collection roads. The problematic areas are mapped before inclusion in the Road maintenance Programme. Until January 2009, 215 km had been maintained in MGE-1. The priority is to facilitate FFB and CPO transport. Some roads are also maintained outside the TMP areas, e.g., in the local villages, as part of a Community Development Programme. A complaint has been lodged of excessive dust created by the estate transport. The MGE-3 Manager was interviewed and stated that measures have been taken to ameliorate the situation – spraying the road and reducing vehicular speed by creating bumps in every crossroad. In 2009, TMP made daily observations of the water level in the peat soil, such as in MGE-1 (Blocks B10, C10), MGE-2 (Blocks B49, C49) and MGE-3 (Blocks L9, H9). The results show a water level 50 - 60 cm deep, somewhat higher than the intended 50 - 70 cm. There is a statement in the Environmental Impact Assessment (RKL/RPL) of PT TMP in June - December 2008, Sub Section 2.1 - Peat Soil Area, as follows, "Lowering of peat soil surface had been monitored visually in every location of the estate”. Monitoring in 2008 show most of the peat to have dried out with no water level detectable". This rather suggests that the peat has been over-drained, drying it out and causing more severe subsidence.

TMP has installed pegs in the peat areas, e.g., Block D49 on 27 May 2009, to monitor the

subsidence. Readings will be taken every three months.

TMP area has 4,436 ha (41%) of peat planted with oil palm, of which 60 ha (planted in 1999 in MGE-2) had failed due to flooding. In 2006, TMP replanted the area using an improved planting method which included: (1) improved drainage with canals (one every 4 rows of palms), and (2) applying the appropriate fertilizers (urea, MOP, borate). To prevent soil erosion from flooding, Nephrolepis was planted in inter-rows between the palms. However, the strategy has not been evaluated, especially for peat soil subsidence.


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4.4 Practices maintain the quality and availability of surface and ground water. 2009.05

There is an effort by TMP to maintain riparian/buffer zones for its rivers, such as for Sungai Bangko flowing through MGE-1 & MGE-2. In the area, bamboo, jambu bol and jackfruit were planted. However, in MGE-1, the zone is only 6 meters wide, and in MGE-2 only 1 meter. This is not in compliance with Presidential Decision No. 32/1990 which provides for at least 50 meters. TMP realizes the error and in a Memo dated 27 May 2009 has announced its intention to rectify all by 2011. According to Ms. Suwarni, when visiting Block F17 to observe weed spraying, TMP has a policy not to spray the riparian area (including drains) to prevent contamination of the water. However, implementation of the policy is moot as in Blocks A43 and A42 MGE-2; there was evidence of spraying near the canals just a few days earlier.

To prevent water contamination, TMP has issued Memo 017/RSPO/PT TMP/V/09 on 27 May 2009 prohibiting agrochemical use near rivers and drains, with a minimum of 3 palms from the river banks. The water level in peat areas is monitored daily with the intention to keep it at 70 cm depth (maximum). The results showed an average depth of 50 cm. The objective is to minimize oxidation of the peat. Block D49 was pegged on 27 May 2009 to monitor the peat subsidence. Monitoring will be done every 3 months. The raw effluent produced by Manggala palm oil mill was analysed by Sucofindo on 21 January - 02 February 2009. The BOD complied with the level set by the Head of BAPEDALDA District Rokan Hilir No. 43/Bapedalda/2007 on 21/8/2007 (5,000 mg/l) for land application of the effluent in the estate. The pH of 4.07 was, however, below the standard of 6.0 - 9.0. In area applied with POME, there is an observation well (in Block F15) monitored yearly by BAPEDALDA. The dosage of effluent applied is 750 tonnes/ha/year. The mill monitors its water use per tonne of FFB processed. There are also data on underground water use in 2007 – 2009, e.g., in 2008, 233,468.87 tonnes FFB processed, water use of 394,611 m3, or 1.7 m3 per tonne FFB. In 2007, 225,110.33 tonnes FFB processed, water use 379,723 m3, or 1.7 m3 per tonne FFB; in 2009 (to April), 74,874.96 tonnes FFB, water use 146,146 m3, or 2.0 m3 per tonne FFB.

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

2009.06

TMP does monthly monitoring of its Pest and Disease situation. Several common pests have been identified - rat, caterpillar (Thosea asigna and Setora nitens) and termittes. There are no important plant diseases. The troublesome weeds are Imperata cylindrica, Borreria latifolia; Micania micranta, Ageratum conizoides, Brachiana mutica, Lantana camara and Stenochiaena palustris. Pest management comprises both chemical and biological control, e.g., biological control for caterpillar by the planting of beneficial plants, such as Antigonon leptosus, Casia cobanensis, Turnera subulata and Euphorbia sp. The plants are hosts for Cikanus sp (caterpillar predator).


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As of April 2009, Casia sp has been planted on 9,664 meters of roads, Antigonon sp. on 625 meters and Turnera sp on 8,510 meters. TMP has budgeted in 2009 to continue planting and maintaining beneficial plants in all its estates. Monitoring of nettle caterpillar has been done since 2006, with as yet little evidence that the beneficial plants have decreased the attacks. In 2006, the caterpillars attacked 5,249 ha, requiring chemical control (1,307 litres of Decis). In 2007, 13,832 ha were attacked and 3,325.2 litres Decis used, with more beneficial plants planted. TMP has not evaluated the decrease in agrochemical use for controlling the caterpillars with the introduction of beneficial plants. TMP has been encouraging rat control by barn owl (Tyto alba) since 1997. According to a Memo from the Senior. Manager (084/RST-BJM/II/2004), TMP plans to add more nesting boxes in all areas. As of end 2008, 429 boxes have been installed – one per 20 ha, based on the little rat damage suffered. This will be increased in 2009 to 1 per 10 ha. The Tyto alba population in TMP (2008) was eggs 638, hatchlings 430, and adults 394.

TMP monitors for rat damage by assessing the FFB received in the mill. Daily, 2 truckloads per division are assessed with 100 bunches taken per truck. From bunches are counted those damaged by rats – at least one fruit gnawed. In March 2009, the damage was 1 % in Divisions 1 and 2 of MGE -1, but fell to 0% in April. Since 2005, TMP has not used rat poison for control.

The monitoring records for Integrated Pest Management are kept in file MGE2/H&P-B/09/029 with details of total area, blocks, results and dates of census. Also available are records of Tyto alba as biological control for rat in file MG2/BRHT-B/09/030. See indicator 4.5.1 above. In the Estate office, agrochemical use is recorded in the "Buku Prestasi Kerja" or Book of Work Performance, with the activities, dates, blocks, total area and operator. Integrated Pest Management training has not been offered.

There is a document of all the agrochemicals used in the estates, File 110/EST - ARM/08/VII/AG/01. It gives the characteristics/properties of the agrochemicals, viz. Herbicides:

2. Meta Prima 20 WDG, a.i. methyl metsulfuron, Dosage 0.025 g/ha, for controlling woody and broad leaf weeds, LD50 Oral 2000mg/kg, Dermal > 5000mg/kg.

1. Prima Up 480 AS, a.i. Glyphosate, Dosage 250 cc/ha, for controlling grassy weeds, LD50 Oral = 5000 mg/kg, Dermal > 5000 mg/kg.

3. Starane 200 EC, a.i. Fluroksipir, Dosage 65 cc/ha, for controlling broad-leaf weeds. Insecticide:

1. Decis 2.5 EC, a.i. Deltamethrin, Dosage 200 cc/ha, for controlling caterpillar, LD50 Oral 431 mg/kg, Dermal > 2000 mg/kg.


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

Closed

TMP has a list of the agrochemicals it uses and the regulations pertaining to their use. TMP is committed to comply with the regulations as evidenced by: (1) Memo from Head of Plantation Operation to Senior GM and GMs in all units of operation prohibiting the use of Paraquat, No. POD-UM-127/X/2008 on 4 November 2008; (2) Memo MGE 2/022/II/09/M on 15 February 2009 on not using Paraquat in MGE-2; (3) Memo MGE 3/025/II/09/M on 14 February 2009 on not using Paraquat in MGE-3.

There is a document on agrochemical use for all the estates - 110/EST - ARM/08/VII/AG/01 - DAFTAR PEMAKAIAN AGROCHEMICAL PT TUNGGAL MITRA PLANTATION. For each estate division, there is a Daily Book for the mandor to fill in details of the block, area sprayed, herbicide used and rounds of spraying.

Large pesticide containers are kept in a storage area, and the smaller ones buried. This is not in compliance (especially for the small containers) with the current Government Regulations (PP) 18/1999 and PP 85/1999 on Hazardous Waste Material Management.

The organization has strictly adhered to the Government regulations on pesticide use, such as Agriculture Ministry (Permentan) 01/2007 on Prohibition and Limiting the use of Pesticides, Permentan 7/2007 on the Mechanisms of Prohibition and Limited Pesticides Permit. TMP has also committed to avoid Paraquat as evidenced by a memo from the Head of Plantation Operation to the Senior GM and GMs in all the operating units not to use the chemical anymore. Memo POD-UM-127/X/2008 on 4 November 2008. Other documents demonstrating TMP’s resolution in this matter are: (1) Memo MGE 1/113/I/III/09/M on 27 March 2009 prohibiting Paraquat use in MGE-1; (2) Memo MGE 2/022/II/09/M on 15 February 2009 prohibiting Paraquat use in MGE-2; (3) Memo MGE 3/025/II/09/M on 14 February 2009 prohibiting Paraquat use in MGE-3. There are records of medical check-ups done in Agung Hospital, in Bagan Batu. Routine check-ups are carried out on all spraying and manuring workers, and boiler operator. Tests are carried out on the blood, urine, skin and thorax. Up to April 2009, 52 spraying and manuring workers had been checked for the year. Most complaints are of stomach disorder (or gastric). According to the nurse in the polyclinic in MGE-2 (Jamaludin Gultom), stomach disorder occurs because the workers very rarely have breakfast in the morning before starting work. In the last few months, 5 harvesters have suffered from skin diseases, suspected by the nurse to be caused by agrochemicals. However, they had all recovered and returned to work at the time of this audit. According to the nurse, TMP offers pregnant and breastfeeding female sprayers alternative work.


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

2009.07

TMP has a policy on Health and Safety Implementation (Dated 31 May 2007, signed by the CEO). The Health and Safety program is covered in Safety) Policy 711/TQEMS/P2K3/07. For the estate and mill operation, TMP has several documents on Occupational Health and Safety, such as Flowchart of the OHS Organization, records of routine monthly meetings, and records of training in fire extinguisher use and socialization of OHS, e.g., Socialization of OHS in MGE-2 conducted on 19 January 2009 and 2 February 2009, in the mill on May 2008.

In the estate and mill operation, there is a Flowchart of OHS Committee showing the people responsible. The managers are the heads in each estate, while in the mill it is the senior manager. All the responsible people stay on site. The OHS Committee meets briefly every morning before work. Records of the meetings are available: (1) Attendance list - on 4 April 2009, 15 members from each department: (2) Minutes of meetings.

The estates and mill have accident insurance for all workers. MGE-2 has on its payroll for December 2008 462 workers, all insured with JAMSOSTEK (Jaminan Sosial Tenaga Kerja/, Social Guarantee for Labourers). In addition, a sprayer in MGE-2 mentioned in an interview that all the workers have accident insurance. In the mill, workers Mr. Rusnandi and Mr. Nazamudin Harahap (Boiler Operator) were interviewed, and both were insured. There was evidence of routine medical routine check-ups for spraying and manuring workers, while in the mill the boiler man is also checked regularly. In addition, all the harvesters and FFB loaders have given an injection of Neurobion 5000 mg monthly to keep their stamina. A routine check was made on 52 workers (sprayers and manurers) with Agung Hospital, Bagan Batu. The medical tests run were on blood, urine, skin and thorax. Five harvesters were found to suffer skin diseases, suspected caused by the agrochemicals used. At this audit, however, all had recovered and were back at work. The estates and mill operation has conducted a risk assessment for as part of its Occupational Health and Safety (OHS) programme, viz. Estates:

HIRAC data available for all activities identifying the risks for accidents, and making recommendations. There was evidence of acceptance letters for OHS tools, e.g., helmet and chisel casing issued to harvesters.

Mill:

HIRAC data for all activities, e.g., working on the loading ramp, sterilizer, screw press, etc. Documents of analysis of potential accidents, risks and recommendations made sighted. There was evidence of acceptance letters (December 2007) for OHS tools for high risk work, e.g., Mr. Herman received a helmet, work clothes and shoes.

The estates and mill offer OHS training, e.g., in Manggala oil palm mill on May 2008, in MGE-2 on 31 October 2008. According to the document of attendance. there are already several people already trained, e.g., Mr. Putu Undra from MGE-3 attended the Risk Workshop in Pekan Baru on 18 - 21 February 2008, Mr. Calim Sukmantoro from MGE-2 attended P2K3 training in Pekan Baru on 20 - 22 December 2004 and Known Risk Workshop in Pekan Baru on 20 - 22 December 2008.


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TMP has a Flowchart for Emergency Responses similar to that for P2K3. One of the responses is to fire, for which TMP has conducted training. In 2009, TMP plans to offer training in accident and emergency preparedness for all workers, such as OHS tools for harvesting, spraying, manuring, store, and workshop and land burning accidents. There is a Memo from CEO on fires during the dry season, which substance is to be prepared and look for water sources, to be careful of sabotage and adopting the zero burning policy for land clearing. The emergency response for fire is to report to the security post which functions 24 hours a day. However, the local communities have not yet been involved in the prevention of fire.

Signs for evacuation and safety zones have been put up in Manggala oil palm mill, but not in the estates (especially for emergencies). TMP has undertaken to rectify this omission by mid June 2009. The socialization will be done by end July 2009.

The OHS program is announced by signboards in several strategic locations. However, there is no evaluation and monitoring of work accidents, and the workers are not consistently using their OHS tools. First aid kits are readily available at the worksites. All the workers have been given proper OHS tools, e.g., for sprayers, a helmet, rubber gloves, boots, waistcoat and eyes glasses. The harvesters are given a helmet, gloves, chisel casing and eyes glass. However, TMP has not concerned yet OHS tools for harvester family Genk (harvester helper).

The workers do not fully understand how to use the OHS tools, and TMP does not frequently check on the workers for using the tools in their work, e.g., a harvester in Block C45 of MGE-2 was observed not using his OHS tools while working. Records of work accidents are maintained in the estate and mill. Every month, there is a review of the records for the causes, impacts, areas of occurrence, corrective actions taken, and recommendations made to prevent recurrence. In 2008, TMP recorded 17 work accidents in its estates, 1 major and 16 minor. There were no accidents in the mill. TMP has formulated a HIRAC system.

4.8 All staff, workers, smallholders and contractors are appropriately trained. 2009.07

TMP offers internal and external training for all its staff and employees. It further plans to train the local farmers in integrated farming. There is evidence of the training offered, e.g., OHS tools training for sprayers on 19 November 2008, attended by 13 workers in MGE-1. However, there has been no evaluation of the effectiveness of the training as several workers were still observed not wearing their OHS clothes. There are several training programmes for workers – fire prevention, hazardous waste materials management, spraying practices, Integrated Pest Management, and Occupational Health and Safety. TMP has records of all the training done with the dates, training committee and participants. Photos and the attendance lists for training are available on TMP, e.g., Photos of training on OHS gear on 19 November 2008; attendance list for training to use fire extinguishers on 31 October 2008, attended by 26 members.


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TMP uses several contractors for its operations, e.g., FFB transport, road heaper, mill maintenance, etc. All of them are licensed and registered.

5 ENVIRONMENTAL RESPONSIBILITY AND CONSERVATION OF NATURAL RESOURCES AND BIODIVERSITY

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

Closed

Tunggal Mitra Plantation (TMP) has a revised Environmental Impact Assessment (AMDAL/RKL-RPL) document which had been approved by the Regional Environmental Impact Control Corporation (BAPEDALDA) on August 23, 2006, by District Rokan Hilir, No. 666.1/AMDAL-BAPEDALDA/2006/12. The assessment covered both the mill and estates. The area covered was the previous 18,000 ha, now reduced to 13,836 ha. The mill capacity is 45 - 60 tonnes/hour, with actual average of 55 tonnes/hour. TMP reports every 6 months on the progress of the plan to BAPEDALDA District Rokan Hilir and the Environmental Department (BLH) Riau Province. The last RKL/RPL report sent covered July - December 2008, accompanied by covering letter. 002/TMP/PSD/UM/II-2009 dated 23 January 2009.

TMP has sent the current RKL/RPL report to the related department on behalf of 2nd semester (July - December 2008), and proved as Companion Letter No. 002/TMP/PSD/UM/II-2009, Dated on 23 January 2009. The RKL/RPL report covers environmental monitoring and assessment, such as liquid waste and water quality (BOD), gaseous emissions and the general condition of the surrounding areas where the local communities live. The environmental parameters reported on are such as: a) Liquid wastes, recorded monthly (last record on May 2009, the results still pending). b) Water quality in the observation well, recorded every 6 months (last record on January 2009).

c) Gaseous emissions are recorded every 6 months (last record on August 2008). However, boiler emissions are not reported nor the progress on smokestack testing (included in the Mill detailed budget for 2009/2010). d) Soil fertility is analysed yearly (last analysis in June - July 2009) e) Hazardous wastes, recorded every month in all estates and mill. The RKL/RPL report also includes: a) Pest and Disease incidence; b) Social economic and traditional culture of local communities (questioner for local communities is available on April 2009). TMP plans to have a complete social impact assessment done by Riau University. All the records taken above have not been analysed and evaluated for any corrective action to be taken. (See Indicators 5.3 and 8.1).


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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.

2009.08

TMP has assessed its areas for protected, rare, threatened or endangered species in April 2009, and drawn up a Dissemination of Species Map. Notice boards have been put up to discourage entry in the sensitive areas. The monitoring should be continued into the future and done every 3 months by the Estate Assistants and Mandores. Posters and signs were sighted in several places in the estates warning against disturbing the protected species. The signs are placed in areas frequented by the public, e.g., at the entrance to Manggala Estate. The MGE-3 estate manager has issued Memo 019/RSPO/PT TMP/V/09, 27.05.2009 assigning officers to monitor any plans and activities for any protected, rare, threatened or endangered species, and HCV habitat. The officers so far chosen are a Senior Assistant and Division Assistant. The knowledge of officers on the matter should be increased with the appropriate training.

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

2009.09

All environmental aspects in the estates and mill have been identified in the RKL/RPL report which is for monitoring the environmental parameters. The waste and pollutions sources identified and documented are for POME, of boiler/generator emissions and hazardous wastes. Liquid wastes, e.g., POME, are pounded and an-aerobically digested in 10 ponds. The treated effluent with reduced BOD is then applied to the land in flat beds. TMP has 17,900 flat beds covering 180 ha. The ponds are monitored monthly for the BOD levels, and every six months for monitoring well. The washings from knapsack sprayers are kept in a specific pond as seen in the House of Block Spraying System of MGE-3. But auditor has found poor handling of washing from knapsack sprayer in the house of Block Spraying System at Division 3 MGE-1. Air pollution (from the boiler/generator) is controlled by routine maintenance, especially for the boilers. To reduce pollution from over-working, two boilers are maintained and another one planned (with capacity 45 tonnes/hr steam). The old boilers will be overhauled on July 2009 with funds provided in the Budget. For hazardous wastes, TMP has prepared a storage area for the waste containers within the mill compound. TMP is seeking permission from the Ministry of Environment (KLH) for managing the area. For fuel/oil wastes, there is secondary containment and oil traps to avoid spillage on the soil. However, on the team visit to MGE-2, the soil around the fuel tank was heavily contaminated, indicating poor maintenance. Hazardous wastes in the estates and mill are recorded and kept in a store room, with signs warning of the potential danger. The wastes include pesticide containers, batteries, and waste oil and used oil filters. TMP has not yet disposed of any waste container because it has not yet obtained a licence for dealing with the wastes. However, some waste oil is used as lubricant for engines in the mill. Washings from knapsack sprayers are poured into a tank and then used to spray weeds.


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Wastes are monitored in the estates and mill. They include POME, boiler/generator emissions, and hazardous waste containers.

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

2009.10

The use of renewable energy in the mill is monitored in the manager’s Monthly Report on the mill. Water consumption is assessed over the year, e.g., January – December 2008, with the result showing excessive consumption - 1.2 tonnes water/tonne FFB, more than the target of 0.9 tonne water/tonne FFB. To reduce the consumption, TMP plans to install a special water pipe to supply water only for production. For electricity and fuel consumption, TMP has not completed its evaluation and plans for continuous improvement in efficiency. The use of fossil fuels is monitored in the manager’s Monthly Report on the mill. However, there has not been any evaluation of the data nor any plan drawn up for continuous improvement in efficiency.

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

2009.11

TMP has a policy of zero burning for land clearing.

The procedures for emergency response to fire are available. However, there has been no occurrence of fire. TMP therefore conducts fire drills, the last in January 2009 in MGE-3. However, no evaluation has been done on the effectiveness of the drills, and whether it should be ‘enlarged’ to involve the local communities as well.

TMP has placed and maintained fire fighting equipment around its properties. In the fields are towers to detect fires.

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

Closed

There is identification of the sources of pollution. In the mill, atmospheric pollution is by the boiler and generator. In the latest RKL/RPL Report, the last measurement of air emissions was on August 2008 (boiler smokestack, not completed yet). TMP plans to build better measurement facilities in 2009, the cost already included in its Budget 2009/2010. Pollution by the boiler and generator are controlled by proper maintenance, and not over-stressing the machinery. It has 2 x 22t boilers to reduce the individual load, and plans to add another (45 t) and overhaul the old ones by July 2009. Liquid wastes, e.g. POME, are processed by storage in retention ponds where anaerobic digestion reduces the BOD. TMP has ten ponds with specific treatment in each. The treated effluent is applied to the field in flat beds. TMP has 17,900 flat beds covering 180 ha. The ponds are monitored monthly for their BODs.


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

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

2009.12

Based on previous Environmental Impact Assessment (AMDAL or EIA) on 24 May 2004 and the revised EIA which had been approved on 23 August 2006 by Environmental Agency Rokanhilir No. 666.1/AMDAL-BAPEDALDA/2006/12, there was not many information about social impact assessment for estates and mill. The information only covered the classifying the activities into negative and positive impact. The negative impact from activities was consisted of: 1) provision of non forest areas, 2) land clearing, and 3) procurement of infrastructure; and the positives impact from activities of: 1) Procurement of infrastructure, 2) Cover crop planting, 3) Planting of main crops, 4) maintenance of Immature and Mature crops, and 5) Labour vacancy. The EIA recommended through technology, organisation and social economic approach, the social impact had been analysed for direct or indirect impact activities because of the communities are involved in oil palm and rubber cultivation that were living around the TMP’s areas.

A social impact assessment will be done for the estates to identify the company’s influence on the local communities. The assessment will be done by Riau University in July 2009. In the meantime, TMP collects social economic information by questionnaire surveys, however the data collected so far are inadequate to analyse the social impact caused over the last 15 years.

There were records of Corporate Social Responsibility (CSR) activities for year 2006-2008 and

TMP has a plan of CSR activities for year 2009-2010 that still being processed to be approved by Minamas Management, especially for the more expensive programmes, such as 1) development of villages, 2) Training on best practices for palm oil, 3) training for land fire management or emergency response, and 4) salaries for school teachers in the estates. This established plan of CSR actually covered 19 activities and not considered yet the community basic need, but TMP will be reviewed into social impact assessment (collaborate with Riau University). Data below described the cost of CSR programme for periods Year 2006-2008 (Data sources: TMP CSR Report 2006-2008).

Year 2006 2007 2008 Cost of CSR (IDR) 52,808,250 116,429,920 97,721,356

TMP reported their activities due to their identified social impacts and CSR programme into environmental monitoring and management report (RKL/RPL) every six months to environmental agency i.e. BAPEDALDA District Rokan Hilir. Meanwhile, TMP did not implement the smallholder scheme; TMP mill only processes FFB from their estates, because of: 1) uncontrolled FFB quality, 2) commitment by TMP to maintain high quality in its products, and 3) to ensure that all the FFB processed is sustainably produced.


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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. Closed

TMP has documented procedures for stakeholders to request information from it (Documents SOP RSPO/1.1/PI issued 4 March 2009 and SOP RSPO/ 6.2/ KKM issued 2 April 2009). All the documents are recorded in the Registration Book of Communication and Consultation With The Communities.

TMP has a list of stakeholders - national, province, district, sub district and local governments, business partners, NGOs, local communities and the press. However, some of them have no contact address, so cannot be contacted immediately. TMP has been updating the list. TMP recognizes that its most important stakeholders are: 1) Central Government (Land Affairs Corporation, Ministry of Agriculture, Forestry Minister, Coordinator of Investment Body/BKPM); 2) Provincial Government (Labour Department, Land Affairs Corporation of Riau Province); 3) District Government (Land Affairs Corporation District Rokan Hilir); 4) Business Partners (GAPKI, Sawit Watch); 5) Local NGOs (Jikalahari, WWF, WALHI, Telapak); 6) Local farmers; and 7) Local trader-buyer organizations.

Requests for aid from the local communities are recorded in chronological order, and responded to. TMP has a Registration Book for Information Requirements and Consultation with Local Communities, which was started in 2009. There is a SOP for persons-in-charge to provide requested information, in a flowchart. Requests for information on labour, best practices, FFB and CPO production, are recorded and responded too. Requests which cannot be granted are forwarded to the General Manager of Riau Estate, and some of them straight to the Head Office in Jakarta.

TMP has assigned its Plantation Services Department (PSD) to communicate with the local communities in the resolution of any problems. The representatives are Ms. Sumiyati and Mr. Maryono, supported by the Heads of Estate Administration - Mr. Nasrul (MGE-1), Mr. Hendry (MGE-2), Mr. Framka Sianturi (MGE-3) and Mr. Surya (Mill). Those experienced personnel are directly accessible to the PSD Department which will communicate to Land Committee as a responsible party.

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

Closed

TMP has its own SOPs - RSPO/6.3/PKM and RSPO/6.5/PKK, both issued 2 April 2009 – for receiving complaints from the local communities and TMP workers. The documents have a response flowchart, and the complaints are recorded in the Registration Book of Complaints which was started in 2009. The complaints thus far received have been: 1) Flies caused by EFB application, 2) Main drain of TMP overflowing in the community area, 3) Dust from the main road in the villages, and road damage by CPO transport and TMP vehicles, 4) Few locals employed as workers in the estates and mill. The handling of complaints is properly recorded in the estate office. Another document of land resolution is the Summary of Completed Land Dispute Negotiations of PT TMP, kept in the Branch Office in Pekan Baru and Head Office in Jakarta. However, TMP has not determined the length of time to keep the documents in the file. TMP has a budget for compensation to settle land disputes, which mostly concern young mature areas in peak bearing which are expensive to compensate - Rp 40 - 100 million a hectare. From the original 9,599.1 ha of disputed land, 7,176 have been negotiated, 2,405 ha still in process, and 18.1 ha not yet started.


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The procedure for deriving compensation has to be mutually agreed. It is currently under review. The procedure for Identification and calculating fair compensation is included in the SOP for Occupation Conflict Settlements. TMP has a determined procedure for land conflict settlement with the local communities: Hand it to the PSD which comprises several estate personal and responsible persons managing several units in Minamas holding.

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

Closed

TMP derives its compensation sum for disputed land by negotiating with the farmers’ convened. The process is witnessed by local government officials (Kepala Desa and Camat). The details of negotiation are documented in the meeting minutes and signed by the local community representatives and stamped. The mechanism for calculating compensation is in the SOP on Conflict Resolution. All the documents are recorded properly, and maintained in the estate and PSD office. There are records available for compensation settlements reached - minutes of meetings, summary completion table, statement of compensation amount, and receipt from affected farmers of having received compensation. The records should prevent future claims on the land already paid for. A list of the people entitled to receive compensation is kept in the branch office and head office of PT TMP, and should also be maintained in the estate office as well. The estate management suspects that some of the illegally occupied lands are held by people who work in TMP from the local communities. As a result, TMP has decided to maintain all the documents in the branch office and head office.

The following table describes the completeness of land conflict resolution during 1990-1999: (SAA = Siarang-arang village, PD = Pematang Damar village, TN = Teluk Nayang village)

Table 4. The Completion of land conflict resolution during 1990-1999

The records comprised the Summary Compensation Settlements for Land, Buildings and any Plants in the land under dispute, and also: 1) Proposal from the occupant, 2) Agreements to compensation settlement, 3) Statement letter of land extrication, 4) Statement letter of unprosecution in the future, 5) Receipt of compensation received by the occupant.

Village No Aspect SAA/ PD TN PUJUD Total

1 Area (ha) 1094,64 318 5730,18 7142,82 2 Stages 7 4 22 33 3 Compensation (Rp) 216.805.845 86.629.250 1.435.198.830 1.738.633.925 4 Total owners 167 48 671 886 5 Year of completion 1991 to 1994 1991 to 1994 1990 to 1999

Source : Summary of Land Compensation in the illegal land occupation PT TMP


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

Closed

TMP has records of the salaries paid to workers. In a letter by the Riau Governor, Ref. 41/2008 on 15 December 2008 and applicable from 1 January 2009, the basic pay was set at Rp. 901,600/month. However, TMP, in cooperation with the Corporate Association of Sumatera Plantation Companies (BKS-PPS) and Association of Indonesia Oil Palm Companies (GAPKI) Riau affiliation, has adopted Rp.940,000/month, backdated to 1 January 2009, and signed on 4 February 2009. This is higher than the minimum pay by the Governor. On the above matter, Minamas, as holding company, has issued Memo 068/HRM-i3/II/09 on 5 February 2009, stating the minimum pay of Rp. 940,000/month (25 working days) with indiscipline penalty of Rp 37,600/day. In practice, even the lowest permanent workers receive Rp. 993,990/month. In addition, TMP gives a rice allowance as a part of salary calculation. According to the Statement Letter from Head of Labour Department District Rokan Hilir No. 05/DTK/W KW I/III/2009, the allowance is 15 kg/month for individual workers, 9 kg/month each for husband/wife, and 7.5 kg/month for children (maximum of 2). TMP has agreed working regulations and Cooperation Agreements (KKB) with the worker representatives. The regulations confer rights, allowances and housing according to the salary earned. TMP has consistently implemented government regulation 13/2003 in cooperation with the Corporate Association of Sumatera Plantation Companies (BKS-PPS) and Association of Indonesia Oil Palm Companies (GAPKI) Riau affiliation. TMP provides fringe benefits to its workers - medical clinic, free education from elementary to junior high school and school bus. Potable water and electricity are free. There is also free public transport to work, as per regulations BKS-PPS and F-SP.PP-SPSI in 2008 Section XV, Subsections 1 - 11. In addition, there are scholarships for workers or their family members to University. TMP has asked its contractors to provide the workers transport to work, fulfilling an obligation to ensuring their health and safety.

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.

Closed

TMP does not restrict the freedom of its staff at all levels of management, as evidence by the existence of a Labour Association for staff and permanent workers. This is required under regulations BKS-PPS and F-SP.PP-SPSI in 2008, Section II, Subsections 1 and 2. All workers are free to join trade unions, whether internal or external.

Minutes are kept of meetings with the labour union on TMP operational activities. The meetings are required by regulations BKS-PPS and F-SP.PP.SPSI in 2008.

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 programmes. Children are not exposed to hazardous working conditions.

Closed

The minimum age for employment is 17 years old or already married – determined by the Human Resources Manager. Children under 17 years old are not allowed to work, and should be in school from 7 am to 1 pm. TMP keeps records of its worker details - age, education level and provenance.


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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.

Closed

TMP has a scheme for labour recruitment (Syarat Kecukupan Umum/SKU). There is to be no discrimination on race, caste, national origin, religion, disability, gender, sexual orientation, union membership, political affiliation or age. This guarantee is included in the employment contract between the company and its workers, and also in the Cooperation Agreement by BKS-PPS. TMP offers equal opportunities for male and female workers of any race, including expatriates.

Equal treatment for workers is guaranteed in the General Appropriateness Requirement (SKU). Nevertheless, priority for employment is given to the local communities, and worker family members (including those whom the family’s member has retired and/or died). Workers are expected to be properly attired and behave civilly by a letter from the Senior Manager on 19 January 2009. This is to ensure the protection of reproductive rights and to prevent sexual harassment and violence against women in the estates. There are severe penalties against gambling, drunkenness and the taking of drugs.

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

Closed

The company policy on sexual harassment and violence is documented on the Cooperation Agreement (PKB), Section XXII, Subsection 5 – Broke over the Laws and Morality. TMP allows menstruation (2 days) and maternity (90 days) leave for women with full pay. For example, Ms Sukapti in Div.II MGE-1 obtained maternity leave with full pay. Records kept on sexual harassment have shown no cases. Any case would be recorded and reported for evaluation and the appropriate action to be taken.

The company has a reproductive rights policy and evidence for its implementation in the records of leave given for menstruation and maternity. The file is kept by the human resources department. For maternity leave, 45 days are given – before and after birth – for total 90 days.

There is no grievance mechanism for workers and the local communities. Grievances are orally reported to the supervisor or security guard and forwarded to the manager.

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

Closed

TMP has no mechanism for determining the FFB price because it does not purchase any FFB from outside sources. The CPO price is taken as the actual price from its Marketing Office in Medan. Nevertheless, TMP has the market prices for FFB which is available to local farmers. The list is updated monthly.

TMP has several agreements with contractors to supply services, e.g., contract for EFB transport at Rp 19/kg with Mr. Juma in Dusun I, RT 01 RW01, Tanah Merah Galang village, Subdistrict Deli, District Deli Serdang, North Sumatra Province, from 1 March 2009 - 31 May 2009.

TMP pays its contractors in time every month, e.g., for EFB transport, CPO transport from mill to Dumai, and instalation of mill engines.


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

Closed

TMP (estates and mill) had records of contributes to local government and communities. The forms of contributes that TMP demonstrated such as, a. Taxes payment to the government i.e. income tax (PPh), and Building and Land Tax (or

Pajak Bumi Bangunan). In Year 2008; TMP has paid Income tax Rp. 13,550,174,216 on NPWP 01-366-775-3-062-000, PKP: 01-366-775-3-062-000 on 30 October 2008. PBB paid Rp 1.090.284.680 on 22 October 2008. In Year 2007; Income tax paid of Rp. 20.729.135.440 on NPWP 01-366-775-3-062-000 and PKP 01-366-775-3-062-000 in 31 March 2008. PBB paid Rp. 1.033.312.220 on 2007 The taxes have already been paid to the Tax Office Account 2021101.00009, Bank of Riau, Bagan Siapi – api

b. Villages roads maintenance by delivering and using grader machines in Pujud village and Sukajadi Village

c. Providing transportation and education facilities to play groups, elementary school, junior and senior high school for employees and communities around estates and mill

d. Improvement and providing health facilities e. Facilitating land fire facilities to local communities f. Charity to local community in Moslem day (once a year), such as in form of livestock

(e.g. cows, etc) g. Facilitating access to the traditional markets for easier found the common goods

Meanwhile due to the contributing to local sustainable development, TMP has records of Corporate Social Responsibility (CSR) activities for year 2006-2008 and TMP also has a plan of CSR activities for year 2009-2010 however was still being processed to be approved by Minamas Management, especially for the more expensive programmes, such as 1) development of villages, 2) Training on best practices for palm oil, 3) training for land fire management or emergency response, and 4) salaries for school teachers in the estates.

7 RESPONSIBLE DEVELOPMENT OF NEW PLANTING

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

Not Applicable

(NA)

NA (Not Applicable). TMP does not plan any new plantings after November 2005. TMP has 60 ha oil palm planted 2006 in Blocks A36 - A44 (8 blocks, not including Block A41 which is peat). This is not a ‘new’ planting but a replant of the 1999 palms killed in a flood. The area has been drained with new canals, and the risk of flooding greatly reduced. According to the AMDAL (RKL/RPL) documents, dated 23 August 2006 by BAPEDALDA District Rokan Hilir No. 666.1/AMDAL-BAPEDALDA/2006/12 (included Subdistrict Pujud, District Rokan Hilir), the total area assessed was 13,836 ha; it included the 60 ha of ‘new’ planting.

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

NA

NA (Not Applicable). TMP does not plan any new plantings after November 2005.

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

NA



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


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

NA


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

NA


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

NA


8 COMMITMENT FOR A CONTINUOUS IMPROVEMENT IN KEY AREAS OF ACTIVITY

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

2009,13

There are several action plans for monitoring continuous improvements of environmental and social impact observation, such as: 1) Reducing unpleasant odour from POME ponds in the mill operation unit, with bacteria circulation application inside the ponds, usage of mixer as knapping husk, and admission of bait. 2) Reducing air emission during mill operation, will be done by activate two boiler engines collectively. 3) Reducing waste from mill operation. For example; using kernel shell as a fuel material in the boiler operation. 4) Decreasing social impact of mill operation by preparing apprenticeship programmes for high school students, especially on the processing and maintenance section. 5) Repairing facility of hazardous waste management in the estate operation area. For example; builds a proper fuel station, storage for hazardous waste, and washery for knapsack and pesticide container. However, there are several results of monitoring and measurement that has not been analyzed to carry out corrective action and action plan as commitment of continuous improvements in key area of activities. For example; measurement result of observation well, the effectiveness of energy use for fuel material, result list of responses to information request, result of monitoring hazardous waste, the effectiveness of provisions of new boiler and routine maintenance programmes, the effectiveness of Tyto alba as biological control for rat damages, and other related subject. Available records of corrective action and progress report towards pre assessment visit previously.


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Annex 2. Mutuagung Peer Review’s Report Reviewers: Dr. Ir.Machmud Thohari, DEA Ir. Hariyadi, MS Issues and Comments Clarification/

explanation by MUTU

1 Appropriateness of team doing the evaluation The Assessor team are appropriately qualified to do the auditing. But, in 2.0 Assessment Process, it was not shown the area of expertise of each assessor.

Incorporated and amended.

2 Avoidance of conflict of interest. There was no conflict of interest in the auditing for certification.

Confirmed

3 Appropriateness of sites selected In general, the sites sampled were fairly representative (included production, environmental, and social aspect) although the times for sampling were very short.

The time for auditing was too short – only 3 days for the estates, 3 days for social observation, and 1 day for the mill. This may lead to careless observation, especially if the observations had to be taken at several sites.

To be considered for the surveillance visit.

II. General comments on the inspection report No Issues and Comments Clarification/

explanation by MUTU

1 Clarity The assessment report showed that a proper audit was done on PT Tunggal Mitra Plantation based on the RSPO P&C. However, there are unclear explanations to several criteria:

Criterion 1.1: There is no indication of the time TMP takes to supply requested information although it was stated TMP has compiled basic data for ready distribution.

Criterion 1.1 amended.

Criterion 1.2: Examples of commercially confidential information were not given. They should include financial data such as costs and income, and customer/supplier details. Nor were there examples of information which disclosure could result in potential negative environmental or social outcomes, e.g., areas with rare species which disclosure could increase the risk from hunting or capture, or sacred sites which the community wishes to keep private. There was also no explanation of the legal documents - work permit, HGU, etc.


Criterion 2.1: It was explained that there are relevant regulations for the estates and mill to comply with, but no evidence presented that the regulations are being followed, nor any explanation of the mechanism of compliance by TMP


Criterion 3.1: Whilst it is recognised that long-term profitability may be affected by factors outside direct control, the top management must demonstrate their attention to economic and financial viability through a long-term management plan.



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Criterion 4.4. On effective water use and the effects of water use on the local water resources. It must be ensured that water use does not adversely impact other users. This report has no data on the volumes of water used by the mill, or the effectiveness of maintaining surface and ground water quality from run-off and any negative impact on other users.


BOD data has been collected but not evaluated. The company should formulate measures to prevent contamination of surface and ground water by soil erosion, nutrients or chemicals leached by water runoff, and from the application of wastes, like POME.

Criterion 5.2: The report states "Implementation of identification is in the process of species (flora/fauna) categorization which is protected, rare, threatened or endangered status, and on the group of HCV habitat", It should be explained more details, because regulation of this has been provided. Moreover, this criterion is necessary for preparing the corrective action on the management operational planning. The evaluation regarding action plan of organization has not been explained by assessor.


Criterion 5.4: The company does not monitor the use of renewable energy per tonne FFB/CPO processed/produced.


Criterion 6.11: No evidence was presented on contributions to local development which should be made in consultation with the local communities.


Criteria 7.1 to 7.7: There is inadequate information on the applicable matters, and no explanations given.

Criteria 7.1 to 7.7 amended.

Criterion 8: This criterion is not explained clearly.

The explanation is clear.

2 Completeness

The completeness of this evaluation is as mentioned below:

Each criterion of RSPO P&C is completely presented, viz. 2 criterions (Principle 1), 3 Criterion (Principle 2), 1 Criterion (Principle 3), 8 Criterion (Principle 4), 6 Criterion (Principle 5), 11 Criterion (Principle 6), 7 Criterion (Principle 7), and 1 Criterion (Principle 8). But the analysis of the criterion has not explained properly (see Clarity above)

Amended.

3 Rationale for decisions made.

Several criteria do not have proper reasons, with the result that it is difficult to make decisions. Examples are criteria 7.1, 7.2, 7.3, 7.4, 7.5, 7.6, 7.7 and 8.1.

Criteria 7.1 to 7.7 amended.


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III. Specific comments on the certification decision, including non-compliances and remedial action to be taken. No Issues and Comments Clarification/

explanation by MUTU

1 Issue: Empty Fruit Bunch (EFB) application causes a lot of flies in Sungai Pinang village.

Comments: Disagree with assessor team on this matter. Before EFB application in the field, it should be decomposed fully until it no longer attracts flies.

Complaint verified by observation and interviews with local residents.

2 Issue: Organization oblivious to the needs of local communities, such as educational support needed, vocational training, extension services on oil palm management, etc.

Comments: This is a common situation in oil palm plantations. For ‘sustainability’, TMP should prepare an action plan to support the needs of the local communities.

Agreed

3 Issue: TMP should be consistent in complying with all regulations, national and local.

Comments: Complying with the Government regulations is the duty of all, and any infractions dealt with under the legal system. Thus, it is not necessary to recommend this matter.

The organization should comply with all pertinent regulations in its operations.

4 Issue: A Corporate Social Responsibility (CSR) programme needs to be seriously implemented by TMP for the local communities.

Comment: TMP should understand that having good relationships with the local communities will win it much goodwill, e.g., minimizing conflict with the residents.

Agreed.


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Annex 3. Result of RSPO Panel Committee Meeting of Mutuagung Lestari - RSPO Certification of PT Tunggal Mitra Plantation 26 June 2009 No Input and Responses

1 Prof. Dr.Ir. Sudirman, MSc

The effectiveness of RSPO P & C implementation by the auditee should be ensured by internal audits (SPI), e.g., implementation of safety measures.

During the internal audits, the overall implementation of SOP should be observed, especially on environmental and social aspects.

In general, TMP has adequate RSPO P & C implementation, but should pay more attention to the social sector. It should not only focus on charity to the communities, but also implement the CSR programme as it would increase goodwill and decrease the likelihood of social conflict.

Joint venture schemes with the locals should be considered to prevent social conflict.

2 Ir. Siswoyo, Msi

The recommendations from the Environmental Impact Assessment (AMDAL/RKL-RPL) for the estates and mill have not been implemented accordingly. However, organization has obviously improved its social aspects, including the way it handles land conflicts. For illegal land occupation, it should clarify the legality issue for the next surveillance visit, e.g., obtain the Official Statement of Land/SKT, etc.).

Social Impact Assessment that will be done on TMP by a third party should identify any social problems through a survey, and require CSR Implementation.

Consider to cover literature references or relevant requirements to the assessment report due to RSPO certification audit. Revising the number of TMP areas in accordance with annexed map because there was different number 500 hectares; areas condition (e.g. villages); wording or redaction checking.

The organization must ensure that its land has a valid RTRWP (At a public meeting with the BPN District Bengkalis, Rokan Hilir, it was clarified than an organization with expired HGU permit should have a current RTRWP).

The organization should implement its SOPs properly, perhaps by a PDCA (Plant-Do-Check-Action). Already clarified in Indicator 8.1.

Biodiversity monitoring should be done routinely according to the RKL/RPL requirements (at least yearly), and also three-monthly identification of TMP.

The riparian areas should be maintained as a protected area for biodiversity although TMP has already a programme to plant bamboo there.


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3 Handian, S. Hut, Msi

The organization should prepare a road map for implementing CSR programmes based on

the needs of the local communities, including increasing ability of local communities.

Ensures that the FFB supplied to the mill comes from certified areas. (At present, TMP processes only its own FFB)

The budget should have a special fund for social activities (Already recommended in the Assessment Report)

The organisation should formulate a mechanism to settle land disputes, and for OHS socialization, including agreement between TMP and harvester family Genk (helper), and 3rd party.

4 Conclusion

Internal Independent committee (Mutuagung Lestari) agreed that PT TMP recommended to be certified producer of SPO

This assessment report will be presented to the RSPO Secretariat for review and placement on the RSPO website for public comment before final approval.

Annex 4. List of Stakeholders contacted in audit of PT Tunggal Mitra Plantation

Agriculture Dept., The District of Pekan Baru Natural Resources Conservation Dept., The Province of Riau

Bank Mandiri branch office of Rantau Prapat PERTAMINA fuel station, Dumai region Directorate General of Estate Republic of Indonesia Plantation Dept., The Province of Riau Environmental Dept., The Province of Riau Primakas Transporter FFB and EFB contractor PT Bahana Nusa Interindo (kernel buyer) Forestry Dept., The District of Rokan Hilir PT Inti Benua Perkasatama (CPO buyer) GreenPeace Indonesia PT Inti Benua Perkasatama (Kernel Transporter) Head of Police, The Sub District of Pujud Riau University Head of Rokan Hilir District Road maintenance contractor Health Dept., The District of Rokan Hilir Sawit Watch Indonesia JAMSOSTEK Dumai The Head of Sub District Pujud Kompi Brimob The Head of Sub District Bangko Pusako Labor and Transmigration Dept., The District of Rokan Hilir

The Head of Village Desa Sukajadi

Labour Union (SPSI) of PT Tunggal Mitra Plantation The Head of Village Pematang Damar Laskar Melayu Bersatu NGOs The Head of Village Pujud Local communities of Pematang Damar village The Head of Village Siarang-arang Local communities of Siarang-arang village The Head of Village Sri Pinang Local Revenue Dept., The Province of Riau The Head of Village Teluk Nayang Manulife Insurance WALHI Ministry of Environment State WWF-Indonesia


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Annex 5. WORD GLOSSARY AMDAL : Analisis Mengenai Dampak Lingkungan dan Sosial (Social and Environmental Impact

Assessment) B3 : Bahan Beracun dan Berbahaya (hazardous waste) BAPEDALDA : Badan Penanggulangan Dampak Lingkungan Daerah (Regional Environmental Impact

Control Corporation) BPN : Badan Pertanahan Nasional (Land Affairs Corporation) BOD : Biological Oxygen Demand COD : Chemical Oxygen Demand CPO : Crude Palm Oil CSR/CD : Corporate Social Responsibility/ Community Development EFB : Empty Fruit Bunches FFB : Fresh Fruit Bunches HCV : High Conservation Value HGU : Hak Guna Usaha (Land Use Permit) IPM : Integrated Pest Management K3 : Kesehatan dan Keselamatan Kerja (Occupational Health and Safety) KKB : Kesepakatan Kerja Bersama (Collective Labor Agreement) LC : Land Clearing LD50 : Lethal Dosage (for 50% of the population to be killed) MSDS : Material Safety Data Sheet OER : Oil Extraction Rate Permentan : Peraturan Menteri Pertanian (Minister of Agriculture rules) PK : Palm Kernel POM : Palm Oil Mill POME : Palm Oil Mill Effluent PP : Peraturan Pemerintah (Government regulation) RKL/RPL : Rencana Kelola Lingkungan/Rencana Pemantauan Lingkungan (Environmental Management

Plan/Environmental Monitoring Plan) RSPO P&C : Roundtable on Sustainable Palm Oil Principle and Criteria SOP : Standard Operating Procedure SPSI : Serikat Pekerja Seluruh Indonesia (Labor Union) TMP : Tunggal Mitra Plantation UU : Undang – Undang (Act)