Roundtable on Sustainable Palm Oil...FTSB (Felda Technoplant Sdn. Bhd), a division of FELDA, which...

Roundtable on Sustainable Palm Oil

Public Summary Report Report no. : 18501693

Certification assessment against the

RSPO Principles & Criteria Malaysian National Interpretation (NI)

Including smallholder NI year 2010

FELDA (Federal Land Development Authority)

Adela Palm Oil Mill &

Lok Heng Palm Oil Mill, Kota Tinggi, Johor, Malaysia

Report prepared by: Dian S. Soeminta

Malaysian office: TUV Rheinland Malaysia Sdn. Bhd.

No. 26 – 32, Jalan Perindustrian USJ 1/6, Taman Perindustrian USJ 1,

47600 Subang Jaya, Selangor Darul Ehsan, Malaysia.

Tel: +6 03 8024 2400 Fax: +6 03 8023 1505

www.tuv.com

RSPO Certification Assessment Report

- Adela Palm Oil Mill & Lok Heng Palm Oil Mill, FELDA -

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TABLE OF CONTENTS

1.0 SCOPE OF CERTIFICATION ASSESSMENT 3

1.1 National Interpretation Used 3 1.2 Type of Assessment 3 1.3 Location and Maps 3 1.4 Description of Supply Base 6 1.5 Dates of Plantings and Replanting Cycles 7 1.6 Other Achievements and Certifications Held 8 1.7 Organisational Information / Contact Person 8 1.8 Description of Company History 8 1.9 Time Bound Plan for Other Management Units 9 1.10 Area of Plantation (Total, Planted and Mature) 11 1.11 Approximate Tonnages Certified 12 1.12 Recommendation for Certification 13 1.13 Date of Certificate Issued and Scope of Certificate 13

2.0 ASSESSMENT PROCESS 13

2.1 Certification Body 13 2.2 Qualifications of Lead Assessor and Assessment Team 13 2.3 Assessment Methodology 15 2.4 Stakeholder Consultation and Stakeholders Contacted 19 2.5 Date of Next Surveillance Visit 19

3.0 ASSESSMENT FINDINGS 19

3.1 Summary of Findings 19 3.2 Identified Non-conformances, Corrective Actions Taken and Auditors Conclusions 40 3.3 Noteworthy Positive Components 47 3.4 Issues Raised by Stakeholders and Findings Pertaining to Issues 48 3.5 Acknowledgements of Internal Responsibility and Formal Sign-Off by Client 54

APPENDICES 55

Appendix 1: Details of Certificate 55 Appendix 2: Certification Audit Plan 57 Appendix 3: List of Abbreviations 63 Appendix 4: List of Stakeholders Interviewed and Contacted 64 Appendix 5: Observations and Opportunities for Improvement 65



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1.0 SCOPE OF CERTIFICATION ASSESSMENT

1.1 National Interpretation Used

The operations of the palm oil mills and their supply base of FFB were assessed against the RSPO Principles & Criteria Malaysian National Interpretation (NI) including approved smallholder NI (year 2010). The smallholder schemes were assessed against the national guidance for scheme smallholders.

1.2 Type of Assessment

This certification assessment covers two of Felda’s palm oil mills, Adela mill and Lok Heng mill located at Kota Tinggi, Johor Malaysia, and their supply base, which consists of 5 smallholder schemes and one commercially owned estate (Kledang 2 estate) supplying to Adela mill and 4 smallholder schemes supplying to Lok Heng mill.

1.3 Location and Maps

Table 1: GPS locations for all estates and mills included in certification assessment

Name of mill / es-tate

Location GPS locations

Latitude Longitude

Adela Palm Oil Mill P.O. Box 73, Bandar Penawar, Kota Tinggi, Johor. 81930

0133’06.9”N 10411’10.9”E

Kledang 2 Estate Kota Tinggi, Johor, Malaysia 0128’54.2”N 10410’52.2”E

Sungai Mas Kota Tinggi, Johor, Malaysia 0136’42.3”N 10409’04.7”E

Tunggal Kota Tinggi, Johor, Malaysia 0126’37.3”N 10410’03.6”E

Adela Kota Tinggi, Johor, Malaysia 0133’40.5”N 10411’04.2”E

Sening Kota Tinggi, Johor, Malaysia 0129’56.4”N 10408’06.5”E

Kledang Kota Tinggi, Johor, Malaysia 0134’57.8”N 10409’04.7”E

Lok Heng Palm Oil Mill

P.O. Box 55, 81907 Kota Ting-gi, Johor

1o 41’15’’N 104o 07’ 19’’E

Lok Heng Timur Kota Tinggi, Johor, Malaysia 0141’58.6”N 10406’38.7”E

Lok Heng Barat Kota Tinggi, Johor, Malaysia 0142’03.7”N 10406’36.2”E

Lok Heng Selatan Kota Tinggi, Johor, Malaysia 0143’49.5”N 10405’52.4”E

Papan Timur Kota Tinggi, Johor, Malaysia 0136’45.6”N 10419’09.1”E



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Figure 1: Location of Felda Adela Complex & Lok Heng Complex in Peninsular Malaysia

Adela and Lok Heng Complexes location



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Figure 2: Locations of FELDA Adela and Lok Heng estates within the state of Johor, Malaysia

Adela

Sening

Kledang 2

Kledang

Papan Timur

Sungai Mas

Lok Heng Timur

Lok Heng Barat

Tunggal

Lok Heng Selatan

Air Tawar 2



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1.4 Description of Supply Base

There are 6 types of FFB supplier types for FELDA Palm Industries Sdn. Bhd. (FPISB), consisting of the follow-ing: 1. FELDA schemes, which is made up of smallholder schemes with dependents (settlers) 2. FPSB (Felda Plantation Sdn. Bhd) consisting of FELDA’s owned commercial oil palm plantation. 3. FTSB (Felda Technoplant Sdn. Bhd), a division of FELDA, which manages replanting and ongoing man-

agement of plantations owned by FELDA scheme smallholders 4. Other estates: Commercial oil palm plantations belonging to independent outgrowers 5. Independent outgrowers. 6. FELDA settlers, whom choose to be independent. They carry out replanting and manage their estates by

themselves and sell the FFB to FELDA mills. The FFB supplier types included in the scope of the assessment include only FELDA schemes, FPSB (FFB supplied by Kledang 2 estate, a commercial estate supplying to Adela Mill) and FTSB. Data on FFB supply information as well as CPO and PK production is as per the tables below. Table 2(a): FFB Supply Information for Adela Mill and Lok Heng Mill for year 2010

FFB Contributors

FFB supplied to Adela Mill

FFB supplied to Lok Heng Mill

MT % MT %

FELDA schemes 11,135.44 3.72 22,698.41 25.36

FPSB 20,010.65 6.68 - -

FTSB 111,942.01 37.37 40,131.35 44.83

Dealers 126,851.51 42.35 26,665 29.79

Other estates 20,861.37 6.96 - -

Independent outgrow-ers

6,583.58 2.20 11.63 0.01

Independant FELDA smallholders

2,171.83 0.73 - -

Total (received) 299,556.39 100 89,506.39 100

Total (processed) 269,020* - 63,280 -

* The shortfall of 30,536 tonnes between the FFB processed and the FFB received at Adela mill is due to diver-sion of FBB to other mills during peak times and Adela mill’s capacity is insufficient to cope with all the FFB received from its estates.

** The shortfall of 26,226.30 tonnes between the FFB processed and FFB received at Lok Heng mill is due to the mill not being in operation from January to May 2010. During this period, all incoming FFB’s are accept-ed (to meet contractual obligation with suppliers) and then transferred/diverted to other mills for processing. Lok Heng mill’s operations resumed in June 2010.

Table 2(b): Total CPO and PK production from Adela mill and Lok Heng mill in year 2010

Mill OER (%) CPO Production

(MT)KER (%)

PK Production (MT)

Adela Mill 20.09 54,040.31 5.40 14520.37

Lok Heng Mill 19.69 12,462.74 5.09 3223.70



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1.5 Dates of Plantings and Replanting Cycles

The company follows a replanting cycle of 25 years. Information on the dates of plantings is as per the table below. Table 3(a): Age and year of plantings of company estate and smallholder schemes supplying to Adela

Mill Oil palm planted area at each es-

tate (ha)

Age & year of Plantings (ha)Total planted

area (ha) 2007- 2011

2002 -2006

1997-2001

1992-1996

1987- 1991

Kledang 2 estate 148.19 140.37 - - 879.62 1,168.54 Sungai Mas (Scheme)

- 2,714.80 - - - 2,714.80

Adela (Scheme) - 1,662.89 - - - 1,662.89 Tunggal (Scheme)

1,816.51 - - - 527.48 2,343.99

Sening (Scheme) 2,234.17 - - - - 2,234.17 Kledang (Scheme)

1,261.83 - - - 276.86 1,538.69

Total 5,460.7 4,518.06 - - 1,683.96 11,663.72

Table 3(b). : Age and year of plantings of smallholder schemes supplying to Lok Heng Mill Oil palm planted area at each es-

tate (Ha)

Age & year of Plantings (ha)Total planted

area (ha) 2007- 2011

2002 -2006

1997-2001

1992-1996

1987- 1991

Lok Heng Barat (Scheme)

1,275.61 - - - 677.61 1,953.22

Lok Heng Timur (Scheme)

1,157.10 - - - 829.27 1,986.37

Lok Heng Selatan (Scheme)

1,768.44 - - - - 1,768.44

Papan Timur (Scheme)

- 2,176.30 - - - 2,176.30

Total 4,201.15 2,176.30 - - 1,506.88 7,884.33

Table 4: Planned and actual oil palm replanting activities for Felda Adela & Felda Lok Heng Complexes

Total planned re-planting area for each estate (ha)

Total planned area (ha)

Year/ha Actual total area replant-

ed (ha) 2011 2012 2013 2014 2015

Kledang 2 estate 879.62 - - 324.85 554.77 - -Sungai Mas (Scheme) - - - - - - -Adela (Scheme)

- - - - - - -Tunggal (Scheme) 527.48 - 527.48 - - - -Sening (Scheme) - - - - - - -Kledang (Scheme) 276.86 - 276.86 - - - -Lok Heng Barat (Scheme) 677.61 316.53 361.08 - - - -Lok Heng Timur (Scheme) 829.70 - 829.70 - - - -



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Lok Heng Selatan (Scheme) - - - - - - -Papan Timur (Scheme) - - - - - -

1.6 Other Achievements and Certifications Held

Table 5: Details of other certifications or awards held by Adela Complex & Lok Heng Complex

Name of mill / estate

Certification Standard / Award achieved

Certification Body /

AwarderDate Achieved

Adela Mill ISO 9001:2008 EMS ISO 14001:2004 OSHAS 18001:2007 Safety Award

SIRIM QAS Malaysian So-ciety for OSH

27 January 2006 09 July 2004 18 October 2004 2007

Lok Heng Mill ISO 9001:2008 EMS ISO 14001:2004 OSHAS 18001:2007 Safety Award

SIRIM QAS

Malaysian So-ciety for OSH

15 October 2006 19 June 2004 01 September 2004 2007

1.7 Organizational Information / Contact Person

Contacts details of the company are as follows:

1.8 Description of Company History

The Federal Land Development Authority or FELDA is a Malaysian government agency which manages the reset-tlement of rural poor into newly developed areas. Its primary focus is on opening smallholder farms growing cash crops, such as oil palm. FELDA was established on 1 July 1956 under the Land Development Ordinance 1956. Its functions as allocated under the Act (Amendment 1991) are as follows: To carry out and implement development projects To develop, facilitate and implement development, management and economic, social, agricultural, settle-ment, industrial and commercial services as well as other related activities in areas where FELDA has been granted the authority to implement land development projects or in areas owned by FELDA and its companies

Company Name: FELDA (Adela and Lok Heng Mill)

Address: Adela Palm Oil Mill, P.O. Box 73, 81930, Bandar Penawar, Kota Tinggi, Johor, Malaysia

Lok Heng Palm Oil Mill, P.O. Box 55, 81907, Kota Tinggi, Johor, Malaysia

Head office: FELDA Agriculture Sdn. Bhd. 7th floor, Balai FELDA, Jl Gurney 1, Kuala Lumpur, 54000, Malaysia

Contact Person:

Mr. K. Ilangovan

Telephone/fax: + 603-26987772/ +603-26930018

Email: [email protected]

Website: www.felda.net.my



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To implement activities which can help modernize the agricultural sector in areas where FELDA has been granted the administrative authority especially in activities which are related to production, processing and the marketing of agriculture and livestock product To assist, guide, advice, manage and coordinate social, settlement, agriculture, industrial and commercial ac-tivities in FELDA areas. FELDA owns 70 palm oil mills and the world's largest plantation land area, with 811,140 hectares (2,004,400 FELDA settlers are selected from the rural poor. Each settler is given 0.1 hectares of land for a house plot meas-uring 20m x 50m, which includes land area to grow vegetables and fruit trees. They are also given a plot of at least 10 acres (4 ha) in size for agricultural cultivation, and these plots are part of a larger estate area, usually be-tween 1,700 and 2,000ha in size. Depending on the scheme, there is one representative for each scheme con-sisting of 15 and 25 plots. These scheme representatives hold regular meetings with FELDA management to dis-cuss estate management issues. The early settlers grew rubber and cocoa and it was around year 1965 that oil palm was given to the settlers. FELDA schemes consist of 3 phases, where the first phase consists of a co-operative scheme as a mechanism for settlers to learn how to farm, and management of estates is still primarily by FELDA (managed by a subsidiary, FELDA Technoplant Sdn. Bhd.). In the second phase, a plot of land is given to each settler to cultivate, and in the third phase, settlers are given the land title to that plot and hence, become independant. However, the settlers cannot sell their land without permission from FELDA or the federal government. Settlers are responsible for pay-ing back loans and the cost of building their houses and individual holdings and interests accrued and as they pay back the loans, they are given land titles for their planted area. 80% of all settlers have now paid back their loans and either have land title or land title is in progress. Although there has been no intake of settlers into any scheme since 1990, there are currently 103,156 settlers and their families who are living in the 275 villages created by Felda. More than half a million people are placed in FELDA villages occupying a total area of 42,173 ha. Over the past 15 years, FELDA’s business has radically transformed towards non-settled plantation schemes and other commercial venture which are not related to land resettlement, including marketing, transportation and security services. However, FELDA’s settler population and oil palm plantation management is still a crucial component of FELDA. There are currently 4 subsidiary companies under FELDA directly involved in oil palm production: Felda Techno Plant Sdn. Bhd. – responsible for management, replanting and ongoing management of FELDA

settler schemes planted with oil palm Felda Palm Industries – responsible for management of palm oil mills. Felda Plantations Sdn. Bhd. – responsible for management of commercially run oil palm plantations. Felda Agricultural Services. Sdn. Bhd. - station for research and development purposes.

This certification assessment covers two of Felda’s palm oil mills, Adela mill and Lok Heng mill located at Kota Tinggi, Johor Malaysia, and their supply base, which consists of 5 smallholder schemes and one commercially owned estate supplying to Adela mill and 5 smallholder schemes supplying to Lok Heng mill.

1.9 Time Bound Plan for Other Management Units

The time frame laid out below is considered to be both challenging and realistic. The company will be using the experience of this main assessment to ensure that the other management units conform to the RSPO Princi-ples & Criteria. The audit team is satisfied that the company conforms to the RSPO requirements for partial certification as laid out in Clause 4.2.4 of the RSPO Certification Systems document.

1. FELDA is a member of RSPO, A time bound plan for achieving certification of all relevant entities as seen on the table.

2. There is no significant land conflict, since FELDA has not developed any new plantings since 1990. No com-ment regarding land conflicts were received from public consultation and audit.

3. No labour disputes noted during the audit and none were raised during public consultation. 4. Most relevant laws have been fulfilled by the company even though during the audit, there were some incon-

sistencies found in compliance with local government regulations but FELDA has committed to fulfill these re-quirements and this has been verified through all available document

FELDA website (updated 10 August 2011). Profile: Establishment and Goals from http://www.felda.net.my



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Table 6: Time bound plan for certification under FELDA

Name of Holding under FELDA scheme

RSPO Certification pro-gress

Time bound plan for certification

Kota Gelanggi Certified 2009

Lepar Utara 6 Certified 2009

Jengka 21 Audited 2011 2010



Lepar Utara 4 Audited 2011 2010

Seroja (J 18) Audited 2011 2010

Padang Piol Audited 2011 2010

Adela Main assessment 2011

Lok Heng Main assessment 2011

Semenchu Main assessment 2011

Waha Main assessment 2011

B. Kepayang planned 2011

Bukit Mendi planned 2011

Kemasul planned 2011

Tementi planned 2011

Palong Timor planned 2012

Triang planned 2012

Belitong planned 2012

Bukit Besar planned 2012

Kahang planned 2012

Kulai planned 2012

Nitar planned 2012

Penggeli planned 2013

Baiduri Ayu planned 2013

Embara Budi planned 2013

Kembara Sakti planned 2013

Lancang Kemudi planned 2013

Bukit Sagu planned 2013

Lepar Hilir planned 2013

Neram planned 2013

Pancing planned 2013

M. Puspita planned 2014

N. Permata planned 2014

Tersang planned 2014

Besout planned 2014

Sg Tengi planned 2014

Trolak planned 2014

Keratong 2 planned 2014





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Selancar 2A planned 2015

Selancar 2B planned 2015

Pasoh planned 2015

Serting planned 2015

Serting Hilir planned 2015

Kerau planned 2015

Mempaga planned 2015

Maokil planned 2015

Selendang planned 2015

Tenggaroh planned 2015

T.Timor planned 2015

Chalok planned 2016

J. Barat planned 2016

J. Baru planned 2016

Kertih planned 2016

F. Harapan planned 2016

H.Badai planned 2016

J.Bistari planned 2016

Kalabakan planned 2016

Umas planned 2016

Sampadi planned 2017

Aring planned 2017

Aring B planned 2017

Ciku planned 2017

Kechau planned 2017

Kechau B planned 2017

Kemahang planned 2017

Cini 2 planned 2017

Cini 3 planned 2017

1.10 Area of Plantation (Total, Planted and Mature)

Table 7: Oil Palm Planted Area Summary, FFB Production and Average yield/ha.

Estate Name Total area

(ha)

Oil Palm Planted area

(ha)

Mature (Production)

area (ha)

Immature (Non-production)

area (ha)

FFB Production

(tonnes)

Average yield/ ha

(2010)

Adela Complex

Kledang 2 es-tate

1,168.54 1,168.54 1,020.35 140.73 23,100.37 19.76

Sungai Mas (Scheme)

2,892.45 2,714.80 2,714.80 - 46,721.94 17.28

Adela (Scheme)

1,808.80 1,662.89 1,662.89 - 30,428.35 20.47

Tunggal (Scheme)

2,551.49 2,343.99 1,816.51 527.48 - -

Sening (Scheme)

2,652.65 2,234.17 2234.17 - 40,062.71 21.01



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Kledang (Scheme) 1,908.69 1,538.69 276.86 1,261.83 2,368.74 17.47

Lok Heng Complex

Lok Heng Barat (Scheme) 2,107.94 1,953.22 677.61 1,275.61 7,674.08 15.12 Lok Heng Ti-mur (Scheme) 2,438.37 1,986.37 829.27 1,157.10 2,660.50 12.59 Lok Heng Se-latan (Scheme) 1,871.44 1,768.44 - 1,768.44 - -Papan Timur (Scheme) 2,447.64 2,176.30 2,176.30 - 31,750.23 19.18

Table 8: Land use data for Felda Adela and Felda Lok Heng Complexes

Estate Name Total area

(ha)

Rubber

Planted Area (ha)

Oil Palm Planted Area

(ha)

HCV/

Potential HCV

areas* (ha)

Land used for other purposes (ha)

Housing Other Land

Adela Complex Kledang 2 es-tate 1,168.54 - 1,168.54 - - -

Sungai Mas (Scheme) 2,892.45 - 2,714.80 - 177.65 -

Adela (Scheme) 1,808.80 - 1,662.89 - 145.91 -

Tunggal (Scheme) 2,551.49 - 2343.99 - 207.5 -

Sening (Scheme) 2,652.65 - 2,234.17 - 418.48 -

Kledang (Scheme) 1,908.69 - 1,538.69 - 370.00 -

Lok Heng Complex Lok Heng Barat (Scheme)

2,107.94 - 1,953.22 - 154.72 -

Lok Heng Ti-mur (Scheme) 2,438.78 - 1,986.37 - 452.41 -

Lok Heng Se-latan (Scheme)

1,871.44 - 1,768.44 - 103.00 -

Papan Timur (Scheme) 2,447.64 108.05 2,176.30 - 163.29 -

1.11 Approximate Tonnages Certified

As explained in Table 2(a), there was diversion of crop from both mills during the year of 2010. As such the CPO and PK production in year 2010 does not accurately reflect the maximum CPO and PK tonnages that can be produced from each mill.

The approximate tonnages certified are therefore calculated using the total FFB supply from company owned estates (FPSB) and smallholder schemes (FELDA schemes and FTSB) as per Table 2(a) and using the OER and KER rates stated in Table 2(b). The calculated tonnage certified are as follows:

Crude Palm Oil (CPO) : Adela Mill 28,746 MT; Lok Heng Mill 12,371 MT Palm Kernel (PK) : Adela Mill 7726 MT; Lok Heng Mill 3198 MT



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1.12 Recommendation for Certification

Adela and Lok Heng Mill under FELDA have established and maintain an effective system to ensure compli-

ance with the RSPO principles and criteria. The audit team has confirmed through the audit process that the

company’s practices complies with, adequately maintains and implements the requirements of RSPO Princi-

ples and Criteria Malaysian National Interpretation, including smallholder NI, year 2010.

TUV Rheinland Malaysia recommends that two mills and their supply base be approved as a producer of RSPO

Certified Sustainable Palm Oil.

1.13 Date of Certificates Issued and Scope of Certificates

The scope of the certificates for each management unit (mill and its supply base) covers production of palm oil

from each respective palm oil mill under FELDA i.e.

1. Adela Palm Oil Mill and its supply base (estate and smallholder schemes) as follows:

1. FPSB Kledang 02 (Estate)

2. Felda Sg. Mas (Smallholder scheme)

3. Felda Adela (Smallholder scheme)

4. Felda Tunggal ( Smallholder scheme)

5. Felda Sening (Smallholder scheme)

6. Felda Kledang (Smallholder scheme)

2. Lok Heng Palm Oil Mill and its supply base (smallholder schemes) as follows:

1. Felda Lok Heng Barat (Smallholder scheme)

2. Felda Lok Heng Timur (Smallholder scheme)

3. Felda Lok Heng Selatan (Smallholder scheme)

4. Felda Papan Timur (Smallholder scheme)

The date of certificates issued is 16 April 2012 to 15 April 2017. Further details of the certificates are as per Appendix 1.

2.0 ASSESSMENT PROCESS

2.1 Certification Body TUV Rheinland Malaysia Sdn. Bhd. is member of Group TÜV Rheinland Group, a global leader in independent testing and assessment services. The TÜV Rheinland Group was established in 1872 with offices located in over 360 locations in 62 countries on all five continents. TUV Rheinland Malaysia 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 Project Validations. TUV Rheinland Malaysia’s office is located in Subang Jaya.

2.2 Qualifications of Lead Assessor and Assessment Team

Name Position Qualifications / Experience

Dian S. Lead Au- Education: Bachelors Degree in Forestry - Bogor Agriculture Institute. Indone-



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Soeminta ditor sia, (1990 to 1995). Trainings attended: ISO 9001:2000 lead assessor course 1996 - Neville Clark; ISO 14001 lead assessor course - PE International; OSHAS: 2007 training, Sus-tainable Forest Management (SFM) - Forest Stewardship Council (FSC) system training; Chain of Custody training for FSC System. Working experience: Professional forester since 1995 to 2000. Lead Auditor for Forest Stewardship Council (FSC), Sustainable Forest Certification (SFC) and Chain of Custody (COC) Certification, Lead auditor for Environmental Manage-ment System (EMS) and Quality Management System (QMS) audits. Conducted sustainable forest management certification audits on FSC and Indonesian Eco-label Institute (Lembaga Ecolabel Indonesia - LEI) standards for 20 companies, 50 COC FSC/LEI audits, and EMS and QMS audits at more than hundred com-panies for TUV Rheinland Indonesia. Instrumental in the preparation of TUV Rheinland Indonesia for Sustainable Forest Management Certification System and TUV Rheinland Malaysia for RSPO Certification. Member of Task Force for Indonesian National Interpretation (Guidance on scheme smallholder RSPO cer-tification). Developed TUV Rheinland RSPO Gap Assessment Checklist and re-port template.

Fadli Auditor

Education: Bachelor of Anthropology, Department of Anthropology - University of Indonesia, Jakarta. Trainings attended: Sustainable Natural Production Forest Management (Pengelolaan Hutan Alam Produksi Lestari - PHAPL) assessor training (May 2003); Forest Plantation Management (August 2003) training - Indonesian Eco-label Institute (LEI), Forest Management and Agriculture Auditor Training; ISO 9001:2008, ISO 14000:2004, OHSAS 18001:2007 trainings - Smart-wood/Rainforest Alliance; SA8000 training - SA International; RSPO Lead Audi-tor Training -Indonesian Palm Oil Commissions. Working experience: Experienced as lecturer for D3 Tourism program, Univer-sity of Indonesia. Social Aspect Auditor of PT. TUV International Indonesia for Sustainable Forest Management and RSPO Principles & Criteria. Researcher of Stakeholder Mapping With CSR Indonesia.

Irpan Ka-dir

Auditor

Education: Bachelor of Agriculture, Department of Social and Economic of Agriculture, Bogor Institute of Agriculture.

Trainings attended: Sustainable Natural Production Forest Management (Pengelolaan Hutan Alam Produksi Lestari - PHAPL) assessor training (May 2003); Forest Plantation Management (August 2003) training - Indonesian Ecolabel Institute (LEI). Working experience: Experienced as external auditor of PT. TUV International Indonesia for RSPO Principles & Criteria since year 2009 and Sustainable Forest Management auditor since year 2003. Has experience in conducting assess-ments of performance and social mapping for mining and forestry companies. He also has experience as a senior social researcher since year 2000 to 2005 and is currently a CSR consultant and trainer at A + CSR Indonesia since year 2006.

Carol Ng Auditor

Education: Bsc. Biotechnology & Bsc. Environmental Management - Monash University. Trainings attended: RSPO Malaysian National Interpretation Requirements and Certification – SIRIM; Implementation of RSPO Principles & Criteria - QA Plus; RSPO Stepwise Support Programme; 2nd Biodiversity Seminar – RSPO; Certifi-cation Body Biodiversity Forum & Workshop – RSPO; Environmental Quality Act 1974 (DOE) and ISO9001:2008 QMS Conversion Requirements (TUV Rhein-land). Working experience: Experience in implementing sustainable practices in Sime Darby plantations to comply with RSPO requirements, performing RSPO internal audits and implementing sustainability projects. Prepared training materials and conducted several RSPO requirements trainings and workshops to plantation management teams (2008).

Azizan bin Za-karia

Auditor Education: Master of Engineering (Environmental) - Universiti Putra Malaysia, B. Eng in Chemical Engineering - University of Wales, Swansea Trainings attended: ISO9001: Lead Auditor Training/Course, Internal Auditor



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Training of IMS (ISO9001, ISO14001 & OHSAS18001) Working experience: 10 years’ experience in chemical management and poly-urethane production and internal auditing for process compliance with integrated Environmental Management System (EMS) and OSH Management System.

2.3 Assessment Methodology The certification assessment was conducted between 21 to 26 March 2011 as per the assessment program be-low. The assessment was carried out in accordance with TUV Rheinland Malaysia’s RSPO audit procedure as well as the RSPO Certification Systems document. During 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. Due to the location and proximity of the estates, combined with common management systems, it was possible to carry out both field and document assessments of all estates and the mill within the time frame without com-promising the integrity of the assessment in anyway. All 1 estate, 10 smallholders groups and 2 mills were visited and the assessment team carried out field and document assessments of compliance to all the RSPO principles and criteria. 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 actions for all identified non conformities raised to the cer-tification body 15 days after the closing meeting. Verification and documentation of closure of major non-conformances was conducted 60 days 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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Main Assessment Agenda.

Date

Location/ Main sites

Main activities

21.03.2001 08.30-12.00 Kledang office Open stakeholder consultation13.30- 18.30 Adela Palm Oil

Mill

Principle 1, Criteria 1.1, and 1.2 6 Interviews of workers & observations about mechanism for commu-nication and method for receiving incoming information and how to respond to requested information. Principle 4, Principle 5, Principle 6 and Principle 8 Plant tour to the palm oil mill (POM) to checking the implementa-

tion of personal protective equipment (PPE), occupational health & safety (OHS) and waste handling.

Interview worker, contractors and suppliers Checking of actual condition of chemical storage and hazardous

waste storage Principle 2 and Criteria 2.1 about law and regulation. Interview personnel in charge of identify and checking compli-

ance to all relevant legal and other requirements such as those associated with environment, labour, OHS, and mill regulations.

Checking related document procedures and records. Principle 4, Criteria 4.1, 4.7 Interview personnel (operational head) associated with the SOP

and implementation and also monitoring activities. Interview personnel responsible for OHS and First Aid monitor-

ing Interview personnel responsible for training of OHS and First

Aid Interview doctor responsible for conducting regular health

checks for operators Checking of documents related to above Principle 5, Criteria 5.2 (HCV areas) Palm oil mill effluent Visit to Lebam river, HCV 4.2



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22.03.2011 08.00 -18.00

Kledang 02 Estate Principle 1, Criteria 1.1, and 1.2 Interview of workers & observation about mechanism for communication and method for receiving incoming information and how to respond requested information. Principle 2, Criteria 2.1 Interview personnel in charge of identify and checking

compliance to all relevant legal and other requirements such as those associated with environment, labor, OHS, and mill regulations.

Checking related document procedures and records Principle 3 Company’s annual budget and forecast Principle 5, Criteria 5.2 (HCV areas) Principle 4, Principle 6, and Principle 8 Chemical stores, Storage, MSDS leaflets, Herbicide mixing ar-eas, PPE, Security. Field inspections, Herbicide application programme, Harvest-ing site. Manuring operations, SOP’s, soil maps, land preparation, ground cover, Integrated Pest Management (IPM), first aid training and first aid kits on-site. Soil erosion, field observation of all operations. Workers interviews, OSH, sexual harassment policy imple-mentation, workers pay and contracts, checks of evidence of child labour, replanting site and checks of evidence of zero burning. HCV identification, management plans, environmental impact assessment and implementation. Current and future management of river riparian buffer zones, Water Management. Water courses. Water monitoring Road maintenance, Run off Social amenities. Social Impact Assessments. Local contribution made, employee opportunities, social im-pacts, complaints procedure.

23.03.2011 08.00-12.00

Sungai Mas Principle 3 Company’s annual budget and forecast Principle 5, Criteria 5.2 (HCV areas) Palm oil mill effluent Principle 4, Principle 6, and Principle 8 Chemical stores, Storage, MSDS leaflets, Herbicide mixing ar-eas, PPE, Security. Field inspections, Herbicide application programme, Harvest-ing site. Manuring operations, SOP’s, soil maps, land preparation, ground cover, Integrated Pest Management (IPM), first aid training and first aid kits on-site. Soil erosion, field observation of all operations. Workers interviews, OSH, sexual harassment policy imple-mentation, workers pay and contracts, checks of evidence of child labour, replanting site and checks of evidence of zero burning. HCV identification, management plans, environmental impact assessment and implementation. Current and future management of river riparian buffer zones, Water Management. Water courses. Water monitoring Road maintenance, Run off Social amenities. Social Impact Assessments. Local contribution made, employee opportunities, social im-pacts, complaints procedure.



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13.00-18.00 Tunggal Principle 1, Criteria 1.1, and 1.2

Interview of workers & observation about mechanism for communication and method for receiving incoming information and how to respond requested information. Principle 2 and Criteria 2.1 about law and regulation. Interviews of personnel in charge of identify and checking compliance to all relevant legal and other requirements such as those associated with environment, labour, OHS, and mill regulations. Checking related document procedures and records Principle 3 Company’s annual budget and forecast

24.03.2011 08.00-18.00

Lok Heng Barat & Lok Heng Timur

Principle 4, Principle 6, and Principle 8 Chemical stores, Storage, MSDS leaflets, Herbicide mixing ar-eas, PPE, Security. Field inspections, Herbicide application programme, Harvest-ing site. Manuring operations, SOP’s, soil maps, land preparation, ground cover, Integrated Pest Management (IPM), first aid training and first aid kits on-site. Soil erosion, field observation of all operations. Workers interviews, OSH, sexual harassment policy imple-mentation, workers pay and contracts, checks of evidence of child labour, replanting site and checks of evidence of zero burning. HCV identification, management plans, environmental impact assessment and implementation. Current and future management of river riparian buffer zones,

25.03.2011 08.00-17.00

Papan Timur Principle 1, Criteria 1.1, and 1.2 Interview of workers & observation about mechanism for communication and method for receiving incoming information and how to respond requested information. Principle 2 and Criteria 2.1 about law and regulation. Interview personnel in charge of identify and checking

compliance to all relevant legal and other requirements such as those associated with environment, labor, OHS, and mill regulations.

Checking related document procedures and records Principle 3 Company’s annual budget and forecast

26.07.2011 08.00-13.00

Lok Heng Mill Principle 4, Principle 6, and Principle 8 Chemical stores, Storage, MSDS leaflets, Herbicide mixing ar-eas, PPE, Security. Workshop, oil traps, safe working environment, PPE, Diesel tanks. Environmental waste management. Line site: Interview with householders, inspection of water dis-charge point. Water improvement plans. Waste disposal. Doc-ument inspection and assessment.

14.00-17.00 Preparing for closing meeting

Closing Meeting and presentation of findings



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2.4 Stakeholder Consultation and Stakeholders Contacted The stakeholder consultation involved both external and internal stakeholders. External stakeholders were noti-fied to make comments on the certification assessment by placing an invitation to comment on the RSPO web-site. Stakeholders included those immediately linked with the operation of the company such employees, out-growers, the local government, NGO’s, trade and labour unions and local communities. Stakeholder consultation took place in the form of meetings and interviews. Meetings with stakeholders were held to seek their views on the performance of the company with respect to the sustainability practices outlined in the RSPO Principles & Criteria, and to comment on aspects where improvements could be made. Meetings with local communities were held at their respective premises within and near the company’s area. A stake-holder consultation meeting was also held at Kledang Office on March 21, 2011. Letters inviting individual stakeholders to the stakeholder consultation meeting were prepared and sent to the individual stakeholders, while electronic mail and telephone calls were made to arrange the meetings. In all the interviews and meeting, the objectives of the RSPO and the purpose of the assessment was clarified at the outset followed by an evaluation of the relationship between the stakeholders and the company before discussion proceeded to obtain the stakeholders feedback on the company’s compliance to different aspects of the RSPO Principles & Criteria. Although several stakeholders were not familiar with RSPO but they agreed with its objective and expressed their willingness to collaborate in the promotion of sustainable palm oil in Johor. In all interviews and meeting, the assessment team did not restrict discussion of both the positive and negative aspects of operations conducted by FELDA estates, smallholder scheme and mills. The stakeholder consultation meeting held with stakeholders during the audit was extensive and productive, with an attendance of more than 40. This was followed by site inspections, including visits to the local communi-ties, interviews with land claimants and contractors, and inspections of worker amenities and infrastructure. All stakeholder issues raised were recorded and forwarded to the management for their written response, and this is summarized in Section 3.4.The list of stakeholders that attended the stakeholder consultation meeting and stakeholders interviewed during the assessment is included as Appendix 4.

2.5 Date of Next Surveillance Visit The next surveillance visit is planned for February 2012.

3.0 ASSESSMENT FINDINGS

3.1 Summary of Findings Since FELDA became a member of RSPO, the company’s management has committed to comply with all RSPO Principles and Criteria in all company operations activities. As implementation of its commitment, the company applied to TUV Rheinland Malaysia to conduct the assessment of their compliance to all RSPO re-quirements for Adela and Lok Heng mill and the 5 smallholders schemes and 1 estate under Adela complex and 5 smallholder schemes under Lok Heng complex which supply their FFB to Adela palm oil mill and Lok Heng palm oil mill respectively. There is evidence of a considerable effort on behalf of all staff in the preparation of manuals, standard operat-ing procedures and other documents not only to conform to RSPO requirements, but for the company’s im-provement of process effectiveness and efficiency. ‘

In general, objective evidence demonstrating compliance to the RSPO requirements was obtained from each of plantation complex and estates as well as both of palm oil mills. The results from assessment of each site with-in the certification unit have been aggregated to provide an assessment of overall conformance of the company to each criterion. During the certification assessment, 16 nonconformities were assigned, of which 3 were against Major Compli-ance indicators while 13 nonconformities were assigned against Minor Compliance Indicators. In addition,14 observations or opportunities for improvement were identified. Further explanation of the non-conformities raised and corrective actions taken by the company are provided in Section 3.2. The observations & opportuni-ties for improvement are listed in Appendix 5. The following is a summary of findings made for the criteria listed in the RSPO Principles & Criteria Malaysia National Interpretation year 2010 and Guidance for Malaysia Smallholder Scheme.



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Criterion 1.1: Oil palm growers and millers provide adequate information to other stakeholders on environmental, social and legal issues relevant to RSPO Criteria, in appropriate languages & forms to allow for effective participation in decision making.

Findings: The company maintains records of requests and responses in a specific log book, example as follows: There is a request from the Department of Occupational Safety and Health (DOSH) Malaysia No.: JKKP KES 127/679/1klt.3 (62),dated 31 March 2010 to Lok Heng Mill P.O. Box 55, 81907 , Kota Tinggi Johor, requesting report of work-related diseases or accidents in working area. Most information requested by stakeholders in Kledang 2 estate as recorded on their log book were re-quests for invoices such as Invoice no: inv 13122- RM 1,095.00 from Heng Agroscience Sdn. Bhd., dat-ed 31.12.2010, company’s response for that letter was payment receipt dated 06.01.2011. There is evidence that scheme managers have provided copies of contracts between scheme manager and participants, land title use right, training materials on integrated pest management (IPM) techniques and safe use of agro-chemical use, and other relevant documents to scheme smallholders. The above records are maintained for a minimum period as defined by the company. Compliance status: Full Compliance

Criterion 1.2: Management documents are publicly available, except where this is prevented by commercial confidentiality or where disclosure of information would result in negative environ-mental or social outcomes.

Findings: As informed by interviewed scheme participants from Adela complex, the company has made certain management documents as listed below publicly available and they are very easy to access as stated on announcement dated March 26, 2011, which listed the documents that are publicly available as fol-lows: - Land use titles - Health and safety plan, - Plans and impact assessments relating to environmental and social impacts - Pollution prevention plans. - Details of complaints and grievances. - Negotiation procedures. - Procedure for calculating prices, and for grading, FFB - Continuous improvement plan. Listed documents can be accessed by stakeholdesr who need Iinformation as stated on the information board at Adela mill. However, Lok Heng mill does not have any evidence that stakeholders have been in-formed on which company’s documents are publicly available / accessible to stakeholders in Lok Heng Mill.

Compliance status: Non Compliance see NCR No. 1 of 16 There is no evidence that stakeholders have been informed on which company’s documents are publicly available / accessible to stakeholders in Lok Heng Mill.

Criterion 2.1: There is compliance with all applicable local, national and ratified international laws and regulations.

Findings: The company has a procedure of implementation and compliance to applicable legal requirements in a List of Register of Legal & Other Requirements (FPI/L2/QOHSE-2.0). There are also procedures which defines the mechanism of evaluation of compliance to regulations (FPI/L2/QOHSE-17.0). The company maintains a list of all applicable legal requirements relating to environmental, occupational



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safety and health, company plantations, and employment as well as records of internal compliance checks to legal requirements. The company’s list of applicable rules and regulations is as below: - List of Register of Legal & Other Requirements FPI/L2/QOHSE-2.0 - Procedure for Assessment of Legal Compliance FPI/L2/QOHSE-17.0 - Legal and Other Requirements FPI/L4/QOHSE-2.1 Rev 0 The list of legal requirements is updated with according to changes in regulations and also includes in-formation on status of the company’s fulfilment of applicable clauses and articles within the listed legal and other requirements, as part of internal compliance checks by the company. - For Adela mill, RSPO co-ordinator will be responsible to ensure that if there is any change or update

in legal and other requirement dated 23 Mar 2011 - For Kledang 02, relevant personnel has been assigned to check and update of latest amendment of

laws and regulations recorded in job description dated 1 Jan 2011 Lok Heng complex

- There is documented information which keep all relevant legal and other requirement in “Document Control FPI/L4/QOHSE-7.4 & 18.1 Rev. 0”

Other evidence that the company has made efforts to comply legal regulations/requirements is as fol-lows: - All operators of handling boilers are certified by the Department of Safety & Health of Malaysia

- The company’s contractor for hazardous waste collection, Kualiti Alam Sdn Bhd has the required per-mit for hazardous waste collection in accordance with the Environmental Quality Act 1974, Section 11 dated 28 April 2004. Kualiti Alam Sdn Bhd with license no. 000217 from the Department of Environment, Negeri Sembilan to collect scheduled waste, license valid from 1 May 2010 until 30 April 2011. - Licenses for Adela Mill and Lok Heng Mill were checked, including schedule of compliance to the Envi-ronmental Quality Act 1974, and certificates of fitness for all mill non-fired pressurized vessels and boil-ers. All licenses were found to be valid. Adela mill does not have a copy of the approval letter or license from the Department of Environment (DOE) for 2 diesel gensets and 4 incinerators that were installed with the mill since it started operations in 1983. The mill is already aware of this issue and taking necessary action to comply with legal re-quirements, and there is an internal request letter from Adela mill to Felda's Technical Services Depart-ment to apply for the relevant licenses to DOE (letter no. (60)4039/AD/840A/5 Pt.II dated 2 March 2011). Licences for estates are available and found to be valid, for example, license for sale and distribution of FFB and license for purchasing of fertilizer. The mills maintain written information on legal requirements (legal requirements register) pertaining to OSH and Environment which was prepared in June 2010. The mills also have a documented procedure for Legal and Other Requirements which defines the procedure for preparation of the legal requirements register (LRR) and identification of legal requirements. Internal checks on compliance to these legal re-quirements is done and recorded. For example, it was seen from the last legal compliance evaluation conducted at Adela Mill on 4 June 2010, there was one non-compliance identified regarding the effluent treatment pond (ETP) pond final discharge points, where it is required that the mill's two ETP discharge points should be combined to one point, but this has not been done yet. The mill has reported this to the DOE and is taking action to obtain for the license for combining the 2 discharge points from the DOE within the next 3 months from the date of the audit. The estates also maintain a list of all applicable legal requirements, and have assigned staff to be responsible to monitor compliance to legal requirements. The mill and estates track changes in the law through receiving informal updates on changes made to the law from the DOE and DOSH department during sit visits by these two departments and purchasing the updated version of the relevant acts to make necessary changes to their LRR. Updates on changes to the law are also sent by Felda’s head office, e.g. there are records of an internal memo dated 27 July 2009 regarding update to the levy payment of foreign workers, and letter from the Ministry of Plantation Businesses and Commodities regarding Extension of Work Permits for Foreign Workers in the Plantation Sector. There is evidence that Felda Adela and Felda Lok Heng has taken efforts to ensure smallholders are aware of legal requirement to be complied with. For example, it was sighted at Sg. Mas estate and Tunggal es-tate, a documented evaluation of compliance to all applicable laws. All laws/acts have been disseminated to relevant settlers during re-planting Meeting with JKKK and Felda Technoplant conducted once every 3 months. Distribution list to all stakeholders are also available and each person has acknowledged receipt. Minutes of latest meeting with smallholder was dated on 21 January 2011, and included highlighting current issues of last RSPO audit. No open burning has been emphasized to all plantation/estates with a letter dat-ed 6/8/2010.



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Similarly, for Lok Heng estates, there is evidence of legal compliance with latest updated laws and regula-tions such as Environmental Quality Act 1974 (Akta 127), Immigration Act (1959/63), Poison Act 1952 and OSH Act 1994. For example at Papan Timur estate, a JKKR meeting conducted on 17/1/2011 between the management and the settlers to discuss issues pertaining to safety & health aspect, social and RSPO in-cluding acts, policy and social. Similar meetings with smallholders to inform/update them of requirements to be complied with are held regularly. Compliance status: Compliance with observations

Criterion 2.2: The right to use the land can be demonstrated, and is not legitimately contested by local communities with demonstrable rights.

Findings: The right to use the land for mills can be demonstrated. For Adela mill, it was seen from a land grant from the state government of Johor Darul Takzim (Pentadbiran Tanah Johor) K. 212322 with total area for mill 6.037 ha, disposal area (B) 8.207 ha and effluent pond (C)12.74 ha. Evidence of land ownership for Kledang 2 estate is according to letter from the Director of Land and Mines Office of Johor (Pejabat Pengarah Tanah dan Galian Johor) ref no. (65) dlm.PTG.11/2/93 dated May 6, 1998, which states that the land office agrees to grant ownership of a land area of 34,621.3 hec-tares to FELDA. This area consists of part of the land for Kledang 2 estate which covers 2887.58 acre or 1168.54 ha. Based on evidence from sampled smallholder scheme, all scheme members in Papan Timur, Sungai Mas, and Tunggal have received their land grant certificates as evidence of legal ownership of their land. Scheme members in Lok Heng Barat, Lok Heng Timur and Lok Heng Selatan are in progress to receive their legal land title, and FELDA management is facilitating the process of land ownership for their partic-ipants. Each FELDA project manager has maps or other documents showing the land plots held by group smallholders and can show these land areas. The maps are publicly available in each project office based on requests from smallholders. Boundary stones within Kledang 2 estate and smallholder schemes are made by the Surveyor Depart-ment of Johor (‘Jabatan Ukur’). The company has a map showing locations of installed boundary stones in the field, the some of these were sighted in the field, such as Kledang 2 estate boundary no. 146/797. There is an area of 257.47 hectares under Papan Timur scheme which has no land title. An application for the land title was made to the Johor Land Department in year 2007, however the progress to obtain the land title has not been monitored since then. Compliance status: Non Compliance See NCR No. 2 of 16 Progress of application for legal land ownership or land use right to manage 257.47 hectares of planted wetlands area in Papan Timur estate has not been monitored since year 2007.

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.

Findings: There are no customary land users within Felda’s scheme or estates, and there are no land areas under dispute. Hence this requirement is not applicable. Compliance status: Not applicable

Criterion 3.1: There is an implemented management plan that aims to achieve long-term econom-ic and financial viability.

Findings:



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Adela Mill and Lok Heng mill has a 5 year business plan for period (2010 to 2014), information on this plan consist of projection of FFB purchased for 5 years until 2014, and projected oil extraction rate (OER) and kernel extraction rate (KER) for 5 years. A detailed financial analysis which includes infor-mation about profit and loss, product processed and sold, revenue, sales cost, processing cost etc., is clearly determined on FELDA Palm Industries Budget for year 2011 and this document is made annually by FELDA headquarters. Profit and loss information for year 2011 is only available for FELDA corpora-tion in general, no specific information for the mills. Kledang 2 estate has a 4 year budget plan (2010-2013), and information in the plan consists of man-agement activities, cost pertaining to workers, safety and finance cost (infrastructure and depreciation) and costs as well as detailed action plans for village areas. Detailed profit and loss analysis data is only available for year 2011. Documented management plans for most smallholder schemes for 2 years are available but have not been provided or shared with scheme smallholders or their elected representatives. However, certain schemes such as Lok Heng Barat and Lok Heng Timur schemes do not have any management plan pro-jected for two years. Replanting program for Kledang 2 estate will start in 2012 and 2013 for all year 1982 planted area. Total area for replanting program in 2012 is 324.85 ha and for year 2013 is 554.77 ha. During field audit, it was noted that in several of scheme areas such in Tunggal and Lok Heng Barat, the estate are past the normal age for replanting (almost 30 years old, normal replanting age is 25 years), but since the price of FFB is high, the scheme participants do not allow FELDA to carry out replanting programs for their area so they can continue to harvest, even though the smallholder scheme managers have asked the scheme smallholders to allow them to carry out the replanting program. The smallhold-ers requested FELDA to postpone all replanting program until FFB price is low or until the yield of oil palm tree becomes too low. At each scheme, there is no compiled information about a summary of all the data on land use (in hectares for the entire group that includes the following: Total area of each estate. Planted and non-planted areas. Mature & immature areas Conservation / HCV areas. Areas used for other purposes, such as housing, offices, other infrastructure, etc.

Compliance status: Non Compliance see NCR No. 3 of 16; 4 of 16 1. Scheme managers have a documented Budget Plan / smallholder scheme management plan (minimum 2 years) for years 2011 and 2012. However as discussed with smallholder representatives from each scheme, the company has not shared the management plan with scheme smallholders. For Lok Heng Barat and Lok Heng Timur, budget and management program is only available for year 2011 (less than 2 years). 2. There is no summary of all land use data (in hectares) for all scheme smallholder locations, which is include the following information: Total area of each estate. Planted and non-planted areas. Mature & immature areas Conservation / HCV areas. Areas used for other purposes, such as housing, offices, other infrastructure, etc.

Criterion 4.1: Operating procedures are appropriately documented and consistently implemented and monitored.

Findings: Mill procedures are available in a file “Safe Working Procedures - Safety and Health Management” and include standard operating procedures (SOPs) for loading ramp, weighbridge, sterilizer, crane, thresher,



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fruit elevator, digester, press, cake breaker conveyor, polishing drum, ripple mill, clay bath, hydro cy-clone, silo kernel, engine room, boiler, workshop, store, lab, and so on. SOPs for all estates is available in Malay - ' Sustainable Oil Palm Estate Management Manual' dated 2007 published by Felda Agricultur-al Services for all estate activities carried out during land clearing, in immature palm areas, and mature palm areas. Management of the smallholder estates at Adela and Lok Heng are also carried out accord-ing to this manual. Smallholders are not provided with a copy of FELDA's SOP but monthly meetings are held with smallholders in which FELDA management will provide information on the company's SOPs and when requested, and the company’s SOPs are made accessible to smallholders. Smallholders were interviewed and found to have a good overall understanding on good agricultural practices and FELDA's working procedures such as safe work practices and handling of chemicals, practices to maintain soil fertility, IPM techniques, waste management, emergency procedures, first aid, etc. There is evidence of monitoring and actions taken. Adela mill and Lok Heng mill conducts internal audits according to their documented procedure for Quality, OHSAS18001 and ISO14001 audits which is con-ducted once a year by Quality, Occupational Health and Safety and Environment (QOHSE) auditor. For example, there is a record of internal audit was conducted on 22 to 23 December 2009 at mill. Records of nonconformities raised are available, as well as cause analysis and corrections/ corrective actions with sign-off of acceptance of corrective actions by the lead auditor on 1 February 2010. At the estates, internal audits to check implementations of good agricultural practices are also carried out according to the company's SOP. For example, Felda Kledang 2’s internal audit records viewed on-site include an Agronomist report dated 6 Nov 2009 and Inspectorate's Visit on 28 & 29 Sept 2010 with results of internal audit on estate operations such as manuring, soil erosion prevention, sanitation & pruning, pest & weed management, transportation, road management, land and water management, drainage, etc. Similar agronomist reports and inspectorate visit reports are available for the Adela and Lok Heng smallholder scheme estates. Report on actions taken on issues raised in previous Inspec-torate's report and Agronomist's report is made in the following year's report. Inspections are conducted once a year and records are kept for at least 12 months. Compliance status: Full compliance

Criterion 4.2: Practices maintain soil fertility at, or where possible improve soil fertility to, a level that ensures optimal and sustained yield.

Findings: Annual fertilizer recommendations for mature plantings at all Adela and Lok Heng estates are available for 2010 and 2011 and prepared by the laboratory of Felda Agricultural Services Sdn. Bhd. (FASSB) which states type of fertilizer to be used, for each field, and recommended date of application. For imma-ture plantings, fertilizer is applied according to recommendations as per the company's agricultural man-ual. Monthly fertilizer application records are maintained at all estates and comparison of actual applica-tion with recommendations for year 2009 was carried out and reported in Inspectorate's Field Visit Re-port, as viewed from sample report for Felda Kledang 2 dated 28 & 29 Sept 2010. Fertilizer applications are done according to recommendations, for example, recommended fertilizer application for Jan 2011 of 306.7 metric tonnes at Lok Heng Timur estate was carried out accordingly in February. Leaf and soil sampling at all Adela and Lok Heng estates is done once a year by the Felda Analytical Laboratory for selected fields and block. For example, it was viewed from records that last sampling was done at Felda Kledang 2 estate from 16-17 March 2010 for 13 soil samples taken from different estate blocks while for Lok Heng Barat estate, the last sampling was done from 10-11 February 2010 for 11 samples taken from different blocks of division 1. Leaf nutrient status were analyzed for all samples and soil nutrient status was analyzed for only 3 samples. No palm oil mill effluent (POME) application is carried out at Adela and Lok Heng estates, only empty fruit bunches (EFB) is applied to certain estates. Records of amount of EFB transported to the field by contractors are available and documented. Felda implements a zero burning policy as stated in their SOP for Felling and Chipping of Oil Palm trees. Based on site visits and interviews local stakeholders, it was confirmed that land burning during replant-ing is not carried out. Records of areas where zero-burn replanting are applied are maintained at all es-tates. There is evidence that smallholders understand techniques required to maintain soil fertility, as viewed from meetings minutes of monthly meetings held with 15 smallholder leaders on 30 April 2010, the lead-er of block 16 requested for more application of EFB to increase soil fertility. Based on an interview with



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a smallholder from Felda Tunggal, he was able to explain techniques to maintain soil fertility such as planting of leguminous cover crops and using circle spraying instead of blanket spraying to protect the soil. Compliance status: Full Compliance

Criterion 4.3: Practices minimize and control erosion and degradation of soils.

Findings: The general topography of estates at under both Felda Adela and Felda Lok Heng is moderate to undu-lating. Planting of leguminous cover crops, (LCC) mucuna bracteata is carried out at all estates upon re-planting as a measure to control or reduce erosion. There are maps indicating locations of plantings of LCC conducted in year 2008 at Felda Kledang 2 estate, as well as in year 2006 for recently planted are-as in block 1.2V and 1.21 V of Papan Timur estate. The company has an SOP for construction of terrac-es, silt pits as well as planting of LCC and maintains daily records of construction and LCC planting works carried out, i.e. records of LCC planting carried out in year 2007 at Lok Heng Timur estate are available. Scheme managers are informed on techniques to manage soils and it was viewed in from vis-its to the estates that there is a good level of ground cover crops such as mucuna bracteata throughout the fields. Based on an interview of smallholders from Felda Tunggal, Lok Heng Barat and Papan Timur estate, the smallholders have a good understanding of techniques and best practices to prevent or re-duce soil erosion, such as circle spraying instead of blanket spraying, and planting of LCC and terracing. From field visits, it was observed that estates are planted with LCC and there is a healthy level of ground cover at all planted areas, and frond stacking is carried out. There is no blanket spraying; only circle spraying of trees is carried out. However, there is inconsistency in implementation of the company’s SOP for management of fragile/ marginal soils, as a high level of soil erosion was observed at sandy ar-eas of Sg. Mas estate, such as at lot no. 7806 and smallholders land adjacent to Sungai Mas riparian zones. All Adela and Lok Heng estates maintain a road maintenance program and records of areas where road maintenance works were carried out. For example, Felda Kledang 2 estate maintains a log book of when actual road grading and maintenance works were carried out from July to November 2010, while Papan Timur estate a work program which includes a schedule for road maintenance work to be carried out for 80 hectares of area, construction of 1000m of new roads and maintenance of drainage between Febru-ary to March 2011. It was observed during field visits that roads are well maintained and there is no sign of significant erosion. There is some peat soil in Kledang 2 estate which varies in depth from deep to shallow. Kledang 2 es-tate has two sampling points to monitor subsidence level i.e. PM 08 for peat with depth 2 m and PM 06 for peat with depth 2m. Some weirs were constructed to control water level in peat land area. However it was found that there is no evidence that Kledang 2 estate has a documented water management pro-gram for peat land, and monitoring of subsidence points and weirs, which are built without further moni-toring. Compliance status: Non Compliance See NCR No. 5 of 16; 6 of 16 1. FELDA Kledang 2 estate has established two subsidence level points and water table monitoring

points at peat soil areas, however, there is no documented water management programme to mini-mize subsidence level of peat soils.

2. There is evidence that techniques to manage fragile/ marginal soils is not being well implemented, as a high level of soil erosion was observed at sandy areas of Sg. Mas estate, such as at lot no. 7806 and smallholders land adjacent to Sungai Mas riparian zones.

Criterion 4.4: Practices maintain the quality and availability of surface and ground water.

Findings: There are some rivers flowing through the smallholders estates, such Sungai Mas River flowing through Sungai Mas scheme, and a small river flowing through Felda Kledang 2 estate. Felda Kledang 2 has



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done water sampling and analysis of river samples taken from Kledang river upsteam and downstream points of division PM 08M and PM086M. The most recent analysis at time of audit was done by Felda Analytical Laboratory and results were issued on 3 Nov 2010, showing no exceedance of standards. Water sampling and analysis of river water samples near Adela Mill and Lok Heng Mill is also conducted by an external lab at Sawit Penggeli Mill once a month for two samples taken at final discharge point from mill effluent ponds and water sampling and once every 3 months for one mill drain sample. Mini-mum chemical parameters for water quality are stated in each mill's DOE (Department of Environment) license, and it was verified from sample water analysis certificates that mill water discharge quality meets the water quality standards as defined in their mill DOE license. Daily rainfall data are documented by the mills on a monthly report. Rainfall data for all estates is also recorded every month for estate and summary of annual rainfall data is provided in annual agronomist reports or inspectorate reports for each estate. The mills maintains a record book on daily water usage at certain mill stations (boiler, oil room, hydro cy-clone 1, 2, and 3 and for maintenance). Target for mill water usage is 1 tonne of water per tonne FFB processed and it was viewed from records that standards are met. For example, from sample data from Adela, there was no exceedance of the mill's target water usage from July 2010 to February 2011, and only minor exceedance in May (1.03 mt/tonnes FFB) and June 2010 (1.05 mt/tonnes FFB). Water management plans for all estates consists of construction of drains, silt pits and water diverts to prevent flooding in the field, and records of works carried out are maintained. For example, there are records of a work order for a contractor to 6000 build silt pits at Felda Kledang estate in Nov - Dec 2006. Maps of silts pits and culvert locations in the field are available. Daily records of drainage construction, e.g. for replanted area at Division 1B Lok Heng Timur estate in 2007, are also available. The scheme managers implement other best practices for water conservation in the field such as construction of 31 culverts at Tunggal estate was done in 1 May 2009 - 3 Sept 2009 by a contractor. From interviews with smallholder at Felda Tunggal, he has a good understanding of the importance of maintaining the quality of waterways and understands that chemicals should not be permitted to enter waterways. However, alt-hough there are no main rivers in the estate, according to the smallholder, spraying is still carried at palm trees located adjacent to culvert drains. It was also observed on-site that agrochemicals are still applied at riparian buffer zones as seen on block no. PM 86 B and PM 08M. This is not in accordance with the company’s policy to protect of water cours-es and wetlands, including maintaining and restoring appropriate riparian buffer zones and the compa-ny’s action plan for HCV areas, which states that the company will not apply agrochemicals at the ripari-an zone. Compliance status: Non Conformance See 7 of 16 It was observed on-site that agrochemicals are still applied at riparian buffer zones as seen on block no. PM 86 B and PM 08M. This is not in accordance with the company’s policy to protect of water courses and wetlands, including maintaining and restoring appropriate riparian buffer zones and the company’s action plan for HCV areas, which states that the company will not apply agrochemicals at the riparian zone.

Criterion 4.5: Pests, diseases, weeds and invasive introduced species are effectively managed using appropriate Integrated Pest Management (IPM) techniques.

Findings: All Adela and Lok Heng estates maintain documented guidelines for management of commons field pests which explains the life cycle and management methods for pests and diseases such as bagworms, nettle caterpillars, rhinoceros beetle, rats, and ganoderma. Felda'a agriculture manual also includes SOP for management of rhinoceros beetles through pheromone traps and chemical treatment with cy-permethrin i.e. if more than 5.0% of trees inspected in a block are found to have damage from rhinocer-os beetles. The SOP of management of rats states that rat baiting using Butik G2 rat bait shall be carried out once it is found that out of all trees inspected during a census, more than 5% have rat damage. Ac-cording to SOP, prophylactic (preventive) chemical treatment of rats and beetles at regular intervals is also carried out to maintain low levels of pest attacks. The estates maintain no records of census for bagworms and nettle caterpillars as attacks of these pests have been insignificant. Census is conducted only for more significant pests, which are rhinoceros bee-tles and rats. For example, Felda Kledang 2 estate maintains records of number of beetles found in 10 pheromone traps located around the estate which are checked 3 times a month. The estate also main-



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tains monthly records of census conducted to check level of beetle damage on trees. All estates maintain records of when and where pesticides are used as part of their IPM program. For example, records of amount of rat bait (Butik Super) applied at Felda Kledang 2 estate shows that rat baiting is conducted about once every two months, i.e. in Jan 2010 (36 g), March (390g), May 2010 (39g), July 2010 (38g) and Oct 2010. The higher amount of rat bait applied in March 2010 was part of annual prophylactic treatment for the whole estate, while other treatments were only for selected estate divisions where high rat attacks were found. Records of treatment of rhinoceros beetles with cyperme-thrin at areas with evidence of high attacks of rhinoceros beetles are also maintained. 20 litres of cyper-methrin was also applied in March 2010 as part of annual prophylactic treatment of rhinoceros beetles. Felda Kledang 2 estate also has a summary of amounts of herbicide and pesticide active ingredients used per hectare for year 2009, 2010 and 2011. There are efforts to reduce usage of chemicals in management of pests, i.e. it was observed on site that plantings of the beneficial plant turnera subulata (a plant that attracts natural predators of leaf pests) was carried out at newly replanted areas of the field, but not mature areas above 20 years old (as these are soon to be replanted). As part of efforts to reduce rat infestation through biological methods, Felda Kledang estate has three barn owl boxes located in the field and carries out daily census on the occu-pancy rate of the boxes. However, from census records from August 2010 until February 2011, records show no occupancy of the barn owl boxes. Spraying of trees with ORY-X Metarhizium (as biological con-trol) to protect against rhinoceros beetles is also carried out only at areas found to have high infestation. There are records of IPM training conducted for smallholders, for example, there was a training conduct-ed at Felda Tunggal on 25 January 2011 which was attended by 22 smallholder block leaders and train-ing materials were provided to all smallholders, with evidence in the form of a list of all smallholders who have received the document with their signatures. Training materials include information in management of rat pests and rhinoceros beetles. Based on interview with smallholders from Adela and Lok Heng es-tates, the main pests at the estate are only rats and rhinoceros beetles, and smallholders had a good understanding of chemical treatment methods and techniques applied by Felda to run to estates. Compliance status: Full compliance

Criterion 4.6: Agrochemicals are used in a way that does not endanger health or the environ-ment. There is no prophylactic use of pesticides, except in specific situations identified in na-tional Best Practice guidelines. Where agrochemicals are used that are categorised as World Health Organization Type 1A or 1B, or are listed by the Stockholm or Rotterdam Conventions, growers are actively seeking to identify alternatives, and this is documented.

Findings: The company’s manual of Safety, Health and Environment has described justifications and Standard Operating Procedures (SOP) of all agrochemicals used. This has been detailed under Section 20 of “Safety Management and Handling of Hazardous Chemicals Regulation”. Chemicals used at estates are registered under the Malaysian Pesticides Act 1974 (Act 149) i.e. Ally 20DF (a.i. 20% methyl metsufuron), Basta (a.i. 13.5% gluphosinate ammonium), Dupont Surfactant (a.i. Dimethylamine), Ecomax (a.i. 41% glyphosate isoproplyamine), Garlon 250 (a.i. 32.1% trochlopyr butox-yl ethyl ester), CSH Paraquat (a.i. 13% paraquat dichloride), Round-up (a.i. 41% glyphosate isoproply-amine) and NASA glyphosate (a.i. 41% glyphosate isoproplyamine). All chemicals are securely stored, and paraquat is stored separately within chemical stores, within a separate lock as enhanced security to prevent use without permission. Material safety data sheets (MSDS) for all chemicals were sighted in the chemicals stores. All estates have received an internal memo no. from the operational head of Johor Bahru region regard-ing reduction of usage of chemicals, especially paraquat. The letter includes guidelines to reduce usage of chemicals such as reducing frequency of spraying rounds as required, reducing the rate of usage of agrochemicals and to avoid use of paraquat or use other chemicals when possible. Smallholders inter-viewed have been informed on these guidelines and have a good understanding on the hazards of para-



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quat and necessity to minimize usage of the chemical brand, CSH Paraquat. The chemical is only used for target spraying of unwanted oil palm seedlings. The rat bait, Butik Super, which is commonly used as a prophylactic treatment against rat pests, was al-so found to contain chlorophacinone, which is a WHO Type 1A hazardous chemical. However, amount of active ingredient in the rat bait is only 0.005% and the rat bait itself is classified as a Class IV chemi-cal. Even though prophylactic rat baiting is carried out, records shows that usage of rat bait is low and in accordance to the product label. Waste materials from agrochemicals include pesticides containers are properly disposed in accordance with the relevant regulations. Agrochemical wastes produced at the estate is collected in a separate store and some of the agrochemical containers are reused for chemical mixing. Agrochemical waste is treated as hazardous waste and will be stored no more than 180 days according to relevant regulations and all hazardous waste are collected by a scheduled waste collector. However, there is evidence that workers at Sg. Mas estate and Lok Heng Barat estate are improperly informed on proper management of HDPE containers. It was found at worker's housing at both estates that several empty chemical con-tainers were left in the open and being reused for purposes other than chemical containment. Tunggal estate also does not maintain inventory of chemical containers, as required the company’s procedure for identification and management of wastes (no. MR 5.3/2009). These were raised as non-conformities un-der CR5.3.

There is evidence that Felda has trained their smallholders on agrochemical use. For example, Sg. Mas has provided a letter to smallholders from Felda's Group RSPO Coordinator regarding safe usage of ag-rochemicals in the estate which states that all smallholders are to: - report any usage of chemicals to the manager from time to time, especially class 1 type chemicals - provide appropriate PPE to all workers - Ensure that no pregnant or breast-feeding women are doing work involving handling of chemicals - reduce usage of paraquat or use an alternative, where possible - all chemical containers are to be disposed in a safe manner (triple rinsed) or sent to the management office for safe disposal - to carry out a chemical health risk assessment (CHRA) and medical checks for workers who handle chemicals

Based on interviews with smallholder from Sg. Mas, they have received this information from the com-pany, and other smallholders interviewed at Lok Heng Barat and Papan Timur estate have also been in-formed by FELDA on types of chemicals allowed to be used and rates of application based on product label. Smallholders are aware of types of PPE to be used when handling chemicals. From field observa-tions and records, all sprayers are provided with appropriate PPE such as masks, goggles, aprons, rub-ber gloves and rubber boots. All sprayers are male, and there are no female workers handling chemicals except at some estates where the chemical store clerk is female (i.e. Lok Heng Barat). Direct handling of chemicals by the clerk is minimal and she is aware that she not permitted to handle the store if pregnant.

The company develops chemical spraying programmes and maintains records of actual work carried out, such as when annual spraying is applied, the amount used per hectare and the number of times of application. All activities were recorded daily in “Spraying Record Book”. There is evidence that spraying was carried out by skilled personnel as viewed from training records.

Sprayers interviewed in the field, i.e. Sg. Mas, Lok Heng Barat and Papan Timur estates are aware of the hazards of the chemicals be used, safe work practices and emergency response procedures. Ac-cording to sprayers, medical checks are conducted twice a year and they have also been trained on fire fighting in the field and first aid. There are fire extinguishers and first aid kits located in the worker transport lorry. The company provides medical health check-ups for those who apply agrochemicals which has been recommended by Chemical Health Risk Assessment (CHRA) conducted on 7/9/2010. The check-up was done by an authorized and registered Occupational Health doctor. This is also part of Use and Standard of Exposure of Chemicals Hazardous to Health Regulations 2000 with summary of test report for medi-cal surveillance dated 25 Mar 2011 shows that there is no worker with abnormal results found. Workers requiring medical treatment go to the local government clinic and treatment costs are borne by the company. During a visit to the government clinic at Lok Heng, it was found that there are visits from estate workers complaining on issues such skin and body itchiness i.e. there is a record of visit from a



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sprayer on 5 January 2011 complaining on itchiness on genitals and legs. There was also one record of mild food poisoning of a smallholder which may have been due food contamination after handling of chemicals. No other significant health issues were reported. Although PPE provided to workers was viewed to be appropriate, the company should continue to ensure workers and smallholders are contin-uously trained on safe handling chemicals to prevent such symptoms. Compliance status: Compliance with observations

Criterion 4.7: An occupational health and safety plan is documented, effectively communicated and implemented.

Findings: FELDA Agricultural Services Sdn Bhd has a documented policy for occupational health and safety that was signed by the chief operating officer (CEO) dated 2 August 2010. The policy has emphasized on safety to employees and contractors comply to all legal and regulations, waste handling and emergency response as well. Safety and Health Policy also available and can be seen and easily access areas i.e. office, laboratory and guard house.

An OSH committee was also established for both complexes; Adela and Lok Heng, based on a decree from the Department of Occupational, Safety and Health, under Occupational Safety and Health Act 1994. The OSH committee comprises of Mill Manager or Estate/Plantation Manager as Chairman, work-ers representatives, foreign workers representatives and also from the settlers.

Records of OSH meetings are available and agenda was regarding policy, RSPO, training and aware-ness. However, the meeting was not conducted regularly as per OSH requirement to have regular meet-ing once in three months at Kledang 02, Papan Timur and Lok Heng Timur. This was noted as an obser-vation. The company provides occupational accident insurance for all workers, in cooperation with insurance companies, BH Insurance and eTiQa Takaful Bhd, for all existing employees including foreign workers.

Regular health examinations are conducted for employees who are handling with chemicals starting 25 Feb 2011 until 4 Mar 2011 by authorized and registered Occupational Health doctor. This is part of Use and Standard of Exposure of Chemicals Hazardous to Health Regulations 2000 with summary of test re-port for medical surveillance dated 25 Mar 2011 for all workers who are directly involved in chemicals handling shows that there is no worker with abnormal results found. An audiometric test was also con-ducted for 82 employees at Adela mill, including office staff by consultant ear, nose and throat surgeon. A doctor’s letter dated 3 Feb 2011 on report of the test found that 8 mill workers were found to experi-ence hearing impairment at various levels. The mill management is aware of this and has plans to send the 8 mill workers with hearing impairment for a re-test and will carry up follow-up action based on test results. This will assessed during the next surveillance audit. Lok Heng mill also carried out periodic au-diometric tests for selected mill workers, i.e. last test was for 2 workers at mill process stations and 2 workers from the lab. Test results showed no abnormalities in hearing of the workers.

A documented Hazard Identification, Risk Assessment and Risk Control (HIRARC) for Occupational Health and Safety were documented under FPI/L4/QOHSE – 1.6 rev. 0 dated 12 June 2011 and in-cludes risk analysis of activities of all mills and estates such as manuring, spraying, harvesting, machine operation, transportation, control of pests and diseases and landscaping. One of the risk control identi-fied is to build new chemical store to keep pesticides safe and for inventory control. However, chemical mixing was not included in the risk assessment although it can be a high risk activity due to possible spillage. The HIRARC need to be improved where the condition of certain activities was not correctly identified as being under normal, abnormal or emergency condition.

Records of training related to OSH were well maintained by each mill and plantation/estates assessed, such as first aid together with fire drill and evacuation plan, regarding fire fighting to all workers and set-tlers, safety handling of pesticides and proper using of PPE to all sprayers and safe work practice as well. Scheme smallholders are also informed on OSH requirements and safe work practices through regular meetings held with Felda management, as explained under CR4.6 above.

There is also a Safety & Health Plan established for 2011 with activities encompass of safe handling of pesticides, manuring, harvesting, safety equipment (PPE), chemicals handling and emergency prepar-edness.



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An accident and emergency preparedness procedure has been established i.e. Manual Safety, Health and Environment 2009 includes procedures in handling with hazardous chemicals, accident and emer-gency procedures, safety audit and schedule wastes. Safety and health equipment are available at work sites, including fire extinguishers, water tanks, pumps as well as personal protective equipment provided to all workers at the site. Location of first aid were also checked i.e. control room, boiler room and at the workshop were found to be properly managed and checked regularly. However, it was found that some workers are not using appropriate PPE, i.e. FFB transporters Lok Heng mill were observed not wearing safety shoes. Several contracted workers under a contractor hired to carry on culvert construction work at Lok Heng Barat estate were also found not wearing safety helmets or boots. As this within a scheme smallholder estate and there is evidence based that contractors have been informed to wear PPE (based on interviews and during the stakeholder consultation meeting), this was raised as an observa-tion. Trucks were also not equipped with first aid kits, and this was raised as an observation.

Records of the occurrence of any work accidents are maintained and regularly reviewed. In May one case recorded, June there was one case, July one case which is not related to work, August one case and one case in November. According to the company’s procedure for reporting and investigation of ac-cidents and environmental pollution (dated 2009), the company shall report every accident that occurs into Initial Incident/Accident Report. Later full investigation is recorded in a form for Incident Investigation Report and another report according to template by DOSH to be submitted to the Department of Health & Safety (DOSH). Thus, the organization maintains records of accidents that occurred in the year 2010 and reviewed accordingly the cause of the accidents that occurred during the year. Compliance status: Non Conformance see NCR No. 8 of 16; NCR No 9 of 16 1. There are contracted workers that observed that are not wearing appropriate PPE, for example, fruit

transport contractors were not wearing any PPE (safety helmet & boots) at Lok Heng mill. This is not complying to the mill’s procedure FPIPK-048 'Procedure for Contractors, Supplies, and Visitors' that contractors and visitors are required to wear PPE.

2. Identification of risks pertaining to chemical mixing is not included in the estate’s HIRARC (Hazards Identification, Risk Assessment & Risk Control).

Criterion 4.8: All staff, workers, smallholders and contractors are appropriately trained.

Findings: Training and orientation records were sighted for several new workers of Sg. Mas estate interviewed in the field who joined within the last 4 to 6 months. This is including all registered workers on smallholder scheme are provided adequate training and skills and this is documented. The new workers interviewed on-site stated that they had received relevant training and based on interviews, they had an understand-ing of safe work techniques and SOPs. Training programs are available and documented and established for scheme projects and estates. Ex-amples of records of trainings conducted is as follows: 1) Kledang 2 estate operations: Harvesting best practices (Sept 2010), pest and disease detection and census (July. 2010), risk assessment (September 2010), occupational safety and health (Sept. and Nov. 2010). 2) Chemical Store: Best practices in handling of agrochemicals (Jan and May 2010), emergency re-sponse procedures (July 2010) in Tunggal and August 2010 in Papan Timur. 3) OHS and First Aid training records dated November 5, 2010 in Sg Mas. Compliance status: Full compliance

Criterion 5.1: Aspects of plantation and mill management, including replanting, that have environ-mental impacts are identified, and plans to mitigate the negative impacts and promote the positive ones are made, implemented and monitored, to demonstrate continuous improvement.

Findings: Adela Mill as a documented EAI (Identification of Environmental Aspects & Evaluation of Significance Form) for all mill activities, which was approved on 1 January 2010 and last updated on 17 January 2011



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for activities pertaining to the bunch crusher. Lok Heng mill has a similar EAI document prepared on 15 January 2010 and to be reviewed in April 2011. The mills have a procedure for "Quality planning, Hazard Identification, Risk Assessment, Determining Controls and Environmental Aspects" document no. FPI/L2/QOHSE-1.0 which defines the procedure for preparation of the EAI. It was observed that Adela Mill did not maintain a revision history for the EAI document, and this was raised as an observation. Adela mill and Lok Heng mill has a documented quality, occupational safety and environmental (QOHSE) objectives for each year, which includes 2 environmental objectives according to the compa-ny’s procedure for preparation of QOHSE objectives. For example, Adela mill's environmental objectives for year 2011 are to maintain use less than 0.80 litre/mt of diesel a year, and less than 0.90 mt of water per mt FFB per year. The mill maintains records of diesel and water use to monitor achievement of these objectives. Lok Heng mill's environmental objectives for year 2011 include improving water flow by re-placing a pipe and preparation of improved facilities for collection of scheduled wastes. Achievement of objectives is monitored by respective personnel and reviewed during monthly meetings. Felda Kledang 2 and other smallholder estates have an Environmental Aspects and Impacts (EAI) As-sessment prepared in June 2010 which includes assessment of significance and suggested control measures for main estate activities such as spraying, handling chemicals, transport, harvesting, manur-ing and rat baiting. However, the document does not include identification of environmental aspects of many other common estate activities e.g. building and maintenance of roads, drainage and irrigation systems, replanting activities, clearing of natural vegetation, nursery, management of rhinoceros beetles, terracing, office and housing activities, and final disposal of used chemical containers. This was raised as a non-conformity. All estates have an environmental improvement plan developed based on the EAI assessment, where potential land pollution resulting from chemical spraying, rat baiting and manuring was identified as hav-ing the highest environmental impact, and is managed through reduction of usage of chemicals as well as triple rinsing and reuse of the chemical containers. The estates have an additional documented action plan for management of estate wastes and a plan for reducing environmental impacts through 3R (Re-duce, reuse, recycle) for fertilizer bags, plastics, paper, used PPE, tires, chemical containers and do-mestic waste and recycling of state by-products such as dried palm fronds, chipped palm trunks, EFB, shell and mesocarp fibre. The estates is currently implementing recycling of chemical containers and fer-tilizer bags, however, aspects of the action plan is not being fully implemented, i.e. it is stated that paper, plastic, glass and other recyclables will collected by a contractor for recycling and even though some es-tates have recycling bins, there is no collection of recyclables by a suitable contractor yet. The plan also states that domestic waste will be reused as compost, but this is also not being implemented. As this plan is to be implemented for year 2011, this was raised as an observation and implementation will be monitored at the next surveillance audit. It was also found that management of hazardous wastes re-quires improvement, and this is explained further under CR5.3. Compliance status: Non-compliance See NCR No. 10 of 16 The Environmental Aspects and Impacts Analysis document for all estates does not includes identifica-tion of environmental aspects of many common estate activities e.g. building and maintenance of roads, drainage and irrigation systems, replanting activities, clearing of natural vegetation, nursery, manage-ment of rhinoceros beetles, terracing, office and housing activities, and final disposal of used chemical containers

Criterion 5.2: The status of rare, threatened or endangered species (ERTs) 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.

Findings: HCV assessments have been conducted by company’s staff for Kledang 2 estate. The results of these assessments are documented in Kledang 2 HCV Identification Report. However the HCV assessment was not conducted using appropriate methodology to obtain correct re-sults, as it was found during field visits that there are many species birds in Kledang 2 estate which were



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not identified in the HCV assessment. There is no information found in HCV document regarding the en-dangered, rare and threatened (ERT) status of the birds, the condition of identified HCV areas has still not been determined, and some HCV areas identified are not actually under FELDA’s management, as there are two identified HCV 1 and HCV 4 areas located outside Kledang 2 estate, and are actually part of protected forest under the management of the Malaysian Forestry Department. The company’s HCV management plan is also not sufficient to protect defined HCV values. Identified ERT species found in Kledang 2 estate are wild boar (Sus scrofa vittatus), red junglefowl (Gal-lus gallus), Malayan porcupines (Hystrix brachyura), pigtailed macaques, (Macaca nemestrina), foxes, water monitor lizards (Varanus salvator), King cobras (Ophiophagus hannah) and pangolins (Manis ja-vanica). The company’s action plan to protect ERT species and its habitat within the estate and smallholder schemes is only focused on installment of sign boards. Sign boards have been erected to discourage hunting to create awareness among workers and other interested parties. Awareness on HCV areas and protected species is raised at monthly meetings with internal stakeholders and with scheme smallhold-ers. Compliance status: Non Compliance NCR No. 11 of 16 (Major) The HCV assessment was not conducted using appropriate methodology to obtain correct results, as it was found during field visits that there are many species birds in Kledang 2 estate which were not identi-fied in the HCV assessment. There is no information found in HCV document regarding the ERT status of birds, the plantation condition of identified HCV areas has still not been determined, some HCV areas identified are not actually under FELDA’s management and the HCV management plan still not suffi-cient to protect defined HCV ‘s values.

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

Findings: Adela Mill and Lok Heng Mill documents all waste products and sources of pollution pertaining to all mill activities in their Identification of Environmental Aspects and Evaluation of Significance document, while for estates, wastes and waste products and sources of pollution from main estate activities (i.e. chemical application, harvesting, manuring, and transport) are identified under their Environmental Aspects and Impacts (EAI) Assessment prepared. As part of their operational plan to avoid or reduce pollution, the mills develop environmental objectives annually, which include objectives to reduce wastage or usage of resources such as diesel and water. In addition, the mills conduct monitoring of main polluting activities and reports monitoring once every 3 months to the Department of Environment (DOE). Monitoring activities conducted include mill stack/boiler sampling, ambient air monitoring, Effluent Treatment Pond (ETP) final discharge and mill drain water sampling and analysis, and black smoke emissions. Last DOE reports from the mill were viewed from the report that there is no exceedance of environmental quality parameters as required in the mill's DOE license. The estates also have an action plan for management of estate waste and by-products, as described under CR5.1. There is also evidence that crop residues and biomass are recycled. For example, Adela mill and Lok Heng mill uses shell and fibre as renewable energy in the boilers. The mills also send EFB to smallhold-er estates for application to the field, and records of transport of EFB and maintained. Fibre is also sold to be reused as fertilizer, and records of sales to purchasers are also maintained. However, it observed that management of scheduled waste at mills and estates needs to be improved to meet legal requirements, and this was raised as a non-conformity. For example: 1) There is evidence that workers at Sg. Mas estate and Lok Heng Barat estate are improperly informed on proper management of HDPE containers. It was found at worker's housing at both estates that several empty chemical containers were left in the open and being reused for purposes other than chemical con-tainment.

2) Tunggal estate does not maintain inventory of chemical containers, as required the company’s proce-dure for identification and management of wastes.



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3) Management of scheduled waste at mill needs to be improved to comply with the Environmental Quality (Scheduled Wastes) Regulations 2005, e.g.:

- At Adela Mill, empty paint cans were left in open area at mill fertilizer bagging store (the mill bags its own fertilizer for sale for outside farmers).

- Several oil contaminated cloth gloves were found on the ground around Lok Heng mill compound and several used oil containers next to workshop were not kept in scheduled store. Computers parts were dis-posed at the effluent treatment pond area of Lok Heng Mill - There is a lack of appropriate hazard signs at the scheduled waste store at Lok Heng mill Based on interviews with smallholders, it was stated that some chemical containers are returned to Felda for collection, but some are buried underground. Smallholders should be trained to return empty chemicals to estate offices for reuse or collection by a licensed contractor. Compliance status: Noncompliance See NCR No. 12 of 16; Management of scheduled waste at mills and estates needs to be improved to meet legal requirements, as explained above.

Criterion 5.4: Efficiency of energy use and use of renewable energy is maximized..

Findings: The source of renewable energy used in Adela mill are fibre and shell used to produce steam from the boiler. Based on mill calculations, 1 mt of FFB processed requires production of 545kg of steam. Monthly records of steam produced are maintained and monitored for year 2010 at Adela mill, ranging from 7957 tonnes in February to 15821 tonnes produced in July. Adela mill also has corresponding data on ener-gy/ton CPO is produced from fibre and shell consumption. However, for Lok Heng mill, there is no infor-mation found about how much fibre and shell as source of renewable energy is used every month at Lok Heng mill. The company uses fossil fuel for limited activities such as start up of boiler and transportation purposes, and operation of generator as an electricity source. Fossil fuel used for Adela mill operation is diesel oil which is used for Genset, tractors and other heavy machinery. Average diesel oil used per month for year 2010 is 0.97 litres per tonne FFB processed with range between 0.78 to 1.34 liters/ton FFB or average is 1.86 RM/Ton FFB. Referring to the fossil fuel consumption budget 2010, the company has a target of 2.17 RM/ton FFB. This shows that efficiency from company's budget is less 031 RM/Ton FFB than defined budget. There is no information about fos-sil fuel consumption in Lok Heng mill and what is the action taken to improve its efficiency. There are no action plan developed in all scheme project for improving the efficiency of energy use in their schemes and land holdings. Some project schemes only record their daily fossil fuel consumption. Compliance status: Non Compliance see NCR 13 of 16 ; 14 of 16 1. Lok Heng mill is not carrying out analysis of renewable energy use per ton of CPO or palm product

in the mill. 2. There no specific action plan that has been established to improving the efficiency of fossil fuel con-

sumption within all schemes, mills and land holdings.

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 practice.

Findings: Felda has an SOP regarding Felling and Chipping of Palms which states that this shall be carried out with zero burning. From site visits to more recently developed areas (i.e. 2008 plantings), there is no ev-idence that land burning was carried out. Based on interviews with stakeholder such as RELA (a local volunteer organization) during the stakeholder consultation meeting, they confirmed that land burning is not carried out by the company. The company has documented contracts with contractors commissioned to carry out replanting activities, i.e. contract dated 7 May 2007 for the contractor Syarikat Kemajuan Berjaya which was commissioned to carry out replanting work at Lok Heng Timur, Division 1A. The con-tract includes requirements to carry out work mechanically through chipping without burning.



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As viewed at the workers housing area of Sg. Mas estate, there are notices stating that open burning is not permitted. Workers interviewed in the field said they were informed that land burning is not allowed and may be summoned if they carry out land burning. It was viewed from field visits that there is no evi-dence of land burning. There is evidence that smallholders are aware that land burning should be avoid-ed, and any cases of accidental land burning are reported to Felda management, i.e. a case of land burning was reported by the Block 5 group leader of Felda Tunggal during the monthly smallholders meeting held on 25 March 2010. From interviews with smallholders at Felda Tunggal, Papan Timur and Lok Heng Barat estate, the smallholders were aware that land burning is not permitted and understand the negative impacts of land burning. There is evidence that FELDA management has informed workers not to carry out burning of waste, as from interviews with workers at most estates, they had been in-formed by management on this. However, some harvesters interviewed at Lok Heng Barat estate are not aware of this and state that they occasionally burn wastes, and some scheme smallholders interviewed at Papan Timur also still carry out occasional burning of wastes. As the company has made efforts to in-form workers not to burn wastes, this was raised as an observation that the company should continue to ensure all workers are informed of this, and also ensure their scheme smallholders do not carry out burning of waste as well. Compliance status: Compliance with observations

Criterion 5.6: Plans to reduce pollution and emissions, including greenhouse gases, are devel-oped, implemented and monitored.

Findings: Sources of pollution and emissions were identified and documented. In Adela mill as a documented EAI (Identification of Environmental Aspects & Evaluation of Significance Form) for all mill activities, which was approved on 1 January 2010 and last updated on 17 January 2011 for activities pertaining to the bunch crusher. Lok Heng mill has a similar EAI document prepared on 15 January 2010 and to be re-viewed in April 2011. Sources of pollution and emissions in EAI documents includes greenhouse gases (GHG) such as methane (CH4) generated from the palm oil mill effluent pond, empty fruit bunch com-posting, carbon dioxide (CO2) from mill operations and transportation and emissions from the boiler and genset. All records of wastes generated are maintained at the ESH department and RSPO document center. Monitoring of quality of pollution and emission sources identified is conducted regularly and reported to the local government every six months, in line with local regulations. These include air emission monitor-ing results, mill effluent analysis results and noise levels. Records also shows that air emissions have decreased through regular maintenance of boiler and generator sets. Compliance status: Compliance with observations 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. Findings: Adela mill has a Social Impact Assessment (SIA) document dated 15 January 2011 made for the entire Adela complex which includes the Adela mill, Kledang 2, Sungai Mas, Adela, Tunggal, Sening, dan Kledang. The collection of information is done through three activities, namely: 1. Completion of questionnaires by employees, migrant workers and smallholder/ smallholder family (conducted on 15-30 December); 2. Open discussion with stakeholders (conducted on 2 August 2010), and 3. The collection of issues from the meetings of Felda’s Development and Safety Plan Committee (Jawa-tankuasa Kemajuan dan Keselamatan Rancangan - JKKR) and Joint Consultation Committee (JCC) (documented meeting from September to November 2010). Adela mill has documentation of a meeting dated August 6, 2010, held at Hotel Mayres, Johor to get feedback from stakeholders. Adela provided an explanation of the RSPO and the participants were asked to fill a questionnaire regarding the social im-



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pact of Felda. The documented SIA included negative issues and positive issues. The document also includes the company’s schedule for impact mitigation and monitoring developed from the results of the SIA. Em-ployees responsible for each issue have also been appointed. Some examples of mitigation that have been made include: 1. To minimize the negative impact of foreign workers' relationship with the community, in which man-agement of Kledang 2 estate shall provide orientation to new employees regarding disciplinary require-ments; 2. Installation of sign boards regarding ban on hunting in the estates, carried out by Kledang 2 between January to April 2011. There is evidence of that activities pertaining to the SIA has been carried out with the participation of affected parties, such as: photos of activities, list of attendees and the questionnaire completed by the stakeholders. Monitoring is done by various means/media, namely: JKKR meetings and stakeholder feedback. Lok Heng complex also has an overall SIA document which covers Lok Heng mill and Lok Heng Timur, Lok Heng, Papan Timur, and Lok Heng Barat estates. Information in the SIA was collected through three activities, namely: fill out questionnaires by employees, migrant workers and smallholder/ smallholder families (done on15-30 December); open discussion with stakeholders (done on August 2, 2010), and; collection of issues from the meetings of JKKR and JCC (meeting document from September- to No-vember 2010). The SIA document included negative and positive impacts as well as action plans to mitigate negative impacts. Employees are responsible for each issue has also been appointed. All relevant parties to the operation of the Lok Heng mill involved in development of the SIA included smallholders, employees and migrant workers, JKKK representatives, GPW representatives, and suppliers/ contractors. Compliance status: Full Compliance

Criterion 6.2: There are open and transparent methods for communication and consultation be-tween growers and/or millers, local communities and other affected or interested parties.

Findings: Both Adela and Lok Heng complexes have open and transparent methods for communication and consulta-tion with title “Communication, Participation and Consultation i.e. Document number FPI/L2/QOHSE-6.0 issued on 02 January 2008. The procedure is clear and is implemented, with evidence in the form of letters that were sent to all smallholder scheme leaders who then informed the scheme settlers on the responsible Felda representative for communications and consultations. There is filed evidence showing records of let-ters sent and minutes of meetings held with lists of attendees. There are details of the notification time to be given in advance of a meeting and the timeframe for the distribution of signed minutes. Monthly meet-ings with the scheme representatives are held and well documented with meeting minutes on file. All set-tlers also attend monthly Roll Calls. There is another meeting called “Jawatan kuasa Kemajuan dan Keselamatan Kampung” (Village Development and Safety Committee) which is conducted by the state government once every 3 month and attended by the Scheme Managers. The estate or mill manager is re-sponsible for communication issues. Another type of regular meeting held is the Joint Consultative Commit-tee (JCC) to discuss about issues related to the scheme members, estates and mill. JCC meetings are conducted on a monthly basis, all JCC minutes meetings are recorded and well documented. There are al-so meetings conducted by Felda’s Development Plan Committee (Jawatan Kuasa Kemajuan Rancangan- JKKR), Woman’s Association Movement (Gerakan Persatuan Wanita - GPW) and FELDA Malaysia Youth Council (Majlis Belia Felda Malaysia - MBFM) to discuss issues and development programs for the relevant stakeholders. There are 3 nominated plantation management officials at both complexes that have different functions as management representative i.e. communication to scheme member, communication to mill and communi-cation to other external parties. All scheme member and other interested parties have been informed on who are the elected management representatives.



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There is a list of stakeholders in both mills and scheme office, which updated yearly as stated on FELDA policy. The company’s procedure on “Stakeholder Updates” states that scheme managers will update their stakeholder list annually, however the procedure does not state clearly when this shall be done. This was raised as an observation. Compliance status: Compliance with observations 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. Findings: Felda has a process for resolution of complaints and grievances for internal use by workers and managers prepared by Felda Holdings personnel department. The mechanism showed an opened system for all scheme member, communities and workers to give complaints and resolving conflict in the plantation and mill operations. Copies of the procedure for resolution of complaints and disputes were distributed to all heads of schemes, scheme participants’ office and scheme managers’ office. The company has a complaints handling procedure. Any parties who wish to submit a complaint may do so via the form of complaints and complaints box provided by Adela and Lok Heng. In Adela Mill and Kledang 2, complaints are recorded in a complaints logbook. When an issue is raised, it is recorded on the log book by date, time, location, name, contact phone number, details of complaint, person who rec-orded the complaint, and action taken. But Lok Heng Mill did not have a log book with complaints due to the reason that there have been no complaints from stakeholders. Scheme Managers have been provide the necessary mechanism to deal with complaints and grievances by their participants and other stakeholders and the outcome is open to affected parties. Discussions on various matters relating to relations between smallholders and Felda Technoplant are done through the Replanting Committee (Jawatan Kuasa Tanam Semula - JKTS). JKTS meetings are held every month. In JKTS meeting, issues discussed include: estate replanting programs, estate development reports, as well as input from the heads of the scheme blocks on the work of Felda Technoplant. Current incoming complaints at the mill are mostly pertaining to calculation of FFB price, especially for OER and KER determination. The mill and scheme manages have plans to resolve this problem through discussion during the Join Consultative Committee meeting. Any complaints from workers also can be discussed during daily morning roll call (muster meetings). Compliance status: Full Compliance Criterion 6.4: Any negotiations concerning compensation for loss of legal or customary rights are dealt with through a documented system that enables indigenous peoples, local communi-ties and other stakeholders to express their views through their own representative institutions. Findings: There are no customary land users within Felda’s scheme or estates and no compensation claims. All legal land owners are only the scheme settlers that were allocated by Felda. Hence this requirement is not applicable. Compliance status: Not applicable

Criterion 6.5: Pay and conditions for employees and for employees of contractors always meet at least legal or industry minimum standards and are sufficient to provide decent living wages.

Findings: There are documented agreements between the two Felda complexes and their local as well as migrant



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workers, which includes the rights, and obligations of both parties i.e. salaries and conditions of em-ployment. The work agreements were made in Malay language, as seen from samples from Kledang 2 estate. However there is no special labour policy available for migrant workers. Several foreign workers at Lok Heng Timur estate also did not have documented contracts with the company. Payment slips are provided every workers during salary payment. As viewed from sample payment slips for November 2010, the details on the payment slips include basic salary, employee provident fund (EPF), social security (from the Social Security Organization or SOCSO), incentives, tax deductions, shift allowance, and overtime payments. Pay conditions is described in a collective agreement between FELDA Palm Industries Sdn. Bhd and Felda Trade Union dated 1 January 2010 to December 2012. The company provides facilities for employees. In both Adela and Lok Heng, facilities provided include housing for workers, mosque, women clubs, sports facilities (badminton), a football field, schooling (pri-mary and secondary), religious schools and there are nearby government clinics which workers go to. There is a circular from Felda’s corporate affairs department stating the rights of workers and staff to use these facilities. The company also provides subsidies for water and electricity to every worker’s home. Pay for workers at all estates is deducted for water, which is not in accordance the Workers Minimum Standards of Housing & Amenities Act 1990 - Clause 6(a) which states that free water should be provided to all work-ers except where permission is granted by the Labour Department. As this was raised during an RSPO pre-audit conducted in November 2010, Felda Plantations has applied to the Labour Department for permission to deduct worker's pay for water according to the estate's guidelines for worker's dormitories. According to these guidelines, workers usage of water is subsidized RM4.00 a month while payment for excess water usage is deducted from worker’s pay. Progress of approval shall be monitored at next sur-veillance audit. Based on interviews with workers, water & electricity supply at housing is sufficient and deductions for water are reasonable (no deductions for electricity). There are records that workers have signed agreements to pay deductions for water and electricity. Compliance status: Non-Compliance See NCR No. 15 of 16 There is no special labour policy available for migrant workers. Several foreign workers at Lok Heng Timur estate did not have documented contracts with the company. 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 collec-tive bargaining are restricted under law, the employer facilitates parallel means of independent and free association and bargaining for all such personnel. Findings: Felda respects the right of all personnel to form and join trade unions of their choice and to bargain collectively. There is documented evidence of a general meeting of FPISB’s worker union at Adela Mill, on 14 May 2010. At Kledang 2 estate, there are documented minutes of committee meeting on the wel-fare and workforce management on 31 October 2010. Sample minutes of a meeting of union workers Felda from Johor Southern branch on July 10, 2009 were sighted. One of the points presented are the proposals of the workers making new homes for workers. The proposal has been implemented by Felda, but not completely fulfilled and only limited to renovation of damaged houses. This is evidence that Felda takes into consideration and takes action on the requests and feedback from their trade union. As scheme managers, FELDA also respect to the right of scheme participants to form and represent themselves through their own representative associations and / or trades unions and accept them as parties to participatory processes, consultations, communications and negotiations in the management of the scheme. Felda also has a policy related to the freedom to be members of voluntary organizations. In the policy, it is stated that Felda does not prevent employees from participating in trade unions, volunteer activities, recreation, sports and social activities outside of working hours. Any activity that requires the workers to take leave should be discussed with senior management of their area and permission to take leave for such activities is at the discretion of the manager of the area after taking into account the needs and in-terests of the workers.



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Compliance status: Full Compliance

Criterion 6.7: Children are not employed or exploited. Work by children is acceptable on family farms, under adult supervision, and when not interfering with education programmes. Children are not exposed to hazardous working conditions. Findings: Felda has a policy that the company will not employ or exploit children. There is a document dated June 2, 2010 which declared a ban on employing children under the age of 16 years. Children under the age of 16 years are only allowed to assist the smallholders work as long as it does not interfere with their schooling and education. Based on checks of employment records, both for local employees and foreign Workers, no employees who are aged less than 16 years old were found. For example, there is data list-ing names of employees of Adela Mill and Kledang 2 Plantation that contains the date of birth and year of entry to work in the company. No employees who were under 16 years were found from employee records and from on-site checks and interviews of workers in the field. Compliance status: Full Compliance

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.

Findings: Both Felda complexes have an equal opportunities policy that states the company will give equal treat-ment to anyone regardless of his or her background. There is no evidence or complaints of discrimina-tion by employees or migrant workers, who are given pay and benefits equivalent to their experience, position and number of years worked. As a form of positive discrimination, Felda’s settlers are selected from the Malay rural poor as a way to help to build up this poor community. However, there is no evidence that the company’s policy for equal opportunity has been publicly pub-lished and that stakeholders are aware of the policy. Compliance status: Non Compliance see NCR No. 16 of 16 There is no evidence that the company’s policy for equal opportunity has been publicly published and that stakeholders are aware of the policy.

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.

Findings: The management of FELDA has signed a policy to prevent sexual harrassment signed by General Director of FELDA on December 20, 2010. The policy to prevent sexual harrassment is also stated on company regulation. However the policy only focuses for sexual harrassment, but there is no specific statement on the policy regarding prevention of violence against women. This was raised as an observation. Adela Mill assigned a gender committee to facilitate grievances from workers, and a flow process for grievance handling has been established, although the mechanism still not explain how is records of any process for handling grievances or any disputes between workers shall be maintained. The flow chart has been informed to female workers although based on interviews with female workers, their understanding of the process could be improved further. The company has set rules regarding female workers who will take maternity leave. Leave granted to women who have entered the age of 28 weeks gestation with the leave of absence granted for 60 work-



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ing days. Compliance status: Compliance with observations

Criterion 6.10: Growers and mills deal fairly and transparently with smallholders and other local businesses.

Findings: Smallholders who sell FFB to FELDA mills (such as Adela and Lok Heng) are provided information on the FFB pricing mechanism in a "Manual of Oil Palm Fruit Grading" issued by MPOB (Malaysian Palm Oil Institute) in 2006. Price information from this manual is used as a reference for Adela and Lok Heng mills. Adela buys FFB from smallholders at a higher price than FFB supplied by other suppliers because smallholders are not permitted to sell their FFB to any other palm oil mill. Adela and Lok Heng display in-formation on the current day and previous day’s FFB prices at the front of the mill’s weighbridge. There is evidence that both Felda complexes establish contracts with contractors, i.e. both Adela and Lok Heng mills will issue Job Orders to selected contractors and have working agreement/ jobs contract with the selected contractors which includes determined terms and conditions for both parties. Kledang 2 ensures that the terms and conditions are informed to the contractor and based on interviews with con-tractors, it was confirmed that they understand the terms and conditions of their contracts. Scheme Managers are responsible for fair and transparent deals with participants and other local businesses. Each smallholder will receive a document stating amount of sold FFB and records of out-standing debt payments to Felda. Technoplant also allow smallholders to decide when they wish to carry out replanting on their own plot that are of the right age for replanting. There are Monthly Revenue Report documents, namely Palm Listings Results from 01-01-2011 to 31-01-2011 for every smallholder, as viewed from samples at Tunggal estate. Tunggal estate also has a document, “Oil Prices for Peninsular Malaysia, Sabah and Sarawak.” that became the reference price of palm oil for Adela Mill. Technoplant schedules road repairs each year and consider proposals from the smallholders. There have been no complaints from smallholders regarding road maintenance. Compliance status: Full Compliance

Criterion 6.11: Growers and millers contribute to local sustainable development wherever appropri-ate.

Findings: The whole ethos of Felda is to help with the development of local communities. Felda provides various fa-cilities to scheme smallholders, including schools, houses, sports facilities, medical facilities, mosques, and so on. Felda allocates 10% 0f its profit for the CSR projects and small township is created at Felda schemes to ensure surrounding community development. There is also documentary evidence of payment of land tax and income tax paid to the government in Kledang 2 estate and all scheme, Adela and Lok Heng mills also provide contributions to the construction of public facilities in the smallholders complex. Local development plans are discussed during the JKKR forums, and GPW meetings to provide support and funds for small businesses such as food and beverage businesses and household industries. Compliance status: Full Compliance



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Principle 7: Responsible development of new plantings

Findings: Principle 7 is not applicable as there are no new plantings within Adela or Lok Heng complex. All areas re-planted since year 2005 were already previously planted with oil palm and had only undergone replanting. Compliance status: Not applicable

Criterion 8.1: Growers and millers regularly monitor and review their activities and develop and implement action plans that allow demonstrable continuous improvement in key operations.

Findings: There is evidence of plans to minimize use of certain pesticides, especially paraquat. As described un-der CR 4.6, all estates have received an internal memo from the operational head of Johor Bahru region regarding reduction of usage of chemicals, especially paraquat. The letter includes guidelines to reduce usage of chemicals such as reducing frequency of spraying rounds as required, reducing the rate of us-age of agrochemicals if the field is in good conditions and to avoid use of paraquat or use other chemi-cals when possible. The mill and estates also has plans to reduce environmental impacts as well as maximizing recycling and minimizing waste or by-products generation, as described under CR 5.1 and 5.3. The mills have documented environmental objectives which are reviewed annually. Achievement of objectives is moni-tored by respective personnel and reviewed during monthly meetings. The estates also implement recy-cling of chemical containers and fertilizer bags, however, aspects of their documented action plan for 3R (reduce, reuse, recycle) of other wastes is not yet being fully implemented, such as collection of recycla-ble materials (paper, plastic, glass, etc.) by a suitable contractor and conversion of domestic waste to compost. However, as this plan was developed for year 2011, implementation will be monitored during the next surveillance audit, and this was raised as an observation. The company’s management of scheduled wastes also requires improvement and this was already raised as a non-conformity under CR5.3. The estates have a mechanism to capture the performance and expenditure in social and environmental aspects. For example, Felda Kledang 2 has an Income and Expenditure report prepared on a monthly basis which includes information on all operational expenditure, including expenditure for social and en-vironmental aspects. Viewed from the report for Nov to Dec 2010, expenditure records for: measurement of river boundary, soil & water rehabilitation activities, road and drains maintenance, terracing, workers incentives and other contributions to workers. Other records maintained includes records of all expendi-ture, including for social and environmental aspects, i.e., allocations for JKKR and GPW allowances, rubbish collection for villages, donation fund for smallholders children, and Hari Raya incentives. Compliance status: Compliance with observations

3.2 Identified Non-conformances, Corrective Actions Taken and Auditors Conclusions A total of 16 nonconformances were identified during the main certification assessment. These consisted of 3 major non-conformities and 13 minor non-conformities. For the major non-conformances, the company 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 document verification submitted by the company. For the minor non-conformances, the company has taken corrective action against these as well, and for those which could not be verified as closed through document checks, the closure of these minor non-conformities will be assessed during the next surveillance audit. A summary of all identified non-conformances, corrective actions taken and auditor conclusions is as below:

Criterion 1.2 : Management documents are publicly available, except where this is prevented by commercial confidentiality or where disclosure of information would result in negative envi-ronmental or social outcomes. This concerns management documents relating to environmen-



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tal, social and legal issues that are relevant to compliance with RSPO criteria.

Non-conformance no. 1 of 16 (Minor non-conformity): There is no evidence that stakeholders have been informed on which company’s documents are publicly available / accessible to stakeholders in Lok Heng Mill.

Corrective Action: A notice board was displayed in a factory canteen, inform about latest version of company’s policies and procedures, including Communication, Involvement and Consultation Policy, which lists all publicly availa-ble documents which can be obtained from the plant manager. These documents include the following: Internal letters and memo (b) Monthly Management Meeting Minutes (c) OSH Meeting Minutes (d) Suggestions from workers (e) Written comments from outside stakeholders (f) Complaints investigation reports (g) Written responses to stakeholders (h) Mill incoming/outgoing mail records (outside communications) (i) Land titles user rights (j) Health and safety plan (k) Plans and impact assessments relating to environmental and social impacts (l) Pollution prevention plans (m) Details of complaints and grievances (n) Negotiation procedures (o) Continuous improvement plan Auditor Conclusions: Plan for corrective action accepted, effectiveness of implementation to be verified during next audit The Communication, Involvement and Consultation Policy was provided including photographic evi-dence that the policy was posted on notice boards.

Criterion 2.2.1: Evidence of legal ownership of the land including history of land tenure.

Non-conformance no. 2 of 16 (Minor non-conformity): Progress of application for legal land ownership or land use right to manage 257.47 hectares of plant-ed wetlands area in Papan Timur estate has not been monitored since year 2007. Corrective Action: The program manager has issued letter to Felda land Department, FELDA head office, asking for Land Grant certificate from the Johor Land Officer Auditor Conclusions: Plan for corrective action accepted, effectiveness of implementation to be verified during next audit Observation: A copy of the letter to the Johor Land officer was provided. However there is no evidence that the letter has been received by the Johor land officer. Follow-up action taken shall be verified during next surveil-lance audit. Criterion 3.1 SS Guidance: Scheme managers have a documented management plan (minimum 2 years) which is shared with them or their elected representatives.

Non-conformance no. 3 of 16 (Minor non-conformity): Scheme managers have a documented Budget Plan / smallholder scheme management plan (mini-mum 2 years) for years 2011 and 2012. However as discussed with smallholder representatives from



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each scheme, the company has not shared the management plan with scheme smallholders. For Lok Heng Barat and Lok Heng Timur, budget and management program is only available for year 2011 (less than 2 years) Corrective Action: All FELDA projects listed have provided a work program for year 2012 (with estimated costs) and it will be discussed during JKKR / JKKK meetings (smallholder meeting) Auditor Conclusions: Plan for corrective action accepted, effectiveness of implementation to be verified during next audit Documented 2 year budgets/ work programs for all projects were provided Criterion 3.1.2. Annual replanting programme projected for a minimum of 5 years with yearly re-view.

Non-conformance no. 4 of 16 (Minor non-conformity): There is no summary of all land use data (in hectares) for all scheme smallholder locations, which is in-clude the following information: Total area of each estate. Planted and non-planted areas. Mature & immature areas Conservation / HCV areas.

Areas used for other purposes, such as housing, offices, other infrastructure, etc. Corrective Action: All FELDA projects under Adela and Lok Heng has made summary data for all land used Auditor Conclusions: Plan for corrective action accepted, effectiveness of implementation to be verified during next audit Summary land use was provided and includes information about total planted area for each project, planted and non planted area, mature and immature area. There is no information about protected area as HCV area due to no present HCV area inside project locations. Criterion 4.3.4 : Subsidence of peat soils should be minimised through an effective and docu-mented water management programme.

Non-conformance no. 5 of 16 (Minor non-conformity): FELDA Kledang 2 estate has established two subsidence level points and water table monitoring points at peat soil areas, however, there is no documented water management programme to minimize sub-sidence level of peat soils Corrective Action: Documented water management plan has been provided, including record of monitoring of peat sub-sidence. Auditor Conclusions: Plan for corrective action accepted, effectiveness of implementation to be verified during next audit Documented water management plan has been provided, including record of monitoring of peat sub-sidence. Criterion 4.3.5: Best management practices should be in place for other fragile and problem soils (e.g. sandy, low organic matter and acid sulphate soils)

Non-conformance no. 6 of 16 (Minor non-conformity): There is evidence that techniques to manage fragile/ marginal soils is not being well implemented, as a high level of soil erosion was observed at sandy areas of Sg. Mas estate, such as at lot no. 7806 and smallholders land adjacent to Sungai Mas riparian zones.



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Corrective Action: The company uses cover crop for land with certain slope, hilly areas and contoured areas such as ri-parian river buffer zones. This mechanism was explained to smallholder during JJKR/JKKK monthly meeting. The mucuna bracteata already selected as cover crop in the slope area.

Auditor Conclusions: Plan for corrective action accepted with observation, effectiveness of im-plementation to be verified during next audit Observations and improvements required: Evidence has been provided such as photos and the program, however there is no formal mechanism for management of fragile / marginal soils e.g. standard operating procedure (SOP) provided. The company has been advised to prepare and implement the SOP and implementation will be verified dur-ing the next surveillance audit. Criterion 4.4.1: Protection of water courses and wetlands, including maintaining and restoring appropriate riparian buffer zones at or before replanting along all natural waterways within the estate. Non-conformance no. 7 of 16 (Major non-conformity): It was observed on-site that agrochemicals are still applied at riparian buffer zones as seen on block no. PM 86 B and PM 08M. This is not in accordance with the company’s policy to protect of water courses and wetlands, including maintaining and restoring appropriate riparian buffer zones and the company’s action plan for HCV areas, which states that the company will not apply agrochemicals at the riparian zone. Corrective Action: Project managers have placed sign boards regarding restriction for agrochemical application along the riparian watercourses at division PM86B and PM08M. Sprayers have been informed during roll call not to carry out spraying at river buffer zones. Auditor Conclusions: Plan for corrective action accepted with observation, effectiveness of im-plementation to be verified during next audit Observations and improvements required: Evidence for CR4.4 provided by the company does not show that the company has policy regarding re-striction for agrochemical application on riparian river. Meeting minutes were provided but also did not include any records that proper methods of agrochemical application (no application near river) were discussed during meeting with smallholders. Records and evidence of implementation will be verified at next surveillance audit. Criterion 4.7.d: The appropriate personal protective equipment (PPE) is used for each risk as-sessed operation. i. Companies to provide the appropriate PPE at the place of work to cover all potentially haz-ardous operations such as pesticide application, land preparation, harvesting and if used, burn-ing. Non-conformance no. 8 of 16 (Minor non-conformity): There are contracted workers that observed that are not wearing appropriate PPE, for example, fruit transport contractors were not wearing any PPE (safety helmet & boots) at Lok Heng mill. This is not complying to the mill’s procedure FPIPK-048 'Prosedur Kontractor, Pembekal, Pemborong dan Pelawat' that contractors and visitors are required to wear PPE. Corrective Action: The mill management has placed sign boards to remind all suppliers and visitors to use appropriate pro-tective equipment each time they enter into the mill area. The mill manager is working with Prodata (Felda’s IT company) to including a clause for acknowledgement of compliance to PPE usage when taking the gate pass



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Auditor Conclusions: Plan for corrective action accepted, effectiveness of implementation to be verified during next audit Photos of signboards were provided Criterion 4.7.1.b: All operations have been risk assessed and documented.

Non-conformance no. 9 of 16 (Minor non-conformity): Identification of risks pertaining to chemical mixing is not included in the estate’s HIRARC (Hazards Identification, Risk Assessment & Risk Control). Corrective Action: As stated in the company HIRARC procedure, the company will conduct periodic assessment once a year. All activities that still not included in year 2010 assessment will be included on new hazards iden-tification, risk assessment and risk control document, including chemical mixing activities. Auditor Conclusions: Plan for corrective action accepted, effectiveness of implementation to be verified during next audit Observation and improvements required: The HIRARC for some estates was provided, but for Tunggal and Sg. Mas estates, chemical mixing is not included yet in the revised HIRARC provided by the company. FELDA has been advised to ensure that HIRARC are revised accordingly and this will be verified during surveillance audit. Criterion 5.1.2 : Scheme Managers should undertake and document aspects and impacts risk assessment, developed with the participation of the representatives of organized smallholders that sets out appropriate management planning and operational procedures for each impact identified. For significant impact time bound action plans and operational procedures should be drawn to mitigate the negative impacts. The impact assessment should cover: - Building and maintenance of roads to service smallholdings and provide access to mills �- Putting in drainage or irrigation systems. -� Replanting or expansion of smallholdings. - Clearing of remaining natural vegetation and the need to avoid the use of fire (see 5.5). Non-conformance no. 10 of 16 (Minor non-conformity): The Environmental Aspects and Impacts Analysis (EAI) document for all estates does not includes identification of environmental aspects of many common estate activities e.g. building and maintenance of roads, drainage and irrigation systems, replanting activities, clearing of natural vegetation, nursery, management of rhinoceros beetles, terracing, office and housing activities, and final disposal of used chemical containers Corrective Action: As stated on procedure Environmental aspect and impacts analysis, company will conduct periodic as-sessment once a year, all activities that still not included in year 2010 assessment will be included on Environmental aspect and impacts analysis year 2011. The activities not included in the EAI analysis will be included in June 2011 Auditor Conclusions: Plan for corrective action accepted, effectiveness of implementation to be verified during next audit Observation: Revised EAI document were provided for most estates with adequate revisions to include previously uni-dentified activities, except for Sening estate where there is no change from previous version of the EIA (no new activities are added). Also, EAI for Lok Heng Selatan was not provided. The organization has been advised to ensure all EAIs are revised accordingly and this shall be checked at next surveillance audit.



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Criterion 5.2.1: Iidentification and assessment of HCV habitats and protected areas within land-holdings; and attempt assessments of HCV habitats and protected areas surrounding landhold-ings. Non-conformance no. 11 of 16 (Major non-conformity): The HCV assessment was not conducted using appropriate methodology to obtain correct results, as it was found during field visits that there are many species birds in Kledang 2 estate which were not iden-tified in the HCV assessment. There is no information found in HCV document regarding the ERT sta-tus of birds, the plantation condition of identified HCV areas has still not been determined, some HCV areas identified are not actually under FELDA’s management and the HCV management plan still not sufficient to protect defined HCV ‘s values. Corrective Action: A new HCV assessment has been conducted, involving relevant stakeholders such as local communi-ties, local institution and existing indigenous people. The new document HCV has been provided by Sustainability Department, Felda Agricultural Services Sdn. Bhd- Pusat Perkhidmatan Pertanian Tun Razak. Assessment scope including all schemes under Lok Heng and Adela planning group. Two types of potential HCVs were identified, i.e. HCV 1 and HCV 4 the location permit boundary of FELDA Lok Heng group smallholder and Adela group stallholder. Elements for HCV 1 are the existence of some animals that listed no 1 and 2 Malaysian act &16 and IUCN with status lest concern. The im-portant elements for HCV 4 are related to the potential damage from erosion riparian of Sungai Mas river and Sungai Lebam River. Auditor Conclusions: Closed The company provided the new HCV document, and information in new HCV document was verified, and found to be sufficient. The company has made a management plan for all potential HCV area. Criterion 5.3. SS Guidance: Scheme managers should develop and implement an appropriate plan for the management and disposal of waste from smallholdings including the safe disposal of pesticide containers (e.g. National Programme on recycling of used HDPE pesticide contain-ers). Scheme managers should encourage/ educate participants to use resources efficiently apply reduce, reuse, recycle methods wherever feasible/possible Non-conformance no. 12 of 16 (Minor non-conformity): 1) There is evidence that workers at Sg. Mas estate and Lok Heng Barat estate are improperly in-

formed on proper management of HDPE containers. It was found at worker's housing at both es-tates that several empty chemical containers were left in the open and being reused for purposes other than chemical containment.

2) Tunggal estate does not maintain inventory of chemical containers, as required the company’s procedure for identification and management of wastes (no. MR 5.3/2009)

3) Management of scheduled waste at mill needs to be improved to comply with the Environmental Quality (Scheduled Wastes) Regulations 2005, e.g.:

- At Adela Mill, empty paint cans were left in open area at mill fertilizer bagging store

- Several oil contaminated cloth gloves were found on the ground around Lok Heng mill compound and several used oil containers next to workshop were not kept in scheduled waste store. Com-puters parts were disposed at the effluent treatment pond area of Lok Heng Mill

- Lack of appropriate hazard signs at the SW store at Lok Heng mill Corrective Action: 1. A campaign to explain safe recycling methods for pesticide containers were Sg. Mas hall for all set-

tlers in Complex Lok Heng & Adela) 2. Ladang Tunggal had traced back the inventory to a level possible as an immediate correction. The

manager ensured that in future Procedure no.MR 5.3/2009 will be adhered and record will be kept up-to-date.



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3. Although schedule waste store facilities exist, on the day the incident was caused by the negli-gence of employees. However Lok Heng Factory has made a verbal notification to all employees to comply with regulations. Adela factory had a special container for collecting SW409 (for empty paint tins), and it will be disposed of regularly by a registered contractor with the DOE and training will also be given. 16 additional warning signs were added to the scheduled waste store.

Auditor Conclusions: Plan for corrective action accepted, effectiveness of implementation to be verified during next audit Adela mill provided photographic evidence that specific containers for schedule waste collection (SW409) for used paint can were made available and the paint cans at the fertilizer bagging store were removed and stored as scheduled waste. Lok Heng provided a photo of meeting held with worker to in-form on proper scheduled waste disposal with attendance list. Implementation to be verified during next surveillance audit. Criterion 5.4.1: Monitoring of renewable energy use per tonne of CPO or palm product in the mill.

Non-conformance no. 13 of 16 (Minor non-conformity): Lok Heng mill is not carrying out analysis of renewable energy use per ton of CPO or palm product in the mill. Corrective Action: The analysis on renewable energy for Lok Heng has been prepared in graphical form Auditor Conclusions: Plan for corrective action accepted, effectiveness of implementation to be verified during next audit Observations: Lok Heng provided a graph with information on steam production and shell and fibre usage from June 2010 to March 2011. But the data provided is in metric tonnes and not in energy use per ton of CPO or palm product. The organization has been advised to revise the data and this shall be verified at next surveillance audit. Criterion 5.4.2: Monitoring of fossil fuel use per ton of CPO or kW per tonne palm product (or FFB where the grower has no mill).

Non-conformance no. 14 of 16 (Minor non-conformity): There no specific action plan that has been established to improving the efficiency of fossil fuel con-sumption within all schemes, mills and land holdings. Corrective Action: Diesel consumption for all operational transportation will be monitored and recorded in a log book. There will be investigation if found any over consumption. Actions taken to improve the efficiency of fuel use are: - 1. Maintain vehicles (e.g.: engine, tire condition, etc.) according to schedule service to ensure good performance of oil consumption 2. Maintain agricultural roads according to specifications to always be in good condition so vehicles travel more smoothly. (As explained in FELDA’s Sustainable Palm Plantation Manual) 3. Vehicle engines are to be switched off during loading or unloading of FFB is done. 4. Supervisors are to ensure that truck capacity is not exceeded are affordable (As explained in FELDA’s Sustainable Palm Plantation Manual) Auditor Conclusions: Plan for corrective action accepted, effectiveness of implementation to be verified during next audit Observation: Adela mill has provided diesel monitoring records but no such diesel monitoring records provided by Lok Heng mill or schemes. Evidence of implementation of the action plan to be verified during next sur-



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veillance audit.

Criterion 6.5. SS Guidance: Where temporary or migrant workers are employed, a special labour policy should be established. This labour policy would state the non discriminatory practices; no contract substitution of original contract, post arrival orientation program to focus especial-ly on language, safety, labour laws, cultural practices etc; decent living conditions to be pro-vided. Migrant workers are legalised, and a separate employment agreement should be drawn up to meet immigration requirements for foreign workers, and international standards, if rati-fied. The Managers should educate the participants on legal obligations in employing workers on their plot/land.: Non-conformance no. 15 of 16, 2011 (Minor non-conformity): There is no special labour policy available for migrant workers. Several foreign workers at Lok Heng Timur estate did not have documented contracts with the company. Corrective Action: The labour policy was provided. As evidence of receipt of contract, all new workers shall be required to sign a confirmation of receipt of contract before starting work at FELDA projects. Evidence of contracts is kept at the office with a list. Auditor Conclusions: Plan for corrective action accepted, effectiveness of implementation to be verified during next audit Observations and improvements required: A special labour policy has been provided for migrant worker, which states that migrant workers shall be paid according to a Productivity Linked Wage System (PLWS) so that the workers have sufficient savings to bring back their respective villages. However, the labour policy does not include information regarding non discriminatory practices; no contract substitution of original contract, post arrival orienta-tion program to focus especially on language, safety, labour laws, cultural practices etc.; decent living conditions to be provided. The company has been advised to revise the labour policy and this will be verified during the next audit. Lok Heng Timur estate, Sg. Mas estate and Tunggal estate provided a list of workers that had signed a list to confirm that they have received and signed a working agreement with FELDA Technoplant. Other schemes have not provided a similar list. Implementation to be verified during next surveillance audit.

Criterion 6.8.1.: A publicly available equal opportunities policy.

Non-conformance no. 16 of 16 (Major non-conformity): There is no evidence that the company’s policy for equal opportunity has been publicly published so stakeholders are aware of the policy. Corrective Action: The policy has been publicly published on RSPO information board at every project under Adela and Lok Heng. Auditor Conclusions: Plan for corrective action accepted, effectiveness of implementation to be verified during next audit Photographic evidence that the policy was posted on notice boards have been provided.

3.3 Noteworthy Positive Components



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Criterion 4.6

Scheme smallholders interviewed generally have a good basic understanding on techniques to manage estate area to reduce environmental issues, i.e. reduction of chemicals such as paraquat.

Criterion 6.11

Findings: FELDA has made many positive contributions to development of the local communities.

3.4 Issues Raised by Stakeholders and Findings Pertaining to Issues A) Issues Raised during Stakeholder Consultation Meeting

No. Issues Raised Management Response Audit Verification

1

- Does Felda implement controlled land burning or zero burning during plant-ing? - Felda has done a good job in terms of implementa-tion of SOP but it is sug-gested that they follow the Natural Resources and Environment Board’s (NREB) guidelines as be-ing implemented in Sabah and Sarawak

-Felda implements zero burning policy and follows Asean Guideline on Zero Burning during replanting. - Felda’s SOP has been and will be updated with better practices from time to time based on site suitability and practicality.

Felda has an SOP regarding Felling and Chipping of Palms which states that this shall be carried out with zero burning. From site visits to more re-cently developed areas (i.e. 2008 plantings), there is no evidence that land burning was carried out. Based on in-terviews with stakeholder such as RELA (a local volun-teer organization) during the stakeholder consultation meeting, they confirmed that land burning is not carried out by the company. However, some smallholders are carrying out burning of domestic waste as found in some housing area, and this was raised as an observation. NREB requirements are only applicable for the state of Sa-rawak, not Johor where Adela and Lok Heng are located.

2

FELDA no longer carries out land burning on its own company estates but the smallholders do occasion-ally

The settlers are made aware of not to do open burning by various means, but some still do. It always takes some time to implement change. FELDA is trying to get them back into its management for effective implementation of good agricultural practic-es.

For scheme smallholder plots managed by Felda, the com-pany implements land clear-ing through zero burning. However, some smallholders choose to become independ-ant now, and their plots are no longer managed by Felda. Hence these independent smallholders may carry out occasional land burning as they do not have the same resources as the company to



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carry out land clearing through zero burning.

3

Lok Heng & Adela are close to the sea, where il-legal immigrants come to Johor easily. There are complaints from local communities that FELDA takes illegal immigrants as workers.

Felda do not employ any il-legal workers directly or indi-rectly (through contractors). -Foreign labour intake is co-ordinated thru a special unit adhering to legal require-ments. If it occurs it is be-yond our knowledge -There would not be any re-striction for RELA to carry out its duties bestowed un-der applicable law/s.

There was lack of evidence of illegal workers. Work docu-ments for selected inter-viewed workers were valid and they had a legal permit for entering Malaysia through worker agent.

4

FELDA is required to re-port all new workers, whether local and migrant workers, to RELA or the police. According to the Immigration Act 1999 amendment 2005, RELA has authority to check worker’s permits, immigra-tion documents and insur-ance records. RELA will always provide advice and will conduct operations against illegal foreign workers but RELA needs full co-operation from FELDA as well.

Full list of workers is always given to Police and updated whenever there is a new in-take. We will always cooperate to government agencies to en-sure all legal requirements are met.

No verification required as this was a request / reminder from the police and RELA

5

There have been no cases of serious injuries or deaths among FELDA’s workers. However, some-times FELDA does not re-port accidents or thefts to RELA or the police. The company should report such incidents and work closely with RELA.

We realise good cooperation amongst us is vital for a safe and secure society and it is the responsibility of all agencies including FELDA. We welcome your coopera-tion. Report will be lodged if it warrants.

Explanation accepted

6

- Elephants sometime en-ter Lok Heng’s area as it is close to elephant habitat, which is becoming more sparce. To prevent con-flicts between humans and the animals, FELDA was advised to install electric fences or build large drains to prevent elephants from entering. There are com-plaints on wildlife disturb-ance and this needs to be addressed quickly - Awareness and applica-tion of the Wildlife Conser-

-It is common for animals to roam for food. The inci-dences were higher during immature stage of plantings. The damages have reduced as palm ages. There were no ‘real damages’ to both parties now. Occasionally there were some wild boar damages but the manage-ment employs physical con-trol methods (e.g. within chicken mesh, barb wire, Zinc plate, etc.) during plant-ing.The electric fencing and drains are remnants of

Verified in field Lok Heng Se-latan, FELDA has install elec-tric fence and water drains to prevent elephant from enter-ing. Some signboard regarding hunting prohibition is availa-ble in several locations espe-cially nearby housing area and main road.



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vation Act 2010 (No 716) needs to be stressed be-cause the estate has many wildlife and this encour-ages illegal hunters to take advantage. FELDA’s co-operation is requested to provide information on ille-gal hunters. This act is un-der trial until 28/6/2011.

- PERHILITAN requests feedback from the FELDA on control of pests such as wild boar, monkeys etc., and rate of disturbance to humans and plantings.

- Any land development plans must be discussed with PERHILITAN to de-termine effect on wildlife habitat.

those installed/constructed during main plant-ing/replanting. - Signboards prohibiting hunting has been erected at strategic locations. Felda will inform PERHILITAN if any ille-gal hunting is noticed in field. -Surely PERHILITAN will be sought for their input on any new developments.

7

When RISDA tried to apply for a license from MPOB for operations of a FFB weighing station by the Small Farmers Coopera-tion of Johor Bahru located Mawai Baru Village, FELDA did not permit ac-cess of the operation and this resulted in MPOB not providing a license.

FELDA is responsible for the socioeconomic wellbeing of the settler’s family. The presence of an independent FFB buying station will at-tract FFB theft/sale. If it is so crucial it should have been brought to the attention of the FELDA-RISDA-that en-courages sharing of our re-sources. Probably MPOB considered this in evaluating RISDA’s proposal

Explanation accepted.

8

FELDA management has given good support but need to be improved. When FELDA’s managers change, the company’s policies change as well, and RELA finds this diffi-cult

FELDA’s policy does not change as the managers change, the style of man-agement may change.

Explanation accepted

9

There are foreign workers without documents or un-registered in FELDA’s ar-ea. FELDA should monitor this closely and provide in-formation regarding illegal foreign workers to the po-lice. They were identified to be involved in crime cases and stay with their friends in hostels. If there is an ar-rest, the responsible per-son will charge for hiding the illegal workers

Our staffs do check workers quarters for the presence of any illegals and FELDA will inform the relevant authority if found any. The police can also inform us if there is any news of the presence of illegals around this area and FELDA is ever ready to assist Police in nabbing them

Refer to explanation under point no. 3



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10

FELDA is request to have one hydrant at each 100m in housing areas and to consult or notify BOMBA if there is any new construc-tion in the area

-The piping & hydrant sys-tem is under the jurisdiction of the fire department (BOMBA) -BOMBA will always be noti-fied through relevant author-ities to check and provide a certification of fitness for any building erected by the management.

Explanation accepted, will verified during next audit.

11

The Veterinarian depart-ment provides advice on methods of managing live-stock in oil palm planta-tions dan programs to pre-vent spread of disease among livestock and to humans, e.g. hand & mouth disease.

We are aware and thank you for the good service rendered.

No verification required.

12

What is the impact to the watershed of Sungai Leb-am generated from FELDA activities?

The water sample analysed in Adela did not indicate any deterioration in water quality arising from FELDA activity.

Verified from the water quality monitoring results, the results comply with government regula-tions.

13

FELDA has no good per-formance for safety and health especially for sub-contractor worker in Mills and Plantation

Safety & health is of concern of both parties. The man-agement has given ade-quate training to contractors and in future will include subcontractors also. The worker/contractor should also assume respon-sibility for their own safety.

Awareness for safety and health should be improved especially among workers at the palm oil mills. It was found that several workers at the mill are still not wearing their PPE and this was raised as a non conformity under Section 3.2.

14

FELDA is number 1 in the world to improved liveli-hood and welfare in Ma-laysia since 1979.

Thanks for the compliment. No verification required.

15

Please check riparian buff-er zones surrounding FELDA river such as Sungai Lebam, as there is no green belt in the ripari-an to protect water sources from contamination due to agrochemical application.

Riparian zones are being restored along main rivers (width > 3m). Assessments conducted by the FELDA research station did not de-tect presence of agrochemi-cals in streams.

It was observed on-site that agrochemicals are still ap-plied at riparian buffer zones as seen on block no. PM 86 B and PM 08M. This is not in accordance with the compa-ny’s policy to protect of water courses and wetlands, includ-ing maintaining and restoring appropriate riparian buffer zones and the company’s ac-tion plan for HCV areas, which states that the compa-ny will not apply agrochemi-cals at the riparian zone. This was raised as non-conformity no. 7 under Section 3.2.

16 The number of dengue Regular ‘gotong royong’ No verification required as



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cases in FELDA, are still low, including Cikungunya disease

(community clean-up) in schemes has helped.

this is a positive comment

17

I have been Felda’s vendor for more than 3 years performing various jobs. Felda always pays on time between 1st to 7th day of every month. Training about safety and health has been provided. Contractors have their own protective equipment.

Amongst the standard pro-cedures in FELDA.

There are some contracted workers at the mill and scheme estates that were ob-served not wearing appropri-ate PPE, and for the mills this was raised as a non-conformity.

18

During replanting program, some smallholder (not more than 10%) decide not to include their plots in FELDA’s replanting plan. There is no objection from FELDA if small holder do not participate

FELDA is envisaged to achieve 100% participation for efficient operation with economy of scale


19

There is no problem between Felda and the smallholders. There are some cases where smallholders complained to Felda Technoplant or mill, resulting poor plantation maintenance, no acceptance of harvested FFB, road construction is not good. However all cases were resolved.

The Replanting Committee that convenes monthly en-sures quick response/action to their complaints.

No verification required as this is a positive comment

20

There are always job vacation in FELDA but no one interest. Most smallholder children have jobs in other sectors such as doctors, lawyers, bankers, etc. The rest are enterpreneurs.

This necessitates the em-ployment of foreigners


21

There is a good relationship between the local communities and foreign workers. There were some suspicions of theft occuring, but actually it did not happen. Workers are always invited by Felda for some religious event such Maulid or Idul Fitri.

Good relationship shall be maintained.

No verification required as this is a positive comment

22

FELDA has not construct-ed a wall along 100 m wa-tercourse near housing ar-ea. It was reported to be done in May 2011.

We will make sure the wall will be constructed as prom-ised.


23 There are many contrac-tors doing work for FELDA recently. Felda should take

Tenders are processed at different offices (based on contract value) and posted




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vendor only from Johor, not from other places.

at site/mass media. -Preference will be given to local if they are able to de-liver & with better rates.

24

FELDA should take local people to be their vendor. There are too many forms that should be filled to be a FELDA’s vendor and they are required to visit FELDA’s head office twice a year in KL.

-Standard procedure for everyone. Apart from ordi-nary mail, e-application is also available at project site. -Physical visit to HQ (inter-view) is only required once and for bigger contracts (> RM 20,000) only. For re-newal, they are not required to go to KL.


25 Felda is good. Nothing to be worried about Felda

Thank you No verification required.

26

There is no problem be-tween our enterprise and Felda. Felda gives priority and opportunities to fami-lies of smallholders.

That is FELDA’s objective, Mission and Vision.




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APPENDICES

Appendix 1: Details of Certificate

i) Felda Adela Certificate

Standard: RSPO Principles & Criteria for Sustainable Palm Oil Production: 2007;

Malaysian National Interpretation (NI) including approved smallholder NI : 2010

Certificate Registr. No.: 18501693 001

TÜV Rheinland Malaysia Sdn. Bhd., certifies:

Certificate Holder: Adela Palm Oil Mill (subsidiary of the Federal Land Development Authority - FELDA) P.O. Box 73, 81930, Bandar Penawar, Kota Tinggi, Johor, Malaysia including its supply base according to the annex

Scope: Palm Oil Production and Management System

An audit was performed, Report No. 18501693. Proof has been furnished that the requirements according to RSPO Principles & Criteria for Sus-tainable Palm Oil Production: 2007; Malaysian National Interpretation: 2010 are fulfilled.

The due date for all future surveillance audits is two months prior to the month of the previous year in which the previous audit was conducted.

The certificate is valid from 2012-04-16 to 2017-04-15. First certification: The certificate shall remain valid in period stipulated above provided that the certificate holder mentioned here continues to comply with the RSPO P&C requirements. Status of compliance of the certificate holder shall be based on the annual inspections conducted by TÜV Rheinland Malaysia Sdn. Bhd.

CPO Tonnage Total Productions PK Tonnage Total Productions Company Estates FFB Tonnages (FPSB) FELDA schemes and FTSB CPO Tonnage claimed* PK Tonnage claimed*

54,040.31 tonnes 14,520.37 tonnes 20,010.65 tonnes 123,077.45 tonnes 28,746 tonnes 7726 tonnes

* The tonnage claimed is the proportion of the total production from company estates and smallholder scheme supply (FELDA schemes and FTSB) only



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ii) Felda Lok Heng Certificate

Standard: RSPO Principles & Criteria for Sustainable Palm Oil Production:

2007; Malaysian National Interpretation (NI) including approved smallholder NI : 2010

Certificate Registr. No.: 18501694 001

TÜV Rheinland Malaysia Sdn. Bhd., certifies:

Certificate Holder: Lok Heng Palm Oil Mill (subsidiary of the Federal Land Development Authority -FELDA) P.O. Box 55, 81907, Kota Tinggi, Johor, Malaysia including its supply base according to the annex

Scope: Palm Oil Production and Management System

An audit was performed, Report No. 18501694. Proof has been fur-nished that the requirements according to RSPO Principles & Criteria for Sustainable Palm Oil Production: 2007; Malaysian National Interpre-tation: 2010 are fulfilled.

The due date for all future surveillance audits is two months prior to the month of the previous year in which the previous audit was conducted.

Validity: The certificate is valid from 2012-04-16 to 2017-04-15. First certification: The certificate shall remain valid in period stipulated above provided that the certificate holder mentioned here continues to comply with the RSPO P&C requirements. Status of compliance of the certificate holder shall be based on the annual inspections conducted by TÜV Rheinland Malaysia Sdn. Bhd.

CPO Tonnage Total Productions PK Tonnage Total Productions Company Estates FFB Tonnages (FPSB) FELDA schemes and FTSB CPO Tonnage claimed* PK Tonnage claimed*

12,462.74 tonnes 3223.70 tonnes - 62,829.76 tonnes 12,371 tonnes 3,198 tonnes

* The tonnage claimed is the proportion of the total production from company estates and smallholder scheme supply (FELDA schemes and FTSB) only



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Appendix 2: Certification Audit Plan

Date / Time

(1) Organizational Unit and Pro-

cesses Auditor / Abbrev. Interviewee

Procedure - EM/QM El-ement -

Standard Chapter

Sunday, 20 March 2011

Malaysian auditors travel from KL to Johor (after-noon) Indonesian auditors travel from Jakarta to Singa-pore, pick-up at Johor

DSS (Dian S. Soeminta), FA (Fadli), IK (Ir-pan Kadir), CN (Carol Ng), AZ (Azizan Zakar-ia)

Monday, 21 March 2011 – Stakeholder Consultation Meeting & Adela Mill08.30-09.30

Arrival at Wisma JKKR and preparation for stakeholder consultation meeting

09.30-12.30

Stakeholder consultation meeting Wisma JKKR Felda Tunggal Kota Tinggi, Johor

All auditors Stakeholders

12.30-13.30

Break and lunch Travel to Adela Mill

13.30-14.30

Opening Meeting at Adela Mill (combined for Adela and Lok Heng)

Introduction by TUV audit leader.

Presentation of smallhold-er estates by group man-agers.

Presentation of Oil Mills Description on source of

FFB by respective manag-ers

All Auditors Top manage-ment for Adela and Lok Heng complexes

Start audit for Adela Complex & Adela Mill14.30- 18.00

Legal documentation check (licenses, permits, etc) Interview of Adela small-holder group manager and group management docu-mentation

Economic Issue & Legal Documentation for Ade-la Mill

Document review.

DSS Adela Small-holder Group Manager and Mill Manager

RSPO Standard for Group Certification RSPO Guidance on Scheme Smallhold-ers

14.30 – 18.00

Environmental & OSH – Adela Mill

Mill inspection Workshops. Stores. POME application. Document review.

CN & AZ Adela mill rep-resentative

Principle 1 Principle 2 Principle 3 Principle 4 Principle 5 Principle 8

14.30 – 18.00

Social Issues – Adela Mill

FA & IK Adela mill rep-resentative

Principle 2 Principle 6



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Date / Time




Standard Chapter

Mill inspection Worker Document review.

Principle 8

18:00 End of Day 1 All Auditor Tuesday, 22 March 2011, Felda Plantation Kledang 02 (Commercial Estate)08.00- 09.00

Document check at estate office

All Auditor Top Manage-ment & Relat-ed Managers

All principles

09.00-12.30

Estate site visit – Envi-ronment, HCV areas, best practices Field operations. Worker interviews. Riparian zones. HCV areas Boundary stones Peat soils & other marginal

soils

DSS Estate man-agement rep-resentative


09.00-12.30

Estate site visit – Envi-ronment, OSH Field operations. Worker interviews. Chemical stores Workshop Waste management

CN and AZ Estate man-agement rep-resentative

Principle 2 Principle 4 Principle 5 Principle 8

09.00-12.30

Site visit - Social issues Housing. Clinic Schools. Local communities

FA and IK Estate man-agement rep-resentative


12.30-13.30

Break and Lunch All Auditors

13.30-18.00

Document checks at es-tate office - all aspects

All Auditors Principle 1 Principle 2 Principle 3 Principle 5 Principle 6 Principle 7 Principle 8

18.00 End of 2nd day audit

Wednesday, 23 March 2011, Adela Scheme Smallholder Estates – Felda Sg. Mas & Felda Tunggal08.00- 09.00

Document check for small-holder estate – Felda Sg. Mas

All Auditors Top Manage-ment & Relat-ed Managers

All principles

09.00-12.30

Estate site visit – Envi-ronment, HCV areas, best

DSS Group man-agement rep-

Principle 2 Principle 3



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Date / Time




Standard Chapter

practices Field operations. Worker interviews. Riparian zones. HCV areas Boundary stones Peat soils & other marginal

soils

resentative, smallholders


09.00-12.30


CN and AZ Group man-agement rep-resentative, smallholders


09.00-12.30


FA and IK Group man-agement rep-resentative, smallholders


12.30-13.30

Lunch & break

13.30- 18.00

Document check for small-holder estate – Felda Tunggal


All principles

13.30- 18.00


soils

DSS Group man-agement rep-resentative, smallholders


13.30- 18.00




13.30- 18.00




18.00 End of 3rd day audit



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Date / Time




Standard Chapter

Thursday, 24 March 2011, Lok Heng Scheme Smallholder Estates – Lok Heng Timur 08.00- 09.00

Document check for smallholder estate – Felda Lok Heng Timur


All principles

09.00-12.30

Estate site visit – Envi-ronment, HCV areas, best practices Field operations. Worker interviews. Riparian zones. HCV areas Boundary stones Peat soils & other marjinal

soils



09.00-12.30




09.00-12.30




12.30-13.30

Lunch & break

13.30- 18.00

Continue document check for smallholder estate – Felda Lok Heng Timur


All principles

18.00 End of 4th day audit Friday, 25 March 2011, Lok Heng Scheme Smallholder Estates – Lok Heng Barat & Papan Timur08.00- 09.00

Document check for smallholder estate – Felda Lok Heng Barat


All principles

09.00-12.30

Estate site visit – Envi-ronment, HCV areas, best practices Field operations. Worker interviews. Riparian zones. HCV areas Boundary stones Peat soils & other marjinal

soils





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Date / Time




Standard Chapter

09.00-12.30




09.00-12.30




12.30-13.30

Lunch & break

13.30- 18.00

Continue document check for smallholder estate – Felda Papan Timur


All principles

13.30- 18.00


soils



13.30- 18.00




13.30- 18.00




18.00 End of 5th day audit Saturday, 26 March 2011, Lok Heng Mill 08.00-12.30

Legal documentation check (licenses, permits, etc) Interview of Lok Heng smallholder group manager and group management documentation

Economic Issue & Legal Documentation for Lok Heng Mill

DSS Lok Heng Smallholder Group Manager & Lok Heng Mill Manager

RSPO Standard for Group Certification RSPO Guidance on Scheme Smallhold-ers



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Date / Time




Standard Chapter

Document review. 08.00-12.30

Environmental & OSH – Lok Heng Mill

Mill inspection Workshops. Stores. POME application. Document review.

CN & AZ Lok Heng mill representative


08.00-12.30

Social Issues – Lok Heng Mill

Mill inspection Worker Document review.

FA & IK Lok Heng mill representative

Principle 2 Principle 6 Principle 8

12.30-13.30

Lunch & break

13.30- 15.00

Continue document check at Lok Heng mill For all principles

All auditors All

15.00-16.00

Preparation for Closing Meeting

All auditors Managers

16.00-18.00

Closing meeting (com-bined for Adela and Lok Heng complexes) Presentation of findings by

the audit team. Questions and answers. Final summary by team leader.

All auditors Managers

18.00 End of 6th Day audit Sunday, 27 March 2011, 8.00-10.00

Travel back to KL and Jakarta

All auditors



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Appendix 3: List of Abbreviations

BOMBA CEO

Badan Operasi Penyelamat dan Bencana Alam (Fire and Natural Disasters Brigade) Chief Operating Officer

CHRA Chemical Health Risk Assessment CPO CSR

Crude Palm Oil Corporate Social Responsibility

DOE Department of Environment DOSH Department of Occupational Safety and Health EIA Environmental Impact Assessment ERTs Endangered, Rare & Threatened species ESH Environmental Safety & Health FFB Fresh Fruit Bunches FPISB Felda Palm Industries Sdn. Bhd. FPSB Felda Plantation Sdn. Bhd. FTSB Felda Technoplant Sdn. Bhd. GHG Greenhouse Gas GPW Gerakan Persatuan Wanita (Woman’s Association Movement) EFB Empty Fruit Bunches ETP Effluent Treatment Pond EPF Employee Provident Fund HCV HDPE HIRARC

High Conservation Value High Density Poly-Ethylene Hazard Identification, Risk Assessment and Risk Control

IPM Integrated Pest Management JCC Joint Consultation Committee JKKK Jawatankuasa Kemajuan dan Keselamatan Kampung (Village Development

and Safety Committee) JKKR Jawatankuasa Kemajuan dan Keselamatan Rancangan (Development and

Safety Plan Committee) JKTS KER LCC

Jawatan Kuasa Tanam Semula (Replanting Committee) Kernel Extraction Rate Leguminous Cover Crops

LTA Lost Time Accident LRR Legal Requirements Register MBFM Majlis Belia Felda Malaysia (Felda Malaysia Youth Council) MSDS Material Safety Data Sheets MPOA MPOB

Malaysian Palm Oil Association Malaysian Palm Oil Board

NGO Non-Government Organization NREB Natural Resources and Environment Board OER OSH PERHILITAN

Oil Extraction Rate Occupational Safety & Health Jabatan Perlindungan Hidupan Liar dan Taman Negara (Department of Wild-life and National Parks)

PK Palm Kernel PKO Palm Kernel Oil PLWS Productivity Linked Wage System POME Palm Oil Mill Effluent PPE RISDA QOHSE

Personal Protective Equipment Rubber Industry Smallholders Development Authority Quality, Occupational Health and Safety and Environment

RELA Relawan Rakyat Malaysia (Malaysian Citizen Volunteers) Sdn. Bhd. Sendirian Berhad (Private Limited) SIA Social Impact Assessment



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SOCSO Social Security Organization SOP Standard Operating Procedure

Appendix 4: List of Stakeholders Interviewed and Contacted

No. Name of Stakeholder Institution - Address

Stakeholders Interviewed during Public Consultation Meeting

1 Hj. Hamsan Community Leader2 Alnia bin Abdul Nuh Smallholder 3 Mohd Daud Jelon Smallholder4 Mohammad Bakar Smallholder5 Mohamad Nor Lingan Contractor 6 Noor Adzmi Wa Supplier 7 Noorlydiawadi Saleh Supplier 8 Ahmad Yusuf B Contractor 9 MD. Nazir Maarop Contractor 10 Sabran Balhok Supplier 11 Hj. Md. Noor Albawi RISDA Johor Bahru 12 Hj. Roska bin Salimi RISDA Kota Tinggi 13 Hj. Jamra bin Khasa, Fire Guard Kota Tinggi 14 Irfan Siran Sungai Rengit 15 DSP Hamizi Abdullah PPRM 16 Abu Bakar B. Rainor KPRH Adela 17 Moch Aris Wagiman 18 Rokiah Sidin FELDA KLEDANG JWW 19 Haji Jamela Nordin FELDA Sening JWW 20 Fatimah Bte Yahya FELDA Adela JWW 21 Ngalisah Bte Akim FELDA Papan Timur 22 Fahran Bin Azr Polyclinic Sening 23 Norehan Miun Polyclinic Sening 24 Harban Singh MNS

25 Noorulwahida Ninti Mohd Ridzwan

Jabatan Keselamatan dan Kesehatan Pekerjaan Johor (OSH Department)

26 Saiman Suratman 27 Bachtiar MD Amin 28 Suhari Salam 29 Ahaddin Diran 30 Moh. Zae Ibrahim 31 Leaiman Dahlan 32 Mj. MD Atan Jamin 33 Hj.Amir Bin Rabu 34 Juvaimib Jawahir 35 Basar B. Alias 36 M. Rosli Madiron Foreman 37 Bahaman Tutor Clerk 38 Norehan Kasiron Weigher 39 Ahmad Bukrin Mukman 40 Yusof Hasan 41 Ramli Al Rahman 42 Zailani Mohd Amin 43 Ramlan Ramli 44 Afainizam Jafar 45 Abdul Aziz 46 Rizal Akhmad Nazim



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Appendix 5: Observations and Opportunities for Improvement

No. Observations / Opportunities for Improvement Criteria1

Adela mill should maintain a revision history of updates made to their legal require-ments register

2.1.1

2 Adela mill does not have a copy of the approval letter or license from the Department of Environment (DOE) for 2 diesel gensets and 4 incinerators that were installed with the mill since it started operations in 1983. The mill is already aware of this issue and taking necessary action to comply with legal requirements, and there is an internal request letter from Adela mill to Felda's Technical Services Department to apply for the relevant licenses to DOE (letter no. (60)4039/AD/840A/5 Pt.II dated 2 March 2011). The mill should continue to monitor the progress of license application.

2.1

3 During a visit to the government clinic at Lok Heng, it was found that there are visits from estate workers complaining on issues such skin and body itchiness i.e. there is a record of visit from a sprayer on 5 January 2011 complaining on itchiness on geni-tals and legs. There was also one record of mild food poisoning of a smallholder which may have been due food contamination after handling of chemicals. Although PPE provided to workers was viewed to be appropriate, the company should contin-ue to ensure workers and smallholders are continuously trained on safe handling chemicals to prevent such symptoms.

4.6

4 The rat bait, Butik Super, which is commonly used as a prophylactic treatment against rat pests, was also found to contain chlorophacinone, which is a WHO Type 1A hazardous chemical. However, amount of active ingredient in the rat bait is only 0.005% and the rat bait itself is classified as a Class IV chemical. Even though prophylactic rat baiting is carried out, records shows that usage of rat bait is low and in accordance to the product label.

4.6

5 OSH meetings are conducted but intervals between meetings sometimes exceeds 3 months, as seen from meeting minutes at Kledang 02, Papan Timur and Lok Heng Timur. The company should ensure meetings are conducted once every 3 months.

4.7

6 A doctor’s letter dated 3 Feb 2011 on report of the test found that 8 mill workers at Adela mill were found to experience hearing impairment at various levels. The man-agement is aware of this and has plans to send the 8 mill workers with hearing im-pairment for a re-test and will carry up follow-up action based on test results.

4.7

7 3 contracted workers doing road maintenance at Lok Heng Barat estate were travel-ling in a bulldozer without any safety helmets or boots. Contractors and their workers within scheme smallholders estates should be trained and reminded to wear appro-priate PPE

4.7.1

8 Transport trucks and other heavy vehicles should be equipped with first aid kits as an additional safety measure

4.7.1i

9 The estates have a documented action plan for management of estate wastes and and a plan for reducing environmental impacts through 3R (Reduce, reuse, recycle). However, aspects of the action plan is not being fully implemented, i.e. it is stated that paper, plastic, glass and other recyclables will collected by a contractor for recy-cling and even though some estates have recycling bins, there is no collection of re-cyclables by a suitable contractor yet. The plan also states that domestic waste will be reused as compost, but this is also not being implemented. As this plan is to be implemented for year 2011, implementation will be monitored at the next surveillance audit

5.1.2

10 Based on interviews with smallholders, it was stated that some chemical containers are returned to Felda for collection, but some are buried underground. Smallholders

5.3.2



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should be trained to return empty chemicals to estate offices for reuse or collection by a licensed contractor.

11 Some interviewed scheme smallholders i.e. at Papan Timur estates, and some workers i.e. at Lok Heng Barat estate carry out occasional burning of wastes, alt-hough based on interviews, most workers have been informed to not burn waste. The company should continuously inform workers and scheme smallholder to avoid burning waste.

5.5.3

12 The company’s procedure on “Stakeholder Updates” states that scheme managers will update their stakeholder list annually, however the procedure does not state clearly when this shall be done.

6.2.3

13 Pay for workers at all estates is deducted for water, which is not in accordance with the Workers Minimum Standards of Housing & Amenities Act 1990 - Clause 6(a) which states that free water should be provided to all workers except where permis-sion is granted by the Labour Department. Felda Plantations has applied to the La-bour Department for approval for deductions, and progress of license approval will be monitored.

6.5.3

The company’s policy for prevention of sexual harassment should be further improved the policy to include prevention of violance againts women

6.9

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