SGS RSPO PROGRAM Doc

SGS RSPO PROGRAM Doc. Number: GP 9405A

(Associated Document) Doc. Version date: 7th June 2016 Page: 1 of 113 Issue: 02

RSPO PRINCIPLES & CRITERIA CERTIFICATION REPORT

Public Summary Information

Job Number: MY/KUL-MY04629 Sime Darby Plantation Sdn Bhd – SOU 15 Client: RSPO membership # 1-0008-04-000-00 Sua Betong RSPO Registered Sime Darby Country: Malaysia Parent Company name: Plantation Sdn Bhd Receiving and processing of RSPO certified Fresh Fruit Bunches (FFB) from its supply base, production and sales of RSPO certified Crude Palm Oil (CPO) and Palm Kernel (PK) Scope: under Module D (CPO Mill: Identity Preserved) of RSPO Supply Chain and RSPO MY-NI standard.

Supply Chain Module: Module D: CPO Mills: Identity Preserved

Mill Capacity 60 tonne/hour Number of Estate 8 Estates

Date of Issue: 23 May 2017 Certificate Number: SGS-RSPO/PC17-00007 Date of Expiry: 17 February 2019 SGS Accreditation Code RSPO-ACC-023 Date of accreditation: 5th July 2016

Contacts Job Description: Head of Sustainability Unit, PSQM Department Contact Person: Name: Mdm Shylaja Devi Vasudevan Nair

Head Office Main Tower, Level 3A, Plantation Tower Address: No.2, Jalan PJU 1A/7, Ara Damansara 47301 Petaling Jaya, Street and number: Selangor, Malaysia. . Postal address : as per the left section Town/City

State/Country

Zip/Postal code Mill Address Country Sua Betong Oil Mill KM22, Jalan Linggi 71050 Sirusa, Port Dickson, Negeri Sembilan, Malaysia Tel: (603) 7848 4000

Cell Phone : - Fax: (603) 7848 4172 Web Site Address: http://www.simedarby.com 1. [email protected] Email: 2. [email protected] RSPO P&C 2013 Malaysian National Interpretation 2014 (endorsed on 6 March 2015) Standard: RSPO Supply Chain Certification Standard dated 21 November 2014. 19 May 2017 Date of last report update

SGS services are rendered in accordance with the applicable SGS General Conditions of Service accessible at http://www.sgs.com/en/Terms-and-Conditions.aspx

PT SGS Indonesia (RSPO Program) Cilandak Commercial Estate #108C, Jl. Raya Cilandak KKO, Jakarta 12560, INDONESIA Certification & Business Enhancement Division Contact Programme Manager at t. +62 21 781 8111 www.sgs.com GP 9405A Page 2 of 113

2015 ( in MT ) 2016 ( in MT ) July: 24,968.27 January: 8,418.68 August: 25,123.9 February:7,619.34 Certified FFB Received by September: 22,004.41 March: 12,491.64 the Mill [FY 15/16 ] October: 18,584.95 April: 14,225.71 November: 14,451.38 May: 16,525.56 December: 9,885.8 June: 16,437.88 Annual CSPO Tonnage 39,190.361MT produced [FY 15/16 ]

Annual CSPK Tonnage 9,579.502MT produced [FY 15/16 ]

Annual CSPO Tonnage 1,947.44 MT Sold [FY 15/16 ]

Annual CSPK Tonnage 5,701.40 MT Sold [FY 15/16 ]

End of Public Summary GP 9405A Page 3 of 113

BASIC EVALUATION INFORMATION MAIN EVALUATION Evaluation Dates: 26 - 30 November 2012 Team Leader/Team: Done by previous CB Affiliate Project Manager: Date: Report approved by: Done by previous CB Date: Certification approved by: Done by previous CB Date: Database logged by: Done by previous CB Date: SURVEILLANCE 1 Evaluation Dates: 11 – 13 November 2014 Team Leader/Team: Done by previous CB Affiliate Project Manager: Date:

Report reviewed & approved by: Done by previous CB Date: Certification approved by: Done by previous CB Date: Database logged by: Done by previous CB Date: SURVEILLANCE 2 Evaluation Dates: 16-19 November 2015 Team Leader/Team: Done by previous CB Affiliate Project Manager: Date:

Report reviewed & approved by: Done by previous CB Date: Certification approved by: Done by previous CB Date: Database logged by: Done by previous CB Date: SURVEILLANCE 3 Evaluation Dates: Dec 20 th – 23 rd , 2016 ( transfer from TUV Rheinland . TUV Rheinland took over from SGS ( Malaysia ) Sdn Bhd , after SGS (M) Sdn Bhd was terminated ) Team Leader/Team: 1) James S H Ong 2) Abdullah Din 3) Dayang Suhanie Khalid 4) Muhammad Shazaley Abdullah Affiliate Project Manager: Date:

Report reviewed & approved by: Aryo Gustomo Date: 22 May 2017 Certification approved by: Shashibhushan Jogani Date: 23 May 2017 Database logged by: Eric Dael Date: 6 April 2017 SURVEILLANCE 4 Evaluation Dates: Team Leader/Team: Affiliate Project Manager: Date:

Report reviewed & approved by: Date:

Certification approved by: Date:

Database logged by: Date: GP 9405A Page 4 of 113

SUMMARY Sime Darby Plantation Sdn Bhd established in November , 2007 was formed by the merger of Sime Darby Berhad, Golden Hope Plantations Berhad and Kumpulan Guthrie Berhad Upstream operations encompass 254 estates and 71 mills where fresh fruit bunches (FFB) from thier estates are delivered to their mills to be processed into crude palm oil (CPO). The application of RSPO Principles & Criteria ensures that they have adhere to environmental best practices, biodiversity conservation, and social protection in areas of our operation. Sime Darby Plantation Sdn Bhd represents one of the five cores Divisions of Sime Darby Group and is involved in the following:- Upstream Operations: oil palm cultivation, harvesting and milling Downstream Operation: refining of Crude Palm Oil (CPO) is undertaken for edible oils and fats products, oleochemicals and biodiesel, as well as its marketing activities, are present in 16 countries. Research & Development : Yield productivity Improvement, increase revenue streams & sustainable practices

Sime Darby Plantation is the largest division of the Sime Darby Group, a Malaysia-based public listed conglomerate with a business that spans the entire palm oil value chain. As one of the founding members of the Roundtable on Sustainable Palm Oil (RSPO), they are now the largest producer of sustainable palm oil worldwide, a testament to their commitment in embedding sustainability in the core of their operations. They now manage approximately 629,000 ha of planted areas in Malaysia, Indonesia, Liberia, Papua New Guinea (PNG) and the Solomon Islands. Their upstream operation comprises of the following:

• 603,254 ha of oil palm, 11,174 ha of rubber, and 5,613 ha of growing cane plantations in Malaysia, Indonesia, Liberia, PNG, and the Solomon Islands • Oil palm, rubber, and growing cane Cultivation • Palm oil milling, rubber factories, and bulking facilities • Composting & biogas

Their current downstream operations comprise production of oils and fats, oleo chemicals, biodiesel, other palm oil derivatives and renewables as well as the sales and marketing of these products in 17 countries. The downstream operation includes: • Oils & fats, kernel crushing, biodiesel, and oleo chemicals production • Sugar processing

Additionally, their Midstream segment is involved in trading, marketing and logistics services. Sime Darby Plantation is backed by a diverse workforce of more than 100,000 people. Their key markets are Malaysia, India, Thailand, Indonesia, United Kingdom, South Africa, Germany, China, Netherlands and Vietnam.

Sime Darby Plantation is one of the world’s largest palm oil producers, producing about 2.4 million tonnes or 4 per cent of the world’s crude palm oil (CPO) output annually. Based on their website and sustaianability report 2016 , to date, about 2.2 million tonnes are CSPO. Its annual output of palm kernel is about 0.57 million tonnes, out of which 0.56 million tonnes are Certified Sustainable Palm Kernel (CSPK).( ref: http://www.simedarbyplantation.com/our-businesses/overview )

Sime Darby Plantation has a total of 59 Strategic Operating Units (SOUs) out of which 58 are certified. All the Malaysian SOUs are certified whereas in Indonesia 96% of the SOUs are certified . GP 9405A Page 5 of 113

The Upstream operations include the development of oil palm plantations, cultivation of oil palm, management of estates, milling of fresh fruit bunches (FFB) for CPO and CPKO. Total landbank currently stands approximately 1 million hectares in the following countires :

a) Malaysia : 349K ha b) Indonesia : 282K ha c) Liberia : 220K ha d) Papua New Guinea & Solomon Islands: 136K ha

Out of the land bank, 600,000ha are planted areas.

For more information on their Upstream please log on to: http://www.simedarbyplantation.com/our-businesses/upstream/overview

For Malaysia operation , please log on to: http://www.simedarbyplantation.com/our-businesses/upstream/upstream-malaysia

The sustainability report 2016 can be downloaded on : http://www.simedarbyplantation.com/clients/simedarby_plantation/assets/contentMS/img/template/editor/SR %202016/SimeDarby%20Plantation_SR2017_dec2016.pdf

The downstream operation can be viewed under the following link: http://www.simedarbyplantation.com/our-businesses/downstream/overview

SGS RSPO PROGRAM Doc. Number: GP 9405A

(Associated Document) Doc. Version date: 7th June 2016 Page: 6 of 113 Issue: 02

TABLE OF CONTENTS

BASIC EVALUATION INFORMATION ...... 3 SUMMARY ...... 4 List of Abbreviation ...... 8 1. Scope of certification assessment ...... 8 1.1 National Interpretation Used ...... 9 1.2 Certification Scope ...... 9 1.3 Location and Maps ...... 9 1.4 Description of Supply Base and Mill Processing Capacity ...... 13 1.5 Area of Plantation ...... 15 1.6 Date of Planting and Cycle ...... 16 1.7 Other Certification Held ...... 16 1.8 Organizational Information and Contact Person ...... 16 1.9 Time-bound Plan for Other Management Units ...... 17 2. Assessment Process ...... 23 2.1 Certification Body ...... 23 2.2 Assessment Methodology, Programme, Site Visits ...... 23 2.3 Qualification of Lead Assessor and Assessment Team...... 27 2.4 Stakeholder Consultation and List of Stakeholders Contacted ...... 28 3. Assessment Findings ...... 29 3.1 Summary of Findings ...... 29 3.2 Corrective Action Request ...... 79 3.3 Noteworthy Positive Components ...... 79 3.4 Status of Non-Conformities Previously Identified ...... 79 3.5 Issues Raised by Stakeholders and Findings ...... 79 4. Acknowledgement of Organization Internal Responsibility ...... 80 4.1 Conclusion ...... 80 4.2 Date of Next Surveillance Visit ...... 80 4.3 Date of Closing Non-Conformities ...... 80 4.4 Acknowledgement of Internal Responsibility and Formal Sign-off Assessment Findings ...... 81

LIST OF TABLES Table 1: Mill and Supply Base Estates GPS Location ...... 9 Table 2: Past Estimate, Actual and Projected FFB from Supply Base Estates ( FY'15/'16 & FY'16/'17) ...... 14 Table 3: Past Estimate, Actual and Projected Mill Processing Data ...... 15 Table 4: Area Statement of the Supply Base Estates ...... 15 Table 5: Planting Age Profile for the Supply Base Estates of SOU 15-Sua Betong ...... 16 Table 6: Assessment Program ...... 23

SGS services are rendered in accordance with the applicable SGS General Conditions of Service accessible at http://www.sgs.com/en/Terms-and-Conditions.aspx

Table 7: Auditor's Profile and Responsibilities ...... 27

LIST OF FIGURES Figure 1: Location Map for SOU 15 Sua Betong supply Base Estates ...... 10 Figure 2: Land Map for SOU 15 - Sua Betong Supply Base Estates ...... 10 Figure 3: Tampin Linggi Estate Layout ...... 11 Figure 4: Silaiu Estate ( North Division ) Layout ...... 11 Figure 5: Siliau Estate ( linggi Division & Rantau Division ) Layout ...... 11 Figure 6: Sua Betong Estate ( South 1 & 2 Division ) Layout ...... 13

LIST OF APPENDICES

APPENDIX A: CORRECTIVE ACTION REQUEST & OBSERVATIONS ...... 82 APPENDIX B: NON-CONFORMITIES PREVIOUSLY IDENTIFIED ...... 91 APPENDIX C: TIMEBOUND PLAN ...... 102 APPENDIX D: LIST OF STAKEHOLDERS CONTACTED AND COMPLAINT REPORT...... 105

GP 9405A Page 8 of 113

LIST OF ABBREVIATION

Short Form Meanings

ARM Agricultural Reference Manual CAR Corrective Action Request CHRA Chemical Health Risk Assessment CPO Crude Palm Oil DID Department of Drainage and Irrigation, Malaysia DOE Department of Environment, Malaysia EFB Empty Fruit Bunch EIA Environment Impact Assessment EMS Environmental Management System EQA Environmental Quality Act ERT Endangered, Rare and Threatened species ESA Environmentally Sensitive Area FFA Free Fatty Acids FFB Fresh Fruit Bunches FR Forest Reserve Ha Hectare HCV High Conservation Value HDPE High Density Polyethylene IPM Integrated Pest Management ISO International Organisation for Standardisation IUCN International Union for Conservation of Nature and Natural Resources JCC Joint Consultative Committee JUPEM Jabatan Ukur dan Pemetaan Malaysia (Department of Survey and Mapping Malaysia) K Potassium kW Kilowatt M Meter Mg Magnesium Mm Millimeter Mt Metric ton MYNI Malaysia National Interpretation N Nitrogen NGO Non Governmental Organisation OA Orang Asli (Indigenous People) OER Oil Extraction Rate OSH Occupational Safety & Health P Phosphate P & C Principles and Criteria PK Palm Kernel POME Palm Oil Mill Effluent PPE Personal Protective Equipment PT Pejabat Tanah (Coding for Pahang Land Office) SOP Standard Operating Procedures Sdn Bhd Sendirian Berhad (Private Limited) SEIA Social and Environment Impact Assessment Sg Sungai SGS Societe Generale de Surveillance SOP Standard Operating Procedures SPC Senior Plantation Controller USECHH Use and Standards of Exposure of Chemicals Hazardous to Health WHO World Health Organisation yr Year

1. SCOPE OF CERTIFICATION ASSESSMENT

GP 9405A Page 9 of 113

1.1 National Interpretation Used The operations of the mill and their supply based of FFB were assessed against the Roundtable on Sustainable Palm Oil (RSPO), Malaysian National Interpretation Task Force (MYNI-TF), National Interpretation of RSPO Principles and Criteria for Sustainable Palm Oil Production Endorsed by RSPO Board of Governors on 6 March 2015.

1.2 Certification Scope The scope of certification includes the production of Sua Betong Palm Oil Mill and its supply base, Sime Darby Plantation Sdn Bhd Strategic Operating Unit (SOU) 15 Sua Betong according to the RSPO standard requirement of National Interpretation of RSPO Principles and Criteria for Sustainable Palm Oil Production Endorsed by RSPO Board of Governors on 6 March 2015 and RSPO Supply Chain Certification Standard dated 21 November 2014 1.3 Location and Maps Sime Darby Plantation Sdn Bhd Strategic Operating Unit (SOU) 15 Sua Betong is located in Port Dickson, Negeri Sembilan and Masjid Tanah, Melaka, Malaysia , ( Figure 1 ). More detailed information on the estates location and layouts is shown in Figures 2, 3 and 4. The GPS locations of the mills are shown in Table 1. Table 1: Mill and Supply Base Estates GPS Location

Mill/Supply Base Latitude Longitude (Estate/smallholder) Sua Betong Mill N 2°31’42’’ E 101°53’43’

Ldg PD Lukut N 2°30’59.32” E101°50’16.52”

o o Ldg Salak N 2 34’ 54” E 101 53’ 38”

Ldg Bradwall N 2º33’28” E 101º54’55”

Ldg Sengkang N 2° 26’ 095” E 101° 57’ 72”

Ldg Siliau N 2 ◦ 32’ 06’’ E 101 ◦54’ 0’’

Ldg Sungei Bahru N 2° 26’ 18” E 102° 5’ 44”

Ldg Tampin Linggi N 2˚30’ 52.3” E 101˚59’19.7”

Ldg Sua Betong N 2° 31' 42" E 101° 53"43"

GP 9405A Page 10 of 113

Figure 1: Location Map for SOU 15 Sua Betong supply Base Estates

Figure 2: Land Map for SOU 15 - Sua Betong Supply Base Estates

GP 9405A Page 11 of 113

Figure 3: Tampin Linggi Estate Layout

Figure 4: Silaiu Estate ( North Division ) Layout

Figure 5: Siliau Estate ( linggi Division & Rantau GP 9405A Page 12 of 113

Division ) Layout

GP 9405A Page 13 of 113

Figure 6: Sua Betong Estate ( South 1 & 2 Division ) Layout

1.4 Description of Supply Base and Mill Processing Capacity GP 9405A Page 14 of 113

The FFB is sourced from 08 which are directly managed by Sime Darby Plantation Sdn Bhd under Strategic Operating Unit (SOU) 15 Sua Betong . The OER rate for the FY 15/16 was 20.5149 %. The budgeted crop yields from each estate are listed in Table 2 below.

Table 2: Past Estimate, Actual and Projected FFB from Supply Base Estates ( FY'15/'16 & FY'16/'17)

FFBs (Tonnage) Estates Projection (16/17) Estimation (15/16) Actual (15/16)

Sua Betong Estate 65,001.62 48,315.57 54,512.27

Siliau Estate 40,871 30,881 38,759

Bradwall Estate 37,650 27,169 42,597

PD Lukut Estate 34,903 24,160 26,065

Sengkang Estate 59,610 49,366 51,836

Salak Estate 50,337 40,396 40,684

Sg. Bahru Estate 22,024 13,841 20,804

Tampin Linggi Estate 42,660 35,832 39,916

Subtotal (own RSPO certified 353,056.6 269,960.6 315,173.3 supply base) Certified FFB received from other RSPO certification scope within adjacent estates (if any) 0 0 0 a. XXXX Estate b. XXXX Estate Subtotal (other RSPO certified 0 0 0 supply base) 353,056.6 269,960.6 315,173.3 Grand Total

Amount processed at Sua 302,719.60 191,095.428 279,544 Betong Mill

* Note: Not all the FFB produced from the supply base is processed in Sua Betong POM. Some FFB were sent to other adjacent certified Palm Oil Mill belong to Sime Darby.

GP 9405A Page 15 of 113

Table 3: Past Estimate, Actual and Projected Mill Processing Data

Mill Production Figures (MT) (Audited Estate)

ill Name Estimation (15/16) Actual (15/16) Projection (16/17)

CPO PK CPO PK CPO PK Sua Betong 66,598.06 15,741.36 39,190.361 9,579.502 60,940.59 15,374.92 POM Extraction OER: 22 % KER: 5.20% OER: 20.51 % KER: 5.01 % OER: 21.80% KER: 5.50% Rate *) the figures above are calculated based on FFB processed in Sua Betong Palm Oil Mill.

1.5 Area of Plantation The areas of supplying estates for this operating unit are listed in Table 4 . Details of planted area (mature/immature), total land area, conservation, HCV and others are also listed. The following immature are replanting. Table 4: Area Statement of the Supply Base Estates

Planted Area Total Land / Name of Conservation HCV Area (Ha) Others use Lease Area Estates Immature Mature Area (Ha) Area Area (Ha) (Ha) (Ha)

Sua Betong 153.23 2,582.74 0 6.06 128.72 2,870.75 Estate Siliau 13.86 1,690.22 0 8.52 136.85 1,849.45 Estate Sengkang 194.48 2,446.47 0 9.12 181.44 2,831.51 Estate Sungai 110.97 1,001.63 0 0.00 314.71 1,427.31 Baru Estate Tampin 62.71 1,802.05 0 0.00 241.95 2,106.71 Linggi Estate Salak 582.27 2,044.54 0 0.00 250.17 2,876.98 Estate Bradwall 639.95 2,136.10 0 1.27 240.47 3,017.79 Estate PD Lukut 94.0 1,289.0 0 0.00 140.79 1,523.79 Estate Total 1,851.47 14,992.75 0 24.97 1,635.1 18,504.29

GP 9405A Page 16 of 113

1.6 Date of Planting and Cycle SOU 15 Sua Betong estates has been established since 1960’s .The palms are considered matured after months 30 months of planting and productive until the age of 25 years (1 cycle). A replanting program for all estates involved are available and being projected for the next five (5) financial years. The production status (mature/immature) for all the estates are simplified in Table 5 below

Table 5: Planting Age Profile for the Supply Base Estates of SOU 15-Sua Betong

Planting Age (Ha) Name of supplying Estate Immature >30 mths - 14 >14 - 25 years >25 years years Sua Betong Estate 153.23 1,743.17 839.57 0.00

Siliau Estate 13.86 1,255.20 435.02 0.00

Sengkang Estate 194.48 1,320.58 1,125.89 0.00

Sungai Baru Estate 110.97 1,001.63 0.00 0.00 Tampin Linggi 62.71 Estate 464.90 1,337.15 0.00

Salak Estate 582.27 1,033.41 1011.13 0.00

Bradwall Estate 639.95 1,797.48 338.62 0.00

PD Lukut Estate 94 406.00 883.00 0.00

Total 1,851.47 9,022.37 5,970.38 0.00

1.7 Other Certification Held SOU 15 Sua Betong does not hold any other certifications during the period of assessment conducted.

1.8 Organizational Information and Contact Person The company contact person details are as follows:

Name: MDM. SHYLAJA DEVI VASUDEVAN NAIR Head of Sustainability Unit, PSQM Designation: Department Main Tower, Level 3A, Address: Plantation Tower No.2, Jalan PJU 1A/7 GP 9405A Page 17 of 113

Ara Damansara 47301 Petaling Jaya, Selangor Malaysia Tel: (603) 7848 4000 Contact No.: Fax: (603) 7848 4172. Email address: [email protected]

1.9 Time-bound Plan for Other Management Units Sime Darby Plantation Sdn. Bhd is a member of RSPO and has been involved in the certification since 7 September 2004; the membership number with RSPO is 1-0008-04-000-00. Sime Darby Plantation Sdn. Bhd owns and operates 70 mills and 250 oil palms estates, together with 59 operating unit covering approximately 1,000,000 ha Malaysia, Indonesia, Liberia, PNG and Solomon Islands. Sime Darby Plantation Sdn. Bhd. has developed a timebound plan ( Appendix C ) for the phased implementation of the RSPO P&C, commencing with mills and estates. Sime Darby Plantation Sdn. Bhd will use the experience gained from achieving certification of the first few mills and estates to implement the RSPO P&C in parallel with the remainder of its operations. The SGS assessment team considers that Sime Darby Plantation Sdn. Bhd is on the right track which is reasonable and challenging, given the widespread geographic locations of its properties, the resources required and the numbers of smallholders involved Auditor Finding on the Time Bound Plan and Partial Certification

Time Bound Plan Requirement Findings and any action Compliance required Does the plan include all Yes , it includes all the estates Yes subsidiaries, estates and mills? and the mills in Indonesia and Malaysia In Malaysia there are 34 SOUs. The mills of Sg Samak and Jeleta Bumi, Yong Peng, Sepang, Mostyn and Segaliud has closed down. In Indonesia- Effectively 24 SOU within the TBP

For Liberia operations, a new mill is being set up and commissioned. Preparation to undergo the RSPO Certification process is in progress and SDP targets to undergo RSPO Certification by end 2017.

Is the time bound plan Based on the initial Sime Darby Yes challenging? Plantation’s time bound plan for certification within 2008 – 2011, • Age of plantations. SDP has had all its SOUs • Location. (Malaysian & Indonesian) • POM development GP 9405A Page 18 of 113

• Infrastructure. completing the RSPO Main • Compliance with applicable Assessment by end Dec 2011 ( law. with the exception of 2 new oil mills commissioned to replace the current oil mills after the initial timebound plan targets). The 2 new mills have been RSPO Certified in Jan and Feb 2014. For Indonesian operations, PT MAS has undergone RSPO MA and is delayed due to some social disputes. The target date of certification by 2017 subject to the progress of the matter being resolved. Smallholders – as of Dec 2016 total of 29,914 ha ( 58%) of the total Ha ( 51,715 ha ) of associated SH certified in Indonesia has been certified. Certification process for the remaining associated SH areas is ongoing. SDP expect to achieve 100% RSPO certification of associated SH and out-growers by end 2020. Liberia – Preparation to undergo RSPO certification process in progress and SDP target RSPO certification end 2017. RSPO NPP process has been completed in 2011

Have there been any changes 97% of Sime Darby Plantation's Yes since the last audit? Are they upstream operations is RSPO justified? certified, one SOU - PT MAS pending certification in Indonesia due to some social disputes . SDP will process with the next step of certification until satisfactory resolution of the matter. A new oil mill in Liberia has been commissioned . SDP’s time bound plan has been revised to take into consideration the social challenges encountered in Indonesia for the remaining SOU (PT MAS) yet to be certified.

Sime Darby Plantation will proceed with the next steps of certification upon satisfactory resolution of the matter. In March 2015, SDP completed acquisition of RSPO-certified NBPOL. NBPOL is managed under separate entity and the TBP will be under NBPOL management. If there have been changes, what Indonesia- PT MAS has Yes circumstances have occurred? undergone RSPO Main GP 9405A Page 19 of 113

Assessment in July 2011. The certification body for PT MAS has considered that Sime Darby Plantation still meets the requirements of the RSPO for Partial Certification and the report has been submitted for EB review. A verification audit was conducted by the Certification Body in early 2013 and Sime Darby Plantation will proceed with the next steps of certification upon satisfactory resolution of the matter. Ongoing and regular (bi-monthly) discussions are ongoing between Sime Darby Plantation and the project affected communities. Reports on the progress update are submitted to RSPO on a regular basis since November 2012. The latest progress report submitted to RPSO dated 30 th June 2016. Smallholders – as of Dec 2016 total of 29,914 ha ( 58%) of the total Ha ( 51,715 ha ) of associated SH certified in Indonesia has been certified. Certification process for the remaining associated SH areas is ongoing. SDP expect to achieve 100% RSPO certification of associated SH and out-growers by end 2020. Liberia – Preparation to undergo RSPO certification process in progress and SDP target RSPO certification end 2017. RSPO NPP process has been completed in 2011

Have there been any stakeholder Up to date, there is no comment. Yes comments?

SDP continues to engage all affected parties through regular discussions and progress reporting is being made to the RSPO Secretariat. Have there been any newly In March 2015, Sime Darby Yes acquired subsidiaries? Plantation completed the acquisition of New Britain Palm Oil Limited (NBPOL). NBPOL is managed under a separate entity and the reporting of timebound plan will be under NBPOL’s management. NBPOL is considered as a different entity/member under the RSPO and NBPOL is 100% RSPO Certified . For Liberia operations, a new mill is being set up and commissioned. Preparation to GP 9405A Page 20 of 113

undergo the RSPO Certification process is in progress and SDP targets to undergo RSPO Certification by end 2017.

*RSPO NPP process has been completed in 2011. Internal assessment against the draft Liberia NI has been completed and closing of gaps is in progress .

Have there been any isolated Isolated lapses clarified. Yes lapses in implementation of the plan? As mentioned above , PT MAS has undergone RSPO MA and is delayed due to some social disputes.

Un-Certified Units or Holdings Note : Companies may demonstrate compliance by clear evidence of a self-audit (i.e. an internal audit for all subsidiaries, estates and Palm Oil Mills) Requirement Findings and any action Compliance required Did the company conduct an Reference: RSPO Certification Yes. Company has internal audit? If so, has a positive System : 4.2.3 - All the FFB from conducted verification visits assurance statement been the directly managed lands (or to ensure a positive produced? estates) shall be produced to outcome certifiable standards. The mill will develop and implement a plan to ensure that 100% of associated smallholders and outgrowers are of certifiable standard within 3 years. TBP for associated smallholders changed from 2019 to 2020 as our expected timeline for our directly managed OUs shifted from 2016 to 2017 due to: 1) PT MAS social issues (Details on PT MAS progress is in Attachment (lla under Appendix C) and 2) Newly established mill in Liberia that will undergo certification in 2017. Positive assurance (Internal audit) on un-certified units: PT MAS has undergone RSPO Main Assessment in July 2011. The certification body for PT MAS has considered that Sime Darby Plantation still meets the requirements of the RSPO for Partial Certification and the report has been submitted for EB review. A verification audit was conducted by the Certification Body in early 2013 and Sime Darby Plantation will proceed with the next steps of certification upon satisfactory GP 9405A Page 21 of 113

resolution of the matter. RSPO Certification process for our Liberia Operation is in progress and SDP targets to undergo RSPO Certification by end 2017. RSPO NPP process has been completed in 2011. Internal assessment against the draft Liberia NI has been completed and closing of gaps is in progress. Timeline for certification of our associated smallholders in Indonesia has been planned. Relevant internal assessment is conducted accordingly. In terms of engagement with independent smallholders several initiatives are in progress : a) Since 2016, SDP is part of Wild Asia Group Scheme for Small Producer (WAGS) where our Sandakan bay mill, Malaysia will receive the crops from this group of smallholders. b) As a member of the RSPO and signatory to the SPOM and Responsible Agriculture Charter, Sime Darby Plantation has pledged to no deforestation, protecting peat land and to drive positive socio-economic impact for people and communities in the plantations it owns and manages.SD also launched the Responsible Agriculture Charter in September 2016 which requires all the external supply to comply to the charter by 2020.These commitments extend to smallholders and Outgrowers, whether contracted or independent, from whom the company sources fresh fruit bunches (FFB) and other palm products. c) SDP rolled out the Responsible Sourcing Guidelines in 2016 by conducting Site Verification Visit for OCPs( Outside Crop) and palm oil sourced from external mills to ensure the supply is traceable, legal and not planted in peat or forest post 2010. Sime Darby Plantation’s Responsible Sourcing Guidelines sets out the mandatory requirements and best practices for continuous improvement which leads our decision in sourcing externally. Any current or potential OCPs supply bases that failed to meet requirements set by SDP, GP 9405A Page 22 of 113

they to be discontinued as our SDP Mills FFB suppliers. Further readings, kindly to Sime Darby website under Plantation Division.

No replacement after dates All new plantings in SDP Yes defined in NIs Criterion 7.3: operation (including uncertified units in Liberia and Indonesia • Primary forest. operation) were in accordance to • Any area identified as New Planting Procedures (NPP) containing High Conservation and Principle 7.3: Values (HCVs). For Liberia operation, RSPO NPP • Any area required to maintain process has been completed in or enhance HCVs in 2011 which cover the HCV area. accordance with RSPO Internal assessment against the criterion 7.3. generic P&C has been completed and closing of gaps is in progress. For Indonesian operation, HCV assessment completed for all operations (including un-certified units) in 2009. Any affected areas that falls under the RSPO Remediation and Compensation Procedures is being addressed accordingly Any new plantings since January A new mill will be set up in Liberia Yes 1st 2010 must comply with the and planned for commissioning in RSPO New Plantings Procedure. Feb 2016. Preparation to undergo the RSPO Certification process is in progress and SDP targets to undergo RSPO Certification by end 2017.

RSPO NPP process has been completed in 2011. Internal assessment against the draft Liberia NI has been completed and closing of gaps is in progress. *Note: RSPO NPP Announcments for SDP can be found at http://www.rspo.org/certification/n ew-planting-procedures/public- consultations/page/14 ?

Any Land conflicts are being Sime Darby (Liberia) Plantation Yes resolved through a mutually Inc. agreed process, e.g. RSPO Grievance procedure or Dispute Status: Box G - Close for Settlement Facility, in accordance Monitoring with RSPO criteria 6.4, 7.5 and 7.6. Further details please refer to: http://www.rspo.org/members/com plaints/status-of- complaints/view/46 PT Mitra Austral Sejahtera (Sime Darby Sdn Bhd) Further details please refer to: GP 9405A Page 23 of 113

http://www.rspo.org/members/com plaints/status-of- complaints/view/29

Any Labor disputes are being No stakeholder comments or yes resolved through a mutually complaints received. agreed process, in accordance with RSPO criterion 6.3. Did the company conduct an Internal audit conducted. Yes internal audit? If so, has a positive No stakeholder comments or assurance statement been produced? complaints received.

Any Legal non- compliance is No pending legal non-compliance Yes being resolved in accordance with the legal requirements, with reference to RSPO criteria 2.1 and 2.2.

2. ASSESSMENT PROCESS

2.1 Certification Body SGS is the world’s leading inspection, verification, testing and certification company. SGS is recognized as the global benchmark for quality and integrity. With more than 90,000 employees, SGS operates a network of over 2,000 offices and laboratories around the world. The RSPO Programme is the SGS Group’s RSPO Certification Programme internationally accredited by the ASI to carry out oil palm plantation and supply chain certification for global RSPO certification. 2.2 Assessment Methodology, Programme, Site Visits The assessment was conducted in 3 audit days and involving three ( 3 ) estates of Sime Darby Plantation Sdn. Bhd, SOU 15 Sua Betong . The audit covers documentation review, internal procedures, management system, field inspection as well as identification of any significant issues for both environment or social issues. A sample of stakeholders was consulted during the assessment to get their feedback on the current management practices. The assessment was conducted based on random samples and therefore nonconformities may exist which have not been identified. The methodology for objective evidence collection included physical site inspection, observation of tasks and processes, interview with workers, families and stakeholders, documentation review and monitoring data. The assessment program is included as shown in Table 6 below.

Table 6: Assessment Program

Date Time Auditor Organisational and Functional Units/ Processes and Key Contact Activities 20/12/16 8:30 a.m JO, AD, DSK Arrival at Sua Betong POM SOU 15 Sua Betong GP 9405A Page 24 of 113

,MSA & MIJ Personnel, PSQM personnel Opening meeting @ Sua Betong Mill Office • Introduction to the audit by SGS • Briefing by the SGS on the auditing approach • Briefing by SOU 15 – Sua Betong • Formulation of audit schedule

8:45 a.m Travel to Estate Sua Betong JO, AD, DSK Principle1,2,3 4,5,6,8: GAP, Social and ,MSA & MIJ Environment responsibilities

- Field Operation visit & Interview & use of PPE - Soil & Slope management and riparian zone - HCV , Conservation , Boundary ( e.g Boundary with smallholder ) , As above - OSH practices

AD, JO Housing - amenities & surrounding - HA interview - Waste Management - Storage Facilities - Chemical - Fertiliser - Tripled rinsed empty container - Shower area, Eyewash, pre-mix area, PPE As above drying area - POL 1:00 Lunch All 2:00 All auditors Office documentation

All auditors Document Review : EIA updates - Legal and Maps - Licences - Records and Monitoring - EIA plan and review , Maps As above - Education of workers on ERT and HCV - Waste management plan - Pollution Plan - Waste records and disposal - Fossil fuel use efficiency - GHG calculation

All auditors - Interview Contractors , stakeholders , Representatives , Gender , HA

- ECC meeting and records

Document review

- SIA Assessment update , plans and records - Records of meetings – worker meeting As above - Stakeholder meetings and records of consultation - Policies, children and discrimination - Union & contract - Pay slip and Deduction - Employment and contract Records - Legalization GP 9405A Page 25 of 113

- Passport - Contractor payment and contractor workers - Minimum wage monitoring - Disputees,Complaints ,Grievances , Resolution and records - Sexual harassment Principle 8: Commitment to Continual Improvement in Key Areas of Activity All auditors - Business management plan and replanting programme

- time-bound plan

- SOP monitoring and implementation mechanism

- Records – soil , fertiliser, water & IPM monitoring

-Records of pesticide and fertiliser usage

- Training records – IPM , Waste chemical handling

- Medical surveillance

- Safety policy & meetings As above -Safety training and Health Records -LTA Records and Accident Insurance

5:30 Interim Findings of Estate Sua Betong Discussion All 6:00 p.m End of Day 1 Audit Dinner 21/12/16 AD/ DSK MSA/MIJ Estate 2 Estate 3 8 a.m Arrive Estate Tampin Arrive Estate Siliau , Estate personnel Linggi , briefing & briefing & arrangemen from Estate 2 and arrangement Estate 3 + PQSM personnel Principle 5,6 Principle 4 Estate personnel from Estate 2 and Social and Environment Good Agricultural Estate 3 + PQSM Responsibilities Practices personnel

Field work operation visit interview Field work operation visit interview Soil & Slope - PPE management and riparian zone - OSH practices HCV , Conservation , Boundary ( e.g Boundary with smallholder ) , -Storage Facilities -Chemical Waste Management -Fertiliser -Tripled rinsed empty container

-Shower area, Eyewash, Housing and amenities pre-mix area, PPE drying area Interview workers , GP 9405A Page 26 of 113

Reps, ext stakeholders, -POL HA etc 12:30 Lunch Break Lunch Break 1:30 Office Documentation Office Documentation review and update review and update relating to Principle 1,2,3 relating to Principle 4 5,6,8

Interim Findings of Interim Findings of estate 2 estate 3 Discussion Discussion 5:30 pm End of audit Day 2 Dinner arrangement 22/12/16 8:00 a.m JO, AD, DSK Arrive at Sua Betong POM Mill Manager & staff ,MSA & MIJ of POM & PSQM P& C and Supply Chain Audit personnel Pn Salwa Legal - Regulatory ( Licences ) - Permits Confirm only receive from own supply base otherwise interview with FFB Suppliers - Payment - Contract and Pricing Environment - EFB, POME - GHG - Monitoring Final Discharge - Water Management Plan - Waste water management e.g BOD - Submission to DOE - Waste management - Water Treatment - Electricity Health & Safety - PPE - Training - Mill records on production - RE usage , water usage, Fossil fuel Monitoring - Audiometric Test Interview workers - Pay - Housing - Employment contract and agreement - Deduction - Minimum wage management

Principle 8 – Mill continous improvement plan

RSPO Supply Chain Audit - IP - Documented Procedure - Goods in Goods Out - Etrace - Record Keeping - Processing - Update on records of FFB, CPO and PK - Update on eTrace GP 9405A Page 27 of 113

Site visit – Mill reception , Process etc and Final As above Discharge EFB site 12:30 Lunch 1:30 JO, AD, DSK Mill Document and Production Records review. As above ,MSA & MIJ

3:30 pm All Office Documentation updates in Estate 1 if As above required .

Finalising audit at Sua Betong POM Check on issues regarding : - Time-bound Plan - Stakeholder - NPP - Complaints 5:30 JO, AD, DSK Closing meeting for SOU 15_Sua Betong and its All ,MSA & MIJ supply base Presentation of Findings Labu POM and its supply base and recommendation - Discussion Discussion 6:30 pm End of Day 3 Audit Dinner provided by SOU 15 in Port Dickson Auditors not participating in 23 rd Tampin Linggi report travel back

8:30 am JO Travel and arrive : Tampin Linggi Estate To do a summary report on the complaint/ anonymous letter received concerning ill treatment JO SOU 15 , PQSM Document review on issues raised . 23/12/16 1:00 JO End of audit As above Auditor travel back

2.3 Qualification of Lead Assessor and Assessment Team PT SGS Indonesia holds copies of educational qualifications, certificates and audit logs for each of the audit team members. SGS has evaluated the qualifications and experience of each audit team member and has registered the following designations for conducting RSPO Assessment. Summary of auditors’ educational background and experience are listed in Table 7 below. Table 7: Auditor's Profile and Responsibilities

Evaluation Team Notes GP 9405A Page 28 of 113

Team Leader, James S H Ong, a Bachelor of Agriculture Science holder and agronomist in Supply Chain SGS (M) Sdn Bhd. He has many years working experience in agriculture sector in Malaysia and has been working in estates as well in the agrochemical and fertilizer industry. He is well versed with Good Agricultural practices .He has undergone ISO 14001 and RSPO Lead Auditor and RSPO Supply Chain training and involved in a number of audits on oil palm plantations, supply chains and traders. He is also involved in ISCC audits.

Auditor 1 – Abdullah Din, SGS ( Malaysia ) Sdn Bhd CoC Program Manager and Lead Environment, Auditor,is a forester by profession and a trained Lead Auditor with more than HCV & OSH 8 years experience in forestry Chain of Custody (CoC) certification. He also has been involved in a number of Forest Management (FM) certification for the last 3 years. In addition , he is a Lead Auditor for RSPO ,trained by RSPO for auditing against RSPO P&C and RSPO Supply Chain and involved in a number of plantation assessments and audit of palm oil mill. He is also involved in ISCC EU certification.

Auditor 2 –Social Dayang Suhanie Khalid has been graduated from Universiti Putra Malaysia in , Stakeholder Bachelor of Forestry Science with major in recreational, social and services. consultation She also has been involved in a number of Forest Management (FM) certification for last 3 years. She also has attended training on RSPO P&C Social and Labour Standards and Mechanicm of Soicial Auditing in 2014. She has involved in RSPO assessment since 2013 in Malaysia and Indonesia. She has successfully completed ISO 9001:2008 Lead Auditor Course and RSPO Lead Auditor Course in 2013. She is also involved in COC certification for timber based products.

Auditor 3 – Muhammad Shazaley bin Abdullah has been graduated from Universiti Plantation GAP Malaysia Sabah in B. Sc. Hons Forestry Science. He has been working in oil palm plantation industries for some time after graduation. Having more than 4 years working experience in auditing oil palm plantation (RSPO, ISCC), he has involved in RSPO assessment since 2012 in Malaysia and Indonesia. He has successfully completed ISO 9001:2008 lead auditor course in 2013 and RSPO Lead Auditor Training in September 2013. He was a RSPO lead auditor in another certification body before joining back SGS MY. Presently he is in charge of the MSPO program for SGS Malaysia

Auditor Trainee- Muhamad Iqbal bin Jailan, holds Bachelor of Bio-Industry Science from accompany UPM. He is familiar with Good Agricultural Practices (GAP). Has more than 5 Shazaley during years working experience related to the oil palm cultivation and a member of audit Incorporated Society of Planters. He has passed the RSPO P&C Lead Auditor training

2.4 Stakeholder Consultation and List of Stakeholders Contacted

As this audit is a surveillance, V03 , no Public Stakeholder Notification was made 30 days prior to the recertification assessment. External stakeholders were contacted by telephone and email to arrange meetings at a location convenient to them to discuss Sime Darby Plantation Sdn. Bhd, SOU 15 Sua Betong Certification Unit’s environmental and social performance. Meetings were held with stakeholders to seek their views on the performance of the company with respect to the RSPO requirements and aspects where they considered that improvements could be made, These included environmental interest groups, local government agencies and relevant authorities, social groups, and workers’ unions etc. At the start of each meeting, the interviewer explained the purpose of the audit followed by an evaluation of the relationship GP 9405A Page 29 of 113

between the stakeholder and the company before discussions proceeded. The interviewer recorded comments made by stakeholders and these have been incorporated into the assessment findings. Structured worker interviews with male and female workers and staff were held in private at the workplace in the mill and the estates. Fieldworkers were interviewed informally in small groups in the field. In addition, the wives of workers and staff were interviewed in informal group meetings at their housing. Separate visits were made to each of the local communities to meet with the village head and residents. Company officials were not present at any of the internal or external stakeholder interviews. A list of Stakeholders contacted with detail comments is included as Appendix D.

3. ASSESSMENT FINDINGS 3.1 Summary of Findings 3.1.1 Principles & Criteria As outlined, objective evidence was obtained separately for each of the RSPO Indicators and criterion for the mills and estates. The results for each indicator from each of the operational areas were evaluated to provide an assessment of conformity. A statement is provided for each of the RSPO indicators in order to support the findings of the assessment team. There is 07 Major Non-conformities and 02 Minor Non-conformities identified during this assessment. Some areas identified with potential areas for improvement has leaded into 02 Observations raised. Details for each Non-conformities and observations are given in Appendix C. Major Non-conformities has been closed out within the period of 60 days after the assessment. Minor Non-compliances and Observations will be followed up during the next Annual Surveillance Audit which is scheduled to be conducted within the period of twelve months after the Report approval of Main Assessment.

Principle 1: Commitment to Transparency 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 and forms to allow for effective participation in decision making.

1.1.1 There shall be evidence that growers and millers provide adequate Minor information upon request for information on (environmental, social and/or legal) issues relevant to RSPO Criteria to relevant stakeholders for effective participation in decision making. Findings In compliance: Yes: X No:

Objective List of Stakeholders document is maintained at estates and mill visited. evidence: Since last audit SOU 15 has not received any request for information on (environmental, social and/or legal) issues from stakeholders relevant to RSPO Criteria Procedure For External Communication (Appendix 5.5.3.2) of Standard Operation Manual (SOM) & Appendix 5 “Flow Chart and Procedure on Handling Social Issues” described the process of information sharing on estate’s quality, safety & health and environment, social and legal. 1.1.2 Records of requests for information and responses shall be maintained. Major

Findings In compliance: Yes: X No:

Objective Since last audit, there are no requests for information received from stakeholders. evidence: Communication with stakeholders are described in the following procedures: GP 9405A Page 30 of 113

1. Procedure for External Communication (Appendix 5.5.3.2) of Standard Operation Manual (SOM) – described the communication process on estate’s quality, safety & health information. 2. Procedure on Handling Social Issues” described the communication process on estate’s social and legal information. 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.

1.2.1 (a) Land titles / user rights (C 2.2) Major

Findings In compliance: Yes: X No: Objective Land titles of all estates and mill are available. These documents will be made available to all evidence: interested parties upon request. 1.2.1 (b) Occupational health and safety plans (Criterion 4.7); Major

Findings In compliance: Yes: X No: Objective Occupational Safety & Health Policy updated January 2015 authorized by the Managing Director evidence: is posted in the estates and mill’s office which is publicly available. Estates and mill maintains safety & health documents that includes risk assessment ( Hazard Identification, Risk Assessment & Risk Control (HIRAC) , Emergency Preparedness and Response Plan and Procedure , training plans & training records. All safety & health documents and records maintain will be made publicly available to all interested parties upon request. 1.2.1 (c) Plans and impact assessments relating to environmental and social impacts Major (Criteria 5.1, 6.1, 7.1 and 7.8);

Findings In compliance: Yes: X No: Objective The following documents are available that document plans and impact assessment relating to evidence: environmental and social impacts: 1. Environmental Aspect and Impact Identification Form (SM/5.2/EAI) – plans assessment relating to environmental impacts 2. Social Impact Assessment (SIA) – plans and assessment relating to social impacts Both documents will be made available to all interested parties upon request. 1.2.1(d) HCV documentation summary (Criteria 5.2 and 7.3); Major

Findings In compliance: Yes: X No: Objective The Pollution Prevention Plan FY2016/2017 document is available at estates and mill. This evidence: document will be made available to all interested parties upon request. The plan contains the following : a) Pollution site b) Specific pollution source c) Means of mitigation d) Baseline required e) Means of Monitoring and Action Plan f) Action by staff responsible 1.2.1 (f) Details of complaints and grievances (Criterion 6.3); Major GP 9405A Page 31 of 113

Findings In compliance: Yes: X No: Objective The flow chart of complaints and grievances is available in Appendix 5: Flowchart and evidence: Procedure on Handling Social Issues in the Sustainability Plantation Management System dated 1 November 2008. Details of complaints and grievances are recorded in “Complaint/Grievances Book” kept by estates and mill. The book contain details of the following information: - Date of complaints - Name of complainant - Details of complaints/grievances - Actions taken - Person in-charge - Completion date 1.2.1 (g) Negotiation procedures (Criterion 6.4); Major

Findings In compliance: Yes: X No: Objective Procedure is available as in Appendix 3 ‘Flowchart and Procedure on Handling Land evidence: Disputes in Sustainability Plantation Management System dated 1 November 2008. The document is kept at estates and mill’s office and will be made available to all interested parties upon request 1.2.1 (h) Continual improvement plans (Criterion 8.1); Major

Findings In compliance: Yes: X No: Objective Documents established includes the followings: evidence: 1. Environmental Management Plan FY2016/2017 2. Energy Management Plan FY2016/2017 3. Social Impact Assessment Plan FY2016/2017 Details of continuous improvement plans will be made available to all interested parties upon request. 1.2.1 (i) Public summary of certification assessment report; Major

Findings In compliance: Yes: X No: Objective Public summary of last year certification report is available on the RSPO website. evidence: Full audit report is maintained by SOU 15 and will be made available to all interested parties upon request 1.2.1 (j) Human Rights Policy (Criterion 6.13) Major

Findings In compliance: Yes: X No: Objective “Social & Humanity Management Policy” authorized by the Managing Director dated January 2015 evidence: is posted at Estate and Mill office. Criterion 1.3: Growers and millers commit to ethical conduct in all business operations and transactions. 1.3.1 There shall be a written policy committing to a code of ethical conduct and Minor integrity in all operations and transactions, which shall be documented and communicated to all levels of the workforce and operations. Findings In compliance: Yes: X No:

Objective A written policy committing to code of ethical conduct and integrity in all operation and evidence: transactions by SOU 15 is clearly described in “Code of Business Conduct (COBC) established by Sime Darby Berhad which was launched on 01 st December 2011. The principles of the COBC includes : - Maintains reputation for behaving fairly, honestly and ethically GP 9405A Page 32 of 113

- Shows a collective commitment to uphold integrity throughout the Group COBC handbook is available in Malay language and available at estates and mill visited. Briefing of COBC is carried out by Human Resource department to all new employees. All employees are required to read and declare compliance with COBC. Principle 2: Compliance with Applicable Laws and Regulation Criterion 2.1: There is compliance with all applicable local, national and ratified international laws and regulations. 2.1.1 Evidence of compliance with relevant legal requirements shall be available. Major

Findings In compliance: Yes: X No: Objective SOU 15 has established a SOP on Legal Compliance to ensure that all regulations are identified evidence: and are met by the estates and mill . Copies of legal documents, licenses , permits etc are available at mill and estate level. Examples of licenses and permits seen during the audit are as follows: 1. MPOB licence 549681004000 for receiving, processing and producing CPO Sua Betong POM 2.Scheduled Control Permit ( Permit Barang Kawalan Berjadual ) for Diesel storage for Sua Betong POM:- NS(PD) 10/2012 P(D) No. Permit: N014237 3. MPOB licence 535954002000 for producing and transporting FFB for Sua Betong Estate

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

Findings In compliance: Yes: X No: Objective Legal and other requirements register (LORR) For Year 2016/17 – updated July 2016 and 11 Dec evidence: 2016.The document contain the followings:

1) Legal Requirements - Occupational safety & health - Environmental - General 2) Other requirement 2.1.3 A mechanism for ensuring compliance shall be implemented. Minor

Findings In compliance: Yes: X No: Objective A mechanism for ensuring compliance is described in Section 6.5 “Evaluation of Compliance to evidence: Legislation and Other Requirements. Observed that the mechanism is implemented at estate and mill. The LORR is updated with confirmation by estate and mill manager that operation of estate and mill are compliance with all relevant laws listed on the register. The latest review of LORR was done on November 2016. 2.1.4 A system for tracking any changes in the law shall be implemented. Minor

Findings In compliance: Yes: X No: Objective System for tracking changes - Appendix 5.2.4 a) “Procedure For Legal and Other Requirements”. evidence: Observation : Observed that the system is implemented according to the SOP. Evidence of email received by mill from PSQM team dated 5 July 2015 on update of law (i.e. Implementation of Minimum Wage Order 2016). 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. 2.2.1 Documents showing legal ownership or lease, history of land tenure Major (confirmation from community leaders based on history of customary land tenure, recognised Native Customary Right (NCR) land) and the actual legal use of the land shall be available.

Findings In compliance: Yes: X No: GP 9405A Page 33 of 113

Objective The land titles are available for the visited estates. evidence: Copies of land titles for the operating unit are available and evident during the audit. At Sua Betong , samples of the land titles reviewed during the audit are: Estate Title No. Total Ha Land Term GRN 65215 696.9022 Cultivation of Oil Palm Sua Betong GRN 69593 125.5029 Cultivation of Oil Palm

2.2.2 There is evidence that physical markers are located and visibly maintained Minor along the legal boundaries particularly adjacent to state land, NCR land and reserves. Findings In compliance: Yes: X No: Objective Visit to all visited estates evidence a boundary marking available along the boundary trenches. evidence: The marking is available every 100m along the boundary. Observed that maintenance of the boundary is carried out by the estate every month. 2.2.3 Where there are or have been disputes, additional proof of legal acquisition Minor of title and evidence that fair compensation has been made to previous owners and occupants shall be available, and that these have been accepted with free, prior and informed consent (FPIC).

Findings In compliance: Yes: X No: Objective There is no dispute reported at the time of audit. SOU 15 estates is bordering with other either evidence: smallholders estates or surrounded with commercial and residential areas. 2.2.4 There shall be an absence of significant land conflict, unless requirements Major for acceptable conflict resolution processes (see Criteria 6.3 and 6.4) are implemented and accepted by the parties involved.

Findings In compliance: Yes: X No: Objective There is no dispute reported at the time of audit. SOU 15 estates is bordering with other either evidence: smallholders estates or surrounded with commercial and residential areas. 2.2.5 For any conflict or dispute over the land, the extent of the disputed area shall Minor be mapped out in a participatory way with involvement of affected parties (including neighboring communities and relevant authorities where applicable).

2.2.6 To avoid escalation of conflict, there shall be no evidence that oil palm Major operations have instigated violence in maintaining peace and order in their current and planned operations.

Findings In compliance: Yes: X No: Objective There is no dispute reported at the time of audit. SOU 15 estates is bordering with other either evidence: smallholders estates or surrounded with commercial and residential areas. Evidence show that no violence instigated in maintaining peace and order in their current and planned operations. Criterion 2.3: Use of the land for oil palm does not diminish the legal, customary or users rights of other users without their free, prior and informed consent.

2.3.1 Maps of an appropriate scale showing the extent of recognized legal, Major customary or user rights (Criteria 2.2, 7.5 and 7.6) shall be developed through participatory mapping involving affected parties (including neighboring communities where applicable, and relevant authorities).

Findings In compliance: Yes: X No: Objective There is no dispute reported at the time of audit. SOU 15 estates is bordering with other either GP 9405A Page 34 of 113

evidence: smallholders estates or surrounded with commercial and residential areas. 2.3.2 Copies of negotiated agreements detailing the process of free, prior and Minor informed consent (FPIC) (Criteria 2.2, 7.5 and 7.6) shall be available.

Findings In compliance: Yes: X No: Objective There is no dispute reported at the time of audit. SOU 15 estates is bordering with other either evidence: smallholders estates or surrounded with commercial and residential areas. 2.3.3 All relevant information shall be available in appropriate forms and Minor languages, including assessments of impacts, proposed benefit sharing, and legal arrangements.

Findings In compliance: Yes: X No: Objective There is no dispute reported at the time of audit. SOU 15 estates is bordering with other either evidence: smallholders estates or surrounded with commercial and residential areas. 2.3.4 Evidence shall be available to show that communities are represented Major through institutions or representatives of their own choosing, including legal counsel.

Findings In compliance: Yes: X No:

Objective There is no dispute reported at the time of audit. SOU 15 estates is bordering with other either evidence: smallholders estates or surrounded with commercial and residential areas.

Principle 3: Commitment to Long-Term Economic and Financial Viability Criterion 3.1: A business or management plan (minimum three years) shall be documented that includes, where appropriate, a business case for scheme smallholders.

3.1.1 A business or management plan (minimum three years) shall be documented Major that includes, where appropriate, a business case for scheme smallholders.

Findings In compliance: Yes: x No: Objective The annual budget FY16/17 was sighted at the estate ( Estate Sua Betong ) that forms the estate evidence: business and management plan .

It records the following: a) Mature Hectare – Crop Summary by Field b) Total Direct Cost – Estate Cost c) Administration d) Labour Overhead e) Road and Bridges f) Total Fixed Cost g) Replanting Cost

In their MPlan_2016 programme , the summary production projection for the next 5 years FY 2016/17 – FY2020/2021) is sighted . It records the following information : a) Mature Ha b) Estate Crop c) YPH ( Yield per ha )

The mill has the available FFB projection till 2020/21 .

The mill budget report 2016/17 , M3.0 Total Mill cost Report. Thsi is sighted in the Asst manager computer system It will take into account the following: : a) Mill Production b) Mill cost c) Total Processing Cost d) Total cost e) Cost ( RM/FFB ) GP 9405A Page 35 of 113

f) Total Procesisng Cost / FFB g) Total Cost / FFB h) Cost RM/ palm Product i) Total Processing cot/ palm Product j) Total Cost / Palm Product k) Total cost / CPO

Sua Betong Oil Mill also provided the following costing and crop estimate: a) Total processing cost by Station b) Total processing cost analysed by cost category c) Total Mill cost d) Statistic e) Estimated cost from Estates f) Expected Crop volume/ Tonnage g) Total Outside Crop h) Rate throughput ( MT / Month) i) Mill Utilisation

The evidence was shown to the auditors through access of soft copy in “BPC-Citrix Computer System” in Sime Darby Plantation Computer System.

3.1.2 An annual replanting programme projected for a minimum of five years (but Minor longer where necessary to reflect the management of fragile soils, see Criterion 4.3), with yearly review, shall be available.

Findings In compliance: Yes: x No: Objective Annually SOU 15 Sua Betong will review each estate replanting programme. evidence: Annual replanting program projected for upcoming five years is available sighted in the LRRP Negeri Sembilan Replanting Programme 2016/2017 to 2036/2037.

The following are the replanting programme for the estate sampled

Name of 2016/2017 2017/2018 2018/2019 2019/2020 2020/2021 Estate

Sua 112 120 78 0 110 Betong Tampin Linggi 0 0 78.43 92.11 126.67

Principle 4: Use of Appropriate Best Practices by Growers and Millers Criterion 4.1: Operating procedures are appropriately documented, consistently implemented and monitored. 4.1.1 Standard Operating Procedures (SOPs) for estates and mills shall be Major documented.

Findings In compliance: Yes: x No: Objective a. The SOPs for plantation and mill has been documented in: evidence: - Sime Darby Agricultural Reference Manual - Oil Palm Planting (Updated on 11 Nov 2013) GP 9405A Page 36 of 113

- Estate Quality Management System (Latest updates on 1st Nov 2008)

- Mill Quality Management System Manual (Version 1: 2008)

b. The SOP did cover key processes for both plantation and mill operations, such as:

- Plantation: Seed Production Unit; Planting Density; Land Clearing and Preparation; Manuring; Weeding; Pest & Disease; Harvesting; Road Maintenance

- Palm Oil Mill: Receiving FFB; Loading Ramp, Steriliser; Threshing Station; Boiler Station, Effluent Treatment Plant

c. A copy of the SOP is available at all estate office and documented in an appropriate language (English and Malay) as evident in Sua Betong Estate.

In POM, the documented procedure is kept securely in the Managers Office.

d. Site inspection conducted during the audit evidence that the SOPs are implemented and understood by workers. For example, inspection conducted at Field 2009B (CDA Spraying) confirmed that the activity has been conducted in accordance to the Best Practices.

e. The SOPs is appropriate and adequately cover all estate and mill processes and activities.

f. The SOP are kept in the estate offices and controlled by estate and assistant manager.

4.1.2 A mechanism to check consistent implementation of procedures shall be in Minor place.

Findings In compliance: Yes: x No: Objective a. Master list of all SOPs are available in Sime Darby Agricultural Reference Manual applicable evidence: all estates. Master list for all mill operations is available in Mill Quality Management System master List.

Daily inspection by Estate & POMs executive has been conducted to monitor the implementation of the SOP.

b. The production unit keep and updated version for any changes or updates in the SOP.

c. The following mechanism for monitoring is available, for example:

- The SOP has been established in English and Malay language.

- Internal control (e.g. field inspection) has been conducted by Plantation Advisor; Ibrahim Abdul Majid to monitor consistent implementation of SOPs in Sua Betong estate as evident in Plantation Advisor Report (SOU15/SBE/01/2015-16) dated 9 th , 13 th & 14 th Jun 2016. Plantation Advisor is a competent personnel (by nature of working experience) to carry out the internal control activities appointed by Sime Darby.

Plantation Advisor assessment has been conducted on 21 st – 23 rd Mar 2016 as evident in report no SOU15/SE/02/15-16 by Mr. Ibrahim Abdul Majid.

Daily work inspection has been conducted to monitor the effectiveness of ARM implementation. For example; for manuring activities will be recorded in Manuring Quality Assessment Record (by Staff, Assistant Manager); Manuring Checklist (Planning Monitoring & Upstream Performance Management Department) and can be monitored through Sime Darby Digital system.

For consistent SOP implementation in palm oil mill, OER Taskforce Related to Mill Operation (Sua Betong) is evident. Latest assessment has been conducted on 28 th – 30 th Nov 2016.

Routine workplace inspection has also been conducted at all workstation by EHS Representative. Latest inspection has been conducted on 31 st Oct 2016 as evident in Pemeriksaan Tempat Kerja .

- Field inspection audits are carried out regularly (annually) covering implementation of all the ARMs in the field. Regular inspection and monitoring are conducted by Mandore, Field Staff, Assistant Estate Managers and Estate Managers.

- Any comments, recommendation and corrective action request raised by Plantation Advisor GP 9405A Page 37 of 113

for continuous improvement are implemented as evidence in Manager Comments of the Plantation Advisor Report.

4.1.3 Records of monitoring and any actions taken shall be maintained and Minor available, as appropriate.

Findings In compliance: Yes: No: Objective Measurements or results of internal control and monitoring activities together with the records of evidence: corrective actions are evidence in Manager Comments of the Plantation Advisor Report.

Daily inspection has been conducted by Field Staff and Assistant Manager to monitor correct usage of PPE and SOP implementation. Daily briefing and inspection has been conducted by the estate management during muster ground.

The estate also practices Workplace Inspection to ensure all procedures, ARM and best practices has been implemented every 3 monthly.

It is confirmed that workplace inspection in Siliau Estate has been conducted on 9 th Dec 2016 covering all workplace and verified by the estate manager. Site inspection conducted by audit team to Field 2000B (Spraying); 2006E (HCV) and 2002F (Harvesting) confirmed that all activities has been conducted according to the ARM.

Workplace inspection report for Sua Betong estate is available in “ Pemeriksaan Tempat Kerja ” conducted by AJK OSHA. However, the report has not been signed and found did not cover some of the facilities or workplace (e.g.: Pre-Mix Area; Chemical Store; Estate Vehicle).

OBSERVATION 28

4.1.4 The mill shall record the origins of all third-party sourced Fresh Fruit Major Bunches (FFB).

Findings In compliance: Yes: x No: Objective a. The POM only received FFBs from its own supply base. The supplying estates are: evidence: 1. PD-Lukut Estate

2. Salak Estate

3. Siliau Estate

4. Bradwall Estate

5. Sengkang Estate

6. Sua Betong Estate

7. Tampin-Linggi Estate

8. Sungei Bahru Estate

b. Daily and summary records of volume and origins of the FFB received are recorded in Monthly Crop Report. For example, since Jul - Nov 2016, FFB received by the POM are:

1. PD-Lukut Estate: 204.72MT (Crop diverted to Tanah Merah POM)

2. Salak Estate: 4,899.59MT

3. Siliau Estate: 17,424.77MT

4. Bradwall Estate: 18,439.08MT

5. Sengkang Estate: 22,998.77MT

6. Sua Betong Estate: 24,773.66MT

7. Tampin-Linggi Estate: 16,609.94MT

8. Sungei Bahru Estate: 9,301.04MT GP 9405A Page 38 of 113

These records have been verified against the Weighbridge Ticket for incoming FFB. Criterion 4.2: Practices maintain soil fertility at, or where possible improve soil fertility to, a level that ensures optimal and sustained yield. 4.2.1 There shall be evidence that good agriculture practices, as contained in Minor Standard

Operating Procedures (SOPs), are followed to manage soil fertility to a level that ensures optimal and sustained yield, where possible.

Findings In compliance: Yes: x No: Objective a. SOPs for Good Agricultural Practices in managing soil fertility are available in Section 8: evidence: Manuring.

b. Site inspection conducted during the audit (Field P2016A-Replanting) evidence that the SOPs for EFB mulching at replanting areas have been implemented and monitored by mandore and field staff.

c. nterviews conducted with the workers evidence that they have been trained with the SOP for EFB Mulching.

4.2.2 Records of fertiliser inputs shall be maintained. Minor

Findings In compliance: Yes: x No: Objective a) Records of fertiliser inputs are maintained in Manuring FY16/17 report and updated by evidence: respective Field Staff and verified by Estate Manager.

For example, Field 2001A has completed the manuring program as per recommendation by Agronomist for the application of MOP (1.75kg/palm) on19th – 21 st Nov 2016. Sua Betong estate did monitor fertilizer application progress from the report is available in Manuring FY16/17 Record. The application record is in accordance to Agronomic & Fertiliser Manuring Recommendation Report FY2016-2017.

b) It is evidence that the fertiliser application linked to the agronomic report in 2016/17 Fertilizer Recommendation Report from Mr. R. Kumaran (Principle Agronomist II).

4.2.3 There shall be evidence of periodic tissue and soil sampling to monitor Minor changes in nutrient status.

Findings In compliance: Yes: x No: Objective a. SOP for tissue sampling procedure are evidence in Section 4: General Information for the evidence: Sustainable Plantation Management System. Soil sampling analysis will be conducted every 5 years to maintain soil nutrient status.

b. Record of leaf analysis is available in Plant Analysis Test Report. Latest leaf analysis has been conducted on 7-8 Mar 2016 as evident in Agronomic & Fertilizer Recommendation Report (25 th Mar 2016). Leaf sampling analysis has been prepared in Summary of Leaf Nutritional Status of Palms.

c. Result of the foliar analysis has been incorporated for the manuring recommendation.

4.2.4 A nutrient recycling strategy shall be in place, and may include use of Empty Fruit Minor Bunches (EFB), Palm Oil Mill Effluent (POME), and palm residues.

Findings In compliance: Yes: x No: Objective The production unit is applying EFB as a recycling strategy to reduce the usage of inorganic evidence: fertilizer as per recommendation from Agronomic & Fertilizer Recommendation Report and ARM.

Areas applied with EFB have been recorded in Sua Betong South Division Empty Fruit Bunch logbook. For example, field 2008B has been recommended to be applied with EFB (40MT/ha x 23Ha = 920MT EFB). As to date (30 th Nov 2016), the field has been applied with 323.34MT. Criterion 4.3: Practices minimize and control erosion and degradation of soils.

4.3.1 Maps of any fragile/marginal soils shall be available. Major

Findings In compliance: Yes: x No: GP 9405A Page 39 of 113

Objective a. There is no fragile soils and problem soils (refer to 4.3.6) available in the audited estates. Soil evidence: Map for the visited estate is available.

Sua Betong and Siliau estate soil series among others:

i. Bungor

ii. Durian

iii. Local Alluvium

iv. Malacca

v. Seremban

The soil maps are geo-referenced and of appropriate scale (1:23,000). 4.3.2 A management strategy shall be in place for plantings on slopes between 9 Minor and 25 degrees unless specified otherwise by the company’s SOP.

Findings In compliance: Yes: x No: Objective evidence: There are no steep area available in Sua Betong and Siliau Estate as evidence in Slope, Contour & Manuring Block Map.

Management plan for planting on slope is available in Section 4: Land Preparation of the ARM.

4.3.3 A road maintenance programme shall be in place. Minor

Findings In compliance: Yes: x No: Objective Road maintenance programme for Siliau estate is in place as evidence in Road Grading evidence: Programme for 2016/2017. The programme is supported with budget and resources as evident in Ex-Estate Cost (MPLAN 2016). The allocated budget for road and bridges maintenance in Siliau estate is RM80,103.73.

For example, latest road maintenance programmes has been conducted in Field 2006E (on 14 th Dec 2016).

Sua Betong Estate has budget ted about RM156,000 and as of todate ( till Nov 2016 ) the estate has used RM 52,000 4.3.4 Subsidence of peat soils shall be minimised and monitored. A documented Major water and ground cover management programme shall be in place.

Findings In compliance: Yes: No: N/A Objective There is no peat soil available in the audited estates as evident in Soil & Manuring Block Map & evidence: Soil Series Map. Not applicable. 4.3.5 Drainability assessments where necessary will be conducted prior to Minor replanting on peat to determine the long-term viability of the necessary drainage for oil palm growing.

Findings In compliance: Yes: No: N/A Objective There is no peat soil available in the audited estates as evident in Soil & Manuring Block Map & evidence: Soil Series Map. Not applicable. 4.3.6 A management strategy shall be in place for other fragile and problem soils Minor (e.g. podzols and acid sulphate soils).

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

4.4.1 An implemented water management plan shall be in place. Minor

Findings In compliance: Yes: x No: Objective a. Water management plan for the production unit is available and in place for mill and evidence: plantation.

Water Management Plan for Sua Betong and Siliau Estate is evident in Water Management Plan (dated 9 th Sep 2016). The plan has included:

- Contingency Plan during Water Shortage (16/17)

Water Shortage/Dry Spell

Severe Water Pollution

- Water Management Plan

Water Sources

Water Quality

Control of Erosion

Sua Betong estate did monitor water usage monthly as summarized in Water Usage Sua Betong Estate FY2016/2017. The plan did include the following:

- Identification of water sources: Items (SAINS, Rain Water)

- Efficient use of water: Water usage monitoring at bulk meter.

- Renewability of water source: Rainwater

- Access of clean drinking water for clean water has been provided to all workers as main water supplies from SAINS (national grid).

- Commitment to avoid surface and ground water contamination has been clearly mentioned in Section 3: Control of Erosion and river reserve guidance.

b. The identified actions in the plan have been implemented in Sua Betong estates and POM. Water management plan for Sua Betong POM is evident during the audit. The plan has included:

Item

Location

Action Plan

Person in Charge

Target Date

Monitoring of BOD as per approved Jadual Pematuhan (ASNS (B) 31/152/000/023 has been conducted by the POM. Effluent monitoring is recorded in Effluent Meter Reading Book which has been updated by appointed personnel (Mr. Balasivan). The record book is updated daily; latest recorded evident during the audit is on 21 st Dec 2016 (1,342MT). Quality monitoring of effluent pond at discharge has been conducted monthly as evident in Effluent Analysis Test Report (EP662/2016). The BOD at final discharge is 28mg/L and reported to DOE every 3 monthly. Latest report submitted to DOE by Sua Betong POM has been made on 3 rd Oct 2016.

The current established Water Management Plan did not adequately include all information listed in RSPO P& C MYNI (2014 ) Guidance.

MINOR 22 raised last year not closed so raised as MAJOR 22

The Production unit has submitted evidences of Water Management Plan for year 2016/17 which consist GP 9405A Page 41 of 113

information of: - Initiative - Benefits - Remarks - Units of Measure There are also evidences of Rainfall data recorded; water bills recorded as well as water sampling results has been attached. MAJOR CAR 22 CLOSED

4.4.2 Protection of water courses and wetlands, including maintaining and Major restoring appropriate riparian and other buffer zones (refer to national best practice and national guidelines) shall be demonstrated.

Findings In compliance: Yes: x No: Objective There is no natural water sources/wetlands available in all estates visited. evidence: All water for domestic use is supplied from Syarikat Air Negeri Sembilan (SAINS) and Syarikat Air Melaka. The water courses shall be protected as evidence in Guidelines on River Reserve Management (April 2014). The guideline has been distributed to all estates on 28th Apr 2014.

Site inspection conducted to field evidence a natural watercourses indentified as conservation area are also demarcated with any buffer zone to prevent any activities and promote rehabilitation of natural vegetation.

Clarification was accepted that at Tampin Linggi Estate the water course that flows along Field 2011A and the neighbouring village was only a main field drain and it does not join to any main rivers or streams 4.4.3 Appropriate treatment of mill effluent to required levels and regular Minor monitoring of discharge quality, shall be in compliance with national regulations (Criteria 2.1 and 5.6).

Findings In compliance: Yes: x No: Objective a. The mill effluent treatment process has been explained in Chapter 15.0: Effluent Treatment evidence: Plant of the Mill Quality Management System.

b. Procedure for checking and monitoring water discharge quality (particularly BOD) is available in Table 4: Effluent Discharge Limits into Watercourses and Table 1: ETP Samples Points and Sample Size.

Result of effluent quality monitoring (pH and Temperature) is recorded in the ETP File. The record is updated daily to monitor pH, VFA and TA levels.

Latest recorded date is on 21 st Dec 2016 covering the Anaerobic and Aerobic ponds 1- 6 and Final Settling Pond.

BOD level result is evident in Effluent Analysis Test Report. Latest report is available in Test Report No.: EP662/2016 dated 18 th Nov 2016.

c. The water discharge quality is in compliance with national regulations as stated in DOE license (002084) dated 21 st Jun 2011. The effluent discharge has been in compliance to the limit set in Jadual Pematuhan Lesen (Rujukan: ASNS (B) 31/152/000/023) as below:

• Land Irrigation:

a. BOD: <100mg/L

b. pH: 5.0-9.0

c. Temperature: <45˚C

GP 9405A Page 42 of 113

4.4.4 Mill water use per tonne of Fresh Fruit Bunches (FFB) (see Criterion 5.6) shall Minor be monitored.

Findings In compliance: Yes: x No: Objective a. A procedure to measure mill water usage is justified in Water Management Plan FY2015/16 evidence: for Sua Betong POM. Water consumption by the mill is recorded in Water Usage for Financial Year 16/17.

b. Records of mill water use per tonne of Fresh Fruit Bunches (FFB) are available in Water Usage for Financial Year 16/17. The Water Management Plan for Sua Betong POM has set a target to optimized water usage up to 0.6m3/MT FFB processed. Since Jul – Nov 2016, the POM has achieved water consumption per MT FFB processed at 0.14MT/FFB.

Criterion 4.5: Pests, diseases, weeds and invasive introduced species are effectively managed using appropriate Integrated Pest Management techniques. 4.5.1 Implementation of Integrated Pest Management (IPM) plans shall be Major monitored.

Findings In compliance: Yes: x No: Objective a. Documented IPM plan are available in Section 15: Plant Protection of Sime Darby Agricultural evidence: Reference Manual (ARM).

b. The IPM plan includes the following:

- Identification of potential pests and thresholds (for example): Rat Control; Bagworm Control; Ganoderma Control

- The IPM procedures has identified and explained the techniques used for the treatment (cultural, biological and mechanical). For example, the treatment methods used are:

(1) Rat Control: Biological Control and Rat Baiting

(2) Rhinoceros Control: Cultural Practices and Chemical Treatment

- The native species for the biological control method as listed in the IPM Procedure. For example, Owl, Snakes and Leopard Cat has been identified for the native species for rat damage.

- The treatment method as identified can reduce the use of chemicals over a period of time. The plan for reducing chemical usage includes: removal of noxious weeds, replace with desirable vegetation and retain the ground moisture.

- The production unit did monitor the amount of pesticide used in PD-Lukut: Total Rat Bait Requirements (Jun-Dec 2015). For example, for 4 th Round rat baiting campaign in Field 1999C, total bait applied are 702 pieces.

c. SOP for the implementation of the management plan to monitor its effectiveness has been justified in Section 15: Plant Protection.

Records of areas treated with pesticides and areas planted with beneficial plants (e.g.: Cassia cobenensis; Antigonon leptopus, Euphorbia heterophylla and Turnera subulata) is available during the audit.

d. Records of pest occurrence and control are evidence in Bagworm Census Form (Sua Betong n & Siliau).

e. For example, latest census conducted on 19 th Oct 2016 in Field 2002A. The census found no larvae available in the field.

4.5.2 Training of those involved in IPM implementation shall be demonstrated. Minor

Findings In compliance: Yes: X No: Objective Records of IPM training provided for workers involved in the implementation of IPM (Trunk evidence: Injection) is evidence in Chemical Safety Training by Plant Protection Department (Pn. Azlina) dated 11 th Aug 2015.

Interview conducted by two sprayers (trunk injector); Mr. Ramesh Takur and Mr. Ahmed Jama confirmed their attendance for the training. GP 9405A Page 43 of 113

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

4.6.1 Justification of all pesticides used shall be demonstrated. The use of Major selective products that are specific to the target pest, weed or disease and which have minimal effect on non-target species shall be used where available. Findings In compliance: Yes: x No: Objective a. The company has a documented procedure on safe use of chemicals as evidence in evidence: Chemical Safety Management (SD/SDP/PSQM(ESH)/202-OH4). Chemical usage justification has also been compiled in the ARM as available in Table 4 and Table 5 (Herbicides Recommended for Immature/Mature Planting).

b. The company has sets of SOPs for use of selective products that are specific to target pests, weeds, or diseases and which have minimal effect on non-target species.

c. Site inspection conducted in Field 2002B in Siliau Estate confirmed the application of Glyphosate and Metsulfuron Methyl for circle spray. The chemical is listed in Table 5: Herbicides Recommended for Mature Planting.

4.6.2 Records of pesticides use (including active ingredients used and their LD50, Major area treated, amount of active ingredients applied per ha and number of applications) shall be provided. Findings In compliance: Yes: x No: Objective a. Pesticide application program for Siliau estate is evident in Circle and Path Spraying evidence: Programme 2016/2017 (every 4 months). Actual implementation for the activities is recorded in Work Programmed Progress Record and performance is recorded in Circle & Path Spraying Interval.

b. Records of pesticides used are available in BIN Card Issuance (Supersate). Example of pesticides application records are:

- Field No.: 2002F

- Date of Application: 1 st Jul 2016 – 9th Aug 2016

- Chemical Used: Glyphosate

- Quantity Used: 140 Litres

c. Evidence of a.i. applied has been recorded for each product type, per hectare, per MT FFB as available in Monitoring Pesticide Usage per Ha and FFB Production. Examples of pesticide record used are:

Nov 2016: 0.08a.i./Ha & 0.03a.i./MT FFB

Oct 2016: 0.21a.i./Ha & 0.09a.i./MT FFB

4.6.3 Any use of pesticides shall be minimised as part of a plan, and in accordance Major with Integrated Pest Management (IPM) plans. There shall be no prophylactic use of pesticides, except in specific situations identified in industry’s Best Practice. Findings In compliance: Yes: x No: Objective a. The company have an IPM plan as evidence in Section 15: Plant Protection of the ARM. evidence: b. The IPM plan has been implemented in the estate. Example of IPM practices in the production unit is Beneficial Plant Planting Programme. Progress of area planted with beneficial plant is evidence in NS Zone Beneficial Plant for Immature Area. The recommendation for planting of beneficial plant is 1 decametre/Ha. For example, field 2013 of Siliau Estate has been completed at 1.88decametre/Ha.

c. The effectiveness of the IPM plan is monitored through the census and observation of pest attack.

d. As to the date of audit, the production unit has no major outbreak of pest attack. Site inspection conducted at Siliau Estate confirmed the areas treated for bagworm disease. Record of census is evident in Bagworm Census Interval (Census) and Trunk Injection Interval (Treatment). The main attack for Siliau Estate is Ganoderma and Bagworm. However, GP 9405A Page 44 of 113

both pests are still below the threshold level set by agronomist.

4.6.4 Pesticides that are categorised as World Health Organisation Class 1A or 1B, Minor or that are listed by the Stockholm or Rotterdam Conventions, and paraquat, are not used, except in specific situations identified in industry’s Best Practice. The use of such pesticides shall be minimised and/or eliminated as part of a plan, and shall only be used in exceptional circumstances. Pesticides selected for use are those officially registered under the Pesticides Act 1974 (Act 149) and the relevant provision (Section 53A); and in accordance with USECHH Regulations (2000). Findings In compliance: Yes: x No: Objective a. The production unit did not use any WHO class 1A, class 1B, and Stockholm or Rotterdam evidence: Conventions pesticide.

b. A letter from SVP, Plantation Planning & Monitoring of Sime Darby Plantation Sdn Bhd dated 11 th October 2014 regarding the Reminder-Usage of Paraquat herbicide not allowed evident that the company is committed in eliminating the usage of Paraquat (herbicide).

c. Physical verification of inventory in the chemical store are found match with the inventory records.

4.6.5 Pesticides shall only be handled, used or applied by persons who have Major completed the necessary training and shall always be applied in accordance with the product label. Appropriate safety and application equipment shall be provided and used. All precautions attached to the products shall be properly observed, applied, and understood by workers (see Criterion 4.7). Findings In compliance: Yes: x No: Objective a. SOP for chemicals/pesticides handling is available in Section B4: Weeding/Spraying- evidence: Immature of the Estate Quality Management System (1st Nov 2008). SOP for chemical handling is available in Chemical Safety Management (SD/SDP/PSQM(ESH)/202-OH4). SOP for chemical handling is also justified in Pictorial Safety Standard (17 th Mar 2008).

b. The production unit has a training plan and training records for workers who apply or handle pesticides as evident in Training Needs and Plan FY2016/2017. Latest training for IPM Treatment (Trunk Injection) has been conducted on 11 th Oct 2016 by Mr. Hafiszan. Latest training for herbicide prayers is evident in Safety Briefing dated 26 th Jul 2016.

c. Training for sprayers has been conducted in an appropriate language understood by the workers.

d. The pesticides are handled, used or applied only by persons who have completed the necessary training. Site inspection to Field 2002B (Siliau) evidences those 5 sprayers (e.g.: Anwar, Wangwa and Jamrah) has attended the spraying training on 26 th Jul 2016.

e. It is evidence that all workers involved in the application are able to demonstrate the understanding of the hazards and risks related to chemicals used when interviewed during site inspection to Field 2002B.

f. Applications of pesticides are in accordance to the product label.

g. MSDS for pesticides used are readily available in the estate office and chemical store. Example of MSDS available during the audit is Risalah Data Keselamatan Kimia for Glyphosate isopropylamine from Hextar Chemicals Sdn Bhd.

h. Appropriate safety and application equipment has been provided by the estate management and used by the workers. Examples of the PPE used are Apron, Gloves, Face Mask, Rubber Boot and Eye Goggle.

i. Site inspection conducted at spraying area evidence that sufficient PPE (according to recommendations in any risk assessments done) has been used by all workers. The SOP for spraying has clearly listed all PPEs required to conduct pesticide application.

j. The PPE are provided can be easily replaced if damaged. The estate did maintain a record of PPE issued to the workers in PPE Record.

The estate management representative (mandores, field staff) did check the workers usage of appropriate PPEs when applying the pesticides. GP 9405A Page 45 of 113

However during the visit to F00E at Tampin Linggi Estate , the spray operation was checked. Mandore: Ms A.Vembaigemoh Spray operators: a) Das Bahamdas b) Roy Presenjit c) Mondal Rakesil d) Sarki Subardo They were privded with the appropriate PPE. Upon checking on their training rcords at Tampin Linggi Estate, there were no records of evidence to show that training was conducted for the above new spray operators that are competent in chemical handling such as herbicide. MAJOR CAR 27

Evidence of training , Latihan Meracun untuk Pekerja Baru conducted again to the spray operators on 23/12/16 to ensure that these workers are competent in handling chemical as well as the safety aspects of the operation is practiced . Trainer: Amirul Izzudin Ahmad Wahid, Asst Manager , Tampin Linggi Estate. SOU 15 Sua Betong also submitted evidence of assessment and completency , ‘ Borang Penilaina Kompetensi ’ of the workers , Das, Roy Mondal and Sarki. Record show that although they are weak in the local language ,Bahasa Malaysia they were able to carry out the spray operation correctly and safely. As a result they were competent in carrying out the duty as spray operators.

MAJOR CAR 27 CLOSED

4.6.6 Storage of all pesticides shall be according to recognized best practices. All Major pesticide containers shall be properly disposed of and not used for other purposes (see Criterion 5.3). Pesticides shall be stored in accordance to the Occupational Safety and Health Act 1994 (Act 514) and Regulations and Orders, Pesticides Act 1974 (Act 149) and Regulations. Findings In compliance: Yes: X No: Objective a. SOP for pesticide storage been documented in Pictorial Safety Standard (Section 5: Stor ). evidence: Site inspection conducted to chemical store evident that the SOP has been implemented.

b. All pesticides are stored according to the recognised best practices. All liquids pesticides are stored underneath the powder chemicals.

c. There is evidence that empty pesticide containers are properly stored and disposed off and not used for other purposes. All empty chemicals containers are kept in Empty Chemical Container Store.

Disposal of empty chemical containers has been made through Hiap Huat Chemicals Sdn Bhd. Example of latest delivery of empty chemical containers to Hiap Huat Chemicals Sdn Bhd is conducted on 24 th Sep 2016 for the disposal of 1,200kg empty chemical containers.

There is no evidence observed in the field that pesticide containers are indiscriminately disposed (in dump site) or used for other purposes (e.g. as waste containers, flower pots).

MSDS for Sodium Chlorate and Ebor Baits were not available at Sua Betong , however available at the office of Sua Betong . The MSDS were sighted at Tampin Linggi Estate .

4.6.7 Application of pesticides shall be by proven methods that minimise risk and Minor impacts. GP 9405A Page 46 of 113

Findings In compliance: Yes: X No: Objective a. SOP for chemicals/pesticides handling is available in Pictorial Safety Standard. Site evidence: inspection to spraying activities has evidence that all workers are using appropriate equipments for the spraying work.

b. Training for sprayers on Safe Operating Procedure, including risk and impacts of pesticide applications has been conducted on 26 th Jul 2016.

4.6.8 Pesticides shall be applied aerially only where there is documented Major justification. Communities shall be informed of impending aerial pesticide applications with all relevant information within reasonable time prior to application. Findings In compliance: Yes: X No: N/A Objective There is no application of aerial spray in the production unit. Not applicable. evidence: 4.6.9 Evidence of continual training to enhance knowledge and skills of employees Minor and associated smallholders on pesticide handling shall be demonstrated or made available. (see Criterion 4.8). Findings In compliance: Yes: x No: Objective a. The company has provided information materials on pesticide handling to all relevant evidence: employees.

Training on MSDS and chemical handling has also been conducted on (for example):

24 th Sep 2016: MSDS/Policy Briefing

11 th Oct 2016: Trunk Injection

26 th Jul 2016: Chemical Handling & SOP

b. Evidence of periodic training of employees is available in Taklimat/Latihan Keselamatan

c. Interview with workers has been conducted to evaluate their knowledge and skills in pesticides handling.

4.6.10 Proper disposal of waste material, according to procedures that are fully Minor understood by workers and managers shall be demonstrated (see Criterion 5.3). Findings In compliance: Yes: No: x Objective evidence: a. SOP for proper disposal of waste material is available in Waste Management Plan and Scheduled Waste Management.

b. Training on waste management, reduction and recycling program has been provided to all workers on 20 th May 2015. Training materials is evident in Panduan Latihan Kitar Semula .

Evidence of implementation of proper ways for waste management set by the production unit has been sighted during site inspection. Linesite Inspection Report prepared by Estate Hospital Assistant evidence that regular inspection has been conducted to housing area and linesite.

Canyon empty chemical containers were not sighted at the empty container store at Sua Betong Estate The contaminated sawdust in the Sua Betong Estate SW Store was not label Empty chemical containers of Kenlon and Enviro-Cyper upon checking were not tripled rinsed at Tampin Linggi Estate MINOR CAR 28 4.6.11 Specific annual medical surveillance for pesticide operators, and Major documented action to treat related health conditions, shall be demonstrated. GP 9405A Page 47 of 113

Findings In compliance: Yes: x No: Objective a. An updated list of pesticide operators is available in Medical Surveillance record books at evidence: every estate. All pesticides operators have undergone annual medical surveillance conducted by appointed occupational doctors. The appointed occupational doctor is Dr. Zakaria Saad (Registration No.: HQ/13/DOC/00/304).

There are 31 workers handling chemicals in Sua Betong Estate and 22 workers in Siliau Estate.

b. Records of annual medical surveillance of pesticide operators are available in Occupational Medical Surveillance Programme Record Book (USECHH 1).

Example of sprayers met during site inspection, Ramesh Takur and Ahmed Jama has undergone annual medical surveillance on 20 th Oct 2016. Medical and treatment records of all pesticide operators are kept at the estate office and monitored by Sua Betong Estate Hospital Assistance, Mr. K. Vijayan.

For chemical handlers in Siliau estate, latest annual medical surveillance has been conducted on 7 th Apr 2016. Records of the annual surveillance of the workers met at spraying area (Field 2002B) , Bhai Sherpa and Wang Wa Sherpa were sighted

c. In Sua Betong POM, it is evidence that all workers working in areas with high decibel (exposed to high noise) has undergone Audiometric Test in Feb 2016. The audiometric test has been conducted by Dr. Ramziawati Hamidun (DOSH: HQ/08/DOC/00/453) from Hospital Islam Azzahrah. 4.6.12 No work with pesticides shall be undertaken by pregnant or breast-feeding Major women.

Findings In compliance: Yes: x No: Objective a. The production unit has distributed an Internal Memo preventing confirmed pregnant and evidence: breast-feeding women from handling pesticides as evident in Internal Memo: No Work with Pesticide for Confirmed Pregnant and Breast-Feeding Women dated 1 st July 2014. The company is in compliance to USECHH Regulation to avoid pregnant and breast-feeding women in handling pesticides.

b. There is no female worker handling pesticides in all visited estate. Female workers are not involved in manuring and general workers.

c. The company have a system to identify pregnant and breast-feeding women by monthly medical checkup as evidence during the interview session with Mr. K. Vijayan, Estate Hospital Assistance (EHA).

d. Site inspection to spraying area confirmed no female sprayers/manurers involved in the estate.

Criterion 4.7: An occupational health and safety plan is documented, effectively communicated and implemented 4.7.1 An occupational health and safety policy shall be in place. An occupational Major health and safety plan covering all activities shall be documented and implemented, and its effectiveness monitored. Findings In compliance: Yes: x No: Objective evidence: a. Health and safety policy for the company are in place as evidence in the policy , Occupational Safety and Health Policy . The policy has been signed by Datuk Franki Anthony Das, Managing Director in January 2015. The policy written in English and Bahasa Malaysia/Melayu language covering mitigation of risks to workers health and safety at all workplace activities. b. The message of the policy has been delivered to all workers during morning muster, Safety Committee Meeting and Safety Townhall.

c. Health & Safety Plan is in place as evidence in OSH Programme 2016/2017. Examples of the programme are:

i. Safety & Health Committee ii. Legal Register GP 9405A Page 48 of 113

iii. Risk Management iv. Chemical Management v. PPE Management vi. OSH Training

c. Evidence for implementation of the plan is explained and sighted in details records of training, Work Place Inspection and OSH Safety Meeting.

4.7.2 All operations where health and safety is an issue shall be risk assessed, and Major procedures and actions shall be documented and implemented to address the identified issues. All precautions attached to products shall be properly observed and applied to the workers. Findings In compliance: Yes: x No: Objective a. Risk assessments for all operations where health and safety is an issue in the production unit evidence: has been recorded in HIRARC Form. The risk analysis and updates has been conducted by Management of each estates and mill.

b. The risk assessment did cover all related activities conducted in Sua Betong production unit in sequence of Step no. in SOP (ie: Cutting FFB & Fronds, P&D Spray, Harvesting, Spillage of diesel, Mechanical, etc).

c. For accidents occurred, the risk assessments with action plans are conducted to prevent further recurrence. The HIRARC assessment records are available in File 02: “HIRADC” (Sua Betong Estate), File 24: “HIRARC” (Siliau Estate) and File B13: “HIRADC” (Sua Betong). The latest assessment was conducted for Sua Betong Estate on the 27 November 2016 as responded to an accident where a harvester has been hit by falling fronds and debris. For Siliau Estate, latest HIRARC assessment was conducted 28 th Sept. 2016 in response to injuries of cuts during handling sharp tools. An incident happen at the POM’s Sterilizer Station on 5 May 2016, hence the HIRARC review was conducted 10 days after.

d. All precautions attached to products has been properly observed and applied to the workers.

However, documentation review conducted on Sua Betong POM HIRARC dated 7 th October 2015 (Depericarping station) reveals that activities at Depericarper Station have not included Noise Hazard. Noise Map requested for the POM is not evident.

MAJOR CAR 29

SOU 15 Sua Betong submitted the revised HIRARC dated 4/1/17 to include the the risk assessment at the Depericarping Station for noise hazard (if in the noise map states this area requires noise hazard protection) 7.3.4.2 (h) Exposure to high noise level . Pictorial evidence of the noise map as well as the high noise hazard signage being displayed at visible location to inform the mill workers were submitted . MAJOR CAR 29 CLOSED

4.7.3 All workers involved in the operation shall be adequately trained in safe Major working practices (see Criterion 4.8). Adequate and appropriate protective equipment shall be available to all workers at the place of work to cover all potentially hazardous operations, such as pesticide application, machine operations, and land preparation, harvesting and, if it is used, burning. Findings In compliance: Yes: x No: Objective a. All workers involved in the operation are appropriately trained in safe working practices as evidence: evidence in OSH Programme 2016/2017 – OSH Training section and records of training are maintained. Example of the activity in the program are:

- Chemical Management - Accident Prevention & Investigation - Tractor safety - Legislation and Regulation (OSHA’94 & FMA’67)

b. OSH training programs and training records are available in OSH Programme 2016/2017 and training records. The training has been conducted by qualified persons.

GP 9405A Page 49 of 113

c. Adequate and appropriate protective equipment has been made available to all workers at the place of work to cover all potentially hazardous operations, such as pesticide application, machine operations and harvesting.

d. Personal Protective Equipment (PPE) Matrix was sighted in PR4. Use Of Appropriate Best Practices.

e. Appropriate PPE has been provided to all workers and replaced when damaged. The record BIN Card has been updated by Store Clerk at audited estates and POM.

f. All workers are observed wearing appropriate and good condition PPE when at workplace.

4.7.4 The responsible person/persons shall be identified. There shall be records of Major regular meetings between the responsible person/s and workers. Concerns of all parties about health, safety and welfare shall be discussed at these meetings, and any issues raised shall be recorded. Findings In compliance: Yes: x No: Objective a. The production unit has identified the responsible person to implement OSH. The appointed evidence: personal is Mr. Devantherao Appanah, Safety Officer. At the estate level, the estate management has established Emergency Response Team as evident in the organization chart (Head by the Estate Manager).

b. Meetings between the responsible persons and workers have been conducted on a regular basis (as required by law). The company has initiated Safety Townhall to be conducted annually at all estate to deliver messages regarding safety issues to all workforces. SDP Safety & Health Townhall 3.5 (Siliau Estate) was last conducted on 19 th July 2016. The record is maintained in file No.D97 “Town Hall”.

Latest OSH meeting at Siliau Estate was conducted on 9 th December 2016 which has been attended by 10 employer and 7 employee representative. The documented information was sighted in Siliau Estate’s folder system, file no.34 “OSH”.

Safety committee meetings for Sua Betong POM are conducted for every 3 month. Latest safety meeting has been conducted on 3 rd November 2016 which has been attended by 12 personnel.

c. Minute of meeting’s copy for Siliau Estate and Sua Betong POM which is recording attendees and issues discussed is available in Minit Mesyuarat Jawatankuasa Keselamatan Kesihatan Pekerjaan (JKKP), File no:34 “OSH” and File no.C13: “ESH safety Meeting”, respectively.

d. Safety meetings are regularly conducted to discuss issues with concerning of all parties about health, safety and welfare.

4.7.5 Accident and emergency procedures shall exist and instructions shall be Minor clearly understood by all workers. Accident procedures shall be available in the appropriate language of the workforce. Assigned operatives trained in First Aid should be present in both field and other operations, and first aid equipment shall be available at worksites. Records of all accidents shall be kept and periodically reviewed. Findings In compliance: Yes: x No: Objective evidence: a. SOPs for accidents and emergencies in all activities conducted in the estate operations are evident in Standard Operating Manual (SOM), Sub-Section 5.5 Management Responsibility, Appendix 5.5.3.3 Emergency Preparedness & Response Procedure. The SOM consist:

• Steps of responses to an Environmental and OSH emergencies including accident/incident. • Emergency Action Plan in the event of Fire • Emergency Action Plan in the event of an Explosion • Emergency Action Plan in the event of Oil Spillage

In addition, Emergency Response Plan (ERP) for Chemical Spillage, Accidence at Work GP 9405A Page 50 of 113

Place, Flood, Wild Animal Attack and Fire were sighted at estate in the related areas. The SOP has been established in Malay and English language and made accessible for all workers. Refreshers for all workers are regularly given during Muster ground.

b. The instructions on emergency procedures have been explained to all workers during the morning muster ground briefing . Interviews conducted with the workers evidence that the ERP are clearly understood by all workers.

c. Siliau Estate has assigned 3 First Aiders: Packiamary A/P Sevathian, Jeghatiswary A/P Munusamy and Pelaveandararaj A/L Mathalai. The certificate of completion for CPR & Occupational First Aid , conducted on 15 th September 2015 for these First Aider was sighted.

There are 5 First Aiders were assigned for Sua Betong POM. Certificates of completion on CPR & Occupational First Aid for Muhammad Asif Md Yusof and Shahiran b Mohamed were conducted on 10 th September 2015. While the other 3 First Aider’s (Balasivan A/L Ayavu, Fahiroz Hamid and Kiroshv Arma) completion of training were conducted on 15 th September 2015. d. First aid equipment is available at worksites (estates and POM) as sighted and well maintained during conduct of field manual work.

e. All first aid kits are adequately stocked and regularly (monthly) checked in accordance with local legal requirements by Mr. Muhammad Arieff bin Saibu (HA – Siliau Estate) and Mr. Balasivan A/L Ayavu (ETP Supervisor – Sua Betong POM). Evidence of first aid inspection is available in First Aid Monitoring FY: 2016/2017 (Siliau Estate) and First Aid Monitoring Checklist (Sua Betong POM).

f. All accidents records are updated into GSQM ESH Portal system and also kept in physical folder system at estate level for reference. Accident records are next being reviewed using Lost Time Injury (LTI), HIRARC and discussed in Safety Committee Meeting for continuous improvement. Documented information for LTI and HIRARC were sighted.

4.7.6 All workers shall be provided with medical care, and covered by accident Minor insurance.

Findings In compliance: Yes: x No: Objective a. There is evidence that all workers are provided with medical care and covered by accident evidence: insurance by the company as evident in Foreign Workers Compensation Scheme Certificate of Insurance by RHB Insurance Berhad (Refer 6.5.3). Below are the policies sighted : b. UNIT ISSUER POLICY NO. VALIDATION PERIOD SUA BETONG RHB INSURANCE 11 OCT. 2016 UNTIL 10 FW195085 ESTATE BERHAD OCT. 2017 RHB INSURANCE 29 SEP. 2016 UNTIL 2 8 SILIAU ESTATE FW194576 BERHAD SEP. 2017 SUA BETONG RHB INSURANCE 6TH JUN. 2016 UNTIL FW188720 POM BERHAD 5TH JUN. 2017

c. All accident reported are recorded and updated in GSQM ESH Portal. As to the date of audit, there are several accidents reported in the audited estates and POM where the affected workers received appropriate medical treatment.

4.7.7 Occupational injuries shall be recorded using Lost Time Accident (LTA) Minor metrics.

Findings In compliance: Yes: x No: Objective Occupational injuries are recorded using Lost Time Accident (LTA) metrics as evident in JKKP 6 evidence: form. The form has been submitted annually to Jabatan Keselamatan Dan Kesihatan Pekerjaan. The latest submission was on the 22 nd January 2016, 8 th Januari 2016 and 6 th May 2016 for Sua Betong Estate, Siliau Estate and Sua Betong POM, respectively.

Safety Performance Board showing the following information are available. 1. Estimated Manhours Worked Per Year GP 9405A Page 51 of 113

2. Cumulative Actual Manhours Worked Wihout “LTI” 3. Previous Best Actual Manhours Worked without “LTI”

As per 19 December 2016, Sua Betong Estate has recorded a total of 43,880 man hours of working without LTI. Siliau Estate recorded at 91,098 man hours of working without LTI as per end of November 2016. Records of LTI are kept in CBE Clinic’s folder no.44, “L.T.I Details” for Sua Betong Estate and “LTI Calculation File” for Siliau Estate. Sua Betong POM recorded a total of 224 man-days of working without LTI since an accident recorded in May 2016.

Sime Darby Plantation has established GSQM ESH Portal where all accidents are recorded. The system recording Incident Category, Description of Incident, Classification of Incident Reference, Investigations, etc. Monthly reporting can be generated from the portal for review purpose. Copy of accident records of GSQM ESH Portal were kept and sighted at estate and mill level for reference. Criterion 4.8: All staffs, workers, smallholders and contract workers are appropriately trained. 4.8.1 A formal training programme shall be in place that covers all aspects of the Major RSPO Principles and Criteria, and that includes regular assessments of training needs and documentation of the programme. Findings In compliance: Yes: x No: Objective a. The production unit has established ESH Training Matrix. The training program is in place evidence: that covers all aspects of the RSPO Principles and Criteria which include (for example):

a. Understanding of Group Policy & Authority b. Harvesting Induction Training c. First Aid Training d. Scheduled Waste Management e. Emergency Response Plan f. RSPO Training

b. PSQM are also provides training plan for the financial year (ie: 2016/2017). Training plan can be found in ICA Schedule Tracker Bravo region (SOU8-SOU16). Example of training topics are:

a. RSPO P&C refresher training b. Gender training c. Introduction to reproduction rights d. HCV training e. Training for contractors

Referred to random interviews conducted with workers (herbicide sprayers) at Sua Betong estate and Siliau estate, also operator and foreman at Sua Betong POM, adequate trainings were provided according to necessity and suitability of task in the operational activities. Workers are also observed practice accordingly to standard procedures and training materials.

4.8.2 Records of training for each employee shall be maintained. Minor

Findings In compliance: Yes: x No: Objective evidence: Various training for employees has been conducted by internal and third parties accordingly to training programme / plan. The training records such as attendance list are maintained at the estates and POM office.

Examples of training conducted are:

TRAINING TOPIC UNIT DATE CONDUCTED HARVESTING TRAINING COMPETENCY SUA BETONG 19 AUGUST 2016 PROGRAM ESTATE LATIHAN PENYEMBUR RACUN & SUA BETONG 6 SEPTEMBER 2016 GP 9405A Page 52 of 113

PENGGUNAAN PPE ESTATE

LATIHAN TUMPAHAN RACUN PEROSAK SUA BETONG 6 MAY 2016 (SPILLAGE TRAINING) ESTATE PROGRAM LATIHAN KEMA HIRAN PENUAI SILIAU ESTATE 13 MAY 2016 SAWIT LATIHAN CARA KERJA MERACUN SILIAU ESTATE 26 JULY 2016 IPM TRAINING (CENSUS & TRUNK SILIAU ESTATE 18 JULY 2016 INJECTION) LOTO SYSTEM TRAINING SUA BETONG POM 5 DECEMBER 2016

SAFETY TRAINING SUA BETONG POM 11 MAY 2016

Training records are available in File 06: “Training”, File 54: “Training by Asst” and File C3: “Training Records” for Sua Betong Estate, Siliau Estate and Sua Betong POM, respectively.

Principle 5: Environmental Responsibility and Conservation of Natural Resources and Biodiversity 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 continual improvement. 5.1.1 An environmental impact assessment (EIA) shall be documented. Major

Findings In compliance: Yes: X No: Objective SOU 15 has established the following documents on environmental impact assessment (EIA) : evidence: 1. Environmental Impact Evaluation Form 2. Environmental Aspect and Impact Identification Form 3. Action Plan – Environmental Impact Management of Sime Plantations All the above records for FY 2016/2017 are available at all estates and mill visited. 5.1.2 Where the identification of impacts requires changes in current practices, in Minor order to mitigate negative effects, a timetable for change shall be developed and implemented within a comprehensive action plan. The action plan shall identify the responsible person/persons. Findings In compliance: Yes: X No: Objective Identification of the aspects and impacts for all activities in SOU 15’s operation is listed in evidence: document “Environmental Aspect and Impact Identification Form”. The Form indicate list of Environmental Impact and Classification as below: Environmental Impact Classification 1. Ozone Layer Depletion C Create Impact 2. Global Warming 3. Air Pollution R Reduce Impact 4. Water Pollution 5. Land Contamination - Not applicable 6. Unpleasant Working Environment 7. Depletion of Natural Resources 8. Community Impact 9. Business Impact Example of activities and area/field listed that create impacts to environmental indicates in document (FY 2016/17) at all estates and mill are as below: GP 9405A Page 53 of 113

Area/Field Activity Impacts EFB Application EFB Transport Create Impact for Air Pollution and Land Contamination Store Receiving/Storage/Issuing Create Impact for Air of Fertilizer /Chemical Pollution, Water Pollution and Land Contamination Compound Pesticide Spraying Create Impact for Air Pollution, Water Pollution and Land Contamination Petrol/Diesoline Receiving, Storage & Create Impact for Air Issuing Fuel Pollution and Land Contamination SOU 15 has established Environmental Impact Evaluation Form (EIE Form) to record significant environmental impacts. Details of procedure on measuring environmental impacts are described in Standard Operation Manual (SOM), Sub Section 5.4 (Planning), Appendix 5.4.1b –Environmental Aspect/Impacts Evaluation Procedure. 5.1.3 This plan shall incorporate a monitoring protocol, adaptive to operational Minor changes, which shall be implemented to monitor the effectiveness of the mitigation measures. The plan shall be 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. Findings In compliance: Yes: X No: Objective Observed at all estates and mill visited that no action plan been established as impacts listed evidence: does not have negative effects. SOU 15 has established “Quality/Safety/Environmental Management Program” (Appendix 5.4.2 of SOM) to record The form contain the followings: 1. Objective No.: 2. Objective, Target and Duration 3. Action Steps 4. Resources required ( person responsible) 5. Date [Commencement, Proposed for Completion and Completion to date (%)] 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. 5.2.1 Information shall be collated in a High Conservation Value (HCV) assessment Major that includes both the planted area itself and relevant wider landscape-level considerations (such as wildlife corridors).

Findings In compliance: Yes: X No: Objective The HCV assessment report namely “High Conservation Value (HCV) Re-Assessment For evidence: Strategic Operating Unit (SOU) 15 Sua Betong” dated December 2016 is available. The document includes information of the status of rare, threatened or endangered species and other High Conservation Value habitats ( ref doc: Part II-Findings and Discussion of HCV assessment report. 5.2.2 Where rare, threatened or endangered (RTE) species, or HCVs, are present or Major are affected by plantation or mill operations, appropriate measures that are expected to maintain and/or enhance them shall be implemented through an action plan. Findings In compliance: Yes: X No: Objective HCV Re- Assessment Report indicated that are HCV 4 (water catchment area or pond )and HCV evidence: 3 & HCV 6 (hot spring) and no RTE species presence ( ref doc: Table 12: Decision on HCV Status and Table 10: Common wildlife found in SOU 15 Sua Betong of HCV re-assessment report). Management of HCV are described under Section 3.1 ‘Managing of HCV Area (HCVA) of the GP 9405A Page 54 of 113

report. HCV Management Plan for year 2016/2017 is available. 5.2.3 There shall be a programme to regularly educate the workforce about the Minor status of these RTE species, and appropriate disciplinary measures shall be instituted in accordance with company rules and national law if any individual working for the company is found to capture, harm, collect or kill these species. Findings In compliance: Yes: X No: Objective No RTE species presence in SOU 15. evidence: However training has been conducted to regularly educate employees about wildlife exist in SOU 15. 5.2.4 Where an action plan has been created there shall be ongoing monitoring Minor

Findings In compliance: Yes: X No: Objective Section 3.2 “Monitoring of HCV Area”(HCVA) of the assessment report described the procedure evidence: on monitoring. The form namely “ Monitoring of HCV & Conservation Areas at Sua Betong Estate has been established for on going monitoring of action plan created.

5.2.5 Where HCV set-asides with existing rights of local communities have been Minor identified, there shall be evidence of a negotiated agreement that optimally safeguards both the HCVs and these rights. Findings In compliance: Yes: X No: Objective Based on the documents review, interviews and field visits, it was verified that there has been no evidence: instance of HCV set aside that conflicts with cultural identify, basic needs for local communities and critical for water catchments at SOU 15. Criterion 5.3: Waste is reduced, recycled, re-used and disposed of in an environmentally and socially responsible manner. 5.3.1 All waste products and sources of pollution shall be identified and Major documented.

Findings In compliance: Yes: X No: Objective All waste products and source of pollutions identified by SOU 15 are listed in document “Waste evidence: Management Plan”. Type of wastes listed : - Schedule waste - used lubricants (SW305), Empty Pesticide Container (SW409), Used batteries (SW102), Contaminated soils, debris or matter resulting from cleaning up of spill (SW 408), rags, plastics, papers or filters contaminated (SW410), clinical wastes (SW404) - Domestic waste – non recyclable wastes - Others – empty fertilizer bags, tyres and tubes Source of pollution is documented in Environmental Impact Assessment. 5.3.2 All chemicals and their containers shall be disposed of responsibly. Major

Findings In compliance: Yes: X No: Objective No disposal of chemical container to date carried out by SOU 15. evidence: Inventory of chemical is available in ‘’Bin Card” and Physical Inventory Record ( soft copy). “Bin Card” for Kenlly and Glyphosate is seen during the audit. A chemical container are categorised as Scheduled Wastes (Code SW 409). Inventory of chemical container is recorded in document namely “Inventory of Schedule Wastes” record updated monthly. Inventory record on 15 Dec 2016 (13 units of empty chemical container) is seen and verified during the audit. 5.3.3 A waste management and disposal plan to avoid or reduce pollution shall be Minor documented and implemented. Findings In compliance: Yes: X No: GP 9405A Page 55 of 113

Objective A waste management and disposal plan is documented under “Waste Management Plan) which evidence: updated annually. “Waste Management Plan 2016/2017 SOU15 Sua Betong Estate” document is sighted during the audit. Waste management and disposal is carried out according to the following type of wastes : 1. Scheduled Wastes ( Used Lubricants, Empty Pesticide Containers, Used batteries and Clinical wastes) 2. Domestic Wastes (( rubbish) 3. Recycled Wastes ( re-used empty container) 4. Others ( tyres and tubes) Criterion 5.4: Efficiency of energy use and use of renewable energy is maximized. 5.4.1 A plan for improving efficiency of the use of fossil fuels and to optimize Minor renewable energy shall be in place and monitored. Findings In compliance: Yes: X No: Objective At Sua Betong POM, a plan for improving efficiency of the use of fossil fuels and to optimize evidence: renewable energy is available (ref doc: Energy Management Plan 2016/2017). The document contain the following information: 1. Type of Energy Usage ( i.e. Electricity and Diesel) 2. Action Plan ( indicates list of action plans to reduce the usage of electricity and fuel) 3. Person In Charge ( i.e. Assistant Managers and Process Engineer) 4. Time Frame ( all action plans listed are at stage of on-going) Sua Betong POM has established monitoring records of energy usage that consist the following - Renewable energy use/ton CPO – (ref doc: “Renewable Energy Usage for FY 2015/2016). Up to date record are as below: - Record of diesel usage (ref doc: Monitoring Diesel Use per ton of FFB). This form recorded quantities fuel usage of all operation at the Sua Betong POM - Record of electricity usage ( ref doc: Monitoring kw per tonne palm product) 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. 5.5.1 There shall be no land preparation by burning, other than in specific Major situations as identified in the ‘Guidelines for the Implementation of the ASEAN Policy on Zero Burning’ 2003 . Findings In compliance: Yes: X No: Objective Section 2.3 “Environmental Management – Zero Burning Technique” – sub section of Section 2.0 evidence: “Felling/Clearing & Land Preparation” in the Standard Operating Procedure dated 01/11/2008.

5.5.2 Where fire has been used for preparing land for replanting, there shall be Minor evidence of prior approval of the controlled burning as specified in ‘Guidelines for the Implementation of the ASEAN Policy on Zero Burning’ 2003 . Findings In compliance: Yes: X No: Objective No fire has been used for preparing land for replanting. evidence: Sua Betong Estate, latest replanting was carried out in year 2015. Criterion 5.6: Plans to reduce pollution and emissions, including greenhouse gases are developed, implemented and monitored. 5.6.1 An assessment of all polluting activities shall be conducted, including Major gaseous emissions, particulate/soot emissions and effluent (see Criterion 4.4). Findings In compliance: Yes: X No: Objective Assessments of all polluting activities are conducted including gaseous emissions, particulate evidence: emissions and effluent. GP 9405A Page 56 of 113

Assessment is done at HQ level using “Sustainability Management System (SMS)”. The SMS system identifies sources of emission of every SOU. The list of identified polluting activities includes: 1. Agricultural Machineries 2. Boilers 3. Effluent Treatment 4. Fertilizers 5. Heavy machineries 6. Other Stationary Machineries 7. Purchased Electricity 8. Purchased steam 9. Transport (Controlled vehicles) Results of emission of every source are clearly recorded. Based on record, palm oil mill effluent is the main contributor on GHG emission followed by boilers. 5.6.2 Significant pollutants and greenhouse gas (GHG) emissions shall be Major identified, and plans to reduce or minimize them implemented.

Findings In compliance: Yes: X No: Objective At POM, an identification of significant pollutants and greenhouse gas (GHG) emission has been evidence: done such as POME, diesel/fuel and fertilizer [refer to “Sustainability Management System (SMS)] The EMP is conducted according to Section 5.4.2: QSHE Management Programs/Action Plans of the Standard Operating Manual (SOM) and reviewed on a yearly basis upon achieving the objective highlighted for the particular year 5.6.3 A monitoring system shall be in place, with regular reporting on progress for Minor these significant pollutants and emissions from estate and mill operations, using appropriate tools. Findings In compliance: Yes: X No: Objective SOU 15- Sua Betong is using Palm GHG calculator provided by RSPO for monitoring of evidence: pollutants and emissions. Observed that latest Palm GHG calculator was submitted to RSPO on 10 July 2016.

The following are the emission:

Summary emission: tCO2e/ t product CPO 1.54 PK 1.54

Based on the pie-chart representation Emission % Field emission ( own crop ) 78.65 Field emission ( Group ) 0.41 Field Emission ( 3 rd party ) 0 Mill emission 20.94

Principle 6: Responsible Consideration of Employees and of Individuals and Communities Affected by Growers and Mills 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 GP 9405A Page 57 of 113

improvement. 6.1.1 A social impact assessment (SIA) including records of meetings shall be Major documented. Findings In compliance: Yes: X No:

Objective Social Impact Assessment (SIA) has been conducted on 18 th -28 th August 2014 covering evidence: Operating Units (Sua Betong Palm Oil Mill, Sua Betong Estate, Bradwall Estate, PD Lukut Estate, Salak Estate, Sengkang Estate, Siliau Estate, Sungai Baru Estate and Tampin Linggi Estate). The SIA Report is available and evaluation has been made on 5 years basis. Only management plan/ action plan for social issues will be reviewed on yearly basis.

The process in conducting the SIA and findings has been documented in SIA Report for SOU 15 Sua Betong. The document specifies the scope of the assessment, the objective and methodology in conducting the assessment, assessment process covering the stakeholder engagement, record of stakeholder meeting, the assessment analysis and the social management plan. The assessment also specifies the record of meeting that has been conducted during the assessment process.

Review made has found that the SIA has covered all the potential impact factors using feedback received from internal and related external parties. List of impacts covered at least as below: • Access and use rights; • Economic livelihoods (e.g. paid employment) and working conditions; • Subsistence activities; • Cultural and religious values; • Health and education facilities; • Other community values, resulting from changes such as improved transport /communication or arrival of substantial migrant labour force.

6.1.2 There shall be evidence that the assessment has been done with the Major participation of affected parties. Findings In compliance: Yes: X No: Objective The SIA has been conducted with the participation of affected stakeholders and there is no evidence: evidence of biasness in selecting stakeholder representatives. In addition, records of meetings and dialogs with stakeholders are maintained and made available to the auditing team during the audit. For instance, the Meeting with the Stakeholders during the formulation of the SIA for PD Lukut, Salak, Sungai Baru Estates and Sua Betong POM has been conducted on 28 August 2014, 20 August 2014, 26 August 2014 and 18 August 2014 respectively. Observed that the Meeting has been participated by various stakeholder groups representing relevant government agencies, NGOs, private sector i.e. subcontractors and suppliers as well as local communities residing adjacent and within the vicinity of the estates and mill. Observed in sampled estates, the internal stakeholder meeting has been conducted to get feedback from both internal and external stakeholder. Sample of meeting sighted in the records such as: • 28/10/2016 Cattle Owner • 19/08/2016 NUPW Meeting/ Workers Representative • 19/08/2016 Sundry shop owner • 07/06/2016 Briefing & Introduction with New Worker • 14/04/2016 Meeting with New Foreign Worker • 13/04/2016 Meeting With Cattle Owner • 08/10/2015 NUPW/ Representative Meeting • 25/04/2016 Meeting with JKKK Kg. Sawah Sunggala and several external stakeholders. • Meeting with Forestry Department • 20/12/2016 external stakeholder consultation • 06/05/2016 cattle owner • 19/09/2016 with estate’s NUPW representative meeting GP 9405A Page 58 of 113

6.1.3 Plans for avoidance or mitigation of negative impacts and promotion of the Major positive ones, and monitoring of impacts identified, shall be developed in consultation with the affected parties, documented and timetabled, including responsibilities for implementation. Findings In compliance: Yes: x No: Objective Action Plan for Social Impact Assessment established specifying the issues and strategies to be evidence: implemented on a yearly basis in relation to the social impact assessment. The Action Plan also specifies the responsible person to implement and the timeframe for the action plan to be conducted. The action plan is found to be reviewed on a yearly basis. However, review on Social Management Plan found that the plan did not fully covered all aspect and inadequate. Social Management Plan in both estates and mill did not cover current social issues such as poor drainage, mosquitoes, health, safety, welfare, education; no promotion of positive impacts has been included in the management plan and no monitoring of impacts identified. MAJOR CAR 30

Both Estates and Mill has updated their Social Management Plan prior to social issues occurred in their areas. The new plan also has included the monitoring of both negative and positive impacts including the time frame and person in charge. The plan for both estates and mill has been sent to SGS (M) Sdn Bhd on 31 Jan 2017. MAJOR CAR 30 CLOSED

6.1.4 The plans shall be reviewed as a minimum once every two years and updated Minor as necessary, in those cases where the review has concluded that changes should be made to current practices. There shall be evidence that the review includes the participation of affected parties. Findings In compliance: Yes: X No: Objective The latest revision of SIA has been conducted dated September 2014. Observed that the revision evidence: has been taken into consideration of the updates and issues raised by the stakeholders during the meeting conducted with the relevant stakeholders as per stated in Indicator 6.1.2 above. The management plan is found to be reviewed on a yearly basis and based on outcome from SIA report. Check on supporting records (i.e. Meeting with cattle owner, interviewed during muster call, etc – records) has confirmed that the plan has been implemented and some of it still in progress status.

6.1.5 Particular attention shall be paid to the impacts of smallholder schemes Minor (where the plantation includes such a scheme) Findings In compliance: Yes: X No: Objective Not applicable. No smallholder schemes in this assessment. evidence: 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. 6.2.1 Consultation and communication procedures shall be documented. Major

Findings In compliance: Yes: X No: Objective Consultation and communication procedures are available and documented. There is a procedure evidence: for communication and consultation between growers/millers and stakeholders within and surrounding the landholdings. The document (i.e.: Standard Operating Manual (SOM) (Sub- section 5.5; Appendix 5.5.3.2 – Procedure For External Communication, Appendix 5 Flowchart and Procedure on Handling Social Issues under Sustainable Plantation Management System) dated 1 November 2008 is stated within the Standard Operating Manual of the Estate Quality Management System. The document specifies procedure to be applied upon the receiving of the complaints from the stakeholders until the issues resolved either through a direct negotiation, using arbitration or through legal proceedings. In addition, a flowchart describing the steps to be taken from the receiving of complaints until the issues resolve is made available to the auditing team in the same document. As to date, there is no dispute being reported by any stakeholders. Meetings with external stakeholders and the grievance resolution books at individual estates is found has been GP 9405A Page 59 of 113

conducted. Recent meeting with the external stakeholders has been conducted and attended by various stakeholders representing various institutional body covering government agencies, local communities, schools, contractors, suppliers and NUPW. 6.2.2 A management official responsible for these issues shall be nominated. Minor

Findings In compliance: Yes: X No: Objective Sime Darby has identified the responsible person i.e. the Assistant Manager as the official person evidence: for handling the social issues within the estates and mills. Evidence of nomination of the Assistant Manager (i.e.: Mr.Mohd Affandi Bin Jikiri – Assistant Manager Tampin-Linggi Estate, Mr. Mohd Farid B. Mohd Sharip – Assisstant Manager of Sua Betong Estate) as the person to handle social issues is made available to the auditing team that specifies the following responsibility: • Investigate any report or claim with regard to social issues and to recommend applicable disciplinary act, where necessary; • Keeping all record of reports and action taken for each of reports received; • Provide advice and counseling to workers that need such service; and • Assist the estate management in organizing any social related events. 6.2.3 A list of stakeholders, records of all communication, including confirmation Minor of receipt and that efforts are made to ensure understanding by affected parties, and records of actions taken in response to input from stakeholders, shall be maintained. Findings In compliance: Yes: X No: Objective List of stakeholders, records of all communication and records of actions taken in response to evidence: input from stakeholders is maintained. List of stakeholders at estate and mill level and records of communication is available. These include local banks, contractors, vendors, local community heads, local authority services, government agencies including the list for NGOs, neighbouring mills and estates etc. Records of communication with stakeholders and actions taken on the other hand, are maintained and made available. 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. 6.3.1 The system, open to all affected parties, shall resolve disputes in an Major effective, timely and appropriate manner, ensuring anonymity of complainants and whistleblowers, where requested. Findings In compliance: Yes: x No: Objective External/Internal communication procedures available Quality Management system manual, evidence: standard operating manual, sub section 5.5. Appendix 5.5.3.2. Issue date 1 November 2008.

The procedures include 5.0 Definition 6.0 External communication 6.1 Receipt of External communication 6.2 Review the communication 6.3 Time frame for external communication And etc.

Communication procedure flow chart also available in the Standard Operation manual.

As of the date of the audit, there are no any major complaints received from outsiders and workers except on certain normal matters pertaining to the broken amenities within the workers line site. Actions taken form management attend to the house repairing issues recorded in the Buku Aduan Pekerja .

Interview with workers representatives witnessed that workers are fully aware the grievances/communication procedures practice in the operating units.

Documentation of the process by which a dispute was resolved and the outcome is available. The procedures for handling complaints and grievances are outlined in the Procedures on Handling Social Issues of the Sustainable Plantation Management System document. The procedures dated 1 November 2008 specifies the process in receiving and addressing the grievances received from the stakeholders until the ultimate means in resolving issues i.e. through the legal proceeding. Meetings with external stakeholders and the grievance resolution books at individual estates have been initiated. GP 9405A Page 60 of 113

However, sighted during audit: - The estate’s complaint book (internal) has not stated any response from management towards complaint (though the interviewed staff has declared that all complaint has been responded) and no completion date to show that the complaint has been address and resolve in an effective, timely and appropriate manner - Mill communication book showed that there were several complaints has yet to be address and resolve as stated in complaint procedure (i.e.: complaint dated 21/03/2016, 24/03/2016, 30/03/2016, 23/05/2016, 22/08/2016, 20/09/2016 has yet to be response by the mill management.) Interviewed with management has said that all complaint has been addressed and resolved immediately. Only not been updated and recorded in the communication book. Interview with workers has confirmed the management feedback. - Complaint/grievance book has become the housing repair book (Tampin Linggi Estate). - Interview with workers found that they have issue relating payment, OT and has not been properly addressed by the management due to lack of communication (Tampin Linggi Estate).

MAJOR CAR 31

Estate and mill has rectified and updated the document which has included the date and response towards complainant made by the management as documentation’s evidence that all complaint has been rectified within the timeframe. Tampin Linggi Estate has developed and differentiates a specific logbook prior to stakeholder’s complaints and the other book is for housing complaint and repairs. Estates and mill also will closely monitor and ensure any complaint is responded within 14 days after the complaint has been made and make sure that all documents maintained and keep up to date. Monitoring of documentation dan complaint response will be made by Assistant Manager on weekly basis. Evidence of closing CAR has been sent to SGS (M) Sdn Bhd by the PSQM department on 31 Jan 2017.

MAJOR CAR 31 CLOSED

6.3.2 Documentation of both the process by which a dispute was resolved and the Major outcome shall be available. Findings In compliance: Yes: X No: Objective As reflected earlier, the procedures for handling complaints and grievances are outlined in the evidence: Procedures on Handling Social Issues of the Sustainable Plantation Management System document. The procedures dated 1 November 2008 specifies the process in receiving and addressing the grievances received from the stakeholders until the ultimate means in resolving issues i.e. through the legal proceeding. Complaints/grievance resolution process has been documented by the management. Documentation on complaints available in the Buku Aduan Stakeholder for external stakeholders and Buku Aduan Pekerja for internal stakeholders. Observed during audit, the outcomes/decisions has been reported to the parties. Documentation of the process/outcome for external stakeholders only can be access by the management and can be requested by the affected parties, meanwhile the internal stakeholders issue can be access by management and workers upon request. Criterion 6.4: Any negotiations concerning compensation for loss of legal, customary or user rights are dealt with through a documented system that enables indigenous peoples, local communities and other stakeholders to express their views through their own representative institutions 6.4.1 A procedure for identifying legal, customary or user rights, and a procedure Major for identifying people entitled to compensation, shall be in place. Findings In compliance: Yes: X No: Objective Not applicable as the neighbouring communities are recent migrants. There are no indigenous evidence: communities within or surrounding SOU 15 that holds legal or customary rights over the land. There is no dispute reported at the time of audit. However, the procedure for negotiation is made publicly available in the company website at: GP 9405A Page 61 of 113

http://www.simedarbyplantation.com/Boundary_Disputes_.aspx 6.4.2 A procedure for calculating and distributing fair compensation (monetary or Minor otherwise) shall be established and implemented, monitored and evaluated in a participatory way, and corrective actions taken as a result of this evaluation. This procedure shall take into account: gender differences in the power to claim rights, ownership and access to land; differences of transmigrants and long- established communities; and differences in ethnic groups’ proof of legal versus communal ownership of land. Findings In compliance: Yes: X No: Objective evidence: Not applicable as the neighbouring communities are recent migrants. There are no indigenous communities within or surrounding SOU 15 that holds legal or customary rights over the land. There is no dispute reported at the time of audit. However, the procedure for negotiation is made publicly available in the company website at: http://www.simedarbyplantation.com/Boundary_Disputes_.aspx 6.4.3 The process and outcome of any negotiated agreements and compensation Major claims shall be documented, with evidence of the participation of affected parties, and made publicly available. Findings In compliance: Yes: x No: Objective The Unit do not have any customary rights issues with local communities or any stakeholder. The evidence: company has established Social Policy effective on January 2015 signed by the Managing Director that stated the commitment to comply with compensation mechanism, implementation of procedures (documented system) so that all stakeholders can express their view through their own representative institutions. The company also has developed a Social-Humanity Management Policy that recognise the rights of their employees, protect children’s rights and acknowledge gender privileges as well as the rights of indigenous people, local community and other affected stakeholders. The Safety & Health Management Policy has show the company’s commitment in order to comply with statutory requirements, relevant standards, guidelines and code of practice in country they operate. Therefore, any accident involving workers during working time while doing their work shall been compensate by the company.

The compensation for Indonesian worker (Muhammad Habibul) who was injured in February 2016 is still pending. (TLE) OBSERVATION 29 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. 6.5.1 Documentation of pay and conditions shall be available. Major

Findings In compliance: Yes: X No: Objective There are several types of employment arrangements in the estates such as, monthly paid salary, evidence: daily rated salary and piece rated workers. While in mill the workers consist of monthly paid workers and daily rated workers.

Observed during audit has confirmed that all types of employment arrangement have a documentation of pay and conditions.

Based on verification checking on estates and mill workers’ payslip for year 2016 by random selection - Sample of payslip checked (payment on 02 Dec. 2016-Sua Betong Estate- Worker serial no. #01,02, 03, 04, 11, 20, 23, 29; Sua Betong POM – Worker serial no# 49, 50, 51, 52, 41, 42, 39, 40, 36, 35) the audit team noted that worker is paid the recently government decreed minimum wage and this is well in line with the company’s commitment. The estates also encourage the workers to keep on improving their productivities in order to earn more.

All of the above verified payslips are above the minimum wages requirements set by the government i.e. RM 1000 for Peninsular Malaysia required under the Minimum Wages Order effective July 1, 2016. Except the workers who are not attending to full working days during the respective month.

GP 9405A Page 62 of 113

Details of workers’ pay statement as below: a) Workers paid for: i) Daily wages/piece rated and etc. ii) Price Bonus iii) Productivity Incentives iv) Phone allowances v) NUPW/AMESU vi) Insurance subsidy vii) Holiday Pay viii) Sick pay b) Deduction: i) SOCSO & EPF (Local workers) ii) NUPW union fees iii) Electricity

Verification on workers payslips for month of December 2016 found that workers are earning more than Minimum wages requirement of RM 1000 per month:

Only a few of the workers are unable to achieve RM1000 per month due to their own absenteeism to work without any reasonable justification.

Interview with respective workers proved that the workers are fully aware and agree that their monthly earning were unable to achieve RM 1000 because of their absenteeism in attending to daily works tasks.

6.5.2 Labour laws, union agreements or direct contracts of employment detailing Major payments and conditions of employment (e.g. working hours, deductions, overtime, sickness, holiday entitlement, maternity leave, reasons for dismissal, period of notice, etc.) shall be available in the languages understood by the workers or explained carefully to them by a management official. Findings In compliance: Yes: x No: Objective With regard to the term and conditions for employment, the details of term and conditions of evidence: employment are described in their offer letter and contract available. The above document includes contract agreement, wages and other employment benefits, workers’ repatriation, workers’ passport. Employment agreement and related conditions is available. There are terms of reference or signed contracts between employers and employees stipulating the position, working hours, type of work, location of work, workers’ responsibility, wages, allowances, holidays, rest days, annual leave, fringe benefits, levy deductions (for foreign workers), dismissal, etc. Direct contracts of employment are observed to contain sufficient details on rates of wages and conditions of employment written in the language understood by the workers. Procedurally, a management official will also explain the payment rates and terms and conditions of employment to a newly recruited worker.

However, found during audit that: - Estate has not given copy of employment contract to their workers. Interviewed with assistant manager has confirmed that they did not given any copy of employment contract to their workers.( Tampin Linggi Estate) - The employment contract is not available in the language understood by the workers/explained carefully by the management and understood by the workers. - The documentation of pay and conditions are not easily understood by the workers (estates). GP 9405A Page 63 of 113

MAJOR CAR 32

Estate has conducted a briefing towards workers regarding employment contract and payslip. First briefing has been conducted during induction session in the Workers Management Centre (WMC) Sua Betong prior to deployment to Operating Unit and has been explained carefully by interpreters. The second briefing has been conducted prior to workers arrival in the estate. For workers more than 1 years. The contract employment has been explain during muster call. Sua Betong Estate also has took an initiative to display the interpretation of payslip at Muster Ground Notice Board prior to educate the workers on how to read the payslip. The supporting documents has been sent to SGS (M) Sdn Bhd on 31 Jan 2017. MAJOR CAR 32 CLOSED

6.5.3 Growers and millers shall provide adequate housing, water supplies, Minor medical, educational and welfare amenities to national standards or above, in accordance with Workers’ Minimum Standard of Housing and Amenities Act 1990 (Act 446) or above, where no such public facilities are available or accessible (not applicable to smallholders). Findings In compliance: Yes: x No: Objective Housing of adequate quality is provided, with workers generally housed with one/two persons to a evidence: room. Houses have electricity, piped water, indoor washrooms, sewerage, waste collection service, etc. Medical facilities and services are provided. Education facilities such as government schools available for children from the estate as well as the surrounding area at nearby town. Social, cultural and recreational activities and places of worship are supported. Every 2 houses will equip with one fire extinguisher. Line-site facilities and amenities include badminton court, tennis court and football field. Disposal of domestic solid wastes at the linesite is conducted at least twice weekly. The estate management has established a repair book for whoever want any repair can report in the book . In addition , at the office there is a ‘kotak aduan’/ complaint box to submit the request. They can also report to their mandore or the union for them to pass the repair request to the management .

Some of the aspects required under the Workers’ Minimum Standard of Housing and Amenities Act 1990 (Act 446) were not implemented in Tampin Linggi Estate - Window panes missing - Frequency of linesite inspection was not according to the Act - Stagnant water sighted along the drainage system

MINOR CAR 33

Tampin Linggi Estate has rectify the issue as below: - All missing window panes has been replaced - Linesite inspection has been made on weekly basis. Weekly Sanitation report has been sent to SGS (M) Sdn Bhd on 31 Jan 2017 - The linesite drain has been repaired and completed on 25 Jan 2017 in order to clear the water flows and avoiding stagnant water in the drains

MINOR CAR 33 CLOSED 6.5.4 Growers and millers shall make demonstrable efforts to monitor and where Minor able, improve workers’ access to adequate, sufficient and affordable food. Findings In compliance: Yes: X No: GP 9405A Page 64 of 113

Objective Interview with workers has confirmed that they have access to the nearby town for sufficient and evidence: affordable sundry goods or food supply outside the estates compound. Workers have access to the sundry shops and markets nearby where the prices of essential items are reasonably priced similar to the local pricing surrounding them. 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. 6.6.1 A published statement in local languages recognising freedom of association Major shall be available. Findings In compliance: Yes: X No: Objective There is a published statement in English and Bahasa Malaysia under SOU 15 Social Policy evidence: which recognize freedom of association. The policy was signed by the Managing Director on January 2015. The policy specifies the company’s commitment to full respect and with no intention of obstruction for workers to get involve in workers union as it is stated in the Workers Union Act 1959. Observed during audit has confirmed that employees including migrant workers and contract workers are allowed to form associations and bargain collectively with their employer. As to date, most of the employees were joining the NUPW. 6.6.2 Minutes of meetings with main trade unions or workers representatives shall Minor be documented. Findings In compliance: Yes: X No: Objective Observed in both estates and mill has showed that minutes of meeting with main trade union were evidence: available and properly documented with attachment of attendant list. Interview with NUPW Chairman and secretary in both estates has confirmed that all minutes of meeting were readily made available to employees upon request. However, no request has been received to date. Sample of minutes of meeting sighted during audit were:

• 19/08/2016 NUPW Meeting/ Workers Representative • 08/10/2015 NUPW/ Representative Meeting • 19/09/2016 with estate’s NUPW representative meeting

Criterion 6.7: Children are not employed or exploited. 6.7.1 There shall be documentary evidence that minimum age requirements are Major met.

Findings In compliance: Yes: X No: Objective There is documented evidence in the form of individual worker’s particulars and contracts evidence: demonstrating that the minimum age requirement is met in both estates and mill. Sime Darby has policy not to use underage worker and there was no evidence of children working in the field. Sighted during audit that there are minimum working age for workers together with working hours clearly defined in the company’s policy. Random verification checking conducted on employees’ employment details showed that no child labour being employ. Observed during audit has confirmed that there were no suspicious of young workers working in the field. Most of the workers met were between 25 to 55 years old.

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. 6.8.1 A publicly available equal opportunities policy including identification of Major relevant/affected groups in the local environment shall be documented. Findings In compliance: Yes: X No: Objective Sime Darby Plantation has the equal opportunity statements publicly declared in the company GP 9405A Page 65 of 113

evidence: social policy signed by Managing Director on January 2015. The policy has cover at least the items mentioned in 6.8 criteria where: E.g. All employees should be treated fairly in terms of recruitment, progression, terms, and conditions of work and representation regardless of race, caste, nationality, orientation, union membership, political view, religion and/or age. Interview with several stakeholders including suppliers, Head of Village and workers has found that they were aware on the establishment of the policy. Interview with workers found that their salary will be based on performance and there were no issue on discrimination occurred in the work place as well as in the housing area. 6.8.2 Evidence shall be provided that employees and groups including local Major communities, women, and migrant workers have not been discriminated against. Findings In compliance: Yes: X No: Objective There is no evidence to show the occurrence of any discrimination against foreign workers. Based evidence: on records, the auditing team observed that equal opportunities are demonstrated through the following issues: • Similar daily wages for foreign and local workers. • Similar working hours and treatment for foreign and local workers. • Basic amenities and facilities are provided on equal terms to foreign and local workers. • Well balanced representation of foreign and local workers in JCC meetings. • Well balanced representation of foreign and local workers in Gender Committee meetings. • Both the foreign and local workers wages paid based on NUPW/MAPA agreement. Interview with workers (including foreign workers) indicates that there is no such discrimination occurs in the workplace. In addition, the auditing team note that the company is currently implementing the equal opportunities for workers through the following: • Training is given to the workers on a yearly basis covering training relating to their working station, personnel training such as communication skills and safety and health training; • All employees are covered with working insurance; and • Termination is conducted based on local laws and is stated in the workers employment agreement.

Social & Humanity management policy signed by Sime Darby Managing Director on January 2015 has clearly stated the elements or statements that fulfilling the social & humanity commitments.

Examples of related policy statements as below: i) Respect & give fair treatment in accordance with the rights of employees for the mutual benefits of the company and employees. ii) Preventing sexual harassment and other forms of violence against woman and protect their reproductive rights and etc.

6.8.3 It shall be demonstrated that recruitment selection, hiring and promotion Minor where relevant are based on skills, capabilities, qualities, and medical fitness necessary for the jobs available. Findings In compliance: Yes: X No: Objective Equal opportunity statements publicly declared in the company social policy. The policy seems to evidence: be reviewed on 2-7 years basis. E.g. All employees should be treated fairly in terms of recruitment, progression, terms, and conditions of work and representation regardless of race, caste, nationality, orientation, union membership, political view, religion and/or age. Interviewed with workers evidence that non discrimination practices implemented on the ground. For example: workers are allowed to shift to any of their preferable jobs when if they apply formally from management, medical check-up showed that they are suitable and fit for that particular job they apply for and also base on job vacancy available. Other than that, wages paid for harvesting jobs based on productivity and very much depend on GP 9405A Page 66 of 113

their skills and capabilities. Both estates and POM has kept and maintain records of their employees’ work credentials and medical history in workers personal folder. Criterion 6.9: There is no harassment or abuse in the work place, and reproductive rights are protected. 6.9.1 A policy to prevent sexual and all other forms of harassment and violence Major shall be implemented and communicated to all levels of the workforce. Findings In compliance: Yes: X No: Objective Gender policy dated January 2015 clearly stated that the company shall comply with all statutory evidence: and regulatory requirements. In line with the policy, Sime Darby Plantation shall • Endeavour to prevent sexual harassment and all other forms of violence against women, workers and community. • Establish a specific complaints and grievances procedure and mechanism, acceptable by all parties, to addressed gender based issues • To establish a Gender Committee to implement and monitor the policy • And etc.

Social and Humanity Management Policy dated January 2015 also available at both estates and mill.

The policy has been documented, implemented and communicated clearly to all levels of the workforce. Sime Darby has a documented Gender Committee Handbook (2014 Edition) that covered Establishment of Gender Committee, Roles and Responsibilities, Benefit of Gender Committee, Activities, Management of Gender Committee and Types of Gender-Based Violence & Grievance Procedure.

Training has been conducted on Health issue dated 13/09/2016, ‘Saringan Kesihatan dan pemeriksaan Pap Smear’ has been conducted on 08 Dec 2016, and Training on Sexual Harassment in Workplace has been conducted on 13 Nov 2015. The training has covered areas on Gender Discrimination, Sexual harassment, Work Discrimination, disease related to inter- gender relationship, Gender Policy, Women’s Rights, Procedure on Social Issue, Person In charge for Sensitive Issues and Responsibilities. Both estates and mill also conducted several meeting to discuss any related issues and to refresh the Gender Policy Awareness among the workers. The meeting and training were open to all workers without restricted to only one type of gender.

Both estates and mill has established and maintain the Gender Committee for their staff and workers. Puan Norbani Binti Harun has been nominated as chairman for Tampin Linggi Estate’s Gender Committee for financial year 16/17 with appointment letter dated 02 Jan 2016. While Puan Hamidah Binti Abdul Rahman has been nominated as chairman in Sua Betong POM effectively started on 17 Sep 2016 and Ms R. Shanty has been nominated as chairman in Sua Betong Estate. List of committee members is available in the Gender Committee Folder. The Terms of Reference for the committee has include at least the handling of issues such as: • training on women’s rights; • counselling for women affected by violence; • child care facilities to be provided by the growers and millers; • Women to be allowed to breastfeed up to nine months before resuming chemical spraying or usage tasks; and women to be given specific break times to enable effective breastfeeding.

6.9.2 A policy to protect the reproductive rights of all, especially of women, shall Major be implemented and communicated to all levels of the workforce. Findings In compliance: Yes: X No: Objective Reproductive Rights Policy signed by Sime Darby Managing Director on January 2015 has clearly evidence: stated the elements or statements that fulfilling the reproductive rights protection commitments to all levels of the workforce especially for women. Based on interview to female workers and record review has confirmed that the policy has been documented, implemented and communicated clearly to all levels of workforce. For example, training on “ Pengenalan Tentang Polisi Hak GP 9405A Page 67 of 113

Reproduktif di dalam Ladang has been conducted on 13/11/2015 by Gender Committee Team. This policy also has been delivered during gender committee meeting as refreshment to the workers.

More than that, Sime Darby also has established and implemented their Gender Policy, Child Policy and Social & Humanity Policy prior to commitment towards social matters.

6.9.3 A specific grievance mechanism which respects anonymity and protects Minor complainants where requested shall be established, implemented, and communicated to all levels of the workforce. Findings In compliance: Yes: X No: Objective Procedure for handling social issues available in Sustainable Plantation management system evidence: Appendix 5 Flowchart and procedure on handling social issues

Flow chart for handling social issue also attached as appendix 5 in Sime Darby Plantation Quality Management System

Other than that, External communication procedure also available in the mill/estate quality management system in Standard Operation Manual (SOM), subsection 5.5 Appendix 5.5.3.2, Procedure for external communication. Sime Darby also has established the Whistleblower Policy and hotline for their employees to call at any time. For estates and mill level, all grievances will be handling by Assistant Manager.

Informed by the stakeholder, they are aware on grievance mechanism. Interview with workers also found that workers are aware with the company grievances mechanism.

As to date, no complaints or harassment being addressed to the management. Criterion 6.10: Growers and millers deal fairly and transparently with smallholders and other local businesses. 6.10.1 Current and past prices paid for Fresh Fruit Bunches (FFB) shall be publicly Minor available. Findings In compliance: Yes: X No: N/A Objective Not applicable as they receive FFB from own supply base only. evidence: 6.10.2 Evidence shall be available that growers/millers have explained FFB pricing, Major and pricing mechanisms for FFB and inputs/services shall be documented (where these are under the control of the mill or plantation). Findings In compliance: Yes: X No: Objective Not applicable as no outside FFB being procured. FFB pricing were based on MPOB pricing evidence: mechanism. 6.10.3 Evidence shall be available that all parties understand the contractual Minor agreements they enter into, and that contracts are fair, legal and transparent. Findings In compliance: Yes: X No: Objective Based on the verification on contract and agreement, the audit team notes that the contracts have evidence: been established in language - English. Random interview with the representatives from the suppliers and contractors during the audit showed that they are understood with the contractual agreements as well as the terms and conditions stated in the agreement. Both parties have their own copy of contractual agreements.

6.10.4 Agreed payments shall be made in a timely manner. Minor

Findings In compliance: Yes: X No: Objective Interviews with the supplier and contractor revealed that all payments were made in a timely evidence: manner as per agreed timeframe. Payment document are documented in the estate office and showed that payments were made within a month time after delivery of goods and services by the respective supplier and contractor.

Criterion 6.11: Growers and millers contribute to local sustainable development where appropriate. GP 9405A Page 68 of 113

6.11.1 Contributions to local development that are based on the results of Minor consultation with local communities shall be demonstrated. Findings In compliance: Yes: X No: Objective Review on stakeholder’s consultation minute of meeting (i.e.: ‘Mesyuarat Pengurusan Ladang dan evidence: Stakeholder) has confirmed that the management has given space for each stakeholders to voice out their needs and priorities. Several contribution made by the estate and mill management based on request and consultation from stakeholders. Sample of corporate social responsibility made were:

• Saringan Kesihatan dan Pemeriksaan Pap Smear • Hari Keluarga (Sukaneka) Sambil Berkaraoke on 01 May 2016 • Ceramah Kesihatan dated 20 September 2016 • Operasi Pembersihan Kawasan Perumahan Ladang Sua Betong (December 2015) • Tampin-Linggi Estate: Provided Chicken on Deepavali Festival, Provided chicken on Aidil Adha, Dinner with workers dated 14 May 2016, Duit sumbangan kepada keluarga pekerja yang meninggal , donation on temple festival dated 01/07/2016

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

Findings In compliance: Yes: X No: Objective Not applicable. evidence:

Criterion 6.12: No forms of forced or trafficked labour are used.

6.12.1 There shall be evidence that no forms of forced or trafficked labour are used. Major

Findings In compliance: Yes: x No: Objective No force labour in the estate. Document verification on the workers permit and identification evidence: showed that the legal workers are employed for the estate works. Interview with workers also proven that the workers are fully aware on their pay, contract agreement, job function in the estate and they agree with the condition implement by the estates. Other than that, workers are allowed to shift job if they are not suitable/comfortable to work under current job assigned. Visit to Workforce Management Centre has confirmed that the process of recruiting foreign workers was made directly by the company through licensed outsourcing agencies. The agent will prepared all potential employees prior to interview and screening made by the Sime Darby Recruitment Team under Workforce Management Unit before confirmed to be recruited by the company. Interview with workers found that there are no restrictions on workers from leaving the mill or estate outside working hours. However, most of them were only leave the estate’s or mill provided facilities when need to do so such as during Friday prayer, further check up in the hospital, buying groceries etc. Workers leaving the premises need to report to the management for security reasons. They will be provided a p/copy of the passport and a letterform the estate to prove that they are legal workers. All workers’ passport has been keep by the management due to safety reason. Confirmed by interviewed workers that they willingly to hand over the passport to the management due to safety reason and to avoid any scenarios such as passport got stolen and missing due to negligence. Workers have unrestricted access to their passports. Interview with them has confirmed that they can easily get their own passport when needed at the management office.

However, evident at Tampin-Linggi Estate that, there are no consent letter that workers voluntarily surrender their passport to the management. GP 9405A Page 69 of 113

MAJOR CAR 34

Tampin Linggi Estate has prepared “Borang Penyerahan Pasport” prior to workers voluntarily surrendered their passport to be kept by the management due to safety reason. The form consist of workers declaration to surrender their passport with their signature and management declaration that they shall give the passport to the workers if they request to do so. Samples of “Borang Serahan Pasport” has been sent to SGS (M) Sdn Bhd on 31 Jan 2017.

MAJOR CAR 34 CLOSED 6.12.2 Where applicable, it shall be demonstrated that no contract substitution has Minor occurred. Findings In compliance: Yes: X No: Objective Interviews with different workers representatives evidenced that no contract substitution occurred. evidence: Workers are given a copy of their contract agreement signed between workers and management and they fully aware and understand the terms and conditions stated in their contract agreements. 6.12.3 Where temporary or foreign workers are employed, a special labour policy Major and procedures shall be established and implemented. Findings In compliance: Yes: X No: Objective Social & Humanity management policy signed by Sime Darby Managing Director on January 2015 evidence: has clearly stated the elements or statements that fulfilling the social & humanity commitments.

Examples of related policy statements as below:

i) Respect & give fair treatment in accordance with the rights of employees for the mutual benefits of the company and employees. ii) Preventing sexual harassment and other forms of violence against woman and protect their reproductive rights and etc.

Checked on post-arrival orientation programme has confirmed that the company has conducted the orientation programme with emphasis on language, safety, labour laws, cultural practices, working condition, wages and more.

Criterion 6.13: Growers and millers respect human rights

6.13.1 A policy to respect human rights shall be documented and communicated to Major all levels of the workforce and operations (see criteria 1.2 and 2.1) Findings In compliance: Yes: X No: Objective Social & Humanity management policy signed by Sime Darby Managing Director on January 2015 evidence: has clearly stated the elements or statements that fulfilling the social & humanity commitments.

Examples of related policy statements as below:

Social policy updated on January 2015 and signed by Managing Director also captured some of the elements on respect to human rights. E.g. The company shall respect the rights of all personnel to form and join trade unions of their choice and to bargain collectively. Apart from that, Sime Darby also has established the Social Policy in order to fulfilling the social commitments covering child labour issue.

The policy has been communicate to all respective stakeholders during stakeholder consultation. Interview with workers has confirm that they aware on policy to respect human rights established by the company. GP 9405A Page 70 of 113

6.13.2 As long as children of foreign workers in Sabah and Sawarak are ineligible to Minor attend government school, the plantation companies should engage in a process to secure these children access to education as a moral obligation. Findings In compliance: Yes: X No: Objective Not applicable. The operating unit is in Peninsular Malaysia. evidence:

Principle 7: Responsible Development of New Plantings Note: This Principles are applicable for new area planted after November 2005 There shall be evidence that no new plantings have replaced primary forest, or any area required to maintain or enhance one or more High Conservation Values (HCVs), since November 2005. Evidence should include historical remote sensing imagery which demonstrates that there has been no conversion of primary forest or any area required to maintain or enhance one or more HCV. Satellite or aerial photographs, land use maps and vegetation maps should be used to inform the HCV assessment. Where land has been cleared since November 2005, and without a prior and adequate HCV assessment, it will be excluded from the RSPO certification programme until an adequate HCV compensation plan has been developed and accepted by the RSPO. 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.

7.1.1 An independent social and environmental impact assessment (SEIA), Major undertaken through a participatory methodology including the relevant affected stakeholders, shall be documented. Findings In compliance: Yes: No: N/A Objective No new plantings since November 2005. Therefore, Principle 7 is not applicable during this audit evidence: assessment 7.1.2 Appropriate management planning and operational procedures shall be Minor developed and implemented to avoid or mitigate identified potential negative impacts. Findings In compliance: Yes: No: N/A Objective No new plantings since November 2005. Therefore, Principle 7 is not applicable during this audit evidence: assessment 7.1.3 Where the development includes an outgrower scheme, the impacts of the Minor scheme and the implications of the way it is managed shall be given particular attention. Findings In compliance: Yes: No: N/A Objective No new plantings since November 2005. Therefore, Principle 7 is not applicable during this audit evidence: assessment Criterion 7.2: Soil surveys and topographic information are used for site planning in the establishment of new plantings, and the results are incorporated into plans and operations.

7.2.1 Soil suitability maps or soil surveys adequate to establish the long-term Major suitability of land for oil palm cultivation shall be available and taken into account in plans and operations. Findings In compliance: Yes: No: N/A Objective No new plantings since November 2005. Therefore, Principle 7 is not applicable during this audit evidence: assessment 7.2.2 Topographic information adequate to guide the planning of drainage and Minor irrigation systems, roads and other infrastructure shall be available and taken into account in plans and operations. Findings In compliance: Yes: No: N/A Objective No new plantings since November 2005. Therefore, Principle 7 is not applicable during this audit GP 9405A Page 71 of 113

evidence: assessment 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.

7.3.1 There shall be evidence that no new plantings have replaced primary forest, Major or any area required to maintain or enhance one or more High Conservation Values (HCVs), since November 2005. New plantings shall be planned and managed to best ensure the HCVs identified are maintained and/or enhanced (see Criterion 5.2). Findings In compliance: Yes: No: N/A Objective No new plantings since November 2005. Therefore, Principle 7 is not applicable during this audit evidence: assessment 7.3.2 A comprehensive HCV assessment, including stakeholder consultation, shall Major be conducted prior to any conversion or new planting. This shall include a land use change analysis to determine changes to the vegetation since November 2005. This analysis shall be used, with proxies, to indicate changes to HCV status. Findings In compliance: Yes: No: N/A Objective No new plantings since November 2005. Therefore, Principle 7 is not applicable during this audit evidence: assessment 7.3.3 Dates of land preparation and commencement shall be recorded. Minor

Findings In compliance: Yes: No: N/A Objective No new plantings since November 2005. Therefore, Principle 7 is not applicable during this audit evidence: assessment 7.3.4 An action plan shall be developed that describes operational actions Major consequent to the findings of the HCV assessment, and that references the grower’s relevant operational procedures (see Criterion 5.2).

Findings In compliance: Yes: No: N/A Objective No new plantings since November 2005. Therefore, Principle 7 is not applicable during this audit evidence: assessment 7.3.5 Areas required by affected communities to meet their basic needs, taking into Minor account potential positive and negative changes in livelihood resulting from proposed operations, shall be identified in consultation with the communities and incorporated into HCV assessments and management plans (see Criterion 5.2). Findings In compliance: Yes: No: N/A Objective No new plantings since November 2005. Therefore, Principle 7 is not applicable during this audit evidence: assessment Criterion 7.4: Extensive planting on steep terrain, and/or on marginal and fragile soils, including peat, is avoided.

7.4.1 Maps identifying marginal and fragile soils, including excessive gradients Minor and peat soils, shall be available and used to identify areas to be avoided. All new plantings should not be cultivated on land more than 300m above sea level unless specified by local legislation. Findings In compliance: Yes: No: N/A Objective No new plantings since November 2005. Therefore, Principle 7 is not applicable during this audit evidence: assessment 7.4.2 Where limited planting on fragile and marginal soils, including peat, is Major proposed, plans shall be developed and implemented to protect them without incurring adverse impacts. Findings In compliance: Yes: No: N/A Objective No new plantings since November 2005. Therefore, Principle 7 is not applicable during this audit evidence: assessment GP 9405A Page 72 of 113

Criterion 7.6: Where it can be demonstrated that local peoples have legal, customary or user rights, they are compensated for any agreed land acquisitions and relinquishment of rights, subject to their free, prior and informed consent and negotiated agreements. 7.6.1 Documented identification and assessment of demonstrable legal, customary Major and user rights shall be available. Findings In compliance: Yes: No: N/A Objective No new plantings since November 2005. Therefore, Principle 7 is not applicable during this audit evidence: assessment 7.6.2 A system for identifying people entitled to compensation shall be in place. Major

Findings In compliance: Yes: No: N/A Objective No new plantings since November 2005. Therefore, Principle 7 is not applicable during this audit evidence: assessment 7.6.3 A system for calculating and distributing fair compensation (monetary or Major otherwise) shall be in place. Findings In compliance: Yes: No: N/A Objective No new plantings since November 2005. Therefore, Principle 7 is not applicable during this audit evidence: assessment 7.6.4 Communities that have lost access and rights to land for plantation Minor expansion shall be given opportunities to benefit from plantation development. Findings In compliance: Yes: No: N/A Objective No new plantings since November 2005. Therefore, Principle 7 is not applicable during this audit evidence: assessment 7.6.5 The process and outcome of any compensation claims shall be documented Minor and made publicly available. Findings In compliance: Yes: No: N/A Objective No new plantings since November 2005. Therefore, Principle 7 is not applicable during this audit evidence: assessment 7.6.6 Evidence shall be available that the company has made adequate efforts to Minor enable affected communities and rights holders to have access to information and advice that is independent of the project proponent, concerning the legal, economic, environmental and social implications of the proposed operations on their lands. Findings In compliance: Yes: No: N/A Objective No new plantings since November 2005. Therefore, Principle 7 is not applicable during this audit evidence: assessment

Criterion 7.7: No use of fire in the preparation of new plantings other than in specific situations, as identified in the ASEAN guidelines or other regional best practice. 7.7.1 There shall be no land preparation by burning, other than in specific Major situations, as identified in the ‘Guidelines for the Implementation of the ASEAN Policy on Zero Burning’ 2003, or comparable guidelines in other regions. Findings In compliance: Yes: No: N/A Objective No new plantings since November 2005. Therefore, Principle 7 is not applicable during this audit evidence: assessment

7.7.2 In exceptional cases where fire has to be used for preparing land for Minor planting, there shall be evidence of prior approval of the controlled burning as specified in ‘Guidelines for the Implementation of the ASEAN Policy on Zero Burning’ 2003 , or comparable guidelines in other regions Findings In compliance: Yes: No: N/A GP 9405A Page 73 of 113

Objective No new plantings since November 2005. Therefore, Principle 7 is not applicable during this audit evidence: assessment

Criterion 7.8: New plantation developments are designed to minimize net greenhouse gas emissions.

7.8.1 The carbon stock of the proposed development area and major potential Major sources of emissions that may result directly from the development shall be identified and estimated. Findings In compliance: Yes: No: N/A Objective No new plantings since November 2005. Therefore, Principle 7 is not applicable during this audit evidence: assessment 7.8.2 There shall be a plan to minimise net GHG emissions which takes into Minor account avoidance of land areas with high carbon stocks and/or sequestration options. Findings In compliance: Yes: No: N/A Objective No new plantings since November 2005. Therefore, Principle 7 is not applicable during this audit evidence: assessment.

Principle 8: Commitment to Continual Improvement in Key Areas of Activity Criterion 8.1: Growers and millers regularly monitor and review their activities and develop and implement action plans that allow demonstrable continual improvement in key operations. 8.1.1 The action plan for continual improvement shall be implemented, based on a Major consideration of the main social and environmental impacts and opportunities of the grower/mill, and shall include a range of Indicators covered by these Principles and Criteria.

As a minimum, these shall include, but are not necessarily be limited to:

• Reduction in use of pesticides (Criterion 4.6)

• Environmental impacts (Criterion 4.3, 5.1 and 5.2)

• Waste reduction (Criterion 5.3)

• Pollution and greenhouse gas (GHG) emissions (Criteria 5.6 and 7.8)

• Social impacts (Criterion 6.1)

• Encourage optimizing the yield of the supply base.

Findings In compliance: Yes: x No: Objective Continous improvement plan for Tampin Linggi Estate ( TLE ) dated 15/12/16 was sampled : evidence:

Reduction in use of pesticides (Criterion 4.6 Monitor monthly and to-date pesticide usage in graph format Environmental impacts (Criterion 4.3, 5.1 and Timely Sceduled Waste disposal 5.2 Waste reduction (Criterion 5.3) Implementation of recyclel bins at Linesite

Pollution and greenhouse gas (GHG) To reduce oil spillage on ground emissions (Criteria 5.6 and 7.8) Monitor monthly pesticide usage in graph format

Social impacts (Criterion 6.1) To reduce accident by 25% GP 9405A Page 74 of 113

Enhance self health . initiate sports and recreation ( TLE ) Encourage optimizing the yield of the supply To achieve 95% of ‘A’ Crop base. To achieve loose fruit of 7% / MT total FFB

Sua Betong Oil Mill has the following mill initiatives for their continuos improvement plan: Initiaitives PQ ( Premium Quality ) Production - Loose fruit Seperator -Bio-Aqua System ( BAS ) Dilution -BAS Washing : FFB Washing Product Recovery - Use of Novozymes product in the USB ( Unstripped Bunches ) process - Kernel Upgrading : Dry Seperation

Cost - Introduction of Capacitors to reduce the electricity required during state-up -Automation at Sand Capture tank to reduce labour reliance Noise Level / ESH - to contain the ripper mill in a room to reduce its contribution to the surrounding noise level - Use of Insulation at the Depericarper Station Illumination To replace the sodium lighting to metal halide lighting Automation -On-line monitoring to reduce manual recording ( SEMUA 2.0) - auto-calcuation ( 3D TRASAR) of chemicals such as NALCO 8507, 22312 and NALCO 19PULV injection/application at the Boiler station

3.1.2 Supply Chain ( Module D ) For supply chain, the Sua Betong Palm Oil Mill has decided to use Module D in this assessment. The findings and objective evidence find during the assessment are outlined in the table below. The results for each indicator from each of the operational areas were evaluated to provide an assessment of conformity. A statement is provided for each of the RSPO indicators in order to support the findings of the assessment team.

Module D – CPO Mills: Identity Preserved

Module D- CPO Mills: Identify Preserved D.1: Definition D.1.1 A mill is deemed to be Identity Preserved (IP) if the FFB used by the mill are sourced from its own supply base certified to the RSPO Principles and Criteria (RSPO P&C). Certification for CPO mills is necessary to verify the volumes and sources of certified FFB entering the mill, the implementation of any processing controls (for example, if physical separation is used), and GP 9405A Page 75 of 113

volume sales of RSPO certified products. A mill may be taking delivery of FFB from uncertified growers, in addition to those from its own certified land base. If a mill processes certified and uncertified FFB without physically separating the material then only Module E is applicable. D.2: Explanation

D.2.1 The estimated tonnage of CPO and PK products that could potentially be produced MAJOR by the certified mill must be recorded by the certification body (CB) in the public summary of the P&C certification report. This figure represents the total volume of certified palm oil product (CPO and PK) that the certified mill is allowed to deliver in a year. The actual tonnage produced shall then be recorded in each subsequent annual surveillance report. Findings In compliance: Yes: x No: Objective evidence: The mill is certified using the Module D - CPO Mill: Identity Preserved. The FFB used by the mill are sourced from its own supply base certified to the RSPO Principles and Criteria (RSPO P&C). Estimated and actual tonnage of CPO and PK products that produced by Sua Betong POM has been recorded in the public summary of the P&C certification report (please refer to Public Summary) and also on the RSPO IT platform. The following are the amount declared sustainable /allowed to delivered and the actual tonnage produce is also recorded . The volumes and sources of certified FFB entering the mill, the implementation of any processing controls (physical separation) are monitored by the Assistant Manager of Sua Betong POM. Volume sales of RSPO certified products is monitored and updated by CTM ( Commodity Trade Marketing ) Department in Sime Darby Plantation Sdn Bhd HQ.

Product CPO PK Estimate Tonnage ( FY15/16) 66,598.06 MT 15,741.36 MT Actual tonnage ( FY 15/16 ) 39,190.361 9,579.502

D.2.2 The mill must also meet all registration and reporting requirements for the MAJOR appropriate supply chain through the RSPO supply chain managing organization (RSPO IT platform or book and claim).

Findings In compliance: Yes: x No: Objective Based on the eTrace record the mill has been registered under the name Sua Betong Oil Mill. evidence: Sua Betong Oil Mill has been registered under RSPO IT platform with eTrace membership No: RSPO_PO1000000298 and the Licence for the present certification : Sub Licence ID : CB37134 Issued on: 14/5/16 Issued by PT TUV Rhineland Indonesia Start date: 17/5/16 End Date: 17/2/17 Total Certified Area: 15,005.05 ha Product CPO PK Certified Volume 64,958 MT 9,579.502

Amount delivered 1,7.44 MT 5,701.40 MT

The parent company, Sime Darby Plantation Sdn Bhd is a member of the RSPO since 6/9/04. Their membership number is 1-0008-04-000-00 GP 9405A Page 76 of 113

D.3: Documented Procedures

D.3.1 The site shall have written procedures and/or work instructions to ensure the MAJOR implementation of all the elements specified in these requirements. This shall include at minimum the following: a) Complete and up to date procedures covering the implementation of all the elements in these requirements; b) The role of the person having overall responsibility for and authority over the implementation of these requirements and compliance with all applicable requirements. This person shall be able to demonstrate awareness of the site’s procedures for the implementation of this standard .

Findings In compliance: Yes: x No: Objective The production unit has established a draft version of written procedures and work instruction to evidence: ensure the implementation of all elements specified in RSPO Supply Chain requirements. The procedure is evident in Standard Operating Procedure for Sustainable Supply Chain and Traceability . The procedure covers: 1.0 Introduction 2.0 Objectives 3.0 Scope 4.0 Responsibilities 5.0 Control of Documents & Records 6.0 Delivery of FFB from the Estate 7.0 Receiving FFB at the Mill 8.0 Process Monitoring 9.0 CPO and PK Despatch 10.0 Non-Conforming Material 11.0 Product Claims 12.0 Outsourced Contractor 13.0 Training 14.0 Reclassification for Mills Supply Chain Model 15.0 Production Volume Glossasy Appendix 15a: Flowchart for Crop Diversion Appendix 15b: Rules for Determining FFB diversion Appendix 15c: List of Supply Base and Crop diversion for SOU Table 1: List of Certification Type and supply chain Status for Malaysian Operation

The appointed person having overall responsibility for and authority over the implementation of these requirements and compliance with all applicable requirements is Mr. Noor Rizman bin Kasmuri, Senior Assistant Manager as evident in his appointment as Person-In-Charge for Environment/Quality Management System dated 1st October 2016 .

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

Findings In compliance: Yes: x No: Objective Documented procedures for receiving and processing certified FFBs is sighted in Section 7.0: evidence: Receiving FFB at the Mill and Section 8.0: Process Monitoring of the SOP for Sustainable Supply Chain and Traceability . GP 9405A Page 77 of 113

Flowcharts for crop diversion are also available in their SOP : Appendix 15a: Flowchart for Crop Diversion Appendix 15b: Rules for Determining FFB diversion

D.4: Purchasing and goods in

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

Findings In compliance: Yes: No: Objective Sua Betong Oil Mill only recive FFB from their own supply base and sometimes from other SOU evidence: supply base. Sua Betong Oil Mill record the FFB received in the Monthly Crop Report KKS Sua Betong . Tt records the source and tonnage of certified FFB received . The following are the amount received form the supply base .

FFB FY 15/16 FY 16/17 ( as of Nov 2016 )

(MT ) (MT)

Bradwall Estate 26,567.76 18,439.08

PD-Lukut Estate 9,906.31 204.72

Salak Estate 2,054.17 4,899.59

Sengkang Estate 27,398.87 22,998.77

Sungei Bahru Estate 13,119.10 9,301.04

Siliau Estate 30,240.66 17,424.77

Sua Betong Estate 47,329.32 24,773.66

Tampin-Linggi Estate 33,060.73 16,609.94

Labu Esate 360.27 1,049.38

New Labu Estate 906.26 54.61

Tanah Merah estate 198.33 0

191,141.78 115,755.56

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

Findings In compliance: Yes: x No: Objective It is stated in the Standard Operating Procedure ( SOP) for Sustainability Supply Chain and evidence: Traceability Manual ver 2 , Issue Date March 2016, in under the Section 15.0 Production Volume, in sub-section 15.3 and 15.4, when there is a ‘ projected overproduction ofcertified volume, the mill will inform PSQM complete with justification and PSQM will notify the respective CB accordingly for any updates in the RSPO IT platform ‘. D.5: Record keeping

D.5.1 The site shall record and balance all receipts of RSPO certified FFB and deliveries MAJOR of RSPO certified CPO and PK on a three-monthly basis.

Findings In compliance: Yes: x No: GP 9405A Page 78 of 113

Objective Sua Betong oil Mill records the balance of all receipts of RSPO certified FFB and deliveries of evidence: RSPO certified CPO and PK on a three-monthly basis. This is sighted in the Mass Balancing Records for Oil Mills . Periods used by Sua Betong Oil Mill are: a) Jun-Aug b) Sep- Oct c) Dec-Feb d) March – May D.6: Processing

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

Findings In compliance: Yes: x No: Objective As Sua Betong POM do not receive non-certified crop so segregation is of no issue. evidence: As to date, the POM has received certified IPs FFB from own supply base and some diverted crop from another SOU (also IPs certified). The amount processed is reported in the ‘Daily Prodcution Summary Report ‘ . The production Report for 21/12/16 was sighted.

Based on the report the following can be sighted :

Today

FFB received 918.230 MT

FFB Processed 901.956 MT

CPO produced 181.940 MT

OER % 20.17 %

Today- FFA 2.65

Production DOBI 3.36

PK Produced 43.613

KER % 4.84 &

Mill Throughput ( MT / Hr ) 48.754

Mill Utilization, % 75.163

Mill Running Hours , hrs 18.50

The record also report the storage quantity for both CPO and PK.

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

Findings In compliance: Yes: x No: Objective The POM only received certified IPs certified FFB from own supply base and some diverted crop evidence: from another SOU (also IPs certified).

Module E – CPO Mills: Mass Balance Not applicable GP 9405A Page 79 of 113

3.2 Corrective Action Request There are total of 07 Major and 02 Minor were raised. Please refer to the Appendix A for the details findings and relevant correction actions have been taken. 3.3 Noteworthy Positive Components SOU 15 Sua Betong has maintained their commitment to the RSPO requirement and has shown in their operation and communication that they intend to improve during this recerification . As such, since this was a receritification, PT SGS auditors raised non-conformities on the sampled estate even though the other sampled estate has the compliance evidence / document in place. SOU 15 Sua Betong Management and the PSQM team accepted such NC and were positive in their response resulting in prompt action to identify the root cause. This is to ensure that all the supply base as well as the mill will be on equal standard of compliance .

3.4 Status of Non-Conformities Previously Identified Please refer to Appendix B for the previous audit.

3.5 Issues Raised by Stakeholders and Findings A list of stakeholders contacted with detail issue raised is included as Appendix D.

GP 9405A Page 80 of 113

4. ACKNOWLEDGEMENT OF ORGANIZATION INTERNAL RESPONSIBILITY 4.1 Conclusion The audit team concludes that the organization has has not established and maintained its management system in line with the RSPO P&C and Supply Chain requirements of the standard and demonstrated the ability of the system to systematically achieve agreed criterion & requirements.

4.2 Date of Next Surveillance Visit The next surveillance audit is planned between 9 month and 12 month of its certificate anniversary.

4.3 Date of Closing Non-Conformities

Reference Category Issued date Close out date Number (Major/Minor)

m 01 (2.2.3) Minor 30Nov 12 17 Dec 12

m 02 (4.1.2) Minor 30 Nov12 5 Dec12

m 03 (4.2.2). Minor 30 Nov12 5 Dec12

m 04(4.4.7) Minor 30 Nov12 13 Nov14

m 05 (4.5.4) Minor 30 Nov12 17 Nov 12

M 06 (4.6.3) Major 30Nov12 17 Dec 12

M 07 (4.7.1) Major 30 Nov12 17Dec12

m 08 (5.1.2) Minor 30Nov12 11Nov14

m 09 (5.3.2) Minor 30Nov12 11Nov14

m 10 (5.5.3) Minor 30Nov12 17 Dec 12

M 11 (5.6.1) Major 30Nov12 17 Dec12

m 12 (5.6.2) Minor 30Nov12 11Nov14

m 13 (5.6.3) Minor 30Nov12 11Nov14

m 14 (6.3.2) Minor 30Nov12 11Nov14

m 15 (8.1.6) Minor 30Nov12 17Dec 12

m 16 (4.4.7) Minor 13Nov14 12Dec14

M 17 (4.6.3) Major 13Nov 14 18Dec14

m 18 (5.3.2) Minor 13Nov14 12Dec14

M 19 (8.1.3) Major 13Nov14 18Dec14

M 20 (2.1.1) Major 19Nov15 21Dec15

M 21 (2.2.1) Major 19Nov 15 21 Dec 15

M 22 (4.4.1) Previous Minor 22 Nov 16 15 Dec 17 Raised to a Major M 23 (5.2.1) Major 19 Nov 15 21 Dec 15

m 24 (5.2.4) Minor 19 Nov 15 20 Dec 16

m 25 (6.1.2) Minor 19/11/15 20 Dec 16 GP 9405A Page 81 of 113

M 26 (6.13.1) Major 19 Nov 15 21 Dec 15 M 27 (4.6.5) Major 22 Dec 2016 15 Feb 2017

m 28 (4.6.10) Minor 22 Dec 2016 ‘’ Open “

M 29 (4.7.2) Major 22 Dec 2016 15 Feb 2017

M 30 (6.1.3) Major 22 Dec 2016 15 Feb 2017

M 31 (6.3.1) Major 22 Dec 2016 15 Feb 2017

M 32 (6.5.2) Major 22 Dec 2016 15 Feb 2017

M 33 (6.5.3) Minor 22 Dec 2016 15 Feb 2017

M 34 (6.12.1) Major 22 Dec 2016 15 Feb 2017

4.4 Acknowledgement of Internal Responsibility and Formal Sign-off Assessment Findings PT SGS Indonesia and Client acknowledge and confirms acceptance of the Report contents and including the assessment findings. PT SGS Indonesia and Client accept the responsibility for addressing the opportunities of improvement detailed in this report.

Signed on behalf of Sime Darby Signed on behalf of PT SGS Indonesia Plantation Sdn Bhd - Strategic Operating Unit (SOU) 15 Sua Betong

GP 9405A Page 82 of 113

APPENDIX A: CORRECTIVE ACTION REQUEST & OBSERVATIONS

CAR # Indicator CAR Detail

Previous 4.4.1 Date 22 Dec 16 Due Date> 21 Feb 17 Date Closed> 15 Feb 2017 Minor 22 Recorded> Raised to a Normative reference and requirements: Major NC An implemented water management plan shall be in place. M22 Statement of Non-Conformance: A water management plan was not adequately documented and implemented Objective Evidence: The current established Water Management Plan did not adequately include all information listed in RSPO P& C MYNI (2014 ) Guidance. Root cause analysis to be completed by Organization: The format used for summary of the water management activities into the Water Management Plan is not comprehensive Corrective Action to be completed by Organization: To change the format of Water Management Plan Summary to better reflect actual water management activities including water conservation. Preventative Action to be completed by Organization:

To regularly review and update the water management plan as per current practice. Close-out evidence/Planned Actions to be completed by Lead assessor: GP 9405A Page 83 of 113

CAR # Indicator CAR Detail

Water Management Plan for Sua Betong and Siliau Estate is evident in Water Management Plan (dated 9 th Sep 2016). The plan has included:

- Contingency Plan during Water Shortage (16/17)

Water Shortage/Dry Spell

Severe Water Pollution

- Water Management Plan

Water Sources

Water Quality

Control of Erosion

Sua Betong estate did monitor water usage monthly as summarized in Water Usage Sua Betong Estate FY2016/2017.

c. The plan did include the following:

- Identification of water sources: Items (SAINS, Rain Water)

- Efficient use of water: Water usage monitoring at bulk meter.

- Renewability of water source: Rainwater

- Access of clean drinking water for clean water has been provided to all workers as main water supplies from SAINS (national grid).

- Commitment to avoid surface and ground water contamination has been clearly mentioned in Section 3: Control of Erosion and river reserve guidance.

d. The identified actions in the plan have been implemented in Sua Betong estates and POM. Water management plan for Sua Betong POM is evident during the audit. The plan has included:

Item

Location

Action Plan

Person in Charge

Target Date

The Production unit has submitted evidences of Water Management Plan for year 2016/17 which consist information of: - Initiative - Benefits - Remarks - Units of Measure There are also evidences of Rainfall data recorded; water bills recorded as well as water sampling results has been attached. MAJOR CAR 22 CLOSED

4.6.5 Date M27 22 Dec 16 Due Date> 21 Feb 17 Date Closed> 15 Feb 2017 Recorded> GP 9405A Page 84 of 113

CAR # Indicator CAR Detail

Normative reference and requirements:

Pesticides shall only be handled, used or applied by persons who have completed the necessary training and shall always be applied in accordance with the product label. Appropriate safety and application equipment shall be provided and used. All precautions attached to the products shall be properly observed, applied, and understood by workers (see Criterion 4.7) Statement of Non-Conformance: Pesticides has been handled; used or applied by persons who have not completed the necessary training as sighted during site inspection.

Objective Evidence: Site inspection conducted at Field 2000E of Tampin Linggi estate found out four new workers is doing spraying. However, there is no evidence of training conducted for these workers are made available for the auditors. The identified sprayers are: a) Das Bahamdas b) Roy Presenjit c) Mondal Rakesil d) Sarki Subardo Upon checking on their training rcords at Tampin Linggi Estate, there were no records of evidence to show that training was conducted for the above new spray operators that are competent in chemical handling such as herbicide.

Root cause analysis to be completed by Organization: The training was conducted before new workers joined the company. Corrective Action to be completed by Organization:

To ensure all new workers are trained before they are assigned for spraying works Preventative Action to be completed by Organization: List of trained sprayers to be made visible for easier monitoring of new sprayers to be identified for training. Close-out evidence/Planned Actions to be completed by Lead assessor: Evidence of training , Latihan Meracun untuk Pekerja Baru conducted again to the spray operators on 23/12/16 to ensure that these workers are competent in handling chemical as well as the safety aspects of the operation is practiced . Trainer: Amirul Izzudin Ahmad Wahid, Asst Manager , Tampin Linggi Estate. SOU 15 Sua Betong also submitted evidence of assessment and completency , ‘ Borang Penilaina Kompetensi ’ of the workers , Das, Roy Mondal and Sarki. Record show that although they are weak in the local language ,Bahasa Malaysia they were able to carry out the spray operation correctly and safely. As a result they were competent in carrying out the duty as spray operators.

MAJOR CAR 27 CLOSED

4.6.10 Date m28 22 Dec 16 Due Date> Next surv Date Closed> dd mm yy Recorded>

Normative reference and requirements:

Proper disposal of waste material, according to procedures that are fully understood by workers and managers shall be demonstrated (see Criterion 5.3). Statement of Non-Conformance: Proper disposal of waste material according to procedures are inadequately demonstrated. GP 9405A Page 85 of 113

CAR # Indicator CAR Detail

Objective Evidence: a. Empty Canyon chemical containers used for the estate operation are not sighted at the empty Chemicals Container Store at Sua Betong Estate. b. The contaminated sawdust in the SW Store was not label at Sua Betong Estate. c. Empty chemical containers of Kenlon and Enviro-Cyper upon checking were not tripled rinsed at Tampin Linggi Estate Root cause analysis to be completed by Organization: a. The empty Canyon chemical containers were stored at the dedicated Scheduled Waste store only for empty Canyon containers during the time of audit. b. Staff in-charge was not aware on the SW labelling requirements for contaminated sawdust c. The workers assigned for the job were not properly trained on the triple rinsing process Corrective Action to be completed by Organization: a. To maintain up-to-date Scheduled Waste Inventory and kept at main office b & c. To train and re-train the employee in charge on Scheduled Waste Management including the triple rinsing of chemical container Preventative Action to be completed by Organization: 1. To regularly train the employee managing SW and maintain appropriate records. 2. PSQM will conduct special audit/visit for all NS Zone estates to guide and assist on SW Management Close-out evidence/Planned Actions to be completed by Lead assessor: The above root cause analysis, corrective action and prevention action plan was accepted. The following will be check in the coming surveillance 1. Scheduled Waste Inventory (SBE) 2. Training records of SW management with pictures (SBE &TLE) 3. NS Zone Estate visit schedule by PSQM CAR # Indicator 4.7.2 Date M29 22 Dec 16 Due Date> 21 Feb 17 Date Closed> 15 Feb 2017 Recorded>

Normative reference and requirements:

All operations where health and safety is an issue shall be risk assessed, and procedures and actions shall be documented and implemented to address the identified issues. All precautions attached to products shall be properly observed and applied to the worker Statement of Non-Conformance: All operations where health and safety is an issue has not been fully be risk assessed, and procedures and actions shall be documented and implemented to address the identified issues. Objective Evidence: Risk assessments for all operations where health and safety is an issue in the production unit has been recorded in HIRARC Form. However, documentation review conducted on Sua Betong POM HIRARC dated 7th October 2015 (Depericarping station) reveals that activities at Depericarper station have not included Noise Hazard. Noise Map requested for the POM is not evident. Root cause analysis to be completed by Organization: There was no Noise Map available during the time of audit as it was with maintenance engineer who was on leave. Corrective Action to be completed by Organization: GP 9405A Page 86 of 113

CAR # Indicator CAR Detail To display noise map at visible locations To review HIRARC (Depericarping Station) and include noise hazard Preventative Action to be completed by Organization: To regularly review HIRARC as per current practice Close-out evidence/Planned Actions to be completed by Lead assessor: SOU 15 Sua Betong submitted the revised HIRARC dated 4/1/17 to include the the risk assessment at the Depericarping Station for noise hazard (if in the noise map states this area requires noise hazard protection) 7.3.4.2 (h) Exposure to high noise level . Pictorial evidence of the noise map as well as the high noise hazard signage being displayed at visible location to inform the mill workers were submitted . MAJOR CAR 29 CLOSED

M30 6.1.3 Date Due 22 Dec 16 21 Feb 17 Date Closed> 15 Feb 17 Recorded> Date> Normative reference and requirements: Plans for avoidance or mitigation of negative impacts and promotion of the positive ones, and monitoring of impacts identified, shall be developed in consultation with the affected parties, documented and timetabled, including responsibilities for implementation. Statement of Non-Conformance: Plans for avoidance or mitigation of negative impacts and promotion of the positive one, and monitoring of impacts identified did not fully cover all aspects and not adequate Objective Evidence: Social Management Plan in both estates and mill did not cover current social issues such as poor drainage, mosquitoes, health, safety, welfare, education; no promotion of positive impacts has been included in the management plan and no monitoring of impacts identified. Root cause analysis to be completed by Organization: The format used for Social Action management plan did not cover other areas especially the positive areas. Current format only reviews actions to be taken to address problematic issues only. Corrective Action to be completed by Organization: To include other criteria recommended in the Social Impact Assessment report Preventative Action to be completed by Organization: To regularly review the Social Management Plan and keep appropriate records. Close-out evidence/Planned Actions to be completed by Lead assessor: Estates and Mill has updated their Social Management Plan prior to social issues occurred in their areas. The new plan also has included the monitoring of both negative and positive impacts including the time frame and person in charge. The plan for both estates and mill has been sent to SGS (M) Sdn Bhd on 31 Jan 2017. MAJOR CAR 30 CLOSED

M31 6.3.1 Date Due 22 Dec 16 21 Feb 17 Date Closed> 15 Feb 17 Recorded> Date> Normative reference and requirements: GP 9405A Page 87 of 113

The system, open to all affected parties, shall resolve disputes in an effective, timely and appropriate manner, ensuring anonymity of complainants and whistleblowers, where requested. Statement of Non-Conformance:

The system has not effectively ensure that complaints or grievances are addressed or resolved in an effective, timely and appropriate manner Objective Evidence: - The estate’s complaint book (internal) has not stated any response from management towards complaint (though the interviewed staff has declared that all complaint has been responded) and no completion date to show that the complaint has been address and resolve in an effective, timely and appropriate manner - Mill communication book showed that there were several complaints has yet to be address and resolve as stated in complaint procedure (i.e: complaint dated 21/03/2016, 24/03/2016, 30/03/2016, 23/05/2016, 22/08/2016, 20/09/2016 has yet to be response by the mill management.) Interviewed with management has said that all complaint has been addressed and resolved immediately. Only not been updated and recorded in the communication book. Interview with workers has confirmed the management feedback. - Complaint/grievance book has become the housing repair book (Tampin Linggi Estate). - Interview with workers found that they have issue relating payment, OT and has not been properly addressed by the management due to lack of communication (Tampin Linggi Estate).

Root cause analysis to be completed by Organization: 1. There was no specific book to log complaints from stakeholder internal/external (other than housing repairs) 2. The format of capturing complaints and response was insufficient. No space to capture response by management and acknowledgement by complainant Corrective Action to be completed by Organization: 1. To have a specific logbook for stakeholders complaints and a specific book for housing repairs (TLE) 2. The format of capturing complaint shall be complete until the part of acknowledgement by the complainant. Preventative Action to be completed by Organization: To monitor and ensure any complaint is responded within 14days after it is logged. Monitoring can be done by Assistant Manager by weekly basis. Close-out evidence/Planned Actions to be completed by Lead assessor: Estate and mill has rectified and updated the document which has included the date and response towards complainant made by the management as documentation’s evidence that all complaint has been rectified within the timeframe. Tampin Linggi Estate has developed and differentiate a specific logbook prior to stakeholders complaints and the other book is for housing complaint and repairs. Estates and mill also will closely monitor and ensure any complaint is responded within 14 days after the complaint has been made and make sure that all documents maintained and keep up to date. Monitoring of documentation dan complaint response will be made by Assistant Manager on weekly basis. Evidence of closing CAR has been sent to SGS (M) Sdn Bhd by the PSQM department on 31 Jan 2017.

MAJOR CAR 31 CLOSED

M32 6.5.2 Date Due 22 Dec 16 Next surv Date Closed> 15 Feb 17 Recorded> Date> GP 9405A Page 88 of 113

Normative reference and requirements: Labour laws, union agreements or direct contracts of employment detailing payments and conditions of employment (e.g. working hours, deductions, overtime, sickness, holiday entitlement, maternity leave, reasons for dismissal, period of notice, etc.) shall be available in the languages understood by the workers or explained carefully to them by a management official. Statement of Non-Conformance: Employment contract is not available in the languages understood by the workers/explained carefully to them by a management official

Payslip not understood by the workers Objective Evidence: - Estate has not given copy of employment contract to their workers. Interviewed with assistant manager has confirmed that they did not given any copy of employment contract to their workers.(TLE) - The employment contract is not available in the language understood by the workers/explained carefully by the management and understood by the workers. - The documentation of pay and conditions are not easily understood by the workers (estates).

Root cause analysis to be completed by Organization: The workers are briefed on the contract during the induction session in the Workers Management Centre (WMC) Sua Betong prior to the deployment to Operating Units (OU) and also when they arrive at the OUs. These are done with interpreters. However, the support documents were not properly maintained and the Executive In-Charge at the WMC was not in for interview during the time of audit. Corrective Action to be completed by Organization: 1. To give a copy of employment contract to the workers and hold a contract and payslip briefing to the workers. 2. To prepare the support documents of proof that the workers have been briefed on their employment contract (attendance list, summary of presentation materials, details of interpreter and trainers) Preventative Action to be completed by Organization: To display the interpretation of payslip in languages understood by workers. Close-out evidence/Planned Actions to be completed by Lead assessor: Estate has conducted a briefing towards workers regarding employment contract and payslip. First briefing has been conducted during induction session in the Workers Management Centre (WMC) Sua Betong prior to deployment to Operating Unit and has been explained carefully by interpreters. The second briefing has been conducted prior to workers arrival in the estate. For workers more than 1 years. The contract employment has been explain during muster call. Sua Betong Estate also has took an initiative to display the interpretation of payslip at Muster Ground Notice Board prior to educate the workers on how to read the payslip. The supporting documents have been sent to SGS (M) Sdn Bhd on 31 Jan 2017.

MAJOR CAR 32 CLOSED

m33 6.5.3 Date Due 22 Dec 16 Next surv Date Closed> 15 Feb 17 Recorded> Date> Normative reference and requirements: GP 9405A Page 89 of 113

Growers and millers shall provide adequate housing, water supplies, medical, educational and welfare amenities to national standards or above, in accordance with Workers’ Minimum Standard of Housing and Amenities Act 1990 (Act 446) or above, where no such public facilities are available or accessible (not applicable to smallholders). Statement of Non-Conformance: Housing area not properly maintained as required by Workers’ Minimum Standard of Housing and Amenities Act 1990 (Act 446) Objective Evidence: Some of the aspects required under the Workers’ Minimum Standard of Housing and Amenities Act 1990 (Act 446) were not implemented. - Window panes missing - Frequency of line site inspection was not according to the Act - Stagnant water sighted along the drainage system (Tampin Linggi Estate)

Root cause analysis to be completed by Organization: 1. The person in-charge for the linesite inspection was unaware on the frequency requirement 2. Evidence of response and action taken to replace missing panes and to repair drains were not properly maintained. Corrective Action to be completed by Organization: 1. To brief person-in-charge on the requirement of weekly linesite inspection. 2. To prepare evidence of response for missing panes 3. To prepare evidence of panes purchase and drain repair budget Preventative Action to be completed by Organization: 1. To regularly monitor the findings of linesite inspection report by the management Close-out evidence/Planned Actions to be completed by Lead assessor:

Tampin Linggi Estate has rectify the issue as below: - All missing window panes has been replaced - Line site inspection has been made on weekly basis. Weekly Sanitation report has been sent to SGS (M) Sdn Bhd on 31 Jan 2017 - The line site drain has been repaired and completed on 25 Jan 2017 in order to clear the water flows and avoiding stagnant water at the line site. Minor CAR 33 CLOSED

M34 6.12.1 Date Due 22 Dec 16 21 Feb 17 Date Closed> 15 Feb 17 Recorded> Date> Normative reference and requirements: There shall be evidence that no forms of forced or trafficked labour are used. Statement of Non-Conformance: Passport are not voluntarily surrendered Objective Evidence: Tampin-Linggi Estate has no consent letter that workers voluntarily surrender their passport to the management.

Root cause analysis to be completed by Organization: There has been a change of the format of employee agreement and management has overlooked the consent letters GP 9405A Page 90 of 113

Corrective Action to be completed by Organization: Management to make available the consent letters for workers who wish the management to keep their passport on their behalf. Preventative Action to be completed by Organization: To ensure all workers give their consent in written form if they wish to keep the passport at the management Close-out evidence/Planned Actions to be completed by Lead assessor: Tampin Linggi Estate has prepared “Borang Penyerahan Pasport” prior to workers voluntarily surrendered their passport to be kept by the management due to safety reason. The form consist of workers declaration to surrender their passport with their signature and management declaration that they shall give the passport to the workers if they request to do so. Samples of “ Borang Serahan Pasport ” has been sent to SGS (M) Sdn Bhd on 31 Jan 2017.

MAJOR CAR 34 CLOSED

OBSERVATIONS

OBS # Indicator Observation/Opportunity for Improvement

4.1.3 Date OBS 22/12/16 Due Date> dd mm yy Date Closed> dd mm yy 28 Recorded> Details: Records of monitoring and any actions taken to ensure all activities conducted in accordance to the procedure shall be maintained and available, as appropriate

Workplace inspection report for Sua Betong estate is available in “Pemeriksaan Tempat Kerja” conducted by AJK OSHA. However, the report has not been signed; dated and cover all facilities or workplace (e.g.: Pre-Mix Area; Chemical Store; Estate Vehicle).

OBS # Indicator Observation

Date OBS 6.4.3 22/12/16 Due Date> dd mm yy Date Closed> dd mm yy 29 Recorded> Details:

The compensation for Indonesian worker (Muhammad Habibul) who was injured in February 2016 is still pending. (TLE)

GP 9405A Page 91 of 113

APPENDIX B: NON-CONFORMITIES PREVIOUSLY IDENTIFIED

CAR # Indicator CAR Detail

01 2.2.3 Date Recorded> 30 Nov 12 Due Date> Next surv Date Closed> 17/12/12

Non-Conformance:

Evidence that boundary stones are found within the estate and not along the perimeter adjacent to state land and other reserves are being located and visibly maintained.

Objective Evidence: Boundary has been mapped by the PAU, TTAS, R&D Carey Island GPS Department 2008. Only some of the boundary stones remain in most of the estates and these are marked. For example in PD Lukut, the boundary marker found at the border in field 02B (adjacent to a housing project) was visited. N02 ◦ 30’ 46.1”, E 101 ◦ 50’ 38.4”. Sengkang: Documented evidence showed that the Boundary stone located within the estate compound.

Close-out evidence: According to the evidence submitted it was reported that all boundary stones has been recognised – Evidence attached, however map was not submitted. So the evidence was incomplete to close the CAR. An observation is raised for the auditors to verify during the next surveillance. Minor CAR 01 – Closed and Observation 10 Raised

02 4.1.2 Date Recorded> 30th Nov 12 Due Date> Next surv Date Closed> 05/12/12

Non-Conformance:

Records of monitoring and the actions taken are not maintained and kept for a minimum of 12 months.

Objective Evidence: Monitoring of triple rinsing procedure was not conducted in Sengkang estate.

Close-out evidence: Submitted evidence of training on triple rinsing and its monitoring based on the procedure provided by Sungai Baru Estate.

03 4.2.2 Date Recorded> 30th Nov 12 Due Date> Next surv Date Closed> 05/12/12

Non-Conformance:

Evidence of periodic tissue and soil sampling to monitor changes in nutrient status is unavailable.

Objective Evidence: Results of soil sampling are not available in the estate. Foliar analysis result was not found in the correct file during the audit. Leaf sampling was done in June 2012 and the results were available. It was found to be included in the 2012/13 agronomic & fertiliser recommendation dated 27th June 2012. In Sungei Bahru the foliar analysis result was found in the ‘Fertiliser Damage Claims’ file However in Sungai Bahru/Salak and Sengkang estate the soil sampling results was not able to be presented.

Close-out evidence: Refer to evidence attached: i. Sg Bahru Soil Analysis Result_pg1 ii. Sg Bahru Soil Analysis Result_pg2 Sengkang Soil Analysis being carried out. GP 9405A Page 92 of 113

CAR # Indicator CAR Detail

04 4.4.7 Date Recorded> 30th Nov 12 Due Date> Next surv Date Closed> 13 Nov 2014

Non-Conformance:

No evidence of water management plans.

Objective Evidence: For evidence of water management plans the Water Management file was referred. It was found that in PD Lukut Estate and in Sengkang Estate, water usage records are lacking (eventually found in the ‘working account’ file). The plan is incomplete as it only include : • Water reduction plan • Water contingency plan • Water management plan for immature • Rainfall data Similarly as in 4.4.5, water usage was also not monitored at the mill.

Close-out evidence: Please refer to Minor CAR 16 as the finding during Main Assessment has not been addressed adequately during Surveillance 01 audit.

05 4.5.4 Date Recorded> 30th Nov 12 Due Date> Next surv Date Closed> 17/12/12

Non-Conformance:

Monitoring of pesticide usage units per hectare or per ton crop is not available.

Objective Evidence: Reference is made to the : Environmental Impact Assessment file Monitoring of total pesticide active ingredient usage per hectare and per tonne FFB Production is available. PD Lukut: Ref: Total Pesticide usage per MT files Monitoring done on a monthly basis. Includes both insecticide as well as herbicide Month kg a.i /ha kg a.i / FFB Oct ‘12 0.75 0.29 Sept ‘12 0.88 0.33 Aug ‘12 0.63 0.26 Both tabulated and graphical presentation available. However in Sungai Bahru Estate, no monitoring of herbicide was presented during the audit.

Close-out evidence: Refer to evidence attached: i. Sg Bahru Herbicide Usage_pg1 ii. Sg Bahru Herbicide Usage_pg2 30th Jan M06 4.6.3 Date Recorded> 30th Nov 12 Due Date> Date Closed> 17/12/12 2013 Non-Conformance:

Pesticides empty containers not stored in accordance to the Occupational Safety and Health Act 1994 (Act 514) and Regulations and Orders and Pesticides Act 1974 (Act 149) and Regulations.

Objective Evidence: GP 9405A Page 93 of 113

CAR # Indicator CAR Detail

The chemical storage sites at Lubok China Division, PD Lukut estate are maintained in good condition with the proper ventilation, lighting, sound roofing and walls with lockable door. However the followings were some of the non-conformities found concerning the disposal of the empty containers: a. Sungai. Bahru Lubuk Cina Division : Reuse of empty chemical container as a fertiliser container b. PD Lukut Estate : Reuse of chemical container in found in Badang ( during Muster ), use as a loose fruit scraper and a dust pan ( Sengkang Div 1 surau ) c. Sungai. Bahru Lubuk Cina Division, Home Division & PD Lukut & Sengkang Div 1 Chemical containers were not properly rinsed using the triple rinse method as required as chemical residue was still evident.

Close-out evidence: a. Sg. Bahru: The identified re-used chemical containers were collected and recorded into the schedule waste record and kept in the schedule waste store. b. Sg Bahru Triple Rinsing Training_pg1 c. Sg Bahru Triple Rinsing Training_pg2 completed in 5th Dec 2012 d. Sengkang Estate - Refer to evidence attached: Triple Rinsing ( Old training records were submitted ) e. From the evidence submitted , this CAR is considered closed however an observation is raised as the training record submitted was dated prior to the date of audit. As a result, an Observation is raised for the auditors to follow up during the next surveillance Major CAR 06 – Closed and Observation 11 – Raised 30th Jan M07 4.7.1 Date Recorded> 30th Nov 12 Due Date> Date Closed> 17/12/12 2013 Non-Conformance:

Incomplete evidence of documented Occupational Safety Health (OSH) plan which is in compliance with OSH Act 1994 and Factory and Machinery Act 1967 (Act 139)

Objective Evidence: The following are the non-conformities identified during the audit: a. It was sighted that the risk assessment for Sua Betong POM, Sungai Bahru Estate and Bradwall has not been updated to cater for accident that occurred during the validity of the HIRARC for FY 12/13. b. Although SOU 15 has a PPE matrix records to identify the PPE required for the various field operations, records of PPE issuance FY 12/13 is yet to be made at Sengkang Division 1, PPE gloves were issued to the harvester but not used as the worker complain of being too slippery. In PD Lukut, one of the manuring workers had only one glove during the operation. Similarly, in Bradwall estate, manuring worker was using damaged rubber gloves due to the delayed in the replacement of the PPE. c. In PD Lukut Estate, the responsible person- En Faris Abdtholuddin, Asst Manager, (Jan 2nd, 2012) was appointed as the Safety Officer. However there was no appointment of Safety and Health Officer at the Sua Betong POM. d. ERP was sighted in the chemical store in PD Lukut Estate while in Sengkang Div 1, the ERP was placed at the workshop. e. PD Lukut Estate - First aid kit was missing from the Manuring mandore. f. Checks on first aid kits showed that they did not contain the same medicines and emergency treatment accessories. g. POM: first aid kit lacking at Grading Station, No appointed safety and health officer. h. Tampin Linggi Estate: Harvester on motorbike carrying harvesting sickle without the protective sheath, Nursery mandore – not trained/ not familiar with the contents in the first aid kit. First aid kits contain pills which were not supposed to be in.

Close-out evidence: GP 9405A Page 94 of 113

CAR # Indicator CAR Detail

On 11/1/13, Sua Betong POM submitted evidence that a First Aid Kit has been provided at the Grading Station. The risk assessment was updated and submitted. It was done by Mr Yogeswaran.Kandasamy, QMO NS ZONE 2 PSQM who is also in charge of Safety and Health for Sua Betong Oil Mill. Sengkang Estate - First Aid kit has been placed in the van accordingly with labelling As the major shortcomings were shown to have been overcome, this Major Car is considered closed. However, since not all the accompanying minor issues were satisfactorily closed and no adequate documents were submitted as evidence, an Observation is raised for the auditors to check during the next surveillance. Major CAR 07 Closed and Observation 12 – Raised

08 5.1.2 Date Recorded> 30th Nov 12 Due Date> Next surv Date Closed> 11 Nov 2014

Non-Conformance:

Environmental improvement plan to mitigate the negative impacts and promote the positive ones, is not developed, implemented and monitored.

Objective Evidence: In SOU 15, a form known as ‘Quality/Safety/Environment management programme (for FY 2012/13) is used for the implementation of environmental improvement plan. It is used to monitor or track the implementation at 6 monthly intervals. e.g. in Sengkang Division 1 estate uses the form to identify the environmental improvement plan to mitigate the negative impacts and promote the positive ones of the problem issue of ‘to reduce oil spillage and avoid ground spillage Nevertheless in Salak Estate no updated on Environment Improvement plan (2008/9) (e.g. Biodiversity, waste management, water usage) was carried out. Similarly, although the Environmental Management Plan for Sua Betong Palm Oil Mill FY11/12 is available, the action plan has yet to be updated accordingly. In the mill the same environmental management plan was found in FY12/13. Since April 2011, same issue such as CEMS still unable to resolve.

Close-out evidence: All estates in the certification unit have updated the Environmental Improvement Plan FY14/15 as evident during Surveillance 01 audit. Sua Betong POM has installed CEMS as evident in Yokogawa Data Acquisition System.

09 5.3.2 Date Recorded> 30th Nov 12 Due Date> Next surv Date Closed> 11 Nov 2014

Non-Conformance:

Having identified wastes and pollutants, an operational plan has not been developed and implemented, to avoid or reduce pollution.

Objective Evidence: GP 9405A Page 95 of 113

CAR # Indicator CAR Detail

Although SOU 15 has procedures , the followings were found to be in non-conformity: a. In Sengkang Div 1 Estate and in Sungai Bahru Lubok Cina division, workers have indiscriminately disposed of their motorcycle 4T /2T containers and its black oil into the domestic waste bins. b. The recycled bins were not used as per the waste identified. ( the waste was not segregated ) c. In Bradwall Estate, empty paint containers were not placed in the Schedule Waste site which is supposed to be categorized and disposed under schedule waste. SW417 d. In Sengkang: a. No scheduled code for the empty pesticide container. b. Oil stain with the saw dust was found on the ground near the storage area ( improper spill kit usage, Oily chemical sump with dead beetles and chemical container covers, Domestic waste / Festival celebration waste improperly disposed ( at frond stack ), Records of disposal incomplete as it records only one disposal for 2012 e. In PD Lukut Estate, the Scheduled Waste storage lubricants do not have an oil trap as well as spill kit. f. At the POM, Scheduled Waste Drum was used as a stool at the Grading Station and thrown into the Scrap yard site. At the Storage area, spill kit was lacking. Soiled and Oily rags were thrown indiscriminately.

Close-out evidence: The certification unit has presented evidence of corrective action taken to address the findings during Surveillance 01 audit. a. Sengkang Estate has conducted Gotong Royong to collect all schedule waste on 16 Mar 2014. b. Sengkang Estate has allocated additional Recycle Bin to promote waste segregation among the workers. c. The certification unit has assigned Scheduled Waste code at all schedule waste store. d. All scheduled waste drum at Sua Betong palm oil mill have been collected and recorded in Schedule Waste Record.

10 5.5.3 Date Recorded> 30th Nov 12 Due Date> Next surv Date Closed> 17/12/12

Non-Conformance: Evidence of burning waste (including domestic waste).

Objective Evidence: Evidence of burning waste at the linesite. In Sengkang Estate, some burning of domestic waste was seen at line site.

Close-out evidence: In Sengkang Estate, the site for burning domestic wastes has been cleared and signboard prohibiting burning has been erected accordingly. Refer evidence. A briefing cum training session was held to warn and remind the workers against this prohibited practice. 30th Jan M11 5.6.1 Date Recorded> 30th Nov 12 Due Date> Date Closed> 17/12/12 2013 Non-Conformance: No documented plans to mitigate all polluting activities.

Objective Evidence: A documented plan to mitigate all polluting activities is available. Environment Management Programme to mitigate polluting activities for financial year 2012/2013 is in place and implemented. The SOU Betong has the waste management action plan for 2012/2013. The management plan focused on POME, air pollution and contamination of the natural water course. The preventive management on pollution has been updated annually (latest version FY12/13). However, the unsettled issues of CEMS under the purview of DOE regarding Stack monitoring emission still remains unresolved since the Mill was commissioned in 2011. GP 9405A Page 96 of 113

CAR # Indicator CAR Detail

Close-out evidence: The client submitted evidence of correspondences with the relevant parties within Sime Darby and the problem they have with the CEMS supplier as well as the problem of the data unable to continuously transmit due to communication line failures. In view of the progress and the effort made to rectify the problem, the CAR is considered closed. However due to the unresolved issue, an Observation is raised for it to be verified again during the next assessment. Major CAR 11 – closed and Observation 14 – Raised

12 5.6.2 Date Recorded> 30th Nov 12 Due Date> Next surv Date Closed> 11 Nov 2014

Non-Conformance: Plans are not reviewed annually.

Objective Evidence: In Sengkang estate, the pollution prevention plans were not reviewed annually as the last plan was conducted on 19th May 2009.

Close-out evidence: It is evident that Pollution Prevention Plan for the certification unit has been reviewed annually as evident in Pollution Prevention Plan FY2014/2015.

13 5.6.3 Date Recorded> 30th Nov 12 Due Date> Next surv Date Closed> 11 Nov 2014

Non-Conformance: Monitor and reduce peat subsidence rate through water table management.

Objective Evidence: There is no plan on water table management for the small peat area (4 ha) in Sengkang estate.

Close-out evidence: 2014 Agronomic & Fertilizer Recommendation Report – Oil Palm has identified that Field E2000F at Sengkang Estate (Div. 2) are not peat. The field is classified as Malacca, Durian and Bungor series.

14 6.3.2 Date Recorded> 30th Nov 12 Due Date> Next Surv Date Closed> 11 Nov 2014

Non-Conformance: The system did not resolve disputes in an effective, timely and appropriate manner.

Objective Evidence: The established grievance procedures specify the estimated time that is required to be taken for each of the process to be addressed before proceed to the subsequent process. Grievance regarding the wages has been resolved in 2011 while the issues pertaining to encroachment of cattle into estates, the auditing team noted that the cattle encroachment issue has yet to be resolved pending negotiations with the cattle owners. All records covering the discussion, meeting and consultation held with the owners of the cattle is maintained. On 30/4/12 there was a letter by Bazin Husin of Kg Pinang Dalam who wrote in concerning a. Road & old palms leaning dangerously over the road b. Drainage and water that damage the villages fence Although the SOU 15 management reported that action has been taken, no documented evidence for its closure was seen and not recorded in the complaint book.

Close-out evidence: GP 9405A Page 97 of 113

CAR # Indicator CAR Detail

PD Lukut estate has provided evidence that all issues raised by stakeholders have been addressed in a timely manner. Action has been taken to address request from Mr. Bazin Husing by recorded in the complaint book in June 2014. A letter to confirm the action taken has been sent to Mr. Bazin Husin as a feedback from Sime Darby management. Surveillance 01 audit team evidence that all complaint recorded in the complaint book has been addressed by estate management in a timely manner. Record of the action taken is available at all individual estate.

15 8.1.6 Date Recorded> 30th Nov 12 Due Date> Next surv Date Closed> 17/12/12

Non-Conformance: Inadequate mechanism to capture the performance and expenditure in social and environmental aspects.

Objective Evidence: Coordination between relevant divisions within Sime Darby Plantation Sdn Bhd are still lacking e.g need to update the estate and the mill concerning new issues such as the RSPO Supply Chain Standard, training and documentation assistance was lacking in the preparation of the unit for the audit. Newly transferred staffs need to be aware of the Unit’s RSPO commitments and its updated documentation.

Close-out evidence: In the documents , Corrective Action Plan for Nonconformities raised during ASA01, submitted, it is mentioned ‘ Supply chain has been briefed to all staff during staff meeting held on 14/12/2012’ . However this CAR refers to the whole P&C not only the Supply Chain, so albeit this CAR is closed, an Observation is raised. Minor CAR 15 – closed and Observation 13 – Raised 16 4.4.7 Date Recorded> 13.11.14 Due Date> 12.11.15 Date Closed> 12.12.14 (Minor) Non-Conformance:

Water management plans for the certification unit did not contain relevant information as per RSPO P&C for Sustainable Palm Oil Production.

Objective Evidence: The document is insufficient to include: a. Taking account of the efficiency of use and renewability of sources. b. Ensuring that the use of water does not result in adverse impacts on other users. c. Avoiding contamination of surface and ground water through run-off of soil, nutrients or chemicals, or as a result of inadequate disposal of waste including POME. d. Appropriate treatment of mill effluent and regular monitoring of discharge quality, which should be in compliance with national regulations. Updated Water Management Plan submitted to address these findings, the submitted plan is sufficient to indicate the Action Plan and Management Plan as required by the standard. Close-out evidence: Updated water management plan. M17 4.6.3 Date Recorded> 13.11.14 Due Date> 12.02.15 Date Closed> 18.12.14 (Major) Non-Conformance:

Pesticides empty containers are not stored in accordance to the Occupational Safety and Health Act 1994 (Act 514) and Regulations and Orders and Pesticides Act 1974 (Act 149) and Regulations.

Objective Evidence: Empty containers were found not triple rinsed prior to storage (Sua Betong & Siliau) and evidence of empty containers kept at the line site (Bradwall Estate).

Close-out evidence: GP 9405A Page 98 of 113

CAR # Indicator CAR Detail

The certification unit has provided evidence of training has been conducted to relevant personnel (from all estates) for handling of empty chemical containers and waste management. Documented evidence of the training conducted is evident in Training Attendance Record by Zone conducted on 7 th Nov 2014. The training has been conducted by Mr. Mohd Azlirahizal (ESH Department).

Practical training for workers handling chemical containers has been conducted at all estates in the certification unit as below (in example):

a. Sua Betong estate: 13 th Nov 2014

b. Siliau estate: 30 th Nov 2014

All supportive documents and evidence have been submitted through email on 12 th December 2014.

18 5.3.2 Date Recorded> 13.11.14 Due Date> 12.11.15 Date Closed> 12.12.14 (Minor) Non-Conformance:

Identified wastes and pollutants were not properly handled to avoid or reduce pollution.

Objective Evidence: Waste management plan for the certification unit has been established (Waste Management Plan FY2014/2015). However, there is evidence of inconsistencies in the implementation of the management plan. In example: a. Visit to Sua Betong workshop evidence that no spill kit is available and oil spillage on the ground. b. Oil trap installed at diesel storage area is not functioning. c. Schedule waste (i.e.: used cloth, lubricant drum, paint container) found disposed in not in a proper manner (i.e.: workshop, temple).

Close-out evidence: The operating unit has submitted evidence to address this finding where all necessary action has been taken at the identified areas. The action taken and continuous improvement plan is evident in Corrective Action Plan for Nonconformities 2014 submitted through email on 12 th Dec 2014.

M19 8.1.3 Date Recorded> 13.11.14 Due Date> 12.02.15 Date Closed> 18.12.14 (Major) Non-Conformance:

Recycling programme has not actively implemented at all estates.

Objective Evidence: At Bradwall Estate, there is an evidences that delivery record of used paper & bottles (recyclable wastes) being collected by authorized collector. At other estate (i.e. Sua Betong Estate), the recyclable wastes were found disposed at the landfill. Visit to line site at Bradwall & Sua Betong found that recyclable wastes in the dustbin are mixed with other domestic wastes.

Close-out evidence: The certification unit has conducted Waste Management Training for all estates representative at Sua Betong Training Centre on 7 th Nov 2014. The training has been attended by 73 personnel as evident in Training Attendance Record. Sua Betong estate has decided to appoint external waste collector to dispose domestic waste sources from the estate. Contract with the collector is evident in LSB/AAQ/06/2014. Sua Betong estate has appointed Aslam Bin Abd Quddus as approved collector for recyclable item and domestic waste collection. Bradwall estate has start recyclable waste segregation program as required by the standard. The estate has appointed Biopride Sdn Bhd as the collector for recyclable waste collected within the estate.

GP 9405A Page 99 of 113

CAR # Indicator CAR Detail

M20 2.1.1 Date Recorded> 19 Nov 15 Due Date> 18 Jan 16 Date Closed> 21 Dec 2015

Non-Conformance:

Evidence of not compliance with relevant legal requirements

Objective Evidence: Sua Betong POM – Certificate of Fitness issued by the Fire Department has yet to be obtained. An inspection record by the Fire Department for the purpose of issuing the Certificate of Fitness is also not available.

Close-out evidence: Closing of Major CAR: Following to the audit, the company has taken immediate action to provide the missing information via email dated 16 December 2015. The submitted information outlined explanation given by the company’s headquarters whereby as far as Port Dickson District is concerned, the Certificate of Fitness has no longer be issued, yet be replaced by the Certificate of Completion and Compliance (CCC), the new certificate introduced in compliance with the Street, Drainage and Building (Amendment) Act 2007. Based on the communication, the consultant has been appointment i.e. Perunding AME Sdn Bhd, however the budget for the assessment is still pending approval from the top management. The company envisaged that the budget will be approved during the subsequent financial year FY 2016/2017 where subsequently the consultant will conduct the inspection to issue the CCC. Considering the action taken by the company and the written confirmation from the top management that the company has initiate the process for the application of the CCC, the audit team has agreed to close the Major CAR. However, a new Observation be issued to monitor and be verified during the next Surveillance Audit.

M21 2.2.1 Date Recorded> 19 Nov 15 Due Date> 18 Jan 16 Date Closed> 21 Dec 2015

Non-Conformance:

Documents showing legal ownership or lease and the actual legal use of the land are not adequately available.

Objective Evidence: PD Lukut Estate – The audit team observed that one land title No. GRN 00060110 still indicates the pre-condition for only allowed to plant Rubber. In view that the land has been planted with oil palm, there is a need for the estate to amend the land title reflecting the actual planting material planted on the land.

Close-out evidence: Closing of Major CAR: The company has taken immediate action to initiate the process for transfer of condition from Rubber to Oil Palm. The process has been initiated on 25 November where the Land Management Department (LMD) has been assigned to execute the process which involves the meeting with the company’s Legal ad Secretarial Department and other government authorities such as Malaysian Company’s Commission, Land Office and State Government in particular the District Office. All in all, the above process will take more than 6 months and may last up to a year depending on the complexity of the process and application. As the company has taken their steps to apply for the amendment into the land title, the auditor is in agreement to close the Major CAR. Nevertheless, an Observation 26 will be issued to be verified in the subsequent year in term of the company’s progress of the above process.

22 4.4.1 Date Recorded> 19 Nov 15 Due Date> Next Surv Date Closed> dd MM yyyy

Non-Conformance: GP 9405A Page 100 of 113

CAR # Indicator CAR Detail

An implemented water management plan is not in place.

Objective Evidence: The current established Water Management Plan do not adequately include all information listed in RSPO Guidance.

Close-out evidence: Not Closed raised to Major 22

M23 5.2.1 Date Recorded> 19 Nov 15 Due Date> 18 Jan 16 Date Closed> 21 Dec 2015

Non-Conformance:

High Conservation Value (HCV) assessment that includes both the planted area itself and relevant wider landscape-level considerations (such as wildlife corridors) is not available.

Objective Evidence: The HCV Assessment performed dated 2008 is not updated in accordance with the latest methodology available at global and national level.

Close-out evidence: Closing of Major CAR: Following to the audit, the company has submitted a working plan for conducting and establishing a new HCV assessment. The audit team notes that the project is in progress and due to complete in Mid-2016 (June-July 2016). The audit team also observed that a stakeholder consultation for the formulization of the HCV Assessment will be conducted from 04 to 08 January 2016. With the above progress, the audit team is of the view to close the Major CAR. However an Observation 27 is issued for the finalized HCV assessment report to be verified next year.

24 5.2.4 Date Recorded> 19 Nov 15 Due Date> Next Surv Date Closed> 20/12/16

Non-Conformance:

Ongoing monitoring for the action plan is not available.

Objective Evidence: Ongoing monitoring report for current HCV Action Plan (Ref No: Action Plan HCV & Conservation Areas of Sume Darby Plantation Sdn Bhd) updated June 2015 is not clearly documented.

Close-out evidence:

During the surveillance audit it was noted that the ongoing monitoring report for current HCV Action Plan (Ref No: Action Plan HCV & Conservation Areas of Sume Darby Plantation Sdn Bhd) updated June 2015 is nowy documented.

25 6.1.2 Date Recorded> 19 Nov 15 Due Date> Next Surv Date Closed> 20/12/16

Non-Conformance:

The SIA has not been done with the participation of affected parties.

Objective Evidence: Sungei Baru & Salak Estate - the Stakeholder Meeting has not been participated by the Regulatory Government Agencies which responsible in enforcing rules and regulations pertaining to environmental, economic etc.

Close-out evidence: During the surveillance audit , it was noted that during the stakeholder meeting , evidence sighted that letter of invitation sent to invite the regulatory governmental agencies like DOE , DOSH etc

M26 6.13.1 Date Recorded> 19 Nov 15 Due Date> 18 Jan 16 Date Closed> 21 Dec 2015

Non-Conformance: GP 9405A Page 101 of 113

CAR # Indicator CAR Detail

A policy to respect human rights is not communicated to all levels of the workforce and operations (see criteria 1.2 and 2.1)

Objective Evidence: Despite the Human Rights Policy i.e. Social and Humanity Rights Policy has been established, the auditing team found that the policy is not duly communicated to the workers.

Close-out evidence: A briefing on human rights policy entitled Briefing on Social & Human Rights Policy has been conducted following to the audit on 01 December 2015 that is participated by all workers within the estates and mills. Evidences of the above briefing are forwarded to the audit team via email dated 16 December 2015.

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APPENDIX C: TIMEBOUND PLAN

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APPENDIX D: LIST OF STAKEHOLDERS CONTACTED AND COMPLAINT REPORT

Stakeholder Type of Issues raised Comments/Action Stakeholder Taken

Harvesters, Internal There is no issue highlighted by Training or explanation on direct sprayers, Stakeholders the internal stakeholders. contract employment need to be manurers, done by the management Mandores, staff, All accommodation and support HA, Gender provided by the estate Committee etc. management are in acceptable condition. Payment of salary has been made according to the agreement signed by the workers at the date of join. Legal documents (passport & working permit) are kept by the estate management to ensure the safeguard. Such documents are provided to the workers when they requested. There is a document signed by the workers to confirm that the workers are not forced to surrender their passport to the management. Interview with several workers found out that they did not fully aware on paid leave, insurance, travelling expenses, funeral expenses, annual attendance, medical leave and etc stated in the direct contract of employment. NUPW Chairman Internal On being Union members and its Workers should not be force to and secretary Stakeholder benefit. be union members New workers – whether they should be members Management and Union Sua Betong Internal Modules of training for new Translator available Training Centre Stakeholder workers . representative Language barrier

SGS RSPO PROGRAM Doc. Number: GP 9405A

(Associated Document) Doc. Version date: 7th June 2016 Page: 106 of 113 Issue: 02

RE: PT SGS Auditor comments to the Complain letter about Tampin Linggi Estate Sime Darby

Auditors involved : 1) James S H Ong , Lead Auditor 2) Abdullah Din, CoC Program Manger 3) Dayang Suhanie Khalid

Date : 21 /12/16

Letter to RSPO Comments from auditor ‘Using many-many Volgor works No vulgar words heard when interview with workers, mandores, field conductor, Asst, or Manager. Cheating there salaries Payslip sighted , interview with workers did not raise such issues , Payslip include Name , Passport No. employment number etc , ‘Pendapatan, Potongan, caruman , butir –butir Hasil , days work , days absent , days off etc Worked more than 8 hours but no get OT Working hours abided , workers even complain no overtime . Company has an overtime record book . Talking bad about there country Interview with workers , mandores, field conductor, Asst, or Manager show otherwise The manager of this estate , always fucking better go Interview with Manager , Sharin b Luqman said otherwise. Interview with workers show that the back your country manager did not say such things Never take care there health Hospital assistant available. Clinic available Interview with workers no issue. Mandore holds a first aid kit Residence of this Estate quarters are not clean Yes that may be true especially when you enter some of the houses. However Auditor has been considered this issues in indicator 6.5.3 When heavy rain , flooded , House leaking No rain during audit , however they may be some leaking. Auditor has been considered this issues in indicator 6.3.1 and 6.5.3 Mangement make forein workers as roots (Roots ) – slaves ? No such issue . No chains . Workers free to go out and even run away if they decide. There is no evidence that foreign workers were roots or slavery. So many more problem here si Yes there are problems. Lack of communication/meeting between management and workers.

SGS services are rendered in accordance with the applicable SGS General Conditions of Service accessible at http://www.sgs.com/en/Terms-and-Conditions.aspx

Additional Social Question by SGS MY Management passed to RSPO auditor during the RSPO audit for the issue at Tampin Linggi Estate

Information obtained from the audit at Tampin Linggi Estate , Sime Darby Plantation Date 21 December 2016 Are you paid on time? Workers paid within 7 th of the following month and Staff are paid by HQ on 25 th within the month

Do you receive monthly pay slip? Yes, Payslip sighted during audit. The payment bank in to their account. Do you know the monthly deduction Yes , monthly deduction stated from your salary and what are they - deduction are for: for? - a) water supply RM5 ( estate subsidise any charges above RM5 ) Electricity : based on meter ( estate subsidise )

Advance: Mosque : rm2 and Temple fund ( depending on the worker request ) For Union members: 8+3 (foreign workers)

If you have done something wrong, No is your salary been deducted? 1st explanation letter, repeated offender: warning letter issued

In the file ‘ Surat Kesalahan’ sample was sighted for Nadesan Kuppusamy - 2 letters for not passing medical chit to field staff in charge but submitted direct to office - warning letter for attending morning muster , however was absent’ in the field during the working hours ( 12 pm ) he was also given chance to present his whereabouts ( letter sighted ) What is your salary/month or per Workers salary based on rates in the collective agreement ( CA ) between MAPA and NUPW/Sawawak Labour Ordinance hour? . Latest CA agreement 21/11/16 sighted and stated under Category I: RM38.46

Rm38.46 x 26 working days What is your working hours like? Workers working hours 6;30 – 11, 11-11:30 Rest, 11:30 – 2:30 . On Friday, Muslim comes back early : 12:30 for prayers

Staff : 6;30 – 7;30, 7:30 – 8 Breakfast , 8 – 2:30 , OT 4:30 – 7:30 Rest day : Sunday

Staff and workers overtime recorded in the Overtime file

DO you need to work OT? If yes, Overtime records sighted. GP 9405A Page 108 of 113 how many hours per days? Workers interviewed commented that nowadays no overtime given. Indian workers reported that during recruitment they

are promised a certain amount , however after working a few months they realised that the amount is only ½ the amount .

Overtime is decided by the management for overdue operation e.g harvesting , manuring etc.

For manuring , standard is 20 bags / manday or RM38.46 So if the worker apply extra bag he will be paid RM38.36/20 bags = RM2 ( sighted for worker Faruk , 21/12/16 where he applied 21 bags )

The ratio worker / ha is as industry standard 185 workers / 1864 ha which is about 1:10 ha Are you free to take leave after Yes , workers are free to go to the nearest town, Rantau. working hours? If not, please explain The management for security purposes , will require the worker to record/report of their outgoing .

No ‘curfew ‘ on when to come back to estate .

Salary is paid into workers banking account, Maybank ( Port Dickson ) and BSN ( Rantau Town ) Whom do you report to? They report to the respective mandore .

Mandore report to staff / field conductor .

Management Team for Tampin Linggi sighted , I manager , 2 Asst , 1 admin Officer + admin staff (3) , FC ( 4 ) , mandores ( 4) , Medical Assistant ( 1 ) .

for Safety , Mr Devantherao, , ESH Executive for NS region .

Social : Manager assisted by Asst Affandi and Amirul Is your superior treat you well? If Interview with spray operators, Manurers, mandores , asst show that superior do not use physical punishment or use of not, can you please elaborate? abusive language for wrong doing .

Interview with management personnel show that they do not have ‘superiority complex’.

Are you subject to scolding with Interview with workers report no such issues. harsh word, vulgar words and etc. by the Estate Manager? If yes, Communicate with the manager and their assistant show that they did not use any vulgar words during the course of please help to elaborate the type of communication . harsh treatment and scolding from him

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If you are sick, is there any medical Yes , TLE has a medical assistant to dispense medicine as well as to provide medical leave ( surat cuti ) if required. assistance provided by the Interview with workers confirm this. company? Clinic? Hospital? Etc. Mandores are provided a first aid kit for minor incidences during field operation.

The clinic is open till 2:30 pm.

MA stays in Rantau Town .

For emergency , the estate has a van to send workers to the nearest hospital in Port Dickson

Medical surveillance for spray operators , workshop, Check the site/hostel provided. During the audit it was not raining and as a result we were unable to verify about leaking roof however housing visited Check the condition in terms of showed that leaking is minimal . safety, health and environment However , there is a possibility of roof leaking as one house we not that they have empty containers . condition. Ask the employee about emergency situation such as flood, No flood issues or landslide. land slide etc. Is the area prone to flood? However we noticed the following: a) Missing window panes b) Frequency of inspection not as per required by the Minimum Housing Standard c) Stagnant water in the drains d) Possible requirement of fogging conducted ( for mosquito control ) e) Repairs ( toilet, doors , etc ) not done

Annual Fire fighting training conducted .

Budget For the Asbestos roofing, in their MPlan 17/18 – they have budgeted to replace 24 units of value RM175,000

They plan to replace in phase

Worker Manning Report Monthly Reports the workers abscond/ run away sighted From July – Nov 2016, there were 3 incidences in July and 2 in Nov 2016

Reason: suspected follow friends to work in other place/estate.

3 Indonesian and 2 Bangladesh Union : non-Union ratio As of Nov 2016 the ratio is 56:146

1) This estate has a union. Upon interview with the union representative, it was noted that he commented that the GP 9405A Page 110 of 113

management has not encourage new workers to become union members. But when I asked him on the benefit of being a union , he kept repeating on the issue of payout in case of any accident . no other benefits e.g housing , work rate, etc There were no records of union meetings. When I interviewed the foreign workers on the benefit of being a member , they do not see any significant benefit. 2) There may be some union membership drive where a possible commission is provided to the union secretary 3) To be a member , a photocopied MAPA/ NUPW form is filled . The forms has no running number 4) Workers have reported that the union representative has forged their signature prior to enrolment of NUPW member. 5) The management hold the deduction of NUPW fees for new foreign workers prior to consent from other workers. The management ask for thumbprint instead of signature to be filled in the MAPA/NUPW form. 6) Therefore, the Union representative claim that the management is not encouraging new workers to become union members.

Employee consultative Comittee Due to the presence of the Union , the estate does not have a ECC having representatives for the non-union foreign meeting workers. According to the Estate, creation of such a committee will mean that the union is not playing it’s role and will result in union members leaving the union

Passport / letter of consent 4 Indian workers letter of consent sighted - Sarkar Supada - Das Bhajan -Roy Prasnejit - Mondal Rakesh

Passport was not at estate as it has been sent to Sime Darby HQ for Insurance process TLE recived letter from Sime Darby Kamaruddin Harun, HR Dept, HR Upstream & Workforce Mngt Unit , WMC , Sua Betong , to remind estate to submit new worker passport before 9 Nov 2016 for endorsement purposes . TLE sent 10 passports Nationality / Agent ( Mithiran ( Indian ) ) New worker records a) Photocopy passport b) Sijil Kehadiran ‘ Kursus Induksi Pekerja Asing ‘ c) Borang Penyerahan Passport d) Maklumat pekerja e) Letter of employment ( lacking appendix 1& 2 ) – signed by worker New workers provided on reception the following: a) Blanket b) Bedsheet c) Fork & Spoon d) Dinner plate e) Ice Bowl f) Mug & Glass GP 9405A Page 111 of 113

g) Pail

a) They are also eligible for RM150 arrival allowance advance b) Food subsidy 5 kg rice and 5 kg cooking oil ( every 2 months ) c) Prepaid starter pack for mobile phone upon arrival Social meeting Every morning , estate will conduct safety briefing and asked whether there are any issues raised . - daily report book sighted Aduan / Grievance Estate provide form and complain box located at the office for submission of complaint Records kept in the ‘Complaint Book ‘ that records the date of complain as well as the action record Another book . Response book ‘ to record the management response to the complaint

Staff and management handling They have attended internal social training conducted by PSQM, and other department social issues

Staff performance KPI rating done annually by the management

Letter of employment ( in English ) a) Duration b) Place of work c) Salary d) Medical e) Accomodation f) Compliance g) FWCS h) Employment cost i) Income tax ( for local ) j) Public Holiday k) Annual Leave l) Unpaid Vacation Leave m) Transportation n) Equipment o) Termination of service p) Safety and Health q) Other terms and condition

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SUMMARY Comments on Tampin Linggi Estate : Complaint Letter dated 1 Nov 2016 on Tampin The audit team has performed an investigation via a social compliance interview with workers and/or group of workers Linggi Estate from from this estate (incl. relevant records and communication evidences) in respond to a complaint letter dated 1 Nov 2016 RSPO filed to RSPO by an anonymous personnel. The audit team also interviewed the Estate Manager and related personnel and concluded the below: A) Pay 1) Workers Salary paid on before the 7 th . 2) Payslip given to the workers 3) Deduction and the number of days work , recorded 4) Working hours recorded 5) Complain of no overtime 6) Complain that they are receiving ½ of what they were promised in India

B) Management 1) Estate Manager and staff use of vulgar words not apparent. 2) Upon mistake done, mandore and staff will correct the workers on-site or retraining provided. 3) Interview with workers show confirm the above action 4) Workers are free to travel to the nearby town however for security purposes they need to report to the management / security 5) No curfew

C) Health 1) HA and clinic available 2) For emergency , transport will be provided to sent to nearest government hospital 3) Medical surveillance provided annually to specific operations e.g spray operators

D) Housing 1) Housing provided and not crowded . 2) However , repairs and inspection frequency is needed 3) Asbestos roofing phase out in stages

E) New workers 1) Will undergo an orientation GP 9405A Page 113 of 113

2) Will be provided basic housing items 3) House sharing will be with their own nationality

F) Union 1) Role of the union is questioned as they do not seem to be any significant benefit 2) If the union is not playing its role , the management should have establish a ECC committee to exercise the role to look into the welfare of the workers

Based on the evidences obtained as described above, the audit team would like to conclude that:

There are issues on housing and the welfare issues that need to be addressed by the Tampin Linggi Management if they are not voice out by the union/non union members.

However it does not have the intensity as presented by the complainant