Verification of Legal Compliance
RA-Cert Division Headquarters
65 Millet St. Suite 201
Richmond, VT 05477 USA
Tel: 802-434-5491
Fax: 802-434-3116
www.rainforest-alliance.org
Surveillance Audit 2015
Report for:
CV. Kharisma Duta Utama
In
East Java, Indonesia
Audit Managed by:
Asia-Pacific Regional Office
Jalan Tantular Barat No. 88, Renon
Denpasar – Bali Indonesia 80114
Tel: +62361-4723499
Fax: +62361-4723498
Contact Person: Lely Puspitasari
Email: lpuspitasari@ra.org
Report Version:
Report Finalized:
Public Summary
10 November 2015
Audit Date:
Audit Team:
03-04 March 2015
Arie Soetjiadi
Verification code:
Verification Date:
RA-VLC-006775
30 January 2014
Report based on Standard:
Rainforest Alliance Standard for Processing and Trade Version: VER-23
15 May 2013
TABLE OF CONTENTS
1
INTRODUCTION ..................................................................................................................... 3
1.1
Background ........................................................................................................................... 3
1.2
Dispute resolution .................................................................................................................. 3
2
VERIFICATION CONCLUSIONS............................................................................................. 4
2.1
Auditor Recommendation ...................................................................................................... 4
2.2
New Nonconformity Reports (NCRs) as a Result of This Audit .............................................. 4
2.3
Observations ....................................................................................................................... 12
2.4
Actions Taken by Organization Prior to Report Finalization ................................................. 12
3
AUDIT PROCESS.................................................................................................................. 13
3.1
Description of Audit Process ................................................................................................ 13
3.2
Audit Team .......................................................................................................................... 13
3.3
Audit Schedule .................................................................................................................... 13
3.4
Sampling* ............................................................................................................................ 14
3.5
Notes for Next Audit ............................................................................................................ 14
4
ORGANIZATION INFORMATION ......................................................................................... 14
4.1
Primary Contact for Organization Seeking Verification ........................................................ 14
4.2
Billing Contact ..................................................................................................................... 14
4.3
Location Where Relevant Records will be kept .................................................................... 14
4.4
On-Line Public Information .................................................................................................. 14
5
VERIFICATION SCOPE ........................................................................................................ 16
5.1
Scope Description ............................................................................................................... 16
5.2
Site Details: Processing, Trade and Wholesalers ................................................................ 16
5.3
Site Details: Forest Management Enterprises (FMEs) ......................................................... 16
5.4
Product Group Details ......................................................................................................... 16
5.5
Information on Suppliers NOT Included in the Scope of Verification .................................... 17
5.6
Flow Chart of Supply Chain Included in the Scope .............................................................. 17
5.7
Organization Background (Optional) .................................................................................... 18
APPENDIX I: AUDIT NON-CONFORMANCE FINDINGS ................................................................. 19
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VER-08 15 May 2013
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1
INTRODUCTION
The purpose of this report is to document conformance with the requirements of the Rainforest Alliance
Generic Legality Standard for Processing and Trade VER-23, Version dated 15 May 2013
, of CV.
Kharisma Duta Utama (KDU), hereafter referred to as “Organization”. The report presents the findings
of Rainforest Alliance auditors who have evaluated Organization systems and performance against the
applicable standard(s). Section 2 below provides the audit conclusions and any necessary follow-up
actions by the Organization through Corrective Action Requests (NCRs). Section 3 describes the audit
process and Section 5 defines the scope of the assessment (including organization and nonorganization suppliers of raw or processed material).
Additional comments about the audit:
1.1
Background
The Rainforest Alliance’s SmartWood program was founded in 1989 to verify responsible forestry
practices and now focuses on providing a variety of certification and verification auditing services.
The Rainforest Alliance legality verification services are applicable to single Forest Management
Enterprises (FMEs), wood processing and trading companies as well as complete or parts of supply
chains involving both FMEs and processing industry.
Verification of Legal Origin audits evaluate that the forest source of the wood has obtained the license
to harvest, acquired planning approvals and permits, paid the required taxes, royalties and/or harvesting
fees, complies with transport and trade regulations and maintained a chain of custody system.
Verified Legal Compliance audits evaluates that the forest source is in conformance with the VLC
standard and in compliance with applicable laws relating to environmental protection, wildlife, water and
soil conservation, harvesting rules and practices, worker health and safety, and fairness to communities.
VLC thus review compliance to a broad range of legal requirements pertaining to forestry in the region
in question.
For wood processing industry and trade organizations the verification include verification that applicable
trade, transport and registration requirements are met, including taxation and royalty payments as well
as verifying that a chain of custody system is maintained from a verified supply of wood (either VLO or
VLC as defined above). For multi-site verification of whole or parts of supply chains all sites will be
required to maintain a CoC system to track and document supply of wood from the forest source through
all downstream entities in a defined supply chain.
1.2
Dispute resolution
If Rainforest Alliance clients encounter organizations or individuals having concerns or comments about
Rainforest Alliance and our services, these parties are strongly encouraged to contact Rainforest
Alliance Headquarters directly. Formal complaints or concerns should be sent in writing.
Rainforest Alliance
VER-08 15 May 2013
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2
VERIFICATION CONCLUSIONS
The following section contains the conclusions of the audit as well as a list of applicable Corrective
Action Requests issued during the audit.
The NCRs are issued to each individual site included in the scope of the verification. In the below the
relevant NCRs are listed for each site included in the scope.
2.1
Auditor Recommendation
Based on Organization’s conformance with the Rainforest Alliance/ Rainforest
Alliance legality verification requirements, the auditor makes the following
recommendation:
Verification approved:
Upon acceptance of NCR(s) issued below
Verification not approved:
Timeline for the next audit:
3 months
Additional comments:
5 Major NCRs have been identified during this audit, including one
upgraded minor NCR from 2014. However, NCR 01/14 was closed
after the organization submitted additional evidence in form of
updated sales invoices.
Note: NCRs describe required actions or improvements that address
ORGANIZATION non-conformances identified during audits. NCRs include
defined timelines for completion. Major NCRs issued during assessments/
reassessments shall be closed prior to issuance of verification statement.
Major NCRs issued during audits shall be closed within timeline or result
in suspension.
2.2
New Nonconformity Reports (NCRs) as a Result of This Audit
NCR#:
01/15
NCR issued for:
NC Classification:
Report Section:
Appendix II, 1.6
Major X
Minor
CV. KDU
Standard & Requirement:
Rainforest Alliance Generic Legality Standard for Processing and
Trade VER-23 dated version 15 May 2013, Criterion 1.6:
Organization shall adhere to the terms of wood and wood
products sales agreements and/or contracts
Description of Nonconformance and Related Evidence:
Auditor found that CV. KDU also issues sales invoice directly to customer, but CV. KDU itself does
not have any information about the term and condition of the sales agreement, except for certain
details such as shape and quantity, since sales agreement/purchase order from the buyer is kept by
ETH Enterprise Pte Ltd, a partner company of KDU for sales and marketing.
Rainforest Alliance
VER-08 15 May 2013
Page 4
CV. KDU does not keep any records of sales agreements or Purchase Order on its own, thus
conformance to this criterion cannot be demonstrated.
NCR 02/12 was raised in Assessment 2012 against SmartWood Standard for verification of Legal
Compliance for Indonesia Version: 09 February 2010, Criterion 4.6, which handles the same issue.
Corrective Action Request: Organization shall implement corrective actions to demonstrate
conformance with the requirement(s) referenced above.
Note: Effective corrective actions focus on addressing the specific
occurrence described in evidence above, as well as the root cause to
eliminate and prevent recurrence of the nonconformance.
Timeline for
Within 3 months after the date of report finalization (10 February
Conformance:
2016)
Evidence Provided by
PENDING
Organization:
Findings for Evaluation of
Evidence:
NCR Status:
PENDING
OPEN
Comments (optional):
NCR#:
02/15
NCR issued for:
NC Classification:
Report Section:
Appendix II, 2.5
Standard & Requirement:
Rainforest Alliance Generic Legality Standard for Processing and
Trade VER-23 dated version 15 May 2013, Criterion 2.5:
Organization shall develop training requirements and implement
training as follows:
a. All applicable staff and workers shall be trained according to
the CoC procedures to a degree relevant to the scale and complexity
of the system and position; and,
b. Records shall be kept to demonstrate training has taken place.
Major
Minor X
CV. KDU
Description of Nonconformance and Related Evidence:
The organization has records of training presented to the auditor, however the records of training
show that training were given only to management staff.
No record of training of Tally workers, it was also verified that tally workers never received any formal
trainings, but rather informally through short briefing at beginning. During interview with tally workers
and management staff, it was found that mixing between VLC material and unverified material are
allowed and practiced if the quantity mixed is insignificant. It is mentioned that non-VLC material can
be mixed with VLC material and labeled as VLC if the quantity is very low, and vice versa.
The issue of mixing caused by the lack of training is raised in NCR 07/15 against Criterion 3.5
Corrective Action Request: Organization shall implement corrective actions to demonstrate
conformance with the requirement(s) referenced above.
Note: Effective corrective actions focus on addressing the specific
occurrence described in evidence above, as well as the root cause to
eliminate and prevent recurrence of the nonconformance.
Timeline for
Until the next surveillance audit
Conformance:
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VER-08 15 May 2013
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Evidence Provided by
Organization:
-
Training records, dated on 12-13/06/2015, 12/08/2015 and
19/09/2015
Policy letter for appointing a VLC tally coordinator (No:
01/SK7KDU/VIII/2015)
Findings for Evaluation of
Evidence:
Before the finalization of the report, the FME submitted the evidences
as listed above, including training records and policy letter. The
records are signed by each training participants (tally workers) from
various sections (moulding, packing, ripsaw, crosscut, “optik”)
While the records now shows that trainings activities for tally workers
have been conducted 3 times in the past months, this has to be
verified later through interview with the relevant workers.
NCR Status:
OPEN
Comments (optional):
NCR#:
03/15
NCR issued for:
Report Section:
NC Classification:
Standard & Requirement:
Rainforest Alliance Generic Legality Standard for Processing and
Trade VER-23 dated version 15 May 2013, Criterion 2.8 b:
Organization shall develop and maintain records to document
quantities of verified materials for the following:
a. Purchased as inputs/raw material;
b. Used in production, including conversion factors;
c. Inputs and final products in stock;
Major
Minor X
CV. KDU
Appendix II, 2.8
d. Final products sold with and without a claim.
Description of Nonconformance and Related Evidence:
In the monthly summary, the organization calculates the rendement (yield) using input and output.
However, this rendement does not reflect the conversion factor used in the production for each
product group, since the numbers (in percent) strongly fluctuates from month to month despite
producing the same products using the same raw material. The organization has no data of
conversion factor used in production for each product group.
Corrective Action Request:
Timeline for
Conformance:
Evidence Provided by
Organization:
Organization shall implement corrective actions to demonstrate
conformance with the requirement(s) referenced above.
Note: Effective corrective actions focus on addressing the specific
occurrence described in evidence above, as well as the root cause to
eliminate and prevent recurrence of the nonconformance.
Until the next surveillance audit
PENDING
Findings for Evaluation of
Evidence:
PENDING
NCR Status:
OPEN
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Comments (optional):
NCR#:
04/15
NCR issued for:
NC Classification:
Report Section:
Appendix II, 3.1
Standard & Requirement:
Rainforest Alliance Generic Legality Standard for Processing and
Trade VER-23 dated version 15 May 2013, Criterion 3.1:
Major X
Minor
CV. KDU
Organization shall keep verified material physically separate as
secure units during all stages of handling, i.e., receiving,
processing, storing, and shipping.
Description of Nonconformance and Related Evidence:
The organization distinguishes VLC material and non-VLC only by using colored note and unique
code. Pallets containing VLC material are given (light) green colored tag with numbered code P, F,
M, R, CC, PM, KU, KR, and OV, while pallets with non-VLC material are given white/red tag
without any letter and number code. However the pallets were piled together at the same spot
without clear and secure physical separation.
It was found from interviews that accidental removal of tags during transport and production
process is quite often. Auditor also observed some pallets in the storage and
processing/production areas without any tag attached.
Mixing of VLC and non-VLC material is raised in NCR 07/15 against criterion 3.5.
Corrective Action Request:
Timeline for
Conformance:
Evidence Provided by
Organization:
Organization shall implement corrective actions to demonstrate
conformance with the requirement(s) referenced above.
Note: Effective corrective actions focus on addressing the specific
occurrence described in evidence above, as well as the root cause to
eliminate and prevent recurrence of the nonconformance.
Within 1 months after the date of report finalization (10 December
2015)
PENDING
Findings for Evaluation of
Evidence:
PENDING
NCR Status:
OPEN
Comments (optional):
NCR#:
05/15
NCR issued for:
NC Classification:
Report Section:
Appendix II, 3.2
Standard & Requirement:
Rainforest Alliance Generic Legality Standard for Processing and
Trade VER-23 dated version 15 May 2013, Criterion 3.2:
All material that cannot be identified as verified shall be kept
physically separate from verified material. Note: material that is
pending evidence of its legal status shall be kept separate until such
time that adequate documentation is obtained.
Rainforest Alliance
VER-08 15 May 2013
Major X
Minor
CV. KDU
Page 7
Description of Nonconformance and Related Evidence:
SOP Manual for CoC system prescribes that unidentified materials shall be claimed as non-VLC,
unless it fulfills all following conditions:
1.
There shall be a painted/written marking with code on the material.
2.
There shall be a tally worker(s) who can testify and confirm about the status of the
particular material. The person shall be able to identify the code and origin of the material.
3.
Validation shall be conducted by administration division if the requirements in point 1 and
2 have been fulfilled. There will be an additional copy issued as proof of this validation.
Auditor however observed in the storage and processing sites that there is no clear physical
separation of this unidentified material, as all pallets with different status including material with
pending status (no tag attached) are found to be piled together.
Mixing of VLC and non-VLC material is raised in NCR 07/15 against criterion 3.5.
Corrective Action Request: Organization shall implement corrective actions to demonstrate
conformance with the requirement(s) referenced above.
Note: Effective corrective actions focus on addressing the specific
occurrence described in evidence above, as well as the root cause to
eliminate and prevent recurrence of the nonconformance.
Timeline for
Within 1 months after the date of report finalization (10 December
Conformance:
2015)
Evidence Provided by
PENDING
Organization:
Findings for Evaluation of
Evidence:
PENDING
NCR Status:
OPEN
Comments (optional):
NCR#:
06/15
NCR issued for:
NC Classification:
Report Section:
Appendix II, 3.4
Standard & Requirement:
Rainforest Alliance Generic Legality Standard for Processing and
Trade VER-23 dated version 15 May 2013, Criterion 3.4:
Organization shall develop and implement procedures to ensure
that other verification
bodies’ claims, marks or codes are distinguishable from that used to
identify Rainforest Alliance verified material.
Major
Minor X
CV. KDU
Description of Nonconformance and Related Evidence:
The organization uses green colored tags with unique letters and number code to distinguish
material with VLC claim from non-VLC material. Non-VLC material is given white or red tags.
While the auditor observes that this mechanism has been implemented in the field, no written SOP
states that VLC and non-VLC material are to be distinguished by these 2 different colored tags.
Corrective Action Request: Organization shall implement corrective actions to demonstrate
conformance with the requirement(s) referenced above.
Note: Effective corrective actions focus on addressing the specific
occurrence described in evidence above, as well as the root cause to
eliminate and prevent recurrence of the nonconformance.
Rainforest Alliance
VER-08 15 May 2013
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Timeline for
Conformance:
Evidence Provided by
Organization:
Until the next surveillance audit
Findings for Evaluation of
Evidence:
PENDING
NCR Status:
OPEN
PENDING
Comments (optional):
NCR#:
07/15
NCR issued for:
NC Classification:
Report Section:
Appendix II, 3.5
Major X
Minor
CV. KDU
Standard & Requirement:
Rainforest Alliance Generic Legality Standard for Processing and
Trade VER-23 dated version 15 May 2013, Criterion 3.5:
Organization shall not mix verified and non-verified material
though processing; only products containing 100% verified material
(or material verified or certified against an equivalent or higher
level standard approved by Rainforest Alliance) are eligible for
Rainforest Alliance Verified™ claims.
Description of Nonconformance and Related Evidence:
During interview with tally workers and management staff, it was revealed that mixing between VLC
material and unverified material are allowed and practiced if the quantity mixed is insignificant.
Workers mix VLC material with non-VLC material or unidentified material and labeled as VLC if the
quantity of the non-VLC/unidentified material is lower than the VLC material, or vice versa. This
practice was consistently confirmed by all interviewed staff.
Auditors also found that pallets with material of different status (VLC, non-VLC, unidentified/without
tags) are piled together in the processing and storage area.
Corrective Action Request: Organization shall implement corrective actions to demonstrate
conformance with the requirement(s) referenced above.
Note: Effective corrective actions focus on addressing the specific
occurrence described in evidence above, as well as the root cause to
eliminate and prevent recurrence of the nonconformance.
Timeline for
Within 1 months after the date of report finalization (10 December
Conformance:
2015)
Evidence Provided by
PENDING
Organization:
Findings for Evaluation of
Evidence:
PENDING
NCR Status:
OPEN
Comments (optional):
NCR#:
08/15
NCR issued for:
NC Classification:
Report Section:
Appendix II, 4.3
Rainforest Alliance
VER-08 15 May 2013
Major
Minor X
CV. KDU
Page 9
Standard & Requirement:
Rainforest Alliance Generic Legality Standard for Processing and
Trade VER-23 dated version 15 May 2013, Criterion 4.3 a., b.:
Organization shall ensure that supplier invoices and delivery
documents include the
following:
a. The quantity (volume, weight or number of units) and species
(common and scientific names) for each product;
b. The Rainforest Alliance verification code (RA-VLO-XXXXXX or
RA-VLC-XXXXXX) for RA verified materials
c. The applicable certification code and claim for materials certified
through other approved certification schemes.
d. A clear indication of which products are verified or certified
when multiple items are listed on a document (e.g., indication of “RA
VLO” or “RA VLC” per line item).
Description of Nonconformance and Related Evidence:
Supplier invoices and delivery documents (from PT. Wapoga Mutiara Industries/WMI) only contain
VLC statement without the complete verification code. Furthermore, the scientific name of Merbau
(Intsia sp.) is not included in any documents.
Corrective Action Request: Organization shall implement corrective actions to demonstrate
conformance with the requirement(s) referenced above.
Note: Effective corrective actions focus on addressing the specific
occurrence described in evidence above, as well as the root cause to
eliminate and prevent recurrence of the nonconformance.
Timeline for
Until the next surveillance audit
Conformance:
Evidence Provided by
PENDING
Organization:
Findings for Evaluation of
Evidence:
PENDING
NCR Status:
OPEN
Comments (optional):
[MINOR] NCR : 01/14
NCR issued for:
NC Classification:
Report Section:
Appendix II, 6.1
Rainforest Alliance
VER-08 15 May 2013
Major X
Minor
CV Kharisma Duta Utama
Page 10
Standard & Requirement:
Rainforest Alliance Generic Legality Standard for Processing and
Trade VER-23 dated version 15 May 2013, Criterion 6.1
Organization shall include claim information on sales invoices and shipping
documents, including the following:
a. The quantity/volume and species for each product;
b. The Rainforest Alliance verification code (RA-VLO-XXXXXX or RA-VLCXXXXXX).
c. A clear indication of which products are verified when multiple items are
stated on a document (e.g., indication of “RA VLO” or “RA VLC” per line
item)
Description of Nonconformance and Related Evidence:
Finding in Change of Scope Audit 2014:
Based on CVA in January 2014, the organization has been granted VLC certificate. During change
of scope audit in April 2014, the organization have not produced verified products as they have not
received verified sawn timber material from WMI. However, auditor found that some of export
documents enquired by auditor were stamped by RA verification code. This was not an attempt to
represent materials as verified, and was simply a misunderstanding of an employee who stamped
documents for auditor review. Therefore and NCR is issued.
Finding in Surveillance audit 2015:
Auditor found sales invoice or any other attached shipping documents (Packing List, Bill of Lading,
Nota Pelayanan Eskpor/NPE, Pemberitahuan Ekspor Barang/PEB) with VLC claim do not contain
RA VLC Code (RA-VLC-006775). Species is incorrectly listed on the Packing List as Merbau decking
profile.
Though the NCR 01/14 raised in Change of Scope audit 2014 dealt with a different issue, nonconformance found during surveillance audit 2015 is evaluated against the same Criterion 6.1. Thus
this NCR cannot be closed and upgraded into a MAJOR.
Corrective Action Request: Organization shall implement corrective actions to demonstrate
conformance with the requirement(s) referenced above.
Note: Effective corrective actions focus on addressing the specific
occurrence described in evidence above, as well as the root cause to
eliminate and prevent recurrence of the nonconformance.
Timeline for
Within 3 months after the date of report finalization
Conformance:
Evidence Provided by
- Commercial invoice No. 292/INV-EXP/KDU/VII/2015
Organization:
Packing list No. 292/PL-EXP/KDU/VII/2015
- Commercial invoice No. 353/INV-EXP/KDU/VIII/2015
Packing list No. 353/PL-EXP/KDU/VIII/2015
Findings for Evaluation of
Evidence:
NCR Status:
Comments (optional):
Rainforest Alliance
VER-08 15 May 2013
Before the finalization of the report, the organization submitted 2
samples of sales invoice to 2 different oversea customers, in which
the species name of the plant material is listed as Intsia bijuga. The
VLC claim with RA VLC Code (RA-VLC-006775) is stamped on the
attached packing list.
This NCR is therefore closed.
CLOSED
Page 11
2.3
Observations
Note: Observations are issued for the early stages of a problem which does
not of itself constitute a non-conformance, but which the auditor considers may
lead to a future non-conformance if not addressed by the organization;
observations may lead to direct non-conformances if not addressed.
OBS 01/15
Reference Standard & Requirement: Rainforest Alliance Generic Legality
Standard for Processing and Trade VER-23 dated version 15 May 2013,
Criterion 2.2:
Organization shall develop and maintain an up-to-date documented control
system, procedures and/or work instructions to ensure implementation of
all applicable CoC standard requirements.
OBS issued for:
PT. AKN
Description of findings leading to observation:
Flow chart(s) for production of finger joint and finger joint laminating in PT. AKN (PT Artha Karya Nusa)
are not available in The SOP manual for CoC.
Observation:
The organization should develop flow chart(s) for production of finger joint and finger joint laminating in
PT. AKN.
OBS 02/15
Reference Standard & Requirement: Rainforest Alliance Generic Legality
Standard for Processing and Trade VER-23 dated version 15 May 2013,
Criterion 2.5:
Organization shall develop training requirements and implement training as
follows:
a. All applicable staff and workers shall be trained according to the CoC
procedures to a degree relevant to the scale and complexity of the system and
position; and,
b. Records shall be kept to demonstrate training has taken place.
OBS issued for:
PT. AKN
Description of findings leading to observation:
PT. AKN works under full supervision of CV. KDU and CV. KDU has the responsibility to develop
training requirements and provide training for PT. AKN’s staff. Lack of training is identified in CV. KDU
and addressed in NCR 02/15
Since PT. AKN currently does not handle any VLC material, the company currently runs the normal
CoC procedure without the need for segregation, thus this issue is not raised as NCR.
Observation:
The organization should ensure that training needs are fulfilled before PT. AKN starts handling VLC
materials.
2.4
Actions Taken by Organization Prior to Report Finalization
FME sent additional evidences to RA on 9 October 2015 addressing some potential major NCR.
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VER-08 15 May 2013
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3
3.1
AUDIT PROCESS
Description of Audit Process
The opening meeting started around 13:00 on day 1 (03 March 2015) at KDU office, attended by
RA auditor Mr. Arie Soetjiadi, and Organization representative, Mr. Samuel Vinson (general
manager), Mr. Eric (finance/accounting), Ms. Nur Asiyah (raw material/inventory), Ms. Rujila
(admin), Mr. Doni Winata (IT analyst). RA auditor Mr. Arie Soetjiadi presented a brief presentation
regarding the audit, including self-introduction and overview of the audit scope. Subsequently, Mr.
Vinson provided brief information regarding the company’s business nature and explained about
the overall process of production for both KDU and AKN.
After the opening meeting, RA auditor spent about 2 hours to obtain and review documents while
asking for some clarifications from Mr. Vinson. The auditor went to KDU processing facility at
around 16:00 to make direct field observation and conducted interviews with workers.
On the next day (04 March 2015), RA auditor visited AKN office and processing facility and
conducted interview with workers and office staff. After lunch, RA auditor went back to KDU office
and conducted some follow up interviews with workers at KDU facility, including final document
review.
The closing meeting started at 16:00 with RA auditor presenting the preliminary findings and
ended at 17.00.
3.2
Audit Team
Auditor(s)
Qualifications, Affiliations
Arie Soetjiadi
3.3
Arie Soetjiadi has a master degree in Biology from University of
Hohenheim in Germany with Botany and Landscape Ecology as
Major. Between 2009 and 2012, he worked as GIZ/CIM Returning
Expert for conservation of natural resources in the environmental
agency in Balikpapan-East Kalimantan. Arie joined Rainforest
Alliance in 2014 as Forest Management and Verification Services
Coordinator and is responsible for managing FM and Legality
related engagements in South East Asia and South Asia. He also
completed NEPCon FSC Lead Auditor Training in 2015 and has
been taking part in at least 9 full assessments and audits of Forest
Management and Legality verification in Southeast Asia.
Audit Schedule
Date(s)
03 March 2015
Site(s)
KDU
-
04 March 2015
AKN, KDU
-
Rainforest Alliance
VER-08 15 May 2013
Main Activities
Opening meeting
Document review
Interview with management staff and
workers
Site visit to KDU office, storage
facilities, production site.
Document review
Interview with management staff and
workers
Site visit to AKN office, storage facility
and production site.
Page 13
3.4
Site visit to KDU storage facilities,
production site, packaging site.
Closing meeting
Sampling*
Sub-set
number
Sub-set type
(e.g. FME, processing)
# of sites
Minimum
sampling
number
Risk Class*
# audited
1
Processing/Trader
1
Low Risk
1
1
2
Processing
1
Low Risk
1
1
*Refer to the Appendix for Risk Assessment
Describe how the sample was chosen:
All sites included in the scope were visited and audited.
3.5
4
4.1
Notes for Next Audit
ORGANIZATION INFORMATION
Primary Contact for Organization Seeking Verification
Primary Contact, Position:
Address:
Tel/Fax/Email:
4.2
Samuel Vinson, Project Manager
Jl. Mayjend Sungkono No. 53, Prambangan, Kebomas
Tel: 031 3972903, Fax: 031 3972905, Email: samuel@kdu.co.id /
tjingsheng@kdu.co.id
Billing Contact
Same as shown for primary contact
4.3
Location Where Relevant Records will be kept
Same as shown for primary contact
4.4
On-Line Public Information
Note: upon Verification, the Rainforest Alliance website posts and maintains
details for organizations with the information in the table below at
http://www.rainforest-alliance.org
Field
Contact, Title:
(Sales & Marketing)
Rainforest Alliance
VER-08 15 May 2013
Text
Samuel Vinson
Has this Information
Changed?
Yes
No
Page 14
Address:
Tel/Fax/Email/Website:
Rainforest Alliance
VER-08 15 May 2013
Mayjend Sungkono No. 53,
Prambanan, Kebomas, Gresik,
Indonesia
Tel : +62. 31. 3987886
Fax : + 62. 31. 3987887
Email : sammy_oc@yahoo.com
Yes
No
Yes
No
Page 15
5
VERIFICATION SCOPE
5.1
Scope Description
Scope Item
Check all that apply to the Verification Scope
Change in
Scope
(N/A for
Assessments)
Verification Type:
Single
Multi-site
Primary Activity of the
Verification Statement
Holder (VSH):
Secondary Manufacturer
VSH Legal Unit:
Business Venture (CV), and Limited Company (PT)
Jurisdiction:
East Java, Indonesia
Number of entities
2
 FME
0
 Manufacturing/trading
entities
2
Comments:
5.2
Site Details: Processing, Trade and Wholesalers
Site
CV. Kharisma Duta
Utama
PT Artha Karya Nusa
5.3
Contact (Responsible person,
Address,Tel, Fax, Email)
Type of Operation
Mayjend Sungkono No. 53, Prambanan,
Kebomas, Gresik, Indonesia
e-mail :
KHARISMADUTAUTAMA@yahoo.com
Jl. Veteran Segoromadu No. 10, Kebomas,
Gresik, Indonesia.
Manufacturing facilities
and trading
Manufacturing facilities.
Site Details: Forest Management Enterprises (FMEs)
N/A: No FMEs are included in the scope
5.4
Product Group Details
Site (name and location)
Inputs to Product
Groups (species)
CV Kharisma Duta Utama, Jl. Mayjend Merbau (Intsia spp.)
Sungkono No. 53, Prambanan,
Kebomas,
Gresik, Indonesia
e-mail :
KHARISMADUTAUTAMA@yahoo.com
PT Artha Karya Nusa, Jl. Veteran
Merbau (Intsia spp.)
Rainforest Alliance
VER-08 15 May 2013
Product
Groups
Product Type
(FSC-STD-40004a)
Solid moulding
Finger Joint,
Finger Joint
Laminating
W11.8
W9.1
Finger Joint,
Finger Joint
W9.1
Page 16
Segoromadu No. 10, Kebomas,
Gresik,
Indonesia.
5.5
Laminating
Information on Suppliers NOT Included in the Scope of Verification
N/A: there are no verified suppliers.
Name and Location
PT. Wapoga Mutiara
Industries (WMI)
PT. Artha Karya Nusa
(AKN), remaining raw
materials from old
warehouse
5.6
Operation Type
Primary
Manufacturing
Secondary
Manufacturing
Supply Type
(Type and Species)
Sawntimber –
Merbau (Intsia spp.)
Verification/Certification
Code
RA-VLC-006688
Sawntimber – (old
stock)
Merbau (Intsia spp.)
Non-verified materials
Flow Chart of Supply Chain Included in the Scope
(Required for multi-site verification with more than 2 entities included in the scope).
Rainforest Alliance
VER-08 15 May 2013
Page 17
Both CV. KDU and AKN follows the same flow chart. Flow charts for production of finger joint
and finger joint laminating in PT. AKN are not available at this point (OBS 01/15).
5.7
Organization Background (Optional)
CV. KDU is a secondary manufacturer who produces solid moulding exclusively from Merbau
(Intsia spp.) and sources 100% of the VLC materials from PT. WMI (RA-VLC-006717). PT WMI itself
is a primary manufacturer (Sawmill) who produces Sawntimber and deliver 100% of their output to CV
KDU. VLC logs are obtained from PT. Wapoga Mutiara Timber (RA-VLC-006688), and PT. Salaki
Mandiri Sejahtera (RA-VLC-006698).
Rainforest Alliance
VER-08 15 May 2013
Page 18
PT. AKN is a sister company directly under CV. KDU and is a secondary manufacturer who
produces finger joint and finger joint laminating from Merbau (Intsia spp.). The raw material is sourced
from CV. KDU and from old stock of PT. AKN. Since change of scope audit in 2014, PT AKN is now
included into the scope of this verificatiion.
CV. KDU has also engaged ETH Enterprise Pte Ltd (RA-VLC-006941) as broker/agent for
marketing and sales of manufactured products.
APPENDIX I: AUDIT NON-CONFORMANCE FINDINGS
Audit Background
Audit Period (Date Range Audit Covers):
01 May 2014 - 31
January 2015
Has the management system changed since the previous evaluation:
Yes
No
Yes
No
If yes, briefly review the changes:
Have there been any complaints, disputes, or allegations of nonconformance with the standards raised against the Organization during the
audit period:
If yes, reference standard and criteria where corresponding findings are found in the report:
Note: this section indicates the Organization’s actions to comply with
NCRs that have been issued during or since the last audit. Failure to
comply with a minor NCR results in the NCR being upgraded to major;
the specified follow-up action is required by the Organization or
involuntary suspension will take place.
Status Categories
Closed
Open
Explanation
Organization has successfully met the NCR.
Organization has either not met or has partially met the NCR.
Check if N/A (there are no open NCRs to review)
[MINOR] NCR : 01/14
NCR issued for:
Report Section:
Rainforest Alliance
VER-08 15 May 2013
NC Classification:
Major
Minor X
CV Kharisma Duta Utama
Appendix II, 6.1
Page 19
Standard & Requirement:
Rainforest Alliance Generic Legality Standard for Processing and
Trade VER-23 dated version 15 May 2013, Criterion 6.1
Organization shall include claim information on sales invoices and shipping
documents, including the following:
d. The quantity/volume and species for each product;
e. The Rainforest Alliance verification code (RA-VLO-XXXXXX or RA-VLCXXXXXX).
f. A clear indication of which products are verified when multiple items are
stated on a document (e.g., indication of “RA VLO” or “RA VLC” per line
item)
Description of Nonconformance and Related Evidence:
Based on CVA in January 2014, the organization has been granted VLC certificate. During change of scope
audit in April 2014, the organization have not produced verified products as they have not received verified
sawn timber material from WMI. However, auditor found that some of export documents enquired by auditor
were stamped by RA verification code. This was not an attempt to represent materials as verified, and was
simply a misunderstanding of an employee who stamped documents for auditor review. Therefore and NCR
is issued.
Corrective Action Request:
Timeline for
Conformance:
Evidence Provided by
Organization:
Organization shall implement corrective actions to demonstrate
conformance with the requirement(s) referenced above.
Note: Effective corrective actions focus on addressing the specific
occurrence described in evidence above, as well as the root cause to
eliminate and prevent recurrence of the nonconformance.
By the next annual surveillance audit
-
Sales (commercial) invoice No: 027/INV-EXP/KDU/I/2015
Packing list No: 027/PL-EXP/KDU/2015
Nota
Pelayanan
Ekspor
(NPE)
No:
011970/WBC.10/KPP.MP.01/2015
Pemberitahuan Expor Barang (PEB) No Pengajuan: 070000000931-20150126-001032
Bill Of Lading No: OOLU2556946920
SOP
Manual
for
CoC
(01/KHARISMA
DUTA
UTAMA/CoC/III/2014)
Findings for Evaluation of
Evidence:
Auditor found sales invoice or any other attached shipping documents
(Packing List, Bill of Lading, Nota Pelayanan Eskpor/NPE,
Pemberitahuan Ekspor Barang/PEB) with VLC claim do not contain
RA VLC Code (RA-VLC-006775). Species is incorrectly listed on the
Packing List as Merbau decking profile.
Though the NCR 01/14 raised in Change of Scope audit 2014 dealt
with a different issue, non-conformance found during surveillance
audit 2015 is evaluated against the same Criterion 6.1. Thus this NCR
cannot be closed and upgraded into a MAJOR.
NCR Status:
Comments (optional):
OPEN
Prior to reinstatement of the verification statement
Rainforest Alliance
VER-08 15 May 2013
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[MINOR] NCR : 02/14
NCR issued for:
NC Classification:
Report Section:
Appendix II, 7.3
Standard & Requirement:
Rainforest Alliance Generic Legality Standard for Processing and
Trade VER-23 dated version 15 May 2013, Criterion 7.3
Major
Minor X
CV Kharisma Duta Utama
Organization shall have procedures in place to ensure and demonstrate
submission of all Rainforest Alliance claims to Rainforest Alliance for review
and approval prior to use.
Description of Nonconformance and Related Evidence:
KDU has not yet obtained VLC however they already prepare procedure for VLC Logo and Marking Approval
in their Manual of CoC system section 4.7. Under this SOP, they acknowledged the necessity to have approval
from Rainforest Alliance prior to use. However, during change of scope audit, the form of logo and marking
approval from RA was not available. Therefore, an NCR is issued..
Corrective Action Request:
Timeline for
Conformance:
Evidence Provided by
Organization:
Organization shall implement corrective actions to demonstrate
conformance with the requirement(s) referenced above.
Note: Effective corrective actions focus on addressing the specific
occurrence described in evidence above, as well as the root cause to
eliminate and prevent recurrence of the nonconformance.
By the next annual surveillance audit
-
Findings for Evaluation of
Evidence:
SOP
Manual
for
CoC
(01/KHARISMA
DUTA
UTAMA/CoC/III/2014)
Sales (commercial) invoice No: 027/INV-EXP/KDU/I/2015
On site observation
Interview with management staff
CV. KDU does not use any VLC claim in any public documents. VLC
claim is used in internal documents (such as sales summary) and
informally through email correspondence to their trading agent (ETH).
Auditor did not find any use of RA logo in any documents or products.
CV. KDU doesn’t not conduct any promotional activity on their own.
NCR Status:
The manual for CoC prescribes the necessity to have approval from
Rainforest Alliance prior to any trademark use. The form for RA
approval is provided but remained blank, since the management staff
are aware that VLC claim is allowable in business to business only
and logo use is not allowable in any case.
CLOSED
Comments (optional):
[MINOR] NCR : 03/14
NCR issued for:
NC Classification:
Report Section:
Appendix II, 10.2
Rainforest Alliance
VER-08 15 May 2013
Major
Minor X
CV Kharisma Duta Utama
Page 21
Standard & Requirement:
Rainforest Alliance Generic Legality Standard for Processing and
Trade VER-23 dated version 15 May 2013, Criterion 10.2
Prior to being admitted as a site within the scope of the verification, the
Verification Statement Holder designated auditor shall carry out an initial
audit of each site to ensure that it complies with all the requirements of the
applicable SmartWood verification standard.
Description of Nonconformance and Related Evidence:
Based on interview with PIC, the initial audit for AKN has been conducted by KDU, however the initial audit
report is not available as evidence, hence and NCR is issued.
Corrective Action Request:
Timeline for
Conformance:
Evidence Provided by
Organization:
Findings for Evaluation of
Evidence:
NCR Status:
Organization shall implement corrective actions to demonstrate
conformance with the requirement(s) referenced above.
Note: Effective corrective actions focus on addressing the specific
occurrence described in evidence above, as well as the root cause to
eliminate and prevent recurrence of the nonconformance.
By the next annual surveillance audit
-
Internal audit report, dated on 02 July 2014
Internal audit report, dated on 09 July 2014
SOP Manual for CoC No: 01/KHARISMA DUTA
UTAMA/CoC/III/2014
CV. KDU has conducted internal audit on 02 July and 2014 and 09
July 2014 to evaluate both KDU and AKN.
The internal audit report form is prescribed in the SOP manual, and
the report identified non-conformances and suggested corrective
actions to be taken with a specific timeline.
The SOP manual for CoC stipulates that internal audit is to be
conducted at least once per annum, but can be conducted more than
once if required.
CLOSED
Comments (optional):
[MINOR] NCR : 04/14
NCR issued for:
NC Classification:
Report Section:
Appendix II, 1.2
Standard & Requirement:
Rainforest Alliance Generic Legality Standard for Processing and
Trade VER-23 dated version 15 May 2013, Criterion 1.2
Major
Minor X
PT Artha Karya Nusa
Income from wood and wood products sales shall be declared according to
the applicable legislation, and income tax shall be paid in full within required
timelines.
Description of Nonconformance and Related Evidence:
AKN as sub contractor of organization (KDU) also keeps payment receipt of some taxes as follows:
-
PPh (Pajak Penghasilan/PPh) pasal 21/26 (Nihil) for 2012 has been reported on 21 Jnuary 2013 (S01004538/PPH2109/WPJ.24/KP.0403/2013),
PPN (Pajak Pertambahan Nilai) masa PPN and PPnBM has been reported on 31 January 2013 (S01006215/PPN1111/WPJ.24/KP.0403/2013).
PPh Badan for 2012 (pasal 25) was paid on 10 December 2012 (Rp 1,769,000), NPWP:
02.713.701.7.612.000.
Rainforest Alliance
VER-08 15 May 2013
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-
PPh Badan for 2012 (pasal 29) was paid on 29 April 2013 (Rp 5,081,850), NPWP:
02.713.701.7.612.000.
The payment receipt of PBB for AKN was not available for review by auditor, therefore an NCR is issued.
Corrective Action Request:
Timeline for
Conformance:
Evidence Provided by
Organization:
Findings for Evaluation of
Evidence:
Organization shall implement corrective actions to demonstrate
conformance with the requirement(s) referenced above.
Note: Effective corrective actions focus on addressing the specific
occurrence described in evidence above, as well as the root cause to
eliminate and prevent recurrence of the nonconformance.
By the next annual surveillance audit
-
Surat Setoran Pajak/SSP PPh 29 on CV. KDU for the year 2013,
dated on 02/04/2014
- Surat Pemberitahuan/SPT PPh 29 on CV. KDU for the year 2013
- Surat Setoran Pajak/SSP PPh 29 on PT. AKN for the year 2013
- Bukti Penerimaan Negara/BPN (Receipt of State income) on PT.
AKN for the year 2013, dated on 28/04/2014
- Proof of payment of PBB for CV. KDU 2013 (paid in 2014)
- Proof of payment of PBB for PT. AKN 2013 (paid in 2014)
- Proof of payment of PBB for PT. AKN 2012 (paid in 2013)
Auditor was presented with authentic latest proof of payment of PPh
29 (Income tax for Business entity) and proof of payment of PBB (Land
and Building Tax) for both KDU and AKN.
The proof of payment for PPh 29 is on SSP,SPT, or BPN and all
documents are found to be consistent
PPh 21 (income tax for employee) in this case were not reviewed as
this is the responsibility of the employees.
NCR Status:
Authentic proof of payment of the latest Land and building tax (PBB)
and the outstanding PBB payment (subject to NCR 04/14 in the
change of scope audit 2014) were also presented to the auditor
CLOSED
Comments (optional):
Rainforest Alliance
VER-08 15 May 2013
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Rainforest Alliance
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