RSPO Public Summary Report Template

Roundtable on Sustainable Palm Oil Public Summary Report Report no. : RSPO P&C – 14007 – ASA04 against the:

RSPO INA-NI, NG-NI, Generic, Principles 2013 2016 2017 2018 & Criteria MY-NI, GH-NI, 2018 2015 2015 RSPO Supply Chain Certification Standard, 2014 (Rev. June 2017) Group Certification of FFB Production 2016 Rev.2018 RSPO Supply Chain Certification Standard, 2014 (Rev. June 2017)

Bakrie Sumatera Plantation Area Sumut 1 – Kisaran Palm Oil Mill

Head Office : Jl. Ir. H. Juanda, Kisaran, Asahan District, North Sumatera Province, Indonesia 21202

Mill & Estate: Asahan District, North Sumatra Province, INDONESIA

Date of assessment : 29 April to 3 May 2019 Report prepared by:

Naik Monang Parlindungan Lingga (RSPO Lead Auditor)

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

Certification Body: PT TUV Rheinland Indonesia Menara Karya, 10th Floor Jl. H.R. Rasuna Said Block X-5 Kav.1-2 Jakarta 12950, Indonesia Tel: +62 21 57944579 Fax: +62 21 57944575 www.tuv.com/id

Accreditation number: ASI-ACC-061 & 09 June 2019

TABLE OF CONTENTS 1.0 SCOPE OF CERTIFICATION ASSESSMENT...... 4

2.0. DESCRIPTION OF CERTIFIATION UNIT ...... 4

2.1 Location ...... 4 2.2. Maps ...... 5 Figure 4. Land use map Kwala Piasa Estate ...... 6 Figure 5. Land use map Kwala Piasa Estate ...... 6 Figure 5. Land use map Serbangan Estate ...... 7 Figure 6. Land use map Sei Baleh Estate ...... 7 2.3. Supply Base Composition ...... 8 2.4 Area of Plantation (Total, Planted and Mature) ...... 9 2.5 Dates of Plantings and Replanting Cycles ...... 9 2.6 Volume of CPO and PK recommended for Certification ...... 12 2.7 Organisational Information / Contact Person ...... 12 3.0 ASSESSMENT PROCESS ...... 14

3.1 Qualifications of Lead Assessor and Assessment Team ...... 14 3.2. Assessment Agenda ...... 15 3.3 Assessment Methodology ...... 17 4.0 Stakeholder Consultation and Stakeholders Contacted ...... 17

5.0 Compliance to Other RSPO Requirement ...... 18

5.1. Time Bound Plan for Other Management Units ...... 18 5.2. Compliance to Rules for Partial Certification ...... 19 5.3. Compliance to other RSPO Procedure ...... 22 5.4. Compliance to RSPO Guidance on GHG calculation ...... 23 5.5 Plan for certification of associated smallholders...... 25 6.0 ASSESSMENT FINDINGS...... 26

6.1 Summary of Findings ...... 26 6.2. Compliance to RSPO Role of Market Communications & Claims: ...... 57 6.3. Compliance to Book & Claim requirement: ...... 57 7.0 Status of Previously Identified Non-Conformities ...... 59

8.0 Identified Non-conformances, Corrective Actions Taken and Auditors Conclusions ...... 64

9.0 Noteworthy Positive Components and Potential for Improvement ...... 89

10.0 Issues Raised by Stakeholders and Findings Pertaining to Issues ...... 89

11.0 Certification Decision ...... 89

11.1 Recommendation for Certification ...... 89 11.2 Date of Certificate Issued and Scope of Certificate ...... 90 11.3 Date of Next Surveillance Visit ...... 90 12.0 Acknowledgements of Internal Responsibility and Formal Sign-Off by Client ...... 90 RSPO Surveillance Assessment] Report PT Bakrie Sumatera Plantation – Kisaran Palm Oil Mill –

North Sumatera Province

Page 3 of 207 APPENDICES ...... 91

Appendix 1: Details of Certificate ...... 91 Appendix 2: Surveillance Audit Plan ...... 93 On-site visit verification Plan ...... 100 Appendix 3: List of Abbreviations ...... 102 Appendix 4: Other Achievement s and Certificatio Helds ...... 103 Appendix 5: Audit Checklist ...... 104 Appendix 6: List of Stakeholders Interviewed and Contacted ...... 206 Appendix 7: Organization’s land History and information about all previous users of the land...... 207 Note: ...... 207

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North Sumatera Province

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1.0 SCOPE OF CERTIFICATION ASSESSMENT.

The surveillance assessment was carried out on 1 mills and 5 estates under PT Bakrie Sumatera Plantatation Area Sumut 1. The operations of the palm oil mill(s) and its supply base of FFB were assessed against RSPO Indonesian Na- tional Interpretation (INA-NI) July 2016 of the RSPO Principles & Criteria, selected Supply Chain Model according to company’s FFB supply base is MB.

Mill name & palmtrace mem- Mill: Kisaran Palm Oil Mill / RSPO_ PO1000000184 ber ID Supply base name Company owned Estate (certified): 1. Tanah Raja estate 2. Gurach Batu estate 3. Kuala Piasa estate 4. Serbangan estate 5. Sei Baleh estate Other operating estate owned by 1. Aek Selabat estate Company 2. Seed garden Other Source (non-cetified) 1. GLP 2. Outgrower Supply Chain Model IP MB Mill Capacity (tonnes/hour) Mill 1 Mill 2 National Intepretation used INA-NI July 2016

2.0. DESCRIPTION OF CERTIFICATION UNIT

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

Name of mill / GPS locations Location Estate Latitude Longitude Kisaran POM Sei Baleh Village, Sei Baleh 03º02’26.7”N 099º34’53.2”E District, Batu Bara Regency, North Sumatra Province Tanah Raja Estate Sei Renggas Village, Kisaran 02º57’50.0”N 099º35’57.7”E Barat District, Asahan Regency, North Sumatra Province Gurach Batu Estate Gerak Tani Village, Meranti 3°20’45.0”N 99° 58’23.4”E District, Asahan Regency, North Sumatra Province Kuala Piasa Estate Tinggi Raja Village, Tinggi Raja 02º54’04.2”N 099º34’00.2”E District, Asahan Regency, North Sumatra Province Serbangan Estate Rawang Lama Village, Panca Ar- 03º01’29.8”N 099º39’30.3”E ga District, Asahan Regency, North Sumatra Province Sei Baleh Estate Sei Baleh Village, District Sei 03º04’12.1”N 099º35’11.0”E Baleh, Batu Bara Regency, North Sumatra Province

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North Sumatera Province

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2.2. Maps

Figure 1: Location of PT Bakrie Sumatera Plantation Area Sumut 1 on map of North Sumatera, Indonesia

Figure 2. Land use map Tanah Raja Estate.

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North Sumatera Province

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Figure 3. Land use map Gurach Batu Estate

Figure 4. Land use map Kwala Piasa Estate

Figure 5. Land use map Bambu Kuning Estate

Figure 5. Land use map Kwala Piasa Estate

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Figure 5. Land use map Serbangan Estate

Figure 6. Land use map Sei Baleh Estate

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2.3. Supply Base Composition

Table 2: FFB Supply Base Composition for Kisaran Mill year 2018 and 2019 (until March 2019)

FFB supplied in 2019 FFB supplied in 2018 (until March) FFB Contributor

Tonnes % Tonnes %

Company owned estates

(certified): Tanah Raja 20,654.770 10.37 1,672.780 3.79 Gurach Batu 6,162.180 3.09 1,117.760 2.53 Kwala Piasa 33,052.400 16.60 9,273.760 20.99 Serbangan 16,742.796 8.41 3,489.575 7.90 Sei Baleh 22,422.600 11.26 5,220.560 11.81

Sub Total 99,034.746 49.73 20,774.435 47.01

Company owned estates

(non-certified): Tanah Raja 18,647.950 9.36 6,974.130 15.78

Gurach Batu 8,506.170 4.27 1,950.120 4.41

Kwala Piasa 0.000 0.00 0.000 0.00 Serbangan 17,022.084 8.55 3,113.775 7.05 Sei Baleh 13,675.420 6.87 2,896.260 6.55 Aek Salabat 174.810 0.09 49.890 0.11 8.30 3,286.020 7.44 Seed garden 16,518.240 Sub Total 74,544.674 37.43 18,270.195 41.34

GLP (non-certified) 3,911.930 1.96 0.000 0.00

Outgrower (non-certified) 21,641.266 10.87 5,145.648 11.64 Sub Total 25,553.196 12.83 5,145.648 11.64 GRAND TOTAL 199,132.616 100.00 44,190.278 100.00

Table 3: CPO and PK production and sold from period July 2018 to April 2019 and projected for year 2019 Amount (mt) Remarks FFB CPO PK From Estate 153,235.00 Certified ton- From Independent Smallholder (ISH) 0.00 32,179.35 6,129.40 nage (license) From Scheme or Assosiate SH/Outgrower 0.00 Actual Production for year 2018 Actual OER and KER (%) n.a 22.487 4.353 Total production* 199,132.616 44,754.341 8,663.478 Total non-certified production 100,097.870 22,484.399 4,352.496 Total certified production 99,034.746 22,269.942 4,310.982 Actual Sold Actual sold volume under RSPO scheme*) n.a 3,000.00 600.00 Actual sold volume under other scheme certified n.a - - Actual sold conventional n.a 16,245.55 3,856.730 New (Projected) Production year 2019 OER and KER projection (%) n.a 23.40 4.30 Total production 250,965.00 58,725.81 10,791.50

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Amount (mt) Remarks FFB CPO PK Total non-certified production 152,578.00 35,703.25 6,560.85 Total certified pro- From Estate 98,387.00 duction (RSPO From Independent Smallholder (ISH) 0.00 23,022.56 4,230.64 Scheme) From Scheme or Assosiate SH/Outgrower 0.00 Note: *) FFB processing year 2018 is 199,023.176 consist of certified FFB processing as much as 99,034.746 mt and non-certified FFB processing as much as 99,988.430 mt

2.4 Area of Plantation (Total, Planted and Mature) Table 4.a: Oil Palm Planted Area Summary, FFB Production and Average yield/ha for PT Bakrie Sumatera Planta- tion Kisaran year 2018

Oil Palm Mature Immature FFB Total area Average Estate Planted area (Production) (Non-production) Production (ha) yield/ ha (ha) area (ha) area (ha) (tonnes) Tanah Raja 2,056.00 1,241.00 1,143.00 98.00 20,654.770 18.07 Gurach Batu 1,100.00 410.00 410.00 0.00 6,162.180 15.03 Kwala Piasa 2,314.00 2,134.00 2,134.00 0.00 33,052.400 15.49 Serbangan 1,888.00 1,269.00 1,255.00 14.00 16,742.796 13.34 Sei Baleh 2,367.00 1,673.00 1,569.00 104 22,422.600 14.29 TOTAL 9,725.00 6,727.00 6,511.00 216.00 99,034.746 15.21

Table 4.b: Oil Palm Planted Area Summary, FFB Production and Average yield/ha for PT Bakrie Sumatera Planta- tion Kisaran year 2019 (until March)

Oil Palm Mature Immature FFB Total area Average Estate Planted area (Production) (Non-production) Production (ha) yield/ ha (ha) area (ha) area (ha) (tonnes) Tanah Raja 2,056.00 1,241.00 1,143.00 98.00 8,646.91 7.57 Gurach Batu 1,100.00 410.00 410.00 0.00 3,067.88 7.48 Kwala Piasa 2,314.00 2,134.00 2,134.00 0.00 9,273.76 4.35 Serbangan 1,888.00 1,269.00 1,255.00 14.00 6,603.35 5.26 Sei Baleh 2,367.00 1,673.00 1,569.00 104 8,116.82 5.17 TOTAL 9,725.00 6,727.00 6,511.00 216.00 35,708.72 5.48

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

Table 5.a: Age and year of plantings of company estate supplying to PT Bakrie Sumatera Plantation Kisaran year 2018

Age & Year Oil palm planted area at each estate(ha) of Plantings Tanah Raja Gurach Batu Kwala Piasa Serbangan Sei Baleh 0 & 2018 98.00 0.00 0.00 14.00 104.00 1 & 2017 0.00 0.00 0.00 0.00 0.00 2 & 2016 0.00 0.00 0.00 0.00 0.00 3 & 2015 0.00 0.00 0.00 0.00 0.00 4 & 2014 0.00 101.00 123.00 368.00 59.00

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Age & Year Oil palm planted area at each estate(ha) of Plantings Tanah Raja Gurach Batu Kwala Piasa Serbangan Sei Baleh 5 & 2013 0.00 0.00 0.00 0.00 0.00 6 & 2012 0.00 0.00 0.00 0.00 0.00 7 & 2011 0.00 0.00 0.00 0.00 0.00 8 & 2010 0.00 0.00 0.00 0.00 0.00 9 & 2009 60.00 50.00 0.00 0.00 72.00 10 & 2008 187.00 67.00 0.00 130.00 55.00 11 & 2007 0.00 8.00 0.00 0.00 0.00 12 & 2006 0.00 0.00 0.00 0.00 45.00 13 & 2005 27.00 0.00 122.00 0.00 63.00 14 & 2004 259.00 0.00 0.00 0.00 57.00 15 & 2003 43.00 0.00 0.00 89.00 312.00 16 & 2002 62.00 0.00 0.00 6.00 40.00 17 & 2001 198.00 0.00 0.00 51.00 0.00 18 & 2000 30.00 30.00 35.00 0.00 4.00 19 & 1999 0.00 0.00 86.00 2.00 21.00 20 & 1998 0.00 0.00 231.00 0.00 0.00 21 & 1997 0.00 0.00 280.00 0.00 18.00 22 & 1996 166.00 102.00 755.00 148.00 151.00 23 & 1995 0.00 52.00 376.00 189.00 205.00 24 & 1994 64.00 0.00 69.00 230.00 439.00 25 & 1993 47.00 0.00 57.00 42.00 28.00 TOTAL 1,241.00 410.00 2,134.00 1,269.00 1,673.00

Table 5.b: Age and year of plantings of company estate supplying to PT Bakrie Sumatera Plantation Kisaran year 2019 (until March)

Age & Year Oil palm planted area at each estate(ha) of Plantings Tanah Raja Gurach Batu Kwala Piasa Serbangan Sei Baleh 0 & 2019 0.00 0.00 0.00 0.00 0.00 1 & 2018 98.00 0.00 0.00 14.00 104.00 2 & 2017 0.00 0.00 0.00 0.00 0.00 3 & 2016 0.00 0.00 0.00 0.00 0.00 4 & 2015 0.00 0.00 0.00 0.00 0.00 5 & 2014 0.00 101.00 123.00 368.00 59.00 6 & 2013 0.00 0.00 0.00 0.00 0.00 7 & 2012 0.00 0.00 0.00 0.00 0.00 8 & 2011 0.00 0.00 0.00 0.00 0.00

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Age & Year Oil palm planted area at each estate(ha) of Plantings Tanah Raja Gurach Batu Kwala Piasa Serbangan Sei Baleh 9 & 2010 0.00 0.00 0.00 0.00 0.00 10 & 2009 60.00 50.00 0.00 0.00 72.00 11 & 2008 187.00 67.00 0.00 130.00 55.00 12 & 2007 0.00 8.00 0.00 0.00 0.00 13 & 2006 0.00 0.00 0.00 0.00 45.00 14 & 2005 27.00 0.00 122.00 0.00 63.00 15 & 2004 259.00 0.00 0.00 0.00 57.00 16 & 2003 43.00 0.00 0.00 89.00 312.00 17 & 2002 62.00 0.00 0.00 6.00 40.00 18 & 2001 198.00 0.00 0.00 51.00 0.00 19 & 2000 30.00 30.00 35.00 0.00 4.00 20 & 1999 0.00 0.00 86.00 2.00 21.00 21 & 1998 0.00 0.00 231.00 0.00 0.00 22 & 1997 0.00 0.00 280.00 0.00 18.00 23 & 1996 166.00 102.00 755.00 148.00 151.00 24 & 1995 0.00 52.00 376.00 189.00 205.00 25 & 1994 64.00 0.00 69.00 230.00 439.00 26 & 1993 47.00 0.00 57.00 42.00 28.00 TOTAL 1,241.00 410.00 2,134.00 1,269.00 1,673.00

Table 6.a: Land use data for PT Bakrie Sumatera Plantation Kisaran year 2018 HCV/ Land used for other purposes (ha) Oil Palm Poten- Local Gov- Total ar- Planted tial ernment of- Estate Not ea (ha) Area fice, Road, Nursery Enclave HCV Planted (ha) areas Housing, (ha)* Drain, POM Tanah Raja 2,056.00 1,241.00 45.73 815.00 0.00 0.00 0.00 Gurach Batu 1,100.00 410.00 66.48 690.00 0.00 0.00 0.00 Kwala Piasa 2,314.00 2,134.00 343.13 172.00 0.00 0.00 8.00 Serbangan 1,888.00 1,269.00 44.00 619.00 0.00 0.00 0.00 Sei Baleh 2,367.00 1,673.00 131.16 690.00 0.00 0.00 4.00 TOTAL 9,725.00 6,727.00 630.50 2,986.00 0.00 0.00 12.00 Note: *) Inside on planted areas Table 6.b: Land use data for PT Bakrie Sumatera Plantation Kisaran year 2019 (until March) HCV/ Land used for other purposes (ha) Oil Palm Total ar- Planted Poten- Local Gov- Estate tial ernment of- Not ea (ha) Area Nursery Enclave fice, Road, Planted (ha) HCV areas Housing,

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(ha)* Drain, POM Tanah Raja 2,056.00 1,241.00 45.73 815.00 0.00 0.00 0.00 Gurach Batu 1,100.00 410.00 66.48 690.00 0.00 0.00 0.00 Kwala Piasa 2,314.00 2,134.00 343.13 172.00 0.00 0.00 8.00 Serbangan 1,888.00 1,269.00 44.00 619.00 0.00 0.00 0.00 Sei Baleh 2,367.00 1,673.00 131.16 690.00 0.00 0.00 4.00 TOTAL 9,725.00 6,727.00 630.50 2,986.00 0.00 0.00 12.00 Note: *) Inside on planted areas

Table 7 Planned and actual oil palm replanting activities for PT Bakrie Sumatera Plantation Kisaran

Total planned Total planned replanting area for each estate (ha) Actual total Estate Name Replanting area replanted area (ha) 2018 2019 2020 2021 2022 (ha) Tanah Raja 64.00 - 64.00 - - - 98 Gurach Batu 305.00 197.00 108.00 - - - - Kwala Piasa 139.00 110.00 29.00 - - - - Serbangan 27.00 - 27 - - - 14 Sei Baleh 293.00 107.00 21.00 165.00 - - 104 TOTAL 828.00 414.00 249.00 165.00 - - 216

2.6 Volume of CPO and PK recommended for Certification The approximate tonnages certified, based projection of production in 2019 for company owned estates only are as follows: FFB : 98,387 mt Crude Palm Oil (CPO) : 23,022.56 mt Palm Kernel (PK) : 4,230.64 mt OER : 23.40 % KER : 4.30 %

2.7 Organisational Information / Contact Person Contacts details of the company are as follows:

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Company Name: PT Bakrie Sumatera Plantation – Kisaran Palm Oil Mill

RSPO Membership no. 1-0036-07-000-00 on behalf Bakrie Sumatera Plantations since May 22, 2007 Address: Head Office: Jl. Ir. H. Juanda, Kisaran, Asahan District, North Sumatera Province, Indo- nesia 21202 Kisaran POM : Sei Baleh Village, Sei Baleh District, Batu Bara Regency, North Sumatra Province

Tanah Raja Estate: Sei Renggas Village, Kisaran Barat District, Asahan Regency, North Sumatra Province

Gurach Batu Estate: Gerak Tani Village, Meranti District, Asahan Regen- cy, North Sumatra Province

Kwala Piasa Estate: Tinggi Raja Village, Tinggi Raja District, Asahan Re- gency, North Sumatra Province

Serbangan Estate: Rawang Lama Village, Panca Arga District, Asahan Regency, North Sumatra Province

Sei Baleh Estate: Sei Baleh Village, District Sei Baleh, Batu Bara Regen- cy, North Sumatra Province Contact Person: Mr. Andi Wahyudin Telephone: +62-623- 41434, +62-623-348614; Fax: +62-623-41066 Email: [email protected]

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3.0 ASSESSMENT PROCESS 3.1 Qualifications of Lead Assessor and Assessment Team

Name Position Qualifications / Experience

Education: Bachelor of Forestry, Gadjah Mada University.

Training attended : ISPO Auditor, Quality Management System (QMS) Auditor/Lead Auditor (ISO Naik 9001:2008) by IRCA, Environmental Management Systems Auditor/Lead Audi- Monang Lead tor Conversion Training by IRCA (ISO 14001-2004), Lead Auditor RSPO Parlin- Auditor Training, HCVA Training and RSPO SCCS Training (2016), Training ISO dungan 37001 Lingga

Working experience: Field Assistant PT Sapta Karya Damai (2008-2013), Auditor in PT Sucofindo (2013-2015), and Auditor in PT TUV Rheinland Indonesia (2015-present).

Education: Master in Rural Sociology, Graduate School of Bogor Agricul-tural University completed in 2005.

Training attended: GIS Training, Auditor Training of Indonesian Sustainable Palm Oil (ISPO), Training of Participatory Mapping, Training of Document Preparation HCV and SIA, Auditor Training of Sustaina-ble Production Forest Management (SFM), Training and Up-Grading of SFM, Training of Mentoring technique for the Ru- ral Farmers, Conflict Resolution Training and Journalism Training, Training Lead Auditor RSPO P&C . Doni Auditor Working experience: Frequently conducted certification audits of RSPO and ISPO for Palm plantation, the certification audit of SFM (Sustainable Production Forest Manage- ment) for HPH and HTI, worked as a consultant for the National Development Planning Agency, Min-istry of Environment and Forestry, Indonesian People Bank (BRI), Ministry of Rural Development (KPDT) and the Ministry of Public Works, Director General of Cipta Karya, JICA and UN-HABITAT and UNDP, HCVF document drafting team for the company of HTI, HPH and constituent team for documents of HCV / SIA for oil palm plantations. Since March 2016 till now, work at PT. TUV Rheinland Indonesia.

Education: Bachelors Degree in Forestry - Bogor Agriculture University, In- donesia.

Trainings attended: Indonesian Sustainable Palm Oil (ISPO) Lead Auditor Course by ISPO Commision; Quality Management System (QMS) Auditor/Lead Auditor by IRCA (ISO 9001:2008); Environmental Management Budi Systems Auditor/Lead Auditor Conversion Training by IRCA (ISO Auditor Setiawan 14001:2004); Calculation of Green House Gas at Palm Oil Plantation by ISPO Commision; SVLK Auditor Training by Ministry of Forestry; CoC Auditor by LEI; PUB and Café training by ministry of tourism; HCV Training; RSPO P&C and SCCS Training; AWS Training, CORSIA Training.

Work experience: Staff RSPO in PT MAS, Staff Planning & Analysis in PT Bakti Sukses Mandiri; PT Mutu Hijau Indonesia, Jakarta as Technical Manag- er (2015-2016) and HR and finance manager (2014-2015); Auditor in PT Mutu

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Hijau Indonesia (2010-2016), and Auditor in PT TUV Rheinland Indonesia (2016-present).

Education: Bachelor of Agriculture, Departement of Social and Economic of Agriculture, Sriwijaya University, Palembang.

Trainings attended: RSPO Lead Auditor Training, Pekanbaru (August 2014). Indonesian Sustaina- ble Palm Oil (ISPO) Lead Auditor Training (May 2002); ISO 9001:2008 IRCA Dewi Auditor Lead Auditor, ISO 14000:2004, OHSAS 18001:2007 trainings -. OHSAS/SMK3 Akbari Lead Auditor based on PP No.50 /2012. HCV Training (2018)

Working experience: Exprience in consulting, training and auditing Quality, Environmental, OHSAS of PT Surveyor Indonesia Pekanbaru ( 2000 – 2010), Lead Auditor : QMS 9001:2008, Auditor Indonesian Sustainable Palm Oil (ISPO) and Roundtable Sustainable Palm Oil (RSPO) for TUV Rheinland since 2013.

3.2. Assessment Agenda

Date Location/ Main sites Main activities 29 April 2019 Asahan District Consultation with local government:  Man Power & Transmigration Agency in Ogan Komer- ing Ilir District  Plantation Agency in Ogan Komering Ilir District  Environmental Official Regional Government in Ogan Komering Ilir District  Regional Office of National Land Agency in Ogan Ko- mering Ilir District 30 April 2019 Hall  Opening meeting  Introduction about team audit  Introduction / presentation of company and source of FFB  Verification correction / corrective action from previous findings Kisaran POM Document and field verification related of :  Incoming FFB verification (security post, loading ramp)  GMP  Field visit to land application site for mill effluent  Waste management (hazardous waste store, palm oil mill effluent treatment ponds, mill license for temporary hazardous waste storage, license for land application, land application records)  Pollution prevention control  Water management  OSH system (fire simulation records, medical check reports for year 2018 and 2019)  Warehouse (mill compound, chemical store)  Worker facilities, medical facilities  Environmental (Environmental Management and Monitoring Program) and implementation reports, environmental objectives, targets and improvement plan, greenhouse gas calculation sheet, renewable energy efficiency analysis document)

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 Training (boiler operator training certificates and licenses)  Consultation with local community supplier  SCCS 1 May 2019 Holiday 2 May 2019 Gurach Batu estate Document and field verification related of : and Kwala Piasa Es-  Good Agricultural practices tate  Legal land and maintenance of boundary stones/pillars  HCV document  OHS system (accident records, recommendation letters for transfer of work for workers found with high blood cholinesterase levels and pregnant female sprayers, evidence of transfer to other work for aforementioned workers, OSH policy, OSH committee letter of approval from the Manpower Department).  Waste ( medical waste disposal records)  Legal requirement register  Insurance of worker payment records  Interview with harvesters and harvesting supervisor  Interview with female sprayers  Hazardous waste store  Fertilizer store  Sprayer’s washroom  Chemical container and fertilizer and washing area  Housing compound  Domestic waste landfill  Clinic  Previous landownership verification 3 May 2019 Serbangan estate and Document and field verification related of : Sei Baleh Estate  Good Agricultural practices  Legal land and maintenance of boundary stones/pillars  HCV document  OHS system (accident records, recommendation letters for transfer of work for workers found with high blood cholinesterase levels and pregnant female sprayers, evidence of transfer to other work for aforementioned workers, OSH policy, OSH committee letter of approval from the Manpower Department).  Waste ( medical waste disposal records)  Legal requirement register  Insurance of worker payment records  Interview with harvesters and harvesting supervisor  Interview with female sprayers  Hazardous waste store  Fertilizer store  Sprayer’s washroom  Chemical container and fertilizer and washing area  Housing compound  Domestic waste landfill  Clinic  Previous landownership verification Hall Closing meeting 4 May 2019 - Travelling from Medan to Jakarta

Agenda for Verification of Closure of Major Non-conformities (if necessary)

There is on-site verification conduct on 24-27 July 2019

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Location / Main Date Auditor Main activities sites 24 July Dewi Akbari Travelling to PT BSP Kisaran 2019 25 July Kisaran POM & Dewi Akbari  Opening Meeting 2019 Serbangan estate  Verification of Major Non-conformity (documentation and field verification) related: a. SCCS b. Legal requirement c. OSH d. Training

26 July Gurach Batu estate, Dewi Akbari Verification of Major Non-conformity (documenta- 2019 Kuala Piasa estate tion and field verification) related: and Sei Baleh estate  SCCS  Legal requirement  Implemented the procedure  Spraying activity  IPM Closing meeting

3.3 Assessment Methodology

The surveillance assessment was conducted betwen 29 April to 3 May 2019 as per the assessment program above. The assessment was carried out in accordance with PT TUV Rheinland Indonesia’s RSPO audit procedure as well as the RSPO Certification Systems document. During assessment, the qualified TUV Rheinland assessors used the RSPO standard as endorsed for the country in which the assessment took place and recorded their findings.

Due to the location and proximity of the estates, combined with common management systems, it was possible to carry out both field and document assessments of all estates and the mill within the time frame without com- promising the integrity of the assessment in anyway.

All 5 estates and 1 mill were visited and the assessment team carried out field and document assessments of compliance to all the RSPO principles and criteria. Common systems were identified and specific evidence was recorded for individual estates. Interviews were conducted at all estates and the mill.

The company proposed the correction and corrective action for all identified non conformities raised to the certification body no more than 90 days after the closing meeting. Verification of closure of major non- conformances was conducted 3 months after the closing meeting of the surveillance assessment and implementation of corrective actions for minor non-conformities will be verified during the next suriveillance audit. The surveillance assessment agenda is as explained below.

4.0 Stakeholder Consultation and Stakeholders Contacted Stakeholder consultation took place in the form of meetings and interviews. Meetings with stakeholders were held to seek their views on the performance of the company with respect to the sustainability practices outlined in the RSPO Principles & Criteria, and to comment on aspects where improvements could be made. Meetings with local communities were held at their respective premises within and near the company’s area. A stakeholder consultation meeting was also held on Asahan District on 29 April 2019. Letters inviting individual stakeholders to the stakeholder consultation meeting were prepared and sent to the individual stakeholders, while electronic mail and telephone calls were made to arrange the meetings.

In all the interviews and meeting, the objectives of the RSPO and the purpose of the assessment was clarified at the outset followed by an evaluation of the relationship between the stakeholders and the company before discussion proceeded to obtain the stakeholders feedback on the company’s compliance to different aspects of the RSPO Principles & Criteria. Although several stakeholders were not familiar with RSPO but they agreed

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Page 18 of 207 with its objective and expressed their willingness to collaborate in the promotion of sustainable palm oil in North Sumatera province. In all interviews and meeting, the assessment team did not restrict discussion of both the positive and negative aspects of operations conducted by PT Bakrie Sumatera Plantation - estates and mill.

The interview with employee and related stakeholder held during the audit was extensive and productive, with an attendance of more than 20 person. This followed by site inspections, including visits to the local communities, interviews with land claimants and contractors, and inspections of worker amenities and infrastructure. The list of stakeholders that attended the stakeholder consultation meeting and stakeholders interviewed during the assessment is included as (Appendix 6).

5.0 Compliance to Other RSPO Requirement

5.1. Time Bound Plan for Other Management Units The time frame laid out below is considered to be both challenging and realistic.

The audit team is satisfied that the company conforms to the RSPO requirements for partial certification as laid out in Clause 4.5 of the RSPO Certification Systems document.

Tabel 8: Time Bound Plan of PT Bakrie Sumatera Plantation Tbk

Time bound Name of Name of Company Name of Estate Location plan Status POM for certification Kisaran Tanah Raja, Gurach Batu, PT Bakrie Sumatera Sei Baleh, Serbangan, Kua- North Sumatera 2015 Certified Plantation Tbk la Piasa PT Agro Mitra Agro Mitra Agrowiyana (PT Agrowi- Jambi 2012 Certified Madani Madani yana) PT Bakrie Pasaman Air Balam Sei Alur, Air Balam West Sumatera 2021** Uncertified Plantations PT Citalaras Cipta - Rawang Bubur West Sumatera 2022** Uncertified Indonesia PT Grahadura Lei- Leidong Leidong Makmur, Permata North Sumatera 2022** Uncertified dongprima Makmur Gambut PT Monrad Intan - Limamar, Banua Anyar South Kalimantan 2023** Uncertified Barakat Sumber- Arang-arang 1, Arang-arang PT Sumbertama tama Nusa- 2 Jambi 2023** Uncertified Nusapertiwi pertiwi Kisaran Part of Serbangan estate (583 ha), part of Sei Baleh estate (544 ha), part of PT Bakrie Sumatera Gurach Batu estate (380 ha) North Sumatera 2021 Uncertified Plantation Tbk and part of Tanah Raja estate (913 ha) so that total of areas is 2,420 ha***

Note : *). During partial certification audit that annual report year 2018 has been finalized so that the list of subsidiaries above refer to the annual report year 2018. Whereas, based on annual report year 2017 that the some subsidiaries with principal activity is oil palm plantation and/or processing has not stated on table above because they has signed sell-buy agreement (dated on 31th December 2012) with third party for fixed asset (land use right (HGU) and oil palm trees) and stock (exclude of CPO & PK). Some subsidiaries are PT Erami- tra Agrolestari, PT Jambi Agrowijaya, PT Multrada Multi Maju, PT Padang Bolak Jaya, PT Perjapin Prima and PT Trimitra Sumberper- kasa. Until year 2018 that all subsidiaries has finished the sell-buy of fixed asset process. **). The company has revised time bound plan for Initial Certification (IC) and their reasons has explained on section 4.5.3 below. The detail of revisions are 1). PT Bakrie Pasaman Plantations changing from year 2018 to 2021, PT Citalaras Cipta Indonesia changing from year 2018 to 2022, PT Sumbertama Nusa Pertiwi changing from year 2019 to 2022, PT Grahadura Leidong Prima changing from year 2019 to 2023 and PT Monrad Intan Barakat changing from year 2019 to 2023. ***). Based on letter no. 78/GM-Sumut1/VIII/2018 dated on August 6, 2018 that the management of SUMUT 1 areas informing conver-

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sion areas (replanting to other commodity (rubber plantation to palm oil plantation) year 2009 to 2018) exclude from the scope of RSPO certification because conversion areas has not included the scope of HCV assessment/identification.

5.2. Compliance to Rules for Partial Certification PT Bakrie Sumatera Plantations Tbk has submitted some self assessment reports (internal assessment reports) year 2019 on behalf PT Bakrie Pasaman Plantations, PT Grahadura Leidongprima, PT Sumbertama Nusapertiwi, PT Citalaras Cipta Indonesia and PT Monrad Intan Barakat. During partial certification audit by CB that auditee has not been submitted self assessment report (internal assessment report) for the conversion areas in part of PT Bakrie Sumatera Plantations Tbk areas. It is not compliance with RSPO P&C recruitment so that it has raised as non-conformity (NCR no. RSPO02501). CB has carried out assess compliance with the requirement of multiple management units on behalf PT Bakrie Sumatera Plantations Tbk based on some self assessment reports under PT Bakrie Sumatera Plantations subsidiaries, has carried out stakeholder consultation in form of submitting email to some NGOs and communication with RSPO secretariat and desktop study (website search- ing (RSPO website and other websites)) . The result of assess as belows: Partial Certification Re- Audit Findings quirements 4.5.2 The parent organiza- PT Bakrie Sumatera Plantations Tbk is RSPO member with membership num- tion or one of its majority ber 1-0036-07-000-00 since 22 May 2007. owned and / or managed Based on the annual report year 2017 & draft annual report year 2018 that PT subsidiaries is a member of Bakrie Sumatera Plantations Tbk (as RSPO membership) have majority share- RSPO. holders (direct or indirect) on all subsidiaries company above (Table 8). 4.5.3 A challenging time- The time bound plan is available (the last of version is 19 September 2017) but bound plan for certifying all it has not revised even though there are some conditions that require a time its relevant entities is sub- bound plan to be revised such as : mitted to the Certification  Based one the last of time bound plan, PT Bakrie Pasaman Plantations and Body (CB) during the first PT Citalaras Cipta Indonesia will be conducting Initial Certification (IC) year certification audit. The time- 2018 but they has not been conducted Initial Certification (IC) until doing bound plan should contain a partial certification audit by CB. list of subsidiaries, estates  There are major requirements not complied by PT Grahadura Leidongprima, and mills. PT Monrad Intan Barakat and PT Sumbertama Nusapertiwi so that they could not done Initial Certification (IC) year 2019. Any revision to the time-  It has not covered the part of PT Bakrie Sumatera Plantations Tbk – Kisaran bound plan or to the circum- POM & tehir supply based areas which has excluded from scope of certifi- stances of the company cation. shall cause the plan to be It was raised as major non-conformity (NCR no. RSPO02500) because funda- reviewed. for whether it is mental failure. still appropriate, such that changes to the time-bound Refer to the time bound plan on Table 8 above as time bound plan finally. plan are permitted only Some reasons about the revision of time bound plan i.e : where the organisation can demonstrate that they are  BSP group doing organizational restructuring and management change justified  Limited working funds in the BSP group due external factor and internal factor, external factor are CPO price reduction & reduced market demand for CPO and internal factor are fulfilling long-term obligations that are due to lenders and short-term priority program such as fertilizing and replanting.  RaCP process has not been finished in PT Bakrie Pasaman Plantations  PT Citalaras Cipta Indonesia and PT Monrad Intan Barakat has not been conducted HCV assessment  Conversion areas in part of PT Bakrie Sumatera Plantations areas has not been conducted HCV assessment  PT Sumbertama Nusapertiwi has not been conducted social impact assessment  Other documents & requirements has not been complied to RSPO P&C requirement

4.5.4 (a). No replacement of Uncertified management units has conducted HCV assessment such as PT primary forest or any area Bakrie Pasaman Plantations in year 2011, PT Grahadura Leidongprima in year identified as containing High 2014, and PT Sumbertama Nusapertiwi in year 2014. Some conditions not

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Partial Certification Re- Audit Findings quirements Conservation Values compliance with requirement as belows : (HCVs) or required to main-  PT Citalaras Cipta Indonesia and PT Monrad Intan Barakat has not been tain or enhance HCVs in conducted HCV assessment accordance with RSPO cri-  The result of peer review for HCV assessment report on behalf PT Bakrie terion 7.3. Any new plant- Pasaman Plantations, PT Grahadura Leidongprima and PT Sumbertama ings since January 1st 2010 Nusapertiwi cannot showing by auditee must comply with the RSPO  The record of attendant list for consultation public in order to HCV assess- New Plantings Procedure ment on behalf PT Sumbertama Nusapertiwi cannot showing by auditee  PT Bakrie Pasaman Plantations have year of planting > Nov 2005 and > 2010 but LUCA document and NPP document cannot showing by auditee  Hectare statement on behalf PT Grahadura Leidongprima cannot showed by auditee so that auditor cannot ensuring LUCA required or not Some conditions above has raised as non-conformity (NCR no. RSPO02501). Some management units has carried out land clearing activities since Novem- ber 2005 without preceded by HCV identification/assessment. Based on RaCP tracker per November 2017 that PT Bakrie Sumatera Plantations Tbk zero management unit with potential liability and not required submitting LUCA. Whereas, based on RaCP tracker (per January 2019) and the result of corre- spondence with RSPO Compensation panel that the management units under PT Bakrie Sumatera Plantations Tbk have 2 management units with potential liability, LUCA has submitted (it has not been passed) & concept note required. Auditee cannot showing LUCA document and their communication process with RSPO secretariat in order to get approval and determine of Final Conservation Liability (FCL). It has raised as non-conformity (NCR no. RSPO02501). Following up one of resolution from 35th BHCVWG meeting year 2017 are pushing certified management unit to submit annex 7 & 8 (compensation concept note & compensation plan) to RSPO compensation panel in annual surveillance audit by each certification body according time frame which has decided in meeting. The progress of the concept note approval can be saw in indicator 7.3. 4.5.4 (b). Land conflicts, if Uncertified management units have mechanism/procedure regarding identify of any, are being resolved parties who have right to get compensation where include of the calculation of through a mutually agreed land compensation. Based on self-assessment report on behalf PT Bakrie process, e.g. RSPO Com- Pasaman Plantations, PT Citalaras Cipta Indonesia and PT Monrad Intan plaint System or Dispute Barakat that the records and documents of land compensations such as reca- Settlement Facility, in ac- pitulation of the result of land compensation identification, minute of the pay- cordance with RSPO criteria ment of land compensation, agreement of land compensation. PT Bakrie 2.2, 6.4, 7.5 and 7.6. Pasaman Plantations have land compensation document/record are the agreement of land compensation between PT Bakrie Pasaman Plantations and Mr Hendriwan dated on 29 April 2013, the agreement of land compensation between PT Bakrie Pasaman Plantations and Yayasan Pondok Pesantren Tarbi- yah Islamiyah Paraman Ampalu. Whereas, document the list of recipients of compensation and sample of document of the land compensation process (especially year of planting > Nov 2005) cannot showed by all uncertified management units. It is not compliance with requirement so it has raised as non- conformity (NCR no. RSPO02501). All uncertified management units have the procedure of receiving stakeholder complaint/grievance and dispute resolution (include of internal stakeholder) except PT Grahadura Leidongprima. It has raised as non-conformity (NCR no. RSPO02501). In addition, they have procedure of communication, participation & consultation to external & internal stakeholder. Based on self-assessment report that some uncertified management units has informed land conflict as example :

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Partial Certification Re- Audit Findings quirements  PT Grahadura Leidongprima : there is land conflict with communities amount of 267 ha. Land conflict has solved 197 ha in year 2010 whereas the remain of lad conflict areas still in-process of settlement.  PT Bakrie Pasaman Plantations : there is land conflict with farmer group of Bukit Intan Sikabau. It has available documented agreement i.e agreement dated on 1 November 2012 regarding to solving boundary pillars between company and farmer group and additional scheme smallholder areas amount of 300 ha.  PT Citalaras Cipta Indonesia : there are company areas cultivated by communities. Company has paid land compensation to some communities for some blocks (Rawang estate) i.e D03, D04, D09, D10, B17, B18, D11, E3/4, B19, D12, D17 & D18. Whereas, the remain of other blocks (180 ha) has not been paid by company because internal company still discussion about community demand that company pay land compensation accordance market prices.  PT Sumbertama Nusapertiwi : there is land conflict with Mr Surya Indra Kusuma (farmer group of Yakin Makmur) amout of 4,800 ha and update/existing settlement/solve process is has cpmpleted at the supreme court level. Whereas, refer to case tracker or status of complaint in RSPO secretariat under PT Bakrie Sumatera Plantations Tbk period of February 2011 to July 2018 is zero complaint. Whereas, based on the result of search on website that some subsidiaries have land conflict cases, as belows :  PT Bakrie Pasaman Plantations : any land conflict with Sikabau community (Koto Balingka Sub District, Pasaman Barat District) relate of scheme smallholder areas amount of 300 ha at canal of F13.  PT Grahadura Leidongprima : house burning and killing of scheme smallholder farmer (Resman Sianipar) was triggered by a smallholder land dispute amount of 2,800 ha.  PT Sumbertama Nusapertiwi : land conflict with community in Arang-Arang Village, Jumpeh Ulu Sub District, Muaro Jambi District because the company controlled 1,170 ha of land owned transmigration communities. For cases above that information and/or documents related to the settlement process and settlement process that have not been mutually agreed upon for the case of land dispute cannot be shown. In addition, all uncertified management units has not been able to show a list of occupations of land or land enclaves or land disputes (their parties name & total of areas), map of land conflict/dispute/occupation/enclave areas and documents about the settlement process. It has raised as non-conformity (NCR no. RSPO02501). 4.5.4 (c). Labour disputes, if All uncertified management units have the procedure of receiving stakeholder any, are being resolved complaint/grievance and dispute resolution (include of internal stakeholder) ex- through a mutually agreed cept PT Grahadura Leidongprima. It has raised as non-conformity (NCR no. process, in accordance with RSPO02501). In addition, they have procedure of communication, participation RSPO criterion 6.3. & consultation to external & internal stakeholder. One of sample from handling internal dispute in PT Bakrie Pasaman Planta- tions is the form of natura replaced with goods relate of extra podding for sprayers. Whereas, other uncertified management units that there is no identified labor disputes ongoing based on self-assessment reports. Some documents/policies relate of employment to minimize of labor/employment conflict cannot showing by all uncertified management units as belows :  Policy related to equal employment opportunities for the local community.  Policy related gender equality in accordance with skills, abilities, expertise

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Partial Certification Re- Audit Findings quirements and work experience.  Policy related freedom of association and develop of labor union or communication forum.  Policy related pay attention to welfare and facilities/infrastructure for workers.  Policy related freedom of worship according to religion and belief.  Policy related OSH to protecting employee.  Policy related to implementing the minimum wage regulations.  Document of the number of worker and their worker status (industrial relations).  Document related legality of trade unions and or bipartite cooperation insti- tute. It has raised as non-conformity (NCR no. RSPO02501). 4.5.4 (d) Legal non- Based on self-assessment report, uncertified management units have the pro- compliance, if any, are be- cedure of law requirement and other requirements, the list of laws & regulations ing resolved in accordance or law register relate of environment, OSH, RSPO, license/permit and other is- with the legal requirements, sues/requirements (except PT Monrad Intan Barakat) and summary of regula- with reference to RSPO cri- tion and evaluation of regulation compliance status (PT Monrad Intan Barakat). teria 2.1. Result of the evaluation of law and regulation with their implementation by company. PT Sumbertama Nusapertiwi and PT Grahadura Leidongprima has not included Minister of Environment and Forestry regulation no.14 year 2017 but during partial audit, it has available on the list of law and regulation. Whereas, PT Monrad Intan Barakat has showed the list law and regulation and the summary of regulation and their evaluation during partial audit too. Based on self-assessment report that uncertified management units have complied with certain legal requirements but auditee cannot showing some documents/evidences as evidence that the companies has complied to some regulations such as :  PT Bakrie Pasaman Plantations : land use right certificate and decree letter or approval letter for environmental document.  PT Citalaras Cipta Indonesia : land use right decree letter and decree letter or approval letter for environmental document.  PT Monrad Intan Barakat : land use right decree letter for total of area 3,958 ha, plantation business permit decree and decree letter or approval letter for environmental document.  PT Sumbertama Nusapertiwi : plantation business permit decree and decree letter or approval letter for environmental document.  PT Grahadura Leidongprima : land use right decree letter & certificate, plantation business permit decree and decree letter or approval letter for environmental document.  All uncertified management units : evidence that employee has covered medical care and accident insurance by company and employee wage has complied to local regulation relate of minimum wage. Uncertified management units has carried out monitor of pillar boundary regularly and have map of boundary pillar.

5.3. Compliance to other RSPO Procedure

RSPO NPP No RSPO Compensation and Remediation procedure No Areal Subject to sanction No

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

i. The RSPO PalmGHG Calculator used Version 3.0

Accurate data has been put into the RSPO Yes PalmGHG Calculator

Net GHG Emission Figure (tCO2e/tCPO) 0.59

Summary of Net GHG Emission

A. Emissions Per Product tCO2e/t Product CPO 0.59 PK 0.59 B. Extraction % OER 23.40 KER 4.38 C. Production t/yr FFB processed 157,061.18 CPO Produced 36,747.781 PK Produced 6,881.819 D. Land Use ha Oil Palm Planted area 8,834.00 Oil Palm Planted on peat 0.000 Conservation (Forested) 0.000 Conservation (non-forested) 0.00

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Summary of Field Emissions and Sinks Own Crop Group 3rd party Emission tCO2e tCO2e/ha tCO2e/tFFB tCO2e tCO2e/ha tCO2e/tFFB tCO2e tCO2e/ha tCO2e/tFFB Land Conversion 85,531.61 9.68 0.54 0.00 0.00 0.00 0.00 0.00 0.00 CO Emission 2 8,612.17 0.82 0.05 0.00 0.00 0.00 0.00 0.00 0.00 from Fertilizer

N2O Emissions 4,892.84 0.85 0.03 0.00 0.00 0.00 0.00 0.00 0.00 Fuel Consumption 287.91 0.16 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Peat Oxidation 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Sinks Crop Sequestra- -81,072.61 -9.36 -0.52 0.00 0.00 0.00 0.00 0.00 0.00 tion Sequestration in 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Conservation area Total 18,251.92 2.73 0.12 0.00 0.00 0.00 0.00 0.00 0.00

Summary of Mill Emissions and Credit

tCO2 tCO2e/tFFB Emissions Sources POME 7,437.84 0.05 Fuel Consumption 228.68 0.00 Grid Electricity Utilization 18.68 0.00

Credit Export of Grid Electricity 0.00 0.00 Sale of PKS 0.00 0.00 Sale of FFB 0.00 0.00 Total 7,685.20 0.05

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Palm Oil Mill Effluent (POME) Treatment Divert to compost 0 % Divert to anaeobic digestion 100 %

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

5.5 Plan for certification of associated smallholders The company has not scheme smallholder. The mill has not developed a plan for certification of associated smallholders.

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6.0 ASSESSMENT FINDINGS 6.1 Summary of Findings

The following is a summary of findings made for the criteria listed in the RSPO Principles & Criteria INA-NI July 2016 for detail information about company’s compliances to RSPO P & C indicators has been explained on the checklist as stated on Appendix 5.

1. RSPO P & C

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

Findings:

The company has Procedure for Communication and Councultation Internal and External with the No. Doc. BMH-03, Rev. 06 on 13 June 2016. These procedures as practical guidance to handle the internal and external communication related to information of RSPO, Environment, social and law. The organization has established mechanism for communication and consultation with stakeholders, including to handling information requisition and how to response.

The company has maintained a list of stakeholders that consisting of people around the company, non-governmental organization, entreprizes/suppliers, government of villages, sub- district and district. Evaluation of the list of stakeholders will conducted if any changes of stakeholders. There is evidence that the stakeholder verification performed as documented in Compli- the list and office phone number/private stakeholders. ance status: There is evidence that the company has provided information in appropriate form and lan- Yes guage to relevant stakeholders, such as:  Report to labor agency regularly every year. No  Environmental Report (RKL-RPL) to Enviromental Agency N.A  Hazardous and toxic waste to Enviromental Agency  Plantation Report to Plantation Agency NCR No :  OHS Implementation Report to Laour Agency

HR and area Division Head assigned by the company for providing and receiving informations to stakeholders. Based on interviews with stakeholders, evidenced that the stakeholders has known on how to get the information needed from the the company. Any problems conveyed by internal parties or external parties in the form of communication will be followed up by providing response / response information at the latest 30 (thirty) days from the date of receipt of the information. The company has maintain records of information’s requests from stakeholders as documented in a Log Book requests for Information (incoming mail) and Log Books of Providing Information (outgoing mail). There is evidence that the company was response and feedback information requested by stakeholders in a timely.

Criterion 1.2: Management documents are publicly available, except where this is prevented by commercial confidentiality or where disclosure of information would result in negative environmental or social outcomes.

Findings: Compli- ance sta- The company has defined accessible informations by public, i.e: the company's history, basic tus: values, vision, mission, strategies, sustainability, human resources, workers information, map Yes the location, summary of the company's performance, organizational structure, financial performance, CSR, OHS matters, environment issues, waste, awards and certifications. No N.A Otherwise, there are informations can not accesed directly by public, but reported to relevant

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authorized ageny, i.e.: environmental management and monitoring plan, hazardous waste ac- NCR No : tivities, production plan, etc. The company also has defined confidential information and cannot accessed by public such as marketing strategy, assessment of employee performance, business development strategy, etc.

Based on interviews with village head and community (Aek Salabat Village), known that the villagers understand how to obtain information from the company. The company maintains records of request for information and responses under “Logbook Komunikasi” on each unit management. Based on document verification, that’s known no information request from stakeholders. There are showed sample of request from villagers (relief fund) and the company has been follow up these request.

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

The company has established a policy namely “Kebijakan Code of Coundact. The policy signed by General Manager dated 16 January 2019. In the policy was describe commitment of Compli- the organization to ethical conduct in all their operation. There is sufficient evidence that the ance sta- policy has communicated and understood by all personnel within the company. tus: Yes Company has also documented specific policy regarding Ethical Code in February 2017. No There is evidence that the code of conducts has com-municated to all levels of the workforce N.A and stakeholders. Interview with stakeholders’ result found that suppliers don’t have to pay to be PT BSP partner. They only have to follow the Company’s Procedure regarding business NCR No : partnership. Interview result with worker found that there is no such as collusion issue regarding the worker recruitment and/or mutation process. They stated that it was easy for them to join as a worker in PT BSP.

Criterion 2.1: There is compliance with all applicable local, national and ratified international laws and regulations. Findings:

The company (Estate and Mill) has list of legal and other requirements presented in list of regulation and law covering plantation, OSH, labor, and environmental sections. The law and regulation is including relevant laws, government regulations, Instruction of President, Minister Regulations, Local Regulations, and Governor Regulations etc. All copies of law and regulations is available and maintained and the company has a record of list and regulation document, already mentioned regulation and law should to fulfill by company. Compli- ance sta- The company has not fulfill some regulation such as: tus:  Permenakertrans No.09/MEN/VII/2010 about operator and officer of lifting equipment Yes article 5 where the lifting equipment shall operated by operator which have OSH license and work book in accordance with type and qualification i.e. M. Yakub (license No has expired) N.A  Permenaker No.01 year 1988 about qualification and requirement for operator of ste- an enginee on behalf Warsito, Abdul Karim Nasution and Rifani (license has expired) NCR No:  Permentan No. 24 year 2011 about requirement and mechanism of pesticide regis- RSPO teration article 9 02509  Based on field verification found the content of first aid kit box does not accordance with Permenaker No.15 year 2008 (Gurach Batu estate, Serbangan estate and Sei Baleh estate) and found the content of first aid kit has been expired  During field verification to temporary storage of hazardous and toxic waste (Gurach Batu estate, Sei Baleh estate and Serbangan estate) found hazardous and toxic waste does not equipped with symbol and label of hazardous and toxic waste in accordance with PermenLH No.14 year 2013 This condition raised as Non-conformity (NCR RSPO 02509)

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The company maintained and updated a list of applicable legal and other requirements, that consist of environmental field, OHS Fields, RSPO & ISPO related. There is evidence that the company has evaluated the compliance of their estates to these legal requirements according to their company procedures as documented in their SOPs.

Based on result from on-site verification conduct on 25-26 July 2019, there is some information such as the company fulfil the first aid content in accordance with Permenaker No.15 year 2008. The company also has deliver the first aid kit to all foreman i.e. Gurach Batu estate, Serbangan estate and Sei Baleh estate.

During on-site verification to POM area, the company also has equipped the OSH license such as:  Loader operator on behalf Muhammad Yakub (Registeration No: P.12.8301-OPK3- LT/PAA/II/2018 valid until 02 February 2023)  Boiler operator on behalf Abdul Karim Nasution (Registeration No: P.10.1968-OPK3- PUBT-B.I/V/2018 valid until 4 June 2023), Warsito (Registeration No: P.08.350- OPK3-PUBT-B.I/V/2018 valid until 4 June 2023) and Ahmad Rifani (Registeration No: P.10.1969-OPK3-PUBT-B.I/V/2018 valid until 4 June 2023).

Based on site visit to temporary storage of hazardous and toxic waste, the company also has provide the symbol and label of hazardous and toxic waste in accordance with PermenLH No.14 year 2013.

Criterion 2.2: The right to use the land is demonstrated, and is not legitimately contested by local people who can demonstrate that they have legal, customary or user rights. Findings: The company has record of legal ownership of land i.e:  Minister Decree of State Agrarian Affairs / Head of National Land Agency No: 66/HGU/DA/85/B/51 dated 13 November 1996 about granting of land use permits to PT. Bakrie Sumatera Plantations as large as 18,556.01 hectares located in Kisaran, North Sumatra Province.  Certificate of land use permit No.2 dated 1 May 1997 located in Kisaran Timur village, Kota Kisaran Timur Sub District, Asahan District, North Sumatra Province as large as 18,517.76 hectares. Based on the historical of the certificate that the company has been release of land as large as 25.6 ha from the total land as large as 18,556.01 ha. Compli- The company has procedure of identification and maintenance of pillars HGU (BMH-09 revi- ance sta- sion 00 effective dated 30 June 2016). The procedure regulated about maintenance of pillars tus: HGU conducted every once a year. The company has been conduct regularly monitoring and Yes maintenance that equipped with minutes of monitoring and maintenance. The company has No map that describe about legal boundry which issued by National Land Agency. Based on field N.A visit on pillar of HGU (BPN 059) at Kuala Piasa Estate, the pillar in good condition and well maintained. NCR No : Kuala Piasa estate has monitoring of pillar HGU every year. There is evidence monitoring year RSPO 2019 at division 1 kuala paisa estate with result good condition and well maintained 02510

Gurarch Batu estate has monitoring of pillar HGU every year. There is evidence monitoring year 2019 at Gurarch Batu estate with result good condition and well maintained for pillar no 1-24.

Sei Baleh estate has monitoring of pillar HGU every year. There is evidence monitoring year 2019 at Sei Baleh estate with result good condition and well maintained for pillar at block 96401.

During in 4rd surveilence audit, there is no land dispute in company’s area and member of the surroundings community. The last conflict was between the company and Tinggi Raja community (Tinggi Raja sub district, Asahan district) which has been resolved and the result ac-

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cepted by both parties.

Based on field visits and interviews with plantation agencies and surrounding communities, there is currently no land dispute between the company and other parties.

Policy related to the prohibition on the use of mercenaries in plantation operations are still the same as previous assessments. The company has a policy regarding the prohibition of the Use of Mercenaries or Paramilitaries in Estate Operations. Based on field visits, it is known that there was no indication of the use of mercenaries in the operations of the plantation.

The company can not showing an evidence about document of previous landownership. This condition raised as Non-conformity (NCR RSPO 02510)

Criterion 2.3 : Use of the land for oil palm does not diminish the legal, or customary or user rights of other users, without their free, prior and informed consent Findings:

There are no maps of indigenous communities because in the area of PT BSP there is no customary rights community. The company’s Palm Oil Plantation built by the Dutch since 1911, thus the documents related to public land compensation is not available anymore. Based on interviews with people around the PT BSP note that there is no public denial of the existence of oil palm plantations. The Society helped with the plantation companies, especially in terms Compli- of employment. Evidence of the agreement is no longer available given the document storage ance sta- period has exceeded 30 years so it has been destroyed. tus: Yes However the company has SOP Free Prior and Informed Consent No. Doc. BMH-06, Rev. 00, on 13 Juny 2016. Within the SOP described FPIC stages, those are: Identification of custom- No ary lands, Involving the communi-ty institutions, Delivering information, Ensure that the con- N.A sent was given voluntarily, Guarantee that the approval was given before operations, Ensure that there is an agreement, Resolve con-flicts, Negotiation, Finalization of the written agree- NCR No : ment.

The company has a Procedure Identifying the Parties Entitled to Receive Compensation Doc- ument No. RSP- 01 dated 11 April 2011, Revision 1. The procedures that guarantee the implementation of the identification of the parties entitled to receive compensation for damages crops, plants and buildings to obtain the concession for the company.

Criterion 3.1: There is an implemented management plan that aims to achieve long-term economic and financial viability. Findings:

The organization has a documented management plan as documented in the document Budget 2019 and Strategic Plan 2017 – 2021 (including achievement data 2018 and 2019 estimation). The document was included, i.e.: Compli-  Operational Data Palm (Hectare planted; Yield/Ha; Field Production; FFB Put Into ance sta- Process; Extraction Rate; Factory Production; Mill Utilization; Sales Volume. tus:  Field Cost (Ha Mature; Field Production; Field Cost – Amount; Field Cost per Ha; Yes Field Cost per ton.  Processing Cost (Factory Production; Processing Cost Amount; Processing Cost per No Kg. N.A  Purchase Cost (Raw Mat’l and Finished Goods/Trading Purchase  Cost of Goods Solds (Sales Volume, Production Cost, FFB Purchase, Processing NCR No : Cost; Total Cost of Manufactured, and etc).  Capital Expenditure (Plantations and Non Plantations).  Statements of Income (Revenue, COGS, Gross Profit; Operating Expenses, Operat- ing Profit, EBITDA, Income Before Tax, Net Income and etc).  Balance Sheet that showing financial indicators – profitability forecast.

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The company has defined replanting plan for year 2017 - 2020 for estate supplied to Kisaran POM. Its plan will review its replanting program every year according condition and company’s financial capability.

Criterion 4.1: Operating procedures are appropriately documented, consistently implemented and monitored. Findings:

The mill and estate has Standard Operating Procedures (SOPs) that covers all aspects of oil palm planting and management contains the following SOPs that cover all estate operations such as Nursery Practice, Land Clearing, Preparation and Planting, Soil Conservation and Terracing, Road Con-struction and Maintenance, Establishment and Maintenance of Legume Covers, Planting Density and Planting Technique, Palm Replacement During Immaturity and Supplying, Upkeep of Immature Oil Palms, Upkeep of Mature Oil Palms, Pests & Diseases, Manuring, EFB Application, Harvesting, Bunch Census and Palm Thinning. Compli- ance sta- The palm oil mill has SOPs covering all mill operations such as FFB Grading, Sterilization Sta- tus: tion, Press Station, Threshing Station, Oil Room, Kernel Plant, Laboratory, CPO & PK Des- Yes patch, Engine Room, Boiler Room, Electrical, Workshop as well as Raw and Boiler Water No Treatment Plant. N.A Based on document verification known that estate conduct temporary keeping of hazardous and toxic waste at temporary storage of hazardous and toxic waste in the estate more than 30 NCR No : days where this is not accordance with Procedure of waste management (BMA-12 revision 02 RSPO issued date 14 March 2017) (Gurach Batu estate and Serbangan estate). This condition 02511 raised as Non-conformity (NCR RSPO 02511)

In order to ensure consistent implementation of the SOPs among all levels of the workforce in the field, the following mechanisms are internal audit. Records of monitoring and any actions taken has maintained and available.

It has been verified that there is no 3rd party FFB received by the mill. The mill has record the origins of all third-party sourced Fresh Fruit Bunches (FFB).

Criterion 4.2: Practices maintain soil fertility at, or where possible improve soil fertility to, a level that ensures optimal and sustained yield. Findings:

Practices that maintain or enhance soil fertility to ensure sustained yield are contained in fertilizer procedure (KBMEOP-WI-18 revision 02 effective date 15 July 2013). Actual fertilizer applications are recorded monthly and compared against fertilizer recommendations in the monthly estate manager’s report with summary of reconciliation of fertilizer application sched- Compli- ule. Fertilizer application schedule and records for each field is available and maintained at ance sta- the respective estate offices. tus: Yes Foliar sampling is conducted on an annual basis and its results and corresponding fertilizer No recommendations. The leaf nutrient assessment to determine the levels of nitrogen, phospho- N.A rus, potassium, calcium, magnesium and boron in the palms was conducted. The results of this assessment provided the input for fertilizer recommendations for 2019 which is now being NCR No : followed by the estates. Soil analysis is also conducted on an annual basis by an external lab RSPO with soil samples taken from each estate field. 02512

The company has been conduct leaf analysis and has a fertilizer recommendation of 1st semester and 2nd semester year 2018 but the company can not showing the fertilizer application conduct in accordance with fertilizer recommendation that has been assigned. This condition raised as Non-conformity (NCR RSPO 02512).

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As part of the nutrient recycling strategy, the company use of Empty Fruit Bunches (EFB), Palm Oil Mill Effluent (POME), and palm residues after replanting. The company has record of FFB application year 2018 such as:  Gurach Batu estate: EFB application as much as 4,634.910 mt with total area application is 54.15 ha  Kuala Piasa estate: EFB application as much as 1,795.29 mt with total area application is 41.40 ha  Serbangan estate: EFB application as much as 5,955.80 mt with total area application is 104.00 ha

Criterion 4.3: Practices minimise and control erosion and degradation of soils. Findings:

During 4th surveilence audit, there is no change the data or map about the fragile soil. The company has a map of the land for Sei Baleh Estate, Serbangan Estate, Tanah Raja Estate, Gurah Batu Estate; Kuala Piasa Estate shows mainly alluvial soil type. Compli- ance sta- Maps of soil types for all estates are available at the main office. The maps show that there tus: are no marginal soils within the estate area and most of the estate land consists of alluvial Yes soils and podsoils. No The company has work instructions for planting on slopes are documented and describes N.A methods to reduce soil erosion on slopes with ‘tapak kuda’ (horseshoe) methods. The company has working plan and realization of road maintenance year 2019, Form No. NCR No : BME-FR- 06 Rev 01. For example in Kuala (Estate division 1), Gurarch Batu estate (division 3) period Jan – March 2019 has done road maintenance activities such as closing hole. There is no peat soil or fragile or problem soils located within the estates.

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

Findings:

Consistent with the previous audit, the company has established a water management plan for mill and plantation with identified actions, as demonstrated at organization’s environmental license, i.e: DELH. The water management plan was included following items identification of water sources, efficient use of water, renewability of water source, impacts on catchment area and local stakeholders, access of clean drinking water all year round for stakeholders, avoidance of surface and ground water contamination. The identified water sources are Asahan River and Ground Water. In otherhand the sources Compli- of impacts are domestic and plantations activities at upstream of Asahan River and POME ance sta- that applied for Land Application. tus: The company has a license for utilizing surface water from authority agency of local govern- Yes ment, i.e.: Head Decree of Integrated Services Agency Province of North Sumatra (No.: No No.610/127/BPPTSU/2/12.1/XI/2014, dated 6 November 2014) regarding granting License of N.A utilizing surface water. The license was expired dated 6 November 2017. The company can show proof of the arrangement of the extension of surface water utilization permit number NCR No : 38/REKOMTEK/BWS.SII/2019 dated 28 January 2019. The company also has License for land application of mill effluent, based on Decree of Re- gent of Batu Bara District, Decree No. 027/SK/DLH/IV/2017, dated 17 April 2017, concerning granting License POME Utilization for Land Application. The license was valid during the audit. The POM has facilities for treatment of mill effluent, namely IPAL (installation of mill effluent processor). The POME produced by POM was treatment pond and discharge to the land as land application. The company has record of POME quality measurement result, POME analysis by external

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laboratory (DLH of South Sumatera Province) who has approval and accredication from Na- tional Accreditation Committee, such as:  Certificate Result No.13/Dis.LHSU-UPT.LL/C/IX/2018 for September 2018 (Aerobic pond-outlet). Based on measurement result the paramaters is below the standard for outlet.  Total POME produced by POM discharge to the land application within 2018 about 184,335 m3. The actions for protect water contamination and pollution was identified and the monitoring program has been defined associated with HCV Programme. There is evidence that the action plan and monitoring program to protect water sources and to ensure that the quality of water still meet requirements (based on local and national government regulations) has been implemented. The organization has the effluent treatment process, where a process for checking and monitoring water discharge quality (especially BOD) are available. There is evidence that water discharge quality in compliance with national regulations. There is evidence that the organization monitoring their BOD from the wastewater periodically every month, some documents of monitoring results reviewed and found that the results still meet requirements There is a plan to manage and monitor water sources / rivers by planting trees and maintenance along the riparian zone. There is evidence of monitoring in April 2018. The company (POM) has record of surface water and ground water quality measurement result, analysis by external laboratory who has approval and accredication from National Ac- creditation Committee, such as:  Ground water - Certificate Result by Mutuagung Lestari No. 10131/SL/IX/18, dated 15 October 2018 for P 94 202. Based on measurement result the paramaters is below the standard for outlet. (2nd Semester)  Surface water - Certificate Result by Dinas Kesehatan Propinsi Sumatera Utara No. 356/X/2018, dated 22 October 2018 for river. Based on measurement result the paramaters is below the standard for outlet. (2nd Semester)

Kuala Piasa estate has monitoring used water year 2018 is 1,176 m3 and 2019 until March 2019 is 278 m3. The organization has maintain records of mill water use per tonnes of Fresh Fruit Bunches (FFB) processing with the norma of water use is 1.28 m3 / ton FFB. Based on document observation, it know that average water used by Kisaran POM is 1.57 m3 / ton FFB (period Jan- uary - March 2019) and 1.49 m3/ton year 2018.

Criterion 4.5: Pests, diseases, weeds and invasive introduced species are effectively managed using appropriate Integrated Pest Management (IPM) techniques. Findings:

The company has procedure related to Integrated Pest Management (IPM), i.e: Compli- 1. Procedure No. BMEOP-WI-15, Rev 02, 15 dated July 2013 about Caterpillar and ance sta- Bagworm controlling, when controlling such as: tus:  Using beneficial plant (Turnera subulata and Antigonon leptopus) Yes  Hand picking  Biologycal insecticide based on census level No  Path spraying and fogging N.A 2. Procedure no. BMEOP-WI-14, Rev 02, dated 15 July 2013 about Pest Integrated Management System for rat, thirataba, and oryctes. For rat level attack, when level at- NCR No : tack < 5% in one area, controlled by Rodenticides on palm oil tree. If the level attack RSPO more than >5% in one area, controlled by Rodenticides in every tree palm oil. While 02513 the oryctes attack controlled by hand picking and using the oryctes trap (orycnet) in every tree palm oil. 3. Procedure no. BMEOP-WI-28, Rev 02, dated 6 April 2015 about Caterpillar and Bag- worm census. Procedure mentioned the census conducted in every week in every

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field has been attacked, and every month for every filed attacked yet.

In accordance with Work Instruction (WI) No. BMEOP-WI-28 revision 2 dated 6 April 2015, the global census is carried out once a month for each map on a field that has never been attacked but Kuala Piasa estate last conducted a global census in May 2018 so that it does not comply with work instruction (WI). This condition raised as Non-conformity (NCR RSPO 02513) The company has IPM plan and implemented, example in Kuala Piasa Estate. There is record of census Caterpillar and Bagworm on May 2018. Based on the census, there is no pest attack above the threshold value. So o need control effort has been taken. Implementation of IPM programme for example by planted benefical plant at both sides of Main road, i.e: turnera subulata and antigonon leptosus. Gurach Batu estate has IPM plan and implemented, example in Block P94102 (replanting area), there is record of census oryctes on 15 December 2018. Based on the census, there is no pest attack above the threshold value. So no need control effort has been taken. Serbangan estate has IPM plan and implemented, example in Block P94103, there is record of census oryctes on 17 January 2019. Based on the census, there is no pest attack above the threshold value. So no need control effort has been taken The company has provided training to those involve in the implementation of Integrated Pest Management (IPM) namely Training of IPM for foreman, date on 28 December 2018 with followed 24 person and also.

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

Findings:

The company has a policy on safe use of chemicals that are contain ISPO and RSPO Sus- tainability policy. For pesticide application, the company uses approved and registered Agro- chemicals permitted by Head of Manpower Agency of Sumatera Utara Province, with recommendation No. 1255A-7/Rek.Pstd/DTK/2017, dated 31 July 2018, about recommendation of pesticides/chemical usage. There are 48 names of pesticides/chemical was listed in the recommendation.

Compli- There is evidence that use of pesticide maintained, including detail the active ingredients used ance sta- and their LD50, area treated, amount of active ingredients applied per ha and number of applications. tus: Yes The company has program to manage their oil palm from pests, diseases and invasive organ- No ism in 2018 and implemented. Based on their work instruction number BMEOP-WI-22 Rev 01, N.A in the page 2, state that the census will conducted in every 1 week in the every field for global census. And if any invasive in high categorized, the company conducted the effective census, NCR No : with the categorized there is 4 head of bagworm per midrib, and 8 head of nettle caterpillar per RSPO midrib, the census will be conduct 1 – 2 per week with 5 – 6 tree/Ha. After that, the mortality 02514 census will be conducted if needed after the insecticide spraying with the aim is to ensure the mortality rate and effectiveness of the IPM program. RSPO

02515 This activity is accordance to Work Instruction about control of bagworm and nettle caterpiller

withdocument number BMEOP-WI-23 Rev 01 in page 2, state about managing step for bag worm and caterpiller, with the step is: 1. Hand picking 2. Biological steps with integrated pest management use the beneficial plant i.e. Turnera subulata, and Antigonon leptopus 3. Chemical steps with spraying based on global and effective map of invasived censused use insectiside, Spraying methode also have 3 steps, first is spraying on the leaf, especially the underside of the leaves, second is spraying with mist blower, applied in the arround of the tree, and the third is fogging. This methode is a last alternative if the hand picking

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and biological steps can not handling the pest invasive.

The company has defined a policy on safe use of chemicals that are containing on sustainability policy on article 11, e.i: “use of agricultural chemicals (agrochemicals) which is registered and permitted by the competent agency”. Ther is no pest attack higher than threshold value in 2018, so that the control effort has not made.

The company has done in house training Use of Limited Pesticides on 25 September 2014 in cooperation with the Fertilizer and Pesticide Control Commission of North Sumatra province, evidenced by record attendance and certificate of completion of training participants. During 2017 and 2018, some training regarding pesticides was conducted, e.g.: training on OHS for hazardous goods for officer on 17-19 May 2017. Not all officers using pesticides (spraying workers) receive training according to Permentan No.24 of 2011 article 9. This condition raised as Non-conformity (NCR RSPO 02514) Storage of pesticides including the disposal of used pesticide containers in accordance with the relevant regulations. The company categorizes used pesticide containers as a Hazardous Waste (LB3). During 4th surveillance audit, there is evidence that pesticide containers was stored at temporarily store hazardous waste. The company has valid licenced to temporarily store hazardous waste (Head of Batubara District Decree No. 660/235/BLH/IV/2015 issued date 24 April 2015).

Records of pesticide contaniners available in logbook and form sheets Hazardous waste storage. Base on record of form sheets Hazardous waste storage on 30 April 2019, amount of pesticide contaniners is 0,693 ton

The company has establish a docuented work instruction (WI) for pesticide application namely BMEOP-WI-09. Rev. 02, issued on dated July 15, 2013. There is evidence that the company has conduct an in house training of OHS for hazardous chemical officers that was conducted on May 17-19, 2017. There is no Pesticides applied aerially, there is no smallholder scheme, proper disposal of waste material, according to procedures that fully understood by workers and managers demonstrated during audit.

The medical checkup for workers who handling chemical (chemical store officer, chemical sprayers) has been conducted as accordance with the relevant regulations (Permenaker No. 02 year 1980 and No. 3 year 1986). Records of medical checkup are available and maintained, i.e.: report of medical check up result for PT Bakrie Sumatera Plantations Tbk, year of 2017 issued by “Balai Keselamatan dan Kesehatan Kerja Medan” No. 106/DHU/BK3- MDN/VII/2017, July 2017. And, report no. 114/DHU/BK3-MDN/IX/2017, dated 29 September 2017.

There is some non-conformity such as:  Not all spraying worker conduct medical checkup in accordance with Permenaker No. 02 year 1980 for year 2018 and 2019  The company does not create and submit report at least 2 month after medical checkup to Direktur Jenderal Bina Lindung Tenaga Kerja by Local Regional Office of Direktur Jenderal Bina Lindung Tenaga kerja This condition raised as Non-conformity (NCR RSPO 02515)

The company has policy that no pregnant and breast-feeding female working with chemicals. The policy also has strengthen by document PKB. Otherwise, the company also has implemented a system to identify pregnant and breast-feeding female, i.e by conducting pregnant test periodically every six month. There is sufficient evidence that there is no pregnant and breast-feeding female working with chemicals. based on Interview with spraying workers on Gurach Batu estate during audit found that they are aware that pregnant/lactating women are

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not allowed to handle pesticides in any circumstances, and they are not in pregnant/lactating conditions

Criterion 4.7: An occupational health and safety plan is documented, effectively communicated and implemented. Findings:

The company has defined a documented policy about OHS. The policy was written in Bahasa and signed by CEO of BSP Kisaran (Hepi Sapirman) dated 28 February 2017. The policy was cover mitigation of risk to workers health and safety at all workplace activities. The policy has socialization to all workers within the orgnization by placed copy of the policy on strategic workplaces. And, there is evidence that workers aware and understand the policy

OSH programme/plan defined yearly base. For example OHS program/plan for year of 2019 was included targets for improving OHS. There is sufficient evidence that the OHS program/plan has implement and monitor the effectiveness. Some records of OHS program and impementation were reviewed, i.e.:  Report of P2K3 activities for period January – March 2019  Monthly minute meeting of P2K3 for period January – March 2019  HSE performance for period Januay – March 2019.

Records of hazards identification and risk assessment for mill and estates are available on form no. BMA-FR-02 and updated periodically 1 (one) time a year at minimum. And the last Compli- update has performed on 2018. The risk assessment has been conducted for all the organi- ance sta- zation’s processes and activities. The company has defined a documented procedure as tus: guidance for hazard identification, risk assessment and define risk control, i.e. procedure of Yes identification, assessment and control of risk and impact, document no. BMA-01, revision 06, No dated 10 March 2017. N.A

Based on document verification related HIRAC, there is no identificatiof of hazardous and risk for fuel sale activity in the emplacement (Serbangan estate). This condition raised as Non- NCR No : conformity (NCR RSPO 02516). RSPO 02516 The company has identified all potentialy hazardous operations sucs as machineries operations, pesticides application, transportation, harvesting, and etc. Then risk control established RSPO including engineering control, procedural control and provided appropriate PPE. PPE was 02517 provided by organisation to workers and replaced when damaged. The evidence was sighted. The stock of PPE was listed in warehouse stock card such as googles, mask, gloves etc. RSPO Organization maintains a list of PPE distribution in form “List of PPE Distribution”. 02518

Based on field observation to pesticides application, observed that all workers have wearing appropriate PPE such as safety boots, rubber gloves, safety mask, safety googles, and apron

Based on field observation and interview with worker found the worker does not wearing required PPE (mill). For example: worker of FFB unloading does not wearing safety shoes. This condition raised as Non-conformity (NCR RSPO 02517)

The company has conducted First Aid on Accident (P3K) training with participants: Leadership employees, staff and supervisors. Resource persons who have the qualifications / Hiperkes Certificate issued by the Minister of Manpower and Transmigration. Based on interview with harvesting foreman (Gurach Batu estate P08301 and Serbangan estate P10303) known that the foreman have not received first aid training. This condition raised as Non-conformity (NCR RSPO 02518).

The company has OSH committee (P2K3) that has resposible to implement OHS within the company. The OSH committee (P2K3) was formed in accordance with decree no. 197- 7/06/DTK-SU/WIL III/207 by Head of Manpower Supervisory Area III. The members of OSH committee (P2K3) consist of management of the company and workers and a General OHS

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expert as secretary. The OSH committee (P2K3) has performed monthly meeting regularly and report te results to the authority agency. Minute meeting and attendance list are available. The meeting has attended by the OSH committee (P2K3) members and representative workers and concern about health and safety.

The company has define a documented procedure of emergency response, document no.BMA-08, revision 03, effective dated 23 August 2016. Some emergenciy conditions were identify, i.e.: fire, earthquake, demonstration, sabotase or bomb threat and oil spill. The company has assigned first aid officers. The first aid officers has license from the authority agency, i.e: M.Ridwan Siregar, Abdul Basid, Misroadi and Sugianto. Records of first aid training i.e attendent list of participant, first aid material and documentation of activity. Based on the field observation to estate and plant tour to POM, observed that first aid kit boxes available on site and completed. Records of first aids boxes inspection available on document no. logbook (BMQ-FR-23 revision 00).

There is ecvidence that medical care for employee has been provides i.e clinic and hospital. Moreover, the company also provided social and working insurance i.e.: BPJS Kesehatan and BPJS Ketenagakerjaan. Payment receipt of BPJS are available. Based o –site interview, were observed that the medical cares and insurances are valid. The company has record of lost time accident metrics for year 2018 and 2019.

Based on result from on-site verification for NC Major on July 25 2019 to Kisaran POM seen that the worker especially for third party worker has equipped with the PPE such as safety boot and helmet.

Criterion 4.8: All staff, workers, smallholders and contract are appropriately trained. Findings:

The company has defined formal training programme that covers all aspects of the RSPO Principles and Criteria, and that includes regular assessments of training needs and documen- Compli- tation of the programme. The program was proposed by each unit within the organization to ance sta- human resources to be further processes. For example training program for 2019 consist of: tus: simulation of fire handling, handling of hazardous waste training, and etc. Yes No The company can not showing the training program year 2019 related training of limited pesti- N.A cide usage and RSPO SCCS. This condition raised as Non-conformity (NCR RSPO 02519). NCR No : RSPO The company can not showing evidence that the officer which implemented the RSPO SCCS 02519 has received related RSPO SCCS. This condition raised as Non-conformity (NCR RSPO 02520). RSPO 02520 Records of training for each employee are available and maintained. The record namely Daftar Riwayat Pelatihan, document no. BMH-FR-16. The record contain information type of training, date of training, venue of training, and etc.

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

Findings: Compli- ance sta- The company has EIA document i.e. Document of Environmental Evaluation (DELH) year tus: 2011 and has been approve on 3 October 2011 with number No:1512.D/BLH-SU/BTL-A/2011 Yes for estate and mill as large as 9,243 ha with mill capacity i.e. 45 ton/hour. The document covering operational such as mill operational, infrastructure and waste liquid management. The No company has conduct environmental impact assessment in accordance with government N.A

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Page 37 of 207 regulation. An environmental impact assessment has been conduct with stakeholder consultation to identify an impact. NCR No : RSPO The company has EIA document i.e. Document of Environmental Evaluation (DELH) year 02521 2011 and has been approve on 3 October 2011 with number No:1513.D/BLH-SU/BTL-A/2011 for rubber estate as large as 10,806 ha. The document covering operational such as mill operational, infrastructure and waste liquid management. The company has conduct environmental impact assessment in accordance with government regulation. An environmental impact assessment has been conduct with stakeholder consultation to identify an impact.

The company has environmental management plan that stated in the environmental management plan document (RKL) and environmental monitoring plan document (RKL). The documents covering information such as type of impact, monitoring of impact, source of impact, parameter to monitoring, aim of monitoring, method of monitoring, location of monitoring, period of monitoring, person in charge and related agency.

The company has been implemented the environmental management plan in accordance with matrix of environmental monitoring and reporting the implementation periodically each semester to authority agency in accordance of the national and local regulations.

The company have not conduct review for mangement and monitoring plan that has been assigned in the matrix of environmental management and monitoring plan (RKL-RPL) at least once every two years. This condition raised as Non-conformity (NCR RSPO 02521).

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

Findings:

The company has been conducted HCV assessment on April 2009 by Remark Asia. The HCV assessment covered protected areas inside land title, status of conservation (IUCN, CITES, Government regulation) and identification of habitat of high conservation value. Based on report of HCV assessment, there are list of stakeholder for HCV assessment i.e company, local community, government, community leaders. There is also minutes of meeting for stakeholder consultation and documentation of public consultation. The HCV assessment has been conduct checking include biological. Base on report of HCV assessment there is HCV 1 and HCV 4 i.e river border. The HCV assessment conducted refer to HCV toolkit that adopted on HCV toolkit Inodnesia year 2008. The company has map of HCV that has been overlay with land ti- Compli- tle map and area map. ance sta- Based on HCV assessment there is identification of HCV that the habitat for RTE spesies i.e. tus: Piasa river, Kuala Piasa estate and Block P93101. Yes Based on result of HCV assessment, there is mangement and monitoring plan year 2019 for No area is a habitat for populations of threatened species, the spread is limited or protected sur- N.A vives. Some of the management and monitoring plans i.e. restoration of the habitat or vegetation in the riverside. NCR No : The company has been conducted implementation of management and monitoring plan such as:  Monitoring of signboard every month. - Kuala Piasa estate: Date April 2019 at division 1, signboard with good condition - Sei Baleh estate: Date March 2019 at division 2, signboard with good condition  Monitoring of flora and fauna every 4 month (BMA-FR-36 revision 00). - Kuala piasa estate: date 27 April 2019 at block 95101: dragonfly, buterfly, prenjak bird, and monkey, etc. - Gurarch Batu estate: date 11 February 2019 at block P11301: Pakis udang, Senggani, Teki, etc - Sei Baleh estate: date 21 March 2019 at division 3: Rumput teki, putri malu, pakis

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udang, prenjak bird, kutilang bird, terocok bird, etc - Serbangan estate: date 18 March 2019 at division 1: Rumput teki, putri malu, pakis udang, cobra, gagak bird, tengkek bird, pig, etc  Socialization of HCV regularly to employee, staff and local community - Kuala piasa estate: socialization of HCV to Tinggi Raja village and Terusan Tengah village on June 28, 2018 with 13 participants - Gurarch Batu estate: socialization of HCV to Perhutaan Silau village on 11 July 2018 - Sei Baleh estate: socialization of HCV to Perk. Sei Baleh village on 25 June 2018 with 12 participants - Serbangan estate: socialization of HCV to worker on 15 June 2018 with 19 participants

The company has been conducted regularly inspection to ensure implementation of mitigation plan that has issued. The company has policy of sustainable of palm oil assigned 28 February 2017 by CEO BSP Kisaran. The policy regulated about protected of RTE species. The company has monthly programme such as socialization related status of RTE species to employee, staff and community. The company conducted field inspection to check the traps inside location of HCV that stated in monthly report of HCV findings. The procedure for management and monitoring of HCV (BMA-09 revision 01 effective date 3 November 2016 has been stated about the sanction refer to regulation if any employee shown to do things that are prohibited i.e not allowed to trade wildlife both protected and unprotected. The company has management and monitoring plan of HCV year 2018. The management and monitoring plan described about location of HCV, clasification, status and comment, corrective action, person incharge, due date and cost. The company has record of monthly monitoring report for HCV area. The company has HCV area set aside with local communitiy i.e. local graveyard of Terusan Tengah village and Tinggi Raja village on January 2018. The company has HCV map. The company has conduct socialization of HCV to Tinggi Raja village and Terusan Tengah village on June 28, 2018 with 13 participants. Kuala Piasa estate has been able to show evidence of agreement between the company and the local community of Terusan Tengah village, Tinggi Raja village (Kuala Piasa estate) and Subur village, Banjar village (Serbangan estate) to keep HCV area dated 15 June 2017. Gurarch Batu estate has been able to show evidence of agreement between the company and the local community of Perhutaan Silau village to keep HCV area dated 11 July 2018. Sei Baleh estate has been able to show evidence of agreement between the company and the local community of Suko Rejo village to keep HCV area dated 11 Februar 2019.. Serbangan estate has been able to show evidence of agreement between the company and the local community of Subur village and Banjar villageto keep HCV area dated 15 June 2018.

Criterion 5.3: Waste is reduced, recycled, re-used and disposed of in an environmentally and socially responsible manner Findings: Compli- The company has list of waste and source of waste. The company has inventory of chemical ance sta- source and containers and kept in the hazardous and toxic waste storage. tus: Yes The Company has temporary storage licenses to keep the hazardous and toxic waste, i.e. No Head Decree of Asahan District Number: 660.1/0464/LH/2014 dated June 16, 2014 about the temporary storage permit of hazardous and toxic waste material PT BSP Kisaran. The decree N.A valid until 5 years from the register date. NCR No : All chemicals and their containers have been disposed of responsibly, such as hazardouse RSPO waste from agrochemical container, usage accu, usage tonner etc. 02522

The company has management and disposal plan to reduce pollution. It is explain about iden-

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tification and monitoring source of waste and pollution, management and disposal cooperation with third parties. The company has been realize the management and disposal plan cooperation with PT Amindy Barokah. The company does not conduct disposed off waste using open fire.

Based on document verification, it is known that the company has not been able to show recordings of all chemical waste and its container has been disposed of responsibly where found packaging of hazardous and toxic material (KCl fertilizer sacks) in the housing area (Serbang estate) and the last hazardous and toxic waste shipment record is November 2017. This condition raised as Non-conformity (NCR RSPO 02522).

A waste management plan been sighted at PT. BSP Kisaran palm oil mill and estate which includes hazardouse waste management, solid waste management and sewage management. The mitigation measures identified as recycle of waste, no open burning, disposal of domestic waste and providing enough bins at workers houses.

Sewage management is not directly discharge to waterway, septic tanks at each house and replace them with new units. This will be monitored by periodic visit at housing area.

Based on site verification to Serbangan estate, there is not found that the worker not re-use the fertilizer container (sack) around the emplacement.

Criterion 5.4: Efficiency of fossil fuel use and the use of renewable energy is optimized. Compli- Findings: ance status: A plan for improving efficiency of the use of fossil fuels and to optimise renewable energy Yes have been in place and monitored. The company has a plan for improving efficiency of the use of fossil fuel and optimize renewable energy usage. Records of renewable energy usage are No available on document “data of fibre and shell usage”. The company has record of fuel usage N.A year 2018 is 73,293.30 litre. NCR No :

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

Compli- ance sta- Findings: tus: Yes The company has established a zero burning policy signed by top management and not used No fire for preparing land for replanting so assessment document not available. There is evidence that during field visit that there is no fire using for replanting or any other purposes. N.A

NCR No :

Criterion 5.6: Plans to reduce pollution and emissions, including greenhouse gases, are developed, implemented and monitored.

Findings: Compli- ance sta- The company has identification of source emission, polluting from entire activity, and the com- tus: pany has conduct identification for activity that produced emission and pollution dated 13 Yes March 2019. The company has mitigation program to reduce pollution and greenhouses gas- No sess emission year 2018 & 2019. The mitigation plan covered information i.e. goals, target N.A and time period to reduce emission and pollution. Example, realization mitigation ei: used shell (9,241.48 ton) and fibre (21,563.45 ton) for fuel 2018, monitoring emmision test, monitoring NCR No :

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used chemical, monitoring fuel usage and land aplication (184,335 m3) year 2018. The Company has conduct calculation of GHG emissions for 2018 using GHG Calculator version 3.0.1. The company has sent evidence monitoring of emission of pollutans came from estate and mill activity. The company has been conduct reporting of GHG calculation to RSPO. The company has been conduct GHG calculation in accordance with Palm GHG version 3.0.1. There is a monitoring system has been developed, with regular reporting on progress for these significant pollutants and emissions from estate and mill operations, using appropriate tools and record of monitoring plan can be seen on Monitoring plan year 2019. The result of GHG calculation describe in the section 5.4 above.

Criterion 6.1 : Aspects of plantation and mill management that have social impacts, including replanting are identified in a participatory way, and plans to mitigate the negative impacts and promote the positive ones are made, implemented and monitored, to demonstrate continual improvement Findings:

The company has documented Social Impact Assessment in 2011 by a team of quality safety and environment. SIA making process and the findings have documented and reported in the document SIA. Based on the photos and attendant lists available in the SIA report, it can be seen that the preparation of the social impact has involved community participation around the estate, such as community leaders and local village officials. The SIA has covered all the potential impacts of factors ,i.e : 1. Increased public education around 2. The gap qualified labor needs 3. Migration of people into wilayahdi around PT.BSP 4. Insufficient resources of agricultural land and plantation 5. Change livelihoods 6. Changes in income 7. Financial Institutions, both formal and non -formal, including banks and cooperatives 8. Social capital 9. Improved rural infrastructure (roads, transport, communications, reli-gious facilities, sports Compli- facilities, etc) ance sta- 10. Health tus: 11. Workplace safety Yes No There is an impact assessment involving the affected communities. The communities affected N.A are the landowners and the people residing in villages around the site of PT. BSP. There is information from the public and based on the SIA document, that participatory assessment car- NCR No : ried out by the method of Focus Group Discussion with affected communities.

The company has developed a social management plan that is implemented once a year based on stakeholder inputs on external public communication activities of Pondok Bungur Village and Subur Village for Serbangan Estate; Tanah Raja Estate from Dadi Mulyo Village and Ka-ranganyar Village, Sei Baleh Estate from Plantation Sei Baleh Village; Gurah Batu Es- tate from Parhutaan Silau Village and Taman Sari Village; Kuala Piasa Estate from Padang Sari Village, Tinggi Raja Village, Sum-ber Harpan Village, Terusan Tengah Village and Piasa Ungu Village. Vil-lage heads given a questionnaire to determine the impact of the compa-ny's presence on social, cultural, economic and health aspects. For the 2019 social management plan implemented in January 2019.

There is no cooperation with group of farmers in the company activities, but there are people who settled at the company site. The surrounding communities have been involved in the preparation of the SIA as a re-source of information. The main impact for the community is to increase employment

Criterion 6.2: There are open and transparent methods for communication and consultation between growers and/or millers, local communities and other affected or interested parties.

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Findings:

The company owns and maintains a list of local stakeholders (communities) around the company updated at 1 May 2019. The company has the SOP communication and consultation between the company and the local community and those affected by other interested namely SOP Communication Participation and Consultation Internal and External No. BMH-03, Rev 06, dated 13 June 2016.

The procedure aims to regulate the mechanism of communication, participation and consultation of the problems that occur and to ensure that any problems that exist are processed and followed up with corrective action or troubleshooting for continuous improvement. SOP established by considering the interests of local communities, where they can apply for assistance for the activities of micro enterprise development and socio-cultural activities. The SOP drafted in the Indonesian language that understood by the local community.

The procedure has been prepared by considering women's interests and public interests are Compli- marginal, without any discrimination. The company's CSR program is no discrimination of ance sta- gender, religion, race etc. The Company has appointed PIC Communications, i.e. HR and ar- tus: ea Head Division and staf i.e. Reza Husen Suregar (CSR Departement) Yusri Helmy name Yes Saros and Ismi Bebi Lestari Harahap (Industrial Relations and Legal). Job description of PIC No Communication are: N.A  Communicate with stakeholders  To coordinate with operating unit leaders and the regional coordinator of CSR NCR No :  Ensure a harmonious relationship with the community  To identify and anticipate every obstacle in CSR activities  Prepare and submit report.

The local community that has been interviewed aware of Company’s PICs for public consultations. Thereare stakeholder communication documents showed during surveilance i.e. letters from government stakeholder village, sub-district and district, stakeholder NGOs and stakeholders of the company partners/suppliers.

PT Bakrie Sumatera Plantation Tbk Unit Kisaran and Palm Oil Mill Kisaran key stakeholders are: outgrower, village government, Sub Distric government, Distric Goverment, NGO, local community, and farmers. The interview with the head of Pengarungan Village and officials of Subur Village, it known that the company had conducted RSPO socialization that included socialization of communications procedures, consultation with stakeholders. The village head understands the procedures of communication with the company.

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

Findings:

There is a mechanism for handling complaints and grievances of all parties affected, namely: SOP Participation and Consultation Communication Internal and External No. BMH-03, Rev 06, dated 13 June 2016. PT BSP has a policy of "Whistle Blowing Policy" that are specifically Compli- related to the mechanism for handling complaints and grievances of all parties affected, name- ance sta- ly: SOP Participation and Consultation Communication Internal and External No. BMH-03, Rev tus: 06. There is an explanation that the company will facilitate if complainants requested confiden- Yes tiality of his identity, without prejudice to the essence and the company's response to the com- No plaint. N.A

There PIC that is responsible for the complaint that the PR department by appointing PIC NCR No : Communication: HR Area Head Division and Staff HR Legal. The SOP system has disseminated to stakeholders. The system was conceived and running well.

Employees may submit complaints through superior and/or trough SPSI implementation mechanisms. If there is no agreement in the settlement of disputes will be resolved through

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bipartite meetings with the help of the union and if there is no agreement it will be resolved through the courts. Results of interviews with contractors, local village community leaders as the external sakeholders found that they understand the procedures to submit a complaint to the company. The Company has documented external stakeholder’s inputs hat submitted by letters. Worker’s as internal stakeholders that has been interviewed also understand how to express and/o submitted their thought regarding complaints, grievances and/or recommendations. Worker’s grievances/complaints input into a form of complaint receipt. Workers stated that company has response all of their complaint even it tooks sometimes to implements the problem solving as what worker’s expectation.

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

There is a procedure identifying the parties entitled to receive compensation Document No. RSP- 01 dated 11 April 2011, Revision 1. The procedures that guarantee the implementation of the identification of the parties entitled to receive compensation for damages crops, plants and buildings to obtain the concession for the company. Identification team formed jointly be- Compli- tween the company and government districts, village and community leaders. The mecha- ance sta- nisms can be accepted by the affected communities. PT BSP has a procedure identifying the tus: parties entitled to receive compensation. Related to the identification of the legal rights of the Yes community, namely SOP Land Acquisition and Land Permit, which aims to ensure that decisions, steps or actions in the process of acquiring land for the benefit of industrial oil palm No plantations is done properly, appropriately and in accordance with prevailing regulations and N.A meet the principles and criteria of the RSPO, HCVF and FPIC particularly for land-related interests of the community and communal land. NCR No :

In interviews with the local village head of it explained that there are no indigenous land or customary rights in the area of the company. Since the beginning of land acquisition for the construction of the estate, there is no customary land or customary rights in the area of the company.

Criterion 6.5: Pay and conditions for employees and for contract workers always meet at least legal or industry minimum standards and are sufficient to provide decent living wages. Findings:

All permanent workers term and conditions agreed and stated at Collective Labor Agreement that has been develop by Company and labor Union representatives, members of BKS PPS. Company and worker still refer to the Collective Labor Agreement 2015 – 2017 BKS-PPS. Compli- This is because of the new PKB is in the process. On the other hand, terms and conditions of ance sta- Daily Determined Contract Worker (PKWT) and Daily non-permanent worker (BHL) is stated tus: on each contract. Yes No The wages of workers of the Specific Time Work Agreement (PKWT) and Daily Workers (BHL) have not been in accordance with the Decree of the Governor of North Sumatra No. N.A 188.44 / 1573 / KPTS / 2018 concerning Minimum Wages of Asahan District year 2019 for palm oil plantation sector. This condition raised as Non-conformity (NCR RSPO 02523). NCR No : RSPO There is some non-conformity such as: 02523  Workers of the Specific Time Work Agreement (PKWT) and Daily Workers (BHL) have not been reported to the Manpower Agency of Asahan District (Kepmenaker- RSPO trans No. 100 of 2004). 02524  Based on interview with workers of the Specific Time Work Agreement (PKWT) at Sei Baleh POM provided information that the concerned person had worked since 2012 and 2014 but until the audit conduct the working relationship still Specific Time Work Agreement (PKWT) or had not been a Worker of Non-Specific Time Work Agreement (PKWTT) (Kepmenakertrans No 100 of 2004).

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 The company has not been able to show a policy regarding the provision of food and beverages at least equal to 1,400 calories for workers who work overtime for 3 (three) hours or more (Kepmenakertrans No. 102 of 2004).  There are daily workers (BHL) who work 21 consecutive days or more in 3 (three) months but the status has not been upgraded to become a worker of a Non-Specific Time Work Agreement (PKWTT) or a permanent employment relationship. For example, at Serbangan Estate i.e. harvester is 26 people, each working on January 25 days, February 23 days, March 25 days on 2019 on behalf Junaidi, Wagiarno, M. Airs Kurniawan, Ali Akbar, Indra Lesmana, MHD. Kurniawan, Suroto, Rudi Suhastra, M. Syafei, Budiman, Hadi Wahyudi, Suriyanto, Supriadi, M. Darmadi, Hepri Indra P, Gunandar, Andri, Surianto, Suriyanto, Ferri Irawan, Rahmad Hidayat, Irfan, Gunawan, M. Yunus T , Irwansyah Putra, Andi Syaputra This condition raised as Non-conformity (NCR RSPO 02524).

All employees have been provided with suitable housing, water supplies, medical care (clinic, including doctor, nurses and medicines and bed) and welfares by the compa-ny. Worker housing receive piped potable water which is tested regularly to ensure that it is safe for human use. The facility provided the huge water jar to store the rainfall for being used as drinking water. It is also tested regularly to ensure it is always safe for human consumption. All workers housing are also provided with free electricity. Meanwhile, there’s a new facility for employees, day care for their kids forfree. The parents are recommended to bring groceries and vegetable for their kids then it is cooked by the nanny in day care.

As a result of interviews with workers in housing, the source of water came from the bore wells made by the company. The source of electricity comes from the generator set provided by the company. For domestic waste or household waste, companies provide officers who transport household waste at least two or three times a week to be disposed of in a landfill.

Based on interviews and observations in the field, auditors assess the company has shown tangible efforts in helping workers get adequate and affordable food through the existence of employee cooperatives. The cooperative is located near the housing of SME employees and provides some basic daily necessities such as staple food, side dishes, various kitchen needs at quite affordable prices.Based on interview known that the workers have felt fulfilled with the infrastructure and facilities that have been provided.

Criterion 6.6: The employer respects the rights of all personnel to form and join trade unions of their choice and to bargain collectively. Where the right to freedom of association and collective bargaining are restricted under law, the employer facilitates parallel means of independent and free association and bargaining for all such personnel. Findings:

PT BSP has a firm policy in the Indonesian language that recognizes the rights of employees to freedom of association. This is contained in human rights policy dated January 16, 2019.The document is presented in an Indonesian format that is easily understood by all workers and is available at the audit site. Compli- ance sta- In PT BSP company there is union organization named “Federasi Serikat Pekerja Pertanian tus: dan Perkebunan Serikat Pekerja Seluruh Indonesia (FSP PP-SPSI)”. Workers Unions are as- Yes sociations of workers to negotiate with the company. The results of negotiations in the form of No work agreement (PKB) en-dorsed by the company and union workers. The work agreement (PKB) period 2015-2017. The agreement contains the rights, obligations and working condi- N.A tions, safety, welfare, leave, termination of employment, etc. Ratification PKB No.KEP 88/PHIJSK-PKKAD/ PKB/VI/2015 concerning the Registration Agreement BKS-PPS with the NCR No : PP. FSP.PP-SPSI pe-riod 2015 - 2017 by contested of Industrial Relations Labor and Social Security. The agreement refers to the Law No. 13 of 2003 on Labor and has been disseminated to the workers, it is evident that workers know the contents of the PKB. Board SPSI PT BSP period 2016 – 2021 was available.

PT BSP Kisaran has also established LKS Bipartite that consists Company’s Management

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Representatives and Labor Union Members Representatives. This institution has legally complied with workforce regulation as seen on evidence as follow: 1. District Asahan Workforce Agency Decree No. 325/2017 dated 17 October 2017, regarding the Appointment of Revised LKS Bipartite Or-ganization Structure of PT BSP Kisaran, 2016 – 2019. 2. Attached the new structure organization of LKS Bipartite that con-sists of Management and Labor Union representative.

Minutes of some meetings were checked and the meetings found to be properly conducted. On 10 January 2019, it has been already conducted meetings between FSP PP-SPSI and the company, discussion agenda was about renewal plan of PKB material and discussion of urgent issues in the work unit.

Criterion 6.7: Children are not employed or exploited

Findings:

The company has a commitment not to employ children, such as: 1. Sustainable Palm Oil Policy (dated 16 January 2019) article 16, in the recruitment of workers the company requires a minimum age of 18 years. 2. Memo HR Area Head No. 783/HRD/V/2011 dated 9 May 2011. There are rules about the minimum age of workers at PT. BSP ie at least 18 years. Compli- ance sta- The company is proofen complied with this policy. Soft Copy of PT BSP Permanent Worker, tus: April 2019. The youngest worker is Syahriadi, born in 31 December 1989, join date in 1 July Yes 2011 when he was 22 years old. No N.A List of Non-Permanent Daily Worker of Gurah Batu Estate, Kisaran POM, Serbangan Estate, Tanah Raja Estate, Sei Baleh Estate and Kuala Piasa Estate April 2019, consist information of NCR No : name, position, work location, birth date, join date and wage rate. The list is BHL Worker contract as re-quired by Indonesian Law, and has been signed by all workers. The youngest worker is Ali Akbar, born in December 27th 1996, join date in 1 April 2015 when he was 19 years old. Based on the verification results of documents of employees list in April 2019 in mind that no employees in the company were under 18 years of age at the time of admission to work.

Criterion 6.8: Any form of discrimination based on race, caste, national origin, religion, disability, gender, sexual orientation, union membership, political affiliation, or age, is prohibited. Findings:

The company has policies for no discrimination in employment, which is set in: 1. Human Rights Policy (January 16, 2019) article 4, we enforce all the people who worked at PT BSP fairly and without discrimination on differences in ideology, ethnicity, color skin, religion, gender, sexual orientation, national origin, age, disability or more status social. Compli- 2. Sustainable Palm Oil Policy (dated 16 January 2019) article 17, every worker has an equal ance sta- opportunity to obtain employment without discrimination and the right to equal treatment tus: without discrimination from employers. Yes 3. The procedure of selection acceptance of new employees Document No. BMH - 07 rev 01 dated 2 February 2013: every worker has an equal opportunity to obtain employment with- No out discrimination, applicants are required a minimum of 18 years of age. N.A

Based on interviews with workers in mind that workers and groups includ-ing local communi- NCR No : ties, women, there is no discrimi-nation in recruitment. Recruitment is open to anyone who has the ability, granting medical bene-fits applicable to all employees. Men and women have the same oppor-tunities in the process of recruitment, payroll, and benefits. Menstrual leave and childbirth / breastfeeding women given to employees regard-less of their race or religion race. Recruitment, promotion conducted by expertise, educational background suitability for certain positions as well as their employee performance assessment each year.

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Criterion 6.9 : There is no harassment or abuse in the work place, and reproductive right are protected Findings:

The company still hold and applied the sexual harassment policy that stated on policies bellow: 1. Human Rights Policy (dated 16 January 2019) article 1, we conduct business in a manner respecting the rights and dignity of all people in accordance with the legal requirements. 2. Oil SustainablePlam Policy (dated 16 January 2019): Section 5 "Preventing sexual harassment and violence". Compli- ance sta- These polices has documented, implemented, communicated, and disseminated to all female tus: worker through the socialization of women's rights and domestic violence on 4 March 2019. Yes There are mechanisms and clear rules for companies to handle / deal with issues such as / complaints received from labor. There is a Gender Committee as a means for workers to facili- No tate the fulfillment of basic rights of women. The leader of committee Gender: Suriana; Vice N.A Chairman: Dian Carolina Secretary: Erlina Effendi Lubis; Members: ISMI Bebi, Nurimah siregar, Restu, Sulfiah, Siti Aminah, Masdiana. Gender Committee activities are: (1) Socializa- NCR No : tion of women's rights, domestic violence in each division; (2) Receive a report of domestic violence. There is no report regarding specific gender issues and/or sexual harassment (and woman violation) recorded on Gender Committee Logbook.

Based on interviews with women workers in Kuala Piasa Estate, it known that the workers understand the reproductive leave entitlements, ie 2 days menstrual leave and maternity leave is three months.

Criterion 6.10: Growers and millers deal fairly and transparently with smallholders and other local businesses. Findings:

Document checked regarding Cmpany’s transaction with FFB suppliers/vendors found that PT Compli- BSP has deal with smallholders in transparently and fairly manner procedures. Evidences ance sta- showed that company has paid the FFB as refer to the FFB buying contracts, both for the tus: price calculation mechanism and the payments. Evidences showed during audit such as: (1) Yes Note of Meeting with FFB Vendors/Supplier dated 14 May 2018, discussing about transparen- No cy, win-win solution, improving meeting frequency. Complaints from vendors regarding deduc- N.A tion price according to shortage that still in a high level; (2) Payment Statement for FFB Sup- plier’s account of Darwin Tambuan dated 26 April 2019; (3) FFB Buying agreement with sup- NCR No : plier, No. 22/BSP/V/2018, with Suriadi on May 2018, consisting FFB Price mechanism and Quality shortage method.

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

Findings: Compli- Identification of community needs has carried out by PT BSP, as can be seen in the SIA re- ance sta- port. PT BSP annually carries out communication and consultation regarding the evaluation of tus: CSR implementation that has implemented, develops CSR program and monitors the imple- Yes mentation of social management with stakeholders around the estate and palm oil mill such as No Karang Anyer Village and Dadimulyo Village. PT BSP has contributed to regional development N.A in the field of infrastructure development, education, religious social assistance, health and natural disaster relief. Assistance in education is the provision of auxiliary fees elementary NCR No : school teachers in the villages around the company, educational scholarships for outstanding students, school football in the Bunut Sstate. Community Development Program, as seen on

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evidences as follow: Education, social health, religion, infrastructure and social philanthropy.

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

Findings:

The company has a palm oil sustainability policy issued on 16 January 2019. The company is committed to not doing forced labor and human trafficking. Based on document tracking and verification in proved that: (1) There is no evidence of the replacement of employment Compli- contracts of employees; (2) All workers have had a copy of the employment contract. ance status: PT Bakri Sumatera Plantation, committed to providing opportunities equal access to employ- Yes ment, through the following business: (a) The Company provides equal opportunities to workers to find employment and a decent income; (b) The company puts all workers in accordance No with the expertise, capabilities and other job requirements, and in accordance with operational N.A needs of employees. NCR No : Based on employee list, field observation and interview with workers, Labor Unions, and Man- power Agency known that there is no migrant workers, forced labor. Every worker has a work agreement that describe specific job description, there is no substitution of contract without prior consultation and agreement from the worker.

Criterion 6.13: Growers and millers respect human rights.

Findings:

PT BSP has had a policy on human rights, which have disseminated to all employees by the public relations department. The human rights policy was issued on 16 January 2019. The Compli- company is committed to respecting the rights of all stakeholders, avoiding violations of hu- ance sta- man rights and anti-discrimination. Information also posted on the information board at the PT. tus: BSP. There is sufficient evidence that never happened human rights violations in PT BSP dur- Yes ing year 2018 and 2019 (until date of audit). Human rights dissemination policy has carried out on 17 December 2018 (Estate and Mill). Human rights policies area also disseminated to con- No tractor. N.A

Based on interviews with workers known that the company has socialized company policies NCR No : regularly including policies on human rights. Socialization is done by sticking to the policy in offices, socializing in the housing and socialization to workers during the morning briefing before the activities started.

Criterion 7.1: A comprehensive and participatory independent social and environmental impact assessment is undertaken prior to establishing new plantings or operations, or expanding existing ones, and the results incorporated into planning, management and operations. Findings: Compli- ance sta- Based on interview result with management and field observation found that there are new tus: planting programs, a plant conversion programs from rubber to palm oil after November 2005. Yes The conversion areas were in Gurach Batu Estate and Tanah Raja Estate. No

The Existing Social and Environmental Impacts Assessment scope has covering all of con- N.A cession area, including the new planting as a conversion program from rubber plant at Gurach Batu and Tanah Raja Estate NCR No :

Criterion 7.2: Soil surveys and topographic information are used for site planning in the establishment of new plantings, and the results are incorporated into plans and operations.

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Findings: Compli- The company has a map of the land for Sei Baleh Estate, Serbangan Estate, Tanah Raja Es- ance sta- tate, Gurah Batu Estate; Kuala Piasa Estate shows mainly alluvial soil type. tus: Maps of soil types for all estates are available at the main office. The maps show that there Yes are no marginal soils within the estate area and most of the estate land consists of alluvial No soils and podsoils. N.A The company has work instructions for planting on slopes are documented and describes methods to reduce soil erosion on slopes with ‘tapak kuda’ (horseshoe) methods. NCR No :

Criterion 7.3: New plantings since November 2005, have not replaced primary forest or any area required to maintain or enhance one or more High Conservation Values. Findings:

There are areas which land cleared and planted after 2005 (2009, 2010, 2011, 2012 and 2018) located at all Serbangan, Sei Baleh, Gurach Batu and Tanah Raja Estate with details as mentioned below: Estate (Ha) No YoP Serbangan Sei Baleh G. Batu T. Raja 1. 2009 161 216 139 326 2. 2010 321 248 158 349 Compli- 3. 2011 75 77 83 132 ance sta- 4. 2012 26 3 - - tus: 5. 2018 - - - 106 Yes TOTAL 583 544 380 913 No GENERAL 2,420 N.A TOTAL NCR No : The company has documents: - Letter from General Manager of PT BSP Area Sumut 1 (Number: 78/GM- Sumut1/VIII/2018 dated August 6, 2018) to PT TUV Rheinland Indonesia regarding out of scope for the conversion areas on Kisaran POM audit scope with amount 2,420 Ha. - Commitment from Management for revised the HCV document (letter from QHSE Head to Coorporate Sustainability Coordinator Number: 17/QHSE/VIII/2018 dated August 6, 2018).

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

Compli- Findings: ance status: There is a map identifying marginal and fragile soils, including excessive gradients and peat Yes soils available and used to identify areas to be avoided. No

For the new plantings, the company has not limited planting on fragile and marginal soils, in- N.A cluding peat. NCR No :

Criterion 7.5: No new plantings are established on local people’s land where it can be demonstrated that there are legal, customary or user right, without their free, prior and informed consent. This is dealt with through a documented system that enables these and other stakeholders to express their views through their own representative institutions

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Compli- Findings: ance status: The conversion areas at Gurach Batu Estate and Tanah raja Estate are already inside PT st Yes BSP HGU Area, based on HGU Certificate, December 21 2006, Kabupaten Asahan, Keca- No matanKisaran Timur, Kelurahan Kisaran Timur and No. 02.07.72.01.00002. Pemegang PT Bakrie Sumatera Plantation; width area 10.556,01 Hectares. No new planting conversion are- N.A as were new land areas. All of the area has clean and clear status as PT BSP asset since before the HGU released. NCR No :

Criterion 7.6: Where it can be domenstrated that local peoples have legal, customary or user rights, they are compensated for any agreed land acquisitions and relinquishment or rights, subject to their free, prior and informed consent and negotiated agreements Findings: Compli- ance sta- The conversion areas at Gurach Batu Estate and Tanah raja Estate are already inside PT tus: BSP HGU Area, based on HGU Certificate, December 21st 2006, Kabupaten Asahan, Keca- Yes matan Kisaran Timur, Kelurahan Kisaran Timur and No. 02.07.72.01.00002. Pemegang PT No Bakrie Sumatera Plantation; width area 10.556,01 Hectares. No new planting conversion are- N.A as were new land areas. All of the area has clean and clear status as PT BSP asset since before the HGU released. NCR No :

Criterion 7.7: No use of fire in the preparation of new plantings otherthan in specific situations, as identified in the ASEAN guidelines or other regional best practice Compli- ance sta- Findings: tus: Yes The company has established a zero burning policy signed by top management and not used No fire for preparing land for replanting so assessment document not available. There is evidence N.A that during field visit that there is no fire using for replanting or any other purposes. NCR No :

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

As stated on criterion 5.6, the company has identification of source emission and polluting from entire activity. The company has conduct identification for activity that produced emission and pollution. The company has mitigation program to reduce pollution and greenhouses gas- Compli- sess emission. The mitigation plan covered information i.e. goals, target and time period to re- ance sta- duce emission and pollution. tus: Yes The Company has conduct calculation of GHG emissions for 2018 using GHG Calculator ver- No sion 3.0.1. The company has sent evidence monitoring of emission of pollutans came from es- N.A tate and mill activity. The company has been conduct reporting of GHG calculation to RSPO. The company has been conduct GHG calculation in accordance with Palm GHG version 3.0.1. NCR No :

There is a monitoring system has been develped, with regular reporting on progress for these significant pollutants and emissions from estate and mill operations, using appropriate tools and record od monitoring plan can be seen on Monitoring plan year 2018.

Criterion 8.1: Growers and millers regularly monitor and review their activities and develop and implement action plans that allow demonstrable continuous improvement in key operations.

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Findings:

Action plans for continual improvement are implements and on-going as found below and described further in the respective criterion, example : Compli- The Company has an internal audit for the evaluation and improvement of the best practice ance sta- activities in the field ac-cordance to the company procedure and/or work instructions. tus: Yes Company also has effort to keep the soil erosion through the cover crop implementation to No minimize the runoff. N.A For environmental management the company already done reported the environmental management and monitoring implementation to the related official government every six month pe- NCR No : riodically. The report showed the result of meas-urement of environmental parameters, such as water sur-face quality, land application measurement, air pollution and ambient, waste water/POME measurement. Based on certificate result of measurement all of parameters still under below standard.

The following is a summary of findings made for the criteria listed in the RSPO Supply Chain Certification 2014 (Revision June 2017) with selected supply chain model Mass Balance (MB).

2. RSPO SCCS

1. General requirement

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

Findings:

PT. Bakrie Sumatera Plantation palm oil mill as processor of FFB become palm oil and palm Compli- kernel is the entitity that has legal ownership and physically handles RSPO Certified Sustain- ance sta- able oil palm products at a location Batubara District under the control of the organization in- tus: cluding outsourced contractors. Yes No The company receive FFB from several sources i.e. company’s certified estate i.e. Serbangan estate, Gurach Batu estate, Tanah Raja estate, Sei Baleh estate, and Kuala Piasa estate and N.A non certified suppliers, i.e: Company under owned group: Seed Garden. NCR No : The company as opreation site (or parent company) is RSPO membe since May 2017 with membership number 1-0036-07-000-00.

5.2 Supply chain model

Compli- ance sta- Findings: tus: Yes Following the nature of company’s incoming material (FFB) where the status of FFB consist of No RSPO certified and non RSPO certified, the company decided to implement Mass Balance supply chain model. N.A

NCR No :

5.3 Documented procedures

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Findings:

The mill have a set procedures and/or work instructions or equivalent to ensure the implementation of all elements of the applicable supply chain model specified. The documents available cosist of:

 Procedure of RSPO e-Trace, document no. BMO-19, revision 2 issued dated July 17, 2017  Procedure of FFB incoming, BMO-03, Rev.08 issued date September 27, 2017. The procedure explained about the receiving of certified and uncertified FFB.  Procedure of Certified Palm Oil & Plam Kernel Delivery, with document number BMO- 05, Rev.09, issued date January 22, 2019.  Procedure of FFB processing process with document number BMO-02 Rev.07, issued date January 22, 2019.  Procedure of non-conformity, corrective action and preventive action with document number BMA-07 Rev.04, issued date July 29, 2016.  Procedure of competence, training and awareness action with document number BMH-07 Rev.05, issued date May 23, 2018.  Procedure of record control with document number BMA-04 Rev.04, issued date July 25, 2016.  Procedure of document control with document number BMA-03 Rev.05, issued date July 25, 2016. Compli-  Procedure of internal audit with document number BMA-05 Rev.05, issued date July ance sta- 14, 2016. tus: Yes The documents has been updated regularly following the changes of mill operation condition. No The records of implementation such kind document are keep maintained and updated. N.A The mill manager is person who having overall responsibility for and authority over the implementation of these requirements and compliance with all applicable requirements. The re- NCR No : sponsibility for and authority has stated on the mill manager’s job description (form no. BMH- FR-10, Rev.0) included description of responsibility and authority such as understand and implemented SCCS within the organization (stated on point 8).

As observed during audit, the management representative has able to demonstrate awareness of the organization’s procedures for the implementation of this standard.

The company have procedure for internal audit, i.e. Procedure of internal audit with document number BMA-05 Rev.05, issued date July 14, 2016. The internal auditor is conducted regularly every once a year as seen on the internal audit program Form No: BMA-FR-13. The last internal audit was conducted on 6 July 2018. The internal auditor team consist of Andi Wahyudin, Adni Said, M. Ikhsan, Irwin Syarif, Bhudi Iskandar, Suardi, Mega Khairani Nasution, Adrianto, Sukidi, Suryana, Tatar Situmorang, M. Fikri, Sepriadi Fauzan and Ahmadsyah Silalahi. The result of internal audit have recorded on request of corrective action and preventive (Form BMA-FR-15 revision 02). The mill have appropriate correction/corrective action to eliminate the cause of non conformity. To ensure that the RSPO SCCS system in the mill conforms to the requirements in the RSPO Supply Chain Certification Standard and the RSPO Market Communications and Claims Documents and effectively implements and maintains the standard requirements within its organization. The outcomes of the internal audits and all actions taken to correct nonconformities have subject to management review (further detail on 5.13). The mill have maintain the internal audit records and reports properly.

5.4 Purchasing and goods in

Findings: Compli- ance sta- As mentioned on the table 2 above, the company received FFB from several sources. There is tus: internal sourcers and external sources. The internal sources from company’s owned estate Yes

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Page 51 of 207 i.e. Tanah Raja estate, Gurach Batu estate, Kuala Piasa estate, Serbangan estate and Sei No Baleh estate. Incoming FFB will acompanied by relevant document i.e. FFB slip delivery. In- N.A formation stated on the documents such as:  The name and address of the mil; NCR No :  The name and address of the estate;  The delivery date;  The date on which the documents were issued;  A description of the FFB,  The quantity of the FFB delivered;  Any related transport documentation;  Supply Chain certificate number of the estate;  A unique identification number

While for external sources FFB will accompanied by relevant document such as:  The name and address of the mill;  The name and address of the estate;  The delivery date;  The date on which the documents were issued;  A description of the FFB,  The quantity of the FFB delivered;  Any related transport documentation;  Supply Chain certificate number of the estate;  A unique identification number

The information have been complete and can be on delivery notes, shipping documents and specification documentation).

The company has mechanism to check of the validity of the Supply Chain Certification of suppliers. This is done regularly once a year through the RSPO IT Platform. The last checking was on January 2019 as record on internal memo document by confirmation of (shipping) announcements.

The mill also conduct checking of validity of license for traders and distributors shall also be checked via the RSPO website at least annually or through the RSPO IT platform by confirmation of shipping announcements/announcements last checking was on January 2019 as seen on list of buyer.

The mill has procedure for handling non-conforming oil palm products and/or documents, i.e. Procedure of nonconformity, corrective action and preventive action with document No. BMA- 07, revision 4, dated July 29, 2016. The implementtaion of non conromity document as seen on form with document No. BMA-FR-15 (corrective and preventive action requisition) and form no. BMA-FR-16 (report of monitoring of corrective and preventive action requisition).

5.5 Outsourcing activities (If applicable)

Findings: Compli- ance sta- There is outsourcing activities in PT. BSP Kisaran i.e. transportation. The company has not tus: been able to demonstrate that a third party (contractor) for CPO and PK transport activities Yes has fulfilled the RSPO SCCS standard requirements. This condition raised as Non- No conformity (NCR RSPO 02502). N.A The company has an agreement between the contractor such as:  An agreement between PT BSP with PT Karya Pratama Niagajaya with No.012/BSP- NCR CP/BSP-KPNJ/III/2018 dated 26 March 2018. The scope of activity is transporting of RSPO Crude Palm Oil (CPO) and Palm Kernel (PK) from mill 02502  An agreement between PT BSP with CV Pelita Jaya with No.014/BSP-CP/BSP-

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KPNJ/III/2018 dated 26 March 2018. The scope of activity is transporting of Crude Palm NCR Oil (CPO) and Palm Kernel (PK) from mil RSPO 02503 Based on the verification of the cooperation contract document between the company and the third party (contractor) CPO and PK transport there has been no statement that the certification body has access to the contractor or operational if an audit is required. This condition raised as Non-conformity (NCR RSPO 02503).

The company has the name and contact details of all contractors used. The site shall at its next audit inform its CB of the names and contact details of any new contractor used for the processing or physical handling of RSPO certified oil palm products.

5.6 Sales and goods out

Findings:

As mentioned on the table 3 above, the company sold certified product to several buyer. In the period 3 June 2018 to 28 April 2019 with total CSPO is 3,000.00 Mt and total CSPK is 600.00 mt has been sold to PT. Multimas Nabati Asahan and PT Musim Mas Belawan.

The following information for CSPO/CSPK products is made available in document form:  The name and address of the buyer;  The name and address of the seller; Compli-  The loading or shipment / delivery date; ance sta-  The date on which the documents were issued; tus:  A description of the product, including the applicable supply chain model (Identity Yes Preserved, Segregated or Mass Balance or the approved abbreviations); No  The quantity of the products delivered;  Any related transport documentation; N.A  Supply chain certificate number of the seller;  A unique identification number. NCR No :

The information has been provide completed on the document for example, delivery notes, shipping documents and specification documentation).

The mill has make shiping anouncment for every sites that are required to announce and confirm trades in the RSPO IT platform. This shall include making Shipping Announcements / An- nouncements and Confirmations on the RSPO IT platform per shipment or group of ship- ments. Detail information in clause 5.7 below.

5.7 Registration of transactions

Findings:

Kisaran Palm Oil Mill registered in RSPO IT Platform, with registered number Compli- RSPO_PO1000000184. The mill has established a specific SOP for registration of every ance sta- transaction to RSPO palm Trace as required by the RSPO-SCC standard. tus: Yes The mill has registered all certified product transaction in RSPO Palm trace. Within the last No audit periode 3 June 2018 to 28 April 2019. The mill has sold certified product with total CSPO is 3,000.00 Mt and total CSPK is 600.00 mt that has been sold both through palm trace. N.A

The summary of eTrace transactions is stated in the below: NCR No :

No Seller Buyer Total (MT) Product

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1 PT Bakrie Sumatera PT Musim Mas 500.00 CSPO Plantation Tbk Unit Belawan SUMUT I Kisaran 2 PT Bakrie Sumatera PT Multimas Nabati 2,500.00 CSPO Plantation Tbk Unit Asahan SUMUT I Kisaran 3 PT Bakrie Sumatera PT Multimas Nabati 600.00 CSPK Plantation Tbk Unit Asahan SUMUT I Kisaran

The sample of e-Trace transaction are: 1. Transaction TR-53f31509-2cf9 a. Seller : PT Bakrie Sumatera Plantation Tbk Unit SUMUT I Kisaran b. Buyer : PT Musim Mas Belawan c. Seller Contract Number : - d. Product : CSPO e. Program : Mass Balance f. Volume : 250.00 MT g. Ship name : N/A h. B/L date : 29/04/2019

2. Transaction ID : TR-4a5cbdc3-6947 a. Seller : PT Bakrie Sumatera Plantation Tbk Unit SUMUT I Kisaran b. Buyer : PT Multimas Nabati Asahan c. Seller Contract Number : - d. Product : CSPO e. Program : Mass Balance f. Volume : 250.00 MT g. Ship name : N/A h. B/L date : 29/04/2019

3. Transaction ID : TR-7a5ea989-8a06 a. Seller : PT Bakrie Sumatera Plantation Tbk Unit SUMUT I Kisaran b. Buyer : PT Multimas Nabati Asahan c. Seller Contract Number : - d. Product : CSPK e. Program : Mass Balance f. Volume : 150.00 MT g. Ship name : N/A h. B/L date : 24/04/2019

The total volume of certified CPO/CSPK sold has been tracking back to the company’s production data.

The company also have not sold RSPO certified RSPO certified volumes other scheme or as conventional (or in case of underproduction, loss or damage).

5.8 Training

Findings: Compli- ance sta- The company has not been able to demonstrate training plan related to the RSPO SCCS in tus: 2018 and 2019. This condition raised as Non-conformity (NCR RSPO 02504). Yes No The company has not been able to show evidence that the officers responsible for implement- N.A

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Page 54 of 207 ing RSPO SCCS have received RSPO SCCS training. This condition raised as Non- conformity (NCR RSPO 02505). NCR RSPO 02504

NCR RSPO 02505

5.9 Record keeping

Findings:

The mill have establish procedure for maintain accurate, complete, up-to-date and accessible records and reports covering all aspects of these RSPO Supply Chain Certification Standard requirements as stated on document Procedure of record control with document number BMA- 04 Rev.04, issued date July 25, 2016 Compli- As stated on control of records procedure the retention times for all records and reports must ance sta- be kept a minimum of two (2) years and must comply with legal and regulatory requirements tus: and be able to confirm the certified status of raw materials or products held in stock. Yes No The mill is able to provide the estimate volume of palm oil / palm kernel oil content (separate N.A categories) in the RSPO certified oil palm product and keep an up to date record of the volume purchased (input) and claimed (output) over a period of twelve (12) months as seen on material balance document period year 2018: NCR No : Total incoming FFB in year 2018 is 199,132.616 mt Total FFB procesed in year 2018 is 199,023.176 mt Total CSPO/CSPK produce in year 2018 is 22,269.942 mt CSPO and 4,310.982 mt CSPK The FFB stock in year 2018 is 109.44 mt Total CSPO/CSPK sold in year 2018 to 2019 (until April) is 3,000.00 mt CSPO and 600.00 mt CSPK with claim Mass Balance (MB)

5.10 Conversion factors

Compli- Findings: ance status: The mill have mechanicm to calculate conversion factor. The mill using Conversion factor fol- Yes lowing the guidance as provided by RSPO to provide a reliable estimate for the amount of cer- No tified output available from the associated inputs. The OER/KER have been checked periodically to ensure accurancy againts actual performace or industry average as appropriate. The N.A last updated was on 30 April 2019 is OER: 23.36% and KER 4.39%. NCR No :

5.11 Claims

Compli- ance status: Findings: Yes No Based on document and field verification, the company uses the RSPO logo which is contrary to the RSPO Rules on Market Communications and Claims. This condition raised as Non- N.A conformity (NCR RSPO 02506). NCR RSPO 02506

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5.12 Complaints

Compli- ance sta- Findings: tus: Yes The organization has established and maintain document-ed procedures for collecting and re- No solving stakeholder complaints i.e: procedure of “Penanganan Keluhan” document no. BMH- 07, Rev.0, dated June 13, 2016. There is no incoming complaint regarding CSPO/CSPK prod- N.A uct. NCR No :

5.13 Management review

Findings:

The company has established management review procedure i.e. procedure of “Tinjauan Ma- najemen”, document no. BMA-06, revision 07, dated March 14, 2016. Management review was planned 1 (one) time a year at minimum. The management review conduct on 16 July 2018. Compli- ance sta- The input to management review include information on: tus:  Results of internal audits covering RSPO Supply Chain Certification Standard Yes  Customer feedback No  Status of preventive and corrective actions N.A  Follow-up actions from management reviews  Changes that could affect the management system NCR No :  Recommendations for improvement

The output from the management review has include any decisions and actions related to:  Improvement of the effectiveness of the management system and its processes  Resource needs.

6. Supply chain models – modular requirements Module E – CPO Mills: Mass Balance

E.1 Definition

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

E.2 Explanation

Findings: Compli- ance sta- From the table 3 above, the estimated tonnage of CPO and PK products that could potentially tus:

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Page 56 of 207 be produced from all incoming certified FFB in license periode 2019 is 23,022.56 mt CPO and Yes 4,230.64 mt PK. No N.A The estimated tonnage of CPO and PK products will be recorded in the RSPO IT platform. This figure represents the total volume of certified oil palm product (CPO and PK) that the cer- NCR No : tified mill is allowed to deliver in a year 2019 is 23,022.56 mt CPO and 4,230.64 mt PK.

The mill have meet all registration and reporting requirements for the appropriate supply chain through the RSPO supply chain managing organization (RSPO IT platform) as stated on section 5.7 above.

E.3 Documented procedures

Findings:

The mill have a set procedures and/or work instructions or equivalent to ensure the implementation of all elements of the applicable supply chain model specified. As stated on section 5.3 Compli- above as weel as the person having overall responsibility for and authority over the implemen- ance sta- tation of these requirements and compliance with all applicable requirements. tus: Yes The mill have documented procedures for receiving and processing certified FFBs i.e.: No  Procedure of FFB incoming, BMO-03, Rev.08 issued date September 27, 2017. The N.A procedure explained about the receiving of certified and uncertified FFB.  Procedure of Certified Palm Oil & Plam Kernel Delivery, with document number BMO- NCR No : 05, Rev.09, issued date January 22, 2019.  Procedure of FFB processing process with document number BMO-02 Rev.07, issued date January 22, 2019.

E.4 Purchasing and goods in

Findings:

The mill have mechanism to verify and document the tonnage and sources of certified FFBs received i.e. document name Procedure of FFB incoming, BMO-03, Rev.08 issued date Sep- tember 27, 2017 to know the quantity or volume of incoming certified material, the FFB truck will stop at the weighbridge and the operator will check relevant documents and issue a Compli- weighbridge ticket. The document to be verified from certified sources include delivery note ance sta- stamped at the origin estate, as well as certificate code including selected SCC Model. tus: Yes All certified FFB will be transferred to assign loading ramp. The operator will indicate information regarding storage location on each weighbridge ticket according to the relevant claim. No N.A The company has not been able to show the correct mass balance document related to the receipt of certified and uncertified FFB where there are uncertified FFB (Aek Selabat estate NCR and PT BSP Kisaran) claimed to be certified FFB. This condition raised as Non-conformity RSPO (NCR RSPO 02507). 02507

The mill have established mechanism to inform CB immediately if there is projected overpro- duction of certified tonnage stated on Procedure of RSPO e-Trace, document no. BMO-19, revision 2 issued dated July 17, 2017.

E.5 Record Keeping

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Findings:

The mill have/have not record and balance all receipts of RSPO certified FFB and deliveries of RSPO certified CPO and PK on a real-time basis. Example as seen on material balance document, i.e. period July 2018 to April 2019: Total incoming FFB in year 2018 is 199,132.616 mt Compli- Total FFB procesed in year 2018 is 199,023.176 mt ance sta- Total CSPO/CSPK produce in year 2018 is 22,269.942 mt CSPO and 4,310.982 mt CSPK tus: The FFB stock in year 2018 is 109.44 mt Yes Total CSPO/CSPK sold in year 2018 to 2019 (until April) is 3,000.00 mt CSPO and 600.00 mt No CSPK with claim Mass Balance (MB) N.A

Within three months periode e.g from October to December 2018, the mill have deliver Mass NCR Balance sales from a positive stock. The mill have not sell short. RSPO

02508 The company has not been able to show the correct mass balance document related to the

receipt of certified and uncertified FFB where there are uncertified FFB (Aek Selabat estate and PT BSP Kisaran) claimed to be certified FFB. This condition raised as Non-conformity (NCR RSPO 02508).

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

Chapter is applicable by client : ☐ Yes ☒ No

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

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

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

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

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

6.3. Compliance to Book & Claim requirement:

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

If not, please delete appendix 8

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7.0 Status of Previously Identified Non-Conformities

Status of Evidence Observed in order correc- Verification of correction/corrective action Auditor Ref NCR No. NCR tion/corrective action on previous audit taken on current audit Conclusion

6.5.1 Major RSPO There are still found workers / janitors / upkeep envi- Verification result: Closed 01994 ronment and buildings (employee cooperative workers - third parties) get wages below the applicable During the audit, there are no sub-contracted minimum wage. workers. The company has required contractors to pay their workers' wages in accordance with The company has submitted the following documents: applicable regulations. - List of Payments for Upkeep Employee Wages for the period January - June 2018. - Document for receipt of wages payment

7.3.1 Major RSPO There is not enough evidence for the new develop- Verification result: Closed 01995 ment areas / conversion (after November 2005) not carried out in primary forests and / or areas that have There are areas which land cleared and planted high conservation value (HCV). after 2005 (2009, 2010, 2011, 2012 and 2018) located at all Serbangan, Sei Baleh, Gurach The company has submitted the following documents: Batu and Tanah Raja Estate with details as - Letter from General Manager of PT BSP Area mentioned below: Sumut 1 (Number: 78/GM-Sumut1/VIII/2018 Estate (Ha) dated August 6, 2018) to PT TUV Rheinland In- N Serb YoP Sei G. T. donesia regarding out of scope for the conver- o an- Baleh Batu Raja sion areas on Kisaran POM audit scope. gan - Commitment from Management for revised the 1 2009 161 216 139 326 HCV document (letter from QHSE Head to . Coorporate Sustainability Coordinator Number: 2 2010 321 248 158 349 17/QHSE/VIII/2018 dated August 6, 2018). . 3 2011 75 77 83 132 . 4 2012 26 3 - - . 5 2018 - - - 106 .

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Status of Evidence Observed in order correc- Verification of correction/corrective action Auditor Ref NCR No. NCR tion/corrective action on previous audit taken on current audit Conclusion

TOTAL 583 544 380 913 GRAND 2,420 TOTAL

The company has documents: - Letter from General Manager of PT BSP Area Sumut 1 (Number: 78/GM- Sumut1/VIII/2018 dated August 6, 2018) to PT TUV Rheinland Indonesia regarding out of scope for the conversion areas on Kis- aran POM audit scope with amount 2,420 Ha. - Commitment from Management for revised the HCV document (letter from QHSE Head to Coorporate Sustainability Coordinator Number: 17/QHSE/VIII/2018 dated August 6, 2018).

7.3.2 Major RSPO There are activities to convert from Rubber to Oil Verification result: Closed 01996 Palm (after November 2005) carried out by the company (for example: in Gurach Batu and Tanah Raja There are areas which land cleared and planted Estate). However, there is not enough evidence of a after 2005 (2009, 2010, 2011, 2012 and 2018) comprehensive HCV identification report before the located at all Serbangan, Sei Baleh, Gurach activity is carried out. Batu and Tanah Raja Estate with details as mentioned below: Estate (Ha) The company has submitted the following documents: N Serb YoP Sei G. T. - Letter from General Manager of PT BSP Area o an- Baleh Batu Raja Sumut 1 (Number: 78/GM-Sumut1/VIII/2018 gan dated August 6, 2018) to PT TUV Rheinland In- 1 2009 161 216 139 326 donesia regarding out of scope for the conver- . sion areas on Kisaran POM audit scope. 2 2010 321 248 158 349 - Commitment from Management for revised the . HCV document (letter from QHSE Head to 3 2011 75 77 83 132 QMF: RSPO-007a-18(Rev.4.April 2019) RSPO Surveillance Assessment] Report PT Bakrie Sumatera Plantation – Kisaran Palm Oil Mill –

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Status of Evidence Observed in order correc- Verification of correction/corrective action Auditor Ref NCR No. NCR tion/corrective action on previous audit taken on current audit Conclusion

Coorporate Sustainability Coordinator Number: . 17/QHSE/VIII/2018 dated August 6, 2018). 4 2012 26 3 - - . 5 2018 - - - 106 . TOTAL 583 544 380 913 GRAND 2,420 TOTAL

7.3.4 Major RSPO There is no action plan that must be developed by Verification result: Closed 01997 the company in accordance with the HCV analysis of the conversion areas There are areas which land cleared and planted after 2005 (2009, 2010, 2011, 2012 and 2018) located at all Serbangan, Sei Baleh, Gurach The company has submitted the following documents: Batu and Tanah Raja Estate with details as - Letter from General Manager of PT BSP Area mentioned below: Sumut 1 (Number: 78/GM-Sumut1/VIII/2018 Estate (Ha) dated August 6, 2018) to PT TUV Rheinland In- N Serb YoP Sei G. T. donesia regarding out of scope for the conver- o an- Baleh Batu Raja sion areas on Kisaran POM audit scope. gan QMF: RSPO-007a-18(Rev.4.April 2019) RSPO Surveillance Assessment] Report PT Bakrie Sumatera Plantation – Kisaran Palm Oil Mill –

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Status of Evidence Observed in order correc- Verification of correction/corrective action Auditor Ref NCR No. NCR tion/corrective action on previous audit taken on current audit Conclusion

- Commitment from Management for revised the 1 2009 161 216 139 326 HCV document (letter from QHSE Head to . Coorporate Sustainability Coordinator Number: 2 2010 321 248 158 349 17/QHSE/VIII/2018 dated August 6, 2018). . 3 2011 75 77 83 132 . 4 2012 26 3 - - . 5 2018 - - - 106 . TOTAL 583 544 380 913 GRAND 2,420 TOTAL

SCCS 5.3 Major RSPO The Internal Audit that was held on October 10, Verification result: Closed 01998 2017. However did not include SCCS. The company has conduct internal audit on 6 July 2018. Based on document verification on The company has submitted the following documents: form of internal audit checklist (BMA-FR-12) - Report of Internal Audit SCCS, conducted on seen that the audit checklist hos covering QMF: RSPO-007a-18(Rev.4.April 2019) RSPO Surveillance Assessment] Report PT Bakrie Sumatera Plantation – Kisaran Palm Oil Mill –

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Status of Evidence Observed in order correc- Verification of correction/corrective action Auditor Ref NCR No. NCR tion/corrective action on previous audit taken on current audit Conclusion

July 6, 2018. SCCS. - Attendance list of participants.

SCCS 5.4 Major RSPO There is some deficiency in the procedure then raise Verification result: Closed 01999 as a nonconformity as state below. - Flow Chart of Analysis of Data Supplier evalua- The company has provide evidence such as: tion (BMP FC-02, Rev. 05, dated 31 January  Procedure of selection and evaluation of 2011) has not explain a mechanism for chect the 3rd party FFB supplier (BMP-06 revision validity of supplier, such as metode, frequency, 00). The procedure has explaine that an and etc. evaluation of FFB supplier conduct eve- - There is no evidence of checking third party FFB ry 6 (six) month. An evaluation conduct supplier. by assess related criteria with category very good (A), good (B), adequate (C) and not good (D) The company has submitted the following documents:  Result of selection/evaluation 3rd party - SOP Third Party FFB Supplier Selection and FFB supplier (Form No BMP-FR-07 re- Evaluation Revision (dated July 21, 2108) vision 00. The evaluation conduct on 29 - Document for receipt of distribution. December 2018 - Result of evaluating of FFB suppliers i.e on behalf Indra Saputra, Darwin Tambunan, Mariono, Mesman and Awaludin Simbolon.

SCCS Major RSPO There is records of latest management review that Verification result: Closed 5.13 02000 has performed on February 06, 2018 such as minute meeting, attendance list and etc. However, the man- The company has provide evidence such as: agement review meeting has no cover SCCS mat-  Minutes of Management Review Meet- ters. ing year 2018 conduct on 22 February 2019. The Management Review Meet- The company has submitted the following documents: ing year 2018 has covering all aspect - Minutes Meeting of management review for that required by SCC standard SCCS issues conducted on July 16, 2018.  Documentation of management review - Attendance list of participants. meeting such as photo documentanta- tion and attendant list of participan

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

A total of 25 non-conformances were identified during the surveillance assessment. These consisted of 20 major non-conformities and 5 minor non-conformities. For the major non-conformances, the company has taken the necessary corrective action to close these non-conformances within 90 days from completion of the assessment time (closing meeting) as well as checks of documents submitted by the company. For the minor non-conformances, the company has taken corrective action against these as well, and for those which could not be verified as closed through document checks, the closure of these minor non-conformities will be assessed during the next surveillance audit. A summary of all identified non-conformances, corrective actions taken and auditor conclusions is as explained below:

8. 1. Major non-conformities

Auditee Response Date of clo- Evidence Observed / NCR Verification of Corre sure Ref NCR No. raised Correction Corrective Action tion/Corrective action Auditor/ Conclution RSPO RSPO Found a basic error to process  Revision of PT Ensure that all SCCS The company has sent improvement 30/07/2019 Certi- 02500 the implementation of the plan Time Bound Plan RSPO programs are evidence such as: fica- that has been prepared with (TBP) documents. implemented in the  Revision of timeboundplan for Closed tion the following evidence: BSP Group by at- BSP Group by: 1. 2019 that has been sign by Sys-  Based on a timebound taching supporting Submitting periodic in- President Director on 12 Julty tem plan dated 19 September documents: a) formation to the Board 2019 for P& of Directors on RSPO C 2017 that PT BPP and Written statement  Work program of RSPO certifi- performance 2. Strict 4.5.3 PT CCI planned the of the cause of the cation PT Bakrie Sumatera RSPO certification in late implementa- and periodic monitor- Plantation Tbk (BSP group) 2018 but IC audit was not tion of RSPO BSP ing of the progress from 2019 to 2022 that has done at the time of the Group certification made by RSPO certi- been sign by President Director partial certification audit b) BSP Group cer- fication in all BSP on 12 Julty 2019  Based on the self as- tification work plan Group business areas  Answers to RSPO audit findings sessment document year (including infor- for uncertified unit 2019 submitted did not mation on the pro- show that PT GLP, PT gress of work that MIB and PT SNP could has been done in be implemented by IC in the context of ful- 2019 filling Time Bound  The timebound plan has Plan)

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Auditee Response Date of clo- Evidence Observed / NCR Verification of Corre sure Ref NCR No. raised Correction Corrective Action tion/Corrective action Auditor/ Conclution not been attached to the  Reporting on the uncertified area in PT revised Time BSP Kisaran Bound Plan (TBP) and supporting documents to the Certification Body (TUV Rheinland) RSPO RSPO  PT BPP: (a) Due to the Create and or com- 1. Ensure that all The company has sent improvement Certi- 02501 planting year> Nov 2005 plete the required RSPO SCCS docu- evidence i.e. self assessment for all fica- and> 2010, LUCA docu- documents as a con- ment requirements uncertified unit tion ments and the processes dition for RSPO certi- are met and updated Sys- for obtaining approval and fication in the BSP regularly. 2. Ensure tem NPP documents have not Group Unit. : 1. HCV that all copies of doc- for P& and SIA documents uments related to C been shown. (b) HCV Re- (including the results BSP Group Sustaina- 4.5.4 ports have not been able to be shown the results of of its peer review) 2. bility are kept and up- peer review. SOP for environmen- dated at the Corpo-  PT GLP: Not yet available tal and social man- rate level. peer review results for agement, 3. RSPO HCV documents and Self Assessment 4. 17/09/2019 LUCA documents and no HGU / IUP 5. Hectare hectare statement has yet statement 6. Amdal 7. Closed been shown Data on land conflict  PT SNP: not yet able to resolution 8. Compen- show the attendance list of sation data land 9. public consultations at the BPJS 10. Wage data time of the HCV assess- above UMP ment and the results of its peer review  PT BSP Kisaran: self assessment results cannot yet be shown for areas that are not yet certified  Not yet conducted an HCV QMF: RSPO-007a-18(Rev.4.April 2019) RSPO Surveillance Assessment] Report PT Bakrie Sumatera Plantation – Kisaran Palm Oil Mill –

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Auditee Response Date of clo- Evidence Observed / NCR Verification of Corre sure Ref NCR No. raised Correction Corrective Action tion/Corrective action Auditor/ Conclution assessment for PT CCI and PT MIB  Based on the RaCP tracker that there are 2 MUs who have submitted their LUCA but the LUCA document has not been shown yet and the communication process document is to obtain approval from the RSPO  Information and / or documents related to the settlement process and agreed settlement process have not been shown yet for the land dispute case as follows: (a) PT BPP: disputed with the Sikabau community, Koto Balingka Sub District, West Pasa- man District related to the canal land F13 (plasma land) as large as 300 ha . (b) PTGLP: house burning and killing of plasma farmers (Resman Sianipar) was triggered by a disputed plasma area as large as 2,800 ha (c) PT SNP: disputed with residents of Arang-Arang Village, Jumpeh Ulu Sub District, Muaro Jambi District relat-

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Auditee Response Date of clo- Evidence Observed / NCR Verification of Corre sure Ref NCR No. raised Correction Corrective Action tion/Corrective action Auditor/ Conclution ed to land owned by transmigration residents covering 1,170 ha controlled by the company  PT BPP, PT GLP, PT SNP, PT CCI & PT MIB: (a) Not yet able to show the list of recipients of compensation and sample documents on the process of compensation for land (especially for the planting year> 2005) o Register for occupation or enclave or land dispute (name of party & total area), maps of occupational locations / enclaves / land disputes and documents on the settlement process  Not yet shown or available for the following documents: • PT GLP: procedures for resolving disputes with employees • PT BPP, PT CCI, PT GLP, PT SNP & PT MIB: (a) Poli- cies related to equality of employment opportunities for local local communities, (b) Policies regarding gender equality in accordance with skills, skills, expertise, abilities and work experience (c) Policies provide

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Auditee Response Date of clo- Evidence Observed / NCR Verification of Corre sure Ref NCR No. raised Correction Corrective Action tion/Corrective action Auditor/ Conclution freedom of formation of workers' organizations for association or communication forums (d) Policies pay attention to welfare and facilities / infrastructure for workers (e) Policies of freedom to practice worship according to religion and beliefs (f) Policies protect OSH employees (g) Policies related to the application of wages in accordance with minimum wage regulations (h) Num- ber of workers and status of workers (industrial relations) (i) Legality of Trade Unions and / or Bipartite LKS  Not yet able to be demonstrated or available for the following documents: (a) PT BPP: HGU certificate owned and the decision or ratification of environmental documents (b) PT CCI: Not yet able to show the documents of the Decree of the Head of BPN on PT CCI HGU and the decision or ratification of its environmental documents (c) PT MIB : BPN Head De-

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Auditee Response Date of clo- Evidence Observed / NCR Verification of Corre sure Ref NCR No. raised Correction Corrective Action tion/Corrective action Auditor/ Conclution cree document for PT MIB's HGU has not yet been shown covering an area of 3,958 ha, IUP document and document of decision / ratification of environmental documents (d) PT SNP: IUP document has not been shown and document / document of decision / ratification of environmental documents (e) PT GLP: can not be shown Head Decree BPN for PT GLP's HGU and its HGU certificate, IUP document and environmental document validation / decision document.  PT BPP, PT CCI, PT GLP, PT SNP & PT MIB: (a) Can not yet be demonstrated Evidence of protection of workers in the form of Health insurance (BPJS Kesehatan) and Employ- ment insurance (BPJS Ketenagakerjaan) (b) Not yet demonstrated Evidence of implementation of wages according to minimum wages for lowest level workers RSPO RSPO The company has not been Provide socialization Ensure the third par- The company has sent improvement 26/07/2019

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Auditee Response Date of clo- Evidence Observed / NCR Verification of Corre sure Ref NCR No. raised Correction Corrective Action tion/Corrective action Auditor/ Conclution SCCS 02502 able to demonstrate that a related requirement of ties understand the evidence such as: 5.5.1 third party (contractor) for RSPO SCCS for third Principles and Criteria  Minutes of socialization related Closed CPO and PK transport activi- party (contractor) of RSPO SCCS relat- RSPO SCCS conduct on 22 Ju- ties has fulfilled the RSPO ed the activity which ly 2019 to contractor such as SCCS standard requirements responsible for the CV Pelita Jaya Medan, PT Kar- company. ya Pratama Niaga Jaya  Revision of agreement i.e. additional information related the contractor required to adhere the requirement of RSPO SCCS and provide access to certification body if an audit necessary. For example: agreement between PT BSP Kisaran and PT Karya Pratama Niaga Jaya No.004/BSP-CP/BSP- KPNJ/II/2019 dated 18 June 2019 RSPO RSPO Based on the verification of Revise contract doc- Ensure that all con- The company has sent improvement 26/07/2019 SCCS 02503 the cooperation contract documents with third par- tract documents con- evidence i.e. Revision of agreement 5.5.2 ument between the company ties by adding a tain management sys- i.e. additional information related the Closed and the third party (contractor) statement that the cer- tem requirements that contractor required to adhere the re- CPO and PK transport there tification body has ac- are implemented in quirement of RSPO SCCS and pro- has been no statement that cess to contractors or the company. vide access to certification body if an the certification body has ac- operations if an audit audit necessary. For example: cess to the contractor or oper- is needed. agreement between PT BSP Kisaran ational if an audit is required and PT Karya Pratama Niaga Jaya No.004/BSP-CP/BSP-KPNJ/II/2019 dated 18 June 2019

RSPO RSPO The company has not been Revised training pro- Ensure the training The company has sent improvement 16/07/2019 SCCS 02504 able to demonstrate training gram year 2019 program that is pre- evidence i.e. revision of training pro- 5.8.1 plans related to the RSPO pared contains all the gram year 2019. The training of Closed SCCS in 2018 and 2019 requirements for an in- RSPO SCCS conduct on September

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Auditee Response Date of clo- Evidence Observed / NCR Verification of Corre sure Ref NCR No. raised Correction Corrective Action tion/Corrective action Auditor/ Conclution tegrated management 2019. system (equipped the training needs analysis) RSPO RSPO The company has not been Conduct RSPO SCCS Ensure the training The company has sent improvement 26/07/2019 SCCS 02505 able to show evidence that the training / awareness program that is pre- evidence i.e.: 5.8.2 officers responsible for imple- for 2019. pared contains all the  Documentation of awareness Closed menting RSPO SCCS have requirements for an in- training of RSPO SCCS con- received RSPO SCCS training tegrated management duct on 27 June 2019. This system (equipped the training attend of 26 people. training needs analy- This documentation equipped sis) with attendant list of participant, photo documentation and materi of training  Documentation of public training of RSPO SCCS conduct on 19-20 July 2019. This training attend of 25 people. This documentation equipped with attendant list of participant, photo documentation and materi of training

RSPO RSPO Based on document and field Remove the RSPO Ensure information The company has sent improvement 26/07/2019 SCCS 02506 verification, the company uses logo on the plank. that updates the evidence i.e. photo documentation re- 5.11.1 the RSPO logo which is con- RSPO SCCS certifica- lated removal of the RSPO logo in Closed trary to the RSPO Rules on tion requirements can the information boards of all estate. Market Communications and be received by the Claims unit. E.4.1 RSPO The company has not been Revised mass balance Ensure that the mass The company has sent improvement 26/07/2019 02507 able to show the correct mass report. balance report has evidence i.e. revision of mass bal- balance document related to separated the receipt of ance. The mass balance report has Closed the receipt of certified and uncertified and uncertified separate the certified and uncertified certified FFB where there are FFB FFB. The company has separate the

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Auditee Response Date of clo- Evidence Observed / NCR Verification of Corre sure Ref NCR No. raised Correction Corrective Action tion/Corrective action Auditor/ Conclution uncertified FFB (Aek Selabat uncertified FFB from Aek Selabat es- estate and PT BSP Kisaran) tate and PT BSP Kisaran claimed to be certified FFB E.5.1 RSPO The company has not been Revised mass balance Ensure that the mass The company has sent improvement 26/07/2019 02508 able to show the correct mass report. balance report has evidence i.e. revision of mass bal- balance document related to separated the receipt of ance. The mass balance report has Closed the receipt of certified and uncertified and uncertified separate the certified and uncertified certified FFB where there are FFB FFB. The company has separate the uncertified FFB (Aek Selabat uncertified FFB from Aek Selabat es- estate and PT BSP Kisaran) tate and PT BSP Kisaran claimed to be certified FFB 2.1.1 RSPO The company has not fulfill  Spruce up files so Ensure that all legal The company has sent improvement 26/07/2019 02509 some regulation such as: it's easy to access requirements are evidence i.e.:  Permenakertrans  Conduct training evaluated periodically.  OSH license of lifting equip- Closed No.09/MEN/VII/2010 for all spraying of- ment on behalf Muhammad about operator and officers by the pesti- Yakub as loader operator with ficer of lifting equip- cide commission. register NO.P.12.8301-OPK3- ment article 5 where  Inspect the first LT/PAA/II/2018 dated 2 Feb- the lifting equipment aid kit (BMA-FR- ruary 2018. This license valid shall operated by op- 35) in accordance until 2 February 2023 erator which have with the Work-  OSH license of steam enginee OSH license and work place Inspection grade 1 on behalf Abdul Karim book in accordance procedure (BMA- Nasuition with register with type and qualifi- 16) and provide NO.Reg.P.10.1968-OPK3- cation i.e. M. Yakub the contents of the PUBT-B.I/V/2018 dated 4 (license has expired) first aid kit accord- June 2018. This license valid  Permenaker No.01 ing to regulations. until 4 June 2023 year 1988 about quali-  Conduct training /  Documentation of limited pes- fication and require- socialization to ticide usage training for work- ment for operator of Warehouse Offic- er who handling limited pesti- steam enginee on be- ers as well as the cide conduct on 18 July 2019. half Warsito, Abdul insulation of haz- This documentation equipped Karim Nasution and ardous and toxic with attendant list of partici- Rifani (license has waste and haz- pant as much as 56 person

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Auditee Response Date of clo- Evidence Observed / NCR Verification of Corre sure Ref NCR No. raised Correction Corrective Action tion/Corrective action Auditor/ Conclution expired) ardous and toxic and photo documentation  Permentan No. 24 material waste  Documentation of handover year 2011 about re- warehouse and the first aid kit box for the quirement and mech- given symbols and foreman of Gurach Batu es- anism of pesticide labels. tate, Serbangan estate and registeration article 9 Sei Baleh estate.  Based on field verifi-  Inspection report of first aid cation found the con- content conduct on 6 May tent of first aid kit box 2019 for Serbangan estate, 19 does not accordance June 2019 for Gurach Batu with Permenaker estate and 7 April and 8 May No.15 year 2008 2019 for Sei Baleh estate. (Gurach Batu estate, This inspection record of form Serbangan estate and of inspection (No.Form: BMA- Sei Baleh estate) and FR-35 revision 00) found the content of  Photo documentation related first aid kit has been installing the symbol and label expired of hazardous and toxic waste  During field verifica- for temporary storage of haz- tion to temporary stor- ardous and toxic waste in age of hazardous and Gurach Batu estate, Sei Baleh toxic waste (Gurach estate and Serbangan estate Batu estate, Sei Baleh estate and Serbangan estate) found hazardous and toxic waste does not equipped with symbol and label of hazardous and toxic waste in accordance with PermenLH No.14 year 2013

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Auditee Response Date of clo- Evidence Observed / NCR Verification of Corre sure Ref NCR No. raised Correction Corrective Action tion/Corrective action Auditor/ Conclution 4.1.1 RSPO Based on document verifica-  Delivering hazard-  Ensure that haz- The company has sent improvement 26/07/2019 02511 tion known that estate conduct ous and toxic ardous and toxic evidence i.e.: temporary keeping of hazard- waste stored in waste available at  Despatch slip No.318712 Closed ous and toxic waste at tempo- the estate. the location is sent (Form No.BW-FR-04 revision rary storage of hazardous and  Conduct training in to CWB before 30 00) from Serbangan 2 to toxic waste in the estate more handling hazard- days. Serbangan estate consist of than 30 days where this is not ous and toxic  Ensure all training ex-container of ally as much accordance with Procedure of waste from estate. needs are carried as 19 pcs, ex-container of waste management (BMA-12 out metsulindo as much as 20 revision 02 issued date 14 pcs, ex-container of meta pri- March 2017) (Gurach Batu es- ma as much as 3 pcs and ex- tate and Serbangan estate). container of Dolby as much as 1 pcs. This hazarodus and toxic waste deliver on 4 May 2019 and receipt on 4 May 2019  Despatch slip No.212475 (Form No.BW-FR-04 revision 00) from Serbangan 4 to Serbangan estate consist of ex-container of dolgy as much as 29 pcs, ex-container of metsulindo as much as 16 pcs, ex-container of ally as much as 1 pcs, ex-container of meta prima as much as 2 pcs, ex-container of cyro as much as 4 pcs, ex-container of rafid as much as 6 pcs, ex- container of marshall as much as 99 pcs, ex-container of Dithane as much as 8 pcs and ex-container of bayfolan as much as 2 pcs. This haza-

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Auditee Response Date of clo- Evidence Observed / NCR Verification of Corre sure Ref NCR No. raised Correction Corrective Action tion/Corrective action Auditor/ Conclution rodus and toxic waste deliver on 3 May 2019 and receipt on 3 May 2019  Despatch slip No.552438 (Form No.BW-FR-04 revision 00) from Serbangan Estate to CWB Bunut consist of ex- container of pillar up as much as 19 pcs, ex-container of metaprima as much as 22 pcs, ex-container of metsulindo as much as 74 pcs, ex-container of ally as much as 44 pcs, ex- container of dlogy as much as 37 pcs, ex-container of rafid as much as 6 pcs, ex- container of cyro as much as 4 pcs, ex-container of Bestox as much as 8 pcs. This hazarodus and toxic waste deliver on 7 May 2019 and receipt on 7 May 2019  Despatch slip No.243992 (Form No.BW-FR-04 revision 00) from Gurach Batu Estate to CWB Bunut consist of ex- container of herbicide as much as 26 pcs, ex-container of Farmi acid as much as 11 pcs. This hazarodus and toxic waste deliver on 7 May 2019 and receipt on 3 May 2019  Documentation of training related handling of hazardous

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Auditee Response Date of clo- Evidence Observed / NCR Verification of Corre sure Ref NCR No. raised Correction Corrective Action tion/Corrective action Auditor/ Conclution and toxic waste for officer conduct on 20 June 2019. This training attend by 26 person.

4.5.1 RSPO In accordance with Work In- Conduct a global cen- Ensure that the work The company has sent improvement 17/07/2019 02513 struction (WI) No. BMEOP-WI- sus once a month for instruction related evidence i.e. global census record of 28 revision 2 dated 6 April fields that are not at- global census are car- Kuala Piasa estate. The estate con- Closed 2015, the global census is car- tacked. ried out duct global census on April 2019, ried out once a month for each May 2019, June 2019 and July 2019. map on a field that has never Based on global census, there is no been attacked but Kuala Piasa attacking of pest and disease. estate last conducted a global census in May 2018 so that it does not comply with work instruction (WI). 4.6.5 RSPO Not all officers using pesti- Conduct training for all Ensure that all re- The company has sent improvement 26/07/2019 02514 cides (spraying workers) re- spraying officers by quired training can be evidence i.e.: ceive training according to the pesticide commis- carried out periodically  Letter from HR & Comdev Closed Permentan No.24 of 2011 arti- sion Depat. Head to General cle 9 Manager Sumut I No.076/HRD Train- ing/IV/2019 dated 12 June 2019 about proposed of training. The training such as RSPO SCCS training, training of limited pesticide, training of first aid officer and training for officer of hazardous and toxic waste. This letter approve on 14 June 2019  Letter from HR & Comdev Depat. Head to All Manager No.137/HRD Train-

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Auditee Response Date of clo- Evidence Observed / NCR Verification of Corre sure Ref NCR No. raised Correction Corrective Action tion/Corrective action Auditor/ Conclution ing/VII/2019 dated 25 July 2019 about announcement. The announcement explained about the spraying worker can not conduct spraying with used paraquat for all sprayer that have not attend the training of limited pesticide usage  Documentation of limited pesticide usage training for worker who handling limited pesticide conduct on 18 July 2019. This documentation equipped with attendant list of participant as much as 56 person and photo documentation  Sample of training certificate related limited pesticide such as: a. Agusman with certificate number: No.521.4/61009/UP TPTPH/VII/2019 dated 19 July 2019 (Serbangan estate) b. Jon Erikson with certificate number: No.521.4/61009/UP TPTPH/VII/2019 dated 19 July 2019 (Sei Baleh estate) c. Suhendra with certif-

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Auditee Response Date of clo- Evidence Observed / NCR Verification of Corre sure Ref NCR No. raised Correction Corrective Action tion/Corrective action Auditor/ Conclution icate number: No.521.4/61009/UP TPTPH/VII/2019 dated 19 July 2019 (Gurach Batu estate) d. Sanun with certificate number: No.521.4/61009/UP TPTPH/VII/2019 dated 19 July 2019 (Tanah Raja estate) e. Sunardi with certificate number: No.521.4/61009/UP TPTPH/VII/2019 dated 19 July 2019 (Kwala Piasa estate) f. Bambang Ardian- syah with certificate number: No.521.4/61009/UP TPTPH/VII/2019 dated 19 July 2019 (Aek Salabat estate) g. Iwan Budianto with certificate number: No.521.4/61009/UP TPTPH/VII/2019 dated 19 July 2019 (Seed garden) 4.6.11 RSPO There is some non-conformity  Conduct health  Create a work The company has sent improvement 26/07/2019 02515 such as: checks on all program for health evidence i.e.:

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Auditee Response Date of clo- Evidence Observed / NCR Verification of Corre sure Ref NCR No. raised Correction Corrective Action tion/Corrective action Auditor/ Conclution  Not all spraying worker spraying officers. checks for all  Letter from HR & Comdev Depat. Closed conduct medical check-  Submit reports no spraying officers Head to All Manager No.741/HRD up in accordance with later than 2  Implement all pro- VII/2019 dated 25 July 2019 Permenaker No. 02 year months after the visions in the pes- about medical checkup. The letter 1980 for year 2018 and health check to ticide recommen- explained about medical checkup 2019 the Director Gen- dations for 81 person of worker  The company does not eral of Labor Pro-  Minutes of medical check up that create and submit report tection through the has been conduct on 17 July at least 2 month after Regional Office of 2019 consixt of 42 people (spiro- medical checkup to the Directorate metri) and 42 people (cholines- Direktur Jenderal Bina General of Labor terase) Lindung Tenaga Kerja Protection.  Letter from HR & Comdev Depat. by Local Regional Office Head to Manpower and Transmi- of Direktur Jenderal gration Agency of North Sumatera Bina Lindung Tenaga Province No.139/HRD/VI/2019 kerja dated 24 June 2019 about report of medical checkup result. The medical checup report equipped with medical checkup result such as Kisaran POM for 30 people (audiometri), spirometri as much as 30 people.  The medical checkup conduct by Balai Keselamatan dan Kesehatan Kerja Medan on 12 February 2019

4.7.2 RSPO Based on document verifica-  Revision the Ensure that all OHS The company has sent improvement 26/07/2019 02516 tion related HIRAC, there is no HIRAC Document. risks in the estate, mill evidence i.e.: identificatiof of hazardous and  Providing fire ex- and housing are iden-  Revision of HIRAC where the Closed risk for fuel sale activity in the tinguishers (sand tified in the HIRAC HIRAC has been adding fuel emplacement (Serbangan es- and gunny sacks) document sale activity in the emplacement tate). and installing the  Letter from estate manager of symbol of hazard- Serbangan estate QMF: RSPO-007a-18(Rev.4.April 2019) RSPO Surveillance Assessment] Report PT Bakrie Sumatera Plantation – Kisaran Palm Oil Mill –

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Auditee Response Date of clo- Evidence Observed / NCR Verification of Corre sure Ref NCR No. raised Correction Corrective Action tion/Corrective action Auditor/ Conclution ous and toxic ma- NO.115.Serb/05/2019 dated 15 terials in the place May 2019 for all worker about of selling oil. fire preventive in the emplacement

4.7.3 RSPO Based on field observation and Providing PPE for all Ensuring that all em- The company has sent improvement 26/07/2019 02517 interview with worker found the worker ployees use PPE in a evidence i.e.: worker does not wearing re- disciplined manner.  Minutes of socialization related Closed quired PPE (mill). For exam- PPE usage for unloading work- ple: worker of FFB unloading er conduct on 17 May 2019. does not wearing safety shoes The socialization inform that the worker must wearing PPE i.e. safety boot, helmet during en- tering the mill area  Attendant list of participant related socialization of PPE  Photo documentation related socialization of PPE  Minutes of PPE handover. For example: Kisaran POM on 16 May 2019 4.8.1 RSPO The company can not showing Revised training pro- Ensure the training The company has sent improvement 26/07/2019 02519 the training program year 2019 gram year 2019 program that needs evidence i.e. revision of training pro- related training of limited pes- conduct periodically gram year 2019. The training of Closed ticide usage and RSPO SCCS. RSPO SCCS conduct on September 2019 and training of limited pesticide usage conduct on October 2019

5.3.2 RSPO Based on document verifica-  Delivering hazard-  Ensure that haz- The company has sent improvement 26/07/2019 02522 tion, it is known that the com- ous and toxic ardous and toxic evidence i.e.: pany has not been able to waste stored in waste available at  Minutes of socialization related Closed show recordings of all chemi- the estate. the location is sent hazardous and toxic waste in cal waste and its container has  Conduct training in to CWB before 30 the emplacement of Serbangan been disposed of responsibly handling hazard- days. estate conduct on 14 May 2019. QMF: RSPO-007a-18(Rev.4.April 2019) RSPO Surveillance Assessment] Report PT Bakrie Sumatera Plantation – Kisaran Palm Oil Mill –

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Auditee Response Date of clo- Evidence Observed / NCR Verification of Corre sure Ref NCR No. raised Correction Corrective Action tion/Corrective action Auditor/ Conclution where found packaging of ous and toxic  Ensure all training The socialization explained hazardous and toxic material waste from estate. needs are carried about the worker can not keep- (KCl fertilizer sacks) in the out ing on re-use related ex con- housing area (Serbangan es- tainer of hazardous and toxic tate) and the last hazardous material such as ex fertilizer and toxic waste shipment rec- container and other container of ord is November 2017. hazardous and toxic material  Attendant list of participant and photo documentation related socialization of hazardous and toxic waste in the emplacement of Serbangan estate  Despatch slip No.318712 (Form No.BW-FR-04 revision 00) from Serbangan 2 to Serbangan estate consist of ex- container of ally as much as 19 pcs, ex-container of metsulindo as much as 20 pcs, ex- container of meta prima as much as 3 pcs and ex-container of Dolby as much as 1 pcs. This hazarodus and toxic waste deliver on 4 May 2019 and receipt on 4 May 2019  Despatch slip No.212475 (Form No.BW-FR-04 revision 00) from Serbangan 4 to Serbangan estate consist of ex-container of dolgy as much as 29 pcs, ex- container of metsulindo as much as 16 pcs, ex-container of ally as much as 1 pcs, ex- container of meta prima as

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Auditee Response Date of clo- Evidence Observed / NCR Verification of Corre sure Ref NCR No. raised Correction Corrective Action tion/Corrective action Auditor/ Conclution much as 2 pcs, ex-container of cyro as much as 4 pcs, ex- container of rafid as much as 6 pcs, ex-container of marshall as much as 99 pcs, ex-container of Dithane as much as 8 pcs and ex-container of bayfolan as much as 2 pcs. This hazarodus and toxic waste deliver on 3 May 2019 and receipt on 3 May 2019  Despatch slip No.552438 (Form No.BW-FR-04 revision 00) from Serbangan Estate to CWB Bunut consist of ex-container of pillar up as much as 19 pcs, ex- container of metaprima as much as 22 pcs, ex-container of metsulindo as much as 74 pcs, ex- container of ally as much as 44 pcs, ex-container of dlogy as much as 37 pcs, ex-container of rafid as much as 6 pcs, ex- container of cyro as much as 4 pcs, ex-container of Bestox as much as 8 pcs. This hazarodus and toxic waste deliver on 7 May 2019 and receipt on 7 May 2019

6.5.1 RSPO The wages of workers of the Make an appointmeny Make an appointment The company has sent improvement 26/07/2019 02523 Specific Time Work Agree- PKWT to PKWTT program of BHL / evidence i.e.: ment (PKWT) and Daily Work- (SKU). PKWT so that the  Request of non staff procument. Closed ers (BHL) have not been in ac- employee’s salary For example paramedic for Aek

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Auditee Response Date of clo- Evidence Observed / NCR Verification of Corre sure Ref NCR No. raised Correction Corrective Action tion/Corrective action Auditor/ Conclution cordance with the Decree of scale of palm oil is in Selabat estate as much as 2 the Governor of North Sumatra accordance with the person, driver as much as 1 No. 188.44 / 1573 / KPTS / Decree of the Gover- person, Bilal as much as 1 per- 2018 concerning Minimum nor of North Sumatra son, sortation, weighbridge op- Wages of Asahan District year No. 188.44 / 1573 / erator and helper sterilizer as 2019 for palm oil plantation KPTS / 2018 concern- much as 4 person, recorder as sector. ing minimum wages of much as 1 person, harvester for Asahan District year Kuala Piasa estate as much as 2019 for Palm Oil 5 person, clerk and harvester Plantation Sector for Sei Baleh estate as much as 16 person, harvester for Serbangan estate as much as 18 person, harvester for Tanah Raja estate as much as 15 person, harvester for Gurach Batu estate as much as 18 person  Internal memo No.88/GM- Kisaran/VII/2019 dated 19 July 2019 from General Manager BSP Sumut I to COO about the program of change of worker status from PKWT to PKWTT. Internal memo explained that there is PKWT as much as 353 person and daily worker (BHL) as much as 464 person. There is program of change the worker status i.e.: a. July 2019 as much as 81 person b. January 2020 as much as 245 person c. January 2021 as much as 245 person

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Auditee Response Date of clo- Evidence Observed / NCR Verification of Corre sure Ref NCR No. raised Correction Corrective Action tion/Corrective action Auditor/ Conclution d. January 2022 as much as 246 person  Work agreement No.20667 dated 30 August 2019 on behalf Indra Lesmana as harvester regarding change of worker status from PKWT to PKWTT  Work agreement No. 206678 on behalf Legiman as harvester regarding change of worker status from PKWT to PKWTT  6.5.2 RSPO There is some non-conformity  Employment re-  Reporting em- The company has sent improvement 25/07/2019 02524 such as: porting periodically ployment accord- evidence i.e.:  Workers of the Specif- for all worker sta- ing to regulations.  Registeration mark from Man- Closed ic Time Work Agree- tuses.  Appoint workers power agency of North Su- ment (PKWT) and  Make an appoint- according to regu- matera Province No.76-7/WIL- Daily Workers (BHL) meny PKWT to latory require- IV/DTK/SU/2018 dated 19 Oc- have not been report- PKWTT (SKU). ments tober 2018 about registration ed to the Manpower  Extrafooding poli-  Make company mark of mandatory for employ- Agency of Asahan cy will be made policies in accord- ment report for estate and office District (Kepmenaker- Circular Letter in ance with regula- of Director trans No. 100 of accordance with tory requirements  Registeration mark from Man- 2004). applicable regula-  Appoint workers power agency of North Su-  Based on interview tions according to regu- matera Province No.75-7/WIL- with workers of the  Appoint BHL lations IV/DTK/SU/2018 dated 19 Oc- Specific Time Work gradually to tober 2018 about registration Agreement (PKWT) at PKWTT. mark of mandatory for employ- Sei Baleh POM pro- ment report for palm oil mill vided information that  Internal memo No.211/HR Ar- the concerned person ea/VI/2019 dated 17 June 2019 had worked since from General Manager BSP 2012 and 2014 but Sumut I to all manager about until the audit conduct giving extra fooding to overtime QMF: RSPO-007a-18(Rev.4.April 2019) RSPO Surveillance Assessment] Report PT Bakrie Sumatera Plantation – Kisaran Palm Oil Mill –

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Auditee Response Date of clo- Evidence Observed / NCR Verification of Corre sure Ref NCR No. raised Correction Corrective Action tion/Corrective action Auditor/ Conclution the working relation- workers ship still Specific Time  Request of non staff procument. Work Agreement For example paramedic for Aek (PKWT) or had not Selabat estate as much as 2 been a Worker of person, driver as much as 1 Non-Specific Time person, Bilal as much as 1 per- Work Agreement son, sortation, weighbridge op- (PKWTT) (Kep- erator and helper sterilizer as menakertrans No 100 much as 4 person, recorder as of 2004). much as 1 person, harvester for  The company has not Kuala Piasa estate as much as been able to show a 5 person, clerk and harvester policy regarding the for Sei Baleh estate as much as provision of food and 16 person, harvester for beverages at least Serbangan estate as much as equal to 1,400 calo- 18 person, harvester for Tanah ries for workers who Raja estate as much as 15 per- work overtime for 3 son, harvester for Gurach Batu (three) hours or more estate as much as 18 person (Kepmenakertrans No. 102 of 2004).  There are daily workers (BHL) who work 21 consecutive days or more in 3 (three) months but the status has not been upgraded to become a worker of a Non-Specific Time Work Agree- ment (PKWTT) or a permanent employment relationship. For example, at

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Auditee Response Date of clo- Evidence Observed / NCR Verification of Corre sure Ref NCR No. raised Correction Corrective Action tion/Corrective action Auditor/ Conclution Serbangan Estate i.e. harvester is 26 people, each working on January 25 days, Feb- ruary 23 days, March 25 days on 2019 on behalf Junaidi, Wagi- arno, M. Airs Kur- niawan, Ali Akbar, In- dra Lesmana, MHD. Kurniawan, Suroto, Rudi Suhastra, M. Syafei, Budiman, Hadi Wahyudi, Suriyanto, Supriadi, M. Darmadi, Hepri Indra P, Gunan- dar, Andri, Surianto, Suriyanto, Ferri Ira- wan, Rahmad Hi- dayat, Irfan, Gun- awan, M. Yunus T , Irwansyah Putra, Andi Syaputra

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

8.2. Minor non-conformities

Auditee Response Date of Evidence Observed / NCR Verification of Corre tion/Corrective closure Ref NCR No. raised Correction Corrective Action action Auditor/ Conclution

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2.2.3 RSPO The company can not showing Request the copy of Ensure the legal doc- To be verified in next audit 02/05/2020 02510 an evidence about document previous landowner- ument keeping well (12 month of previous landownership. ship record to corpo- after the las rate in Jakarta as a audit) copy on site (unit) Conclustion: Planned for Correc- tion/correcti ve action is accepted. 4.2.3 RSPO The company has been con- Conduct procurement Procurement of ferti- To be verified in next audit 02/05/2020 02512 duct leaf analysis and has a and application of fer- lizer in accordance (12 month fertilizer recommendation of 1st tilization in accord- with recommendation after the las semester and 2nd semester ance with recommen- of fertilizer that has audit) year 2018 but the company dation been assigned can not showing the fertilizer Conclustion: application conduct in accord- Planned for ance with fertilizer recommen- Correc- dation that has been assigned. tion/correcti ve action is accepted. 4.7.5 RSPO Based on interview with har- Conduct first of aid Ensure entire training To be verified in next audit 02/05/2020 02518 vesting foreman (Gurach Batu training for entire of- that needs conduct (12 month estate P08301 and Serbangan ficer periodically after the las estate P10303) known that the audit) foreman have not received first aid training Conclustion: Planned for Correc- tion/correcti ve action is accepted. 4.8.2 RSPO The company can not showing Conduct RSPO SCCS Ensure entire training To be verified in next audit 02/05/2020 02520 evidence that the officer which training for entire of- that needs conduct (12 month implemented the RSPO SCCS ficer periodically after the las has received related RSPO audit) SCCS. Conclustion:

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Planned for Correc- tion/correcti ve action is accepted. 5.1.3 RSPO The company have not con- Review the matrix of Conduct review the To be verified in next audit 02/05/2020 02521 duct review for mangement environmental man- matrix of environmen- (12 month and monitoring plan that has agement and monitor- tal management and after the las been assigned in the matrix of ing plan (RKL/RPL) of monitoring plan audit) environmental management plantation and mill (RKL/RPL) every 2 and monitoring plan (RKL- years Conclustion: RPL) at least once every two Planned for years Correc- tion/correcti ve action is accepted.

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

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9.0 Noteworthy Positive Components and Potential for Improvement

9.1. Positive Observation:

No. Ref. Positive Comments

- - -

9.2. Potential for Improvement:

No. Ref. Potential for improvement

In order for the existing HGU pillars to be given an identification number 1. 2.2.2 according to the field map  It is recommended that chemical storage in the warehouse is carried out separately from other materials or tools 2. 4.6.6  It is better if the chemical laying in the warehouse does not touch directly with the floor made of wood base (pallets)  Signs / symbols of chemicals to be adjusted to the type of chemical It is best to make a Near miss incident report in accordance with SOP 3. 4.7.1 BMH-05 To be equipped with material safety data sheet for fertilizer chemicals 4. 4.7.3 (Urea, Meister, NPK)

10.0 Issues Raised by Stakeholders and Findings Pertaining to Issues

10.1 Issues Raised during Stakeholder Consultation Meeting

No. Issues Raised Management Response Auditor Verification

- - - -

10.2 Issues Raised during Stakeholder Interviews On-site

No. Issues Raised Audit Verification

- - -

11.0 Certification Decision

11.1 Recommendation for Certification PT BSP Kisaran has established and maintains an effective system to ensure compliance with the RSPO principles and criteria. The audit team has confirmed through the audit process that the company’s practices complies with, adequately maintains and implements the requirements of RSPO Principles and Criteria INA-NI year 2016.

PT TUV Rheinland Indonesia recommends that PT BSP Kisaran continue to maintain current certificate as a producer of RSPO Certified Sustainable Palm Oil.

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11.2 Date of Certificate Issued and Scope of Certificate The scope of the certificate covers production of palm oil from PT BSP Kisaran and its supply base, which includes Tanah Raja estate, Gurach Batu estate, Kuala Piasa estate, Serbangan estate and Sei Baleh estate. The date of certificate issued 2nd December 2019. Further details of the certificate are as per Appendix 1.

11.3 Date of Next Surveillance Visit

The recertification is planned for 2020

12.0 Acknowledgements of Internal Responsibility and Formal Sign-Off by Client

It is acknowledged that the assessment visit was carried out as described in this report and we accept the assessment findings and report content.

Signed on behalf of PT TUV Rheinland Indonesia

…………………………………………. Naik Monang P L Lead Auditor Date: 14 October 2019

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APPENDICES Appendix 1: Details of Certificate

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Organizational Unit and Auditor / Ab- Procedure - Element - Date / Time (1) Interviewee Processes brev. Standard Chapter Sunday, 28 April 2019 12.20-14.00 Flight from Pekanbaru to DA ID 6855 Jakarta

Monday, 29 April 2019 05.35-08.00 Flight from Jakarta to Me- All Auditor GA 180 dan 08.30-12.00 Travelling from Kualanamu All Auditor to estate 12.00-13.00 Lunch and praying 13.00-15.00 Consultation with local All Auditor Topic or issues about : government:  Right of worker (wage, insur-  Man Power & Transmi- ance, equal opportunity (casual gration Agency in Asa- worker), health examination, la- han District bor union, outsource of worker,  Plantation Agency in etc) Asahan District  OSH (SIO, OSH regular report,  Environmental Official etc) Regional Government  Scheme smallholder issues in Asahan District  Environmental Impact Assess-  Regional Office of Na- ment report tional Land Agency in  Land Dispute Asahan District 15.00-17.00 Collecting data about land All Auditor Please provide information previous ownership about previous landownership End of 1st day audit

Tuesday, 30 April 2019 08.00-09.00  Opening meeting All Auditor Company repre-  Introduction about sentative team audit (mill,  Introduction / presenta- KCP and tion of company and estate) source of FFB  Verification correction / corrective action from previous findings 09.00-12.00 Document check and field NM Mill Rep- RSPO SCCS Requirement: Kisaran POM verification related: resenta-  General requirement (5.1-  SCCS tive 5.13)  Law and regulation  Module E for Mass Balance compliance (E.1 to E.5)  Procedure Principle 2 Criteria 2.1.1 to 2.1.4  Waste Management Principle 4  Efficiency of fossil fuel Criteria 4.1.1 to 4.1.4  Continuous improve- Principle 5 ment Criteria 5.3; 5.4  Partial Certification & Principle 8 Time Bound Plan Veri- Criteria 8.1 fication RSPO Certification System, 2017

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Organizational Unit and Auditor / Ab- Procedure - Element - Date / Time (1) Interviewee Processes brev. Standard Chapter

09.00-12.00 Document check and field BS Mill Rep- Principle 2 Kisaran POM verification related: resenta- Criteria 2.1.1  Law and regulation tive Principle 4 compliance Criteria 4.4 Principle 5  Water management Criteria 5.6 plan Principle 8  GHG Criteria 8.1  Continuous improvement 09.00-12.00 Document check and field DN Mill Rep- Principle 1 Kisaran POM verification related: resenta- Criteria 1.1; 1.2; 1.3  Transparency tive Principle 2 Criteria 2.1.1  Law and regulation Principle 3 compliance Criteria 3.1  Land dispute and land Principle 6 conflict Criteria 6.1 to 6.13  Long term economic Principle 8  Social and worker wel- Criteria 8.1 fare

 NPP (if applicable)  Continuous improvement 09.00-12.00 Document check and field DA Mill Rep- Principle 2 Kisaran POM verification related: resenta- Criteria 2.1.1  Law and regulation tive Principle 4 compliance Criteria 4.7; 4.8 Principle 5  OSH Criteria 5.1  Training Principle 8  EIA Criteria 8.1  Continuous improvement 12.00-14.00 Break and praying All Auditor 14.00-17.00 Continue previous agenda All Auditor Mill Man- ager End of 2nd day audit

Wednesday, 01 May 2019 LIBUR

Thursday, 02 May 2019 08.00-09.00 Field verification NM, DN Gurach Batu Estate 08.00-09.00 Field verification DA, BS Kwala Piasa Estate 09.00-12.00 Document check verifica- NM Estate Principle 2 Gurach Batu tion related: Repre- Criteria 2.1.1 to 2.1.4 Estate  Law and regulation sentative Principle 4 compliance Criteria 4.1.1 to 4.1.4; 4.2 Principle 5  Procedure Criteria 5.3; 5.4

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Organizational Unit and Auditor / Ab- Procedure - Element - Date / Time (1) Interviewee Processes brev. Standard Chapter  Soil fertility Principle 7 Criteria 7.2  Waste Management Principle 8  Efficiency of fossil fuel Criteria 8.1  NPP (if applicable)  Continuous improvement

09.00-12.00 Document check verifica- BS Estate Principle 2 Gurach Batu tion related: Repre- Criteria 2.1.1; 2.2.1-2.2.2 Estate  Law and regulation sentative Principle 4 compliance Criteria 4.3; 4.4; 4.5 Principle 5  Legal land Criteria 5.2; 5.6  Erosion control Principle 7  Water management Criteria 7.3; 7.4; 7.8 plan Principle 8  IPM Criteria 8.1

 HCV

 GHG  NPP (if applicable)  Continuous improvement

09.00-12.00 Document check verifica- DN Estate Principle 1 Gurach Batu tion related: Repre- Criteria 1.1; 1.2; 1.3 Estate  Transparency sentative Principle 2 Criteria 2.1.1; 2.2.3-2.2.6; 2.3  Law and regulation Principle 3 compliance Criteria 3.1  Land dispute and land Principle 6 conflict Criteria 6.1 to 6.13  Social and worker wel- Principle 7 fare Criteria 7.1; 7.5; 7.6  NPP (if applicable) Principle 8 Criteria 8.1  Continuous improve-

ment  Verification of previous landownership

09.00-12.00 Document check verifica- DA Estate Principle 2 Gurach Batu tion related: Repre- Criteria 2.1.1 Estate  Law and regulation sentative Principle 4 compliance Criteria 4.6; 4.7; 4.8 Principle 5  Pesticide usage Criteria 5.1; 5.5  OSH Principle 7  Training Criteria 7.1  EIA Principle 8 Criteria 8.1  Zero burning

 NPP (if applicable)  Continuous improvement

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Organizational Unit and Auditor / Ab- Procedure - Element - Date / Time (1) Interviewee Processes brev. Standard Chapter 12.00-13.30 Break and praying All Auditor

13.30-18.00 Document check verifica- NM Estate Principle 2 Kwala Piasa tion related: Repre- Criteria 2.1.1 to 2.1.4 Estate  Law and regulation sentative Principle 4 compliance Criteria 4.1.1 to 4.1.4; 4.2 Principle 5  Procedure Criteria 5.3; 5.4  Soil fertility Principle 7  Waste Management Criteria 7.2  Efficiency of fossil fuel Principle 8 Criteria 8.1  NPP (if applicable)

 Continuous improvement

13.30-18.00 Document check verifica- BS Estate Principle 2 Kwala Piasa tion related: Repre- Criteria 2.1.1; 2.2.1-2.2.2 Estate  Law and regulation sentative Principle 4 compliance Criteria 4.3; 4.4; 4.5 Principle 5  Legal land Criteria 5.2; 5.6  Erosion control Principle 7  Water management Criteria 7.3; 7.4; 7.8 plan Principle 8  IPM Criteria 8.1

 HCV

 GHG  NPP (if applicable)  Continuous improvement

13.30-18.00 Document check verifica- DN Estate Principle 1 Kwala Piasa tion related: Repre- Criteria 1.1; 1.2; 1.3 Estate  Transparency sentative Principle 2 Criteria 2.1.1; 2.2.3-2.2.6; 2.3  Law and regulation Principle 3 compliance Criteria 3.1  Land dispute and land Principle 6 conflict Criteria 6.1 to 6.13  Social and worker wel- Principle 7 fare Criteria 7.1; 7.5; 7.6  NPP (if applicable) Principle 8 Criteria 8.1  Continuous improve-

ment  Verification of previous landownership

13.30-18.00 Document check verifica- DA Estate Principle 2 Kwala Piasa tion related: Repre- Criteria 2.1.1 Estate  Law and regulation sentative Principle 4 compliance Criteria 4.6; 4.7; 4.8 Principle 5  Pesticide usage Criteria 5.1; 5.5  OSH Principle 7  Training Criteria 7.1

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Organizational Unit and Auditor / Ab- Procedure - Element - Date / Time (1) Interviewee Processes brev. Standard Chapter  EIA Principle 8 Criteria 8.1  Zero burning

 NPP (if applicable)  Continuous improvement

End of 3rd day audit

Friday, 3 May 2019 08.00-09.00 Field verification NM, DN Serbangan Estate 08.00-09.00 Field verification DA, BS Sei Baleh Estate 09.00-12.00 Document check verifica- NM Estate Principle 2 Serbangan tion related: Repre- Criteria 2.1.1 to 2.1.4 Estate  Law and regulation sentative Principle 4 compliance Criteria 4.1.1 to 4.1.4; 4.2 Principle 5  Procedure Criteria 5.3; 5.4  Soil fertility Principle 7  Waste Management Criteria 7.2  Efficiency of fossil fuel Principle 8 Criteria 8.1  NPP (if applicable)

 Continuous improvement

09.00-12.00 Document check verifica- BS Estate Principle 2 Serbangan tion related: Repre- Criteria 2.1.1; 2.2.1-2.2.2 Estate  Law and regulation sentative Principle 4 compliance Criteria 4.3; 4.4; 4.5 Principle 5  Legal land Criteria 5.2; 5.6  Erosion control Principle 7  Water management Criteria 7.3; 7.4; 7.8 plan Principle 8  IPM Criteria 8.1

 HCV

 GHG  NPP (if applicable)  Continuous improvement

09.00-12.00 Document check verifica- DN Estate Principle 1 Serbangan tion related: Repre- Criteria 1.1; 1.2; 1.3 Estate  Transparency sentative Principle 2 Criteria 2.1.1; 2.2.3-2.2.6; 2.3  Law and regulation Principle 3 compliance Criteria 3.1  Land dispute and land Principle 6 conflict Criteria 6.1 to 6.13  Social and worker wel- Principle 7 fare Criteria 7.1; 7.5; 7.6

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Organizational Unit and Auditor / Ab- Procedure - Element - Date / Time (1) Interviewee Processes brev. Standard Chapter  NPP (if applicable) Principle 8 Criteria 8.1  Continuous improve-

ment  Verification of previous landownership

09.00-12.00 Document check verifica- DA Estate Principle 2 Serbangan tion related: Repre- Criteria 2.1.1 Estate  Law and regulation sentative Principle 4 compliance Criteria 4.6; 4.7; 4.8 Principle 5  Pesticide usage Criteria 5.1; 5.5  OSH Principle 7  Training Criteria 7.1  EIA Principle 8 Criteria 8.1  Zero burning

 NPP (if applicable)  Continuous improvement

12.00-13.00 Break and praying All Auditor

13.00-15.30 Document check verifica- NM Estate Principle 2 Sei Baleh tion related: Repre- Criteria 2.1.1 to 2.1.4 Estate  Law and regulation sentative Principle 4 compliance Criteria 4.1.1 to 4.1.4; 4.2 Principle 5  Procedure Criteria 5.3; 5.4  Soil fertility Principle 7  Waste Management Criteria 7.2  Efficiency of fossil fuel Principle 8 Criteria 8.1  NPP (if applicable)

 Continuous improvement

13.00-15.30 Document check verifica- BS Estate Principle 2 Sei Baleh tion related: Repre- Criteria 2.1.1; 2.2.1-2.2.2 Estate  Law and regulation sentative Principle 4 compliance Criteria 4.3; 4.4; 4.5 Principle 5  Legal land Criteria 5.2; 5.6  Erosion control Principle 7  Water management Criteria 7.3; 7.4; 7.8 plan Principle 8  IPM Criteria 8.1

 HCV

 GHG  NPP (if applicable)  Continuous improvement

13.00-15.30 Document check verifica- DN Estate Principle 1 Sei Baleh tion related: Repre- Criteria 1.1; 1.2; 1.3

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Organizational Unit and Auditor / Ab- Procedure - Element - Date / Time (1) Interviewee Processes brev. Standard Chapter Estate  Transparency sentative Principle 2 Criteria 2.1.1; 2.2.3-2.2.6; 2.3  Law and regulation Principle 3 compliance Criteria 3.1  Land dispute and land Principle 6 conflict Criteria 6.1 to 6.13  Social and worker wel- Principle 7 fare Criteria 7.1; 7.5; 7.6  NPP (if applicable) Principle 8 Criteria 8.1  Continuous improve-

ment

 Verification of previous landownership 13.00-15.30 Document check verifica- DA Estate Principle 2 Sei Baleh tion related: Repre- Criteria 2.1.1 Estate  Law and regulation sentative Principle 4 compliance Criteria 4.6; 4.7; 4.8 Principle 5  Pesticide usage Criteria 5.1; 5.5  OSH Principle 7  Training Criteria 7.1  EIA Principle 8 Criteria 8.1  Zero burning

 NPP (if applicable)  Continuous improvement

15.30-16.00 Preparing closing meet- All Auditor Internal Meeting Auditor ing 16.00-17.00 Closing meeting All Auditor Manage- ment Repre- sentative 17.00-21.00 Travelling from site to All Auditor Stay overnight @Kualanamu Kualanamu End of 4th day audit

Saturday, 4 May 2019 08.45-11.10 Flight from Kualanamu NM, DN, GA 183 to Jakarta BS 07.35-08.40 Flight from Kualanamu DA JT124 to Pekanbaru

End of audit

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On-site visit verification Plan

Organizational Unit and Auditor / Ab- Procedure - Element - Date / Time (1) Interviewee Processes brev. Standard Chapter Wednesday, 24 July 2019 14.05 – Flight from Pekanbaru to DA QG 929 15.10 Medan 15.30 – Travelling from Kualanamu DA Stay Overnight at Mess PT BSP 19.00 to estate

Thursday, 25 July 2019 08.00-08.30  Opening meeting DA Company Kisaran POM repre-  Introduction about sentative team audit (mill,  Introduction / presenta- KCP and tion of company estate)

08.30-12.00 Field verification NC Ma- DA Mill Rep- SCCS 5.8.2 Kisaran POM jor resenta- NCR RSPO NO 02505 tive SCCS 5.11.1 NCR RSPO NO 02506 SCCS E.4.1 NCR RSPO NO 02507 SCCS E.5.1 NCR RSPO NO 02508 Principle 2 Criteria 2.1.1 NCR RSPO NO 02509 Principle 4 Criteria. 4.7.3 NCR RSPO NO 02509 Criteria 4.8.2 NCR RSPO NO 02520

12.00-14.00 Break and praying DA 14.00-17.00 Field verification NC Ma- DA Estate SCCS 5.11.1 Serbangan jor Repre- NCR RSPO NO 02506 Estate sentative Criteria 2.1.1 NCR RSPO NO 02509 Princple 4 Criteria 4.7.2 NCR RSPO NO 02516 Criteria 4.6.5 NCR RSPO NO 02514 Princple 5 Criteria 5.3.2 NCR RSPO NO 02522 Princple 6 Criteria 6.5.2 NCR RSPO NO 02524

End of 1st day audit Friday, 26 July 2019 08.00-10.00 Field verification NC Ma- DA Estate SCCS 5.11.1 Gurach Batu jor Repre- NCR RSPO NO 02506 Estate sentative Principle 2

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Organizational Unit and Auditor / Ab- Procedure - Element - Date / Time (1) Interviewee Processes brev. Standard Chapter Criteria 2.1.1 NCR RSPO NO 02509 Princple 4 Criteria 4.1.1 NCR RSPO NO 02511 Criteria 4.6.5 NCR RSPO NO 02514

10.00-12.00 Field verification NC Ma- DA Estate SCCS 5.11.1 Kuala Piasa jor Repre- NCR RSPO NO 02506 Estate sentative Princple 4 Criteria 4.5.1 NCR RSPO NO 02513 Criteria 4.6.5 NCR RSPO NO 02514

12.00-14.00 Break and praying 14.00-15.00 Field verification NC Ma- DA Estate SCCS 5.11.1 Sei Baleh jor Repre- NCR RSPO NO 02506 Estae sentative Principle 2 Criteria 2.1.1 NCR RSPO NO 02509 Princple 4 Criteria 4.6.5 NCR RSPO NO 02514 14.00-15.00 Preparing closing meeting DA

15.00-16.00 Closing meeting DA Manage- Internal Meeting Auditor ment Repre- sentative 17.00-21.00 Travelling from site to DA Stay overnight @Kualanamu Kualanamu End of 2nd day audit Saturday, 27 July 2019

07.50 – Flight from Kualanamu DA QG 928 08.55 to Pekanbaru

End of audit

QMF: RSPO-007a-18(Rev.4.April 2019) RSPO Surveillance Assessment] Report PT Bakrie Sumatera Plantation – Kisaran Palm Oil Mill –

North Sumatera Province

Page 102 of 207 Appendix 3: List of Abbreviations

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

QMF: RSPO-007a-18(Rev.4.April 2019) RSPO Surveillance Assessment] Report PT Bakrie Sumatera Plantation – Kisaran Palm Oil Mill –

North Sumatera Province

Page 103 of 207 Appendix 4: Other Achievement s and Certificatio Helds

Certification Name of mill / es- Certification Standard / Date Body / tate Award achieved Achieved Awarder - - - -

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North Sumatera Province

Page 104 of 207 Appendix 5: Audit Checklist

CR CHECKLIST RESULTS OF VERIFICATION STATU S (C / NC / C WITH OBS.) Principle 1: Commitment To Transparency

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

Guidance : Growers and millers should have a Standard Operating Procedure (SOP) to respond constructively to stakeholders, including a specific timeframe to respond to requests for information. Growers and millers should respond constructively and promptly to requests for information from stakeholders. The SOP should include information on the officer, who may be contracted by the interested external parties. Growers and millers should ensure that sufficient objective evidence exists to demonstrate that the response is timely and appropriate. See Criterion 1.2 for requirements relating to publicly available documentation. See Criterion 6.2 on consultation. See Criterion 4.1 on SOPs. Definition of relevant stakeholders according to the Regulation of the Minister of Environment No. 17 year 2012 regarding Guidance for Involvement of Communities in the Process of Environmental and Social Impact Assessment (AMDAL) and Environmental Permit are :  Affected communities are the communities who live within the AMDAL study boundary (social boundary), which will be beneficially or adversely affected by the operations and/or plan of activities;  Environmental concerned communities are communities who are not affected by the operations and/or business plan, however they shall pay attention to the environmental and social issues of the upcoming operations and/or business plan, including the potential environmental and social impacts;  Influenced communities by the decisions of AMDAL process are communities who are located outside and or directly adjacent to the boundary of AMDAL study areas relevant to the impact of operations and/or business plan.  Relevant stakeholders are also NGOs that have concerns on the environmental and social issues of the upcoming operations and/or business plan, including the potential environmental and social impacts 1.1.1 There shall be evidence that growers and millers provide adequate information on (environmental, social and/or legal) issues relevant to RSPO Criteria to relevant stakeholders for effective participation in decision making. List of information related to criterion 1.2 that can be accessed by relevant stakeholders shall be available. Specific Guidance:

For 1.1.1: Evidence should be provided by grower & miller that information is received in appropriate form(s) and language(s) by relevant stakeholders. Information will include information on the RSPO mechanisms for stakeholder involvement, including information on their rights and responsibilities. a. Does the company maintain a list of stakeholders? (E.g. listed by The company has maintained a list of stakeholders that consisting of people C category and stakeholders listed should be site specific) around the company, non-governmental organization, entreprizes/suppliers, b. What is the frequency of updating the stakeholder list? government of villages, sub-district and district. Evaluation of the list of c. Is there evidence of stakeholder verification? stakeholders will conducted if any changes of stakeholders. There is evi- d. What type of information is provided? (E.g. Environmental, social dence that the stakeholder verification performed as documented in the list and legal) e. What is the frequency and level of access to this information? QMF: RSPO-007a-18(Rev.4.April 2019) RSPO Surveillance Assessment] Report PT Bakrie Sumatera Plantation – Kisaran Palm Oil Mill –

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CR CHECKLIST RESULTS OF VERIFICATION STATU S (C / NC / C WITH OBS.) f. How and where is the information disseminated? and office phone number/private stakeholders. g. Who is responsible for providing & updating information? h. Is there an SOP available to describe the process (of information There is evidence that the company has provided information in appropriate sharing/dissemination)? form and language to relevant stakeholders, such as: i. Are stakeholders aware of the type of information available and  Report to labor agency regularly every year. the procedures for accessing the information?  Environmental Report (RKL-RPL) to Enviromental Agency  Hazardous and toxic waste to Enviromental Agency  Plantation Report to Plantation Agency  OHS Implementation Report to Laour Agency

HR and area Division Head assigned by the company for providing and receiving informations to stakeholders. Based on interviews with stakeholders, evidenced that the stakeholders has known on how to get the information needed from the the company. Any problems conveyed by internal parties or external parties in the form of communication will be followed up by providing response / response information at the latest 30 (thirty) days from the date of receipt of the information. The company has maintain records of information’s requests from stakeholders as documented in a Log Book requests for Information (incoming mail) and Log Books of Providing Information (outgoing mail). There is evidence that the company was response and feedback information requested by stakeholders in a timely. 1.1.2 (M) Records of requests for information and responses to the information requested shall be maintained.

a. Does the company have an SOP to ensure constructive response PT BSP has Procedure for Communication and Councultation Internal and C to stakeholders? External with the No. Doc. BMH-03, Rev. 06 on 13 June 2016. These proce- b. Who is the personnel in charge (PIC)? dures as practical guidance to handle the internal and external communica- c. Does the SOP cover the elements under 1.1.1? tion related to information of RSPO, Environment, social and law. The organ- d. Is there a clear time frame for response to request for infor- ization has established mechanism for communication and consultation with mation? stakeholders, including to handling information requisition and how to re- e. Are records of requests for information and responses main- sponse. tained? f. Are responses to requests for information timely and appropriate? 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.

Guidance: This concerns management documents relating to environmental, social and legal issues that are relevant to compliance with RSPO Criteria.

Management documents will include including monitoring reports.

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CR CHECKLIST RESULTS OF VERIFICATION STATU S (C / NC / C WITH OBS.) The auditors will comment on the adequacy of each of the documents listed in the public summary of the assessment report.

Examples of commercially confidential information include financial data such as costs and income, and details relating to customers and/or suppliers. Data that affects personal privacy should also be confidential. One of legal requirements related to personal privacy is Act No. 14 year 2008 regarding Public Disclosure, clause 17 (h)

Ongoing disputes (within or outside of a law legal mechanism) can be considered as confidential information where if disclosure of information potentially causes negative impact to all related parties. However, affected stakeholders and those seeking resolution to conflict and parties who are working towards resolutions should have access to relevant information.

Examples of information where disclosure could result in potential negative environmental or social outcomes include information on sites of rare species where disclosure could increase the risk of hunting or capture for trade, or sacred sites which a community wishes to maintain as private.

Growers and millers should ensure that sufficient objective evidence exists to demonstrate that the level of measuring and monitoring of the management plan, and information, is appropriate and made available. 1.2.1 (M) Publicly available documents shall include, but are not necessarily limited to:  Land titles/user rights (Criterion 2.2);  Occupational health and safety plans (Criterion 4.7);  Plans and impact assessments relating to environmental and social impacts (Criteria 5.1, 6.1, 7.1 and 7.8);  HCV documentation (Criteria 5.2 and 7.3);  Pollution prevention and reduction plans (Criterion 5.6);  Details of complaints and grievances (Criterion 6.3);  Negotiation procedures (Criterion 6.4);  Continual improvement plans (Criterion 8.1);  Public summary of certification assessment report;  Human Rights Policy (Criterion 6.13).

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CR CHECKLIST RESULTS OF VERIFICATION STATU S (C / NC / C WITH OBS.) a. How are the management documents listed in (c) below made The company has defined accessible informations by public, i.e: the compa- C publicly available? ny's history, basic values, vision, mission, strategies, sustainability, human b. Where are the documents placed? resources, workers information, map the location, summary of the company's c. Is the information provided adequate? Note: At minimum, an in- performance, organizational structure, financial performance, CSR, OHS formation summary of the document listed below should be made matters, environment issues, waste, awards and certifications. available.  Land titles/user rights (Criterion 2.2) Otherwise, there are informations can not accesed directly by public, but re- - Legal boundaries ,land use, classification, total area, grant ported to relevant authorized ageny, i.e.: environmental management and title, permit validity , NCR rights, monitoring plan, hazardous waste activities, production plan, etc. The com-  Occupational health and safety plans (Criterion 4.7); pany also has defined confidential information and cannot accessed by pub- - risk assessment and mitigation ,emergency response plan, lic such as marketing strategy, assessment of employee performance, busi- training, accident records ness development strategy, etc.  Plans and impact assessments relating to environmental and social impacts (Criteria 5.1, 6.1, 7.1 and 7.8); Based on interviews with village head and community (Aek Salabat Village), - main social and environmental impacts and mitigation known that the villagers understand how to obtain information from the com- measures, pany. The company maintains records of request for information and re-  HCV documentation (Criteria 5.2 and 7.3); sponses under “Logbook Komunikasi” on each unit management. Based on - identification on HCV areas, maps, management and moni- document verification, that’s known no information request from stakehold- toring HCV ers. There are showed sample of request from villagers (relief fund) and the  Pollution prevention and reduction plans (Criterion 5.6); company has been follow up these request. - identification of pollutants, management and reduction measures

 Details of complaints and grievances (Criterion 6.3); - nature of complaints, parties involved, status of case  Negotiation procedures (Criterion 6.4); - SOP, consultative, neutral, inclusiveness, timeframe, responsibility  Continual improvement plans (Criterion 8.1); - for all elements under 8.1,  Public summary of certification assessment report; - follow RSPO format  Human Rights Policy (Criterion 6.13). - policy statement should comply to the requirements of 6.13 d. Do the management documents contain monitoring plans and reports? e. Are all monitoring reports publicly available? 1.3 Growers and millers commit to ethical conduct in all business operations and transactions.

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CR CHECKLIST RESULTS OF VERIFICATION STATU S (C / NC / C WITH OBS.) 1.3.1 There shall be a written policy committing to a code of ethical conduct and integrity in all operations and transactions along with the documentation of socialisation process of the policy, which shall be documented and communicated to all levels of the workers workforce and operations.

Guidance: All levels of the operations will include contracted third parties (e.g. those involved in security).

The policy of ethical conduct and integrity should include as a minimum:  A respect for fair conduct of business;  A prohibition of all forms of corruption, bribery and fraudulent use of funds and resources;  A proper disclosure of information in accordance with applicable regulations and accepted industry practices.

The policy should be set within the framework of the UN Convention Against Corruption, in particular Article 12.

Regulations that are related to eradication of corruption are as followings: 1. Act No. 7 year 2006 regarding Ratification of United Nations Convention Against Corruption 2. Act No.8 year 2010 regarding Prevention and Eradication of Money Laundry. 3. Act No. 13 year 1999 regarding Eradication of Corruption. 4. Presidential Instruction No.1 year 2013 regarding Action for Corruption Prevention and Eradication

Normal business is the business that complies with all existing regulations.

This written policy should be communicated to the affected parties

a. Is there a written policy committing to a code of ethical conduct The company has established a policy namely “Kebijakan Code of Coundact. C and integrity in all operations and transactions? The policy signed by General Manager dated 16 January 2019. In the policy b. Does the policy include as a minimum: was decribeb commitment of the organization to ethi-cal conduct in all their  A respect for fair conduct of business? operation. There is sufficient evidence that the policy has communicated  A prohibition of all forms of corruption, bribery and fraudulent and understood by all personnel within the company. use of funds and resources?  A proper disclosure of information in accordance with applica- Company has also documented specific policy regarding Ethical Code in ble regulations and accepted industry practices? February 2017. There is evidence that the code of conducts has com- c. Is the policy documented and communicated to all levels of the municated to all levels of the workforce and stakeholders. Interview with workforce and operations, including contracted third parties? How stakeholders’ result found that suppliers don’t have to pay to be PT BSP is it communicated? partner. They only have to follow the Company’s Procedure regarding busi- d. Are the documentation and communication done in the appropri- ness partnership. Interview result with worker found that there is no such as ate languages? collusion issue regarding the worker recruitment and/or mutation process. They stated that it was easy for them to join as a worker in PT BSP. Note to auditor :

The workforce should be interviewed to determine level of understanding of policy

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North Sumatera Province

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CR CHECKLIST RESULTS OF VERIFICATION STATU S (C / NC / C WITH OBS.)

Principle 2: Compliance With Applicable Laws and Regulations

2.1 There is compliance with all applicable local, national and ratified international laws and regulations.

Guidance: Implementing all legal requirements is an essential baseline requirement for all growers whatever their location or size. Relevant legislation includes, but is not limited to: a. Land use period and right b. Labour c. Agricultural practices (e.g. chemical use) d. Environment (e.g. wildlife, pollution, environmental management and forestry) e. Storage f. Transportation and processing practices.

Rregulations governing land tenure and land-use rights, labour, agricultural practices (e.g. chemical use), environment (e.g. wildlife laws, pollution, environmental management and forestry laws), storage, transportation and processing practices. It also includes laws made pursuant to a country’s obligations under international laws or conventions (e.g. the Convention on Biological Diversity (CBD), ILO core Conventions, UN Guiding Principles on Business and Human Rights). Furthermore, where countries have provisions to respect customary law, these will be taken into account.

It also includes laws made pursuant to a country’s obligations under international laws or conventions (e.g. the Convention on Biological Diversity (CBD), ILO core Conventions, UN Guiding Principles on Business and Human Rights). Furthermore, where countries have provisions to respect customary law, these will be taken into account

Key international laws and conventions are set out in Annex 1

Legal requirements are existing laws and regulations some of which are set out in Annex 1.

Contradictions and inconsistencies should be identified and solutions suggested. 2.1.1 (M) Evidence of compliance with relevant legal requirements shall be available.

a. Is the complete list of legal requirements available? (Refer The company (Estate and Mill) has list of legal and other requirements pre- NCR to relevant NIs or LIs for list of legal requirements) sented in list of regulation and law covering plantation, OSH, labor, and envi- RSPO0 b. Does the company have copies of the legal requirements? ronmental sections. The law and regulation is including relevant laws, gov- 2509 ernment regulations, Instruction of President, Minister Regulations, Local Note to auditor : Regulations, and Governor Regulations etc. All copies of law and regulations A due diligence on the company/area or management unit on legal is available and maintained and the company has a record of list and regula- compliance should be conducted prior to field audit. Any non- tion document, already mentioned regulation and law should to fulfill by compliance should be verified during the field audit. company. POM and supply based also has record of regulation compliance,

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CR CHECKLIST RESULTS OF VERIFICATION STATU S (C / NC / C WITH OBS.) Relevant legislation includes, but is not limited to: regulations govern- The company has not fulfill some regulation such as: ing land tenure and land-use rights, labour, agricultural practices (e.g.  Permenakertrans No.09/MEN/VII/2010 about operator chemical use), environment (e.g. wildlife laws, pollution, environmental management and forestry laws), storage, transportation and pro- and officer of lifting equipment article 5 where the lifting cessing practices. It also includes laws made pursuant to a country’s equipment shall operated by operator which have OSH obligations under international laws or conventions (e.g. the Conven- license and work book in accordance with type and qual- tion on Biological Diversity (CBD), ILO core Conventions and UN ification i.e. M. Yakub (license has expired) Guiding Principles on Business and Human Rights.  Permenaker No.01 year 1988 about qualification and re-

quirement for operator of steam enginee on behalf War- sito, Abdul Karim Nasution and Rifani (license has expired)  Permentan No. 24 year 2011 about requirement and mechanism of pesticide registeration article 9  Based on field verification found the content of first aid kit box does not accordance with Permenaker No.15 year 2008 (Gurach Batu estate, Serbangan estate and Sei Baleh estate) and found the content of first aid kit has been expired  During field verification to temporary storage of hazardous and toxic waste (Gurach Batu estate, Sei Baleh estate and Serbangan estate) found hazardous and toxic waste does not equipped with symbol and label of hazardous and toxic waste in accordance with PermenLH No.14 year 2013 2.1.2 A documented system, which includes written information on legal requirements, shall be maintained.

a. Is there a document system which includes the following? The company (Estate and Mill) has list of legal and other requirements pre- C - Personnel in charge to manage sented in list of regulation and law covering plantation, OSH, labor, and envi- - Set of legal documents ronmental sections. The law and regulation is including relevant laws, gov- - Comprehensive list of international, national, sub-national and ernment regulations, Instruction of President, Minister Regulations, Local provincial laws which details the requirements of specific to the Regulations, and Governor Regulations etc. All copies of law and regulations mill and estate operations. is available and maintained and the company has a record of list and regula- - Relevant sections within the law that is identified and linked to tion document, already mentioned regulation and law should to fulfill by activities company. POM and supply based also has record of regulation compliance, b. Are the documents available to all levels of management?

2.1.3 A mechanism for ensuring compliance shall be implemented.

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CR CHECKLIST RESULTS OF VERIFICATION STATU S (C / NC / C WITH OBS.) Is an internal audit for legal compliance conducted annually and doc- The audit checklist covered the implementation of the all applied regulations. C umented? Status of compliance with the applicable environment, OHS, plantation, labour, social laws and regulations were evaluated, and evaluation of compliance result indicated that compliance status was justified with reference to the objective evidence of compliance. RSPO Internal audit related to legal compliance has been performed by organisation annually. 2.1.4 A system for tracking any changes in the law shall be available and implemented.

Specific Guidance:

For 2.1.4: The systems used for tracking any changes in laws and regulations should be appropriate to the scale of the organisation. Is there a documented methodology (e.g.: personnel in charge (PIC), The company maintained and updated a list of applicable legal and other re- C source of info, frequency of update) for tracking changes and com- quirements, that consist of environmental field, OHS Fields, RSPO & ISPO munication of changes to relevant sections of the legislation? related. There is evidence that the organization has evaluated the compliance of their estates to these legal requirements according to their company procedures as documented in their SOPs 2.2 The right to use the land is demonstrated, and is not legitimately contested by local people who can demonstrate that they have legal, customary or user rights.

Guidance : The company has SOP for Land Acquisition to ensure that there is no removal of legal, customary or user rights (see 6.4.1 & 6.4.2) Descriptions of those rights are as follows: a. Legal Right may be in the form of Land Certificates (Ownership Right / Hak Milik, User Right /Hak Guna Usaha), Registration Letter / Surat Keterangan Terdaftar, Letter of Inheritor Right / Surat Keterangan Hak Waris, and or Letter of Girik Right/Surat Keterangan Hak Girik. b. Customary Right in the Local Regulation/Perda (based on Con- stitution Court Decision No. 35/PUU-X/2012 regarding Custom- ary Forest) determined through participatory mapping of customary land by the legitimate customary law community who are recognized by the surrounding customary law community and refers to Regulation of the Minister of Home Affairs (Permendagri) No. 52 year 2014 regarding Guideline of Recognition and Pro- tection of Customary Law Community and Regulation of the State Minister of Agrarian Affairs/Head of National Land Agency (BPN) No. 5 year 1999 regarding Guidelines for the Settlement of Problems Related to the Communal Reserved Land of the Customary Law Abiding Community. c. User Right may be in the form of evidence of land leasing from the legal right holder, and/or official letter from the Village Head QMF: RSPO-007a-18(Rev.4.April 2019) RSPO Surveillance Assessment] Report PT Bakrie Sumatera Plantation – Kisaran Palm Oil Mill –

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CR CHECKLIST RESULTS OF VERIFICATION STATU S (C / NC / C WITH OBS.) based upon testimony of communities or individual where their areas are adjacent to that land.

Customary area is customary land, including soil, water and or waters and natural resources with certain boundaries, owned, utilized and preserved for generations and on sustainable basis to fulfill the needs of their livelihood that was acquired from their ancestor or claimed ownership of communal land or customary forest.

Where there is a conflict on the condition of land use as per land title, growers should show evidence that necessary action has been taken to resolve the conflict with relevant parties.

A mechanism should be in place to resolve any conflict (Criteria 6.3 and 6.4).

Where operations overlap with other rights holders, companies should resolve the issue with the appropriate authorities, consistent with Criteria 6.3 and 6.4.

Historical data of land ownership should be provided by the company for a minimum of one period of ownership/control.

If there is a claim on customary right, this shall be legally demonstrated. 2.2.1 (M) Documents showing legal ownership or lease, history of land tenure ownership/control and the actual legal use of the land shall be available.

Specific Guidance:

For 2.2.1: The documents required to demonstrate legal ownership, lease or control and use of land shall include those related to getting the land permit or transfer of land right and up to the operational right.

a. Are there documents showing legal ownership or lease of the land Consistent with the previous audit (ASA-04), the company has record of C available? (e.g. land titles, lease documents) legal ownership of land i.e: b. Are there documents showing history of land tenure available?  Minister Decree of State Agrarian Affairs / Head of National Land Agen- (e.g. legal documents showing land status change, SIA and EIA cy No: 66/HGU/DA/85/B/51 dated 13 November 1996 about granting of reports, HCV assessment reports) land use permits to PT. Bakrie Sumatera Plantations as large as c. Are there documents showing the actual legal use of the land 18,556.01 hectares located in Kisaran, North Sumatra Province. available?  Certificate of land use permit No.2 dated 1 May 1997 located in Kisaran d. Are the documents complete? Timur village, Kota Kisaran Timur Sub District, Asahan District, North Sumatra Province as large as 18,517.76 hectares. Based on the historical of the certificate that the company has been release of land as large as 25.6 ha from the total land as large as 18,556.01 ha.

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CR CHECKLIST RESULTS OF VERIFICATION STATU S (C / NC / C WITH OBS.) 2.2.2 Legal boundaries are demonstrated shall be clearly demarcated and visibly maintained.

Specific Guidance:

For 2.2.2: Grower Plantation operations should cease operations on land planted beyond the legally determined area and there should be specific plans in place to address such issues for associated smallholders. a. Is there a legal map showing location of boundary markers? The company has procedure of identification and maintenance of pillars HGU C b. Is there physical presence of boundary markers? (BMH-09 revision 00 effective dated 30 June 2016). The procedure regulated c. Is there an SOP for boundary demarcation and maintenance? about maintenance of pillars HGU conducted every once a year. The company has been conduct regularly monitoring and maintenance that equipped Note to auditor : with minutes of monitoring and maintenance. The company has map that de- Ground verification of boundary markers using GPS should be con- scribe about legal boundry which issued by National Land Agency. Based on ducted. Priority should be on boundaries with other estates, commu- field visit on pillar of HGU (BPN 059) at Kuala Piasa Estate, the pillar in good nity areas, protected area and rivers condition and well maintained.

In the case of Associated Smallholders: Kuala Piasa estate has monitoring of pillar HGU every year. There is evi- a. Are there documents showing that the boundaries of associated dence monitoring year 2019 at division 1 kuala paisa estate with result good smallholders have been recorded and verified by the mill? condition and well maintained b. In case of boundary breach, is there proof of a mitigation plan being implemented? Gurarch Batu estate has monitoring of pillar HGU every year. There is evidence monitoring year 2019 at Gurarch Batu estate with result good condition and well maintained for pillar no 1-24.

Sei Baleh estate has monitoring of pillar HGU every year. There is evidence monitoring year 2019 at Sei Baleh estate with result good condition and well maintained for pillar at block 96401.

2.2.3 In the event that there is a Where there are or have been disputes has occurred, adequate evidence of legitimate additional proof of legal acquisition of title and evidence that fair compensation or compensation settlement process through conflict resolution which has been received through made to previous owners and occu- pants shall be available, and that these have been accepted with free, prior and informed consent (FPIC) by all related parties shall be provided. a. Are there, or have there been any land disputes? During in 4rd surveilence audit, there is no land dispute in company’s area NCR Note to auditor: and member of the surroundings community. The last conflict was between RSPO0 Due diligence should be conducted on the management to provide the company and Tinggi Raja community (Tinggi Raja sub district, Asahan 2510 evidence that there has been no historical or current land dispute district) which had been resolved and the result accepted by both parties. b. If there are or have been disputes, are there: - Documents to proof legal acquisition? Based on field visits and interviews with plantation agencies and surrounding - Records of FPIC process? communities, there is currently no land dispute between the company and c. If there has been acquisition involving compensation, are there: other parties. - Records that Fair compensation has been provided and accepted by parties involved? QMF: RSPO-007a-18(Rev.4.April 2019) RSPO Surveillance Assessment] Report PT Bakrie Sumatera Plantation – Kisaran Palm Oil Mill –

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CR CHECKLIST RESULTS OF VERIFICATION STATU S (C / NC / C WITH OBS.) - Records that all affected parties are consulted and represent- Policy related to the prohibition on the use of mercenaries in plantation oper- ed? ations are still the same as previous assessments. The company has a poli- - Documents of negotiations/discussion available? cy regarding the prohibition of the Use of Mercenaries or Paramilitaries in Es- tate Operations. Based on field visits, it is known that there was no indication Note to auditor : of the use of mercenaries in the operations of the plantation. There should be direct verification of above with the affected parties The company can not showing an evidence about document of previous landownership. This condition raised as Non-conformity

2.2.4 (M) There shall be an absence of significant land conflict, unless requirements for acceptable conflict resolution processes (see Criteria 6.3 and 6.4) are implemented and accepted by the parties involved. a. Does the company have cases of significant land conflict? (i.e. During in 4rd surveilence audit, there is no land dispute in company’s area C preventing the company from operating normally) and member of the surroundings community. The last conflict was between b. If the company has cases of conflict, are records of the following the company and Tinggi Raja community (Tinggi Raja sub district, Asahan available? district) which had been resolved and the result accepted by both parties. - Status of conflict - SOP/ mechanism for conflict resolution Based on field visits and interviews with plantation agencies and surrounding - Implementation of SOP/mechanism communities, there is currently no land dispute between the company and - Acceptance of the procedures by all parties other parties. - Records of conflict resolution

Policy related to the prohibition on the use of mercenaries in plantation operations are still the same as previous assessments. The company has a policy regarding the prohibition of the Use of Mercenaries or Paramilitaries in Estate Operations. Based on field visits, it is known that there was no indication of the use of mercenaries in the operations of the plantation.

2.2.5 For any conflict or dispute over the land, the evidende of the extent of the disputed area is shall be mapped out in a participatory way with involvement of affected parties (including neighbouring communities and local government where applicable), shall be available. a. Is there an SOP for participatory mapping of disputed area? During in 4rd surveilence audit, there is no land dispute in company’s area C b. Is a dispute map available? and member of the surroundings community. The last conflict was between c. Is there documented evidence of involvement and acceptance by the company and Tinggi Raja community (Tinggi Raja sub district, Asahan the affected parties? district) which had been resolved and the result accepted by both parties.

Note to auditor : Based on field visits and interviews with plantation agencies and surrounding Actual ground verification showing the accuracy of the dispute map communities, there is currently no land dispute between the company and should be conducted other parties.

Policy related to the prohibition on the use of mercenaries in plantation operations are still the same as previous assessments. The company has a

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CR CHECKLIST RESULTS OF VERIFICATION STATU S (C / NC / C WITH OBS.) policy regarding the prohibition of the Use of Mercenaries or Paramilitaries in Estate Operations. Based on field visits, it is known that there was no indication of the use of mercenaries in the operations of the plantation.

2.2.6 (M) To avoid escalation of conflict, there shall be no evidence that palm oil operations have instigated violence in maintaining peace and order in their current and/or planned operations. Specific Guidance:

For 2.2.6: The Company policy should require prohibit the use only of legally recognized private security personnel in their operations and of mercenaries and paramilitaries in their operations. Company policy should prohibit extra-judicial interference and intimidation and harassment by contracted security personnel as mentioned above forces (see Criterion 6.13). a. Does the company have a policy to circumvent instigated violence During in 4rd surveilence audit, there is no land dispute in company’s area C to maintain peace and order in current and planned operations? and member of the surroundings community. The last conflict was between b. Is there any evidence of: the company and Tinggi Raja community (Tinggi Raja sub district, Asahan - The use of confrontation and intimidation by the company to district) which had been resolved and the result accepted by both parties. maintain peace and order? - Use of para-militaries and mercenaries in the plantation? Based on field visits and interviews with plantation agencies and surrounding communities, there is currently no land dispute between the company and other parties.

Policy related to the prohibition on the use of mercenaries in plantation operations are still the same as previous assessments. The company has a policy regarding the prohibition of the Use of Mercenaries or Paramilitaries in Es- tate Operations. Based on field visits, it is known that there was no indication of the use of mercenaries in the operations of the plantation.

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

Guidance: All indicators are applied to all oil palm plantations developed after November 2005, with exception to plantations developed prior to November 2005 that will apply to current operations, but there are exceptions for long-established plantations which may not have records dating back to the time of the decision making, in particular for compliance with Indicators 2.3.1 and 2.3.2.

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CR CHECKLIST RESULTS OF VERIFICATION STATU S (C / NC / C WITH OBS.) Where there are legal or customary rights over land, the grower should demonstrate that these rights are understood and are not being threatened or reduced. These Criteria This Criterion should be considered in conjunction with Criteria 6.4, 7.5 and 7.6. Where customary rights areas are unclear, these should be established through participatory mapping exercise exercises involving affected parties (including neighbouring communities and local authorities).

This Criterion allows for sales and negotiated agreements to compensate other users for lost benefits and/or relinquished rights. Negotiated agreements should be non- coercive and entered into voluntarily, carried out prior to new investments or operations, and based on an open sharing of all relevant information. The representation of communities should be transparent and in open communication with other community members. Adequate time should be given for customary decision making and iterative negotiations allowed for, where requested. Negotiated agreements should be binding on all parties and enforceable in the courts. Establishing certainty in land negotiations is of long-term benefit for all parties.

Companies should be especially careful where they are offered lands acquired from the State by its invoking the national interest (also known as ‘eminent domain’).

Growers and millers should refer to the RSPO approved FPIC guidance (RSPO endorsed Free, Prior and Informed Consent Guide for RSPO Members, November 2015 ‘FPIC and the RSPO: A Guide for Companies’, October 2008) 2.3.1 (M) Maps with of an appropriate scale showing the extent of recognised legal, customary or user rights (Criteria 2.2, 7.5 and 7.6) shall be developed through participatory mapping involving affected parties (including neighbouring communities where applicable, and relevant authorities). a. Does the company have an SOP on FPIC? However the company has SOP Free Prior and Informed Consent No. Doc. C b. Is there evidence that the identification of legal, customary or BMH-06, Rev. 00, on Juny 13, 2016. Within the SOP described FPIC stages, user rights has been done through FPIC process? those are: Identification of customary lands, Involving the communi-ty institu- c. Is there evidence that the FPIC process has been implemented tions, Delivering information, Ensure that the consent was given voluntarily, in accordance to the company SOP? Where is this evidence Guarantee that the approval was given before operations, Ensure that there recorded? (E.g.: Documents, Minutes of meeting, Records, is an agreement, Resolve con-flicts, Negotiation, Finalization of the written Agreements, Maps etc.) agreement. d. Is there a map of the extent of legal, customary or user rights? Is this map of appropriate scale (1: 10,000)? The company has a Procedure Identifying the Parties Entitled to Receive e. Was the map produced through participatory mapping with ref- Compensation Document No. RSP- 01 dated 11 april 2011, Revision 1. The erence to SIA and HCV assessment? procedures that guarantee the implementation of the identification of the par- f. Does the map have a title, legend, source, scale and projec- ties entitled to receive compensation for damages crops, plants and buildings tions/georeference? to obtain the concession for the company. g. Are the maps accepted by the relevant communities?

2.3.2 Copies of negotiated agreementsincluding detailing the process of free, prior and informed consent (FPIC) (Criteria 2.2, 7.5 and 7.6) shall be available and these shall include: a) Evidence of that a plan has been developed through consultation and discussion with all affected groups in the communities, and that information has been provided to all affected groups, including information on the steps that shall be taken to involve them in decision making; b) Statement of transfer of rights Evidence that the company has respected communities’ decisions to give or withhold their consent to the operation at the time that this decision was taken; c) Evidence of compensation that the legal, economic, environmental and social implications for permitting operations on their land have been understood and accepted by affected communities, including the implications for the legal status of their land at the expiry of the company’s title, concession or lease on the land. See specific guidance 2.3.2 QMF: RSPO-007a-18(Rev.4.April 2019) RSPO Surveillance Assessment] Report PT Bakrie Sumatera Plantation – Kisaran Palm Oil Mill –

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Specific Guidance: For 2.3.2 : Copies of negotiated agreements shall include at minimum: a. A plan that should be developed through consultation and discussion with all affected groups in the communities, and that information has been provided to all affected groups, including information on the steps that shall be taken to involve them in decision making; b. Evidence that the company has respected communities’ decisions to give or withhold their consent to the operation at the time that this decision was taken; c. Evidence that the company has ensured that affected communities have understood and accepted the legal, economic, environmental and social implications for permitting operations on their land, including the implications for the legal status of their land at the expiry of the company’s title or concession. The company shall inform the legal implication based upon, but not limited to, Act No. 50 year 1960 and Government Regulation No. 40 year 1996 regarding Land-Use Right (HGU), Building- Use Right (HGB), and User Right, where the land will be owned by the state if HGU right is expired, not be extended and or updated. d. Evidence that the company has informed the plan for partnership program.

a. Are copies of negotiated agreements with affected parties There are no maps of indigenous communities because in the area of PT C available? BSP there is no customary rights community. The company’s Palm Oil Plan- b. Is there evidence that the agreement is prepared through tation built by the Dutch since 1911, thus the documents related to public proper FPIC process? land compensation is not available anymore. Based on interviews with peo- c. Does the agreement contain the following: ple around the PT BSP note that there is no public denial of the existence of - An action plan developed through consultation with af- oil palm plantations. The Society helped with the plantation companies, es- fected parties, is inclusive and evidence that members pecially in terms of employment. Evidence of the agreement is no longer of affected parties are well informed and involved in available given the document storage period has exceeded 30 years so it has the decision making process been destroyed. - Evidence of options to give or withhold consent for development - Evidence that members of the affected communities understand and accept the implication involved in permitting/rejecting oil palm development on their land (E.g.: legal status, social, environmental, economic) QMF: RSPO-007a-18(Rev.4.April 2019) RSPO Surveillance Assessment] Report PT Bakrie Sumatera Plantation – Kisaran Palm Oil Mill –

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CR CHECKLIST RESULTS OF VERIFICATION STATU S (C / NC / C WITH OBS.) - Evidence that the negotiated agreement was entered voluntarily without coercion by all parties - Evidence that adequate time was given for customary decision making and iterative negotiations - Clause which states that the negotiated agreement is legally binding

2.3.3 All relevant information shall be available in appropriate forms and languages, including analysis assessments of impacts, proposed benefit sharing, and legal arrangements. Is there evidence that all the information (maps, agreement, records, There are no maps of indigenous communities because in the area of PT C impact assessment, benefit sharing and legal arrangements) is avail- BSP there is no customary rights community. The company’s Palm Oil Plan- able in appropriate forms and languages, understood and accessible tation built by the Dutch since 1911, thus the documents related to public to affected parties? land compensation is not available anymore. Based on interviews with people around the PT BSP note that there is no public denial of the existence of Note to auditor: oil palm plantations. The Society helped with the plantation companies, es- This should be cross checked to a sample of the affected parties pecially in terms of employment. Evidence of the agreement is no longer available given the document storage period has exceeded 30 years so it has been destroyed.

2.3.4 (M) Evidence shall be available to show that communities are represented through institutions or representatives of their own choosing, including legal counsel.

Specific Guidance: For 2.3.4: Evidence of proxy letter from the community group, individual and/or company to the institution which represents community at the negotiation process, shall be demonstrated should be available from the companies, communities or other relevant stakeholders. a. Who is the representative of the community in the negotia- There are no maps of indigenous communities because in the area of PT C tion process? BSP there is no customary rights community. The company’s Palm Oil Plan- b. Is the representative accepted by the community? tation built by the Dutch since 1911, thus the documents related to public c. Is the record of appointment to represent the community land compensation is not available anymore. Based on interviews with peo- available and shared with other parties? ple around the PT BSP note that there is no public denial of the existence of oil palm plantations. The Society helped with the plantation companies, especially in terms of employment. Evidence of the agreement is no longer available given the document storage period has exceeded 30 years so it has been destroyed. 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. Guidance:  Whilst it is recognised that long-term profitability is also affected by factors outside their direct control, top management should be able to demonstrate attention to economic and financial viability through long-term management planning. There should be longer term planning for plantations on peat, particularly in regards to subsidence and flooding issues (see Indicator 4.3.5).

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CR CHECKLIST RESULTS OF VERIFICATION STATU S (C / NC / C WITH OBS.)  Consideration of smallholders should be inherent in all management planning where applicable (see also Criteria 6.10 and 6.11). For scheme smallholders the company should the content will vary from that suggested (refer to RSPO Guidance on Scheme Smallholders, July 2009 or endorsed final revision).  Growers should have a system to improve practices in line with new information and techniques. For smallholder schemes, the scheme management should be expected to provide their members with information on significant improvements. This Criterion is not applicable to independent smallholders (refer to RSPO Guidance for Independent Smallholders under Group Certification, June 2010) 3.1.1 (M) A documented A business or management plan (a minimum of three years) shall be available, including documented that includes, where appropriate, plan a business case for scheme smallholders.

Specific Guidance: For 3.1.1: The business or management plan should contain:  Attention to quality of planting materials;  Crop projection = Fresh Fruit Bunches (FFB) yield trends;  Mill extraction rates = Oil Extraction Rate (OER) trends;  Cost of Production = cost per tonne of Crude Palm Oil (CPO) trends;  Forecast prices;  Financial indicators.

Suggested calculation: trends in 3-year running mean over the last decade (FFB trends may need to allow for low yield during major replanting programs programmes). a. Does the company have a documented business or management The organization has a documented management plan as documented in the C plan with a minimum planning period of 3 years? document Budget 2019 and Strategic Plan 2017 – 2021 (including achieve- b. Does it include the following: ment data 2018 and 2019 estimation). The document was included, i.e.: - Land area statement (planting years, non-planted areas, i.e.  Operational Data Palm (Hectare planted; Yield/Ha; Field Produc- HCV, conservation areas, fragile soils, enclaves) with updated tion; FFB Put Into Process; Extraction Rate; Factory Production; location maps. Maps should have title, legend, source, scale Mill Utilization; Sales Volume. and projections/georeferenced  Field Cost (Ha Mature; Field Production; Field Cost – Amount; Field - Plan for management of scheme smallholders (where appro- Cost per Ha; Field Cost per ton. priate)  Processing Cost (Factory Production; Processing Cost Amount; - Quality of planting materials Processing Cost per Kg. - Crop projection = Fresh Fruit Bunches (FFB) yield trends  Purchase Cost (Raw Mat’l and Finished Goods/Trading Purchase - Mill extraction rates = Oil Extraction Rate (OER) trends  Cost of Goods Solds (Sales Volume, Production Cost, FFB Pur- - Cost of Production = cost per tonne of Crude Palm Oil (CPO) chase, Processing Cost; Total Cost of Manufactured, and etc). trends  Capital Expenditure (Plantations and Non Plantations). - Forecast prices  Statements of Income (Revenue, COGS, Gross Profit; Operating - Financial indicators – profitability forecast (income vs cost) Expenses, Operating Profit, EBITDA, Income Before Tax, Net In- - Projected expansion (area, mill capacity, infrastructure, social come and etc). amenities)  Balance Sheet that showing financial indicators – profitability fore- - General strategy and allocation for environmental and social cast. management (refer to P5, P6 and P8) The company has defined replanting plan for year 2017 - 2020 for estate c. Is this management document subjected to an annual review? supplied to Kisaran POM. Its plan will review its replanting program every QMF: RSPO-007a-18(Rev.4.April 2019) RSPO Surveillance Assessment] Report PT Bakrie Sumatera Plantation – Kisaran Palm Oil Mill –

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CR CHECKLIST RESULTS OF VERIFICATION STATU S (C / NC / C WITH OBS.) d. For plantations on peat, is there a long term viability plan – e.g. year according condition and company’s financial capability. flooding, drainability assessments and subsidence issues? (see 4.3.5) e. Does the grower have a system to improve practices in line with new information and techniques? - Has the personnel in charge (PIC) been identified? - How is the information updated? - Is there a documented SOP which requires monitoring and updating information to improve practices? - Is new information communicated to workers and scheme smallholders (where appropriate)? How is it communicated?

3.1.2 An annual replanting program programme projected for a minimum of five years (but longer where necessary to reflect the management of fragile soils, see Crite- rion 4.3), with yearly review, shall be available. a. Is there an annual replanting programme projected for a minimum The organization has a documented management plan as documented in the C of five years? document Budget 2019 and Strategic Plan 2017 – 2021 (including achieve- b. Has it been documented? ment data 2018 and 2019 estimation). The document was included, i.e.: c. Is the progress of implementation documented?  Operational Data Palm (Hectare planted; Yield/Ha; Field Produc- d. How does the programme take into consideration fragile soils tion; FFB Put Into Process; Extraction Rate; Factory Production; such as peat? Is there a longer projection period (see C4.3)? Mill Utilization; Sales Volume. e. Is there evidence of a yearly review of the replanting programme?  Field Cost (Ha Mature; Field Production; Field Cost – Amount; Field Cost per Ha; Field Cost per ton.  Processing Cost (Factory Production; Processing Cost Amount; Processing Cost per Kg.  Purchase Cost (Raw Mat’l and Finished Goods/Trading Purchase  Cost of Goods Solds (Sales Volume, Production Cost, FFB Pur- chase, Processing Cost; Total Cost of Manufactured, and etc).  Capital Expenditure (Plantations and Non Plantations).  Statements of Income (Revenue, COGS, Gross Profit; Operating Expenses, Operating Profit, EBITDA, Income Before Tax, Net In- come and etc).  Balance Sheet that showing financial indicators – profitability forecast.

Principle 4: Use of Appropriate Best Practices by Growers and Millers

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CR CHECKLIST RESULTS OF VERIFICATION STATU S (C / NC / C WITH OBS.) 4.1 Operating procedures are appropriately documented, consistently implemented and monitored.

Guidance:

Mechanisms to check implementations could include documentation management systems and internal control procedures.

These procedures refer to the Best Management Practices for Oil Palm in Indonesia, such as Technical Guideline for Oil Palm Development, Directorate General of Estate Crops, Ministry of Agriculture, 2006. 4.1.1 (M) Standard Operating Procedures (SOPs) for estates (land clearing to harvesting) and SPO for mills (reception of FFB to dispatch of CPO and PKO) shall be available documented.

Specific Guidance:

For 4.1.1 and 4.1.4: SOP and documentation for mills should include relevant supply chain requirements (see RSPO Supply Chain Certification Standard, Nov 2011). a. Have the SOPs for mills and plantation been documented? The mill and estate has Standard Operating Procedures (SOPs) that covers NCR b. Does the SOP cover key processes, harvesting, transportation, all aspects of oil palm planting and management contains the following RSPO0 manuring, IPM, GAP, Supply Chain requirements for the mill, SOPs that cover all estate operations such as Nursery Practice, Land Clear- 2511 etc.? ing, Preparation and Planting, Soil Conservation and Terracing, Road Con- c. Is a copy of the SOP available on site and is it documented in an struction and Maintenance, Establishment and Maintenance of Legume Co- appropriate language? vers, Planting Density and Planting Technique, Palm Replacement During d. Is there evidence that SOPs are implemented and understood by Immaturity and Supplying, Upkeep of Immature Oil Palms, Upkeep of Mature workers? Oil Palms, Pests & Diseases, Manuring, EFB Application, Harvesting, Bunch e. Are the SOPs appropriate and adequately cover all estate and Census and Palm Thinning. mill processes and activities? f. How are the SOPs made available at the point of use? The palm oil mill has SOPs covering all mill operations such as FFB Grading, Sterilization Station, Press Station, Threshing Station, Oil Room, Kernel Plant, Laboratory, CPO & PK Despatch, Engine Room, Boiler Room, Electri- cal, Workshop as well as Raw and Boiler Water Treatment Plant.

Based on document verification known that estate conduct temporary keeping of hazardous and toxic waste at temporary storage of hazardous and toxic waste in the estate more than 30 days where this is not accordance with Procedure of waste management (BMA-12 revision 02 issued date 14 March 2017) (Gurach Batu estate and Serbangan estate). This condition raised as Non-conformity (NCR RSPO 02511)

4.1.2 Checking or monitoring of opreations procedure is conducted at least once a year A mechanism to check consistent implementation of procedures shall be in place.

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CR CHECKLIST RESULTS OF VERIFICATION STATU S (C / NC / C WITH OBS.) a. Is there a master list of all SOPs? In order to ensure consistent implementation of the SOPs among all levels of C b. How does the company keep track of revisions? the workforce in the field, the following mechanisms are internal audit. Rec- c. Is there mechanism for: ords of monitoring and any actions taken has maintained and available. - Translation of SOP into work instructions in appropriate languages? - Records of training for all levels? - Internal control (e.g. audit and review, field inspection) procedure in place to monitor consistent implementation of SOPs? - Trained and competent personnel assigned to carry out internal control activities? - Implementation audits to be carried out regularly covering implementation of all the SOPs? d. Procedure to address non-compliance and corrective action for continuous improvement? 4.1.3 Records of monitoring and any follow up actions taken shall be maintained and available, as appropriate.

a. Have the records been maintained on the following? See above C - Measurements or results of internal control and monitoring activities (refer 4.1.2) - Records of corrective actions and improvement undertaken

4.1.4 (M) The mill shall records the origins of all third-party FFB sourced (collector, deliver, Cooperative, Farmers Association and outgrower) Fresh Fruit Bunches (FFB) shall be available.

Specific Guidance:

For 4.1.1 and 4.1.4: SOP and documentation for mills should include relevant supply chain requirements (see RSPO Supply Chain Certification Standard, Nov 2011). a. Is there an SOP for third-party FFB sourcing? It has been verified that there is no 3rd party FFB received by the mill. The C b. Is there a list of approved third-party FFB suppliers? mill has record the origins of all third-party sourced Fresh Fruit Bunches c. Is there proof of observed implementation of SOP? (FFB). d. Is there daily and summary records of volume and origins of third-party FFB received? e. Have these records been verified against the available document?

4.2 Practices maintain soil fertility at, or where possible improve soil fertility to, a level that ensures optimal and sustained yield.

Guidance: Long-term fertility depends on maintaining the structure, organic matter content, nutrient status and microbiological health of the soil. Growers should ensure that they QMF: RSPO-007a-18(Rev.4.April 2019) RSPO Surveillance Assessment] Report PT Bakrie Sumatera Plantation – Kisaran Palm Oil Mill –

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CR CHECKLIST RESULTS OF VERIFICATION STATU S (C / NC / C WITH OBS.) follow the best practices. Nutrient efficiency should take account of the age of plantations and soil conditions. The nutrient recycling strategy should include any use of biomass for by-products or energy production.

One of the guidance may be used as a reference to the Technical Guideline for Oil Palm Development, Directorate General of Estate Crops, Ministry of Agriculture (2006)

4.2.1 (M) A record of SOP implementation to maintain There shall be evidence that good agriculture practices, as contained in Standard Operating Procedures (SOPs), are followed to manage soil fertility to a level that ensures optimal and sustained yield, shall be available where possible. Are there SOPs for Good Agricultural Practices in managing soil fertil- Practices that maintain or enhance soil fertility to ensure sustained yield are C ity? contained in fertilizer procedure (KBMEOP-WI-18 revision 02 effective date 15 July 2013). Is there evidence that the SOPs have been implemented and monitored?

4.2.2 Records of fertiliser inputs shall be available maintained.

a. Is records of fertiliser inputs maintained? Actual fertilizer applications are recorded monthly and compared against fer- C b. Is there records to proof that the fertiliser program is linked tilizer recommendations in the monthly estate manager’s report with sum- to the agronomic report? mary of reconciliation of fertilizer application schedule. Fertilizer application c. Is there records of fertilizer usage per tonne of FFB produc- schedule and records for each field is available and maintained at the re- tion (>in Summary Table, specific types of fertilizers)? spective estate offices.

4.2.3 Records of periodical leaf, soil and visual analysis shall be available There shall be evidence of periodic tissue and soil sampling to monitor changes in nutrient status. a. Is there SOPs for tissue and soil sampling? Foliar sampling is conducted on an annual basis and its results and corre- NCR b. Is there evidence of implementation of the SOPs, including sponding fertilizer recommendations. The leaf nutrient assessment to deter- RSPO0 availability of records? mine the levels of nitrogen, phosphorus, potassium, calcium, magnesium 2512 c. Is there records of tissue and soil analysis? and boron in the palms was conducted. The results of this assessment pro- d. Is the results of the study incorporated into the fertilizer provided the input for fertilizer recommendations for 2019 which is now being fol- gram? lowed by the estates. Soil analysis is also conducted on an annual basis by an external lab with soil samples taken from each estate field.

The company has been conduct leaf analysis and has a fertilizer recommendation of 1st semester and 2nd semester year 2018 but the company can not showing the fertilizer application conduct in accordance with fertilizer recommendation that has been assigned. This condition raised as Non- conformity (NCR RSPO 02512).

4.2.4 A nutrient recycling strategy is recorded, including shall be in place, and may include use of Empty Fruit Bunches (EFB), land application, Palm Oil Mill Effluent (POME), and palm residues after replanting. QMF: RSPO-007a-18(Rev.4.April 2019) RSPO Surveillance Assessment] Report PT Bakrie Sumatera Plantation – Kisaran Palm Oil Mill –

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CR CHECKLIST RESULTS OF VERIFICATION STATU S (C / NC / C WITH OBS.) a. Is there a nutrient recycling strategy in place? As part of the nutrient recycling strategy, the company use of Empty Fruit C b. Does the strategy include the following? Bunches (EFB), Palm Oil Mill Effluent (POME), and palm residues after re-  Clear objectives and time-bound targets planting. The company has record of FFB application year 2018 such as:  Inventory of  Gurach Batu estate: EFB application as much as 4,634.910 mt with - EFB total area application is 54.15 ha - POME  Kuala Piasa estate: EFB application as much as 1,795.29 mt with - Fibre total area application is 41.40 ha - Boiler ash  Serbangan estate: EFB application as much as 5,955.80 mt with - Kernel shell total area application is 104.00 ha - Palm residues from replanting  Biomass recycling program  Implementation and monitoring records Note to auditor : Ground verification required 4.3 Practices minimize minimise and control erosion and degradation of soils.

4.3.1 (M) Maps of any fragile soils shall be available.

a. Is there soil maps showing presence of fragile soils and During 4th surveilence audit, there is no change of data or map about the C problem soils (refer to 4.3.6)? fragile soil in the company. The company has a map of the land for Sei b. Are maps georeferenced and of appropriate scale Baleh Estate, Serbangan Estate, Tanah Raja Estate, Gurah Batu Estate; (1:50,000)? Kuala Piasa Estate shows mainly alluvial soil type.

Maps of soil types for all estates are available at the main office. The maps show that there are no marginal soils within the estate area and most of the estate land consists of alluvial soils and podsoils. 4.3.2 A management strategy shall be in place for plantings on slopes above a certain limit (this needs to be soil and climate specific).

Guidance: Techniques that minimize minimise soil erosion are well known and should be adopted, where appropriate. These should include practices such as ground cover management, biomass recycling, terracing, and natural regeneration or restoration instead of replanting.

Specific Guidance: For 4.3.2: Management strategy on areas planted with steep slope may refer to the Technical Guidance for Oil Palm Development, Directorate General of Estate Crops, Agriculture Ministry (2006). Area with slope of >40% shall be avoided

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CR CHECKLIST RESULTS OF VERIFICATION STATU S (C / NC / C WITH OBS.) a. Is there a management strategy in place for plantings on The company has work instructions for planting on slopes are documented C slopes? and describes methods to reduce soil erosion on slopes with ‘tapak kuda’ b. Does the management strategy include the following? (horseshoe) methods. - Identification of steep areas not suitable for planting There is no peat soil or fragile or problem soils located within the estates

- Policy of planting on slopes - SOPs to minimise soil erosion based on local soil and climate conditions, e.g. ground cover management, biomass recycling, terracing, and natural regeneration or restoration instead of replanting c. Is there proof of records of field inspection on SOP implementation? 4.3.3 A road maintenance programme shall be in place.

a. Is there a road maintenance programme in place with sup- The company has working plan and realization of road maintenance year C porting budget and resources? 2019, Form No. BME-FR- 06 Rev 01. For example in Kuala (Estate division b. Is there road maintenance records? 1), Gurarch Batu estate (division 3) period Jan – March 2019 has done road maintenance activities such as closing hole.

4.3.4 (M) Subsidence of peat soils shall be minimised and monitored. A documented water and ground cover management programme shall be in place.

Guidance: Plantations on peat should be managed at least to the standard set out in the ‘RSPO Manual on Best Management Practices (BMPs) for existing oil palm cultivation on peat’, June 2012 (especially water management, fire avoidance, fertiliser use, subsidence and ground surface management vegetation cover).

Specific Guidance: For 4.3.4: For existing plantings on peat, the water table should be maintained at an average of at least 50cm (between 40 - 60cm) below ground surface measured with groundwater piezometer readings, or an average of 60cm (between 50 - 70cm) below ground surface as measured in water collection drains as per the Manual Best Management Practices for existing oil palm cultivation on peat, June 2012 or as per existing regulation if equal or shallower measured through a network of appropriate water control structures e.g. weirs, sandbags, etc. in fields, and watergates at the discharge points of main drains (Criteria 4.4 and 7.4).

Regulations regarding water table on peat may refer, but not limited, to: 1. Government Regulation No. 71 year 2014 regarding Protection and Management of Peat Ecosystem 2. Regulation of Minister of Agriculture No. 14 year 2009 regarding Guideline of Oil Palm Cultivation on Peat 3. Regulation of Minister of Agriculture No. 11 year 2015 regarding Guideline of Indonesia Sustainable Palm Oil Plantation (ISPO)

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CR CHECKLIST RESULTS OF VERIFICATION STATU S (C / NC / C WITH OBS.) a. Is there an SOP to provide guidance on subsidence man- NA NA agement? b. Does the SOP make reference to the RSPO BMPs on peat? c. How is subsidence being monitored? d. Are there records of subsidence monitoring? e. How is subsidence being minimised? f. Is there a water management programme and evidence of implementation? For existing plantings on peat, the water table should be maintained at an average of 50cm (between 40 - 60cm) below ground surface measured with groundwater piezometer readings, or an average of 60cm (between 50 - 70cm) below ground surface as measured in water collection drains, through a network of appropriate water control structures e.g. weirs, sandbags, etc. in fields, and watergates at the discharge points of main drains (Criteria 4.4 and 7.4). g. Is there a ground cover management programme and is there evidence of implementation?

4.3.5 Drainability assessments shall be required prior to replanting on peat to determine the long-term viability of the necessary drainage for oil palm growing. Specific Guidance: For 4.3.5: Where drainability assessments have identified areas unsuitable for oil palm replanting, plans should be in place for appropriate rehabilitation or alternative use of such areas. If the assessment indicates high risk of serious flooding and/or salt water intrusion within two crop cycles, growers and planters should consider ceasing replanting and implementing rehabilitation. a. Was a drainability assessment conducted before replanting NA NA on peat? b. Was a flood risk map provided as a result of the drainability assessment? c. If the drainability assessment shows that an area is unsuitable for replanting, are there alternative plans in place for rehabilitation and alternative use in accordance to the RSPO BMPs?

4.3.6 A management strategy shall be in place for other fragile and problem soils (e.g. sandy, low organic matter, acid sulphate soils).

a. Is there a management strategy in place for other fragile NA NA and problem soils? b. Does the management strategy include SOPs for the management of other fragile and problem soils? c. Is inspection and implementation records available?

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CR CHECKLIST RESULTS OF VERIFICATION STATU S (C / NC / C WITH OBS.) 4.4 Practices maintain the quality and availability of surface and ground water.

4.4.1 An implemented water management plan shall be in place.

Specific Guidance: For 4.4.1: The water management plan will:  Take account of the efficiency of use and renewability of sources;  Ensure that the use and management of water by the operation does not result in adverse impacts on other users within the catchment area, including local communities and customary water users;  Aim to ensure local communities, workers and their families have access to adequate, clean water for drinking, cooking, bathing and cleaning and latrine purposes;  Avoid contamination of surface and ground water through run-off of soil, nutrients or chemicals, or as a result of inadequate disposal of waste including Palm Oil Mill Effluent (POME).

Guidance: Growers and millers should address the effects of their use of water and the effects of their activities on local water resources. a. Is there a water management plan in place for mill and plan- Consistent with the previous audit, the company has established a water C tation with identified actions? management plan for mill and plantation with identified actions, as demon- b. Does the plan include the following? strated at organization’s environmental license, i.e: DELH. The water man-  Identification of water sources agement plan was included following items identification of water sources,  Efficient use of water efficient use of water, renewability of water source, impacts on catchment  Renewability of water source area and local stakeholders, access of clean drinking water all year round for  Impacts on catchment area and local stakeholders stakeholders, avoidance of surface and ground water contamination.  Access of clean drinking water all year round for The identified water sources are Asahan River and Ground Water. In other- stakeholders hand the sources of impacts are domestic and plantations activities at up-  Avoidance of surface and ground water contamination stream of Asahan River and POME that applied for Land Application c. Have the identified actions in the plan been implemented?

4.4.2 (M) Protection of water courses and wetlands, including securing and maintaining and restoring appropriate riparian and other buffer zones, at the time of or prior to replanting (refer to national best practice and national guidelines) shall be demonstrated.

Specific Guidance: For 4.4.2: Refer to the ‘RSPO Manual On Best Management Practices (BMP) for management and rehabilitation of natural vegetation associated with oil palm cultivation on peat’, July 2012.

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CR CHECKLIST RESULTS OF VERIFICATION STATU S (C / NC / C WITH OBS.) a. Is there a map identifying water courses and wetlands? The identified water sources are Asahan River and Ground Water. In other- C b. Are the water courses and wetlands protected? hand the sources of impacts are domestic and plantations activities at up- c. Are the riparian and buffer zones maintained and restored in stream of Asahan River and POME that applied for Land Application existing plantation and replanting areas? d. Is there SOP for riparian and buffer zone protection? e. Has the SOP been implemented?

4.4.3 Records for monitoring of effluent Appropriate treatment of mill effluent to required levels and regular monitoring of discharge quality, especially Biochemical Ox- ygen Demand (BOD), and efforts to comply with legal requirements, shall be available in compliance with national regulations (see Criteria 2.1 and 5.6).

Specific Guidance: For 4.4.3 : The references and standard may refer, but not limited to: a. Decree of the Minister of Environment No. 51 year 1995 regarding Industrial Effluent Quality b. Decree of the Minister of Environment No. 28 year 2003 regarding Technical Guidance Assessment Effluent Usage from Industry to Soil in Palm Oil Plantation. c. Regulation of the Minister of Environment No. 12 year 2006 regarding Requirements and Mechanism of Legal Permit to Discharge Effluent to the Sea.

National regulations relate to riparian strip are, such as: 1. Government Regulation No. 38 year 2011 regarding River. 2. Government Regulation No. 37 year 2012 regarding Management of Riparian Strip. 3. Government Regulation No. 26 year 2008 regarding National Landscape, clause 56 (2) riparian strip outside settlement area is divided with following criteria: - Riparian strip of at least 5 meter width from the outer dike along the river bank with dike - Riparian strip of at least 100 meter from river side along main river bank without dike outside settlement area, - Riparian strip of at least 50 meter from river side along sub-main river bank without dike outside settlement area 4. Presidential Decree No. 32 year 1990 clause 16, regarding Criteria of Riparian Strip: a. At least 100 meter from outer main river and 50 meter from sub-main river, which is located outside settlement area. b. For river in settlement area, the riparian strip should be appropriate to build inspection path between 10 to 15 meters width.

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5. Regulation of the Minister of Public Work No. 63 year 1993 regarding Riparian Strip, River Usage Area, River Authorization Area, Criteria of Riparian Strip Line.

a. Is the mill effluent treatment process in place? The company has a license for utilizing surface water from authority agency C b. Is there a process in place for checking and monitoring wa- of local government, i.e.: Head Decree of Integrated Services Agency Prov- ter discharge quality, particularly BOD? ince of North Sumatra (No.: No.610/127/BPPTSU/2/12.1/XI/2014, dated No- c. Is the water discharge quality in compliance with national vember 06, 2014) regarding granting License of utilizing surface water. The regulations? license was expired dated November 6, 2017. The company can show proof d. Does the mill have a license for treatment, discharge or of the arrangement of the extension of surface water utilization permit num- land application of mill effluent, and is the mill in compliant ber 38/REKOMTEK/BWS.SII/2019 dated 28 January 2019. with the requirements of the license? The company also has License for land application of mill effluent, based on Decree of Regent of Batu Bara District, Decree No. 027/SK/DLH/IV/2017, dated April 17, 2017, concerning granting License POME Utilization for Land Application. The license was valid during the audit.

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CR CHECKLIST RESULTS OF VERIFICATION STATU S (C / NC / C WITH OBS.) The POM has facilities for treatment of mill effluent, namely IPAL (installation of mill effluent processor). The POME produced by POM was treatment pond and discharge to the land as land application. The company has record of POME quality measurement result, POME analysis by external laboratory (DLH of South Sumatera Province) who has approval and accredication from National Accreditation Committee, such as: - Certificate Result No.13/Dis.LHSU-UPT.LL/C/IX/2018 for September 2018 (Aerobic pond-outlet). Based on measurement result the paramaters is below the standard for outlet. Total POME produced by POM discharge to the land application within 2018 about 184,335 m3.

The actions for protect water contamination and pollution was identified and the monitoring program has been defined associated with HCV Programme. There is evidence that the action plan and monitoring program to protect water sources and to ensure that the quality of water still meet requirements (based on local and national government regulations) has been implemented. The organization has the effluent treatment process, where a process for checking and monitoring water discharge quality (especially BOD) are available. There is evidence that water discharge quality in compliance with national regulations. There is evidence that the organization monitoring their BOD from the wastewater periodically every month, some documents of monitoring results reviewed and found that the results still meet requirements There is a plan to manage and monitor water sources / rivers by planting trees and maintenance along the riparian zone. There is evidence of monitoring in April 2018. The company (POM) has record of surface water and ground water quality measurement result, analysis by external laboratory who has approval and accredication from National Accreditation Committee, such as: - Ground water - Certificate Result by Mutuagung Lestari No. 10131/SL/IX/18, dated October 15, 2018 for P 94 202. Based on measurement result the paramaters is below the standard for outlet. (Semester 2) - Surface water - Certificate Result by Dinas Kesehatan Propinsi Sumatera Utara No. 356/X/2018, dated October 22, 2018 for river. Based on measurement result the paramaters is below the standard for outlet. (Semester II)

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

a. Are there procedures to measure mill water usage, and are Kuala Piasa estate has monitoring used water year 2018 is 1,176 m3 and C the procedures implemented? 2019 until March is 278 m3. b. Are there records of mill water use per tonne of Fresh Fruit Bunches (FFB)? The organization has maintain records of mill water use per tonnes of Fresh Fruit Bunches (FFB) processing with the norma of water use is 1.28 m3 / ton FFB. Based on document observation, it know that average water used by Kisaran POM is 1.57 m3 / ton FFB (period January - March 2019) and 1.49 m3/ton year 2018 4.5 Pests, diseases, weeds and invasive introduced species are effectively managed using appropriate Integrated Pest Management techniques.

4.5.1 (M) Monitoring Implementation of Integrated Pest Management (IPM) plans implementation shall be available monitored.

Guidance: Growers should apply recognised IPM techniques, incorporating cultural, biological, mechanical and physical methods to minimise the use of chemicals. Native species should be used in biological control where possible. Regulations to be referred are such as: a. Guidance for Advancement of Pesticides usage, Directorate General of Infrastructure and Facilities, Ministry of Agriculture (2011) b. Technical Guidance for the Development of Oil Palm Plantation, Directorate General of Estate Crops, Ministry of Agriculture (2006)

a. Is there a documented IPM plan? The company has procedure related to Integrated Pest Management (IPM), NCR b. Does the IPM plan include the following? i.e: RSPO0  Identification of potential pests and thresholds 2513 1. Procedure No. BMEOP-WI-15, Rev 02, dated July 15, 2013 about  What are the techniques used (cultural, biological, Caterpillar and Bagworm controlling, when controlling such as: mechanical and physical methods)?  Using beneficial plant (Turnera subulata and Antigonon lep-  What are the native species used as part of the biolog- topus) ical control method?  Hand picking  Does it help in reducing the use of chemicals over a  Biologycal insecticide based on census level QMF: RSPO-007a-18(Rev.4.April 2019) RSPO Surveillance Assessment] Report PT Bakrie Sumatera Plantation – Kisaran Palm Oil Mill –

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CR CHECKLIST RESULTS OF VERIFICATION STATU S (C / NC / C WITH OBS.) period of time?  Path spraying and fogging  Prophylactic use of pesticides  Minimization of pesticide use 2. Procedure no. BMEOP-WI-14, Rev 02, dated July 15, 2013 about Pest Integrated Management System for rat, thirataba, and oryctes. For rat  Review on the plans to suit the present condition such level attack, when level attack < 5% in one area, controlled by Rodenti- as replanting? cides on palm oil tree. If the level attack more than >5% in one area, c. Is there an SOP to implement the plan and monitor its ef- controlled by Rodenticides in every tree palm oil. While the oryctes at- fectiveness? tack controlled by hand picking and using the oryctes trap (orycnet) in d. Is there records of pest occurrence and control? every tree palm oil.

3. Procedure no. BMEOP-WI-28, Rev 02, dated April 6, 2015 about Cater- pillar and Bagworm census. Procedure mentioned the census conducted in every week in every field has been attacked, and every month for every filed attacked yet. The company has IPM plan and implemented, example in Kuala Piasa Es- tate, there is record of census Caterpillar and Bagworm on May 2018. Based on the census, there is no pest attack above the threshold value. So o need control effort has been taken. Implementation of IPM programme for example by planted benefical plant at both sides of Main road, i.e: turnera subulata and antigonon leptosus. Gurach Batu estate has IPM plan and implemented, example in Block P94102 (replanting area), there is record of census oryctes on December 15, 2018. Based on the census, there is no pest attack above the threshold value. So no need control effort has been taken. Serbangan estate has IPM plan and implemented, example in Block P94103, there is record of census oryctes on January 17, 2019. Based on the census, there is no pest attack above the threshold value. So no need control effort has been taken

In accordance with Work In-struction (WI) No. BMEOP-WI-28 revision 2 dated 6 April 2015, the global census is carried out once a month for each map on a field that has never been attacked but Kuala Piasa estate last conducted a global census in May 2018 so that it does not comply with work instruction (WI). This condition raised as Non-conformity 4.5.2 Training records of of those involved in IPM Integrated Pest Management implementation shall be available demonstrated.

Is there records of training provided to those involved in the im- The company has provided training to those involve in the implementation of C plementation of IPM? Integrated Pest Management (IPM) namely Training of IPM for foreman, date on December 28, 2018 with followed 24 person and also.

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CR CHECKLIST RESULTS OF VERIFICATION STATU S (C / NC / C WITH OBS.) 4.6 Pesticides are used in ways that do not endanger health or the environment.

Guidance:

The RSPO has identified some examples of alternatives to pesticide use, which include those listed in the ‘Research project on Integrated Weed Management Strategies for Oil Palm; CABI, April 2011’

Pesticides application on peatland and swamp may use IPM methods, such as in the RSPO Manual on Management Practices (BMPs) for Management and Rehabili- tation of Natural Vegetation Associated with Oil Palm Cultivation on Peat. 4.6.1 (M) Documented evidence shall be available to show that pesticide used based on regulations and the use of pesticide is specific to target species with appropriate dosage which have minimal impact on non-target species.

Justification of all pesticides used shall be demonstrated. The use of selective products that are specific to the target pest, weed or disease and which have minimal effect on non-target species shall be used where available.

Specific Guidance:

For 4.6.1: Measures to avoid resistance on target species the development of resistance (such as application of pesticide rotations) should be applied, which. The justification should consider less harmful alternatives and IPM.

Guidance:

The RSPO has identified some examples of alternatives to pesticide use, which include those listed in the ‘Research project on Integrated Weed Management Strate- gies for Oil Palm; CABI, April 2011’.

Due to problems in the accuracy of measurement, monitoring of pesticide toxicity is not applicable to independent smallholders (refer to ‘Guidance for Independent Smallholders under Group Certification’, June 2010).

Pesticides application on peatland and swamp may use IPM methods, such as in the RSPO Manual on Management Practices (BMPs) for Management and Rehabilitation of Natural Vegetation Associated with Oil Palm Cultivation on Peat.

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CR CHECKLIST RESULTS OF VERIFICATION STATU S (C / NC / C WITH OBS.) a. Does the organization have a policy on safe use of chemi- The company has a policy on safe use of chemicals that are contain ISPO C cals? and RSPO Sustainability policy. For pesticide application, the company uses b. Does the organization have SOPs for use of selective prod- approved and registered Agrochemicals permitted by head of Manpower ucts that are specific to target pests, weeds, or diseases Agency of Sumatera Utara Province, with recommendation No. 1255A- and which have minimal effect on non-target species? 7/Rek.Pstd/DTK/2017, dated July 31, 2018, about recommendation of pesti- i. Measures to avoid the development of resistance cides/chemical usage. There are 48 names of pesticides/chemical was listed (such as pesticide rotation) should be applied. in the recommendation. ii. Is there a list of all pesticide with target species and justification of use? iii. The justification should consider less harmful alternatives and IPM. c. Is there evidence of implementation of SOP on the ground?

4.6.2 (M) Records of pesticides use (including active ingredients used and their LD50, area treated, amount of active ingredients applied per ha and number of applications) shall be available provided. a. Does the company have a pesticide application program? The company has program to manage their oil palm from pests, diseases C b. Is records of pesticides use available? and invasive organism in 2018 and implemented. c. Do the records detail the active ingredients used and their LD50, area treated, amount of active ingredients applied per There is evidence that use of pesticide maintained, including detail the ac- ha and number of applications? tive ingredients used and their LD50, area treated, amount of active ingredients applied per ha and number of applications.

4.6.3 (M) Any use of pesticides shall be minimised as part of a plan, and in accordance with Integrated Pest Management (IPM) plans. There shall be no prophylactic use of pesticides, except in specific situations identified in Indonesia national Best Practice guidelines.

Specific guidance for 4.6.3: Justification of the use of such pesticides will be included in the public summary report.

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CR CHECKLIST RESULTS OF VERIFICATION STATU S (C / NC / C WITH OBS.) a. Does the company have an IPM plan? The company has program to manage their oil palm from pests, diseases C b. Has that plan been implemented? and invasive organism in 2018 and implemented. Based on their work in- c. Is the effectiveness of the IPM plan monitored? struction number BMEOP-WI-22 Rev 01, in the page 2, state that the census d. Are there records showing that the use of pesticides have will conducted in every 1 week in the every field for global census. And if any been minimised in accordance with Integrated Pest Man- invasive in high categorized, the company conducted the effective census, agement (IPM) plan? with the categorized there is 4 head of bagworm per midrib, and 8 head of e. Has there been prophylactic use of pesticides? If so, justifi- nettle caterpillar per midrib, the census will be conduct 1 – 2 per week with 5 cation must be provided in accordance to National Best – 6 tree/Ha. After that, the mortality census will be conducted if needed after Practices. the insecticide spraying with the aim is to ensure the mortality rate and effectiveness of the IPM program.

This activity is accordance to Work Instruction about control of bagworm and nettle caterpiller withdocument number BMEOP-WI-23 Rev 01 in page 2, state about managing step for bag worm and caterpiller, with the step is: 1. Hand picking 2. Biological steps with integrated pest management use the beneficial plant i.e. Turnera subulata, and Antigonon leptopus 3. Chemical steps with spraying based on global and effective map of invasived censused use insectiside, Spraying methode also have 3 steps, first is spraying on the leaf, especially the underside of the leaves, second is spraying with mist blower, applied in the arround of the tree, and the third is fogging. This methode is a last alternative if the hand picking and biological steps can not handling the pest invasive. 4.6.4 The evidence shall be available to demonstrate that use of Pesticides that are categorised in as World Health Organisation Class 1A or 1B by World Health Or- ganization, or those that are listed in the by the Stockholm and or Rotterdam Conventions, and paraquat, are not used, except in specific situations identified in national Best Practice guidelines. The use of such pesticides shall be minimised and eliminated as part of a plan, and shall only be used in exceptional circumstances.

Specific guidance for 4.6.4: Use of paraquat, as one of the restricted use pesticides, shall refer to the Regulation of the Minister of Agriculture No. 24 year 2011. Op- erators involve in the use of restricted pesticides must be certified by Pesticide Commission (Komisi Pestisida).

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CR CHECKLIST RESULTS OF VERIFICATION STATU S (C / NC / C WITH OBS.) a. Does the company have a complete listing of WHO class The Company already has a list of pesticides that are include in WHO C 1A, class 1B, and Stockholm or Rotterdam Conventions Class !A (extremely hazardous) 28 types, clas 1B (Highly hazardous) 56 pesticide? types and and Stockholm or Rotterdam Conventions pesticide. b. Is there a policy, procedure or management plan committing to minimise and eliminate use of these pesticides and The company has established ethic policy regarding safe use of chemicals, paraquat? efficient and effective. c. Are there records of minimisation of pesticides and paraquat use? Procedure/work instruction BMEOP-WI-09. Rev. 02, issued on dated July 15, d. Where there is the use of the above pesticides or paraquat, 2013 of pesticides spraying described use of selective that are specific to has justification in line with national best practice guidelines target pests, weeds, or diseases. Procedure described on safe use of pes- been documented? dicides and selection including minimise and eliminate use of these pesti- e. Does physical verification of inventory in the chemical store cides and paraquat. agree back to the inventory records? 4.6.5 (M) Evidence of pesticide application by trained person and in accordance with application guidelines in product label and storage guidelines shall be available. Appropriate safety equipment shall be provided and utilized. Pesticides shall only be handled, used or applied by persons who have completed the necessary training and shall always be applied in accordance with the product label. Appropriate safety and application equipment shall be provided and used. All precautions attached to the products shall be properly observed, applied, and understood by workers (see Criterion 4.7).

Specific guidance for 4.6.5: Requirement pertaining to Personal Protected Equipment (PPE) shall refer to the Regulation of the Minister of Manpower No.8 year 2010 regarding PPE and Material Safety Data Sheet. Use of pesticides must follow guidance stated on the product’s label. If there are gaps between the use of pesticides and the guidance, documented justification should be provided.

a. Is there SOP for chemicals/pesticides handling? The company has defined a policy on safe use of chemicals that are contain- NCR b. Is there a training plan and training records for workers who ing on sustainability policy on article 11, e.i: “use of agricultural chemicals RSPO apply or handle pesticides? (agrochemicals) which is registered and permitted by the competent agency”. 02514 c. Is there evidence that training has been conducted in an Ther is no pest attack higher than threshold value in 2018, so that the control appropriate language understood by the workers? effort has not made. d. Are pesticides handled, used or applied only by persons who have completed the necessary training? The company has done in house training Use of Limited Pesticides on Sep- e. Are the workers involved in chemical handling or application tember 25th, 2014 in cooperation with the Fertilizer and Pesticide Control able to demonstrate understanding of the hazards and risks Commission of North Sumatra province, evidenced by record attendance and related to chemicals used when interviewed? certificate of completion of training participants. During 2017 and 2018, some f. Are pesticides always applied in accordance with the prod- training regarding pesticides was conducted, e.g.: training on OHS for haz- uct label? ardous goods for officer on May 17-19, 2017. But Not all officers using pesti- g. Are MSDS for pesticides used readily available for easy ref- cides (spraying workers) receive training according to Permentan No.24 of erence? 2011 article 9. This condition raised as Non-conformity h. Is appropriate safety and application equipment provided and used? i. Is PPE used appropriate according to recommendations in any risk assessments done? j. Is appropriate PPE provided and used, and can it be easily

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CR CHECKLIST RESULTS OF VERIFICATION STATU S (C / NC / C WITH OBS.) replaced if damaged? k. Does the management checked the workers usage of appropriate PPEs?

4.6.6 (M) Storage of all pesticides shall be according to recognised best practices. All pesticide containers shall be properly managed according to the existing regulations and or instructions enclosed on the containers disposed off and not used for other purposes (see Criterion 5.3).

Specific guidance for 4.6.6: Recognised best practice includes: Storage of all pesticides as prescribed in the FAO International Code of Conduct on the distribution and use of pesticides and its guidelines, and supplemented by relevant industry guidelines in support of the International Code (see Annex 1)

For 4.6.6: Some regulations regarding pesticides are: a. Government Regulation No. 18 year 1999 regarding Toxic and Hazardous Materials Management b. List of Toxic & Hazardous Materials from specific source, unspecific source, expired chemical, leaked chemical, residue, container, or product disposal which does not comply with the specification of Government Regulation No. 85 year 1999 regarding changes of Government Regulation No. 18 year 1999 regarding the Management of Hazardous and Poisoned Waste. c. FAO International Code of Conduct on the distribution and use of pesticides and it guidance and supported by relevant industrial guidance (see Annex 1). d. Regulation of the Minister of Agriculture No. 01/ Permentan/OT.140 /1/2007 regarding List of Banned and Restricted Pesticide (based on active ingredients). e. Regulation of the Minister of Agriculture No. 24/Permentan/SR.140/4/2011 regarding Requirement and Mechanism to Register Pesticide. f. Stockholm Convention regarding Consistent Organic Pollutant which had been ratified with Act No. 19 year 2009 g. Guidance for Advancement of Pesticides usage, Directorate General of Infrastructure and Facilities, Ministry of Agriculture (2011)

a. Has the SOP for pesticide storage been documented and Storage of pesticides including the disposal of used pesticide containers in C implemented? accordance with the relevant regulations. The Company categorizes used b. Are all pesticides stored according to recognised best prac- pesticide containers as a Hazardous Waste (LB3). During 3rd surveilence, tices? there is evidence that pesticide containers was stored at temporarily store c. Is there evidence that empty pesticide containers are hazardous waste. The company has valid licenced to temporarily store haz- properly stored and disposed off and not used for other pur- ardous waste (Head of Batubara Regency Decree No. 660/235/BLH/IV/2015 poses? Issued date April 24, 2015). d. Is there evidence observed in the field that pesticide containers are indiscriminately disposed (in dump site) or used Records of pesticide contaniners available in logbook and form sheets Haz- for other purposes, .e.g. as waste containers, flower pots? ardous waste storage. Base on record of form sheets Hazardous waste storage on 30 April 2019, amount of pesticide contaniners is 0,693 ton

4.6.7 Application of pesticides shall be by proven methods that minimise risk and negative impacts.

a. Is there work instruction for pesticide application? The company has establish a docuented work instruction (WI) for pesticide C b. Is there training provided on work instruction including risk application namely BMEOP-WI-09. Rev. 02, issued on dated July 15, 2013. and impacts of pesticide applications? There is evidence that the company has conduct an in house training of OHS for hazardous chemical officers that was conducted on May 17-19, 2017. There is no Pesticides applied aerially, there is no smallholder scheme, proper disposal of waste material, according to procedures that fully under- QMF: RSPO-007a-18(Rev.4.April 2019) RSPO Surveillance Assessment] Report PT Bakrie Sumatera Plantation – Kisaran Palm Oil Mill –

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CR CHECKLIST RESULTS OF VERIFICATION STATU S (C / NC / C WITH OBS.) stood by workers and managers demonstrated during audit.

4.6.8 (M) Pesticides may only be shall be applied aerially only where there is documented justification. Surrounding Communities shall be informed of impending aerial pesticide applications with all relevant information within reasonable time prior to application. a. Has aerial spray been applied? If yes, is there documented Based on interview with Managemen, staff, public consultation with NA justification? stakeholder, interview with workers and field observation there was no b. Is the impact and risk associated with aerial application pesticide application aerially. documented and made available? c. Are the identified affected communities informed of impending aerial pesticide applications with all relevant information within reasonable time prior to application?

4.6.9 Evidence of training on handling pesticide for workers and scheme smallholder (if any) shall be available Maintenance of employee and associated smallholder knowledge and skills on pesticide handling shall be demonstrated, including provision of appropriate information materials (see Criterion 4.8). a. Has the company provided information materials on pesti- There was no smallholder associated with estate C cide handling to all employees and associated smallholders (if any) (see Criterion 4.8)? The company has provided information matrials on pesticides handling to all b. Is there evidence of periodic training (in appropriate lan- employees. Training and dissemination records were sighted. guage) of employees and associated smallholders on pesti- There is evidence that the company has conduct an in house training of OHS cide handling? for hazardous chemical officers that was conducted on May 17-19, 2017. Note for auditor : There is no Pesticides applied aerially, there is no smallholder scheme, Interview with workers and smallholders on their knowledge proper disposal of waste material, according to procedures that fully under- and skills in pesticides handling. stood by workers and managers demonstrated during audit. 4.6.10 Proper that pestiside waste has been handled as per legal regulations and disposal of waste material, according to procedures that are fully understood by workers and managers shall be demonstrated (see Criterion 5.3). a. Is there an SOP for proper disposal of waste material? Empty pesticides containers were triple rinsed and collected in the temporary C b. Is there training provided to workers and managers on storage of hazardous waste. Pesticides containers were transported by au- proper waste disposal? thorised transporter, PT. Amindy Barokah on 3 April 2018. Records of pesti- c. Is there evidence of implementation of proper ways for cides containers quantity were evident. Liquid waste from pesticides was re- waste disposal by the company? used for the next spraying applications also there are several ex-containers “jerry can” that may reuse for field application. Training/briefing regarding disposal of waste material has been conducted to all workers and staffs. Based on interview with workers, they understood the disposal of waste material.

4.6.11 (M) Specific annual medical records of surveillance for pesticide operators, and follow up treatment of medical results , documented action to treat related health conditions, shall be available demonstrated. a. Is there an updated list of pesticide operators? The medical checkup for workers who handling chemical (chemical store of- NCR

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CR CHECKLIST RESULTS OF VERIFICATION STATU S (C / NC / C WITH OBS.) b. Is there records of annual medical surveillance of pesticide ficer, chemical sprayers) has been conducted as accordance with the rele- RSPO operators? vant regulations (Permenaker No. 02 year 1980 and No. 3 year 1986). Rec- 02515 c. Is there medical and treatment records of all pesticide oper- ords of medical checkup are available and maintained, i.e.: report of medical ators? check up result for PT Bakrie Sumatera Plantations Tbk, year of 2017 issued by “Balai Keselamatan dan Kesehatan Kerja Medan” No. 106/DHU/BK3- MDN/VII/2017, July 2017. And, report no. 114/DHU/BK3-MDN/IX/2017, dated September 29, 2017.

There is some non-conformity such as:  Not all spraying worker conduct medical checkup in accordance with Permenaker No. 02 year 1980 for year 2018 and 2019  The company does not create and submit report at least 2 month after medical checkup to Direktur Jenderal Bina Lindung Tenaga Kerja by Local Regional Office of Direktur Jenderal Bina Lindung Tenaga kerja This condition raised as Non-conformity

4.6.12 (M) Records shall be available to show that spraying is not conducted No work with pesticides shall be undertaken by pregnant or breast-feeding women.

a. Is there a policy statement preventing pregnant and breast- The company has policy that no pregnant and breast-feeding female working C feeding women from handling pesticides? with chemicals. The policy also has strengthen by document PKB. Other- b. Is there a lists of female workers handling pesticides availa- wise, the company also has implemented a system to identify pregnant and ble? breast-feeding female, i.e by conducting pregnant test periodically every six c. Does the company have a system to identify pregnant and month. There is sufficient evidence that there is no pregnant and breast- breast-feeding women? feeding female working with chemicals. based on Interview with spraying d. Is there evidence showing that pregnant and breast-feeding workers on Gurach Batu estate during audit found that they are aware that women are not allowed to handle pesticides? pregnant/lactating women are not allowed to handle pesticides in any circumstances, and they are not in pregnant/lactating conditions

4.7 An occupational health and safety plan is documented, effectively communicated and implemented.

4.7.1 (M) A health and safety policy shall be in place. A health and safety plan covering all activities shall be documented and implemented, and its effectiveness monitored.

Guidance: Growers and millers should ensure that the workplace, machinery, equipment, transport and processes under their control are safe and without undue risk to health. Growers and millers should ensure that the chemical, physical and biological substances and agents under their control are without undue risk to health and when appropriate measures are taken if needed. . All indicators apply to all workers regardless of status.

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CR CHECKLIST RESULTS OF VERIFICATION STATU S (C / NC / C WITH OBS.) The health and safety plan should also refer to the Government Regulation No. 50 year 2012 regarding Application of Occupational Health and Safety Management System reflect guidance in ILO Convention 184 (see Annex 1). a. Is there a health and safety policy in place? The company has defined a documented policy about OHS. The policy was C  Is it written in an appropriate language? written in Bahasa and signed by CEO of BSP Kisaran (Hepi Sapirman) dated  Has the policy been approved by an authorized per- February 28, 2017. The policy was cover mitigation of risk to workers health sonnel and dated? and safety at all workplace activities. The policy has socialization to all  Does the policy cover mitigation of risks to workers workers within the orgnization by placed copy of the policy on strategic work- health and safety at all workplace activities? places. And, there is evidence that workers aware and understand the policy  Are the workers aware of and understand the policy? b. Is there a health and safety plan in place?  Does the plan include targets for improving occupational health and safety?  Does the plan reflect guidance provided in the ILO Convention 184 (see Annex 1)? c. Is there evidence of implementation of the plan? d. Is the effectiveness of the health and safety plan monitored? e. Is the health and safety plan made publicly available? f. Is there an action plan if targets are not achieved? 4.7.2 (M) A documented risk assessment shall be available and its implementation shall be recorded All operations where health and safety is an issue shall be risk assessed, and procedures and actions shall be documented and implemented to address the identified issues. All precautions attached to products shall be properly observed and applied to the workers.

Specific Guidance: For 4.7.2: All precautions attached to products shall be properly observed, understood, and applied. a. Have risk assessments been conducted for all operations Records of hazards identification and risk assessment for mill and estates NCR where health and safety is an issue? are available on form no. BMA-FR-02 and updated periodically 1 (one) time RSPO b. Does the risk assessment cover all the organization’s pro- a year at minimum. And the last update has performed on 2018. The risk 02516 cesses and activities? assessment has been conducted for all the organization’s processes and ac- c. If any accidents had occurred, were these included in the tivities. The company has defined a documented procedure as guidance for risk assessments with action plans to prevent further recur- hazard identification, risk assessment and define risk control, i.e. procedure rence? of identification, assessment and control of risk and impact, document no. d. Have the procedures and action plans been documented BMA-01, revision 06, dated March 10, 2017. and implemented to address the identified issues? e. Have all precautions attached to products been properly ob- Based on document verification related HIRAC, there is no identificatiof of served and applied to the workers? hazardous and risk for fuel sale activity in the emplacement (Serbangan estate). This condition raised as Non-conformity

4.7.3 (M) Records of Occupational Health and Safety (OHS) program (see 4.8) and Personal Protective Equipment (PPE) training ini accordance with the result of hazard identification and risk analysis shall be available to all workers. All workers involved in the operation shall be adequately trained in safe working practices (see

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CR CHECKLIST RESULTS OF VERIFICATION STATU S (C / NC / C WITH OBS.) Criterion 4.8). Adequate and appropriate protective equipment shall be available to all workers at the place of work to cover all potentially hazardous operations, such as pesticide application, machine operations, and land preparation, harvesting and, if it is used, burning.

Specific Guidance: For 4.7.3: Adequate and appropriate Personal Protective Equipment (PPE) shall be available to all workers at the workplace based on the result of Identification of Sources of Hazard and Risk Control including all potentially hazardous operations, such as the use of pesticides, operating machinery, land preparation, harvesting and if it is used, burning.

a. Are all workers involved in the operation appropriately The company has identified all potentialy hazardous operations sucs as ma- NCR trained in safe working practices (see Criterion 4.8)? chineries operations, pesticides application, transportation, harvesting, and RSPO b. Are OSH training programs and training records available etc. Then risk control established including engineering control, procedural 02517 and conducted by qualified persons? control and provided appropriate PPE. Based on field observation to pesti- c. Is adequate and appropriate protective equipment available cides appication, observed that all workers have wearing appropriate PPE to all workers at the place of work to cover all potentially such as safety boots, rubber gloves, safety mask, safety googles, and apron. hazardous operations, such as pesticide application, machine operations, and land preparation, harvesting and, if it Based on field observation and interview with worker found the worker does is used, burning? not wearing required PPE (mill). For example: worker of FFB unloading does d. Is PPE provided to workers and replaced when damaged? not wearing safety shoes. This condition raised as Non-conformity  Does the organization maintain a list of PPE distribution?  Are workers observed wearing appropriate PPE?

4.7.4 (M) The responsible person/persons shall be identified. There shall be records of regular meetings between the responsible person/s for occupational and workers. Concerns of all parties about health, and safety and welfare shall be identified and there shall be records of periodical meetings on health and safety issues discussed at these meetings, and any issues raised shall be recorded.

Specific Guidance: For 4.7.4 : Workers shall be represented in the Advisory Committee for Occupational Safety and Health (P2K3) based on the Regulation of the Minister of Manpower No. 4 year 1987.

a. Has the company identified the responsible person/persons The company has P2K3 organization that has resposible to implement C to implement OSH? OHS within the company. The P2K3 was formed in accordance with de- b. Are meetings between the responsible persons and workers cree no. 197-7/06/DTK-SU/WIL III/207 by head of manpower supervisory conducted on a regular basis, or as required by law, if any? area III. The members of P2K3 consist of management of the company c. Are minutes of meeting recording attendees and issues dis- and workers and a General OHS expert as secretary. P2K3 has per- cussed available? formed monthly meeting regularly and report te results to the authority d. Are concerns of all parties about health, safety and welfare agency. Minute meeting and attendance list are available. The meeting discussed at these meetings? has attended by the P2K3 members and representative workers and concern about health and safety. Note to Auditor : Interviews with workers reflect compliance to a-d above.

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CR CHECKLIST RESULTS OF VERIFICATION STATU S (C / NC / C WITH OBS.) 4.7.5 A procedure for emergency and work accident shall be available in Indonesian Language, and the workers, who have attended First Aids training, are available in the working areas. Accident and emergency procedures shall exist and instructions shall be clearly understood by all workers. Accident procedures shall be available in the appropriate language of the workforce. Assigned operatives trained in First Aid should be present in both field and other operations, and first aid equipment shall be available at worksites. Records of all accidents shall be kept and periodically reviewed.

For 4.7.5: Assigned operatives trained in First Aid should be present in both field and other operations, and first aid equipment shall be available at worksites. Records of all accidents shall be kept and periodically reviewed.

a. Are there SOPs for accidents and emergencies? PT BSP has conducted First Aid on Accident (P3K) training with participants: NCR  Do these cover all major potential emergencies, such Leadership employees, staff and supervisors. Resource persons who have RSPO as, but not limited to fire, chemical spillage, and poten- the qualifications / Hiperkes Certificate issued by the Minister of Manpower 02518 tial natural disasters specific for the region, e.g. earth- and Transmigration. quakes, volcanoes, etc.?  Are accidents investigated and action taken to prevent Based on interview with harvesting foreman (Gurach Batu estate P08301 and recurrence? Serbangan estate P10303) known that the foreman have not received first aid training. This condition raised as Non-conformity  Are accident records provided to the local authority in accordance with local legal requirements, if any?  Available in the appropriate language of the workforce? b. Are the instructions on emergency procedures clearly understood by all workers? c. Are assigned operators trained in First Aid present in both field and other operations? d. Is there records of training of the first aiders? e. Is first aid equipment available at worksites? Is the equipment available during conduct of field manual work? f. Are first aid kits adequately stocked and regularly checked in accordance with local legal requirements? g. Are records of all accidents kept and periodically reviewed for continuous improvement? 4.7.6 All workers shall be provided with medical care, and covered by accident insurance (see criterion 6.5.3)

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CR CHECKLIST RESULTS OF VERIFICATION STATU S (C / NC / C WITH OBS.) a. Is there evidence that all workers are provided with medical There is ecvidence that medical care for employee has been provides i.e C care (refer to Criterion 6.5.3), and covered by accident in- clinic and hospital. Moreover, the company also provided social and working surance by the company? For contract workers, the contract insurance i.e.: BPJS Kesehatan and BPJS Ketenagakerjaan. Payment re- between the company and the contractor shall be in compli- ceipt of BPJS are available. Based on–site interview, were observed that the ance. medical cares and insurances are valid. b. For accidents that have occurred, is there evidence that the affected workers received appropriate medical treatment, and was able to claim and receive compensation under the insurance policy (if relevant)? c. Is there evidence that the insurance policies are valid?

4.7.7 Occupational injuries shall be recorded using Lost Time Accident (LTA) metrics. Specific Guidance for 4.7.7: Lost Time Accident requirements should refer to Decree of the Minister of Manpower and Transmigration No. 609 year 2012 regarding Guidance to Solve Working Accident Case and work-related Illness.

The National Interpretation will define the metrics for LTA. For countries where there are no national interpretations, the growers will determine their own metrics. Are occupational injuries recorded using Lost Time Accident (LTA) The company have accident recapitulation report by monthly include of loss C metrics? time accident (LTA). Form Frequency Rate & Severity Rate Periods year 2016: FR = 0.5705. SR = 0.5705 and Form Frequency Rate & Severity Rate Periods year 2017: FR = 2.2820. SR = 2.2820. Accident report has kept and periodically reviewed by OSH committee 4.8 All staff, workers, smallholders and contract workers are appropriately trained.

4.8.1 (M) Records of A formal training programme shall be in place that covers all related to the aspects of the RSPO Principles and Criteria, shall be available and that includes regular assessments of training needs and documentation of the programme.

Guidance:

Workers should be adequately trained on: the health and environmental risks of pesticide exposure; recognition of acute and long-term exposure symptoms including the most vulnerable groups (e.g. young workers, pregnant women); ways to minimise exposure to workers and their families; and international and national instruments or regulations that protect workers’ health.

The training programme should include productivity and best management practice, and be appropriate to the scale of the organisation.

Training should be given to all staff and workers by growers and millers to enable them to fulfil their jobs and responsibilities in accordance with documented procedures, and in compliance with the requirements of these Principles, Criteria, Indicators and Guidance.

Contract workers should be selected for their ability to fulfil their jobs and responsibilities in accordance with documented procedures, and in compliance with the requirements of the RSPO Principles, Criteria, Indicators and Guidance.

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CR CHECKLIST RESULTS OF VERIFICATION STATU S (C / NC / C WITH OBS.) Growers and millers should demonstrate training activities for schemes smallholders who provide Fresh Fruit Bunches (FFB) on a contracted basis.

Workers on smallholder plots also need adequate training and skills, and this can be achieved through extension activities of growers or millers that purchase fruit from them, This training may be conducted through by smallholders’ organisations, or through collaboration with other institutions and organisations (refer to ‘Guidance for Independent Smallholders under Group Certification’, June 2010, and see ‘Guidance on Scheme Smallholders’, July 2009)

The contract workers in Indonesia refer to the Fixed Term Contract (PKWT) and Non-fixed Term Contract (PKWTT) based on the Decree of the Minister of Manpower No. 100 year 2004; and the Regulation of the Minister of Manpower & Transmigration No. 19 year 2012 regarding Requirements for Transfer of Parts of Work to Other Company(ies).

For individual smallholder operations, training records should not be required for their workers, but anyone working on the farm should be adequately trained for the job they are doing (refer to ‘Guidance for Independent Smallholders under Group Certification’, June 2010, and ‘Guidance on Scheme Smallholders’, July 2009). a. Does the company maintain a list of staff, workers, smallholders The company can not showing the training program year 2019 related train- NCR and contract workers whom training must be provided to? ing of limited pesticide usage and RSPO SCCS. This condition raised as RSPO b. Is there a formal training programme in place that covers all as- Non-conformity (NCR RSPO 02519). 02519 pects of the RSPO Principles and Criteria? Does the formal training program include:  Regular assessment of training needs of all staff, workers, smallholders and contract workers;  Training for workers on smallholder plots;  Documentation of all the training assessment needs, formal training conducted and the list of participants attending these formal training;  Does the training for workers cover, at minimum, to the following: o The health and environmental risks of pesticide exposure; o recognition of acute and long-term exposure symptoms including the most vulnerable groups (e.g. young workers, pregnant women); o ways to minimise exposure to workers and their families; o International and national instruments or regulations that protect workers’ health; and o Productivity and best management practice.

Note to auditor : To interview staff, workers, smallholders and contract workers to verify that the training has been conducted effectively. 4.8.2 Records of training for each employee shall be maintained.

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CR CHECKLIST RESULTS OF VERIFICATION STATU S (C / NC / C WITH OBS.) a. Are training records maintained for each employee? Records of training for each employee are available and maintained. The NCR record namely Daftar Riwayat Pelatihan, document no. BMH-FR-16. The RSPO record contain information type of training, date of training, venue of training, 02520 and etc.

The company can not showing evidence that the officer which implemented the RSPO SCCS has received related RSPO SCCS. This condition raised as Non-conformity (NCR RSPO 02520).

Principle 5: Environmental Responsibility and Conservation of Natural Resources and Biodiversity

Aspects of plantation and mill management, including replanting, that have environmental impacts are identified, and plans to mitigate the negative impacts and pro- 5.1 mote the positive ones are made, implemented and monitored, to demonstrate continual improvement. 5.1.1 (M) An environmental impact assessment document(s) shall be available (EIA) shall be documented.

Guidance Report on environmental management and monitoring may be in the form of RKL & RPL reports in accordance with the provisions of AMDAL and/or other documents as required in the Environmental Management System (ISO 14000). For environmental aspects which have not yet been included in the Environmental Impact Analysis document (in accordance with government regulation), such as Greenhouse Gas, High Conservation Value, a study may be conducted separately and in accordance with the requirements of the RSPO.

Principles and Criteria. If there are impacts identified, that may change the on-going operations, the company should implement corrective actions on the operational practices within this specified period.

Document of environment impact assessment is the environment document based on the existing regulations, such as: a. Environmental Impact Assessment (Analisis Mengenai Dampak Lingkungan Hidup/AMDAL) for plantation with areas of > 3000 Ha b. Environmental Management Effort (Upaya Pengelolaan Lingkungan Hidup/UPL) and Environmental Monitoring Effort (Upaya Pemantauan Lingkungan Hidup/UKL) for plantation with areas of < 3000 Ha. c. Environmental Management Document (Dokumen Pengelolaan Lingkungan Hidup/DPLH) d. Environmental Evaluation Document (Dokumen Evaluasi Lingkungan Hidup/DELH) e. Environmental Information Performance (Penyajian Informasi Lingkungan Hidup/PIL) f. Environmental Evaluation Performance (Penyajian Evaluasi Lingkungan Hidup/PEL) g. Environmental Evaluation Study (Studi Evaluasi Lingkungan Hidup/SEL) h. Environment Management and Monitoring Document (Dokumen Pengelolaan dan Pemantauan Lingkungan Hidup/DPPL) i. Declaration Letter for Managing and Monitoring Environment (Surat Pernyataan Kesanggupan Pengelolaan dan Pemantauan Lingkungan Hidup/SPPL) j. And others recognised by the government.

Bearing in mind the potential impacts of the development activities to the environment, it is important for the following environmental characteristics to be taken into consideration: a. Environment components where their functions will be sustainably preserved and protected, particularly: QMF: RSPO-007a-18(Rev.4.April 2019) RSPO Surveillance Assessment] Report PT Bakrie Sumatera Plantation – Kisaran Palm Oil Mill –

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CR CHECKLIST RESULTS OF VERIFICATION STATU S (C / NC / C WITH OBS.)  Protected forest, conservation forest, and biosphere reserve;  Water sources;  Biodiversity;  Air quality;  Natural and cultural heritage;  Environmental comfort;  Cultural values in harmony with the environment

b. Environment components which may structurally change and these changes are considered significant by the communities surrounding the operational areas, such as:  Ecosystem function(s);  Land ownership and tenure;  Job and business opportunities;  Community’s standard of living;  Public health

The company shall submit the required periodical environmental management implementation and monitoring report to the relevant authorities.The company is responsible for providing sufficient objective evidence to the audit team demonstrating full compliance to the Environmental Impact Assessment (AMDAL) requirement covering all aspects of plantation and mills operations, as well as incorporating all changes recorded over that period of time.

The environmental impact assessment EIA should cover the following activities, where they are undertaken:  Building new roads, processing mills or other infrastructure;  Putting in drainage or irrigation systems;  Replanting and/or expansion of planting areas;  Management of mill effluents (Criterion 4.4);  Clearing of remaining natural vegetation;  Management of pests and diseased palms by controlled burning (referred to clause 11 of Government Regulation No. 4 year 2001 (Criteria 5.5 and 7.7).

Impact assessment can be a non-restrictive format e.g. ISO 14001 EMS and/or EIA report incorporating elements spelt out in this Criterion and raised through stakeholder consultation.

Environmental impacts may should be identified on soil and water resources (Criteria 4.3 and 4.4), air quality, greenhouse gases (Criterion 5.6), greenhouse gases calculation analysis, biodiversity and ecosystems, and people’s amenity (Criterion 6.1), both on and off-site.

Stakeholder consultation has a key role in identifying environmental impacts. The inclusion of consultation should result in improved processes to identify impacts and to develop any required mitigation measures.

For smallholder schemes, the scheme management has the responsibility to undertake impact assessment and to plan and operate in accordance with the results (refer to ‘Guidance for Independent Smallholders under Group Certification’, June 2010, and ‘Guidance on Scheme Smallholders’, July 2009 or its endorsed final revision)

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The Strategic Environment Study Result (KLHS) by the government, shall be placed as main consideration while conducting replanting.

Regulations related to the environment documents, are such as: 1. Government Regulation (PP) No. 27 of 2012 regarding Environment Per- mit 2. Regulation of the Minister of EnvironmentNo. 13 year 2010 regarding En- vironment Management and Monitoring Effort (UKL-UPL) and Environ- ment Management and Monitoring Effort (UKL-UPL) and Declaration Let- ter for Managing and Monitoring Environment (SPKL) 3. Regulation of the Minister of Environment No. 5 year 2012 regarding Envi- ronment Evaluation Document (DELH) 4. Regulation of the Minister of Environment No. 14 year 2010 regarding En- vironment Management and Monitoring Document (DPPL) 5. Regulation of the Minister of Environment No. 12 year 2007 regarding En- vironment Management and Monitoring Document for Business and or Ac- tivities, with Absence of Environment Management Document. 6. Regulation of the Minister of Environment No. 5 year 2012 regarding Types of Business Obliged to Have AMDAL 7. Regulation of the Minister of Environment No. 17 year 2012 regarding In- volvement of Community and Information Transparency in the AMDAL Process 8. Regulation of the Minister of Environment No. 8 year 2006 regarding Guidance for AMDAL Preparation 9. Decree of the Head of Bapedal No. No. 299 of 1996 regarding Technical Guidance of Social Aspects Study in Establishing AMDAL 10. Regulation of the Minister of Environment No. 11 year 2008 regarding Competence Requirements for AMDAL Preparation Documents and Re- quirements for Training Institutions in Conducting Training for AMDAL competence. 11. Regulation of the Minister of Environment No. 15 year 2013 regarding Measurement, Reporting and Verification for Mitigation Action of Climate Change

In the Regulation of the Minister of Environment No. 14 year 2010, the environment document is a document covering environment management and monitoring, and may be in the form of AMDAL, Environment Management and Monitoring Efforts (UKL-UPL), Declaration Letter for Managing and Monitoring Environment (SPKL), Environment Management and Monitoring Document (DPPL), Study to Evaluation on the Environment Impacts (SEMDAL), Envi- ronment Evaluation Study (SEL), Environment Information Performance (PIL), QMF: RSPO-007a-18(Rev.4.April 2019) RSPO Surveillance Assessment] Report PT Bakrie Sumatera Plantation – Kisaran Palm Oil Mill –

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CR CHECKLIST RESULTS OF VERIFICATION STATU S (C / NC / C WITH OBS.) Environment Evaluation Performance (PEL), Environment Management Doc- ument) (DPLH), Environment Management and Monitoring (RKL-RPL), Envi- ronment Evaluation Document (DELH), and Environment Audit

a. Has an EIA been conducted according to the scope of op- The company has EIA document i.e. Document of Environmental Evaluation C eration covering at minimum the following: (DELH) year 2011 and has been approve on 3 October 2011 with number  Building new roads, processing mills or other infra- No:1512.D/BLH-SU/BTL-A/2011 for estate and mill as large as 9,243 ha with structure; mill capacity i.e. 45 ton/hour. The document covering operational such as mill  Putting in drainage or irrigation systems; operational, infrastructure and waste liquid management. The company has  Replanting and/or expansion of planting areas; conduct environmental impact assessment in accordance with government  Management of mill effluents (Criterion 4.4); regulation. An environmental impact assessment has been conduct with  Clearing of remaining natural vegetation; stakeholder consultation to identify an impact.  Management of pests and diseased palms by controlled burning (Criteria 5.5 and 7.7). b. Has the EIA been conducted and documented according to local requirements? c. Does the assessment include consultation with relevant stakeholders to identify impacts and to develop any mitigation measures? 5.1.2 Environment management plan document to prevent negative impacts, its implementation report and revision (if the identification of impact requires changes in current company’s practices) shall be available. The company’s management shall appoint the responsible person(s) for the implementation of the document.

Where the identification of impacts requires changes in current practices, in order to mitigate negative effects, a timetable for change shall be developed and implemented within a comprehensive management plan. The management plan shall identify the responsible person/persons.

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CR CHECKLIST RESULTS OF VERIFICATION STATU S (C / NC / C WITH OBS.) a. Is there an environmental management plan in place? The company has environmental management plan that stated in the envi- C b. Is the environmental management plan documented to in- ronmental management plan document (RKL) and environmental monitoring clude the following: plan document (RKL). The documents covering information such as type of  Identification of responsible person(s); impact, monitoring of impact, source of impact, parameter to monitoring, aim  Potential impacts from current practices; of monitoring, method of monitoring, location of monitoring, period of moni-  Measures to mitigate negative impacts; toring, person in charge and related agency.  Timetable for change (where changes in current practices are required). c. Has the environmental management plan been implemented?

5.1.3 Environment monitoring plan document, its implementation report, and the corrective plan (if non-conformance arised from the monitoring result) shall be available. This plan is reviewed on two-yearly basis.

This plan shall incorporate a monitoring protocol, adaptive to operational changes, which shall be implemented to monitor the effectiveness of the mitigation measures. The plan shall be reviewed as a minimum every two years to reflect the results of monitoring and where there are operational changes that may have positive and negative environmental impacts. a. Does the plan incorporate a monitoring protocol? The company has been implemented the environmental management plan in NCR RSPO b. Is the monitoring protocol adaptive to operational changes? accordance with matrix of environmental monitoring and reporting the imple- 02521 c. Is the monitoring protocol implemented to monitor the effec- mentation periodically each semester to authority agency in accordance of tiveness of the mitigation measures? the national and local regulations. d. Is the plan reviewed at a minimum every two years to reflect the results of monitoring and where there are operational The company have not conduct review for mangement and monitoring plan changes that may have positive and negative environmental that has been assigned in the matrix of environmental management and impacts? monitoring plan (RKL-RPL) at least once every two years. This condition raised as Non-conformity

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

Guidance: This information gathering should include checking available biological records and consultation with relevant government departments, research institutes and interested NGOs if appropriate. Depending on the biodiversity values that are present, and the level of available information, some additional field survey work may be required.

Wherever HCV benefits can be realized outside of the management unit, collaboration and cooperation between other growers, governments and organizations should be considered

Sanctions in the protected wildlife case, may be taken through law enforcement in line with the existing regulations. The company should determine type of sanctions, based upon SOP or policy of the company, considering level of violations (capture, harm, keep, and kill) and category of the species (rare, endangered, and threat- QMF: RSPO-007a-18(Rev.4.April 2019) RSPO Surveillance Assessment] Report PT Bakrie Sumatera Plantation – Kisaran Palm Oil Mill –

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CR CHECKLIST RESULTS OF VERIFICATION STATU S (C / NC / C WITH OBS.) ened).

National regulations related to the protection of habitat and species, such as: 1. Act No. 5 year 1990 regarding Conservation on Biodiversity and its Ecosystems 2. Act No. 16 year 1992 regarding Quarantine for Animals, Fish and Plants 3. Act No. 5 year 1994 regarding Ratification of the United Nations on Convention to Biodiversity 4. Government Regulation No. 13 year 1994 regarding Wildlife Hunting 5. Government Regulation No. 68 year 1998 regarding Areas of Natural Sanctuary and Natural Conservation 6. Government Regulation No. 7 year 1999 regarding Preservation of Flora and Fauna (List of Protected Flora and Fauna is on the annex). 7. Regulation of the Minister of Forestry No.: P.48/Menhut-II/2008 regarding Guideline of Conflict Resolution between Human and Wildlife 8. Presidential Decree No. 43 year 1978 regarding Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) ratification.

5.2.1 (M) Record(s) on the results on Information shall be collated in a High Conservation Value (HCV) assessment that includes both the planted area itself and relevant wider landscape-level considerations (such as wildlife corridors) shall be available Specific Guidance: This information will cover: • Presence of protected areas that could be significantly affected by the grower or miller; • Conservation status (e.g. IUCN status), legal protection, population status and habitat requirements of rare, threatened, or endangered (RTE) species that could be significantly affected by the grower or miller; • Identification of HCV habitats, such as rare and threatened ecosystems, that could be significantly affected by the grower or miller;

Guidance: HCV Identification may be conducted internally (by the company, where the team leader shall be registered in the HCVRN-Assessors Licensed Scheme (ALS), through peer-review by the competent experts, prepared in accordance to the common Guidance for the identification of HCV 2013. If the company has no expert for assessing certain HCV type(s), then it may use the external assessor(s). The HCV assessor team needs to have experience in the assessed ecosystem to minimise inaccuracy risk of the HCV assessment. If possible, each external assessor who comes from outside the assessed areas should cooperate with the local or regional expert(s). The HCV report shall describe the composition and qualification of the assessor team in biological and social aspects.

This information gathering should include checking available biological records and consultation with relevant government departments, research institutes and interested NGOs if appropriate. Depending on the biodiversity values that are present, and the level of available information, some additional field survey work may be required.

Wherever HCV benefits can be realised outside of the management unit, collaboration and cooperation between other growers, governments and organisations should be considered. a. Has a High Conservation Value (HCV) assessment been The company has been conducted HCV assessment on April 2009 by Re- C conducted and cover the following: mark Asia. The HCV assessment covered protected areas inside land title,  Presence of protected areas that could be significantly status of conservation (IUCN, CITES, Government regulation) and identifica- affected by the grower or miller; tion of habitat of high conservation value. Based on report of HCV assess-  Conservation status (e.g. IUCN status), legal protec- ment, there are list of stakeholder for HCV assessment i.e company, local tion, population status and habitat requirements of ra- community, government, community leaders. There is also minutes of meet- re, threatened, or endangered (RTE) species that could ing for stakeholder consultation and documentation of public consultation. QMF: RSPO-007a-18(Rev.4.April 2019) RSPO Surveillance Assessment] Report PT Bakrie Sumatera Plantation – Kisaran Palm Oil Mill –

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CR CHECKLIST RESULTS OF VERIFICATION STATU S (C / NC / C WITH OBS.) be significantly affected by the grower or miller. The HCV assessment has been conduct checking include biological. Base  Identification of HCV habitats, such as rare and threat- on report of HCV assessment there is HCV 1 and HCV 4 i.e river border. ened ecosystems, that could be significantly affected The HCV assessment conducted refer to HCV toolkit that adopted on HCV by the grower or miller; toolkit Inodnesia year 2008. The company has map of HCV that has been b. Was the HCV assessment performed by a qualified HCV overlay with land title map and area map. assessor? c. Was the HCV assessment performed in consultation with Based on HCV assessment there is identification of HCV that the habitat for relevant stakeholders? RTE spesies i.e. Piasa river, Kuala Piasa estate and Block P93101. d. Does the HCV assessment include checking of available biological records? e. Does the HCV assessment include both the planted area itself and relevant wider landscape-level considerations (such as wildlife corridors)? f. Was the HCV assessment performed in accordance to the latest methodology available at global and national level? g. Are identified HCVs mapped? 5.2.2 (M) Where rare, threatened or endangered (RTE) species, and or other or HCVs, are present or are affected by plantation or mill operations, appropriate measures that are expected to maintain and/or enhance them shall be implemented through a management plan.

Specific Guidance: These measures will include: • Ensuring that any legal requirements relating to the protection of the species or habitat are met; • Avoiding damage to and deterioration of HCV habitats such as by ensuring that HCV areas are connected, corridors are conserved, and buffer zones around HCV areas are created; • Controlling any illegal or inappropriate hunting, fishing or collecting activities, and developing responsible measures to resolve human-wildlife conflicts (e.g. incur- sions by elephants). • Improving HCV, if possible, through management options, such as habitat enrichment.

a. Are HCVs and/or RTEs present? Based on HCV assessment there is identification of HCV that the habitat for C b. If HCVs and/or RTEs are present, has a management plan RTE spesies i.e. Piasa river, Kuala Piasa estate and Block P93101. containing appropriate measures that are expected to maintain and/or enhance them been prepared? The measures Based on result of HCV assessment, there is mangement and monitoring should include the following: plan year 2019 for area is a habitat for populations of threatened species, the  Ensuring that any legal requirements relating to the spread is limited or protected survives. Some of the management and moni- protection of the species or habitat are met; toring plans i.e. restoration of the habitat or vegetation in the riverside. The company has been conducted implementation of management and  Avoiding damage to and deterioration of HCV habitats monitoring plan such as: such as by ensuring that HCV areas are connected, corridors are conserved, and buffer zones around HCV  Monitoring of signboard every month. areas are created; - Kuala Piasa estate: Date April 2019 at division 1, signboard with good condition

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CR CHECKLIST RESULTS OF VERIFICATION STATU S (C / NC / C WITH OBS.)  Controlling any illegal or inappropriate hunting, fishing - Sei Baleh estate: Date March 2019 at division 2, signboard with or collecting activities, and developing responsible good condition measures to resolve human-wildlife conflicts (e.g. in-  Monitoring of flora and fauna every 4 month (BMA-FR-36 revision 00). cursions by elephants). - Kuala piasa estate: date 27 April 2019 at block 95101: dragonfly, buterfly, prenjak bird, and monkey, etc. c. Are the measures contained in the management plan ac- - Gurarch Batu estate: date 11 February 2019 at block P11301: Pakis tively implemented to maintain and/or enhance HCV val- udang, Senggani, Teki, etc ues? - Sei Baleh estate: date 21 March 2019 at division 3: Rumput teki, d. Are the HCV values and the presence of RTEs periodically putri malu, pakis udang, prenjak bird, kutilang bird, terocok bird, etc monitored? - Serbangan estate: date 18 March 2019 at division 1: Rumput teki, e. Are the field inspections conducted regularly to ensure im- putri malu, pakis udang, cobra, gagak bird, tengkek bird, pig, etc plementation of mitigation plan (especially along areas bor-  Socialization of HCV regularly to employee, staff and local community dering natural area)? - Kuala piasa estate: socialization of HCV to Tinggi Raja village and Terusan Tengah village on June 28, 2018 with 13 participants - Gurarch Batu estate: socialization of HCV to Perhutaan Silau village on July 11, 2018 - Sei Baleh estate: socialization of HCV to Perk. Sei Baleh village on June 25, 2018 with 12 participants - Serbangan estate: socialization of HCV to worker on June 15, 2018 with 19 participants

5.2.3 There shall be a programme to regularly educate the workforce about the status of these RTE species, and appropriate disciplinary measures shall be instigated in accordance with company rules and national law if Program(s) to socialize the status of protected, rare, threatened or endangered (RTE) to all workers shall be available, including records of appropriate sanction disciplinary measures to any individual working for the company who is found to capture, harm, collect or kill these species. a. Does the company have policies or rules to protect RTE The company has been conducted regularly inspection to ensure implemen- C species? tation of mitigation plan that has issued. The company has policy of sustain- b. Is there a programme to regularly educate the workforce able of palm oil assigned 28 February 2017 by CEO BSP Kisaran. The policy about the status of the RTE species? regulated about protected of RTE species. The company has monthly pro- c. Is there evidence or action taken to implement the rules and gramme such as socialization related status of RTE species to employee, programs? E.g. Inspections conducted to check no staff and community. The company conducted field inspection to check the traps/snares put up within or nearby areas. traps inside location of HCV that stated in monthly report of HCV findings. d. Have appropriate disciplinary measures been imposed in accordance with company rules and national law, should The procedure for management and monitoring of HCV (BMA-09 revision 01 any individual working for the company is found to have effective date 3 November 2016 has been stated about the sanction refer to captured, harmed, collected or killed any RTE species? regulation if any employee shown to do things that are prohibited i.e not allowed to trade wildlife both protected and unprotected. The company has management and monitoring plan of HCV year 2018. The QMF: RSPO-007a-18(Rev.4.April 2019) RSPO Surveillance Assessment] Report PT Bakrie Sumatera Plantation – Kisaran Palm Oil Mill –

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CR CHECKLIST RESULTS OF VERIFICATION STATU S (C / NC / C WITH OBS.) management and monitoring plan described about location of HCV, clasification, status and comment, corrective action, person incharge, due date and cost. The company has record of monthly monitoring report for HCV area. The company has HCV area set aside with local communitiy i.e. local graveyard of Terusan Tengah village and Tinggi Raja village on January 2018. The company has HCV map. The company has conduct socialization of HCV to Tinggi Raja village and Terusan Tengah village on June 28, 2018 with 13 participants. Kuala Piasa estate has been able to show evidence of agreement between the company and the local community of Terusan Tengah village, Tinggi Ra- ja village (Kuala Piasa estate) and Subur village, Banjar village (Serbangan estate) to keep HCV area dated June 15, 2017. 5.2.4 Once the management plan is prepared, continuous monitoring documentation and report regarding the status of the RTE and HCVs are affected by the operations of the plantation and palm oil mill shall be available, and the results of monitoring are to be used to follow-up on the improvement of the management plan.

Where a management plan has been created there shall be ongoing monitoring:  The status of HCV and RTE species that are affected by plantation or mill operations shall be documented and reported;  Outcomes of monitoring shall be fed back into the management plan. Specific Guidance: For 5.2.4: The result of HCV monitoring may become considerations while reviewing HCV management plan.

a. Does the management plan contain ongoing monitoring of The company has been conducted regularly inspection to ensure implemen- C status of HCV and RTE species that are affected by plantatation of mitigation plan that has issued. The company has policy of sustain- tion or mill operations? able of palm oil assigned 28 February 2017 by CEO BSP Kisaran. The poli- b. Is the status documented and reported? cy regulated about protected of RTE species. The company has monthly c. Are the outcomes of monitoring fed back into the manage- programme such as socialization related status of RTE species to employment plan? ee, staff and community. The company conducted field inspection to check the traps inside location of HCV that stated in monthly report of HCV findings. The procedure for management and monitoring of HCV (BMA-09 revision 01 effective date 3 November 2016 has been stated about the sanction refer to regulation if any employee shown to do things that are prohibited i.e not allowed to trade wildlife both protected and unprotected. The company has management and monitoring plan of HCV year 2018. The management and monitoring plan described about location of HCV, clasification, status and comment, corrective action, person incharge, due date and cost. The company has record of monthly monitoring report for HCV area. The company has HCV area set aside with local communitiy i.e. local grave- QMF: RSPO-007a-18(Rev.4.April 2019) RSPO Surveillance Assessment] Report PT Bakrie Sumatera Plantation – Kisaran Palm Oil Mill –

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CR CHECKLIST RESULTS OF VERIFICATION STATU S (C / NC / C WITH OBS.) yard of Terusan Tengah village and Tinggi Raja village on January 2018. The company has HCV map. The company has conduct socialization of HCV to Tinggi Raja village and Terusan Tengah village on June 28, 2018 with 13 participants. Kuala Piasa estate has been able to show evidence of agreement between the company and the local community of Terusan Tengah village, Tinggi Ra- ja village (Kuala Piasa estate) and Subur village, Banjar village (Serbangan estate) to keep HCV area dated June 15, 2017. 5.2.5 Where HCV areas overlapped with an identified set-asides with existing rights of local communities land have been identified, there shall be evidence of a negotiated agreement that optimally safeguards both the their HCVs and the local community’s these rights.

Specific Guidance: For 5.2.5: If a negotiated agreement cannot be reached, there should be evidence of sustained efforts to achieve such an agreement. These could include third party arbitration (see Criteria 2.3, 6.3 and 6.4). Note: Operators need to consider a variety of land management and tenure options to secure HCV management areas in ways that also secure local peoples’ rights and livelihoods. Some areas are best allocated to community management and secured through customary or legal tenures, Growers need to consider a variety of land management and tenure options to secure HCV management areas in ways that also secure local people’s rights and livelihoods. Some areas are best allocated to community management and secured through customary or legal tenures in certain period. In other cases co-management options can be considered. Where communities are asked to relinquish rights so that HCVs can be maintained or enhanced by the companies or State agencies, then great care needs to be taken to ensure that communities retain access to adequate land and resources to secure their basic needs; all such relinquishment of rights must be subjected to their free, prior, and informed consent (see Criteria 2.2 and 2.3). a. Is there HCV set-asides with existing rights of local commu- The company has HCV area set aside with local communitiy i.e. local grave- C nities? yard of Terusan Tengah village and Tinggi Raja village on January 2018. The b. Who are the affected communities? company has HCV map. The company has conduct socialization of HCV to c. Is the identified HCV areas mapped? Tinggi Raja village and Terusan Tengah village on June 28, 2018 with 13 d. Is there evidence of stakeholder consultation and negotiat- participants. ed agreement, in accordance to FPIC principles, with local community to optimally safeguard both the HCVs and rights Kuala Piasa estate has been able to show evidence of agreement between of local communities? the company and the local community of Terusan Tengah village, Tinggi Ra- e. If a negotiated agreement cannot be reached, is there evi- ja village (Kuala Piasa estate) and Subur village, Banjar village (Serbangan dence of sustained efforts to achieve an agreement? Refer estate) to keep HCV area dated June 15, 2017. to specific guidance for 5.2.5. Gurarch Batu estate has been able to show evidence of agreement between the company and the local community of Perhutaan Silau village to keep HCV area dated July 11, 2018. Sei Baleh estate has been able to show evidence of agreement between the company and the local community of Suko Rejo village to keep HCV area dated February 11, 2019.

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CR CHECKLIST RESULTS OF VERIFICATION STATU S (C / NC / C WITH OBS.) Serbangan estate has been able to show evidence of agreement between the company and the local community of Subur village and Banjar villageto keep HCV area dated June 15, 2018. 5.3 Waste is reduced, recycled, re-used and disposed of in an environmentally and socially responsible manner.

5.3.1 (M) A documented identified source of all waste and pollution, shall be available. All waste products and sources of pollution shall be identified and documented.

a. Is there a registry/list of waste products produced? The company has list of waste and source of waste. The company has inven- C b. Is there a registry/list of pollution sources? tory of chemical source and containers and kept in the hazardous and toxic waste storage.

5.3.2 (M) All chemicals and their containers shall be There shall be evidence that all chemicals and their empty containers are disposed of responsibly.

a. Is there an inventory of chemicals and their containers that The Company has temporary storage licenses to keep the hazardous and NCR are used and kept on site? toxic waste, i.e. Head Decree of Asahan District Number: RSPO b. How are chemicals and their containers stored and dis- 660.1/0464/LH/2014 dated June 16, 2014 about the temporary storage per- 02522 posed off? Is it in accordance to best practices? (as pre- mit of hazardous and toxic waste material PT BSP Kisaran. The decree valid scribed by manufacturers’ labels, local requirement, national until 5 years from the register date. or international best practice) c. Are collection and disposal records of chemicals and their All chemicals and their containers have been disposed of responsibly, such containers maintained? as hazardouse waste from agrochemical container, usage accu, usage tonner etc.

The company has management and disposal plan to reduce pollution. It is explain about identification and monitoring source of waste and pollution, management and disposal cooperation with third parties. The company has been realize the management and disposal plan cooperation with PT Amindy Barokah. The company does not conduct disposed off waste using open fire.

Based on document verification, it is known that the company has not been able to show recordings of all chemical waste and its container has been disposed of responsibly where found packaging of hazardous and toxic material (KCl fertilizer sacks) in the housing area (Serbang estate) and the last hazardous and toxic waste shipment record is November 2017. This condition raised as Non-conformity (NCR RSPO 02522).

5.3.3 A documented waste management and disposal plan to avoid or reduce pollution and its implementation shall be available. shall be documented and implemented.

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CR CHECKLIST RESULTS OF VERIFICATION STATU S (C / NC / C WITH OBS.) Guidance: The waste management and disposal plan should include measures for: • Identifying and monitoring sources of waste and pollution. • Improving the efficiency of resource utilisation and recycling potential wastes as nutrients or converting them into value-added products (e.g. through animal feeding programmes). • Appropriate management and disposal of hazardous chemicals and their containers. Surplus chemical containers should be reused, recycled or disposed of in an environmentally and socially responsible way based on using best available practices (e.g. returned to the vendor or cleaned using a triple rinse method) and existing regulations.. This is to prevent pollutions to the such that there is no risk of contamination of water sources or risk to human health. The disposal instructions on the manufacturers’ labels should be adhered to.

Use of open fire for waste disposal should be avoided.

Regulations relate to waste management, such as: 1. Government Regulation No. 18 year 1999 regarding Management of Toxic and Hazardous Waste (B3) 2. Government Regulation No. 85 year 1999 regarding Amendment of Government Regulation No. 18 year 1999 regarding Management of B3 (the annex shows a list of B3 from specific and non-specific sources, expired chemicals, leakage, remaining containers and waste of unspecified products). 3. Government Regulation No. 82 year 2001 regarding Management of Water Quality and Control of Water Pollution. This includes criteria for water quality, and requirements for utilising and disposing waste water) 4. Government Regulation No. 81 year 2012 regarding Management of Domestic Waste 5. Decree of the Minister of Environment No. 51 year 1995 regarding Waste Water Standard for Industries 6. Decree of the Minister of Environment No. 28 year 2003 regarding Technical Guidance for Study for Utilising Palm Oil Mill Effluent (POME) on Oil Palm Plantation. 7. Decree of the Minister of Environment No. 29 year 2003 regarding Guidance for Permit Requirements and Administration for Utilising POME on Oil Palm Plantation 8. Decree of the Minister of Environment No. 112 year 2003 regarding Domestic Waste Water Standard 9. Decree of the Head of Bapedal No. 255/Bapedal/08/1996 regarding Procedure and Requirements for Storing and Collecting Used Oil 10. Guidance for Use of Pesticides, Directorate General of Infrastructure and Facilities, Ministry of Agriculture, 2011

a. Is there a documented waste management and disposal A waste management plan been sighted at PT. BSP Kisaran palm oil mill C plan to avoid or reduce pollution? and estate which includes hazardouse waste management, solid waste man- b. Does the waste management and disposal plan, at mini- agement and sewage management. The mitigation measures identified as mum, include measures for: recycle of waste, no open burning, disposal of domestic waste and providing  Identifying and monitoring sources of waste and pollu- enough bins at workers houses. tion?  Improving the efficiency of resource utilisation and re- Sewage management is not directly discharge to waterway, septic tanks at cycling potential of wastes as nutrients or converting each house and replace them with new units. This will be monitored by peri- them into value-added products (e.g. through animal odic visit at housing area. feeding programmes)?  Appropriate management and disposal of hazardous Based on site verification to Serbangan estate, there is not found that the chemicals and their containers?  Reduction, re-use and recycle of waste? QMF: RSPO-007a-18(Rev.4.April 2019) RSPO Surveillance Assessment] Report PT Bakrie Sumatera Plantation – Kisaran Palm Oil Mill –

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CR CHECKLIST RESULTS OF VERIFICATION STATU S (C / NC / C WITH OBS.) c. Is there evidence that the plan has been implemented? worker not re-use the fertilizer container (sack) around the emplacement. d. Is there evidence that waste has not been disposed off using open fire? 5.4 Efficiency of fossil fuel use and the use of renewable energy is optimised.

5.4.1 A plan for improving efficiency of the use of fossil fuels and to optimise renewable energy shall be in place and monitored.

Guidance:

Renewable energy use per tonne of Crude Palm Oil (CPO) or palm product in the mill should be monitored.

Direct fossil fuel use per tonne of CPO or Fresh Fruit Bunches (FFB) should be monitored.

Energy efficiency should be taken into account in the construction or upgrading of all operations.

Growers and millers should assess the direct energy use of their operations, including fuel and electricity, and energy efficiency of their operations. This should include estimation of fuel use by on-site contract workers, including all transport and machinery operations.

If possible, The feasibility of collecting and using biogas should be studied if possible. a. Is there a plan for improving efficiency of the use of fossil A plan for improving efficiency of the use of fossil fuels and to optimise re- C fuels and to optimise renewable energy? newable energy have been in place and monitored. The company has a plan b. Has the plan been implemented and is it monitored? for improving efficiency of the use of fossil fuel and optimize renewable ener- c. Does the monitoring system encompass the following : gy usage. Records of renewable energy usage are available on document  Renewable energy use/tCPO or palm product; “data of fibre and shell usage”. The company has record of fuel usage year  Direct fossil fuel use/tCPO or tFFB; 2018 is 73,293.30 litre.  Estimated fuel use by on-site contract workers and transport and machinery operations;  Electricity use in operations. d. Was energy efficiency taken into account during the construction or upgrading of all operations? e. Has studies on the feasibility of collecting and using biogas been carried out?

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

Guidance: Clause 11 of the Government Regulation No. 4 year 2001 regarding Control of Environmental Damage and or Pollution associated with Forest and or Land Fire, describes that the activities causing forest and or land fire are including land clearing in forestry, plantation, agriculture, transmigration, mining, tourism which are carried out through burning. Therefore, the use of fire is prohibited in those activities, unless for unavoidable circumstances or specific purposes, such as forest fire control, pest and disease control, and habitat management of flora and fauna. Implementation of restricted burning shall be authorised by the relevant agency.

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5.5.1 (M) Records of There shall be no land clearing with zero preparation by burning shall be available, other than in specific situations as identified in the ‘Guidelines for the Implementation of referring to the ASEAN Policy on Zero Burning’ 2003, or other recognised techniques based on the existing regulations comparable guidelines in other regions.

Guidance: Fire should be used only where an assessment has demonstrated that it is the most effective and least environmentally damaging option for minimising the risk of severe pest and disease outbreaks, and exceptional levels of caution should be required for use of fire on peat. This should be subject to regulatory provisions under respective national environmental legislation.

Extension/training programmes for associated smallholders may be necessary. a. Does the company have a zero burning policy or any state- Consistent with the previous audit (ASA-03), the company has established a C ment on zero burning? zero burning policy signed by top management and not used fire for prepar- b. Does the company have SOPs for land preparation which ing land for replanting so assessment document not available. There is evi- mentions zero burning? dence that during field visit that there is no fire using for replanting or any c. Was land prepared using the burn method? If yes, was it other purposes based on the specific situations identified in the ‘Guidelines for the Implementation of the ASEAN Policy on Zero Burn- ing’ 2003, or comparable guidelines in other regions? d. Has the policy been implemented throughout the operations? e. Is there training programmes for associated smallholders on zero burning where appropriate?

5.5.2 Where fire has been used for eradication of pest during preparing land for replanting, the records of the analysis of the use of fire and permit from the authorised agency shall be available. there shall be evidence of prior approval of the controlled burning as specified in ‘Guidelines for the Implementation of the ASEAN Policy on Zero Burning’ 2003, or comparable guidelines in other regions. Specific Guidance: For 5.5.2: Fire should be used only where an assessment has demonstrated that it is the most effective and least environmentally damaging option for minimizing the risk of severe pest and disease outbreaks, and exceptional levels of caution should be required for use of fire on peat. This should be subject to regulatory provisions under respective national environmental legislation. This should refer to the ASEAN Policy on Zero Burning (2003) and existing national environment regulations. The company shall have procedure and records of emergency response to ground fire, including the means and facilities. a. Where fire has been used for preparing land for replanting, NA NA is there evidence of prior approval of the controlled burning as specified in ‘Guidelines for the Implementation of the ASEAN Policy on Zero Burning’ 2003, or comparable guidelines in other regions? b. What was the justification for using fire?

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CR CHECKLIST RESULTS OF VERIFICATION STATU S (C / NC / C WITH OBS.) 5.6 Plans to reduce pollution and emissions, including greenhouse gases, are developed, implemented and monitored. Preamble: Growers and millers commit toreport reporting on operational greenhouse gas emissions. However, it is recognised that these significant emissions cannot be monitored completely or measured accurately with current knowledge and methodology. It is also recognised that to reduce or minimize these emissions is not always practical or feasible.

That it is not always feasible or practical to reduce or minimise these emissions.

Growers and millers commit to an implementation period until the end of December 2016 for promoting best practices in reporting to the RSPO, and thereafter to public reporting. Growers and millers make this commitment with the support of all other stakeholder groups of the RSPO. 5.6.1 (M) An assessment of all polluting activities shall be conducted, including gaseous emissions, particulate/soot emissions and effluent. Document(s) assessing pollution and emission sources, including gaseous, particles, soot emissions and effluent, shall be available (see Criterion 4.4). Guidance: Where practically feasible, operations should follow best management practices to measure and reduce emissions. Advice on this is available from the RSPO. Specific Guidance: For 5.6.1: Assessment document covers identification of pollutant and emission sources, and evaluation of potential pollution level. a. Has an assessment of all polluting activities been conduct- The company has identification of source emission, polluting from entire ac- C ed including gaseous emissions, particulate/soot emissions tivity, and the company has conduct identification for activity that produced and effluent (see Criterion 4.4)? emission and pollution dated March 13, 2019. The company has mitigation b. Is there a documented list of all identified polluting activi- program to reduce pollution and greenhouses gassess emission year 2018 ties? & 2019. The mitigation plan covered information i.e. goals, target and time period to reduce emission and pollution. Example, realization mitigation ei: used shell (9,241.48 ton) and fibre (21,563.45 ton) for fuel 2018, monitoring emmision test, monitoring used chemical, monitoring fuel usage and land aplication (184,335 m3) 2018.

5.6.2 (M) Significant pollutants and greenhouse gas (GHG) emissions shall be identified, and plans to reduce or minimise them implemented. Specific Guidance: For 5.6.2: Plans will include objectives, targets and timelines. These should be responsive to context and any changes should be justified. Examples of reducing greenhouse gas emission are including empty bunch application, effluent land application, efficiency of fertilizer use, fuel efficiency, compost application and or methane capture.

For 5.6.2 and 5.6.3: The treatment methodology for POME (Palm Oil Mill Effluent) will be recorded.

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CR CHECKLIST RESULTS OF VERIFICATION STATU S (C / NC / C WITH OBS.) a. Is there a documented list of all identified significant pollu- The Company has conduct calculation of GHG emissions for 2018 using C tants and GHG emissions? GHG Calculator version 3.0.1. The company has sent evidence monitoring of b. Are there plans to reduce or minimise the identified pollu- emission of pollutans came from estate and mill activity. The company has tants and GHG emissions? been conduct reporting of GHG calculation to RSPO. The company has been c. Do the plans include objectives, targets and timelines for conduct GHG calculation in accordance with Palm GHG version 3.0.1. reduction that are responsive to context? d. Are the plans being implemented? Was there any changes? There is a monitoring system has been developed, with regular reporting on Is it justified? progress for these significant pollutants and emissions from estate and mill e. Is the treatment methodology for POME recorded? (refer to operations, using appropriate tools and record of monitoring plan can be C 4.4.3) seen on Monitoring plan year 2019. The result of GHG calculation describe in the section 5.4 above.

5.6.3 A monitoring plan and results of system shall be in place, with regular reporting on progress for these significant emission and pollutants and emissions from estate and mill operations, using appropriate methods, shall be available tools.

Specific Guidance: For 5.6.3 (GHG): For the implementation period until December 31st 2016, an RSPO-endorsed modified version of PalmGHG which only includes emissions from operations (including land use practices) can be used as a monitoring tool.

For 5.6.3: In addition, during the implementation period, growers will start to assess, monitor and report emissions arising from changes in carbon stocks within their operations, using the land use in November 2005 as the baseline. The implementation period for Indicator 5.6.3 is the same implementation period for Criterion 7.8.

During the implementation period, reporting on GHG will be to a relevant RSPO working group (composed of all membership categories) which will use the information reported to review and fine tune the tools, emission factors and methodologies, and provide additional guidance for the process. Public reporting is desirable, but remains voluntary until the end of the implementation period.

During the implementation period the RSPO working group will seek to continually improve PalmGHG, recognising the challenges associated with measuring GHG and carbon stock.

PalmGHG or RSPO-endorsed equivalent will be used to assess, monitor and report GHG emissions. Parties seeking to use an alternative to PalmGHG will have to demonstrate its equivalence to the RSPO for endorsement. Methodology for calculating GHG refers to 7.8.1.

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CR CHECKLIST RESULTS OF VERIFICATION STATU S (C / NC / C WITH OBS.) a. Is there a system in place to monitor emission of pollutants The Company has conduct calculation of GHG emissions for 2018 using C including greenhouse gases from estate (plantation) and GHG Calculator version 3.0.1. The company has sent evidence monitoring mill operations? of emission of pollutans came from estate and mill activity. The company b. Is there regular reporting of the monitoring outcomes? How has been conduct reporting of GHG calculation to RSPO. The company has often and to whom is reporting done? been conduct GHG calculation in accordance with Palm GHG version 3.0.1. c. Is the monitoring and reporting conducted using appropriate tools? What tool is being used to assess, monitor and re- There is a monitoring system has been developed, with regular reporting on port on GHG emissions? progress for these significant pollutants and emissions from estate and mill Please refer to specific guidance for GHG requirements. operations, using appropriate tools and record of monitoring plan can be seen on Monitoring plan year 2019. The result of GHG calculation describe in the section 5.4 above.

Principle 6: Responsible Consideration of Employees and of Individuals and Communities Affected by Growers and Millers

6.1 Aspects of plantation and mill management that have social impacts, including replanting, are identified in a participatory way, and plans to mitigate the negative impacts and promote the positive ones are made, implemented and monitored, to demonstrate continual improvement. 6.1.1 (M) A social impact assessment (SIA) including records of meetings shall be documented. Guidance:

Identification of social impacts may use AMDAL as part of the process, however it is the company’s responsibility to provide objective and proper evidence to the audit team that entire requirements in the social impact assessment cover all aspects of estate and mill operations, and their changes along the time. should be carried out by the grower with the participation of affected parties, including women and migrant workers as appropriate to the situation. Identification of social impacts should be carried out by the grower with the participation of affected parties, including women and migrant workers as appropriate to the context.

The involvement of independent experts should be sought where this is considered necessary to ensure that all impacts (both positive and negative) are identified.

Participation in this context means that affected parties are able to express their views through their own representative institutions, or freely chosen spokespersons, during the identification of impacts, reviewing findings and plans for mitigation, and monitoring the success of implemented plans.

Potential social impacts may result from activities such as: building new roads, processing mills or other infrastructure; replanting with different crops or expansion of planting area; disposal of mill effluents; clearing of remaining natural vegetation; changes in employee numbers or employment terms; smallholder schemes.

Plantation and mill management may have social impacts (positive or negative) on factors such as:  Access and use rights;  Economic livelihoods (e.g. paid employment) and working conditions;  Subsistence activities;  Cultural and religious values;  Health and education facilities;  Other community values, resulting from changes such as improved transport /communication or arrival of substantial migrant labour force.  Traditional or customary rights owned by the local community, if identifiable QMF: RSPO-007a-18(Rev.4.April 2019) RSPO Surveillance Assessment] Report PT Bakrie Sumatera Plantation – Kisaran Palm Oil Mill –

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CR CHECKLIST RESULTS OF VERIFICATION STATU S (C / NC / C WITH OBS.)  Welfare of workers/labour and women, children and vulnerable group  Contribution to the local development, including improvement of human resources, local and customary communities.

The review can be done (once every two years) internally or externally. Regulations relating to identification of environmental and social key issues including indigenous rights and methodology to collect data and utilize the results, adopted from related regulations, such as: 1. Government Regulation No. 27 year 2012 regarding Environment Permit 2. Regulation of the Minister of Environment No. 17 year 2012 regarding Involvement of Community and Information Transparency in AMDAL Process 3. Regulation of the Minister of Environment No. 8 year 2006 regarding Guidance for AMDAL Preparation 4. Decree of the Head of Bapedal No. No. 299 year 1996 regarding Technical Guidance for Social Aspect Study in AMDAL Preparation 5. Regulation of Minister of Home Affairs No.52 year 2014 regarding Guidance on the Recognition and Protection of the Indigenous People 6. Regulation of the State Minister of Agrarian Affairs/Head of the Land National Agency No. 5 year 1999 on Guidelines for the Settlement of Problems Related to the Communal Reserved Land of the Customary Law Abiding Community a. Has an SIA been conducted? When was the last SIA con- PT BSP has documented Social Impact Assessment in 2011 by a team of C ducted? quality safety and environment. SIA making process and the findings have b. Is the process in conducting the SIA and the findings docu- documented and reported in the document SIA. Based on the photos and at- mented? tendant lists available in the SIA report, it can be seen that the preparation of c. Does the SIA cover all of the potential impact factors, in- the social impact has involved community participation around the estate, cluding: such as community leaders and local village officials.  Access and use rights; The SIA has covered all the potential impacts of factors ,i.e :  Economic livelihoods (e.g. paid employment) and 1. Increased public education around working conditions; 2. The gap qualified labor needs  Subsistence activities; 3. Migration of people into wilayahdi around PT.BSP  Cultural and religious values; 4. Insufficient resources of agricultural land and plantation  Health and education facilities; 5. Change livelihoods  Other community values, resulting from changes such 6. Changes in income as improved transport /communication or arrival of 7. Financial Institutions, both formal and non -formal, including banks and substantial migrant labour force. cooperatives 8. Social capital 9. Improved rural infrastructure (roads, transport, communications, religious facilities, sports facilities, etc) 10. Health 11. Workplace safety

6.1.2 (M) There shall be evidence that the assessment has been conducted done with the participation of affected parties.

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CR CHECKLIST RESULTS OF VERIFICATION STATU S (C / NC / C WITH OBS.) a. Does the assessment involve consultation with the affected Based on the photos and attendant lists available in the SIA report, it can be C parties? Who are the affected parties? seen that the preparation of the social impact has involved community partic- b. Is there record of how the participatory assessment has ipation around the estate, such as community leaders and local village offi- been conducted? Were the affected parties able to express cials. their views through their own representative institutions, or freely chosen spokespersons, during the identification of impacts, review of findings and planning for mitigation?

6.1.3 (M) Plans for management and monitoring of social impacts to avoid or reduce negative impacts and promote positive ones, based on social impact assessment, through consultation with the affected parties, shall be available, avoidance or mitigation of negative impacts and promotion of the positive ones, and monitoring of impacts identified, shall be developed in consultation with the affected parties, documented and timetabled, including responsibilities for implementation. a. Is there any documented record to outline the plan on miti- There is an impact assessment involving the affected communities. The C gation, implementation and monitoring according to the SIA communities affected are the landowners and the people residing in villages report? around the site of PT. BSP. There is information from the public and based b. Have plans for avoidance or mitigation of negative impacts on the SIA document, that participatory assessment carried out by the meth- and promotion of the positive ones, and monitoring of im- od of Focus Group Discussion with affected communities. pacts been developed? c. Have these plans been documented, with clear timetables? The company has developed a social management plan that is implemented Is the timeline reasonable? once a year based on stakeholder inputs on external public communication d. Have the persons responsible for implementation of the activities of Pondok Bungur Village and Subur Village for Serbangan Estate; plans been identified? Tanah Raja Estate from Dadi Mulyo Village and Ka-ranganyar Village, Sei Baleh Estate from Plantation Sei Baleh Village; Gurah Batu Estate from Parhutaan Silau Village and Taman Sari Village; Kuala Piasa Estate from Padang Sari Village, Tinggi Raja Village, Sum-ber Harpan Village, Terusan Tengah Village and Piasa Ungu Village. Vil-lage heads given a questionnaire to determine the impact of the compa-ny's presence on social, cultural, economic and health aspects. For the 2019 social management plan implemented in January 2019. 6.1.4 The documented plan for management and monitoring of social impacts, shall be reviewed at least on two-yearly basis. If necessary, the plan should be updated. The plans shall be reviewed as a minimum once every two years and updated as necessary, in those cases where the review has concluded that changes should be made to current practices. There shall be evidence that the review process includes the participation of all affected parties.

Specific Guidance: For 6.1.3 and 6.1.4: Plan for management and monitoring of social impacts shall be established to avoid or reduce negative impacts and promote the positive ones, and monitoring of identified impacts shall be developed in consultation with the affected parties, documented and timetabled, including responsibilities for implementation. Methodology to identify customary right and local community and social impacts assessment can be made with the following: a. Document review b. Field observation c. Interview d. FGD (Focus Group Discussion)

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CR CHECKLIST RESULTS OF VERIFICATION STATU S (C / NC / C WITH OBS.) e. Participatory mapping

These involve participation of the community to define potential social impacts and management recommendation. The process refers to Regulation of the Minister of Environment No. 17 year 2012 regarding Community involvement and Information Transparency in the Process of Environment Impact Assessment (SEIA).

a. Is the plan reviewed every two years? There is an impact assessment involving the affected communities. The C b. Has the plan been updated as necessary (i.e. in cases communities affected are the landowners and the people residing in villages where the review has concluded that changes should be around the site of PT. BSP. There is information from the public and based made to current practices)? on the SIA document, that participatory assessment carried out by the meth- c. Have the changes to the plan been implemented? od of Focus Group Discussion with affected communities. d. Is there evidence that the review has been done with the participation of the affected parties? The company has developed a social management plan that is implemented e. Has the process been recorded/documented? once a year based on stakeholder inputs on external public communication activities of Pondok Bungur Village and Subur Village for Serbangan Estate; Tanah Raja Estate from Dadi Mulyo Village and Ka-ranganyar Village, Sei Baleh Estate from Plantation Sei Baleh Village; Gurah Batu Estate from Parhutaan Silau Village and Taman Sari Village; Kuala Piasa Estate from Padang Sari Village, Tinggi Raja Village, Sum-ber Harpan Village, Terusan Tengah Village and Piasa Ungu Village. Vil-lage heads given a questionnaire to determine the impact of the compa-ny's presence on social, cultural, economic and health aspects. For the 2019 social management plan implemented in January 2019. 6.1.5 Particular attention shall be paid to the impacts of smallholder schemes (where the plantation includes such a scheme).

a. Are there schemed smallholders involved? There is no cooperation with group of farmers in the company activities, but C b. Have they been considered and involved in the whole pro- there are people who settled at the company site. The surrounding commu- cess of the SIA? nities have been involved in the preparation of the SIA as a re-source of in- c. What are the main impacts affecting these smallholders? formation. The main impact for the community is to increase employment.

6.2 There are open and transparent methods for communication and consultation between growers and/or millers, local communities and other affected or interested parties. 6.2.1 (M) Communication and consultation Consultation and communication procedures shall be documented.

Guidance: Decisions that the growers or mills are planning to make should be made clear, so that local communities and other interested parties understand the purpose of the communication and/or consultation.

Communication and consultation mechanisms should be designed in collaboration with local communities and other affected or interested parties. These should consider the use of appropriate existing local mechanisms and languages. Consideration should be given to the existence/formation of a multi-stakeholder forum. Commu- nications should take into account differential access to information by women as compared to men, village leaders as compared to day labourers, new versus established community groups, and different ethnic groups.

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CR CHECKLIST RESULTS OF VERIFICATION STATU S (C / NC / C WITH OBS.) In these communications, consideration should be given to involve involving third parties, such as disinterested community groups, NGOs, or government (or a combination of these), to facilitate smallholder schemes and communities, and others as appropriate, in these communications. a. Does the company maintain a list of local communities and The company owns and maintains a list of local stakeholders (communities) C other affected or interested parties? around the company updated at May 1st 2019. The company has the SOP b. Is there SOP being developed by the company for commu- communication and consultation between the company and the local com- nication and consultation between the company and the lo- munity and those affected by other interested namely SOP Communication cal communities and other affected or interested parties? Participation and Consultation Internal and External No. BMH-03, Rev 06, c. Is the FPIC approach incorporated in the SOP for commu- dated June 13, 2016. nication and consultation with the local communities and other affected or interested parties? The procedure aims to regulate the mechanism of communication, participa- d. Has the SOP been developed together with the local com- tion and consultation of the problems that occur and to ensure that any prob- munities and other affected or interested parties using ap- lems that exist are processed and followed up with corrective action or trou- propriate existing local mechanisms and in languages un- bleshooting for continuous improvement. SOP established by considering the derstood by these parties? interests of local communities, where they can apply for assistance for the e. Has the SOP been socialized with the local communities activities of micro enterprise development and socio-cultural activities. The and other affected or interested parties taking into account SOP drafted in the Indonesian language that understood by the local com- the differential access to information by women as community. pared to men, village leaders as compared to day labourers, new versus established community groups, and different ethnic groups? f. Have interviews with affected parties been carried out to verify that the SOPs are effective?

6.2.2 The company shall have official(s) who is responsible for consultation and communications with parties. A management official responsible for these issues shall be nominated. a. Who in the company is appointed to be responsible for The procedure has been prepared by considering women's interests and C communication and consultation with the affected parties? public interests are marginal, without any discrimination. The company's b. Has the position been made official with clear and proper CSR program is no discrimination of gender, religion, race etc. The Company job description? has appointed PIC Communications, i.e. HR and area Head Division and staf c. Have the affected parties been made aware and have ac- i.e. Reza Husen Suregar (CSR Departement) Yusri Helmy name Saros and cess to the person in charge? Ismi Bebi Lestari Harahap (Industrial Relations and Legal).

Job description of PIC Communication are:  Communicate with stakeholders  To coordinate with operating unit leaders and the regional coordinator of CSR  Ensure a harmonious relationship with the community  To identify and anticipate every obstacle in CSR activities  Prepare and submit report.

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CR CHECKLIST RESULTS OF VERIFICATION STATU S (C / NC / C WITH OBS.) 6.2.3 The company shall have a list of stakeholders, records of all communications, including confirmation of receipt and that efforts are made to ensure understanding by affected parties, and records of actions taken in response to input from stakeholders, shall be maintained. a. Is the following maintained? The local community that has been interviewed aware of Company’s PICs for C  List of stakeholders (local communities and other af- public consultations. Thereare stakeholder communication documents fected or interested parties etc.); showed during surveilance i.e. letters from government stakeholder village,  Records of all communication, including confirmation sub-district and district, stakeholder NGOs and stakeholders of the company of receipt or endorsement; partners/suppliers.  Evidence that efforts have been made to ensure understanding by affected parties; PT Bakrie Sumatera Plantation Tbk Unit Kisaran and Palm Oil Mill Kisaran  Record of actions taken in response to input from key stakeholders are: outgrower, village government, Sub Distric govern- stakeholders. ment, Distric Goverment, NGO, local community, and farmers. The interview with the head of Pengarungan Village and officials of Subur Village, it known that the company had conducted RSPO socialization that included socialization of communications procedures, consultation with stakeholders. The village head understands the procedures of communication with the company.

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

6.3.1 (M) The mechanism The system, open to all affected parties, shall resolve disputes in an effective, timely and appropriate manner, ensuring anonymity of complainants and whistle-blowers, where requested, as long as that information is supported with adequate initial evidence.

Specific Guidance: For 6.3.1: The system should aim to reduce the risks of reprisal.

Guidance:

See also to Criterion 1.2.

Dispute resolution mechanisms should be established through open and consensual agreements with relevant affected parties.

Complaints should be dealt with by mechanisms such as Joint Consultative Committees (JCC), with gender representation as necessary. Grievances may be internal (employees) or external.

For scheme and independent smallholders, refer to ‘Guidance for Independent Smallholders under Group Certification’, June 2010, and ‘Guidance on Scheme Small- holders’, July 2009.

Where a resolution is not found mutually, complaints can be brought to the attention of the RSPO Complaints System. This refers to United Nations Commission on Human Rights (UNCHR) document to support ‘Guiding Principles on Business and Human Right” to implement UN framework to “Protect, Respect and Remedy” 2011. If all the above stages of conflict resolution have been carried out but the conflict cannot be resolved, then the next process is done through legal proceedings in court.

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CR CHECKLIST RESULTS OF VERIFICATION STATU S (C / NC / C WITH OBS.) Conflict resolution process with the community is still continued although transfer of company’s ownership occurs. Refer to helpful texts for guidance, such as the Human Rights Commission (HRC) endorsed ‘Guiding Principles on Business and Human Rights: Implementing the UN "Protect, Respect and Remedy" Framework’, 2011. There is a mechanism for handling complaints and grievances of all parties C a. Is there an system in place to deal with complaints and griev- affected, namely: SOP Participation and Consultation Communication Inter- ances for all affected parties? nal and External No. BMH-03, Rev 06, dated June 13, 2016. PT BSP has a b. Who in the company is responsible to receive complaints and policy of "Whistle Blowing Policy" that are specifically related to the mecha- grievances? nism for handling complaints and grievances of all parties affected, namely: c. Is the existence of the system been made known and commu- SOP Participation and Consultation Communication Internal and External nicated to all parties? No. BMH-03, Rev 06. There is an explanation that the company will facilitate d. Is there evidence that the system is understood by all parties? if complainants requested confidentiality of his identity, without prejudice to e. Is training provided to the workers on the procedures/systems? the essence and the company's response to the complaint. f. Is the system effective to ensure that complaints or grievances are addressed or resolved in an effective, timely and appropri- There PIC that is responsible for the complaint that the PR department by ate manner? appointing PIC Communication: HR Area Head Division and Staff HR Legal. g. Does the mechanism or procedure provide a way for workers The SOP system has disseminated to stakeholders. The system was con- to report a grievance against a supervisor to someone other ceived and running well. than the supervisor? h. How is a complaint or grievance investigated, addressed and resolved? Are complaints dealt with by mechanisms such as JCC? i. Is there a non-retaliation or non-reprisal policy that protects complainants or whistle-blowers? j. Is the privacy of parties protected? k. Where a resolution is not found mutually, is there a process for complaints to be brought to the RSPO Complaints System? 6.3.2 (M) There shall be records of process and outcome of dispute resolution. Documentation of both the process by which a dispute was resolved and the outcome shall be available. Specific Guidance: For 6.3.2: Records can be in the form of evidence from process or end-result of the resolution

a. Is the complaints or grievance resolution process document- Employees may submit complaints through superior and/or trough SPSI im- C ed? plementation mechanisms. If there is no agreement in the settlement of dis- b. Are outcomes or decisions reported to the parties? putes will be resolved through bipartite meetings with the help of the union c. Who has access to the documentation of the process and/or and if there is no agreement it will be resolved through the courts. Results of outcomes? interviews with contractors, local village community leaders as the external sakeholders found that they understand the procedures to submit a complaint to the company. The Company has documented external stakeholder’s inputs hat submitted by letters. Worker’s as internal stakeholders that has been interviewed also understand how to express and/o submitted their thought regarding complaints, grievances and/or recommendations. Worker’s grievances/complaints input into a form of complaint receipt. Workers stated QMF: RSPO-007a-18(Rev.4.April 2019) RSPO Surveillance Assessment] Report PT Bakrie Sumatera Plantation – Kisaran Palm Oil Mill –

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CR CHECKLIST RESULTS OF VERIFICATION STATU S (C / NC / C WITH OBS.) that company has response all of their complaint even it tooks sometimes to implements the problem solving as what worker’s expectation.

6.4 Any negotiations concerning compensation for loss of legal, customary or user rights are dealt with through a documented system that enables indigenous peoples, local communities and other stakeholders to express their views through their own representative institutions. 6.4.1 (M) A procedure for identifying legal, customary or user rights, and a procedure for identifying people entitled to compensation, shall be available, referring to decision of the Constitution Court. in place.

Guidance:

This criterion should be considered in conjunction with Criteria 2.2 and 2.3, and the associated Guidance.

Specific Guidance:

For 6.4.1: Customary Right in the Local Regulation/Perda (based on Constitution Court Decision No. 35/PUU-X/2012 regarding Customary Forest) determined through participatory mapping of customary land by the customary law community who are recognized by the surrounding customary law community and refers to Regulation of the Minister of Home Affairs (Permendagri) No. 52 year 2014 regarding Guideline of Recognition and Protection of Legitimate Customary Community and Regulation of the State Minister of Agrarian Affairs/Head of National Land Agency (BPN) No. 5 year 1999 regarding Guidelines for the Settlement of Problems Related to the Com- munal Reserved Land of the Customary Law Abiding Community a. Are procedures for identifying legal, customary or user There is a procedure identifying the parties entitled to receive compensation C rights in place? Document No. RSP- 01 dated 11 april 2011, Revision 1. The procedures that b. Are procedures for identifying people entitled to compensa- guarantee the implementation of the identification of the parties entitled to tion in place? receive compensation for damages crops, plants and buildings to obtain the c. Are those procedures jointly developed, agreed and accept- concession for the company. Identification team formed jointly between the ed by local communities? company and government districts, village and community leaders. The mechanisms can be accepted by the affected communities. PT BSP has a procedure identifying the parties entitled to receive compensation. Related to the identification of the legal rights of the community, namely SOP Land Acquisition and Land Permit, which aims to ensure that decisions, steps or actions in the process of acquiring land for the benefit of industrial oil palm plantations is done properly, appropriately and in accordance with prevailing regulations and meet the principles and criteria of the RSPO, HCVF and FPIC particularly for land-related interests of the community and communal land. 6.4.2 A procedure for calculating and distributing fair compensation (monetary or otherwise) shall be established and implemented, monitored and evaluated in a participatory way. and Corrective actions are taken as a result of this evaluation. This procedure shall take into account: gender differences in the power to claim rights, ownership and access to land; differences of transmigrants and long-established communities; and differences in ethnic groups’ proof of legal versus communal ownership

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CR CHECKLIST RESULTS OF VERIFICATION STATU S (C / NC / C WITH OBS.) of land.

Specific Guidance:

For 6.4.2: Companies should make best efforts to ensure that equal opportunities have been provided to the heads of family, both female and male heads of house- holds to hold land titles in smallholder schemes if the land ownership is individual..

The calculation procedure shall consider: a. Gender differences in the power to claim rights, ownership and access to land; b. Differences of transmigrants and long-established communities; c. Differences between legal ownership evidence with communal ownership of ethnical group (customary community) a. Has a procedure for calculating and distributing fair com- There is a procedure identifying the parties entitled to receive compensation C pensation (monetary or otherwise) been established and Document No. RSP- 01 dated 11 april 2011, Revision 1. The procedures implemented? that guarantee the implementation of the identification of the parties entitled b. Are the procedures jointly developed, agreed, accepted and to receive compensation for damages crops, plants and buildings to obtain clearly understood by affected parties? the concession for the company. Identification team formed jointly between c. Is the procedure monitored and evaluated in a participatory the company and government districts, village and community leaders. The way? Have corrective actions been taken as a result of this mechanisms can be accepted by the affected communities. PT BSP has a evaluation? procedure identifying the parties entitled to receive compensation. Related d. Does this procedure take into account the following: to the identification of the legal rights of the community, namely SOP Land  Gender differences in the power to claim rights; Acquisition and Land Permit, which aims to ensure that decisions, steps or actions in the process of acquiring land for the benefit of industrial oil palm  Ownership and access to land; plantations is done properly, appropriately and in accordance with prevailing regulations and meet the principles and criteria of the RSPO, HCVF and  Differences of transmigrants and long-established FPIC particularly for land-related interests of the community and communal communities; land.  Differences in ethnic groups’ proof of legal versus communal ownership of land. In interviews with the local village head of it explained that there are no indigenous land or customary rights in the area of the company. Since the be- e. Where there are schemed smallholders, is there effort to ginning of land acquisition for the construction of the estate, there is no cus- ensure equal opportunity has been provided to . tomary land or customary rights in the area of the company.

6.4.3 (M) The process and outcome of any negotiated agreements and compensation claims, process and outcome of any negotiated agreements shall be documented, with evidence of the participation of affected parties, and made publicly available.

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CR CHECKLIST RESULTS OF VERIFICATION STATU S (C / NC / C WITH OBS.) a. Is the process and outcome of negotiated agreements and There is a procedure identifying the parties entitled to receive compensation C compensation claims documented? Document No. RSP- 01 dated 11 april 2011, Revision 1. The procedures that b. Does this documentation include evidence of the participa- guarantee the implementation of the identification of the parties entitled to tion of affected parties? Is there any approval/signed by ef- receive compensation for damages crops, plants and buildings to obtain the fected parties? concession for the company. Identification team formed jointly between the c. Was consent obtained from all parties to make the docu- company and government districts, village and community leaders. The ments publicly available? mechanisms can be accepted by the affected communities. PT BSP has a procedure identifying the parties entitled to receive compensation. Related to the identification of the legal rights of the community, namely SOP Land Acquisition and Land Permit, which aims to ensure that decisions, steps or actions in the process of acquiring land for the benefit of industrial oil palm plantations is done properly, appropriately and in accordance with prevailing regulations and meet the principles and criteria of the RSPO, HCVF and FPIC particularly for land-related interests of the community and communal land. In interviews with the local village head of it explained that there are no indigenous land or customary rights in the area of the company. Since the beginning of land acquisition for the construction of the estate, there is no customary land or customary rights in the area of the company. 6.5 Pay and conditions for employees and for contract workers always meet at least legal or industry minimum standards and are sufficient to provide decent living wages.

Guidance:

Labor union agreement or direct contracts of employment detailing payments and conditions of employment (e.g. working hours, deductions, overtime, sickness, holiday, maternity leave, reasons for dismissal, period of notice, etc.) shall be available in the languages understood by the workers or explained carefully to them by a management official or Labor Union if any.

Regulation related to the minimum wage such as, Regulation of the Minister of Manpower & Transmigration No. 7 year 2013 regarding Minimum Wage, shall be implemented.

Definition of Decent Living Wage refers to the Act No. 13 year 2003 (Manpower Act) is a set of standard necessities that must be fulfilled by a worker in order to have a decent physical and social living for a month 6.5.1 (M) Documentation of pay and conditions for employees based on the existing manpower regulations shall be available.

a. What types of employment arrangements are there in the All permanent workers term and conditions agreed and stated at Collective RSPO company? (E.g. contractual, outsourced, apprenticeships, di- Labor Agreement that has been develop by Company and labor Union repre- 02523 rect hires, piecemeal basis, etc.) sentatives, members of BKS PPS. Company and worker still refer to the b. Is there documentation of pay and conditions for each em- Collective Labor Agreement 2015 – 2017 BKS-PPS. This is because of the ployee? new PKB is in the process. On the other hand, terms and conditions of Daily Determined Contract Worker (PKWT) and Daily non-permanent worker c. Is there a definition for living wage in the country? If not, how

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CR CHECKLIST RESULTS OF VERIFICATION STATU S (C / NC / C WITH OBS.) was the decision on wage for employees and contract work- (BHL) is stated on each contract. ers made The wages of workers of the Specific Time Work Agreement (PKWT) and Daily Workers (BHL) have not been in accordance with the Decree of the Governor of North Sumatra No. 188.44 / 1573 / KPTS / 2018 concerning Min- imum Wages of Asahan District year 2019 for palm oil plantation sector. This condition raised as Non-conformity

6.5.2 (M) Labour laws, union agreements or direct contracts of employment detailing payments and conditions of employment (e.g. working hours, deductions, overtime, sickness, holiday entitlement, maternity leave, reasons for dismissal, period of notice, etc.) shall be available in the languages understood by the workers or explained carefully to them by a management official. Collective Labor Agreement/Company Regulation, in accordance with the manpower regulations, shall be available in understandable language; and explained by the management or Labor Union to the workers.

Specific Guidance:

For 6.5.2: Collective Labor Agreement (Perjanjian Kerja Bersama/PKB) and or Company Regulation are developed by the company together with the Labor Union, if any, in the company referring to the manpower regulations, such as the Regulation of the Minister of Manpower No. 6 year 2011 regarding Procedure for Establishing and Endorsing the Company Regulation, and Developing and Registering Collective Labor Agreement. a. Is the pay and conditions of employment clearly detailed in There is some non-conformity such as: RSPO the employment or service contracts? (E.g. working hours,  Workers of the Specific Time Work Agreement (PKWT) and Daily 02524 deductions, overtime, sickness, holiday entitlement, mater- Workers (BHL) have not been reported to the Manpower Agency of nity leave, reasons for dismissal, period of notice, etc.) Asahan District (Kepmenakertrans No. 100 of 2004). b. Is the contract prepared in languages understood by the  Based on interview with workers of the Specific Time Work Agree- workers, explained carefully to workers by management of- ment (PKWT) at Sei Baleh POM provided information that the con- ficials, and signed by both the authorised signatory of the cerned person had worked since 2012 and 2014 but until the audit company and employee? conduct the working relationship still Specific Time Work Agree- c. Does the pay and conditions provided in labour laws, union ment (PKWT) or had not been a Worker of Non-Specific Time agreements or direct contracts of employment comply with: Work Agreement (PKWTT) (Kepmenakertrans No 100 of 2004).  The decent living wage as provided in the National In-  The company has not been able to show a policy regarding the terpretation for the country; or provision of food and beverages at least equal to 1,400 calories for  The local legal requirements in meeting the minimum workers who work overtime for 3 (three) hours or more (Kep- wage; or menakertrans No. 102 of 2004).  The industry minimum standard for a similar position  There are daily workers (BHL) who work 21 consecutive days or or work responsibilities more in 3 (three) months but the status has not been upgraded to d. Is the pay received by the employee consistent with the become a worker of a Non-Specific Time Work Agreement terms of the contract and the law (relates to P2)? (PKWTT) or a permanent employment relationship. For example, e. Have there been any cases recorded of breach by the com- at Serbangan Estate i.e. harvester is 26 people, each working on pany, or complaint made by employees against the compa- January 25 days, February 23 days, March 25 days on 2019 on ny on unjust pay and conditions? behalf Junaidi, Wagiarno, M. Airs Kurniawan, Ali Akbar, Indra Lesmana, MHD. Kurniawan, Suroto, Rudi Suhastra, M. Syafei, Bu-

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CR CHECKLIST RESULTS OF VERIFICATION STATU S (C / NC / C WITH OBS.) diman, Hadi Wahyudi, Suriyanto, Supriadi, M. Darmadi, Hepri Indra P, Gunandar, Andri, Surianto, Suriyanto, Ferri Irawan, Rahmad Hi- dayat, Irfan, Gunawan, M. Yunus T , Irwansyah Putra, Andi Syapu- tra This condition raised as Non-conformity

6.5.3 Growers and millers shall provide adequate housing, water supplies, medical, educational and welfare amenities to national standards or above, where no such public facilities are available or accessible

Specific Guidance:

For 6.5.3: Incentives to the employees refer to Act No. 13 year 2003 regarding Manpower. a. Have growers and millers provided adequate housing and All employees have been provided with suitable housing, water supplies, C other basic necessities such as that listed below to national medical care (clinic, including doctor, nurses and medicines and bed) and standards or above, where no such public facilities are welfares by the compa-ny. Worker housing receive piped potable water available or accessible? which is tested regularly to ensure that it is safe for human use. The facility  adequate housing; provided the huge water jar to store the rainfall for being used as drinking  adequate electricity; water. It is also tested regularly to ensure it is always safe for human con-  clean water supplies (availability of clear water all year sumption. All workers housing are also provided with free electricity. Mean- round); while, there’s a new facility for employees, day care for their kids forfree. The  medical services (distance to health care facility i.e. parents are recommended to bring groceries and vegetable for their kids clinic, hospital); then it is cooked by the nanny in day care.  children education (distance to school and schooling attendance (%) of children under 12) As a result of interviews with workers in housing, the source of water came  Welfare amenities. from the bore wells made by the company. The source of electricity comes from the generator set provided by the company. For domestic waste or household waste, companies provide officers who transport household waste at least two or three times a week to be disposed of in a landfill.

6.5.4 There shall be demonstrable efforts to improve workers’ access to adequate, sufficient and affordable food. Growers and millers shall make demonstrable efforts to monitor and improve workers’ access to adequate, sufficient and affordable food.

Specific Guidance:

For 6.5.4: This applies if public facility is unavailable or inaccessible to provide adequate, sufficient and affordable food. The examples of the efforts are provision of transportation, employee cooperative shop, weekly market, etc.

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CR CHECKLIST RESULTS OF VERIFICATION STATU S (C / NC / C WITH OBS.) Have growers and millers made demonstrable efforts to monitor Based on interviews and observations in the field, auditors assess the com- C and improve workers’ access to adequate, sufficient and affordable pany has shown tangible efforts in helping workers get adequate and afford- food? able food through the existence of employee cooperatives. The cooperative is located near the housing of SME employees and provides some basic daily necessities such as staple food, side dishes, various kitchen needs at quite affordable prices.Based on interview known that the workers have felt fulfilled with the infrastructure and facilities that have been provided. 6.6 The employer respects the rights of all personnel to form and join trade unions of their choice and to bargain collectively. Where the right to freedom of association and collective bargaining are restricted under law, the employer facilitates parallel means of independent and free association and bargaining for all such personnel. 6.6.1 (M) A published statement in local languages recognising. A record of the company’s policy in understandable language freedom of association shall be available.

Guidance: The right of workers employees, including migrant and transmigrant workers (Angkatan Kerja Antar Daerah/ AKAD) and contract workers, to form associations and bargain collectively with their employer should be respected, in accordance with The Act No. 21 year 2000 regarding Labor Union. Conventions 87 and 98 of the Inter- national Labour Organisation (ILO).

Labour laws and collective labor union agreements, or in their absence direct contracts of employment detailing payments and other conditions, should be available in the languages understood by the workers or explained comprehensively carefully to them by a management official.

Definition of Employer refers to the Act No. 13 year 2003 regarding Manpower. a. Has the company published a statement in local languages PT BSP has a firm policy in the Indonesian language that recognizes the C recognising the rights of employees to freedom of associa- rights of employees to freedom of association. This is contained in human tion? rights policy dated January 16, 2019.The document is presented in an Indo- b. Are the employees, including migrant and transmigrant nesian format that is easily understood by all workers and is available at the workers and contract workers, allowed to form associations audit site. and bargain collectively with their employer? c. Was the outcome, if any, from the collective bargaining In PT BSP company there is union organization named “Federasi Serikat process between the company and the association re- Pekerja Pertanian dan Perkebunan Serikat Pekerja Seluruh Indonesia (FSP spected, implemented and adopted in full or partially by the PP-SPSI)”. Workers Unions are associations of workers to negotiate with the company? company. The results of negotiations in the form of work agreement (PKB) d. Are there Labour laws and union agreements, or in their en-dorsed by the company and union workers. The work agreement (PKB) absence direct contracts of employment detailing payments period 2015-2017. The agreement contains the rights, obligations and work- and other conditions, made available in the languages un- ing conditions, safety, welfare, leave, termination of employment, etc. Ratifi- derstood by the workers or explained carefully to them by a cation PKB No.KEP 88/PHIJSK-PKKAD/ PKB/VI/2015 concern-ing the Reg- management official? istration Agreement BKS-PPS with the PP. FSP.PP-SPSI pe-riod 2015 - 2017 by contested of Industrial Relations Labor and Social Security. The agreement refers to the Law No. 13 of 2003 on Labor and has been disseminated to the workers, it is evident that workers know the contents of the PKB.

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CR CHECKLIST RESULTS OF VERIFICATION STATU S (C / NC / C WITH OBS.) Board SPSI PT BSP period 2016 – 2021 was available.

PT BSP Kisaran has also established LKS Bipartite that consists Com- pany’s Management Representatives and Labor Union Members Repre- sentatives. This institution has legally complied with workforce regulation as seen on evidence as follow: 1. District Asahan Workforce Agency Decree No. 325/2017, October 17th 2017, regarding the Appointment of Revised LKS Bipartite Or-ganization Structure of PT BSP Kisaran, 2016 – 2019. 2. Attached the new structure organization of LKS Bipartite that con-sists of Management and Labor Union repres.

6.6.2 Minutes of meetings with main trade Records of meetings with labor unions or workers representatives shall be available documented.

a. Are there documented minutes of meetings between the Minutes of some meetings were checked and the meetings found to be C company and main trade unions or workers representa- properly conducted. On January 10, 2019, it has been already conducted tives? meetings between FSP PP-SPSI and the company, discussion agenda was b. Are the minutes made readily available to employees upon about renewal plan of PKB material and discussion of urgent issues in the request? work unit.

6.7 Children are not employed or exploited.

6.7.1 (M) There shall be documented documentary evidence that minimum age requirements are met.

Guidance:

Growers and millers should clearly define the minimum working age and working hours, based on existing regulations such as : 1. Act No. 13 year 2003 regarding Manpower. 2. Act No. 20 year 1999 regarding Ratification of International Labour Organization (ILO) Convention No. 138 year 1973 on Allowable Minimum Age for Work. 3. Regulation of the Minister of Manpower and Transmigration No. 235 year 2003 regarding Types of Work Endangering Child Health, Safety or Morale It is advisable to do socialisation to all level of operations regarding prohibition on employing children.

Together with working hours. Only workers above the minimum school leaving age in the country or who are at least 15 years old may be employed. The minimum age of workers will not be less than stated under national regulations. Any hazardous work should not be done by those under 18, as per International Labour Organisation (ILO) Convention 138.

Please refer to ‘Guidance for Independent Smallholders under Group Certification’, June 2010, and ‘Guidance on Scheme Smallholders’, July 2009for additional guidance on family farms

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CR CHECKLIST RESULTS OF VERIFICATION STATU S (C / NC / C WITH OBS.) a. Is the minimum working age for workers together with work- The company has a commitment not to employ children, such as: C ing hours clearly defined in the company’s recruitment poli- 1. Sustainable Palm Oil Policy (January, 16, 2019) article 16, in the re- cy? cruitment of workers the company requires a minimum age of 18 years. b. Are workers employed above the minimum school leaving 2. Memo HR Area Head No. 783/HRD/V/2011 dated May 9, 2011. There age of the country or who are at least 15 years of age? are rules about the minimum age of workers at PT. BSP ie at least 18 c. Is there evidence that the nature of work for workers under years. 18 is in accordance with International Labour Organisation (ILO) Convention 138? The company is proofen complied with this policy. Soft Copy of PT BSP d. Does ground verification show evidence of employment of Permanent Worker, April 2019. The youngest worker is Syahriadi, born in workers below the minimum working age? December 31st 1989, join date in July 1st 2011 when he was 22 years old.

List of Non-Permanent Daily Worker of Gurah Batu Estate, Kisaran POM, Serbangan Estate, Tanah Raja Estate, Sei Baleh Estate and Kuala Piasa Es- tate April 2019, consist information of name, position, work location, birth date, join date and wage rate. The list is BHL Worker contract as re-quired by Indonesian Law, and has been signed by all workers. The youngest worker is Ali Akbar, born in December 27th 1996, join date in April 1st 2015 when he was 19 years old. Based on the verification results of documents of employees list in April 2019 in mind that no employees in the company were under 18 years of age at the time of admission to work. 6.8 Any form of discrimination based on race, caste, national origin, religion, disability, gender, sexual orientation, union membership, political affiliation, or age, is prohibited. 6.8.1 (M) A publicly available equal opportunities policy including identification of relevant/affected groups in the local environment shall be documented. A company’s policy on equal opportunity and treatment for work shall be available and documented.

Guidance:

Examples of compliance can be in front of appropriate documentation (e.g. job advertisements, job descriptions, appraisals, etc.), and/or information obtained via interviews with relevant stakeholders such as affected groups which may include women, local communities, foreign workers, and migrant workers, etc. Notwithstanding national legislation and regulation, medical conditions should not be used in a discriminatory way.

The grievance procedures detailed in Criterion 6.3 apply. Positive discrimination to provide employment and benefits to specific communities is acceptable as part of negotiated agreements

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CR CHECKLIST RESULTS OF VERIFICATION STATU S (C / NC / C WITH OBS.) a. Is there a company policy on non-discrimination and equal PT BSP has policies for no discrimination in employment, which is set in: C opportunities? Does it at least cover the items mentioned in 1. Human Rights Policy (January 16, 2019) article 4, we enforce all the criteria (6.8)? the people who worked at PT BSP fairly and without discrimination b. Is the policy made publicly available for the relevant stake- on differences in ideology, ethnicity, color skin, religion, gender, holders? sexual orientation, national origin, age, disability or more status so- c. Is there evidence that the policy has been implemented? cial. 2. Sustainable Palm Oil Policy (January, 16, 2019) article 17, every worker has an equal opportunity to obtain employment without discrimination and the right to equal treatment without discrimination from employers. 3. The procedure of selection acceptance of new employees Docu- ment No. BMH - 07 rev 01 dated February 2, 2013: every worker has an equal opportunity to obtain employment without discrimination, applicants are required a minimum of 18 years of age.

6.8.2 (M) Evidence shall be provided that employees and groups including local communities, women, and migrant workers have not been discriminated against.

a. Is there evidence that employees and groups including local Based on interviews with workers in mind that workers and groups includ-ing C communities, women, and migrant workers have not been local communities, women, there is no discrimi-nation in recruitment. Re- discriminated against? cruitment is open to anyone who has the ability, granting medical bene-fits b. Are the employees and groups including local communities, applicable to all employees. Men and women have the same oppor-tunities in women, and migrant workers happy with the way the com- the process of recruitment, payroll, and benefits. Menstrual leave and child- pany is treating them? birth / breastfeeding women given to employees regard-less of their race or c. Are there complaints against the company on issues relat- religion race. Recruitment, promotion conducted by expertise, educational ing to discrimination? background suitability for certain positions as well as their employee perfor- d. What is the nature of complaints employees and groups in- mance assessment each year. cluding local communities, women, and migrant workers have lodged against the company, if any? 6.8.3 It shall be demonstrated that recruitment selection, hiring and promotion are based on skills, capabilities, qualities, and medical fitness necessary for the jobs available. Records of evidence that equal opportunity and treatment for work shall be available. Specific Guidance: For 6.8.3: Recruitment and promotion are based on skills, capabilities, qualities and health conditions

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CR CHECKLIST RESULTS OF VERIFICATION STATU S (C / NC / C WITH OBS.) a. Does the company keep and maintain a record of their em- Based on interviews with workers in mind that workers and groups includ-ing C ployees’ work credentials and medical history? local communities, women, there is no discrimi-nation in recruitment. Re- b. Does the company explicitly state the indiscriminatory poli- cruitment is open to anyone who has the ability, granting medical bene-fits cy during the recruitment selection, hiring and promotion applicable to all employees. Men and women have the same oppor-tunities in process? the process of recruitment, payroll, and benefits. Menstrual leave and child- c. Is the company’s indiscriminatory policy reviewed regularly? birth / breastfeeding women given to employees regard-less of their race or d. Are the company’s employees recruited and promoted religion race. Recruitment, promotion conducted by expertise, educational based on skills, capabilities, qualities, and medical fitness background suitability for certain positions as well as their employee perfor- necessary for the job? How is this evidenced? mance assessment each year.

6.9 There is no harassment or abuse in the work place, and reproductive rights are protected.

6.9.1 (M) A policy to prevent sexual and all other forms of harassment and violence shall be documented, implemented and communicated to all levels of the workforce.

Specific Guidance:

For 6.9.1 and 6.9.2: These policies should include education for women and awareness of the workforce. There should be programmes provided for particular issues faced by women, such as violence and sexual harassment in the workplace. A gender committee specifically to address areas of concern to women will be used to comply with this Criterion. This committee, which should include representatives from all areas of work, will consider matters such as: training on women’s rights; counselling for women affected by violence; child care facilities to be provided by the growers and millers; women to be allowed to breastfeed up to nine months before resuming chemical spraying or usage tasks; and women to be given specific break times to enable effective breastfeeding.

Guidance:

There should be a clear policy developed in consultation with employees, contract workers and other relevant stakeholders, and the policy should be publicly available. Progress in implementing the policy should be regularly monitored, and the results of monitoring activities should be recorded.

Notwithstanding national legislation and regulation, reproductive rights are respected.

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CR CHECKLIST RESULTS OF VERIFICATION STATU S (C / NC / C WITH OBS.) a. Does the company have the policy to prohibit any form of PT BSP still hold and applied the sexual harassment policy that stated on C sexual and all other forms of harassment and violence? policies bellow: b. Has this policy been documented, implemented and com- 1. Human Rights Policy (January 16, 2019) article 1, we conduct business municated clearly to all levels of the workforce? in a manner respecting the rights and dignity of all people in accord- c. Is there a clear protocol for the company to deal/handle ance with the legal requirements. such issues/complaints received from the workforce? 2. Oil SustainablePlam Policy (January, 16 2019): Section 5 "Preventing d. Is there a list of awareness programs or training provided to sexual harassment and violence". the workforce in relation to these issues? e. Has the company formed a Gender Committee to address areas of concern to women? Is there a list of the members sitting in the committee? What are the Terms of Reference of the committee? Does it include the handling of issues such as:  training on women’s rights;  counselling for women affected by violence;  child care facilities to be provided by the growers and millers;  women to be allowed to breastfeed up to nine months before resuming chemical spraying or usage tasks; and  Women to be given specific break times to enable effective breastfeeding. f. Is the policy regularly reviewed?

6.9.2 (M) A policy to protect the reproductive rights of all, especially of women, shall be documented, implemented and communicated to all levels of the workforce.

Specific Guidance:

For 6.9.2: see Indicator 4.6.12.

Guidance:

Notwithstanding national legislation and regulation, reproductive rights are respected. a. Is there a policy to protect the reproductive rights of all, es- These polices has documented, implemented, communicated, and dissemi- C pecially of women? nated to all female worker through the socialization of women's rights and b. Has this policy been documented, implemented and commu- domestic violence on March 4, 2019. There are mechanisms and clear rules nicated clearly to all levels of the workforce? for companies to handle / deal with issues such as / complaints received c. How is this policy communicated to all levels of the work- from labor. There is a Gender Committee as a means for workers to facilitate force? the fulfillment of basic rights of women. The leader of committee Gender: Suriana; Vice Chairman: Dian Carolina Secretary: Erlina Effendi Lubis; Members: ISMI Bebi, Nurimah siregar, Restu, Sulfiah, Siti Aminah, Masdi- QMF: RSPO-007a-18(Rev.4.April 2019) RSPO Surveillance Assessment] Report PT Bakrie Sumatera Plantation – Kisaran Palm Oil Mill –

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CR CHECKLIST RESULTS OF VERIFICATION STATU S (C / NC / C WITH OBS.) ana. Gender Committee activities are: (1) Socialization of women's rights, domestic violence in each division; (2) Receive a report of domestic violence. There is no report regarding specific gender issues and/or sexual harassment (and woman violation) recorded on Gender Committee Logbook. 6.9.3 A specific grievance mechanism which respects anonymity and protects of complainants where requested, and as long as they are supported with adequate information shall be documented, established, implemented, and communicated to all levels of the workforce a. Does the company have a mechanism to handle employ- Based on interviews with women workers in Kuala Piasa Estate, it known that C ment grievances, that respects anonymity and protects com- the workers understand the reproductive leave entitlements, ie 2 days men- plainants where requested? strual leave and maternity leave is three months. b. Does the mechanism provide a way for workers to report a grievance against a supervisor to someone other than that supervisor? c. Is the mechanism documented, implemented and communicated clearly to all levels of the workforce? d. Has the company identified personnel who will be responsible to receive and manage complaints received from the workforce? e. Has the company received any reports or complaints of harassment or abuse? How was it addressed or resolved? f. Is the policy reviewed regularly? 6.10 Growers and millers deal fairly and transparently with smallholders and other local businesses

6.10.1 Current and past prices paid for Fresh Fruit Bunches (FFB) shall be publicly available.

Guidance:

Transactions with smallholders should consider issues such as the role of middle men, transport and storage of FFB, quality and grading. The need to recycle the nutrients in FFB (see Criterion 4.2) should also be considered; where it is not practicable to recycle wastes to smallholders, compensation for the value of the nutrients ex- ported may be considered can be made through the FFB price.

Smallholders should have access to the grievance procedure under Criterion 6.3 if they consider that they are not receiving a fair price for FFB, whether or not middle men are involved.

The need for a fair and transparent pricing mechanism is particularly important for outgrowers who are contractually obliged to sell all FFB to a particular mill.

If mills require smallholders to change practices to meet the RSPO Principles and Criteria, consideration should be given to the costs of such changes, and the possibil- ity of advance payments for FFB can be considered.

Specific Guidance: For 6.10.1: FFB pricing in Indonesia refers to the Regulation of the Minister of Agriculture No. 14/Permentan/OT.140/2/2013

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CR CHECKLIST RESULTS OF VERIFICATION STATU S (C / NC / C WITH OBS.) a. How is the price of FFB determined? Document checked regarding Cmpany’s transaction with FFB suppli- C b. Is current and past prices paid for Fresh Fruit Bunches ers/vendors found that PT BSP has deal with smallholders in transparently (FFB) publicly available? How? and fairly manner procedures. Evidences showed that company has paid the c. Was there any complaints on FFB pricing? FFB as refer to the FFB buying contracts, both for the price calculation d. How was the complaint handled? mechanism and the payments. Evidences showed during audit such as: (1) e. What was the solution? Note of Meeting with FFB Vendors/Supplier, May 14th 2018, discussing about transparency, win-win solution, improving meeting frequency. Com- plaints from vendors regarding deduction price according to shortage that still in a high level; (2) Payment Statement for FFB Supplier’s account of Darwin Tambuan, April 26 2019; (3) FFB Buying agreement with supplier, No. 22/BSP/V/2018, with Suriadi, May 2018, consisting FFB Price mechanism and Quality shortage method. 6.10.2 (M) Evidence shall be available that growers/millers have explained FFB pricing, and pricing mechanisms for FFB and inputs/services shall be. Pricing mechanisms for Fresh Fruit Bunches (FFB) and inputs/services shall be explained and documented (where these are under the control of the mill or plantation) a. What is the mode of recording/documenting transactions Document checked regarding Cmpany’s transaction with FFB suppli- C between millers with middlemen and/or smallholders? ers/vendors found that PT BSP has deal with smallholders in transparently b. Is there evidence that growers/millers have explained FFB and fairly manner procedures. Evidences showed that company has paid the pricing and pricing mechanisms for FFB? FFB as refer to the FFB buying contracts, both for the price calculation c. Are there any inputs/services rendered by the millers to mechanism and the payments. Evidences showed during audit such as: (1) smallholders/middle men? Are these inputs/services having Note of Meeting with FFB Vendors/Supplier, May 14th 2018, discussing any influence to the pricing and pricing mechanisms for about transparency, win-win solution, improving meeting frequency. Com- FFB? plaints from vendors regarding deduction price according to shortage that still d. Have inputs/services been documented (where these are in a high level; (2) Payment Statement for FFB Supplier’s account of Darwin under the control of the mill or plantation)? Tambuan, April 26 2019; (3) FFB Buying agreement with supplier, No. e. Where it is not practicable to smallholders to recycle waste 22/BSP/V/2018, with Suriadi, May 2018, consisting FFB Price mechanism (i.e. EFB), is there compensation for the value of the nutri- and Quality shortage method. ents of EFB given to the smallholders? Is this translated in- to the pricing factors of FFB?

6.10.3 Evidence shall be available that all parties understand the contractual agreements they enter into, and that contracts are fair, legal and transparent Specific Guidance: For 6.10.3 : Referring to Regulation of the Minister of Agriculture No. 14/Permentan/OT.140/2/2013, requirements to be considered in the contract are such as: 1. K Index, which is open and transparent to the smallholders or their institutions 2. Distributing the information about the decision of the Pricing Team to the smallholders institutions 3. Method of fruit sortation 4. Involvement of smallholders institutions on the evaluation of weigh instrument by authorised local agency.

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CR CHECKLIST RESULTS OF VERIFICATION STATU S (C / NC / C WITH OBS.) a. Is there a contractual agreement between the miller and Document checked regarding Cmpany’s transaction with FFB suppli- C smallholders/ middle men? ers/vendors found that PT BSP has deal with smallholders in transparently b. Do all parties understand the contractual agreements they and fairly manner procedures. Evidences showed that company has paid the have entered into? FFB as refer to the FFB buying contracts, both for the price calculation c. Are all contractual agreements fair, legal and transparent? mechanism and the payments. Evidences showed during audit such as: (1) d. Who keeps the contractual agreements? Note of Meeting with FFB Vendors/Supplier, May 14th 2018, discussing about transparency, win-win solution, improving meeting frequency. Com- plaints from vendors regarding deduction price according to shortage that still in a high level; (2) Payment Statement for FFB Supplier’s account of Darwin Tambuan, April 26 2019; (3) FFB Buying agreement with supplier, No. 22/BSP/V/2018, with Suriadi, May 2018, consisting FFB Price mechanism and Quality shortage method. 6.10.4 Agreed payments shall be made in a timely manner

a. How are all payments made to the smallholders/middle Document checked regarding Cmpany’s transaction with FFB suppli- C men? ers/vendors found that PT BSP has deal with smallholders in transparently b. What is the mode of recording/documenting transactions and fairly manner procedures. Evidences showed that company has paid the between millers with middlemen and/or smallholders? FFB as refer to the FFB buying contracts, both for the price calculation c. Have agreed payments been made in a timely manner? mechanism and the payments. Evidences showed during audit such as: (1) Note of Meeting with FFB Vendors/Supplier, May 14th 2018, discussing about transparency, win-win solution, improving meeting frequency. Com- plaints from vendors regarding deduction price according to shortage that still in a high level; (2) Payment Statement for FFB Supplier’s account of Darwin Tambuan, April 26 2019; (3) FFB Buying agreement with supplier, No. 22/BSP/V/2018, with Suriadi, May 2018, consisting FFB Price mechanism and Quality shortage method. 6.11 Growers and millers contribute to local sustainable development where appropriate

6.11.1 Records of Contributions to local development that are based on the results of consultation with local communities shall be available demonstrated.

Guidance:

Contributions to local development should be based on the results of consultation with local communities and social impact assessment. See also Criterion 6.2. Such for consultation process. Such consultation should be based on the principles of transparency, openness and participation, and should encourage communities to identify their own priorities and needs, including the different needs of men and women.

Where candidates for employment are of equal merit, preference should always be given to members of local communities. Positive discrimination should not be recognised as conflicting with Criterion 6.8.

Private plantations refer to the Act No. 40 year 2007 regarding Limited Company (PT), clause 74 (1&2) and their explanations; Government Regulation No. 47 year 2012 regarding Environment and Social Responsibilities, clause 5 (1) and explanation whereas social and environment responsibilities shall be executed.

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CR CHECKLIST RESULTS OF VERIFICATION STATU S (C / NC / C WITH OBS.) State plantations refer to Act No. 19 year 2003 regarding State Owned Company (BUMN) clause 9 (1).

Efforts should be made to identify independent smallholders in the supply base.

Where sourcing of fruit is from identified independent smallholders, efforts should be made to contribute to the improvement of their farming practices. a. Have the local development needs and priorities been iden- Identification of community needs has carried out by PT BSP, as can be C tified in consultation with local communities? (refer also to seen in the SIA report. PT BSP annually carries out communication and con- C 6.2) sultation regarding the evaluation of CSR implementation that has imple- b. What are the contributions made to local development? Are mented, develops CSR program and monitors the implementation of social they in accordance with the results of consultation? management with stakeholders around the estate and palm oil mill such as c. Are there efforts to improve or maximise employment op- Karang Anyer Village and Dadimulyo Village. portunities at the company for local communities? 6.11.2 Where there are scheme smallholders, there shall be evidence that efforts and/or resources have been allocated to improve smallholder productivity

a. Is there a complete registry of independent smallholders in PT BSP has contributed to regional development in the field of infrastructure C the supply base? development, education, religious social assistance, health and natural disaster relief. Assistance in education is the provision of auxiliary fees elemen- b. Have efforts been made to improve the farming practices of tary school teachers in the villages around the company, educational schol- independent smallholders? arships for outstanding students, school football in the Bunut Sstate. Com- c. Where there are schemed smallholders, have efforts and/or munity Development Program, as seen on evidences as follow: Education, resources been allocated to improve smallholder productivi- social health, religion, infrastructure and social philanthropy ty? 6.12 No forms of forced or trafficked labour are used. (Forced labour refers to situations in which persons are coerced to work through the use of violence or intimidation, or by more subtle means such as accumulated debt, retention of identity papers or threats of denunciation to immigration authorities) 6.12.1 (M) There shall be evidence that no forms of forced or trafficked labour are used. Specific Guidance:

For 6.12.1: Workers should enter into employment voluntarily and freely, without the threat of a penalty, and should have the freedom to terminate employment without penalty given reasonable notice or as per agreement.

Guidance

Migrant/foreign workers shall be should be legalised, and a separate employment agreement should be drawn up to meet immigration requirements for foreign workers and international standards. Any regulated deductions made should not jeopardise a decent living wage.

Passports should only be voluntarily surrendered.

There should be evidence of due diligence in applying these indicatior and guidance this to all sub-contract workers and suppliers. Definition of types of worker refers to Acts No.13 year 2003 regarding Manpower. QMF: RSPO-007a-18(Rev.4.April 2019) RSPO Surveillance Assessment] Report PT Bakrie Sumatera Plantation – Kisaran Palm Oil Mill –

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National guidance should be used on contract substitution. a. What is the company’s policy on forced or trafficked labour? The company has a palm oil sustainability policy issued on January 16, 2019. C b. How does the company define forced or trafficked labour? The company is committed to not doing forced labor and human trafficking. c. What is the process of recruiting foreign/ migrant workers di- Based on document tracking and verification in proved that: (1) There is no rectly and/or through licenced outsourcing agencies/ labour evidence of the replacement of employment contracts of employees; (2) All suppliers? workers have had a copy of the employment contract. d. Who is the person responsible for selecting/ screening labour suppliers/ outsourcing agents? PT Bakri Sumatera Plantation, committed to providing opportunities equal e. Do the foreign workers have to pay a fee to the employment access to employment, through the following business: (a) The Company recruitment agency or labour suppliers in the workers’ coun- provides equal opportunities to workers to find employment and a decent in- tries of origin? If yes, does it jeopardise decent living wage? come; (b) The company puts all workers in accordance with the expertise, f. Are there restrictions on workers from leaving the mill or estate capabilities and other job requirements, and in accordance with operational or their housing facilities outside working hours? needs of employees. g. What is the process if a worker wants to terminate their employment before their contract expires? In this case, who pays for the return transportation? Based on employee list, field observation and interview with workers, Labor h. What are the penalties imposed if the workers were terminated Unions, and Manpower Agency known that there is no migrant workers, or fired before their contract expires? forced labor. Every worker has a work agreement that describe specific job i. Who keeps the workers passports or identity documents? description, there is no substitution of contract without prior consultation and j. If workers do not keep their passports or identity documents, is agreement from the worker. this legally allowed? k. What is the process for workers’ to hand over their passports or identity documents to the company? l. Do workers have unrestricted access to their passports or identity documents? Describe how workers are able to access their documents? 6.12.2 Where applicable, it shall be demonstrated that no contract substitution has occurred

Specific Guidance: For 6.12.2: Contract substitution is the change of initial contract without prior consultation and agreement from the workers.

a. Is there evidence of contract substitution occurring? Based on employee list, field observation and interview with workers, Labor C b. Are foreign workers asked to sign a contract upon arriving in Unions, and Manpower Agency known that there is no migrant workers, the receiving country? If yes, is that contract identical to the forced labor. Every worker has a work agreement that describe specific job one signed in the country of origin? description, there is no substitution of contract without prior consultation and c. Are workers given a copy of their employment contracts? If agreement from the worker. yes, is the contract identical to the one signed at the time of recruitment?

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CR CHECKLIST RESULTS OF VERIFICATION STATU S (C / NC / C WITH OBS.) 6.12.3 (M) Where temporary or migrant/foreign/honorary workers are employed, a special worker labour policy and procedures and the evidence of implementation shall be available. shall be established and implemented.

Specific Guidance:

For 6.12.3: The special labour policy should include:  Statement of the non-discriminatory practices;  No contract substitution;  Post-arrival orientation programme to focus especially on language, safety, labour laws, cultural practices etc.;  Decent living conditions to be provided. a. What is the company’s policy and procedures for temporary Based on employee list, field observation and interview with workers, Labor C or foreign/migrant workers? Does the special labour policy Unions, and Manpower Agency known that there is no migrant workers, include: forced labor. Every worker has a work agreement that describe specific job  Statement of the non-discriminatory practices? description, there is no substitution of contract without prior consultation and  No contract substitution? agreement from the worker.  Post-arrival orientation programme with emphasis on language, safety, labour laws, cultural practices etc.?  The provision of decent living conditions? b. Have the policies and procedures been implemented? 6.13 Growers and millers respect human rights.

6.13.1 (M) A policy to respect human rights shall be documented and communicated to all levels of the workforce and operations (see Criteria 1.2 and 2.1).

Guidance: See also Criterion 1.2, 2.1 and 6.3. All levels of operations will include contracted third parties (e.g. those involved in security). Regulations related to the Human Rights refer to the Act No. 39 year 1999 regarding Human Rights.

Note: From the UN Guiding Principles on Business and Human Rights: “The responsibility of business enterprises to respect human rights refers to internationally recognised human rights – understood, at a minimum, as those expressed in the International Bill of Human Rights and the principles concerning fundamental rights set out in the International Labour Organization’s Declaration on Fundamental Principles and Rights at Work” (“The corporate responsibility to respect human rights” in Guiding Principles on Business and Human Rights). The RSPO WG on Human Rights will provide a mechanism to identify, prevent, mitigate and address human rights issues and impacts. The resulting Guidance will

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CR CHECKLIST RESULTS OF VERIFICATION STATU S (C / NC / C WITH OBS.) identify the relevant issues on human rights to all RSPO Members.

a. Is there a company policy on human rights? PT BSP has had a policy on human rights, which have disseminated to all C b. How is this communicated to all employees, including out- employees by the public relations department. The human rights policy was sourced workers, customers and suppliers? If by training, issued on January 16, 2019. The company is committed to respecting the how often is the training conducted? rights of all stakeholders, avoiding violations of human rights and anti- c. Who has the task of communicating the policy internally discrimination. Information also posted on the information board at the PT. and externally? BSP. There is sufficient evidence that never happened human rights viola- d. Does the company have any outstanding cases of human tions in PT BSP during year 2018 and 2019 (until date of audit). Human rights violations? rights dissemination policy has carried out on December 17, 2018 (Estate and Mill). Human rights policies area also disseminated to contractor. Based on interviews with workers known that the company has socialized company policies regularly including policies on human rights. Socialization is done by sticking to the policy in offices, socializing in the housing and socialization to workers during the morning briefing before the activities started. Principle 7: Responsible Development of New Plantings

7.1 A comprehensive and participatory independent social and environmental impact assessment is undertaken prior to establishing new plantings or operations, or expanding existing ones, and the results incorporated into planning, management and operations. 7.1.1 (M) An independent social and environmental impact assessment (SEIA), undertaken through a participatory methodology including the relevant affected stakeholders, shall be documented. Guidance: The result of Strategic Environment Study (Kajian Lingkungan Hidup Strategis/KLHS) conducted by the authority shall be a major consideration in the new land development and planting. See also Criteria 5.1 and 6.1. Implementation of independent social and environment impact assessment may use AMDAL as part of the process. However, it is the company’s responsibility to provide objective and appropriate evidence to the audit team that the full requirements of a Social and Environment Impact Analysis (SEIA) are met for all aspects of plantation and mill operation, and captures all changes over time.

The terms of reference should be defined and impact assessment should be carried out by accredited independent experts, in order to ensure an objective process. Both should not be done by the same body. A participatory methodology including external stakeholder groups is essential to the identification of impacts, particularly social impacts. Stakeholders such as local communities, government departments and NGOs should be involved through the use of interviews and meetings, and by reviewing findings and plans for mitigation. It is recognised that oil palm development can cause both positive and negative impacts. These developments can lead to some indirect/secondary impacts which are not under the control of individual growers and millers. To this end, growers and millers should seek to identify the indirect/secondary impacts within the SEIA, and where possible work with partners to explore mechanisms to mitigate the negative indirect impacts and enhance the positive impacts. Plans and field operations should be developed and implemented to incorporate the results of the assessment. One potential outcome of the assessment process is that the development , partially or entirely, may not proceed because of the magnitude of potential impacts. may not proceed because of the magnitude of potential impacts. For smallholder schemes, the scheme management should address this Criterion. For individual smallholders, this Criterion does not apply. For new planting with area > 3000 Ha needs a comprehensive and independent assessment which may be in the form of AMDAL (SEIA) while areas ≤ 3000 Ha requires Upaya Pengelolaan Lingkungan Hidup (UKL) – Upaya Pemantauan Lingkungan Hidup (UPL). Social and Environment Assessment at minimum must cover: QMF: RSPO-007a-18(Rev.4.April 2019) RSPO Surveillance Assessment] Report PT Bakrie Sumatera Plantation – Kisaran Palm Oil Mill –

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CR CHECKLIST RESULTS OF VERIFICATION STATU S (C / NC / C WITH OBS.) The potential impacts of all major proposed activities should be assessed in a participatory way prior to development. The assessment should include, in no order of preference and as a minimum: • Assessment of the impacts of all major planned activities, including planting, mill operations, roads and other infrastructure; • Assessment, including stakeholder consultation, of High Conservation Values (see Criterion 7.3) that could be negatively affected; • Assessment of potential effects on adjacent natural ecosystems of planned developments, including whether development or expansion will increase pressure on nearby natural ecosystems; • Identification of watercourses and wetlands and assessment of potential effects on hydrology and land subsidence of planned developments. Measures should be planned and implemented to maintain the quantity, quality and access to water and land resources; • Baseline soil surveys and topographic information, including the identification of steep slopes, marginal and fragile soils, areas prone to erosion, degradation, subsidence, and flooding; • Analysis of type of land to be used (forest, degraded forest, cleared land); • Analysis of land ownership and user rights; • Analysis of current land use patterns; • Assessment of potential social impacts on surrounding communities of a plantation, including an analysis of potential effects on livelihoods, and differential effects on women versus men, ethnic communities, and migrant versus long-term residents; • Identification of activities which may generate significant GHG emissions.

If AMDAL or UKL-UPL documents still do not cover point a to j, additional social and environment impact assessment shall be conducted. If internal assessment identifies sensitive social and environment issues or areas, then independent assessment shall be conducted. Documents of environment impact assessment are the environment documents based on the regulations, such as: a. Environmental Impact Assessment (Analisis Mengenai Dampak Lingkungan Hidup/AMDAL) for plantation with areas of > 3000 Ha b. Environmental Management Effort (Upaya Pengelolaan Lingkungan Hidup/UPL) and Environmental Monitoring Effort (Upaya Pemantauan Lingkungan Hidup/UKL) for plantation with areas of < 3000 Ha. c. Environmental Management Document (Dokumen Pengelolaan Lingkungan Hidup/DPLH) d. Environmental Evaluation Document (Dokumen Evaluasi Lingkungan Hidup/DELH) e. Environmental Information Performance (Penyajian Informasi Lingkungan Hidup/PIL) f. Environmental Evaluation Performance (Penyajian Evaluasi Lingkungan Hidup/PEL) g. Environmental Evaluation Study (Studi Evaluasi Lingkungan Hidup/SEL) h. Environment Management and Monitoring Document (Dokumen Pengelolaan dan Pemantauan Lingkungan Hidup/DPPL) i. Declaration Letter for Managing and Monitoring Environment (Surat Pernyataan Kesanggupan Pengelolaan dan Pemantauan Lingkungan Hidup/SPPL) j. And other documents required by the regulation.

Regulations relate to the environment documents, such as: a. Government Regulation No. 27 year 2012 regarding Environment Permit b. Regulation of the Minister of Environment No. 13 year 2010 regarding Environmental Management and Monitoring Effort (UKL-UPL) and Declaration Letter for Managing and Monitoring Environment (SPKL) c. Regulation of the Minister of Environment No. 5 year 2012 regarding Environmental Evaluation Document (DELH) d. Regulation of the Minister of Environment No. 14 year 2010 regarding Environmental Management and Monitoring Document (DPPL) e. Regulation of the Minister of Environment No.12 year 2007 regarding Environmental Management and Monitoring Document for Business and or Activities, with No Environmental Management Document. f. Regulation of the Minister of Environment No. 5 year 2012 regarding Types of Business Obliged to Have Amdal QMF: RSPO-007a-18(Rev.4.April 2019) RSPO Surveillance Assessment] Report PT Bakrie Sumatera Plantation – Kisaran Palm Oil Mill –

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CR CHECKLIST RESULTS OF VERIFICATION STATU S (C / NC / C WITH OBS.) g. Regulation of the Minister of Environment No. 8 year 2006 regarding Guidance for AMDAL preparation h. Regulation of the Minister of Environment No. 17 year 2012 regarding Involvement of Community and Information Transparency in the AMDAL Process i. Decree of the Head of Bapedal No. No. 299 year 1996 regarding Technical Guidance of Social Aspects for AMDAL preparation j. Regulation of the Minister of Environment No. 11 year 2008 regarding Competence Requirements for AMDAL preparation documents and Requirements for Training Institutions in Conducting Training for AMDAL Competency

Where there is no National Interpretation, for land areas greater than 500ha, a full independent assessment will be required. For land areas less than 500ha, an internal assessment using selected components of SEIA and HCV assessments can be used. Where such internal assessments identify significant environmentally or socially sensitive areas or issues, an independent assessment will be undertaken. a. Is there any new plantings or operations, or expanding ex- Based on interview result with management and field observation found that C isting ones by the company? What is the size of the new there are new planting programs, a plant conversion programs from rubber to planting area? palm oil after November 2005. The conversion areas were in Gurach Batu b. Has an independent social and environmental impact as- Estate and Tanah Raja Estate. sessment (SEIA) been documented for the new plantings? c. Are the impact assessments prepared by accredited inde- The Existing Social and Environmental Impacts Assessment scope has had pendent experts? covering all of PT BSP HGU area, including the new planting as a conversion d. Are all environmental and social impacts adequately identi- program from rubber plant at Gurach Batu and Tanah Raja Estate fied? e. Is the SEIA undertaken based on the scope of operation? f. Is the SEIA undertaken in a participatory manner, including the relevant affected stakeholders? g. Does the SEIA assessment include and as a minimum: • Assessment of the impacts of all major planned activities, including planting, mill operations, roads and other infrastructure? • Assessment, including stakeholder consultation, of High Conservation Values (see Criterion 7.3) that could be negatively affected? • Assessment of potential effects on adjacent natural ecosystems of planned developments, including whether development or expansion will increase pressure on nearby natural ecosystems? • Identification of watercourses and wetlands and assessment of potential effects on hydrology and land subsidence of planned developments. Measures should be planned and implemented to maintain the quantity, quality and access to water and land resources? • Baseline soil surveys and topographic information, including the identification of steep slopes, marginal and fragile soils, areas prone to erosion, degradation, sub-

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CR CHECKLIST RESULTS OF VERIFICATION STATU S (C / NC / C WITH OBS.) sidence, and flooding? • Analysis of type of land to be used (forest, degraded forest, cleared land)? • Analysis of land ownership and user rights? • Analysis of current land use patterns? • Assessment of potential social impacts on surrounding communities of a plantation, including an analysis of potential effects on livelihoods, and differential effects on women versus men, ethnic communities, and migrant versus long-term residents? • Identification of activities which may generate significant GHG emissions? h. What were the main findings of the assessment? i. Were secondary impacts of oil palm development identified in the SEIA? 7.1.2 Appropriate management planning and operational procedures shall be developed and implemented to avoid or mitigate identified potential negative impacts.

a. Does the findings of the SEIA uncover any negative impacts? Based on interview result with management and field observation found that C If yes, has a management plan and operational procedures there are new planting programs, a plant conversion programs from rubber to been developed to mitigate the negative impacts? palm oil after November 2005. The conversion areas were in Gurach Batu b. Has the management plan and operational procedures been Estate and Tanah Raja Estate. implemented? The Existing Social and Environmental Impacts Assessment scope has had covering all of PT BSP HGU area, including the new planting as a conversion program from rubber plant at Gurach Batu and Tanah Raja Estate.

7.1.3 Where the development includes an outgrower scheme, the impacts of the scheme (skema kemitraan), the impacts of the scheme and the implications of the way it is managed shall be given particular attention Specific guidance: For 7.1.3. : Outgrower scheme is a farmer selling the FFB through exclusive contract to the growers and millers. Schemed smallholders (plasma) included into this scheme. a. Are any outgrowers involved in the new plantings? Based on interview result with management and field observation found that C b. Has management prepared a plan for the outgrower there are new planting programs, a plant conversion programs from rubber to scheme? palm oil after November 2005. The conversion areas were in Gurach Batu c. Does the SEIA include an assessment of impacts and the Estate and Tanah Raja Estate. implications of the way the outgrower scheme is managed? The Existing Social and Environmental Impacts Assessment scope has had covering all of PT BSP HGU area, including the new planting as a conversion program from rubber plant at Gurach Batu and Tanah Raja Estate.

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CR CHECKLIST RESULTS OF VERIFICATION STATU S (C / NC / C WITH OBS.) 7.2 Soil surveys and topographic information are used for site planning in the establishment of new plantings, and the results are incorporated into plans and operations

7.2.1 (M) Soil suitability maps or soil surveys adequate to establish the long-term suitability of land for oil palm cultivation shall be available and taken into account in plans and operations. Guidance:

These activities can be linked to the Social and Environmental Impact Assessment (SEIA) (see Criterion 7.1) but no need not to be conducted done by independent experts.

Soil surveys should be appropriate to identify soil suitability of oil palm cultivation for the scale of operation.

Maps of Soil suitability maps or soil surveys should be established in the line with the operational scale and appropriate to the scale of operation and should include information on soil types, topography, hydrology, rooting depth, moisture availability, stoniness and fertility to ensure long-term sustainability of the development. Soils requiring appropriate practices should be identified (see Criteria 4.3 and 7.4). This information should be used to plan planting programmes, etc. Measures should be planned to minimise erosion through appropriate use of heavy machinery, terracing on slopes, appropriate road construction, rapid establishment of land cover, protection of riverbanks, etc. Areas located within the plantation perimeters that are considered unsuitable for long-term oil palm cultivation will be delineated in plans and included in operations for conservation or rehabilitation as appropriate (see Criterion 7.4).

Assessing soil suitability is also important for smallholders, particularly where there are significant numbers operating in a particular location. Information should be collected on soil suitability by companies planning to purchase Fresh Fruit Bunches (FFB) from outgrowers scheme (skema kemitraan) in certain location. potential developments of independent smallholders in a particular location. Companies should assess this information and provide information to independent smallholders involving in the outgrowers scheme on soil suitability, and/or in conjunction with relevant government/public institutions and other organisations (including NGOs) provide information in order to assist independent smallholders to grow oil palm sustainably.

One of referred guidances is on the table 1 (page. 6) regarding Land Suitability Criteria for Oil Palm in the Technical Guidance for Developing Oil Palm Estate issued by Directorate General of Estate Crops, Ministry of Agriculture, 2006. a. Are soil suitability/survey maps for the planted areas avail- The company has a map of the land for Sei Baleh Estate, Serbangan Estate, NA able or in place? Tanah Raja Estate, Gurah Batu Estate; Kuala Piasa Estate shows mainly al-  Is the map adequate to establish the long-term suita- luvial soil type. bility of land for oil palm cultivation? Maps of soil types for all estates are available at the main office. The maps  Are the soil suitability maps or soil surveys appropriate show that there are no marginal soils within the estate area and most of the to the scale of operation? estate land consists of alluvial soils and podsoils.  Does the soil suitability maps or soil surveys include information on soil types, topography, and hydrology, The company has work instructions for planting on slopes are documented rooting depth, moisture availability, stoniness and fer- and describes methods to reduce soil erosion on slopes with ‘tapak kuda’ tility? (horseshoe) methods.  Do the soil suitability maps or soil surveys identify soils requiring appropriate practices? b. Are there any areas located within the plantation perimeters that are considered unsuitable for long-term oil palm cultivation? QMF: RSPO-007a-18(Rev.4.April 2019) RSPO Surveillance Assessment] Report PT Bakrie Sumatera Plantation – Kisaran Palm Oil Mill –

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CR CHECKLIST RESULTS OF VERIFICATION STATU S (C / NC / C WITH OBS.)  Are such areas delineated in the plans?  Are there areas set aside for conservation?  Or are there plans for rehabilitation as appropriate? c. Does the company plan to purchase Fresh Fruit Bunches (FFB) from potential developments of independent suppliers in a particular location? d. If yes, the following information should be obtained:  Is information on soil suitability collected and assessed?  Has the company provided information on soil suitability to the independent smallholders in order to assist them to grow oil palm sustainably?

7.2.2 Topographic information adequate to guide the planning of drainage and irrigation systems, roads and other infrastructure shall be available and taken into account in plans and operations a. Does the area where plantings are done require drainage or The company has a map of the land for Sei Baleh Estate, Serbangan Estate, NA irrigation? Tanah Raja Estate, Gurah Batu Estate; Kuala Piasa Estate shows mainly al- b. If yes, is there adequate topographic information to guide luvial soil type. the planning of drainage and irrigation systems? c. Is the topographic information and best practices taken into Maps of soil types for all estates are available at the main office. The maps consideration during the development of roads and infra- show that there are no marginal soils within the estate area and most of the structure? estate land consists of alluvial soils and podsoils. The company has work instructions for planting on slopes are documented and describes methods to reduce soil erosion on slopes with ‘tapak kuda’ (horseshoe) methods.

7.3 New plantings since November 2005 have not replaced primary forest or any area required to maintain or enhance one or more High Conservation Values

7.3.1 (M) There shall be evidence that no new plantings have replaced primary forest, or any area required to maintain or enhance one or more High Conservation Val- ues (HCVs), since November 2005. New plantings shall be planned and managed to best ensure the HCVs identified are maintained and/or enhanced (see Criterion 5.2).

Specific Guidance: For 7.3.1: Evidence should include historical remote sensing imagery which demonstrates that there has been no conversion of primary forest or any area required to maintain or enhance one or more HCV. HCV Assessment should apply satellite or aerial photographs, land use maps and vegetation maps should be used to inform the HCV assessment.

Where land has been cleared since November 2005, and without a prior and adequate HCV assessment, it will be excluded from the RSPO certification programme until an adequate HCV compensation plan has been developed and accepted by the RSPO. Guidance: QMF: RSPO-007a-18(Rev.4.April 2019) RSPO Surveillance Assessment] Report PT Bakrie Sumatera Plantation – Kisaran Palm Oil Mill –

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CR CHECKLIST RESULTS OF VERIFICATION STATU S (C / NC / C WITH OBS.) This Criterion applies to forests and other vegetation types. This applies irrespective of any changes in land ownership or farm management that have taken place since November 2005 unless if previous owner have conducted HCV assessment.. HCVs may be identified in restricted areas of a landholding, and in such cases new plantings can be planned to allow the HCVs to be maintained or enhanced.

HCVs may be identified in restricted areas of a landholding, and in such cases new plantings can be planned to allow the HCVs to be maintained or enhanced. This refers to the Guidance for HCV Management and Monitoring approved by the RSPO

The HCV assessment process requires appropriate training and expertise, and will include consultation with local communities, particularly for identifying social HCVs. HCV assessments should be conducted according to the Guidance for Identifying HCV in Indonesia (HCV Toolkit Indonesia) of 2008 or its revision. National Interpreta- tion of the HCV criteria or according to the Global HCV Toolkit if a National Interpretation is not available (see Definitions).

Developments should actively seek to utilise previously cleared and/or degraded land on mineral soil. Plantation development should not put direct or indirect pressure on primary forests and HCV through the use of all available agriculture through the use of all available agricultural land in an area.

Although the planned development is consistent with the landscape planning by the local and national government, the requirements of protecting HCV still shall be met.

For new planting with areas ≤ 3000 Ha, assessment of HCV can be conducted internally and externally. If the assessment of HCV is conducted internally, in accordance with the scheme of HCV RSPO using ALS system, assessor team leader of HCV shall be an assessor who has obtained license of HCV Assessor from HCVRN. Peer review from the competent party shall be conducted referring to the Common Guidance for the Identification of HCV 2013. For the new planting with the area > 3000 Ha, the assessment of HCV shall be conducted by the external party who has obtained license of HCV Assessor from HVCRN.

Where landscape level HCV maps have been developed, these should be taken into account in project planning, whether or not such maps form part of government land use plans.

In case of small areas located either in hydrologically sensitive landscapes or in HCV areas where conversion can jeopardise large areas or species, the HCV assessment shall be conducted by independent assessor who has obtained license of HCV Assessor from HCVRN (see Guidance: Criterion 7.2). an independent assessment will be required. HCV areas can be very small.

Once established, new developments should comply with Criterion 5.2. a. Since November 2005, have any new plantings replaced There are areas which land cleared and planted after 2005 (2009, 2010, C primary forest, or any area required to maintain or enhance 2011, 2012 and 2018) located at all Serbangan, Sei Baleh, Gurach Batu and one or more High Conservation Values (HCVs)? If yes, was Tanah Raja Estate with details as mentioned below: an adequate HCV assessment carried out prior to the clear- Estate (Ha) ing of the land? No. YoP Serban Sei G. T. b. Where HCVs have been identified on the land that is in- gan Baleh Batu Raja tended for new plantings, have new plantings been planned 1. 2009 161 216 139 326 and managed to best ensure the HCVs identified are main- 2. 2010 321 248 158 349 tained and/or enhanced (see Criterion 5.2)? 3. 2011 75 77 83 132 c. Are there finalised HCV maps and areas endorsed/signed 4. 2012 26 3 - - off by management showing type of HCV and area cover- QMF: RSPO-007a-18(Rev.4.April 2019) RSPO Surveillance Assessment] Report PT Bakrie Sumatera Plantation – Kisaran Palm Oil Mill –

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CR CHECKLIST RESULTS OF VERIFICATION STATU S (C / NC / C WITH OBS.) age (ha)? 5. 2018 - - - 106 d. Has the company comply with NPP procedures? i.e. NPP TOTAL 583 544 380 913 documents was submitted and put for public notification. GENERAL 2,420 e. Is CB verification of NPP documents include field verifica- TOTAL tion? If not, field verification of HCV is required during certification audit. The company has documents: f. Where land has been cleared since November 2005, and - Letter from General Manager of PT BSP Area Sumut 1 (Number: without a prior and adequate HCV assessment, is there ev- 78/GM-Sumut1/VIII/2018 dated August 6, 2018) to PT TUV Rheinland idence that an adequate HCV compensation plan for the af- Indonesia regarding out of scope for the conversion areas on Kisaran fected area has been developed and accepted by the POM audit scope with amount 2,420 Ha. RSPO? - Commitment from Management for revised the HCV document (letter from QHSE Head to Coorporate Sustainability Coordinator Number: 17/QHSE/VIII/2018 dated August 6, 2018).

7.3.2 (M) Reports of A comprehensive HCV assessment which involves including stakeholder consultation and includes record of land-use change since November 2005, shall be available. This HCV assessment shall be conducted prior to any conversion or new planting. This shall include a land use change analysis to determine changes to the vegetation since November 2005. This analysis shall be used, with proxies, to indicate changes to HCV status. a. Is the prepared HCV assessment comprehensive? Was the There are areas which land cleared and planted after 2005 (2009, 2010, C assessment prepared in consultation with the affected 2011, 2012 and 2018) located at all Serbangan, Sei Baleh, Gurach Batu and stakeholders prior to any conversion or new planting? Tanah Raja Estate with details as mentioned below: b. Do the HCV assessments include land use change analysis Estate (Ha) to determine changes to the vegetation since November No. YoP Serban Sei G. T. 2005? (This analysis shall be used, with proxies, to indicate gan Baleh Batu Raja changes to HCV status) 1. 2009 161 216 139 326 2. 2010 321 248 158 349 3. 2011 75 77 83 132 4. 2012 26 3 - - 5. 2018 - - - 106 TOTAL 583 544 380 913 GENERAL 2,420 TOTAL

The company has documents: - Letter from General Manager of PT BSP Area Sumut 1 (Number: 78/GM-Sumut1/VIII/2018 dated August 6, 2018) to PT TUV Rheinland Indonesia regarding out of scope for the conversion areas on Kisaran POM audit scope with amount 2,420 Ha. - Commitment from Management for revised the HCV document (letter from QHSE Head to Coorporate Sustainability Coordinator Number: 17/QHSE/VIII/2018 dated August 6, 2018). QMF: RSPO-007a-18(Rev.4.April 2019) RSPO Surveillance Assessment] Report PT Bakrie Sumatera Plantation – Kisaran Palm Oil Mill –

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7.3.3 Records Dates of land preparation and clearing dates shall be available. commencement shall be recorded

Are the dates of land preparation and commencement recorded? There are areas which land cleared and planted after 2005 (2009, 2010, C 2011, 2012 and 2018) located at all Serbangan, Sei Baleh, Gurach Batu and Tanah Raja Estate with details as mentioned below: Estate (Ha) No. YoP Serban Sei G. T. gan Baleh Batu Raja 1. 2009 161 216 139 326 2. 2010 321 248 158 349 3. 2011 75 77 83 132 4. 2012 26 3 - - 5. 2018 - - - 106 TOTAL 583 544 380 913 GENERAL 2,420 TOTAL

The company has documents: - Letter from General Manager of PT BSP Area Sumut 1 (Number: 78/GM-Sumut1/VIII/2018 dated August 6, 2018) to PT TUV Rheinland Indonesia regarding out of scope for the conversion areas on Kisaran POM audit scope with amount 2,420 Ha. - Commitment from Management for revised the HCV document (letter from QHSE Head to Coorporate Sustainability Coordinator Number: 17/QHSE/VIII/2018 dated August 6, 2018).

7.3.4 (M) An action plan shall be developed that describes operational actions consequent to the findings of the HCV assessment, and that references the grower’s relevant operational procedures (see Criterion 5.2)

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CR CHECKLIST RESULTS OF VERIFICATION STATU S (C / NC / C WITH OBS.) a. Has the company developed an action plan that describes There are areas which land cleared and planted after 2005 (2009, 2010, C operational actions consequent to the findings of the HCV 2011, 2012 and 2018) located at all Serbangan, Sei Baleh, Gurach Batu and assessment? Tanah Raja Estate with details as mentioned below: b. Does the action plan reference the grower’s relevant opera- Estate (Ha) tional procedures (see Criterion 5.2)? No. YoP Serban Sei G. T. gan Baleh Batu Raja 1. 2009 161 216 139 326 2. 2010 321 248 158 349 3. 2011 75 77 83 132 4. 2012 26 3 - - 5. 2018 - - - 106 TOTAL 583 544 380 913 GENERAL 2,420 TOTAL

The company has documents: - Letter from General Manager of PT BSP Area Sumut 1 (Number: 78/GM-Sumut1/VIII/2018 dated August 6, 2018) to PT TUV Rheinland Indonesia regarding out of scope for the conversion areas on Kisaran POM audit scope with amount 2,420 Ha. - Commitment from Management for revised the HCV document (letter from QHSE Head to Coorporate Sustainability Coordinator Number: 17/QHSE/VIII/2018 dated August 6, 2018).

7.3.5 Evidence of consultation with the Areas required by affected community shall be available in order to identify the area required by such community to fulfill its basic needs, by considering the positive and negative changes to the livelihood as a result of plantation operations. Such matters shall be included in the HCV analysis

Communities to meet their basic needs, taking into account potential positive and negative changes in livelihood resulting from proposed operations, shall be identified in consultation with the communities and incorporated into HCV assessments and management plans (see Criterion 5.2). Specific Guidance: For 7.3.5: The management plan will be adaptive to changes in HCV 5 and 6. Decisions will be made in consultation with the affected communities. a. Have areas required by affected communities to meet their Yes C basic needs, taking into account potential positive and negative changes in livelihood resulting from proposed operations, been identified in consultation with the communities? b. Have these areas been incorporated into HCV assessments and management plans (see Criterion 5.2)? 7.4 Extensive planting on steep terrain, and/or marginal and fragile soils, including peat, is avoided.

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CR CHECKLIST RESULTS OF VERIFICATION STATU S (C / NC / C WITH OBS.) 7.4.1 (M) Maps identifying Indicative maps showing marginal and fragile soils, including excessive gradients and peat soils, shall be available and used to identify areas to be avoided.

Guidance: The process of identifying fragile and marginal soil should be conducted after getting Plantation Business Permit (IUP) Total area planting on fragile soils including peat whitin the new development shall not be greater than 100 Ha or 20% of the total area, whichever is smallest (see Cri- terion 4.3). Adverse impacts may include hydrological risks or significantly increased risks (e.g. fire risk) in areas outside the plantation (see Criterion 5.5). The legal aspect of compliance within this national interpretation document shall follow the changed laws and regulations but should at least meet the above minimum limit.

This activity should be integrated with the social and environmental impact assessment (SEIA) required by Criterion 7.1.

Planting on extensive areas of peat soils should not be conducted on peat with ≥3 m depth. If planting conducted on peat with <3 m depth, then the area (as regulated by Regulation of the Minister of Agriculture No. 14 year 2009: Guidance on Peatland Utilization for Oil Palm Cultivation) shall meet the following requirements: a. Within designated cultivation area b. Whereas the proportion of ≤ 3 m depth of peat and mineral soil (if any) is minimal 70% of the total concession area c. The mineral soil below peat layer is not quartz sand or acidic sulfate soil d. The peat soils maturity level is mature (sapric) e. The fertility level is eutropic

Cultivation on peatland must also comply with Government Regulation No 71 year 2014 concerning the Protection and Management of Peatland Ecosystems and other fragile soils should be avoided (see Criterion 4.3). Adverse impacts may include hydrological risks or significantly increased risks (e.g. fire risk) in areas outside the plantation (see Criterion 5.5).

Excessive slope is defined as slope more than 40% referring to Regulation of the Minister of Agriculture No.11/Permentan/OT.140/3/2015 regarding Guidance of Indonesia Sustainable Palm Oil and the Regulation of the Minister of Agriculture No. 47 year 2006 regarding General Guidance for Agriculture at Mountain Area.

Soil conservation measures (such as terracing, individual terrace, legume cover crops, silt pit, frond stacking, etc.) should be conducted.

Soil suitability should be determined using crop and environmental suitability criteria.

Those identified as marginal and/or problematic should be avoided if the soil cannot be improved through agricultural cultivation.

The risky and marginal soils may include sandy soils, low organic content soils, and potential or actual acid sulphate soils. Suitability of these soils is also influenced by other factors including rainfall, terrain and management practices.

These areas may only be developed for new plantations which have adequate management plans based on best management practices. Failure due to extensive plantings should be avoided on these soil types.

Fragile soils on which extensive planting shall be avoided include peat soils, mangrove sites and other wetland areas.

This activity should be integrated with the social and environmental impact assessment (SEIA) required by Criterion 7.1. QMF: RSPO-007a-18(Rev.4.April 2019) RSPO Surveillance Assessment] Report PT Bakrie Sumatera Plantation – Kisaran Palm Oil Mill –

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Excessive planting on fragile soil refer to Annex 2 Generic RSPO P&C, 2013.

Wetland definition refers to RAMSAR. a. Are there maps identifying marginal and fragile soils, includ- There is a map identifying marginal and fragile soils, including excessive C ing excessive gradients and peat soils? gradients and peat soils available and used to identify areas to be avoided. b. If peat is present, does the map show the extent, nature, and depth of peat? For the new plantings, the company has not limited planting on fragile and c. Are the maps used to identify areas that are inappropriate marginal soils, including peat. for planting? d. Have the maps been incorporated for use in the social and environmental impact assessment (SEIA)? e. Is there evidence that planting on extensive areas of peat soils and other fragile soils have been avoided?

7.4.2 (M) Where limited planting on fragile and marginal soils, including peat, is proposed, a documented plan plans shall be developed and implemented to protect them without incurring adverse impacts. a. Are there plans to protect planted areas on fragile and mar- There is a map identifying marginal and fragile soils, including excessive C ginal soils, including peat from adverse impacts? gradients and peat soils available and used to identify areas to be avoided. b. Does the plan take into consideration specific control and NI thresholds, including: For the new plantings, the company has not limited planting on fragile and  Slope limits; marginal soils, including peat.  List of soil types that need to be avoided, especially peat soil;  Proportion of plantation areas that can include marginal / fragile soil. c. Has the plan been implemented?

7.5 No new plantings are established on local peoples’ land where it can be demonstrated that there are legal, customary or user rights, without their free, prior and informed consent. This is dealt with through a documented system that enables these and other stakeholders to express their views through their own representative institutions. 7.5.1 (M) Evidence shall be available that affected local peoples understand they have the right to say ‘yes” or ‘no’ to operations planned on their lands before and during initial discussions, during the stage of information gathering and associated consultations, during negotiations, and up until an agreement with the grower/miller is signed and ratified by these local peoples.

Refer also to See criteria 2.2, 2.3, 6.2, 6.4 and 7.6 for Indicators and Guidance on compliance. Guidance: This activity should be integrated with the Social and Environmental Impact Assessment (SEIA) required by Criterion 7.1.

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CR CHECKLIST RESULTS OF VERIFICATION STATU S (C / NC / C WITH OBS.) Where new plantings are considered to be acceptable by the communities,, management plans and operations should minimise the adverse impacts (such as disturb- ing sacred sites)and promote positive ones. maintain sacred sites. Agreements with indigenous peoples, local communities and other stakeholders should be made without coercion or other undue influence (see Guidance for Criterion 2.3).

Where communities decline to release lands rights on these terms the grower or miller must explore legal alternatives such as leasing or renting or securing community land or enclaving or other mutually agreed schemes or decide not to go ahead with its proposed development.

Relevant stakeholders include those affected by or concerned with the new plantings.

Free, prior and informed consent (FPIC) should be applied to all RSPO members throughout the supply chain. Please refer to FPIC guidelines approved by the RSPO (RSPO endorsed Free, Prior and Informed Consent Guide for RSPO Members, November 2015). is a guiding principle and should be applied to all RSPO members throughout the supply chain. Refer to RSPO approved FPIC guidance (‘FPIC and the RSPO; A Guide for Companies’, October 2008).

Customary and user rights will be demonstrated through participatory user mapping as part of the FPIC process.

Verification evidence may be in the form of documents on socialization to the affected community, agreement or disagreement from the community, communication and consultation with the community. a. Does the new planting area include ‘local people’s land’? The conversion areas at Gurach Batu Estate and Tanah raja Estate are al- C b. If yes, has the community given their consent? raidy inside PT BSP HGU Area, based on HGU Certificate, December 21st c. Is there evidence to demonstrate that the con- 2006, Kabupaten Asahan, KecamatanKisaran Timur, Kelurahan Kisaran Ti- sent/agreement has been given? mur and No. 02.07.72.01.00002. Pemegang PT Bakrie Sumatera Plantation; d. Has the community been given the opportunity to say ‘no’ to width area 10.556,01 Hectares. No new planting conversion areas were new the proposed development? land areas. All of the area has clean and clear status as PT BSP asset since e. Are the principles of the FPIC process followed? before the HGU released.

7.6 Where it can be demonstrated that local peoples have legal, customary or user rights, they are compensated for any agreed land acquisitions and relinquishment of rights, subject to their free, prior and informed consent and negotiated agreements. 7.6.1 (M) Documented identification and assessment of demonstrable legal, customary and user rights shall be available. Specific Guidance: For 7.6.1: This activity shall be integrated with the social and environmental impact assessment (SEIA) required by Criterion 7.1. Guidance: Refer to Criteria 2.2, 2.3 and 6.4 and associated Guidance.

This requirement includes indigenous peoples as regulated by, such as, the Act No. 5 year 1994 regarding Endorsement of UN Convention on Biodiversity. (see Annex 1).

Please Refer to RSPO approved FPIC guidelines approved by the RSPO (RSPO endorsed Free, Prior and Informed Consent Guide for RSPO Members, November 2015). guidance (‘FPIC and the RSPO; A Guide for Companies’, October 2008) a. Does the SEIA include the identification and assessment of The conversion areas at Gurach Batu Estate and Tanah raja Estate are al- C legal, customary and user rights of the area? raidy inside PT BSP HGU Area, based on HGU Certificate, December 21st b. Does the company have SOPs to identify and assess any 2006, Kabupaten Asahan, KecamatanKisaran Timur, Kelurahan Kisaran Ti- QMF: RSPO-007a-18(Rev.4.April 2019) RSPO Surveillance Assessment] Report PT Bakrie Sumatera Plantation – Kisaran Palm Oil Mill –

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CR CHECKLIST RESULTS OF VERIFICATION STATU S (C / NC / C WITH OBS.) legal, customary and user rights of the local peoples? mur and No. 02.07.72.01.00002. Pemegang PT Bakrie Sumatera Plantation; c. Is there any known notification from the stakeholders claim- width area 10.556,01 Hectares. No new planting conversion areas were new ing to have legal, customary and/or user rights on the land land areas. All of the area has clean and clear status as PT BSP asset since for the new planting area? before the HGU released. d. Has the claim been identified and assess according to the protocol/SOP? Does the process follow and respect the FPIC principles? e. Has the process of identification and assessment been recorded/documented and made publicly available? 7.6.2 (M) A system A procedure for identifying people entitled to compensation shall be available in place.

a. Does the company have a system in place to identify peo- The conversion areas at Gurach Batu Estate and Tanah raja Estate are al- C ple and/or community groups entitled to compensation? raidy inside PT BSP HGU Area, based on HGU Certificate, December 21st b. Is the system documented? 2006, Kabupaten Asahan, KecamatanKisaran Timur, Kelurahan Kisaran Ti- c. Does the system follow and respect the FPIC principles? mur and No. 02.07.72.01.00002. Pemegang PT Bakrie Sumatera Plantation; width area 10.556,01 Hectares. No new planting conversion areas were new land areas. All of the area has clean and clear status as PT BSP asset since before the HGU released. 7.6.3 (M) A system for Records of calculation system and distribution of calculating and distributing fair compensation (monetary or otherwise) shall be available in place. a. Does the company have a system in place to calculate and The conversion areas at Gurach Batu Estate and Tanah raja Estate are al- C distribute fair compensation (monetary or otherwise)? raidy inside PT BSP HGU Area, based on HGU Certificate, December 21st b. Is the system documented and publicly made available? 2006, Kabupaten Asahan, KecamatanKisaran Timur, Kelurahan Kisaran Ti- c. Does the system follow and respect the FPIC principles? mur and No. 02.07.72.01.00002. Pemegang PT Bakrie Sumatera Plantation; width area 10.556,01 Hectares. No new planting conversion areas were new land areas. All of the area has clean and clear status as PT BSP asset since before the HGU released. 7.6.4 Communities that have lost access and rights to land for plantation expansion shall be given opportunities to benefit from plantation development

Does the company provide communities that have lost access and The conversion areas at Gurach Batu Estate and Tanah raja Estate are al- C rights to land for plantation expansion opportunities to benefit from raidy inside PT BSP HGU Area, based on HGU Certificate, December 21st plantation development? 2006, Kabupaten Asahan, KecamatanKisaran Timur, Kelurahan Kisaran Ti- mur and No. 02.07.72.01.00002. Pemegang PT Bakrie Sumatera Plantation; width area 10.556,01 Hectares. No new planting conversion areas were new land areas. All of the area has clean and clear status as PT BSP asset since before the HGU released. 7.6.5 The process and outcome of any compensation claims shall be documented and made publicly available to the affected communities and their representatives.

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CR CHECKLIST RESULTS OF VERIFICATION STATU S (C / NC / C WITH OBS.) Is the process and outcome of any compensation claims docu- The conversion areas at Gurach Batu Estate and Tanah raja Estate are al- C mented and made publicly available? raidy inside PT BSP HGU Area, based on HGU Certificate, December 21st 2006, Kabupaten Asahan, KecamatanKisaran Timur, Kelurahan Kisaran Ti- mur and No. 02.07.72.01.00002. Pemegang PT Bakrie Sumatera Plantation; width area 10.556,01 Hectares. No new planting conversion areas were new land areas. All of the area has clean and clear status as PT BSP asset since before the HGU released. 7.6.6. Evidence shall be available that the affected communities and rights holders have access to information and advice, that is independent of the project proponent, concerning the legal, economic, environmental and social implications of the proposed operations on their lands.

Specific Guidance: For 7.6.6: Growers and millers will confirm that the communities (or their representatives) gave consent to the initial planning phases of the operations prior to Planta- tion Business Permit (Izin Usaha Perkebunan/IUP) and if requested, Land Title (Hak Guna Usaha (HGU)/Hak Guna Bangunan (HGB)) to the grower and miller. the new issuance of a concession or land title to the operator.

There is documented evidence that communities were informed prior to being asked to release lands to growers and millers that a legal consequence of the grower or miller acquiring a HGU/HGB over their lands is that this will permanently extinguish their land rights within the same area.

Related to 7.6.6, the evidences can be a company’s policy to give community freedom to get information, and also socialization to the affected community. a. Is there record to show that the community and rights hold- The conversion areas at Gurach Batu Estate and Tanah raja Estate are al- NA ers have freedom to access information and independent raidy inside PT BSP HGU Area, based on HGU Certificate, December 21st advisor(s) concerning the legal, economic, environmental 2006, Kabupaten Asahan, KecamatanKisaran Timur, Kelurahan Kisaran Ti- and social implications of the proposed operations on their mur and No. 02.07.72.01.00002. Pemegang PT Bakrie Sumatera Plantation; lands? width area 10.556,01 Hectares. No new planting conversion areas were new b. Is there evidence to show that the company has sought the land areas. All of the area has clean and clear status as PT BSP asset since community and the right holders’ consent to the initial plan- before the HGU released. ning phases of the operations prior to the new issuance of a concession or land title? c. Did the communities (or their representatives) give consent to the initial planning phases of the operations prior to the new issuance of a concession or land title?

7.7 No use of fire in the preparation of new plantings other than in specific situations, as identified in the ASEAN guidelines or other regional best practice

7.7.1 (M) Records of zero burning implementation on land clearing, referring to the ASEAN Policy on zero burning (2003) and recognised techniques based on the existing regulations shall be available. There shall be no land preparation by burning, other than in specific situations, as identified in the Guidelines for the Implementa- tion of the ASEAN Policy on Zero Burning’ 2003, or comparable guidelines in other regions. Guidance: Guidance ini untuk 7.7.2 (bukan 7.7.1) Fire should be used only where an assessment has demonstrated that it is the most effective and least environmentally damaging option for minimising the risk of severe pest and disease outbreaks, and exceptional levels of caution are required for use of fire on peat. This should be subject to regulatory provisions under respective national environmental legislation. Extension/training programmes for smallholders may be necessary.

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CR CHECKLIST RESULTS OF VERIFICATION STATU S (C / NC / C WITH OBS.) a. Is there evidence of land preparation by burning? The company has established a zero burning policy signed by top manage- NA (The auditors shall conduct site verification of the newly ment and not used fire for preparing land for replanting so assessment doc- planted site which will include interviews with workers). ument not available. There is evidence that during field visit that there is no b. Was land prepared using the burn method due to reasons fire using for replanting or any other purposes. or specific situations, as identified in the ‘Guidelines for the Implementation of the ASEAN Policy on Zero Burnings’ 2003, or comparable guidelines in other regions? c. If the burn method has been used for land preparation, has the company complied with the requirements of ‘Guidelines for the Implementation of the ASEAN Policy on Zero Burn- ing’ 2003, or comparable guidelines in other regions? d. Is document showing proper justification for such activity available? 7.7.2 In exceptional cases where fire has to be used for preparing land for planting, there shall be evidence of prior approval of the controlled burning as specified in ‘Guidelines for the Implementation of the ASEAN Policy on Zero Burning’ 2003, or comparable guidelines in other regions. Specific Guidance: For 7.7.2: This activity shall be integrated with the social and environmental impact assessment (SEIA) required by Criterion 7.1. Fire should be used only where an assessment has demonstrated that it is the most effective and least environmentally damaging option for minimizing the risk of severe pest and disease outbreaks, and exceptional levels of caution are required for use of fire on peat. This should also refer to the ASEAN Policy on Zero Burning (2003) and respective national environment regulations.

a. In exceptional cases where fire has to be used for preparing The company has established a zero burning policy signed by top manage- NA land for planting, is there evidence of prior approval of the ment and not used fire for preparing land for replanting so assessment doc- controlled burning as specified in ‘Guidelines for the Imple- ument not available. There is evidence that during field visit that there is no mentation of the ASEAN Policy on Zero Burning’ 2003, or fire using for replanting or any other purposes. comparable guidelines in other regions? b. Was the activity incorporated in the SEIA report? c. What were the mitigation measures? Was it implemented?

7.81 New plantation developments are designed to minimise net greenhouse gas emissions. Preamble : It is noted that oil palm and all other agricultural crops emit and sequester greenhouse gases (GHG). There has already been significant progress by the oil palm sector, especially in relation to reducing GHG emissions relating to operations. Acknowledging both the importance of GHGs, and the current difficulties of determining emissions, the following new Criterion is introduced to demonstrate RSPO’s commitment to establishing a credible basis for the Principles and Criteria on GHGs.

Growers and millers commit to reporting on projected GHG emissions associated with new developments. However, it is recognised that these emissions cannot be projected with accuracy with current knowledge and methodology.

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CR CHECKLIST RESULTS OF VERIFICATION STATU S (C / NC / C WITH OBS.) Growers and millers commit to plan development in such a way to minimise net GHG emissions towards a goal of low carbon development (noting the recommendations agreed by consensus of the RSPO GHG WG2).

Growers and millers commit to an implementation period for promoting best practices in reporting to the RSPO, and after December 31st 2016 to public reporting. Growers and millers make these commitments with the support of all other stakeholder groups of the RSPO. 7.8.1 (M) The carbon stock of the proposed development area and major potential sources of emissions that may result directly from the development shall be identified and estimated. Specific Guidance: For 7.8.1: GHG identification and estimates can be integrated into existing processes such as HCV and soil assessments.

The RSPO carbon assessment tool for new plantings will be available to identify and estimate the carbon stocks. It is acknowledged that there are other tools and methodologies currently in use; the RSPO working group will not exclude these, and will include these in the review process.

The RSPO PalmGHG tool or an RSPO-endorsed equivalent will be used to estimate future GHG emissions from new developments using, amongst others, the data from the RSPO carbon assessment tool for new plantings.

Parties seeking to use an alternative tool for new plantings will have to demonstrate its equivalence to the RSPO for endorsement.

Guidance

This Criterion covers plantations, mill operations, roads and other infrastructure. It is recognised that there may be significant changes between the planned and final development area, hence the assessment may need to be updated before the time of implementation.

Public reporting is desirable, but remains voluntary until the end of the implementation period.

During the implementation period until December 31st 2016 (as specified in Criterion 5.6), reporting on GHG will be to a relevant RSPO working group (composed of all membership categories) which will use the information reported to review and fine tune the tools, emission factors and methodologies, and provide additional guidance on the process. During the implementation period the RSPO working group will seek to further develop and continually improve the RSPO carbon assessment tool for new plantings, recognising the challenges associated with estimating carbon stocks and projecting GHG emissions from new developments.

Thereafter growers and millers will ensure that new plantation developments are designed to minimise net GHG emissions and commit to reporting publicly on this.

Once established, new developments should report on-going operational, land use and land use change emissions under Criterion 5.6.

According to the recommendation from RSPO GHG Working Group 2, the total carbon emission (above and below ground) from new development area ideally is not bigger than carbon that can be absorbed in one rotation period of all new developments (i.e. average of oil palm trees, riparian buffer zone, and the set aside forest area). To help achieving this, the plantation should be developed in area with low carbon stock (i.e. mineral soil, area with low biomass, etc) or within area that currently is being utilized for agriculture or intensive plantation whose owner has agreed to convert the areas into oil palm. The agreed methodology to assess and report on carbon stock and emission sources as well as default number for the both estimation is now being developed by RSPO.

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CR CHECKLIST RESULTS OF VERIFICATION STATU S (C / NC / C WITH OBS.) er to the gains in carbon stock within the new development area, including set aside areas (non- planted area) for one rotation period.

a. Is there an assessment conducted to identify and estimate As stated on criterion 5.6, the company has identification of source emission C the carbon stock in the proposed development area and and polluting from entire activity. The company has conduct identification for major potential sources of emissions that may result directly activity that produced emission and pollution. The company has mitigation from the development? program to reduce pollution and greenhouses gassess emission. The mitiga- b. What are the tools and methodologies used to identify and tion plan covered information i.e. goals, target and time period to reduce estimate the carbon stock and potential sources of emis- emission and pollution. sion? c. Has the results of the carbon stock assessment been sub- The Company has conduct calculation of GHG emissions for 2018 using mitted and reported to RSPO according to RSPO proce- GHG Calculator version 3.0.1. The company has sent evidence monitoring of dures and timeline? emission of pollutans came from estate and mill activity. The company has been conduct reporting of GHG calculation to RSPO. The company has been conduct GHG calculation in accordance with Palm GHG version 3.0.1.

7.8.2 There shall be a plan to minimise net Records of plan to minimize net GHG emissions shall be available which takes into account avoidance of land areas with high carbon stocks and/or sequestration options. Specific Guidance:

For 7.8.2: Growers are strongly encouraged to establish new plantings on mineral soils, in low carbon stock areas, and cultivated areas, which the current users are willing to develop into oil palm. Millers are encouraged to adopt low-emission management practices (e.g. better management of palm oil mill effluent (POME), efficient boilers etc.) in new developments.

Growers and millers should plan to implement RSPO best management practices for the minimisation of emissions during the development of new plantations.

Some efforts to minimise net GHG emissions, but not limited to: a. Avoiding high carbon stock area b. Enriching HCV c. Improving carbon sequestration d. Minimising use of fossil fuel e. Implementing zero burning

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CR CHECKLIST RESULTS OF VERIFICATION STATU S (C / NC / C WITH OBS.) a. Is there a plan to minimise net GHG emissions from new As stated on criterion 5.6, the company has identification of source emission C development? and polluting from entire activity. The company has conduct identification for b. Does this plan take into account avoidance of land areas activity that produced emission and pollution. The company has mitigation with high carbon stocks, sequestration options and low- program to reduce pollution and greenhouses gassess emission. The mitiga- emission management practices? tion plan covered information i.e. goals, target and time period to reduce emission and pollution.

The Company has conduct calculation of GHG emissions for 2018 using GHG Calculator version 3.0.1. The company has sent evidence monitoring of emission of pollutans came from estate and mill activity. The company has been conduct reporting of GHG calculation to RSPO. The company has been conduct GHG calculation in accordance with Palm GHG version 3.0.1.

Principle 8: Commitment To Continual 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 continual improvement in key operations. 8.1.1 (M) The action plan for continual improvement shall be implemented, based on a consideration of the main social and environmental impacts and routine evaluation of the plantation and mill operations. opportunities of the grower/mill, and shall include a range of Indicators covered by these Principles and Criteria. As a minimum, these shall include, but are not necessarily be limited to: • Reduction in use of certain chemicals pesticides(Criterion 4.6); • Environmental impacts (Criteria 4.3, 5.1 and 5.2); • Waste reduction (Criterion 5.3); • Pollution and greenhouse gas (GHG) emissions (Criteria 5.6 and 7.8); • Social impacts (Criterion 6.1); • Optimising the yield of the supply base (criterion 4.2).

Guidance: Growers should have a system to improve practices in line with new information and techniques, and a mechanism for disseminating this information throughout the workforce. For smallholders, there should be systematic guidance and training for continual improvement.

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CR CHECKLIST RESULTS OF VERIFICATION STATU S (C / NC / C WITH OBS.)

The minimum specific performance for key indicators is based upon the existing regulations and best plantation practices (Crite- ria 4.2, 4.3, 4.4, and 4.5). Several standards related to Criteria 4.2, 4.3, 4.4, and 4.5:  Leaf analysis at least on yearly basis.  Soil analysis should be done periodically based on company’s consideration  Plantable slope < 40%.  BOD of effluent used forLand Application is maximum 5000 ppm, and for discharging to the water body is maximum 100 ppm  For planting on peat, the water table should be maintained at an average of at least 50 cm (40 – 60 cm) below ground surface measured with groundwater piezometer readings, or an average of 60 cm (between 50 – 70 cm) below ground surface as measured in water collection drains as per the Manual Best Management Practices for existing oil palm cultivation on peat, June 2012 or as per existing regulation if equal or shallower measured through a network of appropriate water control structures e.g. weirs, sandbags, etc. in fields, and watergates at the discharge points of main drains (Criteria 4.4 and 7.4).

Regulations regarding water table on peat may refer, but not limited, to: 1. Government Regulation No. 71 year 2014 regarding Protection and Management of Peat Ecosystem 2. Regulation of the Minister of Agriculture No. 14 year 2009 regarding Guideline of Oil Palm Cultivation on Peat 3. Regulation of the Minister of Agriculture No. 11 year 2015 regarding Guideline of Indonesia Sustainable Palm Oil Plantation (ISPO)

a. Is there an action plan for continual improvement? Action plans for continual improvement are implements and on-going as C b. Describe the main components of the plan. found below and described further in the respective criterion, example : c. Has the action plan been implemented? d. Provide examples of continual improvements that have The Company has an internal audit for the evaluation and improvement of been implemented. the best practice activities in the field ac-cordance to the company procedure e. Are history records available to develop the action plan? and/or work instructions. f. Are records of implementation of the action plan available? g. Does the action plan include strategies for: Company also has effort to keep the soil erosion through the cover crop im- • Reduction in use of pesticides (Criterion 4.6)? Is IPM widely plementation to minimize the runoff. implemented? • Environmental impacts (Criteria 4.3, 5.1 and 5.2)? For environmental management the company already done reported the en- • Waste reduction (Criterion 5.3)? vironmental management and monitoring implementation to the related offi- • Pollution and greenhouse gas (GHG) emissions (Criteria cial government every six month periodically. The report showed the result of 5.6 and 7.8)? meas-urement of environmental parameters, such as water sur-face quality, • Social impacts (Criterion 6.1)? land application measurement, air pollution and ambient, waste water/POME • Optimising the yield of the supply base? measurement. Based on certificate result of measurement all of parameters Do growers have a system to improve practices in line with new still un-der below standard. information and techniques, and a mechanism for disseminating this information throughout the workforce?

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Appendix 6: List of Stakeholders Interviewed and Contacted

Name of No. Institution / Position Remarks Stakeholder Stakeholders Interviewed during Public Consultation Meeting 1 Hermansyah Manpower Agency of Asahan District - 2 Poniran Environmental Agency of Asahan District

Stakeholders Interviewed On-Site 1 Andy Wahyudi QHSE Manager 2 Mega Khairani Nst QHSE Officer 3 Budhi Iskandar Manager Mill 4 Amir Loader Operator 5 Desi Grading Assistant 6 Rusli Spraying foreman of Kuala Pisa Estate 7 Saryota Harvester of Kuala Pisa Estate 8 Nang Supandi Asisstant Div III of Kuala Pisa Estate 9 Edi Saputra Spraying foreman of Gurach Batu estate 10 Tato Spraying worker of Gurach Batu Estate 11 Poniem Spraying worker of Gurach Batu Estate 12 Dabila Spraying worker of Gurach Batu Estate 13 Sehat Pangaribuan Warehouse officer 14 Adi Asisstant Divisi II of Sei Baleh Estate 15 Supardi Harvesting foreman of Sei Baleh Estate 16 Boyman Harvester of Sei Baleh Estate 17 Fedrik Sirait Harvester of Gurach Batu estate 18 Waidah Harvester of Gurach Batu estate 19 Paino Harvesting Foreman of Gurach Batu estate 20 Yahya Harvesting Foreman of Serbangan estate 21 Gunandar Harvester of Serbangan estate 22 A. Neson Samosir Estate Manager Kwala Piasa 23 M. Ikhsan Estate Manager Serbangan 24 M. Idris Estate Manager Gurach Batu 25 Abdul Baasyir Kepala krani. 26 Lagi Worker of maintenance road 27 Yusuf Foreman 1 28 Legimen Harvest foreman 29 Dewi Amalia Tarigan HR and POM Administration 30 Haswardi POM Payrool

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Appendix 7: Organization’s land History and information about all previous users of the land. Total of land compensation: - ha Total of entity: …… unit so minimum of the quantity of sample each audit is 0.8 x √….. unit = …. unit

Year of Verifica- Previous land owner Location (estate name Total tion (person name / group Year of land released and their evi- No and or village/sub-village areas Remarks or the result of interview name / traditional dences Plan Actual name) (ha) group name / etc) 1. - - - - -

Note: Based on verification of legal document seen that the land has been usage starting from year 1911. This is historical aboout the land: No Year Owner 1 1911 - 1942 NV Hollandsch Americaanshe Plantage Maatschappij (NV. HAPM) 2 1942 - 1945 Noyen Konri Kyoku under the jurisdiction of thr Japanese Goverment 3 1945 - 1947 Plantation Company NRI Branch IV – Rubber 4 1947 - 1965 PT United States Rubber Sumatra Plantation – Rubber 5 1965 - 1967 PPN Rubber XVIII 6 1967 - 1986 PT Uniroyal Sumatera Plantation – Rubber 7 1986 - 1990 PT United Sumatera Plantation (Acquisition of Bakrie Group) 8 1990 – current PT Bakrie Sumatera Plantation Tbk