roundtable on sustainable palm oil · · 2018-02-043.1 description of supply chain management...

Roundtable on Sustainable Palm Oil

Supply Chain Certification Report Report no.: SCCS_14007

Assessment against RSPO Supply Chain Certification Systems 2011

PT Perkebunan Nusantara III Sei Mangke Palm Kernel Oil Mill

Simalungun District, North Sumatera

Date of assessment:

June 24, 2014 Report prepared by: Dian S. Soeminta

(SCCS Lead Auditor)

Certification decision by: M. Bascharul Asana

(Director of PT TUV Rheinland Indonesia)

Certification Body: PT TUV Rheinland Indonesia

Menara Karya, 10th Floor Jl. H.R. Rasuna Said Block X-5 Kav.1-2

Jakarta 12950,Indonesia Tel: +62 21 57944579 Fax: +62 21 57944575

www.tuv.com/id

TABLE OF CONTENTS

1.0 SCOPE OF SUPPLY CHAIN CERTIFICATION ASSESSMENT 3

1.1 Executive Summary and Scope of Assessment 3 1.2 Certification Details 3 1.3 Organisational Information / Contact Person 3 1.4 Actual production volumes and projected outputs. 3 1.5 Summary of Previous Assessment 4

2.0 ASSESSMENT PROCESS 5

2.1 Certification Body 5 2.2 Qualifications of Lead Assessor and Assessment Team 5 2.3 Assessment Methodology & Agenda 6

3.0 ASSESSMENT FINDINGS 6

3.1 Description of Supply Chain Management System 6 3.2 Identified Non-conformances against RSPO SCCS Requirements, Corrective Actions Taken and Auditors Conclusions 12 3.3 Conclusion and Approval for RSPO Supply Chain Certification 17

4.0 CERTIFIED ORGANISATION’S ACKNOWLEDGEMENT OF INT ERNAL

RESPONSIBILITY 18

4.1 Date of Next Surveillance Visit 18 4.2 Acknowledgements of Internal Responsibility and Formal Sign-Off by Client 18

APPENDICES 19

Appendix 1: Details of Supply Chain Certification Certificate 19 Appendix 2: List of Abbreviations 21 Appendix 3: Observations and Opportunities for Improvement 21

RSPO Certification Assessment Report

- PT Perkebunan Nusantara III

Sei Mangke Palm Kernel Oil– North Sumatera

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1.0 SCOPE OF SUPPLY CHAIN CERTIFICATION ASSESSMENT

1.1 Executive Summary and Scope of Assessment

The operations of Sei Mangke Palm Kernel Oil Mill of PT Perkebunan Nusantara III were assessed against Module C of the RSPO Supply Chain Certification Systems (SCCS) document (November 2011). The scope of the Supply Chain Certification System assessment covers the implementation of the Mass Balance supply chain model of Sei Mangke Palm Kernel Oil Mill. This is not a multi-site certification.

The assessment was carried out on June 24, 2014 and a total of 14 non-conformities were found.

1.2 Certification Details The details of RSPO certification of Sei MangKe Pal Kernel Oil are as per the table below Table 1: Membership & RSPO Supply Chain Certificati on details of Sei Mangke Palm Kernel Oil

Refer to Appendix 1 for further details of the RSPO Supply Chain certificate.

1.3 Organisational Information / Contact Person

Contacts details of the company are as follows:

1.4. Actual production volumes and projected output s.

Table 3: Certified tonnages claimed, certified tonn ages purchased or sold, total and projected CPO and PK production from Sei Mangke Palm Kernel Oil Mill

RSPO Membership no.: 1 -0030-06-000-00 (since 14-1 2-2006)

RSPO Supply Chain Certificate no.: 824 503 14007

Date of RSPO Supply Chain certificate & validity:

2015-01-07 until 2020-01-06

Company Name: PT Perkebunan Nusantara III

Sei Mangke Palm Kernel Oil

Address: Jln. Sei Batang hari No. 2 Medan, Indonesia

Mill Location : Simalungun District , North Sumatera

Contact Person: Mr. Tio Handoko

Position: Management Representative

Telephone: +62-61-8452244

Email: [email protected]




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*Data from [period of one year starting before January to December 2013]

Table 3: Records of Certified Material Recived/ Pu rchased

Supplier RSPO Certificate Number

Product UTZ Number Volume (tonnes)

Sei Mangke Palm Oil Mill

01199996705 Palm Kernel 7,546

Aek Nabara Selatan Plam Oil Mill

18502897001 Palm Kernel 11,592

Aek Raso Palm Oil Mill

82450214003 Palm Kernel 2,765

Aek Torop Palm Oil Mill

82450214002 Palm Kernel 1,700

Table 5: Records of Palm Oil Product Sold *

Buyer RSPO Certificate

Number Product UTZ Number Volume

- - - - - Note : this is 1st certification audit , no certified product claim yet.

1.5 Summary of Previous Assessment

This is the first certification audit.

Amount (MT)

Certified tonnages sold* -

Certified tonnages purchased* 37,188.263

Actual Production* year 2013 30,738.253

Projected total output for yeah 2014 56,302.697




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2.0 ASSESSMENT PROCESS

2.1 Certification Body PT TUV Rheinland Indonesia is member of Group TÜV Rheinland Group, a global leader in independent test-ing and assessment services. The TÜV Rheinland Group was established in 1872 with offices located in over 490 locations in 62 countries on all five continents. PT TUV Rheinland Indonesia offers certification for a wide range of management systems according to established international standards including ISO 9001, ISO 14001, OHSAS 18001, SA 8000, as well as CDM Validations and Verifications. PT TUV Rheinland Indonesia’s office is located in Jakarta, Indonesia.

2.2 Qualifications of Lead Assessor and Assessment Team

Name Position Qualifications / Experience

Dian S. Soeminta Lead Auditor

Education: Bachelors Degree in Forestry - Bogor Agriculture Insti-tute. Indonesia, (1990 to 1995). Trainings attended : ISO 9001:2000 lead assessor course 1996 - Neville Clark; ISO 14001 lead assessor course - PE International; OSHAS: 2007 training, Sustainable Forest Management (SFM) - Forest Stewardship Council (FSC) system training; Chain of Custo-dy training for FSC System. RSPO lead Auditor training year 2010 by Pro Forest and Wild Asia. SCCS training by David Ogg Consult-ing. ISPO Lead Auditor training Working experience: Professional forester since 1995 to 2000. Lead Auditor for Forest Stewardship Council (FSC), Sustainable Forest Certification (SFC) and Chain of Custody (COC) Certifica-tion. Lead auditor for Environmental Management System (EMS) and Quality Management System (QMS) audits. Conducted sus-tainable forest management certification audits on FSC and Indone-sian Ecolabel Institute (Lembaga Ecolabel Indonesia - LEI) stand-ards for 20 companies, 50 COC FSC/LEI audits, and EMS and QMS audits at more than hundred companies for TUV Rheinland Indonesia. Instrumental in the preparation of TUV Rheinland Indo-nesia for Sustainable Forest Management Certification System and TUV Rheinland Malaysia for RSPO Certification. Member of Task Force for Indonesian National Interpretation (Guidance on scheme smallholder RSPO certification). Developed TUV Rheinland RSPO Gap Assessment Checklist and report template

Carol Ng Auditor

Education: Bsc. Biotechnology & Bsc. Environmental Management - Monash University.

Trainings attended: RSPO Malaysian National Interpretation Re-quirements and Certification – SIRIM; Implementation of RSPO Principles & Criteria - QA Plus; RSPO Stepwise Support Pro-gramme; 2nd Biodiversity Seminar – RSPO; Certification Body Bio-diversity Forum & Workshop – RSPO; Environmental Quality Act 1974 (DOE) and ISO9001:2008 QMS Conversion Requirements (TUV Rheinland). Working experience: Experience in implementing sustainable practices in Sime Darby plantations to comply with RSPO require-ments, performing RSPO internal audits and implementing sustain-ability projects. Prepared training materials and conducted several RSPO requirements trainings and workshops to plantation man-agement teams (2008




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2.3 Assessment Methodology & Agenda The supply chain certification assessment was conducted between June 24, 2014 as per the assessment pro-gram below. The assessment was carried out in accordance with PT TUV Rheinland Indonesia’s RSPO audit procedure as well as the RSPO Supply Chain Certification Systems document. An on-site assessment was conducted and the assessment team carried out field and document assessments of compliance to RSPO Supply Chain Certification System requirements. The company proposed the correction and corrective action for all identified non conformities raised to the cer-tification body 30 daysafter the closing meeting. Verification of closure of non-conformances was conducted 30 months after the closing meeting of the main assessment. The certification assessment agenda is as explained below. Main Assessment Agenda.

3.0 ASSESSMENT FINDINGS

3.1 Description of Supply Chain Management System

Sei Mangke Plam Kernel Oil is a mill undermill PT Perkebunan Nusantara, located in Simalungun District wich has two main activities i.e, refinery and fractionation palm oil and palm kernel. The mill was commis-sioned in year 2012 with a production capacity of 60 tonnes/day. Sei Mangke Palm Kernel Oil Mill material uses palm kernel which are supplied by palm oil mill under PT Perkebunan Nusantara III Group and purchases from other suppliers from non PTPN III Palm Oil Mill. All production process was conducted internally; company has outsourcing process for material transporta-tion and final product transport. The company has been implementing quality management system ISO 9001:2008 and has been providing complete standard operation manual and standard operation procedure for all strategic operation units for daily operation activities as seen on document company’s quality manual and other standard operation procedure documents.

During certification audit it was verified that company has been supplied certified material (palm kernel) from certified supplier i.e. Sei Mangke Palm Kernel Oil. The company plan to sell certified product to one local cus-tomer i.e. PT Unilever Indonesia there are found some non conformtities regarding company’s implementa-tion SCC system according RSPO SCC standard November 2011 Module C (Mass Balance).

Date Location/ Main sites

Main activities

June 24, 2014 Sei Mangke Palm Kernel Oil Mill

- Opening Meeting - Presentation of Company Profile - Clarification for system changes. - Mass Balance records verification - Factory tour: - Incoming material - Weight bridge - Procurement - Procurement (Continue) - Outsourcing Control - Product Processing - Finsihed Good Packing - Sales and Export Document - Preparing for cosing meeting - Cloisng meeting




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The following is a description of the findings pertaining to the company’s supply chain management system according to the RSPO SCCS requirements, including status of compliance of the company and their out-sourced third parties to RSPO SCCS requirements:

Section 1: General Chain of Custody System Requirem ents for the Supply Chain

1. Applicability of the General Chain of Custody Sy stem Requirements for the supply chain

Findings: Management Sei Mangke Palm Kernel Oil Mill still has commitment to implement RSPO SCCS. The company’s supply chain management system still integrated with the implementation of quality man-agement systems at ISO 9001:2008. However there is no written statement regarding selected supply chain model to be implemented on the company’s management system. Mass Balance system ( Module C) due to the nature of incoming material from company’s supplier are Mass Balance and company’s production facilities are not sufficient to implement others supply chain model. To support implementaion of RSPO supply chain, company has revised their quality manual to in-clude all RSPO SCCS requirements. Relevant procedure was revised such as incoming material pro-cedure to indicate certified material and non certified material. Certified material handling and stor-age. Several standard opeartion procedure has been estabelished such as: - Incoming certified material - Certified product processing - Critical control point procedures - Certified and non certifief prd - Certified product dscharge - Training procedure - Non conforming product - etc. Sei Mangke Palm Kernel mill is RSPO member under PT Perkebunan Nusantara III with membership number 1 -0030-06-000-00 (since 14-12-2006) Compliance status: Non Compliance SCCS Non-conformance No. SCCS-2014-01 of 14: Sei mangke Palm kernel oil mill still not defined selected supply chain model.

2. Documented procedures

Findings: There is a set of existing standard operation procedures for palm kernel mill operation, since incoming material until outgoing product,. The mill has identified all processes needed. Their application, inter-action and sequence are also determined. Following company’s implementation of quality manage-ment system ISO 9001:2008. However , during plant tour it was found company has no clear mecha-nism for several activities related certified material and certified product such as: Recieving incoming of certified and non-certified palm kernel still not arranged in the work instruction-3.03-01/35. This is raised as non conformity. There is no available formal assignment from the management related the responsible person who will responsible for the SCCS standard implementation and their compliances in PKO Mill. This is raised as non conformity. Compliance status: Non Compliance SCCS Non-conformance No. SCCS-2014-02 of 14: No available formal assignment from the management related the responsible person who will re-sponsible for the SCCS standard implementation and their compliances in PKO Mill.




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SCCS Non-conformance No. SCCS-2014-03 of 14: Receiving mechanism of certified and non-certified palm kernel still not arranged in the work instruc-tion-3.03-01/35 company has no clear mechanism to distingusing between certified and non certified material from recieving incoming certified material from road tanker to ensure that the products are verified as being RSPO certified

3. Purchasing and goods in

Findings: All incoming mateal come from PTPN III’s palm oil mill, accroding to direction from head office, Sei mangke palm Kernel Oil receive material delivery instruction, Sei Mangke Plam Kernel Oil Mill has a mechanism to receiving material, Logistic section received incoming material schedule from PTPN 3 head office ( marketing) as a basis to make materia transportation information document, information about incoming material will be distributed to Weight brigde section and Quality Assurance, PPIC and other relevant section QA or Laboratory assistant will take sample from each incoming material after palm kernel unloaded in the warehouse for quality checking. Weighing process material will be monitored by daily monitoring checking, and WB section will make report to be sent to Logistic and mill manager. Product discharge process both for certified and non certified material are same, company has no clear mechanism to distingusing between certified and non certified material from recieving incoming certified material from road tanker to ensure that the products are verified as being RSPO certified this is raised as non conformity See SCCS Non-conformance No SCCS-2014-03 of 14 (above) Company has no mechanism to ensure validity of the Supply Chain Certification of suppliers. There is also no clear information that will be responsible to certified material supplier. Furthermore the company also has no list of certified suplier/potential certified supplier that will be cooperate to pro-duce certified product. The company assigned a person to be responsible to check and ensure both quality and quantity of the certified material is as per purchase documents. The company has procedure for handling non-conformance product integrated with their quality man-agement system ISO 9001; however mechanism to handling non conformance for certified material not stll defined yet. The company has not established mechanism to inform CB immediately if there is a projected over-production. Compliance status: Non Compliance SCCS Non-conformance No. SCCS-2014-04 of 14: Control Mechanism of certified suppliers still not established SCCS Non-conformance SCCS-2014-06 of 14: No control mechanism implemented yet for the certified materials which categorised as “Non Con-formance. SCCS Non-conformance SCCS-2014-07 of 14: Certified Palm Kernel supplier list and their certificate status are not available for PKO Mill Sei Mangke

4. Outsourcing activities

Findings: Sei Mangke Palm Kernel Oil is producing palm kernel oil, from supplied PK, all production process are available on company’s facility. Company using outsourcing proces for material and finished good transportaion. Such as road tanker for palm kernel from supplier premises and palm kernel oil to Port Belawan. Storage tank and for finsihed good product delivery to local customer, however Palm Kernel transfer procedure from Palm Oil Mill to the PKO Mill which handling by sub-contractors was not available in the PKO Mill and PTPN III main office, this is raised as non conformity.




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There are 2 identified road tanker companys as company’s subcontractors. However during the audit audit it was found there is no formal contact established furthermore signed by both parties. As re-quired by RSPO SCCS if the company has outsourced process, the company has make formal con-tarct and signed by both parties, the conctract include requirement such as will not relinquish legal ownership of the product during outsoursed process, will gove certification body have access to the outsourcing contractor or operation if an audit is necessary, this is raised as non conformity. Company also has no clear information about profile of outsourcing proces, their is no information about ad-dress, PIC etc, also no work Instruction or standard operating procedures no found in Palm kernel Mill which includes the obligation to notify the certification body in case the plant gets new sub-contractor for the work process or the production of certified material. This is also raised as non conformities. Compliance status: Non Compliance SCCS Non-conformance SCCS-2014-08 of 14: Palm Kernel transfer procedure from Palm Oil Mill to the PKO Mill which handling by sub-contractors was not available in the PKO Mill and PTPN III main office. SCCS Non-conformance SCCS-2014-09 of 14: The company has an agreement with palm kernel carriage sub-contractors, but in the agreement still not available obligation carriage sub-contractors which stating that the sub-contractor is required to provide access to the Certification Body, when their operation, system and all the company infor-mation audits is necessarily needed. SCCS Non-conformance SCCS-2014-10 of 14: Work Instruction or Standard Operating Procedures were not found in Palm Oil Mill which includes the obligation to notify the certification body in case the plant gets new sub-contractor for the work pro-cess or the production of certified material.

5. Sales and goods out

Findings: The sales and goods out mechanism of the company are described in SOP of sales and product dis-charge procedure of sales of palm oil. Logistic section received product delivery schedule and copy of sales order from marketing as basic information to make delivery Instruction, for road tanker agent. For local destination, logistic section making local shipping schedule to be informed to QA, WB , PPIC and other relevant section. After product loading finished, there will be weighing product at Weigh bridge section, while for export though road tanker will be transfered to Belawan port before transfer to vessel. After finished weighing, road tanker will bring WB ticket and the copy of WB ticket will be sent to lo-gistic section. Logistic make Post Good Issue base on quantity received by customer. Several records issued for outgoing product depend on the transfer method used such as: - Vessel: Delivery order (Surat Jalan); Bill of lading (B/L); Certificate of Analysis; Shipment Loading

Detail (SLD), Weight Bridge Ticket - Truck: Sales Order (SO); Delivery Order (DO), Certificate of Analisys, Weight Bridge Ticket, de-

livery Note. However during certification audit, all relevant sales documents issued for RSPO certified oil palm products delivered, e.g. delivery notes, certificate of analisys, sales order documents is not include information about applicable supply chain Mass Balance as selected supply chain model, also weightbridge ticket for outgoing product has no space to inform about buyer’s address. Compliance status: Non Compliance SCCS Non-conformance SCCS-2014-05 of 14: There is no mechanism for certified product sales activity.




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SCCS Non-conformance SCCS-2014-11 of 14: There is no statement to ensure that the certified products sales document are meet with the SCCS standard section 5.5.1, namely: - Buyer name and address - Seller name and address - Delivery Date - Date Issued of the document - Description of the product including its supply chain model choice - The number of delivered products - Other Information related to its shipping document. - SCCS Certificate number

6. Registration

Findings: Sei Mangke Palm Oil Mill is producing palm kernel oil from supplied PK, during certification audit the audit company has not established SOP for registration every transaction to RSPO IT System as re-quired by RSPO-SCC standard and the control of IT system. This will be verify duirng next audit. Compliance status: Complince with observation

7. Training

Findings: Sei Mangke Palm Oil Mill has training procedure following training procedure from PTPN 3 Head Of-fice and annual training program for their employee, such as training program for year 2014, However during interview to some workers in WB area and also company has assign new assistant laboratory and mill manager, there all has no sufficient knowledge about implementation of RSPO SCC. Accord-ing to explaination there have not training related RSPO SCCS. This is raised as non conformity. Compliance status: Non Compliance SCCS Non-conformance SCCS-2014-12 of 14: No evidence found for responsible person training who will be responsible of the SCCS implementa-tion in Sei Mangke PKO Mill

8. Claims

Findings: The company has not established mechanism for making claims certified product according RSPO communication and claims, however company not claim the end product directly, only require in rele-vant certified product, due to company only produce intermediate product not finsihed good consumer product. Compliance status: No applicable for this certific ation audit.

Section 2: Modular Requirements: Module C – Mass Ba lance

C.1. Processing




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Findings: The company’s produce palm oil kernel oil from palm kernel product. The material supplied from all PTPN 3 palm oil mill both certified and non certified, Sei Mangke Palm Kernel Oil also purchase palm kernel from outsider palm oil mill. Consider to the nature of material supplied to Sei Mangke Palm Kernel Oil, the company will implement Mass Balance as selected supply chain model. However as explained on the section 1 above, the company still not define in written regarding selected supply Chain Model. The mill control they production process though daily production report. PPIC depart-ment has responsibility to control the process. The company has no conduct simulation for tracebility system to tracking certified product can be traced back to only certified material. The organization has established a mechanism for control and maintenance of the data and docu-ment used in production process following PTPN 3 Quality Manual and Standard Operation Manual, in which the retention time for all records and reports already defined for at least for five (5) years. The storage and maintainance of documents is the responsibility of the respective departments. The mill has not established format to record and balance all receipts of RSPO certified material and non certified material and deliveries of RSPO certified product on the real time base. This is raised as non conformity. Compliance status: Non Compliance See NCR No. SCCS-2014-14 of 14:

C.2. Record keeping

Findings: The company has established a mechanism for control and maintenance of the data and document used in production process as stated on the company’s Quality Manual and records control proce-dure, however the retention time for all records and reports for certified material and product has not fulfil RPSO SCCS requirement has stored at least for five (5) years. The storage and maintainance of documents is the responsibility of the respective departments. Thi is raised as non conformity Compliance status: Non Compliance SCCS Non-conformance SCCS-2014-13 of 14: The organization has not established a records retention time for at least 5 years period according to the SCCS requirements.

C.3. Mass balancing system

Findings: Sei Mangke Palm Oil Mill has not established a meachism to ensure that the quantity of physical certi-fied Palm Kernel mass balance material inputs and outputs (volume or weight) at the physical site are monitored on a real-time basis. Including information for all volumes of palm kernel that are delivered are deducted from the material accounting system according to actual daily conversion ratios. Since there is no assigned Officer to monitor daily report regarding Internal material accounting sys-tem. The mechanis to inform the certification body if facing condition to make sell short also not established yet, even as commited by the mill manager during the audit, it must be informed to the CB through email and or telpon conversation. The mill has format to inform all incoming palm kernel from their supplier however there is no clear information for the certification status. This is raised as non conformity. Compliance status: SCCS Non-conformance SCCS-2014-14 of 14: Formal standard form which will use to record of received, processed and sold out materials was not available in Sei Mangke PKO Mill.




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3.2 Identified Non-conformances against RSPO SCCS R equirements, Corrective Actions Taken and Auditors Conclusions

SCCS Non-conformance SCCS-2014-01 of 14: Sei Mangke Palm Kernel Oil Mill still not defined selected supply chain model. Correction: Revise of Directors SPKTS letter Number: 3.03 / SKPTS / 01/2012 dated January 2, 2012 related to the revision on the Determination on Supply Chain Certification System (SCCS) in PT. PTPN III. mill Corrective Action: Define a suitable PKSMK supply-chain model in the Mass Balance based. Auditor Conclusions: Closed. Date of closure: July, 2014 Verification result: Sei Mangke Palm Oil Mill provides revised dorector decree letter no. 3.03/sjpts/01/2014 dated July 11, 2014. The company determines applicable RSPO Supply chain system for each palm oil mill including palm kernel oil mill under PT Perkebunan Nusantara 3. Sei Mangke Palm Kernel Mill will implement mass balance system. SCCS Non-conformance SCCS-2014-02 of 14: No available formal assignment from the management related the responsible person who will respon-sible for the SCCS standard implementation and their compliances in PKO Mill. Correction: Revise of Directors SPKTS letter number 3.12/SKPTS/16/ 2011 dated 30 June 2011 related to the SCCS implementation in PT. Perkebunan Nusantara III. Corrective Action: Assign a responsible person in SCCS implementation in PKSMK according to directors SPKTS letter. Auditor Conclusions: Closed Date of closure: July 2014 Company provide director decree letter no. 3.08/SKPTS/57/2014 dated July 1st, 2014 regarding Asig-ment from management related responsible person for SCCS implementation, i.e. head of production process as stated on attachment of decree letter. SCCS Non-conformance SCCS-2014-03 of 14: Receiving mechanism of certified and non-certified palm kernel still not arranged in the work instruc-tion-3.03-01/35 Correction: Revise Work Instruction -3.03-03/04 for 5.2 to include rules mechanisms of recieving the certified and non-certified palm kernels.




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Corrective Action: To establish receiving mechanisms of certified and non-certified palm kernel in the operation Work In-struction Auditor Conclusions: closed Date of closure: July 2014 Verification result : The company provides revised Work Instruction 3-03-01/35. Mechanism for receiving certified and non certified has been included on the working instruction section 5.2. SCCS Non-conformance SCCS-2014-04 of 14: Control Mechanism of certified suppliers still not established Correction: Revise the work instruction -3.03-03/04 point 5.1 to include the control acceptance of certified suppli-er’s mechanism. Corrective Action: Establish a procedure to control of certified and non-certified palm kernel segregation system from the

Palm Oil Mill. Auditor Conclusions:Closed Date of closure: July 2014 Verification result : The company provides revised Work Instruction 3-03-01/5. Mechanism for receiving certified and non certified has been included on the working instruction section 5.1. SCCS Non-conformance SCCS-2014-05 of 14: There is no mechanism for certified product sales activity. Correction: Revise the work instruction-3.07-08 and -3.07-07 to include the certified product sales system mecha-nism Corrective Action: Establish a certified product (Palm Kernel Oil) sales system mechanism. Auditor Conclusions: Closed. Date of closure: July 2014 The company provides revised Work Instruction 3.07.07 and 3-07-08. Mechanism for certified and non certified product sales activity. SCCS Non-conformance SCCS-2014-06 of 14: No control mechanism established yet for the certified materials which categorised as “Non Conform-ance




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Correction: Revise work instruction-3.03-11 to include mechanism to control non-conformances of product volume and the quality (CSPK & Non CSPK). Corrective Action: To adjust the supply process to the available requirements accordingly. Auditor Conclusions: Closed Date of closure: July 2014 Verification result: Company provide new standard operation procedure regarding control of non conforming product as determined on PK-3.03-11 section 7. SCCS Non-conformance SCCS-2014-07 of 14: Certified Palm Kernel supplier list and their certificate status are not available for PKO Mill Sei Mangke Correction: List the certified and non-certified Palm Kernel supplier and their actual certification status process change Corrective Action: Accordingly adjust the supplier status change to the available requirements. Auditor Conclusions: Closed. Date of closure: July 2014 The company provide list of certified supplier, there is 4 certified supplier under PTPN 3 i.e. Sei Mangke Palm Oil Mill, Aek Nabara Palm Oil Mill, Aek Torop Palm Oil Mill and Aer Roso Palm Oil Mi. SCCS Non-conformance SCCS-2014-08 of 14: Palm Kernel transfer procedure from Palm Oil Mill to the PKO Mill which handling by sub-contractors was not available in the PKO Mill and PTPN III main office. Correction: Revise the work instruction-3.03-08 point 7.1 to include the rules of Palm Kernel transfers from Palm Oil Mill to the Kernel Mill. Corrective Action: Establish a procedure of Palm Kernel Transfer from Palm Oil Mill to the Kernel Mill. Auditor Conclusions: Closed. Date of closure: July 2014 The company provide revise SOP regarding handling certified material and certified product by out-source company, as determine completely on working instruction no. 3.03.-08 SCCS Non-conformance SCCS-2014-09 of 14: The company has an agreement with palm kernel carriage sub-contractors, but in the agreement still




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not available obligation carriage sub-contractors which stating that the sub-contractor is required to provide access to the Certification Body, when their operation, system and all the company information audits is necessarily needed. Correction: Provide a contract agreement to the palm kernel carriage sub-contractors which stating that the sub-contractor is required to provide access to the Certification Body, when their operation, system and all the company information audits is necessarily needed Corrective Action: To Include the rules of sub-contractor’s obligation to provide the access to certification body when the audit is needed to their operation, system and all of their company information in the work instruction -3.03-08 point7.18 note number 3. Auditor Conclusions: Closed. Date of closure: July 2014 The statement regarding obligation carriage sub-contractors which stating that the sub-contractor is required to provide access to the Certification Body, when their operation, system and all the company information audits is necessarily needed, as determine completely on working instruction no. 3.03.-08 section 7.18., SCCS Non-conformance SCCS-2014-10 of 14: Work Instruction or Standard Operating Procedures no found in Palm Oil Mill which includes the obliga-tion to notify the certification body in case the plant gets new sub-contractor for the work process or the production of certified material. Correction: Revise work instructio-3.03-03 / 04 points 5.6 to include rules of the obligation to notify the Certification body in the event of stagnation in a certain period of time when there will be a local sales to the con-tractor / new buyers to the RSPO / SCCS certified or not certified palm kernel stock in Palm Oil Mill which planned to be processed in PKSMK. Corrective Action: Establish procedures which governing the obligation to notify the Certification Body when there is a new contractor in the work process or production system. Auditor Conclusions: Closed. Date of closure: July 2014 Verification result: The statement regarding obligation to notify the certification body in case the plant gets new sub-contractor for the work process or the production of certified material has been included on working in-struction no. 3.03.-08 section and 3.03 -08 section part 5.1

SCCS Non-conformance SCCS-2014-11 of 14: There is no available formal mechanism to ensure that the certified products sales document are meet with the SCCS standard section 5.5.1. namely: - Buyer name and address - Seller name and address - Delivery Date - Date Issued of the document - Description of the product including its supply chain model choice - The number of delivered products - Other Information related to its shipping document. - SCCS Certificate number




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Correction: Revise work instruction-3.03-03/04 point 5.7 related to the ensuring mechanism related to the compli-ances of certified products sales documentation. Corrective Action: Establish a work instruction mechanism to ensure the sales documentation of certified products has been comply with the SCCS standard requirements Auditor Conclusions: Closed. Date of closure: July 2014 Verification result: The company provide revised working instruction IK 3.03-3/4, all required information for delivery doc-uments has been established on the working instruction section 5.7.7. SCCS Non-conformance SCCS-2014-12 of 14: No objective evidence found for responsible person training who will be responsible of the SCCS im-plementation in Sei Mangke PKO Mill. Correction: To conduct a formal training for related responsible person in SCCS implementation and propose a SCCS training program in the organisation. Corrective Action: Monitor the training program implementation execution during the targeted periods. Auditor Conclusions: Closed Date of closure: July 2014 Verification result. Company provide disposision letter from Top Management to all mill head relating planning to conduct SCCS training, dated July 10, 2014. Training will be conducted on October 13 to 15 as stated on con-firmation from training provider. SCCS Non-conformance SCCS-2014-13 of 14: The organization has not established a records retention time according to the SCCS requirements. Correction: Establish 5 years’ time retention for each operational activities record in PKSMK in the PTPN III. Files Handling documents system. Corrective Action: To propose the revision of PTPN III Files Handling documents system which is includes for each avail-able notes in PKSMK. Auditor Conclusions: Closed Date of closure: July 2014 Verification result: Company provide matrixs of retention time for records keeping, as stated on the matrixs all records re-lated certified product will keep maintained at least 5 years.




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SCCS Non-conformance SCCS-2014-14 of 14: Formal standard form which will use to record of received, processed and sold out materials was not available in Sei Mangke PKO Mill. Correction: Establish a formal standard form which will use to record of received, processed and sold out materials Corrective Action: Setting up an online standard formal form which will fill according to actual process of received, pro-cessed and sold out materials. Auditor Conclusions: Closed Verification result: The company provide sample of summary of incoming material received, processed and sold, as stat-ed on “ Log Book RekapitulasiPenerimaan dan pengolahan inti sawit”

3.3 Conclusion and Approval for RSPO Supply Chain C ertification The audit team has confirmed through the audit process that Sei Mangke Palm Kernel Mill has established and maintains an effective system to ensure compliance with the RSPO Supply Chain Certification System re-quirements. PT TUV Rheinland Indonesia therefore approves the Supply Chain certification of this organization.




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4.0 CERTIFIED ORGANISATION’S ACKNOWLEDGEMENT OF INT ERNAL RESPONSIBILITY

4.1 Date of Next Surveillance Visit

The next surveillance visit is planned for July 2015

4.2 Acknowledgements of Internal Responsibility and Formal Sign-Off by Client

It is acknowledged that the assessment visit was carried out as described in this report and we accept the as-sessment findings and report content. Signed on behalf of Sei Mangke Palm Oil Mill. Tio Handoko Head of Management System & Sustainability Date:

Signed on behalf of PT TUV Rheinland Indonesia Dian S. Soeminta Lead Auditor Date: September 01, 2014




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APPENDICES

Appendix 1: Details of Supply Chain Certification C ertificate




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Appendix 2: List of Abbreviations CPO Crude Palm Oil P&C Principles & Criteria PKO Palm Kernel Oil SCCS Supply Chain Certification System

Appendix 3: Observations and Opportunities for Impr ovement

roundtable on sustainable palm oil · · 2018-02-043.1 description of supply chain management...

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