RSPO 4 SURVEILLANCE ASSESSMENT REPORT SIME DARBY PLANTATION

CONFIDENTIAL

1

RSPO 4th SURVEILLANCE ASSESSMENT REPORT

SIME DARBY PLANTATION SDN. BHD. CERTIFICATION UNIT (SOU 28) - BINUANG

KUNAK DISTRICT, SABAH, MALAYSIA

ASSESSMENT DATE: 14th- 17th January 2013

SIRIM QAS INTERNATIONAL SDN. BHD. Building 4, SIRIM Complex,

No. 1 , Persiaran Dato’ Menteri, Section 2, 40700 Shah Alam, Selangor Darul Ehsan,

Malaysia. Tel: 603 5544 6448 Fax: 603 5544 6763

Website : www.sirim-qas.com.my

http://www.sirim-qas.com.my/

MSC/RSPO/DOC/06-02 Page 2 of 77 Issue 1 Rev 0

TABLE OF CONTENT Page No

1.0 Scope of the Certification Assessment 1.1 Introduction.................................................................................................. 6 1.2 Location of Mills and Estates....................................................................... 6 1.3 Production Volume of All Certified Products................................................ 7 1.4 Certification Details...................................................................................... 7 1.5 Description of The Supply Base................................................................. 7 1.6 Date of Planting and Replanting Cycle........................................................ 8 1.7 Time Bound Plan for Other Management Units........................................... 10 1.8 Progress of Associated Smallholders / Small growers Towards Compliance with

Relevant Standard...........................................................

10 1.9 Organizational Information / Contact Person(s).......................................... 10 2.0 Assessment Process 2.1 Certification Body....................................................................................... . 10 2.2 Qualification of Lead Assessor and Assessment Team.............................. 11 2.3 Assessment Methodology........................................................................... 13 2.4 Date of Next Surveillance Visit.................................................................... 13 3.0 Assessment Findings 3.1 Summary of findings.................................................................................... 13 3.2 Identified Non-conformances....................................................................... 53

3.3 Status of Assessment Findings Previously Identified.................................. 53

3.4 Noteworthy Positive Observation................................................................. 53

3.5 Issues Raised by Stakeholders and Findings with Respect to the Issues……. 53

3.6 Supply Chain……………………………………………………………………………………………. 54 4.0 Certified organization’s Acknowledgement of Internal Responsibility and Formal sign-

off of assessment findings…………………………………………………………………………………….

58


Abbreviations:

ARM Agriculture Reference Manual

BOD Biochemical Oxygen Demand B.Sc. Bachelor of Science

CA Collective Agreement

CHRA Chemical Health Risk Assessment COD Chemical Oxygen Demand

CPO Crude Palm Oil CUs Certification Units

DID Drainage and Irrigation Department, Malaysia DOE Department of Environment

DOSH Department of Occupational Safety and Health

EAI Environmental Aspect Identification EARA Environmental Auditors Registration Association

EB Executive Board EFB Empty Fruit Bunch

EIA Environmental Impact Assessment EIE Environmental Impact Evaluation

EMP Environmental Management Plan

EPF Employees Provident Fund EQA Environmental Quality Act

ERT Endangered, Rare and Threatened Species FFB Fresh Fruit Bunch

FMA Factory Machineries Act FSC Forest Stewardship Council

GAP Good Agricultural Practice

GPS Global Positioning System Ha Hectares

HCV High Conservation Value HIRARC Hazard Identification, Risk Assessment and Risk Control

IEMA Institute for Environmental Management and Assessment IPM Integrated Pest Management

ISO International Organization for Standardization

IRCA International Register of Certificated Auditors JCC Joint Consultative Committee

MSDS Material Safety Data Sheet MOA Memorandum of Alliance or Agreement

MPOA Malaysian Palm Oil Association MPOB Malaysia Palm Oil Board

MYNI Malaysia National Interpretation

MYNI – WG Malaysia National Interpretation – Working Group NADOOPOD Notification of Accident, Dangerous Occurrence, Occupational Poisoning and

Occupational Disease

NCR Non-Conformity Report NGO Non Governmental Organisation

OER Oil Extraction Rate OG Oil & Grease


OSH Occupational Safety and Health

OSHA Occupational Safety and Health Act

OHSAS Occupational Health and Safety Assessment Series Ph.D. Doctor of Philosophy

PIC Person-In-Charge PK Palm Kernel

PMM Proposal of Mitigation Measure POM Palm Oil Mill

POME Palm Oil Mill Effluent

PPE Personal Protective Equipment PTW Permit To Work

QMS Quality Management System RSPO Roundtable on Sustainable Palm Oil

SIA Social Impact Assessment SDPSB Sime Darby Plantation Sdn. Bhd.

SOCSO Social Security Organization

SOU Strategic Operating Unit SOP Standard Operating Procedure

SPIEU Sabah Plantation Industry Employees Union TQEM Total Quality Environment Management

UNFCCC United Nations Framework Convention for Climate Change UKAS United Kingdom Accreditation Services

USA United States of America

USECHH Use and Standards of Exposure of Chemicals Hazardous to Health WWF World Wide Fund for Nature


List of tables Table 1: Certification units covered in the assessment

Table 2: Location and addresses of mills and estates

Table 3: Actual CPO and PK tonnage since date of last reporting period (16th January 2011 - 15th January 2012)

Table 4: Approximate CPO and PK tonnage (16th January 2012 – 15th January 2013)

Table 5: SOU 28 Binuang - Actual FFB production since date of last reporting period (16th January 2011 - 15th January 2012)

Table 6: Percentage of planted area in Binuang Estate by age and planting cycle

Table 7: Percentage of planted area in Jelata Bumi Estate by age and planting cycle

Table 8: Percentage of planted area in Tingkayu Estate by age and planting cycle

Table 9: Percentage of planted area in Sungang Estate by age and planting cycle

List of Attachment Attachment 1: Location map of SOU 28, 29 and 30 Sabah, Malaysia

Attachment 2: Surveillance Assessment Programme

Attachment 3: Detail of Non-conformities and Corrective Actions Taken

Attachment 4: Verification on Previous Assessment Findings


SURVEILLANCE ASSESSMENT REPORT 1.0 Scope of the Certification Assessment

1.1 Introduction This fourth Annual Surveillance Assessment report described the level of continued compliance of the

Strategic Operating Unit (SOU) 28 – Binuang, a certification unit of Sime Darby Plantation Sdn. Bhd. (SDPSB against the RSPO Principles &Criteria (P&C) Malaysian National Interpretation (MY-NI):2008. An SOU is equivalent to a certification unit as defined in the RSPO Certification Systems Document. An SOU consists of one mill and its supply bases.

Table 1 below shows the supply bases that were assessed. All of the estates belong to and owned by SDPSB. No outside crop was processed by the Binuang Palm Oil Mill.

Table 1: Certification Units Covered in the Assessment

No. Certification Unit Palm Oil Mill FFB Supplying Estates owned by SDPSB

1. SOU 28 Binuang Oil Mill Binuang Estate, Sungang Estate, Tingkayu Estate and Jelata Bumi Estate

The focus of the assessment team was to determine SDPSB Certification Units, SOU 28 – Binuang continued conformance against the RSPO P&C MYNI as well as to verify the actions taken on the previous assessment findings.

1.2 Location of Mills and Estates

SOU 28 is located in the Kunak District, Sabah, East Malaysia. The locations of the SOUs are shown in Attachment 1. Location details of the SOU 28 are shown in Table 2.

Table 2: Location and addresses of mills and estates

Certification Unit

Estate/Mill GPS Location

Location Address Latitude Longitude

SOU 28 - Binuang

Binuang Oil Mill 4o 42’ 15” N 118º 03’ 37” E 91207 Kunak, Sabah

Binuang Estate 4º 25΄ N 118º 26’ E 91207 Kunak, Sabah

Sungang Estate 4º 39΄ N 118º 07’ E 91207 Kunak, Sabah

Tingkayu Estate 4º 24’ N 118º 30’ E 91207 Kunak, Sabah

Jelata Bumi Estate 4o 40’ 30” N 118º 15’ 10” E 91207 Kunak, Sabah


1.3 Production Volume for All Certified Products Table 3: Actual CPO and PK tonnage since date of last reporting period (January 2012 - 31st December 2012)

Certification unit

FFB Processed

(tonne)

CPO Production

(tonne)

PK Production (tonne)

Certified CPO Tonnage

Certified PK Tonnage

SOU 28 198,019.02 44,004.84 9,647.18 31,265.57 9,860.44

Table 4: Approximate CPO and PK tonnage (July 2012 – June 2013)

Certification unit

FFB Processed

(tonne)

CPO Production

(tonne)

PK Production (tonne)

CPO Tonnage claimed for certification

(tonne)

PK Tonnage claimed for certification

(tonne) SOU 28 211, 170.65 48,049.03 10,546.33 47,783.83 10,498.53

1.4 Certification Details

The name of the certified Unit and its RSPO identification are as follows:

Parent company: Sime Darby Plantation Sdn. Bhd.

Certificate no RSPO 001 - Binuang Oil Mill

The date of certification was the date of the RSPO approval which was 16th January 2009.

The certification for SOU 28 - Binuang covers production from Binuang Oil Mill with FFB supplied by the company owned estates: Binuang, Tingkayu, Sungang and Jelata Bumi; and third parties which consist of smallholders.

1.5 Description of The Supply Base

The FFB is sourced from company owned estates that are certified and a small percentage from smallholders’ and small growers’ crop. Details of the FFB contribution from each source to SOU 28 are shown in the following tables:


Table 5: SOU 28 Binuang - Actual FFB Production Since Date of Last Reporting Period (January 2012 - 31st December 2013)

Estates FFB Production

Tonnes Percentage (%) Binuang 41,813.88 21.15%

Sungang 43,527.34 22.01%

Tingkayu 41,093.63 20.78%

Jelata Bumi 69,738.13 35.27%

3rd party (if any) 1,549.16 0.79%

Total 197,722.14 100.00

1.6 Date of Planting and Replanting Cycle

The dates of planting and age profiles for each estate under SOU 28 are detailed in the following tables.

Table 6: Percentage of planted area in Binuang Estate by age and planting cycle

Year of planting

Planting cycle (1st, 2nd, 3rd,

etc. Generation)

Mature / Immature Planted area

(ha) Percentage of

planted area (%)

1978 1st Mature 172.75 5.74 1979 1st Mature 129.7 4.31


1992 1st Mature 275.01 9.14 2002 2nd Mature 377.62 12.55

2005 2nd Mature 305.59 10.16

2007 2nd Mature 503.54 16.74 2009 2nd Mature 471.85 15.68

2010 2nd Immature 191.87 6.38 2011 2nd Immature 115.7 3.85

2012 2nd Immature 149.04 4.95 2013 2nd Immature 77.11 2.56

Total 3008.72 100.00


Table 7: Percentage of planted area in Jelata Bumi Estate by age and planting cycle

Year of planting


etc. Generation)


(ha) Percentage of

planted area (%)



2002 1st Mature 9.74 0.35

Total 2817.49 100.00

Table 8: Percentage of planted area in Tingkayu Estate by age and planting cycle

Year of planting


etc. Generation)


(ha) Percentage of

planted area (%)

P037 2nd Mature 157.73 6.65

P04T 2nd Mature 128.70 5.43

P05T 2nd Mature 357.37 15.07 P07T1 2nd Mature 360.50 15.21

P07T2 2nd Mature 251.50 10.61 P1993 1st Mature 329.92 13.91

P1996 1st Mature 323.03 13.62

P2009 2nd Immature 471.85 9.26 P2010 2nd Immature 242.84 10.24

Total 2371.08 100.00

Table 9: Percentage of planted area in Sungang Estate by age and planting cycle

Year of planting


etc. Generation)


(ha) Percentage of

planted area (%)

2011 2nd Immature 184.62 9.13

*2008 1st Mature 3.00 0.15

2002 1st Mature 246.71 12.20



Total 2021.69 100.00

*2008 new planting was a former old housing area.


1.7 Time Bound Plan for Other Management Units Initially, there were a total of 65 certification units under Sime Darby Plantation Sdn. Bhd. located in Peninsular Malaysia, Sabah & Sarawak in Malaysia and in Kalimantan, Sumatera & Sulawesi in Indonesia. 42 units in Malaysia and 23 units in Indonesia. At the point of this surveillance assessment, there were 58 palm oil mills (58 SOUs) and a total of 230 oil palm estates. The variance was due to in Malaysia, 3 palm oil mills (Jeleta Bumi, Sg. Sama and Sg. Tawing) had been closed down and another 3 mills (Mostyn, Sepang and Bukit Talang) were assigned to receive crop solely from third parties. 1 mill (Tamiang) in Indonesia has ceased its operation. Sime Darby Plantation Sdn. Bhd is committed to RSPO certification as announced in the earlier assessment. The certification assessments are being conducted as per their plan with the target for completion by December 2011. To date 39 of their SOUs in Malaysia and 16 SOUs in Indonesia are certified and the remaining 3 SOUs in Indonesia have undergone assessment and pending for certification approval.

1.8 Progress of Associated Smallholders/Smallgrowers Towards Compliance with Relevant Standard SDPSB has no explicit contract agreement with smallholders / smallgrowers on trading solely to them. Hence, there is no established plan for the supply base other than SDPSB owned estates to be in conformance with RSPO requirements. Subsequently, the CPO that is produced from the smallholders crop needs to be excluded through Mass Balance calculation. 1.9 Organizational Information/Contact Person SOU 28 is championed by an Estate Manager who is also the contact person. The details of the contact persons for SOU 28 are shown below: Name: Mohamad Tahir Bin Salang Designation: Manager Address: Ladang Binuang, P.O Box 130, 91207 Kunak, Sabah. Phone #: 089-855197 Fax #: 089-855190 E-mail: [email protected]

2.0 Assessment Process

2.1 Certification Body SIRIM QAS International Sdn. Bhd. is the oldest and leading certification, inspection and testing body in Malaysia. SIRIM QAS International provides a comprehensive range of certificati on, inspection and testing services which are carried out in accordance with internationally recognised standards. Attestation of this fact is the accreditation of the various certification and testing services by leading national and international accreditation and recognition bodies such as the

mailto:[email protected]


Department of Standards Malaysia (STANDARDS MALAYSIA), the United Kingdom Accreditation Services (UKAS), the International Automotive Task Force (IATF), and the Secretariat of the United Nations Framework Convention for Climate Change (UNFCC). SIRIM QAS International is a partner of IQNet, a network currently comprising of 36 leading certification bodies in Europe, North and South America, East Asia and Australia. SIRIM QAS International has vast experience in conducting assessment related to RSPO assessment. We have certified more than a hundred palm oil mills and several estates to ISO 14001 & OHSAS 18001. We have also conducted pre assessment against RSPO Principle and Criteria. SIRIM QAS International was approved as a RSPO certification body on 21st March 2008. 2.2 Qualification of Lead Assessor and Assessment Team The assessment team consisted of four assessors. The details of the assessors and their qualification are detailed below:

Assessment Team

Role/Area of RSPO Requirement

Qualification and Experience

Selvasingam T.K

Assessor / Good Agricultural Practices (GAP) and environmental issues

8 days experience as Technical Adviser to RSPO Audits.

16 days of auditing experience in RSPO. B. Sc. (Hons) Agriculture – University of

Agricultural Sciences, Hebbal, Banglore, India (1969-1973)

A Planter with Kumpulan Guthrie Berhad (1995-2002 – retired)

Inclusive of One year in Liberia and

2 years in Estate Department in Guthrie head quarters

Experience in Managing: Nursery : Rubber and Cocoa

Immature Area : Cocoa Replant, Rubber Replant, Oil Palm Replant & Oil Palm New Clearing

Mature Area: Cocoa, Rubber & Oil Palm.

Mahzan Munap

Assessment Team Leader /

Occupational health & safety and related legal issues

Collected over 450 Days of auditing experience in OHSAS 18001 and MS 1722 OHSMS (80 days for palm oil milling & 8 days for oil palm plantation). and 69 days RSPO

CIMAH Competent Person with Malaysian Department of Occupational Safety and Health (DOSH) since 1997.

Occupational Safety and Health Trainer at INSTEP Petronas

Successfully completed RSPO Lead Assessor Course – 2008.


Successfully completed Lead Assessor Course for OHSAS 18001-2000.

Successfully completed IRCA accredited Lead Assessor training for ISO 9001-2006

Successfully completed RABQSA/IRCA EMS Lead Assessor Course for ISO 14001in 2008.

MBA, Ohio University.

B.Sc. Petroleum Engineering, University of Missouri, USA.

Dr. Rusli Muhd Assessor / workers’ & community issues and related legal issues

Collected more than 65 auditor days in auditing RSPO and 16 days of Forest Management Certification (FMC).

Reviewed about 5 or 6 FSC Forest Management certification reports

Prepared Consultancy Reports on SIA for WWF, KPKKT and PESAMA

Taught Industrial Relations and International Forestry.

Research on forest certification

Ph.D. (Major: Forest Policy); Minor: Public Administration, North Carolina State Univ.

M. Phil. (Forest Policy) Univ. of Edinburgh B.S.(For) UPM

Khairul Najwan Ahmad Jahari

Overall Team Leader Assessor / ecology and environmental issues/ HCV / Forestry

Collected 73 auditor days in auditing Forest Management Certification (FMC – MC&I 2002 and MC&I Natural Forest)

Collected 42 auditor days in auditing RSPO

11 years working experience related to forest management, inventory, surveying, HCVF and logging operation.

Successfully completed accredited Lead Assessor training for ISO 14001: 2004, ISO 9001:2008 and OHS 18001:2000

Successfully completed RSPO Lead Assessor Course – 2011.

B. Sc of Forestry (Forest Management)


2.3 Assessment Methodology After reviewing the ASA3 report it was decided that the sampling formula of 0.8 √y to determine the number of estates to be assessed would not be used as each supply base has its own issues of interest of activities related to RSPO MYNI to be verified. Hence, 3 estates were planned to be assessed namely Jelata Bumi, Binuang, and Sunggang. The assessment team carried out field and office assessments for conformance against the RSPO-MY principles and criteria. The visits also covered HCV habitats, labour lines, storage areas and other workplaces. Common systems were identified and specific evidences were recorded for individual estates. Interviews, particularly those with employees, local communities and suppliers were conducted formally as well as informally, without the presence of company management personne l. In addition to that, records as well as other related documentation were also reviewed. The assessment programme is in Attachment 2. 2.4 Date of Next Surveillance Visit The next recertification audit will be scheduled around October/November 2014.

3.0 Assessment Findings 3.1 Summary of Findings The assessment was conducted as planned using the methodology described in Section 2.3. Findings against each of the RSPO MY-NI indicators are reported below. It was noted that SOU 28 was guided by their Estate/Mill Quality Management System documents for their operations. These documentation were inspired by the ISO 9001, ISO 14001 and OHSAS 18001 requirements. A total of nine (9) non-conformity reports against RSPO MYNI: 2008 requirements were raised as shown in Attachment 3. SOU 28 has taken necessary corrective actions in order to close all the major non-conformities raised. The previous year non-conformities have also been satisfactorily closed following verification of the implemented corrective actions. The assessment team examined all the action plans and found them to be adequate. SDPSB showed their commitment to address the non-conformities by establishing action plans as detailed in Attachment 4. PRINCIPLE 1: COMMITMENT TO TRANSPARENCY

Criterion 1.1

Oi l palm growers and millers provide adequate information to other stakeholder on environmental, social and legal i s sues relevant to RSPO Cri teria, in appropriate languages and forms to allow for effective participation in decis ion making. Indicator 1.1.1 Records of requests and responses must be mainta ined.


Major compl iance

Guidance : Growers and millers should respond constructively and promptly to requests for information from stakeholders

Audit findings SOU 28 was still continuing implementing the procedure for responding to any communication as outlined in their Estate/Mill Quality Management System documents. The system required response to all communication within a certain time frame. Action may then be taken to fulfill the request or for decision to be made by relevant person-in-charge at the SOU level or Sabah Zone Office. All communications were sighted logged and registered. The records for all communication were identified and maintained in different files depending on the stakeholder. Each record stated the date of communication received, response and remarks whether requests have been addressed. Among the records inspected were correspondences with the authorities, communities and employees. SOU 28 has also maintained the stakeholder list for relevant HCV stakeholder, e.g. Forestry Department, Wildlife Department and nearest villagers. During the document review at Binuang Estate it was found there were communications with Persatuan Keluarga Polis dated 9th October 2010 and Chinese High School Batu Pahat on 19th November 2012 regarding the permission to visit the HCV6 Mud Pool at Binuang Estate. However, Binuang Estate did not give the approval as seen via email dated 28 November 2012. The Mud Pool was closed to any visitor for the moment due to safety reason as monsoon rainy season is currently occurring in Binuang Estate.

Criterion 1.2 Management documents are publicly available, except where this i s prevented by commercia l confidentia l ly or

where disclosure of information would result in negative environmental or socia l outcomes. This concerns management documents relating to environmental , socia l and lega l i s sues that are relevant to compl iance with RSPO Cri teria. Documents that must be publicly available include, but are not necessari ly l imited to:- 1.2.1 Land ti tles / user rights (C 2.2) 1.2.2 Safety and health plan (C4.7)

1.2.3 Plans and impact assessments relating to environmental and socia l impacts (C 5.1, 6.1, 7.1, 7.3) 1.2.4 Pol lution prevention plans (C 5.6)

1.2.5 Deta i l s of compla ints and grievances (C 6.3) 1.2.6 Negotiation procedures (C 6.4) 1.2.7 Continuous improvement plan (C 8.1)

Guidance:

Examples of commercially confidential information include financial data such as costs and income, and deta i l s relating to customers and/or suppl iers . Data that affects personal privacy should a lso be confidentia l .

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

Audit findings

There was no restriction noted as to the documents made available to the public except those prevented by commercial confidentially or where disclosure of information would result in negative environmental or social outcomes.


SDPSB continued to use the internet for disseminating public information. Information relating to land titles, safety and health plans, pollution prevention plans and the procedure for complaints and grievances were available through SDPSB website at http://plantation.simedarby.com.

There are no changes since last year to the documents made available for viewing. They are:

Good Agricultural Practices

Social enhancement

Sustainability initiatives

Sustainability Management Programmes and; Complaint and grievances procedure.

These documents highlight current SDPSB practices and their continual improvement plans. Besides the above document SDPSB policy on the followings are also available at the same website:

1) Occupational Safety & Health 2) Environment & Biodiversity 3) Social 4) Gender 5) Slope Protection & River, and 6) Quality

Until the point of this assessment, SOU 28 has not received any request pertaining Criterion 1.2.

Figure 1: Policies displayed on a notice board at Binuang Estate PRINCIPLE 2: COMPLIANCE WITH APPLICABLE LAWS AND REGULATIONS

Criterion 2.1 There is compl iance with a l l appl icable loca l , national and rati fied internation al laws and regulations

Indicator 2.1.1 Evidence of compl iance with lega l requirement Major compl iance

http://plantation.simedarby.com/


Indicator 2.1.2

A documented system, which includes wri tten information on lega l requiremen ts . Minor compl iance Indicator 2.1.3 A mechanism for ensuring that they are implemented. Minor compl iance

Indicator 2.1.4 A system for tracking any changes in the law.

Minor compl iance

Audit findings SOU 28 has a documented system for identifying, accessing and updating the legal requirements and to monitor the status of legal compliance. SDSPB had ensured all applicable legal requirements pertaining to RSPO are established, implemented and maintained. A special department which is based in Kuala Lumpur was responsible in tracking the changes to the Acts and Regulations in their legal register by communicating with the publisher of the documents. This mechanism was outlined in its procedure. The legal register (LORR) 2012/2013 was available and was last reviewed on 24/7/2012 as sighted at the Binuang Palm Oil Mill. The laws affecting the oil palm industry are listed and made available to SOU 28. Among the identified legal requirements are Factories and Machinery Act and Regulations 1967, Occupational Safety and Health Act and Regulations 1994, Worker’ Minimum Standards of Housing and Amenities Act 1990, Environmental Quality Act and Regulations 1974, and Pesticide Act 1974. There was evidence of compliance with the law in areas assessed except as raised in the two non-conformity reports. The evaluation of legal compliance was done by Environmental Safety and Health Coordinator. The two legal non-conformities were one each to Jelata Bumi estate (Major NCR # MM1) and Binuang Palm Oil Mill (Major NCR # MM3). The diesel operated Internal Combustion Engines (212kw ND 320KW Generators) at the estate was being in-charge by Grade 2 Engine Driver instead of Grade 1 Engine Driver for each shift as required under the Factories and Machinery (Person -In-Charge) Regulation1970. On the other hand, the electrical Chargeman at the mill possessed an AO certificate instead of B4, thus not meeting the Electricity Supply Act 1990, Regulation 23, as the mill supply electricity to line site. The supply from the mill is step-up to 11kv via overhead supply line and then step down to 415kv at line site. Additionally, an Opportunity For Improvement, was raised against the Binuang Palm Oil Mill to frequently update and properly maintained the written contract of se rvice for several workers as required by the Sabah Labour Ordinance. Improvements on updating of contracts of service will be

verified in the next audit. During the on-site assessment, all SOU 28 commitments towards maintaining compliance with legal requirements were evident. Examples are Certificate of Equipment, Chemical Packaging and Labelling, Chemical Health Risk Assessment, Environmental, Safety & Health Committee Meeting, Noise Mapping, Audiometric test, reporting of Accidents in accordance to NADOOPOD Regulations 2004. Approval letters were sighted for relevant operations. Mill visits, field trips and monitoring


records showed that effluent discharges, boiler smoke emission, scheduled waste and chemical management were within the legal specification. Machine written approval was found still valid and well maintained. The non-conformity raised during ASA3 regarding training not conducted to the person in-charge of handling scheduled waste at Jeleta Bumi Estate had been verified and considered closed. During this 4th surveillance audit, the Binuang estate has taken proactive action by sending the person in -charge, Mr Firdaus (QA), Valentino (formen), Ms Muliati (Store Clerk) & Mr. Arthur (HA) to the scheduled waste training on 20th December 2012. Interviews with the person in-charge showed they were understand to handling the scheduled waste. Therefore the NCR has been closed.

Criterion 2.2 The right to use the land can be demonstrated, and is not legi timately contested by loca l communities with

demonstrable rights .

Indicator 2.2.1 Evidence of lega l ownership of the land including his tory of land tenure. Major compl iance

Indicator 2.2.2 Growers must show that they comply with the terms of the land ti tle. [This indicator i s to be read with Guid ance 2] Major compl iance Indicator 2.2.3 Evidence that boundary s tones along the perimeter adjacent to state land and other reserves are being located and vis ibly mainta ined.

Minor compl iance Speci fic Guidance: Growers should attempt to comply with th e above indicator within 15 months from date of

announcement of fi rs t audit. Refer to State Land Office for examples of other reserves . Indicator 2.2.4 Where there are, or have been, disputes, proof of resolution or progress towards resolution by confl ict resolution

processes acceptable to a l l parties are implemented. CF 2.3.3, 6.4.1 and 6.4.2. Minor compl iance

Guidance: 1. For any conflict or dispute over the land, the extent of the disputed area should be mapped out in a participatory

way. 2. Where there is a conflict to the condition of land use as per land ti tle, growers must show evidence that necessary action has been

taken to resolve the confl ict with the relevant authori ties . 3. Ensure a mechanism to solve the dispute (Refer to C 6.3 and C6.4)

4. Evidence must be demonstrated that the dispute has been resolved.

5. Al l operations shal l cease on land planted beyond the lega l boundary.

Audit findings The legal ownership of land had been verified and map to indicate the boundary stone been sighted for SOU 28. The right to use the land has been adequately demonstrated, and is not legitimately contested by local communities with demonstrable rights. The boundary stone along the perimeter adjacent to state land and other reserves were available during the site visit for all estate except at Sunggang. For instance, the boundary stone was maintained at Binuang Estate and those adjacent with the Madai Baturong and Ulu Kalumpang


Forest Reserve. See Figure 2 below. At Sunggang estate, a Minor non-conformity (Minor, NCR # SEL1) was raised as no boundary stone had been identified in areas bordering Small Holdings and Forest adjacent to it.

Figure 2: The boundary stone was maintained at Binuang Estate adjacent with Madai Baturong Forest Reserve

There is no change of ownership noted totalling 3271 ha since January 1978. Copies of land titles for the estates were sighted and it was evident that the terms of land title were being complied with for the purpose of Oil Palm planting, except the owner is still with Golden Hope Plantation since 12 June 1990. However, the auditor was informed that Sime Darby was in the midst of resolving the issues. The auditor had sighted the correspondence between Land Management Department of Sime Darby and Binuang Estate. Based on the content of the correspondence, the auditor found the issue needed more time to resolve especially in the merger exercise where it involved different owner companies from Golden Hope and Sime Darby. The relevant rules and regulations as stipulated in the Land Enactment of Peninsular are applicable to SDPSB. The recent follow-up with Land Office Department has been conducted on 16th May 2012 on Memorandum of Surrender (MOS) which is the initial process of change of name from Golden Hope Plantation to Sime Darby Plantation. Thus, there is a need to keep track on the status of this issue from time to time during every surveillance audit. The original ownership documents are kept at SDPSB’s headquarters.

Criterion 2.3

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

Indicator 2.3.1 Where lands are encumbered by customary rights, participatory mapping should be conducted to construct ma ps that show the extent of these rights .

Major compl iance

Indicator 2.3.2 Map of appropriate sca le showing extent of cla ims under dispute. Major compl iance


Indicator 2.3.3

Copies of negotiated agreements deta i l ing process of consent (C2.2, 7.5 and 7.6). Minor compl iance Guidance: Where lands are encumbered by legal or customary rights, the grower must demonstrate that these rights are understood and are not being threatened or reduced. This criterion should be cons idered in conjunction with Cri teria 6.4, 7.5 and 7.6.

Where customary rights areas are unclear these are best established through participatory mapping exercises

involving affected and neighbouring communities . This criterion allows for sales and negotiated agreements to compensate other users for lost benefi ts and/or

rel inquished rights. Negotiated agreements should be non-coercive and entered into voluntarily, carried out prior to new investments or operations and based on an open sharing of all relevant information in appropriate forms and languages , including assessments of impacts , proposed benefi t sharing and lega l arrangements . Communities must be permitted to seek lega l counsel i f they so choose. Communities must be represented

through institutions or representatives of their own choosing, operating transparently and in open communication with other community members . Adequate time must be given for customary decis ion -making and i terative negotiations a l lowed for, where requested. Negotiated agreements should be binding on all parties and enforceable in the courts . Establ ishing certa inty in land negotiations i s of long-term benefi t for a l l parties .

Audit findings Evidences of ownership (cross refer to section 2.2) are available and were sighted. It was also noted from records sighted, as well as through interviews with stakeholders, that there were no disputes on land rights in the area. PRINCIPLE 3: COMMITMENT TO LONG-TERM ECONOMIC AND FINANCIAL VIABILITY

Criterion 3.1 There is an implemented management plan that a ims to achieve long-term economic and financia l viabi l i ty. Indicator 3.1.1 Annual budget with a minimum 2 years of projection

Major compl iance Specific Guidance: Annual budget may include FFB yield/ha, OER, CPO yield/ha and cost of production that is not required to be publicly

ava i lable. Indicator 3.1.2

Annual replanting programme projected for a minimum of 5 years with yearly review. Minor compl iance

Audit findings The budget documents for their Financial Years 2012/2013 and projection budgets for 2013/2104, 2014/2015 and 2015/2016 were sighted at Sungang Estate. Financial year is from current year July to following year June. Besides the normal type of operating budgets allocated for the oil palm plantations (that is, FFB yield/ha, and unit cost of production), the budget continued to include allocation for welfare and social services.


The replanting programme for the next ten years had been prepared as sighted in the “Replanting programme 2011 to 2021”. This programme is reviewed once a year and is incorporated in their annual financial budget. The programme was being implemented as scheduled. Sungang Estate will have replanting until 2015/2016 and the replanting programme was sighted.

PRINCIPLE 4: USE OF APPROPRIATE BEST PRACTICES BY GROWERS AND MILLERS

Criterion 4.1 Operating procedures are appropriately documented and cons is tently implemented and monitored.

Indicator 4.1.1 Documented Standard Operating Procedures (SOP) for estates and mi l l s

Major compl iance

Indicator 4.1.2 Records of monitoring and the actions taken are mainta ined and kept for a minimum of 12 months . Minor compl iance

Audit findings SOU 28 continued to adopt a comprehensive SOP for all its estate and mill practices. Operation activities in the estates and the mills include from seedlings in nursery to planting of young palms and plantation upkeep to mill despatch of CPO, PK and PKO that are guided by the standard operating procedures (SOP). They are established as part of the Estate/Mill Quality Management System documents. For the estates, on top of the Estate Quality Management System, technical guidelines as listed in the Agricultural Reference Manual are also used. For activities related to environmental requirements, SOPs in the Sime Darby Plantation-Sustainable Plantation Management System are referred to. Scheduled waste handlers were given specific training. Briefing on the SOPs and related documents were conducted and workers are frequently reminded about it during the morning muster. Interviews with employees revealed that they understand the requirements of the SOP. It was also noted that relevant SOP were displayed at various work station for easy reference, for example, at estate office notice board and mill workstation notice board. Monitoring of the SOP implementation was closely done by person-in-charge and their records were verified. Among the records were work programmes for major activities at the estates such as field cost book, chemical usage form, mature oil palm work programme for fertiliser application, manuring, herbicide spraying and replanting. Other records sighted were the issuance of Personal Protective Equipment, agrochemicals and fertilizer through the stock books, store requisition and issue sheets. Despite the briefings and trainings given, two NCRs were issued for lapses noticed at Sunggang Estate (Major NCR# SEL2) and Jelata Bumi Estate (Minor NCR# MM2). They were respectively as follows – the pruned fronds were not stacked as required especially in the terraced areas in the tall palm fields (Figure 3). Fronds were found in path ways and in drains. At Jelata Bumi Estate, the drinking water sampling was not conducted in accordance to SDPSB’s own procedure. The


requirement for frequency of water sampling and analysis has to be carried out on quarterly basis (January, April, July and October). The records of drinking water analysis showed that it was last done on 4th May 2011.

Figure 3: Fronds not stacked at Sunggang Estate The auditors sighted the latest transaction in consignment note for SW 305 and SW 410 that were sent via licenced transporter, Ng Sian Hap Pottery, was issued on 7th December 2012. These wastes were then shipped to DOE Approved Recovery Contractor, Perniagaan Saudara Baru, Batu 15 ½, Ulu Tiram, Johor. Besides Ng Sian Hop Pottery another licenced scheduled waste transporter, Petrojadi is also used to remove SW 102, 410 and 429. Site visit found the scheduled wastes were properly stored and locked in compliance with Environmental Quality (Scheduled Wastes) Regulations 2005 as depicted in figure 4 below.

Figure 4: The scheduled waste store at Binuang Estate

At the mills, among the records verified were sterilizer performance, boiler chemical usage, boiler smoke emission, effluent treatment plant discharge, steam turbine running hours and its maintenance schedule.


Criterion 4.2

Practices maintain soil fertility at, or where possible improve soil ferti l i ty to, a level that ensures optimal and susta ined yield. MY-NIWG recommends that the indica tors in cri terion 4.2 and 4.3 are l inked Indicator 4.2.1 Monitoring of ferti l i zer inputs through annual ferti l i zer recommendations . Minor compl iance

Indicator 4.2.2

Evidence of periodic ti ssue and soi l sampl ing to monitor changes in nutrient s tatus . Minor compl iance

Indicator 4.2.3 Monitor the area on which EFB, POME and zero -burn replanting i s appl ied. Minor compl iance

Audit findings SOU 28 continued to monitor their fertilizer inputs as recommended by their agronomist. The recommendation was made on annual basis as sighted in the ‘Agronomic & Fertilizers Recommendation Reports – Oil Palm 2012/2013. Leaf (tissue) sampling was carried out and its result formed part of the basis for the fertilizers input recommendation. Fertiliser application for 2012/2013 programme was in progress as stated in Agronomist report. Soil sampling was carried every five years and the last was done in 2009. In addition to fertiliser application Sungang Estate had also carried out application of Compost at application rate of 100 kilos per palm to the recommended fields and EFB application around palm circles (Figure 5) at 40 tonnes per hectare in the 2012A replanting field. All relevant information were recorded in the Manuring Cost Book/Pesticides of the respective estate.

Figure 5: EFB in palm circle

Criterion 4.3: Practices minimise and control eros ion and degradation of soi l s . Indicator 4.3.1; Documented evidence of practices minimizing soi l eros ion and degradation (including maps).

Minor compl iance

Specific Guidance: Replanting on s loping land must be in compl iance with MSGAP Part 2: OP (4.4.2.2)


For Sarawak, steep s lopes are considered high risk erosion areas and cannot undergo replanting unless speci fied in

the EIA report and approved by the Na tura l Resources and Environment Board (NREB).

For Sabah, s lopes 25 degree and steeper are considered high ri sk eros ion areas and cannot undergo replanting

unless specified in the EIA report [Environment Protection (Prescribed Activities)(Environment Impact Assessment) Order 2005] and approved by the Environmental Protection Department (EPD).

Slope determination methodology (slope analysis) should be based on average s lope us ing topographic maps or topographica l surveys . Indicator 4.3.2: Avoid or minimize bare or exposed soi l within estates .

Minor compl iance

Specific Guidance: Appropriate conservation practices should be adopted.

Indicator 4.3.3: Presence of road maintenance programme. Minor compl iance

Indicator 4.3.4 : Subs idence of peat soi l s should be minimised through an effective and documented water management programme Minor compl iance

Specific Guidance: Maintaining water table at a mean of 60 cm (within a range of 50-75cm) below ground surface through a network of weirs , sandbags , etc. in fields and watergates at the discharge points of main dra ins .

Indicator 4.3.5: Best management practices should be in place for other fragile and problem soi ls (e.g. sandy, low organic matter and acid sulphate soi l s ). Minor compl iance

Guidance:

Techniques that minimise soil erosion are well-known and should be adopted, wherever appropriate. These may include practices such as : 1. Expediting establ ishment of ground cover upon completion of land preparation for new replant.

2. Maximizing pa lm biomass retention/ recycl ing. 3. Mainta ining good non-competi tive ground covers in mature areas . 4. Encouraging the establ ishment/regeneration of non -competi tive vegetation to avoid bare ground. 5. Construction of conservation terraces for s lopes >15o

6. Advocating proper frond heap stacking such as contour/L-shaped stacking. For straight line planting and s tacking a long the terrace edges for terrace planting. 7. Appropriate road des ign and regular maintenance.

8. Divers ion of water runoff from the field roads into terraces o r s i l t pi ts . 9. Construction of s top bunds to reta in water within the terrace.

10. Mainta ining and restoring riparian areas in order to minimize eros ion of s tream and river banks .

Audit findings

SOU 28 was committed to minimize soil erosion. In general, the soil and water conservation practices include constructing and maintaining terraces (terrace planting) on hilly to steep terrains, L-shaped frond stacking and contour stacking of the pruned fronds (except at Sunggang Estate as highlighted in Indicator 4.1.1 above) were clearly advocated in line with the SOP and other biomass retention in the field were consistently implemented. Sungang Estate continued to practice only circle and path spraying for field maintenance in the mature areas as stipulated in their SOP. Other efforts noted were the planting of Vertiver grass at the areas that are prone to erosion. For replanting areas, the company continued to plant and maintains cover crops. Generation of non-competitive ground covers especially Nephrolepis bisserata and soft grasses have significantly minimized the occurrence of bare ground, soil erosion and surface runoff.


Sungang Estate has indicated the legal compliance to the Environmental Impact Assessment (Order 2005) by carrying out Proposal for Mitigation Measure (PMM) for the oil palm replant 2012 between 100 ha and 500 ha. During the field visit, SOU 28 had satisfactory road condition and accessibility were made possible by regular maintenance guided by its Road maintenance programmes which consist of road resurfacing, grading and culvert maintenance were sighted. However, at Sunggang Estate a Minor Non-conformity (Minor NCR# SEL3) against Indicator 4.3.3 was issued as the road maintenance programme was not carried out timely. A large hole (2’ X 2’) and a smaller one were found on a bridge in Field 91C. The timber structure that was rotten had collapsed given rise to the holes. In addition, there were no markers to indicate the collapse, thus posing danger to those who use the bridge/road. Silt pits at estates visited were seen strategically located along the road to collect diverted road runoff to further minimize road rutting. No peat soils were found during the field visit. Generally, SOU 28 had complied with the requirement of conserving areas with more than 250 slope gradients to minimise soil erosion and degradation. Areas that were planted with Oil Palms earlier were conserved and no activities including harvesting had been carried out. Consultation with managers indicated that they were fully aware of the requirements to conserve such areas. Inspection indicated that the sites are not adversely disturbed.

Criterion 4.4 Practices mainta in the qual i ty and avai labi l i ty of surface and ground water.

Indicator 4.4.1 Protection of water courses and wetlands, including maintaining and restoring appropriate riparian buffer zones at or before replanting a long a l l natura l waterways within the estate. Major compl iance Specific Guidance: Riparian buffer zones: Reference to be made to relevant national regulations or guidelines from state authorities e.g. Department of Irrigation and Dra inage (DID), whichever i s more s tringent. Indicator 4.4.2 No construction of bunds/weirs/dams across the main rivers or waterways pass ing through an estate.

Major compl iance

Indicator 4.4.3 Outgoing water into main natural waterways should be monitored at a frequency that reflects the estates and mi l l s current activi ties which may have negative impacts (Cross reference to 5.1 and 8.1).

Major compl iance Indicator 4.4.4 Monitoring ra infa l l data for proper water management Minor compl iance Indicator 4.4.5 Monitoring of water usage in mi l l s (tonnage water use/tonne FFB processed).

Minor compl iance Speci fic Guidance: Data trended where poss ible over 3 years to look into resource uti l i zation


Indicator 4.4.6

Water drainage into protected areas is avoided wherever possible. Appropriate mitigating measures will be implemented following consultation with relevant stakeholders. Minor compliance Indicator 4.4.7 Evidence of water management plans . Minor compl iance

Audit findings

The site visit was to verify the protection of water courses, including maintaining and restoring appropriate riparian buffer zones at or before replanting along all natural waterways within the estate. This was evident in the latest replant where no replanting had been carried out along the natural waterway. The old palms were not felled for replanting at Sunggang Estate (Figure 6).

During the site review at Sungang (Figure 7).and Binuang Estate (Figure 8), it was found the 20m buffer zone boundary with signboard erected and Palms marked with white paint at the trunk to differentiate with the other non riparian zone oil palm trees

Figure 6 : Palms not felled during replanting In the riparian zone.

Figure 7: Riparian Zone in Sungang Estate


Figure 8: The buffer zone has been maintained at Binuang Estate adjacent to Sg. Binuang .

The buffers had been identified in accordance with Sabah Water Resources Enactment (1998) and were available in the map. The boundary marker for buffer was sufficient and maintained. Interviews with the workers revealed that they understood the requirement of keeping the riparian zones free from any agricultural activities. Generally, SOU 28 had maintained the protection on water courses (except for Sunggang estate) including maintaining and restoring appropriate riparian buffer zones along all natural waterways within the estate. During the site visit it was found that there was a bund being constructed across the waterway passing through Sunggang estate to draw water for use at the nursery. A Major NCR # SEL-04 has been raised at Sunggang Estate for non –conformance to Indicator 4.4.2. (see Figure 9)

Figure 9 : Bund across the waterways passing through Sunggang Estate

Guided by their SOP, the SOU 28 had conducted water quality monitoring in identified waterways. The monitoring stations are well marked within the estates and mapped out. The water analysis reports were shown to the assessor for verification. Among the parameters tested were BOD, COD, total solids, suspended solids, oil and grease, ammoniacal nitrogen. The rainfall data and rain days had been well maintained over the past ten years. Monitoring of water consumption by all the mill is also being carried out.

SOU 28 had developed water management plans. Among items in the plans are: 1) Action to reduce treated water usage.


2) Contingency plan for water shortage.

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

Indicator 4.5.1 Documented IPM system.

Minor compl iance

Indicator 4.5.2 Monitoring extent of IPM implementation for major pests . Minor compl iance Specific Guidance:

Major pests include leaf eating caterpi l lars , rhinoceros beetle and rats . Indicator 4.5.3 Recording areas where pesticides have been used. Minor compl iance Indicator 4.5.4

Monitoring of pesticide usage units per hectare or per ton crop e.g. total quanti ty of active ingredient (a i ) used / tonne of oi l . Minor compl iance

Audit findings SOU 28 maintained the documented IPM techniques as shown in SOP/Section B13/Pest & diseases and ARM/Section B15/Plant Protection. Usage of pesticides was justified and monitored. Information on the quantity of pesticides and areas applied were documented and were also used to monitor FFB produced in the applied area. Beneficial plants from the four major species namely Tunera subulata, Cassia cobanensis, and Antigonon leptopus continued to be planted in Sungang Estate to maintain low population of leaf eating caterpillars, hence, reduces the need to use chemical treatment. Calendar rat baiting was practiced in Sungang Estate in order to keep rat damage at a minimum. Records showing the agrochemicals active ingredient (ai) used per hectare and per metric tonne basis were seen in Sungang Estate Likewise, records of location where pesticides had been used were also available.

Criterion 4.6 Agrochemicals are used in a way that does not endanger health or the environment. There is no prophylactic use of pesticides, except in specific situations identified in national Best Practice guidelines. Where agrochemicals are used

that are categorised as World Health Organisation Type 1A or 1B, or are l i s ted by the Stockholm or Rotterdam Conventions , growers are actively seeking to identi fy a l ternatives , and this i s documented.

Indicator 4.6.1 Written justi fication in Standard Operating Procedures (S OP) of a l l Agrochemica ls use.

Major compl iance

Indicator 4.6.2 Pesticides selected for use are those officially registered under the Pesticides Act 1974 (Act 149) and the relevant provis ion (Section 53A); and in accordance with USECHH Regulations (2000).

Major compl iance


Specific Guidance:

Reference shal l a lso be made to CHRA (Chemica l Health Risk Assessment)

Indicator 4.6.3 Pesticides shall be s tored in accordance to the Occupational Safety and Health Act 1994 (Act 514) and Regulations and Orders and Pesticides Act 1974 (Act 149) and Regulations .

Major compl iance Specific guidance: Unless participating in established recycl ing programmes or with expressed permission from the authori ties , triple rinsed containers shall be pierced to prevent misuse. Disposal or destruction of containers shal l be in accordance

with the Pesticide Act 1974 (Act 149) and Environmental Quality Act 1974 (Scheduled Wastes) Regulations 2005.

Indicator 4.6.4 Al l information regarding the chemicals and i ts usage, hazards , trade and generic names must be ava i lable in language understood by workers or explained carefully to them by a plantation management officia l at operating unit level .

Major compliance Indicator 4.6.5 Annual medica l survei l lance as per CHRA for plantation pesticid e operators .

Major compl iance

Indicator 4.6.6 No work with pesticides for confi rmed pregnant and breast-feeding women. Major compl iance Indicator 4.6.7 Documentary evidence that use of chemicals categorised as World Health Organization Type 1A or 1B, or l i s ted by the Stockholm or Rotterdam Conventions and paraquat, i s reduced and/or el iminated. Adoption of sui table

economic a l ternative to paraquat as suggested by the EB pending outcome of the RSPO study on IWM. Minor compl iance

Indicator 4.6.8 Documented justification of any aerial application of agrochemicals. No aerial spraying unless approved by relevant

authori ties . Major compl iance

Indicator 4.6.9 Evidence of chemica l res idues in CPO testing, as requested and conducted by the buyers . Minor compl iance Indicator 4.6.10 Records of pesticide use (including active ingredients used, area treated, amount appl ied per ha and number of appl ications) are mainta ined for ei ther a minimum of 5 years or s tarting November 2007.

Minor compl iance

Audit findings SOU 28 continued to use the chemicals that are registered under the Pesticide Act 1974, Chemicals listed in the World Health Organization Type 1A or 1B or Stockholm or Rotterdam Convention. Usage and method of agro-chemicals applications (pesticides and herbicides) were justified and stipulated in the ARM and SOP as well as in Safety Pictorial procedure. No illegal agrochemicals (stated by local and international laws) in particular paraquat were used or found in SOU 28. Paraquat was totally replaced by another contact herbicide, glufosinate ammonium. Records of agrochemicals use including active ingredients used, area treated, amount applied per ha


and number of applications are maintained and kept up-to date. Relevant information of the agrochemical used by estate workers, largely via morning muster and the use of Safety Pictorial poster, were conveyed and understood by all interviewed during the spraying activities and fertilizer application. It was also verified in the training records that training in chemical handling especially to the sprayers and the storekeeper, had been conducted with the aim of disseminating the correct information and ensuring understanding regarding the usage and hazards of the agrochemicals. Chemical stores are at all times locked. At the chemical stores, the safety and communication documentation include a chemical register which indicates the purpose of chemical usage (intended target), MSDS, hazards signage, trade and generic names. Usage and storage of agrochemicals including pesticides are in accordance with Pesticide Act 1974, Occupational Safety & Health Act 1994 and USECHH Regulations 2000. Empty chemical containers are triple rinsed, pierced and stored for disposal in accordance to the legal requirements. Updated records to show agrochemicals purchase, storage and consumption are available in SOU 28. In order to avoid human exposure to concentrates chemicals, pre-mixing was practiced. MSDS were adequate for each agrochemical at the estate stores. Based on the recommendation of the CHRA, medical surveillance has been conducted for employees, such as estate sprayers and mill laboratory operators, whose jobs require them to be exposed to chemicals. Pregnant and breast-feeding women are strictly not allowed to work with pesticides. Aerial application of agrochemicals is not practiced. SOU 28 mills have carried out the chemical residue test quarterly although till today no request from their CPO buyer.

Criterion 4.7 An occupational health and safety pl an i s documented, effectively communicated and implemented Indicator 4.7.1

Evidence of documented Occupational Safety Health (OSH) plan which i s in compl iance with OSH Act 1994 and Factory and Machinery Act 1967(Act139). Major compl iance

The safety and health (OSH) plan shal l cover the fol lowing:

a . A safety and health pol icy, which i s communicated and implemented. b. Al l operations have been risk assessed and documented. c. An awareness and tra ining programme which includes the fol lowing speci fics for pesticides :

i . To ensure a ll workers involved have been adequately tra ined in a safe working practices ( See a lso C4.8) ii . Al l precautions attached to products should be properly observed and appl ied to the workers .

d. The appropriate personal protective equipment (PPE) are used for each risk assessed operation.

i . Companies to provide the appropriate PPE at the place of work to cover a ll potentially hazardous o perations such as pesticide appl ication, land preparation, harvesting and i f used, burning. e. The respons ible person (s ) should be identi fied. f. There are records of regular meetings between the responsible person(s) and workers where concerns of workers about health and


safety are discussed. g. Accident and emergency procedures should exist and instructions should be clearly understood by a l l workers . h. Workers tra ined in Fi rs t Aid should be present in both field and mi l l operations .

i . First Aid equipment should be available at worksites. Indicator 4.7.2 Records should be kept of a l l accidents an d periodica l ly reviewed at quarterly interva ls . Major compl iance Specific Guidance:

Record of safety performance is monitored through Lost Time Accident (LTA) rate. Indicator 4.7.3 Workers should be covered by accident insurance. Major compl iance

Audit findings

SOU 28 had adopted SDPSB’s Occupational Safety and Health Policy, plan and programme. The SDPSB Safety and Health Policy were seen displayed prominently in Bahasa Malaysia and English on notice boards at mill and estate office and Muster Ground. Random interviewed with employees showed that they generally understood the basic requirements of the policy, i.e. to work safely, comply with legal requirements, follow established procedures and instructions from supervisor. The plan had been documented, communicated and implemented to all levels of the organization. Based on the risk assessment, SOU 28 had identified and reviewed (on 12th September 2012 by mill) significant hazards and risks and determined appropriate risk control measures. The hazard identification, risk assessment and risk control (HIRARC) records, as well as CHRA records were verified during the assessment. At the estates, the HIRARC carried out covered activities like chemical mixing and spraying, harvesting and FFB collection. As for the mill, the identified activities were cleaning and grading at Loading Ramp, FFB sterilization, kernel extraction and oil extraction and clarification and others. Mill and field inspection including observation of spraying tasks confirmed chemicals being applied were in accordance with the product safety precautions. MSDS were available at point of use – example, at mill: water treatment plant, boiler chemical dosing area; at the estate: chemical store and chemical mixing area. The pesticides used were registered under the Pesticides Act 1974 and in accordance to USECHH Regulations (2000). At Binuang Palm Oil Mill and estate CHRA and Health Surveillance were conducted. In the estate, it was noted that clean water was provided and transported to the field for use by the sprayer team for washing their hands before consuming any food during mid-morning work break or rest. Appropriate personal protective equipment (PPE) were given to employees of SOU 28 and they were seen to be wearing them including face masks, goggles, nitrile gloves, apron, Wellington boots and hard hat to estate workers to cover all potentially hazardous operations such as pesticide application and FFB harvesting. At the mill the employees were provided and they were seen donned hard hat, safety shoes, gloves, ear plugs, safety glass, goggles and apron. PPE issuance record was sighted and found acceptable for frequency of PPE replacement. SOU 28 had established OSH Committee and continued to use the same Committee to facili tate


their OSH implementation plan. Roles and responsibility of each member, including worker’s representative, were clearly defined and the committee meetings were held on a quarterly basis. Meeting minutes were available on file and detailed the discussions that include accident cases, workplace inspections, relevant training required for workers, health monitoring results and areas for improvement. SOU 28 continued to maintain the existing facilities for various types of emergencies that had been identified. At the mill, an ‘Emergency Room’ equipped with basic facilities (i.e. stretcher, First Aid kit, emergency eye wash and shower station) were provided. They also continued to use the already documented Accident and Emergency procedures that include steps required to response for a range of potential emergencies. Site Plan and Emergency Callout list of Contacts was reviewed annually and updated. Emergency evacuation and fire drill had been conducted annually, on 18th July 2012 by the mill. Workers trained in First Aid were present in both the field and mill operations, including on every shift. Interviews with First Aiders found that they were aware of their duties and responsibility. First Aid boxes were provided and maintained at several locations in the mill’s and estates’ office, stores and workshop. At the estate, each mandore had been seen provided with the First Aid box to take with them when on duty in the field. First Aid kits were also made available at Laboratory and Boiler Control Room. OHS training for staff and workers had been conducted as per the OSH plan and programmes developed by the SHO, and the training records were being kept by mill and estates. Among the training provided were safe operating procedure, emergency fire drill and evacuation, first-aid, proper handling of chemicals and the correct use of PPE. OSH performance was continuously monitored and accident cases were managed in accordance with OSH Regulations. Accident records were kept and reviewed. An accident scoreboard was made available at mill and estates and updated regularly to show the current OSH performance status. In 2012, one (1) case without Lost Time Incident was recorded at the mill. JKKP 8 was sighted submitted to DOSH on 5th January 2013. SOU 28 had insured all its foreign workers in the mill and the estates via Worker’s Compensation Accident Scheme via a recognized insurance underwriter. The local employees are covered by SOCSO. Although generally there is evidence of documented Occupational Safety and Health plan that is in compliance with Occupational Safety and Health Act 1994 and Factories and Machinery Act 1967, Opportunities For Improvement exist as follows: 1. At Sunggang Estate, the floor of the pump house for the Oil Palm nursery could be wiped cleaned

of oil and water to remove unsafe condition of slippery floor that could posed slip, trip and fall hazards to operators.

2. At Jelata Bumi Estate and Binuang Palm Oil Mill, the (a) content of the first aid box and (b) records

of casualty and treatment given b First Aiders could be improved to be in compliance with DOSH guideline on First Aida at Workplace (2nd Edition).

3. At Jelata Bumi Estate line site, some of the houses have yet to be equipped with portable fire

extinguishers a others had been fitted with one.


4. At Binuang Palm Oil Mill, the Emergency Response post mortem report could be improved to detail out the chronological event including when siren was activated, time of arrival of first person and last person at assembly point, time finishing head count, time activating firefighting team or first aiders swing into action, orderliness of evacuation, etc.

Figure 10: Clean Water in the field for sprayers

Figure 11: Bathrooms for sprayers

Figure 12: Washing Machine for Sprayers

Figure 13: Seats on tractor for Attendants

In the Sunggang estate, it was noted that clean water (Figure 10) was provided and transported to the field for use by the sprayer team for washing their hands before consuming any food during mid-morning work break or rest.

Appropriate personal protective equipment (PPE) were given to employees of Sungang Estate and they were seen to be wearing them. It included face masks, nitrile gloves, apron, Wellington boots and hard hat to estate workers to cover all potentially hazardous operations such as pesticide


application and FFB harvesting. Estate workers (Sprayers) who carried out potentially hazardous operations such as pesticide application were provided with bathrooms (Figure 11) for bathing and a washing machine (Figure 12) for washing their work clothes before going home after work.

Sungang Estate had modified the tractors for FFB loading by providing seats (Figure 13) for loading attendants (workers) to be safely seated during transportation.

Inspection at the water pump house for the Oil Palm Nursery at Sungang Estate revealed that the floor was not wiped clean posing a hazard to the Operator. The floor was wet and oily. An OFI was issued.

Sungang Estate had insured all its foreign workers in the estates via Worker’s Compensation Accident Scheme through a recognized insurance underwriter. The local employees are covered by SOCSO.

At the estate, each mandore had been seen provided with the First Aid box to take with them when on duty in the field.

Criteria 4.8 Al l s taff, workers , smal lholders and contractors are appropriately tra ined. Indicator 4.8.1

A tra ining programme (appropriate to the scale of the organization) that includes regular assessment of tra ining needs and documentation, including records of tra ining for employees are kept. Major compl iance

Audit findings SOU 28 had established their training needs and programmes for the year 2012/13. Generally the training programme covers the major training identified such as RSPO awareness, Safety & Health awareness, Environmental Awareness, First Aid, Fire Fighting, 5S Housekeeping and the implementation of SOPs. Training records for the SOU 28 estates were inspected and had been sighted. Among of the training program conducted at the estate were Awareness on prohibition spraying activities in the buffer zone (17 May 2012). The training programmes were also extended to the contractors and suppliers. Trainings were either conducted internally by its own staff or externally by other department within Sime Darby Group or consultant. Training records were updated and well maintained. PRINCIPLE 5: ENVIRONMENTAL RESPONSIBILITY AND CONSERVATION OF NATURAL RESOURCES AND BIODIVERSITY

Criterion 5.1 Aspects of plantation and mill management, including replanting, that have environmental impacts are identi fied,

and plans to mitigate the negative impacts and promote the positive ones are made, implemented and monitored, to demonstrate continuous improvement.


Indicator 5.1.1 Documented aspects and impacts ri sk assessment that i s periodica l ly reviewed and updated.

Major compl iance

Indicator 5.1.2 Environmental improvement plan to mitigate the negative impacts and promote the pos i tive ones , i s developed,

implemented and monitored. Minor compl iance

Audit findings SOU 28 had developed its environmental aspects/impacts register associated with their activities. For the Binuang Palm Oil Mill it was last reviewed on 17th September 2012. The assessor found that most of the activities were identified and evaluated accordingly. It was noted the 77.11 Ha replanting were planning to be conducted in 2013. The proposal for mitigation measure (PMM scoping note) was conducted on December 2012. Generally, the Environmental Aspect Identification (EAI) and Environmental Impact Evaluation (EIE) were reviewed on annual basis. Environmental improvement plan or known as Environmental Management Programmes (EMP) were then established. It is based on the identified significant aspects that can be improved within the SOUs capabilities. Among the EMP at estates level are reduction of diesel consumption and the planting of beneficial plant while EMP at oil mills include ensuring their effluent discharge and boiler smoke emission are within the legal requirements. Monitoring records showed their effluent discharge and smoke emission were within the legal permissible limits.

Criterion 5.2 The s tatus of rare, threatened or endangered species (ERTs) and high conservation va lue habitats, i f any, that exists

in the plantation or that could be affected by plantation or mi l l management, sha l l be identi fied and their conservation taken into account in management plans and operations .

Indicator 5.2.1 Identification and assessment of HCV habitats and protected areas within landholdings; and attempt assessments of

HCV habitats and protected areas surrounding landholdings . Major compl iance Indicator 5.2.2 Management plan for HCV habitats (including ERTs) and their conservation. Major compl iance Indicator 5.2.3 Evidence of a commitment to discourage any i llegal or inappropriate hunting fishing or col lecting activi ties , and

developing respons ible measures to resolve human -wi ldl i fe confl icts . Minor compl iance

Audit findings The Biodiversity Baseline Assessment Report, Sime Darby Plantation for SOU 28 was prepared by PS-RSPO Unit, TQEM Department dated on November 2009. The assessment had covered all the HCV areas for Binuang Estate, Tingkayu Estate, Sungang Estate and Binuang Palm Oil Mill, including the


management and action plan. The assessment covered the rare, threatened and endangered species (ERTs). Based on the management plan produced from the assessment, the SOU 28 had produced the action plan and conducted the monitoring on yearly basis. The action plan 2012/13 was reviewed on 19th December 2012. The monitoring form has been filled by person in-charged on night patrolling book. The latest entry was on 21st December 2012 on elephant monitoring. During the site review, it was found that Binuang Estate had identified and maintained the significant HCV, e.g. HCV 4 - to control and maintain basic service of natural watershed protection and erosion control for river buffer zone at Sg Binuang and Sg Tingkayu, >25° rocky area at Bukit Perawan (Figure 15) and Mud Pool reserves area.(Figure 14) Binuang Estate also had maintained the HCV 6 - to control and maintain the religious significance place of worship.

Figure 14: Mud pool area at HCV4 was indicating Binuang Estate actively maintained the area

Figure 15: HCV 4 Conservation of steep areas and soil erosion control at Binuang Estate The SOU 28 had also maintained the signage of commitment to discourage any illegal or inappropriate hunting fishing or collecting activities at Binuang (Figure 16) and Sunggang Estate.


Figure 16: The sign board was erected to discourage of hunting in Binuang Estate

In general, it was found that Binuang Estate had continued to monitor and maintain the significant HCVs areas, including the status of rare, threatened or endangered species (ERTs) and high conservation value habitats.

Criterion 5.3

Waste is reduced, recycled, re-used and disposed off in an environmental ly and socia l ly respons ible manner. Indicator 5.3.1

Documented identi fication of a l l was te products and sources of pol lution. Major compl iance Indicator 5.3.2

Having identified wastes and pollutants, an operational plan should be developed and implemented, to avoid or reduce pol lution. Minor compl iance Specific Guidance:

Schedule waste to be disposed as per EQA 1974 (Scheduled Wastes) Regulations , 2005. Reference to be made to the national programme on recycl ing of used HDPE pesticide conta iners .

Municipal waste disposal as per local authority or district council in accordance to the Ministry of Health guidel ines (i .e. specifications on landfills, licensed contractors, etc) or Workers’ Minimum Standards of Housing and Amenities

Act 1990 (Act 446). Indicator 5.3.3 Evidence that crop res idues / biomass are recycled (Cross ref. C4.2). Minor compl iance Specific Guidance:

POME should be discharged in compliance with the Environmental Quality Act 1974 (Act 127) and Regulations. For Sabah and Sarawak, POME should be discharged according to the respective state policies.

Audit findings SOU 28 had identified the wastes generated from their operations. Among the wastes identified were biomass used lubricant, oil filters, batteries, and general wastes from line site. For all wastes identified, the SOU continued to practice 3R (reduced, recycle, re-use) on waste management. There was a program to encourage recycling of solid wastes with recycle bins provided in the


workshops and offices. In addition to identification of wastes, sources of pollution had also been identified. Identification of sources of pollution such as effluent from oil clarification plant and production floor washing activities, smoke from boiler operation, contaminated gloves from maintenance activities had been made by each operating unit and subsequently an operational control procedure was established and monitoring activities was carried as per schedule to ensure all wastes and pollutants do not give rise to significant impact to the environment. Waste management plan and SOP for the disposal of the identified wastes was sighted in the SOU. For example, EFB and compost was sent to the field for mulching and filed application, while fibre is used as fuel for boiler. General waste is appropriately managed by disposing at designated disposal area within the plantation. However, site review at Binuang Estate (Figure 17) and Sunggang Estate found the solid waste (plastic bottle, boxes, plastic basin) were mixed up in the landfill . Therefore OFI 5.3.2 has been raised.

Figure 17: The solid waste (plastic bottle, boxes, plastic basin) were mixed up in the landfill at

Binuang Estate Recycling of palm biomass generated from the milling activities was fully exploited by the SOU. It was observed biomass such as excess fibre, shell and EFB were recycle where excess fibre and shell were use as fuel in the boiler and EFB were sent to estate for mulching. Apart from that, the estates continued to practice chipping of oil palm trunks and returned to the soils via decomposition during replanting activities. Palm oil mill effluent (POME) was treated in the effluent treatment plant and finally discharged into the estate for use in land irrigation system and also use as nutrients for microbes at the composting plant nearby.

Criterion 5.4 Efficiency of energy use and use of renewable energy i s maximized.

Indicator 5.4.1 Monitoring of renewable energy use per tonne of CPO or pa lm product in the mi l l .

Minor compl iance

Indicator 5.4.2

Monitoring of direct fossil fuel use per tonne of CPO or kW per tonne palm product in the mi l l (or FFB where the grower has no mi l l ).

Minor compl iance


Audit findings SOU 28 continued committed to use renewable energy in the mill. Fibre and shell were still being used as boiler fuel to generate steam for the process as well as electricity for the mill complex and labour lines. The usage of fibre and nut shell had been monitored and records maintained. Fossil fuel and biomass fuel usage per ton CPO from 2010 to 2012 were tabulated as follows:

Year FFB processed

(mt)

CPO production

(mt)

Biomass used (mt)

Energy use (Turbine Genset) (kwh)

Biomass consumed

(mt)/mt CPO

Fossil fuel usage

kwh/mt CPO

2010 202,616.81 42,987.13 24,736.65 4,752,704 0.58 18.76

2011 207,813.28 43,281.42 26,054.71 5,598,900 0.60 26.95

2012 198,019.02 44,004.84 26,622.41 5,191,200 0.60 22.14

Criterion 5.5 Use of fire for waste disposal and for preparing land for replanting i s avoided except in speci fic s i tuations , as

identi fied in the ASEAN Guidance or other regional best practice. Indicator 5.5.1 No evidence of open burning. Where controlled burning occurs, it i s as prescribed by the Environmental Qual i ty (Declared Activi ties ) (Open Burning) Order 2003.

Major compl iance Indicator 5.5.2 Previous crop should be felled/mowed down, chipped/shredded, windrowed or p ulverized/ ploughed and mulched. Minor compl iance Specific Guidance:

A special dispensation from the relevant authorities should be sought in areas where the previous crop or s tand is highly diseased and there i s a s igni ficant ri sk of disease spread or continuation into the next crop.

Indicator 5.5.3 No evidence of burning waste (including domestic waste).

Minor compl iance

Audit findings Fire was not used in all estate operations, replanting, land clearing and waste disposal . This practice has been adopted company-wide since 1989 in accordance with what had been written in their zero burning policy and also in the Agricultural Reference Manual. All replanting areas in the SOU were developed without the practice of burning while domestic waste was buried in landfills. The replanting practice was verified on site at Binuang (Figure 18) and Sunggang Estate where there was no trace of open burning. Instead palms are felled, chipped/shredded and windrowed within the plantation during replanting development. The palm biomass was left to rot naturally (Figure 19).


Figure 18: Replanting areas was verified during site review at Binuang Estate

Figure 19: Palms chipped and windrowed

Criterion 5.6 Plans to reduce pollution and e missions, including greenhouse gases, are developed, implemented and monitored. Indicator 5.6.1 Documented plans to mitigate a l l pol luting activi ties (Cross ref to C5.1). Major compl iance

Indicator 5.6.2 Plans are reviewed annual ly.

Minor compl iance

Specific Guidance: Pol lutants and emissions are identified and plans to reduce them are developed in conformance to national regulations and guidance.

Audit findings SOU 28 has established and maintains their plans to reduce pollution. These plans are translated into SOP in their Estate/Mill Quality management System and Sime Darby Plantation - Sustainable Plantation Management System or environmental management program. Among the plans were to reduce black smoke emission, enhance the scheduled waste management,


reduce diesel consumption and ensure effluent discharge is within the legal requirements. Monitoring of the pollution and emissions plans were carried out as per schedule and result of monitoring showed there were improvements towards positive trend.

PRINCIPLE 6: RESPONSIBLE CONSIDERATION OF EMPLOYEES AND OF INDIVIDUALS AND COMMUNITIES

AFFECTED BY GROWERS AND MILLS

Criterion 6.1 Aspects of plantation and mill management, including replanting, that have socia l impacts are identi fied in a participatory way, and plans to mitigate the negative impacts and promote the pos i tive ones are made,

implemented and monitored, to demonstrate continuous improvement. Indicator 6.1.1

A documented socia l impact assessment including records of meetings . Major compl iance

Specific Guidance: Non-restrictive format incorporating elements spelt out in this cri terion and raised through stakeholder consultation

including loca l expertise.

Indicator 6.1.2 Evidence that the assessment has been done with the participation of affected parties . Minor compl iance Specific Guidance: Participation in this context means that affected parties or their officia l representatives or freely chosen spokespersons are able to express their views during the identification of impacts, reviewing findings and plans for

mitigation, and monitoring the success of implemented plans . Indicator 6.1.3

A timetable with respons ibi l i ties for mitigation and monitoring i s reviewed and updated as necessary. Minor compl iance

Guidance: Identification of social impacts may be carried out by the grower in consultation with other affected parties ,

including women and migrant workers as appropriate to the situation. The involvement of independent experts should be sought where this is considered necessary to ensure that all impacts (both pos i tive and negative) are identi fied. Particular attention should be paid to the impacts of outgrower schemes (where the plantation includes such a scheme).

Plantation and mi l l management may have socia l impacts on factors such as : 1. Access and use rights .

2. Economic l ivel ihoods (e.g. pa id employment) and working conditions . 3. Subs is tence activi ties . 4. Cultura l and rel igious va lues .

5. Health and education faci l i ties . 6. Other community va lues, resulting from changes such as improved transport /communication or arriva l of

substantia l migrant labour force.

Audit findings

Two social impact assessment reports were seen during the audit, one for SOU 28 estates and mill and the other for Jelata Bumi estate and mill. Both were prepared internally by Sime Darby’s TQEM in March and October 2009, respectively. The format of both reports is almost identical with reports of other Sime estates. The contents included a description on the background of the assessment


and the estates, the social issues and proposed mitigation measures. Each of the estates and the mill had to formulate its own action plan to address the issues raised by the various stakeholders. Among the issues raised include noise from workshops, transportation for school children, upgrading of recreational facilities, stray dogs and emergency response plan.

The SIA report was prepared with the participation of various stakeholders, namely, estate workers, local communities, contractors, vendors and suppliers. Evidence on participation is shown by the schedules of interviews between the assessors of the report and the stakeholders concerned. .

In addition to the requirements of the standards, Sime Darby require d its estates and mills to conduct stakeholders’ consultation once in six months to obtain feedbacks from its stakeholders on latest social issues, if any.

The assessor found that Jelata Bumi estate and Binuang mill regularly updated its Social Impacts Assessment Action Plan as required by the standard.

However, both the estate and mill did not conduct any stakeholders’ consultation at least once in six months as required by the company’s procedure. The last stakeholders’ meeting was held in June, 12 for Jelata Bumi estate and October 2012 for Binuang mill. Due to this non-conformance with the standard and the company’s procedure a Minor NCR # RM2 was raised. The stakeholders’ consultation exercises conducted by the estate and mill managed to identify issues which affect the stakeholders. However, they have yet to draw up the necessary action plans to address these issues. In the interest of the stakeholders and the estate/mill, it is strongly recommended that action plans be formulated to address the issues raised during the stakeholders’ consultations and incorporate them into the existing SIA action plans.

Criterion 6.2 There are open and transparent methods for communication and consultation between growers and/or millers, local

communities and other affected or interested parties .

Indicator 6.2.1 Documented consultation and communication procedures . Major compl iance

Indicator 6.2.2 A nominated plantation management officia l at the operating unit respons ible for these i ssues . Minor compl iance

Indicator 6.2.3 Maintenance of a list of s takeholders, records of all communication and records of actions taken in response to input

from stakeholders . Minor compl iance

Specific Guidance: Decisions that the growers or mills are planning to make should be made clear, so that local communities and other

interested parties understand the purpose of the communication and/or consultation.

Communication and consultation mechanisms should be designed in collaboration with local communities and other affected or interested parties These should cons ider the use of exis ting loca l mechanisms and languages .


Cons ideration should be given to the exis tence/ formation of a multi -s takeholder forum.

Communications should take into account differential access to information of women as compared to men, vi l lage leaders as compared to day workers, new versus establ ished community groups , and di fferent ethnic groups . Cons ideration should be given to involving thi rd parties , such as dis interested community groups , NGOs, or government (or a combination of these), to fa ci l i tate smal lholder schemes and communities , and others as appropriate, in these communications .

Audit findings Sime Darby Plantation had documented communication procedures for the estates and mill to follow (Appendix 5.5.3.2 of the Estate Quality Management System). In addition, the company had also prepared standard operating manuals on customer communications. So far no issue had been found or raised related to communication and consultation. The estate/mill usually communicate with external parties through letters and files are kept according to the agencies or department concerned. In addition, record books are maintained to register the requests or complaints from outside parties. The departments or agencies which the estate/mill regularly communicates include the Health Department, Department of Labour and Department of Education. The estates and mill communicate with their workers through various means, such as briefings and meetings, notice boards, emails and letters. The morning briefi ngs appear to be most popular means by which the estate management communicates with the workers. As stated in the external communication procedure, the Estate Manager is the nominated person to handle communication and consultation issues in the estates. However, the manager may delegate the responsibility to the assistant manager to handle these issues. Letters appointing assistant managers or other staffs to be the responsible official in-charge of these issues were seen during the audit. The estate/mill does maintain and update their lists of stakeholders which comprise vendors, contractors, local communities and government agencies. The latest list of stakeholders for Jelata Bumi estate, for example, comprises 31 vendors/suppliers, 7 contractors, 7 government agencies and 7 neighbouring estates. Binuang mill’s stakeholders comprised 4 contractors, 44 suppliers/vendors, 20 government agencies, 8 NGOs and 4 neighbouring estates. Communications between the estate/mill and the various stakeholders is usually done through letters which are kept in files in the estates and mill. The communication files are kept for quite a long time.

Criterion 6.3 There is a mutual ly agreed and documented system for deal ing with compla ints and grievances , which i s

implemented and accepted by a l l parties . Indicator 6.3.1

Documentation of the process by which a dispute was resolved and the outcome. Major compl iance

Specific Guidance: Records are to be kept for 3 years .


Indicator 6.3.2

The system resolves disputes in an effective, timely and appropriate manner. Minor compl iance

Indicator 6.3.3 The system is open to any affected parties .

Minor compl iance Guidance: Dispute resolution mechanisms should be established through open and consensual agreements with rel evant

affected parties . Compla ints may be dealt with by mechanisms such as Joint Consultative Committees (JCC) with gender

representation. Grievances may be internal (employees) or external .

Audit findings Sime Darby Plantation has documented communication procedures followed by the SOU to handle disputes arising from social as well as land issues (refer the Estate/Mill Quality Management Manual). Interviews with the estate management and staffs revealed that there have been no social and land dispute with outside parties or workers during the past years. Therefore, no records are available to judge whether or not the system resolved disputes in an effective, timely and appropriate manner. The estates and mill have also developed procedures also handle grievance or complaints or grievances from workers. Complaints on housing and other services are usually entered into record books or request for service forms. The records include the name of the person who complained, his address, date, and type of service required. The practices among the estates/mills in Kunak and Tawau differ with respect to getting complaints and grievances from their workers and staffs. Certain estates (eg. Jelata Bumi) require their workers to make verbal requests for services while others (eg. Giram) use forms to record the grievances. Others (eg. Tiger) enter complaints into record books. For the purpose of ensuring uniformity of practices as well as to better facilitate monitoring activities, it is recommended that the practices be standardized for all the estates and mills.

Criterion 6.4

Any negotiations concerning compensation for loss of lega l or customary rights are dealt with through a documented system that enables indigenous peoples, local communities a nd other s takeholders to express their views through their own representative insti tutions .

Indicators 6.4.1

Establishment of a procedure for identifying legal and customary rights and a procedure for identi fying people enti tled to compensation.

Major compl iance Indicator 6.4.2

A procedure for ca lculating and dis tributing fa i r compensation (monetary or otherwise) i s establ ished and

implemented. This takes into account gender differences in the power to claim rights, ownership and access to land; and long-established communities; differences in ethnic groups’ proof of legal versus communal ownership of land. Minor compl iance Indicator 6.4.3


The process and outcome of any compensation cla ims is documented and made publ icly ava i lable.

Minor compl iance Speci fic Guidance: This cri terion should be cons idered in conjunction with Cri terion 2.3.

Audit findings The SOU has been using the procedures for handling boundary issues developed by Sime Darby Plantation to deal with customary rights and compensation for loss of legal rights (Appendix 3, Plantation Quality Management System). The procedure starts with confirmation of conflict, negotiation with affected parties and, if not resolved, arbitration process will take place. Compensation on loss of legal rights will be determined by the land authority.

So far, there has been no dispute involving customary rights in SOU 28.

Criterion 6.5 Pay and conditions for employees and for employees of contractors always meet at least legal or industry minimum standards and are sufficient to provide decent l iving wages . Indicator 6.5.1 Documentation of pay and conditions .

Major compl iance Indicator 6.5.2

Labour laws , union agreements or di rect contracts of employment deta i l ing payments and conditions of employment (e.g. working hours, deductions, overtime, sickness, holiday entitlement, maternity leave, reasons for

dismissal, period of notice, etc) are available in the language understood by the workers or expla ined careful ly to them by a plantation manageme nt officia l in the operating unit.

Minor compl iance Indicator 6.5.3

Growers and millers provide adequate housing, water supplies, medica l , educational and wel fare amenities in accordance with Workers’ Minimum Standard of Housing and Amenities Act 1990 (Act 446) or above, where no such publ ic faci l i ties are ava i lable or access ible (not appl icable to smal lholders ). Minor compl iance Guidance: Where temporary or migrant workers are employed, a special labour policy should be established. This labour policy

would s tate the non discriminatory practices; no contract substitution of original contract, post arriva l orientation program to focus especially on language, safety, labour laws, cultural practices etc; decent l iving conditions to be provided. Migrant workers are legalised, and a separate employment agreement should be drawn up to meet

immigration requirements for foreign workers , and international s tandards , i f rati fied.

Audit findings The employment contracts signed by the workers and staffs spelled out their pay and work conditions. These contracts conform to the minimum standards as stipulated in the Collective Agreement (CA), 2011 - 2013 signed by Sime Darby and Sabah Plantation Industry Employee Union (SPIEU). Among others, the contracts spell out the period of employment, wage rate, work benefits, overtime, annual leave and public holidays. For foreign workers, these contracts are


renewed every time the worker renews his/her employment with the estate or mill. Labour laws, union agreements or direct contracts of employment detailing payments and conditions of employment (e.g. working hours, deductions, overtime, sickness, holiday entitlement, maternity leave, reasons for dismissal, period of notice, etc) are available in the language understood by the workers or explained carefully to them by a plantation management official in the operating unit. The appointment letter is in Bahasa Malaysia and quite self-explanatory. The CA, however, is in the English language. Interviews revealed that the estate/mill management did make efforts to explain the contents of the CA through morning briefings or other means of communications, such as meetings.

Figure 20: Collective agreement effective Jan 2011 to Dec 2013

The SOU 28 had provide adequate housing, water supplies, medical, educational and welfare amenities in accordance with Workers’ Minimum Standard of Housing and Amenities Act 1990 (Act 446) In all the estates and mill, new two or three bedroom houses have been built to replace the old on es. In every estate there is a surau, clinic, kindergarten, crèche and canteen. In Jelata Bumi estate electricity is provided 24 hours water is provided free of charge. Visits made to the line site show that the houses and compounds are quite well kept (Figure 21).

Figure 21: New houses, crèche and surau (background) at Jelata Bumi estate


Criterion 6.6

The employer respects the right of a ll personnel to form and join trade unions of their choice and to bargain col lectively. Where the right to freedom of association and col lective bargaining are restricted under law, the employer facilitates parallel means of independent and free association and bargaining for a l l such personnel . Indicator 6.6.1 Documented minutes of meetings with main tra de unions or workers representatives . Major compl iance

Indicator 6.6.2

A publ ished s tatement in loca l languages recognizing freedom of association. Minor compl iance

Guidance: The right of employees and contractors to form associations and bargain collectively with their employer should be respected. Documented company pol icy recognizing freedom of association. Labour laws and union agreements or in their absence, direct contracts of employment deta i l ing payments and

other conditions are available in the languages understood by the workers or expla ined careful ly to them by a plantation management officia l in the operating unit.

Audit findings The workers in the estates and mill are members of the Sabah Plantation Industry Employees Union (SPIEU) while the administration staffs are members of the All Malaysian Estate Staffs Union (AMESU). In Tiger estate as well as in Merotai mill, there is a SPIEU representative selected among the workers. Nonetheless, there has been no formal meeting with union representatives in the estate and mill. However, the union representative in Jelata Bumi estate has been appointed as a member of the Safety Committee. No union representative has been appointed as members of the safety committee at Binuang mill. Therefore, there appears to be no minutes of meeting between the management and union representatives in Binuang mill. Due to this non-conformance, a major NCR # RM1 was raised against the standard.

Currently, the estate and mill do not have formal regular meetings with union leaders. This practice is quite acceptable because there is no full committee membership of union leaders in the estate/mill. However, the union leaders need to convey or voice the members’ concerns to the estate/mill management. Interview En. Amran Dali, the union leader at Jelata Bumi, revealed that estate workers often bring issues to him to be conveyed to the estate management. Therefore, the union representatives at each estate/mill should be appointed as members of permanent estate/m ill committee, for example, the safety committee. A published statement on freedom of association is displayed in the estate and mill.

Criterion 6.7 Chi ldren are not employed or exploited. Work by children is acceptable on family farms, under adult supervis ion, and when not interfering with education programmes. Children are not exposed to hazardous working conditions .


Indicator 6.7.1 Documented evidence that minimum age requirement i s met. Major compl iance Guidance: Growers and millers should clearly define the minimum working age, together with working hours. Only workers 16 years and older may be employed, with the stated exception of family farms. Smal lholders should a l low work by

chi ldren only i f permitted by national regulations .

The minimum age of workers should be not less than 16 years, or the minimum school leaving age, or the minimum age permitted under national regulations , where higher.

Audit findings Sime Darby adheres very strict to the child labour policy. As revealed in the latest Employee Master Listing no person below 18 years old was recruited to work either in Jelata Bumi estate or Binuang mill. The lowest starting age of estate worker is 19 years old.

Criterion 6.8 Any form of discrimination based on race, caste, national origin, religion, disability, gender, sexual orientation, union membership, pol i tica l a ffi l iation, or age, i s prohibi ted.

Indicator 6.8.1 A publ icly ava i lable equal opportunities pol icy. Major compl iance Indicator 6.8.2

Evidence that employees and groups including migrant workers have not been discriminated against. Minor compl iance

Guidance: The grievance procedures detailed in 6.3 apply. Positive discrimination to provide employment and benefi ts to

speci fic communities i s acceptable as part of negotiated agreements

Audit Findings A policy on non-discrimination is incorporated in the statement of Social Policy of Sime Darby and posted on notice boards in all estates/mills.

There is no evidence of discrimination based on race, gender or national origin or any other factors. As shown in the employment letter, there are no differences in the terms of employment between foreign and local workers or between male and female workers. These workers live in the same housing complex and enjoy similar benefits. However, due to government policies, education opportunities differ between local and foreign children. Interviews also revealed that there is no discrimination on any bases in the estates/mill.

Criterion 6.9 A pol icy to prevent sexual harassment and a l l other forms of violence against women and to protect their

reproductive rights i s developed and appl ied. Indicator 6.9.1

A pol icy on sexual harassment and violence and records of implementation. Major compl iance Indicator 6.9.2


A speci fic grieva nce mechanism is establ ished.

Major compl iance Guidance: There should be a clear pol icy developed in consultation with employees , contractors and other relevant s takeholders , which should be publ icly ava i lable. The pol icy i s appl icable within the boundari es of the plantation/mills or while on duty outside the premises. Progress in implementing the pol icy should be regularly monitored and the results of monitoring activi ties should be recorded.

A committee speci fica l ly to address concerns of women may be required to comply with the cri terion. This

committee will consider matters such as; tra ining on women’s rights, counseling for women affected by violence and chi ld care faci l i ties to be provided by the growers and mi l lers . The activi ties of the committee should be documented.

Audit findings Sime Darby Plantation has explicit policy statements on sexual harassment which guide the activities carried out in the estates. In addition, a Manual on the Implementation of Gender Policy has also been documented which incorporates, among others, the grievance procedures. Jelata Bumi estate and Binuang mill have established Gender Committees (GC) which organise programs and activities for their members. The GC at Binuang mill and Jelata Bumi estate have been quite active organizing various activities including health campaigns, poco-poco dancing competition, sports carnival and cultural shows. Two cases of domestic violence and one case of sexual harassment have been reported to the GC at Jelata Bumi estate. The chairperson of the committee reported that proper investigations have been carried out by the estate management and appropriate actions have been taken on the workers involved.

The grievance procedure is incorporated in the Manual on sexual harassment. These procedures have been followed in the sexual harassment case mentioned earlier.

Criterion 6.10

Growers and mi l l s deal fa i rly and transparently with smal lholders and other loca l bus inesses .

Indicator 6.10.1 Pricing mechanisms for FFB and inputs /services shal l be documented. Major compl iance

Indicator 6.10.2

Current and past prices pa id for FFB shal l be publ icly ava i lable. Minor compl iance

Indicator 6.10.3 Evidence shall be available that a l l parties understand the contractual agreements they e nter into, and that contracts are fa i r, lega l and transparent. Minor compliance Indicator 6.10.4

Agreed payments shal l be made in a timely manner.

Minor compl iance

Guidance : Transactions with smallholders should consider issues such as the role of middlemen, transport and s torage of FFB,


quality and grading. The need to recycle the nutrients in FFB (under 4.2) should also be considered; where i t i s not

practicable to recycle wastes to smallholders, compensation for the value of the nutrients exported might be made via the FFB price. Smallholders must have access to the grievance procedure under cri terion 6.3, i f they cons ider that they are not receiving a fa i r price for FFB, whether or not middlemen are involved. The need for a fa i r and transparent pricing mechanism is particularly important for out growers , who are

contractual ly obl iged to sel l a l l FFB to a particular mi l l .

If mi lls require smallholders to change practices to meet the RSPO cri teria, consideration must be given to the costs of such changes , and the poss ibi l i ty of advance payments for FFB could be cons idered.

Audit findings Brief Interviews were carried out with a few contractors and supplier at Jelata Bumi and Binuang mill to understand the business relationships between them and the estate/mill (Figure 22). The suppliers interviewed explained that the standard purchasing procedure has been followed for the supply of services to the estate/mill. In this procedure, the price of the service has always been documented in the quotation and purchase order. In the case of long-term contract, the price of the service is spelled out in the agreement or contract. The FFB transporter mentioned that he is paid RM13/ton for transporting FFB and this price is quoted in the contract. The rate of payment has been decided by the Sime Darby’s Headquarters. The current and past prices paid for FFB was not publicly available. However this criterion.does not apply to the Binuang mill as it does not buy outside crops The FFB transporter and the suppliers interviewed mentioned that they understand the contract even though it is written in the English language. The contents of the contract have not changed much since they started serving the company many years ago. The contractor and suppliers mentioned that he usually received his payments in the form of cheques the following month after the job was done. Usually, the cheques are issued in the first week of the following month after the job was completed. The contractor and suppliers have no complaint on the timeliness of the payment.


Figure 22: Interviewing FFB transporter at Jelata Bumi estate

Criterion 6.11

Growers and mi l lers contribute to loca l susta inable development wherever appropriate.

Indicator 6.11.1 Demonstrable contributions to loca l development that are based on the results of consultation with loca l communities . Minor compl iance Guidance: Contributions to local development should be based on the results of consultation with local communities. See a lso Cri terion 6.2. Such consultation should be based on the principles of transparency, openness and participation and should encourage communities to identify their own priorities and needs, including the different needs of men and

women. Where candidates for employment are of equal merit, preference should a lways be given to members of loca l

communities in accordance to national policy. Pos itive discrimination should not be recognized as confl icting with Cri terion 6.8.

Audit Findings Jelata Bumi estate and Binuang mill have no neighbouring local communities. However, the mill is located not far from a popular mud pool which is frequently visited by local people as well as those from out of town. The estate road has always been used by those people who visit the mud pool. Therefore, the estate is facilitating tourists and visitors to enjoy a tourism product in a rather limited scale. In addition, the estate and mill have always been important sources of employment and business for the local populations.

PRINCIPLE 7: RESPONSIBLE DEVELOPMENT OF NEW PLANTINGS

Cri terion 7.1 A comprehensive and participatory independent social and environmental impact assessment i s undertaken prior to establishing new plantings or operations, or expanding existing ones, and the results inco rporated into planning,

management and operations.


Indicators:

7.1.1 An independent and participatory social and environmental impact assessment (SEIA) to be conducted and documented (Cross ref. to C 7.2, 7.3, 7.4, 7.5, 7.6). Major compliance Speci fic Guidance: SEIAs to include previous land use / history and involve independent consultation as per national and state regulations, via participatory methodology which includes external s takeholders. For Sabah, slopes 25 degrees and

above are considered high risk erosion areas and cannot undergo replanting unless specified in the EIA report [Environment Impact Assessment (Order 2005)] and approved by the Environmental Protection Department (EPD).

For Sarawak, steep s lopes are considered high risk erosion areas and cannot undergo replanting unless specified in the EIA report [Natural Resources and Environment (Prescribed Activi ties) Order 1994] and approved by the Natural Resources and Environment Board (NREB).

7.1.2 The results of the SEIA to be incorporated into an appropriate management plan and operational procedures developed, implemented, monitored and reviewed. Minor compliance

7.1.3 Where the development includes smallholder schemes of above 500ha in total, the impacts and implications of how i t i s managed should be documented and a plan to manage the impacts produced. Minor compliance Guidance: The terms of reference should be defined and impact assessment should be carried out by accredited independent experts, in order to ensure an objective process. Both should not be done by the same body. See also C 5.1 and C

6.1. This indicator i s not applicable to development of smallholder schemes below 500ha. For Sabah, new planting or replanting of area 500ha or more requires EIA. For areas below 500ha but above 100ha, proposal for mitigation

measures (PMM) is required. For Sarawak, only new planting of area 500ha and above requires EIA. Onus is on the company to report back to the DOE on the mitigation efforts being put in place arising out of the EIA.

Assessment of above and below ground carbon storage is important but beyond the scope of an EIA. Note: This aspect will be considered by an RSPO Greenhouse Gas Working Group.

SDPSB has no plan for new planting. The assessors verified that they could not see any new land being opened up for new planting. Thus Principle 7 is not applicable. PRINCIPLE 8: COMMITMENT TO CONTINUOUS IMPROVEMENT IN KEY AREAS OF ACTIVITY

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

MY NIWG commits to demonstrate progress ive improvement to the fol lowing but not l imited to:

Indicator 8.1.1 Minimize use of certa in pesticides (C4.6)

Major compl iance

Indicator 8.1.2 Environmental impacts (C5.1) Major compl iance

Indicator 8.1.3 Maximizing recycl ing and minimizing waste or by-products generation. Major compl iance Speci fic Guidance


To work towards zero-waste (C5.3)

Indicator 8.1.4 Pol lution prevention plans (5.6) Major compl iance Indicator 8.1.5

Socia l impacts (C6.1) Major compl iance

Indicator 8.1.6 A mechanism to capture the performance and expenditure in socia l and environmental aspects .

Minor compl iance Guidance Speci fic minimum performance thresholds for key indicators should be established. (See also Cri terion 4.2, 4.3, 4.4, and 4.5).

Growers should have a system to improve practices in l ine with new information and techniques and a mechanism for disseminating this information an d throughout the workforce.

Audit findings Generally, the SOU 28 had established continuous improvement plans for all the indicators. Most of the plans had been implemented through the requirement of their internal integrated management system. Among the improvement plans were to review the HCV reports, practices to minimize chemical usage by substituting through the planting of cover crops in the immature fields rather than using herbicides for field upkeep; on the welfare of workers front, new housing and facilities are being constructed in phases as part of the company’s commitment to provide better living conditions and on the environmental impact.


3.2 Identified Non-conformities Details of the non-conformities, corrective actions taken by all assessed SOUs, and assessors’ verification of the corrective actions taken are in Attachment 3.

3.3 Status of Non-conformities Previously Identified All previous nonconformities were verified for the corrective actions effectiveness. Corrective action has been taken and verified by the assessor. Details of the verified nonconformities are in Attachment 4.

3.4. Noteworthy Positive Observations SOU 28 had improvement made to their RSPO implementation. This can be seen from physical improvement of housing and related amenities condition, use of cover crops instead of herbicides, as well as chemical and wastes storage area including the changing room for the sprayers. The workers housing are kept clean and beautiful as part of the ‘Beautiful House Contest’ and good housekeeping was still continually practiced at all workplace. The level of awareness among the workers on the RSPO implementation has also improved. They are able to explain not only the operating procedure related to their work but also the impact of its deviation, the consequence for not following them and the importance in achieving conformity to the RSPO requirements. Commitment from top management on the RSPO implementation is also evident during the assessment. This also includes subsidizing the migrant worker’s children education at the HUMANA school at the SOUs.

3.5 Issues Raised by Stakeholders and Findings with Respect to the Issues Among the stakeholder consulted during the surveillance assessment were: Workers from different group of tasks

Management staff

Union representative FFB supplier

Local community

Female worker representative

Civil work contractor Generally all stakeholder consulted give positive remarks that they have no issue on dealing/working with all the three SOUs assessed. They have seen some improvements on since the implementation of the RSPO Certification Scheme.


3.6 Supply Chain RSPO Member Number : 1-0008-04-000-00 (Sime Darby Plantation Sdn Bhd) Address : Binuang 91207 Kunak SABAH Assessment Date : 5 February 2013 Standard: RSPO Supply Chain Certification Systems, November 2011 Scope of Assessment (specify supply chain model(s) used): Processing of RSPO certified sustainable oil palm fresh fruit bunches (FFBs) to RSPO certified sustain able crude

palm oil and palm kernel using the Segregation (SG) model.

3.6.1 Description of the organization 3.6.1.1 Description of the organization’s activity Binuang Palm Oil Mill (BPOM) is one of the subsidiary companies of Sime Darby Plantation (Sabah) Sdn Bhd. The mill is located in Binuang, Kunak, Sabah. BPOM was commissioned in 1992 to process oil palm fresh fruit bunches (FFBs) to produce crude palm oil (CPO) and palm kernel (PK). BPOM has 113 workers of which 72 are Sabahan while the remaining 41 are foreigners mostly Indonesian. The processing of the FFBs involved the sterilization, threshing and pressing to extract the oil. BPOM’s main sources of RSPO certified FFBs are the company’s own supply base; Binuang, Tingkayu, Sungang and Jeleta Bu mi Estates which had been certified against the MY-NI: 2008 of the RSPO Principles and Criteria for Sustainable Palm Oil Production by SIRIM QAS International Sdn Bhd in January 2009. BPOM does not buy and process FFBs from outside suppliers. The mill has a processing capacity of 40 metric tonnes (MT) of FFBs per hour. It processes about 650 MT of FFB daily or about 200,000 MT annually. For 2012, BPOM has received a total of 198,019 MT of RSPO certified FFBs to produce about 44,004 MT and 9,647 MT of RSPO certified CPO and certified PK respectively. Currently, all of the mill’s production of CPO is delivered to the Kunak Bulking Installation (KBI), a subsidiary of Sime Darby Holding Berhad (SDHB). The CPO is later sold locally or exported by SDHB. BPOM had been implementing the Segregation (SG) model for its supply chain system beginning in January 2009 after obtaining the RSPO Certificate for Sustainable Palm Oil Production. The CPO produced by BPOM had been traded by its parent company, SDHB as GreenPalm. SDHB has also obtained the approval of the RSPO Secretariat to trade the CPO as certified under the RSPO e-trace. However, the company’s registration with the RSPO e -trace would be expiring soon on 14 April 2013. There was no sale contract being issued by the supplying estates and payments of the in-coming RSPO certified sustainable FFBs to BPOM from the supplying estates were being handled at the corporate level. BPOM has not and would not be directly involved in the selling or exporting of the RSPO certified sustainable CPO. All sales and marketing activities were done by the Global Trade and Marketing (GTM) Department of Sime Darby Plantation Sdn Bhd, at the Head Office in Kuala Lumpur.


3.6.1.2 Description of the scope of the certification and specify supply chain model(s) used The scope of the certification of the supply chain system covers from the receiving and processing of the incoming RSPO certified sustainable oil palm FFBs to produce RSPO certified sustainable CPO and palm kernel and the dispatch of these same products using the SG model. 3.6.1.3 Annual certified volume of RSPO certified palm oil over a specified period For the year 2012, BPOM has processed a total of 198,019 MT of RSPO certified FFBs to produce about 44,004 MT and 9,647 MT of RSPO certified CPO and certified PK respectively. 3.6.2 Summary of Audit Findings i) Documented procedures BPOM has submitted a document entitled ‘Standard Operating Procedure (SOP) for RSPO Supply Chain Certification System and Traceability’ (SOP) dated 1 August 2012 prior to the conduct of the on-site audit. The auditor has commented on the SOP as it has not adequately described the procedures and work instructions to address the specific requirements of the RSPO Supply Chain Certification Standard, November 2011 (RSPO Supply Chain Standard). However, the company has requested the on-site audit to proceed as scheduled. During the on-site audit, it was found that BPOM has not amended its SOP to describe the detailed procedures and work instructions to address the specific requirements of the RSPO Supply Chain Standard. The SOP remained as it was when first submitted to the auditor prior to the conduct of the on-site audit. It was just a reproduction of the Supply Chain Certification Standard. The SOP has not described the procedures and work instructions to ensure the implementation of all the elements of the RSPO Supply Chain Standard namely on (1) receiving and goods in for certified FFBs (2) processing (including segregation of certified CPO and measure to avoid contamination (3) sales and good out (dispatch) of the certified CPO products (4) record and maintenance of data on the in-coming RSPO and non-RSPO certified FFBs and (5) claims on the use of the RSPO trademark. This was therefore raised as NCR II 1/2013. BPOM has appointed Ms. Zuwainah Spedy as the person responsible for overseeing the implementation and maintenance of the RSPO supply chain system and ensuring it complies will all requirements of the RSPO Supply Chain Standard. It was observed that Ms. Zuwainah has demonstrated a good understanding on the requirements of the RSPO Supply Chain Standard and on the related procedures which the BPOM has been implementing although they have not been properly documented in the SOP. The RSPO and Certification Unit of Sime Darby Plantation Sdn Bhd at the Head Office in Kuala Lumpur has amended and submitted a revised SOP dated March 2013 which has described the procedures and work instructions on the specific elements of the RSPO Supply Chain Standard. The auditor has reviewed the revised SOP and was satisfied that it has included the required procedures related to implementation of the elements as specified in the RSPO Supply Chain Standard. The corrective action taken has been adequate and therefore NCR II 1/2013 is now being closed out. ii) Purchasing and Goods in The RSPO certified sustainable FFBs were supplied only by BPOM’s own supply bases, the Binuang, Tingkayu, Sungang and Jeleta Bumi Estates, which had been certified against the MY-NI: 2008 of the RSPO Principles and


Criteria for sustainable palm oil production. There was no issuance of a purchase order. A ‘FFB consignment note’, issued by the certified estates, accompanied every lorry load of certified FFBs for delivery to BPO M. The FFB consignment note has indicated clearly the name of the supplying estate. Only FFBs supplied by the mill’s four supply bases were processed as RSPO certified sustainable FFBs. An ‘FFB Receive’ was issued after the lorry load of FFBs had been weighed at the mill’s gate by the Weighbridge Clerk. Similarly the FFB Receive has also clearly indicated the name of the supplying estate. The FFB consignment note issued by the supplying estate and the FFB Receive, were the two most important documents used in tracing the origins of the FFBs. The procedure on purchasing (receiving) and goods in has now been documented in the revised SOP (see NCR II 1/2013)

iii) Sales and goods Out (Dispatch) BPOM has not and would not be directly involved in the sale of the RSPO certified sustainable CPO. BPOM would only deliver the certified sustainable CPO to the KBI for storage prior to exporting by ocean vessels. Upon arrival at KBI, the RSPO certified CPO from a tanker is emptied into a separate pit. The oil is then pumped into a tank, which has been assigned for storing RSPO certified CPO. In terms of documentation, it was observed during the visit to BKI that apart from the name of the supplying estate, it was difficult to determine the status of the CPO from the relevant delivery-related documents such as weighbridge ticket (issued by BKI) and the CPO dispatch authorization, dispatch note and weighbridge ticket (issued by the supplying mill). These documents have not indicated the supply chain model of the certif ied CPO. The procedure on the issuance of the delivery-related documents has not been described in the earlier SOP. The revised SOP has now clearly outlined the procedures on the dispatching of certified CPO and the specific information which must be indicated in all the relevant delivery-related documents including a description of the product and the supply chain model (see NCR II 1/2013). iv) Processing BPOM has been processing only its own certified FFBs from the four supplying estates. Therefore, the risk of mixing of RSPO and non-RSPO certified FFBs is almost non-existence. The processing of FFBs was still being done using the conventional method involving sterilization, threshing and pressing of the FFBs to extract the oil. The revised SOP has prescribed the measures to be taken to avoid contamination of the certified CPO during dispatching at the mill, storage at BKI and transfer into the vessel. The procedures require flushing, cleaning and sweeping of processing tanks and pipelines to eliminate traces of non-certified RSPO oil. The traceability of a production batch of RSPO certified CPO is made possible by referring to the CPO delivery and the FFB in -coming related documents. v) Record keeping The revised SOP now requires record relating to the RSPO supply chain system to be maintained for a minimum of 5 years. The types of records to be kept include the weighbridge ticket, FFB consignment note, FFB receive note, CPO/PK dispatch note, CPO/PK authorization and other relevant documents related to the supply chain system. It was also observed that BPOM has been using the System Application Productivity (SAP) a computer software for recording the receiving of FFBs at the weighbridge and in the Daily CPO Production Record which has enabled the company to accurately capture the quantity of FFBs being processed and production of CPO daily as well as compute and monitor the monthly and annual RSPO certified sustainable CPO stock levels.


vi) Training The available record on training has indicated that only three of the company’s staff; Mr. Cheok Sing Chia (Mill Manager), Ms. Zuwainah Spedy (QA Conductor) and Mr. Anuar Ramano (Lab Conductor) have attended a training on the Supply Chain Certification System. The training was held on 11 December 2012 at the Merotai Plam Oil Mill. It was facilitated by Ms. Nurulashida Mohd Saad and Ms. Sheun Su Sin of the RSPO and Certification Unit, Plantation Sustainability and Quality Management, Sime Darby Plantation Sdn Bhd Head Office in Kuala Lumpur. BPOM needs to organize a training for the other key personnel whose work is related to the implementation of the specific elements in the RSPO Supply Chain Certification Standard. This was therefore raised as NCR II 2/2013. BPOM has organized a training on 16 February 2013 which was attended by the key security and weighbridge personnel only. The training was conducted by Mr. Miss Zuwainah Spedy, the mill’s QA. Attendance record was submitted as evidence that a training has been conducted. As the BPOM has been and would be processing only RSPO certified FFBs, the auditor was of the view that this corrective action has been adequate and therefore had decided to close out NCR II 2/2013. vii) Claims BPOM has not and would not be directly involved in sale of the RSPO certified sustainable CPO/PK. It will only deliver the certified sustainable CPO/PK to BKI. The company will not be making on-product claims on the RSPO certified sustainable CPO it delivers to the BKI. The activities on marketing and sale of the RSPO certified sustainable CPO, are currently being done by the Global Trade and Marketing Department at the Head Offices in Kuala Lumpur. However, the SOP has prescribed that the rules of making claims on RSPO certified sustainable CPO must comply with the document ‘RSPO Guidelines on Communications and Claims’. 3.6.3 Audit Conclusion Based on the findings of the audit, the auditor was of the view that the Binuang Palm Oil Mill has fulfilled all the requirements for the SG model of the RSPO Supply Chain Certification System, November 2011. BPOM has taken the appropriate corrective actions to address both NCR II 1/2013 and NCR II 2/2013 raised during this audit. The auditor have verified the corrective actions taken and was satisfied that they have been adequate to addre ss both of the NCRs. The auditor therefore recommends that the Binuang Palm Oil Mill be considered for the award of the RSPO Supply Chain Certificate.


4. 0 Recommendation Based on the evidence gathered it can be concluded that Sime Darby Plantation Sdn. Bhd. Binuang -SOU 28 continue to conform to the requirements of the RSPO MY-NI: 2008. All nonconformities including major nonconformities have been closed out through verification of corrective action records. Therefore, the assessment team recommends Sime Darby Plantation Sdn. Bhd. Binuang-SOU 28 to continue to be certified against RSPO MY-NI: 2008. 5.0 Certified organization’s Acknowledgement of Internal Responsibility and Formal sign-off of assessment findings I, the undersigned, representing SOU 28 acknowledge and confirm the contents of the assessment report and findings of the assessment.

I, the undersigned on behalf of SIRIM QAS International Sdn. Bhd. confirm the contents of the assessment report and findings of the assessment.

Mahzan Munap __________________________ Date : 31 January 2013 Name : Mahzan Bin Munap (Lead Assessor)


Attachment 1 LOCATION MAP KUNAK/TAWAU SABAH, MALAYSIA

LOCATION OF SOUs BINUANG, GIRAM AND MEROTAI

Note: Not to scale


Attachment 2

ASSESSMENT PROGRAMME

SIRIM QAS INTERNATIONAL SDN. BHD. Food, Agriculture and Forestry Section

RSPO Surveillance Audit Plan

1. Objectives

The objectives of the assessment are as follows: (i) To determine Sime Darby Plantation Sdn. Bhd. SOU 28, SOU 29, SOU 30 conformance against the RSPO

Principles & Criteria Malaysian National Interpretation (MY-NI). (ii) To verify the effective implementation of corrective actions arising from the findings of last assessment.

(iii) To make appropriate recommendations based on the assessment findings.

2. Date of assessment : 14th – 17th January 2013 3. Site of assessment : Sime Darby Plantation Sdn. Bhd.

SOU 28 Binuang, 91207 Kunak, Sabah SOU 29 Giram, 91207 Kunak, Sabah SOU 30 Merotai, 91007 Tawau, Sabah

4. Reference Standard

a. RSPO P&C MY-NI 2007 and MY-NI Indicators and Guidance 2008

b. Company’s audit criteria including Company’s Manual/Procedures 5. Assessment Team

a. Lead Assessor : Khairul Najwan Ahmad Jahari b. Assessor : Mahzan Munap Dr. Rusli Muhd

Selvasingam T Kandiah If there is any objection to the proposed audit team, the organization is required to inform the Lead Auditor/RSPO Section Manager.

7. Audit Witness: None

8. Audit Method Site audits including observation of practices, interviews with interested parties (employees, nearby population, etc.), documentation evaluation and evaluation of records.

9. Confidentiality Requirements


SIRIM QAS International shall not disclose any information concerning the c ompany regarding all matters arising or coming to its attention with the conduct of the programme, which is of confidential in nature other than information, which is in the public domain.

In the event that there be any legal requirements for disclosing any information concerning the organization, SIRIM

QAS International shall inform the organization of the information to be disclosed.

10. Working Language : English and Bahasa Malaysia

11. Reporting a) Language : English b) Format : Verbal and written

c) Expected date of issue : Sixty days after the date of assessment d) Distribution list : Client fi le

12. Facilities Required a. Room for discussion b. Relevant document and record

c. Personnel protective equipment if required d. Photocopy and printing facility e. A guide for each group

13. Assessment Programme Details : As follows


Travelling Day: 13 January 2013 (Sunday) Activi ties /areas to be vis ited

Mahzan

Dr. Rus l i

Najwan

Selva

Auditee

Morning Travel ling from KL to Tawau / Flight MH 2664 / ETD 1140 Hrs / ETA 1430 Hrs

Travel ling from Tawau Airport to Kunak

Day one: 14th January 2013 (Monday)

Activi ties /areas to

be vis ited

Mahzan

Dr. Rus l i

Najwan

Selva

Auditee

0800-

0830

Opening Meeting, audit team introduction and briefing on audit objectives, scope, methodology, cri teria and programmes by audit team leader Top mgmt & Committee

Member

0830-0900

Briefing on the organization implementation of RSPO (including action taken to address main assessment findings) Management Representative

0900-1630

Si te vis i t and assessment at Jelata Bumi Estate

Veri fy previous audit findings

Assessment on P1, P2 (2.1-2.1.1), P4(4.7), P6 ( 6.6, 6.7. 6.8, 6.9, 6.10, 6.11), P8

Workshop

Witness activi ties at site i.e. spraying / weeding

harvesting, etc

Chemical stores

Si te visit and assessment at Binuang Oil Mill


Assessment on P1, P2 (2.1,2.1.1), P6 (6.1, 6.2, 6.3, 6.4, 6.5) P8

Local communities and s takeholders

Interview with Union representative

Workers Issues Line site

Continuous improvement

Si te visit and assessment at Binuang Estate

Veri fy previous audit findings Assessment on P1, P2 (2.1, 2.2), P3, P4 (4.4.7), P5 (5.1, 5.2), P8

Conservation area management

Riparian Zone

Boundary Water catchment area

Safety & Health practice – witness activi ties at s ite

Workshop

Witness activi ties at site i.e.

Si te visit and assessment at Sunggang Estate


Assessment on P1, P2, P3, P4 (4.1, 4.2, 4.3, 4.4, 4.5, 4.6), P5(5.3, 5.5), P8

Commitment to transparency

Laws and regulation Good Agricultural Practice

Chemical store / fertilizer s tore

Nursery

EFB mulching Waste management

Safety & Health practice –

witness activi ties at s ite

Guide/PIC


spraying / weeding harvesting, etc

Chemical stores



1200-

1300

Break

1300-1630

Si te visit and assessment at Binuang Oil Mill


Assessment on P1, P2 (2.1), P4(4.7), P6(6.5, 6.6, 6.7. 6.8,

6.9, 6.10, 6.11), P8

View documentation and records relating to OSH Management System

Commitments to transparency

Laws & regulations

Commitment to long term economic and financial

viability Safety & Health practice –

witness activi ties at s ite Chemical management

Interview workers, safety committee and contractors


Si te vis i t and assessment at Jelata Bumi Estate.







Continue assessment at Binuang Estate

Continue assessment at Sunggang Estate

Guide/PIC


1730-2000

Break

2000-2200

Audit team discuss ion and veri fication on any outstanding i ssues

Note: Assessor to inform auditee on the required document/records

Relevant PIC

Day two: 15th January 2013 (Tuesday)

Activi ties /areas to be vis ited

Mahzan

Dr. Rus l i

Najwan

Selva

Auditee

0800-1200

Si te visit and assessment at Giram Oil Mill

Veri fy previous audit findings Assessment on P1, P2 (2.1), P4(4.7), P6(6.5, 6.6, 6.7. 6.8, 6.9, 6.10, 6.11),

P8

View documentation and records relating to OSH Management

System


Laws & regulations

Commitment to long term economic and financial viability


Chemical management



Si te visit and assessment at Giram Estate

Veri fy previous audit findings Assessment on P2 (2.1,2.1.1), P6,





Si te visit and assessment at Giram Estate

Veri fy previous audit findings Assessment on P1, P2 (2.1, 2.2), P5 (5.1-5.6), P8


Riparian Zone



Riparian Zone



Workshop

Witness activi ties at site i.e. spraying / weeding harvesting,

etc Chemical stores

Si te vis i t and assessment at Mostyn Estate

Veri fy previous audit findings Assessment on P1, P2, P3, P4 (4.1, 4.2, 4.3, 4.4, 4.5, 4.6), P5(5.3, 5.5), P8


Laws and regulation

Good Agricultural Practice Chemical store / fertilizer s tore

Nursery

EFB mulching

Waste management Safety & Health practice – witness

activi ties at site


Guide/PIC


1200-1300

Break

1300-1630

Continue assessment at Giram Oil Mill Si te visit and assessment a t Giram Oil Mill







Continue assessment at Giram Estate Continue assessment at Mostyn Estate

Guide/PIC

1630-

2000

Travel l ing to Tawau

2000-2200

Audit team discuss ion and veri fication on any outstanding i ssues


Relevant PIC

Day three: 16th January 2013 (Wednesday)

Activi ties

/areas to be vis ited

Mahzan

Dr. Rus l i

Najwan

Selva

Auditee

0800-

1630

Si te visit and assessment at

Merotai Oil Mill Veri fy previous audit findings

Assessment on P1, P2 (2.1-2.1.1),

Si te visit and assessment at Tiger

Estate. Veri fy previous audit

findings

Assessment on P1, P2 (2.1,2.1.1),

Si te visit and assessment at Imam

Estate Veri fy previous audit findings Assessment on P1, P2 (2.1, 2.2), P3,

P4 (4.4.7), P5 (5.1, 5.2), P8

Si te visit and assessment at Table

Estate Veri fy previous audit findings

Assessment on P1, P2, P3, P4 (4.1,

4.2, 4.3, 4.4, 4.5, 4.6), P5(5.3, 5.5),

Guide/PIC


P4 (4.1, 4.7), P6 (6.5, 6.6, 6.7. 6.8, 6.9, 6.10, 6.11), P8

View documentation and records relating to OSH

Management System


Laws & regulations Commitment to long term

economic and financial viability


Chemical management



P6 (6.1, 6.2, 6.3, 6.4, 6.5) P8


Faci lities



Riparian Zone

Water catchment area Workshop

Chemical stores


P8


Laws and regulation

Good Agricultural Practice Continuous improvement

1200-1300

Break

1300-

1630

Continue assessment at Merotai Oil

Mi l l

Si te visit and assessment at

Merotai Oil Mill Veri fy previous audit

findings



Faci lities


Continue assessment at Imam Estate Continue assessment at Table

Estate


2000-2200

Audit team discuss ion and veri fication on any ou tstanding i ssues


Relevant PIC

Day four: 17th January 2013 (Thursday)

Activi ties /areas to be vis ited

Mahzan

Dr. Rus l i

Najwan

Selva

Auditee

0800-1100

Audit team discussion and verification on any outstanding issues

Guide/PIC

1100-

1400

Discussion and preparation on audit findings

1400-1600

Clos ing Meeting

Management and representative

Travelling Day: 18th January 2013

Activi ties /areas to

be vis ited

Mahzan

Dr. Rus l i

Najwan

Selva

Auditee

Travel ling from Tawau to KL / Fl ight MH 2665 / ETD 1520 Hrs / ETA 1800 Hrs


Attachment 3

4th SURVEILLANCE ASSESSMENT 2013

DETAIL OF NON-CONFORMITY AND CORRECTIVE ACTIONS TAKEN

P & C Indicator

Specification Major/Minor/OFI

Detail Non-conformances Corrective Action Taken Verification by Assessor

Indicator

2.1.1

NCR #: MM 1

Major

Area/Location: Jelata Bumi Estate

The diesel operated Internal

Combustion Engine (Generators , 212kw and 320kw) was not being

in-charge by a First Grade Driver during each shi ft as required under Factories and Machinery

(Person-In-Charge) Regulation 1970. The current Engine Driver, Mr Asan B Samin is a Grade 2

Engine Driver.

To advertise hiring Engine

Driver Grade 1 on JobStreet.com and in the

loca l Borneo newspapers. Expected date to be publ ished 24th Sept on

JobStreet and on the weekend (28th -29th Sept) in the print media .*

*Earl ier corrective action

submitted (dated 27th June 2013) was found inadequate and not

acceptable. Final corrective action submitted on 23rd September with supporting documents were found acceptable

Supporting

document showing advertisement for

Mi l l Engine Driver Grade 1 was found acceptable.

Veri fication on JobStreet webs i te showed i t had been

uploaded, thus OK. Status of NCR is

Closed.

Indicator 4.1.2

NCR #: MM2

Minor

Area/Location: Jelata Bumi Estate

Drinking water sampling was not done in accordance to own SOP, Appendix 7, i .e. the frequency for water sampling and analysis to be carried out on quarterly basis (January, April, July and October).

The records of drinking water analysis at Jelata Bumi showed that i t was last done on 4th May 2011.

A PIC (As lan Ta l ib) from QA had been assigned to ensure water sampling be carried out as per schedule and checklist be mainta ined and

monitored by Executive In- Charge and counter check by Account and Admin Officer to ensure compl iance.

Checkl i s t on parameters to be analyzed and Report on Monitoring and Water Analysis from Health Office,

Dis trict of Kunak (dated 21st January 2013) had been s ighted and found acceptable. Status of NCR is Closed.

Indicator 2.1.1

NCR #: MM3

Major

Area/Location: Binuang Oi l Mi l l

The existing electrical Chargeman, AO, En. Hamdan Sudianto bin Taming does not possess the right category of chargeman certificate, thus not in compliance with Electricity

Supply Act 1990, Regulation 23, Person In-Charge, Competent Control requiring a B4

Chargeman certificate.

To advertise hi ring Mi l l Electrical Chargeman B4 on JobStreet.com and in the loca l Borneo newspapers . Expected date to be published 24th

Sept on JobStreet and on the weekend (28th -29th Sept) in the print media.*

* Earl ier corrective action

submitted (dated 27th June 2013) was found inadequate and not

acceptable. Final corrective action

Supporting document showing advertisement for Mi l l Electrica l Chargeman B4 was found acceptable.

Veri fication on JobStreet webs i te showed i t had been

uploaded, thus OK. Status of NCR is

Closed.


submitted on 23rd September with

supporting documents were found acceptable

Indicator 6.6.1

NCR #: RM1

Major

Area/Location:

Binuang Oi l Mi l l

No documented minutes of meeting between the Binuang

mi l l management and trade unions or workers representatives are available.

Union representatives are

present in the mill. However, they have not had any formal meetings with the mill

management neither have they been appointed as members of

permanent committees in the mi l l. Therefore, there is no formal regular channel of

communication between the union and mill.

Binuang oi l mi l l has appointed En. Datu Mohd

Soffian Utong, ffb checker and En Hj Kambah Sakka, watchmen as a Sabah

Plantation Industry Employees Union (SPIEU)

representative in Binuang oi l mi l l OSH committee from 21 January 2013 to

30 June 2013

Status : accepted

Indicator 6.1.3

NCR #: RM2

Minor

Area/Location:

Jelata Bumi Estate

and Binuang Oi l Mi l l

Jelata Bumi estate and Binuang mi l l did update their Social

Impacts Assessment Action Plans. However, they did not conduct stakeholders’ consultation twice

yearly as required by the company’s own procedure. A timetable with responsibilities for mitigation and monitoring is reviewed and updated as necessary. Also, the company’s “Tatacara Perundingan Menangani Masalah Sos ial” requires the estate and mil l to conduct stakeholders’ consultation once in six months.

Only minutes of one stakeholders meeting was seen at Jelata Bumi

estate and Binuang mill.

Binuang oi l mi l l s takeholder meeting

conducted for every 6 month by financially year bas is. The fi rs t meeting

was conducted on 12 October 2012 and mi l l was planning to held the second meeting on Apri l 2013

Status : accepted

Indicator 2.2.3.1

NCR #: SEL1

Minor

Area/Location: Sunggang Estate

Sungang Estate has Small Holdings and Forest adjacent to i t. No boundary s tones have be

identified in these areas.

Sunggang Estate has managed to identi fy the boundary s tones

between Sunggang Estate and third party (Sunggang Estate / Tanduk Estate). As i t i s the process to identifying the boundary

s tones at a l l es tate parameter is progressing

Picture of boundary s tone s ighted, including with survey

map. Status : accepted


Indicator 4.1.1

NCR #: SEL2

Major

Area/Location:

Sunggang Estate

Pruning- Pruned fronds were not s tacked as required especially in

the terraced areas in the ta ll pa lm fields. There were fronds found in paths and in drains.

Tra ining for harvesters on proper pruning of pa lms

and s tacking of fronds was carried out on 25/1/2013

Attendance l i s t, photographs and

report were s ighted. Status : accepted

Indicator

4.3.3

NCR #: SEL3

Minor

Area/Location

Sunggang Estate

A large hole (2’ X 2’) and a

smaller one were found on a bridge in Field 91C of Sungang Estate. The timber structure that was rotten had collapsed given rise to the holes. There were no markers to indicated the col lapse, thus posing danger to those who use the bridge/road. Road maintenance was not carried in time.

The bridge was completely repaired on 18/1/2103. The broken timbers were replaced and the bridge is passable.

Pictures of the bridge after repairs were s ighted Status : accepted

Indicator 4.4.2

NCR # SEL4

Major


No construction of bunds/weirs/dams across the main rivers or waterways passing through the estate. In the water way, from which water i s drawn for the use at the nursery, a bund had been constructed across the waterway.

Currently l ia ison with respective department i.e Dra inage and Irrigation Department of Tawau is in progress

Letter to DID was sent on 22.1.2013 was s ighted.

Indicator 4.7.1

OFI


Evidence of documented Occupational Safety Health (OSH) plan which is in compliance with OSH Act 1994 and Factory and Machinery Act 1967 (Act139). The floor of the pump house for the Oi l Pa lm nursery was not wiped clean of oil and water. This made the floor s lippery and

posed hazard ri sk to the operator.

Indicator 2.1.1

OFI

Area/Location

Binuang Oi l Mi l l

Evidence on compliance with legal requirements Sabah Labour Ordinance requires that the employment of workers

and s taffs in the estates and mills be covered by wri tten contracts of service. It was found that the

contracts of service for several workers and s taffs in Binuang mill

and Giram mill were not updated and properly maintained. The personal files of the workers and

s taffs concerned either do not have the va lid contracts of

service or do not have them at a l l.


In the interest of estate/mill and the employee as well as for the

purpose of complying with the law, i t is strongly urged that the responsible parties take the

necessary measures to ensure that the contracts of service be updated and properly maintained.

Indicator 6.1.3

OFI

Area/Location:

Al l Es tates and Oi l Mi l l

A timetable with responsibilities for mitigation and monitoring is

reviewed and as necessary The s takeholders’ consultation

exercises conducted by the estate/mill managed to identify i ssues which affect the

s takeholders. However, the estate/mill has not drawn up the necessary action plans to address these issues. In the interest of the s takeholders and the estate/mill,

i t i s strongly recommended that action plans be formulated to address the issues raised during the s takeholders’ consultations and incorporate them into the

exis ting SIA action plans.

Indicator 6.3.1

OFI

Area/Location:

Jelata Bumi and

Binuang Oi l Mi l l

Documentation of the process by which a dispute was resolved and the outcome

The practices among the estates/mills differ with respect

to getting complaints and grievances from their workers and s taffs. Certain estates (eg.

Jelata Bumi) require their workers to make verbal requests

for services while others (eg. Giram) use forms to record the grievances. Others (eg. Tiger)

enter complaints into record books.

For the purpose of ensuring uni formity of practices as well as

to better facilitate monitoring activi ties, i t is recommended that the practices be standardized for

a l l the estates and mills. This recommendation is also in l ine with the previous one made


during the third surveillance audit.

Indicator

6.6.1

OFI

Area/Location:

Al l estates and Oi l Mi l l

Documented minutes of meeting

with main trade unions or workers representatives

Currently, a ll estates and mills do not have formal regular meetings with union leaders. This practice i s quite acceptable because there i s no full committee membership of union leaders in the estate/mill.

However, the union leaders need to convey or voice the members’ concerns to the estate/mill management. Therefore, it is recommended that the union representatives at each estate/mill be appointed as

members of permanent estate/mill committee, for example, the safety committee.

Indicator 4.7.1

OFI

Area/Location:

Jelata Bumi Estate

and Binuang Oil Mi l l

Jelata Bumi Estate

Binuang Oil Mill

Evidence of documented Occupational Safety Health (OSH)

plan which is in compliance with Occupational Safety and Health Act 1994 and Factories and

Machinery Act 1997.

1. The (a) content of he first a id box and (b) records of casualty and treatment

given by Fi rst-Aiders at the office could be improved to be in compliance with the

Guideline on First Aid in the Workplace (2nd Edition) as

published by DOSH. 2. Some of the new houses at

the l ine site were not provided with fire extinguishers.

Emergency preparedness and response.

The post mortem report could be improved to detail out the chronological event including when siren was activated, time of arriva l of first person and last person at assembly point, time finishing head count, time

activating firefighting team or


fi rs t a iders swing into action, orderliness of evacuation, etc.

Indicator

5.1.2 OFI

Area/Location: Binuang Estate

Environmental improvement plan to mitigate the negative impacts

and promote the positive ones, is developed, implemented and

monitored. Si te review at Binuang Estate

found the diesel spillage at diesel pump area.

Indicator 5.3.2

OFI

Area/Location: Binuang and

Sunggang Estate

Having identi fied wastes and pol lutants, an operational plan

should be developed and implemented, to avoid or reduce

pol lution. Si te review at Binuang Estate and

Sunggang Estate found the solid waste (plastic bottle, boxes, plastic basin) were mixed up in

the landfill

RSPO Supply Chain

Standard, November

2011

Specification Major/Minor/OFI

Detail Non-conformances Corrective Action Taken Verification by Assessor

D.1.1 (a) Major NCR II 1/2013

Binuang POM’s SOP does not

have complete written procedures and work instructions to ensure the

implementation of all the elements as specified in these requirements i.e. on (1) receiving and processing of

certified FFBs (2) sales and goods out (dispatch of certified products) (3) processing (clear procedures

on segregation of certified materials including measures to avoid contamination.

Binuang POM had revised the SOP to include the

necessary procedures related to activi ties (1),

(2) and (3).

A copy of the revised SOP dated March

2013 was submitted on 3 March 2013.

The auditor had reviewed, accepted and veri fied the

revised SOP. This major NCR was therefore closed out.

D.6.1 Major

NCR II 2/2013 It was found out that not all

the critical staff has been provided the training as required to implement the requirements of the supply

chain certification system.

A tra ining was held on 16

February 2013 which was attended by the key support personnel .

Attendance record

on the training was summited on 17 May 2013. The auditor had

reviewed, accepted and verified the attendance

record. This major


NCR was therefore closed out.


Attachment 4

VERIFICATION ON PREVIOUS 3rd SURVEILLANE AUDIT (2011) NON-CONFORMITY REPORTS FOR SOU 28, SOU 29 & SOU 30

P & C Indicator

Specification Major/Minor

Detail Non-conformances

Corrective Action Taken

Verification by Assessor

Indicator 2.1.1

NCR #:

MM 01A

Major No on-site competent Steam Engineer Grade 1

in-charge of Steam Boiler, Registration SB PMD 10604 (heating

surface area is 1100m2) when it is in operation. The Mill Manager and his Assistant are Grade 2

Steam Engineer in-charge of boiler PMD 10604.

Giram Oil Mill has planned to send its Mill

Manager to sit for First Grade Steam Certificate in June 2012.

Corrective actions taken found to be adequate to

close out the NCR. The current Mill Manager

is a Grade 1 Steam Engineer.

Indicator 2.1.1

NCR #:

MM 01B

Major At Imam Estate, no on-site competent Engine

Driver Grade 1 or Grade 2 in-charge of generator sets when they are in

operation. The current generator sets (85kw and 45kw) were operated by non-

competent person engine driver.

Imam Estate has planned to send its

person in-charge to sit the Grade II exam for engine driver.

Application has been sent to DOSH Sabah on 31/12/2011.

The Imam estate has switched source of

electricity supply by connecting to the Sabah Electricity Grid using the

SESB (Sabah Electricity Sdn Bhd) power. Verification at site found

the generator sets was not running Electricity bil l latest #

700001464587 was on 3 December 12 was verified

Wiring payment for SESB # for Kg Indah RM45k, verified by engineer on 5 Nov 2012 also has been

evident. Therefore the status of NCR was closed


Indicator 4.8.1

NCR #:

MM 02

Major Re-assessment following training is not done by management, for example, HIRADC

training (for Mill Manager), LOTO system, Use of Standard

Exposure of Chemical Hazardous to Health 2000, etc. Ear Plug was not worn at

boiler area where Signage was clearly displayed requiring use

of PPE.

Giram Oil Mill will continuously conduct training on safety and importance of PPE.

Warning letter would be issued to those who disobey the

requirements.

Corrective actions taken found to be adequate to close out the NCR.

Simple assessment such as field work observations are means of assessment.

Appropriate PPE including Ear Plug were seen worn in high noise area.

Indicator

2.1.1

NCR #:

VS 01

Major Training on scheduled

waste as per requirement of EQA Regulation has yet to be

conducted. There has been no training given for person in-charge of scheduled wastes

handling at Jelata Bumi Estate, Merotai Palm Oil Mill and Imam Estate.

Jelata Bumi has come

up with training plan to train its person in-charge for scheduled

waste handling. SOU 30 has conducted the training on scheduled waste

handling on 20/1/2012 and records were sent to the assessor.

During this 4th surveillance

audit, the Binuang estate has taken proactive action by sending the person in-

charge, Mr Firdaus (QA), Mr. Valentino (formen), Ms Muliati (store CC) & Mr. Arthur (HA) to the

scheduled waste training on 20th December 2012.

Therefore the Major NCR has been closed

Indicator 6.1.2

NCR #: ZE 02

Minor The current format and contents of the SIA for SOU 29 (including Giram

Oil Mill) and the former SOU 30a (Mostyn Estate) are generally adequate. However the

SIA has not been revised to incorporate potential impacts of estate activities on external

local communities as recommended in the last surveillance report.

The original assessment had been done without the participation of local communities in the

vicinity of Mostyn Estate and Giram POM, neither has any effort been

made to do so since then.

SDPSB has planned to revise its SIA to include the participation from

stakeholders such as Kg. Seri Bahagia, Kg. Kadazan, Kg. Cenderawasih and Kg.

Wawasan.

In all the estates and mills visited, minutes were seen on the meetings between

the estates/mills and various stakeholders. In the case of Giram mill, the meeting was held at KGTI

on 20 July 2012. However, not all representatives from the kampongs attended the meeting.

The actions taken found to be adequate to close out

the NCR.


Indicator 6.3.1

NCR #:

ZE 01

Major Documentation of the process for dealing with complaints and grievances is not

available in Mostyn Estate and Giram Oil Mill.

Grievances were formally recorded in “Minutes of Stakeholder”. Now the

document is renamed as “Grievance Book” to records any form of

complaints.

Record books with updated entries on external and internal communications were

seen at all estates and mills. So too were procedures for handling

disputes. The actions taken found to be adequate to close out

the NCR.