Roundtable on Sustainable Palm OilLabuhan Haji Estate, Bandar Selamat Estate, and Sei Dadap Estate)...

Roundtable on Sustainable Palm Oil Public Summary Report

Report no. : 18502897

Certification assessment against the

RSPO Principles & Criteria Indonesia National Interpretation (INA-NI) year 2008 and RSPO SCCS year 2009

PT PERKEBUNAN NUSANTARA III Aek Nabara Selatan Mill

Head Office : Jl. Sei Batang Hari No. 2 Medan, North Sumatera Province - Indonesia

Site Office : Bilah Hulu Sub District, Labuhan Batu District, North Sumatera Province - Indonesia

Date of assessment : 16 to 21 December 2011

Date of re-audit to update data: 09 to 13 September 2013

Report prepared by: Dian S. Soeminta

(RSPO Lead Auditor)

Certification decision by: Nelly Yong

(Managing Director of TÜV Rheinland Malaysia)

Certification Body: TÜV Rheinland Malaysia Sdn. Bhd.

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

47600 Subang Jaya, Selangor Darul Ehsan, Malaysia.

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

www.tuv.com

TABLE OF CONTENTS

1.0 SCOPE OF CERTIFICATION ASSESSMENT ............. .......................................... 3

1.1 National Interpretation Used 3 1.2 Type of Assessment 3 1.3 Location and Maps 3 1.4 Description of Supply Base 5 1.5 Dates of Plantings and Replanting Cycles 6 1.6 Other Achievements and Certifications Held 7 1.7 Area of Plantation (Total, Planted and Mature) 7 1.8 Organisational Information / Contact Person 8 1.9 Description of Company History, Socio-economy & Environment 9 1.10 Progress against Time Bound Plan 10 1.11 Audit against the rules for Partial Certification 11 1.12 Progress of associated smallholder or outgrowers towards RSPO compliance 11 1.13 Approximate Tonnages Certified 12 1.14 Recommendation for RSPO Principles and Criteria and Supply Chain Certification 12 1.15 Chronology of suspension of RSPO Certificate of PTPN III Sei Mangke Mill and Withholding of Certification of Non-certified Management Units 12 1.16 Date of Certificate Issued and Scope of Certificate 12

2.0 ASSESSMENT PROCESS .................................................................................. 13

2.1 Certification Body 13 2.2 Qualifications of Lead Assessor and Assessment Team 13 2.3 Assessment Methodology & Agenda 15 2.4 Stakeholder Consultation and Stakeholders Contacted 22 2.5 Date of Next Surveillance Visit 23

3.0 ASSESSMENT FINDINGS ................................................................................... 24

3.1 Summary of Findings 24 3.2 Identified non-compliances, corrective actions taken and auditors conclusions 43 3.3 Noteworthy Positive Components 54 3.4 Description of Supply Chain Management System 55 3.5 Identified Non-Compliance against RSPO SCCS Requirement, Corrective Actions Taken and Auditors Conclusions 58 3.6 Conclusions and Recommendation for RSPO P & C and Supply Chain Certification 60 3.7 Issues Raised by Stakeholders and Findings Pertaining to Issues 60 3.8 Acknowledgements of Internal Responsibility and Formal Sign-Off by Client 63

APPENDICES ............................................................................................................ 64

Appendix 1: Details of Certificate 64 Appendix 2: List of Abbreviations 65 Appendix 3: List of Stakeholders Interviewed and Contacted 65 Appendix 4: Observations and Opportunities for Improvement 67

RSPO Certification Assessment Report

PT Perkebunan Nusantara III – Aek Nabara Selatan Pa lm Oil Mill – North Sumatera

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QMF: RSPO-007a-11(Rev.0)

1.0 SCOPE OF CERTIFICATION ASSESSMENT 1.1 National Interpretation Used

The operations of the mill(s) and its supply base of FFB were assessed against Indonesia National Interpretation (INA-NI) year 2008 of the RSPO Principles & Criteria and the RSPO Supply Chain Certification Systems (SCCS) document (November 20011).

1.2 Type of Assessment

The main certification assessment was carried out on 1 (one) mill (Aek Nabara Selatan Mill) and 7 (seven) estates (Aek Nabara Selatan Estate, Rantau Prapat Estate, Merbau Selatan Estate, Mambang Muda Estate, Labuhan Haji Estate, Bandar Selamat Estate, and Sei Dadap Estate) under Aek Nabara Selatan Mill owned by PT Perkebunan Nusantara III (hereinafter referred to as “PTPN III” or “the company” ).

1.3 Location and Maps

Figure 1. PTPN III’s Location in North Sumatera-Indonesia

PTPN III



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Figure 2. Location of PTPN III’s 7 estates in North Sumatera

Location of 7 certified’s estate and Aek Nabara Selatan Mill in Labuhan Batu III Districk



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

1.4 Description of Supply Base

Table 2: FFB Supply Information for Aek Nabara Sela tan Mill (PTPN III) year 2012 and year 2013 (until August 2013)

FFB Contributors FFB supplied in year

2012* FFB supplied in year

2013**

Tonnes % Tonnes %

Company-owned estates :

Aek Nabara Selatan (KANAS) 128,676.57 45.05 87,128.54 48.64

Mambang Muda (KMMDA) 34,434.33 12.06 18,332.45 10.24

Rantau Prapat (KRPPT) 24,384.63 8.54 15,492.95 8.65

Merbau Selatan (KMSTN) 3,522.48 1.23 1,873.08 1.05

Labuhan Haji (KLAJI) 45,329.01 15.87 24,920.65 13.92

Bandar Selamat (KBDSL) 17,311.24 6.06 10,379.85 5.80

Sei Dadap (KSDDP) 0.00 0.00 497.29 0.28

Sub Total 253,658.26 88.82 158,624.81 88.58

Other estates under PTPN III

Aek Nabara Utara (KNAU) 10,837.25 3.79 5,342.52 2.98

Sub Total 10,837.25 3.79 5,342.52 2.98

Independent Outgrowers/ Smallholders 21,100.06 7.39 15,115.30 8.44

Sub Total 21,100.06 7.39 15,115.30 8.44

GRAND TOTAL 285,595.57 100.00 179,082.63 100.00

Note : *) FFB receipt by Aek Nabara Selatan POM from January to December 2012

**) FFB receipt by Aek Nabara Selatan POM from January to August 2013

Name of mill / estate Location

GPS locations Latitude Longitude

Aek Nabara Selatan Mill

Aek Nabara Village, Bilah Hulu Sub District, Labuhan Batu District

02º03’42” 99º57’20”

Aek Nabara Selatan Aek Nabara Village, Bilah Hulu Sub District, Labuhan Batu District

02º03’29” 99º57’19”

Mambang Muda Perkebunan Mambang Muda Village, Kualuh Hulu Sub District, North Labuhan Batu District

02º33’02” 99º49’20”

Rantau Prapat Jl. Lintas Sumatera Utara Rantau Prapat, Bilah Barat Sub-District, Labuhan Batu District

02º03’32” 99º48’04”

Merbau Selatan Merbau Selatan Estate Village, Merbau Sub-District, North Labuhan Batu District

02º12’30” 99º49’54”

Labuhan Haji Labuhan Haji Village, Kualuh Hulu Sub District, North Labuhan Batu District.

02º32’10” 99º42’20”

Bandar Selamat Perkebunan Bandar Selamat Village, Aek Songsongan Sub District, Asahan District

02º12’00” 99º33’00”

Sei Dadap Sei Dadap I / II Village, Sei Dadap Sub District, Asahan District

02º57’13” 99º40’06”



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Actual production volumes and project outputs

To date, the mill has not sold any CPO as RSPO certified material, as viewed from the table below. Table 4: Total and projected CPO and PK production from Aek Nabara Selatan Mill (PTPN III)

Note : * Refer to section 1.13 for further explanation

** Actual production from January to December 2012 consisting of material from certified and non-certified FFB.

1.5 Dates of Plantings and Replanting Cycles

The company follows a replanting cycle of 25 years. Information on the dates of plantings is as per the table below. Table 4: Age and year of plantings of company estat e supplying to Aek Nabara Selatan Mill

Age & Year of Plantings

Oil palm planted area at each estate(ha)

Rantau Parapat)

Merbau Selatan

Mambang Muda

Labuhan Haji

Bandar Selamat Sei Dadao

KANAS Aek Nabara

Selatan 0 – 5 yrs.

(2009 – 2013) 109.45 0.00 0.00 131.62 1.10 516.95 1,330.80

6-10 yrs (2004 – 2008) 245.40 0.00 57.15 514.53 901.36 862.95 5,621.29

11-15 yrs (1999 – 2003)

343.26 32.14 485.43 321.09 2,667.88 365.33 184.19

16-20 yrs (1994 – 1998)

661.17 110.87 354.38 467.87 0.00 1,073.97 51.80

21-25 yrs (1989 – 1993)

338.14 0.00 411.85 422.95 0.00 1,090.60 13.80

TOTAL 1,697.42 143.01 1,308.81 1,858.06 3,570.34 3,909.80 7,201.88

Product

CPO PK

Certified tonnages claimed (MT)* 60,573.592 11,592.182

Certified tonnages sold (MT) 0.00 0.00

Certified tonnages purchased (MT) 0.00 0.00

Actual production (MT)** 68,190.59 13,059.13

Extraction Rate (%) 23.88 4.57

Projected output for year 2013 (MT) 70,035.38 14,940.47



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Table 5: Planned and actual oil palm replanting ac tivities for company estate supplying to Aek Nabara

Selatan Mill for year 2013

Total planned replanting area for each estate

(ha)

Total planned

replanting area (ha)

Year Actual total area replanted

(ha)* 2013 2014 2015 2016 2017

Aek Nabara Selatan 0 0 0 0 0 0 0

Mambang Muda 0 0 0 0 0 0 0

Rantau Prapat 0 0 0 0 0 0 0

Merbau Selatan 0 0 0 0 0 0 0

Labuhan Haji 107.58 0 0 0 91.55 16.03 0

Bandar Selamat 0 0 0 0 0 0 0

Sei Dadap 1,785.72 210 485.12 0 595.60 495.00 113.18

1.6 Other Achievements and Certifications Held Table 6: Details of other certifications or awards held by PTPN III

Name of mill / estate

Certification Standard / Award achieved

Certification Body / Awarder Date Achieved

Pabrik Kelapa Sawit Rambutan ISO 9000/14000/SMK3 TÜV/Sucofindo 1998/2000/1999

Pabrik Kelapa Sawit Sei Mangke

ISO 9000/14000/SMK3 TÜV/Sucofindo 1998/2000/1999

Pabrik Kelapa Sawit Sei Silau


Pabrik Kelapa Sawit Aek Nabara

Selatan ISO 9000/14000/SMK3 TÜV/Sucofindo 1998/2000/1999

Pabrik Kelapa Sawit Sei Sumut ISO 9000/14000/SMK3 TÜV/Sucofindo 1998/2000/1999

Pabrik Kelapa Sawit Sei Baruhur


Pabrik Kelapa Sawit Aek Torop


Pabrik Kelapa Sawit Torgamba


Pabrik Kelapa Sawit Aek Roso ISO 9000/14000/SMK3 TÜV/Sucofindo 1998/2000/1999

Pabrik Kelapa Sawit Sei Daun ISO 9000/14000/SMK3 TÜV/Sucofindo 1998/2000/1999

1.7 Area of Plantation (Total, Planted and Mature)

Table 7: Oil Palm Planted Area Summary, FFB Product ion and Average yield/ha for company estate supplying to Aek Nabara Selatan Mill

Estate Name Total area (ha)

Oil Palm Planted area

(ha)

Mature (Production)

area (ha)

Immature (Non-production)

area (ha)

FFB Production*

(tonnes)

Average yield/ ha

Aek Nabara Selatan 7,312.68 7,201.88 7,028.43 173.45 139,185.15 23.71

Mambang Muda 3,022.75 1,308.81 1,308.81 0.00 34,582.29 26.42 Rantau Prapat 4.332,07 1,697.42 1,668.02 29.40 35,316.58 21.17 Merbau Selatan 3,293.55 143.01 143.01 0.00 3,522.48 24.63



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Estate Name Total area (ha)

Oil Palm Planted area

(ha)

Mature (Production)

area (ha)

Immature (Non-production)

area (ha)

FFB Production*

(tonnes)

Average yield/ ha

Labuhan Haji 3,248.07 1,858.06 1,858.06 0.00 45,329.01 26.26 Bandar Selamat 3.651,40 3,570.34 3,569.24 1.10 91,124.15 25.53 Sei Dadap 5,174.73 3,909.80 3,392.85 516.95 82,029.22 21.76 Total 22,106.76 19,689.32 18,968.42 720.90 431,088.88 22.72

Note : FFB production data from estates on January to December 2012.

Table 8: Land use data for company estate supplying to Aek Nabara Selatan Mill (PTPN III)

Estate Name

Total area (ha)

Rubber Planted

Area (ha)

Oil Palm Planted

Area (ha)

HCV/ Potential

HCV areas*

(ha)

Land used for other purposes (ha)

Office, housing, effluent

pond, road, etc.

Occupied Non-

productive area

Govern-mental

use.

Aek Nabara Selatan 7,312.68 0.00 7,201.88 98.40 94.58 0.00 16.22 0.00

Mambang Muda 3,022.75 1,395.34 1,308.81 160.15 112.21 15.57 182.96 7.86

Rantau Prapat 4.332,07 1,865.97 1,697.42 93.68 182.68 316.00 216.30 53.70

Merbau Selatan 3,293.55 3,094.94 143.01 55.84 51.60 0.00 4.00 0.00

Labuhan Haji 3,248.07 1,244.28 1,858.06 6.49 115.81 0.00 29.92 0.00 Bandar Selamat 3.651,40 0.00 3,570.34 179.83 76.35 4.71 0.00 0.00

Sei Dadap 5,174.73 638.38 3,909.80 165.84 183.33 381.72 55.50 6.00

Total 22,106.76 8,238.91 19,689.32 1520.46 816.56 718.00 504.90 67.56

Note : Areal HCV include in planted area

1.8 Organisational Information / Contact Person

PTPN III is one of the fourteen state owned enterprises which operate in the plantation industry. Its business comprises cultivation of oil palm and rubber, and the production and sale of oil palm and rubber products. The company's main products are Crude Palm Oil (CPO), Palm Kernel, dry rubber and downstream, rubber product.

The enterprise was established through a takeover of the Dutch plantation companies in 1958 by the Republic of Indonesia, through the process of nationalisation of foreign plantation companies, to form Perseroan Perkebunan Negara (PPN)

In 1968, Perseroan Perkebunan Nusantara (PPN) was restructured by the Government to form a number of Perusahaan Negara Perkebunan (PNP). Thereafter, in 1974, the legal status of PNP was changed to that of a limited company and given the name PT Perkebunan (Persero). In order to improve the efficiency and effectiveness of state owned companies/enterprises the Government of Indonesia restructured the state owned companies/enterprises in the plantation sector, through the process of merging companies on the basis of geographical locations. Concurrently, the organisation structures of the companies were also streamlined. In 1994, through a process of merger of managements, the managements of three state owned plantations, namely PTPN III (Persero), PT Perkebunan IV (Persero) and PT Perkebunan V (Persero), were unified under the management of PTPN III (Persero)

Thereafter, through Government Regulation No. 8 of 1996 dated 14 February 1996, the three companies, whose businesses were located in North Sumatera, were merged into one company and given the name of PT Perkebunan Nusantara III (Persero) was located in Medan, North Sumatera. PTPN III was incorporated through By Laws of the company notarised by Harun Kamil, S.H., carrying Number 36 dated 11 March 1996, and legalised by the Minister of Justice of the Government of Indonesia through Decree No. C2 8331.HT.01.01.TH.96 dated 8 August 1996, and published in the Gazette of the Republic of Indonesia No. 81 of 1996, and Annexure to the Gazette No. 8674 of 1996.

Along 2004, PTPN III has been actualising fundamental and comprehensive changes to achieve company’s vision. PT Nusantara Plantation estates and mills management divide into parts management area called a



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district. Currently there are eight district which are manage estate and mills throughout the work area in Sumatera PTPN III i.e.: - Deli Serdang 1 District - Deli Serdang II District - Simalungun District - Asahan District - Labuhan Batu I District - Labuhan Batu II District - Labuhan Batu III District - Tapanuli Selatan District

Aek Nabara Selatan Mill is one of mills owned by PTPN III, that is located in Aek Nabara Selatan Village, Bilah Hulu sub district, Labuhan Batu District, North Sumatera. The mill managed under Labuhan Batu I district, Aek Nabara Selatan Mill has Plantation business registration letter (No. HK.350/522/Dj.Bun.5/VII/2001) from Ministry of Agriculture on 5 July 2001 with the production capacity is 60 tonne/hour. The supply base is the 7 estates and out growers supplying to Aek Nabara Mill. The estates are Aek Nabara Selatan, Mambang Muda, Rantau Prapat, Merbau Selatan, Labuhan Haji, Bandar Selamat, and Sei Dadap Estates. Aek Nabara Mill also supplied other PTPN III owned estate which is not included in certification scope as well as supply from independent small holder.

1.9 Description of Company History, Socio-economy & Environment Table 9: General Information on Estates under Aek N abara Selatan Mill

No. Description Estate

KRPPT KMSTN KMMDA KLAJI KBDSL KSDDP KANAS 1. Location of administrative offices Government

Admin-istration office

Labuhan Batu District


North Labuhan Batu District

North Labuhan Batu District

Asahan Asahan District


Plantation Admin-istration office

Labuhan Batu

Labuhan Batu

North Labuhan Batu

North Labuhan Batu

Asahan Asahan Labuhan Batu

2 Surrounding stakeholders (at estate boundaries) North Kampung

Baru VillageBabussalam village

Sukarendah Village

East Aek Kanopan Village

Aek Bamban Pasiran Village

Aek Nabara Utara Estate and Aek Nabara Market

East Aek Paing and Pulo Padang Village

Bandar Gula village

PT SMART Sialang Taji/Tanjung Pasir Village

Marjanji Village

Tanjung Alam Village

Aek Nabara Selatan Hospital and Sidorejo Perlabian

Company Name: PT Perkebunan Nusantara III ( Aek Nab ara Selatan Mill)

RSPO Membership no. 1 -0030-06-000-00

Address: Jl. Sei Batang Hari No. 2, Medan, Indonesia

Aek Nabara Selatan Village, Bilah Hulu Sub District, Labuhan Batu District.

Contact Person: Tio Handoko

Telephone: 061-8452244

Email: [email protected]



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No. Description Estate

KRPPT KMSTN KMMDA KLAJI KBDSL KSDDP KANAS Village

South Padang Matinggi

PN3 Hospital area

Gunting Saga Village and Blok 100 village

Tanjung Pasir/Sialang Taji

Bandar Selamat plantation Village

Tanjung Asri Village

PT Supra Matra Abadi Plantation

West Janji Village PT Umada Plant-ation

Borotan Lama Village, Blok 80 Village and Labuhan Haji Estate

Tanjung Pasir Aek Songsongan Village

Sei Dadap I & II

Aek Nabara Utara Estate & Sigambal Village

3. Land Condition

Undulating Undulating Undulating Flat Undulating Flat Undulating

4.. Soil type Typic Orchaqult (Grey Hidrofic)

Typic Paleudults Podzolic yellow

Typic Paleudults and Typic Dystru-depts

Typic Paleudults (Yellow Podzolic)

Red yellow Podzolic, Grey Alluvial

Typic Dystrudepts

Typic Paleudults (Yellow Podzolic)& Aeric Tropaquent(Grey Alluvial)

5. Hydrology Bila Water-shed

Bila Water-shed

Aek Sipakpahi Watershed

Aek SipakpahiWatershed

Song-songan Watershed

Silau Water-shed

Barumun Watershed

6. Climate (Oldeman)

C1 & D1 C1&D1 C1 and D1 C1 & D1 C1 & D1 C1 & D1 C1&D1

7. Topo -graphy

58 m ASL 38-53 ASL 5-271m ASL 39 ASL 40-68 m ASL 20-35 m ASL

30-45m ASL

1.10 Progress against Time Bound Plan

The company has revised their time bound plan for RSPO certification of other management units as per the schedule below. The plan was revised as the company was awaiting RSPO certification of Sei Mangke Mill and its supply base and is applying experience gained from the first certification to prepare other management units for certification. Table 10: Time Bound Plan of PTPN III

Name of Holding Location Time bound plan for certification Status

PKSMK Sei Mangke / Simalungun

August 2010 Certified

PRBTN Tebing Tinggi December 2014 Planned

PSSIL Sei Silau / Asahan December 2014 Planned

PANAS Aek Nabara / Labuhan Batu

November 2013 In-process

PSSUT Sisumut / Labuhan Batu


PSBAR Sei Baruhur/ Labuhan Batu


PPARO Aek Raso/ Labuhan

Batu November 2013 In-process

PTORA Torgamba/ Labuhan

Batu December 2015 Planned

PATOR Aek Torop/ Labuhan Batu

December 2013 In-process



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PSDAN Sei Daun/ Labuhan Batu

December 2015 Planned

PSMTI Sei Meranti/

Labuhan Batu December 2015 Planned

Hapesong Mill Tapanuli Selatan November 2016 Planned

1.11 Audit against the rules for Partial Certificat ion

PTPN III’s compliance with partial certification rules under Clause 4.2.4 of 2007 RSPO certification system has been assessed through document check and interview in the head office and through findings of concurrent ISO: 9001 checks conducted at other management units of PTPN III. Below is summary of the findings:

Partial Certification Requirements Audit Findings

1.a The organisation is an RSPO member.

Yes, PTPN III is an RSPO member with ID No. 1-0030-06-000-00 (membership since 14 December 2006).

1.b A time-bound plan for achieving certification of all relevant entities;

PTPN III has a time-bound plan to achieve RSPO certification for all relevant entities. However, one of the company’s development areas (Muara Upu site) located at South Tapanuli is still not included by the time-bound plan. NPP assessment for this area was carried out by Certification Body (Sucofindo) in 2012 years.

1.c. i. There are no significant land conflicts.

There are some land conflicts/ potential land conflicts ongoing in other PTPN III’s management units, such as Silau Dunia, and Si Sumut Estates. While the company has already made a conflict resolution mechanism, these conflicts remain unresolved as the mechanism is still not agreed by the land claimants.

1.c. ii. No replacement of primary forest or any area containing HCV since November 2005.

PTPN III’s development of a new planting area (Muara Upu at South Tapanuli) had been raised before as a major noncompliance by TUV Rheinland audit team, which is now closed as the company has carried out applying NPP in accordance with this clause.

1c. iii. No labour dispute that are not being resolved through an agreed process.

No labour issues were found during this surveillance audit.

1c.iv. No evidence of non-compliance with law in any of the non-certified holdings.

Some of PTPN III’s other management units have not complied with certain legal requirements. For example, in Silau Dunia Estate under another PTPN III management unit, an issue has been found with the area stated under the Right of Cultivation certificate (HGU). However, the company is taking action by inviting National Land Agency (BPN) to re-measure the land and resolve the issue. The process is still ongoing.

1.12 Progress of associated smallholder or outgrowe rs towards RSPO compliance

During surveillance audit, it was found that the company has programme towards RSPO compliance for all independent outgrowers that supply FFB to Sei Mangke Mill, such as Memorandum of Understanding between PTPN III and RSPO with IDH Sustainable Trade Initiative (IDH) (No. 3.12/MoU/01/2012 and 002/MoU/RSPO-PTPN3-IDH/III/2012 and PAL.01.2012.01) regarding “Sustainable Palm Oil Production by Independent Smallholders” and time bound plan for certification independent smallholder (UD Bentasil and UD Lestari).



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1.13 Approximate Tonnages Certified

The approximate tonnages certified, based production in 2012 for company owned estates only (refer to Table are as follows: Crude Palm Oil (CPO) : 60573. 59 Palm Kernel (PK) : 11,592

1.14 Recommendation for RSPO Principles and Criteri a and Supply Chain Certification

Aek Nabara Selatan Mill has established and maintains an effective system to ensure compliance with the RSPO principles and criteria. The audit team has confirmed through the audit process that the company’s practices complies with, adequately maintains and implements the requirements of RSPO Principles and Criteria National Interpretation Indonesia year 2008 and RSPO Supply Chain Certification System (SCCS) (November 20011).

TÜV Rheinland Malaysia recommends that Aek Nabara Selatan to be approved as a producer of RSPO Certified Sustainable Palm Oil.

1.15 Chronology of suspension of RSPO Certificate o f PTPN III Sei Mangke Mill and Withholding of Certification of Non-certified Management Units

TÜV Rheinland Malaysia Sdn. Bhd. issued a suspension letter dated on 2 May 2012 for PTPN’s Sei Mangkei Mill which had previously been RSPO certified. This resulted in withholding of certification of other management units under PTPNIII, including Aek Nabara Selatan. The suspension was issued due to an ongoing significant land dispute issue and new planting carried out at Muara Opu which was not done in accordance with the RSPO New Planting Procedure (NPP). The corrective action proposal was sent by PTPN III and verification was completed on 7 July 2013. Based on the verification, the land dispute issue was deemed clear and then closed by TRM, while the Muara Opu issue was not clear and cannot be closed.

In October 2012 PTPN III conducted the HCV and Social Impact Assessment (SIA) using the external consultant, then continued with NPP programme with Sucofindo. During the RSPO – CB forum on 5-6 March 2013, this issue was communicated to RSPO and the conclusion was Muara Opu issue does not has impact the certification process, and therefore TÜV Rheinland Malaysia Sdn. Bhd. issued a letter for lifting of the suspension.

The RSPO certification audit for Aek Nabara Selatan was done on December 2011, and due to the suspension of Sei Mangkei mill, the certification of Aek Nabara Selatan was withheld. Upon lifting of the suspension, a re-audit was conducted on September 2013 to update information found during the certification audit.

1.16 Date of Certificate Issued and Scope of Certif icate

The scope of the certificate covers production of palm oil from Aek Nabara Selatan Mill and its supply base, which includes Aek Nabara Selatan Estate, Rantau Prapat Estate, Merbau Selatan Estate, Bandar Selamat Estate, Labuhan Haji Estate, Mambang Muda Estate and Sei Dadap Estate. The date of certificate issued is 23 May 2014. Further details of the certificate are as per Appendix 1.



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2.0 ASSESSMENT PROCESS 2.1 Certification Body

TÜV Rheinland Malaysia Sdn. Bhd. is member of Group TÜV Rheinland Group, a global leader in independent testing and assessment services. The TÜV Rheinland Group was established in 1872 with offices located in over 500 locations in 65 countries on all five continents. TÜV Rheinland Malaysia offers certification for a wide range of management systems according to established international standards including ISO 9001, ISO 14001, OHSAS 18001, SA 8000, as well as CDM Validations and Verifications. TÜV Rheinland Malaysia’s office is located in Subang Jaya, Malaysia.

2.2 Qualifications of Lead Assessor and Assessment Team 2.2.1 Auditor team for year 2011

Name Position Qualifications / Experience

Dian S. Soeminta (DSS)

Lead Auditor

Education: Bachelor’s Degree in Forestry - Bogor Agriculture Institute. Indonesia, (1990 to 1995). Trainings attended : ISO 9001:2000 lead assessor course 1996 - Neville Clark; ISO 14001 lead assessor course - PE International; OSHAS: 2007 training, Sustainable Forest Management (SFM) - Forest Stewardship Council (FSC) system training; Chain of Custody training for FSC System. Working experience: Professional forester since 1995 to 2000. Lead Auditor for Forest Stewardship Council (FSC), Sustainable Forest Certification (SFC) and Chain of Custody (COC) Certification. Lead auditor for Environmental Management System (EMS) and Quality Management System (QMS) audits. Conducted sustainable forest management certification audits on FSC and Indonesian Ecolabel Institute (LEI) standards for 20 companies, 50 COC FSC/LEI audits, and EMS and QMS audits at more than hundred companies for TÜV Rheinland Indonesia. Instrumental in the preparation of TÜV Rheinland Indonesia for Sustainable Forest Management Certification System and TÜV Rheinland Malaysia for RSPO Certification. Member of Task Force for Indonesian National Interpretation (Guidance on scheme smallholder RSPO certification). Developed TÜV Rheinland RSPO Gap Assessment Checklist and report template.

Fadli (FA) Auditor

Education: Bachelor of Anthropology, Department of Anthropology - University of Indonesia, Jakarta. Trainings attended : Sustainable Natural Production Forest Management (Pengelolaan Hutan Alam Produksi Lestari - PHAPL) assessor training (May 2003); Forest Plantation Management (August 2003) training - Indonesian Ecolabel Institute (LEI), Forest Management and Agriculture Auditor Training; ISO 9001:2008, ISO 14000:2004, OHSAS 18001:2007 trainings - SmartWood/Rainforest Alliance; SA8000 training - SA International; RSPO Lead Auditor Training -Indonesian Palm Oil Commission. Working experience: Experienced as lecturer for D3 Tourism programme, University of Indonesia. Social aspect auditor of PT TUV International Indonesia for Sustainable Forest Management and RSPO Principles & Criteria. Researcher of stakeholder mapping for CSR Indonesia

Hendra Fachrurozy

(HF) Auditor

Education: Bachelor’s Degree in Forestry - Bogor Agriculture University. Indonesia. Trainings attended : IRCA ISO 9001:2000 (QMS) Lead auditor Course, ISO 14001:2000 (EMS) Lead auditor Course, Sustainable



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Forest management Certification Assessor Course (LEI Standard), Pro Forest-Wild Asia RSPO Lead Auditor training, etc. Working experience: Starting career as forester in PT Surveyor Indonesia 2008 as forestry surveyor and responsible for Sustainable Forest management coordinator, moved to TÜV Rheinland Indonesia in 2010 as SFM , VLK, ISO (EMS and QMS), RSPO project audits including RSPO assessment P & C.

Agus Salim Alfat (ASA)

Auditor

Education: Bachelor Degree of Chemistry - Bandung Institute of Technology, Indonesia (1988 to 1993); Master Degree of Quality, Safety and Environment - Otto Von Geuricke, Magdeburg University, Germany (2001 - 2002). Trainings attended: ISO 9000:2000 Series Auditor / Lead Auditor Training - PE International (Jakarta), IEMA Advanced EMS Auditor (IEMA / EARA ISO 14001) Auditor / Lead Auditor Training Course - PE International (Jakarta), OHSAS 18001 Lead Auditor Training Course - PE International (Jakarta). Working experience: Experienced in Quality Control from 1994-2004. Auditor for Quality Management System since 2004 – present. Auditor for Environmental Management System since 2005 – present. Auditor for OHSAS 18001 since 2007 - present. Conducted over 100 Quality Management System audits since 2004, over 50 Environmental Management System audits since 2006 , and over 25 OHSAS audits since 2007

Carol Ng (CN)

Technical Expert

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

Cecep Saepullah (CS)

Auditor

Education: Bachelor’s Degree in Forestry - Bogor Agriculture University. Indonesia, (1990 to 1995). Trainings attended : IRCA ISO 9001:2000 (QMS) Lead auditor Course, ISO 14001:2000 (EMS) Lead auditor Course, Sustainable Forest management Certification Assessor Course (LEI Standard), Chain of Custody Assessor Course (LEI, PEFC and FSC standard), Internal training of RSPO (TÜV Rheinland), etc. Working experience: Starting career as forester in PT Kiani Lestari in 1996 as forest planning supervisor and responsible for Sustainable Forest management coordinator, moved to TÜV Rheinland Indonesia in 2001 as SFM , Chain of Custody, VLK, ISO (EMS and QMS) lead auditor with various standards and project audits including RSPO assessment and supply chain. Currently in TÜV Rheinland Indonesia is responsible to manage System II Business stream that include RSPO, ISCC and Supply chain and also Forest certification and Chain of Custody.

Aswan Hasibuan (AH)

Auditor Education : Bachelor of Industrial Engineering, University of North Sumatera. Trainings attended: ISO 9000:2000 Series Auditor / Lead Auditor



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Training - PE International (Jakarta), IEMA Advanced EMS Auditor (IEMA / EARA ISO 14001) Auditor / Lead Auditor Training Course - PE International (Jakarta), OHSAS 18001 Lead Auditor Training Course - PE International (Jakarta).

Working experience: Experienced in Quality Control from 1994-2004. Auditor for Quality Management System since 2004 – present. Auditor for Environmental Management System since 2005 – present. Auditor for OHSAS 18001 since 2007 - present. Conducted over 100 Quality Management System audits since 2004, over 50 Environmental Management System audits since 2006 , and over 25 OHSAS audits since 2007

Irpan Kadir (IK)

Auditor

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

Trainings attended : Sustainable Natural Production Forest Management (Pengelolaan Hutan Alam Produksi Lestari - PHAPL) assessor training (May 2003); Forest Plantation Management (August 2003) training - Indonesian Ecolabel Institute (LEI).

Working experience: Experienced as external auditor of PT TUV International Indonesia for RSPO Principles & Criteria since year 2009 and Sustainable Forest Management auditor since year 2003. Has experience in conducting assessments of performance and social mapping for mining and forestry companies. He also has experience as a senior social researcher since year 2000 to 2005 and is currently a CSR consultant and trainer at A + CSR Indonesia since year 2006.

2.3 Assessment Methodology & Agenda

The certification assessment combined with supply chain certification assessment was conducted on December 16 to 21, 2011 (consultation public was conducted 12 December 2011) as per the assessment programme below. After lifting of suspension of RSPO certificate (Sei Mangke POM – PTPN III) the certification body has conducted re-verification (to up-date data and information) for major findings dated 9-13 September 2013 as per the assessment programme below. The assessment was carried out in accordance with TÜV Rheinland Malaysia’s RSPO audit procedure as well as the RSPO Certification Systems document. During assessment, the qualified TÜV Rheinland assessors used the RSPO standard as endorsed for the country in which the assessment took place and recorded their findings.

Due to the location and proximity of the estates, combined with common management systems, it was possible to carry out both field and document assessments of all estates and the mill within the time frame without compromising the integrity of the assessment in anyway.

All 7 (seven) estates and 1 (one) mill were visited and the assessment team carried out field and document assessments of compliance to all the RSPO principles and criteria. Common systems were identified and specific evidence was recorded for individual estates. Interviews were conducted at all estates and the mill.

The company proposed the correction and corrective action for all identified non-compliance raised to the certification body 30 days after the closing meeting. Verification of closure of major non-compliance was conducted 2 months after the closing meeting of the main assessment and implementation of corrective actions for minor non-compliances will be verified during the next surveillance audit. The certification assessment agenda is as explained below.



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A. Main Assessment Agenda (12- 21 December 2011)

Date / Time (1)

Organisational Unit and Processes

Auditor / Abbrev. Interviewee Procedure – RSPO Element -

Standard Chapter

Monday December 12, 2011 09.00–12.00

Stakeholder consultation Dian Susanty Soeminta(DSS), Irpan Kadir (IK)

Selected stakeholders

Estate Aek Nabara North (KANAU) Hall & Facilitator : DSS, include Carol Ng (CN)

12.00-13.00 Lunch break Dian S, Irpan Kadir , Carol Ng

13.00-15.00 • Opening Meeting General • Introduction by team leader.

Presentation of estates by respective managers.

• Presentation of Oil Mills source of FFB by respective managers

Auditor team & auditee

Top Management & Related Manager

Thursday, December

Traveling from Medan to Aek Nabara (PANAS) (mess)

Agus Salim Alfat

14.30-…… Traveling from Aek Torop & Aek Raso (mess) to Aek Nabara (mess)

Auditor team (exc. ASA)

Friday, December 16, 2011 Mill 08.00-17.30

Management Off ice & Legal Issue

• All related legal requirement & documentation checking,

• All procedure or SOP related operation,

• Maps in appropriate scale.

Dian SS, Cecep Saepullah, Agus Salim A, Fadli

Mill Manager

Principle 1 Criteria 1.1;1.2; Principle 2 Criteria2.1;2.2;2.3; Principle 3 Criteria 3.1;

Economic Issue & Process Compliance

• Management Plan • Environment Issue • Legal compliance & Process

compliance

Dian SS Manager Principle 1 Principle 3 Principle 4 Principle 8 Principle 5 Principle 2

Social issues • Labour Union (if any)

Contractors (if any) • Workers facilities (house,

school, transport, sports, etc.) • Female workers • Sexual harassment policy • Health & Clinic • Wage • Local communities

Fadli Manager and Employee (Administration staff ) in mill

Principle 2 Criteria 2.1; 2.2; 2.3; Principle 4. Criteria 4.7; 4.8 Principle 6 Criteria 6.1 to 6.11 Principle 8 Principle 2 Principle 1 Criteria 1.1; 1.2;

OHSAS, Environmental Issue Agus Salim Manager, OSH team (if any) and Employee in

Principle 4 Principle 5



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Date / Time (1)



Standard Chapter Verification document and field of

RSPO Supply Chain Certification System

Dian SS & Cecep Saepullah

Manager and SCCS team

RSPO SCCS (Nov 2009)

17.30 End of 1st day audit

Plantation Office (Estate Rantau Prapat (KRPPT)) 08.00-17.30

Management Office & Legal Issue

• HGU legal requirement , • All related legal requirement & • documentation checking, • All procedure or SOP related

operation, • Maps in appropriate scale.

Hendra Fachrurozi , Aswan Hasibuan, Irpan Kadir

Plantation manager

Principle 1 Criteria 1.1; 1.2; Principle 2 Criteria 2.1;2.2;2.3; Principle 3 Criteria 3.1;

Economic & Environmental Issue • Management Plan • Environmental Issue • Conservation of natural

resources and biodiversity

Hendra Fahrurozi

Manager, HCV & Environmental team

Principle 3 Principle 4 Principle 7 Principle 5 Principle 2



school, transport, sports, etc.) • Female workers • Sexual harassment policy • Health & Clinic • Land used • Local communities • Ethnic Discrimination • Significant impact (social

aspect)

Irpan Kadir

Manager Social/CSR team Female Committee Doctor/Nurse in clinic

Principle 2 Criteria 2.1; 2.2; 2.3; Principle 4. Criteria 4.7; 4.8 Principle 6 Criteria 6.1 to 6.11 Principle 7 Principle 8

OSHAS, Environmental & Best Practices Issue

Aswan Hasibuan

Manager & Ass Manager Environment


17.30 End of 1st day audit

Saturday, December 17, 2011 Plantation Office (Estate Merbau Selatan




Cecep Saepullah, Aswan Hasibuan, Irpan Kadir

Plantation manager




Cecep Saepullah





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Date / Time (1)



Standard Chapter




aspect)

Irpan Kadir Manager Social/CSR team Female Committee Doctor/Nurse in clinic



Aswan Hasibuan



Plantation Office (Estate Mambang Muda (KMMDA)) 08.00-17.30




Dian Susanty S, Hendra Fahrurozi, Agus Salim Alfat, Fadli

Plantation manager




Dian Susanty S & Hendra Fahrurozi






aspect)

FadliA Manager Social/CSR team Female Committee Doctor/Nurse in clinic



Agus Salim A, Dian Susanty S



17.30 End of 2nd day audit

Sunday, December 18, 2011

Stay in Estate Mambang Muda (KMMDA)

Auditor team

17.00-..... Traveling to Estate Labuhan Haji (KLAJI)

Cecep Saepullah, Fadli , ASA



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Date / Time (1)



Standard Chapter

17.00-……..

Traveling to Estate Bandar Selamat (KBDSL)

Dian Susanty S, Hendra F, AH, IK

Monday, December 19, 2011 Plantation Office (Estate Labuhan Haji)

Management Off ice & Legal Issue • HGU legal requirement , • All related legal requirement & • documentation checking, • All procedure or SOP related


Cecep Saepullah , Fadli , Agus Salim Alfat

Plantation manager


Economic, & Environmental Issue + Process Compliance

• Management Plan HCV Management Environment Issue

• Legal compliance & Process compliance

Cecep Saepullah


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



school, transport, sports, etc.) • Female workers • Sexual harassment policy • Health & Clinic • Land used • Local communities • Ethnic discrimination • Significant impact (social

aspect)

Fadli Manager Social/CSR team Female/Gender Committee Doctor/Nurse in clinic Labour Union (if any) Worker & Contractor (if any)



Agus Salim Alfat

Manager & Ass Manager Environmental team Worker &


17.30 End of 3 rd day audit

Plantation Office (Estate Bandar Selamat (KBDSL)) 08.00-17.30


• HGU legal requirement , • All related legal requirement &

documentation checking, • All procedure or SOP related


Dian Susanty S, Hendra Fahrurozi, Aswan Hasibuan, Irpan Kadir

Plantation manager









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Date / Time (1)



Standard Chapter




aspect)

Irpan Kadir Manager Social/CSR team Female Committee Doctor/Nurse in clinic



Aswan Hasibuan & Hendra Fahrurozi



17.30 End of 3 rd day audit

Tuesday, December 20, 1011 Plantation Office (Estat e Sei




Dian Susanty S, Hendra Fahrurozi, Agus Salim A, Irpan Kadir

Plantation manager


Economic, & Environmental Issue +

• Process Compliance Management Plan HCV & Management Environment Issue





Social issues • Labour Union (if any) &



aspect)

Irpan Kadir Manager Social/CSR team Female/Gender Committee Doctor/Nurse in clinic Labour Union (if any) Worker & Contractor (if any)



Agus Salim A & Hendra Fahrurozi

Manager & Ass Manager Environmental team Worker & Contractor (if any)




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Date / Time (1)



Standard Chapter

Plantation Office (Estate Pul o Mandi (KPMDI)) 08.00-17.30


• HGU legal requirement , • All related legal requirement &

documentation checking, • All procedure or SOP related

operation, • Maps in appropriate scale

Cecep Saepullah , Aswan Hasibuan, Fadli

Plantation manager

Principle 1 Criteria 1.1; 1.2; Principle 2 Criteria 2.1;2.2;2.3; Principle 3

Economic, & Environmental Issue + Process Compliance

• Management Plan HCV Management Environment Issue


Cecep Saepullah



Social issues • Labour Union (if any) and



aspect)

Fadli Manager Social/CSR team Female/Gender Committee Doctor/Nurse in clinic Labour Union (if any) Worker & Contractor (if any)



Aswan Hasibuan

Manager & Ass Manager Environmental team Worker &


Wednesday, December 21, 2011 Director Off ice

Discuss auditor team (internal) Auditor team & director

TRID

14.00-15.00

Discuss with section relevant Preparation for closing meeting

Auditor team Auditor team

Director, Manager

Principle 1 – 8

15.00-17.00

Closing meeting Auditor team, Director TRID & auditee

B. Re-verification Assessment (up-date of data and information) Agenda (9-13 September 2013)

Date / Time (1) Activity Auditor Auditee Remark



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Date / Time (1) Activity Auditor Auditee Remark

Monday, 9 September 2013 05.45-08.10 Travel: Jakarta - Medan Hendra

Fahrurozi (HF)

- • GA 0180

08.30-17.00 Travel: Medan - PANAS HF

Tuesday, 10 September 2013 08.00 – 08.30 08.30 – 12.00

PANAS

Opening Meeting Data and information updating as to:

• Major NCR; and • Report.

HF Mill & Estate Management Mill Management

PANAS Office

• RSPO P&C (Principle 1 to 8) • RSPO SCCS (E.1 to E.6)

12.00-14.00 Lunch break and prayer HF 14.00-17.00 Continue this morning’s agenda HF

Wednesday, 11 September 2013 08.00-12.00

KANAS / KRPPT / KMSTN / KMMDA /

Labuhan Haji / KBDSL / KSDDP / KPMDI

Data and information updating as to:

• Major NCR; and • Report

HF

Estate Management

• RSPO P&C (Principle 1 to 8)


Thursday, 12 September 2013 08.00-12.00

KANAS / KRPPT / KMSTN / KMMDA /

Labuhan Haji / KBDSL / KSDDP / KPMDI

Data and information updating as to:

• Major NCR; and • Report.

HF

Estate Management

• RSPO P&C (Principle 1 to 8)


Friday, 13 September 2013 08.55-11.20 Closing Meeting HF

2.4 Stakeholder Consultation and Stakeholders Con tacted

The stakeholder consultation involved both external and internal stakeholders. External stakeholders were notified to make comments on the certification assessment by placing an invitation to comment on the RSPO website. Stakeholders included those immediately linked with the operation of the company such employees, outgrowers, the local government, NGO’s, trade and labour unions and local communities.

Stakeholder consultation took place in the form of meetings and interviews. Meetings with stakeholders were held to seek their views on the performance of the company with respect to the sustainability practices outlined in the RSPO Principles & Criteria, and to comment on aspects where improvements could be made. Meetings with local communities were held at their respective premises within and near the company’s area. A stakeholder consultation meeting was also held on Aek Nabara Utara meeting room on 12 December 2011. Letters inviting individual stakeholders to the stakeholder consultation meeting were prepared and sent to the individual stakeholders, while electronic mail and telephone calls were made to arrange the meetings.

In all the interviews and meeting, the objectives of the RSPO and the purpose of the assessment was clarified at the outset followed by an evaluation of the relationship between the stakeholders and the company before discussion proceeded to obtain the stakeholders feedback on the company’s compliance to different aspects of



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the RSPO Principles & Criteria. Although several stakeholders were not familiar with RSPO but they agreed with its objective and expressed their willingness to collaborate in the promotion of sustainable palm oil in North Sumatera province. In all interviews and meeting, the assessment team did not restrict discussion of both the positive and negative aspects of operations conducted by Aek Nabara Selatan Palm Oil mill and its supply estates.

The stakeholder consultation meeting held with stakeholders during the audit was extensive and productive, with an attendance of 102 attendees. This was followed by site inspections, including visits to the local communities, interviews with land claimants and contractors, and inspections of worker amenities and infrastructure. All stakeholder issues raised were recorded and forwarded to the management for their written response, and this is summarised in Section 3.4.The list of stakeholders that attended the stakeholder consultation meeting and stakeholders interviewed during the assessment is included as Appendix 4.

2.5 Date of Next Surveillance Visit The next surveillance visit is planned for March 2015



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3.0 ASSESSMENT FINDINGS 3.1 Summary of Findings

During the certification assessment, 12 non-compliances were assigned against Major Compliance indicators and 10 non-compliances were assigned against Minor Compliance indicators. Further explanation of the non-compliances raised and corrective actions taken by the company are provided in Section 3.2. The observations & opportunities for improvement are listed in Appendix 5. The following is a summary of findings made for the criteria listed in the RSPO Principles & Criteria Indonesian National Interpretation.

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

Findings:

There is a mechanism has been establish by PTPN III corporate for incoming request of information and how to response that request as stated on IK-3.00-13/01 (Stakeholder communication and Information) and IK-3.00-16/01 (Provision of Data for Interests of Stakeholders). Requests for information made by stakeholders at the mill and the estates were recorded in one document together with any other requests or letters received from stakeholders, as required by the company’s procedure. As seen from the company’s log book, there are some records of request of information with corresponding response from the company, such as :

1. Letter from Deputy Head of Labuhan Batu District no. 660/3860/BLH-LB/AM/2010 dated 23 December 2010 regarding flooding prevention programme and biopore well construction and rain water collection pond submitted to Aek Nabara Selatan Mill.

2. Letter from Environmental Office dated 9 March 2011 regarding request of information on company’s CSR programme to Aek Nabara Selatan estate

3. Proposal from Pulo Dogom Islamic Boarding School No. 08/Pon.Pes/DAZ/PD/2011 to Mambang Muda estate regarding request of donation for new classroom and school vehicle.

4. Informal request of football field construction from Aek Bambang villager to Bandar Selamat Estate

PTPN III corporate also has call centre 3030 which is open announced in the front of estate office or mill office. Call centre is centralised in Medan head office and checked daily by corporate public relationship. Incoming complaint or request of information from stakeholder through call centre will be forwarded to relevant sections to be followed up. During main assessment this call centre still new, no incoming request of information received yet.

There are records of company’s responses for above incoming requests from stakeholder such as :

1. There are several biopore well and rain water collection pond has been constructed in Aek Nabara Selatan Mill.

2. There is response letter from Aek Nabara Selatan Estate Manager No. PANAS/X/26A/2011 dated 10 March 2011 to Environmental Office.

3. There is response letter for Islamic boarding school Pulo Dogom from Mambang Muda Estate Manager regarding consideration of incoming proposal and waiting from decision from Corporate CSR head.

4. There is no response for informal request from Aek Bamban village due to company require formal letter for donation request, as stated in IK-3.00-16/01.

It is mentioned in IK-3.12-01/01 rev.05 standard operating procedure for document and data control dated 15-02-2010, that the company shall maintain all records of requests for information and responses made by the company for at least 3 years. Evidence so far shows that company maintains these records in accordance with this SOP.

Compliance status: Full Compliance

Criterion 1.2: Management documents are publicly av ailable, except where this is prevented by commercial confidentiality or where disclosure of i nformation would result in negative environmental or social outcomes.



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Findings:

There is a circular letter from PTPN III Director No. 3.00/SE/01/2009 dated 5 January 2009 regarding a list of document can be made available to general public, however the letter lack to define that some legal documents such as licences documents including HGU certificate, documentation OHS programme, documentation of continuous improvement programmes as required by RSPO P & C is not included in list of published documents, this is raised as non-compliances (NCR No. 2011-01 of 22). The documents listed on the attachment of circular letter can be obtained up on request.

Mechanism for incoming request of information and how to response that request already stated on IK-3.00-13/01 (Stakeholder communication and Information) and IK-3.00-16/01 (Provision of Data for Interests of Stakeholders). Requests for information made by stakeholders at the mill and the estates were recorded in one document together with any other requests or letters received from stakeholders, as required by the company’s procedure. As seen from the company’s log book. Retention period for records keeping relating to incoming request of information is mentioned in IK-3.12-01/01 rev.05 standard operating procedure for document and data control i.e. at least 5 years. Compliance status: Non-Compliance

NCR No. 2011-01 of 22

PTPN III Director Circular Letter No. 3.00/SE/01/2009 on Publishable Documents has been issued on 5 January 2009. However the some legal documents such as licences documents including HGU certificate, documentation OHS programme, documentation of continuous improvement programmes as required by RSPO P & C are not included in list of published documents in the letter.

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

Findings:

The company provides a mechanism for evaluation of implementation and compliance to applicable legal requirements in a standard operation procedure i.e. IK-3.11-01/01, rev 2, dated 2 June 2009. There are also procedures which define the mechanism of evaluation of compliance to regulations related to the company's plantation, legislation related to the environment, legislation relating to labour, and regulations related to health and safety. The SOP states that the identification and evaluation is to be carried out 2 (two) times a year and conducted by the each section, and estate and will be compiled by Legal officer and supported by the Head of Operations / field and other departments within the company organisation. Most estate maintains and updates their list of all applicable legal requirements relating to environmental, occupational safety and health, the company plantations, and employment as well as records of internal compliance checks to legal requirements, except Mambang Muda Estate has no list of legal regulation which is published since year 2010 until now, this is raised as non-compliance (NCR No. 2011-02 of 22).

The company maintains a list of all applicable legal requirements relating to environmental, occupational safety and health, the company plantations, and employment as well as records of internal compliance checks to legal requirements

Some evidence of compliance with relevant legal requirements as seen on latest legal requirements register i.e. "Report of legal and other requirement " for year 2011 in Aek Nabara Selatan Mill and Estate, Mambang Muda, Labuhan Haji, Bandar Selamat, Rantau Prapat, Sungai Dadap and Merbau Selatan. The company also uses a third-party consultant, i.e. Damanik, Zuhriati and friends for ensuring their compliances to law and government regulation which is conducted on November 2011. Most of applicable legal and other requirement has been met however some of evidence of compliances still not found during main assessment this is raised as non-compliances No.2011-03 of 22, e.g.: - Law No. 22 of 2009 on traffic and road transport, applicable date of 22 June 2009, - Government regulations No. 15 of 2010 concerning the implementation of spatial planning. - Regulation of the Government of Indonesia No. 11 year 2010 concerning the control and utilisation of

wastelands, set on 22 January 2010. - Government regulations No. 10 of 2010 regarding ordinance changes the designation and functions of

forest area, set on 22 January 2010.

Bandar Selamat Estate yet to revise registration Letter of Plantation No.HK.350/525/Dj.Bun.5/VII/2001 dated 5



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July 2001 for Bandar Selamat Estate because no updating information in accordance with the current state of commodity types, the commodity in the letter still state Cacao not include oil palm. This condition was raised as non-compliance (NCR No. 2011-04 of 22).

Evidence of efforts made to comply with changes in the regulations was checked through the latest legal register updated on May 2011 & confirmed that latest applicable legal requirements as described above have been updated. The latest legal register is also sighted to be available at the respective plantation offices, however in all estate office there is no evidence that company has been adjusting policies concerning minimum wages for sub-contractor workers comply with applicable District Minimum Wages as District Minimum Wage Rate (UMK) as required by local government regulation every year. This condition was raised as non-compliance (NCR No. 2011-05 of 22 ). Compliance status: Non-Compliance NCR No. 2011-02 of 22 Mambang Muda Estate has no list of legal regulations which is published since year 2010 until the audit time NCR No. 2011-03 of 22 No evidence found indicating compliance evaluation against several 2009 and 2010 regulations such as: - Law 22 of 2009 on Traffic and Road Transport, taking effect as of 22 June 2009; - Government Regulation No. 15/2010 on the Spatial Planning Implementation; and - Government Regulation No. 10/2010 on Procedure for Forest Land Use and Allocation Change, taking effect as of 22 January 2010. NCR No. 2011-04 of 22 Plantation Business Registration Decree No. HK.350/525/Dj.Bun.5/VII/2001 dated 5 July 2001 for Bandar Selamat Estate still states that the company’s plantation commodity is only rubber, instead of oil palm plantation. NCR No. 2011-05 of 22

No evidence has been found indicating that the company has adjusted its minimum wage rate policy to its sub-contractor’s workers in order to have them comply with applicable District Minimum Wage Rate (UMK), being an effort to comply with changes in wage regulation.

Criterion 2.2: The right to use the land can be dem onstrated, and is not legitimately contested by loc al communities with demonstrable rights.

Findings :

Aek Nabara Selatan Mill location is inside Aek Nabara Selatan Estate, so the legal land title of mill is incorporated together with the HGU certificate owned by Aek Nabara Selatan Estate. The mill has licence permit such as : - Plantation Business Registration Certificate (STDUP) No. HK.350/522/DJ.Bun.5/VII/2001 from Ministry of

Agriculture c.q. Directorate General of Plantation Production Development dated 5 July 2001. - Trade Licence No. 4821/4808/4786/i.01/1904/11/2010 - Land application permit from Head of Labuhan Batu District Decree No. 503.660/88/BLH-LB/2011

There are 7 (seven) company’s estates listed as suppliers for Aek Nabara Selatan Mill which is include in certification scope i.e. Aek Nabara Selatan Estate as main estate supply to Aek Nabara Selatan Mill, and other estates such as Rantau Prapat, Bandar Selamat, Merbau Selatan, Mambang Muda, Sei Dadap and Labuhan Haji. Each estate has their own legal land title, i.e.:

1. Aek Nabara Selatan Estate has the Right of Cultivation (HGU) Certificate No. 13 under Head of National Land Agency Decree No. 116/HGU/BPN/2005 (dated 23 December 2005) with total area of 11,026.99 ha where valid from 23 December 2005 to 22 December 2040. This area is divided into two estate i.e. (i) Aek Nabara Selatan Estate with total area 7,312.68 ha (appropriate with map of measurement No. 28/12/2004); and (ii) others being area for Aek Nabara Utara Estate for total area 3,714.31 ha (not include in assessment scope).

2. Rantau Prapat Estate has the land use right title certificate no.11 according to Head of National Land Agency Decree No. 115/HGU/BPN/2005 (dated 23 December 2005) for total area 3,357.09 ha valid from 23 December 2005 to 22 December 2040.

3. Bandar Selamat Estate has HGU certificate for total area of 3,570.34 ha.



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4. Mambang Muda Estate has the land use right title certificate No. 12 according to Head of National Land Agency Decree No.119/HGU/BPN/2005 (dated 23 December 2005) in Mambang Muda Plantation village, Kuala Hulu Sub District, Labuhan Batu District for total area 2,624.29 ha where valid from 22 January 2005 to 22 December 2040. However the company has stated that the current operational area is 3,022.75 ha, there is difference area between actual operational area with statement in the land use right title amount of 398.56 ha. The company use local government land (spatial planning of Labuhan Batu Raya District) with total area 328.87 ha as planted area and measurement deviation 69.69 due to differentiation of old measurement using Photogrammetry and the new measurement base on cadastral map. There is a history of Mambang Muda Estate area according to former HGU stated on Ministry of Home Affairs Decree No. SK.17/HGU/DA/80 about Mambang Muda area was 3,050 Ha, however the land was not registered and returned back to the State’s direct control. PTPN III proposed to get the land use right title according to checking result from relevant institution as explained on measurement result report (Land Checking Committee-B) dated 10 September 2004 No. 05/PPT/B/2004 stating that there is other purposes area i.e. 377.21 ha as farming, school, Telkom, and regional spatial plan (328.87 ha), according to that condition government only approved company’s HGU 2,624.29 ha.

5. Merbau Selatan Estate has the Right of Cultivation (HGU) certificate No 09 (Land number : 02.12.06.03.2.00009) (appropriate with map of measurement No. 11/12/2003) for total area 1,613.02 ha and No 10 (Land number : 02.12.06.03.2.00010) (appropriate with map of measurement No.12/12/2003) with total area 1,580.65 ha, according to Head of National Land Agency Decree No.118/HGU/BPN/2005 (dated 23 December 2005) with total area 3,193.67 ha where valid from 22 January 2005 – 22 December 2040. There is difference total area between actual operational (3,293.55 ha) with statement in the Right of Cultivation (HGU) certificate (3,193.67 ha) amount of 99.88 ha. PTPN III has submitted application of the land use right title for additional area (99.88 ha) dated 15 January 2011 (No. 3.09/X/1232/2010) so existing condition is in-process. Application was submitted by the company in the near future because compensation to the community has been implemented.

6. Sei Dadap Estate has the land use right title certificate No.1 according to Head of National Land Agency Decree No. 93/HGU/BPN RI/2009 with total area 2,869.62 ha and Head of National Land Agency No. 52/HGU/BPN-RI/2009 with total area 1,755.71 ha so grand total are 4,625.33 ha. There is difference total area between actual operational (5,174.73 ha) with statement in the Right of Cultivation (HGU) (4,625.33 ha) amount of 549.40 ha. The deviation in planted area is caused differentiation of old measurement using Photogrammetry and the new measurement base on cadastral map. Head of National Land Agency Decree No. 93/HGU/BPN-RI/2009 still under revision because several history of revise process HGU in Sei Dadap, such as :

• Letter from PTPN III propose to Ministry of State Owned Company No. 3.09/BUMN/42/2010, dated 28 April 2010 regarding proposal to revise area to 2,938.90 ha because there was double reduction from 1st the land use right title certificate i.e. 3,008.24 Ha minus 69.34 Ha, with an additional deduction of 69.34 ha to became 2,869.62 ha ;

• The company’s actual area under proposal is 2,938.90 ha. There is letter from National Land Agency of North Sumatera to Head Office of National Land Agency in Jakarta (No. 1853-300.8/x/2010 dated 19 October 2010) on revision of the land use right title PTPN III-Sei Dadap Estate as stated on Head of National Land Agency Decree No. 93/HGU/BPN-RI/2009 dated 6 July 2009 from 2,869.62 Ha to 2,938.90 Ha.

7. Labuhan Haji Estate has the land use right title certificate No.14 according to Head of National Land Agency Decree No. 117/HGU/BPN/2005 (dated 23 December 2005) with total area 3,248.07 ha (number of building : 02.12.03.20.00001). Based on spatial plan map of Labuhan Baru District, there are forest areas amount of 2,200 ha which have not been shown record of the release of forest area. This condition was raised as non-compliance as stated on NCR No.2011-06 of 22.

Legal boundaries are clearly demarcated and maintained on site. As seen on boundary stone no VII and XII on Aek Nabara Selatan estate and boundary stone no. 10 and 25 on Sei Dadap estate.

The process of managing identification of community activities within company land areas related to the legal rights, traditional rights and other uses of land need to be improved. Land dispute using the conflict resolution mechanism is according to the free, prior and informed consent process. A documented procedure for conflict resolution that is approved by all parties is also in place, however, several local communities are still not fully aware of this procedure as discussed with a villager near Bandar Selamat villager. Compliance status: Non-Compliance

NCR No. 2011-06 of 22 No record is available on process of land ownership transfer for 2,200 ha of forest area in Labuhan Haji Estate



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which is indicated as forest area according to Labuhan Batu District’s current spatial layout plan map. Criterion 2.3: Use of land for oil palm does not di minish the legal rights, or customary rights, of ot her users, without their free, prior and informed conse nt.

Findings:

No specific traditional tenurial rights have been found in all PTPN III’s estates as the plantation has already existed before the surrounding community’s settlement.

According to information stated in Social Impact Assessment (SIA) conducted with the local community’s participation, following two types of non tenurial traditional activities has been identified as relevant to the local community’s in the seven estates: - traditional logging for subsistence purposes; and - cattle grazing.

In addition to these activities, there are also sites sacred to local community such as cemeteries and water sources. These cemeteries hold remains of those whose families no longer inhabit the estate area. The community uses the water sources during dry season when wells or rivers run dry. The estate management is aware of the presence of such areas/sites, thus supports their maintenance and activities using them, despite the areas’ land status belonging to PTPN III.

Several records have been found on agreements negotiated between the traditional landowners and estate management supplemented with appropriately scaled maps. For example, (i) negotiation on grazing location map in Mambang Muda Estate being agreement made by and between the villagers and the estate manager on 4 October 2011; and (ii) agreement between Bandar Selamat Estate Manager and heads of village surrounding the company’s location, Songsonga, Police Officer, and youth leader made on 10 January 2011. There is a map of traditional activities in each agreement, informing location of the cattle grazing area agreed by the community inhabiting the concession.

Copies of negotiated agreements detailing process of making such consent are available in the estate offices, such as Aek Nabara Selatan, Bandar Selamat and Mambang Muda estate offices. Compliance status: Full Compliance Criterion 3.1: There is an implemented management p lan that aims to achieve long-term economic and financial viability.

Findings:

PTPN III’s current documented plan to which the company’s working plan refers is the Long-Term Plan (RJP) document. Information provided in the RJP document focuses more on production, planting and expenditure (cost) plans associated with the both estates and mill’s production operation in a 5-year working period. The RJP document also includes brief information on the company’s working plan related to social aspects, legal compliance, and environmental issues under its responsibility. However, the RJP document is yet to include the company’s other activities such as long-term Corporate Social Responsibility (CSR) for the company’s stakeholders. The RJP includes working plan documents serving as guidance to all PTPN III estates and mills activities. At time of the assessment, the company has established an Rencana Jangka Panjang called RJP (Long Term Working Plan) for 2009-2013 period (revised into 2011-2015), including an RJP for Aek Nabara Selatan Mill and its [supply base]. The RJP also informs PTPN III’s plan of 5-year yield in averagely 23 tonne/ha, a plan of 5-year OER in averagely 23.85% and KER in 4.60%. This document includes a 5-year period profit/loss analysis. The RJP will serve as guidance to the estate management plan, which must be followed by all estates in their operation planning, as well as to achieve financial viability. However, the estate management plan documents available in each estate (except Bandar Selamat Estate) provide no information on profit/loss analysis as planned to achieve financial viability for period 2009 to 2013. This was raised as a non-compliance as stated on NCR No. 2011-07 of 22.

As an established plantation, PTPN III’s estate under this assessment have already completed several planting cycles/crop rotations, in accordance with palm oil trees properties having maximum productive age of limitedly 25 years. Some estates have replanting programme as documented in their RJP documents. These documents were made for 2012-2017 period. They are Sungai Dadap Estate having 485.12 ha for 2014; 595.60 ha for year 2016; and 495.00 for year 2017.; and Labuhan Haji estate having 91.55 ha for year 2016 and 16.03 ha for year 2017., yet no plan available thereafter. Compliance status: Non-Compliance



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NCR No. 2011-07 of 22 Bandar Selamat Estate has yet to make profit/loss analysis as planned to achieve 2009-2013 financial viability. Criterion 4.1: Operating procedures are appropriate ly documented and consistently implemented and monitored.

Findings:

PTPN III’s estates are provided with work instructions for all estate activities including land clearing, mature and non-mature planting management, manuring, transportation, pest management, soil conservation, hazardous chemical use, etc. Evidence has been found as to the implementation of the work instructions, e.g. sighted onsite at Rantau Prapat and Aek Nabara Selatan Estates, where horseshoe method or terracing and adequate ground cover at sloped planted areas are implemented. They are done based on the company’s Work Instruction for Land Preparation and Management of Plantings, Sloped Land and Lowland Areas (Work Instruction No. IK-3.01-14/06). Census records are maintained as per the company’s Work Instruction No. IK-3.01-17/14 for Oil Palm Pest Management. At Bandar Selamat Estate, a map prepared prior to 2008 replanting for Division 5 and 6 has been sighted, which was prepared in accordance with the company’s Work Instruction No. IK-3.01-10/01 for Mapping and Measurement. The mill also has documented SOPs available for the mill processes.

Bandar Selamat Estate carries out operation checks through internal audits at least once a year by Internal Monitoring Division. The last internal audit report is dated 30 November 2011 and the previous audit report 16 November 2011. The 2011 internal audit covered assessment of estate FFB production and productivity, fertiliser application, payment of premium for harvesting foreman, inventory records, chemical distribution, finance, etc.

All estates maintain operational results records. For example, Bandar Selamat Estate whose planting activity monthly report for November 2011 was sighted. The report covers actual FFB transported, FFB production, actual fertiliser application, chemical use record, pest census record, etc. Compliance status: Full compliance

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

Findings : There is evidence of regular soil and leaf analysis carried out in all estates. For example, the last soil analysis in Aek Nabara Selatan Estate was done on 16 September 2011 over 102 samples, while the last leaf analysis was carried out on 24 August 2011 over 181 samples by the Indonesian Oil Palm Research Institute (PPKS). Based on analysis results a fertilizer recommendation report is prepared annually by the institute, e.g. this report was available for Aek Nabara Selatan estate. The company has an internal target to use only 75% of fertilizer recommended. As sighted from fertilizer applications for Division 6 of Aek Nabara Selatan estate, actual fertilizer applications for year 2011 was 225,656 kg, which is 75% of recommended amount of 300,874 kg. Sighted from field visits to Division 3 and Division 6 of the estate, there is adequate plantings of leguminous covers crops and application of EFB as part of efforts to increase soil fertility. Monthly EFB applications for each estate division are available, i.e. program sighted for October 2011 at Division 6 of Aek Nabara Selatan estate, and EFB applications records for Division 2 of Aek Nabara Selatan estate. Compliance status: Full Compliance

Criterion 4.3: Practices minimise and control erosi on and degradation of soils.

Findings :

The estates have no map of marginal soils as there no marginal soils are found there. The estates’ soil consists of podzolic soils, i.e. Typic Paleudult (yellowish brown podzolic) at Aek Nabara Selatan Estate, which is not classified as a marginal soil, although it is prone to erosion at sloped areas.

PTPN III has a work instruction for Land Preparation and Management of Plantings and Sloped Land and Lowland Areas (Work Instruction No. IK-3.01-14/06). Its practices description includes planting of leguminous



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cover crops once drainage is constructed and mechanical land management depending on the slope degree (i.e., ‘benteng’ (bunding) at sloped areas of less than 3°, ‘tapak kuda’ (horseshoe) method at sloped areas of 3°-28°, and terracing or contouring at others of above 28°). Rantau Prapat and Aek Nabara Selatan Estates area consists of flat to undulating parts, while Merbau Selatan Estate generally consists of flat land. As sighted in Rantau Prapat and Aek Nabara Selatan Estates, the horseshoe or terracing and adequate ground cover methods in planted sloped areas are implemented, and no significant erosion has been found. However, according to the fertiliser recommendation report for Aek Nabara Selatan Estate, erosion has been found in several undulating locations such as block O 20 TT.2005 of Division 3. This has been noted as observation.

Aek Nabara Estate has budgets for mechanical road maintenance, i.e. for July-December 2011. The division’s budgets are IDR 40,143,760 for main road maintenance; IDR 2,885,436 for grading; and IDR 732,086 for roller. Documentation has been prepared for actual monthly road maintenance works in ‘Records of Use of Tractor in 2011’. Manual road maintenance is carried out in all estates on regular basis and the records are maintained. However, some estates’ roads are still not in good condition and signs of mild erosions at some part of these roads are found, indicating that further maintenance is required. This has been noted as an observation.

No peat soils are present in Rantau Prapat, Merbau Selatan, and Aek Nabara Selatan Estates, thus peat water management plan is not required. Compliance status: Compliance with observations

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

Findings:

Aek Nabara Selatan Estate has installed signboards by river stating that no chemical spraying is allowed. This has been seen in the river from water reservoir. The estate has also carried out plantings of local species of plants at the river riparian buffer zones. However, based on interviews with manurers from Division 3 of Aek Nabara Selatan Estate, manuring is carried out in the estate riparian river and far from the water reservoir although they mentioned that only manual weeding was applied to the palm trees located by the river buffer zone, instead of chemical spraying. Sprayers interviewed in Bandar Selamat Estate have been informed not to carry out spraying near water sources, such as a spring in Division 3.

The main water source to all estates is groundwater wells. There is evidence of monitoring of water quality, i.e. in implementation reports of Environmental Monitoring Plan (RPL)/Environmental Management Plan (RKL) documents for each estate, where they are required to conduct analysis of groundwater used for consumption.

Aek Nabara Selatan estate has a documented programme for water use and conservation for end of 2011 and 2012, including maintenance and installation of water conservation technology, replacement of leaking water installations and informing workers to conserve water. As this is a newly introduced programme, its implementation will be verified in the next surveillance audit. The estate also has monthly records of water use in various estate locations, including the office, housing, clinic, canteen, school, mess hall, transporter washing facility, etc. The water use target is set and the records show no monthly target excess during 2011.

The mill carries out land application of Palm Oil Mill Effluent (POME), and the quality control conducts monthly sampling of effluent Biochemical Oxygen Demand (BOD) for discharge points as well as monitoring wells. POME analysis is conducted by the external laboratory. The available analysis results are dated, among others, 27 October 2011, 27 September 2011, 23 August 2011 and 30 July 2011. All months results show that the BOD levels of the samples are below the legal requirement that applies to land application (5,000 ppm) as per Environment Ministry State Minister Regulation No. 28/2003 on Technical Guidelines for Assessment of Wastewater Use from palm Oil Industry to Soil. The results are: BOD of 1,567 on 27 October 2011; BOD of 1,956.9 on 27 September 2011; BOD of 2,050.8 on 23 August 2011; and BOD of 1,762.0 on 30 July 2011. The mill also runs water sampling and analysis of the monsoon drain water against parameters for clean water under Health Ministry Regulation No. 416/MENKES/PER/IX/1990. The last analysis result available is dated 29 May 2011, where it is found that the clean water quality still complies with limit of 5 according to relevant regulation.

The mill recorded daily water use for processing FFB per tonne. It has set standard of using 1.5 tonnes of water for processing FFB per tonne. Data on the mill’s water use indicates that it was running below the water needs from January to November 2011 (averagely 1.4 tonnes of water were used for processing FFB per tonne). Compliance status: Full Compliance



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

Findings:

PTPN III’s estates have Work Instruction No. IK-3.01-17/14 for Oil Palm Pest Management stating that census must be conducted monthly for pests prior to chemical treatment to identify areas where chemical treatment will be applied. There is evidence of census records maintained in the estates. For example Division 1 of Rantau Prapat Estate maintains census records of nettle caterpillar and records that no attacks have been done by this pest in 2011. Census records of nettle caterpillar, rat and rhinoceros beetle have been sighted in Division 6 of Aek Nabara Selatan Estate for September, October and November periods. Census records of nettle caterpillar and bagworm attack in Merbau Selatan Estate Division 2 have been sighted. Census for all pests including ganoderma infection have been made in Bandar Selamat Estate Division 3. These records in general show a small level of or no pest outbreak in 2011 in all estates.

The estates only apply chemicals for pests when attack evidence is found. For example, according to Bandar Selamat Estate census records, spraying of Decis (for treatment against nettle caterpillars) was done over 74.29 ha of year 2000’s planting in Division 1, where the dosage applied was 37 litres, making it 498 litre/ha. Census record from Division 1 shows indication of pest attack, with number of caterpillar of averagely 2.5 per frond. Where there is no evidence of pest attacks, there is no pesticide application.

Records are available on integrated pest management training delivered on 21 September 2011 to 13 workers in Rantau Prapat Estate, and on 26 September 2011 for 8 workers in Bandar Selamat Estate.

Chemical use data is also recorded in active ingredient use per ha, e.g. from Division 6’s data in Aek Nabara Selatan Estate where 3.5 litres of chemical Gempur 490SL (containing Glyphosate 356g/l) was applied to 354.05 ha in October, and active ingredient per ha was 3.51(litres). Compliance status: Full Compliance Criterion 4.6: Agrochemicals are used in a way that does not endanger health or the environment. There is no prophylactic use of pesticides, except in specific situations identified in national Best Practice guidelines. Where agrochemicals are used t hat are categorised as World Health Organisation Type 1A or 1B, or are listed by the Stockholm or Ro tterdam Conventions, growers are actively seeking to identify alternatives, and this is documented.

Findings:

Merbau Estate used chemicals registered and permitted, i.e.: Herbicides such as Sida Up 490 SL, Gempur 480SL; and Insecticides such as Matador 25 EC, Decis, Fungicides such as NOBB, Bayleton, Trico SP, etc. (mainly used for rubber). Records of pesticide applied (including active ingredients used, area treated, application per ha and applications number) are maintained at estate division offices, e.g. Herbicides Toxicity Calculation record has been sighted on usage of Sida Up and Gempur at Division 2 of Merbau Selatan Estate.

Chemicals are stored in a secure storehouse with appropriate ventilation. Merbau Selatan Estate has records of trainings delivered to sprayers and manurers, regarding proper use of chemicals and safety in November 2011.

Used chemical containers in Merbau Selatan and Aek Nabara Selatan Estates are kept in a secure storehouse and collected by third-party (subcontractors). However, it could not be verified whether the subcontractors are licenced for collection of these types of wastes, as the estate do not maintain copy of their licences. Waste material from agrochemicals including pesticides containers are not disposed or sent to authorised collector or Hazardous waste processor; but rather, currently the company treats agrochemical containers as normal solid waste. This has been raised as non-compliance NCR No. 2011-10 of 22 .

Based on interview with contract spraying workers in Merbau Selatan and Bandar Selamat Estates as well as contract manuring workers in Aek Nabara Selatan Estate, they have not undergone any medical checks, and the estates do not check to have contractors run medical checks for their workers. This has been raised as non-compliance NCR No. 2011- 08 of 22 .

Based on interviews with female chemical sprayers in Merbau Selatan Estate, they have been informed that pregnant or breastfeeding sprayers are not allowed to perform spraying, although none of the sprayers were pregnant or breastfed their babies. No procedure or mechanism has been established to ensure that these pesticide-applying workers are actually not pregnant nor breastfeed their babies, even for the company’s sub-contracted workers. The company simply only believes their verbal information, instead of check-up result. This, therefore, has been raised as non-compliance NCR No. 2011- 09 of 22 . Merbau Selatan Estate has records of



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delivering training to its workers on 20 October 2011 informing them regarding this. Compliance status: Non-Compliance NCR No. 2011- 08 of 22 No records are available covering result of health check-up for agrochemical-applying workers such as spraying worker, even for sub-contractor workers NCR No. 2011-09 of 22 No mechanism has been established to ensure that no pesticide works for pregnant and breastfeeding women. This must apply even to sub-contractor workers NCR No. 2011-10 of 22

Waste materials from agrochemical, including pesticides containers, are not disposed or sent to authorised collector or to hazardous waste processor. Currently the company treats agrochemical containers as normal solid waste. Criterion 4.7: An occupational health and safety pl an is documented, effectively communicated and implemented.

Findings:

All estates have documented occupational safety and health (OSH) policy. Example for this fact is Rantau Prapat’s OSH policy dated 1 February 2011; and Bandar Selamat Estate’s OSH policy dated 16 February 2011. The OSH policy includes documented objectives and targets, i.e. comply with the company’s OSH procedures, committed to wearing of Personal Protective Equipment (PPE) at work sites, and manage potential work risks at the site. As sighted from Rantau Prapat Estate documents, the estate’s OSH team organisational structure has been approved by the Head of Social, Manpower and Transmigration Office of Labuhan Batu District by virtue of Decree No. KEP.246/P2K3/DSTKT-4/2011 dated 15 April 2011. As for Bandar Selamat Estate, its OSH team organisational structure has been approved by the Head of Social, Manpower and Transmigration Office of Asahan District through Decree No. KEP.0572/IV-DTK/2011 dated 21 February 2011.

All estates provides National Employee Social Security (Jamsostek) to permanent employees, as sighted from sampled payslips of 3 harvesters of Rantau Prapat Estate, as verified with interview. According to the company’s Work Instruction for Jamsostek Participants and Fees, the amount paid by the company for Jamsostek contribution is 4.2.4% of the employees' basic salary, while another 2% payment is made through regular deduction of their basic salary. This has been verified to be paid correctly. As for contract workers, Rantau Prapat Estate deducts the amount required for their insurance against payment to the respective contractors, and pays this insurance amount directly to the relevant authority to ensure that all contract workers are covered with insurance. However, other estates such as in Aek Nabara Estate are different. No information available to indicate that sub-contractors provide accident insurance for their workers, hence non-compliance NCR No. 2011-11 of 22 .

The estates have records of annual medical check-up provided by Ministry of Manpower and Transmigration on rotational basis for permanent workers performing high-risk works, e.g. chemical storehouse operators, sprayers, weeding, generator operators, and harvesters. The last medical check-up report for Rantau Prapat is dated November 2010, while for Bandar Selamat Estate dated May 2010. Both are available and records have been prepared on recent check-up performed on 10 November 2011 (report was pending during audit). Medical check-up reports include audiometric tests, spyrometry test, blood cholinesterase levels and vision (in Bandar Selamat Estate, some workers also underwent urine and faeces check). Workers at Rantau Prapat identified having health problems were resent for medical check-up at Aek Nabara hospital on 8 & 10 February 2011. The hospital produced recommendation letters for six workers found with high cholinesterase levels, stating that these workers should not do insecticide spraying work for at least one month. However, no evidence has been obtained indicating that the company has followed up the hospital recommendation to temporarily transfer these workers to carry out other works. This, therefore, has been raised as non-compliance. There are 29 workers in Bandar Selamat Estate identified having health problems, who were also resent for medical check-up at Mambang Muda hospital. The hospital issued result dated 3 October 2011 stating that all workers were found to be healthy. All permanent workers interviewed stated that they have undergone medical checks, and based on review of Bandar Selamat Estate’s medical examination records, such medical check-up records were available for three interviewed harvesters, not for another four. Medical check-up for these workers may have been done in previous years, but it remains unclear what the company’s method is to ensure that all permanent workers has undergone medical check-up on regular basis as well as the defined minimum period between medical check-ups. As the company did not classify harvesting as high-risk work that requires regular medical check-ups, this has been raised as observation.



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However, based on interviews with contract spraying workers in Merbau Selatan and Bandar Selamat Estates and others in Aek Nabara Selatan Estate, they have not undergone any medical check-up, while the estates have not checked to ensure that contractors conduct medical check-up for their workers. This was raised as non-compliance under CR4.6.

Rantau Prapat Estate has identified and documented Occupational Health and Safety (OHS) risks for all estate activities, although this was documented under its 2011 environmental aspects and impacts register. This was noted as an observation. Bandar Selamat Estate has Hazard Identification, Risk Assessment and Risk Control document for 2011, dated 21 March 2011 for all estate activities including spraying, manuring, harvesting, workshop activities, generator, truck transportation, chemical and material storage, and waste handling.

The company has an emergency response procedure documented under Work Instruction No. IK-3.12-01/10, including identification of potential emergency situations (fire, accidents, flood, explosion, and chemical leakage) and a flowchart for Handling Fire Emergencies. Rantau Prapat Estate has records of emergency response training and simulation on 8 July 2011 for over 70 workers, as well as land burning simulation on 7 February 2011 for 41 estate division staffs. It was confirmed through interviews with three harvesters that they had attended the emergency response training. Notes of the training results are maintained, including the steps of the accident & emergency response procedure. Records of other OSH training, i.e. for first aid and management of hazardous waste, are available as described under CR4.8. Fire emergency training for Aek Nabara Estate was conducted on 14 February 2011 for 46 staffs. Training on emergency response procedure for fire was conducted in September 2011 for 33 workers at Bandar Selamat Estate.

During site visits, field executor (supervisor) in Rantau Prapat, Merbau Selatan and Bandar Selamat Estates were found having brought first aid kits to the field, and those are located at other locations such as estate office, workshops, chemical storehouse, etc. It was observed that the first aid kit at Division 2 of Merbau Selatan Estate office lacked of scissors and the iodine had already expired in June 2011. This has been raised as observation. However, at Aek Nabara Selatan Division 3, harvester and manurer foreman did not have any first aid kit. The estate took immediate corrective action and provided first aid kits to the supervisor and FFB transporter drivers who did not have them. However, this was still raised as non-compliance NCR No. 2011-12 of 22 .

Evidence of OHS (e.g. PPE provided to workers) has been found. However, there are aspects must be improved. Harvesters in Rantau Prapat Estate are provided with helmets, boots and goggles. Contract field-maintenance workers are required to wear boots, which they purchase themselves. Female contract spraying/manual maintenance workers interviewed in Merbau Selatan Estate are provided with Personal Protective Equipment (PPE) by the company, including masks, gloves, and plastic aprons. However, the sprayers are provided with cloth gloves not appropriate for spraying activity. While they wash their PPE at washing facilities at the division office, they bring their PPE to store at home, which poses a risk of contamination to their families. This has been raised as non-compliance, as sprayers said that they suffered from skin itchiness, which is an indication of chemical poisoning. At Bandar Selamat Estate, contract spraying workers are provided with rubber gloves, goggles, masks and plastic aprons by their contractor but the plastic aprons only partially cover their clothes. PPE washing and storage facilities are provided for the sprayers. It has also been noted as observation that the contracted spraying workers in Merbau Selatan and Aek Nabara Selatan Estates were not aware that they can get medication or treatment for minor illnesses from the estate clinic, although this is allowed by the estate management and this medication is to be paid for by the contractor. As a matter of fact, they currently pay for their own medication.

Based on interviews with harvesters at Rantau Prapat Estate, there was a worker whose part of his stomach was injured cut by his harvesting pole. The estate’s report of this accident occurring on 3 August 2011 is available and the company has documented preventive actions and followed up by requesting their Human Resources Department (HRD) to apply for insurance payment for the worker which is still in progress. Compliance status: Non-Compliance NCR No. 2011-11 of 22 No information available indicating that sub-contractors provide accident insurance to their workers. NCR No. 2011-12 of 22

No first aid kit is available in places required onsite, such as at FFB transporters and ‘Field Supervisor’.. Criterion 4.8: All staff, workers, smallholders and contractors are appropriately trained.

Findings:

Rantau Prapat Estate has a documented 2011 training plan, including training plan for OSH hazard and risk



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identification, workplace safety inspections, first aid training, hazardous waste management, and emergency response training. The estate has documented worker identification that requires training. For example in February 2010, six workers were identified needing hazardous waste management training and 9 others were identified needing first aid training, including 7 harvesting foremen. The estate has carried out the relevant training for all identified workers on 8 July 2010 and maintained training participant record. Bandar Selamat Estate training programme in 2011 has also been observed, including harvesting, fire emergency and pest management trainings.

The company’s estates maintain records of trainings delivered by contractors to their workers. For example, in Rantau Prapat Estate manuring training was delivered on 20 September 2011 to 12 manurers, PPE use training on 26-27 September 2011 to 24 workers, integrated pest management training on 21 September 2011 to 13 workers, and harvesting procedures training on 28 September to 14 workers. In Bandar Selamat Estate, fire emergency training was delivered on 26 September 2011 to 33 workers, harvesting training on 3 October 2011 to 41 harvesters, and pest management training on 26 September 2011 to 8 workers. The estate also carries out evaluation of workers understanding on the trainings provided.

Bandar Selamat Estate holds records of competency certificates for several contractors, i.e. contractors for building construction and road maintenance. Selection of contractors providing spraying workers is done by PTPN III head office. Certificates of competency from North Sumatera Chamber of Commerce & Industry for two contractors providing spraying workers to Bandar Selamat Estate have been sighted and referred to as evidence that selected contractors are eligible for executing this work. Compliance status: Full Compliance. Criterion 5.1: Aspects of plantation and mill manag ement, including replanting, that have environmenta l impacts are identified, and plans to mitigate the n egative impacts and promote the positive ones are made, implemented and monitored, to demonstrate con tinuous improvement.

Findings:

All estates have Environmental Impact Assessment (AMDAL) documents. For example those sighted in Rantau Prapat, Merbau Selatan and Bandar Selamat Estates. Their revised versions of Environmental Management/Monitoring Plan (RPL/RKL) prepared by the Research Institute of North Sumatera University (USU) have been approved by the Environmental Department Head. The original AMDAL documents of both estates are Environmental Evaluation Assessment (SEL) and original RPL/RKL documents prepared in 1993. The RPL/RKL documents have been revised in 2009 for all estates due to changes in plantation operation, e.g. change in the estates’ HGU concession resulted in changes in estate capacity and design.

All estates have prepared RPL/RKL implementation report once semi-annually to comply with legal requirements. For example, Merbau Estate report in July 2011 includes reports on air quality, emissions from generator, groundwater and soil quality, and noise. In Bandar Selamat Estate, such report includes result of analysis of the same parameters, as well as of odour levels, and amount of hazardous waste produced. This is reported semi-annually, while some parameters to be reported annually have been sighted in the estate’s December 2010 report, e.g. analysis of employment opportunities, local community perception and CSR activities. The analysis results indicate no excess towards legally permitted standards in both estates. Compliance status: Full Compliance.

Criterion 5.2: The status of rare, threatened or en dangered species (ERTs) and high conservation value habitats, if any, that exist in the plantatio n or that could be affected by plantation or mill management, shall be identified and their conservat ion taken into account in management plans and operations.

Findings:

Identification of protected, rare and endangered flora and fauna species including their habitat and High Conservation Value Area (HCVA) in PTPN III estates (among others Aek Nabara Selatan (including Aek Nabara Selatan Mill), Rantau Prapat, Labuhan Haji, Mambang Muda, Merbau Selatan, Sei Dadap and Bandar Selamat Estates) was conducted by Centre for Research and Community Service - Bogor Agriculture University (IPB). The assessment was conducted in 2010 and integrated with assessment of PTPN III’s other plantations in North Sumatera Province. Following are result of this assessment.

• Aek Nabara Selatan Estate: riparian area in Division I – IV, VI, VII and IX (HCV types: HCV 1.1, 1.3, 1.4, 2.3,



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and 4.1) with total area of 35.11 ha; reservoir ‘O’ in Division III (HCV types: HCV 1.1, 1.3, 1.4, 2.3, and 4.1) with total areas of 3.76 ha; giant Pulai tree (Alstonia scholaris) in Division V and giant Banyan tree (Ficus benjamina) in Division VII (HCV type: HCV 6) totalling to 0.20 ha; and Bukit Manuk in Division VIII (HCV type: HCV 4.2) with total area of 59.33 ha.

• Rantau Prapat Estate: riparian area (Old Purba River) in Division I-III (HCV types: HCV 1.1, 1.3, 1.4, 2.3, and 4.1) with total area 93.68 ha.

• Bandar Selamat Estate: riparian area (Sampainiat and Mandian Rivers) in Division I, IV, V, and VI (HCV types: HCV 1.1, 1.3, 2.3, and 4.1) covering total area of 9.39 ha; Batu Babi spring/water source in Division III (HCV types: 1.1, 1.3, 2.3, and 4.1) with total area of 12.56 ha; Lombu spring/water source in Division II (type of HCV: HCV 1.1, 1.3, 2.3, and 4.1) with total area of 12.56 ha, and slope 1 & 2 in Division V & VI (HCV type: HCV 4.2) with total area of 145.32 ha.

• Merbau Selatan Estate: riparian area (Melano River) (HCV type: 1.1, 1.3, 1.4, and 4.1) with total area of 55.84 ha.

• Labuhan Haji Estate: swamp/[lowly] area (HCV type: HCV 1.1, 1.3, 1.4, 2.3, and 4.1) in Division I with total area of 6.49 ha. Several fauna species found are, among others, Cekakak Belukar bird (Halcyon smymensis), Madu Sriganti bird (Nectarinia jugularis), Crested Serpent Eagle (Spilornis cheela), and long tail macaque.

PTPN III’s riparian areas are significant to biodiversity as they support rehabilitation of conservation area. Several protected bird species were found, such as Black Eagle and other unprotected bird species. Another wildlife survey in seven estates area was performed in conjunction with preparation of the company’s bi-annual environmental monitoring report; hence the wildlife assessment result can be seen in the company’s RKL & RPL report for the second half of 2011.

At least 12 rare species of plants were also identified within the seven estates’ working areas, especially Ficus sp. The tree species grows in PTPN III’s forested areas which generally consist of secondary forests and also are under the local community’s traditional rights, so that the company enclaves these areas for conservation purpose.

Management and monitoring programme for locations having been identified as HCVAs has been made for each of identified HCVA, except for planning to protect area with slope > 40% in Afdeling IV Bandar Selamat Estate, this was raised as non-compliance on NCR No. 2011-14 of 22 . Measures taken for protecting species and their habitats were defined for identified HCVA and steps for implementation was reported in the company’s HCV Monitoring report dated 10 November 2011 as found in Bandar Selamat Estate, 15 September 2011 found in Aek Nabara Selatan, 25 September 2011 in Merbau Selatan Estate etc. However, measures have not been taken to protect species of fauna / flora as well as habitats categorised as rare/endanger/protected that were found in some remaining forest areas 7 estates. The company’s management plan should be improved to include further details on the company’s plan to protect these additional HCVAs. In Aek Nabara Selatan Estate, there is no evidence of the implementation of HCV management plan for riparian because activity only in water reservoir ’O’ area. This was raised as non-compliance NCR No. 2011-15 of 22 .

As found through interviews with some harvesters at Bandar Selamat Estate and female sprayers at Labuhan Haji Estate, it was informed that management prohibits hunting of animals, while fishing is allowed but not using poison. Posters and sign boards prohibiting hunting of animals and fishing using poison are available and located at strategic locations, such as river boundary and defined HCVAs.

Each estate has appointed several personnel responsible for conducting HCV monitoring activities. However, these personnel are not trained in HCV monitoring, especially in implementing all recommendation from HCV consultant. Thereby, this has been raised as non-compliance NCR No. 2011-13 of 22 .

During site visit to housing areas of Rantau Prapat Estate (Division 1) and Merbau Selatan Estate (Division 2) it was found that at least two worker families keep long-tailed macaques as pets. As these animals are not endangered species, this has been raised as observation. Compliance status: Non-Compliance NCR No. 2011-13 of 22 Those assigned to perform HCV monitoring have not been provided with appropriate training for his job to enable them to monitor any plans and activities recommended by HCV consultant NCR No. 2011-14 of 22

No appropriate action plan has been established to protect area with slope of 40% in Afdeling IV of Bandar Selamat Estate.



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NCR No. 2011-15 of 22 No evidence has been found indicating HCV management plan implementation such as HCV 4.2-identified river riparian area in KANAS Estate. The company’s current activities are performed only in water reservoir area, namely the ‘O’ area Criterion 5.3: Waste is reduced, recycled, re-used and disposed of in an environmentally and socially responsible manner

Findings:

All estates and mills have identified all sources of wastes from estate and mill activities including spraying, manuring, storehouse, pest management, etc. in their 2011 Environmental Aspects and Impacts Identification. In several locations such as Division 2 office of Merbau Selatan Estate, evidence has been sighted of separation between organic and non-organic wastes. Merbau Selatan Estate has record dated 8 March 2011 on waste sold to a contractor (CV Delima Ayu) including used fertiliser bags, rice bags, used rubber tapping cups, metal, chemical containers, vehicle spare parts and used polybags. Aek Nabara Selatan Estate also has similar records on solid waste collection by a contractor, namely CV Makmur Jaya Lestari, on 5 May 2011. However, it cannot be verified whether the contractors has licence for collecting these types of waste, as the estate do not maintain copy of such licence. This was raised as non-compliance under CR4.6. Aek Nabara Selatan Mill has planned and implemented waste management as noted from Working Instruction such as Working Instruction for Monitoring and Use of Solid Waste (IK-3.12.01/14 rev.03 dated 15 February 2010), Working Instruction for Handling and Use of Hazardous Waste (IK-3.12.01/08 rev.03 dated 15 February 2010) and Working Instruction for Mill Liquid Waste Management (IK-3.03-14/01 rev.02 dated 15 February 2010). The mill has implemented waste management such as use of POME (liquid waste) for Land Application (LA) areas, EFB (solid waste) as organic fertiliser, other solid wastes (non-EFB) and hazardous waste submitted to licenced third party.

However, there is evidence of inappropriate domestic waste management as seen from housing located in Division 1 of Rantau Prapat Estate whose domestic waste is disposed of through open sloped area behind the houses. This is located near to the groundwater well used for consumption. The estate took immediate action to clean the area and prepare holes in the ground to store their domestic wastes, as evidenced with photographs. This has been raised as observation where the estate must ensure that appropriate locations are available for domestic waste disposal. At housing of Merbau Selatan and Aek Nabara Selatan Estates, waste is disposed of to holes in the ground behind the houses. According to interviews with workers in Rantau Prapat, Merbau Selatan and Aek Nabara Selatan Estates, they burn the waste. This has been raised as non-compliance under CR5.5.

Aek Nabara Selatan Mill is appropriately licenced to temporarily store hazardous waste (Head of Labuhan Batu District Decree No. 503.660/205/BLH-LB/WAS/2011 dated 21 August 2011), where several types of hazardous waste (such as used oil and used batteries) were collected by licenced third party (CV Amindy Barokah holding licence from Ministry of Environmental No. 33/2011).

Merbau Selatan Estate holds a valid licence to temporarily store hazardous waste. This licence is dated 28 October 2011, valid for 3 years and allows storing hazardous waste for maximum 180 days. Hazardous waste at the storage facility includes used oil, vehicle spare parts, used printer cartridges, and used light bulbs, while inventory of all types of chemicals is maintained. Prior to the storage licence, hazardous waste was sent to Rantau Prapat Estate or collected by a contractor, i.e. 21 litres of used oil sent on 1 February 2011, and 83 litres of used oil and 6 used batteries collected by the contractor (PT Binasamsurya Mandala Putra) on 26 January 2011. Agrochemical containers are collected by another contractor, i.e. CV Delima Ayu. Aek Nabara Selatan Estate has a temporary storage facility for hazardous waste, including used oil, filter, used battery, printer cartridge, etc. Inventory of these types of waste is maintained by estate staff and the records are available at the estate. This waste will be send to Aek Nabara Selatan Mill for final collection by contractor. However, records show that the last date of sending to the mill was on 4 May 2011, which means that the waste has been stored for over 180 days, although the estate took immediate action to send the waste to the mill on 19 December 2011, hence this was raised as an observation. Aek Nabara Selatan Estate also maintains records of monthly solid waste, as sighted from November 2011 record which includes amount of stored waste such as used fertiliser bags, papers, spare parts, used chemical containers, used spraying equipment, used polybags, etc. It was found that waste materials from agrochemical, including pesticides containers, are not disposed or sent to authorised collector or to hazardous waste processor. Currently the company treats agrochemical containers as normal solid waste. This is raised as NCR No. 2011-10 of 22 under CR4.6

Aek Nabara Selatan Mill has records of waste monitoring/analysis, such as monthly report for hazardous waste



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and waste balance (include manifest), solid waste and solid waste (monitoring of POME to land application areas).

Compliance status : Compliance with observations Criterion 5.4: Efficiency of energy use and use of renewable energy is maximised.

Findings:

Aek Nabara Selatan Mill uses oil palm shell and fibre as a source of renewable energy to fuel its boiler. Boiler produces heat and serves as an energy source to operate mill machinery. The mill maintains records of calculations of renewable energy produced from shell and fibre. Monitoring report mentions that total energy used from shell and fibre in 2011 is 133,208 Kwh. This is generated from 245,181.615 FFB produced. Based on efficiency analysis, such energy generation was 71.29 % more efficient than those from diesel. According to calorific value calculation to date, in Aek Nabara Selatan Mill 1 kg of fibre generates 2,305.87 kcal, while calorific value from 1 kg of shell 3,475.36 kcal.

All estates maintain reports of monthly diesel use. Aek Nabara Mill also maintains records of fossil fuel use for analysis. From the records, average fossil fuel use in 2011 is 685 litre per month. The fossil fuel used here is diesel which is used for starting up the mill’s machinery for maintenance activities. The mill maintains calculation of estimated cost of the fossil fuel purchase and estimated price of the renewable energy consumed. The mill’s data also shows that the renewable energy use is estimated to constitute approximately 71.29% of the mill’s total energy use, being part of efforts to maximise use of renewable energy as opposed to the fossil one. Compliance status: Full Compliance

Criterion 5.5: Use of fire for waste disposal and f or preparing land for replanting is avoided, except in specific situations, as identified in the ASEAN gui delines or other regional best practice.

Findings:

The company has no zero burning policy. However, it is stated in the company’s Work Instruction No. IK-3.01-14.01 on Land Preparation for Planting that fire is not to be used during replanting. Evidence is found indicating implementation of this work instruction. For example, in Bandar Selamat Estate, contract was sighted engaging contractor appointed for land preparation for planting in 2008 where activities listed in the contract does not include burning activities. However, visit to Aek Nabara Estate’s replanting area, e.g. to block P.30 of Afdeling V, found inconsistence in implementation of the zero burning policy. The estate was found to have used fire for land clearing process without properly documented assessment as raison d’etre to use of fire. The company even obtained permit from Labuhan Batu District Government as per Decree No. 522.525/525/622/BUN/2011 dated 28 April 2011. While the permit states that burning should only be performed on the remaining roots and stumps, it was found that in practice fire was also used including to the stem of felled palm trees. This has been raised as non-compliance NCR No. 2011- 16 of 22.

Based on interviews with several workers in Rantau Prapat and Merbau Selatan Estates as well as visit to all estates’ housing, they burn domestic wastes. While evidence of waste burning has not been sighted in Bandar Selamat Estate, interviewed workers stated that they sometimes carried out waste burning.

The company has an emergency response procedure documented under Work Instruction No. IK-3.12-01/10 rev.01 (dated 7 January 2005), including identification of any potential emergency situations (fire, accidents, flood, explosion, and chemical leakage) and flowchart for handling fire-emergencies. Training on emergency response procedure against fire was delivered in September 2011 to 33 workers in Bandar Selamat Estate. In Aek Nabara Selatan Mill, simulation was conducted on emergency response on 25 February 2011.

Fire-extinguishing facility and fire-fighting equipment have been sighted in Aek Nabara Selatan Estate, e.g. at Division 6 office, workshop, main office, temporary chemical storage facility, etc. However, there is no fire-extinguishing facility available at worker housing, especially the wooden houses. This has been raised as observation. The estate has only one mobile tank for its whole area, and during audit it was not filled with water, and the farthest division is about one hour’s drive away, making it unfeasible to the main office water tank to reach this location on time in case of emergency. This has been noted as an observation.

Fire prevention facility and infrastructure are available in Aek Nabara Selatan Mill, such as fire extinguisher (41 units), hydrant (8 units), hoe (10 units), spade (10 units), plastic bucket (5 units), sandbox (1 unit), drum sides (6 units), crowbars (3 units), manila rope (1 unit), etc.



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Compliance status: Non-Compliance NCR No. 2011- 16 of 22

No proper documented assessment was carried out for KANAS Estate’s use of fire for 2011 land clearing.. Criterion 5.6: Plans to reduce pollution and emissi ons, including greenhouse gases, are developed, implemented and monitored.

Findings:

All estates and mills have identified all sources of waste from their activities, including spraying, manuring, warehouse, pest management etc. when making Identification of Environmental Aspects and Impacts 2011. Plans have been established to mitigate several pollution-creating activities, especially those regulated under AMDAL or RKL and RPL documents. However there has been no mention made as to reducing of Greenhouse Gas emission from vehicle, POME and other sources, both from the estates and mill production activities. This has been raised as non-compliance NCR No. 2011-17 of 22 .

There are several observations where management of the estates’ pollution sources can actually be improved. For example, sprayer PPE and washing facilities in Division 2 of Merbau Selatan Estate, where the used water is dumped at the soil next to the water container (instead of into drain). It has also been observed that there are signs of significant spills found on the oil storehouse floor next to the estate generator, and the bunding surrounding the store is broken.

POME is managed and treated at the mill’s effluent treatment plant which consists of fat pit, mixing pond, anaerobic ponds, aerobic ponds, and facultative ponds. The mill’s procedure for POME management and treatment follows SOP No. IK-3.03-14/01 rev. 02 (dated 15 February 2010) on Use of POME for Application to Oil Palm Estates’, stating that daily reports of land application data must be prepared, including debit, pH, location of the land application and pumped POME pond, and that sampling to gain information on quality of the soil to where the application is carried out must be conducted annually. Furthermore, POME samples from the sampling (monitoring well) must be analysed biannually. The mill maintains daily records of pH, BOD, debit and temperature of POME samples. Compliance status : Non-Compliance NCR No. 2011-17 of 22 No records are available covering monitoring of pollution and emission from vehicles, POME and other sources. Criterion 6.1: Aspects of plantation and mill manag ement including replanting that have social impacts are identified in a participatory way, and plans to mitigate the negative impacts and promote the positive ones are made, implemented and monitor ed, to demonstrate continuous improvement.

Findings :

A Government-approved AMDAL document is available, along with an independent Social Impact Assessment (SIA) dated December 2010 conducted by North Sumatera University Research Centre. All stakeholders including the local community were involved in the process of participatory social impact assessment, save for PTPN III’s workers. Both positive and negative social impacts from mill and estate activities to company stakeholders were identified, those to the company’s and sub-contractor workers. The assessment only focuses on [the communities surrounding the company’s estate area]. This has been raised as non-compliance NCR No. 2011-18 of 22.

Action plan for social impact monitoring and management has been established at time of audit as one seen in Aek Nabara Selatan and Bandar Selamat Estates, as well as Aek Nabara Selatan Mill. However, the monitoring and management plan was established without participation from relevant stakeholders, especially the surrounding community, except Mambang Muda Estate’s social impact management and monitoring plan having already been prepared in participatory manner with relevant stakeholders including the surrounding community. This has been raised as non-compliance NCR No. 2011-19 of 22 .

Regular and scheduled environmental management and monitoring reports have been prepared. Examples for this are monitoring reports for RKL and RPL management plan implementation (1st semester of 2011) in Aek Nabara Selatan Mill, Mambang Muda Estate and Aek Nabara Selatan Estate.

No revisions have been made to the company’s AMDAL that encompasses SIA due to no changes in the estate



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and mill operation. There is no need to revise the social impacts identified in the AMDAL.

A change has been made to the company’s Environmental Management/Monitoring Plan documents (RKL/RPL) in Aek Nabara Selatan Estate due to separation between Aek Nabara Selatan and Aek Nabara Utara Estates (which is not included in the certification scope). In the company’ SIA document, it has already identified impacts of outgrower schemes and is giving attention to the identified impacts. Compliance status: Non-Compliance NCR No. 2011-18 of 22

Social Impact Assessment (SIA) does not cover social impact to the company’s and sub-contractor employees. Furthermore, no evidence has been found indicating that the company’s employees participated during the assessment process. The assessment only focuses on the surrounding community.. NCR No. 2011-19 of 22

No evidence has been found indicating that social impact monitoring plan has been established through participatory process engaging the company’s stakeholders. Criterion 6.2: There are open and transparent metho ds for communication and consultation between growers and/or mi llers, local communities and other affected or inte rested parties.

Findings:

The company has open and transparent methods for communication and consultation between growers and/or millers, the local community and other affected or relevant stakeholders. The company has a documented SOP No. IK-3.00-13/01 for Communication and Consultation with Stakeholders, issued on 15 February 2010. It also has records of communication and consultation meetings with the local community, such as records of Teluk Panji community’s aspiration dated 21 September 2011. In the meetings, the company informed the community of the company’s procedure for making requests and the company’s response about any information needed, conflict and claim resolution mechanism, and traditional rights management. The company and the local community also established an agreement to make a joint-communication forum between estate/mill management and village community (stakeholders).

All estates have lists of relevant stakeholders which are divided into 2 categories, i.e. internal and external stakeholders. The former consists of employees, management, board of directors and shareholders, while the latter of suppliers, customers, competitors, local community, government, journalist, investors, NGO and other relevant parties. The company’s administration offices in each estate are responsible for updating the stakeholders list.

The company maintains documented records of complaints and inputs from stakeholders at the estate and mill offices. The company’s responses are documented as well.

A dedicated person responsible for consulting and communicating with local community is assigned. The company has a list of staffs responsible for this responsibility such as public speaking and community relations, land acquisition and tenures, and community development/corporate social responsibility i.e. Head of Estate Administration and Personnel (APK). Compliance status: Full Compliance. Criterion 6.3: There is a mutually agreed and docum ented system for dealing with complaints and grievances, which is implemented and accepted by al l parties.

Findings:

The company has an open system for communication and consultation with local community as represented by Work Instruction No. IK-3.09-03/0 (6th revision) dated 15 February 2010. This SOP development process was initiated by the company, but it remains non-published to stakeholders. PTPN III corporate also has call centre 3030 as an open system to receive complaints and grievances from its stakeholders, which is openly announced in the front of estate or mill offices. The call centre is centralised in Medan head office and checked daily by corporate public relationship. Any incoming complaint or request of information from stakeholders through call centre will be forwarded to relevant sections for follow-up. During main assessment this call centre was still newly established; no incoming request of information received yet. This makes it difficult to ensure effectiveness of the mechanism. There currently have been no incoming complaints regarding the company’s



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operation.

No procedures are available for identifying and calculating compensation for loss of legal and traditional rights through engagement of the local community and relevant institutions as the plantation have preceded the surrounding community settlement. However, to anticipate future compensation case due to several potential demands for compensation as informed by communities, the company is required to establish the procedure. This has been raised as non-compliance NCR No. 2011-20 of 22 . Compliance status: Non-Compliance NCR No. 2011-20 of 22

No procedures have been established engaging the local community and relevant institutions to identify and calculate compensation for loss of legal and traditional rights.

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

Findings:

No estates have established mechanism for identification, calculation and compensation of loss of legal or traditional rights of land, which is acceptable to all parties. However, the company has initiated establishing procedure for land release through Work Instruction No. IK-3.09-03/01 (4th revision), issued on 15 February 2010.

To date there have been no cases of dispute with any parties that require compensation from each estate manager. Compliance status: Full Compliance

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

Findings:

The company maintains documentation of their employees’ pay and wages which are already in compliance with the minimum wages defined under both local and national government regulations. As to the minimum wage rate, the company complies with the regional minimum wage as per North Sumatera Governor Decree Year 2011 stating that the regional minimum wage rate for estate workers in North Sumatera shall be IDR 1,035,500 per month (25 workdays) or equal to IDR 41,420 per day (7 hours). Minimum wage rate for PTPN III employees complies with applicable national regulation, namely Government Regulation No. 8/1981 on Wage Rate Protection and Minister of Manpower Regulation No. PER-01/MEN/1999 on Minimum Wage Rate.

Staff and workers receive salary payment receipts (monthly pay slips) in a timely manner. Management staffs are paid through bank transfer, while workers are paid in cash. Evidence having been seen is November 2011 payment slip for level 1A worker in Aek Nabara Selatan Estate and Bandar Selamat Estate. In November 2011 the workers receive basic salary of IDR 1,602,764

The company has documented working agreements called Joint Employment Contract (‘Perjanjian Kerja Bersama’ or PKB) that has been approved by North Sumatera Social, Manpower and Transmigration Office. The company provides adequate housing, medical, education and other facilities to its employees free of charge, including access to clean water and electricity 24 hours the for housing.

Aek Nabara Hospital is located close to Aek Nabara Selatan Estate and Mill, while other estates such as Mambang Muda have their own hospital Policlinic is available for estate with no hospital in case of medical emergency whose service is free of charge to all workers and their family. Mosques and churches are also available within the estate area.

Each estate has documented agreements with contractors providing that they are subject to applicable local labour laws. PTPN III requires all contractors to comply with all government regulations relating to workers, health and safety, RSPO Principles and Criteria, labour laws, and zero-burning policy. This has been viewed in contract between Bandar Selamat Estate and their contractors such as CV Wira Andalan Mandiri, CV Royal Indah, and CV Abrar Jaya for FFB transportation. However the company must ensure that implementation of the estate-contractor working agreements are consistently implemented, especially for wage rate that applies to



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contractor’s workers, as potential for improvement estate should provide mechanism to control this case. Compliance status: Full Compliance Criterion 6.6: The employer respects the right of a ll personnel to form and join trade unions of their choice and to bargain collectively. Where the right to freedom of association and collective bargaining are restricted under law, the employer f acilitates parallel means of independent and free association and bargaining for all such personnel.

Findings:

The company has a documented policy on freedom of association for workers that is available in several locations signed by PTPN III Director. Statement of freedom of association for workers is also made in Article 5 of the company’s Joint Employment Contract (PKB) for period of 2010-2011 and 2012-2013. The policy was informed to all employees and workers through internal memorandum. There is a worker union in PTPN III, i.e. Plantation Labour Union (SPBUN).

Documented minutes of meeting with the labour union is available at SPBUN estate office. SPBUN holds meetings as required, especially to deal with labour issues. There is also Bipartite Cooperation Organisation (LKS Bipartit) between SPBUN and PTPN III Head Office Management. Compliance status: Full Compliance Criterion 6.7: Children are not employed or exploit ed. Work by children is acceptable on family farms, under adult supervision, and when not interfering w ith education programmes. Children are not exposed to hazardous working conditions.

Findings:

The company appropriately manages working age. For example, it has clear policy as stated in Article 18 of employment contract that minimum age requirement must be 18 years old and maximum 30 years old for employee recruitment process. Implementation this working age policy is in place and relevant evidences have been found, e.g. evidence that minimum age of employment is 21 years old in all estates and mills.

However, it has been observed in the field where a female worker (collecting loose fruits) brought her grandson of 5-6 years old to the field. According to her, workers usually do not bring their children to the field; it was the first time. However, Division 3 of Aek Nabara Selatan Estate does not have child care facility, and she usually has to pay for babysitter. She told that because there had been no babysitter available at that time, she brought the child to the field. Note should be taken by the estate manager due to potential hazard on the field that workers should not bring children to work. Compliance status: Compliance with observation. Criterion 6.8: Any form of discrimination based on race, caste, national origin, religion, disability, gender, sexual orientation, union membership, polit ical affiliation, or age, is prohibited.

Findings:

The company has a documented equal opportunities policy signed by PTPN III Director in November 2010. The policy was, however, informed only to employees and the surrounding community. No evidence of discrimination found. Following is evidences of equal opportunities for all workers:

• female workers constitute around 20% of all of the company’s workers; • female workers also have opportunities to have high positions such as supervisors; and • workers of all ethnicities and religions, including Muslim, Catholic and Christian, are provided with

respective places of worship such as mosques and churches.

No workers interviewed onsite complained about any forms of discrimination from estate or mill managements. Compliance status: Full Compliance Criterion 6.9: A policy to prevent sexual harassmen t and all other forms of violence against women and to protect their reproductive rights is develop ed and applied.

Findings:



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Policy has been developed to prevent sexual harassment and any other forms of violence against women and to protect their reproductive rights.

Dissemination of information on this policy has been done many times. For example, in Bandar Selamat Estate, training to raise awareness of sexual harassment prevention was delivered in 2009, June 2011, 29 October 2011. In Rantau Prapat Estate they were conducted in 8 November 2011 and 2 December 2011. This policy remain not changed during verification audit, in September 2013.

Workers interviewed in all estates, including contract workers, are aware of the sexual harassment policy. Both male and female workers interviewed in Rantau Prapat and Merbau Selatan Estates have been informed of the company’s sexual harassment policy, and no cases of sexual harassment were reported.

The company has a mechanism defined in each estate for grievances, violence against women and protection of reproductive rights, issued in June 2011. It has also established a gender committee as a more specific grievance mechanism for female workers. To date no case of grievance from female workers have been reported as informed by female workers. Compliance status: Full Compliance Criterion 6.10: Growers and mills deal fairly and t ransparently with smallholders and other local businesses.

Findings:

The company allows public access to current and past FFB prices. They are clearly made public through notification boards in front of Aek Nabara Selatan Mill’s security office and near weight bridge which display, among others, 15-16 December 2011 FFB price. They have been seen onsite.

FFB basic price is set by Indonesian FFB pricing authorities and then decided by commercial department in PTPN III Medan Head Office. Upon approval, Aek Nabar Selatan Mill announces the applicable FFB price to suppliers, followed by making purchase confirmation. The mill has contract with several FFB suppliers such as with UD Usaha Bersama (under Contract No. PANAS/SPJ/07/2011 dated 21 February 2011) and with Maysin (No. PANAS/SPJ/01/2011, dated 10 January 2011). Several evidences have been found indicating that all parties understand contracts they have entered into and that the contracts are fair, legal and transparent.

Payments to contractors are made one week as of the date of invoice receipt by Aek Nabara Selatan Mill according to contract, e.g. payment for UD Bersama on 12 December 2011 by Bank Transfer Slip. Compliance status: Full Compliance Criterion 6.11: Growers and millers contribute to l ocal sustainable development wherever appropriate.

Findings:

The company actively contributes to local community development programmes where each estate has allocation for such activities. For example, the company makes contributions to local development under following evidences: - the company has already met its tax liability, i.e. November 2011 surface water retribution period was paid on

5 December 2011; its income tax and Value Added Tax (VAT) compliance to Article 21 and 23 of Tax Law; - it carries out Community Development (CD) and Corporate Social Responsibility (CSR) activities in 2010-

2011 period; and - there are a number of documented CSR programme activities, such as road maintenance, donations to local

community (upon request), participation in construction of school in Aek Kanopan of Mambang Muda Estate.

According to discussion with leaders of the community neighbouring the company’s seven estates, the company also provides other services such as water supply, contribution to mosques, temples, school etc. The estates also contribute in kind (e.g. transport etc.) to the local community’s activities. Compliance status: Full Compliance

Principle 7: Responsible development of new plantin gs

Findings:



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This principle is not applicable to this assessment as all estate areas have been planted with oil palm since 1970’s. There are no new plantings. PTPN III is only involved in replanting programme after felling of old palms and has no plan for expansion. Compliance status: Full Compliance.

Criterion 8.1: Growers and millers regularly monito r and review their activities and develop and implement action plans that allow demonstrable cont inuous improvement in key operations.

Findings:

All estates have monitoring action plan (Environmental Monitoring/Management Plan - RKL/RPL) and prepare biannual reports to the local environmental department, which include parameter analysis result such as air and water quality, ambient noise, and generator emissions.

In addition, Rantau Prapat Estate has a documented environmental management programme for year 2011. However, the environmental management programme covers cleaning of spill at hazardous wastes temporary storage facility, including implementation progress report. In addition, the estate also plans to improve domestic waste management. It should also consider other aspects where environmental performance can be improved. Aek Nabara Selatan Estate also has a documented environmental management programme for year 2011 which includes programme to construct and renovate Division 1 and 6s’ fertiliser storage facilities. Evidence has been sighted as to implementation of this programme in the estate’s expenditure records for construction of storage facility. Merbau Selatan Estate has a set of documented environmental objectives and targets dated 7 June 2011, including planting of 5,500 Mahogany trees and 2,400 Durian trees as part of greening programme, and to fulfil environmental requirements.

Based on chemical usage records in all estates, there is several evidence of implementation of chemicals use-reducing practice. For example, zero use of paraquat or minimised use of chemicals for pest management due to little or even no pest attacks found in the estate. Compliance status: Non-Compliance NCR No. 2011 – 21 of 22 Action plan and monitoring documents for certain chemical use reduction (criterion 4.6), environmental impact (criterion 5.1), waste reduction (criterion 5.3), pollution and emission (criterion 5.6), and social impact (6.1) are not appropriately provided.

RSPO Certification system section 4.2.4 NCR No. 2011 – 22 of 22

PTPN III did not provide result of the self-assessment for all units entering estate and mill at the time bound, except those in Silau Dunia, Gunung Monako and Pulau Mandi Estates.

3.2 Identified non-compliances, corrective actions taken and auditors conclusions

The total of 22 nonconformances were identified during the main certification assessment. . These consist of 12 major and 10 minor non-compliances. The company has taken corrective action against these as well, and for those which could not be verified as closed through document checks, the closure of these minor non-conformities will be assessed during the next surveillance audit. A summary of all identified non-conformances, corrective actions taken and auditor conclusions is as below:

Criterion 1.2. (Major indicator 1): Information and responses must include any rele vant or required documentation, in accordance with applicable nation al laws, such as: • Legal: Land titles/user rights (Location Permit, Plantation Business Licence (IUP), Rights of Cultivation (HGU) or other documentations relating to HGU application under relevant procedures) • Environmental: Environmental and Social Impact As sessment (AMDAL /Environmental Management Effort Report (UKL)- Environmental Monitoring Effor t Report (UPL)) and Environmental Management and Monitoring Plan Reports (RKL-RPL reports) • Social: Documentation of social activities and co mmunity programmes. • Health and Safety Plan• Continuous improvement pl an



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Non-Compliance No. 2011-1 of 22 (Major Non-Complian ce):

PTPN III Director Circular Letter No. 3.00/SE/01/2009 on Publishable Documents has been issued on 5 January 2009. However the some legal documents such as licences documents including HGU certificate, documentation OHS programme, documentation of continuous improvement programmes as required by RSPO P & C are not included in list of published documents in the letter. Corrections :

Revise and republish the circular letter related to document or information accessible to public, including HGU certificate, the company’s OSH programme and other improvement programmes. Corrective Action :

The district management representative will monitor the circular letter implementation as expected and identify if any other documents are publicly available. Auditor Conclusion: Closed Date of closure: 7 February 2012 Verification Audit result year 2013:

There is a revised version of PTPN III Director Circular Letter No. 3.00/SE/01/2012 dated 24 January 2012 on documents publicly accessible (upon request), containing list of documents such as company profile, annual report, finance report from public accountant, the Right of Cultivation (HGU) certificate, Good Corporate Governance (GCG) guidance, evaluation of GCG performance, awards certificate, Environmental Impact Assessment (AMDAL), Environmental Management/Monitoring Plan (RKL/RPL), CSR document, licences (e.g. for land application), OSH policy and its implementation, company’s legal documents, hazardous waste storage permit, Wastewater Treatment Plant (WWTP) permit, continues improvement programme, etc. There are 21 types of documents publicly available as required by RSPO. Incoming request of information will be recorded to Log Book (‘Catatan Hasil Komunikasi Stakeholder’). No incoming request of information has been found since January 2012. Those available are several incoming letter on request for donation. The company has made procedure for information request through Working Instruction No. IK-3.00-13/01 (3rd revision) dated 15 February 2010 and revised Working Instruction No. IK-3.00-16/01 for data provision for stakeholders’ interest. Information will be granted upon request.

From re-verification audit and information update in September 2013, it is known that the circular has been distributed to all estate managers (the estate managers has further distributed it to all division heads) and has not been changed/revised and all estate storing.

Criterion 2.1.1. (Minor indicator 1): A documented system, which includes written inf ormation on legal requirements that the palm oil company should compl y with.

NCR No. 2011-02 of 22 (Minor Non-Compliance)

Mambang Muda Estate has no list of applicable regulations which have been issued since year 2010 to the time of audit.. Correction :

Mambang Muda Estate completes and documents all applicable documents which have been issued since 2010 to date. List of applicable legal requirements and other regulations will be updated according to existing Standard Operational Procedure No. IK-3.11-01/01 (2nd revision) on Procedure for Identification and Evaluation (including compilation of legal requirement) issued on 2 June 2009. Corrective Action:

Updating applicable legal and other requirement list will be evaluated biannually along with internal audit programme to ensure that all relevant and applicable legal and other regulations have been appropriately included in the list.



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Auditor Conclusions: Evidence of immediate action t aken has been accepted. Effectiveness of implementation is to be verified during the next au dit.

Criterion 2.1.2 (Major indicator 2) Evidence of eff orts made to comply with changes in the regulations .

NCR No. 2011-03 of 22 (Major Non-Compliance) No evidence found indicating compliance evaluation against several 2009 and 2010 regulations such as: - Law 22 of 2009 on Traffic and Road Transport, taking effect as of 22 June 2009; - Government Regulation No. 15/2010 on the Spatial Planning Implementation; and - Government Regulation No. 10/2010 on Procedure for Forest Land Use and Allocation Change, taking

effect as of 22 January 2010.

Corrections: The company re-evaluates all applicable regulations such as Law 22 of 2009; Government Regulation No. 15/2010; Government Regulation No. 10/2010, and other applicable regulations related to its operations.

Corrective Action: The company conducts periodic evaluation as guided by SOP No. IK-3.11-01/01 (2nd revision) on Identification and Evaluation Procedure, including compilation of legal requirements issued on 2 June 2009. The evaluation result will be subject to every internal audit. Auditor Conclusions: Closed Date of closure: 7 February 2012

Verification Audit Result year 2013:

The list of laws and regulations in all estates and mills has been revised due to the company’s re-evaluation of all applicable regulations. There have been several evidences of applicable regulation evaluation such as the following example that has been evaluated at the verification audit time such as: . • Relating to Law 22 of 2009, vehicle check of FFB-transporting truck no. BK 8795 dated February 2012 in

Mambang Muda Estate. The truck was already equipped with safety belt, spare tire, first aid kit, safety triangle, etc. and complied with applicable law and regulation.

• Evaluation result has been found for Law 15 of 2010 on Spatial Planning and Government Regulation No. 10/2010 on Forest Area Land Use Change.

During the re-verification audit or up-date, data and information covering list of 2012/2013 laws and regulations were already available in all estates and mills and evidence of evaluation result available on each visited estates..

Criterion 2.1. (Major indicator 2): Evidence of efforts made to co mply with changes in the regulations.

NCR No. 2011-04 of 22 (Major)

Plantation Business Registration Decree No. HK.350/525/Dj.Bun.5/VII/2001 dated 5 July 2001 for Bandar Selamat Estate still states that the company’s plantation commodity is only rubber, instead of oil palm plantation. Corrections: The company proposed for revision of its Plantation Business Registration Decree to Asahan District Head (c.q. Head of Licence and Investment Managing Board) through Letter No. 3.11/X/04/2012 signed by PTPN III top management. The letter was accepted on 6 February 2012. The company will follow the required process to revise its Plantation Business Registration to overcome this issue.

Corrective Action Re-identification of Plantation Business Licence IUP in all PTPN III estates to ensure that there will be no more



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plantation operation irrelevant to the existing IUP. Auditor Conclusions: Closed Date of closure: 7 February 2012 Verification Audit Result year 2013 : Head of Licence and Investment Managing Board of Asahan District has issued Letter No. 3.11/X/04/2012 dated 6 February 2012 on IUP renewal for Bandar Selamat Estate to include oil palm to its plantation commodities. During verification audit in year 2012, the company was still waiting for response of Asahan District Head to revise the licence, because according to explanation from legal staff, such revising process takes more than 3 months. During the re-verification audit in year 2013, it was found that the IUP renewal or permit for plantation commodity conversion has been issued by virtue of Asahan District Head Decree No. 503/IPJT/BPPPM/10789/V/2013 dated 16 May 2013 on Revision of Plantation Permit Type. The permit now states Bandar Selamat Estate’s plantation type is oil palm, hence relevant to its actual practice.

Criterion 2.1(Major indicator 2 ): Evidence of efforts made to comply with changes in the regulations. NCR No. 2011-05 of 22 (Major Non-Compliance) No evidence has been found indicating that the company has adjusted its minimum wage rate policy to its sub-contractor’s workers in order to have them comply with applicable District Minimum Wage Rate (UMK), being an effort to comply with changes in wage regulation. Corrections: Company conducted evaluation as to the minimum wage policy to all its workers, including its sub-contractor’s workers. The policy was signed by Head of Plantation Division (3.01). The company also issued circular letter to all of its sub-contractors regarding this policy to have them comply with minimum rate in respective regions.

Corrective Action The company performs annual price calculation for its sub-contractors, adjusted with the minimum wage rate change. Auditor Conclusions : Closed Date of closure: 7 February 2012

Verification Audit result year 2013 : A joint statement letter has been issued dated February 2012 by five sub-contractor workers in Labuhan Haji Estate on the amount of wage received by sub-contractor workers. The letter was signed by the workers, the sub-contractor company and Labuhan Haji Estate. During re-verification audit or data and information update, it was found that the company had submitted letters to sub-contractor company relating to the minimum wage rate. The company received letter from sub-contractor company regarding commitment to comply the minimum wage rate. Wheremore agreement applies between the workers and the sub-contractor company on wage per activity.

Criterion 2.2. (Major indicator 1): Documents showing ownership or lease of the land in accordance with relevant laws.

NCR No. 2011-06 of 22 (Major Non-Compliance)

No record is available on process of land ownership transfer for 2,200 ha of forest area in Labuhan Haji Estate which is indicated as forest area according to Labuhan Batu District’s current spatial layout plan map. Corrections:

The company issued a clarification letter to Labuhan Batu District Head and Labuhan Batu Forestry Office regarding this problem, because Labuhan Haji Estate holds HGU certificate as evidence of their land ownership



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and this certificate has undergone renewal 3 times. Corrective Action

The company is to identify whether any similar land cases also occur in other estates for further action. PTPN III management will make strategic plan as the land problem will require inter-governmental agencies relationship such as National Land Agency (BPN), Ministry of Forestry and the local government. PTPN III will bring the issue to State Ministry of State-Owned Enterprise as shareholder for the ultimate decision making level regarding this problem. Auditor Conclusions : Closed with observations Date of closure : 6 February 2012

Verification audit result year 2013 :

HGU Certificate No. 117/HGU/BPN/2005 is available to cover PTPN III’s operation area of 3,248.07 ha in Kuala Hulu Sub-District of Labuhan Batu District, North Sumatera province, which is valid for 35 years. HGU Certificate No. 14 covers Labuhan Haji [plantation villages] being valid as of 23 December 2012 to 22 December 2040. The letter has undergone renewal 3 times.

There is a letter from Labuhan Batu Utara Regent No. 522/3194/HUTBUN/2011 dated 7 December 2011 to North Sumatera Governor on proposal for revision of Ministry of Forestry Decree No. 44/Menhut-II/2005 to change Forest Production (HP) area status into Area for Other Use (APL).

According to interview with Labuhan Batu Forestry Office officer, a part of Labuhan Haji Estate belongs to HP Area. To ensure the exact location of this part, the company should make a map overlaying Labuhan Batu spatial layout plan map and Labuhan Haji Estate operation area map.

Article 3 of Ministry of Forestry Regulation No.P.05/Menhut-II/2009 provides that status of land covered by HGU certificate is non-forest area and it belongs to APL zone, despite of the status on the spatial plan map being marked as HP. .

Criterion 3.1. (Major indicator 1) A documented working plan of the company for a mini mum of 3 years period. NCR No. 2011-07 of 22(Major non-compliance)

Bandar Selamat Estate has yet to make profit/loss analysis as planned to achieve 2009-2013 financial viability.

Corrections: The company’s 2009-2010 management plan was revised by 2011-2015 management plan, including the profit/loss analysis plan and the company’s profit calculation. The management plan also already included operational activities, as well as social and environmental impact management and monitoring.

Corrective Action The company issued SOP No. IK-3.04-10/01 on Long Term Management Plan RKAP where each district will make budget to be annually reported to the head office. Training programme on the SOP will be conducted periodically to prevent reoccurrence of misunderstanding during the company’s management planning.

Auditor Conclusions: Closed. Date of closure: 7 Feb ruary 2012.

Verification result year 2013: The company made Long Term Management Plan namely RJP document for period of 2011 and 2015 for both Bandar Selamat and other estates, including profit/loss analysis. The company makes 5-year management planning.

Criterion 4.6. (Minor indicator 2): Records of the results of health check-up for those who apply agrochemicals .

NCR No. 2011- 08 of 22 (Minor Non-Compliance) No records are available covering result of health check-up for agrochemical-applying workers such as spraying



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worker, even for sub-contractor workers.

Corrections: - Ask the sub-contractor to provide medical health check-up, especially for spraying worker or other

agrochemical works. All record related to medical check-up is maintained properly for administration staffs. PTPN III requires its sub-contractor to provide medical health check-up, especially for sprayer. Vendor should provide proper protective equipment on the site.

Corrective Action - The company identifies all workers related to matters of agrochemical application. Good health is the main

factor for recruitment process. This should be stated on the company’s agreement. - Conduct periodic medical health check-up. - Provide PPE for spraying workers.

Auditor Conclusions: Evidence for immediate action taken has been accepted. Effectiveness of the implementation is to be verified in the next audit.

Criterion 4.6. (Minor indicator 3): Records showing that no work w ith pesticides for pregnant and breastfeeding women. NCR No. 2011-09 of 22 (Minor Non-Compliance)

No mechanism has been established to ensure that no pesticide works for pregnant and breastfeeding women. This must apply even to sub-contractor workers.

Correction:

Revise estate - sub-contractors working agreements by adding terms of prohibition of assigning pregnant or breastfeeding female workers. List female spraying workers and provide them with training on spraying process and knowledge on the agrochemical risks to pregnant or breastfeeding women.

Corrective Action:

Sub-contractors are required to provide a list of workers who to work in the estate to ensure that no pregnant or breastfeeding women are included in the sprayer group. The company make a medical surveillance plan for all woman working with chemical to ensure there is no fregnant and breastfeeding woman still there.

Auditor Conclusions: Evidence of immediate action t aken has been accepted. Effectiveness of the implementation is to be verified at next audit.

Criterion 4.6. (Major indicator 4): Waste material from agrochemic als including pesticides containers are properly disposed in accordance with laws and r egulations.

NCR No. 2011-10 of 22 (Major Non-Compliance) Waste materials from agrochemical, including pesticides containers, are not disposed or sent to authorised collector or to hazardous waste processor. Currently the company treats agrochemical containers as normal solid waste. Corrections: Revise IK-3.12-01/14, IK-3.03-01/02 and treat agrochemical container as hazardous waste. Perform separation between hazardous waste and non-hazardous from the waste origin to temporary waste collection point in estate office, before being discharged to a licenced waste collector according to headquarters direction. Corrective Action: - The company make proposal for environmental officer approval for hazardous waste-keeping period of more

than 90 days while waiting for licenced waste collector. All hazardous waste must be collected in the licenced temporary storage facility.

- Retraining for Work Instructions No. IK-3.12-01/14 and IK-3.03-01/02 to all workers responsible for waste collector.



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Auditor Conclusions: Closed Date of closure: March 2012 Verification Audit Result year 2013: The company revised Working Instruction No. IK-3.03-01/02 (5th revision) on Waste Management dated 1 December 2011 and Circular Letter No. 3.03/SE/02/2012 dated 12 January 2012 instructing that previous pesticide packaging as normal waste become hazardous waste categorised and disposed to licenced temporary storage. Bandar Selamat Estate has been licenced by Asahan District Head by virtue of Decree No. 660.1/386/LH/2010 dated 15 July 2010 for running temporary storage for used diesel, battery, and oil filter. Aek Nabara Selatan Mill has been licenced by Labuhan Batu District Head by virtue of Decree No. 503.660/205/BLH-LB/WAS/2011 dated August 2011 for used diesel oil, battery, agrochemical container, TL lamp, and oil filter. Mambang Muda Estate has been licenced by North Labuhan Batu District Head by virtue of Decree No. 660/213/LH/2011 for running temporary storage facility. Mambang Muda Estate is allowed to keep hazardous waste in temporary storage facility only for 90 days and 180 days. However, Bandar Selamat Estate is not licenced for agrochemical packaging waste. Therefore, the company should make request to the local government and revise the existing licence in order to include agrochemical packaging. During the re-verification audit for updating data and information, it was found that the estate has disposed or sent hazardous waste (including agrochemicals and pesticide containers) to authorised/licenced collector or hazardous waste processor.

Criterion 4.7.2 (Minor indicator 1): Provision for accident insurance for workers.

NCR No. 2011-11 of 22 (Minor Non-Compliance) No information available indicating that sub-contractors provide accident insurance to their workers. Corrections: Require to contractor to provide accident insurance for their worker. Revise working contracts include information about requirement to provide accident insurance. Estate manager will review list of worker and ensuring workers provided by accident. Corrective Action: • Evaluate and monitor accident insurance provision for sub-contractor workers. • Ensure that sub-contractors provide proper accident insurance to their workers. Record for this will be sent

to PTPN III every vendor audit or vendor selection.

Auditor Conclusions: Evidence of immediate action t aken has been accepted. Effectiveness of implementation is to be verified in the next audit .

Criterion 4.7. (Minor indicator 6): Evidence of OHS and first aid equipment are available at worksites

NCR No. 2011-12 of 22 (Minor non-compliance) No first aid kit is available in places required onsite, such as at FFB transporters and ‘Field Supervisor’. Corrections: - Provide first aid kit in required places onsite and working areas such as estate office, afdeling office, FFB

transporter and field executor/supervisor. Corrective Action: Identify all locations that require first aid kit and provide the equipment properly. Auditor Conclusions: Evidence of immediate action t aken has been accepted. Effectiveness of implementation to verified at next audit .



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Criterion 5.2. (Minor indicator 2): Companies are t o appoint dedicated and trained officers to monitor any plans and activities as above. NCR No. 2011-13 of 22 (Minor Non-Compliance) Those assigned to perform HCV monitoring have not been provided with appropriate training for his job to enable them to monitor any plans and activities recommended by HCV consultant. Corrections: - Provide HCV officers in all estates with HCV training in regard to recommendation from HCV consultant.

Corrective Action - Consistently evaluate HCV monitoring and management result recommended in HCV monitoring and

management documents. - Annually deliver training programme on HCV management and monitoring plan to all field

executors/supervisors in order to improve their knowledge on HCV management and monitoring programme in PTPN III, as on HCV management document.

Auditor Conclusions: Evidence of immediate action t aken has been accepted. Effectiveness of implementation is to be verified in the next audit.

Criterion 5.2. (Major indicator 2): If rare, threat ened or endangered species, or high conservation value habitats are present, appropriate measures to preserve them are to be taken.

NCR No. 2011-14 of 22 (Major Non-Compliance) No appropriate action plan has been established to protect area with slope of 40% in Afdeling IV of Bandar Selamat Estate. Corrections: Establish action plan to protect >40% sloped areas in Afdeling IV through terracing in the planted area including cover crop planting for open area and enrichment planting with hardwood species for the non-planted ones. Make erosion monitoring sampling plot and ensure that the erosion level is maintained, hence conformity with government standard.

Corrective Action: Identify the >40% sloped areas in all PTPN III’s estates and establish long-term and short-term soil conservation programme such terracing and enrichment with hardwood species. An SOP was established on this matter, i.e. SOP No. IK-3.01-14/06, to guide the soil erosion mitigation practice. Auditor Conclusions: Closed Date of closure: December 2011 Verification Audit Result year 2013:

Action plan document is available to protect the >40% areas with slope as they are exposed with high risk erosion in Afdeling IV of Bandar Selamat Estate. According to visit to Afdeling IV, they already carry out management plan as required by terracing and making pits to trap runoff water and hold the sediments carried. Application of cover crop in open area has been seen onsite.

During the re-verification audit or data and information update, it was found that the estate (Afdeling IV – Bandar Selamat Estate) has developed terracing in planted areas.

Criterion 5.2. (Major indicator 2): If, rare, threa tened or endangered species, or high conservation value habitats are present, appropriate measures to preserve them are to be taken. NCR No. 2011-15 of 22 (Major Non-Compliance) No evidence has been found indicating HCV management plan implementation such as HCV 4.2-identified river riparian area in KANAS Estate. The company’s current activities are performed only in water reservoir area,



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namely the ‘O’ area. Corrections: Improve HCV management plan implementation, such as : - Enrichment planting in Aek Nabara Selatan Estate’s HCV 4.2-identified river riparian area with hibiscus tree

species. The buffer area is marked with at least 5 rows of red painted palms. - Re-train the appointed HCV officers in order to improve their knowledge on implementation of HCV

management and monitoring.

Corrective Action - Perform management and monitoring in accordance with recommendation in HCV document. Auditor Conclusions: Closed Date of closure: January 2012.

Verification Audit:

Observed in Afdeling VI Aek Nabara Selatan is the buffer area marked with red painted oil palms, width of which is double of the river’s. Some parts of riparian area have been planted with hibiscus tree species. The company issued circular letter for prohibition of land clearing in river riparian areas.

Criterion 5.5. (Major indicator 1); Documented asse ssment where fire has been used for preparing land for replanting.

NCR No. 2011- 16 of 22 (Major Non-Compliance) No proper documented assessment was carried out for KANAS Estate’s use of fire for 2011 land clearing. Corrections: Provide documented assessment on using fire for land clearing. During audit, this document was kept in Labuhan Batu district office. According to the assessment result, the land clearing used fire because Aek Nabara Selatan Estate was suspected to have been attacked by ganoderma. The company decided to remove the ganoderma seeds and to isolate the fungi spread, and asked permission to the local government. Corrective Action Ensure that no more fire will be used in the next replanting programme, save for urgent condition, such as to prevent pest attack. Establish replanting process procedure including guidance in case of use of fire for emergency condition. Improve communication between the company and sub-contractors regarding how to implement relevant working instruction. Auditor Conclusions: Closed. Date of closure: Febru ary 2012 Audit Verification

The company provide the assessment result for use of fire for land clearing as explained in the Letter No. 522.525/525/622/BUN/2011 dated 28 April 2011 where the document explains that fire has been used to prevent ganoderma attack from getting wider than normal condition.

Criterion 5.6. (Major indicator 2) Evidence of identification of pollution and emissio ns sources at mills. Non-Compliance 17 of 22 (Major Non-Compliance) No records are available covering monitoring of pollution and emission from vehicles, POME and other sources. Corrections: Monitoring of pollution and emission from vehicles, POME and other sources has been done and recorded in document No. FM-3.12-01-06/02.



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Corrective Action Establish SOP for monitoring of emission from vehicles and other sources. PTPN III will make feasibility study for methane gas captured from POME operation to prevent future GHG emission. Auditor Conclusions: Closed Date of closure: January 2012

Verification Audit result 2013:

Verified onsite. There is list of emission and pollution source in Aek Nabara Selatan Mill as mentioned in document No. FM-3.12-01-06/02. Emission monitoring is already conducted only to generator, boiler, and manager vehicles. The company is still searching for vendor to measure FFB truck emission. The monitoring result is recorded biannually, together with RKL/RPL report (e.g. Emission Monitoring Report for Boiler No. 1 and 2 by Environmental Agency (BLH) No. 25/BLH.SU-UPT.LL/XI/2011 dated 8 November 2011).

Manager vehicle emission monitoring is conducted biannually as well. A document of ‘Green House Gas Emission Reduction Programme’ is available covering project of feasibility study for methane gas captured from effluent pond. The document mentions several actions in the programme as follow: - use of methane gas for electrical planning in 2012-2015; and - conduct enrichment planting over POME surrounding area biannually. Criterion 6.1. (Major indicator 1): Documented envi ronmental and social impact assessment, including details of positive and negative social e ffects that may be caused by plantations and mills, and documented participation of affected parties an d local communities. NCR No. 2011-18 of 22 (Major Non-Compliance) Social Impact Assessment (SIA) does not cover social impact to the company’s and sub-contractor employees. Furthermore, no evidence has been found indicating that the company’s employees participated during the assessment process. The assessment only focuses on the surrounding community. Corrections: Revise the SIA document to include information on social impact to the company’s employees or workers and their families. Corrective Action Identify all activities non-covered by the SIA document, which should be included in the next SIA document. Auditor Conclusions: Closed Date of closure: January 2011 Verification Audit result 2013:

The company provided revised version of the SIA document that already includes information on social impacts to its employees/workers and their families.

Criterion 6.1. (Minor indicator 1): Regular monitor ing and management of social impact, with the participation of local communities. NCR No. 2011-19 of 22 (Minor Non-Compliance) No evidence has been found indicating that social impact monitoring plan has been established through participatory process engaging the company’s stakeholders. Corrections: The social impact management and monitoring plan has already been established engaging the local community participation.



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Corrective Action Implement social impact participatory management and monitoring to the surrounding community.

Auditor Conclusions: Evidence of immediate action t aken has been accepted. Effectiveness of implementation is to be verified in the next audit. Criterion 6.3 (Minor indicator 2): Procedures for t he identification and calculation of fair compensation for the loss of legal or customary rig ht of the land, with the involvement of local community representatives and relevant agencies and made publicly available. NCR No. 2011-20 of 22 (Minor Non-Compliance) No procedures have been established engaging the local community and relevant institutions to identify and calculate compensation for loss of legal and traditional rights. Corrections :

The company makes procedure to identify any claims regarding compensation for loss of legal and traditional rights. The procedure information will be distributed and communicated with relevant stakeholders in any case relating to payment of compensation.

Corrective Action : No plan has been made for next 10 years to expand company’s area. The company holds legal right to manage the land since a long time ago. There are no traditional rights in company’s concession as the area has already been planted since a long time ago.

Auditor Conclusions: Evidence of immediate action t aken has been accepted. Effectiveness of implementation is to be verified in the next audit. Criterion 8.1. (Major indicator 1) A monitoring action plan based on the social enviro nmental impact assessment, and regular evaluations of plantation a nd mill operations. As a minimum, these must include, but not necessarily be limited to: • Reduction in use of certain chemicals (criterion 4.6). • Environmental impacts (criterion 5.1). • Waste reduction (criterion 5.3). • Pollution and emissions (criterion 5.6). • Social impacts (6.1). NCR No. 2011 – 21 of 22 (Major Non-Compliance) Action plan and monitoring documents for certain chemical use reduction (criterion 4.6), environmental impact (criterion 5.1), waste reduction (criterion 5.3), pollution and emission (criterion 5.6), and social impact (6.1) are not appropriately provided. Corrections: Action plan to reduce chemical material use, mitigate environmental impact, reduce waste, reduce pollution/emission and social impact has been done.

Corrective Action: Scope of internal audit programme will cover monitoring of chemical material consumption, environmental impact, generated waste, pollution, emission and social impact. Internal audit result will be made the main consideration to the company’s continual improvement programmes, such as environmental and CSR programmes, including programmes to reduce waste and agrochemical use, etc. Auditor Conclusions: Closed Date of closure: January 2012 Verification Audit Result 2013:

Mambang Muda Estate has made action plan for agrochemical use reduction as seen in the plans/records made to reduce agrochemical use, environmental impact, waste, pollution and emission. Agrochemical used



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by the company is categorised as type 1A or 1B under WHO or those listed by Stockholm or Rotterdam conventions (such as Ally 20 WDG, Decis, Bayleton 250 EC, and Gempur 480 SL). Based on 2013 record of agrochemical use, it is known that the dose applied (actual) has been reduced from the planned one for activities of spraying and wiping. Mambang Muda Estate has run test to identify emissions and pollution level, as well as quality of river water and the community’s well water.

Labuhan Haji Estate has made management plan for social impact to the local community, such as those to public and social facilities, employment and business opportunities, and worker wage. Evidences are available indicating information dissemination activities carried out to sub-contractor companies and their workers on minimum wage rate.

Aek Nabara Selatan Mill has reduced GHG impact through several activities such as periodic boiler emission and pollution test, minimisation of use of generator, wheel loader, development of methane capture, as well as trees planted.

4.2.4 RSPO Certification System

NCR No. 22 of 22 (Major Non-Compliance) PTPN III did not provide result of the self-assessment for all units entering estate and mill at the time bound, except those in Silau Dunia, Gunung Monako and Pulau Mandi Estates.

Corrections: Self-assessment for other estates under PTPN III programme was performed together with corporate internal audit programme.

Corrective Action: Corporate management representatives conduct annual self-assessment programme where result from the internal audit programme is taken for company’s consideration as to target to meet RSPO requirement. Auditor Conclusions: Closed Date of closure: February 2012 Verification Audit Result 2013:

Self-assessment results are available covering the company’s other estates such as Tanah Raja Estate, etc. Annual self-assessment programme has been made for year 2013 , would be conducted on May 2014

3.3 Noteworthy Positive Components

Criterion 1.1 (Major indicator 1): Oil palm growers and millers provide adequate information to other stakeholders on environmental, social and legal iss ues relevant to RSPO Criteria, in appropriate languages & forms to allow for effective participat ion in decision making. Findings: PTPN III has call centre 3034 to receive information, complaint or any kind of communication from stakeholders. Medan Head Office collects any incoming information, complaint or any kind of communication and forwards them to relevant section for follow-up. Criterion 8. (Major indicator 1): Growers and mille rs regularly monitor and review their activities an d develop and implement action plans that allow demon strable continuous improvement in key operations. Findings: Since the company has cooperation with Indonesia Oil Palm Research Centre (PPKS Indonesia), average yield production in majority of the company’s estates has increased and it tries to keep improving more until the yield reaches 35 tonne/ha for year 2020 as campaigned by Indonesian Government, i.e. 35:26 in 2020. The company’s current yield production average is 24 tonne/ha.



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3.4 Description of Supply Chain Management System

Aek Nabara Selatan Mill is located in North Sumatera. Its FFB production capacity is 60 tonne/hour . In 2012 Aek Nabara Selatan Mill received approximately 88.82% (253,658.26 tonne) from its FFB supply from 7 company-owned estates (Aek Nabara Selatan, Mambang Muda, Merbau Selatan, Labuhan Haji, Bandar Selamat, Sei Dadap and Rantau Prapat Estates) and the remaining 11.18% (31,937.31 tonne) from other estates owned by the company (Aek Nabara Utara Estate and independent outgrowers/smallholders. Total FFB received in January-August 2013 by Aek Nabara Selatan Mill is 179,082.63 tonnes, supplied from the company’s estates (158,624.81 tonnes or 88.58 %), the company’s other estates (5,342.52 tonnes or 2.98%) and independent outgrower/smallholder (15,115.30 tonnes or 8.44%). The mill produces Crude Palm Oil (CPO) and Palm Kernel (PK).

The company implements SCC-RSPO with ‘Mass Balance’ model according to nature of mill’s FFB supply condition. Following is description of the company’s supply chain management system according to RSPO SCCS requirements, including compliance status of the company and their outsourced third parties with RSPO SCCS requirements. At the audit time the company had an SCC system, but only several NCs have been identified complying with RSPO SCC 2009 standard. This has been raised as several non-compliances as describe below.

SCCS Section 3.2 Certification Requirements

Findings:

Aek Nabara Selatan Mill is one of mills owned by PTPN III. It is located in Aek Nabara Selatan Village of Bilah Hulu Sub-District, Labuhan Batu District, North Sumatera. PTPN III is already an RSPO member (Reg. No. 1-0030-06-000-00). No outsourced activities by independent third parties in Aek Nabara Selatan Mill, so the company is not imposed for obligation to ensure sub-contractors’ compliance with RSPO Supply Chain Certification System. Aek Nabara Selatan Mill is yet to be registered under UTZ Certified system and not claims yet too where the company will be registration to UTZ Certified and claims after get certificate or surveillance audit. Compliance status: Full Compliance



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1. Documented procedures

Findings:

Based on the PTPN III Director Decree No. 3.03/SKPTS/03/2011 dated 5 August 2011 on chosen to establish the Segregation (SG) option for Supply Chain Certification System (SCCS). This condition is not relevant to the actual condition in the field because real condition is Mass Balance (MB) This condition has been raised as Non-Compliance.

The company has integrated SCCS System with Quality Management System Certification (ISO 9001:2008) and Environment Management System (ISO 14001:2004).

The company has established and maintained SCCS procedure dated 6 June 2011. The SCCS procedures covers the following: - Work Instruction No. IK-3.03-12/01 on FFB Purchase and Processing from External Parties; - Work Instruction No. IK-3.03-01/16 on FFB Reception at Mill (3rd revision) dated 6 May 2011; - Work Instruction No. IK-3.03-01/19 on Palm Oil Process (3rd revision) dated 6 May 2011; - Work Instruction No. IK-3.03-01/20 on Control of Palm Oil Quality and Process (2nd revision) dated 15

February 2010; - Work Instruction No. IK-3.03-01/22 on CPO and PK Analyst dated 15 February 2010; - Work Instruction No. IK-3.03-01/24 on Palm Oil Product Storage (3rd revision) dated 6 May 2011); - Work Instruction No. IK-3.03-07/02 on Sales of Certified Palm Oil to Belawan Installation, PT Sarana Agro

Nusantara, PT IKN and other parties; - Work Instruction No. IK-3.01-18/01 on Planning and Controlling of Production Process and Replanting; - Work Instruction No. IK-3.03-04/01 on FFB Grading (6th revision) dated 6 May 2011; - Work Instruction on Weighbridge; and - Work Instruction No. IK-3.03-15/01 on Supply Chain Certification System (rev.00) dated 6 May 2011.

Following are forms to record SCCS system implementation : - FM-3.03-01/16-01 (FFB Receipt/PB-28); - FM-3.03-01/16-02 (Weighbridge Recapitulation); - FM-3.03-04/01-01 (Weekly Report for FFB Grading); - FM-3.03-04/01-02 (Monthly Report for Grading Report); - FM-3.03-04/01-03 (Weekly Report for Receipt of FFB Pending Yesterday’s Process); - FM-3.03-04/01-04 (Monthly Report for Receipt of FFB Pending Yesterday’s Process); - FM-3.03-05/01-03 (Check Sheet of Monitoring during Processing); - FM-3.03-05/01-01 (Check Sheet of FFB Quality and Grading in Mill); - FM-3.03-05/01-02 (Check Sheet of before starting operational in Mill; - FM-3.03-05/01-06 (Daily Production Report); - FM-3.03-05/01-04 (E-mail/Facsimile for Daily Production Report); - FM-3.03-05/01-07 (Result of the CPO Quality Analyst, and Oil losses - FM-3.03-05/01-08 Result of the PK Quality Analyst, and Kernel Losses - FM-3.03-05/01-10 (Calculation of Oil Storage Tank Volume); and - FM-3.03-07/02-01 (FFB Receipt Slip).

Mills and estates have appointed personnel with responsibility for and authority of implementing SCCS Requirements. They are Manager, Vice Manager and Assistant (based on Director Decree No. 3.12/SKPTS/16/2011 dated 3 June 2011). Compliance status: Non-Compliance

NCR No. 01 of 03 There is a difference between SCCS model in the director decision letter (SG) and the implementation in mill

(MB).

2. Purchasing and goods in

Findings:

Procedures for certified FFB and goods-in is covered under the company’s Work Instruction No. IK-3.03-12/01 on FFB Purchase and Palm Oil Process (3rd revision) ruling definition of certified FFB and verification of FFB sources. A person has been appointed to be responsible for checking and ensuring FFB quality and quantity as



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per purchase documents.

When receiving RSPO certified palm, task of a processing assistant is to verify the claimed category of the material under mass balance system, supplier’s supply chain certification number, and products quality and quantity (coordination with laboratory assistant). The company will identify certified FFB from non-certified ones according to the following methods:

Category Certified FFB Non-certified FFB Transport document Stamped as ‘CSPO’ Not stamped Name board Stated as CSPO Not stated as CSPO Transport form No. PB-25.01 CSPO Stamped Not stamped Transport truck Marked with ‘CSPO’ sign No CSPO signs on trucks

The company has established a procedure/mechanism related to handling of non-conforming material/documents, namely Work Instruction No. IK-3.05-04/06 (2nd revision) dated 6 May 2011, although it does not cover RSPO material declassification when the supplier supply chain certification number is found to be invalid. This condition has been raised as non-compliance. Compliance status: Non-Compliance

NCR No. 02 of 03

Evidence is lacked confirming that Aek Nabara Selatan Mill has established and prepared procedure covering mechanism for RSPO material declassification when a supplier’s supply chain certification is found to be invalid, e.g. Identity Preserved -> Segregated -> Mass Balance -> Non-RSPO Certified Palm Oil.

3. Sales and goods out

Findings:

PTPN III’s sales and goods-out mechanism is set up in their procedure under Work Instruction No. IK-3.03-07/02 for RSPO certified palm oil sale to Belawan Installation (storage tank in Belawan port owned by the company), PT Sarana Agro Nusantara (a CPO and PK trader and PTPN III’s sister company), PT IKN (a rubber trading company being also PTPN III’s sister company) and other parties. The company’s supply chain procedure is also implemented for rubber product trading. Records of all sold RSPO-certified materials are documented in material despatch forms, material quality notifications and palm oil receipts.

The company has ensured all invoices (Oil Palm Despatch Receipt, PB-33.01) issued for certified palm oil has included information on buyer’s name and address, issuance date, description of products including the supply chain model, product quantity and reference to transport documents. This will be implemented after company get certificate. Compliance status: Full Compliance

4. Processing

Findings:

Company received certified FFB from they estate and FFB from independent outgrower, and they have no separation facility to process both FFB so the supply chain model used in mill is Mass Balance (MB).

Aek Nabara Selatan Mill has conducted simulation for CSPO production process according to Director Circular Letter No. 3.12/SE/09/2011 dated 31 October 2011.

Aek Nabara Selatan retains records and balances of certified palm oil received and deliveries on a monthly basis in ‘CPO & PK Stock (‘CPO and PK Balance’) form and ‘CPO & PK Production’ (‘CPO and PK Production’) form. Compliance status: Full Compliance

5. Record keeping



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Findings:

PTPN III has established a mechanism for control and maintenance of data and document used in the mass balance (MB) system implementation. The retention period for all records and reports is less than five years, i.e. three years (based on Annex II TP.28 of Director Decree No. 3.00/SKPTS/13/2011 dated 30 June 2011. This condition, therefore, has been raised as non-compliance. Document storage and maintenance is responsibility of respective departments. The company has divided the records to keep into three categories of document, i.e. (i) active documents (must be kept for at least one year); (ii) inactive documents (must be kept for at least 1-5 years); and (iii) permanent documents (must be stored for period of 5-30 years). All records pertaining to SCCS implementation are categorised as permanent documents.

The company retains records and balances of certified palm oil received and deliveries on a monthly basis in ‘CPO Stock’ (‘CPO and PK Balance’) form and ‘CPO Production’ (‘CPO and PK Production’) form. All volumes of delivered palm oil are deducted from material accounting system according to actual daily conversion ratio and delivery product from the positive stock.

In FFB delivery note (PB-25), information is available mentioning name of estate, division and field/block, so FFB certified can be traced back entirely to the delivering estate. Whereas, information on number of delivery order and contract in product delivery note can be used to trace back to the mill for RSPO-certified palm oil. Compliance status : Non-Compliance

NCR No. 03 of 03

The retention period for all records and reports of SCCS implementation will be kept for less than five years.

6. Training

Findings:

The company’s Supply Chain Certification System (SCCS) training mechanism is covered in the training procedure as per Work Instruction No. IK3.08-11/01 (7th revision). It has established and specified following training records: - FM-3.08-11/01-01 Human Resources Development Programmes; - FM-3.08-11/01-02 Training Plan/Schedule; - FM-3.08-11/01-05 Trainee List; - FM-3.08-11/01-08 Personal Training Evaluation for Training Implementation; - FM-3.08-11/01-09 Training Evaluation; and - FM-3.00-01/02-01 Recapitulation of Document at Working Area.

The company has conducted SCCS standard training for all Aek Nabara Selatan Mill employees on 19 October 2011 with Mr Lukman Panjaitan as trainer. Moreover, daily briefing has been conducted centring SCCS information as one of the topics in mills (each section). Documented from the training are trainee list, training agenda and material/presentation. Compliance status: Full Compliance

7. Claims

Findings:

No procedure has been established by the company for certified product communication and claim according to RSPO requirements as they have not made any claims yet. According to product traceability instruction, the mill will only make claims regarding the use or support of RSPO certified palm oil complying with RSPO Rules for Communication and Claims upon SCCS certificate issuance. This will be confirmed in the next audit. Compliance status: Compliance with observation

3.5 Identified Non-Compliance against RSPO SCCS Req uirement, Corrective Actions Taken and Auditors



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Conclusions

NCR SCCS-01 of 03 :

There is a difference between SCCS model in the director decision letter (SG) and the implementation in mill (MB). Correction : Revision of Director Decree No. 3.03/SKPTS/03/2011 dated 5 August 2011 on chosen to establish the Segregation (SG) option as SCCS model become Mass Balance (MB).

Corrective Action: Each change to policy certainly make change to the last decree as well. Date of closure: January 2012 Verification result:

PTPN III has revised the director decree on supply chain model from Segregation (SG) to Mass Balance (MB) in Aek Nabara Selatan Mill by virtue of Director Decree No. 3.03/SKPTS/01/2012 dated 2 January 2012. Auditor Conclusions: Closed NCR SCCS-02 of 03:

Evidence is lacked confirming that Aek Nabara Selatan Mill has established and prepared procedure covering mechanism for RSPO material declassification when a supplier supply chain certification is found to be invalid, e.g. Identity Preserved -> Segregated -> Mass Balance -> Non-RSPO Certified Palm Oil. Correction : Revision of Working Instruction No. IK-3.05-04/06 on Handling Mechanism for Non-Conforming Material/Document (2nd revision) dated 6 May 2011.

Corrective Action : The company will ensure that each procedure has complied with standard/requirement. Date of closure: January 2012 Verification result:

Working Instruction No. IK-3.05-04/06 (2nd revision) has been revised into Working Instruction No. IK-3.03-15/01 (Rev.00) dated 1 February 2012. The new working instruction covers declassification mechanism of RSPO material when a supplier’s supply chain certification is found to be invalid. Auditor Conclusions: Closed NCR SCCS-03 of 03:

The retention period for all SCCS implementation records and reports will be less than five years. Correction : Revision of SCCS record and report retention period in Annex II of Director Decree No. 3.00/SKPTS/13/2011 dated 30 June 2011.

Corrective Action: Adjust the retention period of RSPO/SCCS records and reports to meet RSPO standard/requirement. Date of closure: January 2012 Verification result:

Revision of the retention period was not executed because code of classification No.TP.4-Proceesing palm oil has explained hat the retention period is five years for SCCS-related records/reports such as FFB receipt note



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at mill, processing records/documents, weighbridge slip, etc. Auditor Conclusions: Closed

3.6 Conclusions and Recommendation for RSPO P & C a nd Supply Chain Certification

The audit team has confirmed through the audit process that the company has established and maintained an effective system to ensure compliance with RSPO P&C and Supply Chain Certification System (SCCS) requirements. It is also confirmed that the company have not yet sold any CPO and PK as RSPO Certified prior to this certification audit.

TÜV Rheinland Malaysia recommends that Aek Nabara Selatan Mill be approved for certification of compliance to the RSPO P&C and SCCS requirements 3.7 Issues Raised by Stakeholders and Findings Pert aining to Issues

A) Issues Raised during Stakeholder Consultation Me eting

No. Issues Raised Management Response Audit Verification

1.

Land application must be controlled and monitored, especially during rainy season. There was water pollution from land application in Parbaungan River around 1 km from Aek Nabara Mill. CSR programme should be distributed in balance. The local government is not informed of the company’s community development programme. The company must periodically report their hazardous waste management.

No problem in implementation of land application. The company monitors the implementation of and impact from land application as required by the Government. The company conducts water analysis and the result was no pollution found in Parbaungan River. The company observes that Parbaungan River is still used for daily activities. The company provided information regarding waste management to the local communities. Its proposed clean water through meeting on 25 June has been provided. It proposed road maintenance for Bawan Tuo road under Management approval.

During audit, no evidence found of water pollution in Parbaungan River. The company conducts water monitoring every month and reports to the local government, and the result is still below standard applied by Government regulation.

2.

Flooding in Aek Paling Village during big rain season, as the company has no maintenance programme for water drainage. We have already complained to the company, but the answer was always ‘waiting decision from director’.

According to research result from North Sumatera University, such flood was not caused by PTPN III activity, but from poor water drainage in the village.

There are programmes to maintain quality of river riparian area and other watershed areas to prevent flood as included in the HCV management and monitoring plan. However, implementing the recommendations contained in the HCV assessment report alone is considered insufficient.

3. What is benefit of RSPO certification and what is the company’s effort to comply

No further comment No need for further verification. Further explanation on RSPO



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with RSPO requirement? requirements.

4.

Suggested to perform reforestation to minimise global warming with hardwood species such as Mango tree, Ficus tree etc. the company should allocate 1,000 ha from every estate.

PTPN III has programme for enrichment planting, especially in river riparian and blank area in line with company’s HCV management programme

The company has programme for planting with hardwood species along the River. Management response can be accepted, Programme implementation will be verified during audit.

5.

The company’s profit should be provided to all workers and employees, community and the local government.

The company will consider this suggestion.

Management response can be accepted, Programme implementation will be verified during audit.

6.

PTPN III provided a lot of donation to the local community, the company is feasible to get RSPO certificate.

No further Comment No need for further verification. Further explanation on RSPO requirements.

7.

The company give donation to communities in Labuhan Haji and Mambang Muda such as Cooperation, Grazing location, bridge construction, water drainage maintenance etc.

No further Comment. The company has policy regarding transparency as already distributed through circular letter.

No need for further verification.

8.

Bandar Selamat Estate management is aware of the local community, especially to provide permission for grazing activities. Estate security is part of village head’s responsibility. The company should provide allowance for head of village.

No further comment No need for further verification.

9.

Village location in Sei Dadap Estate, the company provided donation such as village infrastructure (both physical and non-physical).


10.

The company has good relationship with its suppliers. FFB supplier should make long-term contract.


11.

The company provided wages to their staff and allowance for their families including scholarship for their children, medical and hospital for family.


12.

Transparency for recruitment process should be improved. Minimum wage for daily worker is still low compared to other PTPN III is still below the government regulation.

The company has procedure for recruitment process. For management level, the company open the information in the website, while for workers it announces the vacancy in Head of Village office.

It was already explained in Section 3.1, CR 6.8 regarding findings on job vacancies. Issue related to minimum wage was confirmed and raised as



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NCR No. 2011-05 of 22 under Section 3.2

13.

We asked for mosque construction but still not provided. The company’s staffs get free land and village got donation from PTPN III.

The company provides donation according to priority of which proposal firstly coming to estate manager. There is a review process from head office that took longer than expectation.

It was already explained in Section 3.1, CR 6.11, on the company’s contribution to the local community, including job vacancies.

B) Issues Raised during Stakeholder Interviews On-s ite

No. Issues Raised Audit Verification

1. Minimum wages still below Government’s standard rate.

Minimum wages for contractor workers are below government standard rate. This was raised as NCR No. 2011-05 of 22 under Section 3.2 above.



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3.8 Acknowledgements of Internal Responsibility and Formal Sign-Off by Client It is acknowledged that the assessment visit was carried out as described in this report and we accept the assessment findings and report content. Signed on behalf of PT Perkebunan Nusantara III …………………………………………. Tio Handoko Head of Management System Date: 15 November 2013

Signed on behalf of TÜV Rheinland Malaysia …………………………………………. Dian S. Soeminta Lead Auditor Date: 15 November 2013



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APPENDICES

Appendix 1: Details of Certificate

Standard: RSPO Principles & Criteria for Sustainable Palm Oil Production; Indonesian National Interpretation: 2008

Certificate Registr. No.: 18502897 001

TUV Rheinland Malaysia Sdn. Bhd. certifies:

Certificate Holder: PT Perkebunan Nusantara III (Persero), Aek Nabara Selatan Palm Oil Mill Bilah Hulu Sub District, Labuhan Batu District, North Sumatera, Indonesia

and its supply base according to the annex.

Scope: Palm Oil Production and Plantation Management System

An audit was performed, Report No. 18502897. Proof has been furnished that the requirements according to RSPO Principles & Criteria for Sustainable Palm Oil; Indonesian National Interpretation: 2008 are fulfilled.

The due date for all future audits is 23-03 (dd.mm).

Validity: The certificate is valid from 23-05-2014 to 22-05-2019.

The palm oil mill and supply base covered in certification scope are:

Name of mill / estate Location

GPS locations Latitude Longitude

Aek Nabara Selatan Mill

Bilah Hulu Sub District, Labuhan Batu District

02º03’42” 99º57’20”

Aek Nabara Selatan

Aek Nabara Village, Bilah Hulu Sub District, Labuhan Batu District

02º03’29” 99º57’19”

Mambang Muda

Perkebunan Mambang Muda Village, Kualuh Hulu Sub District, North Labuhan Batu District

02º33’02” 99º49’20”

Rantau Prapat

Jl. Lintas Sumatera Utara Rantau Prapat, Bilah Barat Sub-District, Labuhan Batu District

02º03’32” 99º48’04”

Merbau Selatan

Merbau Selatan Estate Village, Merbau Sub-District, North Labuhan Batu District

02º12’30” 99º49’54”

Labuhan Haji Labuhan Haji Village, Kualuh Hulu Sub District, North Labuhan Batu District.

02º32’10” 99º42’20”

Bandar Selamat

Perkebunan Bandar Selamat Village, Aek Songsongan Sub District, Asahan District

02º12’00” 99º33’00”

Sei Dadap Sei Dadap I / II Village, Sei Dadap Sub District, Asahan District

02º57’13” 99º40’06”



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CPO Tonnage Total Productions*: PK Tonnage Total Productions*: Company Estates FFB Tonnages*: FFB Tonnages from other sources*: CPO Tonnage claimed for certification: PK Tonnage claimed for certification: * Data for year 2012

68,191 tonnes 13,059 tonnes 253,658 tonnes 31,937 tonnes 60,574 tonnes 11,592 tonnes

Appendix 2: List of Abbreviations

AMDAL Analisis Dampak Lingkungan & Sosial (Social & Environmental Impacts

Assessment) ASL APL

Above Sea Level Other land Use (Area penggunaan lain)

BOD CD

Biochemical Oxygen Demand Community Development

CPO Crude Palm Oil CSR Corporate Social Responsibility DAS Daerah Aliran Sungai (Watershed) EIA Environmental Impact Assessment ERTs Endangered, Rare & Threatened species ESH Environmental Safety & Health FFB Fresh Fruit Bunches EFB Empty Fruit Bunches HCV High Conservation Value HCVA HP

High Conservation Value Area Production Forest (Hutan Produksi)

IPM Integrated Pest Management LTA Lost Time Accident MSDS Material Safety Data Sheets NGO Non-Government Organisation NPP New Planting Procedure OSH Occupational Safety & Health PKO Palm Kernel Oil POME Palm Oil Mill Effluent PPE Personal Protective Equipment PPKS PTPN PPN PKB

Pusat Penelitian Kelapa Sawit Indonesia (Indonesian Palm Oil Research Institute - IOPRI) PT Perkebunan Nusantara Value added tax(pajak pertambahan nilai) Working Agreement (Perjanjian Kerja Bersama)

RJP Rencana Jangka Panjang (Long-Term Plan) RKL RKAP

Rencana Pengelolaan Lingkungan (Environmental Management Plan) Rencana Kerja Anggaran dan Pendapatan (Revenue, Budget and Cost Plan)

RPL Rencana Pemantauan Lingkungan (Environmental Monitoring Plan) SCCS Supply Chain Certification System SEL Studi Evaluasi Lingkungan (Environmental Evaluation Assessment) SIA Social Impact Assessment SOP SPBUN

Standard Operating Procedure Estate Union worker (Serikat Pekerja Perkebunan)

UKL Upaya Pengelolaan Lingkungan (Environmental Management Efforts) UPL Upaya Pengelolaan Lingkungan (Environmental Management Efforts)

Appendix 3: List of Stakeholders Interviewed and Co ntacted



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No. Name of Stakeholder Institution / Position Stakeholders Interviewed during Public Consultation Meeting 1. M. Sitompul Environmental Officer Labuhan Batu 2. Syahril Tambunan Head of Aek Paling Village 3. M. Mukti Tanjung Youth leader North Labuhan Batu 4. Edwin Police Officer Simpang Ampat 5. Village Head Pulau Mandi Village 6. Rianto Aek Songsongan Village 7. Sudirman Head of Village Tanjung Alam 8. Zuwendi Supplier Aek Nabara Selatan Mill 9. Darif Simangunsong Labor Union Labuhan Haji Estate 10. Aburahman Janji Village 11. A. Pane Industrial Officer Labuhan Batu District 12. Abdul Latif Sei Dadap village

Stakeholders Interviewed On-Site 1. Siti Aminah Worker/ sprayer 2. Tini Worker/sprayer 3. Aga Field executor 4. Fachry Worker/ISO team 5. Elvin Ginting Worker/manurer 6. Boi Worker/harverster 7. Rina Worker/manure 8. Paini Worker/harvester 9. Zaenah Worker/FFB administration 10. Yani Worker/Weighbridge operator 11. Sani Worker/grading section 12. Yogi Worker/driver 13. Suharto Worker/mill operator 14. Situmeang Field Executor 15. Rosdiana Worker/census 16. Agus PTPN 3 Staff 17. Arnold Sipahutar, S.E. PTPN 3 Staff/ management representative 18. Tio Handoko, S.T., M.M. PTPN 3 Staff/Corporate RSPO Coordinator 19. Zuliono SP, QIA PTPN 3 Staff/quality Representative 20. David P. Sihombing, QIA PTPN 3 Staff/ quality Representative 21. Nefo Armansyah Srg PTPN 3 Staff/Mill Manager 22. Idham Matondang PTPN 3 Staff/ quality Representative 23. Suryono Damanik PTPN 3 Staff/ quality Representative 24. Pujimantoso PTPN 3 Staff/mill operator 25. Nokman Syarif PTPN 3 Staff/Estate manager 26. A. Zein PTPN 3 Staff/Document control 27. Arnold Siregar PTPN 3 Staff/General Affair. 28. Abdul Wahid PTPN 3 Staff/ISO team 29. Benyamin Siregar PTPN 3 Staff/Finance 30. Sidarta Sitepu PTPN 3 Staff/ quality Representative 31 Tenty Wahyuni PTPN 3 Staff/ quality Representative 32 Suhadi WS PTPN 3 Staff/ Esatate adminstration



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Appendix 4: Observations and Opportunities for Impr ovement

No. Observations / Opportunities for Improvement Criteria 1 There is measures taken for protecting species and their habitats has been

recommended by HCV consultant, however the implementation is not consistent with the recommendation itself

5.2.1

2 Vehicles were not identified as source of GHG emissions

5.4

Roundtable on Sustainable Palm OilLabuhan Haji Estate, Bandar Selamat Estate, and Sei Dadap Estate)...

Documents

Transcript of Roundtable on Sustainable Palm OilLabuhan Haji Estate, Bandar Selamat Estate, and Sei Dadap Estate)...