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Sabah TLAS Audit Report Sabah Legality Standard Principles 1 – 4

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Sabah TLAS Audit Report Sabah Legality Standard Principles 1 – 4 FDS-TLAS-006 Sabah TLAS Audit Report Sabah Legality Standard Principles 1 – 4 Licensee: Rakyat Berjaya Sdn. Bhd. Licensee Contractor: Asiatic Organic Farm Sdn. Reference # GFSSBH 003-051 Bhd. (Asiatic Organic Farm) Contact David Yong (Rakyat Berjaya Officer In- Date of Report 11 October 2019 Person Charge, Tawau Region) Date of close out - Licensee +6089 772 939 Telephone 5th & 6th Floor, 255C, UMNO Building, +6089 775 418 Jalan Dunlop, P. O. Box 60793, 91007 +6089 771 066 Office Tawau, Sabah, Malaysia. Address Contractor Fax +6089 763 192 TB 3478, Ground Floor, Jalan Masjid, 91000 Tawau, Sabah, Malaysia. Email [email protected] Approved By Dr. Kevin T. Grace Statements Audit Statement NA: Non Compliance - Criteria 1.5, 1.7, 2.1, 2.2, 1.9, 2.6, 3.1 Issuance Date NA Expiration Date NA Assessment Details Assessment Dates 07 – 11 October 2019 Scope of Assessment TLAS Principles 1 - 4: Integrated Mosaic Planting and Integrated Wellness Centre Species Drybalanops spp. (Kapur), Dipterocarp spp. (Keruing), Parashorea spp. (White seraya), Shorea spp. (Red seraya, Yellow seraya, Melapi), Scaphium spp. (Kembang semangkuk), Sapotaceae spp. (Nyatoh), Shorea pauciflora (Oba suluk), Neolamarckia cadamba (Laran), Duabanga moluccana (Magas), Alstonia spp. (Pulai), Eugenia spp. (Obah), Sindora beccariana (Sepetir), Lauraceace (Medang), Cotylelobium spp. (Resak batu), Pentace spp. (Takalis), Hopea sangal (Gagil), Macaranga spp. (Sedaman), Dyera spp. (Jelutong), Dialium indum (Keranji) Lead Assessor Priera Bagang Assessor(s) Walter Marcus FDS Staff Suriansa bin Kadir (ADFO Kalabakan), RH Samson Francis (KPPM Brantian), RH Peter Lumambai (PPM Brantian) OBJECTIVES: • The objective of this checklist is to verify compliance to the Criteria listed in the Sabah Legality Standard as defined by Principles 1 - 4 for Sabah dated 01st January 2015 (FDS-TLAS-002). • Compliance is defined when all applicable criteria are observed to be compliant. A Minor Gap to any indicator does not constitute non-compliance to a criterion. A Major Gap to any applicable indicator does reflect non-compliance to a criterion. Compliance for a criterion where multiple minor gaps are identified in indicators under the criterion may reflect non-compliance to the criterion. • All issues identified under this standard shall be considered appropriate to the scale and degree of forestry operations undertaken by the parties under the agreement. 1 FDS-TLAS-006 Summary Information Overview of Licensee: • Rakyat Berjaya Sdn. Bhd. (Rakyat Berjaya) is a subsidiary company of Yayasan Sabah Group that responsible to manage FMU 24 (SFMLA 09/97). • The project area covers a gross area of 1,957.30 ha, which is divided into Block A and Block B. Block A located partly at Kalabakan Forest Reserve (312.30 ha) while Block B is located partly in Kalabakan Forest Reserve (698 ha) and partly in Gunung Rara Forest Reserve (947 ha). Asiatic Organic Farm Sdn. Bhd. (Asiatic Organic Farm) is responsible for the FMP implementation. • The area is located in Block YT 05/04 is within the Government of Malaysia – UNDP – GEF Project on Biodiversity Conservation in Multiple Use Forest Landscapes in Sabah, Malaysia. • The project area has been zoned into three major land uses namely, Conservation, Integrated Wellness Centre and Integrated Mosaic Planting. • The previous FMP for the project area (2009-2018) was prepared and approved on 27 August 2009. According to the terms of the agreement between Yayasan Sabah wholly owned subsidiary, INNO FISHERIES Sdn. Bhd. and Asiatic Organic Farm Sdn. Bhd. the latter is required to develop approximately 131 ha net of the project area for an Integrated Wellness and Ecotourism Centre. This incorporates agro-silvopastoral activities, ecotourism and facilities (Resort and Spa) while the rest of the project area comprising an area of 1,826.30 ha had been set aside for conservation. • Asiatic Organic Farm activities concentrate on the Integrated Wellness and Ecotourism Centre. A mid-term review was conducted in early 2013 to evaluate the previous FMP operations, resulting a revision to the management plan. • The most significant change in land-use in the new FMP is that the areas that had been set aside for conservation and agro-silvopastoral in the previous FMP are now managed under an integrated mosaic restoration concept. • The previous assessment was conducted in October 2018 that resulted in 4 gap(s) and 2 observation(s) (report #: G161-284). • Land use classification: Land classification FMP Area (ha) Current Status (ha) Total Concession Area 1,957.30 1,957.30 Land use - Integrated Mosaic Planting 1,329.46 1,329.46 - Integrated Wellness Centre 181.71 181.71 Conservation 446.13 446.13 Environmental Context: • FMU 24 comprises of Gunung Rara Forest Reserve (GRFR) and Kalabakan Forest Reserve (KFR) (Class II Commercial Forest Reserves), VJR Batu Timbang, VJR Ulu Sg. Napagon and VJR Nurod Urod (Class VI Virgin Jungle Reserves). • GRFR has been identified as a natural wildlife corridor and also known as an essential habitat for a few protected fauna species (e.g., Banteng, Orang Utan and Borneon Elephant). Sighted wildlife in the area includes the Rhinoceros, Orang Utan, Clouded Leopard, Proboscis Monkey, Wild Buffalo (Tembadau) and Asian Elephant. • Maliau Basin Conservation Area (55,840 ha) is also a part of FMU 24, subject to a separate Management Plan. Imbak Canyon Conservation Area (16,750 ha) is adjacent to the northern part of FMU 24. • The areas in between Maliau Basin Conservation Area and the FMU 24 production area are designated as a buffer zone - Maliau Buffer Zone Area 1 and Maliau Buffer Zone 2. Maliau Buffer Zone Area 1 is only allowed to be harvested once whereas Maliau Buffer Zone 2 is allowed to be 2 FDS-TLAS-006 harvested under Reduced Impact Logging (RIL) systems. Rakyat Berjaya coupes, which fall within Maliau Buffer Zone Area 2 are part of Coupes YL1/03; part of YL2/03; YT1/09; part of YT1/03; part of YT2/08; YT3/05(1); YT3/05(2); YT3/04; and YT4/08. Coupe YT 5/04 is not located within the Maliau Buffer Zone areas • The buffer zone areas are dominated by Mixed Dipterocarp Forest which has not been logged before, thus the area contains high volume and value of merchantable timber resources. The dominant commercial tree families include Dipterocarpaceae, Fagaceae, Apocynaceae, Euphorbiaceae and Lauraceae. • Two areas in FMU 24 are identified as Project Area under Conservation Environment Management Division (CEMD) - RIL 2 Project Area and SUAS Project Area; and 4 areas as conservation area - VJR Batu Timbang, VJR Ulu Sg. Napagon, VJR Nurod Urod and water catchment area (2,160 ha); as well as two areas identified for tourism - Tourism Area under CEMD (250 ha) and Wellness/ Eco - Tourism Project Area (1,200 ha). • An Environmental Impact Assessment of Proposed Integrated Mosaic Planting on 1,329.46 hectares in Yayasan Sabah Concession Area (YT05/04), within Part of Gunung Rara and Kalabakan Forest Reserve, Tongod, and Tawau District, Sabah was prepared and approved on 11th November 2016 (Ref.#: JPAS/PP/21/600-1/01/3/59 (34)). Social Context: • There are no communities settling inside or adjacent to the project area within FMU 24. The nearest village to FMU 24 is Kg. Kemandut, which is located at Luasong. Scope of Assessment • The scope of the evaluation is to verify compliance of Rakyat Berjaya Sdn. Bhd. (Asiatic Organic Farm Sdn. Bhd.) with the Sabah Forest Management License Agreement (SFMLA 09/97) for FMU 24. • The assessment is in accordance on the terms of the agreement for the “Sabah Legality Standard Principles 1 - 4 dated 01st January 2015 (FDS-TLAS-002). • Site evaluation to verify and report the level of compliance by Rakyat Berjaya Sdn. Bhd. and contractors to the standard in respect to each of the criteria within this report. • Compliance is defined when the auditee demonstrates that the indicators consist of none or only minor gaps against any applicable criteria of the standard. Non-compliance to the Sabah Legality Standard occurs when the auditee does not demonstrate adequate compliance to a criterion. Itinerary & Mandays: FMU 24 / Rakyat Berjaya Sdn. Bhd. (Asiatic Organic Farm Sdn. Bhd.) / Kalabakan District 07 – 11 October 2019 (Total Mandays = 17) Date Activity GFS Staff Mandays 07 October 2019 Priera Bagang, Travel to Tawau 2 Monday Walter Marcus Opening meeting at Asiatic base camp 08 October 2019 Priera Bagang, and field visit to Coupe TWU 02/17 & 2 Tuesday Walter Marcus TWU 09/14. 09 October 2019 Document review at Asiatic’s base camp Priera Bagang, 2 Wednesday and Kalabakan Forestry office. Walter Marcus 10 October 2019 Document review and closing meeting at Priera Bagang, Walter 2 Thursday Asiatic’s office Tawau. Marcus 11 October 2019 Priera Bagang, Travel to Kota Kinabalu 2 Friday Walter Marcus 12 – 13 October Dr. Kevin Grace, 2019 Reporting GFSSBH 003-051 2 Priera Bagang Total 12 3 FDS-TLAS-006 Highlights of Assessment (Major Gaps = 7; Minor Gaps = 2; Observations = 1) Rakyat Berjaya Sdn. Bhd. (Asiatic Organic Farm Sdn. Bhd.) has not complied with the Sabah Legality Standard (FDS-TLAS-002) as non-compliance was identified for criteria 1.5, 1.7, 2.1, 2.2, 1.9, 2.6, 3.1 during the assessment on 07 – 11 October 2019. Summary of status of operations by Principle: Principle 1. October 2018: Gap 004/2018 (Minor) - Checklist 1.4.2.2, 1.4.2.8, 1.9.1 Conflicting statements in forest quality from 3.4 commercial trees /ha (>60cm) (Strata IV) versus inventory summary data presented in Table 3.1 that documents commercial tree volumes of 78.32 m3/ha that reflects over 12 trees/ha (Strata II) which should not be eligible for mosaic system based on current draft mosaic guidelines. October 2019: Gap 004/2018 (Minor) - Closed The inventory summary for trees 60-120cm DBH resulted in 2.6 trees/ha which reflect the forest strata IV.
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