PT. MUTUAGUNG LESTARI ASSESSMENT REPORT

Roundtable on Sustainable Palm Oil Certification R S P O

[ ]Stage-1 [√] Stage-2 [ ] Surveillance [ ] Re-Assessment Plantation Management/Owner : Felda Global Ventures - FELDA Plantation Name : Besout Mill Location : Sungkai, Perak, Malaysia

Certificate Code : MUTU-RSPO/048 Date of certificate issue : 22 December 2014 Date of expiry of certificate : 21 December 2019

Assessment PT. Mutuagung Lestari Review Approve Assessment Date Auditor by by Taufik Margani, Octo HPN ST-1 8 August 2014 Nainggolan Ganapathy Tony Mohan Thavarajah, Taufik Margani, Ramasamy Arifiarachman ST-2 11-15 August 2014 Octo HPN Nainggolan, Bukti Bagja

Assessment Approved by MUTUAGUNG LESTARI on:

ST-2 22 December 2014

Mutuagung Lestari • Raya Bogor Km 33,5 Number 19 • Cimanggis • Depok 16953• Indonesia Telephone (+62) (21) 8740202 • Fax (+62) (21) 87740745/6 Email : [email protected] ● www.mutucertification.com MUTU Certification • Accredited by Accreditation Services International on March 12th, 2014

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TABLE OF CONTENT FIGURE Figure 1. Location Map of Besout Mill 3 Figure 2.a. Operational Map of Besout 1 Estate 4 Figure 2.b Operational Map of Besout 1 Peneroka complex 5 Figure 3.a. Operational Map of Besout 2 Estate 6 Figure 3.b Operational Map of Besout 2 Peneroka complex 7 Figure 4.a. Operational Map of Besout 3 Estate 8 Figure 4.b Operational Map of Besout 3 Peneroka complex 9 Figure 5.a. Operational Map of Besout 4 Estate 10 Figure 5.b Operational Map of Besout 4 Peneroka complex 11 Figure 6.a. Operational Map of Besout 5 Estate 12 Figure 6.b Operational Map of Besout 5 Peneroka complex 13 Figure 7. Operational Map of Besout 6 Estate 14 Figure 8. Operational Map of Besout 7 Estate 15

1.0 SCOPE of the SURVEILLANCE ASSESSMENT 1.1 National Interpretation Used 16 1.2 Organization Information 16 1.3 Type of Assessment 16 1.4 Location of Plantations, Mill and Area Statement 16 1.5 Description of Supply Base 17 1.6 Dates of Plantings and Cycles 19 1.7 Tonnage Certified 19 1.8 Other Certifications 20 1.9 Time-Bound Plan for Other Management Units 20 1.10 Progress of Associated Smallholders and Outgrowers for Certifiable Standard 23

2.0 ASSESSMENT PROCESS 2.1 Certification Body 24 2.2 Assessment Team 24 2.3 Assessment Methodology, Assessment Process and Locations of Assessment 23 2.4 Stakeholder Consultation and List of Stakeholders Contacted 26 2.5 Date of Next Surveillance Visit 26

3.0 ASSESSMENT FINDINGS 3.1 Summary of Assessment Report of the RSPO Certification 27 3.2 Summary of Assessment Report of Supply Chain Requirement 45 3.3 Conformity Checklist of Certificate and Logo Use 49 3.4 Summary of RSPO Partial Certification 50 3.5 Identification of Findings, Corrective Actions, Observations, Opportunity for Improvement and 52 Noteworthy Positive Components 3.6 Summary of Arising Issues from Public, Management and Auditor Responses 63

4.0 CERTIFIED ORGANIZATION’S ACKNOWLEDGEMENT OF INTERNAL RESPONSIBILITY 4.1 Formal Signing of Assessment Findings 65

APPENDICES 1. List of Stakeholders Contacted in the RSPO Certification Process 66 2. Assessment Program 67 3. Glossary 68

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Figure 1. Location Map of BESOUT MILL

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Figure 2.a. Operational Map of BESOUT 1 Estate

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Figure 2.b. Operational Map of BESOUT 1 Peneroka complex

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Figure 3.a. Operational Map of BESOUT 2 Estate

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Figure 3.b. Operational Map of BESOUT 2 Peneroka Complex

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Figure 4.a. Operational Map of BESOUT 3 Estate

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Figure 4.b. Operational Map of BESOUT 3 Peneroka complex

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Figure 5.a. Operational Map of BESOUT 4 Estate

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Figure 5.b. Operational Map of BESOUT 4 Peneroka complex

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Figure 6.a. Operational Map of BESOUT 5 Estate

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Figure 6.b. Operational Map of BESOUT 5 Peneroka complex

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Figure 7. Operational Map of BESOUT 6 Estate

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Figure 8. Operational Map of BESOUT 7 Estate

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1.0 SCOPE OF THE CERTIFICATION ASSESSMENT

1.1 National Interpretation Used National Interpretation, RSPO Principles and Criteria (P&C) for Sustainable Palm Oil Production, Malaysia National Interpretation - RSPO MY-NIWG, April 2008 including smallholder NI and RSPO Supply Chain Certification Standard November 2011 for CPO Mill.

1.2 Organization Information 1.2.1 Company name Felda Global Ventures – FELDA 1.2.2 Contact person Mr. Norazam Abdul Hameed 1.2.3 Company address and site address PSQM, Felda Global Ventures Plantations (M) Sdn Bhd Tingkat 8 Balai Felda, Jalan Gurney Satu, 54000 Kuala Lumpur, Malaysia 1.2.4 Telephone +603 – 2600 5349 1.2.5 Fax +603 – 2698 7816 1.2.6 E-mail [email protected]

1.2.7 Web page address www.felda.net.my 1.2.8 Company status Government 1.2.9 Management Representative who completed the application for certification Mr. Anthonius Sani 1.2.10 Registered as RSPO member 1-0013-04-000-00, 17 October 2004

1.3 Type of Assessment 1.3.1 Scope of Assessment Palm Oil Mill and supply base 1.3.2 Type of certificate Single 1.3.3 Company names listed in the certificate Felda Global Ventures – FELDA 1.3.4 Number of management unit Besout Mill, Besout 1Estate, Besout 2Estate, Besout 3 Estate, Besout 4 Estate, Besout 5 Estate, Besout 6 Estate, Besout 7 Estate

1.4 Locations of Mill, Plantations and Area Statement 1.4.1 Location of Mill GPS Name of Mill Location Latitude Longitude Kilang Sawit Besout, BESOUT 35600 Sungkai, 30 88’ 0.98” N 1010 27’ 67” E Perak

1.4.2 Location of Supply Base GPS Name of Supply Base Location Latitude Longitude

Ladang Felda Besout 06, FGVP BESOUT 06 3° 45’ 33” - 3° 48’ 11” N 101° 14’ 18” - 101° 18’ 00” E 35600 Sungkai. Perak Ladang Felda Besout 07, FGVP BESOUT 07 3° 47’ 34” - 3° 54’ 07” N 101° 14’ 18” - 101° 20’ 00” E 35600 Sungkai, Perak. SPO – 4006a.5 Page 16 Prepared by Mutuagung Lestari for BESOUT POM – Felda Global Ventures (FELDA)

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Felda Gunung Besout 01, BESOUT 01 3° 54’ 50” - 3° 51’ 30” N 101° 15’ 10” - 101° 17’ 40” E 35600 Sungkai, Perak Felda Gunung Besout 02, BESOUT 02 3° 49’ 16” - 3° 51’ 06” N 101° 14’ 45” - 101° 17’ 20” E 35600 Sungkai, Perak. Felda Gunung Besout 03, BESOUT 03 3° 51’ 30” - 3° 54’ 50” N 101° 14’ 30” - 101° 17’ 40” E 35600 Sungkai,, Perak Felda Gunung Besout 04, BESOUT 04 3° 46’ 30” - 3° 49’ 00” N 101° 17’ 40” - 101° 18’ 50” E 35600, Sungkai, Perak. Felda Gunung Besout 05, BESOUT 05 3° 42’ 45” - 3° 43’ 40” N 101° 18’ 14” - 101° 19’ 04” E 35600 Sungkai, Perak.

1.4.3 Tenure  State 8,076.61 Ha  Community (Peneroka) 4,171.37 Ha

1.4.4 Area Statement  Total area 12,247.98 Ha  Mature area 9,509.88 Ha  Immature area 2,208.15 Ha  Other plant 1.75 Ha  Main road 68.46 Ha  Nursery 21.21 Ha  Bushes 63.42 Ha  Airstrip 2.55 Ha  Low land 49.17 Ha  Drain 172.89 Ha  Empty area 1.33 Ha  Water reservoir 1.34 Ha  Buildings 0.37 Ha  Undeveloped land 63.54 Ha  Mill 5.00 Ha  HCV 0.00 Ha  Conservation Area - Buffer Zone 73.42 Ha - Hill area 5.50 Ha

1.5 Description of Supply Base 1.5.1 Description of Mill

FFB CPO Palm Kernel Capacity Processed Name of Mill (tones/ hour) (tonnes/ Out put Extraction Out put Extraction year) (tonnes) (%) (tonnes) (%)

BESOUT 60 222,230 44,153.96 19.87 12,959.74 5.83

*Source Production Data on August 2013 until July 2014

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1.5.2 Description of Certified Estate(s)

Supplied to Mill Total Area Planted Area FFB Yield Name of Estate(s) (Ha) (Ha) (tonnes/year) (tonnes/ha/year) FFB % (tonnes/year) FGVP BESOUT 06 2,384.90 2,094.45 32,572.63 15.55 32,572.63 14.66 FGVP BESOUT 07 3,313.80 3,079.30 35,879.24 11.65 31,631.62 14.23 BESOUT 01 (520 Peneroka) FTP (315 Peneroka) 1,309.93 1,309.93 Own Manage 43,009.14 20.15 43,009.14 19.35 Smallholder (205 824.43 824.43 Peneroka) BESOUT 02 (495 Peneroka) FELDA (277 Peneroka) 1,147.29 1,147.29 Own Manage 30,364.16 15.02 30,364.16 13.66 Smallholder (218 874.06 874.06 Peneroka) BESOUT 03 (271 Peneroka) FTP (37 Peneroka) 150.71 150.71 FELDA (83 Peneroka) 338.80 338.80 Own Manage 21,563.17 19.65 21,563.17 9.70 Smallholder (151 607.64 607.64 Peneroka) BESOUT 04 (215 Peneroka) FTP (29 Peneroka) 121.23 121.23 FELDA (122 Peneroka) 501.52 501.52 Own Manage 12,184.04 13.81 12,184.04 5.48 Smallholder (64 259.37 259.37 Peneroka) BESOUT 05 (102 Peneroka) FELDA (96 Peneroka) 385.30 385.30 Own Manage 4,435.41 10.84 4,435.41 2.00 Smallholder (6 24.00 24.00 Peneroka) TOTAL 12,242.98 11,718.03 180,007.79 15.36 175,760.17 79.09 *Source Production Data on August 2013 until July 2014 1.5.3 Smallholder(s) and other source Name of Supplied to Mill Member(s) Location source(s) FFB (tonnes/year) % DEALER Contractors Sungkai, Perak 39,149.60 17.62 RISDA ESTATE Growers Sungkai, Perak 866.94 0.39 Koperasi Smallholders Sungkai, Perak 2,444.60 1.10 (Besout 1-4) Cooperative Individual Persendirian Sungkai, Perak 834.05 0.38 smallholders TOTAL 43,295.19 19.48 *Source Production Data on August 2013 until July 2014 SPO – 4006a.5 Page 18 Prepared by Mutuagung Lestari for BESOUT POM – Felda Global Ventures (FELDA)

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1.5.4 Product categories FFB / CPO / PK

1.6 Year of Plantings and Cycles 1.6.1 Age profile of planted palms* Planting Hectarage (Ha) Year Besout.01 Besout.02 Besout.03 Besout.04 Besout.05 Besout.06 Besout.07 TOTAL 1985 ------788.25 788.25 1986 ------441.94 441.94 1988 ------617.72 617.72 1989 - - - - - 623.04 - 623.04 1990 - - - - - 190.97 - 190.97 1992 - - - - - 80.40 - 80.40 1998 - - - - - 13.64 - 13.64 2001 - - - - - 435.99 - 435.99 2002 1,339.60 1,342.19 839.57 - - - - 3,521.36 2009 794.76 - - 501.52 - 350.89 740.10 740.10 2010 - - - - 409.30 - - 409.30 2012 - 679.16 - 380.60 - - 356.21 1,415.97 2013 - - 257.58 - - 137.18 135.08 529.84 2014 - - - - - 262.34 - 262.34 TOTAL 2,134.36 2,021.35 1,097.15 882.12 409.30 2,094.45 3,079.30 11,718.03 1.6.2 New Planting area after January 2010 Ha

1.6.3 Planting Cycle 1st/2nd Cycle Years

1.7 Approximate Tonnage Certified 1.7.1 Past Annual Claim Certified Product Certificate Claim Actual certified product (tonnes/year) (tonnes/year)  FFB Production - -  CPO Production - -  Palm Kernel (PK) Production - - ** Certificate Claim will be verified during the next assessment (first Surveillance) 1.7.2 Claim Certified Tonnage of FFB Total Area Planted Area FFB Yield Name of Estate(s) (Ha) (Ha) (tonnes/year) (tonnes/ha/year) FGVP BESOUT 06 2,384.90 2,094.45 33,930.00 16.2 FGVP BESOUT 07 3,313.80 3,079.30 36,950.00 12.0 BESOUT 01 (520 Peneroka) FTP (315 Peneroka) 1,309.93 1,309.93 46,960.00 22.0 Own Manage Smallholder (205 Peneroka) 824.43 824.43 BESOUT 02 (495 Peneroka) FELDA (277 Peneroka) 1,147.29 1,147.29 32,340.00 16.0 Own Manage Smallholder (218 Peneroka) 874.06 874.06 BESOUT 03 (271 Peneroka) FTP (37 Peneroka) 150.71 150.71 FELDA (83 Peneroka) 338.80 338.80 23,040.00 21.0 Own Manage Smallholder (151 Peneroka) 607.64 607.64 SPO – 4006a.5 Page 19 Prepared by Mutuagung Lestari for BESOUT POM – Felda Global Ventures (FELDA)

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BESOUT 04 (215 Peneroka) FTP (29 Peneroka) 121.23 121.23 FELDA (122 Peneroka) 501.52 501.52 12,790.00 14.5 Own Manage Smallholder (64 Peneroka) 259.37 259.37 BESOUT 05 (102 Peneroka) FELDA (96 Peneroka) 385.30 385.30 4,700.00 11.5 Own Manage Smallholder (6 Peneroka) 24.00 24.00 TOTAL 12,242.98 11,718.03 190,710.00 16.27 *Production estimation for twelve month certified 1.7.3 Claim Certified Tonnage of Palm Product FFB Capacity CPO Palm Kernel Name of Mill Processed (tonnes/ hour) Out put Extraction Out put Extraction (tonnes/year) (tonnes) (%) (tonnes) (%) BESOUT 60 190,710 38,142 20.0 11,443 6.0 *Production estimation for twelve month certified

1.8 Other Certifications 1.8.1 ISO 9001:2008 ISO 9001 (validity 19 July 2013 until 1 July 2016) No. MY-AR 2666 by SIRIM QAS 1.8.2 ISO 14001: 2004 ISO 14001 (validity 19 July 2013 until 1 July 2016) No. MY-AR 0345 by SIRIM QAS 1.8.3 OHSAS 18001:2007 ISO 18001 (validity 19 July 2013 until 1 July 2016) No. MY-AR 0215 by SIRIM QAS

1.9 Time Bound Plan 1.9.1 Time Bound Plan for Other Management Units Time Bound Status Hectarage (Ha) Plan (Actual/Target Management Unit Address * (Planned Certification Audit Year) Year) Kilang Sawit Kota Gelanggi 6, W/Pos Felda 1 Kota Gelanggi 6 10,334 Q4, 2009 Certified: 2010 Kota Gelanggi.27000 Jerantut, Pahang Kilang Sawit Lepar Utara 6, Peti Surat 12 & 2 Lepar Utara 6 11,538 Q4, 2009 Certified: 2010 2020 26400 Bandar Pusat Jengka Pahang Kilang Sawit Felda Jengka 21, Bandar Pusat 3 Jengka 21 14,319 Q3, 2011 Certified: 2013 Jengka, 26400 Pahang Kilang Sawit Jengka 3, 26400 Bandar 4 Jengka 3 13,720 Q1, 2011 Certified: 2012 Jengka. Pahang Kiilang Sawit Jengka 8, 26400, Bandar Tun 5 Jengka 8 13,895 Q1, 2011 Certified: 2012 Abdul Razak Jengka, Pahang Kilang Sawit Lepar Utara 04, Peti surat 55, 6 Lepar Utara 4 Pejabat Pos Bandar Pusat Jengka, 26400 9,415 Q3, 2011 Certified: 2012 Bandar Pusat Jengka, Pahang Pejabat Felda Jengka 18 (Seroja) palm Oil 7 Jengka 18 Mill, 26400 Bandar Pusat Jengka, Jengka, 12,296 Q3, 2011 Certified: 2013 Pahang Kilang Sawit Padang Piol, 27040 Jerantut, 8 Padang Piol 4,960 Q1, 2011 Certified: 2012 Pahang SPO – 4006a.5 Page 20 Prepared by Mutuagung Lestari for BESOUT POM – Felda Global Ventures (FELDA)

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Kilang Sawit Adela, Po Box 73, Bandar 9 Adela 12,930.04 Q1, 2011 Certified: 2012 Penawar, Kota Tinggi 81930 Johor Kilang Sawit Lok Heng, PO Box 55, 81907 10 Lok Heng 12,799 Q1, 2011 Certified: 2012 Kota Tinggi, Johor Kilang Sawit Semenchu, Peti Surat 63, 11 Semenchu 15,797 Q2, 2011 Certified: 2012 81907 Kota Tinggi, Johor Kilang Sawit Waha, Karung Kunci S24, 12 Wa Ha 9,597 Q1, 2013 Certified: 2012 81907 Kota Tinggi, Johor Kilang Sawit Bukit Kepayang, 28300 Triang, 13 Bukit Kepayang 10,164.44 Q4, 2011 Certified: 2013 Pahang Kilang Sawit Bukit Mendi, 28320 Triang, 14 Bukit Mendi 7,838 Q4, 2011 Certified: 2012 Pahang 15 Kemasul Kilang Sawit Kemasul, 28300 Triang, Pahang 10,150 Q4, 2011 Certified: 2012 16 Tementi Kilang Sawit Tementi, 38300 Triang, Pahang 11,696 Q4, 2011 Certified: 2013 17 Triang Kilang Sawit Triang, 28300 Triang, Pahang 10,142 Q4, 2011 Certified: 2012 Felda Segamat Region Complex, KM 5, 18 Segamat (GC) 11,192 Q1, 2011 Certified: 2012 Jalan Genuang, 89000 Segamat, Johor Kilang Sawit Belitong, Peti Surat 61, 86007 19 Belitong 7,110 Q4, 2012 Certified: 2014 Kluang, Johor Kilang Sawit Bukit Besar, W/P Bukit Besar, 20 Bukit Besar 4,716 Q4, 2012 Certified: 2014 81450 Kulai, Johor Kilang Sawit Kahang, Karung Berkunci No. 21 Kahang 5,134 Q4, 2012 Certified: 2014 533, 86007 Kluang, Johor Kilang Sawit Kulai, Felda Taib Andak, 81000, 22 Kulai 7,531 Q4, 2012 Certified: 2014 Kulai, Johor Kilang Sawit Nitar, Felda Nitar 2, 86700 23 Nitar 5,819 Q4, 2012 Certified: 2014 Kahang, Johor Felda Penggeli Palm Oil Mill, Peti Surat 28, 24 Penggeli 9,456 Q4, 2012 Certified: 2014 81440 Bandar Tenggara, Johor Pejabat Felda Lepar Hilir palm Oil Mill, 25 Lepar Hilir 14,575 Q4, 2012 Certified: 2014 Gambang, Pahang Kilang Kelapa Sawit Bukit Sagu, Peti surat 26 Bukit Sagu 11,684 Q4, 2012 Certified: 2014 331, 26130 Kuantan, Pahang Kilang Sawit Felda Baiduri Ayu, Peti Surat 29, 27 Baiduri Ayu Pos Cenderawasih, 91150 Lahad Datu, 7,450 Q4, 2013 Certified: 2014 Sabah Kilang Sawit Felda Fajar Harapan, Peti Surat 28 Fajar Harapan 27, Pos Cenderawasih, 91150 Lahad Datu, 13,668 Q4, 2013 Certified: 2014 Sabah Kilang Sawit Kembara Sakti, Peti Surat 24, 29 Kembara Sakti 10,208 Q3, 2014 2014/2015 91150, Cenderawasih, Lahad Datu, Sabah Kilang Sawit Mercu Puspita, Peti Surat 29, 30 Mercu Puspita 12,734 Q3, 2014 2014/2015 91150, Cenderawasih, Lahad Datu, Sabah Kilang Sawit Nilam Permata, Peti Surat 23, 31 Nilam Permata 8,359 Q3, 2014 2014/2015 91150, Cenderawasih, Lahad Datu, Sabah Kilang Sawit Hamparan Badai, Peti Surat 25, 32 Hamparan Badai 17,212 Q3, 2014 2014/2015 91150, Cenderawasih, Lahad Datu, Sabah Embara Budi Peti Surat No. 28, 91105 Lahad 33 Embara Budi 15,070 Q2, 2014 2014/2015 Datu, Sabah Lancang Kemudi, Felda Sahabat 45, Lahad 34 Lancang Kemudi 10,698 Q2, 2014 2014/2015 Datu, Sabah Kilang Sawit Kalabakan, Peti Surat No. 35 Kalabakan 7,352 Q2, 2014 2014/2015 62007, 91030 Tawau, Sabah SPO – 4006a.5 Page 21 Prepared by Mutuagung Lestari for BESOUT POM – Felda Global Ventures (FELDA)

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Kilang Sawit Umas, WDT 43,91009, Tawau, 36 Umas 8,356 Q2, 2014 2014/2015 Sabah Kilang Sawit Trolak, Pejabat POS Sungkai, 37 Trolak 6,899 Q3, 2014 2014/2015 35600 Sungkai, Perak Kilang Sawit Krau, Peti Surat 17, 28700 38 Krau 14,619 Q3, 2014 2014/2015 Bentong, Pahang Kilang Sawit Pancing, Peti Surat 257, 25730 39 Pancing 3,850 Q3, 2014 2014/2015 Kuantan, Pahang Kilang Sawit Neram, Pejabat Pos Mini Felda 40 Neram 15,262 Q3, 2014 2014/2015 Neram 1, 26160 Kuantan, Pahang Kilang Sawit Mempaga, 28600 Karak, 41 Mempaga 7,648 Q3, 2014 2014/2015 Pahang Kilang Sawit Chalok, 21450 Setiu 42 Chalok 8,730.67 Q4, 2014 2014/2015 Terengganu Kilang Sawit Sg. Tengi, Felda Gedangsa, 43 Sg Tengi 7,320 Q3, 2014 2014/2015 44010 Kuala Kubu Bahru, Selangor Kilang Sawit Serting, Bandar Baru Serting, 44 Serting 17,947.93 Q3, 2014 2014/2015 72109 Jempol, Negeri Sembilan Kilang Sawit Keratong 02, Peti Surat 28, 45 Keratong 2 15,276 Q3, 2014 2014/2015 26900 Bandar Tun Razak, Pahang Kilang Sawit Keratong 03, Peti Surat 21, 46 Keratong 03 12,036.48 Q3, 2014 2014/2015 26900 Bandar Tun Razak, Pahang Kilang Sawit Pasoh, 72300 Simpang 47 Pasoh 8,197.34 Q3, 2014 2014/2015 Pertang, Negeri Sembilan Kilang Sawit Kerteh, Beg berkunci No. 3, 48 Kerteh 13,170.13 Q4, 2014 2014/2015 23309 Ketengah Jaya, Terengganu Kilang Sawit Selendang, Pejabat Pos Kuala 49 Selendang 13,944.20 Q3, 2014 2014/2015 Rompin, 26800 Rompin, Pahang Kilang Sawit Selancar 2A, Peti Surat 98, 50 Selancar 2A 8,399.40 Q4, 2014 2014/2015 85007 Segamat, Johor Kilang Sawit Selancar 2B, Peti Surat 98, 51 Selancar 2B 7,555 Q3, 2014 2014/2015 85007 Segamat, Johor Kilang Sawit Jerangau Barat, Wakil POS 52 Jerangau Barat Felda Jerangau, 21820 Ajil Terengganu, 1,556 Q4, 2014 2014/2015 Terengganu Kilang Sawit Jerangau Baru, Wakil POS 53 Jerangau Baru Felda Jerangau, 21820 Ajil Terengganu, 10,805 Q4, 2014 2014/2015 Terengganu Kilang Sawit Palong Timur, Peti Surat 2, 54 Palong Timur 26,331 2014/2015 2015 73400 Gemas, Negeri Sembilan Kilang Sawit Serting Hilir, 72120 Bandar Baru 55 Serting Hilir 24,689 2014/2015 2015 Serting, Negeri Sembilan Kilang Sawit Maokil, Jalan Kilang, 56 Maokil 8,777 2014/2015 2015 Rancangan Felda Maokil, 85300 Labis, Johor Kilang Sawit Tenggaroh, 86810 Jemalung, 57 Tenggaroh 16,812 2014/2015 2015 Johor Kilang Sawit Tenggaroh Timur, Karung 58 Tenggaroh Timur 4,420 2014/2015 2015 Berkunci No. 534, 81907 Kota Tinggi, Johor Kilang Sawit Keratong 09, Peti Surat 32, 59 Keratong 09 7,810 2014/2015 2015 26900 Bandar Tun Razak, Pahang Kilang Sawit Kechau A, Peti Surat 16, 27207 60 Kechau A 15,963 2014/2015 2015 Kuala Lipis, Pahang 61 Kechau B Kilang Sawit Kechau B, Peti Surat 57, 27200 8,712 2014/2015 2015 SPO – 4006a.5 Page 22 Prepared by Mutuagung Lestari for BESOUT POM – Felda Global Ventures (FELDA)

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Kuala Lipis, Pahang Kilang Sawit Ciku, Peti Surat 29, 18300 Gua 62 Ciku 10,796 2015/2016 2016 Musang, Kelantan Kilang Sawit Aring B, Peti Surat 46, 18300 63 Aring B 6,920 2015/2016 2016 Gua Musang, Kelantan Kilang Sawit Kemahang, Peti Surat 35, 64 Kemahang 7,775 2015/2016 2016 17507 Tanah Merah, Kelantan 65 Tersang Kilang Sawit Tersang, 27600 Raub, Pahang 10,044 2015/2016 2016 66 Cini 2 Kilang Sawit Chini 2, 26690 Chini, Pahang 9,422 2015/2016 2016 67 Cini 3 Kilang Sawit Chini 3, 26690 Chini, Pahang 7,730 2015/2016 2016 Kilang Sawit Sampadi, Peti Surat 18, 94507 68 Sampadi 7,680 2016/2017 2017 Lundu, Sarawak Kilang Sawit Air Tawar, 81900 Kota Tinggi, 69 Air Tawar 2016/2017 2017 Johor Kilang Sawit Pontian Plantation, KM52 off 70 Pontian Plantation Jalan Sandakan-Lahad Datu, PO Box 60525, 14,978 2016/2017 2017 91114 Lahad Datu, Sabah 1.9.2 Progress of Associated Smallholders and Outgrowers for Certifiable Standard All the outgrowers which supplies to Besout mill are planned to be in RSPO certifiable standard within three years after the mill certified. The progress of the outgrowers will be verified during the next assessment.

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ASSESSMENT REPORT

2.0 ASSESSMENT PROCESS

2.1 Certification Body PT Mutuagung Lestari Jl. Raya Bogor Km 33,5 No. 19, Cimanggis - Depok 16953

Telp. +62-21-8740202; Fax +62-21-87740745/46 Website: www.mutucertification.com Email : [email protected]

2.2 Assessment Team 2.2.1 Lead Assessor and Assessment Team ST-2 1. Mohan Thavarajah (Lead Auditor). Mr. Mohan Thavarajah is an IRCA Lead Auditor and Lead Tutor for ISO 9001 as well as other integrated management systems (ISO 14001 and OHSAS 18001). He holds a Masters in Management of Technology from University of Technology Malaysia (UTM) and a Bachelor of Engineering from National University of Singapore (NUS). He has more than 25 years of experience in engineering, managerial, consultancy, training, and auditing in the industrial sector in Singapore, Malaysia, Indonesia, Thailand, Cambodia and other regional countries. Has successfully assisted corporations to establish, implement and maintain (Occupational Health Safety) OHSAS 18001 Management System, Environmental Management System (ISO14001), ISO22000 / HACCP Food Safety Management Systems and Quality Management System (ISO9001) by providing auditing, consultancy and training in the relevant areas for various manufacturing, engineering, plantation, service and government sectors. Currently he is the Intertek Regional Certification Manager. He was a CB Team member in the stakeholder consultation and development of the RSPO Cambodian Local Indicators. He was part of the RSPO Assessment team which audited several RSPO certified Plantation Management Units since 2011. 2. Taufik Margani (Auditor). A bachelor of Forestry, Majoring in Forest Management Bogor Agricultural University in Forestry. He has led several audits for Forest Management in Indonesia under Accreditation Scheme of Indonesia Ecolabel Institute (LEI) and under scheme Forest Stewardship Council (FSC) and as Lead auditor for FSC Chain of Custody. Other experiences: Lead Auditor for Environment Management System, Quality Management System and RSPO. He has been working for independent Certification Body as General Manager for Resources Management Certification and he has conducted Environment Management System and RSPO audits in Indonesia and Malaysia. The roles for this assessment addressing for evaluating social aspect and workers regarding the Principle 6 and Supply Chain Certification System (SCCS) For CPO Mill. 3. Octo HPN Nainggolan (Lead Auditor). A bachelor of Agriculture, majoring of Social Economics of Agriculture (Agribusiness). He has a working experience since 2004 oil palm Plantation Company in Indonesia. Trainings attended namely: Training of Conservation of Natural and Biological Resources in supporting HCV, Basic Plantation Management Program, Plantation Integrated Pest Management training, Followed the Management System Certification (ISO 9001-2008/SNI 19011-9001:2008), Environment Management System (ISO 14001:2004) , RSPO Lead Auditors Training Course, Indonesian Sustainable Palm Oil (ISPO) Lead Auditor training course and supply chain certification system training by BM Trada. Currently, he worked at Professional Certification Body. In the assessment activity, he assessed on best management practices, FFB Processing, Integrated Pest Management System, Agrochemical use and social aspect. 4. Bukti Bagja (Auditor) Indonesian citizen, Master of Science in the field of Environmental Sciences, University of Indonesia. Training he has followed are: awareness of RSPO certification system. He has followed several activities GAP Analysis of the RSPO Principles and Criteria implementation in several oil palm plantations in Indonesia as assessor. Besides that he is also involved in several assessments HCV / HCV as an assessor with the specifications in the field of GIS (mapping). He has expertise in mapping such as ArcGIS, MapInfo, Global Mapper, ER Mapper, Erdas Imagine. In this activity, he has assessed for environment aspect, land conservation, water conservation and management of waste. In this assessment he assessed on environment aspect, Erotion & Land Degradation, High Conservation Value, Environment Aspect.

2.3 Assessment Methodology, Assessment Process and Locations of Assessment 2.3.1 Figure of person days to implement assessment

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ST-2 Number of auditor : 4 auditors Number of days for ST-2 at site : 5 days Number of working days for ST-2 at site : 20 Working days

2.3.2 Detail process of assessment ST-2 The assessment was conducted by measuring the sufficiency of implementation with the consistency done by the Besout Mill - FELDA to the requirements of National Interpretation of the Republic of Indonesia from RSPO Principles and Criteria for Sustainable Palm Oil Production (RSPO MY-NIWG, April 2006 including smallholder NI) and Supply Chain Requirement for CPO Mill

The assessment was conducted in three methods: (1) document review, aiming to observe the sufficiency of types or substances from required documents; (2) interview, aiming to obtain more detailed information and cross check the information; and (3) field observation, aiming to observe directly the sufficiency of implementation on site. Some opportunities for improvement of the results ST-2 delivered by the MUTU auditor to the management unit and the results are the subject will be verified at the next assessment phase (ST-2). Improvement of findings from main assesment findings were observed by auditors at this ST-2 assessment. All information obtained was recorded in Check List of PT Mutuagung Lestari (MUTU) and part of ST-2.

The assessment program please find Appendix 2

2.3.3 Locations of Assessment ST-2 Besout Palm Oil Mill: 1. Supply chain verification. Observation and interview with the operators regarding their job descriptions and responsibilities. Ensuring the operators’ awareness on the Supply Chain System applied in the work. 2. Processing Stage (from Loading Ramp to Dispatch): observation on the processing steps of the FFB to become Crude Palm Oil (CPO), the implementation of OHS, the mill’s emergency response facility, and First Aid facility. 3. Hazardous Waste Temporary Warehouse. Observation on the hazardous waste management that shall comply with the applicable regulations and interviews with the warehouse staff regarding the procedure of hazardous waste management, and the availability of the facilities to handle contamination and exposure. 4. Water Treatment Plan: observation on the pre-processed clean water supply. 5. Waste Water Pond/ Disposal: observation on how to handle the mill’s effluent and the WWTP’s condition which is well-maintained without any leakage and runoff. 6. Methane captures installation. 7. Workshop. Observation on the safety signboard is available. The first aid box is available but the content of the first aid box is not complete. 8. Chemical Store. Observation on the chemical storage and the way the kept all the chemicals. The ventilation and security is proper. 9. Worker interviews. There some workers that the auditor interviewed and some of them are aware about OSH, sexual rights, and religious rights and racial. They are well aware on the pay and contract agreement between the employer and employee.

Besout-07: 1. Block B-4. Observation the harvesting activities regarding harvesting criteria and interview with four migrant workers regarding the PPE use, complaint mechanism, payments, facilities given by the company, labour permit social and health insurance. 2. Block 5. Observation the harvesting activities regarding harvesting criteria and interview with two migrant workers regarding the PPE use, complaint mechanism, payments, facilities given by the company, labour permit social and health insurance. 3. Blok 7. Field observations and interviews on spraying activities. Observation the spraying technique and interview with the workers regarding safety and health implementation , medical screening, minimum wage, contract agreement, worker facilities, complaint mechanism, health and social insurance.

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4. Blok B-7. Observation and interview with loose fruit picker worker which was a smallholder wife (isteri penerok) of Besout.3 and member of the gender committee (Gabungan Peneroka Wanita). Auditor interview regarding the safety and health implementation, social and health insurance, minimum wage. 5. Cawang River riparian, block 1, PM91C (near the employee housing complex). Observation regarding the maintenance of water source and conservation area.

Besout-01: 1. Smallholders Plantation (Ladang Peneroka of Abdul Rahman and Kamarul Zaman). Observation the harvesting activity which bound with the local contractors to conducting the harvest. Interview with the contractor and the contractor workers regarding labour permit, safety and health (PPE use and availability), insurance, minimum wage and payments. 2. Interview with six smallholder (Peneroka) which have oil palm plantation 4 ha each regarding how the plantation have been manage and maintain, social relationship with FELDA. 3. Cawang River riparian, block 05, PKT005. Observation regarding the maintenance of water source and conservation area.

Besout-04: 1. Interview with upkeep contractor and with three migrant workers regarding the PPE use, work skill and training, complaint mechanism, payments, facilities given by the company, labour permit facilities given by contractor, work agreement, social and health insurance.

2.4 Stakeholder Consultation and List of Stakeholders Contacted

2.4.1 Summary of stakeholder consultation process. Summary of stakeholder consultation process Consultation of stakeholders for Besout Mill – Felda Global Ventures, FELDA was held by: Public Notification 30 days before the initial assessment (9 July 2014) and uploaded on RSPO, company and certification body websites Public consultation meeting with internal stakeholders by interviews and local stakeholders on 11 August 2014 smallholders on 13 August 2014 conducted by visits to villages and interviews with local peoples including the smallholders (Peneroka). Numbers of input from stakeholders were clarified by the management units. 2.4.2 List of stakeholder contacted Please find appendix 1

2.5 Determining Next Visiting

The next visit (Surveillance-1) will be determined nine to twelve months after the management unit held the certificate.

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3.0. ASSESSMENT RESULT

3.1. Summary of Assessment Report of the RSPO Certification

MUTUAGUNG LESTARI has conducted an assessment of Besout Palm Oil Mill under FELDA operation that consisting of 1 (one) Palm Oil Mill: and supplied by 7 (seven) estates: Besout 01 Estate, Besout 02 Estate, Besout 03 Estate, Besout 04 Estate, Besout 05 Estate, Besout 06 Estate, Besout 07 Estate

During the assessment, there were seven (7) Nonconformities were assigned against Major Compliance Indicators; five (5) nonconformities were assigned against Minor Compliance Indicators; and one (1) nonconformance(s) against supply chain requirement for CPO mill and eight (8) opportunities for improvement were identified.

Further explanation of the non-conformities raised and corrective actions taken by the company are provided in section 3.5. The company has already prepared and implemented the corrective action(s) that had been reviewed and accepted by Auditor(s) in form of documentation evidence(s) e.g. (document record/photographic/etc...). Those corrective actions taken that consist of 7 (seven) Major non-conformity(s) and 2 (two) Minor non-conformity(s) had been closed out shall be verified during next assessment.

MUTUAGUNG LESTARI found that Besout Palm Oil Mill - FELDA operation complied with the requirements of Malaysian National Interpretation (MY-NI) – (Including Smallholder NI Approved by RSPO Executive Board November 2010. The Baseline NI Indicators and guidance are as in Approved NI 26 April 2008) and RSPO Supply Chain Certification Standard for CPO Mill, 25 November 2011.

Therefore MUTUAGUNG LESTARI Recommends RSPO Certification of compliance is issued.

Ref Std. VERIFICATION RESULT of MUTU-Certification

PRINCIPLE #1 COMMITMENT TO TRANSPARENCY

1.1 Plantation and Palm Oil Factory have to give adequate information for stakeholders in appropriate language and forms, to ensure the effective participation of stakeholders in decision-making. The Felda Besout PMU has established and implemented a documented system as well as a procedure numbered MANUAL LESTARI 1A for communication procedure, ML-1A/L2-PR3(0) for meeting and consultation on point 5.0 regarding communication with stakeholder and the regarding the period time to response by the management unit is two weeks from stakeholder letter received. All records of requests for information are forwarded in the first instance to the local estate or mill manager and are recorded in an enquiry/ grievance book. One of which is held in each administrative office then request letter will process on to the relevant department for action and release of information. The incoming and outgoing letters were well record in a book of Daftar Surat Pentadbiran, however during the document observation auditor found nonconformance e.g.: no evidence of response by the management unit of letter from Universiti Putra Malaysia dated 17 February 2014 regarding request for conducting a research in Besout-04 estate. Nonconformance 2014.01 with major category.

Observation 27 October 2014  Root cause: There was no proper record evidence of the response to the incoming letter by the management unit  Corrective action: Record and retain all incoming and letters related answers or feedback  Preventive action: To appoint a person in charge that will be responsible for monitoring all applications and feedback each week.

Auditor conclusion: The management unit has shown the evidence in the form of photographic and records to the auditor team. The evidences are available. SPO – 4006a.5 Page 27 Prepared by Mutuagung Lestari for BESOUT POM – Felda Global Ventures (FELDA)

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Nonconformance 2014.01 is closed

1.1.1 Status: Nonconformance 2014.01 with major category is closed. 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. Not all the document can be released which not related to environmental and social issues; however the mainly confidential document is financial records. The document may be access by public which determine by the management unit are Land Use Title, Safety and Health planning, Social Impact Assessment, and HCV document, Pollution Preventive Plan, Complaint and Grievance, Mechanism of Negotiation, Continuous Improvement, Human Right Policy, training plan, FFB price information. All request of information are can be trace back from the information request registration book. During the audit auditor sight in many area the information are publicly available for example the safety and health plan and policy in mill and estates, HCV notice board for not hunting, Continuous Improvement Plan available in mill and estates. Status: Full Compliance PRINCIPLE #2 COMPLIANCE WITH APPLICABLE LAWS AND REGULATIONS

2.1 There is compliance with all applicable local, national and ratified international laws and regulations. A Legal Register covering land titles as well as the applicable local and international laws and regulations is found to be available at the Felda Besout mill and estates. The relevant legislations identified and listed were among others regarding safety and health and environmental management e.g.: Factories and Machinery Act 1967, Occupational Safety and Health Act 1994, Environmental Quality Act 1974, Fire Services Act 1988, Poisons Act 1952, Employee Social Security Act 1969 (SOCSO), Employees Provident Fund (EPF), Employment Act 1955 and Industrial Relations Act 1967.

Stakeholder interview with office staff, field workers, and scheme smallholders revealed that there were no cases of any legal or statutory non-compliances imposed by regulatory authorities. Statutory documentary submissions to government authorities were found to be in compliance. Based on the field and site observations, interviews and records checking at the Felda Besout mill and estates, there were evidences of compliance with the relevant laws, regulations, local and international laws at the Felda Besout POM and estates. Licenses and permits such as MPOB license, DOSH Certificates, DOE Permit, Business Premises License, Permit for Employment of Foreign Workers, Domestic and Consumer Permit for storing diesel & etc. were renewed and found to be valid.

The Felda Besout PMU has established and implemented a documented system as well as a procedure numbered ML- 1A/L2-PR2 for identifying, determining, reviewing and updating applicable legal and other requirements. It included the listing of laws and regulations that were being monitored for changes and reference. Stakeholder Interview with office staff, field workers, and scheme smallholders of the Felda Besout PMU and scheme smallholders confirmed that Felda Besout PMU has established and implemented a documented system which includes written information on and complies with legal requirements. Based on field observations, interviews and review of records at the Felda Besout mill and estates, there was evidence of a documented system that has been appropriately disseminated to all staff, scheme smallholders and contractors. Field observations further verified that all activities were in compliance to the relevant laws, regulations, local and international laws.

The procedure as specified above is the established implementation mechanism for evaluation of compliance against the applicable legal and statutory requirements.

Stakeholder Interview with office staff, field workers and scheme smallholders of the Felda Besout PMU confirmed that Felda Besout PMU has established and implemented a documented procedure which includes written information on

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and compliance with legal and statutory requirements. Based on the field observations, interviews and review of records at the Felda Besout mill and estates, there was evidence of a documented procedure which is used as a mechanism for effective implementation of evaluation of compliance against the applicable legal and statutory requirements.

Felda Besout PMU has a system of tracking of changes in the relevant laws and statutory requirements that are communicated and received from Felda HQ based in Kuala Lumpur. Monitoring of changes to the applicable laws and statutory requirements is carried out through periodical review in accordance with Felda’s documented procedure. Changes in laws are disseminated by the PSQM Department in KL HQ to all the various PMUs throughout East and West Malaysia.

Stakeholder Interview with office staff, field workers and scheme smallholders of the Felda Besout PMU confirmed that Felda Besout PMU has implemented a procedure for tracking of changes of the relevant laws and statutory requirements which was communicated and received from Felda HQ. Based on the field observations and review of records at the Felda Besout mill and estates, there was evidence that monitoring of changes to the applicable laws and statutory requirements are carried out through periodical review in accordance with Felda’s documented procedure.

Status: Full Compliance

2.2 The right to use the land can be demonstrated, and is not legitimately contested by local communities with demonstrable rights

Felda Besout was able to demonstrate that copies of the land titles of all estates were maintained and found to be in proper order. The original copies are maintained by the Felda Besout Corporate Head office. The legal use of the land was confirmed to be for cultivation of oil palm and agricultural use. Summary of land titles, settler’s names, respective hactarages, land management status, should be summarized for ease of monitoring. (Observation/OFI No.01)

Stakeholder Interview with office staff, field workers and scheme smallholders of the Felda Besout PMU confirmed that the lands were leased by the Felda Besout PMU from the State Government with the right to develop the land for oil palm plantations. Based on the field observations, interviews and review of records at the Felda Besout mill and estates, there was evidence in the form of available records to show that the land lease complies with legal requirements and does not infringe on any legal rights that require free, prior and informed consent.

The lands were leased by Felda Besout from the State Government with the right to develop it for oil palm plantations or agriculture use. The legal use of the land by Felda Besout PMU was confirmed to be for cultivation of oil palm.

Stakeholder Interview with local employees of the Felda Besout PMU and independent smallholders confirmed that the lands were leased by the Felda Besout PMU from the State Government for the purpose of developing the land for oil palm plantations and this is adhered to by the Felda Besout PMU. Based on the field observations, interviews and review of records at the Felda Besout mill and estates, there was evidence in the form of available records to show that the land lease complies with legal requirements and does not infringe on any legal rights that require free, prior and informed consent.

There was adequate boundary stones/ markers along the perimeter of Felda Besout Estates 01, 04 and 07 which were sampled in this initial audit. Locations of several boundary stones and pole markers were visited and verified to be within the boundary parameters of the estates.

Stakeholder interview with field staff, workers, scheme smallholders of the Felda Besout PMU revealed that there was adequate boundary stones/ markers visibly maintained and located along the perimeter of Felda Besout Estates 01, 04 and 07 . Based on the field observations at the Felda Besout Estates 01, 04 and 07, there were visible confirmations of SPO – 4006a.5 Page 29 Prepared by Mutuagung Lestari for BESOUT POM – Felda Global Ventures (FELDA)

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the locations of several boundary stones and pole markers which were verified to be demarcating the boundary parameters of the estates.

The latest known acquisition by Felda is the acquisition of Pontian Plantations in Sabah, Malaysia. There are no reported cases of land disputes arising from the acquisition. There is a documented Felda procedure ML-1A/L2-PR 4 for handling and response to land disputes and customary rights as well as for calculation and distribution of compensation. There have been no land disputes in the Felda Besout PMU.

Stakeholder interview with field staff, workers, and scheme smallholders of the Felda Besout PMU revealed that there have been no land disputes in the Felda Besout PMU. Based on the field observations at the Felda Besout Estates, was verified that there have been no land disputes in the Felda Besout PMU.

Status: Full Compliance 2.3 Use of the land for oil palm does not diminish the legal rights, or customary rights, of other users, without their free, prior and informed consent.

No cases of land claims or disputes in this Felda Besout PMU. As such this process is presently not applicable for this initial audit

Stakeholder interview with field staff, workers, and scheme smallholders of the Felda Besout PMU revealed that there have been no land disputes in the Felda Besout PMU. Based on the field observations at the Felda Besout Estates, was verified that there have been no land disputes in the Felda Besout PMU.

Status: Full Compliance

PRINCIPLE #3 Commitment to long-term economic and financial viability 3.1 There is an implemented management plan that aims to achieve long term economic and financial viability.

FELDA Besout mill and estates are able to annual budget document for two years projection. The period of the budget is from January to December every year. The FELDA PALM INDUSTRIES budget take into account of crop production, yield, CPO extraction rates and production, Kernel extraction rates and production, cost of production in estate and mill, annual replanting program, forecast and financial indicators. All the requirement of this indicator have been met and well documented.

Felda Besout estates have been compiling the long term replanting plan in document name Program Tanam Semula and Peta Rencana Replanting. The policy which the management unit of Felda and the stallholders (peneroka) to replace the non-economic plant are: the plant age is over then 25 years, production yield is under 10 ton/ha. For example in Besout-07 estate the replanting was planned in year 2015 for 269.6 ha, in year 2016 for 378.42 ha and until year 2019 all the area in the estate all replant. I Besout-01 estate the replanting was finished in year 2009 and Besout- 04 estate the replanting program was finished in year 2012, however the replanting program document which was provided by the management unit of Besout.07 should be improved to include more comprehensive details such as the type of seeds used and cost estimation. (Observation/OFI No.02) Status: Full compliance PRINCIPLE #4 Use of appropriate best practices by growers and millers 4.1 Operating procedures are appropriately documented and consistently implemented and monitored. FELDA have been able to show Procedure and Manual for operating the mill, for example Manual Operasi Kilang Sawit for each station in the process of palm oil production from weighbridge to storage, Manual for Laboratory (sample tacking, laboratory use tool, chemical material provision, calibration, determination, water analysis) and Occupational Safety and Health Procedure (general safety, loading ramp, press operation, etc.). For the estate procedure called Manual Ladang Sawit Lestari establish on 1 June 2012 start from Nursery, replanting, SPO – 4006a.5 Page 30 Prepared by Mutuagung Lestari for BESOUT POM – Felda Global Ventures (FELDA)

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immature plant maintenance, mature plant maintenance and harvesting, upkeep (fertilizing and quality monitoring).

The mill and estates procedure have been supported by regular preventive maintenance and scheduled inspection. In the mill the preventive maintenance under the maintenance division which supported by mechanical and electrician to ensure all the operation process capability is well and safe, all the inspections are conducted and record every day. Status: Full compliance 4.2 Practices maintain soil fertility at, or where possible improve soil fertility to, a level that ensures optimal and sustained yield. FELDA have been annually implementing the fertilizer use to increasing productivity, several fertilizer use are NK mixture 24, Kieserite, Roch Phospate. The effort made by the management unit to maintain and increase fertility is by regular manuring activities realized achieves 100% according to the recommendations in 2013. Not all the area in Besout-04 and Besout-07 estate manage by FELDA or FELDA techno Plant, several smallholders’ areas are manage by them (individually), however FELDA still responsible inform to all the smallholders about fertilizer recommendation from the leaf and soil sampling analysis.

There was evidences of leaf sampling and soil sampling records annually for monitoring the soil nutrient and plant which conducted by Felda Agriculture Services Department, for example the sampling taken on26-28 February 2013 for year 2013 fertilizer recommendation and 20-23 January 2014 for year 2015 fertilizer recommendation. All the records are well kept by the management units.

During the assessment the auditor have observe the implementation of empty fruit bunch application in Besout-07 estate, land application and zero burning replanting which applied with machinery. The management unit have monitored the implementation of the EFB application which record in Rekod Tandan Kosong document describing the daily basis application, date of application, vehicle number, amount of EFB, for example in July 2014 on Besout-07 have applied 701,420 kg of empty fruit bunch. The liquid waste which produced by the mill is also applied to estate and all the application are well record and maintain. Based on field observation the replanting activity in Besout complex have been done for 2014 plan and revealed there are no signs the replanting by burning. Each year the replanting still continue to replace the old palm tree. In Besout-01 and Besout-04 estate there are several areas which manage by Felda Techno Plant to conducting the replanting and all the replanting records which implement the stacking and chipping mechanism. Status: Full compliance 4.3 Practices minimize and control erosion and degradation of soils. Management unit has implemented soil conservation practices to minimize soil erosion and soil degradation as shown by the following record: soil and the steep river bank protection policy, terracing record at the time of land preparation; planting of cover crops (Mucuna); L-shape practice, silt pit, EFB application and composting in the planting site. Nevertheless there is still lack of evidence of apropriate slope and soil map as basic information for soil conservation (Nonconformance 2014.02 with minor category.).

To avoid bare / open land resulted from planting activity, management unit has cultivated cover crops (mucuna) during the early stage of planting or at replanting period. As example: there was evidence of cover crops planting in Besout 1 Estate in year 2003 (by the time audit was held, cover crops area had been reduced due to oil palm canopy cover), in Besout Besout 4 and 7, there were records of cover crops planting on the replanting area in year 2012 and 2009.

For road maintenance, management unit has standard operating procedures in the document of Field Manual on Sustainable Oil Palm Plantation chapter 10 concerning “Agricultural Road Establishment”. Periodic road maintenance are planned and incorporated in the budgeting plan of each estate, for example: patching, clean and preserve the trenches, gradding, repair collapsed roads on the porch, plaster, installation of box culvert, and other forth. For monitoring of the implementation, there is form for roadwork monitoring in each estate.

Agronomical report showed that in besout 6, there is peatland area of approximately 123.24 hectares. For the peat land management, the company has made a blue print (design) of trenches and peatland management facilities. As an implementation documentation, there are records of ditch making (4 x 3 x 2 m) and establishment of control dam to SPO – 4006a.5 Page 31 Prepared by Mutuagung Lestari for BESOUT POM – Felda Global Ventures (FELDA)

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regulate the water level in the channel. However, the company does not yet have sufficient peat depth data, records of periodic monitoring of water level, and records of subsidence monitoring as per standard management of peatlands (Nonconformance 2014.03 with minor category.)

According to Agronomy Field Reports year 2014, there are no fragile or problem soils in Felda Besout complex so that no specific plans / guidance of fragile dan problem soils used. As a general guideance for soil / land management, there is SOP number: MLSL (Ed.2) Sec- 2 (11.0) dated June 1, 2012 entitled Manual of Sustainable Oil Palm: Construction of Oil Plam -the second edition, Section 2. However, as an opportunity for impeovement, management unit may provide a guidance for management of fragile or problem soils. Status: 4.3.1 Nonconformance 2014.02 with minor category. 4.3.4 Nonconformance 2014.03 with minor category. 4.4 Practices maintain the quality and availability of surface and ground water. Mangement unit has identified the riparian area of Cawang River as protected areas (HCV) and has installed a riparian boundary signboard. However, there is lack evidence of adequate water protection measures to avoid water pollution for instance clear boundary of riparian zone that free from chemical application and dissemination of the non chemical treatment policy to the spraying workers (Nonconformance 2014.04 with major category). Observation 11 October 2014 and 27 October 2014  Root cause: Budget allocation for RSPO just been approved by the top management. Buffer zone signs, trespassing sign and using chemicals are still in the preparation process and during the visit only half completed and installed.  Corrective action: - Provide adequate Sign Board "Buffer Zone" and the sign board "No Trespassing” and Using Chemicals" - Buffer zones sign will be put on the respective location clearly (either on trees or poles with red paint and white). - Remove the letter of notification or warning, or provide an explanation on a ban on pesticides and fertilizer in the buffer zone to the staff, workers, contractors and settlers. - Make sure there is no use of chemicals in the Buffer Zone area.  Preventive action:  Management of the field will ensure that signs are installed properly, and all staff, employees, contractors, and settlers briefed and understanding regarding boundary demarcation and buffer zones.  The estates will maintain signs and spikes boundaries at least every 2 months to ensure that it is in a good condition.  Auditor conclusion: The management unit has shown the evidences of signboards and notifications in the form of photographic and records to the auditor team. The evidences are available. Nonconformance 2014.04 is closed

Field verification in Besout 1 and 7 showed that there are no bunds / weirs / dams building across the Cawang Rivers (Cawang river passes through the Besout 1 and 7 estates)

Management unit has a permit / license for disposal of waste water intto natural water bodies from local government. The license was issued on April 2014, number 004230. Field verification showed that the disposed waste water had passed the Waste Water Treatment Plant and had met the requirement of water quality.

Besout 1 and 7 have Cawang River as an outgoing water into main natural waterways. that However there is no evidence of periodic monitoring of the quality of the Cawang River by an accredited laboratory (Nonconformance 2014.05 with major category). Observation 11 October 2014 and 27 October 2014  Root cause: Awareness of the need for water quality monitoring has been given but still lack of enforcement.  Corrective action: 1. Take water sample in and sample out of the estates and sent for analysis for the water quality. 2. Mark on the map point water samples taken.  Preventive action: Periodic checks will be made on management and the RSPO internal audit team.

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 Auditor conclusion: The management unit has shown the evidences of signboards and notifications in the form of photographic and records to the auditor team. The evidences are available. Nonconformance 2014.05 is closed

For monitoring of rainfall, the management unit has rainfall monitoring station in every estate (rain gauge). Measurement and recording done every day. As an example, recent three months data of Besout 1 shows that average of rainfall in May was 378 mm, June was 7.75 mm, and July was 27 mm.

Mangement unit has been monitoring the use of water in the palm oil mills. Monitoring is done by using flowmeter installed at water treatment plant and in the stations that use water such as boilers and process chamber. The use of water for processing in general is still below the specified budget (standard ratio of water use volumen and provecssed FFB volume is 1 ). The average daily water usage in recent six manths was 0.5 tons / ton FFB.

HCV identificaition document and field verification in Besout 1, 4 and 7 showed that there are no drainage water flowing into the protected areas around the Felda Besout Complex.

Management unit has made water management plan for peat and non-peat land in thet esates. The plan for non-peat land contains information of mitigation of emergencies situation due to shortages of water or floods. For peat lands in Besout 6, there is water management plan that describes the water management facility establishment in the peat lands like: primary channels, secondary channels, construction of water control dam, etc. Status: 4.4.1 Nonconformance 2014.04 with major category is closed. 4.4.3 Nonconformance 2014.05 with major category is closed. 4.5 Pests, diseases, weeds and invasive introduced species are effectively managed using appropriate Integrated Pest Management (IPM) techniques. FELDA provide the pest management technique in procedure of Pengawalan Ulat Pemakan Daun (UPD) di Ladang Sawit and Prodeur Penanaman Tumbuhan Berfaedah Untuk Kawalan Jangka Panjang Ulat Pemakan Daun which explain how to conrol the oil palm tree caterpillar whit cultural, biology and chemical concepts. The procedure also explain the mechanism of beneficial plant to increase the population of caterpillar natural enemies. The major pest is rats in old palms and oryctes in young palms. During the field observation showed the management unit using barn owls for control of rats and beneficial plants (Turnera subulata and Cassia cobanensis) on roadsides.

Besout complex estates maintain all the records of barn owls in monthly basis. The barn owls has successfully control the rats pest and the units not use the chemical to control the rats’ population. During the 2014 there were bagworm attack records on Besout-04 (blok 2) for 80.12 ha and control by the unit on 11-21 April 2014. All the records of the pest and disease are well maintain and kept.

Records of pesticides by the management unit are well maintain, for example the 2014 bagworm attack 80.12 ha in Besout-04 was control on 11-21 April 2014 using the Hextar Cyper 5.5EC with active ingredient alphacypermethrin. The dosage use900 ml/ha with totally use 72.11 liter. The records of barn owls population, beneficial plant realization are well kept and maintain. During the assessment auditor team also interview with the officer which monitored the pest and disease and showed the records of monitoring are well conducted. The estates have commenced recording information on chemical which have been explaining the active ingredients annually use per ton of FFB.

Status: Full compliance 4.6 Agrochemicals are used in a way that does not endanger health or the environment. There is no prophylactic use of pesticides, except in specific situations identified in national Best Practice guidelines. Where agrochemicals are used that are categorized as World Health Organization Type 1A or 1B, or are listed by the Stockholm or Rotterdam Conventions, growers are actively seeking to identify alternatives, and this is documented.

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The chemical weeds control information such as dosage use, type of active ingredient use according to type of weeds contain in procedure of Manual Lestari 1A number ML-1A/L3-GP1 (0) about justification of chemical use. The units also have working instruction which guide the chemical mixing, quantity of chemical use and also the safe working practice.

All the pesticides use by the estates have been registered in Senarai Racun Berdaftar MPOA April 2007. Approved List of Pesticides Registered for Oil Palm (wef April 2007) “this is to inform that the latest list of pesticides for use in oil palm (food act 1983) is enclosed herewith, Members are advised to use ONLY pesticides which are approved by the Pesticides Board as well as the Food Act”. Pesticides use by the unit are GC Paraquat (e.g. paraquat dichloride), JURU 20F (metsulfuron methyl), ECOMAX (glyphosate isopropylamine), ROUNDUP RAINGUARD (Glyphosate), BASTA 15 (glufosinate ammonium). During the assessment audit team also check the chemical storage and found all the herbicides are comply with the registered list.

The letter from MPOA – Malaysian Palm Oil Board dated 30 October 2007 No.33/2007 regarding Used HDPE Pesticides Containers Recycling Programme related Pesticides containers which have been triple rinse are not categorized as Scheduled Waste and can be recycled. The Guidelines:  The National Recycling Program (Recycling of Used HDPE Pesticides Containers) is under the Department of Agriculture. MPOA is a member of the main committee  Recycling activities are driven by state level sub committees which are chaired by the respective State Directors of Agriculture  All pesticides containers are scheduled waste, however pesticides containers triple rinsed under this Recycling Program are exempted from scheduled waste classification and therefore could be recycled  To be formally included in this Recycling Program, MPOA branches will have to invite the officers to attend their sub-committee meeting During the field observation auditor team observe the pesticides storage meets the regulatory requirement for example spill containment, ventilation, labeling, separation and safety tools, however during audit team found nonconformance: 1. Besout.01 auditor found ex-pesticides containers disposed in the smallholders/settler’s own managed land and not properly stored or managed. 2. In the chemical storage area of Besout.07 estate there was a container still filled with pesticides in open area and the chemical spill directly into the drain flow without proper mitigation control Nonconformance 2014.06 with major category Observation 11 October 2014 and 27 October 2014  Root cause: Lack of enforcement of management.  Corrective action: 1. Provide training to the settlers and employee management related to toxins accordingly. 2. Letter of Instruction for the settlers in order to manage pesticide containers properly. 3. Build a proper reservoir to trap water containing toxins that will not flow into the drain.  Preventive action: Periodic checks will be made on management and audit in the RSPO.  Auditor conclusion: The management unit has shown the evidences of training records and proper storage installment in the form of photographic and records to the auditor team. The evidences are available. Nonconformance 2014.06 is closed

Inspection to chemical storage audit team found all the chemicals were labeled in Bahasa Malaysia and the Material Safety Data Sheet (MSDS) are stored in information board. During the assessment auditor interviewing the workers which use the pesticides and reveal all the workers have understand the usage and hazards of each chemical they are use.

Available evidence of medical screenings of chemical sprayers for example the medical test to 10 workers on 3 September 2013 conducted by lDOSH registered doctor (DR Vigneswaran S. JKKP Kes HQ/08/DOC/00/311) and documented in Baseline Surveillance Report On Occupational Exposure to Organo-Phospate (Pesticides), the screening covered eye, respiratory system, Gastrointestinal, Central Nurveous System, Urine, Blood, S.Cholinesterase and Final Diagnose. The medical check result shown there were no workers have low blood cholinesterase levels. For migrant workers there ae evidences of the medical checkup from FOMEMA the institution which pointed by the SPO – 4006a.5 Page 34 Prepared by Mutuagung Lestari for BESOUT POM – Felda Global Ventures (FELDA)

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government. Based on interview with the chemical sprayers and fertilizer workers known that all the workers have been annually following the medical check and surveillance and the result known by the workers and no complaints against skin disorders or rashes, breathing difficulties or nail problems.

Based on document observation and field inspection there are only males workers employed as pesticides sprayers at Besout-01, Besout-04 and besout-07 estates, however the units have a policy and announcement regarding Women Workers Agrochemical Control (“Pengendalaian Agrokimia oleh Pekerja Wanita”) publish on 4 June 2014 explain the prohibition to pregnant and breast feeding female workers to conducting the work with chemical and will be replace with other activities.

The estates management units of Besout-01 and Besout-07 have shown the evidence of there was no World Health Organisation Type 1A or 1B, or listed by the Stockholm or Rotterdam Conventions are use, however the units use the Paraquat a.i to controlled the weeds in the operational area. Based on the chemical stock card the units have shown the reducing of the paraquat from year 2012 until 2014 and programming to reduce the application. There is no evidence of aerial spraying carried out by the management unit.

Based on interview with the FELDA representative, there is no buyer has yet requested CPO testing for chemical residues.

Records of chemical usage, spraying location, dates of application have been inform daily and well records and maintain by the management units. Auditor have request the spraying records and shown the February 2009 chemical monitoring book. The pesticides documents records are kept in storage and the past five years records are available.

4.6.3 Status: Nonconformance 2014.06 with major category is closed. 4.7 An occupational health and safety plan is documented, effectively communicated and implemented. Occupation Safety and Health plan in compliance with OSH Act 1994 and Factory Machinery Act 1967 was documented and implemented adequately.

OSH policy was clearly displayed at Felda Besout POM and in estates office. Workers had demonstrated awareness towards occupational safety and health policy. Risk assessment carried out on all operations where health and safety is an issue (ex. Noise exposure, pesticide/ chemicals exposure , accident, fire)

Felda Besout POM and its estates have established their accident reporting KPI and incident monitoring implementation according to DOSH (JKKP) requirements. Procedures have been documented and actions have been implemented on the OHS issues concerned. Awareness and training programmes planned for the year 2014 was consistently implemented. Evidence of training on the safe working practices of workers involved in pesticides spray, use of fire extinguisher awareness and understanding of MSDS/CSDS. First aid boxes were sighted at both Felda Besout POM and estates.

Precautions attached to products properly observed and applied to workers in all estates. Appropriate PPE (safety boots, helmets, rubber boots, cartridge masks, safety goggles, gloves) verified to be provided. Felda Besout PMU had provided the appropriate PPE at the place of work to cover all potentially hazardous operations such as pesticide applications and harvesting. The Safety and health officer was responsible for overall in charge of safety and health planning operation and coordination. Safety meetings have been adequately conducted in POM and Estates. Adequate fire extinguisher and hose reels found to be located at strategic locations operational and maintained in good conditions. Training for the estates workers in first aid was carried out and records maintained. First aid equipment was available at Felda Besout POM, estates and at worksite.

However , OSH Plan has not been effectively implemented at certain areas e.g.:

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a) ) First Aid box was found to be in poor condition at the boiler area at the POM b) Fire extinguishers at Felda Besout 7 estate office were found to be overdue for maintenance. c) Several workers at Besout 1 –harvesters and loose fruit pickers were not provided footwear PPE by estate management. (Nonconformance 2014.07 with major category) Observation 11 October 214  Root cause: Lack of enforcement from the management.  Corrective action: 1. Replace the original first aid boxes that were dirty and dusty. 2. Prepare a first aid box for all supervisors and ensuring taken to the estates. 3. Service all fire extinguishers that has expired. 4. Provide safety shoes for all reapers and gatherers of the relay.  Preventive action: The periodic reviews by the plantation management and The RSPO Internal Auditor.  Auditor conclusion: The management unit has shown the evidences of first aid box replacement and the fire extinguisher service records in the form of photographic and records to the auditor team. The evidences are available. Nonconformance 2014.07 is closed

Stakeholder interview with field staff, workers, scheme smallholders of the Felda Besout PMU revealed that OSH plan which is in compliance with OSH Act 1994 and Factory and Machinery Act 1967 (Act139) has been effectively implemented. Field observations verified that all staff, workers, contractors, smallholders were aware and complied with OSH Plan which included requirements for PPE, safety awareness thus were enabling workers to perform their jobs in a safe manner.

Records of all accidents have been adequately maintained by the POM and Estates OSH PIC. Lost Time Accident (LTA) has been monitored and recorded and submitted to JKKP as per legal requirement. The LTA Rates for Mill and Estates for 2014 is zero (0) to date.

Based on the field stakeholder survey, it was confirmed that there were no lost time accidents. Field observations also verified that all staff, workers, contractors, smallholders were aware and complied with safety requirements and confirmed that there were no lost time accidents.

Local staff and workers are covered by SOCSO (Employee Social Security Act 1969) as per local labour laws. All foreign workers e.g.: from Indonesia, Bangladesh are covered by private sector insurance ETIQA as required by local labour laws.

Stakeholder Interview with local employees and foreign workers confirmed that they have been covered by insurance as stated above. Field observations verified that local employees and foreign workers were indeed covered by insurance as stated above.

4.7 Status: Nonconformance 2014.07 with major category is closed. 4.8 All staff, workers, smallholders and contractors are appropriately trained.

Felda Besout POM/ Estates Training plans were available for FY2014 approved by the respective mill and estate managers. A formal training programme on all aspects of RSPO Principles and criteria has been established and implemented. The trainings conducted were both internal and external.

Appropriate training for various categories of operators, including all Felda Besout field staff, workers, scheme smallholders and contractors with regards to their duties and training needs had been planned and found acceptable. Some examples of employee training is listed below:

a) First-Aid Training b) Safety Awareness and PPE Training SPO – 4006a.5 Page 36 Prepared by Mutuagung Lestari for BESOUT POM – Felda Global Ventures (FELDA)

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c) Chemical Safety Training & HIRARC d) Fire-Drill / Emergency Response Procedure (ERP) e) RSPO Awareness Training f) Gender Issues Awareness Training

Mill and estate PIC have been adequately trained on chemicals used and related laws, such as Chemical Health Risk Assessment (CHRA), which is an assessment that has to be conducted by the employer in the workplace arising from the use, handling, storage or transportation of chemicals hazardous to health in their workplace as required by the Occupational Safety and Health Act 1994 (Use and Standard of Exposure of Chemicals Hazardous to Health) Regulation 2000.

Observation: However the Training Needs Analysis (TNA) could be further enhanced by implementing a more structured methodology for conducting training needs analysis.

Based on the field survey, there was training dissemination about harvesting, pesticide spraying and manuring technique by estate management periodically. There was also a recording of training for all employees both Felda Besout estate’s employees and mill’s employees for each level. In this recording material, there was several information: name of employee, number of employee, position, title of training, time, place, instructor, and certificate. Field observations verified that all workers were competent and were able to perform at their job according to the requirements.

Status: Observation (Refer to Observation Summary)

PRINCIPLE #5 Environmental responsibility and conservation of natural resources and biodiversity

5.1 Aspects of plantation and mill management, including replanting, that have environmental impacts are identified, and plans to negative impacts and promote the positive ones are made, implemented and monitored, to demonstrate continuous improvement. Management unit has identified the environmental impact of mills and plantaton as shown by document of Identification of environmental aspect in oil Palm Esate and Plam Oil Mills, including evaluation of it’s significance (form number FPI/L4/QOHSE-1.7) which contains following informations: 1) activity / product / sevice, 2) Type of operation (N / A / E), 3) Input, 4) Volume, 5) Output to land / water / air, 6) Impact, 7) Evaluation of significance to determine the significance of the impact, 8) criteria for assessing the significance of impacts (criteria for evaluation of environmental Impacts). These documents are updated periodically every year.

For social impact, management unit has also identified the positive and negative impacts of plantation to the surrounding communities and it’s management plan on August 5, 2014, through a participatory stakeholder meeting arranged by the management unit (list of attendance and minutes of meetings are available).

To avoid negative impacts of estate and mills operation, management unit has developed a plan to mitigate the negative impact as shown by the Environmental Impact Register Form and it Significance which is updated periodically. The document contains 353 management activities in the mills and its impact. In the documents, management unit has identified smoke from EFB burning in incenerator has significant impact to environement. However there is lack evidence of monitoring of the negative impact of biomass burning in incenerator (Nonconformance 2014.08 with minor category).

In addition to mills, improvement plan is also available for the estate in form of list of environmental impact from agricultural activites, waste and pollution. Examples of significant environmental impacts identified are: contamination of soil and water activity from chemical uses, pecticide and herbicide use, waste destruction. Action plan: safe reuse / recycle, providing rinsing station for 3 times rinsing of toxic pesticide container waste, providing temporary storage for SPO – 4006a.5 Page 37 Prepared by Mutuagung Lestari for BESOUT POM – Felda Global Ventures (FELDA)

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pecticide containers that have been rinsed, reduce toxic spill to the ground through provison of concrete floor for pecticide mixing. Status:

5.1.2 Nonconformance 2014.08 with minor category. 5.2 The status of rare, threatened or endangered species and 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 their conservation taken into account in management plans and operations. The company has conducted identification of HCV area in Felda Besout Complex as shown by the Report of HCV Identification in Felda Besout Complex. However, management units needs to improve the quality of the HCV identification report documents by describing in more detail some important information as follows (but not limited to): the team members and their qualification, basic biophysical data such as: land cover map, river and conservation area, slope map, and evidence of external stakeholder participation (Observation/OFI No.4) .

The report of HCV identification also contains the HCV management plan (riparian in Besout 1 and 7 and riparian forests in Besout 1 and 2) such as: demarcation of riparian area boundary in accordance to the guidance from DID, Monitoring of river reserve area, dissemination to the workers and settlers, Marking on the map and in the field, monitoring of compliance to the prohibition, awareness and extension to the stakeholders by forestry officials, and put signboard on the hunting prohibition particularly in Besout 1 and 2.

To support wildlife conservation and avoid illegal hunting, the management unit has undertaken several actions such as: Installation of hunting prohibition signboard at in access road, socializing wildlife protection to the stakeholder through consultation and communication, and notification wildlife hunting prohibtion to the settlers. Status: Observation for indicator Major 5.2.1. 5.3 Waste is reduced, recycled, re-used and disposed of in an environmentally and socially responsible manner. Management unit has identified all waste products and sources of pollution in mills and estate, as shown by the Environmental Aspect and Impact Assessment Form (identification and evaluation of environmental aspect of significance) number FPI/L4/ QOHSE-1.7. The document is updated every year, and the latest update was made in February 2014. Amongst the identified aspects are: transportation, oil spills, POME, smoke from boiler, scheduled waste, etc.

Mitigation plan for the identified waste and pollution sources available in the Environmental Aspect and impact Significance Form which has been updated on a regular basis in accordance to the effective impact of identification documents (Form FPI / L4 / QOHSE 1.8) . Summary of action plans for some waste and pollution sources are:

No Sorce of waste / Summary of action pollution 1 Scehduled waste Transported by licensed third party 2 POME Biogass plant for methane capture, discharge to waterways after processed in WWTP 3 Boiler emission Periodic monitoring and maintenance of boiler 5 Domestic waste Reuse or recycle 6 Chemical / pecticide Recycle or Reuse after 3 times rinsing containers

For effluent treatment, there is standard operating procedure (SOP) applied byt the management unit as seen in the Operations Manual (EMS / Environmental management) for Palm Oil Mills, published and circulated by Felda Palm Industries SDN BHD in years 2001. The SOP contains at least 54 processes in mills including: Effluent Management, Management of hazardous chemicals, scheduled waste Management, Management of oil palm waste, disposal of metal / iron waste, machine maintenance, emergency procedures, equipment, etc. The Fertilizer which was stored in the Besout.07 storage area has potential to spill directly into the drain without proper mitigation control. (Nonconformance 2014.09 with minor category).

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Document verification and field check showed that scheduled waste disposal system in the mills and estate has met the official requirement (regulation). Records of scheduled waste disposal can be seen in the scehduled waste inventory report which contains routine scehduled waste inventory and transportation of waste by authorized third parties such as: SW305 (gear & engineering) transported by Aliran Alam Segar Sdn Bhd; SW 410 transported by Syntax System Solution; SW 306 transported by Conservation Resources Sdn Bhd.

Management unit can also show records of periodic biomass use monitoring, especially fiber and shells for boiler fuel (recycle). The available monitoring data shows that the recent usage of biomass for boiler fuels are as follows : Item Usage (Metric Tones ) Mei June July Fiber 2,311.18 2.604.64 2,722.9 Shells 1,237.91 1,395.09 1,458.43

Status:

5.3.2 Nonconformance 2014.09 with minor category. 5.4 Efficiency of energy use and use of renewable energy is maximized. Document verification shows that management has been monitored the use of renewable energy (from biomass) in a regular basis. Efficiency analysis by the management unit shows that average energy produced by biomass burning approximately 100 KWH / MT biomass. In addition to biomass fuel, the management unit has also installed a biogas plant (methane capture) as an alternative energy source. The energy generated from the methane capture installation is around 60 KW / H per month.

Management unit can also shows a report of regular monitoring on fossil fuel consumption, both in palm oil mills and estate. For the palm oil mills, ratio of fossil fuel consumption to tonnes of processed FFB is around 0.48 liters per tonne FFB (in year 2014). Status: Full compliance 5.5 Use of fire for waste disposal and for preparing land for replanting is avoided except in specific situations, as identified in the ASEAN guidelines or other regional best practice. There was a policy issued by FELDA Plantation Sdn Bhd about the prohibition of open burning in their areas of plantation. This policy declared on July 12, 2011 and also covered in the Procedure Manual of Plantation (ML-IA/L2-P05 March 2012. This policy had been communicated to all workers in FELDA Plantation Sdn Bhd, and also the contractors. During observation and interviewing on field to the Staff of FELDA they understood of this policy that shall be implemented. Based on interviewing to the FELDA staff and workers informed that the previous crops had been felled down and chipped the crops or chipping methods. During the audit there was not found the chipped of the crops. Based on visiting to the fields there was no found the evidence of burning wastes including to domestic wastes. For the domestic wastes had been managed by separated wastes between organic and an-organic wastes. For organic wastes had been managed for composting or utilized for organic fertilizers Status: Full compliance

5.6 Plans to reduce pollution and emissions, including greenhouse gases, are developed, implemented and monitored. Plans to reduce pollution and emissions, including green house gasses are incorporated in the Environemntal Aspect and impact Significance Form number FPI / L4 / QOHSE-1.8. The document describes the SOP and directives for mitigation of pollution and emissions, including greenhouse gassses. The plan document is updated on a regular basis in accordance with the impact identification document. The latest update is available for February 2014 which was approved by mills and estate managers.

As previously explained in criterion 4.3, there is peatland area in Besout 6 for approximately 123.24 hectares. For the peat land management, the company has made a blue print (design) of trenches and peatland management facilities. As an implementation documentation, there are records of ditch making (4 x 3 x 2 m) and establishment of control dam SPO – 4006a.5 Page 39 Prepared by Mutuagung Lestari for BESOUT POM – Felda Global Ventures (FELDA)

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to regulate the water level in the channel. Status: Full compliance PRINCIPLE #6 Responsible consideration of employees and of individuals and communities affected by growers and mills

6.1 Aspects of plantation and mill management, including replanting, that have social impacts 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 the continuous improvement. The social impact assessment had been done for all estates including the palm oil mill. Based on observation and interviewing in Besout 7, 1 and 4 to the company staff, they showed the meeting records of stakeholders related to the plantation activities against social impact assessment which had been done regarding gathering information for positive and negative impact of social impact assessment and provided the action plan. There was stakeholder record meeting including evidences of the attendance list of communities inside and out of the estates and POM, internal and external workers incl. migrant workers, teachers, Growers (Peneroke), contractors, government agencies, and other interested peoples. Based stakeholder meeting FELDA had provided the documentation of the social impact assessment that consists of the positive and negative impact which had been identified and provided the action plan in time frame and defined the personal in charges for their monitoring the progress, such as improvement of educational and healthy facilities, communication and transportation, the religions and cultural and also the possibility of extra incomes. The identified of social impact assessment was provided the action plan in time frame and defined the personal in charges for their monitoring the progress. The documented social impact assessment (SIA) had been established for the estates (Besout 1 to 7) including the Palm Oil Mill (POM). The SIA documentation involved the affected parties as internal and external stakeholders. The internal stakeholder involved was held through the questioners, evaluating and providing the action plan for mitigating and monitoring. For the external stakeholders had been conducted by meeting on 5 August 2014 (attended more than 60 persons), evaluated and provide the summary for being taken action, but this document was not adequate in specifically to cover a time table with the responsible for mitigation and monitoring. CAR 2014. 10 with minor nonconformance There were questioners as a tool that the company used for gathering information related to provide the social impact assessment. The questioners should be completed be more easily evaluating and providing the summary for action plan (Observation/OFI No.6).

Minor 6.1.3 Status: Nonconformance 2014.10 with minor category. 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. The company had showed the communication and consultation procedure (ML-1A/L2-PR3 issued March 2012). This procedure was valid for Estates and Palm Oil Mill and had been distributed and controlled and available on sites. The method of communication by directly meeting, written letter and also announcement to the all stakeholders that effected against the company activities. The procedure also managed regarding the complaint from external and internal stakeholders and the response for conclusions. There was the personal in-charge who had responsible for the communication and consultation to all of stakeholders for estates and palm oil mill

There is the documented procedure for communication and consultation (ML-IA-/L2/PR) for palm oil mill and all estates (Besout 1 to 7) and the company had been involved the effected parties (internal and external stakeholders) consist of settlers, contractors, government agencies, eminent persons and private estates; and documented and recorded the all of their comments and provided the summary for action to be taken. Due to opportunity for improvement for ensuring the stakeholder was still relevant related to the action to be taken in response the company should provide the mechanism periodically review the updated stakeholders and be more wider getting inputs such as the NGO (Observation /OFI No.7)

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6.3 There is a mutually agreed and documented system for dealing with complaints and grievances, which is implemented and accepted by all parties. There was a procedure for the handling or managing complaint (internal and external) namely ML IA/L2 PR4. This procedure mentioned regarding the steps of process to handling the compliant that consist of step-1 discussion to local personal in charged (e.g. Each estates and POM), step-2 discussion to head of section, step-3 discussion to Management Unit or manager, step-4 Head Quarter in Kuala Lumpur, and Step-5 Government Agencies that managing the Human Resources in KL. All of these steps should not follow in sequences as above, but hope enough in the level if local persons and actually there was no complaint happened during the FELDA operated.

The estates having the mechanism or procedure of complaint and the communication. The company already provided communication to effected or interested parties (dated on 5 August 2014) for consultation. During observation to one of the external stakeholders namely Farmer under managed by FELCRA informed that there was complaint about shepherd from farmer (under Felda managed). This complaint was already submitted to the owner of shepherd (under Felda) but there was no response. CAR 2014. 11 with minor nonconformance

Based on interviewing to the stakeholder at local community and farmers (Head of Peneroke or Farmer around Besout- 7) and also to the stakeholder consultation to the head of labour workers, gender committee, internal workers and others, informed from them that the FELDA had open for communication if any compliant and there was box complain in each estates and also in the Palm Oil Mill when the stakeholders would like to submit the complaining because of affected or impacted of the company activities.

Minor 6.3.2 Status: Nonconformance 2014.11 with minor category.

6.4 Any negotiations concerning compensation for loss of legal or customary 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. There was no occurred or happened the compensation regarding the land ownership and/or customer rights issues, but the company (FELDA) has procedure for compensation calculating (ML-1A/L2-PR12(0) Issued March 2012. In the procedure mentioned that the resolution will be processed with the involved parties regarding the issues raised and based the negotiation the compensation will be given in accordance with the calculating of compensation and all of negotiation will be involved the government agency such as Pejabat Tanah dan Jabatan Kemajuan Orang Asli (or the land government agency and the origin communities government agency).

Status: Full compliance 6.5 Pay and conditions for employees and for employees of contractors always meet at least legal or industry minimum standards and are sufficient to provide decent living wages. The company demonstrated the documentation of agreement (pay and condition) for their employees in each estate for example: Besout-1 and also in the Palm Oil Mill (POM) for example: operator levels. All of agreement workers were valid and controlled. But during the observation in the estate (Besout-1) cannot showed the agreement of their foreign workers (or as subcontractor) for examples the foreign workers with passport A.007.4861 and AR-531732. And also during the observation and interviewing on site (field) at the settlers land at Bestout-4 with the subcontractor of fertilizing workers, there was informed that subcontractor’s workers did not have the agreement. This condition did not comply with the legal or industry minimum standard. CAR 2014.12 with minor nonconformance

FELDA used the regulations for all workers agreement in the estates based on labour wages rates for estates KUK Bil 04/2014 (FGVPMSB) approved by government agencies; and also in the Palm Oil Mill (POM) based on the Labour Laws Union Kesatuan Pekerja FPI Semenanjung. This requirement regulated the payment of working hours, incentives, compensation, estates activities, contract workers and temporary workers. All of these agreement were available and can be showed by the company (FELDA).

Based on visiting to the housing facilities and interviewing to the persons related to workers estates or farmers (growers)

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in Besout-1 and Besout-7 and the Palm Oil Mill, the company (FELDA) provided the facilities of housing (internal workers) and the farmers has their own self housing, and provided the facilities of clean water, medical, education (schools); and all these facilities was good enough. Based on interviewing to the head farmers (Peneroke) at Besout-7 informed that the government and FELDA aware with their facilities.

Minor 6.5.1 Status: Nonconformance 2014.12 with minor category. 6.6 The employer respects the right 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. Based on interviewing to staff of Palm Oil Mill and also the estates (Besout1-7), there was labour union namely Kesatuan Pekerja-Pekerja FGV Plantation Malaysia and the Kesatuan Pekerja-Pekerja FPI Semenanjung. The company (FELDA) showed the records meeting of workers under labour union such as meeting on Sept 3, 2013 and Dec 10, 2013 regarding the workers program and signed by labour union steering committee and other records meeting dated on June 17, 2014 regarding the workers problem and the plan for the action taken. All of these records are controlled and documented.

FELDA having and showed the Policy for freedom of association to all workers signed by Director dated on June 28, 2011. This policy in Bahasa Malay that stated that FELDA Management may to all workers and not prevent to using the rights for freedom of association. This policy was published and available in front office of Estates and POM.

Status: Full compliance

6.7 Children are not employed or exploited. Work by children is acceptable on family farms, under adult supervision, and when not interfering with education program. Children are not exposed to hazardous working conditions. FELDA having and showed the Policy for children workers or the minimum age for working that signed by FELDA Director (JKPMSM) dated Dec 20, 2010. In this policy mentioned that FELDA prohibited the children workers with having ages below 17 years old; and if there was the children for supporting his /her parents it shall be under supervised his/her parents and shall not disturbed the children’s schooling. This policy was controlled, documented and available/communicated in the estates. The company also showed the list workers both POM and Estates (Besout 1-7) that there was not workers under 17 years old and prohibited the children workers.

Status: Full compliance 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. The company (FELDA) having and showed the policy of the equal opportunities that signed by FELDA Director (JKPMSM) dated Dec 201, 2010. This policy mentioned that FELDA shall ensure to all workers and candidate workers will provide services with no discrimination based on race, caste, national origin, religion, disability, gender, sexual orientation, union membership, political affiliation, or age. This policy was available both in Estates and POM and distributed, controlled and documented. This policy was also valid for the employees and group including the migrant workers that have not been discriminated. For evidence that the FELDA open for migrant workers, the company issued the announcement (dated on April 30, 2014) for opportunities working as Estates Supervisor and for the interesting workers may come as applicant to the estates management at Besout-7. This announcement was available in front of the office and also in the Head of Farmers (growers) office

Status: Full compliance 6.9 Policy to prevent sexual harassment and all other forms of violence against women and to protect their reproductive rights is developed and applied.

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There was available and showed the policy of sexual harassment and violence that signed by FELDA Director dated June 28, 2011. Mentioned in this policy that FELDA shall ensure this policy was implemented and complied; and FELDA management also maintaining the women rights reproductive and families from harassment and discrimination and concerning the women workers healthy. This policy was controlled, communicated and documented. Based on interviewing to the stakeholder consultation with the representative women gender committee both POM and Estates that this policy had been communicated and implemented and there was no nothing happened.

The established mechanism regarding the grievance related to the policy of sexual harassment and violence was managed by the gender committee that mentioned with the following steps, - The grievance entry to the gender committee. - Processing the grievances to the gender committee - Reporting to the women, family and community Ministry.

Based on interviewing to the gender committee representative was informed that there was no issues or grievance happened regarding sexual harassment and violence.

Status: Full compliance 6.10 Growers and mills deal fairly and transparently with smallholders and other local businesses. The FFB price was open to public (published) to all FFB suppliers which is connected to MPOB price daily. For example: the latest FFB price dated August 12, 2014 for quality A and B is 23.50 RM

There was evidence contractual agreement between FELDA and Growers regarding the FFB enter to the Palm oil MILL (POM) for the price of FFB. This agreement mentioned that the FFB shall comply with the requirements such as the quality FFB received, the calculated fees of FFB, FFB prices against the MPOB updated announcement; and the FFB from growers shall be supplied to the POM under FELDA. Based on interviewing to the growers (Peneroke) at Besout-1, Besout-4 and also to the head of Peneroke at Besout-7 informed that the Growers understood the contract agreement of the FFB

Based on interviewing to the head of farmer (growers) at Besout-7 explained that the FFB entry to the FELDA POM agreed with the FFB price against the MPOB price updated announcement. And there were two types of payment, 1st for grower that managed plantation by FELDA will be paid monthly and all of calculation of FFB price that had been paid by FELDA reported into monthly bill account that received by growers (Peneroke), and 2nd for grower that managed the plantation by their self, the payment had been paid at least a week. Due to the time for payment there was no issues or problems to the growers (Peneroke). Status: Full compliance

6.11 Growers and millers contribute to local sustainable development wherever appropriate. The company (mill and estates) had contributed to local community (settlers) related to sustainable development for examples: at Besout-7 there were providing the transportation for student to school (every time at Besout 1-7) and the supporting transportation for sport days (on March 7-9, 2014), the incentive fees for fatherless child (dated June 18, 2014), the incentive fees for celebrating day after the end of fasting month year 2014.

Due to the opportunity for improvement for ensuring the contribution appropriate to the local communities, it should be the company identify the local need then the company contribution can be prioritized (Observation/OFI No.8)

Status: Complied – Observation – OFI.8

PRINCIPLE #7 Responsible development of new plantings

7.1 A comprehensive and participatory independent social and environmental assessment is undertaken prior to establishing new plantings or operations, or expanding existing ones, and the results incorporated into planning, management and operations.

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There is no new development or expansion of plantation within the area of FELDA Besout complex, only replanting activities. Status: Full compliance 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. There is no new development or expansion of plantation within the area of FELDA Besout complex, only replanting activities. Status: Full compliance 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. There is no new development or expansion of plantation within the area of FELDA Besout complex, only replanting activities. Status: Full compliance 7.4 Extensive planting on steep terrain, and/or on marginal and fragile soils, is avoided. There is no new development or expansion of plantation within the area of FELDA Besout complex, only replanting activities. Status: Full compliance 7.5 No new plantings are established on local peoples’ land without their free, prior and informed consent, dealt with through a documented system that enables indigenous peoples, local communities and other stakeholders to express their views through their own representative institutions. There is no new development or expansion of plantation within the area of FELDA Besout complex, only replanting activities. Status: Full compliance 7.6 Local people are compensated for any agreed land acquisitions and relinquishment of rights, subject to their free, prior and informed consent and negotiated agreements. There is no new development or expansion of plantation within the area of FELDA Besout complex, only replanting activities. Status: Full compliance 7.7 Use of fire in the preparation of new plantings is avoided other than in specific situations, as identified in the ASEAN guidelines or other regional best practice. There is no new development or expansion of plantation within the area of FELDA Besout complex, only replanting activities. Status: Full compliance

PRINCIPLE #8 Commitment to continuous improvement in key areas of activity

8.1 Growers and millers regularly monitor and review their activities and develop and implement action plans that allow demonstrable continuous improvement in key operations. Due to the social aspect that the company implemented there was mechanism through the social impact assessment that will be reviewed periodically or updated. The established action plan regarding the SIA was implemented for maintaining the social issues problem and for improvement that related to the company performance.

Status: Full compliance

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3.2. Summary of Assessment Report of Supply Chain

Clause (Module E) CPO Mills - Mass Balance Requirements

1 Documented Procedures 1.1 The facility shall have written procedures and/or work instructions to ensure the 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 name 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 facilities procedures for the implementation of this standard. There was SOP for Mill RSPO Supply Chain Certification System (FGVPM-RSPO SCCS (issued 1 Dec 2012). This SOP valid for CPO Mill for compliance to RSPO SCCS requirement. The company has reference of RSPO SCCS requirements and the RSPO SCCS Standard Nov 2011 that accompanied with documented procedures. Pengurus Kilang (or the Mill Manager) the person who having responsible and authority over implementing and compliance of SCCS requirements (SOP page 3 of 10). In the SOP mentioned also the persons who has responsible related to implement the SCCS namely Mill assistant manager, weighbridge clerk, operations supervisor, and all persons related to this SCCS requirements.

Status: Full compliance 1.2 The facility shall have documented procedures for receiving and processing certified and non-certified FFBs.

Part of weighbridge clerk (page 4 of 10 of SCCS Procedure) mentioned that the all of FFB received in the truck came from certified estates (RSPO) had stated the certified estates in the FFB delivery document (Nota Hantaran) and all these document will be put into Felda computer system (Mill Performance Report) which indicated the certified and non-certified FFB had been processed become certified with the mass balance status.

Part of Supply Chain Verification –the FFB delivery to Mill (Page 8 of 10), mentioned that the certified and non-certified FFB will be distinguished between certified estates and non-certified RSPO in the documentation of FFB that entry to mill. This condition was indicated to the delivery document (Nota Hantaran) which has information of the FFB address name and CPO Mill name, Contract No of estates/Mill, Product Type, Date of Delivery, FFB Quantity Persons Name who Delivery.

Status: Full compliance 2 Purchasing and goods in 2.1 The facility shall verify and document the volumes of certified and non-certified FFBs received. Part of weighbridge clerk (page 4 of 10 of SCCS Procedure) mentioned that the all of FFB received in the truck came from certified estates (RSPO) had stated the certified estates in the FFB delivery document (Nota Hantaran) and all these document will be put into Felda computer system (Mill Performance Report) which indicated the certified and non-certified FFB had been processed become certified with the mass balance status

The delivery document (or Nota Hantaran) will be checked or verified that certified estates (RSPO) which supplied the FFB had been indicated in the forms. All of this document will be input to the Felda computer system that link to all of process of FFB become the certified CPO with the mass balance status. During observation in the weighbridge, the company showed and explained the verification of volume of certified FFB and SPO – 4006a.5 Page 45 Prepared by Mutuagung Lestari for BESOUT POM – Felda Global Ventures (FELDA)

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non-certified FFB through the delivery document (Nota Hantaran) dated August 12, 2014 and indicated the FFB came from Besout 7, vehicle No. WQP 4762, No Block: 10; and the print out from weighbridge that informed the net weight of FFB 3.60 MT.

Status: Full compliance 2.2 The facility shall inform the CB immediately if there is a projected overproduction. Stated in the SCCS SOP that the Palm Oil Mill will inform to certification body (CB) immediately where the certified CPO is over production from the budget (Page 8 of 10).

Status: Full compliance 3 Record keeping 3.1 The facility shall maintain accurate, complete, up-to-date and accessible records and reports covering all aspects of these requirements. Part of Record Keeping (page 9 of 10) of SCCS Procedure mentioned that the Palm Oil Mill will file and keep the related SCCS documents for 10 years after the company obtained RSPO certification. The document that the company keep the files at least the record of record form of FFB to the CPO and Palm Kernel, the list of certified estates with the name of location and address, the FFB delivery notes, inventory and report of FFB until the delivered CPO/PK, customer contract, the document of mass balance starting from FFB to CPO/PK. The requirement above will be implemented where the company obtained the RSPO Certification. During the audit the company showed the updated records or documentation of FFB received (Nota Hantaran), daily report the FFB received and processed until the CPO/PK had been produced. The updated daily data which had been showed data report dated 26 June 2014 (Stock CPO – 1,061.55 Ton), and 27 June 2014 (Stock CPO – 1,019.15 Ton) Status: complied

Status: Full compliance 3.2 Retention times for all records and reports shall be at least five (5) years. Part of Record Keeping (page 9 of 10) of SCCS Procedure mentioned that the Palm Oil Mill will file and keep the related SCCS documents for 10 years after the company obtained RSPO certification. The document that the company keep the files at least the record of record form of FFB to the CPO and Palm Kernel, the list of certified estates with the name of location and address, the FFB delivery notes, inventory and report of FFB until the delivered CPO/PK, customer contract, the document of mass balance starting from FFB to CPO/PK.

Status: Full compliance 3.3 (a) The facility shall record and balance all receipts of RSPO certified FFB and deliveries of RSPO certified CPO, PKO and palm kernel meal on a three-monthly basis. (b) All volumes of palm oil and palm kernel oil that are delivered are deducted from the material accounting system according to conversion ratios stated by RSPO. (c) The facility can only deliver Mass Balance sales from a positive stock. However, a facility is allowed to sell short. The record of FFB received, processed and the CPO/PK production, including the CP/PK stock and their delivery or dispatch will be verified on ST-2. The information of all production records can be verified on site (POM). The POM had showed the report or record of FFB had been received and processed, the produced CPO and PK, and the delivery of CPO/PK. This record in form of daily report, and monthly report. The data which had been showed the data on Jan to June 2014. For examples: the FFB processed on Jan 2014 (18,200 MT), Feb 2014 (14,640 MT) and the CPO produced on Jan 2014 (3.691.07 MT), Feb 2014 (3,328.82 MT); and the delivery of CPO on Jan 2014 (151.74 MT), Feb 2014 (302.02 MT) and so on. SPO – 4006a.5 Page 46 Prepared by Mutuagung Lestari for BESOUT POM – Felda Global Ventures (FELDA)

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By the daily report the company can show the all of FFB inputs, processed, and become CPO/PK, stock in the CPO/PK Storage and Dispatch CPO and PK.

Status: Full compliance 3.4 The following trade names should be used and specified in relevant documents, e.g. purchase and sales contracts, e.g. *product name*/MB or Mass Balance. The supply chain model used should be clearly indicated. The company have been implementing and evaluating the RSPO Certification of the CPO Mill and their estates. Regarding the contract of certified RSPO product, the Besout Palm Oil Mill (POM) will be found the purchased order from Head Quarter (Jabatan Logistic) or as their marketing department. POM explained that Purchased Order or contract for the certified product (RSPO) will be input to the Mill Performance Report System in the computer system that had been set up; and the inform or mention the supply chain model mass balance. So then, starting from the certified FFB until the certified CPO/PK that there can be showed the RSPO certified product with the mass balance status.

Status: Not Applicable will be verified on the next assessment 3.5 In cases where a mill outsources activities to an independent palm kernel crush, the crush still falls under the responsibility of the mill and does not need to be separately certified. The mill has to ensure that the crush is covered through a signed and enforceable agreement. The POM does not outsourced the Palm Kernel to the independent palm kernel crushing (or Kernel Crushing Palm). All PK deliveries to the Felda KCP (out of Besout Palm Oil Plantation) for producing palm kernel oil (PKO)

Status: Not Applicable will be verified on the next assessment 4 Sales and goods out 4.1 The facility shall ensure that all sales invoices issued for RSPO palm oil delivered include the following information: (a) The name and address of the buyer (b) The date on which the invoice was issued (c) A description of the product, including the applicable supply chain model (Segregated or Mass Balance) (d) The quantity of the product delivered (e) Reference to related transport documentation The Felda Jabatan Logistic managed the certified RSPO for being sold or marketed and the POM of Besout does not issuing the sales invoice of certified CPO/PK. The POM only received the shipping or delivery instruction for CPO/PK and when the Besout obtained the RSPO certification then the Felda Jabatan Logistic will issued the shipping or delivery instruction to Besout POM and indicates the SCCS model which linkage to the Mill Performance Report System in the Computer. Status: Full compliance 5 Training 5.1 The facility shell specifies and provides the training for all staff as required to implement the requirements of the Supply Chain Certification Systems. Part of training of SCCS procedure mentioned that the POM provides the training to the all staff and all persons who involved the implementation of SCCS. The training schedule will be available in the Besout POM and also will be recorded. Besout POM showed the attendance list of persons who involve the training program for SCCS (documented). This training covered for all Felda Company including Best out Palm Oil Mill. There were two persons who had attended the SCCS training program. The records of SCCS training program covered the SCCS training material with the agenda of SCCS that consist of RSPO introduction, SCCS, SCC documentation, concept the mill performance report system, weighbridge and MPR System, e-trace, the measurement after registered e-trace, the documentation for e-trace audit. SPO – 4006a.5 Page 47 Prepared by Mutuagung Lestari for BESOUT POM – Felda Global Ventures (FELDA)

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During the observation and interviewing, there were found the personal in charge who had not understood the SCCS implementation, however the company has not received yet the RSPO Certificate. For examples the persons at: weighbridge, loading ramp, dispatch crude palm oil and palm kernel. All these persons have not been trained for the SCCS; and the evidence who had been trained for SCCS only two persons and not yet for the other key persons.

Observation 27 October 2014  Root cause: Lack of attention from the management on the SCCS training.  Corrective action: Train all the staff that involved in the Supply Chain Certification Systems.  Preventive action: The periodic reviews by the Audit Officer of EKAS and RSPO internal auditors.  Auditor conclusion: The management unit has shown the evidences of all staff involves in supply chain training records to the auditor team. The evidences are available. Nonconformance CAR.2014.13 is closed Status: Non-conformance CAR 2014.13 is closed 6 Claims 6.1 The facility shall only make claims regarding the use of or support of RSPO certified oil palm products that are in compliance with the RSPO Rules for Communications and Claims. The Company had not been certified yet, but the company probably to use the RSPO in their product against the RSPO Rules for Communications and Claims and in line to the RSPO SCCS training materials.

Status: Not Applicable will be verified on the next assessment

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3.3. Conformity Checklist of Certificate and Logo Use

1. Evidence of permission or approval certificate and logo from Certification Body which X or √ submitted by Client ST-2 Will be verified after the management unit certified √ Status: Not applicable

2. Implementation of certificate and logo used by Client comply with size and type (shape) X or√ against Guideline of Logo Use ST-2 Will be verified after the management unit certified √ Status: Not applicable 3. Implementation of Certificate and Logo is not used on product X or√

ST-2 Will be verified after the management unit certified √ Status: Not applicable 4. Controlling of Certificate and Logo, including withdrawing inappropriate logo. X or√

ST-2 Will be verified after the management unit certified √ Status: Not applicable

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3.4. Summary of RSPO Partial Certification.

Summary: At the beginning of 2014, Felda Global Ventures Plantations (FGVP), owns and manages 72 palm oil mills in Malaysia. The time bound plan below highlights both certified units and planning for certification of uncertified units. Effective end Q3, 2014, Felda will be closing one palm oil mill operations. The time bound plan below confirms the status of 71 mills and will be reviewed again during the 1st surveillance assessment.

As of this assessment, Felda has successfully certified 28 mills and have had another 26 mills undergo main assessments between Q2-Q4, 2014. The remaining 17 mills will be audited as per the time bound plan under 1.9 above. 2.1 There is compliance with all applicable local, national and ratified international laws and X or √ regulations. Felda has and follows the “GSA” Group Settlement Act, where all land under FELDA will abide by local and national land laws. I.e. Compliance with legal documents such as the “Land Rules Applicable to the States in Malaysia” and relevant acts.

The group has a common human resource policy which is also cascaded to all operating units. There are several handbooks and guides, shared with employees. Examples: “Syarat-syarat Perkhidmatan Petugas Bergaji Bulan Syarikat Kumpulan” which went into effect on 1st January 2007, explains to employees their benefits and company rules. The “Syarat-syarat Perkhidmatan Pekerja Operasi √ Ladang” was established in 1st May 2010. There is also the “Perjanjian Bersama Kesatuan Perkerja- perkerja Felda Plantations” and “Surat Perjanjian Kontrak Perkerjaan Perkerja Asing”, which are used to educate and inform employees of their rights and responsibilities.

Issues relating to employees is all operating units are monitored on a monthly basis and reported through the monthly Head of Department meetings. Monitoring is also done via e-mail and official communications with the respective departments. For example: PSQM monitors HR related matters with the help of the internal audit team and reviewed by the PSQM Head of Department. Status: Compliance

2.2 The right to use the land can be demonstrated, and is not legitimately contested by local X or√ communities with demonstrable rights. Legal ownership of land and its land use is available for all operating units and demonstrated through √ the respective land titles. For the FELDA settlers program, land titled is covered under the “GSA” Act. Status: Compliance

6.3 There is a mutually agreed and documented system for dealing with complaints and X or√ grievances, which is implemented and accepted by all parties. There is a standard complaints procedure that is communicated to all facilities and locations. The procedure, “Prosedur Menangani Aduan dan Rungutan”, No. Document: ML.1A/L2-PR4(0), is made √ available from the head office and cascaded to all operating units. Status: Compliance

6.4 Any negotiations concerning compensation for loss of legal or customary rights are dealt with through a documented system that enables indigenous peoples, local communities and X or√ other stakeholders to express their views through their own representative institutions. FELDA has a Social Officer based in each regional office throughout the nation, where existing scheme/settlers can share their views and concerns. On a monthly basis, the reports from the Social Officers are shared and reviewed through the monthly Head of Department meetings. Quarterly there √ is a “Mesyuarat Jawatan Kuasa Minyak Sawit Mampan” known as the Sustainability Steering Committee Meeting, where both FELDA and FGVP Head of Departments review on-going matters. The PSQM department will monitor any issues and reviewed with the Head of Department. Status: Compliance

7.3 New plantings since November 2005, have not replaced primary forest or any area required to X or√ maintain or enhance one or more High Conservation Values. FGVP Malaysia through its subsidiary in Indonesia, FGVP Kalimantan, has acquired land. The 2 √ SPO – 4006a.5 Page 50 Prepared by Mutuagung Lestari for BESOUT POM – Felda Global Ventures (FELDA)

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locations are: 1) PT Citra Niaga Perkasa (PT CNP) – 24th February 2011 2) PT Temila Agro Abadi (PT TAA) – 9th July 2013

Both locations have undergone the RSPO New Planting Procedure (NPP): 1) PT Citra Niaga Perkasa (CNP) – 14th January 2013, approximately 14,000 Ha. 2) PT Temila Agro Abadi (TAA) – 30th July 2014, approximately 8,000 Ha.

No negative comments received during the NPP public notification.

In Malaysia, FELDA has land banks that were acquired since the 1950s and has steadily increased their land bank over the past 50 years. These land banks were initial cleared and prepared for crops such as rubber, timber, palm oil and cocoa. As the demand for palm oil increased in the 1990s and 2000s, most of these cleared areas have been converted to palm oil. Given that all these areas were cleared and either prepared or planted with another crop over the past 50 years, the NPP procedure will not apply.

For newly acquired land in Malaysia or any part of the world under FELDA, the NPP procedures will apply. Status: Compliance

7.5 No new plantings are established on local peoples’ land without their free, prior and informed consent, dealt with through a documented system that enables indigenous peoples, local X or√ communities and other stakeholders to express their views through their own representative institutions. For new land acquisitions, the RSPO NPP procedure is followed where the company will complete the required HCV and EIA assessments.

In October 2013, FELDA acquired a mature plantation in Kinabatangan, Sabah. The plantation, √ known as Pontian United Plantation Sdn Bhd, was established in 1977 year, totaling approximately 14,500Ha. Given that this is a matured plantation, the company has year marked the operations for RSPO certification 2017. Status: Compliance

7.6 Local people are compensated for any agreed land acquisitions and relinquishment of rights, X or√ subject to their free, prior and informed consent and negotiated agreements. Any new land acquisition will be done by mean of a participatory process with local villages and land √ owners. No complaints received during this audit process. Status: Compliance

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3.5 Identification of Findings, Corrective Action, Observations, Opportunity for Improvement and Noteworthy Positive Components.

3.5.1 Identification of Findings, Corrective Actions and Observations at ST-2 Assessment CAR Time Closing Ref Std Finding Area Grade Corrective Action Observation Status No Limits Date 2014. Major Records of requests and responses. Beso Major Before The management unit shall Observation 27 October 2014 Closed 27 01 1.1.1 Document observation and interviews ut.04 certifica record and maintain all the  Root cause: There was no proper October with the estate staff known there were te incoming and the record evidence of the response to the 2014 incoming letters received, reviewed and issued associated response letters. incoming letter by the management unit filed. However, there was no record evidence of the response to the incoming  Corrective action: Record and retain letter by the management unit. For all incoming and letters related example, letter by Prof. Dr. Rita answers or feedback Muhamad from Universiti Putra Malaysia dated 17 February 2014  Preventive action: To appoint a regarding Memohon Kawasan person in charge that will be Penyelidikan Kawalan Biologi Di responsible for monitoring all Ladang Sawit (request for conducting applications and feedback each week. research on Besout-04 estate) period March 2014 – February 2015.  Auditor conclusion: The management unit has shown the evidence in the form of photographic and records to the auditor team. The evidences are available. 2014. 4.3.1 Appropriate slope and soil map. Estat Minor S1 Management unit has to Observation 27 October 2014 Open 02 Management units has implemented soil e provide aprropriate soil and  Root cause: Topographic maps and conservation techniques, nevertheless topographic maps to maps of soil series are not available on there are still lack evidence of apropriate support minimalization of the estate and plans slope and soil map as basic information soil erosion and for soil conservation. degradation.  Corrective action: Provides topographic maps and maps of soil series for each farm and plans

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 Preventive action: Regional management must ensure that each program and farms supplied with topographical maps and maps of soil series.

 Auditor conclusion: the maps still not available and shown to the auditor team. 2014. 4.3.4 Subsidence and water surface Beso Minor S1 Management unit has to Observation 27 October 2014. Open 03 monitoring. ut.06 provide aprropriate  Root cause: Lack of enforcement and Management unit has established some evidence of subsidence and review records of estate management. water management facilites in peat land water surface monitoring in to maintain water surface at the drainage. order to minimize  Corrective action: Setting the record Nevertheless, ther is still lack of evidence subsidence of peat soils books and an officer responsible for of periodic subsidence monitoring and recording every time the monitoring is water surface monitoring. made.

 Preventive action: Manager or Assistant Manager will review the record books every month.

 Auditor conclusion: Management unit have not shown the type of the records book to the auditor team 2014. 4.4.1. Riparian zone protection. Beso Major Before Mangement unit has to Observation 11 October 2014 and 27 Closed 27 04 Management has identified Chawang ut 01 certifica provide evidence of October 2014 October River in Besout 1 and 7 as conservation te appropriate  Root cause: Budget allocation for 2014 area. However, there is still lack of and issued protection measures of RSPO just been approved by the top evidence of riparian protection measures water riparian within the management. Buffer zone signs, to protect riparian zone from chemical Beso estates trespassing sign and using chemicals pollution (e.g. marking of chemical area ut 07 are still in the preparation process and boundary, extension to chemical worker, during the visit only half completed and clear sign board, etc.) installed. SPO – 4006a.5 Page 53 Prepared by Mutuagung Lestari for BESOUT POM – Felda Global Ventures (FELDA)

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 Corrective action: - Provide adequate Sign Board "Buffer Zone" and the sign board "No Trespassing” and Using Chemicals" - Buffer zones sign will be put on the respective location clearly (either on trees or poles with red paint and white). - Remove the letter of notification or warning, or provide an explanation on a ban on pesticides and fertilizer in the buffer zone to the staff, workers, contractors and settlers. - Make sure there is no use of chemicals in the Buffer Zone area.

 Preventive action:  Management of the field will ensure that signs are installed properly, and all staff, employees, contractors, and settlers briefed and understanding regarding boundary demarcation and buffer zones.  The estates will maintain signs and spikes boundaries at least every 2 months to ensure that it is in a good condition.  Auditor conclusion: The management unit has shown the evidences of signboards and notifications in the form of photographic SPO – 4006a.5 Page 54 Prepared by Mutuagung Lestari for BESOUT POM – Felda Global Ventures (FELDA)

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and records to the auditor team. The evidences are available. 2014. 4.4.3 Water quality monitoring. Beso Major Before Mangement unit has to Observation 11 October 2014 and 27 Closed 27 05 HCV identification document has showed ut 01 certifica provide evidence of October 2014 October that in Besout 1 and 7 area there is te appropriate  Root cause: Awareness of the need 2014 outgoing water into main natural and issued monitoring of outgoing for water quality monitoring has been waterways (Chawang River) that needs water into main natural given but still lack of enforcement. to be monitored periodically. Beso waterways at a frequency Nevertheless, there is lack of evidence of ut 07 that reflects the current  Corrective action: Chawang river water quality monitoring to estate activities which may 1. Take water sample in and sample out ensure that the qaulity meet the have negative impacts of the estates and sent for analysis for requirement . the water quality. 2. Mark on the map point water samples taken.

 Preventive action: Periodic checks will be made on management and the RSPO internal audit team.

 Auditor conclusion: The management unit has shown the evidences of signboards and notifications in the form of photographic and records to the auditor team. The evidences are available. 2014. 4.6.3 Pesticides and ex-containers shall be Beso Major Before The unit management shall Observation 11 October 2014 and 27 Closed 27 06 stored in appropriate place. ut 01 certifica manage all the pesticides October 2014 October Field observation auditor found several te stored in accordance to the  Root cause: Lack of enforcement of 2014 non-conformances: and issued Occupational Safety and management. 1. Besout.01 auditor found ex-pesticides Health Plan. containers disposed in the Beso  Corrective action: smallholders/settler’s own managed ut 07 1. Provide training to the settlers and land and not properly stored or employee management related to managed. toxins accordingly. SPO – 4006a.5 Page 55 Prepared by Mutuagung Lestari for BESOUT POM – Felda Global Ventures (FELDA)

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2. In the chemical storage area of 2. Letter of Instruction for the settlers in Besout.07 estate there was a order to manage pesticide containers container still filled with pesticides in properly. open area and the chemical spill 3. Build a proper reservoirs to trap directly into the drain flow without water containing toxins that will not flow into the drain. proper mitigation control.

 Preventive action: Periodic checks will be made on management and audit in the RSPO.

 Auditor conclusion: The management unit has shown the evidences of training records and proper storage installment in the form of photographic and records to the auditor team. The evidences are available. 2014. 4.7.1 OSH Plan documentation and POM Major Before The unit management shall Observation 11 October 214 Closed 11 07 implementation. certifica manage all OSH related  Root cause: Lack of enforcement from October 1) First Aid box was found to be in poor te requirements in accordance the management. 2014 condition at the boiler area at the POM issued to the Occupational Safety 2) Fire extinguishers at Felda Besout 7 and Health Plan.  Corrective action:

estate office were found to be 1. Replace the original first aid boxes Beso that were dirty and dusty. overdue for maintenance. ut 7 2. Prepare a first aid box for all supervisors and ensuring taken to the 3) Several workers at Besout 1 – estates. harvesters and loose fruit pickers were 3. Service all fire extinguishers that not provided footwear PPE by estate has expired. management. Beso 4. Provide safety shoes for all reapers ut 1 and gatherers of the relay.

 Preventive action: The periodic reviews by the plantation management

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and The RSPO Internal Auditor.

 Auditor conclusion: The management unit has shown the evidences of first aid box replacement and the fire extinguisher service records in the form of photographic and records to the auditor team. The evidences are available. 2014. 5.1.2 Monitoring of negative impact of Beso Minor S1 Mangement unit has to Observation 27 October 2014 Open 08 biomass. ut.07 provide appropriate  Root cause: Lack of enforcement of Management unit has identified smoke evidence of negative impact the mill management from EFB burning in incenerator as monitoring of biomass significant impact to environemnt in EIA burning in incenerator  Corrective action: Provides management plan. However there is lack monitoring records fumes from the evidence of monitoring of negative impact incinerator to record readings every of biomass burning in incenerator time the EFB is produce.

 Preventive action: Review by the management of the factory every week and periodic review by the RSPO Audit Officer and EKAS Officer.

 Auditor conclusion: Management unit have not shown the incinerator monitoring records which mentioned to the auditor team 2014. 5.3.2 Waste and pollution mitigation Beso Minor S1 The management unit Observation 27 October 2014 Open 9 implementation. ut.07 should implement the waste  Root cause: Lack of monitoring of the The Fertilizer which was stored in the and pollution mitigation to estates management. Besout.07 storage area has potential to avoid pollution. spill directly into the drain without proper  Corrective action: Build a sum in mitigation control. order to avoid spills Drain Store Steel will settle and does not flow directly into SPO – 4006a.5 Page 57 Prepared by Mutuagung Lestari for BESOUT POM – Felda Global Ventures (FELDA)

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the drain.

 Preventive action: 1. Supply Clerk will monitor the store every week so that the sum is in good condition and no spillage of fertilizer. 2. Regular monitoring by management and the Audit RSPO

 Auditor conclusion: Management unit have not shown the evidence of drain store installment to avoid spills to the auditor team 2014. 6.1.3 Mitigation and monitoring of SIA Mill Minor S1 The company shall provide Observation 27 October 2014 Open 10 documentation. and the timetable with  Root cause: Mitigation Plan is still not The documented social impact Estat responsibilities for adequately prepared for the new SIA assessment (SIA) had been established es mitigation and monitoring is that was made a week before the audit for the estates (Basout 1 to 7) including reviewed related to social is carried out. the Palm Oil Mill (POM). The SIA impact that shall be documentation involved the affected identified and have a plan  Corrective action: parties as internal and external to mitigate the negative 1. Review Plan for SIA Mitigation stakeholders. The internal stakeholder impacts and promote the evaluation for Stakeholders within and involved was held through the positive ones are made, outside stakeholders and assign each questioners, evaluating and providing the implemented and officer responsible for the action plan for mitigating and monitoring. monitored, to demonstrate implementation of the mitigation plan. For the external stakeholders had been continuous improvement 2. Organise meetings and review the conducted by meeting on 5 August 2014 actions done based on the mitigation (attended more than 60 persons), plan. evaluated and provide the summary for being taken action, however this  Preventive action: Monitored by document was not adequate to cover a estates management through monthly time table with the responsible for meetings and periodic review by RSPO mitigation and monitoring. Internal Audit.

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 Auditor conclusion: Management unit have not shown the evidence of revised and the implementation of mitigation plan to the auditor team 2014. 6.3.2 Complaint and communication. Estat Minor S1 The system resolves Observation 27 October 2014 Open 11 The estates having the mechanism or es disputes in an effective  Root cause: Announcement on the procedure of complaint and timely and appropriate complaints procedure has been made communication. The company already manner that there is a to all the department heads and the provided communication to affected or mutually agreed and public through stakeholder consultation interested parties (dated on 5 August documented system for has been undertaken and is still not 2014) for consultation. dealing with complaints and accessible to all members of the During interview, one of the external grievances which is department and the community. stakeholders informed that there was a implemented and accepted complaint about shepherd from by all parties  Corrective action: To disseminate the smallholders (under Felda management). information to all levels of personnel This complaint was already submitted to within the department and the the smallholders (under Felda) but there community through memos, letters, and was no response. social programs.

 Preventive action: To appoint an officer responsible for this purpose.

 Auditor conclusion: Management unit have not shown the corrective action evidence of information to all levels of personnel within the department and the community through memos, letters, and social programs to the auditor team 2014. 6.5.1 Worker agreement. Estat Major Before The Company shall provide Observation 27 October 2014 Closed 27 12 The company demonstrated the es certifica the documentation of pay  Root cause: All workers and October documentation of agreement (pay and te and conditions for contractors agreements held by the 2014 conditions) for their employees such as issued employees and for workers themselves, and many have administration assistant of Estates employees of contractors been lost and damaged. Besout-1. But the estates were not able always meet at least legal SPO – 4006a.5 Page 59 Prepared by Mutuagung Lestari for BESOUT POM – Felda Global Ventures (FELDA)

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to show the agreement of their foreign or industry minimum  Corrective action: Redo the workers workers under subcontractor. For standards. and contractors agreement. Explain to example, the foreign workers with them the content of the agreement and passport numbers: A.007.4861 and AR- ask them to sign. Distribute them a 531732 copy of the contract to each person.

In addition, during the observation and  Preventive action: The management interviewing on site (field) at the settlers of the estates will save a copy of the land at Besout-4 with the subcontractor of workers contract that are starting this fertilizing workers, the auditors were year so it is not damaged and missing. informed that subcontractor’s workers also did not have a documented  Auditor conclusion: Management unit agreement. This condition did not comply have shown the corrective action with the legal or industry minimum evidence of revised workers and standard. contractors agreement to the auditor team. The evidences are available. 2014. 5.1. of Supply chain training. Mill NC 3 The Palm Oil Mill shall Observation 27 October 2014 Closed 27 13 SCCS During the observation and interview months specify and provide the  Root cause: Lack of attention from the October Nov sessions, it was found that there were training for all staff as management on the SCCS training. 2014 2011 several personnel who had not adequate required to implement the (Modul knowledge for SCCS implementation. For requirements of the Supply  Corrective action: Train all the staff e E) example, the persons at: weighbridge, Chain Certification that involved in the Supply Chain loading ramp, dispatch crude palm oil Systems. Certification Systems. and palm kernel. These persons and other key persons have not been trained  Preventive action: The periodic for the SCCS for ensuring the supply reviews by the Audit Officer of EKAS chain system was in place and ready to and RSPO internal auditors. be implemented.  Auditor conclusion: The management unit has shown the evidences of all staff involves in supply chain training records to the auditor team. The evidences are available.

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3.5.2 Opportunity for Improvement

No Ref Std Descriptions 1 2.2.1 Summary of land titles, settler’s names, respective hactarages, land management status, should be summarized for ease of monitoring.

2 3.1.2 The replanting program document which was provided by the management unit of Besout.07 should be improved to include more comprehensive details such as the type of seeds used and cost estimation. 3 4.3.5. Management units has opportunity to improve performance through provision of SOP for fragile and problems and SOP.

4 4.8 Training needs assessment could be further enhanced by utilizing a more structured approach.

5 5.2.1. Management unit has had HCV document identificaiton for Besout complex. Nevertheless, management unit may consider improvement of HCV report through completing report with: HCV identification team description, basic environment data such as landcover, river map, slope map, and stakeholder interview . 6 6.1.2 There were questionnaires that the company used for gathering information related to provide the social impact assessment. The questionnaire results should be reviewed, accessible to management unit PIC and shall be the basis for developing the follow-up summary social action plans. 7 6.2. There is the documented procedure for communication and consultation (ML-IA-/L2/PR) for palm oil mill and all estates (Besout 1 to 7) and the company had involved the affected parties (internal and external stakeholders) consisting of settlers, contractors, government agencies, community representatives and private estates; and documented and recorded the all of their comments and provided the summary for action to be taken. For ensuring the stakeholder consultation process to be effective, the company should periodically review the mechanism. In addition, the stakeholders list for obtaining input could be enhanced to cover a wider range such as NGOs. 8 6.11.1 The company (mill and estates) had contributed to local community (settlers) related to sustainable development for examples: providing the transportation for student to school, the incentive fees for fatherless child, the incentive fees for celebrating day after the end of fasting month. For ensuring the contribution appropriate to the local communities, the company should identify the local needs and then the company contribution can be prioritized.

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3.5.3 Noteworthy Positive Components

No Descriptions 1 Management and staff commitment was evident toward compliance to committed time bound plan. 2 Felda scheme was found to be successful in improving sustainable development for rural settlers. 3 The company committed to implement the Roundtable on Sustainable Palm Oil and supported through by - Implementing the quality , environmental and OSH management system at POM - Enthusiasm to demonstrate compliances against the RSPO principles and criteria - The existing land owned by community which respected to Malaysian government requirements which managed by FELDA (Federal Land Development Authority) - Good internal team working and also cooperate with the settlers managed by FELDA - Having personal with the competence and skill accordance with their aspects.

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3.6 Summary of Arising Issues from Public, Management and Auditor Response

Public Issues Management Responses Auditor Responses (Institution/ NGO/Community)  The management unit of Besout mill and The management unit has conducted the workers’ KESIHATA N DAERAH BATANG PADANG (Representative) supply base will maintain the worker and health issue accordance to the company OSH  There is no issue related health around the mill area because the location of society health issues in the operation area. policy. the mill is quite far from the settlers housing area.  The medical surveillance are conducted by Refer to criterion 4.7 the Besout complex management unit  The mill sent the workers for medical check-up every year. periodically accordance to the regulation

 The worker’s salary is accordance to the The management unit of Besout complex is WORKER UNION OF BESOUT POM (Representative) regulation. implementing the all the workers issues according  The worker union representative mentioned that they have received salary  Besout complex management unit will to the regulation. from the company based on the minimum wage. maintain the workers issues. Refer to criterion 2.1, 4.7, 6.5, 6.6, 6.7, 6.8, 6.9  There is no other issue with the management and he also mentioned that all of the worker has been treated equally by the management.

SETTLERS LEADER The management units under FELDA will keep The management unit of Besout complex is  All the settlers can request assistance from FELDA such as education maintains the relationship between company and the organized the smallholders program. funds, breeders, house extension funds and others. smallholders (peneroka) in the form of social Refer to criterion 6.10, 6.11 responsibility program regularly.  FGV also has provide the settlers with trust fund and they will received dividend yearly basis. PENGHULU SUNGKAI The management units under FELDA will keep The management unit of Besout complex is  FELDA is better and more assured if compared to others. maintains the relationship between company and the organized the smallholders program.  There is no problem between FELDA and Sungkai villagers. smallholders (peneroka) in the form of social Refer to criterion 6.10, 6.11 responsibility program regularly.

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Public Issues Management Responses Auditor Responses (Institution/ NGO/Community) WOMEN ASSOCIATION Besout complex management unit will continuing to The management unit of Besout complex is well  There is no issue between the woman association and the FELDA maintain and ensure there are no discrimination race, maintaining the relationship with gender management caste, national origin, religion, disability, gender, committee. sexual orientation, union membership, political Once a month there will be a health education programme for all the settlers’ Refer to criterion 6.8  affiliation, or age. housewives and it is also open for everyone to join in.

TAPAH WILDLIFE DEPARTMENT (Representative) The management unit of Besout complex will To support wildlife conservation and avoid illegal  Felda has given good working opportunity for the villagers living around maintain the protection of wildlife accordance to the hunting, the Besout complex management unit FELDA Besout. And that will develop the economy of the people staying company policy. has undertaken several actions. around that area. Refer to criterion 5.2  There is no report received on any of the settlers that keep protected animals as their pet. DEPARTMENT OF ORANG ASLI DEVELOPMENT (Representative) The management unit of Besout complex is maintain There is no conflict with between company and  There is about 200 people staying in Kampung Tiso at Sungai Klah and the relationship with indigenous people around the local peoples/indigenous people. FELDA has offered them the same working opportunity as what others have company operation area. Refer to criterion to 2.2, 2.3, 6.3, 6.4 received.  Besides, FELDA also has provide facility such as futsal court for the aborigine.  There is no land conflict between FELDA and the aborigine people. FELCRA CANGKAT SULAIMAN, PERAK (Representative)  Announcement on the complaints procedure Management unit have not shown the corrective  They have reported that there are several cases that the cows owns by the has been made to all the department heads action evidence of information to all levels of settlers has got into FELCRA area. FELCRA do not complaint to the FELDA and the public through stakeholder consultation personnel within the department and the has been undertaken and is still not accessible management because they are not aware of the complaint procedure. community through memos, letters, and social to all members of the department and the programs to the auditor team.  FELDA has also invited FELCRA for most of their social events such as, community programme with the youth, programme with the housewives and also FELDA  Corrective action: To disseminate the Refer to criterion 6.3 provide working opportunity for FELCRA community. information to all levels of personnel within the  There is not environment issues or any other issues pertaining FELDA department and the community through memos, letters, and social programs.

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4.0 CERTIFIED ORGANISATION'S ACKNOWLEDGEMENT OF INTERNAL RESPONSIBILITY

4.1 Formal Sign-off of Assessment Findings

Hereunder sign by management representative from inspected company to acknowledge a field assessment and agree for all content explained in this assessment report, included of non-compliance findings.

Signed on behalf of:

Felda Global Ventures – FELDA Mutuagung Lestari Lead Auditor

TMohan

Norazam Abdul Hameed Mohan Thavarajah 15 December 2014 15 December 2014

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Appendix 1. List of Stakeholder Contacted in the RSPO Certification Process

Institution/NGO/Commun Form of Response No Address Phone/Email Date of Contact ity Communication Yes No 1 JABATAN BOMBA DAN JALAN SUNGKAI, 35800 SLIM Email 4 August 2014 √ PENYELAMAT SLIM RIVER, PERAK. RIVER 2 BALAI POLIS TROLAK 35700 TROLAK, PERAK Email 4 August 2014 √ 3 JABATAN KEMAJUAN KM1 JALAN STATION, Interview 13 August 214 √ HAL EHWAL ORANG ASLI 35000 TAPAH, PERAK 4 JABATAN PERHILITAN NO 1 TAMAN KUNING Email 4 August 2014 √ DAERAH TAPAH EMAS,JALAN TEMOH, 35000 TAPAH, PERAK 5 JABATAN PERHUTANAN 35000 TAPAH, PERAK Email 4 August 2014 √ DAERAH PERAK SELATAN 6 MAJLIS DAERAH TAPAH JALAN STESYEN, 35000 TAPAH, Interview 11 August 214 √ PERAK 7 PEJABAT PENDIDIKAN JALAN PAHANG, 35000 TAPAH, Email 14 August 2014 √ DAERAH BATANG PERAK PADANG 8 PEJABAT KESIHATAN JALAN TEMOH, 35000 TAPAH, Email 14 August 2014 √ DAERAH BATANG PERAK PADANG 9 JABATAN PENGAIRAN JALAN BENDAHARA, 31650 IPOH, Email 14 August 2014 √ DAN SALIRAN DAERAH PERAK KINTA / BATANG PADANG 10 PUSAT KHIDMAT TENAGA NASIONAL BERHAD, Email 14 August 2014 √ PELANGGAN JALAN TAPAH, 35500 BIDOR, PERAK 11 LEMBAGA AIR PERAK PEJABAT WILAYAH SELATAN, Email 14 August 2014 √ JALAN PAHANG, 35000 SLIM RIVER, PERAK 12 PUSAT VETERINAR JALAN STATION, 35800 SLIM Email 14 August 2014 √ KECIL (PVK) SLIM RIVER RIVER, PERAK 13 JABATAN AGAMA ISLAM DAERAH BATANG PADANG, 35400 Email 14 August 2014 √ PERAK, TAPAH ROAD, PERAK 14 PEJABAT RISDA NO. 30 JALAN RAJA, 35000 Email 14 August 2014 √ DAERAH BATANG TAPAH, PERAK PADANG/HILIR PERAK 15 LADANG KIARA JUBLI BESOUT, PERAK Email 14 August 2014 √ 16 PENGURUS KAWASAN FELCRA CANGKAT SULAIMAN, Email 14 August 2014 √ D/A PEJABAT POS SUNGKAI, PETI SURAT 4,35600 SUNGKAI, PERAK 17 PEJABAT PENGHULU DAERAH SUNGKAI, 35600 Email 14 August 2014 √ SUNGKAI, PERAK 18 WOKERS UNION LADANG FELDA BESOUT, Interview 11 August 2014 √ GUGUSAN BESOUT 35600 SUNGKAI, PERAK 19 JAWATANKUASA WANITA LADANG FELDA BESOUT, Interview 11 August 2014 FELDA BESOUT 35600 SUNGKAI, PERAK

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Appendix 2. Assessment Program

DATE 11 – 15 August 2014 AUDITOR PROGRAM PROCESSES / CLAUSES TO BE AUDITED MT TFK OCT BB Monday, 11 August 2014 08.30 - 09.00 Opening Meeting √ √ √ √

09.00 – 12.00 Stakeholders consultation to Nearest village andd community leader labour √ √ union, gender committee.

09.00 – 12.00 Stakeholders consultation to Related Government Institution (District √ √ Government and local NGO) 12.00 – 14.00 BREAK 14.00 – 17.00 Document review and Clarification of Public Consultation √ √ √ √ Tuesday, 12 August 2014 08.00 - 12.00 Field observation to Besout Mill.  WWTP, Mill Operational, Safety and Health, Supply Chain, Hazardous Waste √ √ Management

Field Observation to FGVP BESOUT 07 Estate 08.00 - 12.00  Manuring, Spraying, Harvesting, Best Agricultural Practices √  Worker Welfare (payments, complaint mechanism, etc.) √  Legal operational boundary and Conservation Area √  Worker facilities (housing, health clinic, clean water, etc) √ √  Land Fire facilities, Storage, etc.. √  Hazardous Waste Material management √ √ 12.00 – 14.00 BREAK 14.00 – 16.00 Continue Field Observation to: √ √ √ √ Besout POM and FGVP BESOUT 07 Estate 16.00 – 17.00 Field observation clarification Wednesday, 13 August 2014 Field Observation to: 08.00 – 12.00 FTP BESOUT 01 & FTP BESOUT 04 Estate  Manuring, Spraying, Harvesting, Best Agricultural Practices √  Worker Welfare (payments, complaint mechanism, etc.) √ √ √  Legal operational boundary and Conservation Area √

 Worker facilities (housing, health clinic, clean water, etc) √  Land Fire facilities, Storage, etc.. √ √  Hazardous Waste Material management √ √ 12.00 – 14.00 BREAK 14.00 – 16.00 Continue Field Observation to: √ √ √ √ FTP BESOUT 01 Estate and FTP BESOUT 04 Estate 16.00 – 17.00 Field observation clarification Thursday, 14 August 2014 08.00 – 12.00 Completion of checklist √ √ √ √ 12.00 – 14.00 BREAK 14.00 – 17.00 Audit finding preparation √ √ √ √ Friday, 15 May 2014 08.00 – 12.00  Closing Meeting √ √ √ √

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Appendix 3. Glossary

BOD : Biological Oxygen Demand CSR : Corporate Social Responsibility CPO : Crude Palm Oil EFB : Empty Fruit Bunch ESH : Environment and Safety and Health FELDA : Federal Land Development Authority FFB : Fresh Fruit Bunches FTP : Felda Techno Plant HCV : High Conservation Value (Nilai Konservasi Tinggi) HIRARC : Hazard Identification Risk Assessment and Risk Control MPOB : Malaysian Palm Oil Board MSDS : Material Safety Data Sheet NC : Non Conformance OHS : Occupational Health and Safety OER : Oil Extraction Rate P&C : Principle and Criteria IPM : Integrated Pest Management PK : Palm Kernel PKO : Palm Kernel Oil POM : Palm Oil Mill PSQM : Plantation Sustainability Quality Management PMU : Plantation Management Unit PPE : Personal Protection Equipment RSPO : Roundtable on Sustainable Palm Oil SEIA : Social and Environmental Impact Assessment SIA : Social Impact Assessment SCCS : Supply Chain Certification System SOP : Standard Operating Procedure WWTP : Wastewater Treatment Plant

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