chain of custody - gfs - global forestry services has an active license for employing foreign...

GLOBAL FORESTRY SERVICES Registered Office: Palm Grove House, PO Box 438 Road Town, Tortola, British Virgin Islands.

Contact Address: C10-6, Kiara 9, Jalan Kiara 3, Mont Kiara, 50480 Kuala Lumpur, Malaysia. Tel: 6019 380 6778 / 6012 310 6007 Fax: 603 5635 7564

Email: [email protected] Website: www.gfsinc.biz

WOOD TRACKING PROGRAM

Document Control Doc #: WTP 006 Title: WTP Checklist & Assessment Issue: 09 Date: 5 January 2015

Chain of Custody Checklist & Assessment Report

Organization Gold Rank Sdn. Bhd. (189675-K) Reference # G099-012

Contact Person

Francis Loo (MR) Selmiati Yacho @ Sally (Document Controller)

Proposal # Assessment #

GFSS P15-007 01

Office Address

TB 10771, Ground Floor, Jalan Megah 5, 91000 Tawau, Sabah, Malaysia.

Assessment Date 24/03/2015

Sawmill Address

P.O. Box 1601 Off KM 19, Kg. Pitas, Bombalai, Merotai Highway Tawau, Sabah, Malaysia.

Date of Report Date of close out

24/03/2015 -

Telephone +6089 923 101 Lead Assessor Lai Jia Woei

Fax +6089 923 100 Assessor Mohamad Akram Mansur

Email [email protected] Approved By Dr. Kevin Grace Statement of Participation GFS WTP # GFS 010 WTP Issuance Date 14 October 2014 Expiration Date 13 October 2019 Scope of Assessment Company Type Sawmill Scope of Assessment Gold Rank Sdn. Bhd. Product Group Sawn Timber

Source of Material Verified Legal: Sabah, Malaysia.

Species

Drybalanops spp. (Kapur), Dipterocarp spp (Keruing), Parashorea spp. (White seraya), Shorea spp. (Red seraya, Yellow seraya, Melapi), Shorea inappendiculata (Selangan batu), Heritiera simplicifolia (Kembang), Shorea pauciflora (Oba suluk), Koompassia malaccensis (Impas), Eusideroxylon zwageri (Belian)

Limitations of Assessment The information presented in this report is based on documentation and other information presented by the client and observations made during the field verification under the assessment. GFS reporting of information presented by the client are taken as accurate, unless evaluated differently through the observations made during the assessment. All information presented in the report is accurate and complete to the best of knowledge of GFS.






Background Information: Gold Rank Sdn. Bhd. (Gold Rank) registered in Kuala Lumpur, Malaysia with registration # 189675-K. The company has intended to obtain Verified Legal (VL) for the products produced and traded.

Associated Organizations & Subcontractors: Gold Rank Sdn. Bhd. (Gold Rank) has changed ownership since July 2008 and managed under the sister company (Uni-Lumber Sdn. Bhd.). Gold Rank sends Verified Legal sawn timbers for kiln dry services at Rimba KD Services Sdn. Bhd. (located at Mastergroup, Merotai Road, Tawau, Sabah) and MGR located at Kota Kinabalu.

Description of the Supply Chain: Gold Rank’s logs supplies are from the Sabah forest license areas:

Supplier License Raw Material

Location

Rakyat Berjaya Sdn. Bhd. SFMLA 09/97: TWU 06/12, TWU 08/09,

KGU 09/14 Round logs Kalabakan, Tawau

Benta Wawasan Sdn. Bhd. JP(TKA)122/96(KON) - TWU 32/04 Round logs Kalabakan, Tawau

Lim Soon Beng F2B 803383 (CL105391437) Round logs Kunak

Since 2009, GFS has conducted Timber Legality Assurance System (TLAS) – Sabah audit for 24 Forest Management Units in Sabah. GFS has extended to include forest license area under Form 1 and Form 2B in Sabah in year 2012. In addition, GFS has conducted RIL auditing for all harvesting operations in Yayasan Sabah concession and production forests in Sabah, Malaysia.

Common species used include Drybalanops spp. (Kapur), Dipterocarp spp (Keruing), Parashorea spp. (White seraya), Shorea spp. (Red seraya, Yellow seraya, Melapi), Shorea inappendiculata (Selangan batu), Heritiera simplicifolia (Kembang), Shorea pauciflora (Oba suluk), Koompassia malaccensis (Impas), Eusideroxylon zwageri (Belian). Verified legal sawn timber markets include local sales and export to United Kingdom, Mauritius, Netherlands, Belgium and Philippines. Highlights of Assessment 1.0 Legal Requirements Gold Rank maintains updated licenses and permits for all their wood processing and export activities. The company has an active license for employing foreign workers and keeps records of SOSCO payment for local staffs and insurance for foreign workers. Gold Rank has adequate safety and protective equipment to support workers’ job function. The mill only equipped with fire extinguishers - 3 were in normal state (but without service sticker) and 2 were out of pressure. GAP 006/2015 (minor) Gold Rank does not have a standard operation procedure (SOP) focusing on fire prevention and controlling. No training was conducted on fire prevention for workers in year 2014. GAP 006/2015 (minor) Gold Rank is yet to be registered with DOSH however the company has already submitted the application to DOSH Tawau on 19th March 2015. (Observation) 2.0 Documented Policy & Procedures






Gold Rank has a signed environmental policy dated 13th March 2009 that referenced to compliance of legal requirement and support the traceability of forest products through the verification of supply. Gold Rank has documented procedures for all critical control points for their processing mill that covers purchasing receiving of raw material, sawmill production, kiln dry (subcontractor), moulding, sales and administrations. The procedure also includes administration process referenced to refreshment training, CAR (Corrective Action Request) form and maintaining key records for at least 5 years. No sub-contractor agreement was made between Gold Rank and newly engaged MGR (to provide kiln dry services) as required in the kiln drying procedure. No batch number and environmental status noted in the Delivery Order. GAP 007/2015 (minor) 3.0 Organisation & Training Gold Rank has an organization chart that defines the post hierarchy in the company and the key person that represents the COC Management Representative, purchasing, sawmill and sales. COC key staff have adequate knowledge on preparing documents and implementation to the COC system and procedures. The company also maintained records for training conducted. 4.0 Purchasing, Importing & Receiving The company has a supplier risk assessment for VL logs purchased from forest concessions in Sabah Malaysia. The concessions have been assessed under the Sabah TLAS program and Reduced Impact Logging project by GFS started in year 2009 and 2010 respectively. All logs purchased from approved suppliers and traceable to and the forest license area through the records of Removal Pass and Timber Disposal Permits kept in Gold Rank’s office. The assessing team observed no Risk Assessment been conducted for a new VL raw material supplier and purchase contracts lack reference to verified legal status that resulted in an observation under checklist # 4.3. 5.0 Process Controls Adequate documents and records observed in the Gold Rank office to support the traceability of sawn timbers from the invoice (with batch #) back to the Removal Pass # or Timber Disposal Permit # (supplier) through the Log Receiving Batch #. All stocks in the finished good storage area have bundle cards tagged to each bundle of sawn timber that referenced the species, batch #, length, pieces and environmental status. The recording of batch number of sawn timber sent to KD (total input) and output of sawn timber kiln dried by batch # was inconsistent. GAP 005/2014 (minor) - Outstanding 6.0 Sales, Exports & Customs The Sales Invoices, Packing Lists and Product Declaration Form for sales of VL sawn timber under GFS WTP clearly reference the batch #, environmental status and GFS WTP #. Gold Rank keeps copies of the custom and export documents (K2 Chit, MTIB Export License, SFD Royalty Export payment, Fumigation Certificate, Phytosanitary Certificate and Bill of Lading) in the office but lacked copies of the removal pass that resulted in an observation under checklist # 6.3.2. 7.0 Records & Data Gold Rank maintains monthly summary records for receiving, production, kiln dry and sales of VL sawn timber. The monthly summary records for each department indicate storage of key records for at least 5 years.






Non-Conformance : (GAPs)

GAP # Type Checklist # Description

005/2014 (Minor) Outstanding 5.2

The recording of batch number of sawn timber sent to KD (total input) and output of sawn timber kiln dried by batch # was inconsistent.

006/2015 Minor 1.2.2

• 5 fire extinguishers checked, 3 were in normal state (without service sticker) and 2 were out of pressure.

• No standard operation procedure (SOP) focusing on fire prevention and controlling.

• No fire training was conducted for workers in year 2014 until to date.

007/2015 Minor 2.4

In February 2015, Gold Rank delivered VL sawn timber to MGR for kiln dry services however no sub contractor agreement has been made as required in the kiln drying procedure.

Highlights of Close out visit (if applicable) Date Not applicable. Recommendations Gold Rank Sdn. Bhd. has demonstrated compliance to the Wood Tracking Program requirements (WTP-005 v09 Jan 2015) and is recommended to maintain the Statement of Participation. Minor gaps identified in this assessment should be addressed before the next surveillance visit. Actions required to close the gaps include:

• GAP 005/2014 – Gold Rank shall include the batch number of sawn timber production into KD monthly production record to enhance the traceability.

• GAP 006/2015 – Fire extinguishers need to be serviced and maintained. A SOP on fire prevention and controlling shall be developed. Fire training needs to be conducted among workers to increase safety awareness.

• GAP 007/2015 – Subcontractor agreement between Gold Rank and MGR (subcontractor who provides KD service) shall be made as required in the Kiln Dry Procedure.

The next surveillance visit is scheduled in September 2015.

End of Summary Report

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