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Confidential CONFIDENTIAL SIRIM QAS INTERNATIONAL SDN. BHD. Building 4, SIRIM Complex, No. 1 ,Persiaran Dato‟ Menteri, Section 2, P.O. Box 7035, 40911 Shah Alam, Selangor, Malaysia. File Ref: ES11320001 RSPO SURVEILLANCE AUDIT REPORT CLIENT : PPB Oil Palms Berhad Saremas 1 Estate, Bintulu, Sarawak ADDRESS OF MAIN SITE AUDITED (In the case of multisite certification, list additional sites in attachments): Palm Oil Mill : Saremas 1 Palm Oil Mill KM 115, Bintulu-Miri Road 97008 Bintulu SARAWAK Supply Base : (1) Saremas 1 Estate 18 KM off KM 115, Bintulu-Miri Road 97008 Bintulu SARAWAK (2) Suai Plantation 8 KM off KM 115, Bintulu-Miri Road 97008 Bintulu SARAWAK ASSESSMENT DATE : 20 to 24 June 2011 STANDARD : RSPO MYNI: 2008 SCOPE OF CERTIFICATION : Saremas 1 Palm Oil Mill and its supply base (Saremas 1 Estate and Suai Plantation) Report by Audit Team Leader Report Reviewed by: Name : Dr. S.K.Yap Name : RADZIAH MOHD DAUD Signature : Date : 30 March 2012 Signature : Date : 27 APRIL 2012 MSC/RSPO/DOC/07-02 Page 1 of 72 Issue 1 Rev 0 TABLE OF CONTENTS Page No. 1 INTRODUCTION……………………………………………………………………………………………… 5 1.1 Description of the Certification Unit (Estate and Mill)……………………………………………… 5 1.2 Location of Mills and Estates…………………………………………………………………………. 5 1.3 Description of Supply Base (Fruit Sources)………………………………………………………… 6 1.4 Work Force……………………………………………………………………………………………... 6 1.5 Date of Planting and Cycle…………………………………………………………………………… 7 1.6 Other Management System Certifications Held……………………………………………………. 7 1.7 Organisational Information/ Contact Person………………………………………………………... 7 1.8 Approximate Tonnages Offered for Certification (CPO and PK)…………………………………. 7 2 ASSESSMENT PROCESS………………………………………………………………………………….. 8 2.1 Assessment Methodology (Program, Site Visits)…………………………………………………... 8 2.2 Date of Next Surveillance Assessment……………………………………………………………… 8 2.3 Assessment Team…………………………………………………………………………………….. 8 3 NON –CONFORMITY REPORTS RAISED DURING THE PREVIOUS STAGE 2 AUDIT AND CORRECTIVE ACTIONS TAKEN………………………………………………………………………….. 10 4 ASSESSMENT FINDINGS…………………………………………………………………………………... 11 Principle 1 : Commitment to Transparency………………………………………………………. 11 Principle 2 : Compliance with Applicable Laws and Regulations……………………………… 12 Principle 3 : Commiment to Long-Term Economic and Financial Viability…………………… 17 Principle 4 : Use of Appropriate Best Practices by Growers and Millers…………………….. 18 Principle 5 : Environmental Responsibility and Conservation of Natural Resources and Biodiversity……………………………………………………………………….. 34 Principle 6 : Responsible Consideration of Employees and of Individuals and Communities Affected by Growers and Mills……………………………………………………….. 40 Principle 8 : Commitment to Continuous Improvement on Key Areas of Activity…………… 51 5 ASSESSMENT RECOMMENDATION……………………………………………………………………... 53 6 ORGANIZATION’S ACKNOWLEDGEMENT OF INTERNAL RESPONSIBILITY AND FORMAL SIGN-OFF OF ASSESSMENT FINDINGS………………………………………………………………… 54 Tables: Table 1 : Coordinates of S1 Certification Unit (Mill and Estates)…………………………. 6 Table 2 : FFB Contribution of Each Estate to Saremas 1 Palm Oil Mill………………….. 6 Table 3 : Total and Composition of Workers in S1………………………………………….. 6 Table 4 : Plantations and Area Planted………………………………………………………. 7 Table 5 : Approximate CPO and PK Tonnage Claimed for Certification Year 2011……. 7 Photos: Photo 1 : Relevant Licences and Documents on Display in the Estate‟s Office………… 13 Photo 2 : Boundary Marker With Neighbouring Plantation…………………………………. 15 Photo 3 : One of the Longhouses Within Saremas 1 Build by a Local Community……… 16 Photo 4 : Distribution of Empty Fruit Bunches as Fertilizers in the Field…………………. 20 Photo 5 : Extensive Planting of Mucuna bracteata on the Slopes…………………………. 21 Photo 6 : Signage Clearly Showing Riparian Buffer Belt and Activities Prohibited MSC/RSPO/DOC/07-02 Page 2 of 72 Issue 1 Rev 0 Erected Next to a Water Sampling Point………………………………………… 22 Photo 7 : A Chemical Store With Safety Posters and Procedure on Mitigation Action When Accidents Occur……………………………………………………………... 27 Photo 8 : Record of Medical Surveillance of an Herbicide Sprayer………………………. 28 Photo 9 : Sprayers and Fertilizers Workers Equipped with Appropriate PPE…………… 31 Photo 10 : Plan for Emergency Evacuation and Gathering Points…………………………. 32 Photo 11 ; HCV Sites Being Identified in Saremas 1 Estate………………………………... : HCV35 Sites Being Identified in Saremas 1 Estate……………………………… Photo 12 : Recycling Bins at the Land Fill Site……………………………………………….. 36 Photo 13 : Landfill for Domestic Waste in the Estate………………………………………… 36 Photo 14 : Sign Erected on Prohibition of Burning of Domestic Waste at Line Side……... 39 Photo 15 : New Housing With Water and Electricity Supply and Proper Sanitation Provided for Workers……………………………………………………………….. 45 Photo 16 : POME Methane Recovery Plant…………………………………………………... 52 Attachments: Attachment 1 : Location map of S1 Certification Unit (mill and estates)………………………… 55 Attachment 2 : Surveillance Audit Programme……………………………………………………… 56 Attachment 3 : Detail of Non-Conformity Reports (NCRs) Raised During the Previous Stage 2 Audit and Corrective Actions Taken………………………………………. 64 Attachment 4 : Details on the NCR (including corrective actions taken) and OFIs Raised During this Surveillance Audit………………………………………………………. 69 MSC/RSPO/DOC/07-02 Page 3 of 72 Issue 1 Rev 0 Abbreviations: CHRA Chemical Health Risk Assessment CPO Crude Palm Oil CSDS Chemical Safety Data Sheet CSR Corporate Social Responsibility DoE Department of Environment DOSH Department of Occupational Safety and Health EFB Empty Fruit Bunch EHA Estate Hospital Assistant EIA Environmental Impact Assessment EPF Employees Provident Fund EQA Environmental Quality Act ERT Endangered, Rare and Threatened Species EARA Environmental Auditors Registration Association FFB Fresh Fruit Bunch FSC Forest Stewardship Council GAP Good Agricultural Practice HCV High Conservation Value HIRARC Hazard Identification, Risk Assessment and Risk Control IPM Integrated Pest Management ISO International Organization for Standardization IRCA International Register of Certificated Auditors IUFRO International Union of Forest Research Organization JCC Joint Consultative Committee KPI Key Performance Index MC&I Malaysian Criteria and Indicators for Forest Management Certification M.E Master of Engineering MBA Master of Business Administration MDP Management Development Programme MIS Management Information Services MoU Memorandum of Understanding M. Phil Master of Philosophy MPOA Malaysian Palm Oil Association MPOB Malaysia Palm Oil Board MS GAP-OP Malaysian Standard Good Agricultural Practice – Oil Palm MTCS Malaysian Timber Certification Scheme MYNI Malaysia National Interpretation NREB Natural Resources and Environment Board OER Oil Extraction Rate OSH Occupational Safety and Health OHSAS Occupational Health and Safety Assessment Series OHSMS Occupational Health and Safety Management System Ph.D. Doctor of Philosophy PIC Person in-Charge PK Palm Kernel POME Palm Oil Mill Effluent PPE Personnel Protective Equipment RSPO Roundtable on Sustainable Palm Oil SHO Safety and Health Officer SIA Social Impact Assessment SOP Standard Operating Procedure TOR Terms of Reference USA United States of America WTP Water Treatment Plant WWF World Wide Fund for Nature MSC/RSPO/DOC/07-02 Page 4 of 72 Issue 1 Rev 0 RSPO SURVEILLANCE AUDIT REPORT 1. INTRODUCTION 1.1 Description of the Certification Unit (Estate and Mill) The certification unit (CU) being assessed was Saremas 1 (S1) which is part of Saremas Sdn. Bhd. (SSB). SSB is wholly owned subsidiary of PPB Oil Palms Berhad (PPB Oil Palms). The S1 CU comprises the Saremas 1 Palm Oil Mill, Saremas 1 Estate and Suai Plantation. The Stage 2 audit on S1 against the requirements of the RSPO MY-NI (2008) was conducted by SIRIM QAS International Sdn. Bhd. (SIRIM QAS International) on 27 November – 2 December 2008. Three site verification audits were conducted on 28-29 September, 7 October and 7 November 2009 to check on the effectiveness of the corrective actions taken by S1 to address the Non Compliance Reports (NCRs) raised during the Stage 2 audit. S1 was finally certified for RSPO sustainable palm oil production in June 2010. As of June 2011, there was a restructuring of the plantation businesses within the PPB Oil Palms. SSB is now made up of Saremas 1 Estate, Saremas 2 Estate and the Suai Plantation while the Segarmas Estate and Kaminsky Estate are now under the Segarmas Sdn Bhd and Kaminsky Sdn. Bhd respectively. S1 CU comprised Saremas 1 Palm Oil Mill, and the CU‟s own estates of Saremas 1 and Suai Plantation. Saremas 1 Palm Oil Mill commenced operations in 1992 with a processing capacity of 30 metric tonnes (MT) of FFB per hour. The processing capacity was later upgraded to 60 MT per hour in 1995. As S1 is a fully developed estate, Principle 7 of the RSPO Principles & Criteria is therefore not applicable. 1.2 Location of Mill and Estates Saremas 1 Palm Oil Mill and Saremas 1 Estate are located in the Miri District, Sarawak, Malaysia. They can be accessed by the Bintulu-Lahat Datu (BLD) Road from its junction with the Bintulu-Miri Road. The other access is through the Public Works Department (PWD) road from Simpang Jawa through Rumah Datu and the Suai Plantation which is linked back to the BLD Road. In the immediate vicinity of S1 are longhouses and other oil palm plantations. There are five longhouses namely Rumah Bunsu, Rumah Tapu, Rumah Gundi, Rumah Merudi and Rumah Rimbo. Outside S1, there are four longhouses namely Rumah Sabang, Rumah Ringkai (Rumah
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