Audit Report

Transcription

Audit Report

Audit Report
App./Cert.
RSPO20006
Date
14/01/2012
Rev.02: 22/11/2012
PUBLIC SUMMARY REPORT
Client:
Site Address:
Standard(s):
PT. SMART Tbk. Batu Ampar Mill and Its Supply Bases
Batu Ampar Mill:
Kecamatan Kelumpang Hilir, Kabupaten Kotabaru, South
Kalimantan, Indonesia
Its Supply Bases:
Batu Ampar Estate
Batu Mulia Estate
Sungai Panci Estate
Sungai Panci Plasma
National Interpretation of RSPO Principles and Criteria for Sustainable Palm
Oil Production, Republic of Indonesia, May 2008
RSPO Supply Chain Certification System, November 2011 and RSPO
Supply Chain Certification Standard, Module E – CPO Mill: Module E Mass
Balance November 2011
DISCLAIMER:
This report has been prepared by SAI Global Indonesia (SAI Global) in respect of a Client's application for assessment by SAI Global. The purpose of the report is to comment upon
evidence of the Client's compliance with the standards or other criteria specified. The content of this report applies only to matters, which were evident to SAI Global at the time of
the audit within the audit scope. SAI Global does not warrant or otherwise comment upon the suitability of the contents of the report or the certificate for any particular purpose or
use. SAI Global accepts no liability whatsoever for consequences to, or actions taken by, third parties as a result of or in reliance upon information contained in this report or
certificate.
ACTIVITY ID: 363103
QEF08sa.RSPO.01 / Issue Date: 2009-Apr-15
© SAI Global Indonesia Copyright 2009
Page 1 of 68
Audit Report
Table of contents
Executive Overview
Abbreviations Used
Page
3
3
1.0
1.1
1.2
1.3
1.4
1.5
1.6
1.7
1.8
1.9
1.10
1.11
1.12
1.13
SCOPE OF THE CERTIFICATION ASSESSMENT
Introduction
Audit Objective
Scope of Certification
Location of Mill and Estates
Description of Supply Base
Date of Plantings
Other Certificates Held
Organisational Information/Contact Person
Time Bound Plan for Other Management Units
Area of Plantation
Approximate Tonnages Offered for Certification (CPO and PK)
Partial Certification
Date of Issue of Certificate and Scope of Certification
4
5
5
5
8
8
9
9
9
10
11
11
13
2.0
2.1
2.2
2.3
2.4
2.5
AUDIT PROCESS
Certification Body
Audit Methodology
Qualification of the Lead Auditor and Audit Team Members
Stakeholder Consultation
Date of Next Surveillance Visit
3.0
3.1
3.2
3.3
AUDIT FINDINGS
Summary of findings
Recommendation
Environmental and Social Risk for this scope of certification for planning
of the surveillance audit
Acknowledgement of Internal Responsibility and Formal Sign-off of
Assessment Findings
3.4
16
45
45
46
Page
List of Tables
1
2
3
4
5
6
7
8
Mill and Estates GPS Locations
Organisation FFB Production
Age Profiles of Planted Palms
Other Certificates Held by Mill and Estates
RSPO Certification Time Bound Plan of
Estates and Area Planted
Plantation Hectare Statement
List of internal and external stakeholder
6
8
8
9
10
11
11
15
List of Figures
1
Map of Mill and Estates Location
Page
7
List of Appendices
A
Audit Record
B
Nonconformities, Corrective Actions and Observations Summary
C
Stakeholder‟s issues and comment
D
Definition of, and action required with respect to audit findings
Page
49
52
62
68
Page 2 of 68
Audit Report
Executive Overview
SAI Global has audited PT. SMART Tbk. Batu Ampar Mill and Its Supply Bases operations
comprising one mill, four oil palm estates, support services and infrastructure. During the audit one
major nonconformity was found against criterion 2.2 of the National Interpretation of RSPO
Principles and Criteria for Sustainable Palm Oil Production, Republic of Indonesia, May 2008. It
was found that the operations comply with the requirements of the RSPO Supply Chain
Certification System, November 2011 and RSPO Supply Chain Certification Standard, Module E –
CPO Mill: Module E Mass Balance November 2011.
The major nonconformity has been corrected. The corrective action taken was reported in the body
of the report. Relevant data regarding partial certification requirements have also been completed
in June 2012. Therefore the recommendation from this audit is that Batu Ampar Mill and Its Supply
Bases be approved as a producer of RSPO Certified Sustainable Palm Oil and Palm Kernel.
Abbreviations Used
AAA
ANDAL
BAME
BAMM
BHL
BKM
BMLE
BLH
BOD
BPN
CEO
COD
CPO
CSR
D&L
DELH
EFB
FFB
GAR
GPS
HCV
HGU
HPH
IMT
IPB
IPM
ISO
KUD
LD
LOTO
MAA
MCAR
MSDS
MT
NGO
OHS
Agronomy Advisory Audit
Environmental Impact Analysis (Analisis Dampak Lingkungan)
Batu Ampar Estate
Batu Ampar Mill
Daily basis paid workers (Buruh Harian Lepas)
Log book of group leader activity (Buku Kegiatan Mandor)
Batu Mulia Estate
Local Agency of Environmental (Badan Lingkungan Hidup)
Biological Oxygen Demand
National Land Agency (Badan Pertanahan Nasional)
Chief Executive Officer
Chemical Oxygen Demand
Crude Palm Oil
Corporate Social Responsibility
Document and Legal
Document of Environmental Evaluation (Dokumen Evaluasi Lingkungan
Hidup)
Empty fruit bunches
Fresh Fruit Bunch
Golden Agri-Resources Limited
Global Positioning
High Conservation Value
Land Use Title (Hak Guna Usaha)
Forest Authority Concession (Hak Penguasaan Hutan)
PT. Ivo Mas Tunggal
Bogor Agricultural University (Institut Pertanian Bogor)
Integrated Pest Management
International Standards Organisation
Village Unit Cooperatives (Koperasi Unit Desa)
Lethal Dosage
Lock out tag out
Mill Advisory Audit
Management Committee Agronomy and Research
Material Safety Data Sheet
Metric Ton
Non Government Organisation
Occupational Health and Safety
Page 3 of 68
Audit Report
OIA
P2K3
PK
PKB
PKWT
POM
POME
PPE
RABQSA
RKL
RPL
RSPO
SA
SCCS
SHM
SIA
SKPM
SKU
SMD
SMARTRI
SOP
SPM
SPNA
SPNE
TLV
VPA
Operation Internal Audit
Safety Commitee
Palm Kernel
Mutual Working Agreement (Perjanjian Kerja Bersama)
Contracted worker (Pekerja Waktu Tertentu)
Palm Oil Mill
Palm Oil Mill Effluent
Personal Protective Equipment
Quality Society of Australia
Environmental Management Plan (Rencana Pengelolaan Lingkungan)
Environmental Monitoring Plan (Rencana Pemantauan Lingkungan)
Roundtable on Sustainable Palm Oil
Social Accountability
Supply Chain Certification System
Land Own Title (Surat Hak Milik)
Social Impact Assessment
Sungaii Kupang Mill
Permanent worker (Syarat Kerja Utama)
Senior Managing Director
SMART Research Institute
Standard Operation Procedure
Independent Worker Union (Serikat Pekerja Mandiri)
Sungai Panci Plasma
Sungai Panci Estate
Threshold Limit Value
Vice President of Agronomy
1.0
SCOPE OF THE CERTIFICATION ASSESSMENT
1.1
Introduction
SAI Global conducted an audit of PT. SMART Tbk. Batu Ampar Mill and Its Supply Bases on
10/01/2012 to 14/01/2012.
The purpose of this audit report is to summarise the degree of compliance with relevant criteria, as
defined on the cover page of this report, based on the evidence obtained during the audit of PT.
SMART Tbk. Batu Ampar Mill and Its Supply Bases..
SAI Global audits are carried out within the requirements of SAI Global procedures that also reflect
the requirements and guidance provided in the international standards relating to audit practice
such as ISO/IEC 17021, ISO 19011, RSPO Certification System and other normative criteria. SAI
Global Auditors are assigned to audit according to industry standard or technical competencies
appropriate to the organisation being audited. Details of such experience and competency are
maintained in our records. The audit team is detailed in the attached audit record.
In addition to the information contained in this audit report, SAI Global maintains files for each
client. These files contain details of organisation size and personnel as well as evidence collected
during preliminary and subsequent audit activities (Documentation Review and Scope) relevant to
the application for initial and continuing certification of your organisation.
Details of your primary contact persons and their contact details and site addresses are also
maintained. Please take care to advise us of any change that may affect the
application/certification or may assist us to keep your contact information up to date, as required by
SAI Global Terms and Conditions.
Page 4 of 68
Audit Report
Please note that this report is subject to independent review and approval. Should changes to the
outcomes of this report be necessary as a result of the review, a revised report will be issued and
will supersede this report.
1.2
Audit Objective
Certification Audit
To determine the implementation of your organization‟s on RSPO system; the capability and
effectiveness of the RSPO system in ensuring continual compliance with the requirements of the
National Interpretation of RSPO Principles and Criteria for Sustainable Palm Oil Production,
Republic of Indonesia, May 2008 and in meeting its specified objectives (indicator); and the
conformity of the RSPO system to stated principles, criteria and indicator.
The audit also conducted to verify the volumes of certified and uncertified FFB entering the mill and
volume sales of RSPO certified producers‟ inline with requirements of RSPO Supply Chain
Certification System, November 2011 and RSPO Supply Chain Certification Standard, Module E –
CPO Mill: Module E Mass Balance November 2011.
1.3
Scope of certification
The scope of certification is the CPO production from one (1) Palm Oil Mill and FFB supply bases
comprising three (3) Estates owned by PT. SMART Tbk., PT. Tapian Nadenggan and PT. Sinar
Kencana Inti Perkasa and one (1) “Gajah Mada” Cooperative as full managed plasma (managed
by PT. Sinar Kencana Inti Perkasa).
Batu Ampar Mill PT. SMART Tbk.
Kecamatan Kelumpang Hilir, Kabupaten Kotabaru, South Kalimantan, Indonesia
Production (annual MT CPO): CPO: 45,072 MT in 2011, PK: 10,000 MT in 2011
Batu Ampar Estate PT. Tapian Nadenggan (PT. SMART Subsidiary)
Batu Mulia Estate PT. SMART Tbk.
Sungai Panci Estate PT. Sinar Kencana Inti Perkasa
Sungai Panci Plasma PT. Sinar Kencana Inti Perkasa
1.4
Location of mill and estates
PT. SMART Tbk. mill and estates are located in South Kalimantan Province. The geographical
coordinate of the mill and estates are shown on Table 1.
Page 5 of 68
Audit Report
Table 1: Mill and Estates GPS Locations
MILL AND ESTATE
BAMM (Batu Ampar Mill)
EASTING
NORTHING
116°01'19"
3°11'53"
BAME (Batu Ampar Estate)
116 01'28''
3o14'07''
BMLE (Batu Mulia Estate)
116o06'17''
3o11'55''
SPNE (Sinar Panci Estate)
116o01'32''
3o09'16''
SPNA (Sinar Panci Plasma)
115o59'55''
3o09'44''
o
Page 6 of 68
Audit Report
Figure 1 Map of Mill and Estates Location
Page 7 of 68
Audit Report
1.5
Description of supply base
The FFB is sourced from three (3) Estate owned by PT. SMART Tbk., PT. Tapian Nadenggan and
PT. Sinar Kencana Inti Perkasa, one (1) “Gajah Mada” Cooperative as full managed plasma
(managed by PT. Sinar Kencana Inti Perkasa) which are audited during this audit. The FFB is also
sourced from the other organisation and small holders which have not been audited. The areas
and FFB production of the plantations are shown on Table 2.
Table 2: FFB Production of the supply base
ESTATE
TOTAL AREA (HA)
PLANTED AREA (HA)
FFB (TON/YEAR)
BAME
4,571.35
4,019.66
76,670.00
BMLE
2,929.04
2,683.19
46,538.00
SPNE
3,973.24
3,719.82
75,455.00
SPNA
3,822.17
3,259.29
67,486.00
Source: Data from PT. SMART Tbk. in March 2012
1.6
Date of plantings
Table 3: Age Profiles of Planted Palms
YEAR
BAME (HA)
BMLE (HA)
SPNE (HA)
1991
1992
1993
Total
Old
Mature
>18
years
1994
1996
1997
1998
1999
2000
2001
2005
Total
Prime
Mature
(7-18
years)
2006
SPNA (HA)
499.39
SUM (HA)
% OF
PLANTE
D AREA
3.65
1,721.56
297.59
1,585.42
1,671.46
738.28
499.39
1,969.05
4,045.26
1,721.56
1,883.01
2,909.13
6,513.70
47.61
501.84
163.07
57.60
599.64
463.06
85.48
559.44
163.07
1,280.82
1,678.21
522.78
689.21
463.06
1,134.13
4.09
1.19
9.36
12.27
3.82
5.04
3.38
8.29
3,259.29
6,490.72
47.43
420.86
3.08
538.30
214.79
94.83
522.78
742.52
1,368.59
89.57
1,002.95
1,620.56
45.70
800.18
810.69
420.86
Page 8 of 68
14.39
29.57
Audit Report
YEAR
BAME (HA)
2007
Total
Young
Mature
(3-6
years)
Total
Planted
Area
BMLE (HA)
SPNE (HA)
SPNA (HA)
256.68
677.54
4,019.66
2,683.19
3,719.82
3,259.29
256.68
677.54
% OF
PLANTE
D AREA
1.88
3.08
13,681.96
100
SUM (HA)
Source: Data from PT. SMART Tbk. in April 2012
1.7
Other certificates held
Table 4: Certificates Held by Mill and Estates
MILL/ESTATE
OTHER CERTIFICATION HELD
BAMM
ISO 14001:2004 by SGS, Certificate number: ID07/71712,
Expire date: 23 April 2013
BAME
Nil
BMLE
Nil
SPNE
Nil
SPNA
Nil
Source: QEF15RSPO.02 – 21 November 2011
1.8
Organizational information/contact person
PT. SMART Tbk
Plaza BII, Tower 2, 10th floor
Jl. MH. Thamrin No. 51 Kav. 22, Jakarta 10350
Phone : (+62-21) 3181388
Fax
: (62-21) 3181389
CP: Mr. Ismu Zulfikar
Head of Environmental Department
Email: ismu-zulfikar@smart-tbk.com
Page 9 of 68
Audit Report
1.9
Time bound plan for other management units
PT. SMART Tbk is committed to RSPO certification of all its Management Units located in North
Sumatera, Jambi, Bangka, South Kalimantan, Central Kalimantan, and East Kalimantan. Time
bound plan has been developed to achieve the RSPO certification for all its Management Units by
2015. The time bound plan is realistic and challenging. The plan is detailed on Table 5. The time
bound plan was updated on January 16, 2012. Several Management Units was delayed to obtain
RSPO certification due to RSPO Grievance Panel Process. Joint statement by GAR, SMART, IMT
and RSPO Grievance Panel issued 28 October 28, 2010 mentioned that until 31 March 2011,
RSPO will postpone approval of SMART and IMT certification. SAI Global accepted the reason of
the delay.
Page 10 of 68
Audit Report
Table 5: RSPO Certification Time Bound Plan
NO
NAME OF MILL
1
Batu Ampar Mill
2
Tanah Laut Mill
3
Langga Payung
Mill
4
Hanau Mill
5
Leidong West Mill
6
Semilar Mill
7
Jak Luay Mill
8
Gunung Kombeng
Mill/Muara Wahau
Mill
9
Jelatang Mill
20
Pelakar Mill
11
Langling Mill
12
Sungai Bengkal
Mill
SUPPLY BASE
Batu Ampar Estate
Batu Mulia Estate
Sungai Panci Estate
Sungai Panci KKPA
Tanah Laut Estate
Kintapura Estate
Langga Payung Estate
Paya Baung Estate
Normak Estate
Hanau Estate
Tasik Mas Estate
Tanjung Paring Estate
Langandang Estate
Medang Sari Estate
Leidong West Utara
Estate
Leidong West Selatan
Estate
Bukit Intan Estate
Bukit Mas Estate
Semilar Estate
Sei Rindu Estate
Mandang Estate
Puri Estate
Pantun Mas Estate
Pantun Mas KKPA
Jak Luay Estate
Jak Luay KKPA
Long Buluh Estate
Bukit Subur Estate
Bukit Subur KKPA
Gunung Kombeng
Estate
Gunung Kombeng
KKPA
Muara Wahau Estate
Rantau Panjang Estate
Rantau Panjang KKPA
Batang Merangin
Estate
Kubang Ujo Plasma
Pamenang Plasma
Pelakar Estate
Tiga Serumpun Estate
Bukit Bungkul KKPA
Bangko Inti Estate
Bangko Plasma
Sungai Bengkal Estate
Batang Gading Estate
Sungai Bengkal KKPA
Batang Gading KKPA
Kilis Estate
COMPANY
OF MILL
LOCATION
ORI
RSPO
TIME
BOUND
2010
REVISED
RSPO
TIME
BOUND
2012
PT. SMART
Tbk.
South
Kalimantan
PT. SMART
Tbk.
PT. Tapian
Nadenggan
South
Kalimantan
North
Sumatera
2010
2012
2010
2012
PT. Tapian
Nadenggan
Central
Kalimantan
2010
2012
PT. Leidong
West
Indonesia
Bangka
2011
2012
PT. Tapian
Nadenggan
Central
Kalimantan
2012
2012
PT. Tapian
Nadenggan
East
Kalimantan
2012
2013
PT. Kresna
Duta
Agroindo
East
Kalimantan
2012
2012
PT. Kresna
Duta
Agroindo
Jambi
2012
2013
PT. Kresna
Duta
Agroindo
PT. Kresna
Duta
Agroindo
PT. Satya
Kisma
Usaha
Jambi
2012
2013
Jambi
2012
2013
Jambi
2012
2012
Page 11 of 68
Audit Report
13
Bukit Kapur Mill
Kilis KKPA
Sungai Cantung Estate
Bukit Kapur Estate
PT. SMART
Tbk.
South
Kalimantan
2014
2015
Source: Data from PT. SMART Tbk. in February 2012
1.10
Area of plantation
The areas details for organisation owned estates are shown on Table 6.
Table 6: Estates and Area Planted
ESTATE
MATURE (HA)
IMMATURE (HA)
BAME
4,019.66
0
BMLE
2,683.19
0
SPNE
3,719.82
0
SPNA
3,259.29
0
Table 7: Plantation Hectare Statement
AREA
HECTARES
Mature area
13,681.96
Immature area
0
Total area planted
13,681.96
Emplacement and Mill
95.38
Nursery
0
Effluent, Isolation Drain
323.35
HCV
836.02
Road
537.05
Runway
3.69
Other area
582.62
Total leased area
15,295.80
1.11
Approximate tonnages offered for certification (CPO and PK)
The approximate tonnages certified are: CPO/year: 56,001.00 ton, PK/year: 13,511.00 ton
Page 12 of 68
Audit Report
1.12
Partial Certification Requirements
The British Standards Institution (BSI) has been engaged to verify the SOP and implementation
against the National Interpretation of RSPO Principles and Criteria for Sustainable Palm Oil
Production, Republic of Indonesia, May 2008 across all of SMART operation, i.e. PT. SMART Tbk.
in South Kalimantan (15-16 June 2012), PT. Leidong West Indonesia in Bangka (3-6 May 2011),
PT. Tapian Nadenggan in Central and East Kalimantan (19-23 December 2011), PT. Kresna Duta
Agroindo in East Kalimantan and Jambi (8-12 August 2011 and 19-21 July 2011) and PT. Satya
Kisma Usaha in Jambi (28 March – 1 April 2011). The verification was conducted in 2011. Results
are given below. The assessment team consists of some experts among other: Technical Expert
of Ecology and Wildlife Management, Technical Expert of Social Aspects and Technical Expert of
Environmental Management System. SOPs and documents which were verified during the
assessment among others: AMDAL (Environmental and Social Impact Analysis), report of RKL
RPL implementation, SOP of HCV Assessment, SOP of Peat Conservation, SOP of Community
Engagement, SOP of New Planting Procedure. Some of the verification reports were issued in
February and March 2012. According to verification report:
 No replacement of primary forest or any area identified as containing HCVs or required to
maintain or enhance HCVs in accordance with RSPO criterion 7.3. There were new
planting in several area and new planting procedure has been implemented.
 Land disputes were found in PT. Tapian Nadenggan and PT. Kresna Duta Agroindo. These
cases have been followed up and closed out.
 No labour dispute.
 Minor nonconformities were found in legal compliance, e.g. environmental monitoring was
not conducted inline with RKL RPL document in PT. Tapian Nadenggan and PT. Kresna
Duta Agroindo. Action plan has been established and action taken is verified during internal
audit.
Action plan to all nonconformities has been established and communicated to each organisation.
Peat Restoration Team (PRT) for the deep peat restoration project led by the Bogor Agricultural
Institute (IPB) and assisted by the Indonesian Center for Agriculture Land Resource Research and
Development (Balai Besar Penelitian dan Pengembangan Sumberdaya Lahan Pertanian) was
engaged. The team is expected to identify mitigation plan and mitigation action on oil palm planting
activities in peat lands of Central and West Kalimantan. The project has been finished. The report
“Mitigation Plan and Mitigation Action on Oil Palm Plantation in Peat Lands of Central and West
Kalimantan” was finished in April 2011. The report was submitted to RSPO Panel on May 31, 2011
and has not been published by the organisation.
Tanjung Pura University (UNTAN), Faculty of Agriculture, West Kalimantan and Palangka Raya
University, Faculty of Agriculture, has been engaged to conduct the social research. The research
study was conducted in 2011 to 8 organisations across of GAR and SMART operation. Report of
research study was finished on June 28, 2011. The report concluded that:
 Criterion 2.3: Land acquisition did not diminish the legal rights or customary rights of other
users without their free, prior and informed consent. However, the negotiation process was
not well recorded in writing.
 Criterion 7.3: Land preparation for plantation development was not carried out in primary
forest but in secondary forest, degraded land, shrub land, former logging sites or forest
concessions, land previously cleared by natural fire and land left by shifting cultivators.
 Criterion 7.5: New plantings were conducted with prior approval from the local people.
 Criterion 7.6: Identification and evaluation of land ownership based on legal and traditional
land rights were already conducted. Compensation payment was discussed in negotiations
between the organization and traditional land owners witnessed by local government
representatives. The presence of the organization in the rural area creates positive impacts
on surrounding areas, such as creating new jobs for the local community, increasing the
local community‟s income, increasing the circulation of cash in the rural market and
stimulating the growth of businesses.
Page 13 of 68
Audit Report

CSR: The organization had conducted various activities with their CSR projects in the
sectors of infrastructure, health, education, disaster relief and local economy
empowerment.
The report of research study is published in GAR website.
PT. SMART Tbk. and Faculty of Forestry, IPB performed historical HCV assessment in 2011. The
report was submitted to RSPO Panel on June 28, 2011 and has not been published by the
organisation.
GAR and PT. SMART Tbk. established Social and Community Engagement Policy on November
10, 2011. The policy was established to ensure that operations of palm oil can improve the living of
the communities in its operational area. The policy covers commitment from FPIC to indigenous
and local communities, responsible for complaints handling, to attain a responsible resolution of
any conflicts, an open and constructive role of local, national and international stakeholders,
empowerment of the community development program, respect for human rights, recognize,
respect and strengthen worker‟s rights, comply with all relevant laws and regulations and principles
and criteria of international recognise certification. The organisation committed to use multistakeholder approach in developing and in the implementation of Social and Community
Engagement Policy.
SAI Global concluded that partial certification requirements have been fulfilled.
1.13
Date of issue of certificate
The scope of certification is the CPO production from one (1) palm oil mill and three (3) Estates
owned by PT. SMART Tbk., PT. Tapian Nadenggan and PT. Sinar Kencana Inti Perkasa and one
(1) small holder.
Date of issue of certificate will be the date on approval of this Assessment Report by the RSPO
Secretariat.
2.0
AUDIT PROCESS
2.1
Certification body
PT. SAI Global Indonesia
Graha Iskandarsyah, 4th floor
Jl. Iskandarsyah Raya No. 66 C
Kebayoran Baru, Jakarta 12160, Indonesia
Phone : +62 21 720 6186, 720 6460
Fax
: +62 21 720 6207
Contact person
: Mr. Joko Prayitno
Certification Manager
Email
: joko.prayitno@saiglobal.com
SAI Global is one of the world‟s leading business providers of independent assurance. SAI Global
provides organisations around the world with information services and solutions for managing risk,
achieving compliance and driving business improvement.
We provide aggregated access services to Standards, Handbooks, Legislative and Property
publications; we audit, certify and register your product, system or supply chain; we facilitate good
governance and awareness of compliance, ethics and policy issues and provide training and
improvement solutions to help individuals and organisations succeed.
Page 14 of 68
Audit Report
The SAI Global business is driven by two equally important client needs - the mandated need for
organisations to conform to regulations, standards and legislation in all their locations, and the
operational need for organisations to improve business processes and procedures as well as
corporate culture. As we are a global company, we can meet these needs for any client - those
operating within one country's borders and in one language or those operating across borders and
in many languages.
There are three business units/divisions within SAI Global namely the Information Services
Division, the Compliance Division, and the Assurance Division. The Assurance Division helps
organisations manage risk, achieve process or product certification and drive improvement by
providing training, registration audits and supplier management programs that can improve
business performance. We provide independent audits, assessments and certification of your
products or business processes to ensure they comply with industry standards or customer specific
requirements. We understand how compliance with those standards can improve the efficiency,
economy and profitability of your operation. With auditing and assessment staff located around the
world, our clients include large global corporations as well as single site organisations.
2.2
Audit methodology
SAI Global performed a pre-audit to RSPO Principles and Criteria on 15 to 16 December 2010 to
review PT. SMART Tbk.‟s RSPO system, confirm the scope for certification, determine
organisation‟s preparedness for Stage 2 (Certification) Audit; review the adequacy of the SAI
Global audit program and resources for Stage 2 (Certification) Audit including confirming and
preparing the draft audit plan.
The Certification Audit was performed on 10 to 14 January 2012. The audit programme was
included in the body of report. The audit methodology for collection of objective evidences is site
inspection, documentation and record review and interview with staffs, workers, and other
stakeholders. Objective evidences from documentation/record review in one area may also be
cross checked with other objective evidences in other areas and with the evidence of
implementation on site during the audit. Inputs from stakeholders via letter, email, or other
communication media were also considered for this certification audit. Stakeholder consultation is
described in section 2.4.
2.3
Qualification of the lead auditor and audit team member
Ria Gloria – Lead Auditor
Ria Gloria graduated with Bachelor of Chemical Engineering degree from Bandung Institute of
Technology in 1994. She has working experience as Environmental Consultant for many years.
She has completed ISO 14001 (1995), ISO 9001 (2004), and RSPO (2009) lead auditor training
courses, and SCCS (2010). For the last 8 years she has been involved in quality (ISO 9001) and
environmental (ISO 14001) management system audits for very broad industrial and in the palm oil
sector since 2003 for several plantations and mills. She has received training for good agricultural
practices including integrated pest management and high conservation value (2008-2009).
Sigit Yulianto – Audit Team Member
Sigit Yulianto graduated with Bachelor of Metallurgical Engineering degree from University of
Indonesia in 1993 and Master of Occupational Health and Safety from the same university in 2006.
He has working experience in the manufacturing industry for many years. He also certified OHS
Expert in Indonesia. For the last 14 years he has been involved in quality (ISO 9001) and
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occupational health and safety management system audits for very broad industrial and service
sectors including in the palm oil sector since 2008 for several plantations and mills. He has
received training for good agricultural practices including integrated pest management and high
conservation value (2008-2009).
Fadjar Deniswara – Audit Team Member
He graduated with Bachelor of Industrial Engineering degree from National Institute of Technology
in Malang. He is a Lead Quality Auditor for ISO 9001:2008 with SAI Global. He has an experience
for more than 11 years in auditing. He has an experience in audit with company with labour
intensive type (e.g. textile, garments, shoes, etc). He has also qualified as SA 8000 auditor. He has
received training for good agricultural practices including integrated pest management and high
conservation value (2008-2009).
Irawan Y Bawono– Audit Team Member
Irawan Y Bawono graduated with Bachelor of Food Technology from Gadjah Mada University on
1992. He has completed ISO 9001 (2008), ISO 22000 (2005) lead auditor training courses, RSPO
auditor (2008), and SCCS (2010). For the last 5 years he has been involved in quality (ISO 9001)
and food safety management system (ISO 22000 and HACCP) audits including in the palm oil
sector since 2007 for several plantations and mills. He has received training for good agricultural
practices including integrated pest management and high conservation value (2008-2009).
Resit Sözer – Technical Specialist for HCV Issues
Dutch nationality Biologist, since 1994 active in Indonesia in the field of Endangered Species
research (Bornean Peacock Pheasant, Javan Hawk-eagle), Endangered Species surveys
(Sumatran Rhino, Orang Utan, Javan Tiger), habitats surveys (conservation areas, HPH, oil palm
plantations), wildlife trade surveys, wild animal rescue, reintroduction and restocking of wildlife,
endangered species breeding programs (Bornean Peacock Pheasant, Javan Warty Pig, Blackwinged Starling), scientific publications and community involvement.
2.4
Stakeholder consultation
Stakeholder consultation was performed to internal and external stakeholders. Internal
stakeholders included staffs and workers. External stakeholders were notified by placing an
invitation to comment on the RSPO, PT. SMART Tbk. and SAI Global websites and sending an
invitation letter to comment.
Letters were also sent to external stakeholders to invite for comment or one on one interview.
External stakeholders were selected by considering that they have an interest in the organisation
activities, directly border with organisation, area which the workers live. External stakeholders
included governments, and civil societies.
Comment from Greenomics was submitted to SAI by mail on 16 January 2012. The comment has
been taken into account during audit at the relevant criteria and indicator.
One on one interview with stakeholders was conducted during audit, to verify compliance against
relevant criteria and indicator related to land status and conflict, environmental, social aspect and
HCV. Serongga Village has been chosen to represent societies affected by BAMM and BAME,
Langadai Village has been chosen to represent societies affected by SPNE and SPNA, and Pantai
Village has been chosen to represent societies affected by BMLE.
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Table 8: List of internal and external stakeholder
STAKEHOLDERS
Internal stakeholder
Head of SPM
Head of Gender Committee
Representative of worker
External Stakeholder
Environmental Agency of Kotabaru
District
Plantation Agency of Kotabaru
Distric
Social, Labour and Transmigration
Agency of Kotabaru Distric
Police Office of Kotabaru District
PT. Jamsostek (Persero)
Camat Simpang Empat
Camat Kelumpang Hilir
Camat Kelumpang Selatan
Kepala Desa Pantai
Kepala Desa Langadai
Kepala Desa Pulau Panci
Kepala Desa Sei Kupang
Kepala Desa Serongga
Kepala Desa Batu Ampar
Kepala Desa Tegal Rejo
Youth leader of Desa Serongga
MUI Chairman of Desa Serongga
Youth leader of Desa Langadai
METHOD OF CONSULTATION
One on one interview
Sending an invitation letter to
comment
comment
comment
comment
comment
comment
comment
comment
comment and one on one interview
comment and one on one interview
comment
comment
comment
comment
comment
Comment from Department of Labour and Transmigration of Kota Baru District was submitted to
SAI by mail #566/069/Disosnakertrans dated on 12 January 2012. This letter was received by
SAIG Office on 17 January 2012, after closing meeting in Batu Ampar and Mill Estate. So this is
not asked at the time of public consultation. SAIG requested SMART to follow up charges from
Department of Labor and Transmigration of Kota Baru District.
See appendix C for detail of stakeholder issues and comment.
2.5
Date of next surveillance visit
The next surveillance visit will be conducted 9 to 10 months after approval of this report by RSPO
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and issuance of certificate by SAI Global.
3.0
AUDIT FINDINGS
3.1
Audit findings
PRINCIPLES 1: COMMITMENT TO TRANSPARENCY
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.
Criterion 1.1 Indicator Major 1
Oil palm growers and miller have provided sufficient information to relevant stakeholders.
Information covers for CSR (corporate social responsible) activities, report of Social Impact
Assessment, workers data, RKL and RPL report. Provision of information provided to stakeholders
was used in appropriate language and it was understood by the stakeholders.
All information requests from stakeholders have been collected and followed up in timely manner
by the Growers and Miller, including verified document request from Jamsostek (Social Security)
Office, Man Power Office and assistance request from communities.
Criterion 1.1. Indicator Major 3
Retention time of recording request and response information has been determined at 5 years and
is already determined in SOP/SPO/SMART/LH-02 dated 1 July 2010 - Control of the document.
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
environmental or social outcomes.
Management documents are publicly available, such as: HGU (Land Use Title), AMDAL
(Environmental and Social Impact Analysis), Occupational Health and Safety Management Plan
and CSR (Corporate Social Responsibility) Program. Organisation documents are generally
available by the organisation and available to the stakeholders by request. Several documents
have been requested by?? stakeholders such as the number of workers by?? the Department of
Labor and Social Security.
The documented procedure SOP/SPO/SMART/LH-01 dated 1 July 2010 was established, it‟s
mentioning the process and responsibilities and authorities in regard to responding the request on
information from the public. The coverage of request on information as stated in the procedure
including information on legal documents, environmental documents, social activities documents,
occupational health and safety programme documents and continual improvement documents. The
form to record the request on information from public has been established as attached in the
procedure. This form is also intended to record the company‟s response on the request as well.
Confidential information request such as financial data, cost and revenue was described in the
procedure. Top Management in Head Office Jakarta will review each request whether it could be
followed up or not. Up to the time of this audit, there was no request on information or confidential
information from stakeholders, as reported.
SOP/SPO/SMART/LH-02 dated 01 July 2011 described that retention time of such records
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including record of information requests and its responses is 5 years.
PRINCIPLES 2: COMPLIANCE WITH APPLICABLE LAWS AND REGULATIONS
Criterion 2.1 There is compliance with all applicable local, national and ratified international
laws and regulations.
Evidence of compliance with applicable local, national and ratified international laws and
regulations of BAMM, BAME, BMLE, SPNE and SPNA stated in ANNEX 1 of National
Interpretation of RSPO Principles and criteria for Sustainable Palm Oil Production have been
provided, including valid permits (hazardous waste temporary storage and land application permit),
provision of required infrastructure (waste water treatment ponds, hazardous waste temporary
storage), availability of MSDS, periodic environmental parameter monitoring (stationary emission,
ambient emission and ambient noise, moving source emission, waste water discharge quality and
surface water quality), pesticide management, system of plant cultivation, oil palm plantation, list of
flora and fauna protected, management of guard area, minimum wage, labour law, occupational
safety, employee social benefit.
Updating of law and regulations change activities were well documented and last update was
performed in July 2011 for mill and all estates. Register of contact for assessing and updating
information of all applicable local, national and ratified international laws and regulations has been
provided. Regular contact to government institution is conducted regularly.
Criterion 2.1 Indicator Minor 1
Information on applicable legal and other requirements have been reviewed and summarised.
Applicable legal and other requirements were registered and dated on July 20, 2011
Evidence of compliance with applicable laws and regulations which concern the operation of
BAMM, BAME, BMLE, SPNE and SPNA has been evaluated internally as required by the
procedure SOP/SPO/SMART/LH-03 dated 1 July 2010. The procedure also describes the
mechanism to ensure that information of applicable environmental legal and other requirements
were accessed, reviewed and applied. The compliance with applicable local, national and ratified
international laws and regulations was respectively performed by related personnel, e.g. D&L, OHS
Officer, HCV Officer, RSPO Officer of mill and estate.
Evaluation of compliance was documented within “Evaluation of Compliance with Laws and
Regulations”. Last evaluation of compliance was performed on July 20, 2011. The accuracy of
evaluation of compliance results and associated evidences of compliance were examined during
this audit and in general was found sufficient. There were some gaps identified for the permit of
surface water utilisation against Act #7/2004. The gap was already completed with action plan that
described action to be taken, delegation of responsibility and time frame. Permit of surface water
utilisation was applied to Mining and Energy Official of Kota Baru District in April 2011. The permit
is still in process. Assistant of Estate and Document Controller are responsible to review most
suitable application of the requirements.
Minor nonconformity against criterion 2.1
BAME, SPNE
 Several containers of hazardous material or waste were not completed with label and or
hazard symbol, e.g. container of pesticide solution stored in Division Warehouse (BAME),
container of diesel fuel in diesel generator set room in Division Office and workshop (SPNE
and BAME), container of medical waste in Clinic (SPNE).
Opportunity for improvement
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SPNA
 Workers at the KUD (Village Unit Cooperatives) Gadjah Mada has committed to comply
with all the requirements of the PKB (Joint Work Agreement), but it is needs to be
considered, to be approved by the Department of Labor.
Criterion 2.2 The right to use land can be demonstrated, and is not legitimately contested by
local communities with demonstrable rights.
The availability of legal documents for use of land and operation of estate and mill were verified.
Evidences were mentioned as follows:
BAME and BMLE:
 Site permit #SK.02/PL.84/1989/AGR.43, dated 15 March 1989 +/1 10,000 Ha, permit was
given to PT. Inti Gerak Maju. Site permit No. SK.02/PL.61/7
 Forest land release permit (Izin pelepasan kawasan hutan) No. 151/Kpts-11/1993, +/4,789 Ha, dated 18 April 1993 and No. 115/Kpts-11/1996, +/- 3,080Ha, dated 27 March
1996. A total is +/- 7,799 Ha.
 HGU #23 dated 28 July 2000, 4719 Ha and HGU #24, dated 28 July 2000, 2,929.037 Ha,
permit was given to PT. Inti Gerak Maju. PT. Inti Gerak Maju was taken over by PT. Tapian
Nadenggan in 2007, based on Notary Letter, Suhartini SH, dated 20 April 2007.
 Plantation permit previously was given to PT Inti Gerak Maju No. 464/Menhutbun-VII/2000
total 7,648.71 Ha and transferred to PT Tapian Nadenggan, dated 11 October 2011.
SPNE:
 Site permit: No. SK.04/PI-84/1989/AGR-43 issued by Governor of South Kalimantan, to PT.
Sinar Kencana Inti Perkasa, dated 11 April 1989 for a total of +/- 14,000 Ha.
 Forest land release permit (Izin pelepasan kawasan hutan) No. 326/Kpts-11/1994 dated 5
August 1994 issued by Minister of Forestry of the Republic of Indonesia for a total of +/13,358.83 Ha.
 Plantation permit No. 465/Menhutbun-VII/2000 for a total of 14,972.39 Ha to PT. Sinar
Kencana Inti Perkasa.
 HGU #01, to PT. Sinar Kencana Inti Perkasa, dated 23 September 1996 for a total of
5,566.0 Ha.
SPNA:
 SPNA consists of 4 villages in Kotabaru Distric (Kabupaten Kotabaru) i.e. Mandala,
Sukamaju, Telagasari and Plajau Baru. First stage permit issued by Bupati Kotabaru No.
6/2000, in regard decision on location for land consolidation in Kotabaru District (penetapan
lokasi pelaksanaan konsolidasi tanah di Kabupaten Kotabaru). This permit was
strengthened with the permits from BPN (National Land Agency) in regard decision
approval on state land for agricultural land consolidation for respective village and then
finally by issuance of land own title (SHM) for each farmer. The land own certificates were
sighted during this audit and all evidence except for land within Plajau Baru Village. For
Plajau Baru village, the permit was issued by BPN #32-XI-2002 in regard decision approval
on state land for agricultural land consolidation, in Plajau Baru village +/- 625 Ha was
sighted. This permit is under process to increase to land own certificate (SHM) for each
farmer.
BAMM:
 Site permit: issued by Bupati Kotabaru #04/1999 to PT. SMART Tbk.
 Building use title issued by BPN #03 and #04, dated 23 October 2000 PT. SMART Tbk
 Palm oil mill building title issued by Bupati Kotabaru, dated 05 February 2000 PT. SMART
Tbk
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Legal boundaries are indicated with the marking on the map as attached in each land use title
permit and land own title permit. Marking of legal boundaries were verified during this audit and it
were evidence for all estates and mill except for SPNA, see finding below. Regular maintenance of
marking of legal boundaries were also performed, evidences were verified.
It was confirmed from the public consultation that there were no land conflict at all land within
estate and mill.
Evidences of land acquisition before 2000 were sampled and verified during this audit; it was
sighted that land acquisition was completed with documents approved by two parties with
witnessed by local authority and/or community leader. No land acquisition after 2005.
A mechanism to resolve conflict which is accepted by all parties was described under criterion 6.3
and 6.4.
Major nonconformity against criterion 2.2 indicator 2 (Refer to NCR 2012-01):
 SPNA consists of 4 villages i.e. Telaga Sari, Mandala, Sukamaju and Plajau Baru. Legal
boundaries for 3 villages i.e. "Telaga Sari, Mandala dan Sukamaju" could not been seen
during the audit as stated/required by land own title certificates.
Major nonconformity closed:
 Based on the map and pictures, it was verified the marking of legal boundaries for SPNA
has been provided. The maintenance programme to legal boundaries was also sighted.
(22/02/2012). See attached Non-conformance report NCR 2012-01.
Criterion 2.3 Use of land for oil palm does not diminish the legal rights, or customary rights,
of the other users, without their free, prior and informed consent.
It was confirmed during public consultation that no land within mill and estates are encumbered by
legal or customary rights.
PRINCIPLES 3: COMMITMENT TO LONG-TERM ECONOMIC AND FINANCIAL VIABILITY
Criterion 3.1 There is an implemented management plan that aims to achieve long-term
economic and financial viability.
Management plan for period 2010-2014 was established in order to achieve long-term economic
and financial viability. This plan was in line with the certification scope i.e. covering all supply bases
signed off by CEO PT. SMART Tbk. The parameters stated in the management plan includes
revenue and profit, crop projection (FFB yield trends), CPO and PK extraction rate; estimated
estate cost (upkeep, manuring, harvesting, transport, overhead and depreciation) as well as mill
cost (processing, repair and maintenance, overhead and depreciation). This plan was established
by considering economical parameters/assumptions such as inflation, US Dollar and Indonesian
Rupiah (IDR) rate, CPO price, and FFB price. The management plan is reviewed annually and
revised as appropriate; based on the achievement against the plan and other parameters may
change.
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The replanting plan 2010-2020 has also been established and sighted during this audit. The
replanting plan was in line with scope of certification i.e. covering all supply bases. This plan was
also reviewed annually and updated as necessary.
PRINCIPLES 4: USE OF APPROPRIATE BEST PRACTICES BY GROWERS AND MILLERS
Criterion 4.1 Operating procedures are appropriately documented and consistently
implemented and monitored.
Standard Operating Procedures for Estates were developed in Management Committee Agronomy
and Research (MCAR) Book SMA/MCAR/06/05-07 dated 1 May 2007. The SOPs consist of
procedures for several processes including land clearing, preparation before planting, fertilising,
road maintenance, peat land management, drainage system, mature and immature upkeep,
integrated pest management and harvesting. Other than there were also other procedures, e.g.
IK/SKIP-SPNA/PNN/01 for harvesting, IK/SKIP-SPNA/TM/05 for fertilising.
BAMM has developed best practice SOP for all of its operations from receiving of FFB through
production and processing and despatch of the CPO and palm kernel. SOP describes quality
control including its reporting from reception of fresh fruit bunch up to dispatch of CPO and palm
kernel. The SOP includes reference to the corporate best practice SOP. Work Instructions in the
local language has been developed and are posted at work stations in the mill. The company has
well implemented internal monitoring processes that check and report on the implementation of the
Management Guidelines. These include independent checks of the mill by the corporate internal
audit.
Operation is checked and monitored regularly. Mill Advisory Audit (MAA) and Agronomy Advisory
Audit (AAA) are performed twice a year. The findings including its follow up were well documented.
The mill is ISO 14001:2004 certified, a regular environmental management system audit have
been taken. Last audit by certification body was performed on February 23-24, 2011. Findings
were followed up.
Estates activities are programmed in Division Work Program annually. Activities program are such
as pest and diseases detection and census, weed controlling, maintenance of beneficial plant,
fertilising, spraying and road maintenance. Site observation was performed during audit to some
activities: spraying, land application and harvesting. Activities have been performed at defined
interval and records of activities were sighted, e.g. BKM (Log book of group leader activity).
FFB that was processed by BAMM is received from own Estate (BAME, BMLE and SPNE),
smallholders (SPNA) and out growers. The third party was not included in the scope of
certification. All of the FFBs are processed in same facility (BAMM). See the capacity on scope
certification above.
The mill maintains records of monitoring reports, such as shift log sheets with records of operating
conditions at each of the mill work stations. A review operation daily report (November 2011 –
January 2012) and site observation found that in general the documented procedures described
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above has been consistently implemented and monitored.
CPO and palm kernel are delivered to “Tarjun” bulking terminal. A review to January 2012 delivery
records found that it has been conducted according to defined arrangement.
BAMM
 It was found that thermometer on screw press #2A and kernel silo #4 was not functioned.
 Calibration of laboratory balance (Sartorius & Ohaus) was not done using calibrated weight
scale. Oven (Memmert) used for moisture analysis has not been calibrated.
 It was indicated that “Clarification Process (Clarification is a process station to purify the
crude CPO. The step is between crude oil tank and vacuum dryer)” daily report at the day
audit was not made in proper. The report was not made yet up to the time of audit (11.00).
The process has started on 09.00.
BAMM
 Consider to identify and calibrate the measurement devices used in mill; thermometer on
screw press, pressure gauge on vacuum drier and thermometer on kernel silo.
Criterion 4.2 Practices maintain soil fertility at, or where possible improve soil fertility to, a
level that ensures optimal and sustained yield.
Soil and leaf sampling is analysed regularly by SMARTRI to determine the nutritional status of soil,
to assist and to be guided in the preparation of annual fertilising programme recommendation. Soil
is analysed when the age of the plant is 3, 5, 8 years and continued with age of the plant is added
by 5 years. Leaf is analysed annually. Soil and leaf sampling was taken from each division.




BAME: The soil analysis was in January 2009 and 2010 to 444 samples. The leaf analysis
was in February, March and April 2011.
BMLE: The soil analysis was in September 2010 to 513 samples. The leaf analysis was in
March 2011 to 60 samples.
SPNE: The soil analysis was in January and November 2009 to 747 samples. The leaf
analysis was in March, April and June 2011 to 85 samples
SPNA: The soil analysis was not performed. The leaf analysis was in February, March,
April 2011 to 54 sample
The soil analysis was not performed in SPNA. Based on letter from KUD Gajah Mada
#035/KUD.GM/EXT/VIII/2010 on August 05, 2010, KUD Gajah Mada is not willing to follow soil
analysis program because the cost of analysis was huge and SPNA area was still in one plot to
SPNE therefore soil analysis result can refer to soil analysis of SPNE.
Leaf and soil visual analysis was conducted by agronomy staff to identify leaf deficiency and
drainage or pyrite problem.
Fertilising programme was developed by SMARTRI for all Division of Estates based on the result
of soil and leaf sampling analysis. Fertilising programme covers type of soil application, area and
time of application, method of application and type and dosage of fertiliser. Fertilising is performed
manually, mechanically using tractor or aerial using airplane. Aerial fertilising is performed in some
area of BAME and BMLE and only for Urea, MOP and TSP. Aerial manuring was performed to
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mineral soil, far from housing and village and no river. The memo with regards to aerial application
mentions that fertilising is prohibited over a 5-palm wide buffer strip along the river and the main
drain, swamp area. Procedure of aerial manuring was established in SOP/SMA/Pupuk pesawat on
December 01, 2011. There was permit to operate airplane from Ministry of Transportation,
Directorate General of Civil Aviation – Air Operator Certificate #AOC/137-001 dated 19 June 2011
and valid for three years. Result of fertilising was well recorded including date of application. It was
noted that all of fertilising activity in 2011 has been applied. Result of aerial manuring was
completed with map of airplane route to ensure that aerial manuring was not performed at housing,
village and river. Based on sample map of airplane route there was no aerial manuring along the
river.
Empty fruit bunches (EFB) are applied as nutrients. EFB was applied based on the
recommendation from SMARTRI in terms of quantity and location. EFB were applied in BMLE,
BAME and SPNE by manually and mechanical using tractor. Realisation of EFB application was
well recorded and good evidence of EFB application on site.
Palm Oil Mill Effluent (POME) is applied in BAME where the mill is located. POME is also applied
in SPNE. The POME was come from SKPM (Sungai Kupang Mill). POME was only applied in
several blocks based on permit obtained by the organization from government which then being
distributed to several ponds with depth 12.5 cm by pipeline. Flow rate of land application is 375
m3/ha/year with three time rotation to each block. Flow rate and quantity of POME and area
applied are recorded daily. The organisation had permit of land application from local government
to BAME #188.45/395/KUM/2011 and to SPNE #188.45/394/KUM/2011 and valid for 5 years.
Criterion 4.3 Practices minimise and control erosion and degradation of soils.
Maps of soils survey from Plantation Monitoring and Planning Division were available for all estates
The maps included maps of fragile soils.
 BAME: Planted area has slopes 0-30o. 8.4% area is potential acid sulphate soils.
 BMLE: Planted area has slopes 0-15o.
 SPNE: Planted area has slopes 0-30o. 1.3% area is potential acid sulphate soils.
 SPNA: Planted area has slopes 0-22o. 3% of area has slopes 12-22o.
MCAR chapter 3 “Preparation before Planting” describes procedure for minimising and controlling
erosion, peat land management. The organisation do not recommend plantings on slopes >40% or
>22o. When the slope area was planted, system for planting on slopes area is provided by
considering soil and climate specific through terracing, determining of base line, levelling of
terrace, and determining of planting space. To minimise and control erosion in slope area, several
practices have been implemented such as terracing and growing of legume cover crops .
Procedure for road maintenance is described in MCAR book chapter 4.5. Estates have established
road maintenance programme for main road, collection road and access road by manual and
mechanical maintenance. Road maintenance includes road hardening. Manual road maintenance
programme was provided in Division Work Programme. Manual road maintenance was
implemented based on Division Work Programme or road condition. Mechanical road maintenance
uses heavy equipment – grader and the mechanical road maintenance programme was provided
for all division. Manual and mechanical road maintenance realisation was recorded including
complex area maintained, distance of road maintained and quantity of gravel.
There is not peat soil in BAME, BMLE, SPNE and SPNA
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Acid sulphate soils were well managed. Fertilising to acid sulphate soils was performed twice in 1 st
semester while fertilising to mineral soil was only performed once in 1 st semester. Dosage of EFB
application in acid sulphate soils was twice more than mineral soils. The dosage of fertiliser and
EFB was recommended by SMARTRI.
SPNA
 Realization of road maintenance has been recorded. It could be considered to improve the
record by mentioning block area where road maintained not only mentioning complex area.
Criterion 4.4 Practices maintain the quality and availability of surface and ground water.
MCAR book section 3.2 describe drainage system in Estates including requirement for making
ditches of main drain, collection drain, and field drain, and its dimension. The MCAR also describe
ditch maintenance.
Procedure SOP/SPO/SMART/LH-06 and SOP/SPO/SMART/LH-07 was established for protection
and management of riparian buffer zones at or before replanting. Procedure mentioned that in 50
m on the left and right sight of riparian buffer zones, Estates are prohibited to apply agrochemical,
used manual fertilising and river bank was planted by erosion barrier crop (planting of reed grass).
The organisation has policy “Memo #002/SMD Ops/I/2009” with regard to “Watershed Protection”
from SMD Operation on 6 January 2009. The policy prohibits Estates for planting in 50 m on the
left and right side of riparian buffer zones at or before replanting. Warning board was placed in
regard to the prohibition of applying agrochemicals and aerial fertiliser in the buffer zone. Riparian
buffers of small natural water courses are 50 metres wide on both sides of the rivers. In all estates,
all individual oilpalm within the riparian buffer zone are individually marked with white paint as to
avoid the use of agrochemicals in this particular zone.
Program to manage wetland covered cleaning of main and collection drain and making of field
drain. The program was provided in BMLE. Ditch is managed based on programme or ditch
condition which is monitored regularly. Programme of ditch management using heavy equipment
was established for BMLE includes cleaning of main and collection drain and making of field drain.
Result of ditch management using heavy equipment was recorded. However program and
realization of cleaning of main drain, collection drain and making of field drain was not clear which
block area was cleaned.
Water management procedure is established to control water table within range of 50-70 cm below
ground surface. This procedure was only implemented in BMLE. Water gates and dike which were
made from sand sacks are constructed to maintain water level in main drain and collection drain.
Water level is monitored by checking the level meter which was provided in main and secondary
drain and piezometer which was provided in each block. Piezometer and level meter are checked
weekly. Condition of water gate and dike (open or close) was according to water level result.
Water supply for BAMM comes from Mekarsari River which one of the creeks of Serongga River.
Water was collected in reservoir prior to be treated and used for process in POM and staff housing.
Flow meters were installed to monitor water usage. The volume of water usage is monitored
monthly both for process and domestic usage. Water consumption data period 2010 and 2011 was
sighted. Since cooling water from turbine was reused for cooling process in the laboratory, water
consumption could be saved around 450 M3 in 2011. The organisation also developed program in
2011 to reduce water consumption 5% for oil cooler turbine and 5% from 2011 budget for domestic
usage. The achievement of these targets is being evaluated.
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Surface water quality is monitored six monthly. Surface water quality was analysed both for
upstream and downstream. There are also three “monitoring wells” which are monitored six
monthly to ensure that POME used in land application did not affect the quality of ground water.
Monitoring result of surface water quality of Mekar Sari River in BAME, Babi Tributary in SPNE,
Landas River, Kalibening River and Amir Tributary in SPNA was reviewed for 2nd semester of 2010
and 1st semester of 2011 against Regulation of South Kalimantan Governor #5/2007 class II.
Quality of downstream surface water exceeded Regulation of South Kalimantan Governor #5/2007
class II for parameter BOD, COD and pH in Mekar Sari River. Downstream surface water
measured was mixed with other sources not only from POM. Monitoring result of “monitoring wells”
was reviewed for 2nd semester of 2010 and 1st semester of 2011 against Degree of Health Ministry
#416/MENKES/PER/IX/1990 in BAME and SPNE. pH of water from “monitoring wells” was not met
the standard. It was noted that pH of initial environmental quality stated in the AMDAL document
ground water was not met the standard.
POME is monitored monthly as required by permit of land application by external laboratory. The
result of POME monitoring were reviewed including measurement of BOD for period 2 nd semester
of 2010 to 1st semester of 2011. The Ministry of Environment #29/2003 and permit of land
application required that BOD of POME flowed to land application is less than 5,000 mg/litre. The
result of POME quality during this period was under 1,500 mg/litre.
Mill water use per tonne of FFB is monitored monthly. Actual mill water use was well recorded.
Result of monitoring of mill water use per tonne of FFB was sighted for 2010 and 2011. Result in
2011 was decreased compared with 2010.
BMLE
 Program of cleaning of main drain, collection drain and making of field drain has been
established. However program and realization of cleaning of main drain, collection drain
and making of field drain was not clear as to which block area was cleaned.
 One of water management is using piezometer. Water level of piezometer is monitored
daily. However action to be taken was not clear when the water level exceeded the
standard.
BAMM
 Quality of surface water has been measured upstream and downstream. Quality of
downstream surface water exceeded Regulation of South Kalimantan Governor #5/2007
class II for parameter BOD, COD and pH. Downstream surface water measured was mixed
with other sources not only from mill. It could be considered to measure quality of river
water after mill outlet without mixing with other sources.
Criterion 4.5 Pests, diseases, weeds and invasive introduced species are effectively
managed using appropriate Integrated Pest Management (IPM) techniques.
Procedure for IPM to control pests, diseases, weeds and invasive introduced species has been
established in MCAR chapter 6. This includes setting out of technique to be implemented, chemical
to be used, locations to be applied, and time frame for implementation. Estates establish Division
Work Program annually for IPM in each division. IPM programme includes detection and census of
pest and diseases, weeds controlling, planting and upkeep of beneficial plant, use of pesticide and
herbicide. IPM programme is performed based on determined frequency in a year.
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The implementation of IPM is monitored. Detection of caterpillar (Setora nitens, Darna trima,
Metisa plana) is performed two monthly. When caterpillar was detected, census of caterpillar was
performed. Census of rodent is conducted quarterly. Result of census determined further
controlling. Controlling was performed when the caterpillar and rodent attack were higher than the
critical point. Application of rodenticide during rodent attack was monitored. Beneficial plant upkeep
was performed by cleaning from weeds.
Chemical is used if attack is uncontrolled. Routine use of chemicals is programmed including area
applied, their dosage, and rotation.
Training of IPM was performed to BAME, BMLE, SPNE and SPNA employees on 30 December
2011. The workers who involved in IPM technique were attended the training. List of participant
attendance was sighted.
Pesticide toxicity units (a.i. / LD 50 / FFB tonnage) were monitored to Paraquat dichloride,
Isopropilamine glyphosate, Methyl metsulfuron and Fluroksifir. The records were provided for 2009
and 2011.
Criterion 4.6 Agrochemicals are used in a way that does not endanger health or the
environment. There is no prophylactic use of pesticides, except in specific situations
identified in national Best Practice guidelines. Where agrochemicals are used that are
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.
Agrochemicals used by the organisation has been approved and registered by Agriculture
Department, e.g. Rolixone 276 SL – license RI 01030120062467 expired in 2016, Erkafuron 20
WG – license RI 01030120062405 expired on 23 June 2016, Ally 20 WP – license RI 837/4-2009/T
expired on 30 April 2014, Starare 200EC – license RI-854/7-2009/T expired in 2014, Garlon –
license RI 695/9-2008/T expired on 6 October 2013. It was noted that there were no agrochemicals
being used which are not on this register during this audit. Agrochemicals use and their register
number refer to Pesticide Commission Book “Buku Komisi Pestisida” year 2011.
Agrochemicals use was well recorded in “Recapitulation of agrochemical use” including active
ingredients used, area treated, amount applied per ha and number of applications. The documents
were also recorded dosage of agrochemical use, target species. The records were sighted in all
Estates.
Several BKM of weed spraying using agrochemicals was sighted. It was noted that agrochemicals
(Rolixone, Erkafuron) use were approved and registered agrochemical. Dosage of agrochemical
use, target species was inline with MCAR section 6.3. BKM recorded target species, dosage and
trained spraying officer. PPE used during spraying of pesticides are boots, apron, safety glass,
respiratory mask and hand gloves.
Agrochemicals have been applied by trained spraying officers who have received usage of limited
pesticide training. Training was delivered by Pesticide Regulatory Commission of South
Kalimantan on 2 February 2011, 30 July 2011 and 24 December 2011. Training record including
training certificate was sighted for all sprayers in all estates. Training covered handling of
concentrate chemical/agrochemical and spraying method including pesticide hazard.
Agrochemicals are stored in the determined area separated from fertiliser and other chemicals.
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Agrochemicals storage is provided in each Division of all Estates. Agrochemicals storage is locked
areas with limited access. The storage is ventilated through cross flow ventilation. MSDS and
hazard symbol label are provided nearby of agrochemicals. Emergency shower and eyewash are
also provided to anticipate in case of an emergency of agrochemical handling. PPE for handling of
chemicals are provided including boots, apron, safety glass, respiratory mask and hand gloves.
The possible spill is managed. Secondary containment is provided around the chemical storage
area. Spill kit was also provided in the area.
Prior to be used in the field, agrochemical was diluted in designated area of mixing which was
completed with roof, secondary containment and information of agrochemical hazard. Notice was
displayed in the area treated with highly toxic pesticides, e.g. pesticides warehouse and facility to
mix agrochemical. All application of agrochemicals were in accordance with the product label and
storage instruction
Handling of agrochemical containers was described in work instruction IK/SMART/LBH/01. All
agrochemical containers were triple rinsed and disposed in the designated area and separated
with organic and inorganic waste landfill. The agrochemical containers are disposed regularly.
Records of chemical containers quantity disposed and photograph of disposal activity were
evident. The other agrochemical containers were reused for agrochemical solution container during
spraying. It was noted that PT. Sinar Kencana Inti Perkasa has agreement with supplier of
agrochemical to manage (i.e. reuse) agrochemical container #028/RKN-PER/PER/VIII/2011 on
August 01, 2011. So far the agreement has not been implemented yet since all containers were
triple rinse and disposed by PT. Sinar Kencana Inti Perkasa.
The organisation did not use agrochemicals listed by the Stockholm Convention. Paraquat is still
used in the estates. The organisation has policy “Memo #015/ADH3-INT/BNJO/03/2010” with
regard to “Using of Paraquat Active Ingredient” from VPA. The policy covers paraquat use to a
minimum, reduction of paraquat for circle, harvesting road, FFB collection area. Data of paraquat
used has been provided since 2009. It was observed that paraquat use was increased in 2011
compared with 2010 even though paraquat use was still less than 2011 budget. Paraquat use was
increased in 2011 due to weed of Stenoclaena Palustris was found and crash program was
performed. Use of paraquat is targeted to be reduced in 2012.
The provisions for medical check up was described in the procedure SOP/SMK3/SMART/LH-23
which covers pre employment medical check up, regular medical check up and special medical
check up. Implementation of medical check up was also verified during this audit; records
December 2011. It was noted that medical check up has been implemented to workers who apply
agrochemicals. Special medical check up for workers at estates have not been properly performed,
see finding below.
Records showing that no work with pesticides for pregnant and breastfeeding women. List of
female workers in all estates was available including who work in spraying and fertilizing activities.
From the results of interviews with female workers, it was informed that they were not pregnant
and
breastfeeding
women
who
work
in
spraying
and
fertilizing
activities.
Minor nonconformity against criterion 4.6 and 4.7
All Estates
 In general, medical check-up has been performed. However, several key parameters were
not performed during medical check-up e.g. Rontgen and spyrometry test for employees
exposed to chemical hazards (e.g. sprayer, chemical mixer and warehouse operator,
fertilizer warehouse operator) and evaluation of musculoskeletal disorders (MSDs) to the
employees with ergonomic exposed to ergonomic hazard (e.g. fertilizer warehouse
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operator). Noted: a program to cover these parameters has been established and the
results will be verified during next SAI Global audit.
Criterion 4.7 An occupational health and safety plan is documented, effectively
communicated and implemented.
It was a good system when auditor team provided an OHS induction by Safety Officer. With this
induction, auditor team was made aware on the situation of mill and estates, the risk may exist, the
basic OHS rules at mill and estate and emergency preparedness and response procedure, etc.
Audit was then performed both on documentations/records and site visit/observations.
Occupational health and safety policy has been established by respective Estate Managers and
Mill Manager. The policy was displayed at strategic locations of estate and mill and communicated
to employees including contractor workers. The occupational health and safety program 2011/2012
has also been established among other consist of training activity, safety committee meeting,
medical check up, etc.
The boilers, sterilisers, steam vessel, air compressor, generator set, electrical installation, heavy
equipment, lightning arrestor have been inspected by local authority, the permits were evidence.
Boiler operation monitored its parameters including pressure, temperature and water level, these
parameters were recorded. Boiler was completed with automatic water feeding to prevent over
heat and explosion in case of less water level. Records of internal inspection and maintenance to
the equipment were sighted e.g. electrical inspection, compressor inspection and welding
equipment and heavy equipment. There was also safety patrol/inspection activity conducted
monthly to identify any unsafe acts and conditions; findings were followed up as appropriate; based
on verified reports November and December 2011. Safety valve of air compressors at mill and
estates were tested during this audit; it was noted that not all safety valves were working properly
and then re-setting was done and after that, they can work properly, see finding below.
The procedure for critical activities was established, SOP/SMK3/SMART/LH-21. It covers the OHS
control for working in confined space (e.g. cleaning of storage tank), working at height and welding.
Work permit system was established and implemented for these works. It was noted that
measurement of adequacy of oxygen and availability of dangerous gas were required before
entering confined space and it was mentioned in the work permit; the portable gas detector was
sighted during this audit. It was also noted that working at more than 2 meters from land or
platform has been classified as working at height; this was mentioned in the procedure. LOTO
procedure has also been established and implemented especially intended for risk control of
maintenance activities.
Moving parts of machine/equipment generally has been covered, however see finding below,
although it has been immediately rectified. Safety sign was provided to make workers aware on
this hazard and risk. In general, electrical installation was improving from previous SAI Global audit
even though some substandard electrical installation still found, see finding below. Electrical
hazard symbol was provided at electrical panel.
In general, housekeeping at mill and estate (office estate, storage, and workshop) was good.
Access for workers to workplace in general was good e.g. stair was provided with hand rail and
platform at height was provided with border to prevent fall risk. Vertical stair has been provided
with cover as well, e.g. chimney vertical stairs at mill and water torn vertical stair at estates.
Opportunity for improvement was given below in regard to the design of harvesting bridge.
Noise level has been measured by third party and used as justification for using ear plug/muff (mill,
generator set area). It was noted that noise level at mill and generator set area was generally
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Audit Report
higher than TLV. Safety sign for using PPE was provided at these areas. It was noted here that
workers appear have a good discipline in wearing this PPE. Chemical factors measurement at
workplace has been measured for mill; but the sample taking location was not proper, not inside
where the workers work; see finding below. Chemical factors measurements for estates have not
been performed, while there several areas at estate with suspected have high chemical exposure,
e.g. chemical store and fertilizer store-event tough mask already required to enter these areas; see
finding below.
The procedure for management of PPE has been established. The PPE for each activity has been
established, e.g. working at mill, working at generator set, welder, working at laboratory, harvester,
sprayer, fertilizer storage, chemical storage, etc. Observation during this audit generally concluded
that PPE has been well provided and implemented. Workers were interview during this audit and
generally they understood the risk of their work and the purpose of using PPE.
The safety committee (P2K3) for estates and mill has been established and had approval from
local authority. The chairman of safety committee is Estate Manager or Mill Manager. The
secretary of safety committee is an OHS expert as required by local regulation; OHS expert has
responsibilities and authorities as OHS Officer. The members of safety committees are
representing each area or function within estate and mill. Monthly safety committee meeting was
held to review the OHS programme and performance. Records were sighted for September,
October, November and December 2011 for all estates and Mill. Quarterly reports were submitted
to local authority as required by local regulation.
Accident insurance was provided to workers including for daily base workers, under the scheme
“Jamsostek” as required by local regulation. Samples of workers for mil and all estates were taken
during this audit and found satisfactory-all sample taken have been provided with accident
insurance. The contractor workers were also provided with “Jamsostek” as mentioned in the
contract agreement between company and contractors.
The provisions for medical check up was described in the procedure SOP/SMK3/LH-23 which
covers pre employment medical check up, regular medical check up and special medical check up.
Implementation of medical check up was also verified during this audit; records December 2011. It
was noted that medical check up has been implemented to workers of mill and estates. This covers
general medical check up test for all workers. Special medical check up for workers of mill has
been performed which including audiometric test for workers exposed to noise and spirometry test
for workers exposed to chemicals and dust.
OHS risk assessment procedure SOP/SMK3/SMART/LH-02 was established and implemented for
estates and mill activities both routine and non-routine activities. Hierarchy of control was
considered in the planning of risk control. According to the procedure, at least OHS risk
assessment document must be reviewed once a year. OHS risk assessment records 2011 were
sighted for all estates and mill. Some activities were examined in regard to risk assessment
including for boiler operation, sterilizer operation, generator set operation, loading ramp activity,
cleaning of CPO storage tank, chemical mixing, fertilizer warehouse, herbicide and pesticide
sprayer, harvesting, road maintenance, waste water treatment.
Training record and programme related to OHS were sighted and verified during this audit, e.g.
boiler certificate and licence for boiler operator, licence for operator of generator set, licence of
heavy equipment operator, pesticide training for sprayers, “hyperkes” training for medical doctor
and paramedics, welder certificate and basic OHS training performed internally. OHS training has
been programmed and provided appear balanced with OHS hazard and risk at mill and estates.
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Emergency preparedness and response procedure has been established, SOP/SMK3/SMART/LH09. The emergency conditions have been identified including general fire, land fire, explosion,
chemical spillage, and flood and earth quake. The team to handle emergency conditions has been
established consists of fire fighting team, hydrant team, medical team/first aid, evacuation team,
external relation, etc. Portable fire extinguishers have been sufficiently provided at mill and estate,
fix hydrant was provided at mill, mobile water tank was provided at estate, first aid kits were
provided sufficiently at each location of estate and mill and ambulance was provided at mill and
estate. Regular inspection and maintenance of this emergency equipment were sighted. Simulation
of emergency preparedness and response plan was scheduled once a year, result of simulation
evaluation was sighted e.g. 23 January 2010 in regard flood, 22 October 2011 in regard to earth
quake and fire, 22-23 February 2010 in regard to land fire in coordination with external fire brigade
(Manggala Agni). During this audit, the warning sign system for evacuation at BAMM was
examined and found well working. Staffs and workers including visitors were following evacuation
guidance.
Emergency shower and eyewash in general has been provided at chemical warehouse, fertilizer
warehouse and chemical mixing area both at mill and estates, only some locations of emergency
shower/eyewash were not appropriate, i.e. too far from the chemical. The content of emergency
kits and the function of emergency shower/eyewash was regularly checked, checklist was sighted.
Clinic was available at mill and each estate, provided with paramedics and one medical doctor to
cover mill and estates.
First aid kits were sufficiently provided at mill and all estates including each assistant at estate.
Sufficient training in regard to first aid treatment has been provided by company doctor to assistant
at estates and mill. During the audit, assistant was able to demonstrate the use of first aid kit.
Accident statistic was reported and reviewed on monthly basis. Quarterly accident statistic was
also reported to local authority. The procedure SOP/SMK3/SMART/LH-10 has been established to
report accident and to perform accident investigation. Statistic accident of mill and estates for 2011
were sighted during this audit, no fatality accident was reported so far; and in general the accidents
have been followed up with investigation. The level of investigation needs to be improved, see
opportunity for improvement below.
BAMM and all estates
 Found several substandard condition e.g. opened electrical connection, belt not covered,
fuel tank not provided with grounding and venting system, safety valve of compressor
vessel not working etc (BAMM, SPNE, SPNA, BMME, BAME). Immediate actions have
been taken to rectify the issue and generally the finding can be closed. However, during
surveillance audit, the issues will be checked again to verify the effectiveness of actions
taken.
All Estates
 Even though the pressurized vessel (compressor vessel) having the permit for operation for
local authority, however, the justification for safe operation could not been fully given based
on the following facts.
o Inspection conducted by local authority limited to visual inspection. No wall thickness
measurement has been reported and compared to the minimum thickness as designed
(all estates).
o There was no evidence that safety valve regularly tested (all estates).
BAMM
 The measurement of chemical factors at BAMM has been performed however the location
of measurement was outside of the factory, not at workplace. While for all estates, the
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Audit Report


measurement of chemical factors at workplace has not been performed, e.g. fertilizer
warehouse, chemical warehouse. Progress Noted: A programme to monitor and measure
the chemical factors at workplace has been established by Environmental Department.
Results to be verified during next SAI Global surveillance audit.
The result of lighting level at BAMM indicated a non realistic result and has not been
reviewed and compared to the minimum lighting level.
The structure of follow up to the results of medical check up has not been established, e.g.
statistical analysis, health promotion, preventive action and curative action to the
employees having suspected health problem, e.g. some audiometric tests of employees of
BAMM were classified not good.
Opportunities for improvement:
 Consider to review and improve the design of harvesting bridge. It was observed that at
several locations, the width of bridge was 20 cm-even though the height of bridge from the
land was below 2 m (best practice considered as working at height).
 Consider to improve the knowledge and skill for performing accident investigation and
determining the immediate cause and basic cause.
Criterion 4.8 All staff, workers, small holders and contractors are appropriately trained.
The training needs and programme has been well identified and recorded on personnel
competency matrix “Matrix of personnel competency identification”. All functions were included in
this training identification from mill manager, estate manager, assistant head, group leader,
operator at mill, sprayer, welder, boiler operator including for contractor (civil, mechanic and
transporter). The training needs identified appear sufficient and complete, this including training
related to OHS, SCCS, environmental, social, training required by regulations, training related to
operation of mill and estate. Training programme 2011 and 2012 were sighted, the training
programme is established based on the training needs identification. Realization of training
programme 2011 were sighed, e.g. first aid training, SCCS training, social impact assessment
workshop, risk assessment.
Evidence of training for key persons were verified and sighted, including for boiler operator,
sprayer, and chemical mixing operator, assistant of estates, SCCS training for loading ramp
operator and for mill assistant, pesticide and herbicide training, etc. The system to record personal
training was established-in this record, the training which has been completed by each person was
recorded, however the updating of this record still not consistent both for mill and all estates, see
finding below.
Occasionally, mill and estates were hiring contractor, e.g. for civil and mechanical contractor. The
requirements for experienced and trained contractor were included in the contract agreement-this
is in line with the competency matrix as mentioned above. Work permit system was implemented
to ensure that the contractor meets the organizational requirements including trained and
experienced workers and the use of appropriate PPE.
 Even though the evidences of training of employees were evidence but the updating of
personal training records still inconsistent, e.g. many training has been performed in 2011
but the personal training records has not been updated.
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PRINCIPLES 5: ENVIRONMENTAL
RESOURCES AND BIODIVERSITY
RESPONSIBILITY
AND
CONSERVATION
OF
NATURAL
Criterion 5.1 Aspect of plantation and mill management, including replanting, that have
environmental impacts are identified, and plant to mitigate the negative impacts and
promote the positive ones are made, implemented and monitored, to demonstrate
continuous improvement.
Initial Environmental Impact Assessment documents (ANDAL, RKL and RPL) #15/ANDAL/RKLRPL/BA/IV/1998 of PT. Inti Gerak Maju which were approved by Department of Agriculture of
Republic of Indonesia on April 30, 1998 for BAMM, BAME and BMLE were available. The
documents cover District of Batu Licin, South Kelumpang, Upper Kelumpang and Centre
Kelumpang.
Initial Environmental Impact Assessment documents (ANDAL, RKL and RPL) #104/ANDAL/RKLRPL/BA/VIII/1996 of PT. Sinar Kencana Inti Perkasa which were approved by Department of
Agriculture of Republic of Indonesia on August 9, 1996 for SPNE were available.
SPNA activities are covered in DELH Plasma KUD Gajah Mada, PT. Sinar Kencana Inti Perkasa.
DELH (Document of Environmental Evaluation) is in the process for getting approval from BLH
(Local Agency of Environment) Kota Baru District. The organisation also requested approval of
DELH to Ministry of Environment and BLH Kota Baru District on 24 October 2011 based on letter
#217/KUD.GM/Ext/X/2011.
BAMM, BAME, BMLE, SPNE and SPNA identified environmental aspect and evaluated its impact.
The result of environmental aspect and impact identification and evaluation was documented within
“List of Environmental Aspect Identification and Evaluation” Control measures of each
environmental impact were defined and implemented to ensure that negative environmental impact
were prevented and mitigated.
Implementation of RKL RPL is reported six monthly. Report for 2 nd semester of 2010 and 1st
semester 2011 was sighted and sent to Kota Baru District Environmental Agency, South
Kalimantan District Environmental Agency and Ministerial Office Environment. Receipt note was
also sighted. Report for 2nd semester of 2011 is being developed.
Based on letter from Bapedalda #660/480-APDL/Bapedalda on September 28, 2006, ANDAL, RKL
and RPL is still valid even though the ownership of organisation was changed to PT. SMART Tbk.
The letter required organisation to make submission of a statement of responsibility with regards to
environmental controlling from PT. Inti Gerak Maju to PT. SMART Tbk. Handing over responsibility
of environmental controlling was stated in the letter #1066/SK/LGL/TN/X/2006.
Criterion 5.2 The status of rare, threatened or endangered species and high conservation
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
An HCV area assessment has been carried out by the HCV Team of the Environment Department
of PT. SMART Tbk., and consist of 6 people, three of which are RSPO approved discipline
specialist, and the report is available. The report has been commented on by a reviewer, and a
Peer Review has been carried out.
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


BAME: HCV 1.2, HCV 1.3, HCV 4.1 and HCV 4.3 were identified and none for other HCV:
two species of birds (Anthracoceros malayanus, Butastur lIventer), one species of
mammals (Nasalis larvatus), and HCV 4.1 and HCV 4.3: Marsh
BMLE: HCV 1.2, HCV 1.3, HCV 4.1 and HCV 4.3 were identified and none for other HCV:
one species of plant (Nephentes sp), one species of bird (Anthracoceros malayanus), one
species of mammals (Nasalis larvatus), and HCV 4.1 and HCV 4.3: River and marsh.
SPNE and SPNA: HCV 1.3 and HCV 4.1 were identified and none for other HCV: two
species of birds (Alcedo meninting, Anthracoceros malayanus), one species of mammals
(Felis viverrina), HCV 3: Forest on Limestone Rocks, HCV 1.1, HCV 4.1 and HCV 4.3:
River and marsh and HCV 6: Cemetery
In SPNA, the rivers have not been identified as HCV areas, but nevertheless, the riparian
zones (50m wide on both sides of the river) are being managed as HCV areas to prevent
pollution and erosion. No agrochemicals are being used in this buffer zone.
The management of HCV areas is presently based on the management recommendations in the
HCV report and on the company‟s SOP of HCV area management. HCV management areas maps
were established. Circular form SMD Operation #002/SE-SMD Ops/IX/2010 on September 20,
2010 was developed with regards to protected species.
All employees and surrounding communities have been informed about the HCV areas and their
management HCV areas are being enriched enhanced with natural occurring three species.
Besides the erection of sign boards and the production of posters, Commitment to discourage any
illegal or inappropriate hunting, fishing or logging activities or to develop responsible measures to
resolve human wildlife conflicts has been provided.
All employees and surrounding communities have been informed about the HCV areas and their
management. HCV areas are being enriched/ enhanced with naturally occuring tree species
Posters and sign boards concerning HCV areas and protected species are available in the
necessary places. All staff and employees are informed about HCV areas and ERT species. Public
Consultation and dissemination of information to the employees and local communities has been
carried out.
The responsibility of HCV area management is part of the job description of the different Division
Managers. These ”HCV Officers” have no particular background for HCV management, and
knowledge and skills are still sub-standard.
All Estates
 HCV management plan has been established however the plan has not address the issues
(threats) present and not considered sufficient to conserve the HCV within the concession
area.
All Estates
 Even though the HCV report has been commented by a reviewer, it could be considered to
carry out formal Peer Review. A review of the HCV report was carried out by an HCV
discipline specialist from the Agricultural Institute of Bogor (IPB), however, it does not follow
RSPO peer review standards.
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Audit Report

It could be considered to improve knowledge and skills of HCV Officer, e.g. give particular
background for HCV management. The HCV officer have been trained internally on HCV
and management, but their knowledge and skills need improvement
BMLE
 A waste final disposal was newly constructed within the 50m buffer zone of a nature
reserve but not operation yet. It could be considered to relocate the waste final disposal
further away from nature reserve.
Criterion 5.3 Waste is reduced, recycled, re-used and disposed of in an environmentally and
socially responsible manner.
The mill and all estates have identified and documented all wastes and sources of pollution from
their activities. Result of identification was recorded in “List of Environmental Aspect Identification
and Evaluation”.
Procedure waste handling was established and implemented, SOP/SPO/SMART/LH-09. Waste
management and disposal plan to avoid and reduce pollution was described in the procedure.
Wastes are divided into three types: organic, inorganic and hazardous waste.
Fiber and shell from POM were used for boiler feed. EFB and boiler ash were used for fertiliser in
BAME and BMLE. The quantity of EFB generated is recorded daily and estimated about 21 % of
FFB. Record of EFB was sighted for January to December 2011. Waste water from clay bath has
been disposed to waste water pond. Water contaminated with boiler ash was collected in
sedimentation tank. Chemical container from water treatment plant was cleaned and the waste
water was collected in neutralisation tanks. Regeneration water from water treatment plant was
also collected in neutralisation tanks. Waste water from sedimentation and neutralisation tanks was
disposed to surface water. The waste water quality from sedimentation tank was monitored prior to
be disposed to surface water. Monitoring result of waste water quality from sedimentation tank was
reviewed for 2nd semester of 2010 and 1st semester of 2011 against Ministry of Environmental
Decree #51/1995. The result was meets the regulation standard. The waste water from
neutralisation tank was monitored for parameter pH prior to be disposed to surface water.
Sample waste from laboratory was returned to process in fat pit. Chemical container from
laboratory was returned to supplier. Receipt note of returning chemical container to supplier was
sighted. It was observed that organic and inorganic waste was segregated at point of source.
Organic waste from housing was disposed to hole located at the backyard of each house.
Inorganic wastes from Mill and Estates including housing were disposed to landfill in the Estates
area. Areas of inorganic wastes disposal was far from housing, in the flood-free area and not in
swamp area.
The other hazardous wastes such as used oil, used battery, used filter oil, and contaminated rags
from workshop activities have been handled properly as hazardous wastes. Quantity of hazardous
wastes was recorded. According to letter of agreement between Mill and Estate Managers of
BAMM, BAME, BMLE, SPNE and SPNA #LBH/BAMM/01/01/2010, the hazardous wastes from
BAME, BMLE, SPNE and SPNA activities were sent to BAMM temporary hazardous waste storage
prior to be disposed to authorised institution. In actual, hazardous waste from SPNE and SPNA
was sent to SKPM. Letter of agreement between SKPM and SPNE and SPNA
#LBH/SKPM/12/01/2012 mentioned that hazardous wastes from SPNE and SPNA was sent to
SKPM prior to be disposed to authorised institution. Hazardous wastes were collected, stored and
disposed inline with Procedure SOP/SPO/SMART/LH-18. Temporary storage of hazardous waste
was provided to collect hazardous waste prior to be disposed to licensed vendor. The organisation
had permit of temporary storage of hazardous waste #188.45/220/KUM/2010 from local
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government and valid for 5 years. The hazardous wastes balance was made for each type of
hazardous waste: waste oil, waste battery, waste fuel and oil filters and contaminated rags. Theses
hazardous wastes were managed by licensed vendor. Disposal of hazardous waste was
completed with manifest. Manifest of disposal were sighted for 2011 and January 2012. Medical
wastes were disposed to hospital to be burnt in the incinerator.
Handling of agrochemical containers was described in work instruction IK/SMART/LBH/01. All
agrochemical containers were triple rinsed and disposed in the designated area and separated
with organic and inorganic waste landfill. Records of chemical containers quantity disposed and
photograph of disposal activity were evident. The other agrochemical containers were reused for
agrochemical solution container during spraying. Fertiliser sacks were cleaned prior to be reused
for collecting piece of FFB during harvesting. Quantity fertiliser sacks cleaned and reused was
recorded. All divisions in all estates have been completed with area to clean agrochemical
containers and fertiliser sacks. Liquid waste from cleaning was reused for agrochemical dilution
during spraying or gardening.
Record of all wastes monitoring was sighted.
BAMM
 pH of water from neutralizing pond is checked daily. Result mentioned that it was inline with
Ministry of Environment Degree #51/10/1995. Last measurement of quality of water from
neutralizing pond with complete parameter was performed on 9 April 2007. Measurement
result exceeded Ministry of Environment Degree #51/10/1995 for parameter BOD and
COD. Complete measurement has not been performed any longer.
SPNE
 Based on official report of pesticides containers land-filling, pesticides containers was landfilled once in 2011, on 2 December 2011. Permit of temporary storage of hazardous waste
mentioned that hazardous wastes are not allowed to be kept more than 180 days.
 Record of contaminated rags was not provided.
 Contaminated water from pit at area of diesel fuel loading pipe was overflowed due to pit
was filled with rain water.
 Contaminated water from emergency shower or eyes wash was connected directly to open
drainage.
Criterion 5.4 Efficiency of energy use and use of renewable energy is maximised.
Fiber and shell was used as boiler feed. Volume of fiber and shell used for boiler feed is estimated
monthly. The quantity fiber generated from the mill was estimated about 12.50% of FFB processed
and shell about 5.75% of FFB processed. Record of fiber and shell used for boiler feed was
sighted for 2010 and 2011. Use of renewable fuel was increased in 2011 than in 2010. Total
energy generated by steam turbine generator was recorded as total energy (kCal) per ton CPO.
Fossil fuel was used for heavy equipments and emergency diesel generator. Total fuel
consumption is summarised monthly as litre of diesel fuel per ton of FFB processed. Record
sighted for 2010 and 2011.
To reduce fossil fuel, when boiler was not in use for mill operation, boiler was used to operate
steam turbine generator to change diesel electricity generator operation to generate electricity for
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housing leads to 85% saving of fossil fuel from 2010 budget and 93% from 2011 budget.
Diesel fuel in the estates is used for operation of heavy equipments, vehicles and diesel electricity
generator to supply electricity for office and housing including transport of FFB. The consumption
of diesel fuel is recorded and monitored monthly and evaluated for each litre of diesel fuel/FFB
tonnage. It was noted that consumption of diesel fuel/FFB tonnage in 2011 was decreased
compared to 2010 in BMLE. Consumption of diesel fuel per FFB tonnage in 2011 was increased
compared to 2010 in SPNE and SPNA due to additional heavy equipments were needed in this
Estates for construction and maintenance projects such as road maintenance, trench maintenance,
etc. The Estate‟s Management was aware of this condition and has defined target to reduce fuel
consumption per FFB tonnage in 2012.
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.
Fire was not used during land preparation for conversion coconut to oil palm in 2006 and neither
for waste disposal.
The organisation has policy of zero burning documented in circular letter #071/SMD Ops/IX/2007
form SMD Operation. Zero burning activities were also required in MCAR chapter 5. MCAR
mentioned that land preparation was performed by overthrowing and chipping.
Conversion of plant was performed in 2006 from coconut to oil palm in block F7, F8, F9, G8, G9
and G17 BAME. Land preparation used “Enviro Mulcher”. Realisation of replanting activities was
well documented.
The procedure for land fire emergency preparedness and response was established,
SOP/NP/SMART/XI/LH-02. The training to handle land fire has involved external organization i.e.
Mandala Agni, an organization established by the government specialist in land fire. The facilities
to handle land fire have been provided including portable fire extinguishers, mobile water tank
completed with pump, fire cloth, etc. The provision of the fire fighting facilities appeared to be
inline with the risk assessment. Regular inspection on this equipment was sighted. The simulation
to handling land fire has been performed to all estates, evaluation records were sighted e.g. 19
December 2011 for BAME, 23 July 2011 for BMLE, 13 January 2012 for SPNE, 19 July 2011 for
SPNA.
Criterion 5.6 Plans to reduce pollution and emissions, including greenhouse gasses, are
developed, implemented and monitored.
Identification of pollution and emission sources at BAMM activities was evident. The source of
pollution and emission was recorded within “List of Environmental Aspect Identification and
Evaluation” including ambient air (particulate, dust, COx, NOx), boiler emission, diesel electricity
generator emission, vehicle and heavy equipments emission.
Identification of pollution and emission sources at BAME, BMLE, SPNE and SPNA activities was
evident. The source of pollution and emission was recorded within “List of Environmental Aspect
Identification and Evaluation” including diesel electricity generator emission, vehicle and heavy
equipments emission. Diesel electricity generator was used for electricity in housing.
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Monitoring of pollution and emission quality of sources identified were performed inline with
Environmental Monitoring Plan. In addition, annual monitoring and measuring plan was
established. Monitoring and measurement results for 2 nd semester of 2010 and 1st semester 2011
were sighted in Mill and Estates for boiler emission against Environment Ministry Decree #07/2007,
diesel electricity generator against Environment Ministry Regulation #21/2008, vehicle and heavy
equipment emission against Environment Ministry Regulation #05/2006, odour emission against
Environment Ministry Decree #50/Menlh/11/96, also ambient air quality against Government
Regulation #41/1999. Monitoring and measurement results for 2 nd semester 2011 have not been
finished yet.
To reduce pollution and emission, the organisation performed efforts and strategies, e.g. boiler was
completed with dust collector, multi cyclone and dust conveyor to reduce particle and ash and
prevent particle and ash pollution to waters, planting of several vegetations was performed around
waste water pond.
POME was processed through multi feeding to 8 ponds. Capacity of each pond is 10,000 M3. The
operation of waste water treatment ponds is described in procedure MCMD #1/2010. Process
parameter monitoring and maintenance of the ponds were sighted. POME is monitored monthly as
required by permit of land application by external laboratory. The result of POME monitoring were
reviewed including measurement of BOD for period 2 nd semester of 2010 to 1st semester of 2011.
The Ministry of Environment #29/2003 and permit of land application required that BOD of POME
flowed to land application is less than 5,000 mg/litre. The result of POME quality during this period
was under 1,500 mg/litre.
PRINCIPLES 6: RESPONSIBLE CONSIDERATION OF EMPLOYEES AND INDIVIDUALS AND
COMMUNITIES AFFECTED BY GROWERS AND MILLS
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.
Social Impact Assessment (SIA) for the mill and estates has been done in July 2010 and was
conducted by the SMART team from Head Office Jakarta. Methods of SIA have been done by
interviews with 'key person' such as village head, traditional leader, youth lease and Estates
community. Assessment was carried out on rural communities around the mill and estates, e.g.
Serongga Village. Assessment is also conducted to the affected parties such as the community
around the estate
and actively participative in social programs that carried out by estate.
Serongga Village is in the survey due to this village location is borders with BAMM and BAME.
The positive and negative impacts were obtained by compilation of perception of community and
respondents. Some of the impacts identified were:
SIA results did not indicate any negative impact to the surrounding community mill and estates.
Positive impacts were identified such as:
 Additional income communities, as some residents work at the mill and estates.
 Additional education, because the company provides scholarships for community.
Action plan to implement and monitor social impact was focus to the improvement of CSR to the
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community. And this CSR program is implemented annually. Monitoring of realization action plan
was conducted by the SIA Team according determined period. Also status of action plan was
determined and it was mentioned in the „Rencana Pengelolaan Dampak Sosial (Sosial Impact
Management Plan) dated 02/01/2011.
Based on letter from Bapedalda #660/480-APDL/Bapedalda on September 28, 2006, existing
ANDAL, RKL and RPL that encompasses social impact assessments is still valid even though the
ownership of organisation was changed to PT. SMART Tbk.
Implementation of RKL RPL is reported six monthly. Report for 2 nd semester of 2010 and 1st
semester 2011 was sighted and sent to Kota Baru District Environmental Agency, South
Kalimantan District Environmental Agency and Ministerial Office Environment. Receipt note was
also sighted. Report for 2nd semester of 2011 is being developed.
SIA also included for the small holder. The results of assessment identified no negative impact. It
was identified many positive aspects for the out growers such as, improvement of out grower'
income and ability to manage the estate. Development of small holder was made by the SMART,
among others, fertilizing, planting and harvesting.
Opportunity for improvement:
Mill and Estates
 Considered to perform peer review to SIA document to ensure that all impacts are
identified.
BAMM
 Social Impact Assessment Report is available, considered to create a map with the position
of the mill, estates and stakeholders
Criterion 6.2 There are open and transparent methods for communication and consultation
between growers and/or millers, local communities and other affected or interested parties.
Procedure for communication and community consultation has been properly established in SOPs
/ Y / SMART / XIV / MCAR 03 - Communication and Consultation. Mechanism of collaboration with
local community and other interested party also was described in the procedure. This procedure
was implemented by the estate. Communication and consultation for community was recorded.
E.g. minutes meetings with community leaders, minutes lending of heavy equipment to the village.
List of stakeholders was already available, the results of interviews conducted was explained that
the stakeholder communities affected directly from this impact. List of stakeholders was divided
into groups: government, community leaders, youth leaders and others. This list also included the
name and address of its stakeholders.
Communities‟ aspirations have been followed up; most of the aspirations of these communities
contain requests for assistance to educational facilities, houses of worship, etc. These aspirations
were followed up and recorded.
In accordance with the decree SK: 003/MR/BAMM/01/0 determined that the Mill Unit Head and
Estate Manager was appointed as the official responsible for consultation and communication with
the community
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BAMM
 List of stakeholders are available, considered to create a verification method of
stakeholders list. It is needed to ensure that the lists of stake holders are the community
directly affected by mill and estates.
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
The mechanism of dispute settlement procedures have been defined in SOP / NP / SMART / XII /
MCAR 001. Problem solving is done in consultation with affected parties. Mechanisms of conflict
settlement are conducted by mutual consent and no coercion of any party, and it has been
described in the procedure.
According interview with stake holders and complaint list, there is no complaint from stakeholders.
Procedures for the identification and calculation of fair compensation for the loss of legal or
customary right of the land, with the involvement of local community representatives and relevant
agencies and made publicly made and mentioned in the - SOP / NP / SMART / XII / MCAR 001.
According interview with stake holder, there is no negotiation process related to use of palm oil
plantation.
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
communities and other stakeholders to express their view through their own representative
institutions.
Procedures for identification, calculation and provision of compensation for the loss of legal and
customary rights by involving the community and relevant agencies already established in the
procedure.
Criterion 6.4 Indicator Minor 1, 2 and 3
It was noted that there was no acquired new land after 2007.
Criterion 6.5 Pay and condition for employees and for employees of contractors always
meet at least legal or industry minimum standards and are sufficient to provide decent
living wages
Refer to worker list and interview with the worker; there is no worker from overseas/migrant. All
worker form local. Mill and estates use local workers.
List of wages to employees was available for the estates or for mills. Wages for these employees
were divided into groups of permanent employees - SKU (Permanent worker – Syarat Kerja
Utama), PKWT (Contracted worker – Pekerja Waktu Tertentu) and BHL (daily basis paid workers –
Buruh Harian Lepas). From pay checks received was proved that the pay conformed to that set out
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in the PKB and the minimum wages defined by Governor of Central Kalimantan. Wages are
calculated base of the working day plus rice, rice given was 15 kg/person.
Based on interview with worker it was noted that there is no worker wage deduction.
The company and workers have arranged mutual working agreements as described in PKB
document. PKB was established in accordance with Act #13/2003 that provides some additional
requirements for clearer interpretation in work practice.
PKB (Mutual Working Agreement – Perjanjian Kerja Bersama) has been established in mill and
estates. The agreement was made by SPM (Independent Worker Union – Serikat Pekerja Mandiri).
This Agreement contains the rights and obligations between workers and firms. PKB has been
validated by the local Labor Office
Public facilities were provided by the company and covered residential facilities, day care,
education, clean water and medical clinic and their medicines. From the observations in the field,
all the facilities described in the above procedures are adequate. All workers were provided leaving
house and agreement for approval for stay in the leaving house was made for workers.
Residential facilities were periodic maintained; schedule for periodic maintenance was evident and
implemented. Some of repair was conducted by the Engineering according request from the
worker.
Some work was done by contractor for FFB transportation to mill and civil works. Work agreement
with the contractor was mentioned requirement to comply with workers regulations.
ALL
 Number of employee status conversion has been reported annually ( in summary ) to
present transparency that company do have good will to improve social degree of BHL
workers to permanent worker . Consistency of such produced report will be checked again
in the next audit. Criteria & requirements for BHL conversion to SKU status might be also
formalised in a documented reference.
BAME, SPNA
 It could be considered to communicate organization labour policies to local contractor.
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.
A published statement in local languages recognizing freedom of association was stated in the
Memorandum from VPA. Memorandum stated that the company respect to comply with regulation
pertinent to freedom of association. Also PKB was stated that freedom of association can be
conducted by the worker through SPM. SPM for mill and estates was available and chairman and
his administrator of PUK (Caretaker unit – Pengurus Unit Kerja) was selected by the workers.
Meeting with the SPM have been done by the company and its outcomes are recorded
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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.
Organisation has policy for minimum age for worker was implemented and mentioned in the PKB.
List of worker and related document was verified and there is no worker under 18 years old. The
compliance in accordance with national laws has been evaluated by the organisation as described
in criterion 2.1.
Age of workers was determined by the Estates and Mill, as well as working hours. And also use of
'family harvesting' is also allowed, but not currently implemented by Plantation.
Criterion 6.8 Any form of discrimination based on race, caste, national origin, religion,
disability, gender, sexual orientation, union membership, political affiliation, or age, is
prohibited.
Company policy related to the discrimination was determined and documented. And it was
communicated to all workers in the estate and mills.
All discrimination is prohibited for all area in estate and mill. PKB also mentioned ban of
discrimination for all workers in the organization.. Procedure for worker recruitment was available
and mentioned there is no discrimination treatment during recruitment process. No evidence of
discrimination found during the audit.
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.
Criterion 6.9 Indicator Major 1 and 2
Company policy related to the prevention of sexual harassment and violence and protection of
reproductive rights has been defined by Top Management and is applied to mill and all estates.
PKB also mentioned this policy. It was communicated to all workers at mills and estates but this
policy has not been communicated to contractors as mentioned/recommended in criterion 6.5
indicator minor 2.
Evidence of implementation of sexual harassment prevention policy is available, and this has been
communicated by the HR Corporate to all workers. Committee for gender has been established by
the company. Records of meetings and the Committee for gender socialization were available.
Each estate and mill has appointed representative for gender committee, meeting gender
committee was conducted monthly according minutes some issues were discusses such as
women rights, counselling for women affected by violence, women to be allowed to breastfeed up
to nine months before resuming chemical spraying or usage of tasks, and women to be given
specific break times to enable effective breastfeeding.
Implementation of policy for the protection of reproductive rights has been made by the company.
And female employees are given an explanation related to the rights of reproduction. All female
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worker are checked periodically and recorded in the medical record, it was evidence that company
has implemented protection of reproductive rights. The Committee for gender also monitored its
implementation.
Procedures for handling complaints already established all complaints about sexual harassment
and reproductive rights will be submitted to the Gender Committee to follow up. Mechanism of
complaint handling was described started from
reporting her complaint to the Committee
Representatives at estate, gender grievance by the Committee, reporting to the company and the
final decision of the gender committee and the company. According interview with gender
committed there is no complaint related to sexual harassment.
Criterion 6.10 Growers and mills deal fairly and transparently with smallholders and other
local business.
Criterion 6.10 Indicator Major 1 and 2
Pricing mechanisms for FFB was described in FFB purchase procedure. Price mechanism of FFB,
CPO and palm kernel is determined by province government and reviewed in monthly basis. The
price is applied for all growers in the province. The company updates the information on the FFB
pricing formula that includes details of transport, milling and shipping costs, each month and
provides it to smallholders. Annual contract are made between FFB suppliers and mill, describing
FFB specification required, contract period, determination of FFB pricing, and term of payment.
Information of FFB set was available to the FFB suppliers and the commitment was stated in the
procedure.
The selection and evaluation of supplier/vendor was based on capability of supplier and vendor to
supply required inputs and or services. Specification of inputs and or services required was
communicated to the supplier/vendor through tender document or request for quotation. Access for
grievance has been provided and detailed in the each contract (statement letter).
In case there is dissatisfaction with grower, growers also have access to the estate for settlement
of complaint, e.g. FFB price does not comply with market rates. Also it was described in the FFB
Purchase Procedure.
A review to the current FFB purchase records (December 2011 to current) shows that the price set
was consistently used as recorded in the record of FFB receiving. The payment of FFB received
were planned and executed in timely manner in line with term of payment agreed within the
contract.
Also during public consultation with grower, it was explained by the grower that purchased FFB
was complied with the price that determined by the province government.
BAMM
 The contractual agreement between mill and local business (smallholder) for FFB purchase
was expired in December 2011; the new contract was only “Statement Letter” that did not
clearly described the payment term.
Criterion 6.11 Growers and millers contribute to local sustainable development wherever
appropriate.
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Records of company contribution to regional development was evident, among other churches and
mosques of development assistance, aid to needy communities around the garden, the school
books. And this assistance is identified at the time of public consultation.
And also estates were given opportunity to the community to obtain employment in the estate.
According SIA result, community is not interested to work at estate, they are more interested to
work in other sectors e.g. mining, civil servants, trader, etc.
Some activities were conducted by the local contractors such as building houses, road
maintenance (road hardening). Agreement contract with local supplier was evident.
BAME
 In CSR program for year 2011 mentioned a program for eye glasses in 3 villages, considers
to record distribution of glasses the villages for Serongga, Batu Ampar and Langadai
villages.
PRINCIPLES 7: RESPONSIBLE DEVELOPMENT OF NEW PLANTINGS
Procedures regarding the responsible development of new plantings are in place, e.g. Manual of
Land Preparation and Cultivation PT. SMART Tbk (dated 1 July 2010). The manual covers flow
process for land preparation and cultivation which completed with “Matrix of New Land Clearing
Requirements”, procedures and work instructions to each stage of land preparation and cultivation.
Plantation in BAME, BMLE, SPNA and SPNE was performed in 1991, 1992, 1993, 1994, 1996,
1997, 1998, 1999, 2000, 2001, 2005, 2006 and 2007. Plantation in 2005 to 2007 was located in
BAME. These areas were conversion from the organisation‟s Coconut into Oil Palm (within the
same concession/license area). Conversion from Coconut to Oil Palm has been communicated to
local government. The government said that the conversion did not change the AMDAL. Based on
HCV assessment report, there were no HCV areas or forests were present here between
November 2005 and November 2007.
PRINCIPLES 8: COMMITMENT TO CONTINUOUS IMPROVEMENT IN KEY AREAS OF ACTIVITY
Criterion 8.1 Growers and miller regularly monitor and review their activities and develop
and implement action plans that allow demonstrable continuous improvement in key
operations
The commitment for continual improvement was shown through innovation system involving all
levels within the organisation. There were several events for innovation system including Regional
conference and PSM conferences. The innovation project then shared to other estates.
Evidences of application of the innovation project were sighted for the mill and all estates:
 BAMM: cleaning cracker mix (kernel and shell) with hot water to reduce CaCO 3 in clay bath
process installation of resin trap to minimize resin loss
 BMLE, SPNE, SPNA: clean house project, tools making which can cut to the roots from
regrowth to control Aspelium Nidus, tools making for fertilising to improve the accuracy of
dosage and eliminate losses.
 BAME: tools making for fertilising to improve the accuracy of dosage and eliminate losses,
improve land application by using the pipe between the flatbed, solver tool fertiliser making
to improve fertiliser material so fertiliser can be more rapidly absorbed by root.
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The mill implemented ISO 14001:2004 and established environmental management objectives and
targets with were supported with environmental management program. ISO 14001:2004 audit by
certification body was conducted on 23-24 February 2011. Its findings were followed up.
Regular evaluation of plantation and mill operation was performed through several levels of audits
e.g. Operation Internal Audit (OIA) and MAA which performed twice a year, the coverage of the
audit including production planning, production, power generation and utilization, consumable,
process control, quality control – including waste water treatment, maintenance, occupational
health and safety, FFB incoming and inspection, and laboratory, AAA that was performed twice a
year, RSPO Internal Audit that was performed minimal once a year. All application of RSPO
Principles and Criteria and Indonesian National Interpretation of RSPO Principles and Criteria for
Sustainable Palm Oil Production was covered in this audit. The above audit reports indicated that
any gaps against standard operation procedure of plantation and operation were noted. Corrective
action plan was issued and implemented to demonstrate effort for compliance as well as continual
improvement.
RSPO internal audit has been conducted in January and April 2011 for the mill and all estates, the
auditors assigned from Environmental Department of PT. SMART Tbk. Internal audit report was
generated, and internal audit findings were followed up by the mill and all estates. A list of negative
findings and its corrective action plan was used for monitoring their status. Internal verification has
been taken prior to this certification audit.
Matrix of action plan has been established for negative findings rose during SAI Global RSPO
preliminary audit. Corrective action plan has been established and implemented. The effectiveness
of the corrective action taken has been internally verified.
RSPO Supply Chain Certification Standard – Module E - CPO Mill: Mass Balance
BAMM received FFB from its own Estates and from the third party supply base. All of the FFBs are
processed under the same facilities; therefore the supply chain model that can be applied is Mass
Balance (MB) model. Records for period January – December 2011 were reviewed. Below are the
detail estimation of CPO and Kernel produced (certified and non certified).
CPO produced (certified)
CPO produced (non-certified)
Kernel produced (certified)
Kernel produced (non-certified)
: 45,072 MT
: 10,928 MT
: 10,000 MT
: 2,450 MT
1. Documented Procedures
BAMM has established and documented written procedure incorporated to the implementation of
RSPO SCCS. It is described in SOP Supply Chain (SOP/BWLM/SC) and written internal procedure
(SOP). Receiving FFB, including the grading up to CPO and Kernel delivery are described in the
procedure. The procedures were look up dated and covering the implementation of all elements in
RSPO SCCS requirements. The person having overall responsibility for and authority over the
implementation of RSPO SCCS has been assigned (Mr. R Silitonga). Assignment letter was
sighted (dated 1 December 2011). He demonstrated awareness of the facilities procedures for the
implementation of this standard.
2. Purchasing and Goods In
BAMM has a clear system for recording FFB received from certifiable supply base and non
certifiable supply base. It was verified that the receipt of FFB was traceable to the supply base unit.
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Weighing slip and receiving report issued clearly stated weight off FFB received and its source. A
review to the last two months records found that they were well maintained and retrievable. The
mechanism for handling non-conforming material/documents include inform to certification body if
there is overproduction is described in SOP/BWLM/SC. This mechanism should also be used to
take appropriate steps when there is a projection of overproduction.
3. Record Keeping
A review to the records and related documentation of the implementation of the SCCS found that
accurate, complete and up to date records and report have been maintained by BAMM. The
records and reports are easily accessible both in hard copy and soft copy. Retention time for these
records and reports has been determined (5 years). Balance among all FFB, CPO and PK
receipts, produced and delivered are conducted in daily basis. The record has been well
maintained. The mechanism for delivering product only from positive stock was in place and the
sales records reviewed (see below) compare against stock report demonstrated that the site only
delivered RSPO certified product from positive stock. Product name (CPO or Kernel) and supply
chain model (MB) were notified in sales records. During on site observation was found that the
kernel is crushed in the facility under PT Tapian Nadenggan.
4. Sales and Goods Out
BAMM‟s CPO is delivered to Tarjun bulking terminal while the kernel is delivered to Tarjun Kernel
Crushing Plant. Procedure SOP/BAMM/DO and SOP/BAMM/PK describe the process of delivery
and its recording. A review to delivery records January 2012 found that result of the delivery (CPO
and PK) was well recorded and maintained. Delivery records found that information of who buyer
is, quantity delivered, product description, remarks regarding applied supply chain model (Mass
Balance model) and the transporter were included.
5. Training
Qualification of personnel for each job function has been defined and documented, including
training requirements necessary for Supply Chain. Procedure has been established and
implemented for identifying training needs, programming training, delivering training, and
evaluating effectiveness of training. Training for Supply Chain requirements have been delivered to
personnel in BAMM. The training records were made including training material, training
attendance and individual training record. Individual training record, for personnel in relation to
implementation of Supply Chain requirements was sighted, e.g. Mill Manager, Supervisors and
administration.
6. Claims
The system complies with RSPO Rules for Communication and Claims.
 System of recording of stock and delivery has been clearly separated between certified
CPO (and kernel) and non-certified CPO (and kernel) in manual system; however in SAP
(computerized record) it has not been clearly separated yet.
3.2
Recommendation
The recommendation from this audit is approval as a producer of RSPO Certified Sustainable Palm
and Palm Kernel.
Audit recommendations are always subject to ratification by RSPO.
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This report was prepared by: Ria Gloria, Sigit Yulianto, Fadjar Deniswara and Irawan Bawono
3.3
Environmental and Social Risk for this scope of certification for planning of the
surveillance audit







Mill and Estates: SIA update and execution plan, BHL issues, communication and
consultation between growers and/or millers local communities and other affected or
interested parties
Estates: HCV management plan,
SPNA: Legal boundary of SHM and its maintenance
SPNA: PKB of worker
SPNA: Progress of DELH (Document of Environmental Evaluation)
BAMM: Permit of surface water abstraction
BMLE: Water management
3.4
Acknowledgement of Internal Responsibility and Formal Sign-off of Assessment
Findings
Please sign below to acknowledge receipt of the assessment visit described in this report and
confirm the acceptance of the assessment report contents including assessment findings.
Signed for and on behalf of PT. SMART Tbk.
Mr. Ismu Zulfikar
Head of Environmental Department
Date
Signed for and on behalf of PT. SAI Global Indonesia
Mr. Joko Prayitno
Certification Manager
Date
Page 47 of 68
Appendix “A” – Audit Record
Date
Auditor
10.01.2012
Audit meetings plus functions/ processes/ areas/ *shifts audited:
Batu Ampar Mill (BAMM)
Ria, Sigit,
Denis, Bayu
Resit
Sigit
Sigit
Ria
Ria
Denis & Bayu
Denis & Bayu
Denis & Bayu
Opening meeting
BAMM and its supply bases:
Document review:
Principle 3: Criterion 3.1 (BAMM and its supply bases)
Principle 8: Criterion 8.1 (BAMM and its supply bases)
BAMM:
Document review and site visit:
Principle 1: Criterion 1.2 (OHS, HGU and record)
Principle 2: Criterion 2.1 (evaluation of compliance with OHS regulation),
Principle 4: Criteria 4.7, 4.8
SCCS: Module E.5.1 / D.6.1
Clarification:
 Time bond plan
 Requirements for uncertified management units and/or holdings
BAMM:
Principle 1: Criterion 1.2 (AMDAL)
Principle 2: Criterion 2.1 (evaluation of compliance with Mill regulation)
Principle 4: Criterion 4.4
Principle 5: Criteria 5.1, 5.3, 5.4, 5.6
Principle 6: Criteria 6.1 (6.1.2, 6.1.3 Minor)
BAMM:
Document review:
Principle 1: Criteria 1.1, 1.2 (Social document and record)
Principle 2: Criterion 2.1 (evaluation of compliance with Social regulation)
Principle 6: Criteria 6.1, 6.2, 6.3, 6.5, 6.6, 6.7, 6.8, 6.9, 6.11
Interview with labour union: Labour Union and Gender Committee
Interview with employees of BAMM
Criteria 5.1, 5.2, 6.3, 6.4, Community Development: Interview with local
community: Community leader, Religion leader and Youth leader
BMME, BMLE, SPNA, SPNE
Resit
11.01.2012
Document review:
Batu Mulia Estate (BMLE)
Sigit
Denis & Bayu
Denis & Bayu
Denis & Bayu
Denis & Bayu
Principle 1: Criterion 1.2 (OHS, HGU & Estate permit and record)
Principle 2: Criteria 2.1 (evaluation of compliance with OHS regulation), 2.2,
2.3
Principle 4: Criteria 4.6 (4.6.2 minor) 4.7, 4.8
Principle 5: Criteria 5.5 (5.5.3 major and 5.5.1 minor)
Document review:
Principle 4: Criterion 4.6 (4.6.3 minor)
Principle 6: Criteria 6.1, 6.2, 6.3, 6.4, 6.5, 6.6, 6.7, 6.8, 6.9, 6.11
Site visit: Observation of Facility
Interview with employees of BMLE
Audit Report
Ria
Ria & Resit
12.01.2012
Principle 2: Criterion 2.1 (evaluation of compliance with Estate regulation)
Principle 4: Criteria 4.1, 4.2, 4.3, 4.4, 4.5, 4.6
Principle 7 (when applicable)
Sungai Panci Estate (SPNE)
Sigit
Denis & Bayu
Denis & Bayu
Denis & Bayu
Denis & Bayu
Ria
Ria & Resit
13.01.2012
Principle 1: Criterion 1.2 (OHS, HGU & Ijin Perkebunan and record)
Principle 2: Criteria 2.1 (evaluation of compliance with OHS regulation), 2.2,
2,3
Document review:
Interview with employees of SPNE
Sungai Panci Plasma (SPNA)
Sigit
Denis & Bayu
Denis & Bayu
Denis & Bayu
Denis & Bayu
Ria
Ria & Resit
Principle 1: Criterion 1.2 (OHS, HGU & Estate permit and record)
Principle 2: Criteria 2.1 (evaluation of compliance with OHS regulation), 2.2
(2.2.2. major)
Document review:
Interview with employees of SPNA
Page 49 of 68
Audit Report
Irawan
14.01.2012
SCCS except SCCS: Module E.5.1 / D.6.1
Batu Ampar Estate (BAME)
Sigit
Denis & Bayu
Denis & Bayu
Denis & Bayu
Ria
Ria & Resit
Principle 1: Criterion 1.2 (OHS, HGU & Ijin Perkebunan and record)
Principle 2: Criteria 2.1 (evaluation of compliance with OHS regulation), 2.2
(2.2.2. major)
Principle 5: Criterion 5.5 (5.5.3 major and 5.5.1 minor)
Document review:
Principle 1: Criterion 1.1, 1.2 (Social document and record)
Site visit: Observation on Facility
Interview with employees of BAME
Interview with Head of Koperasi Tekad Maju
Irawan
SCCS (continue)
Ria, Sigit,
Denis, Bayu,
Resit, Irawan
Auditor review
Ria, Sigit,
Denis, Bayu,
Resit, Irawan
Closing meeting
All applicable requirements of relevant standards are covered during the audit of the „Functions/Processes/Areas. * Enter shift
details only where applicable.
Page 50 of 68
Audit Report
Appendix “B” – Nonconformities and Opportunity for Improvement Summary
RSPO Principe and Criteria, Indonesian National Interpretation
Major Nonconformity
QEF08E.RSPO.01
Non-Conformance Report
CLIENT ATTENTION – IMPORTANT
Failure to provide action plans as arranged with SAI Global and/or to implement correction and corrective action within the nominated time frames
may lead to a recommendation that your certification be suspended.
Note to Auditors: Use one page per „deficiency‟. For extra pages use to select all (ctrl+A) put curser at the bottom of the last page and select copy (ctrl+C)
Activity #:
PT. SMART Tbk. Batu Ampar Mill and
its supply bases
Site:
2. Compliance with applicable laws and regulations
363103
RSPO Principle:
RSPO Criteria and
Indicator(s):
Client:
Criterion 2.2 Indicator
2
NCR#:
2012-01
Category:
App/Cert:
RSPO20006
Batu Ampar Mill
Major
Section 1- Details of non-conforming situation:
No evidence that legal boundaries are clearly demarcated and visibly maintained at SPNA
Objective evidence:
Sungai Panci Plasma (SPNA) consists of 4 villages i.e. Telaga Sari, Mandala, Sukamaju and Plajau Baru.
Legal boundaries for 3 villages i.e. "Telaga Sari, Mandala dan Sukamaju" could not been seen during the audit as
stated/required by land own title certificates.
(Sungai Panci Plasma (SPNA) terdiri dari 4 desa yaity Telaga Sari, Mandala, Sukamaju dan Plajau Baru. Batas-batas
legal lahan tidak ditemukan pada ke tiga desa "Telaga Sari, Mandala dan Sukamaju" sebagaimana dinyatakan dalam
dokumen kepemilikan tanah SHM (Sertifikat Hak Milik).
Ria
Gloria
Audit Team
Leader
Organization’s
acknowledgement
of receipt of NCR
Name
Date:
14 January 2012
Name
Ismu Zulfikar
Date:
14 January 2012
Section 2- Organization’s Proposed Action Plan including Root Cause Analysis, Correction and Corrective Action with
completion date(s) (Attach separate sheet if required))
Root Cause Analysis (how/why did this happen?):
Village boundary was not sign of land ownership but can be made as outer boundary from SPNA which legality of the ownership is
collective
Correction with completion dates (what will be the immediate fix?):
The organisation has been coordinated and has gotten approval from KUD Gajah Mada to provide legal boundaries of Desa Telaga
Sari, Mandala, Sukamaju and Plajau Baru
The organisation has performed consultation with BPN with regards to provision of village legal boundaries
Provide and maintain legal boundaries
Completion Date:
15 February 2012
Corrective Action with completion dates (what action will be taken to prevent recurrence?):
Determine legal boundaries for each small holder with collective ownership
Completion Date:
15 March 2012
SAI Global Verification Method and date due:
Page 51 of 68
Audit Report
Off site verification, verifying document and pictures.
Due Date:
Organization
Representative
14 April 2012
Name:
Date:
H. Suhardi
10 February 2012
SAI Global review and
acceptance of Corrective
Action Plan
Name:
Date:
Sigit
22 February 2012
Section 3- Details of SAI Global verification of organization’s implementation of action plan:

Based on the map and pictures, it was verified the marking of legal boundaries for SPNA has been provided,
approved by BPN. The maintenance programme to legal boundaries 2012 was also sighted. (22/02/2012).
Section 4- NCR closed out by SAI Global on (date): 22 February 2012
SAI Global Team Leader Name: Ria Gloria
Page 52 of 68
Audit Report
Page 53 of 68
Audit Report
Page 54 of 68
Minor Nonconformities
XXXXXXXXXX
No
RSPO
Details
Criterion
1
2.1
BAME, SPNE

 Several containers of hazardous material or
waste were not completed with label and or
hazard symbol, e.g. container of pesticide
solution stored in Division Warehouse
(BAME), container of diesel fuel in diesel
generator set room in Division Office and
workshop (SPNE and BAME), container of
medical waste in Clinic (SPNE).
2
4.1
BAMM

 It was found that thermometer on screw press
#2A and kernel silo #4 was not function.
 Calibration of laboratory balance (Sartorius &
Ohaus) was not done using calibrated weight
scale. Oven (Memmert) used for moisture

analysis has not been calibrated.
 It was indicated that Clarification daily report
at the day audit was not made properly.

3
4.4
BMLE

 Program of cleaning of main drain, collection
drain and making of field drain has been 
established. However program and realization
of cleaning of main drain, collection drain and
making of field drain was not clear as to which
block area was cleaned.
 One of water management is using
piezometer. Water level of piezometer is
monitored daily. However action to be taken
was not clear when the water level exceeded
Corrective Action Plan
Label and hazard symbol has been
completed in each hazardous material
and waste containers. Label and
hazard symbol is monitored monthly
using checklist.
Thermometer on screw press #2A and
kernel silo #4 has been changed on
26 January 2012 through work order
#3351991 for kernel silo and
#3351992 for screw press. Monitoring
is conducted regularly.
Calibrate weigh scale to Metrology
Agency Banjarmasin. Calibrate oven
(Memmert) with Mercury Thermometer
Stick
Re-develop and re-train with regards
to filling of daily Log-sheet
Program data of cleaning of drain year
2011 has been completed with block
Program and monitoring of level water
has been made based on weekly
monitoring of Piezometer. Action plan
has been stated in the program.
Completion
Date
 18 Jan 2012



16 Jan 2012
15 Jan 2012
15 Jan 2012
PIC

Environment
Officer
BAME &
SPNE, UH
BAME &
SPNE

Assistant of
M&R,
BAMM, UH
BAMM,
Assistant of
Laboratory
Assistant of
Process,
Head of
Assistant of
BAMM




18 January
2012
31 January
2012


Environment
Officer
BMLE, UH
BMLE
Environment
Officer
BMLE, UH
BMLE
AUDIT REPORT
the standard.
4
5
6
4.6
4.7
4.7
All Estates

 In general, medical checkup has been
performed. However, several key parameters
were not performed during medical checkup
e.g. Rontgen and spyrometry test for
employees exposed to chemical hazards (e.g.
sprayer, chemical mixer and warehouse
operator, fertilizer warehouse operator) and
evaluation of musculoskeletal disorders
(MSDs) to the employees with ergonomic
exposed to ergonomic hazard (e.g. fertilizer
warehouse operator). Noted: a program to
cover these parameters has been established
and the results will be verified during next SAI
Global audit.
Program of medical checkup with 
regards to Rontgen and MSDs for
employees exposed to chemical and
ergonomic hazard year 2012 has been
provided and will be conducted
according to determined schedule by
Doctor of South Kalimantan 1 Region
18 Jan 2012

Doctor of
South
Kalimantan
Region 1,
Safety
Officer All
Estate
BAMM and all estates

 Found several substandard condition e.g.
opened electrical connection, belt not covered,
fuel tank not provided with grounding and
venting system, safety valve of compressor
vessel not working etc (BAMM, SPNE, SPNA,
BMME, BAME). Immediate actions have been
taken to rectify the issue and generally the
finding can be closed. However, during
surveillance audit, the issues will be checked
again to verify the effectiveness of actions
taken.
Grounding and venting system of fuel
tank has been installed. Safety valve
of compressor vessel has been
worked during inspection. Electrical
connection and van belt has been
covered. Monitoring and checklist is
conducted regularly.

18 Jan 2012

Safety
Officer, UH
All Unit Mill
& Estate
All Estates

 Even though the pressurized vessel
(compressor vessel) having the permit for
operation for local authority, however, the
justification for safe operation could not been
fully given based on the following facts.

Inspection of compressor vessel
including measurement of wall
thickness is conducted at the same
time with extension of permit by local
authority.
Work program or inspection checklist

Page 56 of 68

15 April 2012


Safety
Officer, UH
All Unit Mill
& Estate
o
o
7
4.7
AUDIT REPORT
Inspection conducted by local authority
of safety valve is conducted monthly
limited to visual inspection. No wall
by safety officer and head of
thickness measurement has been reported
mechanical.
and compared to the minimum thickness
as designed (all estates).
There was no evidence that safety valve
regularly tested (all estates).
BAMM
 The measurement of chemical factors at
BAMM has been performed however the
location of measurement was outside of the
factory, not at workplace. While for all estates,
the measurement of chemical factors at
workplace has not been performed, e.g.
fertilizer warehouse, chemical warehouse.
 The result of lighting level at BAMM indicating
a non realistic result and has not been
reviewed and compared to the minimum
lighting level.
 The structure of follow up to the results of
medical check up has not been established,
e.g. statistical analysis, health promotion,
preventive action and curative action to the
employees having suspected health problem,
e.g. some audiometric tests of employees of
BAMM were classified not good.



Measurement program of chemical
factors at working area in Mill and
Fertiliser and Chemical Warehouse
has been established. Measurement is
conducted in March 2012 by
independent laboratory.
Confirmation will be conducted to
laboratory during site visit to BAMM in
March 2012. Make purchase request
of lamp for factory lighting to inline
with lighting level in working area.
Recapitulate and recommend resulting
of medical checkup and following up
the result of audiometric test which not
met the standard. Establish program
to follow up result of statistical
analysis of the highest diseases

Update the personal file to include
realization of training conduct



15 March
2012
15 March
2012
20 Feb 2012




Staff LH
BAME,
Environment
Officer & Uh
All Unit Mill
& state
Safety
Officer, UH
BAMM
Doctor of
South
Kalimantan
Region 1,
Safety
Officer &
UH All Unit
Mill & Estate
Progress Noted:
 A programme to monitor and measure the
chemical factors at workplace has been
established by LH Section. Results to be
verified during next SAI Global surveillance
audit.
8
4.8
Mill and all estates
 Even though the evidences of training of

Page 57 of 68
18 Jan 2012

Safety
Officer All
AUDIT REPORT
employees were evidence but the updating of
personal training records still not consistent,
e.g. many training has been performed in
2011 but the personal training records has not
been updated.
Unit Mill &
Estate
9
5.2
All Estates

 HCV management plan has been established
however the plan has not address the issues
(threats) present and not considered sufficient
to conserve the HCV within the concession
area.
Improve the HCV management plan to
conserve the HCV within the
concession area

28 Feb 2012

Environment
Dept. JKTO
Section
HCV, SPO
Officer PSM
3
10
5.3
BAMM

 pH of water from neutralizing pond is checked
daily. Result mentioned that it was inline with
Ministry of Environment Degree #51/10/1995.
Last measurement of quality of water from
neutralizing pond with complete parameter
was performed on 9 April 2007. Measurement
result exceeded Ministry of Environment
Degree #51/10/1995 for parameter BOD and
COD. Complete measurement has not been
performed any longer.
Measure quality of water from
neutralizing pond inline with Ministry of
Environment Degree #51/10/1995

2 April 2012

Assistant
Laboratory,
UH BAMM
11
5.3
SPNE
 Based on official report of pesticides
containers land-filling, pesticides containers
was land-filled once in 2011, on 2 December
2011. Permit of temporary storage of
hazardous waste mentioned that hazardous
wastes are required to be kept within 180
days.
 Record of contaminated rags was not
provided.
 Contaminated water from pit at area of diesel
fuel loading pipe was overflowed due to pit

Establish program to land-fill pesticide
containers in line with permit.
Record of contaminated rags has
been provided and monitored monthly.
Report the record to Agency of
Environment of Kota Baru quarterly.
Improve the design of diesel fuel
loading area by adding the roof.
Improve the design of drainage and pit
control in emergency shower area with
cover.

18 January
2012
2 March 2012
15 March
2012
31 January
2012

Environment
Officer
SPNE, UH
SPNE
Environment
Officer
SPNE, UH
SPNE
UH SPNE
Environment
Officer
SPNE, UH



Page 58 of 68







AUDIT REPORT
was filled with rain water.
Contaminated water from emergency shower
or eyes wash was connected directly to open
drainage.
SPNE
11
6.6
BAMM

 Record of the results of the meeting SPM
cannot be shown, but this meeting is held
periodically every month.
Record of meeting between
organization and SPM has been
provided

18 January
2012

UH BAMM
12
6.10
BAMM

 The contractual agreement between mill and
local business (smallholder) was expired in
December 2011; the new contract was only
“Statement Letter” that was not clearly
described the payment term.
Develop new “Letter of Agreement”
between mill and local contractor
including payment term, time frame
and validation.

15 March
2012

KTU BAMM,
UH BAMM
Mill Supply Chain Certification System
No
SCCS
Requirements
Details
Corrective Action
PIC
Completion
Date
NONE
Opportunities for improvement – RSPO
1. Criterion 2.1
 Workers at the KUD (Village Unit Cooperatives) Gadjah Mada has committed to comply with all the requirements of the PKB (Joint Work
Agreement), but it is needs to be considered, to be approved by the Department of Labor.
2. Criterion 4.1
 Consider to identify and calibrate the measurement devices used in mill; thermometer on screw press, pressure gauge on vacuum drier and
thermometer on kernel silo.
3. Criterion 4.3
Page 59 of 68
AUDIT REPORT
Realization of road maintenance has been recorded. It could be considered to improve the record by mentioning block area where road
maintained not only mentioning complex area.
4. Criterion 4.4.
 Quality of surface water has been measured upstream and downstream. Quality of downstream surface water exceeded Regulation of
South Kalimantan Governor #5/2007 class II for parameter BOD, COD and pH. Downstream surface water measured was mixed with other
sources not only from mill. It could be considered to measure quality of river water after mill outlet without mixing with other sources.
5. Criterion 4.7
 Consider to review and improve the design of harvesting bridge. It was observed that at several locations, the width of bridge was 20 cmeven though the height of bridge from the land was below 2 m (best practice considered as working at height).
 Consider to improve the knowledge and skill for performing accident investigation and determining the immediate cause and basic cause.
6. Criterion 5.2 All Estates
 Even though the HCV report has been commented on by a reviewer, it could be considered to carry out formal Peer Review.
 It could be considered to improve knowledge and skills of HCV Officer, e.g. give particular background for HCV management.
7. Criterion 5.2 BMLE
 A waste final disposal was newly constructed within the 50m buffer zone of a nature reserve but not operation yet. It could be considered to
relocate the waste final disposal further away from nature reserve.
8. Criterion 6.1 Mill and Estates
 Considered to perform peer review to SIA document to ensure that all impacts are identified.
9. Criterion 6.1 BAMM
 Social Impact Assessment Report is available, considered to create a map with the position of the mill, estates and stakeholders
10. Criterion 6.2 BAMM
 List of stakeholders are available, considered to create a verification method of stakeholders list. It is needed to ensure that the lists of stake
holders are the community directly affected by mill and estates.
11. Criterion 6.5 BAME, SPNA
 Considers to mention local contractor into List of Stakeholder and his Socialization RSPO.
 Number of employee status conversion has been reported annually ( in summary ) to present transparency that company do have good will
to improve social degree of BHL workers to permanent worker . Consistency of such produced report will be checked again in the next
audit. Criteria & requirements for BHL conversion to SKU status might be also formalised in a documented reference.
12. Criterion 6.11 BAME
 The contractual agreement between mill and local business (smallholder) was expired in December 2011; the new contract was only
“Statement Letter” that was not clearly described the payment term.

Opportunities for improvement – Mill Supply Chain Requirements
 System of recording of stock and delivery has been clearly separated between certified CPO (and kernel) and non-certified CPO (and kernel) in
manual system; however in SAP it has not been clearly separated.
Page 60 of 68
AUDIT REPORT
Page 61 of 68
Appendix “C” – Stakeholder’s issues and comment
Date
Time
Location
Interviewee












: 10 & 14 January 2012
: 15.00 – 17.00 AM
: BAMM and BAME
: Grader Mechanics, Chairman of Union, Loading Ramp Operator,
Boiler Operator
Status of workers was determined in the employment contract, and mentioned wage and
working hours.
Calculation of wage and over time was understood.
Status harvester is a SKU daily, and the amount of wages received are in accordance with
government regulations
working hours.
Calculation of wage and overtime was understood.
Above personnel were worked in the organization more than 2 years.
Started work at 6.30 am to 02.00 pm.
Wage was paid according employment contract and paid on time.
Accept the rice for his family every month
Organization provided training for OSH, and communicated for sexual harassment policy.
Above personnel said there are no complaints to organisation, in case any complaint it will
be informed to „mandor‟ (foreman).
Representative housing, and clean water and electricity provided by the organization
Date
Time
Location
Interviewee










All gentlemen were lived around the estate is more than 10 years.
Community around estate (75%) have their own oil palm plantation
Request for rental of heavy equipment for road repairs very quickly followed by estate.
Estate is very concerning about the environment around estate.
Wage employees are paid in accordance with applicable regulations.
Between estate with community estate established a good relationship.
Improvement of school building even without being asked by the community.
There is no conflict with farmers and plantation land.
For religious activities, social and general repairs facilities, estate parties must be involved.
Religious activities such as mass circumcisions are conducted periodically
Date
Time
Location
Interview



: 10 January 2012
: 17 – 18.30
: Desa Serongga
: Chairman MUI, Youth Leader
: 11 January 2012
: 16.00 – 17.00
: BMLE
: Chairman of Union, Woman worker
working hours.
Calculation of wage and overtime was understood.
Above personnel were worked in the organization more than 2 years.
Page 62 of 68








Organization provided training for OSH, and communicated for sexual harassment policy.
Above personnel said there are no complaints to organization, in case any complaint it will
Representative housing, and clean water and electricity provided by the organization.
Gender committee meeting was conducted periodically and attended from the
representative gender committee from estate.
There is no issue related sexual harassment for all workers.
Date and Time
Location
Interviewee










: 11 January 2012
: Desa Langadai
: Community Leader, Youth Leader
All gentlemen have been living around the estate for more than 10 years. They did not
work in the estate/mill.
Community estate (75%) have their own oil palm plantation
Estate is very concerning about the environment around estate,
Religious activities such as mass circumcisions are conducted periodically.
Date
: 12January 2012
Time
: 16.00 – 17.00
Location
: SPNE
Interviewee
: 2 Workers
 Status of workers was determined in the employment contract, and mentioned wage and
working hours.
 Calculation of wage and over time was understood.
 Status harvester is a SKU daily, and the amounts of wages received are in accordance with
government regulations.
 Started work at 6.30 am to 02.00 pm.
 Wage was paid according employment contract and paid on time.
 Accept the rice for his family every month
 Organization provided training for OSH, and communicated for sexual harassment policy
and reproductive rights.
 Above personnel said there are no complaints to organization, in case any complaint it will
 Representative housing, and clean water and electricity provided by the organization.
Date and Time
Location
Interviewee
: 12 January 2012
: Desa Pantai
: Community leader
Page 63 of 68










All gentlemen were lived around the estate is more than 10 years.
Community estate (75%) have their own oil palm plantation
Estate is very concerning about the environment around estate,
Religious activities such as mass circumcisions are conducted periodically.
Date
Time
Location
Interviewee











: 13 January 2012
: 16.00 – 17.00
: SPNA
: Worker, Gender Committee
working hours.
Calculation of wage and over time was understood.
Status harvester is a SKU daily, and the amounts of wages received are in accordance with
government regulations.
Organization provided training for OSH, and communicated for sexual harassment policy
and productivity rights.
Above personnel said there are no complaints to organization, in case any complaint it will
Representative housing, and clean water and electricity provided by the organization.
Gender committee meeting was conducted periodically and attended from the
representative gender committee from estate.
There is no issue related sexual harassment for all workers
Page 64 of 68
Comment from Department of Labour and Transmigration of Kota Baru District
Comment from Department of Labour and Transmigration of Kota Baru District was submitted to
SAI by mail #566/069/Disosnakertrans on 12 January 2012.
This letter was received by SAIG Office on 17 January 2012, after closing meeting in Batu Ampar
and Mill Estate. So this is not asked at the time of public consultation. SAIG requested SMART to
follow up charges from Department of Labor and Transmigration of Kota Baru District.
Stakeholders accept this letter is the regent of Kota Baru, Head of Department of Labor and
Transmigration Banjarmasin and Estate Manager Sinar Mas.
The response of the SMART-related charges from the Office of Manpower and Transmigration of
the Kota Baru has been answered by the party represented by the RC SMART Kalsel I.
No.
01
02
03
04
Feedback and or request
Labor with over 3 (three) months, or
more than 1 (one) year, his status is
still a BHL which shall be appointed
as Permanent Employee. It is
contrary to Article 58 paragraph (1).
Article 59 paragraph (1), (3) and (4)
of Law #13 year 2003 on Manpower
Jo, Article 10 paragraph (2), (3),
Decree of Minister of Labor Affairs
#100/MEN/VI/2004 about
Implementation Labor Agreement
Provisions for specific time periods
The labor work in the period of work
for 3 months even 1 (one) year are
not registered in the program of
Labor Social Security, Old Age
Security, Employment Accident
Insurance, Death Insurance, Health
Insurance. This is contrary to Article
4 paragraph (1) of Law #3 year 1992
on Workers' Social Security Jo.
Article (2) Paragraph (2) Government
Regulation #14 year 1993
concerning Manpower Social
Security Program.
Workforce with the period of work for
3 months even 1 (one) year is not
given Religious Holiday Allowance
(THR) and is given only the
magnitude Lebaran package, it does
not comply with the Minister of
Manpower Regulation #4 year 1994
on the feast of religion for company
workers.
Workforce with the period of work for
3 months and more than 1 (one) year
do not get the safety equipments in
accordance with article 14 paragraph
(c) of Act #1 of 1970 on occupational
safety
Organisation response
and action to be taken
The charge of the Office of
Labor Law #13 of 2003 is
not appropriate because the
regulations for PKWT and
not BHL
The main provisions BHL
the execution time is less
than 21 (twenty one) days
within 1 (one) month as in
article 10 paragraph (2)
Decree #100 year 2004.
While in its implementation
at PT. SMART Tbk, the
working time of only 16 days
in a month so there is no
need to raise provisions for
PKWT and BHL be done
even if the contract for 3
months.
The organization stated that
t the Decree of the Ministry
of Manpower #150 year
1999, section 9, references
in paragraph 2 and 3 was
actually fulfilled.
The company has already
registered all workers to
Social Security of Labour,
and including for labor by
daily status basis (BHL).
As of November 2011, the
company continues to pay
the liability for Social
Security to BHL ½ package
(work accident insurance
and life insurance)
The organization
already provided THR
(Holiday Allowance) to
all employees and this
is in compliance with
the Regulation of Secretary
SAI Global audit
observation
Relevant documentation

SAI Global issued
Opportunity for
Improvement (OFI); detail
of OFI was mentioned in
the report in criterion 6.5.


SAI Global in this case
made findings that are
OFI; its detail can be
seen in the audit report in
criterion 6.5
SAI Global in this case
made findings that are
OFI; its detail can be
seen in the audit report in
criterion 6.5


Law #13/2003 article
58 and 58
Decision of the Minister
1000 - Chapter V Daily
or Work Release
Agreement
Ministerial Decree 100
of 2004, Chapter V of
the Employment
Agreement or Release
Daily Article 9 dan10
Law No. 3 1992,
Chapter II Organisation
of Labor Social
Security Article 4.
Regulation of Ministry
of Labour #4 year 1994
of Labor #4 year 1994.
All employees, BHL, or SKU
PKWT had been given PPE
for free of charge according
to the type of work.
From the results of
interviews and an audit
conducted by SAI Global
with employees, it is
evident that the PPE is
given free of charge to
employees.
Law #1 year 1970
Page 65 of 68
Page 66 of 68
Comment from Non Government Organisation: Greenomics
Comment from Greenomics was submitted to SAI by mail on 16 January 2012.
Feedback and or request
Based on Integrated Research Report in Proposed Changes in Forest Area, February 2009 as
mandate of Act #41/1999
 5 blocks of oil palm plantation of PT. Tapian Nadenggan was operated in conservation
area.
 2 bloks of oil palm plantation of PT. Tapian Nadenggan were operated in production forest.
 PT. SMART Tbk. and PT. Tapian Nadenggan were operated in production forest.
Organisation response and action to be taken
 PT. SMART Tbk. has obtained HGU since 2003 and PT. Tapian Nadenggan has obtained
HGU since 1999.
 PT. SMART Tbk. and PT. Tapian Nadenggan has been operated inline with permit owned
and the result inline with procedure and applied regulation issued by central and local
government.
 PT. SMART Tbk. and PT. Tapian Nadenggan has not been received the direction from
local government and Ministry of Forestry with regards to Integrated Research Report
 According to Decree of Ministry of Forestry #435/Kpts-II/2009, forest boundary refer to Act
#41/1999 article 15 has not been performed.
SAI Global audit observation
 HGU of PT. SMART Tbk. and PT. Tapian Nadenggan have been reviewed.
 Forest land release permit (Izin pelepasan kawasan hutan) of PT. Tapian Nadenggan was
provided.
 There was no legal case against the organisation in regards to these issues
Relevant documentation
PT. Tapian Nadenggan
 Forest land release permit (Izin pelepasan kawasan hutan) No. 151/Kpts-11/1993, +/4,789 Ha, dated 18 April 1993 and No. 115/Kpts-11/1996, +/- 3,080Ha, dated 27 March
1996. A total is +/- 7,799 Ha.
 HGU #23 dated 28 July 2000, 4719 Ha, permit was given to PT. Inti Gerak Maju. PT. Inti
Gerak Maju was taken over by PT. Tapian Nadenggan in 2007, based on Notarise Letter,
Suhartini SH, dated 20 April 2007 and HGU #24, dated 28 July 2000, 2,929.037 Ha
PT. SMART Tbk.
 HGU #22 dated 1 October 2003, +/- 3,448 Ha.
 HGU #23 dated 20 January 2005, +/- 1,443.55 Ha. PT. SMART Tbk. is also in progress to
add the land use title for around 636,33 Ha. The progress of this additional HGU process
was sighted “Application of HGU #006/PL/DL-SMART/11/2011, dated 2 November 2011.
Page 67 of 68
Appendix “D” – Definition of, and action required with respect to audit findings:
Major Nonconformities occur when system is failing to meet a relevant compulsory indicator.
Action required: This category of findings requires SAI Global to issue a formal NCR; to receive
and approve client‟s proposed correction and corrective action plans; and formally verify the
effective implementation of planned corrections and corrective action. Correction and corrective
action plan must be submitted to SAI Global for approval within 14 days of the audit. Follow-up
action by SAI Global must „close out‟ the NCR or reduce it to a lesser category within 90 days or
less where specified. Certificate of conformance to the RSPO Criteria cannot be issued while any
major nonconformity is outstanding. Major nonconformities raised during surveillance audit shall be
addressed within 60 days, or the certificate will be suspended. Major nonconformities not
addressed within a further 60 days will result in the certificate being withdrawn.
Minor Nonconformities occur when system is failing to meet other indicators.
Action required: This category of findings requires SAI Global to issue a formal NCR; to receive
and approve client‟s proposed correction and corrective action plans; and formally verify the
effective implementation of planned corrections and corrective action. In this instance, a certificate
may still be awarded providing the root cause of the problem is identified and an acceptable plan is
put in place to achieve the outstanding requirements in an agreed time frame. Verification will be
made at subsequent surveillance audits. Minor nonconformities will be raised to major if they are
not addressed by the following surveillance audit.
Opportunity for Improvement is a documented statement, which may identify areas for
improvement, but shall not make specific recommendation(s). Client may develop and implement
solutions in order to add value to operations and management systems. SAI Global is not required
to follow-up on this category of audit finding.
Page 68 of 68

Audit Report

Transcription

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