Public Summary of KDA LNGM

List of Contents Page

A Scope of the Certification Assessment ... 4

A.1. National Interpretation Used ... 4

A.2. Assessment Type (Estate and Mill) ... 4

A.3. Location Map ... 4

A.3.1. Location Address of the Mill and Approximate Tonnages Certified (CPO and PKO) ... 5

A.4. Description of Supply Base ... 6

A.4.1. General Description ... 6

A.4.2. Location of Supply Base ... 6

A.4.3. Statistic of Supply Base ... 6

A.5. Organizational Information and Contact Person ... 7

A.5.1 Audit Againstthe Rules for Partial Certification ... 8

A.6. Date Certificate Issued and Scope of Certificate ... 12

B. Assessment Process ... 13

B.1. Certification Body ... 13

B.2. Qualifications of the Assesment Team ... 14

B.2.1. Qualifications of the Lead Assessor and Assessment Team ... 14

B.3. Assesment Methodology ... 16

B.3.1. General Overview ... 16

B.4. Stakeholder Consultation ... 22

B.4.1. Summary of How Stakeholder Consultation was Organized ... 22

B.5. Date of Next Surveillance Visit ... 23

C.1. Lead Assessor‟s Summary and Recommendation for Certification ... 24

C.2. Summary of the Findings by Criteria ... 25

D. Certified Organization‟s Acknowledgement of Internal Responsibility... 81

D.1. Formal Sign-Off the Assessment Findings ... 81

D.2. Statement by the Certifier Body on Behalf of PT. Sucofindo SBU-SICS ... 82

List of Abbreviation ... 83

Appendix-1 Map ... 85

Appendix-2 NCR ... 90

Appendix-3 PT. Kresna Duta AGroindo – Langling Mill RSPO Supply Chain Checklist – Mass Balance Modul ... 127

A.

Scope of the Certification Assessment

A. 1. National Interpretation Used

The management of the Palm Oil Mill(s) and associated suppliers of Fresh Fruit Bunches (FFB) were assessed for compliance against the International RSPO criteria as interpreted and endorsed for Indonesia, RSPO Certification Systems and RSPO Suply Chain Certification Systems.

A. 2. Assessment Type (Estate And Mill)

Certification Unit : PT. Kresna Duta Agroindo – Langling Mill located at Desa Langling, Kecamatan Bangko, Kabupaten Merangin – Jambi, INDONESIA

A.3. Location map

Please see Appendix-1Map:1. Map of Location, 2. Land area, 3. Topography and 4. HCV areas

A. 3. 1. Location address of the mill and approximate tonnages certified (CPO and PK)

No Name of Mill Location Address GPS Reference

Annual Output (mt)

CPO PK

1. Langling Mill PT. Kresna Duta Agroindo

Desa Langling Kecamatan Bangko Kabupaten Merangin, Provinsi

Jambi,Indonesia

Latitude: 02o06‟ 05” LS Longitude: 102o22‟31” BT

60,014.37 14,931.67

A.4. Description of Supply Base

A. 4. 1. General description

PT. Kresna Duta Agroindo operates 2 palm oil mills under PT. Kresna Duta Agroindo, named PT. Kresna Duta Agroindo - Jelatang Mill (JLTM) and PT. Kresna Duta Agroindo – Langling Mill (LNGM).

This report scope is only for PT Kresna Duta Agroindo - Langling Mill and its supply bases. The raw material/ FFB for PT. Kresna Duta Agroindo - Langling Mill is supplied from the 1. Bangko Estate (Division 5), and 2. Batang Gading estate. Totally supplied FFB from these two (2) estates are 23,100.79 MT.

All estates are operated under one management of PT. Kresna Duta Agroindo. All estates located in Jambi, Indonesia. PT. Kresna Duta Agroindo is a member of RSPO and they are implementing a program to achieve RSPO Certified Palm Oil for all its production.

There is no plan to expand the land holding and therefore Principles 7 is not applicable to this assessment.

A. 4. 2. Location of the supply base

No. Estate Name Location

GPS

Latitude Longitude

1 Bangko Estate Desa Langling, Kecamatan Bangko, Kabupaten Merangin, Provinsi Jambi, Indonesia

02o 05‟ 50” 102o 21‟ 58”

A. 4. 3. Statistic of supply base

No. Estate

Name

Planting Year

Area/Planting Year

Age/Planting Year

Estimated FFB/Year

Estimated CPO/Year

1 Bangko Estate Divisi 5

1994 514,46 19 14,506.84 3,062.31

1995 123,65 18 2,940.54 620.73

1997 223,75 16 5,653.41 1,193.40

A. 5. Organizational Information and Contact Person

1 Company Name PT. KRESNA DUTA AGROINDO

2 Personal Contact Ismu Zulfikar

3 Vice Management Eldimart

4 Company Address Sinarmas Land Menara 2 Lantai 30, Jalan M. H. Thamrin No. 51, Jakarta, Indonesia

5 Company Status PMDN

7 Phone/ Fax 021 50338899

8 E-mail ismu.zulfikar@sinarmas-agri.com

9 Website www.smart-tbk.com

A. 5. 1. Audit Again the Rules for Partial Certification 1. Introduction

The audit team has visited Head office at Sinarmas Land Plaza, Tower 2, 30th Floor, Jalan M. H. Thamrin No. 51, Jakarta, Indonesia to find out the compliance with the rules for partial certification standard in the whole group of PT Sinar Mas Agro Resources and Technology, Tbk (SMART). There are 14 mills, 40 own estates and14plasma (associated smallholders) within this group. The team found a major and a minor non conformity refer to the RSPO requirements for partial certification as stated in the final RSPO certification Systems documents, June 2007, section 4.2.4 as describe below :

2. Assessment agenda (partial Certification Audit)

3. Audit Team Findings in Correlation to the Rules Partial Certifications

a. The Organization is a member of RSPO

PT Kresna Duta Agroindo has confirmed membership of the RSPO under PT SMART Tbk with no. 1-0019-05-000-00

b. A Time Bound Plan for achieving certification within relevant entities

No Name of Mill Supply Base Company Location

Estimate time of Certifica tion

1 Padang Halaban Mill

Padang Halaban Estate Pernantian Estate Adipati Estate Kanopan Ulu Estate

PT. SMART TBK North Sumatera

2011

2 Batu Ampar Mill

Batu Ampar Estate Batu Mulia Estate Sungai Panci Estate

PT. SMART TBK South Kalimantan

2012

Date Location Agenda

19 November 2013

BangkoEstate Verifying legal documents, meeting with Human resources department for Labor Union and workers information

Sungai Panci KKPA 3 Tanah Laut

Mill

Tanah Laut Estate Kintapura Estate

PT. SMART TBK South Kalimantan

2012

4 Langga Payung Mill

Langga Payung Estate Paya Baung Estate Normak Estate PT. Tapian Nadenggan North Sumatera 2012

5 Hanau Mill Hanau Estate Tasik Mas Estate Tanjung Paring Estate Langadang Estate Medang Sari Estate

PT. Tapian Nadenggan

PT. Satya Kisma Usaha

Central Kalimantan

2012

2015 6 Leidong

West Mill

Leidong West Utara Estate

Leidong West Selatan Estate

Bukit Intan Estate Bukit Mas Estate

PT. Leidong West Indonesia

Bangka 2013

7 Semilar Mill Semilar Estate Sei Rindu Estate Mandang Estate Puri Estate PT. Tapian Nadenggan Central Kalimantan 2013

8 Jak Luay Mill Pantun Mas Estate Pantun Mas KKPA Jak Luay Estate Jak Luay KKP Long Buluh Estate Bukit Subur Estate Bukit Subur KKPA

PT. Tapian Nadenggan

East Kalimantan

2014

9 Gunung Kombeng Mill/Muara Wahau Mill

Gunung Kombeng Estate Gunung Kombeng KKPA Muara Wahau Estate Rantau Panjang Estate Rantau Panjang KKPA

PT. Kresna Duta Agroindo

East Kalimantan

10

Jelatang Mill

Bangko Inti Estate Tiga Serumpun KKPA Pamenang Plasma Bukit Bungkul KKPA

PT. Kresna Duta Agroindo

Jambi 2014

2014 2015 2015 11 Pelakar Mill Pelakar Estate

Tiga Serumpun KKPA Batang Merangin Estate Batang Tembesi Estate Kubang Ujo Plasma

PT. Kresna Duta Agroindo

Jambi 2014

2014 2014 2014 2015 12 Langling Mill Bangko Inti Estate

Bangko Plasma Bukit Bungkul KKPA Pamenang Plasma Batang Gading Estate Batang Gading KKPA

PT. Kresna Duta Agroindo

PT. Satya Kisma Usaha

Jambi 2014

2015 2015 2015 2015 2015 13 Sungai

Bengkal Mill

Sungai Bengkal Estate Sungai Bengkal KKPA Kilis Estate

Kilis KKPA

PT. Satya Kisma Usaha

Jambi 2014

14 Bukit Kapur Mill

Sungai Cantung Estate Bukit Kapur Estae

PT. SMART TBK South Kalimantan

2015

The raw material for POM PT. Kresna Duta Agroindo (KDA) – Langling Mill is supplied from the FFB which are 1. Bangko Inti Estate; 2. Bangko Plasma; 3. Bukit Bungkul KKPA; 4. Pamenang Plasma; 5. Batang Gading Estate (PT. Satya Kisma Usaha); 6. Batang Gading KKPA (PT. Satya Kisma Usaha) and 2 (two) from associated smallholders.

The application of Certification audit was Langling Mill and Bangko Estate Division 5 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 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 should be within the scope of KDA-Langling mill certification. Team audit decide to issue the Major non-conformace considering to requirements as belows :

1. RSPO Certification System clause 4.2.3 that the unit of certification shall be the mill and its supply base ,

2. RSPO Certification System clause 4.2.4 the management has set up the time-bound plan of Batang Gading Estate as the Supply Base of PT SKU Mill which will be certified by other Certification Body. This is not accepted the appropriateness of the time bound plan at the moment.

3. RSPO SCC Standard module E – CPO Mills: Mass Balance, clause E.3.3: a) The Facility shall record and balance all receipts of RSPO certified FFB and deliveries of RSP certified CPO, PKO and palm kernel meal on a three-monthly basis. 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 doesn't have quarterly report to the recording and balance of certified FFB and CPO. This is issued as non-conformity major. 4. RSPO Supply Chain Certification System clause and 5.3.16 that all non-conformances

observed during an audit shall be classified as „major‟ since all requirements for Supply Chain Certification have to be met before granting certification.

Please see the Appendix 1: RSPO Supply Chain Checklist – Mass Balance Module and Attachment1: Non-Conformity / Observation Report.

Conclusion : Major Non Conformities

Team has been verified documents during partial certification audit. The companyhas conducted Gap analysis to the whole group compare to P & C RSPO requirement. The Gap Analysis conducted by other Certification Body. Randomly, the team checked the content of reports to ensure the fulfillment of partial certification. From the sampling report, the team found that not all report has the conclusion for the fulfillment regards to partial certification requirement.

The company has made the self declaration for partial certification rule and signed by management. The self declaration stated as belows (a-d) :

a. Significant Conflicts

and 7.6. All the conflicts so far has been resolved with mutual agreement. GAR also registerd as member of RSPO Dispute Settlement Facility Advisory Group as a representative of grower. Supporting document is DSF RSPO member as a grower dated 22 April 2013.

b. No replacement of primary forest and or area with HCV’s since November 2005 or year 2007 (National Interpretation)

PT SMART Tbk has conducted Historical HCV Assesment (HHA) in collaboration with Faculty of Forestry, Institut Pertanian Bogor (IPB) April 2011. Historical HCV Assesment (HHA) Report has been submitted to RSPO on May 2011. As a follow up from the Historical HCV Assesment (HHA) Report, GAR has been proposed HCV Remediation Plan to RSPO. Revisions of HCV Remediation Plan are on going process/ discussion with RSPO Biosdiversity and HCV Working Group (BHCV WG). Supporting documents is Historical HCV Assesment (HHA) report.

c. No labor disputes that are not being resolved through an agreed

The company has the SOP and menchanism to resolve dispute with union labour with mutually agreement. The last data shows that there was a labor dispute in Jambi in 2012. The dispute has been resolved by related parties and has been final through Jambi Industrial Relation Court. There is the Decision of the Supreme Court of the Republic of Indonesia No. 1007 K/Pdt.Sus/2010 related to the case of the industrial relation dispute.

d. No evidence of non-compliance with law in any of the non-certified holdings

There are no land dispute or court cases. The last case was in 2012 relating to the PT SMART Tbk land located in North Sumatera. The people occupied land under the company‟s HGU and the case was won by the company.

A.6. Date Certificate Issued and Scope of Certificate

Name of Client PT KRESNA DUTA AGROINDO

Client Number RSPO 00007

Certificate Number RSPO 00007

Certification Decision Date

Issued by PT SUCOFINDO, SBU SICS

Kav. 34 Jakarta 13640

Telephone /Fax Tel.: +62-21-7983666 / Fax.: +62-21-7987015

Email tuti@sucofindo.co.id

Website www.sucofindo.co.id

Scope :

Mill Langling Mill

Estate Bangko Estate

Projected mass balance CPO & PK CPO : 60,014.366 MT and PK : 14,931.666 MT Certification Registration Code SICS-00003

Type of Certification Single site

Certifier TriyanAidilfitri

Signed

B.

Assessment Process

B. 1.

Certification Body

SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES (SUCOFINDO ICS), which was formed in 1994, is one of the strategic business unit that provides certification services for leading companies.SucofindoCertification by International Certification Services is recognized nationally and international.Quality Management System Certification by SUCOFINDO ICS has obtained accreditation from National Accreditation Committee (KAN-Indonesia).

Lead Auditors and Auditors of SUCOFINDO ICS are trained professionals in the field of international standards, auditing and management systems and are registered in the IRCA (International Register of Certified Auditors) and IEMA (Institute of Environmental Management & Assessment), UK. SUCOFINDO ICS certification process is supported by experts at PT. SUCOFINDO who understand the industry sectors and services in Indonesia.

SUCOFINDO ICS Operational is supported by a network of branch and representative offices of PT. SUCOFINDO spread in 45 cities across Indonesia.

The services provided by International Certification Services Sucofindo are:  Quality Management System Certification

 Environmental Management System  ISO 22000 :2005

 OHSAS 18000 Certification

 Hazard Analytical Critical and Control Point (HACCP) Certification  Good Manufacturing Practice (GMP) Audit

 Product Certification

 Sustainable Forest Management Certification  Products Organic Food Certification

 RSPO certification  ISPO Certification

 Certification of Integrated Management System Certification (SMT)  Training

B. 2. Qualifications of the Assessment Team

B. 2. 1. Qualifications of the Lead Assessor and Assessment Team Tuti Suryani Sirait (Lead Auditor) :

Graduated from Institute Agriculture in Bogor (IPB), 1991

She has more than 10 years audit experiences in auditing HACCP, GMP, ISO 9001:2008, ISO 22000:2005, ISPO and RSPO.

She has successfully completion training RSPO by Komisi RSPO, Jakarta, SCC Standard Training by David Ogg & Partner – Jakarta, ISPO Lead Auditor Training by Komisi ISPO, Jakarta, Lead Auditor Training of ISO 9000/19011 organized by SICS – Sucofindo, ISO 22000 : 2005 FSMS Auditor / Lead Auditor by Moody International, Singapore; Lead Assessor for Food Safety Management System (HACCP&GMP) by QAS Sydney, Australia and Social Lead Auditor Training (SA 8000) from Social International Audit (SIA), Turkey.

ISPO Lead auditor training.

Nuzwardi Sjahwil (Auditor)

He graduated from Institutee Agriculture of Bogor (IPB).

He has more than 5 years audit experiences in OSHAS and SMK3. He has successfully completion from Lead auditor for SMK3, Lead Auditor for OHSAS and Lead Auditor for ISO 9001. He has successfully completion training RSPO by Komisi RSPO, Jakarta, ISPO Lead Auditor Training by Komisi ISPO, Jakarta, and Supply Chain Training.

Rizky Qomaruzaman (Auditor)

Lead Auditor SMK3 since year 1997 till now. Lead Auditor OHSAS 18001 since year 2000. Auditor ISO 14001 since 2002. Premises visited: many various industries, petrochemical, oil & gas, EPC, general contractor, Palm Oil Plantation and Mill, chemical, pulp & paper, coal mining, cement industries, and so on.

Attended Green Company Training year 2008, He has successfully completion from ISPO lead auditor course year 2013, attended RSPO lead auditor Course at KL year 2013, attended environmental seminar (Environmental Audit) from Environmental Ministry Republic Of Indonesia year 2013.

Perigia Ariromas (Auditor)

Graduated from ITB. She has successfully completion Lead Auditor Training RSPO by Proforest, Lead Auditor Training ISPO by Komisi ISPO, Jakarta, Lead Auditor IRCA Training of ISO 9001:2008 and Lead Auditor Training IRCA ISO 14001: 2004.

Ganjar Gumelar (Auditor):

He graduated from University of Gadjah Mada (UGM), Forestry Faculty, majoring in Forest Management, Yogyakarta.

He has completed the training such as Indonesian Sustainable Palm Oil (ISPO) auditor training, Komisi ISPO – Ministry of Agriculture & Komisi Akreditasi Nasional (KAN), Bogor (West Java) & Pangkalan Bun (Kalimantan), Indonesia, 2013 ; ISO 9001 : 2000 Quality Management Systems (QMS) Auditor/Lead Auditor Training Course (IRCA), PT. SUCOFINDO (Persero), Jakarta, Indonesia, 2013 ; Awareness Hazard Analysis Critical Control Point (HACCP), PT. SUCOFINDO (Persero), Jakarta, Indonesia, 2013 ; Assessor Training High Conservation Value Forest –

HCVF, Tropenbos International Indonesia Program, The Nature Conservancy (TNC), WWF Indonesia & Institut Pertanian STIPER (INSTIPER) Yogyakarta, Yogyakarta, Indonesia (2011).

B.3. Assessment Methodology

B. 3. 1. General Overview

The assessment was carrying out in conformity with the SBU SICS RSPO manual and procedures for auditor and certifier. The assessment was conducted by qualified auditors and referred to RSPO standard as endorsed for the Indonesia National interpretation, RSPO Certification System, RSPO SCC Standard and RSPO SCC System. Partial certification audit will be conducted separately to check compliance with Final RSPO Certification System for partial certification.

The opening and closing meeting was conducted at the Office Bangko Estate-Jambi and then continue in Mill‟s and estate‟s offices. Stakeholders meeting was conducted twice, firstly was held during preliminary assessment and secondly during Certification audit.

At the opening meeting, the team audit confirm to conduct the audit at :

Office at Bangko Estate

 Review the company‟s response for previous findings  Documentation review for transparencies

 CSR plan and policy

 Internal Audit program & Management Review Meeting  Land ownership and compensation mechanism

 _{Documentation of RSPO‟s requirement refers to P & C}

At estate, include :

 Worker interviews :OSH. Sexual, religious, racial harassment. Payment scheme, contracts. Child labor. First aid. Awareness.

 Chemical stores :Storage. MSDS leaflets. Herbicide mixing areas. PPE. Ventilation. Security.

 Field inspections: Fertilizingoperations. SOP‟s., Herbicide application program.Harvesting

boxes. Soil erosion.

 HCV‟s :Identification. Management plans. Environmental Impact Assessments  Riparian zones :Width. Current and future management, monitoring system  Water management :Water courses. Water monitoring.

 Road maintenance :Program and progress of road improvement.  Social amenities :Social Impact Assessments.

 Workshops :Oil traps. Safe working environment. PPE.Diesel tanks. Environmental waste management.

 Line sites :Interviews with householders. Inspection of water discharge points. Water improvement plans. Waste disposal.

 Local communities. Contributions made. Employment opportunities. Social impacts. Complaints procedures, Transparency.

At Mill include :

 Mill and workshop inspections.  Documentation.

 _{Worker interviews. SOP‟s. Safe working environment. Gen sets. Walk ways. Signs. EFB.} POME treatment. Emissions. Mass balance. Diesel tanks. PPE. Fire extinguishers. First aiders and boxes. Fuel and water usage.

 OSH. Training. Management structure. First aiders.

 Full document review. Completion of the checklist. Review and documentation of evidence. All aspects of RSPO P&C‟s applicable.

 Worker interviews. OSH. Sexual, religious, racial harassment. Payment scheme, contracts, union labor.

 Supply Chain Certification System : Incoming FFB data input, CPO/PK out going/dispatched database, marking, certified CPO & PK reporting, Document Control and related procedures.

Actual Audit Programme Phase I : Prelimenary Audit

Date/Time Functions / areas / Department / activities to be audited (include related requirements)

Auditor(s)

30/09/2013 1st Day

05.45 Departure from Jakarta to Jambi Team

07.30 Departure from Jambi to Site Team

17.30 End of the day 1

01/10/2013 Day 2nd Audit

08.00 Location: Kresna Duta Agroindo Office

Opening Meeting at Site

- Arrangements Schedule Auditor vs auditees

- Arrangements location (mill, estate and stakeholders) to be visited

All

08.30 Document Review of :

- Worker welfare, Union, stakeholders

- Transparencies/communication, CSR program - Legality

Document Review of :

- Management Aspects (Internal audit, MRM, Training, Jobdesc)

- Environment Aspect

Document Review of :

- Best Practices - OSHAS/SMK3

Document Review of :

- Legality - HCV

TSS

GIA

NZ

GGU

12.00 Break

Field visit Jelatang Mill - PT. Kresna Duta Agroindo TEAM

02/10/2013 Day 3rd Audit

08.00 Kresna Duta AgroIndo, Bangko Estate

Environment Aspects : Water management (Water courses, water monitoring); Environment waste management, Environmental Impacts;Chemical store (Block B08 Division 5 BNGE)

GIA

HCV Aspects : HGU and Land Status Estates confirmation, Riparioan zone, HCV confirmation

Plantation Aspects : Herbicide Application Programme, Integrated Pest Management, Harvesting site, Fertilizing Operations, Land Preparation and Assessment (Block B04 Division 5 BNGE)

GGU

Social Aspects: Meeting Stakeholders TSS

Worker Welfare: Housing, Clinic, Labour Union, Koperasi, Worker welfare

NS

12.00 Break All

Visit Langling Mill & Jelatang Mill- PT. Kresna Duta Agroindo TEAM

17.00 End of the day 3

03/10/2013 Day 4th

08.00 Reporting Team

12.00 Break Team

14.00 Closing Meeting All

16.00 End of Closing Meeting All

16.30 Departure from Site to Jambi All

04/10/2013 Day 5th

08.00 Departure from Jambi to Jakarta All

Number of assessor participating : 4 auditors, totally 4 person Number of days spent for the assessment on site : 5 days

Phase II : Certification Audit

Date/Time Functions / areas / Department / activities to be audited (include related requirements)

Auditor(s)

18 Nop‟13 1st Day

05.45 Departure from Jakarta to Jambi Team

07.30 Departure from Jambi to Site Team

13.00 Break& Lunch

14.00 Arrive at site

14.30 Opening Meeting at Kresna Duta Agroindo Office - Introduction by Team Leader

- Arrangements Schedule Auditor vs auditees

All

15.30 Audit Partial of PT. KDA Team

16.30 End of the day 1

19 Nop‟13 Day 2nd Audit

Location: Kresna Duta Agroindo Office

08.00 10.00

See the previous findings and Audit Against the Rules for Partial Certification Documentation Review of :

- Worker welfare, Union, stakeholders - SIA, CSR

Documentation Review of :

- Management Aspects (Internal audit, MRM, Training, Jobdesc)

- SMK3 / OSHAS Aspect - Worker welfare

Documentation Review of :

- Environment Aspects - Best Practices Mill

Documentation Review of :

- Legality

- HCV& Biodiversity - Best Practices Estate

Team TSS

NZ

RQ

GGU

12.00 Break

13.30 Continue audit for documentation TEAM

20 Nop’13 Day 3rd Audit

08.00 Kresna Duta AgroIndo Estate

Environment Aspects : Water management (Water courses, water monitoring); Environment waste management, Environmental Impacts;Chemical store, hazards Handling (Block B03, B06 Division 5 BNGE)

RQ

HCV Aspects : HGU and Land Status Estates confirmation, Riparian zone, HCV confirmation

Legal Aspects : Boundaries Stones with Coordinate data

Best Practices : Nursery, Spraying, Harvesting, IPM, Fertilizing System, Topography (Block B06, B11, G05 Division 5 BNGE)

GGU

Social Aspects: Meeting Stakeholders TSS

OSHAS/SMK3 : Interview worker for PPE, reproduction protection policy, safety at work issue

Worker Welfare: Housing, Clinic, Labour Union, Koperasi, working hour & overtime, sexual harassment, pays system (Block B06, B08 Division 5 BNGE)

NS

12.00 Break

13.30 Field visit Mill PT. Kresna Duta Agroindo (Langling & Jelatang) Environment aspects, Best Practices at Mill:

SMK3/OSHAS Aspects, worker welfare

Contractors & Suppliers interview, TBS Receiving at Mill, SCC System

RQ NS TSS

17.00 End of the day 3

21 Nop’13 Day 4th

08.00 Reporting Team

12.00 Break Team

13.30 Closing Meeting

15.30 End of Closing Meeting All

16.00 Departure from Site to Jambi All

20.30 Arrived at Hotel (Jambi) All

22 Nop’13 Day 5th

07.00 Departure from Jambi to Jakarta All

Number of assessor participating: 4 auditors.

Number of days spent for the assessment on site :25 days

B. 4. Stakeholder Consultation

B. 4. 1. Summary of How Stakeholder Consultation was Organized Stakeholders Consultation and Company Responses

Issue Company Responses Assessor Findings

Trade Unions

a. Workers who work overtime exceeding the government overtime hour requirements (over 14 hours/week)

b. Damaged Personal Protection Equipment (PPE) is not promptly replaced because out of stock.

a. The companyal ready makes the rules throughout the Mills and Estates to comply with working hours and overtime payment in

accordance with

government regulations. b. The company will ensure

the stock of each of PPE items in the office

a. Conform

b. Conform

Bangko Village (Customary leaders, religious leaders,

plasma representatives,

Village Chiefs)

a. Complaint about dust of roads passed by FFB trucks that cross residential areas.

b. No complaint related to water, air and sound pollution.

c. No cases of land dispute. The last compensation process was in 1999.

d. Confirmation that no worker is employed under the age of 18 years old (child labour). e. The company has given CSR

assistance in the form of religious, glasses, and biogas assistance.

a. The company has followed up by:

- Distributing circulars and displaying traffic signs of truck maximum speed limit outside residential areas: 40 km/hourandin residential areas: 25 km/hour. - Conducting regular road

watering during the dry season.

Confirmation with the public representatives: has met the communitydesires

Conform

Karya Mukti Cooperative

a. The Mill‟s acceptance criteria of accepted and unaccepted palm fruit are not fully understood.

b. FFB price has been transparent and complied with local government regulations. c. SPK has been revised and

a. The company has conducted re-socialization to the farmer group and displayed images of accepted and unaccepted palm fruit as an aid.

the scope has conformed to field actual implementation. d. Payment has been on time

according to the agreement.

Contractors

Bpk. Mulyani (Contractor for

Diesel Pump House

Construction)

- The agreed SPK has been available and payment has been on time.

Conform

B. 5. Date of Next Surveillance Visit

One (1) year after date of certification

C.

Assessment Findings

C. 1.

Lead Assessor’s Summary and Recommendation for Certification

The management (Mill and estate) showed the commitment to the implementation of the principles and criteria of the RSPO NI-INA. The assessment has been carried out through field visit to head office, mill and estate.

The public announcement for certification has published on RSPO website prior 30 days from the audit certification to give the opportunity to stakeholders for comments and feedback. There is no a grievance or complaints received from the stakeholders during 30 days of public consultation period. Team auditors also conducted separate meeting with village head, local community, union labor team, and government official representatives.

There are 2 NC major, 14 NC minor and 16 observations issued during preliminary audit. The company has followed up all NCRs. At certification audit, the team issued 4 NC majors, 3NC minors and 2 observations. The company has made the corrective actions referes to majors and minors findings issued. There are 1 (one) remaining Minor non conformity and 1 (one) observation upon the completion of corrective action made by the company. The Minor Non Conformity is : The evidence of the implementation of working hours & overtime at estates and mill refers to the Manpower regulation and the observation is: The evidence of implementation of SCCS standard as Mass Balance Scheme at Langling Mill. There is commitment of management to make corrective action and for continuous improvement. There is also improved plan for social and environmental area. The audit team found that PT Kresna Duta Agroindo Langling Mill and its estates is complying against RSPO P & C approved for Indonesia. Therefore the recommendation of the Lead Auditor that Certificatre of RSPO is awarded to PT Kresna Duta Agroindo Langling Mill and its estates

Signed :

Tuti Suryani Sirait Date : 22 April 2014

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 (SOP/SPO/SMART/LH-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 (SOP/SPO/SMART/LH-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. 010/SAJE/LNGM/IV/2013 dated 23 April 2013 and has been responded with the letter dated 4 May 2013 No. 36/PUPUK/LAB-LNGM/4/2013. 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.

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 management‟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 SOP/SPO/SMART/LH/03 (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 estate/mill. 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. 7/73 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 hours/week). The company has made the corrective action by issuing the Circular Letter by Director of Human Resources No. 004/HR Ops/2014, 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.

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. 178/1991 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. 07/1998 regarding Granting of Site permit for the Purpose of Palm Estate Development of 622 Ha dated 2 June 1998.

Decree of Regent Head of 2nd Level Region of Sarolangun Bangko No. 230/1999 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 2nd Level Region of Sarolangun Bangko No. 231/1999 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 2nd Level Region of Sarolangun Bangko No. 232/1999 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. 70/HGU/BPN/98 totaled 622 Ha dated 2 June 1998 to PT. KDA by Sarolangun Bangko Regency, Jambi Province. EXPIRED 24/11/2033

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 20/09/2035

Office of Jambi Province. EXPIRED 20/09/2035

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 20/09/2035

HGB No. 06.04.10.05.3.00002 totaled 126 Ha dated 11/10/1993 by Head of Land Office of Sarolangun Bangko Regency, Jambi Province. EXPIRED 04/11/2011. KARANG BERAHI

HGB No. 06.04.10.06.3.00002 totaled 103 Ha dated 11/10/1993 by Head of Land Office of Sarolangun Bangko Regency, Jambi Province. EXPIRED 04/11/2011. JELATANG

MOST CURRENT HGB:

HGB No. 06.04.02.05.3.00003 totaled 74.940 M2 dated 10/10/2012 by Land Office of Merangin Regency, Jambi Province.

HGB No. 06.04.02.05.3.00004 totaled 49.862 m2 dated 10/10/2012 by Land Office of Merangin Regency, Jambi Province.

HGB No. 06.04.02.05.3.00005 totaled 74.890 M2 dated 10/10/2012 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. 929/1369-P/09-01/PB/II/99 dated 2 March 1999.

Plantation Business Registration Letter No. 960/Menhutbun-VII/2000 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 ton/hour, 60 ton/hour and 60 ton/hour - Installed capacity : 30 ton/hour, 60 ton/hour and 60 ton/hour

Limited Liability Company Registration Certificate No. 09.05.1.51.37878, valid until 01/09/2013. 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 BPN/KDA 06/XXXIV marker with coordinates of 206629,39 E and 9768421,78 N UTM

b. The sample BPN/KDA XXV marker is a supporting marker with coordinates of 206027.05 E and 9769049.28 N UTM. Because the position of BPN/KDA 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 BPN/KDA 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 BPN/KDA 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 BPN/KDA 08 marker was not placed properly, because at the same time the older BPN marker was found. BPN/KDA 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.

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 of 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 coordinates 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).

20January2014, with a total area of 218.08 hectares. They are :

1. HGU No. 01/HGU/BPN.15/2014datedJanuary 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. 02/HGU/BPN.15/2014datedJanuary 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 (SOP/SPO/SMRT/LH-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:

- Production assumptions of CPO, PK & FFB - Cost assumptions

- Cost of production for Estate & Mill and cost/ton 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 ton/ha 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 01/07/2010.

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 – SOP/SMART/MCAR/I/TA-PPA

- CHAPTER II Replanting Plan SOP – SOP/SMART/MCAR/II/TA-PRP - CHAPTER III Nursery SOP – SOP/SMART/MCAR/III/TA-BBT

- CHAPTER IV New Land Clearing SOP – SOP/SMART/MCAR/IV/TA-PLB - CHAPTER V Planting SOP – SOP/SMART/MCAR/V/TA-TNM

- CHAPTER VI Replanting SOP – SOP/SMART/MCAR/VI/TA-RPL

- CHAPTER VIII Weed Control SOP – SOP/SMART/MCAR/VIII/TA-PGM - CHAPTER IX Fertilizing SOP – SOP/SMART/MCAR/IX/TA-PPK

- CHAPTER X TBM Maintenance SOP– SOP/SMART/MCAR/X/TA-PTB

- CHAPTER XI Preparation for Harvest SOP – SOP/SMART/MCAR/XI/TA-PMP - CHAPTER XII TM Maintenance SOP– SOP/SMART/MCAR/XII/TA-PTM - CHAPTER XIII Harvest SOP – SOP/SMART/MCAR/XIII/TA-PNN

- CHAPTER XIV FFB Loading and Transport SOP – SOP/SMART/MCAR/XIV/TA-PPT

- CHAPTER XV Rainfall Measurement with Ombrometer SOP – SOP/SMART/MCAR/XV/TA-PCH

- Land Clearing SOP (SOP/SMART/MCAR/IV/TA-PLB), rev.0, issued 1/9/2012. On the point 2.2.6 Shaping regulates on: terracing and horse-shoe shaping.

- There is a Circular Letter No. 071/SMD OPS/IX/2007 dated 04-09-2007 concerning Prohibition to clear lands by burning relating to the letter of the Minister of Agriculture No. 184/LB.130/M/8/2007 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 IK/SMART/MCAR/IV/TA-PLB/01- Clearing Blocking

- Road Making SOP/SMART/MCAR/I/TA-PPA and IK/SMART/MCAR/1/TA-PPA/02-Road Making

- Drainage Making IK/SMART/MCAR/1/TA-PPA/01-Drainage - Ex Lalang Land Preparation

- Chemical System, Extermination of lalang chemically using glifosat or sulfosat with recommended dose of 6-10 liter/Ha, IK/SMART/MCAR/IV/TA-PLB/02

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; SOP/SMART/MCAR/I/TA-PPA and IK/SMART/MCAR/I/TA-PPA/03. 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 (SOP/SMART/MCAR/III/TA-BBT, rev. 00, 1/9/2012) and IK/SMART/MCAR/III/TA-BBT/06, 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. 067/RC-MNGR/08/2013 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 (FORM/III/TA-BBT/06-Seedling Acceptance and Planting/01 Selection.

- IK/SMART/MCAR/III/TA-BBT/08-Selection PN (Pre Nursery)

- There is form of Pre Nursery Oil Palm Seedling Selection Sheet (FORM/III/TA-BBT/08-Selection PN/01, rev.00, Rejected seedlings are classified into: RL, C, TS, CM, TS, etc.

- 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: 525/857/Disbunhut/XI/2013 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) and/or 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

SOP/SMART/MCAR/X/TA-PTB

WORK INSTRUCTION OF TREE CENSUS IK/SMART/MCAR/X/TA-PTB/01-Sensus Pohon

WORK INSTRUCTION OF INSERTING IK/SMART/MCAR/X/TA-PTB/02-Penyisipan WORK INSTRUCTION OF MEASURING

PLANT GROWTH

IK/SMART/MCAR/X/TA-PTB/03-Pengukuran Pertumbuhan Tanaman

WORK INSTRUCTION OF HARVESTING PLATFORM CONSTRUCTION AND INSTALLATION

IK/SMART/MCAR/XI/TA-PMP/04-Pembuatan dan Pemasangan Titi Panen

WORK INSTRUCTION OF PALM CIRCLE, HARVESTING PATH, CONTROL PATH AND COLLECTION PATH MAINTENANCE

IK/SMART/XII/TA-PTM/01-Perawatan piringan jalan rintis, jalan kontrol dan TPH

SOP OF PREPARATION FOR HARVEST SOP/SMART/MCAR/IX/TA-PMP WORK INSTRUCTION OF INSECT IK/SAMRT/MCAR/XI/TA-PMP/01-

POLLINATOR DEVELOPMENT Pengembangan Serangga Penyerbuk WORK INSTRUCTION OF CASTRATION IK/SAMRT/MCAR/XI/TA-PMP/02- Kastrasi WORK INSTRUCTION OF SANITATION IK/SAMRT/MCAR/XI/TA-PMP/03-Sanitasi WORK INSTRUCTION OF HARVESTING

PLATFORM CONSTRUCTION AND INSTALLATION

IK/SAMRT/MCAR/XI/TA-PMP/04-Pembuatan dan Pemasangan Titi panen

WORK INSTRUCTION OF PALM CIRCLE, HARVESTING PATH, CONTROL PATH AND COLLECTION PATH MAINTENANCE

IK/SMART/MCAR/XII/TA-PTP/01- Perawatan piringan, jalan rintis, Jalan kontrol dan TPH SOP OF CULTIVATION OF PRODUCTIVE

PLANTS

SOP/SMART/MCAR/XII/TA-PTM

WORK INSTRUCTION OF CENSUS IK/SMART/MCAR/X/TA-PTB/01-Sensus Pohon

WORK INSTRUCTION OF PALM CIRCLE, HARVESTING PATH, CONTROL PATH AND COLLECTION PATH MAINTENANCE

IK/SMART/MCAR/XII/TA-PTP/01- Perawatan piringan , jalan rintis, Jalan kontrol dan TPH SOP OF FROND STACKING MAINTENANCE SOP/SMART/MCAR/VIII/TA-PGM

SOP OF WEED EXTERMINATION SOP/SMART/MCAR/VIII/TA-PGM SOP OF ROAD, TRENCH AND BRIDGE

MAINTENANCE

SOP Pembukaan lahan Baru SOP/SMART/MCAR/IV/TA-PLB SOP OF PEST AND DISEASE CONTROL SOP/SMART/MCAR/VII/TA-HPT WORK INSTRUCTION OF PRUNING AND

FROND ARRANGING

IK/SMART/MCAR/XII/TA-PTM/02-Penunasan dan penyusunan pelepah

SOP OF FERTILIZING SOP/SMART/MCAR/IX/TA-PPK

SOP OF HARVESTING SOP/SMART/MCAR/XIII/TA-PNN

ATTACHMENT WORK INSTRUCTION OF MILL CRITERIA OF RIPE FRUITS

LAMP/XIII/TA-PNN/01-Criteria Kematangan Buah di PKS

WORK INSTRUCTION OF HARCESTING IK/SMART/MCAR/XIII/TA-PNN/01-Panen SOP OF LOADING AND TRANSPORTING

FFB

SOP/SMART/MCAR/XIV/TA-PPT WORK INSTRUCTION OF FFB LOADING

SOP/SMART/MCAR/XIV/TA-PPT/01-Pemuatan FFB WORK INSTRUCTION OF FFB

TRANSPORTING

SOP/SMART/MCAR/XIV/TA-PPT/02- Pengangkutan FFB

WORK INSTRUCTION OF NET AND SEAL INSTALLATION

SOP/SMART/MCAR/XIV/TA-PPT/03-Pemasangan jaring dan segel

year 1997.

- Productive Plant Cultivation (TM)includes : 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 12/09/2013 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. IK/SMART/MCAR/VII/TA-HPT/07- 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,

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 1387/kg 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.

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 s/d 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-Pengolahan/review/MCMD#1/2010 (from FFB receipt to storage). The process is outlined as follows:

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 bunches/ffb 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

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 kg/cm2, the permit is at 20.28 kg/cm2. 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 Kg/cm2 (below the permitted pressure of 3 kg/cm2).

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

- SOP/SMART/MCAR/V/TA-TNM, 1/9/2012. Planting SOP

- There is IK/SMART/MCAR/V/TA-TNM/01- Lining of Flat to Wavy Areas.

- SOP and or WI sets 136/ha density. The SOP mentions that the density of plant is 136 trees/Ha, the space between trees (equilateral triangle) is 9.21 m and the distance between the perpendicular line is 7.98 m.

- There is IK/SMART/MCAR/IV/TA-TNM/02: 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).

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. 019/TANAH/LAB-SMARTRI/I/2013 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. 110/DAUN/LAB-SMARTRI/III/2013 dated 16 March 2013 and 205/DAUN/LAB-SMARTRI/IV/2013 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 Kg/Tree/Year, MOP 1 Kg/Tree/Year, Borate 0.075 Kg/Tree/Year and Compost 70 Kg/Tree/Year.

Compliance Status: Compliance

4.3 Practices minimize and control erosion and degradation of soils

The company has Erosion Measurement SOP, PT KDA – BNGE/SOP/28, Revision: 00, effective date 1 August 2013 for Bangko Estate (BNGE) area.

There is River Border Protection SOP of SOP/SPO/SMART/LH-06, effective date 1 July 2010 revision: 01

There is River Border Protection SOP of SOP/SPO/SMART/LH-07, effective date 1 July 2010 revision: 01

There is Circular Letter from RC Jambi 1 No. SE-RC/KDA/10/2013 dated 1 October 2013 concerning Watershed Protection that specifies palm oil free zone of 50 meter from river banks. Information dissemination to workers and community/farmers 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 : 540/202/PMNP/IV/12 and River Map of PT. KDA Area No. Reg. 1359/214/PMNP/XI/13 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 community/farmers 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 planted/managed 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).

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° SOP/SMART/MCAR/I/TA-PPA and IK/SMART/MCAR/I/TA-PPA/03.

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 IK/SMART/MCAR/III/TABDT/06- 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. 039/SMD OPS/III/2010 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 82/2001. 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. RKL/RPL 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 m3

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. 28/2003. 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, NO3, NH3, Cd, Cu, Pb, Zn, Cl and SO4. 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 m3. 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 m3 and the efficiency is 1,191 ton/FFB (Budget: 1.195 ton/FFB)

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 (SOP/SMART.MCAR/VII/TA-HPT, 1/9/2012). 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.

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. 006/EL/KDA-KLH/IX/2013 dated 15-11-2013 stating the results of test for parameters which test

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. 843/LHU/LABLING/X/13 dated 12 November 2013 with the result of pH 7.55; BOD5 3 mg/L; COD 20 mg/L; Total Phosphate (PO4-P) 0.02 mg/L; Nitrate (NO3) 0.169 mg/L; Nitrite (NO2) 0.028 mg/L; E-Coli 400 jml/100; Total Coliform 1100 jml/100 that comply with Government Regulation No. 82/2001.

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 (SOP/SMART.MCAR/VII/TA-HPT, 1/9/2012). 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.

The management of used pesticide containers has been regulated in the procedure of Used Pesticide Container Washing WI (IK/BNGEL/LBH/01, 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. 02/VPA-1/1/2009 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.3/1996 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

SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES

Sucofindo ICS FRM 3.04

Issue 04 Rev. 6 1of 135

RSPO

Assessment Report

PUBLIC SUMMARY

PT. Kresna Duta Agroindo

–

Langling Mill

Jambi, Indonesia

This public summary has been prepared in accordance with RSPO requirements and the information included is the result of a full RSPO assessment of the Mills and supply base as included in the scope of the certificate.

Prepared by: Tuti Suryani Sirait (Lead Assessor) Certification decision made by: Triyan Aidilfiitri

PT. SUCOFINDO (Sucofindo International Certification Services – SICS) Graha Sucofindo B1 Floor,

Jl. Raya Pasar Minggu Kav. 34, Jakarta 12780 Indonesia Contact Person : Tuti Suryani Sirait

Phone : (62-21) 7983666: Fax : (62-21) 7987015 Email : tuti@sucofindo.co.id

SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES

Sucofindo ICS FRM 3.04

Issue 04 Rev. 6 135of 135

Appendix 4.2.Circular Letter by Director of Human Resources PT. Kresna Duta Agroindo