IOI CORPORATION BERHAD RSPO Membership No: 2-0002-04-000-00 PLANTATION MANAGEMENT UNIT Ladang Sabah Grouping Sandakan, Sabah, Malaysia INTERTEK CERTIFICATION INTERNATIONAL SDN BHD (188296-W) Report No.: R9284/12-4 IOI Corporation Berhad Page 2 of 63 (Ladang Sabah Grouping, Annual Surveillance Assessment-03) ANNUAL SURVEILLANCE ASSESSMENT ON RSPO CERTIFICATION ASSESSMENT REPORT IOI CORPORATION BERHAD RSPO Membership No: 2-0002-04-000-00 PLANTATION MANAGEMENT UNIT Ladang Sabah Grouping Sandakan, Sabah, Malaysia Certificate No: RSPO 928488 Issued date: 3 Apr 2013 Expiry date: 2 Apr 2018 Assessment Type Assessment Dates Initial Certification (Main Assessment) 15-19 Oct 2012 Annual Surveillance Assessment (ASA-01) 11-14 Mar 2014 Annual Surveillance Assessment (ASA-02) 09-12 Feb 2015 Annual Surveillance Assessment (ASA-03) 15-18 Feb 2016 Annual Surveillance Assessment (ASA-04) Re-Certification Intertek Certification International Sdn Bhd [formerly known as Moody International Certification (Malaysia) Sdn Bhd] 6-L12-01, Level 12, Tower 2, Menara PGRM No. 6 & 8 Jalan Pudu Ulu, Cheras, 56100 Kuala Lumpur, Malaysia. Tel: +00 (603) 9283 9881 Fax: +00 (603) 9284 8187 Email: [email protected] Website: www.intertek.com INTERTEK RSPO Report: 15-18 Feb 2016 (ASA-03) INTERTEK CERTIFICATION INTERNATIONAL SDN BHD (188296-W) Report No.: R9284/12-4 IOI Corporation Berhad Page 3 of 63 (Ladang Sabah Grouping, Annual Surveillance Assessment-03) TABLE OF CONTENTS Section Content Page No 1.0 SCOPE OF ASSESSMENT 1.1 Introduction 4 1.2 Location (address, GPS and map) mill, estates and hectarage 4 1.3 Description of supply base (fruit sources) 5 1.4 Year of plantings and cycle 6 1.5 Summary of Land Use – Conservation and HCV Areas 6 1.6 Other certifications held and Use of RSPO Trademarks 7 1.7 Organizational information/contact person 7 1.8 Tonnages Verified for Certification 8 1.9 Time Bound Plan 9 1.10 Abbreviations Used 11 2.0 ASSESSMENT PROCESS 2.1 Assessment Methodology, Plan & Site Visits 12 2.2 Date of next scheduled visit 12 2.3 Qualifications of the Lead Assessor and Assessment Team 12 2.4 Certification Body 12 2.5 Process of Stakeholder consultation 13 3.0 ASSESSMENT FINDINGS 3.1 Summary of findings 14-45 3.2 Status of Identified Noncompliance and Corrective Actions, Observations and 46-48 Identified Positive Elements 3.3 Summary of Feedback Received from Stakeholders and Findings 48-51 4.0 ASSESSMENT CONCLUSION AND RECOMMENDATION 4.1 Acknowledgement of Internal Responsibility and Confirmation of Assessment 51 Findings 4.2 Intertek RSPO Certification Details for Ladang Sabah Grouping 52 APPENDICES Appendix A Qualifications of the Lead Assessor and Assessment Team 54 Appendix B Assessment Plan 55 Appendix C Maps of location – Mill, Estates, Conservation and HCV areas 57 Appendix D Photographs of Assessment findings at Ladang Sabah Grouping 61 Appendix E Time Bound Plan for Other Plantation Management Units 62-63 INTERTEK RSPO Report: 15-18 Feb 2016 (ASA-03) INTERTEK CERTIFICATION INTERNATIONAL SDN BHD (188296-W) Report No.: R9284/12-4 IOI Corporation Berhad Page 4 of 63 (Ladang Sabah Grouping, Annual Surveillance Assessment-03) 1.0 SCOPE OF ASSESSMENT 1.1 Introduction This Annual Surveillance Assessment (ASA-03) was conducted on the Plantation Management Unit (PMU) Ladang Sabah Grouping of IOI Corporation Berhad (hereafter abbreviated as IOI), from 15 to 18 February 2016, to assess the organization’s operations of the mill and its supply bases compliance against the RSPO Principles and Criteria (Apr 2013), Malaysian National Local Indicators (2014) and the RSPO Supply Chain Certification Standard (2014) for Palm Oil Mill. The plantation management unit (PMU) or management unit is equivalent to a certification unit as defined in the RSPO Certification Systems Document. Each PMU consists of one mill and its supply bases which are made up of estates owned by IOI Corporation Berhad (IOI) 1.2 Location (address, GPS and map) of palm oil mill and estates Ladang Sabah Grouping consists of one (1) palm oil mill, namely Ladang Sabah Palm Oil Mill and eight (8) own supplying estates as indicated in Table 1 below, which includes the addresses and GPS locations of the mill and estates. The location maps are provided in Appendix C. Table 1: Address of Palm Oil Mill, Estates and GPS Location GPS Reference Name Address Latitude Longitude Ladang Sabah Palm Oil Mill, 05o 44.449’ N 117o 36.623’ E Ladang Sabah Palm Oil Mill Mile 45, Sandakan/Telupid Road, (Mill Capacity: 90mt/hr) WDT 164, 90009 Sandakan, Sabah. 1. Moynod estate Moynod Estate, 05o 44.449’ N 117o 36.623’ E Mile 45, Sandakan/Telupid Road, WDT 164, 90009 Sandakan, Sabah. 2. Luangmanis estate Luangmanis Estate, 05o 45.800’ N 117o 36.382’ E Mile 45, Sandakan/Telupid Road, WDT 164, 90009 Sandakan, Sabah. 3. Laukin estate Laukin Estate, 05o 46.708’ N 117o 31.946’ E Mile 45, Sandakan/Telupid Road, WDT 164, 90009 Sandakan, Sabah. 4. Sg. Sapi estate Sungai Sapi Estate, 05o 48.452’ N 117o 31.020’ E Mile 45, Sandakan/Telupid Road, WDT 164, 90009 Sandakan, Sabah. INTERTEK RSPO Report: 15-18 Feb 2016 (ASA-03) INTERTEK CERTIFICATION INTERNATIONAL SDN BHD (188296-W) Report No.: R9284/12-4 IOI Corporation Berhad Page 5 of 63 (Ladang Sabah Grouping, Annual Surveillance Assessment-03) 5. Labuk estate Labuk Estate, 05o 42.785’ N 117o 29.769’ E Mile 45, Sandakan/Telupid Road, WDT 164, 90009 Sandakan, Sabah. 6. Terusan Baru estate Terusan Baru Estate, 05o 45.853’ N 117o 36.623’ E Mile 45, Sandakan/Telupid Road, WDT 164, 90009 Sandakan, Sabah. 7. Bimbingan 1 estate Bimbingan 1 Estate, 05o 37.276’ N 117o 26.755’ E Mile 45, Sandakan/Telupid Road, WDT 164, 90009 Sandakan, Sabah. 8. Bimbingan 2 estate Bimbingan 2 Estate, 05o 37.177’ N 117o 25.376’ E Mile 45, Sandakan/Telupid Road, WDT 164, 90009 Sandakan, Sabah. 1.3 Description of supply base (fruit sources) The supply base i.e. FFB sources to the POM at Ladang Sabah Grouping PMU are from the abovementioned 8 estates only. Verification done on site during this Assessment confirmed that there was no outgrower / independent supplier / smallholder involved in the supply of FFB to the said PMU. Details of the planted hectarage for the FFB supply for Ladang Sabah Grouping are as shown in Table 2 below. Table 2: Estate Area Summary and FFB Production Area Summary (ha) Area Summary (ha) Estate – FY Jul 2013/ Jun 2014 – FY Jul 2014 / Jun 2015 Certified Area Planted Area Certified Area Planted Area 1. Moynod estate 3,044 2,800 3,042.86 2,781 2. Luangmanis estate 2,713 2,504 2,713.29 2,500 3. Laukin estate 2,128 1,998 2,128.00 1,998 4. Sg. Sapi estate 1,299 1,220 1,299.30 1,220 5. Labuk estate 2,669 2,367 2,668.50 2,367 6. Terusan Baru estate 2,504 2,269 2,503.52 2,266 7. Bimbingan 1 estate 1,974 1,795 1,974.20 1,795 8. Bimbingan 2 estate 1,919 1,735 1,918.80 1,735 Total: 18,250 16,688 18,248.47 16,662 Percentage: 100 % 91.44% 100 % 91.31% Notes: 1. This Assessment covered the overall land use for oil palm plantation areas, and the identified Conservation areas including HCV areas marked out at the estates. 2. The estates sampled for this Assessment have been selected based on their potential risks on social, environmental and biodiversity issues such as their proximity to forest reserves, hill sides, riparian zones and high conservation value areas. INTERTEK RSPO Report: 15-18 Feb 2016 (ASA-03) INTERTEK CERTIFICATION INTERNATIONAL SDN BHD (188296-W) Report No.: R9284/12-4 IOI Corporation Berhad Page 6 of 63 (Ladang Sabah Grouping, Annual Surveillance Assessment-03) 1.4 Summary of plantings and cycle The 8 estates had been developed since 1991. 6 estates are still in the 1st cycle of planting, whilst 2 estates i.e. Labuk estate is in the 2nd cycle and Terusan Baru estate have commenced replanting in 2014 (2nd cycle). The age profile is as shown in Table 3. Table 3: Age Profile of Planted Oil Palm Mature OP (ha) Immature OP Year of Cycle of Estate Name – Above 3 (ha) – 3 years Planting Planting years & below 1. Moynod estate 1991-1998 1st 2,781 Nil st 2. Luangmanis estate 1991-1996 1 2,500 Nil st 3. Laukin estate 1995-1997 1 1,998 Nil st 4. Sg. Sapi estate 1995-1998 1 1,220 Nil nd 5. Labuk estate 2008-2012 2 2,367 Nil st 1993-2000 / 1 6. Terusan Baru estate nd 1,613 653 2014-2015 2 st 7. Bimbingan 1 estate 1996-1997 1 1,795 Nil st 8. Bimbingan 2 estate 1996-1997 1 1,735 Nil Total 16,009 653 1.5 Summary of Conservation and HCV Areas The summary of Conservation and HCV Areas as identified in Ladang Sabah Grouping during this assessment is shown in Table 4 below: Table 4: Conservation and HCV Areas # Statement of Land Use (Ha) 2015 (ASA-02) 2016 (ASA-03) Hectarage – Ha Hectarage – Ha 1 Planted Area (ha) – Oil Palm - Mature 16,253 16,009 - Immature 422 653 2 Conservation Area (ha) - comprising buffer zones along small streams, hilly areas, swampy and 155 162.45 unplantable areas 3 HCV Area (ha) - comprising buffer zones near forest reserves, water catchments, burial & 8.2 172.29* religious sites Remark*: significant increase of hectarage of HCV was due to recent review & re-classification of steep hill at Terusan Baru estates. INTERTEK RSPO Report: 15-18 Feb 2016 (ASA-03) INTERTEK CERTIFICATION INTERNATIONAL SDN BHD (188296-W) Report No.: R9284/12-4 IOI Corporation Berhad Page 7 of 63 (Ladang Sabah Grouping, Annual Surveillance Assessment-03) 1.6 Other certifications held and Use of RSPO Trademarks Currently, the other certification held by IOI-Ladang Sabah Grouping PMU is the ISCC-EU certification.