roundtable on sustainable palm oil...roundtable on sustainable palm oil supply chain 1st...

Roundtable on Sustainable Palm Oil

Supply Chain 1st Surveillance Audit Report Report no.: SCCS_ASA1-503 15017

Assessment against RSPO Supply Chain Certification Systems 2014

PT Dharma Satya Nusantara Tbk. Labanan – Storage Facility

Sapta Mulia Building, Jl. Rawa Gelam V Kav.OR/3B, Jakarta Industrial Estate Pulogadung (Kawasan Industri Pulogadung), DKI Jakarta - Indonesia

Date of 1st surveillance audit: April 13-14, 2016 Report prepared by:

Riki Harpan (RSPO Lead Auditor)

Certification decision by:

Abdul Qohar (Head of Certification Body of PT TUV Rheinland Ind onesia)

Certification Body: PT TUV Rheinland Indonesia

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

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

www.tuv.com/id

TABLE OF CONTENTS

1.0 SCOPE OF SUPPLY CHAIN CERTIFICATION ASSESSMENT 3

1.1 Executive Summary and Scope of Assessment 3

1.2 Certification Details 3

1.3 Organisational Information / Contact Person 3

1.4 Actual production volumes and projected outputs. 4

1.5 Summary of Previous Assessment 4

2.0 ASSESSMENT PROCESS 6

2.1 Certification Body 6

2.2 Qualifications of Lead Assessor and Assessment Team 6

2.3 Assessment Methodology & Agenda 7

3.0 ASSESSMENT FINDINGS 9

3.1 Description of Supply Chain Management System 9

3.2 Identified Non-conformances against RSPO SCCS Requirements, Corrective Actions Taken and Auditors Conclusions 19

3.3 Conclusion and Recommendation for RSPO Supply Chain Certification 19

4.0 CERTIFIED ORGANISATION’S ACKNOWLEDGEMENT OF INT ERNAL

RESPONSIBILITY 20

4.1 Date of Next Surveillance Visit 20

4.2 Acknowledgements of Internal Responsibility and Formal Sign-Off by Client 20

APPENDICES 21

Appendix 1: Details of Supply Chain Certification Certificate 21

Appendix 2: List of Abbreviations 23

Appendix 3: Observations and Opportunities for Improvement 23

Appendix 4: Supply Chain Certification Audit Closing Meeting Summary 24

Appendix 5: List of Certified List of Suppliers and Buyers 25

RSPO Supply Chain Certification 1st Surveillance Audit Report

PT Dharma Satya Nusantara Tbk – Labanan Storage Fac ility East Kalimantan, Indonesia

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QMF: RSPO-007c-13 rev.2

1.0 SCOPE OF SUPPLY CHAIN CERTIFICATION ASSESSMENT

1.1 Executive Summary and Scope of Assessment

The operations of PT Dharma Satya Nusantara Tbk – Labanan Storage Facility (PT DSN Labanan) were assessed against Module B and Module C of the RSPO Supply Chain Certification Systems (SCCS) doc-ument (November 2014). The scope of the Supply Chain Certification System assessment covers the im-plementation of the Segregation and Mass Balance supply chain model of PT DSN Labanan. This is not a multi-site certification. The 1st surveillance audit was carried out on April 13 to 14, 2016 and RSPO SCC systems has established by the facility has been complied and there is 1 (one) non-conformity was found during surveillance audit.

1.2 Certification Details The details of RSPO certification of PT DSN Labanan. are as per the table below Table 1: RSPO Certification details of PT DSN Laban an.

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

1.3 Organisational Information / Contact Person

Contacts details of the company are as follows:

RSPO Membership no.: 1-0135-12-000-00

RSPO Certificate no.: 824 503 15017

Date of RSPO certificate & validity: June 10, 2015 until June 09, 2020

Date of RSPO certification audit: May 28 to 29, 201 5

E-Trace RSPO Member ID: RSPO_PO1000002605

Company Name: PT Dharma Satya Nusantara Tbk - Laban an Storage Facility

Address:

Head Office : Sapta Mulia Building, Jl. Rawa Gelam V Kav.OR/3B, Jakarta Industrial Estate Pulogadung (Kawasan Industri Pulogadung), DKI Jakarta Province, Indonesia Facility : Jl. Petani 2, Labanan Village, Teluk Bayur Sub District, Berau Dis- trict, East Kalimantan Province, Indonesia

Contact Person: Agustinus Triwibowo

Position: Management Representative

Telephone: Head Office : Tel : +62 21 4618135, Fax : +62 21 4606942 Facility : 0813 4631 8158

Email: [email protected]; [email protected]



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1.4 Actual production volumes and projected outputs .

Table 3: Certified tonnages claimed, certified tonn ages purchased or sold, total and projected from PT DSN Labanan for period of April 2015 to Mar ch 2016.

Amount (MT)

Certified tonnages claimed 0

Certified tonnages sold* 0

Certified tonnage sold under Green Palm and UTZ System 0

Certified tonnages received 203,089.864**

*The company has sold certified CPO and PKO and claimed as non-certified products (downgraded)

**excluding stock available

Table 4: Records of Certified Material Recived for Period of April 2015 to March 2016

Supplier RSPO Certificate Number

Product UTZ

Number MT

Opening Stock from PKS 1 1,331.413

PT Swakarsa Sinarsen-tosa

MUTU-RSPO/050 CPO - MB RSPO_PO1000000354 13,137

Opening Stock from PKS 2, PKS 3, and PKS 4 728.365

PT Dharma Satya Nusan-tara Tbk. (PKS 2)

MUTU-RSPO/056 CPO – IP* RSPO_PO1000000939

181,380.679 PT Dharma Satya Nusan-tara Tbk. (PKS 3)

MUTU-RSPO/055 CPO – IP* RSPO_PO1000000950

PT Dharma Satya Nusan-tara Tbk. (PKS 4)

MUTU-RSPO/060 CPO - MB RSPO_PO1000002088

Opening Stock from KCP 2,645.552

PT Dharma Satya Nusan-tara Tbk – Kernel Crush-ing Plant (KCP)

BMT-RSPO-000569 PKO - MB RSPO_PO1000002087 8,572.185

Total 207,795.194

*All CPO – IP will be downgraded to be SG certified materials due to limited storage facilities to support IP implementation

Table 5: Records of Palm Oil Product Sold for Peri od of April 2015 to March 2016

Buyer RSPO Certificate Number Product UTZ Number Volume

Total 0

1.5 Summary of Previous Assessment

The first certification audit was conducted on May 28 to 29, 2015. During certification audit the implemen-tation of RSPO supply chain certification was well. There were no non conformities were raised certifica-



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tion audit. The company could demonstate the system has fulfilled the RSPO requirements and was rec-ommended as SCCS certified company.



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2.0 ASSESSMENT PROCESS

2.1 Certification Body PT TUV Rheinland Indonesia is member of Group TÜV Rheinland Group, a global leader in independent testing and assessment services. The TÜV Rheinland Group was established in 1872 with offices located in over 490 locations in 62 countries on all five continents. PT TUV Rheinland Indonesia offers certifica-tion for a wide range of management systems according to established international standards including ISO 9001, ISO 14001, OHSAS 18001, SA 8000, RSPO (RSPO-ACC-013 dated on June 06, 2014), ISPO (LS-P&K-005-ISPO dated on May 10, 2012), ISCC, Timber Legality Verification System (SVLK), as well as CDM Validations and Verifications. PT TUV Rheinland Indonesia’s office is located in Jakarta, Indone-sia.

2.2 Qualifications of Lead Assessor and Assessment Team

Name Position Qualifications / Experience

Riki Harpan Lead Audi-tor

Education: 2001 – State University of Jakarta (Universitas Negeri Jakarta) Bach-elor degree majoring in Germany language education 2010 – Budi Luhur University (Universitas Budi Luhur) Magisterial Management (not passed). Trainings attended : � January 19 to 20, 2015 – Training for Auditor RSPO Supply Chain

Certification Standard and Systems from David Ogg and Partners Ltd.

� December 12 to 16, 2014 – Training for Auditor CoC PEFC-IFCC from Indonesian Forestry Certification Cooperation (IFCC)

� September 29 until October 9, 2104 – Training for Timber Legality Verification (VLK) Auditor Mandatory from Ministry of Forestry

� September 28, 2014 – The Introduction of ISO 9001:2008 Work-shop with AJA Academy

� November 27, 2013 – FSC/PEFC-Chain of Custody Standard with Jobst Dustersiek (Lead Auditor QM/FSC/PEFC System LGA Inter-Cert GmbH

� August 27 to 28, 2012 - FSC/PEFC-Chain of Custody Standard with Jobst Dustersiek (Lead Auditor QM/FSC/PEFC System LGA InterCert GmbH

� May 17, 2012 - International Sustainability & Carbon Certification (ISCC) Sales Training with Dr. Rüdiger Meier Product responsible for sustainable Biomass and FSC TÜV Rheinland Cert GmbH at PT TUV Rheinland Indonesia

� August 18 to 19, 2011 – The Awareness Training for Health, Safety and Environmental Management Systems at PT TUV Rheinland In-donesia

� 2011 – Training for FSC/PEFC-Chain of Custody Standard with Mr. Klaus Schatt (LGA InterCert Gemany) at PT TUV Rheinland Indo-nesia

� 2011 – Training for FSC/PEFC-Forest Management Standard with Mr. Klaus Schatt (LGA InterCert Gemany) at PT TUV Rheinland In-donesia

� January 18 to 19, 2011 – Awareness Training Roundtable on Sus-tainable Palm Oil (RSPO) with Mrs. Dian S. Soeminta (Lead Auditor RSPO of TÜV Rheinland Indonesia) at PT TUV Rheinland Indone-sia.

� March 04, 2012 – Pelatihan Pengenalan SNI ISO/IEC 17021:2008 from National Standardization Agency of Indonesia (BSNI)



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� November 30 to December 04, 2009 – Training for Quality Man-agement Systems (QMS) Auditor/Lead Auditor at PT TUV Rhein-land Indonesia

Working experience: 2007 – 2012 Technical Support Assistance acting as Document controller for Quality Management System (QMS), Forestry Certification and Agriculture Cer-tification Department. 2012 – now VLO Auditor, VLK Trainee Auditor, CoC FSC Auditor, CoC PEFC-IFCC Auditor, RSPO SCCS Auditor, V-Legal Inspector and Facilitator Expert Panel I (pre-assessment) for Sustainable Forest Management (PHTL) & Chain of Custody (CoC) LEI certification.

2.3 Assessment Methodology & Agenda The supply chain 1st surveillance audit was conducted on April 13 to 14, 2016 as per the assessment program below. The 1st surveillance audit was carried out in accordance with PT TUV Rheinland Indone-sia’s RSPO audit procedure as well as the RSPO Supply Chain Certification document. An on-site assessment was conducted and the assessment team carried out field and document as-sessments of compliance to RSPO Supply Chain Certification System requirements. The company proposed the correction and corrective action for all identified non conformities raised to the certification body 30 days after the closing meeting. Verification of closure of non-conformances was conducted 1 month after the closing meeting of the 1st surveillance audit. The 1st surveillance agenda is as explained below. 1st Surveillance audit Agenda.

Date From until Organization Unit

Processes Standard

13.04.2016 11.00 12.00

Management Representative

RSPO SCC team

Opening meeting Management commitment Verification for previous audit find-ings

13.04.2016 12.00 13.00 Break

13.04.2016 13.00 17.00


RSPO SCC team

Opening meeting Management commitment Verification for previous audit find-ings Documentation system Purchasing and goods in Outsourcing activities Sales and good out Registration of transaction Training Record keeping Claims Complaints Management review

RSPO SCCS 5.1 RSPO SCCS 5.2 RSPO SCCS 5.3 RSPO SCCS 5.4 RSPO SCCS 5.5 RSPO SCCS 5.6 RSPO SCCS 5.7 RSPO SCCS 5.8 RSPO SCCS 5.9 RPSO SCCS 5.10 RSPO SCCS 5.11 RSPO SCCS 5.12 RSPO SCCS 5.13 General Supply Chain Requirement

14.04.2016 08.00 10.00 RSPO SCC team

Mill Tour Interview with workers Production process

14.04.2016 10.00 11.00 RSPO SCC RSPO SCCS Module B (SG) RSPO SCCS B.1;B.2



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team - Supply chain requirements - Processing

RSPO SCCS B.3

14.04.2016 11.00 12.00 RSPO SCC team

RSPO SCCS Module C (MB) Record keeping Processing Mass balance system Conversion ratio Yield schemes

RSPO SCCS C.1; C.2 RSPO SCCS C.3 RSPO SCCS C.4; C.5 RSPO SCCS C.6 RSPO SCCS C.7

14.04.2016 12.00 13.00 Break

14.04.2016 13.00 13.30

Preparing for closing meeting

14.04.2016 13.30 14.30


RSPO SCC team

Closing Meeting



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3.0 ASSESSMENT FINDINGS PT DSN Labanan Tbk is a group of oil palm plantation and palm oil mills companies. PT DSN sold CPO, PK and PKO product to their buyer. PT Dharma satya Nusantra Tbk rent storage tank from PT Swak-arsa Sinarsentosa to store CPO before shipped to appropriate buyer. PT Swakarsa Sinarsentosa -Labanan is a bulking station owned by PT Swakarsa Sinarsentosa (the land use right no. 09 dated on Ju-

ly 11, 2008 with total area of 24,937 m2 at Labanan Jaya village with validity until July 10, 2028 and the

land use right No.01 dated on December 23, 2003 with total area of 13,140 m2 at Labanan Jaya village with validity until December 15, 2023). The facility was commissioned in year 2007 with CPO storage units as much as 8 unit (capacity for each tank/storage unit: 2,000 MT) and palm kernel oil (PKO) storage units as much as 2 unit (capacity for each tank/storage: 2,000 MT). PT Dharma Satya Nusantara Labanan Storage Facility applies to TUV Rheinland Indonesia to certi-fy SCCS with selected Module B (Segregation) and Module C (Mass Balance) refer to RSPO SCCS year 2014. The following is a description of the company’s supply chain management system according to the RSPO SCCS requirements.

3.1 Description of Supply Chain Management System

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

Section 5: General Chain of Custody System Requirements for the Supply Chain

5.1. Applicability of the General Chain of Custody System Requirements for the supply chain

Findings: Management PT DSN Labanan still has commitment to implement RSPO SCCS and has a com-plete standard operation manual and standard operation procedure about supply chain for all op-eration units. All production process was conducted internally. Considering the nature of incoming material, company decide to implement Segregation (SG) and Mass Balance system (Module B &C). The company decided to implement physical segregation for incoming purchased SG material with dedicated tank for SG storage different with MB and non-certified storage. The company purchased IP material, downgraded and claimed as SG material due to limited storage facilities to support IP implementation. During 1st surveillance audit the company still not sold certified material. All certified material will be downgraded to non-certified material. PT DSN Labanan has registered as RSPO membership with number 1-0135-12-000-00 and in e-trace with member ID RSPO_PO1000002605. Compliance status: Full Compliance

5.2. Supply Chain Model

Findings: The company decided to implement both SG and MB as their SCCS models and implement physi-cal segregation for incoming purchased IP material. The company has prepared a mechanism and



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procedures for physical segregation including the location of dedicated main hole drop tank, stor-age tank and bin. During surveillance audit, the company still not claimed certified material as certified product. All certified material sold as non-certified products (downgraded). Compliance status: Full Compliance

5.3.Documented procedures

Findings: The company has set the standard operation procedure to support implementation of RSPO supply chain from incoming material until delivery/dispatch material. All required procedure and documen-tation of RSPO SCC standard have been fulfilled. The procedures that will be used for RSPO SCC systems are

1. Quality guidelines (PDM-AGR-001-R04) issued May 01, 2015 2. Bulking station procedure (SOP-AGR-004-R01) issued April 10, 2014 3. Conflict resolution procedure (SOP-AGR-007-R00) issued February 15, 2012 4. Training procedure (SOP-AGR-016-R00) issued February 15, 2013 5. Control of production process procedure (SOP-AGR-027-R02) issued January 04, 2016 6. Dispatch of CPO, PKO and PK procedure (SOP-AGR-028-R02) issued January 04, 2016 7. Document control procedure (SOP-AGR-036-R03) issued August 11, 2014 8. Control of non-conforming products procedure (SOP-AGR-038-R00) issued February 15, 2013 9. Corrective and preventive acion procedure (SOP-AGR-039-R00) issued January 04, 2016 10. Management review meeting procedure (SOP-AGR-041-R00) issued February 15, 2013 11. Customer satisfaction procedure (SOP-AGR-047-R00) issues issued February 15, 2014 12. Sales of CPO, PKO, PK procedure (SOP-AGR-048-R00) issued on April 3, 2015 Some of work instruction also has been created to described detail process of RSPO SCC systems implementation such as:

a. Traceability of CPO and PK IP & SG work instruction (IK-AGR-MS-08-R01) issued on July 01, 2015

b. Traceability of CPO, PKO and PK MB work instruction (IK-AGR-MS-04-R05) issued on March 01, 2016

c. Receipt and weighing of CPO/CPKO work instruction (IK-AGR-COM-01-R02) issued on July 01, 2015

d. Loading of CPO/CPKO to barge work instruction (IK-AGR-COM-03-R02) issued on July 01, 2015

All activities from CPO recived, storage until dispatch were recorded on “working sheet oil stocking for- mat” everyday. Company also makes monthly report for CPO received and sold. All records are keep maintained properly, some records was sight during main aduit such as weighbridge (WB) and expedition slip records, Unloading material (CPO) book, Bill of Landing. There is product transfer document and summary of weighbridge notes including the manifest and invoice docu-ments to inform about all transaction from Labanan Bulking. The name of the person having overall responsibility for and authority over the implementation of these requirements and compliance with all applicable requirements has been assigned at the au-dit time. There is Memorandum No. 0002/DIR/JKT/VI/15 dated May 29, 2015 about Management Representative (MR) assignment letter for RSPO (P&C and SCCS), ISPO, ISCC, and ISO i.e. Mr. Agustinus Triwibowo assited by Hadi Santoso as Bulking Head (based on internal correspondence No. 0065/MS/VIII/2013 dated July 01, 2013 for implementation of RSPO SCC in Labanan Storage Unit. Compliance status: Full Compliance



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5.4. Purchasing and goods in

Findings: PT DSN Labanan Storage has mechanism to control the receipt of certified material in Receipt and weighing of CPO/CPKO work instruction (IK-AGR-COM-01-R02), Traceability of CPO and PK IP & SG work instruction (IK-AGR-MS-08-R01) issued on July 01, 2015 and Traceability of CPO, PKO and PK MB work instruction (IK-AGR-MS-04-R05) issued on March 01, 2016. The verification process of delivery documentation starts from slip/note (FM-DIS-01-R02). On the slip already stated the status of material by using MB or IP stamp. Security team will check con-formity all information in the delivery notes including including wet stamp (selection model IP or MB) from the origin palm oil mill, check the mill name in the memorandum to ensure certificate status. The company assigned a person that has responsibility to check and ensure certified ma-terial both quality and quantity as per weighbridge and expedition. All weighbridge (WB) and de-livery note were keeping maintained by administration section. Commercial depatement will up-date material stock information to monitor the product and will check the validity of supplier’s certifi-cate via the list of RSPO SCC facilities on the RSPO website (www.rspo.org) or the RSPO IT sys-tem within a reasonable timeframe. When receiving RSPO certified material, weighbridge operators will verify the claimed category of the material under MB or SG model (downgraded from IP material), name of supplier (supplier has RSPO certificate or not), ensure quality and quantity of products, ensure number of seal (red and yellow). Weightbridge operator informed to truck driver to go to main hole drop tank, the person in charge for storage tank will instruct the driver to unloading the SG material from certified mill (Mill 2 & 3 PT DSN Tbk) in hole 1, 2, 3, and 4 that will flow to dedicated storage tank 03, 04 and 05 for physical segregation. During field verification and document check of receipt material has been found that in the work in-struction related with certified material receipt still not regulated about the marking of MB or SG claim in weighbridge ticket. The implementation of stamp identification also not consistent. Some documents of certified material receipt are still not stamped with specific claims MB or SG. Compliance status: Non-Compliance NCR - RSPO SCCS00011 In work instruction of Traceability of CPO and PK IP & SG (IK-AGR-MS-08-R01) issued on July 01, 2015 and Traceability of CPO, PKO and PK MB (IK-AGR-MS-04-R05) issued on March 01, 2016 regarding the receipt of raw material, still not stated and regulated that the weighbridge ticket should be identified with specific claims MB or SG by using wet stamp. During verification and documentation check of weighbridge ticket has been found that some of weighbridge for certified material not stamped with SG or MB.

5.5. Outsourcing activities

Findings: The company has no outsourcing activities. All production processes are conducted internally and all delivery of certified material to the factory are using the transportation which provided by suppli-er and for all products delivery, container and ship provided by costumer (Free On Board (FOB) shipping). Compliance status: Not Applicable

5.6. Sales and goods out



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Findings: The sales and goods out mechanism of the company are described in procedure of Dispatch of CPO, PKO and PK procedure (SOP-AGR-028-R02) issued January 04, 2016 and Sales of CPO, PKO, PK (SOP-AGR-048-R00) issued on April 3, 2015. Detail process will be described in Loading of CPO/CPKO to barge work instruction (IK-AGR-COM-03-R02) issued on July 01, 2015. All prod-uct will be delivered by using vessel that arranged by customer FOB shipping. The representative from buyer will be monitored the delivery process until barge sailing to ensure that the product de-livered in accordance with the requirements. Delivery processes start from Comercial department issued “BL Distribution” document to La-banan Bulking together with unloading verification request document (Permintaan verifikasi muat bongkar (PVMB)). Information stated on both documents are product quantity, buyer name and address, loading place and time, estimation time arrival, Bill of lading number and quantity, dis-charge port and trading contract document. Certified product from dedicated storage tank will be dispatched through dispatch pipe to dedicat-ed Bin and from Bin directly flowed to the the vessel, certified product from dedicated storage will be pumped using pipe line to company’s own jetty. Information for outgoing certified product will be recorded in several types of records depends on the transfer method used such as: Vessel: CPO Transfer notes (“Berita Acara Serah terima): Shipping Instruction (SI); Bill of lading (B/L); Certificate of Analysis; and Commercial invoice. Product weight report (Laporan Hasil Timbang Per Transport) /analysis. Bulking head receive information about volume and product claim (including selction model) from commercial department to be sold according to the contract with the buyer. Bulking head will re-viewing conformity of loading instruction with product stock report (material balance) before issue loading instruction to loading staff and verify with transfer notes to the balance tanks(called Two Bin). Pipe lines cleaning will be conducted before loading CPO to the vessel using blowing dan pigging as stated on working instruction no IK –AGR-019-00 (IK Loading process). Bulking ad-ministration staff will input information about outgoing CPO according to information on “Laporan Hasil Timbang (Product Balance report)” to Working Sheet Oil Stocking. All certified product transaction documents shall include information about selection supply chain model as well as on Balance report per product tranport, and minutes of product transfer (Berita Acara Serah Terima/ BAST) CSPO shall state certified SG” stamp. Bulking staff records total CSPO loaded to the vessel from specified storage tank (3, 4 or 5 with claimed SG) for it traceabil-ity. There are four balance tanks (bin) A, B, C and D that will be used as weighing tank before dispatch to vessel. According to the weighning staff, all tanks will be cleaned before CPO loading to the vessel, from four Bins the company dedicated Bin C and D for segregation products. All product dispatched to buyer for every certified product delivered has information about: Refer-ence Number, Date of issued, Delivery Order number, Contract Number, buyer name including the address of buyer, the quantity of the products delivered and Reference to related transport docu-mentation. In- formation about the name and address of the seller has been attached on every de-livery documents e.g. letter head and information inside documents, including information about loading/delivery date. The company has implemented this system for their regular products while the company will include certified product claim and SCC certificate number on each delivery document i.e. will be changes from IP to SG. The company will use certification number in all docs once certi-fied by PT TUV Rheinland Indonesia. Until the surveillance audit conducted the company still not sold and claim certified material as cer-tified products. Cross checking in e-Trace has been conducted to ensure there are no shipping an-nouncement and transaction recorded. The company recommended to create the draft for all deliv-ery documentation which stated the claim category and all informations required in RSPO SCC standard clause 5.6.1. All documentation draft will be checked in the next surveillance audit and the implementation will be verified if the delivery of certified products has been done. Compliance status: Full Compliance



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5.7. Registration of transactions

Findings: PT DSN Labanan Storage Facility has registered on RSPO IT Platform (e-trace) with registration number ID RSPO_PO1000002605. The company has regulated in IK-AGR-MS-08-R01 and IK-AGR-MS-04-R05 section VIC that commercial departement responsible for E trace transaction and all transaction for incoming certified material and outoing certified products will be announced and registered all physical shipment of every transaction to RSPO E-Trace as required by the RSPO-SCC standard. Since April 2015 to March 2016 at the time of this 1st surveillance audit, PT DSN Labanan still not sold and claim certified material as certified products. This requirement is not applicable for this time and will be verified if the delivery of certified products has been done. Compliance status: Full Compliance

5.8. Training

Findings: The company has created annual training schedule in 2015 as stated on form FM-HRD-19-R01. There are several training program plannes related to RSPO Supply Chain systems, such as 1. Refreshment training RSPO SCCS for all employees 2. Training for Weighing and CPO sounding for weighing operator 3. Training for CPO and CPKO dispatch for unloading operator

Based on the recapitulation of training implementation records of Bulking Station Labanan, there are several training has been implemented. Refreshment training RSPO SCCS

- Refreshment training of RSPO SCCS conducted on January 19, 2015 trained by internal trainer Mr. Hadi Santoso as Head of Bulking and attended 28 participants.

- Awareness training for ISCC, RSPO MB, SG and IP conducted on April 09, 2015 trained by inter-nal trainer Mrs. Watik TK as Manager Sustainability from Head office Jakarta and attended 7 par-ticipants.

- Refreshment training of RSPO SCCS conducted on April 13, 2015 trained by Mr. Hadi Santoso and attended 25 participants.

- Training for SCCS SG/RSPO conducted on May 18, 2015 trained by Mr. Hadi Santoso and at-tended 25 participants.

Training for Weighing and CPO sounding - CPO Receipt and weighing training conducted on February 5, 2015 trained by Mr. Hadi Santoso

and attended 24 participants. - Weighing procedure training conducted on February 28, 2015 trained by Mr. Taufik Hidayat and

attended 6 participants

Training for CPO and CPKO dispatch - CPO and CPKO loading to barge training February 5, 2015 trained by Mr. Hadi Santoso and at-

tended 24 participants. Compliance status: Full Compliance



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5.9. Record Keeping

Findings: In Document control procedure (SOP-AGR-036-R03) issued August 11, 2014 stated that the reten-tion time of records related SCCS RSPO implementation shall be at least five (5) years. The stor-age and maintenance of documents is the responsibility of the respective departments. All records will be stored in hardcopy and softcopy in each department and copied by Head of Bulking to maintain accurate, up to date and accessible records and reports covering all areas of the SC standard. The company has developed a procedure to trace the source of certified materials received, as de-fined in document name Traceability of CPO and PK IP & SG work instruction (IK-AGR-MS-08-R01) issued on July 01, 2015 for IP & SG products and Traceability of CPO, PKO and PK MB work instruction (IK-AGR-MS-04-R05) issued on March 01, 2016 for MB products, and also developed related documentation to apply the procedure. This procedure and documentation will be applied after the company get SCCS certificate and produces certified product. The company will clearly indicate the supply chain model used with trade names in relevant docu-ments, e.g. purchase and sales contracts with *product name*/ “SG” Segregation or “MB” Mass Balance. Labanan Bulking record all volume of RSPO certified oil palm products purchased and claimed over on DSN Mass Balance SG reporting, the information stateds on the report is daily updated consist of information about incoming CPO with claime SG or not SG; Outgoing CPO with claim SG, MB and non SG, stock position, Contract number, Volume, Buyer name, Vessel name and claim product sold. Compliance status: Full Compliance

5.10. Conversion Factors

Findings: PT DSN Labanan is only bulking storage facility, the process only receipt the material from supplier and dispatch the material to buyer. There is no production process in the bulking. The incoming material will be sold 100% without losses. This requirement is not applicable for bulking storage facility to set the conversion rates, because 100% incoming material will be sold and delivered equal.

Compliance status: Full Compliance

5.11. Claims

Findings: The company has no specific procedure for RSPO trademarks and Claims, however in Traceability of CPO and PK IP & SG work instruction (IK-AGR-MS-08-R01) and Traceability of CPO, PKO and PK MB work instruction (IK-AGR-MS-04-R05) has regulated that the facility will only make claims regarding the use of or support the RSPO certified material that compliance with RSPO Rules for communication and Claims if the company sold end products not raw material. PT DSN Labanan only sold CPO or CPKO which is categorized as intermediate product. During 1st surveillance audit, the company still not sold and claim certified material as certified products. All certified material will be downgraded and delivered as non-certified material. Compliance status: Full compliance



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5.12. Complaints

Findings: The organization informed that during April 2015 until March 2016 there are no complaints related to RSPO certified products, because the company also still not sold the certified material as certi-fied products. Some procedures has been created to handling the complaint received such as 1. Conflict resolution procedure (SOP-AGR-007-R00) issued February 15, 2012 2. Corrective and preventive acion procedure (SOP-AGR-039-R00) issued January 04, 2016 3. Customer satisfaction procedure (SOP-AGR-047-R00) issues issued February 15, 2014

The compIaint procedures not only collecting and resolving complaints from external party, the pro-cedure also accommodate the complaints from internal /staffs. In Conflict resolution procedure (SOP-AGR-007-R00) regulated that all incoming complaint will be recorded in complaint form (Form Laporan Penanganan Keluhan) FM-STD-29-R00. All complaints verbal and written will be followed up by Legal Department with submitting written responses. To-gether with CSR and Operation Department Head/Bulking Head will investigate to find the root cause and the problem solving. All resolving process of complaints will be monitored until cases closed and finished by using form List of Monitoring of External Complaints (Daftar Monitoring Permintaan Informasi atau Daftar Mon-itoring Keluhan Eksternal) FM-STD-30-R01. Internal complaints from staff will recorded in employ-ee complaints log book and the head of bulking will directly follow up and resolve the complaint. Compliance status: Full Compliance

5.13. Management review

Findings: The company has regulated the management review process in Management review meeting pro-cedure (SOP-AGR-041-R00) issued February 15, 2013. The management review will conducted at least once in a year. The last management review conducted on January 27 to 28, 2018 and avail-able document management review minutes meeting No: FM-STD-14-R01 that recorded about in-put and output of management review including the information of subject of discussion, comple-tion/achievement status, PIC, follow up planning, deadline target. The input of management review are: 1. Internal audit result: there are 7 findings found during internal audit result (five findings already

closed and 2 findings still process). 2. Customer satisfaction: There is one buyer which is Salim that give ratings average less that oth-

er buyer because of volume shrinkage when received at the port of loading. 3. Process performance and conformity of the products: Product realization still under target be-

cause of Elnino and losses during yield. 4. Corrective and preventive action status. 5. Follow Up from the last management review: SOP and work instruction revision 6. Recommendation for improvement The output of management review are 1. Improvement of the effectiveness of the management review: preparation of the certification

process in PKS 6 2. Resource needs




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Section 2: Modular Requirements: Module B Segregation

B.2 Supply Chain Requirement

Findings: PT DSN Labanan decided to select Segregation Module for RSPO SCCS certified claimed. The company has implemented physical processing for SG material and has claimed all producted sold as SG. All RSPO certified CPO will be distinguished with non-certified CPO, from incoming until delivery process. The company has released the internal memorandum No.001/IM/SWA-LBN/IV/ 2015 regarding dedicated main hole drop tank, storage tank and BIN for CPO SG. Dedicated main hole drop tank: 1, 2, 3 and 4, storage tank: 03, 04 and 05 and BIN: C and D. As informed before, the company purchased IP materials, downgraded and claimed as SG material due to limited storage facilities to support IP implementation. So, the mixing process only allowed for certified product with IP claims from PT DSN Tbk Mill 2 and Mill 3. Compliance status: Full Compliance

B.3.Processing

Findings: PT DSN Labanan has documented procedures Traceability of CPO and PK IP & SG work instruc-tion (IK-AGR-MS-08-R01) to process RSPO certified oil palm product and distingusih them from non-RSPO certified products, covering incoming material, processing, storage and transport. The objective is for 100% segregated material to be reached. And management has decided to imple-ment physical processes with dedicated main hole drop tank: 1, 2, 3 and 4, storage tank: 03, 04 and 05 and BIN: C and D for SG material. The verification process of delivery documentation starts from slip/note (FM-DIS-01-R02). On the slip already stated the status of material by using MB or IP stamp. Security team will check con-formity all information in the delivery notes including including wet stamp (selection model IP or MB) from the origin palm oil mill, check the mill name in the memorandum to ensure certificate status. The company assigned a person that has responsibility to check and ensure certified ma-terial both quality and quantity as per weighbridge and expedition. All weighbridge (WB) and de-livery note were keeping maintained by administration section. Commercial depatement will up-date material stock information to monitor the product and will check the validity of supplier’s certifi-cate via the list of RSPO SCC facilities on the RSPO website (www.rspo.org) or the RSPO IT sys-tem within a reasonable timeframe. When receiving RSPO certified material, weighbridge operators will verify the claimed category of the material under MB or SG model (downgraded from IP material), name of supplier (supplier has RSPO certificate or not), ensure quality and quantity of products, ensure number of seal (red and yellow). Weightbridge operator informed to truck driver to go to main hole drop tank, the person in charge for storage tank will instruct the driver to unloading the SG material from certified mill (Mill 2 & 3 PT DSN Tbk) in hole 1, 2, 3, and 4 that will flow to dedicated storage tank 03, 04 and 05 for physical segregation. Certified product from dedicated storage tank will be dispatched through dispatch pipe to dedicat-ed Bin C and D, from Bin directly flowed to the the vessel, certified product from dedicated stor-age will be pumped using pipe line to company’s own jetty. The company assigned a person that has responsibility to check and ensure certified material both quality and quantity as per weighbridge and expedition. Pipe lines cleaning will be conducted before loading CPO to the vessel using blowing dan pigging as stated on working instruction no IK-AGR-



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019-00 (IK Loading process). Before product transferred to the vessel, The CSPO volumes will be balanced though balance tanks. All process will be monitored and records into specified documents. However the facility still not clearly determined mechanism to distinguishing between RSPO SG records and Non SG. Compliance status: Full Compliance

Section 2: Modular Requirements: Module C Mass Balance

C.2. Supply chain requirements

Findings: The company has developed a procedure to trace the source of certified materials received, as de-fined in Traceability of CPO, PKO and PK MB work instruction (IK-AGR-MS-04-R05) issued on March 01, 2016, and also developed related documentation to apply the procedure. During sur-veillance audit can be shown that the traceability of all transaction can be shown by using daily re-ceipt report that reported the incoming material from each suppliers by date including BE number. All daily transaction will be recorded in monthly records and the delivery product can be seen in the monthly sales report that informed all input material and the amount of material delivered to cus-tomer including the information of B/L numbers, vessel name and customer name. To monitoring the quantity of RSPO certified material receipt and sold, the organization has created procedures as follows: 1. Bulking station procedure (SOP-AGR-004-R01) issued April 10, 2014 2. Sales of CPO, PKO, PK procedure (SOP-AGR-048-R00) issued on April 3, 2015 3. Receipt and weighing of CPO/CPKO work instruction (IK-AGR-COM-01-R02) issued on July

01, 2015 All input material that processed will be recorded on Material Balance Report every 3 months to ensure that the output of RSPO mass balance material supplied to customers from the physical site does not exceed the input of RSPO certified material received at the physical site with 3 months in- ventory period. The company has been indicating the supply chain model used clearly with trade names in relevant documents for their certified products, e.g. purchase and sales contracts with *product name*/ “SG” Segregation or “MB” Mass Balance. Compliance status: Full Compliance

C.3. Processing

Findings: PT DSN Labanan has a monitoring system to ensure that the quantity of physical RSPO mass bal-ance material inputs and outputs (volume or weight) are processed following the standard opera-tion procedure and RSPO SCCS requirement. All input material that processed are recorded on Material Balance Report every 3 months to en-sure that the output of RSPO mass balance material supplied to customers from the physical site does not exceed the input of RSPO certified material received at the physical site with 3 months in-ventory period. Compliance status: Full Compliance



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C.4. Continuous accounting system Findings: The company implement a continuous accounting system is in operation, it was sighted that the material accounting system from period April 2015 to March 2016 is never overdrawn. The data has been recorded in the material accounting system. All volumes of palm oil that are delivered are deducted from the material accounting system according to actual daily conversion ratios. Labanan Storage Facility will record quantities of MB material inputs and become MB outputs, total storage material are monitored on a real-time basis. PT DSN Labanan has a monitoring system to ensure that the quantity of physical RSPO mass bal-ance material inputs and outputs (volume or weight) are processed following the standard opera-tion procedure and RSPO SCCS requirement. All input material that processed are recorded on Material Balance Report every 3 months to en-sure that the output of RSPO mass balance material supplied to customers from the physical site does not exceed the input of RSPO certified material received at the physical site with 3 months in-ventory period. All volumes of CPO and CPKO that are delivered are deducted from the material accounting sys-tem according to conversion ratios stated by RSPO, and the record are keep maintained by the document controller and reported to the head of bulking. Compliance status: Full Compliance

C.5. Fixed Inventory Periods

Findings: PT DSN Labanan impelemented continuous accounting system and Head of Bulking has responsibil-ity to ensure that the material accounting system is never overdrawn Compliance status: Not Applicable

C.6. Conversion Ratios

Findings: Since there is no material processing in Labanan Storage Facility. The activities only receiving material, storage and outgoing material, this requirement is not aplicable for Labanan Storage Facility. This requirement is not applicable for bulking storage facility to set the conversion rates, because 100% incoming material will be sold and delivered equal. Compliance status: Not Applicable

C.7.Yield Scheme

Findings: PT DSN Labanan is only bulking storage facility, the process only receipt the material from supplier and dispatch the material to buyer. There is no production process in the bulking. The incoming material will be sold 100% without losses. Since there is no material processing in Labanan Storage Facility. The activities only receiving material, storage and outgoing material, this requirement is not aplicable for Labanan Storage Facility



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1.2 Previously Status Identified of RSPO SCCS Requi rement Non-conformities

There is no non-conformities raised during certification audit

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

NCR – RSPO SCCS00011 In work instruction of Traceability of CPO and PK IP & SG (IK-AGR-MS-08-R01) issued on July 01, 2015 and Traceability of CPO, PKO and PK MB (IK-AGR-MS-04-R05) issued on March 01, 2016 re-garding the receipt of raw material, still not stated and regulated that the weighbridge ticket should be identified with specific claims MB or SG by using wet stamp. During verification and documentation check of weighbridge ticket has been found that some of weighbridge for certified material not stamped with SG or MB. Correction: The company has revised the work instruction of Traceability of CPO and PK IP & SG (IK-AGR-MS-08-R01) and Traceability of CPO, PKO and PK MB (IK-AGR-MS-04-R05) by adding provision regarding the marking process of certified material in accordance with certification status and supply chain mod-ule. The company also send some documentation of implementation marking in weighbridge ticket stamped with specific claims. Corrective Action: The company will make socialization to all employees especially for weighbridge person about the re-vised of the work instruction of traceability. Auditor Conclusions: Closed Date of closure: May 13, 2016 Verification Result: The work instruction has been revised to be adapted with the implementation of stamp marking for cer-tified material that has been done so far and sample of implementation has been submitted to distin-guish between the receipt and the mark of certified material by using wet stamp in documentation be-tween certified material (SG or MB) and non-certified material.

3.4 Conclusion and Recommendation for RSPO Supply C hain Certification The audit team has confirmed through the audit process that PT Dharma Satya Nusantara Tbk – La-banan Storage Facility has established and maintains an effective system to ensure compliance with the RSPO Supply Chain Certification System requirements year 2014. PT TUV Rheinland Indonesia recommends PT Dharma Satya Nusantara Tbk – Labanan Storage Facility to continue being certified to the RSPO Supply Chain Certification requirements.



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4.0 CERTIFIED ORGANISATION’S ACKNOWLEDGEMENT OF INT ERNAL RESPONSIBILITY

4.1 Date of Next Surveillance Visit

The next surveillance visit is planned for April, 2017

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

It is acknowledged that the assessment visit was carried out as described in this report and we accept the assessment findings and report content. Signed on behalf of PT DSN Tbk Labanan Storage Facility …………………………………………. Agustinus Triwibowo Management Representativs Date: May 20, 2016

Signed on behalf of PT TUV Rheinland Indo-nesia …………………………………………. Riki Harpan Lead Auditor Date: May 20, 2016



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APPENDICES Appendix 1: Details of Supply Chain Certification C ertificate



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Appendix 2: List of Abbreviations

B/L CPO CB CSPO DO ISPO MT SG MB ISCC POM PKO RSPO SO SCCS SOP WB

Bill of Lading Crude Palm Oil Certification Body Certified Sustainable Palm Oil Delivery Order Indonesia Sustainable Palm Oil Metric Tonnes Segregation Mass Balance International Sustainable and Carbon Certification Palm Oil Mill Palm Kernel Oil Roundtable on Sustainable Palm Oil Sales Order Supply Chain Certification Systems Standard Operating Procedure Weighbridge

Appendix 3: Observations and Opportunities for Impr ovement

A. Positive Observations

No. Clause Postive observation

1 - The Company has a strong commitment to the implementation of RSPO SCC system in ac-cordance with the scope mentioned in the certificate

2 5.9 The company has a good recording system for each receiving raw materials and shipping products based on daily, monthly and annual records. And also with the Sales report that have been recorded up to delivery of each ship.

B. Negative Observations/ Potential For Improvement

1 5.6 The company recommended to prepared the draft documentation of shipping documenta-tion documentation with specific claims and stated all information required in RSPO SCC standard clause 5.6.1

2 5.9 In the recapitulation of annual material balance the receipt and sales of material classified based on supplier, it is also recommended to classified the material balance based on claimed product if the company has sold and claimed the material with MB or SG.



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Appendix 4: Supply Chain Certification Audit Closin g Meeting Summary



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Appendix 5: List of Certified List of Suppliers an d Buyers A) List of certified Suppliers

Supplier Address RSPO Certificate Number

Module UTZ

Number Validity

PT Swakarsa Sinarsen-tosa

Desa Jabdan, Muara Wahau, KalimantanTimur

MUTU-RSPO/050 MB RSPO_PO1000000354

09/01/ 2018

PT Dharma Satya Nusantara Tbk. (PKS 2)

Desa Puhus, Muara Wahau , Kalimantan Timur

MUTU-RSPO/056 IP RSPO_PO1000000939

24/03/ 2019


Desa Long Kejiak, Muara Wahau, Kalimantan Timur

MUTU-RSPO/055 IP RSPO_PO1000000950

24/03/ 2019


Desa Long Jenew, Muara Wahau, KalimantanTimur

MUTU-RSPO/060 MB RSPO_PO1000002088

31/05/ 2020

PT Dharma Satya Nusantara Tbk – Kernel Crushing Plant (KCP)

Desa Muara Wahau, Muara Wahau, Kutai, Kalimantan Timur

BMT-RSPO-000569

MB RSPO_PO1000002087

12/04/ 2020

B) List of potential certified buyers

Name of Buyer Address

Contact Person and Telephone

Number

RSPO Certif-icate Number

Supply Chain Model

Validity

PT Smart Tbk Desa tarjun, Kecamatan Kelumpang Hilir, Kabupaten Kota baru, Kalimantan Selatan, 72161

Mrs. Suwita Anoinette Telp. 021 2150333888

SGS-RSPO/SC- MY14/01549

SG & MB Valid from 18 sep- Tember 2014 to 17 September 2019

PT Musim Mas

Jl. Raya Pelabuhan CPO Kabil, Kabil Nongsa, Batam 29400, Indonesia

Mrs. Diana Telp.061 6634474

CU-RSPO SCC-816550

IP, SG, MB

Valid from 09 Desember 2012 to 08 Desember 2017

PT Ecogreen Oleochemi-cals

Jl. Raya Pelabuhan Kav.1 Kabil Batam Is-land 29467 Batam, In-donesia

Mrs. Lia Telp..061 6940488

CU-RSPO SCC-825329

MB Valid from 14 Jan-uary 2013 until 13 January 2018

roundtable on sustainable palm oil...roundtable on sustainable palm oil supply chain 1st...

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