Roundtable on Sustainable Palm Oil - TÜV Rheinland · 2020-02-02 · Roundtable on Sustainable Palm Oil Annual Surveillance Audit Report Report no. : ASA2-14025 Surveillance assessment

Roundtable on Sustainable Palm Oil Annual Surveillance Audit Report

Report no. : ASA2-14025

Surveillance assessment against

the RSPO Principles & Criteria Indonesia year 2013 (Generic) and RSPO SCCS year 2014

Name of client

PT Rimba Mujur Mahkota Sikarakara Palm Oil Mill

Head Office : Jl. Timor No. 139, Gang Buntu Village, Medan Timur Sub District, Medan District, North Sumatera Province,

Indonesia

Estate & Mill : Sikarakara Village, Natal Sub District, Mandailing Natal District, North Sumatera Province, Indonesia

Date of assessment: August 08 to 12, 2016

Report prepared by:

Aswan Hasibuan (RSPO Lead Auditor)

Certification decision by: Abdul Qohar

(Director of PT TUV Rheinland Indonesia)

Certification Body: PT TUV Rheinland Indonesia

Menara Karya Lantai 10, Jl. H.R. Rasuna Said Block X-5 Kav.1-2

Setiabudi, Jakarta, Indonesia 12950 Tel: +62 21 579 44 579 Fax: +62 21 579 44 575

www.tuv.com

TABLE OF CONTENTS

1.0 SCOPE OF CERTIFICATION ASSESSMENT ............. .......................................... 3

1.1 Principles & Criteria Used ...................................................................................................................... 3

1.2 Type of Assessment ............................................................................................................................... 3

1.3 Certification Details ................................................................................................................................ 3

1.4 Location and Maps ................................................................................................................................. 4

1.5 Organisational Information / Contact Person: ........................................................................................ 6

1.6 Description of Supply Base .................................................................................................................... 6

1.7 Actual production volumes, tonnages and projected outputs. ............................................................... 7

1.8. Dates of Plantings and Replanting Cycles ............................................................................................ 7

1.9 Area of Plantation (Total, Planted and Mature) ..................................................................................... 8

1.10 Progress against Time Bound Plan : ................................................................................................... 8

1.11 Compliance to Rules for Partial Certification ....................................................................................... 9

1.12 Progress of associated smallholders or outgrowers towards RSPO compliance ............................. 10

1.13 Approximate Tonnages Certified ....................................................................................................... 10

2.0 ASSESSMENT PROCESS .................................................................................. 11

2.1 Certification Body ................................................................................................................................. 11

2.2 Qualifications of Lead Assessor and Assessment Team .................................................................... 11

2.3 Assessment Methodology & Agenda ................................................................................................... 12

3.0 ASSESSMENT FINDINGS ................................................................................... 16

3.1. Summary of Findings for RSPO P&C and Supply Chain ............................................................... 16

3.2. Status of Previously Identified Non-conformities ............................................................................ 46

3.3. Identified Non-conformances, Corrective Actions Taken and Auditors Conclusions .................... 51

3.4. Noteworthy Positive Component .................................................................................................... 53

3.5. Conclusion and Recommendation for RSPO P & C and Supply Chain Certification .................... 53

3.6. Issues Raised by Stakeholders and Findings Pertaining to Issues ............................................... 53

4.0 CERTIFIED ORGANISATION’S ACKNOWLEDGEMENT OF INT ERNAL

RESPONSIBILITY .................................... ........................................................... 56

4.1 Date of Next Surveillance Visit ............................................................................................................. 56

4.2 Acknowledgements of Internal Responsibility and Formal Sign-Off by Client .................................... 56

APPENDICES ............................................................................................................ 57

Appendix 2 : Surveillance Audit Plan ......................................................................................................... 59

Appendix 3 : List of Abbreviations .............................................................................................................. 63

Appendix 4 : Observations and Opportunities for Improvement ................................................................ 63

RSPO Annual Surveillance Audit Report

PT Rimba Mujur Mahkota – North Sumatera

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1.0 SCOPE OF CERTIFICATION ASSESSMENT

1.1 Principles & Criteria Used

The operations of the palm oil mill(s) and its supply base of FFB were assessed against the RSPO Principles & Criteria (generic) year 2013 and RSPO SCCS November 2014. Since the management of smallholder scheme is under PT Rimba Mujur Mahkota directly, the requirement for the smallholder (KUD Sumber Usaha) certifica-tion audit is also against the RSPO Principles & Criteria (generic) year 2013.

1.2 Type of Assessment

The annual surveillance assessment was carried out on 1 mill and 1 estate under PT Rimba Mujur Mahkota and 1 smallholder estate under Village Cooperatives (Koperasi Unit Desa) of Sumber Usaha.

1.3 Certification Details

The details of RSPO certification of PT Rimba Mujur Mahkota as per the table below.

Table 1 : RSPO Certification details of PT Rimba Mu jur Mahkota

RSPO Membership no. : 1-0124-12-000-00

RSPO Certificate no. : 824 502 14025

Date of first RSPO certificate & validity : November 07, 2014 & validity : No-vember 07, 2014 to November 06, 2019

Date of certification audit : June 16 to 21, 2014

Date of previous surveillance audit : this is 2nd surveillance audit

Date of revised RSPO certificate & validity (if app lica-ble) :

-

CPO tonnages claimed : 30,593 tonnes

PK tonnages claimed : 6,635 tonnes



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1.4 Location and Maps

Figure 1 : Location map of PT Rimba Mujur Mahkota i n Mandailing Natal District, North Sumatera, In-donesia



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Figure 2 : Map of Estate PT Rimba Mujur Mahkota



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Table 2: GPS locations for all estates and mills in cluded in annual surveillance assessment

1.5 Organisational Information / Contact Person:

PT Rimba Mujur Mahkota (RMM) is not stand-alone company even though it is using individual RSPO mem-bership. PT. RMM was established in 1992, headquartered in Medan, a domestic investment company which is engaged in the cultivation of palm plantation and Palm Oil (CPO). The shareholder of PT. RMM owned by PT. Pasifik Agro Sentosa (PAS) Jakarta (60% ) and PT. Prima Antar Surya Medan ( 40% ). PT Pacific Agro Sen-tosa (PT PAS) which is a majority shareholder of the PT Rimba Mujur Mahkota is an agribusiness company that has 12 subsidiaries 8 of which grow oil palm in North Sumatera, South Sumatera, and West Kalimantan. With headquarters in Jakarta, PT. PAS has 10,000 employees spread across Indonesia.

Contacts details of the company are as follows:

1.6 Description of Supply Base

Table 3 : FFB Supply Information for PT Rimba Mujur Mahkota - Sikarakara Mill, (January to December) year 2015 and (January to August) year 2016

FFB Contributors

FFB supplied Year 2015


Tonnes % Tonnes

%

Company owned estates :

Sikarakara estate (certified)

116,276 49.29 74,313 44.12

Smallholder :

KUD Sumber Usaha (certified)

16,572 7.02 9,978 5.92

Sister company:

PT DIS 5,142 2.18 7,202 4.28

Name of mill / es-tate

Location GPS locations

Latitude Longitude Sikarakara POM Sikarakara village, Natal Sub District, Mandailing

Natal District, North Sumatera Province 000 40’ 19.4” N 990 05’ 31.2” E

Sikarakara Es-tate

Sikarakara village, Natal Sub District, Mandailing Natal District, North Sumatera Province

000 39’ 30.8” N 990 05’ 42,6” E

Smallholder Es-tate (KUD Sum-ber Usaha)

Sikarakara village, Natal Sub District, Mandailing Natal District, North Sumatera Province 000 43’ 36,2” N 990 06’ 24,3” E

Company Name : PT Rimba Mujur Mahkota

Address : Jl. Timor No.39, Gang Buntu Village, Medan Timur Sub District, Medan Dis-trict, North Sumatera Province

Contact Person : Mr. Idris

Telephone & Fax : +62-61-457 0 222 & +62-61-457 2 073

Email : [email protected]



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FFB Contributors



Tonnes % Tonnes

%

Outgrower 97,925 41.51 76,947 45.68

Total 235,915 100 168,440 100

1.7 Actual production volumes, tonnages and project ed outputs.

Table 4 : Certified tonnages claimed, certified to nnages purchased or sold, total and projected CPO a nd PK production from PT Rimba Mujur Mahkota

Note:

*certified CPO & PK sold including carried over from previous year period. 30,593 mt

** From certified source using OER 21.76% , KER 4.58 %plus non certified source using OER 19.73% ; KER 4.64%.

*** From certified source using OER from certified sources

1.8. Dates of Plantings and Replanting Cycles The company follows a replanting cycle of 25 years. Information on the year of plantings is as per the table be-low.

Table 5 : Age and year of plantings of company esta te supplying to PT Rimba Mujur Mahkota (RMM)

Age & Year of Plantings Oil palm planted area at each estate (ha)

Total Sikarakara Estate Smallholder estate

0 – 5 (2012 – 2016) 0.00 0.00 0.0

6 – 10 (2007 – 2011) 0.00 0.00 0.00

11 – 15 (2002 – 2006) 1,969.00 600 2,569

16 – 20 ( 1995 – 2001) 2,645.00 0.00 2,645

TOTAL 4,614.00 586.00 5,214

Amount (MT) Year 2015 Amount (MT)

Until August 20 16 CPO PK CPO PK

Certified tonnages claimed 28.910 6.087 20.564 4.081 Certified tonnages sold* -- -- 12.550 3.600 * Certificate sold to Green Palm ** (PK => PKO 45%) 25.056 ( PKO)

2.510 11.000 (PKO) 1.000

Certified tonnages purchased* -- -- -- -- Actual Production* 49.253 10.873 37.021 7.462 Actual certified production** 28.910 6.087 20.564 4.081 Extraction rate for certified product

21,97%

4,63% 22,22

% 4,41

% Projected output for year 2015 53.479 11.799 -- -- Projected certified product for year 2016 ( at OER 22,5% and KER 4,60% )

-- -- 30.710 6.349



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1.9 Area of Plantation (Total, Planted and Mature)

Table 6 : Oil Palm Planted Area Summary, FFB Produc tion and Average yield/ha for PT RImba Mujur Mahkota

Estate Name Total area

(ha)

Oil Palm Planted area

(ha)

Mature (Production)

area (ha)

Immature (Non-production)

area (ha)

FFB Produc-tion*

(tonnes)

Average yield/ ha

Sikarakara estate 4,956.00 4,614.00 4,614.00 0.00 116,276 25.20 Smallholder estate 600.00 600.00 600.00 0.00 16,572 27.62

TOTAL 5,556.00 5,214.00 5,214.00 0.00 132,848 25.47

Note : * Period of January to December 2015.

Table 7: Land use data for PT Rimba Mujur Mahkota

Estate Name Total ar-ea (ha)

Oil Palm Planted

Area (ha)

HCV

(ha)

Land used for other purposes (ha)

Housing, Road,

Drainage, Nursery

Not plant-able area

Mill Enclave

Sikarakara estate 4,956.00 4,614.00 241 85 0.00 16.00 0.00

Smallholder estate 600.00 600 0 0 0.00 0.00 0.00 TOTAL 5,556.00 5,214.00 269.50 85 0.00 16.00 0.00

1.10 Progress against Time Bound Plan : From the explained on section 1.5 above, PT RMM as subsidiaries PT Pasific Agro Sentosa required to provid time-bond plan as stated below:

Name of Subsidiaries Location Total area Certification sta-

tus

PT. Barumun Agro Sentosa (PT.BAS) RSPO Member :No: 1-0059-08-000-00

Desa Jambu Tomang, Kec. Barumun Tengah, Kab. Padang Lawas Utara, North Sumatra - INDONESIA

12,319 Ha ( HGU, year 1987 )

Certified on Oc-tober 2010

PT. Rimba Mujur Mahkota (PT.RMM). RSPO Member :No: 1-0124-12-000-00

Desa Sikara-kara Kec. Natal, Kab. Mandailing Natal, North Sumatra - INDONESIA

4.956 Ha ( HGU, year 2002 )

Certified on (No-vember. 2014)

PT. Dinamika Inti Sentosa (PT.DIS)

Desa Sundutan Tigo, Kec. Natal, Kab. Man-dailing Natal, North Sumatra - INDONESIA

6,250 Ha (loca-tion Permit)

2026

PT. Cipta Usaha Sejati (PT.CUS) RSPO Member :No: 1-0078-09-000-00

Kec. Simpang Hilir, Kab. Kayong Utara, West Kalimantan - INDONESIA

15,110.56 Ha (HGU, year 2011)

2016

PT. Jalin Vaneo (PT.JV) (not member yet)

Kec. Simpang Hilir, Kab. Kayong Utara, West Kalimantan - INDONESIA

15,699 Ha (HGU, year 2012)

2023



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1.11 Compliance to Rules for Partial Certification Compliance of the uncertified management units under Pasific Agro Sentosa against the rules for partial certifi-cation according to RSPO Certification System clause 4.2.4 was assessed by submission self assessment re-port. A summary of findings is as stated below.

Partial Certification Requirements Audit Findings

(a) The parent organization or one of its majority owned and / or managed subsidiaries is a mem-ber of RSPO.

PT Rimba Mujur Mahkota is subsidiary of Pacific Agro Sentosa. PT RMM has RSPO member with member-ship number No: 1-0124-12-000-00 (since: June 18, 2002).

(b-d) A challenging time-bound plan for certifying all its relevant entities is submitted to the Certifi-cation Body (CB) during the first certification au-dit. The time-bound plan should contain a list of subsidiaries, estates and mills.

Any revision to the time-bound plan or to the cir-cumstances of the company shall cause the plan to be reviewed. for whether it is still appropriate, such that changes to the time-bound plan are permitted only where the organisation can demonstrate that they are justified

See table above, some changes on company’s time bound plan due to several reason explained above.

(e) No replacement of primary forest or any area identified as containing High Conservation Val-ues (HCVs) or required to maintain or enhance HCVs in accordance with RSPO criterion 7.3. Any new plantings since January 1st 2010 must comply with the RSPO New Plantings Procedure

There are some newly developed plantation areas un-der PT Cipta Usaha Sejati (CUS) and PT Jalin Vaneo (JV), West Kalimantan province Indonesia. Company conduct HCV assessment in year 2012 and conduct land use changes analisis (LUCA). According to infor-mation stated on HCV amongt the 13 HCVs and asso-ciated sub-values assessed, 11 were deemed present at JV and 10 at CUS.

Further information stated on HCV document, key no-go areas in PT CUS and PT JV are merged into a sin-gle layer and overlaid on the license boundary. The to-tal area of the recommended HCVMA inside the li-cense boundary is c. 20,280 ha. The total non-HCVMA area within the license area is c. 24,830 ha. The area of non-HCVMA that overlaps with areas planned by the company for future oil palm development is estimated to cover c. 4120 ha. Such areas would be considered available for new development, subject to release by local communities through a fair and proper Free Prior and Informed Consent (FPIC) procedure for land re-lease, and full payment of compensation.

From LUCA document the indicating areas of clear-ance since 2005 is 22,042.38 ha both in PT CUS and PT JV with various vegetation coefficients. Currently both companies are under processing on RSPO Re-mediation and Compensation Porcedure.

(f) Land conflicts, if any, are being resolved through a mutually agreed process, e.g. RSPO Grievance procedure or Dispute Settlement Facil-ity, in accordance with RSPO criteria 6.4, 7.5 and

There are identified land dispute in several company’s subsidiaries i.e.:

- Land dispute in PT Cipta Usaha Sejati with villager from Lumbuk Batu village, Kayong Utara District, for



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Partial Certification Requirements Audit Findings

7.6. total area 1735 ha, under resolution involving Inte-grated Team Land Settlement, National Land Agen-cy.

- Dispute regarding smallholder scheme development in PT Rimba Mujur Mahkota and PT Dinamika Inti Sentosa with community from Bintuas village 740 ha and Buburan Village 596 ha, Mandailing Natal Dis-trict. There are some agreements signed however some community still not satisfied with the agree-ment result.

- Claime from “Gerakan Pemuda Untuk Keadilan Rakyat (GPUK)” regarding land occupied by PT Ba-rumun Agro Sentosa 235.50 Ha. And Claim from Haji Soleh Hasibuan. Has been solved and clarified by management PT BAS through letter on February 24, 2015.

(g) Labour disputes, if any, are being resolved through a mutually agreed process, in accord-ance with RSPO criterion 6.3.

There are some labour dispute in several companys subsidiaries, i.e.:

- Complaint regarding “Eid Mubarak Allowance” in PT CUS in June 2016. The casual wokers reported to Man Power Officer Kayong Utara District.

- Labour dispute in PT RMM regarding minimum wag-es in year 2015 has been solved.

-

(h) Legal non-compliance, if any, are being re-solved in accordance with the legal requirements, with reference to RSPO criteria 2.1 and 2.2.

Some of PT PAS’s other management units have not complied with certain legal requirements, for example in PT CUS, PT JV, those has been identified on audit re-port as well as legal compliance in PT BAS has been recorded on the relevant audit report.

1.12 Progress of associated smallholders or outgrow ers towards RSPO compliance

The scope of this certification audit includes FFB from smallholder scheme area under PT RMM management, i.e. KUD Sumber Usaha.

1.13 Approximate Tonnages Certified

The approximate tonnages certified, based on average projection of FFB production period year 2016 for com-pany owned estate and smallholder scheme only are as follows:

Crude Palm Oil (CPO) : 30,592.73 tonnes Palm Kernel (PK) : 6,634.74 tonnes



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2.0 ASSESSMENT PROCESS

2.1 Certification Body PT TUV Rheinland Indonesia is member of Group TÜV Rheinland Group, a global leader in independent test-ing and assessment services. The TÜV Rheinland Group was established in 1872 with offices located in over 490 locations in 62 countries on all five continents. PT TUV Rheinland Indonesia offers certification for a wide range of management systems according to established international standards including ISO 9001, ISO 14001, OHSAS 18001, SA 8000, as well as CDM Validations and Verifications. PT TUV Rheinland Indonesia’s office is located in Jakarta, Indonesia.

2.2 Qualifications of Lead Assessor and Assessment Team

Name Position Qualifications / Experience

Aswan Hasibuan Lead Auditor

Education : Bachelor of Industrial Engineering, University of North Sumatera. Trainings attended : ISO 9000:2000 Series Auditor / Lead Auditor Training - PE International (Jakarta), IEMA Advanced EMS Auditor (IEMA/EARA ISO 14001) Auditor / Lead Auditor Training Course - PE International (Jakarta), OHSAS 18001 Lead Auditor Training Course - PE International (Jakarta). Working experience : Experienced in Quality Control from 1994-2004. Auditor for Quality Management System since 2004 – present. Auditor for Environmental Management Sys-tem since 2005 – present. Auditor for OHSAS 18001 since 2007 - present. Conducted over 100 Quality Management System audits since 2004, over 50 Environmental Manage-ment System audits since 2006, and over 25 OHSAS audits since 2007.

Panggading Nainggolan

Auditor

Education: Bachelor of Social, Social Science and Political Institute, Jakarta. Trainings attended : RSPO in house training by Mutu Agung Lestari, ISPO training by ISPO Comission and QHSE Awareness QHSE (management system review dan inte-grated management system concept ISO 9001, 14001, OHSAS. Working experience: National Comission for Children Pro-tection (Komisi Nasional Perlindungan Anak) – Public Rela-tion and Staff Education program – Common Ground Indo-nesia, Reporter on “Global Informasi Bermutu”, Producer on Netwave Multimedia, Producer on “Satu Visi Perkasa Produksi”, Project Supervisor on Surya Solusi Informasi and Auditor for ISPO & RSPO.

Budi Setiawan Auditor

Education: Bachelors Degree in Forestry - Bogor Agriculture University, Indonesia Trainings attended: Indonesian Sustainable Palm Oil (ISPO) Lead Auditor Course by Komisi ISPO, Quality Management System (QMS) Auditor/Lead Auditor by IRCA (ISO 9001:2008), Environmen-tal Management Systems Auditor/Lead Auditor Conversion Training by IRCA (ISO 14001-2004), Calculation of Green House Gas at Palm Oil Plantation by Komisi ISPO, SVLK Auditor Training by Ministry of Forestry, CoC Auditor by LEI, PUB and Café training by ministry of tourism.



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Name Position Qualifications / Experience

Work experience:

Staff RSPO in PT MAS (2008-2009), Staff Planning & Analysis in PT Bakti Sukses Mandiri (2009-2010), PT Mutu Hijau Indonesia, Jakarta as Technical Manager (2015-2016), HR and finance manager (2014-2015), Auditor in PT Mutu Hijau Indonesia (2010-2016), and Auditor in PT TUV Rheinland Indonesia (2016-present)

2.3 Assessment Methodology & Agenda

The 2nd surveillance assessment was conducted between August 08 to 12, 2016 as per the assessment pro-gram below. The assessment was carried out in accordance with PT TUV Rheinland Indonesia’s RSPO audit procedure as well as the RSPO Certification Systems document. During the assessment, the qualified TUV Rheinland assessors used the RSPO standard as endorsed for the country in which the assessment took place and recorded their findings.

1 estate, 1 smallholder’s scheme and 1 mill were visited and the assessment team carried out field and docu-ment assessments of compliance to all the RSPO principles and criteria and RSPO SCCS year 2014. Common systems were identified and specific evidence was recorded for individual estates. Interviews were conducted at all estates and the mill.

The company proposed the correction and corrective action for all identified non conformities raised to the cer-tification body 30 days after the closing meeting. Verification of closure of major non-conformances was con-ducted 2 months after the closing meeting of the main assessment and implementation of corrective actions for minor non-conformities will be verified during the next surveillance audit. The certification assessment agenda is as explained below.



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Surveillance Audit Agenda.

Date / Time (1) Organizational Unit and Processes Auditor / Ab-

brev. Interviewee Procedure - EM/QM Element -

Standard Chapter

Monday, August 08th, 2016 06.00 - 07.10 Travelling from Medan to Padang AH JT 231 (Lion Air) 06.20 – 08.05 Travelling from Jakarta to Padang PN, BS GA 160 07.50 – 08.00 Travelling from Kuala Lumpur to

Padang HS AK-405 (Air Asia)

08.30 Travelling from Padang to site/Natal

All Auditor

Tuesday, August 09th, 2015 08.00 – 09.00 • Opening Meeting

• Introduction by team leader. • Presentation by Company’s man-

agement regarding progress of oil palm plantation and palm oil mill

All Auditor Top Management & Related Manager

09.00-12.00

Verification of correction and correc-tive action from previous audit

All Auditor Related Manager

12.00-14.00 Break Lunch and Pray 14.00-17.00

Kebun Sikarakara dan Kebun Plasma

Verification of document about En-vironment, Agrochemical, OHS Is-sues • Agrochemical • OHS • Environmental • Waste • Continous improvement • Emergency responses to land

burning

AH Estate Prinsip 4 Criteria 4.5;4.6; 4.7

Prinsip 5 Criteria 5.3; 5.4 Prinsip 7 Criteria 7.2; 7.4; 7.5;7.6 7.7; 7.8

Prinsip 8 Criteria 8.1

14.00-17.00 Kebun

Sikarakara dan Kebun Plasma

Verification of document about Le-gal Land, Management Plan, Best Practices, HCV Issues • Transparancy • Compliance laws and regulations • Legal Land • Management plan • Water management • HCV • Continous improvement • Efficiency of energy • Reduce pollution and emission

BS Estate Prinsip 1 Criteria 1.1; 1.2; 1.3

Prinsip 2 Criteria 2.1; 2.2.1; 2.2.2


Prinsip 4 Criteria 4.1;4.4;4.8

Prinsip 5 Criteria 5.1; 5.2; 5.6 Prinsip 7 Criteria 7.3


14.00-17.00 Kebun

Sikarakara dan Kebun

Plasma

Verification of document about Best Practices, Socials and employees Issues • • Conflict, land dispute • Environmental Doc (Social issues) • Social and employees • Continous improvement

PN Estate Prinsip 2 Criteria 2.2.3; 2.2.4; 2.2.5; 2.2.6; 2.3

Prinsip 4.2; 4.3

Prinsip 5

Criteria 5.5

Prinsip 6 Criteria 6.1-6.13 Prinsip 7 Criteria 7.1;


End of 1 st day audit Wednesday, August 10 th, 2016

08.00-12.00 Kebun

Sikarakara dan

Verification of document about En-vironment, Agrochemical, OHS Is-sues

AH Estate Prinsip 4 Criteria 4.5;4.6; 4.7

Prinsip 5



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Standard Chapter

Kebun Plasma • Agrochemical • OHS • Environmental • Waste • Continous improvement • Emergency responses to land

burning

Criteria 5.3; 5.4 Prinsip 7 Criteria 7.2; 7.4; 7.5;7.6 7.7; 7.8


08.00-12.00 Kebun

Sikarakara dan Kebun Plasma

Verification of document about Le-gal Land, Management Plan, Best Practices, HCV Issues • Transparancy • Compliance laws and regulations • Legal Land • Management plan • Water management • HCV • Continous improvement • Efficiency of energy • Reduce pollution and emission

BS Estate Prinsip 1 Criteria 1.1; 1.2; 1.3

Prinsip 2 Criteria 2.1; 2.2.1; 2.2.2


Prinsip 4 Criteria 4.1;4.4;4.8

Prinsip 5 Criteria 5.1; 5.2; 5.6 Prinsip 7 Criteria 7.3


08.00-12.00 Kebun

Sikarakara dan Kebun

Plasma

Verification of document about Best Practices, Socials and employees Issues • • Conflict, land dispute • Environmental Doc (Social issues) • Social and employees • Continous improvement

PN Estate Prinsip 2 Criteria 2.2.3; 2.2.4; 2.2.5; 2.2.6; 2.3

Prinsip 4.2; 4.3

Prinsip 5

Criteria 5.5

Prinsip 6 Criteria 6.1-6.13 Prinsip 7 Criteria 7.1;


12.00-13.00 Break Lunch and Pray 13.00-17.00 Audit process continued (field

assessment)

Thursday, August 11th , 2016 08.00-12.00

PKS Sikarakara

Verification of document about En-vironment, Agrochemical, OHS Is-sues • Agrochemical • OHS • Environmental • Waste • Efficiency of energy • Reduce pollution and emission • Continous improvement • SCCS

AH Mill Manager Prinsip 4 Criteria 4.6; 4.7

Prinsip 5 Criteria 5.3; 5.4; 5.6


08.00-12.00 PKS

Sikarakara

Verification of document about Le-gal Land, Management Plan, Best Practices • Transparancy • Compliance laws and regulations • Management plan • Water management • Training • Continous improvement

BS Mill Manager

Prinsip 1 Criteria 1.1; 1.2; 1.3



Prinsip 4 Criteria 4.4.3; 4.4.4;4.8

Prinsip 5

Criteria 5.1



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Standard Chapter


08.00-12.00 PKS

Sikarakara

Verification of document about Best Practices, Socials and employees Issues • Best Practices • Environmental Doc (Social issues) • Social and employees • Continous improvement

PN Prinsip 4 Criteria 4.1

Prinsip 6 Criteria 6.1-6.13 Prinsip 7 Criteria 7.1


12.00 – 14.00 Break Lunch and Pray

14.00 – 15.00 Verification any unclear issue

15.00 – 16.00

Auditor Discussion & Closing Meeting Preparation

16.00 – 17.00 Closing meeting All Auditors

Friday, August 12th , 2016

05.00 – 15.00 Travelling from Site to Padang All Auditors

16.40 Travelling from Padang to Jakarta PN, BS, HS GA 167

18.15 Travelling from Padang to Medan AH JT230 (Lion Air)

20.30 – 23.30 Travelling from Jakarta to Kuala Lumpur

HS AK-387 (Air Asia)



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3.0 ASSESSMENT FINDINGS

3.1. Summary of Findings for RSPO P&C and Supply Ch ain

During the 2nd surveillance assessment 5 nonconformities were assigned against RSPO P & C year 2013 (generic) consist of 2 major findings and 3 minor findings, thers is no nonconformities against RSPO SCCS year 2014. 6 observations or opportunities for improvement were identified. Futher explaination of the non-conformities raised and corrective actions taken by the company are provided in Section 3.2. The observa-tions and opportunities for improvement are listed in Appendix 4.

The following is a summary of findings made for the criteria listed in the RSPO Principles & Criteria year 2013 (generic) and RSPO SCCS, 2014.

3.1.1. RSPO P&C

Principle 1: Commitment to transparency

Criteria assessed: CR1.1, CR1.2, CR1.3

Criteria not assessed: -

CR 1.1: The company has to disseminate the principles and criteria of the RSPO together with social management plan review meetings for the period 2016 on March 12, 2016 attended by 16 communitty representatives. Stakeholder list is updated annually by a Document Control, dated August 11, 2016.

The stakeholder list include:

A. Government Agencies Madina District: Regent, the Agriculture Agency, Department of Agriculture, La-bour Agency, BLHKP, National Land Agency, Head, police, Koramil, BRI.

B. Head Village: Sikara-Kara I, II, III, IV, Taluk Village, Village Taluk, Rukun Jaya Village, Village Bintuas, Community Leaders and Parents -tua Peoples.

C. Supplier / Contractor: Natako Group, Melati CV, Punguan Pomparan Raja Nairasaon, PT. Madina Agro Lestari, PT. Rizkina Mandiri Perdana, PT, Maduma, RM motors, UD. Diamond, Rukun Jaya Motor UD, UD. Convenience store.

D. NGO / LSM: Sawit Watch, WALHI Indonesia, WWF Indonesia, Natal DPC KNPI, Committee on the Pro-tection of Women, KUD Sumber Usaha.

E. Plantation Workers Union PT. RMM.

The organization has policy about kind of information that can be provided to public. Type of information that can be accessed by public are :

• Environmental aspect: EIA and HCV document

• OHS aspect : Report of OHS activities

• Social aspect : CSR activities

• Legal aspect: right use licence, Environmental license, Plantation Licence , and other operation permits

There is no change on company’s assignment, Human resource section responsible for providing information and recording the information request from stakeholder. Mechanism for information and communication both in external or internal regulated in standard procedure No. SOP Dir.MR-06. There was no information requestexcept donation request especially for infrastructure development supporting from stakeholder.

As improvement form previouse audit findings, PT RMM has recorded request and response into log book.



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CR 1.2 There is a list of publicly available documents according to RSPO P&C, signed on 18 June 2014 by Management Representative, Commerce Director and President Director. The publicly documents available are as follow :

• Legal : Land titles/user rights Plantation Operation Permit (Izin Usaha Perkebunan), Land Use Title (Hak Guna Usaha) or other documentation relating to application for Land Use Title in accordance with relevant procedures)

• Environmental : Environmental and Social Impact Assessment (AMDAL /UKL-UPL) and environmental management and monitoring reports (Laporan RKL-RPL)

• Social : Documentation of social activities and community programs.

• Health and Safety Plan

• Continuous improvement plan

Some of document related to obligation to sending regular report to several Institusions in Mandailaing Natal District. Example : Plantation Business report 1st semester No. 06/dir-RMM/VII/2016 dated August 03,2016 to Department of forestry and plantation Madina District

CR 1.3 There is a written policy committing to a code of ethical conduct and integrity in all operations and transac-tions. The Director of PT RMM issued a letter No. 01 /SE/DIR-RMM/V/2014 dated on May 7th, 2014 con-cerning to prohibition of corruption, bribery, fraud, assets abuse in all operational finance and activity. In previous, the Director of PT RMM also has issued a decree letter No. 01/SK/Dirut-RMM/I/2011 dated on January3rd, 2011 regarding on ethical business. This letter mentioned: Company, the directors, manage-ment and all employees emphasize avoid conflicts of interest either directly or indirectly. Not allowed to conduct insider trading / transaction, does not have a personal or family land, and choose a supplier who has a family relationship with decision makers, select of customers for commodity traded companies that have the family connections with decision makers. The policy above has socialized to workers by morning meeting; it was distributed in all emplacement and tag on wall in mill and estate office. It also stated stat-ed in Article 20 paragraph 1 of the agreement the parties had cooperation agreements should be subject to compliance with fair business practices (fair conduct of business)

Compliance status : Full Compliance

Principle 2: Compliance with applicable laws and regulations

Criteria assessed: CR2.1, CR2.2, CR2.3


CR 2.1

The company has list of legal requirement as documented on Document The company has listed all ap-plicable legal requirements in a list of indication, evaluation of compliance regulation and requirement last update in April 2016. List of regulation has covered national and international level with legal aspect, envi-ronmental, social, worker, plantation operational, forestry and conservation. But some important regula-tion/law are not included or updated on the list such as regulation on hazardous and toxic waste man-agement, environmental license, rivers management etc Company has procedure SOP.Dir.LEG-0215 (Identification and Evaluation Procedures, Regulatory Com-pliance and Other Requirements) regarding identification, and Evaluation of Law impact and valid regula-tion and to tracking any changes in registered law. Updating regulation every time has found new regula-tion. As per procedure, legal department head is responsible to identify all legal requirements pertaining to all departments, prepare a legal requirement register and ensure compliance to all legal requirements.



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Checks to ensure accuracy of updated laws is to be done at least once a year, while an evaluation on compliance to legal and other requirements shall be carried out at least twice a year. The SOP states that the identification and evaluation is to be carried every new regulation found will be compiled by Legal officer and supported by the Head of Operations / field and other departments within the company organization. There are a list of laws and regulations related to Health and Safety manage-ment system also compliance evaluation issued on July 1, 2016.

The new OHS and environment regulation was identified, such as Minister of environment regulation number 5 years 2014 about quality standard of wastewater and Government regulation number 101 year 2014 about management toxic and hazardous waste. But some important regulation/law are not included or updated on the list such as Minister of environment regulation number 14 year 2013 and Regulation of the Minister of Agriculture Number 18 year 2016. This condition raised as non-conformity (RSPO00607) .

Mechanism to ensure compliance by performing internal audit, which is conducted in April 21st-22nd, 2016 by which were generate three minor finding related to RSPO P&C. During the audit, there was sufficient evidence to show that the mill and estates have taken efforts to comply with all applicable legal requirements. For example, checks of legal documents showed that the mill and estates have all their legal documents required to conduct their operations. There are evidence that the company comply with applicable regulations and has effort to comply with change in the regulations for example :

1. Has conducted a routine inspection once in two years of those Boiler with permit certificate number 03 / KU / DTK-TR / W / 2010 on 14 May 2016. The results of the examination of the boiler is in good condition and functioning.

2. Report on the implementation of RKL-RPL plantation and palm oil mill PT RMM January s / d in June 2016. proof of submission of documents to institution on July 26, 2016.

3. Tests have been conducted analysis of waste water in pond 01 (inlet) on March 14, 2016 with certificate number 01 943 / CLACAJ. The test results are still below the quality standard.

4. The company has Operator Steam of K3 Class 1 (one) in accordance with Permenakertrans No. PER.09 / MEN / VII / 2010.

Some inconsistent to legal requirement found relate d to FFB payment to Smallholder (Koperasi Sumber Usaha). The Company paid Plasma FFB is not in accordance with the price issued by North Su-matera Plantation Office, this is not compliance with the Regulation of No. 14 year 2013 (FFB Purchase From Smallholder). Price from Disbun month of July 27 to August 2, 2016, Mature 10 years planted of IDR. 1,625 / kg, while the price of PT. RMM IDR. 1,370 / kg) the Company has not demonstrated compliance with the relevant legislation related FFB payment to Cooperative Plasma protected by law. It raised Non con-formity as recorded on NCR No. (RSPO00607).

The outcome document of identification and evaluation of company's compliance with laws and regulations are available for all levels of staff and management. The Company has conducted an internal audit and management review in 2015. The scope of internal audit and management review to discuss the compliance with applicable regulations. A system for tracking any changes in the law has been implemented and docu-mented but some SOP using a reference that does not apply, for example, SOP handling of toxic and haz-ardous wastes (SOP.Dir.PKS-37) and SOP delivery of hazardous wastes and toxic (SOP.Dir.PKS-37) still use the reference Kep BAPEDAL No. 5 / BAPEDAL / 09/1995 on the symbol and label B3 waste. This con-dition raised as non-conformity (RSPO00608).



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CR 2.2 No changes related to the right to cultivate at the time of surveillance. The organization has document show-ing ownership or lease of the land in accordance with relevant laws, that is land use right (Hak Guna Usaha /HGU) for PT Rimba Mujur Mahkota (PT RMM) and freehold title (Sertifikat Hak Milik) for village cooperative (KUD) of Sumber Usaha. PT RMM plantation has land use right (HGU (Hak Guna Usaha)) No. 25/HGU/BPN/2002 dated on June 14, 2002 from National Land Agency for total area of 4,956 ha (appropri-ate with map No. 04/10/2000 dated on April 27, 2000) at Sikarakara Village, Natal Sub District, Mandailing Natal District, North Sumatera Province valid for 35 years which consists of 1 (one) certificate land use right (HGU) i.e No. 1 (register number (NIB) : 02.10.01.21.00001) at Sikarakara Village, Natal Sub District, Man-dailing Natal District, North Sumatera Province on behalf PT Rimba Mujur Mahkota for total area of 4,956 ha (appropriate with measurement letter No. 2291/2002 scale 1:80,000 and map No. 04/10/2000) valid for 35 years (until September 12, 2037). The company has received the decree letter from Ministry of Forestry no. 180/Kpts-II/1998 dated on February 27, 1998 about release of the part of forest areas from Sikarakara forest group amount of 3,921.70 ha. The results of cadastral measurement without changing the boundaries of the forest areas which has been released. Whereas, smallholder areas (KUD Sumber Usaha) has freehold tittle amount of 300 units where based on list of smallholder member that first (no.1) is for the ownership of certifi-cate number 990 and last (no.300) for the ownership of certificate number 944. PT RMM has the SOP Monitoring and maintenance of the land boundary markers pillar No. SOP-Dir.NKT HGU-07 September 1, 2015 revision 0. PT RMM has been doing maintenance pillar HGU boundary markers contained in the form of maintenance realization pillar HGU boundary markers (FORM / HCV-05). For example: have done maintenance pillar boundary markers HGU numbers 93, 94, 95, 96, 97, 98, 99, 100, 101, 102 dated June 30, 2016 afdeling IV (four) made by Marwansya (Officer Monitoring), examined by Irfan Andika (KTU), approved by Martua FH. Siahaan (Pjs. Estate Manager). PT RMM has made monitoring reports pillar boundary markers HGU num-bers 93, 94, 95, 96, 97, 98, 99, 100, 101, 102 dated June 30, 2016 afdeling IV (four) made by Marwansya (Officer Monitoring), checked by Irfan Andika (KTU), approved by Martua FH. Siahaan (Pjs. Estate Manager). CR 2.3 Similar condition previous audit information, based on field observation and interview to the surround community, there were no customary right inside of the plantation, since previous company manage the land before taken over by PT Rimba Mujur Mahkota. SIA report also did not indicated there were customary right inside PT RMM plantation area

Compliance status : Non compliance

See NCR No. RSPO 00607


Principle 3: Commitment to long-term economic and financial viability

Criteria assessed: CR3.1


Findings: During this surveillance audit, The company (PT RMM) showed a long term business plan period of year 2015 to 2024 with information on this document consisting of company activities such as revenue plan from CPO & PK, volume and sales of CPO, projection of the CPO & PK price (per tons CPO & PK), costs in mill and estate (production cost and fixed cost), FFB process plan (FFB from nucleus, smallholder and out-grower), projection of extraction rate (OER & KER), re-planting plan (year 2022 to year 2032 for year planted 1996 to 2006), projection of FFB production (tons/ha), total revenue, total cost and loss/profit Also the com-pany developed a yearly plan as seen for year 2016 with scope of estate, mill and smallholder. In estate containing information on statement areas, executive summary budget, pro-jection/budget of FFB produc-tion, detail of cost plan each type of activities. examples of plans in June 2016: Plan FFB production: 60.650,93 Ton; The total cost of harvesting and transport: Rp. 12.100.509.673; Total Cost of Maintenance :



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Rp. 5.611.032.496,-. Business plan on 2016 has information including area statement, non-planted area for HCV, cost for CPO production and benefit prediction (income statement). The company implements planta-tion cycle every 25 years, the company still not make planning for a replanting activities which will only begin after the oldest planted area (year 1996) is 25 years old.

Compliance status: Full Compliance

Principle 4: Use of appropriate best practices by growers and millers

Criteria assessed: CR4.1, CR4.2, CR4.3, CR4.4, CR4. 5, CR4.6, CR4.7, CR4.8


Findings:

CR4.1 During this surveillance audit, No changes related Sop for Estate and Mill. The organization has established documented procedures (SOPs) for Mill and Plantation. The SOPs has listed in the document “Masterlist of Document and Controlled Copy Distribution”, issued at July 11, 2011, and signed by Document controller and Management Representative. The organization’s SOPs was cover all key processes, they are harvesting, transportation, manuring, inte-grated pest management (IPM), good agriculture practices (GAP), supply chain requirements, mill activities and also including SOPs for finance, legal and licence, human resources and general affair, OHS, and etc. All SOP of the organization has developed in appropriate language that is Indonesian Language (bahasa), and there is sufficient evidence that copy of relevant SOP available at point of use.The orgnization has es-tablish mechanisms for: - Record of training for all levels as defined in SOP of Training and Education of Employee (Doc No.

SOP.Dir-PUM-05, Rev.01, 03-01-2014) - Internal control as defined in SOP of Integration of Internal Audit for QMS-EMS-RSPO-ISPO (Doc

No.SOP.Dir.MR-04, Rev.1, 03-03-2014). In order to carry out internal audit control activities, the organiza-tion has assigned trained and competent personnel.

However, the non compliance was rise during this surveillanc e (RSPO00609)., i.e: SOP management of peatlands (SOP-Dir.TAN-27) about the water gate has not clearly describe the depth of the water table in the field that is maintained and does not correspond to implementation in the field. The organization has establish documented procedure concerning third-party FFB sourcing, namely SOP of FFB Receiving (Doc. No. SOP.Dir.PKS-11, Rev.02, issued April 01, 2014). The procedure was explain mechanism of FFB receiving from own plantation and third-party including mechanism of grading. Otherwise, the organization has no list of approved third-party FFB supplier, even so they SOP, there is sufficient evi-dence that the SOP has been implemented appropriately. The organization has recorded all FFB received from third parties including data of volume and origins. Sample were reviewed are: documents “Rekap Produksi Real vs Budget for year of 2016. The data show that until June 2016, was recorded 6.933.042 kg of FFB from third-party. The data has appropriate with other supporting data such as Daily Report documents. The mentioned data has been verified against available document, and the result show the data was match CR4.2 The organization has established documented procedure concerning GAP in managing soil fertility that is SOP No. SOP.Dir.TAN-26; Rev.00; 05-05-2014, title: SOP Management of Soil Fertility for Optimum Productivity and Sustainable. The contents of procedure as follow:

1. Hilly land: Making contour terrace at land with 10 – 30 % of slove; making individual terrace; planting legume cover crop (LCC); planting strength penanaman tanaman penguat teras; Making pembuatan ro-rak atau kantong air, pada tanah landai, pada teras kontur dan dalam parit jalan; Application of an-organic and organic fertilizer, and etc.

2. Flat land and Peat Soil: applied water management and fertility. Water management applied such as:



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water gate and weir. The Function of water gate are:

� When rainy season: to prevent water from outside enter into plantation area in order to to prevent flood.

� When dry season: to keep water in the plantation area in order to maintain water level not drop into under minimal limit.

Watergate is located at plantation boundary, especially located at meeting point between main cannal and river or outlet.

The function of Weir are to maintain level of water surface at 60 – 80 cm from land surface. The weir is located at boundary of gatherer cannal with main cannal and/or along side of gatherer cannal.

There is sufficient evidence that the SOP have been implemented and monitored. The records were re-viewed are:

� Record of making contour terrace in afdeling V

� Record of rorak development

� Records of fertilizer (the data month March 2016 for division V)

1. Urea: 74.500 kg / 531 ha

2. MOP : 94.450 kg / 531 ha

3. Borate: 3.188 kg / 531 ha

� Records of utilization of EFB (until July 2016) amount 31.066.322 kg.

� Records of land application (until July 2016) was applied on 74.133.190 L.

During the surveillance audit, Companies maintain records of fertilizer records incoming.

The fertilizer recommendation for year of 2016 was available for Palm Oil - Aek Sikarakara Estate – Man-dailing Natal, North Sumatera Province. The recommendation issued by PPKS Medan Desember 2015. Sample of Leaf Sampling unit was taken on September 2015. Number of leaf sampling unit are 185 sam-ple on around 5.214 ha of area. Otherwise, the basis of soil smpling unit use result of laboratory analysis of 2014.

Example records of fertilizer usage per tonne of FFB production month march 2016 for division V:

1. Urea: 74.500 kg / 531 ha / 1.148.024 kg = 64,89 kg/ton FFB

2. MOP : 94.450 kg / 531 ha / 1.148.024 kg = 82,27 kg/ton FFB

3. Borate: 3.188 kg / 531 ha / 1.148.024 kg = 2,78 kg/ton FFB

The organization has a documented SOP for tissue and soil sampling, namely SOP Palm Oil Fertilizer (No. SOP.Dir.Tan-10, Rev.00, 11 July 2015). The SOP said: “Leaf sample will take every year on September and soil sample will take every 5 (five) year by Research Team”. And furthermore, based on the result of leaf analysis, fertilizer recommendation issued by Research Team. This recommendation is used as working guidance of fertilizer.

In order to ensure that the SOPs has implemented appropriately and including availability of records, auditor was reviewed some related records, such as:

� Leaf sampling unit was taken on September 2015

� Document of Fertilizer Recommendation of 2016, for PT RMM Kebun Aek Sikarakara – Mandailing Na-tal – was issued by PPKS Medan December 2015.

� Fertilizer Recommendation of 2016

� Fertilizer Programme of 2016

The above records was demonstrate that the SOP has well implemented. The record of tissue and soil anal-ysis has maintained appropriately. For example the organization maintain the records of tissue analysis for year of 2015 and Soil Analysis for year of 2014.

The organization has establish a documented procedure for a nutrient recycling strategy namely SOP Utili-zation of Palm Oil Mill Solid Waste (Empty Fruit Bunch/ EFB), Doc. No. SOP .Dir.TAN-22, Rev.00, 03-03-2014. The strategy was include the following:

- Clear objectives and time-bound targets was stated in the procedure, that are:

1. Improve physically, chemical and biological properties of soil and increase nutrient of soi, to support



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the healthy palm oil growing in order to achieve optimum FFB production, and to increase immunity of palm oil to pest and disease.

2. Bringback the soil nutrient that was carried over to FFB processes at POM, by applied FB into land (1 ton EFB was contains nutrient of 3 kg urea, 0,6 kg CIRP, 12 kg MOP dan 2 kg Kiserit in approxi-mately)

3. EFB application very useful as mulsa, so can increase soil humidity and weeds growing will be op-pressed and also to prevent erosion of soil surface

CR4.3 During this surveillance audit, No changes related soil map. The company has soil map scale 1:10,000 com-pleted with geographical coordinate reference for each section (Afdeling I until VIII and Afdeling Plasma). The maps show that there are six soil map units within the estate area, which are red yellowish podsolic, brown yellowish podsolic, red yellow podsolic, alluvial grayish brown, peat soil association with alluvial watery and organosol (peat dept 0,5 – 2 meters). The company has a peatland distribution maps for nucleus and plasma estate with a scale of 1: 10,000. The Company has determined the peg mounting points representing subsidence depth levels of low, moderate to high for all blocks. Source of peat land distribution and its characteristic comes from field research (a semi detail soil survey).

In addition to soil map that describe the distribution of fragile soil (peat land), PT RMM also has topographic map describing slope classes in the entire concession area. The company has already strategy to maintain the estate with the critically condition i.e. estate with slopes above certain limitas. Based on the slope map, 77.05% of area (3,818.40 hectare) has a contour flat (slope 0-8°), 14.66% (726.32 hectares) has a contour ramps (slope 8-15°), 6.45% or 319.77 hectare has choppy (15-25°), 1.78% or 88.16 hectare of hilly slope (25-45°) and 0.07% (3.35 hectare) has mountain slope (>45°). The steeper area found in Afdeling IV, V, VI, VII, and some erosion control markers has been installed for monitoring the erosion, for example in block F2 Afdeling VI there are 5 erosion monitoring markers in-stalled. Erosion monitoring is done every month and recorded. As observation: this data ought to be compiled and used for develop a strategy for crop man-agement on sloping land, and as the observation, in the future strategy of planting on slopes should be made based on soil characteristics, slope and erosion of data.

The Company has procedures SOP.Dir.TAN-02 rev. 0, the date of issue July 11, 2011 which regulates the zero burning for new planting, replanting and conversion planting. In the procedure have noticed the princi-ples of soil and water conservation, for example, noted that in areas with a slope of 10-15 degrees made in-dividual terrace, for areas with a slope of 15-45 degrees made contour terraces to prevent erosion. Land with a slope> 45 ° is not planted. The company also planted Pueraria javanica, Colopogonium muconoides, Mucuna cochinchinensis, Centrosema pubescens, and Mucuna sp and Mucuna bracthtiata to reduce sur-face erosion when plants are juvenile.

The company also has a soil and water conservation procedures SOP-05-Dir.NKT issue dated 1 April 2014. The procedure regulate in ways that prevent or minimize erosion by planting legumes, drainage ditches, wa-ter holes, terrace, hoof, mulch, etc., as well as erosion prevention techniques.

The Company has a procedure to repair and maintenance of road, SOP.Dir.TAN-16 rev 00 dated July 11, 2011. According to the procedure, road maintenance done by maintaining the surface layer of the road and road ditches on both sides of the road. Road maintenance should be carried out mechanically 1 time for 3 months on main road and 1 times for 6 months on the collection road. The company also manually make a small trench to drain the water from the ditch beside the road to the plant area immediately following the implementation of road graders, selectively maintenance implemented after rain, and road hardening implemented gradually every year. Road maintenance has been programmed annually as stipulated in the work plan and budget plan.

Road maintenance recorded in Report of Plan / Actual Pavement and Road maintenance, for example until July 2016, road maintenance has been carried as along a 407,89 m.

The company has set up some stakes to measure the subsidence of peat and make bund off for water management in peatlands. Based on observations in the field, subsidence markers have been installed in Block C15. The company also has installed a water table stakes in a number of points. The method is used to measure reduction in peat is by observing the difference in subsidence of the initial data observed every month.



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Measurement of soil erosion carried out in block E6. Daily measurements of water level in the peat area conducted in June in block C16, measurement of rate of decline in peat soil and measurement of the water level in the canal / drainage C16.

A peat land management guideline in the PT RMM is available. Subsidence monitoring schedule has been set. There is evidence of subsidence monitoring of recording in July 2016 in AFD III, where there is a decline in the face of peat, which reached 5.5 to 6 cm. Water level management also conducted every day and rec-orded by field worker. The data is recorded with action in response to changes in the value of the water lev-el. The workers know that, if visually the water is too high then the block will be opened. There is set proce-dure to guide what is done on the monitoring results, including criteria for water level figures.

CR4.4 During this surveillance audit, The company has a procedure on the management and monitoring of water resources, SOP-DIR.NKT-06 rev 00 dated 01-04-2014, as a guide in the implementation of monitoring and utilization of water resources to serve the needs of life and health of employees and community while maintaining the balance of nature.

The Company has identified the sources of water in the plantation area douche / basin / reservoir / river. Complete data are presented in the following table : Water Sources in the Area of Plantation year 2016:

Afdeling

Block Coordinate Water Sources Used

I A18 N 00°40'12.8" E 099°07'42.0"

reservoir from Sirah river

Wash, bath and toilet

I F1 N 00°41'11.7" E 099°07'59.8"

Douche Wash, bath and toilet

II B22 N 00°39'30.8" E 099°05'34.0"

Reserv ir Wash, bath and toilet

III Mill N 00°39'58.3" E 099°05'26.8"

reservoir from Bintuas river

Wash, bath and toilet

III C10 N 00°41'01.8" E 099°05'18.8"


IV D1 N 00°41'17.1" E 099°08'39.7"

small reservoir Wash, bath and toilet

IV D1 N 00°41'15.3" E 099°08'35.0"

running water Wash, bath and toilet

V E3 N 00°43'12.7" E 099°07'45.3"

Reservoir Wash, bath and toilet

VI F11 N 00°42'47.4" E 099°07'35.2"


VI F1 N 00°41'11.7" E 099°07'59.8"


VII G3/4 N 00°45'51.3" E 099°05'11.1"


G4 N 00°45'23.8" E 099°05'59.3"


VIII H8 N 00°44'10.4" E 099°05'51.9"


G4 N 00°45'23.8" E 099°05'59.3"


Plasma P1 N 00°43'01.3" E 099°06'53.3"

Kunkun river Wash, bath and toilet

P2 N 00°43'11.3" E Douche Wash, bath and toilet



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099°06'55.3"

In year 2016, Water resources are managed and utilized for bathing and washing by employees. For the purposes of cooking, employees and their families use water refill subsidized by the company. Most of family also using the river water but after purification process and boiling. The company could show water resources management program, it is covering identification of water sources, water use efficiency plan, access to clean water sources for employees and the surrounding community, and plan avoidance of contamination of surface water and groundwater through monitoring activities. As observation: water management should be arranged systematic and containing the things that important to inform.

The company has been monitoring the quality of surface water utilized by employees conducted by Sucofindo, a testing laboratory. Last measurement was conducted on 2016. This value indicates the sur-face water of Bintuas river is clean and could be used for shower, washing and cooked drink water.

The company has a waste management facility which is the WWTP. The Company also has an environ-mental permit. The company has been monitoring the waste generated. Examples of waste water test re-sults in July 2016 as follows: Certificate No. 04 951 / CLACAJ, dated July 13, 2016, an No. 1 (Inlet); pH 3.74; N-Total 194.81; total suspended solids 38666 mg / l; oils and fats 9632 mg / l; COD with K2Cr2O7 51485.76 mg / l; BOD 5 days 20oC 28 660 mg / l.

The quality of waste water in accordance with the quality standards.

The Company has a data summary usage of water and chemicals in 2015. Water consumption (m3) for the FFB: total water / process if the number of FFB : 317 620 m3 / 235 915 Tons TBS : 1346 m3 / Ton TBS The use of water for bolier: 0.636 m3 / Ton FFB The use of water for process and domestic: 1.760 m3 / Ton FFB The company has the data recap water and chemical consumption until July, 2016. Water consumption (m3) for the FFB: 1.07 m3 / Ton FFB The use of water for bolier: 0.58 m3 / Ton FFB The use of water for process and domestic: 1.43 m3 / Ton FFB CR4.5 IPM plan defined in SOP of Control of Pest and Disease of Palm Oil (SOP.Dir.TAN-21, Rev.00, 1 Juli 2013). Company identify pest and diseases by regular census every 3 months, for common pest and disease for example rhino, oryctes, rat, termite, etc based on (Pengendalian Hama dan Penyakit Tanaman Kelapa Sawit), company perform regular census and immediate action to terminate the pests. Based on that proce-dure company should perform monitoring/census every month, to see any pest or disease. The IPM plan was available in the document of “Program Pengendalian HPT dan Rencana Kerja Deteksi Dini dan Inang Predator”. During year 2016 there are some records related to action taken of pest manage-ment such as census, and immediate action. The IPM include census and monitoring pest and disease, conducting biological control by planting of beneficial plant such as Cassia cobanensis, Turnera surbulata and also with owl (Tyto alba). The company not uses pesticide to control pest and diseases. Company has list of census person at each division. Record of occurrence and monitoring available in doc-ument LAPORAN BULANAN PENYAKIT TANAMAN which is made three monthly based made by IPM fore-man. The company has a team of census for each estate. The company has conducted training of pests and dis-eases on February 2, 2016. The training material is pest and diseases principal, introduction of pest and dis-eases, detection methods and pest and diseases census, beneficial plant and pest and diseases related form. The training documentation such as photos and participant attendance list CR 4.6 The policy regarding safe use of chemicals has not changed, that is “Kebijakan Keselamatan dan Kesehatan Kerja/ Health and Safety Policy” Doc No. 08/Dir.RMM/2014, Rev.01, 1 Mei 2015. The policy was signed by Director of PT RMM (Mr. Saiman Wagimin). Especially for safety chemical usage policy is found at point 5, “Menghindari dan melarang pemakaian bahan kimia berbahaya pestisida yang masuk kategori Badan Kesehatan Dunia (WHO) kelas 1A atau 1B, atau tercantum dalam Konvensi Stockholm atau Rotterdam dan



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Paraquat, tidak digunakan”/ To avoid and prohibited usage of hazardous pesticides that categorized as ILO Class 1A & 1B, or listed at Stockholm or Rotterdam and also Paraquat is not used. Company also perform rotation in usage of pesticide and herbicide, justification from office of Labor Man-dailing Natal District. Company also report the usage of pesticide to government of Mandailing Natal District. The company has SOPs for use of selective products that are specific to target pests, weeds, or diseases and which have minimal effect on non-target species by pesticide rotation system. List of all pesticide and justification of use are available. All pesticides using by the organization has already approved and regis-tered by the Indonesia government based on green book of Registered Chemical year 2016, issued by the Pesticides Comission, Directorate General of Crop and Estate, Ministry of Agriculture as defined in Minister of Labor Regulation Number 187/1999 Controlling of Hazardous Material at Working Station. The justifica-tion of pesticides use was considered less harmful alternatives and IPM. The type of pesticides listed is categorized into 4 (four) types, i.e.: herbicides, fungicides, insecticids, and rodenticides.

Records of pesticides use (including active ingredients used and their LD50, area treated, amount of active ingredients applied per ha and number of applications) are available. The active ingredients consist of: metal metsulfuron, Isopropilamina glifosat, ammonium glufosinat, trichlopir, 2,4-D dimethil amina, propineb, mankozeb, difenoconazol, metal tiofanat, abamectin, deltametrin, lambda-cyhalothrin, friponil, chlor-antanniliprole, asefat, karbaril, cypermethrin, carbosulfan, brodifacoum 0,005%, warfarin, and coumatetralyl. The organization does not use pesticides with active ingredient of brodifacoum anymore.

The organization has a pesticides application program as documented in Work Program Circle and Path Spray, Selective Spraying, Selective Weeding, and Circle Weeding, The records of pesticides use are available, including detail the active ingredient used and their LD50, area treated, amount of active ingredi-ents applied per ha and number of application. E.g.: Summary records of pesticides use for Estate I, 2015 as follows:

No Name (active ingrident) Area applied (Ha)

Qty A.I A.I per ha

1 Glisat (isopropilaminal) 41,423.07 17,176.26 liter 9,481.30 0.23

2 Inteam (lGlufosinate ammonium)

- 133.50 liter 20.03 -

3 Tiara (metal Metsulfu-ron)

23,372.22 528.71 liter 107.90 0.005

4 Matador (lambda cyhalathrin

- 21 liter 1.43 -

5 Decis (deltametrin) - 45 liter 2.21 -

6 Dhitane (mankozeb) - 19.94 liter 14.40 -

7 Score (difenokonazol) - 19 liter 4.44 -

8 Antracol (propineb) - 21.00 kg 14.70 -

9 Spreader (alkylphenol ethaxylates)

31,747.11 1,588.553 kg 137.03 0.09

10 Basta (Amonium Glufasinat)

- 26.50 liter 14.63 -

11 Starlon - 51.50 kg 28.43 -

The most pesticides used for circle spraying, path spraying, selective spraying, road side spraying and con-trol of thatch. The organization does not use pesticides with active ingredient of brodifacoum anymore.

The company has a training programme for year 2016 as shown in the Training Programme document (SOP.Dir.PUM-06). The progamme has included for worker who apply or handle pesticides. The training was performed by competent personnel internally (JF Sihootang/P2K3-AK3 Umum, Erwinsyahputra/P2K3-



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Hiperkes dan Eri A. Butar-butar/P2K3-AK3 Kimia) at March 08, 2016. Training records such as attendance list and training materials are available. Training include basic safety, safety for pesticide, and work illnesses. The training was attended by personnel who handle pesticides such as chemist, fertilizer, and etc. The training was conducted in bahasa Indonesia by internal personnel of the company.

The responsible pesrsonnels who handle, used and applied of pesticides has only by persons who have completed the necessary training. The implementation was observed, as interviews with chemist who handle chemist, they can demonstrate understanding the hazards and risks related to chemicals used. All chemist personnels are equipped with PPE appropriately. The risk assessment has taken into account in the PPE recommendation and selection. The PPE is provided by the company, however it was informed by the manure, the safety shoes is not appropriate as standardized by minister of man power regulation no. 08/2010 found that the PPE still not comply. The broken PPE were not replaced with the good one. This is raised as non conformity as company has not fulfilled to relevant government regulation as recorded on NCR No. RSPO00607 above.

The company has provided a storage room for pesticides and its their facilities and utilities. The storage room are well ventilated, good access for materials handling, sufficient lighting, and etc. There is sufficient evidence that empty pesticide containers are properly stored and disposed off.

There is evidence observed in the field that pesticide containers are not indiscriminately disposed (in dump site) or used for other purposes, .e.g. as waste containers or flower pots.

The company has provided information materials on pesticide handling to all employees by placed MSDS at information boards, and also present to all related workers directly. The company has establish training programme in order to maintain worker awareness and competency, including on chemical handling.

The company existing documented procedure for proper disposal of waste material still valid, i.e. SOP Pe-nanganan Limbah Bahan Beracun dan Berbahaya/Hazardous Waste Handling (SOP.Dir.PKS-37; Rev.01, 12-12-2011) and SOP Penyerahan Limbah Bahan Berbahaya dan Beracun/Hazardous Waste Disposal (SOP.Dir.PKS-38; Rev.00, 11-07-2011. The reference used in this SOP has been updated, the reference not included the latest regulation, that is Regulation of goverment of Indonesia No. 101 year 2014, concerning Hazardous Waste Management (PP 101 Tahun 2014, tentang Pengelolaan Limbah Bahan Ber-bahaya dan Beracun) as this is company’s improvement from previous audit finding.

Training programme year 2016 has been established training for proper waste disposal,there is evidence of implementation of proper ways for waste disposal by the company, that are:

- Domestic waste was disposed according to known best pactice by make landfill.

- Hazardous waste was given to third party who have licence to manage hazardous waste.

The company has an updated list of employee/worker, namely Laporan Perkembangan Personalia (LPP) Data Staft dan Karyawan/ty (Report of human resources) including workers for spayer..

There are records of annual medical surveillance of pesticide operators. Some records were reviewed, i.e resume of periodic medical surveillance, for pesticide operators held in February 25th, 2016, some of them has exceed parameters, and company already forward to advanced medical check, and company has remove them to non-chemical job. But follow up action takes too long, followed by examination in June 2016.

The company’s policy statement preventing pregnant and breast-feeding women from handling pesticides as stated in the Form Letter No. 04/SE-SM/RMM/V/2015 still valid; according to Worker Protecion and Prohibition (Perlindungan Tenaga Kerja dan Larangan). In the article no. 10 of the letter said: “Pregnant and breast-feeding women is not allowed to handle chemist (pesticides spraying) or fertilizer job or handle hazardous materials. Based on the interview results with chemist worker, there is sufficient evidence that the policy has been communicate appropriately.

From the data, most of chemist employee/worker are female, and the company has a mechanism to identify and ensure pregnant and breast-feeding women, that are by self declaration, consultation & checking by paramedical and internal communication.



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CR4.7 The company policy for health and safety still valid i.e. Health and Safety Policy (Kebijakan Keselamatan dan Kesehatan Kerja) Doc. No. 08/Dir-RMM/2014, issued at May 15, 2015; Rev.01. The policy was written in appropriate language, that is Bahasa Indonesia, and approved by Direktur Utama (Manaaging Director). The policy was cover mitigation of risks to workers health and safety at all workplace activities, as stated at number 2: “perform hazard identification and risk assessment and risk control at all company processes and activities (melakukan identifikasi Bahaya dan Resiko serta pengendalian resiko di masing-masing proses / aktivitas perusahaan). Health and safety plan are available in place, as documented at OSH team program year 2016 document. The plan was not include targets for improving occupational health and safety furthermore the plan do not re-flect guidance provided in the ILO Convention 184 (see Annex 1), this is company’s potential for improve-ment to include ILO into the company’s OSH plan. Company has identify All operations where health and safety is an issue, and procedures and actions shall be documented and implemented to address the identified issues. All precautions attached to products shall be properly observed and applied to the workers, including Nursery, manuring, harvesting, spraying, fertilizer application, transportation, processing, waste handling, maintenance, services as documented in DAFTAR ASPEK LINGKUNGAN, KESELAMATAN KERJA as updated in April 01st, 2016. The company has been conducted risk assessments been for almost all operations where health and safety is an issue. The as-sessment has fully refer to SOP was defined (No SOP.Dir.SMK3-12; Rev.00; June 17, 2014), such as im-pact or risk assessment has take account of existing control effectiveness to define whether the risk is ac-ceptable or not. For example, risk assessment and control of Sterilizer process, potential hazard is explo-sion, the occurrence stated C (may be happen) and Severity stated 5 (fatality, loss of materials very big); and the result Risk Level is E (extreme risk, immediately handling and action are needed). Otherwise, there is existing risk control applied by the company such as certification of sterilizer according to regulations, cal-ibration of monitoring and measurement equipments, and provide emergency response equipments The company has a documentd procedure to address if any accident occured that is Procedure of Investigation of Accident and incident/Prosedur Investigasi Kecelakaan Kerja dan Insiden (Doc. No. SOP.Dir.SMK3-02; Rev.00; 02-09-2013). The company has provided appropriate PPE to all worker at the place of work to cover all potentially hazard-ous operations, such as pesticide application, machine operations, and land preparation, harvesting. As de-termined on the company’s procedure. It is obligate for all contractors and company’s worker to conduct safety induction however company has not evidence to conduct safety induction, this is recorded on NCR RSPO00610. There is sufficient evidence that the PPE provided to workers and replaced when damaged. The list of PPE distribution and list of PPE’s user has available. Based on observe to harvesting and chemist spraying, there is sufficient evidence that worker observed wearing appropriate PPE. The company has identified the responsible person/persons to implement OSH according to relevant regulations. The company has an organization, call P2K3. The organization has already approved by authorized goverment (Head of Citizenship Administration, Social, Labour, and Transmigration of Mandailing Natal District (Kepala Dinas Kependudukan Catatan Sipil, Sosial, Tenaga Kerja dan Transmigrasi Kabu-paten Mandailing Natal). No. Kep.470/2045/DKCST-MN/2016, concerning of P2K3 of PT Rimba Mujur Mahkota, and assigned Mr. Julius Sihotang as responsible person to handling safety committee since April 11th, 2016 as well, including to held accident investigation for any accident.dated There is sufficient evidence that the organization has conducted on a regular basis (every 3 months) that attended by responsible persons and workers required by law. Some records were reviewed that is:

1. Performance Report of P2K3 for period January – March 2016,

2. Performance Report of P2K3 for period April – June 2016 The data including attendance list, meeting minutes, and issues discussed.

The first aid equipments are available at worksites during conduct of field manual work. Most group of worker equipped by first aids kit. There is sufficient evidence that the first aid kits contain has complied in accordance to requiements except some activities that still not consistent as explained on the NCR No RSPO00607. Update and detil of first aid kits are available. Records of all accidents are kept.

There is evidence that all workers are provided with medical care and covered by accident insurance by the company, including for contract workers. The records were reviewed i.e:



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- BPJS Participant data of Mill Employee and their responsible for January and March 2016 Report of BPJS Kesehatan Participant for periods February and April 2016

- Report of Jamsostek Participant for May and June 2016 List of Jamsostek Member, has recorded employee data for July 2016.

There is evidence that the insurance policies are valid, the records and documents were reviewed and conformed. For example:

- As explained on the 1st surveillance audit report, document of work agreement (PKB) between the company with Employee Union (SPKP – PT RMM) year of 2014, established in Medan June 2014. This document still valid until 2016 and has approved by authority goverment through Decision Letter Goverment Services Head of Labour & Transmigration (Kadisnakertrans) North Sumatera Province, No. 231-6/DTK-TR/2014, concerning of Registration of Working Agreement (Perjanjian Kerja Bersama) between the company (PT RMM) dated May 20, 2014. Related to the insurance policy, has stated on Article 29 (Social Incurance for Worker), said that: “the company taken part in worker social insurance programme (Jamsostek), according to law No. 3 Tahun 1992 jo PP Nomor 83 Tahun 2000, including:

1. Insurance of Accident (Jaminan Kecelakaan Kerja / JKK)

2. Insurance of Mortality (Jaminan Kematian / JK)

3. Insurance of Old (Jaminan Hari Tua / JHT)

- Records of insurance (Jamsostek) payment for April 2016, found there is deductio for insurance (JHT + JKK + JKM) = totally Rp136.525.214

The company has occupational injuries recorded by using Lost Time Accident (LTA) metrics, the data of accidents and injuries as below:

There is evidence that the organization has recorded occupational injuries by using lost time accident (LTA), as documented on”Papan Kecelakaan Kerja PT Rimba Mujur Mahkota”. For example, occupational injury at year 2015, as follow:

1. Fatality : 0 2. Serious injury (loss time >= 3 days): 4 (July: 2, Agustus: 1 and September:1) 3. Light injury (lost time =< 2 days): 0 4. Medical care / First aid (without lost time): 0 5. Total of employee: 110 per mont as average 6. Total of Reportable injury (1+2+3+4) : 4 7. Total of injury case (lost time >= 3 days): 4 8. Total of Lost Time (lost of working day): 19 (July: 10; August: 6; and September: 3) 9. Total of workhour = Total of employee’s workhour x 7 x Total of employee: 291.333 hours 10. Frequency rate / FR = (Item 6 x 1.000.000) / Item 9 = 14 11. Lost Time Incident Rate / LTIR = (Item 7 x 1.000.000) / Item 9 = 14 12. Severity Rate / SR = (Item ** x 1.000.000) / Item 9 = 65

CR4.8 During this surveillance audit, no change about SOP training. Standard operation procedure for training has been established by PT Rimba Mujur Mahkota as seen on SOP.Dir.PUM-05 issued on April 1, 2012. In addi-tion there are procedures No. Dir.PUM-05 dated January 3rd, 2014 on Employee Education and Training, and Assessment Matrix Competition.. This procedure set needs training, internal and external training. Record company training has been done. Formal training and certified that has been conducted among oth-ers: training HCV, RSPO and ISPO Auditor training, coaching training for Supervising on Occupational Health and Safety (OHS) in Chemistry. Competition An Improved training of Technical and Managerial Plant for Foreman, Production Management and Development Program, GHG calculation training, and first aid training. The organization has been training program in estate and mill e.g. for year 2016 where informed the title of training, type of training or trainer (in-house training (internal) or public training (eksternal)), quantity of par-ticipants or trainee and has been authorized head of HRD department. Training program has already set up, the kind of trainings and workers whom must be trained are based on data or analysis needs. The Company has made a list of employees and staff who need training, so priority scale for this type of training and workers who need training are available. There are the results of the eval-uation of the training needs. There has been a Training Need Assessment created. There is already a histo-ry of training card, which records the type of training that has been available to all workers, including the im-



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plementation time. Also available employee competency matrix for assessing the ability of employees on various aspects. This data is used for training needs assessment. Employees who work in the plasma gets the same rights as working in the nucleus. Evidence of that can be shown is a list of attendees of training for workers in plasma and nucleus estate on training for OHS intro-duction and basics, OHS for Pesticides and Occupational Diseases on March 14th, 2016. The first aid train-ing for occupational accidents dated March 11, 2016. The Company has a list of employees that will be projected for training that were included in the identifica-tion of training needs. The following programs and training needs analysis for core employees and plasma for 2016 :

Training Program Participant Schedule Integrated Pest Man-agement

EM, Head Assistant, Assistant, Fore-man, Plasma Smallholder

January

Plantation Procedure EM, Head Assistant, Assistant, Fore-man

April

Peat Management Procedure

EM, Head Assistant, Assistant, Fore-man

July

ISPO

MR, DC, EM, Head Assistant, Assis-tant, Foreman, Administration Head , GA, Medical, Warehouse Clerk, Workers, Clerk

May

Understanding Haz-ardous Material Waste

Warehouse Head March

HCV

DC, EM, EM, Head Assistant, Assis-tant, Administration Head.

May

Some of employee training records for the period 2016

- Best Practices Training and Counseling for workers, smallholder and community citizens on May 16, 2016.

- Understanding and monitoring of HCV at Estate meeting room dated May 23, 2016 , attended by 20 participants locations.

- Peat Management Procedure at Afd III dated of July 22, 2016, attended by 28 participants. - Best Management Practices Training and counseling to workers, suppliers and farmers in mill-

estate office on May 13-14, 2016. Also attended by community representative from Sikara-kara vil-lage and Rukun Jaya village, 22 participants.

- ISPO compliance dated May 13, 2016 in the Mill meeting room, attended by 34 participants. - Training SOP Plant April 30 - May 3, 2016. - Socialization related separation of organic and anorganic waste, hazardous material waste and

burning prohibition on April 23, 2016. - Socialization related land and forests burn prohibition dated March 2, 2016 at Rukun Jaya I village,

Sikara-kara III village attended by 27 participants, Simpang Bambu Hamlet dated March 1, 2016, 11 participants.

Compliance status : Non Compliance





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Principle 5: Environmental responsibility and conservation of natural resources and biodiversity

Criteria assessed: CR5.1, CR5.2, CR5.3, CR5.4, CR5. 5, CR5.6


Findings:

CR5.1 During this surveillance audit, no change about EIA document. Environmental impacts are identified and recorded in document of “KA-ANDAL” for estate and mill on behalf PT Rimba Mujur Mahkota on July 2008. This document legal and has approved on July 2008 by Head of Environmental Impact Management Agency District Mandailing Natal on the letter number 660.2/007/BPDL-MN/2007 dated October 15th, 2007, and also has approved by Regent of Mandailing Natal District letter number : 660/1949/BPDL-MN/2008 dated Agustus 20th, 2008 for PT Rimba Mujur Mahkota. Prior to approved by Environmental Agency and the Regent of Mandailing Natal, a public consultation has been made on August 30th, 2007 to collect and opinion from the stakeholder, and also a technical review panel has been conducted on September 25th, 2007. During audit, there is no revision for environmental docu-ment. Type of impact are managed and monitored consisting of physical component of chemical, the increase in the rate of erosion, degradation water quality, waste water, solid waste, potential fire, biological com-ponent, disruption of flora, fauna and aquatic biota, social component, land acquisition, employment opportunity, and environmental health. Record of implementation of Environment and Social Assessment as periodically report of environment performance by PT Rimba Mujur Mahkota for period of January – July 2016, the report submitted to Regent of Mandailing Natal District via Head of Environmental Agency Northern Sumatera Province, on July 26th, 2016. CR5.2 During this surveillance audit, no change about HCV document, PT Rimba Mujur Mahkota has con-ducted an assessment and identification of protected, rare and endangered species and HCV habitats within their area. An identification of flora and fauna has been carried out by a consultant i.e Yayasan Kelapa Sawit Berkelanjutan Indonesia (YASBI) in year 2013 with assessor team are Purwo Susanto (Leader team), Iksal Yanuarsyah, Koko Erliyanto, Iing Nasihin, R.Sukasmianto, Hery Prasetiyo and Su-darman. Two of them as RSPO approved HCV assessor i.e Purwo Susanto and Iing Nasihin. The re-sults of these assessments are documented in PT RMM’s HCV identification and assessment report where has carried out consultation public dated on April 13, 2013 at government elementary school Fil-lial 374, Sikarakara III village and Natal Sub-District. Based on the HCV assessment report it was stated that 5 types of HCVs were identified in PT RMM, i.e. HCV 1 (areas with important levels of biodiversity), HCV 2 (natural landscapes & dynamics), HCV 3 (rare or endangered ecosystems), HCV 4 (environmental services), HCV 5 (natural areas critical for meeting the basic need) and HCV 6 (areas critical for maintaining the cultural identity of local communi-ties). HCV object are secondary forest hill in afdeling 5 & 7 (HCV1.1, 1.2, 1.3, 2.3, 4.1, 4.2, ), riparian Kunkun River (HCV1.3, 1.4, 2.3, 5, ), Tengkorak hill in smallholder area (HCV4.1, 4.2), Conservation hill in afdeling 5 (HCV4.1, 4.2), riparian Bintuas river (HCV4.1, 4.3), riparian Buburan river (HCV4.1), ripari-an Payung river (HCV4.1, 5), riparian Sao river (HCV4.1), riparian Sirah river (HCV4.1, 5), riparian Talimun Gadang river (HCV4.1, 5), Sikarakara small waterfall (HCV4.1, 5) and small waterfall in Barak (HCV4.1, 5), Bukit Solok cemetery (HCV6) and public cemetery (HCV6) so that total HCV area in PT RMM is 432.91 Ha. Based on the result of identification HCV assessment that there are protected flora (include protection status/category) i.e Shorea teysmanniana Dyer (based on government regulation no.7 year 1999 and IUCN / endangered), Koompassia malaccensis Maing (based on government regu-lation no.7 year 1999 and IUCN / endangered), Alstonia scholaris R.Br (based on IUCN / least con-



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cern). Whereas protected fauna was available too (include protecttion status/category) i.e Hylobates agillis (based on IUCN / endangered, CITES appendix I and government regulation no. 7 year 1999), Macaca fascicularis (based on IUCN / least concern and CITES appendix II), Macaca nemestrina (based on IUCN / vulnarable and CITES appendix II), Rusa unicolor (based on IUCN / vulnarable and govermment regulation no. 7 year 1999), Trachypithecus auratus (based on IUCN / vulnarable and CITES appendix II), Panthera tigris sumatrae (based on IUCN / critically engdengered, CITES appendix I and govermment regulation no.7 year 1999), Paradoxurus hermaproditus (based on CITES appendix III), Alcedo meninting (IUCN / least concern and government regulation no.7 year 1999), Loriculus gal-gulus (IUCN / least concern and goverment regulation no.7 year 1999), Anthracoceros albirostris (CITES appendix II and govermment regulation no.7 year 1999), Chloropsis cyanopogon (IUCN / near threatned), Megalaima rafflesii (IUCN / near threatned), Antharacoceros albirostris (IUCN / least con-cern, CITES appendix II and govermment regulation no.7 year 1999), Rhinoplax vigil (IUCN / near threatned, CITES appendix I and govermment regulation no.7 year 1999), Ichthyophaga ichtyaetus (IUCN / least concern and govermment regulation no.7 year 1999), Egretta garzeta (IUCN / least con-cern and government regulation no.7 year 1999), Meiglyptes tuki (IUCN / near threatned), Pycnonotus cyaniventris (IUCN / near threatned), Argusianus argus (IUCN / near threatned, CITES appendix II and govermment regulation no.7 year 1999), Rhipidura javanica (IUCN / least concern and govermment regulation no.7 year 1999), Anthreptes malaccensis (IUCN / least concern and government regulation no.7 year 1999), Crododylus porosus (IUCN / least concern, CITES appendix II and government regula-tion no.7 year 1999). PT RMM has HCV management plan (Monitoring and Management Plan) which decribes the activities planned for each identified HCV such as training and communication to employee, installation of boundary stone and sign board for HCV areas, security patrol for HCV areas, monitoring of protected fauna regularly, monitoring of the ecosystem of river and conservation areas. It has been implemented for all plans. HCV condition of the area is still good, especially in riparian areas that are still covered by natural vegetation, and fertilizer and chemist treatment does not applied. To prevent inappropriate hunting and collecting activities within their area (block of conservation VIII), the company established a mechanism for illegal fishing and hunting where company also made sign boards and has periodic patrolling programmes by security. The organization has produced posters and signs warning or signboard of the presence of protected species in conservation areas of block E22 – afdeling 5 and has carried out socialization to employee, including posters distributed to the community Besides that, there are another poster as like prohibit-ed washing and shower in rivers, prohibited of using poison or electricity in fishing, prohibited of spray-ing/chemist and fertilizing use of anorganic fertilizer in riparian or water source, prohibited of hunting of protected fauna, prohibited of harvesting trees in conservation areas and signboard of HCV areas. PT RMM has monitoring plan of HCV areas year 2016. Monitoring on the species is done, monitoring on HCV area is carried out. Monitoring species is conducted every day in every section with report are comprehensive. PT RMM has been monitoring the area of high conservation value based on a monitoring program area of high conservation value. but PT RMM not conduct a review of its effectiveness on a regular basis and the results of the review as an ingredient for preparing a monitoring program next year. This condition raised as non-conformity (RSPO00611). CR5.3 Waste is reduced, recycled, re-used and disposed in an environmentally and socially responsible man-ner. There is a registry/list of waste products produced, in the document of “Daftar Sumber Limbah, Polusi serta Gas Karbon (GHG)”; This document contain Waste Name and Type, Source of Waste, and Manage System. There is an inventory of chemicals and their containers that are used and kept on site. The data can found at document of Haardous Waste Balance. Chemical and its container that temporary keep as folow: used tin can of thinner, used bag/sack of chemical, used tin can of matador used , jerrycan of Prima Up, Used bottle of garlon, used bucket of grease, and etc. All chemicals and their containers shall be disposed to collector PT Amindy Barokah as licensed col-lector. The newest submission of the waste on June 13th, 2016 as record in hazardous Waste Mani-fest number 0009344.Company has permit to keep Hazardous waste for 180 days as permit number



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658.31/717/K/2015 from Head of Environment Office, dated December 23th, 2015. This permit valid for 3 years. Chemical container stored at Estate warehouse, while their empty container handled as hazardous waste and kept at temporary store of hazardous waste and disposed to authorized collector

All chemicals and their containers shall be disposed to collector PT Amindy Barokah as licensed collec-tor . The newest submission of the waste on June 13th, 2016 as record in hazardous Waste Manifest number 0009344. Company has permit to keep Hazardous waste for 180 days as permit number 658.31/717/K/2015 from Head of Environment Office, dated December 23th, 2015. This permit valid for 3 years. Chemical container stored at Estate warehouse, while their empty container handled as hazardous waste and kept at temporary store of hazardous waste and disposed to authorized collector. Chemical container stored at Estate warehouse, while their empty container handled as hazardous waste and kept at temporary store of hazardous waste and disposed to authorized collector. There is no evidence that waste has been disposed by open fire.

CR5.4 Sikarakara Mill used renewable energy (fiber and shell) to replace Fossil fuel in boiler operation, dur-ing year 2015 company used amount 1,919,000kg of shell when fiber amount 28,309,747Kg equal to. Company plan to increase efficiency of this renewable energy in future. Up to July 2016, company al-ready used 1,554,000kg while fiber 17,244,323kg. The energy available from the shell and fiber is enough to meet the energy required by the plant and does not require generators except for the be-ginning and end of the process, each for 1 hour. Company does not take into account energy effi-ciency during construction or operation upgrading. The company uses fossil fuel diesel oil for limited activities such as start up of boiler and transportation purposes, and operation of generator as an electricity source.For the energy use and use of the renewable energy, the company has recorded their energey use from the fossil fuel and the renewable energy, evidenced by record use of steam, fossil fuel and water. CR5.5 The company have statement on zero burning. Zero burning policy stated in procedure of land clearing without fire Document no. SOP.Dir.TAN-02 dated July 11, 2011. Within the SOP states that land clear-ing is done mechanically without burning, within budget cost activities include the manufacture of block boundaries, building roads and bridges, uprooted, install stacking lanes, land cleaning plants use me-chanical equipment etc. that show the activities carried out without burning. Zero burning policy implemented by provide warning sign in whole company area including in plantation to warn people not to use fire in land area and also avoid to burn domestic waste as well. The last land clearing was conducted in 2005 covering an area of 621 ha for crops in 2006 in section IV (120 ha), V (129 ha), VII (226 ha), VIII (146 ha), performed without fire, with documentary evidence is some photographs. Company has procedure for handling emergency situation as Procedure of Emergency Response in Estate and Mill (ID Document : SOP.Dir.TGD-01) Edition: 2 dated September 2013, this procedure contain fire prevention and treatment efforts by provide fire extinguisher in easily accessible location, instruction to use PPE, to understand evacuation, rescue route and emergency situation reporting procedure. Record of emergency drill available which is held in 2016 covering estate and mill. This drill to try competence in using Fire extinguisher, hydrant, water jet, hose and others equipments. CR5.6 During this surveillance audit, Assessment of all polluting activities has been conducted including gaseous emissions, particulate/soot emissions and effluent. Air quality tested regularly in every six month, and the latest result of all the parameter are still under the limit as stipulated in Government Regulation No 41 Year 1999. Level of NO2 : 61 µg/Nm3, SO2: 139 µg/Nm3, CO : 5µg/Nm3, , NH3 : 0.68 µg/Nm3H2S : 0.0043



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and particulate as 62 µg/Nm3. The company has list of all identified polluting activities year 2016.

Sources of GHG emissions were identified and documented in the Procedure of GHG measurement and mitigation effort (SOP-Dir.GRK SOP-01 dated 2 September 2013 rev 00) and in the document "Identification of Environmental Aspects and Impacts”. Emission sources identified are :

a. Methane gas emission from waste water pond (effluent pond)

b. Usage of fossil fuel for power generator and vehicle

c. Emission from power generator, Boiler, and vehicle

d. Usage of chemical fertilizer and pesticide

e. Electricity usage

f. Emission from peat-land

The company has a document “Report of GHG Emission based on RSPO GHG Calculator “ using the data in 2015. Report GHG calculation uses standardized calculations by the RSPO standard, where the standard is already taking into account the sources of emissions from palm oil mills, land acquisition, the process of fertilization, the use of fossil fuels, greenhouse gas absorption by plant oil palm, conservation land (HCV area) and emissions from peatlands. However GHG uptake of HCV areas can not be calculated because there is no technical data regarding GHG absorption of any type of existing vegetation in HCV area.

The treatment methodology for POME is sedimentation cycle method using 10 ponds consisting of a Cooling pond 1, acidification pond 1 and 2, primary anaerobic pond 1 and 2, secondary anaerobic pond 1 and 2, facultative pond 1 and 2 and an aerobic pond before drained for river as permit from regent of Mandailing Natal No. 658.31/284/K/2014 dated April 7, 2014.

The company has permit to implementation assessment of waste water utilization for land application to palm oil plantation based on decree of regent Bupati Mandailing Natal No. 658.31/285/K/2014 dated April 7, 2014. Activities of drained carried out since the beginning of April 2004. Observation has been made for con-tinuing improvement on GHG reduction mitigation. Mitigation plan should be made based on clear signifi-cance analysis on every emission source including peat land as stated in procedure No SOP Dir-GRK-01 regarding to the GHG calculation and GHG reduction mitigation. Mitigation plan also should contain reduc-tion target and timeline,i.e.

1. Maintain level of water in peat-land area/canal less than 60 cm from ground level 2. Optimize usage of shell and fiber for boiler fuel to replace fossil fuel at least 80% from potential ener-

gy 3. Usage of empty bunch compos to reduce usage of chemical fertilizer at least 10,121 MT/year 4. To control volume of liquid waste which is produce less than 19,500 M3/year Company has calculate their GHG emission, using RSPO calculator version 2.1.1 for year 2015 ac-tivities, here the calculation result; - Final emission per product o CPO = 0,29 tCO2e/t product o PK = 0.29 tCO2e/t product - Overall emission summary o Total field emission (tCO2e) = -1,544.97.77 o Total mill emission (tCO2e) = 7,323.16 - Emission from Palm Kernel Crusher o PK from own mill = 825.17 (tCO2e) o PK from other source = 0 Fuel consumption = 0 Compliance status : Non Compliance


Principle 6: Responsible consideration of employees and of individuals and communities affected by growers and mills

Criteria assessed: CR6.1, CR6.2, CR6.3, CR6.4, CR6. 5, CR6.6, CR6.7, CR6.8, CR6.9, CR6.10, CR6.11, 6.12, 6.13



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Findings:

CR 6.1: There is a report of Social and Environmental Impact Assessment of PT RMM on April 5-16, 2013, conduct by Yayasan Kelapa Sawit Berkelanjutan Indonesia. Assessment was conducted on surroundings villages such as Sikarakara, Sikarakara II, Sikarakara III, Sikarakara IV, Sundutan Tigo, Bintuas, Taluk, Rukun Jaya, Suka Maju, Tunas Karya villages at Natal Districts, Mandailing Natal Regency. The identifed impact were as follow :

Economic Sector: positive impact, i.e. there were increasing of income for farmers, traders, raising of shop and store, food store and traditional market. The negative impact was: decreasing of land ownership at coastal area.

Social cultural sector: positive: impact was occuring of assimilation in coastal villages and transmigration vil-lages. It was changes from primary setor into secondary sector and tertiery. Occupation of time was more productive. Negative impact: people become more consumptive. High dependent on external production food.

Environmental. Positive impact: not yet experienced by people. Negative: river pollution, aridity, fire and fly dispersion.

Raising issues need to be address by management :

Communication and information system was not effective.

There was no clear information regarding to plasma development.

Pollution on the river by mill waste.

Fly dispersion related to mill waste.

Low of manpower from surrounding villages accepted by the company and working accident

Low of educational level

Minimum medical resources and health care infrastructure in the villages.

There was community participatory evidence i.e. list attendance of SIA process in surrounding villages. Fo-cus group disscussion held in Sikara-kara, Buburan, Taluk and Sikara-kara III on April 9, 2013 and in Bintu-as, Sundutan Tigo, Simpang Bambu, Bronjong, Sikara-kara II, Sikara-kara IV, Sukamaju, Rukun Jaya vil-lage and KUD Sumber Jaya on April 13, 2013. Results from focus group discussions and questionnaires were sent to 110 respondents included in the assessment report and used in preparing the social manage-ment recommendations.

There were management and monitoring program of social impact based on SIA for 2015. The program for example was :

Improvement of nutrition quality for employee, consist of improvement of nutrition quality at crech, new clinic building development, medical check up for employee handling high risk work such as spraying and manur-ing in January-December 2015

Improvement communication quality with stakeholder: donation for village attention board.

Community health counseling,.

Community economic empowerment: training of oil palm plantation best practice.

The responsible for implementing social management and monitoring plan, namely personnel and general affairs division.

SIA report consist of identified social impact of scheme smallholder which is the surrounding villages ask the company to prepare smallholder area for them as already done for Sikarakara III village community.

Review social management plan was conducted on March 12, 2016 in PT Rimba Mujur Mahkota Office in-cluding review of realization social management program year 2012 to 2015, the review was attended by 14 participant including from community surrounding company’s area, following several social management plans are reviewed, including: the boundaries of the concession, artnership scholarship, provision of educa-tional facilities for the children of employees and the community, job, etc.

The results of the review of social management plan that includes community participation, it was deter-mined that the company will continue the program of social management plans from the previous year.



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The Company manages smallholder area of 600 ha (300 families) who are members of cooperatives Sum-ber Usaha and SIA preparation involves KUD Sumber Usaha, located in the village of Sikara-kara IV.

CR 6.2 The company has the SOP of Implementation of Communication and Community Consultations and a list of local communities and other affected or interested parties in document number RMM/ADM/MR/20 rev 1 dated Agust 25, 2015. The parties affected are local communities, suppliers, contractors, labour union. The company have SOP Internal and External Communication No. SOP.Dir.MR-06 rev 02 dated 22-08-2015.

This procedure has been communicated and consulted with the community around the estate on December 23, 2015 with the aim that the procedures are understood by the community. This SOP also states that community relation officer as a person in charge to make communication and consultation with the community.

Employees and the community who submit suggestions / complaints will be protected by the company's management and can remain anonymous in order to avoid the reporting intimidated, suppression or layoffs.

As for the land dispute contained in the procedur land Dispute Settlement and compensation for destroyed crops. Settlement of land disputes do if claimants submit evidence of land ownership, then will be measured and the company holds a meeting by presenting the parties to the dispute and sub district head, village heads, community leaders. Parties claiming to be present and directly adjacent landowners or people who can explain the origin of land, then tested the material in the meeting. Decisions are made on stamp duty and documented / video, if there is no decision in the consultation will be taken legal action/litigation.

The company is appointed Irfan Susandra to be responsible for communication and consultation with the affected parties according to letter No.06/ST-RMM/VII/2016 July 01, 2016.. The position has been made official with clear and proper job description, and the affected parties been made aware and have access to the person in charge by letter or drop in suggestion box.

The Company has compiled a list of stakeholders on January, 2016. Information of stakeholder contain name, institution, address and phone number. Person in Charge for drafting the list of stakeholders is a HRD and a list of stakeholders is updated. Every six (6) months. Records of all communications are run by Human Resources Department in the log book of incoming mail and outgoing mail. Records of all commu-nication, including confirmation of receipt or endorsement, recording in log book.

CR 6.3 There was system for grievance handling in internal and external communication SOP no. : SOP.DIR.MR-06 valid since 1 April 2014. By this SOP it is stated that letter or memorandum is a media for communication with internal and external parties. This SOP is covers electronic letter also. Beside this direct letter, communication also could be made by letter sent fo suggestion box. Subject to this communication are as follow :

- Information regarding to quality management and company environment.

- Grievance, objection, complaints and improvement suggestion on companys policy.

- Request for company’s publicly available data.

Flow step for this SOP communication is described bellow :

1. Once in a week the suggestion box will be open by HR Department or General Department.

2. Suggestion, complaint or grievance letters, if any, will distribute to estate or mill manager for action taken needed.

3. Evaluation and consideration on the incoming letter will be follow and responsed by manager by approval from manager or director.

4. All of incoming letters should be recorded by HR of General Department in the logbook.

There was record of employee’s complaint regarding to housing and infrastructure condition and was re-sponded by management. Base on the record of corrective action that company has repaired for some damaged roof or switched into new roof.

Regarding to land compensation and other, including identification process for parties entitled for compensation there was SOP.Dir.LEG-03, used to identification and calculate teh fair compensation for loose of legal and customary right on the land by involving of community representative and related



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institution, and publicly available. This SOP is valid since 1 April 2014

Public relation section is responsible to receive complaints and grievances. They receive, identification of requests or complaints from external parties and communicate to the relevant manager. Also carry out communication and consultation with the relevant sections with external parties. The Company has docu-mented every worker’s complaints and responses on the form of complaint receipt. The worker’s complaints have to be resolved, maximum in one week. The department in charge for documenting employee com-plaints is public relatona dn HRD Department. For example: On September 28, 2015 of on behalf Lamber-tus Lasan delivered a complaint about leaking in his house , and then on September 29, 2015 the worker’s complaints had been resolved by replacing a leaky roof.

Proposal letter No. 460/92 / SKK / 2016 from Baitul Jannah Mosque Construction Committee Sikara-kara to the management of PT. RMM dated 28 March 2016, the response from the management with letter No. 01 / Ex / EM-RMM / V / 2016 to the village chief about the information that the proposal in the approval process at central management delivered on 30 May, 2016.

Letter No. 1522/130 / VI / 2016 from Sikara-kara IV Village Head to the management of PT. RMM regarding requests for heavy equipment to help hoarding village access roads dated June 08, 2016.

The response letter No. 01 / Ex / EM-RMM / vi / 2016 from management of PT RMM to Sikara-kara IV Vil-lage Head regarding apology for request of heavy equipment is still working in the estate area dated June 27, 2016.

Management representatives is responsible for ensuring the information transmitted in accordance with the environmental rules and followed up. Socialization to the workers throuh morning meeting.

The company provides a suggestion box as the means of receipt of complaints, disputes of employees and external parties. Suggestion boxes placed at the department office, estet offices and mill office. Assistant department / personnel of general affair open suggestion box weekly to be forwarded to the estate manager / mill manager. Then followed by the Manager with the approval of the General Manager or the Board of Di-rectors. All suggestions are recorded in the logbook. The company also provide mechanism or procedure for workers to report a grievance against a supervisor. In SOP Internal and External Communications SOP.DIR.MR-06 rev 02 dated August 22, 2016 stated that if there is a suggestion, complaint or dispute against direct supervisor, the complainant may submit the report directly through the directors with a copy to the MR. Complaints related to infrastructure/housing were reported verbally by the occupants, and requested im-provements recorded by an assistant department and followed up by the engineering section. Approval of repair by the approval of the technical assistant manager of the garden. So far no cases of disputes. Com-plaints of registered external PR department (for gardens and PKS), while for central office personnel and accepted by the public), the information will be forwarded to the relevant sections, effluent management. Related section will conduct an investigation and mitigation-related information and, if necessary inspection and monitoring involves a 3rd party. If requested by an external party, then the PR submit a written re-sponse, and recorded in the minutes of external communications.

CR 6.4 It was available Land Acquisition Procedures SOP.Dir.LEG-03 rev 00, regarding to land compensation and other, including identification process for parties entitled for compensation, used to identification and calculate fair compensation for loose of legal and customary right on the land by involving of community representative and related institution, and publicly available. This SOP is valid since 1 April 2014.

Compensation granted if there is a community of cultivated land in the location permit. Company socializing with the people who live around the prospective area and held meetings with owners / tenants. Acquisition of land produces output base map of land by the owner of the land of origin was measured using GPS, veri-fication and administrative requirements for land acquisition was followed by the approval of the payment. Payments are made jointly to the owners of land in one block / area and made the Minutes of Payment of Compensation.

There is no record for land compensation from the previous company’s management since there were no land acquirred from surrounding company. The company management said that all of this HGU area was forest concession company, previously.

Based on interview to surrounding community there is no land acquisition anymore from them by the company.



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CR 6.5 The Company has a document listing the employee wages for the month of July 2016, and the wages of employees are paid above the average of the provisions of the provincial government of North Sumatra. Company has a copy of the Decision of the Governor of North Sumatera No.188.44 / 46 / KPTS / 2016 on sectoral minimum wages Mandailing Natal district in 2016 amounted to Rp. 2.032.850. Also company has decision letter : - Directors' Decree No. 01 / SK / DIR-RMM / II / 2016 on wage increases Permanent (KHT) into IDR.

2,032,860 or IDR. 67,762 / day. issued on February 9, 2016 - Directors' Decree No. 02 / SK / DIR-RMM / II / 2016 on Wage Increase Daily paid worker (KHL) IDR.

81 314 / day. issued on February 9, 2016 Example for payment on July Misran (1st Foreman) payment IDR 2,738,069 (permanent) , Hendi (checker) IDR. 2,128,401. There is a document “PKB” (collective labor agreement) between PT RMM and Worker Union organisation of PT RMM 2016-2018. This agreement already registered and got approve on June 17, 2016 by Labour and Transmigration local Officer Sumatera Utara province by Decision Letter no. 170-6/DTK-TR/2016, and valid for June 14, 2016 - June 13, 2018. The pay received by the employee consistent with the terms of the contract and the law. PKB socialization conducted by distributing PKB pocket book ( interview with Union secretary)

PT RMM (Estate, smallholder and mill) provided adequate housing, electricity, water supplies, medical services and education (from junior high school until senior high school). There are housing and suppporting facilities in every estate of PT RMM. For example was Sikarakara Estate equipped with worship house and mosque, clinic, elementary school, and clean water pool.

Facility Unit

G2 Housing 564 Long house 241 Staff Housing 23 Child Care 8 Church 1 Mosque 2 Kindergarten 1 Elemnetary Scholl 1 Junior High Scholl 1 Health Facility 1

School Bus 3 Ambulace 1

The Company has worker Cooperative its provide household goods for workers and their families, and com-pany allow the workers to sell household goods at worker housing. (Field Observation at workers housing Local market near the company at Sikara-kara Village.

CR 6.6. The Company's policy regarding to worker union is avaliable in employee Work Agreement between PT RMM and worker union of PT RMM on chapter 5 This agreement recognizes the state that company officials SPKP PT RMM in the company as union of workers and as a partner in the relationship also worker freedom to establish association.

To implement the policy, PT RMM has worker union roomates namely "Worker Union of PT RMM". There is regarding to regular meetings between this worker union and management of PT RMM example dated on June 02, 2014 with the meeting agenda , welfare workers . Meeting were attended by representatives of workers, workers union and management.

SPKP internal meetings with the company management dated June 14, 2016 in the conference room to dis-



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cuss the review RMM garden office clerk wages pengutip TBS. with participants 21 participant members and company representatives.

Meeting of PKB (collective labour agreement) extension dated April 6-8, 2016 at directors office with 14 par-ticipants representatives of workers and management,.

CR 6.7 There are no workers under 18 years old in Mill and Esate especially permanent workers, all of them mostly are adult person and had been working for 5 to 15 years (field Observation). Example And im-plementation in job vacancy information one of requirement is candidate must be minimum age 18 years old. The minimum working age for workers together with working hours clearly defined in the company’s regulation and in the recruitment procedure, document No. SOP.Dir.PUM-02 rev. 01 on May 01, 2012. General requirement on recruitment is minimum working age is 18 years old.. - Written permit from parrents. - Working agreement between company and parrents. - Longest working hours is 3 hours per day. Environment condition do not interfere with his physical, phsyco and social development and school time. There is company’s pollicy in circular no. 002/GM-RMM/IV/2014 for worker protection and prohibiton, valid since 11 April 2014. By this circular it was stated as follow :

1. The company only accepts adult worker (18 years minimum age or married). 2. Worker is prohibited to bring children to work. 3. Children between 13-15 years old are allowed to do light work as long as not interfere his

physical, phsyco and social development. 4. Estate division which accepted this kind of working children as point 3 above shall accompany

with requirement .

CR 6.8 Related to prevention of any form of discrimination there was the company's regulation on equal opportuni-ties for all community members to take advantage for working in the company. This policy was contained in a circular No.01 / SE / DIR-RMM / V / 2014 dated May 7, 2014. In point 9 it was stated that the company ap-plies equal opportunity for all community members to take advantage to become the company's worker without any discrimination on nation, race, gender, and religion.

Evidence of equal treatment in working opportunities for workers could be seen on worker lists which shows that all workers come from different race, nation, gender adn religion. Based on interviews and fielld obser-vation it was found that there was no discrimination to the worker regarding to this opportunity. Interviews with employees of evidence that the policy has been implemented.

The company explicitly states the indiscriminatory policy during the recruitment, selection, hiring and promo-tion process. The basic policy that company respect the equal rights of applicants and does not justify the existence of considerations based on aspects that are not related to work (nepotism, gender, religion, race etc.)

The company's employees recruited and promoted based on skills, capabilities, qualities, and necessary medical fitness for the job. Promotion based on work assessment, examples of work assessment of assis-tant afdeling V, field Agronomy department, dated June 19, 2015, which assessed : process (discipline, mo-rale, teamwork, poles, reliability, control), consist of self-assessment and assessment by supervisor; People management (delegation, coaching and Counseling, motivation, development of subordinates). Signed by its own employees, the supervisor, the appraiser.

Promotions Decree No. 25 / SK-SM / RMM / VII / 2016 concerning determination of Upkeep foreman at Afd I , Maruli Harahap becoming fixed monthly worker starting July 1, 2016. Accompanied by evidence of per-formance appraisal for the terms of the promotion.

Promotions Decree No. 01 / SK-SM / RMM / VI / 2016 concerning determination of Sabar Siahaan Afd Plasma 1st Foreman becoming fixed monthly worker starting of June 1, 2016. Accompanied by evidence of performance appraisal for the terms of the promotion.

PT RMM Recapitulation employee (Mill and Estate)



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Unit Sex Woker Religion

Male Female Local Non Local Moslem Christian

Staff 19 - - 19 16 3

Monthly 129 40 43 126 124 45

Daily Perma-nent

391 31 41 381 154 268

Daily Paid 192 343 41 494 137 398

CR 6.9 The company has the policy to prohibit any form of sexual and all other forms of harassment and violence. Contained in the Management Policy Quality and Environment in Producing Sustainable Palm Oil Sustaina-ble, point 10: Protect the reproductive rights of all workers by preventing any form of harassment and vio-lence that can occur especially against women workers, and do not allow minors to do the work in corporate environment.

There was the company's policy regarding sexual harrasment to prevention and violence againts women. This policy was contained in circular no. 002 / GM-RMM / IV / 2014 pertaining to worker protection and pro-hibition as follow:

1. Workers are prohibited to conduct sexual harassment and any form of violence against women and her family.

2. Workers are mandatory to use suitable and not sexy cloth

3. Workers are not allowed to stand colse together apart from other workers during working time in order to Prevent any action sexual harassment.

Regarding reproductive right to protection, in this circular letter or bresfeeding states that pregnant women are not allowed to do any job related to chemist and manuring or hazardous materials.

Menstrual leave and maternity leave provided for in article 21, paragraph 1 of female workers in a given pe-riod of rest 2 days to get full pay, with the provisions of the examination the doctor or health worker and noti-fied to the employer. Paragraph 2 women birth period female workers given leave it 1.5 months before and 1.5 months after birth..

Related to special treatment, the gender committee has established recently, Consist of head of committee, secretary, and members. Function of this committee was as an official institution for the worker to reporting any case of sexual harassment or violence against women experienced. Based on interviews and field ob-servation, it was found there is no sexual harassement and violence faced by workers and their family. However, there is evidence that this committee found already socialized to the worker. As evidence of re-productive rights policy implementation, there were no pregnant women or brestfeeding Involved in working related to chemist, manuring or hazardous materials.

PT. RMM Women protection committee, Chairman : Meida Aurora, Vice Chairman : Nurhamida, Secretary : Surya Susanti.

Women Protection committee agenda :

1. Socialization of cancer and tumors dated March 24, 2016 at Oikumene Church Afd II was attended by 20 participants, at YPBAM Kindergarten dated May 23, 2016 attended by 60 participants,

2. Socialization of Women Protection Committee July 23, 2016 at Bina Artha Mahkota Kindergarten was attended by 68 participant.

3. Medical Check for female worker (chemist) dated March 19, 2016 attended by 66 women workers.

4. Meeting of the committee dated February 1, 2016.

Concerning the Handling Whistle-blower mechanism, stated in grievance handling in internal and external communication SOP No. SOP.DIR.MR-06 valid since 1 April 2014. By this procedure explained if there is a letter of advice, complaint or dispute that may be made anonymously, but the information must be searcha-



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ble for accuracy by the Human Resources and General Affair. There is no record regarding sexual har-rasment or women discrimination

CR 6.10 The FFB purchase procedure No. SOP-01 rev 02 Dir.MKT-01 published March 29, 2016 In it explains the pricing mechanism FFB purchase from 3rd party (individual suppliers, Collector or other companies).

The company also has a copy of the FFB price for smallholder in accordance to decision of Plantation Agency North Sumatra province period July 27 to August 2, 2016.

In Agreement company explain that FFB pricing depends on Decree from Disbun North Sumatra Provence is the explanation given to the Cooperative Plasma and other suppliers, However to all supplier companies will deliver pricing mechanism in accordance with the FFB purchase procedure No. SOP/Dir.MKT-01 rev 02 published March 29, 2016 at the same time of signature of the FFB purchase contract.

FFB Price for 3rd party on June 2016

Year Planted FFB IDR/Kg

3 1,159.02

4 1,299.41

5 1,392.80

6 1,432.77

7 1,483.50

8 1.532.58

9 1,582.27

10 1,625.97

Example of contractual agreement :

FFB Purchase Agreement No. 020 / FFB-MAL / MDN / VII / 2016 dated July 25, 2016 between Bie jan Jusri (Madina PT Agro Lestari) with Saiman Wagimin (PT RMM) agreement as FFB supplier to PT. RMM mill with volume of 1,500,000 kg , period July 28 to August 30 2016, with the price of IDR 1,495 / kg. Both par-ties have signed a successor agreement and understand the contents and terms of payment. Payment of evidence via Artha Graha Bank IDR 2,466,750,000, - including 10% Vat dated August 1, 2016. FFB Purchase Agreement No. 08 / TRADING-RMM / KANDIR MEDAN / IV / 2016 April 1, 2016 between Grace Langkat Prosper with PT. RMM period April 1 to 30, 2016, with volume 4.000.000 kg price IDR. 1,795 / kg, both sides have signed a successor agreement and understand the contents and terms of payment of IDR. 1.970.012.500, dated April 5, 2016.

However company has partnership agreement with KUD Sumber Usaha (smallholder) as FFB supplier No. 16/KUD-SU/VII/2008 – No. 005/SPK-RMM/VII/2008 10-07-2008, explained that the company is obliged to buy FFB smallholder with prices based on the Regulation of the Minister of Agriculture on guidelines for de-termination of plasma FFB purchase price set by the Governor of North Sumatera. Both parties understand and agree with the agreement and signature on the seal, also company conducted monthly payments ac-cording to the agreed time in the term. There is no complaint related FFB payment As explained on CR.2.1. above, inconsistent to legal requirement found related to FFB payment to Small-holder (Koperasi Sumber Usaha). The Company paid Plasma FFB is not in accordance with the price issued by North Sumatera Plantation Office, this is not compliance with the Regulation of No. 14 year 2013 (FFB Purchase From Smallholder). Price from Disbun month of July 27 to August 2, 2016, Mature 10 years plant-ed of IDR. 1,625 / kg, while the price of PT. RMM IDR. 1,370 / kg) the Company has not demonstrated com-pliance with the relevant legislation related FFB payment to Cooperative Plasma protected by law. It raised Non conformity as recorded on NCR No. (RSPO00607).



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CR 6.11

The company actively contributes to local community development programmes company has allocation for such activities and there are a number of documented CSR programme 2016 activities, under following evi-dences :

1. Help hoarding access roads at Taluk villae IDR. 2,449,280 dated February 29, 2016

2. Help hoarding village road with excavator Sikara-kara IV IDR. 10,264,216 dated February 29, 2016

3. Assistance to scrap and stockpiling of village access roads Sikara-kara III village dated May 31, 2016 .

4. Help materials cement building materials market in the Natal III village IDR. 2,700,000 dated April 26, 2016

Smallholders registered in company is Koperasi Serba Usaha, There is effort to maintain the productivity of small holder , company allocated 15 employees to managed the smallholder.

CR6.12

There are no Company’s operations related to trafficked and forced labour. All of plantation workers are In-donesian Local workers. There are no restrictions on workers from leaving the mill or estate or their housing facilities outside working hours.

The process if a worker wants to terminate their employment before their contract expires is by sending resign letter to get approved. The company doesn’t give the penalties if the workers were terminated or fired before their contract expires.

Example Temporary Labour Agreement No. 11/KKWT/RMM/VII/2016 dated June,01, 2016 Mukholik valid for July 1 to September 30, 2016. Daily paid IDR 81,314/day.

No. 11 / PKWT / RMM / VII / 2016 dated 01-07-201, Mukholik valid for July 1 to September 30 2016. Daily paid IDR 81,314/day.

CR6.13

The company distributed circular letter No.01 / SE / DIR-ROM / V / 2014 dated May 7, 2014 on the Protec-tion of Human Rights and Prohibition Policy. Stated in point 1: in carrying out the activities of the company's activities are expected to leaders / staff, employees in all regions / work units (estate and mill and directors office) to always respect human values, mutual respect, with dignity and responsible. And Socialization al-ready conducted while distributing PKB pocket book.

Company’s commitment in Human rights has documented in Collective Labour Agreement (PKB) 2016-2018, such as:

a. The freedom workers to have a worker union, was state in clause 5.

b. Commitment to equal opportunity has documented in clause 14.

c. Clause 10 about the recruitment, state that the workers at least are 18 years old.

Other subjects that communicate in the socialization process are:

a. Restriction for all workers in consuming alcohol and drugs inside PT RMM Operation Areas.

b. Restriction in conducting violence actions/activities inside PT RMM Operation Areas.

Complaince status: Compliance with observation



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Principle 7: Responsible development of new plantings

Criteria assessed: CR7.1, CR7.2, CR7.3, CR7.4, CR7. 5, CR7.6, CR7.7, CR 7.8.

Criteria not assessed:

Findings: The company compliaces to PR 7 from Cr. 7.1 to 7.8 still same with the previous audit findings.i,e,

CR 7.1 Company has document of Social and Environmental Impact Assessment which is done by third party in year of 2013 (YASBI team), covering result of analysis of social aspect positive and negatives and environment aspect with participation of affected parties (local communities).

Company has document of Environment Impact Assessment Term of reference for Plantation and Mills PT Rimba Mujur Mahkota dated on July 2008¸also environment impact assessment dated on July 2008 which is approved and passed by Head of Environment Impact Management Agency District Mandailing Natal Number : 660.2/007/BPDL-MN/2007 dated October 15th, 2007, and regent of Mandailing Natal Number : 660/1949/BPDL-MN/2008 dated August 20th, 2008 related tentang Approval of Social Environment Analysis, Environment Management Plan, Environment Monitoring Plan, for Oil Palm Plantation and Mills PT Rimba Mujur Mahkota at sub-district Natal, District Mandailing Natal, Northern Sumatra Province, covers an area 4.956 acres and Mills capacity 45 ton FFB/hour.

According with explaination in criterion 4.8 that all activity plantation in smallholder areas by company so that the company not provide training program for smallholder and based on agreement between company with cooperative village (KUD) Sumber Usaha that there are not obligation from second party (company) for de-veloping smallholder so that records of development program not available.

CR 7.2

The company has conducted analysis of the soil with the evidence is a report of ‘Document land suitability evaluation of oil palm plantations PT Rimba Mujur Mahkota, Januari 2014’. Land suitability evaluation con-ducted by the Reasearch Institute of Horticulture and the Environment (Medan, North Sumatra) with contains a description of the land, soil map unit classification, analysis class of actual and potential land suitability, in-cluding for oil palm agronomy.

The company has soil map scale 1:10,000 for afdeling I until VIII and afdeling Plasma. The maps show that there are six soil map units within the estate area, which are red yellowish podsolic, brown yellowish podsol-ic, red yellow podsolic, alluvial grayish brown, peat soil association with alluvial watery and organosol (peat dept 0,5 – 2 meters). The company has a peatland distribution maps for nucleus and plasma estate with a scale of 1: 10,000. The Company has determined the peg mounting points representing subsidence depth levels of low, moderate to high for all blocks.

The company has already strategy to maintain the estate with the critically condition i.e. estate with slopes above certain limitas. Based on the slope map, 77.05% of area (3,818.40 hectare) has a contour flat (slope 0-8°), 14.66% (726.32 hectares) has a contour ramps (slope 8-15°), 6.45% or 319.77 hectare has choppy (15-25°), 1.78% or 88.16 hectare of hilly slope (25-45°) and 0.07% (3.35 hectare) has mountain slope (>45°). The most important conservation treatment are terracing and planting legumes in slope areas and management of peat soil is highly emphasized by monitoring and measuring water level, should be monitored between 50-75 cm,

CR 7.3

The company has HCV assessment report with the scope of HCV assessment are all company areas and village cooperative of sumber usaha’s areas (KUD Sumber Usaha). HCV assessment conducted in April 2013, one year after PT RMM accepted as RSPO member, whereas, based on hectare statement of PT RMM that there are planted years in year 2005-2006 amount of 679 ha (23 ha in afdeling 2, 129 ha in afdeling 5 and 181 ha in afdeling 8). All year planted 2005-2006 is inside land use right (HGU) concession and not in the HCV areas nor replace any primary forest , Based on EIA study, previous land cover that



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opened in 2005 and 2006 is secondary forest and old shrubs, it also shown in Landsat imagery as described in HCV assessment.

CR 7.4

The company has soil map scale 1:10,000 for afdeling I until VIII (nucleus estate) and afdeling Plasma. The maps show that there are six soil map units within the estate area, which are red yellowish podsolic, brown yellowish podsolic, red yellow podsolic, alluvial grayish brown, peat soil association with alluvial watery and organosol (peat dept 0,5 – 2 meters). The company has a peatland distribution maps for nucleus and plasma estate with a scale of 1: 10,000. In year 2005 and 2006 the company planted on total area of 679 ha, with details of planting on peat land ar-ea is 333 ha and in mineral soils covering an area of 346 ha. Planting on peatland done in Afdeling 2 of 23 hectares, in Afdeling 5 of 129 hectares and Afdeling 8 of 181 hectares. The company made the investment plan/planting plan based on soil maps and topographic maps. The Company seeks to protect the peat land with making adequate drainage channels, have patok subsidence, water table gauges and water level on certain blocks. The company has a channel blocking Map scale 1: 20,000 for each section contained peat-land.

CR 7.5 The plantation has a the social and environmental impact assessment document which include analysis of both positive and negative environmental and social impacts, and made with the participation of affected parties, as explained under CR 7.1.

The year planting 2005-2006 areas to be in the Land Use Right (HGU) so the company has not conducted socialization to community, identification and assessment of customary and legal right with the involvement of relevant government agencies and local communities..

CR 7.6 According explaination in criterion 6.4 that Based on interview to surrounding community it was found that there were no land acquisition from them by the company so that year planting 2005-2006 areas no land ac-quisition from them by the company too

CR 7.7 The company obtain ownership of the oil palm plantation from another company is embedded in a planted condition of oil palm and so far the company has no preparation for replanting yet and does not have a doc-ument for it either. The company implements a zero burning policy as stated in their procedure and provide warning sign in whole company area including in plantation to warn people not to use fire in land areas. The company has emergency response procedur and fire extinguisher facilities as explained in the indicator 5.5 above


Principle 8: Commitment to continuous improvement in key areas of activity

Criteria assessed: CR8.1 Criteria not assessed: - Findings :

Overall implementation plans are defined based on risk level evaluated for identifying significant aspects. Verified & cross checked implementation of the actions such as waste management control, chemical management control, etc. The estate has an Environmental Monitoring and Management Plan based on the estate’s RKL/RPL documents and produces a report about implementation of RKL/RPL every 6 months. The report was submitted to BLHD of Mandailing Natal. RKL/RPL report for semester 2 year 2014 was ready at



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time of audit. The improvement plans was established include water quality management program by reducing the impact of fertilizers and pesticides in estate, reduce application of fertilizers and starting fertilizer application activities before rainy season according to recommendations. The company has policy to no use paraquat in pest management control activities.

PT RMM has implemented quality management system ISO 9001 and an environmental management system ISO 14001 and has obtained ISO 9001 and ISO 14001 certificate. Mechanism PLAN-DO-CHECK-ACTION as part of the management system mechanism goes well, the establishment of quality objectives / environment and quality next plan is guided by the company's operational management system set out in the quality manual and procedures and record every activity in every line of activity. Internal audit mechanism conducted periodically to see the consistency of the implementation of management systems. Evaluation is done by conducting management reviews are reviewing the whole process and the way that has been done, and seek improvements are still needed if found any shortcomings in the achievement of quality policy / environmental and quality objectives / corporate environment.

This time is main assessment so that the company has records of follow-up actions taken against RSPO au-dit findings and records of correction and corrective action against QMS, EMS and ISPO internal audit avail-able. Results of internal audit has evaluated and reviewed by top management, Compliance status : Full Compliance

3.1.2. RSPO SCCS

The following is a description of the findings pertaining to the company’s supply chain management system ac-cording to the RSPO SCCS requirements, including status of compliance of the company and their outsourced third parties to RSPO SCCS requirements. Results of audit/assessment as describe on the explaination below:

E.1. Definition

Findings: Sikarakara Palm Oil Mill (Sikarakara POM) is located in North Sumatera – Indonesia with production ca-pacity of 45 tonnes/hours. The mill processes Fresh Fruit Bunches (FFB) from company owned estate (Si-karakara estate), village cooperative of Sumber Usaha (KUD Sumber Usaha) and independent outgrowers. The company has an operating license from the Indonesian State Minister of Investment / Chairman of In-vestment Coordinating Board i.e approval of business permit (izin Usaha) No. 81/1/IU/I/PMDN/INDUSTRI/2010 (issued dated on November 12, 2010) with production capacity of CPO : 30,000 tonnes and PK : 6,200 tonnes.

The operations of Sikarakara POM were assessed against Module E of the RSPO Supply Chain Certifica-tion Systems (SCCS) document (November 2014). Following the nature of company’s supply base, the company selects Supply Chain Certification System with Mass Balance (MB) supply chain model of Sikara-kara POM.

Compliance status : Full Compliance

E.2. Explanation

Findings:

In year 2015 total FFB recived by Sikara-kara Palm Oil Mill from all sources were 235,915 tonnes, all FFB were processed, total CPO produced 49,253 Mt and PK produced 10,873 mt, with OER : 21.76% and KER : 4.61. Whereas in until August year 2016, FFB received by the mill was 168,440 tonnes same as FFB process, and produces CPO and PK amount of 37,021 tonnes (OER : 22.5%) and 7,462 tonnes (KER : 4.60%). Actual production for CSPO in year 2015 was 28,910 mt and certified PK was 6,087 mt.



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Projection of certified FFB production year 2016 from Sikara-kara estate and small holder is 237,684.22 tons to produc 53,479 MT CPO (OER : 22.5 %) and certified PK production is 11,799 tons (KER : 4.60%).

There were transaction for certified product in year 2015, i.e. through Green Palm 25,056 mt CSPO and 2510 CSPK. PT RMM provide Information of trade transaction by green palm and eTrace all records are kept maintained by commercial department in head office Jakarta. Compliance status: Full Compliance.

E.3. Documented procedures

Findings:

There is no changes on company’s procedure for implementation of SCCS requirements. There are a set of existing procedure consisting of :

• Procedure of FFB receipt (No. SOP.Dir.PKS-11 Rev.03 dated on June 23, 2014). This is proce-dure include create of daily report for FFB receipt, and marking of certified or non-certified in fruit delivery letter.

• Procedure of bidding, sell contract and review of product requirement (No. SOP.Dir.MKT-02 Rev.03 dated on June 23, 2014). This is procedure include information of certified or non-certified product in bidding invitation letter, contract document and delivery order document.

• Procedure of hand over of palm product to customer/buyer (No. SOP.Dir.MKT-03 Rev.02 dated on June 23, 2014). This is procedure include administrative completeness, making certified stamp in production delivery letter, and dispatch report.

• Procedure of over production klaim to the certification body (No SOP.Dir.MKT-07 rev. 03 dated on May 02, 2014

• Procedure of all production process from loading ramp until water treatment (No. SOP.Dir.PKS-01 Rev.0 to SOP.Dir.PKS-10 Rev.0 dated on July 11, 2011)

• Procedure of to create production report in mill (No. SOP.Dir.PKS-39 Rev.0 dated July 11, 2011).

There is no changes on name of the person having overall responsibility for and authority over the imple-mentation of these requirements and compliance with all applicable requirements, the mill still following as-sigement letter for assisten of quality control (as stated on job letter from GM PT RMM no. 002/ST/GM-RMM/2014 dated on April 01, 2014) at the audit time.

Sikarakara POM has a procedure for reception and processing of product/material (include from internal and external suppliers and/or certified or non-certified FFBs). Raining about RSPO SCCS requirement and all relevant procedure were provided to all relevant key persons, as observed from training records dated September 4, 2015. Training on SCCS new standard (November 2014) was Attended by 17 staff. Training also addresses the definition and application of mass balance and socialization procedure related to SCCS implementation. Compliance Status : Full Complaince

E.4. Purchasing and good in

Findings:

The mechanism for reciving FFB in Sikarakara Palm Oil Mill is not changes both from certified sources and non-certified sources. As explained on the previous audit report, the document to be verified from certified sources is fruit delivery letter (Surat Pengantar Buah) (FORM/AFD-14) come from company owned estate (Sikarakara estate) and village cooperative of Sumber Usaha (KUD Sumber Usaha). FFB certified status will be stated in form certified stamp on fruit delivery letter (Surat Pengantar Buah) and non-certified stamp on fruit delivery letter (Surat Pengantar Buah) for FFB non-certified by weighbridge operator. As improve-ment form last audit finding, the staff at the weighbridge has trained and has good understanding to mark-



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ing of certified and uncertified FFB and products.

In year 2015 total FFB recived by Sikara-kara Palm Oil Mill from all sources were 235,915 tonnes, all FFB were processed. Whereas in until August year 2016, FFB received by the mill was 168,440 tonnes same as FFB process.

The company has a mechanism to inform the CB immediately if there is a projected overproduction i.e SOP.Dir.MKT-07 Rev.0 dated on May 02, 2014. Compliance Status : Full Compliance

E.5. Record keeping

Findings:

Sikara kara mill has recorded and balance receipts if RSPO certified and uncertified in to mass balance record and also for palm oil production such as CPO and PK with basis three months and evaluated in eve-ry month.

In year 2015 total FFB recived by Sikara-kara Palm Oil Mill from all sources were 235,915 tonnes, all FFB were processed, FFB from certified sources (Sikara-kara estate and certified smallholder) were 132,848 ton and from non certified sources (PT DIS and independent smallholders) were 103,067 ton total CPO produced 49,253 Mt and PK produced 10,873 mt, with OER : 21.76% and KER : 4.61.. Actual production for CSPO in year 2015 was 28,910 mt and certified PK was 6,087 mt. Whereas until August year 2016, FFB received by the mill was 168,440 tonnes same as FFB process, and produces CPO amount of 37,021 tonnes (OER : 22.5%) and PK 7,462 tonnes (KER : 4.60%), actual production for CSPO is 20,564 ton and CSPK is 4,081 ton.

From company’s annual balance records Total 100% FFB received were processed to produced 49,235 ton CPO with average OER was 20.88% consist of 28,910 ton certified CPO and 20,343 ton non certified CPO. While production Palm Kernel in year 2015 was 10,873 ton with average KER 4.61% consist of 6,087 ton certified PK and 4,786 non certified PK.

In year 2015 company sold certified CPO via Green Palm with total amount 25,056 mt. Wherease until Au-gust 2016 total transaction in Green Palm was 11,000 and physical transaction through Etrace were 12,550 ton, in summary the transaction of certified product until August 2016 is 28,147 ton less than company’s certified claimed stated on certificate is 30,593 ton.

While for PK transacton in year 2015 was 2510 ton, wherase until August 2016, total Green Palm transac-tion for PK was 3220 ton and Etrace transaction 3600 ton. In summary total transaction certified PK until August 2016 was 6820 while total claimed as stated on certificate only 6,635, that is mean transaction for certified PK over than claim certified stated on certificate about minus 185 ton, however the company using CSPOK from year 2015 carried over to year 2016 i.e. 710 tons, to make the total quantity transaction in blance.


3.2. Status of Previously Identified Non-conformities

3.2.1. RSPO P&C

A total of 9 non-conformances were identified during 1st surveillance audit. These consisted of 5 major and 4 minor non-conformities according to RSPO P & C, as major non-conformity. For the non-conformances, the com-pany has taken the necessary corrective action to close these non-conformances within 60 days of completion of the assessment, and this was verified by the audit team through checks of documents submitted by the company.

During 2nd surveillance audit, it was found that there was sufficient evidence for closure of all non-conformities.



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The following is a description of the evidence of action taken to close the non-conformities raised during the previ-ous assessment, as well as auditor’s conclusions on the status of the non-conformities.

Criterion 1.1 (Major indicator 1): Records of requests for information and responses shall be maintained.

NCR 2015-01 of 09 (Major Non-Conformity) No evidence that organization recorded information request from the stakeholder as well as its response.

Evidence of Corrective action:

The organization has provided evidence of the recording of all the request letter from some external parties such as university, school, villagers, and the local institution. These requests then keep in the logbook both in Form/MR-19 and Form/MR-20, and completed with the response and time to complete the request.

Auditor Conclusions: Closed

Criterion 2.1. (Major indicator 1) Evidence of compliance with relevant legal requirements.

NCR 2015-02 of 09 (Major Non-Conformity) :

• Requirement of environmental permit (Surat Kesanggupan Pengelolaan dan Pemantauan Lingkungan Hidup) for plasma farmers that managed area of 600 ha. This requirement is mandatory as regulated on Environmental Ministry Decree No. 13 Year 2010 for activities with business scale under 3000 ha and operated individually (non-corporation category)

• Chemical material that used in field operational is still not registered and recommended by the local manpower agency as regulated on Minister of Manpower and Transmigration Decree No. 187 year 1999

• Some of boiler and sterilizer operators have no SIO license as required on Minister of Manpower Regu-lation No. 01 Year 1988 regarding to Qualification and Requirements for steam engines operator.

Evidence of Corrective action:

The company has provided evidence of the SPPL from Environmental Agency for every farmers who involved in Plasma estate on September 1st, 2015. For example: villager number 1 and 2 in Sikara-kara IV village already have the SPPL that signed by the local environmental agency of Mandailing Natal district.

The management of PT RMM has sent request letter No. 238/SM-RMM/VIIU/2015 on August 26th, 2015 to the Manpower Agency of Mandailing Natal district for pesticides recommendation completed with list of used pesti-cide. Request has been received by the Manpower Agency on August 27th, 2015 by Mr Parluhutan ST a staff in that agency.

The management of PT RMM has sent request letter No. 01/MM-RMM/IX/2015 on September 1st, 2015 for steam engines operator training purpose. This request has already approved by Main Director of PT RMM on September 1st, 2015. Operators that will be send in training are 3 workers Training will be organized an author-ized OHS consultant namely PT. Safindo Raya and the training will be held on 3 -8 September 2015.


Criterion 2.2 (Minor indicator 1): Legal boundaries shall be clearly demarcated and visibly maintained.

NCR 2015-03 of 09 (Minor Non-Conformity) :

SOP for demarcation monitoring is not available,

Auditor Conclusions : Closed



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Evidence of Corrective action : Procedur on boundary pillars monitoring has been made. The company has provided a new SOP for demarca-tion / boundary pillar No, SOP Dir-NKT-07 dated on September 1st, 2015. Regarding on Monitoring on Demar-cation Pillars. The SOP comes with forms for monitoring, plan and realization. The company implement bound-ary pillars monitoring with refers to the SOP.

Criterion 3.1 (Major indicator 1): A business or management plan (minimum three years) shall be documented that includes, where appropriate, a business case for scheme smallholders.


Business plan has not sufficient information/ data including area statement, non-planted area for HCV, cost for CPO production and benefit prediction (income statement)


Evidence of Corrective action : The company has developed and provide the proper business plan for Year 2015 until 2018, including cost for operational covering cultivation budget, harvesting budget, general budget, capital expenditure, CPO produc-tion budget, production budget (mill), hectare statement (utilized area), year of the plant, CPO and kernel sell-ing and cost, and profit estimation.

Criterion 4.3. (Major indicator 2) Subsidence of peat soils shall be minimised and monitored. A documented water and ground cover management programme shall be in place..


There is no guidance or procedure to manage peat land especially in subsidence and water level manage-ment.


Evidence of Corrective action : The company has developed a new SOP regarding to peat land management No.SOP- Dir. TAN 27 dated on September 1st, 2015, and completed with forms for monitoring recording. This SOP accommodates the guid-ance of subsidence gauge installment, water level gauge installment, water gate installment, mechanism for measuring, recording and water level management.

Criterion 4.8 (Major indicator 1): A formal training programme shall be in place that covers all aspects of the RSPO Principles and Criteria, and that includes regular assessments of training needs and documentation of the programme.


The company is not maintain list of workers or staff who need training, and training need assessment is not available to determine kind of training that needs to be done


Evidence of Corrective action : The company has developed a competency matrix for every employee and records all the training that has been received. The matrix comes with evaluation to competency improvement based on competency standard. The evaluation results are then used as the basis for the analysis of training needs and as preparation of the training program. Training program in 2015 has already made base on the employee competency evaluation.



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Criterion 5.2 (Minor indicator 2): Where a management plan has been created there shall be ongoing monitoring:


There is no evidence or reports that indicate that the implementation of the inspections carried out at HCV area. Correction : Corrective Action : Auditor Conclusions: Closed Evidence of Corrective action:

Company provides evidence of HCV and species monitoring align with HCV assesment recommendation and refers to SOP HCV monitoring No. SOP Dir.NKT-01. There is training evidence for staff that has responsible for HCV monitoring including complete monitoring report with HCV area condition. Criterion 4.7 (Minor indicator 1) Accident and emergency procedures shall exist and instructions shall be clearly understood by all workers. Accident procedures shall be available in the appropriate language of the workforce. Assigned operatives trained in First Aid should be present in both field and other operations, and first aid equipment shall be available at worksites. Records of all accidents shall be kept and periodically reviewed.


a. Report of Occupational Safety and Health Committee were submitted to the Department of Labor Man-dailing Natal regency dated July 13, 2015 did not include accident report and analysis

b. Records of the results of investigation of occupational accidents in 2015 are not yet available. Auditor Conclusions: Closed Evidence of Corrective action:

Company provides OSH report including accident report and accidents investigations report in workplace in 2015. The reports of OSH committee has been meeting reporting requirements, including workplace accidents report and its analysis.

Criterion 6.5 (Major indicator 2) Labour laws, union agreements or direct contracts of employment detailing payments and conditions of employment (e.g. working hours, deductions, overtime, sickness, holiday entitlement, maternity leave, reasons for dismissal, period of notice, etc.) shall be available in the languages understood by the workers or explained carefully to them by a management official.

Non-conformance No.2015-09 of 09 (Major non-conform ity)

Found evidence that daily worker didn’t get a copy of the employment contract made by the company and do not understand the contents of the contract Auditor Conclusions : Closed Evidence of Corrective action:

The Company has submitted some evidences to close this nonconformity, namely:

1. Receipt of submission of employment contracts with daily workers for all afdeling (Afdeling 1 to 8 and Afdeling plasma)

2. Some pictures of handover employment contract and socialization to the daily workers.



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3.2.2.RSPO SCCS

E.2 : Explanation

Non-conformance SCCS No.2015-01 of 03 (Major non-co nformity)

CPO certified physical transaction of 1,500 tonnes in January 2015 has not been listed on the RSPO e-trace. Auditor Conclusions: Closed.

Evidence of Corrective action: It wasd showed addendum of agreement on the cancellation of CPO RSPO Certified sales transaction with the buyer PT. Pacific Indopalm Industry, which states that the CPO sold is Non RSPO Certified. CPO transactions are not recorded in the RSPO e-trace because the buyer PT. Pacific Indopalm Industry did not confirm the re-cording in RSPO e-trace.

The company also sent an addendum of sales agreement No. 1 which revision on contract sales agreement number 005/PJB-RMM/I/2015 and revised mass mbalance report.

E.3 : Documented procedures

Non-conformance SCCS No. 2015-02 of 03 (Major non-c onformity)

The company has not been carried out training/awareness/refreshment/update of information to related em-ployee about new SC standard Auditor Conclusions: Closed.

Evidence of Corrective action: The company has sent SCCS training report which held on September 4, 2015. Training on SCCS new standard (November 2014) was Attended by 17 staff. Training also addresses the definition and application of mass balance and socialization procedure related to SCCS implementation.

E.4. Purchasing and good in

Non-conformance SCCS No. 2015-03 of 03 (Major non-c onformity) RSPO certified stamp used did not following the procedures, such as:

1. FFB receipt from estate and plasma did not stamped as FFB Certified. 2. PK RSPO Certified stamp used for sending invoices to the buyer without the support of PK certified

sales contract, 3. CPO RSPO Certified stamp used for sending invoices to the buyer without the support CPO certified

sales contract Auditor Conclusions: Closed.

Evidence of Corrective action: The company has sent some documents such as:

1. SCCS training report which held on September 4, 2015. Training on SCCS new standard (November 2014) was attended by 17 staff. Training also addresses the definition and application of mass balance and socialization procedure related to SCCS implementation.

2. Slip of FFB receipt from certified source (afdeling III dated September 02, 2015 and afdeling Plasma



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dated September 5, 2015) which has stamped with RSPO Certified.

3. Slip of delivery order for non RSPO certified product which not stamped withRSPO certified.

3.3. Identified Non-conformances, Corrective Action s Taken and Auditors Conclusions

A total of 5 non conformances were identified during 2nd surveillance audit. These consisted of 5 major and 4 minor non-conformities according to RSPO P & C. For the major non-conformances, the company has taken the necessary corrective action to close these nonconformances within 60 days of completion of the assessment, and this was verified by the audit team through checks of documents submitted by the company. A summary of all identified non-conformances, corrective actions taken and auditor conclusions is as below :

Criterion. 2.1.1(Indcator Major)

Finding: RSPO00607 There are some inconsistency with legal compliance: a. Safety shoes used by manuring worker were broken and not appropriate as required by Ministry of Man

Power regulation no. 08/2010. b. PT RMM paid FBB from smallholders’ scheme below standard FFB price defined by Agricuture officer North

Sumatera and ministry of Agriculture regulation Noith. 14 year 2013 (FFB price from partnership program), the defined FFB price from local government for period July 27 to August 02, 2016 for planted year >10 year Is Rp 1,625/kg while PT RMM paid Rp 1370/kg.

c. First aid kit brought by harvester supervisor was not comply requirement Permenaker No. 15 year 2008. Correction: a. To replace all broken PPE. b. Asking recommendation from Plantation agency from North Sumatera Province regarding calculation of

rendemen following planting age as consideration for FFB price calculation, not using FFB price standard stated by North Sumatera plantation agency. PT RMM make agreement for FFB price with KUD Sumber Usaha for using rendemen (conversion factor) as basic for FFB proce calculation.

c. To complete non conformance first aid kit as required by government regulation.

Corrective action: a. To identify all broken PPEs and check the condition regularly. b. To pay FFB according to agreed price considering CPO & PK rendemen based on smallholder scheme FFB

analisys result. To pay production premi (Sisa Hasil Produksi). c. To check and identify first aid brought by supervisor and ensure that all content comply to Permenaker

nomor 15/2008. Date of Closure: October 11, 2016 Auditor Conclution: Closed. Verification result: Company provide evidence such as:

a. Documentation of PPE distribution to relevant workers such as photograph safety shoes (rubber boots), mask, gloves, googles. Sample of reciept notes signed by the workers dated Auust 22, 2016.

b. FFB price calculation from September 01 to 30, 2016 including FFB price formulation,by selling docu-ment for period September 2016 signed by estate manager, KUD manager, administration officer, letter of FFB price information to Cooperation Sumber Usaha dated August 26, 2016 no. 241/SM-RMM/VII/206 including recommendation from Plantation Officer North Sumatera District No. 511/669/F/2016 for acknolwledge FFB price calculation in PT Rimba Mujur Mahkota for KUD Sumber Usaha. The company also provides information about FFB purchased list signed by KUD manager, administration officer, estate manage, dated October 01, 2016.

c. Documentation of handover of first aid kits to all relevant area such as: Afedling office 1, 2,3 & 4; har-vester supervisor. There list receipt notes of first aid kits including information about list of content that has been fulfill Ministry of Man Power regulation No. 15 year 2008 i.e 20 items dated August 15, 2016.



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Criterion.2.1.4 (Indicator Minor)

Finding: RSPO00608 Reference about hazardouse material and waste Kep. Bapedal Nomor 5/Bapedal/09/1995 has been invalid however still used in current SOP i.e. Hazardouse waste handling procedure (SOP.Dir.PKS-37) and harzard-ouse waste delivery (SOP.Dir.OKS-37). Correction: To revise SOP. DIR.PKS-34 hazardouse waste handling and SOP. Dir.PKS-38 hazardouse waste disposal re-fering to current updated regulation. Corrective action. Document control always communicates to all relevant function regarding update regulation and to ensure that all SOP refer to update regulation. Date of Closure: Auditor Conclution: Evidence of immediate action taken was accepted. Effectiveness of implementation to verified at next audit.

Criterion 4.1.2(Indicator Minor)

Finding: RSPO00609 Peat land management (SOP-Dir.TAN-27) has not addres mechanism monitoring and measurement water level and its standard as implemented on the field, Correction: To revise SOP.Dir.TAN-27 Peat land management to include water level in drainage gate to be implemented on site according to the SOP. Corrective action. Document control always communicates to all relevant function regarding water level management and to en-sure that all SOP well implemented as required. Auditor Conclution: Evidence of immediate action taken was accepted. Effectiveness of implementation to verified at next audit.

Criterion 4.7.1(Indcator Major)

Finding: RSPO00610 There is no safety induction for mill visitor as required by OSH procedure. Correction: To remain front officer regarding OSH procedure those require safety induction to all mill visitors. Corrective action. To conduct safety induction to all visitors. To revise safety information such as visitor line, dangerous area, noise area, and appropriate PPE usage. Date of Closure: August 15, 2016. Auditor Conclution: Closed. Verification result: Company provide document safety induction material, photograph during safety induction e.g. induction on Ai-gust 15, 2016 in front of power house conducted by Safety team PT Rimba Mujur Mahkota.



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Criterion 5.2.4 (Indicator Minor)

Finding: RSPO00611 PT RMM conduct HCV monitoring according to monitoring program, however there is no evaluation the effec-tiveness of program as input and consideration to make next monitoring program. Correction: To make evaluation report for HCV management and monitoring plan every month. Corrective action: To follow up all evaluation result and use as basic to make next montoring program. Auditor Conclution: Evidence of immediate action taken was accepted. Effectiveness of implementation to verified at next audit.

3.4. Noteworthy Positive Component

No. Clause Comment

1. RSPO SCC

Company improve their CSPO/CSPK product sold.

2. 6.1 The company has good SIA and the implementation of the SIA has very well

3.5. Conclusion and Recommendation for RSPO P & C and Supply Chain Certification

The audit team has confirmed through the audit process that PT Rimba Mujur Mahkota has established and main-tains an effective system to ensure compliance with the RSPO P & C year 2013 (Generic) and Supply Chain Cer-tification System requirements (dated November 2014).

TUV Rheinland recommends that PT Rimba Mujur Mahkota be continuing approved for certification of compliance to the RSPO P & C year 2013 (Generic) and Supply Chain Certification System requirements (dated November 2014).

3.6. Issues Raised by Stakeholders and Findings Pertaining to Issues

3.6.1. Issued raised during stakeholder interviews on-site

No. Stakeholders Issue Raised Management Response Audit Verifica-

tion

1. Labour Agency Mandailing Natal District. (Section Head of Industrial Relationship, Labor Supervision and Protection, Muh. Parluhutan Nasu-tion)

Labour Union Free-dom Issue

Implementation of freedom of Association according to Law 13 of 2003 on Labour and Law No.21 of 2000 concerning Union / Labour Union recognizes and hold a Collective Labour Agree-ment (CLA) PT. Rimba Mujur Mahkota with Workers Union (SPKP) PT. Rimba Mujur Mahko-ta with Workers Union and reg-istered also approved by the La-bour Agency and Transmigration

The Company has implemented the provisions of Law No. 13 tentnag Em-ployment and No. 21 of the Trade Union / Labour. That there are no deviation re-garding the imple-mentation of labor legislation and there has never been as-



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No. Stakeholders Issue Raised Management Response Audit Verifica-

tion

Aspiration related to BPJS payment of through BPJS branch offices in Mandailing Natal.

North Sumatera Province with No. 170-6 / DTK-TR / 2016, dat-ed 17-06-2016 on Registration of Collective Labor Agreement with SPKP PT.RMM. In fulfillment of Law No.40 of 2004 on the Social Security Sys-tem and Law No.24 of 2011 on the Implementation of the BPJS, then through policy management companies involve all employees in BPJS program Employment and Health , Retirement

sociated restrictions on freedom of asso-ciation gathered for

Workers union.

This is the authority of

Management

2.

Forestry and Planta-tion Agency, Labour and Trans-migration Agency, National Land Agen-cy Regional District Mandailing Natal.

Community Representatives (Buburan Villages and Bintuas Villages)

Plasma plantation develop-ment for the people of the of Bintuas and Buburan villag-es were unrealized

PT.Rimba Mujur Mahkota has realized Plasma Estate to the vil-lage Sikarakara-IV measuring 600 hectares to 300 families through cooperative KUD Sum-ber Usaha, as the Cooperation Agreement signed KUD Sumber Usaha with PT.Rimba Mujur Mahkota No: 16 / KUD-SU / VII / 2008 005 / SPK-RMM / VII / 2008 dated 10-08-2008. The develop-ment of Plasma Estate Buburan and village to village Bintuas, PT. PT.Rimba Mujur Mahkota has been declared inability through Letter No. 010 / DR-SK / RMM / IX / 2008 date 18-08-2008 (previ-ous management) and the Letter PT. Dinamika Inti Sentosa No.003 / DIS / XI / 2008 Date 25-11-2008 concerning the state-ment of willingness to continue business activities at PT. Rimba Mujur Mahkota, so in his case is not the responsibility of PT.Rimba Mujur Mahkota

The company re-sponsible for carry-ing out or realize the development of community small-holder for Buburan and Bintuas Villages are PT. Dinamika In-ti Sentosa not PT. Rimba Mujur Mahko-ta. Currently re-serve lands for plasma is not pro-vided.

Community under-stands that the re-sponsibility for the development of plasma plantation handed over to PT. DIS under the Agreement No: 004 / DIR-DIS / V / 2010. 027 / KBKPB / V / 2010 No. 003 / Dir-DIS / V / 2010-06 / KMTS / V / 2010



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No. Name of Stakeholder

Institution / Position Remarks

Stakeholders Interviewed On-Site 1. Waldimen

Nainggolan Chairman KUD Sumber Usaha Smallholder issue

2. Misdi Secretary KUD Sumber Usaha Smallholder issue 3. Subhan batubara Member KUD Buburan village Smallholder issue 4. Ari Puddin Member KUD Buburan village Smallholder issue 5. Konco Member KUD Bintuas village Smallholder issue 6. Bahran Community Representative Smallholder issue 7. Irfan Susandra Secreatary SPKP(Labour Union) Freedom activity



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4.0 CERTIFIED ORGANISATION’S ACKNOWLEDGEMENT OF INT ERNAL RESPONSIBILITY

4.1 Date of Next Surveillance Visit

The next surveillance visit is planned for August 2017.

4.2 Acknowledgements of Internal Responsibilit y and Formal Sign-Off by Client

It is acknowledged that the assessment visit was carried out as described in this report and we accept the as-sessment findings and report content. Signed on behalf of PT Rimba Mujur Mahkota …………………………… Idris Management Representative November 02 , 2016

Signed on behalf of TUV Rheinland Indonesia Aswan Hasibuan Lead Auditor Novembr 01, 2016



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APPENDICES

Appendix 1 : Details of certificate



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Appendix 2 : Surveillance Audit Plan



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Appendix 3 : List of Abbreviations

AMDAL Analisis Dampak Lingkungan & Sosial (Social & Environmental Impacts Assessment) CPO Crude Palm Oil EIA Environmental Impact Assessment ERTs Endangered, Rare & Threatened species FFB Fresh Fruit Bunches EFB Empty Fruit Bunches HCV High Conservation Value IPM Integrated Pest Management KUD Koperasi Unit Desa (Village Cooperative) LTA Lost Time Accident MSDS Material Safety Data Sheets NGO Non-Government Organization OHS Occupational Health & Safety PERDA Peraturan Daerah (Local Regulation) PK Palm Kernel POME Palm Oil Mill Effluent PPE Personal Protective Equipment PT Perseroan Terbatas (Company Limited) RKL Rencana Pengelolaan Lingkungan (Environmental Management Plan) RPL Rencana Pemantauan Lingkungan (Environmental Monitoring Plan) RSPO Rountable Sustainable Palm Oil SCCS Supply Chain Certification System SIA Social Impact Assessment SOP Standard Operating Procedure UKL Upaya Pengelolaan Lingkungan (Environmental Management Efforts) UPL Upaya Pengelolaan Lingkungan (Environmental Management Efforts)

Appendix 4 : Observations and Opportunities for Imp rovement

No. Observations / Opportunities for Improvement Criteria

1. There is no washing area in chemist room for workers sanitary and health 4.6.5 2. The list of stakeholder has not include other institution such as local police of-

ficer, hospital, finance institution and other relevant parties. 6.2.3

3. Company has not communicate rearding FFB price to cooperation to inform that FFB price according to standard from Disbun Propinsi SUMUT.

6.10.2

4. Apron that provided by the company especially for the sprayer is not water /chemical proof sufficiently still can contaminate worker clotes

4.6.5

5. There is no warning available at noise area especially at the area that has ex-ceed government standard.

4.7.1

6. Records for updateing legal regulation from last 2 year periode was not availa-ble.

2.1.2

7. The ILO Convention 184 was missed from list of legal and requirements identi-fication.

4.7.2

Roundtable on Sustainable Palm Oil - TÜV Rheinland · 2020-02-02 · Roundtable on Sustainable Palm Oil Annual Surveillance Audit Report Report no. : ASA2-14025 Surveillance assessment

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