RSPO Audit Report

Audit Report

Certification Audit for

PT SERIKAT PUTRA - Lubuk Raja Mill and Its Supply Bases

FMS40061

RSPO Membership number: 1-0041-07-000-00 RSPO Member Name: PT. Salim Ivomas Pratama (SIMP) Including child numbers for each certification unit

Audited Address: Lubuk Raja Mill Its Supply Bases: Lubuk Raja Estate Bukit Raja Estate

Date of certification audit: 29 February – 4 March 2016 Date of special audit: 17 – 19 January 2017

COMMERCIAL- IN – CONFIDENCE I The contents of this report must not be disclosed to a third party without the agreement of the SAI Global Client

Audit Report

Table of contents Page Executive Overview 4 Abbreviations Used 5

1.0 SCOPE OF THE CERTIFICATION ASSESSMENT 1.1 Introduction 7 1.2 Audit Objective 7 1.3 Scope of Certification 7 1.3.1 Palm Oil Mill 8 1.3.2 Oil Palm Estate 8 1.3.2.1 Lubuk Raja Estate 8 1.3.2.2 Bukti Raja Estate 8 1.4 Location of Mill and Estates 8 1.5 Description of Supply Base 10 1.6 Date of Plantings 10 1.7 Area of Plantations 10 1.8 Approximate Tonnages Offered for Certification (CPO and PK) 11 1.9 Other Certificates Held 15 1.10 Organisational Information/Contact Person 15 1.11 Time Bound Plan for Other Management Units 16 1.12 Partial Certification Requirements 20 1.13 Date of Issue of Certificate 20

2.0 AUDIT PROCESS 2.1 Certification Body 20 2.2 Audit Methodology 21 2.2.1 Stage 1 (Pre) Audit 21 2.2.2 Stage 2 (Certification Audit) 21 2.3 Qualification of the Lead Auditor and Audit Team Members 21 2.4 Stakeholder Consultation 23 2.5 Date of Next Surveillance Visit 24

3.0 AUDIT FINDINGS 3.1 Action taken on previous audit issues 24 3.2 Claim and use of certification mark and or logo 24 3.3 Description of audit findings 25 3.3.1 RSPO Principle and Criteria, Indonesian National 25 Interpretation 3.3.2 Mill Supply Chain Requirements 121 3.3.2.1 Supply Chain Certification Standard 121 3.3.2.2 Supply Chain Certification System 131 3.4 Recommendation 134 3.5 Environmental and social risk for this scope of certification for 134 planning of the surveillance audit 3.6 Acknowledgement of Internal Responsibility and Formal Sign-off 135 of Assessment Findings

List of Tables Page 1 Mill and Estates GPS Locations 8 2 Estimated FFB Production of the supply base 10 3 Estates Age Profiles of Planted Palms 2016 10 4 Land use description of Lubuk Raja and Bukit Raja Estates in 11

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2016 5 Estates and Area Planted 2016 12 6 Estates FFB Production Trend 2013 – 2015 11 7 Lubuk Raja Mill Total CPO and PK Production 2015 and Estimate 12 Production 2016 8 Actual Lubuk Raja Mill Production of CPO and PK derived 13 from Lubuk Raja Estae and Bukit Raja Estate FFB in 2015 9 Estimated Lubuk Raja Mill Production of CPO and PK derived 14 from Lubuk Raja Estae and Bukit Raja Estate FFB in 2016 10 Certificates Held by Mill and Estates 15 11 RSPO Certification Time Bound Plan 16 12 List of internal and external stakeholder 23

List of Figures Page 1 Map of Mill and Estates Location 9

List of Appendixes Page A Audit Plan 136 B Previous Nonconformities and Opportunity for Improvement 140 Summary C Nonconformities, Corrective Actions and Observations 141 Summary D Nonconformities, Corrective Actions and Observations 174 Summary on Special Audit E Stakeholder’s issues and comment 186 F Definition of, and action required with respect to audit findings 209

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Executive Overview

This is initial certification audit. SAI Global has audited Lubuk Raja Mill PT Serikat Putra and its supply bases operations that comprising 1 (one) Palm Oil Mill and 2 (two) FFB supply bases owned by PT Serikat Putra, support services and infrastructure. There was no supply base from the independent third party. Stage 1 (Pre) audit was conducted on 15 – 18 December 2014 and Stage 2 (certification) audit was conducted on 29 February – 4 March 2016 against the Generic RSPO Principles and Criteria for Sustainable Palm Oil Production, May 2013 and RSPO Supply Chain Certification Standard, CPO Mill, Module E Mass Balance, November 2014.

Nine (9) minor and nineteen (19) major non-conformances were issued during this audit. The organization has followed up by submitting correction and corrective action plan. Follow up audit for verification on the correction and corrective action of the major and minor NCR issued and clarifying supply chain module was done on 21 July, 2 September and 4 November 2016 and 21 November 2016 for clarifying the time bound plan. The issued findings in the certification audit has been rectified and considered as closed.

There report is also for Special Audit conducted on 17 to 19 January 2017 as follow up for ASI’s major NCR #30809. The special audit resulted 9 (nine) Major Non-conformities and 1 (one) minor non-conformity. Follow up audit for verification of the corrective action taken to the nonconformities has been conducted on 10 to 12 April 2017 (onsite) and 27 to 28 April 2017 (offsite). Follow up audit result show that 8 Major Non-conformities has been closed, 1 minor non-conformity is open and 1 Major Non-conformity is deleted since there is clarification from RSPO described that “An HCV assessment report that was conducted before 1 Jan 2015 (prior to the introduction of the HCVRN ALS scheme) for the existing RSPO certified plantation does not require an update”.

Based on correction and corrective action taken, the audit concluded that PT. Serikat Putra Lubuk Raja Mill and its supply bases operation were found complies with the requirements of the Generic RSPO Principles and Criteria for Sustainable Palm Oil Production, May 2013 and RSPO Supply Chain Certification Standard, CPO Mill, Module E Mass Balance, November 2014. The estimate figures of production offered for certification 2017 are:

Estimated tonnage of certified CPO produced 59,177.38 MT Estimated tonnage of certified PK produced 13,762.18 MT

Therefore PT Serikat Putra Lubuk Raja Mill and supply bases can continues to be certified as RSPO Supply Chain Certification Standard, CPO Mill, Module E Mass Balance CPO and PK producer.

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Abbreviations Used

ABT Ground water (Air Bawah Tanah) AK3U Safety Office (Ahli Kesehatan dan Keselamatan Kerja Umum) ANDAL Environmental dococment (Analisis Dampak Lingkungan) APU Surface water (Air Permukaan) BKM Supervisor Report (Buku Kegiatan Mandor) BLH Environmental Agency (Badan Lingkungan Hidup) BOD Biological Oxygen Demand BPJS Badan Penyelenggara Jaminan Sosial BPN National Land Agency (Badan Pertanahan Nasional) BRE Bukit Raja Estate CEO Chief Executive Officer COD Chemical Oxygen Demand CPO Crude Palm Oil CSR Corporate Social Responsibility EFB Empty fruit bunch FFB Fresh Fruit Bunch EHS Environmental Health and Safety ERP Emergency Response Plan FGD Focus Group Discussion FR Frequency Rate GAP Good Agriculture Practices GPS Global Positioning System HCV High Conservation Value HGU Land Use Title (Hak Guna Usaha) GHG Green House Gases IP Identity Preserved IPLC Waste water discharge permit (Izin Pembuangan Limbah Cair) IPM Integrated Pest Management ISCC International Sustainability and Carbon Certification ISO International Organisation for Standardisation ISPO Indonesia on Sustainable Palm Oil Jamsostek Assurance (Jaminan Sosial Tenaga Kerja) KER Kernel Extraction Rate KLH Ministry of Environment (Kementrian Lingkungan Hidup) KTU Administration Head (Kepala Tata Usaha) LA Land Application LB3 Hazardous Waste (Limbah Bahan Berbahaya dan Beracun) LD50 Lethal Dosage LRE Lubuk Raja Estate LRF Lubuk Raja Mill MCU Medical Check Up MSDS Material Safety Data Sheet NCR Non-Conformance Report NGO Non Government Organisation OER Oil Extraction Rate OHS Occupational Health and Safety P2K3 Safety Committee POME Palm Oil Mill Effluent PP Government Regulation (Peraturan Pemerintah)

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PPE Personal Protective Equipment PK Palm Kernel PKB Joint Working Agreement (Perjanjian Kerja Bersama) R&D Research and Development RABQSA Quality Society of Australia RKL Environmental Management Plan (Rencana Pengelolaan Lingkungan) RPL Environmental Monitoring Plan (Rencana Pemantauan Lingkungan) RSPO Roundtable on Sustainable Palm Oil RTE Rare Threated Endangered SA Social Accountability SCCS Supply Chain Certification System SIA Social Impact Assessment SIMP Salim Ivomas Pratama SIO Letter of Operation Permit (Surat Izin Operasi) SMK3 Occupational Health and Safety Management System (Sistem Manajemen Kesehatan dan Keselamatan Kerja SOP Standard Operating Procedure SPO Sustainable Palm Oil SPSI Indonesian Worker Union (Serikat Pekerja Seluruh Indonesia) SR Severity Rate TPS LB3 Temporary storage of hazardous waste UU Act (Undang-undang) YTD Year to Date

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1.0 SCOPE OF THE CERTIFICATION ASSESSMENT

1.1 Introduction

SAI Global conducted an audit of PT Serikat Putra – Lubuk Raja Mill and Its Supply Bases on 29 February – 4 March 2016 with Major Nonconformities identified. Follow up audit and clarifying supply chain module has been conducted on 21 July, 2 September and 4 November 2016 for verification of corrective action taken by the organisation and 21 November 2016 for clarifying the time bound plan.

A Special Audit conducted on 17 to 19 January 2017 as follow up for ASI’s major NCR #30809. The special audit resulted 9 (nine) Major Non-conformities and 1 (one) minor non-conformity. Follow up audit for verification of the corrective action taken to the non-conformities has been conducted on 10 to 12 April 2017 (onsite) and 27 to 28 April 2017 (offsite). Follow up audit result show that 8 Major Non-conformities has been closed, 1 minor non-conformity is open and 1 Major Non-conformity is deleted since there is clarification from RSPO described that “An HCV assessment report that was conducted before 1 Jan 2015 (prior to the introduction of the HCVRN ALS scheme) for the existing RSPO certified plantation does not require an update”.

The purpose of this audit report is to summarise the degree of compliance with the relevant criteria, as defined on the cover page of this report, based on the evidence obtained during the audit of your organisation.

SAI Global audits are carried out within the requirements of SAI Global procedures that also reflect the requirements and guidance provided in the international standards relating to audit practice such as ISO/IEC 17021, ISO 19011, RSPO Certification System, relevant RSPO Supply Chain Certification System and other normative criteria. SAI Global Auditors are assigned to audits according to industry, standard or technical competencies appropriate to the organisation being audited. Details of such experience and competency are maintained in our records. The audit team is detailed in the attached audit record.

In addition to the information contained in this audit report, SAI Global maintains files for each client. These files contain details of organisation size and personnel as well as evidence collected during preliminary and subsequent audit activities (Documentation Review and Scope) relevant to the application for initial and continuing certification of your organisation.

Details of your primary contact persons and their contact details and site addresses are also maintained. Please take care to advise us of any change that may affect the application/certification or may assist us to keep your contact information up to date, as required by SAI Global Terms and Conditions.

Please note that this report is subject to independent review and approval. Should changes to the outcomes of this report be necessary as a result of the review, a revised report will be issued and will supersede this report.

1.2 Audit Objective

This is initial (certification) audit. The purpose of this audit was to determine compliance of your organization’s management system with the audit criteria (Generic RSPO Principles and Criteria for Sustainable Palm Oil Production, May 2013 and RSPO Supply Chain Certification Standard,

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CPO Mill, Module E Mass Balance, November 2014) and its effectiveness in achieving continual improvement and system objectives.

It was also to verify the volume of certified and uncertified FFB entering the mill and volume sales of RSPO certified producers, and the implementation of any processing controls

1.3 Scope of certification

The scope of certification is the CPO production from one (1) Palm Oil Mill and two (2) FFB supply base owned by PT Serikat Putra. The supply chain of mill is audited including bulking station.

1.3.1 Palm Oil Mill

Lubuk Raja Mill PT Serikat Putra Location: Desa Sialang Godang, Kec. Bandar Petalangan, Kab.Pelalawan Riau Mill capacity: 75 ton FFB/hour GPS Location: 00º 07' 34,68" N 102º 07' 34,79" E

1.3.2 Oil Palm Estate

There are two supply base estates:

1.3.2.1 Lubuk Raja Estate PT. Serikat Putra Location: Desa Sialang Godang, Kec. Bandar Petalangan, Kab.Pelalawan Riau GPS Location: 00º 07' 25,90" N 102º 07' 34,86" E

1.3.2.2 Bukit Raja Estate PT. Serikat Putra Location: Desa Sialang Bungkuk, Kec. Bandar Petalangan, Kab.Pelalawan Riau GPS Location: 00º 10' 54,50" N 102º 08' 42,81" E

1.4 Location of mill and estates

PT Serikat Putra mill and estates are located in Riau Province. The geographical coordinate of the mill and estates are shown on Table 1.

Table 1: Mill and Estates GPS Locations included in certification assessment

MILL AND ESTATE EASTING NORTHING

Lubuk Raja Mill (LRF) 102º 07' 34,79" 00º 07' 34,68" Lubuk Raja Estate (LRE) 102º 07' 34,86" 00º 07' 25,90" Bukit Raja Estate (BRE) 102º 08' 42,81" 00º 10' 54,50"

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Figure 1 Map of Mill and Estates Location

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1.5 Description of supply base

The FFB sources are two (2) organisations owned by PT Serikat Putra and no FFB from the third party. The hectarage and FFB production of the plantation is shown on Table 2.

Table 2: Estimated FFB Production of the supply base

ESTATE PLANTED AREA (HA) FFB 2016 (TON/YEAR)

Lubuk Raja Estate 6,824 165,216.94

Bukit Raja Estate 5,101 123,859.99

Total 11,925 289,076.93

Source: PT Serikat Putra, March 2016

1.6 Date of plantings

Table 3: Estates Age Profiles of Planted Palms 2017

Year Lubuk Raja Estate Bukit Raja Estate Total % of Planted Area

1988 1,350 2,988 4,338 36.38 1989 458 589 1,047 8.78 1990 1,859 872 2,731 22.90 1991 2,870 652 3,522 29.53 1994 128 0 128 1.07 1995 124 0 124 1.04 1996 27 0 27 0.23 1998 8 0 8 0.07 Total 6,824 5,101 11,925 100 Source: PT Serikat Putra, March 2016

1.7 Area of plantation

The areas details for organisation owned estates are shown on Table 5. There is no new open area since November 2005.

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Table 4: Land use description of Lubuk Raja and Bukit Raja Estate in 2017 HECTARES AREA LUBUK RAJA BUKIT RAJA TOTAL

Mature area 6,824 5,101 11,925

Immature area 0 0 0

Total area planted 6,824 5,101 11,925

Emplacement 71 56 127

Road and bridge 237 177 414

Mill 5 0 5

Other 0 3 3

Total leased area 7,137 5,337 12,474

HCV Area (included in planted area) 56.01 54.89 110.90 Source: PT Serikat Putra, March 2016

Table 5: Estates and Area Planted 2017

ESTATE MATURE (HA) IMMATURE (HA)

Lubuk Raja Estate 6,824 0

Bukit RajaEstate 5,101 0

Source: PT Serikat Putra, March 2016

1.8 Approximate tonnages offered for certification (CPO and PK)

Approximate tonnages offered for certification is estimated based on the organisation last three years actual FFB production of Lubuk Raja and Bukit Raja Estate as well as last year CPO and PK, OER and KER of Lubuk Raja Mill. The OER and KER of each supply bases were estimated based on laboratory analysis.

Table 6: Lubuk Raja and Bukit Raja Estate FFB Production Trend 2013 – 2015

Actual Production (MT) YEAR Lubuk Raja Estate Bukit Raja Estate Total

2013 188,456.00 146,796.00 335,252.00

2014 178,426.00 133,843.00 312,269.00

2015 167,187.01 125,740.00 292,927.01

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Source: PT Serikat Putra, March 2016

Table 7: Lubuk Raja Mill Total CPO and PK Production 2015 and Estimate Production of 2017

FFB CPO PK Supply Base Processed Production OER (%) Production KER (%) (Ton) (MT) (MT)

Actual production 2016 Lubuk Raja Estate* 142,766.14 29,713.44 20.81 6,798.88 4.76

Bukit Raja Estate* 113,573.24 23,643.88 20.82 5,412.67 4.77

Total 256,339.38 53,357.32 20.82 12,211.55 4.76 Estimate production 2017 Lubuk Raja Estate 156,952.12 33,744.71 21.50 7,847.61 5.00

Bukit Raja Estate 118,291.49 25,432.67 21.50 5,914.57 5.00

Total 275,243.61 59,177.38 21.50 13,762.18 5.00

Source: PT Serikat Putra, April 2017 *Detail see Table 8

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Table 8: Actual Lubuk Raja Mill Production of CPO and PK derived from Lubuk Raja Estate and Bukit Raja Estate FFB in 2016

FFB (Ton) CPO (Ton) PK (Ton) Month Lubuk Raja Bukit Raja Total Lubuk Raja Bukit Raja Total Lubuk Raja Bukit Raja Total January 11,884.95 9,539.53 21,424.48 2,544.96 2,042.73 4,587.68 555.94 446.23 1,002.17 February 10,785.52 8,693.57 19,479.09 2,277.76 1,835.97 4,113.73 519.46 418.71 938.17 March 11,367.85 9,371.41 20,739.26 2,446.57 2,016.90 4,463.47 602.73 496.88 1,099.61 April 9,297.61 8,150.01 17,447.62 1,971.15 1,727.85 3,699.00 444.62 389.74 834.37 May 9,829.47 8,414.55 18,244.02 2,016.24 1,726.01 3,742.25 451.15 386.21 837.35 June 13,409.47 10,222.89 23,632.36 2,764.62 2,107.64 4,872.26 604.19 460.61 1,064.80 July 10,467.50 9,035.46 19,502.96 2,159.19 1,863.80 4,022.99 511.65 441.65 953.30 August 10,221.70 8,753.65 18,975.35 2,087.57 1,787.75 3,875.32 489.88 419.52 909.40 September 15,334.73 11,697.60 27,032.33 3,107.41 2,370.39 5,477.80 711.48 542.73 1,254.21 October 12,732.99 9,272.85 22,005.84 2,648.25 1,928.60 4,576.85 601.62 438.13 1,039.75 November 12,376.73 9,071.92 21,448.65 2,523.28 1,849.52 4,372.80 590.59 432.89 1,023.49 December 15,057.62 11,349.80 26,407.42 3,166.44 2,386.73 5,553.17 715.58 539.37 1,254.95 Total 142,766.14 113,573.24 256,339.38 29,713.44 23,643.88 53,357.32 6,798.88 5,412.67 12,211.55 Source: PT Serikat Putra, April 2017

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Table 9: Estimated Lubuk Raja Mill Production of CPO and PK derived from Lubuk Raja Estate and Bukit Raja Estate FFB in 2017

FFB (Ton) CPO (Ton) PK (Ton) Month Lubuk Raja Bukit Raja Total Lubuk Raja Bukit Raja Total Lubuk Raja Bukit Raja Total January 11,362.36 9,119.68 20,482.03 2,442.91 1,960.73 4,403.64 568.12 455.98 1,024.10 February 11,617.44 8,707.12 20,324.57 2,497.75 1,872.03 4,369.78 580.87 435.36 1,016.23 March 13,384.30 10,252.94 23,637.24 2,877.62 2,204.38 5,082.01 669.22 512.65 1,181.86 April 11,949.42 8,330.28 20,279.70 2,569.12 1,791.01 4,360.13 597.47 416.51 1,013.98 May 11,130.39 8,567.89 19,698.28 2,393.03 1,842.10 4,235.13 556.52 428.39 984.91 June 13,549.47 10,780.75 24,330.22 2,913.14 2,317.86 5,231.00 677.47 539.04 1,216.51 July 11,669.43 8,655.11 20,324.55 2,508.93 1,860.85 4,369.78 583.47 432.76 1,016.23 August 12,601.49 9,785.24 22,386.72 2,709.32 2,103.83 4,813.15 630.07 489.26 1,119.34 September 15,993.20 12,521.91 28,515.11 3,438.54 2,692.21 6,130.75 799.66 626.10 1,425.76 October 14,138.86 9,658.89 23,797.76 3,039.86 2,076.66 5,116.52 706.94 482.94 1,189.89 November 13,623.08 10,074.01 23,697.09 2,928.96 2,165.91 5,094.87 681.15 503.70 1,184.85 December 15,932.69 11,837.67 27,770.36 3,425.53 2,545.10 5,970.63 796.63 591.88 1,388.52 Total 156,952.12 118,291.49 275,243.61 33,744.71 25,432.67 59,177.38 7,847.61 5,914.57 13,762.18 Source: PT Serikat Putra, April 2017

The FFB from Lubuk Raja and Bukit Raja Estate are processed without FFB from other supply based. Due the CSPO is sent to bulking and mixed with CSPO and non CSPO from other Mill, therefore Lubuk Raja Mill used RSPO Supply Chain Certification Standard, CPO Mill, Module E Mass Balance.

Based on the above figures, the estimated of certified CPO and PK offered in 2016 for certification audit are:

Estimated tonnage of certified CPO produced 59,177.38 Estimated tonnage of certified PK produced 13,762.18

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1.9 Other certificates held

Table 10: Certificates Held by Mill and Estates

MILL/ESTATE OTHER CERTIFICATION HELD

Lubuk Raja Mill PROPER – Blue Level 2015 Source: PT Serikat Putra, March 2016

1.10 Organizational information/contact person

PT Serikat Putra JL. Jend. Sudirman, Kav 76-78, Indofood Tower, Jakarta 12910 Phone : (+62-21) 5795 8822 Fax : (+62-21) 5793 7504 Contact person : Mr Muhammad Waras Head of Environmental and CSR Email : [email protected]

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1.11 Time bound plan for other management units PT. Salim Ivomas Pratama Tbk. is committed to RSPO certification of all its Management Units located in Riau, South Sumatera, West Kalimantan and Central Kalimantan. Time bound plan has been developed to achieve the RSPO certification for all its Management Units by 2019. The time bound plan is realistic and challenging. The plan is detailed on Table 11.

Time bound plan for all Management Units was revised in November 2016. Time bound plan was changed to achieve the RSPO certification from 2016 to 2017 and 2019. The changes was due to certification process of a unit management took more than six months from certification audit date. SAI Global accepted the reason of the revision.

Table 11: RSPO Certification Time Bound Plan

No Company Mill Estate Region District Status Target Certified

1 PT. Salim Ivomas Sungai Dua Factory Sungai Dua Estate Pratama (SDF) (SDE) Riau Rokan Hilir Certified (2013) - Balam Factory (BLF) Balam Estate (BLE) Riau Rokan Hilir Audit in 2014, - corrective action to non-conformance findings has been sent to the CB on 11 March 2016. Certificate has not been rose. Kayangan Factory (KYF) Kayangan Estate (KYE) Riau Rokan Hilir Certified (2012) - Kencana Estate (KCE) Riau Rokan Hilir Certified (2012) - 2 PT. Gunung Mas Sungai Bangko Factory Sungai Bangko Estate Raya (SBF) (SBE) Riau Rokan Hilir Certified (2014) - Sungai Rumbia Estate- 1 (SRE-1) Riau Rokan Hilir Certified (2014) -

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No Company Mill Estate Region District Status Target Certified Sungai Rumbia Estate- Riau Rokan Hilir Audit in 2014, - 2 (SRE-2) corrective action to non-conformance findings has been sent to the CB on 11 March 2016. Certificate has not been rose. 3 PT. Cibaliung Sungai Dua Factory Tunggal Plantation (SDF) Cibaliung Estate (CBE) Riau Rokan Hilir Certified (2013) - 4 PT. Serikat Putra Lubuk Raja Estate Stage-2 Lubuk Raja Factory (LRF) (LRE) Riau Pelalawan 2016 Bukit Raja Estate (LRE) Riau Pelalawan Stage-2 2016 5 PT. Indri Plant Certified (April Napal Factory (NPF) Napal Estate (NPE) Riau Indragiri Hulu 2016) - 6 PT. Mentari Subur Muara Merang Factory Muara Merang Estate South Sumatra Musi Banyuasin Stage-1 Abadi (MRF) (MRE) 2017 Mangsang Estae (MSE) South Sumatra Musi Banyuasin Stage-1 2017 Karang Agung Estate South Sumatra Musi Banyuasin Stage-1 (KAE) 2017 Hulu Merang Estate South Sumatra Musi Banyuasin Stage-1 (HME) 2017 7 PT. Swadaya Bhakti Pulai Gading Factory Pulai Gading Estate South Sumatra Musi Banyuasin - Negaramas (PGF) (PGE) 2019 Medak Estate (MDE) South Sumatra Musi Banyuasin - 2019 8 PT. Cangkul Bumi Bumi Subur Factory Bumi Subur Estate South Sumatra Musi Banyuasin - Subur (BSF) (BSE) 2019 Bukit Indah Estate South Sumatra Musi Banyuasin - (BIE) 2019

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No Company Mill Estate Region District Status Target Certified 9 PT. Intimegah Sungai Ampalau Factory Sungai Ampalau Estate South Sumatra Musi Banyuasin - Bestari Pertiwi (SAF) (SAE) 2019 Megah Abadi Estate South Sumatra Musi Banyuasin - (MAE) 2019 10 PT. Pelangi Inti Mancang Factory (MCF) Mancang Estate (MCE) South Sumatra Musi Banyuasin - Pertiwi 2019 11 PT Citra Nusa Inti Kedukul Factory (KDF) Kedukul Estate (KDE) West Sanggau Stage-1 Sawit Kalimantan 2017 Trimulya Estate (TME) West Sanggau Stage-1 Kalimantan 2017 Sei Mawang Estate West Sanggau Stage-1 (SME) Kalimantan 2017 12 PT. Kebun Ganda Kembayan Factory Kembayan Estate West Sanggau Stage-1 Prima (KBF) (KBE) Kalimantan 2017 Tayan Hulu Estate West Sanggau Stage-1 (THE) Kalimantan 2017 13 PT. Riau Agrotama Nanga Silat Factory Nanga Silat Estate West Kapuas Hulu Stage-1 Plantation (NSF) (NSE) Kalimantan 2017 Bukit Setunggul Estate West Kapuas Hulu Stage-1 (BSE) Kalimantan 2017 Kapuas Estate (KKE) West Kapuas Hulu Stage-1 Kalimantan 2017 14 PT. Jake Sarana Miau Merah Factory Miau Merah Estate West Sintang - (MMF) (MME) Kalimantan 2019 Sekubang Estate (SKE) West Sintang - Kalimantan 2019 15 PT. Citra Kalbar Libau Factory (LBF) Libau Estate (LBE) West Sintang - Sarana Kalimantan 2019 Sepauk Estate (SKE) West Sintang - 2019

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No Company Mill Estate Region District Status Target Certified Kalimantan Tempunak Estate West Sintang - (TPE) Kalimantan 2019 16 PT. Hijau Pertiwi Lupak Dalam Factory Lupak Dalam Central Kapuas - Indah Plantation Kalimantan 2019 Kuala Kapuas Central Kapuas - Kalimantan 2019 Bunga Tanjung Central Kapuas - Kalimantan 2019 17 PT. Kebun Mandiri Mariango Factory (MGF) Penajam Estate (PNE) East Pasir Utara Stage-1 Sejahtera Kalimantan 2017 Mariango Estate East Pasir Utara Stage-1 (MGE) Kalimantan 2017 Source: PT Serikat Putra, November 2016

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1.12 Partial Certification Requirements . There was no evidence that uncertified management unit complied with partial certification requirements regarding no replacement of primary forest or any area identified as containing High Conservation Values (HCVs), land conflicts, labour disputes and legal non-compliance.

Major non-conformance against partial certification requirements was issued (NCR 2016-21).

Major Non-conformance NCR 2016-21  There was no evidence that uncertified management unit complied with partial certification requirements regarding no replacement of primary forest or any area identified as containing High Conservation Values (HCVs), land conflicts, labour disputes and legal non-compliance.

Major Non-conformance NCR 2016-21 closed:  HCV and SIA document was available, mentioned that uncertified units does not have: o Replacement of primary forest or any area identified as containing High Conservation Values (HCVs) or required to maintain or enhance HCVs in accordance with RSPO criterion 7.3. o Any new plantings since January 1st 2010 must comply with the RSPO New Plantings Procedure (Annex 5). o Land conflict o Labour dispute  Evaluation result of compliance with regulations mentioned that there was no non-compliance with regulation.  Internal audit for uncertified unit management has been programmed and will be conducted once a year

1.13 Date of issue of certificate and date of previous assessment

Date of issue of certificate will be the date on approval of this Assessment Report by the RSPO Secretariat.

2.0 AUDIT PROCESS

2.1 Certification body

PT. SAI Global Indonesia Graha Iskandarsyah, 4th floor Jl. Iskandarsyah Raya No. 66 C Kebayoran Baru, Jakarta 12160, Indonesia Phone : +62 21 720 6186, 720 6460 Fax : +62 21 720 6207 Contact person : Ms Inge Triwulandari Technical Manager Email : [email protected]

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There are three business units/divisions within SAI Global namely the Information Services Division, the Compliance Division, and the Assurance Division. The Assurance Division helps organisations manage risk, achieve process or product certification and drive improvement by providing training, registration audits and supplier management programs that can improve business performance. We provide independent audits, assessments and certification of your products or business processes to ensure they comply with industry standards or customer specific requirements. We understand how compliance with those standards can improve the efficiency, economy and profitability of your operation. With auditing and assessment staff located around the world, our clients include large global corporations as well as single site organisations.

2.2 Audit methodology

2.2.1 Stage 1 (Pre) Audit

SAI Global performed a Stage 1/Pre Audit to Generic RSPO Principles and Criteria version May 2013 on December 16th to 18th, 2014 review compliance of RSPO system, confirm the scope for certification, determine organisation’s preparedness for Stage 2 (Certification) Audit; review the adequacy of the SAI Global audit program and resources for Stage 2 (Certification) Audit including confirming and preparing the draft audit plan.

2.2.2 Stage 2 (Certification) Audit

The Stage 2/Certification Audit was performed on February 29th – March 4th, 2016 integrated with audit for ISPO, Indonesian Sustainable Palm Oil (Regulation of Indonesian Minister of Agriculture - Peraturan Menteri Pertanian #19/Permentan/ OT.140/3/2011). The audit programme was included in the body of report. The audit standard is RSPO Generic Principles and Criteria for Sustainable Palm Oil Production version May 2013 and the RSPO Supply Chain Certification System version November 2014 and RSPO Supply Chain Certification Standard, Module D – CPO Mill: Module D Identity Preserved November 2014). However by the end of the audit, the organisation was certified for RSPO Supply Chain Certification Standard, CPO Mill, Module E Mass Balance due to the certified product produced was sent to bulking station and mixed with non certified product prior to be delivered to customer.

The audit methodology for collection of objective evidences were site inspection, documentation and record review and interview with staffs, workers, and other stakeholders. Objective evidences

Audit Report from documentation/record review in one area may also be cross checked with other objective evidences in other areas and with the evidence of implementation on site during the audit. Inputs from stakeholders via letter, email, or other communication media were also considered for this certification audit.

Audit plan/realisation is available in Appendix A of this report on page 135.

2.3 Qualification of the lead auditor and audit team member

Ria Gloria – Lead Auditor and audited estate operation and legal aspect Ria Gloria graduated with Bachelor of Chemical Engineering from Bandung Institute of Technology in 1994. She has working experience as Environmental Consultant for many years. She has completed ISO 14001 (1995), ISO 9001 (2004), RSPO P&C (2009) lead auditor training courses, RSPO SCCS (2010) and ISPO (2012) lead auditor training courses. For the last 9 years she has been involved in quality (ISO 9001) and environmental (ISO 14001) management system audits for very broad industrial and in the palm oil sector since 2003 for several plantations and mills. She has received training for good agricultural practices including integrated pest management and high conservation value (2008-2009).

Dirgantara Bayu L – Audit Team Member and audited Occupational Health and Safety Dirgantara Bayu L, owned a bachelor degree majoring in occupational health and safety from University of Indonesia. He had experienced in field of QHSE MS (Quality, Health, safety and environment Management system) for several sectors of industry, such as: chemical manufacturing, construction and oil and gas exploration. Registered as lead auditor (ISO 9001, ISO 14001, OHSAS 18001 and ISPO) within the international professional auditor membership (IRCA & RABQSA) and also registered in local government ministry of manpower AK3U & HIMU (Safety officer & Industrial Hygienists) and ISPO Lead Training Auditor from Ministry of Agriculture. He joined SAI Global Indonesia in 2012.

Jarot Widyatmaka – Audit Team Member and audited Social Aspect Jarot Widyatmakagraduated with Industrial Engineering, Trisakti University in 1998. He has experience as a consultant and auditor quality management system for several years he had received training Lead Auditor for ISO 9001 (2000), ISO 14001 (2003), OHSAS 18001 (2010), ISPO (2014) RSPO (2014), while also training for social audits as Lead Auditor SA 8000 (2011) and Lead Auditor SMETA (2010). Over the last 15 years he was involved in the audit of the quality management system (ISO 9001) and social audits for various sectors, among others in his industry, Previous working experience at PT Surveyor Indonesia as a quality management system consultant (1998-2006) and then at PT SGS Indonesia as Lead Auditor for the quality management system (2006-2011) and joined PT SAI Global Indonesia in 2011. in June 2014 he has attended and passed for ISPO auditor training class XII

Fitria Rahmayanti – Audit Team Member and audited Environmental Aspect Fitria Rahmayanti owned bachelor degree majoring health nutrition from Gadjah Mada University. She has experience as nutritionist at hospital in Jakarta. She joined SAI Global Indonesia in 2012. She has followed the lead auditor training ISO 9001:2008 (2012), ISO 14001:2004 (2012), lead auditor training ISPO (2013) also registered in local government ministry of manpower AK3U. She is also the ISPO auditor who has obtained a certificate from the ISPO Commission, Ministry of Agriculture of Indonesia, in February 2013.

Setyo Sutadiono – Audit Team Member and audited supply chain Setyo Sutadiono is Bachelor of Chemical Engineering, Sepuluh Nopember Instistute of Technology

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(ITS) Surabaya in year 1993. Have working experience in Quality Control and Management System for 5 years in several industries. He has followed Lead Auditor Training for ISO 9001:2008 and RSPO SCC by David Ogg. He has experienced as an SAIG Auditor for 10 years and qualified for ISO 9001 and RSPO SC.

R. Yosi Zainal Muhammad – Technical Specialist for HCV R. Yosi Zainal Muhammad, graduated as bachelor from Department of Forest Resources Conservation and Ecotourism, Faculty of Forestry, Bogor Agricultural Institute in 2008. He had experienced as Sustainability Assistant at Musim Mas Group (2008-2009), as Research Assistant at World Agroforestry Centre for The Palm Oil Carbon Footprint Project, and as Sustainability Supervisor at Bima Palma Group (2011-2015) and in management of sustainable palm oil (RSPO and ISPO), environment management, social impact, and safety management system at palm oil plantations. Join at SAI Global since on December 2015 as Auditor for the ISO 9001:2008, ISPO, and RSPO. He had involved in the quality management system for various the industry sectors, RSPO and ISPO. Some training have been followed, i.e. Calculation of Palm Oil Footprint Carbon (2011), Safety Specialist (2013), Social Impact Assessment (2014), ISO 9001:2008 Lead Auditor (2015), ISO 9001:2015 Transition Auditor (2016), and ISPO Lead Auditor (2016).

2.4 Stakeholder consultation

Public notification was made on January 15th, 2016 and was published on RSPO website as well as SAI Global website.

Stakeholder consultation was performed into internal and external stakeholders. Internal stakeholders included staffs and workers. External stakeholders were selected by considering that they have an interest in the organisation activities, directly border with organisation area where the workers live. External stakeholders included NGO, governments and civil societies.

Letters were also sent to external stakeholders to invite for comment or individual / group discussions. Group and Individual discussions with stakeholders were conducted during the audit, to verify compliance against relevant criteria and indicator related to land status and conflict, environmental, social aspect and HCV. Surrounding Village of estate and mill has been chosen to represent societies. Group and individual discussion were conducted for two sessions. First session was conducted especially for surrounding stakeholders directly affected on estate and mill, i.e. Head of village, farmers. Second session was conducted especially for labour union, gender committee and selected workers.

Group interview was conducted for workers with similar job while others were interviewed individually in the scope to verify compliance against relevant criteria and indicator related to infrastructure facility, labour, social aspect (discrimination and sexual harassment), environment and HCV. The result of stakeholder consultation used to justify fulfilment of some indicators, e.g. criterion 2.2 indicator major 3, minor 1 and minor 2, criterion 2.3 indicator major 1, criterion 6.5 indicator minor 1, criterion 6.6 indicator minor 1, criterion 6.7 indicator minor 1, criterion 6.8 indicator minor 1, criterion 6.9 indicator minor 1, 2 and 3, criterion 6.10 indicator minor 1 and 2, criterion 6.11 indicator minor 1, etc.

The result of these consultations was provided in Appendix D on page 170.

Table 12: List of internal and external stakeholder METHODS OF CONSULTATION

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STAKEHOLDERS

Internal stakeholders ( mill & estates ) SPSI, Head of cooperative and gender Group discussion committee Representative of worker and family of worker Group interview and one on one interview External Stakeholders ( mill & estates ) Villages head of Air Terjun, Lubuk Keranji, Batin Group discussion Bunut, Angkasa, Balam Merah, Kuala Semundam, Lubuk Mandian Gajah, Lubuk Raja, Lubuk Terap, Pangkalan Maloko, Sialang Bungkuk, Sialang Godang, Sialang Kayu Batu and Terbangiang Traditional and Youth Leader (Tokoh Adat dan Group discussion Tokoh Pemuda) of Pelalawan, Sialang Godang, Terbangiang and Rawang Empat National Land Agency (Badan Pertanahan An invitation letter to comment was sent Nasional-BPN) of Pelalawan Forestry and Plantation Department of An invitation letter to comment was sent Pelalawan Environment Agency of Pelalawan An invitation letter to comment was sent Labour Department of Pelalawan An invitation letter to comment was sent District Head (Camat) of Bandar Petalangan An invitation letter to comment was sent District Police of Bunut An invitation letter to comment was sent NGOs: WWF, Sawit Watch, GAPKI, AMAN An invitation letter to comment was sent (Aliansi Masyarakat Adat Nusantara)

2.5 Date of next surveillance visit

The next surveillance visit will be 9 – 12 months from the date of certificate approval.

3.0 AUDIT FINDINGS

3.1 Action taken on previous audits findings

This is initial certification audit; there were no previous audit findings.

3.2 Claim and use of certification mark and or logo

This is initial certification audit, it was confirmed that no claim has been made and no use of certification mark and logo.

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3.3 Description of audit findings

3.3.1 RSPO Principle and Criteria, Indonesian National Interpretation

PRINCIPLES 1: COMMITMENT TO TRANSPARENCY CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) 1.1 Growers and millers provide adequate information to relevant stakeholders on environmental, social and legal issues relevant to RSPO Criteria, in appropriate languages and forms to allow for effective participation in decision making. 1.1.1 There shall be evidence that growers and millers provide adequate information on (environmental, social and/or legal) issues relevant to RSPO Criteria to relevant stakeholders for effective participation in decision making.

Specific Guidance: For 1.1.1: Evidence should be provided that information is received in appropriate form(s) and language(s) by relevant stakeholders. Information will include information on the RSPO mechanisms for stakeholder involvement, including information on their rights and responsibilities. a. Does the company maintain a list of a. List stake holders YES Information request and their respond were determined in a documented procedure. stakeholders? (E.g. listed by category has been established, divided Communication procedure was established and implemented by the organisation. and stakeholders listed should be site into 3 category e.g. Village Communication procedure describes the method to follow up the information specific) (Desa), Government, NGO & request from interested party. All information requests from stakeholder were listed Contractor b. What is the frequency of updating the and recorded by Mill and Estate on logbook “Record of information request and b. Updating stakeholder list? responses (Buku Permintaan Informasi dan Tanggapan)”. The information includes frequency of stakeholder list the problem of social, legal and environmental. c. Is there evidence of stakeholder was conducted yearly, last verification? updated data of stake holder The Organization has determined the type of information that is available and d. What type of information is provided? was February 2015. accessible to all stakeholders. List of information to the public specified in the (E.g. Environmental, social and legal) c. Verification of document "Form of matrix communication and environmental consulting and stakeholder was conducted by occupational health and safety" FORM/PROS-04/02. Information that is available to e. What is the frequency and level of access organisation? stakeholders such as : to this information? d. Type of - Survey report (plantation, manufacture & monthly industrial) for BPR f. How and where is the information information provided such as disseminated? environmental aspects, health & - Report of RKL – RPL safety aspect and social g. Who is responsible for providing & aspects as long as the - Report of Hazardous Material, Monitoring of environment updating information? information/data was not - HSE Report (P2K3 & AK3) h. Is there an SOP available to describe the concerning of confidential process (of information information (financial aspects Organization has established a mechanism for receiving and providing information (costs & revenue detail) and in the procedure SIMP – PROS – 04, dated 4 February 2013

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CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) sharing/dissemination)? supplier data. All information can be accessed by interested parties. Provision of information to be e. Access of known by Estate Manager and approved by the Estate Manager/Mill Manager/Area i. Are stakeholders aware of the type of information was received and Manager Agronomi. If the information is confidential trade must go through the information available and the procedures for accessing the information? follows up maximum 10 days approval of Head Office. Provision of information to the relevant agencies recorded after approval by local in the logbook "Buku Permintaan Informasi dan Tanggapan". management. All information provided in several stakeholders is in accordance with the terms and f. All information language used, for example in the form of reports and the contents of the report. can be accessed by interested Delivery of Information is delivered in Bahasa Indonesia. parties. Provision of information to be known by Estate Manager and approved by the Area Manager. If the information is confidential trade must go through the approval of Head Office. Provision of information to the relevant agencies recorded in the logbook "Buku Permintaan Informasi dan Tanggapan". g. PIC for providing information was Public Relation (Humas) and distributed to related person in charge. h. Organization has established a mechanism for receiving and providing information in the procedure SIMP – PROS – 04, dated 4 February 2013 i. Awareness was verified by each stake holder

1.1.2 (M) Records of requests for information and responses shall be maintained.

Guidance: Growers and millers should have a Standard Operating Procedure (SOP) to respond constructively to stakeholders, including a specific timeframe to respond to requests for information.

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CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) Growers and millers should respond constructively and promptly to requests for information from stakeholders. Growers and millers should ensure that sufficient objective evidence exists to demonstrate that the response is timely and appropriate. See Criterion 1.2 for requirements relating to publicly available documentation. See Criterion 6.2 on consultation. See Criterion 4.1 on SOPs. a. Does the company have an SOP to a. Yes, YES Organization has established a mechanism for receiving and providing information ensure constructive response to Communication, Participation in the procedure of Communication, Participation and Consultation No. SIMP – stakeholders? and Consultation No. SIMP – PROS – 04, dated 4 February 2014, which explain the mechanism of response to PROS – 04, dated 4 February b. Who is the personnel in charge (PIC)? requests for information by referring to the list of stakeholders and stakeholder 2014 information according to the principles and criteria for sustainable palm oil. Request c. Does the SOP cover the elements under b. Person in Charge for information outside of the list of public information should be approval of top 1.1.1? was Kepala Administrasi management and the provision of information comes with an official receipt. d. Is there a clear time frame for response to (Humas) and Area Manager request for information? Agronomi. With the use of the log book "Information request and response", the organization c. Yes the SOP was (estate and Mill) can monitor all of the information that is communicated to e. Are records of requests for information covering element 1.1.1 stakeholders. Request for information directly response by management and its and responses maintained? follow up as soon as possible. f. Are responses to requests for information Based on the logbook, majority of the letter containing the request for funding the timely and appropriate? activities of government institutions and local communities. However, organizations are routinely required to submit reports to the regulatory agencies, such as: quarterly report of hazardous waste material to Environmental Agency of district and province, Report to the CTF return period PPh21, P2K3 Report (Office of Manpower and Transmigration), and Report of the implementation of the RKL / RPL (Environmental Agency of the district, the province and the Ministry of Environment, monthly industrial survey report, etc.

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. 1.2.1 (M) Publicly available documents shall include, but are not necessarily limited to: • Land titles/user rights (Criterion 2.2); • Occupational health and safety plans (Criterion 4.7); • Plans and impact assessments relating to environmental and social impacts (Criteria 5.1, 6.1, 7.1 and 7.8); • HCV documentation (Criteria 5.2 and 7.3); • Pollution prevention and reduction plans (Criterion 5.6); • Details of complaints and grievances (Criterion 6.3);

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CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) • Negotiation procedures (Criterion 6.4); • Continual improvement plans (Criterion 8.1); • Public summary of certification assessment report; • Human Rights Policy (Criterion 6.13).

Guidance: This concerns management documents relating to environmental, social and legal issues that are relevant to compliance with RSPO Criteria. Management documents will include monitoring reports. The auditors will comment on the adequacy of each of the documents listed in the public summary of the assessment report. Examples of commercially confidential information include financial data such as costs and income, and details relating to customers and/or suppliers. Data that affects personal privacy should also be confidential. Ongoing disputes (within or outside of a legal mechanism) can be considered as confidential information where disclosure could result in potential negative outcomes for all parties involved. However, affected stakeholders and those seeking resolution to conflict should have access to relevant information. Examples of information where disclosure could result in potential negative environmental or social outcomes include information on sites of rare species where disclosure could increase the risk of hunting or capture for trade, or sacred sites which a community wishes to maintain as private. Growers and millers should ensure that sufficient objective evidence exists to demonstrate that the level of measuring and monitoring of the management plan, and information, is appropriate and made available. For National Interpretation: Specific approaches to personal privacy safeguards, including any legal requirements, will be considered. a. How are the management documents a. The document YES A list of information that can be obtained by other stakeholders in Lubuk Raja Estate listed in (c) below made publicly available? was listed in Formulir (Minor NCR has defined and available. List of information in Lubuk Raja mill documented in a Distribusi Informasi 2016-01 b. Where are the documents placed? form of matrix communication and environmental consulting and occupational FORM/PROS-04/02, Rev 02, closed) health and safety (FORM / PROS-04/01) contains material information c. Is the information provided adequate? Date 4 February 2013 include communicated to the public such as: Note: At minimum, an information provider of the document and summary of the document listed below receiver of documents. Survey report (plantation, manufacture & monthly industrial) for LRE should be made available. b. Document located - Report of RKL – RPL  Land titles/user rights (Criterion 2.2) in Kantor Besar (Mill/Estate) - Legal boundaries ,land use, by KTU - Report of Hazardous Material, Monitoring of environment c. Criterion 2.2 not classification, total area, grant - HSE Report (P2K3 & AK3) title, permit validity , NCR rights, available in the list. d.  Occupational health and safety plans The document available such as monitoring (Criterion 4.7); Minor Non-conformance 2016-01: - risk assessment and mitigation, plans of environment pollution emergency response plan, and report of HSE (P2K3 &  List of information that can be obtained by other stakeholders in Lubuk AK3) Raja Estate has been established however it does not complete with

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CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) training, accident records e. Yes, all monitoring information of Land titles/user rights (Criterion 2.2) such as : Legal  Plans and impact assessments report were publicly available. boundaries ,land use, classification, total area, grant title, permit validity , relating to environmental and social NCR rights impacts (Criteria 5.1, 6.1, 7.1 and 7.8); - main social and environmental impacts and mitigation measures,  HCV documentation (Criteria 5.2 and 7.3); - identification on HCV areas, maps, management and monitoring HCV  Pollution prevention and reduction plans (Criterion 5.6); - identification of pollutants, management and reduction measures  Details of complaints and grievances (Criterion 6.3); - nature of complaints, parties involved, status of case  Negotiation procedures (Criterion 6.4); - SOP, consultative, neutral, inclusiveness, timeframe, responsibility  Continual improvement plans (Criterion 8.1); - for all elements under 8.1,  Public summary of certification assessment report; - follow RSPO format  Human Rights Policy (Criterion 6.13). - policy statement should comply

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CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) to the requirements of 6.13 d. Do the management documents contain monitoring plans and reports? e. Are all monitoring reports publicly available?

1.31 Growers and millers commit to ethical conduct in all business operations and transactions. *1 New Criteria - Growers and millers commit to ethical conduct in all business operations and transactions. 1.3.1 There shall be a written policy committing to a code of ethical conduct and integrity in all operations and transactions, which shall be documented and communicated to all levels of the workforce and operations.

Guidance: All levels of the operations will include contracted third parties (e.g those involved in security). The policy should include as a minimum: • A respect for fair conduct of business; • A prohibition of all forms of corruption, bribery and fraudulent use of funds and resources; • A proper disclosure of information in accordance with applicable regulations and accepted industry practices.

The policy should be set within the framework of the UN Convention Against Corruption, in particular Article 12. a. Is there a written policy committing to a a. Yes there was YES Organization has established the policy "Principles of business ethics" PT Serikat code of ethical conduct and integrity in all written policy commitment to Putra dated May 1st 2015. PT Serikat Putra committed to continue practicing operations and transactions? all operations and responsible business ethics. Its consists of 5 policy can be summarized in : transactions. Signed on 1 May b. Does the policy include as a minimum: 2016 by CEO IndoAgri Mark - Not abusing power and position owned in the company in any form for personal  A respect for fair conduct of Wakeford use business? b. Policy already  A prohibition of all forms of corruption, includes fairness, corruption, - Do not use labour illegally traded bribery and fraudulent use of funds information. - No violence, threats and harassment both mentally, physically, sexually, verbally and resources? c. Policy and in writing against any party  A proper disclosure of information in documented and accordance with applicable communicated through all regulations and accepted industry organisation by put in the practices? banner and poster around the c. Is the policy documented and estate (each division office communicated to all levels of the and in the estate include mill)

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CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) workforce and operations, including d. Documentation contracted third parties? How is it and communication of policy communicated? was conducted in Bahasa d. Are the documentation and communication Indonesia done in the appropriate languages?

Note to auditor: The workforce should be interviewed to determine level of understanding of policy

PRINCIPLES 2: COMPLIANCE WITH APPLICABLE LAWS AND REGULATIONS CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) 2.1 There is compliance with all applicable local, national and ratified international laws and regulations. 2.1.1 (M) Evidence of compliance with relevant legal requirements shall be available.

Guidance: Implementing all legal requirements is an essential baseline requirement for all growers whatever their location or size. Relevant legislation includes, but is not limited to: regulations governing land tenure and land-use rights, labour, agricultural practices (e.g. chemical use), environment (e.g. wildlife laws, pollution, environmental management and forestry laws), storage, transportation and processing practices. It also includes laws made pursuant to a country’s obligations under international laws or conventions (e.g. the Convention on Biological Diversity (CBD), ILO core Conventions, UN Guiding Principles on Business and Human Rights). Furthermore, where countries have provisions to respect customary law, these will be taken into account. Key international laws and conventions are set out in Annex 1 Contradictions and inconsistencies should be identified and solutions suggested. For National Interpretation: All relevant legislation will be identified, and any particularly important requirements identified. a. Is the complete list of legal requirements  SIMP-PROS-02 Rev.02 dated 4 The relevant legal requirement or regulations for Lubuk Raja mill and estate and YES available? (Refer to relevant NIs or LIs for February 2013 – Identification Bukit Raja Estate have been established and identified. Record was sighted on (Major NCR list of legal requirements) and Evaluation on Compliance FORM/PROS-02/03 – Form Resume on Compliance of Regulation updated 2016 – 02 December 2015 includes the environment, Health Safety, Social, HCV and lend closed) b. Does the company have copies of the of Regulation and legal requirements? Requirements use regulation. The new regulation was identified, such as PermenLH 5/2014 Waste Water Quality Standard and PP 101/2014 Management of Hazardous  FORM/PROS-02/03 – Form Wastes.

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CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) Note to auditor: A due diligence on the Resume on Compliance of company/area or management unit on legal Regulation updated December The copies of legal regulation was sighted on soft copy also on hard copy include compliance should be conducted prior to field 2015 the environment regulation. audit. Any non-compliance should be verified

during the field audit.  FORM/PROS-02/01 dated 2 January 2012 – Form Relevant legislation includes, but is not limited Major Non Conformance 2016-02: to: regulations governing land tenure and land- Identification on Compliance of use rights, labour, agricultural practices (e.g. Regulation updated December There was no evidence of compliance with relevant legal requirements. 2015. chemical use), environment (e.g. wildlife laws,  Permit of limited pesticides were expired, e.g. Starene pollution, environmental management and forestry laws), storage, transportation and  There was no evidence that several regulations were complied, e.g. still processing practices. It also includes laws domestic waste burning (UU 18/2008), made pursuant to a country’s obligations under  Monitoring result to erosion rate by using USLE method as required by RKL international laws or conventions (e.g. the RPL cannot be shown during audit. Convention on Biological Diversity (CBD), ILO core Conventions and UN Guiding Principles on  There was no evidence that logbook of hazardous waste was reported to Business and Human Rights. BLH Pelalawan District, BLH Riau Province, KLH, and PPE Sumatra for period October – December 2015 as required by permit  There was no evidence that land application report was reported to BLH Pelalawan District, BLH Riau Province, KLH, and PPE Sumatra for period October – December 2015 as required by permit  The facility and equipment for Estate fire prevention system was not proper and adequate refer to regulation/guidance from ministry of agriculture (e.g. fire tower numbers was lower than required, not available binoculars, compass, alarms/sirens, etc.)  Especially at the estate, the personnel of first aiders was not trained and certified yet as required regulation Permenaker 15/2008, also for HIPERKES paramedics was not certified yet as required Permenaker 1/1979  Several equipment at the estate was not had valid permit as regulation requirement, includes: compressors/pressure vessels, loader and excavators also the carbide welding vessel. 2.1.2 A documented system, which includes written information on legal requirements, shall be maintained.

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CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) a. Is there a document system which includes  SIMP-PROS-02 Rev.02 dated 4 The documented procedure was defined that the sustainable department/OHS YES the following? February 2013 – Identification officer was conducted identification, verification and registered the all legal and - Personnel in charge to manage and Evaluation on Compliance other requirements. The update frequency was conducted every 6 (six) month that - Set of legal documents of Regulation and Requirements last updated on period December 2015, the method of updating regulation was - Comprehensive list of international, conducted by internet, email and/or by direct visits to the government bodies. The national, sub-national and provincial  FORM/PROS-02/03 – Form new regulation was identified, such as PermenLH 5/2014 Waste Water Quality laws which details the requirements Resume on Compliance of Standard and PP 101/2014 Management of Hazardous Wastes. of specific to the mill and estate Regulation updated December operations. 2015 The evaluation of compliance was conducted together with the relevant functions - Relevant sections within the law that  License of hazardous waste between sustainable team and representative from estates and mill. The is identified and linked to activities temporary storage (TPS B3) communication to relevant functions was conducted by dissemination from sustainable team to respected persons at mill and estate. b. Are the documents available to all levels of  License of waste water The administrator/document control in charge at estate/mill were handled several management? discharge (IPLC) licenses and reports as obligation on local requirements, such as:  License of ground water utilization (ABT)  License of hazardous waste temporary storage (TPS B3) from Head of  RKL/RPL (Environment Pelalawan Regency No.KPTS660/BLH/2011/329 dated 22 June 2011 monitoring and measurement valid through 5 years (Lubuk Raja Mill), Head of Pelalawan Regency reports) No.KPTS.660/BLH/522/2015 dated 6 May 2015 valid for 5 years (Lubuk  Valid permits (pressure vessels, Raja Estate); KPTS.660/BLH/526/2015 dated 8 May 2015 valid for 5 lifting equipment, electric years (Bukit Raja Estate). installation, etc.)  License of Land Application from Head of Pelalawan Regency  Certificate of personnel (AK3U, No.KPTS660/BLH/470/2015 dated 1 April 2015 valid through 5 years. SIO, etc.)  License of surface water abstraction (APU) from Head of Mining and Energy Pelalawan Regency No.KPTS540/DPE/GEO-MIGAS/2014/078 dated 4 April 2014 valid for 2 years.  Environment monitoring and measurement reports (RKL/RPL)

The list of legal requirement include compliance evaluation were kept by each unit (SPO officer) and available to all levels of management. 2.1.3 A mechanism for ensuring compliance shall be implemented.

a. Is an internal audit for legal compliance  Internal Audit ISPO RSPO 8 Internal audit are conducted periodically (once in year) against the requirement of YES conducted annually and documented? January 2015 ISPO RSPO include the legal compliance evaluation. The last audit was on 8 January 2015. There were several for non- conformance issued during internal audit and has been closed with evidence.

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) 2.1.4 A system for tracking any changes in the law shall be implemented.

Specific Guidance: For 2.1.4: The systems used for tracking any changes in laws and regulations should be appropriate to the scale of the organisation. a. Is there a documented methodology (e.g.:  SIMP-PROS-02 Rev.02 dated 4 The documented procedure was defined that the sustainable department/OHS YES personnel in charge (PIC), source of info, February 2013 – Identification and officer was conducted identification, verification and registered the all legal and frequency of update) for tracking changes Evaluation on Compliance of other requirements. The update frequency was conducted every 6 (six) month that and communication of changes to Regulation and Requirements last updated on period December 2015, the method of updating regulation was relevant sections of the legislation?  FORM/PROS-02/03 – Form conducted by internet, email and/or by direct visits to the government bodies. The Resume on Compliance of new regulation was identified, such as PermenLH 5/2014 Waste Water Quality Regulation updated December Standard and PP 101/2014 Management of Hazardous Wastes. 2015  FORM/PROS-02/01 dated 2 The evaluation of compliance was conducted together with the relevant functions January 2012 – Form between sustainable team and representative from estates and mill. The Identification on Compliance of communication to relevant functions was conducted by dissemination from Regulation updated December sustainable team to respected persons at mill and estates. 2015. 2.2 The right to use the land is demonstrated, and is not legitimately contested by local people who can demonstrate that they have legal, customary or user rights. 2.2.1 (M) Documents showing legal ownership or lease, history of land tenure and the actual legal use of the land shall be available.

Guidance Where there is a conflict on the condition of land use as per land title, growers should show evidence that necessary action has been taken to resolve the conflict with relevant parties. A mechanism should be in place to resolve any conflict (Criteria 6.3 and 6.4). Where operations overlap with other rights holders, companies should resolve the issue with the appropriate authorities, consistent with Criteria 6.3 and 6.4. For National Interpretation: Any legal, customary or user rights to land, or disputes, which are likely to be relevant, will be identified. a. Are there documents showing legal  Plantation Operation Documents showing legal ownership or lease, history of land tenure and the YES ownership or lease of the land available? Permit/Surat Pendaftaran actual legal use of the land were available, includes: (e.g. land titles, lease documents) Usaha Perkebunan (SPUP)  Site permit from Ketua Badan Koordinasi Penanaman Modal Propinsi b. Are there documents showing history of #201/Menhutbun-VII/2000 on Daerah Tingkat I Riau #KPTS.06/I.L-II/1988, dated 25 February 1988, total land tenure available? (e.g. legal 10 March 2000 area ± 14.000 Ha documents showing land status change,  Plantation Business  Forest land release permit (Izin pelepasan kawasan hutan) for part of Hutan SIA and EIA reports, HCV assessment Assessment (Penilaian Usaha S. Kerumutan – S. Terbangiang, Kab. Kampar, Riau Province #919/Kpts- reports) Perkebunan (PUP)) II/1991, dated 22 September 1991, total area 9,330 Ha.  Decree of Ministry of  Plantation Operation Permit/Surat Pendaftaran Usaha Perkebunan (SPUP) c. Are there documents showing the actual

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) legal use of the land available? Agrarian/Head of BPN #201/Menhutbun-VII/2000 on 10 March 2000 (National Land Agency) d. Are the documents complete?  Plantation Business Assessment (Penilaian Usaha Perkebunan (PUP)); Class #95/HGU/BPN/99 on 12 I, based on the Decree of Governor of Riau Province April 2012. October 1999  Decree of Ministry of Agrarian/Head of BPN (National Land Agency) #95/HGU/BPN/99 on 12 October 1999 HGU #141 Rawang Empat, Sialang Godang, Kampung Baru, Kecamatan Bunut, Kabupaten Kampar, Propinsi Riau. Area: 12,474.10 Ha

Total HGU area is 12,474.20 Ha. This is according to hectare of land use as mentioned in Table 4. 2.2.2 Legal boundaries shall be clearly demarcated and visibly maintained.

Specific Guidance: For 2.2.2: Plantation operations should cease on land planted beyond the legally determined area and there should be specific plans in place to address such issues for associated smallholders.  Is there a legal map showing location of  Map of legal pegs Legal boundaries clearly demarcated and maintainedalong the perimeters of YES boundary markers?  Field observation to legal pegs estate lands which were mapped with Global Positioning System (GPS). Field (Minor NCR observation was conducted to pegs number: 2016-03 closed)  Is there physical presence of boundary  Form of BPN pegs checking

markers? Lubuk Raja Estate  Is there an SOP for boundary demarcation  No. 80 (0°06' 38.45'' N and 102°06' 21.68'' E) and maintenance?  No. 81 (0°06' 39.89'' N and 102°06' 20.02'' E) Note to auditor: Ground verification of boundary  No. 109 (0°07' 50.72'' N and 102°07'46.38'' E) markers using GPS should be conducted. Priority should be on boundaries with other  No. 169 (0°06' 33.14'' N and 102°07'35.51'' E) estates, community areas, protected area and  No. 225 (0°04' 56.28'' N and 102°09'42.17'' E) rivers Bukit Raja Estate In the case of Associated Smallholders:  Are there documents showing that the  No. 08 (0°11' 28.76'' N and 102°09' 09.53'' E) boundaries of associated smallholders  No. 57 (0°09' 05.72'' N and 102°05' 03.79'' E) have been recorded and verified by the mill?  No. 112 (0°09' 08.02'' N and 102°07'14.43'' E)  In case of boundary breach, is there proof

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) of a mitigation plan being implemented?  No. 122 (0°10' 29.80'' N and 102°08'10.69'' E) Condition of pegs were checked quarterly in January, April, July and October 2015.Realisation of pegs maintenance was sight on form of BPN pegs checking with items checked were identity, condition and position of pegs. All plantation activities (harvesting, upkeep, manuring, etc) were carried out inside the legal boundaries, no activities conducted outside the boundaries.

Minor Non-conformance 2016-03:  It was found that peg at site were not identified with peg number, e.g. peg number #109.  From monitoring result of pegs conducted by organisation, there were several legal pegs were missing, e.g. o LRE: legal pegs # 224, 226, 44, 43, 29, 25, 24, 23, 22, 165, 95, 90 o BRE: legal pegs #218, 113, 118, 58, 55 2.2.3 Where there are or have been disputes, additional proof of legal acquisition of title and evidence that fair compensation has been made to previous owners and occupants shall be available, and that these have been accepted with free, prior and informed consent (FPIC).

a. Are there, or have there been any land YES - Procedures of Land There was no land dispute at PT. Serikat Putra. disputes? dispute resolution mechanisms Organizations have established procedures of Land dispute resolution CR-AGR-102-GRL.06-11-1 Note to auditor: Due diligence should be mechanisms CR-AGR-102-GRL.06-11-1. Describes the mechanism of conducted on the management to provide - Interviews with auditee compensation before land clearing and land conflict resolution mechanisms evidence that there has been no historical or and stakeholder between companies and land owners. The land cleared for oil palm plantations current land dispute should ensure there is no problem and there is no dispute over land ownership. - Site observation b. If there are or have been disputes, are there: - Documents to proof legal acquisition? - Records of FPIC process? c. If there has been acquisition involving compensation, are there: - Records that Fair compensation has

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) been provided and accepted by parties involved? - Records that all affected parties are consulted and represented? - Documents of negotiations/discussion available?

Note to auditor: There should be direct verification of above with the affected parties

2.2.4 (M) There shall be an absence of significant land conflict, unless requirements for acceptable conflict resolution processes (see Criteria 6.3 and 6.4) are implemented and accepted by the parties involved.

a. Does the company have cases of YES - Procedures of Land There was no land dispute at PT. Serikat Putra. significant land conflict? (i.e. preventing dispute resolution mechanisms the company from operating normally) Organizations have established procedures of Land dispute resolution CR-AGR-102-GRL.06-11-1 b. If the company has cases of conflict, are mechanisms CR-AGR-102-GRL.06-11-1. Describes the mechanism of records of the following available? - Interviews with auditee compensation before land clearing and land conflict resolution mechanisms between companies and land owners. The land cleared for oil palm plantations - Status of conflict - Site observation should ensure there is no problem and there is no dispute over land ownership. - SOP/ mechanism for conflict resolution - Implementation of SOP/mechanism - Acceptance of the procedures by all parties - Records of conflict resolution

2.2.5 For any conflict or dispute over the land, the extent of the disputed area shall be mapped out in a participatory way with involvement of affected parties (including neighbouring communities where applicable).

a. Is there an SOP for participatory mapping N/A - Procedures of Land There was no land dispute at PT. Serikat Putra. of disputed area? dispute resolution mechanisms Organizations have established procedures of Land dispute resolution b. Is a dispute map available? CR-AGR-102-GRL.06-11-1 mechanisms CR-AGR-102-GRL.06-11-1. Describes the mechanism of c. Is there documented evidence of - Interviews with auditee compensation before land clearing and land conflict resolution mechanisms involvement and acceptance by the between companies and land owners. The land cleared for oil palm plantations

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) affected parties? - Site observation should ensure there is no problem and there is no dispute over land ownership.

Note to auditor: Actual ground verification showing the accuracy of the dispute map should be conducted 2.2.6 (M) To avoid escalation of conflict, there shall be no evidence that palm oil operations have instigated violence in maintaining peace and order in their current and planned operations.

Specific Guidance: For 2.2.6: Company policy should prohibit the use of mercenaries and para-militaries in their operations. Company policy should prohibit extra-judicial intimidation and harassment by contracted security forces (see Criterion 6.13). a. Does the company have a policy to a. Yes, policy has been The company's policy not to be applies military means and or using intimidation in YES circumvent instigated violence to maintain established related to violent, procedures of Land dispute resolution mechanisms CR-AGR-102-GRL.06-11-1. peace and order in current and planned point 1. Describes the steps of land acquisition from the socialization, permits of location, operations? b. There was no military action an inventory of public land ownership, measuring parcels cultivated society, or policy process of negotiating the price of compensation, compensation and payment b. Is there any evidence of: settlement, consultation when needed - The use of confrontation and intimidation by the company to maintain peace and order? - Use of para-militaries and mercenaries in the plantation?

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

2.3.1 (M) Maps of an appropriate scale showing the extent of recognised legal, customary or user rights (Criteria 2.2, 7.5 and 7.6) shall be developed through participatory mapping involving affected parties (including neighbouring communities where applicable, and relevant authorities).

Guidance: All indicators will apply to current operations, but there are exceptions for long-established plantations which may not have records dating back to the time of the decision making, in particular for compliance with Indicators 2.3.1 and 2.3.2. Where there are legal or customary rights over land, the grower should demonstrate that these rights are understood and are not being threatened or reduced. This Criterion should be considered in conjunction with Criteria 6.4, 7.5 and 7.6. Where customary rights areas are unclear these should be established through participatory mapping exercises involving affected parties (including neighbouring communities and local authorities). This Criterion allows for sales and negotiated agreements to compensate other users for lost benefits and/or relinquished rights. Negotiated agreements should be non-coercive and entered into voluntarily, carried out prior to new investments or operations, and based on an open sharing of all relevant information. The representation of communities should be transparent and in

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) open communication with other community members. Adequate time should be given for customary decision making and iterative negotiations allowed for, where requested. Negotiated agreements should be binding on all parties and enforceable in the courts. Establishing certainty in land negotiations is of long-term benefit for all parties. Companies should be especially careful where they are offered lands acquired from the State by its invoking the national interest (also known as ‘eminent domain’). Growers and millers should refer to the RSPO approved FPIC guidance (‘FPIC and the RSPO: A Guide for Companies’, October 2008)

For National Interpretation: Any commonly encountered situations should be identified. a. Does the company have an SOP on FPIC? a. Land dispute Yes, procedures concerning of FPIC was available in (Land dispute resolution YES b. Is there evidence that the identification of resolution mechanisms CR- mechanisms CR-AGR-102-GRL.06-11-1), Land acquisition was performed before AGR-102-GRL.06-11-1) the existence of FPIC. legal, customary or user rights has been b. Identification of done through FPIC process? Maps have been developed for each estate indicating Legal demarcation and legal & customary right was planted areas. Planted areas of the Estate are wholly on Government land, leased c. Is there evidence that the FPIC process done through FPIC under HGU. has been implemented in accordance to c. Map provided the company SOP? Where is this evidence information of legal customary Procedure was presented to the head of the village around the plantation. recorded? (E.g.: Documents, Minutes of or user right meeting, Records, Agreements, Maps etc.) d. Yes there was d. Is there a map of the extent of legal, map for showing legal, customary or user rights? Is this map of customary or user rights. appropriate scale (1: 10,000)? e. Map was made based on SIA and HCV e. Was the map produced through assessment on 2011 and participatory mapping with reference to 2015 SIA and HCV assessment? f. Yes, map have f. Does the map have a title, legend, source, title, legend, source with scale scale and projections/georeference? 1:10000 g. Map was accepted g. Are the maps accepted by the relevant communities?

2.3.2 Copies of negotiated agreements detailing the process of free, prior and informed consent (FPIC) (Criteria 2.2, 7.5 and 7.6) shall be available and shall include: a) Evidence that a plan has been developed through consultation and discussion with all affected groups in the communities, and that information has been provided to all affected groups, including information on the steps that shall be taken to involve them in decision making; b) Evidence that the company has respected communities’ decisions to give or withhold their consent to the operation at the time that this decision was taken; c) Evidence that the legal, economic, environmental and social implications for permitting operations on their land have been understood and accepted by affected communities, including the implications for the legal status of their land at the expiry of the company’s title, concession or lease on the land.

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) a. Are copies of negotiated agreements with YES - Procedures of Land Procedure was presented to the head of the village around the plantation (Land affected parties available? dispute resolution mechanisms dispute resolution mechanisms CR-AGR-102-GRL.06-11-1). b. Is there evidence that the agreement is CR-AGR-102-GRL.06-11-1 prepared through proper FPIC process? There was no land disputed at the time of audit. - Interviews with auditee c. Does the agreement contain the following: and stakeholder - An action plan developed through consultation with affected parties, is - Site observation inclusive and evidence that members of affected parties are well informed and involved in the decision making process - Evidence of options to give or withhold consent for development - Evidence that members of the affected communities understand and accept the implication involved in permitting/rejecting oil palm development on their land (E.g.: legal status, social, environmental, economic) - Evidence that the negotiated agreement was entered voluntarily without coercion by all parties - Evidence that adequate time was given for customary decision making and iterative negotiations - Clause which states that the negotiated agreement is legally binding

2.3.3 All relevant information shall be available in appropriate forms and languages, including assessments of impacts, proposed benefit sharing, and legal arrangements.

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) a. Is there evidence that all the information Procedure was presented to the head of the village around the plantation (Land YES - Procedures of Land (maps, agreement, records, impact dispute resolution mechanisms CR-AGR-102-GRL.06-11-1 dispute resolution mechanisms assessment, benefit sharing and legal CR-AGR-102-GRL.06-11-1 arrangements) is available in appropriate forms and languages, understood and - Interviews with auditee accessible to affected parties? and stakeholder

Note to auditor: this should be cross checked to - Site observation a sample of the affected parties

2.3.4 (M) Evidence shall be available to show that communities are represented through institutions or representatives of their own choosing, including legal counsel.

Specific Guidance: For 2.3.4: Evidence should be available from the companies, communities or other relevant stakeholders. a. Who is the representative of the Public consultation with Evidence shows that people have determined their representatives through the YES community in the negotiation process? stakeholders local village chief. Based on the proof of delivery of compensation is also visible signature of the head of the village which is also accompanied by current photo b. Is the representative accepted by the community? handover compensation c. Is the record of appointment to represent the community available and shared with other parties?

PRINCIPLES 3: COMMITMENT TO LONG-TERM ECONOMIC AND FINANCIAL VIABILITY CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) 3.1 There is an implemented management plan that aims to achieve long-term economic and financial viability. 3.1.1 (M) A business or management plan (minimum three years) shall be documented that includes, where appropriate, a business case for scheme smallholders. Specific Guidance: For 3.1.1: The business or management plan should contain: • Attention to quality of planting materials; • Crop projection = Fresh Fruit Bunches (FFB) yield trends;

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) • Mill extraction rates = Oil Extraction Rate (OER) trends; • Cost of Production = cost per tonne of Crude Palm Oil (CPO) trends; • Forecast prices; • Financial indicators.

Suggested calculation: trends in 3-year running mean over the last decade (FFB trends may need to allow for low yield during major replanting programmes).

Guidance: Whilst it is recognised that long-term profitability is also affected by factors outside their direct control, top management should be able to demonstrate attention to economic and financial viability through long-term management planning. There should be longer term planning for plantations on peat, particularly in regards to subsidence and flooding issues (see Indicator 4.3.5). Consideration of smallholders should be inherent in all management planning where applicable (see also Criteria 6.10 and 6.11). For scheme smallholders the content will vary from that suggested (refer to RSPO Guidance On Scheme Smallholders, July 2009). Growers should have a system to improve practices in line with new information and techniques. For smallholder schemes, the scheme management should be expected to provide their members with information on significant improvements. This Criterion is not applicable to independent smallholders (refer to RSPO Guidance for Independent Smallholders under Group Certification, June 2010) a. Does the company have a documented Long term Management Plan of PT YES The company has established long term management plan in document “Rencana business or management plan with a Serikat Putra, period 2015-2019. Jangka Panjang” (Long Term Management Plan) PT Serikat Putra period 2015 – minimum planning period of 3 years? 2019). The documented management plan has included: b. Does it include the following: - Land area statement (planting - Land area statement (planting years, non-planted areas, i.e. infrastructure, years, non-planted areas, i.e. HCV, HCV area) with updated location maps. Maps have included title, legend, conservation areas, fragile soils, source, scale and projection/georeferenced. enclaves) with updated location - Crop projection = Fresh Fruit Bunches (FFB) yield trends maps. Maps should have title, - Mill extraction rates = Oil Extraction Rate (OER) trends legend, source, scale and - Cost of Production = cost per tonne of Crude Palm Oil (CPO) trends projections/georeferenced - Forecast prices - Plan for management of scheme - Financial indicators – profitability forecast (income vs cost) smallholders (where appropriate) - Projected expansion (area, mill capacity, infrastructure, social amenities) - Quality of planting materials - General strategy and allocation for environmental and social management - Crop projection = Fresh Fruit Bunches (FFB) yield trends The management plan is reviewed annually. - Mill extraction rates = Oil Extraction Rate (OER) trends There is no peat land in Lubuk Raja Estate and Bukit Raja Estate therefore no - Cost of Production = cost per tonne plantation in peat. of Crude Palm Oil (CPO) trends The organization has a system to improve practices in line with new information

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) - Forecast prices and techniques. Department in charge to improve practice in line with new - Financial indicators – profitability information and techniques are Department of Sustainability. New information and forecast (income vs cost) techniques are updated through internet or routine meeting. - Projected expansion (area, mill capacity, infrastructure, social Documented SOP which contains mechanism of monitoring and updating amenities) information to improve practices was SIMP-PROS-35 (Continual Improvement) - General strategy and allocation for environmental and social management (refer to P5, P6 and P8) c. Is this management document subjected to an annual review? d. For plantations on peat, is there a long term viability plan – e.g. flooding, drainability assessments and subsidence issues? (see 4.3.5) e. Does the grower have a system to improve practices in line with new information and techniques? - Has the personnel in charge (PIC) been identified? - How is the information updated? - Is there a documented SOP which requires monitoring and updating information to improve practices? - Is new information communicated to workers and scheme smallholders (where appropriate)? How is it communicated?

3.1.2 An annual replanting programme projected for a minimum of five years (but longer where necessary to reflect the management of fragile soils, see Criterion 4.3), with yearly review, shall be available.

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) a. Is there an annual replanting programme Replanting plan 2017 - 2023 Projected annual replanting programme was described in the replanting plan 2017 YES projected for a minimum of five years? - 2023. No replanting in 2016 and 2017. Replanting is started in 2018. Detail Annual Replanting Programme are: b. Has it been documented?

c. Is the progress of implementation Lubuk Raja Estate documented? Year of Replanting year d. How does the programme take into oil 2017 2018 2019 2020 2021 2022 2023 consideration fragile soils such as peat? palm Is there a longer projection period (see 1988 0 966 384 0 0 0 0 C4.3)? 1989 0 86 372 0 0 0 0 1990 0 0 359 848 234 337 81 e. Is there evidence of a yearly review of 1991 0 0 0 182 887 723 1,078 the replanting programme? 1994 0 0 0 0 128 0 0 1995 0 0 0 124 0 0 0 1996 0 0 7 20 0 0 0 1998 0 0 0 8 0 0 0 Total 0 1,052 1,122 1,182 1,249 1,060 1,159

Bukit Raja Estate Year of Replanting year oil 2017 2018 2019 2020 2021 2022 2023 palm 1988 0 0 1,116 1,012 319 550 0 1989 0 0 0 0 180 407 0 1990 0 0 0 0 523 0 345 1991 0 0 0 0 82 0 570 Total 0 0 1,116 1,012 1,104 957 915

There is no fragile soil and peat soil in Lubuk Raja Estate and Bukit Raja Estate.

PRINCIPLES 4: USE OF APPROPRIATE BEST PRACTICES BY GROWERS AND MILLERS

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) 4.1 Operating procedures are appropriately documented, consistently implemented and monitored. (M) Standard Operating Procedures (SOPs) for estates and mills shall be documented.

Specific Guidance: For 4.1.1 and 4.1.4: 4.1.1 SOP and documentation for mills should include relevant supply chain requirements (see RSPO Supply Chain Certification Standard, Nov 2011).

For National Interpretation: National codes of practice or Best Management Practices (BMPs) will be referenced.  SOP for Estates and Mill Standard Operating Procedures (SOPs) for Estates and Mill been documented. YES  Field observation in harvesting, The procedures cover key processes, harvesting, transportation, manuring, spraying IPM, GAP, GMP, Supply Chain requirements for the mill. a. Have the SOPs for mills and plantation been documented? SOP for Estate:  CR-AGR-101-SKL.06.11-1 Survey of Plantation Land Suitability b. Does the SOP cover key processes,  CR-AGR-102-GRL.06.11-1 Land Compensation harvesting, transportation, manuring,  CR-AGR-103-HGU.06.11-1 Licensing in order to obtain Plantation IPM, GAP, Supply Chain requirements for Cultivation Permit (HGU) the mill, etc.?  CR-AGR-104-PKE.06.11-1 Handling of Internal Conflict c. Is a copy of the SOP available on site and  CR-AGR-105-BBT.06.11-1 Nursery is it documented in an appropriate  CR-AGR-106-NEW.06.11-1 Land Clearing and Preparation language?  CR-AGR-107-PKC.06.11-1 Planting Legume Cover Crop

d. Is there evidence that SOPs are  CR-AGR-108-TSW.06.11-1 Oil Palm Planting implemented and understood by  CR-AGR-201-SIP.06.11-1 Block Census and Oil Palm Identification workers?  CR-AGR-202-GLM.06.11-1 Weed controlling e. Are the SOPs appropriate and adequately  CR-AGR-203-PHP.06.11-1 Handling of Pest and Disease (IPM) cover all estate and mill processes and  CR-AGR-204-BHT.06.11-1 Tyto Alba Management activities?  CR-AGR-205-PST.06.11-1 Pesticide Management  CR-AGR-206-PPK.06.11-1 Inorganic Manuring f. How are the SOPs made available at the  CR-AGR-207-JJK.06.11-1 Application of EFB and wet solid point of use?  CR-AGR-208-EFL.06.11-1 Effluent application  CR-AGR-209-TPK.06.11-1 Pruning  CR-AGR-301-PJJ.06.11-1 Build and maintain road and bridge  CR-AGR-401-TBS.06.11-1 Harvesting  CR-AGR-402-TRP.06.11-1 FFB transportation to Mill

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO)  CR-AGR-501-TRK.06.11-1 Traction  CR-AGR-701-KTA.06.11-1 Conservation of Soil and Water  CR-AGR-702-PLG.06.11-1 Peat soil management  CR-AGR-703-NKT.06.11-1 Identification, Handling and Protection of High Conservation Value Area (HCVA)  CR-AGR-704-LB3.06.11-1 Hazardous Waste Handling  CR-AGR-705-LBD.06.11-1 Domestic Waste Handling  CR-AGR-707-KBR.06.11-1 Fire Handling

SOP for Mill:  CR-ENG-101-TBS.06.11-1 FFB Receiving  CR-ENG-102-STR.06.11-1 Sterilization  CR-ENG-103-STP.06.11-1 Stripping  CR-ENG-104-DGS.06.11-1 Digesting and Pressing  CR-ENG-105-CLF.06.11-1 Clarification  CR-ENG-106-SPR.06.11-1 Separation kernel and fiber  CR-ENG-107-NUT.06.11-1 Kernel Station  CR-ENG-108-BLK.06.11-1 Palm Oil and Kernel storage  CR-ENG-109-SUP.06.11-1 Mill Start Up  CR-ENG-110-SDW.06.11-1 Mill Shut Down  CR-ENG-111-TPO.06.11-1 Handling of CPO spill  CR-ENG-113-LUL.06.11-1 Loading and Unloading CPO and Kernel  CR-ENG-114-EMG.06.11-1 Mill Emergency  CR-ENG-201-PIL.06.11-1 Waste water management  CR-ENG-202-WTR.06.11-1 Clean Water Management  CR-ENG-203-LAB.06.11-1 Laboratory Analysis  CR-ENG-301-BLR.06.11-1 Boiler  CR-ENG-302-TRB.06.11-1 Turbine  CR-OPR-101-SPC.03.13-1 – Supply Chain

Copy of the procedures was available on site and they are documented in Indonesian language. Interview with worker in Estates and Mill demonstrated that SOPs were implemented and understood by workers.

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) Sample of estate operational implementation were taken in harvesting and spraying process in Block F13-14 Division I LRE and harvesting in Block K20-21 and Block K31 Division II BRE. Mill operational implementation was conducted started from loading ramp to CPO dispatch including supporting process, e.g. maintenance and warehouse activities. It was observed that all of the activities were implemented according to procedure. A mechanism to check consistent implementation of procedures shall be in place.

4.1.2 Guidance: Mechanisms to check implementations could include documentation management systems and internal control procedures. a. Is there a master list of all SOPs?  Master list of document YES Master list of all SOPs and work instructions and its revision history were available b. How does the company keep track of  SIMP-PROS-33 Procedure and well documented. Procedure was updated on August 31st, 2013. Organization revisions? Internal Audit keeps track of revision of the SOPs in revision history in the cover of SOPs and  SIMP-PROS-31 Procedure for work instructions. SOP was provided in Indonesian language. SOPs training and c. Is there mechanism for: Corrective and Preventive - Translation of SOP into work dissemination to all of employee has been conducted through regular training and Action morning circle. instructions in appropriate  Operation internal audit result languages? The organization has well implemented internal control and monitoring processes - Records of training for all levels? that check and report on the implementation of the SOPs. These include - Internal control (e.g. audit and independent checks of the Mill and Estates by Internal Auditor. Last operation review, field inspection) procedure internal audit was conducted in December 2015. Internal audit checked check in place to monitor consistent implementation of the procedures and work instructions which covered implementation of SOPs? operational activities of plantations and mill. - Trained and competent personnel th assigned to carry out internal control Procedure of Training (SIMP-PROS-03) has been established on February 4 , activities? 2013, described mechanism of personnel training to ensure qualified human - Implementation audits to be carried resources that required by the company. Realisation of training was IPM on 2 out regularly covering March 2016 in LRE and management of limited pesticide on 2 February 2016. implementation of all the SOPs? Procedure to address non-compliance and corrective action for continuous - Procedure to address non- improvement has been established in SIMP-PROS-31 which is the procedure of compliance and corrective action for Corrective and Preventive Action that arranged the mechanism of address Non continuous improvement? Conformity and issue Corrective Action. 4.1.3 Records of monitoring and any actions taken shall be maintained and available, as appropriate.

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) a. Have the records been maintained on the  BKM (Buku Kegiatan Mandor) Records of measurement, result of internal audit and monitoring activities were YES following? or Supervisor report maintained and available, e.g.: (Minor NCR - Measurements or results of internal  Buku Panen (harvesting - BKM (Buku Kegiatan Mandor / Activity Logbook) or Supervisor report for 2016-04 closed) control and monitoring activities logbook) and Laporan Potong upkeep activity consist of Employee name, absent type, activity code, (refer 4.1.2) Buah (cutting report). location code, man-days , overtime, output, etc. - Records of corrective actions and  Daily log sheet - Buku Panen (harvesting logbook) and Laporan Potong Buah (cutting improvement undertaken report) consist of employee name, block/location, amount of FFB, basic and premi (over-basic) calculation. - Daily log sheet every station from loading ramp, sterilizer, threshing, press, clarification, boiler and effluent. Record daily activity of process in each station and process performance in each station.

Minor Non-conformance 2016-04:  From 7 digester machine, only two machines completed with temperature gauge as temperature proses measurement in digester. 4.1.4 (M) The mill shall record the origins of all third-party sourced Fresh Fruit Bunches (FFB). a. Is there an SOP for third-party FFB  Monthly recapitulation of It was verified that Lubuk Raja Factory does not receive FFB form other source N/A sourcing? FFB receiving including third party. b. Is there a list of approved third-party FFB  Interview with weighing suppliers? clerk c. Is there proof of observed implementation of SOP?

d. Is there daily and summary records of volume and origins of third-party FFB received? e. Have these records been verified against the available document?

4.2 Practices maintain soil fertility at, or where possible improve soil fertility to, a level that ensures optimal and sustained yield. There shall be evidence that good agriculture practices, as contained in Standard Operating Procedures (SOPs), are followed to manage soil fertility to a level that ensures optimal and sustained yield, where possible. 4.2.1 Guidance: Long-term fertility depends on maintaining the structure, organic matter content, nutrient status and microbiological health of the soil. Nutrient efficiency should take account of the age of

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) plantations and soil conditions.

For National Interpretation: The range of appropriate techniques will be identified. a. Are there SOPs for Good Agricultural  CR-AGR-206-PPK.06.11-1 Organization has been defined the SOPs for Good Agricultural Practices in YES Practices in managing soil fertility? Inorganic Manuring Procedure managing soil fertility which documented in: b. Is there evidence that the SOPs have  CR-AGR-207-JJK.06.11-1  CR-AGR-206-PPK.06.11-1 Inorganic Manuring been implemented and monitored? Application of EFB and wet solid  CR-AGR-207-JJK.06.11-1 Application of EFB and wet solid Procedure  CR-AGR-208-EFL.06.11-1 Effluent application

 CR-AGR-208-EFL.06.11-1 Based on data on manuring recommendation and realisation 2015, it was noted Effluent application Procedure that SOPs has been implemented and monitored.  Manuring recommendation and realisation

4.2.2 Records of fertiliser inputs shall be maintained. a. Is records of fertiliser inputs maintained?  Manuring recommendation and Records of fertiliser inputs are well maintained in document Manuring YES b. Is there records to proof that the fertiliser realisation 2015 Recommendation 2015 and 2016. Realisation of manuring was well recorded.

program is linked to the agronomic  Manuring recommendation Record of manuring realisation in 2015 are: report? 2016 Lubuk Raja Estate c. Is there records of fertilizer usage per Type of Fertilizer Amount (Kg) tonne of FFB production (>in Summary Urea 1,930,473 Table, specific types of fertilizers)? RP 4,470 MOP 2,085,400 Dolomite 30,743 EFB 34,601,220 Solid 6,120,530 LA 182,013 Total 44,954,849

FFB 2015 production : 170,725 ton Fertiliser use/ton: 263.32 kg/ton FFB

Bukit Raja Estate

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) Type of Fertilizer Amount (Kg) Urea 1,437,143 MOP 1,631,469 Dolomite 45,997 EFB 29,095,810 Solid 6,109,130 Total 38,319,549

FFB 2015 production : 127,721 ton Fertiliser use/ton: 300.03 kg/ton FFB

4.2.3 There shall be evidence of periodic tissue and soil sampling to monitor changes in nutrient status.  Is there SOPs for tissue and soil  CR-AGR-206-PPK.06.11-1 Inorganic Manuring Procedure mentioned that manuring recommendation in 2016 YES sampling? Inorganic Manuring Procedure was defined based on result of leaf and soil analysis. (Minor NCR 2016-05 closed)  Is there evidence of implementation of the Minor Non-conformance 2016-05: SOPs, including availability of records?  SOPs for tissue and soil sampling has not been shown  Is there records of tissue and soil analysis?  Records of tissue and soil analysis has not been shown

 Is the results of the study incorporated into the fertilizer program? A nutrient recycling strategy shall be in place, and may include use of Empty Fruit Bunches (EFB), Palm Oil Mill Effluent (POME), and palm residues after replanting.

4.2.4 Guidance: The nutrient recycling strategy should include any use of biomass for by-products or energy production. a. Is there a nutrient recycling strategy in Monthly report of land application There was the nutrient recycling strategy performed by organisation such as land YES place? 2015 application from Empty fruit bunch (EFB), solid and POME. The location, dose and schedule of application were issued by Research Department of Salim b. Does the strategy include the following? Ivomas Group as well as clear objectives and time-bound targets. The location of  Clear objectives and time-bound POME application was clearly stated in the permit of POME application from targets Bupati Pelalawan. Implementation and monitoring of land application was well  Inventory of recorded. The organisation has monthly inventory of EFB, POME, Fibre, Boiler EFB - ash, Kernel shell, Palm residues from replanting and Biomass recycling program. - POME Land application in 2015 are:

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) - Fibre Activity Realisation (Kg) - Boiler ash EFB application 63,697,030 - Kernel shell Solid application 12,229,660 - Palm residues from replanting POME application 182,013  Biomass recycling program  Implementation and monitoring During site visit, it was observed that land application has been applied in the records recommendation area.

Note to auditor: Ground verification required 4.3 Practices minimise and control erosion and degradation of soils. (M) Maps of any fragile soils shall be available.

Guidance: Plantations on peat should be managed at least to the standard set out in the ‘RSPO Manual on Best Management Practices (BMPs) for existing oil palm cultivation on peat’, June 2012 (especially water management, fire avoidance, fertiliser use, subsidence and vegetation cover). 4.3.1 Techniques that minimise soil erosion are well known and should be adopted, where appropriate. These should include practices such as ground cover management, biomass recycling, terracing, and natural regeneration or restoration instead of replanting.

For National Interpretation: National Interpretation (or an RSPO recognised parallel means) will refer to national guidance, and identify the best management practices and appropriate techniques for maintaining soil quality in local conditions, including guidance on soil types, and any appropriate performance thresholds such as maximum acceptable slope gradient for planting. a. Is there soil maps showing presence of  Map of Lubuk Raja Based on the soil map and field observation there were no fragile soils in Lubuk YES fragile soils and problem soils (refer to Estate and Bukit Raja Estate, Raja Estate and Bukit Raja Estate PT Serikat Putra. 4.3.6)? release by PT Serikat Putra Type of soil b. Are maps georeferenced and of scale 1 : 25,000 appropriate scale (1:50,000)?  Field observation Lubuk Raja Estate Bukit Raja Estate at Lubuk Raja Estate and Bukit Histic Humaquepts Histic Humaquepts Raja Estate Typic Paleaquults Typic Paleaquults Typic Paleudults Typic Paleudults Aeric Kandiaquults Aeric Kandiaquults Typic Plinthudults Typic Plinthudults Typic Dystrudepts Typic Dystrudepts Typic Hydraquents Typic Hydraquents

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO)

4.3.2 A management strategy shall be in place for plantings on slopes above a certain limit (this needs to be soil and climate specific).

a. Is there a management strategy in place  CR-AGR-106-NEW.06.11-1 The organisation has management strategy for planting on some class of slope as YES for plantings on slopes? Land Clearing and Preparation referred to organisation SOP. The procedure describes management strategy for (Minor NCR minimising and controlling erosion. The organisation does not recommend 2016-06 closed) b. Does the management strategy include Procedure plantings on slopes > 40% or > 22º. When the slope area is planted, system for the following?  CR-AGR-107-PKC.06.11-1 planting on slopes area is provided through terracing, levelling of terrace, planting - Identification of steep areas not Planting Legume Cover Crop legume cover crops and determining of planting space. Area with 26 – 45% slope suitable for planting Procedure is 11.87 % in LRE and 25.40% in BRE. - Policy of planting on slopes  CR-AGR-108-TSW.06.11-1 Oil It was observed that Practices to control and minimize erosion have been applied - SOPs to minimise soil erosion based Palm Planting Procedure by terracing and planting legume cover crop. on local soil and climate conditions,  Field observation at Lubuk Raja

e.g. ground cover management, Estate and Bukit Raja Estate Minor Non-conformance 2016-06 biomass recycling, terracing, and natural regeneration or restoration  There was no evidence that erosion rate of slope area (26-45%) was instead of replanting monitored as required by RKL RPL. c. Is there proof of records of field inspection on SOP implementation?

4.3.3 A road maintenance programme shall be in place.

a. Is there a road maintenance programme  CR-AGR-301-PJJ.06.11-1 Lubuk Raja Estate and Bukit Raja Estate has established annual programme of YES in place with supporting budget and Build and maintain road and road maintenance for primary road, collection road and secondary road. Road

resources? bridge procedure maintenance was also conducted according to road condition. Road maintenance included mechanical maintenance using grader and compactor, manual

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) b. Is there road maintenance records?  Road Maintenance maintenance. Realisation of road maintenance was well recorded covering block Programme of Lubuk Raja maintained, distance of road maintained, diesel fuel consumption and quantity of Estate and Bukit Raja Estate gravel used.  Field Observation at During field observation it was sighted that all roads, culverts and bridges were Lubuk Raja Estate and Bukit well maintained and passable for vehicle. Raja Estate (M) Subsidence of peat soils shall be minimised and monitored. A documented water and ground cover management programme shall be in place.

Specific Guidance: 4.3.4 For 4.3.4: For existing plantings on peat, the water table should be maintained at an average of 50cm (between 40 - 60cm) below ground surface measured with groundwater piezometer readings, or an average of 60cm (between 50 - 70cm) below ground surface as measured in water collection drains, through a network of appropriate water control structures e.g. weirs, sandbags, etc. in fields, and watergates at the discharge points of main drains (Criteria 4.4 and 7.4). a. Is there an SOP to provide guidance on  Map of Lubuk Raja Based on the soil map and field observation there were no peat soils in Lubuk N/A subsidence management? Estate and Bukit Raja Estate, Raja Estate and Bukit Raja Estate PT Serikat Putra

b. Does the SOP make reference to the release by PT Serikat Putra RSPO BMPs on peat? scale 1 : 25,000  Field observation c. How is subsidence being monitored? at Lubuk Raja Estate and Bukit d. Are there records of subsidence Raja Estate monitoring? e. How is subsidence being minimised? f. Is there a water management programme and evidence of implementation? For existing plantings on peat, the water table should be maintained at an average of 50cm (between 40 - 60cm) below ground surface measured with groundwater piezometer readings, or an average of 60cm (between 50 - 70cm) below ground surface as measured in water collection drains, through a network of appropriate water control structures e.g. weirs, sandbags, etc. in fields, and watergates at the discharge points of

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) main drains (Criteria 4.4 and 7.4). g. Is there a ground cover management programme and is there evidence of implementation?

Drainability assessments shall be required prior to replanting on peat to determine the long-term viability of the necessary drainage for oil palm growing.

Specific Guidance: 4.3.5 For 4.3.5: Where drainability assessments have identified areas unsuitable for oil palm replanting, plans should be in place for appropriate rehabilitation or alternative use of such areas. If the assessment indicates high risk of serious flooding and/or salt water intrusion within two crop cycles, growers and planters should consider ceasing replanting and implementing rehabilitation. a. Was a drainability assessment conducted  Map of Lubuk Raja Based on the soil map and field observation there were no peat soils in Lubuk N/A before replanting on peat? Estate and Bukit Raja Estate, Raja Estate and Bukit Raja Estate PT Serikat Putra

b. Was a flood risk map provided as a result release by PT Serikat Putra

of the drainability assessment? scale 1 : 25,000  Field observation c. If the drainability assessment shows that at Lubuk Raja Estate and Bukit an area is unsuitable for replanting, are Raja Estate there alternative plans in place for rehabilitation and alternative use in accordance to the RSPO BMPs?

4.3.6 A management strategy shall be in place for other fragile and problem soils (e.g. sandy, low organic matter, acid sulphate soils).

a. Is there a management strategy in place  Map of Lubuk Raja Based on the soil map and field observation there were no other fragile or N/A for other fragile and problem soils? Estate and Bukit Raja Estate, problem soils in Lubuk Raja Estate and Bukit Raja Estate PT Serikat Putra

b. Does the management strategy include release by PT Serikat Putra

SOPs for the management of other fragile scale 1 : 25,000 and problem soils?  Field observation at Lubuk Raja Estate and Bukit c. Is inspection and implementation records Raja Estate available?

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) 4.4 Practices maintain the quality and availability of surface and ground water. An implemented water management plan shall be in place.

Specific Guidance: For 4.4.1: The water management plan will: • Take account of the efficiency of use and renewability of sources; • Ensure that the use and management of water by the operation does not result in adverse impacts on other users within the catchment area, including local communities and customary 4.4.1 water users; • Aim to ensure local communities, workers and their families have access to adequate, clean water for drinking, cooking, bathing and cleaning purposes; • Avoid contamination of surface and ground water through run-off of soil, nutrients or chemicals, or as a result of inadequate disposal of waste including Palm Oil Mill Effluent (POME).

Guidance: Growers and millers should address the effects of their use of water and the effects of their activities on local water resources. a. Is there a water management plan in  Permit of surface water Water management programme defined the method of water management plan YES place for mill and plantation with identified abstraction from Head of Mining include water source and distribution identification, volume of water utilization, and (Minor NCR actions? and Energy Pelalawan Regency the method to reduce and control. 2016-07 closed) No.KPTS540/DPE/GEO- b. Does the plan include the following? The water sources at Lubuk Raja Mill were from surface water abstraction (APU MIGAS/2014/078 dated 4 April  Identification of water sources from Kerumutan River) as the license No.KPTS540/DPE/GEO-MIGAS/2014/078 2014 valid for 2 years.  Efficient use of water dated 4 April 2014 valid for 2 years from Head of Mining and Energy Pelalawan  Water analysis measurement  Renewability of water source Regency. The water was utilize for mill operations (include boilers, processes and for period 2015 by Sucofindo  Impacts on catchment area and domestics usage) that through the water treatment plant (using physicals and  Records of water consumption local stakeholders chemicals method). For estate operations (include housing, pesticides mixings period 2014 and 2015 at mill  Access of clean drinking water all and office operations) using surface water that don’t need permit use.  Water management programme year round for stakeholders Flow meters were installed to monitor water usage. The monitoring of water 2016  Avoidance of surface and ground volume utilization was conducted, records was also sighted that water usage was water contamination majority from Lubuk Raja Mill YTD December 2015 achieved 293,742 m3 for 298,446.49 ton FFB process. Water usage for mill process 2014 achieved c. Have the identified actions in the plan 354,886 m3 for 307,414.38 ton FFB process. been implemented? The organisation has program to reduce water consumption, e.g. arranging ground water abstraction by not all pumps are operated, arranging water distribution to staff housing, reusing sterilizer condensate water for press station, reusing water cooler turbine for process, reusing water from PPE and hazardous waste cleaner for spraying. Surface water quality is monitored every six months for Kerumutan, Sosopan, Terajan, and Terbangiang rivers. It was reviewed for 1st and 2nd semester 2015

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) against Government Regulation 82/2001 class II.

Minor Non Conformance 2016-07:  The measurement analysis for water (water for housing at Estates) was not conducted yet.

(M) Protection of water courses and wetlands, including maintaining and restoring appropriate riparian and other buffer zones (refer to national best practice and national guidelines) shall be demonstrated.

Specific Guidance: 4.4.2 For 4.4.2: Refer to the ‘RSPO Manual On Best Management Practices (BMP) for management and rehabilitation of natural vegetation associated with oil palm cultivation on peat’, July 2012.

For National Interpretation: National Interpretation will refer to national guidelines or best practice and where appropriate include performance thresholds for requirements such as the size and location and methods of restoration of riparian strips or acceptable maximum run-off levels. a. Is there a map identifying water courses  No. SOPP : CR-AGR-703- The water courses and wetlands were protected based on the HCV management YES and wetlands? NKT.06.11-1 with tilte of and monitoring plan. It was identified that HCVs area included water courses, reservoir, and swamp. For water courses have been planted of palm oil. Some b. Are the water courses and wetlands Identification, Handling, and programs were conducted for protecting the riparian area such as prohibition of protected? Protecting of HVC Area.  Report of the identification and chemical treatment (pesticide and fertilizer) for 3 of palm oil trunks in riparian c. Are the riparian and buffer zones analysis of the existence of area, planting the wood trees (Albizi salman, Peronema canescens, Pterocarpus maintained and restored in existing high conservation value (HCV) indicus, Hibiscus tilla, Durio zibetinus, ect.), prohibiton of hunting, and cut down of plantation and replanting areas? area at PT. Serikat Putra–Riau trees. d. Is there SOP for riparian and buffer zone Province” Cooperation PT protection? Serikat Putra with Faculty of Map of water course was listed HCV Area Map at PT. Serikat Putra, Pelalawan, Forestry IPB 2011". Riau Province (Scale 1:400.000). Sources map form Working Map at PT. Serikat e. Has the SOP been implemented?  Field visit at HCV area at LRE Putra, SRTM 90m NASA, Networking Map of Road and River in Riau Province, and BRE, among other and GIS Analysis. Terbangian Riparian Area and Tapian Nauli Reservoir. Procedure maintain water course at PT. Serikat Putra area and the surrounding  Report of Enrichment at was demonstrated by No. SOPP : CR-AGR-703-NKT.06.11-1 with title of Riparian Area in 2015, LRE & Identification, Handling, and Protecting of HVCA. The procedure was periodically BRE, PT. Serikat Putra. implemented by Sustainability Dept. PT. Serikat Putra.

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) Appropriate treatment of mill effluent to required levels and regular monitoring of discharge quality, especially Biochemical Oxygen Demand (BOD), shall be in compliance with national 4.4.3 regulations (Criteria 2.1 and 5.6).

a. Is the mill effluent treatment process in  Waste water analysis Lubuk Raja Mill waste water (POME) was processed by multi feeding through a YES place? measurement period January – series of waste water treatment ponds: one cooling pond, two aerobic ponds, two December 2015 b. Is there a process in place for checking sediment ponds, and eight anaerobic ponds. POME is monitored monthly as  Permit of land application from and monitoring water discharge quality, required by permit. The results of POME monitoring were reviewed including Head of Pelalawan Regency particularly BOD? measurement of BOD, COD, pH, N Total, TSS, oil and fat for period January to No.KPTS660/BLH/470/2015 December 2015. c. Is the water discharge quality in dated 1 April 2015 valid through The Environment Ministry Decree No. 28/2003 required that BOD of POME compliance with national regulations? 5 years discharged is less than 5,000 mg/litre, pH discharge is average 6 – 9. The result d. Does the mill have a license for  Site visit to WWTP ponds at of POME quality during this period was under 5,000 mg/litre (average 300 – treatment, discharge or land application Lubuk Raja Mill 2,000) for BOD and pH average 6 – 8.  Mill monthly report of mill effluent, and is the mill in compliant There is sighted the license of waste water discharge from Head of Pelalawan

with the requirements of the license? Regency No.KPTS660/BLH/470/2015 dated 1 April 2015 valid through 5 years.

4.4.4 Mill water use per tonne of Fresh Fruit Bunches (FFB) (see Criterion 5.6) shall be monitored.

a. Are there procedures to measure mill  Monthly report December 2014 Water management programme defined the method of water management plan YES water usage, and are the procedures  Monthly report December 2015 include water source and distribution identification, volume of water utilization, and implemented?  Water management programme the method to reduce and control. b. Are there records of mill water use per 2016 Mill water use per tonne of FFB is monitored monthly. Result of monitoring of mill tonne of Fresh Fruit Bunches (FFB)? water use per tonne of FFB was sighted. Budget (m3/tonne 2014 (m3/tonne FFB) 2015 (m3/tonne FFB) FFB)

0.70 1.54 0.98

The organisation has program to reduce water consumption, e.g. arranging ground water abstraction by not all pumps are operated, arranging water distribution to staff housing, reusing water cooler turbine for process, reusing sterilizer condensate water for press station, vacuum water discharge reuse for domestics water.

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO)

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

(M) Implementation of Integrated Pest Management (IPM) plans shall be monitored.

4.5.1 Guidance: Growers should apply recognised IPM techniques, incorporating cultural, biological, mechanical and physical methods to minimise the use of chemicals. Native species should be used in biological control where possible. a. Is there a documented IPM plan?  CR-AGR-201-SIP.06.11-1 Block The organization has documented IPM plan in procedures to control pests, YES diseases, weeds and invasive introduced species. Procedures including type of b. Does the IPM plan include the following? Census and Oil Palm Identification Procedure pest and diseases, setting out of technique to be implemented (detection, census  Identification of potential pests and and treatment), control (manual, biological or chemical), locations to be applied, thresholds  CR-AGR-202-GLM.06.11-1 Weed controlling procedure and time frame for implementation. Programme for IPM is established annually.  What are the techniques used  CR-AGR-203-PHP.06.11-1 IPM programme includes detection and census of pest and diseases, weeds (cultural, biological, mechanical and controlling, planting and upkeep of beneficial plant, use of pesticide and herbicide. physical methods)? Handling of Pest and Disease (IPM) Procedure  What are the native species used as  CR-AGR-204-BHT.06.11-1 Tyto IPM plan was well implemented and documented, e.g.: part of the biological control  Routine detection of caterpillar is conducted monthly. Census method? Alba Management Procedure  Report of caterpillar detection was conducted when there was attack > 2%. When attack > 5%, treatment  Does it help in reducing the use of is applied according to R&D recommendation, e.g. light trap, pupa hand chemicals over a period of time?  Monitoring report of Tyto alba  Program of weeding picking or fogging. Based on result of caterpillar detection in 2015, there was  Prophylactic use of pesticides no caterpillar attack.  Minimization of pesticide use  Review on the plans to suit the  Routine census of rat. To control rat, the organisation applied present condition such as Tyto alba (owls) as predator of rat. Based on result of nest box monitoring in replanting? December 2015 in BRE, there was 302 owl nests, 299 eggs and 163 owlets. There was no rat attack in 2015. Last application of rodenticide (klerat) was c. Is there an SOP to implement the plan in 2011. and monitor its effectiveness?  IPM implementation for weeds consists of spraying circle and d. Is there records of pest occurrence and path, circle manual, weeding chemist and manual. Spraying and chemist is control? works using herbicides. This activity aims to eradicate the weeds that grow in the circle and path such as grass, weeds, ferns and wide leaves weeds

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) including introduced invasive species, i.e. Acacia.  Planted the beneficial plant as the host/nest for natural predator for caterpillars (Eucanticona purcelata, cycanus sp). The beneficial plant such as: Turnera subulata, Antigonon leptopus, Cassia cobanensis, Euphorbia hererophylla planted in the collection and the main road.  Breeding of predators: Sycanus and red ant (semut rangrang)

4.5.2 Training of those involved in IPM implementation shall be demonstrated.  Training program and YES a. Is there records of training provided to realisation Minor Non-conformance 2016-08: (Minor NCR those involved in the implementation of  Interview with Estate Manager  IPM training has not been delivered to employees involved in the 2016-08 closed) IPM? implementation of IPM

4.6 Pesticides are used in ways that do not endanger health or the environment.

(M) Justification of all pesticides used shall be demonstrated. The use of selective products that are specific to the target pest, weed or disease and which have minimal effect on non-target species shall be used where available.

Specific Guidance: For 4.6.1: Measures to avoid the development of resistance (such as pesticide rotations) should be applied. The justification should consider less harmful alternatives and IPM. 4.6.1 Guidance: The RSPO has identified some examples of alternatives to pesticide use, which include those listed in the ‘Research project on Integrated Weed Management Strategies for Oil Palm; CABI, April 2011’. Due to problems in the accuracy of measurement, monitoring of pesticide toxicity is not applicable to independent smallholders (refer to ‘Guidance for Independent Smallholders under Group Certification’, June 2010). a. Does the organization have a policy on  CR-AGR-205-PST.06.11-1 The company’s policy on safe use of chemical was described on procedure CR- YES safe use of chemicals? Pesticide Management AGR-205-PST.06.11-1 Pesticide Management. Procedure described on safe use of chemical, selection, use and storage of pesticide. The procedure also b. Does the organization have SOPs for use Procedure of selective products that are specific to  List of pesticides use by PT described use of selective pesticides that are specific to target pests, weeds, or diseases. Each type of pesticide used have been defined specific target of pest, target pests, weeds, or diseases and Serikat Putra types of weeds, application doses per hectare which have minimal effect on non- which have minimal effect on non-target  Program of circle and path species? cleaning target species and a broad plan of applications specified in the annual budget. To

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) i. Measures to avoid the development  IPM technique implementation avoid development of resistance have been implemented by pesticides rotation. of resistance (such as pesticide Less harmful alternatives and IPM was applied by planting of beneficial plants, rotation) should be applied. building nest box, detection and census of caterpillar. ii. Is there a list of all pesticide with The organisation only uses pesticides approved and registered agrochemical, target species and justification of permitted by the relevant authority, based on “The Green Book of Pesticides use? 2013” issued by The Pesticides Commission of the Agricultural Ministry of the iii. The justification should consider less Republic of Indonesia. harmful alternatives and IPM. Pesticides License Date of expired c. Is there evidence of implementation of Metsulindo 20 WP RI 01030119991484 23 June 2016 SOP on the ground? Round up 486L RI 01030120001560 18 March 2016 Garlon 670 EC RI 0103011984695 25 September 2018 Regent RI 01010119951192 18 March 2016 Elang 480 SL RI 01030119941170 9 January 2017 Gramoxone 276SL RI 010301197436 18 March 2016 Top Zon 276 SL RI 01030120072992 23 April 2017

During field observation it was verified that the implementation of pesticides uses was in accordance with the procedure.

4.6.2 (M) Records of pesticides use (including active ingredients used and their LD50, area treated, amount of active ingredients applied per ha and number of applications) shall be provided.

a. Does the company have a pesticide  Program of circle The organization has defined pesticide application program in the annual budget - YES application program? and path cleaning Program of circle and path cleaning. Records of pesticides use were available in b. Is records of pesticides use available?  Recapitulation of Recapitulation of pesticide use which provided information regarding active pesticide use ingredient, LD50, quantity of use, quantity of active ingredient, total area applied, c. Do the records detail the active active ingredient use (kg/Ha). ingredients used and their LD50, area treated, amount of active ingredients applied per ha and number of applications?

(M) Any use of pesticides shall be minimised as part of a plan, and in accordance with Integrated Pest Management (IPM) plans. There shall be no prophylactic use of pesticides, except in 4.6.3 specific situations identified in national Best Practice guidelines.

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) Specific guidance for 4.6.3: Justification of the use of such pesticides will be included in the public summary report.

For National Interpretation: National Interpretation will consider: statutory requirements concerning pesticide use, lists of legally prohibited pesticides, pesticide residues that should be tested for and the appropriate levels of residues, and best management practices for pesticide use or sources of information on these. National Interpretation will develop best practice guidelines on the exceptional circumstances that would allow the use of pesticides categorised as World Health Organisation Class 1A or 1B, or those listed by the Stockholm or Rotterdam Conventions, and paraquat as well as how they will be used in ways that do not endanger health or the environment.  CR-AGR-201-SIP.06.11-1 Block The organization has documented IPM plan in procedures to control pests, YES Census and Oil Palm diseases, weeds and invasive introduced species. Procedures including type of Identification Procedure pest and diseases, setting out of technique to be implemented (detection, census  CR-AGR-202-GLM.06.11-1 and treatment), control (manual, biological or chemical), locations to be applied, Weed controlling procedure and time frame for implementation. Programme for IPM is established annually.  CR-AGR-203-PHP.06.11-1 IPM programme includes detection and census of pest and diseases, weeds Handling of Pest and Disease controlling, planting and upkeep of beneficial plant, use of pesticide and herbicide. a. Does the company have an IPM plan? (IPM) Procedure  CR-AGR-204-BHT.06.11-1 Tyto IPM plan was well implemented and documented, e.g.: b. Has that plan been implemented? Alba Management Procedure  Routine detection of caterpillar is conducted monthly. Census c. Is the effectiveness of the IPM plan  Report of caterpillar detection was conducted when there was attack > 2%. When attack > 5%, treatment monitored?  Monitoring report of Tyto alba is applied according to R&D recommendation, e.g. light trap, pupa hand picking or fogging. Based on result of caterpillar detection in 2015, there was d. Are there records showing that the use of  Program of weeding no caterpillar attack. pesticides have been minimised in  List of pesticides use by PT accordance with Integrated Pest Serikat Putra  Routine census of rat. To control rat, the organisation applied Management (IPM) plan?  Field observation Tyto alba (owls) as predator of rat. Based on result of nest box monitoring in e. Has there been prophylactic use of December 2015 in BRE, there was 302 owl nests, 299 eggs and 163 owlets. pesticides? If so, justification must be There was no rat attack in 2015. Last application of rodenticide (klerat) was provided in accordance to National Best in 2011. Practices.  IPM implementation for weeds consists of spraying circle and path, circle manual, weeding chemist and manual. Spraying and chemist is works using herbicides. This activity aims to eradicate the weeds that grow in the circle and path such as grass, weeds, ferns and wide leaves weeds including introduced invasive species, i.e. Acacia.  Planted the beneficial plant as the host/nest for natural predator for caterpillars (Eucanticona purcelata, cycanus sp). The beneficial plant such as: Turnera subulata, Antigonon leptopus, Cassia cobanensis,

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) Euphorbia hererophylla planted in the collection and the main road.  Breeding of predators: Sycanus and red ant (semut rangrang)

The use of pesticides has been minimised as part of a plan, and in accordance with Integrated Pest Management (IPM) plans. Use of pesticides in 2015: Pesticide Lubuk Raja Estate Bukit Raja Estate Round up (lt) 1,194.51 2,193.14 Gramoxone (lt) 2,553.53 686.16 Starane (lt) 534.36 579.14 Metsulindo (kg) 255.34 34.26 Garlon (lt) 345.64 350.23 Elang (kg) 56.95 169.87

It was evidence that there was no prophylactic use of pesticides in LRE and BRE. Pesticide only used and apply for weeds and pest. Pesticides that are categorised as World Health Organisation Class 1A or 1B, or that are listed by the Stockholm or Rotterdam Conventions, and paraquat, are not used, except in specific 4.6.4 situations identified in national Best Practice guidelines. The use of such pesticides shall be minimised and eliminated as part of a plan, and shall only be used in exceptional circumstances.  Does the company have a complete  Complete listing of WHO class The organisation has a complete listing of WHO class 1A, class 1B, and YES listing of WHO class 1A, class 1B, and 1A, class 1B, and Stockholm or Stockholm or Rotterdam Conventions pesticide. Stockholm or Rotterdam Conventions Rotterdam Conventions The organisation has established policy regarding commitment to minimise and pesticide? pesticide eliminate use of paraquat through letter #037/MGT/S&P/IX/2013 dated 26  Letter #037/MGT/S&P/IX/2013 September 2013 from Top Management.  Is there a policy, procedure or Currently LRE and BRE still use paraquat. Budget of paraquat is decreased every management plan committing to minimise dated 26 September 2013 from Top Management regarding year. Use of paraquat in 2015 was 2,553.53 lt in LRE and 686.16 lt in BRE. To and eliminate use of these pesticides and commitment to minimise and reduce paraquat use, LRE and BRE implement Selective Spraying, that paraquat? eliminate use of paraquat agrochemical is only used in targeted weeds, no spraying in riparian buffer zones  Are there records of minimisation of  Pesticide stock record and cooperate with R&D to find out alternative pesticide to substitute paraquat. pesticides and paraquat use?  Recapitulation of pesticide  Where there is the use of the above use pesticides or paraquat, has justification in line with national best practice guidelines been documented?

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO)  Does physical verification of inventory in the chemical store agree back to the inventory records? (M) Pesticides shall only be handled, used or applied by persons who have completed the necessary training and shall always be applied in accordance with the product label. Appropriate 4.6.5 safety and application equipment shall be provided and used. All precautions attached to the products shall be properly observed, applied, and understood by workers (see Criterion 4.7).  Is there SOP for chemicals/pesticides  CR-AGR-205- The organisation has established procedure on safe use of pesticide in CR-AGR- YES handling? PST.06.11-1 Pesticide 205-PST.06.11-1 Pesticide Management. Management Procedure  Is there a training plan and training Pesticides have been applied and handled by trained spraying workers who have  Field observation records for workers who apply or handle received usage of limited pesticide training. Training was delivered by Pesticide to spraying activity and pesticides? and Fertilizer Controlling Commission of Agriculture Department Riau Province on pesticide storage 2 February 2016. Training covered handling of concentrate agrochemical and  Is there evidence that training has been  Training certificate spraying method including pesticide hazard. conducted in an appropriate language understood by the workers? Personnel interviewed (sprayer workers) can clearly explain the type of work including work methods and goals, materials used (pesticides) including the  Are pesticides handled, used or applied dosage and hazards and risks, personal protective equipment and first aid. only by persons who have completed the necessary training? Pesticides are always applied in accordance with the product label and procedure.  Are the workers involved in chemical handling or application able to Pesticides storage was locked areas with limited access. The storage was demonstrate understanding of the ventilated. MSDS and hazard symbol label were provided nearby of pesticides. hazards and risks related to chemicals Emergency shower and eye washer were also provided to anticipate in case of an used when interviewed? emergency of pesticides handling. The possible spill was managed. Secondary containment was provided around the pesticides storage area. Spill kit was also  Are pesticides always applied in provided in the area. PPE for handling of pesticides were provided including accordance with the product label? boots, apron, safety glass, respiratory mask and hand gloves. PPE used was  Are MSDS for pesticides used readily appropriate according to recommendations in any risk assessments. PPE available for easy reference? provided and used can be easily replaced if damaged. Chemical storage conditions, potential spill, consistency of PPE use was monitored through monthly  Is appropriate safety and application EHS patrol. equipment provided and used? Site visit in Block F13-14 Division I LRE and Block K31 Division II BRE has been  Is PPE used appropriate according to done to observe the spraying and pesticide application in field. Interview with recommendations in any risk spraying workers were evident that all of them has a good knowledge regarding assessments done? the pesticide usage and its material usage and toxicity. All the workers have used  Is appropriate PPE provided and used, the personal protective equipment meet with the safety rules and work instruction

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) and can it be easily replaced if damaged? such as: Apron, safety goggles, mask, hand gloves and safety shoes. All precautions attached to the products properly observed, applied, and understood  Does the management checked the by workers. Mandor as person in charge to check the workers usage of workers usage of appropriate PPEs? appropriate PPEs.

(M) Storage of all pesticides shall be according to recognised best practices. All pesticide containers shall be properly disposed of and not used for other purposes (see Criterion 5.3).

4.6.6 Specific guidance for 4.6.6: Recognised best practice includes: Storage of all pesticides as prescribed in the FAO International Code of Conduct on the distribution and use of pesticides and its guidelines, and supplemented by relevant industry guidelines in support of the International Code (see Annex 1).  CR-AGR-205-PST.06.11-1 – Pesticides were stored in the determined area separated from fertiliser and other YES a. Has the SOP for pesticide storage been Handling of pesticide chemicals. Pesticides storage was provided in central warehouse in each estate. documented and implemented? Procedure. Pesticides storage was locked areas with limited access. The storage was  Field observation at estate ventilated through cross flow ventilation. MSDS and hazard symbol label were b. Are all pesticides stored according to warehouses include spraying provided nearby of pesticides. Emergency shower and eyewash were also recognised best practices? activities at estate operation provided to anticipate in case of an emergency of chemical handling. PPE for c. Is there evidence that empty pesticide (Block F13 - 14 Division I Lubuk handling of chemicals were provided including boots, apron, safety glass, containers are properly stored and Raja Estate, Block K31 Division respiratory mask and hand gloves. The possible spill was managed. Secondary disposed off and not used for other II Bukit Raja Estate) containment was provided around the pesticides storage area. Spill kit was also purposes? provided in the area. EHS patrol was regularly performed monitor possible spill. All empty pesticides containers were triple rinsed and collected in the temporary d. Is there evidence observed in the field that pesticide containers are storage of hazardous waste. Pesticides containers were transported by authorised transporter, PT Primanru Jaya. Records of pesticides containers quantity were indiscriminately disposed (in dump site) or used for other purposes, .e.g. as waste evident. Liquid waste from pesticides was reused for the next spraying applications also there are several ex-containers “jerry can” that may re-use for containers, flower pots? field application.

4.6.7 Application of pesticides shall be by proven methods that minimise risk and impacts. a. Is there work instruction for pesticide  CR-AGR-205- Pesticide application was described in CR-AGR-205-PST.06.11-1 Pesticide YES application? PST.06.11-1 Pesticide Management Procedure. Training was delivered by Pesticide and Fertilizer Controlling Commission of b. Is there training provided on work Management Procedure Agriculture Department Riau Province on 2 February 2016. Training covered instruction including risk and impacts of  Training certificate pesticide applications? handling of concentrate agrochemical and spraying method including pesticide hazard.

4.6.8 (M) Pesticides shall be applied aerially only where there is documented justification. Communities shall be informed of impending aerial pesticide applications with all relevant information

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) within reasonable time prior to application. a. Has aerial spray been applied? If yes, is N/A It is evident that no pesticides applied aerially. N/A there documented justification? b. Is the impact and risk associated with aerial application documented and made available?

c. Are the identified affected communities informed of impending aerial pesticide applications with all relevant information within reasonable time prior to application?

Maintenance of employee and associated smallholder knowledge and skills on pesticide handling shall be demonstrated; including provision of appropriate information materials (see Criterion 4.6.9 4.8).

a. Has the company provided information  Training record N/A There was no smallholder associated with estate. materials on pesticide handling to all  Training certificate employees and associated smallholders  Field observation The organisation has provided information materials on pesticide handling to (if any) (see Criterion 4.8)? to spraying activity employees. Training on procedure including risk and impacts of pesticide b. Is there evidence of periodic training (in applications has been performed by the organization regularly. appropriate language) of employees and Pesticides have been applied and handled by trained spraying workers who have associated smallholders on pesticide received usage of limited pesticide training. Training was delivered by Pesticide handling? and Fertilizer Controlling Commission of Agriculture Department Riau Province on 2 February 2016. Training covered handling of concentrate agrochemical and Note: Interview with workers and smallholders spraying method including pesticide hazard. on their knowledge and skills in pesticides handling. Site visit in Block F13-14 Division I LRE and Block K31 Division II BRE has been done to observe the spraying and pesticide application in field. Interview with spraying workers were evident that all of them has a good knowledge regarding the pesticide usage and its material usage and toxicity.

4.6.10 Proper disposal of waste material, according to procedures that are fully understood by workers and managers shall be demonstrated (see Criterion 5.3).

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) a. Is there an SOP for proper disposal of  Procedure CR-AGR-205- YES All empty pesticides containers were triple rinsed and collected in the temporary waste material? PST.06.11-1 – Handling of storage of hazardous waste. Pesticides containers were transported by authorised pesticide. b. Is there training provided to workers and transporter, PT Primanru Jaya. Records of pesticides containers quantity were managers on proper waste disposal?  SIMP-PROS-12 Management of evident. Liquid waste from pesticides was reused for the next spraying Hazardous Wastes c. Is there evidence of implementation of applications also there are several ex-containers “jerry can” that may re-use for  Field observation at estate field application. proper ways for waste disposal by the warehouse include spraying company? activities at estate operation Training/briefing regarding disposal of waste material has been conducted to all (Block F13 - 14 Division I Lubuk workers and staffs. Based on interview with workers, they understood the disposal Raja Estate, Block K31 Division of waste material. II Bukit Raja Estate)  The training list of attendance and training material

4.6.11 (M) Specific annual medical surveillance for pesticide operators, and documented action to treat related health conditions, shall be demonstrated.

a. Is there an updated list of pesticide  Documented procedure (SIMP- The documented procedure was defining the processes of health surveillance that YES operators? PROS-36) of Periodical Health conducted periodically at least once within a year. Besides of general medical b. Is there records of annual medical surveillance check-up for all employees, there is also defined the at risk employees that needed specific medical check-up (e.g. cholinesterase, audiometry and surveillance of pesticide operators?  Last medical check-up reports from Thamrin Laboratory dated spirometry), includes: pesticides and manuring operators for estate also the c. Is there medical and treatment records of 29th July 2015. machining operators and technician at mills. all pesticide operators? The medical check-up was conducted by third party laboratory (Thamrin

Laboratory Pekanbaru) with package: 1) Spraying, include bloods, urine, and cholinesterase and thorax Rontgen photo. 2) Specific, include Audiometry and spirometry. Last medical surveillance was conducted on period February-2015 to all at risk employees includes the pesticides operators, from the results was summarize 43 personnel suspected to abnormalities and followed up by conduct consultation and treatment with hospital RS Efarina Kerinci.

4.6.12 (M) No work with pesticides shall be undertaken by pregnant or breast-feeding women.

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) a. Is there a policy statement preventing a. Yes, there was policy for Sighted for evidence Buku Kerja Mandor in Division, providing information of YES pregnant and breast-feeding women from preventing pregnant & breast- presences workers (cropping, sprayer) Daily. Based on the evidence, Buku Kerja handling pesticides? feeding women from handling Mandor, for any pregnant/breast feeding were not allowed period 2015. b. Is there a lists of female workers handling pesticides. Memorandum Identification of pregnant & breast feeding conducted by nurse/doctor at clinic 002/UP/AMA-3/VIII/2015, dated pesticides available? 01-08-2015 & Memorandum c. Does the company have a system to No.001/UP/AMA-3/VIII/2015 identify pregnant and breast-feeding dated 01-08-2015. women? b. Yes there was lists of

d. Is there evidence showing that pregnant workers handling pesticide in and breast-feeding women are not division allowed to handle pesticides? c. Yes, according to memorandum above pregnant and breast feeding Memorandum 002/UP/AMA- 3/VIII/2015, dated 01-08-2015 & Memorandum No.001/UP/AMA- 3/VIII/2015 dated 01-08-2015

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

(M) A health and safety policy shall be in place. A health and safety plan covering all activities shall be documented and implemented, and its effectiveness monitored.

Guidance: 4.7.1 Growers and millers should ensure that the workplace, machinery, equipment, transport and processes under their control are safe and without undue risk to health. Growers and millers should ensure that the chemical, physical and biological substances and agents under their control are without undue risk to health when appropriate measures are taken. All indicators apply to all workers regardless of status. The health and safety plan should also reflect guidance in ILO Convention 184 (see Annex 1).

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) a. Is there a health and safety policy in  Integrated policy for sustainable The integrated policy for sustainable palm oil was written in local language YES place? palm oil dated 1st May 2015 Bahasa Indonesia and approved by CEO. The policy covers to prevent incidents (Major NCR  Is it written in an appropriate approved by CEO (Mark and occupational disease by integrated health and safety aspects in every 2016-09 closed) language? Wakeford) company management systems also compliance to regulation. The policy was  Has the policy been approved by an  Health and safety management displayed and deployed at several working place, such as at the office (estate authorized personnel and dated? system manual (MT-SIMP- division and mill), clinics, mess/houses, etc. There is also conducted morning  Does the policy cover mitigation of 01/Rev.02/Feb-2013) meeting/briefing that included socializing its policy. The policy was displayed at risks to workers health and safety at  OHS Objectives and strategic locations of Mill and Estates and communicated to employees including all workplace activities? programme (Form/Pros-01/03) contractor workers.  Are the workers aware of and issued on 18th January 2016 There is also available the documented health and safety management system understand the policy?  Site visit observation to estate manual that reoffered to international standard OHSAS 18001:2007, includes the and mill stages of plan-do-check-act cycles on to the health safety management system. b. Is there a health and safety plan in The records also sighted regarding OHS Objectives and programmes issued by place? mill/estate Manager dated 18th January 2016, the programmes included: Medical  Does the plan include targets for check-up (MCU), PPE (Personnel Protective Equipment) provisions, provision of improving occupational health and curative and first aid requirement, also monitoring of hazardous chemicals and safety? wastes. Within the OHS objective and programmes was included the time frame;  Does the plan reflect guidance person in charge and cost estimation. The monitoring of each objectives and

provided in the ILO Convention 184 programmes were conducted periodically by the person in charge. (see Annex 1)? Evidences were sighted for several OHS programmes / OHS Management c. Is there evidence of implementation of system manual, such as: resume of medical check-up include audiometry and the plan? spirometers, several mandatory PPE are available by the organization to the employees and visitors such as: helmet, safety shoes, ear plugs, ear muffs and d. Is the effectiveness of the health and respirators. Also there were deployed several PPE symbols at the at risk areas. It safety plan monitored? was also several working tools and machineries that utilized at mills and estate e. Is the health and safety plan made are equipped with safety devices, such as knives cover that using by harvester publicly available? and also pressure release valve at mill processing machineries. Several tools and equipment that regulates within the law are already certified and inspected by f. Is there an action plan if targets are not local government ministry of manpower (Disnaker Pelalawan Regency), such as: achieved? pressure vessels, lifting equipment, electricity installation, etc. In general, housekeeping at Mill and Estates (office estate, storage, and workshop) was good. Access for workers to workplace in general also good e.g. stair was provided with hand rail and platform at height was provided with border to prevent fall risk. Vertical stair in general has been provided with cover as well, e.g. chimney vertical stairs at mill and water torn vertical stair at estates. Nevertheless there is not all safety/emergency devices was provided as required

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) by the codes/standards, such as there is no available the gas detectors as the OHS control for working in confined space in order to measurement of adequacy of oxygen and availability of dangerous gas. Moreover, the emergency eyewash and shower were not properly deployed at the area needed, such as at the chemicals storage of agrochemicals and engine lubricants at the estate warehouse (traksi).

Major Non-conformance 2016-09:  There is not available yet the facility of emergency eyewash and shower especially at the estate area that stored hazardous chemicals (pesticides/herbicides and engine lubricants)  For confined space activities at mill (e.g. CPO tank cleaning) was not provided with gas detector equipment in order to ensure that the atmosphere include oxygens at the confined spaces was adequate to entered by humans (M) All operations where health and safety is an issue shall be risk assessed, and procedures and actions shall be documented and implemented to address the identified issues. All 4.7.2 precautions attached to products shall be properly observed and applied to the workers.

a. Have risk assessments been conducted  Form Hazard identification and OHS risk assessment procedure (SIMP-PROS-01) was established and YES for all operations where health and safety Risk assessment implemented for Mill and Estates activities. The mills risk analysis was covered is an issue? (FORM/PROS-01/02) activities such as: transportation, weighbridge receiver, FFB sorter, loading ramp, transfer carriage, sterilizer, tippler, thresher, press, clarifier, engine room, water b. Does the risk assessment cover all the  Procedure (SIMP-PROS-01) for treatment, effluent plant, workshop, warehouse, diesel tank, laboratory, offices organization’s processes and activities? hazard identification and risk assessment and traffic activities. While the estates risk analysis were covered activities such c. If any accidents had occurred, were these as: Loading FFB, estate maintenance, fertilizer, pesticides & herbicides, included in the risk assessments with harvesting, workshop activities at traksi and also warehousing. action plans to prevent further According to the procedure, at least OHS risk assessment document must be

recurrence? reviewed once a year and/or when incident happened will consider as review d. Have the procedures and action plans agenda. OHS risk assessment records 2015-2016 were sighted for all Mill and been documented and implemented to Estates. address the identified issues? The quantitative method of risk analysis was conducted for several activities at mill and estate, which the analysis method were described within the documented e. Have all precautions attached to products instruction that analysis was considered frequency of hazard and consequences been properly observed and applied to of risks that summarized the risk level from low risk to extreme risks. Within the the workers? risk analysis was also considered the hierarchy of control to take action of risk control such as elimination, substitution, engineering, administrative and PPE.

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) Action plan was developed as followed up the existing high risk in order to reduce to lowest residual risk analysis.

(M) All workers involved in the operation shall be adequately trained in safe working practices (see Criterion 4.8). Adequate and appropriate protective equipment shall be available to all 4.7.3 workers at the place of work to cover all potentially hazardous operations, such as pesticide application, machine operations, and land preparation, harvesting and, if it is used, burning.

a. Are all workers involved in the operation  Training needs identification OHS training has been programmed and provided appear balanced with OHS YES appropriately trained in safe working matrix (FORM/PROS-03/01) hazard and risk at Mill and Estates. Basic OHS training performed internally by practices (see Criterion 4.8)?  Training Programme EHS officer in charge at mill and estate, the training record and programme related to OHS were sighted and verified during this audit, e.g. licenses for boiler b. Are OSH training programs and training (Form/Pros-03/02) records available and conducted by  Site visit observation to estate operator, licence for operator of generator set, licence of heavy equipment operator, pesticide training for sprayers, etc. qualified persons? and mill The PPE for each activity has been established, e.g. working at mill, working at c. Is adequate and appropriate protective generator set, welder, working at laboratory, harvester, sprayer, fertilizer storage, equipment available to all workers at the chemical storage, etc. The distribution list of PPE was kept by supervisors place of work to cover all potentially (mandor) hazardous operations, such as pesticide Observation during this audit generally concluded that PPE has been well application, machine operations, and land provided and implemented. Workers were interviewed during this audit and preparation, harvesting and, if it is used, generally they understood the risk of their work and the purpose of using PPE. burning? Several mandatory PPE are available by the organization to the employees and d. Is PPE provided to workers and replaced visitors such as: helmet, safety shoes, ear plugs, ear muffs and respirators. Also when damaged? there were deployed several PPE symbols at the at risk areas.  Does the organization maintain a list of PPE distribution?  Are workers observed wearing appropriate PPE? (M) The responsible person/persons shall be identified. There shall be records of regular meetings between the responsible person/s and workers. Concerns of all parties about health, safety 4.7.4 and welfare shall be discussed at these meetings, and any issues raised shall be recorded.

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) a. Has the company identified the  Approval letter from local The responsible person to implement OSH within the organisation was known as YES responsible person/persons to implement authority Pemkab Pelalawan EHS committee (P2K3) which the certified Safety Officer (AK3U) as the secretary OSH? regarding EHS committee that been legalized for Lubuk Raja mill. The safety committee structure was b. Are meetings between the responsible (P2K3) evident and been approved by local authority Pemkab Pelalawan. However the responsible person and safety committee have not been established persons and workers conducted on a  Records of OHS Committee regular basis, or as required by law, if periodical meeting for estates (LRE and BRE) as this becomes non-conformance against the legal requirements (see clause 2.1.1). any? Records of OHS Committee periodical meeting were sighted in monthly included c. Are minutes of meeting recording the minutes of meeting and attendance, e.g. 21 Jan 2016 as the agenda was attendees and issues discussed regulation review; December 2015 is health review as the agenda. available? d. Are concerns of all parties about health, safety and welfare discussed at these meetings?

Note to Auditor: Interviews with workers reflect compliance to a-d above. Accident and emergency procedures shall exist and instructions shall be clearly understood by all workers. Accident procedures shall be available in the appropriate language of the workforce. 4.7.5 Assigned operatives trained in First Aid should be present in both field and other operations, and first aid equipment shall be available at worksites. Records of all accidents shall be kept and periodically reviewed. a. Are there SOPs for accidents and  Documented “Business There are separate documented procedures between emergency response and YES emergencies? continuity plan” incidents handling.  Do these cover all major potential  IMP-MILL-01 fire emergency The general emergency respond procedure was described by emergency respond emergencies, such as, but not handling procedure (SIMP-PROS-24) and was covered reporting in ERP situation, limited to fire, chemical spillage, and  IMP-MILL-02 Riots emergency responsibility of all members of ERP structure, handling of ERP situation, potential natural disasters specific handling mitigating of ERP situation. Moreover for the specifics situation, the organisation for the region, e.g. earthquakes,  IMP-MILL-03 Social was developed the documented “Business continuity plan” that covered fire volcanoes, etc.?  Protest emergency handling; Riots emergency handling; Social Protest; Employees strike  Are accidents investigated and  IMP-MILL-04 Employees strike handling; Earthquake emergency handling; Critical equipment failure handling; action taken to prevent recurrence? handling Waste water ponds spillage, etc.  Are accident records provided to the  IMP-MILL-05 Earthquake Accident procedure (SIMP-PROS-25) was available in Bahasa Indonesia and local authority in accordance with emergency handling covered first aid, handling of incident, reporting of incident and type of incident. Accidents investigation shall be conducted and developed corrective action taken local legal requirements, if any?  IMP-MILL-06 Critical equipment to prevent recurrence, accident records shall be provided to the local authority in  Available in the appropriate failure handling accordance with local legal requirements.

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) language of the workforce?  IMP-MILL-07 Waste water Emergency respond procedure has been socialized for estate and mill and attended by all workers. The list of attendance was sighted during audit. From b. Are the instructions on emergency ponds spillage workers interview in the field it was observed that the workers were clearly procedures clearly understood by all  SIMP-PROS-24 Emergency workers? response procedure understood of what is required in the procedure.  SIMP-PROS-25 Incident and First aid Internal training for workers in field and other operations has been c. Are assigned operators trained in First occupational disease reporting performed. The trainer was from polyclinic (nurse). Nevertheless, there is no Aid present in both field and other and investigation available the certified first aid training as this become non-conformance against operations?  Site visit observation to estate the regulation requirement (see criteria 2.1.1). d. Is there records of training of the first clinic First aid equipment was available at mill worksites and several workers have been aiders? trained to use it. Also available for foreman at harvesting and spraying area. The stocks of first aid kits were kept by central clinic and conducted periodical check. e. Is first aid equipment available at So far there is no accident happened during year period 2015-2016, nevertheless worksites? Is the equipment available for first aid cases was handled and records were kept by clinic. during conduct of field manual work? e. Are first aid kits adequately stocked and regularly checked in accordance with local legal requirements? f. Are records of all accidents kept and periodically reviewed for continuous improvement?

4.7.6 All workers shall be provided with medical care, and covered by accident insurance.

a. Is there evidence that all workers are  Site visit observation to estate Accident insurance was provided to workers under the scheme national security YES provided with medical care (refer to clinic “BPJS” as required by local regulation. Samples of workers for Mill and Estate Criterion 6.5.3), and covered by  The BPJS monthly payment were taken during this audit. Samples are taken have been provided with accident accident insurance by the company? was evident for period Jan-Feb insurance with percentage 0.54%. The monthly payment was evident for period For contract workers, the contract 2016. Jan-Feb 2016. between the company and the  MOU between organisation and The organisation also provided clinic with paramedics and medical doctors at contractor shall be in compliance. local hospital each estate units completed with medicines. If there is any emergency cases b. For accidents that have occurred, is escalates and cannot be handled by clinic, the organisation was also had cooperation with local hospital RS Santa Maria Pekanbaru. So far there is no there evidence that the affected workers contract employees within the organisation, all of permanent employees were received appropriate medical treatment, and was able to claim and receive covered by the insurance and medical treatment.

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) compensation under the insurance policy (if relevant)? c. Is there evidence that the insurance policies are valid? Occupational injuries shall be recorded using Lost Time Accident (LTA) metrics.

Specific Guidance for 4.7.7: The National Interpretation will define the metrics for LTA. For countries where there are no national interpretations, the growers will determine their own metrics. 4.7.7 For National Interpretation: National Interpretation will define the metrics for LTA. All legal requirements together with any local or national guidance on safe working practice in agriculture will be identified and used. It will also be important to identify what constitutes a ‘hazardous’ operation in the local context. a. Are occupational injuries recorded  Accident report (quarterly) P2K3 Accident number was reported on monthly basis. Quarterly accident statistic was YES using Lost Time Accident (LTA) to Disnaker also reported to local authority. Statistic accidents of Mill and Estates for 2015-16 metrics? were sighted during this audit, no accidents was reported so far, as matrix

presented below: Fatal = 0 ; Near miss = 0; FR (Frequency rate) = 0; SR (Severity Rate) = 0; Lost time = 0;

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

(M) A formal training programme shall be in place that covers all aspects of the RSPO Principles and Criteria, and that includes regular assessments of training needs and documentation of the programme.

Guidance: Workers should be adequately trained on: the health and environmental risks of pesticide exposure; recognition of acute and long-term exposure symptoms including the most vulnerable groups (e.g. young workers, pregnant women); ways to minimise exposure to workers and their families; and international and national instruments or regulations that protect workers’ health. The training programme should include productivity and best management practice, and be appropriate to the scale of the organisation. 4.8.1 Training should be given to all staff and workers by growers and millers to enable them to fulfil their jobs and responsibilities in accordance with documented procedures, and in compliance with the requirements of these Principles, Criteria, Indicators and Guidance. Contract workers should be selected for their ability to fulfil their jobs and responsibilities in accordance with documented procedures, and in compliance with the requirements of the RSPO Principles, Criteria, Indicators and Guidance. Growers and millers should demonstrate training activities for schemes smallholders who provide Fresh Fruit Bunches (FFB) on a contracted basis. Workers on smallholder plots also need adequate training and skills, and this can be achieved through extension activities of growers or millers that purchase fruit from them, by smallholders’ organisations, or through collaboration with other institutions and organisations (refer to ‘Guidance for Independent Smallholders under Group Certification’, June 2010, and ‘Guidance on Scheme Smallholders’, July 2009)

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) For individual smallholder operations, training records should not be required for their workers, but anyone working on the farm should be adequately trained for the job they are doing (refer to ‘Guidance for Independent Smallholders under Group Certification’, June 2010, and ‘Guidance on Scheme Smallholders’, July 2009).

For National Interpretation: Appropriate occupational training qualifications will be identified. a. Does the company maintain a list of staff,  Training needs identification The training needs and programme have been well identified and recorded on YES workers, smallholders and contract matrix (FORM/PROS-03/01) personnel competency matrix “Matrix of personnel competency identification”. All workers whom training must be provided  Training Programme functions were included in this training identification from mill manager, estate to? (Form/Pros-03/02) manager, assistant head, and group leader, operator at mill, sprayer, welder, and boiler operator. So far there is no contract employees within the organisation, all b. Is there a formal training programme in  Training attendance of permanent employees were covered by the matrix competency. place that covers all aspects of the RSPO  Individual training history Principles and Criteria? Does the formal  Site visit observation to estate The training needs identified appear sufficient and complete, this including training related to OHS, environmental, social, training required by regulations, training training program include: and mill related to operation of Mill and Estates. Training programme 2015 and 2016 were  Regular assessment of training sighted, the training programme was established based on the training needs needs of all staff, workers, identification. Realization of training programme 2015 were sighed, includes: smallholders and contract workers; Lubuk raja Mill  Training for workers on smallholder 2015 training realization: welder, lifting equipment operator, rigger, operator plots; diesel, electrical safety technician  Documentation of all the training Bukit Raja Estate assessment needs, formal training 2015 training realization: :Pesticides operator conducted and the list of 2016 training plan: SIO Operator, first aider and continue pesticide operator participants attending these formal Lubuk Raja Estate training; 2015 training realization: Safety officer (AK3U), forest fire handling; lifting  Does the training for workers cover, equipment operator. at minimum, to the following: Evidence of training for key persons were verified and sighted, including for boiler o The health and operator, chemical mixing operator, assistant of estates, pesticide and herbicide environmental risks of training, etc. pesticide exposure; The records include training certificates, attendance sheet and training evaluation. o recognition of acute and long-term exposure symptoms including the most vulnerable groups (e.g. young workers, pregnant women); o ways to minimise

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) exposure to workers and their families; o International and national instruments or regulations that protect workers’ health; and o Productivity and best management practice.

Note to auditor: To interview staff, workers, smallholders and contract workers to verify that the training has been conducted effectively.

4.8.2 Records of training for each employee shall be maintained.

a. Are training records maintained for each  Training attendance The system to record personal training was established-in this record; the training YES employee?  Individual training history which has been completed by each person was recorded and updated.

PRINCIPLES 5: ENVIRONMENTAL RESPONSIBILITY AND CONSERVATION OF NATURAL RESOURCES AND BIODIVERSITY CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) Aspects of plantation and mill management, including replanting, that have environmental impacts are identified, and plans to mitigate the negative impacts and promote the positive ones are 5.1 made, implemented and monitored, to demonstrate continual improvement. (M) An environmental impact assessment (EIA) shall be documented.

Guidance: The EIA should cover the following activities, where they are undertaken: 5.1.1 • Building new roads, processing mills or other infrastructure; • Putting in drainage or irrigation systems; • Replanting and/or expansion of planting areas; • Management of mill effluents (Criterion 4.4);

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) • Clearing of remaining natural vegetation; • Management of pests and diseased palms by controlled burning (Criteria 5.5 and 7.7).

Impact assessment can be a non-restrictive format e.g. ISO 14001 EMS and/or EIA report incorporating elements spelt out in this Criterion and raised through stakeholder consultation. Environmental impacts should be identified on soil and water resources (Criteria 4.3 and 4.4), air quality, greenhouse gases (Criterion 5.6), biodiversity and ecosystems, and people’s amenity (Criterion 6.1), both on and off-site. Stakeholder consultation has a key role in identifying environmental impacts. The inclusion of consultation should result in improved processes to identify impacts and to develop any required mitigation measures. For smallholder schemes, the scheme management has the responsibility to undertake impact assessment and to plan and operate in accordance with the results (refer to ‘Guidance for Independent Smallholders under Group Certification’, June 2010, and ‘Guidance on Scheme Smallholders’, July 2009).

For National Interpretation: National Interpretation will consider any national legal requirements together with any other issues that are not required by law but are nevertheless important, e.g. independent social and environmental impact assessment (SEIA) for replanting may be desirable under specific situations. a. Has an EIA been conducted according to  Document of RKL and RPL for Initial Environmental Impact Assessment documents (ANDAL, RKL and RPL) YES the scope of operation covering at Lubuk Raja Mill and Estate were available for Lubuk Raja Mill and Estates as approval No. 001/RKL minimum the following: Persetujuan Menteri Pertanian RPL/BA/VI/1994 dated 24 June 1994 for RKL RPL document and  Building new roads, processing mills Nomor: 001/RKL 037/ANDAL/RKL.RPL/BA/II/1996 dated 16 February 1996 for ANDAL document. or other infrastructure; RPL/BA/VI/1994 dated 24 June The EIA covered mill and plantations for 14,000 Ha and mill capacity 60 ton  Putting in drainage or irrigation 1994 FFB/hour. There was minute of meeting from Komisi Penilai dan Tim Teknis systems;  ANDAL: Persetujuan AMDAL Pelalawan Regency dated 23 December 2015 to evaluate Lubuk Raja  Replanting and/or expansion of Menteri Pertanian Nomor mill capacity extension from 60 ton FFB/hour to 75 ton FFB/hour. planting areas; 037/ANDAL/RKL.RPL/BA/II/199  Management of mill effluents 6 dated 16 February 1996 The EIA (ANDAL, RKL and RPL) has been conducted and documented according  SIMP-PROS-01 Rev.02 dated to local requirements and include consultation with relevant stakeholders to (Criterion 4.4);  Clearing of remaining natural 4 February 2013 Procedure of identify impacts and to develop any mitigation measures. vegetation; Environmental Aspect and  Management of pests and diseased Impact Identification For internal environmental aspect and evaluated its impact document, as required palms by controlled burning (Criteria  FORM/PROS-01/01 Rev.02 by the procedure •SIMP-PROS-01 Rev.02, the information of environmental 5.5 and 7.7). dated 4 February 2013 aspect and impact was reviewed and updated at least once a year. Last review Environmental Aspect and and update of environmental aspect and impact register was performed on b. Has the EIA been conducted and Impact Identification updated January 2016. Document of environmental impact assessment included: documented according to local January 2016  Building new roads, processing mills or other infrastructure; requirements?  Putting in drainage or irrigation systems; c. Does the assessment include consultation  Replanting and/or expansion of planting areas; with relevant stakeholders to identify  Management of mill effluents;

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) impacts and to develop any mitigation  Clearing of remaining natural vegetation; measures?  Management of pests and diseases palms by controlled burning;  Result of stakeholder consultation. Where the identification of impacts requires changes in current practices, in order to mitigate negative effects, a timetable for change shall be developed and implemented within a 5.1.2 comprehensive management plan. The management plan shall identify the responsible person/persons. a. Is there an environmental management  SIMP-PROS-01 Rev.02 dated Lubuk Raja Mill and Estates implemented procedure for identifying environmental YES plan in place? 4 February 2013 Procedure of aspect and evaluating its impact based on Environmental Management System b. Is the environmental management plan Environmental Aspect and ISO 14001:2004. As required by the procedure, the information of environmental documented to include the following: Impact Identification is reviewed and updated regularly. Last review and update of environmental  Identification of responsible person(s);  FORM/PROS-01/01 Rev.02 aspect and impact register for Lubuk Raja Mill and Estates was performed dated 4 February 2013  Potential impacts from current annually on January 2016. Environmental Aspect and practices; Lubuk Raja Mill and Estates has ensured that all activities with significant Impact Identification updated  Measures to mitigate negative environmental impacts were managed (Reviewed January 2016). Control January 2016 impacts; measure were defined and implemented for ensuring that negative environmental  SIMP-PROS-09 Procedure  Timetable for change (where changes impact were prevented or mitigated. There were several types of control Environmental Inspection in current practices are required). measures defined: engineering control, administrative control and PPE. The  FORM/PROS-09/01 Rev.02 implementation of those control measures are monitored during 3 monthly c. Has the environmental management plan dated 4 February 2013 – Form environmental inspection and also round of internal audits. been implemented? Checklist Environment and OHS

Inspection  Environmental management plan 2016

This plan shall incorporate a monitoring protocol, adaptive to operational changes, which shall be implemented to monitor the effectiveness of the mitigation measures. The plan shall be 5.1.3 reviewed as a minimum every two years to reflect the results of monitoring and where there are operational changes that may have positive and negative environmental impacts. a. Does the plan incorporate a monitoring - Environmental management plan Lubuk Raja Mill and Estates has identification the environmental aspect and YES protocol? 2016 impact assessment and reviewed regularly (last reviewed January 2016). The b. Is the monitoring protocol adaptive to plan was include monitoring that adaptive to operational changes and effective of operational changes? the mitigation measures. The plan based on EIA (RKL RPL) that covered:

c. Is the monitoring protocol implemented to  Monitoring water quality of Kerumutan river, Sosopan River, Terajan monitor the effectiveness of the mitigation river, and Terbanginag river every 6 months measures?  Monitoring erosion rate at 8 areas at unit II (slope 8-15%) and 2 areas at d. Is the plan reviewed at a minimum every two years to reflect the results of unit IV (slope 15-25%) every 6 months using USLE method

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) monitoring and where there are  Monitoring air ambient quality at mill and emplacement every 6 months operational changes that may have positive and negative environmental  Monitoring noise at production areas, generator room, and impacts? emplacement every 6 months The status of rare, threatened or endangered species and other High Conservation Value habitats, if any, that exist in the plantation or that could be affected by plantation or mill management, 5.2 shall be identified and operations managed to best ensure that they are maintained and/or enhanced. (M) Information shall be collated in a High Conservation Value (HCV) assessment that includes both the planted area itself and relevant wider landscape-level considerations (such as wildlife corridors).

Specific Guidance: This information will cover: • Presence of protected areas that could be significantly affected by the grower or miller; • Conservation status (e.g. IUCN status), legal protection, population status and habitat requirements of rare, threatened, or endangered (RTE) species that could be significantly affected by the grower or miller; • Identification of HCV habitats, such as rare and threatened ecosystems, that could be significantly affected by the grower or miller;

Guidance: 5.2.1 This information gathering should include checking available biological records and consultation with relevant government departments, research institutes and interested NGOs if appropriate. Depending on the biodiversity values that are present, and the level of available information, some additional field survey work may be required. Wherever HCV benefits can be realised outside of the management unit, collaboration and cooperation between other growers, governments and organisations should be considered.

For National Interpretation: Appropriate sources of information can include government or international lists of threatened species (‘red data lists’), national wildlife protection legislation, authorities responsible for protected areas and species, or relevant NGOs. Note: Operators need to consider a variety of land management and tenure options to secure HCV management areas in ways that also secure local peoples’ rights and livelihoods. Some areas are best allocated to community management and secured through customary or legal tenures, in other cases co-management options can be considered. Where communities are asked to relinquish rights so that HCVs can be maintained or enhanced by the companies or State agencies, then great care needs to be taken to ensure that communities retain access to adequate land and resources to secure their basic needs; all such relinquishment of rights must be subjected to their free, prior, and informed consent (see Criteria 2.2 and 2.3). a. Has a High Conservation Value (HCV)  Report of the identification and HCV assessment has been conducted and documented in the "Report of the YES assessment been conducted and cover the analysis of the existence of identification and analysis of the existence of high conservation value (HCV) area (Major NCR following: high conservation value (HCV) at PT. Serikat Putra – Riau Province” Cooperation PT Serikat Putra with Faculty 2016-10 closed)  Presence of protected areas that area at PT. Serikat Putra –Riau of Forestry IPB 2011". HCV identification field survey was conducted on could be significantly affected by the Province” Cooperation PT November – December 2010. HCV assessment covered Presence of protected grower or miller; Serikat Putra with Faculty of areas that could be significantly affected by the grower or miller, Conservation

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO)  Conservation status (e.g. IUCN Forestry IPB 2011". status (e.g. IUCN status), legal protection, population status and habitat status), legal protection, population  Field visit in HCV area at Lubuk requirements of rare, threatened, or endangered (RTE) species that could be status and habitat requirements of Raja Estate Blok E14/F14 and significantly affected by the grower or miller, and Identification of HCV habitats, rare, threatened, or endangered E15/F15 such as rare and threatened ecosystems, that could be significantly affected by (RTE) species that could be the grower or miller. significantly affected by the grower or miller. The team of assessors and the authors of the report are HCV team Faculty of  Identification of HCV habitats, such as Forestry IPB, consists of : rare and threatened ecosystems, that could be significantly affected by the  Ir. Nyoto Santoso, MS (Team leader - Biodiversity conservation expert) grower or miller;  Ir. Siswoyo, MSi (Flora ecology expert) b. Was the HCV assessment performed by a  Ahmad Faisal Siregar, S. Hut (Socio cultural expert) qualified HCV assessor?  Sayidina Ali, Amd (GIS expert)  Sutopo, S.Hut (Wildlife expert) c. Was the HCV assessment performed in  Udi Kusdinar, S.Hut (Assistant assessor) consultation with relevant stakeholders? d. Does the HCV assessment include Assessor qualification was available in The Procedure of Identification, Handling, checking of available biological records? and Protecting of High Conservation Value Area, dated on August 31, 2013. Assessment was conducted on the whole plantation that has been embedded and e. Does the HCV assessment include both the area around the plantation includes rivers, forests, and others. the planted area itself and relevant wider

landscape-level considerations (such as Identification HCV area was listed The HCV Area Map at PT. Serikat Putra, wildlife corridors)? Pelalawan, Riau Province (Scale 1:400.000). Sources map form Working Map at f. Was the HCV assessment performed in PT. Serikat Putra, SRTM 90m NASA, Networking Map of Road and River in Riau accordance to the latest methodology Province, and GIS Analysis. available at global and national level? g. Are identified HCVs mapped? Major Non-conformance 2016-10:  There was not peer review as part of HCV Identification Method within Report of HCV Identification at PT. Serikat Putra, 2011.

(M) Where rare, threatened or endangered (RTE) species, or HCVs, are present or are affected by plantation or mill operations, appropriate measures that are expected to maintain and/or enhance them shall be implemented through a management plan. 5.2.2 Specific Guidance: These measures will include:

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) • Ensuring that any legal requirements relating to the protection of the species or habitat are met; • Avoiding damage to and deterioration of HCV habitats such as by ensuring that HCV areas are connected, corridors are conserved, and buffer zones around HCV areas are created; • Controlling any illegal or inappropriate hunting, fishing or collecting activities, and developing responsible measures to resolve human-wildlife conflicts (e.g. incursions by elephants). a. Are HCVs and/or RTEs present?  Report of the identification and HCV assessment results in the area of PT Serikat Putra was identified of 110,90 YES ha HCV areas, as follows : (Major NCR b. If HCVs and/or RTEs are present, has a analysis of the existence of No Name of HCV Type Location Area (Ha) 2016-11 closed) management plan containing appropriate high conservation value (HCV) Lubuk Raja Estate measures that are expected to maintain area at PT. Serikat Putra–Riau Province” Cooperation PT 1 Kerumutan Riparian HCV 1.2 14.75 and/or enhance them been prepared? The Area HCV 4.1 measures should include the following: Serikat Putra with Faculty of Forestry IPB 2011". 2 Terajan Riparian HCV 1.2 16.09  Ensuring that any legal requirements Area HCV 4.1  Field visit at HCV area at LRE relating to the protection of the 3 Terbangiang HCV 1.2 10.67 species or habitat are met; and BRE, among other Riparian Area HCV 4.1 Terbangian Riparian Area,  Avoiding damage to and deterioration 4 Factory Reservoir HCV 1.2 Block of E-15 2.48 Grave at Block of D9, Tapian of HCV habitats such as by ensuring Nauli Reservoir, Block of that HCV areas are connected, 5 Gesang Tirta Putra HCV 1.2 Block of F-15 1.02 corridors are conserved, and buffer E14/F14, Tirta Semar Reservoir Reservoir, and Block of 6 Tapian Nauli HCV 1.2 Block of E-43 1.50 zones around HCV areas are created; E15/F15. Reservoir  Controlling any illegal or inappropriate  HCV Management and 7 POME Area HCV 1.2 7.50 hunting, fishing or collecting activities, 8 Grave at Block of HCV 6 2.00 and developing responsible measures Monitoring Plan at PT. Serikat Putra D9 to resolve human-wildlife conflicts Lubuk Raja Estate Area 56.01  Report of HCV Monitoring at (e.g. incursions by elephants). Bukit Raja Estate PT. Salim Ivomas Pratama & c. Are the measures contained in the 1 Betung Riparian HCV 1.2 8.37 Subs, 2015 (Lubuk Raja Unit) Area HCV 4.1 management plan actively implemented to  Report of HCV Socialization at 2 Kerumutan Riparian HCV 1.2 25.16 maintain and/or enhance HCV values? LRE, PT. Serikat Putra Area HCV 4.1 d. Are the HCV values and the presence of  Report of HCV Socialization at 3 Terajan Riparian HCV 1.2 1.62 RTEs periodically monitored? BRE, PT. Serikat Putra Area HCV 4.1  Report of Interference Patrol for 4 Sosopan-1 Riparian HCV 1.2 7.15 e. Are the field inspections conducted HCV Area, BRE, PT. Serikat Area HCV 4.1 regularly to ensure implementation of Putra 5 Sosopan-2 Riparian HCV 1.2 8.25 mitigation plan (especially along areas Area HCV 4.1  Report of HCV Monitoring bordering natural area)? 6 Pondok-1 Reservoir HCV 1.2 Block of H-7 0.50 at PT. Salim Ivomas Pratama & 7 Pondok-2 Reservoir HCV 1.2 Block of L-22 1.00 Subs, 2015 (Lubuk Raja Unit) 8 Pondok-3 Reservoir HCV 1.2 Block of H-24 0.30 9 Swamp area HCV 1.2 Block of L-34 2.50

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) HCV 4.1 10 Grave of Datuk HCV 6 Block of J-25 0.04 Lutut Panjang Bukit Raja Estate Area 54.89 Total of HCV Area PT. Serikat Putra 110.90

Based on report of HCV identification, there were status of vulnerable IUCN , App II CITES, and Protecting of Government Regulation of No. 7 / 1999, as follows :  IUCN (Vulnerable) between other Musang luwak (Paradoxurus hermaproditus) and Angsana (Pterocarpus indicus Willd.)  CITES (App II) between other Kucing kuwuk (Felis bengalensis), Musang luwak (Paradoxurus hermaproditus), King kobra (Naja sputatrix), Kobra hitam (Naja sumatrana), Ular phyton (Phyton reticulatus), Biawak (Varanus salvator), and Kantong semar (Nepenthes alata)  PP No. 7 / 1990 between other Kucing kuwuk (Felis bengalensis), Kuntul kecil (Egretta garzeta), Cekakak belukar (Halcyon smymensis), Biawak (Varanus salvator), and Kantong semar (Nepenthes alata)

The water area (river, swamp, and reservoir) was function as water provider and manage the hydrology and protection area. Areas of important for identification of local communities were grave at block of D9 and Datuk Lutut Panjang.

To manage and monitor the areas identified HCVs in PT Serikat Putra, the company has establish the management plan HCV which yearly created in the Report of HCVs Monitoring 2015, PT. Serikat Putra such as :  Install and repair boundary markers of HCV (HCV 4.1)  Instalments of boundary marker and attribute for HCVs area (protected wildlife posters and warning signs ban on hunting and spoil)  Socialization HCV to employees and contractors (All HCV areas)  Socialization of HCV to the public stakeholders (All HCV areas)  Socialization of HCV area was conducted for LRE and BRE staff and employee (All HCV areas)

The implementing of HCV monitoring plan was demonstrated, such as :  Monitoring and maintenance of HCV attributes (All HCV areas)

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO)  Monitoring protected species  Monitoring and maintenance of erosion control plants (HCV 4.1)  Routine Patrol (All HCV areas)

Implementing evaluation of the management and monitoring plan was documented in Report of HCV Monitoring at PT. Salim Ivomas Pratama & Subs, 2015 (Lubuk Raja Unit). Most of the implementation of HCV management and monitoring has effectively conducted and several unrealized managements plan becomes the non-confomance (#2016-11 and 2016-12).

Major Non-Conformance 2016-11:  Socialization of HCV area for employee of LRF and surrounding communities at PT. Serikat Putra has not been conducted.

There shall be a programme to regularly educate the workforce about the status of these RTE species, and appropriate disciplinary measures shall be instigated in accordance with company 5.2.3 rules and national law if any individual working for the company is found to capture, harm, collect or kill these species. a. Does the company have policies or rules  HCV Management and The company has had procedure to protect RTE species in No. SOPP : CR-AGR- YES to protect RTE species? Monitoring Plan at PT. Serikat 703-NKT.06.11-1 with title of Identification, Handling, and Protecting of HVCA. (Minor NCR Socialization program was conducted by the company either passively through 2016-12 closed) b. Is there a programme to regularly Putra educate the workforce about the status of  Report of HCV Monitoring the posters and warning signs (protected wildlife posters and warning signs ban on hunting and spoil areas HCV) as well as actively to employees and the public. the RTE species? at PT. Salim Ivomas Pratama & Subs, 2015 (Lubuk Raja Unit) Penalties under the UU No.5 / 1990 "person who deliberately capture, injure, kill, c. Is there evidence or action taken to  Report of HCV keep, possess, maintain, transport, and trade in protected animals alive or dead implement the rules and programs? E.g. Socialization at LRE and BRE, can shall be punished with imprisonment of 5 years and a maximum fine Inspections conducted to check no 2015 100.000.000 IDR (one hundred million). traps/snares put up within or nearby areas. Minor Non-conformance 2016-12: d. Have appropriate disciplinary measures  Penalties of the UU No. 5/1990 have not been communicated directly to been imposed in accordance with all employees and the local community during HCV socialization and through company rules and national law, should the HCV sign boards and warnings board. any individual working for the company is found to have captured, harmed, collected or killed any RTE species?

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) Where a management plan has been created there shall be ongoing monitoring: 5.2.4 • The status of HCV and RTE species that are affected by plantation or mill operations shall be documented and reported; • Outcomes of monitoring shall be fed back into the management plan. a. Does the management plan contain  HCV Management and The company have the management plan for monitoring of HCV and RTE status. YES ongoing monitoring of status of HCV and Monitoring Plan at PT. Serikat Implementation of management plan was documented and reported by Dept. of RTE species that are affected by Putra Sustainability, PT. Serikat Putra. Monitoring of HCV has been conducted, such as: plantation or mill operations?  Report of HCV Monitoring at  Monitoring of HCV attributes (Sign Boards Conditions) b. Is the status documented and reported? PT. Salim Ivomas Pratama &  Monitoring of HCV conditions from any disturbance both internal and external Subs, 2015 (Lubuk Raja Unit) factor (HCV area conditions) c. Are the outcomes of monitoring fed back  Standard Input Budget 2016 PT.  Monitoring of protected animals was annually conducted and reported to into the management plan? Serikat Putra (LRE, BRE, LRF) Balai Konservasi Sumber Daya Alam (BKSDA), Riau Province. The last report on January 15, 2016  HCV Area Patrol Monthly (Schedule team to monitor the condition and attributes HCV)  The outcomes of monitoring was fed back into the management plan in 2016 include Standard Input Budget 2016 PT. Serikat Putra (LRE, BRE, LRF)

The outcomes of monitoring were fed back by management into the management plan or budget 2016, PT. Serikat Putra.

Where HCV set-asides with existing rights of local communities have been identified, there shall be evidence of a negotiated agreement that optimally safeguards both the HCVs and these rights.

5.2.5 Specific Guidance: For 5.2.5: If a negotiated agreement cannot be reached, there should be evidence of sustained efforts to achieve such an agreement. These could include third party arbitration (see Criteria 2.3, 6.3 and 6.4). a. Is there HCV set-asides with existing  HCV Management and The company have the management plan for monitoring of HCV and RTE status. YES rights of local communities? Monitoring Plan at PT. Serikat Implementation of management plan was documented and reported by Dept. of b. Who are the affected communities? Putra Sustainability, PT. Serikat Putra. Monitoring of HCV has been conducted, such as:  Report of HCV Monitoring at  Monitoring of HCV attributes (Sign Boards Conditions) c. Is the identified HCV areas mapped? PT. Salim Ivomas Pratama &  Monitoring of HCV conditions from any disturbance both internal and external d. Is there evidence of stakeholder Subs, 2015 (Lubuk Raja Unit) factor (HCV area conditions) consultation and negotiated agreement,  Standard Input Budget 2016 PT.  Monitoring of protected animals was annually conducted and reported to in accordance to FPIC principles, with Serikat Putra (LRE, BRE, LRF) Balai Konservasi Sumber Daya Alam (BKSDA), Riau Province. The last local community to optimally safeguard report on January 15, 2016

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) both the HCVs and rights of local  HCV Area Patrol Monthly (Schedule team to monitor the condition and communities? attributes HCV) e. If a negotiated agreement cannot be  The outcomes of monitoring was fed back into the management plan in 2016 reached, is there evidence of sustained include Standard Input Budget 2016 PT. Serikat Putra (LRE, BRE, LRF) efforts to achieve an agreement? Refer to specific guidance for 5.2.5. The outcomes of monitoring were fed back by management into the management plan or budget 2016, PT. Serikat Putra.

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

5.3.1 (M) All waste products and sources of pollution shall be identified and documented.

a. Is there a registry/list of waste products  SIM-PROS-12 Rev.02 dated 4 Identification of waste and pollution sources from Lubuk Raja Mill and Estates YES produced? February 2013 - Procedure of activities was evident. The source of pollution, type and control method of waste was recorded. b. Is there a registry/list of pollution Waste Control sources?  FORM/PROS-01/01 Rev.02 The waste products from estate generally were domestics waste and also several dated 4 February 2013 hazardous waste from estate operations activities as detailed below (but not Environmental Aspect and limited): Impact Identification updated  Ex-pesticides containers (bottles and jerry cans) January 2016  Used battery, used oil, used oil filter from the heavy vehicles  Plastics  Medical waste (first aid usage)  Polybag

 Rags and fertilizer containers  Emissions from vehicles

While at the Mill it was several hazardous waste generated from the mill operations, in detailed below (but not limited):  POME  Palm shell  Fibre  Empty bunch  Boiler ash  Chemicals jerry can and bottles

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO)  Gunny sacks from chemicals materials  Welding materials from workshop activities  Lubricants from workshop materials  Contaminated rags from workshop activities  Usage lamps  Tires  Usage batteries  Usage oil filters  Emissions from vehicles and other engines (generator, boilers)

5.3.2 (M) All chemicals and their containers shall be disposed of responsibly.

a. Is there an inventory of chemicals and  SIM-PROS-12 Rev.02 dated 4 The disposal methods were described on documented Procedure (SIM-PROS-12 YES their containers that are used and kept on February 2013 - Procedure of Rev.02 dated 4 February 2013) detailed as follows: (Major NCR site? Waste Control Waste category, such as: 2016 – 13 b. How are chemicals and their containers  Record of hazardous and non- 1. Hazardous waste, separated for reuse and non-reuse closed) 2. Non-hazardous waste, separated for non-organics (economic and non- stored and disposed off? Is it in hazardous waste accordance to best practices? (as  Hazardous waste manifest economic value) and organics (economic and non-economics).

prescribed by manufacturers’ labels, local  Observation to temporary Disposed methods: requirement, national or international best storage of hazardous waste practice)  Logbook of hazardous waste 1. TPA (organics and non-organics)  Permit of temporary storage of 2. TPS B3 managed by licensed vendors c. Are collection and disposal records of hazardous waste (TPS B3) from 3. Reuse chemicals and their containers Head of Pelalawan Regency 4. Send back to supplier/vendors maintained? No.KPTS660/BLH/2011/329 All empty agrochemical containers were triple rinsed, the jerry can were reused to dated 22 June 2011 valid spraying activities, while bottles containers were stored in the designated area through 5 years (Lubuk Raja and categorized as hazardous waste (LB3). Records of chemical containers Mill), Head of Pelalawan quantity disposed were evident. Liquid waste from agrochemical was reused for Regency the next spraying application. No.KPTS.660/BLH/522/2015 dated 6 May 2015 valid for 5 While the ex-fertilizer sacks was also rinsed and reuse for fertiliser distribute years (Lubuk Raja Estate); “untilan” at estate operations. Several ex-chemicals materials containers that use KPTS.660/BLH/526/2015 dated at mills operations such as laboratory chemicals ex-containers, boiler additive 8 May 2015 valid for 5 years liquids, lubricants, workshop materials, use battery, etc. were categorized as hazardous wastes that stored at hazardous waste temporary warehouse (TPS B3)

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) (Bukit Raja Estate). that will be managed by licensed vendor: PT Primanru Jaya for transporter and  Permit temporary collect of used oil collector; PT Holcim Indonesia as used rags and agrochemical container hazardous waste for PT processor, PT Andhika Makmur as used oil filter processor, PT. Prasadha Primanru Jaya from Ministry of Pamunah Limbah Industri as used lamps processor, PT Bintangmas Cahaya Environment No.234 year 2011 Internasioal as used oil processor. dated 8 November 2011, valid for 5 years. License of hazardous wastes temporary storage (TPS B3) as issued from Head of Pelalawan Regency, defined that the time limit was 180 days because produce (less than) < 50 kg per days. The license include: lubrication oil, battery, oil filter, pesticides/chemical containers, rugs and medical wastes.

Manifest of disposal were sighted for 20 March and 16 September 2015. Others records sighted, such as “Laporan pengelolaan LB3” Period January -December 2015 and monthly logbook of hazardous waste.

Major Non-conformance 2016-13:  Medical waste was stored in temporary storage of hazardous waste Estates and has not been transported by the authorised institution.  Processor of hazardous waste was not clear. Hazardous waste manifest copy #7 has not been provided for period September 2015  Hazardous waste temporary storage at Bukit Raja Estate has not accomplished with shower, eye washer as required by permit.  There was evidence that chemicals at laboratory have been expired e.g. Nalco 460-S0260 expired on October 2015, Nalco S0277 and S0222 expired on September 2015. A waste management and disposal plan to avoid or reduce pollution shall be documented and implemented.

Guidance: The waste management and disposal plan should include measures for: • Identifying and monitoring sources of waste and pollution. 5.3.3 • Improving the efficiency of resource utilisation and recycling potential wastes as nutrients or converting them into value-added products (e.g. through animal feeding programmes). • Appropriate management and disposal of hazardous chemicals and their containers. Surplus chemical containers should be reused, recycled or disposed of in an environmentally and socially responsible way using best available practices (e.g. returned to the vendor or cleaned using a triple rinse method), such that there is no risk of contamination of water sources or risk to human health. The disposal instructions on the manufacturers’ labels should be adhered to. Use of open fire for waste disposal should be avoided.

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) For National Interpretation: National Interpretation (or an RSPO recognised parallel means) should include, as appropriate: details of relevant national laws or policies, a list of waste types (hazardous, non-hazardous, domestic, etc.) which must be considered, any types of disposal which are not acceptable (e.g. untreated waste water may not be discharged directly into streams or rivers (see Criterion 4.4), existing best practice guidelines on recycling and re-use of nutrients, managing effluent ponds, increasing mill extraction efficiency and appropriate disposal of wastes. a. Is there a documented waste management  Estate and Mill Procedure waste handling including hazardous waste handling has been YES and disposal plan to avoid or reduce  CR-AGR-705-LBD – waste established and implemented. The procedure required waste to be segregated pollution? handling from domestic from point of sources. In addition Mill and Estates also established waste register, which described wastes sources from each activity/location, its classification b. Does the waste management and disposal  CR-AGR-706-PLK – medical plan, at minimum, include measures for: waste handling (organic, inorganic or hazardous), and its disposal, reusing or recycling. EFB and solid from decanter were used for fertiliser in Lubuk Raja Estate and Bukit Raja  Identifying and monitoring sources of  SIM-PROS-12 Rev.02 dated 4 Estate. Fibre and Shell from Lubuk Raja Mill was used for boiler feed. Rest of waste and pollution? February 2013 - Procedure of shell was sold to the third party.  Improving the efficiency of resource Waste Control

utilisation and recycling potential of  FORM/PROS-01/01 Rev.02 It was observed that organic and inorganic waste was segregated at point of wastes as nutrients or converting dated 4 February 2013 source. Mill and Estate including housing has provided different colour of waste them into value-added products (e.g. Environmental Aspect and bin for each type of waste. Organic and inorganic wastes from Mill and Estates through animal feeding Impact Identification updated including housing were disposed to landfill in the Estatse area. Areas of organic programmes)? January 2016  Observation at mill and estates, and inorganic wastes disposal was far from housing, in the flood-free area and not  Appropriate management and in swamp area and completed with warning sign not burning wastes. disposal of hazardous chemicals and clinic  Manifest of disposal waste were their containers? There are evident the measurement periodical report include air ambience quality;  Reduction, re-use and recycle of sighted for March and September 2015 emissions of vehicles and other engines (boilers, generators, etc.) also the waste? programme on how to reduce the fuel usage and environmentally friendly. The c. Is there evidence that the plan has been last measurement was performed on 2nd semester 2015 by Sucofindo Laboratory. implemented? Boiler emission in accordance to PermenLH 7/2007, generator emission in accordance to PermenLH 13/2009. d. Is there evidence that waste has not been Hazardous wastes generated by Mill and Estate are used oil, used oil filter, used disposed off using open fire? battery, medical waste and used lamp. Temporary storage of hazardous waste was available in Mill and Estates to collect hazardous waste prior to be transported by licensed vendor. Disposal of hazardous waste were performed in coordination with Sustainability Department and OHS officer. Disposal of hazardous waste was completed with manifest. Manifest of disposal were sighted for 20 March 2015 and 16 September 2015.

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO)

5.4 Efficiency of fossil fuel use and the use of renewable energy is optimised.

A plan for improving efficiency of the use of fossil fuels and to optimise renewable energy shall be in place and monitored.

Guidance: Renewable energy use per tonne of Crude Palm Oil (CPO) or palm product in the mill should be monitored. 5.4.1 Direct fossil fuel use per tonne of CPO or Fresh Fruit Bunches (FFB) should be monitored. Energy efficiency should be taken into account in the construction or upgrading of all operations. Growers and millers should assess the direct energy use of their operations, including fuel and electricity, and energy efficiency of their operations. This should include estimation of fuel use by on-site contract workers, including all transport and machinery operations. The feasibility of collecting and using biogas should be studied if possible. a. Is there a plan for improving efficiency of  Fossil fuels efficiency Lubuk Raja mill and estates have been develop the programme/plan on how to YES the use of fossil fuels and to optimise programme 2016 conduct efficiency for utilization of fossil fuel by develop the standard to manage renewable energy?  Renewable energy (Fibre and the consumption each of vehicles and electricity generator (genset) within litre per hours both for organization owned and contractors; the monitoring conducted by b. Has the plan been implemented and is it shell) optimization programme monitored? 2016 monthly and reported to technical department.  Records of diesel fuels usage Also it was developed the plan/programme regarding optimization of renewable c. Does the monitoring system encompass 2014 and 2015 energy known as fibre and shell as boiler fuels at mills. There are monitoring the following :  Records of fibre and shell usage records sighted regarding the utilization of fossils fuels and fibre shell that  Renewable energy use/tCPO or palm 2015 presented as below: product;  Direct fossil fuel use/tCPO or tFFB; Renewable Energy 2015 (ton) % utilization  Estimated fuel use by on-site contract (Fibre and shell) workers and transport and machinery Fibre 41,135.37 100% operations;  Electricity use in operations. Shell 9,990.12 67.45% d. Was energy efficiency taken into account during the construction or upgrading of all operations? Fossil fuels 2014 2015 Vehicles and e. Has studies on the feasibility of collecting 292,705 318,763 and using biogas been carried out? generators (litre) Per tonnage FFB 0.95 1.07

So far there is a plan regarding feasibility of collecting and using biogas, however

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) it still on management discussion.

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

(M) There shall be no land preparation by burning, other than in specific situations as identified in the ‘Guidelines for the Implementation of the ASEAN Policy on Zero Burning’ 2003, or comparable guidelines in other regions.

Guidance: 5.5.1 Fire should be used only where an assessment has demonstrated that it is the most effective and least environmentally damaging option for minimising the risk of severe pest and disease outbreaks, and exceptional levels of caution should be required for use of fire on peat. This should be subject to regulatory provisions under respective national environmental legislation.

Extension/training programmes for associated smallholders may be necessary. a. Does the company have a zero burning  Procedure CR-AGR-106- Zero burning policy was described in Procedure CR-AGR-106-NEW.06.11-1 YES policy or any statement on zero burning? NEW.06.11-1 dated 31 August dated 31 August 2013 Land Clearing and Land Preparation of Planting. It described that land preparation of planting/replanting is conducted by cutting and b. Does the company have SOPs for land 2013 Land Clearing and Land chipping. Policies of Sustainable Palm Oil signed by CEO on 1 May 2015 point 5 preparation which mentions zero Preparation of Planting burning?  Policy of Sustainable Palm Oil explain that land preparation of replanting is conducted with zero burning. signed by CEO on 1 May 2015. There was no land preparation for replanting by burning. Replanting was planned c. Was land prepared using the burn  Field Observation to Lubuk Raja on 2018. method? If yes, was it based on the estate and Bukit Raja Estate specific situations identified in the ‘Guidelines for the Implementation of the ASEAN Policy on Zero Burning’ 2003, or comparable guidelines in other regions? d. Has the policy been implemented throughout the operations? e. Is there training programmes for associated smallholders on zero burning where appropriate?

Where fire has been used for preparing land for replanting, there shall be evidence of prior approval of the controlled burning as specified in ‘Guidelines for the Implementation of the ASEAN Policy on Zero Burning’ 2003, or comparable guidelines in other regions. 5.5.2

For National Interpretation:

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) National Interpretation will identify any specific situations where such use of fire may be acceptable, for example through reference to ‘Guidelines for the Implementation of the ASEAN Policy on Zero Burning’ 2003, or comparable guidelines in other regions.

a. Where fire has been used for preparing Not Applicable Not Applicable N/A land for replanting, is there evidence of prior approval of the controlled burning as specified in ‘Guidelines for the Implementation of the ASEAN Policy on Zero Burning’ 2003, or comparable guidelines in other regions? b. What was the justification for using fire?

Preamble

Growers and millers commit to reporting on operational greenhouse gas emissions. However, it is recognised that these significant emissions cannot be monitored completely or measured 5.6 accurately with current knowledge and methodology. It is also recognised that it is not always feasible or practical to reduce or minimise these emissions. Growers and millers commit to an implementation period until the end of December 2016 for promoting best practices in reporting to the RSPO, and thereafter to public reporting. Growers and millers make this commitment with the support of all other stakeholder groups of the RSPO.

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

(M) An assessment of all polluting activities shall be conducted, including gaseous emissions, particulate/soot emissions and effluent (see Criterion 4.4).

5.6.1 Specific Guidance: Where practically feasible, operations should follow best management practices to measure and reduce emissions. Advice on this is available from the RSPO. a. Has an assessment of all polluting  FORM/PROS-01/01 Rev.02 Identification of pollution and emission sources at Lubuk Raja Mill and estates YES activities been conducted including dated 4 February 2013 activities was evident. The source of pollution, type of pollution and its control was (Major NCR gaseous emissions, particulate/soot Environmental Aspect and documented. The information of pollution and emission sources at Lubuk Raja Mill 2016 – 14 emissions and effluent (see Criterion Impact Identification updated and estates was reviewed including boiler emission, methane from Palm Oil Mill closed) 4.4)? January 2016 Emission, diesel electricity generator and vehicles and heavy equipment. st nd b. Is there a documented list of all identified  Report of analysis for boiler Monitoring and measurement results for 1 and 2 semester of 2015 were sighted for boiler emission against Environment Ministry Decree #07/2007, diesel polluting activities? emission, generator emission, ambient air, noise electricity generator against Environment Ministry Decree #Kep13/Menlh/3/95, ambient noise against Environment Ministry Decree #48/Menlh/11/96, also

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) ambient air quality against Government Regulation #41/1999.

Major Non-conformance 2016-14:  There was no emission measurement result of operation vehicle, heavy equipment and generator in Estates.  There was no odour measurement result of POME at mill

(M) Significant pollutants and greenhouse gas (GHG) emissions shall be identified, and plans to reduce or minimise them implemented.

5.6.2 Specific Guidance: For 5.6.2: Plans will include objectives, targets and timelines. These should be responsive to context and any changes should be justified. For 5.6.2 and 5.6.3: The treatment methodology for POME will be recorded. a. Is there a documented list of all identified  CR-AGR-710-GHG.06.14-1 Identification of greenhouse gas (GHG) emissions sources at Lubuk Raja Mill and YES significant pollutants and GHG Identification of greenhouse estates activities was evident.. (Major NCR emissions? gas (GHG) emissions sources The information of GHG sources was reviewed including : 2016 – 15 b. Are there plans to reduce or minimise the  Site visit to Lubuk Raja Estate closed) 1. Fertiliser and agrochemical identified pollutants and GHG emissions? Mill and Estate  The results of monitoring 2. FFB transportation c. Do the plans include objectives, targets of waste water effluent 3. Operation of generators and timelines for reduction that are responsive to context? Mill d. Are the plans being implemented? Was 1. POME there any changes? Is it justified? 2. Operation of generators 3. Operation of heavy equipment

e. Is the treatment methodology for POME 4. CPO and PK transportation recorded? (refer to C 4.4.3) Several effort to reduce GHG emissions is prepared as follows: 1. Zero burning 2. Utilization of waste fibre and shell as boiler fuel and electricity from turbines

The program was identify the source of greenhouse gas emissions as listed below: 1. Methane from POME at mill 2. Fossil fuels emissions from vehicles and engines 3. Chemical fertilizer

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) 4. Electricity usage

The records of each programme were sighted as evident implementation. Lubuk Raja Mill waste water was processed through a series of waste water treatment ponds: eights anaerobic ponds, two sediment ponds and two aerobic ponds. Process parameter monitoring and maintenance of the ponds were sighted. Quality of waste water effluent is monitored monthly in line with the requirements. The results of monitoring of waste water effluent were reviewed including measurement of BOD, COD, oil and fat, N total result of discharge effluent conforms to the limits for parameters.

Major Non Conformance 2016-15:  The plans to reduce or minimise the identified pollutant and GHG emission doesn’t include objective, target, and timelines for reduction.

A monitoring system shall be in place, with regular reporting on progress for these significant pollutants and emissions from estate and mill operations, using appropriate tools.

Specific Guidance: For 5.6.3 (GHG): For the implementation period until December 31st 2016, an RSPO-endorsed modified version of PalmGHG which only includes emissions from operations (including land use practices) can be used as a monitoring tool.

5.6.3 For 5.6.3: In addition, during the implementation period, growers will start to assess, monitor and report emissions arising from changes in carbon stocks within their operations, using the land use in November 2005 as the baseline. The implementation period for Indicator 5.6.3 is the same implementation period for Criterion 7.8. During the implementation period, reporting on GHG will be to a relevant RSPO working group (composed of all membership categories) which will use the information reported to review and fine tune the tools, emission factors and methodologies, and provide additional guidance for the process. Public reporting is desirable, but remains voluntary until the end of the implementation period. During the implementation period the RSPO working group will seek to continually improve PalmGHG, recognising the challenges associated with measuring GHG and carbon stock. PalmGHG or RSPO-endorsed equivalent will be used to assess, monitor and report GHG emissions. Parties seeking to use an alternative to PalmGHG will have to demonstrate its equivalence to the RSPO for endorsement. a. Is there a system in place to monitor Email and calculation of GHG The GHG emission calculation for PT Serikat Putra uses YES emission of pollutants including RSPO calculation Year assessment PalmGHG V 2.1.1. As RSPO requirement. The reporting was conducted (Minor NCR greenhouse gases from estate (plantation) 2014 reporting date 4 February periodically to the RSPO interest (Ms. Melissa Chin). Reports 2014 was sighted 2016 – 16 and mill operations? 2016. that summarized as below: closed)

b. Is there regular reporting of the monitoring Own Crop Group Out grower outcomes? How often and to whom is reporting done? Total field emissions (tCO₂e) 135,067.21 0 0

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) c. Is the monitoring and reporting conducted Total mill emissions (tCO₂e) 55,602.74 0 0 using appropriate tools? What tool is being used to assess, monitor and report on GHG emissions? Minor Non Conformation 2016-16:  Calculation GHG RSPO assessment period year 2015 has not been Please refer to specific guidance for GHG calculated yet. requirements.

PRINCIPLES 6: RESPONSIBLE CONSIDERATION OF EMPLOYEES AND INDIVIDUALS AND COMMUNITIES AFFECTED BY GROWERS AND MILLS CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) Aspects of plantation and mill management that have social impacts, including replanting, are identified in a participatory way, and plans to mitigate the negative impacts and promote the 6.1 positive ones are made, implemented and monitored, to demonstrate continual improvement. (M) A social impact assessment (SIA) including records of meetings shall be documented.

Guidance: Identification of social impacts should be carried out by the grower with the participation of affected parties, including women and migrant workers as appropriate to the situation. The involvement of independent experts should be sought where this is considered necessary to ensure that all impacts (both positive and negative) are identified. Participation in this context means that affected parties are able to express their views through their own representative institutions, or freely chosen spokespersons, during the identification of impacts, reviewing findings and plans for mitigation, and monitoring the success of implemented plans. Potential social impacts may result from activities such as: building new roads, processing mills or other infrastructure; replanting with different crops or expansion of planting area; disposal 6.1.1 of mill effluents; clearing of remaining natural vegetation; changes in employee numbers or employment terms; smallholder schemes. Plantation and mill management may have social impacts (positive or negative) on factors such as: • Access and use rights; • Economic livelihoods (e.g. paid employment) and working conditions; • Subsistence activities; • Cultural and religious values; • Health and education facilities; • Other community values, resulting from changes such as improved transport /communication or arrival of substantial migrant labour force. The review can be done (once every two years) internally or externally.

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO)

For National Interpretation: As social impacts are particularly dependent on local social conditions, National Interpretation will identify the important issues, and methodologies for collecting data and using the results. This should include adequate consideration of the impacts on the customary or traditional rights of local communities and indigenous people, where these exist (Criteria 2.3 and 6.4). a. Has an SIA been conducted? When a. SIA has been conducted on Based on the results of the Social Impact Assessment report, it appears that the YES was the last SIA conducted? 2011. assessment also includes stakeholders, community leaders figure, and related b. Is the process in conducting the SIA b. All process of SIA was government agencies etc. through a public consultation which visible on documented include the findings. participant attendance at SIA report. and the findings documented? c. Yes, SIA Covering for all impact Assessment was conducted through PRA (Participatory Rural Appraisal) and c. Does the SIA cover all of the potential factors involved the local community. And also some interview was conducted with impact factors, including: leaders’ community. Scope of assessment covered 10 villages and one  Access and use rights; subdistrict. Evidence of participatory action from local communities was also  Economic livelihoods (e.g. paid sighted in related SIA documentation including photos, questionnaires, etc. employment) and working SIA assessment involving the communities around the estate and all relevant conditions; stakeholders, this can be viewed from the evidence of attendance list of public  Subsistence activities; consultation and a list of names of the respondents, the informant at the time of  Cultural and religious values; interview and assessment SIA. Noted there are several sample respondents  Health and education facilities; from communities affected by the activities of PT Serikat Putra. Affected parties  Other community values, been able to express their views through their own representative institutions, or resulting from changes such as freely chosen spokespersons, during the identification of impacts, reviewing improved transport findings and plans for mitigation, and monitoring the success of implemented /communication or arrival of plans substantial migrant labour force.

6.1.2 (M) There shall be evidence that the assessment has been done with the participation of affected parties. a. Does the assessment involve a. Yes there has been Yes there has been assessment involve consultation with the affected parties YES consultation with the affected parties? assessment involve consultation such as head village, government, public. Record of participatory assessment Who are the affected parties? with the affected parties such as were available such as photograph and FGD Result period February 2011 head village, government, public b. Is there record of how the participatory assessment has been conducted? based on Social Impact Assessment conducted by the Were the affected parties able to express their views through their own organisation on February 2011. b. Record of representative institutions, or freely participatory assessment were

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) chosen spokespersons, during the available such as photograph identification of impacts, review of and FGD Result period February findings and planning for mitigation? 2011

(M) Plans for avoidance or mitigation of negative impacts and promotion of the positive ones, and monitoring of impacts identified, shall be developed in consultation with the affected 6.1.3 parties, documented and timetabled, including responsibilities for implementation. a. Is there any documented record to a. Document of Social Positive impacts were maintained with organisation and necessary action was YES outline the plan on mitigation, Impact Assessment PT Serikat planned by the organization. Overall of negative impacts were followed up with implementation and monitoring Putra, 2011 corrective action. Evidence of participatory action from local communities was according to the SIA report? b. Record of also sighted in related SIA documentation including photo and also management questionnaires and interview and monitoring social impact report which is verified by head village of around b. Have plans for avoidance or mitigation of negative impacts and promotion of with stakeholder estate and mill. Effectiveness analysis of negative impact management was c. Rencana kerja dan conducted by organization and described in the report of Social management the positive ones, and monitoring of Pemantauan (Community and monitoring plan (RKS-RPS). impacts been developed? Development Program) c. Have these plans been documented, with clear timetables? Is the timeline reasonable? d. Have the persons responsible for implementation of the plans been identified? The plans shall be reviewed as a minimum once every two years and updated as necessary, in those cases where the review has concluded that changes should be made to current 6.1.4 practices. There shall be evidence that the review includes the participation of affected parties. a. Is the plan reviewed every two years? a. Document of Social Impact Minor Non-conformance 2016-17: YES Assessment PT Serikat Putra, (Minor NCR b. Has the plan been updated as  Review of Social Management Plan (RKS) and Social Monitoring Plan 2011 2016-17 closed) necessary (i.e. in cases where the (RPS) has not been conducted yet since the social impact assessment has review has concluded that changes b. Record of questionnaires and been established in 2011. Plan of monitoring for social impact assessment interview with stakeholder should be made to current practices)? has been conducted. c. Review of Social management c. Have the changes to the plan been plan revision 2011. implemented? d. Is there evidence that the review has been done with the participation of the affected parties?

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CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) e. Has the process been recorded/documented?

6.1.5 Particular attention shall be paid to the impacts of smallholder schemes (where the plantation includes such a scheme). a. Are there schemed smallholders No Smallholder scheme in PT Serikat There was no Smallholder scheme in PT Serikat Putra N/A involved? Putra b. Have they been considered and involved in the whole process of the SIA? c. What are the main impacts affecting these smallholders?

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. (M) Consultation and communication procedures shall be documented.

Guidance: Decisions that the growers or mills are planning to make should be made clear, so that local communities and other interested parties understand the purpose of the communication and/or consultation. Communication and consultation mechanisms should be designed in collaboration with local communities and other affected or interested parties. These should consider the use of 6.2.1 appropriate existing local mechanisms and languages. Consideration should be given to the existence/formation of a multi-stakeholder forum. Communications should take into account differential access to information by women as compared to men, village leaders as compared to day labourers, new versus established community groups, and different ethnic groups. Consideration should be given to involving third parties, such as disinterested community groups, NGOs, or government (or a combination of these), to facilitate smallholder schemes and communities, and others as appropriate, in these communications.

For National Interpretation: National Interpretation will consider issues such as appropriate levels of consultation and the types of organisation or individuals that should be included.

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CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) a. Does the company maintain a list of a. List of local communities and Documented procedure for communication and consultation with public was YES local communities and other affected other interested parties for area 3 established in procedure SIM-PROS-04, dated 04-02-2014. Describes (Major NCR or interested parties? has been established for LRE, stakeholders consisting of: the community around the estate / factory, local 2016-18 closed) b. Is there SOP being developed by the LRF and BRE governments, related institutions labour unions, NGOs, can deliver b. Procedure for communication communications to the company in the form of requests for information, company for communication and consultation between the company and consultation SIM-PROS-04, expression of aspiration, demands / claims, complaints / grievances against the dated 1 July 2010 plantation and processing plant palm oil. The company facilitates the delivery of and the local communities and other c. FPIC Approaches been this communication through incidental meetings of stakeholders and provision of affected or interested parties? incorporated in the SOP for suggestion boxes placed in all division office, large office and office security. c. Is the FPIC approach incorporated in communication and consultation The procedure was made already accommodate all stakeholders and with the SOP for communication and with the local communities and understandable language (Indonesian). consultation with the local other affected or interested Result of communication and consultation was recorded in the ‘log book’, e.g. communities and other affected or parties road maintenance, donation, facilities support, invitation for memorial, etc. Most interested parties? d. SOP has been developed with of requests were an invitation to follow the event held by the stakeholders. d. Has the SOP been developed together local communities/interested Communication and consultation has considered differential access to with the local communities and other parties by meeting formally. information for male/ female, workers, villagers representative both old and new affected or interested parties using e. SOP not yet socialized to the villagers including ethnics. interested parties. appropriate existing local mechanisms and in languages understood by these f. Interviews with affected parties parties? for effectiveness of SOP has Major Non-conformance 2016-18: been conducted e. Has the SOP been socialized with the  Documented procedure for communication and consultation with public was established in procedure SIM-PROS-04, dated 04-02-2014 however local communities and other affected or interested parties taking into not yet socialized to related interested parties. account the differential access to information by women as compared to men, village leaders as compared to day labourers, new versus established community groups, and different ethnic groups? f. Have interviews with affected parties been carried out to verify that the SOPs are effective?

6.2.2 A management official responsible for these issues shall be nominated.

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CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) a. Who in the company is appointed to  Decree of staffing The company has appointed a liaison officer to deal specifically with issues YES be responsible for communication Document and License related to communication with the public, namely KTU. Staffs are appointed and consultation with the affected  Job description Document directly by the decree from the manager. parties? and License staff has been For Lubuk Raja Factory was appointed Mr. Heriyanto (KTU), for Lubuk Raja sighted. Estate was appointed Mr. Munif (Kasie). b. Has the position been made official with clear and proper job description? c. Have the affected parties been made aware and have access to the person in charge?

A list of stakeholders, records of all communication, including confirmation of receipt and that efforts are made to ensure understanding by affected parties, and records of actions taken in 6.2.3 response to input from stakeholders, shall be maintained.

a. Is the following maintained?  List stake holders Stakeholder list was made and mentioned interested party. Stakeholder list YES  List of stakeholders (local has been maintained covered District Head, Forestry and Plantation Department, Environmental communities and other affected  Records Agency, Labour, transmigration and social Department, National Land Agencies, or interested parties etc.); communication has been kept Camat, Village Head around estate and mill, FFB supplier, Police of district,  Records of all communication, properly include action taken , Worker union and gender committee. Stake holder list was made detail, address including confirmation of receipt and phone numbers were mentioned in the list. It was update on November or endorsement; 2014.  Evidence that efforts have been There was a record meeting with stake holder on 25 November 2016 discussing made to ensure understanding by complaint to the organisation and also needs of the stake holder. This meeting affected parties; was attended with local house of representatives, stake holders (Kepala Desa)  Record of actions taken in and government agents (Dinas) response to input from stakeholders. 6.3 There is a mutually agreed and documented system for dealing with complaints and grievances, which is implemented and accepted by all affected parties. (M) The system, open to all affected parties, shall resolve disputes in an effective, timely and appropriate manner, ensuring anonymity of complainants and whistleblowers, where requested.

Specific Guidance: 6.3.1 For 6.3.1: The system should aim to reduce the risks of reprisal.

Guidance: See also to Criterion 1.2.

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CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) Dispute resolution mechanisms should be established through open and consensual agreements with relevant affected parties. Complaints should be dealt with by mechanisms such as Joint Consultative Committees (JCC), with gender representation as necessary. Grievances may be internal (employees) or external. For scheme and independent smallholders, refer to ‘Guidance for Independent Smallholders under Group Certification’, June 2010, and ‘Guidance on Scheme Smallholders’, July 2009. Where a resolution is not found mutually, complaints can be brought to the attention of the RSPO Complaints System. Refer to helpful texts for guidance, such as the Human Rights Commission (HRC) endorsed ‘Guiding Principles on Business and Human Rights: Implementing the UN "Protect, Respect and Remedy" Framework’, 2011. a. Is there an system in place to deal with a. There was a system to maintain YES Documented procedure for communication and consultation with public was complaints and grievances for all complaint and grievances for all established in procedure SIM-PROS-04, dated 4 Feb 2013. Describe affected parties? affected parties stakeholders consisting of: the community around the estate / factory, local b. Responsible person for b. Who in the company is responsible to governments, related institutions labour unions, NGOs, can deliver complaints and grievances was receive complaints and grievances? communications to the company in the form of requests for information, Asisten/Kasie/Askep/KTU expression of aspiration, demands/claims, complaints / grievances against the c. Is the existence of the system been c. Communication of the system plantation and processing plant palm oil. The company facilitates the delivery of made known and communicated to all was informed to all personnel this communication through incidental meetings of stakeholders and provision of parties? through “Antrian Pagi” suggestion boxes placed in all division office, large office and office security. d. Is there evidence that the system is d. All person has been understand, understood by all parties? verified by interview The procedure was made already accommodate all stakeholders and with e. Training has been provided understandable language (Indonesian). e. Is training provided to the workers on f. Yes, the system has covered to the procedures/systems? ensure the procedures has Mechanisms of complaints and grievances of workers described in Company Regulation 2015 – 2017 which has been approved by Manpower Ministry of effective f. Is the system effective to ensure that Indonesia. Described in Chapter X Article 23 on the settlement of complaints. In complaints or grievances are g. Procedure has manage for reporting of a grievance for Paragraph 1 states that in case of a complaint or feeling less satisfied from the addressed or resolved in an effective, workers on the particular situation, the worker is obliged to deliver and talk to timely and appropriate manner? supervisor (Asisten) and higher position their superior directly politely and orderly. Complaints or grievances should be be g. Does the mechanism or procedure h. Log of complaint has been settled by deliberation. provide a way for workers to report a established, include the root Paragraph 2. If a worker complaint cannot be resolved along with immediate grievance against a supervisor to cause and action plan superior, the supervisor immediately submits the matter to their superior higher someone other than the supervisor? i. Non retaliation / non reprisal in phases to be completed. h. How is a complaint or grievance policy has been established Paragraph 3. If the local discussion has not reached a conclusion, it can be investigated, addressed and resolved? j. Identification of the person will be requested for the completion of the field of local employment agency office or Are complaints dealt with by protected. other relevant agencies in accordance with applicable employment. mechanisms such as JCC? k. Yes it was included in the RSPO complaint system i. Is there a non-retaliation or non- The mechanism is also set in the procedure of complaints and grievances of workers SIMP – PROS – 35 October 30th, 2014. The complainant lodged a

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CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) reprisal policy that protects complaint orally or in writing to the assistant that she is employed. Oral delivery complainants or whistle-blowers? of the response was also orally. When the complainant asked for follow-up then it should make complaints/grievances to each division office or estate office. j. Is the privacy of parties protected? Letter of complaint documented in a logbook the complaint/grievances of k. Where a resolution is not found workers. Letters will be reviewed and clarified by the mutually, is there a process for Assistant/askep/KTU/Section Head and followed up. Every complaint resolution complaints to be brought to the RSPO documented in the minutes, presence and photos Complaints System?

6.3.2 (M) Documentation of both the process by which a dispute was resolved and the outcome shall be available.

a. Is the complaints or grievance  Log book to record complaints / Based on interview with stakeholder, there was no complaint/dispute between YES resolution process documented? grievance has been established, organisation and workers/union b. Are outcomes or decisions reported no complaints received for period to the parties? 2015 until time of audit March 2016. c. Who has access to the  Access of document was given to documentation of the process and/or manager. outcomes?

Any negotiations concerning compensation for loss of legal, customary or user rights are dealt with through a documented system that enables indigenous peoples, local communities and 6.4 other stakeholders to express their views through their own representative institutions. (M) A procedure for identifying legal, customary or user rights, and a procedure for identifying people entitled to compensation, shall be in place.

6.4.1 Guidance: This criterion should be considered in conjunction with Criteria 2.2 and 2.3, and the associated Guidance. a. Are procedures for identifying legal,  Procedure of Land Organizations have established procedures of Land dispute resolution YES customary or user rights in place? dispute resolution mechanisms mechanisms CR-AGR-102-GRL.06-11-1. Describes the mechanism of compensation before land clearing and land conflict resolution mechanisms b. Are procedures for identifying people CR-AGR-102-GRL.06-11-1  Procedure for between companies and land owners. The land cleared for oil palm plantations entitled to compensation in place? identifying people entitle to should ensure there is no problem and there is no dispute over land ownership. c. Are those procedures jointly compensation has been developed, agreed and accepted by established local communities?  Procedures were

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) agrees & accepted by local communities A procedure for calculating and distributing fair compensation (monetary or otherwise) shall be established and implemented, monitored and evaluated in a participatory way, and corrective actions taken as a result of this evaluation. This procedure shall take into account: gender differences in the power to claim rights, ownership and access to land; differences of 6.4.2 transmigrants and long-established communities; and differences in ethnic groups’ proof of legal versus communal ownership of land. Specific Guidance: For 6.4.2: Companies should make best efforts to ensure that equal opportunities have been provided to both female and male heads of households to hold land titles in smallholder schemes. a. Has a procedure for calculating and  Procedure of Land dispute Procedure for calculating and distributing fair compensation (monetary or YES distributing fair compensation resolution mechanisms CR-AGR- otherwise) has been established and implemented by estate. Procedure (monetary or otherwise) been 102-GRL.06-11-1 monitored and evaluated in a participatory way, and corrective actions taken as established and implemented? a result of this evaluation. It’s evident through public consultation with b. Are the procedures jointly developed, stakeholder. Equal opportunities have been provided to both female and male heads of households to hold land titles agreed, accepted and clearly It was noted that there was no ongoing progress of new land acquisition during understood by affected parties? interview with sampled villager’s representative, all previous land acquisition was c. Is the procedure monitored and solved before Land Use Title-Hak Guna Usaha (HGU). evaluated in a participatory way? Have corrective actions been taken as a result of this evaluation? d. Does this procedure take into account the following:  Gender differences in the power to claim rights;  Ownership and access to land;  Differences of transmigrants and long-established communities;  Differences in ethnic groups’ proof of legal versus communal ownership of land. e. Where there are schemed smallholders, is there effort to ensure equal opportunity has been provided to.

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CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) (M) The process and outcome of any negotiated agreements and compensation claims shall be documented, with evidence of the participation of affected parties, and made publicly 6.4.3 available.

a. Is the process and outcome of  Procedure of Land dispute It was noted that there was no ongoing progress of new land acquisition during YES negotiated agreements and resolution mechanisms CR-AGR- interview with sampled villager’s representative, all previous land acquisition was compensation claims documented? 102-GRL.06-11-1 solved before Land Use Title-Hak Guna Usaha (HGU). b. Does this documentation include evidence of the participation of affected parties? Is there any approval/signed by effected parties? c. Was consent obtained from all parties to make the documents publicly available?

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

(M) Documentation of pay and conditions shall be available.

6.5.1 For National Interpretation: National Interpretation will define a Decent Living Wage. Where there is no National Interpretation, the legal minimum wage will be used. a. What types of employment a. Type of employment only SKU- Wages/remuneration and calculations performed using Payroll Application and YES arrangements are there in the H/B (Permanent) recorded in the computer system each month. company? (E.g. contractual, b. Documentation of pay and Payment of wages in 2015 based on the Riau Governor's Decree No. 24, outsourced, apprenticeships, direct condition were available in CBA. Minimum wage on palm oil sector was IDR 1,950,000. Salary slip in November hires, piecemeal basis, etc.) c. Living wages was established for and December 2015. For period 2016, based Riau Governor Decree each region (Riau Province) and No.15/KPT/2016, Minimum wages was Rp 2,178,480,- for Kabupaten Pelalawan b. Is there documentation of pay and reviewed yearly. Last updated on proved that the payment of wages has met predetermined minimum wage. The conditions for each employee? 2015 minimum wage consists of basic wage plus a fixed allowance. c. Is there a definition for living wage in d. Employment remuneration the country? If not, how was the payment slip 2015 (Nove,ber and decision on wage for employees and December) contract workers made? e. Riau Governor's Decree No. 15/1 year 2015 f. Contract workers (SKU-H/SKU-

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CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) B) g. PP (Peraturan Perusahaan) period 2012 – 2014 h. PKB (Perjanjian kerja bersama) which endorsed by Dirjen Pembinaan Hubungan Industrial dan Jamsostek No. Kep. 88/PHIJSK-PKKAD/PKB/VI/2015, dated 18/6/2015 (M) Labour laws, union agreements or direct contracts of employment detailing payments and conditions of employment (e.g. working hours, deductions, overtime, sickness, holiday 6.5.2 entitlement, maternity leave, reasons for dismissal, period of notice, etc.) shall be available in the languages understood by the workers or explained carefully to them by a management official. a. Is the pay and conditions of a. PKB (Perjanjian kerja bersama) Agreement/contract of employment for workers has been included in the YES employment clearly detailed in the which endorsed by Dirjen employee contract. In the agreement regulates the : working hours, deductions, employment or service contracts? Pembinaan Hubungan Industrial overtime, sickness, holiday entitlement, maternity leave, reasons for dismissal, (E.g. working hours, deductions, dan Jamsostek No. Kep. period of notice, etc.). overtime, sickness, holiday 88/PHIJSK-PKKAD/PKB/VI/2015, Contract of employment available in languages understood by the workers (in entitlement, maternity leave, reasons dated 18/6/2015 Bahasa Indonesia) and explained carefully to the worker by HRD officer. Each for dismissal, period of notice, etc.) b. Contracts were understood by employment contract signed by the employee concerned and have understood both sides, signed by employee (PKWT), a copy of the employment contract provided to employees b. Is the contract prepared in languages and management. understood by the workers, explained carefully to workers by management c. Pay and conditions provided were comply with local legal officials, and signed by both the requirement (Riau Governor's authorised signatory of the company and employee? Decree No. 15/1 year 2015) d. Pay received by the employee c. Does the pay and conditions consistent with the terms of provided in labour laws, union contract and the law. agreements or direct contracts of e. No cases identified for breach by employment comply with: the company or complaint.  The decent living wage as provided in the National Interpretation for the country; ord.  The local legal requirements in meeting the minimum wage; or  The industry minimum standard

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CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) for a similar position or work responsibilities d. Is the pay received by the employee consistent with the terms of the contract and the law (relates to P2)? e. Have there been any cases recorded of breach by the company, or complaint made by employees against the company on unjust pay and conditions?

Growers and millers shall provide adequate housing, water supplies, medical, educational and welfare amenities to national standards or above, where no such public facilities are available 6.5.3 or accessible.

a. Have growers and millers provided  Interview and site observation There was housing and water supplies, medical, educational and welfare YES adequate housing and other basic amenities available for the workers in mill and estates. For Lubuk Raja Estate & necessities such as that listed below to provided 438 houses (for estate) and 92 houses for factory/mill complete with national standards or above, where no electricity and water Mill were supplier and 2 rooms + toilet. Source of water such public facilities are available or were taken from small dam in the complex of plant. Education was provided with accessible? level elementary. Junior high school and high school (free for employee and  adequate housing; resident around the estate/mill). Also provided transportation for student of the  adequate electricity; school .Local market were available around 1 km. And for medical facilities were  clean water supplies (availability of available such as central clinic and clear water all year round);  medical services (distance to health care facility i.e. clinic, hospital);  children education (distance to school and schooling attendance (%) of children under 12)  welfare amenities.

6.5.4 Growers and millers shall make demonstrable efforts to monitor and improve workers’ access to adequate, sufficient and affordable food.

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) a. Have growers and millers made - Yes, based on Interview with Monitoring of workers access to food was conducted monthly. Organisation YES demonstrable efforts to monitor and employee of Lubuk Raja Estate provided Rice for workers and the family. Markets in Sialang Godang Village with improve workers’ access to adequate, and Mill the range of 500 m, every payday traders will be closer to the location of the sufficient and affordable food? - Field visit in estate to trade the basic needs of. Access to the market is always taken care of emplacement/housing employee by graders regularly, so that during the rainy season can still be passable.

In Emplacement/employee housing there are also some stalls and small shops seller staple necessities. Employees are not difficult to obtain basic commodities every day. Employee housing access to the main road is less than 1 km with road conditions were pretty good, the market which provide food and basic goods needs easily found not far from the location of the company. The employer respects the rights 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 6.6 are restricted under law, the employer facilitates parallel means of independent and free association and bargaining for all such personnel. (M) A published statement in local languages recognising freedom of association shall be available.

Guidance: The right of employees, including migrant and transmigrant workers and contract workers, to form associations and bargain collectively with their employer should be respected, in accordance with Conventions 87 and 98 of the International Labour Organisation (ILO). 6.6.1 Labour laws and union agreements, or in their absence direct contracts of employment detailing payments and other conditions, should be available in the languages understood by the workers or explained carefully to them by a management official.

For National Interpretation: National Interpretation will define migrant and transmigrant workers. ILO definitions and other international protocols, instruments and explanations should be used throughout. a. Has the company published a a. Company published YES The company has a written policy “the freedom of association in PKB (Perjanjian statement in local languages in local language showed in : kerja bersama) which endorsed by Dirjen Pembinaan Hubungan Industrial dan recognising the rights of employees to  "Sustainable palm oil policy PT Jamsostek No. Kep. 88/PHIJSK-PKKAD/PKB/VI/2015. In article 2 “the freedom of association? Salim Ivomas Primary" recognition of the organization (union labour)” Employers and unions work b. Are the employees, including migrant  PKB (Perjanjian kerja bersama) together to establish order, peace and tranquillity strive and work within the and transmigrant workers and contract which endorsed by Dirjen framework of national development and human Indonesia to increase the workers, allowed to form associations Pembinaan Hubungan Industrial company's production economically. and bargain collectively with their dan Jamsostek No. Kep. employer? 88/PHIJSK-PKKAD/PKB/VI/2015, The company also issued Policy of freedom of association which published in dated 18/6/2015 "Sustainable palm oil policy PT Salim Ivomas Primary" in Article 2 states that the c. Was the outcome, if any, from the  Interview with employee company provides equal opportunity for all employees to organize, association collective bargaining process between b. All types of and the develop a career according to capabilities. the company and the association

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) respected, implemented and adopted employment was free to form in full or partially by the company? associations and bargain collectively. d. Are there Labour laws and union agreements, or in their absence direct c. Labour law available in UU No.13, Year 2003 were contracts of employment detailing payments and other conditions, made socialised by HRD/KTU to all employee or using CBA for new available in the languages understood employee. by the workers or explained carefully to them by a management official?

6.6.2 Minutes of meetings with main trade unions or workers representatives shall be documented.

a. Are there documented minutes of a. Yes, there was Minutes of meeting Minutes of meeting were available for meeting between (union) employee and YES meetings between the company and available between union & management on 16 February 2016 with item discussed for premium and main trade unions or workers management. bonuses for harvest. Meanwhile on Bukit Raja Estate, There was new union representatives? b. Minutes of meeting available upon established which was Serikat Pekerja Bukit Raja Estate. Established and request. endorsed by Disnaskertran Kabupaten Pelalawan on 2016. b. Are the minutes made readily available to employees upon request?

6.7 Children are not employed or exploited.

(M) There shall be documentary evidence that minimum age requirements are met.

Guidance: Growers and millers should clearly define the minimum working age, together with working hours. Only workers above the minimum school leaving age in the country or who are at least 15 6.7.1 years old may be employed. The minimum age of workers will not be less than stated under national regulations. Any hazardous work should not be done by those under 18, as per International Labour Organisation (ILO) Convention 138.

Please refer to ‘Guidance for Independent Smallholders under Group Certification’, June 2010, and ‘Guidance on Scheme Smallholders’, July 2009for additional guidance on family farms. a. Is the minimum working age for a. Minimum working YES Organisation has policy for minimum age for worker and mentioned in the workers together with working hours ages was 18 as per company company regulations that have been approved by the Indonesian Manpower clearly defined in the company’s regulations (PP) 2014-2016 and based on Decision Letter No.KEP.80/PHIJSK-PKKAD/PP/II/2013. Chapter III recruitment policy? UU NO. 13 year 2003. The acceptance and job placement and job requirements, in article 3 paragraph

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CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) b. Are workers employed above the b. Employer employed 1 states the requirements of the worker's age: at least 18 years old at the time of minimum school leaving age of the above minimum school age(18 admission. country or who are at least 15 years of years) According to observation in the estates and mill, there is no worker under 18 age? c. There were no years old. workers under 18. c. Is there evidence that the nature of work for workers under 18 is in d. Based on interview and document verification there accordance with International Labour was no workers below minimum Organisation (ILO) Convention 138? age. d. Does ground verification show evidence of employment of workers below the minimum working age?

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.

(M) A publicly available equal opportunities policy including identification of relevant/affected groups in the local environment shall be documented.

Guidance: Examples of compliance can be appropriate documentation (e.g. job advertisements, job descriptions, appraisals, etc.), and/or information obtained via interviews with relevant stakeholders 6.8.1 such as affected groups which may include women, local communities, foreign workers, and migrant workers, etc.

Notwithstanding national legislation and regulation, medical conditions should not be used in a discriminatory way.

The grievance procedures detailed in Criterion 6.3 apply. Positive discrimination to provide employment and benefits to specific communities is acceptable as part of negotiated agreements. a. Is there a company policy on non- a. Sustainable palm oil Policies on equal opportunities and treatment to get the job described in the YES discrimination and equal opportunities? policy PT Salim Ivomas Primary" “Sustainable palm oil policy PT Salim Ivomas Primary" in Article 2 states that the Does it at least cover the items in Article 2. company provides equal opportunity for all employees to organize, mentioned in the criteria (6.8)? b. Policy made association and develop a career according to capabilities available in the strategic area in b. Is the policy made publicly available for the estate and plantation. the relevant stakeholders? c. Policy has been c. Is there evidence that the policy has implemented based on been implemented? verification by interview to employee

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CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO)

6.8.2 (M) Evidence shall be provided that employees and groups including local communities, women, and migrant workers have not been discriminated against.

a. Is there evidence that employees and a. Based on Interview Worker list of Mill and Estate mentioned that all workers came from different YES groups including local communities, with employee there was no back grounds (race, religion, gender). Worker proportion based on many ethnic. women, and migrant workers have not (Total employee Lubuk Raja Ethnic diversity of worker and also during interview with workers, no been discriminated against? Factory 164) discrimination was identified based on religion, ethnic, gender. During interview b. Are the employees and groups b. Employees were with workers (local worker and migrant worker), no discrimination was identified happy with the treatment of the based on religion, ethnic, gender including local communities, women, company. and migrant workers happy with the way the company is treating them? c. There was no complaint against the company c. Are there complaints against the relating to discrimination or other company on issues relating to reasons. discrimination? d. What is the nature of complaints employees and groups including local communities, women, and migrant workers have lodged against the company, if any?

6.8.3 It shall be demonstrated that recruitment selection, hiring and promotion are based on skills, capabilities, qualities, and medical fitness necessary for the jobs available.

a. Does the company keep and maintain a. Record of employee In the recruitment process, the company has set the standard of competence YES a record of their employees’ work was maintained include medical that inferred in the Position Description and Job Profile. Recruitment selection, credentials and medical history? history and credentials. hiring and promotion are based on skills, capabilities, qualities, and medical b. Does the company explicitly state the b. In discriminatory fitness. policy during recruitment was Job opportunities were communicated and given to surrounding villagers at first indiscriminatory policy during the recruitment selection, hiring and stated clearly. priority where no discrimination found observed during interview and related c. Review of the policy records of workers being employed. All workers are treated equally in promotion process? was conducted yearly accordance with company regulation including rights of worker as well. The c. Is the company’s indiscriminatory d. Recruitment was compliance in accordance with national laws has been evaluated by the policy reviewed regularly? conducted based on skill, organisation as described in criterion 2.1

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CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) d. Are the company’s employees capabilities as seen on process recruited and promoted based on skills, period 2014 for position mill capabilities, qualities, and medical compound, inventory and helper fitness necessary for the job? How is in the factory. this evidenced? 6.9 There is no harassment or abuse in the work place, and reproductive rights are protected. (M) A policy to prevent sexual and all other forms of harassment and violence shall be implemented and communicated to all levels of the workforce.

Specific Guidance: For 6.9.1 and 6.9.2: These policies should include education for women and awareness of the workforce. There should be programmes provided for particular issues faced by women, such as violence and sexual harassment in the workplace. A gender committee specifically to address areas of concern to women will be used to comply with this Criterion. This committee, which should include representatives from all areas of work, will consider matters such as: training on women’s rights; counselling for women affected by violence; child care facilities to be provided by the growers and millers; women to be allowed to breastfeed up to nine months before resuming chemical spraying or usage tasks; and women to be given specific break times 6.9.1 to enable effective breastfeeding. For 6.9.2: see Indicator 4.6.12.

Guidance: There should be a clear policy developed in consultation with employees, contract workers and other relevant stakeholders, and the policy should be publicly available. Progress in implementing the policy should be regularly monitored, and the results of monitoring activities should be recorded.

Notwithstanding national legislation and regulation, reproductive rights are respected. a. Does the company have the policy to a. Policy on the YES Policy on the prevention of sexual harassment written in SE No. prohibit any form of sexual and all prevention of sexual harassment (Major NCR /AMA/S/XII/2014 date December 5 year 2014 regarding the sexual harassment other forms of harassment and written in SE No. 2016-19 closed) prevention. violence? /AMA/S/XII/2014 date December 5 year 2014 regarding the sexual b. Has this policy been documented, Organization also establishes the sexual harassment handling procedures CR- harassment prevention implemented and communicated OPR-105-KPS.II.II.1. Describes the sexual harassment policy, workflow of clearly to all levels of the workforce? b. Policy was sexual harassment handling, kind of sexual harassment, example of sexual documented and implemented harassment acts. c. Is there a clear protocol for the through socialisation in all company to deal/handle such division by banner and poster Based on workers interview, it was informed that there was no sexual issues/complaints received from the placed. harassment and violence within the organization

workforce? c. Protocol to handle Major Non-conformance 2016-19: d. Is there a list of awareness programs the issues/complaint was established in SOP Prosedur  Policy on the prevention of sexual harassment written in Sustainability of or training provided to the workforce in Palm Oil date 1 May 2015 regarding the sexual harassment prevention

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CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) relation to these issues? Pencegahan dan Penanganan however not yet disseminated to all employees. Kasus Pelecehan Seksual No: e. Has the company formed a Gender CR-OPR-105-KPS.11.11-1 Committee to address areas of concern to women? Is there a list of d. Not yet established for training/awareness program. the members sitting in the committee? What are the Terms of Reference of e. Gender Committee has been established, list has the committee? Does it include the been established since 16 handling of issues such as: January 2016 and include  training on women’s rights; several issues such as women  counselling for women affected rights training, counselling, child by violence; care facilities, breastfeed for  child care facilities to be provided women by the growers and millers; f. Policy was regularly  women to be allowed to y reviewed (once a year) breastfeed up to nine months before resuming chemical spraying or usage tasks; and  women to be given specific break times to enable effective breastfeeding. f. Is the policy regularly reviewed?

6.9.2 (M) A policy to protect the reproductive rights of all, especially of women, shall be implemented and communicated to all levels of the workforce.

a. Is there a policy to protect the a. There was a policy YES Policy on the protection of reproductive rights of all, especially of women written reproductive rights of all, especially of to protect reproductive rights for (Major NCR in SE No.003 /AMA/S/XII/2014 date December 5 year 2014. women? women. 2016-20 closed) b. Yes policy b. Has this policy been documented, Organisation has developed policy and the implementation of reproductive rights documented however not yet implemented and communicated for women in the estates (Lubuk Raja Estates and Mill and Bukit Raja Estate) on communicated to all level clearly to all levels of the workforce? 11-01-2016 such as monitoring of women condition during morning presence c. All personnel prior go for spraying/manuring. Sighted for verification at Division 1 and 2 c. How is this policy communicated to all understand: presences monitoring in the Estates on February 2016. levels of the workforce?  SE No. /AMA/S/XII/2014 date

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CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) December 5 year 2014 Major Non-conformance 2016-20: (protection of reproductive rights)  Policy on the protection of reproductive rights of all, especially of  Interview with workers women written in SE No.003 /AMA/S/XII/2014 date December 5 year 2014  Procedure complaint mechanism however it was not disseminated to all related employees. for sexual harassment CR-OPR- 105-KPS.II.II.1.

6.9.3 A specific grievance mechanism which respects anonymity and protects complainants where requested shall be established, implemented, and communicated to all levels of the workforce.

a. Does the company have a mechanism a. Mechanism to The company have a mechanism to handle employment grievances in SIM- YES to handle employment grievances, that handle employment grievances PROS-04, dated 4 Feb 2013 Point 7.4.2, The procedure already provided respects anonymity and protects has been established in SIM- mechanism to report grievance point 7.4.2, that applied for all position complainants where requested? PROS-04, dated 4 Feb 2013 (staff/supervisor/manager).

b. Does the mechanism provide a way for workers to report a grievance against a supervisor to someone other than that supervisor? c. Is the mechanism documented, implemented and communicated clearly to all levels of the workforce? d. Has the company identified personnel who will be responsible to receive and manage complaints received from the workforce? e. Has the company received any reports or complaints of harassment or abuse? How was it addressed or resolved? f. Is the policy reviewed regularly?

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

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CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) Current and past prices paid for Fresh Fruit Bunches (FFB) shall be publicly available.

Guidance: Transactions with smallholders should consider issues such as the role of middle men, transport and storage of FFB, quality and grading. The need to recycle the nutrients in FFB (see Criterion 4.2) should also be considered; where it is not practicable to recycle wastes to smallholders, compensation for the value of the nutrients exported can be made through the FFB 6.10.1 price.

Smallholders should have access to the grievance procedure under Criterion 6.3 if they consider that they are not receiving a fair price for FFB, whether or not middle men are involved. The need for a fair and transparent pricing mechanism is particularly important for outgrowers who are contractually obliged to sell all FFB to a particular mill. If mills require smallholders to change practices to meet the RSPO Principles and Criteria, consideration should be given to the costs of such changes, and the possibility of advance payments for FFB can be considered. a. How is the price of FFB determined? NA PT Serikat Putra, Lubuk Raja Mill does not receive FFB from other than Lubuk NA Raja Estate and Bukti Raja Estate. b. Is current and past prices paid for Fresh Fruit Bunches (FFB) publicly available? How? c. Was there any complaints on FFB pricing? d. How was the complaint handled? e. What was the solution?

(M) Evidence shall be available that growers/millers have explained FFB pricing, and pricing mechanisms for FFB and inputs/services shall be documented (where these are under the 6.10.2 control of the mill or plantation). a. What is the mode of NA PT Serikat Putra, Lubuk Raja Mill does not receive FFB from other than Lubuk NA recording/documenting transactions Raja Estate and Bukti Raja Estate. between millers with middlemen and/or smallholders? b. Is there evidence that growers/millers have explained FFB pricing and pricing mechanisms for FFB? c. Are there any inputs/services rendered by the millers to smallholders/middle

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CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) men? Are these inputs/services having any influence to the pricing and pricing mechanisms for FFB? d. Have inputs/services been documented (where these are under the control of the mill or plantation)? e. Where it is not practicable to smallholders to recycle waste (i.e. EFB), is there compensation for the value of the nutrients of EFB given to the smallholders? Is this translated into the pricing factors of FFB?

6.10.3 Evidence shall be available that all parties understand the contractual agreements they enter into, and that contracts are fair, legal and transparent.

a. Is there a contractual agreement NA PT Serikat Putra, Lubuk Raja Mill does not receive FFB from other than Lubuk NA between the miller and smallholders/ Raja Estate and Bukti Raja Estate. middle men? b. Do all parties understand the contractual agreements they have entered into?

c. Are all contractual agreements fair, legal and transparent? d. Who keeps the contractual agreements?

6.10.4 Agreed payments shall be made in a timely manner.

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CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) a. How are all payments made to the NA PT Serikat Putra, Lubuk Raja Mill does not receive FFB from other than Lubuk NA smallholders/middle men? Raja Estate and Bukti Raja Estate. b. What is the mode of recording/documenting transactions between millers with middlemen and/or smallholders? c. Have agreed payments been made in a timely manner?

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

Contributions to local development that are based on the results of consultation with local communities shall be demonstrated.

Guidance: Contributions to local development should be based on the results of consultation with local communities. See also Criterion 6.2. Such consultation should be based on the principles of transparency, openness and participation, and should encourage communities to identify their own priorities and needs, including the different needs of men and women. Where candidates for employment are of equal merit, preference should always be given to members of local communities. Positive discrimination should not be recognised as conflicting 6.11.1 with Criterion 6.8. Efforts should be made to identify independent smallholders in the supply base. Where sourcing of fruit is from identified independent smallholders, efforts should be made to contribute to the improvement of their farming practices.

For National Interpretation: National Interpretation will consider specific parameters or thresholds such as use of local and national goods and services where possible, whether a certain percentage of the plantation’s profit/turnover should be used for social development projects, and minimum quotas for local employment.

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CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) a. Have the local development needs and YES Records of organization contribution to regional development were evident, priorities been identified in consultation  CSR Program PT Serikat Putra among either: agreement contract, and social assistance list. with local communities? (refer also to C year 2014 6.2)  Realization of CSR Program from CSR program was provided by the organization and deployed in to CSR b. What are the contributions made to January – December 2014 program. Activity of CSR was identified by the estate/mills (Rekapitulasi Laporan local development? Are they in Kegiatan CSR), including: repairs the village road, mosques renovation in surrounding villages, checks and medical for free, etc. Implemented document accordance with the results of consultation? was recorded within photo and minutes of aid delivery. Sighted for evidence of community development for Sialang Bungkuk village for rural road services c. Are there efforts to improve or maintenance in 2016 and also for local community celebration such as Mandi maximise employment opportunities at Balimau and Patin Bunut. the company for local communities? Another local business was supported for growers and mills, main supports were pertinent to procurement spare parts and vehicle maintenance. The local business is assigned and controlled by central purchasing in Head Office.

6.11.2 Where there are scheme smallholders, there shall be evidence that efforts and/or resources have been allocated to improve smallholder productivity.

a. Is there a complete registry of NA There are no scheme smallhoders N/A independent smallholders in the supply base? b. Have efforts been made to improve the farming practices of independent smallholders? c. Where there are schemed smallholders, have efforts and/or resources been allocated to improve smallholder productivity?

No forms of forced or trafficked labour are used. 6.121 *1 New Criteria - No forms of forced or trafficked labour are used.

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CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) (M) There shall be evidence that no forms of forced or trafficked labour are used.

Specific Guidance: For 6.12.1: Workers should enter into employment voluntarily and freely, without the threat of a penalty, and should have the freedom to terminate employment without penalty given reasonable notice or as per agreement.

Guidance Migrant workers should be legalised, and a separate employment agreement should be drawn up to meet immigration requirements for foreign workers and international standards. Any 6.12.1 deductions made should not jeopardise a decent living wage. Passports should only be voluntarily surrendered. There should be evidence of due diligence in applying this to all sub-contract workers and suppliers. National guidance should be used on contract substitution.

For National Interpretation: National Interpretation will define the following: temporary workers; migrant workers; special labour policy; contract substitution; and decent living wage. International Labour Organisation (ILO) definitions (ILO Convention 29 and 105) and other international protocols, instruments and explanations should be used throughout. See Criterion 6.5 for further guidance. a. What is the company’s policy on forced YES There was no forced labour in Lubuk Raja Estate and Mill. All the or trafficked labour?  Interview with employee in Lubuk Raja Estate, labour/employment has the right conform to their contract. The contract contains b. How does the company define forced Lubuk Raja Mill/Factory and no forcing to the labour. The contract was agreed between labour and company. or trafficked labour? Bukit Raja The form of labour contract such as : Perjanjian Kerja Bersama (PKB), PKWT contract and PHL contract. c. What is the process of recruiting  Perjanjian Kerja Bersama (PKB), foreign/ migrant workers directly and/or PKWT contract. SKHU-Bulanan & Interview with the employment concluded that there was no compliant and any through licenced outsourcing agencies/ SKHU-Harian grievances regarding the contract and their right. labour suppliers? During the audit there was no migrant workers in Lubuk Raja Estate and Mill d. Who is the person responsible for a. The company policy stated there was no forced/trafficked labour, on 1 selecting/ screening labour suppliers/ May 2015 and also on PKB/Collective Bargain Agreement between Union outsourcing agents? (FP-SPSI) and Organisation (BKS-PPS) period 2015 – 2017 e. Do the foreign workers have to pay a b. Forced/trafficked labour defined for those workers with bonded and fee to the employment recruitment unclear contract of worked. agency or labour suppliers in the c. There was no migrant/foreign workers in the company identified workers’ countries of origin? If yes, through interview with workers, company representatives and government does it jeopardise decent living wage? agent (DinasTenaga Kerja Sosial Kabupaten Pelalawan) (point c until point l)

f. Are there restrictions on workers from leaving the mill or estate or their

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CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) housing facilities outside working hours? g. What is the process if a worker wants to terminate their employment before their contract expires? In this case, who pays for the return transportation? h. What are the penalties imposed if the workers were terminated or fired before their contract expires? i. Who keeps the workers passports or identity documents? j. If workers do not keep their passports or identity documents, is this legally allowed? k. What is the process for workers’ to hand over their passports or identity documents to the company? l. Do workers have unrestricted access to their passports or identity documents? Describe how workers are able to access their documents?

6.12.2 Where applicable, it shall be demonstrated that no contract substitution has occurred.

a. Is there evidence of contract There was no substitution contract occurred. Workers get the job and contract YES substitution occurring?  Interview with conforms to agreement between company and its workers. employee in Lubuk Raja Estate, b. Are foreign workers asked to sign a Lubuk Raja Mill/Factory and contract upon arriving in the receiving Bukit Raja country? If yes, is that contract identical to the one signed in the  Perjanjian Kerja country of origin? Bersama (PKB), PKWT contract. SKHU-Bulanan & SKHU-Harian c. Are workers given a copy of their

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CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) employment contracts? If yes, is the contract identical to the one signed at the time of recruitment? (M) Where temporary or migrant workers are employed, a special labour policy and procedures shall be established and implemented.

Specific Guidance: For 6.12.3: The special labour policy should include: 6.12.3 • Statement of the non-discriminatory practices; • No contract substitution; • Post-arrival orientation programme to focus especially on language, safety, labour laws, cultural practices etc.; • Decent living conditions to be provided. a. What is the company’s policy and There was no migrant/foreign workers in the company identified through YES procedures for temporary or  Interview with interview with workers, company representatives and government agent foreign/migrant workers? Does the employee in Lubuk Raja Estate, (DinasTenaga Kerja Sosial Kabupaten Pelalawan) special labour policy include: Lubuk Raja Mill/Factory and Bukit Raja  Statement of the non-discriminatory practices?  Perjanjian Kerja  No contract substitution? Bersama (PKB), PKWT contract.  Post-arrival orientation programme SKHU-Bulanan & SKHU-Harian with emphasis on language, safety, labour laws, cultural practices etc.?  Interview with government representatives  The provision of decent living (DinasTenaga Kerja Sosial conditions? Kabupaten Pelalawan) b. Have the policies and procedures been implemented?

Growers and millers respect human rights. 6.132 *2 New Criteria - Growers and millers respect human rights. (M) A policy to respect human rights shall be documented and communicated to all levels of the workforce and operations (see Criteria 1.2 and 2.1).

6.13.1 Guidance: See also Criterion 6.3.

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CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) All levels of operations will include contracted third parties (e.g those involved in security).

Note: From the UN Guiding Principles on Business and Human Rights: “The responsibility of business enterprises to respect human rights refers to internationally recognised human rights – understood, at a minimum, as those expressed in the International Bill of Human Rights and the principles concerning fundamental rights set out in the International Labour Organization’s Declaration on Fundamental Principles and Rights at Work” (“The corporate responsibility to respect human rights” in Guiding Principles on Business and Human Rights). The RSPO WG on Human Rights will provide a mechanism to identify, prevent, mitigate and address human rights issues and impacts. The resulting Guidance will identify the relevant issues on human rights to all RSPO Members. a. Is there a company policy on human Company policy on human right were established on 1 May 2015 signed by CEO YES rights?  Interview with Communication and dissemination were conducted by providing refreshment employee in Lubuk Raja Estate, b. How is this communicated to all training of policy for employee (sighted for period June 2015) Lubuk Raja Mill/Factory and Person in charge to communicating policy was KTU (Kepala Tata Usaha and employees, including outsourced Bukit Raja SPO Officer) include all Managers. workers, customers and suppliers? If by training, how often is the training  Perjanjian Kerja There was no outstanding cases of human rights violations. conducted? Bersama (PKB), PKWT contract. SKHU-Bulanan & SKHU-Harian c. Who has the task of communicating the policy internally and externally?  Interview with government representatives d. Does the company have any (DinasTenaga Kerja Sosial outstanding cases of human rights Kabupaten Pelalawan) violations?

PRINCIPLES 7: RESPONSIBLE DEVELOPMENT OF NEW PLANTINGS There was no new planting since November 2005. All areas have been covered in existing HGU and AMDAL.

PRINCIPLES 8: COMMITMENT TO CONTINUOUS IMPROVEMENT IN KEY AREAS OF ACTIVITY

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO)

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CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) 8.1 Growers and millers regularly monitor and review their activities, and develop and implement action plans that allow demonstrable continual improvement in key operations. (M) The action plan for continual improvement shall be implemented, based on a consideration of the main social and environmental impacts and opportunities of the grower/mill, and shall include a range of Indicators covered by these Principles and Criteria. As a minimum, these shall include, but are not necessarily be limited to: • Reduction in use of pesticides(Criterion 4.6); • Environmental impacts (Criteria 4.3, 5.1 and 5.2); • Waste reduction (Criterion 5.3); • Pollution and greenhouse gas (GHG) emissions (Criteria 5.6 and 7.8); • Social impacts (Criterion 6.1); 8.1.1 • Optimising the yield of the supply base.

Guidance: Growers should have a system to improve practices in line with new information and techniques, and a mechanism for disseminating this information throughout the workforce. For smallholders, there should be systematic guidance and training for continual improvement.

For National Interpretation: National Interpretation will include specific minimum performance thresholds for key indicators (Criteria 4.2, 4.3, 4.4, and 4.5). Continual improvement plans have been raised as corrective actions plan from YES a. Is there an action plan for continual  Internal audit forms and improvement? corrective action internal audit of ISPO and RSPO and Management Review Plan.  OHS Objectives and The most recent RSPO Internal Audit was performed on 8 January 2015, b. Describe the main components of the plan. programme (Form/Pros-01/03) integrated with ISPO internal audit, for mill and all estate. All findings have been c. Has the action plan been implemented? issued on 18th January 2016 closed.  Field observation at mill and d. Provide examples of continual estate Several continuous improvement programme especially for environment issue has improvements that have been been developed, such as: implemented.  Reduction in use of pesticides

e. Are history records available to develop the o Reduction of paraquat use action plan?  Environmental impacts: o Application of empty bunch f. Are records of implementation of the action plan available?  Waste reduction: o Water utilization effectiveness by re-use the sterilizer condensate in to g. Does the action plan include strategies for: the pressurize water addition • Reduction in use of pesticides o Reuse the water ex pesticide jerry can to next spraying. (Criterion 4.6)? Is IPM widely  Pollution and GHG emission implemented? o Use of fibre and shells for boiler fuel

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CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) • Environmental impacts (Criteria 4.3, • Social: 5.1 and 5.2)? o Monitoring and managing the positive and negative impact from social • Waste reduction (Criterion 5.3)? impact assessment (SIA) • Pollution and greenhouse gas (GHG) o Improve and implementation the CSR program regularly emissions (Criteria 5.6 and 7.8)? • Optimising the yield of the supply base: • Social impacts (Criterion 6.1)? o EFB and solid application • Optimising the yield of the supply

base? h. Do growers have a system to improve The records also sighted regarding OHS Objectives and programmes issued by practices in line with new information and mill/estate Manager dated 18th January 2016, the programmes included: Medical techniques, and a mechanism for check-up (MCU), PPE (Personnel Protective Equipment) provisions, provision of disseminating this information throughout curative and first aid requirement, also monitoring of hazardous chemicals and the workforce? wastes. Within the OHS objective and programmes was included the time frame; person in charge and cost estimation. The monitoring of each objectives and programmes were conducted periodically by the person in charge.

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3.3.2 Mill Supply Chain Requirements

The FFB sources are two (2) estates owned by PT Serikat Putra and and no FFB from the third party. Due the CSPO is sent to bulking station and mixed with CSPO and non CSPO from other Mill, therefore the Model selected is Mass Balance and RSPO Supply Chain Module E was used as audit criteria. The bulking station PT Sarana Tempa Perkasa is covered by the scope of audit. The organization has contractual agreement with Bulking station PT Sarana Tempa Perkasa that they are willing to be audited.

The detail of FFB processed in Lubuk Raja Mill is described in Table 7, Table 8 and Table 9 presented in this report.

3.3.2.1 Supply Chain Certification Standard

PART A COMPANY DETAIL

Company Name (covered by certification): PT. SERIKAT PUTRA Lubuk Raja Mill

RSPO member name: PT. Salim Ivomas Pratama (SIMP) RSPO member number: 1-0041-07-000-00

RSPO IT Platform Registration number: RSPO_PO1000002653

Site Address: Desa Sialang Godang, Kec.Bandar Petalangan, Kab.Pelalawan Riau

Management Representative: Mr. Suyitno

Site type: Palm Oil Mill

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Site capacity:  Designed Capacity is 45 MTPH of FFB According to 037/ANDAL/RKL-RPL/BH/II/1996 dated February 16, 1996  Installed Capacity is 60 MTPH of FFB According to 037/ANDAL/RKL-RPL/BH/II/1996 dated February 16, 1996 Notes :  It was noted that the aforementioned capacity will be upgrade become 75 MTPH of FFB in the mid of 2016 according to the official letter / minutes of assessor team and Technical AMDAL team meeting dated Dec 2015.

Certified palm product sold: None

Certified palm product used: None

App/Cert No: FMS40061 Audit Type: Stage – 2 of certification

SAI Global Auditor/Team: Setyo Sutadiono Audit Date: March 3, 2016 Activity/Audit No: WI-711225

Audit objectives To verify the volume of certified and uncertified FFB entering the mill and volume sales of RSPO certified producers, and the implementation of any processing controls (for example, if identity preserved is used)

Supply Chain Model: Module E - CPO Mills Mass Balance

Pertinent record period: January – December 2015

Estimated tonnage of certified palm product produced: 65,909.59 MT CPO and 15,378.64 MT PK

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Estimated of tonnage of non certified palm product produced Not Applicable, all sources of FFB will be from the own main estates.

String description: Palm Oil Mill

Outsource activity(ies) (if any): Transporter and Bulking station

CV. Sumber Kencana as Transporter. Independent third party(ies) performing outsource activity(ies): PT. Sarana Tempa Perkasa as 3rd party Bulking Station is covered by the name, address and Capability. scope of audit.

PART B SUPPLY CHAIN CERTIFICATION STANDARD

Requirements STATUS Audit Findings / Objective Evidence ( NC / AOC / C )

CPO MILLS (MB) MASS BALANCE SUPPLY CHAIN MODELS – MODULAR REQUIREMENTS

E.1 Definition

E.1.1. Certification for CPO mills is necessary to verify the volumes of certified and uncertified FFB entering the mill and volume sales of RSPO certified producers. A mill may be taking delivery of FFB from uncertified growers, in addition to those from its own certified land base. In that scenario, the mill can claim only the volume of oil palm products produced from processing of the certified FFB as MB.

E.2 Explanation

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Requirements STATUS Audit Findings / Objective Evidence ( NC / AOC / C )

E.2.1. The estimated tonnage of CPO and PK products that could potentially be produced by the certified mill must be recorded by the CB in the public summary of the P&C certification report. This figure represents the total volume of certified palm oil product (CPO and PK) that the certified mill is allowed to deliver in a year. The actual tonnage produced should then be recorded in each subsequent annual surveillance report.

a. Has the estimated tonnage of CPO and PK The estimated tonnage of CPO and PK products (that could products (that could potentially be produced by the potentially be produced by the certified mill) has been recorded certified mill) been recorded by the certification Compliant by SAI Global as CB in the public summary of the P&C body (CB) in the public summary of the P&C certification report. certification report ?

According to the Ministry Decree of Agricultural No. 037/ANDAL/RKL-RPL/BH/II/1996 dated February 16, 1996 the site has produced CPO and PK as mentioned in the Annexure b. Does the figure represent the total volume of 2 and the site will produce as described in the Annexure 1. It Compliant certified palm oil product (CPO and PK) that the was noted that the figure has represented the total volume of certified mill is allowed to deliver in a year ? certified palm oil product (CPO and PK) that the certified mill is allowed to deliver in a year. c. Does the actual tonnage produced have to then be recorded in each subsequent annual surveillance As seen on the annexure 2, the actual tonnage produced will Compliant report ? always be recorded in each subsequent annual surveillance report.

E.2.2. The mill must also meet all registration and reporting requirements for the appropriate supply chain through the RSPO supply chain managing organization (RSPO IT platform or book and claim).

Audit Report

Requirements STATUS Audit Findings / Objective Evidence ( NC / AOC / C ) a. The mill must also meet all registration POM with membership number 1-0041-07-000-00 has requirements for the appropriate supply chain registered their site on e-trace (RSPO IT Platform) with through the RSPO supply chain managing registration No. RSPO_PO1000002653. organization (RSPO IT platform or book and claim)? Major Non-conformance 2016-22: Situation Personnel who has responsibility for shipping announcement on e-trace (i.e.: RSPO IT Platform) has not been determined C for CPO and PK. Moreover, communication and information (Major NCR needed between Mill and Head Office has not been 2016-22 closed) documented in the system prior to announce at the date of shipment.

Objective Evidence The site did not have documented procedure about that.

b. The mill must also meet all reporting requirements for the appropriate supply chain through the RSPO C supply chain managing organization (RSPO IT See Major Non-conformance 2016-22 above (Major NCR platform or book and claim)? 2016-22 closed)

E.3 Documented Procedure

E.3.1. The site shall have written procedures and/or work instructions to ensure the implementation of all the elements specified in these requirements. This shall include at minimum the following: a. Complete and up to date procedures covering the implementation of all the elements in these requirements; b. The name of the person having overall responsibility for and authority over the implementation of these requirements and compliance with all applicable requirements. This person shall be able to demonstrate awareness of the site procedures for the

Audit Report

Requirements STATUS Audit Findings / Objective Evidence ( NC / AOC / C ) implementation of this standard. a. Does the site have written procedures and/or work  There was no procedure in place that can be C instructions in place to ensure the implementation demonstrate, Furthermore, see Major non- of all elements specified in these requirements ? (Major NCR conformance 2016-23 below. 2016-23 closed) b. Are procedures / work instructions completely It was observed that the aforementioned procedures have been covering the implementation of all the elements in completely documented covering the implementation of all the these requirements? elements in RSPO SC requirements.

Major non-conformance 2016-23: Situation The implemented system has not been documented according C to RSPO SC 2014 requirements. (Major NCR 2016-23 closed) Objective Evidence Implemented system was mostly documented in the SOP No.CR-OPR-101-SPC.12.13.2 date of issuance December 15, 2013. The documented procedure refers to the obsolete standard of RSPO SC 2011.  c. Have the site had the role of the person having Mr. Suyitno has been assigned as the person who having overall responsibility for and authority over the overall responsibility for and authority over the implementation C implementation of these requirements and of RSPO SC requirements and compliance with all applicable (Major NCR compliance with all applicable requirements ? requirements according to the point 6.1 of documented 2016-24 and procedure No. SIMP-PROS-04 dated March 3, 2016. The 2016-25 closed) aforementioned procedure has explicitly described his responsibility and his authority for consistently implementing

Audit Report

Requirements STATUS Audit Findings / Objective Evidence ( NC / AOC / C ) RSPO SC requirements on standard 2014.

Major non-conformance 2016-24: Situation The site did not have contract agreement which describes that the outsourcing will always meet to the RSPO SC requirements.

Objective Evidence  There is no agreement with : o CV. Sumber Kencana as transporter.

o PT. STP as management bulking station.

Major non-conformance 2016-25: Situation: The site did not have information whether the outsourcing (PT.STP and CV.Sumber Kencana) have been certified against RSPO SC 2014 standard whilst SAI Global as CB was disabling to do onsite auditing at the location of outsourcing.

Objective Evidence There is no information whether the outsourcing has had certificate number and RSPO License. Further clarification was required. d. Is the person able to demonstrate awareness of the C site’s procedures for the implementation of this Mr.Suyitno as MR and supported by management of Palm Oil (Major NCR standard? Mill has not been able to demonstrate awareness of the site’s 2016-26 closed)

Audit Report

Requirements STATUS Audit Findings / Objective Evidence ( NC / AOC / C ) procedures for the implementation of this standard furthermore see below Major non-conformance 2016-26.

Major non-conformance 2016-26:

Situation: All personnel involved in implementing RSPO SC system have not been well trained.

Objective Evidence  RSPO SC training has not been programmed and realized.  Effectiveness of conducted training has not been evaluated.

E.3.2. The site shall have documented procedures for receiving and processing certified and non-certified FFBs.

C a. Has the site had documented procedures for receiving certified FFBs ? See Major non-conformance 2016-23 (Major NCR 2016-23 closed) b. Has the site had documented procedures for The site has documented procedures for receiving non-certified receiving non-certified FFBs? Compliant FFBs.

C c. Has the site had documented procedures for processing certified FFBs? See Major non-conformance 2016-23 (Major NCR 2016-23 closed) d. Has the site had documented procedures for The site has documented procedures for receiving non-certified processing non-certified FFBs? Compliant FFBs.

Audit Report

Requirements STATUS Audit Findings / Objective Evidence ( NC / AOC / C )

E.4 Purchasing and Goods In

E.4.1. The site shall verify and document the volumes of certified and non-certified FFBs received.

a. Does the site verify and document the volumes of The implemented system can demonstrate that the site certified FFBs received ? system was enabling to verify and document the tonnage Compliant of certified FFBs received. b. Does the site shall verify and document the The site did not have not commitment to received, processed volumes of non-certified FFBs received ? Not applicable and mixed between certified and non certified FFBs.

E.4.2. The site shall inform the CB immediately if there is a projected overproduction of certified tonnage.

a. Does the site inform the CB immediately if there is C a projected overproduction of certified tonnage ? See Major non-conformance 2016-23 (Major NCR 2016-23 closed)

E.5 Records Keeping

E.5.1. The site shall record and balance all receipts of RSPO certified FFB and deliveries of RSPO certified CPO and PK on a three-monthly basis. All volumes of palm oil and palm kernel oil that are delivered are deducted from the material accounting system according to conversion ratios stated by RSPO. The site can only deliver Mass Balance sales from a positive stock. Positive stock can include product ordered for delivery within three months. However, a site is allowed to sell short.(ie product can be sold before it is in stock.) For further details refer to Module C.

Audit Report

Requirements STATUS Audit Findings / Objective Evidence ( NC / AOC / C ) a. Does the site record and balance all receipts of The system has not been documented that RSPO SC RSPO certified FFB on a three-monthly basis ? requirements will be applied consistently. Furthermore see Major non-conformance 2016-23.

Major non-conformance 2016-27: C Situation (Major NCR The implemented system was documented in the SOP No.CR- 2016-23 and OPR-101-SPC.12.13.2 which mentions that all relevant records 2016-27 closed) have to be maintained for 5 years.

Objective Evidence : UU-RI No.8/1997 has mentioned 10 years which are relevant with financial recording such as delivery notes, invoice, etc. b. The site shall record and balance all deliveries of C RSPO certified CPO and PK on a three-monthly The system has not been documented that RSPO SC basis ? requirements will be applied consistently. Furthermore see (Major NCR Major non-conformance 2016-23 2016-23 closed) c. Are all volumes of palm oil and palm kernel oil that are delivered being deducted from the material The system has not been documented that RSPO SC C accounting system according to conversion ratios requirements will be applied consistently. Furthermore see (Major NCR stated by RSPO ? Major non-conformance 2016-23 2016-23 closed) d. Is the site only able to deliver Mass Balance sales C from a positive stock ? The system has not been documented that RSPO SC requirements will be applied consistently. Furthermore see (Major NCR

Major non-conformance 2016-23 2016-23 closed) Positive stock can include product ordered for

Audit Report

Requirements STATUS Audit Findings / Objective Evidence ( NC / AOC / C ) delivery within three months. However, a site is allowed to sell short.(ie product can be sold before it is in stock.)

E.5.2. In cases where a mill outsources activities to an independent (not owned by the same organization) palm kernel crush, the crush still falls under the responsibility of the mill and does not need to be separately certified. The mill has to ensure that the crush is covered through a signed and enforceable agreement. a. Does the mill outsource activities to an independent (not owned by the same organization) palm kernel crush, the crush still falls under the responsibility of the mill and does not need to be No outsourced activity NA separately certified ?

b. Does the mill have to ensure that the crush is covered through a signed and enforceable agreement ? No outsourced activity NA

3.3.2.2 Supply Chain Certification System

Audit Report

Supply Chain Certification System Status ( Yes / No )

5.3.1 Has the client been made aware with necessary information concerning the RSPO Supply Chain Certification and the RSPO Rules on Communication and Claims Has the client been made aware with necessary information concerning the

RSPO Supply Chain Certification and the RSPO Rules on Communication and Claims? YES If potential clients have any further questions concerning the RSPO these shall be directed to the RSPO secretariat.

5.3.2 Has the client been made aware of the contractual agreement for certification services against the RSPO Supply Chain YES Standard and maintain a record of any agreement? 5.3.3 Has the organization been informed about the following items? YES a. Certification process YES b. Agree logistics for the assessment and time of exit (closing) meeting. YES c. Confirm acess to all relevant documents, field sites and personnel YES d. Explain confidentiality and conflict of interest YES

5.3.4 Have the management documentation of the organization fully met to the requirements of the RSPO Supply Chain NO Certification Standard? 5.3.5 Have any issues or areas of concern been clarified to the organization? YES 5.3.6 Have the internal audits against RSPO supply chain standard been fully planned and underway before certification is NO awarded ? 5.3.7 Have the organization sufficiently and adequately implemented the organizational systems, the management systems and the operational systems, including any documented policies and procedures, to meet the intent and requirements of NO the RSPO Supply Chain Certification Standard? 5.3.8 Have the client made aware that when there is outsourcing process to the third party after certification is granted therefor YES SAI Global shall be informed and SAI Global decides whether an interim visit is required for the next audit ?

Audit Report

Supply Chain Certification System Status ( Yes / No )

5.3.9 Has certification audit reviewed pertinent RSPO Supply Chain records relating to the receipt, processing and supply of YES certified oil palm products? 5.3.10 Have all activities conducted by subcontractors complied with the intent and requirements of the RSPO Supply Chain NO Certification Standard 5.3.11 Have the client made aware that until they receive written confirmation of their RSPO Supply Chain certification YES registration and its expiry date that they are not certified and can not make any claims concerning registration? 5.3.12 Have a detail records have been compiled of the entry (opening) meeting including a list of the participants in the YES meeting? 5.3.13 Have the client made aware of the findings of the audit team including any deficiencies which may result in a negative YES certification decisions or which may require further actions to be completed before a certification decision can be taken? 5.3.14 Have the client made aware that the findings of the audit team are tentative pending review and decision making by the YES duly designated representatives of the certification body?

Major non-conformance 2016-28:

Details of non-conforming situation: Effectiveness of the implemented system against RSPO SC requirement 2014 has not been evaluated yet.

Objective Evidence: There was no internal audit record against RSPO SC standard 2014.

Audit Report

3.4 Recommendation

The recommendation from this audit is approval as a producer of RSPO Certified Sustainable Palm Oil and Palm Kernel, Model: Mass Balance.

Audit recommendations are always subject to ratification by RSPO.

This report was prepared by: Ria Gloria, Setyo Sutadiono, Jarot Widyatmaka, Dirgantara Bayu and Fitria Rahmayanti

3.5 Environmental and social risk for this scope of certification for planning of the surveillance audit

 Environmental risk: compliance with regulations, hazardous waste management, RKL RPL reporting  Social risk: compliance with regulations  OHS: prevention of hazard and risk  Bulking station PT Sarana Tempa Perkasa

3.6 Acknowledgement of Internal Responsibility and Formal Sign-off of Assessment Findings

Please sign below to acknowledge receipt of the assessment visit described in this report and confirm the acceptance of the assessment report contents including assessment findings.

Signed for and on behalf of PT Serikat Putra

Date 27 July 2017

Signed for and on behalf of PT. SAI Global Indonesia

Inge Triwulandari Technical Manager Date 28 July 2017

Appendix “A” – Audit Record

Audit meetings plus functions/ processes/ Times* Date Auditor # Shifts* areas/ *shifts audited: From - To

29.02.2016 Day – 1

Ria, Jarot, Tara, Fitri, Travelling Jakarta – Pekanbaru GA first flight Yosi

Ria Interview with BPN Kab. Pelalawan 11.00 Interview with Dinas Sosial dan Tenaga Kerja Jarot, Tara 11.00 Kab. Pelalawang Interview with Badan Lingkungan Hidup Kab. Fitri, Yosi 11.00 Pelalawan Ria, Jarot, Tara, Fitri, Travelling to site 12.00 Yosi

Ria, Jarot, Tara, Fitri, Break 13.00 Yosi

Ria, Jarot, Tara, Fitri, Opening meeting 15.00 Yosi

Ria, Jarot, Verification on corrective action of previous Tara, Fitri, 15.30 audit issues Yosi

Estate

Document review 16.00

Ria Land use permit

Jarot Social impact assessment

Fitri AMDAL (ANDAL, RKL RPL)

Tara OHS permit

Yosi HCV assessment

01.03.2016 Day-2

Lubuk Raja Estate

Audit Report

Audit meetings plus functions/ processes/ Times* Date Auditor # Shifts* areas/ *shifts audited: From - To Document review and site visit: RSPO Criteria: 4.1.1, 4.1.2, 4.1.3 Criteria: 4.2. 4.3, 4.5 all indicators Ria 08.00 – 17.00 Criteria: 4.6.1, 4.6.2, 4.6.3, 4.6.4, 4.6.5, 4.6.7, 4.6.8, 4.6.9 Criterion: 6.10 Criterion: 7.3 if applicable Document review and site visit: RSPO Criteria: 1.1; 1.2; 1.3 all indicators Criteria: 2.1.1 for social aspect Criteria: 2.2.3; 2.2.4; 2.2.5; 2.2.6; 2.3 all 08.00 – 17.00 Jarot indicator Criteria: 4.6.12 Criteria: 6.1, 6.2, 6.3, 6.4, 6.5, 6.6, 6.7, 6.8, 6.9, 6.11, 6.12, 6.13 Criterion: 8.1 Interview with employees, labour union and 14.00 committee gender (Mill and Estate) Document review and site visit: RSPO Criteria: 2.1 all indicators for OHS aspect Tara Criterion: 4.6.11 08.00 – 17.00 Criteria: 4.7 all indicators Criterion: 4.8 all indicators Criterion: 8.1 Document review and site visit: RSPO Criteria: 2.1 all indicators for environmental 08.00 – 17.00 aspects Fitri Criterion: 4.4.1 Criterion: 4.6.6, 4.6.10 Criterion: 5.1, 5.3, 5.4, 5.5 and 5.6 all indicators Criterion: 8.1 Document review and site visit: RSPO

Criterion: 4.4.2 08.00 – 17.00 Yosi Criterion: 5.2 all indicators Site visit: HCV and conservation area Observation of Facility in Mill Estate All auditors Break 12.00 – 14.00

02.03.2016 Day – 3

Lubuk Raja Mill Document review and site visit: RSPO Partial certification requirements Ria Criteria: 3.1. all indicators 08.00 – 17.00 Criteria: 4.1.1, 4.1.2, 4.1.3 Criterion: 6.10 Criterion: 8.1

Audit Report

Audit meetings plus functions/ processes/ Times* Date Auditor # Shifts* areas/ *shifts audited: From - To Document review RSPO Criteria: 1.1; 1.2; 1.3 all indicators 08.00 Jarot and Criteria: 2.1.1 for social aspect Yosi Criteria: 6.1, 6.2, 6.3, 6.4, 6.5, 6.6, 6.7, 6.8, 6.9, 6.11, 6.12, 6.13 Criterion: 8.1 Interview with Kepala Desa, Tokoh 14.00 Masyarakat Document review and site visit: RSPO Criteria: 2.1 all indicators for OHS aspect Tara 08.00 – 17.00 Criteria: 4.7 all indicators Criterion: 4.8 all indicators Criterion: 8.1 Document review and site visit: RSPO Criteria: 2.1 all indicators for environmental Fitri aspects 08.00 – 17.00 Criterion: 4.4.1, 4.4.3, 4.4.4 Criterion: 5.1, 5.3, 5.4 and 5.6 all indicators Criterion: 8.1 All auditors Break 12.00 – 14.00

Setyo Travelling Jakarta – site GA first flight

03.03.2016 Day – 4

Bukit Raja Estate Document review and site visit: RSPO Criteria: 4.1.1, 4.1.2, 4.1.3 Criteria: 4.2. 4.3, 4.5 all indicators Ria 08.00 – 17.00 Criteria: 4.6.1, 4.6.2, 4.6.3, 4.6.4, 4.6.5, 4.6.7, 4.6.8, 4.6.9 Criterion: 6.10 Criterion: 7.3 if applicable Document review and site visit: RSPO Criteria: 1.1; 1.2; 1.3 all indicators Criteria: 2.1.1 for social aspect Criteria: 2.2.3; 2.2.4; 2.2.5; 2.2.6; 2.3 all 08.00 – 17.00 Jarot indicator Criteria: 4.6.12 Criteria: 6.1, 6.2, 6.3, 6.4, 6.5, 6.6, 6.7, 6.8, 6.9, 6.11, 6.12, 6.13 Criterion: 8.1 Interview with employees, labour union and 14.00 committee gender (Estate) Document review and site visit: RSPO Criteria: 2.1 all indicators for OHS aspect Tara 08.00 – 17.00 Criterion: 4.6.11 Criteria: 4.7 all indicators Criterion: 4.8 all indicators WORK ITEM: WI-860953 Doc ID: 3843 / Issue Date May, 2014 © SAI Global Limited Copyright 2008 - ABN 67 050 611 642 Page 139 of 211

Audit Report

Audit meetings plus functions/ processes/ Times* Date Auditor # Shifts* areas/ *shifts audited: From - To Criterion: 8.1 Document review and site visit: RSPO Criteria: 2.1 all indicators for environmental aspects Fitri Criterion: 4.4.1 08.00 – 17.00 Criterion: 4.6.6, 4.6.10 Criterion: 5.1, 5.3, 5.4, 5.5 and 5.6 all indicators Criterion: 8.1 Document review and site visit: RSPO

Criterion: 4.4.2 Yosi Criterion: 5.2 all indicators 08.00 – 17.00 Site visit: HCV and conservation area Observation of Facility in Mill Estate Lubuk Raja Mill

SCC Setyo 08.00 – 17.00 Interview with FFB supplier

All auditors Break 12.00 – 14.00

04.03.2016 Day – 5

Estate and Mill

All auditors Audit continued 08.00

All auditors Discussion 09.00

All auditors Closing meeting 11.00

All auditors Travelling site - Jakarta 12.00

Audit Report

Appendix “B” – Previous Nonconformities and Opportunity for Improvement Summary

RSPO Principe and Criteria, Indonesian National Interpretation

Not Applicable

Mill Supply Chain Certification System

Not Applicable

Opportunities for improvement – RSPO

Not Applicable

Opportunities for improvement – Mill Supply Chain Requirements

Not Applicable

Appendix “C” – Nonconformities, Corrective Actions and Observations Summary

Generic RSPO Principle and Criteria Organisation Name: PT. Serikat Putra Location: Kab. Pelalawan Date: 4/03/2016 Audit team leader: Ria Gloria Activity/Report ID: WI-711225 License/Certificate No.: FMS40061 Organisation’s acknowledgement of receipt of NCR Employee Name: Santobri Date NCR Accepted: 4/03/2016

Section 1 Section 2 Section 3 Section 4

Details of non-conforming situation SAI Correction : Root Cause and Corrective SAI Global SAI Global Verification of Corrective

Action for Effectiveness: and Objective Evidence : Verification (immediate fix) Action : Response Review: (how and (action to prevent recurrence) when)

NCR Nr. NCR

clause(s)

Classification

Standard(s) & & Standard(s)

01 RSPO Major List of information that can be Due Date: Add the information to Root Cause: Response: Verification of Effectiveness: Criteria obtained by other stakeholders in 3/06/2016 FORM/PROS-04/02 rev 2 Lack of information that can be Acceptable (please List of information that can be 1.2 Lubuk Raja Estate has been obtained by stakeholder in the see section 4 for obtained by other stakeholders in indicator established however it does not list details) Lubuk Raja Estate has been major 1 complete with information of Land SAI completed with information of Land titles/user rights (Criterion 2.2) such Follow up titles/user rights in form no as : Method: Corrective Action: FORM/PROS-04/02 rev 2 about List Legal boundaries ,land use, Onsite Review all information that can Reviewer: of Information. be obtained by stakeholder in classification, total area, grant title, At Pekan Baru Fitria Rahmayanti All information in the FORM/PROS- permit validity , NCR rights Office the list. 04/02 has been reviewed.

Date: 21/07/2016 NCR 2016-01 closed

Name Fitria Rahmayanti Date: 21/07/2016

Audit Report

Section 1 Section 2 Section 3 Section 4

Details of non-conforming situation SAI Correction : Root Cause and Corrective SAI Global SAI Global Verification of Corrective

Action for Effectiveness: and Objective Evidence : Verification (immediate fix) Action : Response Review: (how and (action to prevent recurrence) when)

NCR Nr. NCR

clause(s)

Classification

Standard(s) & & Standard(s)

02 RSPO Major Non-conforming situation: Due Date: 1. Provide new permit of Root Cause : Response: Verification of Effectiveness: Criteria There was no evidence of 3/06/2016 starene in Estate. 1. New permit of starene Acceptable (please 1. There was permit of Starane 2.1 compliance with relevant legal 2. Disseminate was not provided in see section 4 for 290 EC as limited pesticide from indicator requirements. details) major 1 SAI regarding prohibition Estate. Pesticide Committee Ministry of

Follow up of domestic waste 2. Lack of awareness from Agriculture Requirement: Method: burning to all staff and employees in domestic Reviewer: No.445/Kompes/2014 valid Onsite RSPO Criteria 2.1 indicator major 1 employees. Transport waste handling. Ria Gloria through 15 April 2019. At Pekan Baru and dispose waste to 3. Lack of monitoring items 2. Organisation has been Office non hazardous waste disseminating to all staff Objective evidence: required by RKL RPL. Date: 2/09/2016 landfill area every (spraying staff, harvesting staff) 1. Permit of limited pesticides 4. Receipt note of logbook of Friday by assigned on 9 May 2016 about prohibited were expired, e.g. Starene hazardous waste has not worker. to burn domestic waste. 2. There was no evidence that been sent to Mill and 3. Analyse erosion rate Monitoring of domestic waste several regulation was Estates by Pekan Baru by using USLE handling to prevent waste complied, e.g. there was Office. method. burning is conducted daily and evidence domestic waste has 5. Development of LA report result was well recorded 4. Provide receipt note burned (against UU 18/2008) period October – of sending of 3. Organisation has monitored 3. Monitoring result to erosion rate December 2015 was hazardous waste erosion rate by using USLE by using USLE method as delayed due Sustainability handling. method at Bukit Raja and Lubuk Department waited for the required by RKL RPL cannot Raja Estates. Monitoring was 5. Send LA report period data from Mill. be shown during audit. held on 12 February 2016. The October – December 4. There was no evidence that 6. Estates have applied for result is erosion rate on Lubuk 2015 to related logbook of hazardous waste buying equipment for Raja Estate 10.71 ton/ha/year government was reported to BLH Pelalawan Estate fire prevention and Bukit Raja Estate 11.90 institution. District, BLH Riau Province, system and still waiting for ton/ha/year. It indicated that KLH, and PPE Sumatra for 6. Complete the facility approval from erosion at Lubuk Raja and Bukit period October – December and equipment for Management for building Raja Estate is ethereally (<15 2015 as required by permit Estate fire prevention the fire tower. ton/ha/year). system (e.g. fire tower 5. There was no evidence that Monitoring of erosion rate has numbers was lower land application report was been included in environmental than required, not reported to BLH Pelalawan and OHS budget and conducted District, BLH Riau Province, available binoculars, annually. KLH, and PPE Sumatra for compass, period October – December alarms/sirens, etc.) 2015 as required by permit

Audit Report

Section 1 Section 2 Section 3 Section 4

Details of non-conforming situation SAI Correction : Root Cause and Corrective SAI Global SAI Global Verification of Corrective

Action for Effectiveness: and Objective Evidence : Verification (immediate fix) Action : Response Review: (how and (action to prevent recurrence) when)

NCR Nr. NCR

clause(s)

Classification

Standard(s) & & Standard(s)

6. The facility and equipment for 7. Follow training of first 7. Training needs analysis 4. There was evidence that Estate fire prevention system aid and Hiperkes for and training program has logbook of hazardous waste was not proper and adequate paramedic. been developed and still period October – December refer to regulation/guidance reviewed by reviewer 2015 has been sent to BLH from ministry of agriculture (e.g. 8. Arrange operational fire tower numbers was less permit of heavy team prior to be approved Pelalawan District, BLH Riau than required, not available equipment, by Management. First aid Province, KLH, and PPE binoculars, compass, compressors/pressure and hiperkes training has Sumatra Region on 4 March alarms/sirens, etc.) vessels, loader, been included in the 2016. 7. Especially at the estate, the excavators and program and realised 5. There was evidence that land personnel of first aiders was not carbide welding after approval of training application report period trained and certified yet as vessel. program. October – December 2015 has required regulation Permenaker been sent to BLH Pelalawan 8. Lack of understanding of 15/2008, also for HIPERKES 9. Apply the safety District, BLH Riau Province, paramedics was not certified committee approval to regulation regarding KLH, and PPE Sumatra Region yet as required Permenaker Disnaker. operational permit and on 4 March 2016. 1/1979 certification of heavy 10. Measure vibration, 6. Bukit Raja and Lubuk Raja 8. Several equipment at the equipment, compressors/ illumination, thermal Estate have requested to estate was not had valid permit pressure vessels, loader, purchase equipment for fire (WBGT), etc. as regulation requirement, excavators and carbide prevention system such as includes: compressors/pressure welding vessel. binocular, compass, vessels, loader and excavators sirens/alarm, GPS, etc. The also the carbide welding 9. Previous safety request was approved by vessel. committee has been management with PR No. 9. The organisation of safety authorised by Disnaker. 1039738499 and 1039573550. committee (P2K3) at the estate There was new safety Environmental and OHS budget was not yet had approval letter committee due the has been included provision of from authority. member of committee fire prevention equipment. 10. The OHS measurement at the change. 7. Training for personnel first aider mill was limited only for noise has been conducted on 25 – 26 measurement that not comply July 2016 by internal doctor and with regulation Kepmen collaborate with Training Centre 13/2011 which required thermal Kayangan. (WBGT) measurement, The organisation has registered vibration, illumination, etc. 2 paramedics to follow Hiperkes training which will be conducted on 10-14 October 2016 in PT

Zigot Mediatama, Jakarta.

Audit Report

Section 1 Section 2 Section 3 Section 4

Details of non-conforming situation SAI Correction : Root Cause and Corrective SAI Global SAI Global Verification of Corrective

Action for Effectiveness: and Objective Evidence : Verification (immediate fix) Action : Response Review: (how and (action to prevent recurrence) when)

NCR Nr. NCR

clause(s)

Classification

Standard(s) & & Standard(s)

10. Mill did not include Training need analysis was monitoring of vibration, documented in Matrix Training illumination, thermal Needs Identification. Training required by RSPO has been (WBGT), etc. as required included, e.g. SIO, welding by in the Kepmen 13/2011 operator, etc. Training activities in the monitoring activity has been included in every 6 months. environmental and OHS budget. 8. The organisation has been Corrective Action : cooperated with PT Biro Klasifikasi Indonesia to conduct 1. Update list of pesticide arrangement of operational permit periodically. permit of heavy equipment, Provide copy of pesticide compressors/pressure vessels, permit in Estates. loader, excavators and carbide welding vessel. The activity will 2. Determine instruction not be conducted in October 2016. to burn domestic waste. 9. There was approval letter from Daily monitor of domestic Head of Labour Department of waste handling by fire Pelalawan District for The patrol officer organisation of safety 3. Analyse erosion rate by committee (P2K3) Lubuk Raja Estate No.KPTS.566/DTKT- using USLE method as WAS/2016/27 dated 18 April required by RKL RPL 2016 and No. KPTS.566/DTKT- every 6 months. Include WAS/2016/29 dated 18 April erosion monitoring into 2016 for Bukit Raja Estate. monitoring and measurement program. 4. Send receipt note of sending of hazardous waste handling to Mill and Estates every 3 months . 5. Determine time line of data sending from Mill to Sustainability Department at the end of month and send LA report on time. WORK ITEM: WI-860953 Doc ID: 3843 / Issue Date May, 2014 © SAI Global Limited Copyright 2008 - ABN 67 050 611 642 Page 145 of 211

Audit Report

Section 1 Section 2 Section 3 Section 4

Details of non-conforming situation SAI Correction : Root Cause and Corrective SAI Global SAI Global Verification of Corrective

Action for Effectiveness: and Objective Evidence : Verification (immediate fix) Action : Response Review: (how and (action to prevent recurrence) when)

NCR Nr. NCR

clause(s)

Classification

Standard(s) & & Standard(s)

6. Provide facility and 10. The OHS measurement at the equipment for fire mill has been held for vibration prevention gradually and and illumination on 24 March include them into annual 2016 comply with KepmenLH budget. 49/1996 for vibration and 7. Execute all training Permenkaer 13/2011 for programmed to fulfil illumination. The measurement training need analysis was conducted by Binalab Laboratory. Vibration and 8. To inventory number of illumination measurement were heavy equipment, held at boiler station, engine compressor and carbide room, clarification station, press welding vessel in Estate station, and thresher station. and apply arrangement of operational permit to The organisation is still in process to purchase equipment Management and for measuring thermal (WBGT). disseminate regarding Purchase request has been related regulation. approved by Management. It 9. Apply the safety was informed that there was no committee approval to external laboratory that competent to conduct Disnaker immediately measurement of thermal when there is changing in (WBGT). the structure or there is Measurement of vibration, new structure. illumination, thermal (WBGT), etc. has been included in the environmental monitoring program in Mill

NCR 2016-02 closed

Name Ria Gloria Date: 2/09/2016

Audit Report

Section 1 Section 2 Section 3 Section 4

Details of non-conforming situation SAI Correction : Root Cause and Corrective SAI Global SAI Global Verification of Corrective

Action for Effectiveness: and Objective Evidence : Verification (immediate fix) Action : Response Review: (how and (action to prevent recurrence) when)

NCR Nr. NCR

clause(s)

Classification

Standard(s) & & Standard(s)

10. Include measurement of vibration, illumination, thermal (WBGT), etc. every six months in the environmental monitoring program in Mill.

03 RSPO Minor Non-conforming situation: Due Date: Construct new pegs for Root Cause : Response: Verification of Effectiveness: Criteria Availability of pegs has not been Next audit missing pegs and add Estate has not constructed Acceptable (please  Number of peg HGU #109 has 2.2 according to HGU map. identification to and repaired to missing and see section 4 for been identified, based on indicator unidentified pegs. unidentified pegs. details) documentation of peg minor 2 SAI installation on the field. Requirement: Follow up  The missing pegs in LRE: legal RSPO Criteria 2.2 indicator minor 2 Method: Corrective Action: Reviewer: pegs #224, 226, 44, 43, 29, 25, Onsite Monitor result of pegs Fahrul Rozi 24, 23, 22, 165, 95, 90 and maintenance and repair when BRE: legal pegs #218, 113, Objective evidence: pegs broken or missing. Date: 21/07/2016 118, 58, 55 have been  It was found that peg at site constructed, based on the were not identified with peg minutes of installed of pegs. number, e.g. peg number #109. Legal pegs are monitored quarterly.  From monitoring result of pegs conducted by organisation, there were several legal pegs NCR 2016-03 closed were missing, e.g. o LRE: legal pegs #224, Name 226, 44, 43, 29, 25, 24, 23, 22, 165, 95, 90 Fitria Rahmayanti o BRE: legal pegs #218, Date: 113, 118, 58, 55 21/07/2016

Audit Report

Section 1 Section 2 Section 3 Section 4

Details of non-conforming situation SAI Correction : Root Cause and Corrective SAI Global SAI Global Verification of Corrective

Action for Effectiveness: and Objective Evidence : Verification (immediate fix) Action : Response Review: (how and (action to prevent recurrence) when)

NCR Nr. NCR

clause(s)

Classification

Standard(s) & & Standard(s)

04 RSPO Minor Non-conforming situation: Due Date: Install temperature gauge Root Cause : Response: Verification of Effectiveness: Criteria There was no evidence that machine Next audit in digester. Lack of awareness. Operator Acceptable (please The digester machine has been 4.1 production was maintained and did not report the lack of see section 4 for completed with pressure gauge on 3 indicator controlled to fulfil process parameter temperature gauge. details) Mei 2016, the photos has been minor 3 defined. SAI showed. Follow up Method: Corrective Action: Reviewer: Dissemination has been conducted to process operator. Requirement: Onsite Disseminate regarding Fitria Rahmayanti

RSPO Criteria 4.1 indicator minor 3 checking of measurement device condition and reporting NCR 2016-04 closed of the condition. Date: 21/07/2016 Objective evidence: Report when equipment not Name  From 7 digester machine, only available or broken. Monitor two machines completed with condition of temperature Fitria Rahmayanti temperature gauge as gauge during maintenance Date: temperature proses activity and repair temperature 21/07/2016 measurement in digester. gauge in digester when it broken. Check result of maintenance activity.

Audit Report

Section 1 Section 2 Section 3 Section 4

Details of non-conforming situation SAI Correction : Root Cause and Corrective SAI Global SAI Global Verification of Corrective

Action for Effectiveness: and Objective Evidence : Verification (immediate fix) Action : Response Review: (how and (action to prevent recurrence) when)

NCR Nr. NCR

clause(s)

Classification

Standard(s) & & Standard(s)

05 RSPO Minor Non-conforming situation: Due Date: Provide SOP and tissue Root Cause : Response: Verification of Effectiveness: Criteria There was no evidence of periodic Next audit analysis in Estate.  SOP and tissue analysis Acceptable (please  SOP of tissue sampling has been 4.2 tissue and soil sampling to monitor result was kept in Research see section 4 for conducted, no CR-AGR-713- indicator changes in nutrient status. details) minor 3 SAI Department and was not LSU.06.11-1. This sampling has Follow up provided in Estates. been conducted in first semester Requirement: Method:  The organisation only Reviewer: to arrange the recommendation Onsite RSPO Criteria 4.2 indicator minor 3 conducted tissue analysis Fitria Rahmayanti for one year ahead after for manuring implementation year. Objective evidence: recommendation and did Date: 21/07/2016  The recording of tissue analysis’ result conducted LRE plantation  There were no SOPs for tissue not conduct soil analysis. to 107 samples were accepted at and soil sampling.  Manuring recommendation 9th February 2016 and were  There were no records of tissue is based on LSU and finished at 1st March 2016, while and soil analysis considers soil type not BRE Plantation to 77 samples th based on SSU therefore were accepted at 9 February soil sampling was not 2016. conducted periodically but based on result of detail soil NCR 2016-05 closed survey. Name Corrective Action: Fitria Rahmayanti Provide SOP and tissue Date: analysis result in Estate every 21/07/2016 period.

Provide result of detail soil survey in Estate which the report included method of soil survey.

Audit Report

Section 1 Section 2 Section 3 Section 4

Details of non-conforming situation SAI Correction : Root Cause and Corrective SAI Global SAI Global Verification of Corrective

Action for Effectiveness: and Objective Evidence : Verification (immediate fix) Action : Response Review: (how and (action to prevent recurrence) when)

NCR Nr. NCR

clause(s)

Classification

Standard(s) & & Standard(s)

06 RSPO Minor Non-conforming situation: Due Date: Provide monitoring report Root Cause : Response: Verification of Effectiveness: Criteria There was no evidence of strategic Next audit of erosion rate in Estate. Monitoring report of erosion Acceptable (please  There has a report about erosion 4.3 for planting on slopes. rate was not provided in see section 4 for monitoring in Lubuk Raja Estat, indicator Estates. details) PT Serikat Putra in 2016, made minor 2 SAI by internal company, by research Requirement: Follow up staff of land division. RSPO Criteria 4.3 indicator minor 2 Method: Corrective Action: Reviewer:  Peg Installation on 27th May 2015 Onsite Send monitoring report of Fitria Rahmayanti and first erosion monitoring was erosion rate to Estate in every conducted on 12th February 2016 Objective evidence: period monitoring. (8 months).  Monitoring result of erosion rate Date: 21/07/2016 could not be shown.  There is three classes of slope, 9- 15%, 16-30% and >30%.

 The actual calculation of slope with 9 – 15 % has 1,5 ton/ha/year of the erosion rate, 16 – 30 % has the erosion rate of 3,4 ton/ha/year, with >30% has the erosion rate of 2,7 ton/ha/year.  The potential calculation use USLE method of slope with 9 – 15 % has the erosion rate 2,35 ton/ha/year, with 16 – 30 % has the erosion rate 8,32 ton/ha/year, with >30% has the erosion rate 18,61ton/ha/year.  The prediction of erosion Lubuk Raja Estate use USLE method with average in 10 years has erosion rate10,71 ton/ha/year  The clarification with USLE method is in lightweight category (< 15 ton/ha/year) NCR 2016-06 closed

Audit Report

Section 1 Section 2 Section 3 Section 4

Details of non-conforming situation SAI Correction : Root Cause and Corrective SAI Global SAI Global Verification of Corrective

Action for Effectiveness: and Objective Evidence : Verification (immediate fix) Action : Response Review: (how and (action to prevent recurrence) when)

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clause(s)

Classification

Standard(s) & & Standard(s)

07 RSPO Minor Non-conforming situation: Due Date: Measure quality of water Root Cause : Response: Verification of Effectiveness: Criteria There was no evidence of water Next audit to external laboratory Estate was waiting for Acceptable (please Clean water measurement has been 4.4 measurement analysis Binalab. Management approval to take see section 4 for conducted on 30 May 2016 by indicator water (waduk) for housing at details) Binalab Laboratory. There was 3 minor 1 SAI Requirement: Estate. sampling points in each estate such Follow up as: RSPO Criterion 4.4 indicator minor 1 Method: Reviewer: Onsite Corrective Action:  Pondok II wells’, Waduk Gesang Fitria Rahmayanti Send water sampling to Tirta Pondok I, Waduk Tapian Objective evidence: Nauli Pondok III at Lubuk Raja registered external laboratory The measurement analysis for water every year. Include Date: 22/07/2016 Estate (water for housing at Estates) was measurement of water quality  Waduk Pondok I, II, III at Bukit not conducted yet. from housing into Raja Estate Environmental and OHS annual budget. The measurements were not complied with Permenkes 416/1990 for coliform parameter and it was disseminated to all of staff on 9 May 2016. Measurement of water quality from housing has been included into Environmental and OHS annual budget.

NCR 2016-07 closed

Name Fitria Rahmayanti Date: 22/07/2016

Audit Report

Section 1 Section 2 Section 3 Section 4

Details of non-conforming situation SAI Correction : Root Cause and Corrective SAI Global SAI Global Verification of Corrective

Action for Effectiveness: and Objective Evidence : Verification (immediate fix) Action : Response Review: (how and (action to prevent recurrence) when)

NCR Nr. NCR

clause(s)

Classification

Standard(s) & & Standard(s)

08 RSPO Minor Non-conforming situation: Due Date: Perform IPM training to all Root Cause : Response: Verification of Effectiveness: Criteria There was no evidence that Next audit IPM workers During IPM training held by Acceptable (please Training of integrated pest 4.5 employees involved in the Research Department, it was see section 4 for management (IPM) has been carried indicator implementation of IPM were only attended by details) out on 23 May 2016 at the plantation minor 2 SAI competence. representative of each workers. The content was delivered Follow up division. include understanding of pests Method: Reviewer: types, their attacks to palm oil Requirement: Onsite Fitria Rahmayanti plantation and how to control them, Corrective Action: RSPO Criteria 4.5 indicator minor 2 understanding of form census Perform IPM training to all IPM caterpillar, monitoring nest of owls, workers and include IPM Date: 21/07/2016 host plants and predators of pests. Objective evidence: training into annual training  IPM training has not been program NCR 2016-08 closed delivered to employees involved in the implementation Name of IPM Fitria Rahmayanti

Date: 21/07/2016

Audit Report

Section 1 Section 2 Section 3 Section 4

Details of non-conforming situation SAI Correction : Root Cause and Corrective SAI Global SAI Global Verification of Corrective

Action for Effectiveness: and Objective Evidence : Verification (immediate fix) Action : Response Review: (how and (action to prevent recurrence) when)

NCR Nr. NCR

clause(s)

Classification

Standard(s) & & Standard(s)

09 RSPO Major Non-conforming : Due Date: 1. Install emergency Root Cause : Response: Verification of Effectiveness: Criteria 3/06/2016 eyewash and shower. 1. Estate is waiting for Acceptable (please 1. Based on photo shown, 4.7 Lack of OHS facilities and 2. Conduct CPO tank purchasing emergency see section 4 for organisation (Lubuk Raja and indicator equipment in order of incident prevention, as objective evidences cleaning completed eyewash and shower from details) Bukit Raja Estate) has been major 1 SAI with gas management. below. built the facility for emergency Follow up measurement. Method: 2. Mill conduct CPO tank Reviewer: cases (eyewash and shower) at cleaning only based on Onsite Ria Gloria oil station, workshop, chemical Objective evidence : determined work storage, hazardous waste 1. There is not available yet the instruction. temporary storage. Date: 2/09/2016 facility of emergency eyewash 2. Gas measurement during CPO and shower especially at the Corrective Action: estate area that stored tank cleaning will be conducted hazardous chemicals 1. Estate force management in December 2016, cooperation (pesticides/herbicides and to accelerate purchase with CV Bina Alam Lestari. equipment and material to engine lubricants) Work instruction of CPO tank construct eyewash and 2. For confined space activities at cleaning has been revised and shower. Identify all areas mill (e.g. CPO tank cleaning) mentioned that gas required completed by was not provided with gas measurement is required during eyewash and shower detector equipment in order to CPO tank cleaning. 2. Revise work instruction. ensure that the atmosphere The organisation is still in Apply purchase of gas include oxygens at the confined process to purchase gas detector. spaces was adequate to detector base on PR on 3 entered by humans March 2016.

NCR 2016-09 closed

Name Fitria Rahmayanti Date: 21/07/2016

Audit Report

Section 1 Section 2 Section 3 Section 4

Details of non-conforming situation SAI Correction : Root Cause and Corrective SAI Global SAI Global Verification of Corrective

Action for Effectiveness: and Objective Evidence : Verification (immediate fix) Action : Response Review: (how and (action to prevent recurrence) when)

NCR Nr. NCR

clause(s)

Classification

Standard(s) & & Standard(s)

10 RSPO Major Non-conforming : Due Date: Provide peer review report Root Cause : Response: Verification of Effectiveness: Criteria Report of HCV Area Identification at 3/06/2016 of HCV Identification Peer review report was not Acceptable (please Peer review has been conducted 5.2 PT. Serikat Putra has not been Report. provided in Estate see section 4 for by Dr. Jarwadi Budi Hernowo indicator conducted the peer review details) (independent consultant) major 1 SAI registered in HCV RN. Follow up Corrective Action: Objective evidence : Method: Send peer review report of Reviewer: Biography Onsite There was not peer review as part of HCV Identification Report to Fitria Rahmayanti BSc (Ir) in Forestry with Major Forest HCV Identification Method within Estate. Conservation (1985) MSc.F in Report of HCV Identification at PT. Date: 21/07/2016 Forestry Science with Major Wildlife Serikat Putra, 2011. Ecology (1995) PhD (Dr) in Forestry with Major Avian Ecology (2011) Since 2008 - 2010 study on Ecological Assessment in several HCV Area, Since 2010 - 2014 as Fauna Team on HCV Assessment on Oil Palm Plantation (included Sumatra, Kalimantan, and Papua) more than 20 reports Since 2010 - 2014 as Team Leader on HCV Assessment on Oil Palm Plantation (15, included Sumatra, Kalimantan, and Papua) Since 2012 - 2014 has been reviewer more than 40 draft report HCV Assessment on Oil Palm and Forestry. Peer review report has been sent to Estate.

NCR 2016-10 closed

Name Fitria Rahmayanti Date: 21/07/2016

Audit Report

Section 1 Section 2 Section 3 Section 4

Details of non-conforming situation SAI Correction : Root Cause and Corrective SAI Global SAI Global Verification of Corrective

Action for Effectiveness: and Objective Evidence : Verification (immediate fix) Action : Response Review: (how and (action to prevent recurrence) when)

NCR Nr. NCR

clause(s)

Classification

Standard(s) & & Standard(s)

11 RSPO Major Non-conforming : Due Date: Disseminate HCV area to Root Cause : Response: Verification of Effectiveness: Criteria Dissemination of HCV area for 3/06/2016 Mill employees and The organisation assumed Acceptable (please HCV area dissemination for staff and 5.2 communities around employees of LRF and local that dissemination of HCV was see section 4 for employee has been done on 28 indicator communities the surrounding at PT. organisation. only conducted to Estate. details) June 2016 in the meeting room. major 2 SAI Serikat Putra have not been Estate was waiting for the right Documentation of HCV area conducted. Follow up dissemination, attendance list and its Method: time to conduct public Reviewer: consultation to disseminate material are already available. Onsite Ria Gloria Dissemination of HCV area to the Objective evidence : HCV area to communities. At Pekan Baru local communities was conducted on There was the dissemination Office 31 August 2016 when HCV public Date: 2/09/2016 program to employee and around Corrective Action: consultation. List of attendance and communites at PT. Serikat Putra in Improve the HCV material of public consultation was Report of HCV Managament Plan understanding for all sighted. Sustainability and HCV officer. HCV understanding has been Include public consultation and disseminated to all Sustainability HCV dissemination activity and HCV officer. into Environmental and OHS budget. Public consultation and HCV Dissemination HCV area to dissemination activity has been employees annually. included into Environmental and . OHS budget. The activities is planned to be conducted annually.

NCR 2016-11 closed

Name Ria Gloria Date: 2/09/2016

Audit Report

Section 1 Section 2 Section 3 Section 4

Details of non-conforming situation SAI Correction : Root Cause and Corrective SAI Global SAI Global Verification of Corrective

Action for Effectiveness: and Objective Evidence : Verification (immediate fix) Action : Response Review: (how and (action to prevent recurrence) when)

NCR Nr. NCR

clause(s)

Classification

Standard(s) & & Standard(s)

12 RSPO Minor Non-conforming : Due Date: Disseminate prohibition Root Cause : Response: Verification of Effectiveness: Criteria Penalties have not been directly Next audit and penalty of hunting in Mill and Estates was waiting Acceptable (please The dissemination associated 5.2 HCV area to all employees communicated to all employees and for the right time to conduct see section 4 for penalties for violators of the HCV indicator the local community during HCV and communities around public consultation to details) has been done on 28 June 2016 minor 3 SAI organisation. socialization and through the HCV disseminate prohibition and attended by staffs and employees. sign boards and warnings board Follow up penalty of hunting in HCV Documentation of socialization, Method: Reviewer: area to communities. attendance list and its material are Onsite Ria Gloria already available. Objective evidence : Dissemination of prohibition and  Based on interview with welder Corrective Action: penalty of hunting in HCV area to Date: 2/09/2016 employee at LRF and sprayer at Include dissemination of the local communities was LRE and observation to HCV prohibition and penalty of conducted on 31 August 2016 when hunting in HCV area into HCV public consultation. List of areas at Terbangian Riparian, Environmental and OHS attendance and material of public Grave Block of D9, penalties have budget. consultation was sighted. not been directly communicated to Disseminate prohibition and all employees and the local penalty of hunting in HCV area Dissemination of prohibition and community during HCV to employees annually. penalty of hunting in HCV area has socialization and through the HCV been included into Environmental sign boards and warnings board and OHS budget. The activity is conducted during annually public consultation.

NCR 2016-12 closed

Name Ria Gloria Date: 2/09/2016

Audit Report

Section 1 Section 2 Section 3 Section 4

Details of non-conforming situation SAI Correction : Root Cause and Corrective SAI Global SAI Global Verification of Corrective

Action for Effectiveness: and Objective Evidence : Verification (immediate fix) Action : Response Review: (how and (action to prevent recurrence) when)

NCR Nr. NCR

clause(s)

Classification

Standard(s) & & Standard(s)

13 RSPO Major Non-conforming situation: Due Date: 1. Transport clinical Root Cause : Response: Verification of Effectiveness: Criteria Hazardous wastes were not 3/06/2016 waste by the 1. The organisation has not Acceptable (please 1. The organisation has had 5.3 disposed of responsibly authorised party. found out the authorised see section 4 for cooperation with PT Kenali indicator 2. Provide hazardous party to process clinical details) Indah Sejahtera to manage major 2 SAI waste manifest sheet waste. Requirement: clinical waste. Based on letter Follow up #7 in Mill and Estate. RSPO Criterion 5.3 indicator major 2 Method: 2. Hazardous waste Reviewer: #046/KISpku-SK/VIII/2016 3. Provide fire manifest sheet #7 was not Onsite dated 24 August 2016, PT extinguisher and provided in Mill and Ria Gloria Objective evidence: At Pekan Baru eyewash in temporary Estate. Kenali Indah Sejahtera will be Office transported the clinical waste on 1. Medical waste was stored in storage of hazardous 3. Fire extinguisher and Date: 2/09/2016 15 September 2016. temporary storage of hazardous waste. eyewash in temporary waste Estates and has not been 4. Keep expired storage of hazardous 2. The hazardous waste manifest transported by the authorised chemical into waste is waiting for copy #7 has been shown for institution. temporary storage of Management approval.. period September 2015. Used hazardous waste to 4. Lack of hazardous waste filter was organized by PT be transported by the 2. Processor of hazardous waste office awareness to keep Andhika Makmur Persada, used authorised party. expired chemical into was not clear. Hazardous waste oil by PT Sinkona Indah lestari, temporary storage of manifest copy #7 has not been used rags by PT Holcim hazardous waste. provided for period September Indonesia, used battery by PT

2015 Non Ferindo Utama, and used Corrective Action: lamp by PPLI. 3. Hazardous waste temporary 1. Cooperate with the 3. Based on photo shown, storage at Bukit Raja Estate has authorised party for hazardous waste temporary not accomplished with shower, transporting clinical waste. storage at Bukit Raja Estate has eye washer as required by been completed with eye permit. washer/shower for fire prevention system. 4. There was evidence that chemicals at laboratory have Provision of fire extinguisher been expired e.g. Nalco 460- and hazardous waste S0260 expired on October management has been included 2015, Nalco S0277 and S0222 into Environmental and OHS expired on September 2015. budget.

Audit Report

Section 1 Section 2 Section 3 Section 4

Details of non-conforming situation SAI Correction : Root Cause and Corrective SAI Global SAI Global Verification of Corrective

Action for Effectiveness: and Objective Evidence : Verification (immediate fix) Action : Response Review: (how and (action to prevent recurrence) when)

NCR Nr. NCR

clause(s)

Classification

Standard(s) & & Standard(s)

2. Sustainability Department 4. The expired chemical from send hazardous waste laboratory has been evacuated manifest sheet #7 to to hazardous waste temporary Estate and Mill every storage on 3 March 2016, there period of hazardous waste transportation. was logbook and photo shown. 3. Apply purchase of fire Dissemination regarding extinguisher and hazardous waste handling constructing of eyewash. including expired chemical Include provision of new handling has been conducted. fire extinguisher and HSE officer is assigned to check hazardous waste hazardous waste handling. management into Environmental and OHS budget. NCR 2016-13 closed 4. Disseminate regarding Name: Ria Gloria hazardous waste management including Date: 2/09/2016 expired chemical handling to hazardous waste officer. Assign person in charge to monitor hazardous waste handling including expired chemical.To inventory quantity of expired chemical, keep into temporary storage of hazardous waste and record in the logbook of hazardous waste.

Audit Report

Section 1 Section 2 Section 3 Section 4

Details of non-conforming situation SAI Correction : Root Cause and Corrective SAI Global SAI Global Verification of Corrective

Action for Effectiveness: and Objective Evidence : Verification (immediate fix) Action : Response Review: (how and (action to prevent recurrence) when)

NCR Nr. NCR

clause(s)

Classification

Standard(s) & & Standard(s)

14 RSPO Major Non-conforming situation: Due Date: 1. Measure emission of Root Cause : Response: Verification of Effectiveness: Criteria There was no evidence that polluting 3/06/2016 operation vehicle, 1. Emission measurement of Acceptable (please 1. Estate has applied regarding 5.6 activities was measurement. heavy equipment and operation vehicle, heavy see section 4 for measurement of emission of indicator generator (capacity equipment and generator details) operation vehicle, heavy major 1 SAI >100 HP) was not included in the Requirement: equipment and generator. The Follow up 2. Measure odour at monitoring and RSPO Criterion 5.6 indicator major 1 Method: Reviewer: measurement is conducted at WWTP area. measurement program. Onsite 3rd and 4th week September 2. Measurement of odour at Ria Gloria Objective evidence: WWTP area was not 2016.  There was no emission included in the monitoring Date: 2/09/2016 2. Odour measurement has been measurement result of and measurement program. conducted on 26 March 2016 by operation vehicle, heavy Binalab Laboratory. It was held equipment and generator in Corrective Action : on three point measurement, Estate. 1. To inventory and include football field, POME station, and measurement of operation staff housing. It was comply with  There was no odour vehicle, heavy equipment KepmenLH 50/1996. measurement result of POME at and generator (capacity > mill 100 HP) into monitoring and measurement program. Conduct measurement NCR 2016-14 closed every 6 months. 2. Include measurement of Name odour at WWTP area into monitoring and Ria Gloria measurement program. Date: Conduct measurement 2/09/2016 every 6 months.

Audit Report

Section 1 Section 2 Section 3 Section 4

Details of non-conforming situation SAI Correction : Root Cause and Corrective SAI Global SAI Global Verification of Corrective

Action for Effectiveness: and Objective Evidence : Verification (immediate fix) Action : Response Review: (how and (action to prevent recurrence) when)

NCR Nr. NCR

clause(s)

Classification

Standard(s) & & Standard(s)

15 RSPO Major Non-conforming situation: Due Date: Develop program and Root Cause : Response: Verification of Effectiveness: Criteria There was plans to reduce or 3/06/2016 timeline of GHG emission Sustainability Department as Acceptable (please There was plans to minimise the 5.6 minimise the identified pollutant and reduction. in charge for GHG emission see section 4 for GHG emission include objective, indicator GHG emission but the plans doesn’t reduction still collect data from details) target, and timelines for reduction. major 2 include objective, target, and SAI Estates and Mill as base for The objective such as use empty timelines for reduction Follow up establishing program and fruit bunch application to reduce Method: target of GHG emission Reviewer: chemical fertilizer usage. In 2015 Onsite Requirement: reduction. . Fitria Rahmayanti 36,733.4 ton empty fruit bunch was RSPO Criterion 5.6 indicator major 2 applicate at 2,167 Ha and can reduce emission 0.0098 kgCO2e/kg Corrective Action : Date: 21/07/2016 FFB. Objective evidence: Establish program, target and Timeline for minimise emission by The plans to reduce or minimise the timeline of GHG emission reduce fertilizer and pesticide usage: identified pollutant and GHG reduction for the next 5 years. emission doesn’t include objective, Include program, target and Year Fertilizer Pesticide target, and timelines for reduction. timeline into Form 01-03 Usage Usage “Environmental objective, 2014 7,902 3,537 target and program. Review achievement of GHG 2015 6,438 3,183 emission reduction annually.. 2016 5,215 2,865

2017 4,224 2,578

2018 3,233 2,291

In 2015, paraquat (gramoxone) usage was decreased than year 2014 (2,245 L to 2,529) and reduce emission 0.0001 kg CO2e/kg FFB.

NCR 2016-15 closed

Name: Fitria Rahmayanti Date: 21/07/2016

Audit Report

Section 1 Section 2 Section 3 Section 4

Details of non-conforming situation SAI Correction : Root Cause and Corrective SAI Global SAI Global Verification of Corrective

Action for Effectiveness: and Objective Evidence : Verification (immediate fix) Action : Response Review: (how and (action to prevent recurrence) when)

NCR Nr. NCR

clause(s)

Classification

Standard(s) & & Standard(s)

16 RSPO Minor Non-conforming situation: Due Date: Calculate GHG emission Root Cause : Response: Verification of Effectiveness: Criteria GHG calculation has not been Next audit 2015 and report the result Sustainability Department as Acceptable (please PT Serikat Putra has been report 5.6 calculated and reported to RSPO to RSPO. in charge for GHG emission see section 4 for GHG Calculation period 2015 to indicator calculation still collect data details) RSPO (Melissa Chin) on 4 May minor 3 SAI Requirement: from Estates and Mill for 2016 by email. Follow up calculate GHG emission RSPO Criterion 5.6 indicator minor 3 Method: Reviewer: GHG emission has been calculated 2015.. for period 2015, total field emission Onsite Fitria Rahmayanti is 180,656.30 tCO2e and total mill

Objective evidence: Corrective Action : emission is 26,428.75 tCO2e. GHG emission has not been Date: 21/07/2016 calculated and reported yet for Determine timeline collection period 2015. of data for GHG emission NCR 2016-16 closed calculation at the beginning of each year to Estates and Mill. Name Report GHG calculation result annually. Fitria Rahmayanti Date: 21/07/2016

Audit Report

Section 1 Section 2 Section 3 Section 4

Details of non-conforming situation SAI Correction : Root Cause and Corrective SAI Global SAI Global Verification of Corrective

Action for Effectiveness: and Objective Evidence : Verification (immediate fix) Action : Response Review: (how and (action to prevent recurrence) when)

NCR Nr. NCR

clause(s)

Classification

Standard(s) & & Standard(s)

17 RSPO Minor Review of Social Management Plan Due Date: Provide monitoring report Root Cause : Response: Verification of Effectiveness: Criteria (RKS) and Social Monitoring Plan of social impact in Estate. (RPS) has not been conducted yet Next Audit Monitoring report of social Acceptable (please Review of monitoring and 6.1 impact was not provided in see section 4 for management has been set out in the indicator since the social impact assessment has been established in 2011. Plan Estate. details) report of monitoring the social minor 4 SAI impact of oil palm plantation in 2015 of monitoring for social impact Follow up assessment has been conducted. with the participation of affected Method: Corrective Action : Reviewer: parties through interviews with Onsite Include sending of monitoring Fitria Rahmayanti community leaders. Monitoring of report of social impact into CSR program is already available for Environmental and OHS the years 2011 - 2015 which covers budget. Date: 21/07/2016 the activities undertaken, an Sustainability Department is influential indicator, performance required to send monitoring and analysis of programs that have report of social impact to been implemented. Estate and provide it every period of reporting. Sending of monitoring report of social impact has been included into Environmental and OHS budget.

NCR 2016-17 closed

Name Fitria Rahmayanti Date: 21/07/2016

Audit Report

Section 1 Section 2 Section 3 Section 4

Details of non-conforming situation SAI Correction : Root Cause and Corrective SAI Global SAI Global Verification of Corrective

Action for Effectiveness: and Objective Evidence : Verification (immediate fix) Action : Response Review: (how and (action to prevent recurrence) when)

NCR Nr. NCR

clause(s)

Classification

Standard(s) & & Standard(s)

18 RSPO Major Documented procedure for Due Date: Disseminate procedure Root Cause : Response: Verification of Effectiveness: communication and consultation with Criteria 4/06/2016 SIM-PROS-04 to The organisation was waiting Acceptable (please Dissemination of procedure SIM- 6.2 public was established in procedure communities regarding SIM-PROS-04, dated 04-02-2014 for the right time to see section 4 for PROS-04 to communities regarding indicator communication, disseminate procedure SIM- details) communication, participation and major 1 however not yet socialized to related SAI participation and interested parties PROS-04 to communities consultation was conducted on 31 Follow up consultation. regarding communication, August 2016 during public Method: participation and consultation. Reviewer: consultation. List of attendance and Onsite The right time to disseminate Ria Gloria material of public consultation was the procedure is during public sighted. consultation. Date: 2/09/2016 NCR 2016-18 closed Corrective Action : Disseminate procedure SIM- Name PROS-04 to communities regarding communication, Ria Gloria participation and consultation Date: during public consultation 2/09/2016 annually as mentioned in the Environmental and OHS budget.

Audit Report

Section 1 Section 2 Section 3 Section 4

Details of non-conforming situation SAI Correction : Root Cause and Corrective SAI Global SAI Global Verification of Corrective

Action for Effectiveness: and Objective Evidence : Verification (immediate fix) Action : Response Review: (how and (action to prevent recurrence) when)

NCR Nr. NCR

clause(s)

Classification

Standard(s) & & Standard(s)

19 RSPO Major Policy on the prevention of sexual Due Date: Re-disseminate policy of Root Cause : Response: Verification of Effectiveness: harassment written in Sustainability Criteria 3/06/2016 sexual harassment to all Lack of dissemination Acceptable (please Dissemination related to sexual 6.9 of Palm Oil date 1 May 2015 employees. regarding the sexual harassment regarding sexual harassment see section 4 for harassment to all employees has indicator policy to all employees.. details) already been conducted on 15 May major 1 prevention however not yet SAI disseminated to all employees. 2016. Documentation of attendance Follow up lists and materials are available. Method: Corrective Action : Reviewer: Onsite Program of gender committee has Program of gender committee Fitria Rahmayanti covered dissemination of sexual cover dissemination of sexual harassment policy and mentioned harassment policy. Date: 21/07/2016 that dissemination is conducted Disseminate is conducted annually to all employees including annually to all employees new employees. including new employees.

NCR 2016-19 closed

Name Fitria Rahmayanti Date: 21/07/2016

Audit Report

Section 1 Section 2 Section 3 Section 4

Details of non-conforming situation SAI Correction : Root Cause and Corrective SAI Global SAI Global Verification of Corrective

Action for Effectiveness: and Objective Evidence : Verification (immediate fix) Action : Response Review: (how and (action to prevent recurrence) when)

NCR Nr. NCR

clause(s)

Classification

Standard(s) & & Standard(s)

20 RSPO Major Policy on the protection of Due Date: Disseminate SE No.003 Root Cause : Response: Verification of Effectiveness: Criteria reproductive rights of all, especially 3/06/2016 /AMA/S/XII/2014 Policy on Lack of dissemination Acceptable (please Dissemination of SE No.003 6.9 the protection of of women written in SE No.003 regarding SE No.003 see section 4 for /AMA/S/XII/2014 Policy on the indicator /AMA/S/XII/2014 date December 5 reproductive rights to all /AMA/S/XII/2014 Policy on the details) protection of reproductive rights has major 2 SAI women workers. year 2014 however it was not protection of reproductive been conducted to workers on 10 disseminated to all related Follow up rights to all employess. April 2016. Documentation of Method: Reviewer: employees. attendance lists, materials and Onsite Fitria Rahmayanti photos are available. Corrective Action :

Program of gender committee cover dissemination of SE Date: 21/07/2016 Program of gender committee has No.003 /AMA/S/XII/2014 covered dissemination of SE No.003 Policy on the protection of /AMA/S/XII/2014 Policy on the reproductive rights. protection of reproductive rights and Disseminate is conducted mentioned that dissemination is annually to all employees conducted annually to all employees including new employees.. including new employees.

NCR 2016-20 closed

Name Fitria Rahmayanti Date: 21/07/2016

Audit Report

Section 1 Section 2 Section 3 Section 4

Details of non-conforming situation SAI Correction : Root Cause and Corrective SAI Global SAI Global Verification of Corrective

Action for Effectiveness: and Objective Evidence : Verification (immediate fix) Action : Response Review: (how and (action to prevent recurrence) when)

NCR Nr. NCR

clause(s)

Classification

Standard(s) & & Standard(s)

21 RSPO Major Non-conforming situation: Due Date: Provide HCV and SIA Root Cause : Response: Verification of Effectiveness: Certificatio There was no evidence that partial 3/06/2016 document as the result of Development of gap analysis Acceptable (please  HCV and SIA document was n System certification requirements was no replacement of report for all management see section 4 for available, mentioned that clause complied primary forest or any units has not been finished at details) uncertified units does not have: 4.2.4 SAI area identified as the time of stage-2 RSPO Follow up containing High audit. o Replacement of primary Requirement: Method: Reviewer: forest or any area Conservation Values RSPO Criteria 2.1 indicator major 1 Onsite Ria Gloria identified as containing (HCVs), land conflicts Corrective Action : High Conservation Values

and labour disputes Conduct internal audit once a (HCVs) or required to Objective evidence: and evaluation result of year to ensure that partial Date: 2/09/2016 maintain or enhance HCVs There was no evidence that compliance with certification requirement is in accordance with RSPO uncertified management unit regulations as no legal fulfilled. criterion 7.3. complied with partial certification non-compliance report. Discuss gap analysis result in o Any new plantings since requirements regarding no Management Meeting to get January 1st 2010 must replacement of primary forest or any solution from issued found comply with the RSPO area identified as containing High during internal audit.. New Plantings Procedure Conservation Values (HCVs), land (Annex 5). conflicts, labour disputes and legal o Land conflict non-compliance. o Labour dispute  Evaluation result of compliance with regulations mentioned that there was no non-compliance with regulation.  Internal audit for uncertified unit management has been programmed and will be conducted once a year.

NCR 2016-21 closed

Name Ria Gloria Date: 2/09/2016

Audit Report

Organisation Name: PT. Serikat Putra Location: Kab. Pelalawan Date: 4/03/2016 Audit team leader: Ria Gloria Activity/Report ID: WI-711225 License/Certificate No.: FMS40061 Organisation’s acknowledgement of receipt of NCR Employee Name: Santobri Date NCR Accepted: 4/03/2016 Mill Supply Chain Certification System

Section 1 Section 2 Section 3 Section 4

Details of non-conforming SAI Correction : Root Cause and Corrective SAI Global SAI Global Verification of

situation and Objective Evidence : Verification (immediate fix) Action : Response Review: Corrective Action for (how and (action to prevent recurrence) Effectiveness: when)

NCR Nr. NCR

clause(s)

Classification

Standard(s) & & Standard(s)

22 RSPO SC Major Due Date:  Assign personnel who Root Cause : Response: Verification of Effectiveness: 2014 Details of non-conforming have responsibility for situation: 3/06/2016  Management has not Acceptable (please  There are already personnel in clause shipping assigned personnel who see section 4 for charge of e-trace RSPO in E.2.2. announcement on e- Personnel who has responsibility for have responsibility for details) accordance with the SAI trace. shipping announcement Memorandum No. 057 / SUS / shipping announcement on e-trace Follow up  Revise SOP No. CR- on e-trace. IME / 05/2016, regarding the (i.e.: RSPO IT Platform) has not Method: Reviewer: been determined for CPO and PK. OPR-101-  SOP of Supply Chain still Person in Charge RSPO E-trace Onsite Fitria Rahmayanti Moreover, communication and SPC.12.13.2 refers to referred to RSPO SC by Department of Commercial

information needed between Mill and RSPO SC 2014. 2011. and Department of Sustainability. Department of commercial Head Office has not been Date: 21/07/2016 documented in the system prior to conducts recording sales of CPO announce at the date of shipment. Corrective Action : Physic with RSPO certified from  Assign personnel who each PKS into RSPO system E- Objective Evidence : have responsibility for trace. This recording is conducted shipping announcement if there is a sales transaction of  The site did not have on e-trace. physical CPO with RSPO documented procedure about certified, performs data  Revise SOP No. CR- that. recapitulation of monthly sales OPR-101-SPC.12.13.2 and sends recording to the PIC when there is a change in Department of Sustainability and RSPO SC. MCC managers linked to the needs of the RSPO certification audit.

Audit Report

Section 1 Section 2 Section 3 Section 4

Details of non-conforming SAI Correction : Root Cause and Corrective SAI Global SAI Global Verification of

situation and Objective Evidence : Verification (immediate fix) Action : Response Review: Corrective Action for (how and (action to prevent recurrence) Effectiveness: when)

NCR Nr. NCR

clause(s)

Classification

Standard(s) & & Standard(s)

  Communication and information needed between Mill and Head Office prior to announce at the date of shipment has been documented in Revise SOP No. CR-OPR-101-SPC.12.13.2.

NCR 2016-22 closed

Name Fitria Rahmayanti Date: 21/07/2016

23 RSPO SC Major Due Date: Revise SOP No. CR-OPR- Root Cause : Response: Verification of Effectiveness: 2014 Details of non-conforming 3/06/2016 101-SPC.12.13.2 refers to SOP of Supply Chain still Acceptable (please SOP and policy #CR-OPR-101- clause situation: RSPO SC 2014. E.3.1.a. referred to RSPO SC 2011. see section 4 for SPC.03.13-1, revision 1 regarding and b. The implemented system has not details) supply chain is accordance with SAI RSPO SC 2014 requirements. been documented according to Follow up Corrective Action : RSPO SC 2014 requirements. Method: Revise SOP No. CR-OPR- Reviewer: Onsite NCR 2016-23 closed Objective Evidence : 101-SPC.12.13.2 when there Fitria Rahmayanti is a change in RSPO SC. Implemented system was mostly Date: 21/07/2016 Name documented in the SOP No.CR- Fitria Rahmayanti OPR-101-SPC.12.13.2 date of issuance December 15, 2013. The Date: documented procedure refers to the 21/07/2016 obsolete standard of RSPO SC 2011.

Audit Report

Section 1 Section 2 Section 3 Section 4

Details of non-conforming SAI Correction : Root Cause and Corrective SAI Global SAI Global Verification of

situation and Objective Evidence : Verification (immediate fix) Action : Response Review: Corrective Action for (how and (action to prevent recurrence) Effectiveness: when)

NCR Nr. NCR

clause(s)

Classification

Standard(s) & & Standard(s)

24 RSPO SC Major Due Date: Make contractual Root Cause : Response: Verification of Effectiveness: 2014 Details of non-conforming agreement with CV situation: 3/06/2016 Lack of understanding Acceptable (please Statement to fulfil all requirements clause Sumber Kencana and PT regarding requirements and see section 4 for inline with RSPO SC 2014 as E.3.1.c STP which including The site did not have contract implementation of RSPO SC details) implemented by PT Serikat Putra SAI statement that the third 2014.. from the third parties, i.e. PT agreement which describes that the Follow up party to fulfil all outsourcing will always meet to the Sumber Kencana and PT Sarana Method: requirements inline with Reviewer: Tempa Perkasa has been provided. RSPO SC requirements. Onsite RSPO SC 2014. Corrective Action : Ria Gloria The third parties are also ready to be Objective Evidence : Conduct RSPO SC 2014 audited for PT Serikat Putra interest. training to all employees Date: 2/09/2016  There is no agreement with : involved in implementation of RSPO SC 2014. RSPO SC training was conducted o CV. Sumber Kencana as on 4-5 August 2016, held by transporter. Disseminate RSPO SC 2014 IndoAgri to the third party involved in RSPO SC 2014. o PT. STP as management NCR 2016-24 closed bulking station.

Name Ria Gloria Date: 2/09/2016

Audit Report

Section 1 Section 2 Section 3 Section 4

Details of non-conforming SAI Correction : Root Cause and Corrective SAI Global SAI Global Verification of

situation and Objective Evidence : Verification (immediate fix) Action : Response Review: Corrective Action for (how and (action to prevent recurrence) Effectiveness: when)

NCR Nr. NCR

clause(s)

Classification

Standard(s) & & Standard(s)

25 RSPO SC Major Due Date: Provide statement letter Root Cause : Response: Verification of Effectiveness: Details of non-conforming 2014 3/06/2016 from PT SPT and CV PT STP and CV Sumber Acceptable (please  According to letter from PT clause situation: Sumber Kencana Kencana did not have RSPO see section 4 for Sarana Tempa Perkasa (STP) to E.3.1.c regarding RSPO SC SC certificate. details) The site did not have information SAI certificate. PT Serikat Putra No 153-01/DBS- whether the outsourcing (PT STP Follow up AG/V/2016 on 9th April 2016, it and CV Sumber Kencana) have Method: Corrective Action : Reviewer: states that PT STP has not been certified against RSPO SC Onsite followed RSPO certification on 2014 standard whilst SAI Global as PT STP and CV Sumber Fitria Rahmayanti CB was disabling to do onsite Kencana make statement standard Supply Chain 2014. letter to agree with fulfilling auditing at the location of  According to letter PT Sumber requirements of RSPO SC. Date: 21/07/2016 outsourcing. Kencana INHU to PT Serikat

Putra No 001/EKT/SK/04/2016 on Objective Evidence : th 9 April 2016, it states that PT SKI  There is no information whether has not followed RSPO the outsourcing has had certification on standard Supply certificate number and RSPO Chain 2014. License. Further clarification  PT Serikat Putra has used MB was required. module to RSPO SC, in accordance with requirements for PT STP and PT SKI which are not needed the certification but commit to RSPO SC  Statement to fulfil all requirements inline with RSPO SC 2014 as implemented by PT Serikat Putra from the third parties, i.e. PT Sumber Kencana and PT Sarana Tempa Perkasa has been provided. The third parties are willing to be audited for PT Serikat Putra interest.

NCR 2016-25 closed

22/07/2016

Audit Report

Section 1 Section 2 Section 3 Section 4

Details of non-conforming SAI Correction : Root Cause and Corrective SAI Global SAI Global Verification of

situation and Objective Evidence : Verification (immediate fix) Action : Response Review: Corrective Action for (how and (action to prevent recurrence) Effectiveness: when)

NCR Nr. NCR

clause(s)

Classification

Standard(s) & & Standard(s)

26 RSPO SC Major Due Date: Conduct RSPO SC Root Cause : Response: Verification of Effectiveness: Details of non-conforming 2014 3/06/2016 training to personnel The organisation has not Acceptable (please  RSPO SC training was clause situation: involved and implementing included SC training in annual see section 4 for conducted on 4-5 August 2016, E.3.1.d. RSPO SC. training program. details) held by IndoAgri. All personnel involved in SAI Evaluate training result  Effectiveness of conducted implementing RSPO SC system Follow up effectiveness. training is evaluated 3 months have not been well trained. Method: Corrective Action : Reviewer: after training conduct. Onsite Include RSPO SC training into Ria Gloria Objective Evidence : annual training program. NCR 2016-26 closed  RSPO SC training has not been Evaluate training result Date: 2/09/2016 programmed and realized. effectiveness 3 months after  Effectiveness of conducted training conduct. Name training has not been evaluated. Ria Gloria

Date: 2/09/2016

27 RSPO SC Major Due Date: Revise SOP No. CR- Root Cause : Response: Verification of Effectiveness: 2014 Details of non-conforming OPR-101-SPC.12.13.2 situation: 3/06/2016 SOP No. CR- OPR-101- Acceptable (please  SOP No. CR- OPR-101- clause regarding retention time of SPC.12.13.2 mentioned that see section 4 for SPC.12.13.2 has been revised E.5.1 document for 10 years in The implemented system was retention time of document details) regarding retention time of SAI accordance with UU-RI only 5 years. document for 10 years in documented in the SOP No.CR- Follow up no. 8/1997. OPR-101-SPC.12.13.2 which accordance with UU-RI no. Method: Reviewer: 8/1997 mentions that all relevant records Onsite have to be maintained for 5 years. Fitria Rahmayanti Corrective Action : NCR 2016-27 closed Objective Evidence : Keep record for 10 years in Date: 21/07/2016 accordance with UU-RI no.  UU-RI No.8/1997 has 8/1997 Name mentioned 10 years which are Fitria Rahmayanti relevant with financial recording such as delivery notes, invoice, Date: etc. 21/07/2016

Audit Report

Section 1 Section 2 Section 3 Section 4

Details of non-conforming SAI Correction : Root Cause and Corrective SAI Global SAI Global Verification of

situation and Objective Evidence : Verification (immediate fix) Action : Response Review: Corrective Action for (how and (action to prevent recurrence) Effectiveness: when)

NCR Nr. NCR

clause(s)

Classification

Standard(s) & & Standard(s)

28 RSPO SC Major Due Date: Conduct internal audit of Root Cause : Response: Verification of Effectiveness: Details of non-conforming System 3/06/2016 RSPO SC. Internal audit of RSPO SC did Acceptable (please  RSPO SC training was 2014 situation: not include in the work see section 4 for conducted on 4-5 August 2016, clause program due to lack of details) 5.3.6 Effectiveness of the implemented SAI held by IndoAgri system against RSPO SC understanding to implement Follow up RSPO SC 2014.  Internal audit was conducted on requirement 2014 has not been Method: Reviewer: evaluated yet. 9 August 2016. Internal audit Onsite Ria Gloria Corrective Action : activity is included in the annual Objective Evidence : audit program. Conduct RSPO SC 2014 Date: 2/09/2016  There was no internal audit training to all employees record against RSPO SC involved in implementation of NCR 2016-29 closed RSPO SC 2014. standard 2014. Include internal audit of RSPO Name SC into annual work program. Ria Gloria Date: 2/09/2016

Opportunities for improvement – RSPO

None

Opportunities for improvement – Mill Supply Chain Requirements

None

Audit Report

Appendix “D” – Nonconformities, Corrective Actions and Observations Summary

Organisation Name: PT. Serikat Putra Location: Bukit Raja, Pelalawan, Indonesia, Mill Date: 19/01/2017 Audit team leader: Eko Purwanto Activity/Report ID: WI-896683 License/Certificate No.: FMS40061 Organisation’s acknowledgement of receipt of NCR Employee Name: Khaidil Date NCR Accepted: 19/01/2017

Date: 27/04/2017 2017- RSPO Major a) There is no MSDS of Due Date: a) Provide MSDS of Top Root Cause: Response: Verification of Effectiveness: 02 P&C 2013 Pesticides Top Zone and 19/03/2017 Zone and Elang from a) Previously MSDS has Acceptable The Organisation has conduct 4.6.5 Elang in the chemical the supplier that has been available in the dissemination to the warehause storage at LRE, whilst SAI been translated to agrochemical storage at 11/04/2017 officer at LRE and BRE regarding there are 400 litre of Top Follow up Indonesian in LRE LRE, however because it the importance of MSDS and its Zone and 900 litre of Method: warehouse. has been a long time ago Reviewer: availability at the workplace.

Audit Report

Section 1 Section 2 Section 3 Section 4 Details of non-conforming SAI Correction : Root Cause and Corrective SAI Global SAI Global Verification of Corrective Standard NCR situation and Objective Verification (immediate fix) Response Review: Action for Effectiveness: (s) & Classification Action : Nr. Evidence : (how and clause(s) (action to prevent recurrence) when) Elang. Onsite b) Provide MSDS of so the document is Eko Purwanto The organisation has rotated the b) There is no MSDS of Elang from the broken and not replaced related pesticides operator to Pesticides Elang in the supplier that has yet by the warehouse another work which not related to chemical storage at BRE. been translated to officer. SPO Officer as chemical (attached). c) Based on interview with Indonesian in BRE PIC of document control related worker and warehouse. in estate has been The organisation has ensured that training evidence, found c) The worker that has negligent in maintain all pesticides operator has get that one of spraying not receive training MSDS at agrochemical training from related institution (Riau worker (e.g. Pariyem) regarding pesticides storage. Province Commision of Pesticides) has not been uses is rotated to b) Previously MSDS has by using FORM/PROS-09/01 appropriately trained. another work that is been available in the (attached). Based on Procedure of not related to agrochemical storage at Environment and OHS Inspection agrochemical. BRE, however because it (SIMP-PROS-09) HSE Officer and has been a long time ago KTU/Kasie will not assign so the document is employees to the spraying activity broken and not replaced before get trained and having yet by the warehouse certificate from KOMPES. officer. . The Estate need more employee to fulfil the chemical NCR 2017-02 is closed weeding target, so the employee was recruited with Name asumption that she will be Eko Purwanto trained soon. Procedure of Date: Training has been described in 27/04/2017 Simp-Pros-03 by conducting identification of training need for staffs and employees annually. In February 2016 the company has cooperation with Pesticides Commission (KOMPES) to conduct training for pesticides operator. One operator named Pariyem prior to work has been trained by certified supervisor (Mandor Semprot), however the record is not well documented.

Corrective Action: a) Conduct dissemination to the warehause officer at LRE and BRE regarding the importance of MSDS and its availability at the

Audit Report

2017- RSPO Major a) In some places (e.g. Due Date: a) Conduct replacement Root Cause: Response: Verification of Effectiveness: 03 P&C 2013 mess and workshop) 19/03/2017 of domestic waste a) Lack of awareness from Acceptable The Organisation has issued 4.6.6 and found that ex chemical container using bags. employees so that some Memorandum regarding prohibition 5.3.2 container were used as SAI b) Moving the ex of them did not know the 11/04/2017 of using ex hazardous material waste containers. Follow up pesticides container prohibition of ex container, then conduct b) There is no records (in Method: from the warehouse pesticides to be used as Reviewer: dissemination regarding and out) of ex pesticides Onsite to the hazardous another purpose other Eko Purwanto management of domestic waste and container in the chemical waste storage. than chemical uses. prohibition of using ex hazardous storage, some pesticides Conduct recording of b) Understanding from the material container. container (jerry can) were ex pesticides HSE Officer, recording of kept in the chemical containers using ex pesticides container is The Organisation has ensured the storage. hazardous waste only needed in the warehouse officer to directly moved logbook. hazardous waste storage, ex pesticides container to the not in the agrochemical hazardous waste storage after its warehouse. Some of ex empty. According to Simp-Pros-09 pesticides container has and Form 09/01, HSE Officer not moved to the conduct health, safety and hazardous waste storage WORK ITEM: WI-860953 Doc ID: 3843 / Issue Date May, 2014 © SAI Global Limited Copyright 2008 - ABN 67 050 611 642 Page 175 of 211

Audit Report

2017- RSPO Major There is no detail regarding Due Date: Distribute the result of Root Cause: Response: Verification of Effectiveness: 04 P&C 2013 medical surveillance result, 19/03/2017 employee medical check The late result of MCU from Acceptable The Organisation has established 4.6.11 therefore it cannot be up to the company doctor the provider made distribution mechanism that every medical determined follow up action. SAI to be analysed and to company doctor postponed. 11/04/2017 check up performed, Department of Follow up followed up by Estate of Sustainability will ensure the Method: Mill Management. Corrective Action: Reviewer: provider to send the result according Onsite Every medical check up Eko Purwanto to the scheduled time, which is 3 performed, Department of weeks maximum (Based on Sustainability will ensure the Memorandum from Area Manager provider to send the result Agronomy #014/AMA-I/IV/2017 according to the scheduled dated 17 April 2017). time. Department of Sustainability as PIC has NCR 2017-04 is closed defined time limit to report WORK ITEM: WI-860953 Doc ID: 3843 / Issue Date May, 2014 © SAI Global Limited Copyright 2008 - ABN 67 050 611 642 Page 176 of 211

Audit Report

Section 1 Section 2 Section 3 Section 4 Details of non-conforming SAI Correction : Root Cause and Corrective SAI Global SAI Global Verification of Corrective Standard NCR situation and Objective Verification (immediate fix) Response Review: Action for Effectiveness: (s) & Classification Action : Nr. Evidence : (how and clause(s) (action to prevent recurrence) when) Medical surveillance report Name which is 3 weeks after medical Eko purwanto surveillance conducted. Date: 27/04/2017 2017- RSPO Major a) Emergency shower and Due Date: a) Provide emergency Root Cause: Response: Verification of Effectiveness: 05 P&C 2013 eyewash were not 19/03/2017 shower and eyewash a) Proposal of purchasing Acceptable The Organisation has pushed every 4.7.1 available at the estate at the chemical emergency shower and purchase proposal to Purchasing area that stored SAI warehouse and eyewash has been 11/04/2017 Department every week until its hazardous chemicals Follow up workshop using approved. proposed on 1 December (pesticides/herbicides Method: existing material. Reviewer: and engine lubricants). Onsite b) Increase the height of 2016, however the Eko Purwanto The Organisation has established b) Emergency reservoir was emergency reservoir approval process takes a standardisation of fuel emergency not appropriate compare at fuel storage to be long time so during reservoir that is accordanc with the to the capacity of fuel accordance with the special audit, emergency regulation. storage, e.g. 40,000 litre requirement. shower and eyewash at The Organisation has conducted in LRE and 50,000 litre in c) Revise the stock card agrochemical warehouse dissemination to the warehouse BRE. to be accordance and workshop was not officer to performed update of stock c) It was found that amount with actual stock. available yet. card every day so that can be of PPE was not d) Renovate the safety monitored by Estate Manager. accordance with the wall of the well at actual amount, e.g. Division I LRE b) This case has been found The Organisation has conducted safety glasses 16 in housing. during internal audit, identifictaion of existence of unsafe actual whilst 342 in stock however because the well by conducting health, safety card, and safety mask 30 long time of bundwall and environment monitoring to the in actual whilst 20 in material procurement by housing regularly. Each housing stock card. purchasing department area must be visited at least once a d) During observation to makes bundwall has not month. housing of Division I renovate yet according to LRE, found a well with the regulation during inappropriate safety wall. special audit. NCR 2017-05 is closed c) At the day, the warehouse officer was Name busy serving PPE order Eko purwanto from Division, so that he forget to update the stock Date: card. 27/04/2017 d) At erlier time, the well has been equiped with safety well made of wood, after a long time the wood is broken.

Audit Report

2017- RSPO Major a) No period mentioned in Due Date: a) Renew the Root Cause: Response: Verification of Effectiveness: 06 P&C 2013 Lubuk Raja Estate HIRA 19/03/2017 endorsement of a) Review of HIRAC was Acceptable The Organisation has established 4.7.2 document, no justification HIRAC fulfiled with conducted anually, mechanism that Chairman of Safety whether the document SAI date of endorsement. however on 22 January 11/04/2017 Committee ensured that HIRAC updated or not. Follow up b) Conduct revision of 2017 the Secretary forget document fulfiled with date of b) Safety Committee Method: Safety Committee to put date of Reviewer: endorsement annually. Which is organization structure is Onsite and endorse it to the endorsement. Eko Purwanto stated in procedure SIMP-Pros-01 WORK ITEM: WI-860953 Doc ID: 3843 / Issue Date May, 2014 © SAI Global Limited Copyright 2008 - ABN 67 050 611 642 Page 178 of 211

Audit Report

2017- RSPO Major - HCV document that issued Due Date: Root Cause: Response: Verification of Effectiveness: 07 P&C 2013 in 2011 has no longer up to 19/03/2017 SELECT This finding is deleted since there is 5.2.1 date, because its clarification from RSPO described assessment has not cover SAI Corrective Action: SELECT that “An HCV assessment report that all requirement in RSPO PC Follow up Reviewer: was conducted before 1 Jan 2015 2013. Method: (prior to the introduction of the Onsite HCVRN ALS scheme) for the existing RSPO certified plantation does not require an update”.

Name Eko Purwanto Date: 11/04/2017 2017- RSPO Minor a) Medical waste was Due Date: a) Conduct coordination Root Cause: Response: Verification of Effectiveness: 08 P&C 2013 stored in temporary Next Audit with third party to to a) In agreement with PT. Acceptable a) The Organisation has 5.3.3 storage in polyclinic transport medical Kenali Indah Sejahtera conducted coordination with central and has not been SAI waste in PT. Serikat (medical waste 12/04/2017 third party to transport medical transported by the Follow up Putra. transporter and waste in accordance with authorised institution. Method: b) Prohibit burning of processor) stated that Reviewer: agreed schedule. The b) In Division I LRE and Onsite domestic waste at the transport of < 3,000 kg Eko Purwanto organisation has anticipate by Division II BRE housing plantation area medical waste has to extending the storage time of (landsite) found evidence including in housing follow their schedule. hazardous waste storage to be of waste burning. area. Previously the transport 365 days. c) There is no waste c) Provide waste has been scheduled in b) The Organisation has container for organic, container for organic, December 2016, however conducted dissemination to inorganic and hazardous inorganic and because the lack of employees and their family waste in Division I LRE hazardous waste in vehicle, they decide the regarding prohibition of burning housing and Division II Division I LRE transport to be postponed domestic waste. BRE housing. housing and Division until April 2017. Medical c) The Organisation has ensured d) Observation to landfill II BRE housing. waste from central clinic that every employee houses shown that there was d) Prohibit disposal of of Lubuk Raja Estate was have bags to collect domestic hazardous waste stored ex container of stored at temporary waste consist of bags for at the landfill, e.g. ex hazardous material to hazardous waste storage organic, inorganic and insecticide “Hit” and the environment. which have license to hazardous waste. “Baygon” e) Close the previous store for 365 days. d) The Organisation has e) Landfill at BRE is located landfill and open a b) Some of employee family conducted dissemination to near (± 20 m) the new one far from the did not know the employees and their family housing of Division II. housing area. prohibition of waste regarding prohibition of f) During observation to f) Conduct burning at the plantation hazardous waste disposal to housing of Division I management of area. the environment.

Audit Report

including schedule for domestic Corrective Action: a) Department of waste collecting. Sustaianability conduct coordination with third party to transport medical Effectiveness of corrective action will waste in accordance with be verified on next audit. agreed schedule. Medical waste from central clinic NCR 2017-08 is open of Lubuk Raja Estate shall be stored at Name temporary hazardous Eko Purwanto waste storage which have license to store for Date: 365 days until there is 28/04/2017 transport schedule from PT. KIS. b) HSE Officer conduct dissemination to employees and their family regarding prohibition of burning domestic waste. c) HSE Officer ensure that every employee houses have bags to collect domestic waste consist of

Audit Report

2017- RSPO Major SIA document developed in Due Date: Conduct re-assessment of Root Cause: Response: Verification of Effectiveness: 09 P&C 2013 2011 has been no longer 19/03/2017 social impact in PT. Previosly social impact Acceptable The Organisation has made 6.1.3 updated, because its Serikat Putra. assessment has been cooperation with independent assessment has not cover all SAI conducted in 2011 and 12/04/2017 assessor (BIOREF IPB) to perform

Audit Report

2017- RSPO Major - Based on Memorandum Due Date: Issued new Memorandum Root Cause: Response: Verification of Effectiveness: 10 P&C 2013 from Human Resources 19/03/2017 regarding salary in 2017 to In making Memorandum No. Acceptable The Organisation has issued new 6.5.2 Manager No. 094/HR- be comply with the 094/HR-IR/IV/2016 dated 13 Memorandum which is No.079/HR- IR/IV/2016 dated 13 April SAI requirement. April 2016, HRD was using 12/04/2017 IR/III/2017 dated 30 March 2017. 2016, every employee get Follow up previous memorandum that New Memorandum no longer “rice allowance” however in Method: mention: Reviewer: mentioned rice allowance as extra Payroll LRE December Onsite Eko Purwanto salary and casual worker. 2016, rice is more like one - “rice allowance” as extra Department of Sustainability as PIC of salary component. salary, however the of RSPO internal audit will ensure - There is no casual worker correct one is that rice the memorandum and its (PHL) work in PT. Serikat allowance is a component implementation are comply to the Putra, however in of minimum wage based requirement during internal audit. Memorandum from Human on Collective Agrrement Resources Manager No. No.156/GAPKI/BKS- NCR 2017-10 is closed 094/HR-IR/IV/2016 dated PPS/III/2016 dated 3 WORK ITEM: WI-860953 Doc ID: 3843 / Issue Date May, 2014 © SAI Global Limited Copyright 2008 - ABN 67 050 611 642 Page 183 of 211

Audit Report

Corrective Action: Department of Sustainability has make coordination with HRD to revise memorandum regarding salary. New Memorandum has been issued which is No.079/HR- IR/III/2017 dated 30 March 2017. New Memorandum no longer mention rice allowance as extra salary and casual worker. HRD will issued memorandum of salary 2017 after decree letter from Governor of Riau regarding minimum salary 2017 issued. The memorandum will be disseminated to all employees. Department of Sustainability as PIC of RSPO internal audit will ensure the memorandum and its implementation are comply to the requirement during internal audit.

Audit Report

Appendix “E” – Stakeholder’s issues and comment

Result of interview with government institution and community

Date Stakeholder Observation Feedback / Comment of the organisation

 There was no significant problem identified - in the organisation (no cases of industrial relations). Government  Compliance to government regulation for 29/02/ unit union establishment was sighted based on interview. 16 (DISNAKERTR ANS Kabupaten  Social security also been covered for Pelalawan) employee.  Health & safety team has been established and acknowledge by DISNAKERTRANS Kabupaten Pelalawan  The organisation has ANDAL, RKL RPL - Government and environmental permits (permit of unit (Badan temporary storage of hazardous waste, 29/02/ Lingkungan permit of land application) 16 Hidup  Mandatory report is consistently sent to Kabupaten BLH (e.g. report RKL RPL every six months, report of hazardous waste Pelalawan) management every three months.

The organisation which represented by Manager of GRD, Manager of Sustainability, Area Manager of Agronomy and HRD Manager has communicated with community within Kecamatan Petalangan on 25 November 2015 facilitated by DPRD Kab. Pelalawan. Point of issued by communities were among others:  20% of HGU of PT Serikat Putra is for smallholder  Revitalisation river and tributary in area of PT Serikat Putra  CSR was given in the form of smallholder  Village road which existed prior PT Serikat Putra established was enclaved from HGU  Labour was came from local area inline with local regulation of Kab. Pelalawan  Area outside HGU was returned to communities.

The issues were still rose by the community during the audit. Below the feedback from organisation and government regarding the issues:

Feedback of the organisation Comment from the government Date Stakeholder Observation Feedback / Comment of the organisation based on communication on based on communication on 25 November 2015 25 November 2015  Ownership of land is not in accordance  Land ownership in PT Serikat Putra is in  Permit of PT Serikat Putra was  Agency of Forestry: with the permission HGU and conflict and accordance with a permit issued by a in chorological and clear. Cannot explain claim from dispute with local communities residing Government Instance (BPN). BPN permits Permits have been processes communities due the supporting around the Estate. issued in the form of SK. HGU since 1986 before the data was not prepared during No.94/HGU/BPN/99, date 12 November organisation operated until meeting. 1999, covering an area of 12,474.10 HGU obtained in 2000. The  Agency of BPMP2T (Badan hectares, consists of the release of total process involved communities Penanaman Modal dan forest area of 9,330 ha and non-forest area in land acquisition Pelayanan Perizinan Terpadu): Terbangiang covering an area of 3,144 Ha. PT Serikat Putra has fulfil the Village rule inline with IMB and HO.

The organisation has had their

permits  DPRD Kab. Pelalawan: It was expected that PT Serikat Putra complies with legal and other requirements in operational activities and can increase level of living standard of communities around the

WORK ITEM: WI-860953 Doc ID: 3843 / Issue Date May, 2014 © SAI Global Limited Copyright 2008 - ABN 67 050 611 642 Page 186 of 211 AUDIT REPORT Feedback of the organisation Comment from the government Date Stakeholder Observation Feedback / Comment of the organisation based on communication on based on communication on 25 November 2015 25 November 2015 organisation. Local government has to evaluate all permits of PT Serikat Putra and ensure that the organisation has complied with regulations.

 Environmental protection is not implemented by PT Serikat Putra, the river  Related to environmental management, PT  Based on AMDAL, there were  Agency of Environmental: within the company is not maintained Serikat Putra has conducted an four rivers, Sungai Kerumutan, o Basically the organisation Environmental Impact Assessment Sungai Trajan, Sungai has managed their (ANDAL) which verified by the Agriculture Terbangiang and Sungai environment although Ministry / Dirjenbun on February 16, 1996 Susupan. The river stream was several items needed with No.037/ANDAL/RKL-RPL/BA/II/1996. confessed as tributary changes. BLH suggested PT. Serikat Putra has revised streaming along the reviewing preliminary environmental document (ANDAL) to be organisation. Wide of tributary condition and current the Environmental Evaluation Document was 2 - 4 meter and determined condition. The changes (DELH) authorized by the Head of as HCV area. The organisation need properly managed. o Investment and Licensing Services has managed HCV area by BLH will inventory and Integrated (Kepala Badan Penanaman marking HCV boundary when identify 47 tributary Modal dan Pelayanan Perijinan Terpadu) during replanting the area referred by communities. Pelalawan with No.KPTS.503 /BPMP2T- should not be planted by oil When revitalisation is PLY / 11/2015 dated December 22, 2015. palm and enrichment plant needed, it will be In addition, the company comply with the species. informed to the legislation in particular to environmental organisation. management was supervised by BLH o PT Serikat Putra did not Pelalawan, such as compliance with pollute, the organisation quarterly reporting (Balance Sheet of did not discharge waste hazardous waste and Data Reports water to river due they Environmental Monitoring and Land have land application. Application) and six monthly reports (RKL- RPL). As well as regular visits BLH Pelalawan to PT. Serikat Putra to ensure that the company complies with the applicable legislation.

AUDIT REPORT Feedback of the organisation Comment from the government Date Stakeholder Observation Feedback / Comment of the organisation based on communication on based on communication on 25 November 2015 25 November 2015 Related to environmental protection, PT. Serikat Putra have performed the identification and analysis of the presence of High Conservation Value (HCV) in area of PT. Serikat Putra in cooperation with the Faculty of Forestry IPB in 2011 and PT. Serikat Putra monitoring HCV area every year independently. In environmental protection, the company was managing HCV areas, including: o Demarcation of the HCV area with marking on the oil palm on the outer limit of the area KBKT using paint. o Protection HCV area by installing board that shows the function of region that have high conservation value, posting hunt prohibition, fish poison in the river, damaging flora in the HCV area, cultivate oil palm in the HCV area and restrictions to control weeds intensively in HCV area. o Rehabilitation and Enrichment of plant species in the HCV area trough growing plants that have the hydrological function, flora and fauna, social-economic and cultural, planted with cemplongan system and avoid the use of insecticide. o Social approach to disseminate the estate community and the surrounding community about the introduction of conservation values.

 Decisions taken often did not involve local authorities and often the organisation took  The company is always consulting with their own action and taking decisions community leaders, village heads and local

AUDIT REPORT Feedback of the organisation Comment from the government Date Stakeholder Observation Feedback / Comment of the organisation based on communication on based on communication on 25 November 2015 25 November 2015 without involving people and communities. district to make a decision when carried out external activities, such as assistance CD / CSR (documentation attached). Moreover, in case of problems in the field, the company will conduct a good approach to ninik mamak and community leaders for deliberation.

 Land ownership status was not clear, tend  Land ownership in PT Serikat Putra is  Permit of PT Serikat Putra was  Agency of BPMP2T (Badan to conflict with the community which up to clear and trace. Land ownership in in chorological and clear. Penanaman Modal dan now still continue to occur and unfinished. accordance with a permit issued by a Permits have been processes Pelayanan Perizinan Terpadu): government instance (BPN). BPN permits since 1986 before the PT Serikat Putra has fulfil the issued in the form of SK.HGU No. organisation operated until rule inline with IMB and HO. 94/HGU/BPN/99.tgl12/10/1999, covering HGU obtained in 2000. The The organisation has had their an area of 12,474.10 hectares consists of process involved communities permits the release of total forest area of 9,330 in land acquisition  DPRD Kab. Pelalawan: hectares and non forest area covering It was expected that PT Serikat 3,144 hectares. Putra complies with legal and other requirements in operational activities and can

increase level of living standard of communities around the organisation. Local government has to evaluate all permits of PT Serikat Putra and ensure that the organisation has complied with regulations.  Environmental protection does not comply with mandated legislation lack of maintenance on the environment by PT  Related to environmental management, PT  Based on AMDAL, there were  Agency of Environmental: Serikat Putra Serikat Putra has conducted an four rivers, Sungai Kerumutan, o Basically the organisation Environmental Impact Assessment Sungai Trajan, Sungai has managed their (ANDAL) which verified by the Agriculture Terbangiang and Sungai environment although Ministry / Dirjenbun on February 16, 1996 Susupan. The river stream was several items needed

AUDIT REPORT Feedback of the organisation Comment from the government Date Stakeholder Observation Feedback / Comment of the organisation based on communication on based on communication on 25 November 2015 25 November 2015 with No.037/ANDAL/RKL-RPL/BA/II/1996. confessed as tributary changes. BLH suggested PT. Serikat Putra has revised streaming along the reviewing preliminary environmental document (ANDAL) to be organisation. Wide of tributary condition and current the Environmental Evaluation Document was 2 - 4 meter and determined condition. The changes (DELH) authorized by the Head of as HCV area. The organisation need properly managed Investment and Licensing Services has managed HCV area by o BLH will inventory and Integrated (Kepala Badan Penanaman marking HCV boundary when identify 47 tributary Modal dan Pelayanan Perijinan Terpadu) during replanting the area referred by communities. Pelalawan with No.KPTS.503 /BPMP2T- should not be planted by oil When revitalisation is PLY / 11/2015 dated December 22, 2015. palm and enrichment plant needed, it will be In addition, the company comply with the species. informed to the legislation in particular to environmental organisation. management was supervised by BLH o PT Serikat Putra did not Pelalawan, such as compliance with pollute, the organisation quarterly reporting (Balance Sheet of did not discharge waste hazardous waste and Data Reports water to river due they Environmental Monitoring and Land have land application. Application) and six monthly reports (RKL- RPL). As well as regular visits BLH Pelalawan to PT. Serikat Putra to ensure that the company complies with the applicable legislation. Related to environmental protection, PT. Serikat Putra have performed the identification and analysis of the presence of High Conservation Value (HCV) in area of PT. Serikat Putra in cooperation with the Faculty of Forestry IPB in 2011 and PT. Serikat Putra monitoring HCV area every year independently. In environmental protection, the company was managing HCV areas, including: o Demarcation of the HCV area with marking on the oil palm on the outer limit of the area KBKT using paint. o Protection HCV area by installing

AUDIT REPORT Feedback of the organisation Comment from the government Date Stakeholder Observation Feedback / Comment of the organisation based on communication on based on communication on 25 November 2015 25 November 2015 board that shows the function of region that have high conservation value, posting hunt prohibition, fish poison in the river, damaging flora in the HCV area, cultivate oil palm in the HCV area and restrictions to control weeds intensively in HCV area. o Rehabilitation and Enrichment of plant species in the HCV area trough growing plants that have the hydrological function, flora and fauna, social-economic and cultural, planted with cemplongan system and avoid the use of insecticide. o Social approach to disseminate the estate community and the surrounding community about the introduction of conservation values.  No responsibility PT Serikat Putra to communities affected by the establishment  At the time of the Mill Project in 1989, the of the mill which was affected residential local population numbered only six families communities. and Palm Oil Mill was built turned the settlements so that the local community are not affected directly. In addition, PT. Serikat Putra has conducted routine environmental monitoring in cooperation with third party and the results are reported to BLH six monthly reporting of RKL-RPL. Environmental monitoring consists of monitoring of river water quality, quality of Mill effluent, ground water quality, soil quality in the LA area, and ambient air quality. According the results of environmental monitoring, the operational activities of the POM were still below the threshold. It was not environmental

 Related to the status of land ownership of  Land ownership status of PT. Serikat Putra o Permit of PT Serikat Putra was  Agency of BPMP2T (Badan PT Serikat Putra, land was taken by PT is clear, it was described in the Land B in chorological and clear. Penanaman Modal dan Serikat Putra (Excess land). checking (Risalah pemeriksaan Tanah B) Permits have been processes Pelayanan Perizinan Terpadu): No.06/RSL/HGU/1990 and No.31 / since 1986 before the PT Serikat Putra has fulfil the RSL/HGU/1991. organisation operated until rule inline with IMB and HO. HGU obtained in 2000. The The organisation has had their process involved communities permits in land acquisition  DPRD Kab. Pelalawan: It was expected that PT Serikat

Putra complies with legal and other requirements in operational activities and can increase level of living standard Religious of communities around the leaders - the organisation. village of Local government has to Lubuk Raja evaluate all permits of PT

Serikat Putra and ensure that

the organisation has complied with regulations.

 Agency of Environmental:  Environmental Protection has been carried o Based on AMDAL, there were o Basically the organisation  Environmental protection less attention out by PT.Serikat Putra, among others: PT four rivers, Sungai Kerumutan, has managed their resulted in biodiversity polluted by smoke Serikat Putra has conducted an Sungai Trajan, Sungai environment although and waste covers the watershed and HCV Environmental Impact Assessment Terbangiang and Sungai several items needed (Funeral). (ANDAL) which verified by the Agriculture Susupan. The river stream was changes. BLH suggested Ministry / Dirjenbun on February 16, 1996 confessed as tributary reviewing preliminary with No.037/ANDAL/RKL-RPL/BA/II/1996. streaming along the condition and current PT. Serikat Putra has revised organisation. Wide of tributary condition. The changes environmental document (ANDAL) to be was 2 - 4 meter and determined need properly managed WORK ITEM: WI-860953 Doc ID: 3843 / Issue Date May, 2014 © SAI Global Limited Copyright 2008 - ABN 67 050 611 642 Page 192 of 211

AUDIT REPORT Feedback of the organisation Comment from the government Date Stakeholder Observation Feedback / Comment of the organisation based on communication on based on communication on 25 November 2015 25 November 2015 the Environmental Evaluation Document as HCV area. The organisation o BLH will inventory and (DELH) authorized by the Head of has managed HCV area by identify 47 tributary Investment and Licensing Services marking HCV boundary when referred by communities. Integrated (Kepala Badan Penanaman during replanting the area When revitalisation is Modal dan Pelayanan Perijinan Terpadu) should not be planted by oil needed, it will be Pelalawan with No.KPTS.503 /BPMP2T- palm and enrichment plant informed to the PLY / 11/2015 dated December 22, 2015. species. organisation. In addition, the company comply with the o PT Serikat Putra did not legislation in particular to environmental pollute, the organisation management was supervised by BLH did not discharge waste Pelalawan, such as compliance with water to river due they quarterly reporting (Balance Sheet of have land application. hazardous waste and Data Reports Environmental Monitoring and Land Application) and six monthly reports (RKL- RPL). As well as regular visits BLH Pelalawan to PT. Serikat Putra to ensure that the company complies with the applicable legislation. Related to environmental protection, PT. Serikat Putra have performed the identification and analysis of the presence of High Conservation Value (HCV) in area of PT. Serikat Putra in cooperation with the Faculty of Forestry IPB in 2011 and PT. Serikat Putra monitoring HCV area every year independently. In environmental protection, the company was managing HCV areas, including: o Demarcation of the HCV area with marking on the oil palm on the outer limit of the area KBKT using paint. o Protection HCV area by installing board that shows the function of region that have high conservation value, posting hunt prohibition, fish

AUDIT REPORT Feedback of the organisation Comment from the government Date Stakeholder Observation Feedback / Comment of the organisation based on communication on based on communication on 25 November 2015 25 November 2015 poison in the river, damaging flora in the HCV area, cultivate oil palm in the HCV area and restrictions to control weeds intensively in HCV area. o Rehabilitation and Enrichment of plant species in the HCV area trough growing plants that have the hydrological function, flora and fauna, social-economic and cultural, planted with cemplongan system and avoid the use of insecticide. o Social approach to disseminate the estate community and the surrounding community about the introduction of conservation values.

 Agency of Environmental:  The organisation has already  Recruitment of workers who do not give  The company has received the local labor, The organisation has to give a employeed 94 workers placed opportunity to the local resident (obligation the data on 2015, local employment change to communities to in Lubuk Raja Estate 34 to employed 60% of local communities in reached 94 workers, with details: Lubuk improve the level of economy workers, Bukit Raja Estate 30 Pelalawan district as per regulations was Raja Estate 34, Bukit Raja Estate 30 not only working with the workers and Lubuk Raja not implemented). people and Lubuk Raja Mill 27 people. In organisation, it can be also Factory 27 workers. the future, if there is a need of worker will conducted by business be communicated to local governments in opportunity or cooperation with the form of job vacancy announcements. the organisation

 Still many civil rights in people who was not  It is not true enclaved yet.

 CSR program was not informed and clearly  The company has always coordinate with  CSR was distributed to 15  Agency of Environmental: socialized to the communities. youth leaders, community leaders, village villages around the CSR has to synchronised with heads and local district when delivery CD / organisation. Until October program of local government so CSR aid. 2015, the organisation has that not overlap with program of

spent Rp 1.9 billion, covering: local government

health, education, religious,

 Many promises from company that until  The Company will evaluate and now was not realized. accommodate it

 PT Serikat Putra was unlikely to  KKPA did not existed because the  PT Serikat Putra was the only company establish 20% smallholder due company got business license before the that was not established a partnership with to the organisation was built issuance of government regulations that the community (KKPA). before 2007. In the previous describe the company’s core obligation to claim from one of communities, make plasma. the organisation used to give Companies ever gave a solution the solution to form partnership forming of partnerships gardens but the however at that time burning process was plagued by land acquisition was occurred in the so that the partnership was not organisation and the implemented. partnership was cancelled. After that, partnership was re- proposed mediated by Bupati Pelalawan but the process was constrained by land acquisition therefore the partnership was not implemented.

 Land ownership status PT Serikat Putra  Land ownership in accordance with a o Permit of PT Serikat Putra was  Agency of BPMP2T (Badan was not in accordance with the licensed permit issued by a government instance in chorological and clear. Penanaman Modal dan given. e.g There was land excessed of +/- (BPN). BPN permits issued in the form of Permits have been processes Pelayanan Perizinan Terpadu): 6000 Ha. SK.HGU No. since 1986 before the PT Serikat Putra has fulfil the 94/HGU/BPN/99.tgl12/10/1999, covering organisation operated until rule inline with IMB and HO. Youth an area of 12,474.10 hectares consists of HGU obtained in 2000. The The organisation has had their Leaders the release of total forest area of 9,330 process involved communities permits hectares and non forest area covering in land acquisition  DPRD Kab. Pelalawan:

3,144 hectares. It was expected that PT Serikat It was described in the Land B checking Putra complies with legal and

(Risalah pemeriksaan tanah B) other requirements in No.06/RSL/HGU/1990 and No.31 / operational activities and can RSL/HGU/1991. increase level of living standard WORK ITEM: WI-860953 Doc ID: 3843 / Issue Date May, 2014 © SAI Global Limited Copyright 2008 - ABN 67 050 611 642 Page 195 of 211

AUDIT REPORT Feedback of the organisation Comment from the government Date Stakeholder Observation Feedback / Comment of the organisation based on communication on based on communication on 25 November 2015 25 November 2015 of communities around the organisation. Local government has to evaluate all permits of PT Serikat Putra and ensure that the organisation has complied with regulations.

 Environmental protection does not exist,  Related to environmental management, PT o Based on AMDAL, there were  Agency of Environmental: rivers was taken (Sasapan river, Serikat Putra has conducted an four rivers, Sungai Kerumutan, o Basically the organisation Kerumutan river, Sungan waterfalls, Environmental Impact Assessment Sungai Trajan, Sungai has managed their Tangguk Tinggal river). (ANDAL) which verified by the Agriculture Terbangiang and Sungai environment although Ministry / Dirjenbun on February 16, 1996 Susupan. The river stream was several items needed with No.037/ANDAL/RKL-RPL/BA/II/1996. confessed as tributary changes. BLH suggested PT. Serikat Putra has revised streaming along the reviewing preliminary environmental document (ANDAL) to be organisation. Wide of tributary condition and current the Environmental Evaluation Document was 2 - 4 meter and determined condition. The changes (DELH) authorized by the Head of as HCV area. The organisation need properly managed has managed HCV area by Investment and Licensing Services o BLH will inventory and Integrated (Kepala Badan Penanaman marking HCV boundary when identify 47 tributary Modal dan Pelayanan Perijinan Terpadu) during replanting the area referred by communities. Pelalawan with No.KPTS.503 /BPMP2T- should not be planted by oil When revitalisation is PLY / 11/2015 dated December 22, 2015. palm and enrichment plant needed, it will be In addition, the company comply with the species. informed to the legislation in particular to environmental organisation. management was supervised by BLH o PT Serikat Putra did not Pelalawan, such as compliance with pollute, the organisation quarterly reporting (Balance Sheet of did not discharge waste hazardous waste and Data Reports water to river due they Environmental Monitoring and Land have land application. Application) and six monthly reports (RKL-

RPL). As well as regular visits BLH Pelalawan to PT. Serikat Putra to ensure that the company complies with the applicable legislation.

AUDIT REPORT Feedback of the organisation Comment from the government Date Stakeholder Observation Feedback / Comment of the organisation based on communication on based on communication on 25 November 2015 25 November 2015 Related to environmental protection, PT. Serikat Putra have performed the identification and analysis of the presence of High Conservation Value (HCV) in area of PT. Serikat Putra in cooperation with the Faculty of Forestry IPB in 2011 and PT. Serikat Putra monitoring HCV area every year independently. In environmental protection, the company was managing HCV areas, including: o Demarcation of the HCV area with marking on the oil palm on the outer limit of the area KBKT using paint. o Protection HCV area by installing board that shows the function of region that have high conservation value, posting hunt prohibition, fish poison in the river, damaging flora in the HCV area, cultivate oil palm in the HCV area and restrictions to control weeds intensively in HCV area. o Rehabilitation and Enrichment of plant species in the HCV area trough growing plants that have the hydrological function, flora and fauna, social-economic and cultural, planted with cemplongan system and avoid the use of insecticide. o Social approach to disseminate the estate community and the surrounding community about the introduction of conservation values.

 Distance between mill and the settlement  At the time of the Mill Project in 1989, the only +/- 500m local population numbered only six families and Palm Oil Mill was built turned the

AUDIT REPORT Feedback of the organisation Comment from the government Date Stakeholder Observation Feedback / Comment of the organisation based on communication on based on communication on 25 November 2015 25 November 2015 settlements so that the local community are not affected directly. In addition, PT. Serikat Putra has conducted routine environmental monitoring in cooperation with third party and the results are reported to BLH six monthly reporting of RKL-RPL. Environmental monitoring consists of monitoring of river water quality, quality of Mill effluent, ground water quality, soil quality in the LA area, and ambient air quality. According the results of environmental monitoring, the operational activities of the POM were still below the threshold. It was not environmental pollution.

 Status of land ownership PT Serikat Putra  Licensing of PT Serikat Putra already trace o Permit of PT Serikat Putra was  Agency of BPMP2T (Badan was not clear which area was under and clear. Licensing initiated in 1986 in chorological and clear. Penanaman Modal dan coverage of the company and which one before the company operating until the Permits have been processes Pelayanan Perizinan Terpadu): was under communities. There were some acquisition of HGU in 2000. In the process, since 1986 before the PT Serikat Putra has fulfil the area was not cleared under the HGU (land the community was involved in the process organisation operated until rule inline with IMB and HO. permit) of land compensation. HGU obtained in 2000. The The organisation has had their Land ownership in accordance with a process involved communities permits Sialang permit issued by a government instance in land acquisition  DPRD Kab. Pelalawan: Bungkuk (BPN). BPN permits issued in the form of It was expected that PT Serikat Village SK.HGU No. Putra complies with legal and District 94/HGU/BPN/99.tgl12/10/1999, covering other requirements in Bandar an area of 12474.10 hectares consists of operational activities and can

Petalangan the release of total forest area of 9,330 increase level of living standard hectares and non forest area covering of communities around the 3,144 hectares. organisation. It was described in the Land B checking Local government has to No.06/RSL/HGU/1990 and No.31 / evaluate all permits of PT RSL/HGU/1991. Serikat Putra and ensure that

 The company never care about the  Companies care about the surrounding environment surrounding villages. villages environment, it was evidenced by the assistance given by the company to the public in the form of CD / CSR.

o Based on AMDAL, there were  Company never conserved natural  Related to environmental protection, PT. four rivers, Sungai Kerumutan,  Agency of Environmental: resources. Even companies even did not Serikat Putra have done the identification Sungai Trajan, Sungai o Basically the organisation leave the protected forest more over they and analysis of the presence of High Terbangiang and Sungai has managed their cleared the rivers and planted oil palm Conservation Value (HCV) in plantation Susupan. The river stream was environment although entirely, even in the grave yard. area of PT. Serikat Putra in cooperation confessed as tributary several items needed with the Faculty of Forestry IPB on 2011 changes. BLH suggested and PT. Serikat Putra monitoring HCV streaming along the organisation. Wide of tributary reviewing preliminary area every year independently. In condition and current environmental protection, the company was 2 - 4 meter and determined as HCV area. The organisation condition. The changes was managing HCV areas, including: need properly managed o Demarcation of the HCV area with has managed HCV area by marking HCV boundary when o BLH will inventory and marking on the oil palm on the outer identify 47 tributary limit of the area KBKT using paint. during replanting the area should not be planted by oil referred by communities. o Protection HCV area by installing When revitalisation is board that shows the function of palm and enrichment plant species. needed, it will be region that have high conservation informed to the value, posting hunt prohibition, fish organisation. poison in the river, damaging flora in o PT Serikat Putra did not the HCV area, cultivate oil palm in the pollute, the organisation HCV area and restrictions to control did not discharge waste weeds intensively in HCV area. water to river due they o Rehabilitation and Enrichment of have land application. plant species in the HCV area trough growing plants that have the

hydrological function, flora and fauna,

social-economic and cultural, planted

with cemplongan system and avoid

the use of insecticide.

AUDIT REPORT Feedback of the organisation Comment from the government Date Stakeholder Observation Feedback / Comment of the organisation based on communication on based on communication on 25 November 2015 25 November 2015 o Social approach to disseminate the estate community and the surrounding community about the introduction of conservation values. o Funeral in the area PT Serikat Putra which is the cultural heritage maintained by the company and serve as HCV

 PT Serikat Putra never makes partnership  KKPA did not existed because the  PT Serikat Putra was unlikely to KKPA and does not have public relations company got business license before the establish 20% smallholder due (HUMAS). issuance of government regulations that to the organisation was built describe the company’s core obligation to before 2007. In the previous make plasma. claim from one of communities, Companies ever gave a solution the the organisation used to give forming of partnerships gardens but the solution to form partnership process was plagued by land acquisition however at that time burning so that the partnership was not was occurred in the implemented. organisation and the partnership was cancelled. After that, partnership was re- proposed mediated by Bupati Pelalawan but the process was constrained by land acquisition therefore the partnership was not implemented.

 The company is only responsible to the  Company responsible towards employees organisation employee. is an obligation of company. It complies with applicable laws and regulations relating to employment. However, the

company care toward the community around of company that is the assistance

given by the company to the community

around of company.

AUDIT REPORT Feedback of the organisation Comment from the government Date Stakeholder Observation Feedback / Comment of the organisation based on communication on based on communication on 25 November 2015 25 November 2015  Communities around the company had  The company has always consulted with never been involved in decision-making. community leaders, village heads and local district to make a decision when carried out external activities, such as assistance CD / CSR (documentation attached). Moreover, in case of problems in the field,

the company will do a good approach to ninik mamak and community leaders for deliberation.

 Never established maintenance, especially  PT. Serikat Putra carry out the Routine  HGU included village road. If to roads that exist in the environment maintenance of village roads, even doing road was bituminous, it has to surrounding the company. the watering street. be excluded from HGU. It will cause problem with government, therefore the organisation was only road maintenance.

 Workers PT Serikat Putra already provides  The Company fulfil obligations to residential, religious facilities, health, employees in accordance with labour education, household services include legislation. electricity, water supply.

Kepala Desa  There is an honorarium for the village head  Related honorarium for the village head in Lubuk Raja, around the estate which was not around the gardens that are considered District reasonable Rp. 500,000 / month. unreasonable, we will evaluate for the next Bandar year. Petalangan  The youth community of Bandar  Assistance has been given by PT. Serikat Petalangan was supported last year by the Putra will be programmed as sustainability company after the youth and student program. CD/CSR Assistance community volatile (demonstration close documentation attached. access roads and factories.  The company has always consulted with  For villages only provide tractor for community leaders, village heads and local WORK ITEM: WI-860953 Doc ID: 3843 / Issue Date May, 2014 © SAI Global Limited Copyright 2008 - ABN 67 050 611 642 Page 201 of 211

AUDIT REPORT Feedback of the organisation Comment from the government Date Stakeholder Observation Feedback / Comment of the organisation based on communication on based on communication on 25 November 2015 25 November 2015 scrapping. district to make a decision when carried out external activities, such as assistance CD / CSR.

 In our opinion the participation of decision-  Moreover, in case of problems in the field, making is still very poor. Organisation does the company will do a good approach to not aware about the decision. ninik mamak and community leaders for deliberation.

 Cooperation between the company and  Implementation of these activities have  CSR was distributed to 15  Agency of Environmental: Sialang Kayu Batu village until now was been carried out in accordance with the villages around the CSR has to synchronised with good such as village road maintenance, company's program and will be evaluated organisation. Until October program of local government so the company has always helped the for the implementation of the next 2015, the organisation has that not overlap with program of Village head village, the company distributed a CSR to programs spent Rp 1.9 billion, covering: local government Sialang Kayu the village. health, education, religious, Batu,District infrastructure, youth, safety, etc. Bunut  To the company PT Serikat Putra we  The Company will evaluate and would also expect that the company toward accommodate it the village Sialang Kayu Batu was repaired so that people of Pondok II more easily to access the village.

 The village can borrow heavy equipment  The company has been running +/- 2 x year. maintenance programmed of village road twice a year. proposal of Red Balam Village for borrowing tools will be accommodated for the next activity Balam Merah

Village  Get help sacrificial cattle 1 tail in 1 year.  From the year 1999-2015 PT. Serikat

Putra always provide assistance to communities around the sacrificial cow as much as 1 tail per village during religious celebrations as a form of corporate concern to the community. Proof of submission is attached

AUDIT REPORT Feedback of the organisation Comment from the government Date Stakeholder Observation Feedback / Comment of the organisation based on communication on based on communication on 25 November 2015 25 November 2015  Distribution of Funds CSR every village  Every year PT. Serikat Putra routinely  CSR was distributed to 15  Agency of Environmental: should be clear, how much a village could provide the assistance of CD / CSR into villages around the CSR has to synchronised with receive in a year. the community around. Assistance was organisation. Until October program of local government so provided by the company not only in the 2015, the organisation has that not overlap with program of form of grant in aid but physical spent Rp 1.9 billion, covering: local government assistance. health, education, religious, infrastructure, youth, safety, etc.

 The company did not receive local labour until now  It is not true; the company has absorbed  The organisation has already  Agency of Environmental: labour from the local community as an employeed 94 workers placed The organisation has to give a employee in the company. in Lubuk Raja Estate 34 change to communities to workers, Bukit Raja Estate 30 The data on 2015, local employment improve the level of economy reached 94 workers, with details: Lubuk workers and Lubuk Raja not only working with the Raja Estate 34, Bukit Raja Estate 30 Factory 27 workers. organisation, it can be also people and Lubuk Raja Mill 27 people. In conducted by business the future, If there is a need of worker will opportunity or cooperation with be communicated to local governments in the organisation the form of job vacancy announcements.  Hope for partnership with Balam Merah Village such as KKPA.  The Company has been cooperating with  PT Serikat Putra was unlikely to the villages located around the area of establish 20% smallholder due operations of PT. Serikat Putra. However, to the organisation was built the cooperation has not open oil palm before 2007. In the previous plantation of communities with adopted claim from one of communities, Pola Bapak Angkat. the organisation used to give The program proposal will be identified in solution to form partnership order to be proposed in the next program however at that time burning

was occurred in the organisation and the partnership was cancelled. After that, partnership was re- proposed mediated by Bupati Pelalawan but the process was constrained by land acquisition

AUDIT REPORT Feedback of the organisation Comment from the government Date Stakeholder Observation Feedback / Comment of the organisation based on communication on based on communication on 25 November 2015 25 November 2015 therefore the partnership was not implemented.  In general, the District Bandar Desa  This is not true because the stall area Tambun Petalangan in particular has not away from the operational area of PT received special attention from Company, Serikat Putra. one of the company's land holdings due to the environment is in the midst of society while the majority of the Right to cultivate

(HGU) companies are some of the rights of

the community.  Agency of Environmental:  Related to environmental protection, PT.  Then in terms of environmental protection o Based on AMDAL, there were o Basically the organisation Serikat Putra have done the identification companies to public, companies also do four rivers, Sungai Kerumutan, has managed their and analysis of the presence of High not meet the criteria, one example is the Sungai Trajan, Sungai environment although Conservation Value (HCV) in plantation planting of plantation-lane riverside around Terbangiang and Sungai several items needed area of PT. Serikat Putra in cooperation the communities. Susupan. The river stream was changes. BLH suggested with the Faculty of Forestry IPB on 2011  So is the conservation of natural resources confessed as tributary reviewing preliminary Tambun and PT. Serikat Putra monitoring HCV and biodiversity have not been maintained streaming along the condition and current Village, area every year independently. In as much as possible and protected animals organisation. Wide of tributary condition. The changes environmental protection, the company District that have not been maintained. was 2 - 4 meter and determined need properly managed was managing HCV areas, including: Bandar as HCV area. The organisation o BLH will inventory and o Demarcation of the HCV area with has managed HCV area by identify 47 tributary Petalangan marking on the oil palm on the outer marking HCV boundary when referred by communities. limit of the area KBKT using paint. during replanting the area When revitalisation is o Protection HCV area by installing should not be planted by oil needed, it will be board that shows the function of palm and enrichment plant informed to the region that have high conservation species. organisation. value, posting hunt prohibition, fish o PT Serikat Putra did not poison in the river, damaging flora in pollute, the organisation the HCV area, cultivate oil palm in the did not discharge waste HCV area and restrictions to control water to river due they weeds intensively in HCV area. have land application. o Rehabilitation and Enrichment of

plant species in the HCV area trough

growing plants that have the

hydrological function, flora and fauna,

AUDIT REPORT Feedback of the organisation Comment from the government Date Stakeholder Observation Feedback / Comment of the organisation based on communication on based on communication on 25 November 2015 25 November 2015 social-economic and cultural, planted with cemplongan system and avoid the use of insecticide. o Social approach to disseminate the estate community and the surrounding community about the introduction of conservation values.  Agency of Environmental:  While compliance with laws and  PT. Serikat Putra has conducted routine o Basically the organisation regulations has not done well is one environmental monitoring in cooperation o Based on AMDAL, there were has managed their example of air pollution that from factories with third party and the results are reported four rivers, Sungai Kerumutan, environment although and industrial waste that has not been to BLH six monthly Reporting of RKL-RPL. Sungai Trajan, Sungai several items needed resolved properly. Environmental monitoring consists of Terbangiang and Sungai changes. BLH suggested monitoring of river water quality, quality of Susupan. The river stream was reviewing preliminary Mill effluent, ground water quality, soil confessed as tributary condition and current quality in the LA area, and ambient air streaming along the condition. The changes quality. According the results of organisation. Wide of tributary need properly managed environmental monitoring, the operational was 2 - 4 meter and determined o BLH will inventory and as HCV area. The organisation activities of the POM were still below the identify 47 tributary threshold. It was not environmental has managed HCV area by referred by communities. marking HCV boundary when pollution. When revitalisation is during replanting the area needed, it will be should not be planted by oil informed to the palm and enrichment plant organisation. species. o PT Serikat Putra did not pollute, the organisation did not discharge waste water to river due they have land application.

 For workers' responsibility to the  Local employment reached 94 workers,  The organisation has already  Agency of Environmental: individuals had not been undone by a well. with details: Lubuk Raja Estate 34, Bukit employeed 94 workers placed The organisation has to give a One was the lack of concern for people in Raja Estate 30 people and Lubuk Raja Mill in Lubuk Raja Estate 34 change to communities to search of employment. 27 people. In the future, If there is a need workers, Bukit Raja Estate 30 improve the level of economy of worker will be communicated to local workers and Lubuk Raja not only working with the WORK ITEM: WI-860953 Doc ID: 3843 / Issue Date May, 2014 © SAI Global Limited Copyright 2008 - ABN 67 050 611 642 Page 205 of 211

AUDIT REPORT Feedback of the organisation Comment from the government Date Stakeholder Observation Feedback / Comment of the organisation based on communication on based on communication on 25 November 2015 25 November 2015 governments in the form of job vacancy Factory 27 workers. organisation, it can be also announcements. conducted by business opportunity or cooperation with  Participation in corporate decision-making the organisation is still considered weak because of the lack  Assistance has been given PT. Serikat of attention to the public. e.g. many people Putra as sustainability programs. in Desa Tambun that has not been helped Documentation of assistance CD / CSR by the company. While in the repair of attached. example Rehabilitation less attention to PT. Serikat Putra carry out routine public facilities one example of a service maintenance of village roads and even road. doing the watering street. Attached document. To help for the poor will be accommodated and we will evaluate for the next year.

Audit Report

Result of interview and working group discussion with workers, labour union and gender committee

Date Stakeholder Observation

Workers, as SKU has been employed for 15 years. Served as sprayers in Division 2, Work of Hours 7:00 to 14:00. Resting hours of 9:30 a.m. to 10:00. Friday at 7:00 to 12:00, Saturday Hours 7:00 to 14:00. Staying at the Housing Division 2 (5 Km from the central office). Facilities include a house (Semi Permanent), Bathroom, Room 2, electricity 2A. Monthly income, get a small payday on 15th day (Rp 100,000), Big Payday end of the month. (Rp 1,900,000). Amenities monthly, 15 Kg rice/month. Got milk per day. PPE provided (helmet, goggles, masks, gloves, uniform, shoes and glasses) are given for free, medical check up every 6 months. Salaries are in accordance UMP. Transfer of employees at work and no overtime and all have been registered BPJS.

Workers, the status of employees SKU already 15 years. Working as fertilizing worker division 3. Hours 7:00 to 14:00. Resting hours of 9:30 to 10:00 a.m. Not getting extra food. Staying at the housing in Division 3. Facilities: electricity, water, bathroom. If there Workers is damage in the house, according to a report to the foreman and assistant, proceed to the real handyman service. Facilities provided by organisation are elementary school, (fertilizing, 7/08/ junior high school, SMK Putra Mandiri. 2015 spraying, mill processing, Harvesters, the status of employees of SKU have been 6 years. As harvesters Division workshop) 3. Target is 50 FFB if more calculated premiums Rp 950/FFB. Do not know unions, staying in housing division 1. A premium of approximately Rp 1,500,000, great salary Rp 2,000,000. PPE given are helmets, goggles, gloves, shoes, Egrek, rickshaw, gancu, emery.

Sprayers. Division III. Live in housing 2. Work began in 2001 and started spraying 2002. Working hours 7:00 to 14:00. PPE given by organisation helmets, masks, gloves, Apron, uniform, shoes .Medical check up was done last in 2015.

Fertilization. Division III, live in housing 2. Working hours 7:00 to 14:00 if ill treatment of pain to the clinic Bukit Raja there are nurse Mrs. Nelly. If there are injuries that require more care was taken to a central clinic. There is a school bus to get out the estate.

One of the duties of receiving the complaint (if any) on sexual harassment. Until now Head of there has been no complaint from employees. 01/03 Gender /2016 Committee in Bukit Raja Estate As the representative of the Bukti Raja Estate Plantation Workers Union (SPP-BR). Was established on 23 January 2016 and has been listed on the Department of Labor 02/03 Treasurer and and Transmigration Pelalawan on 2 February 2016. No: 250 / DTKT-PEN / SP-SB / /2016 Secretary of 2016 / 04.Ini a new union, formerly Serikat Pekerja Pertanian & Perkebunan - SPSI Union starting in 2001-2016

Appendix “F” – Definition of, and action required with respect to audit findings:

RSPO Principle and Criteria:

Major Nonconformities occur when system is failing to meet a relevant compulsory indicator.

Minor Nonconformities occur when system is failing to meet other indicators.

Opportunity for Improvement is a documented statement, which may identify areas for improvement, but shall not make specific recommendation(s). Client may develop and implement solutions in order to add value to operations and management systems. SAI Global is not required to follow-up on this category of audit finding.

RSPO Supply Chain Certification System:

Major Nonconformities occur when system is failing to implement and/or maintain requirements of Supply Chain Certification System.

Action required: This category of findings requires SAI Global to issue a formal NCR; to receive and approve client’s proposed correction and corrective action plans; and formally verify the effective implementation of planned corrections and corrective action. When non-conformances rose after the certification, RSPO shall be informed of these non-conformances within 7 days since non-conformance rose. A maximum of one month is given to the certified client to satisfactorily address the non-conformances. The effectiveness of the action taken for the non-conformances shall be assessed before closing o ut the non-conformances. Should the non-conformances not be addressed within the one month maximum time frame, a suspension or withdrawal of the certificate and a full re-audit may be necessary. Where objective evidence indicates that there has been a demonstrable breakdown in the supply chain caused by the certified client’s action or inactions, and that palm oil product that has been or is about to be shipped is falsely identified as RSPO certified product immediate action needs to be taken by SAI Global, and the RSPO Supply Chain certification shall be suspended until such time that it has been addressed. The RSPO shall be notified within 24 hours of this occurrence and further impacts on relevant supply chain certifications.

Area of concern issued when there is an area of the system for which the client is required to investigate potential non- conformity.

Action required: SAI Global may require client to formulate preventive action plan for approval prior to next planned audit/certification decision or alternatively may follow up client’s preventive action at the next planned audit. Lack of client attention to such issues implies that a preventive action system is not working effectively.

ANNEXURE 1

AUDIT REPORT ANNEXURE 2

AUDIT REPORT

ANNEXURE 3