RSPO PRINCIPLES & CRITERIA PUBLIC SUMMARY REPORT MAIN ASSESSMENT. REKA HALUS PPB Oil Palms Berhad 2013

Transcription

1 RSPO PRINCIPLES & CRITERIA PUBLIC SUMMARY REPORT MAIN ASSESSMENT Malaysia REKA HALUS PPB Oil Palms Berhad 2013 Report prepared by: Simon Selvaraj (Lead Assessor) Certification decision by: Nurhadi (Certifier) Certifying Office 150-A, 1st Floor, Persiaran Raja Muda Musa, Off Jalan Sg Bertih, Teluk Gadong, Klang, Selangor, Malaysia Control Union Certifications Control Union Certifications is a member of the Control Union World Group - an international inspection and certification body. CUC performs assessments and certification in many agricultural based fields such as FSC, RSPO, and Organic production, Sustainable Textile Production, Organic Exchange, GLOBALGAP, HACCP, BRC, GMP and GTP. CUC is accredited by the Dutch Council of Accreditation (RVA) on the European quality standard EN for the inspection and certification of CUC Organic program (according to the EU regulation 2092/91) and GLOBALGAP program. When requested a copy of the accreditation certificate can be obtained from CUC. Control Union (Malaysia) Sdn Bhd is a registered affiliate member of RSPO and is a private limited company owned by the Control Union World Group based in Malaysia. Control Union (Malaysia) Sdn Bhd is authorized to conduct and issue certification on behalf of RSPO and Control Union Certifications. RSPO Membership Number RSPO Approval Date 12/01/2006 Affiliate Membership RSPOPC-SUM-REPORT.F01 OCT2013 Page 1 of 31

2 Table of Contents PART 1: SCOPE OF THE CERTIFICATION ASSESSMENT AUDIT COMPANY AND CONTACT DETAILS RSPO MEMBERSHIP & CERTIFICATION DETAILS MAIN SURVEILLANCE ASSESSMENT DETAILS ASSESSMENT TYPE LOCATION OF THE PALM OIL MILL PALM OIL MILL OUTPUT AND APPROXIMATE TONNAGES CERTIFIED GENERAL DESCRIPTION OF SUPPLY BASE Location of the Supply Base Statistics of the Supply Base and Estimated Tonnes of FFB produced per year Conservation and HCV Area (Ha) Percentage of Planted Oil Palm by different Age Ranges Calculation of the Number of Production Units (N) to Sample for the Mill PROGRESS OF ASSOCIATED SMALLHOLDERS OR OUT-GROWERS, IF APPLICABLE TO THIS ASSESSMENT LOCATION MAP FOR THIS CERTIFICATION UNIT (SEE APPENDIX 1)... 6 PART 2: PARTIAL CERTIFICATION MANAGEMENT STRUCTURE NON-COMPLIANCE IDENTIFIED WITH 2.1 ABOVE SUMMARY OF THE TIME BOUND PLAN UN-CERTIFIED UNITS OR HOLDINGS SUMMARY OF THE FINDINGS FOR PARTIAL CERTIFICATION PARTIAL CERTIFICATION AUDIT AGENDA... 9 PART 3: AUDIT PROCESS ABOUT THE CERTIFICATION BODY AUDIT TEAM Qualifications of the Lead Auditor Qualifications of the Assessment Team AUDIT METHODOLOGY General Overview Assessment agenda for this Audit PART 4 ASSESSMENT FINDINGS LEAD ASSESSOR S SUMMARY AND RECOMMENDATION FOR CERTIFICATION SUMMARY OF THE FINDINGS BY PRINCIPLES AND CRITERIA Principle 1: Commitment to Transparency Principle 2: Compliance with Applicable Laws and Regulations Principle 3: Commitment to Long-Term Economic and Financial Viability Principle 4: Use of Appropriate Best Practices by Growers and Millers Principle 5: Environmental Responsibility and Conservation of Natural Resources and Biodiversity Principle 6: Responsible Consideration of Employees and of Individuals and Communities by Growers and Millers Principle 7: Responsible Development of New Plantings Principle 8: Commitment to Continuous Improvement in Key Areas of Activity NON-CONFORMITY RAISED DURING THIS AUDIT AND ANY FROM THE PREVIOUS YEAR, IF APPLICABLE Non-Conformities Identified during this Audit Non-Conformity Identified during the last ASA, not applicable for MA Non-were raised during the last audit as this is the Main Assessment Observations Raised During this Audit ISSUES THAT WERE RAISED DURING THE STAKEHOLDER CONSULTATION, IF ANY RSPOPC-SUM-REPORT.F01 OCT2013 Page 2 of 31

3 PART 5: RSPO SUPPLY CHAIN CERTIFICATION POM INCLUDED IN THE SCOPE OF THE AUDIT CONFIRMATION OF THE COMPANY S SUMMARY OF ANNUAL CERTIFIED VOLUME OF RSPO CERTIFIED PALM OIL AND PALM KERNEL OVER A SPECIFIED PERIOD SUMMARY REPORT INCLUDING A BRIEF DESCRIPTION OF THE SCOPE OF CERTIFICATION MONTHLY RECORDS OF CERTIFIED FFB, CPO AND PK SINCE THE LAST AUDIT RECORDS OF CERTIFIED CPO & PK SOLD UNDER GREENPLAM TO BUYERS SINCE THE LAST AUDIT, IF ANY RECORDS OF CERTIFIED CPO & PK SOLD UNDER UTZ ETRACE TO BUYERS SINCE THE LAST AUDIT, IF ANY NON-CONFORMITIES IDENTIFIED DURING THIS AUDIT DESCRIPTION OF THE ORGANIZATIONAL MANAGEMENT SYSTEMS FINAL CERTIFICATION DECISION BY CONTROL UNION FOR THE RSPO SCCS AUDIT OF THE POM PART 6: CERTIFIED ORGANISATION S ACKNOWLEDGEMENT OF INTERNAL RESPONSIBILITY DATE OF NEXT ASA DATE FOR CLOSURE OF NON-CONFORMITIES SIGNING BY THE CLIENT SIGNING BY THE LEAD AUDITOR SIGNING BY THE CERTIFIER PART 7: APPENDICIES APPENDIX 1: LOCATION MAP FOR THIS CERTIFICATION UNIT APPENDIX 2: LIST OF ABBREVIATIONS RSPOPC-SUM-REPORT.F01 OCT2013 Page 3 of 31

4 PART 1: SCOPE OF THE CERTIFICATION ASSESSMENT AUDIT 1.1 Company and Contact Details Company Name: PPB Oil Palms Berhad ( W) Business Address: 15th Floor Wisma Jerneh, No. 38 Jalan Sultan Ismail, Kuala Lumpur, Malaysia Contact Person: Mr. Simon Siburat Office Telephone: Web Site: - Other Certifications Held: ISCC 1.2 RSPO Membership & Certification Details RSPO Membership Number: (O) ( ) Registered Client Name: Wilmar International Certificate Number: C820693CU-RSPO Start Date Of Certificate: End Date Of Certificate: Date Of Original Certification: Scope: Certification of the Palm Oil Mill and Supply Bases Type Of Certification: Single site Duration Of Certificate: 5 Years from date of certification 1.3 Main Surveillance Assessment Details Dates Of This Audit: 13 th -14 th Dec 2013 Audit Number: Re- Main Assessment 1.4 Assessment Type This is a RSPO Principles &Criteria Compliance assessment of the palm oil mill and its respective supply bases as listed in this report below. 1.5 Location of the Palm Oil Mill Name Mill Palm Oil Mill Capacity Location GPS Reference (POM) MT/Hour Address Longitude Latitude Reka Halus Palm KM87, Jalan Sandakan-Telupid, E N 30 Oil Mill Sandakan, Sabah, Malaysia RSPOPC-SUM-REPORT.F01 OCT2013 Page 4 of 31

5 1.6 Palm Oil Mill Output and Approximate Tonnages Certified Figures below are from: Only from certified supply bases (Y/N). YES Combining certified with uncertified supply bases (Y/N). NO If the Mill is receiving FFB from uncertified supply bases outside the audit scope, such uncertified sources is highlighted under the following sections as seen applicable: a. PART 1, Section 1.7 General Description of Supply Base, b. PART 2: Partial Certification, Section 2.4 Uncertified Units or Holdings, c. PART 5: RSPO Supply Chain Certification of this report Projected 12 Months (MT) Projected Production from the Actual Production for this Audit Year Forecast Certified in this Report last 12 Months (MT) Dec 2012 Nov 2013 (MT) Oct 2013 Sept 2014 FFB CPO PK FFB CPO PK FFB CPO PK 93,031 20,983 4,932 92, , ,600 17,556 4, General Description of Supply Base Reka Halus Palm Oil Mill consists of 1 supply base, namely Reka Halus estate; the details of the supply base are listed in table below Location of the Supply Base Oil Palm OPP Plantation Location GPS reference Area Summary (Ha) Name Address Longitude Latitude Total Mature Reka Halus KM87, Jalan Sandakan ' 5 45' 5, , OPP 01 Estate Telupid, Sandakan, Sabah, Malaysia " E " N TOTAL 5, , Statistics of the Supply Base and Estimated Tonnes of FFB produced per year OPP Oil Palm Plantation Estimated FFB/Year (MT) Planting Years Cycle (Years) OPP 01 Reka Halus Estate 83, TOTAL 83, Conservation and HCV Area (Ha) OPP Oil Palm Plantation Conservation Area (Ha) HCV Area (Ha) * HCV part of Conservation OPP 01 Reka Halus Estate Yes TOTAL * Indicate if HCV area is part of the Conservation Area. If the HCV area is part of the Conservation Area, then YES otherwise, No RSPOPC-SUM-REPORT.F01 OCT2013 Page 5 of 31

6 1.7.4 Percentage of Planted Oil Palm by different Age Ranges Planting Years by 5 year Ranges OPP Total 2015 OPP 1 2, (78.37%) 3.32 (0.09%) (3.96%) (17.58%) - - 3, (100%) Calculation of the Number of Production Units (N) to Sample for the Mill N = 0.8 Y, where Y is the number of units, with the result always to be rounded up to the next whole integer. Where only a sample of the supply base is assessed, units not previously assessed, or assessed earlier in the certification program, are to be preferred over those more recently assessed For the Mill, how many units make up the production base? Owned estates (Y) N = 0.8 Y Smallholders (Z) N = 0.8 Z Explanation as to the selection of estates sampled Only 1 supply base. 1.8 Progress of associated Smallholders or Out-growers, if applicable to this assessment Progress of associated Smallholders or Out-growers towards Compliance with relevant Standards - should be in accordance to the 3 year implementation plan, if applicable to this assessment No smallholder supplying FFB to this mill. 1.9 Location Map for this Certification Unit (See Appendix 1) RSPOPC-SUM-REPORT.F01 OCT2013 Page 6 of 31

7 PART 2: PARTIAL CERTIFICATION The rules for partial certification allow organizations that have a majority holding in and / or management control of more than one autonomous company growing oil palm to certify individual management units and / or subsidiary companies subject to certain rules. 2.1 Management Structure Section Criteria Yes/No If Yes If No Is the certified operation (POM and supply base as No Section 2 is Go to detailed above) a stand-alone operation and there are no other plantations or mills owned by the same company? N/A Is the certified operation part of a simple structure of Yes Go to Go to operations owned by one company? Are there statements of the ultimate controlling shareholders and directors in the managing agency company/companies: N/A Go to Go to a. Explaining the legal relationship and the management arrangements with the subsidiary companies and / or with any operating groups? b. A statement of commitment to complying with the N/A Go to 2.4 Go to spirit of the RSPO for all companies and subsidiaries involved with the growing of oil palm and for the production of palm oil? Is there a time bound plan in place for all subsidiaries, Yes Go to estates and palm oil mills? Is the parent company or one of its majority owned and / or managed subsidiaries a member of RSPO. Yes 2.2 Non-compliance Identified with 2.1 Above Section Non-compliance findings NC raised Category There is no explanation as to the company s structure and therefore it - Major Is not possible to conduct an effective audit against the rules for partial certification There is no statement of commitment to complying with the spirit of - Major the RSPO for all companies within the company structure There is no time bound plan in place for the certification for all - Major subsidiaries, estates and mills No applicable membership of the RSPO. - Major 2.3 Summary of the Time Bound Plan Section Requirement Findings and any action required Does the plan include all subsidiaries, Yes, all PPB subsidiaries. estates and mills? Is the time bound plan challenging? Age of plantations. Not Applicable as all the Palm Oil Mill & Estate under PPB Oil Palm subsidiaries had been RSPO certified. Location. Mill development. Infrastructure. Compliance with applicable law Have there been any changes since the last audit? Are they justified? No Changes. RSPOPC-SUM-REPORT.F01 OCT2013 Page 7 of 31

8 Section Requirement Findings and any action required If there have been changes, what N/A-refer circumstances have occurred? Have there been any stakeholder comments? No stakeholder comments received for the inspected units Have there been any newly acquired No as per the time of audit. subsidiaries? Have there been any isolated lapses in N/A refer the implementation of the plan? Has there been any systematic failure N/A refer to proceed with the implementation of the plan? General statement as to progress made since the last audit? N/A refer Un-Certified Units or Holdings NOTE: Companies may demonstrate compliance by clear evidence of a self-audit (i.e. an internal audit for all subsidiaries, estates and Palm Oil Mills) Section Requirement Findings and any action required Did the company conduct an internal N/A no uncertified units under PPB. audit? If so, has a positive assurance statement been produced? No replacement after dates defined in N/A no uncertified units under PPB. NIs Criterion 7.3 of: Primary forest. Any area identified as containing High Conservation Values (HCVs). Any area required to maintain or enhance HCVs in accordance with RSPO criterion Any new plantings since January 1 st N/A no uncertified units under PPB must comply with the RSPO New Plantings Procedure Any Land conflicts are being resolved N/A no uncertified units under PPB. through a mutually agreed process, e.g. RSPO Grievance procedure or Dispute Settlement Facility, in accordance with RSPO criteria 6.4, 7.5 and Any Labor disputes are being resolved N/A no uncertified units under PPB. through a mutually agreed process, in accordance with RSPO criterion Any Legal non-compliance is being resolved in accordance with the legal requirements, with reference to RSPO criteria 2.1 and 2.2. N/A no uncertified units under PPB. RSPOPC-SUM-REPORT.F01 OCT2013 Page 8 of 31

9 With reference to time bound plan, the following issues were reviewed openly with the Control Union audit team during the assessment and which may be in conflict with the rules for partial certification, if applicable Name of Mill or Plantation *Area of concern (See examples below) - - Include any known concerns, media reports and major issues both present and from the past covering, for example: Replacement of primary forest or any area containing HCV s since November Evidence of non-compliance with the law Legal issues Compensation payments Social relations Burning Labor disputes 2.5 Summary of the findings for Partial Certification The audit team assessed compliance with the above requirements during this audit. Failure to address any noncompliance identified may lead to certification suspension. All the subsidiaries under PPB has been certified and no new acquisition. 2.6 Partial Certification Audit Agenda Date Location Agenda RSPOPC-SUM-REPORT.F01 OCT2013 Page 9 of 31

10 PART 3: AUDIT PROCESS 3.1 About the Certification Body Control Union Certifications is a member of the Control Union World Group an international inspection and certification body. CUC performs Audits and certification in many agricultural based fields such as FSC, RSPO, and Organic production, Sustainable Textile Production, Organic Exchange, GLOBALGAP, HACCP, BRC, GMP and GTP. CUC is accredited by the Dutch Council of Accreditation (RVA) on the European quality standard EN for the inspection and certification of CUC Organic program (according to the EU regulation 2092/91) and EUREPGAP program. When requested a copy of the accreditation certificate can be obtained from CUC. Control Union (Malaysia) Sdn Bhd is a registered affiliate member of RSPO and is a private limited company owned by the Control Union World Group based in Malaysia. Control Union (Malaysia) Sdn Bhd is authorized to conduct and issue certification on behalf of RSPO and Control Union Certifications. 3.2 Audit Team Lead auditor: Team member 1: Team member 2: Team member 3: Team member 4: Mr. Simon Selvaraj Ms. Asidartorn Mr. Selvanathan Mr. Jamalul Arif Mr. Hangga Qualifications of the Lead Auditor Requirement A minimum of post high school (post-secondary school) training in either agriculture/forestry, environmental science or social sciences; At least 5 years professional experience in area of work relevant to the assessment (e.g., palm oil management; agriculture/forestry; ecology; social science); Training in the practical application of the RSPO criteria, and RSPO certification systems; Qualifications Post graduate qualification in agriculture with more than 5 years working experience in plantation. More than 5 years working experience in plantation. Involved in RSPO auditing since November Fully trained in similar agriculture certification programs such as RSPO SCCS, Global Gap, ISCC and GMP. Involved in RSPO assessment since November Member of CUC RSPO audit team. Involved in audits conducted in Malaysia and Indonesia. Completed ISO 9001:2008 lead auditor course in July Successfully completed RSPO Lead Auditor Course Post graduate qualification in agriculture with more than 5 years working experience in plantation. Involved in RSPO assessment since November Member of CUC RSPO audit team. Involved in audits conducted in Malaysia and Indonesia. Successfully completion of an ISO 9000:19011 lead auditors course; Training in the practical application of RSPO certification systems. A supervised period of training in practical auditing against the RSPO criteria or similar sustainability standards, with a minimum of 15 days audit experience and at least 3 audits at different organizations. RSPO endorsed lead auditors course. Completed RSPO Lead Auditor training in 2011 Signed code of conduct. Signed with CUC General knowledge of: RSPO P&C standards. Sound knowledge of the P&Cs, Nis and Local CUC organizational structure. CUC quality systems. Interpretations. Sound understanding and has prepared training documents for others. Sound understanding and has prepared training RSPOPC-SUM-REPORT.F01 OCT2013 Page 10 of 31

11 documents for others. Lead auditor role. ISO Prepared an ISO training course and conducts internal training on auditing techniques. Report writing. Extensive experience in report writing. Stakeholder consultation. The process and need for this is fully understood. Certification decision process. Full understanding. RSPO SCCS program manual. Full understanding. CUC filing systems. Full understanding. Correct use of RSPO trademarks. Full understanding. History and objectives of RSPO. Full understanding. CV available. Upon request. Completion of CUC RSPO lead auditor training. Completed & Passed RSPO Lead Auditor training in Qualifications of the Assessment Team RSPO Requirement Team Member Name Qualifications Fluent in main local languages and English. Mr. Hangga Prihatmaja Iamsirisanthong Asidarton Selvanathan Mohd. Jamalul Arif Fluent in local and English Fluent in English Fluent in local and English Fluent in local and English Field working experience in the palm oil sector, or a demonstrable equivalent. Good agricultural practices (GAP), integrated pest management (IPM), pesticide and fertilizer use. Health and Safety auditing on the farm and in processing facilities. (For example OHSAS or occupational. Health and safety assurance system). Mr. Hangga Prihatmaja Graduate qualification in Forestry and involved in FSC & RSPO auditing since Iamsirisanthong Asidarton Global gap experience and agriculture background Selvanathan SA 8000 advanced auditor, QMS, EMS & OHSAS Lead Auditor, Working experience in oil palm plantation. Jamal Involved in RSPO auditing since November Auditing experience in GMP and Globalgap. Iamsirisanthong Asidarton Global gap experience and agriculture background Selvanathan SA 8000 advanced auditor, QMS, EMS & OHSAS Lead Auditor, Working experience in oil palm plantation. Jamal Involved in RSPO auditing since November Auditing experience in GMP and Globalgap. Iamsirisanthong Asidarton Complete lead auditor ISO Selvanathan SA 8000 advanced auditor, QMS, EMS & OHSAS Lead Auditor, Working experience in oil palm plantation. Workers welfare issues and social auditing experience. (For Iamsirisangthong Asidatorn Involved in group audit in organic farming since Global GAP in 2011 and RSPO in early 2012 RSPOPC-SUM-REPORT.F01 OCT2013 Page 11 of 31

12 example with SA8000 or related social or ethical accountability codes). Selvanathan SA 8000 advanced auditor, QMS, EMS & OHSAS Lead Auditor, Working experience in oil palm plantation. Environmental and ecological auditing. (For example experience with organic agriculture, ISO or environmental management systems). Iamsirisantong Asidarton Complete lead auditor Mr. Hangga Prihatmaja Selvanathan Graduate qualification in Forestry and involved in FSC & RSPO auditing since SA 8000 advanced auditor, QMS, EMS & OHSAS Lead Auditor, Working experience in oil palm plantation. Economic issues. Selvanathan SA 8000 advanced auditor, QMS, EMS & OHSAS Lead Auditor, Working experience in oil palm plantation. 3.3 Audit Methodology General Overview The Audit was carried out in conformity with the procedures as laid down in the CUC Procedure Manual and the RSPO Program Manual for the auditors and Certifier. During the Audit the qualified CUC auditors used the RSPO standard as endorsed for the country in which the audit took place and recorded their findings. Workers and local communities were interviewed and evidence sought to confirm ongoing compliance to include: Chemical stores. Storage, MSDS leaflets, Herbicide mixing areas, PPE, Ventilation, Security. Field inspections. Herbicide application programs. Harvesting sites and efficiency. Fertilizing operations. SOP s. Soil maps. Land preparation. Ground cover. IPM. First aiders and boxes. Ground cover. Soil erosion. Field observations of all operations. Worker interviews. OSH. Sexual, religious, racial harassment. Pay and contracts. Child labor. First aid. Awareness. Re-planting sites. Zero burn. HCV s. Identification. Management plans. Environmental Impact Assessments. Implementation. Riparian zones. Width. Current and future management. Non maintenance regimes. Water management. Water courses. Water monitoring. Road maintenance. Run off. Social amenities. Social Impact Audits. Local communities. Contributions made. Employment opportunities. Social impacts. Complaints procedures. Workshops. Oil traps. Safe working environment. PPE. Diesel tanks. Environmental waste management. Line sites. Interviews with householders. Inspection of water discharge points. Water improvement plans. Waste disposal. Documentation review. The Palm Oil Mill audit verification included the following activities: Mill and workshop inspections. Documentation review & worker interviews. Mill. SOP s. Safe working environment. Gen sets. Walk ways. Signs. EFB. POME treatment. Emissions. Mass balance. Diesel tanks. PPE. Fire extinguishers. First aiders and boxes. Fuel and water usage. OSH. Training. Management structure. First aiders. Full document review. Completion of the checklist. Review and documentation of evidence. All aspects of RSPO P&C s applicable. Worker interviews. OSH. Sexual, religious, racial harassment. Pay and contracts. Compliance against the RSPO SCCS certification scheme. RSPOPC-SUM-REPORT.F01 OCT2013 Page 12 of 31

13 Verification: Verification of implementation was done through field observations, workshop and chemical store inspections, worker and community interviews and mill inspections as summarized above Assessment agenda for this Audit Date Location Main activities 13/12/2013 Reka Halus Mill Opening meeting- Chaired by the audit team leader Introduction by team leader Presentation by respective managers Presentation of Palm Oil Mill source of FFB by respective managers Reka Halus Mill Supply Chain Certification Assessment of the POM (RSPO SCCS) Mill inspection Workshops Stores POM application Document review Auditors: Simon, Hangga, Selva, Jamal & Asidatorn 14/12/2013 Reka Halus Field operations. Estate Worker interviews Chemical stores Workshops Housing Medical Schools Local communities Environmental Auditors: Simon, Hangga, Selva, Jamal & Asidatorn Reka Halus am - Stakeholder Meeting Estate 18/12/2013 Sapi Mill 08.00am 14.00pm - Preparation for closing meeting Additional field visits and meetings with managers as necessary 15.00pm - Closing meeting- Centralized. Chaired by the audit team leader Welcome and introduction by the team leader Presentation of findings by the audit team Questions and answers Final summary by team leader End of assessment RSPOPC-SUM-REPORT.F01 OCT2013 Page 13 of 31

14 PART 4 ASSESSMENT FINDINGS 4.1 Lead Assessor s Summary and Recommendation for Certification The mill and supply base are as per the above table 1.5 and visited was assessed at field, office, facilities, stores and document review carried out in accordance to the RSPO principles and criteria. Common systems were identified and specific evidence was recorded for individual estate and mill. Interviews with Estate Managers, Mill Manager, and members of workers representatives took place in both formal and informal environments and worker interviews were conducted in all estates and in the mill. Subsequent to the stakeholders interview, the surrounding communities were visited so as to capture more feedback from the stakeholders. There were no complaints received during the field assessment and during interview with the external stakeholders. Up to the time of writing this report, there were neither feedbacks nor comments received from the other external stakeholders and community leaders. The mill is fully verified for RSPO SCCS system verification and found to be in full compliance. Refer the whole of Part 5. It is therefore the recommendation of the lead assessor that: Signed: A new certificate of compliance to be award Name: Simon Selvaraj Date: 18 March Summary of the findings by Principles and Criteria Over the 5 year period of the life of the certificate, there will be 4 annual surveillance audits Identified Non-Conformities and noteworthy Positive and Negative Observations. The RSPO require that this report contain findings by each principle and some example criteria. Please see table below. Principle 1: Commitment to Transparency Criterion by Audit The company has all the copies of requests & responses which are more to internal request and local authority bodies. Such records are kept and available for viewing. As a whole, the business units have common system Summary with parent company PPB on publicly available documents which have been listed in their SOP. However, as per the requirement, the details of complaints & grievances are not publicly available but need to request. (Refer to 1.2 below). MA 1.1 The company in overall has revised its SOP on request & response procedures by including revised form to be hand over to the party requesting any information with regards the company s operation and its system. The form is used for all party regardless the information requested. For example, request to take effluent sampling by DOE will need to fill in the request form and RSPOPC-SUM-REPORT.F01 OCT2013 Page 14 of 31

15 further will be divert to DOE log book for the outcome. All previous records for the past 5 years available. The review of records confirmed that any requests are attended promptly and actions propose and action taken is recorded with evidence and acknowledgement of the requesting party. MA 1.2 The company holds all the 7 types of documents that are available to the interested parties upon request. Principle 2: Compliance with Applicable Laws and Regulations Criterion by Audit Summary The audit team confirmed that the inspected records of the business units have maintained legal compliance with statutory requirements such as Employment Act, Employees Provident Fund Act 1991 Estates Hospital Assistants (Registration) Act 1965, Environment Quality Act 1974, Immigration Act 1959, Workers minimum Standards of Housing and Amenities Act 1990, Occupational Safety Health Act 1994, Factories & Machineries Act 1967 and so on. The mill is within the estates boundary and an estate holds valid land titles. The boundaries are well demarcated and visible. An interview with local community confirms that there are no land disputes. MA 2.1 The mill has a Law Books Register which includes The Document name, The Regulatory Authority / Summary of the law, The Requirements and Remarks. A list of all applicable licences is prepared to show expiry dates for all licences covering all mill operations. The licences are all valid and copies are included in the file. Work permits for foreign workers employed by PPB are checked and verified. The estates have Law book register for all the requirements for local, national and regional laws and regulations. These are listed together with law name Regulatory authority / summary, requirements and remark. The PPB Head Office will update the Executive in Charge of all operating centres through circulars and meetings. Both the Estate and Mill Managers are the officials responsible for all compliance monitoring. Evidence of compliance was noted during the interview as the person in charge was well informed and updated on the compliance requirements for the various relevant laws and regulations. MA 2.2 The company holds all the land titles for all estates visited and copy of each land title is kept by the individual operating unit. The site visit and review of land titles confirms that the validity of the land titles and terms for use is consistent with the land title for agriculture. Most of the estates boundaries are adjacent with other plantation companies and forest area. Field inspection on all estates confirmed that the legal boundary stones are well maintained to identify the boundaries which are adjacent with forest and other plantation. Where legal boundary stone was unable to locate, the company had engaged a surveyor to survey the land and pole has been erected and maintained. MA 2.3 The mill & estates of these complexes are all on legal land title. Currently no disputed land and therefore there has no negotiated agreements in relation to the customary rights for the past 5 years. Principle 3: Commitment to Long-Term Economic and Financial Viability Criterion by Audit Summary PPB head quarter has continued funding the mill and estates for improvements and implementing sustainability. The annual budget of the business units has detail breakdown as per below findings. MA 3.1 The annual budget for Reka Halus Palm Oil Mill is available. The annual budget details the OER and KER of the mill, its revenue and expenditures and breakdown of costs. The 2 years financial projection for the mill for financial year 2014/2015 and 2015/2016 is available in the file OER and Budget Projection. RSPOPC-SUM-REPORT.F01 OCT2013 Page 15 of 31

16 Principle 4: Use of Appropriate Best Practices by Growers and Millers Criterion by Audit The company best agricultural practice ensures the management systems are always being monitored by having regular internal audits by the sustainable team. All the respective estates manager and mill manager, including the top Summary management and agronomist involved in this process of evaluation. The mill has kept the OER within the trend from the past years. The estates have continually implementing best agricultural practices together integrated pest management system. MA 4.1 PPB has developed best practice SOPs that are for all of its operations from land clearing through production and processing of palm oil. The developed SOPs have included environmental management system. Work instructions are posted at the relevant work stations. Records are being monitored by the respective mill & estate manager through implemented internal process that check and report the outcome. The records are available at the respective operating units. The daily operating records are well maintained for the past 12 months and other sustainable records are retained from last 5 years. MA 4.2 PPB s R&D has a research station which carries out the sampling of leaf tissue and soils and analysis. Data of the nutrient analysis & visual inspection is recorded in their recommendation of fertilizers and trend record for 5 years is kept by the station and information s are retrievable. Audit team has sighted R&D report which includes the leaf analysis result, soil analysis, recommendation to apply fertilizers for each estate. EFB generated from the mill is sent to the estates to be utilized for mulching. The EFB records generated from mill was verified against the EFB delivered amount to the respective estates. Thus, the areas of applied EFB were monitored through the nutrient analysis by the R&D Department. MA 4.3 Topographic map and soil map surveyed were used to identify erosion risk area. Soil erosion control includes terracing of slopes and maintenance of ground cover crop was practiced. Implementation of pruned frond stacking, spraying of palm circles, planting of ground cover crop were sighted during field inspection. Road maintenance programme has been established at each operating units and budget has been allocated. The yearly programme includes types of maintenance, target of completion with planned and realized date. During field inspection, it was observed that the roads are well maintained. There are no peat soils and verified through soil analysis report. The supply bases are largely covered by mudstone, basic igneous rocks and sandstones and fractions of other series of soils. MA 4.4 The mill has constructed pollution prevention devices at workshops, chemicals used areas and POME discharge points to protect water quality. Monitoring records shows mill effluent discharge complied with the local requirement for the past 1 year. The estates which has river passing through have implemented riparian buffer zones. The buffer zones are marked on the palm and only circle spraying is permitted. The harvesting will continue until replanting. Most of the land is flat and drainages are manmade. No natural stream passing through the estates. The estates have sampling points mapped for upstream and downstream to monitor the pollution level. Such analysis is carried out on monthly basis and summaries of the results are produced. Review of the analysis and records of the previous 12 months confirms that there is no significant difference. The estates record the rainfall and data is used for water management which includes the planning for replanting, manuring and forecasting of crops. The RSPOPC-SUM-REPORT.F01 OCT2013 Page 16 of 31

17 rainfall data for the past 10 years for both mill & estates showed that in this region the rainfall is as high as 2,400mm in average per year. The mill is using water that extracted from the river and further treated to process the FFB. Water usage is monitored on daily basis and approximately 1.03 ton of water is used to process 1 ton of FFB. Drainage into protected areas will be monitored through the upstream and downstream water sampling analysis and mill effluent is discharged after POME treatment and reduction of BOD as per local limit is monitored. MA 4.5 One of the best practices of the company includes IPM program where monitoring of pests & diseases were monitored and control measures are taken based on census records when necessary. Rat baits are used as control measure as rats are the major pests in these estates. The estates continue planting of beneficial plants such as Turnera subulata along the roadside. The estates monitor the effectiveness of the IPM techniques for controlling the targeted pests. The records are well maintained and retrievable since main assessments. Information on the locations where the baits are applied is recorded in the estates costing book. Pesticides were used to control other pest such as rhinoceros beetle especially during replanting. MA 4.6 Field and facility visits by the audit team confirmed that only approved chemicals were used. The stores inspection confirmed pesticides are stored safely meets the regulatory requirements by having ventilation, spill containment, separation and labelling of chemicals and security by kept locked by the assigned responsible staff. Shower, PPE washing area was provided for the sprayers. In the stores all the work instruction and MSDS are available in local language. Sign boards in illustrating pre-cautions for safe handling were sighted. Interviews with pesticide store keeper and workers confirmed that good understanding of safe working practices are being used. In addition, training records were checked for continuous monitoring. Annual program and medical check of the pesticide operators are in accordance with the CHRA requirement. Medical officer confirmed all pesticide workers are fit to work. Use of paraquat is eliminated and replaced with Glyphosate. Inspection of the stores and interviews with workers confirmed zero usage of paraquat. Chemicals used are in accordance of Pesticides Act. MA 4.7 OSH plans will be reviewed each year which includes safety targets, meetings and training. HIRARC on all activity of the mill and estates was reviewed on each year. Both mill and estates training records includes task instruction with trainer s name and attendee s signature. Sighted training plan and attendance records for Chemical handling, spraying Techniques and Safety Aspects. During mill inspection, the audit team sighted the workers using ear plugs and signage of noise area was noted. Noise mapping available in the mill. Overall, in both mill & estates provides appropriate PPE to all workers which includes safety boots, safety helmet, gloves, apron, safety goggles and masks. Records of PPE issuance for individual workers were sighted. Mill manager & Estate manager is the nominated OSH coordinator for their respective operating units. Minutes of safety meetings were sighted and meetings are conducted every 3 months where worker representatives, supervisor and staff have attended. The minutes include details on hazards identified, accidents, corrective action and progress. The emergency response plan has been revised according to the recent changes of task intensity and personnel. The emergency response plan has been posted on notice boards and work stations of the mill and estates. First aid kits are located at each store, workshops and at most locations in the mill. The first aid kits were checked and replenished. The supervisor in the RSPOPC-SUM-REPORT.F01 OCT2013 Page 17 of 31

18 field holds a set of first aid kit which will be assigned to him during morning muster ground and return it after work and kept in the office. Both mill & estates maintain the records of all accidents including investigation. The Lost Time Accident Rate shows variation over the past 5 years for all operating units. MA 4.8 The mill & estates have developed a training program for your year which includes work stations in the mill and each task in the estate. Trainings are conducted to improve or develop skills. The training records of each individual was sighted which records training information and trainer s name and followed by competency assessment of the trainee. Principle 5: Environmental Responsibility and Conservation of Natural Resources and Biodiversity Criterion by Audit Summary The mill improvement plan was given importance to reduce water usage and for the estates is to control through beneficial plants as stated in IPM above. Separation of waste has improved and more recycling method adopted. MA 5.1 Both mill & estates has identified Environmental Aspects & Impacts and being reviewed every year. This assessment is based on risk assessment identified from each process and activity of the mill and estates. The format used inclusive of points such as activities, types of operation, input, volume, output, impact and evaluation criteria. Based on the assessment conducted, a significant impact register list established with mitigation measures identified. Environmental improvement plan includes reducing water usage and maximizing recycling for the mill. MA 5.2 High Conservation Value / Conservation Area Management established. Short and long term HCV management plan available for erosion control measure, monitoring established riparian zones and demarcated boundaries. Field inspection confirmed estates have continually monitoring all the erected signage which prohibits illegal hunting and fishing. MA 5.3 The mill has identified the waste that contributed from offices, mill operations and engineering works such Schedule Waste; Spent Lubricant SW 305, Spent Wet Battery SW 102, Spent Filter SW 410, Used Leather Glove. There is sufficient waste collecting bins in the mill that enable employees to dispose the waste according to the label [glass, paper, plastic]. Both mill & estates maintain the scheduled waste records. This is being collected by a valid licensed collector. The residues such as fiber and shell are used for boilers and field inspection confirmed that EFB is sent to the estates for mulching as recycling. MA 5.4 The mill is not connected to the Malaysian electricity system. All energy is generated by the company itself via a boiler and gensets. Sighted the renewable energy analysis from Jan Nov 2013.Verifeid all equipment, genset, cars were calculated. Sighted the records for monitoring of fossil fuel in term of kwhr/li diesel used. MA 5.5 Field visit confirmed that there is no open burning being used for waste disposal during replanting and palms that felled and chipped were placed in trenches for decomposition. Site visit to planned operating units confirmed no fire is used for domestic waste disposal. MA 5.6 The assessment of polluting activities has been conducted and this is incorporated in the EIA. It covers: 1) The environmental aspects and impact of an activity or operation 2) The severity of the impact - normal, abnormal or emergency 3) Measures taken to mitigate the risks and impacts The monitoring and mitigation plan for all negative impacts are available and RSPOPC-SUM-REPORT.F01 OCT2013 Page 18 of 31

19 this is based on the requirements of the Department of Environment of Malaysia. Principle 6: Responsible Consideration of Employees and of Individuals and Communities by Growers and Millers Criterion by Audit Summary The sustainability team continuously visits the mill & estates stakeholders for review of social issues. Interviews with stakeholders confirmed that the internal & external consultation did take place. Stakeholders did not raise any issues relating to the company and appeared to have a good relationship. MA 6.1 A document for Social Impact Assessment Report is available. Performed by Petra Meekers [ RSPO certified Assessor ] dated It is evidence that the assessment has been done with the participation of affected parties. SIA Management Plan has been derived for With 15 activities Ex: Nomination of personnel, Village Visits Explaining of contract etc. Sighted recommendations from Ms Petra`s work; were identified and carried out in 2009 / Also on 2012 / However, the review of present social impact activities is not evident and issues like minimum wage, 5 years RSPO implementation, Suluk incidents and Humana school activities were not included. Therefore, a minor NC is raised. Refer table 4.3.1, NC No: 01/2013 MA 6.2 RSPO 6.2 Consultation and Communication Procedure dated sighted for all operating units have updated their list of stakeholders. However, it was evaluated that the mechanism to derive or access various information through participation of various parties including disinterest community groups, NGOs, government, village leaders, ethnic groups, day to day workers is insufficient. Therefore, a minor NC is raised. Refer table 4.3.1, NC No: 02/2013.The weekly site meeting is the main platform for internal communication besides the display of memos on notice boards. Communication and consultation process is also communicated through training programs and the records with attendance lists were sighted. For external communication the management takes the effort to reach out to the community neighboring the estate during stakeholder meetings. List of stakeholder is also complete up to date for both mill and estate. MA 6.3 All complaints, grievances, consultations and negotiations are documented in a log book. Details of the nature of the complaints and its resolution are clearly spelt out. The respective Mill and estate managers are responsible for the handling of all consultation and negotiation with stakeholders. Complaint and Grievances record in Stakeholder Logbook was maintained. Action was taken by responsible person and will acknowledge the complainant. Complaints are mostly on housing repairs and no grievance registered as per this audit period. MA 6.4 PPB/RSPO 6.3 (2.2)/(1) Dispute and Grievance Procedure sighted.there were no negotiations concerning land disputes and compensation for loss of legal or customary rights to the land for all the estates and mill assessed. MA 6.5 Pay and conditions are documented in the appointment letter of the staff and workers. Interview with both mill & estates staff and workers and with both male and female confirmed that they understand the terms and conditions of their employment. The company provides a good standard of housing for workers and staff. Constructing of new house and plan available. Most of the complaints on housing repairs have been attended to and action taken to repair with a timeline depending on the severity of the repairs. Immediate action taken to repair or relocate the family to another house if the repair is significantly RSPOPC-SUM-REPORT.F01 OCT2013 Page 19 of 31

20 serious. Housing meets the requirement and well maintained at all locations. Clinics continue to provide the medical assistance at company s cost. Water and electricity are provided. Drinking water analysis result available and no E- coli or Coliform detected. Worship places are well maintained and donations are still being provided. Crèche are available with caretaker and basic facilities are provided with a small playground. MA 6.6 Interviews with workers confirmed that meetings are held with worker representatives and the company upholds the freedom to form and join trade unions through established company s policy. The policy clearly spell out the right of freedom association of employees is displayed in every estate s office and in the mill. MA 6.7 The company has created and implemented minimum age policy and no child labor noted during this audit period. Interviews with workers and staff confirmed that there is no child labor employed neither in estates nor in the mil. MA 6.8 An Equal Opportunities policy has been established by the company, communicated, displayed and publically available at all assessed operation for both mill and estate. There has been no evidence of discrimination of workers and staff based on gender, nationality, age, race or religion. MA 6.9 The company has a policy regarding sexual harassment and violence and this has been communicated to the staff and workers. Workers that were interviewed are aware of this policy. The workers that were interviewed confirmed that there were no incidents of sexual harassment and violence in both the estates and mill. This was also verified through the document review of monthly checklist filled up by women workers. A grievance mechanism is also in place and this is clearly stated in the flow chart Handling of Sexual Harassment. Allegations will be channeled to the members of the Gender Committee and this information will be passed to the chairperson of the Gender Committee. The chairperson of the Gender Committee will inform the manager of the operating unit and an investigation will be launched. A representative from the health and safety department may be called in to assist with the investigation. The Gender Committee also conducts regular meetings with the company and minutes of meeting were sighted. MA 6.10 The FFB pricing is in accordance with the MPOB pricing system. Contractors and suppliers had good relationship with the company and confirmed that the payments are made in time. MA 6.11 Each operating unit planned to contribute to their own local communities. Current infrastructure and services are well maintained. They also contribute donations and assistance to local schools and worship places. Following are samples: Contributions for the education of school going children Contributions to the family of an employee in the event of a death of employee Donations to the local kindergarten Principle 7: Responsible Development of New Plantings Criterion by There are no new plantings or expansion made or planned for the estates Summary Audit stated in above table and the figure denotes re-planting. Principle 8: Commitment to Continuous Improvement in Key Areas of Activity Criterion by During this re-assessment, it was noted that the company has improved Audit significantly by demonstrating the compliance towards the requirements of Summary whole RSPO Principle & Criteria apart from the area concerned and where non-conformity were issued. It was necessary to provide some findings below in point form to be precise on the continuous improvement plan and the RSPOPC-SUM-REPORT.F01 OCT2013 Page 20 of 31

21 achievement since first main assessment. In overall, the audit team satisfies with their continuous improvement plan and has subsequently checked in all the units visited. MA 8.1 The Palm Oil Mill established a Achievement, On-going project and future planning year Pollution & Environmental impact (sterilizer chamber, fibre cyclone) / to install new sterilizer chamber and new fibre cyclone to mitigate and improve water and air pollution. As for the estate, check list for Continuous Improvement Plan 2013 that divided into Pesticides, environment, waste & recycling, pollution prevention plan, estate input, energy, production, water, health and safety. Totally 42 sub programs of improvement established and monitored with updated record. Reviewed the Register of Chemical Hazardous to Health DOSH Registration No. DOSH/CHRA/LHD/MAR109, JKKP HIE 127/171-2(100) that also captured in the CHRA that registered of a few types of chemicals use, have no class I will follow pesticide ACT. As for environmental, planting beneficial plants, Turnera Subulata along main access roads. The other improvement plan is planting jungle tree along riparian zone. Observed the records and log book that consisted of tree types, planted date, and balance. There is Water Management Plan developed at the Mill on 05/01/2012. The program inclusive of monitoring of Water usage in the mill objective and target has been set to reduce domestic water consumption by 2% or 300L/head in the year There is only monthly data captured the quantity of usage, still pending to capture the improvement status. 3R plan established in 2012 for reduce, reuse, recycle. Summary of mills waste. List of mill waste" and "By product summary and management" handling method and control measure dated Decanter cake and EFB are being sent to estates for mulching that is a part of continuous improvement program on fertilizer usage at estates. Air pollution monitored very month, record of Nov 2013 Waste & Pollution prevention plan - identification, prevention, mitigation and improvement plan document no.: SMPOM/PPP/REV.4,2013 include mill activities: FFB grading & loading ramp, capstan, threshing & press, oil room, kernel plant, engine room, POME, land irrigation area, general store, schedule waste store, laboratory, workshop, office, CPOPK storage & despatch area, labour line. Source of waste and pollution, possible waste / pollution, prevention procedure and mitigation measure, progress and improvement, person in charge identified. POME to regularly check on the discharge in system to ensure no spillage or waste into surrounding and fully use as manure which is supplement for organic fertilizer. Community development plan, achievement for 2012 and proposed for current year 2013: RM 3,392,043 for external community services, improvement worker amenities, improvement of education program & children welfare, training program, administration of workers, safety and health services, sport and recreation, donation. 4.3 Non-conformity Raised During this Audit and Any from the Previous Year, if applicable This section gives an over view of new or revised non-conformities raised during this audit and of action taken to close out non-conformities raised during the previous audits, if applicable If a minor-non-conformity raised at the last audit, is not closed out, then this will be raised to Major status and the company given 60 days to close this out. The NC number is comprised of 2 parts to include the year in which the NC was raised as well as a sequential number. RSPOPC-SUM-REPORT.F01 OCT2013 Page 21 of 31

22 4.3.1 Non-Conformities Identified during this Audit The following NC s were raised for this audit. NON CONFORMITY REPORT. NC number: 01/2013 Client name: PBB Oil Palm Berhad [ REKA HALUS POM & ESTATE ] Date raised: 14 th Dec 2013 Major or Minor: Minor Raised by: Simon Aspect of standard: A timetable with responsibilities for mitigation and monitoring reviewed and updated as necessary. Evidence of non-conformity: Review of present social impact activities is not evident and issues like minimum wage, 5 years RSPO implementation, Suluk incidents and Humana school activities were not included. Auditors signature: Date: 14 th Dec 2013 NON CONFORMITY REPORT. NC number: 02/2013 Client name: PBB Oil Palm Berhad [ REKA HALUS POM & ESTATE ] Date raised: 14 th Dec 2013 Major or Minor: Minor Raised by: Simon Aspect of standard: Documented consultation and communication procedures Evidence of non-conformity: RSPO 6.2 Consultation and Communication Procedure dated sighted. However, it was evaluated that the mechanism to derive or access various information through participation of various parties including disinterest community groups, NGOs, government, village leaders, ethnic groups, day to day workers is insufficient. Auditors signature: Date: 14 th Dec Non-Conformity Identified during the last ASA, not applicable for MA Non-were raised during the last audit as this is the Main Assessment Observations Raised During this Audit 4.4 Issues that were raised during the Stakeholder Consultation, if any Stakeholders were either informed by the client or by Control Union via the RSPO website. For Main Assessments, a 30 day Stakeholder consultation announcement is published on the RSPO website prior to the audit. The same announcement is circulated by the client prior to the audit For subsequent Annual Assessments, it is based on stakeholders reading the approved public summary reports available on the RSPO website, the client s procedures in receiving on-going feedback or if feedback RSPOPC-SUM-REPORT.F01 OCT2013 Page 22 of 31

23 was sent directly to Control Union prior to an audit or thorough RSPO complaints procedures. During each assessment, the audit team will review the company s implemented procedures in receiving feedback and will execute field visits and interviews. Not limited to the following questions, any feedback received is reviewed and summarized in this summary report for either Part 2 Partial Certification or Part 4 Assessment Findings above or noted below, if applicable: 1. Do you have any remarks on the RSPO standard? 2. What is your relation with the applicant? 3. Are there any plantation or mill management practices that affect you? 4. Do you consider any management is in conflict with the RSPO principles and criteria? 5. Do you have any suggestions for management? 6. Are you aware of any HCV in the plantations or in adjacent land? 7. Are you aware of any endangered or rare species? 8. Are there any adverse (or positive) effects on local communities? 9. Additional comments? 11. Do you have any comments about the assessment team and would you like to meet with them? 12. Do you have any comments for the client s management of any other plantations? Subject raised Company response and Audit team findings proposed action to be taken Mr Bali Ryan - FFB grading fair - Good Positive comment Mr Faiz - Queue up long time; set weighbridge specially for tankers; another one for smallholder - Management will identify the weighbridge for tankers and smallholder use. Mr Ronald Tan - Payment on time - Good Positive comment Ms Jubi Rantau - If being inform; to accept FFB even late. Don t reject coz the FFB will get rotten Ms Melia Saiti - Voucher end of year helps - Management agrees some allowance will be given if informed. 24 hours still accepted for FFB unless it is totally rotten - Good Positive comment Ms Ngilin Intang - Pricing mechanism - Tonnage different; suspect adjustment Ms Musalina Peter - As smallholder thanks for helping road access / drainage [ Kebun En Juli; Kebun Puan Wilina ] - Will conduct quarterly Pricing Mechanism awareness to smallholders - Weekly Verification using showel as weight reference will be conducted - Good Positive comment RSPOPC-SUM-REPORT.F01 OCT2013 Page 23 of 31

24 - Waste to Sd Pandan Pandan; now no more - RSPO training & monitoring the smallholders for Good Practice - Safe & Health issue monitored - Grading; weight is being anggaran / projected ; counting also not telly - Grading of FFB; the quality of grading differs with different graders - Training for smallholders workers [ in a group ] is requested - Call for meeting; net reached to stakeholder; letter, use sms / / earlier info to them Mr Hamsa Herman - Road from gate to mill to have more maintenance Ms Patricia Meting - Has helped for road access - To come up with complaint & grievance procedure - GAP; needed; request for training Ms Istimawakesung - Fertilizer support; deduct monthly; Fertilizer Planning, Foliar / Soil Analysis requested. Mr Julio Paping - Canteen for contractor who stranded due to rain, offline etc Mr Justin Selamat - Quotation were answered and approved quickly - Canteen needed. Mr Peter Soo - Good - Good - Good - Management will monitor on this issue and re-training the graders - Monthly Grader Verification will be conducted to see the difference between graders - Accepted by Management, will be planned - Management will comply Positive comment Positive comment Positive comment Positive action Positive action Positive action Positive action - Is planned. Positive action - Good - Management will further train the smallholders in this procedure - Management noted; training will be assembled. - Management will sort with HQ on this issue; however the management personnel will personally will visit the smallholder and give free consultation. Positive comment Positive action Positive action Positive action - Budgeted already Positive action - Good Positive comment RSPOPC-SUM-REPORT.F01 OCT2013 Page 24 of 31

25 - Feedback of harvesting tool usage. Ms Ani Indang - FFB defected due to rain; request accept; with discount Positive comment: - Will feedback to him Positive action - Will be on case t case basis, need early info from smallholder. Positive action In overall, there is lot of positive issue was highlighted by the stakeholders during the meeting. Most of the stakeholders are satisfied comparing before PBB was implementing RSPO; there are tremendous improvements either from environmental, social and safety aspect. Information gathered from stakeholders at surrounding community such as: As smallholder thanks for helping road access / drainage [ Kebun En Juli; Kebun Puan Wilina ]; Waste to Sg Pandan Pandanis no more; RSPO training & monitoring the smallholders for Good Practice; Safe & Health issue monitored; Grading bunch weigh issues; Training for smallholders workers [ in a group ] are being looked upon positively. Contractor FFB, mention PBB environmental programme has been enhance since RSPO. Implementations of 20m buffer zone, conserve the forest and others practice get the full support from community. Dr Junaidi from BORA [NGO] said the management has already extended full help to the wildlife preservation Since 2009, PBB have revised the salary for all the workers into same rate. It was totally different with previous practise that female workers get less than male workers. PBB also very good relationship with the stakeholders, basic facilities such as HUMANA School, housing, clinic, etc. are well provided to all workers and staff. From aspect of Safety and Health, PBB has a trained security team that patrolling 24 hours in PBB area. PART 5: RSPO SUPPLY CHAIN CERTIFICATION The palm mill mentioned in the scope of the audit was audited against the requirements of the following: RSPO Supply Chain Certification Systems. November 2011 RSPO Supply Chain Certification Standard. November POM Included In The Scope Of The Audit Name Mill Palm Oil Mill Capacity Location Supply Chain Model (POM) MT/Hour Address (IP or SG or MB) Reka Halus Palm Oil KM87, Jalan Sandakan-Telupid, 30 Mill Sandakan, Sabah, Malaysia MB 5.2 Confirmation Of The Company s Summary Of Annual Certified Volume Of RSPO Certified Palm Oil And Palm Kernel Over A Specified Period Product CU Code CPO (MT) PK (MT) Specified 12 month period POM 1 19,077.73* 3,703.88** From December 2012 November 2013 *None sold as Certified CPO during the above specified period. **Sold as Certified PK. 5.3 Summary Report Including A Brief Description Of The Scope Of Certification Reka Halus palm oil mill receives FFB from own supply base and outside growers and process it into CPO and Palm Kernel as a product using RSPO SCCS MB model. All the workers was trained with the RSPO SCCS requirement A full RSPO SCCS certification audit was used during this annual assessment and the findings support the certification based on supply chain model used. RSPOPC-SUM-REPORT.F01 OCT2013 Page 25 of 31

26 5.4 Monthly Records of Certified FFB, CPO and PK Since the Last Audit If this is the 1 st Main Assessment, the figures used are from the last 12 months. If this is an Annual Surveillance Assessment, the figures used are since the last audit. No MONTH-YEAR Certified Supply Bases (MT) Certified CPO (MT) Certified PK (MT) Last Audit Conducted on November December , , January , , February , , March , , April , , May , , June , , July , , August , , September , , October , , November , , TOTAL 92, , , Records of Certified CPO & PK Sold under GreenPlam to Buyers since the Last Audit, if Any If this is the 1 st Main Assessment, the figures used are from the last 12 months. If this is an Annual Surveillance Assessment, the figures used are since the last audit. The transactions were sighted form the clients registered GreenPlam Account. No Buyers Name GreenPalm Trading No Certified CPO Certified PK (MT) Sold (MT) Sold 1 As per 11 December 2013, verified through Green Palm website, there are registered certificates by Wilmar Trading Pte. Ltd. However, there are no redeemed certificates. N/A -Nil- -Nil- 5.6 Records of Certified CPO & PK Sold under UTZ etrace to Buyers since the Last Audit, if Any If this is the 1 st Main Assessment, the figures used are from the last 12 months. If this is an Annual Surveillance Assessment, the figures used are since the last audit. The transactions were sighted form the clients registered UTZ etrace Account. Certified CPO Certified PK No Buyers Name UTZ etrace Trading No (MT) Sold (MT) Sold 1 Sandakan Edible Oil - - 3, Non-Conformities Identified during this Audit Timeline for compliance: 1. All non-conformances observed during an audit shall be classified as major since all requirements for Supply Chain certification have to be met before granting certification. 2. For Main Assessments, all non-conformances shall be addressed satisfactorily by the operation before certification may be granted by the certification body. If non-conformances are not addressed within three (3) months of the audit, a full re-audit shall be required. The certification body shall assess the effectiveness of the corrective and/or preventive actions taken before closing out the non-conformances. 3. For Annual Surveillance Assessments, non-conformances raised after the certification are serious (i.e. must be considered as a major) and the integrity of the RSPO Supply Chain Certification is at risk. A maximum of one month is to be given to the certified client to satisfactorily address the non-conformance. The certification body shall assess the effectiveness of the corrective and/or or preventive actions taken. Should the nonconformance not be addressed within the one-month maximum timeframe, a suspension or RSPOPC-SUM-REPORT.F01 OCT2013 Page 26 of 31

27 withdrawal of the certificate and a full re-audit may be necessary. 4. If no non-conformances are observed at an audit or when the corrective action plan has satisfactorily addressed raised non-conformance(s), the client shall be recommended for (re-) certification. No NC raised during this audit. NON CONFORMITY REPORT NC number: - Client name: - Date raised: - Major or Minor: - Raised by: - Aspect of standard: - Evidence of non-conformity: - Auditors signature: Date: 5.8 Description of the Organizational Management Systems Including organizations, management and operational systems to ensure compliance with the RSPO Supply Chain Certification Systems and Standards as detailed above It is the responsibility of the department heads to ensure that they and their subordinates comply with the requirements and procedures stated in SOP manual. It is their responsibility to maintain records that will allow verification of the RSPO status of the material. The MR is having the overall responsibility for and authority over the implementation of the requirements and compliance with all applicable requirements. He is having the full understanding and awareness of supply chain certification system and the facilities procedures for the implementation of the standard. 5.9 Final Certification decision by Control Union for the RSPO SCCS Audit of the POM Recommendations made: Yes Summary of noncompliances: None. Certification status of client: The POM included in the scope of this audit demonstrated full compliance with the RSPO SCCS. With effect from the certification date given in the RSPOPC certificate, this POM mentioned in the scope of this report is considered to be certified in accordance with the RSPO SCCS. PART 6: CERTIFIED ORGANISATION S ACKNOWLEDGEMENT OF INTERNAL RESPONSIBILITY 6.1 Date of next ASA The provisional date for the next ASA is: Approximately December Date for Closure of Non-Conformities See sections above for details of NC s, if any All major NCs to be closed by: All minor NCs to be closed by: N/A Before next surveillance audit RSPOPC-SUM-REPORT.F01 OCT2013 Page 27 of 31

28 6.3 Signing by the Client I the undersigned, being the most senior relevant management representative of the operation seeking or holding certification, agree with the contents and audit findings as presented in this document. I also confirm: Acceptance of liability in execution of the instructions given. That this company was made aware that the findings of the audit team are tentative; pending review and decision making by the duly designated representatives of Control Union Certifications. That during the closing meeting all agenda items was covered by the Lead Auditor. Acknowledged by: Name: Edrin Moss Position: Senior Manager - Sustainability Date: 20 th March 2014 Signature 6.4 Signing by the Lead Auditor I the undersigned, being the Lead Auditor, confirm that this report is an accurate record of the findings and of the closing meeting. I further confirm that the summary of the findings as presented in this report are a true representation of the actual findings of the audit team. Acknowledged by: Name: Simon Selvaraj Position: Lead Auditor Date: 10 th March 2014 Signature 6.5 Signing by the Certifier I the undersigned, being the Certifier, confirm that the information and conclusions included in this report have been prepared in good faith and that the certification decision has been based upon this information. Acknowledged by: Name: Nurhadi Position: Certifier Date: 06/06/2014 Signature RSPOPC-SUM-REPORT.F01 OCT2013 Page 28 of 31

29 PART 7: APPENDICIES Appendix 1: Location Map for this Certification Unit From 1.9, the location map(s) Map 1. Location of PBB in Sabah Region RSPOPC-SUM-REPORT.F01 OCT2013 Page 29 of 31

30 Map 2. Location of PBB (Reka halus POM and estate) and neighboring entities RSPOPC-SUM-REPORT.F01 OCT2013 Page 30 of 31