PUBLIC SUMMARY REPORT
INITIAL RSPO CERTIFICATION ASSESSMENT
KULIM (MALAYSIA) BERHAD
Report Author Charlie Ross – August 2008 [email protected] Tel: +61 417609026
BSi Management Systems Singapore Pte Ltd (Co. Reg. 1995 02096‐N) Malaysia Branch (Co.Reg. 9942MX) 460 Alexandra Road 9 Jalan 16/11 Off Jalan Damansara #08‐01/02 PSA Building 1005 Block B Level 10, Phileo Damansara 1 SINGAPORE 119963 46350 Petaling Jaya Tel +65 6270 0777 Selangor Darul Ehsan, MALAYSIA Fax +65 6270 2777 Tel +03 7662 3311/3322 www.bsi‐asia.com Fax +03 7662 3300 Soon Leong Chia: [email protected] Teo Chin Siong: [email protected]
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TABLE of CONTENTS Page No
SUMMARY ...... 1 LIST OF ABBREVIATIONS USED ...... 1 1.0 SCOPE OF CERTIFICATION ASSESSMENT ...... 1–6 1.1 National Interpretation Used ...... 1 1.2 Certification Scope ...... 1 1.3 Location and Maps ...... 1 1.4 Description of Supply Base ...... 1 1.5 Date of Plantings and Cycle ...... 6 1.6 Other Certifications Held ...... 6 1.7 Organisational Information/Contact Person ...... 6 1.8 Time Bound Plan for Other Management Units ...... 6 1.9 Area of Plantation ...... 6 1.10 Approximate Tonnages Certified ...... 6 1.11 Date Certificate Issued and Scope of Certificate ...... 6
2.0 ASSESSMENT PROCESS ...... 7–8 2.1 Certification Body ...... 7 2.2 Qualifications of Lead Assessor and Assessment Team ...... 7 2.3 Assessment Methodology, Programme, Site Visits ...... 7 2.4 Stakeholder Consultation and List of Stakeholders Contacted ...... 7 2.5 Date of Next Surveillance Visit ...... 8
3.0 ASSESSMENT FINDINGS ...... 8 – 20 3.1 Summary of Findings ...... 8 3.2 Detailed Identified Nonconformities, Corrective Actions and Auditor Conclusions ...... 17 3.3 Noteworthy Positive Components ...... 18 3.4 Issues Raised by Stakeholder and Findings with Respect to Each Issue ...... 19 3.5 Acknowledgement of Internal Responsibility and Formal Sign‐off of Assessment Findings ...... 20
LIST of TABLES 1 Mill GPS Locations ...... 1 2 Estates FFB Production ...... 1 3 Age Profile of Planted Palms ...... 6 4 Estates and Areas Planted ...... 6 5 Approximate Tonnages Certified ...... 6
LIST of FIGURES 1 Location Map ...... 2 2 HCV Areas near Kulim Estates ...... 3 3 HCV Areas near Sedenak and Sindora Mills and Estates ...... 4 4 HCV Areas near Tereh Mill and Estates ...... 5
LIST of PLATES 1 Well maintained Groundcover to control Soil Erosion...... 18 2 High Standard of Housing for Staff and Workers ...... 19 3 Crèche for Staff and Worker Children ...... 19
List of Appendices A RSPO Certificate Details B Certification Assessment Plan
Public Summary Report ‐ RSPO Certification Assessment – Sedenak, Sindora, Tereh Mills and Supply Base Page 1
SUMMARY supplied 66∙3% of the total FFB processed at the mills in 2007/08. The FFB production from Company owned The British Standards Institution (BSi) has conducted an Estates is listed in Table 2. assessment of Kulim (Malaysia) Berhad (Kulim) operations comprising 3 mills, supply base, support Table 2: Estates FFB Production 2007/08 services and infrastructure. BSi concludes that Kulim operations comply with the requirements of RSPO Estate FFB Production (t) Principles & Criteria: 2007 and MY NIWG Indicators and Guidance : 2008. Asam Bubok 9587 BSi recommends that Kulim be approved as a producer Sindora 65855 of RSPO certified sustainable palm oil. Basir Ismail 52503 ABBREVIATIONS USED Ulu Tiram 18716 CPO Crude Palm Oil Sedenak 50696 EFB Empty Fruit Bunch FFB Fresh Fruit Bunch Rengam 43647 HCVs High Conservation Values Kuala Kabong 38969 MSDS Material Safety Data Sheet PCD Pollution Control Device REM/Pasak 24188 PK Palm Kernel Tereh Utara 40452 SOPs Standard Operating Procedures Tereh Selatan 31313 Selai 31810 1.0 SCOPE OF CERTIFICATION ASSESSMENT Enggang 31580 1.1 National Interpretation Used Mutiara 34402 The operations of the mills and their supply bases of FFB were assessed against the Malaysian National TOTAL 473718 Interpretation (MY NIWG : 2008) of the RSPO Principles and Criteria : 2007.
The Company managed Estates supplied 2∙6% of the FFB 1.2 Certification Scope processed at the mills in 2007/08. The RSPO P&C are being implemented at the managed Estates but they are The scope of certification includes the production from not yet ready for certification assessment and their three (3) palm oil mills that is sourced from thirteen (13) production is not included in the Certificate. Kulim aims company owned oil palm estates. to have the Company managed Estates certified during 2009. 1.3 Location and Maps The Kulim estates and mills are located in Johor State of The Outgrowers and Traders supplied 31∙1% of the FFB Peninsula Malaysia (Figure 1). Additional maps are processed at the mills in 2007/08. Kulim has held initial included (Figures 2,3 and 4) showing areas with HCVs discussions with the Outgrowers and Traders on RSPO adjacent to the estates. The GPS locations of the mills implementation. are shown in Table 1. Outgrowers and Traders were interviewed during the Table 1: Mill GPS Locations audit and were aware of the RSPO and had an understanding of Kulim’s requirements. The audit team concluded that the Outgrowers and Traders were at an MILL EASTING NORTHING early stage of RSPO implementation and that additional work is required to provide training to them on RSPO Sedenak 103° 32' 17.9628" 1° 43'51.0888" implementation. The FFB production from the Outgrowers and Traders has not been included in the Sindora 103° 27' 44.316" 1° 59' 7.3392" Certificate.
Tereh 103° 21' 5.0004" 2° 13' 3.0648" Kulim has stated its commitment to work with the Outgrowers and Traders on the implementation of the RSPO P&C with the aim of achieving certification for 1.4 Description of Supply Base their production within 3 years from the date of initial certification. The supply base consists of FFB from (i) Company owned Estates; (ii) Company managed Estates and (iii) Outgrowers and Traders. The Company owned Estates
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Figure 1: Location Map
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Figure 2: HCV Areas near Kulim Estates
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Figure 3: HCV Areas near Sedenak and Sindora Mills and
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Figure 4: HCV Areas near Tereh Mill and Estates
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1.5 Date of Plantings and Cycle 1.9 Area of Plantation
The Company owned Estates were developed in 1947 The areas of planted palms at Company owned Estates and are in the second and third cycles. The age profile of at June 2008 are listed in Table 4. the planted palms is shown in Table 3.
Table 3: Age Profile of Planted Palms Table 4: Estates and Area Planted
Estate Mature (ha) Immature (ha) AGE (years) % of Planted Area Asam Bubok 615 – 0 – 4 21∙18 Sindora 2812∙50 483∙78 5 – 16 38∙42 Basir Ismail 2248∙73 485∙48 17 – 23 27∙66 24+ 12∙74 Ulu Tiram 724∙00 – Sedenak 2109∙93 570∙62 Rengam 1848∙40 521∙16 1.6 Other Certifications Held Kuala Kabong 1642∙65 – REM/Pasak 2416∙95 – Kulim holds the following Certifications: Tereh Utara 1951∙85 926∙10 ISO 14001: 2004 Sindora Mill, Sindora Estate Tereh Selatan 1584∙49 1004∙48 Selai 1313∙71 398∙46 ISO 9001: 2000 Enggang 1238∙90 455∙30 Sedenak Mill, Sindora Mill, Tereh Mill Mutiara 2283∙60 – TOTAL 22175∙71 4845∙38 1.7 Organisational Information / Contact Person
Kulim (Malaysia) Berhad 1.10 Approximate Tonnages Certified Ulu Tiram Estate KB 705, The approximate tonnages certified on the basis of Johor Bahru 2007/08 production from Kulim Owned Estates are Johor 80990 Malaysia detailed in Table 5. NB: The production from Company Contact Person: Dr Simon Lord managed Estates, Outgrowers and Traders is excluded Director of Sustainability from the Certificate. Phone: +607 8611611 Fax: +607 8631084 Email: [email protected] Table 5: Approximate Tonnages Certified
1.8 Time Bound Plan for Other Management Units MILL CPO PK Sedenak 44059 11415 Kulim holds an interest in New Britain Palm Oil Ltd that the RSPO has recently approved for Certification. Kulim Sindora 13568 4382 also holds an interest as the managing agent in 3 mills Tereh 31287 9146 and 11 estates in West Malaysia. Kulim has submitted to BSi a Time Bound Plan to achieve RSPO Certification for TOTAL 88914 24943 these managed mills and estates during 2009.
On the basis of information provided by Kulim and that collected at the time of the audit, the Audit Team has 1.11 Date Certificate Issued and Scope of Certificate concluded that there are no significant land conflicts, no replacement of primary forest or any area containing Scope of the Certificate is for the production from the HCVs since November 2005, no labour disputes that are three palm oil mills and their supply base from company not being resolved through an agreed process and no owned estates. Certificate details are included as evidence of noncompliance with the law at any of the Appendix A. noncertified holdings. The Certificate issue date will be the date of the RSPO BSi has reviewed Kulim’s Time Bound Plan and considers approval of the Assessment Report. this to conform to the RSPO requirements for partial certification.
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2.0 ASSESSMENT PROCESS oil palm plantation companies (total of 49 audit days) against the RSPO P&C in Indonesia and Malaysia. 2.1 Certification Body
BSI Management Systems Singapore Pte Ltd Robyn Ross has a background in company administration 460 Alexandra Road and supporting women with mental health and physical #08–01/02 PSA Building disabilities by assisting them to develop skills for living Singapore 119963 independently in the community. She has assisted with fieldwork in conducting environmental and social Product Manager: Mr Soon Leong Chia assessments of oil palm projects over the past 5 years in Phone: +65 6270 0777 Ext 115 Indonesia and Nigeria. She has completed auditor Fax: +65 6270 2777 training in SA8000 Social Accountability. She has Email: [email protected] assisted with conducting audits of oil palm plantation companies (total of 105 audit days) against the RSPO BSi is a leading global provider of management systems P&C in Indonesia, Malaysia and Papua New Guinea. assessment and certification, with more than 60,000 certified locations and clients in over 100 countries. BSi Standards is the UK’s National Standards Body. BSi 2.3 Assessment Methodology, Programme, Site Management Systems provides independent, third‐party Visits certification of management systems. BSi has a Regional Office in Singapore and a Branch Office in Kuala Lumpur. The assessment was conducted in 2 stages. Stage I was conducted between 05 and 14 September 2007 against the RSPO MY NIWG Indicators : Version 2. The scope of 2.2 Qualifications of the Lead Assessor and the Stage I audit included estates, mills and support Assessment Team infrastructure. Stage II was conducted between 14 and 24 July 2008. BSi Management Systems Singapore holds copies of The Assessment Plan is included as Appendix B. educational qualifications, certificates and audit logs for each of the audit team members. BSi has evaluated the The approach was to audit the 3 mills together with 4 qualifications and experience of each audit team estates chosen from their supply base, such that a range member and has registered the following designations of environmental and social factors were covered. These for conducting RSPO Assessments. factors included consideration of topography, soils, age of palms and proximity to local communities and areas Charlie Ross – Lead Assessor with HCVs. B.App.Sc. M.Sc (Env.Studies) The methodology for collection of objective evidence Lead Auditor EMS RABQSA Cert No 012364 included physical site inspections, observation of tasks Iman Nawireja – Social Assessor and processes, interview of staff, workers and their B.Ag.Sc. M.Sc. (Comm) families and external stakeholders, review of Robyn Ross – Social Assessor documentation and monitoring data. Checklists and questionnaires were used to guide the collection of Charlie Ross is an independent environmental auditor information. who has extensive fieldwork experience in conducting environmental and social assessments of oil palm The assessment was based on random samples and projects over the past 16 years in Indonesia, Malaysia, therefore nonconformities may exist which have not Nigeria, Papua New Guinea and Solomon Islands. He has been identified. completed lead auditor training in ISO 9001 Quality Mr Allan Thomas, BSi Lead Auditor EMS, QMS and Management Systems, lead auditor training in OSHAS OHSAS has reviewed this report for conformance with 18001 Occupational Health and Safety Assurance RSPO Certification System requirements and technical Systems, auditor training in SA8000 Social Accountability content. and auditor training in RSPO P&C. He has been involved in the RSPO process since RT1 and has conducted audits Mr Soon Leong Chia, BSi Product Manager RSPO, has of oil palm plantation companies (total of 125 audit reviewed this report for conformance with the RSPO days) against the RSPO P&C in Indonesia, Malaysia and Certification System requirements. PNG.
Iman Nawireja has a background in the socio‐economic 2.4 Stakeholder Consultation and List of aspects of agriculture, and has assisted with field studies Stakeholders Contacted on the effect of resource development projects on Stakeholder consultation involved external and internal farmer and community incomes, health status and stakeholders. External stakeholders were notified by household division of labour. He has completed training placing an invitation to comment on the RSPO and BSi as an ISO 14001 Lead Auditor. He has assisted in websites. Letters were written to individual conducting environmental and social assessments of 8 stakeholders and telephone calls were made to arrange oil palm projects (total of 95 consulting days) during the meetings and to discuss Kulim’s environmental and past 5 years. He has assisted with conducting audits of social performance.
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BSi did not receive any responses in writing from WWF Malaysia stakeholders in relation to Kulim. Meetings were held NUPW Kluang Branch with stakeholders to seek their views on the NUPW Union Leaders performance of the company with respect to the RSPO requirements and aspects where they considered that improvements could be made. Stakeholders included 2.5 Date of Next Surveillance Visit those immediately linked with the operation of the company such as employees, out growers and The next surveillance visit is planned for August 2009. contractors, as well as organisations that may have an interest in Kulim’s operations or adjacent areas.
3.0 ASSESSMENT FINDINGS Stakeholder consultation took place in the form of meetings, interviews and discussion by telephone. The 3.1 Summary of Findings interviewer explained the purpose of the audit at the outset followed by an evaluation of the relationship between the stakeholder and the company before As outlined in Section 2.3, objective evidence was discussions proceeded. The interviewer recorded obtained separately for each of the RSPO Indicators for comments made by stakeholders and these have been each of the three mills and each of the four estates. The incorporated into the assessment findings. results for each indicator from each of these operational areas have been aggregated to provide an assessment of Male and female workers and staff were interviewed at overall conformance of the Company’s operations with each of the four estates and the three mills. each Criterion. A statement is provided for each of the Fieldworkers were interviewed informally in small Major Compliance Indicators to support the finding of groups in the field. In addition, the wives of workers and the assessment team. staff were interviewed at the housing areas in informal group meetings. Three (3) Nonconformities were identified against Minor Compliance Indicators. Eleven (11) Observations / Opportunities for improvement were identified. Details List of Stakeholders Contacted of the Nonconformities are given in Section 3.2 (Page 17). Contractors
Road Maintenance Contractor Kulim has prepared a Corrective Active Plan that was Harvesting & FFB Transport Contractor reviewed and accepted by BSi. Transport Contractor Composting Contractor BSi has conducted an assessment of the Kulim Harvesting Contractor operations comprising 3 mills, oil palm estates, support Contractors Sindora Mill services and infrastructure. BSi concludes that Kulim Contractors Tereh Mill operations comply with the requirements of RSPO Principles & Criteria: 2007 and MY NIWG Indicators and Smallholders Guidance : 2008.
FFB Supplier – FELDA BSi recommends that Kulim be approved as a producer FFB Suppliers – Kampung Felda Ulu Belitong of RSPO Certified Sustainable Palm Oil.
Local Communities Criterion 1.1: Oil palm growers and millers provide Kampong Sedenak Melayu adequate information to other stakeholders on Ulu Belitong Residents environmental, social and legal issues relevant to RSPO Kampung Sri Kenangan: Teachers Ulu Belitong Criteria, in appropriate languages & forms to allow for Elementary Teachers, Tereh effective participation in decision making. Kulim has prepared “Communication and Consultation Management Guidelines” that define the responsibilities Government Departments and actions required for receiving, recording and Labour Department, Johor responding to enquiries and requests from internal and Department of Environment, Johor external stakeholders. Each estate and mill maintains an Department of Forestry, Johor “Enquiry Register Book“ for recording verbal and written Department Occupational Safety & Health communications. Inspections of records showed that Department of Wildlife & National Parks, Johor written requests are held on file together with Kulim’s response (1.1.1). The registers were commenced in mid 2007 and local managers had replied to requests within NGOs and Others 14 days. Malaysia Nature Society, Johor Branch Malaysian CropLife & Public Health Association Criterion 1.2: Management documents are publicly Wildlife Conservation Society Malaysia available, except where this is prevented by commercial
Prepared by BSi Management Systems Singapore Pte Ltd for Kulim (Malaysia) Berhad Public Summary Report – RSPO Certification Assessment – Sedenak, Sindora, Tereh Mills and Supply Base Page 9 confidentiality or where disclosure of information Kulim has commenced a program (to be checked at would result in negative environmental or social surveillance audit) of surveying the boundaries of all of outcomes. its properties and installing boundary stones. Inspections at each of the estates audited confirmed Kulim holds copies of each of the 7 management boundary stones are clearly marked and maintained. documents that are required to be publicly available. Each of these documents was inspected during the audit There are currently no Land disputes at the Kulim and details noted of the issue date and version. Kulim estates. Kulim has resolved three cases since 2006. Two policy is to make these available upon request. cases involved encroachment by other oil palm companies onto Kulim estate land. The boundaries were In addition, Kulim has prepared a “Sustainability resurveyed and negotiation between parties reached Handbook” June 2007 that details the company’s agreement on the resurveyed boundaries. The third environmental and social policies and grievance case involved overplanting at Mutiara Estate onto procedure. Copies of the handbook are available on adjacent State land. The boundary was resurveyed and request. the overplanted land was returned to the State.
Inspection of correspondence records confirmed the Criterion 2.1 – There is compliance with all applicable disputes have been resolved. local, national and ratified international laws and regulations. Criterion 2.3 – Use of the land for oil palm does not Inspection of records and Department of Environment diminish the legal rights of other users without their site visit reports confirmed each of the mills met free, prior and informed consent. environmental licence requirements. Monitoring Kulim operations are on either “Freehold Land” or “State records show BOD well within the land application limit Leases”. The land is not encumbered by Customary for all of the previous 12 months at each mill. Emission Rights (2.3.1). The right to use the land is not disputed. monitoring and continuous smoke opacity Where previous disputes have occurred, Kulim holds measurements met compliance requirements at each detailed maps prepared by an independent surveyor mill for the previous 12 months. (2.3.2). Department of Occupational Safety and Health site visit reports for each of the mills and estates show no Criterion 3.1: There is an implemented management outstanding issues. Kulim has implemented systematic plan that aims to achieve long‐term economic and safety audits by the Group Safety Officer that include financial viability. checks of currency of drivers and operators licenses for Kulim has an annual budget that is projected for 5 years mobile plant and equipment. Kulim’s Sustainability (3.1.1). The projections include forecasts of FFB Team carries out internal RSPO surveillance audits (most yields/ha and oil extraction rates for each of the mills. recent May 2008) that include checks of legal Kulim has implemented a management system for compliance with licences and regulations. monitoring and reporting of performance against Kulim provides a good standard housing for staff and production targets for achieving long‐term economic workers that meets housing regulations as noted for and financial viability. Production and performance are Criterion 6.5 (Page 18). Water supplied to housing from reported monthly to Kulim senior management. A long the government reticulated supply and from Kulim water term planting plan, which is updated yearly (most recent treatment plants was within the potable water quality update 2008), gives details of the replanting program at limits. Kulim advised there are no litigations against the each estate. oil palm estates and mills (2.1.1). Criterion 4.1: Operating procedures are appropriately Kulim has developed a Sustainability Program Legal documented and consistently implemented and Register that lists all of the applicable legislation and monitored. licences and was communicated to the operating units in February 2008. Kulim’s Sustainability Team updates the The Kulim Agriculture Manual has been updated with Register centrally and any changes are disseminated to best practices and was re‐issued in December 2007. The operating units. Each of the three mills and the four Kulim Agriculture Manual has detailed SOPs for growing estates held a copy of the current issue of the Legal oil palm from nursery through to mature palms, Register and applicable licenses were displayed. including upkeep and harvesting. Inspection confirmed each of the four estates held the current issue of the Criterion 2.2 – The right to use the land can be Kulim Agricultural Manual on site. In addition, Work demonstrated and is not legitimately contested by local Instructions in Bahasa Malaysia have been prepared for communities with demonstrable rights. land fill management, bulk fuel tank and refuelling, pesticide store, diesel engine management, linesite, Kulim operations are on either “Freehold Land” or “State lubricant and fuel store, effluent sampling, sediment and Leases”. Details of Land Titles and summary of lease oil interceptors, materials and waste, water catchment history are held in file "Grant Title" on the SPO Server. and treatment plant, scheduled waste, non‐scheduled Kulim Property Department holds a hard copy of land waste and fertiliser application (4.1.1). titles (2.2.1). Only oil palm is grown on the land, which is consistent with the titles and lease conditions (2.2.2). Kulim has a system comprising several levels of regular inspections and reporting of information on operational
Prepared by BSi Management Systems Singapore Pte Ltd for Kulim (Malaysia) Berhad Public Summary Report – RSPO Certification Assessment – Sedenak, Sindora, Tereh Mills and Supply Base Page 10 performance in relation to standards. A Regional bunds are constructed on terraces for controlling water Controller carries out independent checks and a flow and to promote infiltration. Field inspection of a Plantation Inspector carries out checks every two range of topography, including terraced land, confirmed months on estate operations. Each estate held a copy of consistent implementation of soil conservation practices. the Plantation Inspector’s report, together with The weed spraying programme has been changed since recommendations and actions taken by the estate. November 2007 by ceasing the use of Mist Blowers and Inspection of field conditions and observation of a range implementing selective weeding using Knapsack of tasks during the audit confirmed that SOPs and Work Sprayers. A more recent change has been confining the Instructions were being implemented consistently. use of glyphosate to the spraying of palm circles only, in order to encourage regeneration of soft grasses and SOPs for each mill are documented in the respective Mill improve groundcover. Quality Management Manual (4.1.1). Work Instructions, including the emergency shut‐down of equipment, were Roto slashing is used to maintain harvesting paths that displayed at each work station. are accessible by tractor. An additional measure is to limit vehicular traffic within palms to fertiliser spreading Mill Operators carry out hourly checks and record and roto slashing. Field inspection confirmed that operating parameters on the logsheet at each work groundcover vegetation has improved markedly since station together with any comments on abnormal the Stage I Audit in September 2007. operation. Mill Engineers carry out checks in relation to Shift Supervisor reports and the Mill Manager follows up Each estate has a road maintenance program with a on action on “Maintenance Report Log Book”. Internal schedule for cleaning of roadside drains and silt traps ISO 9001 Audits are carried out six monthly plus and grading of road surfaces. independent annual audits by the Certification Body. Peat soils occur only at Kuala Kabong Estate where a Inspections during the audit confirmed work station water management programme has been implemented. logsheets and shift supervisor reports were filled out The estate carries out monitoring of water levels each consistently and accurately. Review of records of audits morning and afternoon at the network of 60 weirs and and corrective actions confirmed there were no data have been recorded since 2001. The height of weirs significant outstanding issues. Observation of tasks and is adjusted daily, depending upon rainfall and water inspections during the audit of the mill confirmed that flow, to achieve the target 60cm water level relative to Work Instructions and SOPs were consistently the ground surface. On an annual basis, the ground level implemented. is measured relative to each weir and the height of the weir is adjusted to maintain water level at 60cm relative Criterion 4.2: Practices maintain soil fertility at, or to the ground level. where possible improve soil fertility, to a level that The are no sandy, low organic matter or acid sulphate ensures optimal and sustained yield. soils at the Kulim estates. Field inspection confirmed Kulim Agronomy Section of the R&D Department makes that groundcover vegetation generally is well maintained two visits per year to each Estate and checks fertiliser in order to reduce the erosion risk of soils. application as well as other field practices. The Agronomy Section collects annual foliar samples, Criterion 4.4: Practices maintain the quality and one per block, for analysis of macro‐nutrients and some availability of surface and groundwater trace elements, eg boron. Data are input to a GIS Kulim has developed a water management plan for the Database and analysed for optimisation of FFB yield and estates and mills. The Kulim Agriculture Manual Section review of the fertiliser programme. Soil samples (2 per A17 “Protection of Water Courses” provides guidance on block) are collected five yearly and data are entered to implementation of buffer zones relative to the width of the GIS database. stream or drain. Each estate has a program for Agronomy Section also collects data on the locations reinstatement of riparian buffer zones prior to the time where EFB and mill effluent are applied. These areas are of palm replanting (4.4.1). Field inspection confirmed inspected twice yearly and Agronomy advises on the reinstatement of riparian buffer strips is being fertiliser programme for the subsequent year implemented. In order to prevent the discharge off site of suspended Criterion 4.3: Practices minimise and control erosion contaminants such as oil and sediment, Kulim has and degradation of soils. installed pollution control devices on all drains at mills The soil conservation practices implemented include and the maintenance workshops and vehicle wash‐down maintenance of groundcover vegetation, box stacking of bays at estates. Inspection during the audit confirmed pruned fronds, planting of Guatemala and Vetiver the pollution control devices are checked and cleaned grasses in erosion prone areas, eg stream banks, regularly. Kulim has applied these water quality channelling of water from road‐side drains into the protection practices uniformly across all of its palms. Mucuna bracteata is planted immediately operations. following replanting of palms to establish groundcover. Treated mill effluent is not discharged off‐site but Terraces and platforms are used on sloping areas. Stop approximately 40% is used as an ingredient for compost
Prepared by BSi Management Systems Singapore Pte Ltd for Kulim (Malaysia) Berhad Public Summary Report – RSPO Certification Assessment – Sedenak, Sindora, Tereh Mills and Supply Base Page 11 and the remainder is applied to the palms for recycling information available since 2002. However the overall of nutrients. At Sedenak Mill, the area for land data show no clear trend with substantial variations in application of treated effluent has been doubled during usage due to factors such as seasonal differences and the past twelve months to minimise the risk of seepage the replanting program. from entering waterways. Criterion 4.6: Agrochemicals are used in a way that Inspection confirmed that bunds and weirs have not does not endanger health or the environment. There is been built across the main rivers flowing through the no prophylactic use of pesticides, except in specific estates (4.4.2). Kulim has implemented a program of situations identified in national Best Practice monitoring water quality of streams flowing through the guidelines. Where agrochemicals are used that are estates that involves collecting upstream and categorised as World Health Organisation Type 1A or downstream samples (4.4.3). The sampling frequency 1B, or are listed by the Stockholm or Rotterdam has been set in relation to the potential risk to the Conventions, growers are actively seeing to identify environment and is more frequent at mills than at the alternatives and this is documented. estates. The Kulim Agricultural Manual – Section H – provides Each of the estates measures daily rainfall and the justification of the use of chemicals in relation to information is used for planning work programmes such particular field conditions, such as for controlling as fertiliser application and spraying. individual species of weeds (4.6.1). Each mill has measured water consumption since meters Estate staff inspect field conditions prior to spraying and were installed in early 2007 and the information is advise the Mandore on the spray treatment required reported monthly against targets. The mills have who then prepares a requisition for issue of chemicals achieved between 20 and 30% reduction of consumption using the “Store Issue Note”. This is a controlled process over the past year by repairing all leaking valves and requiring the Assistant Manager to endorse, Storekeeper pipes and changing work practices related to the use of to issue and verify and Manager to approve. water, such as for cleaning of mill floors. A check of all chemicals at the Pesticide Stores showed Inspection of the Sindora Mill effluent treatment system that Kulim held only those on the “Approved List of found that there was inadequate freeboard at one pond Pesticides Registered for Oil Palm (WEF April 2007)” as where part of the embankment had been excavated advised in MPOA Circular 29 October 2007. Observation during installation of a transfer pump (4.4.6). of spraymix preparation and spraying in the field at each A nonconformity was raised against minor compliance estate confirmed measurements are made accurately indicator (4.4.6) as there was a risk of overflow of the and chemicals are used in accordance with product label embankment and discharge off‐site into a protected requirements (4.6.2). catchment immediately downstream. Kulim has purpose built pesticides stores. Inspection at
each estate confirmed the stores are secure, clearly Criterion 4.5: Pests, diseases, weeds and invasive signed and are well maintained with good separation of introduced species are effectively managed using chemicals, labelling, spill containment, provision of PPE, appropriate integrated Pest Management (IPM) water available for washing and a high standard of techniques. housekeeping. Inspection confirmed all stores meet the Kulim’s Agricultural Manual–Section J provides detailed requirements of the Acts and Regulations (4.6.3). information on Integrated Pest Management including Inspection of the chemical stores showed the the IPM strategies for a range of palm pests. The IPM information on the product label of each chemical is in Program consists of monitoring of pest numbers and use Bahasa Malaysia. In addition, Kulim has extracted the of biological controls wherever possible. When precautionary measures from the MSDS for each additional treatment using chemicals is necessary, then chemical and translated into Bahasa Malaysia for display this is carried out in a controlled manner. For example, at the chemical store. The Work Instruction at the field conditions are inspected for weeds prior to spraying chemical mixing area is in Bahasa Malaysia, which is in order to identify the appropriate chemical and spray understood by local and Indonesian workers. Interview technique. Interview of Assistant Managers and of the storeman, mandore and sprayers confirmed their inspection of records confirmed the implementation of understanding of the precautions for the chemicals IPM practices. (4.6.4). Barn Owls (Tyto alba), have been introduced for control Medical screening of sprayers is carried out monthly at of the major pest, rats. The estates carry out a barn owl each of the clinics. An OSH registered medical census annually and Agronomy Section advises on the practitioner conducts annual medical surveillance of need to increase Barn Owl densities in relation to rat sprayers (4.6.5). damage data. The estates have introduced beneficial plants, such as Turnera subulata and Cassia cobanensis At each of the estates male workers were hired as for control of leaf‐eating insects. sprayers, except at Sindora where there were two female sprayers. The Hospital Assistant and Manager Kulim has compiled data from each estate on the confirmed the policy to transfer female sprayers to quantity of pesticides applied and the active ingredient of each chemical and calculated a toxicity budget with
Prepared by BSi Management Systems Singapore Pte Ltd for Kulim (Malaysia) Berhad Public Summary Report – RSPO Certification Assessment – Sedenak, Sindora, Tereh Mills and Supply Base Page 12 alternative duties when pregnancy was confirmed maintains records of sprayer training. Interviews of (4.6.6). sprayers and observations of tasks at each of the estates confirmed safe working practices were understood and The use of Class 1 chemicals is minimised and avoided product label precautions were implemented where possible by use of IPM techniques. Paraquat is consistently. restricted to use in palms <1 year old. A check of store issue records at the estates confirmed that paraquat was Kulim’s standard issue of PPE for all mill workers is safety used only at estates where recent ( Prepared by BSi Management Systems Singapore Pte Ltd for Kulim (Malaysia) Berhad Public Summary Report – RSPO Certification Assessment – Sedenak, Sindora, Tereh Mills and Supply Base Page 13 All Malaysian workers are covered by SOCSO habitats if any, that exist in the plantation or that could Government Compensation. Foreign workers are be affected by plantation or mill management, shall be covered by Foreign Workers Compensation identified and their conservation taken into account in Endorsement Schedule through Tokio Marine Insurans management plans and operations. (Malaysia Berhad). Inspection of records confirmed the Kulim engaged a consultant, Lewie Dekker, to carry out a policies were current at the time of the audit. rapid biodiversity survey (December 2007) at each of the estates (5.2.1). The survey included assessment of HCVs Criterion 4.8: All staff, workers, smallholders and within each estate as well as the immediate surrounding contractors are appropriately trained. area. At all estates, remnant vegetation has previously Engineering Dept identifies and coordinates external been logged and HCVs within the estates generally were training that is common to the group mills. The majority limited to riparian vegetation. There are areas with of local training is “On the Job” informal instruction. The HCVs near the estates. For example Mutiara Estate is Mill Training Programme for year 2008 includes a approximately 20 km to the west of a declared area schedule for OSH training in conjunction with SOPs for Endau‐Rompin National Park and wildlife from the both Staff and Workers. The estates have an Annual national park potentially could enter the estate. Training Programme that was prepared on the basis of The consultant also prepared a list of rare, threatened needs assessment for each task (4.8.1). Each mill and and endangered species of fauna that are found at or estate is responsible for maintaining records of external near the estates and documented a Biodiversity and internal training for staff and workers. Estate Management Plan specific to each estate and includes Hospital Assistants have received training in the immediate actions to be taken for fauna protection as chemicals used for control of palm pests. Kulim well as long term strategies for enhancing habitats conducts safety training for contractors and their (5.2.2). Inspections confirmed the immediate actions of employees. All new hires undergo training for their job. the management plan are being implemented. The estates and mills hold records of training for Immediate actions at Mutiara Estate have been the individual workers and staff. removal an electric fence around a boundary between swampy grassland and swamp forest. Longer term Criterion 5.1: Aspects of plantation and mill strategies include reinstatement of riparian buffer zones management, including replanting, that have within the estate at the time of replanting to form environmental impacts are identified and plans to wildlife corridors. mitigate the negative impacts and promote the positive ones are made, implemented and monitored to The consultant also recommended a program for demonstrate continuous improvement. establishing baseline information on habitats and wildlife. Kulim plans to engage the Malaysian Nature Kulim prepared an Environmental Aspects and Impacts Society, Johor Branch to conduct a migratory bird study. Register in 2007 that was based on a risk assessment This will be carried out as a follow‐up to the rapid process and considered the negative as well as beneficial biodiversity study and will provide a more detailed environmental aspects (5.1.1). The scope of the Register assessment through site visits to four estates identified includes the operational activities at all estates, mills and by Lewie Dekker. Kulim SPO Team has communicated support services and infrastructure. The Register was the rapid biodiversity assessment findings to each of the reviewed and updated in March 2008 to include estates and supported the implementation of the additional information from the biodiversity survey and “immediate actions”. stakeholders adjacent to the estates. Audit checks confirmed signboards prohibiting hunting Kulim has prepared an Environmental Improvement Plan have been posted at the estate entry, the housing (January 2008) by considering each of the significant compound and the estate boundaries. Security patrols impacts identified in the Aspects and Impacts Register have been increased to prevent hunters entering the and reviewing opportunities for improvement. The estates. Staff and workers have been made aware of Improvement Plan includes a work programme (updated wildlife protection requirements during muster briefings. 30 April 2008) with responsibility and target date for implementation at each of the estates and mills. Interview of workers, staff and security officers confirmed awareness of Kulim policy prohibiting the The progress with implementation of the Environmental taking or hunting of wildlife within and adjacent to the Improvement Plan was checked during the audit. For estates. In addition, Kulim has initiated the Wildlife example, at each of the estates and mills, pollution Defender Project in collaboration with Wildlife control devices have been fitted to all workshop drains Conservation Society (Malaysia). This Project will train and wash‐down bays for removal of sediment and oil security personnel as Wildlife Wardens. Kulim has from wash‐down water. These were found to be well prepared a list of Security personnel to be trained in designed and maintained. For the larger improvements October 2008 by the Society’s Enforcement Trainer and involving capital expenditure, progress was noted in Advisor (Asia). relation to budget, design and contractual arrangements. Criterion 5.3: Waste is reduced recycled, re‐used and disposed of in an environmentally and socially Criterion 5.2: The status of rare, threatened or responsible manner. endangered species and high conservation value Prepared by BSi Management Systems Singapore Pte Ltd for Kulim (Malaysia) Berhad Public Summary Report – RSPO Certification Assessment – Sedenak, Sindora, Tereh Mills and Supply Base Page 14 Kulim has identified all waste products in the Criterion 5.6: Plans to reduce pollution and emissions, Environmental Aspects and Impacts Register and has including greenhouse gases are developed, prepared an “Improvement Programme for the Control implemented and monitored. of Wastes” 3 September 2007. In addition, Kulim has Kulim’s Combined Improvement Plan (30 April 2008) prepared work instructions “Non‐scheduled Waste details the improvements to be carried out for reducing Management Guidelines” and “Scheduled Waste the impact of identified significant pollutants and Management Guidelines” 15 May 2007 for control of emissions (5.6.1). waste through minimisation, recycling and disposal (5.3.1). Operational controls are included in ISO 9001 QMS at each mill. Site specific pollution prevention measures Mills and estates have set up stores for non‐scheduled are included in the Environment Improvement Plan wastes that can be recycled and scheduled wastes for 2008. For example at Tereh Mill, firemen were recently collection by a licenced contractor. Records of wastes re‐trained to improve control of smoke emission from stored are held on “Bin Cards” and Manifest the boiler. In addition, Work Instructions have been Consignment Notes are held on file for scheduled wastes implemented for specific improvements eg WI27 to that have been collected by the contractor. Kulim’s reduce water consumption and discharge of wastewater. scheduled waste management and disposal meets Kulim has initiated a Clean Development Mechanism compliance with Regulatory requirements. (CDM) project at each of the mills for methane capture Kulim has implemented a program of segregation of from each of the effluent ponds for reduction of wastes at source into recyclables (plastic, glass, metal, greenhouse gases. paper), organic wastes for compost and non‐recyclables The Kulim Corporate Improvement Plan was prepared 1 for disposal. This program has reduced substantially the May 2007 following the Baseline Survey in March of that quantity of solid waste requiring disposal by landfill. year. This details the improvements to be made across Non‐scheduled solid wastes that are not recyclable are all departments to achieve RSPO implementation. A disposed in small sanitary landfills within the oil palm Combined Improvement Plan was prepared initially in estates. Inspections confirmed that these small landfills January 2008 and was reviewed 30 April 2008 to go are appropriately located, well managed and are beyond RSPO requirements. consistent with regulatory requirements. Inspection of monitoring records and reports to Crop residues recycled to the field include empty Department of Environment confirmed the mills meet bunches for compost with mill effluent. Treated mill compliance with the boiler gaseous emission limits and effluent that is excess to composting requirements is the effluent treatment meets water quality applied to the palms in accordance with DOE Licences requirements. Since the Baseline Survey in March 2007, for land application, using a furrow system. Records are the mills have achieved significant improvements in maintained of the quantities of mill effluent and other water quality discharged via monsoon drains. At crop residues transferred to the compost site. The Sedenak Mill, this has been achieved by improved quantity and quality of effluent recycled to the palms for segregation of wastewater and treatment via the land application also are recorded effluent pond system. Criterion 5.4: Efficiency of energy use and use of Peat soils occur only at Kuala Kabong Estate where an renewable energy is maximised. appropriate water management programme is implemented. Water levels of drains are carefully Renewable and non‐renewable energy use are controlled using a conventional system to monitor and monitored and reported per t FFB. At the mills, the maintain average water level below ground surface of operating hours for the boiler and steam turbine have 50‐70cm. The present conventional monitoring been extended for optimising the generation of programme does not provide a measure of peat electricity from palm fibre and nut shell fuel. subsidence rate. No data are held at the Estate on changes in peat surface level relative to a fixed datum Criterion 5.5: Use of fire for waste disposal and for for assessment of subsidence. The peat surface is preparing land for replanting is avoided except in measured relative to weir heights, but the weirs have specific situation, as identified in the ASEAN guidelines not been tied in by survey to a benchmark to enable or other regional best practice. assessment of changes in peat surface level. Kulim has implemented a zero burn policy. Inspections A nonconformity was issued against minor compliance of the estates confirmed no evidence of open burning indicator (5.6.3) because the existing monitoring does (5.5.1). In preparation for replanting, the old palms are not provide a measure of peat subsidence rate. felled, chipped and windrowed. This has been consistently implemented and was confirmed by Criterion 6.1: Aspects of plantation and mill inspection of replanted areas at Sindora and checks management, including replanting, that have social made of contracts for replanting. impacts are identified in a participatory way and plans Kulim has implemented a system for waste segregation to mitigate the negative impacts and promote the at source, recycling and disposal. Inspections of the positive ones are made, implemented and monitored, mills, estates and housing areas confirmed no evidence to demonstrate continuous improvement. of fire used for waste disposal. Prepared by BSi Management Systems Singapore Pte Ltd for Kulim (Malaysia) Berhad Public Summary Report – RSPO Certification Assessment – Sedenak, Sindora, Tereh Mills and Supply Base Page 15 Kulim has carried out a Social Impact Assessment of its Criterion 6.4: Any negotiations concerning operations and recorded the results in a Social Impact compensation for loss of legal or customary rights are Register (February 2008) that considers negative as well dealt with through a documented system that enables as beneficial aspects and impacts. Records are held for indigenous peoples, local communities and other each stakeholder meeting, including notes of the main stakeholders to express their views through their own points of discussion with internal and external representative institutions. stakeholders (6.1.1). Kulim follows the Land Acquisition Act 1960 (ACT 486), A consultative process was used to obtain information which details the acquisition, the assessment of from Staff, Workers and their dependants, Contractors compensation to be made on account of the acquisition and Local Communities. Participants signed an and any other matters incidental thereto (6.4.1). Attendance Sheet to confirm their participation. Kulim Kulim abides by any decision of the independent has retained copies of all stakeholder meeting Arbitrator and Assessor. The Act includes an Appeals attendance records together with notes of the Meeting and Grievance Procedure. Under the provisions of the Minutes. Act, the outcome of compensation determinations are Kulim has prepared a Social Improvement Plan for the publicly available. Group of estates and mills and has focused initially on common issues across all the operations. The Criterion 6.5: Pay and conditions for employees and for Improvement Plan includes target dates set by each employees of contractors always meet at least legal or management and was last updated 30 April 2008. industry minimum standards and are sufficient to Checks carried out during the audit confirmed progress provide decent living wages. with implementing the Social Improvement Plan. There is a collective Labour Agreement for both workers (NUPW) and staff (AMESU) and pay and conditions are Criterion 6.2: There are open and transparent methods documented (6.5.1). for communication and consultation between growers and/or millers, local communities and other affected or The majority of Kulim’s labour is recruited from interested parties. Indonesia. Foreign workers are members of the NUPW and have access to information on pay and conditions. Kulim has prepared “Communication and Consultation Interview of staff and workers confirmed knowledge of Management Guidelines” that were communicated to pay and entitlements. the Managers of all estates and mills on 7 July 2008 (6.2.1). The Guidelines provide local managers with Pay records at Sedenak and Tereh Mills showed hours of flexibility to use the form of communication that is overtime worked during the 2007 peak crop season appropriate for a range of situations that includes exceeded the Labour Department approval (120 workers, community leaders, civil society and hours/month). Kulim has identified excess overtime as government. The local Mill Manager and Estate an important social issue in the Social Impact Manager are responsible for communications with Assessment (SIA) (SR032) but it has not yet been internal and external stakeholders. addressed. The mill and estates operate autonomously and there presently is no system for checking the hours Kulim has prepared a general list of Stakeholders that of overtime worked in relation to the permitted monthly includes Government Agencies, Suppliers, Contractors, maximum. NGOs, Neighbouring Plantations, Independent Smallholders and Local Communities – updated 2 June Although a breach had not occurred in the 5 months 2008. Each estate and mill records communications, prior to the audit, a nonconformity was issued against together with the response, in a “Register of Enquiry”, minor compliance indicator (6.5.2) for failure to which was implemented mid 2007. implement controls to prevent exceedance of the Government approved overtime limit. Criterion 6.3: There is a mutually agreed and documented system for dealing with complaints and Foreign workers’ passports are withheld by the company grievances, which is implemented and accepted by all and a pass is issued to allow travel. Kulim is parties. implementing an Immigration Identity Card in conjunction with Immigration Department who has The grievance procedure and guidance are documented visited the estates and collected documentation and in “Kulim Sustainability Handbook”, June 2007 (6.3.1). photos of foreign workers. This initiative will enable Details of disputes, process and outcome are recorded in migrant workers to move freely outside of the estate or the “Grievance and Complaints Register” that is held at mill. each mill and estate. Workers receive free housing, clean water supply, free Inspection of records showed the system has worked electricity (subsidised at locations connected to effectively for resolving internal labour complaints and government supply), free medical, school transport and disputes as well as an external land dispute at Mutiara one set of free school uniform per year and also have Estate. The system is open to all affected parties, in access to welfare amenities. The housing standard is accordance with Kulim Policy. good and meets government regulations, although repainting is required at some estates and mills. At Tereh Mill a budget has been approved for a housing Prepared by BSi Management Systems Singapore Pte Ltd for Kulim (Malaysia) Berhad Public Summary Report – RSPO Certification Assessment – Sedenak, Sindora, Tereh Mills and Supply Base Page 16 replacement programme for 50 new houses to be built training, counseling and providing a channel of over the next three years. communication on women’s issues (6.9.2). This includes receiving any complaints related to gender issues. Criterion 6.6: The employer respects the right of all Interviews of staff and workers confirmed awareness of personnel to form and join trade unions of their choice the policy and procedure but not had occasion to use. and to bargain collectively. Where the right to freedom of association and collective bargaining are restricted Criterion 6.10: Growers and mills deal fairly and under law, the employer facilitates parallel means of transparently with smallholders and other local independent and free association and bargaining for all businesses. such personnel. The FFB pricing mechanism is documented by Kulim At the mills and estates minutes of meetings with union Corporate Finance Department (6.10.1). The FFB price is representatives are recorded and held on file (6.6.1). detailed in each contract with Outside Suppliers. For example at Sedenak Mill minutes were reviewed for Malaysian Palm Oil Board (MPOB) sets the FFB price the recent meeting (24 April 2008) with combined monthly and this information is publicly available. NUPW and AMESU representatives. Kulim’s Finance Department calculates the value of FFB Freedom of Association is included as a Policy in the supplied by Traders and notifies the mills for payment to Kulim Sustainability Handbook – June 2007. The Policy suppliers. was communicated to estates and mills in February Before a Contract is signed, Kulim Marketing 2008. Interview of staff and workers confirmed Department explains the Terms and Conditions to the knowledge of the policy but some were not Union Trader at a Meeting. Upon reaching an agreement, the members by choice. Contract is signed and stamped to confirm the Contractor agrees. Interviews of Contractors at estates Criterion 6.7: Children are not employed or exploited. and mills and suppliers of FFB confirmed fairness of Work by children is acceptable on family farms, under dealings with the company, eg one transport contractor adult supervision and when not interfering with has been with Tereh Mill for more than 20 years. education programmes. Children are not exposed to Interviews of contractors and suppliers confirmed that hazardous working conditions. payments are made in a timely manner. An inspection of employment records at each estate and mill confirmed age checks are carried out at recruitment Criterion 6.11: Growers and millers contribute to local (6.7.1). Indonesian workers’ information is obtained sustainable development wherever appropriate. from their passport and Malaysian workers’ National ID Local communities generally have good access to Card. No children were observed at the workplace at Government services, health and education and any of the estates or mills. infrastructure is well established. Community assistance is related to the local situation. Examples of Criterion 6.8: Any form of discrimination based on race, contributions include assistance with places of worship caste, national origin, religion, disability, gender, sexual and donations to schools for activities. There is a budget orientation, union membership, political affiliation or to meet local requests for assistance. age is prohibited. At remote locations, such as Tereh Mill, which is The Kulim Sustainability Handbook includes a Policy on surrounded by oil palm estates, Kulim makes donations Equal Opportunities – June 2007. The Handbook and to support local community facilities, such as the school Policies were communicated to estates and mills in and places of worship. The mill supplies water and February 2008. Policy awareness and training is electricity to the school and resident teachers free of conducted during muster briefings. Interview of staff charge. The clinic facilities are made available to and workers confirmed knowledge of the Policy. government health workers who run a monthly clinic to Inspection of payroll records at the estates and mills did provide anti‐natal care and immunisations for workers, not identify differences in pay rates between ethnic worker families and the outside community. groups or between male and female workers on daily rates. Principle 7: Responsible Development of New Plantings Criterion 6.9: A Policy to prevent sexual harassment Kulim has not carried out any new oil palm and all other forms of violence against women and to developments since November 2005 and there are no protect their reproductive rights is developed and plans for expansion of plantings. There were no new applied. land developments or plantings taking place at the time of the audit and Principle 7 is not applicable to this A Policy on Sexual Harassment and prevention of Assessment. Violence against women is displayed on notice boards at Offices (6.9.1). Policy awareness training was conducted Criterion 8.1: Growers and millers regularly monitor for all staff and workers in June and July 2008. and review their activities and develop and implement Kulim has established a “Women’s Grievance Panel action plans that allow demonstrable continuous Committee” that is charged with raising the awareness improvement in key operations. of women’s concerns and responding to the needs of Prepared by BSi Management Systems Singapore Pte Ltd for Kulim (Malaysia) Berhad Public Summary Report – RSPO Certification Assessment – Sedenak, Sindora, Tereh Mills and Supply Base Page 17 Kulim prepared a Corporate Improvement Plan (1 May Sindora Mill ‐ Inspection showed a section of the 2007) following the March 2007 Baseline Survey of the anaerobic pond 2 embankment had been removed when environmental impacts of the mills and estates. The Plan the pump was installed for transferring effluent to the details the improvements to be made across all compost site. At the time of the audit site visit the departments to achieve RSPO implementation. Kulim freeboard at this location was considered inadequate. also prepared an Environmental Aspects and Impacts There was a risk of overtopping and discharge of effluent Register in mid 2007 that was based on a risk into the downstream catchment during heavy rain or if assessment process and considered the negative as well blockage of the outlet pipe to pond 3 was to occur. as beneficial environmental impacts. The scope of the A nonconformity was raised against this minor Register included the operational activities at all estates, compliance indicator as there was a risk of overflow of mills and support services and infrastructure. the embankment and discharge of effluent off‐site into a In January 2008, Kulim supplemented the environmental protected catchment immediately downstream. improvement plan with information on OSH and social Kulim has prepared a Corrective Action Plan to repair the issues and prepared a Combined Improvement Plan. The section of the embankment. Kulim has advised the Combined Improvement Plan includes each of the key corrective action to repair the embankment was elements identified by RSPO and are outlined below. completed during July. This will be inspected at the The use of Class 1 chemicals is minimised and avoided Surveillance Audit. where possible by use of IPM techniques. For example, the use of Paraquat is restricted to application in palms 5.6.3 ‐ Monitor and reduce peat subsidence rate through <1 year old. Kulim also has contributed to the “RSPO water table management. (Within ranges specified Alternative Weeds Management Strategy”. in C4.3). Kulim has implemented a program of segregation of Kuala Kabong ‐ The present conventional monitoring wastes at source into recyclables (plastic, glass, metal, programme does not provide a measure of peat paper), organic wastes for compost and non‐recyclables subsidence rate. No data are held at the Estate on for disposal. This program has reduced substantially the changes in peat surface level relative to a fixed datum quantity of solid waste requiring disposal by landfill. for assessment of subsidence. The peat surface is measured relative to weir heights, but the weirs have Site‐specific pollution prevention measures are included not been tied in by survey to a benchmark to enable in the Combined Improvement Plan 2008. An outcome assessment of changes in peat surface level. of the Plan is the installation of pollution control devices on all wastewater and stormwater drains. A nonconformity was issued against this minor compliance indicator because the existing monitoring The Social Improvements for the Group of estates and does not provide a measure of peat subsidence rate. mills initially focussed on common issues across all the operations such as policy development and Kulim has prepared a Corrective Action Plan to establishment of the “Women’s Grievance Panel implement a monitoring program for assessment of peat Committee”. subsidence. This will be checked at the Surveillance Audit. Kulim’s Finance Department has assigned a special budget code for capturing RSPO implementation 6.5.2 – Labour laws, union agreements or direct expenditure. In addition a Sustainable Palm Oil (SPO) contracts of employment detailing payments and Team facilitates implementation, monitoring and conditions of employment (e.g. working hours, reporting of sustainability performance. deductions, overtime, sickness, holiday entitlement, maternity leave, reasons for dismissal, period of notice, 3.2 Detailed Identified Nonconformities, Corrective etc) are available in the languages understood by the Actions and Auditor Conclusions workers or explained carefully to them by a Plantation Management official in the operating unit. Three (3) Nonconformities were assigned to Minor Compliance Indicators. Sedenak and Tereh Mills ‐ Pay records showed during the 2007 peak crop season excessive hours of overtime Kulim has prepared a Corrective Action Plan for compared with the Department of Labour approved addressing the identified Minor Nonconformities. These maximum of 120 hours per month were worked at will be addressed during the 12 months following Initial Sedenak Mill and at Tereh Mill. Certification and will be checked at the Surveillance Assessment scheduled for August 2009. Although a breach had not occurred in the 5 months prior to the audit, a nonconformity was issued against BSi has reviewed and accepted Kulim’s Corrective Action minor compliance indicator (6.5.2) for failure to Plan. implement controls to prevent exceedance of the Government approved overtime limit. 4.4.6 – Water drainage into protected areas is avoided wherever possible. Appropriate mitigating measures will Kulim has prepared a Corrective Action Plan. This will be be implemented following consultation with relevant checked at the Surveillance Audit. stakeholders. Prepared by BSi Management Systems Singapore Pte Ltd for Kulim (Malaysia) Berhad Public Summary Report – RSPO Certification Assessment – Sedenak, Sindora, Tereh Mills and Supply Base Page 18 Observations/Opportunities for Improvement 3.3 Noteworthy Positive Components Eleven (11) Observations/Opportunities for Improvement of Groundcover Vegetation for Soil Improvement were identified. The progress with the Conservation Observations/Opportunities for Improvement will be The Baseline Survey that was conducted in March 2007 checked at the Surveillance Assessment visit scheduled identified the use of “mistblowers” for applying for August 2009. herbicides to paths and palm circles as the cause of poor 1. Sedenak Estate – small areas of bare soil occur at groundcover in mature palms, leading to soil erosion. some locations, eg P99 block 1 (4.3.2). Kulim ceased the use of mistblowers in mid 2007 and changed its practice to selective weeding using knapsack 2. Laboratory analyses results are sent to all mills and sprayers and the spraying of palm circles only. estates by hard copy/email where they are manually input to an excel spreadsheet. A check of Inspection of field conditions during the July 2008 audit records showed accurate transcription but found major improvement in the amount of possibility of error during transfer of data. SPO groundcover, with soft grasses and broadleaf plants now proposes to request UTCL to forward data by email covering much of the bare soil observed previously in excel spreadsheet. (4.4.3) (Plate 1). The improved groundcover provides protection of the soil from erosion by rainfall and runoff. 3. The programme and sampling results of ambient water quality at all mills and estates have not been reviewed in relation to the applicability of measured parameters as indicators of the specific potential impacts or frequency of sampling relative to seasonal conditions. (4.4.3) 4. Tereh Mill – a site specific Water Management Plan, including site map and locations of discharge points has yet to be prepared. (4.4.7) 5. Mutiara Estate – an annual medical surveillance has not yet been conducted but is scheduled to be carried out in September 2008 by OSH registered medical practitioner. (4.6.5) 6. Sedenak Estate – First Aid training has not yet been carried out but is scheduled during October. (4.7.1) 7. Sindora Estate – sprayers were not wearing safety Plate 1: Well maintained Groundcover for Prevention of Soil Erosion goggles correctly whilst refilling knapsacks with chemical. (Corrective action was taken immediately this was pointed out). The pre‐mixed container of Control of Point‐source Pollutants and Emissions Ally was not marked to distinguish it from other 20L containers of water. (Corrective action was Kulim has prepared a comprehensive assessment of all taken upon return from the field). (4.7.1) emission sources from the mills and estates. The company used this information to install spill 8. Inadequate control at each mill to prevent boiler containment at all storage and use locations for ash and fibre from entering monsoon drains, which minimising the risk of accidental release of places increased loading on Pollution Control agrochemicals and other potential contaminants to the Devices. (5.3.2) environment. In addition, pollution control devices have been installed on all mill and Estate wastewater drains 9. Sedenak Mill – Stored decanter cake is exposed to for protection of water resources. rain and is at risk of being washed into the adjacent drain and discharge via a PCD off‐site. (5.3.2) 10. At Tereh Mill, to date boiler ash has not been Biodiversity Conservation recycled to the field. A trial is in progress to Kulim initiated the assessment of HCVs at the estates evaluate incorporation of boiler ash with bio‐ with a Rapid Biodiversity Survey that was conducted in compost. (5.3.3) late 2007. This provided “screening” information on the 11. Interviews concluded that mill staff and workers presence of HCVs within and adjacent to the estates as receive a copy of their “Employment Contract” but well as a biodiversity management plan for each at most estates, Staff, Local and Foreign workers identified site. are not provided with a copy of their “Employment Contract”. Kulim is following up the rapid biodiversity assessment with detailed field surveys and development of a strategy to protect fauna and flora. Kulim is a Corporate Member of the Malaysian Nature Society, Johor Branch Prepared by BSi Management Systems Singapore Pte Ltd for Kulim (Malaysia) Berhad Public Summary Report – RSPO Certification Assessment – Sedenak, Sindora, Tereh Mills and Supply Base Page 19 and has engaged them to conduct detailed biodiversity assessments of remnant vegetation (Flora and Fauna), a Water Bird census and a review of wetlands, watershed, habitat and riparian zones for management of water quality at fifteen (15) sites. Kulim has initiated the Wildlife Defender Project in collaboration with Wildlife Conservation Society (Malaysia). This Project will train security personnel as Wildlife Wardens. Kulim has prepared a list of Security personnel to be trained in October 2008 by the Society’s Enforcement Trainer and Advisor (Asia). In conjunction with Malaysian Environment Week this October 2008, Kulim in collaboration with Wild Asia Sdn Bhd is organising tree planting in Labis Bahru Estate. The Plate 3: Crèche for Staff and Worker Children ultimate aim of the program is to create natural corridors across the plantation landscape as functional habitats for wildlife, in addition to improving the local 3.4 Issues Raised by Stakeholders and Findings with environment. The tree‐planting activity aims to Respect to Each Issue demonstrate that the creation of natural corridors goes beyond simply planting trees. It is a vision for natural The majority of stakeholders had positive comments corridors for wildlife and the local communities. about Kulim. These are shown below. For the situations where stakeholders raised issues, the company’s Recycling of used Pesticide Containers response is stated. Kulim has worked with the Department of Environment and Ministry of Agriculture to develop a program for the Worker Issues collection and recycling of used pesticide containers. Foreign workers stated that their travel outside the This involved development of a protocol and estates is restricted because the company holds their participation in a trial of the cleaning, storage, collection passports. They have to request permission to travel for and recycling of used plastic pesticide containers. shopping for food supplies. Kulim has recognised that holding appropriate identity Facilities papers is a key issue in limiting foreign workers’ freedom Kulim provides a high standard of housing (Plate 2) and to travel outside of the estate where they are employed. facilities, such as crèches (Plate 3) for its staff and Kulim has initiated a project with the Immigration workers. Department to develop and issue Identity Cards to foreign workers. The project is well advanced with Immigration Department having recently photographed workers and the issue of identity cards is imminent. The audit team concluded that this innovation will be of great benefit to the foreign workers. None of the contractors interviewed raised any issue of concern about the conditions of contract with Kulim. Several contractors had worked with Kulim for more than 20 years and confirmed a good relationship with the company. Contractors had a good understanding of contract terms and conditions, including labour law requirements for their employees, wage rates, EPF contribution, sick pay and holiday pay. The company also had specific standards for OSH and the wearing of PPE. Contractors were aware of RSPO as at the mills and estates it had been communicated to them 3‐4 times. Plate 2: High Standard of Housing for Staff and Workers Outgrowers and FFB Traders The FFB suppliers interviewed were from the FELDA Communities near the mills. The outgrowers prefer to sell their crop to Kulim as the price received is higher than that paid by FELDA mills. The outgrowers have a good relationship with the company and one has been Prepared by BSi Management Systems Singapore Pte Ltd for Kulim (Malaysia) Berhad Public Summary Report – RSPO Certification Assessment – Sedenak, Sindora, Tereh Mills and Supply Base Page 20 supplying FFB to Kulim for more than 8 years. With the 3.5 Acknowledgement of Internal Responsibility current high CPO price, many outgrowers were and Formal Sign‐off of Assessment Findings employing foreign workers for upkeep and harvesting of the oil palms. The FELDA communities have basic public Please sign below to acknowledge receipt of the infrastructure and Kulim provides donations to schools assessment visit described in this report and confirm the and support for religious festivals. acceptance of the assessment report contents including assessment findings. Local Communities Local communities have good relationships with Kulim Signed for on behalf of and there were no disputes over land or other issues. (Kulim Malaysia Berhad) The Government provides basic facilities and services for health and education, except at the remote Kampong Sri Kenagan, near Mutiara Estate. Kampong children attend the government school at Mutiara Estate and Kulim provides medical treatment at its clinic. The company provides donations to support religious celebrations as well as uniforms and textbooks for school children at some kampongs. Government Labour Department confirmed the labour regulations for working hours and the payment of overtime under the provisions of the Employment Act 1955 and 1998 Signed for on behalf of Amendment. Under special conditions, such as seasonal BSi Management Systems Singapore Pte Ltd harvest, the Department will issue approval to a company to increase the maximum overtime per employee from 104 to 120 hours per month. The Environment Department and Department of Occupational Safety Health both confirmed there are ...... currently no outstanding compliance issues at the Kulim Mr Charlie Ross mills and estates. Lead Auditor Date: 11 September 2008 NGOs The Malaysian Nature Society, Johor Branch, had completed a scoping study in March and is waiting for approval to proceed with the water bird census and detailed biodiversity surveys. The Malaysian Nature Society views this as a good opportunity to acquire data on habitats and fauna populations and is waiting for Kulim approval. Since the completion of the RSPO field audit, Kulim has approved a contract to engage the Malaysian Nature Society, Johor Branch, to carry out the work described above. The audit team concluded that this is a positive outcome for detailed assessment and management of HCVs. The Malaysian CropLife and Public Health Association have worked with Kulim in the development of its procedures for recycling of used pesticide containers. This involved conducting training and implementing controls for triple rinsing, storage and collection of used containers. CropLife found Kulim cooperative to work with and they are registered as participants in the National Recycling Program for used pesticide containers. Prepared by BSi Management Systems Singapore Pte Ltd for Kulim (Malaysia) Berhad Appendix “A” RSPO Certificate Details PUBLIC SUMMARY REPORT CERTIFICATE DETAILS Kulim (Malaysia) Berhad Certificate Number : SPO 537873 Ulu Tiram Estate Certificate Issue Date: (RSPO Approval Date) KB 705, Johor Bahru Johor 80990 Malaysia Website: www.kulim.com.my Standards: RSPO Principles & Criteria : 2007; Malaysia National Interpretation : 2008 Sedenak Palm Oil Mill and Supply Base Location Kulai, Johor Address Sedenak Palm Oil Mill, KB 721, 80990 Johor Bharu, Johor GPS E 103° 32' 17.9628" N 1° 43'51.0888" CPO Tonnage Total Production 67236.1 mt PK Tonnage Total Production 18178 mt Sedenak (50696), Rengam (43647), Asam Bubok (9587), Kuala Kabong Company owned Estates FFB Tonnage (38969), UTE (17856), Basir Ismail (45381), REM/Pasak (24188) Company managed Estates FFB Tonnage* Tebrau (7809) Outgrowers and Traders FFB Tonnage* 115970mt of Total FFB 354103mt CPO Tonnage Claimed** 44059 mt PK Tonnage Claimed** 11 415 mt Sindora Palm Oil Mill and Supply Base Location Kluang, Johor Address Sindora Palm Oil mill, KB 501, 86009 Kluang, Johor GPS E 103° 27’ 44.316” N 1° 59’ 7.3392” CPO Tonnage Total Production 28256 mt PK Tonnage Total Production 8706 mt Company owned Estates FFB Tonnage Sindora (65855), UTE (860), Basir Ismail (7122) Company managed Estates FFB Tonnage* Tebrau (195), S Kiri (9684) Outgrowers and Traders FFB Tonnage* 69345 mt CPO Tonnage Claimed** 13568 mt PK Tonnage Claimed** 4 382 mt Tereh Palm Oil Mill and Supply Base Location Kluang, Johor Address Ladang Tereh Mill, KB 538, 86009 Kluang, Johor GPS E 103° 21’ 5.0004” N 2° 13’ 3.0648” CPO Tonnage Total Production 37979 mt PK Tonnage Total Production 11079 mt Tereh Utara (40452), Tereh Selatan (31313), Selai (31810), Enggang Company owned Estates FFB Tonnage (31580), Mutiara (34402), Rengam (357) Company managed Estates FFB Tonnage* S Sembrong (56) Outgrowers and Traders FFB Tonnage* 36963 mt CPO Tonnage Claimed** 31 287 mt PK Tonnage Claimed** 9 146 mt * Production from Company managed Estates, Outgrowers and Traders is excluded from the Certificate. ** The tonnage claimed is the proportion of the total FFB production sourced from Company owned Estates. Prepared by BSi Management Systems Singapore Pte Ltd for Kulim (Malaysia) Berhad Appendix “B” Certification Assessment Plan PUBLIC SUMMARY REPORT CERTIFICATION ASSESSMENT PLAN AUDIT TEAM – CR: Charlie Ross RR: Robyn Ross IN: Iman Nawireja DATE TIME ACTIVITY CR RR IN Opening Meeting – EPA HQ Monday AM HR – Review Pay & Conditions, Worker Contracts, Training √ √ √ July 14 PM Document Review √ √ √ Tuesday Inspections, Task Observations, Effluent Treatment and Disposal √ July 15 AM Staff, Mill Worker Interviews √ Housing Compound, Interview Residents, Clinic √ Sedenak Mill Document Review √ √ PM Female Staff Interviews √ Stakeholder Interviews √ Wednesday Field Inspections, Task Observations/Interviews √ √ √ July 16 Inspection of Facilities (Workshops, Stores) AM Housing Compound, Interview Residents, Clinic √ √ Kuala Stakeholder Interviews √ Kabong Document Review √ √ √ Estate PM Female Staff Interviews √ Worker Interviews √ Thursday Field Inspections, Task Observations/Interviews √ √ √ July 17 Inspection of Facilities (Workshops, Stores) √ PM Housing Compound, Interview Residents, Clinic √ √ Sedenak Stakeholder Interviews √ Estate Document Review √ √ √ PM Female Staff Interviews √ Worker Interviews √ Friday Field Inspections, Task Observations/Interviews √ √ √ July 18 Inspection of Facilities (Workshops, Stores) √ AM Housing Compound, Interview Residents, Clinic √ √ Sindora Stakeholder Interviews √ Estate Document Review √ √ √ PM Female Staff Interviews √ Worker Interviews √ Inspections, Task Observations, Effluent Treatment and Disposal √ Saturday AM Staff, Mill Worker Interviews √ July 19 Housing Compound, Interview Residents, Clinic √ √ Document Review √ √ Sindora PM Female Staff Interviews √ Mill Stakeholder Interviews √ Review and Collation of Data √ √ √ Sunday Pick-up from Hotel - Travel JB → Kluang √ √ √ Monday Field Inspections, Task Observations/Interviews √ √ √ July 21 Inspection of Facilities (Workshops, Stores) √ AM Housing Compound, Interview Residents, Clinic √ √ Mutiara Stakeholder Interviews √ Estate Document Review √ √ √ PM Female Staff Interviews √ Worker Interviews √ Tuesday Inspections, Task Observations, Effluent Treatment and Disposal √ July 22 AM Staff, Mill Worker Interviews √ Housing Compound, Interview Residents, Clinic √ √ Tereh Mill Document Review √ √ Female Staff Interviews √ PM Stakeholder Interviews √ Travel Kluang → JB √ √ √ Wednesday Interviews Agronomy Section R&D Department √ √ √ AM July 23 Follow-up at EPA HQ √ √ √ Follow-up – contact stakeholders √ √ √ PM Female Staff Interviews √ Thursday Prepare IAV Report AM July 24 Preparation for Closeout √ √ √ PM Closeout Meeting √ √ √ Prepared by BSi Management Systems Singapore Pte Ltd for Kulim (Malaysia) Berhad