RSPO Audit Report

Audit Report

Surveillance and follow up audit for

PT. SOCFIN INDONESIA, Sungai Liput Mill and Its Supply Bases

FMS40086

RSPO Membership number: 1-0017-04-000-0 RSPO Member Name: Socfin Group (PT Socfindo and Socfinco SA)

Audited Address: Sungai Liput Mill: Jl. Medan Banda Aceh, Desa Kebun Sei Liput, Kejuruan Muda, Aceh Tamiang 24477, Aceh IDN Its Supply Bases: Sungai Liput Estate Jl. Medan Banda Aceh, Desa Kebun Sei Liput, Kejuruan Muda, Aceh Tamiang 24477, Aceh IDN

Date of audit: 29/01/2016

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 ASSESSMENT 1.1 Introduction 7 1.2 Audit Objective 7 1.3 Scope of Certification 8 1.3.1 Palm Oil Mill 8 1.3.2 Oil Palm Estate 8 1.4 Location of Mill and Estates 8 1.5 Description of Supply Base 11 1.6 Date of Plantings 11 1.7 Area of Plantation 12 1.8 Approximate Tonnages Offered for Certification (CPO and PK) 13 1.9 Other Certificates Held 15 1.10 Organisational Information/Contact Person 15 1.11 Time Bound Plan for Other Management Units 15 1.12 Partial Certification Requirements 17 1.13 Date of Issue of Certificate and Date of Previous Assessment 17

2.0 AUDIT PROCESS 2.1 Certification Body 17 2.2 Audit Methodology 18 2.3 Qualification of the Lead Auditor and Audit Team Members 19 2.4 Stakeholder Consultation 19 2.5 Date of Next Surveillance Visit 20

3.0 AUDIT FINDINGS 3.1 Action taken on previous audit issues 21 3.2 Claim and use of certification mark and or logo 21 3.3 Description of audit findings 21 3.3.1 RSPO Principle and Criteria 21 3.3.2 Mill Supply Chain Requirements 126 3.3.2.1 Supply Chain Certification Standard 127 3.3.2.2 Supply Chain Certification System 140 3.4 Recommendation 142 3.5 Environmental and social risk for this scope of certification for planning 142 of the surveillance audit 3.6 Acknowledgement of Internal Responsibility and Formal Sign-off of 143 Assessment Findings Page List of Tables 1 Mill and Estates GPS Locations included in certification assessment 8 2 FFB Production of the supply base 2016 11 3 Estate Age Profiles of Planted Palms 2016 11 4 Land use description of Sungai Liput Estate in 2016 12 5 Estates and Area Planted 2016 13 6 Sungai Liput Estate FFB Production Trend 2014 – 2015 13 7 Total CPO and PK Production 2015 and Estimate Production of 2016 13 8 Mill Production and Delivery of ALL Certified Products (CPO and 14 Kernel), actual volume since date of last reporting period

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9 Estimated Production of Certified CPO and PK 14 10 Certificates Held by Mill and Estates 15 11 RSPO Certification Time Bound Plan 16 12 List of internal and external stakeholder 20 13 Delivery of CPO in 2015 126

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

List of Appendices Page A Audit Record 144 B Previous nonconformities, corrective actions and status 148 C Nonconformities, Corrective Actions and Observations Summary 157 D Stakeholder’s issues and comment 161 E Definition of, and action required with respect to audit findings 166

Audit Report

Executive Overview

This is the second (2nd) annual surveillance audit visit on 26 to 29 January 2016 against the Generic RSPO Principles and Criteria for Sustainable Palm Oil Production, May 2013 and RSPO Supply Chain Certification Standard, CPO Mill, Module D IP, November 2014.

PT Socfin Indonesia, Sungai Liput Mill operations is comprising of 1 (one) Palm Oil Mill and 1 (one) FFB supply base owned by PT Socfin Indonesia. There was no supply base from independent third party.

Two (2) minor and one (1) major non-conformance 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 was done on 13 April 2016. The issued Major NCR in the 2nd annual surveillance audit has been rectified and considered as closed.

Previously PT Socfin Indonesia – Sungai Liput Mill was certified to the Generic RSPO Principles and Criteria for Sustainable Palm Oil Production, May 2013 and RSPO Supply Chain Certification Standard, CPO Mill, Module D IP, November 2014 by PT. TUV NORD Indonesia (Certificate #75121, expiry date 24 April 2019). Last surveillance audit was performed on 10 – 12 February 2015. The report indicated that there were 12 major and 5 minor non-conformances and the report mentioned that all non-conformances have been corrected. The reason of moving to SAI Global was the finishing of audit report was too long from the previous Certification Body.

The audit concluded that PT Socfin Indonesia – Sungai Liput 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 D IP, November 2014. The estimate figures of production offered for certification 2016 are:

Estimated tonnage of certified CPO produced 17,311.10 MT Estimated tonnage of certified PK produced 3,227.50 MT

Therefore PT Socfin Indonesia – Sungai Liput Mill and supply bases can continues to be certified as RSPO IP Model CPO and PK producer.

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Abbreviations Used

AK3U Safety Office (Ahli Kesehatan dan Keselamatan Kerja Umum) BLH Environmental Agency (Badan Lingkungan Hidup) BOD Biological Oxygen Demand BPJS Badan Penyelenggara Jaminan Sosial BPN National Land Agency (Badan Pertanahan Nasional) COD Chemical Oxygen Demand CPO Crude Palm Oil CSR Corporate Social Responsibility DO Delivery Order EFB Empty fruit bunch FFB Fresh Fruit Bunch EHS Environmental Health and Safety 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 IPM Integrated Pest Management ISCC International Sustainability and Carbon Certification ISO International Organisation for Standardisation ISPO Indonesia on Sustainable Palm Oil IUP Plantation Permit (Izin Usaha Perkebunan) Jamsostek Assurance (Jaminan Sosial Tenaga Kerja) KER Kernel Extraction Rate LB3 Hazardous Waste (Limbah Bahan Berbahaya dan Beracun) LD50 Lethal Dosage LOTO Lock Out Tag Out MCU Medical Check Up MT Metric Ton NCR Non-Conformance Report NGO Non Government Organisation OER Oil Extraction Rate OHS Occupational Health and Safety P2K3 Safety Committee PEL Environmental Evaluation Manual (Pedoman Evaluasi Lingkungan) PIC Person in Charge PLN National Electricity Company POM Palm Oil Mill POME Palm Oil Mill Effluent PP Government Regulation (Peraturan Pemerintah) PPE Personal Protective Equipment PK Palm Kernel PKB Joint Working Agreement (Perjanjian Kerja Bersama) 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

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SCCS Supply Chain Certification System SIA Social Impact Assessment SMK3 Occupational Health and Safety Management System (Sistem Manajemen Kesehatan dan Keselamatan Kerja Socfindo Socfin Indonesia SOP Standard Operating Procedure SPSI Indonesian Worker Union (Serikat Pekerja Seluruh Indonesia) TPS LB3 Temporary storage of hazardous waste UU Act (Undang-undang) WTP Water Treatment Plant WWTP Waste Water Treatment Plant YTD Year to Date

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1.0 SCOPE OF THE ASSESSMENT

1.1 Introduction

SAI Global conducted an audit of PT Socfin Indonesia – Sungai Liput Mill and Its Supply Bases on 26 – 29 January 2016 with Major Nonconformities identified. Follow up audit has been conducted on 13 April 2016 for verification of corrective action taken by the organisation.

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 which also reflected 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 the 2nd annual surveillance audit. The purpose of this audit was to determine continuing 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, CPO Mill, Module D IP, 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.

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1.3 Scope of certification

The scope of certification is the CPO production from one (1) Palm Oil Mill and one (1) FFB supply base owned by PT Socfin Indonesia.

1.3.1 Palm Oil Mill

Sungai Liput Mill PT Socfin Indonesia

Location : Jl. Medan Banda Aceh, Desa Kebun Sei Liput, Kejuruan Muda, Aceh Tamiang 24477, Aceh Province, IDN Mill capacity : 23 MT FFB/hour GPS Location : North 4° 13' 55'' East 98° 03' 34''

1.3.2 Oil Palm Estate

Sungai Liput Estate PT Socfin Indonesia

Location : Jl. Medan Banda Aceh, Desa Kebun Sei Liput, Kejuruan Muda, Aceh Tamiang 24477, Aceh Province, IDN GPS Location : North 4o6'24.00'' - 4o21'39.86'' East 97o58'1.95'' - 98o5'32.58''

1.4 Location of mill and estates

PT Socfin Indonesia mill and estate are located in Aceh Province. The geographical coordinate of the mill and estatesareshown on Table 1.

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

MILL AND ESTATE EASTING NORTHING

Sungai Liput Mill 98° 03' 34'' 4° 13' 55'' Sungai Liput Estate 97o58'1.95'' - 98o5'32.58'' 4o6'24.00'' - 4o21'39.86''

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Figure 1Map of Mill and Estates Location

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1.5 Description of supply base

The FFB source is one (1) organisation owned by PT Socfin Indonesia. No supply base from independent third party. The hectarage and FFB production of the plantation are shown on Table 2.

Table 2: FFB Production of the supply base 2016

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

Sungai Liput 3,783.61 72,999.35

Total 3,783.61 72,999.35

Source: Socfin Indonesia, January 2016

1.6 Date of plantings

Table 3: Estate Age Profiles of Planted Palms 2016

Estate Planted Area % of Planted Area Year (Ha)

Mature Immature Mature Immature

1990 98.29 0 2.60 0 1991 50.30 0 1.33 0 1992 117.23 0 3.10 0 1993 27.32 0 0.72 0 1994 166.64 0 4.40 0 1995 276.41 0 7.31 0 1996 334.66 0 8.84 0 1997 348.55 0 9.21 0 1998 359.72 0 9.51 0 1999 368.07 0 9.73 0 2000 180.07 0 4.76 0 2001 160.70 0 4.25 0 2002 56.13 0 1.48 0 2003 184.19 0 4.87 0 2006*) 58.12 0 1.54 0 2007*) 65.55 0 1.73 0 2008*) 27.82 0 0.74 0 2009*) 26.65 0 0.70 0 2010*) 159.38 0 4.21 0 2011*) 134.04 0 3.54 0

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Estate Planted Area % of Planted Area Year (Ha)

Mature Immature Mature Immature

2012*) 132.02 0 3.49 0 2013*) 104.29 0 2.76 0 2014*) 149.23 0 3.94 2015*) 146.54 0 3.87 2016*) 51.69 0 1.37 Total 3,436.15 347.46 90.82 9.18 Grand Total 3,783.61 100 Source: Socfin Indonesia, January 2016 *) replanting

1.7 Area of plantation

The areas details for organisation owned estates are shown on Table 5. Review of estate boundary maps has been done. There is no new open area since November 2005. Planting year above 2005 was replanting.

Table 4: Land use description of Sungai Liput Estate in 2016

AREA HECTARES Mature area 3,436.15 Immature area 347.46 Total area planted 3,783.61

Emplacement and Mill 29.48 PLN Line 7.72 Nursery 1.52 WWTP 2.69 Drainage isolation 4.09 Swamp 7.06 HCV 5.79 Total area non planted 58.35 Total leased area 3,841.96 Source: Socfin Indonesia, January 2016

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Table 5: Estates and Area Planted 2016

ESTATE MATURE (HA) IMMATURE (HA) Sungai Liput Estate 3,436.15 347.46 Source: PT. Socfin Indonesia, January 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 Sungai Liput Estate as well as last year CPO and PK, OER and KER of Sungai Liput Mill. The OER and KER of each supply bases were estimated based on laboratory analysis. Taken into consideration also that for year 2016, Sungai Liput Mill also processed FFB from independent FFB suppliers.

Table 6: Sungai Liput Estate FFB Production Trend 2014 – 2015

YEAR Actual FFB Production (MT)

2014 68,431

2015 70,313.72 Source: PT. Socfin Indonesia, January 2016

Table 7: Total CPO and PK Production 2015 and Estimate Production of 2016

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

Actual production Jan - Dec 2015 Sungai Liput 70,313.72 16,237.00 23.09 2,960.06 4.21 Other FFB n/a n/a n/a n/a n/a Supplier

TOTAL 70,313.72 16,237.00 23.09 2,960.06 4.21

Estimated production Jan - Dec 2016 Sungai Liput 73,352.11 17,311.10 23.60 3,227.50 4.40 Other FFB n/a n/a n/a n/a n/a Supplier

TOTAL 73,352.11 17,311.10 23.60 3,227.50 4.40

Source: PT. Socfin Indonesia, January 2016

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Table 8: Mill Production and Delivery of ALL Certified Products (CPO and Kernel), actual volume since date of last reporting period

Total FFB (Ton) CPO Produced (Ton) PK Produced (Ton) Other Other Month Other Supply Own Own Estate Own Estate Supply Supply Bases Estate Bases Bases 2015 January 2,766.09 n/a 591.57 n/a 100.31 n/a February 3,484.82 n/a 773.01 n/a 138.17 n/a March 6,396.74 n/a 1,438.76 n/a 268.66 n/a April 10,169.81 n/a 2,216.05 n/a 447.64 n/a May 8,577.64 n/a 1,946.27 n/a 373.31 n/a June 8,638.32 n/a 2,014.87 n/a 342.84 n/a July 8,050.93 n/a 1,968.10 n/a 342.77 n/a August 6,816.90 n/a 1,640.28 n/a 319.46 n/a September 4,869.73 n/a 1,206.28 n/a 214.95 n/a October 4,378.42 n/a 1,026.75 n/a 170.97 n/a November 3,473.08 n/a 805.56 n/a 135.02 n/a December 2,691.24 n/a 609.50 n/a 105.96 n/a Total 70,313.72 n/a 16,237.00 n/a 2,960.06 n/a Source: PT. Socfin Indonesia, January 2016

Table 9: Estimated Production of Certified CPO and PK

Total FFB (Ton) CPO Produced (Ton) PK Produced (Ton) Month Other Other Other Supply Own Own Estate Own Estate Supply Supply Bases Estate Bases Bases 2016 January 6,161.58 n/a 1,454.13 n/a 271.11 n/a February 5,208.00 n/a 1,229.09 n/a 229.15 n/a March 5,574.76 n/a 1,315.64 n/a 245.29 n/a April 6,528.34 n/a 1,540.69 n/a 287.25 n/a May 5,868.19 n/a 1,384.89 n/a 258.20 n/a June 6,381.63 n/a 1,506.06 n/a 280.79 n/a July 7,335.21 n/a 1,731.11 n/a 322.75 n/a August 7,261.86 n/a 1,713.80 n/a 319.52 n/a September 6,454.98 n/a 1,523.38 n/a 284.02 n/a October 5,794.81 n/a 1,367.58 n/a 254.97 n/a November 5,354.70 n/a 1,263.71 n/a 235.61 n/a December 5,428.05 n/a 1,281.02 n/a 238.84 n/a Total 73,352.11 n/a 17,311.10 n/a 3,227.50 n/a Source: PT. Socfin Indonesia, January 2016

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The FFB only comes from Sungai Liput Estate, therefore Sungai Liput Mill used RSPO Supply Chain IP Model – Module D.

Based on the above figures, the estimated of certified CPO and PK offered in 2014 for certification audit are:

Estimated tonnage of certified CPO produced 17,311.10 MT Estimated tonnage of certified PK produced 3,227.50 MT

1.9 Other certificates held

The organisation is implementing occupational health and safety management system based on SMK3. The details of other certifications held are shown in the following table.

Table 10: Certificates Held by Mill and Estates

MILL/ESTATE OTHER CERTIFICATION HELD

Sungai Liput Mill and SMK3 – audit was conducted in November 2015. Certificate has not been Estate finished yet.

Sungai Liput Mill and ISPO Certification by PT TUV Nord Indonesia Estate

1.10 Organizational information/contact person

PT. Socfin Indonesia Jl. K.L. Yos Sudarso No. 106, Medan 20115 Phone : (+62-61) 6616066 Fax : (+62-61) 6614390 Contact person : Mr. Hasan Bisri Kasyhuri Head of Sustainability Sub Department Email : [email protected]

1.11 Time bound plan for other management units

PT Socfin Indonesia is committed to RSPO certification of all its Management Units located in North Sumatera and Aceh. Time bound plan has been developed to achieve the RSPO certification for all its Management Units by 2017. The time bound plan was revised on 2 January 2015 to include non-HGU area. The HGU is still in process. The time bound plan is realistic and challenging. The plan is detailed on Table 5.

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Table 11: RSPO Certification Time Bound Plan

Time Bound for Mill Name Mill Address Estate Name Estate Address Progress Certification Tanah Gambus Kecamatan Lima Puluh, Tanah Gambus Kecamatan Lima Puluh, 2011 Certified on November 4, Kabupaten Batu Bara Kabupaten Batu Bara 2011 by SAI Global Bangun Bandar Kecamatan Dolok Masihul, Bangun Bandar Kecamatan Dolok Masihul, 2011 Certified on November 11, Kabupaten Serdang Bedagai Kabupaten Serdang Bedagai 2011 by SAI Global Negeri Lama Kecamatan Bilah Hilir, Negeri Lama Kecamatan Bilah Hilir, 2014 Certified on March 10, 2014 Stasiun Rantau Parapat, Stasiun Rantau Parapat, by TUV Nord Indonesia Kabupaten Labuhan Batu Kabupaten Labuhan Batu Mata Pao Kecamatan Teluk Mengkudu, Mata Pao Kecamatan Teluk Mengkudu, 2014 Certified on April 25, 2014 Kabupaten Serdang Bedagai Kabupaten Serdang Bedagai by TUV Nord Indonesia Sungai Liput Kecamatan Kejuruan Muda, Sungai Liput Kecamatan Kejuruan Muda, 2014 Certified on May 5, 2014 by Kabupaten Aceh Tamiang Kabupaten Aceh Tamiang TUV Nord Indonesia Aek Loba Kecamatan Aek Kuasan, Aek Loba Kecamatan Aek Kuasan, 2014 Certified on April 15, 2014 Kabupaten Asahan Kabupaten Asahan by TUV Nord Indonesia Seunagan Desa Purwodadi, Kecamatan Seunagan Desa Purwodadi, Kecamatan 2014 Certified on November 30 Kuala Pesisir, Kabupaten Kuala Pesisir, Kabupaten 2015 by SAI Global Nagan Raya Block 52B and 69B Nagan Raya 2017 Seunagan Seumanyam Desa Simpang Deli Kilang, Seumanyam Desa Simpang Deli Kilang, 2014 Certified on October 17, Kecamatan Darul Makmur, Kecamatan Darul Makmur, 2015 by SAI Global Kabupaten Nagan Raya Kabupaten Nagan Raya Lae Butar Desa Rimo,Kecamatan Lae Butar Desa Rimo,Kecamatan 2014 Certified on November 30, Gunung Meriah, Kabupaten Gunung Meriah, Kabupaten 2011 by SAI Global Aceh Singkil Division V Lae Butar Aceh Singkil 2017

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1.12 Partial Certification Requirements

PT Socfin Indonesia own 9 mills and 9 estates as a supply base regarding Tanah Gambus, Bangun Bandar, Negeri Lama, Aek Loba, Mata Pao, Sungai Liput, Seunagan, Seumayam and Lae Butar. All management units have RSPO certified.

In Seunagan Estate there were two blocks area still in progress land identity (HGU) regarding Block 52 B (30.63 ha) and Block 69B (21.93 ha). In the beginning, both of block in Seunagan Estate are an oil palm of independent smallholder which bought in 2004 (Block 52B) and in 2006 (Block 69B). Both of block has been replanted in 2005 (Block 52 B) and in 2007(Block 69B). Moreover, organisation has acquired Division 5 in Lae Butar Estate (312.92 ha) from PT Jahya Bani Utama in 2008. Land title of its area was still in the name of PT Jahya Bani Utama.

The organisation conducted the site visit and reviewing regarding no 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, land conflict, labour disputes and legal non- compliance to management unit of Seunagan Estate Block 52 B and Block 69B and Lae Butar Estate (Division 5) which have not been certified to ensure that partial certification requirements were fulfilled in January 2015. Based on the reviewing it was concluded that:  There was no new planting since November 2005 so there was no 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.  There were no land conflict and labour disputes  Organisation has been identified and evaluated relevant regulation. There were several non-compliance with regulations based on internal gap analysis. Compliance against related regulation has been reviewed and has taken corrective action, regarding: o There were two blocks area in Seunagan Estate still in progress land legality (HGU) regarding Block 52 B (30.63 ha) and Block 69B (21.93 ha). Moreover, Plantation Business Permit (IUP-Izin Usaha Perkebunan) and Permitted Area (Izin lokasi) still in progress. HGU, IUP and permitted area was targeted for completion in 2016. o Area Division 5 in Lae Butar Estate (312.92 ha) acquired from PT.Jahya Bani Utama still in progress change over name to PT. Socfin Indonesia. The organisation is waiting for permit from BPN to change over name to PT Socfin Indonesia and targeted finished in 2017.

1.13 Date of issue of certificate and date of previous assessment

Date of issue of certificate: May 5th, 2014 Date of previous audit: February 10th – 12th, 2015

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

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Phone : +62 21 720 6186, 720 6460 Fax : +62 21 720 6207 Contact person : Ms Inge Triwulandari Technical Manager Email : [email protected]

SAI Global is one of the world’s leading business providers of independent assurance. SAI Global provides organisations around the world with information services and solutions for managing risk, achieving compliance and driving business improvement.

We provide aggregated access services to Standards, Handbooks, Legislative and Property publications; we audit, certify and register your product, system or supply chain; we facilitate good governance and awareness of compliance, ethics and policy issues and provide training and improvement solutions to help individuals and organisations succeed.

The SAI Global business is driven by two equally important client needs - the mandated need for organisations to conform to regulations, standards and legislation in all their locations, and the operational need for organisations to improve business processes and procedures as well as corporate culture. As we are a global company, we can meet these needs for any client - those operating within one country's borders and in one language or those operating across borders and in several languages.

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

The Surveillance Audit was performed on 26 – 29 January 2016. The audit programme was included in the body of report. The audit methodology for collection of objective evidences is site inspection, documentation and record review and interview with staffs, workers, and other stakeholders. Objective evidences 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.

During the audit, particular attention has been paid to previous non-conformities. The previous major and minor non-conformities were checked for being closed. Assessments plan has included but not be limited to areas of potential environmental and social risk. Considering previous audit findings, the mill and supply base were audited during this surveillance audit. Audit has paid special attention on some potential risks in the following areas: - All environment aspects of P&C including reporting of environmental management, waste handling (Sugai Liput Mill and Estate) - All social aspects of P&C including land conflict issue (if any), customary right, labour issue, organization contribution (CSR program, empowerment of local community) (Sungai Liput

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Mill and Estate) - All HCV aspects of P&C including identification, management and monitoring HCV (Sungai Liput Mill and Estate).

Audit plan/record is available in Appendix A of this report on page 142

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).

Eko Purwanto – Audit Team Member and audited Social Aspect, HCV and Mill Supply Chain Eko Purwanto graduated as Bachelor of Forestry from Forest Conservation Department, Faculty of Forestry, Bogor Institute of Agriculture (IPB) in 2001. He owned working experience at Oil Palm Plantation in East Kalimantan since 2003 to 2012, the last position was Estate Manager. He has implementing good agricultural practice including integrated pest management and limited pesticides uses. He has completed lead auditor training courses for RSPO P & C (2013), ISO 9001:2008 (2012), ISO 14001:2004 (2013), ISPO (2012) and RSPO SCC (2012). He has also completed training course of ISO 14001 (2012), Minaut Indonesia (2011) and Introduction to HCV Toolkit HCV (2011). For the last 2 year he has been involved in quality (ISO 9001) management system audits for very broad industrial and involved in Indonesia Sustainable Palm Oil (ISPO) audit for several plantations and mills since October 2012.

Fitria Rahmayanti – Audit Team Member and audited Environmental and OHS 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.

2.4 Stakeholder consultation

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

Audit Report 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 Appendices D on page 160.

Table 12: List of internal and external stakeholder

STAKEHOLDERS METHODS OF CONSULTATION

Internal stakeholders ( mill & estates ) SPSI, Head of cooperative and gender committee Group discussion Representative of worker and family of worker Group interview and one on one interview External Stakeholders ( mill & estates ) Villages head of Perkebunan Sei Liput, Sungai Group discussion Liput, Purwodadi, Tanjung Mancang, Seumadam, Karang Jadi, Suka Makmur, Tanjung Genteng and Medang Ara National Land Agency (Badan Pertanahan An invitation letter to comment was sent Nasional-BPN) of Aceh Tamiang Agriculture and Plantation Department of Aceh An invitation letter to comment was sent Tamiang Environment Agency of Aceh Tamiang An invitation letter to comment was sent Labour Department of Aceh Tamiang An invitation letter to comment was sent District Head (Camat) of Kejuruan Muda and An invitation letter to comment was sent Karang Baru District Police of Kejuruan Muda and Karang Baru An invitation letter to comment was sent NGOs: WWF, Sawit Watch, GAPKI, AMAN (Aliansi An invitation letter to comment was sent Masyarakat Adat Nusantara)

2.5 Date of next surveillance visit

The next surveillance visit will be conducted around February 2017 three months before datum month of the certification period.

Audit Report

3.0 AUDIT FINDINGS

3.1 Action taken on previous audits findings

All non-conformances (Major and Minor) from the previous audits have been followed up by taking corrective actions. Corrective actions have been implemented and verified. All corrective actions were considered as closed satisfactorily. There was no recurrence of NC.

3.2 Claim and use of certification mark and or logo

There was no use of certification mark and or logo. Claim has been made to 5,586.19 MT of RSPO certified CPO sold.

3.3 Description of audit findings

3.3.1 RSPO Principle and Criteria

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  Stakeholder list The company has maintained a list of stakeholder which listed by category. The list YES stakeholders? (E.g. listed by category  Procedure of Social was site specific for Sungai Liput site only. The updating of stakeholder list was and stakeholders listed should be site Communication conducted annually or whenever there is change. The last updating was conducted specific) (SOC/PSM/9.01), Rev.01 on 4 January 2016. Stakeholder verification has been performed by organization through visiting and b. What is the frequency of updating the dated 1 September 2014 stakeholder list?  Group Discussion with contacting stakeholders directly, if there is a change then immediately will be stakeholder in 27 January updated. It was sighted that stakeholder verification has been done and evidenced. c. Is there evidence of stakeholder 2016 Information provided to public and stakeholder specified in social communication

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) verification?  Field observation and interview procedures SOC/PSM/9:01 dated 1st September 2014 Rev. 04. List of the information available to the public and stakeholder are: d. What type of information is provided? with employee (E.g. Environmental, social and legal) - Certificate / land use rights - Occupational health and safety plan e. What is the frequency and level of access - Plan for social and environmental impact assessment to this information? - Identification and management of HCV f. How and where is the information - Plan for the reduction and prevention of pollution disseminated? - Grievance and complaints in detail - Procedure negotiations g. Who is responsible for providing & - Plan for continuous improvement updating information? - A general summary of the certification assessment h. Is there an SOP available to describe the - Human rights policy process (of information - Ethical policy sharing/dissemination)? - FFB Price Documents available to the public and stakeholder can be provided to stakeholders i. Are stakeholders aware of the type of according to their relevance through a written request to the organization. The information available and the procedures information most frequently requested by stakeholders are information related to the for accessing the information? management of occupational health and safety (P2K3 report) - Disnakertrans, environmental management report (wastewater, LB3) - BLH, employment report - Disnakertrans, production data and area statements - BPS, etc.

Information provided to the public and stakeholder has disseminated to the stakeholder together with public consultation of social assessment and dissemination of procedures for complaints handling on 18 November 2010. Dissemination of social communication procedure has been performed in 16 April 2015 to stakeholder. Minutes of dissemination and attendance list was sighted. Procedure and communication was delivered in appropriate language and understood by stakeholder.

Organization has assigned a responsible person for providing and updating information and stakeholder that was KTU (Kepala Tata Usaha). Responsibility and function was described in KTU job description.

SOP to describe the process of information sharing/dissemination defined in social communication procedure SOC/PSM/9.01 dated 1 September 2014 Rev. 04. Consultation and communication with stakeholders conducted by collecting

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) community leaders, village heads and local community or visiting the office/the village hall to meet with the village head, village officials and community.

Stakeholders aware of the type of information available and the procedures for accessing the information. All stakeholders understood how they should ask for information to the organization and how to communicate with the organization. Procedures and a list of information available in Indonesian and easily understood. It was verified during public consultation and interview with stakeholder in 27 January 2016.

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. 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  Procedure of Social The auditor observed that PT. Socfin Indonesia – Sungai Liput has mechanism to YES ensure constructive response to Communication responses to requests for information/ assistance/ donation. The requests for stakeholders? (SOC/PSM/9.01), Rev.01 information/assistance/donation were properly handled. It was also observed that all b. Who is the personnel in charge (PIC)? dated 1 September 2014 records were well maintained. Socfin Indonesia has a procedure to maintain all  Procedure of Document records through Procedure of Document Control (SOC-PSM/4.03), Rev.02 1 c. Does the SOP cover the elements under Control (SOC-PSM/4.03), January 2011 and the records was kept for five (5) years period in Master List of 1.1.1? Rev.02 1 January 2011. Records (SOC/Form/4.03-01). d. Is there a clear time frame for response to  Log Book: Notes of society and request for information? stakeholders aspirations and KTU is the personal in charge for collecting information request and time to the information request record response is defined 1 month. The SOP covers elements: environmental, social e. Are records of requests for information 2015 and/or legal issues relevant to RSPO Criteria to relevant stakeholders. and responses maintained?  Group Discussion with f. Are responses to requests for information stakeholder on 13 January Requests for information can be submitted in writing to the organization, all the timely and appropriate? 2016 information and aspirations will be addressed by organization with some consideration before information and aspiration rejected or approved. Responses  Field observation and interview with employee can be handled directly by the Site Manager (Pengurus), but if necessary coordination and consideration of management, information passed on to the public.

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) The initial response was given no later than one month after request from stakeholders received. The procedure already covered elements 1.1.1.

Records of information requests and aspirations documented in the Log Book: Notes of society and stakeholders aspirations and the information request record. Records of requests for information and responses were well maintained by the document controller. Organization responses to requests for information can be demonstrated and archived properly. The responses to requests for information were timely and appropriate. Generally the stakeholders’ aspiration was concerning funding request. 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); • 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.

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) For National Interpretation: Specific approaches to personal privacy safeguards, including any legal requirements, will be considered. a. How are the management documents - Procedure of Social Documents available to the public specified in the Social Communication YES listed in (c) below made publicly available? communication Procedures SOC/PSM / 9:01 Date 1 September 2014 rev. 4. Documents available (SOC/PSM/9:01) dated 1 to the public and stakeholder can be provided to stakeholders according to their b. Where are the documents placed? September 2014 Rev. 04 relevance through a written request to the organization. List of information available c. Is the information provided adequate? - Log Book: Notes of society in Indonesian and easily understood by stakeholder. Public document for Note: At minimum, an information and stakeholders aspirations stakeholder has been disseminated by organization on 23 October 2014. summary of the document listed below and the information request should be made available. record 2015 Documents available to the public placed in the respective sections within the  Land titles/user rights (Criterion 2.2) - Group Discussion with organization. Such as land title right/ HGU certificate placed in KTU and other - Legal boundaries ,land use, stakeholder on 27 January Information provided adequate at minimum, an information summary of the classification, total area, grant 2016 document listed such as : title, permit validity , NCR rights, - Field observation and  Land titles/user rights (Criterion 2.2)  Occupational health and safety plans interview with employee - Legal boundaries, land use, classification, total area, grant title, (Criterion 4.7); permit validity , NCR rights - risk assessment and mitigation,  Occupational health and safety plans (Criterion 4.7); emergency response plan, - risk assessment and mitigation, emergency response plan, training, training, accident records accident records  Plans and impact assessments  Plans and impact assessments relating to environmental and social relating to environmental and social impacts (Criteria 5.1, 6.1, 7.1 and 7.8); impacts (Criteria 5.1, 6.1, 7.1 and - main social and environmental impacts and mitigation measures, 7.8);  HCV documentation (Criteria 5.2 and 7.3); - main social and environmental - identification on HCV areas, maps, management and monitoring impacts and mitigation HCV measures,  Pollution prevention and reduction plans (Criterion 5.6);  HCV documentation (Criteria 5.2 and - identification of pollutants, management and reduction measures 7.3);  Details of complaints and grievances (Criterion 6.3); - identification on HCV areas, - nature of complaints, parties involved, status of case maps, management and  Negotiation procedures (Criterion 6.4); monitoring HCV - SOP, consultative, neutral, inclusiveness, timeframe, responsibility  Pollution prevention and reduction  Continual improvement plans (Criterion 8.1); plans (Criterion 5.6); - for all elements under 8.1, - identification of pollutants,  Public summary of certification assessment report; management and reduction - follow RSPO format

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) measures  Human Rights Policy (Criterion 6.13).  Details of complaints and grievances - policy statement should comply to the requirements of 6.13 (Criterion 6.3); - nature of complaints, parties Monitoring plan associated with public documents already established and involved, status of case available. For example for environmental documents: the management of HCV,  Negotiation procedures (Criterion RKL-RPL was reported every six months to BLH, reports related to the 6.4); management of K3 (occupational health and safety) are reported every three - SOP, consultative, neutral, months to Disnakertrans, reports hazardous and liquid waste are reported every inclusiveness, timeframe, three months to BLH, etc. responsibility  Continual improvement plans Update monitoring report publicly available. Evidence of delivery of the report in the (Criterion 8.1); form of receipts properly documented and archived in a file Receipt. - 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 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;

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) • 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 - “Kebijakan Etika” (Ethic Policy Written policy committing to a code of ethical conduct and integrity in all operations YES code of ethical conduct and integrity in all – SOC/Dp/4.01-64) Rev.03 and transactions was available in “Kebijakan Etika” (Ethic Policy – SOC/Dp/4.01-64) operations and transactions? dated 1st June 2014 Rev.03 dated 1 June 2014. b. Does the policy include as a minimum: - Dissemination of Ethic Policy Ethic policy includes several aspects, such as: to employee, contractor and - Social Responsibility  A respect for fair conduct of stakeholders in 2015 - Salary business? - Group discussion with - Infrastructure and accommodation  A prohibition of all forms of corruption, stakeholder in 27 January - Labour union bribery and fraudulent use of funds 2016 - Age of worker and resources? - Field observation and - Indiscriminative treatment  A proper disclosure of information in interview with employee - Protection against sexual harassment and violence accordance with applicable - Protection of reproductive rights regulations and accepted industry - Receipts and provision of gifts, entertainment or assistance in job, practices? corruption and fraud c. Is the policy documented and - Relation with supplier communicated to all levels of the - Occupational health and safety, and environment workforce and operations, including - Employee cooperatives contracted third parties? How is it - Human rights. communicated? The policy does include a respect for fair conduct of business, prohibition of all forms of corruption, bribery and fraudulent use of funds and resources, and a proper d. Are the documentation and communication disclosure of information in accordance with applicable regulations and accepted done in the appropriate languages? industry practices was described in procedure of social communication

Note to auditor: The workforce should be Dissemination to all level of workforce 7 October 2015, to stakeholders 14 October interviewed to determine level of understanding 2015. The documentation and communication done in the appropriate languages of policy (Bahasa Indonesia). Based on interview on 26 and 27 January 2016 it was verified that workforce and stakeholder understood the policy.

PRINCIPLES 2: COMPLIANCE WITH APPLICABLE LAWS AND REGULATIONS

Audit Report

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  List and Evaluation of Safety and The relevant legal requirement or regulations for Sungai Liput mill and estate have YES available? (Refer to relevant NIs or LIs for Health Legal Requirement been established and identified. Records were sighted on Evaluation on (Major NCR list of legal requirements)  Identification and Evaluation on Compliance of Regulation and Requirements – SOC/Form/4.06-01) update 4th 2016 – 01 b. Does the company have copies of the Compliance of Regulation and January 2016. closed) th Copies of the legal requirements were shown and maintained properly. The legal requirements? Requirements updated 4 January 2016 (SOC/Form/4.06-01 regulations were regarding to: lifting equipment, permits of machinery, safety Rev.01) committee, safety officer, medical insurance, monitoring of working environment, Note to auditor: A due diligence on the paramedic and first aid officer, clinic for workers, handling of hazardous materials company/area or management unit on legal Records of Implementation: including pesticides, medical check-up, firefighting team and equipment etc. compliance should be conducted prior to field  Notes of Meeting Safety audit. Any non-compliance should be verified Committee Records was sighted on Evaluation of Compliance of Regulation and during the field audit.  P2K3 decree letter from Dinas Requirements – SOC/Form/4.05-01) update 26th January 2016 include the Relevant legislation includes, but is not limited Sosial, Tenaga Kerja dan environment regulation, the new environment regulation was identified, such as to: regulations governing land tenure and land- Transmigrasi Aceh Tamiang “PermenLH 5/2014 waste water quality” and “PP 101/2014 Pengelolaan Limbah use rights, labour, agricultural practices (e.g. District No.560/002/2015 dated B3”. The copies of legal regulation was sighted on soft copy also on hard copy chemical use), environment (e.g. wildlife laws, 4 May 2015 include the environment regulation. pollution, environmental management and  Quarterly Safety Performance forestry laws), storage, transportation and Report The company has maintained a copy of all licenses both in hard and soft files. An processing practices. It also includes laws  Measurement Report of OHS overview of Evaluation of Compliance with Laws and Regulations is mentioned made pursuant to a country’s obligations under Parameters below: international laws or conventions (e.g. the  Valid permit of lifting equipment, 1. Law No. 13/2003 regarding Labour Decree of Ministry of Labor No.1/ 1999 Convention on Biological Diversity (CBD), ILO machinery etc. and Decree of Aceh Gevernor No188.44/997/KPTS/2013 re: Minimum Wage core Conventions and UN Guiding Principles on for 2014. The Company complies regarding:  Valid permit of boiler operator

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) Business and Human Rights. and lifting equipment operator, - Minimum Wage 2015 based on Governor of Aceh Regulation #81/2014 etc. dated 30 October 2014, IDR 1,900,000 per month. Regulation for  Medical Surveillance Reports minimum wage 2016 was available, which is Governor of Aceh  Valid permit of clinic from Aceh Regulation #60/2015 dated 30 October 2015, IDR 2,118,500 per month. Tamiang Regent - Prohibition of employment of children under the age of 18 years and No.441/KP2TSP-KL/36/2012 ban on pregnant and lactating women to perform spraying through SOP dated 9 November 2012 valid through, Ethical Conduct Policy No. SOC/DP/4.01-64 dated on June 01, until 9 November 2017 2014 2. Law No. 21/2000 regarding Labor Union. The company has issued the policy  Procedure identification and from the top management No. SOC/Dp/4.01-64, Revision 03, dated 1 June evaluation on compliance of 2014. In this policy the company allows their employee freely to perform the regulation and requirements labor union and provides facility for the meeting. Records pf bipartite meeting (SOC/PSM/4.05 Rev.05) update between Labor Association of Sungai Liput and Estate Management were 4th January 2016 available.  Evaluation on Compliance of 3. Permentan 07/2007 regarding Registraion of Limited Pesticides. All spraying Regulation and Requirements – operators have got certificate of limited pesticide training. (SOC/Form/4.05-01) update 26th January 2016 Major Non Conformance 2016-01:  Governor of Aceh Regulation #81/2014 dated 30 October  dr. Diana Kristiana who served as an honorary physician at the Sungai Liput 2014 Estate does not have a certificate Hiperkes. This is not in accordance with Permenaker no. 1/1976  Governor of Aceh Regulation  Certificate AK3U named Endro Kuswanto has been expired on 11 June 2015. #60/2015 dated 30 October  The last periodic testing of turbine No.TU.038/W1.05/1997 was carried out in 2015 29 December 2011 and turbine alternator No.560.470.3/192/Turbine-K3/2011  Ethic Policy (SOC/Dp/4.01- was carried out in 25 November 2011. This is not in accordance with 64) Revision 03, dated 1 Permenaker 4/1985 that stated periodic testing is annually. June 2014  Land area covered on PEL different with RKL RPL and HGU (Hak Guna Usaha). Area statement on PEL is 3,765.13 Ha, on RKL RPL is 3,729.51; and on HGU is 3,841.96 Ha  Specific medical examination for sprayer was not conducted in 2015, it does not comply with the Decree of The Minister of Manpower and Transmigration RI No.3/1986 clause 7 which stated that specific health examination shall be done for all sprayers at least once in a 6 months period.

Audit Report

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

2.1.2 A documented system, which includes written information on legal requirements, shall be maintained.

a. Is there a document system which includes  Identification and Evaluation on Procedure Identification and evaluation compliance against OHS regulations was YES the following? Compliance of Regulation and available. The PIC to manage the compliance was Safety Officer. The update - Personnel in charge to manage Requirements updated 4th frequency was conducted every 6 (six) month (first period on January and second - Set of legal documents January 2016 (SOC/Form/4.06- period on July) that last updated on period of 4th January 2016, the method of - Comprehensive list of international, 01 Rev.01) updating regulation was conducted by internet, email and/or by direct visits to the national, sub-national and provincial  List and Evaluation of Safety government bodies. List of applicable OHS regulations included the resume of laws which details the requirements and Health Legal Requirement requirements were available and maintained. The copies of the regulations were of specific to the mill and estate  Documented procedure distributed to related section according to their evaluation. operations. (SOC/PSM/4.05 Rev.05) for - Relevant sections within the law that identification and evaluation of The documented procedure was defined that the sustainable department was is identified and linked to activities legal requirement. conducted identification, verification and registered the all legal and other requirements include environment, social, work force and plantation issues. The b. Are the documents available to all levels of  Evaluation on Compliance of update frequency was conducted every 6 (six) month (first period on January and management? Regulation and Requirements – th second period on July) that last updated on period of 26th January 2016, the SOC/Form/4.05-01) update 26 January 2016 method of updating regulation was conducted by internet, email and/or by direct  License of hazardous waste visits to the government bodies, the new environment regulation was identified, temporary storage (TPS B3) such as “PermenLH 5/2014 Baku Mutu Air Limbah” and “PP 101/2014  License of waste water Pengelolaan LB3”. discharge (IPLC)  License of ground water The evaluation of compliance was conducted together with the relevant functions utilization (ABT) between sustainable team and representative from estate and mills. The communication to relevant functions was conducted by socialization from  RKL/RPL (Environment sustainable team to respected persons at mill and estate. monitoring and measurement

reports) The administrator/Document control in charge at estate/mill were handled several

Licenses and reports as obligation on local requirements, such as:  License of hazardous waste temporary storage (TPS B3) from Aceh Tamiang Regent No.302/2014 dated 1 April 2014 valid until 1 April 2019. Hazardous waste that allowed to store such as used oil, used filter, used battery, used lamp, and medical waste. There is an application letter for hazardous storage permit revision from PT Socfindo No.SL/X/Bi/127/2015 dated 4 November 2015 to BLH Aceh Tamiang District. The updated valid permit for waste

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) temporary storage has been issued by BLH Aceh Tamiang District No.660/1728 dated 17 November 2015. The permit include kind of waste that allow to stored such as used oil, used filter, used battery, used lamp, ex jerry can, containers ex pesticide, used rags, laboratory used, and medical waste.  License of waste water discharge (IPLC) from Aceh Tamiang Regent No.303/2014 dated 1 April 2014 valid until 1 April 2019.  License of river utilization (APU) from Aceh Governor No.691/BP2T/5915/2011 dated 2 November 2011 valid until 20 October 2014 to take surface water 15m3/hour. PT Socfindo has send application letter for extent the licence to Aceh Tamiang Regent No.SL/X/Bi/093/2015 dated 6 February 2015, there was no response and resent with new letter No/SL/X/Bi/110/2015 dated 11 August 2015. Field observation has done on 15 June 2015 by Dinas Pertambangan dan Energi Aceh Tamiang District. The technical recommendation has been issued from Dinas Pertambangan dan Energi Aceh Tamiang District No.545/978 dated 16 June 2015 to take surface water 20 m3/hour.  Licence of river utilization (APU) for estate operation (nursery) at Selele Village has been sent to Aceh Tamiang Regent with letter No.SL/X/Bi/093/2015 dated 6 February 2015. The technical recommendation has been issued from Dinas Pertambangan dan Energi Aceh Tamiang District No.545/977 dated 16 June 2015 to take surface water 11 m3/hour.  Environment monitoring and measurement reports (RKL/RPL)

2.1.3 A mechanism for ensuring compliance shall be implemented.

a. Is an internal audit for legal compliance  OHS Internal audit report on 12 OHS internal audit were planned annually. The last audit was on 12 November YES conducted annually and documented? November 2015 2015 conducted by approved OHS auditor by authority. The audit checklist  Environment Internal audit report covered the implementation of the all applied regulations. on 12 November 2015 Status of compliance with the applicable OHS laws and regulations were  Internal RSPO Audit 2015 evaluated, and evaluation of compliance result indicated that compliance status was justified with reference to the objective evidence of compliance. Example: safety committee, medical check-up and permits of transport and lifting equipment. Interview was conducted with the Safety Officer to review the implementation of regulations. Status of compliance with the applicable workforce, plantation and land titles was

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) evaluated during internal RSPO Audit 2015. Evaluation of compliance result indicated that compliance status was justified with reference to the objective evidence of compliance. Example: availability of legal pegs, certificate of limited pesticide training, minimum wage, labour law, employee social benefit. For environment issues there are conducted periodically (once in year) internal audit against the requirement of RSPO include the legal compliance evaluation. The last audit was on 12 November 2015. 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.:  Identification and Evaluation on Mechanism for ensuring compliance with all applicable local, national and ratified YES personnel in charge (PIC), source of info, Compliance of Regulation and international OHS laws and regulations has been implemented by Evaluation of frequency of update) for tracking changes Requirements updated 4th January Compliance against the Resume of OHS Legal Requirement twice in a year. The and communication of changes to 2016 (SOC/Form/4.06-01 Rev.01) evaluation was conducted by Safety Officer and reported to Mill and estate relevant sections of the legislation?  Documented procedure managers. Last review of the regulations requirements was conducted in 4th (SOC/PSM/4.05 Rev.05 dated 1st January 2016. June 2014) for identification and Valid applicable OHS regulations were registered including detail requirement evaluation of legal requirement. applied. Sources for information of changed regulations and laws were identified  Evaluation on Compliance of such as government office or via internet. Updating OHS law and regulations Regulation and Requirements – changes were well documented. The changes of applicable legal and other SOC/Form/4.05-01) update 26th requirements have been reviewed and socialized to workers. January 2016 The documented procedure was defined that the sustainable department was conducted identification, verification and registered the all legal and other requirements include environment, social, work force and plantation issues. The update frequency was conducted every 6 (six) month that last updated on period of 26th January 2016, the method of updating regulation was conducted by internet, email and/or by direct visits to the government bodies, the new environment regulation was identified, such as PermenLH 5/2014 baku mutu air limbah and PP 101/2014 Pengelolaan LB3.

The evaluation of compliance was conducted together with the relevant functions between sustainable team and representative from estate and mills. The communication to relevant functions was conducted by socialization from

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) sustainable team to respected persons at mill and estate.

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)  PT. Socfin Indonesia Sungai Liput Estate was established in 1930 therefore b. Are there documents showing history of 350/830/Dj.Bun.5/XI/2001 the organisation did not use document of Location Permit. land tenure available? (e.g. legal dated 23 November 2001  Plantation Operation Permit/Surat Pendaftaran Usaha Perkebunan (SPUP) # documents showing land status change,  Decree of Ministry of #HK.350/830/Dj.Bun.5/XI/2001 dated 23 November 2001, PT. Socfin Indonesia. Area of permitted: 336.85 Ha, 285.65 Ha, 354.40 Ha, 56.13 Ha, 1,998.53 Ha, 810.40 Ha. SIA and EIA reports, HCV assessment Agrarian/Head of BPN (National Land Agency) Location: Kec. Kejuruan Muda, Karang Baru, Kab. Aceh Timur. Permitted capacity of reports) palm oil mill: 23 ton FFB/hour.  HGU Certificates c. Are there documents showing the actual  HGU#111 (21 March 1998) Desa Seumadam, Kec. Kejuruan Muda, Kab. legal use of the land available? Aceh Timur. Held by PT. Socfin Indonesia. Total area 336.85 Ha. Already extended according to Decree from BPN #127/HGU/BPN/97 dated 17 d. Are the documents complete? October 1997.  HGU#112 (21 March 1998) Desa Alur Selawe, Alur Meranti and Sungai Liput, Kec. Kejuruan Muda, Kab. Aceh Timur. Held by PT. Socfin Indonesia. Total area 285.65 Ha. Already extended according to Decree from BPN #128/HGU/BPN/97 dated 17 October 1997.  HGU#113 (21 March 1998) Desa Tanjung Genteng, Kec. Kejuruan Muda, Kab. Aceh Timur. Held by PT. Socfin Indonesia. Total area 354.40 Ha. Already extended according to Decree from BPN #130/HGU/BPN/97 dated 20 October 1997.  HGU#114 (21 March 1998) Desa Tanjung Aspak, Kec. Kejuruan Muda, Kab. Aceh Timur. Held by PT. Socfin Indonesia. Total area 56.13 Ha. Already extended according to Decree from BPN #130/HGU/BPN/97 dated 20 October 1997.

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO)  HGU#115 (21 March 1998) Desa Medang Ara and Seleleh, Kec. Karang Baru, Kab. Aceh Timur. Held by PT. Socfin Indonesia. Total area 1,998.53 Ha. Already extended according to Decree from BPN #140/HGU/BPN/97 dated 10 November 1997.  HGU#116 (21 March 1998) Desa Mopoli, Kec. Kejuruan Muda, Kab. Aceh Timur. Held by PT. Socfin Indonesia. Total area 810.40 Ha. Already extended according to Decree from BPN #145/HGU/BPN/97 dated 27 November 1997. Total HGU: 3,841.96 Ha 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. a. Is there a legal map showing location of  Peta Patok HGU scale 1 : Legal boundaries clearly demarcated and maintained along the perimeters of YES boundary markers? 25,000 estate lands which were mapped with Global Positioning System (GPS). Field observation was conducted to pegs number: b. Is there physical presence of boundary  Checklist of EHS Patrol markers?  Field Observation to HGU pegs  #08 (04°07'49.75'' N and 97°59'43.51''E)  #05 (04°08'13.20'' N and 97°59'40.24''E) c. Is there an SOP for boundary demarcation and maintenance?  #04 (04°09'03.80'' N and 97°59'59.45''E) Realisation of pegs maintenance was sight on Checklist of EHS Patrol Note to auditor: Ground verification of boundary SOC/FORM/4.12-01), it was noted that pegs monitoring were conducted monthly markers using GPS should be conducted. with items checked were identity, condition and position of pegs. Priority should be on boundaries with other It was noted that several pegs have not been provided. They have been identified by estates, community areas, protected area and Division Assistant and reported to Agriculture Department via email on 12 January rivers 2016.

In the case of Associated Smallholders: List of pegs which have not been provided: d. Are there documents showing that the Division No pegs boundaries of associated smallholders have been recorded and verified by the I 19, 42, 44, 46, 47 mill? II 4a, 4b, 4c, 4d, 4e, 4f, 16a, 16b, 16c, 16d, 16e, 16f, 16g e. In case of boundary breach, is there proof IV 45, 65, 66, 74

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) of a mitigation plan being implemented? All plantation activities (harvesting, upkeep, manuring, etc) were carried out inside the legal boundaries, no activities conducted outside the boundaries.

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 - Group discussion on 27 Planted areas of the Estate are wholly on Government’s land, leased under HGU YES disputes? January 2016 as indicated above. Maps have been developed for estate indicating Legal - Procedure of Social Complaint demarcation and planted areas. Note to auditor: Due diligence should be Handling (SOC/PSM/9.02) conducted on the management to provide Rev.04 dated 1 June 2014) It was confirmed from the group discussion with Village Head around plantation evidence that there has been no historical or - Procedure Identification and on 27 January 2016 there were no land conflict at all land within estate and mill. current land dispute Compensation Calculation (SOC/PSM/9.05 Rev.00 dated Based on group discussion with Village Head around plantation on 27 January b. If there are or have been disputes, are 1 January 2010) 2016 and interview with Head Assistant of Estate, no land acquisition after 2005. there: - Documents to proof legal acquisition? A mechanism to resolve conflict which is accepted by all parties was described in - Records of FPIC process? the procedure for social complaint handling (SOC/PSM/9.02 Rev.04 dated 1 June 2014) including claim or conflict of land and in the procedure identification and c. If there has been acquisition involving compensation calculation (SOC/PSM/9.05 Rev.00 dated 1 January 2010) to compensation, are there: identify and determine calculation method to provide fair compensation due to - Records that Fair compensation has loss of land and customary rights where identified. Dissemination for procedure been provided and accepted by introduction was evident and documented. It was communicated on 19 November parties involved? 2010 to related parties (Village head, subdistrict head, subdistrict police, Local - Records that all affected parties are plantation and forestry department, local environmental agency, etc.). 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.

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) a. Does the company have cases of - Logbook of incoming letter By checking relevant documents such as minutes of meeting of stakeholder YES significant land conflict? (i.e. preventing - Group discussion on 27 meeting, and during the group discussion with stakeholder around plantation, it the company from operating normally) January 2016. was verified that no land conflict found at mill and estate. - SOC/PSM/9:02 Revision 03 on b. If the company has cases of conflict, are 1st September 2014 - Social However, the company has defined procedures for conflict resolution mechanism records of the following available? Grievance Handling specified in SOC/PSM/9:02 Revision 03 on 1 September 2014 - Social Grievance - Status of conflict Procedures Handling Procedures. Procedure explaining the land compensation process from - SOP/ mechanism for conflict identification of landowners, Input data (soil mapping), Negotiating compensation resolution (according to the agreement and witnessed by a competent witness), payment of - Implementation of SOP/mechanism compensation, and Documentation. - 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 - Logbook of incoming letter By checking relevant documents such as minutes of meeting of stakeholder NA of disputed area? - Group discussion on 27 meeting, and during the group discussion with stakeholder around plantation, it b. Is a dispute map available? January 2016 was verified that no land conflict found at mill and estate. c. Is there documented evidence of involvement and acceptance by the affected parties?

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).

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) a. Does the company have a policy to - Logbook of incoming letter By checking relevant documents such as minutes of meeting of stakeholder NA circumvent instigated violence to maintain - Group discussion on 27 meeting, and during the group discussion with stakeholder around plantation, it peace and order in current and planned January 2016 was verified that no land conflict found at mill and estate. operations? b. Is there any evidence of: - 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 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? - Map of Land Use right N/A FPIC were not applicable because PT Socfin Indonesia Sungai Liput Estate has - Group Discussion with b. Is there evidence that the identification of been established / started to be planted in around 1930. Land ownership before legal, customary or user rights has been stakeholders on 27 January

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) done through FPIC process? 2016 HGU was Erpacht Rights. c. Is there evidence that the FPIC process There was no identified the existence of indigenous land in the concession has been implemented in accordance to company. the company SOP? Where is this evidence recorded? (E.g.: Documents, Minutes of Company already has a valid land ownership that were HGU with clear meeting, Records, Agreements, Maps etc.) boundaries and markers HGU, also have a map of HGU and HGU boundary markers with the scale of 1: 10,000 issued by BPN complete with title, legend, d. Is there a map of the extent of legal, source, and Georeferenced. Map of Sungai Liput land use right was available. customary or user rights? Is this map of appropriate scale (1: 10,000)? Installation of the concession boundary markers have also been communicated and coordinated with relevant communities bordering and with the agreement of e. Was the map produced through both parties, it was confirmed during the public consultation and interview with participatory mapping with reference to stakeholder on 27 January 2016. A map of land title has accepted by the relevant SIA and HCV assessment? communities. f. Does the map have a title, legend, source, scale and projections/georeference? 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 - Group discussion on 27 PT Socfin Indonesia Sungai Liput Estate has been established / started to be NA affected parties available? January 2016 planted in around 1930, FPIC was not applicable. - SOC/PSM/9:02 Revision 03 b. Is there evidence that the agreement is However, the company has defined procedures for conflict resolution mechanism on 1st September 2014 - prepared through proper FPIC process? specified in SOC/PSM/9:02 Revision 03 on 1 September 2014 - Social Grievance Social Grievance Handling Handling Procedures. Procedure explaining the land compensation process from c. Does the agreement contain the following: Procedures - An action plan developed through identification of landowners, Input data (soil mapping), Negotiating compensation consultation with affected parties, is (according to the agreement and witnessed by a competent witness), payment of inclusive and evidence that members compensation, documentation. 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 - SOC/PSM/9:02 Revision 03 on Procedure of social communication and complaints handling, ethic policy, social YES (maps, agreement, records, impact 1 September 2014 - Social impact assessment report were available in appropriate forms and language assessment, benefit sharing and legal Grievance Handling Procedures (Bahasa Indonesia). The document can be provided to all parties by request. It arrangements) is available in appropriate - SOC/PSM/9:01 dated 1 was confirmed during group discussion on 27 January 2016 that all related parties forms and languages, understood and September 2014 Rev. 04 - understood the documents. accessible to affected parties? Social communication procedures Company also has defined procedures for conflict resolution mechanism specified Note to auditor: this should be cross checked to - Group discussion with in SOC/PSM/9:02 Revision 03 on 1 September 2014 - Social Grievance Handling a sample of the affected parties stakeholders on 27 January Procedures. Procedure explaining the land compensation process from 2016 identification of landowners, Input data (soil mapping), Negotiating compensation (according to the agreement and witnessed by a competent witness), payment of compensation, and documentation. 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 - Group discussion with Communities are represented through institutions or representatives of their own YES community in the negotiation process? stakeholders on 27 January choosing. It was confirmed that Village communities have delegated their representatives to the Village Head. Village Head are selected through local b. Is the representative accepted by the 2016 community? election and accepted by the community. 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:

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) 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; • 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  Management Plan period 2014 Management Plan for period 2014 - 2016 was established in order to achieve YES business or management plan with a – 2016 long-term economic and financial viability. The plan was approved by the Principle minimum planning period of 3 years?  SOC/PSM/4.15 Management of Director. The parameters stated in the management plan were including revenue b. Does it include the following: Change and profit, crop projection (FFB yield trends), CPO and PK extraction rate; - Land area statement (planting estimated estate cost (upkeep, research and development, harvesting, years, non-planted areas, i.e. HCV, processing, packing, transportation, depreciation) as well as mill cost (processing, conservation areas, fragile soils, repair and maintenance, overhead and depreciation). This plan was established enclaves) with updated location by considering economical parameters/assumptions such as inflation, US Dollar maps. Maps should have title, and Indonesian Rupiah (IDR) rate, CPO price, and FFB price. The management legend, source, scale and plan achievement was reviewed annually during the management review. Last projections/georeferenced management review was conducted in 2015. Minute of management review - Plan for management of scheme meeting was sighted. smallholders (where appropriate) Work programmes for the financial year had been planned for all field operation. - Quality of planting materials Cost on all field operations had been recorded daily for monitoring against the - Crop projection = Fresh Fruit budget by management staff in order to close supervision on field operation to Bunches (FFB) yield trends ensure work efficiency of the workers. These include preventive maintenance of - Mill extraction rates = Oil Extraction roads, vehicles, machinery etc.

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) Rate (OER) trends Based on soil map of Sungai Liput Estate, there was no peat. - Cost of Production = cost per tonne Technical and Technology Department and Agriculture Department developed of Crude Palm Oil (CPO) trends opportunity for improvement issued by Estate. Result of development and - Forecast prices improvement was communicated to Estate and Mill through email or directly site - Financial indicators – profitability visit. forecast (income vs cost) - Projected expansion (area, mill capacity, infrastructure, social amenities) - 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

Audit Report

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

a. Is there an annual replanting programme  Letter #TN/KS/Bi/015/16 on 14 Overall replanting program project for the next 5 years was available for Sungai projected for a minimum of five years? January 2016 regarding oil Liput Estate. Replanting Plan was exist for period 2016 – 2021. Year Division I Division II Division III Division IV Total b. Has it been documented? palm replanting program 2017- 2021 2016 0 0 54.98 48.66 103.64 c. Is the progress of implementation  Oil palm replanting program 2017 0 0 85.24 0 85.24 documented? 2013 - 2018 2018 0 0 50.60 0 50.60  Oil palm replanting program 2019 0 0 65.36 24.72 90.08 d. How does the programme take into 2020 0 49.59 0 21.50 71.09 2017 – 2021 consideration fragile soils such as peat? 2021 0 74.40 25.42 99.82 Is there a longer projection period (see  Realisation of planting in 2015 C4.3)?  Report of work progress of Replanting realisation 2015: 142.26 Ha in Division II and IV. Realisation was planting 2015 e. Is there evidence of a yearly review of below: the replanting programme? Block Area Number of plant 35 21.74 3,050 79 22.80 3,058 80 24.54 3,291 85 24.91 3,056 92 24.02 3,129 93 27.53 3,727 Total 146.54 19,311

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

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.

4.1.1 Specific Guidance: For 4.1.1 and 4.1.4:

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) 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. a. Have the SOPs for mills and plantation  SOC/PSM/7.10: Standard Standard Operating Procedures (SOPs) and Work Instructions for Estate been YES been documented? Operating Procedure for Oil documented. The procedures cover key processes, harvesting, b. Does the SOP cover key processes, Palm Plantation transportation, manuring, IPM, GAP, Supply Chain requirements for the harvesting, transportation, manuring,  SOP for Mill mill, land clearing, nursery, preparation before replanting, drainage system, IPM, GAP, Supply Chain requirements for maintenance of immature and mature upkeep. the mill, etc.? SOP for Estate: c. Is a copy of the SOP available on site and  SOC/PSM/7.10: Standard Operating Procedure for Oil Palm Plantation is it documented in an appropriate  SOC/PSM/7.10-15: Procedure of Soil Analysis language?  SOC/PSM/7.10-16: Procedure of Leaf Sampling d. Is there evidence that SOPs are  SOC/PSM/7.10-08: Procedure of Terracing implemented and understood by  SOC/PSM/7.10-06: Procedure of Drainage Ditch workers?  SOC-KKS/IK/05: Work Instruction of Planting of Oil Palm e. Are the SOPs appropriate and adequately  SOC-KB/IK/01: Work Instruction of Fertilising cover all estate and mill processes and  SOC-KB/IK/02: Work Instruction of Pesticide Spraying activities?  SOC-KKS/IK/01: Work Instruction of Nursery f. How are the SOPs made available at the  SOC-KKS/IK/07: Work Instruction of Harvesting point of use?  SOC-KKS/IK/12: Work Instruction of EFB Application  SOC-KKS/IK/12: Work Instruction of Weeds Controlling

 SOC-KB/IK/07: Work Instruction of Road Maintenance  SOC-KB/IK/08: Work Instruction of Peat Land Management  IPM Procedure: SOC/PSM/7.10-13: Procedure of Caterpillar Control, SOC/PSM/7.10-11: Procedure of Oryctes Rhinoceros Control SOC/PSM/7.10-21: Procedure of Rat Control SOC/PSM/7.10-21: Procedure of Ganoderma Control

Procedure and Work instructions in local language for supporting Mill activities have been established for all of its operations from receiving of FFB, processing CPO and palm kernel, dispatch and also supply chain requirements. The procedure also describes quality control check, sampling methods including its reporting from reception of FFB up to dispatch of CPO and palm kernel.

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) SOP for Mill:  SOC-POM/IK-01 FFB receiving in loading ramp  SOC-POM/IK-02 Operation of steriliser  SOC-POM/IK-02 Operation of housting crane  SOC-POM/IK-04 Operation of stripper  SOC-POM/IK-05 Operation of digester and screw press  SOC-POM/IK-06 Operation of continuous tank  SOC-POM/IK-07 Operation of purifier  SOC-POM/IK-08 Operation of vaccuum dryer  SOC-POM/IK-09 Operation of decanter  SOC-POM/IK-10 Operation of sludge separator  SOC-POM/IK-11 Operation of decantation pond and fat pit  SOC-POM/IK-12 Operation of silo biji  SOC-POM/IK-13 Operation of riplle mill  SOC-POM/IK-14 Operation of separating tank  SOC-POM/IK-15 Operation of silo kernel  SOC-POM/IK-16 Operation of clay bath  SOC-POM/PSM/7.08: Procedure of Receiving  SOC-POM/PSM/7.09: Procedure of Processing  SOC-POM/PSM/7.06: Procedure of Delivery of CPO and PK  SOC/PSM/4.10: Procedure of Waste Control  SOC/PSM/9.10: Procedure of Supply Chain Certification Standard Identity Preserve Copy of the procedures was available on site and is it documented in Indonesian language. Procedures were distributed by Sustainability Sub Department to all Divisions of Estate and Mill. Procedure has been disseminated periodically to all Estate and Mill employees through regular training, monthly briefing and morning circle. Interviews with the employees indicated satisfactory level of understanding and implementation in relation to their respective job function. Sample of estate operational implementation were taken in harvesting process in Block 45 Division II, pesticide spraying in Block 31 Division II. Mill operational implementation was conducted started from loading ramp to CPO dispatch

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) 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.  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  Training record, minutes of  How does the company keep track of and well documented. Organization keeps track of revision of the SOPs in revision briefing revisions? history in the cover of SOPs and work instructions. SOP was provided in  SOC/PSM/8.04 – Procedure Indonesian language. SOPs training and dissemination to all of employee has  Is there mechanism for: of corrective and preventive been conducted through regular training, monthly briefing and morning circle. - Translation of SOP into work action instructions in appropriate  Result of Agriculture The organization has well implemented internal control and monitoring processes languages? Department site visit that check and report on the implementation of the SOPs. These include - Records of training for all levels?  Result of Technology independent checks of the Mill and Estates by Department of Technology and - Internal control (e.g. audit and Department site visit Department of Agriculture Socfin Medan Head Office. review, field inspection) procedure Visiting of Department of Technology and Department of Agriculture Socfin in place to monitor consistent Medan Head Office was conducted to check implementation of the procedures implementation of SOPs? and work instructions which covered operational activities of plantations and mill - Trained and competent personnel including the maintenance of palm oil crop (upkeep, manuring, IPM), harvesting, assigned to carry out internal control FFB receiving, mill process and other supporting activities such as administration, activities? road infrastructure. Corrective action of all non-conformities found has been follow Implementation audits to be carried - up. out regularly covering implementation of all the SOPs? Last visiting of Department of Technology was on 2 – 3 March and 28 October - Procedure to address non- 2015 and 18 – 19 January 2016 and Department of Agriculture was on 11 – 13 compliance and corrective action for May and 8 – 10 September and 28 October 2015. continuous improvement? The organisation has established procedure to address non-compliance and corrective action for continuous improvement

4.1.3 Records of monitoring and any actions taken shall be maintained and available, as appropriate. a. Have the records been maintained on the - Daily work plan Record of monitoring and any action taken were maintained and available for YES following? - General Workgroup Task Data Estate and Mill. - Measurements or results of internal Collection Sheet

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) control and monitoring activities - Log sheet of station Estate (refer 4.1.2) Estate activities are programmed in annual program. Activities program are such - Records of corrective actions and as pest and diseases census, fertilising, spraying, cleaning of trench and road improvement undertaken maintenance. Records of activities were sighted, e.g. “Daily Work Plan”, “General Workgroup Task Data Collection Sheet”, “Work performance and material use (Prestasi kerja dan pemakaian bahan)”, Checking of FFB quality (Buku pemeriksaan ancak dan mutu buah). The record covered activities type, number of worker, quantity of agro chemical use, quantity of activities output and area of activities.

Mill The mill maintains records of processing monitoring reports, such as shift log sheets with records of operating conditions at each of the mill work stations including: FFB receiving and grading, sterilizing, threshing, pressing and digesting, clarifying, nut and kernel, boiler, quality control (in process, CPO and PK). Also sighted several records regarding equipment calibrations. Review operation daily reports demonstrate the consistency of procedures implementation.

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 N/A No FFB from the third party N/A sourcing? b. Is there a list of approved third-party FFB suppliers? 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.

Audit Report

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

Guidance: 4.2.1 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 plantations and soil conditions.

For National Interpretation: The range of appropriate techniques will be identified. a. Are there SOPs for Good Agricultural  SOC-KB/IK/01: Work Organization has been defined the SOPs for Good Agricultural Practices in YES Practices in managing soil fertility? Instruction of Fertilising managing soil fertility which documented in SOC-KB/IK/01: Work Instruction of b. Is there evidence that the SOPs have  SOC-KKS/IK/12: Work Fertilising. Manuring in Sungai Liput Estate was performed manually and mechanically. been implemented and monitored? Instruction of EFB Application  SOC-KKS/IK/15: Work Based on data on manuring booklet 2015, it was noted that manuring activities in Instruction of Solid Application 2015 has been implemented and monitored.  Manuring Booklet 2015  Manuring Booklet 2016

4.2.2 Records of fertiliser inputs shall be maintained. a. Is records of fertiliser inputs maintained?  Manuring Booklet 2015 YES Records of fertiliser inputs are well maintained in document Manuring b. Is there records to proof that the fertiliser  Manuring Booklet 2016 Recommendation “Booklet Pemupukan 2016”. Fertiliser inputs recorded each program is linked to the agronomic semester. Manuring recommendation in 2016 was defined based leaf sampling report? unit (LSU) and soil sampling unit (SSU). c. Is there records of fertilizer usage per Record of manuring realisation in 2015 shows that the realisations are in tonne of FFB production (>in Summary accordance with the plan/recommendation. The realisation are: Table, specific types of fertilizers)? Type of Recommendation Realisation Fertiliser (kg) (kg) NPK 2,646,620 2,636,329 Urea 13,990 13,881 RP 10,900 12,679 KCl 29,120 29,120 Dolomite 269,920 268,980

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) Kieserite 50,970 50,898 Borax 13,000 13,380

4.2.3 There shall be evidence of periodic tissue and soil sampling to monitor changes in nutrient status. a. Is there SOPs for tissue and soil  SOC/PSM/7.10-15: Procedure Soil analysis is conducted every 6 years. Last analysis was conducted in 2015 to YES sampling? of Soil Analysis 90 samples. Leaf analysis is conducted annually at minimal 2 months after 1st manuring b. Is there evidence of implementation of the  SOC/PSM/7.10-16: Procedure program was finished. Leaf sampling analysis was conducted in August 2015 to SOPs, including availability of records? of Leaf Sampling 114 samples. Leaf analysis was conducted by Bangun Bandar Analytical  Leaf Analysis Report, August c. Is there records of tissue and soil 2015 Laboratory. analysis?  Soil Analysis Report, 2015 Result of leaf sampling analysis and soil sampling analysis was incorporated into d. Is the results of the study incorporated the manuring program. Manuring program was developed based on leaf analysis into the fertilizer program? result and soil analysis result and conducted by Agriculture Department.

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  Manuring Booklet 2015 There was the nutrient recycling strategy performed by organisation such as land place?  Manuring Booklet 2016 application from Empty fruit bunch (EFB) and solid. Dosage of EFB application was described in the work instruction. EFB application is conducted once in two b. Does the strategy include the following?  Program and realisation of years with dosage:  Clear objectives and time-bound EFB application targets  Immature plant (0 year): 10 ton/Ha or 70 kg/tree  Immature plant (1 year): 20 ton/Ha or 140 kg/tree  Inventory of - EFB  Mature plant: 45 ton/ha or 315 – 320 kg/tree - POME EFB and solid application2015: - Fibre - Boiler ash Activity Total area Budget (Ton) Realisation - Kernel shell applied (Ha) (Ton) - Palm residues from replanting EFB application 536.20 11,928 15,158  Biomass recycling program

 Implementation and monitoring records

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) 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 Sungai Liput Estate, release The organisation has a detailed soil map showing gradients and soil types. The YES fragile soils and problem soils (refer to by PT. Socfin Indonesia scale 1 : latest version of soil map was issued by Department of Agriculture on 1 January 4.3.6)? 25,000 2015. The maps included maps of fragile soils. Based on maps of soils type, there are no fragile soils present in Sungai Liput Estate. Soil characteristic is presented b. Are maps georeferenced and of appropriate scale (1:50,000)? in table below: Type Total area Aquic Paleudult 756.50 Typic Endoaquept 566.30 Typic Hapludult 678.54 Typic Paleaquult 24.58

Typic Paleudult 1,755.73 Typic Udorthents 60.31

Slope Slope (%) Area (Ha) 0 – 4 1,331.24 4 – 12 1,677.40 12 – 24 571.68

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) 24 – 38 261.64

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  SOC-KKS/IK/05: Work The organisation has management strategy for planting on slopes above certain NO for plantings on slopes? Instruction of Planting limit such as terracing, as referred to company’s SOP and work instructions. The (Minor NCR b. Does the management strategy include  SOC/PSM/7.10: Procedure of Work instruction described preparation for planting including planting on slopes 2016-02) area has been developed by organisation. the following? Terracing

- Identification of steep areas not  SOC/DP/9.06-01: Manual of suitable for planting Handling and Monitoring of System for planting on slopes area is provided through terracing, levelling of - Policy of planting on slopes Erosion terrace, planting legume cover crops and determining of planting space. Sungai - SOPs to minimise soil erosion  SOC/PSM/7.10-14: Procedure Liput Estate has slopes 0 to 38 %. Area with 24 - 38% slope is 6.81%. based on local soil and climate of Soil Erosion Control on conditions, e.g. ground cover Marginal Land at Mature Practices to control and minimize erosion have been applied by terracing and management, biomass recycling, Planting planting legume cover crop and several practices at site: terracing, and natural regeneration  During harvesting or pruning, midrib is cut in three pieces and placed at soil or restoration instead of replanting surface. c. Is there proof of records of field  Chemical weeding is applied as minimum as possible, only circle and path inspection on SOP implementation? was sprayed.Stenochlaena and Lycopodiophytawere sprayed and the other weeds maintained keep growing.  Wild woody plants were not uprooted; only stem was cut in 30 cm length.

Minor Non-conformance 2016-02:  There was no evidence that erosion rate of slope area (24-38%) was monitored as required by SOC/DP/9.06-01.

4.3.3 A road maintenance programme shall be in place.

a. Is there a road maintenance programme  SOC-KB/IK/07: Work Estate has established annual programme of mechanical and manual road YES in place with supporting budget and Instruction of Road maintenance for government road, primary road, and secondary road. resources? Maintenance

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 Program Record of manual and mechanical road maintenance realisation was sighted and Realisation 2015 included block and length of road maintained.  Road Maintenance Program Division Realisation 2015 (m) Realisation 2016 January 2016 Manual Mechanical

I 6.300 11.100 16,100 II 36.242 14.160 2,105 III 5.600 0 2,070 IV 7.340 35.700 0

Road maintenance was well implemented. During field observation it was sighted that all roads, culverts and bridges were well maintained and passable for vehicle. (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  Soil Map of Sungai Liput Oil Based on soil map of Sungai Liput Estate, there was no peat soil in Sungai Liput Not Applicable subsidence management? Palm Estate dated 1 January Estate. b. Does the SOP make reference to the 2015 issued by Agricultural RSPO BMPs on peat? Department, scale 1: 25.000

c. How is subsidence being monitored? d. Are there records of subsidence 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

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) 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). 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  Soil Map of Sungai Liput Oil Based on soil map of Sungai Liput Estate, there was no peat soil in Sungai Liput Not Applicable before replanting on peat? Palm Estate dated 1 January Estate. b. Was a flood risk map provided as a result 2015 issued by Agricultural of the drainability assessment? Department, scale 1: 25.000

c. If the drainability assessment shows that an area is unsuitable for replanting, are 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).

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) a. Is there a management strategy in place  Soil Map of Sungai Liput Oil Based on soil map of Sungai Liput Estate, there was no peat soil in Sungai Liput Not Applicable for other fragile and problem soils? Palm Estate dated 1 January Estate. b. Does the management strategy include 2015 issued by Agricultural SOPs for the management of other fragile Department, scale 1: 25.000 and problem soils? c. Is inspection and implementation records available?

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  Documented procedure The documented procedure defined the method of water management plan NO place for mill and plantation with identified (SOC/PSM/4.22 Rev.01 dated include water source and distribution identification, volume of water utilization, (Minor NCR actions? 1st July 2015) regarding water parameter/standards of water utilization, identify the impacts include water 2016 – 03) b. Does the plan include the following? management at mill and estate effluents/wastes and also the method to reduce and control.  Identification of water sources  License of ground water usage The water sources at Sungai Liput were from surface water (APU) as the license No. 691/BP2T/5915/2011 dated  Efficient use of water of surface water utilization No.691/BP2T/5915/2011 dated 2nd November 2011 2nd November 2011 valid until  Renewability of water source valid until 20 October 2014 from Aceh Governor. PT Socfindo has send 20 October 2014 from Aceh  Impacts on catchment area and application letter for extent the licence to Aceh Tamiang Regent Governor local stakeholders No.SL/X/Bi/093/2015 dated 6 February 2015, there was no response and resent  Water analysis measurement  Access of clean drinking water all with new letter No.SL/X/Bi/110/2015 dated 11 August 2015. Field observation has for period 2015 by Sucofindo year round for stakeholders done on 15 June 2015 by Dinas Pertambangan dan Energi Aceh Tamiang  Records of water consumption  Avoidance of surface and ground District. The technical recommendation has been issued from Dinas period 2014 and 2015 at mill Pertambangan dan Energi Aceh Tamiang District No.545/978 dated 16 June 2015

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) water contamination  Water management programme to take surface water 20 m3/hour. The water was utilize for mill operations (include boilers, processes and domestics usage) that through the water treatment plant c. Have the identified actions in the plan 2016 (using physicals and chemicals method). For estate operations (include housing, been implemented? pesticides mixings and office operations) using ground water that don’t have permit use. The monitoring of water volume utilization was conducted, records was also sighted that water usage was majority from Sungai Liput Mill YTD December 2015 achieved 49,205.3 m3 for 70,313.72 ton FFB process. Water consumption for housing and office operations YTD December 2015 achieved 3,126 m3. Water usage for mill process 2014 achieved 57,751 m3 for 68,430.79 ton FFB process, and water usage for domestic was achieved 4,385 m3. The organisation has program to reduce water consumption, e.g. arranging water distribution to staff housing, reusing sterilizer condensate water for press station, reusing water from PPE and hazardous waste cleaner for spraying, flowmeter installation for all water utilization at mill. The measurement analysis for Tamiyang river water was conducted periodically (once a year) against the standard of PP82/2001 by third party laboratory (Sucofindo), last checked on 24th March 2015. From the result shows that all parameter were conformed within the standard.

Minor Non-conformance 2016-03:  The license of ground water utilization for estate (water used for estate operational) cannot be shown during audit.  There was no evidence that the measurement of estate ground water was performed to determine the quality. Based on interview, ground water used by workers to daily consumption. (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

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) restoration of riparian strips or acceptable maximum run-off levels.

a. Is there a map identifying water courses - SOC/PSM/9.07. Rev : 04. Sungai Liput Estate was traversed by small river: Block Block 6, 7, 16, 18, 26, 27, YES and wetlands? Dated 1 April 2015 - Procedure 28, 34, 39, 52, 64, 76, 79, 86, 87, 92, 94 and Tamiang River. Policy of riparian b. Are the water courses and wetlands of Riparian Conservation Area buffer zone management at or before replanting was provided in procedure Pengelolaan Areal Konservasi Sempadan Sungai (Management of riparian protected? Management. - Field observation on replanting conservation area - SOC/PSM/9.07 Rev.04 dated 1 April 2015). c. Are the riparian and buffer zones area maintained and restored in existing Procedure mentioned that riparian buffer zone is planted with beneficial plants plantation and replanting areas? and woody trees, manured with organic fertilizer such as EFB. Manual control was d. Is there SOP for riparian and buffer zone conducted based on monthly riparian monitoring result. Manual control realization protection? was recorded on activity record every month.

e. Has the SOP been implemented? The purposes of the activities are: - To protect river from chemical pollutant such as fertilizer, herbicides and

pesticides. - To protect some specific species that protected by government act that exist in the riparian area.

Appropriate riparian and other buffer zones been maintained and restored

Field observation was conducted on replanting area to verify procedure implementation. It was observed that only manual control conducted in the riparian buffer zone. This buffer zone is enriched with beneficial plants including Cassia cobanensis, Turnera sp. and woody trees including Melina (Gmelina arborea), cherry (Mutingia calabura), Asam Kandis (Garcinia parviflora), and Awar-awar (Ficus septica).

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).

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) a. Is the mill effluent treatment process in  Waste water analysis Sungai Liput Mill waste water (POME) was processed through a series of waste YES place? measurement period January – water treatment ponds: three anaerobic ponds and two aerobic ponds. POME is b. Is there a process in place for checking November 2015 monitored monthly as required by permit. The results of POME monitoring were and monitoring water discharge quality,  License of waste water reviewed including measurement of BOD, COD, pH, N Total, TSS, oil and fat for particularly BOD? discharge (IPLC) from Aceh January to November 2015. Tamiang Regent No.303/2014 c. Is the water discharge quality in The Environment Ministry Decree No. 5/2014 annex III required that BOD of dated 1 April 2014 valid until 1 compliance with national regulations? POME discharged is less than 100 mg/litre, COD discharge is less than 350 April 2019 mg/litre. The result of POME quality during this period was under 100 mg/litre d. Does the mill have a license for (average 85 – 98) for BOD and under 350 mg/litre (average 190 – 210) for COD. treatment, discharge or land application There is sighted the license of waste water discharge from Aceh Tamiang Regent of mill effluent, and is the mill in compliant No.303/2014 dated 1 April 2014 valid until 1 April 2019 with the requirements of the license?

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  Documented procedure The documented procedure defined the method of water management plan YES water usage, and are the procedures (SOC/PSM/4.22 Rev.01 dated include water source and distribution identification, volume of water utilization, implemented? 1st July 2015) regarding water parameter/standards of water utilization, identify the impacts include water b. Are there records of mill water use per management at mill and estate effluents/wastes and also the method to reduce and control. tonne of Fresh Fruit Bunches (FFB)?  Industrial report 2014 Mill water use per tonne of FFB is monitored monthly. Result of monitoring of mill  Industrial report 2015 water use per tonne of FFB was sighted for 2015. It was noted that mill water use per tonne of FFB period January to December 2015 (0.70 m3/ton FFB) was

decreased being compared with 2014 (0.84 m3/tonne FFB). Budget for water consumption was less than 0.6 m3/tonne FFB every year. The organisation has program to reduce water consumption, e.g. arranging water distribution to staff housing, reusing sterilizer condensate water for press station, flowmeter installation for all water utilization at mill, reusing water from PPE and hazardous waste cleaner for spraying.

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

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) (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?  SOC/PSM/7.10-13: Procedure The organization has documented IPM plan including type of pest and diseases, YES b. Does the IPM plan include the following? of Integrated Pest setting out of technique to be implemented (detection, census and treatment), Management Caterpillar and control (manual, biological or chemical), locations to be applied, and time frame  Identification of potential pests and Bagworm attack for implementation. Programme for IPM is established annually. IPM programme thresholds  SOC/PSM/7.10-11: Procedure includes pest and diseases detection, census and controlling, use of pesticide and  What are the techniques used of Integrated Pest Control herbicide. (cultural, biological, mechanical and Oryctes rhinoceros physical methods)? IPM plan was well implemented and documented, e.g.:  What are the native species used as  SOC/PSM/7.10-21: Procedure of IPM for rodent  Routine census of caterpillar is conducted monthly. Special census was part of the biological control conducted when there was attack. Based on result of caterpillar census in method?  IPM Program 2016: Caterpillar census, rat census and imago December 2015, chemical to control caterpillars was applied using trunk  Does it help in reducing the use of injection (Orthene) and HPS (High Power Sprayer) with pesticide Santador chemicals over a period of time? and larva of Oryctesrhinoceros hand picking and Cymbush.  Prophylactic use of pesticides  Routine census of rat. No application of Tyto alba (owls) as predator of rat.  Minimization of pesticide use  List of caterpillar attack situation Based on record of rat census in October – December 2015, there was no  Review on the plans to suit the  Recapitulation of caterpillar rat attack in Division I and IV. Attack was only in Division II and III. present condition such as  Hand picking of handpicking of its imago and larva of Oryctesrhinoceros. replanting? census  Recapitulation of rat attack The Oryctesrhinoceros and its larva hand picking was conducted at the c. Is there an SOP to implement the plan  Map of rat attack decayed parts of such palms, the palms naturally fallen and the palms still standing but presenting rotten tissues at the bottom. The controlling was and monitor its effectiveness?  Recapitulation of Oryctes larva conducted in immature upkeep and land clearing area. So far there was no d. Is there records of pest occurrence and 2015 attack of Oryctesrhinoceros. Control of Oryctesrhinoceros using chemical control?  Monitoring of beneficial plant was also conducted regularly based on determined program planting  Planted the beneficial plant as the host/nest for natural predator for

caterpillars (Eucanticona purcelata, cycanus sp). The beneficial plant such

as: Turnera subulata planted in the collection and the main road.

 Breeding of predators: Sycanus and red ant (semut rangrang) Result of Oryctesrhinoceros larva hand picking in 2015: Division Block Month Area (Ha) Rotten Quantity trees of Larva

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) II 35 June 10.70 3,022 73 35 September 21.98 3,050 6,510 92 June 22.67 2,102 317 93 June 23.94 3,418 368 85 June 17.50 2,415 265 III 63 November 10.70 1,477 2,605 62 November 8.35 1,136 3,722

4.5.2 Training of those involved in IPM implementation shall be demonstrated.  Attendance list Training of implementation of IPM has been conducted on 11 April 2014, 27 YES a. Is there records of training provided to  Minutes of briefing February 2015. Participant of training was staff and non-staff from Sungai Liput those involved in the implementation of Estate. List of participant attendance was sighted. 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).

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO)  Ethic policy point 11 The organisation has established ethic policy regarding safe use of chemicals: YES  SOC-KB/IK/02: Work safe use of chemical, efficient and effective. Instruction of Pesticide Procedure/work instruction SOC-KB/IK/02: Work Instruction of Pesticide Spraying Spraying described use of selective pesticides that are specific to target pests, weeds, or  Program of circle and path diseases. Each type of pesticide used have been defined specific target of pest, cleaning types of weeds, application doses per hectare which have minimal effect on non-  Pesticide list used in PT. target species and a broad plan of applications specified in the annual budget. To a. Does the organization have a policy on Socfindo 2015 - 2016 avoid development of resistance have been implemented by pesticides rotation. In safe use of chemicals? average pesticide rotation is 4 (four) times a year. Less harmful alternatives and IPM was applied by planting of beneficial plants, b. Does the organization have SOPs for use detection and census of caterpillar. of selective products that are specific to Pesticides used by Sungai Liput Estate has license and registered in the target pests, weeds, or diseases and Agriculture Department as mentioned in Pesticide Commission Book “Buku which have minimal effect on non-target Komisi Pestisida”: species? Pesticides License Date of expired i. Measures to avoid the Ally 20WG RI 0103011988837 31 December 2018 development of resistance (such Amistratop RI 01020120052228 17 October 2019 as pesticide rotation) should be Kesnakum 0.005 BB RI 01120120072950 17 October 2017 applied. Dacomin 865SL RI 0103012004 30 April 2019 ii. Is there a list of all pesticide with Daconil 75 WP RI 010201197489 23 June 2016 target species and justification of Decis 25 EC RI 0101011979387 4 January 2018 use? iii. The justification should consider Gramoxone 276SL RI 010301197436 18 March 2016 less harmful alternatives and IPM. Round up 486L RI 01030120001560 18 March 2016 Starane 290EC RI 0103011988854 10 August 2019 c. Is there evidence of implementation of SOP on the ground? It was noted that there were no agrochemicals being used which were not registered during this audit. During audit it was evidence that procedure was implemented.

The organisation has tried to change Starthene 75 WG (active ingredient: acephate E75% DF) with Dipel SC (active ingredient: Bacillus Thruringiensis). In 2015 there was 35 liter use of Dipel SC. Toxicity of Dipel was lower than Starthene.

Audit Report

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

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 and path The organization has defined pesticide application program in the annual budget - YES application program? cleaning Program of circle and path cleaning. Records of pesticides use were available in b. Is records of pesticides use available?  Pesticide list used in PT. “Pesticide use 2014 – 2015” and “Pesticide toxicity”. Pesticide toxicity provided Socfindo 2015 – 2016 information regarding active ingredient, LD50, quantity of use, quantity of active c. Do the records detail the active  Pesticide use 2014 - 2015 ingredient, total area applied, active ingredient use (kg/Ha).

ingredients used and their LD50, area  Pesticide toxicity 2015 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 specific situations identified in national Best Practice guidelines.

Specific guidance for 4.6.3: Justification of the use of such pesticides will be included in the public summary report.

4.6.3 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. a. Does the company have an IPM plan?  SOC/PSM/7.10-13: Procedure The organization has documented IPM plan including type of pest and diseases, of Integrated Pest setting out of technique to be implemented (detection, census and treatment), b. Has that plan been implemented? Management Caterpillar and control (manual, biological or chemical), locations to be applied, and time frame c. Is the effectiveness of the IPM plan Bagworm attack for implementation. Programme for IPM is established annually. IPM programme monitored?  SOC/PSM/7.10-11: Procedure includes pest and diseases detection, census and controlling, use of pesticide and of Integrated Pest Control herbicide. d. Are there records showing that the use of Oryctes rhinoceros pesticides have been minimised in IPM plan was well implemented and documented, e.g.: accordance with Integrated Pest  SOC/PSM/7.10-21: Procedure  Routine census of caterpillar is conducted monthly. Special census was Management (IPM) plan? of IPM for rodent  IPM Program 2016: Caterpillar conducted when there was attack. Based on result of caterpillar census in e. Has there been prophylactic use of census, rat census and imago December 2015, chemical to control caterpillars was applied using trunk pesticides? If so, justification must be and larva of Oryctesrhinoceros injection (Orthene) and HPS (High Power Sprayer) with pesticide Santador

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) provided in accordance to National Best hand picking and Cymbush. Practices.  List of caterpillar attack  Routine census of rat. No application of Tyto alba (owls) as predator of rat. situation Based on record of rat census in October – December 2015, there was no  Recapitulation of caterpillar rat attack in Division I and IV. Attack was only in Division II and III. census  Hand picking of handpicking of its imago and larva of Oryctesrhinoceros.  Recapitulation of rat attack The Oryctesrhinoceros and its larva hand picking was conducted at the  Map of rat attack decayed parts of such palms, the palms naturally fallen and the palms still  Recapitulation of Oryctes larva standing but presenting rotten tissues at the bottom. The controlling was 2015 conducted in immature upkeep and land clearing area. So far there was no  Monitoring of beneficial plant attack of Oryctesrhinoceros. Control of Oryctesrhinoceros using chemical planting was also conducted regularly based on determined program  Pesticide use 2014 – 2015  Planted the beneficial plant as the host/nest for natural predator for  Field observation caterpillars (Eucanticona purcelata, cycanus sp). The beneficial plant such as: Turnera subulata 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: Usage of pesticides 2014 2015 2016 Type of Realisa- Budget Realisa- Budget pesticides Budget tion tion Ally 20 WG 157.79 130.59 85 113.68 66,68 (litre) Amistratop 325 1.32 0.15 0.09 1.45 0.15 SC (litre) Bimaron 80 192.44 292.44 83 240.72 235.81 WP (kg) BM Notikus 250 66 125 400 35 0.005 BB (kg) Cymbush 50 384 257.2 246 354.67 99.30 EC (litre)

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) Gramoxone 1965 431.23 364.2 1126.50 370.15 (litre) Dacomin 865 857 94.9 148 1217 145.55 SL (litre) Round up 486 6,042.10 7,745 4,558 7,087.81 5,698 SL (litre) Santador 25 229 185.35 147 245.24 170.10 EC (litre) Starane 290 82.77 45.561 110 133.4 37.75 EC (litre)

Use of pesticides in the field was always lower than the planned budget. It also shows the company's commitment to always reduce pesticide usage and give priority to the prevention of mechanical, biological and integrated pest management. It was evidence that there was no prophylactic use of pesticides in Sungai Liput Estate. 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. a. Does the company have a complete  Ethic policy point 11 Organization already has a list of pesticides that are included in WHO Class 1a listing of WHO class 1A, class 1B, and  SOC-KB/IK/02: Work (extremely hazardous) 28 types, class 1B (highly hazardous) 56 types and Stockholm or Rotterdam Conventions Instruction of Pesticide Stockholm Rotterdam convention pesticide. pesticide? Spraying The organisation has established ethic policy regarding safe use of chemicals: b. Is there a policy, procedure or  Pesticide list used in PT. safe use of chemical, efficient and effective. Procedure/work instruction SOC-KB/IK/02: Work Instruction of Pesticide Spraying management plan committing to minimise Socfindo 2015 – 2016  Realisation and plan of described use of selective pesticides that are specific to target pests, weeds, or diseases. and eliminate use of these pesticides and Procedure described on safe use of pesticides and selection including minimise and paraquat? pesticides and paraquat use eliminate use of these pesticides and paraquat.

c. Are there records of minimisation of The record of realisation of paraquat use: pesticides and paraquat use? Type of pesticide 2014 2015 Budget 2016 Gramoxone (litre) 370.15 431.23 364.20 d. Where there is the use of the above Use of gramoxone in 2015 compared with 2014 was caused by growth and pesticides or paraquat, has justification in spreading of “pakis udang” in 2015 was wider than 2014 and in planting year 2015

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) line with national best practice guidelines block 79 and 80 were low land therefore gramoxone was used more for controlling been documented? “pakis udang”. e. 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). a. Is there SOP for chemicals/pesticides  SOP/PSM/4.10 – Chemical The organisation has established procedure on safe use of chemical. Procedure handling? handling described chemicals identification, MSDS availability, chemical handling (label and hazard symbol, storage based on hazard nature, use of PPE), expire b. Is there a training plan and training  SOC/DP/4.10-01 – Chemical records for workers who apply or handle handling chemical handling. pesticides?  Checklist of EHS patrol Chemical storage, containment, monthly checking, potential spill handling c. Is there evidence that training has been Pesticides have been applied and handled by trained spraying workers who have conducted in an appropriate language received usage of limited pesticide training. Training was delivered by Pesticide understood by the workers? and Fertilizer Controlling Commission of Agriculture Department Aceh Province d. Are pesticides handled, used or applied on 24 November 2011 and 20 June 2013. Training of pesticide handling was also only by persons who have completed the programmed in 2016. necessary training? Training covered handling of concentrate agrochemical and spraying method e. Are the workers involved in chemical including pesticide hazard.

handling or application able to Personnel interviewed (sprayer workers) can clearly explain the type of work demonstrate understanding of the including work methods and goals, materials used (pesticides) including the hazards and risks related to chemicals dosage and hazards and risks, personal protective equipment and first aid. used when interviewed? Pesticides are always applied in accordance with the product label and f. Are pesticides always applied in procedure. accordance with the product label? Pesticides storage was locked areas with limited access. The storage was g. Are MSDS for pesticides used readily ventilated. MSDS and hazard symbol label were provided nearby of pesticides. available for easy reference? Emergency shower and eye washer were also provided to anticipate in case of an h. Is appropriate safety and application emergency of pesticides handling. The possible spill was managed. Secondary equipment provided and used? containment was provided around the pesticides storage area. Spill kit was also i. Is PPE used appropriate according to provided in the area. PPE for handling of pesticides were provided including recommendations in any risk boots, apron, safety glass, respiratory mask and hand gloves. PPE used was appropriate according to recommendations in any risk assessments. PPE

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) assessments done? provided and used can be easily replaced if damaged. Chemical storage conditions, potential spill, consistency of PPE use was monitored through monthly j. Is appropriate PPE provided and used, EHS patrol. and can it be easily replaced if damaged? k. Does the management checked the Site visit in Block 31 Division II Sungai Liput Estate has been done to observe the workers usage of appropriate PPEs? 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. All the workers have used the personal protective equipment meet with the safety rules and work instruction such as: Apron, safety goggles, mask, hand gloves and safety shoes. All precautions attached to the products properly observed, applied, and understood by workers. Mandor as person in charge to check the workers usage of 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).  Documented procedure Pesticides were stored in the determined area separated from fertiliser and other YES a. Has the SOP for pesticide storage been (SOC/DP/4.11-05. Rev: 04 chemicals. Pesticides storage was provided in central warehouse and in each documented and implemented? dated 01/03/2015) Handling division. Pesticides storage was locked areas with limited access. The storage b. Are all pesticides stored according to pesticides containers wastes. was ventilated through cross flow ventilation. MSDS and hazard symbol label recognised best practices?  Documented work instruction were provided nearby of pesticides. Emergency shower and eyewash were also provided to anticipate in case of an emergency of chemical handling. PPE for c. Is there evidence that empty pesticide (SOC-KB/IK/02 Rev.01 dated handling of chemicals were provided including boots, apron, safety glass, containers are properly stored and 01 April 2015) regarding respiratory mask and hand gloves. The possible spill was managed. Secondary disposed off and not used for other pesticide application containment was provided around the pesticides storage area. Spill kit was also purposes?  Field observation at central warehouse and division provided in the area. EHS patrol was regularly performed monitor possible spill. d. Is there evidence observed in the field warehouse include spraying All empty pesticides containers were triple rinsed and collected in the temporary that pesticide containers are activities at estate operation storage of hazardous waste. Pesticides containers were transported by authorised indiscriminately disposed (in dump site) (Block 31 Division II) transporter, CV. Amindy Barokah. Records of pesticides containers quantity were or used for other purposes, .e.g. as waste  The training list of attendance evident. Liquid waste from pesticides was reused for the next spraying containers, flower pots? and training material applications also there are several ex-containers “jerry can” that may re-use for 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  SOC-KB/IK/02: Work Pesticide application was described in SOC-KB/IK/02: Work Instruction of

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) application? Instruction of Pesticide Pesticide Spraying. Spraying Training and dissemination on work instruction including risk and impacts of b. Is there training provided on work pesticide applications has been performed by the organization regularly. Last instruction including risk and impacts of  Training record pesticide applications?  Minutes of monthly briefing training was conducted on 10 and 12 November 2015. Training and dissemination  Field observation to spraying records were sighted. activity Site visit in Block 31 Division II Sungai Liput Estate 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. All the workers have used the personal protective equipment meet with the safety rules and work instruction such as: Appron, safety goggles, mask, hand gloves and safety shoes. All precautions attached to the products properly observed, applied, and understood by workers. Mandor as person in charge to check the workers usage of appropriate PPEs. (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 4.6.8 within reasonable time prior to application. a. Has aerial spray been applied? If yes, is Not Applicable No pesticides applied aerially. Not Applicable 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).

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO)  Training record YES There was no smallholder associated with estate. a. Has the company provided information  Training certificate materials on pesticide handling to all  Minutes of monthly briefing The organisation has provided information materials on pesticide handling to all employees and associated smallholders  Field observation to spraying employees. Training and dissemination on work instruction including risk and (if any) (see Criterion 4.8)? activity impacts of pesticide applications has been performed by the organization regularly. Training and dissemination records were sighted. b. Is there evidence of periodic training (in 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 Aceh Province on 24 November 2011 and 20 June 2013. Training of pesticide handling was also programmed in 2016. Note: Interview with workers and smallholders Site visit in Block 31 Division II Sungai Liput Estate has been done to observe the on their knowledge and skills in pesticides spraying and pesticide application in field. Interview with spraying workers were handling. 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).

 Documented procedure YES All empty pesticides containers were triple rinsed and collected in the temporary (SOC/DP/4.11-05. Rev: 04 storage of hazardous waste. Pesticides containers were transported by authorised dated 01/03/2015) Handling transporter, CV. Amindy Barokah. Records of pesticides containers quantity were pesticides containers wastes. a. Is there an SOP for proper disposal of evident. Liquid waste from pesticides was reused for the next spraying waste material?  Documented work instruction applications also there are several ex-containers “jerry can” that may re-use for (SOC-KB/IK/02 Rev.01 dated field application. b. Is there training provided to workers and 01 April 2015) regarding managers on proper waste disposal? pesticide application Training/briefing regarding disposal of waste material has been conducted to all c. Is there evidence of implementation of  Field observation at central workers and staffs. Based on interview with workers, they understood the disposal proper ways for waste disposal by the warehouse and division of waste material. company? warehouse include spraying activities at estate operation (Block 31 Division II)  The training list of attendance and training material

Audit Report

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

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  List Of Pesticides Operator 2016 List of pesticides operator was shown and updated periodically. There were 48 YES operators?  Diagnoses Card Report from operators listed. Specific health surveillance has been performed for all pesticide b. Is there records of annual medical recommended hospital and local operators included cholinesterase, spirometry and audiometry and the MCU report was evident. The surveillance was planned to be conducted once in a year. surveillance of pesticide operators? polyclinic  MCU Recapitulation Report on 28 The last medical check-up was held on 28 October 2014 at Anugrah Ibu Clinic c. Is there medical and treatment records of October 2014 for operator Medan. Medical check-up for period 2015 has not been conducted yet and all pesticide operators? scheduled on February 2016 based on email from general affair on 7th December pesticide named Puji Lestari, Tugiyem, Paiti, Sulimah, and 2015. Sukirni Medical treatments records were identified as Diagnoses Card Reports for the related workers. The recommended actions were recorded and reported to estate manager. Base on recommendation from manager the actions were executed and the results were maintained properly. Socialization of health surveillance results have also been conducted to the workers.

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

- SOC/Dp/4.01-64 dated 1 June The company’s Ethic Policy “Kebijakan Etika” chapter 8, Protection of YES a. Is there a policy statement preventing 2014 - Ethic Policy of PT Socfin Reproductive Right ensured prevention of pregnant and breast-feeding women pregnant and breast-feeding women from Indonesia from handling chemical or chemical work. The policy mentioned: handling pesticides? - Lists of female workers handling 1) Ensuring women who are pregnant were not do the tasks associated with pesticides (Data Anemer hazardous chemicals b. Is there a lists of female workers handling Semprot) January 2016 2) Ensure breastfeeding mothers were not do the work associated with the use pesticides available? - Form No. SOC.1/027 - Logbook of chemicals during breastfeeding their babies until the age of 9 months and c. Does the company have a system to “Records of Pregnant and getting adequate rest periods. identify pregnant and breast-feeding Breastfeeding Women” January women? 2016 Lists of female workers handling pesticides were available and well documented. Female workers handling pesticides in each department/division registered and d. Is there evidence showing that pregnant - Interviews with female sprayer and breast-feeding women are not workers of Sungai Liput Estate identified.

allowed to handle pesticides? on 26 January 2016 PT. Socfin Indonesia, Sungai Liput has a system to identify pregnant and breast- feeding women. The company carries out examination of pregnant women every

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) month at the clinic by midwives using a test pack. Data examination results of female sprayer and fertilizer workers in each division can be demonstrated.

Based on interview with workers on 26 January 2016 it was verified that pregnant and breast-feeding women are not allowed to handle pesticides.

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). st a. Is there a health and safety policy in  Health and Safety Policy OHS policy is established and reviewed by Management as dated on 1 February YES 2014 consisting commitment to increase level of safety and health including place?  OHS Target and Plan 2016 prevention from injury and work related disease. OHS policy was written in  Is it written in an appropriate  Notes of Meeting Safety Bahasa Indonesia and based on interview workers understand and aware about language? Committee 2015 the policy.  Has the policy been approved by an  Risk Assessment register 2015 authorized personnel and dated?  OHS Training Records 2015 An OHS plan was documented as part of internal system such as objective, target  Does the policy cover mitigation of  OHS Training Plans 2016 and program, management review, internal audit program, emergency simulation risks to workers health and safety at  Safety Performance Report program, monitoring and measurement program. all workplace activities? January – December 2015 Implementation of activities were sighted such as monitoring of OHS program,  Evaluation Records of Emergency  Are the workers aware of and implementation of management review (9 May 2015), internal audit activities (12 Simulation on 15 August 2015 understand the policy? November 2015), several monitoring and measurement activities along year 2015  Measurement Report of OHS consisting physical and chemical factor at work area (noise, vibration, dust, air b. Is there a health and safety plan in Parameters place? quality, etc.), health surveillance, water quality, etc.  Valid permit of lifting equipment,  Does the plan include targets for machinery etc. OHS implementation regarding to OHS plan has been reviewed and observed. improving occupational health and  Observations of OHS Detail information is described at section 4.7.2 in this report. safety? implementation on: OHS plan is monitored during management review meeting. Last review is  Does the plan reflect guidance - Spraying activities (block 31 provided in the ILO Convention 184 conducted on 9 May 2015 attended by management level (group manager) and Div II), and harvesting

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) (see Annex 1)? activities (Div II), warehouse relevant managers and chiefs. Minute of meeting is sight consisting information of and workshop. reviewing OHS management system performance including OHS plan. c. Is there evidence of implementation of - Sungai Liput Mill: the plan? OHS Training plan 2016 was shown such as: loading/unloading, production d. Is the effectiveness of the health and process including utilities,  Refreshment of work instruction for upkeep and production (January safety plan monitored? workshop, storage and and February 2016) e. Is the health and safety plan made laboratory.  Socialization of new tax regulation (January 2016) publicly available?  Handling hazardous waste based on new regulation (February 2016)  Emergency response for fire, flood, and earthquake (February 2016) f. Is there an action plan if targets are not achieved?  AK3U (February 2016)  SIO for heavy equipment (March 2016)  Licence for welder operator (April 2016)

OHS training plan have been held on 2015 such as:  First aid for nurse and midwife (18 – 20 March 2015)  Electricity training (13 – 16 April 2015)  Chemical training (2 – 7 May 2015)  Firefighting simulation (25 – 27 May 2015)  Laboratory assistance competencies (23 – 24 October 2015)  Handling chemical spill (12 August 2015)  Emergency response simulation (15 August 2015)

(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  SOC/FORM/4.13-02 - List of Risk Assessment for all operations regarding to health and safety was available YES for all operations where health and safety identification and evaluation of and reviewed on 8 December 2015. The risk assessment covers all the is an issue? OHS aspects organization’s processes and activities such as: spraying, fertilizing, weeding,  SOC/PSM/4.13 risk assessment road maintenance, harvesting, transportation, warehouse, workshop, b. Does the risk assessment cover all the procedure infrastructure, policlinic, office etc. Related risk assessments were reviewed if any organization’s processes and activities? accident has been occurred the latest review was on 1 May 2015. Several c. If any accidents had occurred, were these procedures related to issues raised have been documented and implemented. included in the risk assessments with Boilers, sterilizers were operated and all have been inspected and tested by third action plans to prevent further party. Steam vessel, air compressor, generator set, electrical installation, heavy

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) recurrence? equipment, lightning arrestor already have been inspected by local authority, the permits were evidence. d. Have the procedures and action plans been documented and implemented to address the identified issues? Boiler operation was monitored its parameters including pressure, temperature and water level, these parameters were recorded. Boiler was completed with e. Have all precautions attached to products automatic water feeding to prevent over heat and explosion in case of less water been properly observed and applied to level. Records of internal inspection and maintenance to the equipment were the workers? sighted e.g. electrical inspection, compressor inspection and welding equipment and heavy equipment. There was also safety patrol/inspection activity conducted monthly to identify any unsafe acts and conditions; based on verified reports second semester 2015.

Safety sign was provided to make workers aware on this hazard and risk. Electrical hazard symbol was provided at electrical panel. Housekeeping at Mill and Estate (office estate, storage, and workshop) in general was well monitored. 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.

The procedure for critical activities was established. The procedure was covering OHS control for working in confined space (e.g. cleaning of storage tank), working at height and welding. Work permit system was established.

Lock out tag out (LOTO) procedure has also been established and implemented especially intended for risk control of maintenance activities. Several controls such as providing PPE and administration control were applied to workers in some activities such as: mill maintenance process, spraying activities, handling of pesticides etc.

(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.

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) a. Are all workers involved in the operation  List Attendance of Risk Risk assessment and Work Instruction socializations have been performed. YES appropriately trained in safe working Assessment and Work Instruction Samples were taken for Risk Assessment and Work Instruction socialization for: practices (see Criterion 4.8)? socialization on 11 November harvesting, spraying and chemical warehouse workers. The socializations were conducted by Safety Officer who has been qualified as Safety Officer by the b. Are OSH training programs and training 2015. government. records available and conducted by  PPE Procedure SOC/PSM/4.21 qualified persons?  PPE Distribution Records/Kartu OHS training programs and records available and kept by safety officer. Training was conducted by qualified person, most of training on period 2015 held by c. Is adequate and appropriate protective Perkakas (SOC/Form/6.03-32) equipment available to all workers at the external trainer PJK3 such as PT Lanto Mas Anugrah and PT Safindo Raya. place of work to cover all potentially The procedure for management of PPE has been established. The PPE for each hazardous operations, such as pesticide activity has been established, e.g. working at Mill, working at generator set, application, machine operations, and land welder, working at laboratory, harvester, sprayer, fertilizer storage, chemical preparation, harvesting and, if it is used, storage, etc. burning? Observation during this audit generally concluded that PPE has been well d. Is PPE provided to workers and replaced provided and implemented. Workers in block 31 division II named Puji Lestari, when damaged? Tugiyem, Paiti, Sulimah, and Sukirni were interviewed during this audit and  Does the organization maintain a list generally they were understood the risk of their work and the purpose of using of PPE distribution? PPE.  Are workers observed wearing appropriate PPE? List of PPE was evident included: ear plug, helmet, ear muff, safety shoes, gloves, googles, mask, gas mask, apron etc. The records of PPE distribution when it was damaged were evident such as for: on 26 May 2015 to workers at mill (safety shoes), May 2014 to harvester (safety shoes, egrek cover), January 2015 to fertilizer (gloves), December 2015 to sprayer (apron, gloves).

(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 of Safety The responsible person was identified as Chief of P2K3 (Dw Hendro) and P2K3 YES responsible person/persons to implement Committee from local government secretary (Endro Kuswanto). The safety committee (P2K3) structure was evident OSH? Dinas Sosial Tenaga Kerja dan and been approved by local authority Dinas Sosial Tenaga Kerja dan Transmigrasi Aceh Tamiang Transmigrasi Aceh Tamiang District No.560/001/2016 dated 28 January 2016. b. Are meetings between the responsible District No.560/001/2016 dated 28 P2K3 secretary named Endro Kuswanto has decree letter as AK3U from Ministry persons and workers conducted on a January 2016. of Labour dated 11 June 2012 valid until 11 June 2015. regular basis, or as required by law, if - Notes of Meeting Safety any? Committee (P2K3) on 7 Notes of Regular Meeting of Safety Committee with workers were evident. c. Are minutes of meeting recording November 2015 Samples were reviewed for period 2015. The meeting was planned once in a attendees and issues discussed month as required by Permenaker 04/1987. Several concerns were discussed available? such as: progress accident for period 2015, PPE evaluation, chemical handling, d. Are concerns of all parties about health, request for safety signs and first aid box. The actions were monitored for safety and welfare discussed at these realisation and reported to management and local authority. 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  SOC/PSM/4.08 - Emergency Emergency respond procedure written in Bahasa Indonesia was described by YES emergencies? procedure SOC/PSM/4.08 - Emergency procedure and was covered reporting, responsibility  Do these cover all major potential  SOC/PSM/4.14 - Incident of all members of ERP Team, handling of ERP situation, mitigating of ERP emergencies, such as, but not investigation procedure situation, etc. Some situations were identified such as earthquake, flooding, fire, limited to fire, chemical spillage, and  List attendance of procedure hazardous spillage, explosion etc. potential natural disasters specific socialization Incident procedure written in Bahasa Indonesia was described by: SOC/PSM/4.14 for the region, e.g. earthquakes,  Training Certificate of First Aid - Incident investigation procedure. There were 5 accidents for period 2015 and volcanoes, etc.? Officer one of them was fatality. Accidents happened were investigated (SOC/Form/4.14-  Are accidents investigated and 02) such as last accident for worker named Tugiman on 28 November 2015. The action taken to prevent recurrence? record of accident investigation was evident and maintained properly. Accident  Are accident records provided to the report has reported to Dinas Tenaga Kerja dan Transmigrasi Aceh Tamiang local authority in accordance with District in 2x24 hours. local legal requirements, if any?  Available in the appropriate Emergency respond procedure has been socialized to workers during the simulation of emergency situation on 2 September 2015 and attended by all

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) language of the workforce? workers. The list of attendance was available. From workers interview in the field it was observed that the workers were clearly understood of what is required in b. Are the instructions on emergency the procedure. procedures clearly understood by all workers? Trained First Aid operators were provided in the field area. There were First Aid c. Are assigned operators trained in First trainings from local paramedic on 22 June 2015 for estate workers and mill Aid present in both field and other workers. First aid training from external was held on March 2015 for personnel in operations? charge Mula Marojahan Nadapdap as internal nurse coordinator and Suliani as paramedic. The First Aid equipment were available at worksites such as d. Is there records of training of the first harvesting area, spraying area, mill etc. and were checked in accordance with aiders? local regulation Permenaker 15/2008. e. Is first aid equipment available at worksites? Is the equipment available 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 Slip payment of medical care and All workers were covered by accident and medical care insurance including YES provided with medical care (refer to accident insurance October – contract workers. Slip payment for the insurance were available for payment in Criterion 6.5.3), and covered by December 2015 December 2015 for 722 employees. The insurances were still valid as seen by the accident insurance by the company? recent slip payment in December 2015 for estate and mill. For contract workers, the contract between the company and the contractor shall be in compliance. b. For accidents that have occurred, is there evidence that the affected workers received appropriate medical treatment, and was able to claim and receive

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 Reports and Safety performance for both mill and estates was calculated using frequency rate YES using Lost Time Accident (LTA) Investigation and severity rate. During 2015 the value for FR and SR was stated as below:

metrics? - Frequency Rate and Severity FR=13.95; SR=15,567.38 Rate Calculation Table

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. 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 4.8.1 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) 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).

Audit Report

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

For National Interpretation: Appropriate occupational training qualifications will be identified. a. Does the company maintain a list of staff, • Training Identification Matrix YES The list of staff and workers was evident contains male 577 and female 145 workers, smallholders and contract • Training Programme 2015 and (update December 2015). There was no smallholder and contract worker. workers whom training must be provided 2016 to? • Training Records Training need identification matrix 2016 has been conducted and the records b. Is there a formal training programme in (List Attendance, evaluation etc.) were evident. Training programme 2016 were sighted and established based on place that covers all aspects of the RSPO the training needs identification and covered all aspects of the RSPO criteria such Principles and Criteria? Does the formal as safety, environment, social, best practice, human rights, management training program include: program, HCV and ethical.  Regular assessment of training Training programme 2016 such as: needs of all staff, workers, smallholders and contract workers;  Refreshment of work instruction for upkeep and production (January  Training for workers on smallholder and February 2016) plots;  Socialization of new tax regulation (January 2016)  Documentation of all the training  Handling hazardous waste based on new regulation (February 2016) assessment needs, formal training  Emergency response for fire, flood, and earthquake (February 2016)  AK3U (February 2016) conducted and the list of participants attending these formal  SIO for heavy equipment (March 2016) training;  Licence for welder operator (April 2016)  Does the training for workers cover, The list of attendance and the training handout were evident such as: at minimum, to the following: o The health and  First aid for nurse and midwife (18 – 20 March 2015) environmental risks of  Electricity training (13 – 16 April 2015) pesticide exposure;  Chemical training (2 – 7 May 2015) o recognition of acute and  Firefighting simulation (25 – 27 May 2015) long-term exposure  Laboratory assistance competencies (23 – 24 October 2015) symptoms including the  Handling chemical spill (12 August 2015) most vulnerable groups  Emergency response simulation (15 August 2015) (e.g. young workers, pregnant women); o ways to minimise exposure to workers and their families;

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) 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 list Evidence of training for key person were verified and sighted and the records YES employee? • Employee training record (Catatan were maintained for each employee such as for welder, operator boiler, sprayer, Khusus Yang Pernah Diikuti) etc. The system to record personal training was established-in this record; the (SOC/Form/6.02-03) training which has been completed by each person was recorded in employee training records (SOC/Form/6.02-03) such as first aid, hazard identification in workplace, firefighting simulation, the use of measuring instrument and OHS training, tube explosion simulation, restricted use pesticide training, hazardous substance handling training, operator boiler training, pesticides training, etc.

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. 5.1.1 Guidance:

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) The EIA should cover the following activities, where they are undertaken: • 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); • 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  Penyajian Evaluasi Lingkungan Penyajian Evaluasi Lingkungan (PEL) for Sungai Liput Mill and Estate YES the scope of operation covering at (PEL) for Sungai Liput Mill and #RC220/475/B/III/1994 dated 17 March 1994. Initial Environmental Impact minimum the following: Estate #RC220/475/B/III/1994 Assessment documents (ANDAL, RKL and RPL) were available for Sungai Liput  Building new roads, processing mills dated 17 March 1994 Mill and Estate #522/1063/VI/2006 dated 12th June 2006. or other infrastructure;  Revision Document of RKL and The EIA (PEL, ANDAL, RKL and RPL) has been conducted and documented  Putting in drainage or irrigation RPL for Sungai Liput Mill and according to local requirements and include consultation with relevant systems; Estate #522/1063/VI/2006 dated stakeholders to identify impacts and to develop any mitigation measures.  Replanting and/or expansion of 12th June 2006 planting areas;  SOC/Form/4.04-01 EIA form For internal environmental aspect and evaluated its impact document, as required  Management of mill effluents updated on 8th December 2015 by the procedure SOC/PSM/4.04, the information of environmental aspect and (Criterion 4.4); Identification of Environmental impact was reviewed and updated at least once a year. Last review and update of th  Clearing of remaining natural Aspect environmental aspect and impact register was performed on 8 December 2015. vegetation; Document of environmental impact assessment included:  Management of pests and diseases  Building new roads, processing mills or other infrastructure; palms by controlled burning (Criteria  Putting in drainage or irrigation systems; 5.5 and 7.7).  Replanting and/or expansion of planting areas;  Management of mill effluents;

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) b. Has the EIA been conducted and  Clearing of remaining natural vegetation; documented according to local  Management of pests and diseases palms by controlled burning; requirements?  Result of stakeholder consultation. c. Does the assessment include consultation with relevant stakeholders to identify impacts and to develop any mitigation measures?

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  Procedure SOC/PSM/4.04 – Sungai Liput Mill and Estate implemented procedure for identifying environmental YES plan in place? Environmental aspect and aspect and evaluating its impact. As required by the procedure, the information of b. Is the environmental management plan impact identification environmental is reviewed and updated regularly. Last review and update of documented to include the following:  SOC/Form/4.13-02 EIA form environmental aspect and impact register for Sungai Liput Mill and Estate was th  Identification of responsible person(s); updated on 8 December 2015 performed on 8th December 2015. No changes of identification of impacts since Monitoring of Environmental  Potential impacts from current last audit. practices; Aspect  SOC/Form/4.04-01 form  Measures to mitigate negative updated 8th December 2015 Sungai Liput Mill and Estate has ensured that all activities with significant impacts; th Identification of Environmental environmental impacts were managed (Reviewed 8 December 2015). Control  Timetable for change (where changes Aspect measure were defined and implemented for ensuring that negative environmental in current practices are required). impact were prevented or mitigated. There were several types of control  Environmental management measures defined: engineering control, administrative control and PPE. The c. Has the environmental management plan plan 2016 implementation of those control measures are monitored during monthly been implemented? environmental patrol and also round of internal audits.

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.

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) a. Does the plan incorporate a monitoring  Procedure PT Socfin Indonesia – Sungai Liput has programmed to reduce negative effect YES protocol? SOC/PSM/4.04 – from their process which is summarizing at environmental management programme. These plans incorporate with monitoring protocol and adaptive to b. Is the monitoring protocol adaptive to Environmental aspect and operational changes? impact identification operational changes. The plans were reviewed in the end of the year to determine  SOC/Form/4.13-02 EIA the effectiveness of the plan. c. Is the monitoring protocol implemented to form updated on 8th monitor the effectiveness of the mitigation December 2015 measures? Monitoring of

d. Is the plan reviewed at a minimum every Environmental Aspect two years to reflect the results of  SOC/Form/4.04-01 form monitoring and where there are updated 8th December operational changes that may have 2015 Identification of positive and negative environmental Environmental Aspect impacts?  Environmental management plan 2016

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; 5.2.1 • Identification of HCV habitats, such as rare and threatened ecosystems, that could be significantly affected by the grower or miller;

Guidance: 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

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) 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) - HCV identification and Analysis HCV assessment was done in July-August 2011 by Faculty of Forestry, Bogor YES assessment been conducted and cover the report, September 2011 Agricultural Institute. The assessor team consisted of six (6) members (Ir. Djoko following: - Procedure of HCV Arie Sulistianto, Ir. Heru Bagus Pulunggono, MSc., Ahmad Fasial Siregar, S. Hut.,  Presence of protected areas that Management and Monitoring Sutopo, S. Hut., M. Sayidina Ali, Amd., Udi Kusdinar, S. Hut.) and was led by Ir. could be significantly affected by the (SOC/PSM/9.06) Rev 02 dated Nyoto Santoso, MS. Based on the list of HCV RSPO approved assessor updated grower or miller; 1 April 2015 on Sep 1, 2012, the leader and all the members of HCV assessor have been  Conservation status (e.g. IUCN - Procedure for Management of approved and the approvals are still valid during the assessment. Riparian Area Conservation status), legal protection, population Based on assessment report, identified HCVs were: HCV 1.2 (endangered (SOC/PSM/9.07) Rev 04 dated status and habitat requirements of species), HCV 4.1 (river) 177.97 Ha, and HCV 6 (cemetery) 1.74 Ha, within total 1 April 2015 rare, threatened, or endangered area of 179.71 Ha or 4.82 % from total HGU of Sungai Liput area (3,729.51). (RTE) species that could be significantly affected by the grower or Identified HCV habitats and rare, threatened or endangered species, such as miller. Macaca fascicularis are managed and monitored based on procedure No.  Identification of HCV habitats, such as SOC/PSM/9.06 Rev 02 dated 1 April 2015. Buffer zone of river was also identified as HCV areas were managed based on Procedure (SOC/PSM/9.07). rare and threatened ecosystems, that could be significantly affected by the HCV Management & Monitoring Program was available as per requirement, which grower or miller; was drafted according to internal Socfin’s Procedure of “HCV Management & b. Was the HCV assessment performed by a Monitoring” No. SOC/PSM/9.06 rev 00 dated Jan 01, 2013. Examples of qualified HCV assessor? management and monitoring activities within the program were riparian area management as a buffer zone (SOC/PSM/9.07) by manual upkeep activity, c. Was the HCV assessment performed in instead of using chemical to eradicate weeds, applied organic fertilizer (Empty consultation with relevant stakeholders? Fruit Bunch), planting of trees; Signage instalment in strategic places; HCV area d. Does the HCV assessment include dissemination to stakeholders; training for HCV appointed operators, lining of checking of available biological records? cemetery borders, etc. e. Does the HCV assessment include both Since identified HCV areas are now still overlapped with planted areas, the the planted area itself and relevant wider company commit not to plant oil palm in HCV areas during replanting as their landscape-level considerations (such as management plan. This was checked during visit of replanting area. Sungai Liput wildlife corridors)? management has appointed dedicated and trained officers from all divisions to carry out HCV monitoring program. The dissemination of HCV and RTE

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) f. Was the HCV assessment performed in awareness was delivered by Head of Sustainability, Mr. Hasan Bisri in January accordance to the latest methodology 2013 for all workers and stakeholders. A more specific training was delivered for 2 available at global and national level? HCV operators and 2 security officers in each division regarding their job g. Are identified HCVs mapped? descriptions on HCV. HCV operators conduct HCV monitoring program every month, while security officers make daily patrol report to prevent HCV area from violation as explained in their job descriptions. If any severe violation in HCV areas occurs, there will be disciplinary measures for workers, while for local community this will be reported to the authority. Management of PT. SOCFINDO Sungai Liput held regular public consultation involving stakeholders including local communities that also disseminated and discussed HCV issues. No records of objection from stakeholders and local communities were found and they supported SOCFINDO Sungai Liput to maintain HCV area. HCV assessment and management ha include both the planted area itself and relevant wider landscape-level considerations. HCV area has been mapped into “Peta Kawasan Bernilai Konservasi Tinggi Kebun Sungai Liput” scale: 1:25.000.

(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.

Specific Guidance: 5.2.2 These measures will include: • 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? - HCV Identification and Based on assessment report, identified HCVs were: YES Analysis Report in PT. b. If HCVs and/or RTEs are present, has a - HCV 1.2 (endangered species), Socfindo, Sungai Liput Estate, management plan containing appropriate - HCV 4.1 (river) 177.97 Ha, and by Faculty of Forestry Bogor measures that are expected to maintain HCV 6 (cemetery) 1.74 Ha, Agricultural University (IPB), - and/or enhance them been prepared? The Within total area of 179.71 Ha or 4.82 % from total HGU of Sungai Liput area (3,729.51). 2011. measures should include the following: - Final Report of HCV  Ensuring that any legal requirements Identified HCV habitats and rare, threatened or endangered species, such as Management and Monitoring relating to the protection of the Macaca fascicularis are managed and monitored based on procedure No.

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) species or habitat are met; Plan, Sungai Liput Estate, PT. SOC/PSM/9.06 Rev 02 dated 1 April 2015. There was no fauna within critically  Avoiding damage to and deterioration Socfin Indonesia endangered (CR), nevertheless there were 5 birds protected status by PP 7 No. of HCV habitats such as by ensuring - SOC/PSM/9.06. Rev : 02. 1999 and 1 reptile App II by CITES, As follows: that HCV areas are connected, Dated 1 April 2015 - Procedure corridors are conserved, and buffer of HCV Management and No Local Name Scientific Name IUCN Appendix zones around HCV areas are created; Monitoring.  Controlling any illegal or inappropriate - SOC/PSM/9.07. Rev : 04. A Mammals hunting, fishing or collecting activities, Dated 1 April 2015 - Procedure Macaca LC ver 3.1 II 1 Kera ekor Panjang and developing responsible measures of Riparian Conservation Area fascicularis 2010 to resolve human-wildlife conflicts Management. Felis bengalensis LC ver 3.1 2 Kucing kuwuk (e.g. incursions by elephants). - Report of HCV Monitoring, 2010 Sungai Liput Estate c. Are the measures contained in the B Aves Observation at HCV area Arachnothera LC ver 3.1 management plan actively implemented to 1 Pijantung kecil maintain and/or enhance HCV values? longirosta 2010 Anthreptes LC ver 3.1 2 Burung madu kelapa d. Are the HCV values and the presence of malacensis 2010 RTEs periodically monitored? Rhipidura LC ver 3.1 3 Kipasan belang e. Are the field inspections conducted javanica 2010 Halcyon LC ver 3.1 regularly to ensure implementation of 4 Cekakak belukar mitigation plan (especially along areas amymensis 2010 bordering natural area)? Ardea sumatrana LC ver 3.1 5 Cangak abu 2010

C Reptilia Varanus salvator LC ver 3.1 1 Biawak 2010

The HCV Management Plan at Sungai Liput Estate, as follows :  Inventory and identification of planting flora in HCV area  Border sign  Warning sign for HCVs area, flora, and fauna  Patrol of HCVs area  Enrichment in HCVs area  Socialization for Community  Training  Maintain SOP

Audit Report

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

The realization of the monitoring program was well recorded and has been verified during the assessment. (Indicator 5.2.2, 5.2.3 & 5.2.4). Sungai Liput held regular public consultation involving stakeholders including local communities that also socialized and discussed HCV issues. No records of objection from stakeholders and local communities were found and they supported Sungai Liput to maintain HCV area. The local communities have right to access and utilize natural resources in HCV area, for example: take clean water, fishing etc, entering cemetery area as long they don’t damage the HCV areas (Indicator 5.2.5).

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 - Procedure of HCV The company have policies or rules to protect RTE species, it was mentioned in YES to protect RTE species? Management and Monitoring the Procedure of HCV Management and Monitoring (SOC/PSM/9.06). It was b. Is there a programme to regularly (SOC/PSM/9.06) Rev 02 dated stated that the company established information and warning to protect the 1 April 2015 protected species and regularly educate the workforce and communities about the educate the workforce about the status of - Procedure for Management of status of the RTE species. the RTE species? Riparian Area Conservation c. Is there evidence or action taken to (SOC/PSM/9.07) Rev 04 dated Inspection were conducted to monitor the program, several records were implement the rules and programs? E.g. 1 April 2015. evidence such as: monitoring of cemetery, monitoring of protected wildlife and Inspections conducted to check no - Group discussion with worker monitoring of riparian for period January to December 2015. traps/snares put up within or nearby and stakeholder on 27 January areas. 2016 During group discussion with worker and stakeholder on 27 January 2016, it was d. Have appropriate disciplinary measures verified that there is no case regarding worker or communities that found have been imposed in accordance with captured, harmed, collected or killed any RTE species. company rules and national law, should 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 Plan 2014 HCV Management Plan of PT. Socfindo, Sungai Liput has contained ongoing YES ongoing monitoring of status of HCV and - HCV Management Plan 2015 monitoring of status of HCV and RTE species that are affected by plantation or RTE species that are affected by - HCV Management Plan 2016 mill operations. The status documented and reported in monthly basis. plantation or mill operations? - Evaluation of HCV Management Plan 2015 The outcomes of monitoring in 2015 were fed back into the HCV management b. Is the status documented and reported? - plan of 2016. c. Are the outcomes of monitoring fed back into the management plan?

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  Final Report of HCV Based on HCV map and group discussion on 13 January 2016 with local N/A rights of local communities? Management and Monitoring communities there was no HCV set-asides with existing rights of local communities. b. Who are the affected communities? Plan, Sungai Liput Estate, PT. Socfin Indonesia c. Is the identified HCV areas mapped?  Report of HCV Monitoring, d. Is there evidence of stakeholder Sungai Liput Estate consultation and negotiated agreement,  Group discussion with in accordance to FPIC principles, with stakeholders on 27 January local community to optimally safeguard 2016 both the HCVs and rights of local communities? e. If a negotiated agreement cannot be reached, is there evidence of sustained efforts to achieve an agreement? Refer to specific guidance for 5.2.5.

Audit Report

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

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  SOC/PSM/4.11: Procedure of Identification of waste and pollution sources from Sungai Liput Mill and Estate YES produced? Waste Control activities was evident. The source of pollution, type and control method of waste was recorded (SOC/Form/4.11-01 – Waste Register). b. Is there a registry/list of pollution  SOC/Form/4.04-01: sources? Identification of Environmental The waste products from estate generally were domestics waste and also several Aspect hazardous waste from estate operations activities as detailed below (but not  SOC/Form/4.11-01: Waste limited): Register  Ex-pesticides containers (bottles and jerry cans)  Used battery 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  Depericaper waste  Empty bunch  Boiler ash  Chemicals jerry can and bottles  Gunny sacks from chemicals materials  Sacks resulted from fertiliser materials  Welding materials from workshop activities  Lubricants from workshop materials

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO)  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  Documented procedure The disposal methods were described on documented Procedure YES their containers that are used and kept on (SOC/DP/4.11-05. Rev: 04 (SOC/PSM/4.11) Rev-04 dated 1-April-2014 detailed as follows: site? dated 01/03/2015) Handling Waste category, such as: b. How are chemicals and their containers pesticides and chemicals 1. Hazardous waste, separated for reuse and non-reuse 2. Non-hazardous waste, separated for non-organics (economic and non- stored and disposed off? Is it in containers wastes. economic value) and organics (economic and non-economics). accordance to best practices? (as  SOC/PSM/4.11: Procedure of prescribed by manufacturers’ labels, local Waste Control Disposed methods: requirement, national or international best  SOC/Form/4.11-01: Waste practice) Register 1. TPA (organics and non-organics)  Record of hazardous and non- 2. TPS B3 managed by licensed vendors c. Are collection and disposal records of hazardous waste 3. Reuse chemicals and their containers  Hazardous waste manifest 4. Send back to supplier/vendors maintained? 5. Burnt as boiler fuel  Observation to temporary storage of hazardous waste  Record of hazardous waste All empty agrochemical containers were triple rinsed, the jerry can were reused to (SOC/Form/4.11-03) spraying activities, while bottles containers were stored in the designated area and categorized as hazardous waste (B3). Records of chemical containers  “Laporan pengelolaan LB3” quantity disposed were evident. Liquid waste from agrochemical was reused for (SOC/Form/4.11-02) the next spraying application.  Permit of temporary storage of

hazardous waste for Sungai While the ex-fertilizer sacks was also rinsed and reuse for fertiliser distribute Liput Mill from Bupati Aceh “untilan” at estate operations. Several ex-chemicals materials containers that use Tamiang No.302/2014 dated 1 at mills operations such as laboratory chemicals ex-containers, boiler additive April 2014 valid until 1 April liquids, lubricants, workshop materials, use battery, etc. were categorized as 2019 hazardous wastes that stored at hazardous waste temporary warehouse (TPS B3)  Permit temporary collect of that will be managed by licensed vendor: CV. Amindy Barokah for transporter and

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) hazardous waste for CV Amindy collector for used oil; PT. Wahana Pamunah Limbah Industri as collector for Barokah from Governor North medical waste, used filter, and used container; PT Non Ferindo Utama as Sumatera collector for used battery. No.188.44/452/KPTS/2014 dated 19 June 2014 valid for 5 License of hazardous wastes temporary storage (TPS B3) as issued from Aceh years Tamiang Regent No.302/2014 dated 1 April 2014 valid until 1 April 2019, defined that the time limit was 180 days because produce (less than) < 50 kg per days. The license include: used oil, used battery, used oil filter, used lamp, and medical wastes. There is an application letter for hazardous storage permit revision from PT Socfindo No.SL/X/Bi/127/2015 dated 4 November 2015 to BLH Aceh Tamiang District. The updated valid permit for waste temporary storage has been issued by BLH Aceh Tamiang District No.660/1728 dated 17 November 2015. The licence include kind of waste that allow to stored such as used oil, used filter, used battery, used lamp, ex jerry can, containers ex pesticide, used rags, laboratory used, and medical waste.

Manifest of disposal were sighted for 28th January 2015, 5th June 2015, 7th December 2015. Others records sighted, such as: “Catatan limbah ekonomi” (SOC/Form/4.11-03) and “Laporan pengelolaan LB3” Period January -September 2015 (SOC/Form/4.11-02).

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. • 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 5.3.3 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.

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.

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) a. Is there a documented waste management  Documented procedure Procedure waste handling including hazardous waste handling has been YES and disposal plan to avoid or reduce (SOC/DP/4.11-05. Rev: 04 established and implemented. The procedure required waste to be segregated pollution? dated 01/03/2015) Handling from point of sources. In addition Mill and Estate also established waste register, b. Does the waste management and disposal pesticides and chemicals which described wastes sources from each activity/location, its classification (organic, inorganic or hazardous), and its disposal, reusing or recycling. EFB and plan, at minimum, include measures for: containers wastes. solid from decanter were used for fertiliser in Sungai Liput Estate. Fibre and Shell  Identifying and monitoring sources of  SOC/PSM/4.11: Procedure of from Sungai Liput Mill was used for boiler feed. Rest of shell was sold to the third waste and pollution? Waste Control party.  Improving the efficiency of resource  SOC/Form/4.11-01: Waste

utilisation and recycling potential of Register It was observed that organic and inorganic waste was segregated at point of wastes as nutrients or converting  SOC/Form/4.04-01: source. Mill and Estate including housing has provided different colour of waste them into value-added products (e.g. Identification of Environmental bin for each type of waste. Organic and inorganic wastes from Mill and Estate through animal feeding Aspect including housing were disposed to landfill in the Estate area. Areas of organic programmes)?  Observation at mill and estate division office 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 their containers? There are evident the measurement periodical report include air ambience quality;

 Reduction, re-use and recycle of 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 December 2015 by UPT Environmental implemented? Laboratory BLH North Sumatra Province. Air ambience quality was measurement at office, mill, and housing. Air ambience quality in accordance to PP 41/1999; d. Is there evidence that waste has not been Boiler emission in accordance to PermenLH 7/2007; generator emission in disposed off using open fire? accordance to PermenLH 13/2009; vehicle emission in accordance to PermenLH 5/2006.

Hazardous wastes generated by Mill and Estate are used oil, used oil filter, used battery, used rags, medical waste and used lamp. Temporary storage of hazardous waste was available to collect hazardous waste prior to be transported by licensed vendor. Disposal of hazardous waste were performed in coordination with Sustainability Sub Department in Medan Head Office. Disposal of hazardous waste was completed with manifest. Manifest of disposal were sighted for 28th January 2015, 5th June 2015, 7th December 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 Sungai Liput mill and estate has been develop the programme/plan on how to YES the use of fossil fuels and to optimise programme 2015 and 2016 conduct efficiency for utilization of fossil fuel by replacement generator to turbine, renewable energy?  Renewable energy (Fibre and use biodiesel solar as alternative fuel, saving fuel with replace truck with big capacity to reduce the transport route, the monitoring conducted by monthly and b. Has the plan been implemented and is it shell) optimization programme monitored? 2015 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, the target was sets on the following :  Records of fibre and shell usage 80% as minimum energy availability, monitoring also conducted monthly by  Renewable energy use/tCPO or palm 2014 and 2015 calculate the calories resulted from fibre and shell and utilize as boiler fuels product; whether during the construction or upgrading of all operations.  Direct fossil fuel use/tCPO or tFFB; There are monitoring records sighted regarding the utilization of fossils fuels and  Estimated fuel use by on-site contract fibre shell that presented as below: workers and transport and machinery operations; Renewable Energy 2014 2015  Electricity use in operations. (Fibre and shell) Per tonnage CPO d. Was energy efficiency taken into account (Kcal/Ton FFB) 1,718.4 1,754.9 during the construction or upgrading of all operations? % utilization 84 84

e. Has studies on the feasibility of collecting and using biogas been carried out? Fossil fuels 2014 2015 Vehicles (litre) 234,860 236,620

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) Generator (litre) 47,172 47,062 Per tonnage FFB 0.004 0.004

So far there is a plan regarding feasibility of collecting and using biogas, however 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 SOC/PSM/7.10 Zero burning policy was described in Ethical Policy (SOC/Dp/4.01-64). It YES policy or any statement on zero burning?  Ethical Policy (SOC/Dp/4.01- described that land preparation of replanting is conducted by cutting and chipping. There was no land preparation for replanting by burning. Replanting was held by b. Does the company have SOPs for land 64). preparation which mentions zero  Field Observation to Sungai third party – CV Surya Baru.

burning? Liput estate  MoU for land clearing program c. Was land prepared using the burn 2016 between Sungai Liput method? If yes, was it based on the Estate with CV Surya Baru specific situations identified in the No.PD-GM/X/Bi/278/15 dated 5 ‘Guidelines for the Implementation of the November 2015 ASEAN Policy on Zero Burning’ 2003, or  MoU for land clearing program comparable guidelines in other regions? 2015 between Sungai Liput d. Has the policy been implemented Estate with CV Surya Baru throughout the operations? No.PD-GM/X/Bi/329/14 dated 12 November 2014 e. Is there training programmes for associated smallholders on zero burning where appropriate?

Audit Report

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

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: 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  Identification of Environmental Identification of pollution and emission sources at Sungai Liput Mill activities was YES activities been conducted including Aspect, SOC/Form/4.04-01 evident. The source of pollution, type of pollution and its control was documented. gaseous emissions, particulate/soot The information of pollution and emission sources at Sungai Liput Mill was

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) emissions and effluent (see Criterion reviewed and updated on 1 May 2014 including boiler emission, methane from 4.4)? Palm Oil Mill Effluent, diesel electricity generator and vehicles and heavy equipment, and also land conversion. b. Is there a documented list of all identified polluting activities?

(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.  Is there a documented list of all identified Greenhouse Gas Emissions The program was identify the source of greenhouse gas emissions as listed YES significant pollutants and GHG Reduction Plan year 2016 below: emissions? 1. Methane from POME at mill 2. Fossil fuels emissions from vehicles and engines  Are there plans to reduce or minimise the 3. Chemical fertilizer identified pollutants and GHG emissions? 4. Electricity usage  Do the plans include objectives, targets 5. Land conversion and timelines for reduction that are responsive to context? There are also established the GHG reduction plan completed with objectives, targets and timelines as below:  Are the plans being implemented? Was

there any changes? Is it justified? No Program Actual 2015 Target 2016  Is the treatment methodology for POME 1 Volume of waste water 2.2 m3/ton 2.0 m3/ton CPO recorded? (refer to C 4.4.3) discharged to CPO environment 2 Reduction of insecticide 190 litres 103 litres (54% reduction) use 3 Reduction of herbicide 6,318 litres 5,201 litres (18% use reduction) 4 EFB use 14,400 tons 16,345 tons minimum 5 Reduction of chemical 3,394 tons 3,182 tons (6% reduction) fertilizer

The records of each programme were sighted as evident implementation.

Audit Report

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

Sungai Liput Mill waste water was processed through a series of waste water treatment ponds: three anaerobic 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.

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 Sungai Liput of PT Socfin Indonesia uses YES emission of pollutants including RSPO calculation Year assessment PalmGHG V 2.1.1. As RSPO requirement. The reporting was conducted greenhouse gases from estate (plantation) 2015 reporting date January 2016 periodically to the RSPO interest (Ms. Melissa Chin) on 27 January 2016. and mill operations? Reports was sighted that summarized as below:

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) 64,656.11 0 0 c. Is the monitoring and reporting conducted Total mill emissions (tCO₂e) 14,625.30 0 0 using appropriate tools? What tool is being

used to assess, monitor and report on

GHG emissions?

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) Please refer to specific guidance for GHG 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 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: 6.1.1 • 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.

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.

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) 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 Social Impact Assessment (SIA) PT. Socfin Indonesia (Socfindo) Sungai Liput Unit already has prepared a Social YES was the last SIA conducted? Report, October 2012 Impact Assessment (SIA) report which was prepared by an ISO secretariat of PT b. Is the process in conducting the SIA Socfindo, in 20 September to 8 October 2012. Based on the social impact assessment document, the existence of the company has a positive impact, and the findings documented? such as: c. Does the SIA cover all of the potential impact factors, including: 1. Road access for villagers around plantation, increase villagers activity  Access and use rights; especially economic and education activity.  Economic livelihoods (e.g. paid 2. As addition to livelihood, driving the local economy, resources exist in the employment) and working plantation such as fern, fungi and palm frond has become addition to livelihood of local people. conditions;  Subsistence activities; 3. General facility, some public facility has been built by the company such as  Cultural and religious values; mosque, football field, graveyard and elementary school in Seleleh Village.  Health and education facilities; 4. Employment, local people become priority if there is any job vacancy.  Other community values, Social Impact Assessment report was prepared on October 2012. Based on the resulting from changes such as report there was no negative impact identified. improved transport /communication or arrival of Based on interviews with staff ISO Secretariat, the preparation of the SIA was substantial migrant labour force. carried out with the involvement of stakeholders/ affected parties, such as village heads. Attendance list of public consultation was available and attached in the SIA Report, 2012.

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 Social Impact Assessment (SIA) The Social Impact Assessment involves consultation with the affected parties YES consultation with the affected parties? Report, October 2012 around plantation. The consultation conducted by SOCFIN Sungai Liput staff Who are the affected parties? assisted by Head Office Medan Team. People consulted are come from Perkebunan Sungai Liput Village, Karang Rejo Village, Seumadam Village, Alur b. Is there record of how the participatory assessment has been conducted? Itam Village, Sungai Liput Village, Purwodadi Village, Tanjung Mancang Village, Madang Ara Kampung Village, Madang Ara Kebun Village, Paya Meta Village, Were the affected parties able to Paya Tampah Village, Alur Baung Village, Alur SIlalas Village, Tebing Tinggi express their views through their own representative institutions, or freely Village, Rimbang Sawang Village, Alur Meranti Village, Seleleh Village, Tupah Village and representative of employees. chosen spokespersons, during the

identification of impacts, review of Records shown that participatory assessment conducted through personal findings and planning for mitigation? interview and group discussion. The affected parties able to express their views

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) through their own representative institutions, or freely chosen spokespersons, during the identification of impacts, review of findings and planning for mitigation. (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  SOC/PSM/9.03 Procedure of SIA Monitoring Report was available dated 5 January 2016. It contain plan on YES outline the plan on mitigation, Social Impact Assessment. implementation and monitoring according to Social Impact Assessment. implementation and monitoring  Social Impact Assessment Promotion of positive impact and monitoring of impact has been developed and according to the SIA report? Report of PT. SOCFIN available. The plan for promotion or development of positive impact been b. Have plans for avoidance or mitigation INDONESIA – Sungai Liput, documented, with clear timetables and the timeline was reasonable. The of negative impacts and promotion of 2012. persons responsible for implementation of the plans been identified, which is the the positive ones, and monitoring of  Monitoring Report of Social Site Manager (Pengurus). Impact Assessment PT. SOCFIN impacts been developed? INDONESIA – Sungai Liput, c. Have these plans been documented, January 2016. 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?  SOC/PSM/9.03 Procedure of Based on the Procedure of Social Impact Assessment, the plan will be reviewed YES annually. It was verified through several monitoring report of Social Impact b. Has the plan been updated as Social Impact Assessment. Assessment of Sungai Liput that the plan has been reviewed annually and necessary (i.e. in cases where the  Social Impact Assessment review has concluded that changes Report of PT. SOCFIN reported in the SIA Monitoring Report. Based on the report there was no necessary change has to be made to current practices. The report was made by should be made to current practices)? INDONESIA – Sungai Liput, 2012. the result of consultation or participation with affected parties. Participation of c. Have the changes to the plan been affected parties has been available in the attachment of Monitoring Report. It  Monitoring Report of Social implemented? Impact Assessment PT. SOCFIN was verified that the process has been recorded properly. d. Is there evidence that the review has INDONESIA – Sungai Liput, been done with the participation of the January 2016. affected parties? e. Has the process been recorded/documented?

Audit Report

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

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 There is no schemed smallholder associated to PT. SOCFINDO, Sungai Liput NA involved? Unit, therefore this indicator is not applicable.

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.

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) a. Does the company maintain a list of  List of Stakeholders of PT. PT. SOCFINDO, Sungai Liput Unit has maintained a list of local communities YES local communities and other affected SOCFINDO, Sungai Liput Unit, and other affected or interested parties. The list was updated annually or or interested parties? dated 4 January 2016. whenever there is change in contain of the list. b. Is there SOP being developed by the  Procedure of Social An SOP has been developed by the company for communication and company for communication and Communication (SOC/PSM/9.01 consultation between the company and the local communities and other affected consultation between the company Rev.03) dated 1 June 2014 or interested parties. FPIC approach was incorporated in the SOP for and the local communities and other  Attendance list of Stakeholder communication and consultation with the local communities and other affected or affected or interested parties? meeting dated 26 March 2014 interested parties.  Attendance list of dissemination c. Is the FPIC approach incorporated in with workers dated 12 November Record of stakeholder consultation shown that the SOP been developed the SOP for communication and 2015 and with stakeholders on 9 together with the local communities and other affected or interested parties using consultation with the local December 2015. appropriate existing local mechanisms and in languages understood by these communities and other affected or  Interview with stakeholders on 13 parties (Bahasa Indonesia). Attendance list of dissemination on 12 November interested parties? January 2016. 2015 and 9 December 2015 shown that the SOP has been disseminated with d. Has the SOP been developed together the local communities and other affected or interested parties taking into account with the local communities and other the differential access to information by women as compared to men, village affected or interested parties using leaders as compared to day labourers, new versus established community appropriate existing local mechanisms groups, and different ethnic groups. Interview with stakeholders on 13 January and in languages understood by these 2016 has verified that the SOPs are effective. parties? e. Has the SOP been socialized with the local communities and other affected or interested parties taking into 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.

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) a. Who in the company is appointed to  Procedure of Social Based on the Procedure of Social Communication, the company has assigned YES be responsible for communication Communication (SOC/PSM/9.01 Site Manager (Pengurus) to be responsible for communication and consultation and consultation with the affected Rev.04) dated 1 September 2014 with the affected parties. The procedure has clearly defined job description in parties?  Interview with stakeholders on 13 regard handling of communication and consultation with the affected parties. Interview with stakeholders on 13 January 2016 has verified that the affected b. Has the position been made official January 2016. parties have aware and have access to the person in charge. with clear and proper job description? c. Have the affected parties been made aware and have access to the person in charge? e.

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 of Stakeholders of PT. PT. SOCFINDO, Sungai Liput Unit has maintained the following: YES  List of stakeholders (local SOCFINDO, Sungai Liput Unit,  List of stakeholders (local communities and other affected or interested communities and other affected dated 4 January 2016. parties etc.); or interested parties etc.);  Book of Aspiration  Records of all communication, including confirmation of receipt or  Records of all communication, endorsement; including confirmation of receipt or endorsement;  Evidence that efforts have been made to ensure understanding by affected parties;  Evidence that efforts have been made to ensure understanding by  Record of actions taken in response to input from stakeholders. affected parties;  Record of actions taken in 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.

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

Audit Report

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

Guidance: See also to Criterion 1.2. 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  Procedure of Social Complaint Documented system for dealing with complaints and grievances has been YES complaints and grievances for all Handling - SOC/PSM/9.02) established in Prosedur Penanganan Keluhan Sosial (Procedure of Social affected parties? Rev.03 dated 1 September 2014. Complaint Handling - SOC/PSM/9.02) Rev.03 dated 1 September 2014. Evidence that the procedures have been implemented is the logbook of b. Who in the company is responsible to  Attendance list of dissemination receive complaints and grievances? with workers dated 19 November complaint. The Logbook of complaints shown that there is no complaint since the 2015 and with stakeholders on certification audit. The procedure mentioned that complaints either from internal c. Is the existence of the system been 16 December 2015. or external can be delivered to KTU, Assistant or Site Manager. The latest made known and communicated to all  Interview with worker on 26 revision of procedure has been disseminated to all affected parties. It was parties? January 2016 and with verified during interview with workers and stakeholders that the system is d. Is there evidence that the system is stakeholders on 27 January understood by all parties. Dissemination has been provided by the company to understood by all parties? 2016. the workers on the procedure. e. Is training provided to the workers on It was observed that the procedure was effective to ensure that complaints or the procedures/systems? grievances are addressed or resolved in an effective, timely and appropriate manner. The procedure provide a way for workers to report a grievance against f. Is the system effective to ensure that a supervisor to someone other than the supervisor and if requested the company complaints or grievances are protect identity of the workers who delivered complaints or grievance. This also addressed or resolved in an effective, becomes non-retaliation or non-reprisal policy that protects complainants or timely and appropriate manner? whistle-blowers. g. Does the mechanism or procedure Workers delivered their complaint or grievance through KTU, Assistant, Tekniker provide a way for workers to report a or Site Manager. The Site Manager review its and give follow guidance to KTU, grievance against a supervisor to Assistant or Tekniker. Complaint or grievance that does not need a huge someone other than the supervisor? resources and still under authority of Site Manager will be followed up by h. How is a complaint or grievance Site/Unit. Complaints or grievances that need clarification will be further investigated, addressed and resolved? communicated with the complainant. If resolution needs huge resources, Site Are complaints dealt with by Manager will delivered complaints to Head Office Medan and General

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) mechanisms such as JCC? Department (Bahagian Umum) of HO Medan will review the complaints and give guidance to the Sungai Liput Site. Then the site implemented resolution from HO i. Is there a non-retaliation or non- reprisal policy that protects Medan. complainants or whistle-blowers? j. Is the privacy of parties protected? k. Where a resolution is not found mutually, is there a process for complaints to be brought to the RSPO 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 Logbook of Complaint Based on the logbook of complaint, It was verified that there is no complaint YES resolution process documented? received since the certification audit. b. Are outcomes or decisions reported to the parties?

c. Who has access to the documentation of the process and/or 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.

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) a. Are procedures for identifying legal, Procedure of Identification and Procedure of Identification and Calculation of Land Compensation YES customary or user rights in place? Calculation of Land Compensation (SOC/PSM/9.05) Rev.00 dated 1 January 2010 has described the mechanism (SOC/PSM/9.05) Rev.00 dated 1 for identifying legal, customary or user rights including for identifying people b. Are procedures for identifying people entitled to compensation in place? January 2010. entitled to compensation.

c. Are those procedures jointly The steps of the procedures, consist of: developed, agreed and accepted by 1. Identification of land owner local communities? 2. Measurement 3. Data input (mapping) 4. Negotiating compensation 5. Payment of compensation 6. Data documentation.

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 Identification and The procedure for calculating and distributing fair compensation (monetary or YES distributing fair compensation Calculation of Land Compensation otherwise) has been established. The procedures jointly developed, agreed, (monetary or otherwise) been (SOC/PSM/9.05) Rev.00 dated 1 accepted and clearly understood by affected parties. Based on stakeholder established and implemented? January 2010. consultation on 13 January 2016 the procedures jointly developed, agreed, accepted and clearly understood by affected parties. b. Are the procedures jointly developed, agreed, accepted and clearly The procedure has taken into account the following: understood by affected parties?  Gender differences in the power to claim rights;

c. Is the procedure monitored and  Ownership and access to land; evaluated in a participatory way? Have  Differences of transmigrants and long-established communities; corrective actions been taken as a  Differences in ethnic groups’ proof of legal versus communal result of this evaluation? ownership of land. d. Does this procedure take into account the following: PT. SOCFINDO – Sungai Liput was established since around 1930, there is no  Gender differences in the power land acquisition since 2005. There is no need to implement the procedure. The to claim rights; site also does not have any scheme smallholders.

Audit Report

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

(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 There is no land acquisition since 2005 in PT. SOCFINDO – Sungai Liput. This NA negotiated agreements and indicator is not applicable. compensation claims documented? 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.

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) a. What types of employment - Governor of Aceh Regulation Documentation of employees’ pay rates was made by the organization. Workers YES arrangements are there in the #81/2014 dated 30 October were classified into daily worker (BHL – Buruh Harian Lepas), and permanent company? (E.g. contractual, 2014 worker (KHT – Karyawan Harian Tetap & employees). outsourced, apprenticeships, direct - Governor of Aceh Regulation hires, piecemeal basis, etc.) #60/2015 dated 30 October Evidence that the workers have received wage according regulation could be b. Is there documentation of pay and 2015 demonstrated. Minimum wages payment refers to latest Governor of Aceh Regulation #81/2014 dated 30 October 2014 regarding minimum wage of Aceh conditions for each employee? - Documentation of employees payroll 2015 Tamiang Regency for 2015 as much as IDR 1.900.000/month. Based on c. Is there a definition for living wage in - Contract of BHL (daily) workers verification of employee payroll from January to December 2015, there was no the country? If not, how was the employee paid below minimum wage and it has complied with the regulation. decision on wage for employees and Regulation for minimum wage 2016 was available, which is Governor of Aceh contract workers made? Regulation #60/2015 dated 30 October 2015, which is IDR 2,118,500 per month.

Based on interview with worker it was noted that there was no worker wage

deduction. Payments for workers were determined according to daily attendance register and over time shift. Daily attendance for workers was recorded and controlled manually by the each Assistant.

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.

Payment of contracted employees (BHL) was based on the volume of work multiplied by the unit price, example: unit price of up keeping legume cover crop Rp. 175,000/Ha. Employment contract was available on the Job Agreement, for example No.MP/X/Bi/136/16 for discard of Ganoderma infected trees, picking Oricthes larvae and empty fruit bunch application.

(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 - PKB years 2015 – 2017 Pay and conditions of employment clearly detailed in the employment or service YES employment clearly detailed in the endorsed by the Director General contracts. Employees contract are available for permanent employees, contract employment or service contracts? of Industrial Relations Labour labour agreement contains agreements include: working time, dependents, (E.g. working hours, deductions, and Social Security with the payroll and consent of both parties. Working hours, deductions, overtime, overtime, sickness, holiday sickness, holiday entitlement, maternity leave, reasons for dismissal, period of

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) entitlement, maternity leave, reasons decree dated June 18th, 2015 SK notice, etc described in PKB years 2015 - 2017 which have been agreed for dismissal, period of notice, etc.) No.KEP.88/PHIJSK- between the employees (represented by SPSI) and company and endorsed by PKKAD/PKB/VI/2015 the Director General of Industrial Relations Labour and Social Security with the b. Is the contract prepared in languages th understood by the workers, explained - Contract workers decree dated June 18 , 2015 SK No.KEP.88/PHIJSK-PKKAD/PKB/VI/2015.

carefully to workers by management - PD-GM/X/378/2014 dated 22 officials, and signed by both the December 2014 with CV. Maju Verification has been done on group discussion on 26-27 January 2016 that contract prepared in languages understood by the workers, explained carefully to authorised signatory of the company Utama workers by management officials, and signed by both the authorised signatory of and employee? - Group discussion on 26-27 January 2016. the company and employee. c. Does the pay and conditions provided in labour laws, union Contract work by non-permanent employees (borongan) performed in agreements or direct contracts of accordance with the employment contract agreement for example: contract No. employment comply with: PD-GM/X/378/2014 dated 22 December 2014 with CV. Maju Utama for  The decent living wage as replanting program (planting oil palm, planting LCC and upkeep LCC). The provided in the National contract includes the amount of work, duration and value of the wage contract. Interpretation for the country; or The contract was signed and agreed by both parties. Contract was prepared in  The local legal requirements in languages which understood by the workers, explained carefully to workers by meeting the minimum wage; or management officials, and signed by both the authorised signatory of the  The industry minimum standard company and employee. for a similar position or work Pay and conditions provided in labour laws, union agreements and direct responsibilities contracts of employment has been comply with: • The decent living wage as provided in the National Interpretation for the d. Is the pay received by the employee country; or consistent with the terms of the • The local legal requirements in meeting the minimum wage; or contract and the law (relates to P2)? • The industry minimum standard for a similar position or work e. Have there been any cases recorded responsibilities of breach by the company, or Payment of salaries performed once a month in the beginning of each month (on complaint made by employees dated 5th) for permanent employees. Total salaries paid are in accordance with against the company on unjust pay the minimum wage (UMK). Pay received by the employee was consistent with and conditions? the terms of the contract and the law.

Since January to December 2015, there was no complaint made by employees against the company on unjust pay and conditions. Information was based on Complaint logbook 2015 and group discussion on 26-27 January 2016.

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CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) 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 - List of facility for employee The organization provided adequate medical, educational and welfare amenities YES adequate housing and other basic - Group discussion with employee to national standards. Public facilities were provided by the organisation with necessities such as that listed below to on 26 January 2016 basic facilities and covered child care, kindergarten, building for prayers national standards or above, where no - Field observation in (Mosque and Church), sports facility (e.g. volley ball, badminton, futsal, and such public facilities are available or emplacement tennis), housing for workers and medical facilities (clinics). Housing for workers accessible? and medical facilities (clinics) were was provided by the organisation with basic  adequate housing; facilities.  adequate electricity;  clean water supplies (availability of The organization has provided adequate water supplies to national standards. It clear water all year round); has been done water analysis in the employee housing facility by Sucofindo  medical services (distance to health care facility i.e. clinic, Sungai Liput Estate is located in the country crossroad from Medan to Banda hospital); Aceh, road access is very accessible. People can go to the market or other place  children education (distance to anytime they wanted. SD Negeri (elementary school) was available in and school and schooling attendance around Sungai Liput Estate; Playgroup and Kindergarten were also available. (%) 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.

a. Have growers and millers made - List of facility for employee YES The company provides “catu beras” (natura) 15 kg for the employee, 9 kg for the demonstrable efforts to monitor and - Group discussion with employee spouse and 7.5 kg for each child, up to 3 children. Based on the interview with improve workers’ access to adequate, on 26 January 2016 worker representative and labor union, it was conclude that there was no sufficient and affordable food? - Field observation in problem regarding access to adequate, sufficient and affordable food. Sungai emplacement Liput Estate is located in the country crossroad from Medan to Banda Aceh, road access is very accessible. People can go to the market or other place anytime they wanted.

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.

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CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) (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 YES - Ethical Policy (SOC/Dp/4.01-64) Freedom of association has been mentioned in Ethical Policy (SOC/Dp/4.01-64) statement in local languages Rev.03 dated 1 June 2014 Rev.03 dated 1 June 2014. Organizations understand that workers have the right recognising the rights of employees to to argued, associate and organize in a labour union. freedom of association? - Group discussion with union b. Are the employees, including migrant leader and worker representative Organization committed to provides opportunities for workers to organize in and transmigrant workers and contract on 26-27 January 2016. unions and express an opinion. workers, allowed to form associations Commitment covered in the policy are: and bargain collectively with their employer? - The organization recognizes workers' rights to express their opinions and organize freely and responsibly run in labour union organizations. c. Was the outcome, if any, from the collective bargaining process between - Organizational policies related to ensure workers' rights are discussed and the company and the association decided by taking into consideration the union.

respected, implemented and adopted - Ensured that the disclosure made by aspiration unions did not cause the in full or partially by the company? collapse of a termination for union leaders and members. d. Are there Labour laws and union - Promoting the principle of dialogue to reach consensus in addressing the agreements, or in their absence direct aspirations from labour union to the company. contracts of employment detailing payments and other conditions, made Based on interview with labour union leader, the company has accommodated available in the languages understood employee rights to argued, associate and organize in a labour union. by the workers or explained carefully to Employees, including migrant and transmigrant workers and contract workers them by a management official? were allowed to form associations and bargain collectively with their employer. Workers Union represents estate and mill employee incorporated to the SPSI- Serikat Pekerja Perkebunan PT Socfin Indonesia Sungai Liput was available. Labour laws, union agreements which described in PKB (Perjanjian Kerja

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) Bersama) and direct contracts of employment detailing payments and other conditions was made available in the languages which understood by the workers and explained carefully to them by management official.

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

a. Are there documented minutes of YES - Minutes of Workers Union Minutes of meetings with main labour unions or workers representatives been meetings between the company and meeting on 4 July 2015 documented, e.g. bipartite meeting in regard determining days off on Eid Holiday main trade unions or workers 2015 on 4 July 2015. Meeting was attended by the company representatives representatives? (Site Manager, Assistants, Foreman and Employees) and the Workers union of b. Are the minutes made readily available Sungai Liput. to employees upon request? Minutes of meeting were available, list of attendance was sighted. The minutes were 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 YES - Ethical Policy (SOC/Dp/4.01-64) Ethical Policy (SOC/Dp/4.01-64) Rev.03 dated 1 June 2014 mentioned that the workers together with working hours Rev.03 dated 1 June 2014 organization comitted not to hire underage workers required by labour law that is clearly defined in the company’s at least 18 years. Companies ensure regulatory provisions governing the child recruitment policy? - List of employees which updated labor were followed. b. Are workers employed above the on December 2016 minimum school leaving age of the List of employees which updated on December 2015 has shown that no

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) country or who are at least 15 years of - Group discussion with employee employee under the age of 18 years. During group discussion it was verified that age? on 26 January 2016 there was no underage worker and no children were invited to work by their parents. This complied with UU 13/2003 and with International Labour c. Is there evidence that the nature of - Field observation work for workers under 18 is in Organisation (ILO) Convention 138. accordance with International Labour Ground verification during field observation has verified that there was no worker Organisation (ILO) Convention 138? below the minimum working age in Sungai Liput Mill and Estate. 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- YES - Ethical Policy (SOC/Dp/4.01-64) Equal opportunities has been documented in ethical policy, the document was discrimination and equal opportunities? Rev.03 dated 1 June 2014 publicly available (based on request). Its cover race, caste, national origin, Does it at least cover the items religion, disability, gender, sexual orientation, union membership, political mentioned in the criteria (6.8)? - List of employees which updated affiliation, or age. b. Is the policy made publicly available for on December 2016 PT Socfindo believe that every worker is entitled to equal treatment and not the relevant stakeholders? - Group discussion with employee discriminate based on ethnicity, religion, race, sexual orientation and gender. PT and stakeholders on 12-13 c. Is there evidence that the policy has Socfindo committed to implementing anti-discrimination policy to all employees. January 2016 been implemented? Policy has been communicated to all employees. - Field observation Policy made was publicly available for the relevant stakeholders. Based on group discussion with employee and stakeholders on 12-13 January

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CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) 2016 it was verified that the policy has been disseminated and implemented by organization.

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 YES - Ethical Policy (SOC/Dp/4.01-64) Based on group discussion with stakeholders and employee on 12-13 January groups including local communities, Rev.03 dated 1 June 2014 2016 it could be demonstrated that there was no discrimination against women, and migrant workers have not employees and groups including local communities and women. However there been discriminated against? - Logbook Complaint 2015 were no migrant workers work to company. b. Are the employees and groups - Group discussion with employee The employees and groups including local communities and women workers including local communities, women, and stakeholders on 26-27 were happy with the way the company treating them. and migrant workers happy with the January 2016 way the company is treating them? There was no complaint against the company on issues relating to discrimination

c. Are there complaints against the based on public consultation with stakeholders and employee. company on issues relating to Based on Logbook Complaint 2015 since January – December 2015 there was discrimination? no complaint from employee and groups including local communities and women d. What is the nature of complaints workers have lodged against the company. 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 YES - Group discussion with employee Based on Group discussion with employee and stakeholders on 26-27 January a record of their employees’ work and stakeholders on 26-27 2016 it could be demonstrated that recruitment selection, hiring and promotion credentials and medical history? January 2016 are based on skills, capabilities, qualities, and medical fitness necessary for the b. Does the company explicitly state the jobs available. Company was performed selection and recruitment employee - SOC/PSM/6.01 dated 1st January

Audit Report

CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) indiscriminatory policy during the 2014 – Procedure of Employee based on documented Procedure of Employee Recruitment. recruitment selection, hiring and Recruitment Company explicitly state the in discriminatory policy during the recruitment promotion process? - Employee promotion record of selection, hiring and promotion process. c. Is the company’s indiscriminatory PT. Socfin Indonesia 2015 policy reviewed regularly? Company’s indiscriminatory policy that stated in Ethic Policy was reviewed regularly, once a year. d. Are the company’s employees recruited and promoted based on skills, Company’s employees was recruited and promoted based on skills, capabilities, capabilities, qualities, and medical qualities, and medical fitness necessary for the job. fitness necessary for the job? How is Recording of recruitment begun from letter of application, personal data of this evidenced? employees, contract and medical history are stored in the employees archive. From the record could be demonstrated that company has implemented well the procedure and the policy. Some evidence such as: employee promotion records of PT. Socfin Indonesia 2015 was available. 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 YES - Ethical Policy (SOC/Dp/4.01-64) Company have the policy to prohibit any form of sexual and all other forms of prohibit any form of sexual and all Rev.03 dated 1 June 2014 harassment and violence which described in Ethical Policy No. SOC/Dp/4.01-64 other forms of harassment and Point 7 regarding Protection against sexual harassment and violence. PT Socfin violence? - Group discussion with employee Indonesia committed to preventing various forms of violence and sexual b. Has this policy been documented, and stakeholders on 26-27

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CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) implemented and communicated January 2016 harassment of all workers. clearly to all levels of the workforce? - Social complaint handling Based on group discussion with employees and stakeholders, Ethic policy that c. Is there a clear protocol for the procedure SOC/PSM/9:02 dated described prevention of sexual and all other forms of harassment and violence company to deal/handle such 1 September 2014 has been implemented and communicated to all levels of the workforce. issues/complaints received from the workforce? - Organization Structure of Gender Mitigation and complaint regarding gender and sexual harassment regulated and Committee dated 5 December defined in social complaint handling procedure SOC/PSM/9:02. Complaints of d. Is there a list of awareness programs 2015. gender issues can be submitted a written notification to the gender committee or or training provided to the workforce in the company management, gender committee will studying the complaints and

relation to these issues? mediate between the complainant with the company; for sexual harassment e. Has the company formed a Gender mediation performed between the perpetrators with the victim. Committee to address areas of Programs or training was provided to the workforce in relation to these issues. concern to women? Is there a list of Ethic policy has included education for women and awareness of the workforce. the members sitting in the committee? Based on interview with gender committee, a programme has been provided for What are the Terms of Reference of particular issues faced by women, such as violence and sexual harassment in the committee? Does it include the the workplace. handling of issues such as:  training on women’s rights; Gender committee which includes representatives from all areas of work has  counselling for women affected been set up specifically to address areas of concern to women. Organisation by violence; structure of gender committee was revised on 5 December 2015, covering  child care facilities to be provided women worker representatives from all department, e.g. laboratory, spraying by the growers and millers; worker, mill, clinics, etc  women to be allowed to Ethic Policy regularly reviewed once a year. The first ethics policy was published breastfeed up to nine months in September 2010 and has been revised three times, the last revision in 1 June before resuming chemical 2014 and no revision after 2015 review. 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.

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CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) a. Is there a policy to protect the YES - Ethical Policy (SOC/Dp/4.01-64) Company has established the policy to protect the reproductive rights of all, reproductive rights of all, especially of Rev.03 dated 1 June 2014 especially of women which described in Ethical Policy No. SOC/Dp/4.01-64 Point women? 8. The protection of reproductive rights. PT. Socfin Indonesia committed to - Group discussion with employee b. Has this policy been documented, recognize the reproductive rights of women and ensure women workers derives and stakeholders on 26-27 implemented and communicated his right. clearly to all levels of the workforce? January 2016 - The company ensures to provide adequate child care facilities - Social complaint handling c. How is this policy communicated to all - Ensuring that pregnant women are not do the work associated with procedure SOC/PSM/9:02 dated levels of the workforce? chemicals 1 September 2014 - Ensuring that breastfeeding mothers are not work on tasks associated - Organization Structure of Gender with chemicals and during breast-feeding up to 9 months get adequate

Committee dated 5 December rest periods 2015 - Ensuring the reproductive rights of female workers use their rights and still get the full wage Ethic policy has described the protection of the reproductive rights of all, especially of women, been implemented and communicated to all levels of the workforce. Policy communicated to all levels of the workforce directly to employees by their respective assistants and through submission and awareness which conducted by gender committee against female employees. Based on group discussion with employees and stakeholders, it was verified that the Policy has been communicated to all employees and stakeholders.

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 Company have a mechanism to handle employment grievances, that respects YES - Procedure of Social Complaint to handle employment grievances, that anonymity and protects complainants where requested which described in Handling - SOC/PSM/9.02) respects anonymity and protects Prosedur Penanganan Keluhan Sosial (Procedure of Social Complaint Handling Rev.02 dated 1 September 2014 complainants where requested? - SOC/PSM/9.02). - Logbook of Complaint 2015 b. Does the mechanism provide a way for The system was enable resolution of disputes in an effective and appropriate workers to report a grievance against a - Group discussion with employee manner by way of classifying complaints into internal and external, appointed the supervisor to someone other than that and stakeholders on 26-27 person who responsible for handling complaints, including level of officials who supervisor? January 2016. make decisions for complaint resolution. The mechanism also provides a way for workers to report a grievance against a supervisor to someone other than that c. Is the mechanism documented, - Field observation

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CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) implemented and communicated supervisor. clearly to all levels of the workforce? Mechanism has been documented in procedure as explain above. It has been d. Has the company identified personnel implemented and clearly communicated to all levels of the workforce. Evidence who will be responsible to receive and that the procedures have been implemented is the logbook of complaint. manage complaints received from the Records are routinely monitored monthly, no complaints during the period of workforce? January to December 2015. e. Has the company received any reports Company has been identified personnel who will be responsible to or complaints of harassment or abuse? receive and manage complaints received from the workforce. Each How was it addressed or resolved? respective assistants and supervisors were responsible to receive and manage f. Is the policy reviewed regularly? complaints received from the workforce. Based on Logbook of complaint 2015 there was no complaints during the period of January to September 2015. The Policy regularly reviewed once a year. Revision made if needed.

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

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? PT. Socfin Indonesia, Sungai Liput Mill does not receive FFB from other than NA Sungai Liput Estate. b. Is current and past prices paid for Fresh Fruit Bunches (FFB) publicly available? How? c. Was there any complaints on FFB

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CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) 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 PT. Socfin Indonesia, Sungai Liput Mill does not receive FFB from other than NA recording/documenting transactions Sungai Liput 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 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?

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

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 PT. Socfin Indonesia, Sungai Liput Mill does not receive FFB from other than NA between the miller and smallholders/ Sungai Liput 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.

a. How are all payments made to the PT. Socfin Indonesia, Sungai Liput Mill does not receive FFB from other than NA smallholders/middle men? Sungai Liput 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.

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CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) 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. a. Have the local development needs and YES - Social Impact Assessment Local development needs and priorities have been identified by organization priorities been identified in consultation Report of PT. Socfin Indonesia, through consultation with local communities and social impact assessment. with local communities? (refer also to C Sungai Liput. Consultation management plans and monitoring the social impact to the 6.2) community has been communicated and disseminated to affected communities. b. What are the contributions made to - Corporate Social Responsibility local development? Are they in Program FY 2015 Contribution to local development described in the Corporate Social Responsibility (CSR) programme. CSR Program for 2015 was available accordance with the results of Corporate Social Responsibility - including its realization records. CSR program consists of internal and external consultation? Program FY 2016 activities. Internal activities consist of: providing scholarships to outstanding c. Are there efforts to improve or - Ethic Policy (SOC/Dp/4.01-64) students, national independence day, fogging etc. External activities include: maximise employment opportunities at Rev.03 dated 1 June 2014 enhancement of village roads around the plantation, maintenance of flood the company for local communities? control canals, providing clean water for community activities, building renovation - Group discussion with employee of public facility. Several records of CSR implementation were evident. and stakeholders on 26-27 January 2016 Evidence of preference always been given to members of local communities where candidates for employment are of equal merit was described in Ethic - Field observation Policy (SOC/Dp/4.01-64 Rev.03 dated 1 June 2014).

Based on group discussion with employee and stakeholders, generally there were satisfied with the plantation contribution to local communities.

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

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CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) a. Is there a complete registry of Group discussion with stakeholders PT. Socfin Indonesia, Sungai Liput Mill does not receive any FFB other than NA independent smallholders in the supply on 27 January 2016. from Sungai Liput Estate. 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. (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 Ethic Policy (SOC/Dp/4.01-64) Company’s policy on forced or trafficked labour was described in Ethical Policy or trafficked labour? - Rev.03 dated 1 June 2014 of PT. Socfin Indoensia. b. How does the company define forced - Group discussion with employee Based on Group discussion with employee and stakeholders it was evident

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CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) or trafficked labour? and stakeholders on 26-27 that no forms of forced or trafficked labour have been used. Workers/employee January 2016 entered into organization voluntarily and freely, without the threat of a penalty c. What is the process of recruiting and they have the freedom to terminate employment without penalty given. foreign/ migrant workers directly and/or - Working Agreement (PKB) period through licenced outsourcing agencies/ 2015 - 2017 There was no migrant worker in PT Socfin Indonesia, Sungai Liput Mill and labour suppliers? Estate. It was verified during audit documentation list of employee, Group - Field observation d. Who is the person responsible for discussion with employee and stakeholders.

selecting/ screening labour suppliers/ Person who responsible for selecting/screening labour suppliers was KTU outsourcing agents? (Kepala Tata Usaha) under supervision from Site Manager (pengurus). e. Do the foreign workers have to pay a Employees work based on working agreement which contains agreements fee to the employment recruitment include: working time, dependents, payroll and consent of both parties. Working agency or labour suppliers in the hours, deductions, overtime, sickness, holiday entitlement, maternity leave, workers’ countries of origin? If yes, reasons for dismissal, period of notice, etc described in PKB (working does it jeopardise decent living wage? agreement) years 2015 - 2017 which have been agreed between the employees f. Are there restrictions on workers from (represented by SPSI) and company. leaving the mill or estate or their 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?

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CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) 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 NA Group discussion with employee There was no contract substitution occurred in PT. Socfin Indonesia, Sungai substitution occurring? - and stakeholders on 26-27 Liput. It’s verified during observation, documentation list of employee, interview b. Are foreign workers asked to sign a January 2016 with employee and stakeholders. contract upon arriving in the receiving country? If yes, is that contract - Field observation identical to the one signed in the country of origin? c. Are workers given a copy of their 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 NA Group discussion with employee There was no migrant worker in PT. Socfin Indonesia, Sungai Liput. It’s verified procedures for temporary or - and stakeholders on 26-27 during observation, documentation list of employee, interview with employee and foreign/migrant workers? Does the January 2016 stakeholders. special labour policy include:

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CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO)  Statement of the non-discriminatory - Field observation practices?

 No contract substitution?  Post-arrival orientation programme with emphasis on language, safety, labour laws, cultural practices etc.?  The provision of decent living conditions? 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).

Guidance: See also Criterion 6.3. All levels of operations will include contracted third parties (e.g those involved in security).

6.13.1 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 YES - Ethical policy SOC/Dp/4.01-64 Policy to respect human rights has been documented in ethical policy rights? Rev.03 dated 1 June 2014 (SOC/Dp/4.01-64 Rev.03 dated 1 June 2014). Top management has b. How is this communicated to all commitment to respect human right refers to internationally recognised human Group discussion with employee employees, including outsourced - rights set out in the International Labour Organization’s Declaration on and stakeholders on 26-27 workers, customers and suppliers? If Fundamental Principles and Rights at Work. The document has been January 2016 by training, how often is the training communicated to all levels of the workforce and operations based on group

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CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) conducted? - Field observation discussion with labour union, worker and gender committee. c. Who has the task of communicating The policy has been communicated to all employees, including outsourced the policy internally and externally? workers, customers and suppliers by dissemination. Dissemination was conduct d. Does the company have any regularly once a year. outstanding cases of human rights During audit and based on verification on group discussion with employees violations? stakeholders it could be demonstrated that there was no cases of human rights violations in PT. Socfin Indonesia, Sungai Liput.

PRINCIPLES 7: RESPONSIBLE DEVELOPMENT OF NEW PLANTINGS There was no new planting since November 2005. There was only replanting. 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) 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).

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CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) Continual improvement plans have been raised as corrective actions plan from YES a. Is there an action plan for continual  List Attendance of OHS internal audit of OHS and RSPO and Management Review Plan. improvement? Management Review Meeting  Notes OHS management The most recent OHS Internal Audit was performed on 12 November 2015, b. Describe the main components of the plan. Review Meeting integrated with RSPO internal audit, for mill and all estate. All findings have been c. Has the action plan been implemented?  OHS internal audit report closed.  Continual improvement d. Provide examples of continual programme 2015 Several continuous improvement programme especially for environment issue has improvements that have been  Field observation at mill and been developed for year period 2015, such as: implemented. estate  Reduction in use of pesticides e. Are history records available to develop the  Program Continual o Reduction of paraquat use action plan? Improvement 2015-2016  Environmental impacts: o Application of empty bunch f. Are records of implementation of the action o Fibre blower and blower winnowing placed on permanent floor to reduce plan available? vibration, easy to monitor and maintenance, and also increase lifetime. g. Does the action plan include strategies for: o Heating element installation at silo kernel blower to decrease water • Reduction in use of pesticides content and reduce steam user to drying IKS at silo kernel. (Criterion 4.6)? Is IPM widely  Waste reduction: implemented? o To prevent the spillage of boiler ash by conduct installation of hopper

• Environmental impacts (Criteria 4.3, and conveyor belt in order to direct insertion in to the dump truck 5.1 and 5.2)? o Changing the function of vertical fat pit capacity 30 T becomes two • Waste reduction (Criterion 5.3)? continuous tanks with total capacity 70 T. Those, deposition time of • Pollution and greenhouse gas (GHG) crude oil in continuous tank becomes longer reach 7 hour and the oil emissions (Criteria 5.6 and 7.8)? content in the feed sludge decanter decreased below 8%. • Social impacts (Criterion 6.1)?  Pollution and GHG emission • Optimising the yield of the supply o Use of fibre and shells for boiler fuel base? • Social: h. Do growers have a system to improve o Monitoring and managing the positive and negative impact from social practices in line with new information and impact assessment (SIA) techniques, and a mechanism for o Improve and implementation the CSR program regularly disseminating this information throughout o Review social impact assessment every two years to improve the social the workforce? relationship with stakeholders and affected parties. • Optimising the yield of the supply base: o Apply mechanical manuring o EFB and solid application • Others: o Increase mill productivity 19 ton/hour with adding sterilizer capacity

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CRITERION / INDICATOR OBSERVATIONS & OBJECTIVE COMPLIANCE NO SUMMARY OF FINDINGS FOR EACH INDICATOR CHECKLIST EVIDENCE (YES/NO) (sterilizer No 7,9 and 12) from 2,800 kg becomes 3,000 kg. o Installation lamp and alarm indicator in every boiler to monitor the boiling time o Installation pneumatic blower to reduce impurity content in wet kernel.

The organisation has program monthly briefing to workers for disseminating all aspects in Estate and Mill activities, e.g. environmental, social, OHS and best practices. Sustainability team has program to visit Mill and Estate periodically to ensure that corrective action was taken to all non-conformances to avoid reoccurrence of the non-conformances and assist in external audit preparation. To improve practices in line with new information and techniques, and a mechanism for disseminating this information throughout the workforce, the organisation conducts monthly briefing to all Estate and Mill employees.

Audit Report

3.3.2 Mill Supply Chain Requirements The FFB source is one (1) organisation owned by PT. Socfin Indonesia and no FFB from the third party. Therefore the Model selected is IP and RSPO Supply Chain Module D was used as audit criteria. The detail of FFB processed in Sungai Liput Mill is described in Table 7, Table 8 and Table 9 presented in this report. Table 13 Sungai Liput Delivery of CPO in 2015

RSPO ISCC Non Certified Month (MT) (MT) (MT)

January - 645.31 - February - 550.92 200.49 March - 1,366.18 - April - 2,100.00 - May - 1,950.00 - June 2,170.12 - - July 1,129.88 558.27 - August - 1,741.73 - September - - 1,270.73 October 762.27 - 229.27 November 959.86 - - December 564.06 - 0.20 Total 5,586.19 8,912.41 1,700.69

Delivery of RSPO Certified CPO has been registered in eTrace. There are no delivery of certified PK, all PK delivered as non-certified.

Audit Report

3.3.2.1 Supply Chain Certification Standard PART A COMPANY DETAIL

Company Name (covered by certification): PT. SOCFIN INDONESIA Sungai Liput

RSPO member name: SOCFIN Group (PT. Socfindo and Socfinco SA) RSPO member number: 1-0017-04-000-00

RSPO IT Platform Registration number: RSPO_PO1000001251

Site Address: Jl. Medan Banda Aceh, Desa Kebun Sei Liput, Kejuruan Muda, Aceh Tamiang – 24477, Aceh, Indonesia

Management Representative: Mr. Hasan Bisri Kasyhuri

Site type: Palm Oil Mill

Site capacity: 18 MT per hour

Certified palm product sold: 5,650 MT CPO

Certified palm product used: 70,313.72 MT FFB

App/Cert No: Audit Type: ASA2

SAI Global Auditor/Team: Audit Date: 28/01/2016 Activity/Audit No: WI-821695

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)

Audit Report

Supply Chain Model: Module D - CPO Mills (IP) Identity preserved

Pertinent record period: January to December

Estimated tonnage of certified palm product produced: 17,311.10 MT CPO and 3,227.50 MT PK

Estimated of tonnage of non certified palm product produced None

String description: Palm Oil Mill

Outsource activity(ies) (if any): None

Independent third party(ies) performing outsource activity(ies): None name, address and Capability

PART B SUPPLY CHAIN CERTIFICATION STANDARD

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

5.12 Complaints

5.12.1 The organization shall have in place and maintain documented procedures for collecting and resolving stakeholder complaints.

a. Does the organization have in place and maintain The organization has documented procedure for collecting documented procedures for collecting stakeholder complaints, which are: C stakeholder complaints ? - Procedure for Customer Complaint Handling (SOC/PSM/7.03) dated 1 February 2007, described

Audit Report

Requirements STATUS Audit Findings / Objective Evidence ( NC / AOC / C ) mechanism for handling customer complaints regarding product. - Procedure for Social Complaint Handling (SOC/PSM/9.02) Rev.03 dated 1 September 2014, described mechanism for handling complaint of social issues, e.g. from worker and stakeholder. The procedures were available and well documented in Sungai Liput office. b. Does the organization have in place and maintain The procedures described above were also described documented procedures for resolving mechanism for resolving complaints, either from customer, C stakeholder complaints. worker or stakeholders. It was confirm that no complaint occur in Sungai Liput Mill. 5.13 Management review

5.13.1 The organization is required to hold management reviews at planned intervals appropriate to the scale and nature of the activities Undertaken

a. Has the organization defined the time intervals to The organization has established procedure for Management hold management reviews ? Review which is SOC/PSM/5.01 Rev.02 dated 1 July 2013. The procedure on chapter 5.1 has defined time intervals to hold management review which is once a year at minimum. The organization has also established procedure for Internal Audit, which is SOC/PSM/8.02 Rev.04 dated 12 May 2011. The C procedure described internal audit mechanism including for RSPO Supply Chain Certification. Internal audit planned to be conducted once a year at minimum or considering previous internal audit and customer complaints. The result of internal audit become inputs in management review meeting.

Audit Report

Requirements STATUS Audit Findings / Objective Evidence ( NC / AOC / C ) b. Has the held management reviews appropriate to Based on record available, e.g. attendance list and minute of the scale of activities undertaken ? meeting, the latest management review was held on 9 May C 2015. It was confirmed that the held management reviews appropriate to the scale of activities undertaken.

CPO MILLS (IP) IDENTITY PRESERVED SUPPLY CHAIN MODELS – MODULAR REQUIREMENTS

D.1 Definition

A mill is deemed to be Identity Preserved (IP) if the FFB used by the mill are sourced from its own supply base certified to the RSPO Principles and Criteria (RSPO P&C). Certification for CPO mills is necessary to verify the volumes and sources of certified FFB entering the mill, the implementation of any processing controls (for example, if physical separation is used), and volume sales of RSPO certified products. A mill may be taking delivery of FFB from uncertified growers, in addition to those from its own certified land base. If a mill processes certified and uncertified FFB without physically separating the material then only Module E is applicable.

D.2 Explanation

D.2.1. The estimated tonnage of CPO and PK products that could potentially be produced by the certified mill must be recorded by the certification body (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 shall then be recorded in each subsequent annual surveillance report.

The estimated tonnage of CPO and PK products has been a. Has the estimated tonnage of CPO and PK recorded by the certification body (CB) in the public summary products (that could potentially be produced by of the P&C certification report, e.g.: the certified mill) been recorded by the C certification body (CB) in the public summary of Certification audit: the P&C certification report ? Estimated CPO : 17,507 MT

Audit Report

Requirements STATUS Audit Findings / Objective Evidence ( NC / AOC / C ) Estimated PK : 2,920 MT

ASA1: Estimated CPO : 17,687 MT Estimated PK : 3,048 MT

b. Does the figure represent the total volume of Yes, the figure does represent the total volume of certified palm oil product (CPO and PK) that the certified mill allowed to certified palm oil product (CPO and PK) that the C certified mill is allowed to deliver in a year ? deliver in a year. Certified CPO delivered last period was 5,650 MT. The actual tonnage produced has been recorded in each subsequent annual surveillance report, i.e:

ASA1: Actual CPO : 16,106 MT Actual PK : 2,822 MT C

ASA2: c. Does the actual tonnage produced have to then Actual CPO : 16,237 MT be recorded in each subsequent annual Actual PK : 2,960 MT surveillance report ?

D.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).

a. The mill must also meet all registration C requirements for the appropriate supply chain PT. SOCFIN INDONESIA – Sungai Liput Mill has met all

Audit Report

Requirements STATUS Audit Findings / Objective Evidence ( NC / AOC / C ) through the RSPO supply chain managing registration requirements for the appropriate supply chain organization (RSPO IT platform or book and through the RSPO supply chain managing organization (RSPO claim)? IT platform), with register number RSPO_PO1000001251.

b. The mill must also meet all reporting requirements for the appropriate supply chain The mill also has met all reporting requirements for the through the RSPO supply chain managing appropriate supply chain through the RSPO supply chain C organization (RSPO IT platform or book and managing organization (RSPO IT platform) as indicated in the claim)? Table 13.

D.3 Documented Procedure

D.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 role 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’s procedures for the implementation of this standard.

a. Does the site have written procedures and/or The site has written procedure and work instruction to ensure work instructions in place to ensure the the implementation of all elements specified in these implementation of all elements specified in these requirements, e.g. Procedure of Supply Chain Certification C requirements ? Standard Identity Preserve (SOC/PSM/9.10) Rev.04 dated 1 July 2015. The procedure was available in the site office. b. Are procedures / work instructions completely Procedure of Supply Chain Certification Standard Identity covering the implementation of all the elements in Preserve (SOC/PSM/9.10) Rev.04 dated 1 July 2015 described C these requirements? the process of: 1. FFB receiving and its recording

Audit Report

Requirements STATUS Audit Findings / Objective Evidence ( NC / AOC / C ) 2. FFB processing and its recording 3. Recording of production results 4. Delivery of production result 5. Daily production results 6. Recording at Head Office Medan: - Daily production result upload - Stock cutting/goods delivery - Three monthly report - Contract and DO issuance - Certification claim by buyer - Invoice issuance 7. Record keeping 8. Abnormal condition 9. Production report to certification body 10. Shipping announcement on eTrace 11. PIC for SCCS The procedure has completely covers the implementation of all the elements in these requirements. c. Have the site had the role of the person having Top Management has assigned personnel who having overall overall responsibility for and authority over the responsibility for and authority over the implementation of these implementation of these requirements and requirements and compliance with all applicable requirements, compliance with all applicable requirements ? who is Mr. Hasan Bisri Kasyhuri (as Management Representative) based Letter of Appointment # PD- C GM/BK/Bi/04/12 dated 9 January 2012. The management of Sungai LIput has also assigned Mr. Jefri Agus Saweji (Mill Admin) as SCCS Officer in Sungai Liput Mill based on assignment letter # SI/Div/Bi/045/15 dated 6 September 2015. d. Is the person able to demonstrate awareness of The assigned person was able to demonstrate awareness of the site’s procedures for the implementation of the site’s procedures for the implementation of RSPO SCC C this standard? standard.

Audit Report

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

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

Procedure of Supply Chain Certification Standard Identity Preserve (SOC/PSM/9.10) Rev.04 dated 1 July 2015 has cover mechanism for receiving certified FFB. Moreover the mill also have Procedure of FFB Receiving (SOC-POM/PSM/7.08) Rev.03 dated 1 April 2014 which C described detail process of FFB receiving, e.g.: a. Has the site had documented procedures for - FFB receiving receiving certified FFBs ? - Weighing - FFB quality checking b. Has the site had documented procedures for The site implement supply chain certification model IP receiving non-certified FFBs? N/A therefore there is no receiving of non-certified FFB.

Procedure of Supply Chain Certification Standard Identity Preserve (SOC/PSM/9.10) Rev.04 dated 1 July 2015 has cover mechanism for processing certified FFB. Moreover the organization has established documented procedure/work instruction to ensure the process of certified FFB, e.g.: - SOC-POM/IK/02 Rev.05 dated 1 July 2014 (WI for C Sterilizer operation). - SOC-POM/IK/04 dated 1 February 2007 (WI for Stripper operation) c. Has the site had documented procedures for - SOC-POM/IK/05 Rev.02 dated 1 October 2011 (WI for processing certified FFBs? Degester and Screw Process operation) - SOC-POM/IK/06 Rev.02 dated 1 July 2014 (Continuous

Audit Report

Requirements STATUS Audit Findings / Objective Evidence ( NC / AOC / C ) Tank operation) - SOC-POM/IK/07 Rev.00 dated 1 February 2007 (Purifier operation) - SOC-POM/IK/08 Rev.01 dated 1 July 2014 (Vacuum Dryer)

d. Has the site had documented procedures for The site implement supply chain certification model IP processing non-certified FFBs? N/A therefore there is no processing of non-certified FFB.

D.4 Purchasing and Goods In

D.4.1. The site shall verify and document the tonnage and sources of certified and the tonnage of non-certified FFBs received.

FFB receiving was traceable to the supply base unit. During weighing on weighbridge the FFB sources is identified; whether received from own estate (block number and division) or from other source. The site only receive FFB from own estate and will not receive FFB from other source. Weighing slip and a. Is the site going to verify and document the receiving report issued clearly stated the weight off FFB tonnage of certified FFBs received ? C received and its source. The documented Production Report

has recapitulated FFB received from Sungai Liput Estate. Sample of Production Report in December 2015 mentioned that FFB received from own estate are 2,655.41 MT. It was verified that the tonnage of FFB received were verified and documented.

b. Is the site going to verify and document the FFB receiving was traceable to the supply base unit. During C sources of certified FFBs received ? weighing on weighbridge the FFB sources is identified; whether

Audit Report

Requirements STATUS Audit Findings / Objective Evidence ( NC / AOC / C ) received from own estate (block number and division) or from other source. The site only receive FFB from own estate and will not receive FFB from other source. Weighing slip and receiving report issued clearly stated the weight off FFB received and its source. The documented Production Report has recapitulated FFB received from Sungai Liput Estate. It was verified that the source of FFB received were verified and documented. c. Is the site going to verify and document the The site implement supply chain certification model IP N/A tonnage of non-certified FFBs received ? therefore there is no receiving of non-certified FFB.

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

a. Is the site going to inform the CB immediately if Procedure of Supply Chain Certification Standard Identity there is a projected overproduction of certified Preserve (SOC/PSM/9.10) Rev.04 dated 1 July 2015 chapter C tonnage ? 5.9 has described mechanism to inform the CB immediately if there is a projected overproduction of certified tonnage.

D.5 Records Keeping

D.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.

a. Is the site going to record and balance all receipts The site has record all receipts of RSPO certified FFB on daily of RSPO certified FFB on a three-monthly basis ? basis, recapitulated it in monthly basis and balance it in three- C monthly basis.

b. Is the site going to record and balance all The site has record all deliveries of RSPO certified CPO and C deliveries of RSPO certified CPO and PK on a PK on daily basis, recapitulated it in monthly basis and balance

Audit Report

Requirements STATUS Audit Findings / Objective Evidence ( NC / AOC / C ) three-monthly basis ? it in three-monthly basis.

D.6 Processing

D.6.1. The site shall assure and verify through documented procedures and record keeping that the RSPO certified oil palm product is kept segregated from non-certified material including during transport and storage.

a. Is the site going to assure and verify through The site has established procedure for Delivery of CPO and PK documented procedures that the RSPO certified (SOC-POM/PSM/7.06) Rev.04 dated 1 April 2015. There are oil palm product is kept segregated from non- 13 unit tanker that used for CPO delivery certified material including during transport and The site has assured and verify through documented storage ? procedure and implementation that RSPO certified oil palm product is kept segregated from non-certified material including during transport and storage

The site has 1 storage tank with capacity 500 MT CPO, and 2 kernel silo bin with capacity 40 MT each. The storage tank and C kernel silo bin were only used for Sungai Liput oil palm product only.

There are 13 tanker used for CPO transport and 3 trucks used for PK transport. All units are belongs to third party, PT. Gunung Kawi Sukses Makmur. CPO Tanker: - BK 9919 GK - BK 9699 LB

Audit Report

Requirements STATUS Audit Findings / Objective Evidence ( NC / AOC / C ) - BK 8049 GK - BK 8079 GK - BK 9088 GK - BK 9929 GK - BK 9399 GK - BK 9299 GK - BK 9049 GK - BK 8878 GK - BK 8868 GK - BK 9339 GK - BK 9379 GK - BK 8839 GK - BK 8029 GK

PK trucks: - BK 8819 GK - BK 9909 GK - BK 9039 GK

Tanker checking is conducted prior to CPO loading performed by driver, expedition, tekniker and security. Record of tanker checking dated 4 January 2016 mentioned that tanker BK 8029 GK is clean.

Records observed: 1. Weighbridge Docket # WT/AWT/2016/000025 dated 4 January 2016, from PT. Socfindo, to PT. Musim Mas Belawan, transporter PT. Gunung Kawi Sukses Makmur BK 8029 GK, CPO Netto 25.64 MT, contract # 40007301, DO # 300016015, Ref: 002/SL/1/2016,

Audit Report

Requirements STATUS Audit Findings / Objective Evidence ( NC / AOC / C ) record of tanker checking of BK 8029 GK dated 4 January 2016 2. Weighbridge Docket # WT/AWT/2016/00031 dated 5 January 2016, from PT. Socfindo, to PT. Musim Mas KIM I, transporter PT. Gunung Kawi Sukses Makmur BK 9909 GK, Palm Kernel Netto 15.44 MT, contract # 40007293, DO # 300016028, Ref: 005/SL/1/2016. b. The site shall assure and verify through record keeping that the RSPO certified oil palm product Based on D.6.1.a, it was confirmed that the site has assured and verify through record keeping and implementation that is kept segregated from non-certified material C including during transport and storage ? RSPO certified oil palm product is kept segregated from non- certified material including during transport and storage.

D.6.2. The objective is for 100 % segregated material to be reached.

Based on evidence described above, it was confirmed that the a. Is the objective for 100 % segregated material site only received and processed RSPO certified FFB from own able to be reached ? estate, storage tank and kernel silo bin were only used for CPO and PK from Sungai Liput Mill, transportation is only conducted C by dedicated tanker and trucks which is checked by competent personnel prior to loading, therefore 100% segregated material able to be reached.

Audit Report

3.3.2.2 Supply Chain Certification System

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? 5.3.6 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

5.3.7 Have the management documentation of the organization fully met to the requirements of the RSPO Supply Chain Yes Certification Standard? 5.3.7 Have any issues or areas of concern been clarified to the organization? N/A 5.3.7 Have the internal audits against RSPO supply chain standard been fully planned and underway before certification is Yes awarded ? 5.3.8 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 Yes the RSPO Supply Chain Certification Standard?

Audit Report

Supply Chain Certification System Status ( Yes / No )

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 ? 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 N/A 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? 5.3.11 Have a detail records have been compiled of the entry (opening) meeting including a list of the participants in the Yes meeting? 5.3.11 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? 5.3.11 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?

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: IP continues

Audit recommendations are always subject to ratification by RSPO.

This report was prepared by: Ria Gloria, Eko Purwanto 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

Audit Report

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. Socfin Indonesia

Hasan Bisri Kasyhuri Management Representative Date 21 April 2016

Signed for and on behalf of PT. SAI Global Indonesia

Inge Triwulandari Technical Manager Date 19 April 2016

Appendix “A” – Audit Record

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

25.01.2016 Day 1

Eko, Ria, Fitri Travelling Jakarta – Kualanamu – Sungai Liput

26.01.2016 Day 2

Sungai Liput Mill and Estate

Eko, Ria, Fitri Opening meeting 08.00 Verification on corrective action of previous Eko, Ria, Fitri 08.30 audit issues Sungai Liput Estate Document review and site visit: Criteria: 2.1 all indicators for environmental aspects Criteria: 2.2.1 and 2.2.2 Criteria: 4.1.1, 4.1.2, 4.1.3 Ria Criteria: 4.2. 4.3, 4.5 all indicators 08.30 – 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 Criteria: 6.10 Criterion: 7.3 if applicable Criterion: 8.1 Document review and site visit: 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 indicator Criterion: 4.4.2 Eko Criteria: 4.6.12 08.30 – 17.00 Criterion: 5.2 all indicators 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 committee gender (Mill and Estate) Document review and site visit: Criteria: 2.1 all indicators for OHS and environmental aspects Criterion: 4.4.1 Criterion: 4.6.6, 4.6.10, 4.6.11 Fitri 08.30 – 17.00 Criteria: 4.7 all indicators Criterion: 4.8 all indicators Criterion: 5.1, 5.3, 5.4, 5.5 and 5.6 all indicators Criterion: 8.1 Eko, Ria, Fitri Break 12.30 – 14.00

27.01.2016 Day 3

Sungai Liput Mill

Doc ID: 3843 / Issue Date May, 2014 © SAI Global Limited Copyright 2008 - ABN 67 050 611 642 Page 144 of 166 Audit Report Audit meetings plus functions/ processes/ Times* Date Auditor areas/ *shifts audited: From - To Document review and site visit: Partial certification requirements Criteria: 2.1 all indicators for land legislation Ria Criteria: 3.1. all indicators 08.00 – 17.00 Criteria: 4.1.1, 4.1.2, 4.1.3, 4.1.4 Criteria: 6.10 Criterion: 8.1 Document review and site visit: Criteria: 1.1; 1.2; 1.3 all indicators Criteria: 2.1.1 for social aspect 08.00 – 17.00 Eko 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 10.00 – 12.00 Masyarakat Eko SCCS 14.00 – 17.00 Document review and site visit: Criteria: 2.1 all indicators for OHS and environmental aspects Criterion: 4.4.1, 4.4.3, 4.4.4 Fitri Criterion: 4.6.6, 4.6.10, 4.6.11 08.00 – 17.00 Criteria: 4.7 all indicators Criterion: 4.8 all indicators Criterion: 5.1, 5.3, 5.4 and 5.6 all indicators Criterion: 8.1 Eko, Ria, Fitri Break 12.30 – 14.00

28.01.2016 Day 4

Sungai Liput Estate and Mill Audit continue for Sungai Liput Estate and Mill Eko, Ria, Fitri 08.00 – 12.00 for above criterion Eko, Ria, Fitri Discussion 14.00 – 15.00

Eko, Ria, Fitri Closing meeting 15.00

29.01.2016 Day 5 Travelling Sungai Liput – Kualanamu – Eko, Ria, Fitri 15.00 Jakarta

Appendix “B” – PreviousNonconformities and Opportunity for Improvement Summary

RSPO Principe and Criteria, Indonesian National Interpretation

Non-conformities RSPO Completion No Details Corrective Action PIC Status Criterion Date Certification audit 1. 2.1 Not all dump truck drivers have OHS license as per  Listing all dump truck and other heavy duty  Estate  July 2013 Closed indicator required in Manpower and Transmigration Ministry equipment operators. major 1 Regulation No. 9/2010.  Make a training program to gradually provide all dump trucks driver with OHS license.  For all dump truck drivers will be gradually trained for OHS license training that will held by appointed OHS Company Service (PJK3 – Perusahaan JasaKesehatandanKeselamatanKerja). In 2013, one of the dump truck drivers (with driving license no. 800306170463) was trained to receive OHS License to PJK3  Monitoring the realization of Training Program for Dump Truck Operator.  Recruit only dump truck driver that already has a driving license and OHS license or immediately trained the dump truck driver in case either one of the licensed not available upon recruitment. 2. Criterion Not all limited pesticides sprayers at division II as well as  Listing all limited pesticides sprayers.  Estate  July 2013 Closed 4.6 the pesticides mixer (Opas Kantor) have been trained by  Applied for limited pesticide handling training to indicator appointed trainer by Pesticide Commisioneras per Sygenta and agreed that the training was held in major 3 required in Agricultural Ministry Decision (Kepmentan) June 20, 2013. No. 949/Kpts/TP 270/12/98 year 1998  Sprayers who do not have the certificate are not a. allowed to handle limited pesticide.  Sprayers who do not have the certificate are not allowed to handle limited pesticide; new member will be directly proposed to follow related training. 3. Criterion No working contract with daily harvesters, they were not Company has established a new policy regarding daily  Estate  July 2013 Closed 6.5 legally listed as Socfin workers or contractors worker. worker under a Letter No. TN/KS/SE/002/13, dated June indicator Paid below the Regulation of Minimum Payment, 5, 2013 with effective date July 1, 2013, which stated major 2 received no accident insurance, no provisions of PPE that: and working tools. • Maximum hired daily harvester is 10% of the total permanent harvester and they called as On Job

RSPO Completion No Details Corrective Action PIC Status Criterion Date Training Worker • Minimum age of 18 years and maximum age of 30 years. • Protected by Accident Insurance (Jamsostek) and working contract under Cooperation (Koperasi) or other Monitoring of company’s policy implementation. Socialization of Company’s Policy No. TN/KS/SE/002/13, dated June 5, 2013 with effective date July 1, 2013. 4. Criterion Updated Procedure/Working Instruction of Rat Control to  Improvement of existing circular letter of rat control  Estate  July 2013 Closed 4.5 current situation was not available during assessment. into a Procedure of Integrated Pest Management for indicatorb. Rat No. SOC /PSM/7.10.18 1st Ed. Rev 00 dated major 1 June 1, 2013.  Improving internal communication in between sustainability department as the center of system management document controller with agronomy department, for any update of procedure according to current situation.  Socialization of Procedure of Integrated Pest Management 5. Criterion Well water analysis and river water analysis for 2012  Performing analysis of well and river water to the  Estate  February Closed 4.4 were not available. This was not complying with accredited environmental laboratory. 2014 indicator monitoring matrix of environmental aspects which obliged  Establishing monitoring of well and river water minor 1 the company to monitor analysis c. 6. Criterion Medical check up result for sprayers in 2012 showed that Sprayers who have high cholinesterase are not allowed  Estate  February Closed 4.6 some of sprayers cholinesterase parameter was higher to do spraying until their cholinesterase is in normal level. 2014 indicator than the normal standard but indicated as “Normal” minor 2 without further justification 7. Criterion Medical check up result for sprayers in 2012 showed that Sprayers who have high cholinesterase are not allowed  Estate  February Closed 4.6 some of sprayers cholinesterase parameter was higher to do spraying until their cholinesterase is in normal level. 2014 indicator than the normal standard but indicated as “Normal” minor 4 without further justification 8. Criterion  During the field assessment, it was found that  Provide goggles for harvesters.  Estate  February Closed Doc ID: 3843 / Issue Date May, 2014 © SAI Global Limited Copyright 2008 - ABN 67 050 611 642 Page 147 of 166

AUDIT REPORT

RSPO Completion No Details Corrective Action PIC Status Criterion Date 4.7 harvester was not wearing goggles as per required  Provide heat resistant apron and gloves for boiler 2014 indicator in “PPE Regulation Procedure” No. SOC/PSM/4.21 operators. minor 6 1st Ed., Rev 02 dated Oct 1, 2010.  Give awareness to all employees to use PPE  Heat resistant apron and glove were not available consistently. on Boiler working station as it was required in  Purchasing PPE according to the defined minimum “Procedure of PPE Regulation” No. SOC/PSM/4.21 stock. 1st Ed., Rev 02 dated Oct 1, 2010. 9. Criterion Workshop foreman has not been trained for “First Safety” Give the first safety training for workshop’s foreman  Mill  February Closed 4.7 training Performing monitoring of training program 2014 indicator minor 7 10. Criterion Inspection cards of portable fire extinguishers No. 22  Replace extinguishers No. 22 and no.19 and  Mill  February Closed 5.5 (boiler) and no.19 were not available and not in good providing them with inspection cards. 2014 indicator condition. Safety pin was missing and the pressure was  Give a refreshing training to extinguisher inspectors. minor 1 not in standard range. 11. Criterion Social Impact Assessment result which was stated in Compiling UKL-UPL report in detail describing  Mill  February Closed 5.1 UKL-UPL Monitoring Report of 2012 was too general. percentage of local workers and completed with 2014 indicator Only described the result in qualitative way without monitoring activities records. minor 1 presenting the significant data that can strengthen the result. For example, for job opportunity aspect, it was concluded that the number of hired worker. Moreover, the records of monitoring activities 12. Criterion  Housing: some of houses were not in good condition,  Identifying worker houses that not in good condition.  Estate  February Closed 5.5 for example: two semi-permanent houses in division  Establishing the worker house repair program. 2014 indicator III have no toilets, not in good sanitation, and have  Repairing worker houses according to the program. minor 1 broken ceiling.  School: the toilets number was appropriate comparing to students number, where only two semi permanent toilets available for 155 students. 3. Clinic: no tensi meter available at division III clinic. 13. Criterion Based on interview result to daily worker (BHL) Establishing the PPE standard for non-permanent  Estate  February Closed 5.5 on field assessment, it was found that no standard PPEs workers. 2014 indicator and working tools provided for daily worker.

AUDIT REPORT

RSPO Completion No Details Corrective Action PIC Status Criterion Date minor 2 14. Criterion Five yearly soil analysis as per required by internal Conducting soil analysis in July 2015  Estate  February Closed 4.2 procedure was not available. The latest soil analysis was 2014 indicator done in 2004. minor 1 15. Criterion Maps of fragile soils were not available. Provide map of fragile soils  Estate  February Closed 4.3 2014 indicator minor 1 16. Criterion No standardized measurement tools that were used to Provide the standard measurement devices for mixing  Estate  February Closed 4.3 measure agrochemicals as per recommended dosage. pesticide solution. 2014 indicator minor 1 ASA-1 17. Criterion Doctor of the clinic, Dr. Gemala as well as her nurses  Dr. Gemala has been replaced by Dr. Diana Kristina  Mill and Estate  4 April Closed 2.1 and midwife do not have the licenses as required by the as company’s doctor and her license is still valid until 2015 indicator Health Ministry Regulation No. 441/KP2TSP-KL/36/2012. December 10th, 2017 major 1  The license applications for nurses and midwife were applied to the Local Health Department in March 2015 and the Local Health Department has issued a Notification Letter stating that the license is still under process.  There is an agreement between the company and Dr. Diana Kristiana as the company’s doctor and she has the license which valid until December 2017  The application letter for nurses and midwife is in the process and the Notification Letter about this which is issued by the Local Health Department is available 18. Criterion Beneficial plants in Division III and IV were not well The company has provided evidences:  Estate  4 April Closed 4.5 maintained, there was no planting program of beneficial  Submit revised HCV management program in 2015 2015 indicator plant in 2015 for areas which have nettle caterpillars which cover planting and maintenance of beneficial major 1 attacks history during 2014, for example in Division IV plants, for example in Division III Block 63 there will Block 95, 98, 101. be planting program for Cassia Cobanensis (134 m),

AUDIT REPORT

RSPO Completion No Details Corrective Action PIC Status Criterion Date Turnera subulata (22 m), and Antigonon leptosus (22 m) starting from June 2015. 19. Criterion The usage of pesticides such as Cymbush at the dosage The company has provided evidences:  Estate  4 April Closed 4.6 200 cc/ ha and Santador with the dosage 470 cc/ ha  Verification of the pesticides usage by Assistant 2015 indicator were not in accordance with Procedure SOC/PSM-7.10- Manager. major 2 13 that shall be 300 cc/ ha and 400 cc/ ha respectively, no verification from supervisor.

20. Criterion The new Opas Kantor named Ramli (Division III) whose The company has provided evidences:  Estate  4 April Closed 4.6 job description was to mix pesticides had not been  Mutation letter of Ramli dated on February 28, 2015 2015 indicator trained for restricted pesticides applicator training. that he is no longer work as Opas Kantor. major 5  List of the latest certified restricted pesticides applicator (59 workers in 2015).

21. Criterion There was no appropriate management and disposal of The company has provide the revision of the procedure  Estate  13 July Closed 4.6 hazardous chemicals containers as chemical/pesticide of the waste management, SOC/DP/4.11-05 No. Rev : 2015 indicator containers was not properly disposed and used for other 04, indicated that the used chemical containers must be major 6 purposes. (PNC 4.6.6 Major and PNC 5.3.2/Minor)) identified and stored in licensed warehouse and disposed and 5.3 to licensed collector. indicator major 2 22. Criterion Specific Medical check up result for pesticides The company has provided evidences:  Mill and Estate  4 April Closed 4.6 applicators in 2014 was not available, for example in  Copy of specific medical check up result of 2015 indicator Division II, III and IV. pesticides applicator, for example: Ms.Suhariani, the major 11 cholinesterase level was in normal standard (3980 – 10800 U/L), so that she can continue her job as pesticides applicator.

23. Criterion As per procedure SOC/PSM/4.12 the OHS patrol shall be OHS patrol has been performed for all area in March  Mill and Estate  13 July Closed 4.7 performed monthly. However there is no OHS patrol for 2015 such as chemical warehouse, workshop, fuel 2015 indicator hazardous waste storage in 2014 and for all area in storage tank, fertilizer warehouse, waste water pond etc. major 2 January 2015 Hazardous waste warehouse also has been inspected in March 2015 for the following items according to the procedure: availability of hazardous symbol at containers, Doc ID: 3843 / Issue Date May, 2014 © SAI Global Limited Copyright 2008 - ABN 67 050 611 642 Page 150 of 166

AUDIT REPORT

RSPO Completion No Details Corrective Action PIC Status Criterion Date availability of emergency tools, availability of PPE, warehouse condition etc. 24. Criterion  There is no evidence that the high risk worker such  Medical check up will be conducted for all workers  Estate  13 July Closed 4.7 as operator of kernel crush have performed the annually according to the regulation and the annual 2015 indicator regular medical check up as required by Labor measurement program. minor 6 Ministry Regulation No.02/1980 and the company’s  The result of the medical checkup will be evaluated procedure No SOC/PSM/4.19, which is once a year. by company’s doctor.  No evaluation of medical check up result by the doctor of the clinic for those have performed the medical check up 25. Criterion No evaluation of HCV monitoring report which conducted The company has provided evidences:  Estate  4 April Closed 5.2 monthly as feedback for next HCV Management Plan.  Submit revised Procedure SOC/PSM/9.07 2015 indicator HCV management plan in 2015 is the same as in 2014 minor 4 26. Criterion The hazardous and toxic wastes was not identified and All hazardous waste including medical waste, used  Estate  13 July Closed 5.3 documented properly and the records were not available chemical containers, contaminated rags etc have been 2015 indicator at the waste storage. For example there was no record identified in the form “Identifikasi dan Pengendalian minor 3 for chemical container and contaminated rags. This is re- Limbah (Waste Identification and Handling)” occurrence from last audit and raised to Major NC. (PNC SOC/Form/4.11-01 and recorded in “Catatan Limbah B3 5.3.3 Minor) (Hazardous Waste Records)” SOC/Form/4.11-02.

27. Criterion There is no evidence for the identification and reduction The company has provided the identification and  Estate  13 July Closed 5.6 of greenhouse gas (GHG) emissions reduction plan to reduce or minimize GHG emissions 2015 indicator according to the GHG emission reduction minor 2 procedure/guidance (SOC/DP/4.11-08) : Identification of GHG emission i.e.:  Field emissions  Land conversion: 30,580.23 tCO2eq  Fertilizer: 363.22 tCO2eq  NO2 from fertilizer: 476.43 tCO2eq  Fuel consumption: 792.26 tCO2eq  Crop sequestration: -28,979 tCO2eq

AUDIT REPORT

RSPO Completion No Details Corrective Action PIC Status Criterion Date Mill Emissions  POME : 13,413.64 tCO2eq  Fuel Consumption: 141.82 tCO2eq  Grid Electricity utilization: 249.27 tCO2eq  Export of electricity to housing: -268.46 tCO2eq

Plan to reduce GHG emission:  Maximizing the use of organic fertilizer EFB) to reduce the use of chemical fertilizer.  Reduction of the use of pesticide  Managing volume of waste water.

28. Criterion There is no evidence that monitoring record of The monitoring of GHG record year 2014 for the Socfin  Estate  13 July Closed 5.6 greenhouse gas (GHG) has been reported to RSPO mills and plantations of Aek Loba, Negeri Lama, Sei 2015 indicator Liput, and Mata Pao has been reported to RSPO minor 3 Secretariat (attn Ms. Melissa Chin) dated July 3, 2015.

29. Criterion Social impact monitoring results, which refers to the SOP The monitoring of Social Impact Assessment was  Estate  13 July Closed 6.1 No. SOC / PSM / 9.03, is not available (Indicator 6.1.3) conducted in January 2014 and the report was issued in 2015 indicator March 2015. At time of the audit the report was still under major 3 process of issuance. The monitoring was conducted on the identified impacts both positive and negative:  The results of positive impacts monitoring as follows:  Public facilities provided by company such as mosques , churches, football fields, badminton court , volleyball court, clean water provision etc are still well maintained and used by communities for their needs.  CSR activities were conducted in line with the defined CSR program 2014 such as road repair program, drainage repair program, school building repair program etc.

AUDIT REPORT

RSPO Completion No Details Corrective Action PIC Status Criterion Date  Estate roads used by communities were still well maintained and used by communities for their access from villages to other places.  The resources existing inside plantation were still utilized by communities such as grasses for livestock communities, fern leaves for their daily foods or for sale etc

There was no negative impact found during monitoring. 30. Criterion During field assessment to Division IV, the lavatory of The corrective action plan:  Estate  27 January Closed 6.5 Mr.Nurhamid it was found not in good condition. Based  Identified employees housing without lavatory 2016 indicator on interview with housing staff (Krani Perumahan), Bpk  Prepare a lavatory building program as per above minor 3 Mulyono, there are some houses that do not have a identification standard lavatory. Workers build a simple lavatory  Do realization of lavatory facility

31. Criterion There is no evidences that the continuous improvement The company has provided the continuous improvement  Estate  20 June Closed 8.1 plan for these issues was available: plan as follows: 2015 indicator  Optimizing the yield of the supply base 1. Minimizing environmental impact major 1  Reduction plan in use of pesticides a. Minimizing subsidence of peat land.  Environmental impacts management plan  Waste reduction plan Maintaining water level of peat land at 50 cm maximal  Pollution and greenhouse gas (GHG) from land surface to minimize subsidence of peat land. emissions reduction plan b. Protecting and preserving riparian of river.  Management and Monitoring of Social impacts To protect the river from erosion and pollution from chemical treatment the following actions have been taken:

along river riparian buffer zone.

planted by beneficial plant and other woody trees. c. Minimizing the use of chemicals.

AUDIT REPORT

RSPO Completion No Details Corrective Action PIC Status Criterion Date Leucomosus. This method is reducing the use of pesticide. 2. Minimizing GHG emission. a. Energy to run mill operation using electric from own electrical production including to operate lorry that previously using fossil fuel. b. The use of shell and fiber as boiler fuel. c. The use of EFB to reduce the use of chemical fertilizer. d. Controlling volume of waste water produced to minimize methane gas emission from waste water pond. e. Maintaining water level of peat land at 50 cm maximal from land surface to minimize exposure of CO2 from peat land. 3. Reduction of pesticide use. a. Reduction in the use of pesticide to control caterpillar pest. b. Reduction in the use of paraquat to control weeds. 4. Management and monitoring social impact.

Management and monitoring social impact are conducted every year to ensure that the positive impacts are in place and the negative impacts are minimized. The positive impacts in 2014 are still maintained such as maintaining village road, pontoon as water transportation to cross river and other CSR programs and no negative impact arising during 2014. 5. Waste reduction

Reduction of pesticide use will reduce waste of pesticide containers as well as reduction of chemical fertilizer use will reduce waste of fertilizer bags. Other reduction wastes are conducted by reuse of waste such the use of 100% fiber produced as boiler fuel; reuse of used pesticide container as container of pesticide

AUDIT REPORT

RSPO Completion No Details Corrective Action PIC Status Criterion Date solution and as knapsack sprayer.

control of Sycanus Leucomosus as predator of caterpillar pest and using manual control for particular weed replacing paraquat use. Managing environmental impact by monitoring and measurement of emission and waste water produced by mill and plantation operation periodically.

pesticide use which is reducing used containers waste of pesticide.

peat land, Maximizing the use of organic fertilizer to reduce the use of chemical fertilizer, controlling volume of waste water and optimizing the use fiber and shell as boiler fuel aging social impact by monitoring the identified positive impacts periodically to make sure they are maintained well and monitoring the identified negative impacts to make sure they don’t happen again.

AUDIT REPORT

Appendix “C” –Nonconformities and Opportunity for Improvement Summary

RSPO Principe and Criteria

QEF08EL Non Conformance Report

Organisation Name: PT Socfin Indonesia – Sungai Liput Mill Location: Kab. Aceh Tamiang Date: 28 January 2016 Audit team leader: Ria Gloria Activity/Report ID: WI-821695 License/Certificate No.: FMS40086 Organisation’s acknowledgement of receipt of NCR Employee Name: Hasan Bisri Date NCR Accepted: 28 January 2016

Section 1 Section 2 Section 3 Section 4 Section 5

Details of non-conforming situation: SAI Verification Organisation’s Response/Action SAI Global SAI Global Verification of SAI Global NCR

(how and when) Taken: Response Corrective Action for Closure: Review: Effectiveness:

Name Date

NCR Nr. NCR

clause(s)

Classification Standard(s) & & Standard(s)

2016- RSPO Major Non-conforming situation: Due Date: Root cause : Response  There was schedule for internal Fitria 13 01 Criterion Some activities has not comply with legal 28 April 2016 (how / why did it happen) Acceptable doctor to visit Sungai Liput Rahma April 2.1 requirement  There was a problem to find (please see Estate twice a year, every May yanti 2016 indicator section 4 for and September. This schedule doctor who has hiperkes details) Major 1 SAI certificate around the estate update on 18 January 2016 Requirement: Follow up signed by Kepala Bhg Umum. Method:  There was miss RSPO Criterion 2.2 indicator Major 1 Reviewer:  There was reference letter from Offsite audit understanding on renewal the AK3U licence Fitria PT Lanto Masa Anugerah as PJK3 No.102/SKet/LMA- Rahmayanti  There was miss K3/MDN-II/2016 dated 15

understanding from personnel February 2016, the letter stated about frequencies of turbine Date: if the renewal licence of AK3U testing 13 April 2016 named Endro Kuswanto was in  There was no updated progress on Ministry of

schedule for sprayer health Manpower. examination every 6 months

AUDIT REPORT

Section 1 Section 2 Section 3 Section 4 Section 5

Details of non-conforming situation: SAI Verification Organisation’s Response/Action SAI Global SAI Global Verification of SAI Global NCR

(how and when) Taken: Response Corrective Action for Closure: Review: Effectiveness:

Name Date

NCR Nr. NCR

clause(s)

Classification Standard(s) & & Standard(s)

Objective evidence: Correction :  There was MoM for inspection (immediate fix)  dr. Diana Kristiana who served as an of turbine from Dinas Sosial honorary physician at the Sungai Liput  Internal doctor who has and Tenaga Kerja Aceh Estate does not have a certificate hiperkes certificate will visit Tamiang Regency dated 19 Hiperkes. This is not in accordance with regularly to estate. February 2016. Permenaker no. 1/1976  Resolve the renewal AK3U  Medical examination was held  Certificate AK3U named Endro Kuswanto licence named Endro on 7 March 2016 at Anugrah has been expired on 11 June 2015 Kuswanto to Ministry of Ibu Clinic Medan, 44 sprayers Manpower were examined and the result is  The last periodic testing of turbine all sprayers healthy. No.TU.038/W1.05/1997 was carried out in  Do the turbine testing with 29 December 2011 and turbine alternator Dinas Sosial dan Tenaga No.560.470.3/192/Turbine-K3/2011 was Kerja Aceh Tamiang Regency NCR 2016-01 closed carried out in 25 November 2011. This is  Do the medical examination not in accordance with Permenaker to all sprayers 4/1985 that stated periodic testing is annually. Corrective Action :  Land area covered on PEL different with (action to prevent recurrence) RKL RPL and HGU (Hak Guna Usaha). Area statement on PEL is 3,765.13 Ha,  Create the schedule for on RKL RPL is 3,729.51; and on HGU is internal doctor’s visit to estate 3,841.96 Ha  Monitoring validity period of  Specific medical examination for sprayer all licences was not conducted in 2015, it does not  Monitoring validity period of comply with the Decree of The Minister of machineries licence Manpower and Transmigration RI  Create schedule for sprayer No.3/1986 clause 7 which stated that health examination every 6 specific health examination shall be done months. for all sprayers at least once in a 6 months period.

AUDIT REPORT

Section 1 Section 2 Section 3 Section 4 Section 5

Details of non-conforming situation: SAI Verification Organisation’s Response/Action SAI Global SAI Global Verification of SAI Global NCR

(how and when) Taken: Response Corrective Action for Closure: Review: Effectiveness:

Name Date

NCR Nr. NCR

clause(s)

Classification Standard(s) & & Standard(s)

2016 - RSPO Minor Non-conforming situation: Due Date: Root cause : Response 02 Criterion There was no evidence that erosion rate of Next (how / why did it happen) Acceptable 4.3 slope area (24-38%) was monitored as surveillance Hand over between previous (please see indicator required by SOC/DP/9.06-01. audit assistant and current assistant section 4 for Minor 2 details) has not well conducted. Monitoring of slope area has Requirement: SAI been conducted however the Reviewer: RSPO Criterion 4.4 indicator Minor 1 Follow up record was not properly kept. Method: Ria Gloria

Site visit Objective evidence: Correction : Date:  There was no evidence that erosion (immediate fix) rate of slope area (24-38%) was Re-identify implementation of 23 March 2016 monitored as required by slope area monitoring needed SOC/DP/9.06-01. according to defined procedure and program.

Corrective Action : (action to prevent recurrence) Hand over between activity is conducted in written and completed with documentation, progress of implementation and program, etc.

AUDIT REPORT

Section 1 Section 2 Section 3 Section 4 Section 5

Details of non-conforming situation: SAI Verification Organisation’s Response/Action SAI Global SAI Global Verification of SAI Global NCR

(how and when) Taken: Response Corrective Action for Closure: Review: Effectiveness:

Name Date

NCR Nr. NCR

clause(s)

Classification Standard(s) & & Standard(s)

2016- RSPO Minor Non-conforming situation: Due Date: Root cause : Response 03 Criterion There was license of water utilization and Next (how / why did it happen) Acceptable 4.4 the measurement of water but it’s not surveillance  Nowadays, ground water (please see indicator section 4 for covered mill and estate. audit used for estate operational details) minor 1 and domestic consumption.

Requirement: SAI  The groundwater analysis was in progress Reviewer: RSPO Criterion 4.4 indicator Minor 1 Follow up Method: Fitria Rahmayanti (on site or Correction : evidence Objective evidence: (immediate fix) submitted)  The license of ground water utilization Date: Site visit  Re-identification the spots of for estate (used for estate operational) ground water that used for 23 March 2016 cannot be shown during audit. operational consumption  There was no evidence that the  Sent the sample of ground measurement of estate ground water water to be analyse at was performed to determine the quality. external parties Based on interview, ground water used by workers to daily consumption. Corrective Action : (action to prevent recurrence)  Adding the groundwater licence to the list of licences for regular monitoring  Create schedule and perform ground water analyse to the external parties once a year

AUDIT REPORT

Mill Supply Chain Certification System Nil

Opportunities for improvement – RSPO

Nil

Opportunities for improvement – Mill Supply Chain Requirements

Nil

Appendix “D” – Stakeholder’s issues and comment

Date Stakeholder Observation Client Clarification

- If ill employees are inpatient at - Until now the company has the clinic, they just got rice, no not received any discrepancy side dishes. or complaint from inpatient regarding dishes. There is

evidence in clinic in form of records regarding food including dishes. - It takes a long time (more than - Broken working tools will be 1 month) to replace broken replaced quickly if the broken working tools, e.g. egrek. tools handed over to the related personnels (Mandore or Assistant).

- Requesting payday to be - Ability of salary admin to advanced from 5th day to 1st collect and process salary day of each month. data is 3 – 4 days, so the quickest date for payment is the 5th date each month.

- Requesting that extra food for - Extra fooding given 2 times a spraying worker to be month is according to the increased from twice a month Workers budget. to 4 times a month. (harvesting, fertilizing, 26/01/2016 spraying, - Other than salary, employees - Rice received by the mill get a ration of rice. The company was quality tested processing, proportion of rice among for physical, colour and taste workshop) others: 15 kg/month for by the worker representatives workers, 11 kg/month for (PUK SPSI) equipped with worker's wife and 7 kg/month minutes and testing results. for child of workers. However The company stored rice for some worker complaint that only a month, if there is rice given was not good. quality change before 2 month then the rice will be replaced. - Organisation provided training for Occupational Health and Safety, personnel protective equipment were provided by organisation. - Clean water was supplied from mill and several workers using wells water. - Calculation of wage was determined by management in accordance with national regulation. - Overall worker registered as a social security of worker-BPJS

Date Stakeholder Observation Client Clarification

members. - No discrimination. - There was no sexual harassment cause - Pregnant test for women sprayer was conducted for ensuring that there was no pregnant worker. - There were no sprayers that they are breast-feeding. - Organisation structure of gender committee was available. - Gender committee was routinely conducted dissemination to worker regarding sexual harassment handling, protection reproduction right, occupational health and safety, etc. 26/01/2016 Gender - Menstruation leave is allowed committee on condition should take a rest in the clinic. - There was no sexual harassment cause - Pregnant test for women sprayer was conducted for ensuring that there was no pregnant worker. - There were no sprayers that they are breast-feeding. - Remuneration 2015 was based - on Governor of Aceh Regulation #81/2014 dated 30 October 2014, IDR 1,900,000 per month. Regulation for minimum wage 2016 was available, which is Governor of Aceh Regulation #60/2015 dated 30 October 2015, IDR Union 2,118,500 per month. 26/01/2016 Leader - The management has SPSI disseminated Prohibition of employment of children under the age of 18 years and ban on pregnant and lactating women to perform spraying through SOP through, Ethical Conduct Policy No. SOC/DP/4.01-64 dated on June 01, 2014 - Periodic meeting is held at

AUDIT REPORT

Date Stakeholder Observation Client Clarification

least once a year to review the issue of labour/employee, or incidentally if there are problems related to the employee (will be made circular for a meeting). - Meeting to discuss the PKB (Collective Labour Agreement) has always done every 2 years. - Several meetings were conducted with the unions, among others: 5 December 2015 regarding crop premium price of 2016 and 22 December 2016 regarding collective leave on 2 January 2016. - Villagers around ethnically Aceh, Batak, Melayu and Javanese. - There was no land conflict with surrounding community. - Routinely companies provide assistance through CSR programs in the form of borrowing heavy equipment (excavators, graders and compactors), scholarships, Society assistance to the poor, leaders - religious facilities, etc. Village Head - Access roads surrounding 27/01/2016 of Kebun villages are always maintained Sungai by the company. Liput, - Relationship between the Purwodadi, . company and the surrounding citizen has been well established. - The company encourage the - Requesting aid to repair the mosque caretaker to make ceiling and roof addition in the proposal regarding this. ablution place of the Mosque. - Making of trench are - Requesting the making of conducted by selected tranches in residential area of contractor in free bid, local Kebun Sungai Liput Village people are encourage to using workers from local make a bid. citizen. - Requesting that local citizens - Recruitment process is to be prioritized in recruitment always announced in local process. media and all villages around Camat estate, every candidate are evaluated fairly based on job 27/01/2016 Kejuruan Muda dan requirements. Karang Baru - Requesting aid regarding oil - The company has gave palm seed for local farmer. cheap price for Pre-Nursery, which is IDR 14,500 for local farmer. Moreover estate can Doc ID: 3843 / Issue Date May, 2014 © SAI Global Limited Copyright 2008 - ABN 67 050 611 642 Page 163 of 166

AUDIT REPORT

Date Stakeholder Observation Client Clarification

give training regarding oil palm cultivation to local farmers. - Requesting that CSR - CSR realization report can be realization reported to District given to local government if office. there is written request.

- There are still surrounding - The company has citizen that not prosper yet, implemented CSR program request to increase their and employment for qualified welfare. person. - There are no responses yet - Requestors are encouraged related to the request of land to propose according to Act for construction of public No.2/2012. facilities, for example: Puskesmas (health centers) and Posyandu. - Along the public road there - The company has not should be greenbelts, which received any dissemination are woody plants 25 m to the from the government left and right of the public road. regarding the greenbelt issue.

- Companies land boundary are - PT. Socfin Indonesia, Sei potential to conflict, the Liput is an old company in company must disseminate Aceh Tamiang which has between the companies and clear HGU border according the community, witnessed by to HGU map and has border the public and relevant trench as addition. agencies.

- Uses of PT. Socfindo HGU - The company consistently land by the people, request the regulates public land users company to discipline it. without permission by reporting to authorities. - Mentioned that at present time, - Recruitment process is recruitment process is not always transparent because it transparent, recruitment must always announced in local be delivered to the Aceh media and all villages around Tamiang Office of Labour. At estate, every candidate are present, PT. Socfindo labour evaluated fairly based on job Disnaker report is not mentioning requirements. The 27/01/2016 Kabupaten number of employee needs. government office only need Aceh to write the request if need Tamiang the recruitment report. - Referring to the work accident - Dissemination of PPE uses is that caused the death of the performed continually. employee, the dissemination of PPE use must be further enhanced.

AUDIT REPORT

Date Stakeholder Observation Client Clarification

- Referring to the work accident - Dissemination of PPE uses is that caused the death of the performed and improved employee, the dissemination of continually. PPE use must be further enhanced. - Requesting that CSR program - CSR realization report can be to be more transparent given to local government if Kapolsek especially for Muspika (local there is written request. government). 27/01/2016 Kejuruan Muda dan - Related to the land dispute that - As mentioned in the Karang Baru occurred at companies around procedure dispute will be PT. Socfindo, recommended a processed through mediation meeting between companies with local government and around the District of Kejuruan land authority (BPN), then Muda and Karang Baru to continues to court if it’s not discuss HGU border issues solved. involving BPN, government and related institution.

Feedback from letter sent to the stakeholder was received: No Stakeholder Issue Client clarification 1. Kecamatan/District Routine meeting was conducted by PT No need clarification Kejuruan Muda, Socfindo with Villages Head to discuss letter #700.186 environmental impact (air pollution and dated 26 January waste) caused by organisation activities and 2016 CSR activities. Meeting is conducted quarterly in Kecamatan Kejuruan Muda. Suggestion from District Head was:

1. Employed worker from local community

2. In CSR, the organisation can give oil palm seed to community to improve community economical 2. Environmental 1. PT Socfindo has had environmental 1. No need clarification Agency of Aceh permit: 2. Report of RKL RPL Tamiang, letter  RKL RPL document implementation #660/186 dated 1 #552/1062/VI/2006 semester II 2015 has February 2016  Permit of waste water discharge from not been sent due the Bupati Aceh Tamiang #303 year 2014 measurement result has not been finished.  Permit of temporary storage of Measurement result hazardous waste from Bupati Aceh was conducted in Tamiang #302 year 2014 December 2015. 2. PT Socfindo has sent report of RKL RPL 3. PT Socfindo has sent implementation semester I 2015 but report report of hazardous of semester II 2015 has not been sent waste management to 3. PT Socfindo has not sent report of Environmental hazardous waste management to Agency of Aceh Environmental Agency of Aceh Tamiang Tamiang periodically. as required by PP 101/2014 4. No need clarification 4. PT Socfindo has followed PROPER since 2014

AUDIT REPORT

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

RSPO Principle and Criteria, Indonesian National Interpretation:

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.