RSPO Principles & Criteria Main Surveillance Assessment Report Report Number CU827183

RSPO PRINCIPLES & CRITERIA PUBLIC SUMMARY REPORT MAIN ASSESSMENT

KUALA LUMPUR KEPONG BERHAD TANJONG MALIM POM 2013

Report prepared by: Simon Selvaraj (Lead Assessor) Certification decision by: Hari Naveen Christopher (Certifier) Certifying Office Control Union (Malaysia) Sdn. Bhd. 150-A, 1st Floor, Persiaran Raja Muda Musa, Off Jalan Sg Bertih, Teluk Gadong, 41100 Klang, Selangor, Malaysia [email protected] Tel: +603-3377 1600 / 1700

Control Union Certifications Control Union Certifications is a member of the Control Union World Group - an international inspection and certification body. CUC performs assessments and certification in many agricultural based fields such as FSC, RSPO, and Organic production, Sustainable Textile Production, Organic Exchange, GLOBALGAP, HACCP, BRC, GMP and GTP.

CUC is accredited by the Dutch Council of Accreditation (RVA) on the European quality standard EN 45011 for the inspection and certification of CUC Organic program (according to the EU regulation 2092/91) and GLOBALGAP program. When requested a copy of the accreditation certificate can be obtained from CUC. RSPO Membership Number 8-0025-06-000-00 RSPO Approval Date 12/01/2006 Affiliate Membership http://www.rspo.org/en/member/339

RSPOPC-SUM-REPORT.F01 JULY2013 Page 1 of 34 Control Union (Malaysia) Sdn. Bhd. 150-A, 1st Floor, Persiaran Raja Muda Musa, Off Jalan Sg Bertih, Teluk Gadong, 41100, Klang, Selangor. Malaysia. Tel: +603-3377 1600 / 1700

RSPO Principles & Criteria Main Surveillance Assessment Report Report Number CU827183

Table of Contents PART 1: SCOPE OF THE CERTIFICATION ASSESSMENT AUDIT ...... 4

1.1 COMPANY AND CONTACT DETAILS ...... 4 1.2 RSPO MEMBERSHIP & CERTIFICATION DETAILS ...... 4 1.3 MAIN ASSESSMENT DETAILS ...... 4 1.4 ASSESSMENT TYPE ...... 4 1.5 LOCATION OF THE PALM OIL MILL ...... 4 1.6 PALM OIL MILL OUTPUT AND APPROXIMATE TONNAGES CERTIFIED ...... 4 1.7 GENERAL DESCRIPTION OF SUPPLY BASE ...... 5 1.7.1 Location of the Supply Base...... 5 1.7.2 Statistics of the Supply Base and Estimated Tonnes of FFB produced per year ...... 5 1.7.3 Percentage of Planted Oil Palm by different Age Ranges ...... 5 1.7.4 Calculation of the Number of Production Units (N) to Sample for the Mill ...... 5 1.8 PROGRESS OF ASSOCIATED SMALLHOLDERS OR OUT-GROWERS, IF APPLICABLE TO THIS ASSESSMENT ...... 5 1.9 LOCATION MAP FOR THIS CERTIFICATION UNIT (SEE APPENDIX 1) ...... 5 PART 2: PARTIAL CERTIFICATION ...... 6

2.1 MANAGEMENT STRUCTURE...... 6 2.2 NON-COMPLIANCE IDENTIFIED WITH 2.1 ABOVE ...... 6 2.3 SUMMARY OF THE TIME BOUND PLAN ...... 6 2.4 UN-CERTIFIED UNITS OR HOLDINGS...... 7 2.5 SUMMARY OF THE FINDINGS FOR PARTIAL CERTIFICATION ...... 10 2.6 PARTIAL CERTIFICATION AUDIT AGENDA...... 10 PART 3: AUDIT PROCESS...... 11

3.1 ABOUT THE CERTIFICATION BODY ...... 11 3.2 AUDIT TEAM ...... 11 3.2.1 Qualifications of the Lead Auditor ...... 11 3.2.2 Qualifications of the Assessment Team...... 12 3.3 AUDIT METHODOLOGY ...... 13 3.3.1 General Overview ...... 13 3.3.2 Assessment agenda for this Audit ...... 13 PART 4 ASSESSMENT FINDINGS ...... 15

4.1 LEAD ASSESSOR’S SUMMARY AND RECOMMENDATION FOR CERTIFICATION ...... 15 4.2 SUMMARY OF THE FINDINGS BY PRINCIPLES AND CRITERIA ...... 15 Principle 1: Commitment to Transparency ...... 15 Principle 2: Compliance with Applicable Laws and Regulations ...... 16 Principle 3: Commitment to Long-Term Economic and Financial Viability ...... 16 Principle 4: Use of Appropriate Best Practices by Growers and Millers ...... 16 Principle 5: Environmental Responsibility and Conservation of Natural Resources and Biodiversity ...... 18 Principle 6: Responsible Consideration of Employees and of Individuals and Communities by Growers and Millers ...... 19 Principle 7: Responsible Development of New Plantings ...... 21 Principle 8: Commitment to Continuous Improvement in Key Areas of Activity ...... 21 4.3 NON-CONFORMITY RAISED DURING THIS AUDIT AND ANY FROM THE PREVIOUS YEAR, IF APPLICABLE ...... 21 4.4.1 Non-Conformities Identified during this Audit ...... 21 4.4.2 Observations Raised During this Audit ...... 28 Non noted during this audit ...... 28 4.4.3 Non-Conformity Identified during the last ASA ...... 28 4.4 ISSUES THAT WERE RAISED DURING THE STAKEHOLDER CONSULTATION, IF ANY ...... 28 PART 5: RSPO SUPPLY CHAIN CERTIFICATION ...... 30

5.1 POM INCLUDED IN THE SCOPE OF THE AUDIT ...... 30 5.2 CONFIRMATION OF THE COMPANY’S SUMMARY OF ANNUAL CERTIFIED VOLUME OF RSPO CERTIFIED PALM OIL AND PALM KERNEL OVER A SPECIFIED PERIOD ...... 30 5.3 SUMMARY REPORT INCLUDING A BRIEF DESCRIPTION OF THE SCOPE OF CERTIFICATION ...... 30 5.4 MONTHLY RECORDS OF CERTIFIED AND UNCERTIFIED FFB RECEIVED SINCE THE LAST AUDIT ...... 30 5.5 MONTHLY RECORDS OF CERTIFIED CPO AND PK PRODUCED SINCE THE LAST AUDIT ...... 30 5.6 RECORDS OF CERTIFIED CPO & PK SOLD UNDER GREENPLAM TO BUYERS SINCE THE LAST AUDIT, IF ANY ...... 30 5.7 RECORDS OF CERTIFIED CPO & PK SOLD UNDER UTZ ETRACE TO BUYERS SINCE THE LAST AUDIT, IF ANY ...... 30 5.8 NON-CONFORMITIES IDENTIFIED DURING THIS AUDIT ...... 30 RSPOPC-SUM-REPORT.F01 JULY2013 Page 2 of 34 Control Union (Malaysia) Sdn. Bhd. 150-A, 1st Floor, Persiaran Raja Muda Musa, Off Jalan Sg Bertih, Teluk Gadong, 41100, Klang, Selangor. Malaysia. Tel: +603-3377 1600 / 1700

RSPO Principles & Criteria Main Surveillance Assessment Report Report Number CU827183

5.9 DESCRIPTION OF THE ORGANIZATIONAL MANAGEMENT SYSTEMS...... 31 5.10 FINAL CERTIFICATION DECISION BY CONTROL UNION FOR THE RSPO SCCS AUDIT OF THE POM ...... 31 PART 6: CERTIFIED ORGANISATION’S ACKNOWLEDGEMENT OF INTERNAL RESPONSIBILITY ...... 32

6.1 DATE OF NEXT ASA ...... 32 6.2 DATE FOR CLOSURE OF NON-CONFORMITIES ...... 32 6.3 SIGNING BY THE CLIENT ...... 32 6.4 SIGNING BY THE LEAD AUDITOR ...... 32 6.5 SIGNING BY THE CERTIFIER ...... 32 PART 7: APPENDICIES ...... 33

APPENDIX 1: LOCATION MAP FOR THIS CERTIFICATION UNIT ...... 33 APPENDIX 2: LIST OF ABBREVIATIONS ...... 34

RSPOPC-SUM-REPORT.F01 JULY2013 Page 3 of 34 Control Union (Malaysia) Sdn. Bhd. 150-A, 1st Floor, Persiaran Raja Muda Musa, Off Jalan Sg Bertih, Teluk Gadong, 41100, Klang, Selangor. Malaysia. Tel: +603-3377 1600 / 1700

RSPO Principles & Criteria Main Surveillance Assessment Report Report Number CU827183

PART 1: SCOPE OF THE CERTIFICATION ASSESSMENT AUDIT

1.1 Company and Contact Details Company Name: Kuala Lumpur Kepong Berhad Business Address: 1, Jalan S. P. Seenivasagam, 30000 Ipoh, Perak. Contact Person: Kuala Lumpur Kepong Berhad Office Telephone: Mr Sin Chuan Eng E-Mail: +6052417844 Web Site: +6052535018 Other Certifications Held: [email protected]

1.2 RSPO Membership & Certification Details RSPO Membership Number: 1-0014-04-000-00 Registered Client Name: Kuala Lumpur Kepong Berhad Certificate Number: C827183U-RSPO-01.2013 Start Date Of Certificate: 19th November 2013 End Date Of Certificate: 18th November 2018 Date Of Original Certification: 19th November 2013 Scope: Certification of the Palm Oil Mill and Supply Bases Type Of Certification: Single site Duration Of Certificate: 5 Years from date of certification

1.3 Main Assessment Details Dates Of This Audit: 21st – 23rd January 2013 Audit Number: Main Assessment (1)

1.4 Assessment Type This RSPO Principles &Criteria main assessment covers the palm oil mill, KLK Tanjong Malim and its supply base. The supply base for this assessment is coming from 5 estates, named Changkat Asa Estate, Kerling Estate, Sungai Gapi Estate, Bukit Kartho Estate, and Kampar Estate as described below.

1.5 Location of the Palm Oil Mill Name Mill Location GPS Reference Palm Oil Mill Capacity (POM) MT/Hour Address Longitude Latitude Beg Berkunci No 3, 35909 Tanjong Tanjong Malim POM 20 E 101°29.145" N 3° 41.700" Malim, Perak

1.6 Palm Oil Mill Output and Approximate Tonnages Certified Figures below are from:  Only from certified supply bases (Y/N). YES  Combining certified with uncertified supply bases (Y/N). NO  If the Mill is receiving FFB from uncertified supply bases outside the audit scope, such uncertified sources is highlighted under the following sections as seen applicable: a. PART 1, Section 1.7 – General Description of Supply Base, b. PART 2: Partial Certification, Section 2.4 – Uncertified Units or Holdings, c. PART 5: RSPO Supply Chain Certification of this report Projected Production from the Actual Production for this Audit Year Projected 12 Months (MT) last 12 Months (MT) 2012/13(MT) Forecast Certified in this Report FFB CPO PK FFB CPO PK FFB CPO PK ------77,000 25,200 6,000

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RSPO Principles & Criteria Main Surveillance Assessment Report Report Number CU827183

1.7 General Description of Supply Base The company owns Tanjong Malim POM and its 5 supply bases. However, the company is also receiving FFB from non- associated independent smallholders. See table below. 1.7.1 Location of the Supply Base Oil Palm Area Summary Location GPS reference OPP Plantation (Ha) Name Address Longitude Latitude Total Mature Ladang Changkat Asa, 35900 OPP1 Changkat Asa Estate E 100° 29’ 34.7” N 3° 41’ 3.0” 1,278 1,278 Hulu Bernam, Selangor Ladang Kerling, Peti Surat OPP2 Kerling Estate E 101° 20' 24" N 3° 20' 23.99" 221 221 202, 44109 Kerling, Selangor KM 62, Jalan KL-Ipoh, 44100 OPP3 Sungai Gapi Estate E 101° 36' 35.99" N 3° 34' 11.99" 267 267 Kuala Kubu Bharu, Selangor Ladang Bukit Katho, 35500 OPP4 Bukit Kartho Estate E 101° 20' 11.58" N 4° 4' 51.491" 482 460 Bidor, Perak Darul Ridzuan 90, Jalan Tronoh Mines, Kampar Estate E 101 °6' 0" N 4° 16' 0" 708 708 OPP 5 31910 Kampar, Perak Total 2,956 2,934

1.7.2 Statistics of the Supply Base and Estimated Tonnes of FFB produced per year OPP Oil Palm Plantation Estimated FFB/Year (MT) Planting Years Cycle (Years) OPP1 CHANGKAT ASA ESTATE 33,910 1987-2010 25 OPP2 KERLING ESTATE 5,093 2003-2005 25 OPP3 SG GAPI ESTATE 7,087 1997-2000 25 OPP4 BUKIT KARTHO ESTATE 9,579 1984-2004 25 OPP 5 KAMPAR ESTATE 21,195 1984-2000 25 TOTAL 76,862

1.7.3 Percentage of Planted Oil Palm by different Age Ranges Planting years by 5 year ranges (Ha) CU Code Pre 1990 1991~1995 1996~2000 2001~2005 2006~2010 2011~2015 Total (ha) OPP 1 180 271 451 177 199 0 1278 OPP 2 0 0 0 221 0 0 221 OPP 3 19 0 355 206 0 0 580 OPP 4 77 78 110 44 0 95 404 OPP 5 285 132 134 0 0 157 708

1.7.4 Calculation of the Number of Production Units (N) to Sample for the Mill N = 0.8√Y, where “Y” is the number of units, with the result always to be rounded “up” to the next whole integer. Where only a sample of the supply base is assessed, units not previously assessed, or assessed earlier in the certification program, are to be preferred over those more recently assessed For the Mill, how many units make up the production base? Owned estates (Y) N = 0.8√Y Smallholders (Z) N = 0.8√Z 5 2 0 0 Explanation as to the selection of estates sampled Total supply bases are per listed above table 1.7.1 is 5, and square root of 5 is 2.

1.8 Progress of associated Smallholders or Out-growers, if applicable to this assessment Progress of associated Smallholders or Out-growers towards Compliance with relevant Standards - should be in accordance to the 3 year implementation plan, if applicable to this assessment There are no associated smallholder or out grower (Not applicable for this audit). However, the mill is accepting crops from independent smallholders. Under SCCS verification, this mill is classified under the Mass Balance (MB) model since it is receiving outside crops.

1.9 Location Map for this Certification Unit (See Appendix 1) RSPOPC-SUM-REPORT.F01 JULY2013 Page 5 of 34 Control Union (Malaysia) Sdn. Bhd. 150-A, 1st Floor, Persiaran Raja Muda Musa, Off Jalan Sg Bertih, Teluk Gadong, 41100, Klang, Selangor. Malaysia. Tel: +603-3377 1600 / 1700

RSPO Principles & Criteria Main Surveillance Assessment Report Report Number CU827183

PART 2: PARTIAL CERTIFICATION The rules for partial certification allow organizations that have a majority holding in and / or management control of more than one autonomous company growing oil palm to certify individual management units and / or subsidiary companies subject to certain rules.

2.1 Management Structure Section Criteria Yes/No If “Yes” If “No” 2.1.1 Is the certified operation (POM and supply base as No Section 2 is Go to 2.1.2 detailed above) a stand-alone operation and there are N/A no other plantations or mills owned by the same company? 2.1.2 Is the certified operation part of a simple structure of Yes Go to 2.1.5 Go to 2.1.3 operations owned by one company? 2.1.3 Are there statements of the ultimate controlling N/A Go to 2.1.4 Go to 2.2.1 shareholders and directors in the managing agency company/companies: a. Explaining the legal relationship and the management arrangements with the subsidiary companies and / or with any operating groups? 2.1.4 b. A statement of commitment to complying with the Yes Go to 2.4 Go to 2.2.2 spirit of the RSPO for all companies and subsidiaries involved with the growing of oil palm and for the production of palm oil? 2.1.5 Is there a time bound plan in place for all subsidiaries, Yes Go to 2.3 2.2.3 estates and palm oil mills? 2.1.6 Is the parent company or one of its majority owned and / Yes or managed subsidiaries a member of RSPO.

2.2 Non-compliance Identified with 2.1 Above Section Non-compliance findings NC raised Category 2.2.1 There is no explanation as to the company’s structure and therefore it - Major Is not possible to conduct an effective audit against the rules for partial certification. 2.2.2 There is no statement of commitment to complying with the spirit of - Major the RSPO for all companies within the company structure. 2.2.3 There is no time bound plan in place for the certification for all - Major subsidiaries, estates and mills. 2.2.4 No applicable membership of the RSPO. - Major

2.3 Summary of the Time Bound Plan Section Requirement Findings and any action required Compliance 2.3.1 Does the plan include all subsidiaries, All subsidiaries, estates and mills are YES estates and mills? included. 2.3.2 Is the time bound plan challenging? A revision has taken place since there was an Minor  Age of plantations. isolated lapse in implementation of the plan  Location. which a NC was raised during Lahad Datu  Mill development. region assessment. Therefore, the plan was  Infrastructure. reviewed to fit to their initial goal and there  Compliance with applicable law. are some new inclusions to be certified. Revised time bound plan as attached below. 2.3.3 Have there been any changes since the The time bound plan has been thoroughly YES last audit? Are they justified? reviewed by the company and the areas of the estates that have rubber, are highlighted RSPOPC-SUM-REPORT.F01 JULY2013 Page 6 of 34 Control Union (Malaysia) Sdn. Bhd. 150-A, 1st Floor, Persiaran Raja Muda Musa, Off Jalan Sg Bertih, Teluk Gadong, 41100, Klang, Selangor. Malaysia. Tel: +603-3377 1600 / 1700

RSPO Principles & Criteria Main Surveillance Assessment Report Report Number CU827183

with (*) on below time bound plan. There are 4 units has been pushed for certification for the next following year which the year is highlighted in red. 2.3.4 If there have been changes, what Due to the isolated lapses in the YES circumstances have occurred? implementation the company made the adjustment to realize the targeted achievement. 2.3.5 Have there been any stakeholder No comments received regarding other units YES comments? as of this audit period. However, comments received for this unit which undergone main assessment has been captured below. 2.3.6 Have there been any newly acquired The company has recently signed an MOU YES subsidiaries? with the seller prior to the official acquisition of 40,000 Ha in Papua New Guinea which is still under due diligence. 2.3.7 Have there been any isolated lapses in This delay causes the isolated lapses in the YES the implementation of the plan? implementation for the targeted year of 2012 which had led to raise a Minor NC in previous assessment conducted at Lahad Datu Region. 2.3.8 Has there been any systematic failure to With the revised time bound plan, the actual YES proceed with the implementation of the implementation effectiveness will be plan? reviewed within the next surveillance assessment of any unit. 2.3.9 General statement as to progress made The company is now on target to have all YES since the last audit: their properties audited and / or certified by the end of 2015.

2.4 Un-Certified Units or Holdings NOTE: Companies may demonstrate compliance by clear evidence of a self-audit (i.e. an internal audit for all subsidiaries, estates and Palm Oil Mills) Section Requirement Findings and any action required 2.4.1 Did the company Positive assurance statement provided are still same as of year 2011, conduct an internal which does not include the new mill found in the revised time bound audit? If so, has a plan. Furthermore, insufficient records to demonstrate that the internal positive assurance audit has took place for all its subsidiaries. This is raised as minor non- statement been compliance. produced? 2.4.2 No replacement after The company has conducted HCV assessment by Jump Consulting in dates defined in NIs January – February 2012 for all subsidiaries where the assessment report Criterion 7.3 of: confirms that there was no replacement of primary forest or containing  Primary forest. HCV. The new mills and newly acquired land are still under consultant  Any area identified preliminary report. as containing High Conservation Values (HCVs).  Any area required to maintain or enhance HCVs in accordance with RSPO criterion 7.3. 2.4.3 Any new plantings since No new planting reported for existing units. However, the newly acquired January 1st 2010 must lands will adhere to the NPP procedures when it is ready. comply with the RSPO RSPOPC-SUM-REPORT.F01 JULY2013 Page 7 of 34 Control Union (Malaysia) Sdn. Bhd. 150-A, 1st Floor, Persiaran Raja Muda Musa, Off Jalan Sg Bertih, Teluk Gadong, 41100, Klang, Selangor. Malaysia. Tel: +603-3377 1600 / 1700

RSPO Principles & Criteria Main Surveillance Assessment Report Report Number CU827183

New Plantings PT Anugerah Surya Mandiri, which was acquired last year, is planned for Procedure. NPP in near future. 2.4.4 Any Land conflicts are SIA conducted reported that there are land conflicts at some of the being resolved through uncertified units and the company is handling through FPIC and grievance a mutually agreed procedures. process, e.g. RSPO Grievance procedure or PT Karya Makmur Abadi – 2000Ha and PT Riau – 2,554Ha under dispute. Dispute Settlement Facility, in accordance with RSPO criteria 6.4, 7.5 and 7.6. 2.4.5 Any Labor disputes are None noted. No stakeholder comments or complaints received. being resolved through a mutually agreed process, in accordance with RSPO criterion 6.3. 2.4.6 Any Legal non- None noted. No stakeholder comments or complaints received. compliance is being resolved in accordance with the legal requirements, with reference to RSPO criteria 2.1 and 2.2.

TIME BOUND PLAN FORECAST FOR RSPO CERTIFICATION OF ALL PALM OIL MILLS & SUPPLY BASES Supply Bases (estates, Targeted RSPO Current Certification Palm Oil Mill Country plantations, associations) Certification Year Status as per this Audit Kebun Malindomas Berau, Kaltim, Perkebunan Berau 1 POM By 2014 Pending Indonesia Kebun Hutan Hijau Mas Kebun Jabontara Ekakarsa Steelindo Belitung, Kebun Steelindo Wahana Wahana By 2013 Pending Indonesia Perkasa Perkasa POM Kebun Parit Sembada Parit Sembada Belitung, Kebun Alam Karya By 2014 Pending POM Indonesia Sejahtera Riau, Mandau POM Sumatera, Kebun Mandau Oct 2012 Certified Indonesia Riau, Nilo 1 POM Sumatera, Kebun Nilo Timur By 2013 Pending Indonesia Riau, NIlo 2 POM Sumatera, Kebun Nilo Barat By 2013 Pending Indonesia Audited on 17/12- Riau, Tapung Kanan Kebun Sekarbumi 21/12/2012 and Sumatera, By 2013 POM Alamlestari waiting for certification Indonesia process Langkat, Kebun Basilam Gohor Lama Sumatera Kebun Gohor Lama By 2014 Pending POM Utara,

Indonesia RSPOPC-SUM-REPORT.F01 JULY2013 Page 8 of 34 Control Union (Malaysia) Sdn. Bhd. 150-A, 1st Floor, Persiaran Raja Muda Musa, Off Jalan Sg Bertih, Teluk Gadong, 41100, Klang, Selangor. Malaysia. Tel: +603-3377 1600 / 1700

RSPO Principles & Criteria Main Surveillance Assessment Report Report Number CU827183

Langkat, Kebun Padang Brahrang Padang Sumatera Kebun Bukit Lawang By 2014 Pending Brahrang POM Utara, Kebun Tanjung Keliling Indonesia Pelam Estate Serdang, Audited on Q1, 2013 Batu Lintang Batu Lintang Estate Kedah, By 2013 and waiting for POM Subur Estate Malaysia certification process Buntar Estate Landak Estate Kekayaan Estate Voules Estate Sg Penggeli Estate Paloh, Johor, New Pogoh Estate Kekayaan POM Oct 2011 Certified Malaysia Fraser Estate Paloh Estate Sg Bekok Estate Ban Heng Estate See Sun Estate 100% independent Paloh, Johor, smallholders, not to be Paloh POM N/A N/A Malaysia included in the scope of the certification Ayer Hitam Estate Batang Jelai Estate Jeram Padang Estate Bahau, Negeri Kombok Estate Jeram Padang Sembilan, Ulu Pedas Estate Sept 2012 Certified POM Malaysia Sg Pertanian Estate Sg Kawang Estate Renjok Estate Tuan Estate Tanjung Changkat Asa Estate Audited on 21/1- Tanjung Malim Malim, Perak, Kerling Estate By 2013 23/1/2013 and waiting POM Malaysia Sg Gapi Estate for certification process Audited on 22/10- Sungai Buloh, 25/10/2012 and Tuan Mee POM Selangor, Tuan Mee Estate By 2012 waiting for certification Malaysia process Kuala Krai, Kerilla Estate Kuala Pertang Kelantan, Pasir Gajah Estate By 2013 Pending POM Malaysia Sg Sokor Estate Lekir Estate Changkat Chermin Estate Audited on 26/11- Manjung. Raja Hitam Estate Changkat 30/11/2012 and Perak, Glenealy Estate By 2012 Chermin POM waiting for certification Malaysia Serapoh Estate process Kuala Kangsar Estate Allagar Estate 100% independent Tawau, smallholders, not to be Mill 1 POM Sabah, N/A N/A included in the scope of Malaysia the certification Tawau, Pang Burong Estate Mill 2 POM March 2009 Certified Sabah, Sri Kunak Estate

RSPOPC-SUM-REPORT.F01 JULY2013 Page 9 of 34 Control Union (Malaysia) Sdn. Bhd. 150-A, 1st Floor, Persiaran Raja Muda Musa, Off Jalan Sg Bertih, Teluk Gadong, 41100, Klang, Selangor. Malaysia. Tel: +603-3377 1600 / 1700

RSPO Principles & Criteria Main Surveillance Assessment Report Report Number CU827183

Malaysia Tundong Estate Ringlet Estate Jatika Estate Tawau, Sigalong Estate Pinang POM Sabah, Pangeran Estate March 2009 Certified Malaysia Pinang Estate

Lahad Datu, Tungku Estate Lungmanis POM Sabah, Bukit Tabin Estate July 2010 Certified Malaysia Lungmanis Estate Lahad Datu, Rimmer Estate Rimmer POM Sabah, July 2010 Certified Sg. Sibalukan Malaysia Kinabatangan, Bornion Estate Bornion POM Sabah, July 2010 Certified Segar Usaha Estate Malaysia

2.5 Summary of the findings for Partial Certification The audit team assessed compliance with the above requirements during this audit. Failure to address any non- compliance identified may lead to certification suspension. Overall findings are satisfactory; however, there are still room for improvement especially on internal audit procedures for all uncertified subsidiaries and new acquisition to ensure the requirements are met. Concerning the potential overlook of the implementation of the internal audit procedure, a minor non-compliance is raised.

There are 6 estates currently sending the crops to the outside mill where these estates have not been included in the time bound plan. There will be a new POM in Berau, Kalimantan Timur as of the company’s plan on expansion of milling capacity and 2 new POMs in Medan and Sampit respectively under construction which will eventually added in the time bound plan when it is ready for commissioning.

The company has also made decision to include Paloh Mill into certification by year 2015 and Mill 1 which consists of 100% of independent smallholders will be shut down within 3 years from now to adhere to the rules of partial certification.

The land conflicts are well documented and details are available and cited. More investigation will be carried out during next surveillance audit to monitor the progress.

For final conclusion, please refer to table 3.1.

2.6 Partial Certification Audit Agenda Date Location Agenda 22/1/13 Changkat Asa Partial audit Estate

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RSPO Principles & Criteria Main Surveillance Assessment Report Report Number CU827183

PART 3: AUDIT PROCESS

3.1 About the Certification Body Control Union Certifications is a member of the Control Union World Group – an international inspection and certification body. CUC performs Audits and certification in many agricultural based fields such as FSC, RSPO, and Organic production, Sustainable Textile Production, Organic Exchange, GLOBALGAP, HACCP, BRC, GMP and GTP.

CUC is accredited by the Dutch Council of Accreditation (RVA) on the European quality standard EN 45011 for the inspection and certification of CUC Organic program (according to the EU regulation 2092/91) and EUREPGAP program. When requested a copy of the accreditation certificate can be obtained from CUC.

3.2 Audit Team Lead auditor: Simon Selvaraj Team member 1: Haeruddin Team member 2: Mohd Rizal Kassim Team member 3: Jamal Team member 4: Mahaswaran

3.2.1 Qualifications of the Lead Auditor Requirement Qualifications A minimum of post high school (post-secondary Post graduate qualification in agriculture with more than school) training in either agriculture/forestry, 5 years working experience in plantation. environmental science or social sciences; At least 5 years professional experience in area of More than 5 years working experience in plantation. work relevant to the assessment (e.g., palm oil Involved in RSPO auditing since November 2010. Fully management; agriculture/forestry; ecology; social trained in similar agriculture certification programmes science); such as RSPO SCCS, Global Gap, ISCC and GMP. Training in the practical application of the RSPO Involved in RSPO assessment since November 2010. criteria, and RSPO certification systems; Member of CUC RSPO audit team. Involved in audits conducted in Malaysia and Indonesia. Successfully completion of an ISO 9000:19011 lead Completed ISO 9001:2008 lead auditor course in July auditors course; 2011. Successfully completed RSPO Lead Auditor Course. Training in the practical application of RSPO Member of CUC RSPO audit team since November 2010. certification systems. Involved in audits conducted in Malaysia and Indonesia since November 2010 in 10 different companies in Malaysia and Indonesia. A supervised period of training in practical auditing Post graduate qualification in agriculture with more than against the RSPO criteria or similar sustainability 5 years working experience in plantation. standards, with a minimum of 15 days audit experience and at least 3 audits at different organizations. RSPO endorsed lead auditors course. Completed RSPO Lead Auditor training in 2011 Signed code of conduct. Yes. General knowledge of:  RSPO P&C standards. Yes  CUC organizational structure. Yes  CUC quality systems. Yes  Lead auditor role. Yes  Report writing. Yes  Stakeholder consultation. Yes  Certification decision process. Yes  RSPO SCCS program manual. Yes RSPOPC-SUM-REPORT.F01 JULY2013 Page 11 of 34 Control Union (Malaysia) Sdn. Bhd. 150-A, 1st Floor, Persiaran Raja Muda Musa, Off Jalan Sg Bertih, Teluk Gadong, 41100, Klang, Selangor. Malaysia. Tel: +603-3377 1600 / 1700

RSPO Principles & Criteria Main Surveillance Assessment Report Report Number CU827183

 CUC filing systems. Yes  Correct use of RSPO trademarks. Yes  History and objectives of RSPO. Yes  CV available. Yes Completion of CUC RSPO lead auditor training. Completed & Passed RSPO Lead Auditor training in 2011

3.2.2 Qualifications of the Assessment Team RSPO Requirement Team Member Name Qualifications

Fluent in main local Mohd Rizal Kassim Fluent in Local languages and English languages and English. Mahaswaran Fluent in Local languages and English Jamal Fluent in Local languages and English Haeruddin Fluent in Local languages and English

Field working Mohd Rizal Kassim Experience in forestry and manufacturing experience in the palm company oil sector, or a Haeruddin Workers welfare issues and social auditing demonstrable experience. Environmental and ecological equivalent. auditing Mahaswaran Master in Business Administration, environment and OHSAS auditor. Working experience in manufacturing firm. Jamal Involved in RSPO auditing since November 2010. Auditing experience in GMP and Globalgap.

Good agricultural Jamal Involved in RSPO auditing since November 2010. practices (GAP), Auditing experience in GMP and Global gap. integrated pest Haeruddin Workers welfare issues and social auditing management (IPM), experience. Environmental and ecological pesticide and fertilizer auditing. use. Mahaswaran Master in Business Administration, environment and OHSAS auditor. Working experience in manufacturing firm. Mohd Rizal Kassim Have safety background. Training in Chemical handling.

Health and Safety Jamal Involved in RSPO auditing since November 2010. auditing on the farm Auditing experience in GMP and Global gap. and in processing Haeruddin Environmental and ecological auditing. facilities. (For example Mohd Rizal Experience as Safety officer in Malaysia OHSAS 18001 or manufacturing firm occupational. Health Mahaswaran Master in Business Administration, environment and safety assurance and OHSAS auditor. Working experience in system). manufacturing firm.

Workers welfare issues Simon Selvaraj Completed SA800 course and social auditing Haeruddin Workers welfare issues and social auditing experience. (For experience. Environmental and ecological example with SA8000 or auditing. related social or ethical accountability codes). Mahaswaran Master in Business Administration, environment and OHSAS auditor. Working experience in manufacturing firm. RSPOPC-SUM-REPORT.F01 JULY2013 Page 12 of 34 Control Union (Malaysia) Sdn. Bhd. 150-A, 1st Floor, Persiaran Raja Muda Musa, Off Jalan Sg Bertih, Teluk Gadong, 41100, Klang, Selangor. Malaysia. Tel: +603-3377 1600 / 1700

RSPO Principles & Criteria Main Surveillance Assessment Report Report Number CU827183

Environmental and Mahaswaran Master in Business Administration, environment ecological auditing. (For and OHSAS auditor. Working experience in example experience manufacturing firm. with organic agriculture, Haeruddin Workers welfare issues and social auditing ISO 14001 or experience. Environmental and ecological environmental auditing. management systems).

Economic issues. Mahaswaran Master in Business Administration, environment and OHSAS auditor. Working experience in manufacturing firm. Jamal Involve in RSPO auditing since November 2010. Auditing experience in GMP and Global gap

3.3 Audit Methodology 3.3.1 General Overview The Audit was carried out in conformity with the procedures as laid down in the CUC Procedure Manual and the RSPO Program Manual for the auditors and Certifier. During the Audit the qualified CUC auditors used the RSPO standard as endorsed for the country in which the audit took place and recorded their findings.

Workers and local communities were interviewed and evidence sought to confirm ongoing compliance to include:  Chemical stores. Storage, MSDS leaflets, Herbicide mixing areas, PPE, Ventilation, Security.  Field inspections. Herbicide application programs. Harvesting sites and efficiency. Fertilizing operations. SOP’s. Soil maps. Land preparation. Ground cover. IPM. First aiders and boxes. Ground cover. Soil erosion. Field observations of all operations.  Worker interviews. OSH. Sexual, religious, racial harassment. Pay and contracts. Child labor. First aid. Awareness.  Re-planting sites. Zero burn.  HCV’s. Identification. Management plans. Environmental Impact Assessments. Implementation.  Riparian zones. Width. Current and future management. Non maintenance regimes.  Water management. Water courses. Water monitoring.  Road maintenance. Run off.  Social amenities. Social Impact Audits.  Local communities. Contributions made. Employment opportunities. Social impacts. Complaints procedures.  Workshops. Oil traps. Safe working environment. PPE. Diesel tanks. Environmental waste management.  Line sites. Interviews with householders. Inspection of water discharge points. Water improvement plans. Waste disposal.  Documentation review.

The Palm Oil Mill audit verification included the following activities:  Mill and workshop inspections. Documentation review & worker interviews.  Mill. SOP’s. Safe working environment. Gen sets. Walk ways. Signs. EFB. POME treatment. Emissions. Mass balance. Diesel tanks. PPE. Fire extinguishers. First aiders and boxes. Fuel and water usage.  OSH. Training. Management structure. First aiders.  Full document review. Completion of the checklist. Review and documentation of evidence. All aspects of RSPO P&C’s applicable.  Worker interviews. OSH. Sexual, religious, racial harassment. Pay and contracts.  Compliance against the RSPO SCCS certification scheme.

Verification: Verification of implementation was done through field observations, workshop and chemical store inspections, worker and community interviews and mill inspections as summarized above.

3.3.2 Assessment agenda for this Audit Date Location Main activities 21/1/13 Tanjung Malim  09.00am-Opening Meeting Rubber Factory  Opening meeting. Introduction by team leader. Introduction of team RSPOPC-SUM-REPORT.F01 JULY2013 Page 13 of 34 Control Union (Malaysia) Sdn. Bhd. 150-A, 1st Floor, Persiaran Raja Muda Musa, Off Jalan Sg Bertih, Teluk Gadong, 41100, Klang, Selangor. Malaysia. Tel: +603-3377 1600 / 1700

RSPO Principles & Criteria Main Surveillance Assessment Report Report Number CU827183

members and assessment agenda. Presentation by Estate and Palm oil mill Tanjung Malim POM 10.00 am-Plant & Field Operation(Haeruddin, Rizal, Mahas & Jamal)  Workers interviews  Chemical Stores  Workshops  Housing  Medical  School  Local Communities  Environmental  Document Review

Mill SCCS verification audit-Simon  Previous 12 Months FFB received, processed (Production) & CPO  Sold. PK produced, Sold. (Uncertified)  Chosen SCCS module and model and its procedures.  Verification of other procedures if any. 22/1/13 Stakeholder 09.00am - Open stakeholder meeting. Simon & Rizal Consultation at Capture any issues rose during the open stakeholder meeting. After Rubber Factory Meeting, discussion with KLK Management. Changkat Asa Estate Environmental audit ( Field visit & Document review) 09.30am – Jamal, Mahas & Haeruddin - P&C  Worker interviews.  Chemical stores.  Workshops.  Housing  Medical.  Schools. Local communities. 14.00pm- till end Partial Audit- Simon 23/1/13 Kerling Estate 09.00am- Haeruddin & Simon Environmental audit ( Field visit & Document review)

09.00am – Asidatorn , Mahas, Rizal - P&C  Worker interviews.  Chemical stores.  Workshops.  Housing  Medical.  Schools.  Local communities.  Environmental.  Document review 24/1/13 Tanjung Malim 08.00am - Preparation for closing meeting. (All Auditor) Rubber Factory 11.00am Closing meeting. Chaired by the assessment team leader.  Welcome and introduction by the team leader.  Presentation of findings by the assessment team.  Questions and answers.  Final summary by team leader Number of assessors participating: 5 Number of days spent for the assessment on site: 4 Total number of person days used for the assessment on site: 20

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RSPO Principles & Criteria Main Surveillance Assessment Report Report Number CU827183

PART 4 ASSESSMENT FINDINGS

4.1 Lead Assessor’s Summary and Recommendation for Certification The mill and supply bases are as per the above table 1.5 and 1.7 and were assessed in the field, offices, facilities, stores and document reviews were carried out in accordance to the RSPO principles and criteria.

Common systems were identified and specific evidence was recorded for individual estate and mill. Interviews with Estate Managers, Mill Manager, committee and members of workers’ union took place in both formal and informal environments and worker interviews were conducted in both estates and in the mill. Subsequent to the stakeholders’ meeting which was conducted without the presence of the management staffs, the surrounding communities were visited so as to capture more feedback from the stakeholders. The stakeholders meeting feedback indicated two negative feedbacks and in fact more positive comments were received. The details are as per table 4.5, below.

There were no complaints received during the field assessments and during interviews with the external stakeholders. Up to the time of writing this report, there were neither feedbacks nor comments received from the other external stakeholders and community leaders nor from the public announcement in the RSPO website.

The mill is fully verified for RSPO SCCS system verification and it is found to be in full compliance as all the necessary procedures are in place. Since there is no production as certified products, more verification will be carried out during the 1st surveillance audit.

However, some major and minor NC was found on this assessment. Detail NC as per table 4.4.1 below.

With full commitment towards RSPO P&C and RSPO SCCS implementation and compliance towards rules of partial certification and successful closure of major non-compliance, it is therefore the recommendation of the lead assessor:

To award a certificate of compliance.

Signed:

Name: Simon Selvaraj Date: 12/5/2013

4.2 Summary of the findings by Principles and Criteria  Over the 5 year period of the life of the certificate, there will be 4 annual surveillance audits  Identified Non-Conformities and noteworthy Positive and Negative Observations.

Principle 1: Commitment to Transparency With all the publicly available documents and maintaining of the request and Criterion by response log book, it is very clear to the audit team that the company Summary Audit implements transparency with a non-conformity in negotiation procedure in 1.2. MA 1.1 All records of meetings, requests for information and responses are maintained as per stakeholder consultation log book/requests and response log book. Each book also contains an example of how to handle and record a request.

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RSPO Principles & Criteria Main Surveillance Assessment Report Report Number CU827183

MA 1.2 No restriction as to the documents that are publicly available with the exception of confidential commercial information. Publicly available documents are Land Titles/user rights, Plans and impact assessments relating to environmental and social impacts, Pollution prevention plans, Details of complaints or grievances, Continuous improvement plans. However, the company fails to provide evidence the negotiation procedure even though there are no disputes reported so far. This was raised as Major NC. Principle 2: Compliance with Applicable Laws and Regulations All related laws and regulations were recognized and complied by the Criterion by Summary company. However, the facility missed to track a permit and expired which Audit lead to Major non-conformance in 2.1. MA 2.1 RSPO “Applicable Laws and Regulations”. No evidence of non-compliance to all laws and regulations. i.e. OSHA regulation 1994 (Act 514), Factories regulation (Act 139), National land code (Act 1965), Environmental Quality Act, Pesticide Act, Industrial relation Act, Solid waste management, Employment Act 1955 (act 265), workers Minimum Standard of Housing and Amenities Act 1990, Workmen compensation Act 1952, Trade Union Act 1959, Land Acquisition, Children and young person (Employment) Act 1966, Employee Social security Act, Estate Hospital Assistant )Registration) Act 1965, Immigration Act 1959/63 (Act 155), land conservation Act 1960, MPOB Act, Petroleum (Safety Measures) Act 1984, Police Act 1952 to appoint Auxiliary Police, Protection of wild life Act 1987, Road Transport Act 1987, Building Act 1974, Wages council Act 1947, Water Act 1929 to protect waterways; 26 permits and licenses are there for mills. MDC Publishers Sdn Bhd sends out periodical revisions on laws. Beside this Head Office will track any changes in law and keep all estates informed by internal circular and memorandums. Despite having the tracking system in place, a permit to purchase, store and usage of Sodium Hydroxide was found to be expired and this was raised as a Major NC. MA 2.2 Land titles inspected for all the estates and the mills. Boundary stones and markers checked and verified in the field. Copies of land titles are held on file. All land use entitlements were checked and found to be complying with the term. i.e “The said land is demised herein expressly and only for the purpose of cultivation of oil palm and/or an agricultural crop of economic value”. And “Special terms and conditions: The said land is expressly and only for the Palm Oil Mills”. The GPS maps clearly identify the boundary stones and the boundary stones and markers were physically verified.

MA 2.3 Not applicable because there were no customary rights issues raised by the by internal and external stakeholders during the open stakeholder meeting and during the visit to surrounding communities. Principle 3: Commitment to Long-Term Economic and Financial Viability The company is committed to the long term economic and financial viability as described in annual budgets covering FFB and CPO Production, OER, KER, Criterion by Summary Projected cost and covering vehicles maintenance, Human Resources, etc. Audit Annual replanting included in annual budget for 10 years programme which also includes size of hectarage, yield projection, and annual reviews. MA 3.1 The audit team sighted the financial planning with a 5-year projection cycle. Area of mature and immature crops. Mt/ha yield of FFB. Five years replanting plan is available. Principle 4: Use of Appropriate Best Practices by Growers and Millers Criterion by The company has implemented the best practices in their operations. Full SOP Summary Audit system are in used and practiced. Monitoring of fertilizer and agrochemical is

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based on soil and tissue sampling. Safety and health is implemented in all operations however, during the assessment it is found that there are some area need to be given immediate attention as these has led to raise two Major NC in 4.4 and 4.7. MA 4.1 Group Policy for all estates exist. Agricultural Oil Palm. Issued to the estates on 20th August 2007. It covers all best practices. Updates are circulated and then included in the file and implemented. 40 SOP’s covering all aspects of plantation management. Mills: SOP’s for mills are the same. 13 operations stages from FFB reception on weighbridge to CPO dispatch. MA 4.2 Oil palm Manuring recommendations 2010/2011 by Applied Agricultural Resources. The recommendations are followed and records maintained by field and date of application. Annual soil and leaf sampling carried out to analyse and determine the soil and palm nutrient level. Based on these result and field visit by the Agronomist, final fertilizer recommendation is made. Zero burn policy. EFB application is carried out in accordance with the recommendations of the agricultural research department. Dry decanter Cake is used as soil conditioner. Actual BOD level is 132mg/L and allowable standard is 1000mg/L . Ground water quality is monitored and BOD is 15mg/L. MA 4.3 Soil maps show soil types. And SOP 9 covers Erosion control. This details the actions to take to control erosion. However, this is not practiced to minimise soil erosion along riparian zones and non-conformity raised combining 4.4.1 indicator. Planting of mucuna is practised, frond staking to stop surface run off, flat and accessible area is maintained with grass cutting at harvesting path and road side, no blanket spray, only selective and circle spray and treated with the right choice of chemicals. MA 4.4 All estates have identified watercourses and the appropriate width of buffer zone is established (in accordance to guidelines by the Drainage and Irrigation Department) and the non-maintenance buffer zone is then implemented i.e. no fertilizer applications and spraying of agrochemicals within riparian zones. However, it was also found that one of the estates does not implement this resulting in soil erosion along the river bank and the there is no marking or sign board pertaining to this riparian zone. This has been linked to 4.3.5 and raised as a Major NC. Another Major NC was raised under 4.4.3 for monitoring of outgoing water where, the estate does not carry out any water analysis at the stream to monitor its activities impact. Water usage monitoring records are in place in the mill which shows that the average use of 1.22 tonnes of water per tonne of FFB processed. There is a generic water management plan covering water source, construction of reservoir and water quality analysis, Protection of water courses and wetlands. Monitoring of water quality and usage. Piped water supply and emergency response plan available for mitigate any drought. MA 4.5 Integrated pest management and pest and disease control. Cultural control. Chipping and pulverizing of felled palm trees at the time of re-planting. Types of census are use of biological control, chemical control, and manual control and at damage census –threshold 5%, barn owl occupancy census, rhinoceros beetle census at replanting area and immature field. Census result is mapped or tabled and documented. Pre and post treatment census to determine the effectiveness of the action taken. Monitoring the occupancy rate 59%. Identification. Treatment. Evaluation and record keeping. Throughout all

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RSPO Principles & Criteria Main Surveillance Assessment Report Report Number CU827183

estates the use of beneficial plants such as Tunera subulata, Cassia cobanensis, Antigonon spp. are very evident. Replant sites are restructured to allow enough light for these plants. Leguminous cover crops are also well- established to suppress growth of noxious weeds. SOP 3 covers all the documented IPM for major pest, use of biological control, cultural control, surveillance, evaluation, record keeping, Tunera is extensively planted. Barn owl boxes erected at the rate of 1/10ha. MA 4.6 Chemical stores at all estates and mills were inspected and found to be in compliance with requirements. Well ventilated. Locked. MSDS leaflets. First aid kits. Warning notices. Pre-mixing takes place in bunded areas with shower facilities. Inspection of records, interviews with the workers and medical staff confirmed that annual checkups take place by registered OSH medical practitioner. Female workers are accompanied by female nurse and pregnant and breast feeding women are assigned to other work not involving agrochemicals. All workers are given PPEs by the company and confirmed by workers during interview with them in the field. MA 4.7 OSH Plan, which includes a training program, however, there is no evidence of training records for the responsible person for chemical store to support the training program plan. This has been raised as a Major NC. All occupational hazards and risks have been assessed and identified. Guidelines on accident and emergency procedures are in place. Accident records are analyzed by the Safety executive on site and target set is zero. Accidents details reported to DOSH periodically. Safety measures explained to workers and included in all training. Also displayed on muster grounds. Interviews with workers confirmed knowledge of the plans and procedures and first aid training records were inspected and also confirmed by interview. Safe working environments observed in mills and places of work. Accident insurance covers any accidents during travelling to work and during work related accidents. Firefighting team available in estate and mills. Internal safety executive and external trainers provide training. Another separate risk assessment HIRARC conducted by the OSH department for all the operation chemical handling, workshop, field operation and other general work. Rating is given as low, medium or high. When the risk is high, preventive measures is developed to address the risk. MA 4.8 Annual training program for all workers are there. Regular assessments take place to ensure all workers are up to date with training. Section 10 of the KLK- RSPO master copy gives details of all training required for operatives. This is laid out by month. Training program includes safe handling of chemical, first aid etc., except on non-conformity raised on 4.7.1. Training for spraying, driver, harvesting and save handling of chemicals record is in place. Mill training covers all the work stations. Principle 5: Environmental Responsibility and Conservation of Natural Resources and Biodiversity While the EIA has been carried out in the mill and estates, it was not comprehensive in the sense that not all impacts were identified and Criterion by stakeholder input was limited. HCV areas and ERT were also not properly Summary Audit identified and as a result proper management plans cannot be put in place. Waste identification is also incomplete. Two Minor NC’s in 5.1, 5.3 & 5.6 and 1 Major NC in 5.2 was raised. MA 5.1 Environment impact assessment and pollution prevention plans are available. All processes and activities that may pollute are identified with the potential hazard. The level of risk is assessed and then a plan is prepared with target date, persons responsible and status. However, the EIA is limited for example the hazards description: water pollution is mentioned in relation to RSPOPC-SUM-REPORT.F01 JULY2013 Page 18 of 34 Control Union (Malaysia) Sdn. Bhd. 150-A, 1st Floor, Persiaran Raja Muda Musa, Off Jalan Sg Bertih, Teluk Gadong, 41100, Klang, Selangor. Malaysia. Tel: +603-3377 1600 / 1700

RSPO Principles & Criteria Main Surveillance Assessment Report Report Number CU827183

the workshop, but it is not clear whether it relates to oil, chemical, pesticides or other sources of pollution or such as human activities that cause water and air pollution, and how such pollution occurs? (The root- cause is not clearly detected). In most cases the landfill is not included. When interviewing the staff, it is clear that there is far more information available than presented in the EIA. In general the format is not made specific enough for each site and misses details on where, what, when, how, why and who. Thus, a Minor NC is raised.

MA 5.2 No such complete identification and assessment is present. The company did identify HCV informally and a SOP is in place, but this was not done with the involvement of stakeholders and according to the national interpretation of HCV as described in the company’s SOP. No clear maps are available on which management decision can be taken. No information on presence of ERT in the area.

There are limited management plans and monitoring activities (not consulted with stakeholders). Also not clear whether there are ERT’s in the estate and whether the present HCV overview is complete. Therefore, a Major NC is raised.

MA 5.3 The mill has a documented waste products, however, some of the estates do not have list of waste generated with source of pollutant is not completely covering all aspect in the estates. This was raised as Minor NC in 5.3.1. Schedule wastes are found to be stored together with other general items. Thus, a Minor NC is raised in 5.3.2. MA 5.4 The use of both renewable and non-renewable energy in the mill is monitored on a monthly basis. Renewable energy is supplied by fibre and shell to the boiler for power generation. Fossil fuel use is clearly monitored for the gen-set in the mill and the estates. MA 5.5 Company is observing the ASEAN guidelines by implementing a zero burning policy. No burning was identified during the audit. The company has adopted techniques such as felling and chipping for it’s replanting program. MA 5.6 The assessment of polluting activities has been conducted and this has been incorporated in it’s EIA, covering the environmental aspects and impact in every activity/area, and how the cases are being categorised (normal, abnormal and emergencies) and how they measure the consequences, adequacy of existing control, determine the level and priority of risk, and the legal implications. However, plans to reduce the pollution and emission is not complete in both the mill and estates. This is raised as Minor NC. Principle 6: Responsible Consideration of Employees and of Individuals and Communities by Growers and Millers The SOP on procedures to deal with complaints and grievances is available Criterion by and implemented. The policy for equal opportunities is clearly stated and this Summary Audit was confirmed during the audit through field interviews. However, there are still some minor non-conformance identified in 6.5, 6.9 & 6.11. MA 6.1 All social impacts from the estates/mill operations have been identified through extensive consultation with relevant stakeholders and mitigation measures have been determined. These have been incorporated into the appropriate action plans to be executed by designated personnel within a specified timeframe. MA 6.2 Field interviews and document reviews have confirmed that communications RSPOPC-SUM-REPORT.F01 JULY2013 Page 19 of 34 Control Union (Malaysia) Sdn. Bhd. 150-A, 1st Floor, Persiaran Raja Muda Musa, Off Jalan Sg Bertih, Teluk Gadong, 41100, Klang, Selangor. Malaysia. Tel: +603-3377 1600 / 1700

RSPO Principles & Criteria Main Surveillance Assessment Report Report Number CU827183

and relationships between the operating units and stakeholders are good. MA 6.3 Documented evidence was inspected. Confirmation by interview with workers and stakeholders that the system is accepted and action taken in timely manner. MA 6.4 No negotiations concerning compensation for loss of legal or customary rights were carried out, as there were no customary rights that were identified. MA 6.5 Salary is documented under monthly check roll pay slip system. Workers are given pay slip and this is acknowledged by signing it upon receipt. There is a permit to carry out deductions. All terms and conditions of contract (whether Malaysian or foreign workers) are recorded under Labor Registration Cards. Direct contract of employment is evident and interview with workers confirm that they understand what is in the contract. Two rooms housing complete with kitchen and toilet is being provided. Clean water supply is available but in some operating units inadequate water supply was raised (see below for NC). Internal clinic available for free medical treatment. External doctor visits the operating units. The company, i.e., kindergarten, provides educational facility and the government provides the primary school for the workers children. The company subsidizes Bus/transportation.

During the interview with workers, issues related to inadequate water supply were raised. Water issue needs immediate attention. Water analysis for drinking water is not completed as well. A minor NC raised under 6.5.3. MA 6.6 Meetings with labour union and worker representative were carried out. Minutes of meeting with worker representatives are recorded. Besides labour union meetings, meeting with worker representatives is carried out through various committees (e.g.: OSH Committee and Sexual Harassment Committee). MA 6.7 All policies state minimum age requirement of 16. Reference to Child Employment Policy of the company. No observation of under-aged persons working in the fields and Labour Registration Cards inspected. Interview with stakeholders and labour union confirm that there is no child labour. Child Labour Policy is in place. MA 6.8 Policy displayed in office and muster ground. Wage records inspected and rates confirmed as being the same for male, female workers and migrant workers. Equal opportunities policy publicly displayed in the office and at line-sites. Employees are aware of this policy. MA 6.9 Sexual harassment policy is publicly displayed in office and at linesite. Policy also documented under SOP 40. However, the policy does not indicate the reproductive rights. Thus, a Minor NC was raised. Worker interviews confirmed that no sexual harassment takes place. All female employees have direct access to the gender committee which handles all sexual harassment issues. Gender committee formed by the female staff and workers. MA 6.10 Head Office using a formula that is based on OER and cost of production does all the calculations for FFB price. Procedures of FFB price calculation are evident. The prices are displayed on the notice board at the palm oil mill. Contractual agreements include contractor’s details, pricing, terms and condition for work and payment, which are done through HQ. Interview with suppliers during stakeholder consultation confirmed that they understand the procedure. All payments are made in a timely manner. Payments are made by

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RSPO Principles & Criteria Main Surveillance Assessment Report Report Number CU827183

head office in the first week of every month. MA 6.11 Contribution through Head Office and internally by the operating units. The operating units contribute to local development without a consultative method, which is not evident to the sum contributed. Therefore, a Minor NC is raised. Assistance given to schools and community are by providing the transport, permission to use the estate facilities and in the form of donations. Donations are given to worship places/temples. Since most of the operating units are located in the vicinity of township, most of the communities have access to government roads and facilities. Principle 7: Responsible Development of New Plantings Not applicable as there is no new plantings were carried out to any of the Criterion by Summary supply bases listed above. Above table on planting age denotes re-planting. Audit

Principle 8: Commitment to Continuous Improvement in Key Areas of Activity The audit team found evidence in the field, document checks and interviews Criterion by with stakeholders that estates and the mill are proactive and firmly Summary Audit committed to continuous improvement in the areas of social, environment and economic viablility. MA 8.1 Continuous improvement program covers the following:  Maximizing recycling and minimize waste by re-using the used herbicide containers for mixing herbicides. Recycling was introduced to the workers to recycle domestic waste.  Social improvement includes the new housing facility.  Implementation of safety and health measures are enhanced with training and collection of information through internal feedback system to identify training needs. Internal audits by safety executive and RSPO team to ensure continuous improvement and compliance to RSPO P&C.

4.3 Non-conformity Raised During this Audit and Any from the Previous Year, if applicable This section gives an over view of new or revised non-conformities raised during this audit and of action taken to close out non-conformities raised during the previous audits, if applicable  If a minor-non-conformity raised at the last audit, is not closed out, then this will be raised to Major status and the company given 60 days to close this out.  The NC number is comprised of 2 parts to include the year in which the NC was raised as well as a sequential number.

4.4.1 Non-Conformities Identified during this Audit The following NC’s were raised for this audit.

NON CONFORMITY REPORT NC number: 01/2013 Client name: KLK Tanjong Malim Complex Date raised: 21-23 Jan 2013 Major or Minor: Major (CLOSED) Raised by: Simon Selvaraj Aspect of standard: Criterion: 1.2.6 Negotiation procedures

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Evidence of non-conformity: Company have a SOP no: 3.0 for land acquisition mention for disputed issue should be consulting by negotiation procedure. However, company fail to provide evidence the procedure event no disputed reported so far Auditors signature:

Date: 23/01/2013 Proposed corrective action / improvement action by company. The company will look into this matter and discuss with top management will revise the said document accordingly. Timeline for conformance: Since this is a main assessment, the time line agreed is 4 months, (120days). Review of corrective /improvement action: The negotiation procedure has been revised and has been linked with SOP 1 & 3 which will be used if there are any situation arises. This Major NC is CLOSED.

Assessors signature:

Date: 10/5/2013

NON CONFORMITY REPORT NC number: 02/2013 Client name: KLK Tanjong Malim Complex Date raised: 21-23 Jan 2013 Major or Minor: Major (CLOSED) Raised by: Simon Selvaraj Aspect of standard: 2.1.1 Evidence of compliance with relevant legal Indicators. Evidence of non-conformity: Permit to purchase, store and use of Sodium Hydroxide date 05/10/2004 [register # BC389/2004], there is no evidence can be demonstrated for the renewed license.

Auditors signature:

Date: 23/01/2013 Proposed corrective action / improvement action by company. Timeline for conformance: Since this is a main assessment, the time line agreed is 4 months, (120days). Review of corrective /improvement action: The license is renewed and shown. The Major NC is CLOSED.

Assessors signature:

Date: 10/5/2013

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RSPO Principles & Criteria Main Surveillance Assessment Report Report Number CU827183

NON CONFORMITY REPORT NC number: 03/2013 Client name: KLK Tanjong Malim Complex Date raised: 21-23 Jan 2013 Major or Minor: Major (CLOSED) Raised by: Simon Selvaraj Aspect of standard: 4.4.1 and 4.3.5 Protection of water courses and wetlands, including maintaining and restoring appropriate riparian buffer zones along all bodies of water at or before replanting. And; Documented evidence of practices minimizing soil erosion and degradation (including maps). Evidence of non-conformity: - Stream is not observed for soil erosion practice where major erosion is cited along the stream banks. Furthermore, the riparian zone is not marked along the stream or sign board pertaining to this riparian zone. This has been linked to 4.3.5 and raised as 1 Major NC.

Auditors signature:

Date: 23/01/2013 Proposed corrective action / improvement action by company. Timeline for conformance: Since this is a main assessment, the time line agreed is 4 months, (120days). Review of corrective /improvement action: The riparian zones are marked and sign boards have been erected. In maps, these locations are marked. The effectiveness of this maintenance will be followed up at the next surveillance audit. Since the map, marking and sign boards have been erected / completed, the Major NC is CLOSED.

Assessors signature:

Date: 10/5/2013

NON CONFORMITY REPORT NC number: 04/2013 Client name: KLK Tanjong Malim Complex Date raised: 21-23 Jan 2013 Major or Minor: Major (CLOSED) Raised by: Simon Selvaraj Aspect of standard : 4.4.3 Outgoing water into main natural waterways should be monitored at a frequency that reflects the estates and mills current activities which may have negative impacts (Cross reference to 5.1 and 8.1). Evidence of non-conformity: The estate does not carried out any water analysis for incoming and outgoing of the stream. Which necessary to monitor the estate activity.

Auditors signature:

Date: 23/01/2013

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RSPO Principles & Criteria Main Surveillance Assessment Report Report Number CU827183

Proposed corrective action / improvement action by company. Timeline for conformance: Since this is a main assessment, the time line agreed is 4 months, (120days). Review of corrective /improvement action: The estate has identified the upstream and downstream points in the map and subsequently carried out the water analysis and produced the result. Therefore, the Major NC is CLOSED.

Assessors signature:

Date: 10/5/2013

NON CONFORMITY REPORT NC number: 05/2013 Client name: Tanjung Malim Complex Date raised: 21-23 Jan 2013 Major or Minor: Major Raised by: Simon Selvaraj Aspect of standard: 4.7.1 (c) An awareness and training program which includes the following specifics for pesticides. Evidence of non-conformity: - Seen no evidence of training records for employees responsible for the chemical store.

Auditors signature:

Date: 23/01/2013 Proposed corrective action / improvement action by company. Timeline for conformance: Since this is a main assessment, the time line agreed is 4 months, (120days). Review of corrective /improvement action: The company has conducted an overall training once again to all workers involved in pesticide operations and specifically carried out the training for the storekeeper with a short test to evaluate the awareness. With this, the Major NC is CLOSED.

Assessors signature:

Date: 10/5/2013

NON CONFORMITY REPORT NC number: 06/2013 Client name: Tanjung Malim Complex Date raised: 21-23 Jan 2013 Major or Minor: Major Raised by: Simon Selvaraj Aspect of standard: 5.2 The status of rare, threatened or endangered species and high conservation value habitats, if any, that exist in the plantation or that could be affected by plantation or mill management, shall be identified and their conservation taken into account in management plans and operations.

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RSPO Principles & Criteria Main Surveillance Assessment Report Report Number CU827183

Evidence of non-conformity: No such complete identification and assessment is present. The Company identifies HCV informally and SOP is in place but this was not done with involvement of stakeholder and according national interpretation of HCV as describe in company SOP. No Clear map is available on which management decision can be taken. No information on present ERT in area. There are limited management plan and monitoring activities also not clear whether there are ERTs in the estate and whether the present HCV overview is complete.

Auditors signature:

Date: 23/01/2013 Proposed corrective action / improvement action by company. Timeline for conformance: Since this is a main assessment, the time line agreed is 4 months, (120days). Review of corrective /improvement action: The assessment records show that people have been consulted, and research of potential HCV area within, and monitoring record of HCV habitats. Final conclusion of the report is that, there is no ERT present within the estate. The assessment carried out is evident and therefore this Major NC is closed.

Assessors signature:

Date: 10/5/2013

NON CONFORMITY REPORT NC number: 07/2013 Client name: Tanjong Malim Complex Date raised: 21-23 Jan 2013 Major or Minor: Major Raised by: Simon Selvaraj Aspect of standard: 6.1 Aspects of plantation and mill management that have social impacts are identified in a participatory way, and plans to mitigate the negative impacts and promote the positive ones are made, implemented and monitored, to demonstrate continuous improvement. Evidence of non-conformity: Stakeholder meeting has been done to get input from the stakeholder. However, social impact assessment to identify any social impact and to mitigate the social impact is not available.

Auditors signature:

Date: 23/01/2013 Proposed corrective action / improvement action by company. Timeline for conformance: Since this is a main assessment, the time line agreed is 4 months, (120days). Review of corrective /improvement action: The impact identified was communicated to the relevant affected parties and consultative mitigation were discussed and documented. Since, the impact is being identified and recorded for mitigation measures, therefore, the Major NC is CLOSED.

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RSPO Principles & Criteria Main Surveillance Assessment Report Report Number CU827183

Assessors signature:

Date: 10/5/2013

NON CONFORMITY REPORT NC number: 08/2013 Client name: Tanjong Malim Complex Date raised: 21-23 Jan 2013 Major or Minor: Minor Raised by: Simon Selvaraj Aspect of standard: 5.1.1 Documented aspects and impacts risk assessment that is periodically reviewed and updated. Evidence of non-conformity: - The EIA is limited, for example the hazards description: water pollution is mentioned in relation to the workshop, but it is not clear whether it relates to oil, chemicals, pesticides or other sources of pollution. Or human activities cause the water and air pollution, but how it is not specified (The root-cause is not clearly identified). In most cases the landfill is not included. When interviewing the staff, it is clear that there is far more information available than presented in the EIA. In general the KLK format is not made specific enough for each site and misses the details on where, what, when, how, why and who.

Auditors signature:

Date: 23/01/2013 Proposed corrective action / improvement action by company. Timeline for conformance: Next annual surveillance audit.

NON CONFORMITY REPORT NC number: 09/2013 Client name: Tanjong Malim Complex Date raised: 21-23 Jan 2013 Major or Minor: Minor Raised by: Simon Selvaraj Aspect of standard: 5.3.1 Documented identification of all waste products and sources of pollution Evidence of non-conformity: It was found that, the list of waste generated with source of pollution, does not completely cover all aspects in the estates.

Auditors signature:

Date: 23/01/2013 Proposed corrective action / improvement action by company. Timeline for conformance: Next annual surveillance audit.

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RSPO Principles & Criteria Main Surveillance Assessment Report Report Number CU827183

NON CONFORMITY REPORT NC number: 10/2013 Client name: Tanjong Malim Complex Date raised: 21-23 Jan 2013 Major or Minor: Minor Raised by: Simon Selvaraj Aspect of standard: 5.3.2 Having identified wastes and pollutants, an operational plan should be developed and implemented, to avoid or reduce pollution. Evidence of non-conformity: Schedule wastes are found to be stored together with other general items.

Auditors signature:

Date: 23/01/2013 Proposed corrective action / improvement action by company. Timeline for conformance: Next annual surveillance audit.

NON CONFORMITY REPORT NC number: 11/2013 Client name: Tanjong Malim Complex Date raised: 21-23 Jan 2013 Major or Minor: Minor Raised by: Simon Selvaraj Aspect of standard: 5..6.1 Documented plans to mitigate all polluting activities (Cross ref to C5.1.) Evidence of non-conformity: The assessment of polluting activities has conducted which incorporated in EIA, covering the environmental aspects and impact in actifity/area, how the case is happened (normal, abnormal and emergencies) the measures of consequences, adequaty of existing control, determine level and priority of risk, and legal implication. However, plan to reduce the pollution and emission is not complete in both of mill and estates.

Date: 23/01/2013 Proposed corrective action / improvement action by company. Timeline for conformance: Next annual surveillance audit.

NON CONFORMITY REPORT NC number: 12/2013 Client name: Tanjong Malim Complex Date raised: 21-23 Jan 2013 Major or Minor: Minor Raised by: Simon Selvaraj Aspect of standard: 6.5.3 Growers and millers provide adequate housing, water supplies, medical, educational and welfare amenities in accordance with Workers’ Minimum Standard of Housing and Amenities Act 1990 (Act 446) or above, where no such public facilities are available or accessible. Evidence of non-conformity: Workers have been using water directly from the river without proper treatment at their houses. No evidence to show that, RSPOPC-SUM-REPORT.F01 JULY2013 Page 27 of 34 Control Union (Malaysia) Sdn. Bhd. 150-A, 1st Floor, Persiaran Raja Muda Musa, Off Jalan Sg Bertih, Teluk Gadong, 41100, Klang, Selangor. Malaysia. Tel: +603-3377 1600 / 1700

RSPO Principles & Criteria Main Surveillance Assessment Report Report Number CU827183

the estate has carried out tests on the water to identify, if the water is safe to use/consume.

Date: 23/01/2013

NON CONFORMITY REPORT NC number: 13/2013 Client name: Tanjung Malim Complex Date raised: 21-23 Jan 2013 Major or Minor: Minor Raised by: Simon Selvaraj Aspect of standard: 6.9 A policy to prevent sexual harassment and all other forms of violence against women and to protect their reproductive rights is developed and applied. Evidence of non-conformity: The policy to prevent sexual harassment and all other forms of violence against women are evidenced but the policy does not indicate on the reproductive rights.

Date: 23/01/2013

NON CONFORMITY REPORT NC number: 14/2013 Client name: Tanjung Malim Complex Date raised: 21-23 Jan 2013 Major or Minor: Minor Raised by: Simon Selvaraj Aspect of standard: 6.11.1 Demonstrable contributions to local development that are based on the results of consultation with local communities. Evidence of non-conformity: Management is allocating contribution to neighboring societies; however, there is no evidence of consultation is made against the sum being contributed.

Date: 23/01/2013

4.4.2 Observations Raised During this Audit Non noted during this audit

4.4.3 Non-Conformity Identified during the last ASA Not applicable as this is the Main Assessment

4.4 Issues that were raised during the Stakeholder Consultation, if any Stakeholders were either informed by the client or by Control Union via the RSPO website.  For Main Assessments, a 30 day Stakeholder consultation announcement is published on the RSPO website prior to the audit. The same announcement is circulated by the client prior to the audit  For subsequent Annual Assessments, it is based on stakeholders reading the approved public summary reports available on the RSPO website, the client’s procedures in receiving on-going feedback or if feedback was sent directly to Control

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RSPO Principles & Criteria Main Surveillance Assessment Report Report Number CU827183

Union prior to an audit or thorough RSPO complaints procedures.

During each assessment, the audit team will review the company’s implemented procedures in receiving feedback and will execute field visits and interviews. Not limited to the following questions, any feedback received is reviewed and summarized in this summary report for either Part 2 – Partial Certification or Part 4 – Assessment Findings above or noted below, if applicable: 1. Do you have any remarks on the RSPO standard? 2. What is your relation with the applicant? 3. Are there any plantation or mill management practices that affect you? 4. Do you consider any management is in conflict with the RSPO principles and criteria? 5. Do you have any suggestions for management? 6. Are you aware of any HCV in the plantations or in adjacent land? 7. Are you aware of any endangered or rare species? 8. Are there any adverse (or positive) effects on local communities? 9. Additional comments? 11. Do you have any comments about the assessment team and would you like to meet with them? 12. Do you have any comments for the client’s management of any other plantations? Subject raised Company response and Audit team findings proposed action to be taken Department of Environment The company will look into this issue To be follow up on next audit. -Report about the ammonia smell and will address it accordingly. from the Latex factory. Health Department Will continue to do so. Positive comments -Control of disease eg: Dengue mill or Estate fully support to control the disease.

Trade Union - Housing project for The company will speed up the plan To be follow up on next audit. workers is still not in progress. and will work with budget planning.

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RSPO Principles & Criteria Main Surveillance Assessment Report Report Number CU827183

PART 5: RSPO SUPPLY CHAIN CERTIFICATION The palm mill mentioned in the scope of the audit was audited against the requirements of the following: RSPO Supply Chain Certification Systems. November 2011. RSPO Supply Chain Certification Standard. November 2011.

5.1 POM Included In The Scope Of The Audit Name Mill Location Supply Chain Model Palm Oil Mill Capacity (POM) MT/Hour Address (IP or SG or MB) Kilang Kelapa Sawit Beg Berkunci No. 3, 35909, Tanjung 20 MB Tanjung Malim Malim, Perak

5.2 Confirmation Of The Company’s Summary Of Annual Certified Volume Of RSPO Certified Palm Oil And Palm Kernel Over A Specified Period Product CPO (MT) PK (MT) Specified 12 month period CU Code Forecasted volumes between 31/1/2013 to 30/1/2014. POM 1 25,200 6,000 See also 1.6 above.

5.3 Summary Report Including A Brief Description Of The Scope Of Certification Tanjong Malim palm oil mill receives FFB from their own supply base and external FFB suppliers. This is processed into CPO and Palm Kernel as a product, using the RSPO SCCS MB model. The mill is able to handle certified products, as all the system procedures are in place. Furthermore, all the workers were trained with the RSPO SCCS requirements. A full RSPO SCCS certification audit was carried out during this main assessment and the findings support the certification decision, based on supply chain model, listed above.

5.4 Monthly Records of Certified and Uncertified FFB Received Since the Last Audit No MONTH-YEAR Certified Supply Bases (MT), Uncertified Supply Bases (MT), if any Total (MT) if main, put in the supply letter as per offer 1 N/A since it is Main assessment

5.5 Monthly Records of Certified CPO and PK Produced Since the Last Audit No MONTH-YEAR Certified CPO (MT) Certified PK Total (MT) 1 N/A since it is Main assessment

5.6 Records of Certified CPO & PK Sold under GreenPlam to Buyers since the Last Audit, if Any Certified CPO Certified PK No Buyers Name Green Palm Trading No (MT) Sold (MT) Sold 1 N/A since it is Main assessment

5.7 Records of Certified CPO & PK Sold under UTZ eTrace to Buyers since the Last Audit, if Any Certified CPO Certified PK No Buyers Name UTZ eTrace Trading No (MT) Sold (MT) Sold 1 N/A since it is Main assessment

5.8 Non-Conformities Identified during this Audit Timeline for compliance: 1. All non-conformances observed during an audit shall be classified as ‘major’ since all requirements for Supply Chain certification have to be met before granting certification. 2. For Main Assessments, all non-conformances shall be addressed satisfactorily by the operation before certification may be granted by the certification body. If non-conformances are not addressed within three

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RSPO Principles & Criteria Main Surveillance Assessment Report Report Number CU827183

(3) months of the audit, a full re-audit shall be required. The certification body shall assess the effectiveness of the corrective and/or preventive actions taken before closing out the non-conformances. 3. For Annual Surveillance Assessments, non-conformances raised after the certification are serious (i.e. must be considered as a major) and the integrity of the RSPO Supply Chain Certification is at risk. A maximum of one month is to be given to the certified client to satisfactorily address the non-conformance. The certification body shall assess the effectiveness of the corrective and/or or preventive actions taken. Should the nonconformance not be addressed within the one month maximum timeframe, a suspension or withdrawal of the certificate and a full re-audit may be necessary. 4. If no non-conformances are observed at an audit or when the corrective action plan has satisfactorily addressed raised non-conformance(s), the client shall be recommended for (re-) certification. Non-were raised during this audit.

5.9 Description of the Organizational Management Systems Including organizations, management and operational systems to ensure compliance with the RSPO Supply Chain Certification Systems and Standards as detailed above It is the responsibility of the department heads to ensure that they and their subordinates comply with the requirements and procedures stated in SOP manual. It is their responsibility to maintain records that will allow verification of the RSPO status of the material.

The MR is having the overall responsibility for and authority over the implementation of the requirements and compliance with all applicable requirements. He is having the full understanding and awareness of supply chain certification system and the facilities procedures for the implementation of the standard.

5.10 Final Certification decision by Control Union for the RSPO SCCS Audit of the POM Recommendations made: Yes Summary of non- No non-compliance found. compliances: Certification status of client: The POM included in the scope of this audit demonstrated full compliance with the RSPO SCCS.

With effect from the certification date given in the RSPOPC certificate, this POM mentioned in the scope of this report is considered to be certified in accordance with the RSPO SCCS.

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RSPO Principles & Criteria Main Surveillance Assessment Report Report Number CU827183

PART 6: CERTIFIED ORGANISATION’S ACKNOWLEDGEMENT OF INTERNAL RESPONSIBILITY

6.1 Date of next ASA The provisional date for the next ASA is: Between 9 -12 months from the certification decision date.

6.2 Date for Closure of Non-Conformities See sections above for details of NC’s, if any  All major NCs to be closed by: All Major raised is closed  All minor NCs to be closed by: Before next surveillance audit

6.3 Signing by the Client I the undersigned, being the most senior relevant management representative of the operation seeking or holding certification, agree with the contents and audit findings as presented in this document.

I also confirm:  Acceptance of liability in execution of the instructions given.  That this company was made aware that the findings of the audit team are tentative; pending review and decision making by the duly designated representatives of Control Union Certifications.  That during the closing meeting all agenda items was covered by the Lead Auditor.

Acknowledged by: Name: Mr. Sin Chuan Eng Position: Head of Sustainability (Plantations) Date: 20/5/2013 Signature

6.4 Signing by the Lead Auditor I the undersigned, being the Lead Auditor, confirm that this report is an accurate record of the findings and of the closing meeting. I further confirm that the summary of the findings as presented in this report are a true representation of the actual findings of the audit team.

Acknowledged by: Name: Simon Selvaraj Position: Lead Auditor Date: 12/5/2013 Signature

6.5 Signing by the Certifier I the undersigned, being the Certifier, confirm that the information and conclusions included in this report have been prepared in good faith and that the certification decision has been based upon this information.

Acknowledged by: Name: Hari Naveen Christopher Position: Certifier Date: 12/7/2013 Signature

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RSPO Principles & Criteria Main Surveillance Assessment Report Report Number CU827183

PART 7: APPENDICIES

Appendix 1: Location Map for this Certification Unit From 1.9, the location map(s)

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RSPO Principles & Criteria Main Surveillance Assessment Report Report Number CU827183

Appendix 2: List of Abbreviations BRC British Retail Consortium CHRA Chemical Health Risk Assessment CoC Chain of Custody CPO Crude Palm Oil CSR Corporate Social Responsibility CU Control Union CUC Control Union Certifications DOE Department of Environment EFB Empty Fruit Bunch EIA Environment Impact Assessment ERT Endangered Rare or Threatened species EU European Union FFB Fresh Fruit Bunch FSC Forest Stewardship Council FSC COC Forest Stewardship Council Chain of Custody FSC FM Forest Stewardship Council Forest Management GGL Green Gold Label GMP Good Manufacturing Practice GOTS Global Organic Textile Standard GTP Good Trading Practice GPS Global Positioning System HACCP Hazard Analysis and Critical Control Point HCV High Conservation Value HCVF High Conservation Value Forest IPM Integrated Pest Management JAS Japanese Agricultural Standard MDC MDC Publishers Sdn Bhd ( Company Name) MSDS Material Safety Data Sheet NC Non Conformity OE Organic Exchange OSH Occupational Safety and Health OSHAS Occupational Safety and Health Assessment Scheme P&C Principle and Criteria PEFC Programme for the Endorsement of Forest Certification PK Palm Kernel POME Palm Oil Mill Effluent PPE Personal Protective Equipment RSPO Roundtable on Sustainable Palm Oil RSPO NI Roundtable on Sustainable Palm Oil National Interpretation SA8000 Social Accountability 8000 Sdn Bhd Sendirian Berhad SIA Social Impact Assessment SOCSO Social Security Organisation SOP Standard Operating Procedure USDA/NOP United States Department of Agriculture – National Organic Program MT Metric Tonnes WHO World Health Organization

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