FELDA GLOBAL VENTURES PLANTATIONS (MALAYSIA) SDN BHD

RSPO Membership No: 1-0013-04-000-00

PLANTATION MANAGEMENT UNIT KKS Jerangau Barat Grouping Ajil, Terengganu Darul Iman, Malaysia

INTERTEK CERTIFICATION INTERNATIONAL SDN BHD (188296-W)

Report No.: R9303/14-1 Felda Global Ventures Plantations (Malaysia) Sdn Bhd Page 2 of 65 KKS Jerangau Barat Grouping - Main Assessment

MAIN ASSESSMENT REPORT ON RSPO CERTIFICATION

FELDA GLOBAL VENTURES PLANTATIONS (MALAYSIA) SDN BHD (358158-V)

RSPO Membership No: 1-0013-04-000-00

PLANTATION MANAGEMENT UNIT KKS Jerangau Barat Grouping Ajil, Terengganu Darul Iman, Malaysia

Certificate No: RSPO 930388 Issued date: Pending Certification Decision Expiry date: Pending Certification Decision

Assessment Type Assessment Dates Pre Assessment - Initial Certification (Main Assessment) 03-06 Nov 2014 Annual Surveillance Assessment (ASA-01) - Annual Surveillance Assessment (ASA-02) - Annual Surveillance Assessment (ASA-03) - Annual Surveillance Assessment (ASA-04) - Re-Certification -

Intertek Certification International Sdn Bhd (formerly known as Moody International Certification (Malaysia) Sdn Bhd) 6-L12-01, Level 12, Tower 2, Menara PGRM No. 6 & 8 Jalan Pudu Ulu, Cheras, 56100 Kuala Lumpur, Malaysia. Tel: +00 (603) 9283 9881 Fax: +00 (603) 9284 8187 Email: [email protected] Website: www.intertek.com

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TABLE OF CONTENTS

Section Content Page No 1.0 SCOPE OF MAIN ASSESSMENT 4 1.1 Introduction 4 1.2 Location (address, GPS and map) of palm oil mill and estates 4 1.3 Description of supply base (fruit sources) 5 1.4 Year of plantings and cycle 5 1.5 Summary of Land Use – Conservation and HCV Areas 6 1.6 Other certifications held and Use of RSPO Trademarks 6 1.7 Organizational information/contact person 6 1.8 Tonnages Verified for Certification 7 1.9 Time Bound Plan 8 1.10 Abbreviations Used 9 2.0 ASSESSMENT PROCESS 10 2.1 Assessment Methodology, Plan & Site Visits 10 2.2 Date of next scheduled visit 11 2.3 Qualifications of the Lead Assessor and Assessment Team 11 2.4 Certification Body 11 2.5 Process of Stakeholder consultation 11 - 12 3.0 ASSESSMENT FINDINGS 13 3.1 Summary of findings 13 – 44 3.2 Status of Identified Noncompliance and Corrective Actions, Observations and 45 – 53 Identified Positive Elements 3.3 Summary of Feedback Received from Stakeholders and Findings 54 – 55 4.0 ASSESSMENT CONCLUSION AND RECOMMENDATION 56 4.1 Acknowledgement of Internal Responsibility and Confirmation of Assessment Findings 56

4.2 Intertek RSPO Certification Details for KKS Jerangau Barat Grouping 57

APPENDICES Appendix A Qualifications of the Lead Assessor and Assessment Team 58 Appendix B Assessment Plan 59 – 60 Appendix C Maps of location – Mill, Estates, Conservation and HCV areas 61 - 64 Appendix D Photographs of Assessment findings at KKS Jerangau Barat Grouping 65 Appendix E Time Bound Plan for Other Plantation Management Units 66

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1.0 SCOPE OF MAIN ASSESSMENT

1.1 Introduction This Main Assessment was conducted on the Plantation Management Unit (PMU) KKS Jerangau Barat Grouping of Felda Global Ventures Plantations (Malaysia) Sdn Bhd (hereafter abbreviated as FGVPM), from 03-06 Nov 2014, to assess if the organization’s operations of the mill and its supply bases were in compliance against the RSPO Principles and Criteria (Apr 2013), Malaysian National Interpretation (Nov 2010) and the RSPO Supply Chain Certification Standard (Nov 2011) for Palm Oil Mill. This assessment also includes a review of the changes made by the PMU to comply with the requirements of the ratified new RSPO Principles and Criteria (effective 25 Apr 2013). It was found that the PMU is aware of the new RSPO Principles and Criteria and the transition period for compliance but has not yet make all the necessary changes required.

The plantation management unit (PMU) or management unit is equivalent to a certification unit as defined in the RSPO Certification Systems Document. Each PMU consists of one mill and its supply bases which are made up of estates owned/managed by Felda Global Ventures Plantations (Malaysia) Sdn Bhd.

1.2 Location (address, GPS and map) of palm oil mill and estates KKS Jerangau Barat Grouping consists of one (1) palm oil mill, namely Jerangau Barat Mill and three (3) estates as indicated in Table 1 below, which includes the addresses and GPS locations of the mill and estates. The location maps are provided in Appendix C. All the 3 estates (viz., FELDA Mengkawang estate, FELDA Tersat estate, and FELDA/FTP Jerangau Barat estate consist of smallholders (FELDA settlers), each with a land title for an approximate area of 4.0 ha. In this PMU, the smallholders may be categorized as FTP Smallholders or FELDA Smallholders. The FTP Smallholders are those smallholders who applied for their planted area to be managed by Felda Technoplant Sdn. Bhd. (FTP). The FELDA Smallholders are those smallholders who choose to manage their own planted area within the FELDA Settlers’ Scheme. The sampling of estates and sampled number of FTP Smallholders and FELDA Smallholders are as indicated in Table 8 (section 2.1). The palm oil mill is operated by FGVPM.

Table 1: Address of Palm Oil Mill, Estates and GPS Location GPS Reference Name Address Latitude Longitude Jerangau Barat POM Kilang Sawit Jerangau Barat, Wakil Pos Felda Jerangau, 21820 , Ajil, Terengganu Darul Iman, 4°54'58.00"N 103° 8'7.00"E (Capacity:40 MT/hour) Malaysia FELDA Mengkawang Felda Mengkawang, 21800 Ajil, Terengganu 4°53'42.00"N 103° 1'22.00"E estate Darul Iman, Malaysia Felda Tersat ,Pejabat Pos Ajil, 21800, Ajil, FELDA Tersat estate 5° 4'31.00"N 102°59'54.00"E Terengganu Darul Iman, Malaysia FELDA/FTP Jerangau Felda Jerangau Barat, 21820, Ajil, Terengganu 4°55'28.00"N 103° 6'55.00"E Barat estate Darul Iman, Malaysia

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1.3 Description of supply base (fruit sources)

The supply base i.e. FFB sources to the POM at KKS Jerangau Barat Grouping PMU are from the abovementioned 3 estates of this PMU, other uncertified FGVPM/FELDA PMUs and Outside Crop Producers (OCP). Details of the planted hectarage for the FFB supply for Jerangau Barat Grouping are as shown in Table 2 below.

Table 2: Estate Area Summary

Area Summary (ha) as at Oct 2014 Estate Certified Area Planted Area – Oil Palm FELDA Mengkawang estate 2,010.88 1,555.57 FELDA Tersat estate 894.40 764.29 FELDA/FTP Jerangau Barat estate 2,531.60 2,019.28 Total: 5,436.88 4,339.14 Notes: 1. This Main Assessment covered the overall land use for oil palm plantation areas, and the identified Conservation areas including HCV areas (if any) marked out at the estates. 2. The estates sampled for this Main Assessment have been selected based on their potential risks on social, environmental and biodiversity issues such as their proximity to forest reserves, hill sides, riparian zones and high conservation value areas.

1.4 Summary of plantings and cycle The 3 estates had been developed beginning from 1986 and are currently in the 2nd cycle of planting for the oil palms. The age profile is as shown in Table 3. 2 Table 3: Age Profile of Planted Oil Palm as at Oct 2014 Estate Name Year of Planting Cycle of Mature OP (ha) Immature OP (ha) Planting – Above 3 years – 3 years & below

FELDA nd 2011 2 479.55 1,076.02 Mengkawang estate

FELDA Tersat nd 2010, 2011 2 456.12 308.17 estate FELDA/FTP Jerangau Barat 2002, 2007, 2010 2nd 1,444.74 574.54 estate Total 2,376.41 1,958.73

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1.5 Summary of Conservation and HCV Areas The summary of Conservation and HCV Areas as identified in KKS Jerangau Barat Grouping during this Main Assessment in 2014 is as shown in Table 4 below:

Table 4: Conservation and HCV Areas

# Statement of Land Use (Ha) Jan – Dec 2014 (Main Assessment) Hectarage – Ha 1 Planted Area (ha) – Oil Palm - Mature 2,376.41 - Immature 1,958.73 2 Conservation Area (ha) - comprising buffer zones along small streams, hilly areas, swampy and 512.32 unplantable areas 3 HCV Area (ha)  comprising buffer zones near forest reserves, water catchments, burial & 0 religious sites

1.6 Other certifications held and Use of RSPO Trademarks The POM is certified to ISO 9001:2008, ISO 14001:2004 and OHSAS 18001:2007. The RSPO’s trademarks and logo are not being used by the PMU audited. Instructions for use were provided and acknowledged by the PMU through a signed Memorandum of commitment agreeing to adhere to the latest “RSPO Rules on Communications & Claims”.

1.7 Organizational information / Contact Person

Name: Norazam Abdul Hameed Designation: General Manager, Sustainability and Quality Management (PSQM) Department Full Address: Plantation Sustainability and Quality Management (PSQM) Department, Felda Global Ventures Plantations (Malaysia) Sdn Bhd (FGVPM), Menara Felda Platinum Park, Level 20 No 11 Persiaran KLCC, 50088 Kuala Lumpur, Malaysia. Tel: +603 2859 1995 Fax: +603 2859 0016 Email: [email protected]

Name: Anthonius Sani Designation: Sustainability Manager, Plantation Sustainability and Quality Management (PSQM) Department Full Address: Plantation Sustainability and Quality Management (PSQM) Department, Felda Global Ventures Plantations (Malaysia) Sdn Bhd (FGVPM), Menara Felda Platinum Park, Level 20 No 11 Persiaran KLCC, 50088 Kuala Lumpur, Malaysia. Tel: +603 2859 1623 Fax: +603 2859 0016 Email: [email protected]

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1.8 Tonnages Verified for Certification

The breakdown of all the suppliers and their tonnages of FFB supplied to the POM at KKS Jerangau Barat Grouping based on the reporting period for Jan – Dec 2014 are as follows:

Table 5: FFB Supply Base Tonnages: Jan - Oct 2014 (Actual) and Nov - Dec 2014 (Projected)

# Estate /Supplier FFB Processed (MT) Main Receiving Mill PMU Estates: 1. FELDA Mengkawang estate – FELDA Smallholders 982.41 KKS Jerangau Barat 2. FELDA Tersat estate – FELDA Smallholders 3,826.47 KKS Jerangau Barat FELDA/FTP Jerangau Barat estate 3. KKS Jerangau Barat – FTP Smallholders 2,665.73 FELDA/FTP Jerangau Barat estate 4. KKS Jerangau Barat – FELDA Smallholders 16,196.92 Sub-total from PMU estates: 23,671.53

Other FELDA PMUs Estates (non-certified): 5. FELDA Jerangau 656.48 - 6. FELDA Bukit Bading 232.79 - 7. P.P. FELDA Bukit Bading 480.23 - 8. FTP Jerangau 101.96 - 9. FTP Bukit Bading 94.47 - 10. FGVPM Rantau Panjang 230.28 - 11. FGVPM Chador 01 16,092.02 -

Sub-total from Other Felda PMU estates: 17,888.23 - Outside Crop Producers (OCP) (noncertified): 12. Sern Lee Enterprise Sdn Bhd 21,531.27 13. Tai Ichi Enterprise Sdn Bhd 16,548.96 14. Ekstrapalma 13,206.51 15. Kim Ma Oil Palm (Transport) Sdn Bhd 23,550.85 16. Others 7,807.25 Sub-total from OCP: 82,644.84 Grand total 124,204.60

Note: Replanting took place in year 2010 to 2011 for FELDA Mengkawang estate and FELDA Tersat estate. Replanting in Jerangau Barat estate took place from year 2002 to 2010. Therefore, the FFB production from these 3 estates is only minimal for year 2014. FFB production will start increasing from year 2015 as more of the oil palms become matured in the replanted areas.

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Total annual volumes / tonnages of FFB supplied from the supply base to KKS Jerangau Barat Grouping POM during the previous period, current Main Assessment period and projected period are as follows:

Table 6: Annual Tonnages of FFB FFB Processed in FFB Processed in FFB Processed for Estate / Supplier Jan – Dec 2013 Jan – Dec 2014 Jan – Dec 2015 - Actual - Actual + Projected - Projected MT % MT % MT % Certifiable FFB from Jerangau 14,313.34 8.65 23,671.53 19.06 44,002.62 25.82 Barat PMU estates Non-certifiable FFB from other PGVPM/FELDA PMUs 24,810.90 15.00 17,888.23 14.40 24,626.06 14.45 estates Non-certifiable FFB from OCP 126,328.91 76.35 82,644.84 66.54 101,771.32 59.72 Total 165,453.15 100.00 124,204.60 100.00 170,400.00 100.00 SCCS Model for POM MB MB MB

The annual certifiable tonnages of CPO and PK production by KKS Jerangau Barat Grouping from the supply base / suppliers as assessed and verified during the current Main Assessment (based on Jan - Dec 2014 data) are detailed as follows:

Table 7: Annual Certifiable Tonnages of CPO and PK

Jan – Dec 2013 Jan – Dec 2014 Jan – Dec 2015 POM - Actual - Actual + Projected - Projected Total Certifiable FFB 14,313.34 23,671.53 44,002.62 Processed (MT)

Total Certifiable CPO % OER: % OER: % OER: 2,891 4,954 9,197 Production (MT) 20.20 20.93 20.90 Total Certifiable PK % KER: % KER: % KER: 777 1,281 2,398 Production (MT) 5.43 5.41 5.45

Note: Currently, the POM has established and maintained procedures for the book keeping and monitoring requirements for the CPO at the mill and was verified to be adopting the ‘Mass Balance – MB’ model in accordance with the RSPO Supply Chain Certification Standard (SCCS) requirements. Verified activities and checked items for the SCCS of the POM are reported in section 3.1.1.

1.9 Time Bound Plan for Other Plantation Management Units

FGVPM Group operates 70 palm oil mills and 416 oil palm estates and schemes throughout Malaysia. The organization is a member of RSPO since 2004 and has been taking an active role in the RSPO certification.

Currently, a significant number of its Certification Units is undergoing the RSPO certifying process in accordance with its time bound plan to achieve RSPO certification for all its plantation certification units by 2016.

Based on the due diligence conducted on FGVPM there were no significant land conflicts, no replacement of primary forest or any area containing HCVs since Nov 2005, no labour disputes that are not being resolved through an agreed process and no evidence of non-compliance with law in any of the non-certified holdings.

FGVPM Group had declared that there was no new planting and new acquisition of plantation lands and the progress of the said activities are ongoing. These have been reviewed and updated in the Time Bound Plan as submitted by FGVPM.

Details of the status of the Time Bound Plan as submitted by FGVPM are referred to in Appendix E.

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1.10 Abbreviations Used

BOMBA Fire Services Department ISCC International Sustainability & Carbon Certification CB Certification Body IUCN International Union for Conservation of Nature CHRA Chemical Health & Risk Assessment JAS Jabatan Alam Sekitar CPO Crude Palm Oil JKKP Jabatan Kesihatan dan Keselamatan Pekerja CSDS Chemical Safety Data Sheets KER Kernel Extraction Rate CSPO Certified Sustainable Palm Oil LTA Lost Time Accidents CSPK Certified Sustainable Palm Kernel MPOB Malaysia Palm Oil Board DOE Department of Environment MSDS Material Safety Data Sheets DOSH Department of Occupational Safety and MTCS Malaysia Timber Certification Scheme Health EFB Empty Fruit Bunch NCR Non-conformance Report EHS Environmental Health & Safety NGO Non-Government Organization EIA Environmental Impact Assessment OCP Outside Crop Producers ETP Effluent Treatment Plant OER Oil Extraction Rate FASSB Felda Agricultural Service Sdn Bhd OHS Occupational Health & Safety FELDA Federal Land Development Authority PEFC Programme for the Endorsement of Forest Certification FFB Fresh Fruit Bunch PK Palm Kernel FGVPM Felda Global Ventures Plantations PMU Plantation Management Unit (Malaysia) Sdn Bhd FTP Felda Technoplant Sdn Bhd POM Palm Oil Mill GAP Good Agriculture Practice POME Palm Oil Mill Effluent HCV High Conservation Values PPE Personal Protective Equipment Intertek Intertek Certification International Sdn Bhd SCCS Supply Chain Certification Standard IPM Integrated Pest Management SOP Standard Operating Procedure

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2.0 ASSESSMENT PROCESS

2.1 Assessment Methodology, Plan and Site Visits

Since 17 Jul 2014, Intertek has initiated public communications and notifications and invited the relevant stakeholders before the assessment to provide feedback and comments on their concern (if any) on KKS Jerangau Barat Grouping regarding the environmental, biodiversity, community development and other relevant issues.

From 03-06 Nov 2014, the Assessment team of Intertek conducted the Main Assessment in which two estates (viz., FELDA Mengkawang estate and FELDA/FTP Jerangau Barat Selatan estate) of KKS Jerangau Barat Grouping as well as the palm oil mill were assessed for compliance against the RSPO requirements. The number of estates sampled was based on a minimum sample of 0.8√y where y is the number of estates and the selection was made based on their potential risks on social, environmental and biodiversity issues such as their proximity to forest reserves, hill sides, riparian zones and high conservation value areas.

Since the PMU consists of FTP Smallholders and FELDA Smallholders, a second level of sampling of smallholders was carried out for assessment as shown in Table 8 below in addition to the first level of sampling for the estates. The assessment carried out included a combination of field inspections and interviews of the sampled FTP and FELDA Smallholders. Table 8 Sampling Plan of Estates and Smallholders

1st Level of sampling FELDA Mengkawang FELDA Tersat estate FELDA/FTP of estates estate Jerangau Barat estate Sample size √ - √ 2nd Level of sampling No. of FTPS No. of FS No. of FTPS No. of FS No. of FTPS No. of FS of estates 0 329 0 185 219 148 Sample size 0 15 0 11 12 10 Legend: FTPS = FTP Smallholders (managed by FTP) FS = FELDA Smallholders (smallholders managing their own plots within the FELDA Settlers’ Scheme) Note: Total no. of Smallholders in the PMU is 881.

During the on-site assessment, relevant documents and records, including Standard Operating Procedures (SOP), management plans, hectarage development, FFB, CPO and PK production, oil palm age profile, operational controls and measures, operational data and records, training records, etc. were reviewed and verified for compliance. The Assessment team using the process approach auditing technique covered the palm oil mill and estate operations, agricultural practices, pest management, pesticide and fertilizer application, occupational health and safety, social accountability, environment and other requirements. Stakeholders’ interviews were conducted during the assessment and feedback obtained as part of information and evidence gathering. (See section 2.5 Process of stakeholder consultation).

KKS Jerangau Barat Grouping POM was also assessed against the requirements for the Mass Balance Module as specified in RSPO Supply Chain Certification Standard for CPO mill. This part of the assessment covered the verification of implementation of documented procedures and availability of records to demonstrate compliance against all the elements for Segregation requirements. These include documented procedure, purchasing and goods in, record keeping, sales and goods out, processing, monitoring and traceability of the CSPO and CSPK quantities, training for staff and claims.

After completion of the on-site field assessment, Intertek also performed the evaluation of conformity against the RSPO Certification System requirements for CB. The assessment report, findings and associated documents were evaluated through an independent review by the Intertek Internal Technical Reviewer/Panel which was subsequently validated by an External Peer Reviewer prior to the certification decision and approval of this report/certification by Intertek.

The details of the Assessment Plan (actual on-site) are provided in Appendix B.

2.2 Date of next scheduled visit

The next scheduled visit will be the Surveillance Assessment which will be carried out within a 12-month period after the certification decision and approval of this report/certification.

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2.3 Qualifications of the Lead Assessor and Assessment Team

Competency details of the Lead Assessor and Assessment Team are given in Appendix A.

2.4 Certification Body

Intertek Certification International Sdn Bhd [formerly known as Moody International Certification (Malaysia) Sdn Bhd] is part of the Intertek Group, which is a worldwide technical services organization dedicated to reducing clients' risks by providing technical inspection services, management system certification in quality, environmental, occupational safety & health and product certification, RSPO SCC, ISCC, Marine Sustainability Chain-of-Custody, MTCS and PEFC Chain-of Custody certification in applicable industry sectors including the agricultural and forestry sectors. Intertek operates globally providing clients with a wide-ranging technical inspection expertise and access to thousands of skilled specialists worldwide. Intertek Group’s certification business is ranked in the top 10 worldwide, and is available globally offering certification across a wide range of industries.

2.5 Process of stakeholder consultation

Stakeholder consultations began with notification of the upcoming assessment through the websites of RSPO, PGVPM and Intertek. E-mails, facsimiles and letters of the same were sent to applicable stakeholders including government agencies, NGOs and local communities. Telephone enquiries were made prior to the actual assessment and stakeholder’s response and feedback received were followed up accordingly.

During the assessment, stakeholders were interviewed and their feedbacks were recorded. Among the stakeholders consulted were workers, trade union leaders, women representatives; local community leaders, representatives of government departments / agencies and NGOs; external FFB suppliers, fertilizer suppliers and contractors.

Details on stakeholders’ feedback, PMU response and Intertek verification / comments are provided in section 3.3.

Among the list of key stakeholders consulted was the following:

Government Agencies (by emails) 1. Department of Lands And Mines 2. Department of Environment 3. Department of Forestry Peninsular Malaysia 4. Department of Immigration 5. Department of Irrigation & Drainage 6. Department of Labour 7. Department of Occupational Safety & Health 8. Department of Orang Asli Affairs 9. Department of Wildlife & National Parks

Government Agencies - State (by emails) 10. Department of Environment - Terengganu 11. Department of Forestry – Terengganu 12. Department of Immigration – Terengganu 13. Department of Irrigation & Drainage - Terengganu 14. Department of Labour – Terengganu 15. Department of Occupational Safety & Health – Terengganu 16. Department of Wildlife & National Parks – Terengganu 17. Land and Mines Office – Terengganu 18. Pertubuhan Keselamatan Sosial (SOCSO) – Terengganu

Statutory Bodies (by emails) 19. Malaysian Palm Oil Board (MPOB) 20. Malaysian Palm Oil Board (MPOB) - Eastern Region 21. Malaysia Palm Oil Association (MPOA) 22. Malaysia Palm Oil Association Kuala Lumpur (MPOA)

NGOs (by emails) 23. All Women’s Action Society (AWAM) 24. BCSDM - Business Council for Sustainable Development in Malaysia 25. Borneo Child Aid Society (Humana) 26. Borneo Resources Institute Malaysia (BRIMAS)

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27. Borneo Rhino Alliance (BORA) 28. Center for Orang Asli Concerns COAC 29. Centre for Environment; Technology and Development; Malaysia - CETDEM 30. Consumers Association Of Penang - CAP 31. EcoKnights 32. ENO Asia Environment 33. Environmental Management and Research Association of Malaysia (ENSEARCH) 34. Environmental Protection Society Malaysia (EPSM) 35. Friends of the Earth; Malaysia 36. Future in Our Hands Society; Malaysia 37. Global Environment Centre 38. Institute of Foresters; Malaysia (IRIM) 39. JUST - International Movement for a Just World 40. Malaysian CropLife & Public Health Association (MCPA) 41. Malaysian Environmental NGOs - MENGO 42. Malaysian National Animal Welfare Foundation - MNAWF 43. Malaysian Nature Society - Terengganu 44. Malaysian Plant Protection Society (MAPPS) 45. National Council of Welfare & Social Development Malaysia - NCWSDM 46. National Union of Plantation Workers (NUPW) 47. Partners of Community Organisations (PACOS) 48. Pesticide Action Network Asia and the Pacific (PAN AP) 49. Proforest - South East Asia Regional Office 50. Sabah Wetlands Conservation Society (SWCS) 51. SUARAM - Suara Rakyat Malaysia 52. SUHAKAM - National Human Rights Society - Persatuan Kebangsaan Hak Asasi Manusia 53. Sustainable Development Network Malaysia (SUSDEN) 54. Tenaganita Sdn Bhd 55. The Malaysian Forum of Environmental Journalist (MFEJ) 56. TRAFFIC - the wildlife trade monitoring network 57. TRAFFIC Southeast Asia - Wildlife trade & trafficking monitoring programme 58. Transparency International - Malaysian Chapter 59. Treat Every Environment Special Sdn Bhd. (TrEES) 60. UNION - AMESU 61. United Nations Development Programme - UNDP Malaysia 62. Wetlands International (Malaysia) 63. Wild Asia Sdn Bhd 64. World Wide Fund for Nature (WWF) Malaysia

Local community (On-site interviews) 65. Gender representatives 66. Workers representatives 67. Suppliers / Contractors 68. Village Heads

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3.0 ASSESSMENT FINDINGS

3.1 Summary of findings

Principle 1: Commitment to transparency Criterion 1.1 Growers and millers provide adequate information to relevant stakeholders on environmental, social and legal issues relevant to RSPO Criteria, in appropriate languages and forms to allow for effective participation in decision making. Indicators Findings and Objective Evidence Compliance 1.1.1 There shall be evidence that The PMU has established and implemented a documented Complied growers and millers provide procedure ML-1A/L2-PR3 (0) dated Mar 2012 for providing adequate information on adequate information on environmental, social and legal issues (environmental, social and/or relevant to RSPO Criteria to relevant stakeholders for effective legal) issues relevant to RSPO Criteria to relevant stakeholders participation in decision making. for effective participation in The procedure includes handling responses and requests from decision making. stakeholders. This was evident from records of visits, inspections and correspondence with stakeholders such as Major Compliance DOSH (JKKP), DOE (JAS), BOMBA, MPOB and Energy Commission (“Suruhanjaya Tenaga”). Date of public notification of the main assessment of the PMU was made on 17 Jul 2014. No request for information concerning this assessment from stakeholders for this PMU. 1.1.2 Records of requests for The PMU maintained an updated list (ML-1A/L4-F31 (0)) of Complied information and responses shall internal stakeholders, external stakeholders, government be maintained. departments/agencies, consultants, contractors, suppliers, transporters. Major / Minor - TBF A Stakeholders’ Consultation with external stakeholders for the PMU was carried out on 05/07/2014. Survey questionnaire from this stakeholders’ consultation were properly filed and summary of positive and negative feedback compiled in the Stakeholders’ Booklet 2014. Questions were asked concerning what is RSPO and how to obtain RSPO certification. The POM and estates also conducted Stakeholders’ Consultation with internal stakeholders. Summary of the stakeholders’ feedback compiled from the completed survey questionnaire and action plans identified for implementation. The smallholders in the FELDA Settlers’ Scheme have agreements with FELDA. Up-to-date records of debts and repayments, charges and fees for smallholders. Copies of land title of smallholders with user rights verified to be in order in Mengkawang estate. Land titles have been issued or in progress of issuance to the smallholders in the other estates based on the Register of Holdings (ROH). Contract between Scheme Manager (FTP) and participants (settlers) as seen in application form for FTP scheme. Evidence of training in IPM and safe use of agrochemicals for smallholders. OCP applied to POM for approval to supply FFB. Contracts between foreign workers and FTP are available for the estates. There are no foreign workers in the POM. Following documents provided for smallholders:

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 Health and safety plan.  Plans and impact assessments relating to environmental and social impacts  Pollution prevention plans.  Details of complaints and grievances  Negotiation procedures.  Procedure for calculating prices, and for grading, FFB  Continuous improvement plan Meetings between FTP, FELDA and Smallholders held regularly. Meetings between POM and smallholders’ representatives on oil extraction rate, quality of FFB and value. 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. Indicators Findings and Objective Evidence Compliance 1.2.1 Publicly available The organization’s policies declared that upon request, the Complied documents shall include, but are following types of mandatory documents are available to the not necessarily limited to: public:

 land titles/user rights, Major Compliance  occupational health and safety plan,

• Land titles/user rights (Criterion  plans and impact assessments relating to environment and 2.2); social impacts,  pollution prevention plans,  details of complaints & grievances,  negotiation procedures  continuous improvement plan  Public summary of certification assessment report. These publicly available documents include key indicators of performance like waste management and disposal plans for the mill and estates. Also, Continual Improvement Action Plans include targets for waste reduction and pollution prevention. Copies of all land titles were available and have been maintained at the POM and Estates. HQ kept the original copies. FELDA and FTP have put in place the mechanism for the smallholders to comply with the following:  legal ownership of the land,  social and environmental requirements,  organizational and social activities,  documented management plans • Occupational health and safety Occupational Safety and Health Plan 2014 documented and Complied plans (Criterion 4.7); implemented. Policy and HIRADC documented for both mill and estates. OSHA Plan include the establishment and implementation of CHRA, medical surveillance, Fire Drill training, First Aid training, PPE training. POM certified to OSHA 18001. POM has conducted Emergency Preparedness (ERP). Safety Committee meetings held twice a year.

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• Plans and impact assessments Environmental aspect and impact assessment conducted for the Complied relating to environmental and POM and estates and its action plan documented and social impacts implemented. (Criteria 5.1, 6.1, 7.1 and 7.8); Social Impact Assessment carried out. Positive and negative impacts and action plan documented in the Stakeholders’ Booklet 2014. • HCV documentation (Criteria Procedure Guidelines ML-1A/L3-GPS (0) for identification of Complied 5.2 and 7.3); HCV. HCV Identification Survey conducted on the PMU by Jabatan PSQM of FGVPM on 25/10/2014. No significant HCV area found in the PMU. • Pollution prevention and Documented pollution prevention and reduction plans include Complied reduction plans (Criterion 5.6); measures for pollution control (smoke emission, POME / effluent discharge), pesticides reduction, schedule wastes (chemicals, used PPE, hydraulic oil) and domestic wastes disposal, reuse and recycling (paper, glass, scrap iron). • Details of complaints and The PMU has established and implemented a documented Complied grievances (Criterion 6.3); procedure ML-1A/L2-PR4 (0) dated Mar 2012 for complaints and grievances. As to date, the PMU did not receive any complaints from any external stakeholders. There is also Complaints Box provided in the mill and estates with a Complaints and Grievances Form for recording any complaints/grievances. A Complaint Book (“Buku Aduan”) is also maintained in the POM and estates. For POM, only one complaint entry in year 2014 concerning grading of FFB. For Mengkawang estate, in year 2014, there were 7 entries from settlers relating to money collected by settler’s son, yield, payment for oath taking, etc. For Jerangau Barat estate in year 2014, there were 4 entries relating to digging of trench at the back of neighbor house and problem of cow sheds in village area, Records of meetings include the resolution of the complaints. • Negotiation procedures The PMU has established a documented negotiation procedure Complied (Criterion 6.4); ML-1A/L2-PR1 (0) dated Mar 2012. No case of land claims in the PMU.

• Continual improvement plans The PMU has identified, documented and implemented Complied (Criterion 8.1); Continuous Improvement Plans over the period 2014 to 2016 (ML-1A/L2-PR11 (0), dated Mar 2012).

• Public summary of certification Public summary of certification assessment reports are available Complied assessment report; from the company upon request.

• Human Rights Policy (Criterion The Human Rights Policy (“Polisi Hak Asasi Manusia”) has been Complied 6.13). documented and signed by the President and CEO of Felda Global Ventures on 01/06/2014 and communicated to all levels of the workforce and operations. Copies of the policy found to be displayed at prominent locations in the POM and estates.

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Criterion 1.3 Growers and millers commit to ethical conduct in all business operations and transactions. Indicators Findings and Objective Evidence Compliance 1.3.1 There shall be a written The Policy of commitment to a Code of Ethical Conduct and Complied policy committing to a code of Integrity has been documented and signed by the President and ethical conduct and integrity in all CEO of Felda Global Ventures on 01/06/2014 and operations and transactions, communicated to all levels of the workforce and operations. which shall be documented and communicated to all levels of Copies of the policy found to be displayed at prominent locations the workforce and operations. in the POM and estates. There is a booklet containing details of Service Terms and Major / Minor (TBF) Conditions and Code of Ethical Conduct and Integrity for Employees of Felda Group of Companies.

Principle 2: Compliance with applicable laws and regulations Criterion 2.1 There is compliance with all applicable local, national and ratified international laws and regulations. Indicators Findings and Objective Evidence Compliance 2.1.1 Evidence of compliance A Register of Legal and Other Requirements covering the Complied with relevant legal requirements applicable local and international laws and regulations has been shall be available. compiled for the mill and estates. A Compliance Checklist is used by the mill and estates for verification of compliance with legal Major Compliance requirements. The relevant laws and legislations identified and listed cover safety and health, environment, pollution management, chemical handling, usage & storage, schedule waste management, labour laws, Unions, EPF, SOCSO, Housing and Amenities. There were no cases of any violation or actions imposed by relevant authorities. Statutory returns to relevant authorities found to be in compliance. Based on the site observations, interviews and records checking at the POM and estates, there were evidences of compliance with the relevant laws, regulations, local and international laws. Licenses and permits (License for Foreign Workers Employment, Workers Wages Deduction Permit, License for Controlled Items – Diesel and Fertilizer, MPOB license, DOSH Certificate, DOE license, BOMBA Fire Certificate, Energy Commission License, etc.) were monitored for their expiry dates and found to be renewed and valid. Environmental Quality Act 1974 and Environmental Quality (Scheduled Wastes) Regulations 2005: Scheduled wastes such as hydraulic and used motor oils, rags, empty chemical and lubricants containers collected at six monthly intervals by DOE licensed contractor. Weight and Measures Act 1972, regulations 16, 28A, 45): Weighbridges were duly calibrated. Factory and Machinery Act 1967, Regulations 1970: Steam engineers (Grade 1 and 2), boilermen and electricians were noted to be with valid certificates from relevant authorities (DOSH and Energy Commission). Valid certificates of fitness for boilers, sterilizers, air receivers, thermal deaerator, steam separator, vacuum oil dryer, etc. issued by DOSH. Valid license for diesel generators issued by Energy Commission

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(“Suruhanjaya Tenaga”). Valid licenses for authorized gas tester (ACT), authorized entrant and standby by person for confined space activities in POM. Occupational Health and Safety Act 1994 – safety and health meetings to be conducted at quarterly intervals. Noise Monitoring Report is available. The POM is certified by SIRIM for its Quality, Environment and Safety & Health Management Systems. Legal documents (work permits, passports) of foreign workers (Indonesian, Bangladesh) in the estates. Insurance for foreign workers in estates under AXA Insurance (for Mengkawang estate) and Allianza (for Jerangau Barat estate). There are no foreign workers in POM. FELDA and FTP have informed the smallholders concerning the relevant legal requirements and monitored their activities for continuing compliance with the relevant legal requirements. 2.1.2 A documented system, The PMU has established and implemented a documented Complied which includes written procedure ML-1A/L2-PR2 (0) dated Mar 2012 for identifying, information on legal determining, reviewing and updating applicable legal and other requirements, shall be requirements. maintained. It included the listing of laws and regulations that were being monitored for changes and reference. Minor Compliance 2.1.3 A mechanism for ensuring The procedure includes a monitoring mechanism of a regular Complied compliance shall be check and evaluation for compliance against the applicable laws implemented. in the Legal Register. POM, Mengkawang estate and Jerangau Barat estate have Minor Compliance carried out the evaluation for ensuring compliance by completion of the Compliance Checklist on 01/10/2014, 25/09/2014 and 20/10/2014 respectively. 2.1.4 A system for tracking any Tracking of changes in the relevant laws are communicated and Complied changes in the law shall be received from HQ. implemented. Monitoring of changes to the applicable laws and regulations carried out through periodical review in accordance with the Minor Compliance documented procedure ML-1A/L2-PR2 (0) dated Mar 2012. Latest update of laws and regulations in the Legal Register carried out on 31/07/2014. 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. Indicators Findings and Objective Evidence Compliance 2.2.1 Documents showing legal Copies of the land titles of the mill and estates were maintained Complied ownership or lease, history of and found to be in proper order. land tenure and the actual legal use of the land shall be POM with land title no. 4226 Lot 6594 of 60 years’ lease (expiry available. on 01/01/2061). Land use is for industrial. Land titles of smallholders with 99 years lease expiry on Major Compliance 09/04/2110 issued by the Terengganu State Dungun District Lan Office. Records are available to show that the estates land lease comply with legal requirements and does not infringe on any legal rights that require free, prior and informed consent (FPIC). The original copies are maintained by the Corporate Head office. The legal use of the estates land confirmed to be for cultivation of oil palm and agricultural use.

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FELDA and FTP have provided evidence of legal ownership of the land of the smallholders. 2.2.2 Legal boundaries shall be It was verified that there has been no change to the stated land Complied clearly demarcated and visibly titles and designated use for cultivation of oil palm and agricultural maintained. use. Legal boundary markers were sighted and maintained along the Major Compliance perimeters of estate lands which were mapped with a 1-meter differential Global Positioning System (GPS). Land survey maps with boundaries of each settler marked on the map. Locations of boundary stones / markers identified. Locations of several boundary stones and pole markers verified to be within the boundary parameters of the estates.

2.2.3 Where there are or have There has been no dispute on the land rights in the PMU. Complied been disputes, additional proof of legal acquisition of title and As such, the process of fair compensation and FPIC is currently evidence that fair compensation not applied. has been made to previous owners and occupants shall be available, and that these have been accepted with free, prior and informed consent (FPIC).

Major / Minor (TBF) 2.2.4 There shall be an absence There is a documented procedure ML-1A/L2-PR 12 (0) dated Mar Complied of significant land conflict, 2012 for handling and response to land disputes and customary unless requirements for rights. acceptable conflict resolution processes (see Criteria 6.3 and Procedure ML-1A/L2-PR 13 (0) dated Mar 2012 documented for 6.4) are implemented and calculation and distribution of compensation. accepted by the parties Procedure ML-1A/L2-PR 1 (0) dated Mar 2012 documented for involved. negotiation.

Major / Minor (TBF) 2.2.5 For any conflict or dispute No land disputes in the PMU. As such the process of Complied over the land, the extent of the participatory mapping is not applicable for verification of disputed area shall be mapped implementation. out in a participatory way with involvement of affected parties (including neighbouring communities where applicable).

Major / Minor (TBF) 2.2.6 To avoid escalation of No evidence that the palm oil operations have instigated violence Complied conflict, there shall be no in maintaining peace and order in their current and planned evidence that palm oil operations. operations have instigated violence in maintaining peace and order in their current and planned operations.

Major / Minor (TBF) Criterion 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. Indicators Findings and Objective Evidence Compliance 2.3.1 Maps of an appropriate Land title for POM land and smallholders verified to be in order. Complied

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Report No.: R9303/14-1 Felda Global Ventures Plantations (Malaysia) Sdn Bhd Page 19 of 65 KKS Jerangau Barat Grouping - Main Assessment scale showing the extent of The lands are not encumbered by any customary lands or user recognised legal, customary or rights and therefore the process of participatory mapping is not user rights (Criteria 2.2, 7.5 and required. 7.6) shall be developed through participatory mapping involving affected parties (including neighbouring communities where applicable, and relevant authorities). Major Compliance 2.3.2 Copies of negotiated The smallholders’ lands are for oil palm cultivation or agriculture Complied agreements detailing the use. Records are available to show that the land lease comply process of free, prior and with legal requirements and does not infringe on any legal rights informed consent (FPIC) that require free, prior and informed consent (FPIC). (Criteria 2.2, 7.5 and 7.6) shall be available and shall include: a) Evidence 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) 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 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. Minor Compliance 2.3.3 All relevant information No cases of land claims in this PMU. Not applicable shall be available in appropriate As such this process is not applicable for verification. forms and languages, including assessments of impacts, proposed benefit sharing, and legal arrangements.

Major / Minor (TBF) 2.3.4 Evidence shall be This process is not applicable for verification. Not applicable available to show that communities are represented through institutions or representatives of their own choosing, including legal counsel. Major / Minor (TBF)

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Principle 3: Commitment to long-term Economic & Financial Viability Criterion 3.1 There is an implemented management plan that aims to achieve long-term economic and financial viability. Indicators Findings and Objective Evidence Compliance 3.1.1 A business or Palm Oil Mill has documented a 3 years (2014 to 2016) Complied management plan (minimum Management Plan with details of budget and costs of operation three years) shall be that include the following: documented that includes, where appropriate, a business (1) Mill extraction rates = OER and KER trends; case for scheme smallholders. (2) Cost of Production = Cost/MT CPO trends; (3) Forecast prices; Major Compliance (4) Financial indicators = Cost of labour & services, cost of supplies and equipment, depreciation costs, salary costs, management costs, cost of materials, etc.). The estates have documented a 3 years (2014 to 2016) Management Plan with details of budget and costs of operation that include the following: (1) Replanting program (planting materials Yangambi cloned seedling); (2) Crop projection = FFB yield/ha trends; (3) Cost of Production = Cost/MT FFB trends; (4) Forecast prices; (5) Financial indicators = Cost of labour, cost of facilities, cost of materials, etc.). Crop and operation budget cover weeding, manuring, harvesting, collection and transporting, pruning, drains and roads. The budgets also include provisions for sustainability efforts and improvement programmes (environmental aspects on road maintenance, domestic waste collection, maintenance of buffer zones). Mill and Estate Managers monitor the operational performance against Key Performance Indications and targets (costs, FFB yields, quality, productivity, pesticides usage, fertilizers usage, etc). There is evidence of monitoring of costs against budget to achieve specified targets. Performances are discussed in the monthly meetings held at the PMU and issues and actions needed are recorded for follow up in the next monthly meeting. The records of these meetings were available and verified during the audit. Monthly, quarterly, half-yearly and yearly reports are submitted to the GM of Zone/Wilayah. FTP and FELDA have a documented 3 years management plan for the smallholders. nd 3.1.2 An annual replanting Replanting (2 cycle) took place in year 2010 to 2011 for FELDA Complied programme projected for a Mengkawang estate and FELDA Tersat estate. minimum of five years (but Replanting (2nd cycle) in Jerangau Barat estate took place from longer where necessary to year 2002 to 2010. reflect the management of All areas in the three estates have been replanted. fragile soils, see Criterion 4.3), with yearly review, shall be available.

Minor Compliance

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Principle 4: Use of appropriate best practices by growers and millers Criteria 4.1 Operating procedures are appropriately documented, consistently implemented and monitored. Indicators Findings and Objective Evidence Compliance 4.1.1 Standard Operating POM has the following SOPs: Complied. Procedures (SOPs) for estates 1. Palm Oil Mill Operation Manual (08/04/2010 and and mills shall be documented. amendments) covering every station from the security gate for reception of FFB until the delivery of processed oil and POME Major Compliance management. 2. Laboratory Operation Manual (28/04/2011 and amendments). 3. Quality, Environmental and Occupational Health & Safety Manual and Procedures of Palm Oil Mill (24/02/210 and amendments). The SOP for pollution prevention includes measuring and monitoring mill effluents and waste disposal / recycling. 4. Procedure for Safe Work and Management of Safety and Health for Workers (14/07/2010 and amendments). The SOP for safe working practices in the POM includes hazards identification, risk assessment and control measures. The hazards include noise, chemicals, heat, fire, fuel spillage, working at heights, working in enclosed space, hot work, lightning, electrocution, machinery, etc. Control measures include the use of PPE, fire drill training, first aid training, etc. and “permit to work system” for the mill. Records of ‘Permit to Work’ including gas entry and stand-by permits issued by NIOSH to the competent personnel at the POM was verified to be maintained and found to be in order. 5. Supply Chain Procedure Doc No. FGVPM-RSPO SCCS Issue 1.0 Rev 2.0 (Effective 1 Dec 2012) SOP for Mill RSPO Supply Chain Certification System using the Mass Balance (MB) module.

The estates have the following SOPs: 1. Sustainable Oil Palm Estate Operation Manual issued by FELDA Agricultural Services Sdn Bhd (FASSB) on 01/06/2012. The manual describes operational procedure of nursery practices, land preparation, planting practices, ground cover maintenance, roads, immature stage, harvesting, collection of bunches, manuring, pesticide application, pests & diseases control. The SOP for pesticides specifies safe working practices and application of pesticides. It includes annual medical surveillance for pesticides operators. 2. SOP for riparian zone management with specified buffer zones.

Relevant Key Performance Indicators (KPIs) specified for quality, environment, safety and cost control. 4.1.2 A mechanism to check There is a mechanism to check the implementation of the SOPs. Complied. consistent implementation of procedures shall be in place. Records had been kept by the staff concerned for each operation to monitor the procedure and progress of work and these records Minor Compliance would be checked by the Assistant Manager and the Manager regularly. These records had been verified to indicate satisfactory implementation during the visit. 4.1.3 Records of monitoring and Records of monitoring and actions taken had been maintained for any actions taken shall be maintained and available, as more than 12 months for the mill and estates. Overall, these records verified to be satisfactory. appropriate. Minor NC # However, on Jerangau Barat and Mengkawang Estates, the Minor Compliance

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daily record on chemical spraying did not show the type of CFK-01 chemicals being used each day. 4.1.4 The mill shall record the The POM maintained records on the origins of all third-party Complied. origins of all third-party sourced Fresh Fruit Bunches (FFB). sourced Fresh Fruit Bunches (FFB), and it had been verified to be satisfactory. Major Compliance Criteria 4.2 Practices maintain soil fertility at, or where possible improve soil fertility to, a level that ensures optimal and sustained yield. Indicators Findings and Objective Evidence Compliance 4.2.1 There shall be evidence GAP for minimization of soil erosion and maintenance of soil Complied. that good agriculture practices, as contained in Standard fertility is maintained via the frond stacking and fertilizer Operating Procedures (SOPs), application as per the recommendation provided by the are followed to manage soil Agronomist from Felda Agricultural Advisory Services Sdn. Bhd. fertility to a level that ensures (FASSB). optimal and sustained yield, where possible. These had been verified through the records for fertilizer application and observation during field visit. Minor Compliance 4.2.2 Records of fertiliser inputs Records of fertilizer application for FTP Smallholders verified to Complied. shall be maintained. be in order. Minor Compliance 4.2.3 There shall be evidence of Leaf and soil sampling and analysis had been carried out Complied. periodic tissue and soil sampling to monitor changes in nutrient annually to determine the nutrient levels. status. Fertilizer recommendations by the Agronomist for identified estate blocks to sustain the long term soil fertility and nutrient Minor Compliance efficiency. Records of the sampling and analysis had been verified to be satisfactory. 4.2.4 A nutrient recycling There is no POME application in the estates for this PMU. strategy shall be in place, and may include use of Empty Fruit 50% of the EFB had been incinerated to obtain ash as source of Bunches (EFB), Palm Oil Mill Potash fertilizer for application in the field. Effluent (POME), and palm EFB mulching had been carried out in mature area along the residues after replanting. inter-row, and around the circle in the immature palms. Records

Minor Compliance verified to be satisfactory. However, on Jerangau Barat Estate, F 3, EFB had been unloaded in heaps in the inter-rows and left there for more Minor NC # than 3 months. This is contrary to the SOP which states that CFK-02 EFB should be spread in one layer along the inter-rows. Criteria 4.3 Practices minimise and control erosion and degradation of soils. Indicators Findings and Objective Evidence Compliance 4.3.1 Maps of any Based on the soil maps, there was no fragile/marginal soil on the Complied. fragile/marginal soils shall be available. estates. Changes in soil nutrient status monitored on an annual basis Major Compliance through foliar and soil sampling and analysis. The Agronomist determines the annual fertilizer recommendations and there is evidence of implementation. 4.3.2 A management strategy Planting terraces constructed on land with slope more than 6o. shall be in place for plantings on slopes between 9 and 25 Leguminous cover also planted. Records and maps on terraces constructed had been verified on the estates. degrees unless specified otherwise by the company’s The PMU has a SOP (Best Management Practices) for erosion

SOP. control during replanting or any activities involving earth disturbance. Steps taken for erosion control are soil stabilization, Minor Compliance run-off control and sediment trapping to mitigate the disturbed

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earth entering waterways. There was no soil erosion noted during the visit. Minor NC # However, on Jerangau Barat Estate, the planting terraces were without back incline and stop bunds along the terraces. CFK-03

4.3.3 A road maintenance The main roads leading to the estates are maintained by the programme shall be in place. Public Works Department (Government Department). The

estates roads are in good overall condition. Minor Compliance Road maintenance programme verified to be established and implemented. On Mengkawang Estate, in F8 the concrete bridge crossing Obs # Sg Peneh only had a ridge of about 6 inches high on the CFK-01 sides, but without railings. An observation had been issued. 4.3.4 Subsidence of peat soils Based on the estate soil maps, there was no peat soil on the Complied. shall be minimised and monitored. A documented water estates as confirmed by auditor’s on-site assessment and ground cover management programme shall be in place.

Major Compliance 4.3.5 Drainability assessments Based on the estate soil maps, there was no peat soil on the Not Applicable where necessary will be conducted prior to replanting on estates as confirmed by auditor’s on-site assessment. peat to determine the long-term viability of the necessary drainage for oil palm growing.

Minor Compliance 4.3.6 A management strategy Based on the estate soil maps and visit to the estates, there were Complied. shall be in place for other fragile and problem soils (e.g. podzols no other fragile and problematic soils on these estates. and acid sulphate soils). There are records and monitoring of the areas where EFB was applied. Minor Compliance Criteria 4.4 Practices maintain the quality and availability of surface and ground water. Indicators Findings and Objective Evidence Compliance 4.4.1 An implemented water Documented water management plan verified to be in place for Complied. management plan shall be in place. the palm oil mill and estates. The plan includes steps such as soil stabilization, run-off control and sediment trapping to mitigate Minor Compliance the disturbed earth entering waterways. Water samples were taken at monthly interval at the final discharge point of the palm oil mill effluent pond, and at six- monthly interval for upstream and downstream of waterways. Tests conducted for pH, BOD, COD, Total Solids, Suspended Solids, Oil & Grease, Ammoniacal Nitrogen and Total Nitrogen. Analysis results meet the DOE requirements. The water supply for domestic use to staff, smallholders and workers’ housing is piped water from the water treatment plant operated by the water utility company. It is a requirement for the water utility company to ensure that tests are carried out on parameters to meet the Ministry of Health Specification for Drinking Water Quality. Rainfall data found to be monitored as part of the water management plan. 4.4.2 Protection of water There was no construction of bunds/ weirs/dams across the main courses and wetlands, including maintaining and restoring rivers or waterways passing through the estates. appropriate riparian and other 1. On Jerangau Barat, F 801 and F 802, boundary buffer zones (refer to national markings for buffer zone along Sg. Jemeluk were best practice and national only about 5 metres on either side of the river Major NC #

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Report No.: R9303/14-1 Felda Global Ventures Plantations (Malaysia) Sdn Bhd Page 24 of 65 KKS Jerangau Barat Grouping - Main Assessment guidelines) shall be whereas the width of the river was about 10 metres. CFK-01 demonstrated. 2. On Mengkawang Estate, F 8, buffer zone had been identified but there was no demarcation of Major Compliance boundaries. There was also evidence of herbicide spraying on tall grasses within the buffer zone.

4.4.3 Appropriate treatment of The water at the final discharge point of the palm oil mill effluent Complied. mill effluent to required levels and regular monitoring of pond was analyzed at monthly intervals for pH, BOD, COD, Total discharge quality, shall be in Solids, Suspended Solids, oil & grease, Ammoniacal Nitrogen compliance with national and Total Nitrogen.. Analysis results meet the DOE regulations (Criteria 2.1 and requirements. BOD levels had been in the range of 43 ppm in 5.6). July and 83 ppm in Mar 2013 with an average of 60 ppm for the year 2013. Minor Compliance The upper limit specified by DOE Terengganu is < 100 ppm. Stack emission monitoring by CEMS – Refer to 5.6.3

4.4.4 Mill water use per tonne of Water usage in the mill averaged at 1.0 m3/tonne FFB. Complied. Fresh Fruit Bunches (FFB) (see Criterion 5.6) shall be monitored. The level of water usage was within the industry norm.

Minor Compliance Criteria 4.5 Pests, diseases, weeds and invasive introduced species are effectively managed using appropriate Integrated Pest Management techniques. Indicators Findings and Objective Evidence Compliance 4.5.1 Implementation of IPM Plan includes the planting of beneficial plants and control of Complied. Integrated Pest Management (IPM) plans shall be monitored. damage by rodents. FASSB Agronomist Report dated 01/07/2013 recommended 1 ha with one point planted (one point measuring 10 Major Compliance m length x 3 m x 3 m). Programme for planting of beneficial plants such as Turnera subulata, Cassia cobanensis, and Antigonon leptopus, and records on areas planted had been verified together with the respective maps to be satisfactory On Jerangau Barat Estate, the beneficial plants had been planted along the government main road only. Mengkawang Estate had planted beneficial plants along the estate roads. Rat baiting and barn owl used for the control of rodents. Records of rat baiting and barn owl census are maintained No reported infestation by other pests (bagworms and rhinoceros beetle). 4.5.2 Training of those involved Training also conducted by FELDA and FTP for all smallholders. in IPM implementation shall be demonstrated. On Jerangau Barat and Mengkawang Estates, there was no Minor NC # record on the training of those involved in IPM CFK-04 Minor Compliance implementation.

Criteria 4.6 Pesticides are used in ways that do not endanger health or the environment. Indicators Findings and Objective Evidence Compliance 4.6.1 Justification of all Manual Lestari 1A – Doc. No. ML-1A/L3-GP 1 (0) dated Mar 2012 Complied. pesticides used shall be demonstrated. The use of Guidance Procedure for written justification in the use of selective products that are agrochemicals had been reviewed and found acceptable. specific to the target pest, weed The PMU has an Approved List of Pesticides registered under the or disease and which have Pesticide Board of Malaysia. The types of chemicals used are as minimal effect on non-target follows: species shall be used where

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Report No.: R9303/14-1 Felda Global Ventures Plantations (Malaysia) Sdn Bhd Page 25 of 65 KKS Jerangau Barat Grouping - Main Assessment available. (1) Glyphosate isopropyl amine - Ecomax (2) Metsulfuron methyl – Juru 20F Major Compliance (3) Paraquat dichloride - Paraquat (4) Triclopyr butoxy ethyl ester - Garlon (5) Glufosinate ammonium– Basta 15 4.6.2 Records of pesticides use Records of pesticides and their active ingredients used, LD50, area Complied. (including active ingredients used and their LD50, area treated, amount of a.i. applied per ha, and number of applications treated, amount of active had been maintained and kept for a minimum of 5 years. Verified ingredients applied per ha and that records of monitoring were satisfactorily. number of applications) shall be provided.

Major Compliance 4.6.3 Any use of pesticides shall It had been the policy of the estates to minimize the use of Complied. be minimised as part of a plan, pesticides in accordance with IPM plan. and in accordance with Integrated Pest Management The pesticide reduction program is monitored on usage per hectare (IPM) plans. There shall be no basis. Overall, there has been a decline in pesticide usage per prophylactic use of pesticides, hectare on a year to year basis. except in specific situations No prophylactic use of pesticides had been carried out at the identified in industry’s Best estates for the period concerned. Practice.

Major Compliance 4.6.4 Pesticides that are It is the policy of the group to reduce the use of paraquat gradually Complied. categorised as World Health and achieve zero usage by the end of 2015. Records on the usage Organisation Class 1A or 1B, or of paraquat by FTP Smallholders over 5 years were examined and it that are listed by the Stockholm was found that there has been a decline in the amount of paraquat or Rotterdam Conventions, and paraquat, are not used, except used. in specific situations identified in The use of Highly Toxic Pesticides (HTP) such as paraquat was industry’s Best Practice. The verified for compliance to Regulation 9 of the Pesticides Act 1974 use of such pesticides shall be and USECHH 2000 regulations as follows: minimised and eliminated as - Records of monitoring of exposure of pesticides operators to part of a plan, and shall only be paraquat were maintained indicating the number of hours of used in exceptional exposure in Form II for HTP. circumstances. Pesticides - Paraquat found to be kept in a secured store room under lock selected for use are those officially registered under the and key as required. Pesticides Act 1974 (Act 149) - First Aid Kits found to be issued to all Mandores and th and the relevant provision Supervisors as per requirements of the 4 Schedule of the (Section 53A); and in Regulations. Field visits confirmed the availability of the First accordance with USECHH Aid Kits during pesticides spraying in the fields. Regulations (2000). - During field visits, portable signage boards noted to be displayed at areas of spraying activity as per requirements of Minor Compliance Part II of the 5th Schedule of the Regulations. - A valid permit for storage of hazardous waste was sighted. 4.6.5 Pesticides shall only be All pesticide operators (including the contractor’s workers and Complied. handled, used or applied by smallholders) have attended training on the safe handling and persons who have completed application of pesticides in compliance with Regulation 22 of the the necessary training and shall Pesticides Act 1974. always be applied in accordance with the product label. The appropriate safety and application equipment (safety boots, Appropriate safety and safety helmets, rubber boots, cartridge masks, safety goggles, application equipment shall be gloves, overalls) had been provided and used by the pesticides provided and used. All operators. precautions attached to the products shall be properly All precautions attached to the pesticides (MSDS) had been observed, applied, and observed, applied and understood by the workers. Duration of work understood by workers (see with paraquat recorded in Form II. Criterion 4.7). The training programme and records had been verified to be satisfactory. The training include spraying technique, precautions Major Compliance and symptoms of symptoms of toxic reactions such as skin disorders, rashes, mouth and throat pain, breathing difficulties or nail problems.

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The PMU has adequate facilities for mixing of pesticides and cleaning up after work. There are suitable storage areas for PPE. 4.6.6 Storage of all pesticides Storage of pesticides found to be kept under lock and key and its Complied. shall be according to recognised use in accordance with the Occupational Safety and Health Laws best practices. All pesticide and Regulation 9 of the Pesticides Act 1974. containers shall be properly Emergency shower and eye wash are available near the pesticides disposed of and not used for other purposes (see Criterion store in case of accidents. 5.3). Pesticides shall be stored Material Safety Data Sheets (MSDS) are available in the store. The in accordance to the MSDS are in English and Bahasa Malaysia (understood by the Occupational Safety and workers). Health Act 1994 (Act 514) and Used chemical containers were disposed by DOE licensed waste Regulations and Orders, contractor. Pesticides Act 1974 (Act 149) Material Safety Data Sheets (MSDS) are available in the store. and Regulations. The MSDS are in English and Bahasa Malaysia (understood by the Major Compliance workers). First Aid Kit was issued to all Mandores and Supervisors as per requirements of the 4th Schedule of the Regulations. 4.6.7 Application of pesticides Pesticides had been applied using the Best Management Practices Complied. shall be by proven methods that that minimize risk and impacts. The pesticide operators found to minimise risk and impacts. understand the use of the right nozzle, spray drift, spray quality and run-off. Programme and training records had been verified to be Minor Compliance satisfactory. 4.6.8 Pesticides shall be applied It’s not the policy of the company to carry out aerial application of Complied. aerially only where there is documented justification. pesticides. This policy has been followed by the PMU. Communities shall be informed of impending aerial pesticide applications with all relevant information within reasonable time prior to application.

Major Compliance 4.6.9 Evidence of continual The Annual Training Plan includes training on pesticides handling. Complied. training to enhance knowledge All new pesticides operators were trained before being assigned to and skills of employees and work with pesticides. In addition, based upon training needs, the associated smallholders on existing pesticide operators (including the contractor’s workers and pesticide handling shall be demonstrated or made smallholders) attended continual training to enhance their available. (see Criterion 4.8). knowledge and skills on pesticides handling. Information and safety precautions on the pesticides displayed on Minor Compliance the notice board and next to the pesticides in the store. 4.6.10 Proper disposal of waste Estate vehicles were being serviced by outside contractor. Complied. material, according to procedures that are fully Scheduled waste of palm oil mill had been disposed of through a understood by workers and DOE licensed scheduled waste contractor. managers shall be Records of scheduled waste collection at the mill verified to be demonstrated (see Criterion satisfactory. 5.3). Minor Compliance Used chemical containers had been reused for chemical spraying in the field. For disposal as scheduled waste, empty pesticide containers are triple rinsed and pierced. 4.6.11 Specific annual medical On Jerangau Barat Estate and Mengkawang Estate, no medical surveillance for pesticide surveillance on CHRA for the operators handling chemicals operators, and documented had been carried out for 2013 and 2014. Arrangement had only Major NC # action to treat related health been made in October to carry out medical surveillance, CFK-02 conditions, shall be demonstrated. probably in Nov 2014. However, KKS Jerangau Barat had sent 15 workers for medical Major Compliance surveillance on 18 Oct 2014. Pesticides operators were interviewed during field visits and feedback received that they do not have any symptoms of toxic reactions such as skin disorders, rashes, mouth and throat pain, breathing difficulties or nail problems.

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4.6.12 No work with pesticides Verified from records, field inspections and interviews that no Complied. shall be undertaken by pregnant pregnant or breast-feeding woman had been offered work as or breast-feeding women. pesticide operator.

Major Compliance Criteria 4.7 An occupational health and safety plan is documented, effectively communicated and implemented. Indicators Findings and Objective Evidence Compliance The occupational health and OSH Policy found to be clearly displayed at POM and in the estates safety plan shall cover the office. Adequate posters, regulations, newsletters were prominently following: displayed on notice boards. Interviewed workers demonstrated awareness towards occupational safety and health. 4.7.1 An occupational health and safety policy shall be in Occupational Safety and Health (OSH) Plan in compliance with OSH place. An occupational health Act and Factory Machinery Act had been documented and and safety plan covering all implemented. activities shall be documented and implemented, and its The Safety & Health Officer is in charge of safety and health effectiveness monitored. planning, operation & coordination. Mill/Assistant Mill Managers and Estate Managers / Assistant Estate Managers are also directly Major Compliance involved. On KKS Jerangau Barat, training programme had been planned for the year 2014, but only about 25% of it had been carried out to-date. Major NC # On Jerangau Barat and Mengkawag estates, the training CFK-03 programme for the year had been planned but had yet to be implemented to-date. 4.7.2 All operations where Risk assessment carried out on operations where health and safety Complied. health and safety is an issue shall be risk assessed, and is an issue in order to determine the significant hazards. Significant procedures and actions shall be hazards determined and documented include noise exposure, documented and implemented pesticides/chemicals exposure, accident, fire. Procedures and to address the identified issues. actions implemented to mitigate the hazards. All precautions attached to There was an assessment of noise levels in the POM and the work products shall be properly areas with high noise levels identified are the boiler station, engine observed and applied to the workers. room and sterilization unit where noise level exceeded 85 db. Mill management have taken steps to reduce the noise levels by more Major Compliance frequent lubrication of machinery, reducing the exposure time to high noise and mandatory use of ear plugs and ear mufflers. Also, annual audiometric test conducted for all 85 mill staff and workers. The employees checked did not suffer significant hearing disabilities as seen from the audiometric test reports. Baseline audiogram and occupational and medical history records of workers maintained. The latest audiogram was carried out in Jun 2014. Monitoring carried out by the Safety & Health Officer for any significant hearing loss. The employees exposed to high noise levels were interviewed. The workers are aware of the danger of hearing loss due to prolonged exposure to high noise. The workers knew about the complaints process and mechanism available. “Permit to work” system applied at the POM. Staff and workers have been trained and certified by NIOSH for gas entrant and stand- by involving work in confined space. It was verified that the mill and estates have provided the appropriate PPE (safety boots, safety helmets, rubber boots, cartridge masks, safety goggles, gloves, overalls, ear plugs, ear mufflers) and the associated training to address safety and health issues. An audit for determining compliance with the minimum standards had been conducted on all types of PPE used. Adequate fire extinguishers and hose reels found to be located at strategic locations, operational and maintained in good conditions.

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Location map of fire extinguishers is available. First Aid equipment was available at POM, estates and at worksites. Samples of First Aid box was checked and contents found to be complete and in usable order during field visit. Training for workers in First Aid was carried out in the mill and estates and records maintained. The POM and estates have established their accident reporting KPI and incident monitoring implemented.

4.7.3 All workers involved in the Training programme planned for year 2014 includes training for all operation shall be adequately trained in safe working practices categories of workers. (see Criterion 4.8). Adequate Appropriate trainings on safe working practices are planned for: and appropriate protective - workers exposed to machinery and high noise levels, equipment shall be available to all workers at the place of work - workers working in confined space, to cover all potentially - harvesters hazardous operations, such as pesticide application, machine - pesticides operators operations, and land - manurers preparation, harvesting and, if it is used, burning. The training programme included the various types of training such as fire fighting and fire drill, exposure to high noise levels and

Major Compliance control measures for protection of hearing and audiometric tests, understanding MSDS/CSDS and first aid training. Evaluation to be carried out on each of the trainings to determine its effectiveness and training content to be revised periodically for improvement. The above trainings were conducted for year 2013 and records were available. However, for the year 2014, many of the trainings planned have yet to be carried out: refer to the Major NC # CFK-03 (Indicator 4.7.1) raised on the implementation of training programme for year 2014. Warning signs sighted at high noise areas and ear plugs and ear mufflers to be worn. There are also warning signs to use other PPE such as helmet and safety boots, safety. Appropriate PPE had been provided to all workers at the place of work to cover all potentially hazardous operations. However, on Jerangau Barat Estate, F 10 and F 3, the FFB Major NC # harvesters did not wear safety helmets although they had been CFK-04 provided by the Estate Management.

4.7.4 The responsible The responsible person (usually the Mandore or Headman) had person/persons shall be been identified. identified. There shall be records Records of regular meetings between the responsible person and of regular meetings between the workers to discuss about health and safety had been verified to be responsible person/s and workers. Concerns of all parties satisfactory. However, Mengkawang Estate did not have record of meetings about health, safety and welfare shall be discussed at these between the responsible persons and scheme smallholders to meetings, and any issues raised discuss on health, safety, and welfare. Minutes of regular Obs # shall be recorded. meetings were available on Jerangau Barat Estate and KKS CFK-02 Jerangau Barat. Major Compliance An observation had been issued.

4.7.5 Accident and emergency Accident and emergency procedures had been written and briefed procedures shall exist and instructions shall be clearly to staff, workers, contractors and visitors. Workers trained in First Aid were present in the mill and field understood by all workers. Accident procedures shall be operations. available in the appropriate First Aid Kits were available at worksites. language of the workforce.

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Assigned operatives trained in Records on all accidents had been verified to be maintained First Aid should be present in satisfactorily. both field and other operations, and first aid equipment shall be Quarterly review on accident cases had been carried out during quarterly meeting of Environment, Safety & Health (ESH) at available at worksites. Records of all accidents shall be kept and Jerangau Barat estate and the palm oil mill. periodically reviewed. On Mengkawang Estate, record of accident had not been maintained, and Form JKKP 8 had not been sent also. Obs # Minor Compliance An observation had been issued. CFK-03 4.7.6 All workers shall be Medical care had been provided to all the workers. Complied. provided with medical care, and covered by accident insurance. Local workers are covered by SOCSO, whereas foreign workers are covered by Foreign Workers Compensation Scheme with the Minor Compliance following insurance companies: Ins Company POM SOCSO Jerangau Barat Estate Handled by the HQ. Mengkawang Estate AXA Affin General Ins, Bhd. 4.7.7 Occupational injuries shall Records on Lost Time Accident (LTA) metrics had been verified to Complied be recorded using Lost Time Accident (LTA) metrics. be satisfactory.

Minor Compliance Criteria 4.8 All staff, workers, smallholders and contract workers are appropriately trained. Indicators Findings and Objective Evidence Compliance 4.8.1 A formal training A formal Training Plan 2014 documented and implemented. Complied. programme shall be in place that covers all aspects of the RSPO This annual training plan was established based upon the training Principles and Criteria, and that needs identified for various categories of staff and workers and their includes regular assessments of work functions. training needs and documentation of the Trainings conducted include a formal training programme on all programme. aspects of RSPO Principles and Criteria and the Supply Chain Certification System. Major Compliance Generally, training for various categories of operators, including all field and office staff, with regards to their duties and training needs had been reviewed and found acceptable (also refer to 4.7.1 and 4.7.3). 4.8.2 Records of training for Records of training for each employee had been verified to be Complied. each employee shall be satisfactory on Palm Oil Mill, and they were being progressively maintained. updated for the estates.

Minor Compliance

Principle 5: Environmental responsibility and conservation of natural resources and biodiversity Criteria 5.1 Aspects of plantation and mill management, including replanting, that have environmental impacts are identified, and plans to mitigate the negative impacts and promote the positive ones are made, implemented and monitored, to demonstrate continual improvement. Indicators Findings and Objective Evidence Compliance 5.1.1 An environmental impact Environmental Aspect and Impacts Assessment were conducted for Complied assessment (EIA) shall be documented. the POM and estates and its action plans documented and implemented. The assessment documents had included the Major Compliance identification of aspects from field activities that includes fertilizing, spraying, transportation of FFB, garbage disposal and also road maintenance. The report had also included the action plans and recommendations to mitigate the negative effects and to promote

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the positive ones such as construction of sewage and landfills, together with other conservation activities applicable to the PMU. The assessment has also included the participation from the smallholders under the FELDA Settlers schemes. 5.1.2 Where the identification of For the POM, the aspects and impacts assessment was revised on Complied impacts requires changes in current practices, in order to 13/10/2014 due to the planned installation of a new boiler. Timetable for the change has been developed and implemented with an action mitigate negative effects, a timetable for change shall be plan identifying the person in charge and action items. developed and implemented For the estates. there were no major changes to the identified within a comprehensive action impacts since the establishment of the above documents. plan. The action plan shall identify the responsible Impacts such as smoke emissions, noise levels, pesticides spraying, person/persons. fertilizer application, waste disposal, EFB and POME management were verified at the PMU. Minor Compliance HCV and other environmentally sensitive areas were documented and inspected on site. 5.1.3 This plan shall incorporate Implementation and monitoring of the documented environmental Complied a monitoring protocol, adaptive to operational changes, which improvement plans will be reviewed on an annual basis. The review will take into consideration the mitigation of negative impacts and shall be implemented to monitor the effectiveness of the promotion of positive ones such as the proper demarcation of buffer mitigation measures. The plan zone, clearing of overgrown natural vegetation and debris along the shall be reviewed as a minimum rivers/streams. every two years to reflect the results of monitoring and where there are operational changes that may have positive and negative environmental impacts.

Minor Compliance

Criteria 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. Indicators Findings and Objective Evidence Compliance 5.2.1 Information shall be HCV assessment was conducted by Jabatan PQSM HQ of FGVPM Complied collated in a High Conservation Value (HCV) assessment that and documented in a report dated 25 Oct 2014. The assessment includes both the planted area was done in collaboration, consultation and meetings with other itself and relevant wider agencies such as Jabatan Perhutanan, Jabatan Perhilitan, Jabatan landscape-level considerations Alam Sekitar, Felda Officer, smallholders and also the local (such as wildlife corridors). communities. All the relevant stakeholders have been included. The assessment has taken into consideration all aspects of Major Compliance environmentally sensitive areas such as ponds, streams, wildlife boundaries and was documented. The PMU estates are mostly surrounded by palm oil estates belonging to other companies. Certain parts of the estates are near to forest reserves with certain valuable timber species such as “chengal” and “keruing”. Based on the HCV assessment, there was no significant HCV area in the PMU. Although no HCV areas were found inside the PMU, conservation areas/environmentally sensitive areas had been identified and being monitored. The conservation areas are the rivers Sg. Peneh and Sg. Jemeluk that pass through the estates. Management Plan and Action Plan documented in all the estates with specific actions to be taken by the Estate Manager / Assistant Manager, including the maintenance and monitoring of buffer zones and placement of appropriate signages. The environmentally sensitive areas were inspected on site and found to be satisfactory.

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5.2.2 Where rare, threatened or The PMU has dug trenches and erected electric fence to Major NC # endangered (RTE) species, or discourage the intrusion of wildlife such as elephants into the OCL-01 HCVs, are present or are estates from the neighboring forest reserves. affected by plantation or mill However, there was no regular patrol to monitor the situation operations, appropriate measures that are expected to and also there is a lack of signages that prohibit hunting and maintain and/or enhance them polluting activities. shall be implemented through an action plan.

Major Compliance 5.2.3 There shall be a The program to regularly educate the workforce and community Complied programme to regularly educate the workforce about the status of about the status of these RTE species had been established with ongoing consultation with the relevant authorities. The workforce these RTE species, and appropriate disciplinary and local communities have been made aware to report the sighting measures shall be instituted in of various types of wildlife. accordance with company rules There is evidence of commitment to discourage any illegal or and national law if any individual inappropriate hunting, fishing or collecting activities via signages working for the company is found to capture, harm, collect erected around the affected areas. or kill these species.

Minor Compliance 5.2.4 Where an action plan has Management plans were established and monitoring outcomes were Complied been created there shall be ongoing monitoring: reviewed by the Estate managers. • The status of HCV and RTE There are no HCV or reported RTE in all the estates, as reported in species that are affected by the PQSM Report. Verification was also made during on-site plantation or mill operations assessment and found to be satisfactory. shall be documented and reported; The overall management plan on the status of HCV/RTE of the PMU • Outcomes of monitoring shall is collated, reviewed and monitored by the HQ sustainability team be fed back into the action plan. and is ongoing.

Minor Compliance 5.2.5 Where HCV set-asides Verified that HCV set-aside is not applicable for this PMU. Complied with existing rights of local communities have been identified, there shall be evidence of a negotiated agreement that optimally safeguards both the HCVs and these rights.

Minor Compliance Criteria 5.3 Waste is reduced, recycled, re-used and disposed of in an environmentally and socially responsible manner. Indicators Findings and Objective Evidence Compliance 5.3.1 All waste products and Visits made to POM and estates showed that all waste products and Complied sources of pollution shall be identified and documented. sources of pollution were identified and documented. The documentation and identification of all the waste products such Major Compliance as scheduled waste, domestic waste , clinical waste and recyclable waste such as metal, plastic, mill waste and polluting materials, e g. EFB, POME, stack emissions and boiler ashes were maintained and monitored at the POM. Scheduled Waste identified included spent hydraulic oil (SW 305), spent lubricant oil (SW 306), used chemical containers/drums (SW 409), used filters (SW 410), clinical waste (SW 404) and used batteries (SW 102). Appropriate secondary containment for the diesel skid tanks, chemical and scheduled waste storage areas was verified to be maintained at the POM. Segregation of wastes i.e. general wastes and scheduled wastes

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was verified to be satisfactory. Proper storage areas were identified for the storage of the recyclable wastes at the mill and estates. 5.3.2 All chemicals and their At the mill, the disposal of used chemicals and containers Complied containers shall be disposed of responsibly. (Consignment Note for Scheduled Waste) were done in accordance with the schedule on waste management as planned. Major Compliance Stores for scheduled waste were inspected and audited at the POM and estates and disposal was done by scheduled waste disposal contractor (Famous Phase Sdn Bhd) authorized and licensed by Department of Environment. Records on the disposal were well recorded and documented.

5.3.3 A waste management and The mill and estates have established and documented waste Complied disposal plan to avoid or reduce pollution shall be documented management and disposal plans to avoid or reduce pollution. and implemented. These operational plans covered the waste products and sources of pollution identified in the mill and estates. Minor Compliance Recycling of crop residues / biomass, i.e. EFB and PK shell had been implemented. EFB application plans and progress reports were verified to be satisfactory. The POM has a biogas plant for renewable energy from POME. Appropriate secondary containment for the diesel skid tanks, chemical and scheduled waste storage areas was verified to be maintained. Segregation of wastes, i.e. domestic waste, general wastes and scheduled wastes was verified to be satisfactory. Proper storage areas were identified for the storage of the recyclable wastes at the mill and estates. Recycling bins of three different colour codes for specific recycle waste were available in the mill and estates and were used for solid waste segregation and recycling. Sewage from the staff, workers and smallholders housing goes to the sewage facility. Programme initiated to segregate organic waste from general waste. Organic waste is collected by the local authority. Scheduled waste disposal at the mill was done by an appointed contractor that is licensed by the Department of Environment. The solid waste management and disposal plan using landfills were available at both the mill and estates. The designated landfill areas were verified to be at least 50 m away from any streams / water sources, thus minimizing the risk of contamination of water sources. Signage placed at the landfills and effluent pond areas.

Criteria 5.4 Efficiency of fossil fuel use and the use of renewable energy is optimised.

Indicators Findings and Objective Evidence Compliance 5.4.1 A plan for improving Apart from the use of diesel for electricity generation, palm fiber and Complied efficiency of the use of fossil PK shells were also used to generate electricity through steam fuels and to optimise renewable turbine and boiler. Palm fiber and PK shells were used as energy shall be in place and renewable energy/fuel on a 70:30 ratio basis. monitored. The use of energy in the palm oil mill was monitored monthly to Minor Compliance compare the energy usage against the production of CPO. Monthly records of energy consumption of non-renewable and renewable fuel per metric tonne of palm product at the POM were being monitored for comparison and control. At the estates, diesel consumption and the FFB harvested were monitored on a monthly basis.

Criteria 5.5

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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. Indicators Findings and Objective Evidence Compliance 5.5.1 There shall be no land The Group policy of ‘Zero open burning’ is enforced since July 2011. Complied preparation by burning, other than in specific situations as Both the mill and estates had adhered to the policy of ‘Zero open identified in the ‘Guidelines for burning’. the Implementation of the Field inspections made showed no evidence of open burning. ASEAN Policy on Zero Burning’ 2003, or comparable guidelines in other regions.

Major Compliance 5.5.2 Where fire has been used The PMU has adhered to the ‘zero burning ‘policy for replanting at Complied for preparing land for replanting, there shall be evidence of prior the estates. approval of the controlled Also, there was no evidence of any burning of domestic waste at the burning as specified in housing line sites and at the sanitary landfills of the estates during ‘Guidelines for the on site field assessment. Sanitary landfills are located far away Implementation of the ASEAN from the villages and water sources. Policy on Zero Burning’ 2003, or comparable guidelines in other regions.

Minor Compliance Criteria 5.6 Plans to reduce pollution and emissions, including greenhouse gases, are developed, implemented and monitored. Indicators Findings and Objective Evidence Compliance 5.6.1 An assessment of all The PMU had carried out an environmental impact assessment and Complied polluting activities shall be conducted, including gaseous identified the potential polluting activities at the POM and estates that include discharge to waterways, gaseous emissions to air and emissions, particulate/soot emissions and effluent (see contamination on land. Criterion 4.4). Monitoring of mill dust particulates and gas emissions is being done online using the Continuous Emissions Monitoring System (CEMS) Major Compliance and supported by the Ringlemann Smoke Chart. Report showed evidence that the emission is within the permissible limits of DOE as verified by documents made available during the on site visit to the mill. Average opacity of 5.72% and duration exceeding permissible limits found to comply with DOE regulation. POME treatment via mixing ponds and biogas plant were monitored, maintained and adhered to DOE regulations. Monitoring of noise levels at the mill has been carried out. Noise levels at the boiler station and the sterilization unit were identified to be above 85 dB. Ear mufflers have been issued and seen to be worn by workers at those locations. As documented in the HIRADC table, PPE use and audiometric examination used as control measures to prevent hearing loss of mill workers. 5.6.2 Significant pollutants and Identification of significant pollutants and greenhouse gas (GHG) greenhouse gas (GHG) emissions shall be identified, emissions has been done. e.g. POME, diesel / fuel and fertilizer. New and plans to reduce or minimise Their usage have been recorded and documented at the PMU. requirement them implemented. The PMU has just compiled the data for GHG emissions. of RSPO P&C

However the plans to further reduce or minimise GHG (2013) - Major Compliance Follow up emissions are still yet to be established and implemented. action at next This will be followed up during the next surveillance. ASA. 5.6.3 A monitoring system shall Monitoring and reporting of the significant pollutants to water, Complied be in place, with regular reporting on progress for these gaseous emissions to air and contamination on land are in place. significant pollutants and Tools and systems used include the DOE online CEMS monitoring emissions from estate and mill

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Report No.: R9303/14-1 Felda Global Ventures Plantations (Malaysia) Sdn Bhd Page 34 of 65 KKS Jerangau Barat Grouping - Main Assessment operations, using appropriate for air emissions, water quality at discharge points as per DID tools. regulations and Scheduled Waste disposal were adhering to DOE requirements Minor Compliance Water samples taken every month at the final discharge point of the palm oil mill effluent pond. Water samples also taken at six-monthly interval at upstream and downstream of waterways. The water samples were sent to Bukit Goh Analytical Laboratory in Kuantan for analysis. Test reports were maintained and results verified to have met the permissible regulatory limits for pH, BOD, COD, Total Solids, Suspended Solids, Oil & Grease, Ammoniacal Nitrogen and Total Nitrogen. Over the period Jan to Oct 2014, the BOD levels ranged from 41 ppm to 91 ppm with an average BOD level of 65 ppm. The DOE requirement is < 100 ppm.

Principle 6: Responsible consideration of employees and of individuals and communities affected by growers and millers

Criteria 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. Indicators Findings and Objective Evidence Compliance 6.1.1 A social impact External stakeholders’ consultation for the whole Felda Jerangau Complied assessment (SIA) including Barat grouping together with Felda Jerangau Baru grouping were records of meetings shall be held on 5 Jul 2014 at Dewan Orang Ramai Jerangau. The documented. attendance lists contained 80 names from different categories of

Major Compliance stakeholders. The POM and estates also conducted Stakeholders’ Consultation with internal stakeholders. Minutes of meetings and attendance were maintained as records together with the SIA Report. Management Action Plan and Continuous Improvement Plan were identified, documented and implemented. The review mechanism of these social documents had appropriately involved stakeholders such as the sustainability team and Geographic Information System (GIS) team. 6.1.2 There shall be evidence The participation of both internal and external stakeholders Complied that the assessment has been (including local from Governmental organizations) which was done with the participation of evident with the list of participants recorded. List of stakeholders affected parties. were verified and included Felda settlers, local communities, school

Major Compliance teachers, auxiliary police, fire department, government bodies, neighbouring estates and smallholders, contractors, suppliers, transporters, health clinic staff, management staff and workers (incl. representative of foreign workers, i.e. Indonesians), 6.1.3 Plans for avoidance or The social documents had plans for avoidance or mitigation of Complied mitigation of negative impacts negative impacts, such as continuous monitoring of the level of and promotion of the positive smoke emission from the mill, lack of suitable work opportunities for ones, and monitoring of impacts Felda second generation [KESIDANG], etc. identified, shall be developed in consultation with the affected The plans also include promoting the positive impacts such as parties, documented and targeting higher education achievement of school children, Rural timetabled, including Transformation Centre, etc. responsibilities for implementation. The management of estate and mill has monitored the impacts identified, developed the mitigation plan in consultation with the

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affected parties, especially Felda settlers. The plans contained the Major / Minor - TBF responsible person for the social issues, actions to be taken and timeline for monitoring and implementation. 6.1.4 The plans shall be The PMU has planned to review the plans above every year for Complied reviewed as a minimum once follow-up and updating to current practices. The review is to include every two years and updated as the participation of affected parties. necessary, in those cases where the review has concluded that changes should be made to current practices. There shall be evidence that the review includes the participation of affected parties.

Minor Compliance 6.1.5 Particular attention shall Complied be paid to the impacts of Positive impacts such as increased work opportunities, increased smallholder schemes (where income and improved living standards were identified. the plantation includes such a scheme).

Minor Compliance Criteria 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. Indicators Findings and Objective Evidence Compliance 6.2.1 Consultation and Policy on industrial relations, i.e, “Polisi Perhubungan Sosial”, for Complied communication procedures shall internal and external communication and consultation is available. be documented. In both of the estates audited that actually consisted of Felda settlers, at least 3 different meetings were conducted between the Major Compliance Felda management office and the Scheme Smallholders every month. The available channels of communications between the management and affected or interested parties are the Joint Consultative Committee [JCC], meetings with Felda Scheme Smallholders, Jawatankuasa Kemajuan dan Keselamatan Kampung/Rancangan [JKKR] and Gerakan Persatuan Wanita [GPW]. All of these meetings are conducted monthly. Other than meetings and gatherings, affected parties also have access to workplace inspections, suggestion boxes, housing maintenance request forms and complaints/grievances mechanism to raise their concerns. Estate managers are the nominated persons responsible for communication with the stakeholders. The organization has a list of stakeholders that include Felda settlers, local communities, , government departments/agencies, contractors, suppliers, transporters, etc. 6.2.2 A management official Organization charts in all mill and estates showed that different Complied responsible for these issues responsible persons have been nominated for different sectors of shall be nominated. stakeholders. Interviews with mill and estate managers verified the understanding of their roles and responsibilities. Minor Compliance Examples of responsible persons nominated to communicate with different sectors of stakeholders are: - Mohd. Mazuki Bin Sulong, Kerani Umum [Kewangan] at the Felda Jerangau Barat POM with appointment letters dated 15 Oct. 2014. - Wan Mohd Rizal Wan Ismail, FTP Supervisor at Felda Jerangau Barat with appointment letter dated 4 Sep. 2014. 6.2.3 A list of stakeholders, List of stakeholders are sighted and properly filed. Copies of these Complied records of all communication, stakeholders’ lists were also submitted to the auditors prior to the including confirmation of site audit. Internal stakeholders may raise their concerns through

INTERTEK CERTIFICATION INTERNATIONAL SDN BHD (188296-W)

Report No.: R9303/14-1 Felda Global Ventures Plantations (Malaysia) Sdn Bhd Page 36 of 65 KKS Jerangau Barat Grouping - Main Assessment receipt and that efforts are different communication channels as mentioned in 6.2.1. made to ensure understanding by affected External stakeholders may specifically raise their concerns through parties, and records of suggestion boxes and complaint form, i.e. “Rekod Pertanyaan Dan actions taken in response to Maklumbalas” provided by the mill and estates. There were also input from stakeholders, shall records sighted where external stakeholders communicated with the be maintained. PMU with some specific requests, e.g. donations. All these concerns, suggestion and requests were responded and maintained Minor Compliance properly. Criteria 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. Indicators Findings and Objective Evidence Compliance 6.3.1 The system, open to all The PMU has an established and documented system for dealing Complied affected parties, shall resolve with complaints and grievances and it was implemented through disputes in an effective, timely Manual Lestari 1A [ML-1A/L2-PR4(0)]. and appropriate manner, ensuring anonymity of There were no disputes recorded in year 2013 to 2014. Respect of complainants and anonymity and protection of complainants is provided through “Polisi whistleblowers, where Pemberian Maklumat [Whistleblowing]” dated 1 Aug. 2006 signed by requested. Tajuddin Carrim, Pengarah Eksekutif Kanan, Human Resources.

Major Compliance The record shows that ‘Complaints and Grievances Book’ in all estates visited are still active in recording complaints/requests made by employees and Scheme Smallholders. For example last entries were on 21 Nov 2014 in the POM and on 5 Aug 2014 in Felda Jerangau Barat estate. 6.3.2 Documentation of both the Complaints and grievances are handled by respective responsible Complied process by which a dispute was persons. Outcomes from the actions taken are recorded in different resolved and the outcome shall manners, e.g. meeting minutes and payment vouchers to be available. contractors for completed repair jobs relating to complaints of faults

Major Compliance in housing quarters. Date of complaint, action commencement and status of each action were recorded. Criteria 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. Indicators Findings and Objective Evidence Compliance 6.4.1 A procedure for identifying No cases requiring any negotiation or compensation pertaining to Complied legal, customary or user rights, these criteria. and a procedure for identifying people entitled to compensation, There have been no changes in this status as at the period of shall be in place. verification on site.

Major Compliance 6.4.2 A procedure for calculating At the time of audit, there were no borders which were directly Complied and distributing fair adjacent to any villages or native land with the FELDA Scheme compensation (monetary or Smallholders. The FELDA Scheme Smallholders operations are otherwise) shall be established based on approval from federal government. Therefore, no cases and implemented, monitored and evaluated in a participatory requiring any negotiation or compensation pertaining to these way, and corrective actions criteria. taken as a result of this evaluation. This procedure shall take into account: gender differences in the power to claim rights, ownership and access to land; differences of transmigrants and long- established communities; and differences in ethnic groups’ proof of legal versus communal ownership of land.

INTERTEK CERTIFICATION INTERNATIONAL SDN BHD (188296-W)

Report No.: R9303/14-1 Felda Global Ventures Plantations (Malaysia) Sdn Bhd Page 37 of 65 KKS Jerangau Barat Grouping - Main Assessment

Minor Compliance 6.4.3 The process and outcome No cases requiring any negotiation or compensation pertaining to Not of any negotiated agreements these criteria. and compensation claims shall Applicable be documented, with evidence There have been no changes in this status as at the period of of the participation of affected verification on site. parties, and made publicly available.

Major Compliance Criteria 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. Indicators Findings and Objective Evidence Compliance 6.5.1 Documentation of pay and Only local workers are hired at the POM and in all the estates Complied conditions shall be available. offices. However, FTP and other contractors providing agricultural services to the Scheme Smallholders hired both local and foreign Major Compliance workers. Documentation and conditions of pay for foreign workers at the FTP and for local workers at the estates offices are available for verification. Employment agreement with foreign workers, who are mostly from Indonesia, stated all the statutory fringe benefits and eligible incentives, e.g. working hours, overtime, leave and medical benefits, maternity leave for women, insurance coverage, deductions, resignation notice period, company rules. The payment slips for foreign workers at the FTP sighted are easy to understand and this fact was further verified with foreign workers. Payments are made latest by 7th of each month and consistent with Minimum Wage Order 2012 as well as MAPA-NUPW collective agreement. Holidays entitlements as required by the laws are satisfactorily fulfilled, e.g. annual leaves, public holidays, maternity leave. Payments for unused annual leaves in Dec 2013 were sighted at FTP office. FTP as the official agricultural service provider for Felda estates provides free housing and piped water supply, free electricity, medical benefits, insurance cover, and welfare amenities that in overall constitutes a decent living for the employees.

6.5.2 Labour laws, union Offer letters and signed “Pengakuan Penerimaan Syarat-syarat Complied agreements or direct contracts Perkhidmatan Petugas Syarikat Kumpulan Felda & Kod Etika dan of employment detailing Tatalaku Petugas Syarikat Kumpulan Felda yang berkuatkuasa payments and conditions of Mulai 1 Januari 2010” for local workers are sighted. employment (e.g. working hours, deductions, overtime, sickness, Documented employment contract, i.e. “Surat Perjanjian Pekerjaan holiday entitlement, maternity diantara Felda Global Ventures Plantations (M) Sdn. Bhd. (974143 – leave, reasons for dismissal, H) dengan Pekerja Asing Indonesia” for foreign workers hired by period of notice, etc.) shall be FTP were sighted during the audit. The contract document covers available in the languages all issue such as working hours, deductions, overtime, sickness, understood by the workers or explained carefully to them by a holiday entitlement, maternity leave, and reasons for dismissal, management official. period of notice. The contract document is made available in Bahasa Malaysia, which is understood by the workers. Major Compliance 6.5.3 Growers and millers Site visits to FTP foreign workers’ quarters as well as the Scheme shall provide adequate Smallholders housing and interviews with their dependents revealed housing, water supplies, their general satisfaction with the housing conditions and amenities. medical, educational and welfare amenities to national Housing, electricity and water supply standards or above, in All Felda staff and Scheme Smallholders are provided with proper accordance with Workers’ housing and sufficient pay-per-use 24-hour electricity and water Minimum Standard of Housing supply. Foreign workers hired by FTP however are accommodated and Amenities Act 1990 (Act

INTERTEK CERTIFICATION INTERNATIONAL SDN BHD (188296-W)

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446) or above, where no such in proper quarters with free electricity and water supply. public facilities are available or accessible (not applicable However, the following issues were raised: to smallholders). 1. In both Felda Jerangau Barat and Mengkawang estates, the records of weekly workers’ housing inspection were not Minor Compliance maintained. Maintenance of this record is stipulated under Workers’ Minimum Standards of Housing and Amenities Act 1990 [Act 446], 23(2). Major NC # 2. Sanitary of the Felda Mengkawang workers quarters JMD-01 compound is not at satisfactory level. Also, rubbish from Felda Mengkawang workers quarters compound were also not properly wrapped and placed in appropriate location for easy pick up by the assigned contractor.

Schools For local children, includes children of Felda staff and Scheme Smallholders, there are government primary, secondary and religious schools in the vicinity of the PMU. Transport is provided free for schools children daily. Sundry shops Sundry shops and other facilities are available in the vicinity of the PMU, e.g. banks, petrol station, fresh market, night market, restaurants and other eating places. Crèche ( Rumah Asuhan Kanak-kanak) Government managed kindergartens, i.e. Tadika KEMAS, are available in all estates visited for pre-school children. Medical clinics Government managed clinics are available in the vicinity of the PMU. Medical allowance limit for married Felda staff is RM400/year and bachelor staff is RM200/year. FTP foreign workers are entitled for RM200/year of medical allowance. Transport to and from the clinics are provided free for Felda staff and FTP foreign workers. FTP foreign workers are covered by insurance through Foreign Workers Compensation Scheme and still valid at the time of audit. 6.5.4 Growers and millers shall Food for the Felda staff, Scheme Smallholder and FTP foreign Complied make demonstrable efforts to workers provided through sundry shops in the vicinity of the PMU. monitor and where able, Most of the sundry shops are operated by the Scheme improve workers’ access to Smallholders. adequate, sufficient and affordable food.

Minor Compliance Criteria 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. Indicators Findings and Objective Evidence Compliance 6.6.1 A published statement in The published statements of policy “Kebebasan Menganggotai Complied local languages recognising Kesatuan/Khidmat Sukarela”, dated 28 Jun 2011 signed by freedom of association shall be Dato’Dzulkifli Abd. Wahab, Pengarah Besar Felda, recognises the available. employee’s freedom of association, was found to be available and

Major Compliance widely displayed in all notice boards of the PMUs. This policy is available in Bahasa Malaysia which can be understood by majority of the workers. All non-executive Felda staff are members of Kesatuan Pekerja-Pekerja Felda Palm Industries Sdn. Bhd. and all

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executives staff are members of Persatuan Kakitangan Kanan Felda [PKKF]. Membership fees are between RM5-10 through monthly salary deduction. 6.6.2 Minutes of meetings with Both unions mentioned above meet annually. Last records of Complied main trade unions or workers “Kesatuan Pekerja-Pekerja Felda Cawangan Felda Wilayah representatives shall be Terengganu” meetings were on 10 Jan 2014 and on 6 Nov 2014. documented.

Minor Compliance Criteria 6.7 Children are not employed or exploited. Indicators Findings and Objective Evidence Compliance 6.7.1 There shall be The PMU has a policy of not employing child labour, i.e. persons Complied documentary evidence that below 18 years old in accordance with Employment Act 265 as minimum age requirements are evidenced in “Polisi Pekerja Kanak-Kanak” dated 1 Jun 2014 met. signed by Datuk Faizoul Ahmad, Pengarah Besar Felda. This policy

Major Compliance is displayed at strategic public places. Employees and workers profiles were examined during the audit. No underage workers found. This fact was further verified through interviews with staff and workers in the PMU. Criteria 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. Indicators Findings and Objective Evidence Compliance 6.8.1 A publicly available equal The PMU has a publicly displayed documented policy on equal Complied opportunities policy including opportunities, i.e. “Polisi Kesetaraan Peluang”, dated 1 Jun 2014, identification of relevant/affected signed by Datuk Faizoul Ahmad, Pengarah Besar Felda. The policy groups in the local environment stressed on non-discrimination based on race, caste, nationality, shall be documented. religion, gender, sexual orientation, disability/handicap, and Major Compliance union/political affiliations. However, positive discrimination for the benefit of certain society groups may be allowed after consultation. During the audit, second generation of the original Scheme Smallholders found managing some of their parent’s plot of lands. None of them found to be underaged. 6.8.2 Evidence shall be Felda as an organization adopted the “Polisi Pengambilan Pekerja Complied provided that employees and Asing” dated 1 Jun 2014 signed by Datuk Faizoul Ahmad, Pengarah groups including local Besar Felda. Only FTP in Felda Jerangau Barat estate, who is communities, women, and providing agricultural services to Scheme Smallholders, hired migrant workers have not been discriminated against. foreign workers. The employment of foreign workers was implemented without affecting the opportunities for local Major Compliance communities. Local workers at the mill and Felda estate offices are covered under SOCSO scheme whilst foreign workers working for FTP are covered under Foreign Workers Compensation scheme (FWCS). Insurance covers sighted shows validity at least until May 2015. Interviews with FTP foreign workers revealed satisfaction with the estates for job opportunities and they enjoy all common welfare amenities like free housing, free water and electricity supplies and medical care. They are aware that their grievances can be raised through various channels, especially the regular roll call meetings that they are attending every morning. 6.8.3 It shall be demonstrated Depending on the nature of work positions, the PMU management Complied that recruitment selection, hiring takes into considerations the needs for technical qualifications, and promotion where relevant experience and related skills in recruitment selection, hiring and are based on skills, capabilities, promotion exercises. qualities, and medical fitness necessary for the jobs available. It was verified that the promotions to higher position at the estates and POM were based on evaluations which considered the skill, Minor Compliance capabilities, qualities and medical fitness of the employees.

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Criteria 6.9 There is no harassment or abuse in the work place, and reproductive rights are protected. Indicators Findings and Objective Evidence Compliance 6.9.1 A policy to prevent sexual A documented policy to prevent sexual harassment and violence Compliance and all other forms of “Polisi Gangguan Seksual dan Keganasan” is available and publicly harassment and violence shall displayed, i.e. “Polisi Gangguan Seksual Dan Keganasan” dated 1 be implemented and Jun 2014 signed by Datuk Faizoul Ahmad, Pengarah Besar Felda. communicated to all levels of the workforce. Gender committees or equivalent are formed, i.e. Jawatankuasa Bertindak Wanita, Kelab Keluarga Dayabudi [KKD] in the POM and Major Compliance Gerakan Persatuan Wanita [GPW] in the estates. The policy and complaint procedure have been communicated to all levels of the workforce. All committee members are aware of the policy and its complaint procedures. Latest meeting of Jawatankuasa Bertindak Wanita was on 19 Oct 2014 which covers Felda Jerangau Barat and Jerangau Baru regions. 6.9.2 A policy to protect the The PMU’s commitment to protect the reproductive rights and rights Complied reproductive rights of all, to have a family of the workers especially women is evidently stated especially of women, shall be in the policy to prevent sexual harassment and violence “Polisi implemented and Gangguan Seksual Dan Keganasan”, dated 1 Jun 2014 signed by communicated to all levels of the workforce. Datuk Faizoul Ahmad, Pengarah Besar Felda. Local female staff is fully aware that they are entitled for two months Major Compliance paid maternity leave. However, no female Felda staff applied for maternity leave in year 2013 to 2014. 6.9.3 A specific grievance Complaint and grievance procedures “Prosedur Menangani Aduan Complied mechanism which respects dan Rungutan” and “Polisi Pemberian Maklumat [Whistleblowing]” anonymity and protects are available to manage grievances and complaints from internal complainants where requested and external stakeholders. shall be established, implemented, and Management confirmed that there has been no report of sexual communicated to all levels of the harassment in the PMU so far. workforce.

Minor Compliance Criteria 6.10 Growers and millers deal fairly and transparently with smallholders and other local businesses. Indicators Findings and Objective Evidence Compliance 6.10.1 Current and past prices Onsite audit verified that the current and past prices paid for FFB Complied paid for Fresh Fruit Bunches pricing were displayed at the Mill and Estate offices. (FFB) shall be publicly available. FFB price paid per delivery is also stated in each truck delivery slip Minor Compliance issued by the mill as reference for the Scheme Smallholders. 6.10.2 Evidence shall be Pricing mechanism for FFB is fair and transparent. Price of FFB Complied available that growers/millers was set based on MPOB approved price. FFB is also graded by have explained FFB pricing, licensed graders based on MPOB specification. Training attended and pricing mechanisms for and results of the tests taken by the licensed graders, Alwi Embong FFB and inputs/services shall be documented (where these on Nov 2010, Mohd Noor Azman Mohd. Amin on Sep 2012 and a are under the control of the few others were verified. mill or plantation).

Major Compliance 6.10.3 Evidence shall be Stakeholder interviews conducted during this assessment with available that all parties suppliers, contractors, and relevant parties including local and understand the contractual foreign workers confirmed that understand the contractual agreements they enter into, and agreements (such as terms and payment) they enter into with the that contracts are fair, legal and transparent. PMU. They also consider the business transactions as fair and transparent. Minor Compliance However. The following issues were raised: 1. Work Order (“Surat Perintah Kerja”) and contract

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conditions issued by the mill and estates did not specifically mention that the contractors are also required Minor NC # to comply with RSPO standards, esp. social standard. JMD-01 2. Currently there are no procedures available for the mill and estates to monitor that the contractors awarded with specific contract works will comply with RSPO standards. 6.10.4 Agreed payments shall Although the rubbish collection contract between Felda be made in a timely manner. Mengkawang Cooperative (“Koperasi Felda Mengkawang”) and the Felda Mengkawang estate has expired on 30 Apr 2014, the Minor NC # Minor Compliance Cooperative continued collecting rubbish around the JMD-02 settlement area without payment. There was no contract renewal as at the date of the audit. Interviews with contractors and suppliers indicated that the PMU conducted its business practices with the local business in a fair manner. Criteria 6.11 Growers and millers contribute to local sustainable development where appropriate. Indicators Findings and Objective Evidence Compliance 6.11.1 Contributions to local The PMU’s contribution towards local communities had been Complied development that are based on evidenced in several social areas and verified during on site visit as the results of consultation with follows: local communities shall be demonstrated.  Free tuition, quran reciting lesson for children of Felda staff and Scheme Smallholders. Minor Compliance  Allocation for educational budget to schools in the vicinity of the PMU as incentives for high achievers. 6.11.2 Where there are scheme It was verified that in Felda Jerangau Barat there are 367 Scheme Complied smallholders, there shall be Smallholder and in Felda Mengkawang there are another 329 evidence that efforts and/or Scheme Smallholders. resources have been allocated to improve smallholder Felda through its subsidiary, the FTP, are taking all possible efforts productivity. to improve the productivity of the Scheme Smallholders while Minor Compliance adhering to RSPO P&C. However, quite a number of Scheme Smallholders opted to manage their plots of lands on their own especially after the land titles have been transferred into their individual names. Criteria 6.12 No forms of forced or trafficked labour are used. Indicators Findings and Objective Evidence Compliance 6.12.1 There shall be evidence Audit of employment records such as work permits in an estate Complied that no forms of forced or office confirmed that all foreign workers were recruited through legal trafficked labour are used. means and according to the regulatory requirements. Unit Tenaga Kerja, FELDA Global Ventures [FGV] is the main unit organizing Major Compliance recruitment of new foreign workers in collaboration with private recruitment agencies in the country of origin. The PMU’s responsibilities are only to allocate each foreign worker with suitable accommodation and offer them enough jobs in a month. 6.12.2 Where applicable, it There was no evidence of contract substitution and this was Complied shall be demonstrated that no confirmed from interviews with workers and relevant stakeholders. contract substitution has occurred.

Minor Compliance 6.12.3 Where temporary or The special policy on recruitment of foreign workers “Polisi Complied foreign workers are employed, a Pengambilan Pekerja Asing” and equal opportunities “Polisi special labour policy and Kesetaraan Peluang” were established and the implementations procedures shall be established verified to be satisfactory. Review on employment contracts of and implemented. foreign workers also confirmed that the policies, including minimum Major Compliance wages, have also been duly implemented.

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Criteria 6.13 Growers and millers respect human rights. Indicators Findings and Objective Evidence Compliance 6.13.1 A policy to respect The special policy on human rights, i.e. “Polisi Hak Asasi Manusia” Complied human rights shall be dated 1 Jun 2014 signed by Datuk Faizoul Ahmad, Pengarah Besar documented and communicated Felda has been established and its implementations verified to be to all levels of the workforce and satisfactory. Review on employment contracts of foreign workers operations (see Criteria 1.2 and 2.1). also confirmed that the policies, including minimum wages have also been duly implemented. Major Compliance 6.13.2 As long as children of Not applicable at this PMU. Not plantation workers of Sabah and Applicable Sarawak are not secured a right to go to government school, the plantation companies should engage in a process to secure the children of the plantation workers access to education as a moral obligation.

Minor Compliance

Principle 7: Responsible development of new plantings KKS Jerangau Barat PMU has documented procedures for this development but to date has not carried any new plantings after Nov 2005. Therefore, the requirements of Principle 7 are not applicable during this assessment.

Principle 8: Commitment to continuous improvement in key areas of activity Criterion 8.1 Growers and millers regularly monitor and review their activities, and develop and implement action plans that allow demonstrable continual improvement in key operations. Indicators Findings and Objective Evidence Compliance 8.1.1 The action plan for The POM has identified and implemented the following Continual Complied continual improvement shall be Improvement Action Plans for the period 2014 to 2016 as required: implemented, based on a consideration of the main 1. Upgrading of the biogas plant, social and environmental 2. Reduce the consumption of diesel. impacts and opportunities of the grower/mill, and shall 3. Recycling and reduction of waste (recycle scrap iron, palm fiber include a range of Indicators and shell as renewable fuel). covered by these Principles 4. Control and prevention of pollution with the installation of and Criteria. Continuous Emission Monitoring System (CEMS) for stack emission. 5. To achieve OER > 21.5% and KER > 5.5%, Major / Minor -TBF 6. To achieve zero accident at the mill.

7. Repair and repainting of workers’ houses/ quarters and As a minimum, these shall playgrounds. include, but are not necessarily be limited to: 8. Free tuition class for employees’ school children. Evidence of results was available for the above continuous • Reduction in use of improvement action plans. pesticides(Criterion 4.6); The estates have identified and implemented the following Continual • Environmental impacts Improvement Action Plans for the period 2014 to 2016 as required: (Criteria 4.3, 5.1 and 5.2); 1. Reduce the consumption of pesticides.

2. Increase the acreage for beneficial plants (tumera subulata, • Waste reduction (Criterion

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5.3); cassia cobanensis and antigonon leptopus). 3. Increased recycling (used fertilizer bags, scrap iron, plastic, paper, • Pollution and greenhouse gas glass). (GHG) emissions (Criteria 5.6 4. Increase the area of subsoil fertilized. and 7.8); 5. Build futsal court for staff and workers and new badminton court at FTP workers’ quarters. • Social impacts (Criterion 6.1); 6. Repair and repainting of workers’ houses/ quarters, • Optimising the yield of the 7. Free tuition, Quran reciting lesson for children of Felda staff and supply base. Scheme Smallholders. 8. Allocation for educational budget to schools in the vicinity of the PMUs as incentives for high achievers. Dasar Dana Kecemerlangan Pendidikan Felda [DKPF] continuously implemented in 2014 with four different schemes of incentives through a circular dated 14 Apr. 2014 signed by Dato’ Hj. Ahmad Azmey Abu Talib, Pengarah, Jab. Pendidikan Menengah & Rendah, Felda. 9. Changing of underground water piping to improve the water supply around the Felda settlement. 10. Rebate for water consumption at RM15/month and electricity consumption subsidy of RM2/person for Felda staff. 11. Reduce the delivery time of FFB to POM. 12. Increase FFB quality and yield.

3.1.1 Supply Chain Certification Standards Findings - on CPO Mill

The Supply Chain model applied at KKS Jerangau Barat POM during this Main Assessment is Module E – CPO Mills: Mass Balance (MB).

Details of findings are as follows:

E.1 Documented procedures Indicators Findings and Objective Evidence Compliance E.1.1 A documented Supply Chain Procedure Doc No. FGVPM-RSPO Complied The facility shall have written SCCS Issue 1.0 Rev 2.0 (Effective 1 Dec 2012) SOP for Mill RSPO procedures and/or work Supply Chain Certification System has been established and instructions to ensure the implemented using the Mass Balance (MB) module. implementation of all the elements specified in these requirements. This shall include at minimum the following: a) Complete and up to date The SOP addressed the following requirements: Complied procedures covering the  Purchase, delivery, receipt, storage and processing of FFB from implementation of all the own PMU estates and other FFB suppliers (Outside Crop elements in these requirements Producers),  Production and storage of CPO, production data and capacity,  Sales and dispatch of CPO,  Document control,  Record control with retention period of 10 years. Implementation complied with all the requirements. b) The name of the person The Mill Manager, Encik Zakaria bin Abdullah has been appointed Complied having overall responsibility for as the person responsible and with authority to implement RSPO and authority over the Supply Chain requirements at the POM. He is assisted by the implementation of these Assistant Mill Manager, Encik Mohd Faisal bin Harun, who has the requirements and compliance knowledge of the Supply Chain System. Organization Chart and with all applicable requirements. job descriptions have been documented. This person shall be able to

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Report No.: R9303/14-1 Felda Global Ventures Plantations (Malaysia) Sdn Bhd Page 44 of 65 KKS Jerangau Barat Grouping - Main Assessment demonstrate awareness of the facilities procedures for the implementation of this standard. E.1.2 The SOP covers the receiving of certifiable FFB supply from the Complied The facility shall have estates of this PMU. There is also non-certifiable FFB from other documented procedures for FGVPM / FELDA PMUs and Outside Crop Producers. receiving and processing All supplies of FFB were subjected to verification of documents certified and non-certified FFBs. (delivery note) that indicates the origin of the fruit source and quantity check by weighbridge personnel and FFB quality check by the laboratory personnel. The three storage tanks (one 500 MT tank and two 1800 MT tanks) at the POM are designated for storage of Mass Balance (MB) CPO.

E.2 Purchasing and goods in Indicators Findings and Objective Evidence Compliance E.2.1 The weighbridge personnel verified the delivery note concerning the Complied The facility shall verify and supply source of FFB received and records this information and the document the volumes of as weighed tonnages in the weighbridge ticket. All relevant FFB certified and non-certified FFBs data are entered into the PGVPM computer system and/or daily received. reporting spreadsheet. Daily data may be extracted from the computer system. Weekly and monthly reports are submitted to the Regional Office and Kuala Lumpur Head Office through the Mill Performance Report (MPR) system. Production Report for Jan 2013 to Oct 2014 is verified to be Mass Balance CPO. Satisfactory performance of deliveries of FFB made by transport contractors hired by the estates. E.2.2 The POM has an internal monitoring and reporting mechanism for Complied The facility shall inform the CB informing the CB of significant production variations. So far, there is immediately if there is a no projected overproduction. projected overproduction. E.3 Record keeping Indicators Findings and Objective Evidence Compliance E.3.1 Records and reports necessary for all aspects of the requirements Complied The facility shall maintain were verified and confirmed to be available. accurate, complete, up-to-date The records and reports were updated daily/ regularly, properly filed and accessible records and and readily retrievable. reports covering all aspects of these requirements. E.3.2 The SOP specified that all records and reports shall be kept for a Complied Retention times for all records minimum of 7 years. The archived records and reports are and reports shall be at least five retrievable. (5) years. E.3.3 All receipts of certifiable FFB, FFB processed, CPO production, PK Complied The facility shall record and production and balance stocks were recorded by the Mill. balance all receipts of RSPO Transaction documents and bookkeeping are available for CPO and certified FFB and deliveries of PK. Monthly summary report of above information submitted to the RSPO certified CPO, PKO and Regional Office and Kuala Lumpur Head Office. palm kernel meal on a three- There is no Palm Kernel mill for production of PKO at the POM. PK monthly basis. sold and delivered to the Kernel Crushing Plant (KCP) at Semambu Industrial Estate, Kuantan. The two weighbridges at the Mill are duly calibrated and calibration certificates found to be in order.

E.3.4 All deliveries of the MB sales of CPO are from positive stock. POM Complied The following trade names has prepared an appropriate stamp for the identification of RSPO should be used and specified in certified CPO and PK. Documents to be stamped “RSPO CPO or

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Report No.: R9303/14-1 Felda Global Ventures Plantations (Malaysia) Sdn Bhd Page 45 of 65 KKS Jerangau Barat Grouping - Main Assessment relevant documents, e.g. PK – Mass Balance” appropriately for CPO and PK products. purchase and sales contracts, e.g. *product name*/SG or Traceability verified from sampled records (FFB Delivery Note, Segregated. The supply chain Weighbridge Ticket, FFB & Truck Daily Summary, Production model used should be clearly indicated. Report, CPO Storage Report and CPO Delivery Note or Shipping Instruction) for the period Jan 2013 to Oct 2014. E.3.5 There is no outsourced activity at this POM. Complied In cases where a mill outsources activities to an independent palm kernel crush, the crush still falls under the responsibility of the mill and does not need to be separately certified. The mill has to ensure that the crush is covered through a signed and enforceable agreement. E.4 Sales and good out Indicators Findings and Objective Evidence Compliance E.4.1 CPO is sold only to a FELDA subsidiary company, Felda Oil Complied The facility shall ensure that all Products Sdn Bhd at Kuantan and Felda Bulkers. sales invoices issued for RSPO Items (a) to (e) were included in the company’s invoices, delivery certified products delivered note and other relevant documents to all CPO buyers as stipulated include the following information: in the SOP for RSPO/MB module. Deliveries of CPO and PK made a) The name and address of the with Delivery Note or Shipping Instruction. Data entry into computer buyer; system or reporting spreadsheet. Delivery of CPO and PK checked b) The date on which the invoice to ensure that the authorized quantities are not exceeded. was issued; CPO and PK deliveries are made by contractor, Felda Transport c) A description of the product, including the applicable supply Services. chain model (Segregated); d) The quantity of the products delivered; e) Reference to related transport documentation. E.5 Training Indicators Findings and Objective Evidence Compliance E.5.1 Mill personnel have been trained in the Supply Chain Certification Complied System with Mass Balance (MB) Module and RSPO Awareness on The facility shall provide the training for all staff as required 25/06/2014 and training records are available. to implement the requirements Interview with selected mill personnel confirmed their awareness of the Supply Chain Certification and knowledge of the supply chain. The requirements of the Mass Systems. Balance Module have essentially been documented and implemented as evidenced from the documentation and records at the Palm Oil Mill. E.6 Claims Indicators Findings and Objective Evidence Compliance E.6.1 The SOP stated that the PMU will only make claims on certified Complied The facility shall only make CPO and PK from certified FFB using MB model according to claims regarding the use of or "RSPO Rules on Market Communications and Claims" and "RSPO support of RSPO certified palm Trademark usage and Guidelines". oil that are in compliance with So far, no claims made by the PMU. the RSPO Rules for Communication and Claims.

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3.1.2 Status on Supply Chain on POM: Based on the documents and records presented during the on-site verifications made, it is concluded that the FGV Plantations Jerangau Barat POM has been able to comply with the requirements of the RSPO SCCS under the ‘MB’ module and is thus eligible for ‘MB’ trading for its palm products for year 2014/2015.

3.1.3 Status on Trading of Certified Palm Products by PMU: The PMU and POM has not commenced the trading of any of its certifiable palm products under the MB module.

3.2 Status of Identified Noncompliance and Corrective Actions, Observations and Positive Elements. The status of the Noncompliances (NCR) and Observations (OBS) identified against the MYNI Compliance Indicators is as per the details below: Assessment Type Year Noncompliance (NCR) Observations (OBS) Main Assessment 2014 12 (6 Major & 6 Minor) 3

3.2.1 Year 2014: Main Assessment (6 MAJOR NCRs)

NCR # MYNI Details of NCR Indicator MAJOR 4.4.2 Date issued: 06 Nov 2014 CFK-01 Non-conformance: 1. On Jerangau Barat, F 801 and 802, boundary markings for buffer zone along Sg. Jemeluk were only about 5 metres on either side of the river whereas the width of the river was about 10 metres.

2. On Mengkawang Estate, F 8, buffer zone had been identified but there was no demarcation of boundaries. There was also evidence of herbicide spraying on tall grasses within the buffer zone.

Root Cause and Corrective Action: No action seen on the maintenance of the buffer zones.

Actions taken: Buffer zone extended to 10 metres (width of the river) by pole markers painted white and blue. Erection of buffer zone signages prohibiting pesticides spraying within the buffer zone. A map indicating the locations of signboards and boundary markers. Memo dated 10 Nov 2014 issued to all staff, workers, contractors and smallholders on the prohibition of intrusion and pesticides spraying within the buffer zone.

Verification for closure: On site verification carried out. Verified that the appropriate corrective actions have been taken. Documents, records and photos were available to provide evidence of implementation. The corrective actions satisfactorily addressed the non-conformance.

NC status verified by auditor: Closed by OCL Date closed: 07 Jan 2015 Verification (for effectiveness): At next ASA-01

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NCR # MYNI Details of NCR Indicator MAJOR 4.6.11 Date issued: 06 Nov 2014 CFK-02 Non-conformance: On Jerangau Barat and Mengkawang estates, no medical surveillance on CHRA for the operators handling chemicals had been carried out for 2013 and 2014. Arrangement had only been made in Oct 2014 to carry out the medical surveillance, probably in Nov 2014. However, the Jerangau Barat mill had sent 15 workers for medical surveillance on 18 Oct 2014. Root Cause and Corrective Action: Estate Managers overlooked this matter

Actions taken: All pesticides operators to be sent for medical surveillance. Medical reports to be verified that no pesticides operators suffer from symptoms of pesticides poisoning. Verification for closure: On site verification carried out. Verified that all pesticides operators were sent for medical examination and tests on 14 Jan 2015. The medical certificate of fitness and report issued by the Occupational Heath Doctor (DOSH registered) dated 29 Jan 2015 confirmed that all pesticides operators do not show any symptoms of toxic reactions to pesticides and are certified fit for work with pesticides. The medical results also showed that there is no case of low blood cholinesterate levels. The corrective actions satisfactorily addressed the non- conformance. NC status verified by auditor: Closed by OCL Date closed: 07 Jan & 06 Feb 2015 Verification (for effectiveness): At next ASA-01

NCR # MYNI Details of NCR Indicator MAJOR 4.7.1 Date issued: 06 Nov 2014 CFK-03 Non-conformance: On KKS Jerangau Barat, training programme had been planned for the year 2014, but only about 25% of it had been carried out to-date.

On Jerangau Barat and Mengkawag estates, the training programme for the year had been planned but had yet to be implemented to-date. Root Cause and Corrective Action:

The management of the mill and estates had carried out the various training but could not readily provide the records as evidence.

Actions taken: Records to be made available for verification by the auditor for the following training courses: - Pesticides training (13/10/2014) - Hearing conservation (28/10/2014) - Manuring training (13/10/2014) - Fire Drill / Fire Extinguishers (18/11/2014) - Harvesting training (8/9/2014) - ERP – spillage (2/10/2014) - First aid Training (18/11/2014) - Chemicals handling (31/10/2014) - PPE usage training (8/9/2014 & 18/11/2014)

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Verification for closure: On site verification carried out. Verified that the appropriate documents, records and photos were available to indicate implementation of the corrective actions. The corrective actions satisfactorily addressed the non-conformance. NC status verified by auditor: Closed by OCL Date closed: 07 Jan 2015 Verification (for effectiveness): At next ASA-01

NCR # MYNI Details of NCR Indicator MAJOR 4.7.3 Date issued: 06 Nov 2014 CFK-04 Non-conformance: On Jerangau Barat Estate, F 10 and F 3, the FFB harvesters did not wear safety helmets although they had been provided by the Estate Management.

Root Cause and Corrective Action:

Lack of awareness of workers regarding the importance on the usage of PPE.

Actions taken: Records of issuance of PPE to estate workers and foreign workers to monitored twice a year (Jan & Jun). Directive issued to estate workers and foreign workers on the compulsory wearing of PPE during work activities at the estates. Estate Officer to conduct more frequent monitoring.

Verification for closure: On site verification carried out. Verified that the appropriate documents, records and photos were available to indicate implementation of the corrective actions. The corrective actions satisfactorily addressed the non-conformance.

NC status verified by auditor: Closed by OCL Date closed: 07 Jan 2015 Verification (for effectiveness): At next ASA-01

NCR # MYNI Details of NCR Indicator MAJOR 5.2.2 Date issued: 06 Nov 2014 OCL-01 Non-conformance: The PMU has dug trenches and erected electric fence to discourage the intrusion of wildlife such as elephants into the estates from the neighboring forest reserves. However, there was no regular patrol to monitor the situation and also there is a lack of signages that prohibit hunting and polluting activities.

Root Cause and Corrective Action:

Management had overlooked this matter.

Actions taken: Record book of monitoring patrols of estates boundaries. Signages erected on the prohibition of intrusion and hunting.

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Verification for closure: On site verification carried out. Verified that the appropriate documents, records and photos were available to indicate implementation of the corrective actions. The corrective actions satisfactorily addressed the non-conformance.

NC status verified by auditor: Closed by OCL Date closed: 07 Jan 2015 Verification (for effectiveness): At next ASA-01

NCR # MYNI Details of NCR Indicator MAJOR 6.5.3 Date issued: 06 Nov 2014 JMD-01 Non-conformance: 1. In both Felda Jerangau Barat and Felda Mengkawang estates, the records of weekly workers’ housing inspection were not maintained. Maintenance of this record is stipulated under Workers’ Minimum Standards of Housing and Amenities Act 1990 [Act 446], 23(2).

2. Sanitary condition of the workers quarters compound at Felda Mengkawang estate is not at satisfactory level. Also, rubbish from Felda Mengkawang workers quarters compound found to be not properly wrapped and placed at appropriate location for easy pick up by the assigned contractor.

Root Cause and Corrective Action:

No officer responsible for making inspection of workers’ housing.

Actions taken: Each estate has appointed an officer to be responsible for making inspection of workers’ housing. Record Book of weekly inspection of workers’ housing to be maintained and records of inspections made to be entered and checked. Clean-up campaign carried out at the foreign workers’ housing. Duty rooster for cleaning of workers’ quarters and compound.

Verification for closure: On site verification carried out. Verified that the appropriate documents, records and photos were available to indicate implementation of the corrective actions. The corrective actions satisfactorily addressed the non-conformance. NC status verified by auditor: Closed by OCL Date closed: 07 Jan 2015 Verification (for effectiveness): At next ASA-01

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3.2.2 Year 2014: Main Assessment (6 Minor NCRs)

NCR # MYNI Details of NCR Indicator Minor 4.1.3 Date issued: 06 Nov 2014 CFK-01 Non-conformance: On Jerangau Barat and Mengkawang Estates, the daily record on chemical spraying did not show the type of chemicals being used each day.

Root Cause and Corrective Action:

Management had overlooked the matter.

Actions taken: Names of chemicals used recorded in the Work Record and Bin Card. Letter of appointment of an Officer to do such recording. No. of hours worked with pesticides also recorded.

Verification for closure: On site verification carried out. Verified that the appropriate documents and records were available to indicate implementation of the corrective actions. The corrective actions satisfactorily addressed the non-conformance. NC status verified by auditor: Closed by OCL Date closed: 07 Jan 2015 Verification (for effectiveness): At next ASA-01

NCR # MYNI Details of NCR Indicator Minor 4.2.4 Date issued: 06 Nov 2014 CFK-02 Non-conformance: On Jerangau Barat Estate, F 3, EFB had been unloaded in heaps in the inter-rows and left there for more than 3 months. This is contrary to the SOP which states that EFB should be spread in 1 layer along the inter-rows.

Root Cause and Corrective Action:

Lack of monitoring by management.

Actions taken: Leveling of the EFB applied at the area concerned to a single layer (before and after photos). Training on the proper application and spreading of EFB conducted on 13/11/2014. Record of training attendance maintained. Officer shall monitor future EFB applications carried out.

Verification for closure: On site verification carried out. Verified that the appropriate documents, records and photos were available to indicate implementation of the corrective actions. The corrective actions satisfactorily addressed the non-conformance. NC status verified by auditor: Closed by OCL Date closed: 07 Jan 2015 Verification (for effectiveness): At next ASA-01

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NCR # MYNI Details of NCR Indicator Minor 4.3.2 Date issued: 06 Nov 2014 CFK-03 Non-conformance: On Jerangau Barat Estate, the planting terraces were without back incline and stop bunds along the terraces.

Root Cause and Corrective Action:

Lack of monitoring by management.

Actions taken: Placement of palm fronds to recline the terrace and for retention of water.

Verification for closure: Verified that the appropriate documents, records and photos were available to indicate implementation of the corrective actions. The corrective actions satisfactorily addressed the non-conformance.

NC status verified by auditor: Closed by OCL Date closed: 07 Jan 2015 Verification (for effectiveness): At next ASA-01

NCR # MYNI Details of NCR Indicator Minor 4.5.2 Date issued: 06 Nov 2014 CFK-04 Non-conformance: On Jerangau Barat and Mengkawang Estates, there was no record on the training of those involved in IPM implementation.

Root Cause and Corrective Action:

At the time of audit, the auditee could not readily provide the records as evidence.

Actions taken: Records and photos of IPM training would be made available for verification by the auditor: Training on Pest & Disease conducted on 13/11/2014 for workers and contractors. Training on management of barn owls conducted on 16/11/2014. Training on management/mitigation of rodents (rats) attacks conducted on 9/11/2014. Record of training attendance and report maintained.

Verification for closure: On site verification carried out. Verified that the appropriate documents, records and photos were available to indicate implementation of the corrective actions. The corrective actions satisfactorily addressed the non-conformance.

NC status verified by auditor: Closed by OCL Date closed: 07 Jan 2015 Verification (for effectiveness): At next ASA-01

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NCR # MYNI Details of NCR Indicator Minor 6.10.3 Date issued: 06 Nov 2014 JMD-01 Non-conformance: 1. Work Order (“Surat Perintah Kerja”) and contract conditions issued by the mill and estates did not specifically mention that the contractors are also required to comply with RSPO standards, esp. social standard.

2. Currently there are no procedures available for the mill and estates to monitor that the contractors awarded with specific contract works will comply with RSPO standards. Root Cause and Corrective Action:

Management had overlooked the matter.

Actions taken: Letter of Agreement issued to contractors containing the requirement for them to comply with RSPO standards. Signed copy of said letters seen. Terms on compliance to RSPO standards specified in new Work Orders. Verification for closure: On site verification carried out. Verified that the appropriate documents and records were available to indicate implementation of the corrective actions. The corrective actions satisfactorily addressed the non-conformance. NC status verified by auditor: Closed by OCL Date closed: 07 Jan 2015 Verification (for effectiveness): At next ASA-01

NCR # MYNI Details of NCR Indicator Minor 6.10.4 Date issued: 06 Nov 2014 JMD-02 Non-conformance: Although the rubbish collection contract between Felda Mengkawang Cooperative (“Koperasi Felda Mengkawang”) and the Felda Mengkawang estate has expired on 30 Apr. 2014, the Cooperative continued collecting rubbish around the settlement area without payment. There was no contract renewal as at the date of the audit.

Root Cause and Corrective Action:

Management had overlooked the matter.

Actions taken: Payment for May to Oct 2014 made to the contractor, Koperasi Felda Mengkawang. Payment voucher sighted. New contract for the period 01 Nov 2014 to 31 Oct 2015 for collection and transportation of rubbish sighted. Verification for closure: On site verification carried out. Verified that the appropriate documents and records were available to indicate implementation of the corrective actions. The corrective actions satisfactorily addressed the non-conformance. NC status verified by auditor: Closed by OCL Date closed: 07 Jan 2015 Verification (for effectiveness): At next ASA-01

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3.2.3 Year 2014: Main Assessment (3 Observations) Status RSPO Opened Closed Remark, Ref No: P&C Location Details of Observation date date if any Indicator

Obs # 4.3.3 Mengkawang On Mengkawang Estate, in F8 06 Nov To follow up CFK-01 Estate the concrete bridge crossing Sg 2014 during next Peneh only had a ridge of about surveillance 6 inches high on the sides, but without railings. Obs # 4.7.4 Mengkawang Mengkawang Estate did not have 06 Nov To follow up CFK-02 Estate record of meetings between the 2014 during next responsible persons and scheme surveillance smallholders to discuss on health, safety, and welfare. Minutes of regular meetings were available on Jerangau Barat Estate and KKS Jerangau Barat. Obs # 4.7.5 Mengkawang Record of accident had not been 06 Nov To follow up CFK-03 Estate maintained, and Form JKKP 8 2014 during next had not been sent also. surveillance

3.2.4 Identified Positive Elements 1) The PMU has provided proper infrastructure such as roads, housing and sport facilities.

2) The PMU has contributed towards the local economy and has made significant financial contributions to the local communities.

3.3 Summary of Feedback Received from Stakeholders and Findings

Intertek had obtained some written and verbal feedback from the stakeholders on the environmental and social performance of KKS Jerangau Barat Grouping operations in the course of assessment and consultations. During the Main Assessment, all pertinent feedback issues were reviewed and followed up for verification and these had been accordingly incorporated into the report findings. See table below:

Stakeholders’ Feedback PMU Response Intertek verification / Further action comment on further from PMU (if any) action (if any) Government Agencies Comunication done via email on There was no feedback / Verified during on-site No further action 17 Jul 2014. enquiries received from any assessment that there needed. See list under para 2.5. government Agencies has been no issues from No feedback received. concerning the operations of any Government the PMU. Agencies concerning the PMU’s operations. Non-Governmental

Organizations Comunication done via email on There was no feedback / Verified during on-site No further action 17 Jul 2014. enquiries received from any assessment that there needed. See list under para 2.5. NGO concerning the has been no issues from No feedback received. operations of the PMU. any NGO concerning the PMU’s operations. Local Communities On-site consultation and - feedback sesssions were held during the assessment with

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Concerns and issues raised include:  Attract unemployed youths to The PMU will examine the To be followed up during work in the estates by offering concerns and issues raised the next Annual better pay and benefits. and identify appropriate Surveillance  Improve the quality of repairs actions. Assessment. to damaged roads.  Request for an allowance for Heads of Block.  Control the breeding of cows that is occuring everywhere in the estates.  Sungai Peneh has become shallower – need to make the river deeper.  Problem of drug addicts to be communicated to the relevant authorities.  Requests for quotation were not sent to the suppliers due to re-structuring of the Regional Office.  Requests to have join neighbour watch together with Felda Security (Felsco) to take action within field compound.  Fields to actively report any activity related to drug within the community.

Positive comments include:  Satisfied with the FELDA management  Contributions given to the local communities.  No negative impacts on environment and wildlife.

Other Interested parties  Stakeholders generally Ongoing consultation, Verified during on-site No further action confirmed that the PMU has meetings and relationship assessment that the needed. taken adequate positive building with interested PMU has management measures on economic, parties will be maintained. plan for the imporvement environmental and social of social and issues. environmental needs of the local community.

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4.2 Intertek RSPO Certificate details for KKS Jerangau Barat Grouping Certificate No: RSPO 930388 Issue date: Pending Certification Decision Expiry date: Pending Certification Decision Organization Felda Global Ventures Plantations (Malaysia) Sdn Bhd Address of Head Office: Felda Global Ventures Plantations (Malaysia) Sdn Bhd (FGVPM), Plantation Sustainability and Quality Management (PSQM) Department, Menara Felda Platinum Park, Level 20 No 11 Persiaran KLCC, 50088 Kuala Lumpur, Malaysia. RSPO Membership No: 1-0013-04-000-00 Plantation Management Unit: KKS Jerangau Barat Grouping Address of POM: Kilang Sawit Jerangau Barat, Peti Surat No. 257, 25730, Ajil, Terengganu Darul Iman, Malaysia Standards: RSPO Principles and Criteria (Apr 2013); Malaysian National Interpretation (Nov 2010); RSPO Supply Chain Certification Standards (Nov 2011) for the Palm Oil Mill. Certification scope: Production of Crude Palm Oil and Palm Kernels Supply Chain model for Mass Balance CPO & PK:

Details of the Mill and Supply bases covered by this certificate are: GPS Reference Name Address Latitude Longitude Jerangau Barat POM Kilang Sawit Jerangau Barat, Wakil Pos Felda Jerangau, 21820 , Ajil, Terengganu Darul Iman, 4°54'58.00"N 103° 8'7.00"E (Capacity:40 MT/hour) Malaysia FELDA Mengkawang Felda Mengkawang, 21800 Ajil, Terengganu 4°53'42.00"N 103° 1'22.00"E estate Darul Iman, Malaysia Felda Tersat ,Pejabat Pos Ajil, 21800, Ajil, FELDA Tersat estate 5° 4'31.00"N 102°59'54.00"E Terengganu Darul Iman, Malaysia FELDA/FTP Jerangau Felda Jerangau Barat, 21820, Ajil, Terengganu 4°55'28.00"N 103° 6'55.00"E Barat estate Darul Iman, Malaysia

The annual certifiable tonnages of CPO and PK production by KKS Jerangau Barat Grouping from the supply base/suppliers as assessed and verified during the current Main Assessment and projected year are detailed as follows:

Jan – Dec 2013 Jan – Dec 2014 Jan – Dec 2015 POM - Actual - Actual + Projected - Projected Total Certifiable FFB 14,313.34 23,671.53 44,002.62 Processed (MT)

Total Certifiable CPO % OER: % OER: % OER: 2,891 4,954 9,197 Production (MT) 20.20 20.93 20.90 Total Certifiable PK % KER: % KER: % KER: 777 1,281 2,398 Production (MT) 5.43 5.41 5.45

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Appendix A:

Qualifications of Lead Assessor and Assessment Team

Dr. Ooi Cheng Lee (OCL) Lead Assessor / Technical Expert (Palm Oil Mill, Environment, OHSAS, Social, HCV, Land Use and Supply Chain) - PhD in Welding, Cranfield University, UK - M.Sc. (Engineering) in Metallurgy, University of Birmingham, UK - B.App.Sc (Hons), Science University of Malaysia - Diploma in Translation for Science and Technology, Malaysia Translation Society

Dr. Ooi Cheng Lee is an IRCA Lead Auditor and Lead Tutor for ISO 9001. He is also involved in auditing in other integrated management systems. He has successfully completed the RSPO Lead Assessor Course for Principles and Criteria (RSPO P&C) and the RSPO Supply Chain Certifications (RSPO SCC). He is currently involved in the management of all types of system and process/product certification in Intertek. He has more than 32 years work experience in product and process specifications, research & development, inspection and testing, quality assurance, engineering development, training, product certification, auditing and quality management system certification. He has conducted assessments of organizations in Malaysia, Singapore, Indonesia, Vietnam, Philippines, China, Myanmar, Cambodia and other regional countries. Assessments include those of rubber and oil palm plantations in Malaysia and Indonesia. His previous position as the General Manager of Lloyd’s Register Quality Assurance (LRQA) Malaysia include the management of all types of systems certification, including that of environmental (ISO 14001), safety & health (OHSAS 18001) and Clean Development Mechanisms (CDM). He is currently the General Manager in Intertek Certification International Sdn. Bhd. He is a member of the Internal Review Panel for RSPO Assessment reports since May 2011. He is part of the RSPO CB Assessment team which audited RSPO certified Plantation Management Units since 2012.

Mr. Chen Fai Kok (CFK) – Assessor / Technical Expert (Good Agriculture Practice and Integrated Pest Management) – Diploma in Agriculture

Mr. Chen Fai Kok has over 30 years work experience in the plantation sector. He has held a Senior Management role in the estate field operations including GAP and IPM. He had also served as the Branch Chairman of the Incorporated Society of Planters (ISP) in several branches for over 20 years. He has successfully completed training in Estate Management and the Intertek In House RSPO P&C, MYNI and Cambodian LI Assessor courses. He is a member of the RSPO CB Assessment team which audited RSPO certified Plantation Management Units since 2009.

Mr. Jumat Majid – Assessor – Social Responsibility and Workers Welfare – BSc (Social Science) Mr Jumat Majid (JM) has over 13 years work experience in the agriculture sector. He has successfully completed the IRCA accredited Lead Auditor course in ISO 9001:2008 and RSPO P&C MY-NI Lead Assessor course. He has also successfully completed training programs in Organic Agriculture Development and had performed organic agriculture inspections and assessments for more than 6 years. He has been involved in NGO work in the areas of social impact assessments within the South East Asia region. He is a member of the RSPO CB Assessment team which audited RSPO certified Plantation Management Units since 2010.

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Appendix B: Assessment Plan (Actual)

Date Time Assessors and Assessment Activity Asssessment Team 03/11/2014 7.00 am – Travel to KKS Jerangau Barat grouping Palm Oil Mill (POM) Office Day 1 10.00 am 10.00 am – Opening Meeting and Briefing at KKS Jerangau Barat grouping POM Office 10.30 am (to be attended by representatives from the Estates as well) 10.30 am – Document Review and Assessment by all Assessors on respective RSPO P&C:1 to 8 at POM 12.30 pm OCL CFK JMD Site assessment at Palm Oil Site assessment at Palm Oil Site assessment at Palm Oil Mill Mill Mill  P1 Transparency  P4 Best Practices at Mill  P6 Employees, Individuals  P2 Laws & regulations  P8 Continual Improvement & Communities incl.  P3 Economic & Financial Gender Issues Viability  P8 Continual Improvement  Review of changes for compliance to revised P&C 2013  Review of Time Bound Plan  Verification for compliance with rules on partial certification 12.30 pm – Lunch Break 1.30 pm 1.30 pm – OCL CFK JMD 5.00 pm Continue Site assessment at Continue Site assessment Continue Site assessment Palm Oil Mill at Palm Oil Mill at Palm Oil Mill  P5 Environmental,  P4 Best Practices at Mill  P6 Employees, Individuals Conservation, including HCV  P8 Continual Improvement & Communities incl.  P8 Continual Improvement Gender Issues  P8 Continual Improvement 5.00 pm – Travel to Hotel & Break 6.00 pm 6.00 pm – Team Meeting and Discussion 7.00 pm

Date Time Assessors and Assessment Activity 04/11/2014 8.30 am – OCL CFK JMD Day 2 12.30pm Site assessment at FELDA Site assessment at Site assessment at Mengkawang estate FELDA/FTP Jerangau Barat FELDA/FTP Jerangau Barat  P1 Transparency estate estate  P2 Laws & regulations  P4 Best Practices at  P6 Employees, Individuals  P3 Economic & Financial Estates & Communities incl. Gender Viability  P7 New Plantings Issues  P5 Environmental,  P8 Continual Improvement  P8 Continual Improvement Conservation, including HCV  P8 Continual Improvement 12.30 pm – Lunch Break 1.30 pm 1.30 pm - Continue site assessment at Continue site assessment Continue site assessment at 5.00 pm FELDA Mengkawang estate at FELDA/FTP Jerangau Barat FELDA/FTP Jerangau Barat estate estate 5.00 pm – Travel to Hotel & Break 6.00 pm 6.00 pm – Team Meeting and Discussion 7.00 pm

Date Time Assessors and Assessment Activity 05/11/2014 8.30 am – OCL CFK JMD Day 3 12.30pm Site assessment at Site assessment at FELDA Site assessment at FELDA FELDA/FTP Jerangau Barat Mengkawang estate Mengkawang estate estate  P4 Best Practices at  P6 Employees, Individuals  P1 Transparency Estates & Communities incl. Gender

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 P2 Laws & regulations  P7 New Plantings Issues  P3 Economic & Financial  P8 Continual Improvement  P8 Continual Improvement Viability  P5 Environmental, Conservation, including HCV  P8 Continual Improvement 12.30 pm – Lunch Break 1.30 pm 1.30 pm - Continue site assessment at Continue site assessment at Continue site assessment 5.00 pm FELDA/FTP Jerangau Barat FELDA Mengkawang estate at FELDA Mengkawang estate estate 5.00 pm – Travel to Hotel & Break 6.00 pm 6.00 pm – Team Meeting and Discussion 7.00 pm

Date Time Assessors and Assessment Activity 06/11/2014 9.00 am – OCL CFK JMD Day 4 11.00pm Site assessment at KKS Stakeholders’ Consultation on the following categories (see Jerangau Barat grouping Notes 1 and 2 below): Palm Oil Mill  Contractors  Supply Chain for POM  Suppliers (SCCS)  Transporters  NGOs  Government Department / Agencies  Local Community  Settlers, in the case of independent and organized smallholders.

Notes 1. It is mandatory for the PMU to inform Intertek and provide the information (as a minimum the no. of stakeholders in each applicable category and contact number) on the stakeholders prior to the assessment.

2. This will facilitate the random and impartial selection of stakeholders (including independent and organized smallholders, where applicable) and to meet the sample size requirement. 11.00 am – Site assessment at KKS Jerangau Barat grouping POM or estates to follow up on any 12.30pm specific criteria/areas 12.30 pm – Lunch Break 1.30 pm 1.30 pm –

3.00 pm Preparation for Closing Meeting 3.00 pm – Team Meeting and Discussions with KKS Jerangau Barat grouping Management Representative 3.30 pm 3.30 pm – Closing Meeting & Briefing at Palm Oil Mill Office 4.30 pm

INTERTEK CERTIFICATION INTERNATIONAL SDN BHD (188296-W)

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Appendix C-1:

Location of Felda Gobal Ventures Plantations (Malaysia) Sdn Bhd (FGVPM) - KKS Jerangau Barat Grouping, Ajil, Terengganu Darul Iman, Malaysia

Felda Jerangau Barat

INTERTEK CERTIFICATION INTERNATIONAL SDN BHD (188296-W)

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Appendix C-2-1: FELDA Mengkawang Estate

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Appendix C-2-2: FELDA Tersat Estate

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Appendix C-2-3: FELDA / FTP Jerangau Barat Estate

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Appendix D:

Photographs of Assessment Findings at KKS Jerangau Barat Grouping

Jerangau Barat POM: Site for the new 40 tonne boiler. Jerangau Barat Estate: F 802- Buffer zone boundary was demarcated at 5 metres from the river bank of Sg. Jemeluk, which should have been at least 10 metres from the river bank.

Jerangau Barat Estate: F 3- EFB left in the inter-rows for Jerangau Barat Estate: F 3- Scheme smallholder not more than 3 months, not spread to one layer. wearing safety helmet when doing harvesting operation.

Mengkawang Estate: F 9- First aid kits with the Mengkawang Estate: F 9- Harvesters with full PPE harvesting mandore. doing harvesting operation.

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Appendix E:

Time Bound Plan as submitted by FGVPM (updated in Aug 2014)

No Mill complexes to be audited in the respective year 2009 2010 2011 2012 2013 2014 2015 2016 1. K.Gelanggi Jengka Adela Belitong Palong Neram Krau 21 Timor 2. L. Utara 6 Jengka Lok Heng Bukit Serting Hilir Panching Tersang 3 Besar 3. Jengka Semencu Kahang Maokil Besout Serting 8 4. L. Utara Waha Kulai Tenggaroh Trolak Pasoh 4 5. Jengka B. Nitar T.Timor Keratong 2 Cini 2 18 Kepayang 6. Padang Bukit Penggeli Kechau A Keratong 3 Cini 3 Piol Mendi 7. Kemasul Lepar Kechau B Sg. Kemahang Hilir Tengi 8. Tementi Bukit Fajar Keratong 9 Chalok Sagu Harapan 9. Triang Baiduri Mempaga Aring A Ayu 10. Embara. Aring B Budi 11. Lancang. Kertih Kemudi 12. Kalabakan Selendang

13. Umas Ciku

14. Kemudi. Sampadi Sakti 15. Mercu Puspita 16. Nilam Permata 17. Hamparan Badai 18. Jerangau Barat 19. Jerangau Baru 20. Selancar 2A 21. Selancar 2B New 2 6 9 9 9 21 14 Total 2 8 17 26 35 56 70

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