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MSPO CERTICATION SUMMARY

REPORT

ABEDON PALM OIL MILL 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 Oil Mill Sdn. Bhd.

Certifying Unit: Abedon Oil Mill Sdn. Bhd.

Client Number: 92-043

Audit Type: Stage 2-Certification Audit

MSPO-F04c / Rev 2 2 of 26

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 .......................................................................................... 10

3. ORGANISATION INFORMATION ................................................................ 12

3.1. Production volume 12

3.2. Maps of Mill Location 13

4. CERTIFICATION ASSESSMENT ................................................................. 14

4.1 Stage 1 – Certification Audit: 14

4.2 Stakeholders’ Consultation 14

4.3 Status of Non-Conformities Previously Identified 17

4.4 Detail of Audit Findings Identified During This Audit 17

5 CONCLUSION .............................................................................................. 21

6 RECOMMENDATION ................................................................................... 22

7 REFERENCES ............................................................................................. 23 Table 7-1: Documents provided by Abedon Oim Mill Sdn. Bhd. 23 Table 7-2: Background investigation and assessment documents 24 Table 7-3: List Of Interviewed Persons And Stakeholders 25

Distribution / Confidentiality / Rights of ownership / Limitations / Responsibilities / Audit Objectives 26

Annex / Enclosures 26







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 Oil Mill Sdn. Bhd., has commissioned TUV NORD Malaysia Sdn Bhd to conduct certification audit for its palm oil mill according to MS 2530-4:2013 Part 4 General principles for palm oil mills.

1.1. Objective

The objective of this certification audit is to assess Abedon Palm Oil Mill by an independent certification body with the aim for compliance of the standards.

1.2. Scope

The certification is based on the documentation developed by the Abedon palm oil mill and Abedon Oil Mill Sdn. Bhd.

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 MS 2530-4:2013 Part 4 General principles for palm oil mills. 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 references were used as part of the assessment; the compliance of the requirements out of the guidelines applied was checked.

1. Malaysian Sustainable Palm Oil Part 4: General Principles for Palm Oil Mill audit guidance;

2. Palm Oil Supply Chain Traceability requirement document no. 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

Graduate in Applied Science (Major In Agrobiology).








Management;

v) Social Sciences and/or Anthropology;

vi) Business Management; or

vii) Other relevant related fields

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)

5 years working experience in palm oil estates.

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.

Under training as 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

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








agriculture, ISO 14001 or Environmental Management Systems (EMS) or High Conservation Value (HCV)

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,

Yes








SCC, RSPO Next and ISCC-EU training.

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


Has conducted 3 MSPO and equivalent sustainability certification (RSPO ) as lead auditor in training

Yes

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

Yes








Tourism, Malaysia)

6 months as Field Technician for University of Montana on HC

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 and MSPO schemes

Yes

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

Yes



Yes



Yes

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


1 year auditor for RSPO 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 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 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 Oil Mill Sdn. Bhd. has been exempted from undergo stage 1 audit process due to the mill has been already certified under RSPO P&C 2013 and Malaysian National Interpretation 2014 standard. Refer to RSPO Certificate number 500 92 028. Further information regarding RSPO certification was available on RSPO official website

Stage 2 – Certification Audit:

Stage 2 certification audit was conducted on 24/01/2018 that 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 Abedon Palm Oil Mill was conducted according to the MS 2530-4: 2013 Part 4: General principles for palm oil mills.

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.

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 and Minor as well as Observations (OBS) may be raised during the audit.

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







3. ORGANISATION INFORMATION

Abedon Palm Oil Mill is the subsidiary of Kretam Holding Berhad located at.56 KM, Jalan Lahad Datu-Sandakan, 90200 Kinabatangan, Sabah.

Abedon CPO Mill met the Malaysia Palm Oil Board licensing requirement. The mill began operation in 25/03/1998 with an operating capacity of 30 MT per hour.

3.1. Production volume

Name of Mill Location Coordinates

Abedon Oil Mill 56 KM, Jalan Lahad Datu-Sandakan, 90200 Kinabatangan, Sabah.

N 05°18'44" E 117°58'44"

Volume for the past year

Jan 2016 to Dec 2016

Actual volumes Jan 2017 to Dec 2017

Projected volume Jan 2018 to Dec 2018

FFB CPO PK FFB CPO PK FFB CPO PK

- - - 124,193.50 23,994.48 5,811.840 126,650 26,212 5,831







3.2. Maps of Mill Location

Figure 1: Location of Abedon Mill on Sabah map.







4. CERTIFICATION ASSESSMENT

4.1 Stage 1 – Certification Audit:

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

Therefore, in this aspect, Abedon Palm Oil Mill was exempted to undergo Stage I audit due to it was already certified under the RSPO P&C 2013 and Malaysian National Interpretation 2014 standard. Refer RSPO certificate number 500 92 028.

The audit team has applied the Malaysian Sustainable Palm Oil Part 4: General principles for palm oil mills 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 24/01/2018.

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, there were 5 observations raised. Further verification on observation raised will be review during the next surveillance audit.

4.2 Stakeholders’ Consultation

TUV NORD Malaysia Sdn. Bhd. has published the public notification on 13/12/2017 as to obtain any stakeholders’ feedback. There were no comments received as at audit date on 24/01/2018.

Invitation letters was sent out to local stakeholders on 28/12/2017 to invite them to attend stakeholders’ consultation meeting on 22/01/2018 to gather information in accordance to Certification Scheme and Stakeholder Consultation requirements.

The topics of discussion are as below:

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

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

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

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

5. Type of wildlife sighted at Abedon Oil Mill 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 Abedon Mill 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 are 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 the awareness of MSPO.

2 Social context There are no social issue 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 CSR programmes.

3 Understanding of “NCR Land”?

There is no NCR land nearby the estates boundary. Stakeholders interviewed such as smallholders and villages do understand and

Positive comment. Company has not received any issues related to land or any boundary land dispute.








taken

explained no issue in regard to land within their area.

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.

Positive comment to the management

5 Does MSPO will largely benefits the local community?

Stakeholders confirmed that they are more involvement by the management in terms of communication via stakeholders’ engagement meeting. Abedon management also provide support to local school and support any local activities.


6 HCV and environmental understanding

The stakeholders are aware to the preserve nature and take 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 c with company.


8 Support to smallholders

Company is supportive to the smallholder by receiving their FFBs. 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 as regards to the grading process.

There are no compromised as regard to FFB quality. FFB grading was conducted in an open and transparent manner.








taken

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

Stakeholder has confirmed that there are no issues related to Abedon Palm Oil Mill activities that affect them. Abedon Palm Oil Mill has provide information to smallholders in FFB grading process.

Positive comment. Company has referred to 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 principles and criteria?

Stakeholders attended the meeting has confirmed no conflict raised against the company 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 been 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 0

MINOR Non-Conformities 0

OBSERVATION 5

Observation < 01 >







Observation < 01 >

Indicator: 4.1.2.2

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.

Location Office, Abedon Palm Oil Mill

Description of Finding / Objective Evidence:

The internal audit form and finding can be further improved to include additional information.

Review of Correction & Corrective / Preventive Action

Action plan received dated 27/02/2018 state improvement on internal audit which include some additional details. It will be reviewed on next surveillance audit.

Closed: Yes No Site verification : Yes No

Name of Auditor:

Ang Wai Sheng, Terence.

Review of Action Plan:

Next surveillance audit.

Observation < 02 >

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

(MAJOR)

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

Location Office, Abedon Pam Oil Mill


Hearing test for 20 workers was conducted on 30/10/2017.Based on result, 14 out of 20 personnel have hearing impairment. There is no recommendation from the doctor since this is a newly appointed Doctor. Abedon POM management may consider seeking advice to conduct a retest for those workers that have hearing impairment based on previous doctor reports.


Action plan received dated 27/02/2018 states second audiometric test was conducted on 26/01/2018 for six workers with hearing impairment. The second audiometric test which was compared with the baseline data indicates that out of six, four workers are having hearing impairment.. These 4 workers are given PPE training, and has been transferred to another station. They will undergo audiometric test every three months. Implementation will be review in next surveillance audit.


Name of Lead Auditor:



27/02/2018.

Observation < 03 >







Observation < 03 >

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 Office, Abedon Oil Mill


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


Action plan received on 27/02/2018 confirmed the workers contracts have been revised by adding a statement of overtime rate which referred to Sabah Labour Ordinance. The implementation of action plan will be review in next surveillance audit.


Name of Lead Auditor:



27/02/2018.

Observation < 04 >

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

Location Schedule waste store, Abedon Palm Oil Mill


The list of scheduled waste in the environment management plan could include SW410 (contaminated rags & gloves), SW408 (waste chemicals) and SW110 (e-waste).


Action plan received on 27/02/2018 states the Environmental Management Plan was revised to include SW410, SW408 and SW110 in the list of scheduled wastes. Further review on implementation will be conducted on next surveillance audit.


Name of Auditor:

Leong Sak Kuan


27/02/2018.

< Observation < 05 >

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

Location Office, Abedon Palm Oil Mill


Procedure on chemical handling could include the type of PPE to be used.







< Observation < 05 >


Action plan dated 27/02/2018 states that Standard Operation Procedure for chemical handling has been revised with list of PPE was added. Review on implementation will be conducted in next surveillance audit.


Name of Auditor:

Leong Sak Kuan


27/02/2018.







5 CONCLUSION

Abedon Oil Mill Sdn. Bhd. has commissioned TUV NORD (Malaysia) Sdn Bhd to conduct stage 2 Certification audit for its mill according to MSPO 2530-4:2013 Part 4 General principles for palm oil mills. Five Observations were raised in this audit that will be verified in the next surveillance 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 2530-4:2013. Part 4.

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

Certified CPO January to December 2017: 23,994.48 mt

Certified PK January to December 2017: 5,811.84 mt

(Projected) Certified CPO January to December 2018: 26,212.00 mt

(Projected) Certified PK January to December 2018: 5,831.00 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.

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

Cheong, Chun Yuen (Robert)

TUV NORD (M) Sdn Bhd

Certifier / Approver







7 REFERENCES

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

Client Reference Document

Sustainable Policy dated 02/01/2018

Occupational Safety and Health Policy dated 03/01/2017

Social Policy dated 03/01/2017

Environmental 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 Abedon Palm Oil Mill dated 15/12/2017 and 10/01/2018.

Management Review dated 17/01/2018

Continuous Improvement Plan dated 15/01/2018

Stakeholder meeting minutes dated 24/07/2017

List of Document and Transparency Status dated 21/03/2018

Contract agreement with contractors

Weighbridge tickets

List of Abedon POM licenses.

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







Client Reference Document

Evaluation on Social Impact Assessment dated 16/01/2018

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

Operational Safety and Management Plan dated 01/10/2017

Environmental Management Plan dated 23/01/2018

Environmental Aspects and Impacts Assessment dated 23/01/2018

Water management Plan dated 09/01/2018

Table 7-2: Background investigation and assessment documents

Reference Document

Malaysian Sustainable Palm Oil Part 4: General Principles for Palm Oil Mills Audit Guidance

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

Code of Good Milling Practice for Palm Oil Mills







Reference Document

Employment Act 1995

Employees Social Security Act 1969-Act 4 (SOCSO)

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

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







No. Name Organisation / Function

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 4 for Palm Oil Mill P & C Report

Company Name: Abedon Oil Mill Sdn. Bhd. Client No: 93-043

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

MSPO-F05c / Rev 2 Page 1 of 49

Item Description

1. Company Name Abedon Oil Mill Sdn. Bhd.

2. Certifying Unit Abedon Oil Mill 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 Palm Oil Mill

KinabatanganSabah, Malaysia

6 Geo Coordinates of Palm Oil Mill

N 05o 18’ 44.4” E 117

o58’ 26.4”

7 Contact Person Name: Mr Shim Thou Hung Tel: +6089-218 999 Mobile: +6019 8335653 Email: [email protected]

8 Date of Audit 24/01/2018

9. Audit Team Members

Team Leader / LA Mohamad Norhisham Bin Mohd Salleh

Auditor Member Ang Wai Sheng, Terence ; Leong Sak Kuan ; Zul Hairi 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)

- A written statement to indicate commitment to implementation of MSPO, signed by CEO or Head of Mill / Engineering Department

- A written policy statement on the commitment towards sustainable production of palm oil. This policy shall be communicated to all levels of the workforce and stakeholders

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

The company has established Sustainable policy dated 02/01/2018 sign by, Group Chief Executive Officer. The policy was available in both English and Bahasa Malaysia. The Policy is publicly display at the notice board of mill and available at company website.

MSPO Training has been conducted on 22/01/2018

Interviews with the workers they could demonstrate the understand of MSPO and its requirement

Yes

4.1.1.2 Indicator 2 The policy shall also emphasize on the commitment to continual improvement with the objective of improving the milling operation.

(MAJOR)

- The policy shall indicate commitment towards continuous improvement in milling operations

Under the Sustainable policy dated 02/01/2018 sign by, Chief Executive Officer states “to implement good agricultural practices and good milling practices for sustainability in business”.

The policy was implemented and stated in the management review.

Yes

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)

- Internal audit plans should be documented

- Internal audit should be conducted to highlight strong and weak points in the specific area that needs further improvement

- Assessment of internal

SOP for internal audit “Internal Audit Procedure” KHB/G/SOP-49 revision 04/10/2018 was reviewed.

Point 5.1 states internal audit shall be conducted on quarterly basis every 12 month.

Point 5.4 states agreeing on finding of which the time frame used to close specify at 60 days. In additional to this, the root cause, correction and corrective action shall be documented on the

Yes







documents:

MSPO internal audit procedures document

Internal audit report/results, including non-conformities, if any.

Mechanism of follow-up activities such as verification of the actions taken & the reporting of verification results is to be established.

Evaluation of the competency of internal auditors

original form.

Point 5.6 states a second verification to be conducted if it was found to be unsatisfactory on the first internal audit. Second verification was conducted on 10/01/2018.

First internal audit was conducted on 15/12/2017. This was follow-up with second internal audit conducted on 10/01/2018.

There were 6 findings found during internal audit and were closed.

Internal audit conducted by:

Estate/mill

Research and Environmental Protection Dept. Officer

Research and environmental Protection Dept. Officer

Head of research & environment protection

Secretary – SEM Dept.

GMP Admin Clerk

Bode Est. Clerk

In order to ensure the competency of internal audit auditor training has been conducted on 09/12/2017 attended by 10 participants including those stated above.

Training presentation was reviewed. The training conducted include all indicators of MSPO standard Part 4 applicable for the mill .estates(part 3)

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

- The findings made by the internal auditor shall be documented

Both first and second internal audits have been documented.

Corrective action and root caused analysis were captured

For example

4.2.1: Appointment letter for MSPO in charge

OBS1







action.

(MAJOR)

Root cause: The documents are in progress to be prepared

Action plan: To updates the pending document as per MSPO required by 19/01/2018

4.5.3: Distance landfill from housing

Root Cause: The document is in placed but no stated the distance

Action plan: The document will be updated to include the distance from landfill to

the housing site

4.2.3.2: Traceability internal audit report

Root cause: The document is in progress to be prepared by Internal Audit Team

Action plan: Internal audit team will prepare the report by 15/01/2018

Observation:

The internal audit form and finding can be further improved to include additional information.

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

(MAJOR)

- The decisions arising from the internal audit shall be documented

- Top management review comments shall be minuted.

Management review meeting was conducted on 17/01/2018.

Point 2.0.13 “Second internal audit rectification - Results” have been discussed.

During the management review, chairman has reminded the respective HODs to identify all the findings and to evaluate the weakness and root cause.

Yes

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)

- Management review report shall be documented

- Minutes of management meetings shall be reviewed

- Assessment of internal documents:

Agenda and minutes of management review meeting

Management review meeting was conducted on 17/01/2018.

Among presented includes:

1. Senior estate manager

2. Tanaki Estate Manager

3. Kolopis Estate Manager

4. Assistant Maintenance Engineer Abedon Palm Oil Mill

Point 1.1. “Confirmation of minute of previous meeting held on

Yes







Internal audit report

Results of corrective action plan

- Improvement plan and timeline for implementation

18/12/2017.

Meeting minute was accepted.

Improvement plan include new practices and improved practices such as FFB grading, FFB forecast and production have been captured.

There are several points discussed in management reviews that are related to the mill:

6.0.1 Traceability

4.2.1 FFB production and oil extraction rate

Discuss on the amount of FFB (Fresh Fruit Bunches) received and the extraction rate.

4.2.3 Effluent Treatment Plant

Previous management review meeting dated 18/12/2017.

The management has considered the MSPO certification in January 2018.

Topics include:

- PPE

- FFB Grading

- Traceability

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)

- Such action plan shall be made available to the auditors.

- To include the 3P’s

People

Planet

Profit

Continuous improvement plan has been revised on 15/01/2018.

The plan is for 3 schemes ISCC, RSPO and MSPO. The plan covers topics such as:

1. Environment

2. Waste Reduction

3. Pollution and emission reduction

4. Social impact

5. Health and Safety

6. Legal Compliance

Yes







7. RSPO Supply Chain Certification Standard (RSPO SCC)

Example

Environmental

Progressive removal of water plant and weeds at water catchment ponds that cause pollution

Water pond free of weeds

Status: Ongoing

Waste Reduction

Schedule waste store expansion upgrade

Proper schedule waste storing and keeping

Status: Completed on 12/2017

Pollution and Emission Reduction

Develop specific plan to reduce and minimize GHG based on the GHG calculator

Proven reduction GHG emission

Status: An energy efficiency plan is developed to reduce energy usage thus reduce diesel consumption

Social

Providing education for the workers children (CLC)

Improved CLC facilities

Status: Ongoing

4.1.4.2 Indicator 2 The company should establish a system to improve practices in line with new information and techniques; and for disseminating this information throughout the workforce.

- Verify the system.

The system must be able to establish the validity or practicability of the new

SOP “Improvement and new information procedure” AOM-ADM-INI dated 01/02/2017.

Person in charge stated in point 3

MM (Mill manager) shall be responsible to approve any new

Yes







(MAJOR) practices before being adopted.

Training matrix proposed to enable understanding and adoption of improved practices.


Continuous 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 and their timeline

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

- Interview of personnel and stakeholders regarding the following:

practices

Engineer shall gather any new information related to milling practices

Admin department shall update any new information.

SOP states that “every month, admin department shall obtain any announcement or news related to mill from website, bulletin or brochure.”

Point 7 “process flow chart” states the process from obtaining the information to the performance review.

Communication in regards to legal update “Peraturan-peraturan (Dandang stim dan pengandung tekanan tak berapi) kilang dan jentera (pindaan) 2017” was communicated to workers.

Review budget for year 2018 includes continuous improvement on milling practices.

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 adequate information to other stakeholders on environmental, social and legal issues relevant to sustainable practices in the relevant languages and forms.

(MAJOR)

- Requests, responses and release of information must be recorded (refer to 4.2.2.3)

- Assessment of internal documents.

External stakeholders meeting was conducted on 24/07/2017 to distribute information..

The mill has established Information requisition form KHB-HR-P07/F01.

Abedon POM has established request of Information record.

Example request for information:

Requester Name: Klinik Mansor Sdn. Bhd.

Information requested: copy of document for each work unit.

Purpose: For DOSH reporting

Document provided: Document provided by mill for Klinik Mansor’s Medical Surveillance Report.

Approved by: Abedon Mill Manager.

Feedback from stakeholders during stakeholders’ meeting they could demonstrate they understand and aware on matters related to them.

On site living quarter was inspected. Notice boards were inspected with company policies translated to Bahasa Malaysia language understood by local and Indonesian workers Complaint procedure is translated and available in the notice board at the housing compound.

Yes

4.2.1.2 Indicator 2 Management documents shall be publicly available, except where this is prevented by commercial confidentiality or where disclosure of information would result in negative environmental or social outcomes.

(MAJOR)

- For public listed companies the annual reports are the accepted primary public documents

Mill has established publicly available document for the List of Document and Transparency Status. The latest updated of the list was on 21/03/2017.

Example of documents available:

1. Land titles, mill location and map.

2. Group Social Impact Assessment, May /June 2017

3. Group Environmental Impact Assessment, December 2017

4. List of Group Policies such as Sustainable Examples: Policy dated 02/01/2018 and Human Right Policy dated

Yes







03/01/2017.

5. Group Continual Improvement Plan

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)

- SOP e.g. Enquiry Register Book to record request for information from relevant stakeholders


- Verify records for appropriateness & effectiveness of the actions taken/ follow up actions required (if any).

- Interview with personnel and stakeholders:

Awareness of consultation and communication procedures

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

-

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

1. Person in -charge for communication: Manager / Senior Estate Manager (SEM) / Chief Plantation Officer(CPO).

2. Procedure details state involvement of local communities and other affected or interested parties.

Interviews with stakeholders in stakeholder consultation, dated 22/01/2018 indicates that they are aware and understand as regards to requesting and receiving information from Abedon Palm Oil Mill.

Yes

4.2.2.2 Indicator 2 The management shall nominate management officials at the operating unit responsible for issues related to Indicator 1 (4.2.2.1)

(MINOR)

- Discretion of the companies

- Appointment letters For Abedon Palm Oil Mill, person in charge for communication and consultation is the Mill Manager.

Sighted appointment letter dated 01/03/2017 signed by Group Plantation Director and valid for three years from 01/03/2017 to 28/02/2020.

Yes

4.2.2.3 Indicator 3 A list of stakeholders, records of all consultation and communication

- Verify records.

- Lists of stakeholders Mill has established stakeholders list which include authorities, villagers, schools, transporters, neighbors, collecting center,

Yes







and records of action taken in response to input from stakeholders shall be properly maintained.

(MAJOR)

- Communities in the area / neighbourhood

- Employees

certified smallholders, uncertified smallholders, refinery and others (NGO).

The latest update of the list was on 05/12/2017.

Latest Stakeholder meeting for Lahad Datu region was held on 24/07/2017.

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

At the question and answer session, question raised were responded by KHB personnel. Meeting minutes sighted and reviewed Q & A raised.

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.

Answer: Human Resource Manager, Inform that KHB Lahad Datu region will be audited by CB in August 2017 and further information will be updated at group website.

4.2.3 Criterion 3 Traceability

4.2.3.1 Indicator 1 The management shall commit itself to implement and maintain the requirements for traceability and shall establish a standard operation procedure for traceability.

(MAJOR)

Own estate ;

- Weighbridge ticket- estate, field.

To conduct pre and post traceability.

Sales agreement/ undertakings between estate and mill

External supplier;

- Weighbridge ticket- licensed supplier

To include pre and post

Abedon Oil Mill has established SOPs master list.

Prepared: Quality Control Supervisor (23/01/2018)

Approved: Mill Manager (23/01/2018)

Example of SOPs:

Production planning working

Handling incoming material / product

Processing FFB

Handling of CPO & PK final dispatch

SOPs was available in mill office in English and Malay language.

Yes







traceability. Delivery notes and mill weighbridge tickets of FFB from Kolopis Estate and Tanaki Estate were has sighted.

Example

Tanaki Estate.

D.O No: 67617

Date: 06/12/2017

Mill weighbridge ticket no: 040563

Weight: 3.03 mt

Bumiwealth Division

D.O No: 04651

Date: 10/01/2018


Weight: 5.13 mt

Inobong Division

D.O No: 24199

Date: 21/12/2017


Weight: 10.99 mt

Sg Segama Division

D.O No: 01085

Date: 21/12/2017


Weight: 11.03 mt

Kolopis Estate

D.O No: 73537

Date: 16/01/2018








Weight: 8.63 mt

Outsid FFBs suppliers

Styleland Sdn Bhd

MPOB License: 5034712202000

Date License: 01/03/2017-28/02/2018

Do no: 19569

Date: 22/01/2018

Mill weighbridge ticket no.: 044447

Weight: 8.720 mt

Intan Sawit Enterprise

MPOB License: 544830015000

Date license: 01/01/2018-31/12/2018

Do no: 5423

Date: 22/01/2018


Weight: 27.78 mt

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

(MAJOR)

- Internal check on a regular basis as per SOP on traceability.

- Internal audit


- Visual inspection:

Checking of fresh fruit bunches for identification

Note: Individual oil mills can develop their own traceability system documentation. Alternatively they can refer to the

SOP for the Identification & Traceability Doc No: AOM-ADM-TRB Rev No: 0 Effective Date: 01/12/2017 was reviewed.

Content:

1. Identification of FFB supplier, a copy of license MPOB.

2. Receiving of FFB.

3. All FFBs shall be weigh and weighbridge ticket shall include contain information related to the sustainable requirement.

4. The FFBs recorded in log book according tosource of FFB with detail of time, weight, transportation number, source and supplier weight if available.

5. Unloading of FFB.

Yes







guide by MPOB (see Annex 1).

6. Processing of FFB.

7. Production

8. Identification buyer

9. Product dispatch

10. Documentation.

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

(MINOR)

- An executive to hold ownership to maintain the implementation traceability system

- Training of employees

Training master list program 2018 is established dated 20/12/2017 and approved by mill manager.

The mill has established organization chart for MSPO team, the person in charge for the traceability is mill office staff and appointment letter was signed both parties on 02/12/2017.

Training for the traceability was conducted on 22/01/2018. for traceability and how to operate the weighbridge.

Yes

4.2.3.4 Indicator 4 Records of storage, sales, delivery or transportation of crude palm oil and palm kernel shall be maintained.

(MAJOR)

- Verify documents

- Hard or soft copies are accepted

Mill retain records related to its products: CPO and PK.

Example of CPO delivery

The Crude Palm Oil (CPO) going out from the mill to the company GE was recorded at the weighbridge.

Contract agreement for the Crude Palm Oil (CPO) selling to Company A dated 28/11/2017 contract No: GEO/WLK-EL/243/12/17 (RSPO-MB) quantity for the contract xxx mt. records of delivery from 16/12/2017 to 26/12/2017 for amount of 497.28mt to Company A was sighted.

2) Example of PK delivery.

Contract agreement no: LDO/36P1712/0043L for the Palm Kernel (PK) Company A dated 27/12/2017 for contract of XXX mt of Palm Kernel was sighted. Records of delivery for January 2018 for Palm Kernel (PK) to Company A, the extra amount of XX mt was based on a new contract agreement no: LDO/36P1801/0031 dated 11/01/2018.

Yes

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)

- Verify compliance

- MPOB to list down the ratified International Law and Regulations applicable

- Interview of personnel and site management:

Awareness of the applicable laws and regulations

Compliance with the applicable laws and regulations and on-going efforts of compliance



Ability of site management to demonstrate compliance of the relevant laws (e.g. concerning storage of scheduled waste, bulk fuel storage

Reference:

Annex 1 - List of international laws ratified by Malaysia

Annex 1 – List of applicable state and national laws applicable to the palm oil industry

Bomba Annual Inspection” was reviewed.

Last inspection was conducted on 23/01/2018 by DOSH officers.

Result

“Semasa pemeriksaan djalankan, didapati semua keperluan dan kehendak-kehendak kebombaan berada dalam keadaan baik dan berfungsi dengan baik semasa pemeriksaan”

Walaubagaimanapun terdapat keperluan yang perlu dipatuhi

i. Sistem (SPKA) perlu diadakan di kilang ini

Sistem pengawasan kebakaran automatic (SPKA)

ii. Mengadakan latihan menetang kebaran untuk pasukan ERT

To be addressed

Point no 1. Management will contact the contractor to fix the equipment

Point no 2 a Training plan for fire drill & fire extinguisher Safety and operational was planned in February 2018.

Business Licence No: 628/2018 valid until 31/12/2018

MPOB license no: 500244604000

Validity: 01/12/2017 – 30/11/2018

DOE license No; 004521 Validity: 23/05/2017 – 30/06/2018

Boiler license for Boiler no. 1: No pendaftaran: PMD 10332 Validity till: 03/04/2018

Boiler license for Boiler no 2 No pendaftaran: SB PMD 128 Validity till: 16/11/2018

JKKP inspection (Boiler) Conducted on: 20/09/2017

Pemeriksaan Pertama jentera

No siri: MW/309/17

Boilerman (Perakuan kebolehan Peraturan 5(2))

No perakuan: H/ED/48/03

Yes







During interview of workers, they are aware of the law that need to comply.

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

(MAJOR)

- Verify the following:

List of applicable laws and regulations.

List of relevant licenses, certificate of fitness, etc.

Check on expiry date

Mill has established list of laws that are applicable. Total 42 legal documents available.

The examples of legal documents available.

1. Sabah land rules 1930

2. Land ordinance (Sabah cap 68)

3. Drainage & irrigation ordinance 1956

4. Environmental quality (prescribed premises) (crude palm oil) order 1977

5. Environmental quality (schedule waste) 2005

6. Occupational safety and health act 1994

7. Factories and machinery act 1967 (act139)

8. Human rights Commission of Malaysia act 1999 (act 597)

Yes

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)

- Verify the register Mill has established SOP “Improvement and new information procedure”.

The management have communicated all updates to the respective department.

Example:

Sabah Labour ordinance 1950 and “minimum wage order” 2016 available.

New regulation on levy w.e.f from 01/01/2018

Memo on the levy was circulated on 24/01/2018 by Sustainability manager to all estates and mills managers. The memo states “ 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

- Executive or appointed personnel to hold ownership to

Yes







compliance and to track and update the changes in regulatory requirements.

(MINOR)

maintain the regulatory requirements.

KHB has appointed personnel to monitor, keep track and update the changes on regulatory requirements.

1. Human Resource cum sustainability manager

2. Head of research and environment protection department

3. Estate manager, senior estate manager

4. Mill manager

Example

Human resources manager cum sustainability manager

Immigration act (act 155)

Head of research and environment protection department

Pesticide act 1974

Mill manager Environment quality act 1978

Memo on the levy was circulated on 24/01/2018 issued by the Sustainability manager to all estates and mills managers. The memo states discontinuation of levy deduction for all foreign workers within Kretam Holdings Berhad Group with effect from 1

st January 2018”

4.3.2 Criterion 2 Land use rights

4.3.2.1 Indicator 1 The management shall ensure that their oil palm milling activities do not diminish the land use rights of other users.

(MAJOR)

- Verify land ownership or land use rights

Sabah Syarat-syarat Nyata.

Sarawak - Land title, Provisional Lease (PL), License for Planted Forest (LPF) are acceptable.

- Verification of land use rights

The mill is located in Kolopis estate, Bumiwealth division.

Kolopos estate land title is CL type and was reviewed to confirm land is owned by Abedon Sdn Bhd, an associate of Abedon Palm Oil Mill.

The mill is located in the estate land and does diminish the land use rights.

Yes







by means of official/legal 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

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)

- Verify land ownership or land use rights

The mill is located in Kolopis estate, Bumiwealth division.

Kolopos estate land title is CL type and was reviewed to confirm the land is owned by Abedon Sdn Bhd, an associate of Abedon Palm Oil Mill.

Yes







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

(MAJOR)

- Refer to estate titled land (PL or LPF) as some Mills are inside estate titled land

- Site verification and verify record

The mill is located in Kolopis Estate, Bumiwealth division.

Kolopis estate land title is CL type and was reviewed to confirm land is owned by Abedon Sdn Bhd an associate of Abedon Palm Oil Mill

The estate map was reviewed to cross-check the mill location.

Yes

4.3.2.4 Indicator 4 Where there are, or have 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)

- Verify record The mill is located in Kolopis Estate, Bumiwealth division Kolopos estate land title is CL type and owned by Abedon Sdn Bhd an associate of Abedon Palm Oil Mill

Therefore, no FPIC required.

Yes

4.3.3 Criterion 3 Customary land 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)

- Assessment of internal documents

The mill is located in Kolopis Estate, Bumiwealth division

The mil has been in operation since 1998. There were no complaints or disputes raised since until now.

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

- Verify record

Refer 4.3.2.1 and 4.3.31 above Yes

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

(MAJOR)

- Verify record Refer 4.3.2.4 above Yes

4.4 Principle 4 Social Responsibility, health,







safety and employment condition

4.4.1 Criterion 1 Social impact assessment (SIA)

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

(MINOR)

- Verify the assessment report

- Feedback from local community

- Social impact assessment can be conducted internally


Note:

Identification of social impact may be carried out internally in consultation with the affected parties.

Oil mill management may have a social impact on factors such as:

1. Access and use rights 2. Economic livelihood and

working conditions 3. Subsistence activities 4. Cultural and religious values 5. Health and education facilities 6. 6. Other community values,

resulting from changes in improvement of transport / communication / influx of migrant labour force.

Abedon Palm Oil Mill has established social Impact Assessment dated 16/01/2018, prepared by Quality control supervisor, checked by Sustainability Executives and approved by Mill Manager.

There are two main factors being discussed:

1) Workers

Factor related:

- Access and use rights

- Economic livelihood

- Cultural and religious value

- Health and education facility

- Any other community values

2. Smallholders

- Hak hak pengguna

- Kegiatan ekonomi

- Kegiatan substensi

Other factors discussed in the group level

Social Impact Assessment and time bound plan for Lahad Datu Region 2017 prepared on May / June 2017, date review 21/12/2017 and next review will be at December 2018.

The SIA include the mill.

Example of issue sighted:

1) Positive impact

Social implication: Relationship between employer and employee are in good condition.

Action Plan: Cooperation between both parties will be continued.

Yes







Responsibility: Management team.

2) Negative impact:

Social implication: Vehicle services to send patients to the hospital

Long term plan: The request forwarded to top management

Responsibility: Management Team

Timer frame: 3 month

Status: The problem has been solved by replacing the pickup truck to van.

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)

- Complaints and grievances procedure:

Establish a system to filter out irrelevant complaint (not related to MSPO)

Establish a system to deal with it


- Interviews with personnel and stakeholders:

Awareness of complaints and grievances procedures and how to make complaints

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

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

Page 5 of the Complaint Procedure includes a flow chart that states complaint must be address within 30 working days.

Borang aduan / rungutan KHB-HR-P05/F01 dated 01/06/2017 and borang rayuan KHB-HR-P05/F02 dated 01/06/2017 were established for any complaints or grievance

Complaint procedure is available in bilanguage, Bahasa Malaysia and English and displayed at mill notice board .

Yes

4.4.2.2 Indicator 2 The system shall be able to resolve - Acknowledgement of the The mill has established Rekod Membuka Peti Aduan Yes







disputes in an effective, timely and appropriate manner, which is accepted by all parties.

(MAJOR)

decision by both parties Grievance record has been sighted and reviewed.

Other records available such as Laporan Kerosakan peralatan Rumah

Example Request for repair: Worker A

Date: 11/12/2017

Issue: Outdoor light was not functioning.

Action taken by: Mill Staff

Date: 16/12/2017

4.4.2.3 Indicator 3 A complaint form should be made available at the premises, where employees and affected stakeholders can make complaints.

(MINOR)

- Verify availability of complaint forms

The compliant form is available at the mill office and the main entrance gate .

Yes

4.4.2.4 Indicator 4 Employees and the surrounding communities should be made aware of its existence and that complaints or suggestions may be made at any time.

(MINOR)

- Notice board to inform all concerned about the availability of complaints form and the drop boxes

Grievance training has been conducted on 23/01/2018 by Mill Manager and attended by staffs and workers.

Grievance training for stakeholder was conducted 23/02/2017 by mill manager which involved stakeholders such as nearby villagers and smallholders.

Yes

4.4.2.5 Indicator 5 Complaints and resolutions within the past 24 months shall be documented and made available to affected stakeholders upon request.

(MAJOR)

- Verify the document and check those not resolved in 24 month

There are no complaints for grievance received for year 2017.

Other records sighted Laporan Kerosakan Peralatan Rumah.

Yes

4.4.3 Criterion 3 Commitment to contribute to local sustainable development

4.4.3.1 Indicator 1 Palm oil millers should contribute to local development in consultation with the local communities. Where the mill is an integral part of a plantation, such contribution to local community development may be regarded as a

- Documented evidence of positive contribution to the community

- Joint activities carried out with estates are accepted

- Assessment of internal

KHB has established Group Level CSR for Lahad Datu Region.

Examples of CSR for year :

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

2. Donation to Sabah Society for the Blind

Yes







joint effort by the mill and the plantation.

(MINOR)

documents 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 which is in line with Occupational Safety and Health Act 1994 and Factories and Machinery Act 1967 (Act139) shall be documented, effectively communicated and implemented.

(MAJOR)

- Verify document and assess the implementation

Operation safety management plan dated 01/10/2017 – policy, responsibility, risk assessment, emergency response, accident report.

Health & Safety policy approved by Chief Executive Officer dated 03/01/2017.

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

- Compliance with 4.4.4.1 Policy is displayed at various notice boards. Verified understanding of policy for workshop workers and water treatment plant attendant.

Yes

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

- Verify risk assessment report e.g. HIRAC.

HIRARC report dated 03/09/2017 for various operations, e.g. loading ramp, sterilizer, press station, etc.

Boundary Noise Exposure Monitoring Report for year 2017 was conducted by Rehpro Scientific Sdn Bhd on 18/08/2017.

Conclusion of the report states that “the average noise level monitored during day and night time at most of the monitoring points are within the acceptable limits of the DOSH guidelines”.

Hearing test was conducted on 30/10/2017 at,Klinik Mansor . The Klinik is registered with DOSH registration HQ/08/DOC/00/695)

Observation:

Hearing test for 20 workers was conducted on 30/10/2017. Based on result, 14 out of 20 personnel have hearing

OBS 2







impairment. There is no recommendation from the doctor since this is a newly appointed Doctor. Abedon POM may consider seeking advice to conduct a retest for those workers that have

hearing impairment based on previous doctor reports.

c) An awareness and training programme which includes the following requirements for employees exposed to chemicals used at the palm oil mill:

- Verify training record: Yes

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

- Safe working practice. The mill has conduct relevant trainings to workers and staffs.

Example of trainings conducted:

1. Fire Hydrant Drill & briefing conducted by Mill technician on 22/12/2017 attended by mill workers.

2. In house training Occupational Safety and Health by NIOSH on 21/12/2017-22/12/2017 attended by mill workers.

3. 3)Crane Safety And Operation Training on 29/10/2017 attended by mill workers .

Yes

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

- MSDS of chemicals used (products refers to chemicals used at palm oil mill)

MSDS of chemicals and lubricants are displayed at all relevant work areas, e.g. store, water treatment plant and decanter plant. Verified observance of all precautions, e.g. in case of emergency and PPE requirements

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 Identification, Risk Assessment and Risk Control (HIRARC)

- Visual observation and verification of records.

Sighted adequate PPE used by workers, e.g. Water treatment plant and chemical storage – face mask, goggles, gumboots, gloves.

Yes

e) The management shall establish Standard Operating Procedure for

- Verify SOP (Check on the compliance and Chemical

SOP no. AOM-ADM-OSH/SOP-24 for Chemical Handling, rev.0, Yes







handling of chemicals to ensure proper and safe handling and storage in accordance to Occupational Safety Health (Classification Packaging and Labeling) Regulation 1997 and Occupational Safety Health (Use and Standard of Exposure of Chemical Hazardous to Health) Regulation 2000.

Register requirement – this should applies to both estates and mills.

02/02/2018 is established.

Sighted adequate PPE used by workers, e.g. Water treatment plant and chemical storage – face mask, goggles, gumboots, gloves.

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

- Responsible person(s) for workers health, safety and social aspects.

Mill engineer and cadet engineer were appointed as coordinators for safety and health, appointment letter dated 03/01/2018 signed by mill manager

Yes

g) The management shall conduct regular two-way communication with their employees where issues that affect their business such as those related to employee's safety, health and welfare are discussed openly. Records from such meetings shall be kept and the concerns of the employees and any remedial actions taken shall be recorded

- Verify minutes of meetings. (Follow estates guidelines).

OSH meeting conducted quarterly as per DOSH requirement. Latest meeting conducted on 05/12/2017 attended by management and staff.

Agenda of the meeting includes review of previous meeting, safety & health statistic, work place inspection results, training plan, result of emergency drill. Minutes and attendance recorded.

Yes

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

- Verify documented procedures and random interview with employees.

- Emergency shower and eye wash to be provided in the lab.

Emergency response plan, team and emergency response procedure are established.

Emergency shower and eye wash available at lab, store, WTP and decanter plant.

Fire drill conducted on 22/11/2017 and Bomba hose on 22/12/2017. Result of fire drill was 1 min. 6 sec. Reports and attendance recorded.

Interviews with workers and staff they understand emergency

Yes







procedure and measures when emergency situation occurs.

i) Employees trained in First Aid shall be present at all mill operations. First Aid equipment should be available at each worksite

- Verify training records and check availability of First Aid equipment particularly in the workshop, lab, supervisor’s office and the general office.

- Inspection of, for example:

First aid kits, emergency equipment, personal protective equipment (PPE), Emergency shower and eye wash to be provided at the lab.

Danger / warning signage’s, safety instructions, MSDS/CSDS, emergency actions.

Availability of PPE storage facility.

Verified adequacy of first aid kits at store, water treatment plant, workshop and decanter plant. MSDS and danger signs are installed at relevant areas, e.g. chemical store and scheduled waste store.

Occupational first aid, CPR and AED (automated external defibrillator) training conducted 0n 13-14.10.17 by CERT Academy. Attendance record sighted.

Verified workshop first aider attended the training.

Yes

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

- Verify records

- Review during OSH Committee meeting

- Visual inspection and assessment of internal documents:

Occupational Safety and Health Policy

Records of OSH Committee Meetings, agenda, minutes, attendance list

Manuals or procedures concerning health and

One accident reported for the past year. Incident investigation report dated 07/12/2017 for accident between CPO tanker and contractor lorry on 06/12/2017. No injuries recorded. Fault is the lorry driver.

Police report ref no. 2017/003599. Will be reviewed in next OSH meeting due in March 2018.

Monthly record on first aid kit usage maintained.

Verified adequacy of first aid kits at store, water treatment plant, workshop and decanter plant. MSDS and danger signs are installed at relevant areas, e.g. chemical store and scheduled waste store.

Yes







safety

Safety risk assessments and their controls (periodically reviewed)

Annual training programme on safety aspects e.g. First Aid

Training, records of training attendance

PPE issuance and replacement record

Accident and emergency response procedures

Records of accidents and investigations reports

Internal audit reports concerning

safety aspects, possibly occurred non conformities, reports on action plan and implementation

Warning signs installed in all areas with assessed risks

Evidence of qualification of personnel in charge of safety and health

- Interview personnel regarding the following:

Knowledge of occupational safety and health policy and







implementation

Knowledge of job risks and controls

Knowledge of accident plans, emergency plans, and use of emergency equipment’s

Use of personal protective equipment, cleaning and storage

Knowledge of danger and warning signs, safety instructions and emergency actions

- Inspection of, for example:

First aid kits, emergency equipment, personal protective equipment (PPE), emergency shower and eye wash to be provided at the lab

Danger/warning signage’s, safety instructions, MSDS/CSDS, emergency actions

- Availability of PPE storage facility

4.4.5 Criterion 5 Employment conditions

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

- Verify policy signed by top management and communicated in any way

- Displayed at Mills’ general notice board

KHB has established Social Policy dated 03/01/2017 signed by Chief Executive Officer.

Interviews with workers indicates they are aware and understand their right as a workers.

Yes







(MAJOR)

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)

- Random feedback from employees on any discriminatory practices

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

During the site interview with Mill workers, it was noted the sampled workers of both gender, male and female that there has not been any discrimination at the work place. The operators mention that they are not discriminated and treated fairly.

Yes

4.4.5.3 Indicator 3 Management shall ensure that employees’ pay and conditions meet legal or industry minimum standards 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)

- Check collective agreements and verify compliance with legal requirements on minimum wage

Mill has established payroll summary for each month. It could confirm the wages paid is in accordance to Minimum wages order 2016 and Sabah Labour Ordinance.

Sighted pay slip of worker

Example:

1) Worker A

Type of work: general; factory worker

No. of work days: :25. Rate per day RM36.90

Earnings (RM)

Deduction (RM)

Daily rate 922.50

Holiday 36.9

Overtime 548.91

Levy 56.25

Total

Net total 1,452.06

2) Worker B

Type of work: general; factory worker

Yes







No. of work days:22. Rate per day: RM35.40

Earnings (RM)

Deduction (RM)

Daily rate 778.80

Holiday 35.40

Overtime 446.92

EPF 91.00

Socso 6.25

Total 1,261.13 97.25

Net total 1,452.06

Sighted Permit Potongan Gaji from 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

A memo regarding the discontinuation levy deduction for foreign workers dated 24/01/2018 sign by Head of Human Resource and Sustainability distributed to all 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.

(MINOR)

- Letter confirming compliance signed by the contactor. (including records of payments)

- Check the contractor’s agreement and compliance to it

Abedon Palm Oil Mill contractors for transportation of CPO and PK and temporary works such as road and buildings projects. Sighted wage paid by contractors to their workers are in line with the minimum wage order 2016. Sighted Payment slip of contractor’s workers:

1) Worker A Month: December 2017 Amount: RM 2, 874.04

Yes







Work: Sending FFB to Mill (FFB transporter) The pay slip was signed by both parties, contractors and their worker.

4.4.5.5 Indicator 5 The management shall establish records that provide an accurate overview 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)

- Verify records. (To adopt MSPO part 3 guides)

- Refer to employee register

The mill has established list of workers for both local and foreigners.

The list was review that includes name, date of birth, date of join, gender, age, wage rate and job assigned.

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 shall be made available for each and every employee indicated in the employment records.

(MAJOR)

- Verify records

Appointment letter for local workers / workers registration form

Employment contract for foreign workers

Any document related to employment is acceptable

- Employee register

The mill has established contract document s for workers which were in line with the legal requirement. Sample taken for list of workers:

1) Worker A

2) Worker B

3) Worker C

4) Worker D

The rate of the sampled workers is RM 35.40 per day for 26 working days. and in compliance to Minimum Wage Order 2016.

Observation:

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

OBS 3

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 employers.

(MAJOR)

- Verify records

- Check roll records

- Display of working hours at the Mill’s general notice board

Mill has established the punch card system to capture workers and staff reporting for work and working hours for each day..

The mill has display the working hour at the notice board and interview with workers indicate they understand their working hours.

The mill has established check roll system to monitor workers on

Yes







the number of days reporting for work in each month. and overtime records.

Overtime records were sighted:

Example of rates

Normal working day;

1.5 times of hours’ rate of normal working day rate.

Rest day;

2.0 times of hours’ rate of normal working hours rate.

Payment of worker’s overtime rate comply with the Sabah Labour Ordinance.

4.4.5.8 Indicator 8 The working hours and breaks of the individual worker indicated in the time records shall comply with legal regulations and collective agreements. Overtime shall be mutually agreed upon and shall meet the legal requirement applicable.

(MAJOR)

- Verify records

- Leave entitlement can be taken as evidence of compliance

- Pre-approved overtime sheet

- Visual inspection and assessment of internal documents:

- Availability of signed policy on good social practices e.g. People Policy, Employment & Labour Policy, Sexual Harassment Policy

- Guidelines on prevention of sexual harassment at the workplace

- Employment contract for workers

- Records of registered employees for compliance with minimum age for employment

- Compliance to minimum wage policy and records to show no

The working hour for the mill is displayed at the notice board.

Office:

Working hours: 7.00 am – 4.30 pm

Rest hour: 12.00 pm – 1.30 pm

Shift workers:

Morning shift: 7.00am – 3.00 pm

Afternoon shift: 3.00 pm – 11.00 pm

Rest hour: 1 hour for each shift.

The working hour was in line with requirement under Sabah Labour Ordinance.

Interviews with workers at operation site indicates they understood the mill working hours.

Yes







discrimination in terms of payments of daily wages to workers, records of payments, pay slip available and given to workers

- Display of working hours at office notice board

- Temporary housing and amenities acknowledged by Jabatan Tenaga Kerja and local authorities are acceptable.

- Records of social contributions

- Availability of complaint forms, records of complaints and actions taken to resolve them.

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)

- Verify records

- Records from check roll the source documents for pay slip

Wages of workers are according to the minimum wage order 2016 of RM35.38 per day or RM920 per month of 26 working days per month.

The pay slip of workers was verified to cross-checked the wage paid.

Overtime are in accordance to Sabah Labour Ordinance.

Overtime for normal working days will be 1.5 time of the daily rate. Overtime for Sunday and public holidays will be 2 times normal day wage.

The company has received approval from Jabatan tenaga Kerja Sabah and permitted to deduct their workers wage for:

- Bayaran pemprosesan dokumen perjalanan

- Pinjaman pembelian motorsikal

Yes

4.4.5.10 Indicator 10

Other forms of social benefits should be offered by the employer to employees, their families or community such as incentives for

- Verify records

- Interview employees The benefits provided to workers and staff such free medical, sport facilities, affordable food with a sundry shop located in the estate compound besides clean water and electricity.

In addition, the company provide incentives to workers during

Yes







good work performance, bonus payment, support of professional development, medical care provisions and improvement of social surroundings.

(MINOR)

festive season.


In cases where on-site living quarters are provided, these quarters shall be habitable and have basic amenities and facilities.

(MAJOR)

- On-site verification.

- Interview On site living quarter was inspected. The housing compound are well maintained and clean water and electricity provided.

As part of community safety, each block has appointed a leader to report and monitor safety of the assigned block.

Crèche is provided for foreign worker’s children of below 2 years of age.

Yes


The management shall establish a policy to prevent all forms of sexual harassment and violence at the workplace.

(MAJOR)

- Verify policy.

- Refer overall Check roll records

The Sexual Harassment Policy is established dated 07/01/2015 sign by Chief Plantation Officer.

Sighted complaints records indicate no complaints reported on harassment. Interviews with stakeholders and workers indicates no sexual harassment occur within the mill.

Yes


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

- Check for compliance. Conduct random interview with employees.

- Foreign workers to follow National and/or State Immigration Act

- Interview with personnel/employees:

Knowledge of policies concerning good social practices such as no discrimination, no forced labour etc

Knowledge of basic principles regarding equality and non-

KHB has established Code of Conduct and Human Right Policy, sign by Chief Executive Office, dated 03/01/2017. The policy states respect the freedom of association among workers. JCC meeting was established as platform for workers to voice their opinions and rights through their representative. JCC meeting was chaired by, Mill Manager dated 23/12/2017.

JCC meeting include management and workers’ representatives. Latest JCC meeting was conducted on 26/09/2017 chaired by Mill Manager, which involved workers’ representatives.

Previous JCC meeting was conducted on 15/02/2017.

Yes







discrimination

Compliance with laws and regulations with regards to employment, labour rights, immigrations requirements

Compliance with Collective Agreements

Knowledge of employment contracts and its contents


Workers housing and amenities


Children and young persons shall not be employed or exploited. The minimum age shall comply with local, state and national legislation.

(MAJOR)

- Verify records and on-site inspection

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

The list of workers was reviewed that includes both local and foreign workers The youngest local worker, FFB grader date of birth 07/07/1998 and for foreign worker date of birth 15/10/1995. Both of them are above minimum age prior joining the company.

During mill visit to operation areas found no child or young worker.

Yes

4.4.6 Criterion 6 Training and competency

4.4.6.1 Indicator 1 All employees and contractors shall be appropriately trained. A training programme shall include regular assessment of training needs and documentation, including records of training.

(MAJOR)

- Verify records.

- Contractors shall mean contract employees in this indicator


Training programmes

The management have established program for training, the checklist program for 2018 dated 20/12/17 signed by mill manager.

Attendance records of participants were sighted and reviewed..

Example program:

Priority Plan- fire drill & fire extinguisher and operational

Yes







and records such as attendance lists, photos, trainer and training contents

Training needs analysis/matrix for each operation/task

Appropriateness of training programme based on workers’ competency

Note: Contractors are contract employees

training.

Safety and Health training program-workers and drive safety training

Sustainability principle and criteria training

Schedule waste training.

Date: 28/07/2017 by Sustainability Executive include Assistant Manager Mill, Engineering and Store Clerk.

Chemical handling training by external consultant for chemical handling and water treatment by Millivest Sdn Bhd dated 03/11/2017 and attending by treatment plant operators. Training includes Raw water treatment and Boiler water treatment. Treatment chemical include process coagulants, flocculent, ph. adjuster, disinfectant.

MSPO Training and traceability system

Date: 22/01/2018

By: Sustainability executive

Attended: boilerman, weighbridge operator

MPOCC training was conduct on 09/12/2017 and was attended by Assistant Mil Engineer and QCU Supervisor.

Emergency Shutdown Safety & Operation training by Boilerman A, Fireman A, Boilerman B, Fireman B on 12/12/2017

Fire Hydrant Drill & briefing conducted by En Abdullah Basri on 22/12/2017 attended by operational workers

In house training Occupational Safety and Health by NIOSH on 21/12/2017-22/12/2017 at Club House (Bode Estate) attended by mill workers

Crane Safety and Operation Training on 29/10/2017 attended by mill workers,

Seminar on Hearing Loss Prevention & Audiometric Testing by NIOSH on 19/10/2017 attended by mill workers

Steep and Hazardous Road Briefing conducted Sustainability







executive on 16/08/2017 attended by Abedon Palm Oil mill executive and staff.

Firefighting training conducted on 25/09/2017 attended by mill workers.

Handling of Schedule waste training conducted by Sustainability Executive on 28/07/2017 attended by mill workers.

Training Boiler operation 04/07/2017 by Sustainability Executive attended by mill workers.

Store training by Sustainability Executive on 03/07/2017 attended by Mill workers.

FFB Grading training conducted by Sustainability Executive on 03/07/2017 attended mill workers.

Laboratory training conducted by Sustainability Executive on 03/07/2017 attended Mill workers. Workshop training conducted by Sustainability Executive on 03/07/2017 attended mill workers.

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)

- Verify records:

Training needs analysis

Training records

Training was conducted based on job specific and safety requirement.

First aid & CPR training conducted by St. John Ambulance Sabah dated 01/11/2017-02/11/2017 attended by Abedon Palm Oil Mill representatives.

Chemical handling training for raw water and boiler water treatment by consultant for chemical handling / water treatment on 03/11/2017 attending mill workers. Treatment chemical coagulants, flocculent, ph adjuster, disinfectant.

Yes

4.4.6.3 Indicator 3 A continuous training programme shall 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)

- Verify relevant records. The training plan for 2018 has been established for implementation until end of year 2018 was sighted and reviewed.

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 which shall be in line with the relevant country and state environmental laws shall be established, effectively communicated and implemented.

(MAJOR)

- Verify document and assess the implementation.


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 impacts analysis, mitigation and monitoring plan and records of implementation and timeline.

Continual improvement programme

Awareness and training programme on environmental management and improvement plan, minutes of meeting, attendance list, photos

- Interview of personnel and

Environmental management plan 2018 dated 23/01/2018 – objectives, compliance to laws, aspect / impact / monitoring, waste identification & disposal, improvement plan, etc.

Environmental policy dated 03/01/2017, approved by CEO – comply to laws & regulations, zero burning, safe use of chemicals, reduce environmental impacts, etc.

Interviewed and verified understanding of policy workshop attendant, store attendant Water treatment plant attendant .

Yes







stakeholders regarding the following:

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

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

(MAJOR)

Yes

a) An environmental policy and objectives

- Compliance with existing regulatory requirements

Environmental policy is established as stated above. Objectives – 100% compliance to laws and regulations, < x.x mt/tFFB water usage for factory and x.x mt/tFFB for domestic, and < x.x ltr /tFFB for diesel usage.

Yes

a) The aspects and impacts analysis of all operations

- Environmental Aspect Impact (EAI)

Environmental aspects & impact assessment dated 23/01/2018 and environmental risk assessment dated 01/12/2016. Significant risks –flue gas from boiler operation, diesel / lub spillage. Controls implemented.

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, implemented and monitored.

(MAJOR)

- Verify plan. Improvement plan for 2018 – installation of flue gas scrubber system and CCTV system to monitor smoke emission (awaiting CAPEX approval), EFB leachate prevention system (completed and verified).

Yes

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

(MINOR)

- Verify programme or action plan

Scheduled waste store expansion completed in Dec 2017, water harvesting.

Verified actual implementation.

Yes

4.5.1.5 Indicator 5 An awareness and training programme shall be established and implemented to ensure that all

- Verify records

- Records of training The training plan for 2018 has been established for implemented until end of year 2018. Training topics such as protection of wildlife, buffer zone, management of scheduled

Yes







employees understand the policy, objectives and management plans and are working towards achieving the objectives.

(MAJOR)

waste, etc.

Interviews with workers indicates they are aware and understand the company policies from training.

Example:

Schedule waste training.

Date: 28/07/2017 conducted by Sustainability Executive include Assistant Mill Engineering and Store Clerk.

Chemical handling and water treatment training was conducted by external consultant on 03/11/2017 and attending by mill staffs. Training includes Raw water and Boiler water treatment. Treatment chemical include process coagulants, flocculants, ph. adjuster, disinfectant.

MSPO Training and traceability system training conducted on 22/01/2018

By: Sustainability executive

Attended: boilerman, weighbridge operator

MSPO training conducted on 09/12/2017, attended by Assistant Mil Engineer and QCU Supervisor.

Emergency Shutdown Safety & Operation training by Boilerman A Fireman A, Boilerman B, Fireman Bon 12/12/2017

Fire Hydrant Drill & briefing conducted by Bomba Officer on 22/12/2017 attended by mill workers.

In house training Occupational Safety and Health by NIOSH on 21/12/2017-22/12/2017 at Club House (Bode Estate) attended by mill workers.

Crane Safety And Operation Training conducted on 29/10/2017 attended by mill workers..

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

- Check for minutes of meetings.

Environmental performance monitoring committee meeting conduct quarterly per year. Latest on 06/12/2017 – effluent discharge, EFB storage, membrane system for bacterium plant, diesel usage reduction, etc. Minutes and attendance recorded.

Yes







(MAJOR) Management review meeting on 17/01/2018 covered environmental element including water monitoring.

Example:

In point 4.2.3 effluent treatment plant monitoring has been presented in management review meeting.

4.5.2 Criterion 2 Efficiency of energy use and 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)

- Non-renewable energy consumption / usage (per tonne FFB) records and data shall be documented

- Baseline value shall be established based on the suitable timeframe decided by management

- Comparison to be made based on per tonne FFB processed

- Energy optimization plan shall be made available


- Availability of monitoring records of consumption of non-renewable energy with baseline values observed for 3-5 years.

- Comparison to be made based on per ton FFB processed.

- Energy optimization plan shall be made available.

- Documentation of renewable energy produced

- Visual inspection of, for example:

Monthly record of diesel usage from year 2015-2017 sighted. Baseline set at x.xx ltr/tFFB. Trend for year 2015-2017 established.

Energy optimization plan dated 15/01/2018 – 2nd

stage winnower system to decrease wet shell and increase shell kernel separation efficiency, additional shovel to reduce load and movement, LED bulb / tube conversion, Limit on air-con setting at 25 deg C.

Planning for substitute current diesel fuel with B5 biodiesel, monitoring of mill leakage of steam, water and lighting by mill leakage officer.

Yes







- Any application/new techniques/technology using renewable energy e.g. use of biodiesel in transport, use of solar energy etc

4.5.2.2 Indicator 2 Palm oil millers shall estimate the direct usage of non-renewable energy for their operations, including fossil fuel, and electricity to determine energy efficiency of their operations.

(MAJOR)

- Per tonne FFB

- Contractor: Not applicable to palm oil mill

(some Mills engaged Contractor(s) to “clear their FFB”, transport CPO to the refinery etc)

Monthly record of diesel usage from year 2015-2017 sighted for operations and electricity. Baseline set at x.xx ltr/tFFB.

Yes

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

MINOR)

- Documentation of renewable energy produced (kW.hr)

Monthly renewable energy produced recorded for year 2015-2017 - xxxx kWhr (2015), yyyy kWhr (2016) and zzzz kWhr (2017). Power generation is dependent of crop volume.

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 any waste product and its management/disposal


Identification of all waste products and polluting activities (e.g scheduled &domestic wastes), source of pollution (e.g POME)

Procedures/management plan developed from waste identification according to their appropriateness and effectiveness, monitoring of implementation plan

Waste identification and disposal method – palm fibre, palm shell, EFB, boiler ash, scheduled waste, general waste, recyclable waste, effluent discharge, etc. Sources, location, disposition method and related documents are established.

Inventory and disposal records for scheduled waste is maintained. Disposal of recyclable plastic bottles records, sighted record date 23/01/2018 for disposable of 36 kg of plastic bottles to Lahad Datu Recycle Co.

Domestic waste is disposed to the landfill.

Observation:

The list of scheduled waste in the environment management plan could include SW410 (contaminated rags & gloves), SW408 (waste chemicals) and SW110 (e-waste).

OBS 4







Records/documentation on recycling programme

Standard Operating Procedure for handling of used chemicals in accordance with regulations

Location map of rubbish pit/landfill


Schedule & method of domestic waste disposal

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

(MAJOR)

- Documentation of action plan

- Reduce, reuse and recycle to minimize waste.

- Management of major waste stream, ie. EFB, POME etc. which is important to be utilized and monitor its usage.

- Verify document on disposal of hazardous material

Yes

a. Identifying and monitoring sources of waste and pollution

Waste identification and disposal method. Monitoring conducted via records for scheduled waste, recycled waste, volume of POME discharged, etc. Sources of pollution includes smoke emission from boiler, noise from gen-set, domestic waste, etc.,

Yes

b. Improving the efficiency and recycling potential of mill by-products by converting them into value-added by-products

Palm fiber and shell are used as fuel for the boiler, EFB and boiler ash for composting and mulching, effluent final discharge to land application, recycling of plastic and metal waste.

Yes

4.5.3.3 Indicator 3 The palm oil mill 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

- Verify SOP. SOP no. AOM-ADM-OSH/SOP-24 for Chemical Handling, rev.0, 02/02/2018.

Scheduled waste generated – SW410 (rags & filters), SW110 (e-waste), SW102 (batteries), SW408 (used sand), SW430 (chemicals), SW305 (lub oil), SW306 (hydraulic oil), SW409 (containers).

Yes







ensure proper and safe handling, storage and disposal. Scheduled waste shall be disposed as per Environmental Quality Act 1974 (Scheduled Wastes) Regulations, 2005.

(MAJOR)

Inventory and disposal records are verified – consignment notes dated 20/10/2017 for 5 drums of SW305 to Segar Alam Kinabalu and 391 kg of SW409. Monthly inventory records submitted to DOE via eswis

4.5.3.4 Indicator 4 Domestic waste should be disposed as such to minimise the risk of contamination of the environment and watercourse.

(MINOR)

- Onsite inspection and verification

- Designated area

Domestic waste is disposed to the landfill. Landfill is lined with plastic sheets and any leaching is channeled to a containment area. Landfill is situated far away from any water sources or waterways.

Yes

4.5.4 Criterion 4 Reduction of pollution and emission including greenhouse gas

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

(MAJOR)

- Identify other solid waste

- Refers to DOE report

- Verify assessment report (refer to MPOB for calculations; excluding CO2 from renewable energy resources)

- The relevant GHG are CO2 (derived from non-renewable resources) and CH4 only.


Identification of all waste products and polluting activities (e.g. scheduled &,domestic wastes), source of pollution (e.g. POME, black smoke)

All scheduled wastes are identified and disposed via licensed contractors approved by DOE. Inventory records are maintained.

Reports submitted to DOE – notification of scheduled waste, inventory and disposal. Documents sighted, e.g. notification of SW305 (lub oil) dated 04/06/2013 and inventory of scheduled waste dated 05/01/2018.

Dust emission monitoring conducted twice a year. Latest report no. GES/EM17/874 dated 14/10/2017 from Green Environmental Services for boiler no.2, chimney no.2. Dust particulate concentration at 0.3862 g/Nm3, complying to specification of 0.4 g/NM3. Boiler no.1 not running for the past year.

Monthly report on black smoke emission and performance monitoring data of cyclones prepared and submitted to DOE. Latest report dated 03/01/2018 sighted.

Yes







Procedures/management plan developed from waste identification, monitoring of implementation of plan

Refer to 4.5.3.1, 4.5.3.2, 4.5.7

Reports submitted to the Department of Environment (DOE)

Verify assessment report (refer to MPOB for calculations; excluding CO2 from renewable energy resources)

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

(MAJOR)

- Verify the action plan. Plan to install flue gas scrubber system in order to reduce stack emission. Awaiting result from associated company on system performance before approval of CAPEX

Yes

4.5.4.3 Indicator 3 Palm oil mill effluent (POME) shall be treated to ensure compliance with standards as stipulated in the relevant Environmental Quality (Prescribed Premises) (Crude Palm Oil) Regulations 1977. POME discharge limits and method should be in accordance with the respective state and national policies and regulations.

(MAJOR)

- Verify the compliance according to the conditions in approved license

- Latest national and/or state regulations on POME discharge quality

Monthly water analysis is conducted for final discharge of effluent, upstream and downstream water quality. Latest COA, ref no. 21180105/05A-05C dated 11/01/2018 from Dynakey lab sighted, complying to specifications for parameters BOD, ammoniacal nitrogen, oil & grease, suspended solids and total solids.

Yes

4.5.5 Criterion 5 Natural water resources

4.5.5.1 Indicator 1 The management shall establish water management plans to maintain

- Establishment of water management plan.

Water management plan dated 09/01/2018 – sources of water, water usage, water treatment, monitoring of water quality, etc.,

Yes







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

(MAJOR)


a) Verify the water usage:

Recommended water to FFB ratio 1.35 excluding domestic usage (for the standard mill).

Verify the incoming meter consumption for the mill and domestic usage only.

b) Verify record submitted to DOE (effluent)

c) Observation of water wastage:

Efforts made to reduce, reuse and recycle

a. Assessment of water usage and sources

Source of water from reservoir pond. Monthly water consumption record sighted for 2017. Usage was xxxx litre in Nov and xxxx litre in Dec. FFB ratio averaging x.xx (factory) and x/x (domestic) mt/tFFB.

Water consumption 2017 has been sighted, factory water ratio was fluctuated in a trend of increasing for the early months of 2017 and decrease by the end of 2017.

Yes

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

Monthly water analysis is conducted for final discharge of effluent, upstream and downstream water quality. Latest COA, ref no. 21180105/05A-05C dated 11/01/2018 from Dynakey lab sighted, complying to specifications for parameters BOD, ammoniacal nitrogen, oil & grease, suspended solids and total solids

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, boiler water level control system, additional water tanks for water overflow

Yes

4.5.5.2 Indicator 2 Where open discharge of POME into water course is practiced, mills should undertake to gradually phase it out in accordance to the applicable state or national regulations.

(MAJOR)

- Effort made to reduce, reuse and recycle

- Evidence or action plan on effort made in reducing the discharge of treated POME into water course

- Verify record submitted to DOE (effluent)

No open discharge of POME to water courses. treated POME is discharged to land application.

Yes







4.6 Principle 6 Best Practices

4.6.1 Criterion 1 Mill management

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

(MAJOR)

- Verify the SOP


- Standard operating procedures on best management practices

- Visual inspection concerning for example:

- Oil mill operation

The mill has established SOPs for the operations.

The SOPs include:

Production planning working-FFB price determination

Handling incoming material/product-FFB weighting

Processing fresh fruit bunch, Ramp, sterilizing FFB, trashing station, boiler operation.

Quality and efficiency-boiler water test

Waste water treatment system daily waste water treatment.

Safety and health procedure- empty container, chemical handling.

During mill inspection, SOPs were available at boiler, sterilizer, oil room, engine room.

Observation:

Procedure on chemical handling could include the type of PPE to be used.

OBS 5

4.6.1.2 Indicator 2 All palm oil mills shall implement best practices.

(MAJOR)

- Inspection of operation and documentation.

Mill has established SOPs for the mill best practices.

During interview of workers they understand the job description and have been trained and could demonstrate their work.

Four JKKP inspections were conducted in year 2017.

Example:

Date: 20/09/2017 by JKKP Officers first inspection boiler.

No Siri Jentera: MW/309/17

No rujukan ujian: SB/HT/17/15101

Tekanan kerja selamat: 3100 kpa.

Date: 17/08/2017 by JKKP Officer conducted maintenance inspection.

Yes







Date: 15/05/2017 by JKKP Officer SB PMT 14164 Air Receiver.

Date: 04/01/2017 annual inspection of factory and machinery by JKKP Officer. The inspection includeS.

1. PMT 105585- Sand Filter No 1

2. PMT 105584- Sand Filter No 2

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)

- Verify business and management plan:

Budget

Book keeping


Business or management plan which includes operational plan for at least 2 years projection

Review of business plan for the last 2 years’ performance

Abedon oil mill has established long term plan & financial projection for year 2016-2022, proposed by Mill Controller and approved by Director.

Yes

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)

- Documentation of the pricing mechanisms.

- Assessment of internal documents, for example:

Monthly oil mill accounts

Sales and purchase agreements and / or contract, service contract, credit terms

Evidence of timely payment

Abedon Oil Mill Sdn Bhd with Syarikat Willy contractor for build new canteen at the Mill. Agreement made 08/11/2017. Letter of award have the contract agreement price RM XXX,XXX.XX from 05/10/2017 till 12 week from the letter. Include term of payment, performance bond, insurance and schedule of work. Sign by Director.

Payment certificate date 19/01/2018 for completed contract work was been made for the 1

st claim amount RM XXX,XXX.XX. tax

invoice from the contractor dated 31/12/2017. The progress for the built the canteen with the picture

Yes







Documentation of pricing mechanism

Methodology in promoting transparency under this indicator

4.6.3.2 Indicator 2 All contracts shall be fair, legal and transparent and agreed payments shall be made in timely manner.

(MAJOR)

- Verify contract terms and its execution in accordance to ethical standard:

Sales contract

Purchase contract

Service contract

Sighted work contract and payment certificate:

Abedon Oil Mill Sdn Bhd with contractor for construction of new canteen at the Mill. Agreement dated 08/11/2017.

Payment certificate dated 19/01/2018 1st claim amount sighted and cross-checked against contractor invoice dated 31/12/2017.

Therefore, payment is made on time and according to contractual terms.

Yes

4.6.4 Criterion 4 Contractor

4.6.4.1 Indicator 1 In case of the engagement of contractors, they shall be made to understand the MSPO requirements and shall provide the required documentation and information.

(MAJOR)

- Awareness of MSPO requirements:

Written communications

Acceptance of the terms


Contract agreement shall include a special clause on MSPO compliance where applicable to them

Work completion certificate or evidence of progress payment reports

- Interview of contractors regarding the following:

Awareness on MSPO and requirements

The training on the MSPO requirement to contractor was conducted by assistant mill manager on 04/01/2017 with Site supervisor who represents the contractor.

Yes







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

(MAJOR)

- Verify agreed contracts Sighted contract agreement for delivery of Empty Fruit Bunch (EFB) and fiber between Abedon Palm Oil Mill and company JB to Abedon estates. Agreement dated 02/01/2018 was signed by both parties.

Yes

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

(MINOR)

- Management to cooperate with appointed accredited MSPO auditors.

Abedon Oil Mill Sdn Bhd contracted accredited Certificate Body TUV NORD Malaysia to conduct the certification and inspect any contractors premises if required.

Yes

MSPO CERTICATION SUMMARY REPORT - tuv-nord.com · in Bahasa Malaysia, English and Mandarin. Yes Zul...

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