Download - [ ]Stage 1 [ ]Stage2 MINAMAS Plantation SIME DARBY Group · 1.2.1 Company Name MINAMAS Plantation – SIME DARBY Group 1.2.2 Contact person Mohamad Pirabaharan 1.2.3 Business address

PT. MUTUAGUNG LESTARI

ASSESSMENT REPORT

Rountable on Sustainable Palm Oil Certification

[ ]Stage 1 [ ]Stage2 [√] Surveillance

Plantation Manager/Owner : MINAMAS Plantation – SIME DARBY Group

Mill and Plantation Name : Sekunyir POM dan Sekunyir Estate; Seruyan Estate (PT INDOTRUBA TENGAH)

Location : Village of Amin Jaya I and Pembuang Hulu II Sub district of Pangkalan Banteng and Hanau, District of Kotawaringin Barat and Seruyan, Central Kalimantan, INDONESIA

Certificate Code : MUTU-RSPO/XXX

Date of certificate issue : 23 Nopember 2010

Date of expiry of certificate : 23 Nopember 2015

Assessment

Date Report Finalization

Date PT Mutuagung Lestari Auditor Checked By Approved By

ASA - 02 10-14/09/2011 10/10/2012

Taufik Margani; Ibnu Satria. Prabudi;

Ir. Artamur; R. Sigit Pamungkas

Octo Nainggolan

Tony Arifiarachman

Mutuagung Lestari • Raya Bogor Km 33,5 Number 19 • Cimanggis • Depok 16953• Indonesia Telephone (+62) (21) 8740202 • Fax (+62) (21) 87740745/6

Email : [email protected] ● www.mutucertification.com

MUTU Certification • Approved by RSPO Secretariat on June 2008

Submitted to RSPO Secretariat Approved by RSPO Secretariat on : Approved by CB on


ASSESSMENT REPORT

SPO – 4006a.4 i Prepared by Mutuagung Lestari for PT Indotruba Tengah – Sekunyir POM

TABLE OF CONTENT Page

Figure

Location Map of PT Indotruba Tengah 1

Operational Map of PT Indotruba Tengah 2

1.0 SCOPE OF CERTIFICATION

1.1 National Interpretation Used 3

1.2 Organization Information 3

1.3 Type of Assessment 3

1.4 Locations of Plantations, Mill and Hectare Statements 3

1.5 Description of Supply Base 4

1.6 Cycles and Planting year 5

1.7 Tonnage Certified Product 6

1.8 Other Certifications 6

1.9 Time Bound Plans for Other Management Units 6

2.0 PROSES PENILAIAN

2.1 Certification Body 7

2.2 Lead Auditor and Auditor Team 7

2.3 Assessment Methodology, Progress, and Site Visit 8

2.4 Stakeholder Consultation and List of Stakeholder Contacted 9

2.5 Next visitation 10

3.0 ASSESSMENT RESULT

3.1 Summary of Assessment Report of the RSPO Certification 11

3.2 Summary of Assessment Report of Supply Chain 35

3.3 Checklist Conformity of Certificate and Logo Use 40

3.4 Identification of Findings, Corrective Action, Observations, Opportunity for Improvement and Noteworthy Positive Components

41

3.5 Summary of Arising Issues from Public, Organization and Auditor Response 53

4.0 CERTIFIED ORGANIZATION’S ACKNOWLEDGEMENT OF INTERNAL RESPONSIBILITY

4.1 Formal Sign-off of Assessment Findings 55

ANNEXES

1 List of Stakeholder Contacted in the RSPO Certification Process 56

2 Audit Plan 57

3 Glossary 58


ASSESSMENT REPORT

SPO – 4006a.4 Page 1 Prepared by Mutuagung Lestari for PT Indotruba Tengah – Sekunyir POM

Figure 1. Location Map of PT INDOTRUBA TENGAH


ASSESSMENT REPORT


Figure 2. Operational Map of PT INDOTRUBA TENGAH


ASSESSMENT REPORT


1.0

SCOPE OF CERTIFICATION

1.1 National Interpretation Used National Interpretation, RSPO Principles and Criteria for Sustainable Palm Oil Production, Republic of Indonesia - RSPO INA-NIWG, May 2008 and Supply Chain Requirement for CPO Mill.

1.2

Organization Information

1.2.1 Company Name MINAMAS Plantation – SIME DARBY Group

1.2.2 Contact person Mohamad Pirabaharan

1.2.3 Business address The Plaza Lt. 36 JL. MH Thamrin Kav. 28-30 Jakarta 10350

1.2.4 Telephone +62-21-29926000

1.2.5 Fax +62-21-29922686

1.2.6 E-mail [email protected]

1.2.7 Website www.simedarby.com

1.2.8 Type of enterprise Private

1.2.9 Application information completed by duly authorized representative Mohamad Pirabaharan (Head of PSQM Minamas Plantations)

1.2.10 RSPO member registration September, 8, 2004

1.3 Type of Assessment

1.3.1 Certification scope Palm oil Mill and Estate

1.3.2 Type certificate Single

1.3.3 Names of company covered in this certificate PT. INDOTRUBA TENGAH

1.3.4 Number of management unit 1 (one) unit Palm Oil Mill (Sekunyir POM) which receives FFB Supply from 2 (Two) unit estates:, Sekunyir Estate (SKE) and Seruyan Estate (SRE).

1.4 Location of Plantations, Mill and Hectare Statements

1.4.1 Location of Estate

Name of Estate (s) Location

GPS coordinate

Latitude Longitude

Sekunyir Estate (SKE) Village of Amin Jaya, Sub district of Pangkalan Banteng, District of Kotawaringin Barat, Province of Central Kalimantan.

020 23’ 33” - 020 27’ 21” S 1110 59' 06” - 1120 02' 40” E

Seruyan Estate (SRE) Village of Pembuang Hulu II, Sub District of Hanau, District of Seruyan, Province of Central Kalimantan.

020 23’ 33” - 020 28’ 12” S 1120 02' 40” - 1120 04' 52” E

mailto:[email protected]

http://www.simedarby.com/


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1.4.2 Location of Mill

Name of Mill Location

GPS coordinate

Latitude Longitude

Sekunyir POM Village of Amin Jaya, Sub district of Pangkalan Banteng, District of Kotawaringin Barat, Province of Central Kalimantan.

020 26’ 34,7” S 1120 00’ 27,7” E

1.4.3 Maps Figure 1 and 2

1.4.4 Village/sub district/District/Province Indonesia

1.4.5 Country Asia Tenggara

1.4.6 Region Village of Amin Jaya and Pembuang Hulu II, Sub district of Pangkalan Banteng, District of Kotawaringin Barat, Province of Central Kalimantan.

1.4.7 Tenure

Private

State 7,735 Ha

Community

*) Based on HGU Certificate

1.4.8 Description of Land Use

Total areal 7,735 Ha

Mature area 6,048.30 Ha

Immature area - Ha

Mill 8 Ha

Infrastructures area 111 Ha

Replanting 560.88 Ha

Other area used 806 Ha

High Conservation Value 76.56 Ha

1.5 Description of Supply Base

1.5.1 Estate (s)

Name of Estate (s) Total Area

(Ha) Planted Area

(Ha) FFB

(ton/tahun) Yield

(ton/ha/tahun)

Supplied to Mill

TBS (ton/tahun)

%

Sekunyir Estate (SKE) 3,555 3,080.83 86,761 28 86,761 43.67

Seruyan Estate (SRE) 4,180 2,967.47 86,945 29 86,945 43.76

Pemantang Estate (PT Teguh Sempurna) *)

3,818 3,558 11,496 - 11,496 5.79

Kawan Batu Estate (PT Teguh Sempurna) *)

4,400 3,775 7,059 - 7,059 3.55


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Hatan Tiring Estate (PT Teguh Sempurna) *)

3,811 3,429 6,120 - 6,120 3

Batang Garing Estate (PT Teguh Sempurna) *)

4,573 3,321 725 - 725 0.36

TOTAL 24,337 20,131.3 199,106 - 199,106 100

*) Estate of PT Teguh Sempurna (still 1 holding) that have been RSPO Certified

Source: Estate Data Production on Sept 2011 – August 2012

1.5.2 Smallholder Scheme and Another Source *)

Smallholder

Scheme Member(s) Location

Total Area (Ha)

FFB Production (tonnes/year)

Supplied to Mill

FFB Production

(tonnes/year) %

- - - - - - -

- - - - - - -

* Sekunyir (PTITH) not received FFB from Smallholders

1.5.3 Description of Mill

Name of

Mill Capacity

(tonnes/hour)

FFB Processed

(tonnes/year)

CPO Inti Kernel PKO

Out put (tonnes)

Extraction (%)

Out put (tonnes)

Extraction (%)

Out put (tonnes)

Extraction (%)

Sekunyir POM

45 199,106 45,476 22.84 9,497 4.77 - -

Source: POM Data Production on Sept 2011 – August 2012

1.5.4 Type of Product FFB/CPO/PK /PKO

1.6 Planting Year and Cycles

1.6.1 Age profile of planted palms

Planting Year

Hectarage (Ha) Total

SKE SRE

1992 2,657 969 3,626

1993 165 1,296 1,461

1994 321 984 1,305

1995 213 - 213

TOTAL 3,356 3,249 6,605

Source : Area Statement of PT Indotruba Tengah

1.6.2 Area restocked by replanting after 2005 560.88 Ha

1.6.3 Cycles 25 Year(s)


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1.7 Tonnage Certified Product

1.7.1 Annual Actual Claims of Certified Product

FFB Production 199,106 Tonnes/year

CPO Production 45,476 Tonnes/year

Palm Kernel (PK) Production 9,497 Tonnes/year

Palm Kernel Oil (PKO) Production - Tonnes/year

Source: POM Data Production on Sept 2011 – August 2012

1.7.2 FFB Certified Claim Production

Name of Estate (s) Total Area

(Ha) Planted Area

(Ha) FFB Production

(tonnes/year) Yield

(tonnes/year)

Sekunyir Estate (SKE) 3,555 3,080.83 78,602 26

Seruyan Estate (SRE) 4,180 2,967.47 75,654 25

Total 7,735 6,048.3 154,256 25.5

Source: Production Budget of Estate on July 2012 – June 2013

1.7.3 Certified Production of Palm Oil Product Claim

Name of

Mill Capacity

(tonnes/hour)

FFB Processed

(tonnes/year)

CPO Palm Kernel PKO

Out put (tonnes)

Extraction (%)

Out put (tonnes)

Extraction (%)

Out put (tonnes)

Extraction (%)

Sekunyir POM

40 `154,256 35,170 22,8 7,559 4,9 - -

Source: Production Budget of Mill on July 2012 – June 2013

1.8 Other Certifications

1.8.1 ISO 9001:2008/ISO 14001: 2004 -

1.8.2 OHSAS 18001:2007 -

1.8.3 HACCP -

1.8.4 Others -

1.9 Time Bound Plan for Other Management Units

1.9.1 Time Bound Plan of SIME DARBY Plantation Sdn. Bhd

Sime Darby Plantation owns and operates 39 Mills and 129 Estates suppliers in Malaysia that have been certified. Sime Darby Plantation in Indonesia through Minamas Plantation operates 23 Mills and 70 Estates which of them (19 units) have been certified up to September 2012. Sime Darby to date has conducted an audit of the three Mills and Estates suppliers and a new Mill with Estates suppliers are still in progress for the audit to obtain certificates based on Time Bound Plan.


ASSESSMENT REPORT


2.0

ASSESSMENT PROCESS

2.1 Certification Body

PT Mutuagung Lestari Jl. Raya Bogor Km 33,5 No. 19, Cimanggis - Depok 16953 Telp. +62-21-8740202, Fax +62-21-87740745/46 Website: www.mutucertification.com

Email : [email protected]; Approved by RSPO Secretariat on June 2008

2.2 Lead Auditor and Auditor Team

2.2.1 Auditor Team

ASA-01 1) Nanang Mualib (Lead Auditor). Bachelor of Forestry at Department of Forestry Technology, Faculty of Forestry, Bogor Agricultural University. He had a working experience in a forest company (HPH) from year 2000 to 2004 as technical assistance in the implementation of Sustainable Forest Management program, collaboration between the Faculty of Forestry and WWF-Indonesia since December 2006 to present. Professional experiences include: social studies of HCV in monitoring of the implementation of Sustainable Forest Management, involved in the identification of HCV in three oil palm plantation companies in Indonesia. Currently he works as a professional consultant and assessor of HCV. In the assessment activity, he conducted the assessment on the aspects of environment, social, legal, management of HCV.

2) Octo H.P.N Nainggolan (Laead Auditor Witnessed). A bachelor of Agriculture, Department of Social Economics of Agriculture (Agribusiness), University of Udayana, Bali. He has a working experience from year 2004 to 2011 as a Field Staff in a private oil palm plantation company in Indonesia. Trainings attended namely: Training of Conservation of Natural and Biological Resources in supporting HCV, Basic Plantation Management Program and he have attended several audit activities related to certification system of sustainable oil palm plantation as an observer and auditor. Followed the Awareness Management System Certification (ISO 9001-2008). Currently, he works in an independent certification agency as an auditor. In the assessment activity, he conducted assessment on Waste Management, Implementation of OHS in the mill, FFB Processing, water management, pollution and Emission management, legality and supply chain requirement for CPO Mill.

3) Oktovianus Rusmin (Auditor). Bachelor’s Degree in Social & Political Sciences Department of Anthropology. Specialists in the field of Social and Cultural (Social Impact & Conflict Resolution) and HCVF. Followed the Forest Management Auditor Training (FSC Standard), ISO 14001 Environmental Management System Training & SVLK (wood legality) auditors. He was several times involved in the assessment of Sustainable Forest Management Certification (Standard LEI). Had worked at the Center for the study of Anthropology, University of Indonesia; and experts to the field of Social Tropical Forest Trust (TFT) Indonesia. He was numerously involved the Social Impact Study and Identification HCV in Oil Palm Plantations and natural forest concessions. In this assessment activity, he conducted assessment of social and land concession.

4) Marsudi Eko Santoso (Auditor). Bachelor of Science in Agriculture, majoring in Agro technology. Followed the Awareness Management System Certification (ISO 9001-2008), Awareness HACCP certification, training of RSPO auditor and training of RSPO Lead Auditor. He had involved several time in RSPO certification assessment activities as an observer and under trainee. Currently he works for Independent Certification Body. In this assessment activity, he conducted assessment on Best Practices, Integrated Pest Management, worker welfare, environment, legal, Occupational Health and Safety (OHS).

5) Ibnu Satria Prabudi (Auditor). Bachelor of Science in Agriculture, majoring in Agro technology. Followed the Awareness Management System Certification (ISO 9001-2008), Awareness HACCP certification, training of RSPO auditor and training of RSPO Lead Auditor. He had involved several time in RSPO certification assessment activities as an observer and under trainee. Currently he works for Independent Certification Body. In this assessment activity, he conducted assessment on Best Practices, Integrated Pest Management, soil and water management and waste management.

http://www.mutucertification.com/

mailto:[email protected]


ASSESSMENT REPORT


ASA-02 1. Taufik Margani (Lead Auditor). Bachelor of Science in Forestry, majoring in Forest Management. Specialist in Ecology and Environmental. He has led several audits for Sustainable Forest Management in Indonesia (under LEI- Indonesian Ecolabel Institute and FSC- Forest Stewardship Council) and he is a Lead Auditor for FSC chain of custody and Forest Management. Other experience: He is IRCA Lead auditor IRCA registered for Environment Management System and Quality Management System. Since 1999 he has been working for independent certification body and has conducted Environment Management System audits in Indonesia and Malaysia. Currently he is the General Manager of Management System Certification. In this assessment activity, he conducted assessment of worker welfare, environments, legal, Occupational Health and Safety (OHS) and Supply Chain Requirement to Palm Oil Mill.

2. Artamur (Auditor). Bachelor of Science in Forestry, majoring in Forest Management, Bogor Agriculture University. He has led several audits for Forest Management in Indonesia (including sustainable forest management certification under scheme Indonesia Ecolable Board and FSC-Forest Stewardship Council) and Lead Auditor for FSC chain of custody tracking. Ever attended such training Field Assessors (assessor) Sustainable Forest Management organized by the Indonesian Ecolabelling Institute (LEI), Assessor Training Programme on Forest Certification for Southeast Asian Countries, Trengganu, Malaysia by Smart Wood etc. At this time the RSPO certification activities to assess the social and employment aspects.

3. R. Sigit Pamungkas (Auditor). Bachelor of Science in Forestry, majoring in Forest Management, Bogor Agriculture University. Specialist in Forest Conservation, Corporate Social Resposibility, Social Impact Assesment, Assesment for Forest Certification. Worked as experts in several assessment activities HCVA, Residential Assistance Team project ecolabel certification, Social Workers Survey EIA, etc. At this time the RSPO certification activities to assess aspects of Natural Resources & Conservation of Biodiversity and employment.

Curriculum Vitae (CV) of the auditor team available at Mutuagung Lestari’s office

2.3 Assessment Methodology, Progress, and Site Visit

2.3.1 Assessment Methodology

ASA-01 The assessment was conducted by measuring the sufficiency of implementation with the consistency done by the Indotruba Tengah (ITH) to the requirements of RSPO Standard and Supply Chain Requirement for CPO Mill. Document observations made by the Auditor Tim competency specifications set by the Lead Auditor. The scope of the certification activity time is 1 (one) Mill and 2 Estates that supply base (FFB), which SKE, and SRE. In

assessing the audit team using the formula 0.8 √y to determine the focus of the estate sampling assessment. However,

due to the Estate supply only 2 estates, the audit team determined to take a second sampling in were SRE and SKE.

ASA-02 The methodology used during surveillance-2 the same assessment methodology during surveillance activities-1. Sampling unit is taken Sekunyir POM, SRE and SKE.

2.3.2 Estimate of person days to implement assessment

ASA-01 Number of auditors : 5 persons Number of days for ASA-01 at site : 5 days Number of working days for ASA-01 at site : 25 Mandays

ASA-02 Number of auditors : 4 persons Number of days for ASA-01 at site : 4 days Number of working days for ASA-01 at site : 16 Mandays

2.3.3

Process of Assessment


ASSESSMENT REPORT


ASA-02 The assessment was conducted by measuring the sufficiency of implementation with the consistency done by the Indotruba Tengah (ITH) to the requirements of National Interpretation of the Republic of Indonesia from RSPO Principles and Criteria for Sustainable Palm Oil Production (RSPO INA-NIWG, May 2008) and Supply Chain Requirement for CPO Mill The assessment was conducted in three methods: (1) document review, aiming to observe the sufficiency of types or substances from required documents; (2) interview, aiming to obtain more detailed information and cross check the information; and (3) field visitation, aiming to observe directly the sufficiency of implementation on site. Some directions for improvement of the results Surveillance-2 delivered by the auditor MAL to the manager and the results are the subject of verification at the next assessment phase (Surveillance-3). The assessment process please find Appendix 4 Improvement of findings from first surveillance findings were observes by auditors at this second surveillance assessment. All information obtained was recorded in Check List of PT Mutuagung Lestari (MUTU) and part of Surveillance report.

2.3.4 Sampling Location of Assessment

ASA-02 The sampling locations which selected by Audit Team based on : 1. Number of sites visited, which is determined by the formula 0.8 √ y. 2. The sites selected represent each of operational working area. 3. The consideration of issues arising from the results of public consultations and document review activity that are

fundamental and crucial The sites visited are completely presented as follows:

Location 1 – Hazardous Waste Storage of Estate Seruyan. The audit team held observation realated to hazardous waste governance, ESH implementation in the Hazardous Waste Storage, and hazardous waste scale.

Location 2 – Traction of Estate Seruyan. The audit team held observation realated to ESH implementation on site and fire land facilities.

Location 3 – Klinic of Estate Seruyan. The audit team held observation realated to Medice Waste Management, ESH facilities, employee check medical, etc.

Location 4 – Block C 11-12 Estate Sekunyir. The audit team held observation realated to ESH implementation, interview with employee regarding wages, insentive, public facilities, freedom of association, protection of reproductive rights for women workers etc.

Location 5 – Block A34 Estate Seruyan. The audit team held observation realated to HCV management (HCV 1.2) in the Estate Seruyan, signboard of conservation area, etc.

Location 6 – Public Facilities. The audit team held observation realated to public facilities for employee, foe example: worship, Clinic, Education, Housing, Child care, etc. In addition, the audit team also monitors residential sanitation and hygiene workers.

Location 6 – Block E-21 Estate Sekunyir. The audit team held observation realated to HCV management (HCV 4.1 - Riparian), planting erosion prevention, labeling buffer area (buffer) etc.

Location 7 – Village of Pangkalan Banteng and Village of Amin Jaya. The audit team held observation realated to programe and realization of Corporate Social Responsibility (CSR) to around community, relation with community, etc.

Location 8 – Sekunyir POM. The audit team held observation realated to operational activity in the Mill from FFB received until dispatch CPO, ESH implementation, etc.

2.4 Stakeholder Consultation and List of Stakeholder Contacted

2.4.1 Summary of Public Consultation Process

Stakeholder public consultation for PT ITH was done in three 2 methods : (1) Public announcement in the RSPO website (www.rspo.org) minimum 30 days before ASA-02 conducted. (2) Conduct visits and interviews with stakeholders located in Kotawaringin Barat and community. Public consultation

http://www.rspo.org/


ASSESSMENT REPORT


conducted on September, 11st 2012 (for stakeholders from relevant agencies) and September, 13rd 2012 (for the stakeholders of the community and workers). A number of verbal inputs from stakeholders both positively and negatively received by the audit team as a material consideration in the assessment of surveillance 2.

2.4.2 The contacted list of stakeholders

See annex 3

2.5

Next visitation

The next visit (Surveillance 3) will be determined one (1) year later after ASA-02 conducted.


ASSESSMENT REPORT


3.0. ASSESSMENT RESULT 3.1. Summary of Assessment Report of the RSPO Certification

MUTUAGUNG LESTARI has conducted The Annual Surveillance Assessment 2 (ASA-02) to PT. Indotruba Tengah (ITH) with

the scope consist one (1) POM and Two (2) Estatest. MUTUAGUNG LESTARI stated that PT ITH has fulfillment of RSPO

Standard National Interpretation RSPO Principles and Criteria (P&C) for Sustainable Palm Oil Production, Republic of

Indonesia - RSPO INA-NIWG, May 2008. MUTUAGUNG LESTARI recommended of PT ITH for RSPO Certificate was

maintained.

Ref Std. VERIFICATION RESULT of MUTU-Certification

PRINCIPLE #1 COMMITMENT TO TRANSPARENCY

1.1 Plantation and Palm Oil Factory have to give adequate information for stakeholders in appropriate language and forms, to ensure the effective participation of stakeholders in decision-making.

The document of Log In and Log Out of Communication Period of 2011/2012 is available. The document does not reveal any documents of information request from Stakeholders, there is only a letter of request of assistance or donation such as: Letter and Proposal of ”Village Office Yard Development” from the Head of Amin Jaya Village, No. Prop/12/DS-AJ/PB/VI/2012 dated 10 June 2012 concerning Request of Paving Procurement, which was received by PT. ITH on 25 June 2012. The letter of Head of Amin Jaya Village was followed up by Letter of SKE Manager No. 174/SKE-GM EST/VI/2012/S dated 27 June 2012 to the GM of Central Kalimantan Estate to be realized and has been approved by the GM of Central Kalimantan. Response to the Head of Amin Jaya Village was conducted by the management of PT. ITH through direct communication with the person concerned. Interview with the Secretary of Amin Jaya Village noted that the letter and proposal of ”Village Office Yard Development” No. Prop/12/DS-AJ/PB/VI/2012 dated 10 June 2012 has been responded by PT. ITH through direct communication with the Head of Amin Jaya Village. ITH has compiled Records Management Procedure (Policy No. 394/ITH-Doc-02/11) dated 27 September 2011; it is stated in point 6.5 that retention time of information record is 5 years.

Status: Full Compliance

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

ITH has determined the types of documents that can be accessed by public, for example: Legal Documents (such as: Land Use Title, Forest Land Acquisition Permit, Letter of Permanent Business Permit, Water Construction Permit in Water Area, Building Construction Permit, Operator License, Plantation Business Permit, etc.); Environmental Documents (such as: EIA, Environmental Management Plan/Environmental Monitoring Plan, HCV and HCV Management); Social Documents (such as documents of Social Impact Assessment and documents of CSR Program and Realization). ITH has compiled Records Management Procedure (Policy No. 394/ITH-Doc-02/11) dated 27 September 2011. It is stated in point 6.5 that the retention time is determined by the importance of the documents, for example retention time for legal document is until the document is valid, the retention time of environmental documents is until there is a change and so on.



ASSESSMENT REPORT


PRINCIPLE #2 COMPLIANCE WITH APPLICABLE LAWS AND REGULATIONS

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

Based on documents and fields observation, the auditor team assessed the company’s commitment to meet the regulations related to the management of oil palm plantation in Indonesia has been well-implemented. The rules have been complied with include: 1. Storage, management and landfill of hazardous material waste related to the regulations (Government Regulation 85/1999,

Government Regulation 74/2001, Decree of Head of Environmental Impact Control Agency (Kepka Bapedal) 01/Bapedal/09/1995, Kepka Bapedal 02/Bapedal/09/1995, Kepka Bapedal 05/Bapedal/09/1995, Kepka Bapedal 255/Bapedal/08/1996);

2. ITH has conducted air emission testing and air emission testing ambient, and air ambient as regulated by the Government Regulation No. 41/1999, Decree of Environmental Ministry 13/MENLH/3/1995, Decree of Environmental Ministry 48/MENLH/11/1996, Decree of Environmental Ministry 49/MENLH/11/1996, Decree of Environmental Ministry 50/MENLH/11/1996, Kepka Bapedal 205/Bapedal/07/1996, Circulation Letter of Labour Ministry SE-01/MEN/1997, Circulation Letter of Labour Ministry No. 51/Men/1999 with 6-month periodical report to the Environment Bodies (BLH) of Kotawaringin Barat District.

3. Regulation of Environmental Ministry No. 03 year 2008 regarding Procedure of Provision of the Hazardous Material Symbols and Labels; based on the field visit in Sekunyir Estate, the installation of Hazardous Material symbols has met the Regulation of Environmental Ministry No. 03 year 2008.

4. Decree of Agricultural Ministry No. 352 year 2002 (Article 19) regarding The Obligation of Delivering the Development of Plantation Business periodically every 6 months; ITH has compiled Report of Plantation Business Development and submit it to the relevant agencies in accordance with Decree of Agricultural Ministry No. 352 year 2002 (Article 19).

ITH has compiled an Evaluation List of Compliance with the law/regulation, which is updated annually. In this document there are 93 types of regulations evaluated in 2010 and 8 types of regulations evaluated in 2011, such as Statue No. 5 year 1969 regarding Basic Rules of Agrarian, Statue No. 1 year 1970 regarding Occupational Safety, Government Regulation No. 74 year 2011 regarding Hazardous Waste Management. ITH has compiled a Regulation List and an Evaluation List of Compliance with the law/regulation, which is updated annually. In this document there are 93 types of regulations evaluated in 2010 and 8 types of regulations evaluated in 2011, such as Statue No. 5 year 1969 regarding Basic Rules of Agrarian, Statue No. 1 year 1970 regarding Occupational Safety, Government Regulation No. 74 year 2011 regarding Hazardous Waste Management. ITH has established Procedure of Legal Requirement (Policy No; 394/ITH-HKM-08/11) dated 27 September 2011 as a reference to evaluate the implementation of compliance with the applicable, relevant legal requirements.


2.2 The right to use the land can be demonstrated, and is not legitimately contested by local communities with demonstrable rights ITH can show legal proof of land tenure and land exploitation in forms of:

- Principle permits of forest acquisition covering ± 14,000 hectares in Kotawaringin Barat District and Kotawaringin Timur in accordance with Letter of Directorate General of Inventory of Forest Land Use of Forestry Department No. 667/VII-3/1992 dated 16 June 1992.

- Letter of Decree of Forest Acquisition based on Decree of Forestry Ministry No. 736/Kpts-II/1996 dated 25 November 1996 from Forestry Ministry of Republic of Indonesia


ASSESSMENT REPORT


- Land Use Title (Decree of Agrarian Affairs Ministry/Head of National Land Agency No. 152/HGU/BPN/1997 covering 3,260 hectares which was then certified through Land Use Title No. 04 year 1998 valid until 24 September 2033; Decree of Agrarian Affairs Ministry/Head of National Land Agency No. 10/HGU/BPN/1998 covering 740.4 hectares which was then certified through Land Use Title No. 05 year 1998 valid until 23 June 2033; Decree of Agrarian Affairs Ministry/Head of National Land Agency No.13/HGU/BPN/1998 covering 2,905 hectares which is then certified through Land Use Title No. 05 year 1998 valid until 23 June 2033; Decree of Agrarian Affairs Ministry/Head of National Land Agency No.11/HGU/BPN/1998 covering 829.2 hectares which is then certified through Land Use Title No. 05 year 1998 valid until 23 September 2033.

- Building Construction Permit as regulated in Decree of Head of Public Works Service of Kotawaringin Barat District No. 647/03/PUD dated 18 August 1997.

To ensure that work area of PT. ITH is legally clear, PT. ITH has set new boundaries poles as many as 16 large poles and 51 small poles in SKE and as many as 20 small poles in SRE which was conducted starting April-June 2012. Currently, 113 poles have been installed or from 161 poles of the plan, 70% has been realized. In addition, PT. ITH has been monitoring the border area since April-August 2012. The result of monitoring found out that most of the poles are in good condition and still clearly visible from the field. Based on a field check of the boundary area between PT. ITH and public land in Block D001, and also between PT. ITH and another company (PT. Bangun Jaya Alam Permai) in Block A006, it is found that the border area of PT. ITH is not only a ditch but also a small pole made of red-and-white-casted paralon in length of ±120 cm from the surface. A red-and-white-painted rectangular concrete was also found with the length of ±1 meter from the surface, with the PT. ITH boundary mark and pole number on it. Condition of border area and boundaries poles are clearly visible in the field. . (CFA/Observation CAR 2011.21 is closed) There has been progress in the occupied area settlement covering 802 hectares with the following description: 1. Related to the settlement of occupied area, National Land Agency of Seruyan visited PT. ITH on 27 July 2011. Activities

undertaken were field trip to Block G34 and discussion in the office of PT. ITH. The result of the discussion set forth in the minutes of meeting as follows: a) ITH requested the National Land Agency of Seruyan to immediately solve the case; b) There shall be a Commitee C formed to seek for a solution involving local government and related agencies; c) The land tenure of PT. ITH is not outside the right granted by the local government according to the Land Use Title.

2. The National Land Agency then formed Commitee C consisting the elements of National Land Agency, local government and Plantation Agency.

3. On 31 October 2011 Commitee C held a visit to PT. ITH. The commitee’s activities undertaken were field visit and discussions. The result of the discussion set forth in the minutes of meeting as follows: 1. Visual identification of the troubled areas covering 797.72 hectares; 2. It would be followed up by a trial conducted on this issue by presenting the relevant parties in provincial cities; 3. ITH was asked back to make chronological report of the problem.

4. Improvement from Commitee C does not exist until now, therefore the ad interim Manager of SRE sent a letter to GM of Central Kalimantan Estate to immediately settle the occupied area covering 797.72 hectares.

Based on the description above ITH has been trying to resolve the problem according to the applicable regulation in the occupied area mentioned above. The main obstacle is on the external party i.e. the government who resolves the case too slowly. Based on the chronology given by PT. ITH, it is described that the occupied areas only cover 625 hectares and condition of the areas are now occupied by the community with the following details: a. Mature oil palms planted in 2005/2006 covering 97 hectares (occupied by H. Ruslan’s group). b. Immature oil palms planted in 2007/2008 covering 389 hectares (occupied by H. Ruslan’s group). c. New oil palms planted in 2009/2010 covering 58 hectares (occupied by an individual person). d. Rubber plantation/shrubs covering 81 hectares (occupied by an individual person). Based on the result of field check on the occupied area of Block H bordering with the Block G 012, it was found that the condition of the area is in the form of ±8-year-old oil palm trees. Visually, it is clearly seen that the entire area of Block H has been planted by the community with oil palm trees and partly rubber. . (Minor non conformance CAR 2011.22 is closed with observation)


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There were no any land conflicts revealed during the Surveillance II in the areas of SKE and SRE. However, if there is a dispute of land conflicts, PT. ITH has had land conflict resolution strategies outlined in the SOP of Occupied Land Acquisition Policy No.: 343/PSD-OKUP/11.


2.3 Use of the land for oil palm does not diminish the legal rights, or customary rights, of other users, without their free, prior and informed consent

The entire of land conflicts was already resolved in 2009 and recorded in Recapitulation of Tenurial Conflict Handling of PT. Indo Truba Tengah (ITH) in April 2009. ITH has compiled a map of tenure conflicts depicting the area claimed by the public by showing the wind direction, scale of the map, and other important legends.


PRINCIPLE #3 Commitment to long-term economic and financial viability

3.1 There is an implemented management plan that aims to achieve long term economic and financial viability.

Documents of company’s work plan are available for short-term i.e. Annual Work Plan of 2012-2013 and work plan of 2011-2014 outlined in the Distribution of Budget in 2011 until 2014. ITH has a replanting program as follows:

Estate Year of Budget

2011-2012 2012-2013 2013-2014 2014-2015 2015-2016

Seruyan Area (ha) - 285.67 270.99 225.26 305.42

Planting Year - 1992 1992-1993 1993 1994

Sekunyir Area (ha) - 279.21 297.34 288.56 326.04

Planting Year - 1992 1992-1993 1993 1994

By the time Surveillance-2 was carried out, ITH had conducted activities of cutting down, stacking and chopping for work areas of Sekunyir Estate and Seruyan Estate and had planned the planting in February 2013. ITH planned to use seeds from Marihat (for Sekunyir Estate) and Socfindo (for Seruyan Estate).


PRINCIPLE #4 Use of appropriate best practices by growers and millers

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

ITH has had an Estate SOP from LC to harvesting presented in Agronomy Reference Manual (policy No.110/EST-ARM/08 and has been approved by the top management). Until the S-2 was conducted, there were not any changes/revisions to the SOP. The Agronomy Reference Manual is still used as a reference in conducting estate operational activities. ITH has also owned a Mill SOP from the receipt of FFB, processing until dispatch. ITH already has a mechanism of inspecting and monitoring operational activities through the Plantation Advisory (PA) activity for estate areas which is conducted every 6 months; Mill Advisory (MA) for mill areas conducted every 6 months and also an internal


ASSESSMENT REPORT


audit regarding thee implementation of RSPO. The latest audit of PA was conducted on 23-25 June 2012 by Sime Darby Plantation Sdn Bhd; the latest audit of MA was conducted on 18-19 May 2012 by Sime Darby Plantation Sdn Bhd; the latest RSPO internal audit was conducted on 26 August 2012 by Team of PSQM PT. ITH. Periodically (every month) management units of each estate and mill report their operational activities to the Central Management of Minamas. Operational report of estate contains information on: Block Harvesting System, Production, Field Condition, Manuring and Stock GoDown; Insertion and Completing, Pest and Disease Management, recapitulation by Product, Running Account, Social Condition of the Estate, CD and Land Security, Cost Management, and Declaration of FFB Production per month. Operational report of the mill include: FFB Receipt and FFB rejected, Processing Capacity, Production and Extraction, Quality Analysis, and CPO delivery.


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

ITH has been working on the land analysis for the work area of Sekunyir Estate (July 2007 – January 2008) and Seruyan Estate (February – September 2008) conducted by Minamas Research Center (MRC). The areas surveyed covering 3,371.7 hectares (Sekunyir Estate) and 3,253 hectares (Seruyan Estate). The method used is a systematic method to measure the distance between the point of observation that is 100 m x 200 m (1 point represents the area of 2 hectares). Leaf analysis activity has been done every year by ITH. There is a leaf analysis document available that was conducted by MRC. Leaf analysis is conducted to see the level of soil chemical fertility and to analyze consideration of manuring recommendation. For example: in the document of leaf analysis of 2012, parameters tested were Ash, Nitrogen, Phosforus, Potassium, Magnesium and Calcium. In order to maintain and to improve soil fertility, ITH has been making the efforts of manuring, EFB application and land application. Manuring, EFB application and land application conducted were in accordance with recommendation given based on the result of soil and leaf analysis. As for the land application, ITH already has application permit of palm oil mill waste authorized by the head of Kotawaringin Barat District No. 660/72/Bpdl.III.4/VIII/2007 dated 3 August 2007 with the width of waste application up to now is 224 hectares. ITH has also conducted soil and land analysis testing on the land application area in accordance with Decree of Environmental Ministry No. 29 year 2003. The analysis is conducted annually with 18 testing parameters. Soil analysis activity has been conducted every year as required by the Decree of Environmental Ministry No. 29 year 2003. The latest analysis was conducted by the Technical Unit (UPT) of Basic and Analytical Laboratory of Palangkaraya University on 20 July 2011. Soil analysis activity for the year of 2012 is still awaiting the results of laboratory test at Palangkaraya University. There are available records on manuring activities, EFB application and land application of the year 2011-2012. The records are contained in the monthly report. There is a review in the report if the implementation is not in accordance with the recommendation that has been set.


4.3 Practices minimize and control erosion and degradation of soils.

ITH has made identification of marginal soil for the work area of Sekunyir Estate and Seruyan Estate. The identification result is an integrated part of the document of detailed land survey result. ITH also has mapped the distribution of soil types with the scale 1:42,000. Based on the document of detailed land survey, type of peat soil is not found within the work area of ITH. Based on the detailed land survey in Sekunyir Estate, the slope degree on the work area consists of 0% (often flooding) covering 113.72 hectares; 0-3% (flat) covering 2,685.32 hectares; 3-8% (undulating) covering 434.15 hectares; 8-15% (rolling) covering 138.51 hectares. For the work area of Seruyan Estate the slope degree consists of 0-3% (often flooding, flat) covering 1,648 hectares; 3-8% (undulating) covering 1,504 hectares; 8-15% (rolling) covering 101 hectares.


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Based on the result of field visit in Block F26 and F27 (based on the marginal soil map included in slope category) ITH has consistently made efforts to minimize the impact of erosion in the form of wheel loader road following the direction of the contour, planting vertiver grass, stacking midribs (u-shape front stacking) and making individual terrace. PT. ITH is able to show record of road maintenance in the form of Actual Document of Road Hardening Year 2011-2012. The document cointained information about the realization of road hardening activity for each division. For example: Road Hardening Actual in Divison I Sekunyir Estate. The realization of road hardening program was conducted in semester 1 budget year of 2011-2012 which was conducted every month. Until January 2012 the length of the road hardening by PT. ITH (Sekunyir Estate) has covered 49,170 meters. Based on the detailed land survey there is sandy loam soil type. Toward the case, the efforts made by ITH are conducting Empty Fruit Bunch (EFB) application and planting vertiver grass and giving dolomit. Records of EFB application and vertiver grass planting in the areas identified as critical lands (sandy loam) are available. For example: EFB application in Block F9-10 Sekunyir Estate and Block E-32 Seruyan Estate. Efforts made by ITH are continually monitored and evaluated its effectiveness. It is proven by the addition of the empty bunch application dose which was originally 25 tons/hectare to 40 tons/hectare due to a dose of 25 tons/hectare is not effective enough to supply organic material to the soil.


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

ITH has developed a management plan of Buffer Zone. ITH has also put up prohibition signs for hunting wildlife, poisoning and to electrocuting fish in the HCV area. The number of HCV signboards installed is 19 and they are all in good conditions. Number of warning signs installed are 54 with 2 signs are damaged. ITH has planted the area surrounding Buffer Zone with some erosion barriers such as vetiver grass and hard crop trees such as mahogany, sungkai (Peronema canescens Jack), quickstick (Gliricidia sepium), hibiscus, kapok tree (Ceiba pentandra), rosewood (Pterocarpus indicus Willd.), white teak (gmelina arborea). There is a recapitulation of HCV monitoring for the plants available from August 2011 to August 2012. Number of plants grow are 2,904 trees. For exampe: planting documentation of hard crop trees in the buffer zone area in 2012, division 2, Block E22 (Rawa Belibis) covering 1.33 hectares, type of plants area 20 seeds of mahogany, 33 seeds of white teak, 2 seeds of rosewood with spacing = 8 meter. ITH has set boundaries pole of buffer zone for a 100-meter large river (left-right) in yellow painting, and 50 meters (left-right) for the small river. (Minor non conformance CAR 2009.08 is closed) There is evidence of cover letter reporting the implementation of Environmental Management Plan/Environmental Monitoring Plan (RKL/RPL) Semester 1 Year 2012 No. 020/SKF-SPL/IX/2012 to the Local Environment Bodies (BLHD) of Kotawaringin Barat District, dated on 6 September 2012. Delivery evidence of the Environmental Management Plan/Environmental Monitoring Plan (RKL/RPL) document semester 1 year 2012 is on behalf of PT. Indotruba Tengah with cover letter No. 24/ITH/PSM/VII/112 dated 31 August 2012 to: Environmental Ministry cq. Assisstant Deputy of Agro Industrial Pollution Control Affairs, Building B 4th Floor, Jln. D I Panjaitan Kav. 24 Kebon Nanas, East Jakarta 13410. The letter was accepted on 4 September 2012. Evidence of cover letter reporting the implementation of RKL/RPL to the Local Environment Bodies Seruyan District in Kuala Pembuang, dated on 31 August 2012 is available. ITH has conducted effluent quality test every month. There are letters and test result report (LHU) for effluent pond/application, the location is Sekunyir POM dated 1 March 2012. Number of letter 0474-E/BPKIMI/BRSBB/2012. ITH has conducted effluent quality test in monitoring wells/non-application, letter and test result report (LHU) in POM Sekunyir on 2 February 2012. Number of letter 0475-E/BPKIMI/BRSBB/02/2012. ITH has conducted effluent quality test in Buaya River, letter and test result in Sekunyir POM on 2 February 2012. Number of letter 0478-E/BPKIMI/BRSBB/02/2012. The POM conducted effluent management in the waste water treatment plant (WWTP) to the silt-pit (flat bed) and and is used for land application. Effluent in the POM is processed in 9 ponds and the last pond (No. 9) is flowed as a land application. ITH has periodically conducted BOD monitoring of the mill effluent every month. The monitoring of effluent quality of palm oil mill is conducted by measuring the test parameters in accordance with the Regulation of Environmental Ministry (Decree No. 29 Year 2003). Based on the effluent quality test conducted by the Assessment Agency for Climate Policy and Industrial Quality of the


ASSESSMENT REPORT


Center of Industrial Research and Standardization of Commodity Testing and Envrionmental Laboratory, Industrial Ministry, the BOD of mill effluent is under the threshold standard. Here are the test result of the effluent BOD of Sekunyir POM in the period of January-July 2012 (Pond 9 – application outlet).

Test Parameter

Unit Month Quality Standard January

’12 February

‘12 March

’12 April ’12 May ’12 June ’12 July ’12

BOD mg/L 372 525 453 288 810 810 1,280 5,000

pH - 6.95 6.95 8.02 6.1 7.22 6.32 6.14 6-9

The data of water usage and fresh fruit bunches being processed are monitored/recorded and are included in POM monthly report in M³/ton unit of FFB. The data was evaluated in accordance with the usage standard and the follow-up improvement has been conducted.


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

ITH has consistently applied the Integrated Pest Management (IPM) in the work area. The IPM program has been included in the annual work plan and the budget has been provided. Until the Surveillance-2 activity was conducted PT. ITH continually strived to plant beneficial plants with a ratio of 1:10 and Bowl on Box ratio of 1:20. ITH has had the monitoring records of the area of IPM that has been programmed. IPM area monitoring is recorded and monitored. It is conducted at the same time with the calculation of pest census by ITH. ITH will see the trend of the pest and disease development and the realization of IPM program applied. Its target is that the spread or development of the pest in the estate area is inversely proportional to the IPM program. With this trend the estate management especially pest and disease control to be more environmentally friendly. There is recorded evidence of the IPM training in the form of training attendance list, training materials and the documentation. The training was held on 11 March 2009 in Kartika Mas Hall, Sekunyir Estate. Sekunyir Estate IPM officer, Mr. Abdusalam; Seruyan Estate IPM officer, Mr. Siswanto. ITH has conducted pesticide toxicity monitoring. It is conducted by observing the usage amount of active substance per hectare. ITH has also conducted recapitulation of the monitoring from 2005 to 2012. The recapitulation was made in the form of charts and the usage trend was evaluated. From the result of the diagram recapitulation, it is obtained the information that pesticide toxicity trend in budget year 2011-2012 is 0.09 active substance per hectare.


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

ITH still uses the same types of agrochemical substances used on 1st surveillance as follow: 1. Eagle 480 AS; active substance: Gliphosat; characteristic: systemical. 2. Starane 200 EC; active substance: Fluroxypyr; characteristic: systemical. 3. Trap 20 WP; active substance: Methyl Metsulfuron; characteristic: systemical.

4. Prima up 480 AS; active substance: Gliphosat; characteristic: systemical. 5. Decis 2,5 EC; active substance: Deltrametrin; characteristic: systemical.


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Based on the result of field visit all agrochemical substances used by ITH have been registered and permitted by authorized agency in accordance with the register code printed on the packaging of the agrochemical substances. ITH has had the records of pesticide usage. Based on the recording, information obtained is the active substance of pesticides, area applied, the amount of usage per hectare and the application. The usage is always reorded and monitored to ensure that the use of the pesticide (agrochemical substance) can be monitored and minimized. ITH has used agrochemical substances in accordance with the predetermined dose (indicated on the packaging). Based on the result of field visit in Sekunyir Estate and Seruyan Estate, the spraying of the weeds has met the instruction manual. For example: herbicide for Circle and Harvester’s Path (Pasar Rintis): (1) Prima Up 200 cc per hectare, (2) Trap20 gr per hectare; Lalang Prima Up 102 cc per hectare; Gawangan Gramoxone 220 cc per hectare, Trap 18 gr per hectare. Pesticide Decis 150 cc per hectare. The use of agrochemical substance application has been carried out by trained personnels. ITH has conducted agrochemical waste management including pesticide packaging waste in accordance with the applicable regulation. For example: 1. ITH only collects the waste, as for that it has obtained a license of hazardous waste temporary storage (Decree of Kotawaringin

Barat Head of District No. 660/541/BLH-III.1/XI/2011 regarding License of Hazardous Waste Temporary Waste to PT. Indotruba Tengah) as required in Government Regulation No.18 year 1999 and Government Regulation No. 85 jo to 1999 regarding hazardous waste management. ITH has 3 (three) points of hazardous waste temporary warehouses namely:

- SRE (Seruyan Estate) Storage measuring 5m x 10m x 4m which is located at the coordinates 02o 24’ 32.0” S and 112o 03’ 59.8” E.

- SKE (Sekunyir Estate) Storage measuring 9m x 10m x 4m which is located at the coordinates 02o 26’ 34.3” S and 112o 00’ 27.5” E.

- SKF (Sekunyir Factory) Storage measuring 9m x 13m x 5.6m which is located at the coordinates 02o 26’ 34.3” S and 112o 00’ 27.5” E.

2. ITH has also equipped the Hazardous Waste Temporary Warehouses with the hazardous waste symbols as required in Decree of Regional Environment Impact Control Agency No. 5 year 1995 regarding hazardous waste symbols and labels.

3. ITH has also installed emergency response equipment in the hazardous waste temporary warehouses such as eyewash, MSDS (Material Safety Data Sheet), PPE etc. as required in Government Regulation No.18 year 1999 and Government Regulation 85 jo to 1999 regarding hazardous waste management.

4. In recording the activities of storing the hazardous waste and the balance of hazardous waste, ITH has used the form in accordance with Appendix of Decree of Kotawaringin Barat Head of District No. 660/541/BLH-III.1/XI/2011.

5. ITH has reported activities of storing the hazardous waste and the balance of hazardous waste to the relevant agencies. For example: the Submission of Hazardous Waste Management Activity Report in the form of log book documents of hazardous waste (including used packaging of pesticide) during the period of November 2011 to April 2012, the balance of hazardous waste period November 2011 to April 2012 along with the Copy of Hazardous Waste Manifest. The documents have been received by Environment Bodies of Kotawaringin Barat District on 26 April 2012. It complies with the Government Regulation No. 18 year 1999 and Government Regulation 85 jo to 1999 regarding hazardous waste management. . (CFA/Observation CAR 2009.09 is closed)

By the time surveillance-1 was conducted, ITH still used active substance of paraquat (only to spend the remaining stocks), but when surveillance-2 was conducted, active substance of paraquat was no longer used. Based on the records of the use of agrochemical substances and records of central warehouse cards, PT. ITH no longer used active pesticide of paraquat since 26 June 2011. The last use of paraquat was on 25 June 2011. ITH has conducted periodical health screening for spray and manuring workers (chemical related) every 6 (six) months. The examination include health condition, complaints, diagnose and therapy with the provision of medicines and vitamins. The latest screening was on March 2012. For example: Certificate of Worker Health Examination on behalf of Ani Lestari (Spray worker) No. 081/SPKP/SRE-Klinik/2012. The certificate valids for 6 (six) months. The health screening is conducted by ITH doctor who has earned Company Hygiene, Health and Occupational Safety Training for Industrial Company Doctors in accordance with Regulation of Labour, Transmigration and Cooperation Ministry No. 01/MEN/1976. Based on the result of field visit and interview with the spray workers in Sekunyir Estate and Seruyan Estate, information obtained is that all spray and manuring workers have periodical health screening every 6 (six) months.


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ITH has a policy not to hire pregnant or breast-feeding women in the area related to chemicals. Based on the document observation and field visit to Sekunyir and Seruyan estate, the auditor team did not find any women who are pregnant or nursing working in the area related to chemicals.


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

The Document of Occupational Health and Safety (OHS) Policy expressed in the Minamas Plantation OHS Commitment for Zero Accident and Safety Culture by Group Head Plantation Indonesia on 31 May 2007 is available. That policy has already been socialized in both Estates and Mills. The evidence of occupational health and safety programs implementation is:

- The Fire Extinguisher Inspection Document of PT. Indotruba Tengah-Minamas Plantation Sekunyir Estate which contains the check list of infrastructure and facilities of forest, land and yard fire prevention and control is available. Date of last inspection was 11 August 2012.

- Memorandum of license for drivers in Estate/Mill/Bulking station/MRC.

- The list document of trainings that related to safety and health of PT. ITH Div 1 Sekunyir Estate:

The Training of the Use of Occupational Protective Equipment (OPE) and Personal Protective Equipment (PPE) for harvesting, on 03 August 2012, the participants consisted of 1 Foreman (2 participants), Harvesting Foreman (6 participants) and Harvesting Workers (35 participants)

The Minutes of Block Manuring System (BMS) Training at Sekunyir Estate on 25 June 2012, the participants consisted of Staff (1 participant), Foreman (1 participant) and Spraying Worker (18 participants).

The Minutes of Fire Fighting Training Simulation, on 30 August 2012. The participants consisted of Staff (Dodik Prayitno, Widodo, Lukman Arief, M. Lasino, and Suprapto), Security (2 participants), traction (2 participants), transport driver (1 participant) and Emergency Response Team (16 participants).

The Minutes of Fire Fighting Simulation, Saturday 28 January 2012. The participants consisted of staff (6 participants), security (1 participant), Office Staff (8 participants), laboratory (4 participants), division of process shift I (30 participants), division of shift II process (9 participants), M&R Division (14 participants), Transport Division (9 participants), FFB Grading (2 participants) and Internships Student (2 participants).

The Socialization of Minamas Plantation OHS programs for all Supervisors of SKE Division I and II, on 24 January 2012. The participants consisted of Assistant of Division (1 participant), Harvesting Foreman (5 participants), Maintenance Foreman (2 participants), Emplacement Foreman (1 participant), Transport Foreman (2 participants) and Clerk (5 participants).

The Guiding Commitee of Occupational Safety & Health (P2K3) at estates which has been legalized by The Labour and Transmigration Agency is available. For example the P2K3 of Sekunyir Estate which was legalized based on the Decree of the Head of Labour and

Transmigration Agency of Kotawaringin Barat District No. KEP.1051 DTT/HIP-K3/VIII/2011. As for Mills, it was legalized based on the Decree of the Head of Labour and Transmigration Agnecy of Kotawaringin Barat District No. 574.HIPK.06.IV.2011 on 18 April 2011. Records of every 3-month P2K3 periodical meeting in the form of Minutes of P2K3 Internal Meeting is available. For example the minutes of meeting at period of April 2011 and it has been reported to the Labour and Transmigration Agency every 3 months. E.g. Sekunyir’s Estate and Mill P2K3 Report. ITH has also regularly reported the activities of P2K3 organization to related agencies every 3-month using forms that have been adapted to the provisions of local Labour Agency. (CFA/Observation CAR 2011.23 is closed) ITH has involved all employees into Labour Social Assurance Program which includes: Occupational Accident Insurance, Death Insurance, Retirement Insurance, and Health Care Insurance. Payment Receipt of Labour Social Assurance is available, for example payment on 03 September 2012, Payment of Labour Social A ssurance of PT. ITH’s permanent employees via Bank BNI 46 with number of employee 406 people, amount of Wages IDR 655,222,584 and amount of dues IDR 42,851,557.

ITH has routinely performed periodic medical check-ups for operators who work in high risk jobs (such as spraying workers, fertilizing workers and mills’ operators) by company doctors who have certificates from Center of Company Hygiene and Health


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of Kotawaringin Barat District. Records of Certificate of Workers Medical Check-Up Result which valid for 6 months (for estate) and 1 year (for mill’s worker) are available. For example the Certificate of Worker’s Periodic Medical Check-Up (number: 18/SPKP/SKE-Klinik/2012) on behalf of Mr. Gunadi, 22 years old, male, SKE Major Office Unit (Warehouse Clerk), Date of Check-Up: 6 March 2012, check-up done by Doctor Charles Bona M.Hutabarat, with result of check-up: is able to work with health requirements. As for things that become the focus of the doctor’s examination are the check-up of skin, eyes, ears (ear, ear canal, wax and Tympanic Membrane), Nose, Throat, Mouth, Heart Beat, abdomen, nerves, muscles and lymph nodes. ITH has already owned the risk analysis document for Occupational Health and Safety Program. This document was prepared for the identification and analysis of potential hazards that may occur in all areas of ITH as well as the recommendation to minimize the occurence of occupational accidents. Based on the document reviews and field visits either at the mills or in the estates, it was acknowledged that ITH has performed the socialization of risk analysis document to all workers. ITH has also performed the evaluation towards that socialization activities using questioner method. (CFA/Observation CAR 2011.24 is closed). Records related to Occupational Health and Safety program are as follow:

- ITH has shown evidence that the welder at Sekunyir Palm Oil Mill has owned the license certificate as Welder, which is on behalf of Desmil Hamdi (No. Certificate 038 PK) with result of Satisfactory. (Minor non conformance CAR 2011.25 is closed)

- Training of the Use of Occupational Protective Equipment (OPE) and Personal Protective Equipment (PPE) for harvesting, on 03

August 2012, the participants consisted of 1st Foreman (2 participants), Harvesting Foreman (6 participants), and Harvesting Workers (35 participants).

- MSDS Training (Laboratory, WTP Station and Sekunyir Factory Boiler Station), 02 March 2012. The participants consisted of Lab/Analysis Foreman, Sample, WTP operators and Boiler operators.

The procedure of Emergency Response and Readiness is available both in Estates and Mills, for example: 1. For Estates

- The SOP of Personal Protective Equipment for Spraying

- The SOP of Blocking Spraying system

- The SOP of occupational accidents data recording

- The SOP of pictured OHS with Policy No.: 722/PSM-PSS/10

- Hazards control (HIRAC/Hazard identification Risk Asessment Controll), OHS procedure No. 703/TEMS-P2K3/07)

- The Document of Best Practice Spraying SOP which contains: Minutes of training MSDS, First Aid and Spraying Best Practice

2. For Mills

- The SOP of mill’s total stop in case of fire emergency response and Natural Disaster per station legalized on 02 February 2009) (document number: SP-011-001) describing the emergency response steps for each work station at Sekunyir Mill (concerning the signs of emergency response and details that must be considered).

- Emergency Response Procedure of Sekunyir Mill (Document Number: SS-06) describing the procedure of fire handling at the workplace and workplace environment which includes the case of fire, explosion and spills, procedure of being trapped in room of fire, Procedure of dealing with earthquake at the workplace and workplace environment

- Evacuation routes in case of emergency are available at Palm Oil Mill as a guidance of self survival in time of emergency situations such as during the fire.

- The procedure of Explosion Prevention and Handling (No. 394/ITH-KRD-18/11) describing the explosion handling procedure, explosion widespread prevention, the handling of leaks caused by explosion, the handling of fire caused by explosion and evacuation handling due to explosion.

- Lay Out of Fire Extinguisher location, Lay Out of Faucet-Out Hydrant location of Sekunyir POM, Lay Out of Location and Place of Hause Real are available.

ITH has provided PPEs for employees, such as: safety shoes, work uniform, Helmet, Ear Plug, Mask and Hand Gloves. The submission of PPE is proven in the form of Minutes of Personal Protective Equipment Subtitution (SKF/K3l-BA-PAPD/2009) for example the minutes of personal protective equipment substitution on behalf of Mr. Turip on 04/06/2009 in the form of Helmet


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and Safety Shoes PPE. As for other PPEs such as Mask, Hand Gloves and Ear Plug were provided by the company and collected in boxshift. The First Aid Emergency Boxes inventory is available, for example the First Aid Boxes Inventory of PT. Indotruba Tengah Sekunyir Estate that describes the number and condition of those boxes at Sekunyir Estate, as many as 20 boxes at 20 locations. Based on field visit to Chemical Warehouse, Workshop, Seruyan Estate Hazardous Waste Warehouse and Sekunyir POM, it was known that periodical inspection has been performed on those First Aid Emergency Boxes every month. (CFA/Obsrvation CAR 2011.26 is closed) First Aid EmergencyTraining was conducted by ITH on 02 April 2011 at Central Polyclinic which was presented by The Nurse Coordinator and attended by 18 participants such as the Estate Assistant, PSQM Assistant, Nurse, Mill Assistant and Foreman, equipped with list of participants and photos. Based on the result of inteviews with Fertilizer Foreman; Mr Ahmad Syaiful Jumudy (36 years old) and Spraying Foreman Yuliadi (41 years old), it was known that those related foremans have understood the first aid emergency for workers who have symptomps of poisoning, for example the spillage of pesticides on hands, as soon as possible should be soap-handwashed, and foreman should bring that worker to polyclinic to have further treatment by estate’s nurse. The Estate’s nurse has provided the NaCl liquid to wash and clean the worker’s skin which is spilled by pesticides. ITH still consistently conducting the monitoring of Occupational Accident which fully informs about: the Month of Accident; the number of cases, the locations of the accident, types of accident, consequences, lost work hour, the causes, follow-ups and result. Occupational Accident Monitoring has been performed every month. Sample of Occupation Accident Monitoring such as: Occupational Accident Monitoring at Sekunyir Estate. As an example: on 23 June 2012, name: Mustofa, status: General Work Requirement (SKU), the location of accident: E5, type of accident: trauma on eyes, cause of acident: hit by loose fruit. The evaluation of accident has also been done every 3 months by the Guiding Commitee of Occupational Safety and Health. Analysis was done by making safety statistics in order to find the cause of accident, based on that analysis’ result, it was known that the main cause of the accident was the behavior of the harvester who has not conciously performed the work safety. The preventive and corrective actions taken were the socialization of HIRAC, implementation of regular briefing related to occupational accident anticipation, provision and control of PPE, and safety promotion implementation (safety alert, safety signboard).


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

ITH sets the training needs of an employee as contained in the Training Identification Matrix (2011/2012) of PT. Indotruba Tengah. The 2011/2012 Training Identification Matrix describes the required and provided 21 positions/Titles and training programs. For example: identification on spraying workers; it is identified that they need maintenance, spraying, general OHS, and chemicals OHS trainings, those trainings have been provided. The 2011/2012 Training Program of PT. Indotruba Tengah is available. The 2011/2012 Human Resource development and training program includes 19 training programs, trainees, training facilitators, and implementation schedules. For example spraying tehniques, with the participants of spraying foreman and team (spraying workers) was scheduled to be implemented on August 2011. The training records of each employee is listed on the training list document of Minamas Plantation PT. Indotruba Tengah for Sekunyir Estate and Seruyan Estate. This document provides the information of types of training that have been undertaken by ITH to employees. The types of training that have been implemented by ITH such as: - The training of the use of Occupational Protective Equipment (OPE) and Personal Protective Equipment (PPE) of harvesting was

implemented on August 2012 at Sekunyir Estate (Division I Office) with participants consisting of 1st Foreman (2 participants), Harvest Foreman (6 participants), Harvest Worker (35 participants). The materials presented were the introduction of harvesting PPE, Harvesting Occupational Protective Equipment, HIRAC and Harvesting SOP also the function of that PPE and OPE

- BMS (Block Manuring System) training was implemented on 25 June 2012 at Sekunyir Estate with training participants consisting of Staff (1 participant); Foreman (1 participant); Spraying Worker (18 participants). The materials presented were hancak distribution, dilution system model and sowing system models and supervision.

- Firefighting Training Simulation was implemented on 30 August 2012 at Sekunyir Estate with participants consisting of Staff (5 participants); Security (2 participants);Office Employees (2 participants); Drver (1 participant); Emergency Response team (16


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participants. The materials presented were land or office fire handling procedure.

- First Aid Emergency Simulation for Seruyan Estate was implemented on 09 August 2012 at polyclinic with training participants consisting of Medical Team, Supervisors, and Staff of PT. ITH. The materials presented is the First Aid Procedure and Its handling.

- The training of the use of Fire Extinguisher at Seruyan Estate Staff Housing Complex was implemented on 24 September 2011 with training participants consisting of Seruyan Estate Staff. The materials delivered were related to the handling of fire emergency response by using fire extinguisher (APAR).

In order to guarantee the use of trained contractors by the company, ITH establishes the terms in the Contractor Mutual Working Agreement Letter Article 11 (Competence and Quality Assurance) that requires contractors to have licenses, certificates and qualifications as required by the applicable law and regulations, which are necessary to perform the work. For example inside of the CV. Mitra Perkasa Mutual Working Agreement Letter (SPK No. SKE/SPK-LKL/I/2010/051). Based on the company profile attached by the contractor in completing the requirements, it was known that that contractor has complied with the article 11 of Mutual Working Agreement Letter. For example Company Profile of CV. Lingga Kencana with SIUP (90/BIMUS/KTW/V/2005/19 May 2005), certificate of construction service enterprise (No.: 0559/ASPEKINDO/15/07/09), Work Skills Certificate (46816/09/069/ATAKI/SKT/VII/2009).


PRINCIPLE #5 Environmental responsibility and conservation of natural resources and biodiversity

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

ITH already has the EIA document in accordance with the approval of the Minister of Agiculture No. 020/RKL-RPL/BA/X/04 on 18 October 1994 with a study area of 10,000 Ha and POM capacity 30 tons FFB/Hour and can be increased to 60 tons FFB/Hour, as for the installed capacity of the existing POM is 45 tons FFB/Hour. The reporting and monitoring are well-planned, coordinated, systematic and continuosly implemented. The monitoring and Reporting of Environmental Management Plan and Environmental Monitoring Plan refers to the applicable rules, which is the Decree of Environmental Ministry No. 45 Year 2005 regarding the Environmental Management Plan and Environmental Monitoring Plan implementation Report Manual. It is also the manifestation of commitment and concern of PT. ITH to perform the environment management correctly, sincerely, consistently and responsibly so that the environment quality can be maintained according to its functions. Delivery proof of Environmental Management Plan and Environmental Monitoring Plan report at semester 1 year 2012 on behalf of PT. Indotruba Tengah with covering letter Number 24/ITH/PSM/VIII/12 on 31 August 2012 addressed to the Ministry of Environment cq Assistant Deputy of Agro Industrial polution control affairs is available. Delivery proof of Environmental Management Plan and Environmental Monitoring Plan report at semester 1 year 2012 Letter No.: 24/ITH/PSM/VIII/12) on 31 August 2012 addressed to the Head of Regional Environment Body (BLHD) of Seruyan District at Kuala Pembuang and Kotawaringin Barat District at Pangkalan Bun is available. Up to the implementation of Surveillance 2, there was no revision in the company’s scope such as: the expansion of the area, addition to mill’s capacity more than allowed. Therefore, revision to environmental management document is not needed.


5.2 The status of rare, threatened or endangered species and high conservation value habitats, if any, that exist in the plantation or that could be affected by plantation or mill management, shall be identified and their conservation taken into account in management plans and operations.


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ITH already implemented the identification of HCV, through PT. Aksenta as consultant in year 2010. The preparation of HCV document has been through public consultation phase (List of participants is provided) and expert’s review (peer review). Expert’s review was conducted by Ir. Nana Mulyana Arifjaya, Msi. Results of HCV Identification at Land use Title (HGU) area of PT. ITH (an area of 76.56 Ha) can be presented as follow: - HCV 1.23.57 ha (as well as having the attributes of HCV 4.2 at Seruyan Estate)

- HCV 1.36.63 ha (there is an area of 2.83 Ha that also has the attributes of HCV 4.2) is a fauna refugium or grouse (Dendro cygna) stopover.

- HCV 4.1 5.42 ha

- HCV 4.266.29 ha (there is an area of 10.2 Ha that also has the attributes of HCV 1.2 or HCV 1.3) (Minor non conformance CAR 2011.27 is closed) Based on that HCV identification, the company has taken some management actions as follow: 1. Creating the wildlife conflict handling SOP 2. Performing the identification of flora and the monitoring of fauna. 3. Installing the HCV areal sign board. 4. Installing signboards in the form of induced protected wildlife either IUCN, CITES regulations or Statue. The steps taken by ITH to protect endangered and threatened species and their habitats in accordance with the relevant regulations which inside of it including actions to control any illegal and improper hunting, fishing or harvesting are as follow:

Has compiled the HCV handling plan management in accordance with the results of HCV identification.

Installed prohibition sign boards of hunting of wildlife, poisoning and electrocuting fish at HCV area.

Planted the Buffer Zone area with kind of erosion barrier plants such as vertiver grass or trees, for example Mahogany, Rosewood, Sungkai, Ketapang/tropical almond (Terminalia catappa), quickstick (Glerecidae sepium) and Hibiscus. Total number of plants that have been planted are: 2,904 trees.

Included some staffs to attend RSPO training.

Performed HCV Internal Assessment with some of the staffs.

Compiled and established SOPs for activities that related to HCV.

Recorded some endangered wildlife which were found at ITH working area, such as: Cuckoo, Merbah, Bulbul, White-breasted waterhen (Amaurornis phoenicurus), Greater Coucal (Centropus sinensis), Black Cobra and Asian leopard cat.

Implemented the HCV monitoring and manajemen plan.

Made the SOPs of wildlife conflict management, flora and fauna identification, wildlife monitoring, HCV area installation board, installing signboards in the form of induced protected wildlife either IUCN, CITES regulations or national Statue. (Orangutan, Sun Bear and Anteater).

Conducted socialization to the public through the distribution of leaflets that related to the existence of HCV area at PT. ITH. (CFA/Observation CAR 2011.28 is closed)

ITH has installed signboards that related to the existence of endangered species that are protected by the applicable law, IUCN, CITIES etc. Based on the results of auditor team observation to the field (Blok A 34 Seruyan Estate), where that area, based on the Identification of HCV is included in HCV 1.2 category, posters and signboards equipped with photos of protected wildlife have been installed. ITH has also performed the socialization of HCV areas to communities around estate through the distribution of leaflets. . (Minor non conformance CAR 2009.08 and CAR 2011.29 is closed) ITH has appointed special officers for HCV management as follow: a. Seruyan Estate appointed Mr. Siswanto through Letter of Manager SRE No. 001/SRE/RSPO-HCV/05/2011 on 09 May 2011

and Mr. Zaenal Abidin through Letter of Estate Manager No. 002/SRE/RSPO-HCV/05/2011 on 09 May 2011. b. Sekunyir Estate appointed Mr. Budi Cahyono through Letter of Manager SKE No. 02/SP-SKE/11 on 22 September 2011 and

Mr. Riyono through Letter of Estate Manager No. 02/SP-SKE/11 on 22 September 2011. ITH has conducted the training of endangered species and HCV management for the appointed officers such as Mr. Siswanto, Riyono which was conducted on 25 – 26 August 2010 by the Natural Resources Conservation Centre (BKSDA) of Central Kalimantan Province.


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

ITH has performed the identification of pollution and waste sources either in the estates or at the mills. For example some information such as sources of waste, waste name, types of waste, classification, management objectives and notes can be found in the identification document of Estate work area. However the sources of waste that were identified in generating pollution and waste are Generators housing, Fertilizing activities, Workshop, Chemical Warehouse, Spraying, Office, Housing/Mess, Polyclinic, Public bathroom. As for the types of generated waste are used oil, air pollution emission, used oil cans, used oil filters, used spareparts, used cloth rags, used PPEs, used batteries, used lamps, used sacks, used hand-gloves, used aprons, used wash-water, pesticides packages, used oil drums, used chemical jerrycans, printer ribbons, etc. As for area of mill, sources of waste identification is implemented at each area (station) at Sekunyir Mill. However, the sources of waste and pollution at mill are Loading Ramp station, Sterilizer Station, Press Station, Nut & Kernel Station, Clarification Station, Water Treatment Plant, Boiler Station, Engine Room Station, Store, Workshop, Office, Laboratory, Canteen and effluent Treatment Plant. As for the types of generated waste are used cloth rags, used oil, fiber, shell, empty bunch, kernel oil, waste water, smoke, etc. For Mill and Estate areas (Sekunyir and Seruyan):

- To carry out the management of generated waste through estate operational activities, efforts taken by the company in order to avoid and reduce pollution are as follow: a. ITH has conducted the sources of waste identification. b. ITH also has the SOP of Solid Waste Management (Non Hazardous); Hazardous Waste Spill, and Hazardous Waste

Storage (Document No. ITH-SKF/K3L/009). c. ITH also has the SOP of Hazardous Waste Management (Document No. 394/ITH-LB3-23/11). d. ITH has also conducted the recording of Hazardous and Non Hazardous Waste Management. Its records has also been

reported to the relevant authorities. The records of Hazardous Waste management document handover is available. For example: The Submission of the Report of Hazardous Waste Management Activities in the form of Hazardous Waste log book document (including the used pesticide packaging) period of November 2011 untill April 2012, the Hazardous Waste Balance period of November 2011 untill April 2012 an also the Copy of Hazardous Waste Manifest. That document was accepted by the Environment Body of Kotawaringin Barat on 26 April 2012.

ITH has identified the types of generated Hazardous waste, which were: used lamps, used batteries, used oil, used filters, used hand gloves and used cloth rags, etc. Its management was by collecting them into places that have obtained the license from the Head of Kotawaringin Barat District based on the recommendation of the Regional Environment Body of Kotawaringin Barat (The Decree of the Head of Kotawaringin Barat District No. 660/541/BLH-III.1/XI/2011 regarding the Hazardous Waste Temporary Storage License to PT. Indotruba Tengah) as required in PP No. 18 year 1999 and PP 85 joint to 1999 on Hazardous waste management. ITH has owned 3 (three) Hazardous waste temporary storages, which are:

a. SRE (Seruyan Estate) storage location, measuring 5m x 10m x 4m, located on coordinates 02o 24’ 32.0” S and 112o 03’ 59.8” E

b. SKE (Sekunyir Estate) storage location, measuring 9m x 10m x 4m located on coordinates 02o 26’ 34.3” S and 112o 00’ 27.5” E.

c. SKF (Sekunyir Factory) storage location, measuring 9m x 13m x 5.6m located on coordinates 02o 26’ 34.3” S and 112o 00’ 27.5” E.

ITH submitted the Hazardous waste in the form of used oil to contractor (transporter) who has license of collecting Hazardous waste of used oil/dirty oil type. Last submission was on 05 May 2012 as many as 31 drums of solid type Hazardous waste. Based the observation of auditor team to the hazardos waste storages at Sekunyir POM and Seruyan Estate, the team assessed that those storages have been equipped with Fire Extinguisher, Personal Protective Equipment and information of their coordinates. ITH has also performed the recording of incoming and outgoing Hazardous waste balance monitoring; of those temporary storages.


ASSESSMENT REPORT


ITH classifies waste into 2 types namely Hazardous and Non Hazardous waste (based on waste identification). ITH has consistently performs the monitoring/analysis toward generated waste through its operational activities. For example, for types of hazardous waste, ITH performs the monitoring by conducting the recording of hazardous waste management actvities and reports it to the relevant authorities every 6 months (see indicator Major 4.6.4 and Major 5.3.2). For types of Non Hazardous waste (including effluent), PT. ITH has made efforts to manage these types of wastes. For example: PT. ITH has performed the monitoring toward the quality of effluent that will be applied to the land (application land) every 1 month. The parameter of that effluent quality measurement has been in accordance with the Regulation of Environmental Ministry (KepmenLH No. 29 Year 2003) and based on the measuremet results, the quality of effluent is always on the allowed threshold (See Minor 4.4.3).


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

ITH has consistently conducted recording that associated with the renewable energy usage monitoring along with its analysis. For example, ITH was capable of showing the records of the renewable energy usage monitoring along with its analysis for 2011 – 2012 year budget. Recapitulation of the renewable energy usage monitoring in the form of fiber and shell was well documented. The monitoring of fiber and shell usage is conducted every month, then at the end of the budget, the analysis on the use of fiber and shell will be performed. For example, in the document of renewable energy usage monitoring records of Sekunyir POM, it is explained that the use of renewable energy (fiber and shell) at PT. Indotruba Tengah in 2012-2012 year budget reached 13 tons/produced FFB in average. It shows that the use of fiber and shell every month remained stable (flat). So, based on this analysis, it can be concluded that the operation of fiber and shell usage was conducted efectively to the reduction of fossil energy. ITH has consistently monitored the use of fossil fuels for the benefit of mill operation. ITH has also conducted its efficiency analysis. For example: the records of fuel (diesel) usage in its monthly report for the estate and mill from July 2011 – June 2012 with an average usage of 13,954.8 Ltr/month. Analysis of efficiency of diesel usage for general generators was at an average of 0.028 Kwh/Ltr.


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.

PT. ITH has conducted replanting activities for the 1992 year of planting at SRE and SKE that began in September 2012 with activities of cutting down, stacking and mincing/chopping/trees as many as 72,127 stems. Those replanting activities were carried out without burning in accordance with company policy set out in the Sustainable Plantation Management Manual SOP Policy No. 724/TQEM-SPMS/09; No. Copy 20.11.02 distribution date on 08 November 2010 regarding the Zero Burning Tehnic (5.7.2). Based on the results of a field check at Block F001, it was found that replanting activities were carried out by cutting down the oil palm trees, stem chopping and stacking along the edge of the planting hole. The fire danger warning signs and fire tower to monitor the area against fire were also found. As described in indicator 5.5.1, the PT. ITH has had a policy of zero burning (without burning) contained in the Sustainable Plantation Management Manual SOP Policy No. 724/TQEM-SPMS/09; Copy No. 20.11.02, distribution date on 08 November 2010 regarding the Zero Burning Technique (5.7.2). Replanting records made by PT. ITH were available. Based on the observation of documents and field visits at Block F001 Sekunyir Estate, it was known that the company was not conducted any burning activity. There were signboards that prohibit the use of fire at the replanting area. As previously informed at the time of surveillance I, PT. ITH has had the emergency procedures for land fires emergency response in the form of prevention and control of land fire work instructions Policy No. 394/ITH-PBK-13/11 that has obtained


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approval from the unit management of managerial level. When Surveillance II was conducted, PT. ITH already performed the simulation of fire handling on 09 August 2012 at SRE and on 30 August 2012 at SKE with simulation materials included the identification of types of fire, how to rescue and evacuate workers, fire control, emergency response teams ability measurement, the simulation of the use of Fire Extinguisher and the simulation of land fires extinguishing. These simulations activities were attended by 26 participants at SKE and 17 participants at SRE. Similarly, the acitivity of firefighting simulation has also been conducted at Sekunyir POM on 28 January 2012 and was attended by 20 participants. (CFA/Observation CAR 2011.30 is closed) As informed at the time of Surveillance I that, PT. ITH has established the organization of emergency response including land land fires that consists of: the Supervisor and Protector, team Coordinator, Field Coordinator and areas under them. ITH has also listed the infrastructures and facilities of land fire control. Infrastructures and facililties owned by ITH per August 2012, namely:

a. SKE includes: Mask (15 pieces); Glasses (15 pieces), Boots (10 pairs), Helmet (20 pieces), leather gloves (17 pairs); TLB/Tractor Loader Beco (1 piece); Greeder (1 piece); tank truck wih capacity of 2,000 Liters (1 piece); Pick up (1 piece); Alkon EY20 (2 pieces); Hose Fire (4 pieces), HT (6 pieces); RIG Icom (3 pieces); Fire Extinguisher (65 pieces).

b. SRE includes: Fire fighter safety Helm (7 pieces); rag (9 pieces), Gloves (5 pairs); hoe (7 pieces); cleavers (12 pieces); engine pumps Robin (2 pieces); Jerry cans (5 pieces); spiral spray hose (2 pieces); Fire Extinguisher (12 pieces), boots (15 pairs), safety glasses (15 pieces); bucket (14 pieces); fire beater (1 piece).

Based on the results of checks on the storage of firefighting infrastructures and facilities at SKE, all of them were complete and in a proper condition.


5.6 Plans to reduce pollution and emissions, including greenhouse gases, are developed, implemented and monitored.

The company has conducted the identification of sources of pollution and emissions at Sekunyir POM: - Air (boiler chimney 1,2,3 and generator chimney 1,2,3) - Noise (station of press, nut, kernel, boiler and engine room) - Vibration (station of press, nut, kernel, boiler and engine room) - The smell (waste management station/anaerobic pond). Measurement/monitoring of emission air from boilers chimney has been implemented every 6 months at each unit which is still active and equipped with smoke density meter (boiler chimney 1,2,3 and generator chimney 1,2,3) with measured parameters such as particulate, sulfur dioxide (SO2), Nitrogen Dioxide (NO2), Hydrogen Chloride (HCl), etc. Results of measurement showed those parameters were still under the required threshold. For the monitoring of noise and vibration (press, nut, kernel, boiler station and engine room) was done every 6 months by the second party (SUCOFINDO). Result of measurement showed a noise value above the threshold, for example: the value of noise in the engine room was 96.8 – 97.5 dB (threshold 85 dB); the company has done efforts to protect workers who work at that station in order not to be exposed to noise, which was by providing PPEs in the form of ear plug to minimize hearing damage to workers. The monitoring of the sources of smell pollution from the waste management station (anaerobic pond) has not been conducted because there was no accredited laboratory, however the planting of bamboo plants around the pond of waste was done to minimize smell out of the waste pond area. Based on visits to Sekunyir POM, 3 pieces of Smoke Density Meter equipment at boiler station 1, 2 and 3 were functioned well. ITH has made plans and efforts to reduce pollution and emissions with reduction target of 10% of the emission average parameter in the sources of pollution and emissions, which include: - Preventive maintenance by maintenance assistant. - Internal routine inspections by supervisors - Cleanliness, done regularly by the operator - Operator Training by the process assistant - Operations based on SOP by the process assistant


ASSESSMENT REPORT


- Emission Quality Monitoring by the second party (SUCOFINDO) The effluent waste was utilized for land application at Sekunyir Estate. Effluent Waste Utilization license for Land Application No.: 660/72/BPdl.III.4/VIII/2007 for the District of Kotawaringin Barat Head on 03 August 2001 is available. Effluent application monitoring is conducted daily, so is the feeding of waste into pond including with the number of applied flat bed, time of application, amount of volume (ltr/hour) and location of applied block. The evidence of effluent waste volume that has been applied to land in the form of LA Meter Flow Recapitulation of January – June 2012 period. For example: the average of effluent waste debit that has been applied to the land on June 2011 was still under the allowed threshold.


PRINCIPLE #6 Responsible consideration of employees and of individuals and communities affected by growers and mills

6.1 Aspects of plantation and mill management, including replanting, that have social impacts are identified in a participatory way, and plans to mitigate the negative impacts and promote the positive ones are made, implemented and monitored, to demonstrate the continuous improvement.

As previously informed during the surveillance I, that there is available the document of EIA of PT. Indotruba Tengah in 1993 and also the Document of Environmental Management Plan and Environmental Monitoring Plan (RKL/RPL), in which are stated the types of social impacts that might occur due to the oil palm plantation’s management by PT. Indotruba Tengah, along with their parameters. The parameters of social impacts being managed and monitored include; 1) Public perceptions, 2) Employment and 3) Social conflicts. PT. ITH has also prepared a Social Impact Assessment Report of PT. Indotruba Tengah for the year 2010, which demonstrated both positive and negative impacts resulting from the management of oil palm plantation by PT. Indotruba Tengah. By the time the Surveillance II was completed, there wasn’t any additional document of the most updated Environmental and Social Impacts. In an effort to perfecting the social impact monitoring result in a long shot, ITH has put together the programs of managing and monitoring public social impact analysis for the period of July 2011 – June 2012, which include: 1) Community health care service for residents in surrounding villages; 2) Dissemination and presentation to introduce the cultivation and the industry of oil palm plantations, given to primary schools around the company’s area; 3) Internship opportunity given to students for field works in PT. ITH; 4) Groceries support for the needy; 5) Meat distribution to local people around PT. ITH’s area on Eid al Fitri; 6) Mass circumcisions; 7) Employment programs; 8) Infrastructure development for the village; 9) Survey of impact management; 10) Data collection of the village’s demography; 11) CD program realization (Dump truck for FFB transportation). The entire programs have been completely applied on the premise with the involvement of the local people around the plantation area. In an effort to a sustainable social impact management, PT. ITH has established the social impact management program and its timetable for the period of July 2012 – June 2013. (Minor CAR 2011.31 is closed with observation) Based on the 1994 Environmental Impact Assessment document of PT. ITH, the scope of the area being assessed covered as vast as 10,000 hectares, while the entire size of the estate was 7,734.60 hectares. By the time the Surveillance II was completed, there were no additional to the estate area and no layout changes made to POM industry. This being the case, there is no need to do any changes to the result from the 1994 Environmental Impact Assessment studies. There are reports available of Environmental Management Plan (RKL) and Environmental Monitoring Plan (RPL) for the 1st Period of 2012 (January – June 2012). Also available is the handover report of RKL and RPL for the 1st Period of 2012, which was received by Environment Bodies of Kotawaringin Barat District on 6 September 2012 and by Environment Bodies of Seruyan District on 7 September 2012. The report was also forwarded to the Head of Environment Agency Cq. Deputy Assistant for Agro Industrial Pollution Control Affairs in Central Jakarta.


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6.2 There are open and transparent methods for communication and consultation between growers and/or millers, local communities and other affected or interested parties.

A Communication Procedure has been compiled by PT. ITH to serve as a basic reference for internal and external communication practices of PT. Indotruba Tengah (No. 394/ITH-KOM-01/11, dated 27-09-2011, Revision 01). The procedure lists down the followings; 1) Scope of Procedure, which is for employees and for local community; 2) Practical Forms of Communication; 3) Communication Media; 4) Practicing Parties; 5) Flow Chart of Consultations/Dialogs practiced with the community. The communication practiced with the local community is recorded in the forms of attendance list and a number of pictures taken during the Dissemination of Introduction to Plantations presented by the management of PT. Indotruba Tengah to the students of SMK Negeri 1 vocational school in Pangkalan Banteng Sub-district of Amin Village on 13 August 2012. The event was attended by 59 students. There is a document available of the Stakeholder Lists of PT. Indotruba Tengah for the year of 2011 and 2012, which list down the following classifications of stakeholders: 1) National Level (Central), 2) Local institutions in the level of Central Kalimantan Province, 3) Local Authorities and Institutions in District level, 4) Local Authorities in Sub-district and Village levels, 5) Community Groups and their leaders. As previously advised during the surveillance I, the aspirations addressed from local community were to be recorded into and documented as Incoming Correspondence; while the feedbacks and responses to the said aspirations were documented as Outgoing Correspondence. The aspirations and their feedbacks are documented and kept in Estate Office as incoming correspondence and outgoing correspondence. As an example, kindly refer to the Cover Letter and Proposal of the Construction of the Village Office Courtyard, submitted by the Head of Amin Jaya Village under the proposal No. Prop/12/DS-AJ/PB/VI/2012 dated 10 June 2012 regarding Paving Procurement Request, which was followed up by the letter from the Manager of SKE No. 174/SKE-GM EST/VI/2012/S dated 17 June 2012, addressed to the Central Kalimantan Estate GM. As stated in the Communication Procedure of PT. Indotruba Tengah (No. 394/ITH-KOM-01/11, dated 27-09-2011, Revision 01), it is the Unit/Estate Manager who will be in charge of the communication and consultation practices in his/her Unit/Estate respectively.


6.3 There is a mutually agreed and documented system for dealing with complaints and grievances, which is implemented and accepted by all parties.

A complaint management system is also set up and included in the Communication Procedure (No. 394/ITH-KOM-01/11, dated 27-09-2011, No. Revision 01). The dissemination of the said procedure has been carried out by the company by distributing the necessary documents to each village on 27 September 2011. The result of incoming correspondence (log in) verification in Sekunyir Estate Office of PT. Indotruba Tengah has confirmed that there were no complaints received from other parties during the period of October 2011 – August 2012. An SOP of Occupied Land Acquisition is available under the document Policy No.: 343/PSD-OKUP/11 issued on 23 February 2012, which covers the followings: general information, person-in-charge, the procedure of occupied land acquisition, and the flow of occupied land acquisition steps. The SOP has a copy number 20.11.02 and has been distributed on 1 July 2012. Moreover, PT. ITH has compiled a calculation inventory of land compensation that was classified under types and ages of the plants cultivated on that land. As for the lands overgrown with shrubs, the compensation will be calculated and classified under the vegetation levels of stake, post, and tree. (Minor CAR 2011.32 is closed)


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6.4 Any negotiations concerning compensation for loss of legal or customary rights are dealt with through a documented system that enables indigenous peoples, local communities and other stakeholders to express their views through their own representative institutions.

An SOP of Occupied Land Acquisition is available under the document Policy No.: 343/PSD-OKUP/11 issued on 23 February 2012, which covers the followings: general information, person-in-charge, the procedure of occupied land acquisition, and the flow of occupied land acquisition steps. The SOP has a copy number 20.11.02 and has been distributed on 1 July 2012. Moreover, PT. ITH has compiled a calculation inventory of land compensation that was classified under types and ages of the plants cultivated on that land. As for the lands overgrown with shrubs, the compensation will be calculated and classified under the vegetation levels of stake, post, and tree (refer to indicator 6.3.3). By the time the Surveillance II was completed, there were no new claims over lands, except for those being settled in 2009.


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.

The Regulation of The Governor of Central Kalimantan Number 34 year 2011 regarding Regional Minimum Wage (UMK) and Regional Sectoral Minimum Wage (UMSK) for the year 2012 for Kotawaringin Timur District was issued on 15 November 2011. Based on this regulation the 2012 UMSK for plantation, forestry, labour, and fishery sectors are as much as IDR 1,456,000. There is available the list of employee wages of PT. ITH that specifies the wages for each division and the details of payroll that comply with the UMSK. For example, a document analysis done on September payroll of PT. ITH showed that the salary paid to one of the workers in traction division, named Ferdiandus Jondho, was as much as IDR 1,476,969 supplemented by natura wage of a 15 kg of rice. In addition, the worker also received an overtime payment (Performance Premium) based on the document of Premium Payment Supporting Data. The interview done with field workers, such as spray workers, has also confirmed that the company has complied with the regulation by giving the appropriate payment to the workers. A document of Collective Labour Agreement (CLA) settled by Anugerah Sumber Makmur and Minamas Gemilang business venture and Workers Union of Staff and Non-staff of PT. Anugerah Sumbermakmur and PT. Minamas Gemilang business ventures for the period of 2010 – 2012 was signed in Jakarta on 25 January 2010 by the representatives of each party respectively. The Workers Union was represented by its leader (Mr. Widodo), while the company was represented by the Managing Director (Mr. Kurniawanto Setiadi), and was authorized by the Director General for Industrial Relation Development and Labour Social Assurance (Jakarta, 3 November 2010). ITH also keeps the Company Regulation authorized by the Labour and Transmigration Agency on 31 March 2011 (Decree No.: KEP.541/HI.01/III/Nakertrans). This Company Regulation is applicable for 2 (two) years, effective on the approval date on 31 March 2011 until 31 March 2013. ITH provides public facilities for the employees, such as: 929 housing licenses for a G2 Type house; 68 units of G1 Type house; 1 unit of central polyclinic; 2 units of division polyclinics; 4 units of mosque buildings; 1 unit of church building; 2 units of Primary School buildings; 1 unit of Secondary School building; 1 unit of soccer field; and 1 unit of volleyball field. There is also a number of water wells specifically made available as drinking water reserve for the employees. The residential wells analysis is conducted every 6 months, such as the one conducted in residential wells in Division 1 SKE, the latest of which was on 20 October 2010. ITH also provides water tanks and water reservoirs for water flowing out from ITH to serve as water supply in case of drought. A Mutual Working Agreement (MWA) between the company and the contractor, e.g. MWA No.014/Mesjid/ITH-SKE/VII/2008 specifies several important points, such as the ones found in Article 12 regarding the requirements for occupational health and


ASSESSMENT REPORT


safety (OHS) for the second party (contractor). The article clearly states that it is compulsory for the workers to equip themselves with their own PPE (Personal Protective Equipment) and to comply with the traffic signs and OHS guidelines. Article 6 of MWA regarding Occupational Hazards/ASTEK (Labour Social Assurance) indicates that all kinds of insurance covering occupational accidents/ASTEK shall be taken responsible by the 2nd party (contractor). The field visit and interview result with Mr. Wiyanto (Building Contractor) have also confirmed that the company has indeed made it compulsory for the contractors to equip themselves with Personal Protective Equipment, that the company has indeed given the appropriate wages (above UMR – Regional Minimum Wage), and that ITH has provided the employees with the proper health benefits.


6.6 The employer respects the right of all personnel to form and join trade unions of their choice and to bargain collectively. Where the right to freedom of association and collective bargaining are restricted under law, the employer facilitates parallel means of independent and free association and bargaining for all such personnel.

ITH has its own policy indicated in the Collective Labour Agreement (CLA), article 8 verse 1, regarding the Employer’s Recognition of the Workers Union, which specifies that Employers recognize that the Workers Union is the official representative for the employees in taking any actions for and on behalf of all employees registered as its members and shall be deemed an equal partner to the employers. Chapter II Article 6 paragraph 2 regarding Employer’s Responsibilities towards Workers Union also states that the officials and/or members of Workers Union are given an opportunity to manage the organization’s activities approved by both parties and/or stipulated in the applicable laws and regulations. There are 2 existing Workers Unions in PT. Indotruba; one is Minamas Group Workers Union, which was established and is accessible for staff level (Managers, Heads of Division, and Assistant Divisions). The other is Plantation Workers Union, which is established by the workers in accordance with the provisions of Articles of Associations (AD/ART) and their requirements. In relation to that, the Workers Unions for office employees is called Sekunyir Work Unit (PUK) Indonesian Workers Union (SPSI), chaired by Mr. Sugihartono. There is also a documented meeting held by ITH with workers union, in the presence of certain issues related to rights and obligations of workers. For example; the documented meeting held on 9 August 2012 in Kartika Mas Hall and was attended by representatives from Indonesian Workers Union (SPSI) of the Estates and the Mills, from the Labour and Transmigration Agency of Kotawaringin Barat District.


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 program. Children are not exposed to hazardous working conditions.

ITH exhibited a point stated in the Collective Working Agreement, article 16 regarding Staff Recruitment, point 1.2.2 on general requirements, indicating 18 (eighteen) years old as a minimum age mandatory when recruiting a candidate. An SOP of Employee Recruitment (No. 394/ITH-SOP-26/11) clause 5.3 points out similar detail, which requires a candidate to be maximum 40 years of age and minimum 18 years of age when being recruited. It is also specifically emphasized that, should a candidate be female, she is not in her pregnancy. An SOP of Employee Recruitment (No. 394/ITH-SOP-26/11) clause 5.3 points out similar detail, which requires a candidate to be maximum 40 years of age and minimum 18 years of age when being recruited. It is also specifically emphasized that, should a candidate be female, she is not in her pregnancy. In this regard, a minimum age requirement policy has been put into practice by announcing a job opening to be harvesters (No.27/REK/ITH/2012) with the following requirements:

- Male. - Of 18 – 38 years old. - Physically and mentally healthy (verified by doctor’s consent). - Hold a Penal Clearance Certificate (issued by the Office of Indonesian National Police Force).


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- Hold a legitimate ID card and a valid Family Card. - Submit two copies of 4x6 passport-sized photographs. - Not currently in any legal proceedings. - Possess a harvesting skill required in oil palm plantations.


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.

An SOP of Guidelines to a Sustainable Plantation Management issued by Minamas Plantation Indonesia (Policy No.: 724/TQEM-SPMS/09) on page 13, dated 27 August 2010, is covering ITH’s policy regarding equal opportunity and equal treatment for every workers. Point 1 states that every employee is entitled to a proper and fair treatment for all issues related to recruitment process, development, job conditions and descriptions, regardless of the race, level of life, ethnicity, gender, skin color, disabilities, sexual orientation, organizational membership, political view, religion and age. A Collective Labour Agreement, Article 16 regarding worker recruitment, is stipulating the followings:

1. The selection for workers recruitment is to be conducted by the employer in accordance with the specifications and the qualifications of the required position.

2. General Requirements: Indonesian Citizen, minimum 18 years of age by the time the recruitment takes place, no relations with any restricted business entities, currently free from any legal proceedings, not under another labour agreement; and is willing to be stationed in any posts.

3. A 3-month probation period is applied, during which a performance appraisal will be conducted on the workers. 4. Article 17 regarding Worker’s Status Promotion: the worker who passes an On-The-Job Training (OJT) probation period

is to be promoted to a permanent status.


6.9 Policy to prevent sexual harassment and all other forms of violence against women and to protect their reproductive rights is developed and applied.

There is also available a Collective Labour Agreement (CLA) for the period of 2010 – 2012, which stipulates the preventions to sexual harassment (Article 28, paragraph 2.6) as well as the statement declaring that every single employee is prohibited from gambling activities, from consuming alcoholic beverages, from committing immoral acts or sexual harassment in working premises, and from accessing pornography contained sites and/or distributing pornographic pictures from said employee. ITH demonstrated its policy on the protection of reproductive rights which is based on the Collective Labour Agreement for the period of 2010 – 2012, Chapter VII article 33 paragraph 1, where stated that female workers are entitled to a 1.5 month full-pay maternal leave before giving birth, and the additional 1.5 months afterwards that shall be based on the consent from the doctor or the mid-wife. A female worker experiencing miscarriage is also entitled to a 1.5 month-leave afterwards with the doctor’s consent. For female workers who are still in their lactation period, the company is giving special time allowance for feeding their babies in the office with their superior’s consent. Company Regulation Article II paragraph 6.b. states that a female worker experiencing health issues during her menstrual period will be given a full-pay 2-day break, in which case the said female worker shall inform her supervisor accordingly and in compliance with the applicable company’s procedures. A mechanism of complaint handling is specifically available in relation to the gender in the complaint handling procedures included in the SOP of Implementation of Gender Policy in Minamas Plantation (394/ITH-KG-04/11) point 6.4. This specific point of SOP elucidates on the flow of reporting when the Complaint Form is submitted to the local Gender Committee, which initiates a member of the committee to do the task; perform an early investigation, secure the scene and the evidence, make the


ASSESSMENT REPORT


documentation and take pictures, complete and analyze the report, classify the event, collect info from witnesses, submit the complaint to head of Gender Committee. There are a number of Gender Committees available, such as SKE’s Gender Committee, which was established on 3 August 2011, chaired by Ms. Irma Sri Wardani. An interview with her as the Head of Gender Committee has revealed that the committee’s duty is to prevent any forms of sexual harassment from happening to any female workers in the company. Minutes of Meeting of Gender Committee on Monday, 5 December 2011 held in Sekunyir Estate and controlled by Ms. Irma Sri Wardani was discussing the following: Women Empowerment in the Workplace and Special Policy in the efforts of protecting female workers. There is also available a documentation (leave-taking request forms having been completed by the Assistant and approved by the manager) of maternity leave and menstrual leave. After an interview was done to the spray workers in Seruyan Estate (all-women membership), it is revealed that all workers have been well covered by the reproductive rights protection program, such as the one on menstrual leave and/or maternal leave. A mechanism of complaint handling is specifically available in relation to the gender in the complaint handling procedures included in the SOP of Implementation of Gender Policy in Minamas Plantation (394/ITH-KG-04/11) point 6.4. This specific point of SOP elucidates on the flow of reporting when the Complaint Form is submitted to the local Gender Committee, which initiates a member of the committee to do the task; perform an early investigation, secure the scene and the evidence, make the documentation and take pictures, complete and analyze the report, classify the event, collect info from witnesses, submit the complaint to head of Gender Committee. The team leader of Gender Committee will then establish an internal investigation team whose result will be submitted to the local management within 5 days after the investigation is completed. The report includes data of incident, chronology, and fact-findings. When the evidence is regarded sufficient, the Unit Manager will then take necessary action towards the offender.


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

While the audit was taking place, there was no list of FFB price available in the Estate. The management declared that it was due to it being insignificant, since there is still no scheme available until today for the smallholders inside the concession area of PT. Indotruba Tengah. Up to now PT. ITH has not made any contract for FFB supply with other party. The current suppliers for FFB are those of different estates (Sekunyir and Seruyan), there are no FFB taken from Tani Plasma group or KKPA. The FFB price is determined by District Plantation Agency based on the result of a meeting held with various parties. The FFB price is determined by District Plantation Agency based on the result of a meeting held with various parties and is not under the authorities of estate/mills. Up until today, PT. ITH has not implemented the smallholders’ scheme; as a result, this indicator is declared Not Applicable.


6.11 Growers and millers contribute to local sustainable development wherever appropriate.

There are available the payment receipts of tax levy/other taxes & the realizations of CD/CSR that serve as the proofs of the contributions made by the company to the development of the local area, for example: a. CPO levy during June 2011 – August 2012 with the amount of IDR 483,839,984 for Kotawaringin Barat District

b. CPO levy during June 2011 – August 2012 with the amount of IDR 120,959,996 for Seruyan District

c. Recapitulation of the CD/CSR Program Implementation of PT. Indotruba Tengah during 2011 – 2012 (May 2011 until August

2012) with the amount of IDR 106,143,000


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Meanwhile, the Land and Building Tax (PBB) of PT. ITH for the year 2011 is not due until 30 September 2012 with the total amount of tax IDR 662,760,990. However, the aforementioned figures has been requested by GM General Accounting and Taxation from GM Treasury by issuing a memo No. 055/MP/TAX-SFF/VII/11 dated 20 July 2011.


PRINCIPLE #7 Responsible Development of New Plantings

7.1 A comprehensive and participatory independent social and environmental assessment is undertaken prior to establishing new plantings or operations, or expanding existing ones, and the results incorporated into planning, management and operations.

Not applicable, no new development at ITH.

Status : Not Applicable

7.2 Soil surveys and topographic information are used for site planning in the establishment of new plantings, and the results are incorporated into plans and operations.



7.3 New plantings since November 2005, have not replaced primary forest or any area required to maintain or enhance one or more High Conservation Values.



7.4 Extensive planting on steep terrain, and/or on marginal and fragile soils, is avoided.



7.5 No new plantings are established on local peoples’ land without their free, prior and informed consent, dealt with through a documented system that enables indigenous peoples, local communities and other stakeholders to express their views through their own representative institutions.



7.6 Local people are compensated for any agreed land acquisitions and relinquishment of rights, subject to their free, prior and informed consent and negotiated agreements.


ASSESSMENT REPORT




7.7 Use of fire in the preparation of new plantings is avoided other than in specific situations, as identified in the ASEAN guidelines or other regional best practice.



PRINCIPLE #8 Commitment to Continuous Improvement in Key Areas of Activity

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

ITH has provided with the monitoring action plan that is based on social and environmental impact assessment. These action plans are stated in every monitoring activity performed by the company. The followings are the action plans performed by the company: - There is available document of Social Impact Assessment Report from the year of 2009. However, no evaluation has been

performed for the data and ITH has not planned any follow-up plans. CD/CSR programs are still mostly conducted in a form of giving incentives to local authorities, and have not fully concentrated on expanding the social economy capacity of the community that was based on the need assessment of the local community. The Report on the Social Impact Assessment from the year of 2009 has described PT. Indotruba Tengah as not having any short-term plan in an active and a well-planned community development. ITH has only been responding passively to the inquiries/request from the community (page 54). The company has conducted an evaluation on the effectiveness of previously planned Community Development approach. ITH distributed questionnaires to local people nearby to see the CD program has gone effective. . (Minor non conformance CAR 2009.19 is closed)

- The efforts made in controlling the waste resulting from Sekunyir POM by creating trap points inside and outside the POM area are intended to serve as filters for residual waste of the mills.

- The use of chemical material (RODOS) to minimize the oil from being spilled over or wasted and become final effluent - The installation of automatic makeup steam to control the use of steam on the processing stage, so that the steam produced

will be more effective. - ITH has conducted an evaluation on the effectiveness on growing beneficial plants. This becomes the commitment of the

company to minimize the use of chemical agro materials.

ITH has kept an internal audit mechanism in relation to the implementation on the principles and the criteria of RSPO. In response to the result of RSPO audit during main assessment activity (Stage-2), the company kept a recorded document of a follow up and the accomplishment progress in the compliance with the RSPO principles and criteria. The document contains the following information; the finding result of main assessment, the action plans towards the findings, the progress on the action plans, Personnel In Charge (PIC), and the settlement target.



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3.2. Summary of Assessment Report of Supply Chain

Clause Requirements of Mass Balance Supply Chain Models

1 Documented Procedures

1.1

The facility shall have written procedures and/or work instructions to ensure the implementation of all the elements specified in these requirements. This shall include at minimum the following: a) Complete and up to date procedures covering the implementation of all the elements in these requirements. b) The name of the person having overall responsibility for and authority over the implementation of these requirements and

compliance with all applicable requirements. This person shall be able to demonstrate awareness of the facilities procedures for the implementation of this standard.

a. PT. ITH (Sekunyir POM) has had a procedure on Product Identification and Product Traceability at Minamas Plantation POM (Policy No. 394/ITH-SP-05/11) dated 27 September 2011. This procedure aims to identify the raw materials and end products to identify the relationship of raw material and product quality in order to be able to trace the end products. In the procedure, it is explained that the Sekunyir POM implements Mass Balance system in its operation. In addition to the above SOP, ITH also has procedures for mill operations from fruit receipt until CPO dispatch.

b. The personnel responsible for ensuring the mill operations run according to procedures that have been defined are as follows:

- Mill Manager responsible for: a. Keeping and maintaining all documents, records or logs of the use of all raw materials, auxiliary materials used in

the production process and the quality of the end product. b. Verifying the status of the products delivered to the buyer by ensuring that the delivery of the product to the buyer

is in accordance with the invoice, Delivered Order, Sales Contract, and signing the Minutes of Product Delivery along with buyers.

c. Providing adequate training on Supply Chain certification requirements to all staffs involved in the supply chain stages from receipt of raw materials, production processes, storage and delivery of POM’s products to buyers.

- Assistant PSQM responsible for:

a. Quality Inspection of FFB (grading) at POM and make daily recapitulation b. Supervising the delivery and loading/unloading Palm Products and witnessing the preparation of Minutes of CPO

and Palm Kernel Delivery.

- Laboratory Supervisor/Assistant responsible for: a. Analyzing and testing the quality of raw materials and products at all stages of the production process at POM. b. Storing, maintaining, and distributing the result of analysis and quality testing of raw materials and products to the

relevant parties concerned.

- Bulking Assistant/Senior Assistant/Manager responsible for: a. Transportation of CPO & Palm Products production from POM to Bulking Station. b. Handling and Storage of CPO & Palm Kernel in Bulking Station area.

Full Compliance

1.2

The facility shall have documented procedures for receiving and processing certified and non-certified FFBs.


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As explained in point 1.1 above that Sekunyir POM has established that the supply chain model used is the Mass Balance. In the Mass Balance Model, the description of production process from receipt of raw materials to FFB processing does not differentiate in details between certified and not certified raw materials. The quantity of certified CPO can only be calculated by percentage mechanism. Thus, in the SOP of mill operations, FFB can be traced from the administration of raw materials receipt through the Fruit Delivery Note form that gives information about the origin and the quantity (amount) of incoming FFB in Sekunyir POM, however ITH processed all certified FFBs from all certified estates.

Observation 1

2 Purchasing and goods in

2.1

The facility shall verify and document the volumes of certified and non-certified FFBs received.

The whole incoming and processed FFB of the POM Sekunyir up to now comes from the smallholders estates of ITH (Sekunyir Estate and Seruyan Estate) and from neighbouring estates that are still under the same group who have gained RSPO certification, so the output of palm oil produced is one hundred per cent of products that can be claimed as RSPO certified oil. Sekunyir POM has documents and computerized programs for FFB receipt, namely:

1. Fruit Delivery Note and weighing ticket explaining weighing ticket number, serial number of Fruit Delivery note, FFB origin, transport, date of harvest, fruit cutting rotation, planting year, block, number of bunches, tonnage, vehicle number, date of delivery.

2. SIME-weight program to determine the receipt information of FFB, CPO, Kernel, and other products 3. Mill Receipt report that describes the product received, date of receipt, estate origin, vehicle number, driver, number of

Fruit Delivery note, weighing ticket number, date sent, incoming and outgoing weighing time, incoming gross weight, outgoing weight, net weight.

4. FFBGS Program (Fresh Fruit Bunch Grading System) that describes the incoming FFB quality to the mill based on the FFB grading result and informs FFB quality, determination of crude palm oil and kernel production of supplying estates)

Sekunyir POM has not been able to show the separation mechanism of receipt documents for RSPO certified and non-certified FFBs; however ITH processed all certified FFBs from all certified estates.

Observation 2

2.2

The facility shall inform the CB immediately if there is a projected overproduction.

Sekunyir POM is able to recognize and claim the certified products during the year of 42,402 tons of CPO and 8,845 tons of Palm Kernel in the period of 25 November 2011 to 24 November 2012. When the Surveillance-2 audit was conducted, total CPO and Kernel produced by Sekunyir POM since 25 November 2011 to August 2012 was 40,269.47 tons of CPO and 8,415.27 tons of Palm Kernel. Up to the Surveillance-2 audit was conducted, CPO and kernel production that could be claimed as certified products of Sekunyir POM did not exceed the projected number. But the management of Sekunyir POM (ITH) has committed to providing information to Mutuagung Lestari if CPO and Palm Kernel production exceeds those projected.

Full Compliance

3 Record keeping

3.1

The facility shall maintain accurate, complete, up-to-date and accessible records and reports covering all aspects of these requirements.


ASSESSMENT REPORT


The whole records and reports have been created and stored completely by the company. The document retention system is in the form of soft copy in System Application Program (SAP), Sime-Weight Programme for weighing FFB, CPO and Palm Kernel, FFBGS (Fresh Fruit Bunch Grading System) for determining the quality of FFB to be processed, while the documents in form of hard copy (print out) are stored in the administration room of Sekunyir POM. Sekunyir POM has Production Daily Report documents that describe records of all aspects such as incoming and processed FFB, CPO Capacity and Quality Results, Kernel Capacity and Quality Results, CPO and Kernel Delivery, Production Stock of CPO and Kernel.

Full Compliance

3.2 Retention times for all records and reports shall be at least five (5) years.

Sekunyir POM of ITH has set a minimum retention time of 5 years and has shown records related to the logs of FFB receipt unti l the oil storage in the storage tank includes daily reports, data of incoming and processed FFB, Mill Utilization, the quality result and the capacity of CPO and Kernel, the quality of oil in the storage tank, the data of CPO and Kernel delivery (Delivery Order) and document of Process Control Report. The documents are set for 5 years.

Full Compliance

3.3 (a) The facility shall record and balance all receipts of RSPO certified FFB and deliveries of RSPO certified CPO, PKO and palm

kernel meal on a three-monthly basis. (b) All volumes of palm oil and palm kernel oil that are delivered are deducted from the material accounting system according to

conversion ratios stated by RSPO. (c) The facility can only deliver Mass Balance sales from a positive stock. However, a facility is allowed to sell short.

Sekunyir POM, ITH has not been able to show the document records and has not balanced RSPO certified FFB for the delivery of CPO and Palm Kernel for every 3 month, however ITH processed all certified FFBs from all certified estates.

Observation 3

3.4 The following trade names should be used and specified in relevant documents, e.g. purchase and sales contracts, e.g. *product name*/MB or Mass Balance. The supply chain model used should be clearly indicated.

Sekunyir POM has shown Sales Contract documents: 1. CPO Products with Sales Contract No. 00314/ITH/KTR-MKS/LOK/VII/2012 dated 27 July 2012 which describes the trading

name which is CPO (Crude Palm Oil) with the quality of maximum Free Fatty Acid (As Palmitic) of 3.5%, maximum Moisture and Impurities of 0.5%, and Quantity

2. Palm Kernel Products with Sales Contract No. 00052/ITH/KTR-IKS/LOK/VIII/2012 dated 10 August 2012 which describes the trading name which is Palm Kernel, product quantity, with the quality of maximum Moisture, Impurities, Sales dirt of 16%.

Based on the document observation, it is identified that the Sales Contract documents do not explain the Mass Balance supply chain model and that the product sold is RSPO certified products; however ITH processed all certified FFBs from all certified estates and sell the product use green palm trade.

Observation 4

3.5 In cases where a mill outsources activities to an independent palm kernel crush, the crush still falls under the responsibili ty of the mill and does not need to be separately certified. The mill has to ensure that the crush is covered through a signed and enforceable agreement.


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Sekunyir POM of ITH only sells Palm Kernel to third parties and does not cooperate with the administrator of Kernel Crushing Plant.

Full Compliance

4 Sales and goods out

4.1

The facility shall ensure that all sales invoices issued for RSPO palm oil delivered include the following information:

(a) The name and address of the buyer

(b) The date on which the invoice was issued

(c) A description of the product

(d) The quantity of the product delivered

(e) Reference to related transport documentation

POM Sekunyir has been able to show palm oil delivery invoice that provides information about the name, invoice’s published date, the description of the products, the amount of product delivered and transportation. For example, invoice number 00369/ITH/VII/2012 with Sales Contract Number 00314/ITH/KTR-MKS/LOK/VII/2012 and the Delivery Order Number 00390/00314/07/12/L-ITH-MKS. a) Buyer’s name and address:

PT. MULTIMAS NABATI ASAHAN with the address of B & G Tower Building 9th floor, Jl. Putri Hijau No. 10 Kesawan, West Medan, Medan - North Sumatra 20111

b) Description of the product: The products traded are Crude Palm Oil (CPO) but there is no description about RSPO certified product types.

c) Number of products: In the invoice document, there is a column of commodities volume being sold, but in the invoice document, which becomes the sample for audit team, the commodity volume column is not filled out (because it is only a sample). The invoice with filled volume column becomes the authority of Minamas Central Management located in Jakarta.

d) The agreed delivery and transportation of crude palm oil is CPO in Bulk, in which the buyers get the products from bulking station specified.

Observation 5

5 Training

5.1

The facility shell specifies and provides the training for all staff as required to implement the requirements of the Supply Chain Certification Systems.

The Organization has carried out training of the understanding of supply chain models for FFB receipt until palm oil dispatch in the form of Mill Supply Chain Training Program for PT. Indotruba Tengah Sekunyir POM. The training was held on 22 July 2011 at the company Hall of PT. Indotruba Tengah that was attended by 17 participants of PT. Indotruba Tengah staffs.

Full Compliance

6 Claims


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6.1 The facility shall only make claims regarding the use of or support of RSPO certified oil palm products that are in compliance with the RSPO Rules for Communications and Claims.

Sekunyir POM has programmed use of claims to support RSPO certified palm oil in accordance with the RSPO Guidelines for Communication and Claims stated in the Sales Contract, Delivery Order and Invoice, however ITH processed all certified FFBs from all certified estates.

Observation 6


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3.3 Conformity Checklist of Certificate and Logo Use

1. Evidence of permission or approval certificate and logo from Certification Body which submitted by Client

ITH has had approval / permit the use of the certificate with the number MUTU-RSPO/001

√

2. Implementation of certificate and logo used by Client comply with size and type (shape) against Guideline of Logo Use

Not Applicable; ITH does not use the logo both in the on-product and off-product. In the scope of PT.INDOTRUBA TENGAH

√

3. Implementation of Certificate and Logo is not used on product


√

4. Controlling of Certificate and Logo, including withdrawing inappropriate logo


√


ASSESSMENT REPORT

SPO – 4006a.4 Page 41

Prepared by Mutuagung Lestari for PT Indotruba Tengah – Sekunyir POM

3.5 Identification of Findings, Corrective Action, Observations, Opportunity for Improvement and Noteworthy Positive Components.

During the second surveillance assessment all the first surveillance findings were closed and 6 (six) opportunities for improvement/observations were identified. Further explanation of the non-conformities raised and corrective actions taken by ITH are provided in this section. ITH prepared a corrective action that was reviewed and accepted by MUTU and corrective actions taken to close all non-conformities shall be verified during next assessment.

3.5.1 Identification of Findings, Corrective Action, Observations at Stage-2 Assessment

No. CAR

Ref Std

Findings Grade Location Corrective Action Time

Limits Observations and Date Status

Closing date

2009.08

4.4 5.2

Practices maintain the quality and availability of surface and ground water. Management of quality and the availability of surface and ground water are not yet adequate applied; e.g.: there are no conservancy of riparian zone (S.Buaya - Sekunyir estate) and wetland (in Compartment E21 - Sekunyir estate), and there is no chemicals contamination control in spraying activities alongside of the river and canal, and the result of water quality measurement are also not yet been evaluated.

CFA Estate ITH shall compile the action plan and evaluate for result of environmental test parameter.

Before Certificate

issued

23-June-2009. ITH has made an action plan for program management of river water, ditch water, and groundwater. Implementation schedule from June 2009 until April 2010 include the management of riparian zones, control of chemical use around drainage, and water quality analysis. However, in terms of riparian management zone has not been explicitly set the width of the buffer that will be delineated, setting limits on the field, and do not include all sources of water (e.g., block E-21 Sekunyir). 08-Jan-2010. ITH has made plans to maintain the quality and availability of surface and ground water such as the identification of HCV, woods planting in riparian areas, installation of information boards

Open (Minor)


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SPO – 4006a.4 Page 42


No. CAR

Ref Std



Closing date

in the area of HCV. ITH also have a map of the area of HCV but several activities have not been recorded properly, for example the recording of the meeting, socialization ban on spraying riparian areas, woods planting record. 29-Sept-2011. ITH has not been could show evidence of that all areas of the river demarcation woods planting has been done, and socialization to the community. 13-Sept-2012 ITH has shown the eveidence that the riparian area has done planted the forest crop, for example Mahoni, Sungkai, Gamal, Waru, Randu, Angsana, Jati, etc. ITH has socialized to community around.

Closed

13-Sept-12


ASSESSMENT REPORT

SPO – 4006a.4 Page 43


No. CAR

Ref Std



Closing date

2009.09

4.6 Management of hazardous agrochemical. The agrochemical containers (waste of hazardous chemical) are not yet managed according to environment regulation (i.e. Government Regulation No. 18 year 1999 and Government Regulation No. 85 year 1999 about waste of hazardous chemical management), e.g.: waste hazardous storage in Block Spraying System warehouse, Sekunyir estate.

Minor Estate ITH shall review the policy of hazardous agrochemical waste in order to more prescribe by the regulations.

Before ASA-01

29-Sept-2011. ITH has made a policy of agrochemicals management and hazardous wastes, however based on the results of field visits in storage of hazardous waste Sekunyir Estate and Estate Seruyan not have permits place temporary storage of hazardous waste. 20-Nov-2011. ITH has shown evidence of letter applying for licenses to Hazardous waste storage in the Estate. 10-Sept-2012 ITH has received hazardous waste storage permits from Head of Kotawaringin Barat (No. 660/541/BLH-III.1/XI/2011 about hazardous waste storage permits for Indotruba Tengah).

Open (CFA)

Closed

10-Sept-12


ASSESSMENT REPORT

SPO – 4006a.4 Page 44


No. CAR

Ref Std



Closing date

2009.19

8.1 Continuous improvement - data evaluation. Some of environmental and social aspect monitoring was conducted. However, there were some cases did not evaluate and made basis for follow-up action. E.g. Effectiveness of beneficial plant development as Sicanus sp breeder media; EFB application for soil condition; effectiveness of truck vehicle debt to increase the farmer's economic in CD approach, etc.

Minor Mill and Estate

ITH shall review and evaluate data result of environmental and social monitoring, and arrange corrective action.

Before ASA-01

29-Sept-2011. ITH has evaluated the effectiveness of planting beneficial plants and empty bunch application in the working area of PT ITH but not yet evaluated the effectiveness of the CD approach with truck loan scheme to increase economic. 13-Sept-2012 ITH has done evaluated for the effectivitly of CD programme. ITH has shared the quisioner to the community for the assess efectivity CD programme.

Open (Minor)

Closed

13-Sept-12


ASSESSMENT REPORT

SPO – 4006a.4 Page 45


3.5.2 Identification of Findings, Corrective Actions and Observations at Surveillance-1 Assessment

No. CAR

Ref Std



Closing date

2011.21

2.2.2 Certainty of area - ITH has conducted identification and maintenance boundaries pole. However, identified the majority of boundaries pole missing. ITH has made the procurement plan boundaries pole are missing in the year 2011/2012.

CFA Estate ITH is advised to immediately realize the procurement plan boundaries poles are identified missing coordinate with related parties (BPN).

ASA-02 12-Sept-2012 ITH has installed of new boundaries pole (HGU) for 16 big poles and 51 small poles in the SKE and 20 small poles in the SRE.

Closed 12-Sept-12

2011.22

2.2.2 Settlement of land claims - There are occupational area covering 802 ha in the HGU (Seruyan Estate) which has not been mastered by ITH. ITH has made efforts to settle the conflict in cooperation with relevant agencies (local governments and BPN).

Minor Estate ITH is recommended to settle occupational area in accordance with applicable regulations.

ASA-02 12-Sept-2012 ITH has communicated to relevant stakeholders (Commitee C) to completion the occupation areas. It was responded by the Committee C to conducting field visits to look at the area of occupational. Based on the field visit result minutes of Commitee C would be conducted the action plan (session) with the stakeholders attended from the capital province.

Closed with

Observation

12-Sept-12

2011.23

4.7.2 Report of P2K3 - ITH has prepared a report on P2K3 and has been reported to the Labor Department of West Kotawaringin routinely every 3 months but has not been in accordance with specified form.

CFA Estate and Mill

ITH is recommended to prepare report P2K3 accordance with specified format.

ASA-02 12-Sept-2012 ITH has had reported the P2K3 report for periodically to the related agency with the right format determined.

Closed 12-Sept-12


ASSESSMENT REPORT

SPO – 4006a.4 Page 46


No. CAR

Ref Std



Closing date

2011.24

4.7.5 Socialization of Risk Analysis - ITH has conducted activity of risk identification HIRAC but found some workers is not understand and know about the risks his job and not use PPE recommended in the document HIRAC.

CFA Estate and Mill

It is recommended to evaluate the effectiveness of socialization HIRARC to workers.

ASA-02 12-Sept-2012 ITH has had socialization the HIRARC document. Moreover, ITH has had evaluated the knowledge of employee for the safety and health work with given the quisioner and recapitulation for the implementation EHS at working places.

Closed 12-Sept-12

2011.25

4.7.6 K3 Training - Based on field visits and workshops Sekunyir Estate Workshop of Sekunyir find any workers who do not already have a license of expertise. For example: Welders.

CFA Estate and Mill

ITH is recommended to provide training to all operators that have not received a license.

ASA-02 13/09/2012 Based on field visit at Sekunyir POM still found the employee has not a welder license as requirement on Permenaker No.2 year 1982 about qualified of welder operator at work places. 14-Sept-2012 ITH has shown evidence that the operator of welder at Sekunyir POM has a license as a welder operator. For example on behalf Desmil Hamdi (No. Sertifikat 038 PK) with the satisfaction result.

Open (Minor)

Closed with

Observation

14-Sept-12


ASSESSMENT REPORT

SPO – 4006a.4 Page 47


No. CAR

Ref Std



Closing date

2011.26

4.7.8 Evidence of compliance with safety equipment - ITH has provided PPE and first aid equipment for the workers but there is no viable PPE use (broken) is still used by the workers. The company has not done checking the box first aid box consistently.

CFA Estate It is recommended to provide a backup to replace PPE that is damaged and evaluated the results of First aid box consistently.

ASA-02 13-Sept-2012 Based on field visit at Sekunyir Estate and interview with spraying worker (Block C 11-12) known that the employees use the PPE orderly. First aid box ia available in the field.

Closed 13-Sept-12

2011.27

5.2.1 Document identification of HCV - ITH has prepared the document identification of HCV in the year 2010 but not yet enough evidence to do public consultation and expert review as required for identification of HCV toolkit June 2008 edition.

Minor Estate ITH should do public consultation and expert review of the HCV identification documents.

ASA-02 13-Sept-2012 ITH has shown evidence that the HCV identification document has reviewed by peer review and public consultation conducted.

Closed 13-Sept-12

2011.28

5.2.2 Management Plan, management and monitoring of HCV - ITH has prepared a document management plan the management and monitoring of HCV, however not all refer to the results of the identification of HCV has been done

CFA Estate ITH was recommended to draw up a document management plan and monitoring the management of HCV that refers to the identification of HCV has been done.

ASA-02 13-Sept-2012 ITH has arranged the monitoring and managing the HCV area plan accordance the HCV identification document.

Closed 13-Sept-12


ASSESSMENT REPORT

SPO – 4006a.4 Page 48


No. CAR

Ref Std



Closing date

2011.29

5.2.4 The posters and warning signs of protected species - ITH has installed a board prohibition hunting species, poison and electric shock the fish, however not enough evidence has been put up posters, warning signs, publication and socialization of protected species to all employees and the community.

CFA Estate ITH was recommended to put up posters, warning signs, publication and socialization of protected species to all employees and surrounding communities.

ASA-02 13-Sept-2012 Based on team auditor observation on site (Block A34 – Seruyan Estate). Based on HCV Identification document the area include the category HCV 1.2 has done installation the poster and sign board is complementing with the foto of endangered species.

Closed 13-Sept-12

2011.30

5.5.3 Realization land fire emergency response programs - ITH has compiled a fire emergency response simulation program to be held in September 2011 and March 2012, however until first Surveillance activity a company has not realize of the program.

CFA Estate ITH is recommended implementing the program in accordance with the fire emergency response plan.

Before ASA-02

12-Sept-2012 ITH has conducted the simulation of emergency response of land fire on August, 9 2012 at Seruyan Estate and on August, 30 at Sekunyir Estate.

Closed 12-Sept-12

2011.31

6.1.2 The social impact Management and monitoring plans - ITH has assessed the social impact in 2009, however until first surveillance, ITH not have the management and monitoring plans as a follow-up of the social impact assessment.

Minor Estate and Mill

ITH should to make management plan and monitoring of social impacts as a follow-up of the social impact assessment.

ASA-02 12-Sept-2012 ITH has arraged plan of monitoring and managing social impact assessment period July 2011-June 2012 and period July 2012 until June 2013.

Closed with

Observation

12-Sept-12

2011.32

6.3.3 Standard calculation of compensation - ITH has land

Minor Kebun ITH should provide a standard to calculate the

Before ASA-02

12-Sept-2012 ITH has arraged Occupational

Closed 12-Sept-12


ASSESSMENT REPORT

SPO – 4006a.4 Page 49


No. CAR

Ref Std



Closing date

conflict resolutions strategies in which there are land claims case handling procedures (flow charts) and matrices grouping land claims and land conflict resolution, but has not provided a standard to calculate the compensation that can be received by the parties.

compensation that can be received by the parties.

Land Acquisition’s SOP number: 343/PSD-OKUP/11 date Februari, 23, 2012 and create a standard inventory of land compensation calculations.


ASSESSMENT REPORT

SPO – 4006a.4 Page 50


3.5.3 Identification of Findings, Corrective Actions and Observations at Surveillance-2 Assessment

No. CAR

Ref Std

Findings Grade Lokasi Corrective Action Time


Closing date

- - During the second surveillance TMP has provide good implementation of RSPO standard and there was no non-conformance raised.


ASSESSMENT REPORT

SPO – 4006a.4 Page 51


3.5.3 Opportunity for Improvement / Observation

No Ref Std

Descriptions

1 SC 1.2 The quantity of certified CPO can only be calculated by percentage mechanism. Thus, in the SOP of mill operations, FFB can be traced from the administration of raw materials receipt through the Fruit Delivery Note form that gives information about the origin and the quantity (amount) of incoming FFB in Sekunyir POM, however ITH processed all certified FFBs from all certified estates.

2 SC 2.1 Sekunyir POM has not been able to show the separation mechanism of receipt documents for RSPO certified and non-certified FFBs; however ITH processed all certified FFBs from all certified estates.

3 SC 3.3 Sekunyir POM, ITH has not been able to show the document records and has not balanced RSPO certified FFB for the delivery of CPO and Palm Kernel for every 3 month, however ITH processed all certified FFBs from all certified estates.

4 SC 3.4 Sales Contract documents do not explain the Mass Balance supply chain model and that the product sold is RSPO certified products; however ITH processed all certified FFBs from all certified estates and sell the product use green palm trade.

5 SC 4.1 Product trade not describes the RSPO certified; however ITH has programmed to describe the trade model at sales contact, invoice and delivery order.

6 SC 6.1 Sekunyir POM has programmed use of claims to support RSPO certified palm oil in accordance with the RSPO Guidelines for Communication and Claims stated in the Sales Contract, Delivery Order and Invoice, however ITH processed all certified FFBs from all certified estates.


ASSESSMENT REPORT

SPO – 4006a.4 Page 52


3.5.4 Noteworthy Positive Components

No Ref Std

Descriptions

1 Minor 4.7.8

ITH has committed to provide job protection to all of their employees by providing Personal Protective Equipment (PPE) were adequate.

2 Major 4.5.1

ITH has done a good IPM implementation in the field.

3 Minor 6.5.1

ITH has provided facilities, adequate infrastructure to employees. ITH also maintains the cleanliness and neatness of the employee housing area

4 Major 8.1.1

ITH makes countinues improvements sustainable. For example: ITH provides specialized home plant protection and RSPO (Seruyan Estate) where in the building every visitor to get information about the development of the RSPO and its implementation in the area of the company and shall contain information on the plant protection (the types of pests and diseases and mitigation).


ASSESSMENT REPORT

SPO – 4006a.4 Page 53


3.6 Summary of Arising Issues from Public, Organization and Auditor Response

Public Issues Organization Response Auditor Response

Labor Agency of Kotawaringin Barat

Fulfillment of PPE should be good enough.

It has been established GUIDING COMMITTEE of OSH and has regularly submitted the report but the reports were not comprehensive.

Trainings of OSH for example FIRST AID EMERGENCY should coordinate with the Labor Agency and submitted with GUIDING COMMITTEE of OSH report

Changes in the structure of GUIDING COMMITTEE of

OSH and has responded with a letter of endorsement.

Submission of SIO for the employees.

Fulfillment of Hyperkes training

The Company has provided PPE for all workers adquately.

Companies regularly have reported GUIDING COMMITTEE of OSH report every three months to the Labor Agency.

The company has reported GUIDING COMMITTEE of OSH meeting report regularly every 3 months but did not contain the OHS activities report comprehensively.

The structure of P2K3 Company has been authorized by the Labor Agency.

ITH has completed the specific operator with Operator license.

ITH nurses coordinator has conduct the Hyperkes training.

ITH is already providing Personal Protective Equipment in accordance with the results of the risk analysis work that has been done.

ITH has regularly done every 3 months P2K3 reporting to the Office of Manpower and Transmigration and in accordance with the reporting format determined (in accordance with the decision of the Department of Labor).

Certificate of attendance Hiperkes and Health Training opportunities for paramedic companies (Manpower District held training on March 10, 2011) Available. on behalf Minaryanti (spraying coordinator).

Based on the known structure of the document has P2Kl3 Safety Expert as an expert on behalf of K3 in Factory Saut Dapot H of K3 Siahaan based License No. RI Department of Labor. 09.3233/AK3-U/DJPPK-P2K/X/2009.

Environment Agency Kotawaringin Barat Regency

PT ITH indicated not to report the RKL / RPL first semester of 2012, but for the previous period (Semester II in 2011) has done the reporting.

PT ITH has not made an annual report survey land for land application in accordance with KepmenLH 29 2003.

ITH has reported the RKL / RPL semester 1 of 2012.

ITH has conducted a survey of land for land application.

Available RKL / RPL semester 2012 and have reporting to relevant agencies on August 22, 2012. Numbers in the letter of transmittal 013/SKF-X/VIII/2011 Report to BLH Kalimantan Province (No. 086/SKF-SP/VIII/2012 letter)

ITH has shown evidence of analysis of soil and water in the area of land suitable KepmenLH 29 applications in 2003.


ASSESSMENT REPORT

SPO – 4006a.4 Page 54


Public Issues Organization Response Auditor Response

Head of Amin Jaya Village

ITH has not been delivered to the manpower needs of the surrounding community.

ITH prefers recruiting people from outside to work.

Rural development activities are still very minimal perceived by the public

ITH has recruited employees from the village of Amin Jaya.

Basically, the company prefers workers from local communities.

ITH is implementing the program in the form of CD lending trucks to the public, donations religious festivities and helps the construction of houses of worship.

The Company had socialized HCV management areas to the public.

ITH has vacancy announcement for the community workers such as: Announcement Jobs for workers Harvest (Announcement Letter No. 27/REK/ITH/2012) submitted to the Village Community Amin Jaya.

Activity CD / CSR PT. ITH is still largely in the form of incentives to local officials, not the form of activities oriented to the improvement of social and economic capacity of the community, such as training or venture capital.

ITH had socialized on the management of HCV areas to the public.

Head of Pangkalan Banteng Village

ITH has not been delivered to the manpower needs of the surrounding community.

ITH prefers recruiting people from outside to work.

Rural development activities are still very minimal perceived by the public

The company has recruited employees from the village of Amin Jaya.

Basically, ITH prefers workers from local communities.

ITH is implementing the program in the form of CD lending trucks to the public, donations religious festivities and helps the construction of houses of worship.

ITH had socialized HCV management areas to the public.

ITH has vacancy announcement for the community workers such as: Announcement Jobs for workers Harvest (Announcement Letter No. 27/REK/ITH/2012) submitted to the Village Community Amin Jaya.

Activity CD / CSR PT. ITH is still largely in the form of incentives to local officials, not the form of activities oriented to the improvement of social and economic capacity of the community, such as training or venture capital.

ITH had socialized on the management of HCV areas to the public.


ASSESSMENT REPORT


4.0 CERTIFIED ORGANISATION'S ACKNOWLEDGEMENT OF INTERNAL RESPONSIBILITY

4.1 Formal sign-off of assessment findings

Hereunder sign by management representative from inspected company to acknowledge a field assessment and agree for all content explained in this assessment report, included of non-compliance findings.

Signed on behalf of:

PT. INDOTRUBA TENGAH

MUTUAGUNG LESTARI

Head of PSQM Minamas Plantations

Lead Auditor

Mohamad Pirabaharan

Taufik Margani

Friday, Sept, 14th 2012

Friday, Sept, 14th 2012


ASSESSMENT REPORT


Annex 1. List of Stakeholder Contacted in the RSPO Certification Process

No Institution/Department Address Phone/Email Form of Contact

Date of Contact

1 Environmental Agency, District of Kotawaringin Barat

Pangkalan Bun, Central Kalimantan

- Interview 11-Sept-2012

2 Manpower Agency, District of Kotawaringin Barat

Pangkalan Bun, Central Kalimantan

- Interview 11-Sept-2012

3 Head of Aminjaya Village Village of Amin Jaya - Interview 11-Sept-2012

4 Head of Pangkalan Banteng Village

Village of Pangkalan Banteng - Interview 11-Sept-2012


ASSESSMENT REPORT


Annex 2. Audit Plan

DATE September, 10-14, 2012

PLANNED TIME

ACTUAL DURATION

PROCESSES / CLAUSES TO BE AUDITED AUDITOR

10.09.2012 07.00-08.30 09.00-12.00

14.00-15.00 15.00-17.00

Travelling Jakarta to Pangkalan Bun Pangkalan Bun to Site PT ITH Opening Meeting Document Review / Observation :

All Team

11.09.2012 08.00-12.00

08.00-12.00

14.00-17.00

Public consultations with governments and NGO Document Review / Observation : Verification of first surveillance assessment / Observation :

All Team

12.09.2012 08.00-12.00

14.00-17.00

Document Review / Observation Field Observations to the f PT Indotruba Tengah POM weighting of fresh fruit bunch (FFB), grading areas, loading ramp, sterilizer, clarifier, pressing areas, boilers, CPO storage, drainages, safety (EPR), liquid waste pond, workshop, and warehouse; Supply Chain Implementation

All Team

13.09.2012 08.00-12.00

14.00-17.00

Field Observations (Estate)

Nursery, Land Preparation, manuring, spraying, harvesting, FFB Transportation, land application.

Interview with local villagers

Clarification of findings

All Team

14.09.2012

08.00-11.00

11.30-15.30

16.00-19.00

Closing Meeting at Estate Office

PT ITH to Pangkalan Bun

Pangkalan Bun to Jakarta

All Team


ASSESSMENT REPORT


Annex 3. Glossary

AMDAL : Analisis Mengenai Dampak Lingkungan (Social and Environmental Impact Assessment)

APD / PPE : Alat Pelindungan Diri (Personal Protection Equipment)

ASEAN : Association of South East Asian Nations

B3 : Bahan Beracun dan Berbahaya (Hazardous Material Waste)

BOD : Biological Oxygen Demand

CPO : Crude Palm Oil

CBD : Convention on Biodiversity

HCV : High Conservation Value (Nilai Konservasi Tinggi)

HGU : Hak Guna Usaha. (Land Use Permit)

IUP : Izin Usaha Perkebunan. (Plantation Operation Licence)

ITH : Indotruba Tengah

IPAL : Instalasi Penyaluran Air Limbah (Installation of Waste Distribution)

JAMSOSTEK : Jaminan Sosial Tenaga Kerja (Social Assurance of Labor)

Jankos / EFB : Janjangan Kosong / Empty Fruit Bunch

K3 / OHS : Keselamatan dan Kesehatan Kerja. (Occupational Health and safety)

KER : Kernel Extarction Rate

LC : Land Clearing

OER : Oil Extarction Rate

PHT / IPM : Pengendalian Hama Terpadu (Integrated Pest Management)

PK : Palm Kernel

PKS / POM : Pabrik Kelapa Sawit / Palm Oil Mill

PSD : Plantation Services Departement

PSQM : Plantation Sustainability and Quality Management

RKL/RPL : Rencana Kelola Lingkungan/ Rencana Pemantauan Lingkungan. (Environmental Management Plan/ Environment Monitoring Plan)

SOP : Standart Operating System

ASA-01 : Surveillance 1



TBS / FFB : Tandan Buah Segar (Fresh Fruit Bunches)

UKL/UPL : Upaya Kelola Lingkungan/ Upaya Pemantauan Lingkungan. (Environmental Management Efforts/ Environmental Monitoring Efforts)