RSPO Supply Chain Certification Standard 2014 Transition Toolkit

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1 RSPO Supply Chain Certification Standard 2014 Transition Toolkit ABSTRACT The RSPO recently published a revised version of its Supply Chain Certification Standard (SCCS) document. This is the first update since November 2011 and the new version of SCCS was implemented on 1 January These standards will become mandatory starting from 1 April This transition toolkit discusses the changes in the new standard and what these changes mean for organisations and their RSPO certification systems. Guidance on proficient understanding of the changes and to manage the transition process will help to ensure that your organisation is consistent and prepared for assessment against the new standard. INTRODUCTION The Roundtable on Sustainable Palm Oil (RSPO) is a global, multi-stakeholder initiative on sustainable oil palm products. Members of RSPO and participants in its activities come from many different backgrounds, including plantation companies, manufacturers and retailers of oil palm products, environmental and social NGOs, and from many countries that produce or use oil palm products. The primary aim of RSPO is to promote the growth and use of sustainable palm oil through cooperation within the supply chain and open dialogue between its stakeholders. The oil palm products may go through many production and logistical stages between the grower and the product. The General Chain of Custody requirements of the RSPO Supply Chain Standard shall apply to any organisation throughout the supply chain that takes legal ownership and physically handles RSPO Certified Sustainable oil palm products at a location under the control of the organisation including outsourced contractors. Any oil palm product can be traded through one of four supply chain models that are approved by RSPO: Identity Preserved, Segregated, Mass Balance and Book and Claim. SCOPE The oil palm products may go through many production and logistical stages between the grower and the product. The General Chain of Custody requirements of the RSPO Supply Chain Standard shall apply to any organisation throughout the supply chain that takes legal ownership and physically handles RSPO Certified Sustainable oil palm products at a location under the control of the organisation including outsourced contractors. Any oil palm product can be traded through one of four supply chain models that are approved by RSPO: Identity Preserved Segregated Mass Balance Book and Claim For the first three of these, supply chain controls from the mills through to the certified end product are required. This document sets out the minimum requirements for an organisation controlling RSPO certified oil palm products for the RSPO Identity Preserved, Segregation, and Mass Balance supply chain models. SGS (Malaysia) Sdn. Bhd. Systems & Services Certification Unit th Floor Bangunan Malaysian Re No. 17 Lorong Dungun Damansara Heights Kuala Lumpur Malaysia (10871-T) P.O. Box Kuala Lumpur Malaysia t +6 (03) f +6 (03)

2 KEY UPDATES OF SCCS 2014 CHAPTER 4 - DEFINITION In the revised definitions section, new definitions were added including (RSPO) Claim, Physical Handling and Processing Aids. Terms RSPO Claims Physical Handling Processing Aids Definitions Any communication to any stakeholder group in any format of the presence of certified sustainable oil palm product in a specific product or product groups. Receipt, storage and dispatch or a combination of these where there is a risk of mixing certified and non-certified product. a) Substances that are added to a food during the processing of such food but are removed in some manner from the food before it is packaged in its finished form. b) Substances that are added to a food during processing, are converted into constituents normally present in the food, and do not significantly increase the amount of the constituents naturally found in food. c) Substances that are added to a food for their technical or functional effect in the processing but are present in the finished food at insignificant levels and do not have any technical or functional effect in that food. CHAPTER 5 - GENERAL CHAIN OF CUSTODY REQUIREMENTS FOR THE SUPPLY CHAIN CLAUSE 5.1: Applicability of the general chain of custody requirements for the supply chain 5.1.1: The General Chain of Custody requirements of the RSPO Supply Chain Standard shall apply to any organisation throughout the supply chain that takes legal ownership and physically handles RSPO Certified Sustainable oil palm products : This clause is added to confirm that all traders and distributors require a license obtained from RSPO to sell RSPO certified products although they do not require certification. When selling RSPO certified products, a licensed trader and/or distributor must pass on the certification number of the product manufacturer and the applicable supply chain model : This clause clarifies that processing aid involving palm oils do not need to be included in the organisation s scope of certification. CLAUSE 5.2: Supply Chain Model 5.2.1: This clause is added to confirm the declassification of RSPO claims where the site can only use the same supply chain model as its supplier or go to a less strict system. Downgrading can only be done in the following order: CLAUSE 5.3: Documented Procedures IP SG MB Change in words: from facility to site. (This word is applied throughout the standard.) 2/9

3 5.3.1: Modification in standard from name of person with overall responsibility to Identification of the role of the person having overall responsibility for and authority over the implementation of these requirements and compliance with all applicable requirements. Complete and up to date records and reports that demonstrate compliance with the supply chain model requirements. CLAUSE 5.4: Purchasing and Goods In 5.4.1: Adjustment in requirement to audit the validity of the Supply Chain Certification of suppliers for all sites that are SC certified at least annually (previously within a reasonable timeframe). This shall be checked via the list of RSPO Supply Chain Certified sites on the RSPO website. CLAUSE 5.5: Outsourcing Activities 5.5.1: The organisation has to ensure that the operation seeking to outsource activities to independent third parties comply with the requirements of the RSPO Supply Chain Certification Standard. Note: The accreditation body will run through a risk assessment, on a site-by-site basis to identify whether the outsourced activity causes any significant level of risk that will justify an audit. In situations where the outsourced activity is carried out by a different RSPO certified organisation, the possibility of an audit being required will normally be low. CLAUSE 5.6: Sales and Goods Out 5.6.1: The following minimum information for RSPO certified products is made available and this information can be presented across a range of documents. Documents which may carry the minimum information may include: The name and address of the buyer; The name and address of the seller; The loading or delivery date; The date on which the documents were issued; Sales invoice; Delivery note; Certificate of conformity/analysis; Product specification; Contract documentation (e.g. bill of lading); Product packaging (unique identification/batch number); A description of the product, including the applicable supply chain model (Identity Preserved, Segregated or Mass Balance or the approved abbreviations): The quantity of the products delivered; 3/9

4 Any related transport documentation; Supply chain certificate number; A unique identification number. Note: The applicability of abbreviations such as IP, SG, MB and etc within the product information and how the information should be presented is not mentioned. If organizations wish to use alternative terms, such as SEG or MBAL, it can be accepted, as long as it is possible to relate the term to the appropriate supply chain model. CLAUSE 5.7: Registration for Transaction 5.7.1: Formerly, this clause requires supply chain actors who: Are between the mill and final refinery; take legal ownership and physically handle RSPO Certified Sustainable oil palm products; and are part of the supply chain of RSPO Certified Sustainable oil palm products to register their transaction in the RSPO IT platform regardless of where they are in the supply chain at the time of physical shipment as required by the rules set by RSPO. CLAUSE 5.8: Training No momentous changes. The conditions for the organisation to have a defined training plan, which is subject to on-going review and is supported by records of the training provided to staff remains unchanged. Description on that the training shall be specific and relevant to the task(s) performed was included. CLAUSE 5.9: Record Keeping (New Clause) 5.9.1: Prerequisite to maintain accurate, complete, up-to-date and accessible records : All Record retention times are reduced from 5 years to a minimum of 2 years and must comply with legal and regulatory requirements : The organisations are required to keep an up to date record of the volume of RSPO certified oil palm products purchased and claimed over a specified period. Organisations may prefer to prepare the data from their own management record systems. The minimum requirement as part of the audit for the mills will be as follows: Certified raw material purchased: Supplier RSPO certificate number Product Volume 4/9

5 Oil palm product sold (with RSPO claims): Buyer RSPO certificate number Product Volume Note: The specified period, is interpreted as the period between the previous third party audit and the date of the following audit. Note: The information MUST be available on the day of the audit. CLAUSE 5.10: Conversion Factors (New Clause) : This clause is applicable mostly to refineries where a conversion rate must be applied to provide a reliable estimate for the amount of certified output available from the associated inputs. Organisations may determine and set their own conversion rates which must be based upon past experience, documented and applied consistently. Conversion rates shall be periodically tested to ensure accuracy against actual performance or industry average if appropriate. CLAUSE 5.11: Claims : As previously the site shall only make claims regarding the use of or support of RSPO certified oil palm products that are in compliance with the RSPO rules on communications and claims. CLAUSE 5.12: Complaints (New Clause) : The organisation is required have in place and maintains documented procedures for collecting and resolving stakeholder complaints. CLAUSE 5.13: Management Review (New Clause) : The organisation is recommended to hold management reviews at planned intervals appropriate to the scale and nature of the activities undertaken. The input to management review shall include information on: Inputs: Results of audits Customer feedback Process performance and product conformity Status of preventive and corrective actions Follow-up actions from management reviews Changes that could affect the management system Recommendations for improvement. 5/9

6 Outputs: Improvement of the effectiveness of the management system and its processes Resource needs. Note: At least one management review in the period between the last surveillance audit and the next audit shall be conducted by the organisation which covers all of the above information. MODULE A - IDENTITY PRESERVED SUPPLY CHAIN MODEL A.2.1 The site ensures that the RSPO IP oil palm product is kept physically isolated from all other palm oil sources and is uniquely identifiable to a single RSPO certified mill and its certified supply base. All remains unchanged, except for clause A.3.2 which states that, in terms of physical processing procedures, the objective is for 100% identity preserved (IP) material to be reached. MODULE B - SEGREGATION SUPPLY CHAIN MODEL B.2.1 The Segregation approach requires that the RSPO certified oil palm products from certified estates/plantations is kept separate from material from non-rspo certified estates/plantations at every stage of production, processing, refining and manufacturing throughout the supply chain. All remains unchanged, except for clause B.3.2 which states that, in terms of physical separation procedures, the objective is for 100% segregated (SG) material to be reached. MODULE C - MASS BALANCE SUPPLY CHAIN MODEL C.1.1 The Mass Balance (MB) supply chain model administratively monitors the trade of RSPO certified oil palm products throughout the entire supply chain, as a driver for mainstream trade in sustainable palm oil. Two different inventory methodologies for Mass Balance system were included: C4: Continuous accounting system This new system was developed based on the previous system, where a continuous accounting system is in operation and the organization shall ensure that the material accounting system is never overdrawn. Only RSPO data which has been recorded in the material accounting system shall be allocated to outputs supplied by the organisation. C5: Fixed inventory periods This new system is recommended to assist operations when a fixed inventory period is in operation, the organisation shall ensure that the material accounting system is not overdrawn at the time of the inventory. Only RSPO data which has been recorded in the material accounting system within the inventory period shall be allocated to outputs supplied within the inventory period. 6/9

7 C6: Conversion ratios This clause distinguishes the various options available for the organisations to preserve or segregate sustainable palm and palm kernel products and use it to match the sales of equal volumes of palm product derivatives that then carry a Mass Balance claim without requiring a physical or chemical link between the acquired segregated product and the derivative that is sold under mass balance. Refining losses may be neglected but the organisation must choose which option suits it best. C7: Yield schemes C.7.1: The values shown in the Mass Balance Supply Chain Model are fixed and cannot be modified. Organisations may use their own actual yields provided these can be justified during the audit. C.7.2: To calculate how much Mass Balance sustainable products they can sell or claim, companies that purchase Mass Balance sustainable palm kernel products may use their own actual yields provided these can be justified during the audit. MODULE D - CPO MILLS: IDENTITY PRESERVED This section applies particularly to the palm oil mills if the FFB processed by the mill are sourced from its own supply base certified to the RSPO Principles and Criteria. If a mill processes certified and uncertified FFB without physically separating the material then only Module E is applicable. Note: CPO Mills: Segregation was removed from the standard MODULE E - CPO MILLS: MASS BALANCE This section applies to mills which supplies a range of certified and non-certified plantations but do not segregate or separate the process of the different inputs. A mill may be taking delivery of FFB from uncertified growers, in addition to those from its own certified land base. In that scenario, the mill can claim only the volume of oil palm products produced from processing of the certified FFB as MB. The organisation can operate a Mass Balance system and must also meet all registration and reporting requirements for the appropriate supply chain through the RSPO supply chain managing organisation. MODULE F - MULTI-SITE CERTIFICATION As of before, multi-site certification is particularly for organisations that operate multiple sites across a range of physical locations and countries but are brought together under a Central Office and administered using an Internal Control System (ICS). The organization shall define the geographic area, the number and identity of sites, the supply chain model and the types of operations covered by the scope of their multi-site chain of custody system. (Note: Mass balance accounting can only be implemented at site level.) 7/9

8 MODULE G - GROUP CERTIFICATION (New Section) Group Certification is a new section which allows independent organisations acting as separate legal entities in the palm supply chain to come together and agree to adhere to the rules of a Group structure under the guidance of a Group management entity and under the direction of a Group manager, in accordance with an Internal Control System (ICS). Group membership is restricted to those companies which: Are separate legal entities Use up to 500 tonnes of oil palm products per year Employ a maximum of 100 full-time equivalent employees. Group members are not restricted to a single country and can perform across borders but if any member subsequently exceeds the qualification criteria as mentioned above, they must leave the group and obtain their own certification. 8/9

9 THE DEVELOPMENT PROCESS OF 2014 STANDARDS The practice of the 2014 version of the standard became effective on a voluntary basis from 1 January 2015 and its use will be mandatory starting from 1 April Certificate holders will then have until 31 March 2016 to finish their progress towards the 2014 Standard. After 1st April 2015, all audits, initial certification audits and annual surveillance audits will have to be done against the new standards. After this date the 2011 Standard will never again be substantial. If in the audit against the new standards, a non-conformance (NC) has been found, which would not have been a NC in the old standards, this non-conformance will have to be seen as a minor NC. That means that the member will get 1 year to close this kind of NC. If the NC would have been also an NC against the old standard, it is a major NC, as it is now. This transition period, for the closure of these kinds of NC's will be valid until 1st April 2016, after which all NC's will be major, by definition. In the event that a certificate holder has not finished the transition by 31 March 2016 their supply chain certificate will be suspended until such time as they find themselves able to exhibit agreeability. THE SUPPLY CHAIN CERTIFICATES The certificate holder will be issued with a new RSPO supply chain certificate once succeeding with the transition to the 2014 Standard. The new certificate will reference the 2014 Standard but will no longer include a reference to the certificate holder s RSPO representative and contact details. 9/9

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