Sop Pengolahan Dan Pengukuran Kualitas Cpo

1. Sop Pengolahan Dan Pengukuran Kualitas Cpo 1
2. Sop Pengolahan Dan Pengukuran Kualitas Cpo 2018

Merencanakan dan melaksanakan pengolahan TBS melalui penerapan praktek pengolahan yang baik (GMP). Tersedia SO P/ instruksi kerja yang diperlukan baik untuk proses pengolahan maupun proses pemantauan dan pengukuran kualitas CPO. Tersedia dokumen hasil uji spesifikasi teknis hasil pengolahan 3. Tersedia dokumen pelaksanaan pengolahan 4.

A company's income through CPO, palm kernel (PK) and/or palm kernel oil (PKO) proceeds. Cessing installation (Instalasi Pengolahan. (SOP), plantation semester report, plantation socialization report, log book stor. Skor kepatuhan A-Report terdiri dari tiga pengukuran, sebagai berikut. Jun 11, 2013 - CPO. Balam Factory. Rokan Hilir - Riau. Well maintained, SIMP has established SOP AGR-301-PJJ.06.11-1 Prosedur Pembuatan dan. Pengukuran Kualitas Limbah Cair, SOP Engineering No.

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1 SGS RSPO Doc. Number: GP 7003A (Principles & Criteria) Doc. Version date: 01 April 2013 Page: 1 of 70 RSPO PRINCIPLES & CRITERIA CERTIFICATION REPORT Public Summary Information Project Number: Report Ref. No.: 4018 ID & 4019 ID N.A Certificate No.: Validity Period: Client Name: PT Hindoli and Scheme Smallhodler Website: RSPO Membership No.: SGS-RSPOPM-MY14/ February 2014 until 24 February Scope: Production of CPO at Sungai Lilin & Tanjung Dalam Mill with capacity of 160MT/hour, in the total of ,32/year using SG module. Type of Certificate Holder: Multisite and Scheme Smallholder Number of Mill: 2 (Sungai Lilin & Tanjung Dalam) Number of Sites: 5 estates and 18 KUDs Mill Capacity: Address: Street and number: Country: Town/City State/Country Zip/Postal code Country 160MT/hour Mill Address PT Hindoli Jl Palembang Jambi Desa Teluk Kemang Kekamantan Sungai Lilin MUBA Sumatera Selatan PALEMBANG INDONESIA Indonesia Annual CPO Produced (MT): Contact Person: Name: Yunita Widiastuti ,32 Position: Group Assurance Manager Phone: Plantation Unit Being Evaluated: Supply Base Name Estate: Total Certified Area (Ha): 35, (Plantation Area) 1. Sungai Tungkal 2. Sungai Pelepah Total FFB Produced (MT): 719, Tanjung Dalam, 4. Penuguan, 5. Mukut Smallholders KUDs: 1. KUD Karya Makmur, 2. KUD Sumber Barokah, 3. KUD Sumber Jaya Lestari, 4. KUD Barokah Jaya, 5. KUD Mulyo Mandiri, 6. KPKS Tri Bakti Sentosa, 7. KPKS Bakti Mulya, 8. KPKS Suka Rezeki, 9. KUD Tunas Mekar Inti, 10. KUD Mekar Sari, 11. KUD Suka Makmur, 12. KUD Mukti Jaya, 13. KUD Bersama Makmur,

2 GP 7003A Page 2 of KUD Jaya Usaha Mandiri, 15. KUD Mandiri Jaya Makmur, 16. KUD Sumber Sari, 17. KUD Sumber Tani Mandiri, 18. KUD Tani Mandiri Jaya End of Public Summary

3 GP 7003A Page 3 of 70 TABLE OF CONTENTS SUMMARY... 4 BASIC EVALUATION INFORMATION... 5 List of Abbreviation Scope of Certification Assessment National Interpretation Used Certification Scope Location and Maps Description of Supply Base and Mill Processing Capacity Date of Planting and Cycle Progress of Outgrowers/Associated Smallholder towards RSPO Compliance Organizational Information and Contact Person Time-bound Plan for Other Management Units Area of Plantation Date Certificate Issued and Scope of Certificate Assessment Process Certification Body Assessment Methodology, Programme, Site Visits Qualification of Lead Assessor and Assessment Team Stakeholder Consultation and List of Stakeholders Contacted Assessment Findings Summary of Findings Corrective Action Request Noteworthy Positive & Negative Observation Status of Non-Conformities Previously Identified Issues Raised by Stakeholders and Findings Acknowledgement of Organization Internal Responsibility Date of Next Surveillance Visit Date of Closing Non-Conformities Acknowledgement of Internal Responsibility and Formal Sign-off Assessment Findings APPENDIX A: CORRECTIVE ACTION REQUEST & OBSERVATION APPENDIX B: NON-CONFORMITIES PREVIOUSLY IDENTIFIED APPENDIX C: TIMEBOUND PLAN APPENDIX D: LIST OF STAKEHOLDERS CONTACTED LIST OF TABLES Table 1: Mill and Supply Base GPS Location... 7 Table 2: Budgeted Yield from Supply Base (FY12/13) Table 3: Mill Processing Data (FY12/13)... 13

4 GP 7003A Page 4 of 70 Table 4: Planting Age Profiles for all Supply Base Estates Table 5: Area Statement of the Supplying Estates Table 6: Assessment Program Table 7: Auditors Profile LIST OF FIGURES Figure 1: Location Map for PT Hindoli Figure 2: Mills Location Map Figure 3: Inti and Plasma Layout Figure 4: Estate Mukut & Penuguan Layout SUMMARY SGS has performed a comprehensive certification assessment of PT Hindoli comprising 2 mills, 5 estates and 18 smallholders KUDs and concludes that its operations comply with the RSPO Principles and Criteria Indonesia National Interpretation (RSPO INA-NIWG) version May SGS therefore recommends that PT Hindoli be approved as a producer of RSPO Certified Sustainable Palm Oil.

5 GP 7003A Page 5 of 70 BASIC EVALUATION INFORMATION MAIN EVALUATION Evaluation Dates: 9 th September -13 September 2013 Team Leader/Team: Affiliate Project Manager: James Ong Date: Report approved by: Haye S Date: 15 Nov 2013 Certification approved by: Kenny Looi Date: 6 June 2013 Database logged by: Othman Shahziela Date: 6 June 2013 SURVEILLANCE 1 Evaluation Dates: Team Leader/Team: Affiliate Project Manager: Report reviewed & approved by: Certification approved by: Database logged by: Date: Date: Date: Date: SURVEILLANCE 2 Evaluation Dates: Team Leader/Team: Affiliate Project Manager: Report reviewed & approved by: Certification approved by: Database logged by: Date: Date: Date: Date: SURVEILLANCE 3 Evaluation Dates: Team Leader/Team: Affiliate Project Manager: Report reviewed & approved by: Certification approved by: Database logged by: Date: Date: Date: Date: SURVEILLANCE 4 Evaluation Dates: Team Leader/Team: Affiliate Project Manager: Report reviewed & approved by: Certification approved by: Database logged by: Date: Date: Date: Date:

6 GP 7003A Page 6 of 70 LIST OF ABBREVIATION Short Form AMDAL ASEAN B3 BOD CPO CBD EFB FFB HCV HGU IPM IUP K3 LC OER PK POM RKL/RPL SOP UKL/UPL AMDAL ASEAN B3 BOD CPO CBD EFB FFB Meanings Analisis Mengenai Dampak Lingkungan dan Sosial (Social and Environmental Impact Assessment) Association of South East Asia Nations Bahan Beracun dan Berbahaya (hazardous waste) Biological Oxygen Demand Crude Palm Oil Convention on Biodiversity Empty Fruit Bunches Fresh Fruit Bunches High Conservation Value Hak Guna Usaha (Land Use Permit) Integrated Pest Management Izin Usaha Perkebunan (Plantation Operation Licence) Kesehatan dan Keselamatan Kerja (Occupational Health and Safety) Land Clearing Oil Extraction Rate Palm Kernel Palm Oil Mill Rencana Kelola Lingkungan/Rencana Pemantauan Lingkungan (Environmental Management Plan/Environmental Monitoring Plan) Standard Operating Procedure Upaya Kelola Lingkungan/Upaya Pemantauan Lingkungan (Environmental Management Efforts/Environmental Monitoring Efforts) Analisis Mengenai Dampak Lingkungan dan Sosial (Social and Environmental Impact Assessment) Association of South East Asia Nations Bahan Beracun dan Berbahaya (hazardous waste) Biological Oxygen Demand Crude Palm Oil Convention on Biodiversity Empty Fruit Bunches Fresh Fruit Bunches

7 GP 7003A Page 7 of SCOPE OF CERTIFICATION ASSESSMENT 1.1 National Interpretation Used The operations of the mill and their supply based of FFB were assessed against the Roundtable on Sustainable Palm Oil (RSPO), Principles and Criteria (P&C) Indonesia National Interpretation (INA-NIWG dated May 2008). 1.2 Certification Scope The scope of certification includes the production of PT Hindoli and its supply base according to the standard of Roundtable on Sustainable Palm Oil (RSPO), Principles and Criteria (P&C) Indonesia National Interpretation (INA-NIWG dated May 2008), National Interpretation for Scheme Smallholders Republic of Indonesia October 2009 and RSPO Supply Chain Certification Standard dated 25 November Location and Maps PT Hindoli is located in Sumatera, Palembang, Indonesia (Figure 1). More detailed information on the estates location and layouts is shown in Figures 2, 3 and 4. The GPS locations of the mills are shown in Table 1. Table 1: Mill and Supply Base GPS Location Mill Longitude Latitude Sungai Lilin E S Tanjung Dalam E S Estate Longitude Latitude Sungai Tungkal E S Sungai Pelepah E S Tanjung Dalam E S Penuguan E S Mukut E S Smallholder KUD Longitude Latitude Karya Makmur E ' 07.24' S2 37' 15.88' Suka Rezeki E ' 49.11' S2 32' 07.04' Mukti Jaya E ' 23.73' S2 27' 54.70' Jaya Usaha Mandiri E ' 28.38' S2 13' 43.19' Sumber Sari E103 46' 59.91' S2 15' 37.49' Suka Makmur E104 2' 47.64' S2 31' 52.30' Tunas Mekar Inti E104 06' 14.58' S2 29' 43.57'

8 GP 7003A Page 8 of 70 Mekar Sari E104 4' 50.10' S2 30' 02.82' Bersama Makmur E103 44' 57.35' S2 14' 05.56' Mandiri Jaya Makmur E103 43' 56.37' S2 16' 28.35' Sumber Tani Mandiri E103 47' 52.02' S2 18' 04.25' Tani Mandiri Jaya E103 44' 07.41' S2 19' 17.23' Sumber Barokah E103 56' 31.87' S2 39' 15.84' Barokah Jaya E103 59' 56.31' S2 36' 55.93' Sumber Jaya Lestari E103 56' 42.87' S2 36' 05.08' Tri Bakti Sentosa E103 55' 36.68' S2 37' 30.60' Bakti Mulya E103 54' 59.94' S2 35' 21.94' Mulya Mandiri E104 00' 9.25' S2 38' 25.33' Karya Makmur E103 58' 07.24' S2 37' 15.88' Suka Rezeki E104 04' 49.11' S2 32' 07.04' Figure 1: Location Map for PT Hindoli

9 GP 7003A Page 9 of 70 Figure 2: Mills Location Map

10 GP 7003A Page 10 of 70 Figure 3: Inti and Plasma Layout

11 GP 7003A Page 11 of 70 Figure 4: Estate Mukut & Penuguan Layout

12 GP 7003A Page 12 of Description of Supply Base and Mill Processing Capacity The FFB is sourced from 5 estates and 18 Smallholders KUDs which is directly managed by PT Hindoli. The OER rate is 22.16%. The budgeted crop yields from each estate are listed in Table 2 below. The budgeted crop yields from each estate are listed in Table 2 below. Table 2: Budgeted Yield from Supply Base (FY12/13) Name of estate Production (Ha) Plantation area Conservation (Ha) Annual FFB Production (MT) Sungai Pelepah 2, , Sungai Tungkal , Tanjung Dalam , Mukut 5, , Penuguan 2, Total 17, , Name of estate Plantation Area Production Conservation (Ha) (Ha) Annual FFB Production (MT) KUD Karya Makmur 1, ,172 KUD Sumber Barokah ,187 KUD Sumber Jaya Lestari ,582 KUD Barokah Jaya ,221 KUD Mulyo Mandiri ,852 KPKS Tri Bakti Sentosa ,917 KPKS Bakti Mulya ,442 KPKS Suka Rezeki 1, ,325 KUD Tunas Mekar Inti 1, ,657 KUD Mekar Sari ,172 KUD Suka Makmur ,426 KUD Mukti Jaya 3, ,365 KUD Bersama Makmur ,566

13 GP 7003A Page 13 of 70 KUD Jaya Usaha Mandiri KUD Mandiri Jaya Makmur , ,189 KUD Sumber Sari ,162 KUD Sumber Tani Mandiri ,940 KUD Tani Mandiri Jaya ,677 Total ,000 Table 3: Mill Processing Data (FY12/13) Financial Year (FY 12/13) Mill Production Figures (MT) (Audited Estate) FFBs Received FFBs Processed CPOs Produced PKs Produced Certified Crop , , , ,29 Outside Crop Total , , , , Date of Planting and Cycle The PT Hindoli own estates and smallholders KUDs palms ware considered matured when approaching four years after planting and productive until the age of 25 years. No replanting program is required as all the palms are not yet over 25 years. The age profiles for all the estates are simplified in Table 3 below. Table 4: Planting Age Profiles for all Supply Base Estates Name of supplying estate Planting Age (Ha) Immature >4-14 years >14-25 years >25 years Sungai Pelepah 0 2, Sungai Tungkal 0 1, , Tanjung Dalam 0 3, Mukut 4, , Penuguan 2, Total 7, , ,

14 GP 7003A Page 14 of 70 Name of supplying estate Planting Age (Ha) Immature >4-14 years >14-25 years >25 years KUD Karya Makmur 0 0 1,002 0 KUD Sumber Barokah KUD Sumber Jaya Lestari KUD Barokah Jaya KUD Mulyo Mandiri KPKS Tri Bakti Sentosa KPKS Bakti Mulya KPKS Suka Rezeki 0 0 1,034 0 KUD Tunas Mekar Inti 0 0 1,386 0 KUD Mekar Sari KUD Suka Makmur KUD Mukti Jaya 0 0 3,848 0 KUD Bersama Makmur KUD Jaya Usaha Mandiri KUD Mandiri Jaya Makmur KUD Sumber Sari KUD Sumber Tani Mandiri KUD Tani Mandiri Jaya Total , Progress of Outgrowers/Associated Smallholder towards RSPO Compliance PT Hindoli has nominated one of the managers for being responsible for implementing RSPO P&C with outgrowers contracted to the Mill. In 1st cycle of their RSPO certificate, PT Hindoli took 3 years to complete RSPO certification audit process for 18 KUDs of scheme smallholders, phase by phase until all 100% audited in last Organizational Information and Contact Person The company contact person details are as follows:

15 GP 7003A Page 15 of 70 Name: Designation: Address: Yunita Widiastuti Group Assurance Manager PT Hindoli Jl Palembang Jambi Desa Teluk Kemang Kekamantan Sungai Lilin MUBA Sumatera Selatan PALEMBANG INDONESIA Contact No.: address: 1.8 Time-bound Plan for Other Management Units Cargill first invested in Indonesia oil palm plantations in 1996 when we acquired PT Hindoli in South Sumatra. PT Hindoli s operations comprise 10,000 ha of oil palm plantation producing fresh fruit bunches that process at two company owned mills into high quality crude palm oil and palm kernel. Cargill is a member of RSPO and the membership number with RSPO is Cargill has achieved RSPO certification for 2 (two) mills and supply base in South Sumatera area since However, Cargill already has the desire to obtain the RSPO certification for other 2 (two) mills and its supply base in West Kalimantan at the end of 2013 and 2014 respectively. Cargill has developed a time-bound plan (Appendix C) for the phased implementation of the RSPO P&C, commencing with mills and estates. Cargill will use the experience gained from achieving certification of the first few mills and estates to implement the RSPO P&C in parallel with the remainder of its operations. The SGS assessment team considers that Cargill is on the right track which is reasonable and challenging, given the widespread geographic locations of its properties, the resources required and the numbers of smallholders involved. 1.9 Area of Plantation The areas of supplying estates for this operating unit are listed in Table 5. Details of production area (mature/immature) are also listed. Table 5: Area Statement of the Supplying Estates Name of supplying estate Immature Mature Area Estates Area (Ha) Non- Cultivated Total (Ha) Sungai Pelepah 0 3, , Sungai Tungkal 0 2, , Tanjung Dalam 0 3, , Mukut 1, , , , Penuguan 1, , ,107.93

16 GP 7003A Page 16 of 70 Total 3, , , , Name of supplying estate KUD Karya Makmur KUD Sumber Barokah KUD Sumber Jaya Lestari KUD Barokah Jaya KUD Mulyo Mandiri KPKS Tri Bakti Sentosa Immature Mature Area Estates Area (Ha) Non- Cultivated Total (Ha) 0 1, , KPKS Bakti Mulya KPKS Suka Rezeki KUD Tunas Mekar Inti 0 1, , , ,386 KUD Mekar Sari KUD Suka Makmur KUD Mukti Jaya 0 3, ,848 KUD Bersama Makmur KUD Jaya Usaha Mandiri KUD Mandiri Jaya Makmur KUD Sumber Sari KUD Sumber Tani Mandiri KUD Tani Mandiri Jaya Total 0 17,594 17, Date Certificate Issued and Scope of Certificate

17 GP 7003A Page 17 of 70 The scope of the certificate to be issued covers the production from 2 (two) palm oil mill and 5 (five) estates and 18 KUDs smallholder. The date of issuance of the certificate will depend on approval of this Assessment Report by the RSPO Secretariat. 2. ASSESSMENT PROCESS 2.1 Certification Body Founded in 1878, the SGS Group is the world s largest auditing, inspection, testing and verification organization. Truly global and benefiting from unique international network of more than 1180 offices, 321 laboratories and full time staff, the SGS Group is able to provide its international clientele with a comprehensive range of services in more than 145 countries. SGS has no manufacturing, trading or financial interests which could compromise its independence. Its guarantee of independence, its reputation for professionalism, integrity and impartiality, as well as it remarkable international network, place the SGS Group in a unique position. The RSPO Programme is the SGS Group s RSPO Certification Programme internationally accredited by the RSPO Executive Board to carry out oil palm plantation and supply chain certification/verification and accreditation for global RSPO certification. 2.2 Assessment Methodology, Programme, Site Visits The assessment was conducted in 5 audit days and involving two mills, 3 estates out of 5 estates (Mukut, Tanjung Dalam & Sungai Tungkal) & 5 KUDs out of 18 KUDs of PT Hindoli based on the sampling formula stated in RSPO Certification System. The audit covers documentation review, internal procedures, management system, field inspection as well as identification of any significant issues for both environment or social issues. A sample of stakeholders was consulted during the assessment to get their feedback on the management doing. The assessment was conducted based on random samples and therefore nonconformities may exist which have not been identified. The methodology for objective evidence collection included physical site inspection, observation of tasks and processes, interview with workers, families and stakeholders, documentation review and monitoring data. The assessment program is included as shown in Table 5 below. Table 6: Assessment Program Date Time Auditor Area / Department / Process / Function 8 th Sept 1700 JO, HBH, MFJ Arrive from Kuala Lumpur Palembang 1700 DYH Arrive from Jakarta Palembang Travel to PT Hindoli 9 th Sept 08:00 All Opening meeting Mill 1 PT Hindoli Presentation

18 GP 7003A Page 18 of 70 Date Time Auditor Area / Department / Process / Function Team 1 P&C + Supply Chain audit PKS Document review Environment Legal 12:30 Lunch Mill visit Schedule waste POME Waste Management 17:30 End Day 1 Dinner Team 2 Inti Estate 1 Field Operations ( Fertiliser, Harvesting, Manuring ), Safety HCV and Buffer zone Boundary Storage fertiliser,chemical Interview stakeholders ( internal ) Housing Worker representatives Document Review legal HGU & AMDAL, procedures, OSH, payslip, meetings, training Data collection at the site office, interview stakeholders 10 th Sept 06:30 Team 1 Inti Estate 2 Muster Storage site OSH / PPE issuance Team 1 Inti Estate 2 Team 2 Plasma Rayon 1 Field Operations ( Fertiliser, Harvesting, Manuring ), Safety HCV and Buffer zone Boundary 12:30 Lunch Interview workers Document Review Housing Worker representatives Document Review legal HGU & AMDAL, procedures, OSH, Field Operations ( Fertiliser, Harvesting, Manuring ), Safety HCV and Buffer zone Boundary, OSH Storage fertiliser,chemical, Interview workers Document Review Housing Worker representatives External Stakeholders Document Review legal HGU & AMDAL, procedures, OSH, payslip,

19 GP 7003A Page 19 of 70 Date Time Auditor Area / Department / Process / Function payslip, meetings, meetings, training training 17:30 End Day 2 11 th Sept Team 1 Mukut Estate Field Operations ( Fertiliser, Harvesting, Manuring ), Safety HCV and Buffer zone Waste Management Team 2 Rayon 2 Inti Estate 3 Field Operations ( Fertiliser, Harvesting, Manuring ), Safety HCV and Buffer zone Boundary, OSH Storage fertiliser,chemical, Waste Management Interview stakeholders Housing & Storage Document Review Interview workers and stakeholders Document Review End Day th Sept Breakfast HBH Mill 2 Supply Chain audit + P& C requirements Site visit Waste management Document Review End Day 04 MFJ, DYH, JO KUD Smallholder audit Field Visit Operation Procedure Good Agriculture Practice Interview sample group Interview head HSE / OSH Management system Organization Chart Document Review 13 th Sept All Document Review of Mill, Estate, Plasma and KUD smallholder Compilation of legal, social, OSH requirement. Closing Meeting 2.3 Qualification of Lead Assessor and Assessment Team SGS Malaysia Sdn Bhd and SGS Indonesia hold copies of educational qualifications, certificates and audit logs for each of the audit team members. SGS has evaluated the qualifications and experience of each audit team member and has registered the following

20 GP 7003A Page 20 of 70 designations for conducting RSPO Assessment. Summary of auditors educational background and experience are listed in Table 6 below. Table 7: Auditors Profile Evaluation Team Team Leader Auditor 1 Plantation Auditor 2 Environment and Supply Chain Auditor 3- Social Notes James S H Ong, a Bachelor of Agriculture Science holder and agronomist in SGS (M) Sdn Bhd. He has many years working experience in agriculture sector in Malaysia and has been working in estates as well in the agrochemical and fertilizer industry. He is well versed with agrochemical and fertilizer applications. Has undergone ISO and RSPO Lead Auditor training and involved in a number of audits on oil palm plantations. Mohd Faisal Jaafar is an auditor of Roundtable on Sustainable Palm Oil (RSPO). He also has been involved in a number of Forest Management (FM) certification. In addition, he is a Lead Auditor for RSPO, trained by RSPO for auditing against RSPO P&C and involved in a number of plantation assessments and audit of palm oil mill. Hoo Boon Han is the SGS SEAP Program Coordinator, Bio Fuels Sustainability. He has successfully completed the RSPO Lead auditor training course for both P& C as well as the Supply Chain. He experienced in environmental monitoring & audit, carbon accounting & reduction, wastewater treatment, waste management and sustainable development experience across Southeast Asia. Dwi Yana Hendrata, a Bachelor of Agriculture Science holder and SSC Auditor in SGS ID (Indonesia). He has 7 years working experience in oil palm plantation sector in Indonesia. He has undergone ISO 9001 and ISCC and ISPO Lead Auditor training and involved in a number of audits on oil palm plantations in Indonesia. 2.4 Stakeholder Consultation and List of Stakeholders Contacted A wide range of stakeholders were contacted 4 weeks before the planned evaluation to inform them of the evaluation and ask for their views on relevant palm oil sustainability issues. These included environmental interest groups, local government agencies and forestry authorities, social groups and workers unions etc. Stakeholder consultation took place in the form of meetings and interviews. Meetings with government agencies and NGOs were held in their respective premises within and near the estates and PT Hindoli s mill. In all the interviews and meetings the purpose of the audit was clarified at the outset followed by an evaluation of the relationship between the stakeholder and the company before discussions proceeded in accordance with relevant RSPO principles, criteria and indicators. See Appendix D for stakeholder s details and comments. Internal and external stakeholders were consulted to obtain the views against the Hindoli s environmental and social issue. External stakeholders such internal stakeholders were interviewed during onsite audit such as harvester or the worker.

21 GP 7003A Page 21 of ASSESSMENT FINDINGS 3.1 Summary of Findings Principles & Criteria As outlined, objective evidence was obtained separately for each of the RSPO Indicators and criterion for the mills and estates. The results for each indicator from each of the operational areas were evaluated to provide an assessment of conformity. A statement is provided for each of the RSPO indicators in order to support the findings of the assessment team. There is 0 Non-conformities and 2 Non-conformities identified during this assessment. Some areas identified with potential areas for improvement has leaded into 5 Observations raised. Details for each Non-conformities and observations are given in Appendix A. Non-conformities has been closed out within the period of 60 days after the assessment. Non-compliances and Observations will be followed up during the next Annual Surveillance Audit which is scheduled to be conducted within the period of twelve months after the RSPO approval of Main Assessment. Principle 1: Commitment to Transparency Criterion 1.1: Oil palm growers and millers provide adequate information to other stakeholders on environmental, social and legal issues relevant to RSPO Criteria, in appropriate language & forms to allow for effective participation in decision making. Criterion 1.1: Scheme manager provide adequate information to other stakeholders on environmental, social and legal issues relevant to RSPO Criteria, in appropriate languages & forms to allow for effective participation on decision making Records of requests and responses must be maintained. The company has established procedure for providing information to stakeholders (transparency), as per reflected in the SOP document entitled Communication Procedure (HIN/MGT/04/SOP- Komunikasi) dated 06 July 2007 revised 05 June The document specifies the objectives of the document that is to manage, mechanism, communicate, (internal and external), participation, health and safety, and environment (SMK3) so that it can be understood by stakeholders effectively. Procedures for communication are also specified within the document covering the following: External; Internal; communication via mail; reporting procedures; and verbal communication. Records of requests from stakeholders are available and recorded individually at estates and mill levels that include land dispute and donation requests. Requests from the stakeholders are mainly for donation for the villages, for examples road construction and maintenance, agricultural equipment, book package, etc. in addition, other assistance such as assistance in providing fuel/diesel is also observed to be recorded. The breakdown of local & foreign worker (updated Nov 2013) as part of the stakeholder as below:

22 GP 7003A Page 22 of 70 Nevertheless, until the date of the audit, there is no request from stakeholders for company s documents (legal, environmental and social) except information request such as Request from Unit Pelaksana Teknis Dinas Kabupaten Banyuasin through a letter Ref: 973/96/Penda dated 26 June 2013 on the submission of the Penyampaian SPT PPP-AP (Request for the usage of surface water). The company has responded on such request through a letter ref: 269/HIN- PA/VII/2013 dated 09 July 2013 enclosing all information pertaining the usage of surface water for the period from January to December Records of requests and responses kept in the book known as Tata tertib pengisian buku keluhkesah kept since 2009 for both estate audited Sg Tungkal and Tangjung Dalam. In Sg Tungkal,a request for road repair by a worker, Suwanto on 2/4/13 was responded on the 3/4/13. Sg Tungkal would respond to the request within 7 days. KPKS SR has a copy for the workers / karyawan request and response known as BUku Saran Saran Anggota and records are kept since The latest record is recordd on 30/8/13 and the action has been acted upon on 31/8/13 Request or known as Proposal from the Desa reps are kept in the Aktivitas social file. Most of the request are for upgrade of infrastructure and for finance support Records of responses to information requests. Records of requests from stakeholders are available and recorded individually at estates and mill levels that include land dispute and donation requests. Requests from the stakeholders are mainly for donation for the villages, for examples road construction and maintenance, agricultural equipment, book package, etc. in addition, other assistance such as assistance in providing fuel/diesel is also observed to be recorded. Nevertheless, until the date of the audit, there is no request from stakeholders for company s documents (legal, environmental and social) except information request such as Request from Unit Pelaksana Teknis Dinas Kabupaten Banyuasin through a letter Ref: 973/96/Penda dated 26 June 2013 on the submission of the Penyampaian SPT PPP-AP (Request for the usage of surface water). The company has responded on such request through a letter ref: 269/HIN- PA/VII/2013 dated 09 July 2013 enclosing all information pertaining the usage of surface water for the period from January to December Records kept in the Buku Saran Saran Anggota The records mentioned in 1 and 2 must be maintained for a period of time determined by the company, taking into account their relative importance. Procedure for document control and storage has been established and made available to the auditing team during the Recertification. As reflected in para of the documented procedure i.e. Pengendalian Dokumen & Rekaman (Ref: HIN/MGT/005/SOP.MR/SOP dated July 2007 and revised June 2012, retention time of records of request information and its response is 3 years. Criterion 1.2: Management documents are publicly available, except where this is prevented by commercial

23 GP 7003A Page 23 of 70 confidentiality or where disclosure of information would result in negative environmental or social outcomes Information and responses must include any relevant or required documentation, in accordance with applicable national laws, such as: Legal: Land titles/user rights (Site Permit (Izin Lokasi), Plantation Operation Permit (Izin Usaha Perkebunan), Land Use Title (Hak Guna Usaha) or other documentation relating to application for Land Use Title in accordance with relevant procedures) Environmental: Environmental and Social Impact Assessment (AMDAL / environmental management and monitoring reports (Laporan RKL-RPL) Social: Documentation of social activities and community programs. Health and Safety Plan Continuous improvement plan In practice, all relevant stakeholders can access to the company s legal, environmental and social documents upon request as follows: - Land titles/use rights - Plantation operation permit - Land title - Analisis Dampak Lindungan (AMDAL) Environmental Impact Assessment (EIA) - Social Impact Assessment (SIA) - Enviromental Management & Monitoring reports (RKL-RPL) - Corporate Social responsibility programs - Business Plan - EHS plan/program Assurance Goals - EHS & Policy - Policy for freedom of association - Policy on the protection of reproductive rights - Policy on minimum wages - Policy on minimum age - Policy on equal employment opportunity - Complaint & dispute resolution procedures - Grievance mechanism and industrial relations - Zero burning policy - Continuous improvement plans - SOP waste management available: HIN/MGT/12/SOP-Pengelolaan Limbah (rev#5, dated 06 Jun 12) for estate and mill One of the contract between PT Hindoli and Smallholder (Petani Peserta Anggota Kelompok Produktif) dated 11 May 2000 with no: 107.4/III/2000 was verified. The records must be maintained for a period of time determined by the company, taking into account their relative importance. In general, records of the above documents that are made publicly available are controlled and monitored using the documented procedures i.e. Pengendalian Dokumen & Rekaman (Ref: HIN/MGT/005/SOP.MR/SOP dated July 2007 and revised June 2012 that specifies that the retention time of records of request information and its response is 3 years. Verification during the Recertification evidenced that the documents are held on site and is made available upon request. In addition, the above documents are also being supplied to all 18 KUDs. Principle 2: Compliance with applicable laws and regulations

24 GP 7003A Page 24 of 70 Criterion 2.1: There is compliance with all applicable local, national and ratified international laws and regulations Evidence of compliance with relevant legal requirements. The company has some permits and documents to comply with all applicable legal requirements, for examples: Environmental Impact Assessment (AMDAL), approved by head of environmental agency Sumatera Selatan Province # 285/KPTS/Bapedalda/2005 dated 14 May 2005 for PT. Hindoli; Environmental Impact Assessment (AMDAL) covering Mukut Estate in Kecamatan Pulau Rimau. Approval # 266/Kpts/2006 dated 01 May 2006 by the head of environmental agency of Sumatera Selatan Province. Site Permit, approved by Head of National Land Bureau # 06/SK-1L/MUBA/1998 dated on 05 March 1998, total area of 10,000 ha. Surat Keputusan Mengeri Pertanian #256/KPTS/KB.320/4/90 dated 11 April 1990 pertaining to Rencana Pelaksanaan Projek PIR-TRANS Kelapa Sawit di Daerah Sungai Lilin covering an area totalling to 17,000 ha Keputusan Menteri Transmigrasi RI # KEP.86/MEN/1991 dated 29 July 1991 tentang Izin Pelaksanaan Transmigrasi PIR-Trans kepada PT Hindoli dengan komoditas Kelapa Sawit di Lokasi Sungai Lilin, Kabupaten Musi Banyuasin, Sumatera Selatan (Authorization by the Minister of Transmigration of Republic of Indonesia on the implementation of transmigrasi PIR-Trains to PT Hindoli for planting oil palm in Sungai Lilin, Kabupaten Musi Banyuasin, Southern Sumatera. Land Use Title (Hak Guna Usaha), approved by National Land Bureau #337/1997 covering an area totalling to 1,247,280 m2 Forest Release Permit, approved by Minister of Forestry # 567/Kpts-II/1999 dated on 21 July 1999 for releasing of forest totalling to 15,550 comprising Block 1 (8,043 ha) and Block II (7,507 ha) located in Sungai Dawas and Sungai Tualang Kabupaten Musi Banyuasin. Plantation Operation Permit (Persetujuan Izin Prinsip) # 593/0331/I dated 27 January 1998 issued by the Governor of Sumatera Selatan pertaining to establishing of plantation totalling to 10,000 ha Kesepakatan KA-ANDAL Pengembangan Perkebunan dan Pembangunan Pabrik Pengolahan Kelapa Sawit PT Hindoli issued by Kepala Bapeldalda Provinsi Sumatera Selatan # 660/557/Bapedalda/I/2004 dated 29 November Plantation Operation License (Izin Usaha Perkebunan) pertaining to approval for operation of PT Hindoli covering both estates and mill that was approved by Governor Sumatera Selatan # 443/KPTS/IV/2005 issued on 15 July License for Transporation (Surat Izin Mengemudi) for transporting FFB are verified as follows: o Rayon D D2 - KUD Jaya Usaha Mandiri: No with a validity until 07 October 2017; No with a validity until 25 July 2014; and No with a validity until 15 May o Rayon D D4 - KUD Sumber Sari: No with a validity until 15 May 2016; No with a validity until 13 June 2017; and No with a validity until 08 January o Rayon A A3 KUD Sumber Jaya Lestari: No with a validity until 07 April 2016; No with a validity until 12 May 2017; and No with a validity until 24 April Industry Operation License (Ijin Usaha Industri), approved by Head of Cooperation, UKM,

25 GP 7003A Page 25 of 70 Industry and trading Agency, Ketapang Regency # 535/002/Kop.UKM.Perindag- C/KBLI.15144/I/2010 dated on 12 January Operation License (Surat Ijin Operasi) for Wheel Loader: Name No. Validity Suparminto OPK3-PAA/IV/ April 2018 Sugino OPK3-PAA/IV/ April 2018 Mus Mulyadi OPK3-PAA/IV/2013 Lahmuddin OPK3-PAA/IV/2013 Kahadi OPK3-PAA/IV/2013 Operation License (Surat Ijin Operasi) for Boiler Man: Name No. Validity Tarmanto 11.P.4385-OPK3-PUBT-B.I./XI/ November 2016 Masrukin 11.P.273-OPK3-PUBT-B.I./XI/ November 2016 Muhammad Ali 11.P.275-OPK3-PUBT-B.I./XI/ November 2016 Parijo 11.P.271-OPK3-PUBT-B.I./XI/ November 2016 Laode Magari 11.P.283-OPK3-PUBT-B.I./XI/ November 2016 KUD is fully complied with laws, certified as ISCC and RSPO (from previous CB Certificate No: SPO ). Certificate of ISCC no: EU-ISCC-Cert-DE & EU-ISCC-Cert- DE were verified. Steam Certificate for engineers, electricians and boiler operator are available, one of the certificate was verified (S/N:IK/081113/02/010; name: Muammad Mansyur) Boilers and diesel generators certificates are available, issued by labour dept. Indonesia (No: /PNK3/PUBT/OB/-I/XII/10; operator name: Yuliandi) Boilers and diesel generators also certified since One of the approval letter (Akte-Izin) as below: No: 06/B01A/BU/2005) was verified Evidence of efforts made to comply with changes in the regulations According to procedure for identification of legal and other requirement and evaluation of compliance (HIN/MGT/002/SOP-Identifikasi & Evaluasi Kepatuhan Hukum), the company identifies and evaluates compliance of the applicable regulations and legislation and its changes periodically (6 monthly). The company has documented system to comply with changes in the applicable regulations and other requirements related to plantation and mill issues, land use issue, environmental issues, labour issues and health and safety issues. Based on list of legislation and regulation for plantation i.e. Resume Peraturan dan Evaluasi Kepatuhan (HIN/MGT/002/Lamp/resume Pertaruan & Evaluasi Kepatuhan) dated July 2007 and revised on 05 May 2013, the auditor observed there are some new regulations and legislations have been updated into the list (last updated on 05 May 2013). A documented system, which includes written information on legal requirements that the palm oil company should comply with. The company has established procedure for identification of legal and other requirement and evaluation of compliance (HIN/MGT/002/SOP-Identifikasi & Evaluasi Kepatuhan Hukum) dated July 2007 and revised July The documented procedures specifies the following procedures: Identifikasi dan Cara mendapatkan; Evaluasi kepatuhan terhadap peraturan dan persyaratan hukum dan persyaratan lainnya

26 GP 7003A Page 26 of 70 Metode evaluasi kepatuhan The company has registered all applicable regulations and other requirements into list of legislation and regulation for plantation within the document i.e. Resume Peraturan dan Evaluasi Kepatuhan (HIN/MGT/002/Lamp/resume Pertaruan & Evaluasi Kepatuhan) dated July 2007 and revised on 05 May The list covered plantation and mill issues, land use issue, environmental issues, labour issues and health and safety issues. Register of law and other requirements includes local laws, national laws, international laws and conventions related to plantation and mill issues, land use issue, environmental issues, labour issues and health and safety issues A mechanism for ensuring that compliance with relevant legal requirements is implemented. A mechanism for ensuring compliance with relevant legal requirements is specified within the document relating to legal and other requirement and evaluation of compliance (HIN/MGT/002/SOP-Identifikasi & Evaluasi Kepatuhan Hukum). The auditor observed that the documented specifies a system to implement all applicable regulations and other requirements related to plantation and mill issues, land use issue, environmental issues, labour issues and health and safety issues as per listed within the list of legislation and regulation for plantation i.e. Resume Peraturan dan Evaluasi Kepatuhan (HIN/MGT/002/Lamp/resume Pertaruan & Evaluasi Kepatuhan) dated July 2007 and revised on 05 May Based on the above document, the compliance to the laws listed is evaluated on a 6 month interval through documentation review, field evaluation and assessment. Criterion 2.2: The right to use the land can be demonstrated, and is not legitimately contested by local communities with demonstrable rights Documents showing ownership or lease of the land in accordance with relevant laws. Land titles and other legal documents are available as follows: Land Use Title (Hak Guna Usaha), approved by National Land Bureau #337/1997 covering an area totalling to 1,247,280 m2 Land Use Title (Hak Guna Usaha), approved by National Land Bureau #00028 covering an area totalling to 9, ha for Penuguan and Mukut Estate Forest Release Permit, approved by Minister of Forestry # 567/Kpts-II/1999 dated on 21 July 1999 for releasing of forest totalling to 15,550 comprising Block 1 (8,043 ha) and Block II (7,507 ha) located in Sungai Dawas and Sungai Tualang Kabupaten Musi Banyuasin. Plantation Operation Permit (Persetujuan Izin Prinsip) # 593/0331/I dated 27 January 1998 issued by the Governor of Sumatera Selatan pertaining to establishing of plantation totalling to 10,000 ha Kesepakatan KA-ANDAL Pengembangan Perkebunan dan Pembangunan Pabrik Pengolahan Kelapa Sawit PT Hindoli issued by Kepala Bapeldalda Provinsi Sumatera Selatan # 660/557/Bapedalda/I/2004 dated 29 November Plantation Operation License (Izin Usaha Perkebunan) pertaining to approval for operation of PT Hindoli covering both estates and mill that was approved by Governor Sumatera Selatan # 443/KPTS/IV/2005 issued on 15 July Industry Operation License (Ijin Usaha Industri), approved by Head of Cooperation, UKM, Industry and trading Agency, Ketapang Regency # 535/002/Kop.UKM.Perindag- C/KBLI.15144/I/2010 dated on 12 January Surat Izin Usaha Perdagangan (Commercial Operation License) for KUD Jaya Usaha Mandiri no. 503/227/PERINDAG/UPDN-I/PK/VIII/2010 with a validity until 06 August 2016 issued by Department of Industry and Trade of Kabupaten Musi Banyuasin (Pemerintah Kabupaten Musi Banyasin Dinas Perindustrian dan Perdagangan) of Sumatera Selatan Province. Several Land Titles for smallholders that are visited during the audit are verified as follows: o Rayon D D2 - KUD Jaya Usaha Mandiri: No issued by National Land Bureau serial no dated 06

27 GP 7003A Page 27 of 70 April 2001; No issued by National Land Bureau serial no dated 06 April 2001; No issued by National Land Bureau serial no dated 24 February 2005; No issued by National Land Bureau serial no dated 06 April 2001; and No issued by National Land Bureau serial no dated 06 April o Rayon D D4 KUD Sumber Sari No. 134 issued by National Land Bureau serial no dated 06 April 2001; No. 142 issued by National Land Bureau serial no dated 06 April 2001; No. 105 issued by National Land Bureau serial no dated 06 April 2001; No. 26 issued by National Land Bureau serial no dated 06 April 2001; No. 449 issued by National Land Bureau serial no dated 01 December o Rayon A A3 KUD Sumber Jaya Lestari No. 675 issued by National Land Bureau serial no dated 07 March 1998; No. 713 issued by National Land Bureau serial no dated 07 March 1998; No issued by National Land Bureau serial no dated 03 September 1998; No issued by National Land Bureau serial no dated 21 September 1998; and No issued by National Land Bureau serial no dated 03 September o Rayon A A7 KUD Bakti Mulya No. 982 issued by National Land Bureau serial no dated 01 March 2005; No. 944 issued by National Land Bureau serial no dated 26 November 1999; No. 890 issued by National Land Bureau serial no dated 26 October 1998; No. 864 issued by National Land Bureau serial no dated 26 October 1998; and No. 816 issued by National Land Bureau serial no dated 26 October Agreement between the group smallholders and the company is viewed. Observed that each of the agreement is a signed between the head of the group smallholders and the company. Such agreement is implemented through the establishment of KUD as the sole body to manage the smallholders plantation on behalf of them. The KUD has been established through the general meeting among all group smallholders. Evidence of minutes of meeting on the establishment of the KUD that is established based on Cooperation Act (Akte Pendirian Koperasi) is available. The summary of the agreement as well as minutes of meeting for the establishment of the visited KUDs are as follows: MOU Minutes of Meeting Establishment Policy

28 GP 7003A Page 28 of 70 Koperasi Unit Desa (KUD) Jaya Usaha Mandiri Perjanjian Produksi, Jual-Beli andan Buah Segar dan Pemeliharaan Tanaman No /XI/1999 dated 22 November 1999 Koperasi Unit Desa (KUD) Sumber Sari Perjanjian Produksi, Jual-Beli andan Buah Segar dan Pemeliharaan Tanaman No /0908/2001 dated 09 August No. 0116/BH/IX/III dated 26 August 2006 Koperasi Unit Desa (KUD) Sumber Jaya Lestari Perjanjian Produksi, Jual-Beli andan Buah Segar dan Pemeliharaan Tanaman No /VI/1998 dated 23 June Koperasi Unit Desa (KUD) Bakti Mulya Perjanjian Produksi, Jual-Beli andan Buah Segar dan Pemeliharaan Tanaman No /III/2000 dated 08 March No. 0026/BH/PAD/KOPPM PP/VII/III dated 8 July 2006 No. 0102/BH/VI/III dated 02 February 2005 No. 0181/BH/VII.3/2010 dated 17 March 2010 Policy dated 3 September 2006 signed by the local authority i.e. Dinas Koperasi, Usaha Mikro Kecil, Menengah dan Pengelolaan Pasar Kabuppaten Musi Banyasin, Sumatera Selatan Policy dated 31 July 2006 signed by the local authority i.e. Dinas Koperasi, Usaha Mikro Kecil, Menengah dan Pengelolaan Pasar Kabuppaten Musi Banyasin, Sumatera Selatan Policy dated 04 August 2005 signed by the local authority i.e. Dinas Koperasi, Usaha Mikro Kecil, Menengah dan Pengelolaan Pasar Kabuppaten Musi Banyasin, Sumatera Selatan Policy dated 24 May 2010 signed by the local authority i.e. Dinas Koperasi, Usaha Mikro Kecil, Menengah dan Pengelolaan Pasar Kabuppaten Musi Banyasin, Sumatera Selatan Evidence that legal boundaries are clearly demarcated and visibly maintained Observed during field visit, all plantation areas have been clearly demarcated and maintained through clearance along the boundary line and also maintenance of boundary poles. Poles were made by National Land Bureau using concrete material. Sampled of verified boundary markers are as follows: boundary marker no. 338 in Sungai Tungkal Estate; and boundary marker BPN 214 in Tanjung Dalam Estate. For smallholders, each of the visited KUD adequately maintains the boundary encompassing the following: Boundary between the plantation and the neighboring plantations; and Boundary between member smallholders land within the plantations. Where there are, or have been, disputes, proof of resolution or progress towards resolution by conflict resolution processes acceptable to all parties are implemented. The company maintains record of social land dispute list (updated 01 April 2013). According to the list, there are one single land dispute case occur in 2011 within the production unit and the case has been resolved through a civil court whereby the claimant is found to be holding false land title and therefore has been charged against the law and has been fined. With regard to the dispute resolution process, such process is conducted by consensus agreement between two parties through compensation. Records of resolution process are kept by

29 GP 7003A Page 29 of 70 Liasion Officer Evidence of land acquisition resolution with free prior and informed consent. The company conducted communication with local community related to land acquisition resolution with free prior and informed consent. Based on data of land acquisition, PT Hindoli has acquired the community land as follows: - Mukut Estate (KKPA) = 9, ha - Tanjung Dalam Estate = 2, ha - Sungai Tungkal Estate = 1, ha - Srigunung Estate = 1, ha - Sungai Pelepah = 2, ha Agreements letters are available and have been verified. For example, agreement between Rifin and PT Hindoli dated 20 December 2006 is verified covering an area of m3 with an agreed payment of Rp 4,999, A mechanism to resolve conflict which is accepted by all parties. The company has established procedures for dispute resolution as follows: 1. Prosedur Pembebasan Lahan (Land Acquisition Procedure) (ISO ) dated 16 July 2007 and revised on 16 July Prosedure Penyelesaian Perselisihan Tanah (Land Dispute Resolution Procedure) (SL-SOP- ADM-07) dated 19 December 2007 and revised on 01 January According to the above-mentioned procedures, when there is a dispute/conflict, the company shall communicate the mechanism highlighted within the procedure to the interested stakeholders (local governments and local community, etc) for dispute resolution mechanism. If there is input from the stakeholders regarding this procedure, the company will review the procedure accordingly. Furthermore, the procedure also specifies stages of dispute resolution covering the following: identification of dispute; clarification; method of compromise; decision; and compensation (based on mutual agreement). Based on data, the company conducted land compensation for conflict resolution through legal means. Criterion 2.3: Use of land for oil palm does not diminish the legal rights, or customary rights, of other users, without their free, prior and informed consent Records of any negotiated agreements between traditional owners of land and plantation companies (if any), supplemented with maps in appropriate scale. Records of negotiations detailing process of consent are available, clearly demonstrating an agreement between local community and PT. Hindoli, for example: official report of land compensation dated 20 December 2006 which clearly demonstrates the free, prior and informed consent from local community to sell their land to PT. Hindoli for a stipulated price which is agreed by the both parties witnessed by local government. This document is found to be accompanied with maps showing the extent of the land and photographs of the local community receiving the compensation amount. A copy of the land payment cheque is also attached in the document as an additional proof of payment made to the traditional land owners. Besides the above, there is an on-going land issue in Penuguan and Mukut plantation whereby 4

30 GP 7003A Page 30 of 70 group communities comprising of 156 families claiming the land within the Mukut and Penuguan estate covering an area of 312 ha. They were interviewed by the management and they were not happy that outsiders were making a claim of land in their area. They had wanted to get involved but upon advised by Hindoli, not to get involved, as this might create a bigger problem between them and claimant Based on records, the company has obtained adequate Surat Ijin Lokasi (Land Title) issued by the local government authority i.e. Bupati Musa Banyuasin as follows: No. 367 dated 23 May 2007 issued for developing the Inti estates (Mukut and Penuguan) covering an area of 11,000 ha; No. 626/KPTS/HUTBUN/2013 issued for developing the plasma estates covering an area of 3,832 ha. Beside the above, the company also has another land title issued by the National Land Bureau with a no , serial no dated 17 February 2011 indicating the total area involved as well as adequate map showing the area to be managed by the company. As far as the plasma is concerned, the audit team note that the company has received Authorization Letter issued by the local authority of Kabupaten Musa Banyuasin. Evidence of letter verified are as follows: Letter no. 650 Tahun 2010 issued for establishing plasma in Mukut covering an area of 402ha for 201 smallholders; and Letter no. 735/KPTS/HUTBUN/2013 issued for establishing plasma in Penuguan coverin an area of 1,350 ha for 675 smallholders. The list of the registered smallholders for the above plasma projects are attached together within the letter that is not including the 156 families of the claimants. Further verification revealed that the company has taken initiative to engage and consult with the claimant to discuss their issues on 26 August Minutes of the meeting held is available where all group leaders are attended the meeting. Also attended the meeting area the representative from the company and head of villages (from surrounding local communities). There is no positive development obtained from the meeting where the claimant insists that the 312 ha of the land of the Mukut and Penuguan Estate shall be handed over to them. As a legal owner of the land, the company sought a legal means by lodging a police report twice since the meeting i.e. on 28 August & 29 August to the local police department. IUP and HGU is available Public Affairs the 312 ha land is inside the HGU area. This area was also inside the Forestry area (HPK concession) that was released to Hindoli in Land Use Title (Hak Guna Usaha), approved by National Land Bureau #337/1997 covering an area totalling to 1,247,280 m2 Evidence of police report are made available as follows: 345/HIN-PA/VII/2013 dated 28 August 2013; and 346/HIN-PA/VII/2013 dated 29 August 2013 Following to the above development, another meeting has been scheduled and held on 03 September 2013 to discuss on the follow up of the issues raised. Observed that the meeting has been attended by the representative of the company as well as the representative of all group leaders of the claimants. However similar to the previous meeting, there is no positive development outcome from the meeting. Therefore, another police report together with an official report to the local government authority was lodged as follows: 358/HIN-PA/VII/2013 dated 05 September 2013 issued to local government authority of Kabupaten Musa Banyuasin; and 359/HIN-PA/VII/2013 dated 05 September 2013 issued to the police department. Based on the above reports, the audit team is informed that all claimants has been summoned to the police department to solicit their statement and explanation as well as their feedback pertaining to this issue and on all reports lodged against them. There is no further development since then except that the company will schedule another consultation with the local communities on 18 September 2013 to discuss further on this issue. A letter for the meeting has been issued to the relevant stakeholders covering the local government authority of Musa Banyuasin, Head of local communities of the surrounding villages, police department and the claimants. The dispute had goes on about 3 weeks. Dispute prolonged due to inaction by local Police after Hindoli had made several Police reports. The Claimant was asking for Plasma area, and after several discussions with Kades/Camat and local Govt Officials at the Bupathi office, all in the

31 GP 7003A Page 31 of 70 meeting agreed that claimant hv no legal claims to the land. Claimant is now being sought by Police based on bodily threats he had made to our staffs. Claimant has disappeared The next surveillance audit will be focusing on the latest development of the land issue Maps of an appropriate scale showing extent of recognized customary rights. Refer to Indicator PT Hindoli and its supplying estates is complying to the requirement of this Indicator Copies of negotiated agreements detailing process of consent. Refer to Indicator PT Hindoli and its supplying estates is complying to the requirement of this Indicator. Principle 3: Commitment to long-term economic and financial viability Criterion 3.1: There is an implemented management plan that aims to achieve long-term economic and financial viability A documented working plan of the company for a minimum of 3 years period. A documented business plan i.e. Tropical Oil Asia Business Plan for 2013/2014 dated 02 April 2013 has been made available to the auditing team during the Recertification. As reflected in the document, budgets and implementation measures for the mill and estate operations (for a period from 203 to 2019 are found to be listed within the document as follows: Safety index; Hectarage of planted palm oil covering both inti and smallholders; Potential yield articulated covering both inti and smallholders; OER extraction; KER extraction; CPO production; Employee/human resources engagement; Conservation area covering HCV and bufferzone; and Environmental covering improvement on the energy efficiency and GHG emission. The company will monitor/review the cost on monthly basis. During the review they run through the cost line by line and identifying over and under for each line. Any over/under should have the reason and action plan in place. Field BSC is available to track all KPIs on monthly basis Annual replanting programme, where applicable, projected for a minimum of 5 years with yearly review. There is a replanting program planned for the next five years whereby the nearest forthcoming replanting program scheduled to be conducted in 2016 (for Rayon A, B and C). Principle 4: Use of appropriate best practices by growers and millers Criterion 4.1: Operating procedures are appropriately documented and consistently implemented and monitored Standard Operating Procedures (SOPs) for estates, from land clearing to harvesting.

32 GP 7003A Page 32 of 70 SOP for estates are available as follows: Early Survey Procedure (HIN/SL/TSD/001/SOP) dated 20 June 2007 and revised on 08 July 2013; Land Clearing Procedure (HIN/SL/TSD/002/SOP) dated 20 June 2007 and revised on 05 July 2013; Road Development Procedure (HIN/SL/TSD/003/SOP) dated 09 June 2007 and revised on 08 July 2013; Road Establishment Procedure (HIN/SL/TSD/004/SOP) dated 20 June 2007 and revised on 08 July 2013; Tide Gate Procedure (HIN/SL/TSD/005/SOP) dated 30 June 2007 and revised on 08 July 2013; Weighbridge Procedure (HIN/SL/TSD/006/SOP) dated 02 July 2007 and revised on 08 July 2013; Water Gate Operation Procedure (HIN/SL/TSD/007/SOP) dated 08 February 2007 and revised on 08 July 2013; Bufferzone Establishment Procedure (HIN/SL/TSD/008/SOP) dated 29 May 2008 and revised on 08 July 2013; Drainage and Irrigation Establishment Procedure (HIN/SL/TSD/010/SOP) dated 07 June 2007 and revised on 08 July 2013; Drainage Procedure (HIN/SL/TSD/011/SOP) dated 09 June 2007 and revised on 08 July 2013; Drainage Rehabilitation Procedure (HIN/SL/TSD/012/SOP) dated 06 January 2010 and revised on 08 July 2013; Management of Scheduled Waste Procedure (HIN/SL/TSD/014/SOP) dated 22 January 2010 and revised on 08 July 2013; Procedure for Plantation Establishment (HIN/SL/TSD/016/SOP) dated 06 June 2007 and revised on 08 July 2013; Procedure for Planting of Legume Cover Crop (HIN/SL/TSD/018/SOP) dated 05 June 2007 and revised on 08 July 2013; Procedure for Block Design and Survey (HIN/SL/TSD/021/SOP) dated 21 June 2007 and revised on 08 July 2013; Road Maintenance Procedure (HIN/SL/TSD/025/SOP) dated 06 June 2007 and revised on 08 July 2013; Procedure for Chemical Weeding (HIN/SL/TSD/027/SOP) dated 29 May 2007 and revised on 08 July 2013; Procedure for Pembersihan Piringan Secara Manual (Manual Weeding) (HIN/SL/TSD/028/SOP) dated 29 June 2007 and revised on 08 July 2013; Fertilizer Sampling Procedure (HIN/SL/TSD/031/SOP) dated 16 November 2007 and revised on 08 July 2013; Mixture of Pesticide Procedure (HIN/SL/TSD/033/SOP) dated 24 June 2007 and revised on 08 July 2013; Spraying Kit Caliberation Procedure (HIN/SL/TSD/034/SOP) dated 23 April 2008 and revised on 08 July 2013; Procedure Fertilizer Application Manual (HIN/SL/TSD/037/SOP) dated 21 June 2007 and revised on 08 July 2013; Procedure Fertilizer Application Mechanical (HIN/SL/TSD/038/SOP) dated 21 June 2007 and revised on 08 July 2013; Surface Water Sampling Procedure (HIN/SL/TSD/050/SOP) dated 09 June 2007 and revised on 08 July 2013; Soil Sampling Procedure (HIN/SL/TSD/052/SOP) dated 11 April 2007 and revised on 08 July

33 GP 7003A Page 33 of ; Pruning Procedure (HIN/SL/TSD/054/SOP) dated 20 June 2007 and revised on 08 July 2013; Harvesting Procedure Manual (HIN/SL/TSD/057/SOP) dated 22 June 2007 and revised on 08 July 2013; Harvesting Procedure Mechanical (HIN/SL/TSD/058/SOP) dated 21 June 2007 and revised on 08 July 2013; Transportation of FFB Procedure (HIN/SL/TSD/059/SOP) dated 22 June 2007 and revised on 08 July 2013; EFB Application Procedure (HIN/SL/TSD/060/SOP) dated 23 April 2007 and revised on 08 July 2013; POME Application Procedure (HIN/SL/TSD/062/SOP) dated 03 January 2010 and revised on 08 July 2013; Early Warning System Census Procedure (HIN/SL/TSD/065/SOP) dated 17 November 2006 and revised on 08 July 2013; Handling of Disease Occurrence Procedure (HIN/SL/TSD/066/SOP) dated 17 November 2007 and revised on 08 July 2013; Handling of Bagworm Procedure (HIN/SL/TSD/068/SOP) dated 17 November 2007 and revised on 08 July 2013; Handling of Rat Occurrence Procedure (HIN/SL/TSD/069/SOP) dated 17 November 2007 and revised on 08 July 2013; Handling of Empty Chemical Container Procedure (HIN/SL/TSD/073/SOP) dated 17 October 2011 and revised on 08 July 2013; and Integrated Pest Management Procedure (HIN/SL/TSD/076/SOP) dated 03 May 2012 and revised on 15 July SOP on safe working practices and application of pesticides is available: EST/SOP EHS/25- Prosedur Khusus Penanganan Pestisida For smallholders, the above SOPs are found to be made available and implemented with the additional SOPs as follows: SOP for Managing Official Letter Input and Output (SOP Pembuatan Surat Keluar dan Penerimaan Surat Masuk) (001/SOP/KUD-JUM/X/2010) dated 23 October 2010; and SOP for FFB Transportation (002/SOP/KUD-JUM/X/2010) dated 23 October Standard Operating Procedures (SOPs) for mills, from reception of FFB to dispatch of Crude Palm Oil and Palm Kernel Oil. As far as the mills is concerned, the following SOPs are verified and evidenced; SOP for reception of FFB: Weighbridge (TD/ADM/03/SOP) dated 3 March SOP for dispatch of CPO: TD-LOG-01-SOP dated 1 May, As there is no PKO production in both mills, therefore there is no SOP for PKO established Records of checking or monitoring of operations. Minimum requirement: once a year. In general, PT Hidoli will follow the procedure Prosedur Scoring Field Audit Tanaman Menghasilkan document No: RSPO-ISCC/ HIN SOP-TSD to record and check or monitoring operations in the filed. Records are first recorded in the Field Agriculture Appraisal-mature form and then the ratings will be transferred to the OMP8 Hindoli Agriculture software. With regard to the above procedures, observed that the above standard operating procedures are annually monitored and revised. Observed also that the latest revision for all procedures is dated in July 2013.

34 GP 7003A Page 34 of Records of operational results. Records of operational results are recorded in the Field Agriculture Appraisal-mature form. As reflected earlier, the above standard operating procedures are annually monitored and revised. Observed also that the latest revision for all procedures is dated in July Criterion 4.2: Practices maintain soil fertility at, or where possible improve soil fertility to, a level that ensures optimal and sustained yield Records of regular soil, leaf, and visual analysis. According to the the PT HIndoli Agronomist, Herwandi Agustian, leaf sampling will be done yearly and soil is done every 5 years. The agronomist will conduct his visual analysis during the leaf sampling operation. After the results are available, the Group agronomist Manager, Johnson Sinaga will prepare the fertilizer recommendation and this will be given to the estate. At the Inti level, application of 3 kg in F34 in Tg Dalam was applied as per recommendation by the agronomist. This was viewed both form the field operation as well as from the fertilizer recommendation report. On the other hand, at the plasma level, evidence in the form of official letter and records of visit made by the company evidenced that the analysis has been conducted on 07 May 2013 by a team from Treatment Supervision Development of PT Hindoli. Leaf analysis is found to be conducted every year. Record of analysis is maintained. Based on record latest record available is dated 24 February As for leaf analysis for 2013, the analysis has been conducted in November Training on best management practices is conducted to all smallholders. Latest training on 10 June 2013 and 02 August 2012 has been conducted covering implementation of best management practices as follows: Spraying; Manuring; Erosion control; Management of beneficial plant; and Management of bufferzone. In addition the above training is also conducted with a view to articulate the recommended practices as per reflected in the soil and foliar analysis conducted by the company. Standard Operating Procedures (SOPs) for mills, from reception of FFB to dispatch of Crude Palm Oil and Palm Kernel Oil. SOP for land application: ID-SOP-LAB-09 dated 01 February 2008 is verified. Records of application of fertilizer are kept in the Realisasi fertilizer file. POME applied as land application, EFB and Decanter cake from the Tanjung Dalam Mill is records are kept in the Realisasi Block file. POME from Sungai Lilin mill is discharge through water ways. During onsite audit, the implementation of field practices is check as the POME was pumped to the Blok G39 for land application. Monitoring of the area on EFB & POME application is recorded and monitored via OMP Database system With regard to the smallholders, there is no evidence of land application observed. Criterion 4.3: Operating procedures are appropriately documented and consistently implemented and monitored Maps of fragile soils must be available. Maps of soils are available.sungai Tungkal estate has 95% Ultisol and 5 % Entisol.

35 GP 7003A Page 35 of There is only one type of soil in Tanjung Dalam, Ultisol. There are no fragile soils in Sg Tungkal Estate and in TDSG. Fragile soils like acid suphate soils in Mukut estate have been identified and water management has been advocated to maintain the water level. A management strategy should exist for plantings on slopes above a certain limit (needs to be soil and climate specific). The estates have a topography map: Peta Topografi. In Sungai Tungkal, Most of the areas are between 0 30m. For Tanjung Estate the topography map report the area is between 0 45m With regard to smallholders, in general there is no fragile soil evidenced within the plantations and that the plantation is generally located within 30m asl Presence of a road maintenance program. Road maintenance program can be found within the Program dan Realisasi upkeep presence of a road maintenance program is available. In the latest financial year, Sg Tungkal Estate has allocated 661,901 million rupiah for the road maintenance. It is categorise under ; a) Grading, compacting and Gravelling b) Culvert and bridges c) Potholes Similar program is found in Tanjung Dalam Estate. SOP for road maintenance program is available: HIN/MKT/TSD/007/SOP-Prosedur Perawatan Jalan Subsidence of peat soils should be minimised under an effective and documented water management programme Currently, there is one area identified as fragile soil that is the shallow peat within the Mukut Estate. Such area has been left as conservation area. A water management table has been advocated to maintain the water level. A management strategy should be in place for other fragile and problem soils (e.g. sandy, low organic matter, acid sulphate soils) Currently, there is one area identified as fragile soil that is the shallow peat within the Mukut Estate. In practice, to cater and manage the fragile soil identified, a drainage and water management is applied on areas where there are acid sulphate soils in Mukut Estate. Criterion 4.4: Practices maintain the quality and availability of surface and ground water Protection of watercourses and wetlands, including maintaining and restoring appropriate riparian buffer zones at or before replanting. From the field visit to field H06, the protection of watercourses and wetlands, including maintaining and restoring appropriate riparian buffer zones was evidence and Sg Tungkal ensures a buffer zone of 50 m. Similar buffer zone is applied in Tanjung Dalam estate found in A23 along Sungai Sawo. The estate will comply to the SOP EST/EHS/WI/27 Program pengamatan dan inspeksi bufferzone (30/04/13) At the smallholders, verification during the field visit to stream and river banks evidenced that Palm trees within three metres buffer from the river banks are marked with red paint to establish the buffer zone. Observed also that there is no evidence of spraying within the bufferzone

36 GP 7003A Page 36 of 70 indicating that the workers has a good understanding in executing the field works and in managing the bufferzone An implemented water management plan. Findings In compliance: Yes: No: X Procedures for water management plan (Doc: ISO Hindoli- SOP Water Management; dated April 2013) cover the watercourse protection and monitoring for all the estates and mill is available. Observed that the estates has procedure and records to implement the following: a) Rainfall b) Pembuatan system drainage c) Watergate management d) Buffer zone Monitoring of effluent BOD. POME s BOD was checked by the company s laboratory weekly. POME sample will send to the external laboratory monthly and maintained the compliance with the discharge limit. Reviewed of the past 12 months result and all the result show compliance. Analysis report 12s/d 19 July 2013 was verified and the BOD complied with the standard Monitoring of mill water use per tonne of FFB. In Tanjung Dalam mill, water usage in the in the mill was monitored and recorded. The average water usage for fiscal year 12/13 is 0.85 m3 per tonne of FFB. A significant decrease in water usage was observed from 1.21 m3 FY08/09 to 0.85 m3 FY12/13 due to the ultrasonic technology applied where no water required in the pressing process in the mill. Criterion 4.5: Pests, diseases, weeds and invasive introduced species are effectively managed using appropriate Integrated Pest Management (IPM) techniques An IPM plan is documented and current. SOP for IPM is available both at the inti and plasma. Observed that the SOP for Integrated Pest Management (Prosedur Pengendalian Hama Terpadu) (RSPO-ISCC/030/SOP/Plasma/V/2012) dated 01 May 2012 and revised on 20 May 2013 is available that specifies the following: Background; ; Definition; Type of Pests as far as Oil Palm Operation is concerned; o o o o o o Leaf eating caterpillar Rats Rhinocerous Beetle Bunch Moth Rayap/Termites Army worm Monitoring of occurrence of pest; Management of Pest Chemical Intervention o Recommended pesticides In the SOP, the KPKS SR has the documented procedure: Prosedur Pengendalian Hama terpadu- ISO RSPO-ISCC/030/SOP/Plasma/V/2012 for leaf eating insects and rats.

37 GP 7003A Page 37 of Monitoring extent of IPM implementation including training. Findings In compliance: Yes: No: At the Inti level, monitoring of leaf eating / Ulat api is conducted monthly and is recorded in the Rekapitulasi lapornan Harian EWS/ Deteksi Ulat Api. The latest census in July 2013 is viewed. Form the rating : Light, medium or heavy will decide on the application of intervention. As far as Plasma Smallholders is concern, there is evidence of training pertaining to IPM given to all workers and management of smallholders. Sample of training given to smallholders in relation to IPM is available i.e. for Rayon A A3 KUD Sumber Jaya Lestari. Training relating to IPM has been given to all group smallholders leaders on 10 July Sample of census conducted for IPM is available i.e. for rat occurrence. Record shown as follows: Date Field Total FFB checked Total FFB damaged 23 May August As reflected in the procedure, should the rat occurrence is above the threshold level i.e. 5%, an intervention is required whereby a chemical is used i.e. cumatetralin. Currently the occurrence is within the threshold level and therefore current IPM using barn owl where a total of 11 boxes has been placed within the smallholders area. Census for barn owl occupancy is conducted on a monthly basis. Latest was conducted on June whereby 10 out of 11 is occupied. However, in KUD Bakti Mulya, the IPM is not adequately implemented. For instance, the census for Barn Owl is not conducted in Latest census was conducted in May (Observation 01) KPKS SR has establish barn owl nest at a ratio of 1 nest per kelompok or 1:50 ha The SR will get Census service form the TSD PT Hindoli, the latest census done on 27/6/13 reported a damage of 3.49%. The use of barn owl is effective as they have not applied rat bait since the new ketua Umum was elected 2 years ago Monitoring of pesticide toxicity units (a.i. /LD 50 per tonne of FFB or per hectare). Monitoring of pesticide toxicity units (a.i. /LD 50 per tonne of FFB or per hectare). Are kept in the pesticide toxicity file. The estate records individual a.i and total a.i toxicity. Based on the records at Sungai Tungkal Estate the following is recorded Similar record is also found in Tanjung dalam Estate Year a.i / LD 50 / MT FFB Sungai Tungkal 2012/ / / / a.i / LD 50 / MT FFB Tanjung Dalam Criterion 4.6: Agrochemicals are used in a way that does not endanger health or the environment. There is no prophylactic use of pesticides, except in specific situations identified in national Best Practice guidelines. Where agrochemicals are used that are categorised as World Health Organisation Type 1A or 1B, or are listed by the Stockholm or Rotterdam Conventions, growers are actively seeking to identify alternatives, and this is documented. % Evidence of use of only approved and registered agrochemicals permitted by the relevant authorities.

38 GP 7003A Page 38 of Only approved chemicals are used by PT Hindoli Estates. Observed that all chemicals used are approved by the Department of Agricultural Indonesia e.g. a) Starane b) Ally c) Garlon d) Roundup Records of pesticide use (including active ingredients used, area treated, amount applied per ha and number of applications) In practice, the records of pesticide use (including active ingredients used, area treated, amount applied per ha and number of applications) are first recorded in the SIV ( Store Issued Voucher ), then it is transferred into the muster chit and eventually transferred into the OMP8 ( Oil Palm management programme). At the smallholders level, the audit team observed that all pesticides inventory is recorded within the Stock Card (Kartu Stok) and Application Card (Kartu Applikasi) containing the details of the chemical, input and output that is recorded on a monthly basis. Samples of verified card for each of the KUDs visited are as follows: Rayon/KUD Usage Balance Jaya Usah Mandiri Sumber Jaya Lestari KPKS Bakti Mulya Latest application record is for June 2013 whereby 180 grm of Metsulfuron is used for smallholder no liter of Round up is used for circle spraying in block 1303 on 30 June liter of Round up is used for circle spraying in block 1701 on 08 September Metsulfuron based pesticide (Metafuron 20 WP) with a total balance of 584grm (as of 31 August 2013) Balance after used recorded in stock card i.e liter as of 30 June 2013 Balance after usage recorded in stock card is 7 liter as of 09 September Documentary evidence that usage of agrochemicals is appropriate for the target species, given at correct dosage and applied by trained personnel in accordance with the product label and storage instructions. Recommended rates are tried by the Technical Service Department and the rates are then documented in the SOP Pencampuran Herbisida.HIN/SL/TSD/033/SOP- Pencampuran Herbisida. Records of training of the premixer Andi, Petugas Spray shed was shown. Training Pencampuran Pestisida on 2/5/13. Included in the training were the spray mandores ( Rusdi, Nuraita, Anita), field filling worker Risnida and to the new staff Abdul Kadir, Program Assurance Officer Records of Sri Gunung spray team of Suraiti, Nilawati, Yulyana, Rukminingsih and Nurhayati training were also recoded. they attended the training for : a) Pencampuran Bahan Herbisida ( 18/9/12 ) b) Pengelolaan Limbah Pestisida ( 16/10/12 ). Both training was conducted by Asst En Wahidin and Adji Nugroho Waste materials from agrochemicals including pesticides containers are properly disposed in accordance with laws and regulations. In Sungai Tungkal,empty chemical containers are triple rinsed and punctured by the premixer sprayshed Andi Satria and later it will be stored in the Limbah B3 ( Store empty containers ).

39 GP 7003A Page 39 of 70 In Tanjung Dalam, Ms Hartati, spray shed keeper does the triple rinse. It will be recorded in the Lembar Neraca Limbah Waste balance form. Every 3 months, disposal is done by the licensed approved collector, PT Primanru Jaya. a copy of his approved licensed was submitted Izin Pengumpulan Limbah Bahan berbahaya dan deracun ( Limbah B3 ) PT Primanru Jaya Tangerang dated 25 Oct 2010 ( for 5 years ) For Tanjung Dalam, the last disposal recorded was 27/8/13 for Accu bekas for 78 kg by PT Primanru For Sri Gunung disposal of 50 kg of the empty chemical container material was done in the similar way and records kept in the Berita Acara Pengiriman Limbah B3 Hazardous waste storage is available for all locations. Sungai Tungkal Estate license, no.374/2009 issued by Environmental Minister Republik Indonesia. Documentary evidence that use of chemicals categorised as World Health Organisation Type 1A or 1B, or listed by the Stockholm or Rotterdam Conventions, and paraquat, is reduced and/or eliminated. Findings In compliance: Yes: No: Although it was reported that Paraquat has ceased being used since 2004 in the estates Sg Tungkal and Tg Dalam, the audit team found that in Mukut Estate, paraquat is found at the premix storage area. (Observation 02) Safety sign, MSDS, EAP kits are available in the max 50m distance from the sprayer gang. At the smallholders level, there is no evidence of the usage of chemical that is listed/categorized within the World Health Organisation Type 1A or 1B, or listed by the Stockholm or Rotterdam Conventions, and paraquat. In general, the chemical used are Metsulfuron and Glyphosate Records of the results of health check-up for those who apply agrochemicals. Spray shed is available in all locations; this is designated place to wash, shower and changes for sprayers prior to work and after the work activities. Records of the results of health check-up for those who apply agrochemicals were available Laporan Hasil Pemeriksaan Kesehatan Berkala July 2012 was shown to prove that sprayers were sent for their annual medical checkup. In 2013, the 246 Sungai Tungkal workers were check-up on 26 August 2013 by external doctors who were sent to the estate. In Tanjung Dalam, 252 workers were checked up on July 2012 including sprayers. In 2013, the workers were checked on the 28 th August The results for all health check up indicated normal. All incident and manhours recorded monthly in our EHS statistic. During onsite audit, sprayers were interviewed and no evidence of any skin issues which is same as the result of medical check-up Records showing that no work with pesticides for pregnant and breastfeeding women. August records of the 71 workers in Sg Tungkal Estate involved with spraying are shown and confirmed that there is no evidence that a pregnant workers work in the chemical related working field. Similar in Tanjung Dalam Estate, the 3 monthly test programme is provided to the 9 female sprayers and 22 manurers. Ms Hartatik s record of her test is viewed. Records are kept in the Hasil Tes Kehamilan kary Semprot file. She was tested negative on 26/8/13. Since pregnancy test is negative for her, it s not required for her to taken off from spraying duties. Criterion 4.7: An occupational health and safety plan is documented, effectively communicated and implemented.

40 GP 7003A Page 40 of Evidence of a documented occupational safety and health (OSH) policy and its implementation. PT Hindoli has Kebijakan Lingkungan Kesihatan Keselamatan kerja, Mutu & Keselamatan Pangan (LK3MKP) posted on the meeting room, workshop and at the store SOP for plan and program of noise exposure risk is available: SL-EHS Hearing Conservation. Noise survey conducted every 6 months in all mill locations/stations. Area > 85 dba is marked with safety sign and hearing protection required. From the noise survey report, noise levels at the boiler station is 82.4 dba. Sterilizer station: 77.9 dba. Engineering control: control room for sterilizer and boiler station Administrative control: - Hearing conservation training - PPE - Hearing conservation procedure - Noise survey Responsible person for health and safety programmes are to be identified and records of regular meetings to discuss health, safety and welfare issues must be kept. The estate manager is the responsible person for health and safety programmes. Safety meeting monthly and attended by the Sg Tungkal EHS Committee chaired by the manager Mr Syaiful Bahri. the committee include a) Safety Section b) Harvesting section c) Upkeep section d) Workshop The latest minuted meetings are dated 29/08/13. Issues discussed are cabling, working tools, Hazardous waste, safe use of motorcycles etc. In Tanjung Dalam, Mr Gali, and for Sri Gunung, Ms Mildahasanah, Programme Assurance Officer are appointed for health and safety programme. The latest minuted meetings are dated 30/08/13. Issues discussed are general conditions, preparation for RSPO, recycling, Housekeeping and orientation for new karyawans. The Ketua Umum, Mr Wardoyo and Ketua IV Soffian is responsible person for health and safety programmes Provision for accident insurance for workers. All workers and staff are protected by PT Hindoli by the use of the Jamstostek Insurance programme. Smallholders is not covered by Jamsostek. The 49 workers + 14 committee do not have insurance cover however the KSPK has an insurance fund known as MF ( Management Fee ) to use in case of accident. The government provide a system known as Jamkesmas ( jaminan Kesihatan masyarakat ) that provide free medication Regular health examination by a doctor for workers in station or exposed to high risk work. During their annual checkup, all workers that are involved in high risk work like spraying are specially tested for

41 GP 7003A Page 41 of 70 a) Cholinesterase enzyme b) Substance glutamic-oxaloacetic transaminase (SGOT) c) LED test And for female sprayers, pregnancy test is done every 3 months. The assessment made for annual medical check-up and type of health testing selected base on job title. Detail SOP on this is available: EST/EHS/17-Medical Fitness and Surveillance. PT Hindoli has employees 31 staff including senior manager and manager under Farmer Development dept. To help coaching and provide guidelines to smallholders. Audiogram is available. All employees that exposed to high noise level area underwent audiometric test annually. The result is within the normal limit. All employees that exposed to high noise level area underwent audiometric test annually. The result is within the normal limit. Providing PPE (earmuff) for employees who exposed to high noise level. Hearing Loss Prevention Audit is part of EHS global audit BR A documented risk assessment for Occupational Health and Safety (OHS). PT Hindoli has listed 2 assessments to document he risk potential of their operation as follows: a) SIF ( Serious, Injury and Fatality) Operation b) Jenis Kerja di Kebun dan analisanya ( Task Inventory Analysis Plantation ) DocNo/Code: EST/EHS/OSA. This is done on a yearly basis and the latest record was done on the 17 th April 13. PPE audit is conducted in monthly basis. During onsite audit, workers have demonstrated well equipped with the PPE and no complaint raised during interviewed at the mill Records of OSH Training. Annual OSH training programme is available. For the estates. Programme assurance Estate Monthly training Schedule. Training for hearing conservation and noise conducted to all employees as part of EHS annually mandatory training topic Accident and emergency preparedness procedure. ERP is found at the store, spray shed and workshop. The emergency action plan is also posted on the notice board at the office Evidence of OHS and first aid equipments available at worksites. Findings In compliance: Yes: No: At the Inti and Mills level, first aid kit was also found in the chemical store, Hazardous Waste store. Mandores are issued with first aid kit and they will bring it into the field during working hours. At the smallholders level, the audit team observed that adequate first aid equipments are found available within the estates offices as well as working field. In addition, the first aid kit is also evidenced within the warehouses and stores. Fire extinguisher is also made available at the suitable places within the operations of the smallholders i.e. in the warehouses, stores and offices. Observed also that the fire extinguisher is updated and checked on a monthly basis. Emergency shower and eye wash are found to be available at chemical stores. However, emergency eye-wash is not available in KUD Sumber Jaya Lestari and KUD Sumber Sari (Observation 03) Workers trained in first aid should be present in both field and mill operations.

42 GP 7003A Page 42 of 70 Findings In compliance: Yes: No: Training records for first aid are kept with the HR. First aid is found to be with the harvesting mandor, Alex Sihombin in the field E07 during workhours in Sungai Tungkal Estate. In Tanjung Dalam/Sri Gunung, first aid kits of mandor bunch checker Sarainto, Mandor Normayulita, Mandore Ari Yuwono and mandore Sutrisno were checked for completeness and available at site. However some of the torches are not working. (Observation 04) First aid kit is also found in the chemical store, Hazardous Waste store Records of the occurrence of any work accidents are maintained and regularly reviewed. PT Hindoli is very concern on the issue of safety. Records of work accidents are kept in softcopy in the Incident Days Record. From the record in Sg Tungkal Estate, it is shown that as at August 2013, the numbers of LTA free days since the last accident Dec 20, 2006 is 2446 days. Criterion 4.8: All staff, workers, smallholders and contractors are appropriately trained A documented training programme for staff, employee and scheme smallholders in accordance with workers positions and competences. The training programme is available that includes: a) Kebijakan LK3MKP Briefing on the ERT Species and HCV (Sosialisasi perlindungan Satwa yang dilindungi dan Area Nilai Konservasi tinggi) b) Kebijakan LK3MKP Bloodborne pathogen c) Kebijakan LK3MKP Handling of Hazardous Material (Komunikasi bahaya bahan kimia) d) Kebijakan LK3MKP Confined Space (Memasuki Ruang Terbatas) e) Kebijakan LK3MKP PPE and Safety in Noise Activity [Alat Perlindung diri (APD) dan Konservasi pendengaran] f) Kebijakan LK3MKP Behavior based Safety harvesting g) Kebijakan LK3MKP Safe Practice in Harvesting (Teknis keselamatan panen) h) Kebijakan LK3MKP Emergency Response Procedure (Rencan tindakan saat keadaan darurat) i) Kebijakan LK3MKP Safety in Motorized Vehicle and Transportation (Keselamatan Berkenderaan sepeda Motor) Training Plan for smallholders are established and be made available to the audit team during the audit. Observed that the training covering all activities within the smallholders palm oil mill operations and is signed by the head of KUD Records of training for each employee are kept. Findings In compliance: Yes: No: At the Inti and Mill level, records of training are kept based on the training programme atttendence and a competence test is conducted to evaluate the participant achievement. At the smallholders level, records of training given to all workers for smallholders are kept at KUD level. Observed samples of training records given are as follows: Date Details Remarks 02 January 2013 Harvesting Training by Head of KUD and attended by 70 harvesters 25 February 2013 Chemical Handling Training given by the field supervisor

43 GP 7003A Page 43 of 70 and attended by 13 workers covering both sprayers and store keeper 04 March 2013 Fertilizer application Training by head of KUD and attended by 31 manurers 26 March 2013 Chemical Handling and awareness of MSDS 02 May 2013 Application of PPE and chemical handling for sprayers 03 June 2013 Application of PPE and chemical handling for sprayers 11 July 2013 Management and handling of empty chemical containers. Awareness of Integrated Pest Management Training given by the field supervisor and attended by 26 workers covering both sprayers and store keeper Training given by field supervisor and attended by 16 sprayers Training given by field supervisor and attended by 20 sprayers, mandore and store keeper Training given by field assistant and attended by 20 participants covering officers of KUDs, mandore and store keeper. 29 July 2013 ERP Training Training by HRD of KUD and attended by 36 workers and officers of KUD 19 August 2013 RSPO awareness Training by HRD and attended by 23 KUD officers 11 February 2013 Manuring (Fertilizer application) Training given by KUD and attended by 26 workers 20 February 2013 Safe operating in harvesting Training given by KUD and attended by 17 harvesters 07 March 2013 MSDS awareness Training given by KUD and attended by 24 sprayers and mandore. 09 April 2013 Chemical handling Training given by KUD and attended by 24 sprayers and mandore. 15 April 2013 Chemical handling and ERP Training given by KUD and attended by 24 sprayers and mandore. 02 May 2013 Application of PPE Training given by KUD and attended by 24 sprayers and mandore. 11 June 2013 Safety and health in transportation 24 June 2013 Awareness briefing for identified ERT species in oil palm estate Training given by KUD and attended by 25 workers (drivers, FFB transporters etc) Training given by officer from Cargill and attended by 29 group smallholders leader 31 January 2013 Safe operating in harvesting Training by field assistant and attended by 27 workers and smallholders 08 February 2013 Chemical handling and ERP Training by field assistant and attended by 19 spraying workers and mandores 14 March 2013 Application of PPE and briefing of MSDS 01 May 2013 Application of PPE and briefing of MSDS 18 April 2013 Awareness briefing for identified ERT species in oil palm estate Training given by field assistant and attended by 29 workers and smallholders Training given by field assistant and attended by 26 field workers Training given by officer from Cargill and attended by 28 group smallholders leader 03 May 2013 ERP awareness training Training by field assistant and attended by 24 participants comprising field workers, mandores and officer of

44 GP 7003A Page 44 of 70 scheme smallholders 21 May 2013 Awareness training on the disposal of scheduled wastes Training by field assistant and attended by 37 participants consist of officers of scheme smallholders, group smallholders leaders, workers and mandores. Based on the above, the audit team observed that all trainings are found to be conducted consistent with the training programme in all estates and plasma. However, in Bakti Mulya the training is found to be no conducted as per required in training programme (Observation 05) Evidence that the company uses experienced or trained contractors. Evidence that the company uses experienced or trained contractors are recorded in the Indoktrinasi Contractor file that indicates the training for contractors who are starting their contract on the Estate site. PT Hindoli has a checklist Keselamatan Kontraktor for each contractor to undergo. The checklist for the building contractors, Mr Zainal EF and Mr Marsuki are documented and signed copies of their training are available. Principle 5: Environmental responsibility and conservation of natural resources and biodiversity Criterion 5.1: Aspects of plantation and mill management, including replanting, that have environmental impacts are identified, and plans to mitigate the negative impacts and promote the positive ones are made, implemented and monitored, to demonstrate continuous improvement Documented impact assessment. PT Hindoli maintain the full scope of ISO The documented impact assessment: SOP- Identifikasi & Evalusasi Aspek dan Dampak Lingkungan is made available during onsite audit and has been reviewed up to 26 April Observed that the above document is made available to all Inti and plasma estates as well as the two processing mills. The impact assessment cover the area: Raw water & wastewater treatment plant, logistic, store, maintenance, lab, ramp, sterilizer, kernel, clarification, boiler & power house. For the Estate Tanjung Dalam/Sri Gunung, the aspect and impact of the environment have been identified. The continuous improvement plan in place to monitor the program implantation status Records of regular report on environmental management in accordance with relevant regulations. All the records are well maintained in accordance with the relevant regulations, following documents were sampled and verified: a. Boiler Emission testing certificate: 660/14/SPPC-UE/I/2013 dated 22 January 2013 b. Hazardous waste transportation license: SK4021/AJ309/DJPD/2013/ HB-0137 c. River water quality analysis: 660/1044/SPPC-ALC/VII/2013 dated 12 July d. Waste water treatment plant discharge quality analysis: 660/846/SPPC-ALC/VI/2013 dated 10 July PT Hindoli report the RKL & RPL (cover mill, estate and plasma) bi-annually to the environmental agency and the most recent report is dated January- June Revisions to environmental management document if there are changes in companies operating areas or activities.

45 GP 7003A Page 45 of 70 Up to dates, no revisions of any operating areas or activities. Criterion 5.2: The status of rare, threatened or endangered species and high conservation value habitats, if any, that exist in the plantation or that could be affected by plantation or mill Records of results of identification of any protected, rare, threatened or endangered species, and HCV habitat. Identification and analysis for HCV of Mukut area is available and up to year In Estate Tanjung Dalam/Sri Gunung, riparian buffer zone of Sawo and Dawas River is identified as the HCV area and they are secondary regrowth forest. The HCV assessment report was prepared by Jarwardi B Hernowo on October GUIDELINES for the IDENTIFICATION of High Conservation Values in Indonesia (HCV Toolkit - Indonesia), If, rare, threatened or endangered species, or high conservation value habitats are present, appropriate measures to preserve them are to be taken. In Estate Tanjung Dalam/Sri Gunung, the riparian bufferzone are HCV4 for protection of the rivers. Only protected bird species were identified and none of the bird is on IUCN Red List. Procedures for high conservation value area in estate (EST/ESH/27; dated 30 July 2012) has different measures such as prohibit spraying and prevent erosion at the buffer zone. At the smallholder office, observed that the list of the endangered, rare and threatened species are kept at each of the plasma smallholder Measures taken for protecting species and their habitats must be in accordance with relevant laws and included actions to control any illegal or inappropriate hunting fishing or collecting activities. For the Sawo and Dawos river, 100 meter has designated as the buffer zone for maintaining and preserving the flora and fauna biodiversity. Monitoring is carried out monthly to check on the signboard, illegal logging, forest fire, hunting and record of protected species sightings at the different point which is already identified within the estate. Monthly monitoring checklist: EST/EH3/WI/27-01 is made available and up to date Posters and signs warning of the presence of protected species are to be produced, distributed, and made visible to all workers and the community, including guidelines in handling them. Signboard of, rare, threatened or endangered species, or high conservation value habitats are present to discourage the hunting, removal of tress along the buffer zones as the estate have identified as HCV that is found to be placed at the designated area within the Inti and plasma estates. Species found on the HCV assessment is listed on the procedure and posted in field The most recent training and briefing had provided to the local community dated 19 July 2013 for the awareness in protecting flora and fauna Companies are to appoint dedicated and trained officers to monitor any plans and activities as above. According to the SOP for the buffer zone monitoring and inspection: EST/EHS/WI/27/01 dated July 2013, officer will be appointed to carry out the monitoring for the buffer zone accordingly. Training for the inspection program dated 12 October 2012 had carried out for the appointed officers. Criterion 5.3: Waste is reduced, recycled, re-used and disposed of in an environmentally and socially responsible manner All waste and pollutions sources are identified and documented.

46 GP 7003A Page 46 of 70 All waste and pollution sources were register in document: Identifikasi & Evalusasi Aspek dan Dampak Lingkungan, it covers both mill and the 4 estates. Other several waste from the mill such as empty fruit bunch, fiber, shell, ash and solid decanter. Most of the waste from the mill will be used either as fuel for the boiler or apply on the field. For the scrap metal, it will sell to the recycler. There is recycle program to reduce domestic waste. This is stated under SOP Waste Management (EST/EHS/23) Estates and mills waste management and disposal are implemented to avoid or reduce pollution. In each estate and mill has a hazardous waste storage area, the permit for storing the hazardous waste no is: Kep Men LH NO.374A year 09 July 2009 will valid till 2014 and need to renew every 5 years. During the onsite audit at Sungai Lilin mill, the designated hazardous storage area is observed. Every 3 months the hazardous waste will be collected by the approved collector. For example, manifest number: , used grease code: D1005D delivered on 12 December The approved contractors are PT Primanru Jaya (License for transport: 269 Year 2010) and PT Prasadha Pamunah Limbah Industri (License for storage and transport: 75 year 2005) Management plan of hazardous waste and instruction of disposal of agrochemicals and their containers waste in accordance with the product label and existing regulations. Findings In compliance: Yes: No: X During the site visit to hazardous waste storage area in Sungai Lilin Mill, waste are labelled and segregated in according the existing regulation. The chemical container will be punched or cut in avoiding any reuse. For the smallholder, they send their hazardous waste to mill for disposal. In each estate and mill has a hazardous waste storage area, the permit for storing the hazardous waste no is: Kep Men LH NO.374A year 09 July 2009 will valid till 2014 and need to renew every 5 years. Every 3 months the hazardous waste will be collected by the approved collector. For example, manifest number: , used grease code: D1005D delivered on 12 December The approved contractors are PT Primanru Jaya (License for transport: 269 Year 2010) and PT Prasadha Pamunah Limbah Industri (License for storage and transport: 75 year 2005). At the smallholder level, record of disposal of scheduled waste especially empty chemical container is available and implemented. Observed that all records are captured within the Receiving and Dispatch of Scheduled Waste (Blanko Penerimaan & Pengeluaran Limbah Bekas Kemasan Pestisida) that is recorded on a monthly basis and based on name of chemical. Sampled of the verified record are as follows: Rayon D-D4: KUD Sumber Sari Galon Round-up where as of 31 July 2013, a total of 25 chemical containers has been disposed to the Sungai Lilin POM for further disposal through scheduled waste collector. Rayon A-A3 KUD Sumber Jaya Lestari Ally 250 grm on 20 August chemical containers are dispatched. Rayon A-A7 KPKS Bakti Mulya Round up on 07 May chemical containers are dispatched. However, the audit team observed that the scheduled waste container in Bakti Mulya is not disposed of as per required in the local laws whereby the audit team note that the waste is kept for exceeding 90 days in the store ( CAR 01) Records of waste monitoring/analysis. Total 12 types of hazardous waste recorded and monitored. The information such as type of waste, source, weight and the expiring date for disposal are recorded accordingly. The waste monitoring report need submit to Ministry of Environmental every 3 months. For example, documents including waste inventory record (April to June 2013), manifest (April to June 2013)

47 GP 7003A Page 47 of 70 and the drum status inspection (April to June 2013) submitted to the environmental agency dated July Criterion 5.4: Efficiency of energy use and use of renewable energy is maximised Records of monitoring renewable energy use and its efficiency analysis (energy/ton CPO, or energy/ton palm product) Fiber and nut shell used to fuel the boiler. For the fiscal year 12/13, 96.9% kwht/mt CPO is recorded. Analysis for renewable energy against non renewable energy is available for the past 3 years. The result for non renewable against renewable energy observed as below: a. FY10/11: 11.2% v/s 88.8% b. FY11/12: 9.7% v/s 90.3% c. FY12/13: 7.1% v/s 92.9% For the renewable energy, it use EFB and nut shell used to fuel the boiler while the nonrenewable energy is using genset which fueled by diesel. The mills achieved the reduction of diesel usage through using the steam turbine to replace genset for generating electricity. The diesels observed drastically reduce from 1.37/MT FFB in FY08/09 to 0.41 /MT FFB in FY12/13. Records of monitoring of fossil fuels use for operational reason and its efficiency analysis. Records of fossil fuels available and maintained. Trend charts are used to monitor the diesel consumption by monthly. The trend of fossil fuels consumption observed reducing since FY11/12. The diesel consumption in FY12/13 was 230,310 liters compare to 294,759 liters in FY11/12. Criterion 5.5: Use of fire for waste disposal and for preparing land for replanting is avoided except in specific situations, as identified in the ASEAN guidelines or other regional best practice Documented assessment where fire has been used for preparing land for replanting. Zero burning policy has been implemented within PT Hindoli. In the procedures for land clearing (HIN/SL/TSD/002/SOP: Prosedur land clearing; date June 2007) stated that the burning is prohibited for preparing land for new planting and replanting Records of implementation of zero burning policy. Interview with the workers, smallholders as well as field workers in the smallholders confirmed that they are aware of the zero burning policy. Signage for no burning sighted during onsite audit Procedures and records of emergency responses to land burning (Tanggap Darurat Kebakaran Lahan) Procedures for emergency action plan (SOP Rencana Tindakan Keadaan Darurat: EST/EHS/07 updated 19 July 2013) clause 2.1 stated the action in responding for the outbreak for the fire Presence of appropriate fire extinguishers and facilities, depending on the risks assessment. Fire extinguishers, hosing, smoke/ heat detector were observed around the mill, general office, estate and plant building. Checklist of all facilities is made available during onsite audit and the inspection of the equipment will be conducted monthly. Criterion 5.6: Plans to reduce pollution and emissions, including greenhouse gases, are developed,

48 GP 7003A Page 48 of 70 implemented and monitored Evidence of identification of pollution and emissions sources at mills. PT Hindoli has documented all the pollution and emissions sources at mills in the document for identification and evaluation of environmental aspect & impact (Doc: SOP-Identifikasi & Evaluasi Aspek Dampak Lingkungan; rev: 3/7 Feb 2011). Boilers are equipped with smoke density monitor Monitoring of pollution and emission quality of the sources identified. A matrix for monitoring and analysis (doc: ISO MGT/07-01-Matrik Pemantauan & Pengukuran Kenerja Lingkungan; rev 2/Jan 12, 2012) identified all the monitoring of pollution and emission quality of the sources. The monitoring for the pollution and emission includes: a. Effluent (POME) from wastewater treatment plant. There is testing for verification the quality of effluent and the result is within the regulated limit. b. River water c. Domestic wastewater (storm drain) d. Boiler s emission monitoring e. Genset s emission monitoring (complied with Ringleman smoke observation chart standard. Standard = 40%) f. Land application etc Records of efforts and strategies employed to reduce pollution and emissions. Tanjung Dalam mill practices zero effluent discharge as they applied the POME on field. The mills achieved the reduction of diesel usage through using the steam turbine to replace genset for generating electricity. The diesels observed drastically reduce from 1.37/MT FFB in FY08/09 to 0.41 /MT FFB in FY12/ Records of identification, monitoring, and treatment methodology for POME. In Sungai Lilin mill, treated POME discharged into the river while Tanjung Dalam mill will pump the POME to the field for land application. POME is checked by the company s laboratory daily. POME sample will send to the external laboratory monthly and maintained the compliance with the discharge limit. Analysis report 12s/d 19 July 2013 is verified and all results are found to be complying with the standard. Tanjung Dalam mill: Various parameters for POME are tested monthly including BOD, COD, TSS, O&G, ph and TKN. The inlet and the outlet of the POME are recorded m3 and m3 respectively from July 12 to June 13. Principle 6: Responsible consideration of employees and of individuals and communities affected by growers and mills. Criterion 6.1: Aspects of plantation and mill management including replanting that have social impacts are identified in a participatory way, and plans to mitigate the negative impacts and promote the positive ones are made, implemented and monitored, to demonstrate continuous improvement. improvement Documented environmental and social impact assessment, including details of positive and negative social effects that may be caused by plantations and mills, and documented participation of affected parties and local communities.

49 GP 7003A Page 49 of Dedicated social impact document which clearly identifies positive and negative social affects that maybe caused by plantation and mills are found to be incorporated within the following documents: Environmental Impact Assessment (AMDAL), approved by head of environmental agency Sumatera Selatan Province # 285/KPTS/Bapedalda/2005 dated 14 May 2005 for PT. Hindoli; Environmental Impact Assessment (AMDAL) covering Mukut Estate in Kecamatan Pulau Rimau. Approval # 266/Kpts/2006 dated 01 May 2006 by the head of environmental agency of Sumatera Selatan Province. Based on the social impact assessment conducted, the auditing team observed that the SIA is conducted in a participatory manner with relevant stakeholders. In addition, there is also evidence that a socialization programme with local communities is conducted as part of the social impact assessment. There is evidence of regular socialization with local communities. Regular monitoring and management of social impact, with the participation of local communities The company has conducted regular monitoring and management of social impact, with the participation of local communities in term of Corporate Social Responsibility (CSR). Records of stakeholder consultation with local communities evidenced that there is no complaints received from the local communities regarding the operations of the company except on one issue pertaining to land acquisition (as mentioned earlier in this report) that is solve through civil court. Results of revisions to the environmental management document that encompasses social impact assessments in the event there are changes to company s operational scope, in accordance with existing regulations. The company has established its documented Environmental Impact Assessment (EIA/AMDAL) that is approved by Head of Badan Pengendalian Dampak Lingkungan Hidup Daerah dan Pemerintah Daerah Provinsi Sumaterea Selatan (BAPELDALDA) dated on 14 May 2005 and 01 May 2006 for PT Hindoli and Mukut Estate respectively. EIA document analysed and specified the environmental impact during oil palm operations such as biodiversity, water quality, ambient air quality, protected area, erosion and social-economic-culture of local communities A regular and scheduled environmental management and monitoring Report. There is evidence of a regular and scheduled environmental management and monitoring report as per reflected in the following documents: 1. The bi-annual environmental management and monitoring plan is formulated and sent to the Dinas Lingkungan Hidup (Environmental Agency). The latest report (for January to June 2013) is available that was sent in July 2013; and 2. A time-bound monitoring plan based on the RPL and RKL is available in both plantations and the mill. i.e. document titled of Matrix of monitoring and measurement (Matriks Pemantauan & Pengukuran Kinerja Lingkungan (HIN/MGT/07/01/Matrik Pengukuran & Pemantauan Kinerja) updated 01 July This matrix consist of monthly monitoring (waste water, general condition), 3 monthly monitoring (spraying set, domestic waste water, clean water supply to the housing, ambient air, river water quality), 6 monthly monitoring (soil water analysis, flora fauna, emission, drink water working area noise, erosion) and yearly monitoring (working area i.e. noise vibtration, Total suspended particle, working temperature, lighting, foliar analysis, soil analysis,). In addition, there is also monitoring of hazardous waste that is implemented periodically depending on the permit Particular attention paid to the impacts of outgrower schemes (where the plantation includes such a scheme). Environmental management and monitoring for smallholders is covered by PT Hindoli because all activity are controlled by PT Hindoli. Criterion 6.2: There are open and transparent methods for communication and consultation between growers and/or millers, local communities and other affected or interested parties.

50 GP 7003A Page 50 of Documented procedures and records of communication and consultation with the communities. PT Hindoli has established the SOP document entitled Communication Procedure (HIN/MGT/04/SOP-Komunikasi) dated 06 July 2007 revised 05 June The document specifies the objectives of the document that is to manage, mechanism, communicate, (internal and external), participation, health and safety, and environment (SMK3) so that it can be understood by stakeholders effectively. Procedures for communication are also specified within the document covering the following: External; Internal; communication via mail; reporting procedures; and verbal communication. PT Hindoli conducted periodical meeting with local communities to discuss about social issues, CSR, etc. example of consultation dated 31 July 2013 is available and verified during the audit. Observed that the consultation is attended by 71 representative of the surrounding local communities. Records of communication and consultation with the local communities are available and verified e.g. consultation with local communities pertaining to the pricing of FFB dated 21 August 2013 (for a period of August 2013). Observed that the above consultation is conducted every two weeks. At smallholders level, periodical meeting and consultation with all relevant stakeholders as well as scheme smallholders are found to be conducted. Example of the meeting observed during the audit i.e. KUD Sumber Jaya Lestari on 04 February 2013 and KPKS Bakti Mulya on 05 March Responsible person at KUD level in relation to the communication with scheme smallholders and stakeholders is given to HRD of the KUD Maintenance of a list of stakeholders. Stakeholder list are available. The list updated April 2013 listed all relevant stakeholders identified within Indonesia especially Sumatera Selatan Region covering the relevant government agencies, relevant NGOs (both social and environmental, neighbouring estates, local communities and contractors, women group, that have direct and indirect impact with the plantation operations of the company. At smallholders level, stakeholder list are available covering all local communities residing within the vicinity of the scheme smallholders area including the head of communities, regional government agencies offices, contractors, women representative as well as neighbouring estates (which majority is the external smallholders) Records of local communities aspiration and responses or follow up actions by companies to these requirements. All action taken following the communication and consultation with the local communities as well as other relevant stakeholder groups are responded and recorded in the external communication logbook detailing the following: issues raised by the stakeholders; Details of the action that have been taken following issues raised by the stakeholders; date of the action taken; appointed responsible person to handle each of the communications. Stakeholder consultation conducted prior to the audit evidenced no feedback received from the local communities. This is further verified during the audit whereby the stakeholders have received notification from SGS and they are aware of the audit and that no issues raised against the

51 GP 7003A Page 51 of company s operations. A dedicated person responsible for consulting and communicating with local communities. Public Affair and Government Liaison Officer has been assigned for consulting and communicating with local communities. The appointment letter as well as established documented agreement specifying the role and responsibilities of the officer dated 01 March 2013 is made available to the auditor during the audit. Criterion 6.3: There are open and transparent methods for communication and consultation between growers and/or millers, local communities and other affected or interested parties An open system, which is accepted by affected parties, to receive complaints and to resolve dispute in an effective, timely and appropriate manner. PT Hindoli has established open system to receive complaints and to resolve dispute in an effective, timely and appropriate manner, which is accepted by affected parties: 1. SOP for Communication Procedure (HIN/MGT/04/SOP-Komunikasi) dated 06 July 2007 revised 05 June Prosedur Pembebasan Lahan (Land Acquisition Procedure) (ISO ) dated 16 July 2007 and revised on 16 July Prosedure Penyelesaian Perselisihan Tanah (Land Dispute Resolution Procedure) (SL-SOP- ADM-07) dated 19 December 2007 and revised on 01 January PT Hindoli has also provided suggestion boxes and all workers can access to Cargill Ethics and Compliance ( to tell complaints Records of handling of the complaints. Findings In compliance: Yes: No: X There is a proper system in place for handling of complaints from the staff/workers and also local communities through utilizing the Communication Procedure (HIN/MGT/04/SOP-Komunikasi) dated 06 July 2007 revised 05 June 2012 that specifies the following communication procedures: External; Internal; communication via mail; reporting procedures; and verbal communication. Besides the above procedures, the following documents are also applied for resolution of conflicts and disputes raised by the relevant stakeholders: Flowchart of the conflict resolution Land acquisition document At the estates level (both inti and plasma), the audit team note that the company has established a form/file to record all communication and consultation held between the management and the stakeholders covering both external (relevant government agencies, NGOs etc) and internal (workers etc). However, verification at all of the KUD visited evidenced there is no record of communication and consultation between KUD and the employees of KUD made available to the audit team during the Recertification Audit. (MINOR CAR 02) Procedures for the identification and calculation of fair compensation for the loss of legal or customary right of the land, with the involvement of local community representatives and relevant agencies and made publicly available. PT Hindoli has established SOP Prosedur Pembebasan Lahan (Land Acquisition Procedure) (ISO ) dated 16 July 2007 and revised on 16 July 2010 and Prosedur Penyelesaian Perselisihan Tanah (Land Dispute Resolution Procedure) (SL-SOP-ADM-07) dated 19 December 2007 and revised on 01 January 2013 for the identification and calculation of fair compensation

52 GP 7003A Page 52 of 70 for the loss of legal or customary right of the land, with the involvement of relevant stakeholders covering both directly and indirectly affected stakeholders such as local community representatives, workers, relevant government authorities and agencies. In addition such procedures are found to be made publicly available upon request. Record of land acquisition document is available and verified, For example, agreement between Rifin and PT Hindoli dated 20 December 2006 is verified covering an area of m3 with an agreed payment of Rp 4,999,500. Based on the agreement, the auditor observed that the process was conducted with the involvement of public figure, local government and be made publicly available upon request. Criterion 6.4: Any negotiations concerning compensation for loss of legal or customary rights are dealt with through a documented system that enables indigenous peoples, local communities and other stakeholders to express their views through their own representative institutions Procedures for the identification, calculation and compensation for the loss of legal or customary rights of the land, with the involvement of local community representatives and relevant agencies. PT HSL has established Prosedur Pembebasan Lahan (Land Acquisition Procedure) (ISO ) dated 16 July 2007 and revised on 16 July 2010 and Prosedur Penyelesaian Perselisihan Tanah (Land Dispute Resolution Procedure) (SL-SOP-ADM-07) dated 19 December 2007 and revised on 01 January 2013 for the identification and calculation of fair compensation for the loss of legal or customary right of the land, with the involvement of relevant stakeholders covering both directly and indirectly affected stakeholders such as local community representatives, workers, relevant government authorities and agencies. In addition such procedures are found to be made publicly available upon request. Record of land acquisition document is available and verified, For example, agreement between Rifin and PT Hindoli dated 20 December 2006 is verified covering an area of m3 with an agreed payment of Rp 4,999,500. Based on the agreement, the auditor observed that the process was conducted with the involvement of public figure, local government and be made publicly available upon request Records of identification of people entitled to receive compensation. Records of identification of people entitled to receive the compensation are available. Observed the list for people identified to receive compensation for Mukut Estate is available detailing the name of the person, name and number of blocks involved, total area and total amount compensated. Grievance log book and procedure is available to address employee s complaint Records of negotiations processes and/or the details of compensation settlements. Records of negotiations processes and/or the details of compensation settlements is available. Example of negotiation process is as follows: Negosiasi Harga Ganti Rugi Lahan (Negotiation for the compensation of land) dated 25 March and 08 May 2008 for Mukut Estate at Desa Penuguan. Observed the details of the compensation process from the initiation as per dated 25 March 2008 and the result as well as outcome of the negotiation which is finalized during the consultation on 08 May 2008 where each of the local communities has been agreed to be compensated with a sum of Rp 2,250,000/ha Records of the implementation of compensation payment. Records of the implementation of compensation payment is well specified within the document entitled Daftar Pembayaran Uang Pembebasan Lahan & Tanam Tumbuh. Sample of payment for two local communities namely Gunadi and Karima with a block no. K03-06, K07-10 with a total land area of 2 ha each have been compensated with Rp 5,000,000 each on 06 June The above document are found to be signed by the following: Pemerintah Kabupaten Banyuasin; Kepala Desa Penuguan;

53 GP 7003A Page 53 of 70 Chief Development Manager of the Company; and Estate Manager. Criterion 6.5: Any negotiations concerning compensation for loss of legal or customary rights are dealt with through a documented system that enables indigenous peoples, local communities and other stakeholders to express their views through their own representative institutions Documentation of employees pay rates. SOP regarding to pay rates available on SOP #GO/HRD/18/SOP Pengajian and pay rates following the decision letter from General manager PT. Hindoli #001/PD-UMR/HRD/02 13 regarding Upah untuk karyawan harian lepas which are : 1,630,000/month and 65,200 IDR/days as Decision letter from South Sumatera Governor decision letter #017/KPTS/Disnakertrans/2013. All KUD employee received minimum wage as per government regulation Several sample of pay slip verified during the audit are as follows: Daily workers Name : Tuti Merlina ID : Job : Loose Fruits Collectors Days : 26 days Wages : 1,696,000 IDR Permanent workers Name : Huzami ID : Job : Upkeep Wages : 3,139,000 IDR Monthly workers Name : Ari Sutejo ID : H2126 Wages : 5,906,500 IDR A company working regulations and work contracts, in accordance with existing regulations. SOP regarding to pay rates available on SOP #GO/HRD/18/SOP Pengajian and pay rates following the decision letter from General manager PT. Hindoli #001/PD-UMR/HRD/02 13 regarding Upah untuk karyawan harian lepas which are : 1,630,000/month and 65,200 IDR/days as Decision letter from South Sumatera Governor decision letter #017/KPTS/Disnakertrans/2013. Sample of contracts verified are as follows: Daily Worker Agreements #015/2013 On behalf Suharli Wages : 65,200/days. Work Agreement Not Specified Times (PKWTT)

54 GP 7003A Page 54 of #008/PKWTT/SKGM/HRD VII/2012 On behalf Adek Markus R.N Wages : 3,800,000/months The workers did enjoy the workers did enjoy annual leave and Public Holidays. Growers and millers provide adequate housing, water supplies, medical, educational, and other facilities for employees where such facilities are not available or accessible Housing provide by PT. Hindoli and it was state on the SOP #GO/HRD/24/SOP SOP Perawatan dan Pemeliharaan Bangunan Perumahan. Clean water is provided sufficiently to all company settlement. Water is tested in quarterly basis by governmental appointed third party lab. The result is within government limit. Agreements entered into with contractors are to specify that contractors abide by labor laws. The agreement between PT. Hindoli and contractor stated that the contractor have to comply with PT. Hindoli policy, e.g. contract between PT. Hindoli and PT. Irako Engineering Article 3.4 that Contractor have to comply with PT. Hindoli Policy according to LK3MP regarding environmental, safety, health,quality, and food safety Criterion 6.6: The employer respects the right of all personnel to form and join trade unions of their choice and to bargain collectively. Where the right to freedom of association and collective bargaining are restricted under law, the employer facilitates parallel means of independent and free association and bargaining for all such personnel Documented company policy recognizing freedom of association. The company policy according to respecting the human right are available on Cargill Guiding Principles Handbook signed by Chairman and Chief Executive Officers Greg page Documented minutes of meeting with any labor union (if any). There is a LKS Bipartite, and for this year the worker union and the management agree to extend the Perjanjian Kerja Bersama (PKB) until next years. Document of Perjanjian Kerja Bersama (PKB) are available signed by PT. Hindoli Management and the union workers (SPSI) of the working unit of PT. Hindoli. Criterion 6.7: Children are not employed or exploited. Work by children is acceptable on family farms, under adult supervision, and when not interfering with education programmes. Children are not exposed to hazardous working conditions Documented company policy on worker age requirement, in accordance with national laws. Worker age requirement available on SOP for recruitments it was state that the employee must be more than 18 years old Records of implementation of company policy on worker age requirements. Records of employee age are available, which : Age Emp %

55 GP 7003A Page 55 of 70 > Total Criterion 6.8: Any form of discrimination based on race, caste, national origin, religion, disability, gender, sexual orientation, union membership, political affiliation, or age, is prohibited A documented equal opportunities policy. The company policy according to respecting the human right are available on Cargill Guiding Principles Handbook signed by Chairman and Chief Executive Officers Greg page Evidence of equal treatment in working opportunities for workers. The above equal treatment policy is found to be have communicated for workers. In addition, the auditing team note that the company is currently implementing the equal opportunities for workers through the following: Employment opportunities are provided fairly based on qualification and advertised in local mass media; Training is given to the workers on a yearly basis covering training relating to their working station, personnel training such as communication skills and safety and health training; All employees are covered with working insurance; and Termination is conducted based on local laws and is stated in the workers employment agreement. In addition, both local and non-local are found to be employed by the company with the local is holding the majority of the workers employed by the company. Summary of the employment of workers (both local and non-local) workers are as follows: Emp % Local Non local Total Criterion 6.9: A policy to prevent sexual harassment and all other forms of violence against women and to protect their reproductive rights is developed and applied A documented company policy on sexual harassment and violence. The company policy according to respecting the human right are available on Cargill Guiding Principles Handbook signed by Chairman and Chief Executive Officers Greg page A documented company policy on the protection of reproductive rights. As reflected above, the policy pertaining to the protection of reproductive rights are stated in the company policy on Cargill Guiding Principles Handbook signed by Chairman and Chief Executive Officers Greg page Proof of implementation of sexual harassment policy. There is a gender committee established to provide consultation to women workers and housewife in the company regarding the rights and obligations of women workers, health, education, prevention of sexual harassment, etc Proof of implementation of reproductive rights policy. The company has a regulation that pregnant workers are prohibited from all chemical related

56 GP 7003A Page 56 of 70 works. In addition, for female workers, every 3 months the workers are subjected to a medical surveillance that covering the pregnancy test. If found to be pregnant, the said workers is transferred to other non-chemical related working field until they delivered. Following to their delivery, the workers are entitled for a maternity leave for 2 months and following to the leave, non-chemical related working field is continued until they stop breastfed their child Specific grievance mechanism is available. SOP regarding on grievance mechanism are available on SOP #GO/HRD/19/SOP SOP Keluh Kesah Criterion 6.10: Growers and mills deal fairly and transparently with smallholders and other local businesses Current and past prices paid for FFB shall be publicly available The FFB price are available publicly as the decision of government plantations department, and it can see on the board in Mill and in very KUD. Pricing mechanisms for FFB and inputs/services shall be documented (where these are under the control of the mill or plantation) The pricing mechanism are available and documented and refer to Permentan #14/Permentan/OT.140/2/2013 Documented on decision letter of government plantations department #525/845 VI.3/BUN Harga TBS Perkebunan Agustus 2013 Evidence shall be available that all parties understand the contractual agreements they enter into, and that contracts are fair, legal and transparent. The FFB pricing are available publicly and under the regulation of Ministry of Agriculture #14/Permentan/OT.140/2/ Agreed payments shall be made in a timely manner. Payment to the farmers conducting every month and documented on Laporan Pendapatan Kelompok. Example is as follows: Kelompok : 1309 Period : August Amount: 12,844,341 IDR. Criterion 6.11: Growers and millers contribute to local sustainable development wherever appropriate Records of company contributions to the local development. The company has a CSR (Corporate Social Responsibilities), documented on Corporate Social Responsibility Plan for Years 2013 e.g. Development of local potential businessin agriculture (rubber plantation) through the capital program and training and monitoring. Principle 7: Responsible development of new plantings Criterion 7.1: A comprehensive and participatory independent social and environmental impact assessment is undertaken prior to establishing new plantings or operations, or expanding existing ones, and the results incorporated into planning, management and operations Social and environmental impact assessments (AMDAL), which include details of both positive and negative social and environmental impacts, made with the

57 GP 7003A Page 57 of 70 participation of affected parties (local communities). Observed that the AMDAL was done in 2006 (Inti) and 2010 (Plasma) for Mukut and Penuguan Appropriate management plan and operational procedures (RKL/RPL) Appropriate management plan and operational procedures (RKL/RPL). is available for Mukut Estate and is done every 6 months. Ref : Perlaksanaan pengelolaan dan Pemantauan Lingkungan Jan Jun 2013 Where there are schemed smallholders, records of development program for smallholders are kept, in accordance with the scheme and relevant laws. In Mukut Estate, records of development program for smallholders like KKPA Koperasi Mukut Jaya are kept in the Notulen Rapat file.the latest progress report is dated 6/8/13. Meeting with the Koperasi Mukut Jaya show that they are pleased with the progress of the land managed by Mukut Jaya. The Mukut Estate manager, Mr Junaidi in-charge of the communication with the Koperasi showed dedication in his approach as he oversee the development of the Koperasi oil palm blocks. In summary, for Mukut and Penuguan project, a total of 402 hectares has been allocated for 201 smallholders/ KKPA and 1,350 hectares for 675 smallholders respectively. Criterion 7.2: Soil surveys and topographic information are used for site planning in the establishment of new plantings, and the results are incorporated into plans and operations Results of land surveys to determine suitability of soil are to be provided, including information on topography, climate, soil type, soil fertility, water table depth and drainage Pt Hindoli has developed procedure for potential acid sulfate soil management plan (PASSMP) dated to manage the acid sulphate soil in Mukut based on the recommendation of soil survey at year By controlling the water level of the acid sulphate land, total of 22 water gates, 171 box culvert and collection drain were installed to ensure the water level table always below land surface between 40-60cm.It also allow the rainfall outflow and tidal inflow of saline water. Monitoring of the water level and ph of the water carried out daily and monthly respectively. Records are made available during onsite audit. Evidence that plantations are developed in accordance with the suitability of the land. Inspection of the records (June 2012 to Aug 2013) and onsite confirmed that the water level always consistently maintained by the management team. Criterion 7.3: New plantings since November 2005, have not replaced primary forest or any area required to maintain or enhance one or more High Conservation Values New plantings within Nov 05 and Nov07 must be in compliance with existing regulatory requirements that relate to social and environmental impacts management, and with the legalized land spatial planning. AMDAL approved by Bupati Banyuasin on 22 March 2011 and the HCV assessment repot completed in Both report confirmed there is no primary forest and peat soil has been identified. The district government has issued an land title for an area of 3,837 ha for planting to oil palm. The land planning classification of 2,799 ha of the concession is for conversion to agriculture and the remaining 1,038 ha is under forest concession. Up to date, the application for conversion of

58 GP 7003A Page 58 of the 1,038 ha of land to agriculture still in the progress. The 1,039 ha of land still remain untouched. The area of peat soil (87ha) and about half of the shallow peat area (230ha) was set aside from development to conserve an area of formerly swamp forest (total 317 ha). Marking of the HCV boundaries with signboard observed during onsite visit. Maps showing plan and realization of land clearing in accordance with HCV identification. Hindoli has implemented the land clearing in accordance the plan. Maps showing the conservation area in Mukut and during onsite audit, the area are well managed with the warning sign for prohibiting hunting and logging. Criterion 7.4: Extensive planting on steep terrain, and/or on marginal and fragile soils, is avoided Maps identifying marginal and fragile soils, including excessive gradients and peat soils, should be available In Mukut Estate, soil map is available and it reports the type of soils as follows: a) marine clay b) brackish water deposit c) <100cm peat d) acid sulphate Where limited planting on fragile and marginal soils is proposed, plans shall be developed and implemented to protect them without incurring adverse impacts. Monitoring of the water level and ph of the water carried out daily and monthly respectively. Records are made available during onsite audit. Water management is also practiced on the acid sulhate soils. The shallow peat area is identified and managed as a conservation area. Criterion 7.5: No new plantings are established on local peoples land without their free, prior and informed consent, dealt with through a documented system that enables indigenous peoples, local communities and other stakeholders to express their views through their own representative institutions Social and environmental impact assessment document which include analysis of both positive and negative environmental and social impacts, and made with the participation of affected parties. As mentioned in the 7.3.1, the application for conversion of the 1,038 ha of land to agriculture still in the progress. In addition for that, there is no new land acquired for new planting Documented socialization programs prior to new plantings. Observed that the AMDAL was conducted prior to the new planting Proof of payment to land owners and proper handing-over of the land for new plantings. Records are kept in the legal / Public Affairs. All records covering the agreement and the proof of payment made is kept within the legal/public affairs department. For example, agreement between Rifin and PT Hindoli dated 20 December 2006 is verified covering an area of m3 with an agreed payment of Rp 4,999,500. Criterion 7.6: Local people are compensated for any agreed land acquisitions and relinquishment of rights, subject to their free, prior and informed consent and negotiated agreement

59 GP 7003A Page 59 of Documented identification and assessment of customary and legal rights with the involvement of relevant government agencies and local communities. Dedicated social impact document which clearly identifies positive and negative social affects that maybe caused by plantation and mills are found to be incorporated within the following documents: Environmental Impact Assessment (AMDAL), approved by head of environmental agency Sumatera Selatan Province # 285/KPTS/Bapedalda/2005 dated 14 May 2005 for PT. Hindoli; Environmental Impact Assessment (AMDAL) covering Mukut Estate in Kecamatan Pulau Rimau. Approval # 266/Kpts/2006 dated 01 May 2006 by the head of environmental agency of Sumatera Selatan Province. Based on the social impact assessment conducted, the auditing team observed that the SIA is conducted in a participatory manner with relevant stakeholders. The company also has conducted regular monitoring and management of social impact, with the participation of local communities in term of Corporate Social Responsibility (CSR). Records of stakeholder consultation with local communities evidenced that there is no complaints received from the local communities regarding the operations of the company except on one issue pertaining to land acquisition (as mentioned earlier in this report) that is solve through civil court. Records of negotiations detailing process of consent are available, clearly demonstrating an agreement between local community and PT. Hindoli, for example: official report of land compensation dated 20 December 2006 which clearly demonstrates the free, prior and informed consent from local community to sell their land to PT. Hindoli for a stipulated price which is agreed by the both parties witnessed by local government. This document is found to be accompanied with maps showing the extent of the land and photographs of the local community receiving the compensation amount. A copy of the land payment cheque is also attached in the document as an additional proof of payment made to the traditional land owners Procedures to identify people entitled to receive compensation. PT HSL has established Prosedur Pembebasan Lahan (Land Acquisition Procedure) (ISO ) dated 16 July 2007 and revised on 16 July 2010 and Prosedur Penyelesaian Perselisihan Tanah (Land Dispute Resolution Procedure) (SL-SOP-ADM-07) dated 19 December 2007 and revised on 01 January 2013 for the identification and calculation of fair compensation for the loss of legal or customary right of the land, with the involvement of relevant stakeholders covering both directly and indirectly affected stakeholders such as local community representatives, workers, relevant government authorities and agencies. In addition such procedures are found to be made publicly available upon request Records of negotiation process and/or compensation settlements are available. Record of land acquisition document is available and verified, For example, agreement between Rifin and PT Hindoli dated 20 December 2006 is verified covering an area of m3 with an agreed payment of Rp 4,999,500. Based on the agreement, the auditor observed that the process was conducted with the involvement of public figure, local government and be made publicly available upon request Documentation of calculation and payment for compensation. Records of the implementation of compensation payment is well specified within the document entitled Daftar Pembayaran Uang Pembebasan Lahan & Tanam Tumbuh. Sample of payment for two local communities namely Gunadi and Karima with a block no. K03-06, K07-10 with a total land area of 2 ha each have been compensated with Rp 5,000,000 each on 06 June The above document are found to be signed by the following: Pemerintah Kabupaten Banyuasin; Kepala Desa Penuguan;

60 GP 7003A Page 60 of 70 Chief Development Manager of the Company; and Estate Manager Communities that have lost access and rights to land for plantation expansion are given opportunities to benefit from plantation development In practice, the plasma scheme is implemented as a means to provide opportunities for the local communities to benefit from plantation development. The scheme is managed by the Koperasi Unit Desa (KUD) (Local Cooperation) headed by the appointed leader among the local communities. The process and outcome of any compensation claims should be documented and made publicly available. All of the above processes and outcomes has been recorded and made publicly available to all stakeholders upon request. Criterion 7.7: Use of fire in the preparation of new plantings is avoided other than in specific situations, as identified in the ASEAN guidelines or other regional best practice Documented assessment where fire has been used for preparing land for planting. Zero burning policy has been implemented within PT Hindoli. In the procedures for land clearing (HIN/SL/TSD/002/SOP: Prosedur land clearing; date June 2007) stated that the burning is prohibited for preparing land for new planting and replanting Records of implementation of zero burning policy Interview with the workers, smallholders as well as field workers in the smallholders confirmed that they are aware of the zero burning policy. Signage for no burning sighted during onsite audit. Procedures and records of emergency responses to land burning (Tanggap Darurat Kebakaran Lahan) Procedures for emergency action plan (SOP Rencana Tindakan Keadaan Darurat: EST/EHS/07 updated 19 July 2013) clause 2.1 stated the action in responding for the outbreak for the fire. Presence of appropriate fire extinguishers and facilities, depending on the fire risks. Fire extinguishers, hosing, smoke/ heat detector were observed around the mill, general office, estate and plant building. Checklist of all facilities is made available during onsite audit and the inspection of the equipment will be conducted monthly. Principle 8: Commitment to Continuous Improvement in Key Areas of Activity Criterion 8.1: Growers and millers regularly monitor and review their activities and develop and implement action plans that allow demonstrable continuous improvement in key operations. Criterion 8.1: Scheme managers regularly monitor and review their activities and develop and implement action plans that allow demonstrable continuous improvement in key operations A monitoring action plan based on the social environmental impact assessment, and regular evaluations of plantation and mill operations. As a minimum, these must include, but not necessarily be limited to: Reduction in use of certain chemicals (criterion 4.6). For the reduction in use of certain chemicals mainly herbicides, the Technical Service Department of PT Hindoli will annually monitor the chemical usage through the OMP8 software.

61 GP 7003A Page 61 of Environmental impacts (criterion 5.1) Monitoring of the environment impact is monitored annually by the Programme Assurace Department. Annually, the department will prepare the Identifikasi dan Evaulausi Aspek Dampak to monitor and will rate the impact. From the report the following are measured: a) Operation b) Aspect c) Impact d) Condition ( Normal, serious, emergency ) e) Legal Aspect & reference f) Initial risk rate g) Present risk control h) Result of the risk control i) Additional control if required Waste reduction (criterion 5.3). PT Hindoli advocates waste reduction through their recycling programme. Waste is identified and segregated. Domestic waste is segregated between organic, Inorganic and recyclable waste. The estate has arranged a linesite coordinator to collect all recyclable waste and an appointed recycler will collect the waste and pay based on market price Pollution and emissions (criterion 5.6). Every 6 month, exhaust emission of vehicles and genset will be tested by the government Agency known as Badan Lingkungan Hidup ( environmental agency ) Social impacts (criterion 6.1) The company has a CSR (Corporate Social Responsibilities), documented on Corporate Social Responsibility Plan for Years 2013 e.g. Development of local potential businessin agriculture (rubber plantation) through the capital program and training and monitoring Records of follow-up actions taken against RSPO audit findings, if any. It was raised during the previous audit that during the ASA 04, RKL / RPL were available except for Mukut Plasma. Records are shown that in their biennal report, the RPL/RKL for AMDAL Plasma Mukut has been prepared and submitted to the government authorities. The record also show that for long term solution, Mukut plans to combine the AMDAL for the plasma, Inti Mukut, New Mill Mukut and new jetty Mukut into 1 new AMDAL. During the Cross Business Unit EHS Indonesia meeting report on the 3/9/13, it was reported that the intergrated AMDAL report has been received by the Government Environment Ministry for approval Supply Chain

62 GP 7003A Page 62 of 70 For supply chain, the PT Hindoli s Palm Oil Mill (Sungai Lilin & Tanjung Dalam) has decided to use Module D in this assessment. The findings and objective evidence find during the assessment are outlined in the table below. The results for each indicator from each of the operational areas were evaluated to provide an assessment of conformity. A statement is provided for each of the RSPO indicators in order to support the findings of the assessment team. Module D: Segregation Module D.1: Documented Procedures Criterion D.1.1: The facility shall have written procedures and/or work instructions to ensure the implementation of all the elements specified in these requirements. D Complete and up to date procedures covering the implementation of all the elements in these requirements D Tanjung Dalam and Sungai Lilin Mill sharing the same RSPO Supply Chain Procedures. The up to date procedures name: RSPO Supply Chain Segregation No: 00-SOP SSC HIN dated 17 April The procedures covered description of operation s management system, documented procedures, purchasing and goods in, record keeping, sales and good out, training, processing and claims. The name of the person having overall responsibility for and authority over the implementation of these requirements and compliance with all applicable requirements Verifiers and guidance: This person shall be able to demonstrate awareness of the facilities procedures for the implementation of this standard. Sales manager: Sau Guan Tan and commercial staff (Yanuar) are the personnel in charge for the RSPO supply chain and they manage to demonstrate awareness of facilities procedures for the standard implementation. Criterion D.1.2: The facility shall have documented procedures for receiving and processing certified and noncertified FFBs. PT Hindoli only received certified FFBs from their own supply base which include the Inti and Plasma. In the procedures 00-SOP SSC HIN, clause no 6 stated the procedures for ensuring the certified palm oil is kept segregated from the non certified during transportation and storage. Module D.2: Purchasing and Goods In Criterion D.2.1: The facility shall verify and document the volumes of certified and non-certified FFBs received. PT Hindoli only received certified FFBs from their own supply base which include the Inti and Plasma. All the FFBs tonnages will be documented through the weight bridge ticket and update into the system. Criterion D.2.2: The facility shall inform the CB immediately if there is a projected overproduction. PT Hindoli has the internal monitoring and reporting mechanism for CB of variations of production. Up to date, there is no overproduction. Module D.3: Record Keeping Criterion D.3.1: The facility shall maintain accurate, complete, up-to-date and accessible records and reports covering all aspects of these requirements.

63 GP 7003A Page 63 of 70 The accurate, complete and up to date records are well maintained as below: a. RSPO Supply Chain Segregation No: 00-SOP SSC HIN dated 17 April 2013 b. RSPO Supply Chain Training had provided to the relevant staff on 4 July 2013 c. Daily mill production report dated 31 May 2013 d. Sales contract: Hindoli PS e. Weigh Bridge Ticket: MSL96354 dated 2 September 2013 Criterion D.3.2: Retention times for all records and reports shall be at least five (5) years. As stated in the procedures clause 3.2, the documents will be archived and stored at least for 10 years according to the Government Indonesia Tax Regulation Criterion D.3.3: The facility shall record and balance all receipts of RSPO certified FFB and deliveries of RSPO certified CPO, PKO and palm kernel meal on a three-monthly basis. The facility record and balance all receipts of RSPO certified FFB and deliveries of RSPO certified CSPO on the daily basics. One of the records dated 31 May 2013 is verified to confirm all the information is available. Criterion D.3.4: The following trade names should be used and specified in relevant documents (e.g. purchase and sales contracts, *product name*/sg or Segregated). The supply chain model used should be clearly indicated. Pt Hindoli only receives FFBs from its own certified plantation. Purchasing contract is not applicable. Sales contract: Hindoli PS dated 7 Jun 2013; CSPO-Segregated is clearly indicating the supply chain model used. Module D.4: Sales and Good Out Criterion D.4.1: The facility shall ensure that all sales invoices issued for RSPO certified products delivered include the following information: a) The name and address of the buyer b) The date on which the invoice was issued c) A description of the product, including the applicable supply chain model (Segregated) d) The quantity of the products delivered e) Reference to related transport documentation All sales invoices issued covered all the information One of the Sales contract: Hindoli PS has been sampled and the information as below: a. PT Asianagro Agung Jaya b. 7 Jun 2013 c. CSPO-Segregated d. 600MT e. Shipment by vessel dated June 2013 Module D.5: Processing Criterion D.5.1: The facility shall assure and verify through clear procedures and record keeping that the RSPO certified palm oil is kept segregated from non-certified material including during transport and storage

64 GP 7003A Page 64 of 70 and be able to demonstrate that is has taken all reasonable measures to ensure that contamination is avoided. The objective is for 100% segregated material to be reached. The systems should guarantee the minimum standard of 95% segregated physical material; up to 5% contamination is allowed. The facility only receives FFBs from its own supply based. The supply base includes 3 estate and 18 smallholders while all are certified under Segregation model. Criterion D.5.2: The facility shall provide documented proof that the RSPO certified palm oil can be traced back to only certified segregated material. The facility will record all the tonnages of FFB through the weighbridge ticket and it will automatically update in the central management system. The facility only receives FFBs from its own supply based. The supply base includes 3 estate and 18 smallholders while all are certified under Segregation model. Criterion D.5.3: In cases where a mill outsource activities to an independent palm kernel crush, the crush still falls under the responsibility of the mill and does not need to separately certified. The mill has to ensure that: a) The crush operator conforms to these requirements for segregation b) The crush is covered through a signed and enforceable agreement For the palm kernel, PT Hindoli sells all palm kernel to PT Sinar Alam Permai. One of the sales contracts: Hindoli PS dated 03 September 2013 is verified to confirm the sales of palm kernel. Module D.6: Training Criterion D.6.1: The facility shall provide the training for all the staff as required to implement the requirements of the Supply Chain Certification System. The RSPO Supply Chain Training had provided to the relevant staff on 4 July The staffs are from different department such as QA/QC, laboratory and administration department. Module D.7: Claims Criterion D.7.1: The facility shall only make claims regarding the use of or support of RSPO certified palm oil that are in compliance with the RSPO Rules for Communication and Claims. Up to date, no claim has been made by PT Hindoli. 3.2 Corrective Action Request There are total of 0 and 2 were raised. Please refer to the Appendix A for the details findings and relevant correction actions have been taken. 3.3 Noteworthy Positive & Negative Observation a. PT Hindoli has a zero burning policy for pollution control in its estates; b. The management plan for sulphate acid soils in Mukut has been consistently implemented over the past few years. c. PT Hindoli gives high priority to safety and has implemented the safety management system consistently. 3.4 Status of Non-Conformities Previously Identified

65 GP 7003A Page 65 of 70 This is the re-certification from the other CB. All non-conformities Previously Identified already checked and reviewed. 3.5 Issues Raised by Stakeholders and Findings A list of stakeholders contacted is included as Appendix C. The audit team did not receive any major complaints in the stakeholder meeting on environmental impacts and social performance of the mill and estate operations. Most of the stakeholders agreed that PT Hindoli has had a positive influence in the area. 4. ACKNOWLEDGEMENT OF ORGANIZATION INTERNAL RESPONSIBILITY 4.1 Date of Next Surveillance Visit The next surveillance audit is planned before on September, Date of Closing Non-Conformities Reference Class Issued Close /09/13 13/4/ /09/13 13/4/ Acknowledgement of Internal Responsibility and Formal Sign-off Assessment Findings SGS Malaysia acknowledges and confirms acceptance of the Report contents and including the assessment findings. SGS Malaysia accepts the responsibility for addressing the opportunities of improvement detailed in this report. Signed on behalf of PT Hindoli Signed on behalf of SGS Malaysia Sdn Bhd Date: 29 th November 2013 Date: 29 th November 2013

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