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Roundtable on Sustainable Palm Oil Public Summary Report

Report no.: 18501994

Certification assessment against the

RSPO Principles & Criteria Indonesia National Interpretation year 2008

PT Swakarsa Sinarsentosa

Head Office : Jl. Rawa Gelam V Kav. OR/3B, Kawasan Industry Pulo Gadung Jakarta

Site Office: Benhes Village, Muara Wahau Sub District, Kutai Timur District east Kalimantan, Indonesia

Date of assessment: 25 to 30 June 2012

Report prepared by: Dian S. Soeminta

(RSPO Lead Auditor)

Certification decision by: Manfred Herbert Lottig

(COO TUV Rheinland Malaysia)

Certification Body: TUV Rheinland Malaysia Sdn. Bhd.

No. 26 – 32, Jalan Perindustrian USJ 1/6, Taman Perindustrian USJ 1,

47600 Subang Jaya, Selangor Darul Ehsan, Malaysia.

Tel: +6 03 8024 2400 Fax: +6 03 8023 1505

www.tuv.com

TABLE OF CONTENTS

1.0 SCOPE OF CERTIFICATION ASSESSMENT ....................................................... 3

1.1 National Interpretation Used 3 1.2 Type of Assessment 3 1.3 Location and Maps 3 1.4 Description of Supply Base 4 1.5 Dates of Plantings and Replanting Cycles 6 1.6 Other Achievements and Certifications Held 7 1.7 Area of Plantation (Total, Planted and Mature) 7 1.8 Organisational Information / Contact Person 7 1.9 Description of Company History, Socioeconomy & Environment 8 1.10 Time Bound Plan for Other Management Units 8 1.11 Compliance to Rules for Partial Certification 9 1.12 Plan for certification of associated smallholders 9 1.13 Approximate Tonnages Certified 9 1.14 Recommendation for Certification 9 1.15 Date of Certificate Issued and Scope of Certificate 9

2.0 ASSESSMENT PROCESS .................................................................................. 10

2.1 Certification Body 10 2.2 Qualifications of Lead Assessor and Assessment Team 10 2.3 Assessment Methodology 11 2.4 Stakeholder Consultation and Stakeholders Contacted 13 2.5 Date of Next Surveillance Visit 13

3.0 ASSESSMENT FINDINGS ................................................................................... 14

3.1 Summary of Findings 14 3.2 Identified Non-conformances, Corrective Actions Taken and Auditors Conclusions 35 3.3 Noteworthy Positive Components 37 3.4 Issues Raised by Stakeholders and Findings Pertaining to Issues 38 3.5 Acknowledgements of Internal Responsibility and Formal Sign-Off by Client 39

APPENDICES ............................................................................................................ 40

Appendix 1: Details of Certificate 40 Appendix 2: Certification Audit Plan 41 Appendix 3: List of Abbreviations 44 Appendix 4: List of Stakeholders Interviewed and Contacted 45 Appendix 5: Observations and Opportunities for Improvement 46

RSPO Certification Assessment Report

PT Swakarsa Sinarsentosa Palm Oil Mill – East Kalimantan

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QMF: RSPO-007a-11(Rev.0)

1.0 SCOPE OF CERTIFICATION ASSESSMENT

1.1 National Interpretation Used

The operations of the palm oil mill(s) and its supply base of FFB were assessed against Indonesia National In-terpretation year 2008 of the RSPO Principles & Criteria.

1.2 Type of Assessment

The main certification assessment was carried out on 1 mill and 4 estates under PT Swakarsa Sinarsentosa

1.3 Location and Maps

Table 1: GPS locations for all estates and mills included in certification assessment

Name of mill / estate Location

GPS locations

Latitude Longitude

Palm Oil Mil 1 (PKS 1) PT Swakarsa Sinarsentosa

Muara Wahau Village, Muara Wahau subdistrict, Berau district, East Kalimantan, Indonesia

01 07’ 22.0” N 116 51’ 07.0” E

Jabdan 1 Estate Muara Wahau Village, Muara Wahau subdistrict, Berau district, East Kalimantan, Indonesia

01 11’ 03.9” N 116 49’ 35.8” E

Jabdan 2 Estate Muara Wahau Village, Muara Wahau subdistrict, Berau district, East Kalimantan, Indonesia

01 06’45.4” N 116 50’ 08.6” E

Long Jenew 1 Es-tate


01 11’ 14.5” N 116 46’ 56.5” E



01 07’ 46.3” N 116 43’ 44.9” E

Kantor Besar Ber-sama (KBB)


01 10’ 57.9” N 116 49’ 55.7” E



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Figure 1: PT Swakarsa Sinarsentosa Plantation in East Kalimantan Indonesia.

Figure 2: Map of Estate in PT Swakarsa Sinarsentosa

1.4 Description of Supply Base

Table 2: FFB Supply Information for PT Swakarsa Sinarsentosa Palm Oil Mill year 2011

FFB Contributors FFB supplied

Swakarsa SS

POM



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Tonnes %

Company owned estates:

Jabdan 1 Estate 83,181.490

Jabdan 2 Estate 125,203.250

Long Jenew 1 Estate 55,323.360

Long Jenew 2 Estate 2 90,340.440

Sub Total 354,048.540 87.40

Smallholders / outgrowers:

Partnership program 3,364.650

SSWJ (Semoga Sawit Wahau Jaya) Cooperation 35,152.972

Tepian Jaya Cooperation 2,912.458

Sub Total 41,430.080 10.23

Other Companies

PT Darma Agrotama Nusantara 509.620

PT Darma Intisawit Nugraha 4,777.220

PT Dewata Sawit Nusantara 35.020

PT Karya Prima Agus Sejahtera (KPS) 2,399.230

PT Gunta Samba 1,418.890

PT Gunta Samba Jaya 485.860

Sub Total 9,625.840 2.37

TOTAL 405,104.460 100



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Table 3: CPO and PK production from PT Swakarsa Sinarsentosa in year 2011

1.5 Dates of Plantings and Replanting Cycles

The company follows a replanting cycle of 25 years. Information on the dates of plantings are as per the table below. Table 4: Age and year of plantings of company estates supplying to PT Swakarsa Sinarsentosa

Age & Year of Plant-ings

Oil palm planted area at each estate(ha)

Jabdan 1 Jabdan 2 Long Jenew 1 Long Jenew 2

2008-2012 - - - -

2003-2007 780 - 4,327 1,342

1998-2002 2,277 357 - 2,043

1993-1997 - 4,138 - -

TOTAL 3,057 4,495 4,327 3,385

For next 5 years, the company still has not defined a replanting program as the oil palm plantation is still in pro-ductive age. The oldest plantation was planted in year 1996 (16 years old).

FFB Contributor FFB supplied in 2011

( Tonnes ) OER

CPO (Tonnes)

KER PK

(Tonnes)

Company owned estates:

24.01

3.28

Jabdan 1 Estate 83,181.490 19,971.876 2,728.353

Jabdan 2 Estate 125,203.250 30,061.300 4,106.667

Long Jenew 1 Estate 55,323.360 13,283.139 1,814.606

Long Jenew 2 Estate 2 90,340.440 21,690.740 2,963.166

Sub Total 354,048.540 85,007.054 11,612.792

Smallholders / outgrowers:

Partnership program 3,364.650 807.852 110.361 SSWJ (Semoga Sawit Wahau Jaya) Cooperation

35,152.972 8,440.229 1,153.017

Tepian Jaya Cooperation 2,912.458 699.281 95.529

Sub Total 41,430.080 9,947.362 1,358.907

Other Companies PT Darma Agrotama Nusan-tara

509.620 122.360 16.716

PT Darma Intisawit Nugraha 4,777.220 1,147.011 156.693

PT Dewata Sawit Nusantara 35.020 8.408 1.149 PT Karya Prima Agus Se-jahtera (KPS)

2,399.230 576.055 78.695

PT Gunta Samba 1,418.890 340.675 46.540

PT Gunta Samba Jaya 485.860 116.655 15.936

Sub Total 9,625.840 2,311.164 315.728

TOTAL 405,104.460 97,265.581 13,287.426



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1.6 Other Achievements and Certifications Held

Table 5: Details of other certifications or awards held by PT Swakarsa Sinarsentosa

Name of mill / es-tate

Certification Standard / Award achieved

Certification Body /

Awarder

Date Achieved

PT Swakarsa Sinarsentosa Mill & Plantation

QMS ISO 9001: 2008 SGS Year 2010

PT Swakarsa Sinarsentosa Mill & Plantation

EMS ISO 14001: 2009 SGS Year 2010

PT Swakarsa Sinarsentosa Mill

Environment Perfor-mance in Green Status (Proper Hijau)

Ministry of En-vironmental In-donesia

Year 2012

1.7 Area of Plantation (Total, Planted and Mature)

Table 6: Oil Palm Planted Area Summary, FFB Production and Average yield/ha for PT Swakarsa Sinarsentosa Plantation

Estate Name Total area

(ha)

Oil Palm Planted area

(ha)

Mature (Production)

area (ha)

Immature (Non-production)

area (ha)

FFB Production

(tonnes)

Average yield/ ha

Jabdan 1 3,508 3,057 3,057 - 87,910 28.76

Jabdan 2 5,121 4,517 4,495 22 125,203 27.85

Long Jenew 1 4,446 4,327 4,327 - 117,549 27.17

Long Jenew 2 3,775 3,381 3,340 41 93,048 27.86

TOTAL 16,850 15,282 15,219 63 423,710 27.84

Table 7: Land use data for PT Swakarsa Sinarsentosa

Estate Name Total area (ha)

Oil Palm

Planted Area (ha)

HCV/

Potential HCV

areas* (ha)

Land used for other purposes (ha)

Office & Housing

mill Other pur-poses **

Jabdan 1 3,508 3,057 346 53 - -

Jabdan 2 5,121 4,517 189 31 161 190

Long Jenew 1 4,446 4,327 71 33 - -

Long Jenew 2 3,775 3,381 47 31 - 223

TOTAL 16,850 15,282 653 148 161 413 Note * Some HCV area are include within the production area.

** Other purposes area consists of fruits garden, effluent pond and conservation area

1.8 Organisational Information / Contact Person

Contacts details of the company are as follows:



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1.9 Description of Company History, Socio-economy & Environment

PT Swakarsa Sinarsentosa is oil palm plantation and palm oil mill which has status as multinational in-vestment company. The area was previously owned by a logging company. Former company’s land status was natural forest production. Company obtain first location permit for oil palm plantation through letter 17/PKT/BPN-16.3/Um-15/XI-1994 from Kutai District Land Authority with total area 30,000 ha and renewed with letter No. 30/PKT/BPN 16.3/UM-30/XI-1995 dated 01 November 1995 from East Kalimantan Governor the area reduce into 17, 500 ha. The company obtained a permit form ministry of forestry Indonesia to change the land status from natural forest production status into plantation area through decree letter of the Ministry of Forestry No. 174/Menhut-VII/1996 dated February 9, 1996 and letter no. 152/Kpts-II/1997 which allow that 17,500ha be con-verted into oil palm plantation. The first planting was started on November 1996. The area has a permit is 16,850 ha based on letter of certifi-cate HGU No. 135/HGU/BPN/1997 dated October 28, 1997. All of the area had been planted since December 2004 and until now total 15,264 ha was planted by palm oil with production capacity is 410,846 ton per year.

PT Swakarsa Sinarsentosa is located in Muara Wahau District, Kutai Timur Regency, East Kalimantan Prov-ince, about 10 km from the South of capital city of Muara Wahau District. The company general information is stated on the table below.

Table 8: General Information on Estates under PT Swakarsa Sinarsentosa

No. Description PT Swakarsa Sinarsentosa plantation and Palm Oil Mill

1. Location of administrative offices Government

Administration office Kutai Timur District

Plantation Administration office

Kutai Timur

2 Surrounding stakeholders (at estate boundaries) North Forest Consession Permit (’Hak Pengusahaan Hutan ’or HPH) Gunung Gajah

Timber East Wahau River, Miau Baru Village, Muara WahauSouth Wahau River, Hak Pengusahaan Hutan (Forest concesion company) PT

Dharma Satya Nusantara, Telen RiverWest Telen River, Kenden River

3. Total Area (ha) 16,850 ha 4. Land Condition Sloping to undulating 5. Soil type Red and Yellow Podzolic 6. Hydrology Telen River 7. Climate Wet tropic 8. Topography Flat 3-15%

1.10 Time Bound Plan for Other Management Units

PT Swakarsa is single company with single RSPO membership. This is not required to PT Swakarsa Sinarsen-tosa to make time bound plan towards RSPO P & C compliance.

Company Name: PT Swakarsa Sinarsentosa

RSPO Membership no. 1-0064-08-000-00

Address: Jl. Rawa Gelam V Kav. OR/3B, Kawasan Industry Pulo Gadung Jakarta

Benhes Village, Muara Wahau Sub District, Kutai Timur District east Ka-limantan, Indonesia

Contact Person: Mr. Tjahjono Notosuroto

Telephone: +62 21 4618135 Fax: 62-21-4606942

Email: [email protected]



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1.11 Compliance to Rules for Partial Certification

PT Swakarsa is single company with single RSPO membership. This is not required to PT Swakarsa Sinarsen-tosa to make time bound plan towards RSPO P & C compliance.

1.12 Plan for certification of associated smallholders

As seen from data in Table 3, the mill receives 10.23 % supply of FFB from smallholders, of which 3 of these are smallholders associated with the mill.

The mill has not developed a plan for certification of associated smallholders, this is will be verified during next surveillance audit.

1.13 Approximate Tonnages Certified

The approximate tonnages certified, based on production in 2011 from company owned estates only, are as fol-lows:

Crude Palm Oil (CPO) : 85,007 tonnes Palm Kernel (PK) : 11,613 tonnes

1.14 Recommendation for Certification

PT Swakarsa Sinarsentosa Palm Oil Mill has established and maintains an effective system to ensure compli-ance with the RSPO principles and criteria. The audit team has confirmed through the audit process that the company’s practices complies with, adequately maintains and implements the requirements of the RSPO Prin-ciples and Criteria Indonesian National Interpretation. TUV Rheinland Malaysia recommends that PT Swakarsa Sinarsentosa be approved as a producer of RSPO Certified Sustainable Palm Oil.

1.15 Date of Certificate Issued and Scope of Certificate

The scope of the certificate covers production of palm oil from PT Swakarsa Sinarsentosa and its supply base, which includes Jabdan 1 estate, Jabdan 2 estate, Long Jenau 1 estate and Long Jenau 2 estate. The date of certificate issued is 10 January 2013. Further details of the certificate are as per Appendix 1.



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2.0 ASSESSMENT PROCESS

2.1 Certification Body

TUV Rheinland Malaysia Sdn. Bhd. is member of Group TÜV Rheinland Group, a global leader in independent testing 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. TUV Rheinland Malaysia 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. TUV Rheinland Malaysia’s office is lo-cated in Subang Jaya, Malaysia.

2.2 Qualifications of Lead Assessor and Assessment Team

Name Position Qualifications / Experience

Dian S. Soeminta

Lead Au-ditor

Education: Bachelors Degree in Forestry - Bogor Agriculture Institute. Indo-nesia, (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 Coun-cil (FSC) system training; Chain of Custody training for FSC System. RSPO lead Auditor training year 2010 by Pro Forest and Wild Asia. SCCS training by David Ogg Consulting. ISPO Lead Auditor training Working experience: Professional forester since 1995 to 2000. Lead Audi-tor for Forest Stewardship Council (FSC), Sustainable Forest Certification (SFC) and Chain of Custody (COC) Certification. Lead auditor for Environ-mental Management System (EMS) and Quality Management System (QMS) audits. Conducted sustainable forest management certification audits on FSC and Indonesian Ecolabel Institute (Lembaga Ecolabel Indonesia - LEI) standards for 20 companies, 50 COC FSC/LEI audits, and EMS and QMS audits at more than hundred companies for TUV Rheinland Indonesia. In-strumental in the preparation of TUV Rheinland Indonesia for Sustainable Forest Management Certification System and TUV Rheinland Malaysia for RSPO Certification. Member of Task Force for Indonesian National Interpre-tation (Guidance on scheme smallholder RSPO certification). Developed TUV Rheinland RSPO Gap Assessment Checklist and report template.

Fadli Auditor

Education: Bachelor of Anthropology, Department of Anthropology - Univer-sity of Indonesia, Jakarta. Trainings attended: Sustainable Natural Production Forest Management (Pengelolaan Hutan Alam Produksi Lestari - PHAPL) assessor training (May 2003); Forest Plantation Management (August 2003) training - Indonesian Ecolabel Institute (LEI), Forest Management and Agriculture Auditor Train-ing; ISO 9001:2008, ISO 14000:2004, OHSAS 18001:2007 trainings - Smartwood/Rainforest Alliance; SA8000 training - SA International; RSPO Lead Auditor Training -Indonesian Palm Oil Commission. Working experience: Experienced as lecturer for D3 Tourism program, Uni-versity of Indonesia. Social aspect auditor of PT. TUV International Indonesia for Sustainable Forest Management and RSPO Principles & Criteria. Re-searcher of stakeholder mapping for CSR Indonesia.

Aswan Ha-sibuan

Auditor

Education: Bachelor of Agriculture, University of North Sumatera. Trainings attended: ISO 9000:2000 Series Auditor / Lead Auditor Training - PE International (Jakarta), IEMA Advanced EMS Auditor (IEMA / EARA ISO 14001) Auditor / Lead Auditor Training Course - PE International (Ja-karta), OHSAS 18001 Lead Auditor Training Course - PE International (Ja-karta). Working experience: Experienced in Quality Control from 1994-2004. Au-ditor for Quality Management System since 2004 – present. Auditor for En-vironmental Management System since 2005 – present. Auditor for OHSAS 18001 since 2007 - present. Conducted over 100 Quality Management



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Name Position Qualifications / Experience

System audits since 2004, over 50 Environmental Management System audits since 2006 , and over 25 OHSAS audits since 2007

Hendra Fachrurozi

Auditor

Education: Bachelors Degree in Forestry - Bogor Agriculture Institute. Indo-nesia, (1995 to 2000). Trainings attended: ISO 9001 : 2008 lead auditor course - Neville Clark (2011), ISO 14001 : 2004 lead auditor course - TUV Rheinland Indonesia (2011), SMK3 auditor course – Department of manpower and transmigration of the Republic of Indonesia (2009), Sustainable Forest Management (SFM) – Forestry Education and Training Centre (2010), Timber Legality of Verifica-tion - Forestry Education and Training Centre (2010), RSPO Lead Auditor Course – Pro Forest & Wild Asia (2011). Working experience: Experienced as Junior Consultant at PT Surveyor In-donesia (2002 s/d 2010), assessor for SFM –mandatory (PHPL & PHTL), assessor for industry performance assessment (IPHHK)-mandatory, auditor for Timber Legality of Verification, auditor for SMK3, auditor for QMS and EMS at TUV Rheinland Indonesia and auditor for RSPO at TUV Rheinland Indonesia.

M. Fundy Cholis

Trainee Auditor

Education: Bachelor Degree in Animal Science – Brawijaya University. In-donesia, (2002 to 2006); Master Degree in Natural Resources and Environ-mental Management – Bogor Agriculture University (2007 to 2009). Training attended: Environmental Impact Management (EIA) (2009), Eco-logical Risk Assessment (ERA) (2009), Internal Quality Audit Training for Quality Management System (2011), High Conservation Value Training (HCV) (2011). Working experience: Experienced at EIA Consultant as Environmental Ex-pert at PT Centra Multicon Jaya (April 2010 to November 2010), Environmen-tal Health and Safety Senior Staff (EHS Senior Staff) at Wilmar International Plantation, As a internal auditor for RSPO, ISCC, HCV for all Member Com-pany of Wilmar International Plantation for 7 (seven) Companies in Sumatera Region (2011 to 2012), Preparation Management Plant of HCV and SIA for New Planting Procedure PT AIP Bangko (Member of Wilmar) (2011), Prepara-tion of HCV Detail Action Plan at PT BCP (Member of Wilmar) (2011), and Auditor for RSPO and ISPO at TUV Rheinland Indonesia.

2.3 Assessment Methodology

The certification assessment was conducted from 25 to 30 June 2012 as per the assessment program below. The assessment was carried out in accordance with TUV Rheinland Malaysia’s RSPO audit procedure as well as the RSPO Certification Systems document. During assessment, the qualified TUV Rheinland assessors used the RSPO standard as endorsed for the country in which the assessment took place and recorded their findings. Due to the location and proximity of the estates, combined with common management systems, it was possible to carry out both field and document assessments of all estates and the mill within the time frame without com-promising the integrity of the assessment in anyway. All 4 estates and 1 mill were visited and the assessment team carried out field and document assessments of compliance to all the RSPO principles and criteria. Common systems were identified and specific evidence was recorded for individual estates. Interviews were conducted at all estates and the mill. The company proposed the correction and corrective action for all identified non conformities raised to the certi-fication body before 30 days after the closing meeting. Verification of implementation of corrective actions for minor non-conformities will be verified during the next surveillance audit. The certification assessment agenda is as explained below. Main Assessment Agenda:



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Date Location/ Main

sites Main activities

25 June 2012 Muara Wahau Stakeholder consultation26 June 2012 Main office Opening Meeting

Document review27 June 2012 Main Office

Jabdan 1 estate Long Jenew 1 estate

Interview with workers regarding minimum Wage, workers welfare is-sue, worker union activities, Interview with woman workers and workers family regarding Sexual harassment, violence issue equal opportunity Visiting housing Area in Jabdan 1, and Long Jenew 1 and Field visit: Spraying, Plantation maintenance, beneficial plant , Ripari-an river Interview with workers, Contractor Housing and FFB transporter con-tractor, workers in Daycare Plantation maintenance, such as weeding, spraying and IPM. Visit to Diabeq, Benhes, Muara Wahau village Checking boundary stone number 594, 596, 270 & 283), Telen River, Kenden Besar River, conservation area (block VI & VII), implementa-tion of PPE, and peat area.

28 June 2012 PT Swakarsa Mill Jabdan 2 estate Long Jenew 2 estate

SSCS audit Water Management FFB reception, FFB grading, CPO production, CPO dispatch, docu-ment of transportation CPO mill to bulking, document of transportation bulking to end user, invoice, trade document. PT Swakarsa Sinarsentosa mill and Bulking station in Labanan . Storage tank CPO Housing Area in Jabdan 2, and Long Jenew 2 Field visit: Spraying, Plantation maintenance, visiting beneficial plant, Riparian river. Checking Marginal Soil, Slope area etc Checking boundary stone near Telen River estate.

29 June 2012 PT Swakarsa Mill Plant tour to the whole area of POM to checking the implementation of PPE, OHS and waste handling. Interview worker, contractors and suppliers Checking of actual condition of chemical storage and hazardous waste storage Interview personnel in charge of identifying and checking compliance to all relevant legal and other requirements such as those associated with environment, labor, OHS, and mill regulations. Checking related document procedures and records. Interview personnel (operational head) associated with the SOP and implementation and also monitoring activities. Interview personnel responsible for OHS and First Aid monitoring Interview personnel responsible for training of OHS and First Aid Interview doctor responsible for conducting regular health checks for operator Checking of documents related to above Site visit to mill housing area

30 June 2012 PT Swakarsa head Office

Closing meeting



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2.4 Stakeholder Consultation and Stakeholders Contacted The stakeholder consultation involved both external and internal stakeholders. External stakeholders were noti-fied to make comments on the certification assessment by placing an invitation to comment on the RSPO web-site. Stakeholders included those immediately linked with the operation of the company such employees, out-growers, the local government, NGO’s, trade and labour unions and local communities. Stakeholder consultation took place in the form of meetings and interviews. Meetings with stakeholders were held to seek their views on the performance of the company with respect to the sustainability practices outlined in the RSPO Principles & Criteria, and to comment on aspects where improvements could be made. Meetings with local communities were held at their respective premises within and near the company’s area. A stake-holder consultation meeting was also held on Muara Wahau sub District head Office on June 26, 2012. Letters inviting individual stakeholders to the stakeholder consultation meeting were prepared and sent to the individual stakeholders, while electronic mail and telephone calls were made to arrange the meetings. In all the interviews and meeting, the objectives of the RSPO and the purpose of the assessment was clarified at the outset followed by an evaluation of the relationship between the stakeholders and the company before discussion proceeded to obtain the stakeholders feedback on the company’s compliance to different aspects of the RSPO Principles & Criteria. Although several stakeholders were not familiar with RSPO but they agreed with its objective and expressed their willingness to collaborate in the promotion of sustainable palm oil in North Sumatera province. In all interviews and meeting, the assessment team did not restrict discussion of both the positive and negative aspects of operations conducted by PT Swakarsa Sinarsentosa estates and mill. The stakeholder consultation meeting held with stakeholders during the audit was extensive and productive, with an attendance of more than 20 of attendees. This was followed by site inspections, including visits to the local communities, interviews with land claimants and contractors, and inspections of worker amenities and in-frastructure. All stakeholder issues raised were recorded and forwarded to the management for their written re-sponse, and this is summarized in Section 3.4. The list of stakeholders that attended the stakeholder consulta-tion meeting and stakeholders interviewed during the assessment is included as Appendix 4.

2.5 Date of Next Surveillance Visit The next surveillance visit is planned for 10 November 2013.



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3.0 ASSESSMENT FINDINGS

3.1 Summary of Findings

Since the company became a member of RSPO in 2008, company’s management has committed to comply with all RSPO principles and criteria in all the company operations activities. As implementation of its commit-ment, the company applied to TUV Rheinland Malaysia to conduct the assessment of their compliance to all RSPO requirements for PT Swakarsa Sinarsentosa plantation which supply to their palm oil mill. A pre - as-sessment was conducted in April 04 to 07, 2011 and the company has worked hard to address all identified non conformities raised during the pre-assessment. There is evidence of a considerable effort on behalf of all staff in the preparation of manuals, standard operat-ing procedures and other documents not only to conform to RSPO requirements, but for the company’s im-provement of process effectiveness and efficiency. The stakeholder consultation meeting held before main audit was an extensive and productive meeting attend-ed by more than 20 persons including local community representatives, suppliers, local government personnel, NGOs, and FFB transporters. The stakeholder consultation was follows by site inspections of infrastructure and social amenities. The management responded to all of the issues raised and this is summarized in section 3.4. In general, objective evidence was obtained from each of PT Swakarsa Sinarsentosa estates as well as its mill. The results from the assessment of each site within the certification unit have been aggregated to provide an assessment of overall conformance of the company’s to each criterion. During the certification assessment there were found 4 non conformities against RSPO requirements, all non-conformities were assigned against Minor Compliance Indicators. 13 observations or opportunities for im-provement were identified. Further explanation of the non-conformities raised and corrective actions taken by the company are provided in Section 3.2. The observations & opportunities for improvement are listed in Ap-pendix 5. The following is a summary of findings made for the criteria listed in the RSPO Principles & Criteria Indonesia National Interpretation year 2008.

Criterion 1.1: Oil palm growers and millers provide adequate information to other stakeholders on environmental, social and legal issues relevant to RSPO Criteria, in appropriate languages & forms to allow for effective participation in decision making.

Findings: Requests for information made by stakeholders at the palm oil mill and the estates were recorded in one document together with any other requests or letters received from stakeholders, as required by the company’s procedure SPO_AGR-STD-01-R04 dated January 20, 2012 and SOP SOP-AGR-STD-08-RO3 regarding external communication & complaints handling procedure issued on April 23, 2012. As seen from the company’s log book, there are some records of request of information with corre-sponding response from the company, as follows: - Incoming letter No. 560/036/PMD/II/2012 from Sub District office Muara Wahau, Kutai Timur District

regarding request of information about PT Swakarsa Sinarsentosa’s employees. - Letter from farmer group from Nehas Liang Bing village No. 01/KLT-BI/NLB/IV/2012 regarding field

checking area dated 4 June 2012. - Incoming letter no. 071/LAB-D/KT/PADW/MW/III/2011 from communities group namely “Lembaga

Adat Besar Dayak Kabupaten Kutai Timur” (name of Local Community Customary Organization) Muara Wahau regarding effluent pond management, dated March 01, 2011.

- Letter no. 001/KKI/WB/IV/2011 from ‘’Koperasi Serba usaha “Karya Indah” (name of local coopera-tive) regarding request of information about FFB grading result dated April 07, 2011. There are records of company’s responses to incoming letter from Muara Wahau Sub District Head through letter No. 0041/SWA-CSR-WHU/II/2012 dated February 11, 2012 regarding confirmation of company to prepare employee data as requested. Letter no. 0116/SWA-CSR-WHU/IV/2012 regarding first data submission and letter no. 0195/SWA-CSR-WHU/V/2012 regarding 2nd data submission. Response from management PT Swakarsa Sinarsentosa regarding request of information from Nehas Liang Bing village through letter no. 0237/SW-CSR-WHU/VI/2012 and letter no. 0319/CSR/VI/2012 re-garding re-measuring land of Kelompok Tani Kita Bersaudara (name of farmers’ party). There is a re-sponse for letter from local community customary organization “Lembaga Adat Besar Dayak Kabupat-



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en Kutai Timur” by letter no. 0028/SWA-POMH/V/2011 dated May 18, 2011. It is mentioned in company’s document namely “time provision of document storage (Ketentuan Waktu Penyimpanan Dokumen)” (FM-STD-18-R00”, that the company shall maintained all records of requests for information and responses made by the company for at least 3 years. Evidence so far shows that company maintains these records in accordance with this procedure. Response from Swakarsa for lo-cal cooperative name is “Koperasi Karya Indah” by letter no 0024/SWA-POM/IV/2011. Compliance status: Full Compliance

Criterion 1.2: Management documents are publicly available, except where this is prevented by commercial confidentiality or where disclosure of information would result in negative envi-ronmental or social outcomes.

Findings: As evidence that company makes their management documents publicly available to stakeholder, company has communicated to local communities during meeting on dated June 01, 2012 attended by representative from 6 villages which are Benhes village, Desa Diak Lay village, Deabeq village, Nehas Liah Bing village, Mura Wahau village, Miau Baru Village. The company’s documents that can be accessed by the public as stated in the company’s procedure are 19 categorized documents such as the company’s vision and mission, Environmental Management Document, environmental management and monitoring reports (‘laporan RKL/RPL’), the company an-nual reports, company policies, copies of licenses, monthly mill and estates operational reports, area statements, soil maps, hydrology maps, topography maps, maps of estate and village boundaries, tra-ditional rights areas, estate and mill procedures, company organization structure, high conservation value (HCV) reports and management plans, social impact assessment (SIA) report, CSR planning and report including company Community Development program, etc. However company still not inform to other stakeholders such as supplier, local institution, NGO and other relevant stakeholders regarding documents that can be accessed, even management informed that all documents will be attached on the company’s website. This is as company improvement to ensure that all relevant stakeholders know about documents publicly available to stakeholder. The company has a procedure to maintain records of information requested and responded to for a minimum of 3 years. Compliance status: Compliance with observation.

Criterion 2.1: There is compliance with all applicable local, national and ratified international laws and regulations.

Findings: The company provides a mechanism for evaluation of implementation and compliance to applicable le-gal requirements in a standard operation procedure i.e. SOP-AGR-LGL-02-R02 dated May 01, 2012. There are also include mechanism to evaluation of compliance to regulations related to the company's plantation, legislation related to the environment, legislation relating to labour, and regulations related to health and safety. The SOP states that the identification and evaluation is to be carried out 2 (two) times a year and conducted by estate and mill staff, to be assisted by the EHS estate and mill also le-gal officer from Head Office. The company maintains a list of all applicable legal requirements relating to environmental, occupa-tional safety and health, the company plantations, and employment as well as records of internal com-pliance checks to legal requirements as seen on “Ringkasan Peraturan Perundangan” (Summary of Legal Regulation) document No. DK-STD-01-Rxx Some evidence of compliance with relevant legal requirements as seen on latest legal requirements register i.e. "Ringkasan Peraturan Perundangan” January 2012 No. DK-STD-01-Rxxx was sighted - covering for both mill & estates under PT Swakarsa Sinarsentosa. For example: 1. Water Surface Permit “Izin air permukaan” issued by Bupati Kutai Timur, Surat Keputusan Bupati



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Kutai Timur Nomor 545/K.175/HK/III/2011 about permit of use the surface water and groundwater, valid for 2 years from the date issued March 22, 2011.

2. Mill operator’s license to operate heavy machinery, license no. 3443/LPK.M-SKE/II/2012, valid until 9 March 2017.

3. Decree Number 566/373/P2K3/Was about P2K3 “Comittee of Occupational Health Safety” appli-cable for February 24, 2012 issued by the Department of Labour Officer and Transmigration of the Kutai Timur Regency.

4. Decree of Kutai Timur Regent Number. 658/K.973/2010 about permit of the utilization of waste water is valid for 2 years starting from year 2010. The blocks where land application is allowed are E26-30, F27-33, G32-43, H32-34 with total area for land aplication is 293.2 ha and PT Swakarsa Sinarsentosa carries out land application in accordance with the permit.

Further, in the estate, other evidence that the company complies with relevant legal requirements is implementation of tax payments in 2011, which was paid on May 11, 2011 through the Bank of East Kalimantan. The amount of tax payments based on detail calculation was issued by Tax Services Head Office of Pratama Bontang. And then the company was payment of social security for employees peri-od on May, 2012 with examples as follows:

1. for 499 workers, class III, Jabdan1 estate 2. for 814 workers Jabdan 2 estate 3. for 615 workers Long Jenew 1 estate 4. for 517 workers Long Jenew 2 estate

In palm oil mill, the evidence to compliance for regulation i.e. Permit from Department of Labour and Transmigration of Kutai Timur Regency for the equipment plant are available and still valid and was tested regularly according to the regulations such as: boiler permits for two units, sterilizer permits for four units, permits for pressure vessel 1 unit, compressor permits 5 units, and etc. Other evidence that the company was comply with the regulations, i.e. workers salary. Based on de-cree of Governor of East Kalimantan number: 561/K.761/2011 about the minimum salary for 2011, and followed up with decree of director number 001/DIR/JKT/2012 on January 4, 2012 about the change of minimum salary Rp 1,400,000 per month. There is list of salary showed that company has paid workers salary appropriate with those regulations. Further evidence of efforts made to comply with changes in the regulations is: Note of up date for new regulation 1st semester in 2012 to Standarization Departement Head on June 18, 2012, then followed with internal memo No. 001/LGL/VI/2012 about update to regulation PP No. 27 Tahun 2012 then disseminated to all department based on work area, the evidence of dissemination is a receipt note which is signed by personnel who received the memo as seen on list of receiver dated June 20, 2012. Compliance status: Non Compliance NCR No. 2012-01 of 04 The company has a mechanism for updating applicable legal and other requirements, as recorded on “list of regulation” however there is some applicable regulations still not listed on the updated “list of regulation” such as: i) Local regulation Kutai Timur District No.6 year 2005 regarding Plantation Business Permit in

Kutai Timur District ii) Decree letter from head of District “Kutai Timur” No. 261 year 2002 regarding Guidance for

Plantation business Permit in Kutai Timur District

Criterion 2.2: The right to use the land can be demonstrated, and is not legitimately contested by local communities with demonstrable rights.

Findings: PT Swakarsa Sinarsentosa Mill is located inside the plantation HGU area. The mill has “Letter of Plan-tation Business Registered” namely SPUP or “Surat Pendaftaran Usaha Perkebunan” no. 199/menhutbun-VII/2000 for total areal 16,850 ha including 1 palm oil mill with an initial capacity of 60 ton FFB/hour. The mill has a “Permanent Business License” (Izin Usaha Tetap) No. 135/HGU/BPN/1997 from Ministry of Plantation. The company also received a revised Plantation Busi-



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ness Permit (Izin Usaha Perkebunan/IUP) No. 188.4.45/038/Eko.1-III/2012 dated March 21, 2012 for PT Swakarsa Sinarsentosa Plantation for total area 16,850 ha and revised mill capacity of 90 ton/hour in Muara Wahau Sub District, Kutai Timur District. PT Swakarsa Sinarsentosa plantation has HGU permit No. 135/HGU/BPN/1997 from National Land Agency and certificate HGU No. 1 Benhes and Beq Diah Lay village dated October 28, 1997 with total area of 16,850 ha valid for 27 years until year 2033. Former company’s land status was natural forest production. The company obtain first location permit for oil palm plantation through letter 17/PKT/BPN-16.3/Um-15/XI-1994 from Kutai District Land Authority with total area 30,000 ha and renewed with letter No. 30/PKT/BPN 16.3/UM-30/XI-1995 dated 01 November 1995 from East Kalimantan Governor the area reduce into 17,500 ha. The company obtain a permit from the Ministry of Forestry, Indonesia to change the land status from natural forest production status into plantation area through decree letter of the Ministry of Forestry No. 174/Menhut-VII/1996 dated February 9, 1996 and letter no. 152/Kpts-II/1997 which allow that 17,500 ha was converted into oil palm plantation. According to the company’s revised IUP letter there is overlapping between PT Swakarsa Sinarsentosa Plantation areas and plan-ning for coal mining area that will be provided to several companies with total overlapping area 1,770 ha located at Long Jenew II and Jabdan II estate. The company has been proposed to the National Land Agency (BPN) to release that area exclude from HGU certificate and made planning to redesign company’s plantation area considering coal mining area. Until the audit time the process for revised and redesign has not finished, company still waiting for revised HGU. Some legal boundaries are clearly demarcated and visibly maintained on the ground as seen on the filed for stone with BPN No. 470 at Division 8 Block G.35; No.594 close to Telen River, etc. The com-pany has reconstruction program for boundary stone as conducted on January to February 2012 with BPN as recorded on report no.076/SWA/V/2012. To ensure that every boundary stones are clearly demarcated and visibly maintained company has boundary stone maintenance program to be imple-mented every six months, The company has evidence that there are proof of resolution or progress towards resolution by conflict resolution processes which is accepted by all affected parties from 3 (three) villages (Dabeq, Diak Lay, and Ben Heas). There is statement from PT Swakarsa management which stated that conflict resolu-tion with the three villages (Dabeq, Diak Lay, and Ben Heas) was resolved on February 8, 2011, with agreement by all parties. There are 8 points of claim by three villages, such as: 1. Customary land compensation for three communities 2. Return of smallholders certificate 3. Material compensation for making employee housing 4. Material compensation for making assistant housing 5. CPO retribution of villagers 6. Letter of agreement “SPK” for company’s contribution to local communities regarding 2nd palm oil

mill construction 7. Palm oil mill 2 status was build in ancestral sites of Wehea people 8. Material compensation used for construction of mill 1 and mill 2 There area has a note for handover compensation namely “tali asih” (ex-gratia compensation) and two units of CPO truck for villages of Dabeq. In the note was stated that the handover has been done with amount is Rp666,667,000 and two units of CPO truck through credit mechanism (determined on agreement between PT Swakarsa with three villages on March 14, 2011). The process of handover was recorded on letter number 01.Forum 64.08.02.2006./BHS/MW/KUTIM. It was signed by Chairman of villager organization, community leaders, PT Swakarsa Sinarsentosa, Head of Wahau, Police Head of Wahau, Danramil (military commander) of Wahau. Similar agreement was found for Diak Lay Village and Ben Heas village with the same value and was conducted in the same date. There are has evidence of receipt of funds transfer “tali asih” for three village and handover two units CPO truck also for three village, such as:

1. Dabeq village; two units CPO truck number FG 235 JL, KT 8224 RD, KT 8243 RD 2. Diak Lay village; two units CPO truck number FG 235 JL, KT 8238 RD, KT 8246 RD 3. Ben Heas village; two units CPO truck number FG 235 JL, KT 8242 D, KT 8241 RD

There are has evidence of land acquisition through statement from the village dates on June 28, 1997 that the local community fully support the presence PT Swakarsa Sinarsentosa to build palm oil planta-tions in their region. Location area has been measured by the relevant authorities, and was no problem with the boundary of land community, because:



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1. Land communities have been removed from the companies area 2. Companies location for plantations has no problem with boundary, customary rights, and etc

The statement of agreement was signed by Head of Wahau village, Ben Heas village, Diak Lay village, Dabeq village, Nehes Liah Bing village, and Head of Wahau Subdistrict. The mechanism of conflict resolution procedures/complaints/claim as well as communication and con-sultation procedures was agree by community on June 7, 2012, and the copy has been given to them. Compliance status: Full Compliance

Criterion 2.3: Use of land for oil palm does not diminish the legal rights, or customary rights, of other users, without their free, prior and informed consent.

Findings: There is no identified customary right in the HGU area of PT Swakarsa Sinarsentosa in a letter or statement by Head of Village on June 28, 1998. It was confirmed by local communities surrounding the company’s area. Compliance status: Full Compliance

Criterion 3.1: There is an implemented management plan that aims to achieve long-term eco-nomic and financial viability.

Findings :

The company has a management plan for a 3 years period i.e. projection for 2013 to 2015 with infor-mation on this document consisting of company activities such as profit and loss information from Total Revenue and Total Operating Cost, including information about gross operating cost, profit/loss before tax and profit and loss after tax. The company has a financial schedule for yearly budget. Information in the document consist of general routine operational activities such as plantation maintenance, harvesting, fertilizer, investment plans such as enrichment planting (planting of various plant species to enhance bio-diversity), mill activities such as FFB processed, projected oil extraction rate (OER) and kernel extraction rate (KER), projected crude palm oil (CPO) and palm kernel (PK) production, CSR programmes and envi-ronmental monitoring, HCV management plan and other activities to fulfill RSPO requirements. The com-pany has also developed a yearly plan as seen for year 2012, containing information on the budget for each activity (including activities for environmental management programmes and all CSR related ex-penses, legal compliance and RSPO P & C compliance) and revenue from company's production includ-ing all company's liabilities. The amount of profit estimated to be achieved each year was clearly calculat-ed, and all information is clearly explained in PT Swakarsa Sinarsentosa budget plan from 2013 to 2015.

Monitoring of actual expenditure versus the budget is done regularly, i.e. three monthly. In the current year, if the assumptions are planned for this year based on the assumption last year can be changed ac-cording to the current conditions.

In a cash flow projection document, there is also a plan for 3-year cash inflow from sales of CPO and palm kernel sales. The main points of cash outflow is the overall production cost of the estate and the mill include the cost of estate maintenance (sustainability cost), as well as the combination of costs associat-ed with environmental and social monitoring activities.

Since year 2009 was the first year in which the company earned profit because the past years were use for investment and maintenance. Documentation of cost projection for estates and mill are integrated, and the projected financial feasibility of company for next 3 years based from the current FFB price can be seen from these documents.

The company implements a replanting cycle every 25 years, and still not make planning for a replanting activities will begin after the oldest plantation enter to 25 years old. The first replanting program will con-ducted for planted year 1996 area in Jabdan 2 estate. Compliance status: Full Compliance



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Criterion 4.1: Operating procedures are appropriately documented and consistently implement-ed and monitored.

Findings: The company has List of Work Instruction “instruksi kerja” for estate activities. The work instruction co-vers all estate activities such as pre-development and planning, nursery practices, land clearing and preparation, establishment and maintenance of leguminous cover crops, oil palm planting density and pattern, and maintenance, harvesting, pest and disease management, replanting, and mulching. Work instruction or procedures that are available include the following:

1. IK-AGR-OLP-01-Rxx Land Clearing without burning activity 2. IK-AGR-OLP-02-Rxx Nursery 3. IK-AGR-OLP-03-Rxx Establishment and maintanance of leguminous cover crops 4. IK-AGR-OLP-04-Rxx Planting 5. IK-AGR-OLP-05-Rxx Propagation of Mucuna bracteata 6. IK-AGR-OLP-06-Rxx Palm oil insertion 7. IK-AGR-OLP-11-Rxx Mulching of EFB 8. IK-AGR-OLP-13-Rxx Early detection of pests and desease 9. IK-AGR-OLP-14-Rxx Pest and desease control 10. IK-AGR-OLP-23-Rxx Harvesting 11. IK-AGR-STD-02-R01 Protection of riparian buffer zone 12. IK-AGR-OLP-24-Rxx Harvest and transportation, etc.

Work instruction or procedure that available for mill, such as: 1. IK-AGR-PRO-01/R00 Reception of FFB 2. IK-AGR-LAB-13/R00 Controlling of Process 3. SOP-AGR-POM-02-R00 Despatch CPO and Kernel 4. IK-AGR-DSP-01/R00 Filling CPO to Storage Tank 5. IK-AGR-LAB-12/R00 Kernel Despatch 6. FM-PRO-08-R00 Daily Production Report

The company conducts monitoring for all applicable working instruction through periodic internal audits, there is a Standard Operation Procedure for internal audit SOP-AGR-STD-04-R01, including audit schedule and audit program, the schedule for every department conducted at least once every 6 months as directed by the company’s management representative. Internal audit result were recorded on non conformance (NC) FM-STD-07-R01 form as seen on Swakarsa Mill conducted on December 8, 2011, which contains details of the findings, analyzes the causes, corrective actions, target completion and verification corrective action. Evidence of audit form FM-STD-09-R01 for infrastructure Department on June 1st, 2012, was sighted and contained about the result of audit where no nonconformities were found. The records of operational results are well maintained in each estate and mill on monthly report, e.g. monthly report for this years 2012 of Jabdan 1 estate and Long Jenew 1 estate wich includes all activities. The company has the procedure SOP-AGR-SHE-03-R00 about Occupational Health and Safety. The policy and SOP is informed to all workers every morning during morning talks and was posted on bulletin board to be accessed by everyone. It is stated in the SOPs that all workers shall be use PPE’s when they work. Compliance status: Full Compliance

Criterion 4.2: Practices maintain soil fertility at, or where possible improve soil fertility to, a lev-el that ensures optimal and sustained yield.

Findings: Leaf nutrient analysis is conducted annually and fertilizer recommendations report for each respective estate are prepared based on analysis results, while visual analysis results are documented for each estate. At PT Swakarsa Sinarsentosa, leaf analysis is conducted by an external laboratory on yearly basis. The latest analysis was conducted on year 2012 by PT Nusa Pusaka Kencana Analytical & QC



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laboratory. Report for year 2012 was sighted. Each annual report includes a summary of findings and recommendations. For example, From the 2012 report for 1, it was noted that overall nutritional status in PT Swakarsa Sinarsentosa has improved in the past year, except for levels of manganese(Mg) 37.075 %. A detailed soil analysis was conducted for all PT Swakarsa Sinarsentosa estates by external consultant. The report includes a soil survey, where 8 soil series were mapped according to USDA standard such as Plinthic, kandiudults, Typic Kandiudults, Typic Kanhapluduts, Typic Fragiorthods, Aq-uic Undifluvents and Typic haplohemist. The company prepares reports on implementation of their environmental management and monitoring plan (RKL & RPL) to the government every 6 months as required by law. All estates maintain soil fertility through fertilizer applications as well as land application of EFB, and the company has specific working instructions for EFB application, which is IK-AGR-OLP-II-R00. Imple-mentation of EFB application was sighted consistently at block F-23-F24. The estate has a system to monitor whether actual fertilizer applications meet recommended fertilizer applications. It was noted for PT Swakarsa Sinarsentosa that actual applications are done in accordance with recommendations for 2011. Compliance status: Full Compliance

Criterion 4.3: Practices minimise and control erosion and degradation of soils.

Findings: The company has a detailed soil map showing gradients and all soil types within all estates prepared by an external consultant, and the last soil survey was conducted on May 2012. According to soil sur-vey result there are 8 soil types in PT Swakarsa Sinarsentosa i.e. Plinthic, Kandiudults, Typic Kan-diudults, Typic Kanhapluduts, Typic Fragiorthods, Aquic Un-difluvents and Typic haplohemist. The soil map available in plantation office. Most of soil type in PT Swakarsa Sinarsentosa is categorized as dry soil; only a small part inside estate area consists of peat soils. However this area is not opened for plantation activities, the area still re-mains as a forest patch. The position of this area already mapped on company’s soil map. As seen from the company’s contour map (topographic map), company’s area is sloping to undulating, no extremely hilly area which need specific plantation technique. However company has a manage-ment strategy for plantings on slopes above a certain limit, such as terracing, as referred to in the com-pany’s Agriculture Manual and SOP for Oil Palm year 2008, as well as SOPs for the ‘horse-shoe’ method, terracing method and silt pits. PT Swakarsa Sinarsentosa has a plan for protection of river riparian buffer zones along natural streams through felling of oil palm trees adjacent to these natural streams and replanting the buffer zone areas with hardwood tree and leguminous cover crops (LCC), as sighted in Telen River. The company has no-chemical-application-as strategy for the protection of river water polluted with agrochemical applica-tion during plantation maintenance activities, such as on the escarpment land in the riparian of Telen River. PT Swakarsa Sinarsentosa has road maintenance program for year 2012 which includes the budget for road maintenance activities for each estate, and records of actual road maintenance activities conduct-ed such as graveling, road service, and re-surfacing. The Assistant Road Superintendant is responsible for ensuring road maintenance activities are carried out according to plan. Records of actual road maintenance activities conducted showed that maintenance is regularly carried out according to plan and actual costs were above the planned budget. Up until June 2011, 271.57 km of road has been maintained. The road condition was observed to be quite good. The company has marked observation points in identified peat soil area which allocated as protected area. Total 2 observation points have been installed in all company’s estate in 2012 to monitor subsid-ence level. Since the observation point is new, the result of monitoring of peat soil subsidence still not is available. According to monitoring program, company has periodic peat soil subsidence monitoring every 6 months. Monitoring result will be recorded on form no. SHE-KSV.002.



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As a mechanism to prevent decline of water level in the peat, weirs were installed at strategic points to trap and maintain water in the estate canals at a certain level. Water levels are monitored on a daily basis in order to ensure that the water table is maintained at specific level (60 to 80 cm) from the ground surface (using measuring instrument). The water level sighted during audit time was 75cm, this is still under company’s standard. There is an internal communication letter No. 0030/R&/IV/2012 dated April 24, 2012 from regional Plantation head to plantation manager regarding recommendation for marginal soil management in PT Swakarsa Sinarsentosa such as for marginal soil in partnership program plantation area outside HGU PT Swakarsa Sinarsentosa, there is identified marginal soil i.e. rocky soil. . Compliance status: Full compliance

Criterion 4.4: Practices maintain the quality and availability of surface and ground water.

Findings: The company has identified all streams that flow inside of estate area and created a riparian buffer zone management programme. There are 2 small rivers in the area of PT Swakarsa Sinarsentosa plan-tation, i.e. Kenden River and Telen River, width of rivers ranges from 4 to 10 meters. The company has a plan for protection of river riparian buffer zones along natural streams through felling of oil palm trees adjacent to these natural streams and replanting the buffer zone areas with hardwood trees and legu-minous cover crops (LCC) such as at Telen and Kenden river riparian buffer zone, in order increase the retention time of canal water potentially contaminated with chemicals or surface run-off into main streams. Other plans such as cleaning river of the fallen timber and other debris to make smooth water flow. Some parts of the plan have been implemented, however, for cleaning river from timber still post-poned due to limited heavy equipment availability. Implementation of the plan will be observed during next surveillance audit. The company also made an SOP for protection of riparian buffer zones of wa-tercourses and wetlands, including maintaining and restoring appropriate riparian buffer zones, prohibi-tion of agrochemical application activities nearby rivers or watercourses IK-AGR-STD-02-R01. The scope working instruction includes marking the boundary for protection of riparian, informing sprayers and manurers about boundary for chemical application near riparian, installation of public information board about illegal activities at the riparian zones, planting vertiver grass and trees and allowing the ri-parian areas to be overgrown by trees. An implemented water management plan can be seen. The company has developed and implemented a documented water management plan. For supplying water at the housing area, company already de-velop water treatment in Jabdan 2 estate to produce clean water for daily consumption due to water quality for daily consumption in all company’s estate very poor which is not meet government standard for human consumption. Treated waste water is discharged for land application; it was sighted during on site visit. Noted accord-ing to the Environmental, Health and Safety (EHS) Supervisor, currently the treated waste water is 100% released for land application. Noted the nearest river to the mill is Telen River. Sighted latest lab test report for Telen in Semester 1 year 2012. Results comply with Government regu-lation (Peraturan Pemerintah) No. 82 year 2001 class II. As the water sources from the well are not fit for human consumption, the water is only used by the employees & families for bathing & washing clothes. Clean water is purchased externally for drinking purpose. Water tanks will be provided to each of the household for collection of rain water & to provide cleaner source of water. Proper bins are provided for each home, waste bins are labeled clearly ac-cording to waste types disposed such as hazardous waste bin, organic & inorganic bins. Sighted doc-umented management plan for providing cleaner source of well water for use. The company has com-mitted to increase the water facilities gradually for all housing in the coming year (year 2013), as ex-plained under CR8.1 below. Until the water treatment facilities are completed, the company will provide the water from mill water treatment, and water from mill is sufficient for all housing. Based on interview with employee and workers, said that they are not have problem with water supply because the com-



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pany was provide the every day from mill. During interview with the chemical sprayers, they have informed that a proper place for personal pro-tective equipment (PPE) washing, shower facilities etc have been provided for their use, located in eve-ry Division office. The washing area was visited & found to be adequate to address the proper handling & washing of PPE & cleaning purpose by the chemical sprayers Monitoring of effluent BOD, Monthly waste water test reports are available & sighted during the on site visit. Results achieved are found to be within the limits specified. Tests are conducted by external La-boratory i.e. PT Sucofindo Samarinda east Kalimantan. According to the ‘Izin Land Aplikasi’, Bupati Kutai Timur No. 658/K.937/2010 (Land Application Approv-al), valid for 2 years since the permit issued, the supporting attachments to the approval (‘Kewajiban & Larangan Bagi Penanggung Jawab Kegiatan Pemanfaatan Air Limbah Pabrik Pengolahan Kelapa Sawit Pada Lahan Perkebunan Kelapa Sawit PT Swakarsa Sinarsentosa’) - Monitoring of soil water at the control well during land application - land control block & ‘sumur penduduk’ (public well) - parame-ters & frequency is done as follows: Every one month - BOD / Dissolved oxygen/ pH / NO3 as N / NH3-N / Cd / Cu / Pb / Zn / Cl / SO4-2. Report to be submitted to ‘Bupati governor, Menteri Negara Lingkungan Hidup’ (Governor, Ministry of Environment) every 6 month. The monitoring records of mill water use per tonne of FFB for years 2011 were sighted. The usage ranged from 1.07 to 1.17 m3 / tonne FFB processed. Compliance status: Compliance with observations

Criterion 4.5: Pests, diseases, weeds and invasive introduced species are effectively managed using appropriate Integrated Pest Management (IPM) techniques.

Findings: The company has a planting program for beneficial plant, such as “Turnera subulata, Antigonon, etc and program for Tyto alba. Beneficial plants i.e. Turnera and Antigonon, based on observation and documentations sighted, was planted everyday for blocks/areas that were not previously planted. And program for Tyto alba was observed and just applicable in Long Jenew 2 estate based on Tyto alba barn owl boxes distribution map. Based on the work instruction IK-AGR-OLP-14-R00 to monitor levels of pest infestations, company conducted census on a sampled area as an early warning system. The SOP include such as: 1. Hand picking larva and cocoons 2. Spraying leaves with pesticide 3. Stem injection with pesticide 4. Root infusion with pesticide 5. Conservation and exploitation of natural enemies as a source of biopesticide Pest monitoring/detection and IPM activities commenced in May for year 2010. Monitoring is planned to be conducted for all blocks in the estate. The evidence pest monitoring/detection and IPM on June 25, 2012 showed in JB1 and LJ1 there is no attack. IPM training was conducted e.g. for all estate supervisors and pest conductors for JB1 and LJ1 estate. Training materials included information on types of pests, chemical control, biological control, cultural control and physical control methods, and attendance list of training on January 21, 2012. The company monitors and records pesticide usage in 2011 and 2012. In year 2011 records show that the use of all pesticides is little at 0.00034 gram/ton FFB, until May 2012 use of all pesticide is 0.000030 gram. Paraquat dicloride was used and application only 0.00004 gram/ton FFB in 2011 and no application in 2012. The data showed that paraquat dichloride has not been applied since. Compliance status: Full Compliance



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Criterion 4.6: Agrochemicals are used in a way that does not endanger health or the environ-ment. There is no prophylactic use of pesticides, except in specific situations identified in na-tional Best Practice guidelines. Where agrochemicals are used that are categorised as World Health Organisation Type 1A or 1B, or are listed by the Stockholm or Rotterdam Conventions, growers are actively seeking to identify alternatives, and this is documented.

Findings: The company only use approved and registered agrochemicals permitted by the relevant authorities, based on The Green Book of Pesticides permitted by Licensing and Investment Center for the Secre-tariat General of the Agriculture Ministry of the Republic of Indonesia in 2010, as seen on the records of chemicals used during the year 2012, including the following: 1. Agristick 2. Ally 20 WDG 3. Garlon 4. Gramoxon, was used for broadleaf weeds, woody growths, seedlings, ferns, only used until end of

2011. 5. Round up 6. Starane The use of pesticides is documented in an annual program, active ingredient used can be seen from a list of chemicals used, applied area, the amount of chemical used per hectare, as well as the frequen-cy of chemical application is documented in an annual spraying program including information on types of spraying i.e. circle spraying, Path Spraying, Selective Spot Spraying. Records of pesticide use are well documented including the active ingredients used, the applied area and use per hectare and the number of times the application. For example circle spraying, based on the IK-AGR-OLP-15-Rxx Weeding control, for oil palm trees more than 6 years old the target plan is circle and path spraying used the chemical herbicide Glyphosate+Starene with dose 480 ml/ha/rotation+48ml/ha/ rotation. Based on observed in field on June 27, 2012 in block C26, JB1, AFD 4, according to a letter request number 227/SW/JB1/04/06/2012 contains the chemical round up, Sty-rene and Agristik. The dose was used 0.34 l / ha of Round Up, +0.04 l / ha of Agristik and +0.04 l / ha of Styrene, and this is in compliance with SOP-OLP IK-AGR-15-R00 for TBM and TM. Training for all sprayers was conducted in June 2011 by supplier Sygenta where the topics trained in-cluded understanding of the herbicides used, their nature and characteristics as well as first aid treat-ment if accidentally exposed to dangerous level of agro-chemicals. Training records such as attend-ance list and photographs are well maintained at each estate office. Waste materials from agrochemicals including pesticides containers are properly disposed in accord-ance with laws and regulations. In all locations, the packaging wastes of agro-chemicals were collected and kept in the Hazardous Waste warehouse with well maintained records. The company was send the waste materials from agrochemical to CV Sumber Agung based on Decree of Governor East Kaliman-tan Number 660.1/K.514/2011 about Collecting Permit for hazardous and toxic materials include ex-farm waste (collecting all types of waste). The chemicals categorised as World Health Organisation Type 1A or 1B, or listed by the Stockholm or Rotterdam Conventions, and paraquat still used in year 2011. Gramoxone which contains paraquat is still used in 2011 with minimum dosage, but the company is no longer using paraquat in year 2012, as explained in CR4.5 above. Warning signs are placed at areas treated with highly toxic pesticides. The company has conducted medical tests for all workers spraying in PT Swakarsa Sinarsentosa, and from the result of test, was found 4 (four) person workers spraying has medium levels of cholinestrase, then the company transferred them to do manual work without risk of chemical contamination. Medical test for manuring workers are scheduled for the following year medical test program since the priority is for sprayers to undergo medical checks first. The reason from management is because spraying activi-ty has higher risk compared with manuring activities, and the working time required for spraying is more than for manuring. The company also conducts pregnancy tests and breastfeeding tests for all female sprayers every month by doctor and paramedic. Workers interviewed stated that they do not have prob-lem with their skin, respiratory or classical symptoms of toxic reaction. Because they used PPE’s com-



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pletely when they are worked and they know how to handle the chemicals when they work based on training and attend safety talks every morning before they go to work. Compliance status: Full Compliance

Criterion 4.7: An occupational health and safety plan is documented, effectively communicated and implemented.

Findings: The company has the company policy “Quality, Environmental and Occupational Health and Safety” 2010 years was signed by Direction PT Swakarsa Sinarsentosa in 1st December 2010 and has never been revised. And the company has the procedure SOP-AGR-SHE--03-R00 about Occupational Health and Safety. The policy and SOP was socialized to all workers every morning through “morning talk” and was posted on bulletin board “papan informasi” and can be accessed by anyone. The company has the committee of Occupational Health and Safety (P2K3) as responsible team for OSH activities, this team has been approved by the Departement of Labour Officer and Transmigration Kutai Timur through decree Number 566/373/P2K3/Was applicable for February 24, 2012 and still valid. The occupational health and safety committee has meeting’s program accordance with the safety and health management program at 3-monthly intervals. The meeting was attended by member of commit-tee represent from every department, all person listed on OSH committee organization structure shall attend the meeting as scheduled. There are has evidence for meetings was implemented on March 01, 2012 with evidence is attendance list and the result of the meeting was send to Department of Labour Officer and Transmigration of Kutai Timur on June 18, 2012 was accept by “Kabid. Pengawasan Ketenagakerjaan” (Head of Labour Inspection) on June 21, 2012. The OSH meeting was attended by safety committee including company’s management’ representative and head of section including mill EHS officer. Work accident insurance is provided by company to all permanent employees in the form of JAMSOSTEK (Social Security of Labour). However for non-permanent workers, the company does not provide accident insurance, only full reimbursement if there is an accident. For contracted workers, they have JAMSOSTEK form their company, based on letter of contract with PT Swakarsa Sinarsen-tosa said that the company must provide their workers JAMSOSTEK insurance. Risk analysis for health programs and work safety was done by the identification and evaluation of as-pects of environmental impact analysis and risk as recorded on name is “HIRARC” i.e. for workers working in high noise, the company provided and requires usage of PPE’s (ear plug, ear muff, safety shoes, safety helmet, glove, etc.) valid from December 31, 2011. Based on SOP-AGR-SHE-04-R00 about identification and evaluation of aspects of work risk, the risk analysis update in once year. The company has conducted audiometric tests for workers who work in high level noise areas on No-vember, 2011. From the result in general, all of workers have good hearing condition. The company reminds the workers every morning to use the required PPE during safety talks before they start work. And the company has a fixed schedule for audiometric test every once year. Training program and schedule of health and safety is available for JB1 and LJ1 estate was conducted on March – May 2012, the evidance is report of implementation socialized of health and safety and basic training of fire bridge and first aid accident for Division VI and Division II, LJ 1 estate on March 24, 2011 and April 14, 2011 for JB1 estate, the evidance such as material socialized and attendance list. Emergency response and preparedness procedure has been established in procedure SOP-SEC-AGR-02-R00 valid from May 3, 2010, where potential emergency conditions have been identified including fire in estates, mill, and housing. In the SOP states that the fire drill training conducted at least in once year. There is evidence of fire drill training such as attendance list, drill notes and was conducted on March 15 – 16, 2012 by PT Global Safety. And the company has the fire drill certified officer.



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First Aid basic training has been given to workers at the estates and mill, the training was provided by the company’s doctor and representative from Labour Officer on November 20, 2011 in Division III JB1 estate. Training records available and well documented. First aid basic training schedule is available issued by Human Resource Department and Safety Health and Environmental Department. The company has the evidence of compliance for safety and health (K3) DK-SHE-02-R00 form emergency response and first aid, i.e. map of Fire Extinguisher, first aid box, in each section, for example in emplacement of LJ1 estate, Division 1 – 7. Records of the occurrence of any work accidents are maintained and regularly reviewed by comittee of health and safety (P2K3) every 3 months. There is evidence of occupational accidents investigations recorded on form ‘FM-SHE-05-R00 Preliminary Report of Accident’, i.e. report number 002/KK-SWA//II/2012 on February 23, 2012 regarding accidents experienced by some harvesters, and report on January 6, 2012 regarding a case of infrastructure foreman falling while driving his motorcycle to go to work site. In the report included a cause analysis and corrective actions to be taken to prevent or re-duce the occurrence of the same accident. There is no record on fatal accidents occurring among company workers. Compliance status: Non Compliance NCR No. 2012-02 of 04 Regular health examination for workers in chemical warehouse which has high risk work is not provid-ed, such as a warehouse worker in Jabdan 2 estate. There is no follow up action for a medical recommendation result from doctor in which a worker was recommended to go to an Ear, Nose and Throat (ENT) specialist.

Criterion 4.8: All staff, workers, smallholders and contractors are appropriately trained.

Findings: There is a standard operation procedure for training has been established by PT Swakarsa Sinarsen-tosa as seen on SOP-AGR-HRD-05-RO2 issued on April 1, 2012. Training and coaching programs has been established annually e.g. for year 2012 as stated on docu-ment name FM-HRD-19-R00. Training and coaching involves an understanding of the oil palm planta-tions management, such as technical management of plantation maintenance (including spraying tech-nique), harvesting, post harvest (FFB transport from estates to palm oil mill) as well as training about the technical working plan, define targets to be achieved and job monitoring and evaluation. Training is also associated with the RSPO, OSH, First aid and environment. Training programs for employ-ees(recorded on FM-HRD-019-R00 rev.0) include: 1. Basic Operator Course for Operator farm tractor, Mechanic, Genset Operator 2. Basic OSH for all company’s workers level such as estate workers, supervisor, harvester, fertiliza-

tion techniques 3. Spraying techniques 4. OHS and Environment 5. Basic First Aid 6. Water Management 7. Production Control

Records of training are available such as: 1. Records of training on handling of Agrochemical conducted by Agrochemical supplier together with

Pesticide commission on June 15, 2012 attended by 175 persons including sprayers team. 2. First aid training for building contractor on December 23, 2011 3. Training related to knowledge about important aspects of oil palm plantations for better cultivation ,

dated April 8, 2011 4. Basic OSH conducted on February 14, 2012 5. Basic Electricity for electrical mechanic on February 10, 2012 6. Socialization of pesticide for new sprayer on March 27, 2012 and April 30, 2012 in estate division 1

Long Jenew 1 estate.



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Training records for each employee who invited as participants were maintained by HR department, especially for permanent staff training. Some training has evaluation to see whether the participating workers understood what they have been trained or coached by the trainer but not all training conduct evaluation especially for field workers. Evaluation the effectiveness of training result is regularly con-ducted 1-3 months after training as required in the company’s SOP for training, as seen for electrical mechanics at Jabdan 1 and 2 estates for basic electricity training on February 10, 2012, record of eval-uation on FM-HRD-17-R00. The company conducts evaluations of the effectiveness of training such as basic OSH training dated may 13, 2012 has been evaluated as required by training procedure e.g. for plantation maintenance supervisor Long Jenew I. Evidence that company uses experienced or trained contractors can be seen from records of trainings conducted for hiring contractors for maintenance and maintenance work, such as some training for contractors was carried out on December 2011, regarding basic first aid. Compliance status: Full Compliance

Criterion 5.1: Aspects of plantation and mill management, including replanting, that have envi-ronmental impacts are identified, and plans to mitigate the negative impacts and promote the pos-itive ones are made, implemented and monitored, to demonstrate continuous improvement.

Findings: The documented of environmental aspect & impact assessment has been prepared for all activities include mill activities. The levels of significance of the environmental aspects have been identified & relevant environmental objectives & targets have been established. The company has evidence of environmental monitoring plan and management plan (RKL-RPL) in first semester (January – June) and second semester (July – December) 2011. Evidence of regular reporting on progress of environmental monitoring plan and management plan is available both in the estate and mill. At the mill, regulations related to monitoring such as waste water test, air emission, hazardous waste control etc are implemented. As for the estates, the key monitoring activities conducted are hazardous waste transaction records. This is to ensure accurate inventory of the wastes are maintained. Record for legal register monitoring is well maintained at mill & plantation. The monitoring of land application every once month for the monitoring of waste water, every six (6) month for ground water, and once year for soil analysis on the land application, based on decree of Bupati Kutai Timur number 658/K.937/2010 about the utilization of waste water for land application in PT Swakarsa Sinarsentosa. There are has a plan for revision of EIA to additon of CDM project activities in the Mill. Evidence by the letter of agreement PT Swakarsa Sinarsentosa with PT Multi Jaya Prakasa number 025/DIR-ND/SWA/JKT/I/12 about the revised preparation document of EIA and statement of contract letter number 01/PERNY/MPJ/III/2012, on March 20, 2012. Compliance status: Full Compliance

Criterion 5.2: The status of rare, threatened or endangered species (ERTs) and high conserva-tion value habitats, if any, that exist in the plantation or that could be affected by plantation or mill management, shall be identified and their conservation taken into account in management plans and operations.

Findings: Identification of HCVs has been done through appropriate consultation process by Daemeter Consult-ant, as sighted from their HCV report dated November 2011. Result or the content of HCVs in Swak-arsa Sinarsentosa area has been published to all worker and community.



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As of November 2011, based on HCV report, several protected species have been found in PT Swak-arsa Sinarsentosa area especially in conservation zones, including the following species: there are 53 birds species from 27 families such as Bucheros rhinoceros which categorized as an endangered spe-cies in East Kalimantan according to CITES, there are 21 mammal species, such as Pangolin (Manis javanica), Honey Bear (Helarctos malayanus), slow loris (Nycticebus coucang), pigtail macaque (Macaca nemestrina). There are 353 species of flora from 78 families, with dominant species from Eupgobiaceae, Verbenaceae, Rhizophoraceae and Moraceae. 5 dominant species i.e. macaranga gi-ganteae, Combretocarpus rotundus, Hopea griffiii, there are 10 species categorized as endangered species according to CITES and the Ministry of Forestry. From the HCV assessment report it was stated that 3 types of HCVs were identified in the PT Swak-arsa Sinarsentosa, i.e. HCV 1, HCV 3, and HCV 4.1 (riparian river). Identified HCV 1 areas (Forest ar-eas containing globally, regionally or nationally significant concentrations of biodiversity values) include HCV 1.2 and 1.3 areas due to identification of many wildlife species of protected and endangered sta-tus as explained above spread throughout PT Swakarsa Sinarsentosa area. Total overlaid HCV area in PT Swakarsa Sinarsentosa plantation is 654 ha. An outline of management plan for HCVs was established by Daemeter Consultant. Based on this, a HCV management plan for all identified HCV areas in PT Swakarsa Sinarsentosa, Jabdan 1 and 2 es-tate, and Long Jenew 1 and 2 estate has been established by PT Swakarsa Sinarsentosa HCV team and this is documented in a HCV Monitoring and Action Plan. The document describes the activities planned for each identified HCV, total area to be managed and periodic monitoring activities for each identified HCV. The document was just recently completed, so there were no monitoring records avail-able at time of the assessment. The company also made a specific standard operation procedure to protect wild life as determined in “SOP to protect HCV 4.1 riparian river stated on IK_AGR-STD-02-R00. Company has action plan to protect existing wildlife in plantation and its surrounding areas. All monitoring result will be recorded on wildlife monitoring records. This form is also used to record activi-ties of illegal fishing, hunting and other illegal activities that found during patrols. Monitoring of HCVs conducted by HCV team but all workers and community are required to inform the management if they know of activities related to HCV area destruction, or hunting and removal of protected flora and fauna. To prevent inappropriate hunting and collecting activities within their area, the company established a mechanism for iIlegal fishing and hunting as stated on memorandum letter No. 0011/SHE/IV/11 and 010, and company also made sign boards in front of HCV area and has periodic patrolling pro-grammes. PT Swakarsa Sinarsentosa Plantation has assigned a conservation team in each estate to be respon-sible for handling all planned activities regarding environmental conservation and they will be assisted by several estate officers in carrying out their daily activities. All team members were trained on man-agement and monitoring of all HCVs, and the training was conducted by Tropenbosch consultant in Yogyakarta year 2011. Compliance status: Full Compliance

Criterion 5.3: Waste is reduced, recycled, re-used and disposed of in an environmentally and socially responsible manner

Findings: All waste and pollutions sources are identified and documented. The company established standard operating procedures for all kinds of waste SOP-AGR-SHE-02-Rxx. This SOP was also displayed the mechanism waste management plan for organic and anorganic waste include the hazardous waste and waste storage area. The SOP was explained that the organic and inorganic waste must be separated. So that the company informed this to all wokers in the office and in the housing area. After waste is separated, the officer brought to the landfill separately. For hazardous waste, was saved in the storage area. The company has a permit for hazardous waste storage issued by Decree of Kutai Timur Regent Number 658.31/K.632/2011. The decree is valid for 3 years from October 13, 2011. PT Swakarsa Sinarsentosa was send the hazardous waste to licensed collector, name is CV Sumber



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Agung. Evidenced was available based on manifest number UB 0000730, which is a record that hazardous wastes were delivered on June 13, 2012 with vehicle number KT 8697 BK for total of 15 drums (6 drum for contaminated rags and oil filters, 2 drums of paint container, 8 drums of fertilizer container, 3 drums of chemical container) and 154 pieces (17 pieces of cartridge, 23 pieces of neon lamps, 80 pieces of contaminated aprons, 34 containers of expired chemical monocrotos), and 22 drums of used oil, based on evidence manifest number UB 0000729. The medical waste from clinic in the estate was send to Pupuk Kaltim Hospital based on letter of agreement number 87/DIR-ARF/SWA/JKT/IX/11 117/RS PKT/PKS-LK/IX/2011. CV Simber Agung is a hazardous licenced collector by decree of Govenor of East Kalimantan number 660.1/K.514/2011 valid for 5 years starting letter issued on August 16, 2011. Based on above of decree, CV Sumber Agung is allowed to collect various types of hazardous materials resulting from estate and mill activities such as used batteries, oil filters, metal waste, medical waste, office waste, chemical contaminant waste, chemical container, etc. Compliance status: Full Compliance

Criterion 5.4: Efficiency of energy use and use of renewable energy is maximized.

Findings: The company was recorded the usage of fossil fuels started in early 2011. Records of monitoring re-newable energy use and its efficiency analysis (energy/ton CPO, or energy/ton palm product), sighted monthly record for monitoring of electricity usage for year 2011 & 2012 until May, found the usage is within 0.3362 – 0.5225 Kwh / ton FFB. Sighted also the usage of shell & fiber record for the boiler for year 2011 & 2012 which is monitored on monthly basis. The company has no established standard amount for renewable energy usage e.g. for usage of fiber & shell for boil. This is potential for company improvement for renewable energy consumption. Records of monitoring of fossil fuels use for operational reason and its efficiency analysis. Sighted monthly record for monitoring of diesel for year 2011 & 2012 until May, found the usage is within 0.4739 – 0.8490 litres / tonnes of FFB and if converted to ton/CPO was 2.85 – 1.97 litres/tonnes of CPO. Standard amount for this monitoring has not been established. It is stated that fossil fuel con-sumption as environmental aspect as consideration to make environmental objective and program, company feel free to decide when they will make the program and how they put the case as priority or not. In this case PT Swakarsa Sinarsentosa decided that reduce fossil fuel is not priority for year 2012 but for next year as stated on their environmental program. In the Estate of JB1 and LJ1 was record the usage of energy from fossil fuels based on all activities in the estate, and from 2011 until May, 2012 usage of the energy is not fluctuating. From the usage ener-gy recorded, was concluded is: 1. Usage of fossil fuels for electricity is being reduced, and the company has plans to replace fossil

fuel usage with solar energy. 2. Until now, the company was have 1 (one) solar energy project in security office. 3. For the next the solar energy will be use in all of housing in the estate. 4. The company has plan for methane capture for renewable energy development as a source of en-

ergy in the future. Compliance status: Full Compliance

Criterion 5.5: Use of fire for waste disposal and for preparing land for replanting is avoided except in specific situations, as identified in the ASEAN guidelines or other regional best practice.

Findings: The company has zero burning policy both for plantation activities such as land preparing and waste disposal will not use fire. The policy stated on document Company’s quality manual annex 11 issued on February 1st , 2012 signed by Chief executive director to implement zero-burning in all development ac-tivities and the disposal of wastes, except under special conditions as stated in the ASEAN guidelines



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for zero burning activities. The company established a standard operation procedure IK-AGR-OLP-01-R01 as guidance for zero burning land preparation method. As part of implementation of the zero burning policy, there are no more burning of organic or inorganic domestic wastes around the office or housing areas since February 2012. However, during main audit, there was still found burned waste residue in small amount in front of mill housing are, this is an oppor-tunity for company to improve the awareness of worker family regarding restriction of waste disposal through burning. Organic and inorganic wastes are collected and disposed off at landfills in plantation area with specific treatment to protect soil and water contamination, such as usage of plastic to protect soil contamination from waste decomposition process as well as treatment for an organic waste in us-ing plastic before covered by soil as explained on SOP-AGR-SHE-02-R01 regarding domestic waste management. The distance between land fill area and housing area is far, there is directive from estate manager that land fill area shall be located not less than 3 km from housing in plantation area. The land fill area also located away from public watercourses or rivers. Procedures and records of emergency responses to land burning is available at each estates and mill, as determined on SOP-SEC-AGR-02-R00 valid from May 3, 2010 . Fire drill and emergency response simulation was done on June 12, 2012 include introduction of fire fighting tools and understand how to use them. The simulation results sighted is effective, because the participants understand how to use fire extinguishers. The emergency response teams have also been established as part of OSH team. Facilities and infrastructure for land fire prevention area available such as: Water pump, tubing and nozzle, knapsack sprayer, shovel, fire extinguisher mobile tanks, buckets and axes, as seen in front of estate offices. All facilities are in good condition, as recorded on inspection results in May 2012 and June 2012. Fire extinguishers are located at various locations of the estates and mill, i.e. office, hous-ing, mill, security, workshop, storage, etc, and these are tested periodically every month by Labour Agency of Kutai Timur Regency. Compliance status: Full Compliance

Criterion 5.6: Plans to reduce pollution and emissions, including greenhouse gases, are devel-oped, implemented and monitored.

Findings: Evidence of identification of pollution and emissions sources at mills. This has been identified in the documented environmental aspect & impact analysis for each activity conducted in the mill namely HIRAC (Hazard Identification and Risk Analysis Control) e.g. HIRAC for year 2012. These have been evaluated & according to the risk level, actions / operational controls have been identified & implement-ed. Monitoring of key environmental parameters such as waste water discharge, air emission, noise level etc are implemented according to the defined frequency by the legal authority. Monitoring of pollution and emission quality of the sources identified periodically together with company preparation for RKL & RPL report e.g. for Semester 1 year 2012. It was showed that the results meet the specification limits for 8 parameters for both boilers at the mill. Air ambient tests are also conducted on the same period also showed all tested parameters meeting the specification limit. The company has achieved rewards from East Kalimantan government regarding their environmental performance with green level for year 2012. Records of efforts and strategies employed to reduce pollution and emissions can bee seen at mill & all plantations - via implementation of operational control procedures identified in the environmental as-pect & impacts evaluation documents. Significant aspects which are required to be managed e.g. spill-age of chemicals / oil; emergency preparedness & response, disposal of hazardous wastes, storage of chemicals & hazardous wastes, handling of chemicals & hazardous wastes etc have been defined in the applicable operational control procedures. Personnel interviewed were able to demonstrate clear understanding on the control & implementation of the operational control procedures. Records of identi-fication, monitoring, and treatment methodology for POME is carried out via waste water treatment - records of waste water treatment are sighted & lab tests conducted every month as consideration for land application.



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Compliance status: Full Compliance

Criterion 6.1: Aspects of plantation and mill management including replanting that have social impacts are identified in a participatory way, and plans to mitigate the negative impacts and promote the positive ones are made, implemented and monitored, to demonstrate continuous improvement. Findings: There is has a report of social impact assessment (SIA) owned by PT Swakarsa Sinarsentosa, Kutai Timur Regency, Province of East Kalimantan on December 2011, made by Daemeter Consulting. The report contain the impact of the company to community, employee, and local government, and covers positive and negative impacts with evidence of participation of local communities and all affected par-ties. The report of social impact assessment (SIA) does not include impacts from smallholders, because the smallholder groups have not yet been established. The company has no management and monitoring plan prepared with the participation of local com-munities and relevant stakeholders. Compliance status: Non Compliance NCR No 2012-03 of 04 The company has no management and monitoring plan prepared with the participation of local com-munities and relevant stakeholders.

Criterion 6.2: There are open and transparent methods for communication and consultation be-tween growers and/or millers, local communities and other affected or interested parties.

Findings: There is has communication and consultation procedures with stakeholders which was agreed by the local community and companies, and has been given to all local communities. The company also has a list of stakeholders such as: community leaders, ‘Muspika’ (Forum of community leader), supplier, NGO, social institution, etc. The company has a head of public relation, evidenced decree number 0472/SWA/HRA/SK-GU/JKT/I/11. Company has a mechanism to records all local communities’ aspiration and to responses or further fol-low up actions, as determine on SOP-AGR-STD-08-RO3 dated April 23, 2012. Similar with incoming request of information as explained on CR. 1.1. above all incoming aspiration from local communities will be recorded on a log book for incoming request of information and aspiration (FM-STD-30-ROO) Compliance status: Full Compliance Criterion 6.3: There is a mutually agreed and documented system for dealing with complaints and grievances, which is implemented and accepted by all parties. Findings: The company has an open system dealing with communication and consultation with the communities for the conflict and dispute resolution was signed by all communities on June 7, 2012 which covers identification, calculation and compensation procedures to communities. There is evidence for re-sponses made by the company to handling communities complaint from 3 villages, regarding com-plaints that the local businesses do not have adequate opportunity to be involved in the company’s ac-tivities. In the response to this: - The company permits one FFB transporter for each village to transport FFB from estate to PT

Swakarsa mill, - The company allows local businessman to carry out some projects such as road maintenance ac-

tivities, housing construction and domestic waste collector.



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Compliance status: Full Compliance Criterion 6.4: Any negotiations concerning compensation for loss of legal or customary rights are dealt with through a documented system that enables indigenous peoples, local communi-ties and other stakeholders to express their views through their own representative institutions. Findings: The company has an open system dealing with communication and consultation with the communities for the conflict and dispute resolution was signed by all communities on June 7, 2012 which covers identification, calculation and compensation procedures to communities. Company has agreement with local communities regarding payment of compensation. There are has evidences of receipt of compensation by affected parties, and the record of negotiation process has been given to compensation recipients. Example: Communities from villages, i.e: 1. Villager from Ben Heas village received Rp 1,905,000 for compensation of 1,27 ha area. 2. Villager from Ben Heas village received Rp 2,655,000 for compensation of 1,77 ha area. During main audit signed agreement document only available at CSR office, the head of village still not receive copy of signed agreements. Document of signed agreement should be kept by both parties who sign that agreement. Compliance status: Compliance with observation

Criterion 6.5: Pay and conditions for employees and for employees of contractors always meet at least legal or industry minimum standards and are sufficient to provide decent living wages.

Findings: There is has a decree of Directors about the change of the minimum salary, number 001/DIR/JKT/I/2012 was state that the minimum salary for employee is Rp. 1,400,000 per month, valid from January 1st, 2012. That salary is higher than provinces decree based on decree of Governor of East Kalimantan number 561/K.761/2011 on November 23, 2011 which state that the minimum salary is Rp 1,280,000 per month. The company has a list of salary for all employee in every estate which shows the salary paid is in compliance with the Governor and Directors decree. The salary is deducted for wage employees social security. Example salary slips on April 2012, for position of gardener (tukang kebun) JB1 estate has discount Rp 85,491, so that the nett salary is Rp. 2,126,206, while gross salary is Rp. 2,211,697. Working regulations are available in PT Swakarsa Sinarsentosa, valid from April 28, 2011 until April 27, 2013, was authorized by “Direktur Persyaratan Kerja,Kesejahteraan dan Analisa Diskriminasi” Ministry of Labour and Transmigration, Republic of Indonesia on October 5, 2011. The company provided housing for all estate and mill employee. The public facilities was provide such as clinic, mosque and sport facilities. There are has a primary schools in the area of company, and primary school, kindegarten, and junior high school below the foundation of “Yayasan Darma Setya Nusantara”, and also provide the school bus for children to attending school from the outside and inside the company. However, the company has not provided clean water for daily consumption at certain ar-eas, such as at housing area in Long Jenew 2 estate and Long Jenew estate 1 division 7. Providing clean water is one of company’s program to improve workers health since water condition in company’s area is not sufficient to fulfill government standard regarding clean water for daily used. The company is utilizing a water purifier machine as pilot project to provide clean water in Jabdan 1 estate, Division IV. If the project success, this purified water will be made available to each workers houses. Until the water treatment facilities are completed, the company will provide the water from mill water treatment. The company has a documented agreement with contractors as sighted from contract number 023/SWA/I.J2/2012 about housing development G.10, that they are to abide with local labour laws. Some clauses in the contract include compliance to labour laws. There was also evidence sighted that



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FFB contractors for transportation namely CV Berkat Rejeki and CV Dita Jaya Abadi have registered their 21 employees under the social security program “Jamsostek”, including coverage for work accident insurance and life insurance. Compliance status: Non Compliance NCR No. 2012-04 of 04 Some estates (LJ 1, JB 2, LJ2) are still not provided with adequate clean water for drinking since exist-ing water is not suitable to consumed as drinking water because it does not meet to drinking water quality standards as defined by the government, and there is no action taken to ensure such facilities are made available or accessible. Criterion 6.6: The employer respects the right of all personnel to form and join trade unions of their choice and to bargain collectively. Where the right to freedom of association and collective bargaining are restricted under law, the employer facilitates parallel means of independent and free association and bargaining for all such personnel. Findings: The company has a documented regulation 2011 – 2012 period, regarding freedom for association for workers that is available in several locations. In point ‘4’ company regulation it is stated that wokers are entitle to join associations for workers “SPSI” or to be a member/leader of workers association based on the government regulation. Association workers in PT Swakarsa Sinarsentosa is available, name is “SPSSS”. There is evidence meeting all of members on January 2, 2012 with agenda preparation work administration program, with 172 members. There are has organization structure for the 2012 until 2013 period, wich was recorded in Departemen of Labour and Transmigration “Disnakertrans” Sangatta number 04/02/SP-SB/Nakertrans-HIJ/III/2012 on March 6, 2012. Compliance status: Full Compliance Criterion 6.7: Children are not employed or exploited. Work by children is acceptable on family farms, under adult supervision, and when not interfering with education programmes. Children are not exposed to hazardous working conditions. Findings: The company policy regarding child labour was defined since year 2011 by Head of management Sys-tem & Human Resources Department, and informed to employees through an internal memorandum no: 009/HRA/VII/2011 dated on July 12, 2011. The company regulation for period 2011 to 2013 states under article 5 that employee recruitment shall not below 18 years according to applicable laws and regulation. During onsite audit in PT Swakarsa Sinarsentosa plantation there was found evidence of employment of a female worker less than 18 years old as worker for plantation maintenance, but she is married and works in PT Swakarsa Sinarsentosa following her husband which is also as harvester. This condition still allowed by Indonesian Law No. 13 year 2003 regarding Workers, however company’s regulation strictly state minimum age requirement for workers. The company should review their regulation re-garding under age workers following Indonesia Law for Workers No. 13 year 2003 which states that employment of workers under 18 year is permitted under certain conditions. Compliance status: Compliance with observations

Criterion 6.8: Any form of discrimination based on race, caste, national origin, religion, disabil-ity, gender, sexual orientation, union membership, political affiliation, or age, is prohibited.

Findings: Policy about equal opportunities policy stated on company’s regulation period year 2011-2013 section II article 5.3 signed by the Director of PT Swakarsa Sinarsentosa approved by Ministry of Manpower and Transmigration republic of Indonesia through letter no. TAR.870/PHIJSK-PKKAD/PP/X/2011 dated



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October 5, 2011. The policy was informed only to employees and communities surrounding company’s location. Based on information from the local communities, company has regularly provided information about job vacancies in PT Swakarsa Sinarsentosa every year as recorded on letter no. 008/SK CSR-EKS/SWA-MW/V/2010 dated may 12, 2010 regarding Job vacancy announcement and it was distribut-ed to 15 villages surrounding company’s area e.g. Muara Wahau village, Dabeq village, Nehas Liah Bing village, Long Wehea village etc. As sighted on company’s list of workers and employee there are approximately 1376 workers locals from East Kalimantan Province from level permanent workers, 3 down level (Supervisor level) until 4 up level (estate assistant) including office or estate staff. There is no evidence of discrimination, and the following is evidence of equal opportunities provided to all workers: • Female workers comprise around 29.24% of all of company’s workers • Female workers also have opportunities to have high positions such as office assistance such in HR

department for training assistance. Workers of all ethnicities and religions, including Muslims, Catholics and other Christian denominations are provided with their respective places of worship such as mosques and churches in each estate. No workers interviewed on-site complained about any form of discrimination from the management of the estates or mill. Compliance status: Full Compliance

Criterion 6.9: A policy to prevent sexual harassment and all other forms of violence against women and to protect their reproductive rights is developed and applied.

Findings: The management of PT Swakarsa Sinarsentosa estate has a written policy regarding prevention of sexual harassment and all other forms of violence against women, as well protection of their reproduc-tive rights. The company’s regulation for 2011-2013 and its extension clause 12 page 18 contain pre-vent sexual harassment. The company established an SOP to for handling sexual harassment incident as seen on SOP - AGR- STD-13-R01 issued on April 23, 2012. Meetings to create awareness on this policy were conducted in every estate housing area such as in Jabdan I and Long Jenew estate on April 22, 2012. The company regulation was sent to all employee and workers and displayed at each plantation division office as seen in Long Jenew 1 division 3 and Jabdan 1 division 1. There is an inter-nal memorandum issued by the Chief of Executive Human Resource i.e. letter No. 010/HRA/VII/2011 dated 12 July 2011 and additional permit letter from Head MS & HRA dept dated June 27, 2012 regard-ing prohibiting pregnant and breastfeeding woman to conduct chemical spraying. Protection of wom-an’s reproductive rights is defined clearly on company regulation 2011-2013 clause 32 page 26 regard-ing maternity leave and menstruation leave There is one record of handling of sexual harassment incident that was happen on February 20, 2012. The company took action and carried out disciplinary action on the person and during the audit time the case had been closed. The company established a Gender Committee, with representatives from each estate division. There is evidence of implementation of the reproductive rights policy, for example, the company has copies and records of menstruation leave and maternity leave forms applied by workers and these rec-ords are kept by the HRD department, estate clinic and estate office. As recorded on FM-HRA-02-R00 dated May 23, 2012 to August 20, 2012. And menstruation leave for woman workers dated June 25, 2012. The company has a grievance mechanism defined in procedure SOP-AGR-STD-13-R01 for grievanc-es, violence against women and protection of reproductive rights, all complaints should be recorded on a form, i.e. “Handling of Sexual Harassment Complaint Form” (FRM-STD-005) according to procedure “Handling of Complaints of Sexual harassment SOP-AGR-STD-13-R01. The company has also estab-lished a gender committee as a more specific grievance mechanism for female workers. As determined on the procedure, the gender committee will approach the parties involved to attempt to resolve the is-sues. All relevant records of gender committee activities will be stored properly in the committee office. Compliance status: Full Compliance



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Criterion 6.10: Growers and mills deal fairly and transparently with smallholders and other local businesses.

Findings: The company allows the public to access current and past prices for FFB. Current FFB prices and pre-vious day FFB prices are clearly published. Prices of FFB based on prices was determined by Estate Office East Kalimintan Province May and April 2012 period. There are has a contractual agreement was understood to all parties, such as: 1. Purchase contract for FFB with “Koperasi Perkebunan Semoga Sawit Wahau Jaya” on January 2,

2012 2. Purchase contract for FFB with PT Sanhantara Rawi Sentosa on January 2, 2012. And the company made agreed payments in timely manner, with evidence as follows: 1. Evidence payment for “Koperasi Perkebunan Semoga Sawit Wahau Jaya” on May 2012 with Rp.

6,857,131,517 for 1,137,390 kg of FFB. 2. Evidence payment for “PT Sanhantara Rasi Sentosa” through BII Bank with Rp. 61,093,548 for

60,000 kg of FFB. Compliance status: Full Compliance

Criterion 6.11: Growers and millers contribute to local sustainable development wherever appro-priate.

Findings: The company makes contributions to local communities through CSR company program in 2011, with evidence as follows: 1. Construction contributions:

- Road maintainance Rp 1,396,068,030 - Worship house maintainance Rp 43,500,000 - Brigde maintainance Rp 22,748,450 - Education and infrastructure facilities Rp 175,715,000 - Community houses maintainance Rp 60,000,000 - Genset for electricity Rp 30,000,000 - Etc

2. Social and culture: - Local arts Rp 21,500,000 - Financial (medicine, transportation, etc) Rp 82,740,000 - Scholarship Rp 24,550,000 - Religion activities Rp 97,250,000 - Sport activities Rp 36,500,000 - etc

Compliance status: Full Compliance

Principle 7: Responsible development of new plantings

Findings: According to the company’s AMDAL document, HCV document and plantation history document such land use map and plantation statement document, planting activities was began in year 1996 and fin-ished in year 2004. There are no findings related to new development area because company has no development area program. Compliance status: Not Applicable



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Criterion 8.1: Growers and millers regularly monitor and review their activities and develop and implement action plans that allow demonstrable continuous improvement in key operations.

Findings: Overall implementation plans are defined based on risk level evaluated for identifying significant as-pects. Verified & cross checked implementation of the actions such as waste management control, chemical management control, efforts to eliminate hazardous waste furthermore efforts to eliminate the use of Agrochemical has been committed through letter No. 008/PH-SWA/II/2012 dated February 09, 2012. The company has programs to reduce agrochemical consumption through implementation of beneficial plants such as Casiatora and Nephrolepis. It was sight on the document of comparison agro-chemical consumption year 2011 and year 2012, volume total for this year only 92% compare with last year consumption. Consumption of Gramoxone (paraquat) this year only 12% from total year 2011 condition. Continuous prevention improvement plans are in place for the estate, and monitoring of objectives & targets for environment (EMP) is conducted on monthly basis & results are recorded in FM-STD-16-R00 (report of quality target/objective achievement). Reviewed documented Quality & Environmental Manual, PML, 19 April 2007. Documented procedure for monitoring & measurement for environment (SOP-AGR-STD-06-R01 issued on December 2010) are available. There is a mechanism to create awareness of responsibility for that subject that are regu-lated or whose effects are understood. The company’s evidence of efforts to reduce wastes includes establishing procedures for minimizing and management waste both hazardous and domestic wastes i.e. SOP-AGR-SHE-02-R00 issued on may 3, 2010 are in place at the mill and estate. The procedure explains about how to collect and sepa-rate waste at source following government regulations. The company has a register of potential pollu-tants and a plan has been drafted to manage the potential from estate and mill production. All pro-cesses that produce regulated wastes are managed properly and monitored periodically. As described earlier, the company also carries out recycling of EFB and mill effluent through application in the field. A social impact management and monitoring program are also available (see explanation on 6.1 above), and impacts identified include impacts to clean water availability through CSR program and im-pact to community access to the land. To mitigate these impacts, the company has action plan that has been approved by relevant stakeholders. Internal audits are conducted & records for internal audit find-ings are sighted. Actions taken to address the internal audit findings are identified & implemented Latest management review meeting minutes dated 12 January 2011 has been reviewed & confirmed latest performance results have been reviewed by the top management. The Environmental Manage-ment Program has been reviewed by the respective plantation & mill management team & achieve-ment results are available Compliance status: Full Compliance

3.2 Identified Non-conformances, Corrective Actions Taken and Auditors Conclusions

A total of 4 nonconformances were identified during the main certification assessment. All nonconformities were categorized as minor non-conformities. The company has taken corrective action against these as well, and for those which could not be verified as closed through document checks, the closure of these minor non-conformities will be assessed during the next surveillance audit. A summary of all identified non-conformances, corrective actions taken and auditor conclusions is as below:

Criterion 2.1. (Minor indicator 1): A documented system, which includes written information on legal requirements that the palm oil company should comply with.

Non-conformance 2012-01 of 04 (Minor non-conformity): The company has a mechanism for updating applicable legal and other requirements, as recorded on “list of regulation” however there is some applicable regulations still not listed on the updated “list of regulation” such as: i) Local regulation of Kutai Timur District No.6 Year 2005 regarding Plantation Business Permit in Ku-

tai Timur District



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ii) Decree letter from head of District “Kutai Timur” No. 261 year 2002 regarding Guidance for Planta-tion business Permit in Kutai Timur District

Correction: To obtain the Local regulation of Kutai Timur District No.6 year 2005 regarding Plantation Business Permit in Kutai Timur District and "Decree letter from head of District “Kutai Timur” No. 261 year 2002 regarding Guidance for Plantation business Permit in Kutai Timur District from Regional Administration of Kutai Timur Regency and putting the regulations mentioned above into "List of Regulations". Corrective Action: To re-identify all the regulations related to plantation and mill operation activities Auditor Conclusions: Evidence of immediate action taken was accepted. Effectiveness of implemen-tation to verified at next audit.

Criterion 4.7 (Minor indicator 2): Regular health examination by a doctor for workers in station or exposed to high risk work.

Non-conformance 2012-02 of 04 (Minor non-conformity): Regular health examination for workers in chemical warehouse which has high risk work is not provid-ed, such as a warehouse worker in Jabdan 2 estate. There is no follow up action for a medical recommendation result from doctor in which a worker was recommended to go to an Ear, Nose and Throat (ENT) specialist. Correction: To conduct blood tests (Cholinesterase) annually for all warehouse crews who handle the storage and mixing of chemicals. To provide medical check ups for all workers who carry out work related with chemicals. The company will take action to follow up recommendation from doctor for relevant workers who need to be deeply checked to Ear, Nose and Throat (ENT) specialist in Samarinda. Corrective Action: Using risk analysis result to make annual medical surveillance program especially for the worker with high health risks. Follow up every recommendation given by company's doctor in every employee's medical check up and regular (general) medicine. Auditor Conclusions: Evidence of immediate action taken was accepted. Effectiveness of im-plementation to verified at next audit.

Criterion 6.1. (Minor indicator 1): Regular monitoring and management of social impact, with the participation of local communities.

Non-conformance 2012-03 of 04 (Minor non-conformity): The company has no management and monitoring plan prepared with the participation of local com-munities and relevant stakeholders. Correction: To integrate the recommendation of SIA together with related stakeholders into the CSR's Activity Plan Corrective Action: To monitor and evaluate the implementation of the Social Impact Surveillance Plan. Auditor Conclusions: Evidence of immediate action taken was accepted. Effectiveness of im-plementation to verified at next audit.



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Criterion 6.5. (Minor indicator 1): Growers and millers provide adequate housing, water sup-plies, medical, educational, and other facilities for employees where such facilities are not available or accessible. Non-conformance 2012-04 of 04 (Minor non-conformity): Some estates (LJ 1, JB 2, and LJ2) are still not provided with adequate clean water for drinking since existing water is not suitable to consume as drinking water because it does not meet to drinking water quality standards as defined by the government, and there is no action taken to ensure such facilities are made available or accessible. Correction: Speed up the completion of water purifying project in Division IV, Jabdan 1 Estate (JB1). While waiting for finishing water purifying project, company will provide drinking water through mobile water tank to each housing area regularly every 3 days. Corrective Action: To continue the development of water purifying facilities in each division in every estate gradually until each housing area has enough clean water sources for drinking. The program will be scheduled in company’s annual budget every year. Auditor Conclusions: Evidence of immediate action taken was accepted. Effectiveness of im-plementation to verified at next audit.

3.3 Noteworthy Positive Components

Criterion 5.2.1 (Major indicator 1): Records of results of identification of any protected, rare, threatened or endangered species, and HCV habitat.

Findings: Good forest conservation area condition and protection of existing wildlife inside plantation area. A lot of endangered bird species such Bucheros rhinoceros still exist and are well protected.

Criterion 5.3. (Major indicator 2): Estates and mills waste management and disposal are imple-mented to avoid or reduce pollution

Findings: Good handling of hazardous waste from collection, to storage and disposal.

Criterion 6.11(Minor indicator 1): Records of company contributions to the local development.

Findings: The company has good CSR program and real contribution to local development, as confirmed by vil-lager surrounding the company’s area. Criterion 8.1. (Major indicator 1): A monitoring action plan based on the social environmental impact assessment, and regular evaluations of plantation and mill operations. As a minimum, these must include, but not necessarily be limited to: • Reduction in use of certain chemicals (criterion 4.6). • Environmental impacts (criterion 5.1). • Waste reduction (criterion 5.3). • Pollution and emissions (criterion 5.6). • Social impacts (6.1). Findings: There is significant improvement in due to implementation of corrections and corrective actions for pre-



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assessment findings especially in areas pertaining to agrochemical reduction program, review infor-mation of environmental impact, reduction of waste, monitoring of generated pollution and emission etc.

3.4 Issues Raised by Stakeholders and Findings Pertaining to Issues A) Issues Raised during Stakeholder Consultation Meeting

No. Issues Raised Management Response Audit Verification

1.

PT Swakarsa Sinarsen-tosa is the most coopera-tive company in this re-gion compares to the others company, espe-cially in partnership and cooperatives.

Management will always im-prove partnership program as part of company’s social re-sponsibilities.

The company has good cooperation with local communities. Local com-munities have good im-pression of the company’s performance.

2.

The positive impact is felt by local community since many people grow oil palm trees and sold their FFB to PT Swakarsa Sinarsentosa Mill

Company will live together with local people and help local people to improve their liveli-hood.

Company has good com-mitment to improve rela-tionship with stakeholders.

3.

There used to be people who bathe in the river experience itching, but had been improved. We hope that if company engages a new contrac-tor, please ask them to register with the local government (Village Government)

Management has a commit-ment to recover, and mitigate relevant negative impact from company’s activities through CSR program

Verified on site and clearly explained on CR. 5.1 above.

4.

I think that PT Swakarsa did not implement RSPO since they don’t have any local employee for staff position in company

Job vacancies already trans-parent and balanced. Distribution of job for local sub-contractors is considered as lo-cal communities capabilities

As verified on site, most of field workers come from Muara Wahau.

5.

Sygenta as company’s agrochemical supplier was invited to provide training about agrochem-ical handling for sprayer, the training focused on how to prevent chemical poisoning and how to use PPE for sprayers.

Periodic training will be con-ducted for workers who has high risk especially for those who deal with agrochemicals

Training evidence was verified during document check as seen on handling of chemical material con-ducted by company in co-operation with supplier from chemical distribution.



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3.5 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 PT Swakarsa Sinarsentosa _________________________ Mr. Tjahjono Notosuroto Management Representative Date: August 02, 2012

Signed on behalf of TUV Rheinland Malaysia __________________ Dian S. Soeminta Lead Auditor Date: 1 August 2012



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APPENDICES

Appendix 1: Details of Certificate

Standard: RSPO Principles & Criteria for Sustainable Palm Oil Production; Indonesian National Interpretation: 2008

Certificate Registr. No.: 18501994 001

TUV Rheinland Malaysia Sdn. Bhd. certifies:

Certificate Holder: PT Swakarsa Sinarsentosa Muara Wahau Village, Muara Wahau Subdistrict, Kutai Timur Regency, East Kalimantan Province, Indonesia and its supply base according to the annex.

Scope: Palm Oil Production and Plantation Management System

An audit was performed, Report No. 18501994. Proof has been furnished that the requirements according to RSPO Principles & Criteria for Sustainable Palm Oil; Indonesian National Interpretation: 2008 are fulfilled.

The due date for all future audits is 10-11 (dd.mm).

Validity: The certificate is valid from 2013-01-10 to 2018-01-09.

The palm oil mill and supply base covered in the certification scope are:

Name of mill / es-tate

Location GPS locations

Latitude Longitude Palm Oil Mill 1, PT Swakarsa Sinarsentosa

Muara Wahau Village, Muara Wahau Subdistrict, Kutai Timur Regency, East Kalimantan Province, In-donesia

01 07’ 22.0” N 116 51’ 07.0” E

Jabdan 1 Estate 01 11’ 03.9” N 116 49’ 35.8” E

Jabdan 2 Estate 01 06’45.4” N 116 50’ 08.6” E


01 11’ 14.5” N 116 46’ 56.5” E


01 07’ 46.3” N 116 43’ 44.9” E

Kantor Besar Bersama (KBB)

01 10’ 57.9” N 116 49’ 55.7” E

CPO Tonnage Total Productions: PK Tonnage Total Productions: Company Estates FFB Tonnages: FFB Tonnages from other sources: CPO Tonnage claimed for certification: PK Tonnage claimed for certification:

97,265 tonnes 13,287 tonnes 354,048 tonnes 51,056 tonnes 85,007 tonnes 11,613 tonnes



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Appendix 2: Certification Audit Plan

Date / Time

(1) Organizational Unit and

Processes Auditor / Abbrev.

Interviewee Procedure - RSPO Element -

Standard Chapter

Monday, June 25, 2012 Auditor Team

Traveling Jakarta to Balipapan then Berau continue to Site

Tuesday, June 26, 2012

08.00-09.00 Opening Meeting

Introduction by team leader.

Presentation of estates by re-spective managers.

Presentation of Oil Mill source of FFB by respective managers

Auditor Team

Top Management & Related Manager

09.00-12.00 Management Office,

HGU legal requirement ,

All related legal requirement & documentation checking,

All procedure or SOP related operation,

Maps in appropriate scale.

Auditor Team

Plantation and Palm Oil manager

Principle 1 Criteria 1.1; 1.2; Principle 2 Criteria 2.1;2.2;2.3; Principle 3, Criteria 3.1; Principle 4 Principle 5 Principle 6, Criteria 6.1- 6.11 Principle 7 Principle 8

12.00 Break

Plantation Estate 1

13.00-17.00 Economic Issue & Legal Issue

Management Plan

HCV Management Environment

Dian S. Soeminta (DSS) & Hendra Fachru-rozi (HF)

Manager Principle 3 Principle 4 Principle 7 Principle 5 Principle 2

Social issues

Labour Union (if any)

Contractors (if any)

Workers facilities (house, school, transport, sports, etc)

Female workers

Sexual harassment policy

Health & Clinic

Land used

Local communities

Fadli (FD)

Manager Principle 2 Criteria 2.1; 2.2; 2.3; Principle 4. Criteria 4.7; 4.8 Principle 6 Criteria 6.1 to 6.11 Principle 7 Principle 8

OSHAS, Enviroenmental Issue Aswan Hasibuan (AH) & Fundy

Principle 4 Principle 5

17.00 End of 1st day audit

19.00 Public Consultation Auditor Team

Stakeholders Sub District office Muara Wahau

Wednesday, June 27, 2012

Plantation Economic Issue & Process Compliance

DSS & HF

Manager Principle 1



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Date / Time




Standard Chapter

Estate 2 08.00 to 12.00

Management Plan

HCV Management

Environment Issue

Legal compliance & Process compliance

Principle 3 Principle 4 Principle 8 Principle 5 Principle 2

Social issues




Female workers


Health & Clinic

Land used

Local communities

FD Manager Principle 1, Criteria 1.1; 1.2; Principle 2, Criteria 2.1; 2.2; 2.3; Principle 4. Criteria 4.7; 4.8 Principle 6, Criteria 6.1 to 6.11 Principle 8 Principle 2

OSHAS, Enviroenmental Issue AH & Fundy


13.00 to 17.00

Economic Issue & Process Compliance

Management Plan

HCV Management

Environment Issue

Legal compliance & Process compliance

DSS & HF

Manager Principle 1 Principle 3 Principle 4 Principle 8 Principle 5 Principle 2

Social issues




Female workers


Health & Clinic

Land used

Local communities

Fadli Manager Principle 1, Criteria 1.1; 1.2; Principle 2, Criteria 2.1; 2.2; 2.3; Principle 4, Criteria 4.7; 4.8 Principle 6, Criteria 6.1 to 6.11 Principle 8 Principle 2

OSHAS, Enviroenmental Issue Aswan Hasibuan (AH) & Fundy


17.00 End of 2nd day audit

Thrusday, June 28, 2012

Palm Oil Mill SCC-RSPO DSS SCC RSPO

Bulking La-banan

SCC-RSPO Hendra SCC RSPO

Plantation Estate 3 (Long Je-nau)

Economic Issue & Legal Issue

Management Plan


Fundy Manager Principle 2 Principle 3 Principle 4 Principle 7



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Date / Time




Standard Chapter

08.00-12.00 Principle 5

Social issues




Female workers


Health & Clinic

Land used

Local communities

Fadli Manager Principle 2 Criteria 2.1; 2.2; 2.3; Principle 4. Criteria 4.7; 4.8 Principle 6 Criteria 6.1 to 6.11 Principle 7 Principle 8

OSHAS, Environmental Issue AH Principle 4 Principle 5

12.00-13.00 Break and Lunch

Economic Issue & Legal Issue

Management Plan


Fundy Manager Principle 3 Principle 4 Principle 7 Principle 5 Principle 2

Social issues




Female workers


Health & Clinic

Land used

Local communities

Fadli Manager Principle 2 Criteria 2.1; 2.2; 2.3; Principle 4. Criteria 4.7; 4.8 Principle 6 Criteria 6.1 to 6.11 Principle 7 Principle 8

OSHAS, Environmental Issue AH & Fundy


17.00 End of 3rd day audit Hendra travel back to Berau

Friday, June 29, 2012

Palm Oil Mill 08.00-12.00

Social, Economic Labour Union (if any)



Female workers


Health & Clinic

Land used

Local communities

Fadli Manager Principle 1 Criteria 1.1; 1.2; Principle 2, Criteria 2.1; 2.2; 2.3; Principle 3 Principle 4. Criteria 4.7; 4.8 Principle 6, Criteria 6.1 to 6.11 Principle 7 Principle 8

OSHAS, legal and Environmental Issue

AH & Fundy


08.00-12.00 Economic Issue DSS Principle 3,.1; 4.1 and 5.4, 5.6



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Date / Time




Standard Chapter

15.30-16.30 Preparation for Closing Meeting Auditor Team

17.00-18.00 Closing meeting and present find-ings

Saturday, June 30, 2012

Traveling to Berau, Samarinda, Balikpapan and Jakarta

Auditor Team

Appendix 3: List of Abbreviations AMDAL BPN DAS

Analisis Dampak Lingkungan & Sosial (Social & Environmental Impacts Assessment) Badan Pertanahan Nasional (National Land Agency) Daerah Aliran Sungai (Watershed area)

CPO EHS

Crude Palm Oil Environmental Health and Safety

EIA EMP

Environmental Impact Assessment Environmental Management Program

ERTs Endangered, Rare & Threatened speciesESH Environmental Safety & HealthFFB Fresh Fruit BunchesEFB Empty Fruit BunchesHCV High Conservation ValueHPH Hak Pengusahaan Hutan IPM Integrated Pest ManagementIUT Izin Usaha Tetap (Permanent Business License)IUP Izin Usaha Perkebunan (Plantation Business License)JB LJ LTA

Jabdan Long Jenew Lost Time Accident

MSDS Material Safety Data SheetsNGO Non-Government OrganizationMuspika OSH

Musyawarah Pimpinan Daerah (Forum of community leader) Occupational Safety & Health

PKO Palm Kernel Oil POME Palm Oil Mill EffluentPPE Personal Protective EquipmentRKL Rencana Pengelolaan Lingkungan (Environmental Management Plan) RPL Rencana Pemantauan Lingkungan (Environmental Monitoring Plan) SIA Social Impact AssessmentSOP Standard Operating ProcedureSPUP UKL

Surat Pendaftaran Usaha Perkebunan (Plantation Register Letter) Upaya Pengelolaan Lingkungan (Environmental Management Efforts)

UPL Upaya Pengelolaan Lingkungan (Environmental Management Efforts)



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Appendix 4: List of Stakeholders Interviewed and Contacted

No. Name of

Stakeholder Institution / Position Remarks

Stakeholders Interviewed during Public Consultation Meeting

1. Teodorus Telea Head of Village Deabeg 2. Wan Bling Community Leader Ben Heas Village 3. Nentung Ding Villager Ben Heas Village 4.

Yusuf John Deer (FFB transporter) operator

5. M. Yusuf FFB transporter 6. Balan Laway Head of Village Miau Baru 7. Wang Ya Community Leader Diak Lay Village 8. Siang Luen Head of Village Diak Lay 9. Mikail Ernawati Worker/harvester 10 Paulus Worker/harvester 11. Salim Worker 12. Gregorius Gleng Cooperation Partnership 13. Latifudin FFB transporter

Stakeholders Interviewed On-Site

1. Riyadi W Swakarsa/Mill manager 2. Fathomi Rhifki Swakarsa Mill Staff 3. Akedes Putra Swakarsa/CPO Dispatch 4. Tri Gunarso Swakarsa/CPO Dispatch 5. Khaula Inayati ISO team 6. Dadam Saeful Bachri ISO team 7. Iman Giyanto Swakarsa/Legal 8. Ade Irawan Swakarsa/ Legal 9. Andriansyah Swakarsa/ Legal

10. Susilo Hartono Swakarsa/Legal 11. Albertur H. Swakarsa/ OPT 13.

T. Notosuroto Swakarsa/ Management Representative

14. Hawari M. Matondang Swakarsa/Mill 15. Hapy A. Suary Swakarsa/Mill 16. Mukhlis Swakarsa/OPS 17. Parlindungan Swakarsa/OPS 18. Sriyadi Swakarsa/OPS 19. Masrudin Purba Swakarsa/HRD 20. Dani Nugraha Swakarsa/HRD 21. Imam Suparlan Swakarsa/OPS 22. Sugiyo Swakarsa/HF 23. M. Masun Swakarsa/HRD 24. Fedra Youven Swakarsa/HRD 25. W. Manik Swakarsa/OPS 26. Muslimin Swakarsa/OPS 27. Taufik Ridwan Swakarsa/OPS 28. Sanat MS.P Swakarsa/FQA 29. Suyitno Swakarsa/OPS 30. Kartiko Dwi P Swakarsa/DES-Jakarta 31. Tho Zaini Swakarsa staff 32. Watik TK Swakarsa staff/OPC 33. M. Rohadi Swakarsa staff 34. Januis Swakarsa staff 35. Hadi Riefianto Swakarsa staff



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36. Syarifuddin Hasibuan Swakarsa staff 37. Edwin Aprianda Swakarsa staff 38. Payaman Sianipar Swakarsa staff 39. Suryansah Swakarsa staff 40. Imam Hambali Swakarsa staff 41. Dolok Siahaan Swakarsa staff 42. Ali Wafa Swakarsa staff 43. Bambang HP Swakarsa staff 44. Hendy Erwin S Swakarsa staff 45. Maryana Swakarsa staff 46. Budi H Swakarsa staff 47. Ari Subandono Swakarsa staff 48. Robertus Swakarsa staff 49. A. Andhika Erwan Swakarsa staff 50. Deny Santana Swakarsa staff 51. Susilo Hartono Swakarsa staff 52. Wisnu P Swakarsa staff 53. A. Jubir Syam Swakarsa staff 54. Wisnu N Swakarsa staff 55. Ekoariawan Swakarsa staff 56. Humala Sidabalok Swakarsa staff 57. Anggoro T Widyanto Swakarsa staff 58. Ansori Djohanes Swakarsa staff 58. Niklaus Wahyu Swakarsa staff 59. Dr. Fajar Swakarsa staff 60. Tri Cahyo JM Swakarsa staff

Appendix 5: Observations and Opportunities for Improvement

No. Observations / Opportunities for Improvement Criteria1. Information regarding publicly available document should be provided to other

stakeholders not only to communities surrounding company’s area, such as NGO, local government, local institution ets.

1.2

2. Company should consider changing the status of their plantation area that will be converted to coal mining covering total of 1,770 ha in LJ II afd 13 dan JB II divi-sion 11 and 12, and include this are into their operational management plan

3.1

3. The company should determine the retention time for EFB applied in the field af-ter uploaded from the truck.

4.2.2

4. Diesel oil spillage found at Long Jenew 1, division 4. 5.3

5. The company should monitor periodically condition of riparian Telen and Kenden rivers to prevent encroachment from communities.

4.4.

6. During main audit signed agreement document only available at CSR office, the head of village still not receive copy of signed agreements. Document of signed agreement should be kept by both parties who sign that agreement.

6.4.1

7. The company should ensure that all standard operation procedure has specific number and issuance date.

4.1

8. The company is currently using wood pallets as secondary containment of oil spillage. The company should provide a better system to prevent soil contami-nated from oil spillage or leakage.

5.3.2

9. The company should provide better tools to take clean water for chemical mix-ing instead of the existing use of jerry cans to prevent water pollution.

5.3.2

10. The company should calibrate the flowmeter used to monitor effluent waster 4.1



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discharge into land application area, to ensure accurate data measurements.

11. The company has no established standard amount for renewable energy usage e.g. for usage of fiber & shell for boil.

5.4

12. The company should improve the awareness of worker family regarding re-striction of waste disposal through burning.

5.5

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