[ ]Stage 1 [ ]Stage2 [ ]Surveillance

Transcription

1 Roundtable on Sustainable Palm Oil Certification [ ]Stage 1 [ ]Stage2 [ ]Surveillance Plantation Management/Owner Plantation Name Location : SCHEME SMALLHOLDER of PT. Buana Wiralestari Mas, Kijang Mill, IVOMAS TUNGGAL : Kijang Kencana Plasma : Distirict of Kampar, Province of Riau Certificate Code : MUTU-RSPO/013 Date of certificate issue : 17 January 2012 Date of expiry of certificate : 17 January 2017 Assessment Type ST1 ST2 Assessment Date April , 17, 19, 20 June 2012 Report Finalization Date 30 July 2012 PT. Mutuagung Lestari Auditor Octo HPN Nainggolan; Oktovianus Rusmin; Doni; Ibnu Satria Prabudi Nanang Mualib; Octo HPN Nainggolan; Marsudi Eko Santoso Reviewed by Taufik Margani Approved by Tony Arifiarachman Submitted to RSPO on: Approved by RSPO on: Approved by Certification Body on: Mutuagung Lestari Raya Bogor Km 33,5 Number 19 Cimanggis Depok Indonesia Telephone (+62) (21) Fax (+62) (21) /6 agri@mutucertification.com MUTU Certification Approved by RSPO Secretariat on June 2008

2 TABLE OF CONTENT FIGURE Figure 1. Location Map of PT Ramajaya Pramukti Scheme Smallholder SCOPE of the CERTIFICATION ASSESSMENT 1.1 National Interpretation Used Organization Information Type of Assessment Location of Plantations, Mill and Area Statement Description of Supply Base Dates of Plantings and Cycles Approximate Tonnage Certified Other Certifications Time Bound Plan for Other Management Units ASSESSMENT PROCESS 2.1 Certification Body Lead Assessor and Assessment Team Assessment Methodology, Assessment Process and Locations of Assessment Stakeholder Consultation and List of Stakeholder Contacted Determine Next Visit ASSESSMENT RESULT 3.1 Summary of Assessment Report of the RSPO Certification Identification of Findings, Corrective Actions, Observations, Opportunity for Improvement and 29 Noteworthy Positive Components 3.3 Summary of Arising Issues from Public, Management and Auditor Responses CERTIFIED ORGANIZATION S ACKNOWLEDGEMENT OF INTERNAL RESPONSIBILITY 4.1 Formal Sign-off of Assessment Findings 33 APPENDICES 1. List of Stakeholder Contacted in the RSPO Certification Process Assessment Program Glossary Peer Review Report Result of RSPO Committee - RSPO Certification 40 SPO 4006a.4 Prepared by Mutuagung Lestari for Scheme Smallholder of PT Buana Wiralestari Mas i

3 Figure 1. Location Map of Kijang Kencana Plasma PT MUTUAGUNG LESTARI SPO 4006a.4 Page 1

4 1.0 SCOPE OF THE CERTIFICATION ASSESSMENT 1.1 National Interpretation Used National Interpretation, RSPO Principles and Criteria (P&C) for Sustainable Palm Oil Production, Republic of Indonesia - RSPO INA-SWG,Scheme Smallholders October Organization Information Company name PT Buana Wiralestari Mas - IVO MAS TUNGGAL Contact person Ismu Zulfikar Company address Plaza BII Tower 2, 30th Floor JL. MH Thamrin No 51 Kav 22 Jakarta Indonesia Tel (+62-21) Fax (+62-21) ismu-zulfikar@smart-tbk.com Web page address Company status Private Management Representative who completed the application for certification Registered as RSPO member 17 June 2008 Ismu Zulfikar (Head of Environmental Departement) 1.3 Type of Assessment Kijang Palm Oil Mill which processed the production from PT Buana Wiralestari Mas scheme smallholders. Kijang Kencana Plasma (KJNP) is smallholders scheme in partnership with PT Buana Wiralestari Mas Scope of Assessment since 17 March 1999 for Perkebunan Inti Rakyat (Smallholders Nucleus Plantation) Project. The agreement was BWL provide assistance to smallholders and the smallholders sold the FFB to company (Kijang POM) with price agreement accordance to government regulation Type of certificate Single Company names listed in the certificate PT BUANA WIRALESTARI MAS Kijang Mill Number of management unit Kijang Kencana Plasma consist of 8 (eight) Village Cooperative Unit (KUD) which are: Mekarti Buana Jaya, Berkat Ridho, Karya Mukti, Makmur Sejahtera, Panca Warga, Budi Karya, Lestari Jaya and Manunggal Abadi 1.4 Locations of Plantations, Mill and Area Statement Location of estate Name of Estate(s) Kijang Plasma Kencana Location Village of Kijang Jaya, Subdistrict of Tapung Hilir, District of Kampar, Province of Riau GPS Latitude Longitude N E SPO 4006a.4 Page 2

5 1.4.2 Maps ( Figure 1 ) Country Indonesia Region South East Asia Village/Sub District/District/Province Village of Kijang Jaya, Subdistrict of Tapung Hilir, District of Kampar, Province of Riau Tenure Private 8, Ha State Community Area Statement Total area 8, Mature area 8, Description of Supply Base (scheme smallholder production to Kijang Mill) Name of Smallholder Cooperative (KUD) Makarti Buana Jaya Member(s) Total Area (Ha) Planted Area (Ha) FFB (tonnes/year) Yield (tonnes/ha/year) Supplied to Mill FFB (tonnes/year) 506 1, , , , Berkat Ridho , , Karya Mukti , , Makmur Sejahtera 635 1, , , , Panca Warga 612 1, , , , Budi Karya , , Lestari Jaya 511 1, , , , Manunggal Abadi 574 1, , , , TOTAL 4,074 8, , , , Source: Production data June 2011 Mei Product categories FFB/CPO/PK/PKO % 1.6 Dates of Plantings and Cycles Age profile of planted palms* Planting Year Hectarage (Ha) , ,7 SPO 4006a.4 Page 3

6 , ,99 TOTAL (Ha) 8.147, New Development area after November Ha Planting Cycle 25 Years 1.7 Approximate Tonnage Certified Approximate FFB Production (1 June May 2013) Name of Estate(s) Total Area (Ha) Planted Area (Ha) FFB (tonnes/year) Yield (tonnes/ha/year) Kijang Estate 2, , , Scheme Smallholder 8, , , TOTAL 10, , , Approximate Palm Product Production (Kijang Mill production 1 June May 2013 ) Name of Mill Capacity (tonnes/ hour) FFB Processed (tonnes/ year) Out put (tonnes) CPO Palm Kernel PKO Extraction (%) Out put (tonnes) Extraction (%) Out put (tonnes) Kijang Mill , , , *FFB supply from Kijang Estate and Kijang Kencana Plasma (scheme smallholders) Extraction (%) 1.8 Other Certifications ISO 9001:2008/ISO 14001: OHSAS 18001: HACCP Others ISCC (International Sustainability and Carbon Certification) 1.9 Time Bound Plan for Other Management Units IVO MAS TUNGGAL has committed to make time bound plan for all the other management units in implementing the P&C standard or to gain the RSPO certificate. The auditor team had put this plan into consideration in accordance with the RSPO Certification System for Partial Certification. The development and follow up of the plan will be verified and reported in the annual visits. Mill Company Region Mill Estate (FFB Supplier) Time Bound Plan Complete Audit PT. IVOMAS TUNGGAL PT. IVOMAS TUNGGAL SIAK-RIAU SSMM Samsam Mill SSME Samsam Estate 2009 Certified KNDE Kandista Estate 2009 Certified PLPE Palapa Estate 2009 Certified SIAK-RIAU LIBM Libo Mill LIBE Libo Estate 2009 Certified NGLE Nenggala Estate 2009 Certified SRKE Sungai Rokan Estate 2009 Certified SPO 4006a.4 Page 4

7 PT. IVOMAS TUNGGAL PT. BUANA WIRA LESTARI MAS PT. BUANA WIRA LESTARI MAS PT. RAMAJAYA PRAMUKTI PT. BUANA WIRA LESTARI MAS PT. BUMIPALMA LESTARI PERSADA SIAK-RIAU UTJM Ujung Tanjung Mill KAMPAR- RIAU KAMPAR- RIAU KAMPAR- RIAU INDRAGIRI -RIAU INDRAGIRI -RIAU NSAM Nagasakti Mill UTNE Ujung Tanjung Estate 2009 Certified STPA Sungai Tapung Setate 2011 Certified NMAE Nagamas Estate 2010 Certified NSAE Nagasakti Estate 2010 Certified RBKE Rama Bakti 2010 Certified KJNM Kijang Mill KJGE Kijang Mas Inti 2010 Certified Estate KJNP Kijang Kencana Scheme smallholder RRMM Rama RRME Rama Rama Estate 2010 Certified Rama Mill AYJP Amartajaya Scheme smallholder IDSM Indra IDLE Indra Lestari Estate Sakti Mill IDSE Indra Sakti Estate INDA Indragiri Scheme smallholder IDSA Indrasakti Scheme smallholder BPLM Bumipalm BPLE Bumi Lestari Estate a Mill BPME Bumi Palma Estate BSNE Bumi Sentosa Estate SPO 4006a.4 Page 5

8 2.0 ASSESSMENT PROCESS 2.1 Certification Body PT Mutuagung Lestari Jl. Raya Bogor Km 33,5 No. 19, Cimanggis - Depok Telp Fax /46 Website: agri@mutucertification.com 2.2 Assessment Team ST1 The assessment team was consisted of: 1. Octo H.P.N Nainggolan (Lead Auditor). A bachelor of Agriculture, Department of Social Economics of Agriculture (Agribusiness). He has a working experience from year 2004 to 2011 as an Operational Staff in a private oil palm plantation company in Indonesia. Trainings attended namely: Training of Conservation of Natural and Biological Resources in supporting HCV, Basic Plantation Management Program, Plantation Integrated Pest Management training, Followed the Management System Certification (ISO /SNI :2008), Lead Assessor Training RSPO Lead Auditors Training Course and supply chain certification system training by BM Trada. He has conducted several audit activities related to certification system of sustainable oil palm plantation as an auditor. In the assessment activity, he conducted assessment on Waste Management, Implementation of OHS, FFB Processing, best practices, social welfare, environment aspect and legality. 2. Oktovianus Rusmin (Auditor). Bachelor s Degree in Social & Political Sciences Department of Anthropology. Specialists in the field of Social and Cultural (Social Impact & Conflict Resolution) and HCVF. Training attended: Forest Management Auditor Training (FSC Standard), ISO Environmental Management System, SVLK Auditor (wood legality) & Indonesian Sustainable Palm Oil (ISPO) Auditor. He was several times involved in the assessment of Sustainable Forest Management Certification (Standard LEI). Had worked at the Center for the study of Anthropology, University of Indonesia; and experts to the field of Social Tropical Forest Trust (TFT) Indonesia. He was numerously involved the Social Impact Study and Identification HCV in Oil Palm Plantations and natural forest concessions. In this Stage-1 activity, he conducted assessment of social aspect, worker welfare and land concession. 3. Doni (Auditor). Master Degree in Rural Sociology. He has been followed Sustainable Forest Management (SFM) certification from the Indonesian Ecolabelling Institute (LEI) year 2008 and SFM Up-Grading Training in Gunung Batu Forestry Training Centre Bogor Year Since year 2003 he has made several SFM certification audits, including: PT. Teluk Bintuni Mina Agro Utama West Papua Province year 2010 PT. ITCIKU East Kalimantan Province year 2009, Koperasi Meranti Tumbuh Indah Cooperative Bodies at East Kalimantan Province year 2008, PT Memberamo Agro Indan Mandiri year 2008, PT. Arara Abadi at Riau Province year 2005, PT. INHUTANI III (Nanga Pinoh) East Kalimantan, year Since year 2005 until now he worked as a freelancer at BAPPENAS, Ministry of Underdeveloped Regions Development (Kementrian Pembangunan Daerah Tertinggal) and Ministry of Public Works at Dirjen Cipta Karya as an evaluation team. Year he worked at JICA and UN-HABITAT-UNDP. In this Stage-1 he conducted the assessment on employment and social aspects. 4. Ibnu Satria Prabudi (Auditor). A Bachelor of Agriculture Majoring in Agro-technology, Agriculture Faculty of Instiper Yogyakarta. Currently he has been working with an independent certification agency as auditor. Training he has followed are: Lead Auditor RSPO, Auditor ISPO, Awareness HACCP certification, Awareness SQMS Mc Donald, In House Training Green House Gas and Awareness ISO: He has followed several audit activities related to certification system of sustainable palm oil (RSPO certification) as observer and Auditor. He has been working with an independent certification body as auditor. In this Stage-1 activity he assessed best agronomic practices and social. ST2 The assessment team was consisted of: 1. Nanang Mualib (Lead Auditor). Bachelor of Forestry Majoring in Forest Products Technology, Forestry Faculty of Bogor Institute of Agriculture (IPB). He has work experience in forestry companies (HPH) since 2000 to 2004 as technical assistance in application of Sustainable Forest Management; and a joint program between the Forestry Faculty of IPB and WWF-Indonesia since December 2006 to present. His professional experiences are, among other: HCV social study in monitoring the implementation of Sustainable Forest Management, and had been involved in the identification of HCV in the three oil palm plantation companies in Indonesia. Currently he SPO 4006a.4 Page 6

9 works as a professional consultant and assessor HCV. In this Stage-2 activity, he assessed social, legal, HCV management, and employment aspects. 2. Octo H.P.N Nainggolan (Auditor). A bachelor of Agriculture, Department of Social Economics of Agriculture (Agribusiness). He has a working experience from year 2004 to 2011 as an Operational Staff in a private oil palm plantation company in Indonesia. Trainings attended namely: Training of Conservation of Natural and Biological Resources in supporting HCV, Basic Plantation Management Program, Plantation Integrated Pest Management training, Followed the Management System Certification (ISO /SNI :2008), Lead Assessor Training RSPO Lead Auditors Training Course and supply chain certification system training by BM Trada. He has conducted several audit activities related to certification system of sustainable oil palm plantation as an auditor. In the assessment activity, he conducted assessment on Waste Management, Implementation of OHS, FFB Processing, best practices, social aspect, environment aspect and legality. 3. Marsudi Eko Santoso (Auditor). Bachelor of Science in Agriculture, majoring in Agro technology. Followed the Management System Certification (ISO ), Awareness HACCP certification, training of RSPO auditor and training of RSPO Lead Auditor training, ISPO Lead auditor training and distribution quality management process - APMEA. He had involved several time in RSPO certification assessment activities as an auditor. Currently he works for Independent Certification Body. In this assessment activity, he conducted assessment on best practices, Soil and water conservation, Integrated Pest Management and workers welfare. 2.3 Assessment Methodology, Assessment Process and Locations of Assessment Assessment Dates ST1 Stage-1 Assessment date at 2-3 April 2012 ST2 Stage-2 Assessment date at 11, 12, 13, 14, 17, 19, 20 June Estimate of person days to implement assessment ST1 Number of auditors : 4 persons Number of days for assessment at Location : 2 days Number of working days for assessment at Location : 8 Days ST2 Number of auditors : 3 persons Number of days for assessment at Location : 6 days Number of working days for assessment at Location : 18 Days Detail process of assessment ST1 Stage 1 activity aims to measure the company s readiness in implementing standards of RSPO for scheme smallholders, personal understanding concerning standards of RSPO implementation for scheme smallholders, state location, approaching process of certification aspects, identifying stakeholders, to evaluate internal audit and management in planning and the performance to the RSPO implementation for scheme smallholders, and to see the smallholders readiness to enter Stage-2. Assessment is conducted by measuring adequacy of implementation with the efforts performed by smallholders groups to the requirements of National Interpretation of Republic of Indonesia from RSPO Principle and Criteria (P&C) for scheme smallholders for Sustainable Palm Oil Production (RSPO INA-SWG, October 2009). Assessment is conducted in two methods: Method 1 is document review, aiming to observe the adequacy of either types or substances of the documents required; and Method 2 is interview, aiming to obtain more detailed information and cross check. Several directions of improvement of Stage-1 result are presented by auditors to the management, and the result becomes verification material for the actual assessment stage (stage-2). All information obtained is recorded in the Check List of Mutuagung Lestari and becomes the main attachment of Assessment Result Report. Complete assessment process is as follows: 02 April The auditor team traveled to the location and conducted an opening meeting in Naga Mas Estate, attended by the VPA of Kampar Region, PC of Kampar Region, RC of Kampar Region, RC of Scheme smallholders, managers of scheme smallholders, smallholders, KUD members and other personnel that represented their own departments. After the opening meeting the auditor team reviewed documents related to the scope of the Kijang Mill that obtains supplies of FFB from Kijang Kencana Plasma concerning the environmental, social, legal, and economic aspects. SPO 4006a.4 Page 7

10 ST2 03 April The auditor team continued reviewing documents for Kijang Kencana Plasma Stage-2 activity (main assessment) aims to measure the adequacy of implementation with the efforts performed by smallholder groups concerning the requirements of National Interpretation of Republic of Indonesia from the RSPO Principle and Criteria (P&C) for scheme smallholders for the Sustainable Palm Oil Production (RSPO INA-SWG, October 2009) There are 3 (three) methods of assessment, which are: (1) company documents review, aims to observe the completeness, validity, and the substance adequacy from the documents required; (2) interview, aims to obtain more detailed information; and (3) field observation, aims to directly observe the adequacy of implementation in the field comparing to the data result of the interview and information stated in the documents. Several directions for improvement from Stage 2 assessment result is presented by MUTU auditor to the management (Kijang Kencana Plasma, KUD and Smallholder Groups), and the result becomes verification materials for Surveillance Stage (S1). All information obtained is recorded in the Check List of Mutuagung Lestari and becomes the main attachment of Assessment Result Report. Complete assessment process as follows: 11 June The auditor team traveled to location. In the afternoon, the auditor team conducted an opening meeting in Naga Mas Estate Mess, attended by VPA Kampar Region, PC Kampar Region, RC Kampar Region, RC scheme smallholders, manager of scheme smallholders, head of KUDs, smallholders and other personnel that represented their own departments. The auditor teams continued observe the document and observation of cooperative storage facilities at KUD Panca Warga. 12 June The auditor team reviewed documents and observation of cooperatives storage facilities at KUD Berkat Ridho and Lestari Jaya.. The auditor team held a public consultation with the local stakeholders (Plantation Agency, cooperative agency, head of sub-district, head of village, and community leaders) along with the public consultation of PT. Ramajaya Pramukti Scheme Smallholders. 14 June The auditor team conducted field observations of the RSPO P&C implementation of smallholder groups included in Panca Warga and Berkat Ridho cooperatives. 17 June Auditor team analized the collected data. 19 June The auditor team conducted field observations of the RSPO P&C implementation of smallholder groups in Lestari Jaya cooperative. 20 June The auditor team held a closing meeting in Naga Mas Estate Mess, attended by VPA Kampar Region, PC Kampar Region, RC Kampar Region, RC scheme smallholders, manager of scheme smallholders, chairman of KUDs, and other personnel that represented their own departments. Closing meeting was also held at the same time with Kijang Kencana Plasma Locations of Assessment ST1 Currently the auditor team only conducted documents observation which was performed at the office of Buana Wiralestari Mas. ST2 Mutuagung Audit team conducted an assessment of the scheme smallholders operation of 8 (eight) smallholder cooperatives by sampling 3 (three) cooperatives based on the RSPO sampling formula (0.8 Y whereby Y is number of cooperatives). This sampling strategy was developed based on the RSPO sample size, the geographical location of the cooperatives and number of smallholder members. The RSPO sampling formula also used for the selection of members to be assessed. The cooperatives (KUD) sampled were Panca Warga, Berkat Ridho and Lestari Jaya. The locations visited by the auditor at the time of assessment include: 1. Office of Panca Warga cooperative, the implementation of documents review and interview with the cooperative officials related to P&C RSPO. 2. Office of Berkat Ridho cooperative, the implementation of documents review and interview with the cooperative officials related to P&C RSPO. 3. Office of Lestari Jaya cooperative, the implementation of documents review and interview with the cooperative officials related to P&C RSPO. SPO 4006a.4 Page 8

11 4. Block J56 of Lestari Jaya cooperative. Observation and interview with a harvester (Mr. Kalimun) and harvesting mandor regarding the safe harvesting techniques, criteria of ripe FFBs, the use of PPE, workers welfare and remuneration. Interview with a smallholder (Indra and Untung) regarding potential hazards of occupational accident, handling procedures of occupational accidents, fire-burning area handling and efforts to prevent fire-burning area, the presence of protected animals such as white throated kingfisher and leopard cat (macan akar). 5. Block H48 Lestari Jaya cooperative. Observation of protected species sign boards (HCV 4.1) 6. Block G51 Lestari Jaya cooperative. Observation and interview regarding HCV 4.1 ara management (Plumpang riparian) 7. Block I27 Berkat Ridho cooperative. Interview with smallholders regarding IPM technique, potential hazards of occupational accident, handling procedures of occupational accidents, fire-burning area handling and efforts to prevent fire-burning area, the presence of protected animals, agrochemical waste handling. Observation and interview with harvester regarding the safe harvesting techniques, criteria of ripe FFBs, the use of PPE, workers welfare and remuneration 8. Kijang Damai (block B44) and Tani Jaya Smallholder group of Panca Warga cooperative. Interview with smallholders regarding harvesting activity, worker remuneration and safety procedure. 9. Chemical storage at Panca Warga, Berkat Ridho and Lestari Jaya KUDs. Observation regarding chemical waste handling and interview with spraying worker regarding spraying activity. 10. Tani Bangkit smallholder group of Panca Warga cooperative. Interview with upkeep worker and mandor regarding chemical spraying and manuring activities, emergency response and PPE implementation. 11. Block E36 and E37 Mekar Mulia smallholder group of Panca Warga cooperatives. Observation of IPM implementation. The scheme smallholders assessment was based on random samples and therefore nonconformities may exist which have not been identified. 2.4 Stakeholder Consultation and List of Stakeholders Contacted Stakeholders public consultation was conducted in the following ways: 1) Public Announcement in the RSPO website. 2) Stakeholders were contacted by invitation letter and telephone to arrange the meetings. Public consultation meeting with the internal and external stakeholders was held at the same time with public consultation of scheme smallholders of PT Ramajaya Pramukti on. PT Buana Wiralestari Mas staff were not present at any of the meetings with smallholders or external stakeholders List of stakeholder contacted (List of stakeholder contacted at the assessment) Appendix Determining Next Visiting The annual surveillance is planned to be carried out within 12 (twelve) month after the initial certification approved by RSPO. SPO 4006a.4 Page 9

12 3.0 ASSESSMENT RESULT MUTUAGUNG LESTARI has conducted an assessment of PT Buana Wiralestari Mas Smallholders Operation consisting a sample of 3 (three) KUDs. MUTUAGUNG LESTARI found that PT Buana Wiralestari Mas Smallholders comply with the requirements of RSPO Principles & Criteria and National Interpretation, RSPO Principles and Criteria (P&C) for Sustainable Palm Oil Production, Republic of Indonesia - RSPO INA-SWG, Scheme Smallholders October MUTUAGUNG LESTARI recommends PT Buana Wiralestari Mas scheme smallholders as expansion of certified mill s scope from existing certificate of Kijang Mill - PT Buana Wiralestari Mas. 3.1 Summary of Assessment Report of the RSPO Certification Ref Std. VERIFICATION RESULT of MUTU-Certification PRINCIPLE #1 COMMITMENT TO TRANSPARENCY 1.1 Plantation and Palm Oil Factory have to give adequate information for stakeholders in appropriate language and forms, to ensure the effective participation of stakeholders in decision-making. Records on Information Request and Responses to the stakeholders are available in the communication books which include dates, names, complete addresses, problems and solutions. For example, on 15 December 2011 workers requested for additional of health facility in Kijang Plasma estate and response by adds medicine and regular visit by company medical personnel., there are suggestion boxes placed in the staff housing, division office, head office, generator office, G-1 housing, security station, car wash, badminton court, archives warehouse and fertilizer warehouse. Information request is set in the SOP of Information Request and Responses (SOP/SPO/SMRT/LH-02). In general, the working steps in the SOP are: (1) Responding to the information request and relevant stakeholders in accordance with the principle and criteria of sustainable palm oil production. (2) In the case that the request from stakeholders that is not contained in the information and relevant stakeholders, it is necessary to ask for consideration and approval of the top management by consulting with the relevant departments first. Procedure of document retention time is set in the SOP of Document Control and Retention Time 9SOP/SPO/SMRT/LH- 02). It is stated in the SOP that the retention time of the documents in the SPO secretariat is 5 years. If the documents and records are not kept in SPO, the document controller is allowed to keep them in the company archives warehouse by making storage minutes and complying with the applicable provisions. Communication Book is available in the office of Berkat Lestari KUD which elaborates Date of Incoming/Outgoing mail, Name of the Applicant, Institution name, Request, For Purposes, Disposition, Initial of Decision Maker, No. Ref. Verdict (BA/TT/kwitansi) and Status. 1.2 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. Documents are available in each of smallholders institutional office at the time of assessment, such as at the Panca Warga KUD, inter alia: 1. Legal Document. a. Deed of Cooperative Establishment of Koperasi Petani Sawit Panca Warga (Oil Palm Smallholder Cooperative) No. 21/BH/KDK4/IX/1998 dated 17 September b. Taxpayer Registration Number (NPWP) No on behalf Koparasi Petani Sawit Panca Warga. c. Operational License/Business Allocation License in accordance with Decree of Kampar Head District No. 180/HK/02846 dated 30 June 2008 valid for 5 years from the issuance. d. Company Registration Certificate (TDP) No dated 14 July SPO 4006a.4 Page 10

13 e. Letter of Medium Commerce Business Permit in accordance with the Letter of Head of Industry of Commerce Agency of Kampar District no. 007/Perindagpas/04-08/SIUP/VI/2008 dated 14 July f. Annual Members (RAT) record on 31 March 2012 which attended by all the cooperative members and the Financial report has been audited by public accountants on 11 February 202 (based on letter number 016/Lap.i/101212/AU/10220-PKU) g. Cooperative Member List Book. Explaining names, address, registration date, etc.. h. Agreement between KUD and PT Buana Wiralestari Mas in accordance number 01/SPK-BWL/DL/III/99 dated 17 March 1999 and followed by addendum number 033/SPK-BWL/LM-KKCP/VI/IX/2004 dated 30 September i. PIR-Trans project Implementation Program accordance Agriculture Minister Decree number 261/Kpts/KB.320/4/90 dated 11 April 1990 Siak Hulu, Kampar District, Riau. j. Plasma Plantation license accordance with Transmigration Minister Decree number KEP.119/Men/1991 dated 14 September k. Principal Agreement from Agricultere Ministry number KB.320/222/Mentan/VI/1988 dated 8 Juni 1988 regarding PIR-Trans plantation establishment. l. Forest Area Realease letter from Forestry Minister number 108/Kpts-II/91 coverage area of 23,312 Ha in Kampar District, Riau Province for oil palm plantation on behalf PT Buana Wiralestari Mas. m. Member list of Panca Warga, Berkat Ridho and Lestari Jaya KUDs which elaborates the Names of Smallholders, Names of Smallholder Groups, Blocks, and Plots Number. n. All plots belong to smallholders have obtained certificate of ownership (SHM) issued by National Land Agency of Kampar District. 2. Environmental Documents. a. EIA of oil palm plantation-pir Trans and the plan of processing mill in Siak Hulu Sub district, Kampar District, Riau Province year b. Environmental Monitoring Plan (RPL) of Oil Palm PIR-Trans and The Processing Mill in Siak Hulu Sub district, Kampar District, Riau Province year c. Environmental Management Plan (RKL) of Oil Palm Plantation and Processing Mill of PT. Buana Wiralestari- Sikijang Estate in Siak Hulu Sub district, Kampar District of Riau Province in 1996 (approved by Agricultural Ministry in accordance with Decree of Agricultural Ministry No. 092/RKL-RPL/BA/IV/96 dated 30 April 1996). d. Environmental management and monitoring plan report second semester Social Documents. a. Document of Social Impact Analysis was compiled by the Internal Team (Siti Amanah, Tomi Hendartomo, Yosaphat Ardilla R, and Nazyla Syahputri) in the form of Survey Document of Social, Economic, and Cultural Condition and also Community Perception in the village around the Plantation/Mill of BWL year b. Accountability Report of the Officials year 2011 and Work Program & Revenue and Expenditure Budget Plan (RAPB) of Panca Warga, Berkat Ridho and Lestari Jaya KUDs year 2012 indicates that in 2011 social program has been implemented. PRINCIPLE #2 COMPLIANCE WITH APPLICABLE LAWS AND REGULATIONS 2.1 There is compliance with all applicable local, national and ratified international laws and regulations. Documents of regulatory compliance available at the office of Kijang Kencana Plasma are relevant as a compliance evidence, for example; 1. Inventory of the relevant and recent regulations. For example, list of applicable and current regulations available that was made on 14 November Scheme smallholders management has conducted dissemination to the cooperative units within the operational area. 3. Evaluating the compliance with the rules, regulations and other requirements such as Occupational Health and Safety (OHS). Evaluation methods consist of regulations, the articles being evaluated, requirements and implementations in the field. Based on the result of the visit at the Panca Warga, Berkat Ridho and Lestari Jaya KUDs, Statute No. 25 Year 1992 is available concerning Cooperatives along with the Government Regulation issued by the Cooperative Management Institution as follow; 1. Statute No. 25 Year 1992 on Cooperatives. 2. Government Regulation No. 4 Year 1994 concerning Requirements and Procedures on Ratification of Deed and Cooperative Articles of Association Amendments. SPO 4006a.4 Page 11

14 3. Government Regulation No. 17 Year 1994 on the Dissolution of the Cooperatives by the Government. 4. There is Regulation of Riau Governor No. 22 year 2006 regarding Guidelines for Purchasing Price Determination of FFB of Oil Palm Produced by the Growers in Riau Province dated 29 August The right to use the land can be demonstrated, and is not legitimately contested by local communities with demonstrable rights All land owned by smallholders have obtained Certificate of Ownership (SHM) issued by National Land Agency (BPN) of Kampar District, for example; 1. Land Certificate No dated 6 May 1999 on behalf of Joko Pitoyo, covering 20,000 M² (Panca Warga KUD member) 2. Land Certificate No dated 6 May 1999 on behalf of Warya, covering 20,000 M² (Panca Warga KUD member). 3. Land Certificate No dated 25 September 1995 on behalf of Misdan, covering 20,000 M² (Bekat RIdho KUD member). 4. Land Certificate No dated 3 April 1997 on behalf of Setyo Budiyanto, covering 20,000 M² (Lestari Jaya KUD member) Based on interviews with the officials of Panca Warga, Berkat Ridho and Lestari Jaya KUDs, it is stated that until the implementation of ST-2 (Assessment) there are no objection of other parties associated with land ownership within the work area of KJNP. Should there be an objection on the level of smallholders, it will be resolved also on the levels of either smallholder groups or KUDs. And should there be problems related to the main company, it will be resolved on the level of either KUDs or Scheme smallholders Communication Forum. There is a suggestion box in every KUD; however there are not any incoming mails yet. Regular meeting of smallholders group is conducted periodically depends on each KUD in determining the meeting frequency. 2.3 Use of the land for oil palm does not diminish the legal rights, or customary rights, of other users, without their free, prior and informed consent. Based on the observation of documents and interviews with the cooperative officials (Panca Warga, Berkat Ridho and Lestari Jaya KUDs) and the mentioned that there are no traditional rights ownership taken over by the smallholder institutional/scheme smallholders. All scheme smallholder areas have obtained Certificate of Ownership (SHM) from National Land Agency (BPN) of Kampar District. PRINCIPLE #3 Commitment to long-term economic and financial viability 3.1 There is an implemented management plan that aims to achieve long term economic and financial viability. There are documents of Production Plan for the Next 3 Years of Kijang Kencana Plasma as the projection of production data at each KUD as follows: Name of KUD Area (Ha) Projection of FFB Production (Kg) Makarti Buana jaya 1,011 29,506,000 29,506,000 28,620,820 Berkat Ridho ,125,500 20,125,500 19,521,735 Kijang Mas ,220,000 23,220,000 23,523,400 Makmur Sejahtera 1,270 36,415,000 36,415,000 35,322,550 Panca Warga 1, ,091,400 34,091,400 33,068,658 Budi Karya ,799,500 29,799,500 28,905,515 Lestari Jaya 1,022 29,441,000 29,441,000 28,557,770 Manunggal Abadi 1, ,685,720 33,685,720 32,675,148 TOTAL 8, ,284, ,284, ,195, BWL provides guidance to KJNP scheme smallholders by forming the Scheme smallholders Agronomy Department. 2. BWL assign 8 (eight) scheme smallholder assistants for each KUD at KJNP in order to improve service and guidance to the smallholders and Cooperatives. SPO 4006a.4 Page 12

15 3. The Scheme Smallholders Assistant performs daily activities such as monitoring Cooperative targets and work programs, monitoring FFB production and quality, rotating daily harvesting, monitoring manuring, dissemination to the smallholder groups, taking records of daily or weekly meeting. 4. BWL performs regular meeting or coordination with the Cooperative party at KJNP every 3 (three) months which is attended by Scheme smallholder Manager, Scheme Smallholder Assistant, Smallholder Groups and cooperative officials concerning operational plans that will be performed in 3 (three) months and being monitored every day. 5. Every cooperative has plans and annual budget projections that include; Projections of the production potential of FFB from whose determination is guided by Department of Scheme Smallholders with monthly allocation and related Cooperatives. 6. Cooperatives have monitoring records and supervision on the revenue and expenditure costs for operational activities such as saving for Replanting activity, payment to Bank loan, etc. 7. Every Cooperative through smallholder groups responsible for coordinating the harvesting activities such as FFB weighing result, coordinating FFB transportation, arrangement of harvesting plots (hancak panen), quality of FFB until the weighing at the mill. 8. Cooperatives perform transporting activities of FFB managed by contract with the owner of transportation unit which is reinforced in Work Agreement Letter (SPK). 9. FFB price information is monitored and updated that refers to the Result of FFB Price Determination of Plantation Agency, the representative of Plantation Company and Plantation Association PIR-Trans (ASPEKPIR) of Riau Province every week, as conducted on 5 June 2012 and established, such as in the period of 6 12 June 2012 which explains the classification of age of the plants with the price range from IDR 1, to IDR 1, PRINCIPLE #4 Use of appropriate best practices by growers and millers 4.1 Operating procedures are appropriately documented and consistently implemented and monitored. BWL has prepared guidelines of activity procedures of oil palm plantation to smallholders in KJNP based on the manual of Good Agriculture Practice, document of Guideline of Cultivation Techniques (Oil Palm) of Sinarmas Agribusiness and Food No. Policy SMA/MCAR/MEI 2007 which is applicable since 1 May It explains the Planting Plan (such as types and the number of certified seed of high quality), Nursery, Pre-planting Preparation, Road and Bridge, Land Clearing and Planting, Pest, Diseases and Weeds (such as pest and diseases in Immature Plant and Mature Plant and their control, general instructions about safety in working with pesticide), Manuring (such as nutrient elements and deficiency symptoms in plants, the type and characteristics of some fertilizers), Immature Plant Upkeep, Pra-Harvesting Activities, Mature Plant Upkeep, Harvesting and Transportation, Environmental Management (includes Environmental management, Implementation of Environmental management System and Environmental Conflict Resolution), SOP of OHSAS which includes Maintaining Determination and OHS Policy Communication, Hazard Identification, Risk Assessment and Risk Control (HIRARC), Emergency Handling, Occupational Accidents Handling, Hazardous Material and Hazardous Waste Management and its transportation and is applicable since 1 July The SOP describes the duties and responsibilities, preparation of facilities and infrastructures, the use of PPE, OHS which is also used as training material in the form of training to scheme smallholders with the aims of implementation similar to the procedures from BWL. Kijang Kencana Plasma (Panca Warga, Berkat Ridho and Lestari Jaya KUDs) have documents of technical guidelines from BWL coaching result in all cooperative units as stated in documents of RSPO certification of each cooperative unit which explain: 16 circular letters of KUDs, such as: waste management appeal, agronomical technical guidance letter, the minimum age limit, working hour setting, riparian protection, livestock prohibited spraying areas, etc. There is a circular letter to all cooperative officials at Kampar Plasma of RJP and BWL issued by Regional Controller of Kampar - Plasma with no. 01/SE-RC Kampar Plasma1/2012 dated 3 January 2012 that explains the use of certified quality seeds for scheme smallholder estates. 12 work Instructions of KUDs (TK-KUD) which describe activities, such as: fruit-cutting activity, manuring and transporting the FFB, washing and cleaning the used pesticide and fertilizer sacks, manufacturing spray solution, plant pest management, etc. 9 Standard Operational Procedures (SOP) of KUDs which explains the communication and stakeholder consultation, contractors control, waste management, replacement of members and changes in ownership of plots in KUDs, etc. SPO 4006a.4 Page 13

16 14 documents of workflow/working procedures which among others describe the flow of members replacement and changes in ownership of plots in KUDs, flow of communication, flow of washing of used fertilizer sacks and used pesticide, procedures of spray solution at the KUDs, etc. There are evidence of activities in cooperative operations, such as: 1. Panca Warga KUD has documents of Division Work Program which explains operational work regularly for example: a. Documents of harvesting activities, such as monitoring crop rotation of Panca Warga KUD in May 2012 that describe determination of harvesting location (block/smallholder groups) with rotation after every 7 (seven) days the block will be harvested again. b. Activities of circle and harvesting path spraying in 2012 since January until May 2012 with the planned rotation of spraying 3 (two) times a year, as in May 2012 the spraying was conducted in 9 smallholder groups covering 303 hectares with the use of liters of herbicide materials (dose of 0.4 liter/hectare). c. Pruning activity is conducted once a year, as in May 2012 covering 162 hectares in 5 smallholder groups. d. Weeding activity is conducted in May 2012 in 5 smallholder groups covering 182 hectares. 2. Berkat Ridho KUD has documents of Division Work Program which explains operational work regularly for example: a. Integrated Pest Management (IPM) activity which is stated in the document of Monitoring of owls activity that explains owl nests (Barn Owl Box) in active condition that are regularly checked by upkeep supervisors of Berkat Ridho KUD. There is a document of Detection Data of Oil Palm Leaves Eater Caterpillar (UPDKS) conducted by smallholder supervisor and acknowledged by Scheme Smallholder Assistant, for example, from the observation activity conducted on 10 April 2012 there were light category attacks from fire caterpillar. b. Activities of circle and harvesting path spraying in 2012 since January until April 2012 with the planned rotation of spraying 3 (two) times a year, as in April 2012 the spraying was conducted covering 256 hectares of 6 smallholder groups. c. Pruning activity is conducted once a year, as in May 2012 covering 186 hectares in 5 smallholder groups (Harapan Sentosa, Cipta Manunggal, Harapan Mandiri, Tani Makmur dan Berdikari). d. Manual weeding activity is conducted in April 2012 in 3 smallholder groups (Harapan Sejahtera, Harapan Sentosa dan Cipta Manuggal) covering 150 hectares. 3. Lestari Jaya KUD has documents of Division Work Program which describe operational works regularly for example: a. Manuring activity on March 2012 application of Urea fertilizer tonnes, April 2012 MOP (Muriate of Potash) tonnes, May 2012 Rock Phosphate tonnes and TSP (Tricalcium Phosphate) tonnes. b. Harvesting activities in the form of harvest section, harvest book that describes smallholder groups, harvest blocks, number of bunches, weight, harvest quality monitoring (rare fruits, poles, rotten fruits) as a function of harvested FFB quality control. c. Integrated Pest Management (IPM) activity which is stated in the document of Monitoring of Detection Data of Oil Palm Leaves Eater Caterpillar (UPDKS) conducted by smallholder supervisor and acknowledged by Scheme Smallholder Assistant, for example, from the observation activity conducted on April 2012 in Harapan Indah smallholder group there were light category attacks from fire caterpillar. d. Activities of circle and harvesting path spraying in 2012 since January until May 2012 with the planned rotation of spraying 3 (three) times a year, as in May 2012 the spraying was conducted covering 280 hectares in 7 smallholder groups. e. Pruning is conducted every year, as in May 2012 covering 160 hectares in 4 smallholder groups (Adi Luhur/blok I- 54, Asri/blok I-55, Karya Mukti/blok J-53, Maju Jaya/blok J-54). f. Manual weeding activity is conducted in May 2012 in 1 smallholder group of Tani Makmur block J56 covering 40 hectares. Based on the field check to samples of KUD, it is acknowledged that there are harvesting activities by applying predetermined procedures include how to work safely. Harvest result is recorded in a grading document carried out by the Scheme smallholders Management, witnessed by representatives of smallholder groups. 4.2 Practices maintain soil fertility at, or where possible improve soil fertility to, a level that ensures optimal and sustained yield. BWL through SMART Research Institute (SMARTRI) performes an analysis of leaves sampled in several blocks and performed annually in each Cooperative Unit in order to support the use of fertilizer counseling program according to the needs based on the identification of nutritional needs of oil palm planted in KJNP, such as Lestari Jaya KUD performed Leaf SPO 4006a.4 Page 14

17 Sample Analysis on 21 January 4 February 2012, in the document of LSU Sample Tree Measurement that describes leaf sampling locations, sampling dates, sampling time/hour, records of visual condition of nutrient element deficiency and performed by scheme smallholders assistant. BWL recommends manuring with reference to the type of fertilizers and dose needed according to the leaf analysis to smallholders through their cooperatives. Each cooperative manages fertilizer distribution provided by BWL and the fertilizers are distributed to smallholders as indicated in the document of Manuring Consumption in every KUD in 2011 such as: 1. Panca Warga KUD in 2011 there are several types of fertilizer used such as Urea in the amount of tonnes, TSP in the amount of 103 tonnes, Rock Phosphate in the amount of 56.3 tonnes, MOP in the amount of tonnes, Kieserite Granular in the amount of tonnes, Super Dolomite tonnes, HGFB in the amount of 4.33 tonnes. 2. Berkat Ridho KUD in 2011 there are several types of fertilizer used such as Urea in the amount of tonnes, TSP in the amount of 79.2 tonnes, Rock Phosphate in the amount of 140 tonnes, MOP in the amount of tonnes, Kieserite Granular in the amount of 79.2 tonnes, Super Dolomite 140 tonnes, HGFB in the amount of 8.75 tonnes. 3. Lestari Jaya KUD in 2011 there are several types of fertilizer used such as Urea in the amount of 306 tonnes, Rock Phosphate in the amount of tonnes, MOP in the amount of tonnes, Dolomite tonnes, HGFB in the amount of tonnes. Every KUD in KJNP has records of harvesting activity in every smallholder group as a payment base to the owner. KJNP has FFB production monitoring for the latest 3 (three) years for every smallholder group and Cooperative that is always updated and compared the achievement based on the budget projection of FFB production as in the data from There are productivity data for the latest 3 years such as: 1. Panca Warga KUD in 2009 produced 33, tonnes (27.55 tonnes/hectare), in 2010 produced 29, tonnes (24.06 tonnes/hectare), in 2011 produced 33, tonnes (27.78 tonnes/hectare). 2. Berkat Ridho KUD in 2009 produced 20, tonnes (28.59 tonnes/hectare), in 2010 produced 17, tonnes (24.51 tonnes/hectare), in 2011 produced 19, tonnes (28.26 tonnes/hectare). 3. Lestari Jaya KUD in 2009 produced 27, tonnes (27.31 tonnes/hectare), in 2010 produced 24, tonnes (24.25 tonnes/hectare), in 2011 produced 29, tonnes (28.5 tonnes/hectare). Based on the observation of documents and interview with the scheme smallholders, it is known that KJNP do not perform activity of empty bunch application or dung fertilizer application. 4.3 Practices minimize and control erosion and degradation of soils. Based on the Map of Soil Observation (Peta Tanah Tinjau) in area of BWL Kijang Kencana Plasma in 2011, there are locations of KJNP that do not have slope areas more than 22 or steep and peat areas so there is no terracing implementation. The map is based on: 1. Desk Study of Kijang Plasma Area of PT. Buana Wiralestari Mas, September Shuttle Radar Topography Mission (SRTM) 3. Citra Landsat 7 path/row, 127/059, recorder, 26 April 2000 in the area of Kampar District and its surroundings. 4. Data of Field Survey on November 2011, PNPM Division. On the location of KJNP, there are no immature plants, the last planting year in KJNP location is 2002 planting year. Based on the topography map on the location of KJNP there are peat or marginal area in the depth of below 1 meter. 4.4 Practices maintain the quality and availability of surface and ground water. Available HCV training activity document explaining the soil and water conservation on 5 December 2011 at Kijang Kencana Plasma office attended by HCV officer (mandor) and KUD representative officer. Water and soil conservation activity including the riparian area marking and planting of erosion prevention plant (vetiver grass). At Panca Warga KUD area based on HCV location map at KJNP not traversed by river and has slope area. There is a statement issued concerning HCV management area by Head of Panca Warga, Berkat Ridho and Lestari Jaya KUDs addressed to smallholder groups, and KUD members which describe the following: SPO 4006a.4 Page 15

18 1. In efforts to maintain the quality of river water which can be used, smallholders are willing to manage the oil palm plantation manually (non-chemical) with no spraying in riparian as wide as 50 meters. 2. In the efforts to prevent erosion at the riparian, smallholders are willing to plant erosion preventing plants (such as bamboo, sugar cane (Saccharum officinarum), and other plants). Based on field visit to block G51 found there are sign boards of sparying and manuring boundary. Ther were erosion plant (vetiver grass) plantings on riparian area. There are records of agrochemical use at all KUD for example at Panca Warga KUD on year 2011 coverage area of 1, Ha with chemical use of paraquat ingredient 1,515.5 liter (dose 1.24 liter/ha/year). Available fertilizer records in all KUDs for example in first semester 2012 in Makmur Jaya smallholder group at block E43 coverage 40 Ha with fertilizer use of Urea 1.25 kg/plant. 4.5 Pests, diseases, weeds and invasive introduced species are effectively managed using appropriate Integrated Pest Management (IPM) techniques. The pest control work stage document regarding the detection of pests and diseases by performing detection in all areas and the observations of pests and diseases attack level is available The EWS system is available at all sampled KUDs, for example: 1. Program of beneficial plant (Turnera sulbulata) planting on year 2012 explaining the counseling, nursery, planting and upkeep. 2. Nursery in February 2012 for 300 seeds and March 2012 for 300 seeds, actual planting until May 2012 amount of 600 plants. 3. IPM implementation in non chemical use such as owl development in all blocks. 4. Early Warning Sytem of fire caterpillar dated 23 December 2011 in block H29 explaining the status of the block with light attack of fire caterpillar 5. Records of attack control to cut the fire caterpillar cycle carried out the imago light trap and pupae collecting by smallholders and controlled by scheme smallholder assistant. Based on SMARTRI research team on December 2011 recommendation with pesticides use to conducted fooging application. Monitoring of desease conducted once a year together with leaf sampling unit application and until now there was no desease attack founf in KJNP. IPM training activity records available in all sample of KUD for example on 14 Januari 2012 attended by 40 participants from representative of all BWL smallholder KUD members explaining training of barn owl box construction, management and cultivation of beneficial plants. Based field visit and interview with smallholder for example at Tani Jaya smallholder group block B45 known that the smallholder do not understand about Integrated Pest Management and have not received training and guidance from BWL representative staff in their smallholder group. Non-Conformance see CAR Minor Non-Conformance CAR with minor category. 4.6 Agrochemicals are used in a way that does not endanger health or the environment. There is no prophylactic use of pesticides, except in specific situations identified in national Best Practice guidelines. Where agrochemicals are used that are categorized as World Health Organization Type 1A or 1B, or are listed by the Stockholm or Rotterdam Conventions, growers are actively seeking to identify alternatives, and this is documented. The records of the recapitulation of agrochemical material use in year is available. Information such as trade mark, active materials, active materials content, active material characteristic, registration number, target weeds/organisms are available in this document, for example at Mukti Lestari Village Coopertive Unit, it was known that the company has used pesticides: No Trade Mark Active Content Material (%) Characteristic Registration No. Target Weeds 1. Ally 20 WG Methyl metsulfuron 20 Systemic RI. 837/4-2009/T wide-leaves weeds 2. Gramoxone 276 SL Paraquat dichloride 27,6 Contiguity RI /Kpts/SR.140 3/2011 Narrow-leaves wide-leaves SPO 4006a.4 Page 16 weeds,

19 3. Round-up 486 SL 4. Starane 480 EC 5. Garlon 670 EC Isopromil amina Glyphosate Fluroksifir meptihepil ester 48.6 Systemic RI /Kpts/SR.143/ 3/2011 narrow-leaves weeds Systemic RI. 3155/3-2008/T Narrow-leaves weeds, wide-leaves Triklopir 48 Systemic RI. 695/9-2008/t Narrow-leaves weeds, wide-leaves Smallholders group still use pesticides that contain paraquat active material until 2011, however, the use of this paraquat pesticide material tends to decline. For example in year 2009, total of use was 2,004 liter/year; in year 2010 total of use was 1,516 liter/year; in year 2011 total of use was 1,497 liter/year. There was a training of Oil palm Upkeep at all KUDs representative, which has been realized on 10 April 2012 and was attended by 150 participants. Equipped training materials: Circle and harvesting path Spraying training which includes how to apply the pesticides correctly and properly. (the right time, the right tools, the right type, the right dose, the right target and obligation of the use of PPEs). The correct Spraying Workflow is tacked on the bulletin board of KUD. Concerning the use of pesticides, one of the scheme managers acknowledged that the company has persuasively invites the scheme smallholders to use agrochemicals materials from the company such as what has been done to other agrochemicals (fertilizer), however this effort is still continuously performed by the company along with this effort, the company will continue to monitor the use of pesticide with contains paraquat active material through the supervision of trainings regarding the procedures of the applicator safety use and the environment. The scheme smallholders group in cooperation with the company have compiled the list of pesticides which provides the information of target weeds/pest, dosage, procedure and time of use. In addition to it, the company and the scheme smallholders group have also compiled the program of training on integrated pest management to the community. Prior to storaging, the used pesticide packaging will be washed first according to the rules listed on the label. After washing, this packaging waste is transported into the hazardous waste storage of the smallholders estates, then further it will be returned to the suppliers, for example the submission of packaging waste from Panca Warga KUD on 1 May 2012 in the form of: Gramoxone cans (20 liter) 9 pieces, Ally bottles 37 pieces. Based on fields and documents observations, it was known that the case of pesticide poisoning has never been known to occur in the work area of KJNP. Results of periodic examinations for pesticide applicator which at least be conducted once in a year is available. Check up is conducted by the company s doctor. This Check up includes the examination of weight, height, blood pressure, pulse rate, the worker s complaints, result of check up, and recommendations. For example check up of 26 December 2011 on behalf of Handoko Bangun Desa KUD member, Weight 50 Kg, Height 165 Cm, Blood Pressure 100/70 mmhg, pulse rate 776/minute, worker s complaint (none), result of check-up Fit, recommendations (none) by Doctor Aurora Rizky B. Based on the interview with the spraying workers it was acknowledged that latest medical check-up was conducted in December Evidence of limited pesticides training which was conducted by the Commission of Pesticide of Pekan Baru Province in 09 November 2011 and attended by 121 participants from all KUDs representative and the evidence of the trainings of limited pesticide usage, fit and proper pesticide usage, pesticide storage and disposal of waste, pesticide waste minimizing by the Commission of Pesticide of Riau Province on 10 April 2012 in the form of attendance list are available. Attended by 150 participants including the representatives of all KUD. KUDs obtain those pesticides from agricultural facilities shops, for example in Lestari Jaya KUD: Purchase from Sarana Pertaninan Shop, type of goods: Gramoxone 60 liters and Round up as much as 20 liter. Based on document observation and field visit known that available minutes of personal protective equipments and first aid kit handiover at Berkat Ridho KUD on 7 November 2011 to spraying workers (8 unit of safety glasses, spraying mask, spraying apron, rubber gloves, boots and 1 unit of firs aid kit) SPO 4006a.4 Page 17

20 Based on document observation and field visit known that available minutes of personal protective equipments and first aid kit handiover at Panca Warga KUD on 7 November 2011 to spraying workers (4 unit of safety glasses, spraying mask, spraying apron, rubber gloves, boots and 1 unit of firs aid kit). Based on field visits to spraying team s personal protective equipments storage, these equipments were found in a proper condition. 4.7 An occupational health and safety plan is documented, effectively communicated and implemented. Available at all KUDs the Sfaety Working Guidance in SOP of Sustainability Palm Oil and Occupational Health and Safety Management System number SOP/SPO/SMART/LH-01 dated 1 July 2010 explaining the responsibility of company staff to communicate the OHS policy to all workers, contractors and related indviduals under the mill and estate operational area Work stages for KJNP as in Panca Warga, Berkat Ridho and Lestari Jaya KUDs were similar based on guidance from company staff. Work stages which describes the handling and the control of occupational accidents risk is available, among others: 1. FFB harvesting work stages that describe the environment aspects and controlled Occupational Health and Safety such as incident of being hit by FFB/frond, electrocuted, streaked by spines, streaked by sickel were controlled by the application of Personal Protective Equipment e.g boots, gloves/rubber grip 2. The work stages of used pesticides packaging and used fertilizer sacks cleaning and washing that describes the management of used pesticides packaging and fertlizer sacks. 3. First Aid Emergency that describes the occupational accident and its management e.g accidents resulting in injury/fracture. 4. The work stages of circle and harvesting path upkeep on how to work safety, for example the spraying work stages on harvesting path and circle in the direction of wind, spraying was evenly carried out to a circle with diameter of 2 meter, with knapsack spraying worker equipment, environment aspects and controlled Occupational Health and Safety (did not contaminate the source of water, exposed to chemicals), the used PPE are Mask, Goggles, Gloves, Apron and Boots. Available safety working practice guidance in form of illustration and flow chart. The safety working practices presented by smallholder assistants from BWL to smallholders through trainings, for example training which conducted in 15 June 2011 at Berkat Ridho KUD attended by 10 cooperative members regarding safe spraying technique. OH expert at KJNP on behalf Joko Istanto as agronomic assistant who conducted the training to smallholders. Minutes of socialization to KUDs on 9 January 200 regarding OHS and emergency response by OHS expert attended by 14 participants and 29 October 2011 regarding the Matrial Safety Data Sheet socialization that use by all cooperatives and presentation of work environment sanitation from smallholder groups and Panca Warga KUD official. First Aid training record on 6 March 2012 was available at KJNP meeting office attended by 20 participants from all KUD representatives and records of socialization and first aid counseling on 22 April 2012 at Berkat Ridho KUD attended by 7 participants from cooperative members. Based on field visit and interview with smallholder from Tani Makmur smallholder group at block I27 and J56 found that smallholders not fully understand regarding the handling procedure if there is accident while working. Non-Conformance see CAR Available annual recapitulation of Frequency Rate of accident at all KUDs decribes number of work accident and lost time accident. Based on explanation from the KUD officials the accident record is implement from 2011 in KUD and from that period there was no work accident occurred. Available minutes of OHS socialization by P2K3 committee to all KUDs, for example: a. Socialization on 14 January 2012 at Panca Warga KUD discuss the sanitation of chemical storage and chemical waste handling which attended KUD official and members. b. Socialization and counceling of OHS Sign board installation at chemical storage and blocks at Berkat Ridho KUD on 3 November c. Socialization on 7 April 2012 in Lestari Jaya KUD discussing the OHS sign boards maintenance, fire simulation which attended by KUD representative and members. SPO 4006a.4 Page 18

21 Minutes of PPE submission are available, among others: 1. Submission of first aid and PPE on 7 November 2011 to spraying and harvesting workers at Berkat Ridho KUD (68 unit of safety glasses, 8 unit of spraying masks, 8 unit of spraying aprons, 8 unit of rubber gloves, 68 unit of boots, 60 unit of sickle and chisel safety covers and 1 first aid kit). 2. Submission of first aid and PPE on 7 November 2011 to spraying and harvesting workers at Lestari Jaya KUD (88 unit of safety glasses, 8 unit of spraying masks, 8 unit of spraying aprons, 8 unit of rubber gloves, 88 unit of boots, 80 unit of sickle and chisel safety covers and 1 first aid kit). Based on field visits at Block J56 (Lestari Jaya KUD) and interview with upkeep mandor found theat no first aid kit equipment available. Non-Conformance see CAR Minor Non-Conformance see CAR with Minor Category Minor Non-Conformance see CAR with Minor Category 4.8 All staff, workers, smallholders and contractors are appropriately trained. Available trainings program in all KUD for example at Berkat Ridho KUD year 2012 regarding Integrated Pest Management on carried out on 14 January 2012, First aid training carried out on 10 April 2012, fire emergency response planning on August 2012, Manuring counseling on September 2012 and Leaf sample unit for fertilizer requirement on Decembe Recapitulation of Lestari Jaya training program on 2012 for example pesticides use training, fire emergency response training, integrated pest management, first aid and leaf sampling unit training. Implemntation training record at Lestari Jaya KUD: a. Counseling of integrated pest management on 14 January 2012 attended by 40 participants from representative members. b. First aid training on 6 March 2012 attended by 20 participants (record was available in cooperative office) c. Pesticides use training by The Commission of Pesticide on 10 April 2012 attended by 150 participants representative from all KUDs (8 Lestari Jaya KUD members) PRINCIPLE #5 Environmental responsibility and conservation of natural resources and biodiversity 5.1 Aspects of plantation and mill management, including replanting, that have environmental impacts are identified, and plans to negative impacts and promote the positive ones are made, implemented and monitored, to demonstrate continuous improvement. The document that describes the assessment of institutional and environment impact related to the presence of PIR TRANS of PT. Buana Wiralestari Mas year 1993 is available. That EIA document is also available at Kijang Kencana Plasma. Estate Development and Management with PIR Trans pattern has also been socialized to the smallholders among others through integrated trainings and continuous coaching and counseling. There were also survey documents of the condition of Social, Economy, Culture and the Perceptions of people who live around BWL plantation/mill, location: Kijang Rejo village, Desa Koto Aman village, Desa Sekijang village, Desa Pelambaian village and Villages of Kijang KencanaPlasma (Kijang Jaya, Kijang Makmur, Tanah Tinggi, Tebing Lestari, Gerbang Sari, Tandan Sari, Tapung Makmur and Tapung Lestari). These documents have been socialized to the smallholder groups on 28 July 2010 (List of Paricipants is available). In the preparation of its EIA Document, BWL has involved the community/smallholders as the source of information for data of Social-Economic-Culture Environment and Community s Health Components through interviews. In data collecting process related to the aspects of Social-Economic-cultural, the community/smallholder has been involved as the source of information. Information from the community is collected by using semi-structured questionares and method of Rapid Rural Appraisal. The report document of the Implementation Report of Environmental Management Plan and Environmental Monitoring Plan Period Semester II/2011 of PT. PT. Buana Wiralestari Mas, Sikijang Estate Tapung Hilir Sub-District, Kampar District, Riau Province is available. SPO 4006a.4 Page 19

22 The Matrix of Social Impact Monitoring Plan in Year 2011 and Social Management Plan (RKS) year 2011 at BWL are available. The records of implementation and reporting of environment impact management at smallholder institution are also available at the office of Kijang Kencana Plasma and every KUD offices. 5.2 The status of rare, threatened or endangered species and high conservation value habitats, if any, that exist in the plantation or that could be affected by plantation or mill management, shall be identified and their conservation taken into account in management plans and operations. Based on results of interview with smallholders at Panca Warga, Berkat Ridho and Lestari Jaya KUDs showed that this smallholder was able to mention types of protected fauna for example: white throated kingfisher and leopard cat. Posters of protected fauna were installed at public places e.g at KUD s office. Each KUD has 1 officer who is responsible to hold training to each members related to the management of protected species including its conflict mitigation. The Decree of HCV management officer assignment at Kijang Kencana Plasma (KJNP) area for officers which were issued by each of KUD s Head. There is an availability of a monthly program from BWL regarding the socialization to the community, while the officers at each KUD do it incidentally. The HCV Identification Report Document of BWL (Kijang Kencana Plasma) which was held by the internal party in 2011 and compiled by Dr. Kunkun J Gurmaya (Approved RSPO HCV Assessor), Dede M. Nasir (Aproved RSPO HCV Assessor), Firmansyah (Participant HCV Network), Yosaphat AR. (Approved RSPO HCV Assessor) and Laurentinus V. Baskoro and has been reviewed by Dr. Ir. Nyoto Santoso is available. Types of HCV found were HCV 1.1 (riparian),hcv 1.2 (white throated kingfisher; Halcyon smyrnensis, leopard cat; Felis bengalensis), HCV 4.1 (Potential) and HCV 6. The Management and Monitoring Plan of High Conservation Value for Sungai Tapung Plasma Unit year 2012 includes the activities of installation/upkeep of warning boards, Installation and Upkeep of HCV boundary poles, Socialization to employee and community, rehabilitation of riparian (Plantation and Upkeep), Species Monitoring and Patrol. The Realization of HCV Area Monitoring in year 2012 that includes the HCV 1.1, HCV 1.2 and 4.1 areas is available. 5.3 Waste is reduced, recycled, re-used and disposed of in an environmentally and socially responsible manner. The agrochemical waste management plan which is listed in the Working Stages (work instruction) of Cleaning and Washing of pesticides and fertilizer sacks used with document and the Flowchart which describes the handling of fertilizer sacks and pesticides used packaging are available by collect all the packaging, use the PPEs, wash at the places that have been provided, wash them until clean (3-time washing for pesticide and 1-time washing for fertilizer sack), the waste water from washing is stored and will be re-used for spraying process, the cleaned pesticide packaging will be sent to Sungai Tapung Estate every 2 months to be distributed to the pesticides suppliers Based on the interviews with the smallholders at Block I27 KJNP Berkat Ridho KUD it was known that smallholders understood the agrochemical waste disposal methods by performing the 3-time packaging washing and the washing waste water is re-used for field application. Based on field visits and Interviews with one of the spraying workers at the place of used pesticide packaging and spraying equipments washing (Bangun Desa KUD), it was known that the workers were able to perform the fit and proper pesticide packaging washing method according to the guidance listed on the label (3-time cleaned wash) and the used water is chanelled into reservoir to be used for field application further. Based on interview with smallholders Staff, there was no complaint for the community regarding the disposal of waste and its completion. If there are complaints from the community regarding those matters, all will be recorded in communication book. 5.4 Efficiency of energy use and use of renewable energy is maximized. Based on observations at field, all KJNP smallholders have used the wheelbarrows at every harvesting activity to transport FFB to collection point. The KUD has maximized the FFB transport management from collection point to Palm Oil Mill efficiently. SPO 4006a.4 Page 20

23 5.5 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. Based on the age of the plants, replanting plan will be carried out in starting in year The company and scheme smallholder institution has developed replanting saving program for the members of smallholder groups began in December The implementation of this replanting program technically will be done by the scheme partner (BWL). In accordance with the Technical Guidelines of Oil Palm Cultivation of Sinar Mas (Management Committee Agronomy and research) point 5 regarding the land clearing and planting document No. SMA/MCAR/05/05-07 stated that land clearing must use the zero-burning principle The Land Fire Handling Flow Chart is available with procedures as follow: Any employee who finds out the spots of fire will directly perform the initial fire fighting, if it is not successful then reporting to the KUD officials will be conducted, contacting the emergency response team and relevant agencies, the emergency response team prepares the team and the equipments and directly goes to the fire location, the team coordinate regarding the location area, methods of firefighting, the division of personnel, after the fire is put off, they will perform an investigation and report the case to the relevant agencies. The flow chart of fire handling has been socialized to the community by sticking the procedures at the KUD s bulletin board, as seen at Panca Warga, Berkat RIdho and Lestari Jaya KUDs. Based on results of interview with the smallholders it was known that those smallholders are capable in understanding the procedures of fire handling and prohibited things that may caused fires such as trash burning and dispose of cigarette stub carelessly. Based on List of inventory and fire fighting equipments checklist and field observations, it was known that findings at Berkat Ridho KUD showed some fire fighting equipments such as: fire striker, spray keff, axe, hoe, bucket, burlap sacks, shovel and fire extinguisher were in properly-functioned condition. Implementation of replanting technically will de done by BWL (Sinarmas Group). In accordance with the Sinar Mas Oil Palm Plants Cultivation Technical Guidelines (Management Committee Agronomy and research) Point 5 regarding the land clearing and planting with document No. Document SMA/MCAR/05/05-07 which stated that land clearing activity must use the principle of zero burning. 5.6 Plans to reduce pollution and emissions, including greenhouse gases, are developed, implemented and monitored. KJNP has owned the list of results document of Environment Aspects Identification and Its handling at the smallholder s estate which conducted together by the Scheme Smallholders Assistant, BWL Environments staffs and KUD officials, this document describes the operational activities such as the activities of spraying equipments washing that produces the pesticide spraying equipments washing waste water and causes the soil contamination impact. Documents and plans to reduce pollution such as the installation of reservoir of spraying equipments washing waste available at each KUD of BWL scheme smallholders estate. Based on visits to sample of KUDs, there were findings of agrochemical packaging and spraying equipments washing location which are equipped by tank for agrochemical packaging washing waste water. PRINCIPLE #6 Responsible consideration of employees and of individuals and communities affected by growers and mills 6.1 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 the continuous improvement. Available survey documents of the condition of Social, Economy, Culture and the Perceptions of people who live around BWL plantation/mill, location: Kijang Rejo village, Desa Koto Aman village, Desa Sekijang village, Desa Pelambaian village and Villages of Kijang KencanaPlasma (Kijang Jaya, Kijang Makmur, Tanah Tinggi, Tebing Lestari, Gerbang Sari, Tandan SPO 4006a.4 Page 21

24 Sari, Tapung Makmur and Tapung Lestari). These documents have been socialized to the smallholder groups on 28 July 2010 (List of Paricipants is available). In the preparation of its EIA Document, BWL has involved the community/smallholders as the source of information for data of Social-Economic-Culture Environment and Community s Health Components through interviews. In data collecting process related to the aspects of Social-Economic-cultural, the community/smallholder has been involved as the source of information. Information from the community is collected by using semi-structured questionares and method of Rapid Rural Appraisal. Sosial impact management and monitoring plan records are available in every office of KUDs and also in Kijang Kencana Plasma office. The implementation of Impact Management in accordance with the EIA document is described the Report of Implementation Monitoring of Environmental Management Plan & Environmental Monitoring Plan. The Report of PT. Buana Wiralestari Mas Semester II/2011 period is available. however Kijang Kencana Plasma has compiled the Environmental Management and Monitoring Plan year 2012 which refers to the survey documents of the condition of Social, Economy, Culture and the Perceptions of people who live around PT. BWL plantation/mill in year There are open and transparent methods for communication and consultation between growers and/or millers, local communities and other affected or interested parties. The communication and consultation activity done internally is covering the following subject matters: setting up the process and communication, both regularly and incidentally, of the meeting with smallholders groups; the meeting with all employees; the meeting with workers unions; training handbook, video, notice board; monthly and weekly reports, including financial report; and suggestion box. These communication and consultation activities are built to work both ways. The following documentations serve as the record evidences of the communication and consultation activity conducted with the community: 1. Available of suggestion box at Berkat Ridho KUD office, however up to the assessment conducted there was no suggestion received. 2. Annual of the Members (RAT) held by the all KUDs in which the Accountability Report for the Fiscal Year of 2011 was delivered by the board members. 3. The counseling and dissemination activities, both formally and non formally, are conducted periodically. The records of the activities done periodically between smallholders institutions and their respective members in cooperative are as follow; 1. Regular monthly gathering werre held. List of attendance is documented in the Attendance List Log Book for s for the year 2007 up to 2011, kept by Panca Warga, Berkat Ridho and Lestari Jaya KUDs. 2. The Annual of Members is held every year to deliver the management s accountability report, the preparation of action plans for the following year, and the distribution of dividend (SHU) of the current year. The records are available as the evidence of the communities aspirations and their follow-ups that have been made available in the following forms: 1. Suggestion boxes that are placed in every KUD office. 2. Based on cooperative official information if there is suggestion come in the the cooperative secretary shall take the responsibility to followed it up. 3. Available communication book which recording every person came to cooperative office describe the name, address, propose, date, etc. The assigned officials responsible for preparing and conducting the consultation and communication activities with the stakeholders are the Heads of each KUDs (KUD), the following tasks: 1. Preparing the Operational Action Plans. 2. Initiating monthly regular action meetings. 3. Assuring that every decision resulted from all members agreement is being adhered to as planned. 4. Working closely with both the company and other parties, and coordinating the actions respectively. 5. Agreeing and signing the working agreement with the company. 6. Providing financial support to other parties when necessary depending on their needs. SPO 4006a.4 Page 22

25 The Procedure for Communication and Problem Management in cooperative (point 4; Duty and Responsibility) is describing the following matters: 1. The Secretary of KUD is assigned to monitor the suggestion box and to compile the suggestions submitted in the communication logbook. He/she is also responsible for setting up the response plan for all incoming suggestions/communications, as well as preparing for a meeting plan whenever necessary, to deal with all suggestions/petitions/complaints by coordinating it with the board members of KUD. Another task assigned for the secretary is to facilitate and to keep a documentation of the meetings and negotiations conducted for problem settlement. 2. The Head of KUD is responsible for formulating, ensuring, and assuring the responses are available to accommodate every suggestion/petition/complaint received and to also do the same for the actions taken to settle all the problems, both internally and externally. 6.3 There is a mutually agreed and documented system for dealing with complaints and grievances, which is implemented and accepted by all parties. There is a Procedure for Communication and Problem Management for in cooperative offices in which it is stated that the Flow of Communication and Problem Management is as follow Incoming letters are received (information queries, aspirations/request for assistance, and all incoming letters other than complaints) Recording them in communication logbook. Supply them with the corresponding response collected from the person-in-charge of communication of KUD. The responses may come in one of the following two forms: (a) Information query is granted following an agreement reached by all respective and authorized parties, among others are the regulatory body/cooperatives agency, relevant government institutions, Partner Company, and other entities. (b) Unable to supply responses. Response letter. The complaints received were summarized and documented in the Complaint Log Book of cooperatives that is detailing that the Incoming Report will specify the Date of the Letter, Name of the Complainant, Address, Content of Letter, the person receiving it, the follow-up, date, action taken, progress status, and the Person in Charge. There is a mechanism of conflict settlement in the Smallholders Institution, in which it is specified that there are several stages of settlement, which are on the level of Smallholders Group, KUDs, and Communication Forum of Plasma Smallholders. 6.4 Any negotiations concerning compensation for loss of legal or customary rights are dealt with through a documented system that enables indigenous peoples, local communities and other stakeholders to express their views through their own representative institutions. The result of the interview with the smallholders, KUD officials, and also the result of public consultation both confirmed that there was no case of the loss of legal rights or traditional rights for the plasma development, there has also never occurred the claim of plasma land by other party and the smallholders are already receiving their respective shares of the land (plots), confirmed in the Certificate of Ownership (SHM). 6.5 Wage and conditions for employees and for employees of contractors always meet at least legal or minimum industry standards and are sufficient to meet basic needs of personnel and to provide some discretionary income. Based on the interview with the manager of BWLL scheme smallholders, it was revealed that the KUDs are employing the administration clerks under the Specified Time Employment Agreement (PKWT), whose wages are determined based on the decision of Annual of Members (RAT), such as the wages payment for May 2012; 1. Panca Warga KUD employed 11 people to each work as Field Coordinator for IDR 1,000,000; as Grading Witness (FFB quality sorting process) for IDR 1,300,000; and as janitor for IDR 500, Berkat Ridho KUD employed 9 people for the positions of administration clerk for IDR 1,300,000; production clerk for IDR 1,100,000; and the Security Guard for IDR 1,000,000; and as janitor for IDR 500,000. SPO 4006a.4 Page 23

26 Each KUD in KJNP area is not employing people full time, instead, Specified Time Employment Agreement (PKWT) is applied, as seen in the Berkat Ridho KUD that employed Rinto using PKWT document No.01/KOPSA BERKAT RIDHO/SPK/01/2011, for the position of administration clerk with employment period from 3 January 2011 until 1 January The benefits and the amount of wages are referring to the result of Annual of the Members (RAT) of Sibuak Jaya KUD. Based on interview with sparaying harvesting worker at Kijang Damai smallholder group of Panca Warga KUD known that the worker receive wages IDR 80/kg for harvesting and IDR 80,000/Ha for chemical weeding spraying based on agreement between the worker and land owner. 6.6 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. There is a Circular Letter issued by the Head of Berkat Ridho KUD No. 01/KOPSABR-SE/01/2009 dated 2 January 2009 that is explaining the freedom of association, assembly and of speech for all members and employees of Berkat Ridho KUD, samllholder groups and associated contractors that explain in order to realize a harmonious working environment, dynamic and equitable to give freedom of association, assembly and of expression. Based on the interview with administration workers in Lestari Jaya KUD, production clerk in Berkat Ridho KUD and Grading worker in Panca Warga KUD there were no restrictions for all workers to be joining a workers union. 6.7 Child labour is not used. Children are not exposed to hazardous working conditions. Work by children is acceptable on family farms, under adult supervision, and when not interfering with educationprogrammes. A circular letter specifying the minimum age requirement is issued by the KUD and is addressed to every smallholder group leader. For example; Berkat Ridho KUD issued the same letter on 1 January 2011 No. 2/KOPSABAR-SE/01/2011 specifying the minimum age requirement addressed to all smallholder group leaders, all members and employees of KUD. The letter stated that in compliance with the Statute No. 13 Year 2003 on Employment, regarding the restrictions on employing minors, it has been decided that for every worker and employee recruitment process in Makmur Lestari KUD, the minimum age requirement is set to be 18 years old. For example; the 2011 list of employees biodata in Berkat Ridho KUD showed that a worker named Suhemi was 28 years old when being employed on 2 January Another sample case is of a worker named Riki Rinaldi, who was 22 years old when being employed by Lestari Jaya KUD Estate on 3 January Based on fields visit there was No child labour noted the smallholders very concern for their children education. 6.8 The employer shall not engage in or support discrimination based on race, caste, national origin, religion, disability, gender, sexual orientation, union membership, political affiliation, or age. A circular letter specifying on the equal opportunity and treatment in employment was issued by KUDs and was addressed to all smallholder group leaders. For example, Berkat Ridho KUD issued the letter regarding the equal opportunity and treatment in employment on 1 January 2011 No. 2/KUD MLL-SE/01/2011 that was addressed to all smallholder group leaders, members and employees of KUD. The letter specified the following: 1. Equal opportunity and treatment in employment shall be applied to all types of work regardless of ethnic origin, religion, racial, and gender. 2. Fair and equitable treatment in all aspects of personnel management in and around Makmur Lestari KUD workplace. There are documents available for reference to show that scheme smallholders has applied this equal treatment policy, such as recorded in the list of employee biodata in KUDs, the detail of which showed that employees are of different origin. Based on Interview with employees and KUD members confirmed that they are treated equally and no any kind of discrimination. SPO 4006a.4 Page 24

27 6.9 Policy to prevent sexual harassment and all other forms of violence against women and to protect their reproductive rights is developed and applied. A circular letter specifying on the prevention of sexual harassment and all forms of violent behavior against women, as well as on the protection of women s reproduction was issued by the KUD and was address to all smallholders group leaders. For example at Berkat Ridho KUD issued the letter on 2 January 2009 No. 03/KOPSABAR-SE/01/2009 regarding the prevention of sexual harassment and all forms of violent behavior against women, as well as the protection of women s reproduction and addressed it to all smallholder group leaders, members, and employees of KUD. The letter has put it clearly that Berkat Ridho KUD and its elements have all committed to providing the workplace that is harmonious and free from all kinds if discrimination, including sexual harassment and violent behavior against women. The procedures to handling if any reported of sexual harassment as follows: 1. In any case of sexual harassment, the injured party may file a report to KUD or to head of neighborhood (RT/RW), both in written and in verbal form. The report is then analyzed to decide what action should be taken upon it. 2. Assistant, supervisor, head of neighborhood, head of village, or KUD officials may offer necessary assistance to the victim. 3. Head of village, head of neighborhood and KUD shall file a report to the village authority as a follow-up to the aforementioned report of abuse. 4. The village authority shall then conduct an investigation and gather all related evidence. 5. Once the offender is proven guilty, necessary and appropriate sanction shall be taken by the village authority, based on village regulations or based on the applicable law. Based on interviews with female employees in the KUD offices that they were aware of the policy and the grievances procedure Scheme Managers deal fairly and transparently with smallholders and other local businesses. As recorded in the Complaint Log Book kept by BWL Office for the period of January 2009 April 2012, there were 5 complaints filed, processed and settled accordingly and no repetitive complaints are found. The FFB price information is monitored and updated closely using as reference the Result of Weekly FFB Price Determination held by Plantation Agency with the representatives from Companies, and Plantation Association of PIR - Trans (ASPEKPIR) of Riau Province. For example the meeting held on 5 June 2012 was to set up the period of 6 12 June 2012 and to expose the age classification of plants with price ranging from IDR 1, to IDR 1, per Kg of FFB. There is an FFB payment receipt available for reference in the document of Payment for FFB of Scheme Smallholders Conversion Purchase in KJNP (Panca Warga, Berkat Ridho and Lestari Jaya KUDs) for the period of 21 April to 20 May The document is putting into details the cooperative name, weekly price setting, tonnage/weight for current period, gross income, smallholder income, debt (credit), the amount received (net income) and the payee account number. There are agreement documents available in Scheme Smallholders Estates A document of Mutual Working Agreement between PT. Buana Wiralestari Mas and Participating Smallholders Cooperative in the area of Kijang Kencana Plasma (KJNP) in a Framework of Business Smallholder scheme of PIR Trans of PT. Buana Wiralestari Mas. The agreement is, at its core, regulating the activities of estate management, estate upkeep, harvesting, and crops marketing system for oil palm FFB. All of these activities are interrelated and cannot be separated from one another (Article 1 paragraph 2). This agreement also sets out the rights and obligations of each party respectively. An addendum to the Mutual Working Agreement between PT. Buana Wiralestari Mas and Participating Smallholders Cooperative in a Framework of Business Smallholder scheme of PIR Trans of PT. Buana Wiralestari Mas number 003/SPK-BWLM-KKCP/II/XII/2003, dated 13 December The essence of the agreement is to continue the cooperation or partnership in sale and purchase of FFB since smallholders bank loan has been fully paid. Oil Palm Fertilizer Sale and Purchase Agreement between PT. Buana Wiralestari with Kijang Mas KUD No. 003/SPK/KJNP/KUD-KM/01/2012-PJBPKS, dated 2 January An agreement on Replanting Savings Program in Smallholders Cooperatives for example agreement between PT Buana Wira Lestari Mas and Lestari Jaya KUD, Tapung Makmur Village, Number 018/PBR-008/RPLT/II/2011, dated 27 January SPO 4006a.4 Page 25

28 2011. This agreement was signed by company representatives, KUD officials, Bank representative, and was witnessed by Head of Village. A Document of FFB Transport Working for example in Berkat Ridho KUD No. 006/KOPSA-BR/01/2011/TransTBS dated 3 January 2011 between Berkat Ridho KUD and the transporter is valid from 3 january 2011 until 2 January 2013, covering the terms and conditions required for transport equipments used to deliver the FFB and loose fruits, contract payment, labor employment, sanctions, and dispute settlement. There were Payments of contract agreement which carried out by BWL and scheme samllholders, for example: Payment of FFB period 6-20 March 2012 from PT Buana WIra Lestari Mas to Berkat Ridho KUD, dated 3 May 2012 amount of IDR 61,107,150 and on 4 April 2012 amount of IDR 59,301,840. The evidence of payment in form of payment letter, recapitulation of FFB payment and recapitulation of smallholders FFB receipt period of March FFB payment conducted twice a month by BWL to cooperatives There are payment receipts available as written evidences for the contracts made by cooperatives in, such as: There is a document of credit installment scheme paid by the smallholders of Berkat Ridho KUD on May 2012 that covered the payment for multi-purpose loans given by a state-owned bank, payment for fertilizer payment of IDR 354,080,000 There was agreement for fertilizer between BWL and Lestari Jaya KUD first semester 2012 with contract number 007/SPK/KJNP/KUD-LJ/01/2012-PJBPKS dated 2 January 2012 for 648,920 Kg amount of IDR 2,401,025,000 with specification of fertilizer. Available payment of credit agreement perod of 21 April until 20 May 2012 amount of IDR 400,000,000 aknowledge by Kijang Plasma Manager and Lestari Jaya KUD head. Based on interviews with cooperative officials and smallholders known that the collection road and transport road upkeep carried out by every smallholder groups, however the main road upkeep was conducted by company (BWL) which support with haeavy equipment (grader) to maintain the main road from smallholder blocks to company palm oil mill. Based on the field visit, it was revealed that the roads in Kijang Kencan Plasma area are in good condition. The replanting activity in Panca Warga KUD shall be doneon an area of 101 Ha (1993 planting year) and is planned to be done on the year of The replanting activity in Berkat RIdho KUD shall be doneon an area of 251 Ha (1991 planting year) and is planned to be done on the year of 2020 The replanting activity in Lestari Jaya KUD shall be doneon an area of 976 Ha (1993 planting year) and is planned to be done on the year of 2019 There are documents to prove that the replanting strategy is supplied with the investment scheme plan, and that the activity has already been disseminated and agreed upon by the scheme smallholders groups. The documents are as follow: Mutual Working Agreement on Savings Management of Oil Palm Replanting between PT. Bank Sinarmas and Lesatri Jaya KUD with PT. Buana Wiralestari Mas, document No. 018/PBR-008/RPLT/II/2011, dated 27 January The agreement was agreed and signed by all respective parties; i.e. partner company, KUD Officials, Bank representative, and was witnessed by the Head of Village. A Statement Letter issued by KUD Officials, for example at Lestari Jaya KUD stating the confirmation to participate in the replanting program conducted by PT. Buana Wiralestari Mas on 27 January Record of attendance for the dissemination gathering is available and listed down of Lestari Jaya KUD as the participants Scheme managers contribute to local sustainable development wherever appropriate. Records of contribution from scheme smallholder members was carried out by welfare fund which collected evaery month and used for the surrounding local community development such as contribution to health care facilities, schools, mosque, and for the village social activities., for examples: 1. Contribution for Panca Warga KUD Mosque in 2011 amount of IDR 372,000, Medical help for Tapung Makmur village member (on behalf Agus Aryono) at Lestari Jaya KUD on 2 January 2012 amount of IDR 2,500,000 SPO 4006a.4 Page 26

29 PRINCIPLE #7 Responsible development of new plantings 7.1 A comprehensive and participatory independent social and environmental assessment is undertaken prior to establishing new plantings or operations, or expanding existing ones, and the results incorporated into planning, management and operations. Up to now, there has been no new development of plantations or replanting in the KUD area of Kijang Kencana Plasma (KJNP) PT Buana Wiralestari Mas scheme smallholder. Not Applicable 7.2 Soil surveys and topographic information are used for site planning in the establishment of new plantings, and the results are incorporated into plans and operations. Up to now, there has been no new development of plantations or replanting in the KUD area of Kijang Kencana Plasma (KJNP) PT Buana Wiralestari Mas scheme smallholder. Not Applicable 7.3 New plantings since November 2005, have not replaced primary forest or any area required to maintain or enhance one or more High Conservation Values. Up to now, there has been no new development of plantations or replanting in the KUD area of Kijang Kencana Plasma (KJNP) PT Buana Wiralestari Mas scheme smallholder. Not Applicable 7.4 Extensive planting on steep terrain, and/or on marginal and fragile soils, is avoided. Up to now, there has been no new development of plantations or replanting in the KUD area of Kijang Kencana Plasma (KJNP) PT Buana Wiralestari Mas scheme smallholder. Not Applicable 7.5 No new plantings are established on local peoples land without their free, prior and informed consent, dealt with through a documented system that enables indigenous peoples, local communities and other stakeholders to express their views through their own representative institutions. Up to now, there has been no new development of plantations or replanting in the KUD area of Kijang Kencana Plasma (KJNP) PT Buana Wiralestari Mas scheme smallholder. Not Applicable 7.6 Local people are compensated for any agreed land acquisitions and relinquishment of rights, subject to their free, prior and informed consent and negotiated agreements. Up to now, there has been no new development of plantations or replanting in the KUD area of Kijang Kencana Plasma (KJNP) PT Buana Wiralestari Mas scheme smallholder. Not Applicable 7.7 Use of fire in the preparation of new plantings is avoided other than in specific situations, as identified in the ASEAN guidelines or other regional best practice. Up to now, there has been no new development of plantations or replanting in the KUD area of Kijang Kencana Plasma (KJNP) PT Buana Wiralestari Mas scheme smallholder. Not Applicable PRINCIPLE #8 Commitment to continuous improvement in key areas of activity 8.1 Growers and millers regularly monitor and review their activities and develop and implement action plans that allow demonstrable continuous improvement in key operations. There is a document of Continuous Improvement (Innovation) of Amarta Jaya Plasma, such as the Construction of Owl s Nests (Gupon) using a ferocement system, and use of sickle safety cover. SPO 4006a.4 Page 27

30 There is a sustainable operational improvement between BWL and the smallholders, which was stated in the document of Agronomy and Advisory Audit year 2012 for Kijang Kencana Plasma (KJNP) o 30 March 2012, done by audit team from Scheme smallholders advisers of BWL explaining: 1. Cooperation between BWL and KUDs regarding the fertilizer purchasing by scheme smallholder from partner company to support manuring implementation and recommendation from leaf analysis which has been carried out by BWL 2. Quality of pruning activity with U-shape frond stacking and well monitoring of circle chemical spraying by scheme smallholders assistant 3. Road upkeep of collection drain and field drain by conducting the harvest supervisoring (frond not discharge to field drain) At the time of assessment the improvement plans have been develop. SPO 4006a.4 Page 28

31 3.2 Identification of Findings, Corrective Action, Observations, Opportunity for Improvement and Noteworthy Positive Components. During the assessment 3 (three) nonconformities were assigned against Minor Compliance indicators and 3 (three) opportunities for improvement were identified. Further explanation of the non-conformities raised and corrective actions taken by the company are provided in this section. Corrective actions taken to close all non-conformities shall be verified during next assessment Identification of Findings, Corrective Actions and Observations at Assessment CAR No Ref Std Finding Area Grade Time Limits Corrective Action Observation Status Minor Minor S-1 Open Minor Minor Integrated Pest Management understanding. Based in field visit and interview with smallholder from Tani Jaya smallholder group at block B-45 known that the smallholders has not understand the integrated pest management handling and has not receive any training or guidance from scheme smallholder manager (BWL staff). Procedure and Handling of accident. Based on field visit and interview with smallholders at block I-27 and J-56 known that the smallholders have not understand regarding the procedure and handling if there is an accident happens.. Safety equipment. Ased on field observation at block J-56 (Lestari Jaya KUD) found that harvesting supervisor (mandor) do not have first aid equipment Panca Warga KUD Berkat Ridho KUD and Lestari Jaya KUD Lestari Jaya KUD Minor S-1 Open Minor S-1 Open Closing Date SPO 4006a.4 Page 29

32 3.2.2 Opportunity for Improvement No Ref Std Descriptions 1 Minor Smallholders institution is entitled to making any necessary corrections by re-evaluating all the equipments and the supplies of first aid kit to meet the number of active workers (harvester and upkeep worker) each day Smallholder cooperatives should consider doing repairs of damage HCV sign boards Noteworthy Positive Components No Ref Std Descriptions 1 Major The production yields from scheme smallholders are high, reaching the same levels as those of the company s estates The mutual relationship occurs between the smallholder scheme adviser and the smallholders institution is well handled. 3 Minor The payments for all activities conducted as a compliance with what is listed down in the mutual working agreement (e.g. FFB payment) are made on schedule and transparent for everyone. SPO 4006a.4 Page 30

33 3.3 Summary of Arising Issues from Public, Management and Auditor Responses PT. MUTUAGUNG LESTARI Public Issues (Institution/ NGO/Community) Plantation Agency of Kampar District: Sinarmas Scheme Smallholders in Kampar Region has well complied with the cultivation technics. This is made possible by the assistance that the Plantation Agency has been given since the beginning of the development. Cooperatives Agency of Kampar Dissstrict: The cooperatives included in Kampar Sinarmas Scheme Smallholders have been submitting the annual report to the Head of Cooperatives Agency and has also implemented all terms listed in the cooperative regulation. Management Responses PT. BWL Sinar Mas Agrobisnis is committed to providing a sustainable assistance for the smallholders and still putting into account the advancement of agricultural technology, environmental sustainability, occupational health and safety, the continuous social welfare, and the transparency in assigning a professional staff in the right position according to their competency. PT. BWL Sinar Mas Agrobisnis is providing continuous coaching and counseling on the standard and correct principles of cooperative s administration matters, and the compliance with the applicable cooperative laws. Auditor Responses The evaluation resulted from field study on the oil palm cultivation technics showed that the assistance given by the mentor has been a major help, resulting in a high FFB production (yield/year) The field observation showed that the required report of annual cooperative s work performance is well submitted on a regular basis. Based on Consultation with cooperative Agency stated that the cooperative employee s wages determine each Cooperative Rapat Anggota Tahunan (Anual Members ). Head of Village and the Respective Residents A scheme smallholder has contributed to give people positive impact to enhance the community welfare. Subhan, Abdul Jalil (Smallholders) Sibuak Jaya KUD Kusni, Hendar Suparman, Catur Yunanto and Mulikan (Smallholders) Mukti Lestari KUD Sangkot (Smallholder) Bangun Desa KUD Trimono, Sahroni and Martin (Smallholders) Sibuak Jaya KUD Cooperative Agency stated that the cooperative employee s wages determine each Cooperative Rapat Anggota Tahunan (Anual Members ). PT. BWL Sinar Mas Agrobisnis has committed to provide the correct technical coaching and assistance on oil palm cultivation to the smallholders, making it possible to ensure high productivity and to enhance the welfare of the smallholders in general and of the people living around the area of plasma. The commitment kept by PT. BWL Sinar Mas Agrobisnis is to provide a continuous coaching assistance for KUD and the smallholders on the importance of: 1. Occupational safety aspect and Personal Protection Equipment (PPE) 2. Environmental preservation and endangered animals protection 3. Oil palm cultivating technics and integrated pest management in oil See on Criteria 6.5 For every activity held, KUD has provided the Personal palm plantation. SPO 4006a.4 Page 31 The field visit and the interview with scheme smallholders revealed that the partnership program provided by BWL has given positive impact in relation to the welfare enhancement of people living in villages nearby. Based on the field visit as well as on the document analysis, it was revealed that KUD has provided the Personal Protection Equipment (PPE) for all workers, the procedure of land fire emergency response. It was also found that there has been planted the host plant of leaf-eating worm predator

34 Protection Equipment, First Aid Kit Box given to every supervisor. There are also the Land Fire Emergency Response Procedure and pest management efforts using pest predator. Agrochemical packaging waste is cleaned according to the label request then it is sent to temporary hazardous waste storage to be sent back to Agrochemical Suppliers. It was also found protected animals in the areas of Amartha Jaya Plasma and Sungai Tapung Plasma, namely White throated kingfishers and Leopard cats. PT. MUTUAGUNG LESTARI 4. The correct use of herbicides, in compliance with the regulations and the packaging handling management. 5. The correct use of First Aid Kit. (Turnera subulata and the construction of owl nests), agrochemical packaging waste is cleaned according to the label request then it is sent to temporary hazardous waste storage to be sent back to Agrochemical Suppliers. It was also found protected animals in Kijang Kencana Plasma area, namely White throated kingfishers and Leopard cats. SPO 4006a.4 Page 32

35 4.0 CERTIFIED ORGANISATION'S ACKNOWLEDGEMENT OF INTERNAL RESPONSIBILITY 4.1 Formal Sign-off of Assessment Findings Hereunder sign by management representative from inspected company to acknowledge a field assessment and agree for all content explained in this assessment report, included of non-compliance findings. Signed on behalf of: IVOMAS TUNGGAL Head of Environment Department Mutuagung Lestari Lead Auditor Ismu Zulfikar 30/July/2012 Nanang Mualib 30/July/2012 SPO 4006a.4 Page 33