RSPO audit ReportTotal 1,693 (15.58%) 5,095 (46.92%) 4,008 (36.90%) 66 (0.60%) 10,862 (100.00%) 1.7.4 Calculation of the number of production units (N) to sample for the mill. N =

RSPO Principles & Criteria Annual Surveillance Assessment Report

Report Number CU813184

RSPOPC-ASAREPORT.F01 EN (01) DEC2011 Page 1 of 21

Control Union Certifications Meeuwenlaan 4-6, 8011 BZ Zwolle, P.O. Box 161, 8000 AD Zwolle, Netherlands

Tel: +31 (0)38 - 426 0100, Fax: +31 (0)38 - 423 7040, E-mail: [email protected]

RSPO Annual Surveillance Assessment (02)

Report

PT Berkat Sawit Sejati Kabupaten Musi Banyuasin Propinsi Sumatera Selatan

Indonesia

Control Union Certifications is a member of the Control Union World Group - an international inspection and certification body. CU performs audits and certification in many agricultural based fields such as FSC, RSPO, and Organic production, Sustainable Textile Production, Organic Exchange, Eurepgap, HACCP, BRC, GMP and GTP.

CU is accredited by the Dutch Council of Accreditation (RVA) on the European quality standard EN 45011 for the

inspection and certification of CU Organic program (according to the EU regulation 2092/91) and EUREPGAP program. When requested a copy of the accreditation certificate can be obtained from CU.

www.controlunion.com

Control Union (Indonesia) Jl Kramat 3A,

Cilandak Timur Jakarta Selatan 12560

Phone: 062-21-7884 2016

[email protected]

Control Union (Malaysia) S/B Persiaran Raja Muda Musa,

Off Jalan Sg Berith, Teluk Gadong, 41100, Klang,

Selangor. Malaysia. Phone 03-3377 1600 / 1700

[email protected]

Report prepared by: Simon Selvaraj. (Lead assessor). Certification decision made by: Gerben Stegeman.

This public summary has been prepared in accordance with RSPO requirements and the information included is the result of a full RSPO audit of the Mills and

supply base as included in the scope of the certificate.

Control Union Certifications. (Head office) Meeuwenlaan 4-6,

P.O. Box 161. 8000 AD Zwolle. The Netherlands.

[email protected]

Phone: 0031 38436 0100

http://www.controlunion.com/

mailto:[email protected]








Contents

1. Scope of the Certification Audit. 1.1 Company and contact details. 1.2 RSPO membership details. 1.3 Annual Surveillance Audit details. 1.4 Audit type. (Mill, estate and mill, plantation only etc.). 1.5 Location of palm oil mill. 1.6 Palm oil mill. Approximate tonnages certified. 1.7 General description of supply base.

1.7.1 Location of the supply base including:

Control Union code for the certificate.

Location address.

GPS reference. 1.7.2 Statistics of supply base including:

Control Union code for the certificate.

Area of oil palm.

Mature area.

Estimated annual FFB production in tonnes.

Planting years.

Cycle. 1.7.3 Percentage of planted oil palm by different age ranges. 1.7.4 Calculation of the number of production units sampled for the mill.

1.8 Progress of associated small holders etc. toward certification. 1.9 Location map for the supply base.

2. Rules for partial certification.

2.1 Management structure. 2.2 Non-compliance identified in 2.1. 2.3 Summary of the time bound plan. 2.4 Un-certified units or holdings. 2.5 Summary of the findings for partial certification. 2.6 Partial certification audit agenda.

3. Audit Process.

3.1 Certification body. 3.2 The audit team. 3.3 Audit methodology.

4. Assessment Findings.

4.1 Lead auditor’s summary and recommendation for certification. 4.2 Summary of the findings by principle and a sample of the criteria 4.3 Sample criteria table for each ASA. 4.4 Non conformity register and reports on previous NCs. 4.5 Issues raised during stakeholder consultation and company responses.

5. RSPO Supply Chain Certification.

6. Certified organisation’s acknowledgement of internal responsibility.

6.1 Date of next annual audit. 6.2 Date to non-conformities. 6.3 Signing by the client. 6.4 Signing by the lead auditor. 6.5 Signing by the certifier.

7. Abbreviations.






PART 1: SCOPE OF THE CERTIFICATION AUDIT

1.1 Company and contact details:

Company name: PT Berkat Sawit Sejati

Business address: Spring Tower 03-31, Jl. K.L. Yos Sudarso Km 7,8, Tanjung Mulia, Medan 2024, Indonesia

Group name if applicable: -

Office telephone: +62 61 661 5511

Contact person: Dr Gan Lian Tiong

Mobile telephone: +62 811 632 831

Fax: +62 61 661 7386

e-mail: [email protected]

Web site: -

1.2 RSPO membership details:

RSPO membership number: 1-0055-08-000-00 [old number: 030-08( O) 28 May 2008]

Parent company as applicable: -

Date of original certification: 8th

April, 2010

Certificate number: CUC813184RSPO-01.2010

Date of last audit: 11th

to 14th

April, 2011

1.3 Annual Surveillance Audit details:

Dates of the audit: 12th

to 15th

March 2012

ASA number (1 to 4). 2 (two)

1.4 Audit type. (Mill, Estate and Mill, Plantation only etc. etc).

Palm Oil Mill and estates owned by PT. Berkat sawit sejati

1.5 Location of the palm oil mill.

The 12 month output is the average over any 12 month period and the actual production for the 12 months from the date of certification will be included in the first annual summary. These figures exclude any output product from non-certified suppliers.

Palm Oil Mill (POM) Location address

GPS reference.

Name Longitude Latitude

PT. Berkat Sawit Sejati Desa Tampang Baru, Kecamatan Bayung Lencir, Kabupaten Musi Banyuasin, Propinsi Sumatera Selatan, Indonesia.

103° 42’ 41.9” E

2° 19’ 9.4” S

1.6 Metric tonnages certified and projected outputs. (These figures exclude any output product from non-certified suppliers).

Name of mill Projected from last audit. (MT) Actual production * (MT)

FFB CPO PK PKO PKE FFB CPO PK PKO** PKE**

PT. Berkat Sawit Sejati

247,329 64,305 13,930 6,352 7,160 267,013 70,979 14,419 6,488 7,642

. Projected production for next 12 months (MT)

FFB CPO PK PKO** PKE**

291,425 80,142 17,486 7,868 9,267

Note: *) Actual production 8 April 2011 – 29 February 2012 + estimated production March 2012 and 01-07 April 2012. **) PKO and PKE produced by PT. BSS KCP at another location which is RSPO SCCS certified (certicate No.

C813184CU-RSPO SCCS-01-02-2011, dated 19 July 2011 audited by CUC. System for IP, SG, MB mechanism is in place in PT. BSS POM.






1.7 General description of supply base The supply base comprises Sei Tungkal estate and Sei Berau estate of PT. Berkat Sawit Sejati. The area of oil palm plantation are 11,538.8 ha according the HGU, and the planted area is 10,862 ha and also receives FFB from third parties. The mill processes 90 ton FFB per hour. The details of the supply base are listed in table 1.7.1, 1.7.2, 1.7.3 and 1.7.4 below.

1.7.1 Location of the supply base.

Oil Palm Plantation (OPP) Location address GPS reference.

CU Code Name Longitude Latitude

OPP 1 Sei Tungkal Estate (PT. Berkat Sawit Sejati)

Desa Pangkalan Tungkal, Kec. Tungkal Jaya, Kabupaten Musi Banyuasin, Propinsi Sumatera Selatan.

103o 44’ 53.3” E 2

o 21’ 02.5” S

OPP 2 Sei Berau Estate (PT. Berkat Sawit Sejati)

Desa Tampang Baru, Kec. Bayung Lencir, Kabupaten Musi Banyuasin, Propinsi Sumatera Selatan

103o 41’ 57.0” E 2

o 19’ 12.0” S

1.7.2 Statistics of the supply base and estimated tonnes of FFB produced per year.

CU Code Name Area of oil palm (ha) EstTonnes FFB/yr

Planting years Cycle (years) Total area Mature area

OPP 1 Sei Tungkal Estate (PT. Berkat Sawit Sejati)

5,384 5,382 143,521 1998-2000, 2004-2006, 2011

25

OPP 2 Sei Berau Estate (PT. Berkat Sawit Sejati)

5,478 5,414 147,904 1999-2000, 2005-2007, 2009, 2011

25

Total 10,862 10,796 291,425

Note: There is a change of acreage due to re-survey areal by Earthline consultant.

1.7.3 Percentage of planted oil palm by different age ranges.

CU Code Planting years by 5 year ranges.

1996 - 2000 2001 - 2005 2006 - 2010 2011 - 2015 Total

OPP 1 1,016 (9.35%) 3,016 (27.78%) 1,350 (12.43%) 2 (0.02%) 5,384 (49.58%)

OPP 2 677 (6.23%) 2,079 (19.14%) 2,658 (24.47%) 64 (0.58%) 5,478 (50.42%)

Total 1,693 (15.58%) 5,095 (46.92%) 4,008 (36.90%) 66 (0.60%) 10,862 (100.00%)

1.7.4 Calculation of the number of production units (N) to sample for the mill.

N = 0.8√y, where y is the number of units, with the result always to be rounded UP to the next whole integer. Where only a sample of the supply base is assessed, units not previously assessed, or assessed earlier in the certification programme, are to be preferred over those more recently assessed.

For the mill, how many units make up the production base?

Owned estates (Y) N = 0.8√Y Smallholders (Z) N = 0.8√Z

2 2 No associated or scheme smallholder during this audit.

-

Explanation as to the selection of estates sampled.

The number of sample according the formula which mention above, the resul of calculation is 1.13 (roundup 2 estate)

1.8 Progress of associated smallholders or out growers towards compliance with relevant standards - should be in

accordance to the 3 year implementation plan.

Not applicable. PT Berkat Sawit Sejati does not have associated smallholders or scheme smallholders.






1.9 Location map for the supply base.

Map 1: Map showing the location of estates and palm oil mill in Indonesia.

Map 2: Map showing the location of estates and palm oil mill in South Sumatra.






Map 3: Map showing the location of the estate, palm oil mill and neighbouring entities.











2 PARTIAL CERTIFICATION. The rules for partial certification allow organizations that have a majority holding in and / or management control of more than one autonomous company growing oil palm to certify individual management units and / or subsidiary companies subject to certain rules.

2.1 Management structure.

Section Criteria Yes/No

2.1.1 Is the certified operation (POM and supply base as detailed above) a stand-alone operation and there are no other plantations or mills owned by the same company? Yes, PT. BSS is a stand alone (no subsidiries).

Yes

2.1.2 Is the certified operation part of a simple structure of operations owned by one company?

Yes

2.1.3 Are there statements of the ultimate controlling shareholders and directors in the managing agency company/companies:

a. Explaining the legal relationship and the management arrangements with the subsidiary companies and / or with any operating groups?

N/A

2.1.4 b. A statement of commitment to complying with the spirit of the RSPO for all companies and subsidiaries involved with the growing of oil palm and for the production of palm oil?

N/A

2.1.5 Is there a time bound plan in place for all subsidiaries, estates and palm oil mills? N/A

2.1.6 Is the parent company or one of its majority owned and / or managed subsidiaries a member of RSPO.

N/A

2.2 Non-compliance identified with 2.1 above.

Section Non-compliance findings NC raised. Category

2.2.1 There is no explanation as to the company’s structure and therefore it Is not possible to conduct an effective audit against the rules for partial certification.

N/A -

2.2.2 There is no statement of commitment to complying with the spirit of the RSPO for all companies within the company structure.

N/A -

2.2.3 There is no time bound plan in place for the certification for all subsidiaries, estates and mills.

N/A -

2.2.4 No applicable membership of the RSPO. N/A -

2.3 Summary of the time bound plan.

Section Requirement. Findings and any action required. Compliance

2.3.1 Does the plan include all subsidiaries, estates and mills?

- N/A

2.3.2 Is the time bound plan challenging? Age of plantations. Location. Mill development. Infrastructure. Compliance with applicable law.

- N/A

2.3.3 Have there been any changes since the last audit? Are they justified?

- N/A

2.3.4 If there have been changes, what circumstances have occurred?

- N/A

2.3.5 Have there been any stakeholder comments?

- N/A

2.3.6 Have there been any newly acquired subsidiaries?

- N/A

2.3.7 Have there been any isolated lapses in the implementation of the plan?

- N/A

2.3.8 Has there been any systematic failure to proceed with the implementation of the plan?

- N/A

2.3.9 General statement as to progress made since the last audit:

- N/A






2.4 Un-certified units or holdings.

NOTE: Companies may demonstrate compliance by clear evidence of a self-audit (i.e. an internal audit for all subsidiaries, estates and palm oil mills.

Section Requirement. Findings and any action required.

2.4.1 Did the company conduct an internal audit? If so, has a positive assurance statement been produced?

N/A

2.4.2 No replacement after dates defined in NIs Criterion 7.3 of:

Primary forest.

Any area identified as containing High Conservation Values (HCVs).

Any area required to maintain or enhance HCVs in accordance with RSPO criterion 7.3.

N/A

2.4.3 Any new plantings since January 1st

2010 must comply with the RSPO New Plantings Procedure.

N/A

2.4.4 Any Land conflicts are being resolved through a mutually agreed process, e.g. RSPO Grievance procedure or Dispute Settlement Facility, in accordance with RSPO criteria 6.4, 7.5 and 7.6.

N/A

2.4.5 Any Labour disputes are being resolved through a mutually agreed process, in accordance with RSPO criterion 6.3.

N/A

2.4.6 Any Legal non-compliance is being resolved in accordance with the legal requirements, with reference to RSPO criteria 2.1 and 2.2.

N/A

2.5 Summary of the findings for partial certification.

The audit team assessed compliance with the above requirements during this audit. Failure to address any non-compliance identified may lead to certification suspension.

Not applicable (N/A)

2.6 Partial certification audit agenda. Date Location Agenda

N/A N/A N/A






3 Audit process. 3.1 Certification Body.

Control Union Certifications is a member of the Control Union World Group - an international inspection and certification body. CU performs Audits and certification in many agricultural based fields such as FSC, RSPO, and Organic production, Sustainable Textile Production, Organic Exchange, Eurepgap, HACCP, BRC, GMP and GTP. CU is accredited by the Dutch Council of Accreditation (RVA) on the European quality standard EN 45011 for the inspection and certification of CU Organic program (according to the EU regulation 2092/91) and EUREPGAP program. When requested a copy of the accreditation certificate can be obtained from CU.

3.2 Audit team.

Lead auditor: Simon Selvaraj

Team member: Haeruddin

Team member: Y.W. Rahmanto

Team member: Selvanathan

Qualifications of the lead assessor: Simon Selvaraj

REQUIREMENT QUALIFICATIONS

A minimum of post high school (post-secondary school) training in either agriculture/forestry, environmental science or social sciences;

Post graduate qualification in agriculture with more than 5 years working experience in plantation.

At least 5 years professional experience in area of work relevant to the assessment (e.g., palm oil management; agriculture/forestry; ecology; social science);

More than 5 years working experience in plantation. Involved in RSPO auditing since November 2010. Fully trained in similar agriculture certification programmes such as RSPO SCCS, Global Gap, ISCC and GMP.

Training in the practical application of the RSPO criteria, and RSPO certification systems;

Involved in RSPO assessment since November 2010. Member of CUC RSPO audit team. Involved in audits conducted in Malaysia and Indonesia.

Successfully completion of an ISO 9000:19011 lead auditors course;

Completed ISO 9001:2008 lead auditor course in July 2011. Successfully completed RSPO Lead Auditor Course.

Training in the practical application of RSPO certification systems.

Member of CUC RSPO audit team since November 2010. Involved in audits conducted in Malaysia and Indonesia since November 2010 in 10 different companies in Malaysia and Indonesia.

A supervised period of training in practical auditing against the RSPO criteria or similar sustainability standards, with a minimum of 15 days audit experience and at least 3 audits at different organisations.

Member of CUC RSPO audit team since November 2010. Involved in audits conducted in Malaysia and Indonesia since November 2010 in more than 10 different companies in Malaysia and Indonesia.

RSPO endorsed lead auditors course. Completed & Passed RSPO Lead Auditor training in 2011

Signed code of conduct. Yes.

General knowledge of: Yes RSPO P&C standards. Yes CUC organizational structure. Yes CUC quality systems. Yes Lead auditor role. Yes Report writing. Yes Stakeholder consultation. Yes Certification decision process. Yes RSPO SCCS program manual. Yes CUC filing systems. Yes Correct use of RSPO trademarks. Yes History and objectives of RSPO. Yes CV available. Yes Completion of CUC RSPO lead auditor training. Completed CUC RSPO Lead Auditor training in 2011






Qualifications of assessment team.

RSPO REQUIREMENT Team member QUALIFICATIONS

Fluent in main local languages and English.

Haeruddin Fluent in local language (Indonesian citizen) and able to understand English.

Y.W. Rahmanto Fluent in local language (Indonesian citizen) and able to understand English.

Selvanathan Able to understand local language and fluent in English.

Field working experience in the palm oil sector, or a demonstrable equivalent.

Haeruddin Professional forester and oil palm plantation since 1995. Experience in RSPO, 4C, Global Gap, FSC, UTZcertified, and Organic farming auditing.

Y.W. Rahmanto Professional in oil palm plantation since 2008. Experience in RSPO, FSC, Café Practices and organic farming auditing.

Good agricultural practices (GAP), integrated pest management (IPM), pesticide and fertilizer use.

Haeruddin Professional forester and oil palm plantation since 1995. Experience in audit RSPO, 4C, Global Gap, FSC, UTZcertified, and Organic farming auditing.


Health and Safety auditing on the farm and in processing facilities. (For example OHSAS 18001 or occupational. Health and safety assurance system).

Haeruddin Professional forester and oil palm plantation since 1995. Experience in audit RSPO, 4C, Global Gap, FSC, UTZ certified, and Organic farming auditing.


Selvanathan Professional in Auditing of Social and OHSAS.

Workers welfare issues and social auditing experience. (For example with SA8000 or related social or ethical accountability codes).

Haeruddin Professional forester and oil palm plantation since 1995. Experience in audit RSPO, 4C, Global Gap, FSC, UTZ certified, and Organic farming auditing.


Selvanathan Professional in Auditing of Social and OHSAS.

Environmental and ecological auditing. (For example experience with organic agriculture, ISO 14001 or environmental management systems).

Haeruddin Professional forester and oil palm plantation since 1995. Experience in audit FSC, 4C, FSC, UTZ certified, Global Gap, Organic farming auditing. Completely ISO 14001-EMS lead auditor training in December 2010.


Economic issues. Haeruddin Professional forester and oil palm plantation since 1995. Experience in audit RSPO, 4C, Global Gap, FSC, UTZcertified, and Organic farming auditing.






3.3 Audit methodology.

3.3.1 General overview.

The Audit was carried out in conformity with the procedures as laid down in the CUC RSPO Procedure Manual and the program manual for the assessor and certifier. During the Audit the qualified CUC assessors used the RSPO standard as endorsed for the country in which the Audit took place and recorded their findings. For each estate and small holder identified to be included in the sample for this audit, the original main Audit checklist was used, which includes any updates from previous annual surveillance audits. Workers and local communities were interviewed and evidence sought to confirm ongoing compliance to include:

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

Field inspections. Herbicide application programmes. Harvesting sites and efficiency. Fertilising operations. SOP’s. Soil maps. Land preparation. Ground cover. IPM. First aiders and boxes. Ground cover. Soil erosion. Field observations of all operations.

Worker interviews. OSH. Sexual, religious, racial harassment. Pay and contracts. Child labour. First aid. Awareness.

Re-planting sites. Zero burn.

HCV’s. Identification. Management plans. Environmental Impact Assessments. Implementation.

Riparian zones. Width. Current and future management. Non maintenance regimes.

Water management. Water courses. Water monitoring.

Road maintenance. Run off.

Social amenities. Social Impact Audits.

Local communities. Contributions made. Employment opportunities. Social impacts. Complaints procedures.

Work shops. Oil traps. Safe working environment. PPE. Diesel tanks. Environmental waste management.

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

Documentation review. Palm Oil mill audits include:

Mill and workshop inspections. Documentation. Worker interviews.

Mill. SOP’s. Safe working environment. Gen sets. Walk ways. Signs. EFB. POME treatment. Emissions. Mass balance. Diesel tanks. PPE. Fire extinguishers. First aiders and boxes. Fuel and water usage.

OSH. Training. Management structure. First aiders.

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

Worker interviews. OSH. Sexual, religious, racial harassment. Pay and contracts. Verification. Verification of implementation was done through field observations, workshop and chemical store inspections, worker and community interviews and mill inspections as summarised above.






3.3.2 Audit agenda. 12 March 2012

Location: PT. BSS Office

Time: 13.00 -13.30

Auditors: Purpose:

Simon Selvaraj Haeruddin Y.W. Rahmanto Selvanathan

Opening meeting. Introduction by team leader. Introduction of team members and assessment agenda.

Presentation by PT. BSS

Time 13.30 – 17.00

Location: PT. BSS office and PT. BSS Palm oil mill

Auditors: Purpose:

Simon Selvaraj: SCCS Verification audit for the mill. Document Audit. Haeruddin: Doc. Review of the Mill Y.W. Rahmanto and Selvanathan: Mill and workshop inspections. Worker interviews (OSH. Sexual, religious, racial harassment. Pay and contracts.),

Safe working environment. Gen sets. Walk ways. Signs. EFB. POME treatment. Emissions. Mass balance. Diesel tanks. PPE. Fire extinguishers. First aiders and boxes. Fuel and water usage.

OSH. Training. Management structure. First aiders.

13 March 2012

Location: Sei Tungkal estate and Sei Berau estate

Time: 08.00 – 17.00

Auditors: Purpose:

Haeruddin and Simon selvaraj: Document review of estates Y. W. Rahmanto and Selvanathan: Field inspections. Herbicide application programmes. Harvesting sites and efficiency. Fertilising operations., Land

preparation. Ground cover. IPM. First aiders and boxes. Ground cover. Soil erosion. Field observations of all operations.

Worker interviews. OHS. Sexual, religious, racial harassment. Pay and contracts. Child labour. First aid. Awareness.

HCV’s. Identification. Management plans. Environmental Impact Assessments. Implementation.

Riparian zones. Width. Current and future management. Non maintenance regimes.

Boundaries inspection.

Water management. Water courses. Water monitoring.

Social amenities. Social Impact Assessments.

Local communities. Contributions made. Employment opportunities. Social impacts. Complaints procedures.

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

Fertilizer store.

Workshops.

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

Interview with community and stakeholder.

Etc.

14 March 2012


Time: 08.00 – 10.30

Auditors: Purpose:

All auditors Prepare closing meeting and complete the report


Time: 10.30 – 12.00

Auditors: Purpose:

All auditors Closing meeting

Number of auditors participating: 4 Number of days spent for the audit on site: 3 Total number of person days used for the audit on site: 12






4 ASSESSMENT FINDINGS. 4.1 Lead assessor’s summary and recommendation for certification:

It is found that PT Berkat Sawit Sejati is continuosly implementing RSPO P&C requirements and full compliance found throughout the assessment. The mill was audited against RSPO SCCS requirement and found to be in full compliance too. All the relevant modules were used to assess and the mill have all the procedures for IP, SG & MB Model. A separate SCCS report is produced and available upon request. However, an observation raised and details are registered in Observation register below.

With full commitment towards RSPO P&C and RSPO SCCS implementation, it is therefore the recommendation of the lead assessor that: To sustain the certificate of compliance. Signed:

Name: Simon Selvaraj Date: 15 March 2012

4.2 Summary of the findings by principle and a sample of the criteria.

Over the 5 year period of the life of the certificate, there will be 4 annual surveillance audits Identified Non-Conformities and noteworthy Positive and Negative Observations.

The RSPO require that this report contains findings by each principle and some example criteria. Please see table below.

4.2.1 Principle 1 Records of information request from internal and external stakeholders are kept and updated regularly in stakeholder consultation book. Estate and POM provide all information that are classified as non-confidential to stakeholders on CSR, HCV and Environmental practices, Social practices and legal issues relevant to RSPO P&C. Information are available in local language which can be understood easily and stakeholders are invited for meeting to participate in certain decision making.

1.1 Records of information request was recorded in “Record of Information request book” that mention date, the person who request information, requested information, person in charge. All request of information are documented well and available upon request. Response of information was recorded in the same book of information request. All information request had been addressed timely manner. i.e: information requested from Plantation Department District of Musi Banyuasin for verification of land application, on 24 may 2011, the company has given information about land application and result of BOD measurement. The retention of all documents according to the policy no. BSS-POD/01.01/6.30, date 11 January 2011 is 10 years for financial, operational and reporting document and 1 year for labour document.

1.2 All management documents on legal, environmental, health safety and social issues are available. The legal documents, include Izin Lokasi (Location permit), Ijin Prinsip (Principle permit), Izin Usaha Perkebunan (Plantation operation permit), HGU (Land Title) and the environmental documents for AMDAL (Environmental and Social Impact Analysis). Laporan Pelaksanaan Rencana Pengelolaan Lingkungan Hidup dan Rencana Pemantauan Lingkungan Hidup (RKL & RPL) report will be submitted to the Environmental Department of District Musi Banyuasin per semester, document of Health and Safety Program (K3 program), and social impact assessment. All the documents are available.

4.2.2 Principle 2 All the relevant legal documents are available as per main assessment. During this second annual assessment it is noted that all the permits are valid as per local, national and






international regulation.

4.2.3 Principle 3 Working plan for 10 years from 2012- 2021 is available in economic policy No. BSS-RSPV/03.01/1.2 Rev. 02 January 2012 and BSS-RSPV/02.02/1.2, rev. 01 February 2012, covering: production of CPO, PK, Incoming and selling of CPO and PK, OER and training plan. No replanting planned in the coming years, first replanting to take place in 2024.

4.2.4 Principle 4 The company has plantation procedures from buying seedlings (nursery stage), land preparation through to harvesting and replanting in estate and procedures from receive FFB until despatch of CPK/PK in mill, the procedures has implemented and documented for all stages of activities both plantation and mill. The procedures were regularly review and where necessary revised as per present operational requirement. Also SCCS procedures available in the mill to handle IP, SG and MB model. Riparian zones were restored by planting jungle trees and no chemical spraying within the zone. Beneficial plants are planted as part of IPM and legume crops (Mucuna bracteata) as cover crop to control erosion. Data on fertilizer application and realisation of the plan available being followed as per the recommendation. Map shows disposal areas of solid waste. Soil and Foliar analysis is carried out annually. PT. Berkat Sawit Sejati has eliminited the use of Paraquat.

4.2 The company carry out soil and leaf sampling analysis annually by internal laboratory (R and D Department) in Medan, e.g.: The report of soil and leaf sampling analysis Sei Tungkal estate on May 2011. Record of fertilizer and land application is on daily basis and reported every month, e.g. The recommendation for applying fertilizer in 2012 in Sei Tungkal estate is borate (0.10 kg/palm tree), kiserite (1.25 kg/plam tree) NPK (3.0 kg/palm tree), phosphate (1,0 kg/plam tree), MOP (1.0 kg/palm tree) and realisation of using Kiserite January 2012 in Division C, sub blok I.54, apply 1,700 kg for 13 ha (1 ha = 132 palm tree) or 0.99 kg/palm tree and Sei Berau estate urea (0.10 kg/palm tree), borate (0.10 kg/palm tree), kiserite (1.25 kg/plam tree) NPK (3.0 kg/palm tree), phosphate (1,0 kg/plam tree) and realisation of using NPK on January 2012 in Division A, sub blok F1, apply 13,950 kg NPK for 35 ha (1 ha = 140 palm tree) or 2.85 kg/palm tree.

4.6 List of approved agrochemical by Agriculture Minister year 2011 and list of WHO clasification available and documented. During audit it is found that all the pesticides used by the company is in accordance with the list of agrochemical. Record of pesticides available in monthly report of “Rencana dan Realisasi Kerja 2012”. Kind of pesticides which has been used are centatine (permethrin), Cymbush (Sipermetrin), Garlon 480 EC (triklopir), Ally (Metsulfuron methyl), Icon (Lambda cyhalothrin),Lindomin (Dimetitl amina), Manthene (Acephate), Sime ebor baits (warfarin), Zifo (Ziram), Meta Prima (metyl Metsulfuron)t), Smart 486 (Isopropilamiania glyfospahate). The record of pesticides has applied in field available and documented, i,e. Smart 486 used in Divisi C, on January 2012, applied 56 litre for 40 ha in Sei berau estate. All relevant information were recorded in agrochemical register book which records the MSDS, chemical usage, personnel handling the chemicals. Stocks are monitored through bin cards and recorded in the Daily chemical dispense book. e.g.Divisi C, block J.51, dated 21 February 2012, 12 sprayer workers, applied 19 ha, Smart 486 18 liter.

4.2.5 Principle 5 SEIA report, regular report (RKL/RPL), HCV assessment and GAP procedures is being well observed and implemented by the company.

5.1 Document of enviromental impact assessment including social impact assessment known as AMDAL (analisis Mengenai Dampak Lingkungan), include RKL (Environmental Management Plan) and RPL (Enviromental Monitoring Plan) available in place and approved by Head of Distrcit Musi Banyuasin, South Sumatera province No. 1566, yaer 2008, dated 27 October 2008. There is a revision of AMDAL due to the upgrade in the capacity of the mill and a new CDM project, the company has sent proposal of revision of AMDAL on 27 February 2012 and received by Bapedalda District of Musi Banyuasin on 28 February 2012 and still in progress now. Document of RKL – RPL has been submitted regularly every 6 month to local authority (Bapedalda), e.g. Report of RKL-RPL Semester I (January – June 2011) and semester II (July – December 2011) The evidence that it has been reported is confirmed by the letter from the local authority.

5.5 Zero burning policy implemented with the relevant procedures as per the policy dated 27 September 2007.Sign boards of no burning were checked and maintained every year and recorded. Document No. BSS-POD/01.01/5.5.0 date 1 October 2006, which has a procedure to prevent






land fire and handling of fire if any occurs . The procedures has been implemented in estates and mill. Fire extinguishers found on various locations in the line site and mill, there are 92 units, the fire eextinguishers was checked every month, the last checked 27 February 2012 for Sei Berau estate, 6 March 2012 for Sei Tungkal estate and 7 March 2012 for mill. All extinguisher are available as per the risk assessment and maps of location are available.

4.2.6 Principle 6 All information from the AMDAL is documented and a management plan is developed to address any negative impacts. Half yearly, monitoring report is incorporated with the organization (RKL/RPL). Communication and consultation with local community through monthly gathering and social activities. Communication and consultation with the stakeholders is evident. Minutes of the meeting are recorded. Flow chart of the procedure is posted on the notice board to create and ensure awareness among the members. FPIC was implemented to resolve of any complaint and disputes.

6.4 Standard Operating Procedure (SOP) of land compensation including procedures on identification, calculation, and compensation No. BSS-SOP/ 01.01/1., rev. 28 November 2008 and procedure of documentation of land compensation no. BSS-SOP/01.01/1.1, dated 10 March 2008. The procedure has been implemented, e.g land Compensation for Mr. Alfon Sitepu who is land enclave owner 13.50 hectares, the negotiation start from 2 November 2011 and agreement reached on 20 December 2011 with compensation Rp. 270.000.000. The documents of land compensation are receipt, land compensation agreement and photograph evidence. Record of person compensated with the date, name, address, amount of compensation and copy of identity card. Written records of negotiation available in place.

6.6 The policy to freedom association was mentioned in POD no. MM-POD/01.01/ 1.2.12, date 28 April 2008. Meeting with labour union was conducted monthly and Minutes of meeting available in place, e.g. Minutes of meeting worker union with management dated 03 February 2012 at Sei Tungkal office, attended 40 representatif of company and Worker union. The issues has raised during meeting is harvester transportation, the different of salary of supervisor, facilities, tax, ID card for workers, etc. All issues has been responded by company sufficiently and PKB – Perjanjian Kerja Bersama (Collective Agreement) for 2011-/2013 approved by Manpower Department of District Musi Banyuasin.

6.8 Seen policy of equal opportunities established. Communicated and displayed and publically available. During audit it is noticed that it could be interpreted as potential discrimination in the form of age practiced as standard operating procedure BSS-SOP/01.01/6.6 Penerimaan Karyawan Baru; par 7.1 limits the new workers by age of 40 years old. However, the SOP was based on the agreement in the PKB (Collective Agreement between the Union and Management) as required in 6.6.2. (This is raised as Observation under 6.8.2)

6.9 Seen policy on sexual harassment established. Communicated and displayed and publically available.

6.10 FFB prices set by Agriculture Department of Province South Sumatra at mid of the month and the price list publicly available in the mill and able to access by outgrowers and third parties. Procedure for fixing the price is in file BSS-SOP/03.01/2.2.1 dated 10 December 2007, the procedure is publicly available. Documents of contracts were sighted and thought them fair, legal and transparent. The procedure of external grievance and complaint no.BSS-SOP/01.01/5.1 dated 01 December 2007 can be solve if any grievance both company and contractors. The company has signed contract with many contractors, e.g. CV. Multi prima Perkasa, CV. Subur Sarana sejahtera, PT. Sumber Diri sembilan, (transporter CPO), PT. Multi prima Perkasa (supplier FFB), PT. Indo karya Internusa (Tank Storage) and CV. Pelita Indah (Building contractor). e.g. Contract No. 003/BSS-MPP/TBS/VI/2011 and the new contract 001/BSS-PO/TBS/III/2012, between Abdul rahman AB (CV. Multi prima perkasa), dated 16 December 2011. There is no grievances was noted during this audit from the contractors. All contractors has been paid according to the contract at timely manner, e.g. payment for CV. Multi Prima perkasa (supplier FFB) on 01 December 2011 are Rp. 31,525,988 for 25,8 ton FFB and CV. Pelita Indah has been paid on 16 January 2012 Rp. 106,920,000 for phase 1.

3.2.7 Principle 7 Plantings after 2005 are replanting of the local communities’ land surrendered to the management through the compensation mechanism. These land were comprised of cultivated






land with rubber, cash crops and other agricultural crops, shrubland and ex-tapioca cropping by previous owner. Nevertheless the social environmental impact assessments have been carried out and high conservation value assessments and social impact assessments were also carried out. The HCV and SIA management plans have been implemented accorddingly and records were inspected to be in order. The company has zero burning policy, soil survey maps (no fragile soils found in the concession) and compensation mechanism in place.

3.2.8 Principle 8 The company has committed to a process of continuous improvement by adopting the RSPO P & C. An internal audit and management review is done at least yearly to evaluate the systems. Action plans have been developed for continuous improvement in key operations through quality and environmental objectives for the mill and estates, such as reducing fossil fuel consumption with CDM project methane capture, reducing usage of agrochemicals by beneficial plant and increasing the new facilities.

8.1 The company has provided a document for monitoring the environmental and social parameters, namely document Environmental Management and Monitoring Plans (RKL/RPL). The company is still carrying out Integrated Pest Management (IPM) with beneficial Plants: Cassia and Tunera for leaf eating pests for reduce chemical usage,. CDM – Biogas plant project to capture methane from POME to reduce GHG and renewable energy (December 2011 - September 2012) Building new houses for workers 100 units and staff 6 units to provide permanent concrete houses, new creche (1 unit), new library for school (1 unit), minimarket (1 unit), new school bus (1 unit), install of water treatment (1 unit). Villages Development plantation (Kas desa) 5 ha at Pangkalan Tungkal village for local development.

4.3 Sample criteria for inclusion in this report on an annual basis during the lifetime of the certificate. Criterion Year 1 Year 2 Year 3 Year 4 Criterion Year 1 Year 2 Year 3 Year 4

1.1 x x x x 6.1 x

1.2 x x x x 6.2 x

2.1 x 6.3 x

2.2 x 6.4 x

2.3 x 6.5 x

3.1 x x 6.6 x

4.1 x 6.7 x

4.2 x 6.8 x x

4.3 x 6.9 x x

4.4 x 6.10 x

4.5 x 6.11 x x

4.6 x 7.1 x

4.7 x 7.2 x

4.8: x 7.3 x

5.1 x 7.4 x

5.2 x 7.5 x

5.3 x 7.6 x

5.4 x 7.7 x

5.5 x 8.1 x x x X

5.6 x

4.4 Non conformity register and reports on previous NCs.

This section gives an over view of new or revised non-conformities raised during this audit and of action taken to close out non-conformities raised during the previous audits.

If a minor-non-conformity raised at the last audit, is not closed out, then this will be raised to Major status and the company given 60 days to close this out.

The NC number is comprised of 2 parts to include the year in which the NC is raised as well as a sequential number.

Annual audit date: 12th

– 14th

March 2012

Number settled: Nil

Number outstanding: Nil






Status of non-conformities (both minor and major) previously identified, even if already closed out.

NC number: Nil

Category: Nil

Aspect of standard: Nil

Evidence of NC: Nil

Comment at ASA: Nil

Observations.

Client name: PT. Berkat sawit Sejati

Date raised: 14 March 2012

Raised by: Simon Selvaraj

In was noticed that it could be interpreted as potential discrimination in the form of age practiced as standard operating procedure BSS-SOP/01.01/6.6 Penerimaan Karyawan Baru; par 7.1 limits the new workers by age of 40 years old. However, the SOP was based on the agreement in the PKB (Collective Agreement between the Union and Management) as required in 6.6.2.

Assessors signature: Date: 14 March 2012

4.5 Issues raised during stakeholder consultation and company responses. The subjects raised and responses by the company will be reviewed at the first annual surveillance audit. Subsequent annual surveillance audit reports will include any subjects raised during the period of certification and during the annual surveillance audit.

Subject raised Company response and proposed action to be taken.

Audit team findings

Stakeholder – Mr Shukri [Head of Village] of Desa Tampang Baru requested to be ackowledge of the audit by the company.

The company will communicate; although it is not required by the ASA guidelines

Positive comment

Stakeholder – Mr Shukri [Head of Village] of Desa Tampang Baru requested for his people to be “positive discriminate” for work availability.

Will look into the situation, and if found suitable; such “positive discrimination” will be considered

The audit team accept the company action and will further investigate on next ASA.

Worker's representatives highlighted that there are no any labour disputes.

- Positive comment.

Ibu Utami Perwaninsi of Sei Berau requested for possible loss of subsistence income when the Minimarket in operation

Will look into ways to reduce the subsistence lost of income as possible by letting her to buy from minimarket, as price is less and sell through her own house-shop

SIA has been conducted for the minimarket, however the prolonged effect is not assessed efectively and therefore the audit team accept the future action from the organization and will further investigate on next ASA.






5 RSPO SUPPLY CHAIN CERTIFICATION

The palm mill mentioned in the scope of the audit was audited against the requirements of the following: RSPO Supply Chain Certification Systems. November 2011. RSPO Supply Chain Certification Standard. November 2011. As required, a separate SCC report and recommendation for certification has been prepared.

5.1 POM included in the scope of the audit

CU code: Name of facility: Location address: Supply chain model:

POM PT Berkat Sawit Sejati Palm Oil Mill

Desa Tampang Baru, Kecamatan Bayung Lencir, Kabupaten Musi Banyuasin, Propinsi Sumatera Selatan, Indonesia

IP, SG & MB

5.2 Summary report including a brief description of the scope of certification

The palm oil mill sources both certified and non-certified FFB and processes it all together to produce RSPO CPO and RSPO PK through the mass balance model. Actual quantities of certified and non-certified FFB delivered to the mill are entered into a central computer system and the actual quantities of CPO and PK produced are also entered and the OER is known. The quantities of certified CPO and PK are shown in real time and summarised each day on a spread sheet as are the quantities of non-certified CPO and PK. Sales of CPO/MB and PK/MB are made in real time and the quantity of sales never exceeds that shown in the spread sheet. However, if the mill has demand from buyer for IP and SG model, then the mill have procedures and mechanism to handle by having dedicated tanks.

5.3 Confirmation of the company’s summary of annual certified volume of RSPO certified Palm Oil or Palm Kernel Oil

over a specified period

Product: CPO mt

PK mt

Specified 12 month period:

CU Code

POM 70,979 14,419 Actual productions 8th April 2011- 29th Feb 2012 + estimation till 7th April 2012.

5.4 Final certification decision by Control Union for the RSPO SCCS Audit

Recommendations made: Yes

Summary of non-compliances: Full compliance was found.

Certification status of client: The POM included in the scope of this audit demonstrated full compliance with the RSPO SCCS. With effect from the certification date given in the RSPOPC certificate, this POM mentioned in the scope of this report is considered to be certified in accordance with the RSPO SCCS.






6 CERTIFIED ORGANISATION’S ACKNOWLEDGEMENT OF INTERNAL RESPONSIBILITY 6.1 Date of next ASA.

The provisional date for the next ASA is: February 2013

6.2 Date for closure of non-conformities. (See sections above for details of any NCs).

Any major NCs to be closed by: -

All minor NCs to be closed by: -

6.3 Signing by the client.

I the undersigned, being the most senior relevant management representative of the operation seeking or holding certification, agree with the contents and audit findings as presented in this document . I also confirm:

Acceptance of liability in execution of the instructions given.

That this company was made aware that the findings of the audit team are tentative; pending review and decision making by the duly designated representatives of Control Union Certifications.

That during the closing meeting all agenda items were covered by the lead auditor.

Name: Dr Gan Lian Tiong

Position: Head of Sustainability,

Signature:

Date: 15th

March, 2012

6.4 Signing by the lead auditor.

Signed by the lead auditor:

I the undersigned, being the lead auditor, confirm that this report is an accurate record of the findings and of the closing meeting. I further confirm that the summary of the findings as presented in this report are a true representation of the actual findings of the audit team.

Name: Simon selvaraj

Position: Lead Auditor

Signature:

Date: 15th

March 2012

6.5 Signing by the certifier.

Signed by the certifier

I the undersigned, being the certifier, confirm that the information and conclusions included in this report have been prepared in good faith and that the certification decision has been based upon this information.

Name: Gerben Stegeman

Position: Certifier

Signature:

Date: 20th

March 2012






Appendix A : List of Abbreviations

AMDAL Analisis Mengenai Dampak Lingkungan (Enviromental and Social Impact Assessment)

ASA Annual Survillance Audit

BRC British Retail Consortium

BSS Berkat Sawit Sejati (Name of company)

CDM Clean development Mechanism

CHRA Chemical Health Risk Assessment

CoC Chain of Custody

CPO Crude Palm Oil

CSR Corporate Social Responsibility

CU Control Union

CUC Control Union Certifications

DOE Department of Environment

EFB Empty Fruit Bunch

EIA Environment Impact Assessment

ERT Endangered Rare or Threatened species

EU European Union

FFB Fresh Fruit Bunch

FSC Forest Stewardship Council

FSC COC Forest Stewardship Council Chain of Custody

FSC FM Forest Stewardship Council Forest Management

GGL Green Gold Label

GHG Green House Gasses

GMP Good Manufacturing Practice

GOTS Global Organic Textile Standard

GTP Good Trading Practice

GPS Global Positioning System

HACCP Hazard Analysis and Critical Control Point

HCV High Conservation Value

HCVF High Conservation Value Forest

IP Identify Preserved

IPM Integrated Pest Management

JAS Japanese Agricultural Standard

MB Mass Balance

MDC MDC Publishers Sdn Bhd ( Company Name)

MSDS Material Safety Data Sheet

NC Non Conformity

OE Organic Exchange

OSH Occupational Safety and Health

OSHAS Occupational Safety and Health Assessment Scheme

P&C Principle and Criteria

PEFC Programme for the Endorsement of Forest Certification

PK Palm Kernel

POME Palm Oil Mill Effluent

PPE Personal Protective Equipment

PT Perseroan Terbatas (Company limited)

RSPO Roundtable on Sustainable Palm Oil

RSPO NI Roundtable on Sustainable Palm Oil National Interpretation

RKL Rencana Kelola Lingkungan (Environmental Managemen Plan)

RPL Rencana pemantauan Lingkungan (Enviromental Monitoring Plan)

SA8000 Social Accountability 8000

SCCS Supply Chain Certification System

SG Segregation

SIA Social Impact Assessment

SOCSO Social Security Organisation

SOP Standard Operating Procedure

USDA/NOP United States Department of Agriculture – National Organic Program

WHO World Health Organizations

4C Common Code of Coffee Community