2. Summary Of The Findings by Criteria

SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 25of 135

C. 2. Summary Of The Findings by Criteria

COMMITMENT TO TRANSPARENCY 1.1 Palm oil growers and millers provide adequate information to other stakeholders on environmental, social and legal issues relevant to RSPO Criteria, in appropriate languages forms to allow for effective participation in decision making. The company provides information to stakeholders who are grouped based on their interests. All requests for information through a letter are recorded according to their types. There are 3 types of record books. The first is a book of Grievance and Complaint of the workers internal and the community. Data shows that there is no complaint up to the time of the audit. The second is a book of communication and consultation for requests and consisting of all letters coming into the company. Finally, a book of communication and response to stakeholders. The company has had SOP of Information and Request Response SOPSPOSMARTLH-01. There has been a list of information that can be accessed by relevant stakeholders that vary among the mill, core estate and plasma estate. Estate Manager is responsible for providing information to the stakeholders especially relating to social aspects. The company has recorded all letters of requestand their response in the log book and ensured that the response is given within the timeframe set out in the SOP i.e. no longer than 5 weeks. All incoming and outgoing letters that belong to the category of SPO document are retained for 5 years SOPSPOSMARTLH-02. During the preliminary audit, there were still letters found not yet responded in accordance with the time frame specified in the SOP. During the certification audit, Langling Mill was sampled on a request for analyzing a fertilizer with the letter no. 010SAJELNGMIV2013 dated 23 April 2013 and has been responded with the letter dated 4 May 2013 No. 36PUPUKLAB- LNGM42013. The file of outgoing letter was available and signed by the company Lab. The file of incoming letter was available and presented by Bpk. Adrizal. Compliance Status : Compliance SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 26of 135

1.2 Management documents are publicly available except where this is prevented

by commercial confidentiality or where disclosure of information would result in negative environmental or social outcomes The company has had a list of stakeholders and the types of information that the stakeholders can access. The list of stakeholders is of Bangko Estate and Langling Mill. Confidential documents are those documents not listed in the list of information for Stakeholders, for example, commercial data and data that may lead to negative impacts that are accessible only at the m anagement‟s consent such as data of conflicts. During the preliminary audit, the company had not established a list of information that can be accessed by the stakeholders. During the certification audit, data the stakeholders can access had been available in the form of the List of Information and Stakeholders. For example, data of workers and List of workers‟ basic Wage can be accessed by the Regency and Provincial Manpower Service. Compliance Status: Compliance 2 COMPLIANCE WITH APPLICABLE LAWS AND REGULATIONS 2.1 There is compliance with all applicable local, national and ratified international laws and regulations. The company conducts evaluation of all regulations periodically per semester and is regulated through the SOPSPOSMARTLH03 Legal and Other Requirements rev 01. The head office‟s Sustainability Division conducts the evaluation and the result is communicated to the units estates and mills, and then the units select those regulations relevant to their respective estatemill. The result of the evaluation of compliance. The Langling Mill has carried out the evaluation of regulatory compliance in employment, environmental, K3 and permit areas. For Bangko, there is evaluation of employment, environment, K3, permit and HCV. Sample is on the evaluation of the use of fertilizers through Government Regulation No. 773 concerning control over the distribution, storage and use of pesticides. During the audit, there was still a worker found working overtime that exceeds overtime hours prescribed by the Manpower Department 40 hours month and overtime max. 14 hoursweek. The company has made the corrective action by issuing the Circular Letter by Director of Human Resources No. 004HR Ops2014, stated that the overtime should be met with the government regulation. The overtime offering should also be base on vloluntary and agreed by both parties. SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 27of 135 The evidence of the implementation of the policy will be sought on the next surveillance. Compliance Status : Minor 2.2 The right to use the land can be demonstrated, and is not legitimately contested by local communities with demonstrable rights Principle Permit Decree of Governor Head of First Level Region of Jambi No. 1781991 regarding Land Reservation for the Purpose of Oil Palm Core Estate of PT. Kresna Duta Agroindo at Perwakilan Pamenang District and Bangko District, Second Level Regency of Sarolangun Bangko with a total area of 620 Ha dated 4 May 1991. Site permit Decree of Head of Land Office of Sarolangun Bangko Regency No. 071998 regarding Granting of Site permit for the Purpose of Palm Estate Development of 622 Ha dated 2 June 1998. Decree of Regent Head of 2 nd Level Region of Sarolangun Bangko No. 2301999 Regarding Granting of Site Permit for the Purpose of Palm Estate Development of 134,273 Ha dated 13 July 1999. Decree of Regent Head of 2 nd Level Region of Sarolangun Bangko No. 2311999 Regarding Granting of Site Permit for the Purpose of Palm Estate Development of 89,433 Ha dated 13 July 1999. Decree of Regent Head of 2 nd Level Region of Sarolangun Bangko No. 2321999 Regarding Granting of Site Permit for the Purpose of Palm Estate Development of 109,649 Ha dated 13 July 1999. HGU Land Use Permit The company has had HGU certificates consisting of: HGU No. 70HGUBPN98 totaled 622 Ha dated 2 June 1998 to PT. KDA by Sarolangun Bangko Regency, Jambi Province. EXPIRED 24112033 HGU No. 01-540.1-06-2000 totaled 134,273 Ha dated 07-09-2000 to PT. KDA by Head of Land Office of Jambi Province. EXPIRED 20092035 HGU No. 02-540.1-06-2000 totaled 89,433 Ha dated 07-09-2000 to PT. KDA by Head of Land SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 28of 135 Office of Jambi Province. EXPIRED 20092035 HGU No. 03-540.1-06-2000 totaled 109,649 Ha dated 07-09-2000 to PT. KDA by Head of Land Office of Jambi Province. EXPIRED 20092035 HGB No. 06.04.10.05.3.00002 totaled 126 Ha dated 11101993 by Head of Land Office of Sarolangun Bangko Regency, Jambi Province. EXPIRED 04112011. KARANG BERAHI HGB No. 06.04.10.06.3.00002 totaled 103 Ha dated 11101993 by Head of Land Office of Sarolangun Bangko Regency, Jambi Province. EXPIRED 04112011. JELATANG MOST CURRENT HGB: HGB No. 06.04.02.05.3.00003 totaled 74.940 M2 dated 10102012 by Land Office of Merangin Regency, Jambi Province. HGB No. 06.04.02.05.3.00004 totaled 49.862 m2 dated 10102012 by Land Office of Merangin Regency, Jambi Province. HGB No. 06.04.02.05.3.00005 totaled 74.890 M2 dated 10102012 by Land Office of Merangin Regency, Jambi Province. Application for change of HGB into HGU dated 24-10-2011 by PT. KDA totaled 130,73 Ha, with attachment of the HGB No. 06.04.10.05.3.00002 of 126 Ha dated 11-10-1993 by Land Office of Sarolangun Bangko Regency, Jambi Province, is different in the total land area with that of the existing HGB. SIUP Business License No. 9291369-P09-01PBII99 dated 2 March 1999. Plantation Business Registration Letter No. 960Menhutbun-VII2000 of Jakarta Forestry and Plantation Department dated 08-08-2000. - Land area : 8.359 Ha - Location : Sarolangun, Bangko and Pamenang Districts, Sarko Regency, Jambi Province Product Processing Unit UPH - Type : Mill - Quantity : 3 three units - Permit capacity : 30 tonhour, 60 tonhour and 60 tonhour - Installed capacity : 30 tonhour, 60 tonhour and 60 tonhour SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 29of 135 Limited Liability Company Registration Certificate No. 09.05.1.51.37878, valid until 01092013. The company is formerly known as PT. Kresna Duta Agro-Industri and renamed PT. Kresna Duta Agroindo. Change of company name was strengthened by the Notary Deed dated 25 November 1986 John Leonard Waworuntu and strengthened in Decree of the Ministry of Justice No. C2-6196HT.01.01.Th87. 28 September 1987.  Checking of the BPN boundary markers was carried out during field visit stage 1, among others : a. Sample BPNKDA 06XXXIV marker with coordinates of 206629,39 E and 9768421,78 N UTM b. The sample BPNKDA XXV marker is a supporting marker with coordinates of 206027.05 E and 9769049.28 N UTM. Because the position of BPNKDA XXV marker is adjacent to the community estate land, and during the field checks there was a shift of ± 4 meters from its original position into the community estate land. The company moved the marker into the area of PT KDA. The company should make minutes of BPNKDA XXV marker relocation to avoid conflicts that may occur in the future. At stage 2 the company has made Relocation Minutes of BPN Marker No. XXV based on the letter from Mr. Arfandi Ibn Hajar owner of the adjacent land on 3 December 2011, concerning the position of marker on the border area between PT KDA and its adjacent area, so the PT KDA shifted the BPN markers approximately three 3 meters towards the area of PT. KDA with coordinates of 2°5‟14.60‟‟ S and 102°21‟26.404‟‟ E signed by the Legal Environment and Estate Manager. c. The sample BPNKDA 08 marker coordinates is 205173.39 E and 9766942.96 N but the proper coordinates should be 205177.012 E and 9766939.095 N. It was found in the field that BPNKDA 08 marker was not placed properly, because at the same time the older BPN marker was found. BPNKDA 08 marker should be placed at the position of marker as determined by BPN. In stage 2 the company has had the record of Minutes of BPN Marker Relocation on Saturday, 05-10-2013 located at Division 5 of Bangko Estate. The Original Coordinates of 2°6‟23‟‟ S and 102°20‟59‟‟ E have moved to coordinates of 2°6‟21.898‟‟ S and 102°20‟58.985‟‟ E. It is signed by HCV Officer, Legal Officer and Estate Manager. The documentation photographs of marker relocation are available.  The company has the Record of Maintenance of Bangko Estate BNGE Boundary Marker SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 30of 135 2013 with criteria : a. Checklist implementation b. Marker repairs c. Painting d. Marker location clearing The company is advised to add Marker Coordinate Monitoring criteria to avoid shifting or moving of the marker. In the stage 2 the company has added the criteria of Coordinate Point Monitoring on the Form of BPN Marker Maintenance.  BPN boundary marker check has been conducted during site visit stage 2 as follows: a. Marker of BPN HGU KDA002 Division 4 with coordinates of S 02°03‟37.7‟‟ E 102°28‟38.8‟‟ located nearBlock B10 b. Marker of BPN HGU KDA003 Division 4 with coordinates of S 02°03‟44‟‟ E 102°28‟40‟‟ located nearBlock B09 c. Marker of BPN HGU KDA004 Division 4 with coordinates of S 02°04‟09‟‟ E 102°28‟40.7‟‟ located nearBlock B02 d. Marker o f BPN HGU KDA015 Division 4 with coordinates of S 02°04‟08‟‟ E 102°28‟40.9‟‟ located nearBlock B05 e. Marker of BPN HGB KDA002 Division 4 with coordinates of S 02°04‟32.9‟‟ E 102°28‟53.1‟‟ located nearBlock C02 f. Marker of BPN HGB KDA006 Division 4 with coor dinates of S 02°04‟32.5‟‟ E 102°29‟07.4‟‟ located nearBlock A04 g. Marker of BPN HGB KDA009 Division 4 with coordinates of S 02°04‟19.6‟‟ E 102°29‟07.9‟‟ located nearBlock A05  The company has data of BPN HGB marker points and advised to maintain markers that exist in company area, not the BPN HGU markers only. It is because during the field visit stage 2 the BPN HGB markers were found dull and marker identification number was missing. During preliminary audit, it was found that the company does not have a HGU for the estate at division 4 of Bangko Estate of 218 HA. The company has submitted an application for HGU of 109.73 Ha and 87.35 Ha. Recent data available is cadastral measurement map. Major Stage 1 2. The company has made the corrective action by getting the HGU from Prov.of Jambi issued on SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 31of 135 20January2014, with a total area of 218.08 hectares. They are : 1. HGU No. 01HGUBPN.152014datedJanuary 20, 2014is locatedinKarang Berahi Village, Pamenang, Merangin District, Jambi Province with area details: - NIB 06.04.00.00.00014 total area 92,89 hectares - NIB 06.04.00.00.00016 total area 33,07 hectares Located in the Jelatang village, Pamenang, Kab. Merangin District, Jambi Province with area details: - NIB 06.04.00.00.0001 total area 81,56 hectares 2. HGU No. 02HGUBPN.152014datedJanuary 20, 2014is locatedinKarang Berahi and Jelatang Village, Pamenang, Merangin District, Jambi Province with area details: - NIB 06.04.00.00.00020 total area 4,76 hectares - NIB 06.04.00.00.00021 total area 5,80 hectares Total HGU‟s are 218, 08 hectares Compliance Status : Compliance 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. There is SOP for Land Conflict Settlement SOPSPOSMRTLH-04. So far the company and meetings with stakeholders provide information that there is no dispute in the period of 2010 until the present time in the area around the company. It has been stated in the SOP to prioritize deliberation over legal action. Compliance Status:Compliance 3 COMMITMENT TO LONG-TERM ECONOMIC AND FINANCIAL VIABILITY 3.1 There is an implemented management plan that aims to achieve long-term economic and financial viability The company has a long-term plan in the form of the 2010 – 2020 projection. The document has projected the following: - Projected Profit SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 32of 135 - Production assumptions of CPO, PK FFB - Cost assumptions - Cost of production for Estate Mill and costton of FFB calculation has been carried out. Company‟s short term plan sets out annual budget. The document of Budget 2013 has been available for mills estates. Review is carried out every 4 months of the target set to check its realization. Corporately, the company performs a review annually. The company reports the realization of operations on a monthly basis and corporately reports annually. The oldest plants are those planted in 1997. Based on the projection data and taking into consideration of the fact that the number of stands is over 125 trees per hectare and the production is over 16 tonha there is no replanting plan until 2020 since it is considered economically still profitable. Compliance Status: Compliance 4 USE OF APPROPRIATE BEST PRACTICES BY GROWERS AND MILLERS 4.1 Operating procedures are appropriately documented and consistently implemented and monitored The company has Land Preparation Technical Guideline SOP Oil Palm which is a collection of SOP and WI related to new planting preparation. Issued on 01072010. The company has had SOP-WIfor Oil Palm Cultivating Techniques prepared corporately under the management of Smart, Tbk under the Management Committee Agronomy and Research MCAR, 2012. The SOP-WIcollection for Oil Palm Cultivating Techniques covers the following activities: - CHAPTER I New Planting Plan SOP – SOPSMARTMCARITA-PPA - CHAPTER II Replanting Plan SOP – SOPSMARTMCARIITA-PRP - CHAPTER III Nursery SOP – SOPSMARTMCARIIITA-BBT - CHAPTER IV New Land Clearing SOP – SOPSMARTMCARIVTA-PLB - CHAPTER V Planting SOP – SOPSMARTMCARVTA-TNM - CHAPTER VI Replanting SOP – SOPSMARTMCARVITA-RPL - CHAPTER VII Plant Disease and Pest Control SOP – SOPSMARTMCARVIITA-HPT SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 33of 135 - CHAPTER VIII Weed Control SOP – SOPSMARTMCARVIIITA-PGM - CHAPTER IX Fertilizing SOP – SOPSMARTMCARIXTA-PPK - CHAPTER X TBM Maintenance SOP – SOPSMARTMCARXTA-PTB - CHAPTER XI Preparation for Harvest SOP – SOPSMARTMCARXITA-PMP - CHAPTER XII TM Maintenance SOP – SOPSMARTMCARXIITA-PTM - CHAPTER XIII Harvest SOP – SOPSMARTMCARXIIITA-PNN - CHAPTER XIV FFB Loading and Transport SOP – SOPSMARTMCARXIVTA-PPT - CHAPTER XV Rainfall Measurement with Ombrometer SOP – SOPSMARTMCARXVTA- PCH - Land Clearing SOP SOPSMARTMCARIVTA-PLB, rev.0, issued 192012. On the point 2.2.6 Shaping regulates on: terracing and horse-shoe shaping. - There is a Circular Letter No. 071SMD OPSIX2007 dated 04-09-2007 concerning Prohibition to clear lands by burning relating to the letter of the Minister of Agriculture No. 184LB.130M82007 concerning prohibition of land clearing by burning. The circular letter provides: a Wild fire prevention patrol b Prepare fire squad and fire extinguishing facilities c Assist Local Government should a fire occur in the estate location d Make fire hazard warning signs e Don‟t clear land or cultivate land by burning Land Preparation Activity includes : - Clearing-Blocking IKSMARTMCARIVTA-PLB01- Clearing Blocking - Road Making SOPSMARTMCARITA-PPA and IKSMARTMCAR1TA-PPA02-Road Making - Drainage Making IKSMARTMCAR1TA-PPA01-Drainage - Ex Lalang Land Preparation - Chemical System, Extermination of lalang chemically using glifosat or sulfosat with recommended dose of 6-10 literHa, IKSMARTMCARIVTA-PLB02 - Preparation of Ex Mineral Secondary Forest Land Slashing, Felling, Piling, Heaping, Path SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 34of 135 Clearing, Terracing. Terracing includes : Contour Terracing on hilly areas with a gradient of 9°-22°. Contour terraces of 4.5 m to 3 m wide are made mechanically; SOPSMARTMCARITA-PPA and IKSMARTMCARITA- PPA03. From the samples taken during the field visit in Block 04 planting year 1994 Division 5 BNGE known that the slope is 20, using a clinometer measurements. This result is suitablewith thecompany record that that block is a hilly area. Horse-shoe shaped, certain parts of areas possible for planting but unable to be contour terraced should be horse-shoe shaped of 2.5 m wide to follow the contour. Nursery SOP is available SOPSMARTMCARIIITA-BBT, rev. 00, 192012 and IKSMARTMCARIIITA-BBT06, Seedling Acceptance and Planting, covering the following activities: - Establish oil palm nursery in which nursery is undertaken in stages of Pre Nursery PN of 3-4 months, Main Nursery MN of 11-13 months and Advance Planting Material APM a cultivation period until 38 months old. - Nursery site determination, Nursery area calculation, Land preparation, Irrigation system, Planting media preparation, Seedling acceptance and planting, Watering, Weed Control, Pest and Disease Control, Fertilizing, Selection. - Selection-Culling. If seedlings stay in the nursery for a longer period, they should have a final selection before being loaded and transported to the field. - The company has issued a Memorandum from RC Jambi 1 No. 067RC-MNGR082013 dated 10 August 2013 regarding the use of certified seedlings as a proof of commitment to the established SOP and WI conformance. It confirms that seedlings to be planted must be those seedlings that have obtained recognition from the government and with certificate issued by authorized agencies. - There is form of Oil Palm Seedling Selection Sheet FORMIIITA-BBT06-Seedling Acceptance and Planting01 Selection. - IKSMARTMCARIIITA-BBT08-Selection PN Pre Nursery - There is form of Pre Nursery Oil Palm Seedling Selection Sheet FORMIIITA-BBT08- Selection PN01, rev.00, Rejected seedlings are classified into: RL, C, TS, CM, TS, etc. SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 35of 135 - The seed used is in principle of Marihat Variety of 140.398 Seedlings BNGE Division 4 is 27.045 seedlings and BNGE Division 5 is 113.353 Seedlings. It is strengthened by a Certificate from the Plantation and Forestry Service of Merangin Regency with Certificate No: 525857DisbunhutXI2013 stating that oil palm seedlings used by PT. Kresna Duta Agroindo, Bangko estate from 1993 are seedlings from certified seedling sources that have obtained recognition from government. It is because after tracing the seedling certificate of the previous owner of the estate was not found. - PT. KDA BNGE does not have a nursery site, the seedlings are supplied from Pelakar Estate Nursery, and thereby BNGE does not have documentation concerning the treatment of seedlings that are not meeting the requirements. - The company has Form of Oil Palm Seedling Selection that explains about the types of rejects, including:  TJ = Unclear radikula white andor plumula yellow  RB = Rotten Radikula or rotten Plumula  RS = Parallel Radikula and Plumula  J = Fungi  TN = Abnormal or damaged Lant Cultivation SOP, covering : SOP OF CULTIVATION OF NONPRODUCTIVE PLANTS SOPSMARTMCARXTA-PTB WORK INSTRUCTION OF TREE CENSUS IKSMARTMCARXTA-PTB01-Sensus Pohon WORK INSTRUCTION OF INSERTING IKSMARTMCARXTA-PTB02-Penyisipan WORK INSTRUCTION OF MEASURING PLANT GROWTH IKSMARTMCARXTA-PTB03-Pengukuran Pertumbuhan Tanaman WORK INSTRUCTION OF HARVESTING PLATFORM CONSTRUCTION AND INSTALLATION IKSMARTMCARXITA-PMP04-Pembuatan dan Pemasangan Titi Panen WORK INSTRUCTION OF PALM CIRCLE, HARVESTING PATH, CONTROL PATH AND COLLECTION PATH MAINTENANCE IKSMARTXIITA-PTM01-Perawatan piringan jalan rintis, jalan kontrol dan TPH SOP OF PREPARATION FOR HARVEST SOPSMARTMCARIXTA-PMP WORK INSTRUCTION OF INSECT IKSAMRTMCARXITA-PMP01- SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 36of 135 POLLINATOR DEVELOPMENT Pengembangan Serangga Penyerbuk WORK INSTRUCTION OF CASTRATION IKSAMRTMCARXITA-PMP02- Kastrasi WORK INSTRUCTION OF SANITATION IKSAMRTMCARXITA-PMP03-Sanitasi WORK INSTRUCTION OF HARVESTING PLATFORM CONSTRUCTION AND INSTALLATION IKSAMRTMCARXITA-PMP04-Pembuatan dan Pemasangan Titi panen WORK INSTRUCTION OF PALM CIRCLE, HARVESTING PATH, CONTROL PATH AND COLLECTION PATH MAINTENANCE IKSMARTMCARXIITA-PTP01- Perawatan piringan, jalan rintis, Jalan kontrol dan TPH SOP OF CULTIVATION OF PRODUCTIVE PLANTS SOPSMARTMCARXIITA-PTM WORK INSTRUCTION OF CENSUS IKSMARTMCARXTA-PTB01-Sensus Pohon WORK INSTRUCTION OF PALM CIRCLE, HARVESTING PATH, CONTROL PATH AND COLLECTION PATH MAINTENANCE IKSMARTMCARXIITA-PTP01- Perawatan piringan , jalan rintis, Jalan kontrol dan TPH SOP OF FROND STACKING MAINTENANCE SOPSMARTMCARVIIITA-PGM SOP OF WEED EXTERMINATION SOPSMARTMCARVIIITA-PGM SOP OF ROAD, TRENCH AND BRIDGE MAINTENANCE SOP Pembukaan lahan Baru SOPSMARTMCARIVTA-PLB SOP OF PEST AND DISEASE CONTROL SOPSMARTMCARVIITA-HPT WORK INSTRUCTION OF PRUNING AND FROND ARRANGING IKSMARTMCARXIITA-PTM02-Penunasan dan penyusunan pelepah SOP OF FERTILIZING SOPSMARTMCARIXTA-PPK SOP OF HARVESTING SOPSMARTMCARXIIITA-PNN ATTACHMENT WORK INSTRUCTION OF MILL CRITERIA OF RIPE FRUITS LAMPXIIITA-PNN01-Criteria Kematangan Buah di PKS WORK INSTRUCTION OF HARCESTING IKSMARTMCARXIIITA-PNN01-Panen SOP OF LOADING AND TRANSPORTING FFB SOPSMARTMCARXIVTA-PPT WORK INSTRUCTION OF FFB LOADING SOPSMARTMCARXIVTA-PPT01- Pemuatan FFB WORK INSTRUCTION OF FFB TRANSPORTING SOPSMARTMCARXIVTA-PPT02- Pengangkutan FFB WORK INSTRUCTION OF NET AND SEAL INSTALLATION SOPSMARTMCARXIVTA-PPT03- Pemasangan jaring dan segel - Non-Productive Plant TBM Cultivation no longer exist because the youngest is of the planting SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 37of 135 year 1997. - Productive Plant Cultivation TMincludes : 1. Tree census, 2. Maintenance of Palm circle, harvesting path, control path, and TPH 3. Frond stacking maintenance 4. Weed extermination 5. Road and bridge maintenance 6. Pest and disease control 7. Pruning and Frond Arrangement Cultivation activities are recorded on: - Foreman Activity Log Book BKM – daily, there is BKM dated 12092013 at Division 5 of cultivation activities. - Work Production Log Book BHK – contract work. - For the Core, the result of BKM and BHK is entered into Checkroll program SAP. For Plasma, BKM is recapitulated into Plant Cultivation Report. Data is available on Biological Control Agent Cultivation of Turnera Subulata planting that includes:  Division 5 BNGE, Planting Year 1994, Block B04, October 2013, Actual area of 85 Ha.  Division 5 BNGE, Planting Year 1994, Block G05, October 2013, Actual area of 66 Ha.  Division 5 BNGE, Planting Year 1995, Block B06, October 2013, Actual area of 123.5 Ha.  Division 5 BNGE, Planting Year 1997, Block G03, October 2013, Actual area of 10 Ha.  Division 5 BNGE, Planting Year 1997, Block G07, October 2013, Actual area of 45 Ha. - Records are available on rat census of October 2013. As samples, at Division 5 the number of trees attacked are 217 1.5 out of 12964 trees censuses. From the outcome it can be concluded that the attack remains below the critical threshold limit of 5 for Productive Plant. IKSMARTMCARVIITA-HPT07- Census and Rat Control. - Records are available on Data of Cultivation of Biological Control Agent Useful Weeds of Anti Gonon leptopos of October at BNGE Division 5, Planting Year 1994, Block B04, October 2013 totalled 85 Ha of Actual areas and at BNGE Division 5, Planting Year 1994, Block G05, SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 38of 135 November 2013 totalled 36.5 Ha of Actual areas. The company has had records of plant cultivation in the productive plant TM, including: - UPDKS detection - Palm circle spraying, harvesting path and TPH - Spraying anak kayu weeds - Manual Circle Weeding - Fertilizing - Host plant cultivation Pruning Records are available of Maintenance Pruning Program and Realization 2011, 2012 and 2013 on a monthly basis. During the visit there was no fertilizing activity because fertilizing activity for 2013 semester 2 has completed in September 2013. This can be seen from the Monthly Work Plan of October 2013 and December 2013 where there were no fertilizing activities found. FFB Acceptance During the audit, one truck from plasma of Bukit Bungkul division 5 was inspected; when the fruit was coming there was no representative from the plasma. Parameters for the penalty include: 1. Unripe fruit, 5 kg per bunch penalty 2. Long staks above 2.5 cm : 2 kg per bunch penalty 3. Unfresh fruitlet, the total is estimated in kg 4. Artificially ripening fruit: 5 kg per bunch penalty 5. Rotten fruit is returned 6. Garbage: the total is estimated in kg Price as of 2 October 2013 was Rp. 1370 kg, whereas the price from the Plantation Service was 1387kg for 18.26 yield. Price information is passed by the organization to plasma manager through short messages and the manager of plasma passes it to the KUD through short messages. The price information is then displays in the KUD office. Data of FFB processed in 2012 is 286.328.230 kgwith details as follows: SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 39of 135 Bangko estate 23.195.550 kg TSRA KKPA 385.320 kg Pamenang plasma 23.674.270 kg Bangko plasma 126.309.100 kg Bukit Bungkul Plasma 72.671.300 kg Sungai Bengkal estate inti 39.922.620 kg Kilis Estate inti 87.590 kg Kilis KKPA 60.420 kg Batang gading estate inti 13.370 kg Buah luar outgrower muara kilis 8.690 kg The result of Processing CPO and Inti Sawit in 2012 is as follows Working hours throughout 2012 4926.02 hours CPO production 2012 60,014,366 kg 20.96 Kernel production 14,931,665 kg 5.21 The detail of Langling Mill performance as of 18 November 2013 is as follows: Parameter Hari ini sd bulan ini Year to date Target TBS kg 1.017.720 15.863.820 242.646.230 OER 21,12 20.73 20,57 22,50 Berondolan di tandan kosong 0,016 0,016 0,017 0,030 Minyak di TKKS 0,320 0,312 0,326 0,300 Minyak di serat 0,592 0,595 0,596 0,580 Minyak di biji 0,041 0,040 0,040 0,040 CPO kg 215.846 3.287.999 49.923.552 FFA 4,036 3,518 3,279 3,000 Kernel kg 68.263 858.359 13.130.645 throughput 60,69 60,29 58,25 57 The processing procedure is contained in SOP-PengolahanreviewMCMD12010 from FFB receipt to storage. The process is outlined as follows: Loading ramp SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 40of 135 The fruit was received at the loading ramp, and then using a lori it is sent to the sterilization. Boiling and threshing The boiling uses 3 peaks, the first peak is at 1.5 bar, the second peak is at 2.5 bar and the third peak is at 3 bar, held for 46 minutes. Total boiling time is 85 minutes. The setup of boiling time and pressure is regulated by PLC. Fruit in the lorries after boiling is transported using a hoisting crane to the thresser. After the thresser, empty fruit bunches are also sampled, and their unstrip bunch is analyzed with a standard maximum of 2.5. This is, among other things, to find out how well the boiling process works. High unstrip bunch may indicate that the process of boiling is not complete so that many of the fruit is unstripped. Level of oil in the empty bunch after thressing is also analyzed with the standard maximum of 1.8 percent, this is to find out how well the disposal process of condensate works, otherwise if it is not well disposed the fruit bunchesffb will be saturated with the condensate. Now the condensate is not sampled anymore because it is reused as dilution water. Extraction Cake mixture of fibers and kernels after pressing is also sampled. The parameters measured are oil dry base in fibers with standard not exceeding 7 percent, nut oil losses with standard not exceeding 1 percent, and also the broken nut with the standard of 14. Both aim to see if pressure of the pressing has been optimum. Pressing with too low pressure will result in high oil level in the fibers, while too high pressure will produce high broken nuts. Currently used pressure norm is 50 psi. Purification Samples are also taken at vibrating screen to ensure the composition of oil and water in the right proportion, as the basis for dilution in order to facilitate the separation of oil and water in the CST continous settling tanks. The parameters analyzed are water content where it is kept in the range of 20 – 30, and the oil is kept in the range of 40. Samples are also taken from under flow, the oil content must be 10 to ensure that more sludge is resulted to be separated later at slugde centrifuge. To ensure the sludge centrifuge is well functioned, sludge samples are taken after sludge centrifuge. Oil level in the sludge after the centrifuge should be less than 12 percent, meaning SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 41of 135 the equipment is functioning properly in separating oil and sludge. Production oil is sampled after vacum drier for the FFA quality. Before and after the vacum drier samples are taken for the moisture content to ensure that drying process in a vacum has worked properly. The final quality of CPO can be seen from FFA, water content and impurities parameters. Samples are taken from one of the CPO tanks. Nut processing Nut shells are broken on ripple mill. To see the efficiency of the ripple mill the output of ripple mill is sampled. The output measured is whole nut, broken nut, whole kernel and broken kernel. This is to determine or adjust the opening of ripple mill, if too tight there will be a lot of broken nut, broken kernel, if too loose there will be many whole nut or unbroken nut. Nuts that have been broken into shell and kernel are then separated using claybath. A sample is taken after the clay bath before entering the silo kernel at hydro shell, which is the broken kernel, with the standard of no more than 1 percent. This is to find out how much the broken kernel carried with the shell. Boiler Langling Mill has two units of boiler operated at 20 kgcm2, the permit is at 20.28 kgcm2. The steam production is 20 ton per hour, the setting of parameters on the boiler has been using a PLC. Every 15 minutes it will be shoot blowing automatically. From field observations, smoke coming out of the stacks is still containing shell charcoal, This is because the cyclone does not work properly. Power plant Electricity is generated by 2 units of steam turbines and one unit of diesel generator. During the audit the quality of electricity generated is good as seen from the voltage at 380 V, the frequency at 50 Hz in and the cos phi at 0.9, and at the load of 600 KW during the field visit looked working properly BPV Back Pressure Vessel Back Pressure Vessel is used as a place for storing steam coming out from the steam turbine that will be used for other purposes especially for boiling. During the audit it is seen to use the pressure of 2.5 Kgcm2 below the permitted pressure of 3 kgcm2. SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 42of 135 Maintenance The schedule of general maintenance is listed in the schedule of maintenance 2013, which also specifies the daily, weekly and monthly maintenance. Special maintenance was carried out by third party in the form of a services contract such as the maintenance of hoisting cranes, boilers, and turbines. The examination of hoisting crane through a service contract is carried out 3 times a year. In 2013 it was implemented on 04-06 November for both cranes, based on service report no. 11518 and 11517 from the person who perform the maintenance. In addition, maintenance was also performed on 21-11-2013 crane girder and crane weld. The inspection was conducted by the MHE Demag Indonesia. The inspection of Boiler, sterilizer and BPV, deareator : PT. Multi Ganda; instrument inspection is 2 times a year in 2013 i.e. in Februari-March and early in September. Steam turbine is inspected 2 times a year; last inspected in April 2013. Point of inspection has covered the function of manual hand trip, overs peed trip, load test and low oil pressure test. Load test is carried out on a load of 400 KW. It has been technically suitable because the load test was performed on the load above the paralytic load 30 percent of the maximum load. Compliance Status: Compliance 4.2 Practices maintain soil fertility at, or where possible improve soil fertility to, a level that ensures optimal and sustained yield - SOPSMARTMCARVTA-TNM, 192012. Planting SOP - There is IKSMARTMCARVTA-TNM01- Lining of Flat to Wavy Areas. - SOP and or WI sets 136ha density. The SOP mentions that the density of plant is 136 treesHa, the space between trees equilateral triangle is 9.21 m and the distance between the perpendicular line is 7.98 m. - There is IKSMARTMCARIVTA-TNM02: Lining of Hilly Area, containing information of Table of Terrace Distance, Planting Space within Terrace and Tree Population. - There is no data of planting plan and realization because there are no planting activities throughout the Bangko Estate BNGE. SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 43of 135 The company has had the records of realized planting of oil palm that contains information about estate name, year of planting, planted area. Planting based on recent data of October 2013 is: Division 5 BNGE  Year 1994 : 514.46 ha  Year 1995 : 123.65 ha  Year 1997 : 223.75 ha Thereby the total of TM planting area for PT. KDA is 861,86 Ha. There is a memorandum of Laboratory Analysis Result ref. 019TANAHLAB-SMARTRII2013 dated 25 January 2013 concerning Soil Sample Analysis Result of Soil Sampling Unit SSU BNGE with a total of 84 samples No. Lab. 11243-11326 with request for routine analysis without texture + Cu, Zn, Fe, Mn, B. There is the Result of Soil Sample Analysis carried out by SMART Research Institute-Analytical Laboratory. There is a memorandum of Laboratory Analysis Result ref. 110DAUNLAB-SMARTRIIII2013 dated 16 March 2013 and 205DAUNLAB-SMARTRIIV2013 dated 6 April 2013 concerning Leaf Sample Analysis Result of Leaf Sampling Unit LSU BNGE with a total of 37 samples No. Lab. 3107-3133 and 4461-4470 with request for the analysis of N, P, K, Mg, Ca, B, Cl. Based on the result of soil and leaf analysis a fertilizing recommendation was issued in 2012, for example: Block B3 of Division 5 has a fertilizer dosage of RP 1 KgTreeYear, MOP 1 KgTreeYear, Borate 0.075 KgTreeYear and Compost 70 KgTreeYear. Compliance Status: Compliance 4.3 Practices minimize and control erosion and degradation of soils The company has Erosion Measurement SOP, PT KDA – BNGESOP28, Revision: 00, effective date 1 August 2013 for Bangko Estate BNGE area. There is River Border Protection SOP of SOPSPOSMARTLH-06, effective date 1 July 2010 revision: 01 There is River Border Protection SOP of SOPSPOSMARTLH-07, effective date 1 July 2010 revision: 01 SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 44of 135 There is Circular Letter from RC Jambi 1 No. SE-RCKDA102013 dated 1 October 2013 concerning Watershed Protection that specifies palm oil free zone of 50 meter from river banks. Information dissemination to workers and communityfarmers around the estate is notice boards on the prohibition to use river, e.g. no fishing, no fire, no planting. The company has had a Semi detailed Land Map, Site Map, soil type map, solumn depth, drainage, soil suitability class and Topographic map of 1:75.000 scale no. reg : 540202PMNPIV12 and River Map of PT. KDA Area No. Reg. 1359214PMNPXI13 of 1:40.000 scale. River Border Protection is to clear from oil palm trees the areas 50 meters from river edges, and the river banks are planted with bamboo species to prevent erosion. Information dissemination to workers and communityfarmers around the estate is by means of notice boards prohibiting the use of river, e.g. no fishing, no fire, no planting. Type of activities includes: - Terresan - Pit Pond - Establishment of LCC - Weed Management - Frond Arrangement - Empty Bunch Mulch Company policy related to soil and water conservation includes : - Prohibit the planting of palm in the river boundary area of 50 meter to the left and right of the river. In the estate, Mampun River and Blengo River have width 7 meter. - Prohibit the cultivation of land in the river boundary area by placing notice boards. - Build a bordering road between the plantedmanaged area and the protected area. - Make a prohibition related to river boundary area 50 to the left and right of the river planted and maintained manually and free from chemicals. The principle 4.1 describes that: Preparation of Former Mineral Secondary Forest Land Slashing, Felling, Piling, Heaping, Path Clearing, Terracing. Terracing includes: SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 45of 135 Contour Terrace Contour terrace of 4.5 m to 3 m wide is made mechanically on a hilly area with slope gradient of 9°- 22° SOPSMARTMCARITA-PPA and IKSMARTMCARITA- PPA03. Horse shoe Tapak Kuda, certain parts of the area possible for planting but unable to be contour terraced should be horse-shoe shaped of 2.5 m wide following the contour. There is Work Instruction of IKSMARTMCARIIITABDT06- Peat Land Cultivation WI Rev.00 dated 26 March 2012. However, the area of PT. KDA has no peat land. There is Memorandum of Prohibition to Clear Peat and Primary Forest Area No. 039SMD OPSIII2010 dated 26 March 2010. There is no Peat land in the area of PT. Kresna Duta Agroindo which is evidenced by semi detailed map indicating that all of the area is mineral soil, which was confirmed during the site visit where no peat area was found. There is no Peat land in the area of PT. Kresna Duta Agroindo which is evidenced by semi detailed map indicating that all of the area is mineral soil, which was confirmed during the site visit where no peat area was found. Compliance Status : Compliance 4.4 Practices maintain the quality and availability of surface and groundwater. The company has identified the source of water in the estate and mill areas i.e. Mampun River and Belango River. Protection of watersheds is by setting 50 m wide to the left and right of the rivers as a conservation area. Alongside 5 trees to the left and right is not sprayed. Among those realized are the instalation of notice board that read PROTECTED RIVER BOUNDARIES. Management programs for river water in the area of Langling Mill are Mampun River water quality monitoring. The testing parameters for river water measurement refer to the Government Regulation 822001. River water quality testing was carried out by BLHD of Jambi Province on 5 June 2013 for Mampun River Upstream Downstream. The test results show that pH and BOD values are above the quality standard for water quality class II. RKLRPL report has evaluated this condition i.e. low pH which is due to acidic soil in the initial condition and BOD which is due to activities outside the oil palm estates mills. In managing Mill‟s liquid waste, the company built a WWTP with a capacity of 68,000 m 3 52,000 SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 46of 135 is active and 16,000 is Non-active. None of the waste is dumped into a water body or soil since the waste is applied on land. Monthly observation of waste quality is carried out by external laboratory of BLHD of Jambi Province with sampling points at the pond outlet 5. Testing parameters are BOD, COD, pH, oil-grease, Pb, Cu, Cd, Zn, which refer to Decree of the Minister of Environment No. 282003. The test result of January – July 2013 shows that BOD pH complies with the quality standards. Every 3 months an analysis is carried out on the water quality of monitoring well I, II and III wells located at residential area. Parameters measured are BOD, DO, pH, NO 3 , NH 3 , Cd, Cu, Pb, Zn, Cl and SO 4 . The result of recent test was that of 5 June 2013. The results for monitoring well I, II and III show that BOD and pH comply with the quality standards. The result of test for residential wells 1 and 2 at worker housing is below the quality standard for pH. It is for MCK bathing, washing and toileting only, while for drinking the clean water from the mill is used. The source of water for Langling Mill‟s process comes from artificial reservoirs with a capacity of 70,875 m 3 . The source of the reservoir is river water. The use of water has been recorded on a daily basis i.e. the use of water for mills and the use of water for housing. Data of water use in the mill for June 2013 is 26,798 m 3 and the efficiency is 1,191 tonFFB Budget: 1.195 tonFFB Compliance Status: Compliance 4.5 Pests, diseases, weeds and invasive introduced species are effectively managed using appropriate Integrated The company establishes a procedure for handling agrochemicals in the SOP of Pest and Disease Control SOPSMART.MCARVIITA-HPT, 192012. List of agrochemicals used by the company has been available covering brand, active ingredient and permit for circulation in Indonesia. Monthly use of pesticides has been recorded in the report of agrochemical toxicity data. The report has included amount of application, total active ingredient, FFB production and toxicity unit. During the field visit to Division 5, block B-3, Glyphosat and Methyl Metsufuron was being applied. The dosage has been in compliance with the recommendation. The use of restricted pesticides like paraquat is still found but the company has a policy to reduce the application of paraquat herbicide. Chemicals used by the estate have no paraquat active ingredient of Dichloride, Glyphosate Isopropyl Amine, Methyl Metsufuron, Triklopir Putoksil Ethyl Ester, and Deltametrin. Training programs on Restricted Pesticide are available dated 10-10-2011, attended by 12 SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 47of 135 participants who have signed the attendee list. Training materials, training evaluation and training-related photo documentation are available. The certificate has a validity period of 5 years Valid until 31 October 2016 issued by the Commission for Fertilizer and Pesticide Control of Jambi Province. Materials presented were Integrated Pest Control PHT, Palm Leaf Eating Caterpillar UPDKS, Rat Census and Pesticide Management. Recapitulation is available of Rat Pest Attack Census results in the area of Productive Plant which is conducted every 3 months with the census result for Division 4 is a total of 24 trees are attacked by rat pest and for Division 5 a total of 235 trees are attacked by rat pest with the total attacks of 261 Trees. Census personnel are 2 for Division 5. Spraying personnel, Bangko Estate has 1 Spraying Team with 17 members: Spraying Foreman : 1 Spraying personnel : 15 Operator taking Agrochemical to the site : 1 At stage 2 a site visit was made for Circle Spraying activities, harvesting path and TPH at the BNGE block B08 in the planting year 1994 S 02°06‟10.3‟‟ E 102°21‟55.4‟‟, Spraying Team i.e. Spraying Foreman Sdr. Suhar with his 8 members 5 spraying personnel, refilling personnel and mixing personnel. PPE used by spraying personnel includes: Rubber gloves, Apron, Spraying Coat, Boots, Mask and Face shield. Extra pudding of milk is given prior to spraying. Doses used in spray are 160 ml. The practice of spraying in the field conforms to the specified procedure, for 2 meter circle the spraying is carried out around the tree and 1.5 meters for harvesting path. Naming and location of Block has conformed to the company‟s map. During the field visit and interviews at stage 1 with spraying personnel it is found that the spraying with Agrochemicals is carried out on trees located on trench banks. This is indication of pollution in water bodies. The company should ensure that trenches in plantation area do not drain directly to the river although the dosage used is very small. At stage 2 the company has conducted sampling and sent the samples to the BLHD Lab. on 8 October 2013, the result from the Jambi BLHD Lab has been available. There is Kebun Bangko Trench Test Certificate No. 006ELKDA-KLHIX2013 dated 15-11-2013 stating the results of test for parameters which test SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 48of 135 is completed, while for parameters which test is not yet completed will be immediately delivered to the company along with the Test Certificate. There is a test report no. 843LHULABLINGX13 dated 12 November 2013 with the result of pH 7.55; BOD5 3 mgL; COD 20 mgL; Total Phosphate PO4-P 0.02 mgL; Nitrate NO3 0.169 mgL; Nitrite NO2 0.028 mgL; E-Coli 400 jml100; Total Coliform 1100 jml100 that comply with Government Regulation No. 822001. There is Data of Biological Control Agent Cultivation Useful Weed in 2013 of Turnera subulata planting provided with planting and cultivation map of Turnera subulata at Bangko Estate BNGE. There is Data of Detected Oil Palm Leaf Eating Caterpillar UPDKS at Bangko Estate BNGE Block C1 Division 5 dated 3 July 2013 stating that there is no tree attacked. For Antigonon planting activities a record of Planting Map of Antigonon sp. is presented Compliance Status : Compliance 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 categorized as World Health Organization Type 1A or 1B, or are listed by the Stockholm or Rotterdam Conventions, growers are actively seeking to identify alternatives, and this is documented The company establishes a procedure for handling agrochemicals in the SOP of Pest and Disease Control SOPSMART.MCARVIITA-HPT, 192012. List of agrochemicals used by the company has been available covering brand, active ingredient and permit for circulation in Indonesia. Monthly use of pesticides has been recorded in the report of agrochemical toxicity data. The report has included amount of application, total active ingredient, FFB production and toxicity unit. During the field visit to Division 5, block B-3, Glyphosat and Methyl Metsufuron was being applied. The dosage has been in compliance with the recommendation. The use of restricted pesticides like paraquat is still found but the company has a policy to reduce the application of paraquat herbicide. Chemicals used by the estate have no paraquat active ingredient of Dichloride, Glyphosate Isopropyl Amine, Methyl Metsufuron, Triklopir Putoksil Ethyl Ester, and Deltametrin. SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 49of 135 The management of used pesticide containers has been regulated in the procedure of Used Pesticide Container Washing WI IKBNGELLBH01, revision 1 dated 30 Jan 2013. The work instruction regulates that used pesticide containers of plastic jerrycans and bottles are managed by means of collecting them in a special warehouse and washed 3 times. Used washing water is reused for the next mixing process and if necessary the used containers that have been washed are returned to the Supplier or handed over to licensed third parties. The company has provided pesticide mixing, used pesticide container washing, used fertilizer bag washing, pesticide apron washing, and spraying personnel bathroom facilities. Materials presented were Integrated Pest Control PHT, Palm Leaf Eating Caterpillar UPDKS, Rat Census and Pesticide Management. The company has established policies for women workers through Circular Letter No. 02VPA- 112009 dated 13 January 2009 concerning Female Workers i.e. spraying job is prohibited for pregnant or breastfeeding women. The company provides bathing facilities to the spraying team at Bangko Estate. The facility for the disposal of bathroom waste water which is contaminated by spray substance regardless its small amount is still exposed, no safeguarding barriers or fences, and warning signs are found. And it is necessary to conduct water quality testing on the effluent in order to meet the effluent quality standard. At the time of preliminary audit, company has not conducted special health examination of the workers spraying in 2012 according Regulation of the Minister of Manpower No.31996 that requires the examination to be conducted once every 6 months. During the final audit, the company has conducted health examination to the entire workforce as audiometry, spirometry and colinesterase in October 2013. For year 2014, the company has made the program for health examination to be conducted twice a year. At the prelimenary audit, there was no pregnancy test conducted for female spraying workers section on a monthly basis. During the final audit, the pregnancy test has been conducted for female workers spraying. Compliance Status: Compliance 4.7 An occupational health and safety plan is documented, effectively SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 50of 135 communicated and implemented Agrochemical Warehouse Agrochemical warehouse and washing facilities at Division 5 and warehouse for temporary storage of herbicide have good air circulation, which is provided with a secondary containment. The washing of cap spray tube is carried out in the washing place, which has a shape of bathwashing pond. The washing of spraying personnel clothes, apron is also carried out in the clothes washing place. Clothes are washed using water only. Used washing water is reused as dilution water. The mixing personnel at chemical warehouse of Division 5 have been provided with a cartridge chemical mask provided on 09 October 2013. Work Environment Inspection Stage 2 In Langling Mill the levels of chemicals in the workplace was measured on 29-10-2013 noise, heat stress, dust, lighting, vibration and gas. Emergency handling Emergency procedures in Bangko Estate and Langling Mill are regulated in emergency handling procedure no. SOP17SMARTLH-09. Emergency handling is implemented as follows: Bangko estate emergency response team has been established, including the first aid team. Emergency simulation in the office was held on 30 September, but it was not provided with its evaluation yet. The inspection of portable fire extinguishers is carried out monthly. There are 34 portable fire extinguishers. The monitoring of land fire extinguishers is carried out monthly, data taken is data of September 2013; suction hose is not available; fire flapper, axe, chainsaw are not provided yet not listed in the checklist yet. Fire simulation in the estate housing was held on 28 September 2013,Mill fire simulation, earthquake was on 16 February 2013. Inspection of emergency handling equipment of portable fire extinguisher, hydrant, and traditional extinguishers is carried out monthly. July samples. During the audit stage I the stand by pressure of hydrant installation was checked, it can be seen that stand by pressure was less than 4.5 kgcm i.e. at 1.8 kgcm2. Equipment certification ; The organization has certified some equipment that became the object of Manpower Service‟s SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 51of 135 supervision with evidence as follows : 1. Power Instalation : 104105EJIL1997 23 August 1997 since the application of puil 2000 the electrical installation certification has not been updated 2. Lightning arrester : 108W.5E3I.P1997, inspected and tested on 16 July 2013 3. Pressure boiler : 109W.5E3BT1997, inspected and tested on 16 July 2013 4. Steam turbine : 103W.5E3MD1997 January 2013 and 103W.5E3MD1997 inspected and tested on January 2013 5. Hoisting crane : 99W.5E3PES1997dan 100W.5E3PES1997 inspected and tested on August 2013 6. Wheel loader : 56050PHIPPAASosnakertrans 7. Boiler ; SI.105W5E96  16 July 2013, SI.102W5E96, inspected and tested on 16 July 2013, SI.103W5E96  16 July 2013, SI.106W5E96, inspected and tested on 16 July 2013. 8. Boiler : SI.101W5E96 pressure 21 kgcm2, inspected and tested on 16 July 2013 and SI.100W5E96, pressure 21 kgcm2, inspected and tested on 16 July 2013. 9. BPV : SI.104W5E96 pressure 3.2 kgcm2 inspected and tested on 16 July 2013. 10. Diesel genset : 105W.5E3MD97  20 January 2013 and 106W.5E3MD97 on 20 January 2013. 11. Hydrant : 560541HISKSNKT2013 Bangko estate 1. Grader : 560279PHIPKPAASOSNAKERTRANS2012 : June 2012, last inspected and tested on 19 July 2013 2. Tractor : 560278PHIPKPAASOSNAKERTRANS2012 : June 2012, last inspected and tested on 19 July 2013 3. Pressure vessel : 560281PHIPKBJSOSNAKERTRANS2012 : June 2012, last inspected and tested on 19 July 2013 Operator license Organization has had workers required to have a license in order to perform their tasks. Based SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 52of 135 on stage I audit, it was known that the license of several operator such as : Katno, Budiyanto, Purwanto, Darusdi had been expired since 12-2012. The organizations has propose to local manpower otority of Jambi Prov at 28-09-2012 in a letter no. 0150UH-LNGM-CDisnaker- JambiIX2013. Based on the audit findings the license of other operator was still valid for example Erizal as crane operator the license valid until 13-12-2015, Sidauruk as crane operator the license valid until 13-12-2013, Yopan as crane operator the license valid until 13-12-2013 and Supriyono as loader operator the license valid until 13-12-2013. Estate Clinic In the estate there is a clinic for employee health service. This clinic provides certain medicine, including: First aid First aid box is available at block B6 of Division 5 and kept by harvest foreman. First aid box is also available in the block B3 of Division for 5 spraying personnel, and kept by spray foreman. P2K3 K3 Organization Langling Mill has implemented SMK3 and has been certified by the Ministry of Manpower and obtained the certificate on 23 April 2012. P2K3 has obtained legalization from local Manpower Service with No.: 462013 from Head of Social, Manpower and Transmigration Service of Merangin Regency. Bangko Estate P2K3 has been legalized with legalization no. 232103 from Head of Social, Manpower and Transmigration Service of Merangin Regency. Risk management The organization has made hazard identification and risk assessment with following evidence: 1. In Langling Mill, hazard identification records were updated on 06 January 2013 2. In Bangko Estate, risk management records were updated on 07 January 2013. At block B3 Division 5 there are oil palm trees under the electricity network and the hazards have been identified Based on the results of field obse rvations in block B6 2º 6.05‟ LS and 102º 2.17 BT harvesting personnel cuts the frond in an upright position and frond is falling on position of less than half a SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 53of 135 meter from him because he is not sufficiently extending his pole. Because of this the socialization was conducted on how to harvest safely on 10 October 2013. From the result of interviews with the spraying personnel in block B08 of division 5 it is revealed that the weight of cap is 15 kg and currently there has been no complaint from the spraying personnel as a result of lifting such load. Worker health examination The examination of occupational health of the workers in Bangko Estate also included audiometry tests on 30 October 2013. In Langling on 29 October 2013 there were 17 personnel who are experiencing declines in hearing ability and for this reason a work plan for further examination should be made. Pregnancy check was also carried out in October and the organization has a program to do the pregnancy checks for the spraying personnel once a month. Jamsostek 1. 133 workers in Langling Mill have been included in Jamsostek. Proof of payment no 2013 dated June 2013 to Jamsostek of Muara Bungo, Jambi, cab 2 2. In Bangko Estate there were 196 workers included in Jamsostek program based on proof of payment of 189 workers seven people were out on 02 September 2013, Jambi branch II of Muara Bungo through Bank Mandiri with additional three workers. Those who have not participated in Jamsostek program have been registered starting August 2013. Payment of premium in October for Jamsostek PKWT BHL are 147 people as listed in the evidence of PKWT BHL records by Manpower and Transmigration Service has been paid on 08 October 2013 amounting to Rp. 1.254.516 0.84 For BHL spraying personnel the JKK-JKM payments to the Jamsostek has not been made yet because they have their participation in Jamsostek registered just recently to the local Manpower Service on 25 September 2013, based on the letter from Manpower Service 560419HISKSNKT2013 and have been submitted to the Jamsostek through the letter No. 138BNGE-Jamsx-2013 on 27 September 2013. As long as not yet registered they become the responsibility of the company based on a circular letter No. 041CE01-SE022011 that compensation for the accident become the responsibility of the company. Incident reporting and investigation SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 54of 135 Reporting and investigation of work accidents both for Langling Mill and Bangko Estate are regulated in the procedure of SOPSMK3SMARTLH-10, and has been reported at regular intervals based on the following: 1. Langling Mill : there is monthly report containing annual recapitulation of SR and FR, 2. Bangko Estate : there is monthly report containing annual recapitulation of SR and FR, During prelimenary audit, it was found at the clinic that the anti snake venom is expired in August 2013 and it has not been discarded. When the final audit, the anti snake venom has been removed from the clinics stock and send to a medical waste disposal facility of the Bangko Regional Hospital. As evidence of the corrective action such as Disposal report of expired bottles of anti-snake venom and document shipments of medical waste to the Regional Hospital Bangko Compliance Status: Compliance 4.8 All staff, workers, smallholders and contractors are appropriately trained. The company set a training program for 2013 in the form of Proposed Training Program of Jambi Region 2013 for the mill and estate personnel. In addition, the company also established a training program of environmental and K3 management system. The management of training refers to HRD Training SOP No. Doc: SOPSPOSMARTLH-10. The realization of training 2013 has been recorded such as first aid training for foreman on 28 September 2013 in the office of Division 5, EMS training for staff on 22 August 2013, HCV Training on 14 June 2013 and PHT training on 23 September 2013. SOP for Control of Contractors has been available SOPSMK3SMARTLH-26 but it just sets the requirements for K3 aspect, not the requirements to determine employment aspect and determine the use of a trained contractor. The company has had a list of contractors both in the Langling Mill and Bangko Estate. During the preliminary audit, sampling had found that there was no evidence that the selection of trained contractors was implemented so that this was issued as a major finding. The company has made the corrective action by revised the SOP and add the requirement for trained contractors and ensure the selected trained contractor to be used the company. During the certification audit, sampling for Langling Mill of SPK no. SPKLNGM062013 for the SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 55of 135 construction of solar home, site concrete filling, there had been evidence that the contractors were trained with the existence of a copy of a certificate of the worker welding certificate. It is stated in article 6 paragraph 5 of the SPK to assign trained personnel. Sampling in the Bangko Estate of SPK No. BNGPPLASMA0613005 for Plasma FFB Purchasing Cooperation in which it requires licenses such as driving license SIM, vehicle ownership certificate BPKP, motor vehicle license STNK and motor vehicle inspection certificate before being contracted by the company. This is stated in article 8 paragraph 2 of the SPK. The company has conducted SIM and STNK inspection but it is advisable to ensure that motor vehicle inspection is done as required by the SPK. SOP for Control of Contractors has been available SOPSMK3SMARTLH-26 but it just sets the requirements for K3 aspect, not the requirements to determine employment aspect and determine the use of a trained contractor. It should be ascertained that every SOP has set the requirements for employment aspect and trained contractors. Compliance Status: Compliance 5 ENVIRONMENTAL RESPONSIBILITY AND CONSERVATION OF NATURAL RESOURCES AND BIODIVERSITY

5.1 Aspects of estate 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 The company has had environmental and K3 aspect identification, SOPSPOSMARTLH-11, with endorsement date of July 1, 2010. Documented impact analysis is available in the UKLUPL document of Langling Mill located in Bangko District and Perwakilan Pamenang District, Sarolangun Bangko Regency, Jambi Province, which has been approved by the Regent of Sorolangun Bangko No. 731BA XI51995 dated 23 November 1995. The environmental document states the mill capacity of 60 tonhour with core estate area of 620 hectares. But the total of core area has changed now, where this change has not been accompanied by changes in the UKLUPL document. Langling Mills have 2 Environmental documents i.e. UKLUPL and AMDAL. There is a recommendation letter from the Ministry of Environment concerning the Langling and Jelatang SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 56of 135 Mills‟ environmental documents that the company is allowed to use the existing UKLUPL until further decision will be made by Ministry of Environment. The company has the chronologies document of correspondence between PT. KDA and the Ministry of Environment. In addition, the company established a document of environmental aspect and impact list and evaluation of Langling Mill in August 2013. The identification of aspects and impacts refers to the Environmental and K3 Aspect Identification SOP No.: SOPSPOSMARTLH-11. Records show that environmental management reporting has been implemented every 6 months through RKLRPL report. The RKLRPL report of semester I – 2013 has contained the following: - Liquid waste quality monitoring: record of liquid waste test result of January – June 2013. The result of measurement complies with the quality standard set out in the regulations. - Air quality monitoring: record of the result of emission and ambient air tests of June 2013. The result of measurement complies with the quality standard set out in the regulations. Measurement of environment and new working environment was just conducted in October 2013 by Balai Hiperkes K3 Medan. Delay in measuring environmental parameters was due to the test laboratory‟s time constraint. The RKLRPL report was submitted to the Ministry of Environment on 2 September 2013, to the BLHD of Jambi Province on 28 August 2013, to KLH of Merangin Regency on 14 September 2013 and to Pekanbaru Ecoregions on 14 September 2013. However it is advisable to improve the consistency in reporting time, i.e. every 6 months in accordance with the applicable regulations. In the next period, the measurements of quality standard will be in frequency as specified in RPL document; The problem was because the Laboratory of Jambi Province BLH took time to deliver the results, about 1 – 2 months after the samples are sent. The company has UKL UPL document of Langling Mill has undergone extensive changes in croplands. The company is in the process of changing those document and didnt finish yet because of the authority problem between the local and the central government to provide the final solution. Compliance Status: Complience 5.2 The status of rare, threatened or endangered species and high conservation value habitats, if any, that exist in the estate or that could be affected by estate or mill management, shall be identified and their conservation taken into SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 57of 135 account in management plans and operations PT. Kresna Duta Agroindo has had SOP of Protection of flora and fauna in plantation environment which is contained in SOP of Identification and Management of HCV, No.: SOPNPSMARTIVLH 001 effective on 1 July 2010 Revision No. 01. The company has had the document of Environmental Management Effort UKL and Environmental Monitoring Effort UPL of PT. Kresna Duta Agroindo Langling Palm Oil Estate and Mill that covers environmental condition associated with flora and fauna. Based on information on ANDAL document before planting, oil palm estate and oil palm mill it was a secondary forest of Meranti Shorea sp. and Keruing Dipterocarpus sp.,the natural vegetation it contains is the vegetation type of tropical rain forest. Protected species include Durian burung Durio carinatus and Jelutung Dyera costulata. UKL UPL of Jelatang Mill No. 419BA.5IX1996 dated 19 September 1996 with a capacity of 30 tonhour with a core area of 229 Ha and plasma area of 5.580 Ha. UKL UPL of Langling Mill No. 731BA.5IX1995 dated 23 November 1996 with a capacity of 60 tonhour with a core area of 620 Ha and plasma area of 5.229 Ha. Information on UKL-UPL document before planting, flora identified is commercial crops such as meranti Shorea sp and keruing Dipterocarpus sp; there is the identification of flora and fauna before planting. The UPL-UKL document contains information on flora and fauna when it was a secondary forest. Information on flora and fauna are described in detail in the document of Environmental Management Effort UKL and Environmental Monitoring Effort UPL of Langling Palm Oil Estate and Mill, Bangko District and Perwakilan Pamenang District, Sarolangun- Bangko Regency, Jambi Province in 1995. Data of flora diversity consists of : Natural Vegetation Species No. LocalRegional Name ScientificLatin Name 1. Areng-areng Cratoxylon celebicum 2. Buta-buta Exoecarid agallocha 3. Anggung Trema agallocha 4. Durian burung Durio carinatus 5. Gurah Sapium indicum 6. Jelutung Dyera costulata 7. Kapur Aryobanops aromatic SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 58of 135 8. Kulim Scorodocarpus boornensis 9. Laban Vitex pubescens 10. MahangBenuas Macaranga priinosa 11. Medang Litsea sp 12. Merawan Hopea sangal 13. Nyatoh Paloguium sp 14. Nibung Oncosperma filamentosum 15. Meranti Shorea sp 16. Pulai Alstonia scholaris 17. Punak Tetramerista glabara Remarks : = Protected Shrub Vegetation Species in the Study Area No. LocalRegional Name ScientificLatin Name 1. Alang-alang Imperata cylindrical 2. Brajewangi Sikania cordata 3. Alamanda Alamanda cathartica 4. Kembang Penjit Yussica perruviana 5. Gelagah Hyptis brevipes 6. Tembelekan Saceharum spontaneum 7. Lantana Lantana camara 8. Jarong Stachyarpeta indica Data of terrestrial fauna diversity in the location of project of PT. KDA before planting includes : Shrub Vegetation Species in the Study Area No. LocalRegional Name ScientificLatin Name MAMMAL 1. Teledu Mydaus javanensis 2. Berang-berang Lutra sp 3. Linsang Prinodon linsang 4. Musang Paradoxurus hermaphrodites SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 59of 135 5. Kelelawar Roussettus amplexicaudatus 6. Landak Hystrix branchura 7. Tikus Jantung Maxomys rajah REPTILIA 1. Ular Sendok Naja Hannah 2. Ular Sawah Phyton sp 3. Biawak Varanus salvator AVES 1. Alap-alap Falco peregrinus 2. Puyuh Turnix suscitator 3. Punguk Otus bakkamoena 4. Elang Bondo Haliastur indus 5. Kucica Turdus obscunis 6. Belatuk kanih Dryocopus javeusis 7. Perkutut Geopelia striata 8. Betet Sitlaacula 9. Sriwang Terpsiphe paradise 10. Cocup Anthrreptes Remarks : = Protected List of fauna after planting is contained in the Report of Identification of Management and Monitoring Plan of High Conservation Value HCV at Bangko Estate BNGE i.e. Endangeredprotected species that belong to the list in Government Regulation No. 71999 Protected and CITES include : No. LocalRegional Name ScientificLatin Name 1. Raja Udang Meninting Alcedo meninting 2. Burung Elang Ular Bido Spilornis cheela 3. Cekakak Belukar Halycon smyrnensis 4. Macan Akar Felis bengalensis 5. Monyet Ekor Panjang Macaca fascicularis 6. Lutung Kelabu Presbytis cristata 7. Lutung Simpai Presbytis malalophos 8. Biawak Varanus sp The company has a specialized and trained officer in the company structure to oversee the plan SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 60of 135 and activities of HCVNKT i.e. Sdr. Ramlan Situngkir PIC HCVNKT. The company has installed rare animal socialization boards in strategic places in the form of pictures of rare animals identified in the area of PT. Kresna Duta Agroindo. Records are available of socialization to the public in the form of socialization photo documentation in the afdeling office, warning sign boards of protected flora and fauna, warning sign boards of tree cutting prohibition in a conservation area which are found in the field in strategic areas. In addition, socialization in the form of meetings at Bangko Estate of PT. Kresna Duta Agroindo has been conducted where the participants has signed the attendee list. The company has the Report of Identification of Management and Monitoring Plan of High Conservation Value HCV at Bangko Estate carried out by the Environmental Department of PT. SMART, Tbk in 2011. Peer review is by Dr. Kunkun Jaka Gurmaya Listed on the Assessor of the RSPO and Founder of the FISPO an independent body approved to perform peer review on high conservation value HCV. At Bangko Estate it covers Belengo River border area, Mampun River border area , reptile biawak, mammal macan akar, babi hutan, Aves, and so on. The protection of river border area is to clear an area from oil palm trees 50 meters from the edge of the River, and the river border is planted with vertiper grass Block B11 and A7 totaled 80 clusters in July 2013 and 62 clusters in September 2013 and with fruit trees Block B11, A9, A7 and A10 totaled 28 Trees July 2013 and 70 Trees September 2013 in order to prevent erosion. For the protection of fauna, the company provides communications boards of hunting prohibition in some areas where fauna identified to appear. In the BNGE there are HCVNKT 1.1, 4.1 of Belengo River Border, Mampun River Border and freshwater Marshes. There are records of socialization on HCV meaning, HCV types, HCV management types and HCV monitoring types by PT. KDA carried out on: 25 September 2013 located at Division V BNGE with the speaker PIC HCVNKT Ramlan Situngkir and Division 5 Field Assistant and attended by 30 employees of PT KDA and 17 Security personnel. After field checks it is found that socialization is only done to spraying workers and security personnel while other employees has not received the socialization about the NKTHCV. The company should perform socialization to all of PT KDA employees and the surrounding community. At stage 2 the company has carried out socialization to all of PT KDA employees and the surrounding community. Records are available on the Minutes of Public Consultation SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 61of 135 held on Wednesday, 23-10-2013 and attended by Village Head, KUD, Police as well as 44 personnel from PT KDA who have signed the attendee list and the documentation photos are available. The socialization of NKTHCV has also been implemented at Bangko Estate Division 5 dated 09-10-2013 which was attended by 33 people, dated 25-09-2013 which was attended by 30 people, dated 16-11-2013 at Bangko Estate Division IV which was attended by 44 people, and dated 13-11-2013 at Langling Mill which was attended by 35 people and have signed attendee list and the documentation photos are available. There are 20 boundary marks of NKT 1.1 and NKT 4.1 of river borders and swamps, made of concrete-filled PVC pipe of 4 inches in diameter and 1.5 m long with a height of 1 m above the ground and a depth of 50 cm. They are placed in easily visible areas. There is the report of maintenance of high conservation value boundary marks; the last time was 20092013 20 markers with the activity of clearing the site from shrubs at each marker. Spray boundary marks are the red letter X painted on Palm tree approximately 1 meter from the ground, this sign is made along the river border on each Palm tree having a distance of 50 meters or 5 Palm trees from the river bank. It is explained in a circular letter from RC Jambi 1 No. SE-RCKDA102013 dated 1 October 2013 concerning the protection of Watersheds. During field visit the HCVNKT Markers were checked, including: 1. Marker of NKT 1.1, 4.1 B1124 coordinates 02°05‟59” S and 102°22‟24” E. 2. Marker of NKT 1.1, 4.1 B1125 coordinates 02°05‟56” S and 102°22‟21” E. 3. Marker of NKT 1.1, 4.1 B1131 coordinates 02°05‟07” S and 102°21‟19” E 4. Marker of NKT 1.1, 4.1 B1133 coordinates 02°05‟05” S and 102°21‟19” E. After checking the estate internal documents it is known that the position of B1131 marker got exchange with the B1133, the marker should be immediately corrected in accordance with the internal document of HCVNKT marker coordinates of PT KDA. At stage 2 the company has conducted the relocation and adjusted with the proper data, there is the Minutes and photo documentation of Changes to Coordinates Markers of HCVNKT 1.1; 4.1 with marker number F133 and F134 on Tuesday, 15-10-2013 and signed by the HCV Officer and Estate Manager with following details: 1. Marker of NKT 1.1;4.1 F133 from the original 02°05‟05” S and 102°21‟19” E into 02°05‟07” S and 102°21‟21” E. SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 62of 135 2. Marker of NKT 1.1;4.1 F133 from the original 02°05‟07” S and 102°21‟19” E into 02°05‟09” S and 102°21‟21” E. There is patrol report of High Conservation Value; the last one was on 21092013 with a team of M. Anip and Suhardi. There is the Minutes of warning installation of River Border Area Management dated 02052012 located at Division V PT. KDA BNGE block A7 and block F1 1 warning each. There is the Minutes of warning installation of Protected River Border Marker dated 02052012 located at Division V PT. KDA BNGE block A7, A9, A10, B11, C2, F1 and F2 1 warning each. The company has had SOP of HCVNKT Identification and Management, No.: SOPNPSMARTIVLH 001 effective 1 June 2010 Revision No. 01. The following is details of Identification and Analysis of Residential Area with High Conservation Value HCVNKT of Bangko Estate BNGE : Type of HCV Field Identification Results DivisionBlock Location of Finding Area Ha Bangko Estate 1.1 Areas having or providing biodiversity supporting function to protected andor conservation areas. Belengo River Border 2.05 Mampun River Border 49.62 1.2 Endangeredprotected species that come under the list in Government Regulation No. 71999 Protected, CITES and IUCN LC ver 3 2010, including : a. Raja Udang Meninting Alcedo meninting b. Burung Elang Ular Bido Spilornis cheela c. Cekakak Belukar Halycon smyrnensis d. Macan Akar Felis bengalensis e. Monyet Ekor Panjang Macaca fascicularis f. Lutung Kelabu Presbytis cristata g. Lutung simpai Presbytis malalophos h. Biawak Varanus salvator Bangko Estate Area Not socialized to workers and community to avoid hunting of endangered species - 4.1 Area or ecosystem that is critical as a water supply and flood control to the community - Belengo River Border - Mampun River 2.05 49.62 SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 63of 135 downstream. Border - Freshwater marshes 4.13 The company has had maps of estate showing the location of areas with high conservation value, including: Map of High Conservation Area of PT. Kresna Duta Agroindo Bangko Estate BNGE Division 4 and Map of High Conservation Area of PT. Kresna Duta Agroindo Bangko Estate BNGE Division 5. There is the Report of Management and Monitoring of High Conservation Area of PT. Kresna Duta Agroindo Unit Bangko Estate, August 2013, Biodiversity and Conservation Section by Environmental Department of Sustainability Division. Monitoring of HCVNKT is carried out every 2 weeks. Document used is Patrol Report Book recapitulated into Form of HCVNKT Monitoring, Document No. FSMARTLH00309 every 6 months. Furthermore, there are documents as follows:  Report of the Planting of Erosion Control Plant  Report of the Patrol of HCVNKT Area  Report of the Maintenance of Marker  Report of Water Level  Socialization Invitation  Report of HCVNKT Socialization Activity Recommendation for improvement has been mentioned in the HCVNKT Monitoring Form as a result of monitoring routinely implemented every 2 weeks, but preferably to determines Person in Charge PIC and the time limit for the completion of recommendation. At stage 2 the company has added PIC and Time Limit of Activity columns. It can be seen in the monitoring report dated 16-11-2013, it is recommended to increase erosion control plants in the river border area of Block F1 Division 5 BNGE with PIC is HCV Officer and Time Limit is continuously every month. Compliance Status: Compliance 5.3 Waste is reduced, recycled, re-used and disposed of in an environmentally and socially responsible manner SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 64of 135 The company has made the identification of sources of waste and pollution that are contained in the document of environmental aspect and impact identification list, September 2013. The source of waste is from mill site such as POME, Emission, domestic waste, used oil, and EFB, while from the estate is such as used chemical containers, emissions from vehicles, used lamps. B3 hazardous toxic waste management is regulated in the B3 Waste Management procedure No. SOPSPOSMARTLH-18, 1 July 2013. The procedure has specified the handling of B3 waste, B3 waste spillsdrops, emergency situation and reporting. The management of used pesticide containers have been regulated in Used Pesticide Container Washing WI IKBNGELLBH01, revision 1 dated 30 Jan 2013. The company has had B3 Waste Temporary Storage Permit i.e. Decree of the Regent of Merangin No. 15LH2010 regarding Extension of Hazardous and Toxic Waste Storage Permit to PT KDA Langling Mill unit dated 23 November 2010 which is valid for 3 years. Covered in the permit is used oil, used batteries, used fluorescence lamps, used oil filter, gloves and other B3 contaminated equipment. Reporting is done every 3 months to the KLH of Merangin Regency. The B3 Waste Transport and Collector company is CV Amindy Barokah with license from the State Minister of Environment No. 332011 regarding CV. Amindy Barokah B3 Waste Collection Permit dated 21 February 2011 which is valid for 5 years, the transportation permit to CV. Amindy Barokah with Vehicle plate no.: BK 8080 MO and License No.: 30973014DJPD2012 12018005. The recent B3 waste transportation was performed on 15 October 2013. The record of B3 waste transportation activities is the Manifest no.: 0002336 with BK 9552 MN, transport license of 120070432BB-0009. Measurement and analysis of liquid waste, emission air and ambient air have been conducted periodically. Monthly observation of waste quality is conducted with an external laboratory i.e. PT Unilab Perdana with sampling points at pond V the outlet to LA. Monthly observation of waste quality is conducted with an external laboratory of BLHD with sampling points at pond 4. The testing Parameters are BOD, COD, pH, oil-grease, Pb, Cu, Cd, Zn that refer to Decree of the Minister of Environment No. 282003. The result of test in January – October 2013 shows that BOD pH comply with the quality standards. Measurements of the boiler and genset air emission show that the result is below the quality standard of Decree of the Minister of Environment No.KEP-13MENLH32005. The result of ambient air measurement complies with Government Regulation No. 411999. SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 65of 135 Langling mill burns empty fruit bunches with furnaces. The total of ash produced from burning and those applied on the estate is available. There is a monthly report of empty fruit bunch ash, ash production and the ash released for application in the estate. There is the test result of emissions from the stacks of two furnaces by the UPTB Environmental Lab of BLH of South Sumatra Provincial Government and has had environment lab competence registration No. 0031LPJLABLIN-1LRKKLH. The result of measurement is still below the quality standard Decree of the Minister of Environment No. 131995. Direct application of empty fruit bunches to estate is found at Pelakar Estate site. This application is not found for Langling and Jelatang. Langling Mill already has a hazardous waste storage permit Merangin Regent Decree No. 14LH2010 District with a retention period of 90 days. Based on the existing balance of hazardous waste hazardous waste stored more than 90 days . At the prelimenary audit the Company has applied for an extension of the storage and the response has not been approved by the local government. The company has coordinated with district BLHD Merangin by sending a second letter and has gained a new license issued with a period of 180 days of storage permits consist of : 1. A letter from BLHD Bangko No.660264BLHD2013 dated 7 October 2013 as a response to Application for Hazardous Waste Storage Extension time from 90 Days to 180 Days. 2. Hazardous Waste Storage Permit based on Decree of the Regent of Merangin Regency No. 28LH2013 on Hazardous waste temporary storage permit of PT. KDA, Jelatang Village, Pemenang District. 3. Hazardous Waste Storage Permit based on Decree of the Regent of Merangin Regency No. 29LH2013 on Hazardous waste temporary storage permit of PT. KDA, Langling Village, Bangko District. Compliance Status: Compliance 5.4 Efficiency of energy use and use of renewable energy is maximized The use of renewable energy is such as the use of shell fiber as fuel for oil palm processing. SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 66of 135 The use of fiber and shell has been recorded on a daily basis and its efficiency has been analyzed. The use of diesel fuel for estate and mill operations has been recorded and its efficiency against the use of shell fiber has been calculated. Based on data during the audit, the use of diesel fuel had decreased. GHG Emissions Mitigation SOP for PT KDA – BNGESOP35 Data has been available from 2011 up to October 2013 on the use of shell and fiber equivalent to the value of diesel fuel. The outcome depends on the mill condition such as the productivity of machinery and production equipment affecting the efficiency of non-fossil fuel use. In 2011, 129,085 tons of FFB yielded 16,458 tons of fiber and 7,422 tons of shell, equivalent to 84,518 x 10 6 kcal energy or equivalent to 8,968 x 10 3 liters of diesel fuel. 2012, 137585; 17542; 7911; 90064x10 6 ; 9558 x10 3 2013 up to October 2013, 108833;13876;6258;71259x106;7561x103 Compliance Status: Compliance 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. The company does not burn waste and there is no replanting activity. The company has prohibited the use of fire for replanting. The company has also given a warning to employees and local people not to burn domestic garbage. Land fire is specifically regulated in land fire handling SOP of SOPNPSMARTXILH002. Fire point monitoring is performed biweekly. There have been maps of areas prone to fires and fire point inspection. There is a quarterly report to Manpower Office along with P2K3 report. It is recommended to carry out inspection of barrier trenches not irrigated with water throughout the year. At the prelimenary audit, it was found that emergency simulation drill in the field had not been implemented. Emergency simulation had been implemented including fire mitigation but land fire mitigation had not been performed yet. During the final audit, the company has been conducted fire mitigation simulation. Supporting evidence such as attendance list, photos, scenario and evaluation of land fire mitigation simulation. SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 67of 135 Compliance Status: Compliance 5.6 Plans to reduce pollution andemissions, including greenhouse gases, are developed, implemented, and monitored. The Organization has established Greenhouse Gas Emission calculation SOP PT KDA- BNGESOP-02, dated 1 August 2013 containing the identification, calculation and reduction efforts of greenhouse gas the company can undertake. There is Greenhouse Gas Emission Mitigation SOP, PT KDA-LNGMSOP22, with effective date: 02012012 covering Langling Mill. Identification of the sources of greenhouse emissions was carried out in September 2013. The report has identified potential sources for mills i.e. Changes in land use, Raw material processing into final product and Transportation of product, while for mills are the use of shells and fibers, the use of electricity, the use of diesel, the use of chemicals, transportation to bulking, and estate transportation for CPO. For the estate, sources identified are FFB transportation from Estates to Mills, fertilizer application, pesticide application, diesel fuel use for genset and POMEWWTP. Langling Mill‟s GHG emissions: 1178.47 kgCO2e per tons of CPO for CPO, mill and supply base‟s total emissions: 1780.76 kgCO2e per ton of CPO for CPO. Bangko Estate BNGE‟s GHG emissions: 573.61 kgCO2e per ton of CPO. Records of greenhouse gas emission reduction efforts are in the form of the report of shell and fiber use and the report of empty bunch use. The organization has a commitment to reduce Greenhouse Gas emissions in the next year period, but it needs to set the measurable targets, e.g. in the form of a percentage 1 of the previous year, etc.. The organization has maps of land clearing for plantation business data is in the estate best practice. Compliance Status: Compliance 6 RESPONSIBLE CONSIDERATION OF EMPLOYEES AND OF INDIVIDUALS AND COMMUNITIES AFFECTED BY GROWERS AND MILLS SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 68of 135

6.1 Aspects of estate and mill management 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 The company has performed Social Impact Assesment internally in 2012 covering Jelatang Mill, Langling Mill, Bangko Estate, Bangko Plasma, Bukit Bungkul KKPA and Pamenang Plasma. Environmental Impact Assesment has been performed more intensively through the ANDAL Environmental Impact Analysis report. The assesment carried out aims, among others, to 1. Identify and describe the social, economic and cultural characteristic of communities around the company; 2. Identify and analyze the positive and negative impacts of company existence on the community and 3. Recommend efforts to manage the negative impact of company existence. Based on the report, there are 18 villages from 5 districts identified. Based on the SIA report and meetings with stakeholders, information is obtained on the positive impacts of company existence. These positive impacts include: workforce absorption, community economic growth through the plasma program, construction of community access roads, CSR assistance worship, health, and education facilities, and partnership for FFB transportation. Based on SIA reports, information is obtained of the negative impacts of the company existence that include less than expected CSR Assistance, company‟s lack of socializing with surrounding comm unities, company‟s lower purchase price for community‟s FFB that leads to community selling to other Mills, complaint about dust generated by FFB and CPO trucks passing through the residential areas, smoke pollution from the Mill to the community settlements at Langling and Jelatang villages. The company has developed a program as of September 2013 to minimize and or eliminate such negative impacts by conducting regular coordination meetings and fostering with cooperatives, plasma managers and farmers. Complaints about dust are responded by means of circular letters to contractors, vendors No. 167RC-Jambi 1102013 dated 1 October 2013 concerning the provision of maximum speed of the trucks i.e. max. 25 kmhour, installation of speed limit signs, provide watering trucks and regular road watering, monitoring activities and visits to the community. During a meeting with the stakeholders it was confirmed that dust had reduced significantly with the restriction of motor vehicle speed and the regular road watering. The company has procured watering trucks with a capacity of 5 tons that perform watering from SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 69of 135 Langling to Bangko Estate i.e. at residential areas. Information on motor vehicle speed limit has been disseminated gradually to reduce the potential road dust and started from 15 October 2013. Compliance Status: Compliance 6.2 There are open and transparent methods for communication and consultation between growers andor mills, local communities and other affected or interested parties The company has had SOP for Information and Request Response SOPSPOSMARTLH-01. A list of information that can be accessed by relevant stakeholders has been available. Any request for information that is not listed in the list will require asking for Top management consideration and approval. A list of stakeholders has been available for each unit and consists of, among others, Customary leaders community leaders, Muspida and village chief, Company trade unions, Contractors and suppliers. As a holding company, SMART has SOP of Communication and Consultation SMARTXIVMCAR003 where any request for information will be responded no longer than 5 weeks 1 month. The company has established a list of stakeholders and documents that can be accessed by stakeholders based on their relevance. The company has appointed SPO officer responsible for providing communication and consultation with stakeholders. For Langling Mill, the officer responsible for communication with stakeholders is Bp. Agung ASkep Mill with the letter No. 03PCLNMGVII13. For Bangko Estate is Edi Sujono with the letter No. 01RCBNGEVII13. Compliance Status: Compliance 6.3 There is a mutually agreed and documented system for dealing with complaints and grievances, which is implemented and accepted by all parties The company has SOP of Grievance and Complaint Handling SOPNPSMARTXIIMCAR001. Any complaint coming from the company ‟s internals can be expressed through the suggestion box, representatives of trade unions or to the company and will be recorded in the Grievance and Complaint Book. So far, any reports from company ‟s internals have not been found. Complaints coming from external parties are recorded in the communication and consultation SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 70of 135 book. Based on records and meetings with stakeholders, information is obtained that there is no complaint that is not responded, and there is no compensation process in the last few years. The last compensation process performed by the company was in 1999. Compliance Status: Compliance 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 stake holders to express their views through their own representative institutions There is SOP of Land Conflict Settlement SOPSPOSMRTLH-04. The SOP states that deliberation is prioritized over legal action. Based on the company information there is no conflict with the community related to land ownership. The last compensation process carried out was in 1999. Sampling conducted at a meeting with local people in Pulau Tujuh Village provides information that there is no land conflict between the company and the local community. Compliance Status: Compliance 6.5 Pay and conditions for employees and for employees of contractors always meet at least legal or industry minimum standards and are sufficient to provide decent living wages Wages Decree of Governor No.626Kep.GubDISSONAKERTRANS2012 concerning Jambi UMP 2013 of Rp. 1.300.000,00 Rp 52.000 and BKS PPS no. 04BL-PPS2013 dated 01 January 2013 of Rp. 1.324.000 per month Rp. 52.960 day and excluding rice supply for permanent daily worker and monthly daily. Casual Workers Bangko Estate Wage of casual worker BHL PKWT Perjanjian Kerja Waktu Tertentu-Contracted Worker is regulated by Decree of SK CEO no. 017ceo 1HR PSM10113 concerning casual worker wages in 2013, the wage is Rp. 52.960 day. The organization has made a list of names for the casual worker in Bangko Estate. There are approximately 164 BHL as of 1 November 2013 who work in Bangko Estate for the job as spraying personnel, harvesting personnel, fruit picking. Worker data is updated every 3 months. SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 71of 135 The organization has registered the PKWT including BHL to the Social, Manpower and Transmigration Service of Merangin Regency with a proof of registration no. 560419 HISKSNKT2013 on September 25, 2013. Work agreement 01 BNGEPKHL 2013 dated 18 September 2013 with worker representatives rizal effendi who represents other workers and accompanied by the attachments list of 147 workers‟ signatures. The number of working time is maximum 20 days a month, 7 hours a day. There is an additional 17 people, it is planned to make the agreement for them on 26 November 2013. Based on the results of interview with BHL spraying personnel in Block B08 Division 5 20o6.27 S and 102o 21.043 E it is known that they have a BHL PKWT working relationship and paid to Rp. 52.960 per day conform to the UMR. The spraying personnel are working 6 days a week, starting work at 07: 00 to 14: 00, except Friday it is until 11: 30. Outsourcing workers There are workers who are not included in PKWT, but not doing chartering agreements with working service providers that have legal entity. This is not suitable with UU no. 13 2003 article 65. Those work doesnt include the work that can be outsourced according to Permenakertrans no. 192012 chapter III article 17 paragraph 3 and as described in attachment SE.04MENVIII2013 section III letter B point 2. However, article VI paragraph 3 in BKS 2012 regarding wholesale work states that the worker who work on his own less than 7 hours a day or settling for less than the daily volume set for him, will receive a portion of the daily wages, ie scaled time work in this case. Volume is resolved. Permanent daily worker Bangko Estate, and Jelatang Mill The wages are regulated in the Decree of SK CEO no. 018ceo 1HR PSM10113 concerning the permanent daily workers‟ wage in 2013, the wage is Rp. 1.324.000,00month. Based on the results of interviews with one of the harvester at Block B6 2º 6.05‟ S and 102º 2.17 E Sdr Hariyanto, paid Rp. 1.324 per month. The harvest base is 35 bunches and premium per bunch is Rp. 1.085 per bunch. The work days are 6 days, working hour starts at 07:00 – 14:00 except Friday until 11: 30, but according to his testimony in order to pursue a premium he sometimes can work on Friday until at 13:00. There are grading work in Langling Mill with agreement letter no. SPKLNGM0920130063 - SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 72of 135 September 2, 2013 between KDA and Dumuk Baharija. This job is not a job that could be outsourced as provided in Manpower Permenakertrans no. 192012 chapter III, article 17, paragraph 3 and as described in attachment SE.04MENVIII2013 section III letter B point 2. Bapak Haryanto has been working as a harvester for 8 years, have 2 children aged 9 and 3 years. According to the interview the children have never helped him with the harvest in the estate. The oldest child is in the elementary school grade 3 and the youngest child is left at the day care in the estate because his wife also harvests the fruit. Based on the results of interviews with other harvesters at block B-4 Division 5 it is known that this harvester works as a harvester with the working relationship of Daily SKU with wages of Rp. 1.324.000 a month. The harvest base is 35 bunches and the premium per bunch is Rp. 1.085 per bunch. He usually accomplishes this harvest base within 3 hours of work. The work day is 6 days, working hours start at 07:00 – 14:00 except on Sunday until 11: 30. The other wages are premium for pruning that is paid every 3 months at Rp 420 per tree. Monthly workers Bangko Estate The wage is regulated in the decree of SK CEO no. 019ceo 1HR PSM10113 concerning SKU monthly wages in 2013, the wage is Rp. 1.380.000,00month the lowest is G1 group and the highest is Rp. 2.196.000.200 for A8 group. Allowances beyond wages, are given in kind are housing facility, clean water, electricity subsidies, rice allocation, health facilities of estate clinic, school transportation. Sample of payment for rice allocation in November 2013. For men including the family consist of 15 kgmonth for this worker, 9 kgmonth for the wife, the child up to the third child is 7.5 kgmonth regulated in BKS PPS 2012. Daily contract workers Bangko Estate There are contract workers who do not belong to PKWT, the contract agreement is not made with the service provider having legal entity status and this does not comply with Law No. 132003 article 65. The job is not including jobs that can be outsourced as set forth in the Regulation of the Minister of Manpower and Transmigration No. 192012 chapter III article 17 paragraph 3 and as described in the attachment of SE. 04MENVIII2013 chapter III letter B point 2 Article VI of BKS PPS 2012 concerning work contract paragraph 3 states that a worker on his preferences working less than 7 hours in a day or finishing less than a daily volume specified for SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 73of 135 him will receive a portion of daily wage, according to the ratio of work time to completed contract. The company response is that work chartering allowed by PKB BKS-PPS which is followed by all the companies that are on Sumatra is a member of BKS-PPS and PKB BKS-PPS is an agreement and agreement between the company and SPSI then passed by Department of Labour. This means that all members of the company BKS-PPS follow PKB taht had been approved by the Government. In this case the company filed an objection with the auditors findings and requested that this be a record of legality that must be resolved between the commission certification with government executives and BKS-PPS. The evidence such as Chartering Worker provisions in accordance with BKS-PPS ALL PLANTATION COMPANY in SUMATRA is still valid until November 2014 This contract work agreement is regulated in work contract agreement No. 055BNGESPPP2013 between KDA and Astri Ayuningtyass and the name of the worker as contained in the attachment for the work of harvest and fruit collector or other jobs which payment is based on the quantity of work with a particular unit according to agreement. The contract value, for example, for fruit collector is based on VPA-1 No. 03VPA2013 which consists of group 0 the prime harvest of Rp. 370kg, Group VI less than 4 meters of 280kg and the group I-V of 260kg. In block B6 there is a woman with task of harvesting the fruit and being paid based on volume, i.e. Rp 260 per kg. In a day she collects about 20 buckets and the weight per bucket is about 6 kg. The salary is paid monthly. Working hours start at 07:00 – 14:00. Overtime Overtime calculations are contained in the decision of the Director General of Industrial Relations and Jamsostek no. 191PHIJSK-PKKADPKBXII2012 between BKS – PPS and PP.FSP, PP-SPSI. The first hour is 1.5 times, the next hour is 2 times an hour wage article x. Housing Facility Based on the results of interviews with other harvesters at block B-4 Division 5 it is known that this harvester has a wife with 2 children and he and his family are provided a house with 2 bedrooms, 1 bathroom and a well that is used together with the coupling home next door. The organization provides facilities for the workers in the form of housing. Based on the result of interviews with the spraying personnel whose husband works as a janitor in an Office, it is known SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 74of 135 that they get a house with two rooms. A visit to the housing facility was carried out at Division 5 to the house of Ibu Hartini. The house consists of 2 rooms. Clean water is available. Day care facility Bangko Estate is provided with a day care for the children whose mother works in the estate. During the audit visit there were 22 children taken care of by 3 sitters. The age of child who was left in the day care based on the result of interviews with the caregiver ranged from 11 months to 7 years. Usually the mother took her child back at around 15:00. Meals for children at the day care are not provided by the company but by their parents for breakfast or lunch including milk for children aged 11 months. The day care is divided into 3 rooms. One room is provided for children bedding. Children of different ages are placed in one room together and not separated by age of the child. The day care has not provided toys for children to play with. Contractors It was found that there is contractor control procedure SOPSMK3SMARTLH-26 but it only requires HSE aspect and not included ensuring compliance with labor and the use of a trained contractor. There is a list of contractors of the Bangko Estate and randomly found there are contract that did not include the requirement of compliance with applicable regulations in employment. The company has made the corrective action by published new of SOP : Controlled about Contractor. Evidance is Scan Copy Cover New Publised SOP. Controlled about Contractor No. SOPSMARTUMUMSADVI006 Compliance Status: Compliance 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 Bangko Estate : SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 75of 135 Freedom of association has existed through the Circular Letter from the Head Office to the entire management of PSM unit dated 15 November 2010 No. 218CEO1-SE112010. There is already a Bylaw No. 005KONGRESVKSPSIVIII2007 for the Confederation of All Indonesian Worker Unions KSPSI. All PT KDA refer to the bylaw of KSPSI for companies that have formed trade unions. The formation and appointment of the board of Bangko Estate Trade Union is determined through work unit deliberation carried out on 30 June 2010 and strengthened by Decree No. 55PD F.SPPP- SPSIJAMBIIV2011 that legalized the composition and personnel of the Union‟s Board. The company has had a trade union but during the preliminary audit the union‟s bylaw was found not available. There was no record found of meetings with the unions meeting minutes and data of expression of aspiration to the management. So far, complaints are expressed verbally to the union‟s board and any complaint to be conveyed formally will be done through a mechanis m in the company‟s existing SOP of grievance and complaint. During the audit certification, there was a record of a meeting between the unions and the company on 1 August 2013 related to a request for information about the provision of Idul Fitri Islamic day allowance to the workers of a Daily Laborer BHL status. The company had given a response by stating that it would give THR Tunjangan Hari Raya – Hari Raya Allowance in the form of basic necessities rice, sugar, cooking oil and biscuits. There was no record of the union‟s internal meetings. There have been meetings between the company and the SPSI dated 11 November 2013 to discuss the issue of overtime, fingerprint and other. List of the union‟s membership had been available and also with the evidence of cuts on the salary slips. Sampling conducted in the name of Bpk Suharyanto, there was Rp.2000 reduction in his salary slip for the union‟s September 2013 contribution Langling Mill Trade union at the Langling Mill was formed in accordance with the decision of work unit deliberation for the period 2012-2017. In the records of recent meeting dated 2 August 2013, the unions were questioning some issues, among others, Personal Protection Equipment supplies SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 76of 135 PPE of helmet, ear plugs, gloves and shoes. In addition the unions ensure that the distribution time of THR follows the government provisions i.e. 2 weeks before the Idul fitri. The company responded to this aspiration by ensuring that PPE supplies are available and can be asked for any time whenever they are damaged and the THR will be given 2 weeks before the Idul Fitri. Compliance Status: Compliance 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 programs. Children are not exposed to hazardous working conditions The company has had a policy regarding worker age requirements based on the Government Regulation No. 132003 and not to employ children under 18 years old as contained in the circular letter of 26 March 2013 from the SMD operation to all companies under the SMART group. Bapak Haryanto has been working as a harvester for 8 years, have 2 children aged 9 and 3 years. According to the interview the children have never helped him with the harvest in the estate. The oldest child is in the elementary school grade 3 and the youngest child is left at the day care in the estate because his wife also harvests the fruit. RSPO 6.7. The company has had SOP of Manpower Recruitment SDM A-004-00 but it has not specified worker minimum age requirements, only a maximum age requirement i.e. 45 years old. The company has made Circular Letter to all the Unit Heads No. 002SE-HRDV0309 establishing requirements for manpower recruitment with the minimum age of 18 years old. It is advisable to include employment minimum age in the SOP that follows the requirements i.e. over 18 years old. During the preliminary audit, sampling carried out on the list of BHL workers in Bangko Estate, there was still a worker when recruited aged less than 18 years old. The data was in the name of Agus in the maintenance section and was born 08.08.1995 and employed on 04.01.2013 so that his age when employed was 17 years 7 months, thereby a minor finding was issued. During the certification audit, the company showed that there was an error in entering data on the database where the copy of the worker‟s identity card showed that he was born in 1985, so the worker‟s age was 27 years 7 months. Compliance Status: Compliance SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 77of 135

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 The company provides equal opportunities to everyone to be employed in the company. On the document: 1 HRD policy No. A-001-00, effective on 192005 issued by the Managing Director Strategic, item 2, it is stated that the organization in principle employs individuals who are competent according to the requirements for their position without discriminating based on ethnic, race, and religion. 2 Employment Policy: Conditions of Recruitment and Selection Outside Jakarta no. SDM A-006-00, dated 192005, regulates that the employment recruitment does not specify certain ethnic, gender, or religious requirements. The point is to meet the requirements for the position and aged at least 18 years old. Compliance Status: Compliance 6.9 A policy to prevent sexual harassment and other forms of violence against women and to protect the reproductive rights is developed and applied The company has had policies related to sexual harassment by creating a Committee on Gender. Socialization has been conducted in several places but based on sampling in the preliminary audit the workers have not received the socialization. This was found in the district 4 block b1-c1 on harvesters and fruitlet collectors and district 5 Block 6 – the fruitlet collectors. This has been corrected by carrying out re-socialization to the workers in all divisions in September and October 2013. During the certification audit, there are still harvesters and fruitlet collectors in the District 4 block B4 found not understand correctly the meaning of sexual harassment. Based on the results of interviews with BHL spraying personnel in Block B3 Division 5 2º 6.27 S and 102º21.043 E they appear to have known about sexual harassment, sexual harassment definition and know how to report if sexual harassment occurs. They know Ny Mary as Chairman of Commission on Gender. The company has had policies related to sexual harassment by creating a Committee on Gender. Socialization has been conducted in several places but based on sampling it is found in the district 4 block b1-c1 on harvesters and fruit collectors and district 5 Block 6 – the fruit collectors, the workers have not received the socialization but the socialization has been carried SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 78of 135 out on 4 October 2013. The company has followed up by conducted re-Socialization Sexual Harassment to all workers. The evidence such as documentation socialization Sexual Harassment Compliance Status : Compliance 6.10 Growers and mills deal fairly and transparently with smallholders and other local businesses. The company currently makes cooperation with cooperatives and or farmer groups. There are 5 cooperatives and 16 farmer groups who cooperate with the company. During the preliminary audit, an SPK was found not conform to the implementation in the field. The SPK states that the cooperation pattern is „full management while in reality it is just cooperation for FFB purchases. Likewise any guidancecriteria on fruit maturity by means of indicatormedium understood by all parties are not yet available. The company has revised the SPK with 5 KUD and 16 Farmer Group that ensures a cooperation pattern of FFB purchases. The method of penalty has been set and in compliance with the Government provisions. The criteria of fruit maturity has been made in the form of pictures and socialized to the KUD and local farmer groups. Sampling of SPK with KUD i.e. NO BNGPPLASMA0613001 between H. Edy Sujono and H. Damanik and the SPK is valid from 01 June 2013 to 31 May 2013. During a meeting with the cooperative and the plasma members, it was confirmed that the method of payment had been agreed i.e. a cash and carry in accordance with the SPK. Transparency in the price of FFB and the method of FFB sorting and the penalty understood and agreed upon by both parties had been applicable. Compliance Status: Compliance 6.11 Growers and millers contribute to local sustainable development wherever appropriate The company has had an annual CSR program and a five-year program categorized as a 5 year strategic plan. There are 3 sources in the planning of CSR program i.e. 1. programs from the head office, 2. based on the SIA identification and 3. community proposal. The CSR program developed for a year has included Langling Mill and Bangko Estate. SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 79of 135 During the preliminary audit it was found that CSR program 2013 consisted of 6 programs but some of the programs were not realized, among others, the installation of conblok in the SD 299, the construction of SD AL-Husnah in Mampun Village. The method of evaluation for the planned program is not found. During the certification audit, the company had developed the evaluation methods for the realized program. There were still programs not yet realized due to the budget proposals and the replacement of CSR programs related to adjustment in budget. This leads to uncertainty about the previously developed CSR plan. The company should ensure the planned CSR programs, starting from identification, planning, and budgeting and ensure the realization of the plan and its periodic evaluation. The company has the 5 year CSR Annual Strategic Plan for PT KDA and has been revealed to be an annual program. For the implementation of CSR programs in proses.because there are several CSR activities not all be realized in the year 2013, so that should carry over to 2014 or there are other activities that are converted to more mainstream. The company has made the improvement by making CSR Semester Evaluation Program yearly. Compliance Status: Compliance 7 RESPONSIBLE DEVELOPMENT OF NEW PLANTINGS 7.1 A comprehensive and participatory independent social and environmental impact assessment is undertaken prior to establing new plantings or operations, or expanding existing ones, and the results incorporated into planning, management, and operations Not Applicable 8 COMMITMENT TO CONTINUOUS IMPROVEMENT IN KEY AREAS OF ACTIVITY 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 The company has conducted Internal Audit Mill Audit Advisory and Agronomy Audit Advisory per semester. The internal audit has discussed issues related to best practices as well as determination of the standard specified by the company. SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 80of 135 The company has established innovation program to ensure there is a program that shows any improvement. For example the reduction in the use of CACO3 in the mill, efficiency in the use of diesel fuel to shell and water use efficiency, In an effort to perform monitoring and review the operational activities of mill and estate and an effort to do the improvement, the company has internal audit activities carried out per semester. Internal Audit refers to the RSPO Internal Audits Procedure No: SOPSPOSMARTLH-16, revision 01, issued on 1 July 2010. The Internal Audit Team: Agus Gunawan Lead Auditor, Adhi Wiratmoko, Firmansyah, Hanita, Vira Permata Sari. The appointment of the team was by Regional Controller on 15 June 2013 through the letter No.: 066RC-JAMBI1062013. The Lead auditor attended auditor training on 19 – 20 November 2012. Audit was carried out on 24 – 28 June 2013. Records of audit implementation such as audit schedule and checklist are available. Internal audit results are 8 nonconformities for Bangko Estate; and all nonconformities have been followed up. In addition to the above two activities, another audit such as Mill Audit Advisory is conducted. Langling Mill Division conducted audit on 02 – 06 February 2013 for the quality of waste management and it is advisable to maintain its condition. Agronomic Audit Advisory for Estate Bangko was on 25 January 2013 Period 1 2013, increasing the control, officers should control the field application of POME and to seal the leaked bed; the compost application should be accurate in dosage. The company has a commitment through a memorandum No.: SW-0228VPA-112009 from the VPA-PSM1 on 5 January 2013 to reduce paraquat and other restricted herbicides and must decrease each year. Compliance Status: Compliance SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 81of 135 SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 82of 135 D.2. Statement by the Certifier Body on Behalf of PT. Sucofindo SBU-SICS We, the undersigned declare that the information and conclusions included in this report have been prepared in accordance with rule and standard of RSPO, PC, and that the certification decision has been based upon this information. Verified and Reviewed by: Name Warsid Sumarlin Position SLA LA Auditor Signature Date Approval: Name Triyan Aidilfitri Position Department Head of Management System Certification Signature Date SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 83of 135 List of Abbreviation BNGE Bangko Estate CPO Crude Palm Oil CSR Corporate Social Responsibility DOE Department of Environment EFB Empty Fruit Bunch EIA Environment Impact Assessment FFB Fresh Fruit Bunch FSMS Food Safety Management System GMP Good Manufacturing Practice GPS Global Positioning System HACCP Hazard Analysis and Critical Control Point HCV High Conservation Value HCVF High Conservation ValueForest HGU Hak Guna Usaha IEMA Institute of Environmental Management and Assessment IPM Integrated Pest Management IRCA International Register of Certified Auditor JLTM Jelatang Mill KDA Kresna Duta Agroindo KKPA Kredit Kepada Koperasi Primer LNGM Langling Mill MOU Memorandum of Understanding MSDS Material Safety Data Sheet SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 84of 135 NA Not Applicable NC Non Conformity NCR Non Conformity Register OSH Occupational Safety and Health OSHAS Occupational Safety and Health Assessment Scheme PC Principle and Criteria PK Palm Kernel PKO Palm Kernel Oil POM Palm Oil Mill POME Palm Oil Mill Effluent PPE Personal Protective Equipment RSPO Roundtable on Sustainable Palm Oil RSPO NI Roundtable on Sustainable Palm Oil National Interpretation SA8000 Social Accountability 8000 SIA Social Impact Assessment SIO Surat Izin Operator SOP Standard Operating Procedure UKL Upaya Pengelolaan Lingkungan UPL Upaya Pemantauan Lingkungan WWTP Waste Water Treatment Plant WHO World Health Organization SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 85of 135 APPENDIX-1 MAP SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 86of 135 SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 87of 135 SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 88of 135 SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 89of 135 SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 90of 135 APPENDIX- 2 NCR SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 91of 135 SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Please send your responses to this Non Conformities + obs also in softcopy Non Conformity Observation Report Organization No. Audit No. Standard. Audit Date : 04-10-2013 TSS, GGU, GIA, NS, RSPO 00007 1 1 RSPO Preliminary ATL Auditor : ……………………………………….signature Organization Rep. : ……………………………………….signature No. Category Clause Std Audit or Description Root Cause Investigation Corrective Action Evidence Audit Team Review 1 2 3 4 5 6 7 8 9 1 Observasi 1.1 1 TSS The company should ensure that all letters concerning requests and their corresponding responses are registered in a register book and ensure that the response is provided within the time There were letters in the request and response book not yet responded. Corrective Action: All letters have been ensured to have been responded and within the time set in the SOP. Evidence : All letters in the request and response book have Closed SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 92of 135 as set in the relevant SOP. All incoming and outgoing letters should be retained and the retention time be defined according to requirement. been responded. 2 Observasi 2.1 1 TSS The company should ensure the compliance with the Ministry of Manpower regulations related to working hours 40 hoursweek and overtime max. 14 hoursweek. There was security personnel with overtime longer than 3 hoursday. Corrective Action: There has been a permit for deviation from the Working Hours of Merangin Regency. Evidence: Document of permit to deviate from Working Hours. Recapitula tion of workers‟ overtime data. Closed 3 Major 2.2 1 TSS The company did not have HGU for Division 4 estate in the Bangko Estate with a total area of 218 HA. Until then The Bangko Estate Division 4 with a total land area of 218 Ha has a HGB. However, the HGU is under Corrective Action: Documentation that the processing of HGU has been in the Committee B Open SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 93of 135 the company had submitted the application for HGU of 109.73 Ha and 87.35 Ha. The latest data available was cadastral measurement maps. process by Committee B. Evidence : The HGU processing documents are available. 4 Observasi 2.2 1 GGU The BPNKDA XXV marker at coordinates 206027.05 E and 9769049.28 N UTM had moved. The company should make the minutes of changes in the BPNKDA XXV marker position to prevent possible conflicts. There was a BPN marker that was not at the coordinate point as it should be. Corrective Action: Minutes of changes in a marker position from its proper place. Evidence: Minutes of Changes in Marker Position. Closed 5 Observasi 2.2 1 GGU The BPNKDA 08 marker with the coordinate of 205177.012 E and 9766939.095 N had not correctly positioned, There was a BPN marker not at the correct coordinates. Corrective Action: The relocation of Marker has been done. The minutes of marker position that is not in the correct position have been Closed SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 94of 135 because there was also the BPN old peg. The BPNKDA 08 marker should be placed at the position determined by BPN. made. Evidence: Minutes of Marker Relocation. 6 Observasi 2.2 1 GGU The company had the record of Bangko Estate BNGE Boundary Marker Maintenance 2013 with the criteria: a. Run the checklist, b. Marker Repair c. Painting, d. Marker Site clearing. The company should add Marker Coordinate Monitoring to the criteria to prevent changes in the marker‟s position. Form of marker maintenance has been available but the form needs to include the marker‟s coordinates. Corrective Action: The form of marker maintenance has been added with an item concerning the marker‟s coordinates. Evidence: The new form of Marker Maintenance has been added with Marker Coordinate Monitoring criteria to prevent changes in marker position. Closed 7 Observasi 4.6 1 GIA GGU At the time of site visit and interviews with spraying personnel it was found that Ditches are not a water body. Ditches are not a water body. Closed SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 95of 135 Agrochemical spraying was applied on the oil palm trees located adjacent to the ditch. This indicates water body‟s pollution. The company should ensure that ditches within the estate area are not directly drained to the River regardless small dosage in use. 8 Minor 4.6 1 GIA The company had not implemented special health examination on the spraying personnel for 2013 and not yet conducted according to Regulation of the Minister of Manpower No.31996 that requires the examination to be conducted once every 6 months. Annual general check- up has been conducted but special health examination was not conducted in 2012. Corrective Action: Special health examination was carried out in 2013, In 2014 regular check-up will be programmed twice a year. Evidence : Results of Audiometry, Spirometry, Cholinesterase in October 2013. Closed SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 96of 135 9 Observasi 4.6 1 GIA Health examination of female spraying workers in order to ensure they are not pregnant should be carried out monthly. Pregnancy tests for female spraying workers had not been implemented. Corrective Action: 1. Pregnancy examination has been conducted using Test Pack 2. Develop pregnancy examination program for female spraying workers. Evidence: 1. Pregnancy test results 2. Pregnancy Test Certificate for Workers involved in Herbicide use. Closed 10 Observasi 4.7 1 NS There was one vial of anti snake venom used and expired in August 2013 not yet disposed. The opened vial was not disposed into medical waste bin. Corrective Action: Expired vials of anti snake venom have been removed from the clinic‟s stock and disposed into the clinic‟s medical waste bin and submitted to the medical waste disposal facility of Bangko Regional Hospital Evidence : Closed SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 97of 135 1.Minutes of expired anti snake venom vial disposal, 2.Document of medical waste delivery to the Bangko Regional Hospital 11 Observasi 4.7 1 NS The revision of harvesting SOP or creating longer stickpoles needs to be considered, because from field observations at B6 Block 2o 6.05‟ S and 102o 2.17 E the harvesters were cutting the frond at upright position and the frond was drop less than half a meter from the harvesters. When harvesting the harvesters were not extending the stickpole to its full length. Corrective Action: Socializationtraining has been conducted in good harvesting practices, and working equipment has been ensured to function properly. Evidence: Photos and attendee list of good harvesting practice socialization. Closed 12 Minor 4.7 1 NS The personnel who do the mixing in the Division 5‟s chemical warehouse had not When mixing Herbicide the personnel were wearing cloth masks. Corrective Action: The masks used during mixing of chemical have been replaced with Closed SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 98of 135 been equipped with chemical cartridge masks. inorganic chemical cartridge masks. Evidence: Cartridge acceptance photos and minutes. 13 Minor 4.7 1 NS The organization was not consistently implementing regular and special health examination every year, such as audiometry and spirometry were conducted on 22 February 2013, but in 2012 they had not been carried out, and in 2013 was still in process. General check-up is performed annually but special health examination was not performed in 2012. Corrective Action: For 2013 special health examination has been conducted. For 2014 a regular examination will be programmed twice a year. Evidence: The results of Audiometry, Spirometry, Cholinesterase examination in October 2013. Closed 14 Observasi 4.7 1 NS Fire mitigation personnel at Langling Mill did not comply with the annex III of Decree of the Minister of Manpower no. It had been listed in the training program but the vendor to provide the training had not been obtained. Corrective Action: The fire warden training complies with Decree of the Minister of Manpower No.1861999 and has been included in the training Closed SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 99of 135 186MEN1999. program. Evidence: Training program at LNGM 15 Minor 4.7 1 NS The boiler 1‟s combustion chamber pressure gauge was at 1.2 inch water. The Pressure gauge rubber hose was clogged. Corrective Action: The clogged Pressure gauge‟s rubber hose was cleaned. Evidence: 1. Photos of Pressure Gauge hose being cleaned 2. Checking for the Pressure Gauge proper function during test trip once every week. Closed 16 Major 4.8.3 1 TSS The company had a SOP for selecting trained contractors. However, from sampling there was no evidence found that trained contractor selection had been done. The related SOP is foumd not completed. Corrective Action: Revise the SOP and add the requirement for trained contractors and ensure the selected trained contractor to be used the company. Closed SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 100of 135 17 Minor 5.1 1 GIA Langling Mill had in place the UKLUPL with approval No.731BA.5IX1996 year 1996. However, the core land area had changed and the UKLUPL document was not revised yet. Langling and Jelatang Mills have 2 Environmental documents i.e. UKLUPL and AMDAL and there is a letter from the Ministry of Environment concerning the Langling and Jelatang Mills‟ environmental documents that the company is to use the existing UKLUPL until further decision from the Ministry. Corrective Action: Develop a chronology of correspondence between PT. KDA and the Ministry of Environment. Evidence: 1. Document on the chronology of correspondence between PT. KDA and the Ministry of Environment. 2. Hard Copy of the Document of correspondence between PT. KDA and the Ministry of Environment in 2011-2013. Open 18 Observasi 5.2 1 GGU NKTHCV socialization was delivered to spraying workers and security personnel only and such socialization was not received by Socialization was not made to all PT. KDA‟s workers and the surrounding community. Corrective Action: 1. Intensify socialization to all workers that represent the estate, mill and support workers. Closed SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 101of 135 other workers. The company should conduct socialization to all PT. KDA‟s workers and the surrounding community. 2. Conduct socialization or public consultation by inviting village leaders and District Leader Forum Muspika Evidence: HCV socialization photos, attendance list, materials. 19 Observasi 5.2 1 GGU The company had the record of NKTHCV markers. However, the position of B1131 marker was in the position of B1133 marker and vice versa. This should be promptly corrected according to the internal document of NKTHCV BNGE marker‟s coordinates. Exchanges in the position of HCV markers have occurred. Corrective Action: To check that the position of HCV markers are matching with their corresponding coordinates. Evidence: Photos and Minutes. Closed 20 Observasi 5.2 1 GGU The HCVNKT Monitoring Form has incorporated The monitoring form does not have PIC and deadline columns. Corrective Action: Add the HCV monitoring report of 2012 and 2013 Closed SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 102of 135 improvement recommendation as well as recommendation as a result of routine monitoring every 2 weeks. However, the Person in Charge PIC and the deadline for completion of the recommendation should be determined. period with PIC and deadline for completion . Evidence : The revised monitoring form which includes PIC and Deadline columns. 21 Minor 5.3 1 GIA Langling Mill already had a hazardous waste storage permit Decree of the Regent of Merangin Regency No. 14LH2010 with 90 days storage period. Based on hazardous waste balance there was hazardous waste stored more than 90 days. The application for storage extension As the stored hazardous waste quantity was small, storage extension was applied to the BLHD of Merangin Regency. However, until that time no response had been received to the application from the BLHD of Merangin Regency. Corrective Action: 1. It has been coordinated with the Merangin Regency BLHD by sending the second letter. The transport of the Semester 2 had been done. 2. New permit has been issued with 180 days storage period. Evidence: 1. A letter from BLHD Closed SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 103of 135 had not yet been responded and approved by the local Government. Bangko No.660264BLHD2013 dated 7 October 2013 as a response to Application for Hazardous Waste Storage Extension time from 90 Days to 180 Days. 2. Hazardous Waste Storage Permit based on Decree of the Regent of Merangin Regency No. 28LH2013 on Hazardous waste temporary storage permit of PT. KDA, Jelatang Village, Pemenang District. 3. 2. Hazardous Waste Storage Permit based on Decree of the Regent of Merangin Regency No. 29LH2013 on Hazardous waste temporary storage permit of PT. KDA, SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 104of 135 Langling Village, Bangko District. 22 Minor 5.5 1 NS Emergency simulation drill in the field had not been implemented. Emergency simulation had been implemented including fire mitigation but land fire mitigation had not been performed. Corrective Action: Land fire mitigation simulation has been implemented. Evidence: Attendance list, photos, scenario and evaluation of land fire mitigation simulation. Closed SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 105of 135 23 Observasi 6.2 1 TSS The company has developed the list of stakeholders and documents accessible to relevant stakeholders. The list should be ensured to include the list of information that can be accessed by the surrounding community according to its relevance. Not all of the information in the list of information for stakeholders can be accessed by stakeholders. Corrective Action: The list of information for stakeholders has been revised as to the information accessible to stakeholders. However, information on financial transaction cannot be included in this list of information for stakeholders. Evidence : Closed SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 106of 135 24 Minor 6.5 1 TSS The company had SPKs with contractors. However, from sampling it was found there were some SPKs without contractor requirements to comply with applicable manpower regulations. Plasma FFB transportation SPK did not require contractors to comply with applicable manpower regulations. Corrective Action: An article has been incorporated into the SPK that requires contractors to comply with applicable manpower regulations. Evidence: Plasma SPK has contained an article that requires contractors to comply with applicable manpower regulations. Documentation of Plasma SPK socialization. Closed 25 Minor 6.6 1 TSS The company had a trade union. However, the trade union‟s bylaw was not found. Records of meetings with the trade union were not found minutes of meeting and data of conveying aspirations to Bylaw and minutes of meeting were not available The trade union‟s bylaw has been documented in the company documentation and the minutes of meeting with the union have been documented as well. Closed SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 107of 135 the management. 26 Minor 6.9 1 TSS The company had a policy related to sexual harassment by creating a Gender Committee. Socialization had taken place in several locations. However, from sampling it was found that the workers in the District 4 Block b1-c1 – harvester and fruit collector and the District 5 Block 6 – fruit collector had not received such socialization. Socialization on sexual harassment had not been carried out. Corrective Action: Socialization on sexual harassment has been carried out. Evidence. Sexual harassment socialization attendance list, photos, activities, and materials. Closed SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 108of 135 27 Minor 6.9 1 TSS The company had a policy on worker‟s age requirements in accordance with Government Regulation no. 132003 not to employ children under 18 years old as contained in the Circular dated 26 March 2013 from the SMD operation to all companies under SMART group. From sampling of BHL workers it was found that there were workers under 18 years old when recruited. Data was in the name of Agus in the maintenance section with date of birth 08.08.1995 and employed on Data entry personnel had made some mistakes when inputting data in the name of Agus. Corrective Action: It has been checked that it was an administrative error because after rechecking it was found the worker had been above 18 years old when employed. It has been ensured that administrative data entry has been correct. Evidence: After the Payroll personnel has completed worker‟s data entry the KTU will verify the data. Closed SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 109of 135 04.01.2013 so that his age when employed was 17 years 7 months old. 28 Minor 6.10 1 TSS The company had cooperated with 5 KUDs and 16 Farmer groups. However, the company did not have SPK that ensures agreed cooperation scheme on FFB delivery to the Mill. The Sop methods of sorting and penalty and its implementation did not ensure compliance with the government provisions. There was no SPK that ensures agreed cooperation scheme on FFB delivery to the Mill. Corrective Action: SPK has been established with KUDFarmer Groups concerning the cooperation scheme on FFB delivery to the Mill. Evidence: SPK between Mill and KUD on FFB delivery cooperation scheme. Closed SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 110of 135 29 Observasi 6.10 1 TSS The company should develop indicatorcriteria on the ripeness of oil palm fruit using a system understandable to all parties. For instance by creating images of whole FFB for unripe and over ripe fruits. There was fruit acceptance criteria but not documented in the form of fruit ripeness criteria. Corrective Action: The criteria of ripe fruits has been produced and displayed at strategic locations to enable FFB driversupplier to understand better. Evidence: Notice on fruit ripeness criteria. Closed 30 Minor 6.11 The company had conducted SIA of December 2011 – March 2012 period. From this report negative impacts are identified such as the cooperative roles that are not maximum, complaint about dust from transportation activities, mill‟s smoke that pollutes the The company does not have a time plan of social impact management and monitoring. Corrective Action: Social impact management and monitoring plan has been developed. Evidence: There are RKS RPS documents. Closed SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 111of 135 surrounding villages. The company does not have a time plan of social impact management and monitoring with community participation to be carried out regularly. 31 Minor 6.11 1 TSS CSR Program 2013 consists of 6 programs. However, some programs are not realized including conblock paving in the SD 299, the construction of SD AL- Husnah, Mampun Baru Village, cleft-lip, hernia and cataract surgery. No evaluation of the planned programs was found. The CSR program implementation has not been monitored and evaluated. Corrective Action: The existing CSR program has been monitored and evaluated. Evidence: There is the CSR program monitoring and evaluation. Closed SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 112of 135 32 Observasi 8.1 1 GIA The management review should not only address the result of internal audit but also address the agenda required in the standard such as social impacts, pollution and emission, waste reduction, environmental impacts and reduction of certain chemicals. The management review did not address the internal audit results; instead it addressed the agenda required in the standard such as social impacts, pollution and emission, waste reduction, environmental impacts and reduction of certain chemicals. Corrective Action: The Management Review will address social impacts, pollution and emission, waste reduction, environmental impacts and reduction of certain chemicals. Evidence: Discussion on social impacts, pollution and emission, waste reduction, environmental impacts and reduction of certain chemicals in the Management Review. Closed SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 113of 135 SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Please send your responses to this Non Conformities + obs also in softcopy Non Conformity Observation Report Organization No. Audit No. Standard. Audit Date : 04-10-2013 TSS, RQ, GGU, NS RSPO 00007 2 1 RSPO Certification Audit ATL Auditor : ……………………………………….signature Organization Rep. : ……………………………………….signature No. Category Clause Std Audit or Description Root Cause Investigation Corrective Action Evidence Audit Team Review 1 2 3 4 5 6 7 8 9 SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 114of 135 1 Major 2.1 1 TSS Based on information from the Langling Mill Union Leader and overtime report in November 2013, still found the employee who work over the time limits specified by Depnaker max 14 hours a week. Sampling is done on employees in the lab and the Boiler at Langling Mill The company has issued Circular Letter by Director of Human Resources No. 004HR Ops2014 stated that the overtime system should be met with the government regulation. The overtime job should also agreed of both parties The evidence of implementation of the letter will be sought on the next surveillance audit. See appendix 4.2 Minor See the evidence of implementatio n on the next surveillance 2 Major 2.2 1 TSS The companies don‟thas the HGU yet for estate in division IV Bangko Estate area of 218 hectares. So far the company has applied for the concession area of 109.73 ha and 87.35 ha. The latest data that available is an invitation Division 4 Bangko Estate area of 218 hectares has HGB are currently in process into the legaldecree HGU by BPN. Corective Action: The company already have Legal decree HGU from BPNJambiissued on 20January2014, witha totalarea of 218.08hectares. Closed SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 115of 135 from Jambi BPN no. 1081.5-300.9X2013 which invite the company to attend a meeting with B committee on October 30, 2013. Evidences: 1. HGU No. 01HGUBPN.152014 dated January 20, 2014 is located in Karang Berahi Village, Pamenang, Merangin District, Jambi Provincewithareadetails : - NIB 06.04.00.00.00014 total area 92,89 hectares - NIB 06.04.00.00.00016 total area 33,07 hectares Located in the Jelatang village, Pamenang, Kab. Merangin District, Jambi Provincewithareadetails : - NIB 06.04.00.00.0001 total area 81,56 SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 116of 135 hectares 2. HGU No. 02HGUBPN.152014dat edJanuary 20, 2014is locatedinKarang Berahi and Jelatang Village, Pamenang, Merangin District, Jambi Provincewithareadetails : - NIB 06.04.00.00.00020 total area 4,76 hectares - NIB 06.04.00.00.00021 total area 5,80 hectares Total HG U‟s are 218, 08 hectares Valid 35 years. See Appendix 4.1 SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 117of 135 3 Major 4.2.3 - 4 RSPO Certif Sys 5.3.16 RSPO SCC System RSPO SCC Std E 3.3 1 TSS 2. The raw material for POM PT. Kresna Duta Agroindo KDA – Langling Mill is supplied from the FFB which are two 2 Own estates, five 5 smallholders and 2 two from associated smallholders. The application of Certification audit was Langling Mill and Bangko Estate as a supply base. During the preliminary audit, it was informed that the supply base from main estate is only Bangko estate. At the time of 1. At the previous Smart timebound plan, it was found that Batang Gading Estate as a supply base to others named Sungai Bengkal Mill 1. Revised timebound PT SMART, Batang Gading Estate to be included as a supply base for Langling Mill Evidence : Revised timebound PT SMART Observation SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 118of 135 certification audit, it was found that Langling estate also receives continually from other own estate named Batang Gading estate. The Batang gading estate supplies about 84,48 meanwhile Bangko estate supplies for 15,52. The Batang gading estate belongs to PT SKU time bound plan which will be certified by other certification body. Refers to the RSPO SCC system and RSPO Certification system, the Batang gading estate SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 119of 135 should be within the scope of KDA- Langling mill certification. Team audit decide to issue the Major non-conformace. 3. In identification and traceability procedure SOP LNGM SIK, Mass Balance included in the calculation of monthly, quarterly and yearly. At the time of the audit, the company doesnt have quarterly report to the recording and balance of certified FFB and CPO. 4. In identification and traceability SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 120of 135 procedure SOP LNGM SIK, stated that the procuct at dispatch letter will be markedstamp with “Mass Balance Segregasi‟, In fact, the status of product is Mass balance only. 2. Mass balance calculation report is issued per monthly and yearly bases 3. Related SOP is made generally to be 2. Revised the report per tri- monthly and yearly bases. Evidence : Mass balance report per – three monthly bases 3. Revised related SOP and apply the Mass Balance Model for SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 121of 135 applicable to all suply chain. The application of the system will be adjusted specifically per location refers to the standard of SCCS Langling Mill Evidence: SOP Supply Chain Product Model Mass Balance No. PT.KDA-LNGMSOP26 revised dated 01032014 4 Major 5.1 1 RQ The company has UKL UPL document of Langling Mill and Jelatang Mill and has undergone extensive changes in croplands. The company is in the process of changing those document and didnt finish yet because of the authority problem between the local and the central government to provide the final solution. LNGM and JLTM have 2 environmental documents that UKL UPL and EIA, where there is a letter from the Ministry of Environment of the Environmental Document owned Langling Mill and Jelatang Mill, the contents of which the Company temporarily re-use the UKL UPL to the Ministry Decides subsequent decision. Corective Action: -Conduct appropriate follow-up letter No. KLH. B8884DEP. ILHPDAL082013 with certainty petition for determination of document Evidance: -Available Letter No. KLH. B8884 DEP.I LH PDALs 082013 Clarification regarding the environmental document PT. KDA await further Closed SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 122of 135 policy of the Ministry of Environment. -Company Sent letter to KLH on rule-setting documents that must be made and arranged for a company that has been in operation but have not had the environmental document. 5 Minor 6.5 1 NS There are grading work in Langling Mill with agreement letter no. SPKLNGM09201300 63 - September 2, 2013 between KDA and Dumuk Baharija. This job is not a job that could be outsourced as provided in Manpower Permenakertrans no. 192012 chapter III, article 17, paragraph 3 and as described in Job FFB Sorting is daily routine work as work support FFB processing at Palm Oil Mill Corrective Action: All employees grading will be change the status of the agreement letter to PKWTPerjanjian Kerja waktu Tertentu per January 1, 2014 Evidance: Memorandum Mill LNGM Head Unit as at December 13, 2013 on changes in employment status Grading of Outsourcing became Closed SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 123of 135 attachment SE.04MENVIII2013 section III letter B point 2. PKWTPerjanjian Kerja waktu Tertentu 6 Minor 6.5 1 NS There are workers who are not included in PKWT, but not doing chartering agreements with working service providers that have legal entity. This is not suitable with UU no. 13 2003 article 65. Those work doesnt include the work that can be outsourced according to Permenakertrans no. 192012 chapter III article 17 paragraph 3 and as described in attachment SE.04MENVIII2013 section III letter B point 2. However, article VI Work chartering allowed by PKB BKS- PPS which is followed by all the companies that are on Sumatra is a member of BKS-PPS and PKB BKS-PPS is an agreement and agreement between the company and SPSI then passed by Department of Labour. This means that all members of the company BKS-PPS follow PKB taht had been approved by the Government. In this case the company filed an objection with the Corrective Action: Chartering Worker provisions in accordance with BKS-PPS ALL PLANTATION COMPANY in SUMATRA is still valid until November 2014 Evidance: 1.Documen BKS-PPS Closed SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 124of 135 paragraph 3 in BKS 2012 regarding wholesale work states that the worker who work on his own less than 7 hours a day or settling for less than the daily volume set for him, will receive a portion of the daily wages, ie scaled time work in this case. Volume is resolved auditors findings and requested that this be a record of legality that must be resolved between the commission certification with government executives and BKS- PPS. 7 Minor 6.5 1 TSS There is a list of contractors of the Bangko Estate and randomly found there are contract that did not include the requirement of compliance with applicable regulations in employment There is contractor control procedure Because this SOP. Only controlled about Contractor regarding Health And Safety Implemetation and not yet update for employment Corrective Action: will be Publised New Of SOP. Controlled about Contractor Evidance Scan Copy Cover New Publised SOP. Controlled about Contractor No. SOPSMARTUMUMSADV I006 Closed SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 125of 135 SOPSMK3SMARTLH -26 but it only requires HSE aspect and not included ensuring compliance with labor and the use of a trained contractor. 8 Observasi 6.9 1 TSS The company already has a policy regarding sexual harassment by forming a gender committee. Socialization has been done in some places but the socialization should be done thoroughly. Randomly found in block 4 division 4 berondol collectors who have not properly understood the meaning of sexual harassment Not yet employees know and understand about sexual harassment that has been done previously socialized Corective Action: Re-Socialization Sexual Harassment will implemented Evidance: Documentation socialization Sexual Harassment Closed SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 126of 135 9 observasi 6.11 1 TSS The company already has an annual and five- year annualized CSR program basis. CSR programs should be made systematically, starting from identification of needs - planning - submission and approval of a plan - budget - implementation -evaluation. From the CSR data doesnt found any approved CSR budget proposal for CSR activities in 2013 and therefore can not be ensured implementation of the plan 5 year CSR Annual Strategic Plan for PT KDA has been made which is then revealed to be an annual program. For the implementation of CSR programs in proses.because There are several CSR activities not all be realized in the year 2013, so that should carry over to 2014 or there are other activities that are converted to more mainstream Corrective Action: Making CSR Semester Evaluation Program Evidance: Documents Semester evaluation of CSR Closed SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 127of 135 APPENDIX- 3 PT. KRESNA DUTA AGROINDO – LANGLING MILL RSPO SUPPLY CHAIN CHECKLIST – MASS BALANCE MODUL PT. Kresna Duta Agroindo – LANGLING Mill LNGM is implemented the supply chain system procedures as required in RSPO certification. The company has set the supply chain system categorized as Mass Balance scheme.

A. Documented Procedures

1.1 Complete and up to date procedures covering the implementation of all the elements in these requirements. RecordsEvidence: There is procedure SOP Supply Chain Produk RSPO Model Mass Balance PT KDA-LNGMSOP26 dated. 01032014 In identification and traceability procedure SOP LNGM SOP26, stated that the procuct at dispatch letter will be markedstamp with “Mass Balance Segregasi‟, In fact, the status of product is Mass balance only. Status Compliance : Major non-conformity The name of the person having overall responsibility for and authority over the implementation of these requirements and compliance with all applicable requirements. This person shall be able to demonstrate awareness of the facilities procedures for the implementation of this standard. RecordsEvidence: Management Representative related to RSPO-SCCS implementation Traceability Officer related to RSPO-SCCS implementation SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 128of 135 Decree No. 01PC-JambiXI2013 dated. 01 November 2013 Document Controller - SPO Officer related to RSPO ‐ SCCS implementation Decree No. 05FMVIII2013 dated. 01 November 2013 1.2 The facility shall have documented procedures for receiving and processing certified and non-certified FFBs. RecordsEvidence:  SOP Identifikasi dan kemampuan-telusuran SOP Identification and Traceability SOPLNGMSIK Rev.01 dated 01 November 2013  Surat Pengantar Buah Fruit Delivery Letter BNGE with „‟Mass Balance‟‟ mark LNGM: Form Rekap Penerimaan TBS Per Unit FFB Receiving Resume Form each Unit  CPO Production Report Total 4,860.425 TonYear CPO Data Langling Mill Mass Balance Report for SCCS January - December 2012  PK Production Report Total 1,208.956 Ton Year CPO Data Langling Mill Mass Balance Report for SCCS January - December 2012  CPO PK Dispatch Report Total 62,052.490 TonYear CPO certified Non certified Total 14,839.340 TonYear PK certified Non certified

B. Purchasing and goods in

2.1 The facility shall verify and document the volumes of certified and non-certified FFBs received. RecordsEvidence:  There is procedure SOP Identifikasi dan kemampuan-telusuran SOP