Bukit Puteri- RSPO 4Th ASA Report 12102015

Roundtable on Sustainable Palm Oil 4th Annual Surveillance Audit Report Report no.: ASA 4 _824 502 14020 Surveillance assessment against the RSPO Principles & Criteria NI Malaysia year 2014

Sime Darby Plantation Sdn. Bhd. SOU 10 Bukit Puteri Palm Oil Mill

Level 3A, Main Block, Plantation Tower, No 2, Jalan PJU 1A/7, Ara Damansara, 47301 Petaling Jaya, Selangor Darul Ehsan,Malaysia.

Date of assessment: 27-29 April 2015

Report prepared by: Carol Ng Siew Theng (RSPO Lead Auditor)

Certification Body: PT TUV Rheinland Indonesia Menara Karya, 10 th Floor Jl. H.R. Rasuna Said Block X-5 Kav.1-2 Jakarta 12950,Indonesia Tel: +62 21 57944579 Fax: +62 21 57944575 www.tuv.com/id

TABLE OF CONTENTS

1.0 SCOPE OF ANNUAL SURVEILLANCE AUDIT 3

1.1 National Interpretation Used 3 1.2 Type of Assessment 3 1.3 Certification Details 3 1.4 Location and Maps 4 1.5 Organisational Information / Contact Person 5 1.6 Description of Supply Base 5 1.7 Actual production volumes, tonnages and projected outputs. 6 1.8 Dates of Plantings and Replanting Cycles 6 1.9 Area of Plantation (Total, Planted and Mature) 7 1.10 Progress Against Time Bound Plan 7 1.11 Compliance to Rules for Partial Certification 8 1.12 Progress of associated smallholders or outgrowers towards RSPO compliance 10 1.13 Approximate Tonnages Certified 10 2.0 ASSESSMENT PROCESS 11

2.1 Certification Body 11 2.2 Qualifications of Lead Assessor and Assessment Team 11 2.3 Assessment Methodology & Agenda 12 3.0 ASSESSMENT FINDINGS 14

3.1 Summary of Findings 14 3.2 Status of Previously Identified Non-conformities 37 3.3 Identified Non-conformances, Corrective Actions Taken and Auditors Conclusions 39 3.4 Noteworthy Positive Components 44 3.5 Issues Raised by Stakeholders and Findings Pertaining to Issues 44 4.0 CERTIFIED ORGANISATION’S ACKNOWLEDGEMENT OF INTERNAL RESPONSIBILITY 45

4.1 Date of Next Surveillance Visit 45 4.2 Acknowledgements of Internal Responsibility and Formal Sign-Off by Client 45 APPENDICES 46

Appendix 1: Audit plan 46 Appendix 2: List of Abbreviations 49 Appendix 3: List of Stakeholders Interviewed and Contacted 51 Appendix 4: Observations and Opportunities for Improvement 51

RSPO 4th Annual Surveillance Audit Report - Sime Darby Plantation Sdn.Bhd–

Bukit Puteri Palm Oil Mill- Pahang-

Page 3 of 53

1.0 SCOPE OF ANNUAL SURVEILLANCE AUDIT

1.1 National Interpretation Used The operations of the palm oil mill(s) and its supply base of FFB were assessed against the Malaysia Na- tional Interpretation (MY-NI) year 2014 of the RSPO Principles & Criteria and the RSPO Supply Chain Certifi- cation Standard 2014. As per the RSPO’s announcement on the MY-NI 2014 dated 12 March 2015, the new NI is compulsory to be implemented only from 1 st May 2015 onwards. In consideration with this and with written approval from the RSPO, any non-compliances raised against new Major Indicators under the MY-NI 2014 were raised as mi- nor non-compliances.

1.2 Type of Assessment This 4 th annual surveillance certification assessment was carried out on 1 mill and 1 estate under Bukit Puteri Palm Oil Mill owned by Sime Darby Plantation Sdn. Bhd. The date of certification of this unit was July 07, 2011. This unit was previously certified by Control Union Certification.

1.3 Certification Details The details of RSPO certification of Sime Darby Plantation Sdn Bhd, SOU 10 Bukit Puteri Palm Oil Mill are as per the table below

Table 1: RSPO Certification details of Bukit Puteri Palm Oil Mill

RSPO Membership no.: 1-0008-04-000-00

RSPO Certificate no.: 824 502 14020

(Previously)

Date of first RSPO certificate & validity: 07/07/2011 valid until 06/07/2016

Date of certification audit: May 11 to 18, 2009

Date of previous surveillance audit: 14 – 16 April 2014

Date of previous RSPO certificate & va- 18502206 001, same validity as current. lidity (if applicable): Certificate was revised due to transfer of RPSO CB approval from TUV Rheinland Malaysia Sdn. Bhd. to PT TUV Rheinland Indonesia - accredited 6 June 2014 Previous CPO tonnages claimed: 13,507 tonnes

Previous PK tonnages claimed: 3,341 tonnes

Revised CPO tonnages claimed: 10,309 tonnes

Revised PK tonnages claimed: 2,133 tonnes

QMF: RSPO-007b-11 RSPO 4th Annual Surveillance Audit Report - Sime Darby Plantation Sdn.Bhd–

Bukit Puteri Palm Oil Mill- Pahang-

Page 4 of 53

1.4 Location and Maps

Table 2: GPS locations for all estates and mills included in annual surveillance assessment

Name of mill / es- GPS locations Location tate Latitude Longtitude Bukit Puteri Palm Oil Mill Location: Kilang Kelapa 04°12’09.7” 101°51’45.5” Mill Sawit Bukit Puteri, K/B 31, Sungai Koyan, 27650 Raub, Pahang Darul Makmur, Malaysia 04°12' 90” 101°51' 45” Sungai Koyan, 27650 Raub Bukit Puteri Estate Pahang Darul Makmur, Malaysia

Figure 1 : Bukti Puteri Estate Map

QMF: RSPO-007b-11 RSPO 4th Annual Surveillance Audit Report - Sime Darby Plantation Sdn.Bhd–

Bukit Puteri Palm Oil Mill- Pahang-

Page 5 of 53

1.5 Organisational Information / Contact Person Contacts details of the company are as follows: Company Name: Sime Darby Plantation Sdn. Bhd. Bukit Puteri Oil Mill Address: Head Office : PSQM, Level 3A, Main Block, Plantation Tower, No. 2, Jalan PJU 1A/7, Ara Damansara, 47301 Petaling Jaya, Selangor DarulEhsan, Malaysia. Mill Location: Kilang Kelapa Sawit Bukit Puteri, K/B 31, Sungai Koyan, 27650 Raub Pahang Darul Makmur, Malaysia

Contact Person: Pn. Sabarinah Marzuky

Telephone: 03-7848 4388

Email: [email protected]

1.6 Description of Supply Base

Table 3: FFB Supply Information for Bukit Puteri Palm Oil Mill for July 2013 to June 2014 and July 2014 to March 2015

FFB received FFB received FFB Contributors July 2013 to June 2014 July 2014 – March 2015 Tonnes % Tonnes % Company owned estates: Bukit Puteri estate 49,945.12 88.43 31,958.19 94.12 Kerdau Estate* 421.08 0.75 269.08 0.79 Sungai Mai estate* 2,039.66 3.61 702.63 2.07 Sub-total 52,405.86 92.78 32,929.90 96.98 Outgrower : Golden Horse Plantations 2,881.11 5.10 208.28 0.61 Sdn Bhd Perniagaan Sinaran Mewah 1,195.52 2.12 818.19 2.41 Sub-total 4,076.63 7.22 1,026.47 3.02 TOTAL 56,482.49 100.00 33,956.37 100.00 Note: * FFB received from Kerdau and Sg. Mai is not on normal basis but due to crop diversion. Both estates are certified under SOU 11 Kerdau, with certificate number 824 502 14019.

QMF: RSPO-007b-11 RSPO 4th Annual Surveillance Audit Report - Sime Darby Plantation Sdn.Bhd–

Bukit Puteri Palm Oil Mill- Pahang-

Page 6 of 53

1.7 Actual production volumes, tonnages and projected outputs. Table 4: Certified tonnages claimed, certified tonnages purchased or sold, total and projected CPO and PK production from SOU 10 Bukit Puteri Mill

Amount (MT)

CPO PK

Certified tonnages claimed 13,507.00 3,341.00

Certified tonnages sold* 1000.00 0.00

Certified tonnages purchased 0.00 0.00

Actual Production for certified product** 10,308.67 2,132.66

Actual Total production** 11,660.51 2,411.06

Projected total output for next 12 months 15,875.28 3,678.92

Actual Conversion factor for FY2013/14 OER : 20.64 KER : 4.27 Projected conversion factor for FY2014/15 OER : 20.28 KER : 4.70

Note : * Based on eTrace transation records on 7 October 2014. No other transactions made. ** Period of July 2013 to June 2014. Actual production of certified product from Bukit Puteri estate only. 1.8 Dates of Plantings and Replanting Cycles Information on the dates of plantings is as per the table below.

Table 5: Year of plantings of company estate supplying to Bukit Puteri Mill

Year of Plantings Bukit Puteri Estate 2012 - 2014 1241.98 2009 - 2011 1304.37 1996 - 1998 415.64 1989 -1991 838.1 TOTAL 3800.09

Table 6: Planned and actual oil palm replanting activities for SOU 10 Sime Darby Plantation Sdn.Bhd

Year Total planned replanting area (ha)

2013/2014 350.18 2014/2015 252.04 2015/2016 0.00 2016/2017 293.72 2017/2018 188.88 2018/2019 388.17 2019/2020 378.72 Total 1,501.53

QMF: RSPO-007b-11 RSPO 4th Annual Surveillance Audit Report - Sime Darby Plantation Sdn.Bhd–

Bukit Puteri Palm Oil Mill- Pahang-

Page 7 of 53

1.9 Area of Plantation (Total, Planted and Mature) Table 7: Oil Palm Planted Area Summary, FFB Production and Average yield/ha for Bukit Puteri Estate Oil Palm Mature Immature FFB Total area Average Estate Name Planted area (Production) (Non-production) Production* (ha) yield/ ha (ha) area (ha) area (ha) (tonnes) Bukit Puteri 3,875.80 3,800.09 2,709.95 1090.14 49,945.51 17.05 TOTAL 3,875.80 3,800.09 2,709.95 1090.14 49,945.51 17.05 *Period for Financial Year 2013/2014 Table 8: Land use data for Bukit Puteri Estate HCV/ Land used for other purposes (ha) Oil Palm Estate Total area Potential Swamp/ Planted Ar- Security Name (ha) HCV areas* Nursery Roads Buildings unplanta- ea (ha) trenches (ha) ble area Bukit Puteri 3,875.80 3,800.09 6.20 4.06 76.28 4.71 23.64 18.61 TOTAL 3,875.80 3,800.09 6.20 4.06 76.28 4.71 23.64 18.61

1.10 Progress Against Time Bound Plan

Table 9: RSPO Latest Certification Timebound Plan for Sime Darby Plantation (SDP) (as of September 2014)

Financial year Targeted Achieved (July – June) June 2008 5 SOUs Achievement of Timebound PlanSime Darby Plantation has had all its SOUs (Malaysian & Indonesian) completing the RSPO Main Assess- 2008/2009 20 SOUs ( ment by end Dec 2011 in accordance to the initial timebound plan. As at from Malaysia Dec 2011, all Malaysian SOUs have been RSPO certified (with the ex- and ception of 2 new oil mills commissioned to replace the current oil mills Indonesia) after the initial timebound plan targets). 98% of Sime Darby Plantation's 2009/2010 20 SOUs ( upstream operations is RSPO certified as at Sept 2014, one SOU - PT from Malaysia MAS pending certiifcation in Indonesia due to some social disputes. and Sime Darby Plantation will proceed with the next steps of certification Indonesia) upon satisfactory resolution of the matter. 2010/2011 17 SOUs ( from Malaysia Note: Time-bound plan to achieve 100% RSPO certification has shifted and to 2015 .Revision of total number of SOUs.The total number of mills Indonesia) have been revised from 59 w.e.f Aug 2013 due to strategic align- ments/closure of mills.

Table 10: Status RSPO certification for all Palm Oil Mills under Sime Darby Plantation Sdn Bhd

Status Malaysia Indonesia Total Remarks

Malaysia previously had 39 mills, now reduced to 34 mills: Sg Samak and Jele- ta Bumi, Yong Peng, Mostyn and Segaliud POM has been closed down. RSPO Certified 34 24 58 Due to strategic alignment, there are mills (Sepang POM) converted to third party oil mill and not included in the RSPO Certification timebound plan

QMF: RSPO-007b-11 RSPO 4th Annual Surveillance Audit Report - Sime Darby Plantation Sdn.Bhd–

Bukit Puteri Palm Oil Mill- Pahang-

Page 8 of 53

Indonesia: Currently 25 Mills

Undergoing Stage Indonesia: PT MAS Palm Oil Mill has un- 1 or Stage 2 As- 0 1 1 dergone their RSPO Main assessment and sessment/RSPO is delayed due to some social disputes.

EB Review Revised number of SOUs for SDP is 59 Total SOUs 34 25 59 beginning August 2013.

Table 11. Other RSPO Supply Chain Certified Facilities under Sime Darby Plantation (SDP)

RSPO SCCS Date of SCCS Certi- Certification Certification No Business Unit Certification fication Process Body Date Trading Option Certified on 28 1 Unimills B.V. SG & MB Jan – March 2009 Control Union June 2011 Certified on 25 2 SD Biodiesel SG & MB Jan – March 2010 SIRIM March 2011 Certified on 10 3 SD Jomalina SG & MB Oct – Dec 2010 SIRIM March 2011 Certified on 19 4 SD Kempas MB Jul- Sept 2011 SIRIM Aug 2011. Certified on 13 5 SD Austral MB Jan – March 2012 SIRIM April 2012. Certified on 13 6 NURI – SD Jomalina MB Jan – March 2012 SIRIM April 2012. Kernel Crushing Plant Certified on 13 7 SG & MB Jan – March 2012 SIRIM – Carey Island (KCP) April 2012. Certified 10 Sept 8 Morakot MB July - August 2012 SGS 2012 Certified 14 Dec 9 Hudson & Knights MB March – June 2012 SIRIM 2012

1.11 Compliance to Rules for Partial Certification Compliance of the uncertified management units of Sime Darby Sdn. Bhd against the rules for partial certification according to RSPO Certification System clause 4.2.4 was assessed by Documentation review. There is currently only one SOU located in Indonesia (PT Mitral Austral Sejahtera (MAS)) that is not yet RSPO certified. A summary of findings is as stated below.

Partial Certification Requirements Audit Findings (a) The parent organization or one of its ma- Sime Darby Plantation Sdn. Bhd is RSPO member jority owned and / or managed subsidiaries with membership number is 1-0008-04-000-00. is a member of RSPO. (b-d) A challenging time-bound plan for certi- The company has a timebound plan both for Ma- fying all its relevant entities is submitted to laysia site and Indonesia sites as determined on the Certification Body (CB) during the first the table 9 above. Almost all of the company’s certification audit. The time-bound plan SOUs have been certified with only one uncertified should contain a list of subsidiaries, estates company remaining in Indonesia, PT MAS, which and mills. has already undergone the RSPO Certification Au-

QMF: RSPO-007b-11 RSPO 4th Annual Surveillance Audit Report - Sime Darby Plantation Sdn.Bhd–

Bukit Puteri Palm Oil Mill- Pahang-

Page 9 of 53

Partial Certification Requirements Audit Findings Any revision to the time-bound plan or to the dit by PT Mutuagung Lestari, but certification is de- circumstances of the company shall cause layed due to some social disputes, as explained the plan to be reviewed. for whether it is still further below. appropriate, such that changes to the timebound plan are permitted only where the organisation can demonstrate that they are justified (e) No replacement of primary forest or any PT MAS, as the only remaining SOU of Sime Darby area identified as containing High Conserva- Plantations which has not been certified, has un- tion Values (HCVs) or required to maintain or dergone certification audit by PT Mutuagung Les- enhance HCVs in accordance with RSPO tari. Compliance to this requirement was therefore criterion 7.3. Any new plantings since Janu- evaluated by the certification body. ary 1st 2010 must comply with the RSPO New Plantings Procedure

(f) Land conflicts, if any, are being resolved PT MAS has a number of ongoing social disputes in- through a mutually agreed process, e.g. volving the local communities in the hamlets of RSPO Grievance procedure or Dispute Set- Kerunang & Entapang, Sanggau District, West Kali- tlement Facility, in accordance with RSPO mantan, Indonesia, who were supported by TuK (facili- criteria 6.4, 7.5 and 7.6. tator) & Oxfam (represented by Oxfam Novib (observ- er). A complaint regarding the dispute was made by the Project Affected Communities (PAC) to the RSPO on 5th November 2012, in which the PAC listed 14 demands, mainly related to the indigenous and land rights of the local community, disagreement over the plasma partnership arrangement between the local community and PT MAS, and requested contributions to the community. The demands are in progress of being resolved by the company, with process being monitored by the certification body which conducted the certification audit for PT MAS and the RSPO. Progress of the case is updated periodically on the RSPO’s Dis- puter Settlement Facility page. As of January 2014, 10 of the 14 demands have been resolved. As per latest update on February 2015, TuK, on behalf of the Kerunang/Entapang community would propose solu- tions to Sime Darby by March 2015 on the settlement of the land issues especially those pertaining to HGU.

(g) Labour disputes, if any, are being re- PT MAS, as the only remaining SOU of Sime Darby solved through a mutually agreed process, in Plantations which has not been certified, has under- accordance with RSPO criterion 6.3. gone certification audit by PT Mutuagung Lestari. Compliance to this requirement was therefore evaluated by the certification body.

(h) Legal non-compliance, if any, are being PT MAS, as the only remaining SOU of Sime Darby resolved in accordance with the legal re- Plantations which has not been certified, has un- quirements, with reference to RSPO criteria dergone certification audit by PT Mutuagung Les- 2.1 and 2.2. tari. Compliance to this requirement was therefore evaluated by the certification body.

QMF: RSPO-007b-11 RSPO 4th Annual Surveillance Audit Report - Sime Darby Plantation Sdn.Bhd–

Bukit Puteri Palm Oil Mill- Pahang-

Page 10 of 53

1.12 Progress of associated smallholders or outgrowers towards RSPO compliance There are no associated smallholders supplying to Bukit Puteri POM, only independent outgrowers supply to Bukit Puteri POM through two FFB agents i.e. Golden Horse Sdn. Bhd. and Sinaran Mewah Sdn. Bhd. There is no specific planning by Bukit Puteri POM for independent outgrowers to work towards to RSPO compliance.

1.13 Approximate Tonnages Certified The approximate tonnages certified have been revised to reflect the latest actual certified tonnages as per Table 4, which is as follows

Crude Palm Oil (CPO) : 10,309 tonnes Palm Kernel (PK) : 2,133 tonnes

QMF: RSPO-007b-11 RSPO 4th Annual Surveillance Audit Report - Sime Darby Plantation Sdn.Bhd–

Bukit Puteri Palm Oil Mill- Pahang-

Page 11 of 53

2.0 ASSESSMENT PROCESS 2.1 Certification Body

PT TUV Rheinland Indonesia is member of Group TÜV Rheinland Group, a global leader in independent testing and assessment services. The TÜV Rheinland Group was established in 1872 with offices located in over 500 locations in 65 countries on all five continents. PT TUV Rheinland Indonesia offers certification for a wide range of management systems according to established international standards including ISO 9001, ISO 14001, OHSAS 18001, and SA 8000. PT TUV Rheinland Indonesia’s office is located in Jakarta, Indo- nesia.

2.2 Qualifications of Lead Assessor and Assessment Team

The Surveillance audit team members of this surveillance audit are:

Name Position Qualifications / Experience

Education: B.Sc. Biotechnology & B.Sc. Environmental Management - Monash University. Trainings attended: RSPO Lead Auditor Training Course – WildAsia; RSPO eTrace Certification Body Training – UTZ Certified; RSPO Supply Chain Certi- fication Training – David Ogg & Partners; RSPO Malaysian National Interpre- tation Requirements and Certification – SIRIM; Implementation of RSPO Principles & Criteria - QA Plus; RSPO Stepwise Support Programme; 2nd Bi- odiversity Seminar – RSPO; Certification Body Biodiversity Forum & Work- Carol Ng Lead Audi- shop – RSPO; Environmental Quality Act 1974 – DOE; ISCC System Green- Siew Theng tor house Gas Training – ISCC; SA8000 Lead Auditor Training – Global Group; ISO14001 Lead Auditor / Auditor Training – Neville Clarke Working experience: Experience in implementing sustainable practices in Sime Darby plantations to comply with RSPO requirements, performing RSPO internal audits and implementing sustainability projects. Prepared training materials and conducted several RSPO requirements trainings and workshops to plantation management teams (2008), over 5 years experience in coordination and auditing for RSPO projects in Malaysia, Indonesia, and Ghana (year 2014 onwards). Education : Bachelor of Agriculture Science– Bogor Agriculture Institute, (1995 to 2000) Training attended: ISO 9001:2008 Lead Auditor Training, Sustainable Forest Management, Indonesia Sustainable Palm Oil Lead Assessor, RSPO. Harso Yuli An- Auditor Working experience: Social Research-Indonesia Centre for Agricultural, tena (Social) (social economic and policy study), Social researcher-CSR Indonesia mott- McDonald Indonesia (2010-2011), Personal Consultant in Research and De- velopment-Colors Media Group (2011-2013), RSPO and ISPO Auditor (2013-present). Education: Master Degree in Natural Reseource and Environmental Man- agement, Bogor Agriculture University Trainings attended: Environmental Impact Assessment (EIA), Ecological Auditor Risk Assessment (ERA), Internal Quality Audit Training for Quality Manage- (Supply ment System, IRQA-QMS ISO 9001:2000, High Conservation Value (HCV), Muhammad Chain, Timber Legality Verification (SVLK), RSPO Lead Auditor Course, ISPO Audi- Fundy C. Kur- Best prac- tor Course, RSPO SCCS training by BM Trada niawan tices, En- Working experience: Experienced in Environmental Impact Assessment, viron- Environmental Health Safety Senior Officer (EHS-Officer) in Wilmar Interna- ment) tional Plantation, Internal Auditor for Wilmar International Plantation, Auditor for Rountable on Sustainable Palm Oil (RSPO), Indonesian Sustainable Palm Oil (ISPO), Certification for Timber Legality Verification (SVLK) in PT TUV Rheinland Indonesia since June 2012 – present.

QMF: RSPO-007b-11 RSPO 4th Annual Surveillance Audit Report - Sime Darby Plantation Sdn.Bhd–

Bukit Puteri Palm Oil Mill- Pahang-

Page 12 of 53

Name Position Qualifications / Experience

Education : Diploma in Public Administration- MARA Institute of Technology, Malaysia (1991). Certificate of Safety and Health Officer-Malaysian Insurance Institute (2003). Bachelor of Corporate Administration (Hons)-MARA Universi- ty of Technology, Malaysia (2003), Master of Science in Occupational Safety and Health Management-Northern University of Malaysia (2011), Candidate for Phd in Occupational Safety and Health Management-Northern University of Malaysia. Trainings attended: ISO 9001:2000 IRCA/IATCA Lead Auditor Training- International Management & Technology Limited (Kuala Lumpur), ISO 14001:2004 IEMA Approved EMS Advanced Lead Auditor Training Course- Aspects Moody Certification Ltd (United Kingdom). OH&SMS IRCA Certified Lead Auditor Training Course-Moody International (Kuala Lumpur). MS 1722 Lead Auditor Training-Niosh Certification (Kuala Lumpur) Yusof Nizar Auditor Working experience: Experience in managing, consulting, training and auditing quality, environmental, occupational safety and health management systems such as ISO 9001:2008, ISO 14001:2004, OHSAS 18001:2007, MS1722:Part 1:2005 from 1996-Current. Contract Trainer of OSH & Environ- mental Legal & Other Requirements Lead Auditors course for SIRIM Training Services Sdn Bhd & NIOSH Certification Sdn Bhd. Contract Auditor for Envi- ronmental Management System for Sirim QAS International (2006). Depart- ment of Occupational Safety and Health Malaysia (DOSH) Registered Safety and Health Officer (2003-2006). Approved Human Resources Development Fund (HRDF) Trainer (2011). Assessor for Prime Minister’s Hibiscus Award and involving assessment for oil and gas companies, plantations industries, manufacturings, utilities, cleaning and transportations services (2003-2011). OSH and Environmental Auditor for TUV Rheinland Malaysia RSPO Principles & Criteria.

2.3 Assessment Methodology & Agenda The surveillance assessment was conducted between April 27-29, 2015 as per the surveillance audit program below. The surveillance audit was carried out in accordance with TUV Rheinland RSPO audit procedure as well as the RSPO Certification Systems document. During assessment, the qualified TUV Rheinland assessors used the RSPO standard as endorsed for the country in which the assessment took place and recorded their findings. Due to the location and proximity of the estates, combined with common management systems, it was possi- ble to carry out both field and document assessments of all estates and the mill within the time frame without compromising the integrity of the assessment in anyway. The estate and the mill were visited and the assessment team carried out field and document assessments of compliance to all the RSPO principles and criteria. Common systems were identified and specific evidence was recorded for individual estates. Interviews were conducted at all estates and the mill. The company proposed the correction and corrective action for all identified non conformities raised to the certification body 15 days after the closing meeting. Verification of closure of major non-conformances was conducted 30 days after the closing meeting of the surveillance audit and implementation of corrective actions for minor non-conformities will be verified during the next surveillance audit. The surveillance audit agenda is as explained below.

QMF: RSPO-007b-11 RSPO 4th Annual Surveillance Audit Report - Sime Darby Plantation Sdn.Bhd–

Bukit Puteri Palm Oil Mill- Pahang-

Page 13 of 53

Location/ Date Main activities Main sites 27/04/2015 Bukit Puteri Opening meeting and Introduction. Palm Oil Mill On-site visit: Receiving area, mill, diesel tank area, scheduled waste store, workshop, weighbridge, dispatch, water treatment plant, palm oil mill effluent treatment, tertiary treatment plant Interviews: Mill Manager, Assistant Mill Manager, Pahang Zone representatives, workers at mill, Store Clerk and workshop workers. Document Review: OSH Manual, Legal Register, OSH Policy, minutes of meeting of safety and health committee, accidents report and statistics, chemical stock card, MSDS, medical surveillance report, HIRARC formats, Envi- ronmental Aspect and Impact Evaluation, Audiometric report, CHRA report, training records and SOP, PERKESO claims, Agriculture Reference Manual, Annual Work Programme, PPE Issuance record. First aid box log book, Safety Work Procedure/Safety Operating Procedure for Mixing and Storage of Chem- ical. BOD analysis certificates, smoke density monitoring sheets, waste management plan, environmental improvement plan, pollution prevention plan, SCCS procedures, record of training, mass balance record, weighing slip, FFB delivery slip, human resources management, pay and conditions, social impact assessment and management plan, stakeholder consultation records and documentation, communication, social policies implementation records. Interview with management

28/04/2015 Bukit Puteri Document Review: Area statement, FFB production and yield per ha, replanting Estate programme, OSH Manual, OSH Policy SOP, Legal Register, legal compliance records such as permits, minutes of meeting for safety and health committee, HIRARC formats, Environmental Aspect and Impact Evaluation, PPE Issuance record, accident records and statistics, Medical Surveillance report, CHRA report, training records, permits, Emergency Procedures, plan and implementation of road maintenance, realization of EFB application, reduce GHG plan, plan and realization of replanting activity, record of land tax year 2014, boundary stone monitoring book, log book information request, procedures for request information, document publically available, code of ethical conduct, legal land, budget for economic long term, fertilizer application record, soil erosion, HCV assessment and management realization plan, emission, pollution and GHG identification and management plant, human resources management, pay and conditions, social impact assessment and management plan, stakeholder consultation records and documentation, communication, social policies implementation records.

On-site visit: Chemical store/temporary store, chemical mixing area, diesel tank area, scheduled waste store, plantation, fertilizer store, workshop, clinic, workers housing, application of EFB (field 90D), replanting area (field 13C), potential erosion area (field 12E, field 98A), buffer zone in S.Telang (field 09B), Telang river, EFB mulching in field number 98B, owl box in filed number 13C, boundary stone in field number 91D and 91E, Bernam river in field number 97E, replanting activity in field number 91E, for estate. Interviews: Estate Manager, Store Clerk, Hospital Assistant, Mandores and Pa- hang Zone representatives. 29/04/2015 Bukit Puteri Closing Meeting Mill

QMF: RSPO-007b-11 RSPO 4th Annual Surveillance Audit Report - Sime Darby Plantation Sdn.Bhd–

Bukit Puteri Palm Oil Mill- Pahang-

Page 14 of 53

3.0 ASSESSMENT FINDINGS

3.1 Summary of Findings • RSPO P&C The following is a summary of findings during this surveillance audit for the criteria listed in the RSPO Princi- ples & Criteria Malaysia National Interpretation year 2008.

Principle 1: Commitment to transparency

Criteria assessed: CR1.1, CR1.2 Criteria not assessed: -

Findings: CR1.1 Bukit Putri Mill and Bukti Putri Estate has a mechanism for stakeholder communication stated in SOM Standard Operation Manual Section 5, Sub-Sect 5.5 Responsibility, Authority and Communication, Ver- sion 1, 2008. The procedure for external communication on Appendix 5.5.3.2 “Mentioned “media for stakeholder communication will conducted through the all print and electronic mass communication net- works”. Each of information request letter received will documented and every information request letter will response accordance to the urgent priority on the time frame for external communication: in dealing with external communities, the following time frame to provide feedback should be adopted: - Within two week of the date receipt for communication requiring direct feedback - Within one week of the completion of the investigation, for communication requiring investigation.

Records of information requests from stakeholders were sighted, and were addressed by the company, for example letter from: - National School of Keledek Village, Kuala Lipis, number CBA 3004-100-2/8/1 dated on March 17, 2015 about donation request for school. This letter has been addressed by the company through the letter dated on 16/04/2015 with approval donation referenced number BPOM1415/04001 with amount RM 200. All of incoming letters from the stakeholder are recorded in the logbook from 2014 and 2015. All incoming letters from the stakeholders sighted during this audit were regarding requests for donation. And all letters were addressed by the company in accordance with the company procedure.

CR1.2 Sime Darby HQ has made general company procedures and policies available on their company website, however there is lack of evidence that management at SOU level have been informed or aware of the type of estate or mill related specific documents required to be made publicly available as listed in Indicator 1.2. This was noted as an observation.

CR1.3 The company (Mill and Estate) also has book on Code of Ethical Conduct which has been briefed to all of workers, evidenced by the record of attendant list and also when the muster ground before all of workers go to field dated on April 16, 2015. The Code of Ethical Conduct also briefed to the all of contractors, with the evidence sighted in the form of briefing material and stamp of attendance.

Compliance status: Compliance with observations

Principle 2: Compliance with applicable laws and regulations

Criteria assessed: CR2.1, CR2.2, CR2.3 Criteria not assessed:

QMF: RSPO-007b-11 RSPO 4th Annual Surveillance Audit Report - Sime Darby Plantation Sdn.Bhd–

Bukit Puteri Palm Oil Mill- Pahang-

Page 15 of 53

Findings:

CR2.1 Sample licenses and permits or the mill and the estate were checked and confirmed to be valid as below: - Malaysian Palm Oil Board (MPOB) License no. 536632004000 for the mill stating maximum processing capacity of 120,000 MT of FFB per year, dated 2 January 2014 and valid from 1 st March 2015 until 29 February 2016 - DOE license no. 004160 for the mill valid from 1 July 2014 until 30 June 2015. The compliance schedule states maximum processing capacity of 20MT per hour. The mill carries out quarterly reporting to the DOE in accordance with the license. - License for own electricity installation for Bukit Puteri Palm Oil Mill for capacity of installation no more than 1700 kW. License valid from 20/09/2014 to 19 September 2015 - MPOB license no. 524186002000 for Bukit Puteri Estate valid from 1 November 2014 until 31 October 2015. No maximum processing capacity specified. - Written Approval for 150 KVA & 450 KVA gensets used at the mill, dated 4/12/13 from Pahang DOE Office requiring the noise at boundary to be below 70 dB(A) between (7.00 am-10.00pm) and 60 dB(A) at night (10.00pm-7.00am). - Sampled two mill workers confirmed to be certified for Authorised Entrant and Standby Person for Confined Space, certificate for one worker expiring 05/08/16 and for other worker expiring 06/06/16.

However, there is evidence of legal non-compliances found, i.e.: - Stated in the mill’s DOE license dated 1 July 2014 to 30 June 2015 that the mill is required to install a CCTV facing the mill’s chimney for visual record of the black smoke which is to be active for 24 hours and records maintained for 6 months. However, no such CCTV has been installed by the mill - The mill is required to carry out chimney emissions monitoring using the Continuous Emissions Moni- toring System (CEMS), however it was informed the CEMS system has been non-functional since January 2015 and the mill has not taken action to repair the CEMS system and inform the DOE that the system is not working - The mill is carrying out measurement of smoke density, no analysis report on smoke density results is submitted to the DOE on a monthly basis, as required in the DOE license. - Found Noise at Boundary was not monitored as required to be below 70 dB(A) between (7.00 am- 10.00pm) and 60 dB(A) at night (10.00pm-7.00am) by Written Approval for 150 KVA & 450 KVA dated 4/12/13 from Pahang DOE. - Both the mill and estate does not store and manage contaminated gloves as well as fluorescent tubes as scheduled wastes. This was raised as a non-compliance (NCR 2015-01 of 06 )

In addition, there were several observations as follows where the company has already taken action to resolve these issues: - The mill did not carry out stack sampling for Chimney 2 in year 2014, which is not in accordance with accordance with the mill’s DOE’s license stating requirement to carry out stack sampling twice a year. Sighted that the mill has a signed contract dated 18 March 2015 with their contractor, UiTM A&A Laboratory to carry out the stack sampling and for chimney 2 which is utilized less often, the mill only plans to start usage of the chimney in May 2015, hence they will request the contractor to perform the stack monitoring during that time. - The mill is currently in progress to obtain their Fire Certificate. Installation was done and waiting for the local fire department (Bomba) to inspect as confirmed from email correspondences with the local fire department. - Found a Compressor (PMT 110331) with permit that expired on 11/03/15. The Department of Oc- cupational Safety and Health (DOSH) had already came and inspected the compressor as seen from the DOSH Log Book record for visit done on 17/07/15. Email was sent by the company to DOSH requesting a payment form for renewal. - At Bukit Puteri Estate, a Chemical Health Risk Assessment (CHRA) was last conducted in July 2010 and is due to be conducted again in year 2015 (every 5 years) in accordance with legal requirements. Found an email sent to the company 08/04/15 regarding quotation for CHRA Assess- ment for Pahang Zone, as evidence that the company is planning to conducted CHRA according to

QMF: RSPO-007b-11 RSPO 4th Annual Surveillance Audit Report - Sime Darby Plantation Sdn.Bhd–

Bukit Puteri Palm Oil Mill- Pahang-

Page 16 of 53

schedule.

Sime Darby has shown their compliances to applicable law regarding Manpower and Human resources Management, such as: a. Migrant Worker recruitment. Estate and Mill employ migrant workers, mostly work as harvesting and maintenance. The migrant worker recruitment events had been conducted by partner, but some of Sime Darby officer has been involved in the process, such as in interviews and contract agreement assignment process. Based on interview result with migrant workers from Indonesia, they have been interviewed by and signed the contract agreement in front of Sime Darby’s officer in Mataram Indonesia, before they went to Malaysia. The contract has been developed in Bahasa and fully understood by the workers.

The company hold worker's passport as collateral (so that workers would not abscond during the contract period), and will be given back to the workers after they fulfilled their contract period and/or when the worker take their 3 months leave back to their home country (after 2 years). This condition is known by the workers before they join the company, and they accepted this as requirements. As substitution, the company give provisional ID Card (photo stip) for each worker while they live and work in Sime Darby’s operation areas. This card containing information such as passport number and the company name. b. Minimum Wage Payment Evidences regarding worker payment for all estates and mills have collected during audit, such as worker piece rate calculation norm and payslips. The piece rate calculation norm per April 2014 giving guidance for the worker regarding their rights related to wages calculation, such as: - Rate per Tonnes, - Minimum Productivity target per day, - Basic Wage Without Price Bonus - Price Bonus - Basic Wages + Price Bonus + Incentive Allowances - Rate per Unit for Price bonus and Incentive allowances

This piece rate norm and calculation is in compliance with national minimum wage and achievable for normal harvesting worker. Payslips for November 2014, December 2014, and February 2015 for 3 workers and payslips for March 2015 for 9 workers were sampled during this audit. Based on these evidences company demonstrated their compliance to local law that payment is made according to national minimum wage requirement (RM 900). c. General Leave, Sick leave and Annual Leave There are some evidences shows regarding work leave such as Worker Offering Letter for Local Worker and Working Contract Agreement for Migrant worker. Worker offering letter mentions worker right to Paid Leave for: - General Leave 13 days per year; - Sick Leave 14 days (less than 2 years), 18 days (between 2 to 5 years), 22 days (over 5 years), and maximum 60 days for hospital treatment/inpatient. - Annual leave 14 days (below 5 years) and 16 days (over 5 years). d. Overtime in general and in specific conditions

Checking to mill worker attendant record found that some worker has overtime more than 3 hours a day, which is within the legal requirements. The evidence is a letter from Manpower Office of Peninsular Malaysia regarding Regulation of overtime under section 60A (4) (a) of the Employment Act. 1955.

There are over 20 days of holidays in Malaysia, and in accordance with the Employment Act 1955, the company allocated 13 days public holidays to workers, and allows them to choose certain holidays based on their wish to celebrate those holidays. If worker works on a public holiday, than the company will pay the overtime as regulated by the government. There is a letter from Mill Manager to all staff, January 1 st 2015, regarding “Public Holidays for 2015. This letter explains the holidays

QMF: RSPO-007b-11 RSPO 4th Annual Surveillance Audit Report - Sime Darby Plantation Sdn.Bhd–

Bukit Puteri Palm Oil Mill- Pahang-

Page 17 of 53

for Malaysian and Indian workers. Checks of worker attendance records and wage calculation shows that company has complied with national regulations regarding holiday overtime payment. Based on payslips and worker attendant records showed during audit, company has shown their compliance regarding overtime payment. e. Minimum Worker Age Requirement Worker list for all estates and mill has collected and checked during audit. There was no worker found aged below 18 years old. The youngest worker found for estates and mill were around 21 years old, a daily rated worker, born in July 1 st 1994 (Mill). All migrant workers has follow requirement regarding age limitation in according to prevent any child worker issues. From field check observations at housing, plantation areas and mill conducted during this surveillance, there is no child worker found in all of the company’s operations areas.

At the Mill, evaluation of compliance scorecard as approved by Mill Manager dated 22/04/15 was sighted. The result or compliance is 97.4%. From sample checks of the LORR, it was found to be not properly documented in accordance with actual requirements as per OSHA 1994 & EQA 1974. For example: Part V is supposed to be regarding general duty of employer and self-employed person, duty to formulate S&H policy, duty of employer to person other than their employee, but was wrongly stated as general duty of employee and not to interfere or misuse things provided for S&H and discrimination against employee. - Part VI is supposed to be regarding general duty for designer, manufacturer and supplier and Part VI is supposed to be regarding general duty of employees, but is stated as general duty of employers at work, duty not to interfere with or misuse things provided and discrimination against employee. - Part VII (Safety and Health Organization) include requirements on Safety and Health officer, but this is supposed to be excluded as it is not applicable for the organization - Requirement to conduct medical surveillance is not mentioned. - Environmental Quality Act 1974 was not properly identified and evaluated and found missing sections that are applicable to the organization, i.e. Section 22 (Restriction of Pollution to Atmosphere), Section 23 (Restriction of Noise Pollution), Section 29A (Prohibition of Open Burning), Section 34B (Prohibition against placing, deposit ect..of scheduled waste). - Section 29 regarding Prohibition of discharge of waste to Malaysia water was included in the LORR, but actually not applicable to the organization This was raised as a non-compliance (NCR 2015-02 of 06)

CR 2.2 During this 4th surveillance audit, there is no change of document legal land. Bukit Puteri Mill has record of legal land use, based on document of “National Land Code no. H.S.(D)30, Mukim Batu Yoh, Li- pis Area, Lot No.PT.856 about 2000 ha, with category land use for Agriculture, and registered on Feb- ruary 14, 1975 valid for 99 years until February 13, 2074. Evidence that the mill paid for the land tax (‘ cukai tanah Negara’ ) was seen from document dated 25/03/2014 for No. Lot 000856 with taxes nomi- nal paid by the mill. For Bukit Puteri Estate also no change to legal land ownership documents. According to the Malaysia Government, legal land for Bukit Puteri Estate is about 3,844.5 Ha, consist of 5 land titles, and each land title is valid for 99 years, and located in Batu Yon Lipis. The land titles are: - Title No. HS (D) 238, with the area about 728.433 Ha, Lot No.PT 1277 (Mukim Batu Yon). Regis- tered on June 25, 1983. Valid for 99 years until June 24, 2082. - Title No. HS (D) 32, with the area about 607.0275 Ha, Lot No.PT 858 (Mukim Batu Yon). Regis- tered on February 14, 1975. Valid for 99 years until February 13, 2074. - Title No. HS (D) 30, with the area about 809.37 Ha, Lot No.PT 856 (Mukim Batu Yon). Registered on February 14, 1975. Valid for 99 years until February 13, 2074. - Title No. HS (D) 31, with the area about 607.0275 Ha, Lot No.PT 857 (Mukim Batu Yon). Regis- tered on February 14, 1975. Valid for 99 years until February 13, 2074. - Title No. HS (D) 237, with the area about 1,092.65 Ha, Lot No.PT 976 (Mukim Batu Yon). Regis- tered on June 25, 1983. Valid for 99 years until June 24, 2082. Bukit Puteri Estate has paid the land taxes accordance to the each of land title, with evidence seem from is payment slip dated on 25/03/2015 for Agriculture land type, example land taxes for Lot. No. 856 has been paid.

QMF: RSPO-007b-11 RSPO 4th Annual Surveillance Audit Report - Sime Darby Plantation Sdn.Bhd–

Bukit Puteri Palm Oil Mill- Pahang-

Page 18 of 53

It was found during the 2 nd surveillance audit that there is discrepancy in measurement result between Depart- ment of Survey and Mapping (“Jabatan Ukur and Pemetaan”) Pahang and company’s Surveyor i.e. 69.12 ha. The Department of Survey and Mapping conducted a re-survey in detail again in year 2013. The results of re- survey by Department of Survey and Mapping (“Jabatan Ukur and Pemetaan”) Pahang was that total land area is of 3,875.80 ha (consisting of Lot No. PT 1277 : 727.10 ha, Lot No. 858 : 607.6 ha, Lot No. PT 856 : 840.80 ha, Lot No. PT 857. 607.30 ha, and Lot No.976 : 1,093 ha) that there is a gap of total areas with land title amount of 31.29 ha. The company had sent a letter to local government of Lipis (Pegawai Daerah Lipis – Pe- jabat Daerah and Tanah Lipis 27200, Kuala Lipis, Pahang – Darul Makmur) on May 8, 2013 about request of endorsement for total areas from result of re-survey. However, during this audit it was found there was no update on this request. This was noted as an observation.

Based on field observations for boundary stone, Bukit Puteri Estate conducted the maintenance of boundary stones. Sample boundary stones checked in the field were confirmed to be accessible and visible. The border for the estate with adjacent to external stakeholder is marked using boundary stones, trenched and also fenced by the estate.

There was no land conflict found between company with the all stakeholder or others local community. The last land dispute issue that arose was resolved through an agreement and covered in the last surveillance. Evidence of a conflict resolution process is available in the form of correspondence between the two parties involved, the local government and land department of Lipis. The last correspondence was a letter dated of September 13, 2013 from the company to the local government and land department of Lipis that company will not pay back or compensation to the applicant for land tax payment made by the applicant to the local government because company has already paid land tax it to local government too.

CR 2.3 The company continues to maintain procedure document issued in November 1 st 2008 regarding “Flowchart and Procedures on handling land Disputes”. There are two kinds of potentials matters, On- Land and Ex0-Workers (staying in estate quarter). During this 4 th surveillance audit, there is no change found with regards to change to information about the right to use land. There is no evidence found that the company diminishes the legal, customary, or user rights of other user without their free, prior and informed consent.

Compliance status: Non-compliance NCR 2015-01 of 06 There is evidence of legal non-compliances found, i.e.: - Stated in the mill’s DOE license dated 1 July 2014 to 30 June 2015 that the mill is required to install a CCTV facing the mill’s chimney for visual record of the black smoke which is to be active for 24 hours and records maintained for 6 months. However, no such CCTV has been installed by the mill - The mill is required to carry out chimney emissions monitoring using the Continuous Emissions Monitor- ing System (CEMS), however it was informed the CEMS system has been non-functional since January 2015 and the mill has not taken action to repair the CEMS system and inform the DOE that the system is not working - The mill is carrying out measurement of smoke density, no analysis report on smoke density results is submitted to the DOE on a monthly basis, as required in the DOE license. - Found Noise at Boundary was not monitored as required to be below 70 dB(A) between (7.00 am- 10.00pm) and 60 dB(A) at night (10.00pm-7.00am) by Written Approval for 150 KVA & 450 KVA dated 4/12/13 from Pahang DOE. - Both the mill and estate does not store and manage contaminated gloves as well as fluorescent tubes as scheduled wastes.

NCR 2015-02 of 06 As sampled found LORR was not properly documented in accordance with actual requirements as per OSHA 1994 & EQA 1974. For example: - Part V is supposed to be regarding general duty of employer and self-employed person, duty to formulate S&H policy, duty of employer to person other than their employee, but was wrongly stated as general duty of employee and not to interfere or misuse things provided for S&H and discrimination against

QMF: RSPO-007b-11 RSPO 4th Annual Surveillance Audit Report - Sime Darby Plantation Sdn.Bhd–

Bukit Puteri Palm Oil Mill- Pahang-

Page 19 of 53

employee. - Part VI is supposed to be regarding general duty for designer, manufacturer and supplier and Part VI is supposed to be regarding general duty of employees, but is stated as general duty of employers at work, duty not to interfere with or misuse things provided and discrimination against employee. - Part VII (Safety and Health Organization) include requirements on Safety and Health officer, but this is supposed to be excluded as it is not applicable for the organization - Requirement to conduct medical surveillance is not mentioned. - Environmental Quality Act 1974 was not properly identified and evaluated and found missing sections that are applicable to the organization, i.e. Section 22 (Restriction of Pollution to Atmosphere), Section 23 (Restriction of Noise Pollution), Section 29A (Prohibition of Open Burning), Section 34B (Prohibition against placing, deposit ect..of scheduled waste). Section 29 regarding Prohibition of discharge of waste to Malaysia water was included in the LORR, but actually not applicable to the organization

Principle 3: Commitment to long-term economic and financial viability

Criteria assessed: CR3.1 Criteria not assessed: -

Findings: CR3.1 Bukit Puteri Mill has a budget document named the MPLAN for year 2014/2015. The document includes a monthly forecast of mill production from own estate and outside sources for mill intake of oil palm, crude palm oil production, palm kernel production, total palm oil extraction (20.28%) and total palm kernel extraction (4.70%). The MPLAN also includes a breakdown of mill costs including reception, fruit handling, sterilization, threshing, pressing, clarification, depericarping, kernel recovery, boiler, power generation, laboratory, oil recovery, water treatment plant (WTP), effluent treatment plant (ETP), workshop and maintenance, and EFB disposal. Other non-operational costs listed include for admin, statutory payment, security, general building, general expenses, training, ICT, ESH, amenities, health, social, and foreign workers. The MPLAN also details the cost of each of the aspects above in RM/FFB, RM/palm product (PP) and RM/CPO. A summary of the MPLAN was also prepared for next 4 financial years until FY 2018/19, including summary of projected mill FFB intake, CPO production, kernel production, OER and KER and mill costs for all major mill operational activities as well as mill admin and labour overhead for each financial year.

Bukit Puteri Estate has also established a budget for long term economic commitment. The budget program showed the replanting program in 2014/2015, with the replanting program per year i.e.: - Replanting program in 2016/2017 for about 293.72 Ha in field number E29789F; E29789H; E29790C. - Replanting program in 2017/2018 for about 188.88 Ha in field number E29790E and E29790F - Replanting program in 2018/2019 for about 388.17 Ha in field number E29790B; E29991A; E29790A; E29790D. - Replanting program in 2019/2020 for about 378.72 Ha in field number E29796B; E29797A; E29796A. Bukit Puteri Estate also has record of replanting programme implemented in 2013/2014 for total replanted area of 350.18 Ha and in 2014/2015 total replanted area is 252.04 Ha. For the next 5 years for replanting program in Bukit Puteri estate under SOU 10 has also been explained in Table 6.

Compliance status: Full Compliance

Principle 4: Use of appropriate best practices by growers and millers

QMF: RSPO-007b-11 RSPO 4th Annual Surveillance Audit Report - Sime Darby Plantation Sdn.Bhd–

Bukit Puteri Palm Oil Mill- Pahang-

Page 20 of 53

Criteria assessed : 4.2, 4.3, 4.4, 4.5, 4.6, 4.7, 4.8 Criteria not assessed: CR4.1

CR4.2 Bukit Puteri Estate has record of fertilizer application. Example for AC fertilizer application in July – Au- gust 2014, applied in field number 89H, 90A, 90C, 90D, 90E, 90F, 91A, 91B with application dosage is 2kg/tree, and actual application is about 18,941.4 with total of 94,707 palm oil trees. For field number 89H with total area of 91.64 Ha and total of 11,913 planted oil palm trees, application dosage 2 kg/tree, application realization is about 23,836 kg or 477 bags, with application done on 12/12/2014.

Records of leaf analysis conducted periodically are available in the fertilizer recommendation document of the estate. The most recent leaf analysis was conducted at August 8, 2014/2015 by the Research & Development (R&D) Centre-Upstream. The leaf analysis mentioned the fertilizer recommendation and fertilizer type is based on year planting. For soil analysis conducted every 5 years, the last soil analysis was conducted on September 2013.

Records of EFB application are also available at the estate, as seen from the EFB application record and program. For example, in field number 98B, total EFB application on this field in February 2015 is about 6,713 MT. Based on field observation, EFB application has been carried out in compliance with the company procedure i.e. one layer application.

CR 4.3 Bukit Puteri estate has more than 60% undulating area into hilly area but there is no peat soils, as stated on the soil map and confirmed during field visits. Bukit Puteri Estate has identified the fragile soil to minimize the erosion through the map of fragile soil through the slope map with scale 1:30,000 i.e.: - 0 – 2o (9.07%) is about 351.57 Ha - 2 – 6o (29.68%) is about 1,150.68 Ha - 6 – 12 o (35.81%) is about 1,387.98 Ha - 12 – 20 o (22.50%) is about 872.08 Ha - 20 – 25 o (2.51%) is about 97.31 Ha - > 25 o (0.43%) is about 16.76 Ha

A slope protection policy has been developed. The company implements an SOP for construction of terraces in accordance with Section 4: Land Preparation of the Sime Darby Agriculture Reference Manual: Oil Palm Planting issue no. 1 year 2011, version 2, issued 01/07/2011. The SOP defines terraces for different levels of slope, that terraces should be back sloped and also stated that areas with slope greater than 25° slope should not planted and best left for biodiversity purposes. This was observed in practice in the field at block 91E, i.e. area being prepared for replanting in year 2015 where cover crops and beneficial plants have been planted prior to planting of oil palm, and block 13C, at recently replanted area at Bukit Puteri estate in year 2013, where oil palm is already planted and observed that terracing practices and ground cover planting was carried out in accordance with the SOP. A letter of offer dated 31 st July 2014 between Bukit Puteri Estate and contractor named Jasa Awah Enterprise for land preparation for replanting of oil palm to oil palm at PR 2015A (69.48ha), PR 2015B (81.94ha) and PR 2015C (100.62ha) was sighted. The agreement specifies that preparation works shall include terracing according to specific width parameters for certain slope levels, and that areas above 25° shall be preserved for biodiversity purposes, which is in accordance with the company’s SOP.

The company has road maintenance programme for July 2014 to June 2015 for A roads (main roads), B roads (internal roads) and collection roads, with specific field where road maintenance is planned is marked. It was seen from the logbook that road maintenance activities are carried out regularly in almost every month. The logbook includes records of road maintenance activities that are carried out at each division, including date, block, length of road graded, areas patched and preparation of new culverts.

CR4.4 The estates implement an SOP for Water Management as per their Estate Quality Management System dated 1/11/2008. The SOP defines measures to improve soil productivity and minimize loss of soil and

QMF: RSPO-007b-11 RSPO 4th Annual Surveillance Audit Report - Sime Darby Plantation Sdn.Bhd–

Bukit Puteri Palm Oil Mill- Pahang-

Page 21 of 53 nutrients by controlling field water levels at acid sulphate and non-acid sulphate soil areas, maintaining water management infrastructure including drains, watergates, drain blocks and water table tubes, and monitoring water and soil pH and water salinity at appropriate intervals. In addition, there is also a guidance to protect watercourses stated on Sustainable Plantation Management System (SPMS) Appendix 14, version 1, 1 January 2010 as the best practice to include protection of water courses and wetlands, including maintaining and restoring appropriate riparian buffer zone or before replanting along the natural waterways within the estate. Bukit Puteri estate recycles rainwater through collection at strategic location such as at worker’s housing, which was confirmed through visits to the workers linesite. In addition, the estate also has a documented contingency plan for water shortage in case of dry spell or severe water pollution. Bukit Puteri Estate also conducts water conservation activities especially for Bernam river and Telang river as a water source for Estate and Mill activity. Based on field observation, the condition of riparian buffer zones at both rivers showed were in good condition, with no sign of chemical application at the palms adjacent to the river, and signboards regarding river protection also available.

Sighted license from the Department of Environment of Pahang license no. 004160 dated 1 July 2014 to 30 June 2015 for Sime Darby Plantation Sdn. Bhd., Bukit Puteri Palm Oil Mill for production of crude palm oil and permission for discharge to water. The mill maintains a log book for records of daily effluent discharge to waterways, including information on start and stop of final discharge each day as required in their DOE license. Quality parameters for discharged effluent are limited as follows: - BOD (3 days, 30 degrees Celcius) cannot exceed 100mg/l - Suspended solids cannot exceed 400mg/l - Oil & Grease cannot exceed 50 mg/l - Ammoniacal Nitrogen cannot exceed 150 mg/l - Total Nitrogen cannot exceed 200 mg/l - pH must not exceed 9.0 or be less than 5.0 - temperature cannot exceed 45C The mill has total of 6 ponds (1 raw pond, 2 mixing ponds, 2 anaerobic ponds, and 1 aerobic pond) and a tertiary plant used for further treatment before final discharge. The mill carries out monthly sampling from each of the ponds as well as from the tertiary plant (labelled as F5) to be analyzed by Sime Darby Re- search Sdn. Bhd. - Lab Services Laboratories. Samples records of effluent analysis results for final discharge after the tertiary plant were sighted as follows and showed no exceedance of parameter specified in the DOE compliance schedule: - Test report no. EP176/2015 issued 06 April 2015 - Final discharge BOD for one sample was 24 mg/l with no exceedance of other parameters - Test report no. EP116/2015 issued 10 March 2015 - Final discharge BOD for one sample was 20 mg/l with no exceedance of other parameters - Test report no. EP75/2015 issued 11 February 2015 - Final discharge BOD for one sample was 37 mg/l with no exceedance of other parameters - Test report no. EP84/2015 issued 17 February 2015 - Final discharge BOD for one sample was 30 mg/l with no exceedance of other parameters

CR 4.5 Integrated Pest Management techniques are applied according to the Sime Darby Agricultural Reference Manual which was issued on 1 st July 2011, however, Section 15: Plant protection regarding Control of Rate in Oil Palm was last updated in year 2012. The updated document states that due to labour constraints, all estates are to adopt a calendar baiting approach with rat baiting campaigns carried out once every 6 months to suppress rat attacks, whether or not there is visible sign of rat damage. Additional census is only carried out when there is rat damage above the threshold level of 5%. However, it was noted that the estates also have an SOP for Pests and Diseases issued 11/1/2008 in Sime Darby Plantation’s Estate Quality Management System which also covers rat management and states that for areas without history of rate damage, baiting will only be carried out based on census result. There is lack of evidence that SOPs that are no longer applicable are required to be removed from other SOPs that are still in use to avoid confusion with updated SOPs to be applied. This was noted as an observation. Bukit Puteri estate does not carry out regular census for pests as attack rates are low and regular census

QMF: RSPO-007b-11 RSPO 4th Annual Surveillance Audit Report - Sime Darby Plantation Sdn.Bhd–

Bukit Puteri Palm Oil Mill- Pahang-

Page 22 of 53 is only carried out when required. Rat baiting campaigns are normally carried out twice a year around February and August , and in fields where percent update is above 20%, rat baits are replaced as many round as required to reduce the uptake to below 20% (usually 3 rounds). As seen in chemical usage records, for FY 2014/2015, it was seen that the rat baiting scheduled for August was postponed to Decem- ber 2014, with 4500kg of rat bait KG 22 (a.i. warfarin 0.05%) used in that month. The estate maintains a log sheet named ‘Rat Baiting Records’ showing fields applied, hectarage, number of palms and no. of rounds as well as percentage of acceptance of rat bait applied. The estate also has installed barn owl boxes as a rate of 1 barn owl box every 10 hectares and occupancy census are carried out, as seen from sample Barn Owl Census Forms for Division A of the estate. As seen from summary of barn owl box census conducted on September 2014 at Division A, there are a total of 58 barn owl boxes with an occupancy rate of 65.52% and from occupancy census conducted on August 2015 for Division C, there were 118 boxes with an occupancy rate of 42.37%. The estates also carry out widespread planting of beneficial plants, i.e. Turnera and Antogonen leptopus as a biological method to attract natural predators of leaf pests.

Bukit Puteri estate has record of training on rat baiting carried out on 2 April 2015 at field 90A for 7 workers plus the mandore. Attendance list and photos of the training were available.

CR4.6 Bukit Puteri estate maintains a documented summary of annual chemical usage in document named ‘Monitoring Pesticide Usage per Hectare and Per Ton FFB Production. Summary of chemical usage for Bukit Puteri estate in FY2014/2015 up to March 2015 show the following chemicals used: - Ally/Canyon (a.i. metsufuron methyl 20%), Kenlon (a.i. trichlorpyr butoxy 32%), Cyper (a.i. cypermethrin 5.5.%), KG22 (a.i warfarin 0.05%), Basta 15 (a.i. glufosinate ammonium 13.5%), Ancom Sodium Chlorate (a.i. sodium chlorate 98%), Primme 48 (a.i. glyphosate isoprophyamine 41%). The document shows calculation of active ingredient used per ha and per tonne FB, however it is in total calculation of active ingredients of all chemicals applied, instead of for individual chemicals. In addition, the estate had applied the rat bait Ebor, but this was not included in monitoring of pesticide usage per hectare. This was noted as an observation. There was no evidence of usage of paraquat. As confirmed through visit to the chemical store of Bukit Puteri Estate and stock bin cards, no paraquat or pesticides of Class IA, IB, II were in use, and only Class III above were being used by the estate.

Chemical containers are kept in a secure store at Bukit Puteri estate and collected by AGR Smart, as seen from collection letter dated 8 April 2015 for collection of 320 Ally bottles, 188 Basta 15 bottles, 231 Basta 4 litre bottles, and other chemical containers. AGR Smart Sdn. Bhd. is recognized as one of the contractors approved by the Department of Agriculture to collect chemical containers as long as they as triple rinsed and punched.

At Bukit Puteri Estate found at Block 2014A, chemical named Basta14 (Pesticide Class III), the mandore was keeping copy of old Material Safety Data Sheet (MSDS) last revised on 28/09/08 (over 5 years already) which is too old. According to the requirement of the Classification, Labeling and Safety Data Sheet of Hazardous Chemicals (CLASS) Regulations 2013, the supplier must review the MSDS of their supplied chemical every 5 years, and the company should obtain the latest version of the MSDS from the supplier. This was noted as an observation.

It was confirmed that warning signs are posted at areas where chemicals are applied. At Bukit Puteri Es- tate, pesticides and chemicals are properly stored in a secure store. In front of the chemical store, sign- ages and warning sign clearly posted. Pesticides and chemicals are kept in a bunded area with containment and spillage kits were made available. MSDS are available and fire extinguisher too. An emergency shower located at the nearby chemical mixing area. A first aid kit was kept at beside the workshop office.

Empty chemical containers (used containers) are stored after triple rinse as found in the scheduled waste store. Medical Surveillance was conducted and reported by the estate doctor on 30/07/14 for 53 workers. Based on the medical check results, no workers have any abnormal results and no one recommended for transfer to other work. There is only one lady, i.e. a mandore, working with the chemicals. She is not pregnant and when interviewed, she understood the requirements regarding no work with chemical for pregnant or breast-feeding women well.

CR 4.7 The company still maintains their OSH Policy for Sime Darby Plantation found displayed in Conference

QMF: RSPO-007b-11 RSPO 4th Annual Surveillance Audit Report - Sime Darby Plantation Sdn.Bhd–

Bukit Puteri Palm Oil Mill- Pahang-

Page 23 of 53

Room. Dated 2012 and signed by Sime Darby Plantation’s Executive Vice President. At the Mill, found a Sime Darby Plantation EHS Management System Manual Rev. 0 Dated 01/07/12. Document ID: SD/SDP/SQM (ESH)/001-1. This manual supersedes all previous ESH related manuals. This manual is also applicable to all operating units (subsidiaries and wholly owned) within the division, both local and overseas.

At the Mill, there was an amendment made in the Hazard Identification Risk Assessment Risk Control (HIRARC) on Gas Cutting Torch and Grinding Machine dated 12/12/15 as approved by the Mill Manag- er. However, other activities or jobs identified in the HIRARC were not reviewed accordingly as required by ESH Management System Manual (EHS Risk Management) SD/SDP/SQM(ESH)/001-2-1 rev.00 dated 01/07/12. This is not in accordance with paragraph 3 (procedure/requirement) of the manual mentions the following: - All existing operating units shall periodically assess their ESH Risks related to their routine and non-routine activities, facilities, facilities at work, products and services - Strategic ESH risk shall be identified and assessed on a yearly basis. - All operations shall consider significant hazards and risks This was raised a non-compliance ( NCR 2015-02 of 06 ).

While at the Bukit Puteri Estate, at Notice Board (in front office) found information of accident for harvester electrocuted while conducting harvesting near electrical cable in Sabah on 15/08/14. Upon sampling the Hazard Identification Risk Assessment and Risk Control (HIRARC) for harvesting activity which was revised and approved on 15/01/15, the latest review did not consider assessing risk for estate related to the incident that happened in Sabah to deceased harvester. This is against the requirement of the EHS Management System Manual. Para 3.0 (Procedure) EHS risk related to routine, non- routine activities mentioned but not included emergency as found in the EIE for operation condition. This was raised a non-compliance ( NCR 2015-03 of 06 ).

The follow observations were also noted: - Definition of routine and non-routine activities when developing the HIRARC are not indicated in the company’s ESH management manual. - It was found for some risks identified in the HIRARC that were assigned a score of 4 or higher did not have any recommended risk control, even though this is required as stated in the company’s ESH Management Manual. Example sighted in HIRARC dated 11/02/15 for workshop department, for the lathe machine, where job step no 1 and 3 with score 8 (medium) did not having any recommended risk control. While for gearbox job step 1 and 2 with score 4 (medium) and 9 (medium), neither of these medium level risks had any recommended risk control stated. - The ESH Management System Manual (EHS Risk Management) SD/SDP/SQM(ESH)/001-2-1 for HIRARC and aspects and impacts had a statement to refer to another HIRARC & Aspect & Impact Procedure which includes further guidance, however this document was not available when requested at the estate and mill

At the Mill, there were training records of staff related to OSH such as Noise Conservation training. Available also a Certificate of attendances for personnel who participated in training courses to be appointed as Authorised Entrant and Standby Person for Confined Space by National Institute of Occupa- tional Safety and Health (NIOSH) on 4-5 September 2014.

At Bukit Puteri Estate, found a Safety and Health Committee Organization Chart effective date 13/11/14. The committee is comprised of the chairman (the estate manager), secretary, 17 employers representatives and 17 employees representatives. The committee is separated into 4 sections (HIRARC/investigation, Training, ERT and Environment). Records show recent OSH Committee meetings were conducted on 06/03/15, 07/12/14, 09/09/14 and 11/06/14.

At Bukit Puteri Estate, a training for first aiders was conducted on 22/05/14 by JPAM Kuala Lipis at Di- vision C office. 25 workers attended the training and among them were 5 mandores.

Found 2 accidents were reported in the Bukit Puteri Estate as follows: - On 04/02/15 where FFB rolled from collection point and hit the victim, who then required 3 days MC - On 28/01/15 a harvesters hands were accidentally cut during harvesting Both accidents were investigated and reported but the investigations were not carried out efficiently and according to the best and suitable methodology (fish bone diagram, tripod beta, etc) as required in

QMF: RSPO-007b-11 RSPO 4th Annual Surveillance Audit Report - Sime Darby Plantation Sdn.Bhd–

Bukit Puteri Palm Oil Mill- Pahang-

Page 24 of 53

the company’s procedure for EHS Incident, Accident and Non-conformance Management (SD/SDP/SQM(EHS)/001-2-9).

At Bukit Puteri Estate, a Form 8A for social security (SOCSO) contribution for the month of March 2015 amounted to RM 2,940.70 for 90 workers was sighted. The company has also has evidence of payment for Foreign workers Compensation Scheme Certificate of insurance (Policy No FW072978) covering from 01/07/14-30/06/15 for 202 foreign workers.

CR4.8 At Bukit Puteri Estate, an Environmental Safety and Health Programme for Bukit Puteri Estate for year 2014/2015 was sighted and the programme contained awareness and competency Training. At the Mill, a training was found recorded and kept in the training files for mill workers. Motorcycling training was done on 29/04/14 at Muster Ground. Training on workplace inspection was done on 15/05/14 and 15 workers attended. Chemical safety and PPE Training was conducted on 25/04/14 by G Panter in which 13 workers attended. Schedule waste training was conducted on 17/04/14 in which 13 workers attended.

Compliance Status: Non-compliance NCR 2015-03 of 06 1) Hazard Identification Risk Assessment Risk Control (HIRARC) was not reviewed accordingly as it was found at Mill that there is no evidence of re-evaluation of HIRARC done annually but only those related to accidents which have occured. As required by ESH Management System Manual (EHS Risk Management) SD/SDP/SQM(ESH)/001-2-1 Revision 0 dated 01/07/12, which states that: • All existing operating units shall periodically assess their ESH Risks related to their routine and non- routine activities, facilities, facilities at work, product and services. • Strategic ESH risk shall be identified and assessed on yearly basis • All operations shall consider significant hazards and risks. 2) Found at Bukit Puteri Estate, there was information shared from HQ regarding an accident for harvester electrocuted while conducting harvesting close to electrical cable in Sabah on 15/08/14. Howev- er, this potential risk was not identified and included in the HIRARC for harvesting activity that was revised accordingly on 15/01/15.

NCR 2015-04 of 06 Found 2 accidents were reported in the Bukit Puteri Estate on 04/02/15 and 28/01/15 was investigated and reported but the investigation were not carried out efficiently and according to the best and suitable methodology (fish bone diagram, tripod Beta Etc) as required in the company’s procedure for EHS In- cident, Accident and Non-conformance Management (SD/SDP/SQM(EHS)/001-2-9).

Principle 5: Environmental responsibility and conservation of natural resources and biodiversity

Criteria assessed: CR5.1, 5.2, 5.3, 5.4, CR5.5, 5.6 Criteria not assessed: -

Findings: CR 5.1 In Bukit Puteri Mill, it was found that the aspects and impacts document was not reviewed accordingly. Only cover page of Environmental Impact Evaluation (EIE) was updated on 03 July 2014 with remarks that from the Assistant Manager that there were no changes. The remainder of the document was dated 10 July 2013 and last reviewed by the Assistant Engineer.

It was found that ESH Management System manual (EHS Risk Management) Rev. 0 dated 01/07/12 Para 3.0 (Procedure/Requirement) Environmental hazard (aspects) listed is difficult to understand and definition of aspects and impacts is incorrect. For example, air emissions, nuisance and land contamination were listed as aspects but these are actually environmental impacts. In Bukit Puteri Estate Envi- ronmental Aspect and Impact Identification Form (Serial No: EAI/2013/03-04-C) dated 25/01/14 for Herbicides spraying, the environmental aspects listed were water, air, and land contamination, but the-

QMF: RSPO-007b-11 RSPO 4th Annual Surveillance Audit Report - Sime Darby Plantation Sdn.Bhd–

Bukit Puteri Palm Oil Mill- Pahang-

Page 25 of 53 se are actually environmental impacts.

Environmental Aspect and Impact Identification for Workshop Maintenance (Serial no. EAI/2012/014-1 Process/ Area/Station) at Bukit Puteri Estate was sampled and found evidence that evaluation results were not appropriate, e.g.: - Environmental Aspect: Waste disposal of contaminated rags were identified as having an impact level of 5 and 6, but did not include impact no. 4 regarding water pollution too. - Applicable legal requirement stated for several aspects is EQ (Scheduled Waste) Regulations 1989, which is not the latest regulations, i.e. EQ (Scheduled Waste) Regulations 2005 - Oil spills of lubricant oil, grease and hydraulic oil were identified to have impacts of 4, 5, 6, but no legal reference was referred to (suppose EQA 1974).

Potential of non-compliance to legal requirements is wrongly evaluated for some aspect, e.g. stated in EIE Form for the mill workshop regarding Waste disposal of contaminated cotton rags (Serial No EIE/2012/014-1) and oil spillages (Lubricant, grease and hydraulic oil) and at the estate regarding chemical spillage, there is a question, “Is there high potential of non-compliance to environmental regulations?” Answer stated is no, although in actual this would be non-compliance to EQ (Scheduled Waste Regulations 2005) and EQA 1974 respectively

Identification of normal, abnormal and emergency condition is not correctly identified. For example, EIE stated that for oil spillages (lubricant, grease and hydraulic oil), operating condition is indicated Normal and Abnormal, although this is actually an Emergency.

All of the above findings were noted as observations.

CR 5.2 During this 4th surveillance audit, it was found that there is no revision and/or change to the HCV document. There are two classes of HCV areas identified i.e HCV 4 and HCV 6. Object of HCV 4 are buffer zone in Sg Telang and water catchment and object of HCV 6 is worship area (mosque). The company has biodiversity or HCV action plan for financial year 2013/2014 consist of: 1) Maintaining the conservation area i.e river buffer zone, water catchment and mosque; 2) Managing bordering to forest reserves; 3) Education and awareness; 4) Interface with animal. Realization of action plan i.e the result visit the site and inspection, mosque cleaning, tree planting monitoring, minute of meeting for awareness briefing during morning muster about forest reserves area, HCV and ERT flora and wildlife. Evidence of a commitment to discourage any illegal fishing is available, company conduct weekly pa- trol program to prevent inappropriate hunting or collecting activities and there are several signboard regarding restriction for illegal hunting available in estate surrounding area as sight in estate entry gate.

Based on species identification, there are indicated 1 RTE species i.e. ( Ictinateus malayensis ) or Black Eagle. For the RTE species, company has conducted the monitoring through the HCV monitoring species, evidenced by the wildlife monitoring. On the monitoring record, has been recorded the present of Tiger track in field number 97D on February 28, 2015, then on April 13, 2015 also has identified the Tapir track in field number 98F.

Tiger and Tapir track as new species was present in the company HCV area. Because based on species identification when the HCV identification, there is no identified. The company has also build a fencing around the HCV areas bordering with the estate.

However, the company’s existing Biodiversity Baseline Study dated April 2009 is inadequate as it does not include information on the 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 company’s activities. This was raised as a non-compliance ( NCR 2015-05 of 06 )

CR 5.3 The mill has a waste management plan for year 2015/2016 which also overs identification of types of generated wastes, including scheduled wastes (used batteries, lubricant oil, used rags, oil filters, spent chemical from the lab), domestic wastes and recycled wastes, i.e. scrap metal. All wastes are managed in accordance with the plan.

QMF: RSPO-007b-11 RSPO 4th Annual Surveillance Audit Report - Sime Darby Plantation Sdn.Bhd–

Bukit Puteri Palm Oil Mill- Pahang-

Page 26 of 53

The mill maintains online records of inventories of all scheduled wastes collected and e-consignment notes during collection of scheduled waste. As seen in online inventory records from October 2014 to February 2015, the types of scheduled wastes collected included rags and carboy (paint) (SW410), used batteries (SW103), hexane (SW322), spent oil (SW305), used filters (SW409) and records updated included balance at start of month, quantity generated, quantity handling, handing method and balance at end of the month. Last waste collection by licensed contractor was on 11 November 2014 by Kualiti Alam for the 0.02 MT of used batteries, 0.05 MT of used filters, 0.2 MT of hexane, 1.6 MT of spent oil, and 0.62MT of used gloves, rags and used carboy. Kualiti Alam, which has a DOE license for schedule waste collection and incineration dated 28 April 2014. The previous collection by Alivirgo Sdn. Bhd. was on 12 March 2014 for 0.096 MT of hexane, 0.006 MT of used batteries, 0.17 MT of used gloves and rags, and 0.027 MT of used carboy. Alivirgo Sdn. Bhd. has DOE license for waste collection dated 15 July 2008 and last updated on 1 May 2014 valid until 30 April 2015. This contractor also has a DOE license for waste collection dated 15 July 2008 and last updated on 1 May 2014 valid until 30 April 2015. However, it was found that mill scheduled wastes containers are not labeled with date of first generation, name, address and telephone number of the waste generator. It was informed by the mill that labels are placed prior to collection by Kualiti Alam as per their requirement. This was noted as an observation.

Bukit Puteri Estate maintains scheduled wastes inventories online as seen from the DOE online portal monthly records of schedule wastes collected from August 2014 to December 2014. The common schedule wastes collected include spent oil (SW305), used filters (SW410) and clinical wastes. The online records show balance of each type of scheduled wastes carried forward to the following month and balance is updated each time there is an update input of scheduled wastes. Schedule wastes are collected by Kualiti Alam Sdn. Bhd. as seen from latest consignment notes on 21 April 2015 for the following wastes: - Consignment note no. 0002381 for 3 drums of lubricant oil (SW 305) - Consignment note no. 0063994 for 3 pallets of empty containers (SW 409) - Consignment note no. 0063995 for 3 drums of used filters (SW410)

Previous collection of scheduled waste was on 19 November 2014 for the following wastes: - Consignment note no. 000616 for 173 litres of used hydraulic oil (SW306) - Consignment note no. 000615 for 560 litres of used oil (SW 305)

It was found that amount of scheduled wastes stored and collected as stated on the DOE online platform is inconsistent with the amount collected as stated in the consignment notes, on the website, it is stated that 0.927 MT of SW305 was collected in November 2014, however, in the consignment note it was stated 560 litres of used oil (SW 305) was collected in November 2014. In addition, there is no record of storage of SW 306 in the DOE online platform, but sighted consignment note no. 000616 for collection of 173 litres of used hydraulic oil (SW306). The estate Chief Clerk justified clearly the reason for the difference being due to his error in failing to correctly inputting data in the DOE website for collection of 1110 litres of used oil in September 2014 as they had just starting using the online system in July 2014 and was not familiar with the system at the time. In order to correct the discrepancy between the actual records and the online DOE records, it was necessary to input difference figures from what was actually collected by DOE. It was also explained that SW306 amount collected by the contractor was actually recorded as SW305 by the estate, and separated by the collector during collection. As the estate was able to justify the discrepancies and all input and collection was accounted for, this was raised as an observation.

Clinical wastes (SW404) are collected by licensed collector Medivest Sdn. Bhd. with last collection on 24 April 2015 as seen in consignment note with same date.

However, both the mill and estate does not store and manage contaminated gloves as well as fluorescent tubes as scheduled wastes. This was raised as a non-compliance under CR 2.1.

CR5.4 Bukit Puteri Mill has record of fossil fuel energy used and renewable energy usage for July 2014 – March 2015 period, i.e.: 1. Fossil fuel energy; the highest fossil fuel energy used occurred on January 2015 i.e.: 0.66 diesel/FFB, with total fossil fuel used is about 2,254.75 litres with the FFB processed 3,399.75 tonnes, and the lowest fossil fuel energy used occurred on September 2014 i.e: 0.90 diesel/FFB, with total

QMF: RSPO-007b-11 RSPO 4th Annual Surveillance Audit Report - Sime Darby Plantation Sdn.Bhd–

Bukit Puteri Palm Oil Mill- Pahang-

Page 27 of 53

fossil fuel used is about 400 litres with the FFB processed of 4,222.5 tonnes. 2. Renewable energy; example renewable energy used on August 2014 is about 4.67 MT/CPO, with total shell used 1,266.75 MT and fiber used 2,955.75 MT. 3. Water used per ton FFB processed for July 2014 until March 2015 period is about 0.98 m 3/ton FFB.

Bukit Puteri Estate also recorded they energy used per ton FFB production, example: 1. July 2014, average diesel used is about 8,492 litres, FFB production 3,040.6 MT and diesel used per tonne FFB production 2.79 litres 2. August 2014, average diesel used is about 9,345 litres, FFB production 4,168.61 MT and diesel used per tonne FFB production 2.24 litres 3. February 2015, average diesel used is about 10,536 litres, FFB production 2,611.4 MT and diesel used per tonne FFB production 4.03 litres 4. March 2015, average diesel used is about 14,080 litres, FFB production 3,521.86 MT and diesel used per tonne FFB production 4.00 litres

CR 5.5

The company has a zero burning policy which prohibits burning during land clearing activity. During this surveillance audit, there is no burning activity carried out based on field observation in recently replanted field numbers 91E dan 91D. Palms are felled, chipped and stacked, in accordance with the company’s SOP for land preparation. A sample letter of offer dated 31 st July 2014 between Bukit Puteri Estate and contractor named Jasa Awah Enterprise for land preparation for replanting of oil palm to oil palm at PR 2015A (69.48ha), PR 2015B (81.94ha) and PR 2015C (100.62ha) was sighted. The agreement specifies work to be carried out and includes requirements that standing palms are to be felled me- chanically with excavators, chipped to specified sizes and stacked.

CR5.6 The mill carries out stack sampling twice a year in accordance with the requirements of their DOE license, as seen in reports on ‘Determination of Concentration & Mass Flow of Particular Matter in Flue Gas” for chimney 1 and chimney 2 at Bukit Puteri Palm Oil Mill carried out by UiTM A&A Laboratory. Based on results for chimney 1 dated 16 April 2015, total dust concentration at Chimney 1 was standing at 0.096 g/Nm 3, and in report dated 23 July 2014 for the same chimney, total dust concentration at Chimney 1 was standing at 0.27 g/Nm 3. While for chimney 2, in report dated 12 July 2013, total dust concentration at Chimney 1 was standing at 0.082 g/Nm 3 only. All these results are well below the al- lowable limit of 0.4 g/Nm 3. It was informed by the mill that stack sampling for Chimney 2 was not done at all in year 2014, which is not in accordance with the mill’s DOE’s license stating requirement to carry out stack sampling twice a year. However, it was seen that thee mill has a signed contract dated 18 March 2015 to UiTM A&A Laboratory requesting to conduct stack monitoring and air emissions monitoring for Boiler 1 and Boiler 2. As informed by the mill, the contactor has carried out the stack monitoring for chimney 1 but report is not done yet, while for chimney 2 which is utilized less often, the mill only plans to start usage of the chimney in May 2015, hence they will request the contractor to perform the stack monitoring during that time. This was noted as an observation under CR 2.1.

The mill has a documented Environmental Improvement Plan for FY 2014/15 which include plans to carry out desludging process, to obtain DOE approval for genset usage of diesel and to conduct stack sampling once every 6 months, with timeframe of compliance by July 2015. It was found that the mill The mill did not carry out stack sampling for Chimney 2 in year 2014, which is not in accordance with accordance with the mill’s DOE’s license stating requirement to carry out stack sampling twice a year, but there was evidence that action was already being taken to carry out the stack sampling as explained under CR2.1. The mill also has a documented Pollution Prevention Plan for FY 2014/15 which covers potential sources of pollution and emissions, including from the workshop, linesite/housing, laboratory, genset/diesel store, transport effluent and emissions. The plan also covers means of mitigation and means of monitoring and action plan. In addition the mill has a waste management plan for year 2015/2016 which also overs identification of types of generated wastes, including scheduled wastes (used batteries, lubricant oil, used rags, oil filters, spent chemical from the lab), domestic wastes and recycled wastes, i.e. scrap metal. All wastes are managed in accordance with the plan.

Sime Darby HQ has a documented Renewable Energy Implementation Plan for all mills in Malaysia and Indonesia with planned mill to reduce the main source of greenhouse gases identified from the

QMF: RSPO-007b-11 RSPO 4th Annual Surveillance Audit Report - Sime Darby Plantation Sdn.Bhd–

Bukit Puteri Palm Oil Mill- Pahang-

Page 28 of 53 mill, i.e. methane production from POME treatment ponds through methane capture and flaring. The plan states 11 phases with each phase covering one financial year and planned number of mills to un- dergo the programme during each phase ranges from 4 to 7 mills each financial year. The plan also lists estimated CAPEX, potential carbon reduction per year, reduction from baseline (%) and cumula- tive reductions (%) for each phase. Bukit Puteri Palm Oil Mill is included in Phase 6 which is planned to be implemented from FY 2018/19 with estimated potential carbon reduction per year of 94,445 tCO 2 for 6 mills listed in that phase.

Bukit Puteri estate also has a documented Pollution Preventive Management Plan for FY 2014/15 which identifies pollution sources and specific concerns related to the workshop, linesite/housing, chemical store/mixing area, genset/diesel store, and transport. For the workshop, chemical store and genset/diesel store, the primary concern is potential spillage of oil, lubricant, chemicals, greases and fuels, and primary action taken is containment via bunds and proper flooring, spillage kits and disposal as scheduled wastes. Domestic wastes are managed through regular collection and disposal into the estate landfull and air pollution from vehicles is controlled through regular maintenance. However, the document did not include identification of greenhouse gas emission sources from the estate. This was noted as an observation.

However, there is no evidence of record of GHG monitoring reporting for the siginificant pollutants and emissions from the estate and mill using appropriate tools, i.e. Palm GHG or other GHG monitoring tool approved by the RSPO. This was raised as a non-compliance ( NCR 2015 – 06 of 06 ).

Compliance Status: Non-compliance NCR 2015 – 05 of 06 The company’s existing Biodiversity Baseline Study dated April 2009 is inadequate as it does not include information on the 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 company’s activities

NCR 2015 – 06 of 06 There is no evidence of record of GHG monitoring reporting for the significant pollutants and emissions from the estate and mill using appropriate tools, i.e. Palm GHG or other GHG monitoring tool approved by the RSPO.

Principle 6: Responsible consideration of employees and of individuals and communities affected by growers and mills

Criteria assessed: CR6.1, CR6.2, 6.3C, 6.4, R6.5, CR6.6, CR6.7, CR6.8, CR6.9, CR6.10, CR6.11 Criteria not assessed: -

Findings:

CR6.1 There are no changes to the company’s document social impact assessment with title “Baseline Social Impact Assessment for mill and estate of Bukit Puteri” conducted on 2009. As reported on first audit, management had already documented process of the study (meetings, photographs, list of attendees, list of discussion question, etc.). The report covers introduction, objective, and methodology, scoping approach, impact on communities, stakeholder relation, and internal stakeholder relation. The assessment has been done with the participation of affected parties such as workers and communities, which adjacent to company’s location. Management has the evidence of the involvement of the parties in the implementation of the SIA study in the form a list of attendees.

Bukit Puteri estate has conducted an annual stakeholder consultation in April 06 th 2015. There are meeting records regarding the stakeholder consultation completed with attendance list (26 people). Is- sues that arose during the meeting include the need of villagers to re-activate KAFA (religious studies) Learning Class. During the meeting, there were some points raised as follows: a. Al Ikhlas Mosque as the venue of KAFA (religious studies) activities, b. Learning time is from 3.00 to 5.30pm c. No contributions needed from parents

QMF: RSPO-007b-11 RSPO 4th Annual Surveillance Audit Report - Sime Darby Plantation Sdn.Bhd–

Bukit Puteri Palm Oil Mill- Pahang-

Page 29 of 53

A number of programs designed to minimize the negative impact is based on the issues presented by study participant. Management has developed a management plan to conduct both mitigation and monitoring. There is a records named as “Management Plan on Social Impacts Assessment FY 2014/2015. This document has detail information regarding Area of concern, action plan, PIC, expected completion date and remarks. The key findings are: a. Gender committee; b. OSH; c. Sport event; d. Annual din- ner; e. Spiritual activity; f. Stakeholder meeting. This Management plan has been reviewed annually and management can shows evidences of stakeholder participations in stakeholder meeting record such as invitation letter, minute of meeting and attendant list.

Bukit Puteri Estate SIA Management Plan was developed on July 2014 and has been reviewed in Jan- uary 1 st 2015. The Management Plan consist of:

Area of Concerns Action Plan Expected Completion Football Field maintenance To Schedule Grass Cutting Twice June 2015 a Month Mosque To maintain the cleanliness and June 2015 Beautification of the old mosque to activity by Mosque Committee spruce up the appearance Workers Housing Complex: - New Water tank at Div. C June 2015 Water Supply - To Install individual metre to all workers house Stakeholder Meeting Conduct the meeting 3 times per June 2015 To Call all Stakeholders for Meet- year. ing

The company has proof that management plan activities on social impact assessment has been implemented base on records such as this following 2 examples: 1. Gender committee meeting: Minute of Meeting, December 15 th 2014. 2. Stakeholder meeting (yearly basis): Minute of Meeting, June 6 th 2014.

CR6.2 The estate still maintains a procedure for external communication. All communications are accepted and recorded by a clerk and distributed to the communications manager/officer. The officer review the records then decide how to response the communication. A dedicated officer responsible for handling social issues has been assigned. The appointment based on a later dated January 15 th 2015. Based on this letter, his job description are: - Management of Grievances and Complaints regarding social issues and formulate action plan as responses. - Keeping and maintaining grievances, complaints and all of accomplishment records. - Technical advisories and counselling to workers who need assistance and support regarding social issues. - Assisting estates in management inputs in Social Program/Training Development. There is an updated stakeholder list of Bukit Puteri Estate FY 2014/2015 already including relevant stakeholders such as local community heads, school, supplier, contractors, and other interested parties such as government institutions, Kuala Lipis hospital, Manpower Department of Raub, etc. The company has assigned personnel who are responsible for complaint handling, incoming complaints from internal stakeholders have been responded to. For example, complaints from workers on April 6 th , 2015 regarding broken water pipes and was responded and repaired on April 19, 2015. Other example was complaint regarding broken ceiling on April 7 th , 2015 and was responded and repaired in April 11 th 2015.

Estates and Mill showed evidences that they maintain all of records regarding minute of meeting with stakeholders. They also accepted, response and recorded their communication with stakeholder, such as: a. A letter dated January 29 th 2015 from Kuala Lipis Hospital, regarding the need to increase medical charge for foreign worker who get medical treatment in National Hospital. The letter noted at February 6 th 2015. b. A Letter from Malaysia Palm Oil Board (MPOB), February 5 th 2015 regarding Roadshow of Ma- laysia Sustainable Palm Oil.

QMF: RSPO-007b-11 RSPO 4th Annual Surveillance Audit Report - Sime Darby Plantation Sdn.Bhd–

Bukit Puteri Palm Oil Mill- Pahang-

Page 30 of 53

c. A letter from SK Kampung Keledek, March 17 th 2015, asking for contribution to local social event. The letter has responded in April 16 th 2015 by Mill manager.

CR6.3 There was no significant change on the company’s performance regarding grievances mechanism. For mill and estate, there was record of workers complaint regarding to amenities. There are 4 complaints in 2014 and 5 complaints in 2015 recorded in “Internal and External Complaint logbook of KKS Bukit Puteri”.

There are open and transparent methods for communication and consultation between company and local communities and other affected or interested parties. SOP for complaints from internal parties(workers) and SOP for handling external complaint which is Standard Operation Manual, subsec- tion 5.5 appendix 5.5.3.2, procedure for external communication, version 1, year 2008, issue date 01/11/2008. Communication from employees to management via suggestion box, meetings and during briefings by management. As part of communication method, management provided complaint box (placed in front of mill and estate office) for parties who need to give feedback or request information. There evidences shows that communication has been conducted with stakeholders such as a meeting conducted in April 06 th 2015 attended by local communities. Based on the Minute meeting, the subjects was about religious educations for children known as KAFA regarding venue and timetables.

CR6.4 Bukit Puteri estate and mill still maintains a procedure document issued in November 1 st 2008 regarding “Flowchart and Procedures on handling land Disputes”. The procedure document consist of: a. There are two kinds of potentials matters, On-Land and Ex Workers (staying in estate quarter). b. With regards to issues arising with ex-workers, it is to be dealt with the Employee Relations c. For On Land issues, upon any arising conflict, the Land Management Department (LMD) is the responsible body to gather information to support the respective cases. d. Upon gathering sufficient information and proof for the arising issue, it is to be tabled and presented to the management of Sime Darby Plantation to seek for further direction. e. The subsequent steps will be followed by negotiation or legal proceedings, whichever applicable/suitable or both can be carried out simultaneously. f. Proposed resolutions in the negotiations process among others. g. Legal proceeding is the subsequent action upon any failure of the negotiation process. During this surveillance audit, it was found that there are no new land dispute issues and no ongoing negotiations concerning compensations process.

CR6.5 Minimum Wage for Peninsular Malaysia for 6 days work in a week as regulated by the government is RM 900. There are records and document shows that the company has communicate and implemented this regulation to all estates and Mill’s Human Resources divisions, such as: a. Presentation material “Briefing to Address Minimum Wage order 2012 (Effective date January 1 st 2013)”, Human Resources Department, Plantation Division. This presentation materials consist of: - Minimum wage for Peninsular is RM 900 and for Sabah and Sarawak is RM800. - Calculation for daily Wages rates for Peninsular Malaysia (RM34.62) - Minimum Wages for Employees Who are paid by Piece rated, Tonnage, Trip or Commissions b. Pieces rated (Wages calculation) for Bukit Puteri Estate, April 2015. c. Workers Monthly Payslips for March 2015 (Samples from estates and mills). Documents and record sampled shows that company (estates and mills) has complied with minimum wage payment as regulated by the government.

The company has ensured pay and conditions for employees and for employees of contractors always meet minimum legal requirements and are provided with decent living wages. Since Malaysia has a new requirement regarding minimum wages for workers, SOU management decided to follow this regulation for all workers incorporated with management documented payroll system. The worker salary component consists of: basic pay, bonus price, normal overtime hours, phone allowance, holiday pay, sick pay, deductions for Socso, cash advance, and others. Basic pay will vary by worker, depending on the work and the department.

Evidence was sighted such as pay slips for March 2015 audit in Mill. There is no indications founded that wage payments meet non-compliances. There are some items shows in the pay slips explaining

QMF: RSPO-007b-11 RSPO 4th Annual Surveillance Audit Report - Sime Darby Plantation Sdn.Bhd–

Bukit Puteri Palm Oil Mill- Pahang-

Page 31 of 53 worker salary: a. “Basic pay”, is basic payment for worker. b. “Normal Days Over”, is over time payment for normal day overtime working. c. “Shift Allow”, is allowance payment for working shift. d. “Phone allowance”, is allowance for phone top-up credit. e. “Insurance Subd”, is a payment for subsidies worker regarding insurance f. “Sick pay”, is a payment during worker’s sick leave. g. “FWDOR wage”, is payment during rest day (twice than normal day). h. “FWDOR overtime”, is payment for overtime in rest days.

Employment agreement was made in Malaysia and English, information on the agreement includes: the contract of employment, placement and worker responsibilities, work equipment, salaries and salary deductions, worker leave, insurance, working hours, immigration matters. The content on the working agreement is clear and can be understood by the worker including foreign workers from Indonesia, as discussed with several workers during onsite audit. All agreement has implemented well base on evidences such as: a. Pay-slips: salary payments and deduction (such as EPF, SOCSO, NUPW) b. Daily worker attendant lists for March 2015. c. Check roll daily/Piece rate Table Detail Listing

There are some general facilities provide by the company for local and foreign workers such as housing (with some tools), sport field and water supplies. For local worker, company provide housing with family. For foreign worker, a unit house with three rooms and kitchen is providing for 6 workers. Inter- view result with the Jentar Village Plan (foreign worker) found that they think facilities provided by the estates/mills are good enough for them. Some of housing broken parts will repaired by the company if they report the conditions to the estate/mill office.

In increasing worker access to affordable food, estate has some agreements with local partner to open shop near the emplacements areas. Local partner could be the tenant of company’s property as long as they provide daily consumptions needs with competitive affordable price. Interview result with workers found it is easy for worker to access stores and shops near their residents. The price of daily consumptions need such as rice is affordable to them.

CR6.6 The company respects to the right of all personnel to form and join trade unions of their choice and to bargain collectively, as seen on company’s policy for freedom to a form and join trade union. There is a company policy that said the company respects and will not impede the right of workers to join labor unions as set forth in the Deed of trade unions that is section 8 (1955) of work deed and in section 5 (1) of the deed of industrial relations (1967). The company also recognizes union members who represent their employment relationship problem resolution based on collective agreements. There is a minutes meeting between management and NUPW (National Union Plantation Workers) on January 14, 2015 which was discuss about implementation of minimum wages. They also shows some AMESU (All Ma- laysian Estate Staff Union) minute of meeting such as: a. Minute of Meeting April 5 th 2015 with the main subjects was selecting next meeting issues and at- tendants. b. Minute of Meeting January 9 th 2015 with the main subjects was a plan for collecting donations from members.

CR6.7 Children are not employed or exploited. There is email dated June 11, 2012 from Sime Darby Man- agement top management to all region Sime Darby (Sabah and Sarawak) estates and mills that stated to adhere the human right compliance, management has made an order that employees (including Contractors’ workers) under the age of 18 are not to be engaged in the several works/task listed: confined spaces, extreme height, chemical handling and application, driver, competent workmen, work in high noise/temperature/vibration level areas, other work classified as dangerous and threatening. Management also notified policy to contractor. Some of Mill spot has signboard regarding underage worker policy. Check on documents found that the youngest worker found in Mill Worker List was a daily rated worker born in July 1th 1994. Field check on Mill working areas found that there is no worker under 18 years old.

QMF: RSPO-007b-11 RSPO 4th Annual Surveillance Audit Report - Sime Darby Plantation Sdn.Bhd–

Bukit Puteri Palm Oil Mill- Pahang-

Page 32 of 53

CR6.8 The company’s policy regarding equal opportunities policy still not changes since year 2009: "All employees should be treated fairly in term of recruitment, progression, terms and conditions of work and representation, irrespective of race, caste, national origin, gender, color, disability, sexual orientation, union membership, political opinion, religion and/or age". This document of social policy placed on information board at estate. There’s a Mill Labor resume name as “Bukit Puteri POM, Labor for the month of April 2015”. This records shows information regarding proportion between Male (53 persons) and female (7 workers) worker in Mill. All Mill’s worker religion background is Muslim, and all Mill’s worker ethnicity background is Malay.

There is no evidence that employees and groups including migrant workers have been discriminated. The company always communicate these policies to all workers, with sample evidence as follows: - There is no discrimination in salary amount between local worker-migrant worker and also between man and woman worker. The differences in the amount of salary received for each employee de- pends on years of service and the number of workdays. - Salary pay slip check for foreign worker, local worker and woman worker shows no evidence of discrimination in terms of salary paid to local or foreign workers. - All of worker have the same paid leave overtime rate.

CR6.9 As the audit result 2014, Sime Darby has Social Policy details the organization commitment against prevention of sexual harassment and other forms of violence as follows “To develop and apply policy to prevent sexual harassment and other forms of violence against women and to protect their reproductive rights”. The organization has developed manual on implementation of the Gender Policy which includes the following: • Statement Policy – Statement on the prevention of sexual harassment and all other forms of gender-based violence • Sexual Harassment Grievance Procedure • Guidance for Policy and Grievance Procedure

The last gender committee meeting was conducted on 15 th April, 2015, attended by the 8 persons both from employer and employee representative. The matter discussed were refreshment regarding gender committee activities and basic knowledge regarding sexual harassments and complaints and grievances mechanism. Interview with mill worker’s wife in the housing facilities found that know about the event conducted by gender committee, but both of them has not been attended the meeting because of toddling reason. They know where to complaint and reports if any violations happen to them. There were no reported sexual harassment and violence cases noted since last year audit (March 2014 to April 2015). There was no any case regarding sexual harassment in the recent year.

CR6.10 The company engage with local business in maintain their operations sustainability, such as local business partner for CPO for replanting, machinery, spraying and transportation. Main evidence showed during audit was a Working Contract Agreement no. 43000274805, dated March 2 nd 2015, between Sime Darby (Puteri Estate) with Gran Wealth Enterprise, a spraying contractor company. This document consist critical terms and conditions, such as: a. Workers engage for the work The contractor must employ Malaysian citizen to work. In the event that foreign workers are to be engaged, it is the contractor’s responsibility to ensure that all foreign workers are with valid pass- ports, work permits and other related documents as required by the law. All fees and expenses related to recruitment and legalization of foreign workers are to be paid by the contractor. b. Environmental, safety and Health regulations (ESH). The contractor and his workers must strictly comply with the environmental, safety and health regulations as outlined under the respective law. Company also showed evidence regarding the implementation of the agreements such astask record February 28 th 2015 and monthly payment record.

Another main local business partners engaged by the company are FFB suppliers. There are some evidences showed that Mills has fairly deal with their local business FFB Supplier partners, such as:

QMF: RSPO-007b-11 RSPO 4th Annual Surveillance Audit Report - Sime Darby Plantation Sdn.Bhd–

Bukit Puteri Palm Oil Mill- Pahang-

Page 33 of 53 a. FFB pricing is done in MPOB meeting each month. This statement is a monthly guidance for Mill in FFB Price determination. There is a record of Malaysia Palm Oil Board (MPOB) monthly statement, March 2015 for Bukit Puteri Mill. b. Email record, April 6 th 2015, from Sime Darby Head Office to Bukit Puteri Mill regarding the rate changes of buying price for FFB from supplier. c. Corp quality report Form (filled), shows the FFB quality that has unload in Mill Ramp. d. Current FFB Price publication attached to the place near weighbridge in mill area. e. Document of FFB Prices Calculation Pricing of the FFb supplied during a month shall be calculated using the feollowing price fromulation: {(A-B)xC} + {(D-E) X F} - G = FFB PRICE. A= MPOB monthly average traded price of CPO for peninsular Malaysia. B= MPOB cesses of RM13.00 actual transport cost RM31.00pmt of CPO as stated in the CPO tarnsport agreement, and any other charges or additional cesses/levies/taxes imposed by the relevant authorities. C= oil extraction rate: mill actual - 0.25% (mill margin)-penalty D= MPOB monthly average traded price of PK for peninsular Malaysia E= MPOB or government cesses/taxes/levy if any F= Kernel extraction rate (KER): 5.25% max or mill actual performance, whichever is lower G= Mill's processing cost of RM 39.00 [er metric ton of FFB f. Procedure doc. No. SUB-Section 7.4, Appendix 7.4.1.2a, issued in November 1 st 2008, regarding Supplier Evaluation Rom.

CR6.11 The company’s contribution to local development is based on annual stakeholder meeting result and based on direct proposal from stakeholders. This contribution is part of the implementation of social impact management Plan. There are some examples of evidences regarding company’s contribution to local development, such as: a. Quit Rent payment record (RM 253.604) b. Records of Contribution, with total RM 16.599,65 for social activities such as: - Gender Committee activities (6 events) - Sports and Recreational (6 events) - Holy/Feast days (3 events) c. CSR Report, April 6 th 2015, 6 events, total RM 1.600, use as: - Donations for annual meeting - Learning Program - Celebration of 100 years - Excellence award day - Team Building Program - Donation for 5S Program

CR6.12 There is an employee master list per April 2015 consisting information regarding foreign worker of Put- eri estate, detail as follow: No Designation Indonesia India Bangla Nepal Srilangka 1 Driver 5 2 Harvester 132 3 Bunch Counter 3 2 4 Pruner 15 8 5 Sprayer 15 6 General Worker 82 19 91 5 7 Workshop Attend 2 8 Loader 3 Total 177 82 22 101 5

Workers passport is held by company until the worker accomplished their contracts. This practice is not as efforts to force the workers but rather than to prevent the worker take illegal actions such as runaway from Company’s operations area. Company as recruiter held responsibilities to the government of Malaysia and related country regarding the existence of foreign worker in Malaysia. As a tem-

QMF: RSPO-007b-11 RSPO 4th Annual Surveillance Audit Report - Sime Darby Plantation Sdn.Bhd–

Bukit Puteri Palm Oil Mill- Pahang-

Page 34 of 53 porary passport substitution, company provide ID for each worker and provide cover letter if the worker need to go outside Sime Darby’s operations area. The company also demonstrated their responsibility to foreign worker regarding the extension of foreign worker passport and working permit.

CR6.13 The company has a documented Plantation Charter dated April 2013 which covers 6 principles, including Human Rights and Labour Practices. In this charter, it is stated that Sime Darby Plantation is com- mitted to respect human rights throughout their business operations and that the company supports the ten principles of the United Nations Global Compact and makes annual Communications On Progress demonstrating Sime Darby Plantation’s continuing efforts and improvements in implementing those principles in its business operations. To support this commitment, there is a letter from the company’s Pres- ident and Group Chief Executive to the United Nations (UN) Secretary General dated 25 Nove,ber 2010 stating their commitment to support the UN Global Compact principles. It is also stated that Sime Darby Group is also a member of the Global Business Initiative on Human Rights created in 2009 with the aim of advancing respect for human rights in the business sphere. Under the ‘Labour Practices’ principle, it is stated that Sime Darby Group observes International Labour Organisation standards and employment practices. The company’s report on UN Global Compatc Communication of Progress for year 2011 – 2012 was sighted, however, a progress for the past few years was not available.

In addition, Sime Darby’s implementation of human rights practices is futher defined in the Company’s Social Policy. This policy consists of points regarding respect to human rights such as: a. All employees should be treated fairly in terms of recruitment, progression, terms and condition of work and representation regardless of race, caste, nationality, gender, physical, sexual orientation, union membership, political view, religion and/or age. b. To identify, through consultation, the potential social benefits and determine how they might be enhanced for the mutual benefits of the company and the local community. c. To ensure that any negotiations concerning compensation for loss of legal or customary rights are dealt with through a documented systems that enables indigenous peoples, local communities and other stakeholders to express their views through their own representative institutions. d. To develop and apply a policy prevents sexual harassment and other forms of violence against women and to protect their reproductive rights. e. The company shell respects the rights of all personnel to form and join trade unions of their choice and to bargain collectively. f. The company does not condone forced labor or child labor.

This social policy has been broken down into specific policies such as Gender Policy and child protection policy. This policy has been communicated to all level worker by direct communication such as meetings and morning Raw call and indirect communications such as attached the printed documents to some board and placed in strategic areas.

Compliance status: Full Compliance

Principle 7: Responsible development of new plantings

Criteria assessed: CR7.1, CR7.2, CR7.3, CR7.4, CR7.5, CR7.6, CR7.7 Criteria not assessed: -

Findings: There is no evidence of development of new estate areas within the company’s area and all existing oil palm estate areas consist of mature palms. The company has no plan to extend their estate area. Therefore Principle 7 is not applicable.

Compliance status: Not Applicable

Principle 8: Commitment to continuous improvement in key areas of activity

QMF: RSPO-007b-11 RSPO 4th Annual Surveillance Audit Report - Sime Darby Plantation Sdn.Bhd–

Bukit Puteri Palm Oil Mill- Pahang-

Page 35 of 53

Criteria assessed: CR8.1 Criteria not assessed: -

Findings: There is evidence of implementation of action plans for continual improvement, e.g.: - Reduction in use of pesticides: There was no evidence of usage of paraquat. As confirmed through visit to the chemical store of Bukit Puteri Estate and stock bin cards, no paraquat or pesticides of Class IA, IB, II were in use, and only Class III above were being used by the estate. - Environmental Impacts: The mill has a documented Environmental Improvement Plan for FY 2014/15 and Pollution Prevention Plan for FY 2014/15. Management and implementation is as described under CR5.6 above. - Waste reduction: The company has a waste identification and management plan. Implementation was as described under CR 5.3. - Pollution and greenhouse gas (GHG) emissions: The mill conducts regular emissions monitoring in accordance with legal requirements. Sime Darby HQ has a documented Renewable Energy Imple- mentation Plan for all mills in Malaysia and Indonesia with planned mill to reduce the main source of greenhouse gases identified from the mill, i.e. methane production from POME treatment ponds through methane capture and flaring. In addition Bukit Puteri estate also has a documented Pollution Preventive Management Plan for FY 2014/15 which identifies pollution sources and specific concerns related to the workshop, linesite/housing, chemical store/mixing area, genset/diesel store, and transport. Further details are described under CR5.6 above - Social Impacts: The company has a documented Social Impacts Assessment and SIA Management Plan which was developed on July 2014 and has been reviewed in January 1 st 2015. The main concerns identified in the management plan and follow up are as explained under CR6.1 - Optimising the yield of the supply base: Techniques to improve the oil yield are defined in the company’s MPLAN.

Compliance status: Full Compliance

• RSPO SCCS

Bukit Puteri Palm Oil Mill is one of the palm oil mills owned by Sime Darby Plantation under SOU 10 Kuala Li- pis District, Pahang. The mill was commissioned in 2005 with a production capacity of 20 tons/hours (based of Licence No. 000879 issue dated of 28 April 2005 in accordance with the Environmental Quality Act 1974 Seksyen 18 (1) on behalf Austral Enterprise Bhd with address HS (D) 238, Lot 1277, Batu Yon, Kuala Lipis – Pahang. For period of July 2014 to June 2015, it was found that Bukit Puteri Mill is receiving 92.78 % of its supplies of fresh fruit bunches (FFB) from one company’s owned estate is Bukit Puteri estate and 7.22% from the outgrowers surrounding company’s location. Bukit Puteri Palm Oil Mill is producing crude palm oil (CPO) and palm kernel (PK). During this eTrace license period, it was found that the company had performed sales transaction through the RSPO IT system of 1000MT of CPO, and no sales of PK. The following is a description of the company’s supply chain management system according to the RSPO SCCS requirements, including status of compliance of the company and their outsourced third parties to RSPO SCCS requirements:

E.1. Definition

Findings: The organization (Bukit Puteri Mill) is still implementing the RSPO-SCCS Mass Balance Model. This model allowed the mixing of certified and uncertified FFB and product through the control by the Mass Balance record to ensure the quantity of certified product, and only certified product could be claim by the organization as a certified palm oil product. The organization has identified the volume of certified and uncertified FFB received. Based on Mass Balance record, showed the amount of FFB certified came from own estate i.e. Bukit Puteri Estate, than the uncertified FFB came from out growers surrounding company’s location.

QMF: RSPO-007b-11 RSPO 4th Annual Surveillance Audit Report - Sime Darby Plantation Sdn.Bhd–

Bukit Puteri Palm Oil Mill- Pahang-

Page 36 of 53

From period of March 31, 2014 until March 31, 2015, Bukti Puteri Mill received approximately 50,517.93 tonnes of certified FFB and 1,817.53 tonnes of uncertified FFB. Bukit Puteri Mill only produced crude palm oil and palm kernel.

Compliance status: Full compliance

E.2. Explanation

Findings: Estimated of tonnage CPO dan PK certified and uncertified product has been recorded in to the public summary on the P&C certification report. Bukit Puteri Mill registered in RSPO IT Platform (e-Trace) with the member ID number RSPO_PO1000000192.

The latest information on certified CPO and PK sales is as follows: Certified tonnages sold; 1000 mt CPO; PK – (based on e-trace record) Certified tonnages purchase; CPO - ; PK –

Compliance status: Full compliance

E.3. Documented procedures

Findings: During this 4th surveillance audit, it was found that there is no revision or change the organization procedures. The company procedures covered from the incoming FFB until product dispatch in Mill Quali- ty Management System (MQMS) document. The several procedures are: - SOP of Reception Station (Station 1.0), - SOP for fruit Handling Station (Station 2.0), - SOP for Sterilization Station (Station 3.0) , - SOP for Threshing Station (Station 4.0), - SOP for Pressing Station (Station 5.0), - SOP for Clarification Station (Station 6.0), - SOP for Depericarping Stations(Station 7.0) - SOP for Kernel recovery Stations (Station 8.0) - SOP for Boiler Stations(Station 9.0) - SOP for Power Generation stations (Station 10.0) - SOP for Product Storage and Dispatch (11.0) - SOP for Oil recovery Stations (Station 13.0) All of procedures were issued since November 01, 2008.

Personnel who are responsible for implementing RSPO SCCS in Bukit Puteri Mill have been trained on RSPO SCCS conduct in a training conducted on 18/7/2013, attended by 6 persons from the weighbridge, the supervisor, chief clerk, with evidence seen on the attendance list and material awareness training.

Bukit Puteri Mill has records of incoming received certified and uncertified FFB through the weighbridge slip. The difference of incoming received of certified and uncertified FFB in weighbridge slip is based on origin of FFB, where the FFB coming from own estate is automatically stated as a certified FFB and the FFB coming from smallholders is stated as non-certified.

Compliance status: Full compliance

E.4. Purchasing and good in

QMF: RSPO-007b-11 RSPO 4th Annual Surveillance Audit Report - Sime Darby Plantation Sdn.Bhd–

Bukit Puteri Palm Oil Mill- Pahang-

Page 37 of 53

Findings: The organization has a Mass Balance record. On the record showed the incoming FFB certified and uncertified in period of March 31, 2014 until March 31, 2015, with the FFB amount within that period, i.e.: 1. March 31, 2014 until May 31, 2014; incoming certified FFB is about 12,256.98 MT and uncertified FFB is about 590.00 MT 2. June 30, 2014 until August 31, 2014; incoming certified FFB is about 12,539.72 MT and uncertified FFB is about 582.94 MT 3. Sept 30, 2014 until Nov 30, 2014; incoming certified FFB is about 12,553.91 MT and uncertified FFB is about 413.44 MT 4. Dec 31, 2014 until Feb 28, 2015; incoming certified FFB is about 9,645.46 MT and uncertified FFB is about 161.31 MT 5. March 31, 2015; incoming certified FFB is about 3,521.86 MT and uncertified FFB is about 69.84 MT During the 4th surveillance audit, time period March 31, 2014 until March 31, 2015 there is sales activity for palm oil certified product and was recorded in to RSPO IT platform (e-Trace), i.e.: shipping dated on 07/10/2014 as much 1000 MT, with transaction identification number TR-3d6a01f5-c53d and TR- 75cf0e49-1422 delivered to the NURI Refinery (buyer) this under Sime Darby also. On the sales record both of two transactions above included information on the contract number, date of contract, seller, buyer, commodity description, shipment date, port of discharge, quantity, quality of product, delivery date, RSPO SCCS model stated in custom and remarks, and others.

Compliance status: Full compliance

E.5. Record keeping

Findings: During this 4th surveillance audit, it was found that there is no revision to the records keeping procedure. The record keeping has set established on the document for mechanism for control and maintenance of the data and document used in production process as stated on the Mill Quality Management System issued on November 01, 2008. Mill QMS document mentioned the retention time for all records and report is set for at least in 5 years. Bukit Puteri Mill has records and balances of all receipts of certified and uncertified incoming FFB, FFB process, CPO and PK, extraction rate, delivery palm oil products and others. In mass balance record on March 31, 2014 until March 31, 2015 time periode showed the information of incoming FFB received, FFB process, CPO and PK produced, palm oil product, quantity stock/stock information for certified and uncertified FFB and palm oil product. The organization maintains all required records well.

Compliance status: Full compliance

3.2 Status of Previously Identified Non-conformities

During the previous surveillance assessment, a total of 1 (one) minor non-conformity for RSPO P&C was identified whereas there are 2 (two) major non-conformities for RSPO SCCS. During this surveillance assessment, it was found that there was sufficient evidence for closure of all non-conformities. The following is a description of the evidence of action taken to close the non-conformities raised during the previous assessment, as well as auditor’s conclusions on the status of the non-conformities.

• RSPO P&C

Criterion 5.3. (Minor indicator 2) Having identified wastes and pollutants, an operational plan should be developed and implemented, to avoid or reduce pollution.

Non-conformance 2014-01 of 01 (Minor non-conformity) Found waste management plan (collect recyclable materials such as paper, glass, plastic - in recycling bins provided and send to Thiragalaagu Enterprise for recycling) implementation was not consistent to

QMF: RSPO-007b-11 RSPO 4th Annual Surveillance Audit Report - Sime Darby Plantation Sdn.Bhd–

Bukit Puteri Palm Oil Mill- Pahang-

Page 38 of 53

Waste Management Plan FY 2013/14, where domestic waste from housing was mix with plastic, paper, glass at dumping site at block 91 C.

Correction : Bukit Puteri Estate has arranged with recycle centre to collect all recycle item at recycle bin when necessary.

Verification result during 4 th Surveillance: Waste Management Traini ng has been conducted at SOU 10 in Bukit Puteri mill on 14th May 2014 to ensure all workers are aware of managing waste.

Bukit Puteri estate is not carrying out recycling of their wastes and hence has revised their waste management plan for FY2014/2015 to be appropriate to the actual practice on-site, which states that domestic wastes will be collected 3 times a week and disposed of at a landfill. It was verified on-site that the domestic waste is managed as per the plan with waste bins allocated at workers housing and office and landfill was sighted being used in the field.

Auditor Conclusion: Closed

• RSPO SCCS

SCCS Non-conformance 2014- 01 of 02: There are no information as stated in SOP for RSPO SCCS and traceability (issue : March 2013) point 5.1 on outgoing documents accompanying the dispatch of FFB certified from estate so that weighbridge op- erator not identify FFBs received as certified or non-certified (stated on SOP point 5.2.2.2)

Correction: • PQSM (supply chain working group) will revise the SOP for SCCS and traceability on date of May 15, 2014 • RSPO and certification unit has conducted internal training on SCCS requirement.

Corrective Action: RSPO and certification unit (supply chain working group) revise and improve SOP on SCCS and distrib- ute to all Sime Darby Plantation Mills. Refer to email attached – progress on update SOP RSPO SCCS.

Verification result during 4 th Surveillance: During this 4th surveillance audit, it was found that the organization has revised the procedure number SD/SDP/PSQM/001 Rev 01 dated on 01/03/2015 about Sustainability Supply Chain and Traceability procedure still available. This procedure still in draft, but was implemented in the mill, evidenced by weighing slip incoming certified FFB, i.e.: “in the procedure on Point 6.0 “for RSPO/ISCC certified estates, estate shall ensure sufficient information is stated on the weighbridge ticket or consignment note for all delivery FFB including certificate number, GHG emission value, distance, country of origin”. Example of implementation through the FFB consignment C/N No. 84335 date on 25/4/2015 from division B, field number 89F, with FFB delivered is 236, and received by the mill, evidence by the weighbridge slip ticket number 66447 dated on 24/05/205 with incoming FFB received is 236 from field number 89F, net weight 4,860 kg, complete by RSPO SCCS MB stamp on the FFB delivery consignment. The different of certified and uncertified FFB is from the origin FFB and stamp RSPO SCCS MB on the FFB consignment delivery. Certified FFB only came from Bukit Puteri Estate.

Auditor Conclusions: Closed

QMF: RSPO-007b-11 RSPO 4th Annual Surveillance Audit Report - Sime Darby Plantation Sdn.Bhd–

Bukit Puteri Palm Oil Mill- Pahang-

Page 39 of 53

SCCS Non-conformance 2014-02 of 02 : The mill has not been able to show about stock information and not appropriate category of CPO d ispatch on mass balance report for period of 2013/2014

Corrections: Bukit Puteri mill will complete and compile all information of CPO discharge as per mass balance tem- plate where refer to mass balance attached.

Corrective Action: Bukit Puteri mill attended SCCS training at Kerdau mill (another mill under Sime Darby Plantation) to ensure person-in-charge aware of SCCS requirement and how its implemented at operating unit.

Verification result during 4 th Surveillance: During this 4th surveillance audit, it was found that organization has record of mass balance for the FFB, CPO and PK certified and uncertified. In periode time 2014/2015 there is sales activity for palm oil certified product, and was recorded in RSPO IT Platform (e-Trace), i.e.: shipping dated on 07/10/2014 as much 1000 mt with transaction identification number TR-3d6a01f5-c53d and TR-75cf0e49-1422 delivered to the NURI Refinery (buyer) this under Sime Darby also.

The orrganization also conducted the 3 monthly evaluations to ensure the palm oil product certified still in positive stock. Then during the surveillance audit, the palm oil certified product still in positive stock.

Auditor Conclusions: Closed

3.3 Identified Non-conformances, Corrective Actions Taken and Auditors Conclusions

During this surveillance assessment, a total of 2 (two) major non-conformities and 4 (four) minor non- conformities for RSPO P&C was identified whereas there were no non-conformities identified against the RSPO SCCS requirements. The company has taken corrective action against these as well, and for those which could not be verified as closed through document checks, the closure of these minor non-conformities will be assessed during the next surveillance audit. A summary of all identified non-conformances, corrective actions taken and auditor conclusions is as below:

• RSPO P&C

Criterion 2.1.1 (Major indicator): Evidence of compliance with relevant legal requirements shall be available.

Non-conformance 2015-01 of 06 (Major non-conformity) There is evidence of legal non-compliances found, i.e.: 1) Stated in the mill’s DOE license dated 1 July 2014 to 30 June 2015 that the mill is required to install a CCTV facing the mill’s chimney for visual record of the black smoke which is to be active for 24 hours and records maintained for 6 months. However, no such CCTV has been installed by the mill 2) The mill is required to carry out chimney emissions monitoring using the Continuous Emissions Moni- toring System (CEMS), however it was informed the CEMS system has been non-functional since January 2015 and the mill has not taken action to repair the CEMS system and inform the DOE that the system is not working 3) The mill is carrying out measurement of smoke density, no analysis report on smoke density results is submitted to the DOE on a monthly basis, as required in the DOE license. 4) Found Noise at Boundary was not monitored as required to be below 70 dB(A) between (7.00 am- 10.00pm) and 60 dB(A) at night (10.00pm-7.00am) by Written Approval for 150 KVA & 450 KVA dat-

QMF: RSPO-007b-11 RSPO 4th Annual Surveillance Audit Report - Sime Darby Plantation Sdn.Bhd–

Bukit Puteri Palm Oil Mill- Pahang-

Page 40 of 53

ed 4/12/13 from Pahang DOE. 5) Both the mill and estate does not store and manage contaminated gloves as well as fluorescent tubes as scheduled wastes.

Correction : 1) View of existing CCTV at the mill ramp and boiler chimney was adjusted to face the mill’s chimney. 2) The mill already appoint vendor ST Tech S/B on 20May 2015 to repair CEMS system and work still in progress 3) CEMS repair still in progress and analysis report to be submitted after work complete. 4) Appointment of vendor to conduct Noise at Boundary. 5) The appointed person-in-charge is to managed (inventory, storage and disposal) of all the stated items as per EQA Scheduled Waste Regulation 2005.

Corrective Action: 1) The mill has assigned a person in charge to monitor DOE compliance with Mill Operation on monthly basis. 2) The mill has assigned a person in charge for monitoring of the CEMS 3) The mill will submit the Smoke Density Report on a monthly basis. 4) The mill has assigned a person in charge to monitor DOE compliance. 5) The scheduled waste Manager has been informed to ensure all scheduled waste handled as per requirement. Scheduled waste management training conducted on 21.05.2015

Verification Result: 1) Photographic evidence that the mill’s existing CCTVs have been adjusted to face the mill’s chimney was sighted 2) Service report from ST Tech Engineering dated 20 May 2015 for servicing and calibration works done on CEMS as well as to troubleshoot the boiler signal cable to CEMS system was sighted 3) The mill provided evidence of submission of smoke density record for April 2015 to the the De- partment Environment of Cameron Highlands, Pahang as seenin letter dated 6 May 2015. As seen from evidence for no. 2, the CEMS is currently in progress of being repaired and from there future smoke density reports will be generated as well. 4) The company provided evidence of quotation evaluation summary for quotations requested from 6 vendors to conduct noise boundary monitoring with one vendor, i.e. Environmental Science Sdn. Bhd. selected to conduct the noise boundary monitoring. 5) Evidence of schedule waste management training done on 21 May 2015 was sighted, i.e. attendance list and photos of training. E-consignment note for Bukit Puteri estate was sighted and showed that 0.005MT of fluorescent tubes was collected on 29 May 2015.

Auditor Conclusions: Closed

Date of closure: 29 May 2015

Criterion 2.1.2 (Minor indicator ): A documented system, which includes written information on legal requirements, shall be maintained.

Non-conformance 2015-02 of 06 (Minor non-conformity) As sampled found LORR was not properly documented in accordance with actual requirements as per OSHA 1994 & EQA 1974. For example: - Part V is supposed to be regarding general duty of employer and self-employed person, duty to formulate S&H policy, duty of employer to person other than their employee, but was wrongly stated as general duty of employee and not to interfere or misuse things provided for S&H and discrimination against employee. - Part VI is supposed to be regarding general duty for designer, manufacturer and supplier and Part VI is supposed to be regarding general duty of employees, but is stated as general duty of employers at work, duty not to interfere with or misuse things provided and discrimination against employee. - Part VII (Safety and Health Organization) include requirements on Safety and Health officer, but this is

QMF: RSPO-007b-11 RSPO 4th Annual Surveillance Audit Report - Sime Darby Plantation Sdn.Bhd–

Bukit Puteri Palm Oil Mill- Pahang-

Page 41 of 53

supposed to be excluded as it is not applicable for the organization - Requirement to conduct medical surveillance is not mentioned. - Environmental Quality Act 1974 was not properly identified and evaluated and found missing sections that are applicable to the organization, i.e. Section 22 (Restriction of Pollution to Atmosphere), Section 23 (Restriction of Noise Pollution), Section 29A (Prohibition of Open Burning), Section 34B (Prohibition against placing, deposit ect..of scheduled waste). - Section 29 regarding Prohibition of discharge of waste to Malaysia water was included in the LORR, but actually not applicable to the organization

Correction : To review and update LORR as per actual requirements stated in NCR and proper documented.

Corrective Action: To appoint a Safety Management Representative and review LORR with ESH Region (Pn Selvarani Ayer). PSQM will assist to formulate LORR requirements as per OSHA 1994 and EQA 1974 for SOU 10.

Auditor Conclusions: Corrective action plan accepted. Effectiveness of implementation to be verified during next audit.

Criterion 4.7.2 (Major indicator ): 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 precautions attached to products shall be properly observed and applied to the workers.

Non-conformance 2015-03 of 06 (Major non-conformity) 1) Hazard Identification Risk Assessment Risk Control (HIRARC) was not reviewed accordingly as it was found at Mill that there is no evidence of re-evaluation of HIRARC done annually but only those related to accidents which have occured. As required by ESH Management System Manual (EHS Risk Management) SD/SDP/SQM(ESH)/001-2-1 Revision 0 dated 01/07/12, which states that: • All existing operating units shall periodically assess their ESH Risks related to their routine and non routine activities, facilities, facilities at work, product and services. • Strategic ESH risk shall be identified and assessed on yearly basis • All operations shall consider significant hazards and risks. 2) Found at Bukit Puteri Estate, there was information shared from HQ regarding an accident for harvester electrocuted while conducting harvesting close to electrical cable in Sabah on 15/08/14. Howev- er, this potential risk was not identified and included in the HIRARC for harvesting activity that was revised accordingly on 15/01/15.

Correction : 1) Mill will review HIRARC annually 2) HIRARC for harvesting activity was reviewed on 26 May 2015 which has taken into consideration

Corrective Action: 1) ESH PSQM has plan to conduct training to all ESHMR and operating unit completed by December 2016. Attached ESH Risk Development Plan. 2) HIRARC training was conducted on 25 May 2015 at Bukit Puteri Estate by PSQM – ESH

Verification Result: 1) The root cause of the issues was identified as lack of training of the relevant personnel on how to update the HIRARC. A training on HIRARC was done at Bukit Puteri Estate on 25 May 2015 attended by 20 personnel from the mill and estate, with evidence in the form of training attendance list. 2) The HIRARC was updated on 27 May 2015 to include a risk assessment for electrocution risk due to harvesting. The risk level was scored as 8 which is considered high, and the risk control identi-

QMF: RSPO-007b-11 RSPO 4th Annual Surveillance Audit Report - Sime Darby Plantation Sdn.Bhd–

Bukit Puteri Palm Oil Mill- Pahang-

Page 42 of 53

fied was to replace the aluminum poles with non-conductive poles.

Auditor Conclusions: Closed with observations

Date of closure: 27 May 2015

Criterion 4.7.5 (Minor indicator ): 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. 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.

Non-conformance 2015-04 of 06 (Minor non-conformity) Found 2 accidents were reported in the Bukit Puteri Estate on 04/02/15 and 28/01/15 was investigated and reported but the investigation were not carried out efficiently and according to the best and suitable methodology (fish bone diagram, tripod Beta Etc) as required in the company’s procedure for EHS In- cident, Accident and Non-conformance Management (SD/SDP/SQM(EHS)/001-2-9).

Correction : Bukit Puteri estate will start using fish bone diagram method during investigation as per ESHMS.

Corrective Action: The Accident Investigation Team was trained to include “fish bone diagram” methodology in their investigation process as mentioned and outlined in the EHS Manual

Auditor Conclusions: Corrective action plan accepted. Effectiveness of implementation to be verified during next audit.

Criterion 5.2.1 (Major indicator ): Information shall be collated in a High Conservation Value (HCV) assessment that includes both the planted area itself and relevant wider landscape-level consider- ations (such as wildlife corridors).

Non-conformance 2015-05 of 06 (Raised as Minor non-conformity since guidance for this criterion was revised from the previous MY-NI) The company’s existing Biodiversity Baseline Study dated April 2009 is inadequate as it does not include information on the 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 company’s activities

Correction : Communication with Social, Environmental and Project Unit (SEPU), PSQM

Corrective Action: HCV re-assessment will be conducted in August 2015.

Verification Result: It was confirmed from discussion with the company’s management and SEPU team that a new biodiversity study is planned to be conducted for all SOU’s not only SOU11. The results of the new biodiversity study will be evaluated during the next audit.

Auditor Conclusions: Corrective action plan accepted. Effectiveness of implementation to be verified during next audit.

Criterion 5.6.3 (Minor indicator ): 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.

QMF: RSPO-007b-11 RSPO 4th Annual Surveillance Audit Report - Sime Darby Plantation Sdn.Bhd–

Bukit Puteri Palm Oil Mill- Pahang-

Page 43 of 53

Non-conformance 2015-06 of 06 (Minor non-conformity) There is no evidence of record of GHG monitoring reporting for the siginificant pollutants and emissions from the estate and mill using appropriate tools, i.e. Palm GHG or other GHG monitoring tool approved by the RSPO.

Correction : To establish record of GHG Monitoring

Corrective Action: Plan to establish New MYNI RSPO training and GHG Monitoring report in FY2015/16.

Auditor Conclusions: Corrective action plan accepted. Effectiveness of implementation to be verified during next audit.

• RSPO SCCS There were no non-compliances raised against RSPO Supply Chain requirements during this audit.

QMF: RSPO-007b-11 RSPO 4th Annual Surveillance Audit Report - Sime Darby Plantation Sdn.Bhd–

Bukit Puteri Palm Oil Mill- Pahang-

Page 44 of 53

3.4 Noteworthy Positive Components

No. Criteria Positive observation

1. - Good housekeeping observed throughout the Bukit Puteri Mill and Bukit Puteri Estate’s workshop, chemical store and office. Good bunding made for scheduled waste store. 2. - Information and warning signage clearly posted and displayed at notice board, strategic locations such as by the roadside when entering the estate, Muster Ground, chemical and scheduled waste store, workshop. 3. 4.3 Good terracing for hilly area in replanting process to minimize soil erosion.

4. 4.4 BOD results of the mills to be consistently well below the legal limit of 100mg/l, av- eraging around 20 – 37mg/l in past few months, due to the mill’s implementation of a tertiary treatment system before discharge 5. 4.4.2 Good protection of water sources by maintaining riparian buffer zones.

3.5 Issues Raised by Stakeholders and Findings Pertaining to Issues

There are no identified specific issues from local communities regarding company’s performance during surveillance audit.

QMF: RSPO-007b-11 RSPO 4th Annual Surveillance Audit Report - Sime Darby Plantation Sdn.Bhd–

Bukit Puteri Palm Oil Mill- Pahang-

Page 45 of 53

4.0 CERTIFIED ORGANISATION’S ACKNOWLEDGEMENT OF INTERNAL RESPONSIBILITY

4.1 Date of Next Surveillance Visit

The 5 year certification cycle for SOU 10 Bukit Puteri is complete. Recertification Audit is planned for April 2015

4.2 Acknowledgements of Internal Responsibility and Formal Sign-Off by Client

It is acknowledged that the assessment visit was carried out as described in this report and we accept the assessment findings and report content.

Signed on behalf of Sime Darby Signed on behalf of TUV Rheinland Malaysia

………………………………………. …………………………………………. Name: Carol Ng Siew Theng Position: Lead Auditor Date: Date: 5 October 2015

QMF: RSPO-007b-11 RSPO 4th Annual Surveillance Audit Report - Sime Darby Plantation Sdn.Bhd–

Bukit Puteri Palm Oil Mill- Pahang-

Page 46 of 53

APPENDICES

Appendix 1: Audit plan

Date / Organizational Unit and Pro- Auditor / Ab- Procedure - EM/QM Element - Interviewee Time (1) cesses brev. Standard Chapter Saturday, Audit team travels from Temerloh Carol Ng (CN), 25 April to hotel at Raub, Pahang (after- Yusof Nizar 2015 noon): (YN), Muham- Hotel Lipiz Plaza, mad Fundy Lot 6, Kompleks Taipan | Jalan Li- Kurniawan pis-Benta, Kuala Lipis 27200, Ma- (MK), Harso laysia Yuli Antena (HYA) Sunday, No activity 26 April 2015 Monday, 27 April 2015 – Bukit Puteri Mill 08.00am – Opening meeting at Mill All Top Manage- 09.00am - Introduction by audit team leader ment and Relat- - Presentation of estates and mill ed Managers by respective managers

- Explanation on actions taken to close previous NCs and review of evidence - Finalization of audit plan 09.00am – General requirements CN Sime Darby 12.30pm • Time bound plan Sustainability • Partial certification re- Management quirements representatives

Mill manager / Mill supply base & production assistants records • FFB reception records • CPO & PK production rec- RSPO ords Principle 2 : IN 2.1.1 (Environ- • OER & KER ment) Principle 4 : CR 4.4 Environment & Legal Require- Principle 5 : CR 5.1, 5.3, 5.6 ments Principle 8 : all • Mill inspection • POME and water quality analysis records • Water management plan • Waste management • EIA/ Aspects Impacts analysis • GHG analysis and management • Continuous improvement plan

QMF: RSPO-007b-11 RSPO 4th Annual Surveillance Audit Report - Sime Darby Plantation Sdn.Bhd–

Bukit Puteri Palm Oil Mill- Pahang-

Page 47 of 53

Date / Organizational Unit and Pro- Auditor / Ab- Procedure - EM/QM Element - Interviewee Time (1) cesses brev. Standard Chapter 09.00am – Supply Chain Certification Audit MK Mill manager / Supply Chain Certification 12.30pm • Supply Chain Management assistants Standard 2014 Manual, SOPs, & related records Module E – CPO Mills: Mass • eTrace Transaction records, if Balance any • SCC training records • Weighbridge slips

Transparency & ethical conduct, RSPO financial viability, land legality, Principle 1 (all) GHG & Energy efficiency Principle 2: CR2.2 (2.2.1 – • List of publicly available 2.2.3) documents Principle 3 (all) Principle 5: CR 5.2, 5.4 • Ethical conduct policy

• Land titles • Energy efficiency monitoring and records 09.00am – Legal Requirements, OSH, YN Mill manager / RSPO 12.30pm Training, SOPs assistants/ Principle 2 : CR2.1 • Mill inspection workers Principle 4 : CR4.1, CR4.7, • Workshops & stores CR4.8 • HIRARC • OSH Committee & safety records • Accident records • Training & PPE issuance • SOPs & Internal audit 09.00am – Social aspects – Workers, local HYA Mill manager / RSPO 12.30pm communities, communication, assistants /Local Principle 2: IN 2.1.1 (Social), CSR communities / CR2.2 (2.2.4 – 2.2.6), CR2.3 • Mill inspection workers Principle 6: all • Workers/ Contractor inter- Principle 8 (social) views • Housing • Local communities • List of workers • Contracts • Working hour & overtime records, pay slips • Land conflict (if any)

12.30pm – Lunch 1.30pm 1.00pm- Continue document review All auditors Mill manager / RSPO & SCCS 5.00pm assistants /Local communities / workers 5.00pm End of Day 1

Tuesday, 28 April 2015 – Bukit Puteri Estate 8.00am – Estate production data CN Estate manager 12.30pm • Area statements / assistants • FFB supply information • Replanting program • Smallholder/ outgrower

QMF: RSPO-007b-11 RSPO 4th Annual Surveillance Audit Report - Sime Darby Plantation Sdn.Bhd–

Bukit Puteri Palm Oil Mill- Pahang-

Page 48 of 53

Date / Organizational Unit and Pro- Auditor / Ab- Procedure - EM/QM Element - Interviewee Time (1) cesses brev. Standard Chapter certification plan (if applicable) RSPO Environment, GHG, Legal Re- Principle 2 : IN 2.1.1 (Environ- quirements ment) • Waste management Principle 4 : CR 4.4 (except • Water management plan 4.4.2), 4.5 • Integrated pest management Principle 5 : CR 5.1, 5.3, 5.6 • EIA/ Aspects Impacts analysis Principle 7 (if applicable): CR • GHG analysis and manage- 7.1, 7.8 ment Principle 8 : all • SEIA & GHG monitoring for new plantings (if applicable) • Continuous improvement plan

8.00am – Transparency, best practices, fi- MK Estate manager RSPO 12.30pm nancial viability, land legality, / assistants RSPO • List of publicly available Principle 1 (all) documents Principle 2: CR2.2 (2.2.1 – • Ethical conduct policy 2.2.3) • Land titles Principle 3 (all) • Soil fertility & management Principle 4: CR4.2, CR 4.3, IN (sloped areas, marginal soils, peat 4.4.2 areas, EFB application, etc) Principle 5: CR 5.2, 5.4, 5.5 • Energy efficiency monitor- Principle 7 (if applicable): CR ing and records 7.2, 7.3, 7.4, 7.7 • Use of fire (if applicable) • New plantings best practices (if applicable)

8.00am – Legal Requirements, OSH, YN Estate manager RSPO 12.30pm Training, SOPs / assistants/ Principle 2: CR2.1 • Field operations (spraying, workers Principle 4: CR4.1, 4.6, 4.7, 4.8 harvesting, manuring) • Worker interviews • Chemical stores • Workshops • HIRARC • OSH Committee & safety records • Accident records • Training & PPE issuance • SOPs & Internal audit 8.00am – Social aspects – Workers, local HYA Estate manager/ Principle 2: IN 2.1.1 (social), 12.30pm communities, communication, assistant man- CR2.2 (2.2.1 – 2.2.3), CR2.3 CSR ager/ local Principle 6: all • Land conflict (if any) communities / Principle 7 (if applicable): • Workers/ Contractor inter- workers CR7.1 (social), 7.5 & 7.6 views & personnel records Principle 8 (Social) • Labour policies • Trade union representatives & records • Housing • Local communities • Communication & consultation procedures/ complaints

QMF: RSPO-007b-11 RSPO 4th Annual Surveillance Audit Report - Sime Darby Plantation Sdn.Bhd–

Bukit Puteri Palm Oil Mill- Pahang-

Page 49 of 53

Date / Organizational Unit and Pro- Auditor / Ab- Procedure - EM/QM Element - Interviewee Time (1) cesses brev. Standard Chapter • Contracts • Working hour & overtime records, pay slips • SEIA (if applicable)

12.30pm – LUNCH 1.30pm 1.30pm – Continue document review All auditors Estate manager 5.00pm / assistants /Local communities / workers 5.00pm End of Day 2

Wednesday, 29 April 2015 – Bukit Puteri mill 8.00am- Prepare for Closing Meeting All - 10.00am - Consolidate findings 10.00am- Closing Meeting All Top Manage- 12.00pm - Summary of findings ment and Relat- ed Managers 12.00pm End of audit Audit team travels back to KL and Jakarta

Appendix 2: List of Abbreviations

BOD Biological Oxygen Demand CEMS Continuous Emissions Monitoring System CHRA Chemical Health Risk Assessment CLASS Classification, Labelling and Safety Data Sheet of Hazardous Chemicals CPO Crude Palm Oil DOE Department of Environment DOSH/JKKP Department of Occupational Safety & Health / Jabatan Keselamatan & Kesihatan Pekerja EAI Environmental Aspect and Impact EIA Environmental Impact Assessment EIE Environmental Impact Evaluation EMP Environmental Management Plan EMS Environmental Management System ERTs Endangered, Rare & Threatened species EQ / EQA Environmental Quality / Environmental Quality Act ESH Environmental Safety & Health EQMS Estate Quality Management System FFB Fresh Fruit Bunches EFB Empty Fruit Bunches FMA Factory and Machineries Act HCV High Conservation Value HIRARC Hazard Identification, Risk Assessment and Risk Control HQ Headquarters IPM Integrated Pest Management JBA Jabatan Bekalan Air (Water Supply Department) JKKK Jawatankuasa Kemajuan dan Keselamatan Kampung (Village Development and Security Committee) JPAM Jabatan Pertahanan Awam Malaysia (Malaysia Civil Defense Department) KAFA Kelas Agama Fardhu-Ain (Islamic Religious Classes)

QMF: RSPO-007b-11 RSPO 4th Annual Surveillance Audit Report - Sime Darby Plantation Sdn.Bhd–

Bukit Puteri Palm Oil Mill- Pahang-

Page 50 of 53 KER Kernel Extraction Rate LCC Leguminous Cover Crops LMD Land Management Department LTA Lost Time Accident LORR Legal and Other Requirement Register MAPA Malaysian Agricultural Producers Association MOP Muriate of Potash MSDS Material Safety Data Sheets MQMS Mill Quality Management System NGO Non-Government Organization NIOSH National Institute of Occupational Safety and Health NUPW National Union Plantation Workers OER Oil Extraction Rate OSH Occupational Safety & Health PERKESO Pertubuhan Kebajikan Sosial (Social Welfare Organization) PIC Person-in-charge PKO Palm Kernel Oil PMT P Pe rmit/Pendaftaran Mesin Tekanan (Permit / Registration of Pressure Machine) POM Palm Oil Mill POME Palm Oil Mill Effluent PPE Personal Protective Equipment PSQM Plantation Sustainability and Quality Management QMO Quality Management Officer R&D Research and Development SDP Sime Darby Plantation SDPA Sime Darby Plantation Academy SEPU Social, Environment and Project Unit SHC Safety & Health Committee SIA Social Impact Assessment SPMS Sustainable Plantation Management System SOCSO Social Security Organization SOP Standard Operating Procedure SOM Standard Operation Manual SOU Strategic Operation Unit SW Scheduled Wastes UN United Nations WTP Wastewater Treatment Plant

QMF: RSPO-007b-11 RSPO 4th Annual Surveillance Audit Report - Sime Darby Plantation Sdn.Bhd–

Bukit Puteri Palm Oil Mill- Pahang-

Page 51 of 53

Appendix 3: List of Stakeholders Interviewed and Contacted

Name of No. Institution - Address Stakeholder Stakeholders Interviewed On-Site 1. Jesma b. Jalil Mill Manager 2. Francis Ng Bukit Puteri Estate Manager 3. Sabarinah Marzuki PSQM 4. Khairul Assistant Mill Manager 5. Rosni b. Suratman Mill Conductor 6. Azmi Din Assistant Mill Manager 7. Iqmal Fajri HSE 8. Saiful PSQM 9. Mohd Faiz Ismail Assisstant Manager 10. Mohd Zulkifli b. Md Isa QMO 11. Zulkarnain Ishak PSQM

Appendix 4: Observations and Opportunities for Improvement No. Observations / Opportunities for Improvement Criteria 1. Sime Darby HQ has made general company procedures and policies available on their 1.2 company website, however there is lack of evidence that management at SOU level have been informed or aware of the type of estate or mill related specific documents required to be made publicly available as listed in Indicator 1.2 2. There were several legal non-compliances/potential non-compliances observed but it was 2.1 confirmed that the company had already taken action to resolve these. Continued follow- up is required by the company: - The mill did not carry out stack sampling for Chimney 2 in year 2014, which is not in accordance with accordance with the mill’s DOE’s license stating requirement to carry out stack sampling twice a year. Sighted that the mill has a signed contract dated 18 March 2015 with their contractor, UiTM A&A Laboratory to carry out the stack sampling and for chimney 2 which is utilized less often, the mill only plans to start usage of the chimney in May 2015, hence they will request the contractor to perform the stack monitoring during that time. - The mill is currently in progress to obtain their Fire Certificate. Installation was done and waiting for the local fire department (Bomba) to inspect as confirmed from email correspondences with the local fire department. - Found a Compressor (PMT 110331) with permit that expired on 11/03/15. The Depart- ment of Occupational Safety and Health (DOSH) had already came and inspected the compressor as seen from the DOSH Log Book record for visit done on 17/07/15. Email was sent by the company to DOSH requesting a payment form for renewal. - At Bukit Puteri Estate, a Chemical Health Risk Assessment (CHRA) was last conducted in July 2010 and is due to be conducted again in year 2015 (every 5 years) in accordance with legal requirements. Found an email sent to the company 08/04/15 regarding quotation for CHRA Assessment for Pahang Zone, as evidence that the company is planning to conducted CHRA according to schedule. 3. The company had sent a letter to local government of Lipis (Pegawai Daerah Lipis – Pejabat 2.2.1 Daerah and Tanah Lipis 27200, Kuala Lipis, Pahang – Darul Makmur) on May 8, 2013 about request of endorsement for total area of 3,875.80 ha from result of re-survey. However, there is still no confirmation from the land department on the resurveyed land data. 4. Bukit Puteri estate has identified locations of all boundary stones and has maintenance programme for the boundary stones which is implemented, however, there is no updated 2.2.2 inventory on the boundary stones that are missing and need to be replaced.

QMF: RSPO-007b-11 RSPO 4th Annual Surveillance Audit Report - Sime Darby Plantation Sdn.Bhd–

Bukit Puteri Palm Oil Mill- Pahang-

Page 52 of 53

5. Integrated Pest Management techniques are applied according to the Sime Darby Agri- 4.5 cultural Reference Manual which was issued on 1st July 2011, and Section 15: Plant protection regarding Control of Rat in Oil Palm was last updated in year 2012. The updated document states that due to labour constraints, all estates are to adopt a calendar baiting approach with rat baiting campaigns carried out once every 6 months to suppress rat attacks, whether or not there is visible sign of rat damage. However, it was noted that the estates also have an SOP for Pests and Diseases issued 11/1/2008 in Sime Darby Plantation’s Estate Quality Management System which also covers rat management and states that for areas without history of rat damage, baiting will only be carried out based on census result. There is lack of evidence that SOPs that are no longer applicable are required to be removed from other SOPs that are still in use to avoid confusion with updated SOPs to be applied. 6. Bukit Puteri estate maintains a document summary of annual chemical usage in docu- 4.6.2 ment named ‘Monitoring Pesticide Usage per Hectare and Per Ton FFB Production. The document shows calculation of active ingredient used per ha and per tonne FFB, however it is total calculation of active ingredients of all chemicals applied, instead of for individual chemicals. In addition, usage of Ebor rat bait is not included in the summary of annual chemical usage. 7. Found at Block 2014A of Bukit Puteri Estate, the mandore was keeping copy of old Mate- 4.6.5 rial Safety Data Sheet (MSDS) for chemical named Basta14 (Class III), last revised on 28/09/08. According to the requirement of the CLASS Regulations 2013, the supplier must review the MSDS of their supplied chemical every 5 years, and the company should obtain the latest version of the MSDS from the supplier 8. Form JKKP 7 was not sent to DOSH accordingly after audiometric test conducted and 4.7 found workers with hearing impairment. This was also noted by DOSH officer in the Log Book. 9. 1) Definition of routine and non-routine activities when developing the HIRARC are not 4.7.2 indicated in the company’s ESH management manual. 2) It was found for some risks identified in the HIRARC that were assigned a score of 4 or higher did not have any recommended risk control, even though this is required as stated in the company’s ESH Management Manual. Example sighted in HIRARC dated 11/02/15 for workshop department, for the lathe machine, where job step no 1 and 3 with score 8 (medium) did not having any recommended risk control. While for gearbox job step 1 and 2 with score 4 (medium) and 9 (medium), neither of these medium level risks had any recommended risk control stated. 3) The ESH Management System Manual (EHS Risk Management) SD/SDP/SQM(ESH)/001-2-1 for HIRARC and aspects and impacts had a statement to refer to another HIRARC & Aspect & Impact Procedure which includes further guidance, however this document was not available when requested at the estate and mill 10. 1) In Bukit Puteri Mill, it was found that the aspects and impacts document was not re- 5.1.1 viewed accordingly. Only cover page of Environmental Impact Evaluation (EIE) was updated on 03 July 2014 with remarks that from the Assistant Manager that there were no changes. The remainder of the document was dated 10 July 2013 and last reviewed by the Assistant Engineer.

2) It was found that ESH Management System manual (EHS Risk Management) Rev. 0 dated 01/07/12 Para 3.0 (Procedure/Requirement) Environmental hazard (aspects) listed is difficult to understand and definition of aspects and impacts is incorrect. For example, air emissions, nuisance and land contamination were listed as aspects but these are actually environmental impacts. In Bukit Puteri Estate Environmental Aspect and Impact Identification Form (Serial No: EAI/2013/03-04-C) dated 25/01/14 for Herbicides spraying, the environmental aspects listed were water, air, and land contamination, but these are actually environmental impacts.

3) Environmental Aspect and Impact Identification for Workshop Maintenance (Serial no. EAI/2012/014-1 Process/ Area/Station) at Bukit Puteri Estate was sampled and found evidence that evaluation results were not appropriate, e.g.:

QMF: RSPO-007b-11 RSPO 4th Annual Surveillance Audit Report - Sime Darby Plantation Sdn.Bhd–

Bukit Puteri Palm Oil Mill- Pahang-

Page 53 of 53

- Environmental Aspect: Waste disposal of contaminated rags were identified as having an impact level of 5 and 6, but did not include impact no. 4 regarding water pollution too. - Applicable legal requirement stated for several aspects is EQ (Scheduled Waste) Regu- lations 1989, which is not the latest regulations, i.e. EQ (Scheduled Waste) Regulations 2005 - Oil spills of lubricant oil, grease and hydraulic oil were identified to have impacts of 4, 5, 6, but no legal reference was referred to (suppose EQA 1974).

4) Potential of non-compliance to legal requirements is wrongly evaluated for some aspect, e.g. stated in EIE Form for the mill workshop regarding Waste disposal of contaminated cotton rags (Serial No EIE/2012/014-1) and oil spillages (Lubricant, grease and hydraulic oil) and at the estate regarding chemical spillage, there is a question, “Is there high potential of non-compliance to environmental regulations?” Answer stated is no, although in actual this would be non-compliance to EQ (Scheduled Waste Regulations 2005) and EQA 1974 respectively

5) Identification of normal, abnormal and emergency condition is not correctly identified. For example, EIE stated that for oil spillages (lubricant, grease and hydraulic oil), operating condition is indicated Normal and Abnormal, although this is actually an Emergency. 11. The estate carries out wildlife monitoring for tiger and Tapir as the identified endangered 5.2 species within the estate area, however monitoring should further include other types of RTE species identified, such as the black eagle and monkey species, e.g. Macaca which may be listed as RTE under the IUCN list. 12. 1) Before the most recent collection, scheduled waste storage time at the mill had ex- 5.3 ceeded the legal requirement of maximum 180 days, i.e. most recent waste collection by licensed contractor was on 11 November 2014 by Kualiti Alam and previous collection by Alivirgo Sdn. Bhd. was on 12 March 2014 2) Mill scheduled wastes containers are not labeled with date of first generation, name, address and telephone number of the waste generator. It was informed by the mill that labels are placed prior to collection by Kualiti Alam as per their requirement. 3) There were discrepancies found between the records of SW305 & SW306 collected by Bukit Puteri estate’s contractor in November 2014 when compared with the estate inventories on the DOE website and their schedule waste bin cards. It was explained that this was due to error in usage of the DOE online system when they started using it in July 2014. The estate was able to justify the discrepancies and all input and collection was accounted for, however, further training on the usage of the system may be required to avoid similar issues in the future. 13. The list of identified sources of pollution of emission from as seen in the Pollution Preven- 5.6 tion Plan for Bukit Puteri estate did not include identification of greenhouse gas emission sources from the estate. 14. The estates engage foreign workers from Nepal, Myanmar, Bangladesh, India and Indo- 6.5 nesia. In most cases, the company has no official translator for these workers except workers who have worked longer for the estates and know some Malay. In addition, contracts provided to workers are only in English or Malay, but not in a language understood by the workers from Nepal, Myanmar, Bangladesh, or India 15. There are some workers that absconded from Bukit Puteri estate. Management has fol- 6.1.3 low the procedure by reported the absconded workers to the police. Management also keeps all the records regarding their communication with the police. On the other hand, investigation to find out how and why foreign workers run away and abscond has not been conducted by the company. The investigation result would be part of social impacts mitigation process.

QMF: RSPO-007b-11