Audit Report

Transcription

Audit Report

QEF08 - RSPO.01
Public Summary Report
App./Cert.
Date
RSPO20003
25/06/2010
Rev. 01
22/08/2011
CERTIFICATION AUDIT
Client:
Site Address:
Standard(s):
PT. SMART Tbk. Padang Halaban Mill and Its Supply
Bases
Padang Halaban Mill:
Desa Padang Halaban Kec. Merbau Kab. Labuhan Batu
Utara SUMATERA UTARA IDN
Its Supply Bases:
Kec. Aek Kuo Kab. Labuhan Batu Utara SUMATERA
UTARA IDN
Kec. Merbau Kab. Labuhan Batu Utara SUMATERA
UTARA IDN
Kec. Kualuh Hulu Kab. Labuhan Batu Utara
SUMATERA UTARA IDN
National Interpretation of RSPO Principles and Criteria for Sustainable Palm
Oil Production, Republic of Indonesia, May 2008
Scope of Certification:
COMMERCIAL- IN – CONFIDENCE
The contents of this report must not be disclosed to a third party without the agreement of the SAI Global Client
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: 303335
QEF08 - RSPO.01 / Issue Date: 2009-Mar-03
SAI Global Indonesia
Page 1 of 61
QEF08 - RSPO.01
Padang Halaban Mill PT. SMART Tbk
Location: Kec. Aek Kuo Kab. Labuan Batu, Sumatera Utara, Indonesia
GPS Location: 99º 50' 22'' E 2º 19' 09'' N
Capacity (annual MT CPO): CPO/year : 83,759.46 ton PK/year: 19,378.04 ton
Padang Halaban Estate PT. SMART Tbk
Annual FFB Production: 176.233,78 ton
Total Area : 7,464.92 Ha
Planted Area : 7,213.22 Ha
Pernantian Estate PT. SMART Tbk
Location: Kec. Merbau Kab. Labuan Batu, Sumatera Utara, Indonesia
Adi Pati Estate PT. SMART Tbk
Total Area : 2,490 Ha
Kanopan Ulu Estate PT. MP Leidong West Indonesia (SMART’s subsiadiary company)
Location: Kec. Kualuh Hulu Kab. Labuan Batu, Sumatera Utara, Indonesia
COMMERCIAL- IN – CONFIDENCE
The contents of this report must not be disclosed to a third party without the agreement of the SAI Global Client
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: 303335
Page 2 of 61
Table of contents
Executive Overview
Abbreviations Used
Page
5
5
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
SCOPE OF THE CERTIFICATION ASSESSMENT
Introduction
Audit Objective
Scope of Certification
Location of Mill and Estates
Description of Supply Base
Date of Plantings and Cycles
Other Certification Held
Organisational Information/Contact Person
Time Bound Plan for Other Management Units
Area of Plantation
Approximate Tonnages Offered for Certification (CPO and PK)
Date of Issue of Certificate and Scope of Certification
6
6
7
7
8
11
11
12
13
13
14
15
15
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
15
15
16
16
17
18
3.0
3.1
3.2
AUDIT FINDINGS
Summary of findings
Recommendation
18
18
47
List of Tables
1
Mill and Estates GPS Locations
2
Organisation FFB Production
3
Age Profiles of Planted Palms
4
Other Certification Held by Mill and Estates
5
RSPO Certification Time Bound Plan of PT. SMART Tbk
6
Estates and Area Planted
7
Hectare Statement
Page
8
11
11
12
13
14
14
List of Figures
1
Map of Mill and Estates Location
2
Boundaries Pegs with Estate name in PHLE
3
Land Applications in PHLE
4
Level meter in KULE PT. MP Leidong West Indonesia
5
Piezometer in ADPE
6
Watershed Protection
7
Barn owls and boxes in ADPE
8
Nepenthes in ADPE
9
Warning sign to control any illegal or inappropriate hunting and fishing
in KULE PT. MP Leidong West Indonesia
10
POME pond completed with water level to monitor height of POME
Page
9
21
25
26
27
27
29
36
37
41
Page 3 of 61
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
48
52
59
61
Page 4 of 61
Executive Overview
SAI Global has audited PT. SMART Tbk. operations comprising one mill, four oil palm estates,
support services and infrastructure. PT. SMART Tbk. operation complies with the requirements of
the National Interpretation of RSPO Principles and Criteria for Sustainable Palm Oil Production,
Republic of Indonesia, May 2008. The recommendation from this audit is that PT. SMART Tbk. be
approved as a producer of RSPO Certified Sustainable Palm Oil and Palm Kernel.
Abbreviations Used
ADPE
AMDAL
BHL
BKM
BLH
BOD
BPN
COD
CPO
CSR
D&L
DPPL
EFB
FFB
HCV
HGU
HPH
HR
IPM
ISO
KULE
LD
MCAR
MSDS
NGO
OHS
PC
PHLE
PHLM
PK
PKB
POME
PPE
PRNE
PSM
RABQSA
RC
RSPO
SA
SEL
SKU
SMARTRI
Adipati Estate
Analisis Mengenai Dampak Lingkungan (Environmental and Social Impact
Assessment)
Buruh Harian Lepas (Daily worker)
Buku Kegiatan Mandor (Log book of group leader activity)
Badan Lingkungan Hidup (Environmental Agency)
Biological Oxygen Demand
Badan Pertanahan Nasional (National Land Agency)
Chemical Oxygen Demand
Crude Palm Oil
Corporate Social Responsibility
Document and Legal
Dokumen Pengelolaan dan Pemantauan Lingkungan (Document of Environmental
Management and Monitoring)
Empty Fruit Bunch
Fresh Fruit Bunch
High Conservation Value
Hak Guna Usaha (Land Use Title)
Hak Penguasaan Hutan
Human Resources
Integrated Pest Management
International Standards Organisation
Kanopan Ulu Estate
Lethal Dose
Management Committee Agronomy and Research
Material Safety Data Sheet
Non Government Organisation
Occupational Health and Safety
Production Controller
Padang Halaban Estate
Padang Halaban Mill
Palm Kernel
Perjanjian Kerja Bersama (Agreement of working)
Palm Oil Mill Effluent
Personal Protective Equipment
Pernantian Estate
Perkebunan Sinar Mas (Sinar Mas Estate)
Quality Society of Australia
Regional Controller
Roundtable for Sustainable Palm Oil
Social Accountability
Studi Evaluasi Lingkungan (Environmental Evaluation Study)
Syarat Kerja Umum (Permanent worker)
SMART Research Institute
Page 5 of 61
SMD
SMK3
SOP
TPH
VPA
VPM
Senior Managing Director
Sistem Manajemen Kesehatan dan Keselamatan Kerja (Occupational Health and
Safety Management System)
Standard Operation Procedure
Ton Per Hectare
Vice President of Agronomy
Vice President of Manufacturing
1.0
SCOPE OF THE CERTIFICATION ASSESSMENT
1.1
Introduction
SAI Global conducted an audit of PT. SMART Tbk. Padang Halaban Mill and Its Supply Bases on
21/06/2010 to 25/06/2010.
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 the
organisation.
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 audits 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.
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.
Page 6 of 61
1.2
Audit Objective
Certification Audit
To determine the implementation of your organisation’s RSPO system; the capability and
effectiveness of the RSPO system in ensuring continual compliance with RSPO principles and
criteria and in meeting its specified objectives (indicators); and the conformity of the RSPO system
to stated principles, criteria and indicators.
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) companies owned by PT. SMART Tbk. and one (1) Oil Palm Estate owned by
subsidiary.
Padang Halaban Mill PT. SMART Tbk
Capacity (annual MT CPO): CPO/year: 83,759.46 ton and PK/year: 19,378.04 ton
Padang Halaban Estate PT. SMART Tbk
Annual FFB Production : 176,233.78 ton
Total Area
:
7,464.92 Ha
Planted Area
:
7,213.22 Ha
Pernantian Estate PT. SMART Tbk
Annual FFB Production : 54,354.22 ton
Total Area
:
2,344.92 Ha
Planted Area
:
2,226.22 Ha
Adi Pati Estate PT. SMART Tbk
Annual FFB Production : 41.732,36 ton
Total Area
:
2,490 Ha
Planted Area
:
2,403.22 Ha
Kanopan Ulu Estate PT. MP Leidong West Indonesia (PT. SMART Subsidiary)
Location: Kec. Kuala Hulu Kab. Labuan Batu, Sumatera Utara, Indonesia
Annual FFB Production : 81.653,14 ton
Total Area
:
3,319.56 Ha
Planted Area
:
3,112.13 Ha
Page 7 of 61
1.4
Location of Mill and Estates
PT. SMART Tbk. mill and estates are located in North Sumatera Province. The geographical
coordinate of the mill and estates are shown on Table 1.
Table 1: Mill and Estates GPS Locations
MILL AND ESTATE
EASTING
NORTHING
Padang Halaban Mill
99o 50’ 22” E
2o 19’ 09” N
99o 50’ 20” E
2o 18’ 46” N
Pernantian Estate
99o 46’ 51” E
2o 14’ 11” N
Adipati Estate
Kanopan Ulu Estate PT. MP
Leidong West Indonesia
99o 57’ 23” E
2o 17’ 59” N
99o 36’ 58” E
2o 34’ 00” N
Page 8 of 61
Figure 1 Map of Mill and Estates Location
Page 9 of 61
Page 10 of 61
1.5
Description of Supply Base
The FFB is sourced from three (3) companies owned by PT. SMART Tbk. and one (1) Oil Palm
Estate owned by subsidiary. The areas and FFB production of the plantations are shown on Table
2.
Table 2: FFB Production from each supply base
ESTATE
PLANTED AREA (HA)
FFB (TON/YEAR)
Padang Halaban
7,213.22
176,233.78
Pernantian
2,226.22
54,354.22
Adipati
2,403.22
41,732.36
Kanopan Ulu PT. MP Leidong
West Indonesia
3,112.13
81,653.14
Source: QEF15RSPO.02 – 21 April 2010
1.6
Date of Plantings and Cycles
Table 3: Age Profiles of Planted Palms
YEAR
1971 *)
1978 **)
1981
1982
1983
1984
1985
1986
1987
1988
Total Old Mature >18
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
ADPE
KULE
PT. MP
Leidong
West
Indonesia
PHLE
PRNE
61.34 1)
186.57
213.87 1)
343.73 1)
191.80 1)
496.83 1)
531.37 1)
1,777.60
338.41 1)
593.68 1)
376.76 1)
495.05 3)
2)
201.57
295.46 2)
1)
178.62 1)
609.02 1)
205.69 3)
371.99 3)
161.94 3)
362.28 3)
963.42 3)
236.28 3)
3,150.58
295.58 3)
276.38 3)
695.96 3)
237.47 3)
482.01 3)
624.78 3)
273.96 3)
183.96 3)
362.03 3)
384.03 3)
104.77 3)
% OF
PLANTED
AREA
SUM
186.57
61.34
186.57
178.62
822.89
549.42
371.99
353.74
859.11
1,494.79
236.28
5,114.75
295.58
276.38
695.96
575.88
1,349.65
808.74
376.76
857.08
690.37
295.46
0.41
1.25
1.19
5.50
3.67
2.49
2.37
5.74
10.00
1.58
34.20
1.98
1.85
4.65
3.85
9.02
5.41
2.52
5.73
4.62
1.98
Page 11 of 61
YEAR
ADPE
2002
2003
Total Prime Mature (718)
2004
2005
2006
Total Young Mature (36)
TBM IDEV
Total Immature
Total Planted Area
Note:
*)
**)
1)
2)
3)
1.7
1,803.90
KULE
PT. MP
Leidong
PHLE
West
Indonesia
391.70 2)
356.60 2)
341.22 3)
1,245.33
3,699.46
89.20 2)
599.31 3)
599.31
2,403.21
89.20
163.18 3)
163.18
200.00 3)
200.00
7,213.22
3,112.13
PRNE
% OF
PLANTED
AREA
SUM
284.12 3)
846.81
391.70
981.94
7,595.50
2.62
6.57
50.79
508.38 3)
422.95 3)
261.51 3)
1,192.84
760.76
422.95
860.82
2,044.53
5.09
2.83
5.76
13.67
2,226.22
200.00
200.00
14,954.78
1.34
1.34
100
Replanting is planned in 2011. In 2009 production of plant still high 20.2 ton although the plant has
not been fertilised since three years ago
The plant was replanted in 2010. In 2009 production of plant still high 21.3 ton although the plant has
not been fertilised since three years ago
Take over from previous company
New planting
Replanting
Other Certification Held
The organisation is implementing quality, environmental, and occupational health and safety
management system based on ISO 9001:2008, ISO 14001:2004, and SMK3 (health and safety
management system based on Indonesia’s Regulation ‘PER. 05/MEN/1996’). The details of other
certifications held are shown in the following table.
Table 4: Other Certification Held by Mill and Estates
ESTATE/MILL
OTHER CERTIFICATION HELD
Padang Halaban Mill
SMK3 since 2000, ISO 9001:2008 since 2002
ISO 14001:2004 since 2003
Pernatian Estate
ISO 14001:2004 since 2003
Adipati Estate
Nil
Kanopan Ulu Estate PT. MP Leidong West
Indonesia
Nil
Source: QEF15RSPO.02 – 21 April 2010
Page 12 of 61
1.8
Organisational 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: [email protected]
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
2012. The plan is detailed on Table 5. The time bound plan is realistic and challenging. It was
evident that the organisation is committed to meet the target that had been set in the time bound
plan.
Table 5: RSPO Certification Time Bound Plan of PT. SMART Tbk., approved in June 2010
NO
NAME OF MILL
SUPPLY BASE
COMPANY
LOCATION
YEAR
1
Padang Halaban Mill
PT SMART Tbk
North Sumatera
2010
2
Langga Payung Mill
PT Tapian Nagenggan
North Sumatera
2010
3
Batu Ampar Mill
PT SMART Tbk
South Kalimantan
2010
4
Tanah Laut Mill
PT SMART Tbk
South Kalimantan
2010
5
Hanau Mill
PT Tapian Nadenggan
Central
Kalimantan
2010
6
Leidong West Mill
PT Leidong West
Indonesia
Bangka
2011
7
Bukit Kapur Mill
PT SMART Tbk
South Kalimantan
2011
8
Gunung Kombeng Mill/
Muara Wahau Mill
Pernantian Estate
Adipati Estate
Kanopan Ulu Estate PT. MP
Leidong West Indonesia
Langga Payung Estate
Paya Baung Estate
Normak Estate
Batu Ampar Estate
Batu Mulia Estate
Sungai Panci Estate
Sungai Panci Plasma
Tanah Laut Estate
Kintapura Estate
Hanau Estate
Tasik Mas Estate
Tanjung Paring Estate
Medang Sari Estate
Lestari Unggul Jaya Estate
Leidong West Utara Estate
Leidong West Selatan Estate
Bukit Intan Estate
Bukit Mas Estate
Sungai Cantung Estate
Bukit Kapur Estate
Sawita Estate
Sawita Plasma
Pamukan Estate
Gunung Kombeng Estate
Gunung Kombeng Plasma
Muara Wahau Estate
Rantau Panjang Estate
Rantau Panjang Plasma
PT Kresna Duta
Agroindo
East Kalimantan
2011
Page 13 of 61
9
Jak Luay Mill
10
Jelatang Mill
11
Langling Mill
12
Pelakar Mill
13
Sungai Bengkal Mill
14
Semilar Mill
Pantun Mas Estate
Pantun Mas Plasma
Jak Luay Estate
Jak Luay Plasma
Long Buluh Estate
Bukit Subur Estate
Bukit Subur Plasma
Batang Merangin Estate
Kubang Ujo Plasma
Pamenang Plasma
Bangko Inti Estate
Bangko Plasma
Pelakar Estate
Tiga Serumpun Estate
Bukit Bungkul KKPA
Sungai Bengkal Estate
Batang Gading Estate
Sungai Bengkal KKPA
Semilar Estate
Sei Rindu Estate
PT Tapian Nadenggan
East Kalimantan
2012
PT Kresna Duta
Agroindo
Jambi
2012
PT Kresna Duta
Agroindo
PT Kresna Duta
Agroindo
Jambi
2012
Jambi
2012
PT Satya Kisma
Usaha
Jambi
2012
PT Tapian Nadenggan
Central
Kalimantan
2012
Source: Data from PT. SMART Tbk. in June 2010
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)
Padang Halaban
7,013.22
200
Pernantian
2,226.22
0
Adipati
2,403.21
0
Kanopan Ulu PT. MP Leidong
West Indonesia
3,112.13
0
14,754.78
200
Total
Source: Data from PT. SMART Tbk. in 2009
Table 7: Hectare Statement
AREA
HECTARES
Mature area
14,754.78
Immature area
200.00
Total area planted
14,954.78
Nursery
36.34
Emplacement, Mill, Road, etc.
548.50
River, Ditch, and Swamp
94.70
Page 14 of 61
Other area
10.32
Total leased area
15,644.64
Source: Data from PT. SMART Tbk. in 2009
1.11
Approximate Tonnages Offered for Certification (CPO and PK)
The approximate tonnages certified are: CPO/year: 83.759,46 ton and PK/year: 19.378,04 ton
1.12
Date of Issue of Certificate and Scope of Certification
The scope of certification is the CPO production from one (1) palm oil mill and three (3) companies
owned by PT. SMART Tbk. and one (1) Oil Palm Estate owned by subsidiary.
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
: [email protected]
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.
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
Page 15 of 61
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 28 to 29 April 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. Before that, SAI Global sent ‘Self Evaluation Checklist’ to be completed to ensure that
the organisation comply with the requirements of RSPO Principles and Criteria. Reference to
documents and records were filled in the ‘Self Evaluation Checklist’ and it was used by the auditor
as guidance during pre-audit and certification audit.
The Certification Audit was performed on 21 to 25 June 2010. 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.
2.3
Qualification of the Lead Auditor and Audit Team Members
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. For the last 7 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).
Inge Triwulandari – Audit Team Member
Inge Triwulandari graduated with Bachelor of Chemical Engineering degree from Bandung Institute
of Technology in 1996. She has completed ISO 9001 (2000), ISO 14001 (1997) lead auditor
training courses and RSPO auditor (2008). For the last 11 years she has been involved in quality
(ISO 9001) and environmental (ISO 14001) management system audits including in the palm oil
sector since 2006 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 13 years he has been involved in quality (ISO 9001) and
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
Page 16 of 61
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 and registered in
RABQSA. He has an experience for more than 10 years in auditing. He has an experience in audit
with company with labour intensive type (e.g. textile, garments, shoes, etc). He has also registered
as SA 8000 certified auditor. 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.
Andri Novi – Technical Specialist for Social Issue
He graduated with Bachelor Degree of Linguistics, Literature and Cultural Studies from
Padjadjaran University Bandung. He is an accredited RSPO HCV Assessor. He has working
experience in Participatory Action Research and Community Development since 1990. He was
involved in assessing several HCV Assessment and Social Impact Assessment as well as in
several facilitation trainings as a trainer and facilitator for several Participatory Projects in
Indonesia.
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.
Letters were sent to individual stakeholders and telephone calls were performed to arrange
meeting. Meetings and interviews with stakeholders as part of the audit were held. External
stakeholders included governments, NGO and civil societies who have an interest in the
organisation area and resident communities.
List of stakeholders contacted
Workers and Staffs
 Sinus, Lewi, Iwan – Sprayer
 Iwan S – SKU Harian
 Agung (Estate Manager), Wawan Susanto, Lukman (HR Operation)
 Rianto Alfadilllah, Hartati (RSPO Officer from PT. SMART Tbk.)
 Jon S (Union Labour)
Local community
 Hutabarat – Community Leader Desa Sialang Taji, Nasim – Religion Leader Desa SikopiQEF08 - RSPO.01 / Issue Date: 2009-Mar-03
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

kopi, Budi – Youth Leader Aek Kanopan
H. Redoyaman – Religion Leader, Daud – Community Leader, Rollip Hasibuan –
Community Leader
M. Erwin Wijaya – Youth Leader, Samsul Tanjung – Religion Leader
Government:
 Sukisman – Camat (Subdistrict Head) Aek Kuo
Non Government Organisation:
 Amin Siahaan – Local NGO
2.5
Date of Next Surveillance Visit
The next surveillance visit will be one year from approval of this report by the RSPO.
3.0
AUDIT FINDINGS
3.1
Summary of findings
As mentioned in above, objective evidences were obtained during the certification assessment for
the entire RSPO indicator for 1 Mill and 4 Estates. The evidences for each major and minor
indicator from each of these operational areas were aggregated to provide overall findings.
Statements were provided for each of the Indicators to support the finding of the assessment team.
During audit, 24 minor nonconformities against minor compliance indicators and 11 opportunities
for improvement were issued. Detail of minor nonconformities and opportunities for improvement
was provided in the body of report.
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 effective participation in decision making.
Communication procedure was established and implemented by PT SMART Tbk. Communication
procedure described follow up of information request from interested parties. All information
requests from stakeholder were listed and recorded by the mill and estates. Most of the requests
are relating to donation requests from village head and village institution. It was used for social
activities of the communities. Follow up of request and information was recorded and maintained.
Retention time for communication records was determined. Procedure for keeping records was
described in ’SOP Pengendalian dan Masa Simpan Dokumen’ which made by each estate and
mill.
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.
List of management documents which are publicly available has been made by the mill and all
estates. The list included types of management documents and its relevant stakeholders: HGU
(Land Use Title), AMDAL (Environmental and Social Impact Assessment), Occupational Health
and Safety Management Plan and CSR Program.
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All the estates and mill have established SOP for communication and consultation with
stakeholder. All received correspondence from stakeholder was recorded in the incoming letter log.
Some of correspondences were sighted:
 PHLE: Request of copies of HGUs from Labuhan Batu Police in March 2009 and its
response.
 KULE PT. MP Leidong West Indonesia: Request of labor information and copies of health
and safety permit from Disnakertrans (letter #560/116/STKT/2010) and its response (letter
from Estate Manager #29/EM-KULE-RSPO/V/2010).
 PHLM: Request of DPPL document from BLH Labuhan Batu Utara in April 2010 and its
response.
No request of documents/information sighted at incoming letter log for ADPE and PRNE since
2009.
Procedures for document and record maintenance have been established by regional mill and all
estates office. The procedure requires that all records necessary for RSPO implementation to be
kept at least 5 years at RSPO secretary office at mill and each estate.
Opportunity for Improvement for ADPE
 It could be considered to provide clear reference within ADPE SOP for stakeholder
communication and consultation, SOP/ADPE/KOM, for the list management documents
and its relevant stakeholders.
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.
The mill and estates have developed SOP and appointed personnel for identifying, reviewing,
applying and evaluating compliance with applicable laws and regulations including those related to
land status, occupational health and safety, environmental, labour, agricultural practice, and mill
operation. It is the responsibility of RSPO Officer at mill and each estate in consultation with other
departments to identify review and ensure application of those law and regulations. The procedure
requires regular access to regulatory bodies to update information of laws and regulations. The list
of regulatory bodies was covered in the list of stakeholder and its contact person. Valid applicable
laws and regulations were registered including detail requirement applied to which mill and or
estates.
The mill and estates have evaluated their compliance with applicable laws and regulations. Status
of compliance with laws and regulations were evaluated, and evaluation of compliance result
indicated that compliance status was justified with reference to the objective evidence of
compliance.
It was evident that the applicable laws and regulations were implemented by the organisation.
Interview was conducted with the ENVD, D&L, HR Ops and RSPO Officer at mill and each estate
to review the implementation of regulations.
Minor nonconformity against Criterion 2.1 for mill and all estates
 Mechanism for conducting evaluation of compliance with law and regulation has not been
clearly described in the SOP for legal and other requirements for PHLE, KULE PT. MP
Leidong West Indonesia, ADPE, and PHLM. Some items as mentioned in the status of
compliance for PHLE, KULE PT. MP Leidong West Indonesia, ADPE, PRNE and PHLM
were not complete nor accurate, e.g.:
o Not all relevant/related laws and regulations were listed in the evaluation of
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o
o
compliance although in practice they were already implemented, e.g. PP7/99,
Kepres 32/90, and UU32/2009 and Local Regulation for Labuhan Batu Utara –
KULE PT. MP Leidong West Indonesia.
Some of the compliance status was not accurately mentioned / stated in relevant
documents of the evaluation of compliance, e.g. legal demarcation of KULE PT. MP
Leidong West Indonesia Division 4 & 5, DPPL documents which were still in
approval process – KULE PT. MP Leidong West Indonesia, Permentan 14/2004 ADPE.
Evaluation of compliance against regulation UU No 3 tahun 1992 tentang
JAMSOSTEK and PP No. 28/2002 tentang JAMSOSTEK were performed but not
specific to all requirements in the regulation.
Criterion 2.2 The right to use land can be demonstrated, and is not legitimately contested by
local communities with demonstrable rights.
D & L Department of the PT. SMART, Tbk. held the original HGU documents. Copies of HGU were
kept by each estate. All HGU sighted for all estates were current and showed the area and the
length of tenure.
PHLE & PHLM PT. SMART, Tbk. held 3 (three) HGUs:
1. HGU#1 (October 21, 2005 – April 22, 2024) Kelurahan Padang Halaban, Kecamatan Aek
Natas, Kabupaten Labuhan Batu. Held by PT. SMART, Tbk. Expire date on April 22, 2024.
Total area: 5,509.39 Ha. Already extended according to Decree from BPN
#148/HGU/BPN/2004 for another 35 years since 2024.
2. HGU#2 (October, 21 2005 – April 22, 2024) Kelurahan Panigoran, Kecamatan Aek Natas,
Kabupaten Labuhan Batu. Held by PT. Perkebunan Panigoran. Expire date on April 22,
2024. Total area: 1,583.53 Ha. Already extended according to Decree from BPN
#110/HGU/BPN/2004 for another 25 and 35 years since 2024.
3. HGU#2 2005 (October 21, 2005 – December 31, 2012) Kelurahan Panigoran, Kecamatan
Aek Natas, Kabupaten Labuhan Batu. Held by PT. SMART, Tbk. Expire date on December
12, 2012. Total area: 372 Ha. Already extended according to Decree from BPN
KULE PT. MP Leidong West Indonesia held 4 (four) HGUs:
1. HGU#1 (March 18, 1996 – December 31, 2030) Tanjung Pasir/Sialang Taji, Teluk Binjai,
Kecamatan Kualuh Hulu – Kualuh Hilir, Kabupaten Labuhan Batu. Held by PT. MP Leidong
West Indonesia. Expire date on December 31, 2030. Total area 2,980.14 Ha.
2. HGU#18 (July, 25 2008 – July 22, 2043) Kelurahan Damuli Pekan, Kecamatan Kualuh
Selatan, Kabupaten Labuhan Batu. Held by PT. MP Leidong West Indonesia. Expire date
on July 22, 2043. Total area 103.4 Ha.
3. HGU#1 (October 21, 2005 – April 01, 2023) Kelurahan Damuli, Kecamatan Kualuh Hulu,
Kabupaten Labuhan Batu. Held by PT. MP Leidong West Indonesia. Expire date on April
01, 2023. Total area 354.10 Ha. Already extended according to Decree from BPN
4. HGU#1 (October 21, 2005 – April 22, 2024). Kelurahan Kanopan Hulu, Kecamatan Kualuh
Hulu, Kabupaten Labuhan Batu. Held by PT. MP Leidong West Indonesia. Expire date on
April 22, 2024. Total area 1,408.21 Ha. Already extended according to Decree from BPN
ADPE PT. SMART Tbk held 2 (two) HGUs:
1. HGU#5 (December 22, 1994 – December 31, 2020) Kelurahan Negeri Lama Seberang,
Kecamatan Bilah Hilir, Kabupaten Labuhan Batu. Held by PT. SMART Tbk. Expire date on
December 31, 2020. Total area 1,594 Ha. Already extended according to Decree from BPN
2. HGU#1 (October, 22 1991 – December 31, 2080) Kelurahan Aek Hite Toras, Kecamatan
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Gaya Baru Merbau, Kabupaten Labuhan Batu. Held by PT. SMART Tbk. Expire date on
December 31, 2080. Total area 896 Ha. Already extended according to Decree from BPN
PRNE PT. SMART Tbk. held 2 (two) HGUs:
1. HGU#1 (April 24, 1998 – April 22, 2030) Kelurahan Pernantian, Kecamatan Merbau,
Kabupaten Labuhan Batu. Held by PT. SMART Tbk. Expire date on April 22, 2030. Total
area 1,462.07 Ha. Already extended according to Decree from BPN #117/HGU/BPN/2004
for additional 35 years since 2030.
2. HGU#1 (October 21, 2005 – December 31, 2031) Kelurahan Aek Hite Toras, Kecamatan
Gaya Baru Merbau, Kabupaten Labuhan Batu. Held by PT. SMART Tbk. Expire date on
December 31, 2031. Total area 916 Ha. Already extended according to Decree from BPN
#135/HGU/BPN/2004 for additional 25 and 35 years since 2031.
Plantation Operation Permit for PT. SMART Tbk.:
1. HK.350/253/Dj.Bun.5/III/2001 issued for PT. SMART Tbk. on March 30, 2001 for 10.749,46
Ha Kecamatan NA IX-X, Aek Natas Merbau, Kabupaten Labuhan Batu, Sumatera Utara.
Mill capacity 60 TPH.
2. Decree #761/Menhutbun-VII/2000 issued for PT. PP Panigoran on June 29, 2000 for
1,583.53 Ha.
Plantation Operation Permit for PT. MP Leidong West Indonesia:
3. Decree #762/Menhutbun-VII/2000 issued for PT. MP Leidong West Indonesia on June 29,
2000 for 1,408.21 Ha Kualuh Hulu, Labuhan Batu, Sumatera Utara.
4. Decree #503/683/F issued for PT. MP Leidong West Indonesia on April 17, 2002 for 103.4
Ha.
In each estate, signboard was placed, indicated HGU, operation area and land title. Legal
boundaries were clearly demarcated. In majority there is good evidence that the legal boundaries
were maintained by each estate. Site survey and inspection of boundary pegs for each estate have
been planned and conducted, accompanied by BPN officers, based on request from Regional
Controller PT. SMART Tbk. (letter #266/RC-EXT/XII/2009, December 15, 2009). Based on the
survey and inspection each estate at that time had updated its GPS location of their boundary
pegs. Reconstruction of boundary pegs was evident. Regular inspection of the boundary pegs had
been established to be conducted every 6 months and result was noted, however minor
nonconformities were issued for KULE PT. MP Leidong West Indonesia and PRNE in this area. It
was also sighted that estate supervisors monitored the boundary pegs condition and reported in
their log book (Buku Kegiatan Mandor – BKM).
Figure 2 Boundaries Pegs with Estate name in PHLE
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There were neither disputes nor outstanding disputes over the land for all estates except for PHLE.
There was land conflict at PHLE a group of people named Kelompok Tani Padang Halaban dan
Sekitarnya (KTPHS). The conflict has been brought to court by the claimant, KTPHS, since May
2009. The management of PT. SMART, Tbk has agreed that the land conflict to be settled by
court. Court decision has been final as indicated on Putusan Perkara Gugatan Reg. No.
08/Pdt.6/2009/PN-RAP issued on May 07, 2010 stating that the claim was rejected.
Based on HGU documents it was noted that all land were acquired from other companies. Both
PT. SMART Tbk. and PT. MP Leidong West Indonesia have not acquired any new land for more
than 10 years. Therefore the indicator regarding evidence of land acquisition resolution with free
prior and informed consent was not applicable.
A mechanism to resolve conflict has been established and documented by each estate: SOP for
conflict resolution and land acquisition. The procedures have been disseminated and approved by
some Kepala Desa, Camat, dan Kepala Seksi Sengketa BPN Labuhan Batu. However
community/community representatives (e.g. community leader, religion leader, youth leader) have
not been involved.
 PHLE and PHLM the procedures were disseminated and approved by Camat Aek Kuo.
 KULE PT. MP Leidong West Indonesia the procedures were disseminated and approved by
Camat Kanopan Ulu.
 ADPE the procedures were disseminated and approved by Kepala Desa Sipare-pare
Tengah and Belongkut
 PRNE the procedures were disseminated and approved by Camat Kanopan Baru and
Camat NA IX-X.
Minor nonconformity against Criterion 2.2 for KULE PT. MP Leidong West Indonesia
 Evidence of maintenance of several boundary pegs required by HGU KULE PT. MP
Leidong West Indonesia Division 4&5 were not available. Evidence was available only for
boundary pegs VI, VII, and XXXIV.
Minor nonconformity against Criterion 2.2 for PRNE
 Boundary pegs for PRNE Division 3 were sighted and maintained, however several pegs
position were not clear against the position required by HGU map, e.g. boundary pegs #23
and #24.
Minor nonconformity against Criterion 2.2 for all estates
 Conflict resolution mechanism documented as SOP (SOP for conflict resolution and land
acquisition) have been disseminated and approved by Camat/Kades and BPN Labuhan
Batu Section Head of Conflict and Dispute, however community/community representatives
(e.g. community leader, religion leader, youth leader) have not been involved.
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.
This criterion was not applicable. Planted areas of the estates are wholly on Government land,
leased under HGU as indicated above. No land settlement for the estates area mentioned above.
Maps have been developed for each estate indicating Legal demarcation and planted areas. 7
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.
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A ten years management plan was established in order to achieve long-term economic and
financial viability. The management plan 2010 – 2020 was established based on the inputs from
Agronomy Division regarding replanting plan which were described in area to be replanted (Ha) per
year. Annual replanting plan and its ten years forecast (2010-2020) for each estate was sighted.
Feasibility study (net income, net income after tax, payback period) was made for each estate
considering replanting – maintenance of immature plant cost, estimate tonnage of FFB production,
CPO/PK production, estate operation cost (harvest, transport FFB to mill, maintenance, fertilizer
and estate overhead). Other consideration included was CPO/PK transport cost and management
fee.
Profitability study 2010 – 2020 was made for PHLM, based on summary of FFB production from all
supply bases: PHLE, PRNE, ADPE and KULE PT. MP Leidong West Indonesia. The actual oil and
kernel rates were used for one of regular review (OER and KER), also considering estate cost and
mill cost. Estimated mill cost includes processing, repair and maintenance, overhead, depreciation
and management fee. Profit and loss were evaluated.
The management plan is reviewed annually based on actual sales/revenue, actual expenditure for
each estate and inflation.
PRINCIPLES 4: USE OF APPROPRIATE BEST PRACTICES BY GROWERS AND MILLERS
Criterion 4.1 Operating procedures are appropriately documented and consistently
implemented and monitored.
The organisation has developed Standard Operating Procedures for Estates: Buku Pedoman Budi
Daya Perkebunan Kelapa Sawit Sinarmas (MCAR) 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, and integrated
pest management. Other than those documents there were also other procedures, e.g.
SOP/SMART/PJL for road maintenance, SOP/KULE/KWM for water management in KULE PT. MP
Leidong West Indonesia, SOP/ADPE/WMAG for water management in ADPE.
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, road maintenance, replanting, land application, barn owls and boxes
monitoring, weed controlling and harvesting. Activities have been performed at defined interval and
records of activities were sighted.
Standard Operating Procedures established for mill: Standar Operasional Prosedur Pengolahan
Pabrik Kelapa Sawit PT. SMART Tbk., rev. 04, 2010. The SOP consist of procedures for several
processes including receiving, sterilization, threshing, pressing, clarifying, oil recovery tank, oil
recycling, nut & kernel, boiler and generator, water treatment, waste water treatment and tank
cleaning. Other than those documents there were also Quality Manual PHLM/PM/01 and Quality
Procedure PSM/01 to PSM/25, including PSM/11 for CPO and Kernel Dispatch and PSM/07 for
CPO and Kernel Production.
Site observation was made during audit to some work station: receiving and grading, sterilizing,
threshing, pressing, clarifying, nut and kernel and dispatch. Interview with employees working in
those work stations showed that procedures were implemented. Processes were monitored at
defined interval and records of processes log sheet was sighted including: FFB receiving, grading,
sterilizer, threshing, press and digester, clarifier, nut and kernel, boiler, quality control (in process,
CPO and Kernel).
Preventive maintenance of production machine and supporting machines were sighted: daily,
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weekly and monthly. Some preventive maintenance was planned based on machine working
hours: generators. Preventive maintenance realization was documented including its check items:
boilers.
Operation reports were made for review from receiving to dispatch. Other than regular Mill
Advisory Audit (MAA), twice a year, inspection was also performed by PC and VPM. The findings
including its follow up were well documented. The mill is ISO 9001:2008 certified, a regular quality
management system audit have been taken. Last internal audit was performed on October 15-16,
2009. Findings were followed up, verified, and closed.
Criterion 4.2 Practices maintain soil fertility at, or where possible improve soil fertility to, a
level that ensures optimal and sustained yield.
SMARTRI analyses soil and leaf sampling regularly as input for fertiliser recommendation. Soil is
analysed every three years and leaf is analysed annually. Soil and leaf sampling were taken from
each division.
 PHLE: The soil analysis was in January 2007. The leaf analysis was in September 2009.
 PRNE: The soil analysis was in October 2008. The leaf analysis was in August 2009.
 ADPE: The soil analysis was in January 2009. The leaf analysis was in August 2009.
 KULE PT. MP Leidong West Indonesia: The soil analysis was in 2007 and 2008. The leaf
analysis was in September 2009.
The soil analysis in PHLE and KULE PT. MP Leidong West Indonesia is scheduled in 2010 which
was documented in ‘Budget SMARTRI operational 2010 – Program Leaf Sampling Unit and Soil
Sampling Unit’.
Fertilising programme was developed by SMARTRI for all Division of Estates based on result of
soil and leaf sampling analysis. Fertilising programme covers time of application and type and
dosage of fertiliser. Fertilising is performed manually and mechanically using tractor or airplane.
Fertilising using airplane is only performed in some area of PRNE and ADPE due to condition of
area applied and only for Urea and MOP. Application of PRNE is on slope area and ADPE is peat
land. The memo in regards to aerial application mentions that fertilising is prohibited over a 5-palm
wide buffer strip along the river and the main drain. Procedure regarding fertilising using airplane
was established in ITDV System Standard, Policy, and Procedure edition March 2007. There was
permit to operate airplane from Transportation Department #AOC/137-001 dated 20 January 2009
and valid for two years.
Minor nonconformity against Criterion 4.2 for PRNE and ADPE
 According to the internal memo, fertilising is prohibited over a 5-palm wide buffer strip along
the river and the main drain. However, the memo does not mention the requirements in
regards to fertilising of the area around collection drain.
 There was no evidence that 5-palm wide buffer strip along the river and the main drain
were not sprayed by fertiliser during aerial application (i.e. no aerial application map could
be demonstrated during the audit).
Legume cover crops (LCC) are grown to protect soil from erosion, improve soil fertility and control
weed. The LCC grown is Mucuna brachteata. The LCC is grown in PHLE and PRNE. LCC growth
is monitored regularly. LCC is maintained through dangir (cleaning from weed) and fertilising. Rock
phosphate (RP) and NPK is used as fertiliser to grow LCC.
Empty fruit bunches (EFB) are applied as nutrients. EFB was applied based on the
recommendation from SMARTRI in terms of quantity and location. EFB are applied only in PHLE.
Good evidence of EFB application.
Palm Oil Mill Effluent (POME) is applied only in PHLE where the mill is located. POME was only
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applied in several blocks in Division 2 and 3 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 times rotation to each block. Flow rate and
quantity of POME and area applied are recorded daily. Permit of land application to PHLE
#503.3.660/365/BPDL-LB/AP/2007 has been obtained by the organisation from Bupati
Labuhanbatu.
Figure 3 Land Applications in PHLE
Criterion 4.3 Practices minimise and control erosion and degradation of soils.
MCAR chapter 3 ‘Preparation before Planting’ describes procedure for minimising and controlling
erosion, peat land management. The organisation does not recommend plantings on slopes >40%
and >22o. System for planting on slopes area is provided through terracing, determining of base
line, leveling 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.
Maps of soils survey from Plantation Monitoring and Planning Division were available for all
estates. It was noted that there was no planting on slopes >40%.
 PHLE: No fragile soils. Planted area has slopes 0-8%.
 PRNE: 15.56% planted area has slopes 30% in Division 3 Block 23 and 28.
 ADPE: 100% planted area is a deep mature peat land (more than 3 m deep)
 KULE PT. MP Leidong West Indonesia: 15.26% planted area has slopes 15% and 65.79%
of planted area is wetland and potential acid sulphate soils.
Procedure for road maintenance is described in MCAR 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 watering. 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
in Planning of Road Grade Allocation which covered mechanical road maintenance for all division.
Manual and mechanical road maintenance realisation was recorded including distance of road
maintained and diesel fuel used for heavy equipment.
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Opportunity for improvement
 Realisation of road maintenance has been recorded in ‘Kartu kerja kendaraan’ including
distance of heavy equipment use and total of diesel fuel use. It can be considered to record
distance of road maintained.
Some area of KULE PT. MP Leidong West Indonesia is wetland. Water management procedure is
established to control water table within range of 50-70 cm below ground surface. Water gates and
pump machines are provided in KULE PT. MP Leidong West Indonesia to control water level.
Level meter is monitored daily including monitoring of rainfall, operation of pump machine,
condition of water gate (open or close), and diesel fuel consumption.
Figure 4 Level meter in KULE PT. MP Leidong West Indonesia
ADPE is on a deep mature peat land (more than 3 m deep), where the plantation existed long
before 2004. Water management procedure is established to control water table within range of
50-70 cm below ground surface. 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 including status of
water level (below or above the range). Condition of piezometer and level meter are checked
regularly including cleanliness of piezometer, condition of sand sacks, and identification of
piezometer and level meter. During site visit it was observed that condition of piezometer and level
meter was good. Condition of water gate and dike (open or close) was according to water level
result.
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Figure 5 Piezometer in ADPE
Criterion 4.4 Practices maintain the quality and availability of surface and ground water.
MCAR 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.
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 the time of audit there was no replanting activity
nearby river. Warning board also placed regarding prohibition to apply agrochemicals and fertiliser
in the buffer zone. Procedure and work instruction regarding maintaining quality of water
availability and ditch cleaning are provided. Ditch is cleaned based on programme or ditch
condition which is monitored regularly. Programme of ditch cleaning using heavy equipment was
established for KULE PT. MP Leidong West Indonesia and ADPE includes for main drain,
collection drain and outlet. Result of ditch cleaning using heavy equipment was recorded including
ditch length cleaned and diesel fuel consumption.
Figure 6 Watershed Protection
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The mill has monitored its water consumption including for process (dilution), boiler water,
maintenance, repair and housekeeping. Water consumption data since 2008 until May 2010 was
sighted. There was significant reduction (around 45% reduction) of process water consumption
from 2008 – 2009, since innovation has been put in place: non use of purifier in the processing
without compromising the CPO quality and also replace 60-66% of dilution water with condensate.
For year 2010-2011 there is plan for improving FFB reception area using conveyor system and
replacing 4 fire tube boilers with 1 water tube boiler. These innovation programs were estimated to
give further reduction of mill water consumption for housekeeping and boiler water.
Surface and ground water are monitored regularly. River water quality was analysed for both
upstream and downstream. There are also three ‘monitoring wells’ which were monitored regularly
to ensure that POME used in land application did not affect the quality of ground water. Result of
analysis of river water from independent laboratory for parameters pH, NO 3, NO2, Cu, Zn, Mn, Fe,
Cl, BOD and COD showed that surface and ground water were not affected. Report of analysis
was sighted and kept as record.
 Quality of river water has been analysed. It can be considered to analyse river water
covering parameters which were included in fertiliser content which were applied by
airplane, e.g. ammonia and phosphate.
POME is collected in ponds prior to be used for land application. Flow rate of POME used for land
application is recorded daily. BOD of POME is analysed monthly. Result indicated that BOD was
inline with permissible limit for land application. Record of BOD of land application was evident.
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 established
Division Work Program for IPM in each division. IPM programme includes pest and diseases
detection, census and controlling, weeds controlling, planting of beneficial plant, use of pesticide
and herbicide.
The implementation of IPM is monitored. The barn owls and boxes were monitored to check
availability of owl for rodent control. The growth and length of beneficial plants were recorded.
Beneficial plants were replanted if damaged beneficial plants were found. Stages of UPDKS (Oil
palm leaf eating caterpillar) growth are monitored. Census of UPDKS and rodent is performed
regularly to determine its controlling. Controlling is performed if the UPDKS and rodent attack are
higher than the critical point. Application of rodenticide during rodent attack was monitored. Census
and controlling of termite is performed monthly. Oryctes is managed through IPM using
pheromones. This applied in immature upkeep. All IPM programmes are well recorded and
documented monthly in all divisions of estates.
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Figure 7 Barn owls and boxes in ADPE
Chemical is used if attack is uncontrolled. Routine use of chemicals is programmed including area
applied, their dosage, and rotation.
Training of IPM has been performed to PHLE, PRNE, ADPE, and KULE PT. MP Leidong West
Indonesia staffs. List of participant attendance was sighted.
Pesticide toxicity units (a.i. / LD 50 / FFB tonnage) are monitored to Glyphosate, metilsulfuron,
paraquat. The records are provided since 2007 to present.
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.
Justification of all agrochemicals used by the organisation is documented. Agrochemicals use has
been registered by each Division of Estates including trademark and register number from
authorised institution (Agriculture Department), e.g. Decis – permit RI.387/11-2007/T, Rolixone –
permit RI.2467/5-2006/T, Starane 200 EC– permit RI.854/5-2004/T. 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’.
Pesticides use is well recorded in ‘Recapitulation of pesticides use for spraying’ including active
ingredients used, area treated, amount applied per ha and number of applications. The records
were sighted in each Division of all Estates.
During audit, spraying of weed was observed in PHLE and ADPE. It was noted that pesticides
(rolixone, ally) use was registered agrochemical. Dosage of pesticides use, target weed was inline
with MCAR section 6.3. Amount of pesticide use was recorded in BKM and ‘Warehouse card’.
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Records of spraying of pest, weed, and disease were assessed in PRNE and KULE PT. MP
Leidong West Indonesia, e.g. Division Work Program, ‘Buku kerja mandor’, and ‘Warehouse card’.
It was noted that agrochemical use was inline with target pest, weed or disease, determined
dosage, and applied by qualified person. PPE used during spraying of pesticides are boots, apron,
safety glass, respiratory mask and hand gloves.
Agrochemicals have been applied by qualified persons who have received formal training. Training
was conducted by Agricultural Department qualified trainer. Training was performed in February
2009, April 2010. Training record was sighted for sprayers in all estates. Training covered handling
of concentrate chemical and spraying method.
Minor nonconformity against Criterion 4.6 for PHLE and KULE PT. MP Leidong West
Indonesia
 There was no evidence that training of agrochemical spraying for some newest employees
i.e. Supendi (PHLE) and J. Mare-mare (KULE PT. MP Leidong West Indonesia) although
PPE using and MSDS understanding have been communicated.
Daily briefing is also performed by supervisor called ‘mandor’ to his/her members. The mandor
provides briefing on the issues of spraying activities such as spraying procedure, area applied, use
of PPE, cleaning of PPE.
The organisation policy is to perform medical check up annually to all employees. Medical check
up 2010 was sighted for all pesticide operators in all estates. Results of medical check up in
general were good.
The organisation has policy regarding no work with pesticides for pregnant and breastfeeding
women. Women were still involved in spraying of pesticides in PRNE and KULE PT. MP Leidong
West Indonesia. PHLE and ADPE did not involve women in spraying of pesticides any longer. To
ensure that there were no pregnant and breastfeeding women during spraying of pesticides, there
are lists of women worker including data of leave during the first and second day of menstruation.
Agrochemicals are stored in the determined area separated from fertiliser and other chemicals.
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 chemical handling. PPE for handling of
chemicals are provided including boots, apron, safety glass, respiratory mask and hand gloves.
Spill kit for agrochemical spill handling is provided.
Prior to be used in the field, agrochemical was diluted in Division Office. There is a designated
area of mixing which was completed with roof, secondary containment and information of
agrochemical hazard. The area is also used for cleaning the agrochemical containers and fertiliser
sacks.
All chemical containers were triple rinsed prior to be disposed in the designated area and
separated with domestic waste landfill. Records of chemical containers quantity disposed were
evident.
Paraquat is still used in the estates. Data of paraquat used is provided since 2007. It was observed
that paraquat use was reduced year to year. Ammonium glusofinate has being used and to be
used to change paraquat permanently.
Criterion 4.7 An occupational health and safety plan is documented, effectively
communicated and implemented.
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It was noted that PHLM has been certified to occupational health and safety management system
based on Indonesia’s Regulation ‘PER. 05/MEN/1996’.
Occupational health and safety policy has been established and has signed by the management
for the mill and estates. The policy statement includes the commitment to prevent injury and ill
health, to comply with regulation and for continual improvement. The policy was made available for
access by employees and other stakeholders and displayed on strategic locations of Estate Office
and Mill Office.
Occupational health and safety target and programme were also established for the mill and
estates. The main targets and programme were in regard to zero accident and zero ill health.
A safety committee has been established for the mill and estates and already approved by local
authority (Dinas Tenaga Kerja (Disnaker)). The chairman of the committee is the respective Mill
Manager and Estate Managers and the secretary of the committee is the OHS expert (AK3U) and
the member consists of representative of each section. OHS expert is also a safety officer and acts
as a representative on health and safety. The Safety Committee is responsible for the OHS
programme and its implementation. Monthly meeting was held by Safety Committee to review the
progress and implementation of OHS programme. Results of the meeting including the
recommendation and action plan were recorded in the minutes of meeting - these were sighted
during the audit.
In the employees’ level, a daily briefing is performed by supervisor to his/her members which is
called a morning circle (lingkaran pagi). In this event, the supervisor provides briefing on the issues
of production including health and safety issues such as the use of PPE and accident prevention.
Health and safety inspection was performed by the Safety Officer to identify any unsafe acts and
conditions. Records of health and safety inspections were sighted.
The hazard exists in the operations and activities of the mill and estates were identified and the
risks were assessed using documented risk assessment methodology. Hierarchy of control
principle was applied to determine risk control. It was noted that most risks were controlled by
combination of establishment of procedure or work instruction, safety signage and the use of PPE.
Sighted procedures or work instructions were included for estate activities such as planting/replanting, fertilizing, insecticide, herbicide and pesticide spraying, road maintenance and harvesting,
clinic and warehouse.
Division warehouse were observed during the audit. MSDS and hazard symbol label were provided
nearby of chemicals. Emergency shower and eyewash was also provided to anticipate in case of
an emergency of chemical handling. PPE for handling of chemicals were provided including boots,
apron, safety glass, respiratory mask and hand gloves. Fertilizer warehouse has a good air
circulation.
Several activities of estate were observed during the audit e.g. spraying, harvesting, land clearing
and other minor maintenance. The workers for spraying were provided with PPE including boots,
apron, respiratory mask, safety glass and hand gloves. Minor non-conformance and opportunity for
improvement were raised for harvesting hazard risk control. Hazard symbol label was provided at
the container of pesticide/herbicide/insecticide. Interview with workers indicated that they have a
good understanding on hazard and risk of their work. Interview with workers also indicated that
they were provided by the organisation with the medical facilities (clinic or referred hospital). The
supervisors were provided with first aid kit.
Employees housing facilities were also observed during the audit. There was a programme of
Clean Friday (Jumat bersih) for promoting health programme which mainly covered housekeeping
and gardening - although in some estates still need to be improved. The fresh water was generally
provided by the organisation, however in some estates the quality of fresh water still need to be
improved. Minor non-conformance was also raised for this issue.
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Each estate was provided with the clinic supported with the paramedics. The organisation doctor
stands by on Padang Halaban Medical Centre and regularly visits the clinics. The housekeeping of
clinics was generally in good conditions. The medicines were stored appropriately in closed cabinet
and freezer. The expired date of medicines was controlled. Medical records were kept in the clinic.
Transportation and heavy vehicles for estates activities such as tractor, trailer and grader were
regularly maintained. The operators (drivers) were found having license from local authority (SIO).
Workshops were available at each estate. Small compressor tanks were certified by local authority.
Gas cylinders were placed and chained to prevent unintended fall and also provided with flash
back arrester (non-returnable valve). PPE for welder was appropriately provided. Welders were
also certified by local authority. The fuel tank was also available at each estate. Hazard symbol
label was provided at the tank. Fire extinguishers were also provided appropriately. Ear muffs were
required to enter generator set room.
As for PHLM, the risk assessment has been conducted; sighted records including for receiving and
handling of FFB, sterilizer, boiler, crane operation, conveyor, cleaning of CPO tank, maintenance
and workshop, laboratory, etc. Procedure and work instructions were also established to control
the operation including controlling the risk. Evident of risk control were sighted e.g.:
 Boilers were tested and certified in accordance to local regulations. Regular maintenance
was also performed. Process parameters of boiler operation was established, controlled,
and recorded. Emergency shut down procedure was established and tested regularly.
Boiler operators were certified.
 Forklift and crane were also tested and certified in accordance to local regulations. Regular
maintenance was also performed and the operators were also certified and trained in
accordance with local regulations.
 Pressurized vessels (sterilizer, compressor tanks) were tested and certified in accordance
to local regulations and completed with safety valve and pressure gauge.
 Fuel tanks were completed with secondary containment and fire extinguishers.
 Lock Out Tag Out procedure was in place and implemented especially for maintenance
activities.
 Permit to Work procedure was also established and implemented such as for cleaning of
CPO tank and contractor activities.
 Workers were wearing appropriate PPE.
 Pedestrian was determined appropriately inside the mill.
 Safety signages were properly provided at locations of mill.
 Most stair/ladders were provided with the hand rail.
 Acid cabinet was provided in the laboratory.
Minor nonconformity against Criterion 4.7 for the mill and all estates
Several unsafe acts and conditions were observed during the audit, e.g.:
 The compressor tanks (with the pressure 10 Bar) were not provided with the name plate
giving indication of maximum pressure and working pressure. Furthermore, safety valve
testing was not performed regularly.
 Transportation workshop was not provided with torsion wrench.
 The drainage system in several housing area was neither good nor working effectively.
Minor nonconformity against Criterion 4.7 for all Estates
Several unsafe acts and unsafe conditions were observed during the audit, e.g.:
 Most supervisors were using motor cycle for transportation inside the estate and not
wearing helmet and the motorcycles were not provided with the back mirror.
 The harvesting workers were not provided with helmets to prevent hazard and risk of fall
object (FFB).
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Minor nonconformity against Criterion 4.7 for PHLM
 In the receiving of FFB, the license of truck driver has already expired. In the area of boiler,
the platform was not provided with border/cover. The cover machine of WTR4-No 05 was
not properly installed after repair.
Minor nonconformity against Criterion 4.7 for PHLE
 The result of laboratory test of fresh water for employee housing still did not meet the
requirements.
 The vertical stair and platform of water tower was not provided with a fall protection cover.
Minor nonconformity against Criterion 4.7 for ADPE
 The design of bridge for harvester (titian panen) did not adequately provide fall protection
hazard and risk (too narrow and without cover on both sides).
 Under repair (un-proper) devices were not tagged and locked e.g. NEW HOLLAND WTR
4.02 and Scissor lifter.
 The laboratory test of fresh water for employee housing still did not meet the requirements.
 The vertical stair and platform of water tower was not provided with a fall protection cover.
 It is suggested to review and consider the use of boots for harvester and other small
maintenance activities workers instead to provide them with non-boot shoes.
 Consider to develop the checklist for inspection of contractor activities including health and
safety point of view.
The organisation provides accident insurance to employees. Clinic was also available to provide
medicine and medical treatment to employees and family.
The organisation policy is to perform medical check up annually to all employees. Medical check
up 2010 was sighted for all the estates and mill. Results of medical check up in general were good
and a few employees have been referred to specialist doctors for further checking.
Minor nonconformity against Criterion 4.7
 The parameters for annual medical check up consist only of physical check. Laboratory
check was performed only to the employees with specific exposure hazard, e.g. sprayer,
chemical warehouse and fertilizer warehouse workers and employees exposed to noise
hazard.
 In general the risk assessment has been conducted by the mill and all estates, however
several hazard and risk were missing during risk assessment, e.g.: compressor operation in
estate workshop and manual handling of fertilizer warehouse workers. One of the risk
controls for welding process is by establishing work instruction however the content of work
instruction did not mention the risk control of welding processes appropriately.
The training in regard to occupational health and safety has been provided and sighted during the
audit including for OHS expert for each mill and estates, first aid, spraying, emergency response
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and preparedness, heavy vehicle operators, OHS communication, chemical handling, manual
handling, boiler operators, crane operators, etc. Training records were maintained.
The procedure for emergency preparedness and response has been established for the mill and all
estates. The procedures include fire, toxic emergency, chemical spillage, and earthquake. The
organisational structures emergency response and preparedness were established at the mill and
all estates. The organisation structure mainly consists of commander, medical team, external
relation team, evacuation team, fire fighting. The responsibilities and authorities of team were
defined and documented. The important telephone numbers for external parties were also
identified for emergency purpose e.g. hospital, police and local fire brigade. The emergency
response and preparedness equipment was provided and regularly inspected e.g. fire extinguisher,
water tank truck, water pump, and hydrant. Ambulance was also available at the estates. The
schedule for exercising the emergency response and preparedness was established and sighted
for 2010. Fire emergency response and preparedness procedures have been exercised for the mill
and all estates.
 The fire extinguisher for fuel tank was put inside the room and the door was locked (for
PRNE). The fire hose reel of hydrant was locked (PHLM) and the key was kept by security
personnel far from the location. The emergency shower and eyewash of central warehouse
(KULE PT. MP Leidong West Indonesia) was placed outside where the chemical handling
performed. In case of an emergency, this equipment will be difficult to be accessed and
utilized.
The first aider training was given by the organisation doctor to supervisors, assistant in the estates
and supervisors in the mill. They were also provided with first aid kits. Records of such training
were sighted. They were daily in charge in operation of the estates and mill and in case an
emergency, they will be immediately able to provide first aids treatment.
The system to record accident was established in the form of procedure. The procedure was
dealing with accident reporting, investigation as well as corrective and preventive action to prevent
action.
 Currently, reporting and investigation of accident was limited to accident referred as loss
time accident. Consider to extend the accident investigation also to cover minor accidents
(e.g. first aid case).
Note : The occupational health and safety policy and the management system exist.
However, The number of nonconformities is large that indicated ‘health and safety culture’
has not been well developed. This 4.7 criterion will be one of the main focus for next
surveillance assessment.
Criterion 4.8 All staff, workers, small holders and contractors are appropriately trained.
The competency requirements including training requirements for each function within the mill and
estates were defined and documented. The training requirements including training/license
required by regulations and training needed for operation in the mill and estates such as leadership
training, production training, occupational health, safety and environmental training, etc. Training
programme was identified based on these competency requirements. Training history of each
employee was recorded and well maintained.
There were several contractors working on behalf of the organisation such as PT. Universal
Transindo for transporter of FFB and CV. Bintang Meriah Medan for land clearing (PHLE and
PRNE). Briefing has been given to employees of PT. Universal Transindo. All drivers from this
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company have been completed with the license. Welder training for this contractor has been put in
an action plan which will be completed soon. The operators of CV. Bintang Meriah Medan have
been completed with certificate as heavy vehicle operators. First aids training have also been given
to this contractor.
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.
Environmental impact assessment documents called Environmental Evaluation Study (SEL)
#RC.220/1262/B/VII/1993 dated 28 July 1993 approved by Agriculture Department on behalf of PT.
SMART Tbk which covers PHLM and PHLE activities were provided. There were changes made to
operations and changed impacts such as POME for land application, EFB application, and includes
PRNE and ADPE.
Environmental impact assessment document on behalf of PT. SMART Tbk was revised due to
changes made. Revised environmental impact assessment document called Environmental
Management and Monitoring Document (DPPL) of PT. SMART Tbk covers PHLM, PHLE, PRNE
and ADPE activities. KULE PT. MP Leidong West Indonesia activities are covered in DPPL of PT.
MP Leidong West Indonesia. DPPL is in the process for approval from the Governor of North
Sumatera. The organisation sent DPPL to the Governor of North Sumatera through Environmental
Agencies of North Sumatera on 8 March 2010. Environmental Agencies of North Sumatera has
checked and assessed DPPL and based on letter #836/BLH–SU/BTL-A/2010 and #838/BLH–
SU/BTL-A/2010 from Environmental Agencies of North Sumatera, they approved DPPL and has
recommended the Governor of North Sumatera to sign off the DPPL.
Revised DPPL of PT. SMART Tbk. and PT. MP Leidong West Indonesia have included all
environmental components:
 Building new roads, processing mills or other infrastructure.
 Putting in drainage or irrigation systems.
 Replanting or expansion of planting area.
 Disposal of mill effluents.
Environmental monitoring is programmed and covers all environmental monitoring required by
DPPL. Environmental monitoring covers air quality in boiler area, ambient air in staff and
employees housing, noise in Estate, quality of POME, surface water quality (well water in PHLM,
Merbau River, Aek Korsik River, Parit Busuk River and Sungai Merah River), ground water quality
(monitoring and community well), stack emission of boiler and electricity generator, air emission of
heavy equipments and vehicles, soil quality, erosion rate.
Environmental management is reported every six month as required by regulatory authorities to
Environmental Office of Labuhan Batu Utara. The report includes DPPL implementation.
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
Identification of any protected, rare, threatened or endangered species and HCV habitat has been
performed by PT. SMART Tbk. Environment Department for PT. SMART Tbk. PHLE/PHLM,
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ADPE, and PRNE and for PT. MP Leidong West Indonesia KULE. The HCV assessment
performed on January 5-15, 2009. Two reports have been issued, one for PT. SMART Tbk. and
the other for PT. MP Leidong West Indonesia. Both reports have been independently reviewed by
Mr. Dwi Muhtaman, one of the RSPO approved HCV assessor.
In the report it was noted that for PT. MP Leidong West Indonesia, KULE, assessment performed
partially from total area under HGU for Sialang Taji Division 4 & 5 area. The scope of HCV
assessment was performed under area which was already acquired / planted by the Estate. The
surrounding planted areas were currently used by local communities for housing and traditional
plantation and there were major resistance where the communities did not allow the HCV
assessment to be conducted.
Appropriate measures to preserve rare, threatened or endangered species or high conservation
value habitats have been taken by all the estates. The HCV management and monitoring plan was
prepared, for PT. SMART Tbk. (PHLE/PHLM, ADPE, and PRNE) and for PT. MP Leidong West
Indonesia, KULE. It was sighted that the management and monitoring plan were consistent with
the identified HCV in the assessment report.
 PHLE/PHLM: HCV1.2 and HCV 4.1 were identified and none for other HCV: two species of
birds (Bubulus ibis, Halcyon smyrnensis), one species of mammals (Felis temmincki), Titi
Panjang and Wajiran rivers about 96.15 Ha.
 ADPE: HCV 1.2 and HCV 3.1 were identified and none for other HCV: one species of plant
(Nephentes sp), one species of bird (Halcyon smyrnensis), one species of mammals (Felis
temmincki), and HCV 3.1 area about 177.86 Ha.
 PRNE: HCV 1.2 and HCV 4.1 were identified and none for other HCV: two species of birds
(Bubulus ibis, Halcyon smyrnensis), one species of mammals (Felis temmincki), Parit
Busuk and Merah rivers about 83.22 Ha.
 KULE PT. MP Leidong West Indonesia: HCV 1.2 and HCV 4.1 were identified and none for
other HCV: one species of birds (Halcyon smyrnensis), one species of mammals (Felis
temmincki), and Kanopan Ulu river about 3.75 Ha.
Figure 8 Nepenthes in ADPE
Although at some area, e.g. PHLE (Division 8) and KULE PT. MP Leidong West Indonesia
(Division 3) cemetery were identified, the report noted that there no indication the cemetery was
considered sacred, no such religious rituals performed. Therefore the area was not considered as
HCV. The Estates (PHLE and KULE PT. MP Leidong West Indonesia) have put some effort not to
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disturb the cemetery area and regular maintenance of the cemetery was performed.
The HCV management and monitoring plan described measures taken for each HCV and its
monitoring. Relevant laws were taken into account for determining appropriate measure including
PP7/1999, Kepres.32/1990, and PP26/2008. HCV management areas maps were established.
Buffer zone on the left and right side of the river were marked. Action to control any illegal or
inappropriate hunting and fishing was sighted. There were warning signs which were made visible
for workers and community. Warning board was also placed regarding prohibition to apply
agrochemicals and fertiliser in the buffer zone. Vetiver grass was planted in for erosion prevention.
Figure 9 Warning sign to control any illegal or inappropriate hunting and fishing in KULE
PT. MP Leidong West Indonesia
ADPE area is on a deep mature peat land (more than 3 m deep), where the plantation existed long
before 2004. An established water management at ADPE was sighted to ensure that water table is
maintained at a range of 50-70 cm below ground surface – these were described more detail for
Criterion 4.3. The estate has constructed and maintained their drainage system which consisted
primary, secondary and tertiary ditch, water gate, level meter, and piezometer. The water levels
were monitored regularly.
Dissemination of HCV and its management and monitoring plan was sighted both for employees
and surrounding community representatives. Interviews with estate supervisors met during site
observation showed their understanding of HCV and its management and monitoring plan.
Each estate has appointed HCV officers to ensure the implementation of management and
monitoring plan. Other than HCV officers, other level of employees also has their part of
responsibility for managing and monitoring HCV as indicated in the HCV management and
monitoring plan including its SOP. The overall management and monitoring plan involving
Supervisors, Assistants, Estate Managers, Regional Controller and Environmental Department of
PT. SMART Tbk. Monitoring records were sighted to ensure that management plan is
implemented, e.g. warning sign and board monitoring, erosion prevention crop planting, river water
quality monitoring. HCV monitoring book was given to each supervisor to record any flora and
fauna classified as HCV.
 Scope of area for PRNE Division 3 HCV identification did not include all areas within legal
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boundary, and this was not described in the report.
Opportunity for improvement – KULE PT. MP Leidong West Indonesia and PRNE
 Based on interview with two supervisors from KULE PT. MP Leidong West Indonesia and
PRNE, it was informed that one protected fauna usually sighted at night, however the
monitoring activities has not involved employee who work in the night time (security and
patrol).
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 all wastes and sources of pollution from their activities.
Result of identification was recorded in environmental aspect list. Waste management plan is
described in waste controlling procedure. Wastes are divided into two types: non hazardous and
hazardous waste. It was observed that wastes bins are provided in determined areas including in
housing.
Domestic wastes from all estates, mill, and housing activities are collected regularly to be landfilled
in determined area in the estates. Landfill area is located far from housing, not swamp area and
flood-free area. The landfill is covered by soil regularly to prevent bad odour and rodent. PHLE,
PRNE, and KULE PT. MP Leidong West Indonesia provide landfill in each area while ADPE do not
provide landfill. Domestic wastes from ADPE are sent to landfill in PHLE.
Human wastes are collected in septic tank. Condition of septic tank is monitored regularly however
cleaning of septic tank has not been scheduled.
Medical wastes from policlinic activities of all the estates were sent to Padang Halaban Medical
Centre and collected in Padang Halaban Medical Centre prior to be burnt in the incinerator of
Rantau Prapat Hospital. Delivery of medical wastes from all the estates to Padang Halaban
Medical Centre and Padang Halaban Medical Centre to Rantau Prapat Hospitals was completed
with receipt report.
Hazardous chemical containers from all the estates activities were cleaned using a triple rinse
method. Hazardous chemical cans and bottles were landfilled and separated from domestic waste
landfill. PHLE, KULE PT. MP Leidong West Indonesia, and PRNE landfilled hazardous chemical
cans and bottles in their areas. ADPE landfilled hazardous chemical cans and bottles in PHLE
area. Quantity of hazardous chemical cans and bottles landfilled was recorded and picture of
hazardous chemical cans and bottles landfilling was sighted. Hazardous chemical jerrycans were
reused for chemical solution during spraying. Fertiliser sacks were cleaned prior to be reused for
brondolan layer during harvesting. Quantity of fertiliser sacks cleaned was recorded. All Divisions
in all the estates have been completed with area to clean hazardous chemical containers and
fertiliser sacks. Liquid waste from cleaning was reused for chemical dilution during spraying.
Chemical containers from PHLM activities were cleaned using a triple rinse method. There is a
designated area for chemical containers cleaning. Liquid waste from cleaning was collected in the
basin. pH of the liquid waste is monitored daily. The liquid waste is disposed to open drainage after
pH was in range of threshold of Government regulation. Water quality of open drainage from the
mill activities is regularly analysed.
Chemical waste from PHLM laboratory contained phenol, ammonium vanadate, and selenium was
sent to authorised institution to be processed.
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 from Regional Controller #86/RC-SU/VI/2010 and
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contract agreement all the estates #129/PHLE/VI/2010, the hazardous wastes from KULE PT. MP
Leidong West Indonesia, ADPE, and PRNE activities are sent to PHLE hazardous waste storage,
to be collected in PHLE hazardous waste storage prior to be disposed to authorised institution.
Hazardous wastes from PHLM activities are collected in PHLM hazardous waste storage. The
hazardous wastes were disposed to the authorised institution. Hazardous waste manifests were
evident. It was noted that PHLE and PHLM hazardous waste storage has owned a permit of
hazardous waste storage from the Environmental Ministry.
Fibre and shell are used for boiler fuel. EFB is applied in PHLE as nutrients. Boiler ash is spread in
PHLE and given to communities for road maintenance.
Quality of POME is analysed monthly. Stacks emission of boiler and electricity generator are
analysed every six months. Air emission of heavy equipments, FFB transportation and operational
vehicles are measured annually. The detail was addressed elsewhere in this report.
Criterion 5.4 Efficiency of energy use and use of renewable energy is maximised.
The mill used shell and fibre for boiler fuel. The use of this renewable fuel was recorded and
efficiency analysis has been performed converted to kcal/ton CPO and kcal/ton PP. It was
concluded that the use of renewable fuel reduced about two third of diesel fuel consumption.
The mill and estates only use one type of fossil fuel: diesel fuel. Diesel fuel in the mill is used for
operation vehicles and emergency electricity generator to supply electricity for office and housing.
The consumption of diesel fuel is monitored monthly and evaluated for each CPO/PP tonnage. As
described previously in this report, for 2010-2011 there is a plan to improve FFB receiving using
conveyor system. This is estimated also to reduce diesel fuel consumption for bucket loader and
lorry tractor operation and reduce electricity consumption.
Diesel fuel in the estates is used for operation of heavy equipments, vehicles and electricity
generator to supply electricity for nursery and office. 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 2010 decreased compared to 2009.
Minor nonconformity against Criterion 5.4 for all Estates
 Record of diesel fuel consumption / FFB tonnage and its analysis has not been provided in
PHLE. Efficiency of diesel fuel consumption litre of diesel fuel / FFB tonnage has not been
analysed in ADPE and PRNE.
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.
The organisation has policy of zero burning documented in circular letter #071/SMD Ops/IX/2007
form SMD Operation. The requirement of zero burning was communicated to contractors who
conducted replanting activities. This was documented in contractual agreement article #5 between
the organisation and contractor. During audit, replanting is being carried out in PHLE (Division 3)
and PRNE (Division 1). Realisation of replanting activities was well documented and reported
including activities of chipping, ripping, cleaning ditch, making ditch and total area replanted. It was
observed that there was no evidence of burning.
Procedure of responding of land burning emergencies is provided in all the estates. Training of
responding of land burning emergencies is divided into two types: basic training for all employees
and advance training for emergency response team. The schedule for exercising the emergency
response and preparedness was established and sighted for 2010. Fire emergency response and
Page 39 of 61
preparedness procedures have been exercised for all estates. Equipment to respond land burning
have been provided such as fire extinguisher, shovel, mattock, communication equipment (Handy
Talky HT), and water tank. Condition of the equipment is checked regularly for readiness of
equipment.
 It was noted referring to report of replanting that the land preparation for replanting was
zero burning. It can be considered to monitor contractor activity regarding zero burning to
ensure that land preparation for replanting was zero burning.
Criterion 5.6 Plans to reduce pollution and emissions, including greenhouse gasses, are
developed, implemented and monitored.
Assessment of all polluting activities including gaseous emissions, particulate/soot emissions,
effluent, and wastes has been conducted in the mill. All significant pollutants and emissions have
been identified and result was documented in environmental aspect list. Plan to reduce significant
pollutants and emission was described in procedures and monitoring schedule.
Stacks of four boilers and three electricity generators are measured every six months as required
by Government regulations. Measurement results indicated that emission of stacks were below
thresholds of Government regulations.
There are programmes to reduce pollution and emission including green house gasses such as
use of fibre and shell as boiler fuel , participation in WWF program ‘60 earth hour’, replacement of
four fire tubes with one water tube boiler in 2011 to reduce diesel fuel consumption, improvement
of FFB receiving by using conveyor system. This new conveyor system is also estimated to reduce
diesel fuel consumption for bucket loader and lorry tractor operation and reduce electricity
consumption.
Sources of POME are condensate from steriliser, tank drain, waste vibrating sludge, and mill floor
cleaning. There are three ponds to collect POME prior to be used for land application in PHLE.
Ponds are equipped with agitator to prevent sedimentation of POME and water level to monitor
height of POME in ponds to prevent POME overflowing. Flow rate of inlet and outlet of POME and
height of POME in ponds is recorded daily. The record also includes total POME applied and rest
of POME in ponds. The organisation has owned a permit of land application for PHLE
#503.3.660/365/BPDL-LB/AP/2007 dated 23 October 2007 and valid for three years. The permit
requires that BOD and pH is measured monthly. Measurement results indicated that BOD and pH
of POME were below thresholds of permit. Quality of POME is also analysed daily for parameter
pH, alkalinity and VFA.
Page 40 of 61
Figure 10 POME pond completed with water level to monitor height of POME
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 document was available, and it was made by the Social Impact
Assessment Team of PT. SMART Tbk under research project No. 001/SIA_ENVD/II/2009 dated 2
February 2009. Social impact assessment was conducted for PHLM, PHLE, PRNE, ADPE and
KULE PT. MP Leidong West Indonesia. Some aspects were considered during assessment such
as residence, economy, social cultural and public health. Negative impacts and positive were
identified during assessment. It was noted that negative and positive issues from social
assessment results for all estates and mill were similar.
Negative impacts were identified such as:
 Inequitable recruitment in villages around the plantation – economics sector
 Transport of dusting originating from full fruit bunches – public health
 Noise coming from transport – social cultural
 Inequitable donation for community estate – social cultural
Positive impacts were identified such as:
 Regional development and increased population of the village economy
 Ease of road access
 Cattle population can be tended in the estate.
Data was collected through questionnaire, observation, interview with community leaders and local
government officials. Evidence that the social impact assessment was conducted together with
affected parties can be shown.
Minor nonconformity against Criterion 6.1 for PHLE
 Management plan for social impact assessment was determined and implemented, some
negative aspects were identified e.g. dusting, noises and uneven pay. However public
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participation was not involved during follow up of negative aspects.
 Public participation was not involved during follow up of social impact assessment in KULE
PT. MP Leidong West Indonesia.
Opportunity for improvement for KULE PT. MP Leidong West Indonesia
 Keeping records for social activities needs to be improved, e.g. there was no record
pertinent to education program and scholarship for community estate.
 Monitoring form for social impact was not implemented yet whereas their management plan
was conducted.
 Management plan for Social Impact Assessment for the area of sub district NA IX and X for
PRNE was not determined and implemented.
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 consultation with public was determined in the SOP-LWI-KOM.
Stage of communication and consultation with public was described in the procedure. RSPO
Officer was responsible to coordinate communication and consultation. Result of communication
and consultation was recorded in the ‘log book’.
Stakeholder and interested party list was made. Member of stake holder consist of district head,
forestry agency head, environmental agencies, social services, national land agencies, community
leaders, and religious figures and youth leaders. Stake holder list was made detail, address and
phone numbers were mentioned in the list.
Community aspirations were kept and recorded by the RSPO Officer from PT. SMART Tbk., e.g.
road work, donation, scholarship, etc., Records and interview result indicated that aspiration from
community was followed up by the organisation.
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
Procedure for complaints and grievances was determined and agreed by related parties
(community leaders, and religious figures and youth leaders). Procedure for complaint and
grievances was documented. All feedback can be informed to organisation and recorded in the
‘buku catatan keluh kesah’. There are no complaints from related parties.
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.
The organisation did not acquire any new land for more than 25 years. The organisation did not
acquire any new land for more than 25 years. Organisation has policy that there are not acquire for
new land. However procedure for identification and compensation calculation was determined.
Page 42 of 61
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
Payment for employees and employees of contractor was regulated according Keputusan
Gubernur Sumatera Utara Nomor 188.44/2555/KPTS/2010. Wage for employment also determined
in the Perjanjian Kerja Bersama (PKB). PKB was agreed between workers represented by the
labour union and organisation. PKB is in line with regulations by the Manpower District Agency.
Some items were regulated in the PKB such as working hours, wage, over time, sickness, leave,
maternity leave, work accident, etc. Validity of PKB is two years, and it was reviewed and approved
periodically.
Workers were classified as BHL (buruh harian lepas) and SKU (daily and monthly). Wage for all
workers were paid according regulations. Payments for workers were determined according daily
attendance. Daily attendance for workers was recorded and controlled by the Head of Assistant. It
was evident that the wage was paid according to working hours and daily attendance.
Public facilities were provided by the organisation i.e. residential facilities, day care, education,
clean water. All workers were provided leaving house and agreement for approval to stay in the
leaving house was made for workers.
Residential facilities were periodically maintained; schedule for periodic maintenance was evident
and implemented. Some of repair was conducted by the Engineering Division according to the
request from the worker.
In the work agreement with the contractor requirement to comply with workers regulations was
mentioned.
Opportunity for improvement for PHLE
 It could be considered to record name of the children in the day care unit.
 Action plan to supply clean water for Pondok I & II has been determined (i.e. to make
artesian well including their installation) but so far it has not been completed. Their
realization will be rechecked during the next audit.
Opportunity for improvement for ADPE
 Improve the way the organization explain its computation of daily wage for workers
classified as daily SKU (permanent worker).
Opportunity for improvement for PRNE
 It could be considered to improve format wage receipt to ensure that the receiver is correct
person.
 Control of employee housing needs to be improved, the function of some of houses parts
was changed.
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 PSM. Memorandum stated that the organisation respect to comply with
regulation pertinent to freedom of association. PKB (Perjanjian Kerja Bersama) also stated that
Page 43 of 61
freedom of association can be conducted by the workers through union labour. Union labour for
each estate was available and chairman and his administrator of PUK was selected by the
workers.
Some interviews were conducted with the Union Labour, e.g. Pak Jon. S – PUK Kanopan Ulu
Estate. Meeting with worker representatives was conducted regularly, it was recorded as well.
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 and mentioned in the ‘Surat Edaran No. 02/SE
HRDV/03/2009’ and the PKB (Perjanjian Kerja Bersama). List of worker and related document was
verified and there is no worker under 18 years old. According to observation in the estates and mill,
there is no worker under 18 years old.
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.
Policy for discrimination was determined by the organisation, and all discrimination is prohibited for
all area in the estates and mill. PKB (Perjanjian Kerja Bersama) also mentioned ban of
discrimination for all worker in the organisation. Worker list for the estates and mill mentioned all
workers from different back grounds (race, religion, gender, etc).
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.
Policy for sexual harassment and violence was determined in the 145/CEO1-SE/04/2010 and also
in PKB. Communication to all workers pertinent to prevent sexual harassment and violence was
conducted by the organisation, and it was complied with the UU No. 13Tahun 2003 about workers
at North Sumatra. Communication was conducted on 17 May 2010 and attended by the gender
committee team, employee’s wife and RSPO officer.
Complaint handling procedure for sexual harassment was determined. All complaints can be
issued verbal and or written and informed to all administrator and Estate/Mill Manager. Complaints
were identified by Factory Manager and reported to RC – Region Controller, VPA – Vice President
of Agronomy and HR Operations organisation. An interview with workers was conducted related to
implementation policy of ‘no sexual harassment and violence’. It was concluded that there was no
sexual harassment and violence within the organisation.
Criterion 6.10 Growers and mills deal fairly and transparently with smallholders and other
local business.
There was no transaction with smallholders; therefore criterion 6.10 indicator major 1 & 2 was not
applicable. Some local businesses were involved to growers and mills. Local business were
selected and appointed by Head Office. Local businesses were supported for growers and mills,
main supports were pertinent to procurement spare parts and vehicle maintenance.
Criterion 6.11 Growers and millers contribute to local sustainable development wherever
appropriate.
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Records of organisation contribution to regional development were evident, among either levied in
region, agreement contract, and social assistance list.
Some activities were conducted by the local contractors such as building houses, road
maintenance (road hardening), etc. Agreement contract with local supplier was evident.
CSR program was provided by the organisation and deployed in to CSR program for each estate
and mill. Activity of CSR was identified by the estate/mills. Budget yearly was provided and their
realization was monitored.
PRINCIPLES 7: RESPONSIBLE DEVELOPMENT OF NEW PLANTINGS
Criterion 7.1 A comprehensive and participatory independent social and environmental
impact assessment is undertaken prior to establishing new plantings or operations, or
expanding existing ones, and the results incorporated into planning, management and
operations.
There was no new planting included in PT. SMART Tbk. plantation and supply bases area.
Criterion 7.2 Soils surveys and topographic information are used for site planning in the
establishment of new plantings, and the results are incorporated into plans and operations.
Criterion 7.3 New plantings since November 2005, have not replaced primary forest or any
area required to maintain or enhance one or more High Conservation Values.
Criterion 7.4 Excessive planting on steep train and/or marginal and fragile soils, is avoided.
Criterion 7.5 No new planting are established on local peoples’ land without their free, prior
and informed consent, dealt with through a documented system that enables indigenous
peoples, local communities and other stakeholders to express their views through their
own representative institutions.
Criterion 7.6 Local people are compensated for any agreed land acquisition and
relinquishment of rights, subject to their free, prior and informed consent and negotiated
agreement.
Criterion 7.7 Use of fire in the preparation of new plantings is avoided other than in specific
situations, as identified in the ASEAN guidelines or other regional best practice.
Page 45 of 61
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. Innovation projects from Assistant Level were reviewed and
evaluated to be nominated to the higher conference level. The innovation project then shared to
other estates.
Evidences of application of the innovation project were sighted for the mill and all estates:
 PHLE: clean housing project and stretcher for reducing damage of the cover crop seed.
 KULE PT. MP Leidong West Indonesia: use of tire covers for cart during rainy season and
installation of safety blade for road grader unit.
 ADPE: tools making for cleaning up weeds and installation of safety blade for road grader
unit. Noted also there was also new water gate design which was still under study for year
2010.
 PRNE: three in one bag for fertilizing dosing to ensure exact dosage and installation of
safety blade for road grader unit.
 PHLM: automatic de-pericarper draft control to achieve consistent kernel loss in fibre
cyclone and installation of resin trap to minimize resin loss.
The estates which were certified to ISO 14001: 2004, continually set environmental management
objective and target which were supported by environmental management program: PHLE and
PRNE. Internal environmental management audit were performed for PHLE and PRNE and their
findings were followed up. The mill which implemented and was certified to ISO 9001:2008 had set
their quality objectives. Internal quality management audit was performed for the mill and its
findings were followed up. Regular management review meeting was held to evaluate the
adequacy and effectiveness of the management system.
Several rounds of audit were performed covering all operation areas including operation (Operation
Internal Audit – OIA), agronomy (AAA) and manufacturing (MAA) for all the estates and mill.
Negative findings identified during audit appeared to be properly followed up directly monitored by
RC/PC and VPA/VPM.
RSPO internal audit has been conducted on April 13-15, 2010 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.
Opportunity for improvement – for the mill and all estates
 It could be considered to establish standard methodology for innovation system where it
comprehensively consider environmental aspect, occupational health and safety hazard,
social aspect, operations as well as financial.
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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.
This report was prepared by: Ria Gloria, Inge Triwulandari, Sigit Yulianto and Fadjar Deniswara
Page 47 of 61
Appendix ‘A’ – Audit Record
Audit Team Leader
: Ria Gloria
Auditors
: Inge Triwulandari, Sigit Yulianto, Fadjar Deniswara
Observers/Technical Specialist : Resit Sözer, Andri Novi
Applicable Statutory/Regulatory/Standards
requirements (to be identified by the client)
Day
Auditor
Audit meetings plus functions/ processes/ areas/ *shifts audited:
21.06.2010
Day 1
All
Opening meeting
PHLE
Inge
Sigit
Ria
Document review and site visit:
Principle 1: Criterion 1.2
Principle 2: Criterion 2.1, 2.2, 2.3
Principle 4: Criterion 4.7, 4.8
Principle 4: Criterion 4.1, 4.2, 4.3, 4.4, 4.5, 4.6
Principle 5: Criterion 5.1, 5.3, 5.4, 5.5
Resit
Sözer
Document review: Report of HCV assessment
Overview to site
Inge &
Resit
Sözer
PHLM & PHLE
Denis &
Andri
Novi
Document review and interview with employees:
Principle 6: Criterion 6.1, 6.2, 6.3, 6.4, 6.5, 6.6, 6.7, 6.8, 6.9, 6.11
Interview with labour union
Interview with employees
Denis &
Andri
Novi
Interview with local community
All
QEF08C.07 / Issue Date: 2008-Mar-11
Present audit findings for PHLE and PHLM
© SAI Global Limited Copyright 2008 - ABN 67 050 611 642
Page 48 of 61
22.06.2010
Day 2
KULE PT. MP Leidong West Indonesia
Inge
Sigit
Ria
Resit
Sözer
Overview to site
Inge &
Resit
Sözer
Denis &
Andri
Novi
Denis &
Andri
Novi
All
Present audit findings for KULE PT. MP Leidong West Indonesia
All
Interview with NGO: Lentera Rakyat
23.06.2010
Day 3
ADPE
Inge
Sigit
Page 49 of 61
Ria
Resit
Sözer
Overview to site
Inge &
Resit
Sözer
Denis &
Andri
Novi
Denis &
Andri
Novi
All
24.06.2010
Present audit findings for ADPE
Day 5
PRNE
Inge
Sigit
Ria
Resit
Sözer
Overview to site
Inge &
Resit
Sözer
Denis &
Andri
Novi
Page 50 of 61
All applicable requirements of relevant standards are covered during the audit of the ‘Functions/Processes/Areas. * Enter shift
Denis &
Andri
Novi
All
25.06.2010
Present audit findings for PRNE
Day 6
PHLM
Inge
Sigit
Ria
PHLM, PHLE, PRNE, ADPE, KULE
Denis
Confirmation of response to the interested parties
Ria &
Denis
Verification of SMART response to report from NGO: Lentera Rakyat
Inge,
Sigit,
Ria
Present audit findings for PHLM
Ria,
Inge,
Sigit,
Denis
Final closing meeting
details only where applicable.
Page 51 of 61
Appendix ‘B’ – Nonconformities, Corrective Actions and Observations Summary
Minor Nonconformities
RSPO
Indicator
Details
Corrective action
2.1
Minor nonconformity against Criterion 2.1 for Revise SOP for identifying,
Mill and all Estates
reviewing,
applying
and
evaluating
compliance
with
 Mechanism for conducting evaluation of applicable laws and regulations
compliance with law and regulation has not including those related to land
clearly described in the SOP for legal and status, occupational health and
other requirements for PHLE, KULE PT. MP safety, environmental, labour,
Leidong West Indonesia, ADPE, and PHLM. agricultural practice, and mill
by
including
Some of the status of compliance stated for operation
to
evaluate
PHLE, KULE PT. MP Leidong West mechanism
Indonesia, ADPE, PRNE and PHLM were compliance with legal and other
requirements.
not complete and accurate, e.g.:
o Not all relevant/related law and
regulation were listed in the evaluation Re-evaluate status of compliance
of compliance although in practice they with
legal
and
other
were already implemented, e.g. requirements.
PP7/99, Kepres 32/90, and UU32/2009
and Local Regulation for Labuhan Batu
Utara – KULE PT. MP Leidong West
Indonesia.
o Some of the status was not accurate,
e.g. legal demarcation of KULE PT. MP
Leidong West Indonesia Division 4 & 5,
DPPL documents which still in approval
process – KULE PT. MP Leidong West
Indonesia, Permentan 14/2004 ADPE.
o Evaluation of compliance against
regulation UU No 3 tahun 1993 tentang
JAMSOSTEK and PP No. 28/2002
tentang JAMSOSTEK were performed
but not specific to all requirements in
the regulation.
2.2
Minor nonconformity against Criterion 2.2 for
KULE PT. MP Leidong West Indonesia
 Evidence of maintenance of several
boundary pegs required by HGU KULE PT.
MP Leidong West Indonesia Division 4&5
were not available. Evidence was available
only for boundary pegs VI, VII, and XXXIV.
Establish communication with
surrounding community in order
to have access for maintaining
boundary pegs and to provide
evidence of maintenance of
boundary pegs
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2.2
Minor nonconformity against Criterion 2.2 for Map to ensure pegs position for
PRNE
PRNE Division 3 will be gotten
 Boundary pegs for PRNE Division 3 were form previous owner.
sighted and maintained, however for several
pegs position were not clear against the
position required by HGU map, e.g.
boundary pegs #23 and #24.
2.2
Minor nonconformity against Criterion 2.2 for Communicate to community:
all Estates
o All Estate Managers develop
 Conflict resolution mechanism documented
program to visit the
as SOP (SOP for conflict resolution and land
community
acquisition) have been disseminated and o All Estate Staffs implement
approved by Camat/Kades and BPN
the program
Labuhan Batu Section Head of Conflict and
Dispute, however community/community
representatives (e.g. community leader,
religion leader, youth leader) have not been
involved.
4.2
Minor nonconformity against Criterion 4.2 for Coordination with VPA Secretary
PRNE and ADPE
 According to the internal memo, fertilising is
prohibited over a 5-palm wide buffer strip
along the river and the main drain. However,
the memo does not mention the
requirements in regards to fertilising of the
area around collection drain.
 There was no evidence that 5-palm wide
buffer strip along the river and the main drain
were not sprayed by fertiliser during aerial
application (i.e. no aerial application map
could be demonstrated during the audit).
4.6
PHLE and KULE PT. MP Leidong West
Indonesia:
 There was no evidence that training of
agrochemical spraying for some newest
employees i.e. Supendi (PHLE) and J. Maremare (KULE PT. MP Leidong West
Indonesia) although PPE using and MSDS
understanding have been communicated.


Develop training program for
spraying training for old or
new sprayer in all Estates
Implement the training
program
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4.7
Minor nonconformity against Criterion 4.7 for Unsafe acts and conditions have
Mill and all Estates:
been reported to Mill and Estates
Several unsafe acts and conditions were and are being addressed
observed during the audit, e.g.:
 The compressor tanks (with the pressure 10
Bar) were not provided with the name plate
giving indication of maximum pressure and
working pressure. Furthermore, safety valve
testing was not performed regularly.
 Transportation workshop was not provided
with torsion wrench.
 The drainage system in several housing area
was not good nor working effectively.
4.7
all Estates:
Several unsafe acts and conditions were
 Most supervisors were using motor cycle for
transportation inside the estate and not
wearing helmet and the motorcycles were
not provided with the back mirror.
 The harvesting workers were not provided
with the helmet to prevent hazard and risk of
fall object (FFB).


Display signage to fulfil
regulation of traffic
Unsafe acts and conditions
have been reported to Mill
and Estates and are being
addressed
4.7
PHLM:
been reported to Estate and are
Several unsafe acts and conditions were being addressed
 In the receiving of FFB, the license of truck
driver was already expired. In the area of
boiler, the platform was not provided with
border/cover. The cover machine of WTR4No 05 was not properly installed after repair.
4.7
PHLE:
 The laboratory test of fresh water for
employee housing still did not meet the
requirements.


Re-analysis of fresh water
sample to external laboratory
Install water treatment plant
when result of re-analysis is
still
not
meeting
the
requirements
Page 54 of 61
4.7
PRNE:
Several unsafe acts and unsafe conditions were being addressed
 The vertical stair and platform of water tower
was not provided with the fall protection
cover.
4.7
ADPE:
Several unsafe acts and unsafe conditions were being addressed
 The design of bridge of for harvester (titian
panen) did not adequately provide fall
protection hazard and risk (too narrow and
without cover on both sides).
4.7
KULE PT. MP Leidong West Indonesia:
 Under repair (un-proper) devices were not
tagged and locked e.g. NEW HOLLAND
WTR 4.02 and Scissor lifter.
 The laboratory test of fresh water for
employee housing still did not meet the
requirements.
 The vertical stair and platform of water tower
was not provided with the fall protection
cover.
4.7



Unsafe acts and conditions
have been reported to Estate
and are being addressed
Re-analysis of fresh water
sample to external laboratory
Install water treatment plant
when result of re-analysis is
still
not
meeting
the
requirements
Minor nonconformity against Criterion 4.7:
Laboratory
check
will
be
nd
 The parameters for annual medical check up conducted in 2 semester 2010
consist only of physical check. Laboratory
check was not performed only to the
employees with specific exposure hazard,
e.g. sprayer, chemical warehouse and
fertilizer warehouse workers and employees
exposed to noise hazard.
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4.7
Revise the risk assessment
 In general the risk assessment has been
conducted by Mill and all Estates, however
several hazard and risk were missing during
risk assessment, e.g.: compressor operation
in estate workshop and manual handling of
fertilizer warehouse workers. One of risk
control for welding process is by establishing
work instruction however the content of work
instruction did not mention the risk control of
welding processes appropriately.
4.7
Check
the
readiness
 The fire extinguisher for fuel tank was put emergency equipment.
inside and the door was locked (for PRNE).
The fire hose reel of hydrant was locked
(PHLM) and the key was kept by security
where far from the location. The emergency
shower and eyewash of central warehouse
(KULE PT. MP Leidong West Indonesia) was
placed outside where the chemical handling
performed. In case of an emergency, this
equipment will be difficult to be accessed
and utilized.
5.2
Minor nonconformity against Criterion 5.2 for HCV identification is to be
PRNE:
conducted comprehensive and
 Scope of area for PRNE Division 3 HCV cover all areas.
identification was not included all area
within legal boundary, and this was not
described in the report.
5.4
Minor nonconformity against Criterion 5.4 for Analyse diesel fuel consumption
all Estates:
/ FFB tonnage
 Record of diesel fuel consumption / FFB
tonnage and its analysis has not been
provided in PHLE. Efficiency of diesel fuel
consumption litre of diesel fuel / FFB
tonnage has not been analysed in ADPE and
PRNE.
6.1
Minor nonconformity against Criterion 6.1 for Communicate the management
PHLE:
plan for social impact to
 Management plan for social impact community
assessment
was
determined
and
implemented, some negative aspects
were identified e.g. dusting, noises and
uneven
paid.
However
public
participation was not involved during
follow up of negative aspects
of
Page 56 of 61
6.1
Minor nonconformity against Criterion 6.1 for Communicate the management
KULE PT. MP Leidong West Indonesia:
plan for social impact to
 Public participation was not involved community
during follow up of social impact
assessment in KULE PT. MP Leidong
West Indonesia.
6.1
Minor nonconformity against Criterion 6.1 for Social impact assessment form
ADPE:
is implemented
 Monitoring form for social impact was not
implemented
yet
whereas
their
management plan was conducted.
6.1
PRNE:
 Management plan for Social Impact
Assessment for area sub district NAIX
and X for PRNE was not determined and
implemented.
6.5
Minor nonconformity against Criterion 6.5 for Provide evidence of water supply
ADPE:
installation to Pondok I & II
 Action plan to supply clean water for
Pondok I & II was determined and will
plan to make artesian well including their
installation. Their realization will be
checked during the next audit.
Management plan for Social
Impact Assessment for area sub
district NAIX and X for PRNE is
to be implemented
Opportunities for improvement
1. 1.2 Opportunity for Improvement for ADPE:
 It could be considered to provide clear reference within ADPE SOP for stakeholder
communication and consultation, SOP/ADPE/KOM, for the list management documents and
its relevant stakeholders.
2. 4.3 Opportunity for improvement:
 Realisation of road maintenance has been recorded in ‘Kartu kerja kendaraan’ including
distance of heavy equipments use and total of diesel fuel use. It can be considered to record
distance of road maintained.
 Quality of river water has been analysed. It can be considered to analyse river water covering
parameters which were included in fertiliser content which were applied by airplane, e.g.
ammonia and phosphate.
 It is suggested to review and consider the use of boots for harvester and other small
maintenance activities workers instead to provide them with non-boot shoes.
 Consider to develop the checklist for inspection of contractor activities including health and
safety point of view.
Page 57 of 61

Currently, reporting and investigation of accident was limited to accident referred as loss time
accident. Consider to extent the accident investigation also to cover minor accidents (e.g. first
aid case).
5. 5.2 Opportunity for improvement for KULE PT. MP Leidong West Indonesia and PRNE:
 Based on interview with two supervisors from KULE PT. MP Leidong West Indonesia and
PRNE, it was informed that one protected fauna usually sighted at night, however the
monitoring activities has not involved employee who work in the night time (security and
patrol).
 It was noted referring to report of replanting that the land preparation for replanting was zero
burning. It can be considered to monitor contractor activity regarding zero burning to ensure
that land preparation for replanting was zero burning.
7. 6.1 Opportunity for improvement for KULE PT. MP Leidong West Indonesia:
 Keeping records for social activities needs to be improved, e.g. there was no record pertinent
to education program and scholarship for community estate.
8. 6.5 Opportunity for improvement for PHLE:
 It could be considered to record name of the children in the day care unit.
9. 6.5 Opportunity for improvement for ADPE:
 Improve the way the organization explain its computation of daily wage for workers classified
as daily SKU (permanent worker).
10. 6.5 Opportunity for improvement for PRNE:
 It could be considered to improve format wage receipt to ensure that the receiver is correct
person.
 Control of employee housing needs to be improved, the function of some of houses parts was
changed.
11. 8.1 Opportunity for improvement – for the mill and all estates:
 It could be considered to establish standard methodology for innovation system where it
comprehensively consider environmental aspect, occupational health and safety hazard,
social aspect, operations as well as financial.
Page 58 of 61
Appendix ‘C’ – Stakeholder’s issues and comment
Date and Time
Location
Interviewee









Status of workers was determined in the employment contract, and mentioned wage and working
hours.
Calculation of wage and over time was understood.
Above personnel have worked in the organisation more than 2 years.
Started work at 6.30 am to 02.00 pm.
Wage was paid according to employment contract and paid on time.
Accept the rice for his family every month
Organisation 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’.
Representative housing, and clean water and electricity provided by the organisation.
Date and Time
Location
Interviewee



















: 21 June 2010 at 14.00 – 17.00 pm
: Padang Halaban Estate and Mill
: Parnagabe – religious leaders Padang Halaban
Abu Rambe – society leaders Karang Anyar
Jamaludin – youth leaders Pulau Jantan
All gentlemen have lived around the estate is more than 10 years.
Community gardens (75%) have their own oil palm plantation and the rest work in the Padang
Halaban Estate.
Cows belonging to the community are allowed in the garden area.
Request for rental of heavy equipment for road repairs very quickly followed by estate.
Estate is very concerned about the environment around garden,
Employees wage 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.
Good response from estate in the event of a fire in the station Padang Halaban.
Date and Time
Location
Interviewee

: 21 June 2010 at 10.00 – 11.00 am
: Padang Halaban Estate and Mill
: Sinus, Lewi, Iwan (spraying)
: 22 June 2010 at 20.00 – 23.00 pm
: Hotel Rantau Prapat
: Amin Siahaan – LSM Lentera
Personnel protective equipment and work equipments were not provided by the organisation, e.g.
Helmet, glasses. In case any damage of equipment which the worker must be replaced.
Intimidation to workers e.g. snapped.
There are no communications about ‘premi’ and his manner of payment.
Fines: worker error is determined subjectively by the ‘mandor’ and his assistant without any
defence from worker.
Laborers forced to work sick
Salaries and reduced rice.
Sloping palm trees, affecting the usefulness – safety work.
Morning assembly workers (BHL) did not participate, directly lay offs.
Page 59 of 61





There are no school facilities for Padang Halaban Estate
There are no ambulances in the clinics.
Reduction of 0.5 kg rice per family.
Flood – pump, water discharged to community.
Water wells unfit for bathing and washing
Date and Time
Location
Interviewee





Some of resident work in the PT. SMART Estate.
No complaint from residents about wage.
There is no land conflict, Dusun Sikopi-kopi all around the SMART estates,
Good response from estate in case any request from community, e.g. road repair.
Date and Time
Location
Interviewee




: 23 June 2010 at 14.00 – 17.00 pm
: Adipati Ulu Estate
: H. Redoyaman – Religion Leader
Daud – Community Leader
Rollip Hasibuan – Community Leader
Some of resident work in the PT. SMART Estate.
No complaint from residents about wage or other aspects
Good response from estate in case any request from community, e.g. road repair.
Date and Time
Location
Interviewee





: 22 June 2010 at 14.00 – 17.00 pm
: Kanopan Ulu Estate PT. MP Leidong West Indonesia
: Hutabarat – Community Leader Desa Sialang Taji
Nasim – Religion Leader Desa Sikopi-kopi
Budi – Youth Leader Aek Kanopan
: 24 June 2010 at 14.00 – 17.00 pm
: Pernantian Estate
: M. Erwin Wijaya – Youth Leader
Samsul Tanjung – Religion Leader
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.
Page 60 of 61
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 61 of 61

Audit Report

Transcription

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