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MSPO CERTICATION SUMMARY

REPORT

ABEDON SDN. BHD.

STAGE 2 – CERTIFICATION AUDIT

Date: 16/04/2018

TUV NORD (Malaysia) Sdn Bhd No. 20, Jalan Tiara 3

Taman Perindustrian UEP Subang Jaya 47600, Selangor, Malaysia

Phone: +603 8023 2124 Fax: +603 8023 4140

MSPO Certification Summary Report

Company Name: Abedon Sdn. Bhd.

Certifying Unit: Abedon Sdn. Bhd.

Client Number: 92-044

Audit Type: Stage 2 Certification

MSPO-F04b / Rev 2 2 of 29

Table of Contents

1. INTRODUCTION ............................................................................................ 4

1.1. Objective 4

1.2. Scope 4

1.3. Appointment and qualification of team members 4

2. METHODOLOGY ............................................................................................ 9

Table 2-1: List of Estates Selected 10

3. ORGANISATION INFORMATION ................................................................ 11

3.1. Production volume 11

3.2. Planting Program for Each Estate 11

3.3. Replanting program for each estate 12

3.4. Maps of Company Location, Plantations and Organised Smallholders 13

4. CERTIFICATION ASSESSMENT ................................................................. 17

4.1. Stage 1 – Certification Audit: 17

4.2. Stakeholders’ Consultation 17

4.3. Status of Non-Conformities Previously Identified 20

4.4. Detail of Audit Findings Identified During This Audit 21

5. CONCLUSION .............................................................................................. 23

6. RECOMMENDATION ................................................................................... 24

7. REFERENCES ............................................................................................. 25

Table 7-1: Documents provided by Abedon Sdn. Bhd. 25 Table 7-2: Background investigation and assessment documents 26

Table 7-3: List Of Interviewed Persons And Stakeholders 27

Distribution / Confidentiality / Rights of ownership / Limitations / Responsibilities / Audit Objectives 29

Annex / Enclosures 29







Abbreviations

GAP Good Agricultural Practice

MPOB Malaysia Palm Oil Board

MS Malaysian Standard

MSPO Malaysia Sustainable Palm Oil

NC Non Conformance

OBS Observations

P&C Principles & Criteria

PPP Plant Protection Product

SOP Standard Operating Procedure







1. INTRODUCTION

Abedon Sdn. Bhd. has commissioned TUV NORD Malaysia Sdn Bhd to conduct stage 2 certification audit for its Estates: Kolopis Estate and Tanaki Estate according to MS 2530-3:2013 Part 3 General principles for Plantations and Organized Smallholders.

1.1. Objective

The objective of this certification audit is to assess the Abedon estates by an independent certification body with the aim for compliance of the standard.

1.2. Scope

The certification is based on the documentation developed by the group office and estates.

The supporting documents were provided to the audit team as well as information received by means of interviews and background investigation.

The documents and information were reviewed against the requirements and criteria based on MSPO 2530-3:2013 Part 3 General principles for Plantation and Organized Smallholders.

TUV NORD Malaysia has employed a risk-based approach in the audit, focusing on the identification of significant risks and reliability of the assessment and reporting.

In addition, the following reference was used as part of the assessment; the compliance of the requirements out of the guidelines applied was checked.

1. Malaysian Sustainable Palm Oil Part 3: General Principles for Plantation and Organized Smallholders audit guidance;

2. Palm Oil Supply Chain Traceability requirement, document MPOB/MSPO/TR/07

1.3. Appointment and qualification of team members

A certification team consisting of one team leader was appointed. The onsite team members contributed to the review of documents, the assessment of the project activity and to the preparation of this report under the leadership of the team leader.

Qualification of the Lead Auditor: Mohamad Norhisham Bin Mohd Salleh

Requirement Qualifications

Post-secondary education, college or university diploma / degree in one of the following

i) Agriculture;

ii) Science & Technology (e.g. Environmental

Sciences, Life Sciences, Geological

Sciences, Natural Sciences,);

iii) Engineering, Process Technology;

iv) Energy Management, Quality Management;

v) Social Sciences and/or Anthropology;

vi) Business Management; or

vii) Other relevant related fields

Graduate in Applied Science (Major In Agrobiology).

At least five (5) years of work experience in the oil palm sector or related field in consultancy / auditing of similar industry or equivalent related to and as necessary for the certification

5 years working experience in palm oil estates.







Requirement Qualifications

process. (e.g., sustainability, palm oil management; agriculture, ecology; social science)

Attended the MS 2530 series of standards training

Successfully completed MS2530 series training, RSPO P & C LA, SCC, RSPO Next and ISCC-EU training

Conducted at least three (3) MSPO or equivalent sustainability certification audits as Lead Auditor-in-training with a minimum of fifteen (15) man-days under the supervision of a qualified Lead Auditor for MSPO or equivalent sustainability certification schemes within the last two (2) years.

Trainee lead auditor for MSPO scheme.

A good knowledge in handling and evaluating sources of information and data. Able to communicate in Bahasa Malaysia or any other local language.

Able to communicate in Bahasa Malaysia and English.

Field working experience in the palm oil sector, or demonstrable equivalent


Good Agricultural Practices (GAP), and Integrated Pest Management (IPM), pesticide and fertilizer use


Health and safety auditing on the farm and in processing facilities, for example OHSAS 18001 or Occupational, Health & Safety Assurance System

Auditor for RSPO and MSPO scheme.

Worker welfare issues and social auditing experience, for example with SA8000 or related social or ethical accountability codes

Successfully completed SA 8000 Basic training and auditor for RSPO and MSPO schemes.

Environmental and ecological auditing, for example experience with organic agriculture, ISO 14001 or Environmental Management Systems (EMS) or High Conservation Value (HCV)

Successfully completed ISO 14001 LA course and auditor for RSPO and MSPO scheme.

Good Milling Practices for example palm oil milling working experience or demonstrate equivalent.

Auditor for RSPO SCC and ISCC in refinery and mill.







Qualification of Team Members

Requirement Assessor Qualification Compliance

Post-secondary education, college or university diploma / degree in one of the following

i) Agriculture;

ii) Science & Technology (e.g.

Environmental Sciences, Life

Sciences, Geological Sciences,

Natural Sciences,);

iii) Engineering, Process

Technology;

iv) Energy Management, Quality

Management;

v) Social Sciences and/or

Anthropology;

vi) Business Management; or

vii) Other relevant related fields

Ang Wai Sheng, Terence

Diploma and Advance Diploma in Tourism Management

Yes

Leong Sak Kuan Graduate in Science (Physic).

Yes

Zul Hairi Bin Abu Hassan

Graduate in Plantation Industry Management

Yes

At least five (5) years of work experience in the oil palm sector or related field in consultancy / auditing of similar industry or equivalent related to and as necessary for the certification process. (e.g., sustainability, palm oil management; agriculture, ecology; social science)


More than 8 years in sustainable related field

Yes

Leong Sak Kuan More than 6 years as quality manager for ISO 14001 schemes.

Yes

Mohamad Norhisham Bin Mohd Salleh


Yes


9 years working experience in estate management.

Yes

Attended the MS 2530 series of standards training


Successfully completed MSPO, RSPO P & C LA, SCC, RSPO Next and ISCC-EU training.

Yes

Leong Sak Kuan Successfully complete MSPO Lead auditor training course.

Yes


Successfully complete MSPO Lead auditor training course.

Yes


Successfully complete MSPO Lead auditor training course

Yes

Conducted a minimum six (6) on-site audits for a total of at least 20 man-days of audit experience as an


Has conducted 3 MSPO and equivalent sustainability certification

Yes








auditor-in-training under the direction and guidance of a qualified Lead Auditor for MSPO or equivalent sustainability certification schemes.

(RSPO/ISCC) as lead auditor.

Leong Sak Kuan Qualified as auditor base on audit log.

Yes


Qualified as auditor base on audit log.

Yes

A good knowledge in handling and evaluating sources of information and data. Able to communicate in Bahasa Malaysia or any other local language.


Able to communicate in Bahasa Malaysia, English and Mandarin.

Yes

Leong Sak Kuan Able to communicate in Bahasa Malaysia, English and Mandarin.

Yes


Able to communicate in Bahasa Malaysia, and English.

Yes

Field working experience in the palm oil sector, or demonstrable equivalent


1 year as Certifier and Reviewer for RSPO P&C and SCC schemes

1 year as Wildlife (Biodiversity) and Ecotourism Consultant (EMS &HCV)

3 years as Wildlife Guide (Licensed issued by Ministry of Tourism, Malaysia)

6 months as Field Technician for University of Montana on HC

Yes

Leong Sak Kuan Working experience as auditor for RSPO and MSPO scheme.

Yes



Yes



Yes

Good Agricultural Practices (GAP), and Integrated Pest Management (IPM), pesticide and fertilizer use


1 year auditor for RSPO, ISCC and MSPO schemes

Yes

Leong Sak Kuan 3 Years in RSPO P&C related to GAP and IPM.

Yes

Mohamad Norhisham 5 years working Yes








Bin Mohd Salleh experience in palm oil estates.



Yes

Health and safety auditing on the farm and in processing facilities, for example OHSAS 18001 or Occupational, Health & Safety Assurance System


1year auditor for RSPO, ISCC and MSPO schemes

Yes

Leong Sak Kuan Successfully completed OHSAS 18001 and Working experience as auditor for ISO 14001 and ISO 9001.

Yes

Worker welfare issues and social auditing experience, for example with SA8000 or related social or ethical accountability codes


Successfully completed Basic SA 8000 training and qualified as RSPO and MSPO sustainability auditor.

Yes


Successfully completed Basic SA 8000 training and qualified as RSPO, ISCC and MSPO sustainability auditor.

Yes

Environmental and ecological auditing, for example experience with organic agriculture, ISO 14001 or Environmental Management Systems (EMS) or High Conservation Value (HCV)


1 year auditor for RSPO, ISCC and MSPO scheme

Yes

Leong Sak Kuan Successfully completed ISO 14001 training and auditing experiences.

Yes


Successfully completed EMS ISO 14001: 2015 Lead Auditor training.

Yes

Good milling Practices for example palm oil milling working experience or demonstrate equivalent.


Trainee auditor for RSPO and ISCC in refinery and mill

Yes


Has involved in auditing for RSPO SCC standard

Yes







2. METHODOLOGY

The audit approach consists of the following steps:

Contract review;

Appointment of team members and technical reviewer;

Contact client for relevant documentation according to the applicable MSPO standards;

Audit planning;

Background investigation, desk review of submitted documents;

On-Site assessment, inspections, interviews with operational personnel, stakeholders and its contractors; review of documentation;

On-site reporting;

Resolution of non-conformance (NC) (if any);

Draft audit reporting;

Technical review;

Final audit reporting;

Peer review;

Address Peer Review Comments (if any);

Final approval and issuance of certificate.

Stage 1 – Certification Audit:

Abedon Sdn. Bhd. has been exempted from undergo stage 1 audit process due to the estates under this group has been already certified under RSPO P&C Malaysian National Interpretation 2014 standard. Refer to RSPO Certificate number 500 92 028. Further information regarding RSPO certification is available on RSPO official website.

Stage 2 – Certification Audit:

Stage 2 certification audit was conducted on 22/01/2018 to 25/01/2018 covers the following activities but not limited to below:

Onsite visit, observations and inspections of estate facilities and field activities;

Interview operation personnel and field workers for understanding for the work assigned;

Reviewed revised and updated documentation established and implemented;

Operating records;

Training records;

Reports established;

Work plans established;

Stakeholders consultation meeting;

Review and closed out of non-conformance raised during stage 1 audit;

Assessment reporting;

For list of all reviewed documents refer to chapter 7, Table 7-1.







For list of personnel participated in the audits refer attendance sheet and Table 7-3.

On-site Assessment

The audit of the estates was conducted according to the MS 2530-3:2013 Part 3 for Plantation and Organized Smallholders.

The methodology for collection of objective evidence included physical site inspections, observation of tasks and processes, interviews of stakeholders, communities, staff, workers and their families, review of documentation and data. Checklists and questionnaires were used to guide the collection of information. The comments made by external stakeholders were also taken into account in the assessment.

For the stage 2, the selected estates were based on the formula S = 0.8√n where S = sample size and n = number of estates which is in accordance to MSPO certification procedure.

Based on the formula, the sample size for the estate S = 2, therefore round up to the next integral of 2 estates. Thus, a total of 2 estates were selected for the onsite assessment and inspection as listed in Table 2-1 below:

Table 2-1: List of Estates Selected

Name of Estate Coordinates

Kolopis Estate N 05°17’52” E 117°57’24”

Tanaki Estate N 05°19’47” E 117°56’18”

Non-conformance:

On the basis of the desk review, evidences presented during the audits as well as from the onsite visits non-conformance (NC) Major or Minor as well as Observations (OBS) may be raised during the audit.

Major non-conformance shall be addressed and responded with 60 days from end date of audit. All minor non-conformances will require submission of action plan and to be accepted by Lead Auditor. Implementation of Minor NCs and OBS will be reviewed and verified during the next audit.







3. ORGANISATION INFORMATION

Tanaki and Kolopis estates are owned by Abedon Sdn. Bhd.

The certified estates are located at the Kinabatangan, Sabah.

The details of the two estates as below:

3.1. Production volume

*includes productive and non-productive area (infrastructures, conservation, HCV, housing & office compound use, set aside area etc.)

**Immature + Mature Area

3.2. Planting Program for Each Estate

Name of Estate Location Coordinates

Kolopis Estate 56KM, Jalan Lahad Datu-Sandakan, 90200 Kinabatangan, Sabah

N 05°17’52” E 117°57’24”

Tanaki Estate 56KM, Jalan Lahad Datu-Sandakan, 90200 Kinabatangan, Sabah

N 05°19’47” E 117°56’18”

Name of Estate

Area (Ha) Projected FFB Production (mt)

(January 2018 to December 2018) Total* Production**

Kolopis Estate 2,489.86 2,085.37 41,600.00

Tanaki Estate 2,628.03 2,290.48 38,500.00

Total FFB 80,100.00

Year / estate Kolopis Estate Tanaki Estate

Year 1993 - -

Year 1994 - -

Year 1995 548.46 727.81

Year 1996 417.15 243.97

Year 1997 - -

Year 1998 - -

Year 1999 -

Year 2000 - 554.05

Year 2001 - -

Year 2002 - -

Year 2003 - -

Year 2004 - -

Year 2005 - -

Year 2006 - -







3.3. Replanting program for each estate

Year of replanting

Planted area (ha) in each estate Total area to be replanted (ha)

Kolopis Estate Tanaki Estate

2018 - 223.21 223.21

2019 548.46 - 548.46

2020 - 727.81 727.81

2021 417.15 243.97 661.12

2022 - - -

2023 - - -

2024 - 554.05 554.05

TOTAL 965.61 1,749.04 2,714.65

Year 2007 - -

Year 2008 - -

Year 2009 - -

Year 2010 - 95.07

Year 2011 - -

Year 2012 391.95 -

Year 2013 466.44 -

Year 2014 - -

Year 2015 261.14

Total Mature 2,085.14 1,620.90

Replant Year

2016 - Y3 - 86.84

Replant Year

2017 - Y2 - 348.24

Replant Year

2018 - Y1 - 223.21

Total Immature - 658.29

Total Oil Palm 2,085.14 2,279.19







3.4. Maps of Company Location, Plantations and Organised Smallholders

Figure 1: Location of Abedon Estates (Kolopis Estate and Tanaki Estate).







Figure 2: Kolopis Estate map (Kolopis Division and Bumiwealth Division).







Figure 3a: Tanaki Estate map (Tanaki Division, Inobong Division).







Figure 3b : Tanaki Estate map (Segama Division).







4. CERTIFICATION ASSESSMENT

4.1. Stage 1 – Certification Audit:

According to the Certification Scheme, operators who have obtained at least one international sustainability schemes e.g. ISCC, RSB or RSPO certification are exempted from Stage I audit.

Therefore, in this aspect, Abedon Sdn. Bhd., is exempted to undergo Stage I audit due to it was already RSPO 2013 P&C certified. Refer to RSPO certificate number 500 92 028.

The audit team has applied the Malaysian Sustainable Palm Oil Part 3: General principles for oil palm plantations and organized smallholders audit guidance to assess the established documents against the Principles and Criteria of the standard.

4.1.1 Stage 2 – Certification Audit:

The Stage II audit was conducted on 22/01/2018 to 25/01/2018 covering 2 the estates – Kolopis Estate and Tanaki Estate.

Prior to the audit, a desk review was conducted by reviewing the report related to other scheme for Kawa Estate and web search from relevant NGO’s and media sources. Result from the review shows no impact into the certification.

During the Stage II audit, 1 major non-conformity and 1 observation was raised. The closed out of the non-conformances raised during the audit was by means of document review and verifying documents that are established, corrected and implemented appropriately.

4.2. Stakeholders’ Consultation

TUV NORD Malaysia Sdn. Bhd. has published the public notification on 13/12/2017 to obtain feedback and comments from stakeholders prior to the onsite audit. As at audit date on 22/01/2018, there were no comments or feedback received.

A stakeholders’ consultation meeting invitation dated was sent to relevant stakeholders to attend the consultation meeting on 22/01/2018 to gather information from the local communities in accordance to Certification Scheme and Stakeholder Consultation requirements.

The topics of discussion are as below:

1. Introduction of Abedon Sdn. Bhd applying for MSPO certification.

2. Development of oil palm plantations by Abedon Sdn Bhd.

3. Community service and support provided by Abedon Sdn. Bhd.

4. Wildlife management and wildlife corridor established by Abedon Sdn. Bhd.

5. Type of wildlife sighted at Abedon Sdn. Bhd. plantations and wildlife corridor.

6. Local communities’ development.

The following relevant Principles & Criteria of the applied standard have discussed during the stakeholders’ consultation:

1. Principle 2 Criteria 2 Indicator 1: Consultation and Communication with stakeholders:

The stakeholders could confirm they have attended meetings with SSB personnel on MSPO certification.

2. Principle 4 Criteria 2 Indicator 3 & 4: A complaint form should be made available at the premises, where employees and affected stakeholders can make a complaint

The stakeholders’ advice they have been informed a logbook and form is available to lodge any complaints or suggestions is available at the office.







3. Principle 4 Criteria 3 Indicator 1: Contribute to local development in consultation with the local communities.

The stakeholders could confirm the company has provided assistance and support to communities.

4. Principle 6 Criteria 4 Indicator 1: Where contractors are engaged, they shall understand the MSPO requirements and shall provide the required documentation and information

The stakeholder who provides maintenance and service could confirm briefing on MSPO requirements have been provided.

There no issues raised during the stakeholder’s consultation in terms of tenure and/or use rights, social or environmental aspects of management and operations that need to be addressed by the certified unit. It can be concluded the relevant Principles and Criteria clauses of the applied standard are in compliance.

The list of stakeholders who attended the meeting refer to Table 7-3

Items Subject discussed Audit team findings Company response and proposed action to be taken

1 Any information from Group Manager/Company [thereafter known as GM] in regards to the MSPO audit?

Feedback from stakeholders indicates they were aware of the company’s decision to undergo MSPO certification audit.

Company has conducted meeting with stakeholders as well as training to ensure their awareness on MSPO.

2 Social context There are no social issues highlighted by the stakeholders. Feedback by Immigration department and nearby villagers indicates no social issue raised either caused by the company workers or outsiders.

Positive comment. Company always engage with the stakeholders in meeting and events such as CSR programmes.

3 Understanding of “NCR Land”?

There is no NCR land nearby the estates boundary. Stakeholders interviewed such as smallholders and villages does understand and explained no issue in regard to land within their area.

Positive comment. Company has not yet received any issues related to land nor any boundary land dispute.

4 Economy / livelihood

Is there any impact on livelihood after the introduction of MSPO?

There is good cooperation between the stakeholders and company. The company has conducted meeting and provide a platform to communicate with the company.

Positive comment to the management

5 Does MSPO will largely benefits the local community?

Stakeholders has confirmed that cooperation between them and the company has improved since there are annual stakeholders meeting conducted. Company does provide other supports to








Items Subject discussed Audit team findings Company response and proposed action to be taken

stakeholders.

6 HCV and environmental understanding

They are awareness in regards to the preservation of nature and taking care of the environment. Stakeholders do understand and aware that company has involve in conserving the nature example: planting trees along the roadside.


7 Awareness towards species, habitats, and high conservation values?

Stakeholders do aware on protection of wildlife. The information can be access through the notice board and meeting conducted by company.


8 Support to smallholders Company is supportive to the smallholders by receiving their FFB. There are no issue regarding the smallholders.

Positive comment to the management.

9 FFB quality Smallholders and third-party estates understand the requirement of having only ripe FFB sent to the mill. There are no issue in regards to the grading process.

There are no compromised as regards to FFB quality. FFB grading is conducted in open and transparent way.

10 Are there any plantation or mill management practices that affect you?

There are no issues related since the company will update them on any new practises or processes example; bunch grading.

Positive comment. Company has referred the information process in updating stakeholders on any management practices that might affect them.

11 Do you consider any management is in conflict with the MSPO/RSPO principles and criteria?

Stakeholders attended the meeting confirmed no conflict raised by management.

Positive comment. Company always ensure the applicable requirement by the MSPO scheme being met.







4.3. Status of Non-Conformities Previously Identified

The stage 1 audit findings of this system have been reviewed, in particular to assure appropriate corrections and corrective actions have implemented to address the identified audit findings. Details of the follow up action taken on stage 1 audit findings were recorded in the Stage 1 audit report.

The last audit results of this system have been reviewed, in particular to assure appropriate corrections and corrective actions have implemented to address any nonconformity identified.

The last audit results of this system have been reviewed, in particular to assure appropriate corrections and corrective actions have not been implemented effectively. The non-conformity will be re-raised.

X Not applicable. No non-conformity raised in previous audit.

Note 1: If a minor non-conformity raised in last audit, is not closed out, then this finding will be re-raised to a Major non-conformity.

Note 2: All minor NCs raise in last audit are required to capture in this report together with the closing of the non-compliance.







4.4. Detail of Audit Findings Identified During This Audit

This section gives an overview of the non-conformities raised during this audit.

AUDIT OUTCOME

MAJOR Non-Conformities 1

MINOR Non-Conformities 0

Observations 1

Non Conformity Number < 01 >

Indicator: 4.6.1.1

Standard operating procedures shall be appropriately documented and consistently implemented and monitored.

Location Tanaki Estate

Description of Finding / Objective Evidence:

SPO are in place and have been develop across many operations of the estate. However, the range of document for SOPs available have not include MSPO requirements.

For example, sop on internal audit, Pest & diseases-Ganoderma, updating of legal requirement.

Classification Major Minor Observation

Deadline for

implementation 26/03/2018

Root Cause Analysis (by company):

The SOPs had prepared by Sustainability Team in Sandakan Region for many major operations of the estate before the first ISCC certification in 2014 and some had prepared during RSPO Certification in 2016. During the preparation of the SOPs, ISCC and RSPO had mentioned but MSPO was not mentioned as this is new and the latest certification in 2018 for the Company’s Group.

Correction (by company):

The SOPs will be updated and all clauses of ISCC, RSPO and MSPO will be included or change to a general statement such as “Sustainable Certification” to cover all related current certification scheme and future requirement. This will be corrected immediately by Sustainability Team from Sandakan Region. There are total of 10 SOPs had been updated to meet the requirements.

Corrective / Preventive Action (by company)

The Sustainability Team in Sandakan Region will review and updating all SOPs from time to time or when required. Any new requirement from the new certification shall be listed for priority compliance action.

Review of Correction & Corrective / Preventive Action

Sighted updated and revised list of SOPs. This includes SOP for Pest and Disease- Ganoderma, KHB/G/SOP-12 dated 09/02/2018, SOP on Mechanism for Implementation of Legal Requirement and System for Tracking of Changes KHB/G/SOP-36 dated 09/02/2018 and SOP for Internal Audit, KHB/SOP-49 dated 09/02/2018. Based on evidence submitted, the major non-conformity is considered closed. Implementation will be verify in next surveillance audit.

Closed: Yes No Site verification : Yes No

Name of Auditor:


Date of Closure:

02/03/2018







Non Conformity Number < 01 >

Review of Implementation for Major NC (where applicable)

Closed: Yes No

Name of Lead Auditor / Auditor:

Date of Closure:

Observation < 01 >

Indicator: 4.4.5.6 All employees shall be provided with fair contracts that have been signed by both employee and employer. A copy of employment contract is available for each and every employee indicated in the employment records

Location Kolopis and Tanaki Estates

Description of Finding / Objective Evidence:

The company has established worker contracts form, but the estate could specify the details regarding the overtime rate rather than quoting the Sabah Ordinance as reference.

Review of Correction & Corrective / Preventive Action

Review on action plan and implementation will be conducted in next surveillance audit.

Closed: Yes No Site verification : Yes No

Name of Lead Auditor

Muhamad Norhisham Bin Mohd Salleh

Review of Action Plan:

Next surveillance audit.







5. CONCLUSION

Abedon Sdn. Bhd. has commissioned TUV NORD (Malaysia) Sdn Bhd to conduct stage 2 MSPO certification audit for its 2 estates according to MSPO 2530-3:2013 Part 3 General principles for Plantations and Organized Smallholders.

One Major NC raised was closed out successfully. Furthermore, OBS will be reviewed and verify during the next audit.

From the review of the standard operating procedures, relevant forms, work flow charts established and implemented; the subsequent background investigation and interviews conducted during this surveillance audit have provided TUV NORD Malaysia with sufficient evidence on the fulfilment of the applied standard Principles & Criteria.

In conclusion the certified unit has been established, implemented and continued to improve in managing the estates are in line with the Principles & Criteria of the applied standards of MS 2530-3:2013 Part 3.

Any audit is based on sampling within an organization’s management system and therefore is not a guarantee of 100 % conformity with requirements.

As a result of this stage 2 certification audit the audit team confirms that:

Total certified number of estates: 2

Total certified production area: 4,364.33 Ha

Projected Certified FFBs January to December 2018: 80,100 mt







6. RECOMMENDATION

The audit team conducted a process-based audit focussing on significant aspects/risks and objectives required by the standard(s). The audit methods used were interviews, observations, sampling of activities and review of documentation and records.

The structure of the audit was in accordance with the audit plan included in to this summary report as annex.

The audit team concludes that the organisation has established and maintained its management system in line with the requirements of the standard(s) and demonstrated the ability of the system to achieve requirements for products and/or services within the scope and the organisation’s policy and objectives.

Therefore, the audit team recommends that, based on the results of this audit and the system’s demonstrated state of development and maturity that this management system certification be

X Recommended for Certification

Recommended for Continuity of Certification

Recommended for Suspension of Certification

Subang Jaya, 16/04/2018

Subang Jaya, 16/04/2018


TUV NORD (Malaysia) Sdn Bhd

Audit Team Leader

Chong Chun Yuen, Robert

TUV NORD (Malaysia) Sdn Bhd

Certifier







7. REFERENCES

Table 7-1: Documents provided by Abedon Sdn. Bhd.

Client Reference Document

Sustainability Policy dated 02/01/2018

Occupational Safety and Health Policy dated 03/01/2017

Social Policy dated 03/01/2017

SOP Information procedure KHB-HR-P07 dated 01/06/2015

SOP New Information, Technique, Equipment, etc KHB/G/SOP-46 dated 04/10/2016

SOP on Communication and Consultation KHB-HR-P08 dated 01/06/2015

Internal Audit document for Kolopis Estate (08/01/2018) and Tanaki Estate (09/01/2018)

Management meeting minutes dated 15/12/2017 and 09/01/2018

Management Review dated 18/12/2017

Continuous Improvement Plan dated 31/07/2017

List of Documents and Transparency Status dated 09/06/2017

FFB records and weighbridge tickets from Kolopis Estate and Tanaki Estate.

Lists of Company and estates licenses.

Social Impact Assessment and Time Bound Plan Lahad Datu region dated May /June 2017

Complaint Procedure KHB-HR-P05 dated 01/06/2017

Grievance documents

Company Social Responsibility list 2017







Client Reference Document

Operational Safety Management Plan (OSMP) dated 01/10/2017

Environmental Management Plan , dated December 2017

Waste Management Plan dated December 2017

Baseline Biodiversity Assessment and Planning for Unplanted Area, Water Catchment area and Buffer Zone in KHB dated 10/01/2018

Table 7-2: Background investigation and assessment documents

Reference Document

Malaysian Sustainable Palm Oil Part 3: General Principles for Plantations and Organized Smallholders

MSPO Certification Scheme Doc. No: MPOB/MSPO/CS/01

ACB Documents : ACB-OPMC 1 - 4

Environmental Quality Act & Regulation –Act 127

Environmental Quality (Scheduled Wastes) Regulations 2005

Environmental Quality (Clean Air) Regulations1978

Factories and machinery Act,1967

Factories and machinery act with regulations – Act 139

Estate Hospital Assistance(registration)-Act 1965

Akta Keselamatan dan kesihatan Pekerjaan dan peraturan-peraturan-Akta 514

OSHA (Classification, labelling and Safety data Sheet of Hazardous Chemicals) Regulations 2013

Employment Act 1995

Employees Social Security Act 1969-Act 4 (Socso

Land Ordinance 1972 (Cap.68)

Workers Minimum Standards of Housing & amenities Act 1990 Act 446







Reference Document

Malaysian Palm Oil Board Act 1997-Act 582

Minimum Wage Order 2016

Wildlife Conservation Enactment 1997

Table 7-3: List Of Interviewed Persons And Stakeholders

No. Name Organisation / Function

1. Rio Peter Forest officer, Jabatan Perhutanan Sabah

2. Abdul Lasim Hj Jaafar Forest officer, Jabatan Perhutanan Sabah

3. Ahmad Latif Forest officer, Jabatan Perhutanan Sabah

4. Hj Rashid Bin Rajak Committee member, JKKKK Sri Tekala

5. Jeffry Cona Member, JKKKK Sri Tekala

6. Maimunah Bte Bakri Member, JKKKK Sri Tekala

7. Tai Ann Representative, Tai Ann Contractor

8. Azrul Bin Matnawi Representative, Wild Asia

9. Aloysius Jublee Intang Representative, Wild Asia

10. Romla Media Senior supervisor , Abedon Enviro Sdn. Bhd.

11. Ngo Key Look Representative, Sri Manjung Contractor

12. Valentine Abbie Representative, Chemsain Consultant

13. Rozer Patrick Representative, Chemsain Consultant







No. Name Organisation / Function

14. Rosie M. Officer, Pej. Imigresen Lahad Datu.

15. Saedah Lapo Perkebun Kecil, Kg. Paris 1

16. Mohd Mansor Bin Yahya Labour Officer, Jabatan Tenaga Kerja Sabah

17. Suriono Bin Sudirman Labour Officer, Jabatan Tenaga Kerja Sabah

18. Lo Nyuk Voo Representative, Lo Enterprise







Distribution / Confidentiality / Rights of ownership / Limitations / Responsibilities / Audit Objectives

This report is sent to the certification body or bodies, the members of the audit team and the audit representative of the organisation. All documents (such as this report) regarding the certification procedure are treated confidentially by the audit team and the certification body. This audit report remains the property of the certification body.

An audit is a procedure based on the principle of random sampling and cannot cover each detail of the management system. Therefore, nonconformities of weaknesses may still exist which were not expressly mentioned by the auditors in the final meeting or in the audit report.

The responsibility for continuous effective operation of the management system always rests solely with the audited and certified organisation. Salvo clause: The audit report will be left to the organisation at the end of the audit - subject to approval by the certification body. The independent release process may cause modifications or additions. In these cases a modified revision will be sent to the audited organisation.

The objective (goal) of the audit is to establish compliance of the management system of the aforementioned organization with the requirements of the aforementioned standard in order to achieve or maintain certification through an independent and accredited certification body. Identification of possibilities to improve the management system can also be a component of the audit and is considered simply to be an enhancement; it does not constitute consultancy or advice with regard to the management system.

Annex / Enclosures

Annex / corresponding audit documentation

P&C Audit Report / Checklist(s)

Audit Plan

Additional annexes, number

Malaysia Sustainable Palm Oil – MS 2530 Part 3 for Plantation and Organized Smallholders P & C Audit Report

Company Name: Abedon Sdn. Bhd. Client No: 92-044

Certifying Unit: Abedon Sdn. Bhd. Audit Type: Stage 2 Certification

MSPO-F05b / Rev 2 Page 1 of 72

Item Description

1. Company Name Abedon Sdn. Bhd.

2. Certifying Unit Abedon Sdn. Bhd.

3. Address 56 KM, Jalan Lahad Datu-Sandakan, 90200 Kinabatangan, Sabah.

4. Contact Tel: +6089-218 999 Fax: +6089-275 777 Website: http//.www.kretam.com

5 Location of plantation / estate

Lahad Datu, Sabah, Malaysia.

6 Geo Coordinates of plantation / estate

Kolopis Estate – N 05o17’ 52”, E 117

o 57’24”

Tanaki Estate – N 05o19’47” E 117

o56’18”

7 Contact Person Name: Mr Mohd Masran Bin Hamzah

Tel: +6089-218999 Mobile: +6089-218 999 Email: [email protected]

8 Date of Audit 22/01/2018 – 25/01/2018

9. Audit Team Members

Team Leader /LA Mohamad Norhisham Bin Mohd Salleh (Trainee Lead Auditor)

Auditor Member Ang Wai Sheng, Terence ; Leong Sak Kuan ; Zulhairi Bin Abu Hassan

Expert / Trainee / Observer Cheong Chun Yuen, Robert ; Nur Amanina Bte Zahir





Clause Principle & Criteria

Verification Guidance Guidelines Findings & Comments Conformity Yes / No

4.1 Principle 1 Management Commitment & responsibility

4.1.1 Criterion 1 Malaysian Sustainable Palm Oil (MSPO) Policy

4.1.1.1 Indicator 1 A policy for the implementation of MSPO shall be established

(MAJOR)

- Policy should be signed by top management (e.g. CEO, Plantation Director)

- Commitment towards a systematic approach to ensure sustainable production of palm oil

- Commitment towards sustainable development and continuous improvement

- Communicated to all employees

- Interview of personnel and stakeholders whether they are aware of the MSPO Policy and its implementation at the site

KHB has established Sustainable Policy dated 02/01/2018 sign by Chief Executive Officer for Kretam Group. The policy among other listed several important keys, example:

1. Commitment to follow the laws and regulations, that related to the certification principle and criteria of RSPO, ISCC and MSPO which will ensure future sustainability and continuous improvement.

2. Establishment of Good Agricultural Practices and Good Milling Practices for business sustainability.

Policy training has been conducted:

Kolopis Estate

Sustainability policy training conducted on 19/01/2018.

Tanaki Estate

Sustainability policy training conducted at Inobong Division 19/01/2018, Sg Segama Division on 31/01/2018.

Company policies was available at estates notice board and company website.

For Kolopis and Tanaki estates, interview on workers and stakeholders consultation demonstrate that they understand and aware on company policies.

Yes

4.1.1.2 Indicator 2 The policy shall also emphasize commitment to continual improvement.

(MAJOR)

The established Sustainable Policy includes continuous improvement as one of its commitment:

Commitment to follow the laws and regulations, that related to the certification principle and criteria of RSPO, ISCC and MSPO which will ensure future sustainability and continuous improvement

Interviews with workers and meeting with stakeholders has demonstrate that

Yes







they understand and aware on company policies.

4.1.2 Criterion 2 Internal Audit

4.1.2.1 Indicator 1 Internal audit shall be planned and conducted regularly to determine the strong and weak points and potential area for further improvement

(MAJOR)

- Frequency: Once a year

Internal audit has been conducted for both Kolopis and Tanaki Estate.

Second audit:

Kolopis Estate: 08/01/2018

Tanaki Estate: 09/01/2018

First audit:

Kolopis Estate: 13/12/2017

Tanaki Estate: 14/12/2017

Internal audit has covered both site verification and documentation verification.

SOP KHB/G/SOP-49 for Internal audit revision 04/10/2016 has been reviewed.

In point 5.1.1 “at least by Quarterly in every 12 months”.

Point 5.4 specify agreeing on finding and mutual agreed time frame to close within 60 days. In additional to this, the root cause, correction and corrective action shall be documented on the original form.

5.6 states a second verification to be conducted if it was found to be unsatisfactory on the first internal audit. The 2

nd verification was conducted as

per date mention in accordance to SOP.

6.0 flowchart indicates the internal audit process.

Internal audit was conducted by the below listed personnel. Training was provided on 09/12/2017.

Estates

Research and Environmental Protection Dept. Officer

Research and environmental Protection Dept. Officer

Yes







Head of research & environment protection

Secretary – SEM Dept.

GMP Admin Clerk

Bode Est. Clerk

4.1.2.2 Indicator 2 The internal audit procedures and audit results shall be documented and evaluated, followed by the identification of strengths and root causes of nonconformities, in order to implement the necessary corrective action

(MAJOR)

- Establish the audit procedures

- Root cause analysis on nonconformities

- Correction and corrective action on nonconformities

- Time frames for action to be taken

Internal audit findings stated in 4.1.2.1. Internal audit has specified the correction taken.

1st Internal Audits was conducted on 13/12/2017-14/12/2017 and verification

audit conducted on 08/01/2018-09/01/2018.

Kolopis estate

4.1.4.1 Training need analysis records/training matrix

Evaluation on effectiveness of the training

4.5.2.2 Fuel and Lubricant Requirement estimate

4.5.3.5 Location Map for Landfill

Distance landfill from house

4.7.1 Carbon stock Analysis-GHG evaluation report

Root cause and corrective action plan (refer above)

Root Cause Action plan

The document are in progress to be preparation and waiting confirmation from the HR, normally the document is prepared by the HR department

To follow up with HR DEPT, and to update the pending document as per MSPO required by 19/01/2018

The training form in progress and awaiting confirmation from HR department

To follow up with the HR department and to update the pending document as per MSPO

Yes







required by 19/01/2018

Document in place but no signature and date stated

To get the signature and stated date for the document by 12/01/2018


To get the signature and stated date for the document by 12/01/2018


To update the distance from the landfill to both housing Kolopis and Bumiwealth division in the map by 12/01/2018

The document in progress for calculations, it was late due to late data submission from respective estate

To submit the required data for GHG calculation for compilation by 19/01/2018

Tanaki Estate

4.1.4.1 Training Need Analysis record/training matrix

Evaluation on effectiveness of the training

4.5.2.2 Fuel and lubricant requirement estimate

4.5.3.5 Location maps for landfill

Distance landfill from housing

4.5.6 RTE flora and fauna monitoring

4.5.6.3 HCV training and briefing record

4.7.1 Carbon Stock Analysis – GHG evaluation

Root cause and corrective action plan (form above)

Document are in progress for preparation, waiting of confirmation from HR, normally the

To contact HR for sending the said documents on 19/01/2018 to comply







TNA is prepared by HR department.

with MSPO requirement

The document: training evaluation are in progress for preparation, waiting of confirmation from HR, normally the TNA.

The document is in place but need to put signature and date, the document had prepared but excluded signature and date

Send the document to EM for signature by 18/01/2018


Sent the document to EM for signature by 18/01/2018


Sent the document to EM for signature by 18/01/2018

The document is in place but need to update, the latest month

To update as per required by 19/01/2018

The document is in place but need to update, the latest month

To update as per required by 19/01/2018

The document is in progress for calculation, it was late due to late data submission from respective estate

To follow up the estate and submit all document by 18/01/2018

4.1.2.3 Indicator 3 Report shall be made available to the management for their review

(MAJOR)

Management review meeting for Lahad Datu Group conducted on 09/01/2018 and 15/12/2017 have been reviewed.

Meeting minutes include discussion on nonconformance and include new certification for MSPO.

“Estate Management Meeting” involved senior management staff conducted

Yes







on 17/01/2018.

Point 2.0.13 specify second internal audit verification – results. The management has mention to pay attention on all relevant documents that stated in progress for updating in second internal audit.

4.1.3 Criterion 3 Management Review

4.1.3.1 Indicator 1 The management shall periodically review the continuous suitability, adequacy and effectiveness of the requirements for effective implementation of MSPO and decide on any changes, improvement and modification

(MAJOR)

- Review by top management

- Frequency : once a year

- Input audit findings

- Decision on changes, improvement and modification

- Improvement Plan and timeline for implementation

Management review has been conducted on 18/12/2017.

The management has considered the MSPO certification in January 2018.

Topics include:

- PPE.

- FFB Grading.

- Estate Operation.

- Traceability.

- Fertilizer and chemical application.

- Pest and disease – Ganoderma treatment.

Second management meeting was conducted on 17/01/2018 and include the findings of second internal audit.

Among presented including:

1. Senior estate manager.

2. Estate Manager.

3. Estate Manager.

Improvement plan which include new and improve practices such as cattle grazing, FFB grading, FFB forecast and production. E.g.

5.1.4 Buffalo productivity

5.1.3 Harvester population, out-turn & harvesting interval.

5.2.0 Kolopis Estate Operation

Yes

4.1.4 Criterion 4 Continual Improvement







4.1.4.1 Indicator 1 The action plan for continual improvement shall be based on consideration of the main social and environmental impact and opportunities of the company

(MAJOR)

- Input (where available and applicable):

(Check on HIRARC to be one of the continual improvement indicators cause the HIRARC register is normally reviewed annually.)

Environmental and social impact

New techniques

New technologies

New standard

New information

- To establish a system to verify the validity or practicability of the new information and techniques before adoption.

- Continual improvement plan for key social and environmental impacts, implementation and monitoring

- Verification of the system in terms of the appropriateness & effectiveness

- Budget allocation for implementation of social, environmental activities/new technologies

Continuous Improvement Plan dated 31/07/2017.

The assessment has taken into consideration of both environmental and social impact.

Social

Improvement action Expected outcome

Employee Minimum Wages 2016 directive.

Implementation of new wages directive by the government.

Provide housing and other necessity for the employee.

Maintain and increase the living quality of the employee.

Providing education for the workers children (CLC).

Improved CLC facilities.

Environmental aspects

1. Plantation.

2. Pesticide.

3. Waste Reduction.

4. Pollution and emission.

Improvement action Expected outcome

Reduction in the use of pesticides. Reduce herbicide used by expanding the area of grazing for cattle.

Plastic Container reduction – Plastic bottle.

Adopt 3R concept, reduce, reuse, recycle.

Phasing out of Paraquat usage. To use MONEX HC as the alternative to obtain contact for class 3 chemical.

Yes

4.1.4.2 Indicator 2 The company shall establish a system to improve

SOP “New Information, Technique, Equipment Etc.,” revision date 04/10/2016 (KHB/G/SOP-46).

Yes







practices in line with new information and techniques or new industry standards and technology, where applicable, that are available and feasible for adoption

(MAJOR)

and their timeline

- Training programme to the relevant personnel involved in the implementation of new technology/techniques.

- Interview of personnel and stakeholders concerning for example:

- Good social practices of the company

- Response of the management towards social and environmental concerns by stakeholders

- Improvement plans that have benefitted the stakeholders

The SOP specify identification, valuation of new information and technique.

Responsible persons are estate manager, mill manager, assistant manager.

The flowchart includes new information may arise from supplier and proposal of product and will be handled by the respective manager.

4.1.4.3 Indicator 3 An action plan to provide the necessary resources including training, to implement the new techniques or new industry standard or technology (where applicable) shall be established

(MAJOR)

“Actual General Briefing / training for the year 2018” is reviewed.

Example of training / briefing

New information. technique, equipment and etc training will be conducted on 13/11/2018.

Yes

4.2 Principle 2 Transparency

4.2.1 Criterion 1 Transparency of information and documents relevant to MSPO requirements

4.2.1.1 Indicator 1 The management shall communicate the information requested by the relevant stakeholders in the appropriate languages and forms, except those limited by commercial

- Request, response and release of information must be recorded (refer to 4.2.2.3)

KHB Lahad Datu has established SOP on Information Procedure KHB-HR-P07, dated 01/06/2015. The SOP on Information is available at the notice board of each estate.

Kolopis Estate

Estate has established the request for information book. There is no request of information sighted on records.

Yes







confidentiality or disclosure that could result in negative environmental or social outcomes.

(MAJOR)

Tanaki Estate

Estate has established the request for information book. There is no request of information sighted on records.

Interviews with workers for both estates demonstrate they understand and aware of information, which they can obtain from the notice boards

Estates:

Manager / supervisor, Director are responsible for providing & updating information.

Timeframe for each step is stated. Example 15 days for non-confidential information.

Procedures are available on notice board located at office, compound and school.

During site interview, the sampled workers are aware of the policy.

Estates:

List of stakeholders prepared by Senior Assistant Manager dated 08/06/2017 and approved by Senior Estate Manager.

Example List of stakeholders by category:

Authorities (Government) – Jabatan Haiwan.

NGO’s – WWF Malaysia Sabah.

Ketua Kampung – JKKKK Kg Paris.

School – SMK Paris Kinabatangan.

Neighbours (Other Plantations) – Genting Plantation.

Collection centre – Polyprestige Sdn Bhd.

Esterna; stakeholder contractor – Lo Enterprise.

Suppliers – LM Tractor Parts Sdn Bhd.

4.2.1.2 Indicator 2 Management documents shall be publicly available,

- For public listed companies annual report is accepted

KHB has established List of Documents and Transparency Status dated 09/06/2017.

Yes







except where this is prevented by commercial confidentiality or where disclosure of information would result in negative environmental or social outcomes

(MAJOR)

Examples of available document are:

1. Copy of land title, estate map and type of soils.

2. Group Social Impact Assessment, May /June 2017.

3. Group Environmental Impact Assessment, December 2017.

4. List of Group Policies such as: Sustainability Policy dated 02/01/2018 and Human Right Policy dated 03/01/2017.

5. Group Continual Improvement Plan.

6. Occupational Health & Safety plans.

7. Company main & sub policies.

4.2.2 Criterion 2 Transparent method of communication and consultation

4.2.2.1 Indicator 1 Procedures shall be established for consultation and communication with the relevant stakeholders

(MAJOR)

- Established procedure include internal and external stakeholders

- The procedure should include FPIC process

KHB Lahad Datu has established Communication and Consultation Procedure. Revision number: 0 KHB-HR-P08 dated 01/06/2015.

The procedure stated

1. Person in -charge for communication for estate level, Estate Manger / Senior Estate Manager (SEM) / Chief Plantation Officer(CPO).

2. Procedure details which mention on involvement of local communities and other affected or interested parties.

Flow chart has been established on the consultation and communication process. The flow chart is available at notice board for Kolopis and Tanaki Estate.

SOP Consultation and Communication Procedure (KHB-HR-P08) dated 01/06/2015 includes communication methods, issues / request from internal and external stakeholders.

Information is disseminated through Bulletin, website, meeting, training / talk / awareness.

Yes







4.2.2.2 Indicator 2 A management official should be nominated to be responsible for issues related to Indicator 1 at each operating unit

(MINOR)

- Companies discretion on whom to nominate

- Appointment letter for responsible person

Kolopis Estate

Person in charge for consultation and communication was

1) Estate Manager.

The appointment letter sighted dated 01/03/2017 signed by Group Director for the period of 01/03/2017 to 28/02/2020.

2) Assistant Manager, appointment letter dated 01/03/2017 signed by, Kolopis Estate Manager.

Tanaki Estate

Person in charge for consultation and communication was:

1) Estate Manager, Appointment letter signed by, Group Director.

Yes

4.2.2.3 Indicator 3 List of stakeholders, records of all consultation and communication and records of action taken in response to input from stakeholders should be properly maintained.

(MAJOR)

- Review records

- Lists of stakeholders

- Surrounding communities

- Employees

- Interview with personnel and stakeholders concerning for example:

Awareness of consultation and communication procedures

Availability of management response with regards to their requests /complaints( if applicable)

The company has established list of stakeholders dated 08/06/2017. Example stakeholders Included in the list:

1) Authority.

2) NGOs.

3) Supplier.

4) Internal stakeholders.

Kolopis and Tanaki Estate

Stakeholders meeting was conducted at group level of Lahad Datu region.

Latest Group Stakeholder meeting was held on 24/07/2017.

Example stakeholders attended Jabatan Bomba, Borneo Elephant Sanctuary, Sekolah Kebangsaan Paris, Kinabatangan, Genting Plantation, Tai Ann contractors, Wild Asia and several workers’ representative.

Example of issue discuss:

Organisation: Kwantas Oil Mill Sdn Bhd,

Question, Representative form Kwantas Oil Mill requesting notification from KHB Lahad Datu region to inform them once Abedon received RSPO Certification.

Yes







Answer: Human Resource Manager responded that KHB Lahad Datu region will be audited in August 2017 and further information will be updated at company website.

4.2.3 Criterion 3 Traceability

4.2.3.1 Indicator 1 The management shall establish, implement and maintain a standard operating procedure to comply with the requirements for traceability of the relevant product(s).

(MAJOR)

- SOP to verify. Kolopis / Tanaki Estate

Traceability Doc no KHB/G/SOP-57 Effective date 01/12/2017 signed by Chief Plantation Officer (CPO) includes a flow chart.

The t traceability information required on crop production:

Harvester marking on bunches stalks.

FFB records from field checker.

FFB transportation and tonnages (weighbridge tickets).

FFB records from individual fields.

FFB-estate crop production summary.

Yes

4.2.3.2 Indicator 2 The management shall conduct regular inspections on compliance with the established traceability system.

(MAJOR)

- Internal audit MSPO internal audit conducted at Kolopis estate on 13/12/2017 and Tanaki estate on 14/12/2017 includes inspection of the traceability system.

Yes

4.2.3.3 Indicator 3 The management should identify and assign suitable employees to implement and maintain the traceability system.

(MINOR)

- Appointment of employees

- Appointment letters are required

Kolopis Estate

The management has appointed for the implementation and maintain the traceability system are Office Staffs, office clerk. the appointment letter dated 06/01/2018 signed by estate manager.

Tanaki Estate

The management has appointed Estate Assistant Manager dated 01/12/2017 to implement and maintain the traceability system.

Yes

4.2.3.4 Indicator 4 Records of sales, delivery or transportation of FFB shall

- Hard or soft copy are both acceptable.

Kolopis Estate Yes







be maintained.

(MAJOR)

The estate maintains records of FFB bunches from the harvesters until mill. Each estate maintains the records by harvesting staff. Records were viewed with bunch chits, laporan harian buah penuai, delivery notes, weighbridge tickets and MPOB daily FFB records by block.

Example:

Kolopis division

Bunch Chit

Estate / division: Kolopis

Haribulan: 16/01/2018

Blok: 10/8

Jumlah tandan: 12

Oil Palm FFB delivery Docket

No: 73537

Date: 16/01/2018

Weighbridge ticket by Abedon Mill Sdn Bhd

Ticket no: 043833

DO No: 73537

Date: 16/01/2018

Weight: 8.63 mt

Tanaki Estate

Inobong division

Bunch Chit

Estate / division: Inobong

Haribulan: 21/12/2017

Blok: 26

Jumlah tandan: 133







Oil Palm FFB delivery Docket

No: 24199

Date: 21/12/2017

Weighbridge ticket by Abedon Mill Sdn Bhd

Ticket no: 041834

DO No: 24199

Date: 21/12/2017

Weight: 10.99 mt

Traceability of FFB has been cross check and review sample of every estate and each division.

4.3 Principle 3 Compliance to legal requirements

4.3.1 Criterion 1 Regulatory requirements

4.3.1.1 Indicator 1 All operations are in compliance with the applicable local, state, national and ratified international laws and regulations

(MAJOR)

- Assessment of documents. Kolopis Estate

Lesen Niaga

No pemohon: 624/2018 (KBTG/2018/624)

Tamat Tempoh: 31/12/2018

MPOB License

No Lesen: 502212902000

Duration: 01/12/2017 – 30/11/2018

Nursery License:

No Lesen: 577406011000

Validity: 01/10/2017 – 30/09/2018

Tanaki Estate

Lesen Niaga

Yes







No pemohon: 624/2018 (KBTG/2018/624)

Tamat Tempoh: 31/12/2018

MPOB License

No Lesen: 502212902000

Duration: 01/12/2017 – 30/11/2018

Nursery License:

No Lesen: 577406011000

Validity: 01/10/2017 – 30/09/2018

4.3.1.2 Indicator 2 The management shall list all laws applicable to their operations in a legal requirements register.

(MAJOR)

- Individual company to list down all relevant laws to oil palm industries.

Kolopis estate

“List of Laws Regulation and Guidelines Description” was reviewed

Total of 92 laws and regulations listed in the document

For example:

1. National Land Code 1965.

2. Sabah Land Rule 1930.

3. Environment quality 1977.

4. Employment Act.

Tanaki estate

“Related Laws, Regulation and guideline” was reviewed

Total of 92 law and regulation listed in the document.

For example:

1. Pesticides Act 1974.

2. Factories and Machineries Act 1967.

3. Environmental Quality Act 1974.

4. Road Transport Act 1987.

5. Minimum wages order 2016.

Yes







6. Sales Tax Act 1975

4.3.1.3 Indicator 3 The legal requirements register shall be updated as and when there are any new amendments or any new regulations coming into force.

(MAJOR)

- Updating and document review, and compliance.

- Suggest to add compliance ‘status’.

Kolopis & Tanaki estate

SOP “Mechanism for Implementation of Legal Requirement and System for Tracking Changes in The Law” revision 04/10/2016 (KHB/G/SOP-36)

Flow Chart “Mechanism of tracking changes in the law” was reviewed.

The SOP specify that changes arise from :

1. News release through daily newspaper.

2. Law changes by government published material.

3. Circular from relevant government agencies, association.

4. Information from within the management unit and relevant department.

This will be then transfer to respective person in charge.

Employment Act was updated with the minimum wages order 2016 and levy deduction 2018 “Levi Pekerja Asing Ditanggung Sepenuhnya Oleh Majikan Mulai 01/01/2018” was sighted.

Memo on the levy matter was sent on 24/01/2018 from Sustainability manager to all estates and mill managers. The memo states “Therefore, please discontinue levy deduction for all foreign workers within Kretam Holdings Berhad Group with effect from 1

st January 2018”

Yes

4.3.1.4 Indicator 4 The management should assign a person responsible to monitor compliance and to track and update the changes in regulatory requirements.

(MINOR)

- Name of appointee and letter of appointment.

Tanaki and Kolopis estate

SOP “Mechanism for Implementation of Legal Requirement and System for Tracking Changes in The Law” revision 04/10/2016.

Sustainability manager is in charge for any changes and distribute to the respective managers.

Yes

4.3.2 Criterion 2 Land use rights

4.3.2.1 Indicator 1 The management shall ensure that their oil palm

Verification of land use rights by means of official/legal

Tanaki and Kolopis Estate Yes







cultivation activities do not diminish the land use rights of other users.

(MAJOR)

documents. The following documents are accepted:

- Land title and terms and conditions

- Provisional Lease (PL) / License for Planted Forest (LPF) (for Sarawak)

- Lease Agreement.

- Quit rent paid by the holding .company (if applicable).

- Perimeter survey map containing boundary markers.

- Records of disputes and resolution process.

- Records of agreements/legal documents between the previous owners and occupants.

Visual inspection of for example:

- Legal perimeter boundary markers.

The land titles were reviewed, which indicates that the land use is for the oil palm plantation. There is no land use right diminish by Abedon group.

Land titles for Abedon group have been verified.

4.3.2.2 Indicator 2 The management shall provide documents showing legal ownership or lease, history of land tenure and the actual use of the land.

(MAJOR)

Kolopis estate

Land area of 2,489.86 Ha was verified against land titles.

2 divisions o stated below:

Kolopis CL095315236 1,276.86 ha

Bumiwealth CL095315192 1,213 ha

Tanaki Estate

Tanaki CL095315236 1,555.14ha

Inabong CL095313607 202.00ha

CL095313741 404.60ha

CL095316144 20.42ha

CL095316153 20.37ha

CL095316162 20.12ha

CL095316171 20.36ha

CL095316180 20.20ha

CL095316199 20.41ha

CL095316206 20.43ha

CL095316215 20.37ha

CL095316224 20.18ha

Segama CL115337776 202.59ha

CL115333803 6.41ha

CL115333849 5.96ha

Yes







CL115333858 5.70ha

CL115335512 40.51ha

CL115330524 22.26ha

4.3.2.3 Indicator 3 Legal perimeter boundary markers should be clearly demarcated and visibly maintained on the ground where practicable.

(MAJOR)

Kolopis Estate

Legal perimeter boundaries were verified in the field. All markers could be identified, and GPS coordinate were captured.

Example:

K.5 5˚20’13” N; 117˚58’41”E

K.6 5˚20’18” N; 117˚58’40”E

Document review on all the sites boundary markers verified as below

K1 5˚17’37.5” N, 117˚57’38.5”E

K2 5˚17’45.1” N, 117˚57’51.3”E

K3 5˚17’47.3” N, 117˚57’55.2”E

K4 5˚18’11.0” N, 117˚58’36.8”E

K5 5˚20’03.6” N, 117˚53’44.5”E

K6 5˚20’18.2” N, 117˚58’40.2”E

K7 5˚18’49.9” N, 117˚57’19.1”E

K8 5˚18’20.5” N, 117˚55’33.9”E

K9 5˚17’59.5” N, 117˚55’09.9”E

K10 5˚17’01.9” N, 117˚55’31.6”E

K11 5˚16’41.6” N, 117˚55’39.6”E

K12 5˚16’59.7” N, 117˚55’54.8”E

K13 5˚19’04.9” N, 117˚59’21.1”E

T2 5˚19’13.1” N, 117˚56’55.6”E

Yes







T3 5˚19’05.9” N, 117˚55’33.8”E

Tanaki Estate

GPS coordinates were captured.

Example:

I06 5˚22’45” N, 117˚55’20”E

T4 5˚20’44” N, 117˚55’01”E

Document review on all the sites boundary markers verified as below:

Inabong Division

I01 5˚23’02.5” N 117˚54’07.3”E

I02 5˚23’06.6” N 117˚54’15.0”E

I03 5˚23’38.9” N 117˚53’18.8”E

I04 5˚22’17.5” N 117˚53’42.1”E

I05 5˚22’56.1” N 117˚54’34.6”E

I06 5˚22’46.3” N 117˚55’20.3”E

Tanaki Division

T1 5˚20’07.5” N 117˚58’03.9”E

T2 5˚19’05.9” N 117˚56’55.6”E

T3 5˚19’43.3” N 117˚55’31.7”E

T4 5˚20’44.9” N 117˚55’01.7”E

T5 5˚21’12.4” N 117˚57’47.2”E

T6 5˚21’12.1” N 117˚58’03.5”E

T7 5˚21’02.8” N 117˚57’06.5”E

T8 5˚20’33.9” N 117˚58’17.6”E

4.3.2.4 Indicator 4 Where there are, or have It has been confirmed by the stakeholders attended the stakeholders meeting Yes







been, disputes, documented proof of legal acquisition of land title and fair compensation that have been or are being made to previous owners and occupants; shall be made available and that these should have been accepted with free prior informed consent (FPIC).

(MINOR)

dated 22/01/2018 conformed there are no disputes as regards to land and boundary between them and the company.

4.3.3 Criterion 3 Customary rights

4.3.3.1 Indicator 1 Where lands are encumbered by customary rights, the company shall demonstrate that these rights are understood and are not being threatened or reduced.

(MAJOR)

- Provisional Lease (PL) and License for Planted Forest (LPF).

- Records of Ex-gratia / Goodwill Payment and Agreement.

- Konsep baru for Sarawak 1956 – cut-off date.

- Refer to 4.7.6

Kolopis Estate

There is no customary land within the units of Abedon group.

Boundary markers selected k5 and k6 blocks were neighboring with smallholder plot. There is no restriction for smallholders to access to their land through the estate roads.

Tanaki Estate

Estate was bordering with other major growers such as Genting plantation, Pasir Citra and Tung Hup.

Yes

4.3.3.2 Indicator 2 Maps of an appropriate scale showing extent of recognized customary rights shall be made available

(MAJOR)

- Official maps from Land Survey for recognized customary rights is made available.


Maps are available for reviewed. However, there is no customary land observed.

Yes

4.3.3.3 Indicator 3 Negotiation and FPIC shall be recorded and copies of negotiated agreements should be made available.

- Records of negotiated agreements.


The land title of Abedon group of estates are CL titles, therefore no FPIC and negotiation required.

Yes







(MAJOR) Kolopis: 1988

Tanaki: 1986

4.4 Principle 4 Social Responsibility, health, safety and employment conditions

4.4.1 Criterion 1 Social impact assessment (SIA)

4.4.1.1 Indicator 1 Social impacts should be identified and plans are implemented to mitigate the negative impacts and promote the positive ones.

(MINOR)

- Social impact assessment can be conducted internally.

KHB has established Social Impact Assessment and time bound plan for Lahad Datu Region 2017 on May / June 2017. The assessment was on 21/12/2017 and next review will be in December 2018. The SIA was prepared by senior assistant manager utility, checked by Senior Estate Manager, Lahad Datu Region and certified by Chief Plantation Officer.

Example of issue sighted:

1) Positive impact:

Social implication

Working facilities and workplace comfort was satisfaction.

Action plan: On going improvement will be enhance n estate long term plan.

Responsibility; Estate management.

2) Negative impact:

Social implication: Housing located far from work place.

Long term plan will be carry out in stages and any problem arise can be forwarded to:

Responsibility: Estate Management

Time frame: 3 months.

Yes

4.4.2 Criterion 2 Complaints and grievances







4.4.2.1 Indicator 1 A system for dealing with complaints and grievances shall be established and documented.

(MAJOR)

Assessment of internal documents, for example:

Availability of complaints form for employees and affected stakeholders

Records of complaints and records of actions taken

Records that are kept for the last 24 months

Interview with personnel and stakeholders concerning for example:

Awareness of complaints and grievances procedures and how to lodge complaints

Verify if the complaints and grievances by the affected parties are resolved in an effective, timely and appropriate manner.

Complaints Procedure has been established, document number KHB-HR-P05 revision number 1 dated 01/06/2017 approved by Director

Under the Complaint Procedure, page 5, the complaint and grievance flow chart state the complaint must be address within 30 working days. The company has established boring aduan /rungutan KHB-HR-P05/F01 dated 01/06/2017 and borang rayuan KHB-HR-P05/F02 dated 01/06/2017.

Complaint procedure was available in bilanguage, Malay and English and displayed on notice boards for both Kolopis and Tanaki Estates.

Site interview with field workers at Tanaki and Kolopis estate indicates that they understand the mechanism available for them to make their complaint or grievance. They are aware of the form, where to obtain and who to approach if they need assistant. They confirmed that they are not suppressed by anyone in the management from making any complaint or grievance.

Yes

4.4.2.2 Indicator 2 The system shall be able to resolve disputes in an effective, timely and appropriate manner that is accepted by all parties.

(MAJOR)

Kolopis Estate

Kolopis estate has established borang aduan and rungutan. The forms were made available at following site:Main gate (external)

Last inspection of records on 20/01/2018. No query recorded.

- Kolopis estate (internal)

Last inspection of records on 20/01/2018. No queries recorded.

Tanaki Estate

The estate has established the record for complaint and grievances by division basis Inobong, Tanaki and Sg. Segama.

Complaint and grievance for contractors

Buku Laporan peti aduan

Buku aduan /rungutan / rayuan

Buku Laporan ganguan seksual

There was no record of grievance recorded in the estate.

Yes







4.4.2.3 Indicator 3 A complaint form should be made available at the premises, where

employees and affected stakeholders can make a complaint.

(MINOR)

The company has established boring aduan /rungutan KHB-HR-P05/F01 dated 01/06/2017 and boring rayuan KHB-HR-P05/F02 dated 01/06/2017.


Both forms ( Borang aduan and Borang Rayuan) are available at the office and guard house.

Yes

4.4.2.4 Indicator 4 Employees and the surrounding communities should be made aware that complaints or suggestions can be made any time.

(MINOR)

Kolopis Estate

Interview with stakeholders and workers demonstrate that they understand the complaint procedure.

Complaint procedure training was conducted on 04/08/2017 which involved all level of workers.

Tanaki Estate

Interview with the stakeholders and workers demonstrate that they understand the complaint procedure.

Complaint procedure training was conducted on 02/08/2017 which involved all level of workers.

Yes

4.4.2.5 Indicator 5 Complaints and resolutions for the last 24 months shall be documented and made available to affected stakeholders upon request

(MAJOR)

Kolopis Estate

Record for year 2017 were reviewed and found no complaints or grievance lodged.

Tanaki Estate

Record for year 2017 were reviewed and found no complaints or grievance lodged.

Yes

4.4.3 Criterion 3 Commitment to local sustainable development

4.4.3.1 Indicator 1 Growers should contribute to local development in consultation with the local

- Positive impacts of SIA – extended (or communicated) to

KHB has established Group Level CSR for Lahad Datu Region. List of CSR that has been provided within 2017 was:

Yes







communities

(MINOR)

surrounding communities 1. Donation to Mouth & Foot Painting Artists Sdn Bhd.

2. Donation to Sabah Society for the Blind.

3. Donation to Persatuan Bagi Mencegah Penyakit TB Malaysia.

4. Providing support and donation to SMK Paris for kejohanan Olahraga Tahunan.

4.4.4 Criterion 4 Employees safety and health

4.4.4.1 Indicator 1 An occupational safety and health policy and plan shall be documented, effectively communicated and implemented.

(MAJOR)

- Endorsed by the current top management

- OSH Act 1994 and Factory and Machinery Act 1967(Act139).

KHB has established Organization safety and Health Policy dated 03/01/2017 sign by Group Chief Executive Officer.

There are SOPs available for each work activity which include safety precaution in working environment.

Example:

Chemical handling SOP document no. KHB/G/SO-13, rev.3, dated 04/10/2016

Harvesting SOP document no. KHB/G/SOP-26/S&H-04, rev.2, dated 03/11/2016.

Training:

Kolopis Estate

Policies training has been conducted on 19/01/2018.

Tanaki Estate

Policies training has been conducted at Inobong Division 19/01/2018, Sg Segama Division 31/01/2018.

Interviews with workers on site for both estates demonstrate that they are aware of their safety, understand the usage of PPE, first aid, any possible hazard and how to overcome such hazard in workplace.

Yes

4.4.4.2 Indicator 2 The occupational safety and health plan shall cover the following:

(MAJOR)







a) A safety and health policy, which is communicated and implemented.

- Policy display – understandable language

- Records of: Quarterly Meeting / Morning briefing

Kolopis / Tanaki Estates

Verified on understanding of policy for Water treatment plant attendant, workshop technician, chemical mixer at Kolopis estate and chemical mixer and storekeeper for Tanaki estate.

Yes

b) The risks of all operations shall be assessed and documented

- Verify risk assessment report e.g HIRARC

KHB has established Operational Safety Management Plan (OSMP). dated 01/10/2017 and revised on 03/01/2018. It covered 50 different work areas for hazard identification.

Example:

Transporting of worker.

Scout harvesting.

buffalo grazing and health condition.

clinic.

Kolopis / Tanaki estates:

HIRARC risk assessment dated 29/08/2017.

High risks – cutting of bunch stalks, harvesting near power lines, transporting of workers, fire outbreak, etc. Controls established for mitigation.

HIRAC have been updated to include activity on the multiple storage during the transfer of chemical.

HIRARC latest revised on 24/01/2018.

Working activities: unloading / moving chemical substances on store stacks.

Hazard identification: Fall from elevated storage stacks.

Potential hazard: Body injury due to fall.

Person in charge: Estate staff.

Yes

c) An awareness and training programme which includes the following requirements for employees

- Yearly training plan and programme include safety aspects

Yes







exposed to pesticides: - Training and records of individuals

- Material Safety Data Sheet (MSDS) / Chemical Safety Data Sheet (CSDS) and label

i. all employees involved shall be adequately trained on safe working practices; and

Workers have been provided with relevant trainings depending on the job and nature of work.

Example:

Kolopis Estate

Safety aspects, PPE and work procedure briefing for harvesters conducted on 16/01/2018.

Chemical Handling and Storage and Management of Chemical Substances in Store) dated 29/11/2017 was conducted.

Tanaki Estate

Safety and Health Briefing for harvester dated 27/01/2017, 02/02/2017 and 02/02/2017 for Tanaki, Inobong and Segama division respectively. attendance list was reviewed.

Safety, chemical risks, emergency response, PPE and work procedure for sprayer was conducted on 15/09/2017. Attendance lists recorded for 15 sprayers was reviewed.

Yes

ii. all precautions attached to products shall be properly observed and applied


MSDS is placed at work area for chemicals and fertilizers.

Reviewed precautions measures attached to the products, e.g. washing when in contact, disposal method, etc.,

Yes

d) The management shall provide the appropriate personal protective equipment (PPE) at the place of work to cover all potentially hazardous operations as identified in the risk assessment and control such as Hazard

- Appropriate Personal Protective Equipment (PPE)


Proper PPE provided for chemical mixing, chemical storage and water treatment plant operators – mask, overalls, goggles, gloves and gumboots

Site inspection observed all sprayers and harvesters understand the usages for each PPE provided. They are able to demonstrate the correct way of wearing the PPE. When interview further, they confirmed that the PPE was provided free of charge to all workers handling chemical and hazardous work

Yes







Identification, Risk Assessment and Risk Control (HIRARC)

e) The management shall establish Standard Operating Procedure for handling of chemicals to ensure proper and safe handling and storage in accordance to Occupational Safety Health (Classification Packaging and Labelling) Regulation 1997 and Occupational Safety Health (Use and Standard of Exposure of Chemical Hazardous to Health) Regulation 2000.

- SOP

- Storage facilities for PPP and fertilizers

- Check on the compliance To CHRA requirement and Chemical Safety Requirement


Chemical handling SOP no. KHB/G/SO-13, rev.3, 04/10/2016.

Chemical storing SOP no. KHB/G/SOP-16, rev.3, 04/10/2016.

Chemicals are stored adequately on shelves and labelled and protected from the environment. Adequate PPP is stored at PPP boxes.

MSDS are posted at work area. Sighted for glyphosate, amine, Rhizagold, rock phosphate, Agroblen and NPK.

Latest CHRA conducted in April 2013. Report by Klinik Mansor S/B. Next

CHRA by April 2018 in accordance to Use and Standard of Exposure

Chemical Hazardous to Health Regulations 2000.

Yes

f) The management shall appoint responsible person(s) for workers' safety and health. The appointed person(s) of trust must have knowledge and access to latest national regulations and collective agreements

- Appointment letter.

- OSH committee members. Kolopis Estate

Person in charge for safety and health is Estate Manager. Sighted appointment letter dated 02/01/2018 signed by Senior Estate Manager and confirmed by Chief Plantation Officer. The job description includes planning and coordinate safety and health, intermediary between estate and DOSH and develop awareness to workers.

Tanaki estates:

Estate manager, appointment letter as estate safety and health chairman dated 02/01/2018, approved by Chief Plantation Officer.

Yes

g) The management shall conduct regular two-way communication with their employees where issues affecting their business such

- OSH committee meeting – minimum 4 times a year (OSH Act)

- Members representing all categories

Kolopis Estate

Estate has conducted Safety and Health meeting latest on 27/12/2017 which involved wakil majikan, wakil pekerja and wakil kontraktor, Previous safety and health meeting was conducted on 18/09/2017, 04/07/2017, and 30/03/2017.

Yes







as employee's health, safety and welfare are discussed openly.

- Records of : Agenda / Minutes and attendance

Tanaki estate:

OSH meeting conducted quarterly. Latest meeting conducted on 18/12/2017 – safety awareness when using motorbike and wearing of helmets, adequate PPE for all workers, inspection of road conditions before terracing works, no accidents reported for the past quarter, etc. Minutes and attendance recorded.

h) Accident and emergency procedures shall exist and instructions shall be clearly understood by all employees

- Accident and emergency procedures

- Records of OSHA Accident and Investigation

Kolopis Estate

Emergency procedure SOP “emergency plan procedure” – KHB/G/SOP-26/S&H dated revision 03/11/2016.

Emergency plan training conducted on 20/10/2017.

Emergency drill was conducted to ensure understanding.

Accident records were reviewed that include proper description of the accident was captured in the form.

Tanaki Estate

Emergency plan procedure, KHB/G/SOP-26/S&H-36, rev.1, dated 06/01/2016.

Fire drill conducted for Tanaki estate (housing PH6) dated 17/10/2017. Total evacuation in 2 min 39 sec. Report and attendance recorded.

Yes

i) Employees trained in First Aid should be present at all field operations. A First Aid Kit equipped with approved contents should be available at each worksite

- Records of First Aid Training

- First Aid Kit for external used must be checked

- Guidelines on First Aid in The Workplaces

Kolopis Estate

First aid training conducted on 01-02/11/2017.

First Aid kit was reviewed. The first aid kit was last inspected on 05/01/2018.

Site verification show all first aid kits provided are as per list required by KHB. None of the medication were expired.

Tanaki Estate

Verified adequacy of first aid kits at workshop, store, gen-set and water treatment plant.

Yes

j) Records shall be kept of all accidents and be reviewed periodically at quarterly intervals

- Accident records

- Review during OSH committee meeting

Kolopis Estate

OSHA Committee meeting minute dated 27/12/2017.

Yes







Accident happen in any work area was covered in the meeting minutes.

For example

Worker Age: 39

Division: Kolopis

Location: KM116 Paris 1 Kinabatangan.

Type of injury: minor injury

Worker Age: 22 years

Job: Harvested

Division: Bumuwealth

Location: Phase 10 / Block 18

Type of injury: Laceration and Thorn Prick (Body and finger)

Factor causing injury: Heavy Object

Day lost: 2

Type of accident: Accident at work

Tanaki estate:

Accident records were reviewed on quarterly basis in OSH meeting.

Latest accident report dated 30/12/2017 for (harvester, head injury on motorbike due to collision with falling frond. Root cause and corrective action recorded.

4.4.5 Criterion 5 Employment Conditions

4.4.5.1 Indicator 1 The management shall establish policy on good social practices regarding human rights in respect of industrial harmony. The policy shall be signed by the top management and effectively communicated to

- Social Policy (in understand language)

The company has established Social Policy dated 03/01/2017 and sign by Chief Executive Officer

Policy training has been conducted as below:

Kolopis Estate

Sustainability policy training was conducted on 19/01/2018.

Tanaki Estate

Yes







the employees.

(MAJOR)

Sustainability policy training was conducted at Inobong Division on 19/01/2018, Sg Segama Division on 31/01/2018.

4.4.5.2 Indicator 2 The management shall not engage in or support discriminatory practices and shall provide equal opportunity and treatment regardless of race, colour, sex, religion, political opinion, nationality, social origin or any other distinguishing characteristics

(MAJOR)

- Equal opportunity statement by the top management

- Interview the workers

KHB company has established Social Policy dated 03/01/2017 and sign by Chief Executive Officer.

During the site interview from both estates (Kolopis and Tanaki Estate), the sampled workers informed that there has not been any discrimination in the work place. They mention that they are not discriminated and treated fairly.

Interview with female worker confirmed no sexual harassment ever occur in their workplace. There was no sexual discrimination at Abedon group of estates.

Yes

4.4.5.3 Indicator 3 Management shall ensure that employees’ pay and conditions meet legal or industry minimum standards and as per agreed Collective Agreements. The living wage should be sufficient to meet basic needs and provide some discretionary income based on minimum wage.

(MAJOR)

- Compliance to Minimum Wage Act 2012 (Mandatory).

- Absence of complaints of employee.

- Refer to payroll or pay slip.

Kolopis Estate

Payment list for 21/12/ 2017 (Ladang Kolopis and Ladang Bumiwealth has been sighted)

Example of pay slips:

1) Mandor, Bumiwealth Division

Income (RM)

Deduction (RM)

Daily 849.60

Holiday 35.40

Overtime 354.08

Other pay-EPF 10.46

EPF 99.00

Socso 6.25

Others* 5.37

Net Pay 1,138.92

Yes







*Sighted deduction for tools under mandor and acknowledgement with thumb print. Deduction was recorded under Estate Workers Store Account -December 2017.

2) General worker (Kolopis Division)

Income (RM)

Deduction (RM)

Daily 35.40

Harvesting 1,334.26

Holiday 35.40

Shop 50.00

Levy recovery 56.25

Net Pay 1,298.81

Tanaki Estate

Example of payslips:

1) sprayer, Division Sg. Segama.

Income (RM)

Deduction (RM)

Daily 885.00

Holiday 35.40

Overtime 318.72

Levy recovery 56.25

Net Pay 1,182.87

2) sprayer Division Sg. Segama.

Income (RM)

Deduction (RM)







Daily 424.80

Contract 291.31

Holiday 35.40

Overtime 234.60

Levy recovery 56.25

Net Pay 929.86

Sighted Permit Potongan Gaji issued by Jabatan Tenaga Kerja for Kertam Holdings Bhd. dated 08/02/2017.

List of allowable deduction;

1. Bayaran Pemprosesan Document Perjalanan.

2. Pembelian Barangan runcit.

3. Pinjaman pembelian motorsikal.

Starting from January 2018 company circulate memo regarding the discontinuation of levy deduction for foreign workers dated 24/01/2018. The letter was sign by Head of Human Resource and Sustainability, Kretam Holding Bhd to all the head of departments.

4.4.5.4 Indicator 4 Management should ensure employees of contractors are paid based on legal or industry minimum standards according to the employment contract agreed between the contractor and his employee.

(MAJOR)

- Records of payment by company to the contractors.

- Agreement between the management and contractors.

Kolopis Estate

Contract agreement in between Kolopis Estate and Santa Jaya dated 20/12/2017 for road maintenance.

Sighted List of workers for Santa Jaya Kontraktor;

Excavator Operator wage rate of RM9.30/hours for 8 hours per day work.

Tanaki Estate

Contract agreement in between Tanaki Estate and Pemborong Tetap Hasil dated 01/03/2017 for transporting FFB from Sg. Segama Divison to Abedon Palm Oil Mil.

Sighted payment voucher for contractor’s worker dated 03/07/2017 with sum of RM 2, 297.65. It was above the minimum wages for Sabah based on

Yes







Minimum Wage Order 2016.

4.4.5.5 Indicator 5 The management shall establish records that provide an accurate account of all employees (including seasonal workers and subcontracted workers on the premises). The records should contain full names, gender, date of birth, date of entry, a job description, wage and the period of employment.

(MAJOR)

- Employee registration details.

KHB has established the list of workers which was kept on the respective estates and updated accordingly. The list of workers contains all applicable information’s of their present job description.

Kolopis Estate

Personal Records for January 2018 Kolopis division total number of workers 92 Bumiwealth division total number of workers 94.

Tanaki Estate

Estate has established List of Name of workers for January 2018.

For Tanaki Division number of workers 113, Sg. Segama division number of workers 14 and Inobong division, number of workers 50.

Yes

4.4.5.6 Indicator 6 All employees shall be provided with fair contracts that have been signed by both employee and employer. A copy of employment contract is available for each and every employee indicated in the employment records.

(MAJOR)

- Appointment letter for local workers / workers registration for.

- Employment contract for foreign workers.

- Any documents related to employment is acceptable.

Kolopis Estate & Tanaki Estate

The estates have established Kontrak Pekerjaan Particulars.

1. Employment contracts are available in two languages, Bahasa Malaysia and English where Bahasa Malaysia can be understood by foreign workers from Indonesia.

2. All the applicable information such as working hours, over time, rest day, annual leave, sick leave and maternity leave are in accordance to Sabah Labour Ordinance.

3. The contract agreement is signed by Estate manager and assistant manager and counter sign by worker and the witness.

Example:

Kolopis Estate

Sighted worker agreement for general worker.

Tanaki Estate

Worker agreement for sprayers Sg Segama Division.

Obs 1







Observation:

The estates have established worker contracts form. But the estates could include details regarding overtime rate rather than quoting the Sabah Ordinance as reference.

4.4.5.7 Indicator 7 The management shall establish a time recording system that makes working hours and overtime transparent for both employees and employer.

(MAJOR)

- Check roll records.

- Display of working hours at general notice board.

The estates have established working hours’ base on SOP KHB/G/SOP-27 effective date 18/08/2013 and revision date 04/10/2016.

Kolopis Estate

For general workers; check roll records are used to monitor workers that works in the field. Sighted Check roll book for Gang 08 Bumiwealth division workers November 2017 are divided by work task.

Tanaki Estate

Estate use check roll records for recording workers’ attendance. Working hours is available at the muster ground and workers are aware on the working hours.

Yes

4.4.5.8 Indicator 8 The working hours and breaks of each individual employee as indicated in the time records shall comply with legal regulations and collective agreements. Overtime shall be mutually agreed and shall always be compensated at the rate applicable and shall meet the applicable legal requirement.

(MAJOR)

- Leave entitlement must be taken.

- Pre-approved overtime sheet.

- Not more than 104 hours.

KHB has established SOP on working hours, revision number 02 dated 18/08/2013.

Example:

Sighted working hour for field workers.

Monday to Saturday

Time allocation Hours

Morning Session 5.30 am – 9.00 am 3 ½ hours

Break time 9.00 am – 9.30 am ½ hour

Continue Work 9.30 am – 2.00 pm 4 ½ hours

Work stop 2.00 pm

Sunday: Rest day

Working hours is displayed at muster ground.

Interviews with workers demonstrate they understand and aware of the

Yes







working hours.

4.4.5.9 Indicator 9 Wages and overtime payment documented on the pay slips shall be in line with legal regulations and collective agreements.

(MAJOR)

- Record book for contractors

- Further check on check roll reports the source documents for payslips

- Should be for employees instead of contractors. Contractor management falls under 4.6.4.


List of wages for 2017 has been sighted and payment was according to the minimum wage of RM920.00 for Sabah, which was based on Minimum Wage order 2016.

Overtime rate for workers was 1.5 for normal working days. Overtime for Sunday and public holiday will be two times normal daily wages.

Kolopis Estate

Overtime records for worker sighted for mandor A and general worker are according to the law. Overtime rate for normal working days was 1.5 times

Tanaki Estate

Overtime records for sprayer worker A and B were sighted and paid according to the labour requirements. Overtime rate for normal working days was 1.5 times.

Overtime records indicates no overtime on Sunday and confirmed by workers. Overtime record was counter signed by workers as conformation. Rates or overtime followed Sabah labour Ordinance.

Yes

4.4.5.10 Indicator 10 Other forms of social benefits should be offered by the employer to employees, their families or the community such as incentives for good work performance, bonus payment, professional development, medical care and health provisions.

(MINOR)

- This must entirely be at the Management discretions – any forms or quanta are acceptable.

- The community part is covered under the 4.4.3.

This indicator is about benefit for employees only and should not involve the community, the employees or their families.

Tanaki / Kolopis Estate

List of social benefits provided by the estates such as utility vehicle, clinic, football field, shops, place of worship, security guard, Notice boards, and telecommunication facilities.

Company gave incentive of duit raya to all workers.

Yes







4.4.5.11 Indicator 11 In cases where on-site living quarters are provided, these quarters shall be habitable and have basic amenities and facilities in compliance with the Workers' Minimum Standards Housing and Amenities Act 1990 (Act 446) or any other applicable legislation.

(MAJORT)

Those temporary housing and amenities acknowledged by Jabatan Tenaga Kerja (JTK) and local authorities are accepted.

Kolopis / Tanaki Estate

Site visit to the line quarters observed the houses were in good condition. In term of basic necessity, the workers are provided with electricity and water. Inspection on garbage bin and recycling bin available for the workers and they are aware and ensure the wastes are separated accordingly.

Fire extinguishers are provided in the housing area ratio of two houses to one extinguisher. Recycling bin for the entire housing area. Inspection of the bins demonstrate that the workers understand the need to recycle and segregate the waste.

Yes

4.4.5.12 Indicator 12 The management shall establish a policy and provide guidelines to prevent all forms of sexual harassment and violence at the workplace.

(MAJOR)

- Refer to national guidelines on sexual harassment in the workplaces (Sexual Harassment policy)

- Absence of complaints (Suggest to add “Any actions taken to prevent or resolve issues shall be documented”).

The company has established sexual harassment policy dated 07/01/2015 signed by Chief Plantation Officer.


There are no complaints recorded on grievance, stakeholder meeting or interview with women workers alike regarding the sexual harassment

Complaint and grievance records have been reviewed and confirmed no complaints were made as regards to sexual harassment. Interview with women workers confirmed no sexual harassment cases ever happen in field.

Yes

4.4.5.13 Indicator 13 The management shall respect the right of all employees to form or join trade union and allow workers own representative(s) to facilitate collective bargaining in accordance with applicable laws and regulations. Employees shall be given the freedom to join a trade union relevant to the

- Foreign workers follow Immigration Act (by state)

Company has established Code of Conduct and Human Right Policy dated,03/01/2017 sign by Chief executive officer. Each of estate has established their own JCC committee as a platform of communication in between workers and employer. Example of JCC meeting sighted:

Kolopis Estate

The estate has established JCC committee which was chaired by estate manager and representatives involved:

1) Wakli Cattle farming

2) Wakil perumahan

3) Wakli perempuan

Yes







industry or to organize themselves for collective bargaining. Employees shall have the right to organize and negotiate their work conditions. Employees exercising this right should not be discriminated against or suffer repercussions.

(MAJOR)

4) Wakil Belia

5) Wakil non -Muslim

Latest JCC meeting was held on 15/09/2017.

Tanaki Estate

The estate has established JCC meeting which was chaired by Mr Conrad Peter Giluk and among representative involved was wakil pekerja.

Latest JCC meeting was held on 18/12/2017.

4.4.5.14 Indicator 14 Children and young persons shall not be employed or exploited. The minimum age shall comply with local, state and national legislation. Work by children and young persons is acceptable on family farms, under adult supervision, and when not interfering with their education. They shall not be exposed to hazardous working conditions.

(MAJOR)

- Employment records (Refer 4.4.5.5)

Social Policy dated 03/01/2017 states that to ensure that no child or young person shall be engage in employment other that those allow by the law.

Kolopis Estate

Workers personal record, January 2018 was sighted. For Kolopis divisionthe youngest worker date of birth is 18/06/1996.

For Bumiwealth division, the youngest worker date of birth is 15/12/1997.

There were no young workers sighted during field visits and through interviews with workers.

Tanaki Estate

Workers personal records January 2018 is established and sighted.

For Tanaki division youngest person date of birth is 08/11/1997.

Inobong division youngest worker date of birth is 30/07/1997

Sg. Segama division youngest worker date of birth is 29/10/1996.

There were no young workers sighted during field visits and through interviews with workers. All the workers were above 18 prior joining the company.

Yes

Criterion 6 Training and competency

4.4.6.1 Indicator 1 All employees, contractors and relevant smallholders are appropriately trained. A

- Training programme and records

Attendance


An annual training program was established. Training has been allocated

Yes







training programme (appropriate to the scale of the organization) that includes regular assessment of training needs and documentation, including records of training shall be kept.

(MAJOR)

Photos

Training contents

- Training needs for each operation.

- Regular assessment at least once a year.

- To include training for group manager for group certification.

throughout the year.

The list of attendants, training materials and photos of events were sighted and reviewed.

4.4.6.2 Indicator 2 Training needs of individual employees shall be identified prior to the planning and implementation of the training programmes in order to provide the specific skill and competency required to all employees based on their job description.

(MAJOR)

- Training matrix. Kolopis Estate

Training was identified for individual and company have established the training matrix each of estate. Estate has established list of training which covers all the requirements.

Example:

Water treatment plant training was attended by operators on 04/08/2017

Schedule waste training was conduct on 10/8/2017.

IPM training

Rhinoceros beetle training awareness was conducted on 07/12/2017 to the field workers. Total of 20 workers attended for phase 3 (young palm) workers. Attendance lists and records sighted.

Safety aspects, PPE and work procedure briefing for harvesters conducted on 16/01/2018. Attendance list and records sighted.

Chemical calibration training for spraying equipment was conducted by ANCOM and HREP on 25/10/2016.

Attendance lists and records of workers sighted.

Chemical Handling and Storage and Management of Chemical Substances in Store training conducted on 29/11/2017 Attendance lists and records sighted.

Paraquat Handling Procedure Training dated 08/08/2017 and attendance list

Yes







sighted.

Safety and Health aspects on fertilizing using machinery or manual training was conducted on 28/04/2017 and attendance list sighted.

Tanaki Estate

Training needs or individual and company has established the training matrix.

Example:

Rat control training was conducted on 13/03/2017 to the field workers. Total of 43 workers attended. Attendance lists sighted.

Ganoderma treatment training using Engano was conducted on 01/11/2017 to the assigned workers. Attendance lists sighted.

Safety and Health Briefing records for harvesters conducted on 27/01/2017, 02/02/2017 and 02/02/2017 for Tanaki, Inobong and Segama division respectively were sighted.

Safety, chemical risks, emergency response, PPE and work procedure for sprayer was conducted on 15/09/2017. Attendance lists and records for 15 sprayers sighted.

Chemical handling and pre-mixing including emergency response and disposal of container training dated 05/04/2017. Attendance lists for chemical mixer from Tanaki division sighted. Chemical handling, surplus chemical handlings and chemical calibration training was conducted on 08/11/2016 and 05/04/2017 for Inobong division. Attendance records for chemical mixer sighted. Chemical handling and pre-mix training conducted for workers in Sg Segama division. Chemical mixer attended on 20/04/2017.

Chemical calibration training for spraying equipment was conducted on 11/04/2017 and 03/04/2017 for Tanaki and Segama Division. Total of 56 attendees recorded. Attendance lists recorded for workers sighted.

Paraquat Handling Procedure Training dated 08/11/2017, 02/03/2017 and 02/11/2017 for Tanaki, Inobong and Sg Segama division respectively. Sampled attendee is Emmi Anur.

ISCC/ MSPO /RSPO/ Company Policies & Sub policies training was







conducted to contractors on 20/01/2018 and 11/01/2018. Sri Manjung road contractor’s workers Riven attended the training on 20/01/2018. PTH FFB transporter for Sg Segama Division attended the training on 11/01/2018.

Company policies were briefing to the staffs and workers for all three divisions. For example, Sg Segama division was conducted on 31/01/2017 and Inobong division on 19/01/2018.


During site interview both sampled group have confirmed that they received training in many aspects for example method of spraying, method of harvesting, PPE usage and policy of sustainability which include MSPO.

When evaluated the effectiveness, the harvesters are able to demonstrate the safe way of carrying and usage of the sickle. Sprayers are able to demonstrate the right way of spraying and use of PPE. All PPEs from both group were wearing correctly during site visit.

4.4.6.3 Indicator 3 A continuous training programme should be planned and implemented to ensure that all employees are well trained in their job function and responsibility, in accordance to the documented training procedure.

(MINOR)

- Annual training programme. Kolopis / Tanaki Estate

Company has allocated training as per SOP based on work. All estates have established their annual training programme example safety and health and policies.

Safety and Health Programme 2018 covers SOP and policies training, inspection on worksite and housing, medical checkup and medical surveillance programme.

Yes

4.5 Principle 5 Environment, natural resources, biodiversity and ecosystem services

4.5.1 Criterion 1 Environmental management plan

4.5.1.1 Indicator 1 An environmental policy and management plan in

Assessment of internal documents for example:

Kolopis / Tanaki estates

EAIA and environmental management plan dated Dec 2017 – policy,

Yes







compliance with the relevant country and state environmental laws shall be developed, effectively communicated and implemented.

(MAJOR)

Availability of signed environmental policy concerning management and protection of the environment according to the applicable laws.

Environmental management plan which was developed from results of aspect and impact analysis, mitigation and monitoring plans and records of implementation and timelines.

Continual improvement programme.

Awareness and training programme on environmental management and improvement plans, minutes of meetings, attendance lists, photos

Interview of personnel and stakeholders concerning for example:

Knowledge of environmental policy and efforts to protect the environment e.g. compliance to applicable laws.

compliance to laws, management team, environmental aspects & impacts, monitoring protocol, continuous improvement plans.

Environmental policy dated 03/01/2017, approved by Chief Executive Officer – minimize environmental impacts, compliances to regulatory requirements, zero burning, etc., displayed at estates notice boards.

4.5.1.2 Indicator 2 The environmental management plan shall cover the following:

(MAJOR)

a. An environmental policy and objectives.


Environmental policy dated 03/01/2017, approved by Chief Executive Officer – minimize environmental impacts, compliances to regulatory requirements, zero burning, etc.

Policy is posted at various workplaces for the benefit of workers. Verified understanding of policy for (water treatment plant operator A and workshop attendant A.

Objectives – reduce herbicide use by 3%, zero burning, compliance to all laws and regulations.

Yes

b. The aspects and impacts analysis of all operations.


Environmental impact assessment dated Dec 2017. Significant aspects – over usage of water, chemical / fertilizer spillage land disturbance during preparation, disposal of chemical containers, tree felling and eradication of weeds, etc. Mitigation / improvement plans and timeframes established.

Yes

4.5.1.3 Indicator 3 An environmental improvement plan to mitigate the negative impacts and to promote the positive ones, shall be developed, effectively


Planting of leguminous cover and beneficial plants along the boundary of nursery and after land preparation, reduce usage of diesel, reduce printing of documents, etc. Verified on implementation.

Yes







implemented and monitored.

(MAJOR)

4.5.1.4 Indicator 4 A programme to promote the positive impacts should be included in the continual improvement plan.

(MINOR)


Continuous improvement plan has been established dated 31/0/2017, e.g. Empty fruit bunch (EFB), POME and POME cake for field application.

Yes

4.5.1.5 Indicator 5 An awareness and training programme shall be established and implemented to ensure that all employees understand the policy and objectives of the environmental management and improvement plans and are working towards achieving the objectives.

(MAJOR)


The training on environmental was conducted. During interviewing of workers, they are aware of the policy and objective of environmental.

Kolopis Estate

Training has been identified for individual. The estate has established the training matrix.

Example:

Water treatment plant training attended operator A and Operator B on 04/08/2017. Briefing conducted by. field staff.

Schedule waste training was conduct on 10/8/2017 by assistant manager.

IPM training

Rhinoceros beetle awareness training conducted on 07/12/2017 to the field workers. Total 20 workers attended for phase 3 (young palm) workers. Attendance lists records sighted.

Safety aspects, PPE and work procedure briefing for harvesters conducted on 16/01/2018.

Attendance lists sighted.

Chemical calibration training for spraying equipment was conducted by ANCOM and HREP on 25/10/2016.

Attendance lists records for workers sighted.

Chemical Handling and (Storage and Management of Chemical Substances in Store) dated 29/11/2017 was conducted by Assistant manager. Attendance

Yes







lists recorded sighted.

Paraquat Handling Procedure Training dated 08/08/2017.

Safety and Health aspects on fertilizing using machinery or manual training was conducted on 28/04/2017. Workers records who attended the training sighted.

Training for water and river contamination handlings SOP KHB/G/SOP-09 was conducted on 09/03/2017. Attendance lists and records sighted.

Training to review HCV documents and reports, RTE and non-RTE Species and law enforcement conducted 14/11/2017. Attendance list sighted.

Waste disposal procedure KHB/G/SOP-08 training conducted on 14/02/2017. The procedure includes used oil disposal, domestic disposal, landfill requirement. Attendance lists and records sighted.

Chemical handling and pre-mixing including emergency response and disposal of container training dated 29/11/2017. Attendance lists and records sighted.

ISCC & MSPO training for contractor workers dated 07/12/2017 was conducted by Estate manager.

Safety Induction, company policies, PPE, work permit have been briefed to Santi contractor’s workers on 03/01/2017 and 12/07/2017 respectively. Attendance records sighted.

Tanaki Estate

Training matrix has been established which identify training needs for workers.

Example:

Rat control training was conducted on 13/03/2017 to the field workers. Total of 43 workers attended. Attendance lists and records sighted.

Ganoderma treatment using Engano training was conducted on 01/11/2017 to the assigned workers. Attendance lists and records sighted.

Safety and Health Briefing attendance list and records for harvesting dated 27/01/2017, 02/02/2017 and 02/02/2017 for Tanaki, Inobong and Segama







division respectively were sighted.

Safety, chemical risks, emergency response, PPE and work procedure for sprayer was conducted on 15/09/2017. Attendance lists and records for 15 sprayers sighted.

Chemical handling and pre-mixing including emergency response and disposal of container training dated 05/04/2017 attended by chemical mixer from Tanaki division sighted.

Chemical handling, surplus chemical handlings and chemical calibration training was conducted on 08/11/2016 05/04/2017 for Inobong division attended by chemical mixer.

Chemical handling and pre-mix training conducted for workers in Sg Segama division on 20/04/2017 attended by chemical mixer

Chemical calibration training for spraying equipment was conducted on 11/04/2017 and 03/04/2017 for Tanaki and Segama Division attended by 56 workers.

Paraquat Handling Procedure Training dated 08/11/2017, 02/03/2017 and 02/11/2017 for Tanaki, Inobong and Sg Segama division respectively. Attendance records sighted.

Water treatment plant operator at Inobong division was trained on chemical handling and chemical dosing dated 04/09/2017.

Training for water and river contamination handlings SOP KHB/G/SOP-09 was conducted on 20/03/2017, 08/03/2017 and 04/03/2017 for Tanaki, Inobong and Segama division respectively. Attendance lists and records of workers sighted.

Sighted training records for RTE and penalties training conducted on 18/12/2017, 01/12/2017 and 11/12/2017 for Tanaki, Inobong and Segama division respectively.

ISCC/ MSPO /RSPO/ Company Policies & Sub policies training was conducted to contractors on 20/01/2018 and 11/01/2018. Sri Manjung road contractor’s workers attended the training on 20/01/2018. PTH FFB transporter for Sg Segama Division attended training on 11/01/2018.







Company policies were briefing to the staffs and workers for all three divisions. For example, Sg Segama division was conducted on 31/01/2017 and Inobong division on 19/01/2018.

First aid training was conducted by clinic dresser for all divisions. Tanaki division was conducted on 10/10/2017, Sg Segama division is conducted on 28/12/2017 and Inobong division is conducted on 25/05/2017. Attendance records sighted.

Fire drill and emergency evacuation was conducted to all divisions. For example, training conducted at Sg Segama division on 30/10/2017 includes crèche workers, staffs and field workers.

4.5.1.6 Indicator 6 Management shall organize regular meetings with employees where their concerns about environmental quality are discussed.

(MAJOR)

Kolopis estate

Environment meeting conducted every quarter latest on 10/01/2018. Attended by manager and staff. Minutes recorded – result of environmental monitoring conducted by Chemsain Konsultant dated Oct 2017, buffer zone/riparian signage, preparation of new landfill, etc. Attendance recorded.

Tanaki estate

Latest environment meeting conducted on 12/12/2017 – scheduled waste management, chemical containers control, yellow paint marking for buffer zone, tree planting, etc. Minutes and attendance recorded.

Management review on 17/01/2018 covered part of environmental element including water monitoring.

Example:

In point 4.2.3 effluent treatment plant monitoring have been presented to the management.

Parameter Limit Nov-17 Oct 17

PH (5.0-9.0) 8.7 8.8

BOD <20ppm 15.9 18.3

Yes







Total Solid - - -

Suspended Solid

<400mg/l 27 21

Oil & Grease

<50mg/l ND ND

Amonical -N

<150mg/l 2.8 ND

Total-N <200mg/l 54.9 38.5

4.5.2 Criterion 2 Efficiency of energy use and use of renewable energy

4.5.2.1 Indicator 1 Consumption of non-renewable energy shall be optimized and closely monitored by establishing baseline values and trends shall be observed within an appropriate timeframe. There should be a plan to assess the usage of non-renewable energy including fossil fuel, electricity and energy efficiency in the operations over the base period

(MAJOR)

- Records from the base year are to be certified verified (minimum 3 years baseline value average)

- Energy assessment plan


Monthly diesel consumption for year 2017 for tractors, lorries, trucks, vehicles and usage by contractors.

Fuel efficiency improvement plan – control movement of vehicles by proper planning, reduce number of FFB collection points, avoid running of vehicles on Sunday, etc.

Baseline value established at x.xx lit/tFFB for Tanaki estate and xx.x lit/tFFB for Kolopis estate. Trend for 2016 and 2017 was recorded.

Yes

4.5.2.2 Indicator 2 The oil palm premises shall estimate the direct usage of non-renewable energy for their operations, including

- Estimated annually

- Estate annual budget gauge against actual usage

Kolopis estate

Fuel efficiency for Dec 2017 was xx.xx lit/tFFB and Nov was xx.xx lit/tFFB which include electricity generation and usage by contractors. YTD for 2017

Yes







fossil fuel, and electricity to determine energy efficiency of their operations. This shall include fuel use by contractors, including all transport and machinery operations

(MAJOR)

was xx.xx lit/tFFB.

Tanaki estate

Fuel efficiency for Dec was x.xx lit/tFFB and xx.xx lit/tFFB in Nov including electricity generation and usage by contractors.

4.5.2.3 Indicator 3 The use of renewable energy should be applied where possible.

(MINOR)


The estates do not use renewable energy either from solar, biomass or biogas sources.

Yes

4.5.3 Criterion 3 Waste management and disposal

4.5.3.1 Indicator 1 All waste products and sources of pollution shall be identified and documented.

(MAJOR)

- Identify all waste products (e.g. scheduled waste, domestic waste, clinical waste)

- Identify sources of pollutions (e.g. fossil fuel, spillages of lubricant)


Waste identification and disposal method – rotten bunches, palm pruned fronds, EFB, scheduled waste, domestic waste, recyclable waste, etc. Sources of pollution identified.

Yes

4.5.3.2 Indicator 2 A waste management plan to avoid or reduce pollution shall be developed and implemented. The waste management plan should include measures for:

(MAJOR)

- E.g. use of POME as a substitute for inorganic fertilizers, EFB mulching for moisture retention, prune fronds stacking to prevent soil erosion

- All used chemical containers must be triple rinsed, punctured and dispose off through DOE


Waste management plan dated Dec 2017 – waste identification and disposal, registered scheduled wastes, chemical & containers, pollution aspects & impacts, action plan of waste management.

Yes

a. Identifying and monitoring sources of waste and pollution


Sources of pollutions are identified, e.g. harvesting area, chemical mixing,

Yes







authorized collectors

- Re-used empty chemical containers must be appropriately labeled and only used for spraying purpose

- Records of EFB and POME utilization

vehicles, etc. Monitoring conducted and recorded, e.g. pruning, EFB , scheduled waste , vehicle maintenance records, etc.

b. Improving the efficiency of resource utilization and recycling of potential wastes as nutrients or converting them into value-added by-products


Reuse of empty chemical containers for spraying, rotten bunch and fronds for enhancing soil nutrients, recycling of paper, glass and plastics.

Yes

4.5.3.3 Indicator 3 The management shall establish Standard Operating Procedure for handling of used chemicals that are classified under Environment Quality Regulations (Scheduled Waste) 2005, Environmental Quality Act, 1974 to ensure proper and safe handling, storage and disposal

(MAJOR)

- SOP Kolopis estate

Monthly inventory of scheduled waste, latest Jan 2018 – SW102 (battery), SW305 (lub), SW306 (hydraulic oil), SW408 (contaminated soil), SW410 (rags & filters). Disposal of clinical waste SW404 dated 11/08/2017 for x.x kg. to Medicare Lab. Disposal of x.x drums SW305 to Segar Alam Kinabalu dated 03/08/2017 and xx pcs of SW410 filters.

Tanaki estate

Monthly inventory of scheduled waste recorded. Disposal of x drums of SW305 and xxx kg of SW410 oil filters to Segar Alam Kinabalu dated 03/08/2017. Consignment notes no. 8212 & 8213.

Yes

4.5.3.4 Indicator 4 Empty pesticide containers shall be punctured and disposed in an environmentally and socially responsible way, such that there is no risk of contamination of water sources or to human health. The disposal instructions on manufacturer’s labels should be adhered to. Reference should be made to the

- Refer to 4.5.3.2 Kolopis / Tanaki estates

Waste empty containers are triple rinsed and punctured before disposing to a recycler.

No disposal for 2017 as all containers are still kept at the store with empty containers records maintained.

Yes







national programme on recycling of used HDPE pesticide containers.

(MAJOR)

4.5.3.5 Indicator 5 Domestic waste should be disposed as such to minimize the risk of contamination of the environment and watercourses.

(MINOR)

- Location map of rubbish pits.

- Management to ensure sufficient distance of landfill from habitation and to avoid water contamination.


Domestic waste is disposed at dedicated landfill with location map. Situated away from habitation and water sources. Adequately lined with plastic sheets and any leaching is channeled to a containment area.

Yes

4.5.4 Criterion 4 Reduction of pollution and emission

4.5.4.1 Indicator 1 An assessment of all polluting activities shall be conducted, including greenhouse gas emissions, scheduled wastes, solid wastes and effluent

(MAJOR)

- In-house assessment records are accepted.


All polluting activities are assessed via the environmental impact assessment – Smoke emission, scheduled waste, domestic waste, discharge from septic tanks, etc.

Yes

4.5.4.2 Indicator 2 An action plan to reduce identified significant pollutants and emissions shall be established and implemented

(MAJOR)

- E.g. Zero burning, management of water table in peat areas to reduce peat subsidence rate

- Refer to 4.5.3.1, 4.5.3.2, 4.5.7


Zero burning is practiced. No open burning was observed during field and land fill sites visits.

Yes

4.5.5 Criterion 5 Natural water resources

4.5.5.1 Indicator 1 The management shall establish a water management plan to

- E.g Water quality sampling analysis incoming and outgoing sources, quality


Water management plan dated 15/01/2018 – responsibilities, water catchment

Yes







maintain the quality and availability of natural water resources (surface and ground water). The water management plan may include:

(MAJOR)

parameters

- Frequency as requested by the state

- Refer to national and/or local regulations for riparian zones (e.g. DID)

- Check regulations for water catchment area

a) Monthly water usage records

b) Water sampling record from quarterly Environmental Monitoring (EMP)

c) Verify estate records.

d) Riparian reserves.

-signage’s for riparian buffer zones

-Briefing training for sprayers and workers

e) Action plan and time bound plan.

f) Records of water levels.

areas, water treatment and quality analysis, etc.

SOP for water treatment plant from contractor Millivest. Latest water COA from Dynakey Lab dated 20/10/2017 complying to DOE specifications.

a. Assessment of water usage and sources of supply


Flow meter reading records from Jan – Dec 2017. Usage for Nov was xxxx lit and Dec was xxxx lit for a population of xxx employees. Source of supply from water catchment pond and rainwater harvesting.

b. Monitoring of outgoing water which may have negative impacts into the natural waterways at a frequency that reflects the estate’s current activities


Monitoring of outgoing water conducted at 8 points for both upstream and downstream. Latest report dated 12/07/2017 by Chemsain Konsultant, complying to specifications.

Yes

c. Ways to optimize water and nutrient usage to reduce wastage (e.g. having in place systems for re-use, night application, maintenance of equipment to reduce leakage, collection of rainwater, etc.).


Rainwater harvesting is practiced at housing and offices. Regular inspection on pipe leakages. Reuse of wastewater from rinsing of chemical containers.

Yes

d. Protection of water courses and wetlands, including maintaining and restoring


Buffer zone signage are installed at water courses and riparian areas.

Yes







appropriate riparian buffer zones at or before planting or replanting, along all natural waterways within the estate

e. Where natural vegetation in riparian areas has been removed, a plan with a timetable for restoration shall be established and implemented


No natural vegetation in riparian areas has been removed.

Yes

f. Where bore well is being use for water supply, the level of the ground water table should be measured at least annually


No bore well is used.

Yes

4.5.5.2 Indicator 2 No construction of bunds, weirs and dams across main rivers or waterways passing through an estate.

(MAJOR)

- site verification.


No construction of bunds, weirs and dams across main rivers or waterways.

Yes

4.5.5.3 Indicator 3 Water harvesting practices should be implemented (e.g. water from road-side drains can be directed and stored in conservation terraces and various natural receptacles).

(MINOR)

- E.g. Silt pits, water bodies, site drains, diversion of water on site drains at regular intervals


Rainwater harvesting is practiced at housing and offices. Rainwater is for external use only and not for drinking. Drinking water is supplied from the water treatment plant.

Yes

4.5.6 Criterion 6 Status of rare, threatened,







or endangered species and high biodiversity value area

4.5.6.1 Indicator 1 Information shall be collated that includes both the planted area itself and relevant wider landscape-level considerations (such as wildlife corridors). This information should cover:

(MAJOR)

- Observed and examine animal droppings along estate boundaries

- Locality maps

- Take photos of birds and animals and compare to IUCN list

- Internal biodiversity assessment can be accepted

- Biodiversity assessment guidelines

- Display of appropriate signage on prohibiting, hunting and fishing.

a. Identification of high biodiversity value habitats, such as rare and threatened ecosystems, that could be significantly affected by the grower(s) activities

“Baseline Biodiversity Assessment and Planning for Unplanted Area, Water Catchment Area and Buffer Zones in KHB Abedon Group, Lahad Datu” dated 31/03/2017.

Identification of document is in accordance with HCV requirements in page 15. Methodology include stakeholders as part of the process.

Natural resource assessment page 32 states the species of tree and fauna fond in the plantation.

Species identified:

Tree Bird Mammals

Terap Hutan Oriental Darter Pig-Tailed Macaque

Sedaman Pied Hornbill Plaintain Squirrel

Laran Slender-Billed Crow Comman Palm Civet

Belian Red Junglefowl Leopard Cat

Buffer zone and riparian area was well marked. Palms marked with “red paint” to ensure there is no application of fertilizer and chemical in area gazette as riparian/buffer zones. Signage of prohibition on above activity was sighted.

Yes







Updated “Baseline Biodiversity Assessment and Planning for Unplanted Area, Water Catchment area and Buffer Zone in KHB” report dated 10/01/2018 includes both Kolopis and Tanaki Estates.

Action plans have specified the do list for example:

1. Continuous Training and Briefing to educate the employee and smallholder.

2. Ton install warning signboard for no hunting.

3. To continuously monitoring according to the schedule.

4. To update the list of animal’s records if new sighted animal in the estate.

b. Conservation status (e.g. The International Union on Conservation of Nature and Natural Resources (IUCN) status on legal protection, population status and habitat requirements of rare, threatened, or endangered species), that could be significantly affected by the grower(s) activities

List of endangered animals in Sabah is made available in page44-46. This in accordance to IUCN list of the animals in Sabah.

“Natural resource assessment” has specify whether the wildlife is under RTE or not.

Updated “Baseline Biodiversity Assessment and Planning for Unplanted Area, Water Catchment area and Buffer Zone in KHB” report dated 10/01/2018 include both Kolopis and Tanaki Estates.

Updated report includes the list of wildlife sighted in the area by location and in accordance to IUCN list.

For example:

name location IUCN

Pig tailed Macaque Kolopis,

Bumiweatlh

Tanaki

Inabong

Segama

Yes







Leopard cat Kolopis,

Bumiweatlh

Tanaki

Inabong

Segama

Common Palm Civet Kolopis,

Bumiweatlh

Tanaki

Inabong

Segama

LC

4.5.6.2 Indicator 2 If rare, threatened or endangered species, or high biodiversity value, are present, appropriate measures for management planning and operations should include:

(MAJOR)

a. Ensuring that any legal requirements relating to the protection of the species are met

Wildlife Conservation Enactment 1997 together with their scheduled have been made available in the monitoring plan. All species which have been identified have a column to specify their legal status in the state.

Action plan includes the do list for example:




4. To update the list of animal’s records if new sighted animal in the

Yes







estate.

b. Discouraging any illegal or inappropriate hunting, fishing or collecting activities and developing responsible measures to resolve human-wildlife conflicts

Signage have been installed to prevent any illegal catching / hunting of pretested wildlife. The signage has information for type of wildlife and the punishment by law if caught.

Training for HCV conducted on 14/11/2017 for Kolopis Estate and 18/12/2017 for Tanaki Estate.

Signage have been installed at riparian area, noticeboard in guard house and main offices indicating no hunting and the type of wildlife sighted. The signage included penalty and punishment if anyone caught hunting.

Interviews with workers on field indicates they understand and aware on present of wildlife and ban on illegal hunting.

Yes

4.5.6.3 Indicator 3 A management plan to comply with Indicator 1 shall be established and effectively implemented, if required.

(MAJOR)

- Action plan.

- If ERT are present. Action plan for training / work action for year 2018 has been planned.

Topic / work topic Month

Company Policy: Safety and Health January

Briefing SOPs Buffer zone/water catchment February

Marking Buffer Zone/Riparian Zone March

Upgrade signboard April

Monitoring of any structure May

Marking of new Buffer/riparian Zone June

Refreshment on SOP zone/Water Catchment July

Repainting buffer zone/riparian July

RTE Species briefing & Penalty August

Planting of jungle tree August

Yes







Erect Signage Briefing September

Repainting Buffer Zone/Riparian October

Action plan includes the do list for example :




4. To update the list of animal’s records if new sighted animal in the estate.

4.5.7 Criterion 7 Zero burning practices

4.5.7.1 Indicator 1 Use of fire for waste disposal and for preparing land for oil palm cultivation or replanting shall be avoided except in specific situations, as identified in regional best practice.

(MAJOR)

- SOP for planting and replanting.

KHB has established Zero Burning Policy dated 11/01/2016. The SOP stated that no open burning allowed in the estates.

Kolopis Estate

Site visit on field operation, riparian area, and boundary could observed there is no open burning found.

Tanaki Estate

Site visit on field operation, riparian area and boundary observed there is no open burning found.

Interviews with workers at field indicates they understand that no open burning allow either at field or at their housing compound.

Yes

4.5.7.2 Indicator 2 A special approval from the relevant authorities shall be sought in areas where the previous crop is highly diseased and where there is a significant risk of disease spread or continuation into

- If controlled burning is allowed, examine the official letter of approval from the relevant authority.

Based on site visit to replanting area at Tanaki Estate, there were no open burning occurs. There is no replanting at present in Kolopis estate.

Yes







the next crop.

(MAJOR)

4.5.7.3 Indicator 3 Where controlled burning is allowed, it shall be carried out as prescribed by the Environmental Quality (Declared Activities) (Open Burning) Order 2003 or other applicable laws.

(MAJOR)

KHB has established Zero Burning Policy, dated 11/01/2016No open burning sighted on replanting field in Tanaki Estate. There is no replanting at present in Kolopis estate.

Yes

4.5.7.4 Indicator 4 Previous crops should be felled or mowed down, chipped and shredded, windrowed or pulverized or ploughed and mulched.

(MINOR)

The Estates followed the Zero Burning Policy which has been verify on the replanting area. There is no open burning or any trace of fire during visit to replanting area at Tanaki Estate. There is no replanting at present in Kolopis estate.

Yes

4.6 Principle 6 Best Practices

4.6.1 Criterion 1 Site management

4.6.1.1 Indicator 1 Standard operating procedures shall be appropriately documented and consistently implemented and monitored.

(MAJOR)

- SOP on best practices. Kretam Holding Berhad Group established Standard Operating Procedure (SOP) for field operations on the best practices.

The master list of 57 SOPs was updated on 04/12/2017 signed by Chief Plantation Officer (CPO).

Kolopis Estate

Example:

SOP for best practices spraying.

Document No: KHB/G/SOP-26/S&H-09

Revision No: 2

Effective Date: 18/08/2013

Revision date: 03/11/2016.

Major NC 1







SOP for Harvesting.

Document No: KHB/G/SOP-26/S&H-04

Revision No. 2

Effective Date 28/08/2013

Revision Date: 03/11/2016

SOP for circle spraying is 1.5-2.0 m wide for the spraying area. This could be observed during field inspection and interviewed of workers.

Harvesting gangs know their job description only harvest minimum 5 loose fruit on the ground for 3-years palm and 10 loose fruit for older palm.

The 2018 program for operation work was sighted and reviewed.

Example:

Slashing, 2 rounds a year, selective spray 2 rounds a year, VOPs control 2 rounds a year, circle spray 3 rounds a year, IPM 1 round, Rat 1campaign once a year and actual implementation was carried out at block 32, 33, 35 Phase 11

Tanaki Estate

Safe Fertilizer Application.

Doc No: KHB/G/SOP-29

Revision no: 3

Effective date: 01/3/2015

Revision date: 1/10/2017.

Integrated pest management.

Document No: KHB/G/SOP-33

Revision No: 3



Work program for Tanaki Estate example:

Circle and path spraying program for three divisions was sighted and reviewed







(Tanaki, Inobong and Sg Segama) 3 rounds a year.

Non-conformity:

SOPs are in place and established for the operations of the estate. However, the established SOPs have not included MSPO requirement. Example, SOP for internal audit, Pest & diseases-ganoderma, updating of legal requirement.

4.6.1.2 Indicator 2 Where oil palm is grown within permitted levels on sloping land, appropriate soil conservation measures shall be implemented to prevent both soil erosion as well as siltation of drains and waterways. Measures shall be put in place to prevent contamination of surface and groundwater through runoff of either soil, nutrients or chemicals.

(MAJOR)

- Appropriate terracing

- Planting of legume cover crops

- In the case of Sabah, no replanting on slopes of 25 degrees and above unless specified in the EIA report and approved by the Environmental Protection Department (EPD).

- In the case of Sarawak, no replanting on steep slopes unless specified in the EIA report and approved by the Natural Resources and Environment Board (NREB).


SOP for SOP for terracing and soil conservation was established.

Replanting-Soil Conservation / Terracing.

Document No: KHB/G/-07

Revision No 2



SOP replanting and terracing example:

Flat: Terrain less than 50

ratios per ha1:12

Gentle slope: Terrain with slope between 50-8

0 ratio per ha 1:12-1:7

Steep slope: terrain with slope more than 80-14

0 ratio per ha1:7-1:4

Very steep slope: Terrain with slopes more than 140 ratios per ha1:4.

SOP Leguminous Cover Crop plants planting


Revision no: 2

Effective date: 18/08/2013


The management has established Mucuna Brateata of 100-120gm/Ha during replanting. On flat area Mucuna sowing two row planting line at 0.6 m and apart leave a space 1.8m between two double drills. On hilly area sown in a compressing band of Leguminous drill are sown on lip of the terrace. The distance between two drills 0.6m apart. On site visit observed good coverage







of Leguminous in field application.

SOP EFB, Compost & Decanter Cake Application



State that implementation of EFB at Kolopis estate will reduce the soil erosion and increase soil nutrient.

4.6.1.3 Indicator 3 A visual identification or reference system shall be established for each field.

(MAJOR)

- Block marking. Kolopis / Tanaki Estate

Block marking is visibly at each block and verified during site visits example:

Phase 1

Block 14

26.55 Ha

Kolopis estate has two divisions Kolopis and Bumiwealth. Tanaki estate has three divisions Tanaki, Inobong and Sg. Segama.

Yes

4.6.2 Criterion 2 Economic and financial viability plan

4.6.2.1 Indicator 1 A documented business or management plan shall be established to demonstrate attention to economic and financial viability through long-term management planning.

(MAJOR)

- Operational plan for at least 2 years.

- Refer to 4.6.2.3


Long term plan & financial projection for year 2016-2022 was sighted and reviewed. Content of budget includes replanting plan financial projection, long term Opex & Capex plan, OP mature-budget & operation projection, OP immature, Capital Expenditure planting materials, crude palm oil & palm kernel extraction rate.

Yes

4.6.2.2 Indicator 2 Where applicable, an annual replanting programme shall be established. Long term replanting programme should be established and review annually, where

- Long-term replanting programme.

Kolopis Estate

Long term replanting program was established for year 2017-2022.

Year Field no Kolopis / Ha Total / Ha

2017 - - -

Yes







applicable every 3-5 years.

(MAJOR) 2018 - - -

2019 Phase 10 (1-25) 548.69 548.69

2020 - - -

2021 Phase 11(26-35) 214.71 214.71

2022 Phase 11(26.35) 202.44 202.44

Total 965.84 965.84

Tanaki Estate

Long term replanting program was established for year 2017-2022.

Year Field no Tanaki/Ha Total/Ha

2017 Phase 4 (1-16) 357.10 357.10

2018 Phase 5(1-13) 223.21 223.21

2019 - - -

2020 Phase 6(1-17) 358.10 358.10

2021 Phase 7(1-3,5-20) 369.71 369.71

2022 Phase 15(3-9) 147.58 147.58

Phase 13 (12-17) 96.39 96.39

Total 1552.09 1552.09

4.6.2.3 Indicator 3 The business or management plan may contain:

(MAJOR)

- Review of the business plan for the last 2 years’ performance.

a. Attention to quality of planting materials and FFB

Kolopis Estate

Planting material f(DXP) rom Borneo Samudera Sdn Bhd (BSSB), IJM, Highlands Research Unit (HRU).

Yes







Tanaki Estate

Origin of seedings from Highlands Research Unit (HRU), IOI, IJM.

Kertam Holdings Berhad group does no used GMO seeds. Records of seeds and planting materials origin name, vendor, location, date of application and quantity per area. Document check on existing certificates, label tags on seeds packaging. On-site verification and interview / estate manager on how the choice for seeds, plant materials and grafting material was prepared.

b. Crop projection: site yield potential, age profile, FFB yield trends

Abedon Sdn Bhd has established 10 years projection from year 2016-2026 based on palm age profile and yield trends.

Kolopis Estate

Example:

FFB projection until 2022.

Year 2018 2019 2020 2021 2022

mt 39,308 36,282 38,572 35,266 33,029

Tanaki Estate

Year 2018 2019 2020 2021 2022

mt 41,761 40,803 36,455 28,199 25,770

Yes

c. Cost of production: cost per tonne of FFB

The cost per ton FFB and per HA was included in the business plan, monthly costs report and budget planning.

Yes

d. Price forecast The price forecast included in annual management budget and projections for 5 years.

Yes

e. Financial indicators: cost benefit, discounted cash flow, return on investment

The financial indicators in management plan includes expenses, capex, profit before tax and profit after tax.

Yes

4.6.2.4 Indicator 4 The management plan shall Monthly management and/or The management plan / monthly costs report is effectively implemented, and Yes







be effectively implemented, and the achievement of the goals and objectives shall be regularly monitored, periodically reviewed and documented.

(MAJOR)

progress reports the achievement is monitored on a monthly basis is documented.

4.6.3 Criterion 3 Transparent and fair price dealing

4..6.3.1 Indicator 1 Pricing mechanisms for the products and other services shall be documented and effectively implemented.

(MAJOR)

- Monthly estate accounts.

- Sales and purchase agreement and/or contract.

Kolopis Estate

Pricing mechanisms have documented and effectively implemented. Example of contract agreement with the contractor was reviewed.

Work order no. AGOC/LB-SANTA JAYA/02-2017

Date: 20/12/2017

Contract period: 22/10/2017-21/12/2017.

Sighed contract awarded to Contractor Santa Jaya to supply labour and machinery for repair and maintenance of main road, sub road, fixing culvert, repairing drain and levelling at Bumiwealth Division.

The agreement was sign by both party contractor and management of Kertam Holding Berhad.

Tanaki Estate

The pricing mechanisms of service between contractor and management was sighted.

Example:

Road Gravelling dated 22/12/2016 work order no AGOC/LT-SRIMANJUNG/01-2017.

Yes

4.6.3.2 Indicator 2 All contracts shall be fair, legal and transparent and agreed payments shall be

- Evidence of payment

- Credit terms.

- Fair – Period of payment.

Kolopis Estate

The contract was fair, transparent and the agreed payment was stated by monthly basis for work done certified by Officer in charge. The payment up to

Yes







made in timely manner.

(MAJOR)

100% based on records.

Example:

Sighted payment made to Contractor Santa Jaya

Ref no: AGC/BW/HQ-18/10/2017

Date: 30/10/2017

Ref: progress payment claim- 10/2017 (Bumiwealth Division)

Tanaki Estate

Sighted Road Gravelling contract dated 22/12/2016 work order no AGOC/LT-SRIMANJUNG/01-2017.

4.6.4 Criterion 4 Contractor

4.6.4.1 Indicator 1 Where contractors are engaged, they shall understand the MSPO requirements and shall provide the required documentation and information.

(MAJOR)

- Contract agreement with special clause on MSPO indication, and/or self-declaration by the contractor to oblige regards to MSPO requirements (standardize form).

- Briefing to the contractor with regards to MSPO.

- Interview of contractors.

The contractor understanding the principles of MSPO during the interview of stakeholder consultation and during field visit with the employee of contractor. The estate has conduct training to contractor on awareness of MSPO requirements.

Kolopis Estate

Estate has conducted MSPO training to contractor and their workers on 07/12/2017 by manager verified by Senior Estate Manager (SEM)

Tanaki Estate

Estate manager has brief to contractor on all principles of MSPO and declaration made by the contractor on MSPO requirements dated 20/01/2018.

Example: Contractor Sri Manjung (road maintenance)

Yes

4.6.4.2 Indicator 2 The management shall provide evidence of agreed contracts with the contractor.

(MAJOR)

Kolopis estate

The sample contract for estate general work order dated: 22/12/2017. Work order no AGOC/LB-SANTA JAYA/01-2018 signed between Abedon Group of companies with Contractor Santa Jaya (install & repair culvert / bridge)

Contract agreement has specific clause states the contractor obligations and responsibilities must comply with all rules, regulation and requirement of the

Yes







company that includes MSPO principle.

Tanaki Estate

Sample contract agreement for the contractor for road grading dated 22/12/2016.

work order no. AGOC/LT-SRIMANJUNG/01-2017.

Sign by:

Manager (Syarikat Sri Manjung)

Senior Estate Manager (SEM)

The contract is for road grading & compaction, road gravelling, stockpile, loading and ripping stock pile and mapping of road to be repair.

Contract agreement has specific clause on MSPO requirements that the contractors need to follow.

4.6.4.3 Indicator 3 The management shall accept MSPO approved auditors to verify assessments through a physical inspection if required.

(MINOR)

- Contractor auditable

- Site visit of contractor premises if applicable.

Abedon Sdn Bhd contracted accredited Certificate Body TUV NORD Malaysia to conduct MSPO certification and allowed to audit or inspect any contractors.

Yes

4.6.4.4 Indicator 4 The management shall be responsible for the observance of the control points applicable to the tasks performed by the contractor, by checking and signing the assessment of the contractor for each task and season contracted.

(MAJOR)

- Work completion certificate or reports.

The management established contractor records at estate for monitoring of work carry out and verified by both parties after completing the job on daily basis.

Yes

4.7 Principle 7 Development of new







planting

4.7.1 Criterion 1 High biodiversity value

4.7.1.1 Indicator 1 Oil palm shall not be planted on land with high biodiversity value unless it is carried out in compliance with the National and/or State Biodiversity Legislation.

(MAJOR)

- EIA

- Refer to neighbouring estates (4.5.6.1)

- National and/or State Biodiversity Policy

The planting statement and estates maps were reviewed. It was cross-checked with land titles on the hectare and there was no new planting. Therefore, no biodiversity assessment and EIA conducted.

Yes

4.7.1.2 Indicator 2 No conversion of Environmentally Sensitive Areas (ESAs) to oil palm as required under Peninsular Malaysia’s National Physical Plan (NPP) and the Sabah Forest Management Unit under the Sabah Forest Management License Agreement. For Sabah and Sarawak, new planting or replanting of an area 500ha or more requires an EIA. For areas below 500ha but above 100ha, a Proposal for Mitigation Measures (PMM) is required.

(MAJOR)

- Soil map

- Carbon stock analysis (if available)

- EIA

- Proposal for Mitigation Measures (PMM) (concise list of requirements relevant to environmental protection)

- Refer to ‘Akta Perlindungan Alam Sekitar’

The planting statement and estates maps were reviewed. It was cross-checked with land titles on the hectare and there was no new planting. Thus, no Environmental Sensitive Area (ESAs) conducted.

Yes

4.7.2 Criterion 2 Peat land

4.7.2.1 Indicator 1 New planting and replanting may be developed and implemented on peat land

New Planting

-Evidence of water management programme/ plan.

Based on estates soil map, there were no peat land present. Field observation during estate visit has confirmed this.

Yes







as per MPOB guidelines on peat land development or industry best practice.

(MAJOR)

Water level maintenance.

Replanting

-Existing companies or group best practice management is acceptable.

-Refer to 4.5.5.1.

Examine records on water level management.

4.7.3 Criterion 3 Social and Environmental Impact Assessment (SEIA)

4.7.3.1 Indicator 1 A comprehensive and participatory social and environmental impact assessment shall be conducted prior to establishing new plantings or operations.

(MAJOR)

- SEIA report. The planting statement and estates maps were reviewed. It was cross-checked with land titles on the hectare and there was no new plantingThus, there is no requirement to conduct SEIA.

Yes

4.7.3.2 Indicator 2 SEIAs shall include previous land use or history and involve independent consultation as per national and state regulations, via participatory methodology which includes external stakeholders.

(MAJOR)

- SEIA report. The planting statement and estates maps were reviewed. It was cross-checked with land titles on the hectare and there was no new plantingThus, there is no requirement to conduct SEIA for new planting for the group.

Yes

4.7.3.3 Indicator 3 The results of the SEIA shall be incorporated into an appropriate management plan and operational procedures developed,

- Review development plan The planting statement and estates maps were reviewed. It was cross-checked with land titles on the hectare and here was no new planting. Thus, there is no requirement to conduct SEIA for new planting for the group.

Yes







implemented, monitored and reviewed.

(MAJOR)

4.7.3.4 Indicator 4 Where the development includes smallholder schemes of above 500ha in total or small estates, the impacts and implications of how each scheme or small estate is to be managed should be documented and a plan to manage the impacts developed, implemented, monitored and reviewed.

(MINOR)

- Details as per requirement of SEIA report.

The planting statement and estates maps were reviewed. It was cross-checked with land titles on the hectare and there was no new plantingThus, there is no requirement to conduct SEIA for new planting for the group.

Yes

4.7.4 Criterion 4 Soil and topographic information

4.7.4.1 Indicator 1 Information on soil types shall be adequate to establish the long-term suitability of the land for oil palm cultivation.

(MAJOR)

- Government soil map is accepted for approval for planting.

- Subsequently a more details soil survey is required.

The planting statement and estates maps were reviewed. It was cross-checked with land titles on the hectare and there was no new planting.

Yes

4.7.4.2 Indicator 2 Topographic information shall be adequate to guide the planning of planting programmes, drainage and irrigation systems, roads and other infrastructure.

(MAJOR)

- Government topography map is accepted.

- Any company GIS ground verification can be accepted


Yes







4.7.5 Criterion 5 Planting on steep terrain, marginal and fragile soil

4.7.5.1 Indicator 1 Extensive planting on steep terrain, marginal and fragile soils shall be avoided unless permitted by local, state and national laws.

(MAJOR)

- Refer to EIA report. The planting statement and estates maps were reviewed. It was cross-checked with land titles on the hectare and there was no new planting.

Yes

4.7.5.2 Indicator 2 Where planting on fragile and marginal soils is proposed, plans shall be developed and implemented to protect them and to minimize adverse impacts (e.g. hydrological) or significantly increased risks (e.g. fire risk) in areas outside the plantation.

(MAJOR)

- Refer to EIA and development plan.


Yes

4.7.5.3 Indicator 3 Marginal and fragile soils, including excessive gradients and peat soils, shall be identified prior to conversion.

(MAJOR)

- Soil suitability map and management blocking.


Yes

4.7.6 Criterion 6 Customary land

4.7.6.1 Indicator 1 No new plantings are established on recognised customary land without the owners’ free, prior and informed consent, dealt with through a documented

- Refer to 4.7.3.1 The planting statement and estates maps were reviewed. It was cross-checked with land titles on the hectare and there was no new planting Thus, there is no need to conduct FPIC in related to any customary land.

Yes







system that enables indigenous peoples, local communities and other stakeholders to express their views through their own representative institutions.

(MAJOR)

4.7.6.2 Indicator 2 Where new plantings on recognised customary lands are acceptable, management plans and operations should maintain sacred sites.

(MINOR)

- Review management plan. The planting statement and estates maps were reviewed. It was cross-checked with land titles on the hectare and there was no new planting. Thus, there is no need to conduct FPIC in related to and customary land.

Yes

4.7.6.3 Indicator 3 Where recognized customary or legally owned lands have been taken-over, the documentary proof of the transfer of rights and of payment or provision of agreed compensation shall be made available.

(MAJOR)

- Evidence of land use rights and payment made.

The planting statement and estates maps were reviewed. It was cross-checked with land titles on the hectare and there was no new planting. Thus, there is no need to conduct FPIC in related to any customary land.

Yes

4.7.6.4 Indicator 4 The owner of recognised customary land shall be compensated for any agreed land acquisitions and relinquishment of rights, subject to their free prior informed consent and negotiated agreement.

(MAJOR)


Yes







4.7.6.5 Indicator 5 Identification and assessment of legal and recognised customary rights shall be documented.

(MAJOR)

- Refer to land use rights document.


Yes

4.7.6.6 Indicator 6 A system for identifying people entitled to compensation and for calculating and distributing fair compensation shall be established and implemented.

(MAJOR)

- Terms and condition on NCR compensation system.

- Company compensation procedures.

- Court settlement (in cases of disagreement).


Yes

4.7.6.7 Indicator 7 The process and outcome of any compensation claims shall be documented and made publicly available.

(MAJOR)

- Go for public search.

- On-going cases shall be recognized.

The planting statement and estates maps were reviewed. It was cross-checked with land titles on the hectare and there was no new planting. Thus, there is FPIC conducted in related to any customary land.

Yes

4.7.6.8 Indicator 8 Communities that have lost access and rights to land for plantation expansion should be given opportunities to benefit from the plantation development

(MINOR)

- Owners have to prove rightful ownership.

- Employment priority given to them.

The planting statement and estates maps were reviewed. It was cross-checked with land titles on the hectare and there was no new planting. Thus, there is no FPIC conducted in related to any customary land.

Yes

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