Certification Assessment – Public Summary Report Table of Contents Page 1 SCOPE OF THE CERTIFICATION ASSESSM

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Certification Assessment – Public Summary Report Table of Contents Page 1 SCOPE OF THE CERTIFICATION ASSESSM Powered By Docstoc
					Certification Assessment – Public Summary Report



Table of Contents                                                                                  Page

1. SCOPE OF THE CERTIFICATION ASSESSMENT                                                           3
   1.1.     National Interpretation Used                                                           3
   1.2.     Scope of Certification                                                                 3
   1.3.     Location                                                                               3
   1.4.     Description of Supply Base                                                             7
   1.5.     Date of Planting and Replanting Cycles                                                 7
   1.6.     Other Certifications Held                                                              8
   1.7.     Organisational Information/Contact Person                                              8
   1.8.     Time-Bound Plan for Other Management Units                                             8
   1.9.     Areas of Plantations                                                                   9
   1.10.    Approximate Tonnages Certified                                                         10
   1.11.    Date Certification Issued and Scope of Certificate                                     10

2. ASSESSMENT PROCESS                                                                              10
    2.1    Certification Body                                                                      10
    2.2    Assessment Methodology
                   Certification Assessment Checklist of Principles and Criteria                   11
           2.2.1        Review of Documents                                                        12
           2.2.2        Onsite and Follow-up Interviews                                            12
           2.2.3        Resolution of Non-compliances                                              13

     2.3       Qualifications of the Lead Assessor and Assessment Team
                        13
     2.4       Outline of Stakeholder Consultation and how Stakeholders were Contacted
                        16
         2.4.1      List of Stakeholders Interviewed                                               16
         2.4.2      Questions Asked in Interviews of Stakeholders                                  16
     2.5       Date of Next Surveillance Visit                                                     16


3. ASSESSMENT FINDINGS                                                                17
    3.1    Summary of Findings for each RSPO Criterion with Objective Evidence on Conformance
              or Non-Conformance                                                                   17
     3.2          Details of Non-Conformances, Corrective Actions Taken
              and Auditors’ Conclusion                                                             29
     3.3          Noteworthy Positive Components                                                   36
     3.4          Issues Raised by Stakeholders and Findings by Assessment Team
                           37
     3.5          Auditee’s acknowledgement of internal responsibility                             38
     3.6          Formal Sign-off of Assessment findings
                           38




                                                      Annexes

Annex – A : Draft Certificate for RSPO Compliance                                                   39

Annex – B : Certification Assessment Plan                                                           40




Prepared by PT. TÜV NORD Indonesia                 Page 1 of 42                    Rev.02 date 28.04.2009
Certification Assessment – Public Summary Report




Summary

PT. TÜVNORD Indonesia (TNI) is a member of the German TÜV NORD group. TNI has
comprehensively audited Lonsum and found it to be in compliance with the Indonesian National
Interpretation of the RSPO Principles and Criteria (RSPO INA-NIWG) May 2008, and therefore
recommends it to be approved as a producer of RSPO Certified Sustainable Palm and Palm Kernel Oil. The
scope of the certification is:


−   Turangie Palm Oil Mill (POM)                           50,148 tonnes/year CPO*
−   Begerpang Palm Oil Mill (POM)                          53,236 tonnes/year CPO*
                                                            2,772 tonnes/year PKO*
−   Dolok Palm Oil Mill (POM)                              31,211 tonnes/year CPO*
−   Gunung Melayu Palm Oil Mill (POM)                      34,885 tonnes/year CPO*

* Production based on Jan-Dec 2007

Begerpang is the only POM expressing PKO from PK. The others sell off their PK. Their 2007 PK
production are.

Turangie POM                         : 13,236   tonnes
Begerpang POM                        : 13,484   tonnes
Dolok POM                            : 7,960    tonnes
Gunung Melayu POM                    : 8,821    tonnes

Abbreviations
CPO               Crude Palm Oil
PKO / PK          Palm Kernel Oil / Palm Kernel
FFB / EFB         Fresh Fruit Bunch(es) / Empty Fruit Bunch(es)
                  Sistim Manajemen – Keselamatan dan Kesehatan Kerja (Management System of Occupational
SM-K3
                  Safety and Health)
SPO               Sustainable Palm Oil
EMS               Environmental Management System
CSR               Corporate Social Responsibility
IPM               Integrated Pest Management
HGU               Hak Guna Usaha (Land Use Permit)
                  Upaya Kelola Lingkungan/Upaya Pemantauan Lingkungan (Environmental Management
UKL/UPL
                  Efforts and Environmental Monitoring Efforts)
POM / POME        Palm Oil Mill / Palm Oil Mill Effluent
LCC               Legume Cover Crop
LD50              Lethal Dosage (for50% of the population to be killed)
PPE               Personal Protective Equipment
KLH               Kementrian Lingkungan Hidup (Ministry of Environment)
Bapedalda         Badan Pengendalian Dampak Lingkungan Daerah (Local Environmental Body)
B3                Bahan Berbahaya dan Beracun (Toxic and Hazardous Materials)
                  Rencana Kelola Lingkungan dan Rencana Pemantauan Lingkungan (Environmental
RKL-RPL
                  Management Plan – Environmental Monitoring Plan)
                  Departemen Perindustrian dan Perdagangan (Department of Industrial Affairs and Commerce
Deperindag RI
                  of the Republic of Indonesia)
GPS               Global Positioning System
EIA               Environmental Impact Assessment
MSDS              Material Safety Data Sheet
Lonsum            London Sumatra (PT London Sumatra Indonesia, Tbk)
TNI               PT. TÜV NORD Indonesia
KAN               The Indonesian Accreditation Committee
DAR               Deutscher Akkreditierungs Rat




Prepared by PT. TÜV NORD Indonesia                 Page 2 of 42                      Rev.02 date 28.04.2009
Certification Assessment – Public Summary Report


1.0      Scope of the Certification Assessment

1.1      National Interpretation

The standard requirements of the Indonesian National Interpretation of the RSPO Principles and Criteria
(RSPO INA-NIWG) version May 2008 were used to assess the operation of the Palm Oil Mills and their
supply of FFB.


1.2      Scope of Certification

The scope for certification is the CPO production from 4 (four) palm oil mills processing FFB from 12
(twelve) company-owned plantations. In addition, Begerpang POM is certified for its PKO production.

None of the mills process outside crop, so all the FFB was internal.


1.3      Location

Lonsum has 4 mills and 12 plantations, all in North Sumatra province. Table 1 gives the geographical
coordinates of the mills and Table 2 for the plantations (actually, the plantation offices). The coordinates
are either GPS readings taken or from Atlas Indonesia, Satellite Imagery-Trimble GPS Geo XT on October
2008.


Table 1: Mill GPS locations

           Mill                 Latitude            Longitude
 Turangie                     3.478072199          98.267950285
 Begerpang                    3.459214057          98.824349121
 Dolok                        3.164909771          99.430328894
 Gunung Melayu                2.701162817          99.573972896

Table 2: Plantation office GPS locations

        Plantation              Latitude            Longitude
 Bungara                      3.532592247       98.187799876
 Pulo Rambong                 3.157748415       98.240064514
 Turangie                     3.497813210       98.217984160
 Sei Merah                    3.509048221       98.823927517
 Begerpang                    3.444558465       98.820000318
 Rambong Sialang              3.438504830       99.009309310
 Sibulan                      3.250307118       99.160864591
 Bah Bulian                   3.200162884       98.977957354
 Bah Lias                     3.181601392       99.344310238
 Dolok                        3.165304107       99.429934557
 Gunung Melayu                2.694574353       99.561003966
 Sei Rumbiya                  1.025117151      100.084857171




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Certification Assessment – Public Summary Report



Figure 1a: Map of Sumatra Island showing locations of mills and estates in North Sumatra province (in red
box)




Figure 1b: Expanded box from Figure 1a showing locations of mills and estates.




Prepared by PT. TÜV NORD Indonesia                 Page 4 of 42                   Rev.02 date 28.04.2009
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Figure 1c: Close-up of locations of Gunung Melayu POM and Gunung Melayu and Sei Rumbiya estates.




Figure 1d: Close-up of locations of Turangie POM and Bungara, Pulau Rambong, Turangie and Begerpa
estates.




Prepared by PT. TÜV NORD Indonesia                 Page 5 of 42               Rev.02 date 28.04.2009
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Figure 1e: Close-up of locations of Dolok POM and Si Bulan, Dolok, Bah Bulian and Bah Lias estates.




Figure 1f: Close-up of locations of Bagerpang POM and Sei Merah and Rambong Sialang estates.




Prepared by PT. TÜV NORD Indonesia                 Page 6 of 42                 Rev.02 date 28.04.2009
1.4      Description of Supply Base

The FFB processed is wholly produced by the 12 company-owned plantations (no purchased crop). Therefore,
Principle 7 of the RSPO Indonesian National Interpretation is not applicable.

Table 3 shows the FFB production by the estates.

Table 3: FFB production by estates (January – December 2007)

                           Estate                Location/District         FFB (tonnes)
                     Turangie                Langkat                               78,339
                     Pulo Rambong            Deli Serdang                          66,623
                     Bungara                 Langkat                               63,616
                     Sungai Merah            Deli Serdang                          39,708
                     Begerpang               Deli Serdang                          98,980
                     Rambong Sialang         Deli Serdang                             76,171
                     Bah Lias                Simalungun                               44,856
                     Dolok                   Asahan                                   60,618
                     Sibulan                 Deli Serdang                             12,739
                     Bah Bulian              Simalungun                                8,347
                     Gunung Melayu           Asahan                                  111,450
                     Sei Rumbiya             Labuhan Batu                             32,083
                     Total                                                           693,530

1.5      Date of Planting and Replanting Cycles

The company generally adopts a 25-year planting cycle freely variable for contingencies and
management/economic considerations. The age profiles of the palms are given in Table 4.

Table 4: Age profiles of palms by estates.

             Estate                                      Age of palms (years)
                                     0-5           6 - 10      11 - 15     16 – 20       20 - 28
             Turangie                  -             -          77%         11%            12%
             Bungara                   -             -          63%         33%            4%
             Pulo Rambong              -             -          32%         36%            32%
             Sungai Merah             9%           43%          17%         22%            9%
             Begerpang               12%           31%          20%         12%            24%
             Rambong Sialang         45%           32%          18%             3%         3%
             Bah Lias                53%           21%           7%             5%         14%
             Dolok                   18%           46%          19%             4%         13%
             Si Bulan                  -           79%          21%             -              -
             Bah Bulian              54%           46%            -             -              -
             Gunung Melayu            4%           25%          44%         14%            13%
             Sungai Rumbiya          33%            4%           7%             7%         49%
1.6         Other Certifications Held

The individual estates/mills/research unit of Lonsum have received various certifications, viz.,

−       Quality Management System (ISO 9001:2000) for Bah Lias Research by PT. LRQA Indonesia.
−       Quality Management System (ISO 9001:2000) for Tea Factory by PT. TUV International Indonesia.
−       Product Certification of Crumb Rubber Factory by PT. YOKA Indonesia, and
−       Environmental Management System (ISO 14001:2004) for Palm Oil Mills (except Tirta Agung), Crumb
        Rubber Factories, Tea Factories, Oil Palm and Rubber Plantations, Tea Plantation, Cocoa Plantation and
        Bulking Station by PT. TUV NORD Indonesia.
−       PROPER Assessment of Turangie POM by Ministry of Environment (KLH) and awarded Grade Blue
        (National Grade for Environmental Performance).


1.7         Organisation Information/Contact Person

All information pertaining to this certification assessment should be addressed to:

 Contact Person:                        Mr. Bambang Dwi Laksono
 Position:                              Head of Environment and CSR Coordination
 Organization name:                     PT PP London Sumatra Indonesia Tbk (Lonsum)
 Address:                               Jl. Ahmad Yani No.2, Medan
 Postal code, city:                     20111, Sumatra Utara
 Country:                               Indonesia
 Telephone Nr:                          +62 61 4532300
 Fax Nr:                                +62 61 4550421
 Email:                                 Bambang.Dwilaksono@londonsumatra.com
 Website                                www.londonsumatra.com


1.8         Time-Bound Plan for Other Management Units

Lonsum has drawn up a time-bound plan for its other oil palm/palm oil management units to achieve RSPO
certification (Table 5). The plan is deemed sufficiently challenging as required by RSPO. In 2005, Lonsum
carried out an internal assessment of its plantations for HCV areas using the 2003 HCV toolkit as part of an
EIA done. In 2006, Akesenta was appointed independent HCV assessor (with WWF Indonesia as observer)
for its proposed development areas in East Kalimantan and South Sumatra.

There is no palm oil mill in East Kalimantan yet, so certification there has to await the construction of one.

Table 5: Time- Bound Plan for RSPO Certification of Other Lonsum Oil Palm/Palm Oil Management Units

                                                                       Annual Output
                                                                                              Proposed Time
    No            Mill                       Location                  CPO          PKO
                                                                                              for certification
                                                                     (tonnes)     (tonnes)

    1      Tirta Agung           Musi Banyuasin, Sumatra Selatan       8,107          -       December 2010
    2      Gunung Bais           Musi Rawas, Sumatra Selatan          10,180          -       December 2011
    3      Arta Kencana          Lahat, Sumatra Selatan               10,174          -       December 2012
    4      Belani Elok           Musi Rawas, Sumatra Selatan          51,973          -       December 2013
    5      Sei Lakitan           Musi Rawas, Sumatra Selatan          67,730          -       December 2014
    6      Terawas               Musi Rawas, Sumatra Selatan          21,166          -       December 2015
1.9      Areas of Plantations

Table 6: Area details of 12 estates for this certification (Data as at September 2008)

                                                                      Area Summary (ha)
      Estate                  Location                  Total        Under Oil  Mature            Immature
                                                                       Palm
              Kabupaten Langkat, Sumatra
Turangie                                              3,156.45       2,851.66        2851.66         -
              Utara
              Kabupaten Langkat, Sumatra
Bungara                                               2,777.48       2,587.82        2587.82         -
              Utara
              Kabupaten Langkat, Sumatra
Pulo Rambong                                          3,098.47       2,849.95        2849.95         -
              Utara
              Kabupaten Deli Serdang,
Sungai Merah                                          1,854.46       1,769.20        1,764.20       5.00
              Sumatra Utara
              Kabupaten Deli Serdang,
Begerpang                                             5,724.16       5,112.33        5,112.33        -
              Sumatra Utara
              Kabupaten Simalungun,
Bah Lias                                              4,052.16       3,658.59        2,258.99     1,399.60
              Sumatra Utara
              Kabupaten Batubara,
Dolok                                                 3,190.79       3,067.42        2,689.15      378.27
              Sumatra Utara
              Kabupaten Simalungun,
Bah Bulian                                            1,246.46        625.20             625.20      -
              Sumatra Utara
              Kabupaten Serdang
Si Bulan                                              1,240.83        529.51             529.51      -
              Berdagai, Sumatra Utara
Rambong       Kabupaten Serdang
                                                      5,275.12       4,825.70        3,305.50     1,520.20
Sialang       Berdagai, Sumatra Utara
              Kabupaten Asahan, Sumatra
Gunung Melayu                                         4,988.69       4,936.45        4,901.45      35.00
              Utara
              Kabupaten Labuhan Batu,
Sei Rumbiya                                           5,882.14       1,619.66        1,619.66        -
              Sumatra Utara

The unplanted areas may have been allocated other uses, e.g., rubber (in Si Bulan and Sei Rumbiya), housing
and HCV areas.
1.10     Approximate tonnages certified

All the FFB processed by the 4 mills are produced internally, i.e., no purchased crop. The outputs of the mills
are shown in Table 7.

Table 7: Mill Outputs in 2007.

                                                                                Outputs in 2007
          Mill                            Location                               (tonne/year)
                                                                        CPO        PKO          PK

Turangies                 Kabupaten Langkat, Sumatra Utara             50,148          -           13,236
Begerpang                 Kabupaten Deli Serdang, Sumatra Utara        53,236        2,772         13,484
Dolok                     Kabupaten Batubara, Sumatra Utara            31,211          -            7,960
Gunung Melayu             Kabupaten Asahan, Sumatra Utara              34,885          -            8,821
                              TOTAL                                   169,480        2,772          43,501



1.11     Date certificate issued and Scope of Certificate

The scope of certification covers palm oil and PKO production from the 4 POMs processing FFB from the 12
plantations. The certificate will be dated on approval of this Assessment Report by the RSPO Secretariat. An
example certificate is given in the Annex.


2.0      Assessment Process

2.1      Certification Body

TNI is a subsidiary of the German TÜV NORD Group. Our company is a market leader in Indonesia for
inspection, testing and certification services. We are offering not just high added-value services but also trust
and confidence in our certificates / reports. We satisfy not only our direct customers but also the other
stakeholders like regulators and affected society at large including NGOs through our competent auditors,
inspectors and analysts.

TNI, with its Headquarters in Germany, is a member of the International Accreditation Forum (IAF). It is
accredited by DAR (Deutscher Akkreditierungs Rat, a German Accreditation Body) and the Indonesian
Accreditation Committee (KAN).

Services provided by the Systems Certifications are Food Safety Management Systems (ISO 22000),
Information Security Management Systems (ISO 27001), Social Accountability (SA 8000), Food Hygiene
(HACCP), Medical Device Directive (MDD, ISO 13485), Occupational Health and Safety (OHSAS 18001),
Product Certification(: GS-Mark, CE-Mark, SNI Mark), Inspection for ISPS Code, Clean Development
Mechanism (CDM) Validation & Verification, British Retail Consortium (BRS Issue 4).
The office of TNI in Indonesia:

Branch office
Menara Bank Danamon 11th Floor Suite 1106
Jl. Prof. Dr.Satrio Kav. E4 No. 6
Jakarta 12950 – Indonesia
Tel : +6221 57992211
Fax : +6221 57992210

President Director: Mr. Robert Napitupulu
Email: robert@tuv-nord.com
Website : www.tuev-nord.de
          www.global-warming.de
          www.tuvit.de


2.2       Assessment Methodology

The certification assessment of Lonsum by the RSPO P & C was carried out from 15-18 September 2008 and
06-09, 14-15 and 17-18 October 2008.

The assessment was conducted 3 phase of each mill and company-owned plantations.

     Desk audit (document check) of the RSPO-required documents with the help of a customised checklist;
     Ground truthing. On-site inspection of what is going on – normal auditee activity like spraying, mill
      operation, EFB application, interviews with stakeholders, etc. – and assessing complaints and action
      taken.
     Proposing of corrective actions and discussion with the auditee for verification of the corrective action in
      Certification Body’s premises.

The summary public report of this assessment includes Corrective Action Requests.
2.2.1   Review of Documents

SPO submitted its documents in August 2008, and its management was reviewed through a checklist.

2.2.2   Onsite Inspections and Follow-Up Interviews

To ensure objectivity, information was collected randomly. Interviews were held with staff, workers and
some stakeholders.

The certification assessment was completed at 18 October 2008.

TNI conducted on-site interviews with SPO management staff and POM workers to verify certain information
and to resolve issues identified in the document review and SPO operation. The people interviewed and the
topics of the interviews are summarised in Table 8.

Table 8: Persons Interviewed and the topics discussed


    Persons Interviewed                                     Interview topics

Managers, Staff, Workers      -    General issues for RSPO certification assessment
                              -    Chemical stores
                              -    The SPO documentations and records
                              -    Environmental Policy
                              -    Quality, SM-K3 and Environmental Management System
                              -    Involved personnel and responsibilities
                              -    Justification for RSPO principles and criteria
                              -    Monitoring and measurement of environmental performance of waste
                                   water treatment plant
                              -    Identification of environmental aspects and impacts
                              -    Flora, fauna, ecology and biodiversity
                              -    Land and conversion planting
                              -    Socio economic impacts on the local population
                              -    Decreased paraquat use
                              -    Licenses, operation & maintenance authority and responsibility
                              -    Sanitation and hygiene of dormitories
                              -    Legal aspects related to SPO management
                              -    Water management
                              -    HCV identification
                              -    Replanting and handling of chemical packaging wastes
                              -    Zero burning
                              -    Mill operation including inspection of incoming FFB, FFB transport,
                                   road maintenance and workshops for heavy trucks, loaders, etc.
                              -    IPM (Integrated Pest Management)

Stakeholders, including       -    Environmental protection within the estates and mills, including the use
NGOs                               of pesticides, and waste and effluent management.
                              -    Biodiversity conservation within the estates and surroundings where
                                   impacted by the estate/mill operations.
                              -    Fairness of wages, overtime and piece-rate work.
                              -    Housing, sanitation, amenities and educational support.
                              -    Company approach to community development.
2.2.3   Resolution of Non-Compliances

In this assessment, 4 major nonconformities and 2 minor nonconformities, and some improvements were
identified, and the required corrective actions proposed. The SPO management is required to resolve or close
out the issues (whether by the recommended or any other actions) in the relevant time frames given. As of the
date of this report, corrective actions have been taken for all the nonconformities. The actions have been
reviewed by the Certification Body and deemed to be appropriate. Accordingly, the nonconformities are
considered closed.
Qualifications of the Lead Assessor and Assessment Team

 Lead Assessor  : Hasnop Putra
 No RSPO Requirements                                Qualification

 1    A minimum of post high school (post               S1 (Ir, Engineer) degree in mechanical
      secondary school) training in either               engineering from University of Jayabaya
      agriculture/forestry, environmental science        (1994-1997);
      or social science;                                A.Md (Ahli Madya) degree in mechanical
                                                         engineering from the Polytechnic of the
                                                         University of Indonesia (1988-1991);
                                                        CDM training in Essen, Germany (June 2008);
                                                        Training in Environmental Rules & Regulations
                                                         and Implementation by BAPEDAL (April 2000)
                                                        Practical Course on Environmental Management
                                                         System, Environmental Aspect and Impact
                                                         Assessment, Documentation Establishment and
                                                         Internal Audit by Japan Audit and Certification
                                                         (JACO) (December 1998)
                                                        Training in Environmental Management Law and
                                                         Environmental Policy by EX-CORPORATION -
                                                         BAPEDAL (December 1997)

 2    At least 5 years’ experience in an area of     −    Did certification of business management systems
      work relevant with the audit (e.g., palm oil       in PT. TÜV International Indonesia (TÜV
      management; agriculture, ecology; social           Rheinland Group) (February 2001 to May 2004),
      science);                                          PT. TÜV SUD PSB Certification (formerly PT.
                                                         PSB Certification) (May 2004 to November 2004)
                                                         and PT. TÜV NORD Indonesia (TÜV NORD
                                                         Group) (November 2004 till now).
                                                     − Qualified in auditing all sectors of Oil palm / palm
                                                         oil operations – plantations, mills and
                                                         manufacturers since 2001. Audited:
                                                      PT. PN 3 Persero Medan
                                                      PT. PN 4 Persero Medan
                                                      PT. PN 5 Persero Pekanbaru
                                                      PT. PN 13 Persero Kalimantan (oil palm
                                                         plantation and palm oil mill)
                                                      PT. Sampoerna Agro
                                                      (formerly PT. Selapan Jadi Jaya)
                                                      PT PP London Sumatra Indonesia, Tbk
                                                     − Auditing production of CPO into frying oil at
                                                         Wilmar Group
                                                      PT. Multi Nabati Asahan
                                                      PT. Multi Nabati Sulawesi
                                                      PT. Sinar Alam Permai – Kumai
                                                     - Auditing SA 8000 standard for textile and garment
                                                         industry, shoe and toy manufacturing since 2007.

 3    Training in the practical application of the   Training for Lead / Internal Assessor of Sustainable
      RSPO criteria, and RSPO Certification          Palm Oil by Indonesian Palm Oil Board and KAN
      System                                         (National Accreditation Committee) in March 2008 to
                                                     April 2008.
Lead Assessor    : Hasnop Putra
No RSPO Requirements                               Qualification
4   Completed ISO 9000/19011 lead auditor          − PE International - ISO 9000:2000 Series Auditor/
    course                                            Lead Auditor Training Course - Certificate LA
                                                      072, June 2001.
                                                   − PE International - ISO 14001:2004 IEMA
                                                      Advanced EMS Auditor Training Course -
                                                      Certificate IQR/EMS4/00102, England and
                                                      Wales, March 2001.

5    Supervised training in practical auditing     Extensive experience in sustainable management
     against the RSPO Criteria or similar          system certification in the oil palm /palm oil industry
     sustainability standard, with a minimum of    with more than 30 days’ experience in auditing
     15 days’ experience in past audits of         PT. PN 3 (all oil palm plantations and palm oil mills)
     different organizations                       PT. PN 4 (4 palm oil mills and 1 palm kernel mill)
                                                   PT. PN 5 (5 palm oil mills)
                                                   PT. PN 13 (7 palm oil mills)
                                                   PT. Sampoerna Agro (formerly Selapan Jaya) (5 oil
                                                   palm plantations and 4 palm oil mills)
                                                   PT PP London Sumatra Indonesia, Tbk (all oil palm
                                                   plantations palm oil mills in North Sumatra, South
                                                   Sumatra, East Kalimantan and South Sulawesi.




Qualifications of assessment team
No Person and Qualifications
1   Sudarmadji (Assessor)
    Electrical engineer qualified in environmental auditing with sustainability management system such as
    EMS. Completed Lead Auditor training for ISO 14001, ISO 9001 and CDM certification, and Lead
    Assessor / Internal Assessor training for certifying Sustainable Palm Oil by the Indonesian Palm Oil
    Board and KAN (National Accreditation Committee). Has audited palm oil manufacturers for ISO
    14001 for a total of 15 days. Also, knowledgeable in Occupational Health & Safety Management
    System as Lead Auditor.

2    Hariyadi (Technical Expert)
      PhD in agronomist and Specializing in socio-environmental aspects of agriculture. Has assisted in
     socio-environmental assessment and research in Green Giant NPK fertilizer effect on immature oil
     palm growth. Experienced in research of water and nutrient requirements of crops, irrigation and
     fertilization planning, seedling selection, pest and weed control management (IPM) and assessment of
     biodiversity. Has been involved in auditor training in oil palm plantations and mills against the EMS
     and RSPO Principles and Criteria. Completed EMS training for ISO 14001:2004 and has practical
     experience in assessing oil palm EFB and fertilizer packaging wastes for their impacts on the
     plantation environs and employee residential area.
    3      Ujang Sehabudin (Technical Expert)
           Agronomist with socio-economic knowledge. Participated as researcher in the Impact Study of Area
           Development Program and is a member of the Indonesian Agribusiness and Agro industry Community.
           Has assisted in socio-economic assessments over the past three years, such CSR assessment of oil palm
           companies. Also assisted in audits of oil palm plantations against ISO 14001:2004 and was involved in
           auditor training for oil palm plantations against the RSPO Principles and Criteria. Gained good
           experience from the design and identification of water resources in a farm area in West Java over the
           past 2 years.


2.4          Outline of Stakeholder Consultation and List of Stakeholders Contacted

The SPO management has a list of relevant stakeholders to its operations which it consults regularly. Before
conducting the assessment, the audit team went through the minutes of all the meetings to appraise itself of
the issues involved. Then the stakeholders were invited to discuss critical issues on community development,
including progress of the current community plan and the targets to be achieved. The topics raised were
maintenance of prayer houses (churches, mosques), roads, irrigation and drainage, and schools. In addition,
the company was asked to provide scholarships, welfare and decent dormitories for habitation around the
estates and mills. The discussion with the stakeholders was well organized. The audit team visited some of the
stakeholders to interview them on the SPO operation of the estates and mills.

The meeting discussions were properly recorded and the points raised are incorporated in the assessment
findings.


2.4.1        Stakeholders interviewed

    No     Stakeholders consulted                                           Remarks
     1     Kades Bah Lias                                                   Local community
     2     Kades Penggalian                                                 Local community
     3     LSM Topan – RI Tebing Tinggi                                     Local community
     4     PUK SPSI Si Bulan Estate                                         Workers’ Organization
     5     Adat Jawa (Pujakesuma)                                           Indigenous people
     6     Kapolsek Bandar Pulau                                            Police
     7     Dan Ramil Bandar Pulau                                           Local community
     8     Camat Bandar Pulau                                               Local community
     9     Kades Gunung Melayu                                              Local community
    10     LSM Pelita                                                       Local NGO
    11     PMS Merga Silima                                                 Local Community


2.4.2        Questions asked in interviews of stakeholders

        Were you aware of this RSPO certification assessment from the SPO management, which should have
         been available publicly and communicated to the stakeholders?
        What benefits do the local community expect from this SPO certification?
        Does the SPO management hold regular meetings to discuss community development?
        Has the SPO management a proper system to communicate with people living around the estates and
         mills?
        Does the SPO management respond well to complaints?
        Is there a priority system of grievances and complaints to be addressed by the Company?
        Are there any complaints on land acquisition by the Company?
        Have there been any environmental impacts caused by the SPO management?
        Are the conflicts solved satisfactorily?
        Is there a procedure for settling conflicts made known to the local community?
        Does the SPO management meet the people regularly to discuss community development?
      Do the workers receive a salary in line with government regulations?
      Is there a system to inform the local community of emergencies?


2.5         Dates for Next Surveillance Visit

The next surveillance visit will be one year from approval of this report by the RSPO.




3.0         Assessment Findings
3.1         Summary of Findings

As mentioned in Section 2.2, objective evidence was obtained in the certification assessment. Information was
sought for all the RSPO indicators for the 4 mills and 12 plantations, and the evidence then assessed for
compliance. The evidence for major and minor indicators of a criterion was aggregated to provide ‘overall’
findings as detailed in Section 3.2.

This assessment was made against the RSPO Principles and Criteria (Indonesian National Interpretation). There were 4
major and 2 minor non-conformities found and corrective actions were suggested for them. The SPO management
has already submitted an action plan to remedy all the non-conformities. TNI has reviewed the plan and the date
for its implementation and found them acceptable. Corrective action has already been taken for all the major
non-conformities. For the minor non-conformities, the corrective action will be assessed on the next surveillance
visit, failing which they will become major non-conformities to be closed out in 60 days.

Thus, it is recommended that Lonsum be approved as a producer of RSPO Certified Sustainable Palm Oil.

The assessment findings are given below by the individual criterion.

    Criterion 1.1
    Provide adequate information to other stakeholders on environmental, social and legal issues
    relevant with the RSPO Criteria, in the appropriate languages and forms to allow for effective
    participation in decision-making.
    The SPO management has a procedure for communicating with stakeholders. However, the procedure merely
    requests the mill and plantation managers to communicate with the local communities and stakeholders. This is
    deemed insufficient satisfaction of the criterion, e.g., no minutes of meetings with stakeholders were
    available, suggesting a lack in transparency on the issues relevant to stakeholders.

    The management of palm oil mill(s) and palm oil plantation(s) are required to provide full information to
    stakeholders on environmental, social and legal issues relevant to the RSPO principles and criteria. Thus, all the
    required information should at all times be readily available. However, in some mills and estates, some information
    could not be got. Thus, there is still insufficient transparency in the system. A major nonconformity was issued. See
    Non-Conformity Report T01.10/08.



    Criterion 1.2
    Management documents are publicly available, except where these are prevented by commercial
    confidentiality or where disclosure of information would result in negative environmental or social outcomes
    No information was available on the conditions of land use to the stakeholders

    Some regulations and / or follow up from stakeholder meetings on environmental and social issues were not
    communicated to the public or stakeholders. The system information is insufficient to ensure effective
    communication with stakeholders and the public. In some mills and estates, there were no documentation of the
    social activities, social program, health and safety plans. A major nonconformity was issued. See Non Conformity
    Report T02.10/08.
Criterion 2.1
There is compliance with all applicable local, national and ratified international laws and
regulations
The SPO management keeps copies of all the laws and regulations applicable to its operation. The mill
and plantation managers have the responsibility to ensure compliance with them, including renewing
licenses and permits. Updating the list of laws / regulations is the responsibility of the Environment
Manager and his team.



Criterion 2.2
The right to use the land can be demonstrated and is not legitimately contested by local
communities with demonstrable rights
Lonsum land is clearly demarcated by boundary stones as well as in photographs with the GPS coordinates
superimposed. The General Affairs and Legal departments have the responsibility to resolve all land conflicts. For
the moment, there is no land dispute. The managers (of mills and plantations) have all registered their lands
under the HGU.

Boundary stone with estate name




Criterion 2.3
Use of land for oil palm does not diminish the legal rights or customary rights of other users,
without their free, prior and informed consent
As found in the assessment of SPO management, there are no customary rights of other users. There are
no land acquisition and open sharing land with the people living in the estates. SPO management ensures
that all the land is planted with only the permitted crops. Some estates provide recreation facilities for
their staff, e,g,, children’s playground and fishing ponds.



Criterion 3.1
There is an implemented management plan that aims to achieve long term economic and financial
viability
SPO management has a long-term business plan for production of FFB. The business plan is based on
document “North Sumatra Replanting Program in 2009 - 2013. Replanting program, including targets for
FFB production performance”. The replanting program and targets appear well understood by all the
managers interviewed.
Criterion 4.1
Operating Procedures are appropriately documented and consistently implemented and monitored
The Environmental Department has prepared a manual on Standard Operating Procedures (SOP) that
incorporates the best practices for mills and plantations. Most of the SOPs have been integrated in the
Quality and Environmental management systems. More than 10 SOPs for mills and plantations have been
established. The following are the procedures:

    a. SOP for oil palm (nursery management, land preparation, planting, field upkeep, harvesting,
         waste management, HCV assessment, emergency preparedness and response, and environmental
         monitoring).
    b. SOP for Palm Oil Mill (boiler operation and upkeep, power generation, water treatment, land
         application, electrical system, quality (inc monitoring of CPO parameters), dispatch and
         laboratory).
The manual includes SOPs, working instructions and forms as for Environmental System, Health &
Safety implementation. The manual is frequently updated. The SOPs include monitoring FFA and
moisture in CPO before customer delivery. The monitoring records are safely kept in a laboratory cabinet
with the appropriate identification.



Criterion 4.2
Practices to maintain soil fertility at, or, where possible, to improve soil fertility to a level that
ensures optimal and sustained yield
Bah Lias Research & Development makes annual fertilizer recommendations from soil testing and foliar
analysis. Soil sampling is done every three years, and foliar analysis yearly. The planting of beneficial
weeds is discussed in Criterion 4.5.

SPO management practices crop protection by growing legume cover crops (LCC) to protect the soil from
erosion, fertilizing and practising weed control. The LCC grown are Mucuna brachteata, Pueraria
javanica, Calopogonium caeruleum. To reduce the application of inorganic fertilizer, EFB (empty fruit
bunches) are applied as mulch. There is a recommendation for some estates not to fertilize, and the
document is sighted.




Criterion 4.3
Practices to minimise and control erosion and degradation of soils
The SPO management implements practices to control soil erosion and degradation. In replanting,
legume covers are quickly established, terracing/platforms built, fronds stacked, sedimentation pits dug
and the old crop chipped and windrowed.

Erosion monitoring plots have been constructed to study erosion and relate it to the soil type, slope and
ground cover. They are started at replanting and maintained until the oil palm canopy closes over. It was
found that planting legume covers can totally stop erosion.




Figure-1: Erosion Monitoring Plot at Bah Bulian Estate
Criterion 4.4
Practices to maintain the quality and availability of surface and ground water
The SPO management provides potable water in storage tanks to mills, plantations and staff housing.
Industrial water is abstracted from rivers and for household/domestic use from various water sources
(HCV 4).
The SPO management policy is to maintain the water sources as HCV 4 and protect the existing riparian
strips by leaving the rubber trees in converting to planting oil palm.
Some of the water sources have been around for over a hundred years, testimony to the SPO
Management’s social and environmental responsibility.
However, there are some lapses. There are no data on daily consumption. Most of the water is used to
clean the mills, drinking and bathing and for the staff quarters. A minor nonconformity was issued. See
Non-Conformity Report T03.10/08.




Figure-2: Water source and water storage tank for domestic consumption at Turangie Estate



Criterion 4.5
Pests, diseases, weeds and invasively-introduced species are effectively managed using appropriate
Integrated Pest Management (IPM) Techniques
The common pests of oil palm are insects and rats. SPO management employs a pest engineer to regularly
monitor the pest levels in the estates. IPM and natural control were seen in all the plantations. Pesticide use
is recorded by the plantation managers.
The management plants beneficial plants to ward of insect pests and reduce the need for chemical
control. The plants are Turnera subulata (bunga pukul delapan), Antigonon leptopus (air mata
pengantin), Euphorbia heterophylla (patik emas), Agerotum conyzoides (babadotan) and Oxalis
borreliari (belimbingan).




Figure-3: Insects attacking on oil palm leaf.




Figure-4: Turnera subulata planted on road side.
Criterion 4.6
Agrochemicals are used in a way that does not endanger health or the environment. There is no prophylactic
use of pesticides, except in specific situations identified in National Best Practice guidelines. Where
agrochemicals are used that are categorized by the world health organization as Types 1 A or 1 B, or are
listed by the Stockholm or Rotterdam Conventions, growers are actively seeking to identify alternatives and
this is documented
Information is available on the hazardous agrochemicals used, i.e., those classified by WHO as Types 1A and
1B. The Environmental Manager and R&D Department have committed to reducing the use of hazardous
agrochemicals with implementation of the environmental management system in beginning 2007.
Agrochemicals used since 2007 have to be approved by Managing Director. There is an electronic record
of the pesticides used. Approval for use must first be sought from the Environmental Manager and Research
Manager, and applied according to the Standard Operation Procedures and MSDS. Only on rare occasions are
‘unusual’ chemicals used, but care is taken to ensure that no undue danger is posed.

Staff/workers handling pesticides are sent for regular health checks. Medical records are kept for every
individual. Every plantation has a clinic visited by a doctor weekly.

Staff/workers involved with pesticides are required to wear PPE during their work. There is a booklet -
Guide to the Safe Use of Pesticides – that contains the toxicity of various pesticides, safe storage
precautions, solution preparation and application, pesticide waste disposal, first aid, protective clothes
and a list of the pesticides allowed for use.

The SPO Management has constructed standard warehouses for temporary storage of B3 (toxic and
hazardous materials) wastes with approval from the Ministry of Environment. All B3 wastes stored are
recorded.

The sprayers are required to go for yearly medical checks and be properly trained in the use of pesticides.
However, the dangers of using pesticides have not been adequately communicated to the workers
dealing with them. Therefore, a minor nonconformity was issued. See Non Conformity Report T04.10/08.




Figure 5: Herbicide storage. They have been recorded.




Figure 6: Warehouse for temporary storage of B3 wastes at Bah Lias Estate
Criterion 4.7
An Occupational Health and Safety Plan is documented, effectively communicated and implemented
The SPO management has a safety, health and environment policy under the responsibility of the safety engineer (SM-
P2K3). The written policy is available in the mills and plantations; and communicated to all subcontractors. The safety
engineer is tasked to carry out daily monitoring and inspection of all facilities and mill operation for likely problems. The
records of these inspections are kept in the safety engineer’s room, easily traced and retrievable. Any incident in the mills
involving violation of a working procedure or other instructions is investigated and the findings presented to the mill
manager in the safety meeting.

Some estates have assessed the risks of their activities using form P-07 - Identification of Risk. The method
of assessment is defined and applied for environmental aspects and impacts. Hazards and risks in their
activities are documented in Form P-05, along with the proposed means to tackle them, targets and programs.
However, in one of the mills, no identification of hazards and risk assessment had been carried out nor the daily
monitoring required in the safety program. Thus, a major nonconformity was issued for the lack of an Occupational
Health and Safety Plan. See NCR T05.10/08



Criterion 4.8
All staff, workers ,smallholders and contractors are appropriately trained
The mill and plantation managers annually identify the need for safety training by their workers, especially pesticide
sprayers. Some contractors are trained in some safety aspects by the safety engineer. The smallholders receive training in
emergency procedures and for spaying pesticides and chemical handling. The emergency training includes the
response to fire / explosion as well as safety in the handling and use pesticides. All staff / workers are assessed
regularly on their need for training. All the training records are kept.



Criterion 5.1
Aspects of plantation and mill management, including replanting, that have environmental impacts are identified
and plans to mitigate the negative impacts and to promote the positive ones are made, implemented and
monitored to demonstrate continuous improvement
Lonsum has been certified with ISO 14001 for its environmental management system, environmental aspects and
impacts. The certification reviewed the negative and beneficial impacts by the company. The company was last
reviewed in August 2008. However, the assessment report (RKL/RPL) and environmental social aspects and impacts of
crops and estate (EMS-F01) were not presented to the certification body, and also the 6-monthly environmental
assessment report (RKL/RPL period July’07 – December’07). Accordingly, a minor non-conformity was issued
against this criterion. See NCR T06.10/08.
Criterion 5.2
The status of rare, threatened or endangered species and high conservation value habitats, if any, that exist in
the plantation or that could be affected by plantation or mill management, shall be identified and their
conservation taken into account in management plans and operations
                                             The SPO management has prepared a list of the flora and fauna on
                                             its land in its “Flora and Fauna Identification Book”. The HCV areas
                                             have been determined to be 4.1, 4.2 and 6. The HCV areas at
                                             Bungara, Begerpang, Gunung Melayu, Sungai Merah estates are
                                             well demarcated with signboards.
                                             Figure 7: High Conservation Value (HCV) area in Bungara estate.
                                             Identification of the HCV areas is documented in “Laporan Hasil
                                             Identifikasi Flora & Fauna” and regularly updated by the
                                             Environment-Technology Transfer Department.

                                              The Environmental Policy (evidenced in an internal
                                              memorandum by the Managing Director for Operations) is to
maintain the HCV areas.

Training for awareness and understanding of HCV areas was conducted internally in 2006. The same year,
CSIRO was co-opted to develop a model for managing the riparian strips. In 2008, WWF Indonesia was
invited to train the estate managers on identification of Flora and Fauna. The maps of HCV were formally
issued by BLRS (Bah Lias Research Station) in 2008, complete with the types of HCVs and GPS points.
Despite Lonsum cultivating its plantations for >100 years, the fact that some HCV areas are still found is
testimony to the management’s concern for the environment.




Figure 7:Riparian strip at Begerpang Estate              Figure 8: Riparian strip at Bungara Estate




Figure 9: Protected plant (Nephentes sp.) at Sei Rumbiya estate

The SPO Management also monitors the river water quality periodically based on National Regulation No.
82/2001 for river water, to ensure that its operation is not affecting the river.
Criterion 5.3
Waste is reduced, recycled, re-used and disposed of in an environmentally and socially responsible manner
The environment has been assessed and a study done on the activities likely to impact on it, including the
disposal of wastes. Used pesticide containers are stored in a permanent area sheltered from rain. Prior to
storage, the containers are crushed to prevent re-use. Metal scraps are sold for recycling. EFB is applied as
mulch in the fields. Liquid wastes are discharged to the waste treatment plant where the BOD, COD and pH
are regularly monitored to ensure that they are under control by the standards of the Ministry of Environmental
No. 51/1995.



Criterion 5.4
Efficiency of energy use and use of renewable energy is maximised
The SPO management is committed to using renewable energy. The shell is burnt to produce steam for the turbine
generator, allowing the diesel generator to be put on stand-by only for emergencies.



Criterion 5.5
Use of fire for waste disposal and for preparing land for replanting is avoided except in specific situations as
identified in the Asean guidelines or other regional best practices
The SPO management has a zero burning policy. The audit team has confirmed that the policy is implemented
throughout the group. The wastes from the mills and plantations are treated properly within the premises and not
dumped outside.




Figure 10: Heavy fire equipment with portable water tank at Bagerpang Estate


Criterion 5.6
Plans to reduce pollution and emissions, including greenhouse gases are developed, implemented and
monitored
The prevention of pollution is a part of the SPO Management Policies on health & safety; and the
environment. Gaseous emissions are monitored for their parameters to be within the legal limits. Every 6 months,
the boiler and vehicle (for transport of FFB) emissions are tested by an independent laboratory. The results
are given to the Environmental manager to take whatever action is deemed necessary. A copy of the results is
given to the local Environmental Agency (Bapedalda) and included in the Group RKL-RPL (Environment
Management and Monitoring) Semester Report.
Criterion 6.1
Aspects of plantation and mill management including replanting that have social impacts are identified in a
participatory way and plans to mitigate the negative impacts and promote the positive ones are made,
implemented and monitored to demonstrate continuous improvement
The SPO management keeps track of all the issues involving the local communities. The social issues are investigated
for their environmental aspects and impacts, and the results reported to the Environmental Manager. The report is also
distributed to concerned parties, such as the Environmental Impact-Controlling Agency, every 6 months.



Criterion 6.2
There are open and transparent methods for communication and consultation between growers and/or miller,
local communities and other affected or interested parties
The SPO management has had ISO 14001:2004 certification since 2008, and the requirements have been adapted to
documenting the environmental management system. There are regular meetings between the growers, millers and
local communities, and the SPO management has drawn up a procedure for external communication, and a list of
interested stakeholders, including the local communities, NGOs, indigenous people, organization workers and the
police. Some of the stakeholders were contacted for this audit. The estate manager and the respective environmental
and CSR coordination staff are responsible for communication between the estate and respective other parties
concerned. The community development manager is responsible to ensure that the community program is run
effectively and also communication and consultation with the stakeholders.



Criterion 6.3
There is a mutually agreed and documented system for dealing with complaints and grievances, which is
implemented and accepted by all parties
The SPO management has established a complaints, grievance and dispute procedure, integrated in the
communication procedure for Environmental Management System. This procedure has been communicated to all
stakeholders at the mills and plantations, and positive responses from the stakeholders seen. Communication and
consultation with the stakeholders are done regularly. During the visit, the audit team did not hear of any
complaint, grievance or dispute with the auditee.



Criterion 6.4
Any negotiations concerning compensation for loss of legal or customary rights are dealt with through a
documented system that enables indigenous people, local communities and other stakeholders to express their
views through their own representative institutions
There has been no claim for loss of rights or compensation. However, there is a procedure to address such problems
and it has been communicated to the stakeholders.



Criterion 6.5
Pay and conditions for employees of contractors always meet at least legal or industry minimum standards
and are sufficient to provide decent living wages
There is a detailed list of pay and working conditions for all the employees by their level and rank. The SPO
management follows the relevant legislations on working days / holidays, working time, minimum wage by region
and employee insurance. The salary received by the workers is a decent living wage.
Criterion 6.6
The employer respects the right of all personnel to form and join trade unions of their choice and to bargain
collectively. Where the right to freedom of association and collective bargaining are restricted under law, the
employer facilitates parallel means of independent and free association and bargaining for all such personnel
The workers have established a labour union in accordance with national legislation, UU No. 13 2003. The union is
empowered to bargain with the company over the working conditions – wages, time of work, overtime,
etc.



Criterion 6.7
Children are not employed or exploited. Work by children is acceptable on family farms, under adult
supervisions and when not interfering with education programmes. Children are not exposed to hazardous
working conditions
All the workers (for mills and estates) are employed with their personal particulars taken, including age. Browsing the
particulars, no worker was <16 years old – the legal minimum age to work.



Criterion 6.8
Any form of discrimination based on race, caste, national origin, religion, disability, gender, sexual orientation,
union membership, political affiliation, or age is prohibited
The SPO management is an equal opportunity employer – all employees can be promoted to the limits of their
excellence. Opportunities for promotion are constantly being developed, and announced by the Head of the
General Affairs Department



Criterion 6.9
A policy to prevent sexual harassment and all other forms of violence against women and to protect their
reproductive rights is developed and applied
There is a policy on the proprietary rights of women, drawn up by the General Affairs Department and
communicated and explained to all the workers and staff.



Criterion 6.10
Growers and mills deal fairly and transparently with smallholders and other local businesses
Lonsum does not purchase external FFB, so has no dealings with smallholders. The only things ‘purchased’ from
outside are services for repair and maintenance of equipment which are usually under contract, pre-agreed by both
parties.



Criterion 6.11
Growers and miller contribute to local sustainable development wherever appropriate
The SPO management helps the local communities in offering free services – building / repairing buildings (schools,
places of worship, community halls) which is documented in the Government and Community Relation
Annual Report distributed to each estate and mill. Regular meetings are held with the local communities to
ascertain their needs, and to see if the company can help. Free medical treatment is also available at the clinics.
Criteria 7.1 to 7.7
Not applicable.
There has no new planting since November 2005.



Criterion 8.1
Growers and millers are regularly monitored and reviewed of their activities and develop and implement
action plans that allow demonstrable continuous improvement in key operations
The SPO management continually seeks to improve on its FFB delivery to the mills. Boiler and vehicular gaseous
emissions are regularly monitored for exceeding the parameter limits. There is a policy to reduce the use of dangerous
agrochemicals like paraquat. Used pesticide containers are properly handled and stored in the chemical house before
final disposal.
3.2     Details of Non-Conformances, Auditor’s recommendations for Corrective Actions and Auditee
        Action taken

                                         Non Conformity Report – T01.10/08
Date issued             16.10.2008                                  NCR issued by  : Hasnop Putra
Location                Estates and Mills                           Discussed with : Managers and staff
RSPO – Criterion 1.1: Oil palm growers and millers provide adequate information to other stakeholders on
environmental, social and legal issues relevant with RSPO criteria.
Description of Finding / Recommended Corrective Action

In some mills and estates, some information deemed necessary by the RSPO P & C could not be got.

Recommended corrective action:

The management of palm oil mill(s) and palm oil plantation(s) should have readily available all the information for
stakeholders on environmental, social and legal issues as required by the RSPO principles and criteria.

Classification               Major                     Minor                  Improvement                 None
Corrective Action Taken:                        Date of implementation: 04 November 2008 – continuously
     1. Estates and mills managers have written up the minutes of all stakeholder meetings and filed them properly
     2. The Head of Environment and CSR Coordination is reviewing the procedure for communication (including
          transparency) and will propose changes to the Operations Director.
     3. The Head of Environment and CSR Coordination will then communicate the new procedure to the estate and
          mill managers.
     4. The estates and mills have now all the required information for dispensing to any interested stakeholder.


Auditee’s signature:

Auditor’s Comments:
The minutes of all stakeholder meetings are now available and also all the relevant documents required by the RSPO
P & C. Further improvement will be made to the procedure for disseminating information but this is over and above
the corrective action required. The nonconformity is therefore closed.

Conclusions:
   To check in next verification visit                              Appropriate action taken
   Appropriate action not taken                                     Corrective action in compliance with the
                                                                    requirements

Date of verification: 20.11.2008                                Auditor’s signature:
                                         Non Conformity Report – T02.10/08
Date of issue            16.10.2008                         NCR issued by : Hasnop Putra
Location                 Estates and Mills                  Discussed with : Managers and staff
RSPO – Criterion 1.2 : Management documents are publicly available, except where they are prevented by commercial
confidentiality or where disclosure of information would result in negative environmental or social of comers.
Description of Finding / Recommended Corrective Action

In some mills, there were no documentation of the social activities, social program, health and safety plans.

Recommended corrective action:

The documents should be available at the mill(s) and estate(s), and not kept in the head office. Even simple, non-
controversial documents like documentation of social activities, social program, Health and Safety plan and continuous
improvements records were not available, and should be made available.
Classification              Major                    Minor                    Improvement              None
Corrective Action Taken:                       Date of implementation: 04 November 2008 and continuously

A list was compiled of the documents to be kept on site in consultation with internal and external people. Copies of the
documents have been made and are now available. Where the original documents are required, they are now kept on site.


Auditee’s signature:
Auditor’s Comments :
The corrective action taken has been verified and accepted. The nonconformity is closed.

Conclusions:
   To check in next verification visit                                  Appropriate action taken
   Appropriate action not taken                                         Corrective action in compliance with the
                                                                        requirements


Date of verification: 20.11.2008                                    Auditor signature:
                                          Non Conformity Report – T03.10/08
Date of issue          06.10.2008                            NCR issued by : Hasnop Putra
Location               Palm Oil Mill                         Discussed with : Managers and staff
RSPO – Criterion 4.4 : Practices to maintain the quality and availability of surface and ground water
Description of Finding / Recommended Corrective Action

There was no monitoring of the water consumption, and no usage statistics worked out e.g., water use per tonne FFB
processed.

Recommended corrective action:

The monitoring should be started with installation of the required equipment.

Classification             Major                       Minor                     Improvement         None
Corrective Action to be Taken:                              Date of implementation: 04 November 2008 – continuously
     1. Water meters to be installed – for all mills and specific areas to derive usage statistics.
     2. Mill managers to derive regular usage statistics, e.g., water use/tonne FFB processed.


Auditee’s signature:

Auditor’s Comments :
The action taken will be checked at the next surveillance visit.

Conclusions:
   To check in next verification visit                                   Appropriate action taken
   Appropriate action not taken                                          Corrective action in compliance   with the
                                                                         requirements


Date of verification: 20.11.2008                                    Auditor sign:
                                          Non Conformity Report – T04.10/08
Date of issue            14.10.2008                  NCR issued by : Hasnop Putra
Location                 Palm Oil Mill               Discussed with : Managers and staff
RSPO – Criterion 4.6 : Pests, diseases, weeds and invasively introduced species are effectively managed using
appropriate Integrated Pest Management (IPM) techniques.
Description of Finding / Recommended Corrective Action

The dangers of using pesticides are not adequately communicated to the workers dealing with them.

Recommended corrective action:

The workers should be informed of the dangers of using pesticides – verbally in talks as well as with printed literature
in the local language(s).

Classification           Major                          Minor                 Improvement           None
Corrective Action Taken:                                   Date of implementation: 15 November 2008

The workers have been informed of the dangers of pesticide use. Pamphlets on the subject are being prepared.


Auditee’s signature:

Auditor’s Comments :
With the low education level of the workers, the dangers of pesticide use must be frequently reiterated until they
become familiar with the subject. The nonconformity is closed but the diligence in carrying out the corrective action
will be assessed in the next surveillance visit.

Conclusions:
   To check in next verification visit.                               Appropriate action taken
   Appropriate action not taken                                       Corrective action in compliance with the
                                                                      requirements


Date of verification: 20.11.2008                                  Auditor signature:
                                         Non Conformity Report – T05.10/08
Date of issue          14.10.2008                  NCR issued by : Hasnop Putra
Location               Palm Oil Mills              Discussed with : Managers and staff
RSPO – Criterion 4.7 : An occupational health and safety plan is documented and implemented.
Description of Finding / Recommended Corrective Action

-   Health and safety measures are poorly implemented;
-   No identification and assessment in mills for some of the activities;
-   Not all workers provided with PPE. No ear plugs for workers in noisy areas, welders not provided with dark
    glasses;
-   Accident-prone areas not identified;
-   Neither proper OHS plan nor monitoring of health / safety records.

Recommended corrective action:

A concerted effort should be made to implement fully all the health and safety measures, identify accident-prone areas
and keep proper health / safety records. All the workers should be provided the appropriate PPE for their work.

Classification                Major                     Minor                  Improvement              None
Corrective Action Taken:                           Date of implementation: 04 November 2008 – continuously
1. Mill managers have identified and assessed the risks in mill activities
2. Mill managers and Health and Safety Coordinator have listed all the PPE’s required. They will explain the
     necessity for wearing PPE and enforce the wearing
3. The mills have been mapped for their potentially risky areas. Evacuation areas will be created and the employees
     taught the precautions to be taken for safety
4. Mill managers and the Health and Safety Coordinator have drawn up an OSH programme and will monitor its
     implementation.


Auditee’s signature:

Auditor’s Comments :
The corrective action recommended is considered to have been adopted. The nonconformity is therefore closed.

Conclusions:
   To check in next verification visit                               Appropriate action taken
   Appropriate action not taken
                                                                     Corrective action in compliance with the
                                                                     requirements


Date of verification: 20.11.2008                                Auditor signature:
                                          Non Conformity Report – T06.10/08
Date of issue           09.10.2008                        NCR issued by : Hasnop Putra
Location                Estate(s) and Mill(s)             Discussed with : Managers and staff
RSPO – Criterion 5.1 : Aspects of plantation and mill management, including replanting, that have environmental
impacts are identified, and plans to mitigate the negative impacts and promote the positive ones are made,
implemented and monitored, to demonstrate continuous improvement.
Description of Finding / Recommended Corrective Action

-    It is claimed that environmental monitoring is carried out every 6 months. However, none of the reports were
     available.
−     In the six-monthly environmental monitoring, there seems no assessment of replanting for its environmental and
      social impacts.

Recommended corrective action:

The environmental monitoring reports should be available and obtainable on request. The reports should have more
details on the various plantation activities, such as replanting, on the environmental and social impacts.

Classification                   Major                    Minor                    Improvement               None
Corrective Action Taken:                            Date of implementation: 20 January 2009 - continuously
Back issues of the reports are now available at all the mills and estates. Future reports will include more details on the
impacts by the estate activities, and evaluation of their environmental and social impacts. Copies of the report will be
distributed to the mills / estates.


Auditee’s signature:


Auditor’s Comments :
The action taken is deemed sufficient remedy. The nonconformity is closed.

Conclusions:
   To check in next verification visit.                                Appropriate action taken
   Appropriate action not taken
                                                                       Corrective action in compliance with the
                                                                       requirements

Date of verification: 20.11.2008
                                                                            Auditor signature:
Table 9: Table of Conformity Finding to RSPO Criteria

Audit type                   Certification Assessment

 Criterion      Audited       Complied       Major NC   Minor NC   Total NC   Status
1.1                              No              1                    1       Closed
1.2                              No              1                    1       Closed
2.1                              Yes
2.2                              Yes
2.3                              Yes
3.1                              Yes
4.1                              Yes
4.2                              Yes
4.3                              Yes
4.4                              No                        1          1       Closed
4.5                              No
4.6                              Yes                       1          1       Closed
4.7                              No              1                    1       Closed
4.8                              Yes
5.1                              No              1                    1       Closed
5.2                              Yes
5.3                              Yes
5.4                              Yes
5.5                              Yes
5.6                              Yes
6.1                              Yes
6.2                              Yes
6.3                              Yes
6.4                              Yes
6.5                              Yes
6.6                              Yes
6.7                              Yes
6.8                              Yes
6.9                              Yes
6.10                             Yes
6.11                             Yes
7.1 N/A                           -
7.2 N/A                           -
7.3 N/A                           -
7.4 N/A                           -
7.4 N/A                           -
7.5 N/A                           -
7.6 N/A                           -
7.7 N/A                           -
8.1                              Yes
Total of Nonconformities                         4         2          6
Recommendations for improvement at Gunung Mulia POM during site +visit are

-   The standard operating practice (SOP) for stacking chemicals should have clear instructions for the user.
-   The sulphuric acid storage should have clearer labels for easier identification.
-   Drums filled with hazardous wastes should have proper labels.
-   The MSDS of DOWEX (a product of DOW Chemical) should be translated into Bahasa so that the storekeeper can
    understand.
-   There is no SOP or working instruction for the fire engine operation in engine room.
-   Used oil drums are randomly placed – they should be removed to the store for hazardous wastes.
-   The actual working days should be used to calculate the basic salary for the daily-rated staff.
-   The communications procedure is insufficient to resolve conflicts, complaints and grievances. It should be
    strengthened.
-   There is a lack of maintenance for the infrastructure. E.g., access roads to mills.


and the recommendations adopted by auditee

-   The mill managers are to improve their store management for chemicals and oils, e.g., separate chemicals and oils,
    store oils by their different characteristics, have a Material Safety Data Sheet (MSDS) and procedure for fire engine
    operation, store used oils as B3 waste.
-   The working days of daily-rated workers will be recorded to calculate their basic pay.
-   The communications procedure will be reviewed and strengthened.
-   Better maintenance of infrastructure, especially access roads to mills and the areas around.
-   Draw up a procedure for fire.
-   Make an MSDS for DOWEX and distribute to mills.
3.3       Noteworthy Positive Components

The audit made some positive observations.

Waste, Safety and Health Management:

-     All mills and estates have safety guidelines in accordance SM-K3 (Management System of Occupational Safety
      and Health) standard for their operations as well as safety monitoring.

-     Turangie POM was awarded Grade Blue for excellence in its environmental performance.

-     There have been zero accidents from 2007 to mid-2008. Pesticide containers were not reused as containers, but
      punctured and disposed of for recycling.

Zero Burning:

The ban on burning has been communicated to all employees.

Protection of Plantations Land:

There is a readiness to tackle fires in the plantations. There are fire facilities and a fire brigade on constant stand-by with
water trucks.

Protection for HCV areas

High priority is accorded to protection of all HCV areas in the plantations, and all the stakeholders have been so informed.
The protection is clearly required in the EIA done and 2003 HCV toolkit. The HCV areas were identified by independent
operators – Aksenta and WWF Indonesia.

Organic wastes and land application:

EFB are used to mulch the palms, in the process improving the soil. Palm oil mill effluent is also applied to the land after
treatment to reduce its BOD and COD.

Awareness and commitments:

All employees are aware of the requirements by the RSPO P & C. The company is run to ISO 14001:2004 standard and
in accordance to RSPO requirements.

ISO 14001 implementation:

A high priority is set on conservation and protection of the environment. Thus, the company is constantly monitoring the
environmental impacts of its activities and sending its staff for training to increase their environmental awareness. Targets
have been set for boiler and diesel engine operations.

CDM Program:

There is currently an effort to reduce the use of diesel generators and use self-produced methane instead.
3.4      Issues Raised by Stakeholders and Findings Assessment Team

The audit team did not receive any comments from the stakeholders on social and environmental impacts by the mills and
plantations. Interviews were therefore used to probe the stakeholders on various issues. The issues raised by the
stakeholders were then posed to the company for its response. The questions and responses are given below.

The photo shows an interview with a local community to obtain feedback on the company operations.




Table 10: Issues raised by stakeholders


  No              Question                          Stakeholder feedback                 SPO management comments

  1 Are you aware            of   RSPO RSPO is little heard of by the stakeholders.   Meetings will be held regularly to
    certification?                                                                    explain RSPO. The meetings will be
                                                                                      minute and the action taken monitored.
  2 What will be the benefits to the No one seems to know, although some of the The company will explain to them the
    local community if the company stakeholders have received donations in kind benefits of certification.
    obtains RSPO certification?      and cash from the company – repairs to
                                     infrastructure, free medical consultation, etc.
  3 Does the company meet regularly There are meetings to learn about the More regular meetings will be held.
    with the local communities to community development every 6 months..
    discuss community development?

  4 Does the company have means of Stakeholders are informed of activity taken Any revision to the procedure will be
    quick communication with the by the company according to the RSPO P & based on feedback on the meetings
    local communities?             C. We are free to voice any complaint with stakeholders.
                                   through the grievance procedure.

                                                                                      No action need to provide evidence for
                                                                                      correction, corrective and even,
                                                                                      preventive actions which were taken, if
                                                                                      there was a need for revisions through
                                                                                      local community meeting informed.
  5 Are there any land disputes over No, the company acquired the land a long time None
    the plantations?                 ago, and there are no current conflicts.

  6 Has the company operations had So long as the company acts responsibly, and       We try to conserve the environment as
    any impact on the environment? regularly monitors its operations, there           much as possible by monitoring our
                                   should be no negative imparts. There have          impacts on it - pollution, noise, stench,
                                   been no water pollution, soil contamination        dust, etc.
                                   and extermination of flora and fauna.
 No               Question                       Stakeholder feedback                 SPO management comments

  7 Are you aware of any procedure toThe company regularly tells us about this. It We have drawn up a list of relevant
    settle conflicts with the company? has been very informative.                  stakeholders to inform about this.


  8 Does the company regularly inviteThe company regularly invites us to The company wants to discuss about
    you to discuss issues in communitymeetings by calling our cell phones. It has the aid required.
    development?                      been a good benefactor to us.

  9 Are the workers receiving a legalYes. There are no complaints on salary, days We will always comply with the
    salary?                          worked, holidays and overtime.               labour regulations.

 10 Are you aware of any emergencyWe have been trained to use fire None.
    procedures by the company?    extinguishers and have had emergency drills
                                  and learnt evacuation procedures.



3.5       Auditee’s acknowledgement of Internal Responsibility

Please sign on the certification assessment and confirm the acceptance of the assessment report contents including
assessment findings. The company Managing Director of Operations and Environment Manager will sign for the
certification assessment report. Complete signatures are shown in section 3.6.



3.6       Formal Sign-Off of Assessment Findings

                                                      Signed for and on behalf of
                                                 PT PP London Sumatra Indonesia, Tbk




      Date 01.12.2008     - Managing Director of Operation                       : Bryan Dryer
                          - Head of Environment and CSR Coordination             : Bambang Dwi Laksono


                                                   Signed for and on behalf of
                                     PT. TÜV NORD Indonesia – System Certification Management



      Date 01.12.2008     - Lead Auditor                       : Hasnop Putra
                Annex - A




Draft RSPO Certificate for RSPO Compliance
     Annex - B




The certification assessment plan

				
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