RSPO SCC Standard CPO Mills & Multi Sites (Part 2)

1. SCCS M2b May 2013 RSPO SCC StandardCPO Mills & Multi Sites(Part 2) RSPO LEAD AUDITOR SERIES

2. RSPO Supply Chain Certification Standard 2011 • 1. CPO Mills • SG Module • MB Module 2. MULTI-SITE CERTIFICATION System Requirements Standard Requirements

3. SCC Standard 1. CPO Mills

4. CPO Mills • CPO SCCS will be determined during a P&C Audit. The following needs to be verified: • Volumes of FFB inputs and volumes of RSPO sales outputs • Estimated production of CPO/PK and recorded in certificate. Certified volume cannot exceed this. Subsequent ASA will update actual figures. • Mill meets registration & reporting requirements as per UTZ or Greenpalm and e-Trace.

5. SEGREGATION D – SG CPO Mill

6. Segregation ensures receipt, processing and storage maintains RSPO products is physically separated 2 4 Outgoing documentation identifies Certified product, e.g., CPO SG Certificate XXXXXX 3 Documented systems in place to control mixing Source of Certified Material is identified & verified 1

7. Procedures for receiving and processing certified and non-certified FFBs. Documented Procedures

8. Verify & document volumes of certified and non-certified FFB received. • Inform CB immediately if there is an overproduction. Purchasing and Goods In

9. Records and reports for at least 5 years • Record and balance all receipts of RSPO certified FFB and deliveries of CPO, PKO and palm kernel meal on a three-monthly basis. • Trade names shall be indicated on relevant documents (e.g., purchase and sales contracts): • [Product Name]/SG or Segregated Record Keeping

10. Sales invoices or relevant documents (e.g. delivery notes, shipping documents, etc) includes sufficient information on RSPO certified palm oil products delivered. • Names/Contacts of buyer • Date invoice issued • Certified product description (MB/SG) • Quantities delivered • Reference to Transportation information Sales of Goods Out

11. 100-95% of source is identifiable to only certified segregated source. • Demonstrate (inc. procedures & record keeping) segregation: • Prevents physical mixing (isolated) • Transport and Storage Processing

12. Mill may outsource to an independent PK crushing mill and does not need to be independently certified. But: • Crusher conforms to SG requirements; • Crusher is included in an enforceable agreement. Processing

13. MASS BALANCE E – MB CPO Mill

14. Facilities utilizes certified and non-certified materials in the process. There is no segregation. Outgoing documentation identifies Certified product, e.g., CPO MB Certificate XXXXXX 2 4 Any physical sales of certified products are deducted from the Accounting System only. 5 Accounting System in place to monitor Certified volumes received and Certified products processed only. Source of Certified Material is identified & verified 1 3

15. Procedures for receiving and processing certified and non-certified FFBs. Documented Procedures

16. Verify & document volumes of certified and non-certified FFB received. • Inform CB immediately if there is an overproduction. Purchasing and Goods In

17. All volumes of products delivered shall be deducted from material accounting system based on the RSPO conversion ratio. • Facility can only deliver MB sales from positive stock and is allowed to short sell. Record Keeping

18. Records and reports for at least 5 years • Record and balance all receipts of RSPO certified FFB and deliveries of CPO, PKO and palm kernel meal on a three-monthly basis. • Trade names shall be indicated on relevant documents (e.g., purchase and sales contracts): • [Product Name]/MB or Mass Balance Record Keeping

19. Mill may outsource to an independent PK crushing mill and does not need to be independently certified. But: • Crusher conforms to SG requirements; • Crusher is included in an enforceable agreement. Processing

20. Sales invoices or relevant documents (e.g. delivery notes, shipping documents, etc) includes sufficient information on RSPO certified palm oil products delivered. • Names/Contacts of buyer • Date invoice issued • Certified product description (MB/SG) • Quantities delivered • Reference to Transportation information Sales of Goods Out

21. MB Suppy Chain Yield Scheme New

22. SCC Standard 2. Multi-site Certification

23. 1 Central Office manages SCCS requirements 4 RSPO Certificate issued to Central Office 3 ICS defines how SCCS will ensure compliance 2 Internal Audits at least 1/annum

24. System Requirements

25. Multi-site Certification The SCCS System defines the following elements; • Eligibility • Criteria for Operation • Certification Units • Audit Sampling

26. Eligibility • All operations owned by same company • Centralised Office (CO) shall defined rules for eligibility of all participating sites • Multi-site audits can be across borders, as long as SCCS controlled by CO

27. Criteria for Operation • SCC System managed centrally (CO) • All facilities included = contract to CO • CO manages a ICS • CO elects a Management Rep • CO is audited annually

28. Criteria for Operation • Operations grouped into sets • Milling, Refining, Transport & Distribution, Processing, Production, Blending, Outsourcing (tanks, etc)

29. Certification • Certificate issued to CO and relevant companies/operations listed • Certificate valid for 5 years with annual surveillance

30. Audit Principles • Audits will consider Sets of facilities with common management systems • Audit rigor will be determined by an audit risk assessment

31. Initial Assessment • CO + 0.8 x [Each Sets] where each Set = rounded up (√ total no of sites) • Surveillance • CO + 0.6 x [Each Sets] where each Set = rounded up (√ total no of sites) • Re-Certification • CO + 0.8 x [Each Sets] where each Set = rounded up (√ total no of sites) Audit Formula

32. Example 1: Audit Formula • Initial Assessment: • 1 CO = once per year • 4 mills = 0.8 x √ 4 = 1.6 = 2 • 10 refineries = 0.8 x √ 10 = 2.5 = 3 • 27 manufacturers = 0.8 x √ 27 = 4.2 = 4 • i.e., total of 10 audits per annum

33. Standard Requirements

34. Multi-site Certification The SCCS Standard defines the following elements; • Scope • Responsibilities • Training • Record Keeping • Internal Audits • Claims

35. The Central Office needs to define: • Geographic area, the number & identify of facilities • Supply Chain model used and types of operations covered by the model • Note: MB accounting can only be done at the facility level Scope

36. Operational units are part of the Central Office (CO) • CO to justify any sets or groupings of facilities • RSPO SCCS system: • Covered by an internal ICS • CO administers the ICS • CO defines a management rep to oversee compliance • CO defines a corrective action procedure where non compliance is detected • CO has the authority to remove participating sites from the RSPO SCCS scope (inc. RSPO CB findings) Responsibilities

37. ICS shall define training scope, requirements and implementation Training

38. CO maintains all records and reporting • ICS defines which common management documents are applicable for all units • ICS defines which specific documents are required to demonstrate compliance • ICS/CO maintains documents for min. 5 years Record Keeping

39. CO at least one internal audit of each site • (ICS) non conformance results in an issued corrective action request • Actions taken to close non conformance shall be made available • Outcomes of internal audit programme shall be reviewed by top management at least annually Internal Audits

40. ICS shall be responsible for ensuring all use by represented sites comply to the rules for market communication & claims. Claims

41. SCC Standard Conclusion

42. Conclusion • CPO Mills must adopt either SG or MB supply chain models. Their certification requirement is currently included within the scope of the Mill’s RSPO production certificate. • Multi-site certification is applicable generally for large multinational companies, operating many facilities.