Malaysian Timber Certification Doc. Number: AD 34-02 Scheme: MC&I (Natural Forest)

(Associated Documents) Version Date: 01 February 2013 Page: 1 of 15

MALAYSIAN TIMBER CERTIFICATION SCHEME

PUBLIC SUMMARY OF RECERTIFICATION AUDIT OF FOREST MANAGEMENT UNIT AGAINST THE REQUIREMENTS OF MC&I (NATURAL FOREST)

Public Summary Date: 18 May 2013

Project Number: MY02661

Client: Terengganu State Forestry Department

Web Page: http://trgforestry.terengganu.gov.my/ Jabatan Perhutanan Negeri Terengganu Tingkat 8, Wisma Negeri Address: 20200 Terengganu

Country: Malaysia

Certificate Number. SGS-MTCS/FM-0103 Certificate Type: Malaysian Timber Certification Scheme

st st Date of Issue: 1 April 2013 Date of Expiry: 1 April 2016

Forest Zone: Tropical

Scope: Forest Management of 516,696.50 ha of permanent reserve forest in Terengganu State for the production of timber Total Certified Area: 516,696.50 ha (excluding the PRF area planted with forest plantations in FR and construction of second hydro electric dam within Tembat and Petuang FRs amounting to 22,536 ha) Contact Person: Tuan Haji Azmi bin Nordin - State Director of Forestry

Tel: +6(09)-6222 444

Fax +6(09)-623 6552

Email: [email protected] / [email protected]

Recertification Audit 09 – 13 Sept 2012 Date:

Audit Team: Abdul Haye Semail (Lead Auditor) Abdullah Din (Auditor) Rick Gregory (Auditor) Mohd Faisal Jaafar (Auditor)

SGS (Malaysia) Sdn. Bhd., No.26, Jalan Anggerik Vanilla 31/93, Kota Kemuning, 40460 Shah Alam, Selangor, MALAYSIA CONTACT PERSON: Abdul Haye Semail - Tel: +6 (03)5121 2320 - Fax: +6 (03)5122 5927 AD 34-02 Page 2 of 15

INTRODUCTION

The Terengganu Forest Management Unit (FMU) has been certified under the Malaysian Timber Certification Scheme (MTCS) since 2001; first under the Malaysian Criteria, Indicators, Activities and Standards of Performance (MC&I) for Forest Management Certification or in short MC&I(2001) and thereafter under the Malaysian Criteria and Indicators for Forest Management Certification or in short [MC&I(2002)] .

The Terengganu FMU managed by the Terengganu State Forestry Department was issued with a Certificate of Forest Management (SGS/MTCS/FM-002) against the requirements of the MC&I(2002) after a Stage 2 Audit which was conducted in November 2009. The Certificate issued is valid for three years from 01 April 2010 to 31 March 2013. Following the Surveillance 02 Audit that was conducted in 2011, the FMU has to undergo a recertification audit which was conducted on 09-13 September 2012. In line with the implementation of the transition plan from the use of MC&I(2002) to MC&I(Natural Forest), the recertification audit included the new revised MC&I(Natural Forest) in its audit scope. However any deviation from the new aspects in the MC&I(Natural Forest) as compared to the MC&I(2002) were raised as “observations” and not “non-conformity”. These observations were subsequently evaluated and classified as “minor or major non-compliances” by the CB on 1 February 2013 based on evidences submitted by the FMU manager to address the various observations raised. This report provides a summary of the findings of the Recertification Audit.

With a total land area of 1,295,566 ha, the Terengganu FMU is located to the east coast of Peninsular Malaysia. There are a total of 42 Forest Reserves within the Terengganu FMU covering an area of 539,232.50 ha of Permanent Reserved Forests (PRF). In addition, a total of 260 ha have been proposed as PRF which is being managed in the same manner as the PRF. In terms of forest types, the total areas managed by the Terengganu FMU comprises of 524,180.50 ha of dry inland forest, 13,757 ha of peat swamp forest, 1,295 ha of mangrove forest, amounting to a total of 539,232.50 ha. There is also an area designated as National Park amounting to 77,507 ha that is a totally protected area which is not managed by the FMU and hence is not included in the scope of the certification. In addition, an area amounting to 33,000 ha has been designated as a stateland. Operations within such area carried out by the Terengganu Forestry Department are also not included in the scope of this audit. Logs produced from these sources are not certified and hence cannot enter the PEFC chain of custody system for forest products. Furthermore, although part of the PRF, operations within the following PRFs are also excluded from the scope:

• Plantation Forests – 3,860 ha (Merchang FR)

• Second Hydro Electric Dam – 18,676 ha (within Tembat and Petuang FRs)

In conjunction with the recertification audit, a one-month stakeholder consultation was conducted in June 2012. Unfortunately, no feedback or response was received from any of the stakeholders consulted. For this Recertification Audit, on-site consultations were also held with the staff of the Terengganu FMU, field workers of the contractors at the harvesting sites, as well as other stakeholders, i.e. government agencies and local communities including the Orang Asli.

AD 34-02 Page 3 of 15

SUMMARY OF FINDINGS OF RECERTIFICATION AUDIT

The Recertification Audit assessed the implementation of forest management practices in the Terengganu FMU against the requirements of the MC&I(2002) and MC&I(Natural Forest). The summary of the outstanding CARs closed-out and new CARs raised are listed in Annex 1 below.

RECERTIFICATION AUDIT Issues that were difficult to There is no significant changes in the management system of assess Terengganu FMU compared to those recorded during the Surveillance 2 Audit. Number of CARs closed Nine (9) Minor CARs closed Number of New CARs raised Seven (7) Minor CARs raised out of which three (3) are new CARs raised following the reclassification of Observations raised against the new MC&I(Natural Forest) Number of new Observations Six (6) Observations are raised out of which three (3) have been raised closed following evidence submitted by the FD on 1 February 2013. Certification Decision The Terengganu FMU be recertified as:  The management system is capable of ensuring that all of the requirements of the applicable standard(s) have been met over the whole forest area covered by the scope of the certification;  The certificate holder has demonstrated, subject to the specified corrective actions, that the described system of management is being implemented consistently over the whole forest area covered by the scope of the certification: and  The issues highlighted as Minor CARs must be adequately addressed and the adequacy of the actions taken need to be verified during the first surveillance visit to be conducted within 12 months from the date of recertification audit.

Malaysian Timber Certification Doc. Number: AD 34-02 Scheme: MC&I (Natural Forest)

(Associated Documents) Version Date: 01 February 2013 Page: 4 of 15

Annex 1

SUMMARY OF OUTSTANDING CORRECTIVE ACTION REQUESTS (CARS) CLOSED OUT AND NEW CARS AND OBSERVATIONS RAISED

Summary of CARs closed out (from Surveillance 02 Audit) CAR No. Indicator Non-conformance Objective Evidence Close-out Evidence

011 6.5.2 Inconsistency in implementation Construction of water bars on skid trails is RIL guidelines entitled Guidelines for Reduced Impact of reduced/low impact logging to not consistently constructed to prevent soil Logging in Peninsular Malaysia (2003) are being enforced in minimize damage to the erosion and water runoff. the FMU. The combination of pre-logging preparation (tree environment. tagging, buffer zone demarcation), and environmental As of Surveillance 2 Audit: measures (skid trail guidelines, water bars, etc) are some of Verification during the Surveillance 2 Audit the key ways in which reduced impact logging is practiced found that the skid trails and water bars within the FMU. have been constructed according to the RIL On the ground, the audit team observed that water bars have guidelines. But, the effectiveness of the been adequately constructed with a minimum height of 01 water bars constructed need further feet as seen in series of skid trails within the active logging improvement as shown during the visit at areas visited in Compartment 98 of Gunong Tebu FR and HS Cherul where the construction of water Compartment 94 of FR. bars is not properly constructed according to the RIL guidelines. Hence the Minor CAR Minor CAR closed remains outstanding. 013 7.3.1 The Forestry Department does Observations in the field and discussions During recertifcation audit, it is verified that training was not have a structured training with forest workers revealed that no proper conducted for rangers, foresters and forest workers employed programme for workers operating training assessments or programmes are in by logging contractors on RIL implementation and operation under the contractor. place. Forest workers do not have copy of and Directional Felling as follows: training certificate. . As of Surveillance 2 Audit: No. of Participants Surveillance 2 Audit findings showed that Training Date the Forestry Department have yet to Details Forestry Logging structure proper training programme for Department Contractors forest workers employed by the logging

SGS (Malaysia) Sdn. Bhd., No.26, Jalan Anggerik Vanilla 31/93, Kota Kemuning, 40460 Shah Alam, Selangor, MALAYSIA CONTACT PERSON: Abdul Haye Semail - Tel: +6 (03)5121 2320 - Fax: +6 (03)5122 5927 AD 34-02 Page 5 of 15

contractor although there are several 20 Training on the 17 19 trainings for forestry staff and forest February Implementation workers employed by the logging 2012 of Forest Road contractors that is scheduled to be Guidelines conducted in 2011 as follows: (Series No. 1) - Forest Road Guidelines - MC&I(2002) 21 Training on the 15 29 - Occupational Safety and Health, February Implementation and basic first aid training. 2012 of Forest Road - Handling of hazardous chemical in Guidelines operation area. (Series No. 2) 22 Training on the 17 34 February Implementation In addition, the training record indicated 2012 of Forest Road that there is one training that had been Guidelines conducted as follows: (Series No. 3) o “Bengkel Garis Panduan Jalan 7-10 May Training on the 9 32 Hutan Tahun 2010 ” for forest 2012 Directional Tree workers and contractors was Felling conducted on 17 February 2011, covering: attended by 67 participants. • Health and However, based on observations in the safety operation area, there is a need for a training requirements for forest workers and forestry staff on the during tree following fields: felling - Pengawas Hutan (incharge) – operations Technical knowledge on forest • operation and RIL. Procedures - Operation Leaders ( Kepala Hutan ) and – Technical, knowledge on forest techniques operation, safety and RIL for chainsaw - Bulldozer operators – Forest road maintenance specification and skidding. . - Chain saw operators – Directional

felling, safety and cutting technique. Minor CAR closed

In view of the above observations and taking into consideration the FMU’s effort to provide and schedule the training for forestry staff and forest workers employed by the logging contractors, the Minor CAR -

AD 34-02 Page 6 of 15

013 remains outstanding .

014 5.5.2 Inadequate maintenance and/or Observations in Compartment 4 HS Cherul, In all harvesting areas visited, sensitive areas are clearly enhancement of forest services found that the water courses are blocked marked where harvesting is prohibited includes swamp or and watercourses. with soil and forest debris which resulted in waterlogged area or areas where rare, threatened and significant water-ponding endangered species are found. Further verification within such areas also confirmed that there is no evidence of water- ponding caused by fallen debris as well as soil. Minor CAR closed 015 6.5.3 Inadequate implementation of Log landings and skid trails are not The forest road lay-out and its construction are guided by the guidelines for forest road lay-out constructed according to the approved plan newly developed Guidelines for Forest Road, 2010 that and construction, including log in Compartment 30 HS Cherul. superseded the existing Guidelines for Forest Road landings and drainage Specification (Feeder Roads and Skid Trails) for Peninsular requirements. Malaysia, 1999. The other relevant guideline is the ‘Guidelines for Reduced Impact Logging in Peninsular Malaysia, 2003’. Both documents contain prescriptive and graphic instruction for the construction of feeder roads, log landings and skid trails as well as procedures for mitigating soil erosion during harvesting operation. In all harvesting areas visited during the Recertification Audit, the audit team observed proper construction of forest roads with proper camber, side drainage, slope works, logyard etc. Mitigation measures such as silt traps and sump are observed. Water bars are consistently constructed along skid trails located on steep slopes to slow down and divert surface runoffs. Furthermore, subsequent changes to the road construction are approved by the State Forestry Department and updated on maps. In Jengai FR, alteration of the logging road (JT#8) reduced the total length of the logging road by 120 meters as the existing road alignment is used that is accompanied by an approval letter from DOF as well as an updated map to reflect the changes. Minor CAR closed 016 6.5.4 Insufficient implementation of Based on observations made at LP 5/6 in During the recertification audit, it is observed that the buffer guidelines for conservation of Compartment 29 and JT 6 Compartment 30 zones are not intruded and there is proper protection of buffer buffer strips along streams and HS Cherul, there are violations of buffer zones from logging activities. Trees are observed to be felled rivers. zones whereby trees were felled into and at least 20-30 meters from river corridors as observed in the forest debris pushed into the buffer zone active areas within the Jerangau FR. In addition, RIL through during road cleaning activities. the use of the logfisher to extract logs in Compartment 21 of Telemong FR, has resulted in the reduction of damage to the

AD 34-02 Page 7 of 15

residual stands. Minor CAR closed 017 8.1.1 Inadequate implementation of Monitoring using Borang A – D and monthly Currently, monitoring on the various elements of forest regulatory monitoring in reporting for Compartment 29 and 30 HS harvesting operations is made via the use of Borang A accordance with relevant national Cherul are not conducted in a timely (Infrastructure ), B ( Forest Harvesting ), C ( Environment ) and and regional guidelines of the manner. D ( Output ). Monitoring on social elements is done through Forestry Departments. Form E ‘Panduan Maklumat/Borang kajian Impak Sosial dan Alam Sekitar Dalam Sektor Pembalakan’ which is compiled before and after harvesting of each license area. Records of the monitoring activities described above are maintained and kept for each license area. Minor CAR closed 018 6.2.3 No documented evidence on the Records of meetings or collaboration The State Forestry Department cooperated with government existence of cooperation between between the Terengganu FMU and agencies such as the police and the Department of Wildlife forest managers and conservation conservation organizations and regulatory and National Parks (PERHILITAN) to enforce measures to organizations and regulatory authorities are not available. curtail illegal wildlife trafficking from national parks and forest authorities in implementing reserves. conservation and management activities. In addition, record of meeting of collaboration and communication with the relevant agencies and conservation organisations such as WWF and MNS are maintained by the FMU. Interview with State Deputy Director from PERHILITAN confirmed the good collaboration between the PERHILITAN and the State Forestry Department. Minor CAR closed 019 6.3.3 No documented evidence of forest No documented evidence of planning for Most of the forest reserves in the Terengganu FMU comprise harvesting taking into biological corridor and buffer zones for of large contiguous forested areas that by itself supports a consideration the need for wildlife. variety of species including large mammals. The National biological corridors and buffer Park is also surrounded by the PRF, therefore the need of zones for wildlife. biological corridors is not a major concern. In the licensed areas, buffer zones are created along streams and rivers, which also function as wildlife corridor within the harvested area. Minor CAR closed 020 9.1.1 Assessment of HCVFs No evidence of assessment, identification Description of HCVF in Terengganu FMU is tabulated in the inadequately conducted in and demarcation of HCVF. 10-year FMP and in the Macro EIA report covering the accordance within relevant following areas: national and regional legal and regulatory frameworks. • Giant Chengal Tree – Forest Reserve;

AD 34-02 Page 8 of 15

• Keruing Sarawak Tree Plot – Jerangau Forest Reserve; and

• Sal Tree Plot – Jerangau Forest Reserve

Evaluation of HCVF had been conducted internally and based on the evaluation conducted the HCVF areas have been classified into four categories defined by the MC&I(Natural Forest) Standard. Map indicating the HCVF areas identified has been marked and recorded within the 10-year FMP.

Verification made during the field visit to the HCVF area in Compartment 10, Jerangau Forest Reserve confirmed that the area designated for Dipterocarpus sarawakensis (Keruing Sarawak ) has been adequately marked with proper signages. In addition, clear boundary is evident along the border of the HCVF area.

Minor CAR closed

Summary of new CARs raised during Recertification Audit [MC&I(Natural Forest)]

CAR No. Indicator Non-conformance Objective Evidence/Close-out Evidence Status

01 4.2.5 Lack of demarcation of hazardous The chemical and hazardous materials (herbicides) are not New Minor CAR raised during areas and provision of guidelines for properly stored at the contractor’s store at Taman Recertification Audit storage and handling of hazardous Reakreasi Lata Tembakah . materials. Evidence as of 01 February 2013:

A circular letter issued by the Forestry Department to all contractors employed within the FMU for maintenance job in Recreational Forest is submitted as evidence by the FMU. The letter Ref: PHNT 100/48/1/79 dated 17 September 2012 prohibits the use of pesticides for all maintenance jobs in the Recreational Forest within the FMU. The audit team noted the close-out evidence submitted by the FMU. Nevertheless, the audit team is of the view that the CAR raised is related to implementation and hence agreed to maintain the Minor CAR to ensure compliance at

AD 34-02 Page 9 of 15

the next surveillance audit.

02 6.3.1 Post-harvest natural regeneration The Post-F Inventory is not conducted according to the New Minor CAR raised during inventory and measures to supplement SMS requirement i.e. 2-5 years after logging, in. Recertification Audit natural regeneration in the FMU is Terengganu Utara and Barat Forest Districts. Evidence as found to be out of plan. of 01 February 2013:

The audit team examined all the evidences submitted during the closing meeting of the audit on 13 September 2012. Following the audit, the FMU submitted further evidences in the form of the following letters from the Terengganu Selatan Forest District Office to State Forestry Department Office indicating the Post-F Inventories that has been conducted within the District Forest Office: Letter Ref & Date PRF Compartment

(79) PHDTS 4/7/Jld 5 Bukit 1 dated 23 July 2012 Kambing FR (6) PHDTS 4/7/ Jld 5 Bukit Gong 1 dated 6 September FR 2012 (76) PHDTS 4/7/ Jld 5 Sungai 48 dated 1 January 2012 Nipah FR (3) PHDTS 4/7/ Jld 5 Rambai 2 SJ 3 dated 1 January Daun FR 2012 (3) PHDTS 4/7/ Jld 5 Bukit Bauk 43 SJ 3 dated 1 January FR 2012 The audit team noted that all of the evidences submitted are from the Terengganu Selatan Forest District and none from Terengganu Utara and Terengganu Barat Forest Districts. The audit team therefore maintained the Minor CAR raised to be verified at the next surveillance audit.

03 8.1.2 Inconsistencies in the implementation The Maklumat Kajian Impak Sosial Dalam Sektor New Minor CAR raised during of Social Impact Monitoring Form in Pembalakan (Information on Social Impact Evaluation in Recertification Audit accordance with guidelines of the the Logging Sector) is not consistently implemented Forestry Department.

AD 34-02 Page 10 of 15

throughout theFMU based on visits to the following license areas:

• L2 020/2012 – Compt. 21, Telemong FR;

• L1 001/2012 – Compt. 98, Gunung Tebu FR;

• L3 016/2012 – Compt. 1, Rasau FR – inadequate respondance

Evidence as of 01 February 2013:

The FMU has submitted evidence in the form of a series of SIA forms that are used in the above-mentioned harvesting licenses. No other objective evidence are submitted representing other harvesting licenses. The audit team maintained the Minor CAR raised to be verified during the next surveillance audit.

04 8.3.1 Harvesting Code not included in the Five RPs (RP no. A 069715, A069716, A 069717, A New Minor CAR raised during licence number on Removal Passes 069718 and A 069719) issued by the BPH Pasir Akar had Recertification Audit (RPs). omitted the "HS" code for the harvesting licence that indicates the logs extracted are sourced from forest reserve.

Evidence as of 01 February 2013:

The FMU has submitted an Action plan indicating its commitment to replace the practice of hand-written license no. with a stamped license no. The implementation of the above-action plan needs to be verified at the next surveillance audit. Hence, the Minor CAR is maintained.

05 4.2.1 Inadequate dissemination of up-to-date Non-compliance of Guidelines on Occupational Safety and New Minor CAR raised during information on all applicable laws Health in Logging Operations: Recertification Audit and/or regulations covering occupational safety and health of forest • Lack of risk assessment of forest operation; workers • No emergency procedure established at the logging camp; • Contractors are not trained on emergency first aid and use of first aid kits; • Chainsaw safety features inadequate; and

AD 34-02 Page 11 of 15

• Logging camps are not established based on prescribed specifications: 1. Distance between diesel skid tank to the nearest river should be more than 100 meters; 2. Kitchen drainage should be covered for at least 15 meters; and 3. Genset must be located at least 100m from the nearest river. Evidence as of 01 February 2013:

The FMU has submitted the following evidence: • General Risk Analysis for Forest Operations – the risk analysis is too general, without proper date mentioned within the analysis; • Emergency Procedure at logging camp – indicating proper procedures to be used with phone contact numbers should an emergency occur; • Training Plan which includes First Aid Training to be conducted in 2013 – to-date, no training has been conducted; • General Safety Instruction specifically for Chainsaw – a document containing chainsaw handling procedures and safety instructions. However, the document lacked an approval date; and • Photos of corrective action taken for the visited active harvesting area in Compt 94, Jerangau FR. The observation issued is reclassified as Minor CAR. New Minor CAR raised during 06 4.3.3 The right of workers to benefits and There is no formal letter stipulating the rights and benefits Recertification Audit protection is not assured under of the between forest workers and forest contractor. applicable laws and/or regulations. Evidence as of 01 February 2013: The template/sample letter between forest workers and forest contractor is submitted by the FMU. Unfortunately, there is no actual letter submitted.

Based on above observation, the auditing team is of the

AD 34-02 Page 12 of 15

view to reclassify the Observation to Minor CAR.

New Minor CAR raised during 07 5.3.3 Regular training is not conducted for RIL trainings are conducted by the FD. However Recertification Audit the staff on techniques of reduced- implementation on the ground indicated inadequate impact logging. understanding of the implementation of RIL guidelines related to cross-drains, water bars, directional felling, and elevation of forest roads. Verification of training records v/s contractor’s employee records indicated that trained personnel are not implementing the RIL.

Evidence as of 01 February 2013:

The FMU has submitted the training plan for RIL for logging contractors for 2013 indicating that the training will be conducted on 25 to 27 February 2013. The audit team is not able to verify the training to be conducted and hence decided to reclassify the Observation raised as a Minor CAR.

AD 34-02 Page 13 of 15

Summary of Observations raised [MC&I(Natural Forest)]

CAR No. Indicator Observation Follow-up Evidence Status

01 4.2.2 The Safety and Health Committee organization chart available Evidence as of 01 February 2013: Observation raised at the FMU has not been updated. The personnel which is on during the chart is no longer in-charge of safety and health issue in Recertification the Terengganu FMU. Close-out evidence in the form of updated closed Organization Chart of the Safety and Health Committee is made available to the auditing team. The auditing team is of the view that the evidence submitted is sufficient to close the observation and hence the Observation 01 is closed. 02 4.2.3 Machinery maintenance records are not made available at the New Observation logging camp. raised during Recertification Chainsaws are not kept in safe working condition. Evidence as of 01 February 2013: The FMU has submitted the following evidence: • Template of Machinery Maintenance Form to be used in the logging camps –Operational Manual used by KPKKT. The audit team determined that the evidences submitted are not sufficient to close the observation and hence decided to maintain Observation 02 to be verified at the next surveillance audit. 03 5.3.1 Excessive skid trail clearing and joining of two skid trails New Observation together resulting in increased damage to forest stand as raised during observed in License No. L1 001/2012 (HS) Compartment 98. Recertification Evidence as of 01 February 2013:

• Instruction to stop forest harvesting for License No. L 1 001/2012 [Ref No.: PHDTU. 4/2/12/8 SJ 20] dated 01 January 2013 as well as official letter from the State Forestry Department Ref No.: (23)

AD 34-02 Page 14 of 15

PHNT.400/7/1/1233/sk.2 dated 21 January 2013 and Ref No.: (24) PHNT.400/7/1/1233/sk.2 dated 22 January 2013 indicating the logging contractor has been fined RM 3,000 for the offence. The observation raised is maintained to ensure continued compliance at the next surveillance audit. 04 6.2.3 Interview with State Deputy Director of PERHILITAN indicated The FMU has taken action to supply the Observation raised insufficient information sharing between the FD and PERHILITAN with the database indicating the during PERHILITAN in particular in logging operations area. harvesting locations for 2012 through an official Recertification PERHILITAN requested to be informed of logging activities to letter Ref No.: (40) PHDTS 64/1 dated 03 December closed be conducted especially in area where there is an evidence of 2012. In addition, the FMU also has taken action to prime wildlife roaming in the area. This issue is raised due to engage PERHILITAN to provide briefing to the the significant number of complaints received from villagers logging contractors prior to harvesting operations. A and plantation owners (94 and 49 complaints received in 2011 sample letter bearing reference (56) PHDTS 7/2/73 and 2012 respectively). dated 09 October 2012 is submitted to the audit team. 05 6.7.1 Non-organic waste and used oil containers are found disposed Photos of corrective action taken are for license area Observation raised in an environmentally inappropriate and illegal manner. No. L2 020/2012 are submitted by the FMU. In during addition, the requirements for scheduled waste Recertification Evidences of non-organic waste disposed at the landfill at disposal have been communicated to logging closed Workers Camp (L2020/12 KPT 21 HS Telemong). contractors. The observation raised is closed. 06 8.1.1 Poor maintenance of access roads outside the license areas New Observation are identified during an internal DOF audit but not followed raised during through as observed in L 1001/2012 (HS) Compartment 98. Recertification Monitoring Form (Borang C) does not covers road outside licensed compartment. Evidence as of 01 February 2013: No evidence submitted and hence the observation raised be maintained.

Malaysian Timber Certification Doc. Number: AD 34-02 Scheme: MC&I (Natural Forest) (Associated Documents) Version Date: 01 February 2013 Page: 15 of 15

An nex 2

Forest Reserves in Terengganu FMU

1. Pelagat 22. Besul 2.Hulu Besut 23. Bukit Bauk 3.Gunung tebu 24. Sg. Pimpin 4. Hulu Setiu 25. Jengai 5. Hulu Nerus 26. Rasau Kerteh 6. Pak Kancil 27. Bukit Gong 7. Belara 28. Kuala Paka 8. Bukit Terendak 29. Rambai Daun 9. Bukit Kesing 30. Bukit Labuhan 10. Bukit Mual 31. Bukit Palus 11. Mercang 32. Pulau Tinggol 12.Jambu Bongkok 33. Bukit Panjang 13. Petuang 34. Sg. Mekelok 14. Tembat 35. Bukit Sai 15. Hulu Telemong 36. Kuala Kemaman 16.Hulu Terengganu 37. Bukit Jemalang 17. Hulu Terengganu (T)38. Bukit Kambing 18. Pulau Redang 39. Sg. Nipah 19. Jerangau 40. Bukit Bandi 20. Pasir Raja (B) 41. Cerul 21. Besul (T) 42. *

SGS (Malaysia) Sdn. Bhd., Unit 10-1, 10 th Floor Bangunan Malaysia Re,No.17 Lorong Dungun, Damansara Heights, 50490 Kuala Lumpur, Malaysia CONTACT PERSON: Abdul Haye Semail - Tel: +6 (03)2095 9200 - Fax: +6 (03)2093 8202