RSPO Public Summary Report Template

Roundtable on Sustainable Palm Oil Public Summary Report Report no. : RSPO P&C – IC 19113 against the RSPO Prin- 2013 INA-NI, 2016 NG-NI, 2017 Generic, 2018 ciples & Cri- 2018 MY-NI, 2015 GH-NI, 2015 teria RSPO Supply Chain Certification Standard, 2014 (Rev. June 2017) Group Certification of FFB Production 2016 Rev.2018 RSPO Supply Chain Certification Standard, 2014 (Rev. June 2017)

PT Dharma Satya Nusantara Palm Oil Mill 6 East Kutai District, East Kalimantan

Date of assessment : September 02 to 06, 2019

Report prepared by: Dian S Soeminta (RSPO Lead Auditor)

Certification decision by: I Nyoman Susila (Director of TUV Rheinland Indonesia)

Certification Body: PT TUV Rheinland Indonesia Menara Karya, 10th 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

Accreditatation number : ASI-ACC-061 & 06 June 2024

TABLE OF CONTENTS 1.0 SCOPE OF CERTIFICATION ASSESSMENT...... 3 2.0. DESCRIPTION OF CERTIFIATION UNIT ...... 3 2.1 Location ...... 3 2.2. Maps ...... 3 2.3. Supply Base Composition ...... 5 2.4 Area of Plantation (Total, Planted and Mature) ...... 6 2.5 Dates of Plantings and Replanting Cycles ...... 6 2.6 Volume of CPO and PK recommended for Certification ...... 7 2.7 Organisational Information / Contact Person ...... 7 3.0 ASSESSMENT PROCESS ...... 8 3.1 Qualifications of Lead Assessor and Assessment Team ...... 8 3.2. Assessment Agenda ...... 10 3.3 Assessment Methodology ...... 11 4.0 Stakeholder Consultation and Stakeholders Contacted ...... 12

5.0 Compliance to Other RSPO Requirement...... 12 5.1. Time Bound Plan for Other Management Units ...... 12 5.2. Compliance to Rules for Partial Certification ...... 13 5.3. Compliance to other RSPO Procedure ...... 14 5.4. Compliance to RSPO Guidance on GHG calculation ...... 15 5.5 Plan for certification of associated smallholders...... 18 6.0 ASSESSMENT FINDINGS ...... 19 6.1 Summary of Findings ...... 19 6.2. Compliance to RSPO Role of Market Communications & Claims : ...... 57 6.3. Compliance to Book & Claim requirement : ...... 58 7.0 Status of Previously Identified Non-Conformities ...... 59 8.0 Identified Non-conformances, Corrective Actions Taken and Auditors Conclusions ...... 59 9.0 Noteworthy Positive Components and Potential for Improvement ...... 64 10.0 Issues Raised by Stakeholders and Findings Pertaining to Issues ...... 64 11.0 Certification Decision ...... 68 11.1 Recommendation for Certification ...... 68 11.2 Date of Certificate Issued and Scope of Certificate ...... 68 11.3 Date of Next Surveillance Visit ...... 68 12.0 Acknowledgements of Internal Responsibility and Formal Sign-Off by Client ...... 69

APPENDICES ...... 70 Appendix 1: Details of Certificate ...... 70 Appendix 2: Certification Audit Plan ...... 72 Appendix 3: List of Abbreviations ...... 73 Appendix 4: Other Achievement s and Certificatio Helds ...... 83 Appendix 5: Audit Checklist ...... 84 Appendix 6 : List of Stakeholders Interviewed and Contacted ...... 85 Appendix 7 : Organization’s land History and information about all previous users of the land...... 88 Appendix 8 : Requirement on Book & Claim ...... 91

RSPO Certification Assessment Report - PT Dharma Satya Nusantara Palm Oil Mill 6 –

East Kalimantan Indonesia

Page 3 of 91 1.0 SCOPE OF CERTIFICATION ASSESSMENT.

The initial certification assessment was carried out on one mill under PT Dharma Satya Nusantara and 4 estates under PT Dewata Sawit Nusantara owned by PT Dharma Satya Nusantara, Tbk. The operations of the palm oil mill(s) and its supply base of FFB were assessed against the Indonesia National Interpretion year 2016 of the RSPO Principles & Criteria, selected Supply Chain Model according to company’s FFB supply base is MB

Mill name & palmtrace mem- Mill 1 : PT DSN POM 6 / RSPO_PO1000008654. ber ID Supply base name

Company owned Estate: PT Dewata Sawit Nusantara (PT DWT) 1. Melenyu 1 2. Melenyu 2 3. Melenyu 3 4. Melenyu 4 Other operating estate owned by 1. PT Dharma Agrotama Nusantara (DAN) Company 2. PT Dharma Intisawit Nugraha (DIN) Other Source 1. Smallholder Patnership Program(Kemitraan) Supply Chain Model IP MB Mill Capacity (tonnes/hour) Mill 1 60 Mill 2 - National Intepretation used INA NI year 2016

2.0. DESCRIPTION OF CERTIFIATION UNIT

2.1 Location Table 1: GPS locations for all estates and mills included in certification assessment

Name of mill and es- GPS locations Location tate/SH/outgrower Latitude (N / S) Longitude (E / W) PT DSN POM 6 Benhes, Deabeq, Diak Lay 1o 16’ 52,8” N 116o 47’ 00,5” E

Village; Muara Wahau Sub o o PT DWT- Melenyu 1 District, Kutai Timur District, 1 15’ 42,2” N 116 52’ 50,4” E PT DWT- Melenyu 2 East Kalimantan Province 1o 17’ 22,6” N 116o 46’ 17,5” E

PT DWT- Melenyu 3 1o 16’ 59,6” N 116o 43’ 21,9” E PT DWT – Melenyu 4 1o 19’ 33,5” N 116o 49’ 59,6” E

2.2. Maps

PT DSN Palm Oil Mil and PT DWT estates is administratively located in Desa Muara Wahau village, Kecama- tan Muara Wahau, Kutai Timur District, East Kalimantan Province, Indonesia. Geographically the mill and estates are located as mentioned on the table below:

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PT DSN POM 6

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2.3. Supply Base Composition

Table 2: FFB Supply Base Composition for PT DSN POM 6, year 2018 and year 2019 (August 2019)

FFB supplied in 2019 (Until Au- FFB supplied in 2018 gust 2019) FFB Contributor

Tonnes % Tonnes %

Certified Company’s Supply based included on certification scope PT Dewata Sawit Nusantara Melenyu 1 82,330.75 25.56 49,959.42 26.65

Melenyu 2 90,826.47 28.20 48,865.77 26.06

Melenyu 3 91,061.59 28.27 47,629.37 25.40 Melenyu 4 729.61 0.23 4,148.52 2.21 Sub Total 264,948.42 82.25 150,603.08 80.33 Others Company’s owned certified estate 7,182,080 PT DAN 9,274.04 2.88 3.83 PT DIN 44,388.00 13.78 28,219,180 15.05

53,662.04 16.66 35,401,260 18.88

Uncertified Non Certified Smallholders 3,523.85 1.09 1,486.56 0.79 (Kemitraan/KMT) 7 & 17

GRAND TOTAL 322,134.31 100 187,490.90 100

Table 3: CPO and PK production and sold from period year 2018 And projected for year 2019-2020. Amount (tonnes) Remarks FFB CPO PK Certified tonnage (license From PT Dewata Sawit Nusantara 293,929.35 72,307.00 12,933.00 periode next 12 month) Actual Production for year 2018 Actual OER and KER (%) 24.39 4.11 Total production*) 322,508.50 78,659.86 13,255.10 Total non-certified production 322,508.50 78,659.86 13,255.10 Total certified production 0.00 0.00 0.00 Actual Sold**) Actual sold volume under RSPO scheme n.a n.a n.a Actual sold volume under other scheme certified n.a n.a n.a Actual sold conventional 76,232.71 13,120.77 New (Projectied) Production year 2019 & 2020 (based on Annual Plan year 2019-2020) OER and KER projection (%) n.a 24.60 4.40 Total production 333,108.01 81,944.57 14,656.75 Total non-certified & certified production***) 39,178.66 9,637.95 1,723.86 From Certified Estate (PT Dewata Sawit 293,929.35 72,307.00 12,933.00 Total certified produc- Nusantara) tion (RSPO Scheme) From Other companies certified estate 0.00 0.00 0.00 Total certified production 293,929.35 72,307.00 12,933.00 Sources: Monthly Recapitulation report year 2018 & 2019 (until August 2019) Note : *). - Carry over FFB from December year 2017 is 620.655 mt, the rest FFB in December 2018 carried over to January 2019 is 246.458 mt. - Total CPO production year 2018 is total FFB incoming year 2018 plus carry over of FFB on December 2017 minus carried over of FFB to January 2019 times OER i.e. (322,134.31 mt + 620.655 mt – 246.458 mt) X 0.2439 = 78,659.82 mt. - Stock CPO from year 2017 186.627 mt and stock PK from year 2017 is 75.174 mt.

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**). For initial assessment the mill still not claim their product sold as RSPO ***). FFB receipt from scheme smallholder as non-certified (6,319.66 mt) and PT DIN & PT DAN as certified (32,859 mt)

2.4 Area of Plantation (Total, Planted and Mature) Table 4 : Oil Palm Planted Area Summary, FFB Production and Average yield/ha for PT Dewata Sawit Nusantara for year 2018 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) Melenyu 1 3,641.10 3,051 3,051 83,098 27.23 Melenyu 2 3,469.61 3,091 3,061 30 91,050 29,45 Melenyu 3 3,812.54 3,035 3,035 91,747 30.22 Melenyu 4 2,706.25 1,022 1,022 21,661 21.19 TOTAL 13,629.50 10,199 10,169 30 287,556 28.27 Note : *). Volume of FFB production according to estate information. Due to distance reason not all FFB from Melenyu 4 were send to PTDSN POM 6, some of the FFB from ME4 were sent to other POM belong to PT DSN.

2.5 Dates of Plantings and Replanting Cycles The company follows a replanting cycle of 25 years. Information on the dates of plantings are as per the table below :

Table 5. : Age and year of plantings of company estate supplying to PT DSN POM 6 until August year 2019 Age & Year of Plant- Oil palm planted area at each estate(ha) in PT Dewata Sawit Nusantara ings Melenyu (ME)-1 Melenyu (ME)-2 Melenyu (ME)-3 Melenyu (ME)-4 4 /2015 - 30 - - 5 /2014 145 62 66 13 6/2013 415 100 - 1009 7/2012 487 23 - - 8/2011 893 139 292 - 9/2010 384 - 1585 - 10/2009 727 1634 785 - 11/2008 - 1044 307 - 12/2007 - 59 - - TOTAL 3051 3091 3035 1022

Table 6.a : Land use data for PT Dewata Sawit Nusantara year 2019 HCV/ Land used for other purposes (ha) Local Gov- Total Oil Palm Poten- Estate tial ernment of- Land area Planted Rivarian Other Name HCV fice, Road, Mill occu- (ha) Area (ha) River Land areas* Housing, pied (ha) Drain, POM Melenyu 1 3,641.10 3,051 63 94 - 272.31 157.32 3.47 Melenyu 2 3,469.61 3,091 - 107 24 193.61 - 54.00 Melenyu 3 3,812.54 3,035 257 81.7 - 401.84 - 37.00 Melenyu 4 2,706.25 1,022 1465 57.25 - 162.00 - - TOTAL 13,629.50 10,199 1,785 339.95 24 1029.76 157.32 239.47

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Replanting Plan. The company has not planned yet for replanting activities considering the current plantation age were categoried as young plantataion.

2.6 Volume of CPO and PK recommended for Certification The approximate tonnages certified, based projection of production in year 2019-2020, are as follows : FFB : 293,929.35 tonnes Crude Palm Oil (CPO) : 72,307 MT Palm Kernel (PK) : 12,933 MT OER : 24.6% KER : 4.4 %

2.7 Organisational Information / Contact Person Contacts details of the company are as follows: Company Name: PT Dharma Satya Nusantara Palm Oil Mill 6 RSPO Membership no. 1-0135-12-000-00 on behalf PT Dharma Satya Nusantara, Tbk since date on December 04, 2012 Address: Head office : Gedung Sapta Mulia Jl. Rawa Gelam V Kav. OR/3B Kawasan Industri Pulogadung; Jakarta 13930

Indonesia

Plantation & POM : Desa Benhes, Dabeq, Diak Lay,Kecamatan Muara Wahau, Kabupaten Kutai Timur, Propinsi Kalimantan Timur, Indonesia.

Contact Person: Mr. Agustinus Triwibowo

Telephone: Tel: +62-21-4618135/ Fax : +62-21-4606942 Email: [email protected]

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3.0 ASSESSMENT PROCESS 3.1 Qualifications of Lead Assessor and Assessment Team

Name Position Qualifications / Experience

Education: Bachelors Degree in Forestry - Bogor Agriculture Insti- tute. Indonesia, (1990 to 1995). Trainings attended: ISO 9001:2000 lead assessor course 1996 - Neville Clark; ISO 14001 lead assessor course - PE International; OSHAS: 2007 training, Sustainable Forest Management (SFM) - Forest Stewardship Council (FSC) system training; Chain of Cus- tody training for FSC System. RSPO lead Auditor training year 2010 by Pro Forest and Wild Asia. SCCS training by David Ogg Consulting. ISPO Lead Auditor training Working experience: Professional forester since 1995 to 2000. Lead Auditor for Forest Stewardship Council (FSC), Sustainable Dian S Soeminta Lead Auditor Forest Certification (SFC) and Chain of Custody (COC) Certifica- tion. Lead auditor for Environmental Management System (EMS) and Quality Management System (QMS) audits. Conducted sustainable forest management certification audits on FSC and Indo- nesian Ecolabel Institute (Lembaga Ecolabel Indonesia - LEI) standards for 20 companies, 50 COC FSC/LEI audits, and EMS and QMS audits at more than hundred companies for TUV Rhein- land Indonesia. Instrumental in the preparation of TUV Rheinland Indonesia for Sustainable Forest Management Certification System and TUV Rheinland Malaysia for RSPO Certification. Member of Task Force for Indonesian National Interpretation (Guidance on scheme smallholder RSPO certification). Developed TUV Rhein- land RSPO acceditation process and report template. Education: Master Degree in Natural Reseource and Environmental Management, Bogor Agriculture University Trainings attended: Environmental Impact Assessment (EIA), Ecolog- ical Risk Assessment (ERA), Internal Quality Audit Training for Quality Management System, IRQA-QMS ISO 9001:2000, IRQA-EMS 14001, High Conservation Value (HCV), RSPO Lead Auditor Course, ISPO Au- ditor Course, SCCS Auditor, ISCC plantation audit, ISCC Auditor and LVV Auditor for ISO 14063 and 14064, ISO SNI 37001, and ISCC GHG M. Fundy Cholis K Auditor Auditor. Working experience: Experienced in Environmental Impact Assess- ment (EIA Assessment), Environmental Health Safety Senior Officer (EHS-Senior Officer) in Wilmar International Plantation, Internal Audi- tor for Wilmar International Plantation, and Auditor for Rountable on Sustainable Palm Oil (RSPO), Indonesian Sustainable Palm Oil (ISPO), International Sustainability Carbon Certification (ISCC) and ISCC GHG Verificator in PT TUV Rheinland Indonesia since June 2012 – present. Education: Masters Degree in Agricultural Economics - Bogor Ag- riculture University, Indonesia. Trainings attended: Indonesian Sustainable Palm Oil (ISPO) Lead Auditor Course by ISPO Commission; Quality Management Sys- tem (QMS) Auditor/Lead Auditor by Sucofindo/IRCA (ISO 9001:2008); Environmental Management Systems Auditor/Lead Nurul Qomaria Auditor Auditor Conversion Training by AJA Academy/IRCA (ISO 14001:2004); ISCC Training; RSPO P&C Training. Work experience: Biology Teacher in Ciputra School (2000 – 2001), Research Assistant in PT Prima Kelola Agribisnis Agroin- dustri Bogor (2001 – 2002), Administration Staff in PT Citrabuana Indoloka Jakarta (2002 – 2003), Lecturer Assistant in Department of Resources and Environmental Economics of Bogor Agricultural

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University (2008 – 2011), Personal Assistant of Water and Sanita- tion Consultant Bogor (2011 – 2015), Freelance ISPO Auditor and Researcher (2014 – 2015), ISCC/ISPO/RSPO Auditor/ Lead Audi- tor in PT SGS Indonesia (2015 – 2019) and Auditor in PT TUV Rheinland Indonesia (2019 – present) Education: Master in Rural Sociology, Graduate School of Bogor Agricultural University com-pleted in 2005. Training attended: GIS Training, Auditor Training of Indonesian Sustainable Palm Oil (ISPO), Training of Participatory Mapping, Training of Doc-ument Preparation HCV and SIA, Auditor Training of Sustaina-ble Produc- tion Forest Management (SFM), Training and Up-Grading of SFM, Training of Mentoring technique for the Rural Farmers, Conflict Resolution Training and Journalism Training; RSPO P&C Training. Working experience: Doni Mardoni Auditor Frequently conducted certification audits of RSPO and ISPO for Palm plantation, the certification audit of SFM (Sustainable Pro- duction Forest Management) for HPH and HTI, worked as a consultant for the National Development Planning Agency, Min-istry of Environment and Forestry, Indonesian People Bank (BRI), Ministry of Rural Development (KPDT) and the Ministry of Public Works, Di- rector General of Cipta Karya, JICA and UN-HABITAT and UNDP, HCVF document drafting team for the company of HTI, HPH and constituent team for documents of HCV / SIA for oil palm plantations. Since March 2016 till now, work at PT. TUV Rheinland Indo- nesia.

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3.2. Assessment Agenda Location/ Team Date Main activities Main sites 02 Sep- Samarinda Fundy & Visit to Agriculture depatement East Kalimantan , National Land Agency tember Doni East Kalimantan Province 2019 Labour Official Local Government of East Kalimantan province. Sptial Plan and Land Development of Kutai Timur distric Dian & Nu- Traveling to DSN site rul 03 Sep- Kantor Be- All team Opening Meeting tember sar Bersama Legal land, Transparancy, 2019 GHG Calculation Partial Certification Transparancy Environmental management and monitoring 04 Sep- Melenyu 2 Dian & Nu- Best Agriculture Practice tember rul OSH policy standard operation procedure and Company’s OSH Policy Im- 08-12.00 plementation Environmental management System Management and Monitoring an Im- plementation Melenyu 3 Fundy & Best Agriculture Practice Dony OSH policy standard operation procedure and Interview with villager 14.00- Muara All team Public consultation with local Communicties& Clarification to local communi- 17.00 Wahau ties regarding previous landownership. Dian Good Manufacture Practice GHG Calculation Dian Supply Chain Certification Dony - Worker facilities, medical facilities at Sei MerantiMill - Environmental document and implementation reports, environmental objectives, targets and improvement plan, greenhouse gas calculation sheet, renewable energy efficiency analysis document) - Training (boiler operator training certificates and li-censes) - Consultation with local community supplier

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Location/ Team Date Main activities Main sites 05 Sep- Melenyu 4 Dian & Environmental, agrochemical, OHS, compliance regulation issues tember Dony Legal land, management plan, best practices, HCV issues 2019 Melenyu 1 Fundy & Social and employees Nurul Good Agricultural OHS system (accident records, recommendation letters for transfer of work for workers found with high blood cholinesterase levels and pregnant female sprayers, evidence of transfer to other work for aforementioned workers, OSH policy, OSH committee letter of approval from the Manpower Depart- ment). Waste ( medical waste disposal records) Legal requirement register Insurance of worker (Jamsostek) payment records for temporary workers Verification of previous land owner

06 Sep- DSN 6 Mill Fundy - OSH policy standard operation procedure and tember Nurul - Incoming FFB verification (security post, loading ramp) 2019 - Interview with mill workers (boiler supervisor). - Waste management (hazardous waste store, palm oil mill effluent treatment ponds, mill license for temporary hazardous waste storage, license for land application, land application records) - Pollution prevention control - Water management - OSH system (fire simulation records, medical check reports for year 2018- 2019) - Warehouse (mill compound, chemical store) Dian Good Manufacture Practice GHG Calculation Dian Supply Chain Certification Dony - Worker facilities, medical facilities at Sei MerantiMill - Environmental document and implementation reports, environmental objectives, targets and improvement plan, greenhouse gas calculation sheet, renewable energy efficiency analysis document) - Training (boiler operator training certificates and li-censes) - Consultation with local community supplier All team Preparation for closing meeting Closing meeting End of intial certification audit. September Traveling to Jakarta. 07, 2019

3.3 Assessment Methodology

The certification assessment was conducted between September 02 to 06, 2019 as per the assessment program above. The assessment was carried out in accordance with PT TUV Rheinland Indonesia’s RSPO audit procedure as well as the RSPO Certification Systems document. During assessment, the qualified TUV Rhein- land 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 possible to carry out both field and document assessments of all estates and the mill within the time frame without com- promising the integrity of the assessment in anyway. All four (4) estates and one 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 no more than 60 days after the closing meeting. Verification of closure of major non- conformances was conducted 2 months after the closing meeting of the main assessment and implementation of corrective actions for minor non-conformities will be verified during the next suriveillance audit. The certification assessment agenda is as explained above.

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Page 12 of 91 4.0 Stakeholder Consultation and Stakeholders Contacted

PT TUV Rheinland Indonesia has announce to all respective stakeholders in PT TUV Rheinland Indonesia eb- site, RSPO website and client website one month prior to certification audit start i.e. on July 25, 2019, to The stakeholder consultation involved both external and internal stakeholders. External stakeholders were notified to make comments on the certification assessment by placing an invitation to comment on the RSPO website. Stakeholders included those immediately linked with the operation of the company such employees, outgrow- ers, the local government, NGO’s, trade and labour unions and local communities. Stakeholder consultation took place in the form of meetings and interviews. Meetings with stakeholders were held to seek their views on the performance of the company with respect to the sustainability practices outlined in the RSPO Principles & Criteria, and to comment on aspects where improvements could be made. Meetings with local communities were held at their respective premises within and near the company’s area. A stakeholder consultation meeting was also held on Wahau Village on September 03, 2019. Letters inviting individual stakeholders to the stakeholder consultation meeting were prepared and sent to the individual stakeholders, while electronic mail and telephone calls were made to arrange the meetings. In all the interviews and meeting, the objectives of the RSPO and the purpose of the assessment was clarified at the outset followed by an evaluation of the relationship between the stakeholders and the company before discussion proceeded to obtain the stakeholders feedback on the company’s compliance to different aspects of the RSPO Principles & Criteria. Although several stakeholders were not familiar with RSPO but they agreed with its objective and expressed their willingness to collaborate in the promotion of sustainable palm oil in East Kalimantan province. In all interviews and meeting, the assessment team did not restrict discussion of both the positive and negative aspects of operations conducted by PT Dewata Sawit Nusantara estates and PT Dharma Satya Nusantara mill. The stakeholder consultation meeting held with stakeholders during the audit was extensive and productive, with an attendance of more than 29 of attendees. This was followed by site inspections, including visits to the local communities, interviews with land claimants and contractors, and inspections of worker amenities and infrastructure. All stakeholder issues raised were recorded and forwarded to the management for their written re- ponse, and this is summarized in section 10. The list of stakeholders that attended the stakeholder consultation meeting and stakeholders interviewed during the assessment is included as (Appendix 4).

5.0 Compliance to Other RSPO Requirement

5.1. Time Bound Plan for Other Management Units The time frame laid out below is considered to be both challenging and realistic. The audit team is satisfied that the company conforms with the RSPO requirements for partial certification as laid out in Clause 4.5 of the RSPO Certification Systems document.

Tabel 8: Time Bound Plan of PT Dharma Satya Nusantara, Tbk.

Time bound Name of Holding Location plan for Status certification PT Swakarsa Sinarsentosa

(POM 1) Jabdan 2 estate East Kalimantan 2012 Certified Smallholder (KM 5, KM 9) East Kalimantan 2015 Certified Smallholder (KM 3, KM 6, KM East Kalimantan 2017 Certified 11, KM 12) PT Dharma Satya Nusantara

(POM 2) PT Dharma Agrotama Nusan- East Kalimantan 2013 Certified tara PT Dharma Satya Nusantara

(POM 3) PT Dharma Intisawit Nugraha East Kalimantan 2013 Certified

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PT Dharma Satya Nusantara

(POM 4) PT Swakarsa Sinarsentosa East Kalimantan 2015 Certified (JB 1, LJ 1, LJ 2) Smallholder East Kalimantan 2019 Planned PT Dharma Satya Nusantara

(POM 5) PT Pilar Wanapersada Central Kalimantan 2020 Planned Smallholder Central Kalimantan 2021 Planned PT Dharma Satya Nusantara

(POM 6) PT Dewata Sawit Nusantara East Kalimantan 2019 Planned Smallholder East Kalimantan 2021 Planned PT Dharma Intisawit Lestari East Kalimantan 2020 Planned PT Karya Prima Agro Se- East Kalimantan 2020 Planned jahtera Smallholder East Kalimantan 2023 Planned PT Putra Utama Lestari East Kalimantan 2020 Planned PT Agro Andalan West Kalimantan 2020 Planned Smallholder West Kalimantan 2022 Planned PT Kencana Alam Permai West Kalimantan 2020 Planned Smallholder West Kalimantan 2023 Planned PT Prima Sawit Andalan West Kalimantan 2020 Planned Smallholder West Kalimantan 2023 Planned PT Dharma Persada Se- West Kalimantan 2020 Planned jahtera Smallholder West Kalimantan 2023 Planned

5.2. Compliance to Rules for Partial Certification Compliance of the uncertified management units of PT Dharma Satya Nusantara against the rules for partial certification according to RSPO Certification System clause 4.5 was assessed by desk study as well as web check on relevant complaints; verification to company’s parent company, a positive assurance statement based upon company’s self assessment completed with sufficient evidence against each requirement; consultation with targeted stakeholders including consultation with the relevant NGO’s, and or further stakeholder consultation and or field inspection considering the risk assessment result of any non compliance with the requirements. A summary of findings is as stated below. Partial Certification Requirements Audit Findings (a) The parent organization or one of its majority PT DSN POM 6 and PT Dewata Sawit Nusantara is owned and / or managed subsidiaries is a member subsidiary of PT Dharma Satya Nusantara has RSPO of RSPO. member with membership number No: 1-0135-12- 000-00 (b-d) A challenging time-bound plan for certifying all PT DSN POM 6 and PT Dewata Sawit Nusantara has its relevant entities is submitted to the Certification a time-bound plan to achieve RSPO certification for all Body (CB) during the first certification audit. The relevant entities. time-bound plan should contain a list of subsidiaries, estates and mills. A challenging time bound plan has been establish signed on January 8, 2018. Any revision to the time-bound plan or to the cir-

cumstances of the company shall cause the plan to be reviewed. for whether it is still appropriate, such that changes to the time-bound plan are permitted

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only where the organisation can demonstrate that they are justified (e) No replacement of primary forest or any area There are some newly developed plantation areas identified as containing High Conservation Values under PT Agro Andalan (AAN), PT. Dharma Persada (HCVs) or required to maintain or enhance HCVs in Sejahtera (DPS), PT. Kencana Alam Permai (KAP), accordance with RSPO criterion 7.3. Any new plant- PT. Prima Sawit Andalan (PSA), PT Dewata Sawit ings since January 1st 2010 must comply with the Nusantara (DWT), PT. Dharma Intisawit Lestari (DIL), RSPO New Plantings Procedure PT. Karya Prima Agro Sejahtera (KPS), PT. Putra Utama Lestari (PUL) and PT. Pilar Wanapersada (PWP). The entire company has conduct HCV assessment and conduct land use changes analisis (LUCA). Current condition still in processing and reviewing from RSPO (f) Land conflicts, if any, are being resolved through There is no land conflict a mutually agreed process, e.g. RSPO Complaint System or Dispute Settlement Facility, in accordance with RSPO criteria 2.2, 6.4, 7.5 and 7.6. (g) Labour disputes, if any, are being resolved There is no labour disputes through a mutually agreed process, in accordance with RSPO criterion 6.3. (h) Legal non-compliance, if any, are being resolved During recertification audit, there is found legal non- in accordance with the legal requirements, with ref- compliance related license of first aid officer at PT erence to RSPO criteria 2.1. DSN POM 6 and PT Dewata Sawit Nusantara

5.3. Compliance to other RSPO Procedure

RSPO NPP There is 5643 ha planted area after year 2010 in PT Dewata Sawit Nusantara. The HCV and SIA analysis were conducted in Jan- uary 2012 by RSPO Accredited Assessors from Daemeter and the AMDAL/EIA document was approved by the Environmental officer of Kutai Timur District on April 24, 2009 No.462/660.1/2.1/LH/IV/2009. PT Dewata Sawit Nusantara has adhered to RSPO New Planting Procedures and has documented the assessments and plans according to the RSPO templates issued in May, 2010. TUV Reinland auditors’ conducted desk study and verified all the related documents since 13& 14 August 2012. RSPO Compensation and Remediation pro- PT Dewata Sawit Nusantara as supply based es- cedure tates for POM 6 PT DSN has conducted land used change analisys by Fakultas Kehutanan Institute Pertanian Bogor, with method Remote sensing and spatial analysis, groundtruthing, in-depth interview and document review for total area of management unit (ha) 13,570.47 ha, date when data completely was received 23 April 2015. The LUC Analysis was verified by RSPO and the result was issued by RSPO on August 15, 2016. Following the result issued by RSPO, reviewer accepted the analysis made by the Company. Nontheless, calculation by the Company is higher as compared to reviewer’s calculation in terms of total area. It has to be noted that, Thicket (belukar) was categorized as vegeta-

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tion coefficient 0 by the company and was agreed by the reviewer based on explanation given by the Company. Based onthis review, total area of raw liability for the Company is 1,073.6 ha with conservation liability of 28.26 ha, for land cleared between December 1, 2007 and December 31, 2009, Social remediation and/or compensation. Environmental remediation. Half the sum of all areas cleared for corporate purposes without prior HCV assessment multiplied by their vegetation coefficient(s) in Nov 2005. This conservation liability will be compensated collectively across management units through off-site compensation activities using a hectare to dollar basis. The company selects the aforementioned options for compensation activities, because of the potential to put the funds related to the liability to work over a larger area and maximize the biodiversity and social gains of the compensation effort. Together with other company’s The total net conservation liability for three management units (PT. DAN, PT. DIL, and PT. DWT) of PT. DSN is 156.24 ha or equal to USD 390,600. The proposed compensation activities is off-site avoided planned deforestation of tropical lowland forest in Laman Satong Village forest, West Kalimantan, Indonesia . Laman Satong Vilage Forest (1,070 ha) lies between Gunung Palung National Park and Gunung Tarak (watershed) protection forest to the northwest and palm plantation and mining concessions to the Southeast. The description of company’s compensation plan was observed on the concept notes that was sent to RSPO for the approval. Until the time of intitial certification audit, the compensation plan is not approved yet, the Compensation Panel has given conditional agreement that the certification can proceed (due to the delay incurred by the evaluator). However, the company will need to ensure that the compensation plan is approved by the next surveillance audit or the certificate will be suspended, as mentioned by email from RSPO on April 19, 2019. This email was checked by TUV Rheiland auditor and confirmed to RSPO prior to initial audit tnrough email on July 11, 2019.

Areal Subject to sanction As mentioned above PT Dewata Sawit Nusantara has, total area of raw liability for the Company is 1,073.6 ha with conservation liability of 28.26 ha. No areal subject to saction because the company has conducted NPP and on waiting for compensation plan approval.

5.4. Compliance to RSPO Guidance on GHG calculation During the audit, the audit team verify and confirm that

i. The RSPO PalmGHG Calculator used Version 3.01

Accurate data has been put into the RSPO Yes, after company make correction for the NCR

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Page 16 of 91 PalmGHG Calculator RSPO02742. During initial audit there was a discrepancy between the recapitulation of fertilizer used and information on total fertilizers consumption in the GHG calculation for example: NPK 13 in the recap of use of 11872.75 tons and GHG calculation data of 10.980.11 tons, as well as Borat and MOP fertiliz-ers

Net GHG Emission Figure (tCO2e/tCPO) 1.17

Summary of Net GHG Emission

A. Emissions Per Product tCO2e/t Product CPO 1.17 PK 1.17 B. Extraction % OER 24.39 KER 4.11 C. Production t/yr FFB processed 322,508.50 CPO Produced 78,659.82 PK Produced 13,255.10 D. Land Use ha Oil Palm Planted area 10,199 Oil Palm Planted on peat 0 Conservation (Forested) 1,785 Conservation (non-forested) 0 Total

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Summary of Field Emissions and Sinks Own Crop Group 3rd party Emission tCO2e tCO2e/ha tCO2e/tFFB tCO2e tCO2e/ha tCO2e/tFFB tCO2e tCO2e/ha tCO2e/tFFB Land Conversion 75232.67 6.02 0.21 1432.11 6.85 0.41 0 0 0 CO Emission 2 35420.14 33 0.12 604.64 2.98 0.18 0 0 0 from Fertilizer

N2O Emissions 29889.74 2.69 0.09 487.59 2.4 0.14 0 0 0 Fuel Consumption 3819.33 0.28 0.01 37.4 0.14 0.01 0 0 0 Peat Oxidation 0 0 0 0 0 0 0 0 0 Sinks Crop Sequestra- -101787.57 -9.36 -0.33 -1905.98 -9.36 -0.56 0 0 0 tion Sequestration in -20.42 -0.05 0 0 0 0 0 0 0 Conservation area Total 42553.89 2.89 0.1 655.76 3.01 0.18 0 0 0

Summary of Mill Emissions and Credit

tCO2e tCO2e/tFFB Emissions Sources POME 63144 0.2 Fuel Consumption 998.47 0 Grid Electricity Utilization 0

Credit Export of Grid Electricity 0 0 Sale of POM 0 0 Sale of FFB 0 0 Total 64142.47 0.2

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Palm Oil Mill Effluent (POME) Treatment Divert to compost % Divert to anaeobic digestion 100 %

POME Diverted to Anaerobic Digestion Divert to Anaerobic Pond 100 % Divert to methane capture (flaring) 0 % Divert to Methane capture (Electricity Generation) 0 %

5.5 Plan for certification of associated smallholders As seen from data in Table 3, the mill receives1.09 % supply of FFB from smallholders, of which 100 of these are smallholders associated with the mill. The mill has developed a plan for certification of associated smallholders as mentioned on Planning of Smallholders toward to certification POM 6 PT DSN year 2019.

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6.0 ASSESSMENT FINDINGS 6.1 Summary of Findings

The following is a summary of findings made for the criteria listed in the RSPO Principles & Criteria year 2013 INA NI and year 2016 . 1. RSPO P & C

Criterion 1.1: Growers and millers provide adequate information to relevant stakeholders on environmental, social and legal issues relevant to RSPO Criteria, in appropriate languages & forms to allow for effective participation in decision making.

Findings: There is evidence that company provide adequate information on (environmental, social and/or legal) issues relevant to RSPO Criteria to relevant stakeholders for effective participation in decision making. The company established Communication and Consulttaion Proce- dure SOP-AGR-044-R01 valid from July 03, 2017. The procedure contain mechansim to re- Compli- ceive and response request of information from stakeholders in Head Office and estate mill ance sta- site. CRS department is reposible to handling all information requested. All request of infor- tus: mation are recorded on FM-STD-27-R00 format. During initial certification audit, the observe, Yes the log book is available at CSR office, there were found some incoming letter asking for do- No nation, as seen on letter from Miau Baru head of village dated August 05, 2019 they asking N.A for Indpenden day ceremony for the villlager. There is also evidence of response for that donation request that PT DWT provide donation with total value IDR 2 mllion. On April 4, 2019 NCR No : the Koperasi Semoga Usaha Sejahtera delivered the letter No. 278/KSU-SUTS/LB- NLB/IV/2019 regarding applications for sending FFB. Resolved with No. Letter 0009 / DWT / 04/2019 Records of requests for information and responses have been keep maintain and complete in CSR office for 5 years. Criterion 1.2: Management documents are publicly available, except where this is prevented by commercial confidentiality or where disclosure of information would result in negative environmental or social outcomes. Findings: Following information mentioned on SOP-AGR-044-R01, requests for information that can be fulfilled are data / information relating to environmental, social and legal issues. Except data / information / documents that are protected by commercial confidentiality and information / documents which when disclosed are precisely negative impact. At this time the list of documents which is publicly available i.e. :  Company’s visi and mission  Company’s policies  AMDAL /Plans and impact assessments document Compli-  Land titles (HGU) and company licenses ance sta-  Plantation maps tus:  Company’s regulation Yes  Organization structure No  Company’s three monthly report N.A  CRS activities report  Social confict resolution report NCR No :  Audit reports ISO/RSPO, HCVA, SIA etc.

 Occupational health and safety program

Stakeholders asking for specify documents above should complete Information requition Form(FM-STD-27-R01) including reason for requestion to be responsed by Legal/CSR operation departement. All request of information will be responsed within 4 working days after received. For information that need director decision, will be consulted to group head such as regional head or management head.

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Criterion 1.3. Grower and millers commit to ethical conduct in all business operations and transactions

Findings: Compli- The company has a written policy committing to a code of ethical conduct and integrity in all ance sta- operations and transactions, as stated on company’s quality manual and company has corpo- tus: rate value focus on integrity,the policy and corporate value has been communicated and dis- Yes tributed to all levels of the workforce and operations in every company’s event and meeting. No As evidence observed during opening meeting, and company’s socialization company’s quali- N.A ty manual and corporate etical code April 18, 2019 for all top management PT Dewata Sawit Nusantara, and for worker’s level on March 4 & 5, 2019, July 31, 2019. This policy also ap- NCR No : plied for all company’s trasaction with third parties, suppliers, and vendors. However from the RSPO027 auditor evaluation during audit, only 5 of 32 FFB vendors attended socialization this policy, 39 there is no evidence for other vendor /supplies or contractors, this is raise as Non Conformity. Criterion 2.1: There is compliance with all applicable local, national and ratified international laws and regulations. Findings: PT DSN POM 6 and DWT has evidence for law and regulations compliance, based on information below: 1. Permission to undertake plantation activities (IUP) based on Decree of Kutai Timur district No.500/206/EKO-1-X/2009 regarding permission to undertake plantation activisties for oil palm plantation development with total area ± 15,000 ha located in Muara Wahau sub-district, East Kutai disctrict, East Kalimantan province. Issued on 23 Oct 2009 in Sangatta. 2. Permission to undertake plantation activities for processing (IUP-P) palm oil mill based on Decree of Kutai Timur district No.188.4.45/177/Eko.1-X/2014 with palm oil mill capacity about 60 ton FFB/hours located in Muara Wahau sub-district, East Kutai disctrict, East Kalimantan province. Issued on 3 Oct 2014 in Sangatta. 3. License for operator who handle special enginee such as (heavy equip-ment, boiler, engine room, genset, sterilizer, and so on). There are 2 op-erator for genset operator; 4 welder operator; 3 operator for heavy equipment (wheel loader); and 4 boiler operator. All the license was in valid condition during the initial certification. 4. Permission building development issued by Head of Kutai Timur district, decree Compli- No.364/BP2T-2.1/X/2013 for palm oil mill development with total area 10,890 m2. This ance sta- permission issued on 29 Oct 2013 in Sangatta. tus: 5. Hazardous waste temporary storage permit (Estate) No. 660/K.543/2016 dated on 11 Ju- Yes ly 2016 issued by Head of Kutai Timur District valid until 5 years. No 6. Hazardous waste temporary storage permit (POM) No. 660/K.1044/2014 dated on 31 December 2014 issued by Head of Kutai Timur District valid until 5 years. N.A The company (POM and Estate) PT DSN and PT DWT has established procedure regarding law and regulation identification, with document No.SOP-AGR-024-R01, effective date NCR No : on 08 Sep 2014. The procedure clearly informed regard-ing: - The person/department incharge who responsible to carry out the law and regulation identification by Safet Health and Environment; Human Capital Development; Human Capital Operation; and Legal Department Head through contacting the related official govern-ment; website, news paper, workshop and other sources where available. - The distribution process of the list law and regulations carry out by Management Sys- tem Department to all related department. - Every six month (end of Jun and Dec) the Safet Health and Envi-ronment; Human Capital Development; Human Capital Operation; and Legal Department Head carry out the review and update to en-sure and check if any new law and regulation. - Every six month (end of Jun and Dec) the Safet Health and Envi-ronment; Human Capital Development; Human Capital Operation; and Legal Department Head carry out monitoring and evaluation against to law and regulations compliance. Based on list law and regulations, all the regulations including local, national and interna- tion law and regulation are listed in the law and regulations document, and documented by company. The laws and regulations consist of legal rights, environmental, conservation, waste management, occupational health ans safety, workers regulations and others. Rec-

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Page 21 of 91 ords of laws and regulations evaluation showed the palm oil mill and plantation are comply against to regulations. The laws and regulations copys also distributed to all department related. Internal audit is company’s mechanism for ensuring compliance to legal regulation and all applicable requirements. Record of internal audit to ensure the law and regulations compliance was in place. The latest internal audit done on: 1. Melenyu 1 estate was on 14-16 Mar 2019 2. Melenyu 2 estate was on 18-22 Mar 2019 3. Melenyu 3 estate was on 5-8 Mar 2019 4. Melenyu 4 estate was on 11-13 Mar 2019 5. POM-6 was on 14-16 Mar 2019 Based on internal audit result, found inconsistency regarding law and regulations compliance implementation. All the CAR’s record was inplace including the correction and corrective action with “closed” status by the internal auditor. Evidence of identification legal requirment presented in form Summary List of Laws and Regulations, No. Doc. FM-LGL-09-R00. The list of Law & Regulation covering OSH, labour, plantation, environmental. POM and Estates have copies of Summary List of Laws and Regulations. The company has legal departement that responsible to monitor any changes in the law and applicable regulations, it was mentioned on the SOP, Legal section in consult with respective section will periodically update to track the changes at least every 6 months through governement website as well as visit to governement institution. Criterion 2.2: The right to use the land is demonstrated, and is not legitimately contested by local people who can demonstrate that they have legal, customary or user rights. Findings: Compli- ance sta- The company has legal ownership to use the land based on Decree of Land National Agency tus: No. 84-HGU-BPN RI-2008 regarding land lease for PT Dewata Sawit Nusantara (PT DWT) lo- Yes cated at Kutai Timur district, East Kalimantan province with total land about 13,629.50 ha con- No sist of five (5) land use part, with the information served below: N/A - Bidang A, NIB.16.03.00.00.00057 about 277.50 ha - Bidang B, NIB.16.03.00.00.00058 about 510.17 ha - Bidang C, NIB.16.03.00.00.00059 about 10,135.58 ha NCR No :- - Bidang D, NIB.16.03.00.00.00060 about 2,625.55 ha - Bidang E, NIB.16.03.00.00.00061 about 53.70 ha This land use rights (HGU) issued on 31 Dec 2008, in Jakarta valid for 35 years. Those land use rights above was complete with land use certificate based on five (5) part, with information below: - Land use certificate No.37; Desa/Kel: Benheas, Dabeq, Diak Lay with total area about 277.50 ha, valid until 30 Dec 2043. Issued by Land National Regional Office of Kutai Timur district on 27-01-2009. - Land use certificate No.38; Desa/Kel: Benheas, Dabeq, Diak Lay with total area about 510.17 ha, valid until 30 Dec 2043. Issued by Land National Regional Office of Kutai Timur district on 27-01-2009. - Land use certificate No.39; Desa/Kel: Benheas, Dabeq, Diak Lay with total area about 10,135.58 ha, valid until 30 Dec 2043. Issued by Land National Regional Office of Kutai Timur district on 27-01-2009. - Land use certificate No.40; Desa/Kel: Benheas, Dabeq, Diak Lay with total area about 2,652.55 ha, valid until 30 Dec 2043. Issued by Land National Regional Office of Kutai Ti- mur district on 27-01-2009. - Land use certificate No.41; Desa/Kel: Benheas, Dabeq, Diak Lay with total area about 53.70 ha, valid until 30 Dec 2043. Issued by Land National Regional Office of Kutai Timur district on 27-01-2009. Based on information in land use rights decree the company land history of previous ownership was a forest concession company i.e. PT Sumalindo which the company purposes was HPH (Hak Pengusahaan Hutan). Moreover, after the license rights of PT Sumalindo finish, the PT DSN has get license from Ministry of Forestry of Indonesia regarding Forest Area release (SK Pelepasan Kawasan Hutan). Refer to letter No.S.661/Menhut-II/2006 dated on 18 Oct 2006 regarding Forest Area Releast Request for oil palm plantation development on behalf PT

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Dewata Sawit Nusantara. The letter explain the Minister of Forest stated that Forest Area Re- least Request was APL (non forest area) since 2004 refer to Decree Forestry Minister No.SK.412/Menhut-II/2004 with total area is 13,114.6 ha. The rest area were from communities land with total area 524.9 ha.

The verification from previous land of PT Dewata Sawit according to ownership was conducted. Total land from compensation process about 524.9 ha. Based on land previous ownership interviewee, the results of interviews with audit sampling no community rights were found during interviewed stated by community (sampling of land previous ownership, appendix 7).

Where the 13,114.6 ha was from State Land (Tanah Negara) from forestry released (pelepasan kawasan hutan) without compensation process. This is explanation stated in the land use rights (HGU) document, due to previously the land was belong HPH Concession (Logging Concession) of PT Sumalindo.

Where for PT DSN POM-6 (POM) the legal ownership refer to HGB (Hak Guna Bangunan) letter. The HGB is still under process by the Land National and Land Development Body of Indo- nesia. The new update of HGB permission process based on Peta Bidang Tanah (land conditional map) NIB.16.09.02.06.01534, scale 1:50,000, with total area about 51,740 m2, file map number 278/2018, issued on 1 Mar 2019 by Ministry of Land National and Land Development of Indonesia, Land National Official Local Government of Kutai Timur. This map is a evidence the HGB permission still under process from official government.

PT DWT has work instruction regarding boundary pillars installation and maintenance system, with document No.IK-AGR-OLP-33-R00. The company WI required the boundary pillars maintenance should be conducted twice a year. The last of boundary pillars monitoring done on April 2019 for Melenyu 1 estate; 30 Aug 2019 for Melenyu 2 estate; 2 January 2019 for Melenyu 3 estate; and April 2019 for Melenyu 4 estate. All the records of boundary pillars monitoring was inplace, including record of boundary pillars program for 2019. Moreover, based onsite visit verification sampling against boundary pillars DWT35 and DWT36, the verification result showed that boundary pillars was inplace with accessible and visible condition. Those boundary pillars set-aside adjacent with community land. Record of GPS point of that boundary pillars was: - DWT35 1o15’50.36’’N and 116o53’33.93’’E - DWT36 1o15’50.53’’N and 116o53’54.59’’E The company has prepare standard operation procedure for conflict resolution and has been communicated to all relavant parties. Company has a procedure to identify the legal right, tradition and the people who has right to get the compensation (FPIC) No. SOP-AGR-058-R01 dated November 2, 2015 about Land Loss. During initial certification audit there is no land conflict in all area PT Dewata Sawit Nusantara. As mentioned in the SOP No. SOP-AGR-058-R01 dated November 2, 2015 about Lan Loss, if any land conflict or dispute the company will negotiation after conduct participatory mapping with involvement of affected parties, witnessed by local government and or authority institution not limited to such as BPN, head of District/sub district etc, to avoide escalation of conflict. The company has strong commitment to maintan current relationship with local communities in peace condition. It was agreed by the local communities during stakeholder consultation on September 4, 2019 that was attended by most of community’s leader, head of villager, local business and local government in Muara Wahau as listed on sec 10 of this report. All communities very welcome to PT DSN group including all palm oil mills and estates. The community feel that because the company they can increase their livelihood after make cooperation with the company. Company also maintain their policy to circumvent instigated violence to maintain peace and order in current and planned operations. The policy is stated in the Quality Manual (PDM- AGR-R05) document, valid since 1 January 2017. Developan attitude of equality and impartial- ity in the relationship between the company and related parties. In the document was explained that company remain to committed clearly and seriously not to do violence action and will do our best in all respects in order to avoid using force, threats or act violently. Checks on documentation of socialization obtained evidence that the company has communicated the Social Responsibility Policy to the various levels of employees and external stakeholders.

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Criterion 2.3 : Use of the land for oil palm does not diminish the legal, or customary or user rights of other users, without their free, prior and informed consent Findings: Company has a procedure to identify the legal right, tradition and the people who has right to get the compensation No. SOP-AGR-058-R01 dated November 2, 2015 about Lan Loss. That procedure has taken into account the gender differences in the ability to claim rights, ownership and access to land; the difference between migrants and communities that had long existed; and the difference between the proof of legal ownership and communal ownership of ethnic groups or indigenous peoples.The procedure has been communicated to the stakeholders during the stakeholdermeeting. Checks on the records and interviews with the local communities during public consultation confirmed that there is no current claim on any land. Based on HCV studies and SIA report there are no customary rights of local community. An interview with the Chief of Local Community confirmed that they have no customary rights disputes It was proved during the audit that the use of the land for oil palm does not diminish the legal, customary or user rights of other users without their free, prior and informed consent. Total land from compensation process about 524.9 ha with compensation record presented below: Name of com- Location Date of com- Compa- Block Total area pensation re- in the es- pensated ny name number (ha) ceipt tate 25 Mar 2011 Aliman, Asnan, DWT Melenyu 1 H88 7.7 Compli- Saiful, Kurnia ance sta- 31 May 2012 Kebun Benia DWT Melenyu 1 400 tus: 15 Dec 2012 Sei Sentiang DWT Melenyu 1 G, H92- 67 Yes GGA 95 No 05 Jan 2013 Suhaimi DWT Melenyu 1 H92 1 19 Nov 2013 Yat Pai DWT Melenyu 1 E87 5 N.A 14 Mar 2013 Aliman/Saiful DWT Melenyu 1 H90-92 2 14 Mar 2013 Irman DWT Melenyu 1 H91-92 9.7 NCR No : 18 Jun 2013 Guk Usat DWT Melenyu 1 E69 2.8 RSPO027 25 Oct 2013 Bacok Tanyit DWT Melenyu 1 F87 16 38 03 Mar 2014 Liah Bung DWT Melenyu 1 D63B 3.7 29 April 2015 Lawai Tingai DWT Melenyu 1 E75C 10

There are evidences showed during audit regarding compensation, example: On April 29, 2015, the land compensation agreement was signed on behalf of Lawai Tinggai to the company, location ME 2 Block E 75C and E76C. Total compensation of IDR. 96,000,000. The agreement was signed by both parties, witnessed by the Head of Muara Wahau Village, Muara Wahau Sub District Head.

The company has maps of an appropriate scale showing the extent of recognised legal, customary or user rights, it was observed from the map, there are other land users inside PT Dewata Sawit Nusantara land used right, i.e. farmers group called Pulau Benia and a logpond including sawmill belong to Mr. Agusto. The farmers group Pulai Benia use company’s land with total area 145 ha in block ME1A while total area used for the logpond belong to Mr Agusto is 12. 3 ha located in ME 4 blok E. However during the audit time the company has not maps showing recognized land used through participatory mapping in- volving affected parties i.e group of farmer pulau Benia. The company also has no evidence of agreement regarding those land used both with group of farmer and Mr. Agusto. This is raised as non conformitie as menitoned on NCR No. RSPO02738

Criterion 3.1 : There is an implemented management plan that aims to achieve long-term economic and financial viability. Findings: Compli- Findings: ance sta- PT DSN POM-6 POM has records of business plan management for five (5) years from tus: 2019 – 2023. The business plan was include information regarding planted area (ha), FFB

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Page 24 of 91 projection production per year, OER and KER also CPO and PK projection production per Yes year. Cost of production per year, taxes, and other financial indicator are clearly mentioned No in the business plan. Then, total CPO projection sell, CSR budget, environmental budget N.A also others budget also included. In the end of business plan also mentioned about net balance (profitability). The business plan management for 2018 was discussed in management review as one of NCR No : agenda to check the achievement against to business plan. Business plan was under responsible of PPR (Planning and Perfromace Departmen). No smallholder include on this initial certification.

Criterion 4.1: Operating procedures are appropriately documented, consistently implemented and monitored. Findings: The mill and estate has Standard Operating Procedures (SOPs) that covers all aspects of oil palm planting and management as documented master list SOP document contains the following SOPs that cover all estate operations such as Nursery Practice, Land Clearing, Prepara- tion and Planting, Soil Conservation and Terracing, Road Construction and Maintenance, Es- tablishment and Maintenance of Legume Covers, Planting Density and Planting Technique, Palm Replacement During Immaturity and Supplying, Upkeep of Immature Oil Palms, Upkeep of Mature Oil Palms, Pests & Diseases, Manuring, EFB Application, Harvesting, Bunch Cen- sus and Palm Thinning. E.g. IK-AGR-OLP-01-R03 regarding Land clearing, IK-AGR-OLP-02- R02 regarding Nursery, IK-AGR-OLP-04-R02 regarding Planting oil palm, IK-AGR-OLP-09- R03 regarding Fertilizing, IK-AGR-OLP-14-R02 regarding Integrated pest Management (IPM), IK-AGR-OLP-23-R04 regarding Harvesting.

The Oil Mill has SOPs covering all mill operations such as FFB Grading, Sterilization Station, Press Station, Threshing Station, Oil Room, Kernel Plant, Laboratory, CPO & PK Dispatch, Engine Room, Boiler Room, Electrical, Workshop as well as Raw and Boiler Water Treatment Plant. E.g. SOP-AGR-079-R00 regarding FFB received, IK-AGR-PRO-03-R01 regarding Steri- lizer Station, IK-AGR-PRO-02-R01 regarding Loading Ramp Unit, IK-AGR-PRO-04-R01 re- Compli- garding Tipler Unit, IK-AGR-MS-04-R09 regarding back trace CPO, PK and PKO product, IK- ance sta- AGR-MS-06-R00 regarding Identification and traceability, IK-AGR-SHE-09-R02 regarding tus: Hazardous and toxic waste handling. Yes In order to ensure consistent implementation of the SOPs among all levels of the workforce No in the field, the following mechanisms are utilized through internal audit. For Mill and Estate, N.A Internal audit as determined on SOP of Management system audit, No. Doc. SOP-AGR- 040-R03 Rev 01, Effective date October 1, 2015. In the procedure has regulated that audit NCR No : schedule once time audits per year. The internal audit were done for all estates and POM 6 in year 2019 i.e: 1. Melenyu 1 on 14 to 16 March 2019 with 3 non confomities and 3 observations 2. Melenyu 2 on 18 to 20 March 2019 with 4 non conformities and 5 observations 3. Melenyu 3 on 5 to 8 March 2019 with 1 non conformity and 8 observations 4. Melenyu 4 on 11 to 13 March 2019 with 3 non conformities and 2 observations. 5. POM 6 PT DSN on 14 to 16 Marc 2019 with 7 non conformities and 4 observations Records of monitoring and any actions taken has maintained and available, as appropriate, e.g. findings regarding availibilty in fire extinguisher in the mill has been provided were checking during mill tour, finding regarding not available MSDS in fertilizer warehouse are provided in the location, etc. It has been verified that PT DSN POM 6 recive FFB from patnership smallholder, at least 1 % from total incoming FFB recived from patnership smallhoders in year 2018. There is no FFB from independent smallholder. The mill has completerecord the origins of all smallholders sourced Fresh Fruit Bunches (FFB), such partneship 8 and 10B are copperation farmers organization from Miau baru Estate. Incoming FFB record such as weighbridge ticket are clearly mention about the respctive farmer as stated on the delivery notes from the smallhoders accompany the FFB to the mill. Criterion 4.2: Practices maintain soil fertility at, or where possible improve soil fertility to, a level that ensures optimal and sustained yield.

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Findings:

Practices that maintain or enhance soil fertility to ensure sustained yield are contained in Fertilizer in Work Instruction of Fertilizing (No.Doc: IK-AGR-OLP-09-R03 dated November 3rd, 2014, and recommendation from the result of soil analisys. Actual fertilizer applications are recorded monthly and compared against fertilizer recommendations in the monthly estate manager’s report with summary of reconciliation of fertilizer application schedule in the Fertilizer Recommendation year 2019 Melenyu2 & 3 estate. Fertilizer application schedule and records for each field is available and maintained at the respective estate offices i.e. ME 2 & ME. 3 and head office KBB. Sampled records for year 2019 in ME 3 for showed that fertilizer application is done according to the Exepert recommendation Fertilizer activities in: Such as for block G33 ME3 estate 4105 trees for Hi-kay year 2019 dosage 3.5 kg/tree for total application for March 14367.5 kg realization 14368 kg, F18 ME3 estate 5970 trees. The summary of fertilizer activites until August 2019 as mentioned on the table below:

Realization of Estate (kg) fertilizing ME1 ME2 ME3 ME4

Urea 228.55 - 13,264 16,629 Compli- RP - - 39,793 49,077 ance sta- CPD 45 - 12,045 - - tus: Dolomite - 4,380 - 13,526 Yes Borate 98,210.00 42,880 1,761 1,663 No MOP 106,396 Kieserite - - 2,287 16,675 N.A HIKAY 427.103 CpD HiK 3,053.76 3, 864,325 91,341 - NCR No : Total 101,492.31 3,923,630 254,842 524,673

Foliar sampling is conducted on an annual basis and its results and corresponding fertilizer recommendations are contained in the Soil Analysis Report issued by Research and De- velopment PT Nusa Pusaka Kencana Analitycal & QC Laboratory Ref No. 126/RD- EXT/S/NOV/18. The leaf nutrient assessment to determine the levels of nitrogen, phospho- rus, potassium, calcium, magnesium and boron in the palms was conducted. The results of this assessment provided the input for fertilizer recommendations for year 2018 which is now being followed by the estates ME1 to ME4 PT Dewata Sawit Nusantara. Those soil analysis is also conducted on an annual basis by an external lab with soil samples taken from each estate field.

As part of the nutrient recycling strategy the company has implemented use of Empty Fruit Bunches (EFB) application and Palm Oil Mill Effluent (POME) for land application. Base on document verification, company maintain record of EFB application and POME for LA in 2019 for Melenyu 2 below :  January – August 2019 : was applied 268,408 M3 of POME into 1,348 Hectares.  January – August 2019, was applied 2,685.30 tonnes of EFB into 897 Hectares.

Criterion 4.3: Practices minimise and control erosion and degradation of soils. Findings: Compli- ance sta- The company has maps of any fragile soils detailing their soil profile. As seen on the map, tus: the soil types in company operational areas are dominated by mineral land Yes The company has strategy to manage and control the operation for plantings on slopes No above a certain limit as seen on document Working Instruction of Land Clearing (No. Doc: IK-AGR-OLP-01-R02 dated November 3, 2014). Based on the map of the slope classes is N.A known that the level of each slope of the Estate is as follows:

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1. Melenyu 1 Estate: slope class 0 - 150 with land suitability for oil palm planting S1 - NCR No : suitable (source: Contour and Slope Map) 2. Melenyu 2 Estate: slope class 0 - 250 with land suitability for palm oil planting S2 - slightly suitable (source: source: Contour and Slope Map) 3. Melenyi 3 : slope class 0 - 150 with land suitability for oil palm planting S1 - suitable (source: source: Contour and Slope Map) 4. Melenyu 4: slope class 0 - 250 with land suitability for palm oil planting S2 - slightly suitable (source: source: Contour and Slope Map) There is a road maintenance programme for year 209 that is rigorously adhered to. The road maintenance programme covers the distribution of gravel stones, grading and com- pacting and levelling of estate roads, construction and maintenance of bridges as well as construction of silt pits especially near slopes to allow for water run-off into the pits and prevent ero-sion of access roads. During intial certification audit, there is evidence that organization has conducted road maintenance in 2019. Example, as presented below : - Melenyu 1 : plan = 500,000 m, actual = 436,141 m - Melenyu 2; plan = 277,545 m; actual = 189,193 m - Melenyu 3; plan = 48,375 m ; actual = 37.016 m - Melenyu 4; plan = 24,320 m ; actual = 20.012 m - Based on land suitability map (source: Land suitability map for Plantation at East Kaliman- tan Province published by Plantation Agency of East Kalimantan Province) it is found that there is no type of marginal land including peat in all operational areas of the company (PT Swakarsa Sinarsentosa, PT Dharma Intisawit Nugraha, PT Dharma Agrotama Nusantara, PT Dewata Sawit Nugraha and PT Karya Prima Agro Sejahtera). The type of soil in the operational area of the company is dominated by mineral land. The management strategy for the existing soi condition were mentioned on IK-AGR-OLP- 01-R03 regarding Land clearing, and IK-AGR-OLP-04-R02 regarding Planting oil palm.

Criterion 4.4: Practices maintain the quality and availability of surface and ground water.

Findings: The PT DWT estate has record of water management program for 2019. The water management activity programmed by estate such as marking area, planting plant to control erosion, prohibition of chemical activity, water quality assessment monitoring per year. The monitoring carry out twice a year (per 6 month). Where for POM-6 (POM) has water management and monitoring program for 2019. The kind of activity of the water management including water quality analysis, enrichment of water catchment area, water efficiency and so on. The company also has established procedure regarding identification, management and maintenance of water source, document No.SOP-AGR-070-R00, effective date on 4 Jan 2016. The management activity carry out by estate such as planting the vegetation to reduce Compli- the soil erosion, prohibition of chemical application along the bufferzone of water rerources, ance sta- and water level management. The time scheduling for water management is carry out at least tus: every three month. Yes Based on wrokers interviewed in block No.H94, Division 2 and block No.F38, Division 4, No Melenyu 2 estate, the water drinking from outside (buy by them selves), where for bath and washing (MCK) the water came from dam “bendali”. This dam based onsite verification in the N.A division 2 showed the area was protect and maintained. The PT DSN POM-6 (POM) water source came from water surface from Wahau river. The NCR No : POM has permission to use the water surface based on Decree Ministry of Pekerjaan Umum dan Perumahan Rakyat, No.767/KPTS/M/2017 regarding permission to use water resources from Wahau river to PT DSN (PT Dharma Satya Nusantara - POM-6) POM with water intake maximum about 27.8 litter per second, within 15 hours per day and 30 days per month. This water purposes is for palm oil mill and housing area. This license issued on 2 Oct 2017, in Ja- karta.

PT DWT has record water courses identification inside the estate concession area. There two (2) types of water sources, i.e.: water spring and dam (bendali). The water management activity programmed by estate such as marking area, planting plant to control erosion, prohibi-

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Page 27 of 91 tion of chemical activity, water quality assessment monitoring per year. The monitoring carry out twice a year (per 6 month). The company has established work instruction regarding riparian buffer zone document No.IK-AGR-SHE-06-R01. This procedure clearly mentioned regarding riparian bufferzone per water courses width refer to national law and regulation and RSPO BMP’s. This work instruction has implemented well. Based on field verification against to chemical (spraying) block No.H94, Division 2, Melenyu 2 estate and fertilizer input application block No.F38, Division 4, Melenyu 2 estate, the workers able to explained and have knowledge to explain and protect the riparian bufferzone. They are clearly understood regarding “red marking” to protect the water courses/natural stream. The mechanism to protect the riparian bufferzone in the PT DSN POM-6 POM is similar with the work instruction above document No.IK-AGR-SHE-06-R01. The water sources in the POM is came from dam (waduk) and direct to water treatment plan.

The PT DSN POM-6 POM has POME management plan through the POME pond management plan. The POME ponds (IPAL) has permission based on decree Head of Kutai Timur district No.660.5/K.833/2016 regarding revision of decree Head of Kutai Timur No.660/K.508/2014 regarding environmental permit for palm oil mill of PT DSN POM-6 POM with processing capacity 60 ton FFB per hours located in Kutai Timur district, Kalimantan Ti- mur province. This permit valid since the issued date on 30 Nov 2016 as long as no revision and no additional activity will affected the environment. Total pond consist of: - Cooling pond (2 units) - Mixing pond (1 unit) - Anaerobic pond (4 units) - Land application inlet pond (1 unit) - Sediment pond (1 unit) The PT DSN POM-6 POM has permission to use the POME as nutriet for soil through the land application system. This land application permission based on decree of Kepala Dinas Pena- naman Modal dan Pelayanan Satu Pintu of Kutai Timur district No.503/07/DPMPTSP- PPNP/L.A/V//2019. This permission valid for five (5) years since the issued date on 23 May 2019 in Sangatta. Total ha for land application about 490 ha located in block F52,53,54,58,59; E59,E60,E61; F55,F56,F57,F58,F59; G49,G50,G51,G52,G53,G54,G55; F46,F45,F47; G46,G47,G48. Based on land application records in April, May and Jun 2019 the block number was comply with the land application permit. PT DSN POM-6 POM has record of POME monitoring quality analysis result based on report of analysis result issued by external laboratory of Sucofindo who has accredication from Min- istry of Environmental and Forestry. The POME analysis carried out per month. For instance in semester I 2019 (Jan-Jun) the record showed no BOD result exceed the requirements of national regulation Environmental Minister No.28 and 29 year 2003. For instance certificate of report of analysis No.07993/AOEKAM for April 2019 and No.08003/AOEKAM for May 2019.

PT DSN POM-6 POM has record of water used per ton FFB processed. Based on production journal record in 2018 (Jan-Dec) total FFB processed about 322,508.507 mt, and total water used 467,092 m3 with total water used per ton FFB processed average was 0.96 m3/ton FFB processed. Then for 2019 (Jan-Aug) total FFB processed about 187,408.464 mt, and total water used 286,677 m3 with total water used per ton FFB processed average was 0.97 m3/ton FFB processed.

Criterion 4.5: Pests, diseases, weeds and invasive introduced species are effectively managed using appropriate Integrated Pest Management (IPM) techniques. Findings: Compli- The company has program of Integrated Pest Management (IPM) plans as documented on ance sta- Annual Plan, the implementation of IPM has monitored every month as seen on records tus: “Rencana Kerja dan Actual PHPT”. IPM program includes pest and diseases detection, cen- Yes sus and controlling, use of pesticide and herbicide. IPM system includes setting out of tech- No nique to be implemented, chemical to be used, locations to be applied, and time frame for implementation. N.A The organization has established documented procedure regarding pest management, e.g.:

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 Work Instruction for oil palm census and oil palm sample No. IK-AGR-OLP-12-R00, effec- NCR No : tive dated on 3 May 2010.  Work Instruction for EWS No. IK-AGR-OLP-13-R01, effective dated on 1 July 2015.  Work Instruction for IPM No. IK-AGR-OLP-14-R02, effective dated on 1 July 2015.  Work Instruction for Weed controlling for immature and mature No. IK-AGR-OLP-15-R02, effective dated on 1 July 2015.  Work Instruction for pesticide application No. IK-AGR-OLP-16-R02, effective dated on 28 September 2015.  Work Instruction for pesticide handling No. IK-AGR-OLP-17-R01, effective dated on 1 Feb- ruary 2012. Generally, the procedures said that control of pest performed by using biologically, mechani- cally, and chemically by taken account and consider minimal effect to environmental. The procedures also include identification of potential pests and threshold, technique/methods (biolog- ical, mechanical/physical, and chemical). There is no evidence that the organization has been used pesticides for prevent pests attack. Based on the records, attack has come caterpillar and bagworm. The record documented on “Rekapitulasi Hasil Sensus Ulat Api, Ulat Kantong dan Tikus”. Control of caterpillar and bagworm by hand picking and mist blower (nucles polyhidro virus and cordizeb). Sample record of census:  Caterpillar census on 5 August 2019 Block F84 Division 3 Melenyu Estate 1 with area 49 Ha, number of oil palm census 166 of 7,001 oil palm and found caterpillar attacked average 0.04 caterpilar per frond (low), no need chemical intervention; 3 August 2019 Block D67 Di- vision 6 Melenyu Estate 2 with area 44 Ha, number of oil palm census 68 of 6,422 oil palm and found caterpillar attacked average 0.71 caterpilar per frond (low), no need chemical intervention; 2 August 2019 Block G33 Division 9 Melenyu Estate 3 with area 27 Ha, number of oil palm census 93 of 4,142 oil palm and found caterpillar attacked average 0.04 caterpilar per frond (low), no need chemical intervention; and 6 August 2019 Block C74 Division 14 Melenyu Estate 4 with area 22 Ha, number of oil palm census 74 of 3,179 oil palm and found caterpillar attacked average 0.05 caterpilar per frond (low), no need chemical intervention.  Bagworm census on 2 August 2019 Block I101 Division 1 Melenyu Estate 1 with area 24 Ha, number of oil palm census 81 of 3,406 oil palm and found bagworm attacked average 0.02 bagworm per frond (low), no need chemical intervention; 2 August 2019 Block E55 Di- vision 7 Melenyu Estate 2 with area 2 Ha, number of oil palm census 13 of 306 oil palm and found bagworm attacked average 0.08 bagworm per frond (low), no need chemical intervention; 8 August 2019 Block D34 Division 10 Melenyu Estate 3 with area 20 Ha, number of oil palm census 67 of 2,718 oil palm and found bagworm attacked average 0.01 bagworm per frond (low), no need chemical intervention; and 1 August 2019 Block C60 Division 14 Melenyu Estate 4 with area 17 Ha, number of oil palm census 54 of 2,435 oil palm and found bagworm attacked average 0.11 bagworm per frond (low), no need chemical intervention.  Rat census on 6 August 2019 Block F80 Division 4 Melenyu Estate 1 with area 44 Ha, number of oil palm census 601 of 6,213 and found rat attacked 0.17% (low), no need chemical intervention; 1 August 2019 Block E63 Division 6 Melenyu Estate 2 with area 49 Ha, number of oil palm census 651 of 6,422 and found rat attacked 0.20% (low), no need chemical intervention; 2 August 2019 Block D17 Division 12 Melenyu Estate 3 with area 5 Ha, number of oil palm census 64 of 679 and found no rat attacked; and 6 August 2019 Block C72 Division 14 Melenyu Estate 4 with area 14 Ha, number of oil palm census 217 of 1,550 and found rat attacked 0.50% (low), no need chemical intervention. The company has conducted tyto alba monitoring on August 2019 showed that 101 tyto alba nest and 31 tyto alba, 2 young tyto alba and 7 eggs. The organization also has program for planting beneficial plants (Turnera ulmifolia/ subulata, Cassia tora, Euphorbia heterophylla and Antigonon leptopus). These beneficial plants seen along the main road and collection road. Data of beneficial plant was available in “Data Seba- ran Tanaman Bermanfaat 2019”. Record of beneficial plants in August 2019 are 3.51 Ha at Melenyu Estate 1, 5.08 Ha at Melenyu Estate 2, 10.60 Ha at Melenyu Estate 3 and 1.99 Ha at Melenyu Estate 4. Training of those involved in IPM implementation has demonstrated as stated on “Realisasi Pelatihan Pestisida 2018 – 2019” e.g.: Melenyu Estate 1

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 Pesticide training on 28 February 2019 by Nu Farm located at Learning Center and attended by 3 participants.  Pesticide training on 19 – 20 August 2019 by Corteva Agroscience located at Learn- ing Center and attended by 20 participants. Melenyu Estate 2  Pesticide training on 28 February 2019 by Nu Farm located at Learning Center and attended by 17 participants.  Pesticide training on 19 – 20 August 2019 by Corteva Agroscience located at Learn- ing Center and attended by 13 participants. Melenyu Estate 3  Pesticide training on 28 February 2019 by Nu Farm located at Learning Center and attended by 20 participants.  Pesticide training on 19 – 20 August 2019 by Corteva Agroscience located at Learn- ing Center and attended by 5 participants. Melenyu Estate 4  Pesticide training on 28 February 2019 by Nu Farm located at Learning Center and attended by 23 participants.  Pesticide training on 19 – 20 August 2019 by Corteva Agroscience located at Learn- ing Center and attended by 1 participant.

Criterion 4.6: Pesticides are used in ways that do not endager health or the environment

Findings: Considering the nature of company’s condition and target pest, weed or disease, and following recommendation from IPM program the company use some listed pesticide as determine on document annual plan, all pesticides used shall be demonstrated. The list of pesticide has been approved as seen on document “Daftar Material Sifat Kimia serta Kuantitas Bahan Kimia Berbahaya”. The use of selective products that can prove have minimal effect on non- target species shall be used where available. Records of pesticides use (including active ingredients used and their LD50, area treated, amount of active ingredients applied per ha and number of applications) is provided, i.e: Melenyu Estate 1 (January – July) No Trade Active LD50 Area Amount of Number Mark Ingredi- (mg/ treat- active In- of appli- ent kg) ed gredient cation (Ha) applied per ha (kg/ ha) Compli- 1. Methyl Metilmet- > 5000 3,396 0.09 45 kg ance sta- sulfuron tus: 2. Garlon Triklopir 1338 1,516 0.56 303 litre Yes Butoksi- No etils Eter 3. Kleen Up Isopropil > 5000 6,616 1.66 1,471 litre N.A Amina Glifosat NCR No : 4. Starane Fluroksi- > 5000 120 0.01 1 litre pir Metil Heptil Es- ter

Melenyu Estate 2 (January – July) No Trade Active LD50 Area Amount of Number of Mark Ingredi- (mg/ treat- active In- application ent kg) ed gredient (Ha) applied per ha (kg/ ha) 1. Methyl Metilmet- > 5000 2,481 0.02 8.89 kg sulfuron 2. Garlon Triklopir 1338 941 1.69 151.77 litre Butoksi-

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etils Eter 3. Kleen Up Isopropil > 5000 7,165 1.19 884.91 litre Amina Glifosat 4. Starane Fluroksi- > 5000 1,657 0.03 9.68 litre pir Metil Heptil Es- ter

Melenyu Estate 3 (January – July) No Trade Active LD50 Area Amount of Num- Mark Ingredi- (mg/ treated active In- ber of ent kg) (Ha) gredient appli- applied cation per ha (kg/ ha) 1. Methyl Metilmet- > 5000 1,655 0.01 8 kg sulfuron 2. Garlon Triklopir 1338 928 0.90 151 litre Butoksi- etils Eter 3. Kleen Up Isopropil > 5000 5,567 1.27 971 litre Amina Glifosat 4. Starane Fluroksi- > 5000 1,623 0.05 13 litre pir Metil Heptil Es- ter

Melenyu Estate 4 (January – July) No Trade Active LD50 Area Amount Num- Mark Ingredi- (mg/ treated of active ber of ent kg) (Ha) Ingredi- appli- ent ap- cation plied per ha (kg/ ha) 1. Methyl Metilmet- > 5000 1,958 0.03 8 kg sulfuron 2. Garlon Triklopir 1338 264 0.72 34 litre Butoksi- etils Eter 3. Kleen Up Isopropil > 5000 3,081 0.50 210 litre Amina Glifosat 4. Starane Fluroksi- > 5000 - - - pir Metil Heptil Es- ter

Any use of pesticides has minimised as part of a plan, and in accordance with Integrated Pest Management (IPM) plans. There have no prophylactic use of pesticides. Pesticides that are categorised as World Health Organisation Class 1A or 1B, or that are listed by the Stockholm or Rotterdam Conventions, and paraquat, are not used. Pesticides has been handled, used or applied by persons who have completed the necessary training and always be applied in accordance with the product label. Record of training as stated on “Realisasi Pelatihan Pestisida 2018 – 2019” e.g.: Melenyu Estate 1  Pesticide training on 28 February 2019 by Nu Farm located at Learning Center and

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attended by 3 participants.  Pesticide training on 19 – 20 August 2019 by Corteva Agroscience located at Learn- ing Center and attended by 20 participants. Melenyu Estate 2  Pesticide training on 28 February 2019 by Nu Farm located at Learning Center and attended by 17 participants.  Pesticide training on 19 – 20 August 2019 by Corteva Agroscience located at Learn- ing Center and attended by 13 participants. Melenyu Estate 3  Pesticide training on 28 February 2019 by Nu Farm located at Learning Center and attended by 20 participants.  Pesticide training on 19 – 20 August 2019 by Corteva Agroscience located at Learn- ing Center and attended by 5 participants. Melenyu Estate 4  Pesticide training on 28 February 2019 by Nu Farm located at Learning Center and attended by 23 participants.  Pesticide training on 19 – 20 August 2019 by Corteva Agroscience located at Learn- ing Center and attended by 1 participant. Appropriate safety and application equipment has been provided and used. All precautions at- tached to the products were properly observed, applied, and understood by workers as ob- sreved during field audit on Division 2 Block H96 Melenyu Estate 1, Division 7 Block F60 Melenyu Estate 2 and Division 11 Block E27 Melenyu Estate 3. Storage of all pesticides were according to recognised best practices. The company has Work Instruction for pesticide storage IK-AGR-SHE-08-R00 effective dated on 15 January 2014 which explained about chemical storage. All pesticide containers has properly disposed of and not used for other purposes. Based on document observations and field visits to the chemical storage warehouses, it known that the company has used the type of pesticide that registered and there is no paraquat active ingredient were available in the storage warehouses. Meanwhile, the Chemicals materials (pesticides) have been arranged on a storage rack safely, easily accessible and equipped with MSDS, emergency response facilities (fire extinguisher, first aid box, bells and showers). Application of pesticides has proven methods that minimise risk and impacts. As seen on risk assessment impact document no. 0012/DWT-PH/II/2019 dated on 11 February 2019. Pesticides is not applied aerially. Maintenance of employee knowledge and skills on pesticide handling has demonstrated, including provision of appropriate information materials, as seen on training records e.g.: Melenyu Estate 1  Pesticide training on 28 February 2019 by Nu Farm located at Learning Center and attended by 3 participants.  Pesticide training on 19 – 20 August 2019 by Corteva Agroscience located at Learn- ing Center and attended by 20 participants. Melenyu Estate 2  Pesticide training on 28 February 2019 by Nu Farm located at Learning Center and attended by 17 participants.  Pesticide training on 19 – 20 August 2019 by Corteva Agroscience located at Learn- ing Center and attended by 13 participants. Melenyu Estate 3  Pesticide training on 28 February 2019 by Nu Farm located at Learning Center and attended by 20 participants.  Pesticide training on 19 – 20 August 2019 by Corteva Agroscience located at Learn- ing Center and attended by 5 participants. Melenyu Estate 4  Pesticide training on 28 February 2019 by Nu Farm located at Learning Center and attended by 23 participants.  Pesticide training on 19 – 20 August 2019 by Corteva Agroscience located at Learn- ing Center and attended by 1 participant. MSDS socialization on 7 June 2019 by OHSE Officer located at Melenyu Estate 2 and attended by 7 participants from Estates. Proper disposal of waste material, according to procedures that are fully understood by work-

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Page 32 of 91 ers and managers has been demonstrated. All of waste of pesticide packaging was stored in hazardous waste temporary storage (see criterion 5.3). Specific annual medical surveillance for pesticide operators, and documented action to treat related health conditions, has been demonstrated, as seen on records of annual medical surveillance of pesticide operators in 2018 – 2019 by Klinik Permata Medika. Sample medical checks carried out on February and July 2019. Based on results of medical checks for pesticide operators in February and July 2019, all of pesticide operators from Melenyu Estate 1, Melenyu Estate 2, Melenyu Estate 3 and Melenyu Estate 4 in good conditions. There is not evidence that work with pesticides were undertaken by pregnant or breastfeeding women, as seen on document/observed during on the field on Division 2 Block H96 Melenyu Estate 1, Division 7 Block F60 Melenyu Estate 2 and Division 11 Block E27 Melenyu Estate 3. The company has policy (internal letter) document No. 007/PH-DWT/II/2012 dated on 10 Jan 2012 clearly mentioned the breast-feeding and pregnant women is not allow to handling chemical activities. This letter issued by plantation head. Other internal memorandum also state similar policy, memorandum No.010/HRA/VII/2011 dated on 12 July 2011 clearly mentioned the breast-feeding and pregnant women is not allow to handling the chemical activities. Based on field observations and interviewed with spraying workers (female workers) at Divi- sion 2 Block H96 Melenyu Estate 1, Division 7 Block F60 Melenyu Estate 2 and Division 11 Block E27 Melenyu Estate 3, every month they have to check with test pack to the clinic, the worker has ggod understanding about the restriction of pregnant woman do spraying. .That why there is no pregnant and / or breastfeeding women employed in the field as spraying workers. Criterion 4.7: An occupational health and safety plan is documented, effectively communicated and implemented. Findings: PT DSN POM-6 POM has established the OHS policy, where the policy issued on 1 Dec 2010 signed by Chief Executive. This policy written in local language (Bahasa). This policy has dessiminated to all workers level in POM on 16 Apr 2019 attended by 38 participants from all department. The next OHS policy socialization was done on 15 Aug 2019 attended by 29 participants from all workers department. Then for contractor driver responsible to transport the CPO, OHS socialization conducted on 11 Apr 2018 with attendant 8 participants. The POM has OHS plan to implemented OHS policy. The OHS plan in 2019 consist of information regarding work program, output, time schedule, remarks. The work plan including but not limited to inventarization of risk source, safetry patrol, precaution activity, OHS campign, OHS training, daily meeting, emergency response campaign, medical surveillance, and so on. Some of activity as mentioned in the OHS work program implemented, such as safety patrol. Compli- This activity required should be conducted monthly by the work program. Based on documentation record, the safety patrol was implemented well and carried out per month by OHS ance sta- Committee. The last safety patrol was on Jun, Jul and Aug 2019, and the record available in tus: place. Yes PT DWT has established the OHS policy regarding OSH and environmental. This policy also No signed by top management. This policy written in local language (Bahasa). The policy has N.A dessiminated to all workers level including for external (contractor) workers conducted on 5 Mar 2019 in Melenyu 1 estate attendant by 26 participants, 6 Mar 2019 in Melenyu 2 estate NCR No : attendant by 12 participants, 8 Mar 2019 in Melenyu 3 estate attendant by 22 participants, and RSPO027 26 Apr 2019 attendant 8 participants. Moreover, for internal workers also done conducted by 40 estate for instance, 24 Jul 2019 in Melenyu 1 division 4 attendant by 40 participants; 3 May 2019 in Melenyu 2 attendant by 56 participants, and other records for Melenyu 3 and Melenyu 4 estate also available in place.

The PT DSN POM-6 POM has established the risk assessment, this risk assessment was cover all activity and process inside the POM. This risk assessment issued on 3 Jan 2019. The risk assessment also mentioned about risk control, precaution risk, risk level, risk evaluation and person incharge. Refer to accidenct record in 2018 (Jan-Dec) and 2019 (Jan-Aug) there is no insident happened with lost time accident. In 2018, only three (3) insident happened with low level, then in 2019 only two (2) insident happened with low level. The POM procedure regarding identification, assessment, and risk control for OHS-Environment document No.SOP-AGR-078-R00, ef-

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Page 33 of 91 fective date 1 Feb 2017 coverage risk assessment control, and precaution program and so on. PT DWT has established the risk assessment based document No.0012/DWT-PH/II/2019 approved date on 11 Feb 2019. This risk assessment cover all activity in the estate. The risk assessment also mentioned about risk control, precaution risk, risk level, risk evaluation and person incharge.

Based on on OSH work program in PT DSN POM-6 POM the safety training are programmed by OHS Committee. The safety training to all workers level in POM carry out by safety campaign and socialization in daily before the work started. This confirmed by POM workers interview in Boiler and Grading station, they are understood and have good knowledge to exaplain and performed the OHS company procedure. To support the OHS implementation, the POM also distributed the PPE with free to all level workers based on workers type. Record of PPE distribution per PPE type was in place, for instance, welder goggles distributed on 28 Feb 2019 to three welder, safety helmet distributed on 2018 and 2019 with per date distributed and per workers name receipt, ear muff distributed on Dec 2018 and Jan 2019 per each operator, and so on. Based on site visit verification in grading area, boiler station, kernel nut station, and engine room, all the operator are completely used PPE during on duty, OHS signboard such as PPE signboard, emergency signboard, assembly point signboard are installed clearly in every work station.

PT DWT has records PPE distributed to all workers, example distribution on 15 Jun 2019 for 23 workers with PPE distributed was rubber boots for Melenyu 1 dan 2 estate; for Melenyu 3 estate protective cloth for chemical sprayer, and 20 May 2019 in melenyu 4 estate for rubber boots. Based on field observation against to spraying activity in block H94 division 2, and fertilizer input in block F38 division 4 all the workers used complete PPE in place during on duty. The workers that conduct maintain beneficial plant were not use appropriate PPE as required by risk register documents, i.e. The risk register require helmet but the workers did not provided and did not used it. This is raised as non conformity as mentioned on NCR No. RSPO02740 PT DSN POM-6 POM has OHS committee based on decree letter No.566/0/0191/P2K3/PPK/DTKT/2019 issued by Labour Official Government of Kutai Timur district. This decree issued on 23 Jan 2019 in Samarinda, valid as long as there is no revision regarding OHS committee recorded in the decree. The OHS committee has record os regulary meeting per monthly. The last regularly meeting was in Jun, Jul and Aug 2019 (quarterly). The record was minutes of meeting and attendant list, for instance on June attendant by 17 participants; July attendant by 12 participants and Aug attendant by 14 participants. The meeting discussed about safety and health, work insident and accident, safety patrol result, waste management, and so on. The OHS committee also reported the record of OHS implementation and regularly meeting result to Labour Offi- cial Local Government of Kalimantan Timur province, example report for period Apr – Jun 2019 reported on 13 Aug 2019, and receipt by the related official government. While the PT DWT also has established the OHS committee based on decree letter No.KEP.566/810/P2K3/PPK/DTKT/2018 regarding OHS committee approval for PT Dewata Sawit Nusantara (PT DWT). This license valid as long as there is no revision of the person in charge on the annex of the decree letter. Issued on 28 Apr 2018, in Samarinda. The record of OHS regulary meeting per monthly available in place. The last meeting was in Apr, Jun and Jul 2019 and reported quarterly to Labour Official Government of Kalimantan Timur. The meeting discussed about record of accident, safety patrol, west management, emergencies response, and so on. The OHS committee also reported the record of OHS implementation and regularly meeting result to Labour Official Local Government of Kalimantan Timur province, example report for period Apr – Jun 2019 reported on 13 Aug 2019, and receipt by the related official government through letter receipt documents No.0022-30/DWT- PH/VII/2019.

PT DSN POM-6 POM has established the procedure regarding emergencies and accident handling, document No.SOP-AGR-037-R01 regarding health and safety procedure. In page 19 explained about emergencies condition covere such as fire, explosion, natural disaster

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(flood, earthquackeand landslide), hazardous material leakage, and chaos. The POM also has established the procedure regarding precaution and handling water water and oil/grease leakage document No.SOP-AGR-082-R00, effective date on 2 Jul 2018. This procedure clearly mentioned about how to handling the emergencies condition if water water (POME) and oil/grease are overflow into the environment. PT DSN POM-6 POM also has record of first aid training to all foremen as person in charge to ensure the implementation of first aid in the ground. The first operator of company has get license issued by Labour Minister with letter/certificate No.Ser.5219/P3K-P3/VII/2018 as person incharge for first aid. Based on site visit in POM the first aid box was in place, with contain comply with the national regulations. Map of first aid nox location also in place to inform all workers and guess the nearest of first aid box location. The first aid approval license operator conducted first aid communication/socialization to all workers was on 23 Aug 2019 attendant by 20 participants from all department. The emergencies organization structure of PT DSN POM-6 POM was in place, and approved by Labour Official Local Government of Kalimantan Timur province. PT DSN POM-6 POM also carried out the emergencies simulation conducted on 6 Sep 2019 attendant by 45 participants from emergencies team complete. Based on simulation the emergencies team able to handling the emergency condition within 48 minutes. PT DWT conducted the emergencies simulation on 18 Jun 2019 in Melenyu 4 estate. Based on simulation record the emergencies personel need 8 minutes to handling the fire. Record of emergencies simulation complete with photograph and attendant list with 25 participants include in the simulation.

PT DSN POM-6 POM conducted the medical surveillance annually. The last medical surveillance conducted on May 2019 with health condition status was good. POM also conducted cholinesterase test for workers who working with chemical. There area 16 workers was included in cholinesterase test with good condition. Moreover, medical surveillance also conducted for worker who work in high risk area to ensure the audiometry and spirometry of the workers is good, there is no medical result axceed the level. All the workers in PT DSN POM- 6 registered in national medical care and accident insurance (BPJS Ketenagakerjaan and Kesehatan). Information regarding this served in CR 6.5.3. PT DWT has records of medical surveillance especially for cholinesterase test twice a year. Based on the result there is no result exceed the threshold.

PT DSN POM-6 POM has record of insident and accident happened for 2018 and until Aug 2019. Based on accident record in 2018 and 2019, there are accident happened but with no lost time accident, so the LTA was zero. PT DWT has record of insident and accident happened for 2018 and until Aug 2019. Based on accident record in 2018 the frequency rate was 0.7% and the severity rate was 1.31%. The total lost time accident was recorded was 4. Record of accident for 2018 and 2019 until July was in place, with cause of accident was unsafe action.

Criterion 4.8: All staff, workers, smallholders and contract are appropriately trained. Findings: The company has formal training programme for all staff/worker including contrator workers, that covers all aspects of the RSPO Principles and Criteria, as seen on document FM-HCD- 19-R00. Compli- Sample training program for year 2019 covered all aspect of RSPO P&C, assessment, com- ance sta- pentency gap, attendant list etc. tus: Training records for each employee has been maintained such as: Yes Melenyu Estate 1 No  Pesticide training on 28 February 2019 by Nu Farm located at Learning Center and N.A attended by 3 participants.  Pesticide training on 19 – 20 August 2019 by Corteva Agroscience located at Learn- NCR No : ing Center and attended by 20 participants.  OHS and Environment training on 10 August 2019 by OHSE Officer located at Learn- ing Center and attended by 2 participants.  First aid training on 12 February 2019 by Company doctor/ paramedic located at

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Learning Center and attended by 2 participants.  Harvesting training on 15 February 2019 by Learning Center located at Division 1 and attended by 26 participants.  Fertilizer application training on 25 September 2018 by PT Hikay Indonesia located at Learning Center and attended by 14 participants.  HCV training on 2 February 2019 by Conservation Assistant located at Learning Cen- ter and attended by 3 participants.  ISO, ISPO, RSPO, SCCS & ISCC training on 23 July 2019 by Operation Audit Staff located at Learning Center and attended by 4 participants. Melenyu Estate 2  Pesticide training on 28 February 2019 by Nu Farm located at Learning Center and attended by 17 participants.  Pesticide training on 19 – 20 August 2019 by Corteva Agroscience located at Learn- ing Center and attended by 13 participants.  OHS and Environment training on 10 May 2019 by OHSE Officer located at Learning Center and attended by 2 participants.  First aid training on 9 April 2019 by Company doctor/ paramedic located at Learning Center and attended by 3 participants.  Fertilizer application training on 26 September 2019 by PT Hikay Indonesia located at Learning Center and attended by 5 participants.  HCV training on 30 January 2019 by Conservation Assistant located at Learning Cen- ter and attended by 1 participant.  ISO, ISPO, RSPO, SCCS & ISCC training on 23 July 2019 by Operation Audit Staff located at Learning Center and attended by 2 participants. Melenyu Estate 3  Pesticide training on 28 February 2019 by Nu Farm located at Learning Center and attended by 20 participants.  Pesticide training on 19 – 20 August 2019 by Corteva Agroscience located at Learn- ing Center and attended by 5 participants.  OHS and Environment training on 27 April 2019 by OHSE Officer located at Learning Center and attended by 1 participant.  First aid training on 3 July 2019 by Company doctor/ paramedic located at Learning Center and attended by 1 participant.  Harvesting training on 13 August 2019 by Learning Center located at Division 9 and attended by 35 participants.  Fertilizer application training on 25 September 2018 by PT Hikay Indonesia located at Learning Center and attended by 16 participants.  HCV training on 30 January 2019 by Conservation Assistant located at Learning Cen- ter and attended by 4 participants.  ISO, ISPO, RSPO, SCCS & ISCC training on 23 July 2019 by Operation Audit Staff located at Learning Center and attended by 2 participants. Melenyu Estate 4  Pesticide training on 28 February 2019 by Nu Farm located at Learning Center and attended by 23 participants.  Pesticide training on 19 – 20 August 2019 by Corteva Agroscience located at Learn- ing Center and attended by 1 participant.  MSDS Socialization on 7 June 2019 by OHSE Officer located at Melenyu Estate 2 and attended by 7 participants from Estates.  OHS and Environment on 10 May 2019 by OHSE Officer located at Learning Center and attended by 1 participant.  First aid training on 8 May 2019 by Company doctor/ paramedic located at Learning Center and attended by 2 participants.  Harvesting training on 23 April 2018 by Learning Center located at Division 13 and attended by 16 participants.  Fertilizer application training on 25 September 2018 by PT Hikay Indonesia located at Learning Center and attended by 14 participants.  HCV training on 1 November 2018 by Conservation Assistant located at Learning Center and attended by 2 participants.

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 ISO, ISPO, RSPO, SCCS & ISCC training on 30 April 2018 by Operation Audit Staff located at Learning Center and attended by 1 participants. POM 6  OHS and Environment, First Aid, Fire, Emergency Respond on 24 January 2019 by OHSE Officer located at Learning Center and attended by 3 participants.  HCV training on 4 February 2019 by Conservation Assistant located at Learning Cen- ter and attended by 2 participants.  ISO, ISPO, RSPO, SCCS & ISCC training on 25 July 2019 by Operation Audit Staff located at Learning Center and attended by 2 participants.  Machine operator and production equipment workshop on 1 – 12 April 2019 by Balai Diklat Industri Medan located at Learning Center and attended by 7 participants.  POM maintenance training on 12 July 2019 by Maintenance Assistant located at Learning Center and attended by 4 participants. Record of training and socialization for smallholder and contractors e.g.:  Safety ride and PPE socialization for contractors on 9 August 2018 by OHSE Officer and CSR located at Melenyu Estate 2 and attended by 31 participants.  Emergency respond for land fire for smallholders on 29 March 2019 by OHSE Officer located at Muara Pantun village and attended by 42 participants.  Emergency respond for land fire for smallholders on 19 August 2019 by OHSE Of- ficer located at Nehas Liah Bing village and attended by 31 participants.  HCV socialization for smallholders on 1 September 2018 by OHSE Officer locted at Nehas Liah Bing village and attended by 25 participants.

Criterion 5.1: Aspects of plantation and mill management, including replanting, that have environmental impacts are identified, and plans to mitigate the negative impacts and promote the positive ones are made, implemented and monitored, to demonstrate continuous improvement.

Findings: PT Dewata Sawit Nusantara has an environmental impact assessment (EIA) documented on AMDAL for Oil plam Plantataion and Plam Oil Mill Establishement iasued on year 2000, the EIA/AMDAL was made by external consultant from Politeknik Pertanian Negeri Sa- marinda. The document was apporved by AMDAL Commision East Kutai Governement on April 24, 2009 according to decree letter no. 462/660.1/2.1/LH/IV/2009 signed by “head of Badan Lingkungan Hidup” East Kutai. The EIA study coverage 15109 Ha pantation area and also to cover palm oil mill operations with capacity 60ton/hour. Information about identified environmental impact are very comprehensively explained on AMDAL document. As listed on document all impact from planning, construction and operations stage of plantation and mill activities were evaluated, all potential impacts both positive and negative to environmental and social aspect has been identified. However due to additional construction of Compli- waste waster management pond from 7 pond to 8 pond in the mill, the company made addi- ance sta- tional environmental management and monitoring plan (UKL&UPL) to cover identified im- tus: pact from construction and operation another pond. The UKL&UPLdocument has been ap- Yes porved by Head of East Kutai District as seen on decree letter no. 660.5.K.833/2016 dated No November 30, 2106 (Perubahan Keputusan Bupati Kutai Timur Nomor:660/K.508/2014 ten- tang Izin Lingkungan Atas Kegiatan Pabrik Kelapa Sawit 6 PT Dharma Satya Nusantara N.A Tbk, Kapasitas 60 ton Tbs/jam, di Kecamatan Muara Wahau Kabuoaten Kutai Timur, provinsi Kalimantan Timur). NCR No : In order to mitigate negative effects, the company establish environmental impact management and monitoring plan as seen on document RKL and RPL for semester 1 year 2019 there is a timetable for change has been developed and implemented within acomprehensive management plan following the changes of company’s activities as menioned above. The management plan has identify the responsible persons, e.g. EHS team. The environment management and monitoring plan is adaptive to operational changes, and can prove the effectiveness of the mitigation measures. The plan has reviewed as a minimum every two years to reflect the results of monitoring and where there are operational changes that may have positive and negative environmental impacts. Report of impact management and monitoring were reguarly reported to Pusat Pengelolaan Ekoregion East Kalimantan, last report was sumbited on August 13, 2019 as seen on Surat

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Pengantar Document (FM-STD-19-R01) and reported to Minstry of Environemntal and For- estry (Kementerian Lingkungan Hidup dan Kehutanan) receive notes 1567491534-2382 dated September 03, 2019, Kepala Dinas Lingkungan Hidup Kebupaten Kutai Timur on Ju- ly 25, 2019; kepala Dinas Lingkungan Hidup Provinsi Kalimantan Timur C.q. Kepala Bidang Pengendalian Pencemaran dan Kerusakan lingkungan. The tim auditor evaluate that all environmental parameter as mentioend on AMDAL and UKL&UPL document were measure and none of them were out of governement standard.

Criterion 5.2 : The status of rare, threatened or endangered species and other high conservation value habitats, if any, that exist in the plantation or that could be affected by plantation or mill management, shall be identified and operations managed to best ensure that they are maintained and/or enhanced.

Findings: PT DWT has report of HCV assessment. The report done on 2012 by external consultant “daemeter consulting”. This HCV methodology document was use HCV Toolkit for Indonesian 2008, by qualified assessor and register in the RSPO. Based on HCV document assessment, there are 21 team member present during the assessment process consist of biodiversity and socio-cultural team. This information stated in page 3 of HCV assessment document. The HCV methodology used completely stated in the HCV report using the stakeholder’s consultation, secondary data collection and primary data collection. The stakeholder consultation done via FGD, interviews, and field execursion against with representatives of community from Benheas, Diak Lay, Muara Wahau, Nehas Liah Bing, Miau Baru, Wana Sari, and Wahau Ba- ru. This HCV assessment cover all DSN Group area including all PT DWT concession area. The HCV report was including the information regarding conservation status of flora and fauna found in the company concession area. Result of HCV identification (ha) and HCV map was in place, recorded by company. Total HCV+HCVMA area identified was 1722 ha.

Based on HCV assessment, found the RTE species found in the PT DWT concession area. Record of flora and fauns status including RTE species stated in the appendix 1 page 15-20 of the report. The species status refer to IUCN, CITES and National Regulations. PT DWT has procedure regarding flora and fauna conservation, document No.SOP-AGR-052-R03, ef- Compli- fective date on 1 Aug 2017. The procedure explained about preventive action to protect the species inside the company concession area. The procedure also mentioned prohibition to ance sta- carry out activity will damage the HCV area and/or the species and habitat inside the compa- tus: ny concession area, such as illegal hunting, illegal fishing, catching and others activity will af- Yes fected the HCV area and or species. No PT DWT has record of HCV management plan for 2019. Moreover, the HCV management N.A was devided into detail action management plan per month to make easy the HCV monitoring and management control. The detail action management plan consist of information regarding NCR No. periodically monitoring to all HCV area, safeguard of HCV area, enrichment of vegetation for RSPO027 HCV area, and socialization with all stakeholders (all level workers and surrounding communi- 41. ty) also with scheme smallholder. The HCV detail action management plan also clearly mentionded the person incarge responsible to carry out the monitoring and management. Based on site verification to the Melenyu 1, division 2 (Sungai Ledik; HCV 4.1 area) and Melenyu 4 estate, near of division 13, the HCV area condition is protected and maintained well. There is no encroachment from the not responsible person against to HCV area. Based on tracking activities during HCV verification the HCV area was secondary forest with high density forest, the RTE species habitat still exist, proven by found the Orangutan nest and foodprint of Helarctos malayanus, also Eudroxylon zwageri.

The company has procedure to protect the all the species inside the company concession area including RTE species and all the species protected by National Law. The PT DWT conducted the regulary educated to all workers level and surrounding community to protect the HCV and species. For instance the socialization done 13 Nov 2018 in division I Melenyu 1 estate, attendant by 31 participants from all level workers; other socialization for Melenyu 4 estate in division 13 conducted on 23 Mar 2018 with attendant 30 participants from all workers level. PT DWT estate also conducted socialization to surrounding community, for instance with Diak Lay Community done on 27 Jul 2018 with attendant 26 participants from community; Jak Lay community done on 31 Aug 2018 with attendant 25 participants from all community; Nehas

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Liah Bing in 1 Sep 2018 with attendant 25 participants, and also for others community was in place. Those socialization above completely proven by attendant list, training material and training photograph. Moreover, based on interview with sprayer and fertilizer workers in Melenyu 1 estate, they are very understood, and able to explain why they should protect the river, why they prohibited to catching the species, and also they able to mentioned type of species protected inside the PT DWT concession area.

PT DWT has HCV management plan 2019. This management plan fully refer to previous management plan implementation result. The RTE species monitoring result showed the RTE habitats still in good condition, there is no information based on monitoring result kind of activity will damage the RTE species and habitats. The company has positive improvement through the collaboration working with local community to protect the HCV area and species.

The PT DWT could not showed record of identification local communities existing rights which set-aside with the HCV area, and record of negotiated agreement to optimally safeguard both the HCVs and rights of local communities, including the map of HCVs which set-aside with local communities. This condition raised as noncomoformity under NCR No. RSPO02741.

Criterion 5.3: Waste is reduced, recycled, re-used and disposed of in an environmentally and social- ly responsible manner Findings: All waste products and sources of pollution have been identified and documented in “Iden- tifikasi Sumber-sumber Limbah dan Pencemaran” issued on 4 January 2019. Type of waste been identified are: liquid, solid, and gas/polutant. Sources of waste are workshop, Estate activity, power house operation, domestic waste and FFB Transportation. All chemicals and their containers have been disposed of responsibly, such as hazardouse waste from agrochemical container, agrochemical container, used oil, used oil filter and chemical bag. The company disposed all hazardouse waste to approved apporved vendor, i.e. PT. Sum- ber Rezeki Abadi Jaya which has licence valid from August 8, 2016 until August 8, 2021 as decree letter No. S.555/VPLB3/PPLB3/PLB.3/8/2016, the scope of collected waste are used batteries, used oil, sample for disposed hazardous waste:  Dated on 8 July 2019, Manifest No. KLH-86440000001066UF, chemical bag (hazardous waste code B104d) with total 278.03 kg from PT Dharma Satya Nusantara – Estates. Compli-  Dated on 8 July 2019, Manifest No. KLH-86440000001069UF, used filter (hazardous ance sta- waste code B109d) with total 11 kg from PT Dharma Satya Nusantara – Estates. tus:  Dated on 8 July 2019, Manifest No. KLH-86440000001062UF, chemical bag (hazardous Yes waste code B104d) with total 40 kg from PT Dharma Satya Nusantara – POM 6. No  Dated on 8 July 2019, Manifest No. KLH-86440000001063UF, used filter (hazardous waste code B109d) with total 6 kg from PT Dharma Satya Nusantara – POM 6. N.A A waste management plan 2019 has been sighted at PT Dharma Satya Nusantara – POM 6, Melenyu Estate 1, Melenyu Estate 2, Melenyu Estate 3 and Melenyu Estate 4 which in- Observa- cludes hazardous waste management, solid waste management and sewage management. tion The mitigation measures identified as recycle of waste, no open burning, disposal of domestic waste and providing enough bins at workers houses. Sewage management is not directly discharge to waterway, septic tanks at each house and replace them with new units. This will be monitored by periodic visit at housing area. The company also conducts POME management through land application. The company also has conducted quality testing of palm oil mill effluent each month by Sucofindo. Based on testing result on March – May 2019, the value of BOD still inside the threshold set in the regulations. The company uses EFB as part of the nutrient recycling strategy.

The company must ensure that the TPSA location on ME2 is more than 1 km from the nearest settlement. The condition of the fertilizer warehouse in ME 2 and ME 3 looks a lot of holes, the risk of water entering during heavy rain is very high, especially the presence of waste and puddles of water from the rinse house in front of the ME fertilizer warehouse 2. Potential damage to fertilizer and decreased fertilizer quality before being applied.

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The waste amount sent to the waste transporter is not consistent with the waste amount that enters to the hazardouse waste temporary storage in the ME 3 estate, in the balance sheet the amount ofdisposed waste is higher than the waste collected. The company has opportunity to improve according to those issuses above. Criterion 5.4: Efficiency of fossil fuel use and the use of renewable energy is optimized.

Findings: PT DSN POM-6 has record of energy used (fossil fuel) and renewable energy from shell and fiber. Based on production journal record total FFB processed in 2018 (Jan-Dec) about 322,508.507 mt, CPO production about 78,648.468 mt, energy need (kWH/ton FFB) average 52.00 kWH/ton FFB, total fossil fuel used 135,000 litter, and fossil used per ton FFB about 0.42 litter/Ton FFB or equivalent with 1.72 litter/ton CPO. Then for Jan-Aug 2019 total FFB processed about 187,408.464 mt, CPO production about 43,993.775 mt, energy need Compli- (kWH/ton FFB) average 55.29 kWH/ton FFB, total fossil fuel used 85,000 litter, and fossil ance sta- used per ton FFB about 0.46 litter/Ton FFB or equivalent with 1.94 litter/ton CPO. tus: Yes For renewable energy the PT DSN POM-6 POM utilized the shell and fiber. Total shell used in No 2018 (Jan-Dec) about 22,865.853 mt and 43,538.648 mt of fiber. All the shell and fiber produced by POM utilezed as renewable energy by burned into boiler. The energy efficiency of N/A renewable energy utilized from the company able to replace the fossil fuel energy used, where the POM able to save 1,766,748 litter fossil fuel or equivalent in IDR 16,242,832 Million and NCR No :- equivalent with IDR 206,524 per ton CPO. Where in 2019 (Jan-Aug) total shell used was 13,287.260 mt and 2,530.014 mt of fiber. All the shell and fiber produced by POM utilezed as renewable energy by burned into boiler. The energy efficiency of renewable energy utilized from the company able to replace the fossil fuel energy used, where the POM able to save 1,245,973 litter fossil fuel or equivalent in IDR 10,705,714 Million and equivalent with IDR 243,346 per ton CPO.

Criterion 5.5: Use of fire for preparing land or replanting is avoided except in specific situations, as identified in the ASEAN guidelines or other regional best practice.

Findings: All estates do not conduct open burning for land clearing, This is in accordance to the Zero Burn Method under the section on Land Clearing, Preparation and Planting listed in:  Quality Manual No. PDM-AGR-R05 dated January 1, 2017. At point 7.3 it stated that the Compli- implementation of Zero Burning policy is carried out on all aspects of plantation manage- ance sta- ment. tus:  Working Instruction of Land Clearing (No. Doc: IK-AGR-OLP-01-R03) stated that Land Yes Clearing (new development and replanting) conducted without burning. No There were no open burning sighted in any of planted areas, landfills as well as workers and staff quarters during the field visits at Estates and POM. Other evidence that the company has N.A implemented zero burning policy is at the time of land clearing in Block G15, D16, G17, G18 and F32 at Melenyu Estate 3 in 2009, Block E74, E75 and E76 Melenyu Estate 2 in 2011, NCR No : Block I101, I102 Melenyu Estate 1 in 2013 and Block C66B, C67B at Melenyu Estate 4 in 2014. The company can show evidence of land clearing which is not done by burning. The evidence in the form of Work Agreement Letter, Minutes of Job Inspection and Photos of activities. Furthermore, based on field observations to Estates there is no ex-burning. Criterion 5.6: Plans to reduce pollution and emissions, including greenhouse gases, are developed, implemented and monitored. Findings: Compli- PT DSN POM-6 and PT DWT has record of pollution, emition and greenhouse identification ance sta- list. This documents mentioned information regarding emission sources, such as POME activi- tus: ty, chemical activity (fertilizing and spraying), transportation, genset for electricity and others. Yes All the information emission sources also complete with information how to mitigate and re- No duce the emission, pollution and greenhouse gases. N/A

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Page 40 of 91 Record of GHG calculation information also availbale in place using RSPO GHG Tools version 3.1, but based on raw data verification, the GHG calculation was not valid calculated due to NCR No: the raw data regarding fertiling input was not accurate. This condition raised as nonconformity RSPO027 under NCR No. RSPO02742. 42 The GHG mitigation plan developed well by mill and estate. The plan information was emission source, objective, target, kind of activity, timetable and person incharge. For instance, the activity proposed for GHG mitigation such as: fertilizing program, planting of forest vegetation, renewable energy use from shell and fiber to reduce the fosil fuel. While biogas plant the mill still in under review management. Due to this is initial certification the implementation of GHG mitigation plan will be verify in the next surveillance audit.

Criterion 6.1 : Aspects of plantation and mill management that have social impacts, including replanting are identified in a participatory way, and plans to mitigate the negative impacts and promote the positive ones are made, implemented and monitored, to demonstrate continual improvement Findings: Social Impact Assessment for PT DSN and PT DWT (estate and POM) was carried out on 2011. The SIA was conducted through participatory method invloving all relevant affected parties and stakeholder. There was community participatory evidence i.e. list attendance of SIA process in surrounding villages. Focus group disscussion held in Nehes Liah Bing Village and Muara Wahau Village on October 12, 2011; in Benhes Village, Diak Lay Village on October 14, 2011, in Wanasai Village on October 15, 2011, in Miau Baru Village on October 16, 2011, in Long Wehea Village and Jak Luay on October 17, 2011, in Pantun Karya and Wahau Baru on 19 October 2011. The SIA review includes: socio-economic, demographic, land ownership, cultural, health, and so on. Indicative social components indicated will be managed and monitored, among others: population relocation, land acquisition, access to resources, accident and health risks, community perceptions, employment, marginalization of minor groups, social conflicts, income increase, human resource capacity building, organizational strengthening, changes in environmental habits. The SIA was conducted through participatory method invloving all relevant affected parties Compli- and stakeholder. There was community participatory evidence i.e. list attendance of SIA pro- ance sta- cess in surrounding villages. Focus group disscussion held in Nehes Liah Bing Village and tus: Muara Wahau Village on October 12, 2011; in Benhes Village, Diak Lay Village on October Yes 14, 2011, in Wanasai Village on October 15, 2011, in Miau Baru Village on October 16, 2011, No in Long Wehea Village and Jak Luay on October 17, 2011, in Pantun Karya and Wahau Baru N.A on 19 October 2011. The Company has some plans to decrease negative and to increase positive impacts of com- NCR No : pany existence.Those plans are documented in companys Social Managing Plan (Rencana

Kelola Sosial Perusahaan). The company also monitors the social impact. Mitigation plans, SIA implementation and monitoring are implemented by the CSR Department once a year. Company has reviewed the social impact plan taking into account the social problems occurring usually around company. Reviewing has occurred through stakeholder meeting. Company also has given its concern to the farmers which was done by counseling activity about how to- cultivate palm oil. This Social Impact Management Plan is routinely reviewed every 6 months. The last review has been conducted and documented in June 2018. Three methodological actions have taken in order to gain stakeholder participations in Social Impact. Management Plan review process, such as direct interview, discussion and workshop with stakeholders. Company has reviewed the social impact plan taking into account the social problems occurring usually around company. Reviewing has occurred through stakeholder meeting. SIA report consist of identified social impact of scheme smallholder which is the surrounding villages ask the company to prepare smallholder area for them as already done. Criterion 6.2: There are open and transparent methods for communication and consultation between growers and/or millers, local communities and other affected or interested parties. Findings: Compli- The company have SOP Communication Procedures and External Complaints Handling ance sta- No. SOP-AGR-044-R01 dated July 3, 2017. By this SOP it is stated that letter or memoran- tus: dum is a media for communication with external parties. This SOP is covers electronic letter

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Page 41 of 91 also. Beside this direct letter, communication also could be made by letter sent fo sugges- Yes tion box. Responses to requests for information or complaints should be issued no later No than 4 working days after written / written information / complaints requests are received. N.A This procedure has been communicated and consulted with the community around the estate on August 23, 2017 with the aim that the proce-dures are understood by the community. This SOP also states that community relation officer as a person in charge to make NCR No : communication and consultation with the community. RSPO028 Company has special officer whois responsible to handle social issues, he is Departement 56 CSR. The position has been made official with clear and proper job description, and the affected parties been made aware and have access to the person in charge by letter or drop in suggestion box. The Company has compiled a list of stakeholders on January, 2019 (suppliers, contractors and community, NGO and government agencies). Information of stakeholder contain name, institution, address and phone number. Person in Charge for drafting the list of stakeholders is a CSR Departement and a list of stakeholders is updated every six (6) months. However during intial certification audit, Vendors and contractors have not been included in the stakeholder list. This is raised as non conformity NCR No : RSPO02856. Records of all communications are run by CSR Departement in the log book of incoming mail and outgoing mail. Records of all communication, including confirmation of receipt or endorsement, recording in log book. For example, on April 4, 2019 the Koperasi Semoga Usaha Sejahtera delivered the letter No. 278/KSU-SUTS/LB-NLB/IV/2019 regarding applications for sending FFB. Resolved with No. Letter 0009 / DWT / 04/2019.

Criterion 6.3: There is a mutually agreed and documented system for dealing with complaints and grievances, which is implemented and accepted by all affected parties.

Findings: The system, open to all affected parties, to resolve disputes in an effective, timely and appropriate manner, ensuring anonymity of complainants and whistleblowers, where requested has been established as recorded on Procedure No. SOP-AGR-054-R02 is effective Ju- ly 3, 2017 Complaints and workers' complaints are contained in the Employee Complaints Handling.

The purpose of such procedures is to ensure that every employee is properly treated in accordance with company regulations and applicable law regulations and mini-mizes the dis- satisfaction felt by the employees. The procedure applies to permanent employees and contracts. Each reporting identity (anonymity / whistleblower_ is maintained / secret) Com- plaints may be sent via HCO Dept. Head (HP 087875971601) via SMS, WA, BBM (24 Compli- hours), email and phone hours and working days. Immediately submitted no later than 4 ance sta- working days after the complaint report received by the relevant officials. tus: There was system for grievance handling external communication No. SOP-AGR-044-R01 Yes dated July, 3 2017. By this SOP it is stated that letter or memorandum is a media for com- No munication with external parties. This SOP is covers electronic letter also. Beside this direct N.A letter, communication also could be made by letter sent fo suggestion box. Responses to requests for information or complaints should be is-sued no later than 4 working days after NCR No : written / written information / complaints re-quests are received.

The mechanism for submitting complaints is also stated in Company Regulation Pe-riod 2017-2019. Company Regulations document period 2017-2019, in Chapter VIII, Section 37 concerning communication. The Company has documented every worker’s complaints and responses on the form of complaint receipt. The worker’s complaints have to be resolved, maximum in 4 working days after the complaint report received by the relevant officials. The de-partment in charge for documenting employee complaints is HRD Department. For example, On January 11, 2019 of on behalf Jembris (POM 6) a complaint about leak-ing in his house, and then on February 23, 2019 the worker’s complaints had been resolved by replacing a leaky roof.

Criterion 6.4: Any negotiations concerning compensation for loss of legal, customary or user right are dealt with through a documented system that enables indigenous peoples, local communities and other stakeholders to express their views through their own representative institutions

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Findings: A procedure for identifying legal, customary or user rights, and a procedure for identifying people entitled to compensation as well as for calculating and distributing fair compensation (monetary or otherwise) ,has established, i.e No. SOP-AGR-058-R03 dated July 15, 2019 about Land Loss. The purpose of document is to provide guidance on managing any dispute encountered by PT Dewata Sawit Nusantara with any third parties claiming interests on the land, gathering of information and documents such land titles and development Compli- plans, appointment of land surveyors and legal practitioners and con-sultation with land au- ance sta- thorities in negotiation process. The procedure has been communicated to the stakehold- tus: ers during the stakeholder-meeting. That procedure has taken into account the gender dif- Yes ferences in the ability to claim rights, owner-ship and access to land; the difference be- No tween migrants and commu-nities that had long existed; and the difference between the proof of legal ownership and communal ownership of ethnic groups or indigenous peoples N.A The implementtaion of procedure were monitored and evaluated in a participatory way, Based on HCV studies and SIA report there are no customary rights of local com-munity. NCR No : An interview with the Chief of Local Community confirmed that they have no customary rights disputes There are evidences showed during audit regarding compensation, example: On April 29, 2015, the land compensation agreement was signed on behalf of Lawai Tinggai to the company, location ME 2 Block E 75C and E76C. Total compensation of IDR. 96,000,000. The agreement was signed by both parties, witnessed by the Head of Muara Wahau Vil- lage, Muara Wahau Sub District Head. Criterion 6.5: Pay and conditions for employees and for contract workers always meet at least legal or industry minimum standards and are sufficient to provide decent living wages. Findings: Pay and conditions for employers are documented. Pay slips are provided to workers as confirmed from worker interviews. Pay slips for field workers show breakdown for all work done al- lowances received, deductions, number of days worked and overtime hours performed. Company has a copy of the Decision of the Governor of East Kalimantan No. 561/K.555/2018 on minimum wages Kutai Timur District in 2019 amounted to IDR.2.893.833/month. Also company has decision letter: Directors’ Decree No.083/DIR/XII/2018 dated December 31, 2018, The minimum wage for employees of PT Dharma Satya Nusantara Tbk Group in East Kutai District IDR. 2.893.850 plus rice supply of 0.5 kg per day, Daily Paid Employee (KHL) of IDR. 115.754 per day did not get rice supply. The Company has a document listing the employee wages for the month of August 2019, and the wages of employees are paid above the average of the provisions of the provincial government of East Kalimantan. Example for payment on August 2019: - NPK. 0063591, Catgory 1B, Position Warehouse Crew, Basic Salary, IDR. 2.893.850. Compli- - NPK. 0042780, Category 2A, Position Harvest Foreman, Basic Salary, IDR. 3.025.000. ance sta- - NPK. 0031664, Position Maintenance, Basic Salary, IDR. 2.990.322. tus: - NPK. 0024845, Position Harvester, Basic Salary, IDR. 2.990.322. Yes The Company had a Collective Labour Agreement (CLA/PP) for period of 2017-2019: No - PT Dewata Sawit Nusantara: That was registered in Labor and Transmigration Agen- N.A cy RI No. 18/PP/P-04/VII/2017 on July 4, 2017. CLA/PP have included: facilities and assis-tance to the labour union, recruitment, remuneration, daily working hours, ex- NCR No : emption from the obligation to work, health care, social security and workers' welfare, health and safety, order and discipline, complaints and settlement, termination of employment. - PT Dharma Satya Nusantara: That was registered in Labor and Transmigration Agen- cy RI No. 19/PP/P-03/VII/2017 on July 4, 2017. CLA/PP have included: facilities and assis-tance to the labour union, recruitment, remuneration, daily working hours, ex- emption from the obligation to work, health care, social security and workers' welfare, health and safety, order and discipline, complaints and settlement, termination of employment. Auditor assessed the list of workers, complete with the wage amount, date of birth, date of joining SMM, basic salary, fringe benefit or premi, additional, overtime, allowance, gross, deduction, nett), dan signature, payment slip, detailed with all allowance and deduction is available. The receipt of payment was given to all workers on the payment day. All employees even contractor have been provided with suitable housing, water supplies, med-

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Page 43 of 91 ical care (clinic, including doctor, nurses and medicines and bed) and welfares by the company. Worker housing receive piped potable water which is tested regularly to ensure that it is safe for human use. All workers housing are also provided with free electricity. Meanwhile, there’s a new facility for employees, day care for their kid’s forfree. The parents are recommended to bring groceries and vegetable for their kids then it is cooked by the nanny in day care. The company also facilitated the provision of basic food needs of workers. Many efforts were done by company:  There is a monthly salary market which supply many basic and other needs.  In every camp (housing) there is small shop/stall which sell some needs.  There is a daily itinerant vegetable seller. Based on interviews with some workers, they get basic food (such as rice, flour, etc) easily. The existence of that facility ensures the access of employees to the food was decent, fairly and reasonably priced.

Criterion 6.6: The employer respects the rights of all personnel to form and join trade unions of their choice and to bargain collectively. Where the right to freedom of association and collective bargaining are restricted under law, the employer facilitates parallel means of independent and free association and bargaining for all such personnel. Findings: The company has a policy to respect human rights. The policy is stated in the Quality Manual (PDM-AGR-R05) document, valid since 1 January 2017, Point 10.2. Organizations understand that workers have the right to argued, associate and organize in a labour union. Organization committed to pro-vides opportunities for workers to organize in unions and express an opinion. Company has policy regarding the recognition of freedom of association under policy the Col- lective Labour Agreement (PP) for period of 2017-2019. In Section 4 of section g of the Com- pany Regulations, "workers are entitled to establish trade unions, become trade union members/leaders according to the prevailing governmental provisions". There are union organizations, namely: . Serikat Pekerja Dewata Sawit Nusantara (SP.DSN) after registration in Social and Workers Agency of Kutai Timur District, Number. 05/02/SP-SB/Nakertrans-HIJ/I/2013 on January 12, 2013. Committee Structure of SP. SSS 2019-2021, General Head: Fachrul Rozi; Secre- tary: Rahmat Bin Yayat; Treasurer: Kusnadi. Head of Organizational Development: Kodrat; Compli- Head of Industrial Relations: Isfridus Antus; Head of Women's Empowerment: Hikmah I. ance sta- Okatisah; Head of Fundraising and Business Affairs: Sigit Prasetyo. In each division there tus: is representative of workers as committee. Yes . Serikat Pekerja Dewata Nusantara (SP.DN) after registration in Social and Workers Agen- No cy of Kutai Timur District, Number 05/02/SP-SB/Nakertrans-HIJ/2003 on January 22, 2013. Committee Structure of SP. KPAS 2019-2020, General Head: Kusnadi; Secretary: N.A Alzulfriadi Siregar; Treasurer: Kusnadi. In each division there is representative of workers as committee. Total members is 147 person. September 3, 2018 a meeting between work- NCR No : ers' representatives and the company discussed the women's committee. In the company there is also a Bipartite LKS Bipartite Cooperation Institutions (LKS Bipartite) for direct communication, the member of Bipartite consist of company’s management representative and worker representative. The organization has been approved by Manpower and Transmigration Kutai Timur District, i.e. LKS Bipartite for PT DSN approved by Labor, Social and Transmigration Agency, Kutai Timur District. Registered No. 13/LKS-Bipartit/IV/2018 on April 4 2018. General Head: Jeffry Panihuta; Secretary: Suhendrik; members: 10 person. There was a regular meeting between representative of worker union and representative of man-agement commpany. Minutes of some meetings were checked and the meetings found to be properly conducted. For example: (1) SP. DSN, March 30, 2019, a meeting between company representatives and unions to prepare for the May Day event; (2) SP. DN, SP. DSN: January 20, 2019, a meeting between company representatives and trade unions on the intro- duction of the role of trade unions with the women's committee.

Criterion 6.7: Children are not employed or exploited

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Findings: The mill and it’s supply based estates has a policy regarding Children are not employed or exploited, it is stated on Internal memorandum No.055/DIR/XII/2016 dated December 1, 2016) on child and female workers. The company has communicated and socialized to all worker and employee level as well as for company’s suppliers or contractor as are attaced Compli- in agreements with suppliers/contractors. No one under 18 years of age is to be employee ance sta- both in the mill and the estate. The company's policy regarding the age requirements of tus: workers is also in the Collective Labour Agreement (CLA/PP) period 2017-2019. That the Yes requirements of workers are adults, at least 18 years old. No Records of personal data of employee’s age, marital status, position and rank, location of work, date of com-mencing employment are kept. Checking the records per July 2018 con- N.A firmed that no one under 18 years old. The Company was also displayed the policy in the office and hous-ing area. During field observations demonstrated that there was no under- NCR No : age worker and no children were invited to work by their parents. In order to avoid child labor company asks Personal Identity Card (KTP) and Family Card (KK). The results of interviews with union leaders and outsourcing parties that the company pro- hibits the employment of children under the age of 18. Contractors are prohibited from em- ploying workers under the age of 18 years. Criterion 6.8: Any form of discrimination based on race, caste, national origin, religion, disability, gender, sexual orientation, union membership, political affiliation, or age, is prohibited. Findings: The company has a policy to respect human rights. The policy is stated in the Quality Man- ual (PDM-AGR-R05) document, valid since 1 January 2017, Point 10.2. The DSN group will not discriminate in the recruitment and employment of employees. The Company's policy on non-discrimination and equal opportunity is set out in the Collec- tive Labour Agreement (PP) for period of 2017-2019 Article 5, "Companies provide equal opportunities and opportunities to workers". The policy has been disseminated to all levels of employees on March 22, 2019, April 16, 2019 and January 21, 2019. The Company was also displayed the policy in the office and housing area. The policy is displayed at various locations in the mill/estate offices and so- Compli- cialized to the Workers in each unit. Based on the interview results with unions, it was not- ance sta- ed that there is no discrimination against workers. Company is not discriminatory in treating tus: workers since acceptance till work in all types of jobs. Yes Vacancies are posted on notice boards in the mill/estates, and also advertised in the local No news paper. A policy on equal rights regardless of race, caste, national origin, religion has been established and also socialized in agreements with suppliers/contractors. In recruiting N.A pro-cess is open to public, no requirements of ethnic, religion, caste and gender. In addition, based on the book of Mutual Working Agreement, the company must provide NCR No : religious leave allowance to their workers to celebrate religious holidays. There is a transparent system of holiday for workers, if they need to take their leave and to get permission to take their leave related to the religious event. Through interview with workers, it was confirmed that there was no discrimination on working opportunities, all workers were treated equally. Records of employee’s recruitment and their contract agreement were available. In PT DSN and PT DWT there was no migrant worker. Appraisal the worker’s performance referred to Psedure Nomor: SOP-AGR--014- R00 dated August 15 February 2013. Companys is an equal opportunity employer, through promotion method based on performance.

Criterion 6.9 : There is no harassment or abuse in the work place, and reproductive right are protected Findings: Compli- Findings: ance sta- The company has a policy to respect human rights. The policy is stated in the Quality Manual tus: (PDM-AGR-R05) document, valid since 1 January 2017, Point 10.2. To protect female work- Yes ers, companies have established procedures for handling sexual harassment and violence. No Company policy on prevention of sexual harassment and violence contained in Collective La- bour Agreement (PP) for period of 2017-2019 Company Regulation Document (PP) Article 12 N.A that is:

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• Every worker is entitled to receive protection for sexual harassment and reproductive NCR No : rights at work. • Sexual harassment is a violation and if proven to sexually harass the offender will be subject to sanctions in accordance with applicable regulations. The policy has been disseminated to all levels of employees on March 22, 2019, April 16, 2019 and January 21, 2019. The Company was also displayed the policy in the office and housing area. The policy is displayed at various locations in the mill/estate offices and socialized to the Workers in each unit. The rules have been explained to all workers to ensure their understanding. Based on the result of interview women employees, it is confirmed that that they understood the policy and knew the grievance mechanism for complaints. Results of interviews with women workers in residential of Afdeling 5, Block 67F, ME2, it was stated that there was never any incident of sexual harassment that afflicts women workers. The company protects the reproductive rights of all women workers, by providing maternity leave and prohibition for breastfeeding women to work as chemical sprayer. Female employees are enti-tled to be pregnant and childbirth leave of 3 months and also allowed to breast- feed for up to 6 months at least 30 minutes everyday. The company has a gender structure period 2019-2021. Chairman: Hikmah I. Okatiasih; Sec- retary: Wiji; ME 1 Coordinator: Eka; ME 2 Coordinator: Santi Yunita; ME 3 Coordinator: Sulis Setawati; ME 4 Coordinator: Kasmawati. Women Protection committee agenda in 2019: socialization of Women Protection Committee, medical Check for female worker (chemist), and meeting of the committee. The Company has procedures for preventing and handling sexual harassment and violence. SOP-AGR-049-R01 dated November 1, 2013. If sexual harassment is reported to the women's committee, then it is completed and counseled for the victim. The mechanism is socialized to female workers. If the identity of the reporter is needed and the victim will be kept confidential.

Criterion 6.10: Growers and millers deal fairly and transparently with smallholders and other local businesses. Findings: It was available a document of FFB pricing on July 2019 set by the Plantation Office of East Kalimantan Province on July 30, 2019. The price of FFB per kg, plant age 3 years, is IDR.1.034,78, On the 10th – 20th years IDR. 1.173,49. FFB price is determined by a meeting attended by the parties, those are representatives of the Company, Cooperative Management and Plantation Office. FFB Price which is used now and previously, it has been known by the farmer / management of Village Cooperative Unit/KUD. Cooperatives are involved in setting the price of FFB. FFB pricing mechanism Compli- was agreed by the parties in every month. FFB price of smallholder refers to the price set ance sta- by the Department of Plantation Prov. East Kalimantan, which is issued one month. tus: Based on the results of interviews with the management of KUD Longsep Hidup Baru in Yes Muara Wahau Village, it was stated that the FFB price for smallholder refers to the price set No by East Kalimantan Plantation Office, FFB price was obtained directly from Plantation Of- fice of East Kalimantan Province and from the company. Sales documentation of FFB from N.A smallholder was kept in the office of ther KUD respectively. Payment of smallholder’ FFB farmers were carried out by the 15th of each month. Sales NCR No : documentation of FFB from smallholder was kept in the office of ther KUD respectively. Based on the statement from the management of KUD in Muara Wahau village, the FFB payment from the company was on time in accordance with the agreement. POM 6 PT DSN receive FFB from KUD Longsep Hidup Baru Harapan Baru. POM 6 don’t buy FFB from supplier or independent farmer. Mechanism of FFB price complaint from external party, for example complaint from smallholder is regulated in SOP Communication and External Complaints Handling No. SOP-AGR-044-R01 dated July, 3 2017.

Criterion 6.11: Growers and millers contribute to local sustainable development where appropriate.

Findings: Compli- Results interview with the CSR Department explained that CSR program to be evaluated each ance sta- year with the aim to see the level of success and bene-fits, usually held in December each tus: year. CSR program for the next year is based on the evaluation of CSR and based on input Yes

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Page 46 of 91 from Musrembang ac-tivities at the district level, sub district level and village level. The com- No pany has participated in the development of community around the estate through education, N.A health, infrastructure, productive business, sports, art, culture and religious activities. The 2019 CSR program budget for economic, environmental, educational and socio-cultural fields. NCR No : Local people are given the opportunity to become workers and collaborative operational part- nerships. Example of CRS realization 2018 and 2019: (1) Village road maintenance (grading compaq) in villages around the estate; Honor of the management of the learning house (improvement of home study management capacity); (3) Help the traditional ceremony erau in Nehas Liah Bing Village; (4) Post-harvest traditional ceremony assistance in Miau Baru Village; (5) Aid appreciation of the community in the surrounding villages around. Companies provide institutional strengthening training to Plasma such as financial management, organizational management, and group dynamics and so on. Criterion 6.12: No forms of forced or trafficked labour are used.

Findings: The company has a policy to respect no forms of forced or trafficked labour are used. The policy is stated in the Quality Manual (PDM-AGR-R05) document, valid since 1 January 2017, Point 10.2. The Company has a policy commitment of not to use trafficked labor and does not employ labor who has been forced. HRD is responsible for selecting workers under age of 18 Compli- years, do not accept and does not employ trafficked labor. Results of interviews with HRD and ance sta- workers unions, it was known that all the company's workers is legal, there is no illegal traf- tus: ficked labor. Yes Employee’s work based on contract labor agreement that contains agreements include work- No ing time, depend-ents, payroll and consent of both parties. Working hours, deductions, overtime, sickness, holiday entitlement, maternity leave, reasons for dismissal, period of no-tice, N.A etc described in Company Regulations/Peraturan Perusahaan (PP) years 2017-2019 which have been agreed between the employees (represented by SPSI) and company. NCR No : The tracking result on the list of employees who worked in company on August 2019, It was noted no trafficked labor was found. The company employs a permanent worker. Employment contracts agreement between employers and employees is in Indonesian language that is easily understood.

Criterion 6.13: Growers and millers respect human rights.

Findings: The company has a policy to respect human rights. The policy is stated in the Quality Manual (PDM-AGR-R05) document, valid since 1 January 2017, Point 10.2: Respecting Human Rights issue, included rights of all workers to association and negotiate collectively and give same opportunity in working. This policy has been communicated to workers, customers and suppliers. Human rights socialization is also provided to third parties (contractors) visually and also set forth in each letter of employment agreement. The person responsible for disseminat- Compli- ing human rights policies is the HRD and Public Relations Department (HUMAS). ance sta- Checks on documentation of socialization obtained evidence that the company has communi- tus: cated the Human Rights Policy to the various levels of employees and external stakeholders. Yes Among others: No  Meeting Note of Human Rights Policy Socialization at Mill and Estate, 16 April 2019, N.A attended by workers.  Meeting Note of Human Rights Policy Socialization at Mill and Estate, 7 May 2019, at- NCR No : tended by workers and external stakeholders.  Meeting Note of Human Rights Policy Socialization at Mill and Estate, 23 July 2019, attended by workers and external stakeholders. During audit and based on verification on public consultation with stakeholders and interview with employee could demonstrated that there was no cases of hu-man rights violations in company.

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Criterion 7.1: A comprehensive and participatory independent social and environmental impact assessment is undertaken prior to establishing new plantings or operations, or expanding existing ones, and the results incorporated into planning, management and operations. Findings: Social Impact Assessment for PT DSN and PT DWT (estate and POM) was carried out on 2011. The SIA was conducted through participatory method invloving all relevant affected parties and stakeholder. There was community participatory evidence i.e. list attendance of SIA process in surrounding villages. Focus group disscussion held in Nehes Liah Bing Village and Muara Wahau Village on October 12, 2011; in Benhes Village, Diak Lay Village on October 14, 2011, in Wanasai Village on October 15, 2011, in Miau Baru Village on October 16, 2011, in Long Wehea Village and Jak Luay on October 17, 2011, in Pantun Karya and Wahau Baru on 19 October 2011. The SIA review includes: socio-economic, demographic, land ownership, cultural, health, and so on. Indicative social components indicated will be managed and monitored, among others: population relocation, land acquisition, access to resources, accident and health risks, community perceptions, employment, marginalization of minor groups, social conflicts, income increase, human resource capacity building, organizational strengthening, changes in environmental habits. Com- The SIA was conducted through participatory method invloving all relevant affected parties pliance and stakeholder. There was community participatory evidence i.e. list attendance of SIA pro- status: cess in surrounding villages. Focus group disscussion held in Nehes Liah Bing Village and Yes Muara Wahau Village on October 12, 2011; in Benhes Village, Diak Lay Village on October No 14, 2011, in Wanasai Village on October 15, 2011, in Miau Baru Village on October 16, 2011, in Long Wehea Village and Jak Luay on October 17, 2011, in Pantun Karya and Wahau Baru N.A on 19 October 2011. The Company has some plans to decrease negativeand to increase positive impacts of company existence.Those plans are documented in companys Social Managing Plan (Rencana NCR Kelola Sosial Perusahaan). The company also monitors the social impact. Mitigation plans, No SIA implementation and monitoring are implemented by the CSR Department once a year. Company has reviewed the social impact plan taking into account the social problems occurring usually around company. Reviewing has occurred through stakeholder meeting. Company also has given its concern to the farmers which was done by counseling activity about how to- cultivate palm oil. This Social Impact Management Plan is routinely reviewed every 6 months. The last review has been conducted and documented in June 2018. Three methodological actions have taken in order to gain stakeholder participations in Social Impact. Management Plan review process, such as direct interview, discussion and workshop with stakeholders. Company has reviewed the social impact plan taking into account the social problems occurring usually around company. Reviewing has occurred through stakeholder meeting. SIA report consist of identified social impact of scheme smallholder which is the surrounding villages ask the company to prepare smallholder area for them as already done.

Criterion 7.2: Soil surveys and topographic information are used for site planning in the estab- lishment of new plantings, and the results are incorporated into plans and operations. Findings: Compli- ance sta- There are soil suitability maps or soil surveys by R&A DSN Group for the new development tus: area that used to establish the long-term suitability of land for oil palm cultivation. According Yes to the map, the company’s new development areas are categorized as suitable for oil palm No plantation. According to the topographic information the company’s new development area has slope N.A class 0 – 15%. The company has established adequate mechanism to guide the planning of drainage systems, roads and other infrastructure that will be implemented during plans NCR No : and operations. Criterion 7.3: New plantings since November 2005, have not replaced primary forest or any area required to maintain or enhance one or more High Conservation Values.

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Findings: As mentioned on the table 5 section 2.5 above, all oil palm plantation in PT Dewata Sawit Nusantara from Melenyu 1 to Melenyu 4 estates were planted after year 2005, PT DSN company has conducted an HCV assessment for their area after the land opened. According to LUCA report there is no Forest areas with complicated vegetation structures and canopy strata and ecological functions. And No Primary forest (primary dry land forest, primary swamp forest and primary mangrove forest). The LUCA was reviewed and was approved by RSPO Compensation panel and the result as seen on email from RSPO adated August 22, 2016. Reviewer accepted the analysis made by the Company. Nonetheless, calculation by the Company is higher as compared to reviewer’s calculation in terms of total area. It has to be noted that, Thicket (belukar) was categorized as vegetation coefficient 0 by the company and was agreed by the reviewer based on explanation given by the Com- pany. Based on this review, total area of raw liability for the Company is 1,073.6 ha with conservation liability of 28.26 ha. The HCV document was done by Daemeter consulting and reported in year 2012, the HCV assessment was carried out after the clearing of the land and the plantation started. Due to the land has been cleared since November 2005 without prior to and adequate HCV assessment the company make the compensation plan, the concept note was approved by RSPO according to email from Dillan Sarim dated August 14, 2017. The total net conservation liability of PT. Dewata Sawit Nusantara liability under the RSPO compensation mechanism is 28.26 ha according to approved LUCA review, the compensation Plan for Environ- mental Impacts of loss of HCVs 1 – 3 has been decided. The proposed compensation activities is off-site avoided planned deforestation of tropical lowland forest in Laman Satong Vil- lage forest, West Kalimantan, Indonesia. No compensation activities are required to be conducted by PT DWT, because the company that are relevant for this proposed compensation plan do not have cases related to HCVs 4, 5, and 6 as it was reported in the ap- Compli- proved LUCA reports. ance sta- The HCV assessment was conducted by HCVRN licensed assessor from Daemeter con- tus: sultant with comprehensive and prepared in consultation with the affected stakeholders sur- Yes rounding company area, as recorded on HCV assessment report such as from representa- No tive from vilages as mentoned below: Deabeq (15 Oc-tober 2011, 28 participants); Beanhes N.A 14 Ocotober 2011, 15 participant, Diak Lay 14 Ocotober 2011, 19 participant),Muara Wahau,Nehas Liah Bing ( 13 Ocotber 2011, 44 participant),Miau Baru (16 Oktober 2011, NCR No : 37 participant), Long Sep (18 Oktober 2011, 15 participant), Wana Sari, Wahau Baru (12 October 2011, 8 participant). The company conducted land clearing11 Nov 2005 – August 2008. The company conducted HCV Assessment May 2008 and received final report in year 2012.

The company implement RSPO New planting procedure version year 2010. RSPO New Planting Procedures and has document-ed the assessments and plans according to the RSPO templates issued in May, 2010. TUV Reinland auditors’ conducted desk study and verified all the re-lated documents since 13& 14 August 2012. PT DWT has record of HCV management plan for 2019. Moreover, the HCV management was devided into detail action management plan per month to make easy the HCV monitoring and management control. The detail action management plan consist of information regarding peri-odically monitoring to all HCV area, safeguard of HCV area, enrichment of vegetation for HCV area, and socialization with all stakeholders (all level workers and surrounding community) also with scheme smallholder. The HCV detail action management plan also clearly mentionded the person incarge responsible to carry out the monitoring and management. Based on site verification to the Melenyu 1, division 2 (Sungai Ledik; HCV 4.1 area) and Melenyu 4 estate, near of division 13, the HCV area condition is protected and maintained well. There is no encroachment from the not responsible person against to HCV area. Based on tracking activities during HCV verification the HCV area was secondary forest with high density forest, the RTE species habitat still exist, proven by found the Orangutan nest and foodprint of Helarctos malayanus, also Eudroxylon zwageri The company provide Areas required by affected communities to meet their basic needs, taking into account potential positive and negative changes in livelihood resulting from proposed operations.

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Criterion 7.4: Extensive planting on steep terrain, and/or on marginal and fragile soils, is avoided.

Compli- ance sta- Findings: tus: Findings: Yes No marginal and fragile soils, including excessive gradients and peat soils within the Es- No tates. Based on the map of the slope classes is known that the level of each slope of the N.A Estate between 0 – 15%. NCR No :

Criterion 7.5: No new plantings are established on local people’s land where it can be demonstrated that there are legal, customary or user right, without their free, prior and informed consent. This is dealt with through a documented system that enables these and other stakeholders to express their views through their own representative institutions Findings: Company has a procedure to identify the legal right, tradition and the people who has right Compli- to get the compensation No. SOP-AGR-058-R01 dated November 2, 2015 about Lan Loss. ance sta- That procedure has taken into account the gender differences in the ability to claim rights, tus: owner-ship and access to land; the difference between mi-grants and communities that had Yes long existed; and the difference between the proof of legal ownership and communal own- No ership of ethnic groups or indigenous peo-ples.The procedure has been communicated to the stakeholders during the stake-holdermeeting. Checks on the records and interviews N.A with the local communities during public consultation confirmed that there is no current claim on any land. Based on HCV studies and SIA report there are no customary rights of NCR No : local com-munity. An interview with the Chief of Local Community confirmed that they have no customary rights disputes. Criterion 7.6: Where it can be domenstrated that local peoples have legal, customary or user rights, they are compensated for any agreed land acquisitions and relinquishment or rights, subject to their free, prior and informed consent and negotiated agreements Findings:

Findings: Compli- Company has a procedure to identify the legal right, tradition and the people who has right ance sta- to get the compensation No. SOP-AGR-058-R01 dated November 2, 2015 about Lan Loss. tus: That procedure has taken into account the gender differences in the ability to claim rights, Yes owner-ship and access to land; the difference between migrants and communities that had No long existed; and the difference between the proof of legal ownership and communal ownership of ethnic groups or indigenous peoples.The procedure has been communicated to N.A the stakeholders during the stakeholdermeeting. Checks on the records and interviews with the local communities during public consultation confirmed that there is no current claim on NCR No : any land. Based on HCV studies and SIA report there are no customary rights of local community. An interview with the Chief of Local Community confirmed that they have no customary rights disputes. Criterion 7.7: No use of fire in the preparation of new plantings otherthan in specific situations, as identified in the ASEAN guidelines or other regional best practice Findings: All estates do not conduct open burning for land clearing. This is in accordance to the Zero Compli- Burn Method under the section on Land Clearing, Preparation and Planting listed in: ance sta- • Quality Manual No. PDM-AGR-R05 dated January 1, 2017. At point 7.3 it stated that tus: the implementation of Zero Burning policy is carried out on all aspects of plantation Yes management. No • Working Instruction of Land Clearing (No. Doc: IK-AGR-OLP-01-R03) stated that Land N.A Clearing (new development and replanting) conducted without burning. NCR No : There was no open burning sighted in any of the landfills as well as workers and staff quarters during the field visits.

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Other evidence that the company has implemented zero burning policy is at the time of land clearing in Block G15, D16, G17, G18 and F32 at Melenyu Estate 3 in 2009, Block E74, E75 and E76 Melenyu Estate 2 in 2011, Block I101, I102 Melenyu Estate 1 in 2013 and Block C66B, C67B at Melenyu Estate 4 in 2014. The company can show evidence of land clearing which is not done by burning. The evidence in the form of Work Agreement Letter, Minutes of Job Inspection and Photos of activities. Furthermore, based on field observations to Estates there is no ex-burning. Criterion 7.8: New plantation developments are designed to minimize net greenhouse gas emissions. Findings: The company has not conducted an assessment to identify the carbon stock of the proposed development area and major potential sources of emissionsthat may result directly Compli- from the development , because the company open mostof the land before year 2015. ance sta- There is 30 ha planted in year 2015 however the land clearing was conducted before year tus: 2015. Yes The company calculate the GHG emision. However not specific for new development area, No the calculation result for periode year 2018 is 1.17is .tCo2/ha for CPO and PK. The meth- N.A odolody used to calculate following RSPO GHG tools verson 3.01. The company made a plan to minimise net GHG emissions which takes into account avoid- NCR No : ance of land areas with high carbon stocks and/or sequestration options integrated with company’s program for conservation area (HCV manageent and monitorig plan) and also RKL/RP document to mitigate the emision. Criterion 8.1: Growers and millers regularly monitor and review their activities and develop and implement action plans that allow demonstrable continuous improvement in key operations. Findings: Findings: Action plans for continual improvement are implements and on-going as found below and described further in the respective criterio. For instance the emission reduction and GHG mitigation plan, the PT DSN POM-6 and PT DWT has record of renewable energy source from shell and fiber to reduce fosil fuel used. Moreover, estate also has program to reduce Compli- the emission from chemical (fertilizing and spraying) activity through the dosage application ance sta- management. tus: • The company has a program for continual improvement 2019. The continual improve-ment Yes program e.g. inter-terrace and mechanic fertilizer at inter-terrace area for Estates with ob- No jectives optimize of productivity, increase harvesting productivity, simplify fertilizer applica- N.A tion. • Reduction in use of pesticides: no paraquat application since 2014 (Criterion 4.6) NCR No : • The company has conducted environmental impact management and monitoring plan (RKL RPL) (Criterion 5.1). • The company has using the Palm GHG calculator to calculate the emission (Criterion 5.6).

•Social impacts (Criterion 6.1): •Encourage optimising the yield of the supply base:

The following is a summary of findings made for the criteria listed in the RSPO Supply Chain Certification Year 2017 with selected supply chain model MB for detail information about company’s compliances to RSPO SCCS are explained on below:

2. RSPO SCCS

1. General requirement

5.1 Applicability of the general chain of custody requirements for the supply chai

Findings: Compli- PT Dharma Satya Nusantara Palm Oil Mill 6 as processor of FFB become palm oil and ance sta- palm kernel is the entitity that has legal ownership and physically handles RSPO Certified tus:

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Page 51 of 91 Sustainable oil palm products at a location Muara Wahau Viilage, Kutain Timur District, Yes East Kalimantan under the control of the organization including outsourced contractors for No product transportation. N.A The company receive FFB from several sources i.e. supply based company’s as certified estate i.e. PT Dewata Sawit Nusantara consist of 4 certified estate Melenyu 1, melenyu 2, melenyu 3 and Melenyu 4, other certified estated under PT DSN Tbk, I,e, PT Dharma Agro- NCR No : tama Nusantara, PT Dharma Intisawit Nugraha, and non certified FFB from patnership smallholders program. The company as operation site is under PT DSN Tbk as parent company) is RSPO member with membership number 1-0135-12-000-00 on behalf PT Dharma Satya Nusantara, Tbk since date on December 04, 2012

5.2 Supply chain model

Compli- Findings: ance status: Following the nature of company’s incoming material (FFB) are from certified sources and Yes non certified source (from Kemitraan/ patnership program) and the company’s has not spe- No cific line to distingush material and production process for certified and non certified prod- N.A uct, the company decided to implement Mass Balance supply chain model. NCR No :

5.3 Documented procedures

Findings: The mill have a set procedures to ensure the implementation of all elements of the applicable supply chain model specified. The documents available cosist of:

The documents has been updated regularly following the changes of mill operation condition. The records of implementation such kind document are keep maintained and updated. The company assigned mill head as responsible person and authority over the implementation of these requirements and compliance with all applicable requirements. As stated on Job description CCP-Estate, Mill 6 & despact sigend on July 2019, the letter have included description of responsibility and authority such as - Ensuring the implementation of SCCS (RSPO & ISCC) program MB CPO and calculation og GHG emision. Compli- - Reporting to coporate management representative for implementatiin systeme perfor- ance sta- mance tus: - Monitoring and realization of certified product production according to the defined quota Yes from RSPO. No - Etc. N.A - As observed during audit, the management representative has able to demonstrate aware- ness of the organization’s procedures for the implementation of this standard. NCR No : The company have procedure for internal audit, i.e. SOP-AGR-040-R03. Valid from October 1st, 2015. The internal auditor is conducted regularly at least 1 a year as mentioned on the procedure section 4 page 4 of 4. The mill has internal audit program namely document Op- eration Audit departement, program Kerja Operation Audit(management System) year 2019 was planned that internal audit program for POM 6 will be conducted on March 2019 and September 2019. The last internal audit was on March 14 to 16, 2019. The internal auditor team consist of 2 mill internal aditors i.e. Mr. Bagus TriNugroho and Mr. Agus Sugiharto. The result of internal audit have recorded on document Non Conformity and Observation In- ternal Audit for Semester 1 , thera are 7 non confomities and 4 potential for improvement and 4 positive observation. The mill have appropriate correction & corrective action to elim- inate the cause of non conformity. To ensure that the RSPO SCCS system in the mill conforms to the requirements in the RSPO Supply Chain Certification Standard and the RSPO Market Communications and Claims Documents and effectively implements and maintains

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the standard requirements within its Organization. The outcomes of the internal audits and all actions taken to correct noncon- formities have been subject to management review that was conducted on July 24 & 25, 2019 (further detail on 5.13). The Mill have maintain the internal audit records and reports properly.

5.4 Purchasing and goods in

Findings: As mentioned on the table 2 above the company received FFB from several sources. There is internal sourcers and external sources. The internal sources from PT Dewata Sawit Nusantara as mill supply based with 4 estates i.e. Melenyu 1, Melenyu 2, Melenyu 3 and Melenyu 4, other certified estate under PT DSN Tbk group such as PT DAN and PT DIN, according to incoming FFB procedure SOP-Agr-079-R00 issued on August 01, 2017 , incoming FFB will acompanied by relevant documents such : From company’s internal estate Bon trip with barcode while from patnership using Nota Pengiriman TBS ( FM-OLP-33-R02); and reciving notes (FM-PRO-01-R02) will issued after weighing at Weighbridge information stated on Bon trip area barcode about profile FFB from respective estates, driver name, afdeling number, in the state the barcode will inform about FFB volume and bunch quantity. Reciving notes will inlcude information about ; The name and address of the mil;  The name and address of the estate;  The delivery date; Compli-  The date on which the documents were issued; ance sta-  A description of the FFB, tus:  The quantity of the FFB recived Yes  Truck number; No  Supply Chain certificate number of the estate; N.A  A unique identification number While for external sources FFB from non certified sources will acompanied by relevant NCR No : document  The name and address of the mill;  The name and address of the supplier;  The delivery date;  The date on which the documents were issued;  A description of the FFB,  The quantity of the FFB delivered;  Any related transport documentation;  A unique identification number The information have been complete and can be on document NPB G254179, Nota no. 0074785; NPB No. H001050, Nota No. 0074791. Incoming FFb from kemitraan Nota Pengiriman TBS etc. The mill has procedure for handling non-conforming oil palm products and/or documents, i.e. explained on IK-AGR-MS-04-R11 issued on May 27, 2019. The company ahs not claim CSPO according to RSPO requirement yet, the implementtaion of this procedure will be check after the mill claim as CSPO.

5.5 Outsourcing activities (If applicable)

Findings: Compli- There Mill uisng outsourcing companies for CPO tranportation activities. The mill has con- ance sta- tractual agrement with outsourcing activitiescovering the outsourced process with each tus: contractor through a signed and enforceable agreement with the contractor. However the Yes contract still not mentioned about, statement that “ the onus is on the site to ensure that cer- No tification bodies (CBs) have access to the outsourcing contractor or operation if an audit is deemed necessary” . As seen on contract no006/DSN/POM6 /2019 between mill and com- N.A pany PT DSN POM 6 and Irwansyah. The mill has a documented control system for the outsourced process which is communi- Observa-

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Page 53 of 91 cated to the relevant contractor, i.e. SOP-AGR-028-R.03 issued on December 26, 2016 , tion the procedure has been communictaed to all outsourcing workers as seen on the meeting . on September 06, 2019 just in time of intitial certification audit attended by 12 contractor from transporter companies. The mill have not used contractor for the processing or physical handling of RSPO certified oil palm products,except for tranportation activities i.e: Please provide list of outsuourcing companies.

Contractor name Cotract No, activities Cotract validity H. Anwar 011/DSN/POM6/20 Road tranker 1 July 2019 to 31 19 December 2019 Consumen Coopera- 003/DSN/POM6/20 Road tranker 1 July 2019 to 31 tion/heling Ton Kas 19 December 2019 Wang Bling 008/DSN/POM6/20 Road tranker 1 July 2019 to 31 19 December 2019 Irwansyah 006/DSN/POM6/20 Road tranker 1 July 2019 to 31 19 December 2019 Elsuf 007/DSN/POM6/20 Road tranker 1 July 2019 to 31 19 December 2019 Agus Antonis A.MD 012/DSN/POM6/20 Road tranker 1 July 2019 to 31 19 December 2019 Kamruzzaman 013/DSN/POM6/20 Road tranker 1 July 2019 to 31 19 December 2019 Martinus Aken 003/DSN/POM6/20 Road tranker 1 July 2019 to 31 19 December 2019 Lebin 012/DSN/POM6/20 Road tranker 1 July 2019 to 31 19 December 2019

However the contract between the transporter and the mill regarding permitting CB to conduct an evaluation at the outsourced location / activity should celarly mentioned, this is potential for improvement since the mill has not claim certified yet, The auditor will cheking in every next audit if mill have new contratcor should inform its CB of the names and contact details of any new contractor used for the processing or physical handling of RSPO certified oil palm products in every audit conducted.

5.6 Sales and goods out

Findings: The mill still not claim as certified for their product waiting for the certificate issued. The mill send the CPO to storage tank in Miau Baru while for PK the mill send to Palm Kernel crusher belong to PT DSN Tbk accompanied by dispact document. For current situation the company has dispatch document such as Bukti Expedisi (FM-DIS-01-R02) and Nota pengiriman barang FM-PRO-16-R00for every product delivery suah as: SPBE No. 973/DSN.POM6/VIII/2019 for delivery PK to PT DSN PKCP 04 Muara Wahau and SPBE No. 001/4639/PSKB/VII/2019 for CPO to Muara wahau Dispatch and storage. Compli- Information mention for delivery document i.e: ance sta- - The following information for CSPO/CSPK tus: - products is made available in document form: Yes - The name and address of No - the buyer; N.A - The name and address of the seller; - The loading or shipment / delivery date; NCR No : - The date on which the documents were issued; - A description of the product, including the applicable supply chain model - (Identity Preserved, Segregated or Mass Balance or the approved - abbreviations); - The quantity of the products delivered; - Any related transport documentation; - Supply chain certificate number of the seller; (still not mentioned, waiting for certifieca- tion approval)

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- A unique identification number. The Information has been provide completed on the document for example, delivery notes, shipping documents and Specification documentation).

For this intial certification audit the mill has not make shiping anouncment yet. This will be chekced during next surveillance audit including the implementation of shipping documents.

5.7 Registration of transactions

Compli- Findings: ance sta- PT DSN POM 6 has registered in RSPO IT Platform, with registered number tus: RSPO_PO1000008654.The mill has established a specific SOP for registration of every Yes transaction to RSPO palm Trace as required by the RSPO-SCC standard. No The mill has not registered all certified product transaction in RSPO Palm trace waiting for N.A the RSPO certificate issued. The trasaction will be checked after they get certificate. Current situation the company sale CPO and PK as conventional. NCR No :

5.8 Training

Findings: The mill has have a training plan on RSPO Supply Chain Standards Compli- Requirements as seen on training plan for year 2019 (FM-HCD-19-R00) from level 3 Down ance sta- and 4 up level, training plan dated on January 02, 2019. The plan is approved by Head of tus: HRD) Yes The list of training program are: No - SCCS training planned on March 2019 and relaization on August 2019 N.A - CPO and PK production process planned on July 2019. - Etc. NCR No : SCCS training were done on August 20, 2019. Training records such as list of participant and photograph. Training were attended by 18 participant.

5.9 Record keeping

Findings: The mill have establish procedure for maintain accurate, complete, up-to-date and accessible records and reports covering all aspects of these RSPO Supply Chain Certification Standard re-quirements, as stated on document Procedure for document control (No. SOP- AGR-036-R04) issued date 3 October 2016). The procedure explained that the retention times for all records stated in Time Retension of Document (FM-MS-18-R00 revision 0 effective date issued date 3 October 2016). As stated on control of records procedure the retention times for all records and reports Compli- must be kept a minimum of 10 (ten) years and must comply with legal and regulatory re- ance sta- quirements and be able to confirm the certified status of raw materials or products held in tus: stock. Yes The mill is able to provide the estimate volume of palm oil / palm kernel oil content (sepa- No rate categories) in the RSPO certified oil palm product and keep an up to date record of the N.A volume purchased (input) and claimed (output) over a period of twelve (12) months, as seen on material balance document, i.e. document NCR No : name PT DSN POM 6 periode January to December 2019 Total incoming FFB is: Total FFB procesed in year 2018 is 322,508. 50 Tonnes Total CPO produce in year 2018 is 78,659.86 Mt Total PK produce in year 2018 is 13,255.10 Mt Carry over FFB from December year 2017 is 620,655 kg The rest FFB in December 2018 carried over to January 2019 is 246,458 Total production CPO year 2018 is total incoming FFb year 2018 plus carry over FFB De-

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Page 55 of 91 cember 2017minus carried over FFB to January 2019 times OER i.e. (322,134,310 +620,655-246,458) X 0.2439=78,657,385.86 kg Stock CPO from year 2017 186,627; stock PK from year 2017 is 75,174 kg. For initial assessment the mill still not claim their product sold as RSPO

5.10 Conversion factors

Compli- ance sta- Findings: tus: The mill have mechanicm to calculate conversion factor. The mill using Conversion factor Yes following as actual calculation. To provide a reliable estimate for the amount of certified output available from the associated inputs. For year 2018 the OER 24.39% and KER is No 4.11%. For year 2019 estimate OER is 24.60% and KER is 4.40% estimation, as men- N.A tioned on document Plan & realization production for Pom 6 PT DSN year 2019. NCR No :

5.11 Claims

Compli- ance sta- Findings: tus: Due to this is initial certification audit, the mill has not claim yet the product as certified cer- Yes tified, however since the trading of certified product will under PT DSN Tbk, the mechanism No to claim and communication for certified product will follow the existing SOP belong to PT DSN Tbk RSPO communication and claims following the requirement from RSPO. The im- N.A plementation of the procedure will be verify during next surveillance audit. NCR No :

5.12 Complaints

Compli- ance sta- Findings: tus: Findings: Yes The Company has established and maintain documented procedures for Communication No and Handling External Complaint i.e. No. SOP-AGR-044-R01 issued date 3 July 2017). This is initial certification audit, the implementation of the procedure will be checked during N.A next surveillance audit. NCR No :

5.13 Management review

Findings: The mill has established management review procedure SPO-AGR-041-R01 valid from No- Compli- vember 01, 2016. As stated on the procedure, the mill is required to hold management ance sta- reviews annually at planned every 3 months intervals, the management review for year tus: 2019 is planed 4 times every end of quarter, and the actual implementation was done on Yes April 24 to 25, 2019 and 2nd quarter on July 24 to 25, 2019. No The input to management review include information on: N.A  Results of internal audits covering RSPO Supply Chain Certification Standard (stated the result from internal audit). Observa-  Customer feedback (please provide the sample). tion  Status of preventive and corrective actions (please explain status from internal audit result, customer complain/others if any).

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 Follow-up actions from management reviews (please explain what the status of previous management review result is).  Changes that could affect the management system.(please provide the sample)  Recommendations for improvement.(please provide the sample). The Management Review conducted should clearly set the agenda related to customer complaints and also the resources set. This is potential for company improvement.

The output from the management review has include any decisions and actions related to: • Improvement of the effectiveness of the management system and its processes (please provide the sample). • Resource needs. (please explain pIC that will handling the improvement, and any other resources needed) 6. Supply chain models – modular requirements Module E – CPO Mills: Mass Balance

E.1 Definition

Compli- Findings: ance sta- E.1 tus: The mill is not implement physical Separation, to procees certified and uncertified FFB be- Yes cause the mill taking delivery of FFB from uncertified growers, in addition to those from its No own and 3rd party certified supply base. From the situation stated, the mill decided to claim N.A the volume of oil palm products produced from processing of the certified FFB as MB. NCR No :

E.2 Explanation

Findings: From the table.3 above, the estimated tonnage of CPO and PK products that could poten- Compli- tially be produced from all incoming certified FFB in next license periode year 2019 to year ance sta- 2020 is CPO 75,411.92Mt and PK 13,488,288 Mt. tus: The estimated tonnage of CPO and PK products will be recorded in the RSPO IT platform. Yes This figure represents the total volume of certified oil palm product (CPO and PK) that the No certified mill is allowed to deliver in a year 2020 isCPO 75,411.92Mt and PK 13,488.288 mt. The actual tonnage produced will be verified during next surveillance audit. N.A The actual implementation of all registration and reporting requirements for the appropriate supply chain through the RSPO supply chain managing organization (RSPO IT platform) as NCR No : stated on section 5.7 above will be checking duirng next surveillance audit.

E.3 Documented procedures

Findings: The mill have a set procedures and/or work instructions or equivalent to ensure the implementation of all elements of the applicable supply chain model specified. As stated on sec- Compli- tion 5.3 above as weel as the person having overall responsibility for and authority over ance sta- the implementation of these requirements and compliance with all applicable requirements. tus: The mill have documented procedures for receiving and processing certified Yes FFBs i.e. No 1. Work instruction of traceability of CPO, PK, and PKO product, Document No. IK-AGR- N.A MS-04-R09 dated October 1, 2018. The procedure describing receiving and processing certi-fied andn non-certified FFBs. NCR No : 2. Procedures for Communication and Handling External Complaint, Document No. SOP- AGR-044-R01 issued date 3 July 2017

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E.4 Purchasing and goods in

Findings: The mill has mechanism to verify and document the tonnage and sources of certified FFBs received as mentioned on work instruction of traceability of CPO, PK, and PKO product, Document No. IK-AGR-MS-04-R09 dated October 1, 2018. To know the quantity or volume of incoming certified material, the FFB truck will stop at the weighbridge and the operator will check relevant documents and issue a weighbridge ticket. The document to be verified from certified sources include delivery note stamped at the origin estate, as well as certificate code including selected SCC Model. Compli- All certified FFB will be transferred to assign loading ramp. The operator will indicate infor- ance sta- mation regarding storagelocation on each weighbridge ticket according to the relevant tus: claim. Yes The work instruction of traceability of CPO, PK, and PKO product, Document No. IK- No AGR-MS-04-R09 dated October 1, 2018 also explain how to handling incoming certified N.A raw material and certified product until dispatch process done and al-so mechanism to inform CB immediately if there is projected overproduction of certified tonnage. NCR No :

Information Amount (mt)

Total FFB receipt 322,134,310

Total certified FFB receipt 318,610,46

Total non-certified FFB receipt 3,523,850

E.5 Record Keeping

Findings:

The mill have record and balance all receipts of RSPO certified FFB and deliveries of RSPO certified CPO and PK on a real-time basis. Example as seen on material balance document, i.e. Monthly Recapitulation report year 2018 & 2019 (until August 2019.  Total incoming FFB 322,134,310ton Compli-  FFB from area include on certification scope is318,610,46 ton ance sta-  FFB from area not include on certification scope is 3,523,850 ton tus:  Total FFB procesed in year 2018 is total incoming FFB year 2018 plus carry over Yes FFB December 2017minus carried over FFB to January 2019 times OER i.e. No (322,134,310 +620,655-246,458) X 0.2439=78,659.86 Mt kg N.A  Total CPO/PK produce in year is78,657,385.86mt and 13,255,099.64mt  Total potential CSPO/CSPK produce in year is 77,709,091.2 and 13,094.89 NCR No :  Total potential non CSPO is 950.73 and CSPK produce in year 2018 is 160.21 inThe FFB stock in year 2018  Total CPO sold in year 2018 is 76,232,.71 is conventional transaction.  The OER is 24.39% and KER is 4.11%

The mill have not sell short yet . All transaction is not claim certified yet.

6.2. Compliance to RSPO Role of Market Communications & Claims :

Chapter is applicable by client : ☐ Yes ☒ No

If yes, what is type of communication applied by client : General Corporate Communication (off product claim) Business to Business Communication Business to Consumer Communication

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Following the above selected communication method, please describe compliaces to company compliance to RSPO role of market communications and claims section 4 / 5 / 6 : …………...... …………………………………………………………………………………………………………………….

If the company using the RSPO trademark, this applied on :  The company website or digital platform  business cards  The company / product promotional use (leaflet, brochure, banner, etc)  Document/report : ………………………………………………………………………………………….

The company demonstrate that : The company hold a trademark license from the RSPO ☐ Yes ☐ No Approval for off/on product trademark and/or label used ☐ Yes ☐ Yes recieved

If yes, please explain the approval of off/on product trademark and/or label from RSPO ………………………………………………………………………………………………………….

6.3. Compliance to Book & Claim requirement :

Chapter is applicable by client : ☐ Yes ☒ No if yes, please complete information require in appendix 8.

If not, please delete appendix 8

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7.0 Status of Previously Identified Non-Conformities

This audit is intial certification audit, the is no previous audit finding. This section is not applicable at this time.

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

A total of 6 nonconformances were identified during the main certification assessment. These consisted of 2 major non-conformities and 4 minor non-conformities. For the major non-conformances, the company has taken the necessary corrective action to close these non-conformances within 90 days from completion of the assessment time (closing meeting), and this was verified by the audit team through an documents verification submitted by the company. For the minor non- conformances, 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 explained below:

8. 1. Major non-conformities

Response Date of clo- Evidence Observed / NCR Verification of Corre tion/Corrective sure Ref NCR No. raised Correction Corrective Action action Auditor/ Conclution "1. The company has not 1. Conduct a meet- "1. Investigate / The company prvode evidences been able to show maps ing with Pulau identify the exist- such as: created through the partic- Benia farmers ence of other com- 1.Map with apporval with farmers ipatory mapping process group involved all munity's arable land group Pulau Benia. for land cultivated by the community that in the PT DWT ar- Pulau Benia farmer group cultivate on the ea, and carry out with an area of 145 ha land and the participatory map- RSPO02 Agusto he owner of 2.3.1 and logpond area 12.32 ping of these lands. 25/10/2019 738 logpond. ha owned by Mr. Agusto 2. Together with the Closed 2. The company has not 2.To conduct so- community involved been able to show the cialization and in compiling land document of agreement preparation for par- management with farmers group of the ticipatory mapping. agreements for 2. Minutes meeting and Benia Island explaining 3. Conduct partici- other lands in the agreement for land the commitment of the two patory mapping of PT DWT HGU area managament inside

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Response Date of clo- Evidence Observed / NCR Verification of Corre tion/Corrective sure Ref NCR No. raised Correction Corrective Action action Auditor/ Conclution parties regarding the sta- land cultivated by " company’s HGU. The tus of land management Pulau Benia farmer agrement is company allow currently cultivated by the groups and Agusto the farmers (Sukamaju, farmer group which as the owner of Log PUlau Benia Miau Baru) to well with Mr. Agusto, the pond inside com- logpond owner located in- pany’s HGU. manage the land with total side company’s HGU. " 2. To make written area 145 ha (Pulau Benia) agreement docu- as agreed on the map and ment between PT the farmers will not expand Dewata Sawit anymore the land . Currently Nusantara with the the land managed by the Pulau Benia farm- farmer group and the ers group and Log- logpond owner, as agreed. pond Agusto regarding the status and method of land management .

3. Participatory map between PT DWT and Agusto signed by both parties.

4. Minutes meeting and agreement for land managament inside

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Response Date of clo- Evidence Observed / NCR Verification of Corre tion/Corrective sure Ref NCR No. raised Correction Corrective Action action Auditor/ Conclution company’s HGU. The agrement is company allow Agusto to op- erate Logpond to manage the land with total area 12.3 ha as agreed on the map and the farmers will not expand anymore the land

1. Revise HIRAC The company provided revised Conduct a risk analy- No. 0012 / DWT- HIRAC document and photograph sis at HIRADC ac- PH / II / 2019 doc- relating the suitable PPE for the The workers that conduct cording to the type of ument by evaluat- workers conduct beneficial plan maintain beneficial plant work and its condi- ing each occupa- aimaintenance. The correction is were not use appropriate tions and handle risks tional risk based on accepted. PPE as required by risk according to the re- risk level, probabil- The effective implementation of cor- 25/10/2019 RSPO 4.7.3 register documents, i.e. sults of the analysis. ity of occurrence rective action will be verified duirng . 02740 The risk register require Provide PPE as re- and severity next surveillance audit. Closed helmet but the workers quired by risk register 2. The Draft HIRAC did not provided and did document. is reviewed by field not used it. operations (Assis- tant Afdeling, EH and PH), before being authorized

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It is recommended by the lead auditor to award the system of the company with a certificate pursuant to the above-mentioned RSPO standards after eliminating the non-conformities rated as “major”.

8.2. Minor non-conformities

Response Date of Verification of pro- closure Ref NCR No. Evidence Observed / NCR raised posed Corre Auditor/ Correction Corrective Action tion/Corrective action Conclution Proposed correction To provide sociali- To included company’s and corrective action is zation and infor- ethical code policy in accepted. To be mation regarding the agrement between The effective imple- checked ethical code policy company’s and vendor mentation will be veri- RSPO There is no evidence that vendors and next 1.3 for vendors and and contractors. fied duirng next sur- 02739 contractors have been socialized re- surveil- contractors. Socialization about veillance audit. garding ethical code policy. etichal conduct shall lance ". be conducted to all audit. new employee, and periodic meeting. The provide Identi- 1.Identify all communi- Proposed correction fication and agree- ty carrying out activi- and corrective action is ment documents ties around the bound- accepted. are available with aries of PT DWT's The effective imple- To be Evidence relate to identification of the community to HCV area mentation will be veri- checked community rights directly adjacent to PT protect the HCV ar- 2. Socialization of the fied duirng next sur- 5.2 RSPO next Dewata and evidence of negotiation to ea. importance of HCV ar- veillance audit. 5 02741 surveil- mutually protect the HCV area agree- eas ment cannot be demonstrated 3. Make an agreement lance with the community re- audit. garding the PT DWT HCV area and community activities There was a discrepancy between the To revise GHG cal- 1. Revised SOP- Proposed correction To be 5.6. RSPO recapitulation of fertilizer used and in- culations using da- AGRA-051-R01 con- and corrective action is checked 3 02742 formation on total fertilizers consump- ta that has been cerning Greenhouse accepted. next tion in the GHG calculation for example: authorized by Plan- Gas Mitigation. The effective imple- surveil-

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NPK 13 in the recap of use of 11872.75 tation Head, is con- 2. The company make mentation will be veri- lance tons and GHG calculation data of sistent and can be regulation that all data fied duirng next sur- audit. 10.980.11 tons, as well as Borat and traced to raw data used must be author- veillance audit. MOP fertilizers. records or reports ized Plantation Head before use for GHG calculation or other purposes. Update periodically In SOP-AGAR-044- Proposed correction To be stakeholder list on R01 Communication & and corrective action is checked include Vendors Handling External accepted. 6.2. RSPO Vendors and contractors have not been next and contructor list . Complaints must in- The effective imple- 3 02856 included in the stakeholder list surveil- clude criteria and mentation will be veri- mechanisms for de- fied duirng next sur- lance termining stakeholders veillance audit. audit.

It is recommended by the lead auditor to award the system of the company a certificate pursuant to the above-mentioned RSPO standards. The non-conformities identified shall be audited again in line with the timeframe during the next surveillance audit

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9.0 Noteworthy Positive Components and Potential for Improvement

9.1. Positive Observation:

No. Ref. Positive Comments

1 4.1 Good Implementation of Agriculture Practice Good relation with local community. Impression from local business regarding opportunities to coopreate with company is very well and open. 2. 6.10 Local communities are happy and increase the income from company’s exist- ency. 3. 6.2 Company has good relationship with local institution 4. 2.2.2 Company demosntrate all boundary stones are well maintained.

9.2. Potential for Improvement:

No. Ref. Potential for improvement

The company must ensure that the TPSA location on ME2 is more than 1 km from the nearest settlement. The condition of the fertilizer warehouse in ME 2 and ME 3 looks a lot of holes, the 1 P& C 5.3 risk of water entering during heavy rain is very high, especially the presence of waste and puddles of water from the rinse house in front of the ME fertilizer warehouse 2. Potential damage to fertilizer and decreased fertilizer quality before being applied Risk Assessment should be re-evaluated properly, whether PPE is required in ac- P&C 2 cordance with the risk, for example in the beneficial crop maintenance section. The 4.7.3 risk of the current condition of the fertilizer warehouse has not yet been carried out. The waste amount sent to the waste transporter is not consistent with the waste P& C amount that enters to the hazardouse waste temporary storage in the ME 3 estate, 3 5.3 in the balance sheet the amount ofdisposed waste is higher than the waste col-

lected. SCCS The effectiveness of SCCS training for outsoucing (transporter) were not evaluat- 4 5.3 ed. SCCS The contract between the transporter and the mill regarding permitting CB to con- 5 5.8 duct an evaluation at the outsourced location / activity should celarly mentioned. RSPO The Management Review conducted should clearly set the agenda related to cus- 6 SCCS tomer complaints and also the resources set. 5.13

10.0 Issues Raised by Stakeholders and Findings Pertaining to Issues

10.1 Issues Raised during Stakeholder Consultation Meeting

No. Issues Raised Management Response Auditor Verification

DSN partners actually - Rice supply from farmer groups Local business is handle partner with PT Kapas as a to the company adjust the by CSR departeent in rice supplier. CSR guided company needs and supply ca- Muara Wahau. Delayed 1 by Farmer Groups. It's pabilities of the farmer groups. payment is not regularly been three years in part- - The company will verify the truth happen it is depend on nership. The previous year of the issue about the waste. cash flow condition. The

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every month the payment, So far, the waste management company has been but this year the payment system in POM is in accord- commit to the payment per 2 months. ance with applicable regula- method as mentioned The positive thing: there tions on the agreement. are oil palm plantations so Checking to the effluent young people are unem- pond POM 6 PT DSN, ployed. the auditor can not find Issue: Waste management the black sign from the is not good, especially if mill. Since the stakhold- the rainy season overflows er also not sure where is up to the river. There is a the real location of river photo, the river is black (in- water polluted, the audi- fo from friends may be tor team did not conduct POM 6 or POM7). There further investigation. are also stories from fellow mothers who say the river is oily. There is a youth institution that deals with waste issues, but does not know the name of the youth institution. Positive thing: the scholarship program for the village is a college scholarship and after graduating from work at PT DSN. Commu- nities in villages are rarely No further investigation 2 Thank you for the appreciate unemployed, for example for positive comment. mothers are recruited for brondolan quotes, care and day care. Combustion control with a bulkhead system. The existence of POM is expected to help supply The distance from POM electricity from waste and 6 PT DSN to the com- be more economical for the municties in Muara community. There has The electricity produced at this Wahau is far enough. never been a discussion time is only able to meet some of 3 Only one village inside regarding the positive and the electricity needs for pro- company area and the negative impacts of the cessing plants community has not company. The company problem with the elec- had a discussion related to tricity supply. the management of waste oil. The opening of the Melenyu estate has 2 areas, originally a former forest of the Basuimex (logging) company. Melenyu Garden has been around Waste management licenses be- Management explana- for 7 years, if I am not mis- long to PT DSN are only for Land tion is accepted and the 4 taken, in 2010, it was only Applications, not for sale. It is al- company should follow planted because when the so listed UKL UPL and POM 6 requirement on govern- palm oil was still small, environmental permits ment license. there were already produced. At the beginning there was a problem with the community's land near the river

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with PT DSN but it was resolved. Collaboration with the community is good but needs to be improved the example of the partnership is nearing repayment. There was no land burning (land clearing) of PT DSN. Arson by the community. The company helps with the socialization of land clearing without burning. Waste (miko) is put into CSR and the public can buy it. Positive thing: same with other participants, an example of economic improvement and employment. The negative: land conflicts between communities and plantation companies, river conditions with oil The river border area is not part During field observation palm land clearing - almost of PT DWT's HGU, so PT DWT the riparian river are not all rivers are encouraged does not conduct river clearance. opened for plantation by using a tractor during PT DWT also has a river bank activities some area land clearing, what is the strengthening program, and does found with planttaion is process to restore this, not chemist on plants on the edge not belong to PT DSN how is the impact of fertiliz- 5 of a body of water. but belong to local ing and spraying on the The company will clarify again in community. However river. What is the man- PT DWT's HGU area that the this should become au- agement pattern for river community land available for ditor attention for next conservation? Examples of proof of ownership has been car- audit, if the FFB from fish served in restaurants ried out in accordance with the this area will send to now come from cage fish agreement. POM 6 PT DSN. instead of river fish like they used to. There has never been a discussion regarding the positive and negative impacts of the company. The company has already informed about job vacancies through CSR. There has never been a discussion regarding the positive and negative im- The company will re-socialize the pacts of the company. positive and negative impacts. Management explana- So that companies social- The company will disseminate tion is accepted. Will be 6 ize the positive and nega- and clarify to the public that the checked again in the tive impacts of the compa- DSN employee recruitment sys- next surveillance audit. ny. tem is open. There should be no discrimination in hiring. - Scholarship program if - For the scholarship program Management explana- you have graduated there is indeed a commitment tion is accepted. Will be 7 from work at the com- contained in the agreement checked again in the pany but if you are go- between the two parties. next surveillance audit

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ing out you have to - CSR will carry out clarifica- pay the school fees tion and reidentification of the that have been spent land in question and if there by the company. are still problems will be re- - Land issues, in the solved in accordance with HGU permit there is the agreement between the group / community company and residents. land and this has not - The company in managing been resolved by the labor is in accordance with company to date. the Manpower Act in force in - In Melenyu Estate 4 Indonesia there are still unre- solved land conflicts. - Do not immediately lay off workers when workers make mis- takes, but to approach the workers' parents first so that workers can be fostered. The existence of a company has a positive impact. There is no impact of downstream waste. The negative thing: Why is the bankruptcy of the company handed over to the community, for example in The purchase price of FFB from sending FFB to POM, outside uses the price set by Dis- Management explana- grading can be up to 1 ton, bun. Clarification will be made tion is accepted. Will be 8 how can the public com- that the grading system and the checked again in the plain about this. purchase price of community FFB next surveillance audit Determination of the price by POM are in accordance with of FFB so it is not done applicable regulations or laws unilaterally. Assistance from companies for fire control. In order for the company to empower the community by increasing local workforce absorption. So that along the river bor- Checking to the effluent der planted wooden trees. Clarification of the truth of the pond POM 5 PT DSN, So that the waste is man- statement on spilled waste. the auditor can not find aged organically with the Waste management has so far the black sign from the community and given to been carried out properly and in mill. Since the stakhold- 9 farmers, for example rice accordance with applicable rules er also not sure where is farmers. In order for cheap and regulations. Waste in POM is the real location of river fertilizer. managed internally in accordance water polluted, the audi- Never saw waste spilling with AMDAL and not used for tor team did not conduct into a river so it turned other purposes further investigation. black (POM 7). Positive thing: increase people's income per capi- It will be consulted with the au- ta, better education. thorities whether there is an obli- In the district there is a 10 gation to disseminate information monthly report on the about river borders to the District number of workers from government. the company. Program tuition fees from

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companies. Home learning program from the company. Forest and land fire socialization is often held to the community. It was once discussed at the Sub-district level regarding land conflicts in Melenyu with the Selabing community. So that the company sends the Melenyu AMDAL to the District. There has been no socialization regarding the management of river borders. So that companies add The company is still focusing on downstream products. the core business of CPO prod- Negative thing: nothing ucts.

10.2 Issues Raised during Stakeholder Interviews On-site

11.0 Certification Decision

11.1 Recommendation for Certification PT Dharmasatya Nusantara Palm Oil ill 6 and PT Dewata Sawit Nusantara as the supply based has established and maintains an effective system to ensure compliance with the RSPO principles and criteria. The audit team has confirmed through the audit process that the company’s practices complies with, adequately maintains and implements the requirements of RSPO Principles and Criteria Indonesia National Intepretation year 2016. PT TUV Rheinland Indonesia recommends that PT Dharmasatya Nusantara Palm Oil mill 6 and PT Dewata Sawit Nusantara as the supply based be approved as a producer of RSPO Certified Sustainable Palm Oil.

11.2 Date of Certificate Issued and Scope of Certificate The scope of the certificate covers production of palm oil from PT Dharmasatya Nusantara Palm Oil mill 6 and PT Dewata Sawit Nusantara and its supply base, which includes Melenyu estate 1, Melenyu estate 2, Melenyu estate 3 and Melenyu estate 4. The date of certificate issued is 19th December 2019. Further details of the certificate are as per Appendix 1.

11.3 Date of Next Surveillance Visit

The next surveillance visit is planned for September 2020.

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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 PT Dharma Satya Nusamtara. Signed on behalf of PT TUV Rheinland Indonesia

Dian S Soeminta Agustinus Triwibowo Lead Auditor Sustainability Manager Date: November 13, 2019 Date: December 06, 2019

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APPENDICES Appendix 1: Details of Certificate

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QMF: RSPO-007a-18(Rev.3.December 2018)

RSPO Intial Certification Assessment Report

PT Dharma Satya Nusantara Palm Oil Mill 6 – East Kalimantan

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QMF: RSPO-007a-18(Rev.3.December 2018)

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QMF: RSPO-007a-18(Rev.3.December 2018)

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Appendix 3: List of Abbreviations

AMDAL Analisis Dampak Lingkungan & Sosial (Social & Environmental Impacts Assessment) CPO Crude Palm Oil EIA Environmental Impact Assessment ERTs Endangered, Rare & Threatened species ESH Environmental Safety & Health FFB Fresh Fruit Bunches EFB Empty Fruit Bunches HCV High Conservation Value IPM Integrated Pest Management LTA Lost Time Accident MSDS Material Safety Data Sheets NGO Non-Government Organization NPP New Planting Procedure OSH Occupational Safety & Health PKO Palm Kernel Oil POME Palm Oil Mill Effluent PPE Personal Protective Equipment RKL Rencana Pengelolaan Lingkungan (Environmental Management Plan) RPL Rencana Pemantauan Lingkungan (Environmental Monitoring Plan) SIA Social Impact Assessment SOP Standard Operating Procedure UKL Upaya Pengelolaan Lingkungan (Environmental Management Efforts) UPL Upaya Pengelolaan Lingkungan (Environmental Management Efforts) Please add other abreviation if necessary

QMF: RSPO-007a-18(Rev.3.December 2018)

RSPO Intial Certification Assessment Report

PT Dharma Satya Nusantara Palm Oil Mill 6 – East Kalimantan

Page 83 of 91 Appendix 4: Other Achievement s and Certificatio Helds

Certification Stand- Name of mill / es- Certification Date ard / Award tate Body / Awarder Achieved achieved POM 6 ISPO TUV Rheinland Indone- Under re- sia view ISPO commision

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RSPO Intial Certification Assessment Report

PT Dharma Satya Nusantara Palm Oil Mill 6 – East Kalimantan

Page 84 of 91 Appendix 5: Audit Checklist All information has been mentioned on the section.

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PT Dharma Satya Nusantara Palm Oil Mill 6 – East Kalimantan

Page 85 of 91 Appendix 6 : List of Stakeholders Interviewed and Contacted

Name of No. Institution / Position Remarks Stakeholder Stakeholders Interviewed during Public Consultation Meeting 1. Estate Official Local Government of East Moh. Jusuf Kalimantan province 2. Estate Official Local Government of East Taufiq. K Kalimantan province 3. Labour Official Local Government of East Wartoyo Kalimantan province 4. Labour Official Local Government of East Andi Palesangi Kalimantan province 5. Estate Official Local Government of Kutai Timur Abd. Gani Sukara district 6. Ramli Labour Official Government of Kutai Timur district 7. Mahendra National Land Authority of Kutai Timur district 8. Mrs. Pardini Muara Wahau Sub-district Office SE 9. Hamzan Wadi Muara Wahau Sub-district Office 10. Local Community Association of Dayak Bisam Usat Kayan 11. Lajang Apuy Kongbeng Sub-distrct Office 12. M. Supron Muara Wahau Police Office 13. Badrun Head of Community RT 08 Nehas Liah Bing 14. Mrs. Dorkas Ding Woman Representative 15. Rudi H Kongbeng Police Office 16. Local Community Association of Dayak Hartilapno Kayan, Miau Baru Village 17. Head of Government Affair of Miau Baru Vil- Markus Anyiq lage 18. Lawai Tingai Head of SSB Cooperative, Miau Baru Village 19. Rizal Umar KS. SUTS Long Bau Cooperative 20. Head of Local Community People Dayak Mi- Balan Laway au 21. Sandi Jumri Head of Community Long Bau 22. Yonathan Luhat Karya Sejahtera Cooperative 23. Janing Usat Cahaya Miau Bersatu Cooperative 24 Sptial Plan and Land Development of Kutai Timur Bony B distric Stakeholders Interviewed On-Site 1. Okis Fertilizing foreman 2. Triastuti Fertilizer worker 3. Sutiah Fertilizer worker 4. Tursin Fertilizer worker 5. Suprapto Division II assistant 6. Sri Suco Negoro Conservation Staff 7. Rudi OA Operational 8. Anam OHS Staff PT DWT 9. Dolok Siahaan Estate Head of Melenyu 3 10. Nurjaman Estate Head of Melenyu 1 11. Fahri Division III assistant 12. Taufik Resi OHS Staff POM-6 13. Randi Grading staff 14. Eko Grading staff 15. Eko Prasetyo Engine room operator 16. Ade Triono Boiler operator 17. Watik Sustainability Representative 18. Zulkarnain Head of Melenyu Estate 4

QMF: RSPO-007a-18(Rev.3.December 2018)

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19. Misbahul Anam OHSE Assistant of Estate 20. Taufik Resi OHSE Assistant of POM 21. Eka Spraying Supervisor Melenyu Estate 1 22. Karolina Linda Spraying Worker Melenyu Estate 1 23. Gaudensia Spraying Worker Melenyu Estate 1 Gese 24. Elik Spraying Worker Melenyu Estate 1 25. Eni Sumarlin Spraying Worker Melenyu Estate 1 26. Siti Nurhayati Spraying Worker Melenyu Estate 1 27. Tantriyati Spraying Worker Melenyu Estate 1 28. Riostiana Lantas Spraying Worker Melenyu Estate 1 29. Rosalina Ngeping Spraying Worker Melenyu Estate 1 30. Ambrosia Bulu Spraying Worker Melenyu Estate 1 31. Ratam Spraying Supervisor Melenyu Estate 2 32. Diana Spraying Worker Melenyu Estate 2 33. Murni Spraying Worker Melenyu Estate 2 34. Yofina Eny Spraying Worker Melenyu Estate 2 35. Miswati Spraying Worker Melenyu Estate 2 36. Nurliyah Spraying Worker Melenyu Estate 2 37. Lina Trisnawati Spraying Worker Melenyu Estate 2 38. Sukardi Spraying Worker Melenyu Estate 2 39. Ahmad Taufik Logistic and Warehouse Assistant POM 40. Dedi Purwadi Hazardous Waste Temporary Storage Work- er POM 41. Andi Kusuma R&A Site 42. Hasbi Ash Shid- IPM Assistant diq 43. Fachri Assistant of Division 2 Melenyu Estate 1 44. Ardi Syaputra N. Chemical Storage Worker Melenyu Estate 1 45. Hamka Spraying Supervisor Melenyu Estate 3 46. Hotmiyah Spraying Worker Melenyu Estate 3 47. Monika Mamuj Spraying Worker Melenyu Estate 3 48. Parimah Spraying Worker Melenyu Estate 3 49. Warti Spraying Worker Melenyu Estate 3 50. Tunsiah Spraying Worker Melenyu Estate 3 51. Yiyin Spraying Worker Melenyu Estate 3 52. Maria Lensiana Caterpillar and bagworm census Worker Melenyu Estate 4 53. Susana Caterpillar and bagworm census Worker Melenyu Estate 4 54. Andika Harvesting Supervisor Melenyu Estate 4 55. Dedi Putrawan Harvesting Worker Melenyu Estate 4 56. Dwi Asra Harvesting Worker Melenyu Estate 4 57. Pairun Harvesting Worker Melenyu Estate 4 58. Endang Pur- Paramedic Melenyu Estate 4 wanti 59. Misbun Hazardous Waste Temporary Storage Work- er Melenyu Estate 4 60. Julianto Putra Storage Worker Melenyu Estate 4 Limbong 61. Fedra Youven Learning Center 62. Nurlaila Learning Center 63. Kurnia Land compensation recipient 64. Awan Usat/Bacok Land compensation recipient Tangi 65. Iman Ipung Land compensation recipient 66. Iman Ipung Land cultivators KT. Pulau Benia 67. Lawai Tingai Land compensation recipient

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PT Dharma Satya Nusantara Palm Oil Mill 6 – East Kalimantan

Page 87 of 91 68. Ramhat Hidayat Transport contractor 69. Awon Usat Long Sep community leaders 70. Trisno Harvesters, ME II, Afd. V, Block 67 F 71. Sadirin Harvesters, ME II, Afd. V, Block 67 F 72. Akbar Harvesters, ME II, Afd. V, Block 67 F 73. Jamaluddin Harvesters, ME II, Afd. V, Block 67 F 74. Ratam Sprayers, ME II, Afd. VII, Block 60 F 75. Rina Bani Sprayers, ME II, Afd. VII, Block 60 F 76. Murni Sprayers, ME II, Afd. VII, Block 60 F 77. Yafina Eni Sprayers, ME II, Afd. VII, Block 60 F 78. Miswat Sprayers, ME II, Afd. VII, Block 60 F 79. Nurliah Sprayers, ME II, Afd. VII, Block 60 F 80. Lina Trisnawati Sprayers, ME II, Afd. VII, Block 60 F

QMF: RSPO-007a-18(Rev.3.December 2018)

Appendix 7 : Organization’s land History and information about all previous users of the land. Total of land compensation : 524.9 ha Total of entity : 13 unit, therefore, the minimum sampling taken will be 0.8 x √ 13 unit = 3.60 unit

Year of Verifica- Previous land owner Location (estate name Total tion (person name / group Year of land released and their evi- No and or village/sub-village areas Remarks or the result of interview name / traditional dences Plan Actual name) (ha) group name / etc) Aliman, Asnan, Saiful, 7.7 25 Mar 2011 Verified; based on interview the com- Kurnia munity was feel free to release they Melenyu 1, Block land by compensation process. The 1. 4 3 H88, Muara Wahau prices was achieve by agreement. Village FPIC is going well.

Bacok Tanyit 16 25 Oct 2013 Verified; based on interview the community was feel free to release they Melenyu 1, Block land by compensation process. The 2. 4 3 F87, prices was achieve by agreement. FPIC is going well.

Lawai Tingai 10 29 April 2015 Verified; based on interview the community was feel free to release they Melenyu 1, Block land by compensation process. The 3. 4 3 E75C, E76C, Muara prices was achieve by agreement. Wahau Village FPIC is going well.

Kebun Benia 400 31 May 2012 Onsite verification were conducted, but the farmers as not in place.

Additional information: Food and gath- 4. Melenyu 1,Desa ering activity in the upstream of Wahau/Telen river, could not accessible.

Sei Sentiang GGA 67 15 Dec 2012 Onsite verification were conducted, but the farmers was not in place.

Melenyu 1, Block G Additional information: Food and gath- 5. H92-95, Muara ering activity in the upstream of Wahau Village Wahau/Telen river, could not accessible.

Melenyu 1, Block Suhaimi 1 05 Jan 2013 Onsite verification were conducted, but 6. H92, Muara Wahau the farmers was not in place. Village

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Additional information: Food and gathering activity in the upstream of Wahau/Telen river, could not accessible.

Yat Pai 5 19 Nov 2013 Onsite verification were conducted, but the farmers was not in place.

Melenyu 1, Block Additional information: Food and gath- 7. E87, Muara Wahau ering activity in the upstream of Village Wahau/Telen river, could not accessible.

Aliman/Saiful 2 14 Mar 2013 Onsite verification were conducted, but the farmers was not in place.

Melenyu 1, Block Additional information: Food and gath- 8. H90-92, Muara ering activity in the upstream of Wahau Village Wahau/Telen river, could not accessible.

Irman 9.7 14 Mar 2013 Onsite verification were conducted, but the farmers was not in place.

Melenyu 1, Block Additional information: Food and gath- 9. H91-92, Muara ering activity in the upstream of Wahau Village Wahau/Telen river, could not accessible.

Guk Usat 2.8 18 Jun 2013 Onsite verification were conducted, but the farmers was not in place.

Melenyu 1, Block 10 Additional information: Food and gath- E69, Muara Wahau . ering activity in the upstream of Village Wahau/Telen river, could not accessible.

Liah Bung 3.7 03 Mar 2014 Onsite verification were conducted, but Melenyu 1, Block the farmers was not in place. 11 D63B, Muara Wahau . Village Additional information: Food and gathering activity in the upstream of QMF: RSPO-007a-18(Rev.3.December 2018)

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Wahau/Telen river, could not accessible.

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PT Dharma Satya Nusantara Palm Oil Mill 6 – East Kalimantan

Page 91 of 91 Appendix 8 : Requirement on Book & Claim

Not applicable at this time.

QMF: RSPO-007a-18(Rev.3.December 2018)