1 Public Summary First Surveillance Audit Audit

1 PUBLIC SUMMARY FIRST SURVEILLANCE AUDIT AUDIT DATE : 28TH – 31ST MAY 2013 FELDA AGRICULTURAL SERVICES SDN BHD FELDA SEGAMAT SCHEME SMALLHOLDER CERTIFICATION UNIT Prepared by: SIRIM QAS INTERNATIONAL SDN. BHD. Building 4, SIRIM Complex, No. 1 ,Persiaran Dato’ Menteri, Section 2, P.O. Box 7035, 40911 Shah Alam, Selangor, Malaysia. Website : www.sirim-qas.com.my TABLE OF CONTENTS SUMMARY 1 INTRODUCTION 1.1 Description of FELDA and its settlers scheme 1.2 Location of scheme 1.3 Description of FFB production 1.4 Approximate Tonnages Certified 1.5 Area statement and palm profile of each scheme 1.6 Other Certifications Held 1.7 Organisational Information/ Contact Person 2 ASSESSMENT PROCESS 2.1 Assessment Team 2.2 Assessment Methodology, Programme, Site Visits 3 ASSESSMENT FINDINGS 3.1 Summary of Findings 3.2 Chain of Custody 3.3 Stekeholder Consultation 3.4 Date of next surveillance audit 3.5 Assessment recomendation 3.6 Formal Sign-Off of Assessment Findings List of Tables Table 1 Locations of each scheme Table 2 FFB production Table 3 Approximate FFB tonnage claim Table 4a – 4m Palm profile List of Attachments Attachment 1 Location map of Certification Unit Attachment 2 Assessment Programme Attachment 3 Verification of Previous Audit Findings Attachment 4 Detail of Nonconformity and Corrective Action Taken SUMMARY 1 INTRODUCTION 1.1 Description of FELDA and its settlers scheme The certification unit (CU) being assessed was FELDA Segamat Scheme Smallholders (FSSS), one of the eleven regional complexes of FELDA smallholder schemes. This assessment was the Annual Surveillance Assessment no. 1 (ASA1) conducted by SIRIM QAS International Sdn. Bhd. (SIRIM QAS International) from 28th – 31st May 2013. It was assessed for continuing certification against the RSPO Principles and Criteria for Sustainable Palm Oil Production, including smallholder, RSPO Standard For Group Certification: 26 August 2010 and Malaysia National Interpretation Working Group (RSPO MYNIWG: November 2010). The smallholder schemes are land owned by settlers in accordance with the Group Settlement Act (GSA) 1960. These eleven regional complex smallholder schemes throughout Malaysia are managed by the Federal Land Development Authority, in short FELDA, a government of Malaysia owned agency. (Kindly note, the term smallholders and settlers are used interchangeably and they mean the same) Due to organizational structural change, the responsibility to oversee that FSSS continued to be certified against RSPO P&C had been transferred to FELDA Global Ventures Plantations Malaysia Sdn Bhd, FGVP(M), Plantation Sustainability and Quality Management (PSQM) Unit from FELDA Agricultural Services Sdn Bhd. This was in alignment with changes from FELDA Holdings to FELDA Global Ventures Holdings due to it being listed on the Bursa Malaysia Securities Berhad. Another noteworthy change was the exclusion of FELDA Chempelak Timur Plantation from FSSS CU as it had been officially transferred and absorbed to FGVP(M) Maokil 6 effective 1st January 2013 resulting in FSSS CU having 14 land schemes under its jurisdiction. Notification letter to changes had been sent to SIRIM QAS International Sdn Bhd. on 12th June 2013. As a result of this alignment, there was a reduction of 957 ha. of planted oil palm hectarage to 9427 ha. Other than that there was no change in terms of land ownership, acreage own and operations of estate. Those land cultivated with oil palm are 2,777 ha. in Melaka and 6,650 ha. in Johor. The number of scheme participants is 1,666 covering a total hectarage of 1,496.5. In addition, Felda Paloh has been taken out from the Group Certification as the hectarage has exceeded the category of smallholder. There was no issue reported during the assessment on acquisitions/disposals, emergence/re-emergence of land disputes and/or labour conflicts. Essentially, they remained the same. The scope of certification also remained the same, that is, Production of Oil Palm Fresh Fruit Bunches. Since FSSS CU is a fully developed land scheme, Principle 7 of the RSPO Principles & Criteria is therefore not applicable. 1.2 Location of Scheme This CU sent its produce to private Palm Oil Mills that are not RSPO Certified. The location map of FSSS CU (now fourteen land schemes) is shown in Attachment while their coordinates are detailed in Table 1 below. Table 1: Location of Land Schemes Scheme District, State *Latitude *Longitude FELDA Kemelah Segamat, Johor 2 31’ 26” N 102 57’ 58” E FELDA Tenang Labis, Johor 2 26’ 42” N 103 02’ 26” E FELDA Chemplak Barat Labis, Johor 2 23’ 29” N 102 56’ 00” E FELDA Chemplak Labis, Johor 2 22’ 45” N 102 55’ 48” E FELDA Medoi Segamat, Johor 2 31’ 40” N 102 52’ 55” E FELDA Pemanis 1 Segamat, Johor 2 36’ 13” N 102 53’ 13” E FELDA Pemanis 2 Segamat, Johor 2 35’ 33” N 102 54’ 13” E FELDA Sri Ledang Ledang, Johor 2 23’ 26” N 102 45’ 48” E FELDA Bukit Serampang Ledang, Johor 2 20’ 16” N 102 47’ 25” E FELDA Lenga Muar, Johor 2 14’ 28” N 102 51’ 03” E FELDA Tun Ghaffar Kemendore Jasin, Melaka 2 21’ 4” N 102 24’ 23” E FELDA Tun Ghaffar Macap / Menggong Alor Gajah, Melaka 2 24’ 43” N 102 18’ 06” E FELDA Tun Ghafar Bukit Senggeh Jasin, Melaka 2 23’ 26” N 102 27’ 51” E * Coordinate readings were taken at the respective scheme administrative office 1.3 Description of FFB Production All schemes had been producing FFBs and sold their produce to private mills. FELDA had entered into an agreement with the private mills to ensure fair FFB pricing for the settlers. The average annual FFB contribution from each scheme for year 2011 and 2012 and projected for 2013 are detailed in Table 2. Table 2: Actual Annual Production (Jan 1st 2011 – 31st December 2012), Forecasted FFB Production (Jan 1st 2013 – 31st Dec 2013) and FFB Claim for RSPO Certification (1st Jan – 31st Dec 2013) by Each Scheme FFB Claim for RSPO Actual FFB Production, in tonnes Certification GCS Scheme 1 Jan 2011 1 Jan 2012 1 Jan 2013 member 1 Jan 2012 – 31 – 31 Dec % % – 31 Dec – 31 Dec Dec 2012 2011 2012 2013 FELDA Kemelah 82 6196.76 132.49% 9,649.93 124.80% 9,649.93 0 FELDA Tenang 95 4255.39 88% 9,652.16 90.42% 9,652.16 9,998.50 FELDA 99 7652.43 82.16% 8,014.89 89.58% 8,014.89 8,259.90 Chemplak Barat FELDA 232 6376 80% 6,764.23 78% 232 232 Chemplak FELDA Medoi 19 2021.52 110% 1,831.38 99.70% 1,831.38 1,752.09 FELDA Pemanis 22 2526.7 83.06% 1881.31 51.03% 1180.6 585.34 1 FELDA Pemanis LOT 506.74 50% 169.75 18% 169.75 59.87 2 FELDA FELDA Sri 105 5417.34 75% 6,662.39 93% 6,662.39 7,014.90 Ledang FELDA Bukit 157 3689.66 60.79% 2,769.27 49.83% 2,769.27 2,387.45 Serampang FELDA Lenga 214 974.15 22.52% 897.1 17.40% 897.1 673.85 FELDA Tun Ghaffar 103 8594.9 100% 10,065.68 90% 10,065.68 14,050.70 Kemendore FELDA Tun Ghaffar Macap / 217 10,168.75 98% 9,029.96 101% 9,029.96 8,641.64 Menggong FELDA Tun Ghafar Bukit 321 27,655.00 103% 35,969.34 130% 0 0 Senggeh Total 1,666 86,035.34 103,357.39 60,155.11 53,656.24 1.4 Approximate Tonnage Certified The approximate tonnage of FFB produced per year, as well as the tonnage claimed for certification, are as shown in Table 2 above and Table 3 below respectively: Table 3: Approximate FFB tonnage Claimed FFB Tonnage Claimed for Certification (MT) Certification Unit 2012 2013 FELDA Segamat Scheme Smallholders 60,155.11 53,656.24 1.5 Area Statement and Palm Profile of Each Scheme Table 4a to 4m show particulars of year of scheme establishment, their respective total land area and area planted with oil palm and Planting Cycle of palm (in each scheme). Table 4a Name of Land Scheme : FELDA Tenang (GCS Member only) Oil Palm Area (ha) Oil Palm Area (%) Planting Plot Year cycle (1st / Planted nd no. planted Total area Mature Immature Mature Immature 2 area Generation) nd 01 1986 26.50 26.50 26.50 - 100 2 02 1984 247.42 247.42 247.42 - 100 2nd 03 1999 513.97 16.18 16.18 - 100 2nd 04 2000 398.15 398.15 398.15 - 100 2nd Total 1,186.04 688.25 688.25 - 100 - Table 4b: Name of Land Scheme: FELDA Kemelah (GCS Member only) Oil Palm Area (ha) Oil Palm Area (%) Planting Plot Year cycle (1st / Total Planted nd no. planted Mature Immature Mature Immature 2 area area Generation) 04 2003 622.08 533.62 533.62 - 85.78 - 1st Total 533.62 - 85.78 - - Table 4c: Name of Land Scheme: FELDA Chempelak Barat (GCS Member only) Oil Palm Area (ha) Oil Palm Area (%) Planting Plot Year cycle (1st / Total Planted nd no. planted Mature Immature Mature Immature 2 area area Generation) st 01 2002 210.16 210.26 210.26 - 100 - 1 113Z* 2002 69.89 69.89 69.89 - 100 - 1st 112W* 2002 38.43 38.43 38.43 - 100 - 1st 111V* 2006 3.83 3.83 3.83 - 100 - 1st 118Z* 2002 7.82 7.82 7.82 - 100 - 1st 113W* 2002 50.39 50.39 50.39 - 100 - 1st 113Y* 2005 3.75 3.75 3.75 - 100 - 1st Total 384.37 384.37 384.37 100 - * the alphabet V, W, Y and Z denotes “supplying of palms” within the same plot that were later decided by settlers who were not able to work on their farm due to resource constraints and thus surrender their land and let FLEDA to manage on their behalf.

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