Roundtable on Sustainable Palm Oil

Transcription

1 Roundtable on Sustainable Palm Oil Supply Chain 1 st Annual Surveillance Audit Report Report no.: SCCASA1_ Assessment against RSPO Supply Chain Certification Systems Year 2011 FELDA IFFCO OIL PRODUCTS SDN. BHD. Lot 82 Jalan Besi 2, Pasir Gudang Industrial Estate, 81700, Pasir Gudang Johor Malaysia Date of assessment: March 18-19, 2014 Report prepared by: Dian S. Soeminta (RSPO Lead Auditor) Certification decision by: Muhammad Bascharul Asana (COO TUV RHeinland Indonesia) Certification Body: PT TUV Rheinland Indonesia Menara Karya 10th Floor Jl. H.R. Rasuna Said Block X-5 Kav. 1 2 Jakarta Indonesia Phone: Fax: jakarta@idn.tuv.com

2 TABLE OF CONTENTS 1.0 SCOPE OF SUPPLY CHAIN CERTIFICATION ASSESSMENT Executive Summary and Scope of Assessment Certification Details Organisational Information / Contact Person Actual production volumes and projected outputs Summary of Previous Assessment ASSESSMENT PROCESS Certification Body Qualifications of Lead Assessor and Assessment Team Assessment Methodology & Agenda ASSESSMENT FINDINGS Description of Supply Chain Management System Status of Previously Identified Non-conformities Identified Non-conformances against RSPO SCCS Requirements, Corrective Actions Taken and Auditors Conclusions Conclusion and Approval for RSPO Supply Chain Certification CERTIFIED ORGANISATION S ACKNOWLEDGEMENT OF INTERNAL RESPONSIBILITY Date of Next Surveillance Visit Acknowledgements of Internal Responsibility and Formal Sign-Off by Client 16 APPENDICES 17 Appendix 1: Details of Supply Chain Certification Certificate 17 Appendix 2: List of Abbreviations 18 Appendix 3: Observations and Opportunities for Improvement 18 Appendix 4: List of Certified Supplier 18 Appendix 5: List of Certified Customer 19

3 Page 3 of SCOPE OF SUPPLY CHAIN CERTIFICATION ASSESSMENT 1.1 Executive Summary and Scope of Assessment The operations of FELDA IFFCO Oil Products Sdn. Bhd. were assessed against Module B and Module C of the RSPO Supply Chain Certification Systems (SCCS) document (November 2011). The scope of the Supply Chain Certification System assessment covers the implementation of the Segregation and Mass Balance supply chain model of FELDA IFFCO Oil Products Sdn. Bhd. This is not a multi-site certification. The 1 st surveillance audit was carried out on March 18 & 19, 2014 and there is no non conformity found. 1.2 Certification Details The details of RSPO certification of FELDA IFFCO Oil Products Sdn. Bhd. are as per the table below Table 1: Membership & RSPO Supply Chain Certification details of FELDA IFFCO Oil Products Sdn. Bhd. RSPO Membership no.: RSPO Supply Chain Certificate no.: Date of RSPO Supply Chain certificate & validity: 28/05/ /05/2018 Refer to Appendix 1 for further details of the RSPO Supply Chain certificate. 1.3 Organisational Information / Contact Person Table 2: Contacts details of the company are as follows: Company Name: Address: Contact Person: Position: FELDA IFFCO Oil Products Sdn. Bhd. Lot 82 Jalan Besi 2, Pasir Gudang Industrial Estate, 81700, Pasir Gudang, Johor, Malaysia Mr. Zulkafli Bin Yasman Product Head Telephone: ZYasman@feldaiffco.com 1.4 Actual production volumes and projected outputs. Table 3: Certified tonnages claimed, certified tonnages purchased or sold, total and projected CPO and PK production from FELDA IFFCO Oil Product Sdn. Bhd.

4 Page 4 of 20 *Data from period of one year starting March 14, 2013 to March 18, Summary of Previous Assessment Amount (MT) CPO PK Stearin Olein Certified tonnages claimed year Certified tonnages sold* Certified tonnages purchased* Actual Production* 71, ,117 Projected total output for yeah ,683 61,887 The first certification audit was conducted on March 13, During the 1 st certification audit company has established RSPO supply chain certification system. The total 8 non conformities were raised during 1 st audit and company proposed the correction and corrective action to certification body and sufficient to close all non conformities. The company could demonstate the system has fulfilled the RSPO requirements and was recommended as SCCS certified company.

5 Page 5 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 office is located Menara Karya Lt. 10 Jl Rasuna Said Kuningan Jakarta Indonesia. 2.2 Qualifications of Lead Assessor and Assessment Team Name Position Qualifications / Experience Dian Susanty Soeminta Lead Auditor Education: Bachelors Degree in Forestry - Bogor Agriculture Institute. Indonesia, (1990 to 1995). Trainings attended: ISO 9001:2000 lead assessor course Neville Clark; ISO lead assessor course - PE International; OSHAS: 2007 training, Sustainable Forest Management (SFM) - Forest Stewardship Council (FSC) system training; Chain of Custody training for FSC System. RSPO lead Auditor training year 2010 by Pro Forest and Wild Asia. SCCS training by David Ogg Consulting. ISPO Lead Auditor training Working experience: Professional forester since 1995 to Lead Auditor for Forest Stewardship Council (FSC), Sustainable Forest Certification (SFC) and Chain of Custody (COC) Certification. Lead auditor for Environmental Management System (EMS) and Quality Management System (QMS) audits. Conducted sustainable forest management certification audits on FSC and Indonesian Ecolabel Institute (Lembaga Ecolabel Indonesia - LEI) standards for 20 companies, 50 COC FSC/LEI audits, and EMS and QMS audits at more than hundred companies for TUV Rheinland Indonesia. Instrumental in the preparation of TUV Rheinland Indonesia for Sustainable Forest Management Certification System and TUV Rheinland Indonesia for RSPO Certification. Member of Task Force for Indonesian National Interpretation (Guidance on scheme smallholder RSPO certification). Developed TUV Rheinland RSPO Gap Assessment Checklist and report template.

6 Page 6 of Assessment Methodology & Agenda The supply chain certification 1 st surveillance audit was conducted on March 18-19, 2014 as per the assessment program below. The assessment was carried out in accordance with PT TUV Rheinland Indonesia s RSPO audit procedure as well as the RSPO Supply Chain Certification Systems document. An on-site assessment was conducted and the assessment team carried out field and document assessments of compliance to RSPO Supply Chain Certification System requirements. The company proposed the correction and corrective action for all identified non conformities raised to the certification body not more 30 days after the closing meeting. Verification of closure of non-conformances was conducted through document check to all documents submitted. The certification assessment agenda is as explained below. Main Assessment Agenda: Date Location/ Main sites Main activities March 18, 2014 Pasir Gudang Opening Meeting Company Profile Presentation regarding company current situation Verification on previous audit findings. Document check for SCCS System Lunch and break Refinery, Fractionation Plant Tour Incoming material Hydrogenation Product Processing Finished Good Packing March 19, 2014 Sales Department Sales and Export Document Purchasing Department Purchasing document HRD Meeting room Training Preparation of closing meeting Cloisng Meeting End of 1 st surveillance audit 3.0 ASSESSMENT FINDINGS Felda Iffco Oil Products Sdn. Bhd. is a joint venture company with 37.45% shares owned by Felda Palm Industries Sdn. Bhd., 37.45% owned by Felda Iffco Sdn. Bhd., 17.1 % owned by Mitsui and Co. Ltd and 8 % owned by Asahi Denka Kogyo K.k. The company was incorporated on 27 October 1975 under the name Felda Oil Products Sdn. Bhd. with Manufacturing License no dated 8 March 1977 for production of cooking oil for other oil derivatives. The company's name was changed to Felda Iffco Oil Products Sdn. Bhd. as per the approval certificate from the Companies Commission of Malaysia dated 24 December FELDA IFFCO Oil Products Sdn Bhd is mainly involved in refining and fractionating of palm oil leading to the production of its core products such as refined, bleached, deodorized (rbd) palm oil, rbd palm olein, palm mid fractions, rbd palm stearin, soft stearin and palm fatty acid distillate. The facility has received numerous accreditations such as ISO 9001:2008, HACCP, OSHAS and and Halal certifications. FIOP s day-to-day operation is run and managed by more than 101 employees and professionals. The company has received a new manufacturing license under new company name dated 25 January 2012, license no MPOB license for the company is valid until 31/12/2013. Company plan to produces certified products such as: - RBDPO (Refined Bleached Deodorized) - RBDPL (Refined Bleached Olein) - RBDPS (Refined Bleached Sterin) - RBDOL IV 63 (Refined Bleached Olein IV 63) - RBSST IV II (Refined Bleached Stearin IV II) - PMF IV 45 (Palm Mid Fraction IV 45)

7 Page 7 of Description of Supply Chain Management System The following is a description of the findings pertaining to the company s supply chain management system according to the RSPO SCCS requirements, including status of compliance of the company and their outsourced third parties to RSPO SCCS requirements: Section 1: General Chain of Custody System Requirements for the Supply Chain 1. Applicability of the General Chain of Custody System Requirements for the supply chain The company has established supply chain management system integrated with the implementation of quality management systems at ISO 9001:2008 that has been certified by independent certification bodies. Considering the nature of incoming material, company decide to implement Segregation (SG) and Mass Balance system (Module B &C). To support implementation of RSPO supply chain, company has established their quality manual to include all RSPO SCCS requirements i.e. RSPO Manual/SM-001. Relevant procedure was established, e.g. -Purchasing and Incoming certified material (CPO and RBDPO) -Receiving certified material (CPO and RBDPO) -Certified product processing Certified product discharge -Training procedure -Non conforming product -etc. The company has completely established the required standard operation procedure as RSPO SCCS requirement needed stated on below section. FELDA IFFCO Oil Products Sdn. Bhd. is RSPO member with membership number Compliance status: Compliance 2. Documented procedures There is small changes on company s SCCS manual revision 03, dated March, 2014 to cover all RSPO SCCS requirement and follow up action from previous SCC certification audit year Standard operation procedures for incoming material CPO and RBDPO, product processing until product dispatch for each product still exist, while incoming order procedure is handling by trading department in Felda Iffco head office Port Klang Kuala Lumpur. FELDA IFFCO Oil Products Sdn. Bhd. provides quality management system as a part of compliance to this standard as determined on document The mill has identified all processes needed. Their application, interaction and sequence are also determined. There are several existing standard operation procedures such as explained on FELDA IFFCO Oil Products Sdn. Bhd. manual of operation and procedures. The name of the person having overall responsibility for and authority over the implementation of these requirements and compliance with all applicable requirements is Mr. Zulkafli has formally assigned. There is an appointment letter to Mr. Zulkafli as RSPO Management Representative by 18/03/2013. The Letter no. (69) A/2/11/224 dated March 18, 2013 signed by Plant Manager. The letter decided to appointed the Product Head as Management Representative for establishing, documentation, implementing and maintain RSPO supply chain in FELDA IFFCO Oil Products Sdn. Bhd. The letter also determines all jobs description for RSPO SCCS Management Representative. The letter is maintained by the HR department. Compliance status: Full Compliance

8 Page 8 of Purchasing and goods in No changes on Supply Chain Certification System, FELDA IFFCO Oil Products Sdn. Bhd. produce certified product such as of oils and fats with palm and lauric oil or its admixtures and fractions as main component in shortening, margarine, speciality oils and fats, ghee, cooking oils and bulk oils from certified CPO and RBDPO. Most of certified CPO come from SCCS certified palm oil mill under FELDA group such as Lepar Utara Mill and Jengka 21 Mill, purchased from other certified mills such Kekayaan Palm Oil Mill while certified RBDPO come from others certified processor outside FELDA group such as Kek Seng berhad. Purchasing department is the section which is responsible to find certified material from certified supplier. According certified material purchasing procedure all purchased order for certified material will indicate claim of certified material to be purchase whether Identify Preserved, Segregation to be processed as certified product with claim Segregation (SG) while material with Mass Balance claim will be processed for certified product with Mass Balance claim.. The company has mechanism for receiving certified material. To know the quantity or volume of incoming certified material, the road tanker will stop in weigh bridge, the operator will check relevant document and issued weigh bridge. The document to be verified from certified sources are: Delivery note including wet stamp from the origin estate and will be inform certified code including selected SCC Model. All certified product will be transferred to assigned material storage tank, for Mass Balance material will be transfer to storage tank No. 101A, 101B and 101D and for certified segregated material will be transferred to storage tank 101C. The operator will indicate information regarding storage tank location on each weigh bridge ticket according to relevant claim. Since SCCS certificate issued on May 2013, FELDA IFFCO purchased 5, mt CPO with SG claim from 3 certified suppliers i.e. Felda Lepar Utara, Felda Jengka 21 and Kekayaan Palm Oil Mill. There were 7 purchasing contracts with several consignments by road tanker. FIOP also purchased certified sterin (101 Mt) and certified Olein (197 Mt) from certified supplier. Please check the annex of the report below. The company has clear mechanism to check the validity of the Supply Chain Certification of suppliers and period to update supplier information. It was sighted during 1 st surveillance audit, the company revised RSPO Manual SM-001 version 3 dated March 2014, section 11, it has been stated regarding the company s mechanism to check validity of Supply Chain certification of suppliers. It is stated that the company will verify the validity of SCC of suppliers every six (6) month and check updates in the RSPO supplier list through RSPO website for current list of supply chain certified companies ( The company provided a new list of certified supliers during the audit. FELDA IFFCO Oil Products Sdn. Bhd. Now, has mechanism in place for handling non-conforming material/documents or to take appropriate steps when the Supply Chain certification of a supplier is found to be invalid. The company has defined non-conforming products for finished goods and actions taken for next step. The company provide revised RSPO SCCS Manual version 03, dated March, 2014, in section 10. The manual has determined a mechanism for handling non-conforming material/documents. This mechanism has explained the steps when the Supply Chain certification of a supplier is found to be invalid. The company has been defined non-conforming product for finished goods and actions to be taken for next step in the new RSPO SCCS Manual. The company has been established mechanism to inform CB immediately if there is a projected overproduction. Compliance status: Full Compliance 4. Outsourcing activities

9 Page 9 of 20 The facility currently outsources storage of a certain volume of products at Felda Johor Bulkers Sdn. Bhd. The products are stored in 9 tanks with total capacity of all tanks adding up to 12,300 MT. As explained by management, all tanks are cleaned and inspected by FELDA IFFCO Oil Products Sdn. Bhd. before transferring in new material and there will be no mixing of segregated and mass balance material in same tanks. Implementation will be confirmed during next surveillance audit. Transportation of palm olein 63, and palm mill fraction (PMF) 45 is also subcontracted. The tanks are inspected before filling and in case it is found to be not adequately clean, the tank will be rejected. Records of tank inspections are maintained by lab assistants or analysts. The company has a contract with their outsourced companies. The company provides addendum contract with their outsourced companies i.e. Felda Johor Bulkers Sdn. Bhd. and the transporter company, i.e. Yogeswary Agency Sdn Bhd. The addendum contract has included information about the relevant SCC requirement such as FIOP has legal ownership of all products, the outsourcing company will give acsess to certification body if needed. There are declaration of approval from the outsourced company regarding commitment to comply RSPO Supply Chain Certification System dated February 14, 2013 signed by representative of Yogeswari Agency. Compliance status: Full Compliance 5. Sales and goods out The sales and goods out mechanism of the company are described in their procedure of sales of palm oil. There are two mechanisms for sales of out-going finished goods and products in FELDA IFFCO Oil Products Sdn. Bhd., i.e. by road tanker and vessel. Certified product from dedicated storage tank will be dispatched through dispatch pipe directly to the truck tank, while if the product will be transported using vessel, certified product from dedicated storage will be pumped using pipe line to bulker at Pasir Gudang Port then to the Vessel. Information for outgoing certified product will be recorded in several type of records depend on the transfer method used such as: - Vessel: Trade confirmation; Shipping Instruction (SI); tanker Bill of lading (B/L); Certificate of Analysis; Commercial invoice; Custom form No.02; Tanker Form No.02; Packing List; Survey Report (Certifying Suitability and Cleaning); certificate of weight/analysis. Specification of Poram. Commercial invoice /Sales Contract/Shipment Tender/Bill of Lading/Certificate of Origin/Surveyor report/certificate of Analysis/Custom Declaration are also part of sales documents has been indicate FELDA IFFCO SCCS selected model. - Road tanker: Commercial Invoice, Malaysian Palm Oil Board Format L.3 (MPOB Borang L.3) Weight Bridge Ticket and delivery Note. - Container or ISO Tank: Packing list, Bill of Lading (B/L), Certificate of Analysis (F- WINA/QA/011); Weighbridge Ticket. All product dispatched to buyer, every certified product delivered has information about: Reference Number, Date of issued, Delivery Order number, Contract Number, buyer name including the address of buyer, the quantity of the products delivered and Reference to related transport documentation. Information about the name and address of the seller has been attached on every delivery documents e.g. letter head and information inside documents, including information about loading/delivery date. The company has implemented this system for their regular products while the company will include certified product claim and SCC certificate number on each delivery document i.e. Mass Balance (MB) or Segregation (SG) as selected product module. The company provides revised RSPO SCCS Manual, there is now a statement that company will use certification number in all docs once certified by TUV Rheinland. The implmenatation was sight during surveillance audit, company use wet stamp the content including RSPO Certification number , and SCCS selected model (SG or MB) and company s registration number V. All sales documents for certified product have been stamped.

10 Page 10 of 20 Compliance status: Full Compliance 6. Registration FELDA IFFCO Oil Products Sdn. Bhd. is producing derivative product from CPO and RBDPO, during main assessment process company has established specific SOP for registration every transaction to RSPO E-Trace as required by RSPO-SCC standard. However, the company has registered on the RSPO IT system and has any transactions on the system. Since September 2013 until now, there were 22 Etrace transactions, 10 for purchasing certified material and 12 for sales certified product, the summary of Etrace transaction is stated in the Annex below. Compliance status: Full Compliance 7. Training FIOP will conduct a training how to used rubber stamp to stamp in all RSPO relevant logsheets, such as for weighbright operator,incoming material storage operator, product dispatch operator. The training focused on how to control certified material and non certified material if the company decides to use SG or MB. The training was conducted on on March 14, 2014 ( Moh Nur Hanifah; Yunera Yusuf and Norazida) regarding certified material handling RSPO E Trace transaction training also has been conducted through online training, the participant are Mr. Zulkafly Yasman on September 18, 2013 and Saliza Moad Said on March 06, Compliance status: Full Compliance 8. Claims The company has an SOP for making claims certified product according RSPO communication and claims. The implementation of SOP has been consistent and complies with RSPO SCCS requirement, such as claim for MB certified product already indicated on sales documents and export documents. Claim for SG product has been indicated in all incoming certified material documents. Compliance status: Full Compliance Section 2: Modular Requirements: Module B Segregation / Module C Mass Balance B.1 /C.1. Processing The mill receives certified and non-certified material, management decided to implement mass balance for their certified product. The mill has established a clear system and standard operation procedures including record system to ensure that the supply chain model implemented by the facility shall be the same as the model used by their supplier or a less strict system. The mill also has mechanism to prove that the certified product can be traced back to only certified material. The organization has established a mechanism for control and maintenance of the data and docu-

11 Page 11 of 20 ments used in production process i.e. Flow Process of RSPO Oil with document number RS002 this is the mechanism to produce certified product from certified CPO material, while process to produce certified product from RBDPO the mechanism will following document RS003-Process Flow of RSPO Oil. Up until the time of audit, company has so far only produced products with MB model, for this model company will not use identification for production records. Identification will apply only if the company produces products claimed as SG. The mill has records and balances of all receipts of RSPO certified material and non certified material and deliveries of RSPO certified product on daily basis. All volumes of product that are delivered are deducted from the material accounting system according to actual daily conversion ratios. The material balance can show delivered product sales from a positive stock within the past three months, such as records from September to November 2014; December 2013 to February 2014 Company has identified all location and or process categorized as critical controlled point (CCP), this is applicable if the company produce certified product with SG claim. According to Risk Identification of mixing CSCPO-SG/CSRBDPO-SGwith CSCPO-MB or CSRBDPO-MB or Non RSPO Material, there are two location categorized as CCP i.e : 1. CPO and RBDPO unloading bay, because there is tendency of mishandling the RSPO SG materials supply from RSPO SG certified mill/refinery to FELDA IFFCO, contamination between certified material and non certified material might happen during unloading from tankers to dedicated RSPO SG tank. If any mishandling or equipment had broken, the certified material/product will be downgraded to non certified material/product. 2. Feed tank to Pre Treatment Plant The RSPO dedicated tank for segregated (SG) material is VE 101C. The contamination might be happen during feeding the CPO from RSPO dedicated tank to the Pre treatment plant if there is any valve leaking or mishandling during changeover the feed tank. For both potential CCP area, the company define counter measure such as provide training to operator relevant to the process. Pipeline will be blow with air to clear the line before receving certified material to avoid contamination. Ensuring that operator aware on any abnormalities during the process and will be verified by project engineer. All plant must run segregated material to avoid contamination. Project engineer will verify the process line, at the time. Compliance status: Full Compliance B.2 /C.2. Record keeping As stated on declaration 5 dated January 01, 2013 the company stated the retention time of records related SCCS RSPO implementation shall be at least five (5) years. The storage and maintenance of documents is the responsibility of the respective departments. The company has developed a procedure to trace the source of certified materials received, as defined in document name Process Flow of RSPO Oil document dated November 7th 2012 Doc No RS 002, and also developed related documentation to apply the procedure. This procedure and documentation will be applied after the company get SCCS certificate and produces certified product. The company will clearly indicate the supply chain model used with trade names in relevant documents, e.g. purchase and sales contracts with *product name*/ SG Segregation or MB Mass Balance. Compliance status: Full compliance C.3. Mass balancing system

12 Page 12 of 20 FELDA IFFCO Oil Products Sdn. Bhd. has establish a mechanism to ensure that the quantity of physical certified material RSPO mass balance material inputs and outputs (volume or weight) at the physical site are monitored on a real-time basis. All volumes of palm oil that are delivered are deducted from the material accounting system according to actual daily conversion ratios. According the latest material balance records, for period September 2013 to November 2013 total input of certified material is mt, processed material is mt to produce olein products mt and stearin products mt, there is no balance of olein and stearing product at the end of November For period December 2013 to February 2014, certified material carried forward from previous period was mt plus incoming certified purchased between December to February are mt, it was processed mt to become mt of olein products and mt of stearin products, both olein and stearin product were sold with remaining balance stearing products of about 0.01mt. The rest of certified CPO will be carried forward for the next three monthly period (March 2014 to May 2014) i.e mt certified CPO. From the records it was sighted that the company can deliver sales from the positive stock. At the 1 st surveillance audit, the company sighted did not sell short any of their products. The company will inform CB if facing condition to make sell short. All volumes of palm oil fractions and derivatives that are delivered are deducted from the material accounting system according to conversion ratios stated by RSPO, and the record are keep maintained by the document controller. Felda IFFCO is not purchase certified palm kernel to produce certified product, the requirement C.3.5 is not applicable for FELDA IFFCO. Compliance status: Full Compliance

13 Page 13 of Status of Previously Identified Non-conformities During the previous audit, a total of 8 major nonconformances against the RSPO SCCS year 2011 were identified. The company was given a timeframe to close all major non-conformities within 30 days at time of first submission of the report to the certification body last year before SCCS certificate granted. SCCS Non-conformance of 08: Clause The name of the person having overall responsibility for and authority over the implementation of these requirements and compliance with all applicable requirements has not documented. Evidence of correction/corrective action: There is an appointment letter to Mr. Zulkafli as RSPO Management Representative by 18/03/2013. The Letter no. (69) A/2/11/224 dated March 18, 2013 signed by Plant Manager. The letter decided to appointed the Product Head as Management Representative for establishing, documentation, implementing and maintain RSPO supply chain in FELDA IFFCO Oil Products Sdn. Bhd. The letter also determines all jobs description for RSPO SCCS Management Representative. The letter is keep maintan on HR department. Auditor Conclusions: Closed SCCS Non-conformance of 08: Clause The company has no clear mechanism to check the validity of the Supply Chain Certification of suppliers and period to update supplier information. Evidence of correction/corrective action: It was sight during 1 st surveillance audit, the company revised RSPO Manual SM-001 version 3 dated March 2014, section 11, it has been stated regarding the company s mechanism to check validity of Supply Chain certification of suppliers. It is stated that the company will verify the validity of SCC of suppliers every six (6) month and check updates in the RSPO supplier list through RSPO website for current list of supply chain certified companies ( The company provide new list of certified supliers during the audit. Auditor Conclusions: Closed SCCS Non-conformance of 08: Clause The company has no list of suppliers that demonstrates that purchases are made to the material category agreed with their supplier certification scope (IP, SG, MB) Evidence of correction/corrective action: The company provide list of suppliers on document no RSPO-QC-01 rev. 01 dated September 25, The list include the following information about supplier s name, certificate number, supplier s SCCS module, related certification body, validity of supplier s certificate and annual claim capacity. There are 7 certified suppliers, as informed on the appendix 4 of the report below. The list will be updated every six months, as stated on the list of supplier. Auditor Conclusions: Closed SCCS Non-conformance of 08: Clause FELDA IFFCO Oil Products Sdn. Bhd. has no mechanism for handling non-conforming material/ documents or to take appropriate steps when the Supply Chain certification of a supplier is found to be inva-

14 lid. The company also has not define the condition certified product become non-conforming products and mechanism for handling that product. Page 14 of 20 Evidence of correction/corrective action: The company provide revised RSPO SCCS Manual version 03, dated March, 2014, in section 10. The manual has determined a mechanism for handling non-conforming material/documents. This mechanism has explained the steps when the Supply Chain certification of a supplier is found to be invalid. The company has been defined the condition certified product become non-conforming products and mechanism for handling that product in the new RSPO SCCS Manual. Auditor Conclusions: Closed SCCS Non-conformance of 08: Clause The contract between FELDA IFFCO Oil Products Sdn. Bhd. and two existing outsourcing companies (for bulking and transportation) has not included statements regarding permitting access to certification body to audit the outsourcing contractor or operation if an audit is deemed necessary. Evidence of correction/corrective action: The company provides addendum contract with their outsourced companies i.e. Felda Johor Bulkers Sdn. Bhd. and the transporter company Yogeswary Agency Sdn Bhd. The addendum contract has included information about the relevant SCC requirement such as FIOP has legal ownership of all products, the outsourcing company will give access to certification body if needed. There are declaration of approval from outsource company regarding commitment to comply RSPO Supply Chain Certification System dated February 14, 2013 signed by representative of Yogeswari Agency. Auditor Conclusions: Closed SCCS Non-conformance of 08: Clause Sales documents state the RSPO membership number instead of the RSPO certificate number. Evidence of correction/corrective action: The company provided a revised RSPO SCCS Manual, there is now a statement that the company will use certification number in all documents once certified by TUV Rheinland. The implementation was sighted during surveillance audit, where the company uses a wet stamp and the content includes the RSPO Certification number , and SCCS selected model (SG or MB) and company s registration number V. All sales documents for certified product have been stamped. Auditor Conclusions: Closed SCCS Non-conformance of 08: Clause B.2.4 The company has not identified claimed products (SG/MB) in all daily production document/reports. Evidence of correction/corrective action: Information about selected Supply chain module is now recorded on daily production docs, such as: 1. Plant log sheet (Loc process for RSPO SG material form) 2. Tank stock (Quality Product tank form) This is applicable only for certified product claimed as SG, while for MB there will not use specific identification because mix process between certified material and non certified material. FIOP conducted a training on how to used rubber stamp to stamp in all RSPO relevant logsheets and training participants included the weighbridge operator, incoming material storage operator, and product dispatch operator. The training is focused on how to control certified material and non certified material if the company decides to use SG or MB. The training was conducted on on March 14, 2014 regarding certi-

15 fied material handling Page 15 of 20 RSPO E Trace transaction training also has been conducted through online training, the participant was Mr. Zulkafly Yasman on September 18, 2013 and Saliza Moad Said as SCCS document Controller on March 06, Auditor Conclusions: Closed SCCS Non-conformance of 08: clause B.1.1/C.1.1. The company has not identified the location/process (critical control point) stages which have potential for mixing/contamination and provided information about the counter measures implemented to control the mixing condition. Evidence of correction/corrective action: The company has identified all locations and or processed categorized as critical controlled point, this is applicable if the company produce certified product with SG claim. According to Risk Identification of mixing CSCPO-SG/CSRBDPO-SGwith CSCPO-MB or CSRBDPO-MB or Non RSPO Material, there are two location categorized as CCP i.e : 3. CPO and RBDPO unloading bay, because there is tendency of mishandling the RSPO SG materials supply from RSPO SG certified mill/refinery to FELDA IFFCO, contamination between macertified material and non certified material might happen during unloading from tankers to dedicated RSPO SG tank. If any mishandling or equipment had broken, the certified material/product will be downgraded into non certified material/product. 4. Feed tank to Pre Treatment Plant The RSPO dedicated tank for segregated (SG) material is VE 101C. The contamination might be happen during feeding the CPO from RSPO dedicated tank to the Pre treatment plant if there is any valve leaking or mishandling during changeover the feed tank. For both potential CCP area, the company has defined counter measures such as provided training to operator relevant to the process. Pipeline will be blow with air to clear the line before receiving certified material to avoid contamination. The operator will check for any abnormalities during the process and this will be verified by project engineer. All plant must run segregated material to avoid contamination. Project engineer will verify the process line, at the time. Auditor Conclusions: Closed 3.3 Identified Non-conformances against RSPO SCCS Requirements, Corrective Actions Taken and Auditors Conclusions The company can demonstrate their commitment to comply RSPO requirements. There is no nonconformity raised at the 1 st surveillance audit. There are only two potential for improvements found during the audit, 3.4 Conclusion and Approval for RSPO Supply Chain Certification The audit team has confirmed through the audit process that FELDA IFFCO Oil Products Sdn. Bhd. has established and maintains an effective system to ensure compliance with the RSPO Supply Chain Certification System requirements. TUV Rheinland Indonesia therefore approves to maintain the Supply Chain Certification of this organization.

16 Page 16 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 FELDA IFFCO Oil Products Sdn Bhd. Signed on behalf of TUV Rheinland Malaysia.. Zulkafli bin Yasman Product Head Date:.. Dian S. Soeminta Lead Auditor Date: March 24, 2014

17 Page 17 of 20 APPENDICES Appendix 1: Details of Supply Chain Certification Certificate Standard RSPO Supply Chain Certification Systems: November 2011 Certificate Registr. No Based on an audit according to the regulations stated in the RSPO Supply Chain Certification Systems: November 2011, and a signed contract, PT TUV Rheinland Indonesia herewith certifies that the facility(s) listed below are found to be in compliance with the RSPO Supply Chain Certification Systems, version: November This guarantees that the criteria for processing RSPO certified sustainable palm oil through one or more of the supply chain models as stated in the RSPO Supply Chain Certification Systems have been met. Certificate Holder Information Name: RSPO Member no.: Address of operation certified: FELDA IFFCO Oil Products Sdn. Bhd. Lot 82 Jalan Besi 2, Pasir Gudang Industrial Estate, 81700, Pasir Gudang, Johor, Malaysia Management Representative: Zulkafli Bin Yasman (Product Head) Contact no.: address: ZYasman@feldaiffco.com Scope & supply chain model assessed: Refining of crude palm oil and fractionation of refined, bleached and deodorized palm oil with the following supply chain option: Identity Preserved Segregation Mass Balance An audit was performed, Report No. SCC_ Proof has been furnished that the requirements according to RSPO Supply Chain Certification Systems: November 2011 are fulfilled. The due date for all future surveillance audits is 28 March. Validity: The certificate is valid from until Date of first RSPO Supply Chain certification:

18 Page 18 of 20 Appendix 2: List of Abbreviations B/L CPO COC CCP EMS FIOP FSC IP LEI MB MPOB P&C PKO S PMF IV 45 QMS RBDPO RBDPL RBDPS RBDOL IV 63 RBSST IV II SCCS SG SI SFMC Bill Of Lading Crude Palm Oil Chain of Custody Critical Control Point Environmental Management System FELDA IFFCO Oil Product Forest Stewardship Council Identify Preserved Lembaga Ecolabel Indonesia (Indonesian Ecolabel Institute) Mass Balance Malaysia Palm Oil Board Principles & Criteria Palm Kernel Oil Palm Mid Fraction IV 45 Quality Management System Refined Bleached Deodorized) Refined Bleached Olein Refined Bleached Sterin Refined Bleached Olein IV 63 Refined Bleached Sterin IV II) Supply Chain Certification System Segregation Shiping Instruction Sustainable Forest Management Certification Appendix 3: Observations and Opportunities for Improvement No. Observations / Opportunities for Improvement 1 Information about SCCS selected model (MB or SG) for contract no only available on commercial invoice document while other document such as certificate of origin, certificate of Weight and Bill of lading has no information about SCCS selected model except RSPO wet stamp which is used internally not informed to the buyer, such as invoice no and invoice No. inv/ The company s material balance records could be further improved as the type of incoming certified material is not clearly separated. For example, summary of incoming certified CPO must be separated from incoming certified olein, stearin, etc. Appendix 4: List of Certified Supplier No. Name of Supplier Address Telephone no. Contact Person Certificate No. Supply chain model Expiry Date 1. Kekayaan Palm Oil K/B Paloh Johor. Malaysia Mr. Prakash C CU-RSPO IP 27/10/2011 to 26/10/ Lepar Utara 4 P.O. Box 55, Bandar Jengka, Pahang Darul makmur En. Hartono Bin Hanafi SPO SG 12/09/2012 to 11/09/2017

19 Page 19 of 20 No. Name of Supplier 3. Jengka Keck Seng Berhad Address P.O. Box 70, Bandar Jengka, Pahang Darul Makmur, Malaysia Lot 9 milesof jalan Kongkong, Masai, Johor Malaysia Telephone no Contact Person Mohd Noor Bin Latif Chung Yet Yong Certificate No. SPO SGS- RSPO/SC- MY12/ Supply chain model SG SG and MB Expiry Date 14/01/2013 to 13/01/ /07/2013 to 08/07/2017 Appendix 5: List of Certified Customer No Customer Name Graincorp Limited Peerless Holding PTY LTD Erco (Emirates Refining) Co. Ltd Address Level 26,175 Liverpoll Street Sydney NSW 2000 Australia 21 Evans BrayBrook Melbourne Victoria 3019 Australia PO Box 6906, Inside Port Khalid, Sharjah, United Arab Emirates. Telephone no CU-RSPO SCCS Contact Person Mr. Lee Dang Mr. William Felix raj. Certificate No. Mr. David SGS- RSPO/SC- MY13/01268 SGS- RSPO/SC- MY13/01098 CU-RSPO SCCS Supply chain model SG and MB SG,MB MB Expiry Date 11/09/2013 to 10/09/ /01/2013 to 30/01/ /04/2012 to 17/04/2017 Appendix 6: Record of Palm Product Purchased Supplier RSPO Certificate Number Product UTZ Number Volume 1.Kekayaan Palm CU-RSPO CPO/SG RSPO_PO Oil Mill 2.Lepar Utara 4 SPO CPO/SG RSPO_PO Jengka 21 SPO CPO/SG RSPO_PO Jengka 3 C826788CU-RSPO CPO/SG RSPO_PO Keck Seng (M) SGS-RSPO/SC- RBDPL/MB RSPO_PO Bhd MY12/ Keck Seng (M) SGS-RSPO/SC- RBDST/MB RSPO_PO Bhd MY12/00973

20 Page 20 of 20 Appendix 7: Records of Palm Oil Product Sold Supplier RSPO Certificate Number 1. GrainCorp Limited SGS- RSPO/SC- MY13/ GrainCorp Limited SGS- RSPO/SC- MY13/ Peerless SGS- RSPO/SC- MY13/ Peerless SGS- RSPO/SC- MY13/ Product UTZ Number Volume RBDPL/M B RBDPS/ MB RBDPS/ MB RBDPL/M B RSPO_PO RSPO_PO RSPO_PO RSPO_PO