Peranap_Mill_Report_Rigunas_Ag..

Audit Report

Certification Audit for

PT. Rigunas Agri Utama Peranap Mill and Its Supply Bases

FMS40006

RSPO Membership number: 1-0022-06-000-00

Audited Address:

Peranap Mill:

Simelinyang, Pauh Ranap, Sengkilo Village, Peranap District,

Indragiri Hulu Regency, Riau Province, Indonesia

Its supply base:

Simelinyang, Pauh Ranap, Sengkilo Village, Peranap District,


Date of audit: 23/01/2014

QEF08sa.RSPO.01 / Issue Date: July 15 2013 SAI Global Indonesia Page 1 of 118

Audit Report

2.3

2.4

2.5

3.0

3.1

3.2

3.3

1.10

1.11

1.12

1.13

2.0

2.1

2.2

1.4

1.5

1.6

1.7

1.8

1.9

Table of contents

Executive Overview

Abbreviations Used

1.0

1.1

1.2

1.3

SCOPE OF THE ASSESSMENT

Introduction

Audit Objective

Scope of Certification

1.3.1 Palm Oil Mill

1.3.2 Oil Palm Estate

Location of Mill and Estates

Description of Supply Base

Date of Plantings

Area of Plantations

Approximate Tonnages Offered for Certification (CPO and PK)

Other Certificates Held

Organisational Information/Contact Person

Time Bound Plan for Other Management Units

Partial Certification Requirements

Date of Issue of Certificate

AUDIT PROCESS

Certification Body

Audit Methodology

2.2.1 Pre-audit

2.2.2 Certification audit

Qualification of the Lead Auditor and Audit Team Members

Stakeholder Consultation

Date of Next Surveillance Visit

AUDIT FINDINGS

Action taken on previous audit issues

Claim and use of certification mark and or logo

Description of audit findings

3.3.1 RSPO Principle and Criteria, Indonesian National Interpretation

3.3.2 Mill Supply Chain Requirements

3.3.2.1 Supply Chain Certification Standard

3.4

3.5

3.3.2.2 Supply Chain Certification System

Recommendation

Environmental and social risk for this scope of certification for planning of the surveillance audit

Acknowledgement of Internal Responsibility and Formal Sign-off of

Assessment Findings

5

6

7

2

3

4

3.6

List of Tables

1 Mill and Estates GPS Locations

FFB Production of the supply base

Peranap Estate Age Profiles of Planted Palms

Land use description of Peranap Estate in 2013

Estates and Area Planted 2013

Peranap Estate FFB Production Trend 2011 – 2013

Peranap Mill Total CPO and PK Production of 2013 and Estimate

Production of 2014

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QEF08sa.RSPO.01 / Issue Date: July 15 2013 © SAI Global Indonesia Copyright 2009 Page 2 of 118

Audit Report

List of Tables

8 Actual Peranap Mill Production of CPO and PK 2013

9 Estimated Peranap Mill Production of CPO and PK 2014

10 Certificates Held by Mill and Estates

11

12

RSPO Certification Time Bound Plan

List of internal and external stakeholder

List of Figures

1 Map of Mill and Estates Location

D

List of Appendixes

A Audit Plan

B

C

Nonconformities, Corrective Actions and Observations Summary

Stakeholder’s issues and comment

Definition of, and action required with respect to audit findings

Page

8

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94

104

116

117

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Audit Report

Executive Overview

This is initial certification audit. SAI Global has audited Peranap Mill, PT. Rigunas Agri Utama and its supply bases operations that comprising one mill, one oil palm estate, support services and infrastructure. Initially Major Nonconformities were identified during this certification audit. Follow up audit has been conducted to review the corrective action taken to the Major Nonconformities, and objective evidences reviewed that Major Nonconformities could be closed out.

At the conclusion of this audit, Peranap Mill, PT. Rigunas Agri Utama and its supply bases operation was found complies with the requirements of the National Interpretation of RSPO

Principles and Criteria for Sustainable Palm Oil Production, Republic of Indonesia, May 2008 and the RSPO Supply Chain Certification System, November 2011 and RSPO Supply Chain

Certification Standard, Module E – CPO Mill: Module E Mass Balance November 2011.

The recommendation from this audit is that certificate can proceed for PT. Rigunas Agri Utama

Peranap Mill as a producer of RSPO Certified Sustainable Palm Oil and Palm Kernel Mass

Balance Model.

Estimated tonnage of certified CPO produced

Estimated tonnage of certified PK produced

22,917 MT

5,482 MT


Audit Report

Abbreviations Used

AMDAL

BOD

BPN

CPO

CSR

EFB

FFB

FRF

GPS

HCV

HGU

HPH

IPM

ISO

ISPO

KHT

KLP

KPN kWH

LCC

LUK

LUP

MB

MSDS

NGO

OHS

P2K3

PEL

PHL

POM

PPE

Environmental Impact Analysis ( Analisis Dampak Lingkungan )

Biological Oxygen Demand

National Land Agency (

Crude Palm Oil

Corporate Social Responsibility

Empty Fruit Bunch

Fresh Fruit Bunch

Fractionation and Refinery Factory

Global Positioning System

High Conservation Value

Land Use Title (

Forest Authority Concession ( Hak Penguasaan Hutan )

Peranap Estate ( Kebun Peranap )

Kilo Watt Hour

Daily worker (

Palm Oil Mill

Pekerja Harian Lepas

Personal Protective Equipment

Peranap Mill ( Pabrik Peranap )

)

Kebun Plasma Peranap

Estate Unit Report (Laporan Unit Kebun)

Mill Unit Report (Laporan Unit Pabrik)

Mass Balance

Hak Guna Usaha

Integrated Pest Management

)

International Standards Organisation

Indonesia Sustainable Palm Oil

Permanent worker ( Karyawan Harian Tetap )

Peranap smallholders (

Legume cover crops

Material Safety Data Sheet

Non-Government Organisation

Occupational Health and Safety

Safety Committee

Badan Pertanahan Nasional

)

)

Environmental Evaluation Manual ( Pedoman Evaluasi Lingkungan )

PPN

PK

PKB

Palm Kernel

Joint Working Agreement ( Perjanjian Kerja Bersama )

PKOF

PT RAU

Palm Kernel Oil Factory

Rigunas Agri Utama Ltd.

RABQSA

RKL

RPL

RSPO

SA

SCCS

SIA

SP

SPSI

TLV

TPH

TRAKSI

WWTP

Quality Society of Australia

Environmental Management Plan ( Rencana Pengelolaan Lingkungan )

Environmental Monitoring Plan ( Rencana Pemantauan Lingkungan )

Roundtable on Sustainable Palm Oil

Social Accountability

Supply Chain Certification System

Social Impact Assessment

Indonesian Worker Union ( Serikat Pekerja )

Serikat Pekerja Seluruh Indonesia

Threshold Limit Value

Ton Per Hour

Organization work unit who is responsible to provide heavy equipment, transportation equipment, and also maintaining road condition

Waste Water Treatment Plant


Audit Report

1.0 SCOPE OF THE CERTIFICATION ASSESSMENT

1.1 Introduction

SAI Global conducted an audit of PT. Rigunas Agri Utama, Peranap Mill and Its Supply Bases on

21 to 23 January 2014 with Major Nonconformities identified. Follow up audit had been conducted on 17 and 23 March 2014 for verification of corrective action taken by the organisation.

The purpose of this audit report is to summarise the degree of compliance with the relevant criteria, as defined on the cover page of this report, based on the evidence obtained during the audit of your organisation.

SAI Global audits are carried out within the requirements of SAI Global procedures which also reflected the requirements and guidance provided in the international standards relating to audit practices such as ISO/IEC 17021, ISO 19011, RSPO Certification System, relevant RSPO Supply

Chain Certification System and other normative criteria. SAI Global Auditors are assigned to audits according to industry, standard or technical competencies appropriate to the organisation being audited. Details of such experience and competency are maintained in our records. The audit team is detailed in the attached audit record.

In addition to the information contained in this audit report, SAI Global maintains files for each client. These files contain details of organisation size and personnel as well as evidence collected during preliminary and subsequent audit activities (Documentation Review and Scope) relevant to the application for initial and continuing certification of your organisation.

Details of your primary contact persons and their contact details and site addresses are also maintained. Please take care to advise us of any change that may affect the application/certification or may assist us to keep your contact information up to date, as required by

SAI Global Terms and Conditions.

Please note that this report is subject to independent review and approval. Should changes to the outcomes of this report be necessary as a result of the review, a revised report will be issued and will supersede this report.

1.2 Audit Objective

This is initial (certification) audit. The purpose of this audit was to determine compliance of your organization’s management system with the audit criteria (National Interpretation of RSPO

Principles and Criteria for Sustainable Palm Oil Production, Republic of Indonesia, May 2008 and the RSPO Supply Chain Certification System, November 2011 and RSPO Supply Chain

Certification Standard, Module E – CPO Mill: Module E Mass Balance November 2011) and its effectiveness in achieving continual improvement and system objectives.

It was also to verify the volume of certified and uncertified FFB entering the mill and volume sales of RSPO certified producers.

1.3 Scope of certification

The scope of certification is the CPO production from one (1) Palm Oil Mill and one (1) FFB supply base owned by PT. Rigunas Agri Utama.


Audit Report

1.3.1 Palm Oil Mill

Peranap Mill PT. Rigunas Agri Utama

Location

Mill capacity

: Simelinyang, Pauh Ranap, Sengkilo Village, Peranap District,


GPS Location : East 102

0 01’10” South 0 0 35’05”

: 45 MT FFB/hour

1.3.2 Oil Palm Estate

Peranap Estate PT. Rigunas Agri Utama

Location : Simelinyang, Pauh Ranap, Sengkilo Village, Peranap District, Indragiri

Hulu Regency, Riau Province, Indonesia

GPS Location : East 101

South 0

0

0 59’33” - 102

38’17” - 0 0

0 04’23”

33’51”

1.4 Location of mill and estates

PT. Rigunas Agri Utama mill and estate are located in Riau Province, Indonesia. The geographical coordinate of the mill and estates are shown on Table 1.

Table 1: Mill and Estates GPS Locations included in certification assessment

MILL AND ESTATE

Peranap Mill

Peranap Estate

EASTING

102

0 01’10” E

101

0 59’33” - 102 0 04’23” E

SOUTHING

0

0 35’05” S

0

0 38’17” - 0 0 33’51” S


Audit Report

Figure 1 Map of Mill and Estates Location

Source: Asian Agri Research and Development Centre Tebing Tinggi

– Sumatera Utara


Audit Report

1.5 Description of supply base

The FFB source is one (1) organisation owned by PT. Rigunas Agri Utama, plasma estate managed by PT Rigunas Agri Utama and third party estates. Plasma estate and third party estate are excluded from certification. The plasma estate that supply FFB to Peranap mill is planned to be audited in 2016 based on time-bound plan. The third party (independent smallholders) sold FFB to the mill based on the agreed price and does not have special agreement with the organization. The hectarage and FFB production of the estates are shown on Table 2.

Table 2. FFB Production of the supply base

ESTATE PLANTED AREA (HA) FFB (TON/YEAR)

(BUDGET 2014)

Peranap Estate, PT Rigunas Agri

Utama

3,658 98,781

Sub Total

Peranap Smallholders Estate, PT

Rigunas Agri Utama

3 rd

Party

3,658

5,142

98,781

100,252

N/A 50,000

Total 8,800

Source: PT. Rigunas Agri Utama, January 2014

1.6 Date of plantings

Table 3: Peranap Estate Age Profiles of Planted Palms

Year

Estate Planted Area

(Ha)

249,033

% of Planted Area

Mature Immature Mature Immature

1992

1993

1994

1995

1996

1997

Total

865

1,315

256

575

534

113

3,658

0

0

0

0

0

0

0

23.65

35.95

7.00

15.72

14.60

3.09

100.00

Grand Total


3,658 100.00


0

0

0

0

0

0

0

Audit Report

1.7 Area of plantation

The areas details for organisation owned estates are shown on Table 5. Review of estate boundary maps has been done. There is no new open area since November 2005. All land in inside the concession area has been developed in period 1987 – 1989. The submitted estate boundary maps dated 23 June 2014 indicated that there are natural vegetated land has been cleared however the cleared area are within the enclave which is rubber plantation and it is open by the community who encroached to the company concession which the company do not have control.

Table 4: Land use description of Peranap Estate in 2013

USED AREA HECTARES

Mature plantation area

Immature plantation area

Total area planted

Emplacement and Mill

Other area (enclave, water ponds, land with slope

>30 %)

Total leased area

3,658

0

3,658

35

1,522

5,215

HCV Area (included in planted area)


Table 5: Estates and Area Planted 2013

ESTATE MATURE (HA)

99

IMMATURE (HA)

Peranap Estate 3,658 0


1.8 Approximate tonnages offered for certification (CPO and PK)

Approximate tonnages offered for certification is estimated based on the organisation last three years actual FFB production of Peranap Estate as well as last year CPO and PK, OER and KER of

Peranap Mill.

Table 6: Peranap Estate FFB Production Trend 2011 – 2013

YEAR Actual Production (MT)

2011 98,304

2012 103,040

2013 97,301



Audit Report

Table 7: Peranap Mill Total CPO and PK Production of 2013 and

Estimate Production of 2014

Supply Base

FFB

Processed

(MT)

CPO

Production

(MT)

OER

(%)

PK

Production

(MT)

KER

(%)

Peranap Estate *

Other Suppy Base

- Per anap Smallholders

Estate, PT Rigunas

Agri Utama and the

3 rd

Party

Total actual production

Actual production 2013

97,301 21,997

133,052 27,304

22.61

20.52

5,192

7,098

5.34

5.33

230.353 49.301 21.40

Estimate production 2014

98,781 22,917 23.20

12.290 5.34

Peranap Estate 5,482 5.55

Other Suppy Base

- Per anap Smallholders

Estate, PT Rigunas

Agri Utama and the

3 rd

Party

162,876 35,561 21.83 9,040 5.55

Total estimate production 261,657 58,478 22.35 14,522 5.55


*Detail see Table 8

The FFB from Peranap Estate are processed together with FFB from other supply based, therefore

Peranap Mill used RSPO Supply Chain Mass Balance Model – Module E.

Table 8: Actual Peranap Mill Production of CPO and PK 2013

Month Total FFB (Ton)

January

February

March

April

May

June

July

August

7,136

6,697

6,138

7,879

6,204

6,765

8,404

8,933

September

October

November

December

10,142

10,408

9,774

8,820

Total 97,301


Palm Oil (MT)

1,663

1,535

1,438

1,862

1,408

1,488

1,840

1,917

2,182

2,398

2,259

2,007

21,997

PK (MT)

401

385

336

419

339

361

424

430

487

569

538

503

5,192


Audit Report

Table 9: Estimated Peranap Mill Production of CPO and PK 2014

Month Total FFB (Ton) Palm Oil (MT) PK (MT)

January

February

March

April

May

June

July

7,423

7,279

7,615

7,044

7,100

7,747

8,778

1,722

1,689

1,767

1,634

1,647

1,797

2,036

412

404

423

391

394

430

487

August

September

October

November

December

8,415

8,294

9,849

9,610

9,627

1,952

1,924

2,285

2,230

2,233

467

460

547

533

534

Total

98,781


22,917 5,482

Based on the above figures, the estimated of certified CPO and PK offered in 2014 for certification are:

Estimated tonnage of certified CPO produced

Estimated tonnage of certified PK produced

22,917 MT

5,482 MT

1.9 Other certificates held

The organisation is implementing ISCC standard based on the following certificate.

Table 10: Certificates Held by Mill and Estates

MILL/ESTATE OTHER CERTIFICATION HELD

Peranap Mill and Estate ISCC by SGS Germany, EU-ISCC-Cert-DE100-20130950, Period of 26

November 2013 – 25 November 2014


1.10 Organizational information/contact person

PT. Rigunas Agri Utama

Jl. MH. Thamrin No. 31, Jakarta 10230

Phone : (+62-21) 2301119

Fax : (+62-21) 2301120

Contact person : Ms. Asrini Subrata

Email

Stakeholder Relation Manager

: asrini_subrata@asianagri.com


Audit Report

1.11 Time bound plan for other management units

PT. Rigunas Agri Utama as a subsidiary of PT. Inti Indosawit Subur is committed to RSPO certification of all its Management Units located in North Sumatera, Riau and Jambi Provinces.

Time bound plan has been developed to achieve the RSPO certification for all its Management

Units by 2018 and 2016 for Plasma. The time bound plan is realistic and challenging. The plan was detailed on Table 11. The time bound plan was revised in February 2014, because the previous version was not updated.

Table 11: RSPO Certification Time Bound Plan

Name of Mill Mill Address

Name of Supply

Base Plantation

Estate

Address

Time bound for certification

Progress

Buatan I Mill

Buatan II Mill

Ukui I Mill

Ukui II Mill

Tungkal Ulu

Mill

Delik & Pangkalan

Kerinci Village,

Bunut Langgam

District, Pelalawan

Regency, Riau

Delik & Pangkalan

Kerinci Village,

Bunut Langgam

District, Pelalawan

Regency, Riau

Ukui Village, Ukui

District, Pelalawan

Regency, Riau

Ukui Village, Ukui

District, Pelalawan

Regency, Riau

Pulau Pauh /

Penyabungan /

Merlung Village,

Tungkal Ulu

District, Tanjung

Jabung Regency,

Jambi

Buatan Estate Delik & Pangkalan

Kerinci Village, Bunut

Langgam District,

Pelalawan Regency,

Riau

Buatan (Plasma) Delik & Pangkalan


Langgam District,

Pelalawan Regency,

Buatan Estate

Riau

Delik & Pangkalan


Langgam District,

Pelalawan Regency,

Riau

Buatan (Plasma) Delik & Pangkalan


Langgam District,

Pelalawan Regency,

Ukui Estate

Riau

Ukui Village, Ukui

Ukui (Plasma)

Soga Estate

District, Pelalawan

Regency, Riau

Ukui & Lubuk Batu

Jaya District,

Pelalawan & Inhu

Regency, Riau

Ukui Village, Ukui

District, Pelalawan

Regency, Riau

Ukui (Plasma)

Tungkal Ulu

Estate

Tungkal Ulu

(Plasma)

Ukui & Lubuk Batu

Jaya District,

Pelalawan & Inhu

Regency, Riau

Pulau Pauh /

Penyabungan /

Merlung Village,

Tungkal Ulu District,

Tanjung Jabung

Regency, Jambi

Renah Mendalo,

Merlung, Muara

Papalik District,

Tanjung Jabung

Barat Regency,

Jambi

2010

2010

2010

Certified on

16 September

2010

Certified on

16 September

2010

Certified on 1

March 2011

Brought forward from 2012 to

2011

Certified on

11 June 2012

2010 Certified on 1

March 2011

Brought forward from 2012 to

2011

Certified on

11 June 2012

2011 Certified on

15 August

2012

2012 Certified on

11 July 2013


Audit Report


Name of Supply

Base Plantation

Estate

Address


Progress

Muara Bulian

Mill

Singoan / Bukit Sari

/ Bulian Jaya

Village, Muara

Bulian / Pemayung

District, Batang

Hari Regency,

Jambi

Muara Bulian

Estate

Muara Bulian

(Plasma)

Muara Bulian

(KKPA)

Singoan / Bukit Sari /

Bulian Jaya Village,

Muara Bulian /

Pemayung District,

Batang Hari Regency,

Jambi

Maro Sebo Ilir

District, Batanghari

Regency, Jambi

Maro Sebo Ilir

District, Batanghari

Regency, Jambi

Petapahan Village,

Tapung District,

Kampar Regency,

Riau

2011

2012

2012

Certified on

28 August

2012

Certified on

12 July 2013

Certified on

12 July 2013

Topaz Mill

Taman Raja

Mill

Segati Mill

Tanah Datar

Mill

Aek Nabara

Mill

Petapahan Village,

Tapung District,

Kampar Regency,

Riau

Lubuk Bernai /

Kampung Baru /

Pelabuhan Dagang

/ Pematang Pauh

Vilage, Tungkal Ulu

District, Tanjung

Jabung Regency,

Jambi

Langkan /

Penarikan /

Tambak / Sotol

Village, Langgam

District, Pelalawan

Regency, Riau

Tanah Datar

Petatal Village,

Talawi District,

Asahan Regency,

North Sumatera

S1-S3 / Sukadame

Village, Bilah Hulu /

Kota Pinang

Topaz & Seed

Garden Estate

Taman Raja &

Badang Estate

Lubuk Bernai /

Kampung Baru /

Pelabuhan Dagang /

Pematang Pauh

Vilage, Tungkal Ulu

District, Tanjung

Jabung Regency,

Jambi

Segati Estate Langkan / Penarikan /

Tambak / Sotol

Village, Langgam

District, Pelalawan

Regency, Riau

Pangkalan Sarik / Penarikan &

Gondai Estate Baru Village,

Langgam / Siak Hulu

District, Pelalawan /

Kampar Regency,

Riau

Penarikan (KKPA) Pangkalan Sarik /

Gunung Sahilan

(KKPA)

Baru Village,

Langgam / Siak Hulu

District, Pelalawan /

Kampar Regency,

Riau

Gunung Sahilan

Tanah Datar

Estate

Bahilang Estate

Village, Lipat Kain

District, Pelalawan

Regency, Riau

Tanah Datar Petatal

Village, Talawi

District, Asahan

Regency, North

Sumatera

Bahilang Village,

Tebing Tinggi District,

Serdang Bedagai

Regency, North

Sumatra

Aek Nabara

Estate

S1-S3 / Sukadame

Village, Bilah Hulu /

Kota Pinang District,

2013

2013

2014

2014

2014

2014

Brought Forward from 2015 to

2013


2013

Public

Notification conducted in

December

2013. Main

Audit in Jan

2014

Public


December

2013. Main

Audit in Jan

2014

-

-

-

-

Public


December

2013. Main

Audit in Feb

2014

Public



Audit Report


Name of Supply

Base Plantation

Estate

Address


Progress

Teluk Panjie

Mill

Peranap Mill

District, Labuhan

Batu Regency,

North Sumatra

Teluk Panjie

Village, Kampung

Rakyat District,

Labuhan Batu

Regency, North

Sumatra

Simelinyang / Pauh

Ranap / Sengkilo

Village, Peranap

District, Indragiri

Hulu Regency,

Riau

Teluk Panjie

Estate

Peranap Estate

Labuhan Batu

Regency, North

Sumatra

Teluk Panjie Village,

Kampung Rakyat

District, Labuhan

Batu Regency, North

Sumatra

Simelinyang / Pauh

Ranap / Sengkilo

Village, Peranap

District, Indragiri Hulu

Regency, Riau


2013


2013

Bungo Tebo

Mill

Tanjung

Selamat Mill

Tuo Sumai / Sungai

Rambai Village,

PWK Sumai / Tebo

Ulu District, Bungo

Tebo Regency,

Jambi

Kampung Padang

Village, Bilah Hilir

District, Labuhan

Batu Regency,

North Sumatra

Peranap (Plasma) Simelinyang / Pauh

Ranap / Sengkilo

Village, Peranap

District, Indragiri Hulu

Regency, Riau

Bungo Tebo

Estate

Tuo Sumai / Sungai

Rambai Village, PWK

Sumai / Tebo Ulu

Bungo Tebo

(Plasma)

District, Bungo Tebo

Regency, Jambi

Tuo Sumai / Sungai

Rambai Village, PWK

Sumai / Tebo Ulu

District, Bungo Tebo

Regency, Jambi

Tanjung Selamat Kampung Padang


District, Labuhan

Batu Regency, North

Pangkatan

Sumatra

Sennah Village, Bilah

Hilir District, Labuhan

Batu Regency, North

Pulau Maria

Estate

Sumatra

Rahuning Village,

Bandar Pulau District,

Asahan Regency,

North Sumatra

2016

2016

2016

2017

2017

-

-

-

-

Gunung

Melayu I

Gunung

Melayu II

Rahuning Village,

Bandar Pulau

District, Asahan

Regency, North

Sumatra

Gonting Mahala

Village, Bandar

Pulau District,

Asahan Regency,

North Sumatra

Negri Lama I Negri Lama

Seberang Village,

Bilah Hilir District,

Labuhan Batu

Regency, North

Sumatra

Sentral & Batu

Anam Estate

Negri Lama

Aek Kuo

Gonting Mahala

Village, Bandar Pulau

District, Asahan

Regency, North

Sumatra

Negri Lama Seberang


District, Labuhan

Batu Regency, North

Sumatra

Aek Korsik Village,

Aek Natas District,

Labuhan Batu

Regency, North

2017

2017


2013

-

-

Public


December

2013. Main

Audit in Feb

2014


December

2013. Main

Audit in Feb

2014

Public


December

2013. Main

Audit in Feb

2014

Public


December

2013. Main

Audit in Jan

2014

-

Audit Report


Name of Supply

Base Plantation

Estate

Address


Progress

Sumatra

Negri Lama II Negri Lama

Seberang Village,

Bilah Hilir District,

Labuhan Batu

Regency, North

Sumatra

Source: Asian Agri, March 2013

*3 rd

party which is excluded from scope of certification

Negri Lama Seberang


District, Labuhan

Batu Regency, North

Sumatra

2018 -

1.12 Partial Certification Requirements

The internal auditor organisation conducted the site visit and review regarding no replacement of primary forest or any area identified as containing High Conservation Values (HCVs) or required to maintain or enhance HCVs in accordance with RSPO criterion 7.3, land conflict, labour disputes and legal non-compliance to all management units which have not been certified to ensure that partial certification requirements were fulfilled.

Site visits were conducted by the organisation for ensuring compliance against partial certification requirements according to RSPO Certification System clause 4.2.4:



PT. Gunung Melayu: Gunung Melayu II Mill and their supply bases on 3 April 2013



PT. Saudara Sejati Luhur: Gunung Melayu I Mill and its supply base on 4 April 2013.



PT. Rantau Sinar Karsa: Supply base for Tanjung Selamat Mill on 16 April 2013



PT. Indo Sepadan Jaya: Tanjung Selamat Mill and its supply base on 18 April 2013



PT. Rigunas Agri Utama: Bungo Tebo Mill and its supply base on 30 April 2013



PT. Mitra Unggul Pusaka: Segati Mill and its supply base on 8 June 2013

Based on the review it was concluded that:



There was no new planting since January 2010 so there was no replacement of primary forest or any area identified as containing High Conservation Values (HCVs) or required to maintain or enhance HCVs in accordance with RSPO criterion 7.3.



There were no land conflict and labour disputes



There was no non-compliance with regulations based on internal gap analysis.

Major non-conformances (NCR2014-01) rose from the audit since at the time the audit was conducted the evidence of compliance of all uncertified management units to partial certification requirements could not be shown. The NCR2014-01 was closed and the RSPO Internal Audit report has been revised accordingly and can be used for RSPO certification partial requirement.

Also management has appointed SPO officer to ensure that all partial requirements to be included in the RSPO Internal Audit report (See Appendix B).

1.13 Date of issue of certificate

Date of issue of certificate will be the date on approval of this Assessment Report by the RSPO

Secretariat.


Audit Report

2.0 AUDIT PROCESS

2.1 Certification body

PT. SAI Global Indonesia

Graha Iskandarsyah, 4 th

floor

Jl. Iskandarsyah Raya No. 66 C

Kebayoran Baru, Jakarta 12160, Indonesia

Phone

Fax

: +62 21 720 6186, 720 6460

: +62 21 720 6207

Contact person : Ms. Inge Triwulandari

Technical Manager

Email : inge.triwulandari@saiglobal.com

SAI Global is on e of the world’s leading business providers of independent assurance. SAI Global provides organisations around the world with information services and solutions for managing risk, achieving compliance and driving business improvement.

We provide aggregated access services to Standards, Handbooks, Legislative and Property publications; we audit, certify and register your product, system or supply chain; we facilitate good governance and awareness of compliance, ethics and policy issues and provide training and improvement solutions to help individuals and organisations succeed.

The SAI Global business is driven by two equally important client needs - the mandated need for organisations to conform to regulations, standards and legislation in all their locations, and the operational need for organisations to improve business processes and procedures as well as corporate culture. As we are a global company, we can meet these needs for any client - those operating within one country's borders and in one language or those operating across borders and in several languages.

There are three business units/divisions within SAI Global namely the Information Services

Division, the Compliance Division, and the Assurance Division. The Assurance Division helps organisations manage risk, achieve process or product certification and drive improvement by providing training, registration audits and supplier management programs which can improve business performance. We provide independent audits, assessments and certification of your products or business processes to ensure they comply with industry standards or customer specific requirements. We understand how compliance with those standards can improve the efficiency, economy and profitability of your operation. With auditing and assessment staff located around the world, our clients include large global corporations as well as single site organisations.

2.2 Audit methodology

2.2.1 Pre-audit

SAI Global planned the stage 2 certification audit based on review of the data given during stage 1

ISPO audit including: stakeholder, land title, etc. on 25 th – 26 th

November 2013). SAI Global already communicated with RSPO Secretariat and ASI and it was confirmed that stage 1 is not mandatory under RSPO Certification System.


Audit Report

2.2.2 Certification audit

The Certification Audit was performed on 21 st – 23 rd

January 2014 integrated with audit for ISPO,

Indonesian Sustainable Palm Oil ( Peraturan Menteri Pertanian #19/Permentan/OT.140/3/2011 ).

The audit programme was included in the body of report.

The audit methodology for collection of objective evidences were site inspection, documentation and record review and interview with staffs, workers, and other stakeholders. Objective evidences from documentation/record review in one area may also be cross checked with other objective evidences in other areas and with the evidence of implementation on site during the audit. Inputs from stakeholders via letter, email, or other communication media were also considered for this certification audit.

Audit plan is available in Appendix A of this report on page 94.

2.3 Qualification of the lead auditor and audit team member

Eko Purwanto – Lead Auditor

Eko Purwanto graduated as Bachelor of Forestry from Forest Conservation Department, Faculty of

Forestry, Bogor Institute of Agriculture (IPB) in 2001. He owned working experience at Oil Palm

Plantation in East Kalimantan since 2003 to 2012, the last position was Estate Manager. He has implemented good agricultural practice including integrated pest management and limited pesticides uses. He has completed lead auditor training courses for RSPO P & C (2013), ISO

9001:2008 (2012), ISO 14001:2004 (2013), ISPO (2012) and RSPO SCC (2012). He has also completed training course of ISO 14001 (2012), Minaut Indonesia (2011) and Introduction to HCV

Toolkit HCV (2011). For the last 2 years he has been involved in quality (ISO 9001) management system audits for very broad industrial and involved in Indonesia Sustainable Palm Oil (ISPO) audit for several plantations and mills since October 2012.

Bayu Abirowo – Audit Team Member

He is a Bachelor of Electrical Engineering from Trisakti University, Jakarta. He joined SAI Global in

2004 as Lead Quality Auditor for ISO 9001:2008 and was registered in IRCA. He has working and auditing experiences in manufacturing companies with large scale manpower and deals with various kinds and positions of interviewed people. He is also SA 8000 auditor certified by Social

Accountability International since 2011. He has received training for legal requirements of land acquisition, customary rights, HCV (High Conservation Value) and social impact management in palm forestry. He was also trained for RSPO principles and criteria (P&C) and ISPO (2012) lead auditor.

Edy Widodo – Audit Team Member

Edy Widodo graduated as bachelor of the Faculty of Agriculture, Department of Agricultural

Technology, University of Padjadjaran, Bandung. Earlier he worked as an Assistant Estates

Manager in PT SMART Tbk. (1999 to 2005). He joined SAI Global in 2013 as a Lead Auditor for

ISO 9001: 2008. He has working experience in the industrial sector and audit Plantation, and also the processing industry and agricultural mechanization. He is also the ISPO auditor who has obtained a certificate from the ISPO Commission, Ministry of Agriculture of Indonesia, on February

2013. He had got a certificate of training on Understanding ISO 14001: 2004 & Auditing ISO

14001: 2004 in 2013. He also had joined RSPO P&C training (2013).


Audit Report

Dirgantara Bayu L – Audit Team Member

Dirgantara Bayu L, owned a bachelor degree majoring in occupational health and safety from

University of Indonesia. He owns a lot of experienced in field of QHSE MS (Quality, Health, Safety and Environment Management System) for several sectors of industry, such as: chemical manufacturing, construction and oil and gas exploration. He is registered as lead auditor (ISO

9001, ISO 14001, OHSAS 18001 and ISPO) within the international professional auditor membership (IRCA & RABQSA) and also registered in local government ministry of manpower

AK3U & HIMU (Safety Officer & Industrial Hygienists) and ISPO Lead Training Auditor from

Ministry of Agriculture. He joined SAI Global Indonesia in 2012 and currently is a management systems auditor.

Iwan Setiawan - Technical Specialist for HCV Issues

He completed the education at the Department of Biology, Faculty of Mathematics and Natural sciences (MIPA), University of Padjadjaran. Experienced in researching wildlife, species management, protected area management, facilitating multi-stakeholder engagement in biodiversity conservation, facilitator and trainer for Natural Resources Management, and qualified in Community Based Biodiversity Assessment. He actively initiates and manages various nongovernmental organization focused on Biodiversity Conservation, also has done a number of studies of HCV in Palm oil plantations in various areas in Indonesia since 2012. Currently he is listed as RSPO Approved HCV Assessor – Team Leader .

2.4 Stakeholder consultation

Public notification was made on December 10 th

, 2013 and was published on RSPO website as well as SAI Global website.

Stakeholder consultation was performed into internal and external stakeholders. Internal stakeholders included staffs and workers. External stakeholders were selected by considering that they have an interest in the organisation activities, directly border with organisation area where the workers live. External stakeholders included NGO, governments and civil societies.

Letters were also sent to external stakeholders to invite for comment or individual / group discussions. Group and Individual discussions with stakeholders (Table 12) were conducted during the audit, to verify compliance against relevant criteria and indicator related to land status and conflict, environmental, social aspect and HCV. Surrounding Village of estate and mill has been chosen to represent societies. Group and individual discussion were conducted for two sessions.

First session was conducted especially for surrounding stakeholders directly affected on estate and mill, i.e. Head of village, farmers. Second session was conducted especially for labour union, gender committee and selected workers.

Group interview was conducted for workers with similar job while others were interviewed individually in the scope to verify compliance against relevant criteria and indicator related to infrastructure facility, labour, social aspect (discrimination and sexual harassment), environment and HCV. The result of stakeholder consultation used to justify fulfilment of some indicators, e.g. criterion 2.2 indicator major 3, minor 1 and minor 2, criterion 2.3 indicator major 1, criterion 6.5 indicator minor 1, criterion 6.6 indicator minor 1, criterion 6.7 indicator minor 1, criterion 6.8 indicator minor 1, criterion 6.9 indicator minor 1, 2 and 3, criterion 6.10 indicator minor 1 and 2, criterion 6.11 indicator minor 1, etc.


Audit Report

The result of these consultations was provided in Appendix C on page 116.

Table 12: List of internal and external stakeholders

STAKEHOLDERS

Internal stakeholders ( mill & estates )

METHODS OF CONSULTATION

Head of SPSI

Head of Gender Committee

Workers

External Stakeholders ( mill & estates )

Group discussion for workers with similar role, otherwise individually interviewed

Head of Villages :

- Talang

- Semelinang

Farmer groups (FFB Supplier / KUD)

- KUD Katipo Jaya

- KUD Bukit Makmur

Social and Labour Agency ( Dinas Sosial dan Tenaga

Kerja Kabupaten Indragiri Hulu )

Agriculture and Plantation Agency ( Dinas Pertanian dan Perkebunan Kabupaten Indragiri Hulu )

Environment Agency ( BLHD Kabupaten Indragiri

Hulu )

National Land Agency ( Badan Pertanahan Nasional

(BPN) Kabupaten Indragiri Hulu )

Sub District Police ( Kepolisian Sektor Peranap )

Individual discussion

Individual discussion

An invitation letter to comment was sent





Sub District Head ( Camat Peranap )

NGOs: AMAN (Aliansi Masyarakat Adat Nasional),

GAPKI, Sawit Watch, WWF, Lentera Rakyat and

Walhi Sumatera Utara

District Head ( Bupati Kabupaten Indragiri Hulu )

Group discussion

Group discussion




2.5 Date of next surveillance visit

The next surveillance visit will be 9-12 months from the initial audit.

3.0 AUDIT FINDINGS

3.1 Action taken on previous audit issues

This is initial certification; there were no previous audit findings.

3.2 Claim and use of certification mark and or logo

This is initial certification, no claim and use of RSPO certification mark and or logo.


Audit Report

3.3 Description of audit findings

3.3.1 RSPO Principle and Criteria, Indonesian National Interpretation

PRINCIPLES 1: COMMITMENT TO TRANSPARENCY

REF

1.1

CRITERION AND INDICATORS Reference Department in Charge

Audit Findings Status

Oil palm growers and millers provide adequate information to other stakeholders on environmental, social and legal issues relevant to RSPO Criteria, in appropriate languages & forms to allow for effective participation in decision making.

1.1.1 major

Are there any records of information requests?

Information response logbook

General

Administration

(KTU)

Information requests were registered in Logbook permintaan dan tanggapan terhadap permintaan informasi (information response logbook) such as: farm survey 2013 from BPS (National Statistics

Bureau), monitoring of minimum wages implementation from Jamsostek, job apprenticeship from vocational school (SMKN1 Paranap).

Compliant

1.1.2 major

Are there any records of responses to information requests?

Outgoing mails and mailing register/ logbook, environmental inspection records

General

Administration

(KTU)

Records of responses to those information requests were maintained and traceable. Outgoing mails were also registered in a logbook to response following requests such as: manpower statistics January-June

2013, response to apprenticeship request from vocational school SMKN1 Pasir Penyu, response to

BPS survey 2012, etc.

Compliant

1.1.3 major

Does records of information requests from stakeholders, and the responses given, be kept for a period determined in the applicable regulations and taking into account their relative importance?

SOP AA-GL-5008.1-

R1

General

Administration

(KTU)

Records were kept and retained for 3 years as described in procedure “penanganan permintaan informasi stakeholder” (stakeholder information request handling)

Compliant

Guidance Growers and millers should respond constructively and promptly to request for information from stakeholders. See criterion 1.2 for requirements relating to publicly available documentation. See also criterion 6.2 relating to consultation.


Audit Report

REF

1.2

1.2.1 major

1.2.2 major



Management documents are publicly available, except where this is prevented by commercial confidentiality or where disclosure of information would result in negative environmental or social outcomes.

Are management documents available and publicly available?

Note:

Information request and responses shall include any relevant or required documentation, in accordance with applicable national laws, such as:



Legal:

Land titles/user rights (Site Permit (Izin

Lokasi)), plantation operation permit (Ijin

Usaha Perkebunan), land use title (Hak

Guna Usaha) or other documentation related to application for Land Use Title in accordance with relevant procedures.



Environmental:

Environmental and social impact assessment (AMDAL/UKL-UPL) and related monitoring reports (RKL-RPL).



Social:

- Documentation of social activities of social and community programs.

- Health and Safety Plan

- Continuous improvement plan

- Logbook & list of information request and responses 2013

- Site Permit (

Lokasi ) &

Plantation

Perkebunan

Izin

Operation Permit :

SPUP ( Surat

Pendaftaran Usaha

)

General

Administration

(KTU)

List of information that publicly available was established where most of information/ records were sent to interested parties (stakeholders) in periodic basis in order to comply with current regulation such as:

Legal:

Copies of land use title (HGU) and licenses (Izin

Lokasi, Izin Usaha Perkebunan),

Environmental:

Management Document (AMDAL), environmental management and monitoring reports (‘laporan

RKL/RPL’), Monthly land application activity report, 3 monthly hazardous waste management report, biannually air quality inspection report, bi-annually

PUP report (plantation business progress), company organization structure, high conservation value

(HCV) reports and management plans,

Social:

Social impact assessment (SIA) report, CSR planning and report, health and safety plan, continuous improvement plan, etc.

Compliant

Are records of information requests from stakeholders, and the responses given, kept for a period determined in the applicable regulations and taking into account their relative importance?

-

-

Letters from stakeholder,

SOP AA-GL-

5008.1-R1

General

Administration

(KTU)

All records were retained for 3 years as defined in a procedure

Compliant

Guidance Examples of commercially confidential information include financial data such as costs and income, and details relating to customers and/or suppliers. Data that affects personal privacy should also be confidential. Examples of information where disclosure could result in potential negative environmental or social outcomes include information on sites of rare species where disclosure could increase the risk of hunting or capture for trade, or sacred sites which a community wishes to maintain as private.


Audit Report

PRINCIPLES 2: COMPLIANCE WITH APPLICABLE LAWS AND REGULATIONS

Ref.

CRITERION AND INDICATORS Reference Department in

Charge

2.1

2.1.1 major

Audit Findings

There is compliance with all applicable local, national and ratified international laws and regulations.

Is there evidence of compliance with laws and regulations, which concern the operation of oil palm plantations?



List of regulation compliance



Procedure.AA-GL-

5001.1-R0

(Compliance to regulations and its change)



Regulations compliance evaluation form

(Reviewed 25

October 2013)





Sustainability

Sub

Department

General

Administration

(KTU)



General

Administration

(KTU) and/or

Public relations

(HUMAS)

Evidence of compliance with applicable local, national and ratified international laws and regulations of Peranap Mill and Estate have been provided, including

- valid permits: waste water discharge permit, river water and ground water abstraction permits, hazardous waste storage permit, boiler and pressurised vessel permits, lifting equipment, personnel who conducted lifting equipment, electrical

- provision of required infrastructure waste water treatment ponds, hazardous waste storage, availability of MSDS,

- environmental: periodic environmental parameter monitoring

(stationary emission, ambient emission and ambient noise, moving source emission, waste water discharge quality, and ground water quality),

- system of plant cultivation, oil palm plantation, - list of flora and fauna protected,

- management of guard area,

- paramedic and company doctor, medical check-up, safety committee,

- minimum wage, labour law, occupational safety, employee social benefit.

- transport and lifting equipment,

Further, in the estate, other evidence that the company complies with relevant legal

Status

Major NCR

2014-02

(Closed)


Audit Report

Ref.


Charge

Audit Findings Status requirements was implementation of tax payments (PPH Pasal 21) in 2013 which was paid on August 2013. The records were sighted for period October 2013.

Status of compliance with laws and regulations were evaluated, and evaluation of compliance result indicated that compliance status was justified with reference to the objective evidence of compliance. Evaluation of compliance result indicated that compliance status was justified with reference to the objective evidence of compliance. Example: employment agreement, social security, training programs, employment list, CSR program and its implementation, list of employees, payroll and over time calculations, menstruation leave, result of environmental monitoring and measurement, hazardous waste manifest, etc.

However there were several regulations especially for Health & Safety regulations issued by Ministry of Manpower were not yet updated such as: Permenaker No1/1981 occupational disease reporting , Permen No.25

/2008 Occupational disease diagnose and

Kepmen No. 609/2012 regarding accident, etc were not available yet.

Major Nonconformities: a. Compliance with several laws and regulations have not been evaluated, e.g.


Audit Report

Ref.


Charge


2.1.2 major

Is there evidence of efforts made to comply with changes in the regulations?





List of regulation compliance,

Permentan

98/2013.

Procedure.AA-GL-





Sustainability

Sub

Department

General

Administration

- PP 81/2012 (Pengelolaan sampah rumah tangga dan sejenisnya),

- Per.Men LH 21/2008 (Baku Mutu Emisi

Sumber tidak bergerak),

- Per.Menkes 416/1990, Permenaker

No.25/2008 (Diagnosis PAK),

- KepMenaker No.609/2012 (Pedoman

Penyelesaian kasus kecelakaan kerja dan PAK).

- Per.Gub Riau No. 35/2007 (Limbah cair) b. Based on the latest resume medical check-up of audiometry test it was noted

16 mill employees and 34 estate employees were not in normal condition

(hearing losses) also based on spirometer it was noted 22 estate employees had lungs restriction, however there was no further investigation (anamneses and diagnoses) from the medical doctor which is required by Permenaker No.2/1980 article 3 point 6. c. Some workers have not been covered by national insurance program (Jamsostek) as required by Kepmenakertrans no.150/1999, e.g. some PHL workers (81 harvesters and 62 people in maintenance work)

Established procedure was described mechanism for updating latest laws and regulations and requires regular access to regulatory bodies to update information of laws and regulations. Update and compliance review against change of law and regulation

Compliant


Audit Report

Ref.

2.1.1 minor

CRITERION AND INDICATORS

Is there a documented system, which includes written information on legal requirements that the palm oil company should comply with?



Reference

5001.1-R0




Regulations

 compliance evaluation form

(Reviewed 25

October 2013)

Memorandum

No.017/GL-

AAS/MEMO/10/12

Procedure.AA-GL-

5001.1-R0





(Reviewed 25

October 2013)





Department in

Charge

(KTU) and/or

Public relations

(HUMAS)

Sustainability

Sub

Department

KTU

Audit Findings was conducted annually. Organization has reviewed and updated the regulation in

October 2013.

Evaluation against regulation was performed annually. The last evaluation was performed on th

25 October 2013 to all applicable law listed in

“evaluasi kepatuhan hukum” (list of regulation compliance). For instance, the newest regulation was Permentan no.98/ 2013.

Awareness to this regulation was sent through email (10 th

October 2013) to respective people in the form of “matriks sosialiasi permentan

98/2013” to identify key points in the regulation.

Memorandum (No.017/GL-AAS/MEMO/10/12) defined that it is the responsibilities of General

Administration (KTU) and/or Public Relation

(HUMAS) to conduct visits to the local government offices (PEMDA) in order to update new regulations published and/or changes within existing regulation, the records were sighted of “work visit verification” to the local government of Peranap dated January 2013.

Valid applicable laws and regulations were registered including detail requirement applied.

Updating of law and regulations change activities were well documented and last update was performed in May 2013. Updating of regulation in October 2012 was sighted.

Information on applicable legal and other requirements have been reviewed and summarised.

A list of “evaluasi kepatuhan hukum” has been

Status

Compliant


Audit Report

Ref.


Charge


2.1.2 minor

Is there a mechanism for ensuring that compliance with relevant legal requirements is implemented?



SOP AA-GL-

5001.1-R0



Procedure.AA-GL-

5001.1-R0





(Reviewed 25

October 2013)



Sustainability

Sub

Department



General

Administration

(KTU) created to demonstrate compliance against law

& regulation that includes environment, safety, legal and labour aspects. E.g. compliance against UU no.13/2003 (labour regulation),

Permentan PER/01/MEN/1982, UU no.1/1970

(safety regulation for workers).

There were valid documented forms and procedures to describe the evaluation of regulation and periodically reviewed, such as:



Procedure.AA-GL-5001.1-R0 (Compliance of regulations evaluations).




(Reviewed in October 2013).

Mechanism for ensuring compliance with all applicable local, national and ratified international laws and regulations were described in procedure. Evaluation of compliance with regulation was conducted by

Sustainability Sub Department and Mill and

Estate Manager.

A documented procedure has been established to describe method to identify new / revised law

& regulation including awareness and implementation of those laws within the company.

As defined within the procedure No. AA-GL-

5001.1-R0 that the mechanism for ensuring compliance with all applicable local, national and ratified international laws and regulations were described in procedure. Evaluation of compliance with regulation was conducted by

Compliant


Audit Report

Ref.

Guidance


Charge


Sustainability Sub Department administration officer (KTU). and

Identifying inconsistencies between national, regional and local regulations.

Implementing all legal requirements is an essential baseline requirement for all growers whatever their location or size.

Relevant legislation includes, but is not limited to, regulations governing land tenure and land-use rights (including customary rights), labour, agricultural practices (e.g. chemical use), environment

(e.g. wildlife laws, pollution, environmental management and forestry laws), storage, transportation and processing practices

. It also includes laws made pursuant to a country’s obligations under international laws or conventions (e.g. the Convention on Biodiversity, CBD). Furthermore where countries have provisions to respect customary law, these must be taken into account.

For small-scale produces the focus should be on the grower having adequate knowledge of the main legal requirements and implementing them.

Key international laws and conventions are set out in Annex List of Related Laws and Regulations

2.2

2.2.1 major

The right to use land can be demonstrated, and is not legitimately contested by local communities with demonstrable rights.

Are there documents showing ownership or lease of the land in accordance with relevant laws?



Decree of the

State Minister of

Agrarian Affairs /

Head of National

Land Agency No.

18/HGU/

BPN/2000 dated

27 April 2000 and

Land use title permit: HGU No.

3 issued on 21

June 2000, valid to 24 June 2035.

Total area:

5,214.242 Ha, located in Pauh

Ranap Village,

Peranap Sub

District, Indragiri

Hulu District, Riau

Province

Head of administration

KTU

–

Copy of land title (HGU) of Rigunas Agri

Utama was sighted and legally owned by the company. Copy of land use title was available and well maintained in the office of Peranap

Estate, while the original one was kept in the regional Office Pekanbaru. Land use title mentioned that the land was located at Pauh

Ranap Village, Peranap Sub District, Indragiri

Hulu District, Riau Province.

Site Permit (Izin Lokasi) issued as indicated in

Decree of the Governor / Head of the Provincial

Riau, No. KPTS.78/IL-VI/1992 dated 24 th

Rigunas Agri Utama, area of ± 12,857 ha.

June

1992, concerning: Site Permit and Acquisition /

Purchase of Land in the Sub District Pasir

Penyu and Peranap, District Indragiri Hulu for

Oil Palm Program PIR-TRANS, on behalf of PT.

Approval of providing land from Governor of

Riau No. 525.26/PPD/418 dated 13 February

1984. And Riau Governor's letter No.525 /

BKPMD /2295 dated August 2, 1988, concerning: Allocation forest areas for plantation of PT. Agri Rigunas Utama, area of ±

Compliant


Audit Report

Ref.


Charge


39,000 ha, with the following provisions:

1. Area of ± 27,500 ha is conversions production forest.

2. Covering an area of ± 11,500 ha a production forest by the exchange area of forest conversions, in accordance with the decree of the Governor of Riau dated 2 nd

August 1988 No.

Kpts381/VIII/1988.

Ministry of Forestry Decree no. 690/Kpts-II/92;

Date 9 th

July 1992, concerning: The release of most the forest area which is located in Forest

S.Serangge, Districts/DT II Indragiri Hulu, Riau

Province, covering an area of 28,717.5 ha

Plantation Operation Permit / Surat Pendaftaran

Usaha Perkebunan (SPUP) No. HK.350/94 /

Dj.Bun.5/II/2002 dated 28 th

February 2002, with details:

Company

Plant Type

: PT. Rigunas Agri Utama

: Palm Oil

Site : Sub District Peranap and

Kelayang, District Indaragiri Hulu, Riau

Province

Area : 5,215.242 Ha

Processing : 1 unit of palm oil mill

Licensed Capacity

Installed capacity

: 60 tons FFB / hour

: 30 tons FFB / hour


Audit Report

Ref.


Charge


Plantation Business Assessment (Penilaian

Usaha Perkebunan (PUP)); Class II, based on the Decree of the Governor of Riau No.

Kpts.848/VIII/2011, dated 1 st

August 2011

The plantation has a land rights area of

5,215.242 ha, by Decree of the Head of

National Land Agency (Badan Pertanahan

Nasional), No.18/HGU/ BPN/2000, dated 27 th

April 2000 and Land Title (HGU) No. 03; Ranap

Pauh village, Sub District: Peranap and

Kelayang, District Indragiri Hulu, Riau Province, dated 21 st

June 2000 and Letter of

Measurement No. 01/Inhu/2000, areas

5,215.242 Ha, valid until 24 th

June 2035.

Building Permit (IMB):

1. No. 28/IMB/2000, 7 th

September 2000, from District Head Level II Indragiri Hulu, to establish a new building workshop, warehouse and Palm Oil Mill, no permanent construction with the size of the building area is 9,404 m

2

, located in the

Semelinang Tebing Village, District

Peranap. Built on Land Certificate No.

HGU. 03, dated June 21 st

2000.

2. Building Permit (IMB) No. 93/BPMD &

PPT/BP-IMB/IV/2013, dated 10 April 2013 from Head of the Regency Investment

Board (KBPMD). Construction of permanent buildings with a total area of

24,857 m

2

: afdeling office, plasma office, employee housing, mess , polyclinic,


Audit Report

Ref.


Charge

Audit Findings Status warehouse, sport hall, canteen, baby care, traction / workshop, security post, generator room and parking area.

2.2.2 major

Is there evidence that legal boundaries are clearly demarcated and visibly maintained?



Area

Measurements by

BPN, measurement certificate no.

01/Inhu/2000 and

Situation Map

No.12/1997 dated

1 August 1997 with scale 1 :

40,000.



BPN peg maintenance program and report (check list)

Head of administration

KTU

–

Area has been measured by BPN, measurement certificate no. 01/Inhu/2000, and recorded on the Situation Map / HGU map with a scale of 1: 40,000, dated 01/08/1997, no.

12/1997.

Legal boundaries marker were sighted during the audit and maintained along the perimeters of estate lands which were mapped with Global

Positioning System (GPS).

Field observation was conducted to pegs number:

- Peg HGU No. : S:05060 (0º 35.380' N and

102º 02.481' E), Block A 96 B

- Peg HGU 45 (0º 38.049' N and 102º

02.506' E), block C93F

- Peg HGU 26 (0º 35.641' N and 102º

04.171' E), block B96F

Major Non Conformities:



Map of HGU pegs was not entirely equipped with BPN numbering and coordinate and peg conditions was poorly maintained.



Records / documents such as map of BPN pegs, list of BPN pegs with its coordinates and maintenance of pegs (legal boundaries) cannot be shown during the

Major NCR

2014-03

(Closed)


Audit Report

Ref.

2.2.3 major

2.2.1 minor

2.2.2 minor

Guidance


Charge


Where there are, or have been disputes – are there proof of resolution or progress towards resolution processes acceptable to all parties are implemented?

KTU/legal audit.

No disputes found referring to public consultation result under “interview summary” page.

Compliant

Is there evidence of land acquisition resolution with free prior and informed consent?

Pact of agreement KTU/legal Land acquisition from local communities has been performed through prior and informed consent as recorded in "surat persetujuan bersama” (pact of agreement). No force has been applied (free), informed consent were given to the previous owner.

Compliant

Is there a mechanism to resolve conflict which is accepted by all parties?

SOP AA-GL-5003.1-

R1

KTU/legal No land conflict identified (refer to result of public consultation) but a procedure has been established to describe conflict mechanism.

Compliant









Where there is a conflict on the condition of land use as per land title, growers should show evidence that necessary action has been taken to resolve the conflict with relevant parties.

For any conflict or disputes over the land, the extent of the disputed area should be mapped out in participatory way.

Ensure a mechanism to solve the conflict (Criteria 6.3 and 6.4).

All operations should cease on land planted beyond the legal boundary.

Any customary land use rights or disputes which are likely to be relevant should be identified.

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

2.3.1 major

2.3.2 major

Are there records of any negotiated agreements between traditional owners of land and plantation companies (if any), supplemented with maps in appropriate scale?

Are there maps of an appropriate scale showing extent of recognised customary rights?

N/A

N/A

Estate

Estate

Based on Social Impact Assessment and public consultation there were no customary rights in the land.

Based on Social Impact Assessment and public consultation there were no customary rights in the land.

Not applicable

Not applicable


Audit Report

Ref.

2.3.3 major

Guidance


Charge


Are there copies of negotiated agreements detailing process of consent?

N/A Estate Based on Social Impact Assessment and public consultation there were no customary rights in the land.

Not applicable

Where lands area encumbered by legal or customary fights, the grower must demonstrate that these rights are understood and are not being threatened or reduced. This criterion should be considered in conjunction with criteria 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 benefits and/or relinquished 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 benefit sharing and legal arrangements. Communities must be permitted to seek legal counsel if 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 decision-making and iterative negotiations allowed for, where requested. Negotiated agreements should be binding on all parties and enforceable in the courts. Establishing certainty in land negotiations is of long-term benefit for all parties.

For definition of “customary rights”, see definitions.

PRINCIPLES 3: COMMITMENT TO LONG-TERM ECONOMIC AND FINANCIAL VIABILITY

Ref. CRITERION AND INDICATORS Reference Department in Charge

3.1

3.1.1 major

Audit Findings

There is an implemented management plan that aims to achieve long-term economic and financial viability.

Is there a documented working plan of minimum of 3 years period?

Note: documented working plan shall include plan for new acquisition which have not replaced primary forests or HCVs to comply with RSPO requirements.







Mill Projection

2014

2014

– 2017

Management Plan

– 2016

Mill Operation

Summary 2013





Regional

Office

Estate and Head

Office

Management plan during the three-years period 2014

- 2016 was used to achieve economic viability and long-term financial. The plan was approved by the top management. The parameters listed in the management plan which includes revenue and earnings, projected crop production (FFB yield trend), the extraction rate of CPO and PK (Production forecast up to 2017), harvesting, processing FFB and

CPO. The achievement of the management plan is reviewed every month in the Estate Unit Report (LUK) and Mill Unit Report (LUP) according to the current month. Reviewing of LUK and LUP was conducted

Status

Compliant


Audit Report


Audit Findings Status for period 2013.

3.1.1 minor

Is there annual replanting programme, where applicable, projected for a minimum of 5 years with yearly review?

Replanting Plan Year

2018 – 2023 PT

Rigunas Agri Utama

Estate and

Head Office

Replanting Program was available for Year 2018 -

2023 the total area of 3,658 ha.

Compliant

Guidance Whilst it is recognised that long-term profitability is also affected by factors outside their direct control, top management must be able to demonstrate attention to economic and financial viability through long-term management planning.

The business or management plan may contain:









Attention to quality of planting materials

Crop projection = FFB yield trends

Mill extraction rates = OER trends





Cost of Production = cost per tonne of CPO trends.

Forecast prices.

Financial indicators.



Suggested calculation

– trends in 3-year running mean over the last decade (FFB trends may need to allow for low yield during major replanting programmes).

Growers should have a system to improve practices in line with new information and techniques.

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



4.1

4.1.1 major

Operating procedure are appropriately documented and consistently implemented and monitored

Are there Standard Operating Procedures

(SOPs) for estates, from land clearing to harvesting?



"Agriculture Policy

Manual" dated 1

February 2013

Estate The documented Standard Operating Procedures

(SOP) for Estate was evident:



AA-APM-OP-1100.01-R1 Nursery



AA-APM-OP-1100.02-R1 Land Preparation



AA-APM-OP-1100.03-R1 Creation and

Maintenance of Road



AA-APM-OP-1100.04-R1 Creation and

Compliant


Audit Report



Maintenance Trenches



AA-APM-OP-1100.05-R1 Soil and Water

Conservation



AA-APM-OP-1100.06-R1 Planting Leguminous

Cover Crop



AA-APM-OP-1100.07-R1 Oil Palm Planting



AA-APM-OP-1100.09-R1 Manuring



SOPs for IPM: o AA-APM-OP-1100.10-R1 Pest &

Diseases Control o AA-APM-OP-1100.08-R1 Weeding

Control o AA-APM-OP-1100.14-R1 Census and

Identification Plant



AA-APM-OP-1100.11-R1 Management

Pesticides



AA-APM-OP-1100.12-R1 Castration



AA-APM-OP-1100.13-R1 Pruning



AA-APM-OP-1100.15-R1 Census of Production



AA-APM-OP-1100.16-R1 Consolidation



AA-APM-OP-1100.17-R0 Water Management



AA-APM-OP-1100.18-R1 FFB Harvesting



AA-APM-OP-1100.19-R1 Transportation

Management



AA-APM-OP-1100.20-R1 Replanting

The documented procedures regarding processing

4.1.2

Are there Standard Operating Procedures 

Mill Policy Manual

Mill Manager Compliant


Audit Report


& Staff

Audit Findings Status major

(SOPs) for mills, from reception of FFB to dispatch of CPO and PK? activities of palm oil were already described within the “Mill Policy Manual” (MPM) document which was approved by Operations Director. The manual consisted of each processing station starting from

FFB (Fresh Fruit Bunch) receiver until the CPO delivery and also includes the procedure of machineries preventive maintenance, utilities and quality control.

Generally the procedures that currently existing are within the revision 01 (code R1) that was officially published in 2009, except for several procedures for mills were already on revision-2 (code R2). Herewith the procedures consists within the MPM such as:



AA-MPM-OP-1400.02-R2 FFB Receiver

Procedure



AA-MPM-OP-1400.03-R1 Sterilizer station

Procedure



AA-MPM-OP-1400.04-R1 Threshing station

Procedure



AA-MPM-OP-1400.05-R1 Digesting and Screw

Press station Procedure



AA-MPM-OP-1400.06-R1 Clarifier station

Procedure



AA-MPM-OP-1400.07-R1 Nut Polishing

Procedure



AA-MPM-OP-1400.08-R1 Kernel station

Procedure



AA-MPM-OP-1400.11-R1 Water Treatment

Procedure



AA-MPM-OP-1400.12-R1 Laboratory Procedure



AA-MPM-OP-1400.14-R2 Storage and delivery


Audit Report

Status Ref. CRITERION AND INDICATORS Reference Department in Charge

Audit Findings

Procedure



AA-MPM-OP-1400.15-R1 Preventive machineries maintenance Procedure



AA-MPM-OP-14000.13-R1 – WWTP Process

4.1.1 minor

Are there records of at least annual checking and monitoring of operations?

- Special Visit

Report No. KPN-

SVR03-2013 date of visit 10-12

December 2013

- Mill Operation

Summary 2013

- Crop & Production

- Mill Utilisation

- Mill Operation

Summary (MOS)

YTD December

2013

-

- Estate,

Mill and

-

Regional

Office

Head

Office

Mill

Manager

A special visit was made by VA (Visit Agronomy) personnel from Regional Office to the Estate and VM

(Visit Mill) personnel to the mill primarily to identify main problems, review the actual criteria and standards of harvesting practised by the Estate with a view to provide solution to reduce crop losses, improve production and OER. Items checked were weeding, manuring, pest and diseases, pruning and drainage.

Item

Production FFB in 2013

UOM

Budgeting

Up to This

Month

Realization

Up to This

Month

%

Compliant

Acception of FFB

Nucleus Estate

Plasma

Outer Estate

Sub Total

Potongan/Sortasi

CPO Production

Nucleus Estate

Plasma

Outer Estate

Sub Total

Palm Kernel

Nucleus Estate

Plasma

Outer Estate

Kg

Kg

Kg

Kg

Kg

Kg

Kg

Kg

Kg

Kg

Kg

Kg

107,754,998

103,932,000

49,999,999

261,686,997

25,591,813

23,336,388

9,550,000

58,478,201

5,980,403

5,766,561

2,775,000

97,300,770

95,823,250

37,228,580

230,352,600

6,907,320

21,999,068

20,487,518

6,814,644

49,301,230

5,195,781

5,101,767

1,994,242

90.30%

92.20%

74.46%

88.03%

3.00%

85.96%

87.79%

71.36%

84.31%

86.88%

88.47%

71.86%


Audit Report



Sub Total 14,521,964

Annual

Target

12,291,790 84.64%

Rendemen CPO

Nucleus Estate

Plasma

Outer Estate

Rendemen Palm

Kernel

Nucleus Estate

Plasma

Outer Estate

%

%

%

%

%

%

23.75%

22.45%

19.10%

5.55%

5.55%

5.55%

22.61%

21.38%

18.30%

5.34%

5.32%

5.36%

95.20%

95.22%

95.84%

96.21%

95.96%

96.52%

It was noted that each mill unit also Peranap mill has

“Mills Operation Summary” (MOS) which is updated monthly and also summarized in to year to date rated within a year. MOS was a report that consists of regarding quantity and quality of received FFB, mill capacity utilization, CPO and kernel extraction, quality, stock and delivery and also process control, oil losses at each station, utility report (water and boiler), waste quality and also operational budgeting report.

The summary tabulation of production realization and target at Peranap mill within 2013 includes FFB from centre estate also third party (within a tonnage, except OER and KER are %):

Realization (2013)

Total Processed

FFB

CPO Product

Kernel Production

OER

261.657

58.478

14.522

22.35

230.353

49.301

12.290

21.40*)


Audit Report


Audit Findings

KER

5.55

*) OER total including FFB from outgrower

**) KER total including FFB from outgrower

(22.63

–own estate)

5.34 **)

(5.33

– own estate)

4.1.2 minor

Are there records of operational results? 





Daily work plan

(RKH = Rencana

Kerja Harian)

BKM (Buku Kerja

Mandor)



LUK (Laporan

Unit Kebun)



Daily Report of each processing station



Daily Laboratory

Report



Laporan Harian

Pabrik (LHP)

LUP (Laporan

Unit Pabrik



Mill Operation

Summary (MOS)

Mill and

Estate

Inspection and Monitoring of Plantation Operation

Head of Assistant and Field Assistant Division inspected and monitored the activities at the site on a regular basis. In daily activities Estate Foreman made Daily Work Plan (RKH: Rencana Kerja

Harian), then further was noted that the realization of the activities was recorded in the Log book of group leader activity (BKM: Buku Kerja Mandor), which contains a record of the type of activity

(maintenance/weeding, harvesting, census, spraying etc.), number of employees, number of agrochemical used, the amount of output and activity location (block).

Checking of harvesting activities was conducted by the harvest foremen and foremen-I. Harvest foremen recorded the inspection harvest (Monitoring Ancak

Panen), inspection items: preparing the midrib, ripe fruit was not harvested, the fruit lagged (not harvested) and cut raw fruit. The examination and transport of FFB were performed by Adm. Harvest

(Kerani Panen), inspection items: FFB maturity and loss of fruits ( berondolan ) including cutting the fruit stalk (V = mouth frog system) and recorded in the form of transport and the quality of the fruit (FFB

Transports form).

Estate unit report summarised the Estate activity, performance and product on each month.

Compliant


Audit Report



Inspection and Monitoring of Mill Operation

It was observed during the audit that the records were reviewed in accordance to the processing control demonstration were in good implementation based on procedure defined, such as:

The received FFB weight records were sighted and demonstrated as defined within the procedure. The mill has two weighbridges, each has a capacity of

50,000 Kg and also already calibrated by Metrology

Body the Ministry of Industrial. The certificates of

Tare were available at the mill and still valid until 4 th

October 2014.

The records of FFB receiving were sighted during the audit (several records within a period of

November 2013) which showed that the defined procedure and rules were implemented accordingly.

FFB sortation / grading was performed to control the quality of FFB that went into Peranap Mill.

Records of sterilizer station showed that the implementation of sterilizing was conducted according to defined procedure. Sterilized process was conducted on three stages (peak) with total time were 75 minutes. Every peak has different pressure between 5 kgf/cm pressure 2 kgf/cm

2

2

which starts at peak-1 with

(28,44 psi) and ended at peak-3 with pressure 2.8-3.0 kgf/cm

2

(39,82-42,66 psi).

Every stage of peak was recorded into the graphic paper and daily log book of sterilizer station operator.

The digesting and pressing process were reviewed during the audit and showed that the processes were conducted according to the defined procedure


Audit Report


Audit Findings Status that the temperature of processing shall be at least

95°C. The records were sighted at daily log book pressing station operators.

The records of clarification station process were conducted according to the defined procedure such as vacuum drier and temperature were established within the range of -0,7 until -0,8 cmHg and 80-85

Celsius. The temperature within the tanks CST 95

Celsius and COT 95 Celsius. The records were sighted at daily log book clarification station operators.

The records of quality control inspection at each process were filled in to “Daily Report Laboratory”; include the testing of water quality usage as utility support material.

Generally the processing at kernel station was controlled as required within the procedure such as the silo temperatures were established within a range 70-80 Celsius.

The preventive maintenance for processing machineries were conducted based on the schedule established for weekly, monthly, and annually also based on operating hours. The results for maintenance were recorded in the log book of each machine.

The calibration of measuring equipment was conducted both internally and externally. Regarding the internal calibration, the results of each calibration were recorded within the calibration reports which consist of equipment type, standard and result of calibration. Several equipment calibration reports for internal were sighted such as for temperature indicators equipment, weighing and pH meter at


Audit Report

Ref.

4.2

4.2.1 minor


Audit Findings laboratory. Regarding external calibration was conducted by third party (PT Multiganda Scoteknik), such as for pressure gauge equipment which was last conducted on period of 2013.

Practices to maintain soil fertility at, or where possible improve soil fertility to, a level that ensures optimal and sustained yield.

Are there records of regular soil, leaf, and visual analysis?



Leaf Sampling

Unit - Leaf Nutrient

Analysis of

Peranap Estate year 2013

Research &

Development

Analytical

Laboratory

Leaf sample analysis as a basis for fertilizer recommendations in 2014 has been carried out in

June 2013. Leaf samples were taken on 22 nd – 23 rd

Mei 2013 (Ref no. 053/INT/RAU-R&D/MEI/L/12) and sent to the Research and Development Centre PT.

Nusa Pusaka Kencana Analytical & QC Laboratory, to obtain analysis recommendations. results and fertilizer

Diagnosis/leaf visual observations was done by considering the following criteria:



Comparison of green leaf with standard green colour (dark green).



The signs and symptoms (symptom) of nutrient deficiency.



Symptoms of pests and plant diseases.

The result of this visual monitoring was conducted by

R & D Centre and the monitoring results were reported in the leaf samples and submitted to the

Estate Manager. Visual monitoring is more regular performed by foremen and field assistant, with standard procedures based on Nutrient deficiency

(symptoms), but it can also be a symptom of pest attack. Report included observation result and its recommendation for improvement.

Status

Compliant


Audit Report

Ref.

4.2.2 minor


Are there records of efforts to maintain and increase soil fertility (through use of fertiliser, planting of legume cover crops, compost, and land applications of POME or EFB) based on the result of analysis carried out as in point 4.2.1 minor above?



Reference

Manuring Program

Year 2013 and

2014

 Fertilizer Program and Realization period in 2013

Department in Charge

Manuring

Programs &

Research

Audit Findings

Programme and Realisation of Fertilizer for year

2013 in Peranap Estate

Type

Fertilizer

Fertilization (Kg)

Recommenda tion Realisation

1,592,272 1,576,300

%

99.00%

ZA

Rock

Phosphate

MOP

Kieserite

Dolomite

HGFB

Empty Bunch

(EFB)

POME (M

3

)

376,437

576,641

45,797

756,261

23,366

45,397,595

227,456

372,350

774,700

45,800

748,350

23,200

134.35%

100.01%

98.95%

99.29%

35,551,516 78.31%

145,945

98.91%

64.16%

Status

Compliant

Guidance Long term fertility depends on maintaining the structure, organic matter content, nutrient status and microbiological health of the soil. Managers should ensure that best agricultural practice is followed. Nutrient efficiency must take account of the age of plantations and soil conditions.

4.3

4.3.1 minor

4.3.2 minor

Practices minimise and control erosion and degradation of soils.

Are there maps of fragile soils?



Topographic Map,

Slope Class Maps and Map Soil Type and Slope Class

Map scale 1:

40,000

Is a management strategy exists for plantings on slopes above a certain limit

(needs to be soil and climate specific)?





SOP Land

Preparation (AA-

APM-OP-

1100.02-R1)

Consolidation

Estate

Estate

There were no areas with fragile soils in Peranap

Estate based on Map of Soil Type (Asian Agri

Research and Development Centre Tebing Tinggi –

Sumatera Utara, October 2012)

The organisation has management strategy for planting on slopes above certain limit, as referred to company’s SOP and work instructions. The work instruction AA-APM-OP-1100.05-R1 described preparation for planting including planting on slopes area has been developed by organisation:

Compliant

Compliant


Audit Report



(AA-APM-OP-

1100.16-R1)



Soil and Water

Conservation (AA-

APM-OP-

1100.05-R1)

- Flat undulating 0 o – 5 o

- Rolling 6 o

- 12 o

- Hilly 13 o

- 20 o

- Steep >20 o

System for planting on slopes area was provided through terracing, levelling of terrace, planting legume cover crops and determining of planting space .

Site observation indicated that practices to control and minimize erosion have been applied by :



Terracing



Making the catchment where runoff water, called:

“Tapak Kuda”.



Making the catchment where runoff water, called

“Rorak” .



Planting legume cover crop.

4.3.3 minor

Is a road maintenance program available?

Road maintenance plan years 2013 -

2014

Estate Office

& Head of administration

– KTU

Road maintenance was done mechanically, based on the the road maintenance plan map in 2013.

Road maintenance and repair activities using Motor

Grader and Compactor, planned for 566,625 meters and the realization of 231,130 meters.

Compliant

Road maintenance work plan in 2014 was also available. The plan for 2014 is 353,480 meters and uses heavy equipment for 858 Hour Meter.

Road maintenance program and its realization from

January to December 2013

- Grading

- Hardening of the road


Audit Report

Ref.

4.3.4 minor

4.3.5 minor

Guidance



 Plan on hardening the road used gravel for

33,280 meter and the realization was 12,110 meter.

 Plan hardening of the road use Krokos for 33,280 meter and the realization was 12,110 meter.

 Road maintenance plan manually 1,001,862 meters, and has been realized up to October

2013, 868,828 meters.

During field observation all main road and collection road were well maintained, although some collection roads were found slippery, but road improvement activity was sighted using heavy equipment ( grading and compacting).

Is subsidence of peat soils minimised under an effective and documented water management programme?

Map of Soil Type Unit

(Asian Agri Research and Development

Centre), January 2013

Estate The organisation has a detailed soil map showing gradients and soil types. The soil map available in

Peranap Estate, is Map of Soil Type Unit with scale

1:25,000 issued by Research & Development Centre.

Based on the map there are no peat soil in Peranap

Estate.

N/A

Is a management strategy in place for

Map of Soil Type Unit

(Asian Agri Research

Estate Based on Map of Soil type Unit, there are no areas of marginal land / fragile soil in Peranap Estate.

N/A other fragile and problem soils (e.g. sandy, low organic matter, acid sulphate soils)? and Development

Centre), January 2013

Techniques that minimise soil erosion are well-known and should be adopted, wherever appropriate. This may include practices such as ground cover management, biomass recycling, terracing, and natural regeneration or restoration instead of replanting.

For existing plantings on peat, water table should be maintained at a mean of 60cm (within a range of 50-75cm) below ground surface through a network of appropriate water control structures e.g. weirs, sandbags, etc. in fields, and Watergates at the discharge points of main drains (see also Criteria 4.4 and 7.4).

4.4

4.4.1

Practices maintain the quality and availability of surface and ground water.

Is there protection of watercourses and

Estate wetlands, including maintaining and



Restoration of

Riparian and

The Company has a procedure that prohibits the application of agrochemicals on the riparian area:

Compliant


Audit Report


Audit Findings major restoring appropriate riparian buffer zones at or before replanting?



Areas surrounding

Lakes/Reservoirs and springs (AA-

KL-12-EFP), issued on August

1 2010.

Report of analysis of river

Environmental Field Procedure on the Restoration of

Riparian and Areas surrounding Lakes/Reservoirs and Springs (AA-KL-12-EFP), issued on August 1 st

2010.

The Company has declared its HCV area of riparian to be 50 meters wide. The estate manager has followed this up with a Memorandum regarding river conservation and prohibition of agrochemicals application in the HCV areas (riparian, dyke, canal and estate boundaries), No.

RAU/MEMO/10/2012, issued on October 22

229/GMnd

2012.

This memorandum has covered the prohibition of some activities to protect and maintain the quality of water in the rivers (prohibition of agrochemicals application along the riparian area, weeding and tree root levering, disposing/discarding/throwing midrib to rivers and creeks. The document was available. For further elaboration, please see section for Criterion

5.2

Peranap Estate was traversed by Ketipo, Sengkilo,

Pelangkawan, Rotan and Indragiri Rivers. Policy of riparian buffer zone management at or before replanting was provided in related procedure.

Procedure mentioned that riparian buffer zone prohibits the application of agrochemicals on the riparian area.

The other programs for maintaining and restoring of riparian buffer zones are:



Manual upkeep of weeds controlling in 0-10 m of riparian buffer zones.



Planting bamboo and ” Ketapang ” at River and trench and planting Vertiver , Sungkai , Angsana


Audit Report


Audit Findings Status and Pohon Roda along the River.



Put permanent pegs per 200 meters and paint the tree as boundary sign.



Not dispose stem to River and trench.

The organisation has declared its HCV area of riparian to be 50 meters wide.

4.4.1 minor

Is there an implemented water management plan?





Permit of ground water abstraction from Kepala

Badan

Penanaman

Modal Daerah dan Pelayanan

Perizinan Terpadu

Kab. Indragiri

Hulu No.

7/BPMD&PPT/BP

/SIPPA-P/II/2013 dated 5 February

2013 valid for 2 years.

Mill Operational

Report (LUP)

Mill

Quality of the Rivers was checked per 6 months by external laboratory. Last measurement was conducted on 1 st

July 2013. Result of analysis mentioned that quality of the Rivers was in line with

PP 82/2001.

The main source of water for Mill activity is surface water – Ketipo river. Water Surface Permit “Surat

Izin Pengambilan dan Pemanfaatan Air (SIPPA)” issued by government agency (Kepala Badan

Penanaman Modal Daerah dan Pelayanan Perizinan

Terpadu Kabupaten Indragiri Hulu) No.

7/BPMD&PPT/BP/SIPPA-P/II/2013 dated February

5 th

2013, valid for 2 years. Flow meters were installed to monitor water usage. The organization has paid retribution to local government ( Dinas

Pendapatan Daerah Provisi Riau ). The volume of water usage is monitored monthly both for process and domestic usage. Water consumption data July –

December 2013 was sighted. The organisation has program to reduce water consumption, e.g. reduce floor cleaning using water, reuse sterilizer condensate water in clarification station, recycle water from oil cooler turbine to water basin. The company has also planted Sungkai (Peronema canescens) , Sengon (Paraserianthes falcataria) dan

Bamboo ( Bamboosa sp.) on the riparian.

Compliant


Audit Report

Ref.

4.4.2 minor


Is there monitoring of effluent BOD?

Reference

- Report of Analysis

(01/MT.1/11.21.16

5.504) dated 05

December 2013

- Analysis Report of

Waste Water

Quality (004/MI-

PPN/01/014) dated 28

December 2013

Mill



Water use report period January to November 2013, with report #072/MI-PPN/12/13 dated 6 th

December

2013.

Surface water quality is monitored in per six months basis on Ketipo river, Rotan river, Indragiri river,

Pelangkawan river, Sengkilo river, monitoring wells at Land Application area and non-Land Application area and employees drinking water source, . Surface water quality was analysed both for upstream and downstream. Monitoring was conducted by Dinas

Pekerjaan Umum UPT Pengujian Provinsi Riau and environment laboratory of Faculty of Science Riau

University. Result of surface water quality was reviewed for 2 nd

Semester of 2013 against

Government Regulation #82/2001 class II. Quality of river water was in line with Government

Regulation #82/2001 class II.

The company has conducted monitoring and analysis of BOD effluent based on KepMenLH 28/2003,

Pergubri 35/2007, SNI 06-6989.72-2009 and RKL dokumen. The test results refer to the SNI 06-

6989.72-2009. Analyses conducted by the Centre for

Laboratory Testing DISKIMPRASWIL Riau Province, waste water sampling locations were at the outlet of

Aerobic 3 ponds on November 21 st

, 2013. Results of laboratory tests for BOD was 9,673.5 mg/litre with a load of 1.64 kg/tonne and pH 6.6, whereas quality standards based on ISO 06-6989.72-2009 for BOD is

5,000 mg/litre. Average discharge during monitoring is

630 m

3

/day and production/use of materials on average during the month was 4,379 tonnes

FFB/month.

Minor

NCR 2014-04

(Closed)


Audit Report

Ref.

4.4.3 minor

Guidance


Audit Findings

Minor Non-conformities

According to Report of Analysis of mill effluent dated

5 th

December 2013, BOD value was 9,673.5 mg/l, while the standard based on KepMenLH 28/2003,

Pergubri 35/2007, SNI 06-6989.72-2009 and RKL dokumen was 5,000 mg/l.

Is there monitoring of mill water use per tonne of FFB?

- LUP (Laporan

Unit Pabrik)

- Report No.

072/MI-

PPN/12/13 dated

6 Desember

Mill Mill water use per tonne of FFB was monitored monthly. Result of monitoring of mill water use per tonne of FFB was sighted for period July –

December 2013. It was noted that mill water use per tonne of FFB period July – December 2013 was decreased being compared with budget.

2013.

Growers and millers should address the effect of their use of water and the effects of their activities on local water resources. The Water Management Plan may include:



Taking account of the efficiency of use and renewability of sources.







Ensuring that the use of water does not result in adverse impacts on other users.

Avoiding contamination of surface and ground water through run-off of soil, nutrients or chemicals, or as a result of inadequate disposal of waste including POME.

Appropriate treatment of mill effluent and regular monitoring of discharge quality, which should be in compliance with national regulations.

Status

Compliant

4.5

4.5.1 major

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

Is IPM plan documented and current?



SOP AA-APMEstate Pest and Diseases management program of oil Compliant

OP-1100.10-R1

Pest & Diseases

Control palm plantations have been prepared within the budget in 2013 and 2014.





SOP AA-APM-

OP-1100.11-R1

Management

Pesticides

Pest and diseases

The SOP describes integrated pest control

(integrated pest management/IPM) which combines various warning system (EWS) through periodically census for pests. control techniques e.g. mechanical, biological, physical and chemical, applied early


Audit Report


Audit Findings management program

Stages program “Pest and Disease Control”, are:



Visual observation (visual plant e.g. leafs or broken stems and fruit rot)



Conducting a census (to determine the distribution and level of attack)



Control (manual, biological or chemical) e.g planting of Turnera subulatta (nest of natural predator caterpillars (Ulat Api)).



Census of evaluation (to see the effect of control).

Pesticides used have been registered at the

Ministry of Agriculture Pesticide Committee.

Appropriate technical guidelines has been made for pesticide waste handling to minimize negative impacts on the environment, provided as appropriate SOPs and work instructions. Personnel who conducted IPM and pesticides spraying were well trained. Warehouse for pesticides storage was available.

4.5.1 minor

Is there monitoring extent of IPM implementation including training?



Realisation of IPM

Programme

Census

Estate

Monitoring was done by conducting a census of

Crops Pests and Diseases. The results of rats

Census in Afdeling III have been done in the period of

December 2013: Attack 0.54% (from 5% the threshold).

Pest Census Summary on caterpillars (Ulat Api) period December 2013.

Compliant

Recapitulation census on owl ( Tyto alba ) in the period

September 2013, e.g.: Afdeling III, covering an area of 978 hectares, has plugged cages: as much as 39 cages. Referring to best practices management 1


Audit Report


Audit Findings

4.5.2 minor

Is there monitoring of pesticide toxicity units (a.i. / LD50 per tonne of FFB or per hectare)?

Monitoring of

Pesticides Toxicity

Unit 2013

Estate Unit Report

(Laporan Unit Kebun /

LUK)

Estate Office

& Head of administration

– KTU &

Researches

Department cage cover 30 hectare, therefore the number of owl

( Tyto alba ) considered to be adequate.

Trainings which have been delivered were:

User Training and Paracol & Gramoxone Pesticides

Limited, dated 23 rd

of October 2012 and the certificate has been issued by the Government of Riau

Province, Fertilizer and Pesticide Control

Commission, valid for 5 (five) years since the launch

(2 nd

of January 2013).

The company has monitored and recorded pesticides use in 2011, 2012 and 2013. Usage quantity of pesticides was within the recommended levels.

Monitoring of pesticides toxicity unit LD50/tonne FFB was conducted at the end of financial year. Monitoring of pesticides toxicity unit was available for 2013. In the monitoring it was shown that the use of all pesticides was at 0.0022 gr/tonne FFB in 2013.

Compliant

Guidance Growers should apply recognised IPM techniques, incorporating cultural, biological, mechanical or physical methods to minimise use of chemicals. Native species should be used in biological control wherever possible.

4.6

4.6.1 major

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 which are categorised as World Health Organisation Type 1A or 1B, or are listed by the Stockholm or Rotterdam Conventions, growers are actively seeking to identify alternatives, and this is documented.

Is there evidence of use of only approved and registered agrochemicals permitted by the relevant authorities?



Estate Unit Report

(Laporan Unit

Kebun / LUK)

Estate The types of pesticides used by PT. Rigunas Agri

Utama, Peranap Estate were:

1. Gramoxone SL S 276, license number

RI.0101301197436, valid until 18 th

of March

2016.

Compliant

2. Metsulindo 20 WP, license number RI

01030119991484, valid until 23 rd

of June 2016.

3. Kenlon 480 EC, license number


Audit Report



RI.01030120062433, valid until June 23 rd

, 2016

4. Kenrane 288 EC, license number


of

September 2016.

5. Eagle 480 SL, license number


of January

2017

6. GARLON 480 EC, license number RI.695/9-

2008/T, valid until 6 th

of October 2013

7. Lindomin 865 SL, license number

RI.0103011989867, valid until 23 rd

of June 2016

4.6.2 major

Are there records of pesticide use

(including active ingredients used, area treated, amount applied per ha and number of applications)?



Estate Unit Report

(Laporan Unit

Kebun / LUK)

Estate Pesticides were used based on annual work programme. Activities using pesticides among others circle and path spraying, selective spraying etc.

Records of pesticides use have been recorded including active ingredient, area treated, amount applied per ha, use of selective product and rotation number of applications. Several records of pesticide used were sighted, e.g. application schedule, list of pesticide use in oil palm estate, work achievement and pesticide use, stock card of agrochemicals. The records covered date of application, quantity of pesticide use and name of sprayers. The records were sighted in estate office. It was noted that dosage applied was according to annual programme.

Compliant

4.6.3 major

Is there documentary evidence that usage of agrochemicals is appropriate for the target species, given at correct dosage and applied by trained personnel in accordance with the product label and storage instructions?



Estate Unit Report

(Laporan Unit

Kebun / LUK)

Estate Records of pesticides uses were well documented including active ingredient used, applied area and use per hectare and number of application rotation.

Dosage of pesticides use, target weed was in-line with the company Work Instruction, instruction on the label and storage instruction. It was noted that

Compliant


Audit Report


Audit Findings Status agrochemicals used were in-line with target pest, weed or disease, determined dosage, and applied by qualified person.

It was noted that agrochemicals were applied by qualified people who have received limited pesticide training. All spraying operators have been trained.

Training for all sprayers was conducted on 23 rd

of

October 2012.

4.6.4 major

Are waste material from agrochemicals including pesticides containers are properly disposed in accordance with laws and regulations?



AA-AMP-OP-

1100.11-R1 and AA-

KL-04-EFP pesticide waste handling



Hazardous waste manifest



Balance of hazardous waste

Estate All agrochemical containers were triple rinsed and then managed by licensed vendor: PT.

Elmusonsetindo Nusaindah for transporter and PT.

Indocement Tunggal Prakarsa as processor.

Hazardous waste manifests were sighted for handling of agrochemical containers on December

9 th

2013. Liquid waste from agrochemical was reused for the next spraying application.

Compliant

4.6.1 minor

Is there documentary evidence that use of chemicals categorised as World Health

Organisation Type 1A or 1B, or listed by

Stockholm or Rotterdam Conventions, and paraquat, is reduced and/or eliminated?

Weed eradication program using

Paraquat period 2011

- 2013

Estate Office

& Researches

Department

All chemicals categorised as World Health

Organisation type 1A or 1B, or listed by Stockholm or Roterdam Conventions. Paraquat which was the active ingredient of Gramoxone was still used in PT.

Rigunas Agri Utama Peranap Estate, however the organisation has set internal target to reduce paraquat use. Data of paraquat used has been provided since 2009 to 2013, as mention below:

Year

2009

Unit

Liter

Total

2.064

Compliant

2010

2011

Liter

Liter

2.033

4.877

2012 Liter 969


Audit Report


Audit Findings

4.6.2 minor

Are there records of the results of health check-up for those who apply agrochemicals?

Summary of medical check-up 8-10

October 2013 and laboratory test result by “focus” clinic.

General administration

(KTU)

2013 Liter 288

The use of Paraquat has been limited to a few species of ferns such as

Stenochlaena and

Lycopodiophyta.

The medical check-up was performed bi-annually.

The last check-up was done in 8 th

-10 th

October 2013 to all workers related to agrochemical works such as: sprayers, fertilizers, storekeeper, lab analyst, etc.

Recommendation was also communicated to respective employee.

Compliant

4.6.3 minor

Are there records showing that no work with pesticides for pregnant and breastfeeding women?

Monthly “form tes kehamilan”

(pregnancy test reports)


(KTU)

Pregnancy test was performed monthly to all female workers related to agrochemical works to prevent them working in unsafe condition. Breast feeding women are not allowed to work with agrochemical and reassigned for non-risky jobs.

Compliant

4.7

4.7.1 major

An occupational health and safety plan is documented, effectively communicated and implemented.

Is there evidence of documented

Occupational Health and Safety (OHS) policy and its implementation?



OHS Policy (dated

26 November 2012, approved by

Managing director)



MPM (Mill Policy

Manual)



APM (Agricultural

Policy Manual)



HSE Records forms:



Risk analysis



Job safety analysis

(JSA)

OHS Officer mills & estate.

Sustainable

Department

Documented policy related to occupational health & safety (OHS) was established and integrated to company policy also approved by Managing Director

(Kelvin Tio) dated November 26 objective and target, etc. th

2012 that consists of: compliance to regulations, implement and monitoring OHS management system, setting

Several documented procedures related to OHS were integrated within the MPM (Mill Policy Manual) and APM (Agricultural Policy Manual). Also there were separated OHS Procedures and records established for operational activities such as:



AA-KL-15-EFP Fire prevention for mills, offices

Major NCR

2013-05

(Closed)


Audit Report

Ref. CRITERION AND INDICATORS



HSE Procedures:



AA-KL-15-EFP

Fire prevention for mills, offices and housing



AA-KL-14-EFP

Estate emergency response procedure



AA-KL-09-EFP



Reference

Workshop safety prodecure include

Lock/Tag out

AA-KL-13-EFP

Handling pressurized gas cylinders




AA-KL-09-EFP Workshop safety procedure



AA-KL-13-EFP Handling pressurized gas



 and housing procedure cylinders

Audit Findings include Lock/Tag out

HIRARC Risk analysis

JSA Job safety analysis



AA-KL-14-EFP Estate emergency response

However there were no clear rules and/or mechanism to ensure transporter personnel

(especially the palm shell transporters; PT SDS/ PT

SK) that concerns to OHS regulation as it was observed that several transporter personnel did not use proper PPE (Personnel Protective Equipment) and climbed the trucks above 2 metres height.

Status

Implementation records were sighted for several

OHS programmes, such as: fire extinguisher inspections, hydrants maintenance checklists, resume of medical check-up include audiometry and spirometers and also workplace measurements for chemical and physical factors such as noise, vibrations, temperature and indoor air quality that comply to local government Permenaker

No.13/2011.

It has already conducted hazard identification and risk analysis within the scope of oil palm mill processes activities and agricultural estate activities as it has considered the stages of OHS risk control hierarchy such as elimination, substitution, engineering, administrative and PPE in order to OHS


Audit Report

Ref. CRITERION AND INDICATORS Status Reference Department in Charge

Audit Findings risk precautions.

Several mandatory PPE (Personnel Protective

Equipment) were available by the organization to the employees and visitors such as: helmet, safety shoes, ear plugs, ear muffs and respirators. There was also deploying of several PPE symbols at the risk areas.

There were also several working tools and machineries that utilized at mills, and estate was equipped with safety devices, such as knives covers that used by harvester and also pressure release valve at mill processing machineries.

Emergency response equipment that provided by the organization such as first aid boxes that kept by each trained harvester supervisors, several fire extinguishers at the risk areas and also it was provided central clinic and ambulance units for each estates.

Internal audit related to OHS management systems were integrated within the RSPO internal audit which conducted on 9 th – 11 th

of October 2013 by internal auditor.

Trimester reporting of OHS committee to local government (Ministry of Manpower) was periodically conducted as records were sighted for reporting period July – September 2013.

Accident reports and records were reported to head office by using formats OHS indexes, there were also separated log book of accident records at the clinic. Regarding incident investigation were conducted by using forms (AA-SOP-OP-1400.02), the records of investigation were sighted as 3 (three)


Audit Report


Audit Findings accidents happened on estate harvester.

Several tools and equipment which are regulated within the law were already certified and inspected by local government Ministry of Manpower (Disnaker

Indragiri Hulu), such as:



2 units of boiler which has pressure capacity of

23 and 24 Kg/cm

3

inspected date: April 2013;



3 units of sterilizer each with pressure capacity of

3.5 Bar; inspected date: September 2012.



1 unit compressor with pressure capacity of 150

Psi, 1 unit back pressure vessel with pressure capacity of 3.5 Bars and 1 unit steam separator with pressure capacity of 22 Bars were inspected on September 2012.



2 units of lightning rod installation, inspected date

October 2013.



2 units of diesel motor (Generator) each capacity

300 KVA and 320 KW were inspected October

2013.



Electricity installation approval with capacity 1200

KW, inspected date October 2013



1 unit steam turbine with capacity 1200 KW, inspected date October 2013.



4 units of lifting machineries, such as:

Compactor, grader, tractor and excavator at estate also backhoe loader capacity 600 Kg at mill.

As the result of inspections and testing, all equipments were summarized as safe and proper to be used.


Audit Report


Audit Findings

4.7.2 major

Are responsible person for health and safety program identified?

Are records of their regular meetings with workers to discuss health, safety and welfare issues kept?





Organisation structure of P2K3

(OHS Committee):

Decree letter

No.14/DINSOSNA

KERTRANS.04/P

2K3/X/2012;

Decree letter No.

No.13/DINSOSNA

KERTRANS.04/

P2K3/X/2012.



OHS briefings records

OHS committee

OHS Officer mills & estate

Several license certificates were also sighted for personnel who have special competencies such as:



4 personnel (SIO) for steam boilers operators and pressurized vessels



2 personnel (SIO) operators of lifting equipment



1 personnel as certified welder



1 personnel as electrical technician

Major Non conformities

Based on observation during the audit, it was sighted several personnel of transporters, especially transporters of palm shell (PT SDS/ PT SK) were not wearing PPE (helmet and shoes) while loading the palm shell at the mill area. The transporter personnel also sighted climbing the trucks (above 2 metres height) to assist the loading activity.

As per regulation by Ministry of Manpower, the organizations were complied with availability of OHS officer Mill and estate who act as OHS committee secretary at their units.

The OHS committee (P2K3) was already established at mill with amounts 14 manuals as approved by

Ministry of Manpower Indragiri Hulu with decree letter No.14 /DINSOSNAKERTRANS.04

/P2K3/X/2012; while at Peranap estate the OHS committee member amounts 50 personnel as decree letter No. No.13/DINSOSNAKERTRANS.04/ P2K3

/X/2012.

Monthly safety committee meeting was held to review the OHS programme and performance.

Records were sighted for Q1, Q2 and Q3 of 2013.

Compliant


Audit Report



4.7.1 minor

Is there provision for accident insurance for workers?

 meeting report for

Q1, Q2 and Q3 year

2013

Copies of insurance payment


(KTU)

Reports were quarterly submitted to local authority as required by local regulation.

Accident insurance was provided to workers and this also includes daily base workers, under the scheme

“Jamsostek” as required by local regulation.

Samples of workers for Mill and Estate were taken during this audit. The taken samples have been provided with accident insurance with percentage

0.89%. However not all employees were covered within the insurance as it is to be non-conformance within this audit report.

Compliant

4.7.2 minor

Is there regular health examination by a doctor for workers in stations or exposed to high-risk work?



Medical check-up report for period

October-2013

(include physical examination, laboratory, audiometry and spirometer)


(KTU)

It was evident that general medical check-up within period October 2013 was conducted as it was planned once in a year; the medical check-up was conducted by third party clinic “Focus” with package such as: physical examination and specific measurement especially for audiometry and spirometers for high risk workers at mills and estate.

As the result summary for the check-up, it was sighted that 16 personnel (from mill) and 34 personnel (from estate) were suspected to have hearing losses and also 22 personnel (from estate) were suspected to have lungs restriction and obstruction.

Compliant

However all of the suspected personnel was not yet conducted further analysis (anamneses & diagnose) in order to investigate either categorize as occupational disease or not.

Since the hearing losses are categorized as occupational disease based on regulation

Permenaker No.1/1981, that every occupational disease had mandatory shall be reported to the local


Audit Report



4.7.3 minor

Is there documented risk assessment for

Occupational Health and Safety (OHS)?



Documented Risk analysis

OHS Officer &

OHS committee member government ministry of manpower, however there were no any available reporting about it.

Please refer to Major NCR 2014-02.

The quantitative method of risk analysis was conducted for several activities at mill and estate, where the analysis method was described within the documented instruction that analysis considered frequency of hazard (level 1 – 5) and consequences of risks (level 1 – 5) that summarized the risk level from low risk to extreme risks.

The mill’s risk analysis covered activities such as: transportation, weighbridge receiver, FFB sorter, loading ramp, transfer carriage, sterilizer, tippler, thresher, press, clarifier, engine room, water treatment, effluent plant, workshop, warehouse, diesel tank, laboratory, offices and traffic activities.

While the estates’ risk analysis covered activities such as: Loading FFB, estate maintenance, fertilizer, pesticides & herbicides, harvesting, workshop activities at traksi and also warehousing.

However several risky activities at mills were not identified yet as they are become non-conformance within this report.

Within the risk analysis was also considered the hierarchy of control to take action of risk control such as elimination, substitution, engineering, administrative and PPE.

Minor Non conformity

Minor NCR

2014-06

(Closed)

Risk analysis result did not include activities in storage tank, where there was potential hazard related to the confined space and working at height.

There was no available program to control these


Audit Report



4.7.4 minor

4.7.5 minor

Are there records of OHS training?

Is there accident and emergency preparedness procedure?



Training schedule for year 2012 and

2013



Attendance list



Training certificate for boiler operator, heavy equipment.





AA-KL-15-EFP

Procedure Fire handling & prevention at mill, offices and housing area

KL-14-EFP Estate emergency response procedure

General administration officer

OHS Officer &

ERT member hazards in the area of POM (e.g.: No gas detector for confined space work and no full body harness equipment for working at height, etc.)

Training record related to OHS was sighted and verified during this audit, e.g. boiler certificate and licence for boiler operator, licence for operator of generator set, licence of heavy equipment operator and basic OHS training performed internally.

Several documented procedures related to emergency response were available, such as:

Procedure for Fire handling & prevention at mill, offices and housing area (AA-KL-15-EFP) and also

Estate emergency response procedure (KL-14-EFP).

The emergency conditions have been identified including general fire, land fire, chemical spillage and earth quake.

The procedure described the roles and responsibilities of each emergency response team including the mechanism of how to conduct medical evacuation to the nearby hospital/local health centre, the emergency contact numbers of each internal emergency team and external related parties such as public fire station at local area Kabupaten

Kuansing and Public healt h centre “Puskesmas

Peranap” were also available.

The composition of emergency response team

(ERT) was established (AA-447-01-LT) consist of

ERT commander, head of transport and logistics and also several fire fighters and first aider.

Accident reporting and investigation were

Compliant

Compliant


Audit Report

Ref.

4.7.6 minor

4.7.7 minor

4.7.8 minor

Guidance


Audit Findings Status documented in the form of RKK (AA-SOP-OP-

1400.02) to conduct the reporting and investigation of accidents. Accident and investigation reports described the accident chronology, cause and impacts of the accident and also to find the root causes of the accident happened and formulize the corrective and preventive action

Is there evidence of OHS and first aid equipments available at worksites?





List of emergency tools

Emergency kit inspection records

(Monthly)

OHS Officer &

ERT Team

The emergency kits such as first aid box and emergency shower/eyewash were available at mill and several locations at estate. First aid kits were regularly checked as checklist was sighted. Mill and

Estate were supported with one clinic centre and first aid room at each division office. The group leader

( mandor) was provided with first aid kit.

Compliant

Are workers trained in first aid should be present in both field and mill operation?



Emergency team chart



Copies of emergency training

(April 2013)

OHS Officer

First aid kits were sufficiently provided at Mill and

Estates held by each group leader ( mandor ) at estate. Certified training related to first aid was on progress to be implemented next month, February-

2014, however currently the first aider was trained by clinic paramedics. During the audit, the group leader ( mandor ) was able demonstrate the use of first aid kit.

Compliant

Are there records of the occurrence of any work accidents are maintained and regularly reviewed?



Form of Report &

Occupational

Accident

Investigation (AA-

SOP-OP-1400.02)



Monthly accident reporting OHS

Committee (P2K3)

OHS Officer

Accident number was reported on monthly basis.

Quarterly accident statistic was also reported to local authority. Accident was followed up with treatment of the victim and accident investigation.

Compliant

Growers and millers should ensure that the workplaces, machinery, equipment, transport and processes under their control are safe and without undue risk to health. Growers and millers should ensure that the chemical, physical and biological substances and agents under their control are without undue risk to health when appropriate measures are taken. A safe and healthy working environment should be provided for all workers whether they are employees or contractors.


Audit Report

Ref.

4.8

4.8.1 major

4.8.2 major

4.8.3 major

Guidance

Status CRITERION AND INDICATORS Reference Department in Charge

Audit Findings

The health and safety plan should also reflect guidance in ILO Convention 184.

All staff, workers, small holders and contractors are appropriately trained.

Is there any documented training programme for staff, employee and scheme small holders in accordance with workers’ positions and competence?

Training plan 2013-

2014

KTU Training programme for 2013/2014 was shown both for mill & estate such as: HCV, basic safety, basic fire, first aider, etc. training plan 2014 was also established that covered: diesel power operator, sustainability awareness, technical and managerial skill.

Compliant

Are the records of training for each employee kept?

Training attendance list, course certificate

KTU Training records were maintained such as : first aider (May 2013), basic fire & awareness (November

2013), HCV awareness (November 2013), etc.

Compliant

Is there evidence that the company uses experienced or trained contractors?

Contract agreement and contractor profile

KTU The company used experienced contractor for years such as school bus transportation and heavy equipment lease (PT. Karunia Mandiri Sejahtera

Abadi). Sustainability training was also provided for some contractors.

Compliant

Training should be given to all staffs and workers by growers and millers to enable them to fulfil their jobs and responsibilities in accordance with documented procedures, and in compliance with the requirements of these principles, criteria and guidance. Contractors should be selected for their ability to fulfil their jobs and responsibilities in accordance with documented procedures, and in compliance with the requirements of these principles, criteria and guidance.

Workers on smallholder plots also need adequate training and skills and this can be achieved through extension activities of grow ers or mills that purchase fruit from them, by smallholders’ organisation, or through collaboration with other institutions and organisations. For smallholders training records should not be required by anyone working on the farm should be adequately trained for the job they are doing.


Audit Report

PRINCIPLES 5: ENVIRONMENTAL RESPONSIBILITY AND CONSERVATION OF NATURAL RESOURCES AND BIODIVERSITY


Audit Findings

5.1

5.1.1 major

Status

Aspect of plantation and mill management, including replanting, that have environmental impacts are identified, and plant to mitigate the negative impacts and promote the positive ones are made, implemented and monitored, to demonstrate continuous improvement.

Is there documented impact assessment? 



Initial AMDAL on

8 July 2005



Document of RKL and RPL for PT.

Rigunas Agri

Utama, Peranap

Mill and Estate



Procedure AA-

EMS-431-PR

(Environmental aspect and impact identification)



Environment aspect – impact evaluation (EMS-

431-003-LT)

AMDAL document

2003

- Mill

Estate and

- HSE, KTU

Documents of RKL and RPL were approved by

Head of Indragiri Hulu Regency Environmental

Agency on July 8 th

2005.

PT. Rigunas Agri Utama - Peranap Mill and Estate implemented procedure for identifying environmental aspect and evaluating its impact based on

Environmental Management System ISO

14001:2004. The result of environmental aspect, impact identification and evaluation were documented. Last review and update of environmental aspect and impact register for

Peranap Mill and Estate were performed on April 1 st

2011.

Peranap Mill and Estate have ensured that all activities with significant environmental impacts were managed. Control measures were defined and implemented for ensuring that negative environmental impacts were prevented or mitigated.

There were two types of control measures defined: engineering control and administrative control. The implementation of those control measures were monitored during monthly environmental patrol and also round of internal audits.

Compliant

Social impact assessment result was documented in

AMDAL document (released in 2003) covering some impacts such as: working opportunities, income, local perception, social conflict. Action plan

(RKL/RPL) to address those issues were also established to address social issues such as :


Audit Report


Audit Findings Status interview with local communities and workers, dust & noise pollution control, field survey for contagious disease, health sanitation, etc.

5.1.2 major

Are there records of regular report on environmental management in accordance with relevant regulations?



Report of RKL

RPL 1 st

Semester

2013



Receipt note of

RKL RPL submission on

August 2013

Mill and

Estate

Implementation of RKL RPL was reported regularly and the content has complied with RKL RPL document. The reports were submitted to Riau

Province and Indragiri Hulu Regency Environmental

Agency, Central of Environmental Management

Regional Sumatera and Ministry of Environment.

Compliant

5.1.1 minor

Are revisions to environmental management document if there are changes in companies operating areas or activities?



Initial AMDAL on

8 July 2005



Document of RKL and RPL for PT.

Rigunas Agri

Utama, Peranap

Mill and Estate



Procedure AA-

EMS-431-PR

(Environmental aspect and impact identification)

Mill and

Estate

Initial EnvironmentaI Impact Assessment documents

(ANDAL, RKL and RPL) which were approved by

Department of Agriculture of Republic of Indonesia on July 8 th

2005 based on Kpts.332/VII/2005 for PT.

Rigunas Agri Utama, Peranap Mill and Estate were available.

Internal environmental aspect and impact were evaluated as required by the procedure AA-EMS-

431-PR. Last review and update of environmental aspect and impact register were performed on April

1 st

2011.

Guidance Documented impact assessment is AMDAL for plantation area ≥ 3,000 Ha and UKL/UPL for plantation < 3,000 Ha.

In view of the fact that development activities in general will alter the environment, it is important to pay due attention to environmental components having the following characteristics:

1. Environmental components for which the functions must be maintained, safeguarded and preserved, such as:











 protection forests, conservation forests, and biosphere reserves water resources biological diversity air quality natural and cultural heritage environment quality

Compliant


Audit Report

Ref. CRITERION AND INDICATORS Reference Department Audit Findings Status environmentally-oriented cultural values in Charge



2. Environmental components which may undergo fundamental change(s), along with such change(s) as are considered important by the community in the area of the proposed business or activity, for instance:

 land ownership and control





 employment and business opportunities living standards of the community public health

AMDAL is Analisis Mengenai Dampak Lingkungan Hidup consists of 3 (three) main documents; 1) Environmental Impact Assessment, 2) Environmental Management Plan, and 3) Environmental

Monitoring Plan.

The company must report periodically to related institution on environmental management and monitoring plan implementation.

It is the responsibility of the company to provide sufficient objective evidence to the audit team that the full requirements of an EIA are met for all aspects of plantation and mill operations, and captures all changes over time.

Environmental impact assessment should cover the following activities where they are undertaken:











Building new roads, processing mills or other infrastructure.

Putting in drainage or irrigation systems.

Replanting or expansion of planting area.

Disposal of mill effluents (see criterion 4.4)

Clearing of remaining natural vegetation.

Impact assessment may be a non restrictive format, e.g. ISO 14001 EMS and/or EIA report incorporating elements spelt out in this criterion and rose through stakeholder consultation. Documented management action plans addressing issues rose from the above impact assessment, which is monitored annually.

Effect on the environment can be identified on soil and water resources, air quality (see criterion 5.6), biodiversity and ec osystems, and people’s amenities (see criterion 6.1 for social impacts), both on and off-site.

Stakeholder consultation has a key role in identifying environmental impacts. The inclusion of consultation should result in improved processes to identity impacts and to develop any required mitigation measures. It is important that where activities, techniques or operations change over time during that time, identifications of impacts, and any required mitigation, are updated as necessary.

5.2

5.2.1 major

The status of rare, threatened or endangered species and high conservation value habitats, if any,which exist in the plantation or which could be affected by plantation or mill management, shall be identified and their conservation taken into account in management plans and operations

Are there records of results of identification of any protected, rare, threatened or endangered species, and HCV habitat?



Document of HCV assessment 2012

Regional

Office

A record of HCV Assessment in the form of a report, including a map of HCV area was available. HCV assessment was conducted in September 2012 by independent assessors from Forestry Department,

Bogor Agriculture Institute. All assessors were approved in RSPO as HCV assessor - Discipline

Specialist, coordinated by an RSPO approved HCV

Compliant


Audit Report


Audit Findings assessor - Team Leader.

The HCV assessment report was published in

December 2012. Besides presenting data and map of HCV area, the report also includes a list of rare and threatened wildlife species from 3 (three) main wildlife groups: mammals, birds, and reptiles.

Description HCV Type Wide (Ha)

Ketipo River 1.2 & 4.1 32.70

Sengkilo River

Pelengkawan River

Todung River

Water ponds

Sacred graves

1.2 & 4.1

1.2 & 4.1

1.2 & 4.1

4.1

6

78.88

46.51

32.00

10.00

0.01

HCV Type:

- HCV 1.2 : critically endangered species

- HCV 4.1 : areas or ecosystems important for the provision of water and prevention of floods for downstream communities

- HCV 6 : areas critical for maintaining the cultural identity of local communities

5.2.2 major

If, rare, threatened or endangered species, or high conservation value habitats are present, are appropriate measures to preserve them to be taken?



Conservation

Management Plan and Conservation

Monitoring Plan

Regional

Office

Estate

Based on the HCV assessment report, which includes a list of wildlife species, the Company has taken HCV protection and management measures:

Major NCR

2014-09

(Closed)

(i) Developed an HCV Management and


Audit Report





Environmental

Field Procedure the Restoration of

Riparian and

Areas surrounding

Lakes/ Reservoirs and Springs (AA-

KL-12-EFP), issued on August

7 2014.



Environmental

Field Procedure

Conservation

Area Monitoring

(AA-PL-08-EFP), issued on August

1, 2010.

Monitoring Plan. The Company gave the title for this

Management document

Plan document is available. as and

“Conservation

Conservation

Monitoring Plan” (November 2012). The

(ii) Conducted dissemination (awareness) about the existence of HCV in the Company’s concession area to the surrounding communities in September 2012, through a

Public Consultation during the HCV assessment. Record of the participants’ list and the activity documentation was available.

(iii) The estate manager has issued a

Memorandum regarding river conservation and prohibition of agrochemicals application in the

HCV areas (riparian, dyke, canal and estate boundaries), No. 229 / GM-RAU / MEMO

/10/2012 on October 22 nd

2012. This Memorandum is addressed to the Manager of RGU

Factory, Chief Assistant, and all Assistants.

Key points of the Memorandum are: (i) the prohibition of agrochemical applications along the riparian area, (ii) the prohibition of weeding

( garuk piringan ) and tree root levering ( dongkel anak kayu ) on riparian up to 10 meters wide,

(iii) the prohibition of wildlife hunting, fishing using poison and or electric current, in the entire plantation area, (iv) the prohibition of disposing/discarding/throwing midrib to rivers and creeks, (v) the manager instruction of midribs were arranged in accordance to the

Agricultural Policy Manual, (vi) recipients of memorandum were required to socialize to each staff and employees, (vii) an attachment


Audit Report


Audit Findings Status that contains t he dos and the don’ts related with the conservation of HCV areas identified.

The document was available.

(iv) Conducted dissemination (awareness) about the existence of HCV and wildlife conservation to the Company’s employees, which was conducted through 2 (two) ways, i.e:

Active method: Dissemination to the employees has been conducted in the period of September

9 th

and November 2 nd

, 2013, involving at least employees from various working units: assistants, foremans, office clerks, upkeepers, harvesters, tractions (evidence of implementation was available). Record in the form of participant list was available.

Passive method: Establishing information

/warning/prohibition boards related to the existence of HCV and wildlife conservation at

24 (twenty four) spots in the plantation area.

Letters on several information /warning

/prohibition boards have faded off, that made it unreadable. Record in the form of activities documentation was available.

(v) Conducted a habitat protection in the riparian area with HCV. Activity was focused on prohibition of agrochemical applications and habitat enrichment in riparian area with HCV in certain locations with forest tree species. To support this effort, the Company has set up a small nursery. Records in the form of activities documentation and reports were available.

(vi) Conducted a regular monitoring that was divided into six monthly monitoring and focused


Audit Report


Audit Findings on the inspection of damaged area, and six months monitoring that was focused on inventory of wildlife species and plants in riparian area with HCV. The document in the form of procedures was available. A record in the form of report was available.

(vii) The Company doesn’t have SOP which is specific for the HCV management. It has 2

(two) SOPs which are relevant to certain elements of HCV protection, mainly biodiversity

(HCV 1) and ecosystem services (HCV 4) in the Company’s concession area, with a focus on riparian:

1. Environmental Field Procedure the

Restoration of Riparian and Areas surrounding Lakes/Reservoirs and Springs

(AA-KL-12-EFP), issued on August 1 st

2010. The document was available.

2. Environmental Field Procedure

Conservation Area Monitoring (AA-PL-08-

EFP), issued on September 2012. The document was available.

Major Non conformity

The Company doesn’t have SOP which is specific for the HCV management.

Opportunity for Improvement:

It could be considered to improve the HCV management and monitoring SOP.

5.2.3 Are measures taken for protecting species 

Conservation Regional In the available SOP the prevailing laws and Major NCR


Audit Report

Status Ref. CRITERION AND INDICATORS major and their habitats in accordance with relevant laws and included actions to control any illegal or inappropriate hunting fishing or collecting activities?

Reference

Management Plan and Conservation

Monitoring Plan


Office

Estate

Audit Findings regulations, particularly Act No. 5/1990 and

Government Regulation No. 7/1999, have been referred. However, the SOP does not adequately cover all HCV area, all types of HCV existence in the plantation, and all HCV key elements.

The HCV Management Plan and its implementation have not covered conservation and monitoring of rare or threatened species and their habitats, which are HCV 1 key elements: Southeast Asian Box

Turtle Coura amboinensis , and Southeast Asian Soft shell Turtle Amyda cartilaginea .

2014-10

(Closed)

Controls of illegal wildlife hunting, fishing, or harvesting, have not been implemented in a planned and consistent manner. Efforts are limited to the establishing of information/warning/prohibition boards. An intensive and regular monitoring and disseminations (awareness) to the workers,

“plantation community” (workers and their families living in the housing complex inside the plantation) and surrounding community have not been conducted yet.


1. The HCV Management Plan and its implementation have not covered conservation and monitoring of rare or threatened species and their habitats, which are HCV 1 key elements: Southeast Asian Box Turtle Coura amboinensis , and Southeast Asian Soft shell

Turtle Amyda cartilaginea .

2. Controls of illegal wildlife hunting, fishing, or harvesting, have not been implemented in a planned and consistent manner. Efforts are


Audit Report


Audit Findings

5.2.1 minor

Are posters and signs warning of the presence of protected species produced, distributed, and made visible to all workers, and the community, including guidelines in handling them?







Map of sign board location.

Information board installed

Sign board of protected species

Regional

Office

Estate limited to the establishing of information/ warning/prohibition boards.

The Company has conducted a dissemination

(awareness) about the existence of HCV and wildlife conservation to the employees, which was conducted through 2 (two ways): (i) Active method:

Dissemination to the employees has been conducted in the period of September 9

November 2 nd th

and

2012 (for the full description please see the previous section), (ii) Passive method:

Establishing information/warning/prohibition boards related to the existence of HCV and wildlife conservation. The warning sign clearly described species that need to be protected completed with picture of the species. Prohibition boards mentioned activities prohibited, e.g. prohibition for illegal hunting and fishing. The information/prohibition/ warning boards were located in several areas: in front of the office, road side on the ways to HCV area, and also in HCV area. Information content and locations considered to be adequate.

Opportunity for Improvement:



It could be considered to improve HCV awareness by involving other participants outside Estate.



It could be considered to improve information/ warning/prohibition boards.

Compliant

5.2.2 minor

Does company appoint dedicated and trained officers to monitor any plans and activities as above?



Organization

Structure of Asian

Agri Sumatera

Estate The Company has an Environment & HCV Head

Assistant and Conservation & HCV Officer staff.

Both staffs are positioned at the Regional Office in

Pekanbaru (Ukui Estate) with its coverage area

Compliant


Audit Report


Audit Findings includes four plantations under Asian Agro Group, including PT. Rigunas Agri Utama. Their backgrounds of formal education, training and experiences of both staffs are sufficient for them to have basic competencies to develop HCV

Management and Monitoring Plan, to conduct a regular monitoring on the implementation of the plan as well as to write up a monitoring report.

Guidance

This information gathering should include checking available biological records and consultation with relevant government departments, research institutes and interested NGOs if appropriate.

Depending on the biodiversity values that are present, and the level of available information, some additional field survey work may be required.

5.3 Waste is reduced, recycled, re-used and disposed of in an environmentally and socially responsible manner.

5.3.1 major

Are all waste and pollutions sources identified and documented?



Result of evaluation of environmental aspect and impact

Mill and

Estate

Identification of waste and pollution sources from

Peranap Mill and Estate activities was evident. The sources of pollution, type and control method of waste were documented, e.g. used oil, used oil filter, and used battery, medical waste, POME.

Compliant

5.3.2 major

Are estates and mills waste management and disposal implemented to avoid or reduce pollution?



Procedure AA-KL-

06-EFP –

Handling of

Hazardous

Waste.

Sustainability

Sub

Department,

Mill and

Estate

Procedure waste handling including hazardous waste handling has been established and implemented. The procedure required waste to be segregated from point of generation. In addition Mill

Major NCR

2014-07

(Closed)



Procedure AA-KL-

07-EFP –

Handling of

Medical Waste.



Procedure AA-KL-

11-EFP –

Handling of

Laboratory Waste.



Form AA-KL-601-

FM – Record of and Estate also established waste register, which described wastes generated from each activity/location, its classification (organic, inorganic or hazardous), and its control measure.

It was observed that organic and inorganic wastes were segregated at point of source. Mill and Estate including housing have provided different colour of waste bin for each type of waste. Organic and inorganic wastes from Mill and Estate including housing were disposed to landfill in the Estate area.

Areas of organic and inorganic wastes disposal were far from housing, in the flood-free area, not in


Audit Report



Hazardous waste



Form AA-KL-602-

FM – record of hazardous waste circulation



Form AA-KL-602-

FM – Record of hazardous waste uses.



Permit of PT.

Elmusonsetindo

Nusaindah

(KepMen LH

44/2010) as hazardous waste transporter and collector



Permit of PT.

Isano Lopo

Industri (KepMen

LH 16/2013) as hazardous waste collector ,

KepMen ESDM

289.K/10/DJM.O/

TU/2013 and

KepMen ESDM

778.K/10/DJM.O/

TU/2013 as hazardous waste processor



Hazardous waste swamp area and completed with warning sign not burning wastes.

Hazardous wastes generated by Mill and Estate were used oil, used oil filter, used battery, medical waste and used lamp. Temporary storage of hazardous waste was available to collect hazardous waste prior to be transported by licensed vendor.

Temporary storage of hazardous waste still held valid permit from the Head of Investment and

Integrated Licensing Service of Indragiri Hulu

Regency dated November 28t days and valid through 5 years.

Pekanbaru Regional Office. h

2013. (4/BPMD&

PPT/ BP-LB3/XI/2013) with permissible period 90

Disposal of hazardous waste was performed in coordination with Sustainability Department in

These hazardous wastes were managed by licensed vendor: PT. Elmusonsetindo Nusaindah for transporter/collector and PT. Isano Lopo Industri as collector/user. Disposal of hazardous waste was completed with manifest. Manifest of disposal was sighted for May 2013 and December 2013.

Hazardous waste was reported to Indragiri Hulu

Regency, Riau Province and Central of

Environmental Management Regional Sumatera.

Receipt note was sighted.



Audit Report


Audit Findings Status manifest dated 9

December 2013

Based on the existing manifest, hazardous waste shipment was made on May 22

December 9 th nd

, 2013 and

, 2013, the time interval exceeds the maximum temporary storage limit (90 days) specified in the license no. 4/BPMD & PPT/BP-

LB3/XI/2013.

5.3.1 minor

Is there management plan of hazardous waste and instruction of disposal of agrochemicals and their containers waste in accordance with the product label and existing regulations?



Record of hazardous waste



Record of economical waste

Estate Empty agrochemical containers from Estate activities were cleaned using a triple rinse method.

Empty agrochemical cans and bottles were disposed to landfill and separated from organic and inorganic wastes. Empty agrochemical jerry cans were reused for chemical solution during spraying. Fertiliser sacks were cleaned prior to be reused for lose fruit layer during harvesting in order to avoid contamination of fruits with fertilizers. Estate has been completed with area to clean agrochemical containers and fertiliser sacks. Liquid waste from cleaning was reused for agrochemical dilution during spraying or gardening.

Compliant

5.3.2 minor

Are there records of waste monitoring or analysis?



Record of hazardous waste



Record of economical waste

Mill and

Estate

The hazardous wastes balance was made for each type of hazardous waste: waste oil, waste battery, used fuel and oil filters, and medical waste. Quantity of empty agrochemical cans and bottles disposed was recorded.

Compliant

Guidance The waste management and disposal plan should include measures for:







Identifying and monitoring sources of waste and pollution.

Improving the efficiency of resource utilisation and recycling potential wastes as nutrients or converting them into value added products (e.g. through animal feeding programmes).

Appropriate disposal of hazardous chemicals and their containers. Surplus of chemicals container should be disposed of or cleaned in an environmentally and socially responsible way (e.g. returned to the vendor or cleaned using a triple rinse method), such that there is no risk of contamination of water sources or to human health. The disposal instruction on manufacture’s label should be adhered to.

5.4

Efficiency of energy use and use of renewable energy is maximised.

5.4.1 minor

Are there records of monitoring renewable energy use and its efficiency analysis?



Result of Mill

Fibre and shell were used as boiler feed. Volume of fibre and shell used for boiler feed was estimated

Compliant


Audit Report

Ref.

5.4.2 minor

Guidance



(energy/ton CPO, or energy/ton palm product) monitoring of renewable energy use and its efficiency monthly. Record sighted for 2012 and 2013. Total energy generated by steam turbine generator for

Peranap Mill was recorded monthly and evaluated yearly as total energy (GJ) per ton of CPO produced.

Total energy per ton CPO produced was increased in 2013 compared with 2012 due FFB processed in

2013 less than 2012.

Are there records of monitoring of fossil fuels use for operational reason and its efficiency analysis?





Mill Unit Report

(LUP)

Estate Unit Report

(LUK)

Mill and

Estate

Fossil fuel used for Mill and Estate activities were recorded. Fossil fuel was used for heavy equipment, diesel generator and FFB transportation.

In 2013 fossil fuel use was decreased compared to budget. And fossil fuel budget in 2014 less than budget in 2013.

Compliant

Growers and mills should assess the direct energy use of their operations, including fuel and electricity, and energy efficiency of their operations. This should include estimation of fuel use by contractors, including all transport and machinery operations. The feasibility of collecting and using biogas should be studied if possible.

5.5

5.5.1 major

Use of fire for waste disposal and for preparing land for replanting is avoided except in specific situations, as identified in the ASEAN guidelines or other regional best practice.

Is there any documented assessment where fire has been used for preparing land for replanting?

-

-

Replanting Plan

Year 2018

PT. Rigunas Agri

Utama

Procedure

– 2023 replanting (AA-

APM-OP-1100.20-

R1)

- Estate

Office &

Head of administrati on – KTU &

Researches

Department

- Estate

Manager

Replanting plan will be begun in 2018.

It was noted that Peranap estate has not conducted replanting activities since its first plant in 1992, as defined within the procedure that the replanting are within 25 years since its first plant year.

However it was described within the replanting procedure plantation by conducting topple to the palm trees, chopping and stacking using excavator by bucket modification.

(AA-APM-OP-1100.20-R1) that the organisation committed to zero burning by using

“chipping technique” at the ganoderma risks

Compliant

Procedure replanting mentioned that Field Assistant,

Assistant Chief and Estate Manager must perform


Audit Report

Ref. CRITERION AND INDICATORS Status

5.5.2 major

Are there records of implementation of zero burning policy?

Reference

- Procedure of

Replanting (OP-

1100.20-R1). &

Procedure of Land

Preparation (OP-

1100.20-R1)

- Company Policy dated 26 Nov 2012


- Estate

Office &

Head of administrati on – KTU &

Researches

Department

- Estate employees

The organisation has policy of zero burning documented

APM-OP-1100.02-R1 (Land Preparation) and OP-

1100.20-R1 (Replanting).

The organisation had documented company policy dated 26 th

Audit Findings checks to ensure that the contractor does not perform burning for land preparation for replanting.

All the replanting activities requires to be documented and monitored, such as: Schedule of replanting (chipping, digging and planting), progress planting LCC ( Legume Cover Crop ) and Minutes

Works replanting (Progress in the Works Contractor)

In the procedure of replanting mentioned that, the methods used are:



Toppling trees using heavy equipment

(excavators)



Chipping: cutting palm trunk, so as not infected with ganoderma



Planting LCC / legumes ( Mucuna and Puereria javanica etc. So that the decay of the old oil palm trunks can be faster



Planting of oil palm.

This method has been used in replanting the whole plantation belonging to Asian Agri group including

PT. Rigunas Agri Utama.

in procedure of land preparation: AA-

November 2012 that defined to conduct zero burning practices actively to support initiative of preventive and monitoring of fire and smokes.

Compliant


Audit Report

Ref.

5.5.3 major

5.5.1 minor


Are there procedure and records of emergency responses to land burning

(tanggap darurat kebakaran lahan)?

Are appropriate fire extinguishers and facilities, depending on the risks assessment, available?



Procedure for Fire handling & prevention at mill, offices and housing area (AA-KL-15-

EFP)



Estate emergency response procedure

(KL-14-EFP)





Reference

List of emergency tools

Emergency kit inspection records

(Monthly)


OHS Officer &

ERT member

Several available

Audit Findings documented estate on November 22 nd evaluation review were sighted. procedures related to emergency response to land burning such as: Estate emergency response procedure (KL-14-EFP) were

Fire drill simulation was conducted at Peranap

2013 at warehouse and workshop with scenario of fire incidents at estate land near to workshop area. The records of both drill

OHS Officer The infrastructure and equipment regarding to fire control and prevention were provided and properly functioned such as:

 Peranap estate: 1 unit Ambulance, 17 units fire extinguisher deployed at several risk locations such as offices, housings, Workshop

& warehouse, also first aid boxes and bags that kept by each supervisors (mandor); 1 unit water mobile tank capacity 1000 litres that supported with 1 unit “robin” pump.

 Peranap mill: Fire extinguisher (11 spots with

DCP and CO

2

medium at electrical area), 4 spots hydrant box, hydrant pumps pressurized 4 bars and 8 units of first aid boxes.

Status

Compliant

Compliant

Guidance

Fire should be used only where an assessment has demonstrated that it is the most effective and least environmentally damaging option for minimising the risk of severe pest and disease outbreaks, and with evidence that fire-use is carefully controlled. Use of fire on peat soils should be prohibited.

5.6

5.6.1 major

Plans to reduce pollution and emissions, including greenhouse gasses, are developed, implemented and monitored.

Is there evidence of identification of emission sources at mills?



Result of evaluation of environmental

Mill and

Estate

Identification of pollution and emission sources at

Peranap Mill activities was evident. The source of pollution, type of pollution and its control were documented, e.g boiler, POME, diesel electric

Compliant


Audit Report


Audit Findings

5.6.2 major

5.6.1 minor

5.6.2 minor

Is monitoring of emission quality of the sources identified?

Are there records of efforts and strategies employed to reduce pollution and emissions?

Are there records of identification, monitoring, and treatment methodology for

POME?





 aspect and impact



Report of analysis for boiler emission, generator emission, ambient air, noise

Environmental management objectives, targets and programs

Procedure AA-

MPM-OP-

14000.13-R1

Certificate of analysis

–

WWTP Process

Mill and

Estate

Mill and

Estate

Mill generator, vehicle and heavy equipment emission.

Monitoring of pollution and emission quality of identified sources has been programmed. Monitoring and measurement results for second semester of

2013 were sighted for boiler emission against

Environment Ministry Decree #07/2007, diesel electricity generator against Environment Ministry

Decree #Per21/Menlh/2008, vehicle and heavy equipment emission against Environment Ministry

Decree #05/2006, odour emission against

Environment Ministry Decree #50/Menlh/11/96, ambient noise against Environment Ministry Decree

#48/Menlh/11/96, also ambient air quality against

Government Regulation #41/1999.

Efforts and strategies employed to reduce pollution and emissions were sighted, e.g.:



Substitute diesel fuel to fibre and shell to operate boiler



Conduct preventive maintenance regularly based on working hour of electricity generator



Define target of fuel consumption for each dump truck to transport FFB



Not operate turbine while Mill was not operated



Install dust collector to control boiler ash



Grow fruit plants in each employee house



Manuring application based on recommendation.

POME was processed in 4 ponds: cooling pond

(pond #1), acidification (pond #2 and #3) and primary anaerobic (pond #4). POME from pond #4 was applied in the Peranap Estate according to permit of land application from the head of BLHD

(Regional Environmental Agency) Indragiri Hulu No.

33/2012 dated October 22 nd

2012 and valid through

Compliant

Compliant

Compliant


Audit Report


Audit Findings



Permit of land application from the head of BLHD

(Regional

Environmental

Agency) Indragiri

Hulu No. 33/2012 dated 22 October

2012 and valid through 5 years



Report of Land

Application period

July – December

2013

5 years. POME was monitored by Peranap Mill laboratory for parameter pH and debit and external laboratory for parameter required by permit of land application (pH, BOD, COD, Cu, Pb, Cd, Zn, oil and grease). The result of POME monitoring was reviewed including measurement of BOD for period

July – December 2013. The Ministry of Environment

Decree #29/2003 and permit of land application required that BOD of POME flowed to land application is less than 5,000 mg/litre. The result of

POME quality during this period was under 5,000 mg/litre. Water quality was monitored at land application well and non-land application well. The result of monitoring well was reviewed according to

The Ministry of Health Decree #416/1990.

Report of land application is reported to

Environmental Agency of Indragiri Hulu Regency,

Environment Agency of Riau Province, Central of

Management Ecoregion Sumatera and Ministerial

Office of Environment.


Audit Report

PRINCIPLES 6: RESPONSIBLE CONSIDERATION OF EMPLOYEES AND INDIVIDUALS AND COMMUNITIES AFFECTED BY GROWERS AND MILLS



6.1

6.1.1

6.1.1 minor

6.1.2 minor

Aspects of plantation and mill management including replanting that have social impacts are identified in a participatory way, and plans to mitigate the negative impacts and promote the positive ones are made, implemented and monitored, to demonstrate continuous improvement.

Is there any documented environmental and social impact assessment, including details of positive and negative social effect that may be caused by plantations and mills, and documented participation of affected parties and local communities?

AMDAL document KTU, HSE Social impact assessment result was documented in

AMDAL document (released in 2003). The AMDAL studies including pre operation and operation phase of estate and mill.

In line with AMDAL legal requirements, the studies involved participation of affected parties and local communities.

Compliant

It was reviewed that social component covered is in line with the minimum guidance of AMDAL coverage including working opportunities, incomes, local perception, public health, and social conflict.

Are there any regular monitoring and management of social impact, with the participation of local communities?

Are there results of revision to the environmental management document that encompasses social impact assessment in the event there are changes to company’s operational scope, in accordance with existing regulations?

RKL/RPL progress report

N/A

KTU, HSE Monitoring of RKL/RPL has been performed annually. The last monitoring report was created in

2013 and indicated that the company has opened working opportunities for local recruitment, implementing CSR, etc.

Estate and Mill There were no changes to company’s operational scope.

Compliant

Not

Applicable

6.1.3 minor

Are there any regular and scheduled environmental management and monitoring report?



Report of RKL

RPL 1

2013 st

semester

Mill and

Estate

Implementation of RKL RPL was reported every six months. The reports were submitted to Riau

Province and Indragiri Hulu Regency Environmental

Agency, Central of Environmental Management

Compliant



Receipt note of


Audit Report

Ref.

6.1.4 minor

Guidance



RKL RPL submission

Regional Sumatera and Ministerial Office of

Environment.

Are there any particular attention paid to the impacts of outgrower schemes (does the plantation include such a scheme)



AMDAL document



Report of RKL

RPL 1 st

semester

2013

Mill and

Estate

Particular attention was paid to the impact of out grower schemes (plasma). The organization has management and monitoring plan prepared with the participation of local communities and relevant stakeholders.

Compliant

The identification of social impacts can use AMDAL as a part of the process but it is the responsibility of the company to provide sufficient objective evidence to the audit team that the full requirements of an SEIA are met for all aspects of plantation and mill operations, and captures all changes over time.

Identification of social impacts should be carried out by the grower with the participation of the affected parties as appropriate to the situation. The involvement of independent experts should be sought where this is considered necessary to ensure that all impacts (both positive and negative) are identified.

Potential social impacts may results from activities such as: building new roads, processing mills or other infrastructure; replanting with different crops or expansion of planting area; disposal of mill effluents; clearing of remaining natural vegetation; changes in employee numbers or employment terms.

Plantation and mill management may have social impacts (positive or negative) on factors such as:



Access and use rights









Economic livelihoods (e.g. paid employment) and working conditions.

Subsistence activities.

Cultural and religious values.

Health and education facilities.

Other community values, resulting from changes such as improved transport/communication or arrival of substantial migrant labour force.

6.2

6.2.1 major

There are open and transparent methods for communication and consultation between growers and/or millers, local communities and other affected or interested parties.

Is there any documented procedure and records of communication and consultation with the communities?

SOP AA-GL-

5009.1.R0

Sustainability

Awareness records

(attendance list & minutes) for employees and stakeholders.

KTU A procedure has been documented to describe this mechanism. The procedure was titled “

Komunikasi/konsultasi kelompok lain yang terkena dampak atau kepentingan dengan pihak kebun/pabrik ” (Public consultation for stakeholders).

Sustainability

Masyarakat requirements

Mekanisme lokal have atau been communicated to stakeholders in recorded briefing form such as : RSPO procedure awareness to

Compliant


Audit Report


Audit Findings Status employees (March & November 2013), environmental & safety policy to subcontractors

(January 2013)

6.2.1 minor

Is a list of stakeholders maintained?

List of stakeholders

KTU

List of stakeholder was available comprises of society leaders, local authorities (forestry, labour, environmental) and also NGOs.

Minor Non-conformities :

Minor NCR

2014-08

(Closed)

6.2.2 minor

6.2.3 minor

Guidance

The stakeholder list does not contain any local farmers as outside supplier

Are there records of local communities’ aspiration and responses or follow up actions by companies to these requirements?

Aspiration & response letters

KTU

In line with AMDAL requirements, studies of AMDAL include participation of local communities, including identification of their aspiration.

Compliant

The local communities have expressed their aspiration about support of their children education.

Records reviewed shown that the organisation has response these aspiration e.g. PT. Rigunas Agri

Utama, response letter for job apprenticeship request from Vocational school SMKN 1 Pasir

Penyu (October 2013).

Is there a dedicated person responsible for consulting and communicating with local communities?



Estate Manager

Assignment Letter

No.001/EST-

MGR/KPN/I/2014

KTU

“KTU” is temporarily assigned to perform public consultation due to absence of “ relation) position.

Humas ” (public

Compliant



Job profile

Decision 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 mechanism should be designated in collaboration with local communities and other affected or interested parties. These should consider the use of existing local mechanism and languages. Consideration should be given to the existence/formation of a multi-stakeholder forum.

Communication should take into account differential access to information of women as compared to men, village leaders as compared to day labourers, new versus established community groups, and different ethnic groups.


Audit Report



Consideration should be given to involving third parties, such as disinterested community groups, NGSs, government (or a combination of these) to facilitate smallholder schemes and communities, and others as appropriate, in these communications.

6.3

6.3.1 major

6.3.1 minor

6.3.2 minor

Guidance

There is a mutually agreed and documented system for dealing with complaints and grievances, which is implemented and accepted by all parties

Is there an open mechanism, which is accepted by affected parties, to receive complaints and resolve dispute in an effective, timely and appropriate manner?

SOP AA-HR-308.5-R0

SOP AA-GL-5005.1-

R0

SOP AA-GL-5009.1-

R0

AA-GL-5003.1-R1

KTU This mechanism has been described in 2 procedures “ Penyampaian & penyelesaian keluhan karyawan ” (grievance/ complaint SOP AA-HR-308.5-

R0), “ Penanganan Keluhan pencemaran lingkungan ”

(environmental issues handling, SOP AA-GL-

5005.1R0 ), “ Mekanisme komunikasi/konsultasi masyarakat lokal atau kelompok lain yang terkena dampak atau kepentingan dengan pihak kebun/pabrik ” (public consultation to stakeholders,

SOP AA-GL-5009.1R0), “ Penanganan konflik lahan ” (land conflict handling, AA-GL-5003.1-R1).

Are there records of handling of the complaints?

Form of complaints, feedback register

KTU Complaints were recorded in a feedback form and registered in a logbook where most of complaints were from employees related to their housing and facilities condition. Action was also immediately taken to resolve facilities issues. No serious social issues that affect organisation’s operation to be identified during the audit.

Are there procedures for identification and calculation of fair compensation for the loss of legal or customary right of the land, with the involvement of local community representatives and relevant agencies and made publicly available?

SOP AA-GL-5003.1-

R1

HUMAS/KTU

& Legal

Calculation and compensation method for land has been described in a procedure. This mechanism was explicitly defined in the same procedure of “land conflict handling”. This procedure has been notified to stakeholders even though there were no possible land acquisition at current time.

Dispute resolution mechanism should be established through open and consensual agreements with relevant affected parties.

Complaints may be dealt with by mechanism such as Joint Consultative Committee (JCC).

Grievance may be internal (employees) or external.

Compliant

Compliant

Compliant


Audit Report



6.4

6.4.1 major

6.4.1 minor

6.4.2 minor

6.4.3 minor

Any negotiations concerning compensation for loss of legal or customary rights are dealt with through a documented system that enables indigenous people, local communities and other stakeholders to express their view through their own representative institutions.

Are there procedures for the identification, calculation and compensation for the loss of legal or customary rights of the land, with the involvement of local community representatives and relevant agencies?

Are there records of identification of people entitled to receive compensation?

SOP AA-GL-5003.1-

R1

Agreement letter, minutes of land compensation

KTU & Legal

Legal

This procedure was embedded in land conflict procedure where identification and calculation method were also described.

Compliant

Compliant

Are there records of negotiations processes and/or the details of compensation settlements?

Are there records of the implementation of compensation payment?

Agreement letter

Payment notes

FFB supplier interview

Legal

Legal

Name of land owner who is eligible to receive compensation for land acquisition was already noted in “ Surat Persetujuan Bersama ” and “ Berita Acara

Ganti Rugi ” (for each of them).

Result of Negotiation process has been documented in “ Surat Persetujuan Bersama ” that comprised information of land square, land position, compensation rate, etc. example: land in

Semelinang Tebing, the acquisition was taken during

November 1994.

Records of payment were documented in “ kwitansi ”

(cash payment note). Based on interview with FFB suppliers it was confirmed that the payment was made on time.

Compliant

Compliant

Guidance This criterion should be considered in conjunction with Criterion 2.3. and the associated guidance.

Local communities have right to appoint their own representatives and this processes and results must be documented.

6.5

6.5.1 major

Pay and condition for employees and for employees of contractors always meet at least legal or industry minimum standards and are sufficient to provide decent living wages.

Is there any documentation of employees’ pay rates?

Monthly payroll KTU Monthly payroll was generated comprises basic wage, overtime hours, piecework, working days, accident/death insurance deduction, etc. the basic wage was observed in compliance with minimum wage as defined in Governor Decree “SK Gubernur

Riau no.67/2012” with minimum amount of

Compliant


Audit Report



1,548,888 IDR. The company paid higher than minimum to PHL workers which are 1,626,000 IDR/ month or 65,040 IDR/day while SKU worker have

1,509,000 (according to current GAPKI decree letter no.144/GAPKI/R/III/2013). The SKU worker have rice “ natura ” 15 kg for the employee, 9 kg for the spouse and 7.5 kg for up to 3 children which equals to 117,000 IDR amount.

6.5.2 major

Are there any company working regulations and work contracts, in accordance with existing regulations?

Perjanjian Kerja

Bersama PKB

(working agreement)

KTU Working agreement (PKB) was established and endorsed by local authorities (labour department) and last for 2 years. This PKB was applied to nonstaff employees (SKU) while PHL (daily free workers) used individual contract agreement.

Compliant

6.5.1 minor

Do growers and millers provide adequate housing, water supplies, medical, educational, and other facilities for employees where such facilities are not available or accessible?

Water test certificates KTU &

HUMAS

The company has provided employees facilities such as : housing, sport fields, building for prayers

(mosques & churches), schools (kindergarten & elementary school), childcare house, polyclinics, free electricity and clean water supply (from reservoir and deep-wells). The water quality was periodically checked by external lab ( UPT Pengujian Dinas

Pekerjaan Umum ). The last water inspection for deep wells was performed in July 25 th

2013 at

Afdeling I, II, III and IV. The result indicated that water was safe enough for consumption.

Compliant

6.5.2 minor

Are agreements entered into with contractors to specify that contractors abide by labour laws?

Contract agreements KTU Contract agreements for contractors were available, defined clear rights and authorities between two parties. Currently, 2 contractors being used by the company for the provision of school bus and heavy equipment lease.

The contract has stated that contractor shall abide the current labour and safety law.

Compliant

Guidance

Where temporary or migrant workers are employed, a special labour policy should be established. This labour policy should state the non-discriminatory practices; no contract substitution; post


Audit Report


Audit Findings Status arrival orientation program to focus especially on language, safety, labour laws, cultural practice, etc; decent living condition to be provided. Migrant workers are legalised, and a separate employment should be drawn up to meet immigration requirements for foreign workers, and international standards. Deductions do not jeopardies a decent living wage.

6.6

6.6.1 major

6.6.1 minor

The employer respects the right of all personnel to form and join trade unions of their choice and to bargain collectively. Where the right to freedom of association and collective bargaining are restricted under law, the employer facilitates parallel means of independent and free association and bargaining for all such personnel.

Is there a documented company policy recognising freedom of association?

Company policy letter,

PKB (working agreement)

KTU, union representative

The company has association as committed and written in company policy dated November 26 agreement) clause 2. recognized th freedom of

2012 and PKB (working

The union name was registered as “ PUK Serikat

Pekerja Pertanian dan Perkebunan Serikat Pekerja

Seluruh Indonesia PT. Riguna Agri Utama” which was founded in October 11 th

2012 (registration no.

Kep 036/PC-FSPPP-SPSI/K/10/2012).

Compliant

Are there any documented minutes of meeting with any labour union (if any)?

Minutes of meeting KTU, union representative

Some minutes of meeting between union representative and management were available to discuss some agendas, e.g. festival for national celebration day, fringe benefit for “ hari raya ”, etc. No significant issues that affect organisation’s operation to be reported in the minutes.

Compliant

Guidance The right of employees and contractors to form associations and bargain collectively with their employer should be respected, in accordance with Convention 87 and 98 of the International Labour

Organisation. Labour laws and union agreements or in their absence, direct contracts of employment detailing payments and other condition are available in the languages that understood by the workers or explained carefully to them by a management official.

6.7

6.7.1 major

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

Is there any documented company policy on worker age requirements, in accordance to national laws?

Company policy letter KTU The company has prohibited child workers (under 18 years) as committed and written in company policy dated November 26 th

2012 in accordance with

Indonesian law UU 13/2003.

Compliant

Are there any records of implementation of

List of workers, KTU List of workers did not show any worker under 18 Compliant 6.7.1


Audit Report


Audit Findings minor company policy on worker age requirements? employee ID cards

Workers interview years old when they joined the company. Some copies of worker’s ID were also filled as evidence.

No underage worker was met during the audit.

Workers interviewed indicated no worker under 18 years old.

Growers and millers should clearly define minimum working age, together with working hours under national regulations.

Guidance

Smallholders and family farm should allow work by children only if permitted by national regulations.

6.8

6.8.1 major

6.8.1 minor

Any form of discrimination based on race, caste, national origin, religion, disability, gender, sexual orientation, union membership, political affiliation, or age, is prohibited.

Is there any documented equal opportunities policy?

Company policy letter KTU The company opportunities without discrimination as committed and written in company policy dated November 26 th

2012. The policy has been communicated to workers. encourage equal working Compliant

Is there any evidence of equal treatment in working opportunities for workers?

Recruitment files, list of workers

KTU Recruitment data and list of worker notifies that workers are from different race, religion, sexual orientation, etc. and treated equally. During worker interview, no discrimination issues expressed.

Compliant

Guidance The grievance procedures detailed in 6.3 apply. Positive discrimination to provide employment and benefits to specific communities is acceptable as part of negotiated agreements.

6.9

6.9.1 major

A policy to prevent sexual harassment and all other forms of violence against women and to protect their reproductive rights is developed and applied.

Is there a documented company policy on sexual harassment and violence?

Company policy letter KTU, Gender committee

The company has prohibited sexual harassment and violence as committed and written in company policy dated November 26 th

2012.

Compliant

6.9.2 major

Is there a documented company policy on the protection of reproductive rights?

Company policy letter KTU, Gender committee

The company gave protection of reproductive rights for female workers as committed and written in company policy dated November 26 th

2012.

Compliant


Audit Report



6.9.1 minor

Is there any proof of implementation of sexual harassment policy?

Interview with gender committee and female workers

Gender committee

No sexual harassment reported from gender committee and female workers during interview session both in mill and plantation.

Compliant

6.9.2 minor

Is there a proof of implementation of reproductive rights policy?

Monthly pregnancy test report, minutes of gender policy awareness

Gender committee

Pregnancy test was held monthly to all female workers doing agrochemical works. The gender committee has also performed monthly meeting with members to identify any issue including gender awareness as necessary. Minutes of meeting was also documented monthly. The members consist of

44 female workers.

Compliant

6.9.3 minor

Is specific grievance mechanism available?

SOP AA-HR-309.01-

R0

Gender committee

Documented procedure has been established to describe handling mechanism of sexual harassment case. No grievance was identified so far since this committee established in 21/10/2012.

Compliant

Guidance There should be a clear policy developed in consultation with employees, contractors, and other relevant stakeholders, and the policy should be publicly available. Progress in implementing the policy should be regularly monitored, and the results of monitoring activities should be recorded.

A gender committee specifically to address areas of concern to women may be requested to comply with the criteria. This committee, to have representatives from all areas of work, will consider matters such as; trainings on women’s rights, counselling for women affected by violence, child care facilities to be provided by the growers and millers, women to be allowed to breastfeed up to nine months before resuming chemical spraying or usage tasks, and women to be given specific break times to enable effective breastfeeding.

6.10

6.10.1 major

Growers and mills deal fairly and transparently with smallholders and other local business.

Are lists of current and past prices paid for

FFB publicly available?



Price Information date 17 January

2014 (Rp. 1.770)



Minutes of FFB pricing team, Riau province

Mill There were seven out growers supplied FFB to

Peranap Mill (ES, MN, MHS, SM, ND, BRD and Tio).

FFB pricing was available and informed to the supplier through sign board at the loading ramp and updated every day.

The pricing components considered the transportation cost, grading and oil potential content.

Current and past prices for smallholders were available as sta ted in weekly minutes “ Berita acara hasil rapat tim penetapan harga pembelian TBS

Compliant


Audit Report



6.10.2 major

Are pricing mechanism for FFB and inputs/services documented (where these are under control of the mill or plantation)



Price Mechanism

2013



Riau Governor decree no.22/2006

Mill kelapa sawit provinsi Riau produksi pekebun di provinsi Riau ”, endorsed by the team leader every week. The meeting was held in local forest authority

(Disbun). The price is applicable and updated for 1 week period. E.g. FFB price letter no.03/TPH TBS-

I/2014 (period applies on 22-28 January 2014).

Price mechanism of FFB was determined by RO

Pekanbaru and described in Price Mechanism by

FFB Manager dated March 14 th

2013. The company updated the information on the FFB pricing formula based on global CPO based price that includes details of transport, grading, potential oil content, milling and shipping costs.

Compliant

Method of FFB pricing (for smallholders) was outlined in Governor Decree “Peraturan Gubernur

Riau no.22/ 2006”. The price made based on several variables such as: plantation age, ”K” index, CPO price, R-CPO, kernel price/IS, R-IS.

FFB was purchased from outside grower, the price mechanism followed “memorandum no.0001/MM-

FFB/Memo/I/2014” issued by FFB manager.

6.10.1 minor

Is the evidence available that all parties understand the contractual agreements they enter into, and that contracts are fair, legal and transparent?





Contractual agreement

Interview with FFB suppliers

Mill

The selection and evaluation of supplier were based on capability of supplier to supply required inputs and services. Specification of inputs and or services required was communicated to the supplier/vendor through tender document or request for quotation.

The selection was conducted by Regional Office.

Interview with FFB suppliers indicated that the agreements are fair, legal and transparent.

Compliant

6.10.2 minor

Are agreed payment made in timely manner?



Payment records Mill The record showed that payment was conducted in line with term of payment agreed within the contract.

Compliant

Guidance Transaction with smallholders should consider issues such as the role of middle men, transport and storage of FFB, quality and grading. The need to recycle the nutrient in FFB (under 4.2) should


Audit Report


Audit Findings also be considered; where it is 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 criterion 6.3, if they consider that they are not receiving a fair price for FFB, whether or not middle men are involved.

The need for a fair and transparent pricing mechanism is particularly important for out growers, who are contractually obliged to sell all FFB to a particular mill.

Status

If mills require smallholders to change practices to meet the RSPO criteria, consideration must be given to the costs of such changes, and the possibility of advance payment for FFB could be considered.

6.11

6.11.1 minor

Growers and millers contribute to local sustainable development wherever appropriate.

Are there records of company contributions to the local developments?

CSR plan, CSR records

KTU/HUMAS The company has developed CSR programme in

2013 (300 million IDR budget) comprised of several activities such as provision of prayer buildings and schools, funding for cultural and religious events, cattle provision, making of deep-wells, sports tournaments, provide health facility (ambulance), school, etc. School, prayer buildings, sport facility, and ambulance are available for public. The company has also used local contractor to provide school buses and heavy equipment lease. The company has also cooperated with plasma smallholders to develop local economics. CSR records were sighted as follow: building material supply for church in Punti Kayu village (October

2013), provision of grader equipment to excavate land for local health centre establishment (May

2012), medical equipment supplies to local health centres in Pematang Banteng village (November

2013), training provision to teachers by Tanoto foundation (October 2013).

Compliant

CSR plan for year 2014 was also established with budget amount : 340 million IDR to provide : fishery farming, entrepreneurship trainings, deep wells for clean water, general medical service, baby day care, mosque & churches renovation, etc.

Guidance Contributions to local development should be based on the results of consultation with local communities. See also criterion 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


Audit Report


Audit Findings Status needs of men and women.

Where candidates for employment are of equal merit, preference should always be given to members of local communities. Positive discrimination should be recognised as conflicting with criterion

6.8

PRINCIPLES 7: RESPONSIBLE DEVELOPMENT OF NEW PLANTINGS

All land inside the concession area has been developed in the period of 1987 – 1989, therefore Principles 7 is not applicable.

PRINCIPLES 8: COMMITMENT TO CONTINUOUS IMPROVEMENT IN KEY AREAS OF ACTIVITY



8.1

8.1.1 major

Growers and miller regularly monitor and review their activities and develop and implement action plans that allow demonstrable continuous improvement in key operations

Is there a monitoring action plan based on the social environmental impact assessment (AMDAL), and regular evaluations of plantation and mill operations?

As a minimum these must include, but not necessarily be limited to:



Reduction in use of certain chemicals (criterion 4.6)



Environmental impacts (criterion

5.6)



Waste reduction (criterion 5.3)



Pollution and emissions (criterion

5.6)



Report of external audit



OHS objectives, targets and programs



Environmental

Management

Program

Mill and

Estate

Evidence of several improvements was shown, e.g. o Reduction in use of certain chemicals: o The organisation committed that Paraquat only used for specific species: a few species of ferns, such as: and Lycopodiophyta.

o Environmental impacts:

Stenochlaena o Segregation of domestic water run off with industrial waste water by building trench around shell storage area to prevent contaminated water to open drainage o Improvement in monitoring of fuel consumption by calibrating fuel injection pumps and check fuel nozzle pipe. o Improvement in monitoring of domestic

Compliant


Audit Report





Social impacts (6.1) water consumption by installing flow meter to monitor water consumption in housing o Waste reduction: o Reduction in discharged waste water. The project including: Injection of water from hydro cyclone and blow down boiler to boiler chimney. It can prevent blow down boiler drain to water body, reduce waste water treated in WWTP. o Pollution and emissions: o Reduction of potential particulate release to the atmosphere by increase boiler ash capture by the chimney o Social impacts o Projects to improve social impacts are integrated within CSR program

Regular evaluation of plantation and mill operation was performed through internal and external audits.

The coverage of the audit including production planning, production, power generation and utilization, consumable, process control, quality control – including waste water treatment, maintenance, occupational health and safety, FFB incoming and inspection, and laboratory. The above audit reports indicated that all gaps against standard operation procedure of plantation and operation were noted. Corrective action plan was issued and implemented to demonstrate effort for compliance as well as continual improvement.

A monitoring action plan has been established after

AMDAL/social impact assessment and annual


Audit Report



8.1.1 minor

Are there any records of follow-up actions taken against RSPO audit findings, if any?



Internal Audit Report

2013

Environmental and

Sustainable

Department evaluation was also done to monitor result and progress of action. Most of the plans were executed and the result found was as expected (CSR, local recruitment, etc).

Internal audit programme was conducted by integrating with ISPO (Indonesian Sustainable Palm oil Organisation) and RSPO. Last internal audit was conducted within the period of October 2013. Mr.

Winengku Pamartajati as internal auditor was certified as auditor ISPO & RSPO.

Internal audit findings were followed up with corrective and preventive actions.

Compliant

Guidance Growers should have a system to improve practices in line with new information and techniques and a mechanism for disseminating this information throughout the workforce.

3.3.2 Mill Supply Chain Requirements

The FFB source is one (1) organisation owned by PT. Rigunas Agri Utama, plasma estate managed by PT Rigunas Agri Utama and third party estates. Plasma estate and third party estate are excluded from certification. All FFB are processed together, both from the Peranap Estate, Peranap

Plasma Estate and third party estates. Therefore the Model selected is Mass Balance and RSPO Supply Chain Module E was used as audit criteria.

The detail of FFB processed in Peranap Mill is described in Table 7, Table 8 and Table 9 presented in this report.


Audit Report

3.3.2.1 Supply Chain Certification Standard

Supply Chain Certification Standard

Supply chain actors who take legal ownership and physically handle RSPO Certified Sustainable oil palm products before and up to the (final) refinery need to register their transaction in the RSPO IT System upon the moment of physical shipment.

Note: at present, it is not yet possible to enter palm kernel product transaction into the RSPO IT System. Therefore, until further notice, the reporting of trades into a central database will not be required. Trade will be monitored by RSPO accredited certification bodies as part of supply chain certification audits that also cover the palm kernel product supply chain.

Actor who must register include:



Palm oil mills producing RSPO certified palm oil and palm kernel oil



Refineries (the final refinery that does not further delivery to other refineries directly or indirectly via traders – only needs to confirm the receipt of shipments; it does not need to do sales announcements)

AUDIT FINDINGS / OBJECTIVE EVIDENCE

This is initial certification audit; therefore no physical handle of RSPO certified sustainable oil palm products yet. No products can be claimed as RSPO certified products.

The audit was focused on the facility readiness to physically handle

RSPO Certified Sustainable oil palm products, e.g. availability of procedure.

The organisation has not registered to RSPO eTrace yet. When the

Mill RSPO certification is granted, they will register themselves before transaction of RSPO certified oil palm products start.

STATUS

(NC/AoC/

Compliant)

Compliant

1. Documented procedures

1.1 The facilities shall have written procedures and/or work instructions to ensure the implementation of all the elements specified in these requirements. This shall include at minimum the following:

There were documented procedures available on site to ensure the implementation of RSPO SCC requirements.



AA-MPM-OP-1400.17-R3 (SOP Traceability) Revision 3, dated October 1 st

2013. The procedure was established to ensure the production of sustainable and non-sustainable

CPO/PK/CPKO produced by the Mill and shipped out can be traced to the suppliers of raw material, and also to ensure

Compliant


Audit Report



STATUS

(NC/AoC/

Compliant) a. Complete and up to date procedures covering the implementation of all the elements in these requirements b. The name of the person having overall responsibility for and authority over the implementation of these requirements and compliance with all applicable requirements. This person shall be able to demonstrate awareness of the facilities procedures for the implementation of this standard.

1.2. The facility shall have documented procedures for receiving and processing certified and uncertified FFBs. the palm oil production process can be described.



AA-MPM-OP-1400.18-R3 (SOP Mass Balance) Revision 3,

Dated October 1 st

2013. The procedure described mechanism to monitor the supply chain of certified CPO, PK and CPK production are sustainable, from receipt of raw materials to the delivery of mill products (POM/KCP) and to ensure the record of number of "sustainable" and "nonsustainable" CPO, PK and CPKO production generated by

POM/KCP and shipped out from the mill were "balance" in each 3-months period.

The procedures were up to date covering all the element of RSPO

SCC requirement, including purchasing and goods in, recording and mass balancing, and sales goods out. The implementation was appropriate with existing procedure.

Currently, personnel having overall responsibility were KTU (Mr.

Bahrum Ray Roygers Purba) and Factory Manager (Mr. Sariaman

Simanjuntak). The personnel have awareness and knowledge for the implementation the RSPO SCC standard since they already have been trained on October 31 st

2013.

There was a documented procedure for receiving and processing certified and uncertified FFB, including the grading up to CPO and

Kernel dispatch, described within the procedure:

- AA-MPM-OP-1400.17-R3 (SOP Traceability) Revision 3, dated

October 1 st

2013.

- AA-MPM-OP-1400.18-R3 (SOP Mass Balance) Revision 3,

- Dated October 1 st

2013.

- AA-MPM-OP-1400.02-R2 FFB Receiver Procedure

- AA-MPM-OP-1400.03-R1 Sterilizer station Procedure

Compliant

Compliant

Compliant


Audit Report



STATUS

(NC/AoC/

Compliant)

- AA-MPM-OP-1400.06-R1 Clarifier station Procedure

- AA-MPM-OP-1400.08-R1 Kernel station Procedure

- AA-MPM-OP-1400.14-R2 Storage and delivery Procedure

The organisation has separated recording volume of receive certified and non-certified FFB. All FFB from Peranap estate will be considered as certified FFB, while the other supply base: 3 rd

party and Peranap smallholder will be considered as non-certified FFB.

Based on the received volume of certified and non-certified FFB the organisation will calculate the processed and output of CSPO and

CSPK.

2. Purchasing and goods in

2.1.

2.2.

The facility shall verify and document the volumes of certified and non-certified FFBs.

The facility shall inform SAI Global immediately if there is any projected overproduction.

Peranap Mill has a clear system for recording FFB received from certified supply base and non-certified supply base. It was verified that receiving of FFB was traceable to the supply base unit. Weighing slip and receiving report issued clearly stated weight of FFB received and its source. Weighbridge has been calibrated on October 7 th

2013 by UPT Metrologi Disperindag Riau Province based on calibration letter no. 510.302/METRO/5363/X/2013 and

510.302/METRO/5369/X/2013. There were two weighbridges used for FFB and factory product, Avery Weigh Tronix E1205; 104350300 and E1205; 104350260, its maximum capacity was 50,000 kg.

A review to the current records (January – December 2013) found that they were well maintained and retrievable.

The procedure of Traceability (AA-MPM-OP-1400.17-R3) concerning the immediately inform Certification Body if there was a projected overproduction. No overproduction identified in 2013.

Compliant

Compliant

3. Record keeping

3.1. The facility shall maintain accurate, complete, up-todate and accessible records and reports covering all of

A review to the records and related documentation of the implementation of the SCC found were accurate, complete and up to

Compliant


Audit Report



STATUS

(NC/AoC/

Compliant)

3.2. these requirements.

Retention times for all records and reports shall be at least five (5) years.

3.3.a. The facility shall record and balance all receipts of

RSPO certified FFB and deliveries of RSPO certified

CPO, PKO and palm kernel meal on a three-monthly basis.

3.3.b. All volumes of palm oil and palm kernel oil that are delivered are deducted from the material accounting system according to conversion rations stated by

RSPO.

3.3.c. The facility can only deliver Mass Balance sales from a positive stock. However, a facility is allowed to sell short. date records and report have been maintained by Peranap Mill e.g

FFB receiving records; CPO and PK production daily records; monthly recapitulated record of FFB received, and CPO and PK produced.

The records and reports were easily accessible both in hard copy and soft copy. Retention time for these records and reports has been determined (10 years).

Balance among all FFB, CPO and PK receipts, produced and delivered was conducted in daily basis and recapitulation was done in three months interval. The records (January – December 2013) were well maintained.

There were no deliveries of RSPO certified CPO and certified palm kernel since they have been sold under ISCC scheme. The system of delivery that was deducted from the material accounting system according to conversion ratios was available.

There were no deliveries of RSPO certified CPO and certified palm kernel since they have been sold under ISCC scheme. The system of delivery only conducted from a positive stock available.

3.4. The following trade names should be used and specified in relevant documents, e.g. *product name*/MB or Mass

Balance. The supply chain model used should be clearly indicated.

The procedure of Traceability (AA-MPM-OP-1400.17-R3) described that product name and Supply Chain model (MB) will be specified in relevant document, e.g. sales note, delivery note, weighbridge card, etc. No physical delivery of RSPO certified CPO and palm kernel yet.

3.5. In cases where a mill outsources activities to an independent palm kernel crush, the crush mill fails under the responsibility of the mill and does not need to be separately certified. The mill has to ensure that the crush is covered through a signed and enforceable agreement.

4. Sales and good out

No outsourced activities available.

Compliant

Compliant

Compliant

Compliant

Compliant

Compliant


Audit Report



4.1. The facility shall ensure that all sales invoices issued for

RSPO certified products delivered includes the following information: a) the name and address of the buyer b) the date on which the invoice was issued c) a description of the product, including the applicable supply chain model (Segregated or Mass Balance) d) the quantity of the products delivered e) reference to related transport documentation

5. Training

The organisation has established relevant documentation, e.g. sales note, delivery note and weighbridge card for RSPO certified products delivery including: the name and address of the buyer, the date on which the invoice was issued, a description of the product including the applicable supply chain model, the quantity of the product delivery and reference to related transport documentation, No physical delivery of certified CPO and palm kernel. Delivery only conducted for uncertified CPO and palm kernel.

5.1. The facility shall provide training for all staff as required to implement the requirements of the Supply Chain

Certification Systems

6. Claims

6.1 The facility shall only make claims regarding the use of or support of RSPO certified oil palm products that are in compliance with the RSPO Rules for

Communications and Claims.

Training for all personnel regarding implementation of Supply Chain

Certification System has been provided both for staff and operator/administration level on October 31 st

2013

No claim has been made since there was no physical delivery of

RSPO certified CPO and PK. The facility has awareness of the using of claim as required by RSPO Rules for Communications and Claims.

STATUS

(NC/AoC/

Compliant)

Compliant

Compliant

Compliant


Audit Report

3.3.2.2 Supply Chain Certification System

Supply Chain Certification System

Have the client made aware that until they receive written confirmation of their RSPO Supply Chain certification registration and its expiry date that they are not certified and cannot make any claims concerning registration?

Have the client made aware what actions they may have to complete before certification can proceed?

Have the client made aware of the findings of the audit team including any deficiencies which may result in a negative certification decisions or which may require further actions to be completed before a certification decision can be taken?

Have the client made aware that when there is a projected overproduction, SAI Global shall decide whether an interim visit is required?

Have detail records been compiled of the closing meeting including:

 a list of the participants in the meeting

 records of certified FFB received on monthly basis

 records of CSPO and certified PK produced

 records of CSPO and certified PK sold (under GreenPalm and UTZ system) to each buyer

Have the client made aware that the findings of the audit team are tentative pending review and decision making by the duly designated representatives of the certification body?

STATUS

(YES/NO)

Yes

Yes

Yes

Yes

Yes

Yes


Audit Report

3.4 Recommendation

The recommendation from this audit is your certification can proceed as a producer of RSPO

Certified Sustainable Palm and Palm Kernel, Mass Balance Model.

Audit recommendations are always subject to ratification by RSPO.

This report was prepared by: Eko Purwanto, Bayu Abirowo, Dirgantara Bayu Lesmana, Edy

Widodo and Iwan Setiawan.

3.5 Environmental and social risk for this scope of certification for planning of the surveillance audit



Environmental risk: compliance with regulations, hazardous waste management, RKL RPL reporting



Social risk: compliance with regulations



OHS: prevention of hazard and risk

3.6 Acknowledgement of Internal Responsibility and Formal Sign-off of Assessment

Findings

Signed for and on behalf of PT. SAI Global Indonesia

Inge Triwulandari

Technical Manager

Date September 15, 2014


Audit Report

Date

20.01.2014

Auditor

Appendix A

– Audit Plan

Audit meetings plus functions/ processes/ areas/ *shifts audited:

Day 1

Eko, Bayu,

Tara, Edy

Travelling Jakarta - Pekanbaru – Site

(Peranap)

# Shifts*

Times*

From

– To

First flight by

Garuda

21.01.2014

All

Edy

Bayu

Tara

Eko

Day 2

Office

Opening meeting

Document review & Site Visit

Criteria: 2.2 indicator major 1, 2

Criteria: 3.1 all indicators

Criteria: 4.1 indicators major 1 and minor 1,2

(estate)

Criteria: 1.1, 1.2 all indicators

Criteria: 2.1 all indicators (social and human resources)

Criteria: 2.2 indicator major 3, and minor 1, 2


Criteria: 4.6 indicator minor 2 and 3


Criteria: 5.1 indicator major 1

Criteria: 6.1 indicator major 1 and minor 1,2,4

Criteria: 6.2, 6.3, 6.4, 6.5, 6.6, 6.7, 6.8, 6.9,

6.10, 6.11 all indicators


Criteria: 2.1 all indicators (Occupational Health and Safety)

Criteria: 4.1 indicator major 2 and minor 1, 2

(mill)



Criteria: 4.4 indicator minor 1 (estate), 2, 3

Criteria: 4.6 indicator major 4 (estate)

Criteria: 5.1 indicator major 2 and minor 1

Criteria: 5.3 all indicators (estate)



Criteria: 6.1 indicator major 1 and minor 2,3


Day 3

08.00

08.30 am

05.00 pm

08.30 am

–

–

05.00 pm

08.30 am

05.00 pm

08.30 am

–

–

05.00 pm

22.01.2014

QEF08sa.RSPO.01 / Issue Date: July 15 th

, 2013 © SAI Global Indonesia Copyright 2009 Page 94 of 118

– 08.30

Audit Report

Date Auditor


# Shifts*

Times*

From – To

Edy

Eko

Bayu

Tara

Site Visit

Criteria: 4.1 indicators major 1 and minor 1,2

(estate)




Criteria: 4.6 indicators major 1,2, 3 and minor

1

Criteria: 5.5 indicator major 1,2

Criteria: 4.4 indicator minor 1,2,3






Criteria: 6.1 indicator major 1 and minor 2,3


Public Consultation

Interview with labour union: SP and Gender

Committee

Interview with employees of Estate

Interview with local community

Site Visit (Mill & Estate)

Criteria: 4.1 indicators major 2 and minor 1, 2

(mill)



08.00 am –

05.00 pm

08.00 am –

05.00 pm

08.00 am

05.00 pm

08.00 am

–

–

05.00 pm

23.01.2014

Iwan

Edy

Eko

Bayu

Traveling Jakarta-Pekanbaru-Site

Document review

RSPO



Day 4

Audit continue (legal aspect and best agricultural practice)

RSPO SCCS

Audit continue (environmental aspect)

Site visit: Observation of Facility in Topaz Mill and Estate and Seed Garden Estate

Audit continue (social aspect)

08.00 am

05.00 pm

08.00 am –

03.00 pm

08.00 am –

03.00 pm

08.00 am

–

–

03.00 pm



Audit Report

Date Auditor

Tara

Iwan

All


Audit continue (occupational health and safety aspect and good manufacturing practices)

Site Visit

RSPO



Closing Meeting

# Shifts*

Times*

From – To

08.00 am –

03.00 pm

08.00 am –

03.00 pm

03.00 pm

All Travel Site – Pekanbaru Pm

24.01.2014 Day 5

All Pekanbaru – Jakarta Am

All applicable requirements of relevant standards were covered during the audit of the ‘Functions/Processes/Areas. *

Enter shift details only where applicable.



Audit Report

Appendix B – Nonconformities and Opportunity for Improvement Summary

RSPO Principle and Criteria, Indonesian National Interpretation

Activity #: NA Client:

PT. PT. Rigunas Agri Utama

Peranap Mill and its supply base

App/Cert: FMS40006

Site: Kab. Indragiri Hulu, Riau Function/Area/Process: Estate and Mill

Std. and Clause No(s):

RSPO Certification

System clause 4.2.4

NCR#:

Section 1- Details of non-conforming situation:

2014-01 Category: Major

Non-conforming situation:

Evidence of compliance with partial certification requirements can be shown during audit.

Requirement: RSPO Certification System clause 4.2.4

Objective evidence:

No evidence that the organisation has evaluated partial certification requirements for un certified unit.

Due Date: March 23 rd

2014

Audit Team

Leader

Name Eko Purwanto

Date: 23/01/2014

Organisation’s acknowledgement of receipt of NCR

Name

Date:

Welly Pardede

23/01/2014

SAI Global Verification Method :

Off site (document verification)

Section 2- Organisation’s Response:

Root Cause Analysis :

- Person interviewed during audit did not understand partial certification requirements of RSPO certification system

- Internal audit actually has been done by Regional Office for assessing partial certification requirements of

RSPO certification system

- Internal audit reports for un-certified unit was not available at the time of audit

Correction with completion dates:

Submit internal audit report for un-certified units as evidence of compliance with partial certification requirements to SAI Global Indonesia

Corrective Action Taken/Planned (with completion date(s):

Assign person in charge for fulfilment of partial certification requirements and disseminate information of partial certification requirements of RSPO certification system

Ensure that evidence of internal audit of un-certified units are available during RSPO certification audit

Organisation Representative : Name: Welly Pardede Date: 21/03/2014

Section 3- SAI Global Response Review:

Response was acceptable please see section 4 for details. Reviewer: Eko Purwanto Date: 23/03/2014

Section 4- SAI Global Verification of Corrective Action for effectiveness

- RSPO Internal Audit report for un-certified units have been shown, the report indicated that the organisation has reviewed requirements of RSPO certification system section 4.2.4. e, f, g, and h. The internal audit report indicated that partial certification requirements have been met.

- Management has appointed SPO officer to ensure that all partial requirements to be covered during RSPO

Internal Audit report, and to ensure that evidence of compliance with partial certification requirements are available and can be shown during audit.

NCR 2014-01 was closed

Section 5- SAI Global NCR Closure:

Name: Eko Purwanto Date: 23/03/2014



Audit Report


PT. Rigunas Agri Utama Peranap

Mill and its supply base

App/Cert: FMS40006

Site: Kab. Indragiri Hulu, Riau Function/Area/Process: Mill


RSPO Criterion 2.1. indicator major 1

NCR#:




There was no documented evidence of compliance with laws and regulations.

Requirement: RSPO Criterion 2.1. indicator major 1

Objective evidence: a. Compliance with several laws and regulations have not been evaluated, e.g.


- Per.Men LH 21/2008 (Baku Mutu Emisi Sumber tidak bergerak),

- Per.Menkes 416/1990, Permenaker No.25/2008 (Diagnosis PAK),

- KepMenaker No.609/2012 (Pedoman Penyelesaian kasus kecelakaan kerja dan PAK).

- Per.Gub Riau No. 35/2007 (Limbah cair) b. Based on latest resume medical check-up of audiometry test it was noted 16 mills employees and 34 estate employees were not in normal condition (hearing losses) also based on spirometer it was noted 22 estate employees were had lungs restriction, however there was no further investigation (anamneses and diagnoses) from the medical doctor which is required by Permenaker No.2/1980 article 3 point 6. c. Some workers have not been covered by national insurance program (Jamsostek) as required by

Kepmenakertrans no.150/1999, e.g. some PHL workers (81 harvesters and 62 people in maintenance work)


2014

Audit Team

Leader

Name Eko Purwanto

Date: 23.01.2014


Name

Date:

Welly Pardede

23/01/2014




Root Cause Analysis : a. Evaluation of legal compliance regarding:


- Per.MenLH 21/2008 (Baku Mutu Emisi Sumber tidak bergerak),

- Per.Menkes 416/1990, PermenakerNo.25/2008 (Diagnosis PAK),

- KepMenakerNo.609/2012 (Pedoman Penyelesaian kasus kecelakaan kerja dan PAK).

- Per.Gub Riau No. 35/2007 (Limbah cair)

Were not done because there was no appointed personnel (Humas) to conduct the monitoring of evaluation. b. There has been no further action regarding the illness of employees based on Medical Check Up because the unit has no understanding about the further action.

c. Not all estate PHL workers (81 members’ harvesters and 62 members’ up-keeper) registered in the national insurance program (Jamsostek) because there was no monitoring about the membership of

Jamsostek.

Correction with completion dates : a. Conduct evaluation of legal compliance, legal aspects regarding:


- Per.MenLH 21/2008 (Raw Mutu Emisi Sumber tidak bergerak),


- KepMenakerNo.609/2012 (Pedoman Penyelesaian kasus kecelakaan kerjadan PAK).

- No. Per.Gub Riau. 35/2007 (Limbah cair) b. Milll: Measuring the noise level in the work area to avoid occupational diseases

Estate: Each worker who was exposed by the risk of occupational disease based on Medical Check Up hired to another job.


Audit Report c. Registering PHL employees (81 members of harvester and 62 members of up-keeper) in to the national insurance program (Jamsostek).

Completion date: 28/02/2014

Corrective Action Taken/Planned (with completion date(s): a. KTU (head of administration) responsible for documenting and ensuring completeness of the content of legal compliance evaluation document through regulation updates in Legal Compliance Evaluation file. b. KTU ensure all MCU identification results, if there were abnormalities of workers based on the results of the MCU then immediately performed further action. c. Note / record all the workers who were not registered in the national insurance program (Jamsostek) and issue letter of confirmation from the Manager to KTU regarding responsibility of KTU to monitor each employee’s Jamsostek membership.





- Evaluation of compliance in regards to legal aspects regarding:


- Per.MenLH 21/2008 (Raw Mutu Emisi Sumber tidak bergerak),


- KepMenakerNo.609/2012 (Pedoman Penyelesaian kasus kecelakaan kerjadan PAK).

- No. Per.Gub Riau. 35/2007 (Limbah cair) was evident

- Noise level measurement result was available and mutation letter of employee who were exposed by to the risk of occupational disease based on Medical Check Up was also available.

- Registration letter of PHL worker to national insurance program (Jamsostek) was available.

- KTU responsibilities have been added by the management including updating regulation and applicable laws in the Legal Compliance Evaluation. Added responsibilities also cover ensuring immediate further action if there any abnormalities of workers based on the results of the MCU.

NCR 2014-02 is closed




Audit Report




App/Cert: FMS40006

Site: Kab. Indragiri Hulu, Riau Function/Area/Process: Estate



NCR#:




Maintenance has not been carried out entirely on the BPN peg conforming to the BPN measurement; measurement certificate no. 01/INHU/2000, and Special Situations Map dated 01/08/1997 no. 12/1997, a map with a scale of 1 : 40,000.


Objective evidence:



Map of HGU pegs was not entirely equipped with BPN numbering and coordinate and peg conditions was poorly maintained.



Records / documents such as map of BPN pegs, list of BPN pegs with its coordinates and maintenance of pegs (legal boundaries) cannot be shown during audit.


2014

Audit Team

Leader

Name Eko Purwanto

Date: 23.01.2014


Name

Date:

Welly Pardede

23/01/2014





1. Due to the installation of HGU (concession) peg was old, so the numbering was no more clearly visible.

2. Records of concession map and the coordinates were not properly maintained.

3. Maintenance of concession peg has not been done entirely.

Correction with completion dates:

1. Completing HGU peg numbers accordance with the peg number in the concession map.

2. Crosscheck HGU peg numbers with the coordinate point in the concession map.

3. Performed and recorded maintenance of HGU peg.



Performed HGU peg monitoring in six monthly basis. Inspection and maintenance of peg report has already included cleaning and replacement of damage pegs. Humas (public relation) has responsibility to conduct the process.



Response is acceptable please see section 4 for details. Reviewer: Eko Purwanto Date: 21/03/2014


- HGU peg number has been completed and the concession coordinate map was available so that the appointed personnel (sustainability officer) can performed crosscheck between coordinate points in the map with HGU peg in the field.

- Records of HGU peg maintenance were available in the “Laporan Pemeriksaan dan Perawatan Patok

Batas” and program of HGU peg monitoring was available in “Jadwal Pemeriksaan dan Perawatan Patok

Batas” scheduled in June and December.

NCR 2014-03 was closed



Audit Report





App/Cert: FMS40006



RSPO Criterion 4.4 indicator minor 2

NCR#:


2014-04 Category: Minor


BOD of mill effluent was not complied ?with the environmental limit.

Requirement: RSPO Criterion 4.4 indicator minor 2

Objective evidence:

According to Report of Analysis of mill effluent dated December 5 th

2013, BOD value was 9,673.5 mg/l, while the standard based on KepMenLH 28/2003, Pergubri 35/2007, SNI 06-6989.72-2009 and RKL dokumen was 5000 mg/l.

Audit Team

Name Eko Purwanto

Organisation’s acknowledgement of

Name Welly Pardede

Leader Date: 23.01.2014 receipt of NCR

Date: 23/01/2014





Circulation pump available was only one unit, so that impacted to increased value of BOD.

Correction with completion dates :

Installing one more circulation pump.


Corrective Action Taken/Planned (with completion date(s) :

Ensure that both circulation pump were operates by records both Hour Machines.





Another circulation pump has been installed so that now there were two circulation pumps. Record of both circulation pump operation (hour machine) was available. Result of analysis from environmental forensic laboratory of University of Riau dated December 23 rd

2013 was available and the result is that BOD level was

3,185 mg/L (normal).

NCR 2014-04 is closed.




Audit Report




App/Cert: FMS40006



RSPO Criterion 4.7 indicator major 1

NCR#:




There were no clear rules and/or mechanism to ensure of transporter personnel (especially the palm shell transporter PT. SDS/PT. SK) were concern about OHS regulation as it was observed that several transporter personnel did not use proper PPE while climbing the trucks which were above 2 metres high.

Requirement: RSPO Criterion 4.7 indicator major 1

Objective evidence:

Based on the observation within the audit period, it was sighted several personnel of transporter, especially transporter of palm shell (PT SDS/ PT SK) was not wearing PPE (helmet and shoes) while loading the palm shell at the mill area. The transporter personnel also sighted climbing the trucks (above 2 metres high) to assist the loading activity.


2014

Audit Team

Leader

Name Eko Purwanto

Date: 23.01.2014


Name

Date:

Welly Pardede

23/01/2014





There was still lack of effective communication with the transporter (PT.SDS / PT.SK) regarding the importance of the use of PPE and safety when working on the truck.


Disseminate to the transporter (PT.SDS / PT.SK) regarding the use of PPE and the importance of safety when working on the truck.


Established mechanism regarding the use of PPE for contractors which enter factory work area.





- Records related dissemination regarding the use of PPE and the importance of safety to the contractor were available.

- Mechanism regarding the use of PPE for contractors which enter factory work area was established in

“ Mekanisme Pemakaian APD bagi kontraktor memasuki areal pabrik ”.

NCR 2014-05 was closed.




Audit Report




App/Cert: FMS40006

Site: Kab. Indragiri Hulu, Riau Function/Area/Process: Mill and Estate


RSPO Criterion 4.7 indicator minor 3

NCR#:


2014-06 Category: Minor


Several high-risk routine activities were not covered in Risk Analysis in POM.

Requirement: RSPO Criterion 4.7 indicator minor 3

Objective evidence:

Based on the observation during audit, it was sighted several personnel of transporter, especially transporter of palm shell (PT SDS/PT SK) was not wearing PPE (helmet and shoes) while loading the palm shell at the mill area. The transporter personnel also sighted was climbing the trucks (above 2 meters high) to assist the loading activities.

Audit Team

Name Eko Purwanto


Leader

Date: 23.01.2014 receipt of NCR

Name

Date:

Welly Pardede

23/01/2014





Risk analysis has not been performed for work in a limited space and for the workers who work at heights.


1. Conducting risk analysis in confined spaces and for work at height

2. Provide gas detector

3. Provide Full Body Harness



Established job safety analysis before doing work in confined spaces and working at heights





- Risk analysis in confined spaces and for work at height has been established.

- Gas detector and full body harness have been provided.

- Job safety analysis before doing work in confined spaces and working at heights has been established.

Documented system that required job safety analysis was done before working was stated in the Job Safety

Analysis format, it was also stated that Ahli K3 (OHS personnel) responsible to ensure that job safety analysis was done before working and the Manager has full responsibility for all activities in regard technical, non-technical and safety aspects.

NCR 2014-06 is closed.




Audit Report




App/Cert: FMS40006



RSPO Criterion 5.3 indicator major 2

NCR#:




Hazardous waste temporary storage exceeds the time limits specified in the permit storage (4/BPMD&PPT/BP-

LB3/XI/2013).

Requirement: RSPO Criterion 5.3 indicator major 2

Objective evidence:

Based on the existing manifest, hazardous waste shipment was made on May 22 nd

, 2013 and December 9 th

,

2013, the time interval exceeds the maximum temporary storage limit (90 days) specified in the license no.

4/BPMD & PPT/BP-LB3/XI/2013.

Due date: March 23 rd

2014

Audit Team

Leader

Name Eko Purwanto

Date: 23.01.2014


Name

Date:

Welly Pardede

23/01/2014





Monitoring of hazardous waste transportation was not performed consistently.


Inform Regional Office 2 to transport hazardous waste before reaching 90 days and established schedule of hazardous waste transport in coordination with Regional Office 2 Department of Environment.


Environment Staff of Regional Office Pekanbaru will ensure that temporary storage of hazardous waste was not over than 90 days through the use of temporary storage logbook.





- Program of hazardous waste transportation has been established in “ Rencana dan Realisasi Pengangkutan

Limbah B3 ”, for Peranap Mill was scheduled in March, June, September and December.

- Logbook of hazardous waste temporary storage was available in “ Lembar Kegiatan Penyimpanan Limbah

B3 ” covers type of hazardous waste, date of entry, source, quantity, date taken out, quantity taken out and destination, evidence that Environment Staff of Regional Office Pekanbaru has monitored the logbook was available.





Audit Report




App/Cert: FMS40006



RSPO Criterion 6.2. indicator minor 1

NCR#: 2014-08 Category:



The outside grower has not been recognized as stakeholder for sustainability support

Major


Objective evidence:

The stakeholder list did not contain any local farmers as outside supplier.


2014

Audit Team

Name Eko Purwanto


Leader

Date: 23.01.2014 receipt of NCR

Name

Date:

Welly Pardede

23/01/2014

SAI Global Verification Method : (record if site visit is required or what information is to be provided):




Source of outside FFB supplier has not been added to stakeholder list because unit personnel (KTU) were not aware that FFB suppliers are part of stakeholder.


Adding outside FFB supplier into the stakeholder list



Mill KTU (Head of administration) responsibility has been added in regard of ensuring that if there was addition of

FFB Supplier will be added in the stakeholders list.





- Outside FFB supplier has been added to the stakeholder list including address, contact person, phone number should be mentioned in detail

- Responsibilities of Mill KTU has been added in regard of ensuring the addition of outside FFB Supplier to the stakeholders list if there was new FFB supplier.





Audit Report




App/Cert: FMS40006

Site: Kab. Indragiri Hulu, Riau Function/Area/Process: Estate



NCR#:




The company doesn’t have appropriate measures to preserve existing HCV.


Objective evidence:

The Company doesn’t have SOP which is specific for the HCV management.


2014

Audit Team

Leader

Name Eko Purwanto

Date: 23.01.2014






Name

Date:

Welly Pardede

23/01/2014

Procedure of HCV management has been established, however document keeping has not been carried out properly, makes it difficult to identify quickly.


Shows the procedure of specific HCV management.



Improving documentation system by appointing KTU as personnel in charge to monitor the availability and updating of all documented procedures.






- Procedure of specific HCV management was available and can be shown.

- KTU responsibilities have been added by the management in regard ensuring the availability and updating of documented procedures.

NCR 2014-09 is closed




Audit Report




App/Cert: FMS40006




NCR#:




Measures taken for protecting species and their habitats included actions to control any illegal or inappropriate hunting, fishing or collecting activities have not been in accordance with relevant laws.


Objective evidence:

1. The HCV Management Plan and its implementation did not cover conservation and monitoring of rare or threatened species and their habitats, which were HCV 1 key elements: Southeast Asian Box Turtle Coura amboinensis , and Southeast Asian Soft shell Turtle Amyda cartilaginea .

2. Controls of illegal wildlife hunting, fishing, or harvesting, have not been implemented in a planned and consistent manner. Efforts were limited to the establishing of information/warning/prohibition boards.


2014

Audit Team

Name Eko Purwanto


Name Welly Pardede

Leader Date: 23.01.2014 receipt of NCR

Date: 23/01/2014





Earlier version of Conservation Management Plan (CMP) did not cover all the key species suggested by HCV

Assessment Report because it did not refer to the specific report of each unit.


1. CMP has been revised by adding monitoring program of endangered habitat and key species based on

HCV Assessment Report of each unit.

2. Shows laws and regulations in program of Conservation Management Plan in regard wildlife hunting, fishing and harvesting.



Estate manager ensure that Conservation Management Plan is implemented and periodically reviewed





- Monitoring Program of endangered habitat and species (key species) based on HCV Assessment Report of

PT. Rigunas Agri Utama-Peranap Mill has been added in the Conservation Management Plan, including the method of line transect, personnel in charge and due date.

- In the Conservation Management Plan, it has been described that Estate Manager and Assistant were responsible for implementation of CMP, including direct method which is conducting dissemination in regard of prohibition of hunting in production area and indirect dissemination through the use of signboard in regard of prohibition of wildlife hunting.

- Laws and Regulation have been added in the CMP as the basic of illegal wildlife hunting control, e.g.:

 IUCN Red list and CITES (international regulation for protected wildlife)

 UU No.5/1990 (Conservation of Natural Resources and Ecosystems)

 PP No.7/1999 (List of protected plants and animals)

 Kepres No.32/1990 (Management of protected areas).




Audit Report


Mill Supply Chain Certification System

None

Opportunities for improvement – RSPO P & C

Criterion 5.2 indicator major 2



It could be considered to improve the HCV management and monitoring SOP.

Criterion 5.2 indicator minor 1



It could be considered to improve HCV awareness by involving other participants outside Estate.



It could be considered to improve information/warning/prohibition boards.

Opportunities for improvement – RSPO SC

None


Audit Report

Appendix C – Stakeholder’s issues and comment

Date

22 nd

of

January 2014

Stakeholder Observation

22 nd

of

January 2014

Union Leader The union name was registered as “PUK Serikat Pekerja

Pertanian dan Perkebunan Serikat Pekerja Seluruh Indonesia PT. Riguna

Agri Utama” which was founded on October 11 th

2012. Meeting with management was held as necessary such as: sponsorship for national celebration event, fringe benefit payment for “hari raya”, etc. No significant complaint by workers so far.

Gender committee

The gender committee has done gender policy awareness and regular meeting with female workers in monthly basis. No harassment identified since the committee was founded on October 21 st

, 2012. Minutes of the meeting were also documented.

22 nd

of

January 2014

22 nd

of

January 2014

Society leaders

As result from the interview, basically the company has implemented few

CSR activities to support local communities in term of infrastructure development, health services, provision of education facilities, etc. No negative feedback reported by interviewees. No land conflict identified where the land was previously granted by government (not taken over from local communities). As told by the leaders, there was no air or water pollution caused by the company due to continuous effort in managing the environmental risks. The company has also employed local peoples (in majority) both for Mill and Estate.

Smallholders Two smallholders from different KUD (farmer groups) were interviewed. In general, the smallholders were satisfied with the company in term of supply mechanism, development support and pricing. FFB payment was also made timely through bank transfer.

22 nd

of

January 2014

Independent

FFB suppliers

The out grower was selected for years as FFB supplier for the company.

Agreement was documented in term of supply capability, term of payment including TBS selection criteria. Payment was also made to out grower in a few days (normally 2-3 days) after invoicing.

22 nd

of

January 2014

Workers

(fertilizing, spraying, mill processing, workshop)

All workers were provided with basic facilities for free: PPE, housing, electricity, clean water, etc. Wages including overtime pay and bonus were paid timely in accordance to local minimum wage (UMK). Annual leaves and fringe benefit were also applied to workers. No complaints identified so far during interview session with the workers.

There has been no written feedback from letters sent.


Audit Report

Appendix D – Definition of, and action required with respect to audit findings:

RSPO Principle and Criteria, Indonesian National Interpretation:

Major Nonconformities occur when system is failing to meet a relevant compulsory indicator.

Action required : This category of findings requires SAI Global to issue a formal NCR; to receive and approve client’s proposed correction and corrective action plans; and formally verify the effective implementation of planned corrections and corrective action. Correction and corrective action plan must be submitted to SAI Global for approval within 14 days of the audit. Follow-up action by SAI Global must ‘close out’ the NCR or reduce it to a lesser category within 90 days or less where specified.

Certificate of conformance to the RSPO Criteria cannot be issued while any major nonconformity is outstanding. Major nonconformities raised during surveillance audit shall be addressed within 60 days, or the certificate will be suspended. Major nonconformities not addressed within a further 60 days will result in the certificate being withdrawn.

Minor Nonconformities occur when system is failing to meet other indicators.

Action required : This category of findings requires SAI Global to issue a formal NCR; to receive and approve client’s proposed correction and corrective action plans; and formally verify the effective implementation of planned corrections and corrective action. In this instance, a certificate may still be awarded providing the root cause of the problem is identified and an acceptable plan is put in place to achieve the outstanding requirements in an agreed time frame. Verification will be made at subsequent surveillance audits. Minor nonconformities will be raised to major if they are not addressed by the following surveillance audit.

Opportunity for Improvement is a documented statement, which may identify areas for improvement, but shall not make specific recommendation(s). Client may develop and implement solutions in order to add value to operations and management systems. SAI Global is not required to follow-up on this category of audit finding.

RSPO Supply Chain Certification System:

Major Nonconformities occur when system is failing to implement and/or maintain requirements of Supply Chain Certification

System.

Action required : This category of findin gs requires SAI Global to issue a formal NCR; to receive and approve client’s proposed correction and corrective action plans; and formally verify the effective implementation of planned corrections and corrective action.

When non-conformances rose after the certification, RSPO shall be informed of these non-conformances within 7 days since non-conformance rose. A maximum of one month is given to the certified client to satisfactorily address the non-conformances.

The effectiveness of the action taken for the non-conformances shall be assessed before closing out the non-conformances.

Should the non-conformances not be addressed within the one month maximum time frame, a suspension or withdrawal of the certificate and a full re-audit may be necessary.

Where objective evidence indicates that there has been a demonstrable breakdown in the supply chain caused by the certified client’s action or inactions, and that palm oil product that has been or is about to be shipped is falsely identified as RSPO certified product, immediate action needs to be taken by SAI Global, and the RSPO Supply Chain certification shall be suspended until such time that it has been addressed. The RSPO shall be notified within 24 hours of this occurrence and further impacts on relevant supply chain certifications.

Area of concern issued when there is an area of the system for which the client is required to investigate potential nonconformity.

Action required : SAI Global may require client to formulate preventive action plan for approval prior to next planned audit/certification decision or alternatively may follow up client’s preventive action at the next planned audit. Lack of client attention to such issues implies that a preventive action system is not working effectively.

Opportunity for Improvement is a documented statement, which may identify areas for improvement, but shall not make specific recommendation(s). Client may develop and implement solutions in order to add value to operations and management systems. SAI Global is not required to follow-up on this category of audit finding.


Peranap_Mill_Report_Rigunas_Ag..

Audit Report

Certification Audit for

PT. Rigunas Agri Utama Peranap Mill and Its Supply Bases

FMS40006

RSPO Membership number: 1-0022-06-000-00

Audited Address:

Peranap Mill:

Simelinyang, Pauh Ranap, Sengkilo Village, Peranap District,

Indragiri Hulu Regency, Riau Province, Indonesia

Its supply base:

Simelinyang, Pauh Ranap, Sengkilo Village, Peranap District,

Indragiri Hulu Regency, Riau Province, Indonesia

Date of audit: 23/01/2014

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Peranap_Mill_Report_Rigunas_Ag..

Audit Report

Certification Audit for

PT. Rigunas Agri Utama Peranap Mill and Its Supply Bases

FMS40006

RSPO Membership number: 1-0022-06-000-00

Audited Address:

Peranap Mill:

Simelinyang, Pauh Ranap, Sengkilo Village, Peranap District,

Indragiri Hulu Regency, Riau Province, Indonesia

Its supply base:

Simelinyang, Pauh Ranap, Sengkilo Village, Peranap District,

Indragiri Hulu Regency, Riau Province, Indonesia

Date of audit: 23/01/2014

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