Roundtable on Sustainable Palm Oil

Transcription

1 Roundtable on Sustainable Palm Oil Extension Scope Audit Report Report no.: RA1_ Extension scope assessment against the RSPO Supply Chain Certification System year 2014 Name of client PT Aek Tarum Belida Mill Head Office : Sumber Baru Village, Mesuji Raya Sub-district, Ogan Komering Ilir District South Sumatera Province, Indonesia Date of extend scope SCCS Audit : January 9 th to 10 th, Report prepared by: Naik Monang Parlindungan Lingga (RSPO Lead Auditor) Certification decision by: Abdul Qohar (Director of TUV Rheinland Indonesia) Certification Body: PT TUV Rheinland Indonesia Menara Karya Lantai 10, Jl. H.R. Rasuna Said Block X-5 Kav.1-2 Setiabudi, Jakarta, Indonesia Tel: Fax:

2 TABLE OF CONTENTS 1.0 SCOPE OF EXTENSION SCOPE ASSESSMENT Standard Used Type of Assessment Location and Maps Description of Supply Base Dates of Plantings and Replanting Cycles Area of Plantation (Total, Planted and Mature) Organisational Information / Contact Person Time Bound Plan for Other Management Units Compliance to Rules for Partial Certification Approximate Tonnages Certified Recommendation for extension scope assessment Date of Certificate Issued and Scope of Certificate ASSESSMENT PROCESS Certification Body Qualifications of Lead Assessor and Assessment Team Assessment Methodology & Agenda ASSESSMENT FINDINGS Summary of Findings Identified Non-conformances, Corrective Actions Taken and Auditors Conclusions CERTIFIED ORGANISATION S ACKNOWLEDGEMENT OF INTERNAL RESPONSIBILITY Date of Next Surveillance Visit Acknowledgements of Internal Responsibility and Formal Sign-Off by Client APPENDICES Appendix 1: Certificate Appendix 2: List of Abbreviations

3 Page 3 of SCOPE OF EXTENSION SCOPE ASSESSMENT 1.1 Standard Used The extension scope audit were assessed against RSPO Supply Chain Certification year Type of Assessment The extension scope assessment carried out on 1 (one) mill i.e Belida mill which FFB supply came from 2 (two) estates are Belida estate & Inti Permata Bunda Satu estate 3 (three) smallholder s estate are village cooperative (KUD) of Tekad Mandiri, village cooperative (KUD) of Panca Sawit Makmur and village cooperative (KUD) of Jaya Bersama. 1.3 Location and Maps PT Aek Tarum location is in Sumber Baru Village, Mesuji Raya Sub-district, Ogan Komering Ilir District, and South Sumatera. This location is 100 km or 4 hours by drive from Palembang City the capital of South Sumatera. Table 1a: GPS locations for all estates and mill Name of mill / estates Belida Mill Belida Estate IPBS Estate Location Desa Sumber Baru C1, Kecamatan Mesuji, Kabupaten Ogan Komering Ilir, Sumatera Selatan Desa Sumber Baru C1, Kecamatan Mesuji, Kabupaten Ogan Komering Ilir, Sumatera Selatan Desa Sumber Baru C1, Kecamatan Mesuji, Kabupaten Ogan Komering Ilir, Sumatera Selatan GPS locations Latitude Longitude 03 o O O o O o Table 1b: GPS locations for all smallholders estates Name of estates KUD Tekad Mandiri KUD Panca Sawit Makmur KUD Jaya Bersama Location Desa Kemang Indah SP2, Kecamatan Mesuji raya, Kabupaten Ogan Komering Ilir, Sumatera Selatan Desa Balian Makmur SP5, kecamatan Mesuji raya, kabupaten Ogan Komering Ilir, Sumatera Selatan Desa Cahaya Mulya SP6, Kecamatan Mesuji Makmur, Kabupaten Ogan Komering Ilir, Sumatera Selatan GPS locations Latitude Longitude 3 46' " 105 2'28.187" 3 48' '16.712" 4 0' " '24.821"

4 Page 4 of 27 Figure 1: Location of Belida Palm Oil Mill

5 Page 5 of Description of Supply Base Table 2: FFB Supply Information for Belida mill in year and (projection January until June) FFB supplied year * FFB Contributors Tonnes % Company owned (certified) estates : Belida Estate 14, IPBS Estate 4, Sub Total 18, Scheme Smallholder estates (include scope) (certified): KUD Tekad Mandiri 8, KUD Panca Sawit Makmur 10, KUD Jaya Bersama 6, Sub Total , Other suppliers (non-certified) Sub Total 89, Note: *) Data from June to December TOTAL 134, FFB Contributors FFB supplied year (projection)* Tonnes % Company owned (certified) estates : Belida Estate** 47, IPBS Estate** 9, Sub Total 57, Scheme Smallholder estates (include scope) (certified): KUD Tekad Mandiri** 9, KUD Panca Sawit Makmur** 14, KUD Jaya Bersama** 12, Sub Total 36, Other suppliers (non-certified) Sub Total 110, TOTAL 204, Note: *) Data from January to December (projection) **) Per 1 April, the company will implement IP models and only accept the fruit from the certified supply base (Belida estate, IPBS estate, KUD Tekad Mandiri, KUD Panca Sawit Makmur, KUD Jaya Bersama)

6 Page 6 of 27 Table 3: Certified tonnages claimed, certified tonnages purchased or sold, total and projected CPO and PK production from Belida Mill Note: *) Data from June to December **) Data from January to December (projection) CPO Amount (MT) Previous certified tonnages claimed 20, , Certified tonnages sold 0 2, Certified tonnages purchased 0 0 Actual FFB Production for year * 134, Actual Certified FFB Production for year * 44, Actual Production for year * 26, , Actual Certified Production for year * 8, , Conversion Rate for year * OER: KER: 5.31 Projected output for year ** 43,918 11,056 Projected certified production for year ** 20,139 5,070 Projected certified FFB from scope of certified ** 93,886 Projected conversion rate for year ** OER: KER: 5.40 Projected FFB for year ** 204,745 PK 1.5 Dates of Plantings and Replanting Cycles Table 4: Age and year of plantings of company estate supplying to Belida Mill Oil palm planted area at each estate(ha) Age & Year of Plantings Belida Estate IPBS Estate KUD Tekad Mandiri KUD Panca Sawit Makmur KUD Jaya Bersama 0 5 yrs (2012 ) yrs ( ) yrs ( ) yrs ( ) yrs ( ) 1, yrs ( ) TOTAL 2,

7 Page 7 of 27 Table 5: and actual oil palm replanting activities for PT Aek Tarum Year Total planned replanting area (ha) Total planned replanting area for each estate (ha) Belida Estate IPBS Estate Actual total area replanted (ha) Area of Plantation (Total, Planted and Mature) Table 6: Oil Palm Planted Area Summary, FFB Production and Average yield/ha for PT Aek Tarum & Smallholder Estate Name Belida Estate IPBS Estate Total area (ha) Oil Palm Planted area (ha) Mature (Production) area (ha) Immature (Nonproduction) area (ha) FFB Production (tonnes) * Average yield year (tonnes/ha) 3, , , , , , , SUB TOTAL 3, , , , ,618 KUD Tekad Mandiri KUD Panca Sawit Makmur KUD Jaya Bersama , , , , , , , SUB TOTAL 2, , , , ,670 GRAND TOTAL Note: 6, , , , , *) Projection production from January until June Table 7: Other land use data for PT Aek Tarum & Smallholder until March Estate Name Total area (ha) Oil Palm Planted Area (ha) HCV/ Potential HCV areas (ha) Inside Outside in theplanted planted area area Land used for other purposes (ha) Office, Housing & Road Nursery Other Land (Non Plantable)

8 Page 8 of 27 Estate Name Total area (ha) Oil Palm Planted Area (ha) HCV/ Potential HCV areas (ha) Inside Outside in theplanted planted area area Land used for other purposes (ha) Office, Housing & Road Nursery Other Land (Non Plantable) Company owned estate Belida Estate 3, , IPBS Estate TOTAL 3, , Smallholder estate KUD Tekad Mandiri KUD Panca Sawit Makmur KUD Jaya Bersama , TOTAL 2, , Organisational Information / Contact Person Contacts details of the company are as follows: Company Name: PT Aek Tarum - Belida Mill Contact Person : Head office : Jl. Basuki Rachmat No. 788 Palembang Sumatera Selatan Indonesia Mrs. Yusi Rosalina Telephone: yusi.rosalina@sampoernaagro.com 1.8 Time Bound Plan for Other Management Units The time frame laid out below is considered to be both challenging and realistic. The company will be using the experience of this extension scope assessment to ensure that the other management units conform to the RSPO Principles & Criteria. The audit team is satisfied that the company conforms to the RSPO requirements for partial certification as laid out in Clause of the RSPO Certification Systems document. Name of Holding PT Aek Tarum 1. Belida POM 2. Belida Estate 3. Permata Bunda Satu estate 4. Belida Smallholder (Tekad Mandiri, Panca Sawit Makmur) 5. Limau Sundai Samllholder Location South Sumatera Time bound plan for certification Status Certified Certified Certified Certified

9 Page 9 of 27 (Rahayu Bhakti, Mulya Jaya, mekar Sari, Sumber Rezeki) 6. Sari Indah Smallholder (Karya Makmur) PT Mutiara Bunda Jaya 1. Permata Bunda POM 2. Mesuji Satu Estate 3. Surya Adi Estate 4. Mesuji Samllholder (Bina Sawit Utama, Citra Sawit Mandiri, Mekar Sawit) 5. Permata Bunda Smallholder (Marga Mulya, Surya Bakti) 6. Harapan Bunda Smallholder (Surya Adi, Sinar Jaya) 7. Surya Karta Samllholder (Tunas Harapan) South Sumatera 2011 Certified Certified Certified PT Gunung Tua Abadi 1. Sumber sawit Palm Oil Mill 2. Sumber Sawit Estate 3. Permata Bunda Dua Estate 4. Hikmah Tiga Estate 5. Hikmah Lima Estate 6. Hikmah Lima Smallholder (KUD Dewa Makmur) 7. Sumber Sawit Smallholder (KUD Makmur Bersama) South Sumatera 2018 Certified Certified Certified Processing certification PT Sampoerna Agro 1. Selapan Jaya POM 2. Hikmah 2 Estate 3. Belida Smallholder (Mulya Indah Permai, Jadi Mandiri, Bina Sejahtera) 4. Gading Jaya estate smallholder/ Limau Manis Samllholder (Maju Lancar, Madya Karya Bhakti, Sedya Mukti, Subur Makmur, Sumber Santosa, Serba Usaha, Intan, Marga Mulya) 5. Gading Jaya Smallholder (Ipoh Raya, Puger Mulya, Harapan Jaya Mandiri, Balian Sejahter Abadi) South Sumatera Certified Certified PT Telaga Hikmah 1. Telaga Hikmah POM 2. Hikmah Satu estate 3. Hikmah empat estate 4. Gading Jaya estate 5. Mega Terang 6. Tanjung Sari 7. Sepucuk 8. Limau Kesturi 9. Jaya Permai 10. Nawa Surya 11. Tanjung Sari estate small- South Sumatera

10 Page 10 of 27 holder (Rantau Durian Smallholder-KUD Tanjung Mesayu, KUD Sumber Makmur, KUD Sari Makmur) 12. PT Selatan Jaya Permai Smallholder 13. PT Sawit Selatan Smallholders PT Sungai Rangit 1. Sungai Rangit Palm Oil Mill 2. Baboti Estate 3. Rauk Naga Estate 4. Waringin estate 5. Sukamara estate 6. Telaga Bintang estate 7. Sungai Sagu Estate 8. Sungai Rangit Smallholder Central Kalimantan 2019 PT Usaha Agro Indonesia 1. Usaha Agro Indonesia POM 2. Ulin Agro estate 3. Kruing Agro estate 4. Meranti Agro estate 5. Usaha Agro Indonesia Smallholder West Kalimantan 2019 PT Lanang Agro Bersatu 1. Lanang Agro Bersatu Mill 2. Bukit Subur estate 3. Bukit Makmur estate 4. Lanang Agro Bersatu Smallholder West Kalimantan PT Tebar Tandan Tenerah 1. PT Tebar Tandan Tenerah Mill 2. PT Tebar Tandan Tenerah estate 3. PT Nusantara Sarana Alam estate 4. PT Tebar Tandan Tenerah Smallholder 5. PT Nusantara Sarana Alam Smallholder West Kalimantan PT Pertiwi Agro Sejahtera 1. PT Pertiwi Agro Sejahtera Mill 2. PT Pertiwi Agro Sejahtera estate 3. PT Kusuma Mentari Makmur estate 4. PT Agro Planindo Utama estate 5. PT Pertiwi Agro Sejahtera Smallholder 6. PT Kusuma Mentari Makmur Smallholder 7. PT Agro Planindo Utama Smallholder West Kalimantan

11 Page 11 of 27 PT Anugerah Palm Indonesia 1. PT Anugerah Palm Indonesia estate 2. PT Anugerah Palm Indonesia Smallholder West Kalimantan PT Kedurang Prakarsa Nabati 1. PT Kedurang Prakarsa Nabati estate 2. PT Kedurang Prakarsa Nabati Smallholder West Kalimantan Compliance to Rules for Partial Certification Compliance of the uncertified management units of PT Sampoerna Agro Tbk against the rules for partial certification according to RSPO Certification System clause was assessed by Self Assessment and verification audit. A summary of findings is as stated below. Partial Certification Requirements (a) The parent organization or one of its majorities owned and / or managed subsidiaries is a member of RSPO. (b-d) A challenging time-bound plan for certifying all its relevant entities is submitted to the Certification Body (CB) during the first certification audit. The time-bound plan should contain a list of subsidiaries, estates and mills. Any revision to the time-bound plan or to the circumstances of the company shall cause the plan to be reviewed. for whether it is still appropriate, such that changes to the timebound plan are permitted only where the organisation can demonstrate that they are justified (e) No replacement of primary forest or any area identified as containing High Conservation Values (HCVs) or required to maintain or enhance HCVs in accordance with RSPO criterion 7.3. Any new plantings since January 1st 2010 must comply with the RSPO New Plantings Procedure (f) Land conflicts, if any, are being resolved through a mutually agreed process, e.g. Audit Findings PT Aek Tarum and PT Mutiara Bunda Jaya (Inti Permata Bunda Dua Estate) are subsidiary of PT Sampoerna Agro Tbk. Sampoerna Agro has been a member of RSPO since 10 January 2007 With membership no A challenging time bound plan has been establish as determined by memorandum of PT Sampoerna Agro Management Commitment signed by CEO on June 01, This is the 2 nd revised time bond plan of PT Sampoerna Agro Tbk. Considering the readiness of all subsidiaries palm oil mill and estates under PT Sampoerna Agro Tbk. There is no evidence of replacement primary forest in subsidiaries under sampoerna Argo. Some new development area under subsidiaries of PT Sampoerna Agro i.e. PT Sungai Rangit, PT Mutiara Bunda Jaya; PTTelaga hikmah and PT Sampoerna Agro has been conduct NPP assessment and the report has been submitted to RSPO PT Anugrah Palm Indonesia, PT Kedurang Prakarsa Nabati, PT Lanang Agro Bersatu, PT Pertiwi Agro Sejahtera, PT Tebar Tandan Tenerah, PT Kusuma Mentari Makmur, PT Agro Planindo Utama, PT Nusantara Alam, PT Selatan Jaya Permai and PT Sawit Selatan is under verification process for New Planting procedure There are identified ongoing land conflicts in several subsidiaries of PT Sampoerna Agro such as:

12 Page 12 of 27 Partial Certification Requirements RSPO Grievance procedure or Dispute Settlement Facility, in accordance with RSPO criteria 6.4, 7.5 and 7.6. Audit Findings 1. Mega Terang estate with community from Sungai Menang Village for 600 ha located in Block 14, 15 and 16 Mega Terang Estate. 2. PT Aek Tarum with Mataram Jaya dan Community of Kemang Indah village 3. PT Mutiara Bunda Jaya with community of Sungai Menang and Rantau Durian I Village. Some action has been taken to solve the conflict. (g) Labour disputes, if any, are being resolved through a mutually agreed process, in accordance with RSPO criterion 6.3. (h) Legal non-compliance, if any, are being resolved in accordance with the legal requirements, with reference to RSPO criteria 2.1 and 2.2. In year 2015 there is no labour dispute in all subsidiaries PT Sampoerna Agro Tbk. Some of management units under Sampoerna Agro have not complied with certain legal requirements, for example in PT Sungai Rangit, PT Mutiara Bunda Jaya and others, there is an issue with the land area stated in the land use right certificate (HGU). However, the company is taking action by inviting the National Land Agency (BPN) to remeasure the land and resolve the issue. The process is still ongoing Approximate Tonnages Certified The approximate tonnages certified, based on production in year (from January until December) for company certified owned estates and certified smallholder are as follows: Crude Palm Oil (CPO) Palm Kernel (PK) : 20,139 tonnes : 5,070 tonnes While the projection for FFB production for year is 34,289 tonnes from scope of certified FFB (companies owned estate and smallholders) 1.11 Recommendation for Extension Scope Assessment PT Aek Tarum (Belida Mill) its supply based estates has established and maintains an effective system to ensure compliance with the RSPO principles and criteria and RSPO supply Chain Certification. 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 Generic Standard amd RSPO Supply Chain certification Date of Certificate Issued and Scope of Certificate The scope of the certificate covers production of palm oil from Belida Mill and its supply base, which includes Belida estate, IPBS estate and smallholder (Tekad Mandiri, Jaya Bersama and Panca Sawit Makmur). The date of extention certificate issued is March. Further details of the certificate are as per Appendix 1.

13 Page 13 of ASSESSMENT PROCESS 2.1 Certification Body PT TUV Rheinland Indonesia 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 490 locations in 62 countries on all five continents. PT TUV Rheinland Indonesia 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. PT TUV Rheinland Indonesia s office is located in Jakarta, Indonesia. 2.2 Qualifications of Lead Assessor Extension Scope Audit of SCCS Name Position Qualifications / Experience Education: Bachelor of Forestry, Gadjah Mada University. Naik Monang Parlindungan Lingga Lead Auditor Training attended : ISPO Auditor, Quality Management System (QMS) Auditor/Lead Auditor (ISO 9001:2008) by IRCA, Environmental Management Systems Auditor/Lead Auditor Conversion Training by IRCA (ISO ), Lead Auditor RSPO Training, HCVA Training and RSPO SCCS Training () Working experience: Field Assistant PT Sapta Karya Damai ( ), Auditor in PT Sucofindo ( ), and Auditor in PT TUV Rheinland Indonesia (2015-present). 2.3 Assessment Methodology & Agenda The extension scope audit of SCCS assessment was conducted on January 9th until 10th, as per the assessment program below. The assessment was carried out in accordance with s RSPO SCCS audit procedure as well as the RSPO SCCS document. During assessment, the qualified TUV Rheinland assessors used the RSPO SCCS November 2014 standard as endorsed for the country in which the assessment took place and recorded their findings. During the extension scope audit, companies are still using the mass balance models and for the future the company chose to use 2 (two) supply chain models i.e. Identity Preserved (IP) and Mass Balance (MB). This audit conducted to ensure that the company has a systems and procedures for the implementation of supply chain model of Identity Preserved (IP) starting from FFB receiving, processing, product storage until sales of product. 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. Auditor has been carried out field visit and document assessments for Belida Mill for compliance to all the RSPO SCCS November 2014 standard. Common systems were identified and specific evidence was recorded for the mill. The company proposed the correction and corrective action for all identified non conformities raised to the certification body 2 weeks after the closing meeting. Verification of closure of major non-conformances was conduct 30 days after the closing meeting of the extension scope SCCS audit. The extension scope SCCS assessment agenda is explained below.

14 Page 14 of 27 Location/ Main sites Main activities Belida Mill Opening meeting Introduction and background of estate and mill Audit team introduction and audit plan finalization Document Checking about RSPO SCCS November 2014 (Module D) Belida Mill Site Visit: Plant tour Interview with wightbridge worker Interview with processing worker Closing meeting

15 Page 15 of ASSESSMENT FINDINGS 3.1 Summary of Findings During the extension scope audit, companies are still using the mass balance models and for the future the company chose to use 2 (two) supply chain models i.e. Identity Preserved (IP) and Mass Balance (MB). This audit conducted to ensure that the company has a systems and procedures for the implementation of supply chain model of Identity Preserved (IP) starting from FFB receiving, processing, product storage until sales of product. The following is a summary of findings made for the criteria listed in the RSPO Supply Chain Certification System November 2014 Model D: D.1. Definition Findings: Belida Palm Oil Mill is one of mill under Sampoerna Group. Located in Sumber Baru village, Mesuji Raya district, OKI Regency, South Sumatera. Belida palm oil mill will implemented 2 (two) model supply chain i.e. RSPO SCCS MB and RSPO SCCS IP. At the time of extend audit, the company still implemented RSPO SCCS Mass Balance. This model will allowed the mill mix the certified and uncertified FFB, CPK and PK with control by mass balance record and will evaluate in every three months and for RSPO SCCS IP, this model is necessary to verify the volumes and sources of certified FFB entering the mill, the implementation of any processing controls (for example, if physical separation is used), and volume sales of RSPO certified products. A mill may be taking delivery of FFB from uncertified growers, in addition to those from its own certified land base. The company will implement the RSPO SCCS Identity Preserve (IP). Company extend the scope of RSPO SCCS and will be implemented the RSPO SCCS Identity Preserved (IP) after the certificate has been issued (per 1 April ). The company could not be considered as Identity Preserved (IP) because the mill still receive the FFB from FFB non certified in accordance with the principles and criteria of the RSPO. It was raised as Nonconformities (NCR RSPO00801). Compliance status : Non Compliance Non-conformance: RSPO (Major non-conformity) The company could not be considered as Identity Preserved (IP) because the mill still receive the FFB from FFB non certified in accordance with the principles and criteria of the RSPO D.2. Explanation Findings : The estimated of certified CPO and PK year (January until December) are 20,139 MT (CPO) and 5,070 MT (PK) with projection of certified FFB process is 93,886 MT and extraction rate are 21.45% (OER) and 5.40% (KER). This information gets from budget of mill year. Estimated of tonnage CPO and PK products has been recorded in to the public summary of the P&C certification report. The Company has not been registered in the RSPO IT Platform (e-trace) for RSPO SCCS Identity Pre-

16 Page 16 of 27 served (IP) Model. It was raised as Nonconformities (NCR RSPO00802). Compliance status : Non Compliance Non-conformance: RSPO (Major non-conformity) The Company has not been registered in the RSPO IT Platform (e-trace) for RSPO SCCS Identity Preserved (IP) Model. D.3. Documented procedures Findings: Belida palm oil mill has established the procedure for RSPO SCCS MB implementation, such as: 1. P-SAG-PKS-PRS-01 Rev01 dated on August 1, 2012 about recording and weighing and FFB incoming. 2. WI-SAG-PKS-PRS-0101 Rev01 dated on August 1, 2012 about recording of tranposrtation unit for FFB, CPO and PK loading. 3. P-SAG-PKS-PRS-14 Rev02 dated on January 6, about supply chain and traceability. The procedure has been described about flushing if any changes of supply chain models. The company will use certified product (CPO and PK) to flushing entire operational process if the company will be changes supply chain models from Mass Balance (MB) to Identity Preserved (IP). The company will conduct 3 (three) times flushing to ensure that there is not contamination between certified and noncertified product. The procedure stated person incharge to implemented Supply Chain Certification System Model D (Identity Preserved) such as Estate Manager, Plasma Manager, Commercial General Model, Logistic supervisor, Mill Manager, Head of Administration, Quality Control and Processing Assistant. The procedure of supply chain certification system and traceability (No. P-SAG-PKS-PRS-14 revision 02 dated January 6, ) does not cover about job description and responsibilities for weighing officer to implemented the RSPO Supply Chain Certification System Model D (Identity Preserved). It was raised as Nonconformities (NCR RSPO00803). The company has been conduct socialization about RSPO SCCS Model D (Identity Preserved) on 6 January at Belida Mill. Evidence of socialization such as attendant list of participant and training materials. The company has procedure about FFB receipt until FFB processing but the procedure does not explained about process control (for example physical separation starting from receipt, FFB processing, product storage until product sales that has been produce) to implemented RSPO SCCS Model D (Identity Preserved). It was raised as Nonconformities (NCR RSPO00804). Compliance status : Non Compliance Non-conformance: RSPO (Major non-conformity) The procedure of supply chain certification system and traceability (No. P-SAG-PKS-PRS-14 revision 02 dated January 6, ) does not cover about job description and responsibilities for weighing officer to implemented the RSPO Supply Chain Certification System Model D (Identity Preserved). Non-conformance: RSPO (Major non-conformity) The company has procedure about FFB receipt until FFB processing but the procedure does not explained about process control (for example physical separation starting from receipt, FFB processing, product storage until product sales that has been produce) to implemented RSPO SCCS Model D (Identity Preserved).

17 Page 17 of 27 D.4. Purchasing and good in Findings : The company has procedure of Supply Chain System and Traceability No.P-SAG-PKS-PRS-14 revision 02 issued date 6 January. The procedure has been explained about process of traceability for sustainable FFB and non sustainable FFB. The procedure has been explained about recording of FFB tonnage and FFB sources from certified FFB and non certified FFB. The company currently does not keep records of FFB tonnage and FFB sources both from certified and non certified FFB to implemented RSPO SCCS Model D (Identity Preserved). The company has been prepared supporting document such as FFB weighing slip, CPO and PK weighing slip, FFB daily report, daily report of delivery CPO and PK and product activity report. The company will make record the document after gaining recognition RSPO SCCS Identity Preserve models. The company uses the stamp to determine the FFB come from certified sources by the RSPO SCCS Identity Preserved models. The company has set a memorandum that the company will only receive fruit that comes from estate and smallholders that has been RSPO certified (per 1 April ) to implemented IP models. If there is a change in supply chain model caused by peak crop, the managing director will issue a memorandum to carry out two types of supply chain model (IP & MB) and determine the processing time so it does not mix between certified and non-certified FFB. The company has procedure of Supply Chain System and Traceability No.P-SAG-PKS-PRS-14 revision 02 issued date 6 January. The procedure has been described about flushing if any changes of supply chain models. The company will use certified product (CPO and PK) to flushing entire operational process if the company will be changes supply chain models from Mass Balance (MB) to Identity Preserved (IP). The company will conduct 3 (three) times flushing to ensure that there is not contamination between certified and non-certified product. Belida mill has procedure and mechanism to inform the over production into the CB by document number P-SAG-PKS-PRS-14 Rev02 date issue January 6,, mentioned if over production projected, the marketing unit will inform to the CB related that over production, Compliance status : Full Compliance D.5. Record keeping Findings : Belida mill has form of identity preserved template consist of information about FFB production, production of CPO and PK and stock condition in every three months. The company will record the form and claim the sales as Identity Preserved (IP) on a three-monthly basis after the certificate of supply chain certification system Identity Preserved models has been issued. Compliance status: Full Compliance D.6. Processing Findings : At the time of extend audit, based on document record, the company still receipts the FFB of third party from January until December. The company will implemented Identity Preserved (IP) models after the certificate has been issued. At the time of extend audit, the company has set a memorandum that the company only receive the FFB from estate and smallholders starting 1 April that has been RSPO certified. If there is a change in

18 Page 18 of 27 supply chain model caused by peak crop, the managing director will issue a memorandum to carry out two types of supply chain model (IP & MB) and determine the processing time so it does not mix between certified and non-certified FFB. The company has procedure of Supply Chain System and Traceability No.P-SAG-PKS-PRS-14 revision 02 issued date 6 January. The procedure has been described about supply chain models i.e: a. Identity Preserved: The company will be implemented the RSPO SCCS Identity Preserved (IP) after the certificate has been issued (per 1 April ).The company only receive the FFB from estate and smallholders (inside of scope certification) starting 1 April that has been RSPO certified. Prior to implementing supply chain Identity Preserved (IP) model, the company will carry out flushing as much as 3 times to ensure that the entire process has been cleared of contamination. The company will use IP-certified products (CPO and PK) to carry out flushing and the product result from flushing activity is categorized as a product of mass balance. Companies also has been providing a separate storage tank (CPO and PK) for products manufactured by the SCCS IP models. The company has a letter of FFB receipt (SPB) documents to be stamped RSPO IP FFB which states that the FFB comes from a certified supply base model Identity Preserved (IP). The company also conduct calculating stock and production of RSPO IP product based on actual measurement each day. The company also provide a stamp to identify the delivery of products (CPO and PK) which produced from supply chain model Identity Preserved (IP). b. Mass Balance The company will impelemented RSPO SCCS Mass Balance models if the company have FFB peak crop and the managing director will issue a memorandum to announce the type exchange of supply chain model from Identity Preserved to Mass Balance models. The company has a letter of FFB receipt (SPB) documents to be stamped RSPO MB FFB which states that the FFB comes from a certified supply base model Mass Balance (MB). The company also conduct calculating stock and production of RSPO MB with mass balance template report. The company also provide a stamp to identify the delivery of products (CPO and PK) which produced from supply chain model Mass Balance (MB). The company has not been able to ensure for all process of FFB receiption, FFB processing, product storage until product sales are not mixed with non-certified products. It was raised as Nonconformities (NCR RSPO00805). The company does not reached the objective is for 100% segregated material. It was raised as Nonconformities (NCR RSPO00806). Compliance status: Non Compliance Non-conformance: RSPO (Major non-conformity) The company has not been able to ensure for all process of FFB receiption, FFB processing, product storage until product sales are not mixed with non-certified products. Non-conformance: RSPO (Major non-conformity) The company does not reached the objective is for 100% segregated material Identified Non-conformances, Corrective Actions Taken and Auditors Conclusions During extension scope audit of SCCS, a total of 6 nonconformances were identified against RSPO SCCS November For the major non-conformances, the company has taken the necessary corrective action to close these non-conformances within 30 days of completion of the assessment, and this was verified by the audit team through documents submitted by the company. A summary of all identified non-conformances, corrective actions taken and auditor conclusions is as below:

19 Page 19 of 27 D.1. Definition Non-conformance: RSPO (Major non-conformity) The company could not be considered as Identity Preserved (IP) because the mill still receive the FFB from FFB non certified in accordance with the principles and criteria of the RSPO. Correction : The company established a policy to used identity preserved supply chain models started from April 1,. The determination will be through by memorandum of managing director. Corrective Action : 1. The company conduct review of procedure i.e. mass balance & traceability procedure, recording & weighing, processing procedure and storage tank procedure 2. The company will only accept RSPO FFB certified and that only comes from the supply base of Belida mill started on 1 March Auditor Conclusions: Closed Date of closure: February 27, Verification result : The Company has submitted evidence of improvement such as: Memorandum of Managing Director with number 029/MD/II/ dated February 27,. The memorandum describe that the company will used used identity preserved supply chain models started from April 1, Supply Chain System & Traceability Procedure (P-SAG-PKS-PRS-14 revision 02, issued date February 01, ). The procedure aims to ensure the traceability requirements (traceability) and systems supply chain (Supply Chain System) in accordance with the standards P & C ISCC- EU and RSPO SCCS-MB (Supply Chain Certification System Mass Balance), and the RSPO SCCS-IP (Supply Chain Certification System Identity preserved) Recording and Weighing procedure (P-SAG-PKS-PRS-01 revision 02, issued date January 01, ). The procedure aims to ensure the recording and weighing FFB, CPO, PK Sustainable, complies with the requirements of ISCC mass balance, mass balance RSPO RSPO Identity Preserved Flushing procedure (P-SAG-PKS-PRS-17 revision 00, issued date January 23, ). The procedure is used as a flushing guidelines or flushing of palm oil mill production line, in case any change of the model supply chain from mass balance models to identity preserved using crude palm oil or palm kernel produced from FFB identity preserved. Crude palm oil or palm kernel which is used for flushing process, will be put to stock mass balance. Stamp of RSPO SCCS IP & RSPO SCCS MB Form of summary activity per area (FM-SAG-PKS-PRS revision 01, effective dated January 01, ). The form describe about name of product, code of product, name of area and amount of product) Form of FFB reception report (FM-SAG-PKS-PRS revision 01, effective dated January 01, ). The form describe about source of FFB, GHG value, total of unit and amount of FFB. Form of daily report for product delivery CPO & PK (FM-SAG-PKS-PRS revision 01, effective dated January 01, ). The form describe about name of product, delivery order number, contractor, total of unit, the last number of slip delivery product, GHG value, total of delivery and stock of product The implementation of this model will be ensure at the next surveillance. D.2. Explanation

20 Page 20 of 27 Non-conformance: RSPO (Major non-conformity) The Company has not been registered in the RSPO IT Platform (e-trace) for RSPO SCCS Identity Preserved (IP) Model. Correction : The company will register the model of identity preserved to RSPO IT platform (e-trace) Corrective Action : Coordinating with Commercial department for registration of IP models for Belida mill to RSPO IT Platform Auditor Conclusions: Closed Date of closure: February 27, Auditor Conclusions: The Company has submitted evidence of improvement such as the license of RSPO IT Platform (RSPO_PO ) D.3. Documented procedures Non-conformance: RSPO (Major non-conformity) The procedure of supply chain certification system and traceability (No. P-SAG-PKS-PRS-14 revision 02 dated January 6, ) does not cover about job description and responsibilities for weighing officer to implemented the RSPO Supply Chain Certification System Model D (Identity Preserved). Non-conformance: RSPO (Major non-conformity) The company has procedure about FFB receipt until FFB processing but the procedure does not explained about process control (for example physical separation starting from receipt, FFB processing, product storage until product sales that has been produce) to implemented RSPO SCCS Model D (Identity Preserved). Correction : Reviewing recording and weighing procedures and procedures of P-SAG-PKS-PRS-14 to accommodate the requirements of supply chain models Identity preserved Corrective Action : Conducting socialization of recording and weighing procedures to weighing officer. Auditor Conclusions: Closed Date of closure: February 27, Auditor Conclusions: The Company has submitted evidence of improvement such as: Supply Chain System & Traceability Procedure (P-SAG-PKS-PRS-14 revision 02, issued date February 01, ). The procedure aims to ensure the traceability requirements (traceability) and systems supply chain (Supply Chain System) in accordance with the standards P & C ISCC-EU and RSPO SCCS-MB (Supply Chain Certification System Mass Balance), and the RSPO SCCS-IP (Supply Chain Certification System Identity preserved) Recording and Weighing procedure (P-SAG-PKS-PRS-01 revision 02, issued date January 01, ). The procedure aims to ensure the recording and weighing FFB, CPO, PK Sustainable,

21 Page 21 of 27 complies with the requirements of ISCC mass balance, mass balance RSPO RSPO Identity Preserved. The procedure also adding the jobsdescription of weighing officer (clerk) to implemented Identity Preserved models. Flushing procedure (P-SAG-PKS-PRS-17 revision 00, issued date January 23, ). The procedure is used as a flushing guidelines or flushing of palm oil mill production line, in case any change of the model supply chain from mass balance models to identity preserved using crude palm oil or palm kernel produced from FFB identity preserved. Crude palm oil or palm kernel which is used for flushing process, will be put to stock mass balance. Form of FFB reception report (FM-SAG-PKS-PRS revision 01, effective dated January 01, ). The form describe about source of FFB, GHG value, total of unit and amount of FFB. Form of weighing slip for FFB (FM-SAG-PKS-PRS revision 01 effective date January 1, ). The weighing slip describe about number of transaction, code of product, number of FFB delivery letter, date, name of driver, name of product, RSPO certificate number, RSPO unique number, estate, division, block, total of FFB, total of loose fruit, entry date and out date, bruto weigh anf netto weight. Form of weighing slip for CPO and PK (FM-SAG-PKS-PRS revision 04 effective date January 1, ). The weighing slip describe about number of transaction, code of product, name of contractor, customer code, name of customer, supply chain models, customer address, date, name of driver, name of contractor, RSPO certificate number, RSPO unique number, entry date and out date, bruto weigh anf netto weight. Evidence of procedure socialization for implemented RSPO SCCS Model IP and MB such attendant list of participant and photo documentation. The socialization has been conduct on February 2, for Weighing officer, Security, quality control assistant, production clerk, head of office administration and sustainibilty staff. The implementation of this model will be ensure at the next surveillance. D.6. Processing Non-conformance: RSPO (Major non-conformity) The company has not been able to ensure for all process of FFB receiption, FFB processing, product storage until product sales are not mixed with non-certified products. Correction : Ensuring the whole process of FFB reception until sales are already using IP SCCS models, according to the memorandum of Managing Director Reviewing the FFB receipt procedure until sales procedure so it can accommodate the IP and MB models Accept of RSPO FFB certified in accordance with the supply base of Belida mill Corrective Action : Conducting socialization the procedure of FFB receiption until CPO/PK sales to staff and employees. Controlling the whole process, starting from the FFB reception to CPO/PK sales is already using the IP model in accordance with the memorandum od Managing DIrector Ensure the delivery and reception of FFB in accordance with the supply base Belida mill. Auditor Conclusions: Closed Date of closure: February 27, Verification result : The Company has submitted evidence of improvement such as: Supply Chain System & Traceability Procedure (P-SAG-PKS-PRS-14 revision 02, issued date February 01, ). The procedure aims to ensure the traceability requirements (traceability) and systems supply chain (Supply Chain System) in accordance with the standards P & C

22 Page 22 of 27 ISCC-EU and RSPO SCCS-MB (Supply Chain Certification System Mass Balance), and the RSPO SCCS-IP (Supply Chain Certification System Identity preserved). The procedure has been described about flushing if any changes of supply chain models. The company will use certified product (CPO and PK) to flushing entire operational process if the company will be changes supply chain models from Mass Balance (MB) to Identity Preserved (IP). The company will conduct 3 (three) times flushing to ensure that there is not contamination between certified and non-certified product. Flushing procedure (P-SAG-PKS-PRS-17 revision 00, issued date January 23, ). The procedure is used as a flushing guidelines or flushing of palm oil mill production line, in case any change of the model supply chain from mass balance models to identity preserved using crude palm oil or palm kernel produced from FFB identity preserved. Crude palm oil or palm kernel which is used for flushing process, will be put to stock mass balance. Stamp of RSPO SCCS & RSPO SCCS IP and MB Form of summary activity per area (FM-SAG-PKS-PRS revision 01, effective dated January 01, ). The form describe about name of product, code of product, name of area and amount of product) Form of FFB reception report (FM-SAG-PKS-PRS revision 01, effective dated January 01, ). The form describe about source of FFB, GHG value, total of unit and amount of FFB. Form of daily report for product delivery CPO & PK (FM-SAG-PKS-PRS revision 01, effective dated January 01, ). The form describe about name of product, delivery order number, contractor, total of unit, the last number of slip delivery product, GHG value, total of delivery and stock of product Memorandum of Managing Director with number 029/MD/II/ dated February 27,. The memorandum describe that the company will used used identity preserved supply chain models started from April 1, Evidence of procedure socialization for implemented RSPO SCCS Model IP and MB such attendant list of participant and photo documentation. The socialization has been conduct on February 2, for Weighing officer, Security, quality control assistant, production clerk, head of office administration and sustainibilty staff. The implementation of this model will be ensure at the next surveillance. Non-conformance: RSPO (Major non-conformity) The company does not reached the objective is for 100% segregated material. Correction : Ensuring the whole process of FFB reception until sales are already using IP SCCS models, according to the memorandum of Managing Director Reviewing the FFB receipt procedure until sales procedure so it can accommodate the IP and MB models Accept of RSPO FFB certified in accordance with the supply base of Belida mill Corrective Action : Conducting socialization the procedure of FFB receiption until CPO/PK sales to staff and employees. Controlling the whole process, starting from the FFB reception to CPO/PK sales is already using the IP model in accordance with the memorandum od Managing DIrector Ensure the delivery and reception of FFB in accordance with the supply base Belida mill. Auditor Conclusions: Closed Date of closure: February 27, Verification result : The Company has submitted evidence of improvement such as: Supply Chain System & Traceability Procedure (P-SAG-PKS-PRS-14 revision 02, issued date February 01, ). The procedure aims to ensure the traceability requirements (traceability) and systems supply chain (Supply Chain System) in accordance with the standards P & C

23 Page 23 of 27 ISCC-EU and RSPO SCCS-MB (Supply Chain Certification System Mass Balance), and the RSPO SCCS-IP (Supply Chain Certification System Identity preserved). The company will use certified product (CPO and PK) to flushing entire operational process if the company will be changes supply chain models from Mass Balance (MB) to Identity Preserved (IP). The company will conduct 3 (three) times flushing to ensure that there is not contamination between certified and non-certified product. Flushing procedure (P-SAG-PKS-PRS-17 revision 00, issued date January 23, ). The procedure is used as a flushing guidelines or flushing of palm oil mill production line, in case any change of the model supply chain from mass balance models to identity preserved using crude palm oil or palm kernel produced from FFB identity preserved. Crude palm oil or palm kernel which is used for flushing process, will be put to stock mass balance. Stamp of RSPO SCCS & RSPO SCCS IP and MB The implementation of this model will be ensure at the next surveillance.

24 Page 24 of CERTIFIED ORGANISATION S ACKNOWLEDGEMENT OF INTERNAL RESPONSIBILITY 4.1 Date of Next Surveillance Visit The next surveillance visit is planned for March 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 Naik Monang Parlindungan Lingga Lead Auditor Date: February 28,

25 Page 25 of 27 APPENDICES Appendix 1: Certificate

26 Page 26 of 27

27 Page 27 of 27 Appendix 2: List of Abbreviations CPO FFB IPBS IP KUD MB PK SCCS Crude Palm Oil Fresh Fruit Bunches Inti Permata Bunda Satu Identity Preserved Koperasi Unit Desa (Village of Unit Cooperative) Mass Balance Palm Kernel Supply Chain Certification System