· Pamukan utara, District of Kotabaru 2° 26' 21" LS 116°6' 51" BT 1.4.2 Location of Estate(s)...

PT. MUTUAGUNG

LESTARI

SURVEILLANCE REPORT

Roundtable on Sustainable Palm Oil Certification

[]S-1 [ ] S-2 [ ] S-3 [ ] S-4 [ ] Re-Assessment

Plantation Management/Owner : MINAMAS Plantation - Sime Darby Group

Plantation Name : PT. Laguna Mandiri – Rantau POM

Location : Pamukan Subdistrict, Kotabaru District, South Kalimantan Province, Indonesia

Certificate Code : MUTU-RSPO/009

Date of certificate issue : 30 December 2011

Date of expiry of certificate : 30 December 2016

Assessment Assessment

Date

Report Finalization

Date

PT. Mutuagung Lestari Auditor

Checked by

Approved by

ST2 30 May 2011 – 04 June 2011

18 July 2011

Nanang Mualib (Lead Auditor), Muardi Marwas (Auditor),

I Wayan Sudi Antara (Auditor)

Taufik Margani

Tony Arifiarachman

S1 20 – 24

October 2012 30 January 2013

Taufik Margani (Lead Auditor) Nanang Mualib (Auditor), Muardi Marwas (Auditor),

Yudwi Wisnu Rahmanto (Auditor)

Octo HPN 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 on:

Approved by RSPO on:

Approved by Certification Body on:

15 February 2013

-

26 December 2012

PT. MUTUAGUNG

LESTARI

SURVEILLANCE REPORT

SPO – 4006a.4 i Prepared by Mutuagung Lestari for Rantau POM (PT Laguna Mandiri) – Sime Darby

TABLE OF CONTENT

FIGURE

Figure 1. Location Map Figure 2. Operational Map

1 2

1.0 SCOPE of the SURVEILLANCE ASSESSMENT

1.1 National Interpretation Used 3

1.2 Organization Information 3

1.3 Type of Assessment 3

1.4 Location of Plantations, Mill and Area Statement 3

1.5 Description of Supply Base 4

1.6 Dates of Plantings and Cycles 5

1.7 Tonnage Certified 5

1.8 Other Certifications 6

1.9 Time-Bound Plan for Other Management Units 6

2.0 ASSESSMENT PROCESS

2.1 Certification Body 8

2.2 Assessment Team 8

2.3 Assessment Methodology, Assessment Process and Locations of Assessment 8

2.4 Stakeholder Consultation and List of Stakeholders Contacted 9

2.5 Date of Next Surveillance Visit 10

3.0 ASSESSMENT FINDINGS

3.1 3.2

Summary of Assessment Report of the RSPO Certification Summary of Assessment Report of Supply Chain Requirement

11 25

3.3 Conformity Checklist of Certificate and Logo Use 29

3.4 Summary of Time Bound Plan Verification of the RSPO Certification 30

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

31

3.6 Summary of Arising Issues from Public, Management and Auditor Responses 43

4.0 CERTIFIED ORGANIZATION’S ACKNOWLEDGEMENT OF INTERNAL RESPONSIBILITY

4.1 Formal Signing of Assessment Findings 44

APPENDICES

1. List of Stakeholders Contacted in the RSPO Certification Process 45

2. Assessment Plan 46

3. Glossary 47

PT MUTUAGUNG LESTARI

ASSESSMENT REPORT

SPO – 4006a.4 Page 1 Prepared by Mutuagung Lestari for Rantau POM (PT Laguna Mandiri) - Sime Darby

Figure 1. Location Map of PT Laguna Mandiri

PT MUTUAGUNG LESTARI

ASSESSMENT REPORT

SPO – 4006a.4 Page 2 Prepared by Mutuagung Lestari for Rantau POM (PT Laguna Mandiri) - Sime Darby

Figure 2. Operational Map of PT Laguna Mandiri

PT. MUTUAGUNG LESTARI

ASSESSMENT REPORT

SPO – 4006a.4 Page 3 Prepared by Mutuagung Lestari for Rantau POM (PT Laguna Mandiri) – Sime Darby

1.0 SCOPE OF THE CERTIFICATION ASSESSMENT

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

of Indonesia - RSPO INA-NIWG, May 2008 and RSPO Supply Chain Certification Standard November 2011.

1.2 Organization Information

1.2.1 Company name PT. Laguna Mandiri

1.2.2 Contact person Mohamad Pirabaharan

1.2.3 Company address The Plaza Office Tower, 36th Floor, Jl. M. H. 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 Web page address www.simedarby.com

1.2.8 Company status Private

1.2.9 Management Representative who completed the application for certification Mohamad Pirabaharan (Head of PSQM)

1.2.10 Registered as RSPO member 08 September 2004

1.3 Type of Assessment

1.3.1 Scope of Assessment Palm oil Mill and Estate

1.3.2 Type of certificate Single

1.3.3 Company names listed in the certificate PT.Laguna Mandiri – Rantau POM

1.3.4 Number of management unit

1 (one) mill (Rantau POM) which received FFB supply from 4 (four) estates: Rantau Estate, Sekayu Estate, Betung Estate and Matalok Estate.

1.4 Locations of Mill, Plantations and Area Statement

1.4.1 Location of Mill

Name of Mill Location

GPS

Latitude Longitude

Rantau Factory Village of Rantau Buda, Subdisrict of Pamukan utara, District of Kotabaru

2° 26' 21" LS 116°6' 51" BT

1.4.2 Location of Estate(s)

Name of Estate(s) Location

GPS

Latitude Longitude

Sekayu Estate

Village of Sekayu, Subdistrict of Pamukan utara, District of Kotabaru

2°23’19” -2°18’23” 116°06’31” - 116°11’55”

Betung Estate Village of Betung, Subdistrict of Pamukan utara, District of Kotabaru.

2°24’16” -2°18’25” 116°10’51” - 116°14’10”

Rantau Estate

Village of Rantau Buda, Subdistrict of Pamukan utara, District of Kotabaru.

2°28’49” - 2°23’51” 116°03’26” -116°07’43”

mailto:[email protected]

http://www.simedarby.com/


ASSESSMENT REPORT


Matalok Estate Village of Bepara, Subdistrict of Pamukan Utara, District of Kotabaru.

2°28’26” - 2°24’33” 116°06’03” - 116°10’25”

1.4.3 Country/Region Indonesia, South East Asia

1.4.4 Tenure

Private

State 15,300 Ha*

Community

1.4.7 Area Statement

Total area 15.300 Ha

Mature area 12.827 Ha

Immature area - Ha

Mill 52 Ha

Infrastructure 861 Ha

- Land Clearing - Ha

- Occupation 1.366 Ha

- HCV 194 Ha

- Other area - Ha

1.5 Description of Supply Base

1.5.1 Description of Mill

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 (%)

Rantau Factory 60 258,815.52 59,368.15 22.94 12,499.05 4.83 - -

*Production data from October 2011 to September 2012

1.5.2 Description of Estate(s)

Name of Estate(s) Total Area

(Ha)

Planted Area (Ha)

FFB (tonnes/year)

Yield (tonnes/ha/year)

Supplied to Mill

FFB (tonnes/year)

%

Sekayu Estate 4,266 3,243 61,920.61 19.09 44,323.269 72

Betung Estate 3,314 2,706 42,405.77 15.67 34,599.816 82

Rantau Estate 4,638 4,232 104,604.41 24.72 66,953416 64

Matalok Estate 3,082 2,636 61,874.31 23.47 39,878.623 65

TOTAL 15,300 12,817 270,805.10 21.13 151,155.308 56


1.5.3 Smallholder(s) and others


ASSESSMENT REPORT


Smallholder(s)

Scheme Member(s) Location

Total Area (Ha)

FFB (tonnes/year)

Supplied to Mill

FFB (tonnes/year)

%

Selabak Estate PT.Swadaya Andika-

Minamas, Sime Darby

Subdistrict of Pamukan utara, District of

Kotabaru 33,042.680

Randi Estate PT.Swadaya Andika-

Minamas, Sime Darby


Kotabaru 24,851.38

Sangkoh Estate PT.Swadaya Andika-

Minamas, Sime Darby


Kotabaru 2,780.76

Lanting Estate PT.Laguna Mandiri-

Minamas, Sime Darby


Kotabaru 3,173.06

KKPA Sungai Cengal

Subdistrict of Pamukan

utara, District of Kotabaru

1,471.24

AKM Riwang (Individual) Subdistrict of Pamukan


304

Pucuk Jaya (Individual) Subdistrict of Pamukan


838

PT. Alam Raya Kencana

Subdistrict of Pamukan


3,415.529


1.5.4 Product categories FFB/CPO/PK/PKO

1.6 Dates of Plantings and Cycles

1.6.1 Age profile of planted palms*

Planting Year

Estate xxx Estate xxx

Age

1992 78.94 21

1993 1,110.38 20

1994 961.89 19

1995 1,200.49 18

1996 3,471.24 17

1997 2,512.25 16

1998 3,007.75 15

1999 237.00 14

2007 133.20 6

2008 108.00 5


ASSESSMENT REPORT


2009 54.20 4

TOTAL 12,875.34 14

1.6.2 New Planting area after November 2005

Ha

1.6.3 Planting Cycle 1st Cycle 25 Years

1.7 Approximate Tonnage Certified

1.7.1 Past Annual Claim Certified Product

- FFB Production 189,566.56 Tonnes/year

- CPO Production 42,171.76 Tonnes/year

- Palm Kernel (PK) Production 8,330.44 Tonnes/year

- Palm Kernel Oil (PKO) Production - Tonnes/year

1.7.2 Claim Certified Tonage of FFB

Name of Estate(s) Total Area

(Ha) Planted Area

(Ha) FFB

(tonnes/year) Yield

(tonnes/ha/year)

Sekayu Estate 4,266 3,238 64,876 20

Betung Estate 3,314 2,706 43,288 16

Rantau Estate 4,638 4,232 105,799 25

Matalok Estate 3,082 2,651 63,261 24

TOTAL 15,300 12,827 277,224 21.63

1.7.3 Claim Certified Tonage of Palm Product

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 (%)

Rantau Factory 60 277,224 63,761 23 13,861 5 - -

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

Management Unit

Address Hectarage

(Ha) *) Time Bound

Plan Complete

Audit

PT. Indotruba Tengah Seruyan and Kotawaringin Barat District 7,734.60 2009 Certified


ASSESSMENT REPORT


– Central Kalimantan Province

PT. Tunggal Mitra Plantations Rokan Hilir District – Riau 13,836 2009

Certified

PT. Aneka Inti Persada Pekanbaru and Siak District– Riau 11,134 2010

Certified

PT. Bahari Gembira Ria Muaro Jambi District – Jambi 1,202.04 2010 Certified

PT. Bina Sains Cemerlang Musi Rawas District- South Sumatera 6,513 2010 Certified

PT. Bhumireksa Nusa Sejati Indra Giri Hilir District– Riau 25,662 2010 Certified

PT. Kridatama Lancar Seruyan and Kotawaringin Timur District – Central Kalimantan Province

14,779.92 2010

Certified

PT. Lahan Tani Sakti Rokan Hilir District– Riau 3,759.02 2010

Certified

PT. Ladangrumpun Suburabadi

Tanah Bumbu District – South Kalimantan Province

6,077 2010 Certified

PT. Sajang Heulang Tanah Bumbu District – South Kalimantan Province

7,794 2010

Certified

PT. Bersama Sejahtera Sakti Kotabaru District – South Kalimantan Province

13,925 2010 Certified

PT. Teguh Sempurna Seruyan and Kotawaringin Timur – Central Kalimantan Province

16,601.66 2010

Certified

PT. Budidaya AgroLestari Ketapang District – West Kalimantan Province

1,002 2011 Audited

PT. Guthrie Pecconina Indonesia

Musi Banyuasin District – South Sumatera Province

10,139.91 2011

Certified

PT. Langgeng Muaramakmur Kotabaru District – South Kalimantan Province

16,361.77 2011

Certified

PT. Mitra Austral Sejahtera Sanggau District – West Kalimantan Province

8,741.29 2011 Audited

PT. Padang Palma Permai Aceh Tamiang and Aceh Timur - Nangroe Aceh Darussalam

6,451.99 2011

Audited

PT. Paripurna Swakarsa Kotabaru District – South Kalimantan Province

14,892 2011

Certified

PT. Perusahaan Sri Kuala Aceh Tamiang District - Nangroe Aceh Darussalam

1,128.90 2011

Certified

PT. Sandika Natapalma Ketapang District – West Kalimantan Province

8,406.21 2011

Audited

PT. Swadaya Andika Kotabaru District – South Kalimantan Province

10,361.18 2011

Certified

PT. Tamaco Graha krida Morowali District – Central Sulawesi Province

4,145.00 2011

Certified


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]

2.2 Lead Assessor and Assessment Team

2.2.1 Assessment Team

ST2

1. Nanang Mualib (Lead Auditor) 2. Muardi Marwas (Auditor) 3. I Wayan Sudi Antara (Auditor)

S1 1. Taufik Margani (Lead auditor). Bachelor of Forestry majoring in Forest Management. Specialists in Environmental sector. He has led several audits for Sustainable Forest Management in Indonesia (under the scheme of LEI-Lembaga Ekolabel Indonesia and FSC-Forest Stewardship Council) and Lead Auditor for FSC Track of Custody. Other experiences: He is a registered IRCA Lead auditor for Environmental Management System and Quality Management System. Since 1999, he has worked for an independent certification agency and has conducted a number of Audits of Environmental Management System, Quality Management System, and RSPO in Malaysia and Indonesia. Currently he works General Manager of Management System Certification. In Stage-1 activity, he conducted the assessment on legal and environmental aspects.

2. Yudwi Wisnu Rahmanto (Auditor). Bachelor of Forestry with Silviculture background. He has attended in selected training, such as Auditor/Lead Auditor Course Quality Management System (QMS) ISO 9001:2008, Timber Legality Assurance System (SVLK), Verification Organization Training C.A.F.E Practices (Starbucks), Organic Standard (EU, NOP, JAS), Forest Stewardship Council (FSC), Program Endorsement of Forest Certification (PEFC) and Organic Exchange for Textile. He also has experience as an auditor and involved in certification program auditing, such as Sustainable Forest Management by FSC FM/COC Scheme, Coffee And Farmer Equity (C.A.F.E Practices) Starbucks, Sustainable Palm Oil by RSPO Scheme, Organic Standard (EU, NOP, JAS) for Coffee Farmer and Organic Exchange for Textile. Currently, he worked at Professional Certification Body and assigned to verify in Social aspect, conservation and environment aspect during this Surveillance assessment (S1).

3. Nanang Mualib (Auditor) 4. Muardi Marwas (Auditor)

2.3 Assessment Methodology, Assessment Process and Locations of Assessment

2.3.1 Assessment Dates

S1 20-23 October 2012

2.3.2 Estimate of person days to implement assessment

S1 Number of auditors : 4 persons Number of days for assessment at site : 4 days Number of working person-days for assessment at site : 16 person days

2.3.3 Detail process of assessment

S1 The assessment was conducted by measuring the sufficiency of implementation with the consistency done by the Laguna Mandiri (LMI) 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

http://www.mutucertification.com/


ASSESSMENT REPORT


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 check, aiming to observe directly the sufficiency of implementation on site. The detailed assessment process pleased see Appendix 2 Improvement of findings from Stage-2 findings were observes by auditors at this surveillance-1 assessment. All information obtained was recorded in Check List of PT Mutuagung Lestari (MUTU) and part of Surveillance report.

2.3.4 Locations of Assessment

S1 Location is determined based on study document and the issues from stage 2 with aim to verify field implementation.

Auditor visited estate and Palm Oil Mill PT LMI. Location visited during the surveillance are:

Location 1. Visited Terombong Sari Village to see the realization of CSR, socialization communication procedures,

and checks the boundry.

Location 2.Visited Rantau Jaya Village to see the realization of CSR, socialization communication procedures, and

checks the boundry.

Location 3. Blok D 16 and B 10 Rantau Estate (RTE). HCV management, Sign Board maintenance and tree planting.

Location 4. Blok D 16 Matalok Estate (MLE). Management of HCV 5 such as making boundry at water source and

tree planting (Mahoni).

Location 5. Blok J 26 Betung Estate (BTE). Management of HCV 1.3 and HCV 2.3 such as secondary forest, Pinang

river buffer zone.

Location 6. Employee housing Division I Matalok Estate (MLE). Observation the facilities and infrastructure at

Employee housing and facilities.

Location 7. Rantau Palm Oil Mill. Observation mill operational start from weight bridge, grading FFB at loading ramp,

and processing mechanism.

Location 8. Rantau Palm Oil Mill. Observation health and safety management system at processing station such as:

Sterilizer, Thresher, Digester, Nut Cracker, Engine Room, Boiler.

Location 9. Hazardous waste storage at Rantau POM. Observation hazardous waste handling, Verification waste

balance, observation oil trap presence, etc.

Location 10. Wastewater Treatment Plant (IPAL). Monitoring the pond condition at Wastewater Management

Installation and make sure no leaks in the pipeline for land application.

Location 11. Warehouse B3 waste at Matalok Estate dan Rantau Estate. Field visit to know the number of ex

pesticide packaging and the other hazardous waste.

Location 12. Office and heavy vehicle workshop at Rantau Estate. Field visit related to healthy and safety compliance

equipment such as: Fire extinguisher, First aid Kit, PPE.

Location 13. Blok A24 & A25 Matalok Estate. Field visit to land application.

Location 14. Blok C 35 Matalok Estate dan Blok B 11 Rantau Estate. Observations the water source not polluted by

chemical spraying.

Location 15. Harvesting Blok at Matalok Estate dan Rantau Estate. Observations and interviews with workers related

with the use of PPE, harvesting techniques, understanding of procedures and workers welfare.

2.4 Stakeholder Consultation and List of Stakeholders Contacted

2.4.1 Summary of stakeholder consultation process Consultation of stakeholders for LMI was done in interviewing with internal stakeholders and local stakeholders conducted by visits to Terombong Sari village, Rantau Jaya village interviews with local peoples. Numbers of input


ASSESSMENT REPORT


from stakeholders were clarified by LMI. Generally villagers have good opinion to company especially for community social responsibility program and communication.

2.4.2 List of stakeholder contacted

Please find appendix 3

2.5 Determining Next Visiting

The next visit (Surveillance 2) will be determined one year (October 2013) after surveillance-1.


ASSESSMENT REPORT


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

MUTUAGUNG LESTARI has conducted a Surveillance-1 assessment of PT Laguna Mandiri – Rantau POM Operation consisting of 1 (one) mill and 4 (four) oil palm estates. MUTUAGUNG LESTARI found that PT Laguna Mandiri – Rantau POM comply with the requirements of RSPO Principles & Criteria and National Interpretation, RSPO Principles and Criteria (P&C) for Sustainable Palm Oil Production, Republic of Indonesia - RSPO INA-NIWG, May 2008. Therefore MUTUAGUNG LESTARI recommends a certificate of compliance is 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.

LMI has a procedure Request for Information. Recorded evidence and feedback on requests for information from stakeholders is

stored in the book Records of Communication with Stakeholders. For example: there are requests for information from the

National Statistic Biro, Kotabaru District (No: 05330.005, dated January 5, 2012) on captive power data and has been respond on

19 June 2012 by filled the checklist form.

LMI also has an SOP Control Records SOP Number 051/LMI-PC/2010, related to the determination of documents retention time

of records based on their interests.

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.

LMI showed the types of documents can be accessed by the public, including:

a. Legal documents. Land Use Right (HGU), Plantation Business Permit (SIUP/IUP), Licensing, Building permit.

b. Environment documents. HCVA, waste and applications, EIA, RKL / RPL, Land application permit.

c. Social documents. Social Impact Assessment, Community development program

d. Safety and health documents.

e. Others documents. Tax document, Employee Data, FFB Data Production, Crude Palm Oil-Palm Oil Kernel Production Data,

specifications of Factory machines, Vehicle Specifications, Guidelines for Sustainable Plantation Management.

Full compliance

PRINCIPLE #2 COMPLIANCE WITH APPLICABLE LAWS AND REGULATIONS

2.1

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

LMI has demonstrated an effort to make adjustments to changes of rules for example Minimum wage of workers, each year has

made changes accordance to South Kalimantan Governor Regulation.

LMI has a mechanism to evaluate the regulations and legislations presented in the form of a matrix 'Evaluation of Regulatory

Compliance', contains information on legal requirements to be fulfilled, the article must be fulfilled, an indicator of compliance,

compliance status, and details that show material compliance.

Documented system by LMI which provides information and legal requirement that must be fulfilled by companies contained in


ASSESSMENT REPORT


SOP guidelines for Sustainable Plantation Management Number724/TQEM-SPMS/09 in Chapter 1.2 explained compliance with

the Act and Regulation and Legal Requirements, also has legal opinion procedure number 322/LGL-OPN/07 dated 24 Mei 2007

which describes the identification mechanism of compliance in related regulations. Minor non conformance CAR.2011.06 is

closed.

Full compliance

2.2

The right to use the land can be demonstrated, and is not legitimately contested by local communities with

demonstrable rights

Acquisition of legal rights on land management by the company as evidenced by HGU Certificate:

1. Land Use Right (HGU) Certificate Number 13 year 1997 dated 22 November 1997 based on The Minister of Agrarian Letter/

Head of BPN Number 138/HGU/1997 dated 31 October 1997 with an area of 149,500,000 m2, which is valid until 22

November 2032.

2. Land Use Right (HGU) certificate Number 46 year 2004 with 59,10 ha which is valid until 20 April 2039.

3. Land Use Right (HGU) certificate Number 47 year 2004 dated 2 April 2004 with 115.40 ha area which is valid until 20 April

2039.

4. Land Use Right (HGU) certificate Number 48 year 2004 dated 2 April 2004 with 21.50 ha area, which is valid until 20 April

2039.

5. Land Use Right (HGU) certificate Number 49 year 2004 dated 2 April 2004 with 4 ha area which is valid until 20 April 2039.

6. Land Use Right (HGU) certificate Number 50 year 2004 dated 2 April 2004 with12.26 ha area which is valid until 20 April

2039.


2039.


2039.


2039.


2039.

LMI has shown a document the boundary in every estate, in the form of maps and photographs of the pole installation. Based on

field visits boundary poles can be found easily and clearly demarcated. Non conformance CAR.2011.29 is closed

Resolution process document is available such as; Land Compensation Record Document (Occupied Land Phase IV Acquisition

Report which includes on licensing in the PT Laguna Mandiri’s Oil Palm Plantation) with 34 ha of area in Mangka Village,

Pamukan Utara sub district, Kotabaru district year 1998 equipped with PT Laguna Mandiri Compensation Consultation Meeting

with tenant acknowledged by Mangka Chief of Village and Pamukan Utara Chief of sub district, Right Discharge on Land,

Statement Letter and Compensatory payment Deliverance Verification (receipt) .

Conflict resolution SOP is available Number 059/LMI-PK/10 dated 16 December 2010 where compensation is based on land

inventory, implemented throughout consultation with involved parties (claimant, Muspika, Village Officials PSD and Estate). The

measurement is conducted by research and resulting compensatory payment nominal agreement as well as Payment Plan.

Full compliance


ASSESSMENT REPORT


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.

Negotiation process record between rights and traditional rights owner with the company equipped with the map of claimed area

such as; Land Compensation Record (Occupied Land Phase IV Acquisition Record which includes in licensing at PT Laguna

Mandiri Oil Palm Plantation Area) with 34 ha of area in Mangka Village, Pamukan Utara sub district, Kotabaru district year 1998

equipped with PT Laguna Mandiri’s Compensation Consultation Meeting Result with tenant acknowledged by Chief of Mangka

village and Head of Pamukan Utara sub district, Rights Discharge on Land, Statement letter and compensatory payment

verification (receipt).

Evidence of land conflict resolution was available at the location and can be identified on a company's work map. Visits to the

area of Block E-21 to E-26 and D-21 to D-24 at Rantau Estate, the area declared by the company as community occupations

areas coverage 120 Ha, until now there was no conflict between company and occupants. LMI has made good relationship with

the occupants for example provide clean water when the dry season. Delineation of the area which is a corporate initiative to

remove the area from corporate management. area has been mapped to the company`s Working Map Area, as the occupational

area.

Resolution evidences available at LMI in the form of a receipt of compensation payment, land Release Letter, not dispute

statement letter, and photos of compensation submission.

Full compliance

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.

LMI has a document the company's work plan for the short term the Year 2012-2013 Work Plan and contained in the 2012-2016

Budget allocation for the Rantau Estate, Sekayu Estate, Betung Estate, Matalok Estate and Rantau Mill the distribution of the

work plan include:

a. Forecast production of 2012-2016, the production yield (ton / ha), administration cost, labor cost, mature upkeep, manuring,

harvesting and collection, transport, etc..

b. Forecast mill intake (FFB), palm oil extraction, kernel extraction, processing cost, admin cost, training cost, cost

Environment, Health cost, transport cost, etc..

c. Corporate environmental management plan has allocated for water supply activities of employee, the cost of OHS, RSPO,

HCV, EIA, etc.

d. Social activity the company has plans to allocate religious holidays, the wages of teaching staff, the cost for CSR programs

and social contribution to society, etc.

Based on 2012 – 2013 budget presentation and projection document, there is no replanting activity. Replanting plan at LMI area

in 2017/2018 period at Rantau estate with 255 ha of area.

Full compliance

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

4.1

Operating procedures are appropriately documented and consistently implemented and monitored.


ASSESSMENT REPORT


LMI, Minamas Plantation has SOP related to estate management from land clearing to harvest contained in AGRONOMY

REFERENCE MANUAL SOP (AGRICULTURAL REFERENCE MANUAL) Number Policy: 110/EST-ARM/08, dated 22 December

2008: planting materials, nursery techniques, replanting, land preparation, planting density, maturity age, field upkeep,

manuring, canopy management, management of coastal water in the soil/plant oil palm on peat, ablation , ripeness standard,

harvesting interval, tracebility, plant protection. AIP also has the procedure contained in the Mechanical Palm Oil Plant Manual

SOP from receipt of FFB, processing until the CPO and PKO dispatch to the operations of Palm Oil Mill.

There are monitoring of operational activities undertaken by LMI such as Plantation Adviser activities and Mill Adviser set up for

2 (two) times a year and the activities of Internal Audit 2 (two) times a year.

LMI periodically informed of all operations in both the estate and mill in each month and results of operations are set forth in this

Estate Unit Report document made by the Estate Manager and Monthly Report made by Mill Manager.

Rantau Mill Monthly report describes the monitoring results of operational activities of each month as of receipt of FFB,

production data (CPO production and extraction, Kernel production and extraction), quality and loss of production, production

costs, the number employees and housing, inventory (stock item), the expense recapitulation.

Estate reports describes the area statement, organizational structure, employee data, housing and buildings, rainfall data, FFB

production, treatment plants, fertilizer, new crops (replanting), breeding, improvement of road , stock of goods and operating

expenses recapitulation.

Full compliance

4.2

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

yield.

LMI has conducted soil analysis in form of semi detailed soil analysis report on 8-15 October 2012 and leaf sampling analysis

was conducted every year by Minamas Research Center Department, the test result are used for fertilization recommendation in

year 2013 to maintain and improve soil fertility. Minor non conformance CAR.2011.26 is closed.

The activity to maintain and improve land fertility was conducted by LMI through organic application (empty fruit bunch

application and land application) and nonorganic fertilization. Based on research centre department recommendation program

the fertilization was complete applied by company during one year period (july 2011 to june 2012).

Full compliance

4.3

Practices minimize and control erosion and degradation of soils.

There was no marginal soil class identified in LMI, based on semi detail soil survey; however LMI has implemented the

management for planting on areas with certain slope through silt pit, U-shape frond stacking, terrace and individual terrace. LMI

has installed the erosion control pole at Matalok Estate, based on the monitoring data (January – july 2012) known the erosion

level volume was low 0.0013 M3/month. Observation CAR.2011.10 and CAR.2011.26 are closed

Road maintenance program was implemented by LMI in order to control the soil degradation, for example the road side drains

system in every collection, transport and main roads.

There was no peat land in LMI operational area, however for low organic soil was implemented by fertilization through research

centre recommendation.

Full compliance

4.4

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

Based on field observations of management and monitoring at HCV areas (including riparian), some activities that have already


ASSESSMENT REPORT


been conducted, are:

1. Installation of River Riparian Signboards and restriction of interfering the riparian areas in the form of prohibition warning of

using toxic materials, poisoning fishes at Pangau river riparian, Block C17 (C008); riverbed, Block D33 (D015); D37, D38

(D017); Reservoir, Block D35 (D016); MR: BC18, BC22. FG26, EF26, DE26; Block J28, F35.

2. Installation of river riparian borders, in the form of Oil Palm painted with yellow circle (yellow pallet).

3. Cultivation on empty areas with type of forest plants.

4. Monitoring of wildlife and plants every month.

5. Socialization of HCV management: to fertilization workers, spray workers, residents and officials of Sekayu village; Bakau

District; Sungai Durian District; Bepara village; Rantau Jaya village Km 13.

Water management activities in the form of Waste Water Treatment Plant (WWTP) at POM; water quality monitoring. Record of

the implementation of water quality measurement which conducted monthly by the Laboratory of Commodity and Environmental

Measurement, Centre of Research and Industrial Standardization; Banjar Baru South Kalimantan, known the water quality still

accordance with regulation. Minor non conformance CAR.2011.30 is closed.

Monitoring of use water by mill were periodically conducted every day and well recorded as evaluation for water use efficiency

program by mill manager.

Full compliance

4.5

Pests, diseases, weeds and invasive introduced species are effectively managed using appropriate Integrated Pest

Management (IPM) techniques.

Integrated Pest Management plans and program were monitored and updates by LMI in all estates for example Monitoring plan

(Early Warning System) of rat, caterpillar, bagworms and termites every month that includes the census activity, the extent of

pests, and control methods that conduct in case of attack. Owls and beneficial plant monitoring is programmed every month.

Monitoring records of caterpillars in the document Recapitulation of caterpillars Census, for example in the Matalok Estate.

Based censuses in August 2012 there was no attacks (0.16 caterpillars per frond), the census results are sent to the Plant

Protection Department MRC.

LMI does not apply pesticides in controlling rats and termites, however management unit improve the beneficial plant for

controlling the pest population.

Full compliance

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.

Agrochemical used by LMI were not as WHO type 1A or 1B, however the chemicals were registered by agricultural agency, for

example: Glyphosate, Fluroxypyr, triclopyr butoxyethyl ester, Methyl metsulfuron and Fluroxypyr.

LMI ha has applied the revised addition of hazardous storage dated October 22, 2012 to Kotabaru District Environmental Body

and the recommendations stated LMI can store the hazardous waste in the estate storage for fifteen days and then shipped to a

licensed hazardous storage in Rantau factory. Based on the results of field visits known the ex pesticide packaging that produce

from the estates has been sent to the licensed hazardous waste storage in Rantau factory. Minor non conformance

CAR.2011.11 is closed.


ASSESSMENT REPORT


LMI has health check program to factory and estates workers accordance with internal policy was conducted on 5 June 2012 for

Rantau Estate, 1 March 2012 for Matalok Estate. All health check records were stored properly. Company doctor regularly

monitored and check to ensure there was no pregnant woman worker and breastfeeding not working in high risk work. Minor

non conformance CAR.2011.32 is closed

Full compliance

4.7

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

Occupational Health and Safety Policy is listed in the SOP document of Occupational Health and Safety (OHS) No. Policy: 711/TQEMS-P2K3/07 that Minamas Plantation is committed to become a responsible company in implementing the Occupational Health and Safety (OHS) program in all operational activities at estate and mill.

LMI already has an organization of P2K3 (Advisory committee of Occupational Health and Safety) of estates and mill, and has

been approved by the Labor and Transmigration Social Service of Kotabaru District. South Kalimantan. The composition of this

committee consists of Protector (Advisor), Chairman, Vice Chairman, Secretary, Vice Secretary and members.

Report of Advisory committee of Occupational Health and Safety at Rantau mill on 7 July 2012, which discussed the evaluation of

findings (issues) and their progress of completion. That report focuses on safety condition of each station (loading ramp, stew,

dings, nut and kernel, press, clarification, boiler and laboratory).

LMI provides Employee Social Security (Jamsostek) and life insurance to all employees as the insurance for accidents at work.

Based on document observation of Matalok Estate and Rantau Estate on October 2012 all workers were registered and provided

with social security and life insurance.

LMI has health check program to factory and estates workers accordance with internal policy was conducted on 5 June 2012 for

Rantau Estate, 1 March 2012 for Matalok Estate. All health check records were stored properly. Company doctor regularly

monitored and check to ensure there was no pregnant woman worker and breastfeeding not working in high risk work

Document of work risks analysis towards each of work type station, HIRAC (Hazard Identification Risk Assessment and Control)

of estates and mill lists the types of work, hazards, and job risk, risk control and advice of Advisory committee of Occupational

Health and Safety and person in charge is available.

Records of the training of occupational health and safety program are available, for example boiler operator training, fire fighting

simulation, occupational health and safety socialization, etc. Records of training were properly stored at LMI office.

LMI has the SOP of emergency (010/LMI-KD/2010) which describe action steps when there is an emergency situation. Estates

and mill has determined an assembling point if there is earthquake/fire. Simulation of fire fighting was conducted on July 2012 at

Rantau factory.

Checklists or monitoring of Fire extinguisher standardization in each estate (betung, matalok, Rantau, sekayu) and mill (Rantau

Factory). Those fire extinguishers are distributed to all locations that are easily accessible if needed. Locations of APAR (Fire

extinguisher) placement include guess house, workshop, central warehouse, generator house, house of employee, polyclinics

and elementary school. The company has checked the eligibility and condition of APAR (Fire extinguisher). Based on visit to

Matalok estate, monitoring has been implemented well.

LMI also provides Personal Protection Equipments for activities in estate and mill, such as helmets, Apron clothes, gloves,

goggles and masks for spray workers at Matalok estate. First Aid kit also provided by company to workers.


ASSESSMENT REPORT


Workers of estate and mill have been involved in First Aid training. The company is able to show the evidence that First Aid

meeting on 4 may 2011 at Matalok estate, which was attended by mandors, harvester, spraying workers, and general staff has

been implemented.

Records of work accident regularly monitored every 3 month. Based on work accident report at Rantau estate there were 9 cases

in period of July – September 2012 lead to 48 days lost time accident (LTA) and at Matalok estate work accident report there

were main accident of exposed spines when harvesting. From the accident records LMI has evaluate how to minimize the

accident happens repeated by safety awareness training for harvesters.

Full compliance

4.8

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

LMI has performed evaluation of training programs according to staff and employee needs during the surveillance assessment

several trainings have been conducted, such as basic HCV management training for managers (10-12 October 2011),

Environment, Safety and Health training (21-27 May 2012), OSH officer (8-17 October 2012), etc. All records of training were

properly stored and recorded.

The company does not have plasma scheme.

LMI has shown a procedure that related to the mechanism of local contractor recruitment. Their performance will be evaluated at

any time in order to improve their work competency. Each contractor is required to use Personal Protection Equipments while

working in company’s work area.

Full compliance

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.

There is EIA document (EIA, RKL & RPL) approved by the Assessment Commission and Technical team of EIA/UKL-UPL of

Kotabaru District No. 660/22/BLHD-AMDAL, on 20 August 2010. The Faculty of Forestry, Lambung Mangkurat University, and

South Kalimantan compiled this document.

Record of environmental management has been implemented periodically. Latest report was in first semester 2012 (January –

June 2012).

There is EIA document (EIA, RKL & RPL) approved by the Assessment Commission and Technical team of EIA/UKL-UPL of

Kotabaru District No. 660/22/BLHD-AMDAL, on 20 August 2010. The Faculty of Forestry, Lambung Mangkurat University, and

South Kalimantan compiled this document. Regarding the plan for the activities of Oil Palm processing mill development at the

plantation area of PT. Laguna Mandiri, area of 20 Ha, capacity of 60 ton FFB/hour.

Full compliance

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.


ASSESSMENT REPORT


Record of the results of identification to protected species as outlined in the document of HCV assessment of PT. Laguna Mandiri for Rantau estate, Matalok estate, Sekayu estate and Betung estate is available. From result of HCV identification, which conducted by Sustainable Oil Palm Foundation Indonesia (YASBI), December 2009, there were areas of forest that identified as HCV location. HCV identification has evaluated by peer review accordance with HCV identification toolkit Indonesia, June 2008. Major non conformance CAR.2012.38 is closed

The company already has the SOP of Conservation Forest Management No. 007/RSPO-LMI/2010 and according with field

observation the steps have taken by LMI for manage and protect the HCV area at Rantau Estate and Matalok Estate:

- Rehabilitation HCV area by planting forest trees (Mahony and sungkai). Records of planting available at Rantau estate office

- Buffer zone area marked with yellow on the palm, are not allowed for the application of chemical fertilizers, maintenance is

done manually is not allowed in chemical application.

- Inventory of flora and fauna existence on company operational ara

- Socialization to community regarding management and treatment of HCV area and protected flora and fauna.

- Installation of Sign boards for protecting the flora and fauna species.

LMI has replaced the signboards and posters of HCV 1.3 and 2.3 (secondary forest) to the HCV area belong on block J-28

Betung Estate. Observation CAR.2011.18 is close.

Person who responsible or special officer for manage the HCV area in LMI has been appointed (Suroso) and trained. The

evidence of appointed letter and training (certificate from Indonesian Palm Oil Commission, on 6 July 2010) is available.

Observation CAR.2011.32 is closed

Full compliance

5.3

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

Waste Identification and management adequately generated by estates and mill operation (type of waste, the source of waste,

the amount of waste manifest). Environmental document (AMDAL) identifies the management and monitoring of waste

consistently managed according to operational procedures.

LMI has propose for revision of licensed hazardous waste storage at estate on 22 October 2012 to Kotabaru District

Environmental Body; and the recommendation from the Environmental Body was the hazardous waste can be stored at estate

storage for 15 (fifteen) days subsequently shipped to licensed hazardous waste storage at Rantau Factory. Based on field

observation to Rantau Estate waste storage known the ex pesticide packaging produce from estate activity have sent to licensed

hazardous waste storage at Rantau factory. Minor non conformance CAR.2011.11 is closed.

Waste management plan were implemented by TMP, for example: a. Land Application at Matalok Estate for 345.80 Ha on block A24 & A25, Blok B20 – B25, Blok C22 – C26, records of

application was well maintained. b. Empty Fruit Bunch application c. Domestic wastes from housing were send to landfill and manage in regularly d. Fibre and shell from mill were used as boilers fuel. Hazardous wastes were well monitored and properly manage at Rantau POM licensed hazardous storage, for example there was used oil manifest to licensed hazardous collector (PT Maju) on May 2012 and 7 July 2012.

Full compliance

5.4

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

Available data on the analysis of the renewable energy efficiency (fiber and shell) undertaken on a daily basis and the amount of


ASSESSMENT REPORT


renewable energy used per ton of CPO and the efficiency analysis describing the diesel fuel cost savings per month, material costs and total cost savings / month. Available records of fossil fuel use at LMI and the efficiency analysis in the mill manager monthly monitoring report. The use of diesel fuel can be minimized by optimizing the use of all fibers and shells produced by Rantau factory as boiler fuel.

Full compliance

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.

LMI has a zero burning policy (land clearing without burning) written on the land clearing procedure. The policy is supported with

the Standard Operating Procedur Manual Policy No 2xx/PTK-LPG/2004 Index Number II/04, on 1 December 2004, and HPO

(Head Plantation Operations) Memorandum No. POD-UM-150/VII/2010 regarding Monsoon Season Anticipation and Preparation

Against Fire Hazard and Draught 2010.

LMI has identified the water sources in company operational area near the potentially fire, it was for anticipation in case there is

land fire in that area. Field observation presented no evidence of fire usage in the company area.

LMI has the means and infrastructure for fire fighting, which the fire fighting organization structure for every estate and the coordinator is Simeon Bangun and members. Based on field observations at Rantau estate and Matalok Estate, it was known that fire land infrastructures and facilities are available and well-functioned (water machine, hose, nozzle, firefighter uniform, mask, helmet).

Full compliance

5.6

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

LMI has implemented and monitored the waste identification, environmental impact of waste, action plans taken and monitoring to reduce pollution and emissions, for example: a. Empty fruit bunch application for fertilizing at estates. b. Regularly cleaning the boiler ash at fire grade, dust collector and chimney from mill activities. c. Air pollution and noise test are regularly checks by accredited institution and regularly report to environment body. LMI

continues preventive action to protect workers with PPE in the form of Ear Plugs and ear muff at the mill station to avoid exposed with high level noise

d. Mill effluent management which informs debit of wastewater produced from WWTP and debit of mill effluent treated 13 ponds (Deoling pond, Cooling Pond, anaerobic pond, mixing pond, aeration pond) and mill effluent produce was applied to land application.

BOD monitoring for mill effluent which applied to land application still accordance with the regulation (BOD5 level under 5,000 mg/l). Mill effluent at Rantau Factory was regularly monitored every day (location, block, time, volume, hectarage). Effluent volume was counted by flow meter tools to monitored average of effluent applied to land.

Full compliance

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.


ASSESSMENT REPORT


Available environmental and social impact documents/AMDAL (1995), RKL / RPL and Social Impact Assessment (2010)

conducted by doncultant (YASBI) that includes information important social impact caused by the operation of oil palm estate and

Rantau Factory which involves the participation of local community through Focus Group Discussion (FGD).

Company commitment by implemented management and monitoring of social impact year 2011, for example involvement on

community development plan consultation Sungai Durian sub district 15 February 2011and meetings with Mangka village

representative on 4 April 2011. LMI also implemented social activity by periodically and opened opportunity to local children and

other related stakeholders in form of scholarship program to junior high school (SMP) and high school (SMA) students. Minor

non conformance CAR.2011.20 is closed

Revision of Social Environment Impact Assessment (AMDAL) in case of addition of new Betung Palm Oil Mill capacity 45

tonnes/hour which still in development progress, this not significantly change the social aspect in order the mill still in LMI

operational area, however there will be a positive impact for workers absorption opportunity.

Social impact management and monitoring has been reported periodically to the district environment body and evidence of the

local community’s involvement and participation on directly affected by LMI operations. Based on the interviews with the villagers

around LMI plantation involvement between the LMI and the community has been held in the management and monitoring of

social impacts.

LMI do not have smallholders scheme.

Full compliance

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.

LMI has Communicated and Consultation with the community. Records of Communication with Stakeholders, Records of

Communication with Rantau Jaya villagers, Rantau Budha villagers, Terombong Sari villagers and Bepara villagers has been

maintained. Observation CAR.2011.33 is closed.

Every estates has their stakeholders list for example at Rantau estate (25 stakeholders), Matalok estate (22 stakeholders)

including governmental agency, community, villagers, NGO, contractors, plantation companies, labour union, etc.

LMI providing to record request and response related to communities social aspect. Evidence of community aspiration and

response are well record at community aspiration book. LMI have personal to responsible for communication and consultation

with communities at plantation service department.

Full compliance

6.3

There is a mutually agreed and documented system for dealing with complaints and grievances, which is implemented

and accepted by all parties.

The company has procedure of handling mechanism for complaints towards management (009/LMI-MPKTP/2010) on 16

December 2010 page 4 on the stakeholder complaints handling flowchart. The mechanism implementation for example has been

done by involve the village head, customary head of Sekayu village and Betung village on 24 June 2011 at Sekayu estate office

regarding community complaint of smallholders scheme development (plasma).

Minor non conformance CAR.2011.34 is closed.

Full compliance

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.


ASSESSMENT REPORT


There is a procedure available regarding the compensation specified in the Procedures for Handling Conflict (059/LMI-PK/10) dated 16 December 2010 which states in Point 6 that (Conference) involving Estate Manager, PSD, Landowners, Village Authorities and or Muspika as well as Research Division for measurement. The result is the Agreement on Compensatory Rate and Payment Plan that comes with the payment receipt and Minutes of

Conference..

All records of compensation has been well recorded and documented in the following forms; Minutes of Conference, Statement

of Waiver of Land, Statement of Acceptance of conference result and Location Map of compensable area according to

measurements.

Full compliance

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.

LMI has respect the regulation related to plantation operational including the welfare aspect for example application of minimum

wage regulation accordance to South Kalimantan Governor decree on year 2012. Based on observation to worker payments slip

at Rantau Estate and Matalok Estate the workers received exceed from the minimum wage.

There ais company regulation applied at LMI, which are the Company’s Regulations set by company involve the labour

representative for consideration, advice and inputs regarding workers rights and obligations.

LMI provides facilities for workers housing, school, clean water; health facilities/clinics, school transport and clean water. During the surveillance observations known the facilities provided by LMI in properly condition and have build new housing. LMI shows the document Letter of Agreement with contractor explain the provisions of labor (employment) and safety policies in Indonesia, Social Security (JAMSOSTEK) to the workers of the contractor to be responsibilities of second parties (contractors), contractor must have the certificate of any operator licensing, classification and qualification according to existing regulations and contractor responsible for providing the tools and facilities to maintain the safety of contractor workers; however on article 10.4 of the contractor agreement stated the contractor has to followed related the labour laws and regulations. Observation CAR.2011.23 is closed.

Full compliance

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.

In the document of Guidelines for Sustainable Plantation Management (No. POLICY: 724/TQEM-SPM/09) issued by the

Management of Minamas Plantation on 8 November 2010, at point 5 a Social Policy mentioned that The company is expected to

respect the rights of all employees to form and join trade unions of their choice and to bargain collectively.

Labour unions of PT LMI formed on 22 April 2012, located in the Employee Hall at Housing of POM Rantau . the Agenda at the

meeting was the formation of labor union for the POM employees that was attended by 49 people, records of meeting available

at Rantau mill office.

Full compliance

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.


ASSESSMENT REPORT



Management of Minamas Plantation on 8 November 2010, stated that company did not take labor (children) under age 18 years

(<18 years).

LMI have input system in the hiring, if there are employees who are aged <18 years, the system will automatically lock . Results

of verification the documents of employee data and field observations in the Rantau Estate and Matalok Estate, the age of

youngest employee is 19 years old (born in 1993). During the surveillance there were no children works at LMI.

Full compliance

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.


Management of Minamas Plantation on 8 November 2010, at point 1 at Social Policy mentioned that all staff / employees should

be treated in a fair and equitable in the matters relating to hiring, advancement, conditions and overview working, regardless of

race, ethnicity, gender, skin color, imperfection (disability), sexual orientation, membership of organizations, political views,

religion and age.

Based on Employee Data (Matalok Estate and Rantau Estate) by September 2012, found that employees working in LMI come

from different backgrounds such as ethnic (Java, Timor, Dayak, Lombok, Manado, etc.), religion (Islam, Christianity), Origin

(Local, Non-Local - If hiring from outside the area). Based on interview with workers during the surveillance visit LMI does not

Full compliance

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.


Management of Minamas Plantation on 8 November 2010, at point 4 at Social Policy mentioned that "developing and

implementing the policies which protect women workers from crime and sexual harassment and protect the rights associated with

female reproduction.

There is an evidence of implementation to protect reproductive rights such as maternity leave rights, menstruation leave,

prohibition spraying for women worker whose pregnant and lactating. Socialization and education of women's health have been

made to the employees. Counseling about the condition of the female which conducted in January and February 2012.

Doctors recommended employees known to be pregnant and breastfeeding not to work in the spray and fertilizer. Based on

interviews with spraying team of matalok estate, they have understood the policy about protection reproductive rights.

CAR.2011.35 observation is closed

Full compliance

6.10

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

FFB pricing mechanism based on the Decree of Head Plantation Agency South Kalimantan which is the result of deliberations

between representatives of the Plasma Farmers, Oil palm plantation company and the Government of South Kalimantan

Province (Plantation Agency) which conducted every month.

LMI does not have cooperation with smallholders, however Rantau palm oil mills receive the fruits of KKPA Sungai Cengal in a

small volume.

Full compliance


ASSESSMENT REPORT


6.11

Growers and millers contribute to local sustainable development wherever appropriate.

Plan and Realization of CSR Program that conducted by the company, for example;

a. Matalok Estate; Until the month of September 2012 has been realized of CSR programs include Education, Health,

Economic, Social, Cultural and Sports.

b. Rantau Estate; Until the month of September 2012 has been realized of CSR programs include Education, Economic,

Welfare and Governance

Full compliance

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.

The documents of Environmental Management Plan (RKL) and Environmental Monitoring Plan (RPL) are available covering the

analysis of positive and negative aspects on the social and environmental, as well as the participation from those affected (local

people).

PT LMI does not have plasma scheme

Full compliance

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.

Available of soil survey result document for Rantau and Matalok estate include appropriate with topografy, climate, soil variety,

soil fertility.

Based on internal decree No. 039/RST-Bjb/06/2011 Date June, 13th 2011 concerning marginal land map RTE and MLE and Semi

Detail Soil survey document and Land appropiate class evaluation for Palm MLE and RTE declare soil survey result (Tinjau and

Detil) had been done by MRC Banjarbaru, there no marginal land in work area PT LMI. Therefore, not available Marginal Land

Map in PT LMI estate. Minor non conformance CAR.2011.26 is closed

Full compliance

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.

Factory expansion in 2010 (PKS Betung), based on dcument of enviromental impact analysis (Amdal 660/22/BLHD.AMDAL date

August 20th 2010, declare that based on Regency Spatial Plan Map (RTRWK) of new city 2002 and Province Spatial Plan Map

(RTRWP) of South Kalimantan, PT LMI area in Regiopn of Food Yearly Plant Cultivation (KBTTP).

New planting after November 2007 in Matalok estate (108 Ha/2008) in block D019 (108 Ha) in outside area that identified as

HCV area. Based on document of Replanting Programe, there no plant extension and new replanting begin in 2017/2018

Full compliance

7.4

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

Based on result of detil land survey in Rantau and Matalok estate, no identified marginal land class.

Full compliance


ASSESSMENT REPORT


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.

Company have Environmental Impact Analysis Document (ANDAL) agree with decree No. 008/ANDAL/BA/II/95 date February

27th 1995 with width study area 77.290 Ha consisting of 4 company (Langgeng Muara Makmur, Laguna Mandiri, Paripurna

Swakarsa dan Swadaya Andika). The study coverage is 21.400 Ha, each factory capacity in AMDAL are 60 ton TBS/hours.

RKL/RPL document approved by Agribusiness Unit, Agriculture Departement date November 7h 1994.

Full compliance

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.

There no new plantingsafter plantings in 2007 until first surveillance conducted.

Full compliance

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.

Company unused buring methode when land opening. Company have SOP of fire control (037/LMI-PK/10), evacuation

mechanism when fire happen in SOP 726/ TQEM-ESH : Step recovered emergency situation in 725/TQEM-ESH/10

Full compliance

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.

Revision of EIA was done because there was an increase of 1 unit Palm Oil Mill that is Betung POM, according to EIA (EIA,

Management Plan & Monitoring Plan) No. 660/22/BLHD-AMDAL, dated Agustus 20th, 2010.

Document Social Impact Assessment PT LMI that executed by Yayasan Kelapa Sawit Berkelanjutan Indonesia (YASBI) in 2010 is

a form of Social Impact Assessment. The document preparation has been involved community with Focus Group Discussion

(FGD).

There is Action Plan of the RSPO Assessment Audit Findings Stage-2 at PT LMI which is a document of the evaluation results,

compliance progress and current status of the evaluations result that conducted on 30 September 2011.

Full compliance


ASSESSMENT REPORT


3.2. Summary of Assessment Report of Supply Chain

Clause CPO Mills Mass Balance Model Requirements

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. There is procedure of Supply Chain RSPO/65/SCPP/LMI on 1 March 2012, aiming to identify the raw materials and end

products in order to know the relationship of raw materials and the product quality to traceability the product. The

procedure is applicable from the receipt of raw materials (FFB), the production process and product delivery process to

buyers in Rantau factory (PT LMI). The form of supply chain applied to this procedure is the mass balance.

b. The personnel responsible for implementation of this requirement are:

- Mill Manager who is responsible for storing and maintaining all documents used in the production process and the quality of the end products, verifying the status of the products delivered to the buyer and provide adequate training in supply chain certification requirements to all staffs. - PSQM Assistant who is responsible for the quality inspection of FFB (grading) in the POM and making a daily recapitulation of FFB quality inspection, monitoring shipment and loading / unloading Palm Product, and witnessing the making of Minutes of CPO & Palm Kernel shipping. - Foreman / Laboratory Assistant who is responsible for analyzing and testing the quality of raw materials and products at all stages of the POM production process, storing, maintaining and distributing the results of analysis and quality testing of raw materials and products. - Logistic Department who is responsible for transportation of CPO & Palm kernel from POM to bulking station, handling and storage of CPO and Palm Kernel in bulking station area.

RSPO Certified has been done at Rantau Estate weight card (Ticket No. 118075) and RSPO non certified at KKPA Sungai Cengal weight card (Ticket No. 120201) Declaration-2 (1st July 2012) stated that PT LMI has had procedure and work instruction to make sure implementation of Supply Chain System with Mass Balance Model.

Non conformance CAR.2012.39 is closed

1.2

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

The company doesn’t include all elements of SCCS at procedure of Supply Chain and Products traceability (RSPO/65/SCPP/LMI, document code of P&C RSPO Procedure VIII.CA.1, 1st March 2012).

RSPO Certified has been done at Rantau Estate weight card (Ticket No. 118075) and RSPO non certified at KKPA Sungai Cengal weight card (Ticket No. 120201) Declaration-2 (1st July 2012) stated that PT LMI has had procedure and work instruction to make sure implementation of Supply Chain System with Mass Balance Model.



ASSESSMENT REPORT


2 Purchasing and goods in

2.1

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

Company received material as FFB certifed or uncertified, but in each the shipping document (DO, Weight card, etc) not differentiated between certified and uncertified FFB. RSPO Certified has been done at Rantau Estate weight card (Ticket No. 118075) and RSPO non certified at KKPA Sungai Cengal weight card (Ticket No. 120201)


2.2

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

Rantau POM recognizes and claims the certified products for a year as much as 189,556 tons of CPO and 42,172 tons of Palm Kernel in the period of 30 December 2011 to 29 December 2012. When the first Surveillance Audit was conducted certified CPO and Palm Kernel has not overproduction from POM may claim. PT. LMI is committed to providing information to Mutuagung Lestari regarding production of CPO and Palm Kernel which exceeded 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.

The entire records and reports have been created and stored by the company. Document storage system in the form of soft copy in the System Application Program (SAP) program, Sime-Weight Program for weighing FFB, CPO and Palm Kernel, FFB receipt reports at the mill to determine the quality of FFB to be processed, while the documents in the form of hard copy (print out) are stored in the administration room of Rantau POM.

Full compliance

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

In accordance with SOP of Supply Chain RSPO/65/SCPP/LMI of Rantau POM the retention time of documents related to supply chain is 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.

(a) Monthly records available all receipts of RSPO certified FFB and deliveries of RSPO certified CPO, PKO and palm kernel.

(b) All delivered volumes of palm oil and palm kernel have been deducted from the material accounting system according to conversion ratios stated by RSPO.

(c) The organization only delivers mass balance sales from a positive stock. The company has been performed accounting the certified and uncertified material in the production daily report (CPO/KPO proccesing).


ASSESSMENT REPORT



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.

Outgoing documents specifies product name as mass balance, however Rantau factory, LMI has not send CPO/kernel with RSPO certifed until November 2012.


3.5 In cases where a mill outsources activities to an independent palm kernel crush, the crush still falls under the responsibility 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.

Rantau Factory, LMI only made a Palm Kernel sale.

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

The facility dispatches the product to IOI Edible Oils Sdn Bhd , Sandakan for their sales. POM documentation will state that the product is dispatched.

Documents available :

a. Name and buyer address b. Report of CPO shipping dates c. Product description was CPO, CPO quality. d. Quantity of product in kilogram amount e. Transport documentation, sounding report describe product specification, investigation report, shipment report..

However Rantau factory, LMI has not send CPO/kernel with RSPO certifed until November 2012.


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.

There are recorded evidences that LMI – Rantau factory has conducted training for staffs which is required to implement the requirements of Supply Chain Certification System. The recording evidences are in the form of: List of Participants Attending Supply Chain Certification Training of Rantau factory (Number of Participants: 23 persons). Photos of the activity and training Materials available.


ASSESSMENT REPORT



6 Claims

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.

Declaration-2 (1st July 2012) stated that PT LMI has had procedure and work instruction to make sure implementation of Supply Chain System with Mass Balance Model.

In Declaration-7 has been stated that “all claim of CPO and PK Certified, has complied with RSPO Guidelines for Communication and Claims.



ASSESSMENT REPORT


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

X or√

S-1

LMI has had approval / permit to use the certificate with the number MUTU-RSPO/009.

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

X or√

S-1

Not Applicable;

The Company does not use the logo on-product and off-product in the scope of PT Laguna Mandiri.

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

X or√

S-1

Not Applicable;

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

X or√

S-1

Not Applicable;


ASSESSMENT REPORT


3.4. Summary of Time Bound Plan Verification of the RSPO Certification

Total companies visited (0.8 √Y) Where Y is the total of one holding company The company name : Mustika POM and PT Sajang Heulang full manage scheme smallholders (KKPA)

2.1

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

X or√

Pustika POM and PT Sajang Heulang full manage scheme smallholders are compliance with applicable laws and regulations.

√

2.2

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

X or√

PT Sajang Heulang scheme smallholders has demonstrated land use and not legitimately contested by local communities.

√

6.3

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

X or√

PT Sajang Heulang scheme smallholders has documented system for dealing with complaints and grievances, which is implemented and accepted by all parties

√

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.

X or√

PT Sajang Heulang scheme smallholders has SOP of Land Compensation Standard and Identification No. 001/PSDS-L&AS, describe Land identification, settlement patterns, Consultative Process Claims, Payment and Reporting Procedures.

√

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.

X or√

PT Sajang Heulang scheme smallholders have not replaced primary forest or any area required to maintain or enhance one or more High Conservation Values

√

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.

X or√

No land compensation process due the entire smallholders’ scheme plantation land is the property of their respective member smallholders (land tenure is a Certificate of Ownership). PT Sajang Heulang operating the operational activity (full manage scheme smallholders)

√

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.

X or√

No land compensation process due the entire smallholders’ scheme plantation land is the property of their respective member smallholders (land tenure is a Certificate of Ownership). PT Sajang Heulang operating the operational activity (full manage scheme smallholders)

√


ASSESSMENT REPORT

SPO – 4006a.4 Page 31

Prepared by Mutuagung Lestari for Rantau POM (PT Laguna Mandiri) – Sime Darby

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

During the Stage-2 initial assessment 8 (eight) nonconformities were assigned against Minor Compliance Indicators and 6 (six) opportunities for improvement were identified. Further explanation of the non-conformities raised and corrective actions taken by the company are provided in this section. The company prepared a corrective action that was reviewed and accepted by MUTU and corrective actions taken to close all non-conformities have been verified during the surveillance-1 assessment.

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

CAR No

Ref Std Finding Area Grade Time

Limits Corrective Action Observation Status

Closing Date

2011.06

Minor 2.1.2

The company has not evaluated applicable regulations.

LMI Minor S-1 The company must evaluate compliance with applicable regulations.

The company has conducted a thorough adjustment to the regulatory changes as many as 97 regulations but they are still in the evaluation process of the distribution, the evaluation process of the material in the regulations has not been done. 22 October 2012. Documented system by LMI which provides information and legal requirement that must be fulfilled by companies contained in SOP guidelines for Sustainable Plantation Management Number724/TQEM-SPMS/09 in Chapter 1.2 explained compliance with the Act and Regulation and Legal Requirements

Closed 22 October 2012

2011.10

Minor 4.3.1

The organization has provided

maps of marginal land of Sekayu

and Betung estate but the maps

for Matalok and Rantau Estate

RTE Observation

S-1 The organization needs to provide maps of marginal land in the working area of Rantau and Matalok estate.

LMI has implemented the management for planting on areas with certain slope through silt pit, U-shape frond stacking, terrace and

Closed 20 October

2012


ASSESSMENT REPORT

SPO – 4006a.4 Page 32


CAR No



Closing Date

have not been available.

individual terrace. LMI has installed the erosion control pole at Matalok Estate

2011.11

Major 4.6.4 Major 5.3.2

The hazardous waste temporary storage room in the estate has not had license yet from relevant agencies. The company stores used pesticides packaging exceeded the maximum retention time of 90 days.

RTE Minor S-1 The organization needs to store hazardous waste in a location that already has license from relevant agencies. The retention time of used pesticide packaging is in accordance with Government Regulation No. 18 Year 1999.

Based on the results of field visits known the ex pesticide packaging that produce from the estates has been sent to the licensed hazardous waste storage in Rantau factory

Closed 23 October

2012

2011.18

Minor 5.2.1

LMI has installed signboard in location of identified HCV. For example in Block C 008, D 15 and D 016. The socialization to all employees and the community have been conducted at the time of preparation of HCV Identification documents but posters / signboards on existence of protected species have not been installed in the area of HCV / other locations that are accessible to the public.

RSPO Secretariat RTE, HCV Area of Sungai Pinang and HCV 1.3 in Sekayu Estate

Observation

S-1 LMI has to disseminate the presence of protected flora and fauna in form of signboards, posters, publications, and other media to the public and employees.

LMI has replaced the signboards and posters of HCV 1.3 and 2.3 (secondary forest) to the HCV area belong on block J-28 Betung Estate

Closed 23 October

2012

2011.20

Minor 6.1.2

LMI has not prepared the Management / Monitoring Plan of Social Impact Analysis results of PT LMI as recommended by the Foundation of Sustainable Oil Palm Indonesia (YASBI) in 2010

RTE Minor S-1 The company must prepare a document of management and monitoring plan of social impact as recommended in Social Impact Assessment.

Company commitment by implemented management and monitoring of social impact year 2011, for example involvement on community development plan consultation Sungai Durian sub district 15 February 2011and

Closed 22 October

2012


ASSESSMENT REPORT

SPO – 4006a.4 Page 33


CAR No



Closing Date

meetings with Mangka village representative on 4 April 2011. LMI also implemented social activity by periodically and opened opportunity to local children and other related stakeholders in form of scholarship program to junior high school (SMP) and high school (SMA) students

2011.23

Minor 6.5.2

On Mutual Working Agreement with the contractor, it has been required regarding compliance with OHS, but it is not fully expressed on compliance with applicable labor regulations in general.

RTE Observation

S-1 LMI has to review Mutual Working Agreement (SPK) with the contractor by taking into account the applicable labor regulations.

LMI shows the document Letter of Agreement with contractor explain the provisions of labor (employment) and safety policies in Indonesia, Social Security (JAMSOSTEK) to the workers of the contractor to be responsibilities of second parties (contractors), contractor must have the certificate of any operator licensing, classification and qualification according to existing regulations and contractor responsible for providing the tools and facilities to maintain the safety of contractor workers; however on article 10.4 of the contractor agreement stated the contractor has to followed related the labour laws and regulations

Closed 22 October

2012

2011.26

Major 7.2.1 Minor 7.2.2 Minor 4.3.5

A detailed soil survey needs to be done in Matalok estate as a reference in performing the appropriate actions for the soil in accordance with physical, chemical and soil conditions

D019 Matalok Estate

Minor S-1 There is a new planting area of 108 ha (2008) at MLE in which detailed soil survey has not yet done.

Based on marginal land map RTE and MLE and Semi Detail Soil survey document and Land appropiate class evaluation for Palm MLE and RTE declare soil survey result (Tinjau and Detil) had been

Closed 20 October

2012


ASSESSMENT REPORT

SPO – 4006a.4 Page 34


CAR No



Closing Date

Minor 4.2.1

including: soil analysis, soil fertility and slope.

done by MRC Banjarbaru, there no marginal land in work area PT LMI. Therefore, not available Marginal Land Map in PT LMI estate

2011.29

Major 2.2.2

Based on the results of public consultations and interviews with representatives of Betung and Sekayu Baru Village, there was still things not understood by the public about the existence of Land Use Rights (HGU) boundaries. The company has identified the existence of Land Use Rights poles in all of the estates with the results that there are only 17% Land Use Rights poles left in the field and the rest is missing. The Company already re-identified the existence of Land Use Rights poles (large poles) thoroughly in all Estates on 6 June 2011 which was done by Assistant of Estates with the following results; - From the 118 pieces large poles in pole book documents, 95 pieces of which still existed in the field and 23 units was missing. - Physical conditions of existing poles: some of them were still in good condition and the identities were readable. The rest were damaged / the identities were not

LMI Minor The company must perform the installation, the identification and maintenance of Land Use Rights (HGU) poles, which are the legal boundary of the work area.

LMI has shown a document the boundary in every estate, in the form of maps and photographs of the pole installation. Based on field visits boundary poles can be found easily and clearly demarcated

Closed 20 October

2012


ASSESSMENT REPORT

SPO – 4006a.4 Page 35


CAR No



Closing Date

readable. - Small Land use rights (HGU) poles have not been re-identified to ascertain the condition and the existence.

2011.30

Minor 4.4.2

LMI has been measuring of monitoring well water quality, waste wells and ponds inhabitants. However, based on the results of public consultation, there are complaints about surface water. The company has not made measurements of river water quality.

LMI Minor S-1 LMI must conduct quality measurement to river water.

Water management activities in the form of Waste Water Treatment Plant (WWTP) at POM; water quality monitoring. Record of the implementation of water quality measurement which conducted monthly by the Laboratory of Commodity and Environmental Measurement, Centre of Research and Industrial Standardization; Banjar Baru South Kalimantan, known the water quality still accordance with regulation

Closed 22 October

2012

2011.31

Minor 4.6.3

Based on interviews with spray team of Betung estate Division III, Mrs. Nuryati, 36 years old who are breastfeeding (23 months) work in spray team (water filler officer). The company has moved Mrs. Nuryati to maintenance work.

Betung Estate

Minor S-1 LMI should review the mechanisms of protection of pregnant and lactating women so that they are not involved in jobs, which risk exposed to chemicals.

LMI has health check program to factory and estates workers accordance with internal policy was conducted on 5 June 2012 for Rantau Estate, 1 March 2012 for Matalok Estate. All health check records were stored properly. Company doctor regularly monitored and check to ensure there was no pregnant woman worker and breastfeeding not working in high risk work

Closed 20 October

2012


ASSESSMENT REPORT

SPO – 4006a.4 Page 36


CAR No



Closing Date

2011.32

Minor 5.2.2

There is not enough evidence that the instructors (Suroso and Sholeh) that provide HCV training to special officers appointed to manage protected, rare, endangered species and HCV habitat HCV, have attended HCV training.

RTE Observation

S-1 Person who responsible or special officer for manage the HCV area in LMI has been appointed (Suroso) and trained. The evidence of appointed letter and training (certificate from Indonesian Palm Oil Commission, on 6 July 2010) is available

Closed 22 October

2012

2011.33

Major 6.2.1

Based on Public Consultations held in estates, which were attended by Head of Pamukan Utara Sub district, Head of Sungai Durian Sub district, Head of Villages, Tribe Leaders and Community Leaders and interview with community leaders in Villages, it is stated that most of them have not got socialization on communication procedures of PT LMI.

RTE Observation

S-1 LMI has Communicated and Consultation with the community. Records of Communication with Stakeholders, Records of Communication with Rantau Jaya villagers, Rantau Budha villagers, Terombong Sari villagers and Bepara villagers has been maintained

Closed 22 October

2012

2011.34

Minor 6.3.1

Until Stage 2, there has not been enough evidence that the company has responded complaints by involving parties complaining (it is still limited to one party – Head of Sekayu Baru Village) There is a demand from community of Sekayu Baru Village and Betung Village via Letter No. 004/KAD-Btg/IV/2011 or 002/AAD-Skb/IV/2011 dated 23 April 2011, followed up by conducting a

LMI Minor S-1 LMI has procedure of handling mechanism for complaints towards management (009/LMI-MPKTP/2010) on 16 December 2010 page 4 on the stakeholder complaints handling flowchart. The mechanism implementation for example has been done by involve the village head, customary head of Sekayu village and Betung village on 24 June 2011 at Sekayu estate office regarding community complaint of smallholders scheme development (plasma)

Closed 20 October

2012


ASSESSMENT REPORT

SPO – 4006a.4 Page 37


CAR No



Closing Date

meeting with Head of Sekayu Baru Village on 25 April 2011, then the company communicated with Local House of Representatives (DPRD) of Kotabaru District. On 27 April 2011 via Letter of Local House of Representatives (DPRD) Kotabaru No. 005/82/DPRD, Local House of Representatives (DPRD) invited PT LMI to hold a hearing on 30 May 2011; Meeting was not fully conducted. PT LMI could not attend the hearing with Local House of Representatives (DPRD) Kotabaru (Via Letter No. 383/LMI-/Um/L&ASD/BJB/V/3011 dated 26 May 2011), and requested to be postponed until 14 June 2011 related to implementation of the Internal Official Meeting of PT LMI which had been scheduled beforehand. In the letter, the demand of traditional land rights is a demand for development of community’s oil palm estates through plasma programs. The company has to conduct a resolution of the demand of Sekayu Baru Village and Betung Village communities by involving stakeholders in accordance with Mechanism of complaints


ASSESSMENT REPORT

SPO – 4006a.4 Page 38


CAR No



Closing Date

resolution of management (009/LMI-MPKTP/2010) dated 16 December 2010 as a reference to handle complaints from stakeholders. Negotiation conducted is still limited to Head of Sekayu Baru Village, it has not involved Head of Betung Village not Tribe Chief of Betung and Sekayu Baru as the complaining parties.

2011.35

Minor 6.9.2

Based on the results of interviews with Gender Commission and spray team, the company still needs to provide understanding and socialization to employees regarding the essential of protection for female policy.

LMI Observation

S-1 Doctors recommended employees known to be pregnant and breastfeeding not to work in the spray and fertilizer. Based on interviews with spraying team of matalok estate, they have understood the policy about protection reproductive rights

Closed 23 October

2012


ASSESSMENT REPORT

SPO – 4006a.4 Page 39


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

During the Surveillance-1 assessment 1 (one) nonconformity was assigned against Major Compliance Indicator, 7 (seven) nonconformities were assigned against supply chain mass balance module D Indicators and 4 (four) opportunities for improvement were identified. Further explanation of the non-conformities raised and corrective actions taken by the company are provided in this section. The company prepared a corrective action that was reviewed and accepted by MUTU and corrective actions taken to close all non-conformities shall be verified during the next surveillance-2 assessment.

CAR No



Closing Date

2012.38

Major 5.2.1

Peer Review document identification of HCV The company has compiled a document identification of HCV that conducted by YASBI in December 2009, but not enough evidence that the HCV document had been review accordance with HCV toolkit June 2008.

Estate Major 60 days

Document identification of HCV must be reviewed accordance with HCV toolkit June 2008.

3rd November 2012

The company has reviewed the HCV document identification on 12th October 2012, in accordance with the letter No. 028/SK-YASBI/X/2012.

Closed 3

November 2012

2012.39

SCCS 1.1.a; 1.2

Documented Procedures The company doesn’t include all elements of SCCS at procedure of Supply Chain and Products traceability (RSPO/65/SCPP/LMI, document code of P&C RSPO Procedure VIII.CA.1, 1st March 2012)

Mill NC 1 month

The company need to include or explain all elements of the SCCS requirements in procedure specifically

17th November 2012

Inclusion stamp RSPO Certified has been done at Rantau Estate weight card (Ticket No. 118075) and RSPO non certified at KKPA Sungai Cengal weight card (Ticket No. 120201)

Declaration-2 (1st July 2012) stated that PT LMI has had procedure and work instruction to make sure implementation of Supply Chain System with Mass Balance Model.

Closed 20 November

2012

2012.40

SCCS 2.1

Purchasing and goods in Pembelian dan Penerimaan Material

Mill NC 1 month

The company shall be ensure that the material of certified and uncertified are clearly stated in the

17 November 2012 Inclusion stamp RSPO Certified

Closed 20 November

2012


ASSESSMENT REPORT

SPO – 4006a.4 Page 40


CAR No



Closing Date

Company received material as FFB certifed or uncertified, but in each the shipping document (DO, Weight card, etc) not differentiated between certified and uncertified FFB.

different shipping document. has been done at Rantau Estate weight card (Ticket No. 118075) and RSPO non certified at KKPA Sungai Cengal weight card (Ticket No. 120201)

2012.41

SCCS 3.3.b dan c

Material Accounting System The company has been appropriation Mass Balance Model, but not already yet doing material accounting related to COP or PKO volume that selled.

Mill NC 1 month

The company need to perform material accounting system in accordance with RSPO reccomended.

17 November 2012

The company has been performed accounting the certified and uncertified material in the production daily report (CPO/KPO proccesing).

Closed 20 November

2012

2012.42

SCCS 3.4

Inclusion Supply Chain Model The company can not show the Supply Chain Model that used at the purchase and sale contract.

Mill NC 1 month

The company shall be ensure the Supply Chain Model that used are listed in each the purchase and sale contract document.

17 November 2012

In Declaration-6 (1st July 2012) stated that “To Complie the Supply Chain Certification, PT LMI stated the CPO and PK production use the Suppy Chain System with Mass Balance Model. Name and model of the product listed at shipping document and other document that related with the product.

PT LMI has not send CPO/kernel with RSPO certifed until November 2012.

Closed 20 November

2012

2012.43

SCCS 4.1.c

Sales and goods out The company can not show the Supply Chain Model that used at the sale document (Invoice, CPO shipping document, etc)

Mill NC 1 month

The company shall be ensure that the Supply Chain System with Mass Balance Model was used at sale and shipping document.

17 November 2012

In Declaration-6 (1st July 2012) stated that “To Complie the Supply Chain Certification, PT LMI stated the CPO and PK

Closed 20 November

2012


ASSESSMENT REPORT

SPO – 4006a.4 Page 41


CAR No



Closing Date

production use the Suppy Chain System with Mass Balance Model. Name and model of the product listed at shipping document and other document that related with the product.

PT LMI has not send CPO/kernel with RSPO certifed until November 2012.

2012.44

SCCS 5.1

Training The company shall determine and provide training for all staff as required at SCCS, the company has not made SCCS training to all relevant staff.

Mill NC 1 month

The company shall be ensure that the SCCS training is made to make sure the product treceability.

17 November 2012

The company has performed SCCS training to all relevant staff. The training attended 23 participant (PT LMI and PT SAA), located in RSPO secretariat at PT LMI with training object was matriks SCCS.

Closed 20 November

2012

2012.45

SCCS 6.1

Claim The company has been getting RSPO certification since 30 Desember 2011 and also already has procedure of supply chain and Products traceability (RSPO/65/SCPP/LMI, document code of P&C RSPO Procedure VIII.CA.1, 1st March 2012), but not enough evidence that the company procedure has refer to RSPO rules for Communication and claim.

Mill NC 1 month

The company should clearly state that any claim of RSPO Certified product refer to RSPO Rules for Communication and Claim.

17 November 2012

In Declaration-7 has been stated that “all claim of CPO and PK Certified, has complied with RSPO Guidelines for Communication and Claims.

Closed 20 November

2012


ASSESSMENT REPORT

SPO – 4006a.4 Page 42


3.5.3 Opportunity for Improvement

No Ref Std Descriptions

1 Major 1.1.2

Company have opportunity to make sure that procedur implementation related with information requests had done with correct and consistent

2 Minor 4.7.6 Company have opportunity to improve and maintain the safety and health facilities usage.

3 Major 5.2.2 Company have opportunity to appropriate plan of HCV manage and control to result of recomendation HCV assesment hade been made

4 Minor 6.1.3 Company have opportunity to carry out result of control an social manage in implementation report of RKL-RPL that deliver to related institution.

3.5.4 Noteworthy Positive Components

No Ref Std Descriptions

1 PT. Laguna Mandiri have RSPO certificate and comitment in implementation of sustainable palm oil

2 PT. Laguna Mandiri have competent human resource in their field

3 Facilities and infrastructure was for all employee were improved by LMI management.


ASSESSMENT REPORT

SPO – 4006a.4 Page 43


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

Public Issues (Institution/ NGO/Community)

Management Responses Auditor Responses

Terombong Sari Village a. Communication has been going well between PT. LMI and villagers, where

some assistance has been responded and granted by the company b. Positive impact that perceived by the public such as: open recuitment for

villagers either as an employee or to market agricultural products, and opening village access to the outside.

c. During PT. LMI operates, never happened a conflict / land dispute with the villagers.

d. Villger’s problems such as: electricity and water

PT LMI will continue to keep good relations with the villagers

The harmonization between PT Laguna Mandiri (LMI) and villagers need to be preserved or enhanced, so the positive impact from plantation management can be sustainable.

Rantau Jaya Village a. Communication has been going well between PT. LMI and villagers, where

some assistance has been responded and granted by the company. b. Positive impact that perceived by the public such as: open recuitment for

villagers either as an employee or to market agricultural products, and opening village access to the outside.

c. During PT. LMI operates, never happened a conflict / land dispute with the villagers.

d. The company had socialized about the boundry, HCV and information request, but the villagers not yet understand about information request responses time limit.

e. Company responses related information request often given orally to village clerk.

PT LMI will continue to keep good relations with the villagers

The harmonization between PT Laguna Mandiri (LMI) and villagers need to be preserved or enhanced, so the positive impact from plantation management can be sustainable.


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:

Head of PSQM

Mutuagung Lestari

Minamas Plantation – Sime Darby

Lead Auditor

Mohamad Pirabaharan

Taufik Margani

24/November/2012

24/November/2012


ASSESSMENT REPORT


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

No Institution/NGO/Community Address Phone/Email Form of Contact Date of Contact

1 Badan Lingkungan Hidup Kab. Kotabaru. (Environmental Body)

Jl. P. Kusuma Negara, Kotabaru 72116 Kalimantan Selatan

- Letter. 1448.28/MUTU/X/12.

11 October 2012

2 Dinas Kehutanan Kabupaten Kotabaru. (Forest Agency)

Jl. P. Kesuma Negara. Kotabaru 72116 Kalimantan Selatan

- Letter. 1450.28/MUTU/X/12.

11 October 2012

3 Dinas Perkebunan Kabupaten Kotabaru. (Plantation Agency)

Jl. P. Kusuma Negara, Kotabaru 72116 Kalimantan Selatan

- Letter. 1452.28/MUTU/X/12.

11 October 2012

4 Dinas Tenaga Kerja dan Transmigrasi Kabupaten Kotabaru. (Labour Agency)

Jl. Veteran KM 02 No. 223 Kotabaru (72116) Kalimantan Selatan

- Letter. 1451.28/MUTU/X/12.

11 October 2012

5 Kantor Badan Pertanahan Nasional Kab. Kotabaru. (National Land Agency)

Jl. Veteran No. 15. Kotabaru 72116, Kalimantan Selatan.

- Letter. 1449.28/MUTU/X/12.

11 October 2012

6 Village of Terombong Sari Desa Terombong Sari, Kec. Pamukan Utara

- Interview 22 October 2012

7 Village of Rantau Jaya Desa Rantau Jaya, Kec. Pamukan Utara

- Interview 22 October 2012


ASSESSMENT REPORT


Appendix 2. Assessment Program

DATE 20 – 24 October 2012

TIME PROCESSES / CLAUSES TO BE AUDITED

AUDITOR

ACTUAL

Saturday, 20/10/2012 07.30 - 08.00 08.00 – 12.30

Opening Meeting Observation Use of appropriate best practices by growers and millers (4.1; 4.2) Responsible consideration of employees and of individuals and communities affected by growers and mills (6.5; 6.6)

TM/NM/MM/WR

Monday, 22/10/2012 07.30 - 12.00

14.00 - 17.30

Field Observation to Rantau Estate and public consultation to villages Document review e.g. Commitment to transparency (1.1;1.2) Compliance with applicable laws and regulations (2.1;2.2;2.3) Commitment to long-term economic and financial viability (3.1) Basic Information, Use of appropriate best practices by growers and millers (4.5; 4.6)

TM/NM/MM/WR

Tuesday, 23/10/2012 07.30 - 12.00

14.00 - 17.30

Field Observation to Matalok Estate and Rantau Factory Observation Use of appropriate best practices by growers and millers (4.3; 4.4) Responsible development of new plantings (7.2; 7.4) Responsible consideration of employees and of individuals and communities affected by growers and mills (6.1; 6.2) Basic Information, Use of appropriate best practices by growers and millers (4.7; 4.8) Environmental responsibility and conservation of natural resources and biodiversity (5.2), Responsible development of new plantings (7.3) Environmental responsibility and conservation of natural resources and biodiversity (5.5), Responsible development of new plantings (7.7), Commitment to continuous improvement in key areas of activity (8.1)

TM/NM/MM/WR

Wednesday 24/10/2012 08.00 - 12.00

14.00 – 16.00

Finding Clarification Closing Meeting at Estate Office To Balikpapan

TM/NM/MM/WR


ASSESSMENT REPORT


Appendix 3. Glossary

AMDAL (SEIA) : 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

BTE : Betung Estate

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)

IPAL (WWTP) : Instalasi Pengelolaan Air Limbah (Wastewater Treatment Plant)

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

MTE : Matalok Estate

OER : Oil Extarction Rate

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

PK : Palm Kernel

PKS (POM) : Pabrik Kelapa Sawit / Palm Oil Mill

POME : Palm Oil Mill Effluent

PSD : Plantation Services Departement

PSQM : Plantation Sustainability and Quality Management

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

RTE : Rantau Estate

RTF : Rantau Factory

SKE : Sekayu Estate

SOP : Standard Operating Procedure

S-01 : Surveillance 1

TBS (FFB) : Tandan Buah Segar (Fresh Fruit Bunch)

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

· Pamukan utara, District of Kotabaru 2° 26' 21" LS 116°6' 51" BT 1.4.2 Location of Estate(s)...

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