November 2015 ~ Malaysian Sustainable Palm Oil

MS2530-3 Principle and Criteria

4. Principles and criteria

4.1 Principle 1: Management commitment and responsibility

4.1.1 Criterion 1: Malaysian Sustainable Palm Oil (MSPO) Policy

4.1.1.1 Indicator 1: A policy for the implementation of MSPO shall be established.
4.1.1.2 Indicator 2: The policy shall also emphasize commitment to continual improvement.

4.1.2 Criterion 2: Internal audit

4.1.2.1 Indicator 1: Internal audit shall be planned and conducted regularly to determine the strong and weak points and potential area for further improvement.
4.1.2.2 Indicator 2: The internal audit procedures and audit results shall be documented and evaluated, followed by the identification of strengths and root causes of nonconformities, in order to implement the necessary corrective action.
4.1.2.3 Indicator 3: Report shall be made available to the management for their review.

4.1.3 Criterion 3: Management review

4.1.3.1 Indicator 1: The management shall periodically review the continuous suitability, adequacy and effectiveness of the requirements for effective implementation of MSPO and decide on any changes, improvement and modification.

4.1.4 Criterion 4: Continual improvement

4.1.4.1 Indicator 1: The action plan for continual improvement shall be based on consideration of the main social and environmental impact and opportunities of the company.
4.1.4.2 Indicator 2: The company shall establish a system to improve practices in line with new information and techniques or new industry standards and technology, where applicable, that are available and feasible for adoption.
4.1.4.3 Indicator 3: An action plan to provide the necessary resources including training, to implement the new techniques or new industry standard or technology (where applicable) shall be established.

4.2 Principle 2: Transparency

4.2.1 Criterion 1: Transparency of information and documents relevant to MSPO requirement

4.2.1.1 Indicator 1: The management shall communicate the information requested by the relevant stakeholders in the appropriate languages and forms, except those limited by commercial confidentiality or disclosure that could result in negative environmental or social outcomes.
4.2.1.2 Indicator 2: Management documents shall be publicly available, except where this is prevented by commercial confidentiality or where disclosure of information would result in negative environmental or social outcomes.

4.2.2 Criterion 2: Transparent method of communication and consultation

4.2.2.1 Indicator 1: Procedures shall be established for consultation and communication with the relevant stakeholders.
4.2.2.2 Indicator 2: A management official should be nominated to be responsible for issues related to Indicator 1 at each operating unit.
4.2.2.3 Indicator 3: List of stakeholders, records of all consultation and communication and records of action taken in response to input from stakeholders should be properly maintained.

4.2.3 Criterion 3: Traceability

4.2.3.1 Indicator 1: The management shall establish, implement and maintain a Standard Operating Procedure to comply with the requirements for traceability of the relevant product(s).
4.2.3.2 Indicator 2: The management shall conduct regular inspections on compliance with the established traceability system.
4.2.3.3 Indicator 3: The management should identify and assign suitable employees to implement and maintain the traceability system.
4.2.3.4 Indicator 4: Records of sales, delivery or transportation of FFB shall be maintained.

4.3 Principle 3: Compliance to legal requirements

4.3.1 Criterion 1: Regulatory requirements

4.3.1.1 Indicator 1: All operations are in compliance with the applicable local, state, national and ratified international laws and regulations.
4.3.1.2 Indicator 2: The management shall list all laws applicable to their operations in a legal requirements register.
4.3.1.3 Indicator 3: The legal requirements register shall be updated as and when there are any new amendments or any new regulations coming into force.
4.3.1.4 Indicator 4: The management should assign a person responsible to monitor compliance and to track and update the changes in regulatory requirements.

4.3.2 Criterion 2: Land use rights

4.3.2.1 Indicator 1: The management shall ensure that their oil palm cultivation activities do not diminish the land use rights of other users.
4.3.2.2 Indicator 2: The management shall provide documents showing legal ownership or lease, history of land tenure and the actual use of the land.
4.3.2.3 Indicator 3: Legal perimeter boundary markers should be clearly demarcated and visibly maintained on the ground where practicable.
4.3.2.4 Indicator 4: Where there are, or have been, disputes, documented proof of legal acquisition of land title and fair compensation that have been or are being made to previous owners and occupants; shall be made available and that these should have been accepted with free prior informed consent (FPIC).

4.3.3 Criterion 3: Customary rights

4.3.3.1 Indicator 1: Where lands are encumbered by customary rights, the company shall demonstrate that these rights are understood and are not being threatened or reduced.
4.3.3.2 Indicator 2: Maps of an appropriate scale showing extent of recognized customary rights shall be made available.
4.3.3.3 Indicator 3: Negotiation and FPIC shall be recorded and copies of negotiated agreements should be made available.

4.4 Principle 4: Social responsibility, health, safety and employment condition

4.4.1 Criterion 1: Social impact assessment (SIA)

4.4.1.1 Indicator 1: Social impacts should be identified and plans are implemented to mitigate the negative impacts and promote the positive ones.

4.4.2 Criterion 2: Complaints and grievances

4.4.2.1 Indicator 1: A system for dealing with complaints and grievances shall be established and documented.
4.4.2.2 Indicator 2: The system shall be able to resolve disputes in an effective, timely and appropriate manner that is accepted by all parties.
4.4.2.3 Indicator 3: A complaint form should be made available at the premises, where employees and affected stakeholders can make a complaint.
4.4.2.4 Indicator 4: Employees and the surrounding communities should be made aware that complaints or suggestions can be made any time.
4.4.2.5 Indicator 5: Complaints and resolutions for the last 24 months shall be documented and made available to affected stakeholders upon request.

4.4.3 Criterion 3: Commitment to contribute to local sustainable development

4.4.3.1 Indicator 1: Growers should contribute to local development in consultation with the local communities.

4.4.4 Criterion 4: Employees safety and health

4.4.4.1 Indicator 1: An occupational safety and health policy and plan shall be documented, effectively communicated and implemented.
4.4.4.2 Indicator 2: The occupational safety and health plan shall cover the following:

a) A safety and health policy, which is communicated and implemented.
b) The risks of all operations shall be assessed and documented.
c) An awareness and training programme which includes the following requirements for employees exposed to pesticides:

i) all employees involved shall be adequately trained on safe working practices; and
ii) all precautions attached to products shall be properly observed and applied.

d) The management shall provide the appropriate personal protective equipment ( PPE) at the place of work to cover all potentially hazardous operations as identified in the risk assessment and control such as Hazard Identification, Risk Assessment and Risk Control (HIRARC).
e) The management shall establish Standard Operating Procedure for handling of chemicals to ensure proper and safe handling and storage in accordance to Occupational Safety Health (Classification Packaging and Labeling) Regulation 1997 and Occupational Safety Health (Use and Standard of Exposure of Chemical Hazardous to Health) Regulation 2000.
f) The management shall appoint responsible person(s) for workers' safety and health. The appointed person(s) of trust must have knowledge and access to latest national regulations and collective agreements.
g) The management shall conduct regular two-way communication with their employees where issues affecting their business such as employee's health, safety and welfare are discussed openly. Records from such meetings are kept and the concerns of the employees and any remedial actions taken are recorded.
h) Accident and emergency procedures shall exist and instructions shall be clearly understood by all employees. i) Employees trained in First Aid should be present at all field operations. A First Aid Kit equipped with approved contents should be available at each worksite.
j) Records shall be kept of all accidents and be reviewed periodically at quarterly intervals.

4.4.5 Criterion 5: Employment conditions

4.4.5.1 Indicator 1: The management shall establish policy on good social practices regarding human rights in respect of industrial harmony. The policy shall be signed by the top management and effectively communicated to the employees.
4.4.5.2 Indicator 2: The management shall not engage in or support discriminatory practices and shall provide equal opportunity and treatment regardless of race, colour, sex, religion, political opinion, nationality, social origin or any other distinguishing characteristics.
4.4.5.3 Indicator 3: Management shall ensure that employees’ pay and conditions meet legal or industry minimum standards and as per agreed Collective Agreements. The living wage should be sufficient to meet basic needs and provide some discretionary income based on minimum wage.
4.4.5.4 Indicator 4: Management should ensure employees of contractors are paid based on legal or industry minimum standards according to the employment contract agreed between the contractor and his employee.
4.4.5.5 Indicator 5: The management shall establish records that provide an accurate account of all employees (including seasonal workers and subcontracted workers on the premises). The records should contain full names, gender, date of birth, date of entry, a job description, wage and the period of employment.
4.4.5.6 Indicator 6: All employees shall be provided with fair contracts that have been signed by both employee and employer. A copy of employment contract is available for each and every employee indicated in the employment records.
4.4.5.7 Indicator 7: The management shall establish a time recording system that makes working hours and overtime transparent for both employees and employer.
4.4.5.8 Indicator 8: The working hours and breaks of each individual employee as indicated in the time records shall comply with legal regulations and collective agreements. Overtime shall be mutually agreed and shall always be compensated at the rate applicable and shall meet the applicable legal requirement.
4.4.5.9 Indicator 9: Wages and overtime payment documented on the pay slips shall be in line with legal regulations and collective agreements.
4.4.5.10 Indicator 10: Other forms of social benefits should be offered by the employer to employees, their families or the community such as incentives for good work performance, bonus payment, professional development, medical care and health provisions.
4.4.5.11 Indicator 11: In cases where on-site living quarters are provided, these quarters shall be habitable and have basic amenities and facilities in compliance with the Workers' Minimum Standards Housing and Amenities Act 1990 (Act 446) or any other applicable legislation.
4.4.5.12 Indicator 12: The management shall establish a policy and provide guidelines to prevent all forms of sexual harassment and violence at the workplace.
4.4.5.13 Indicator 13: The management shall respect the right of all employees to form or join trade union and allow workers own representative(s) to facilitate collective bargaining in accordance with applicable laws and regulations. Employees shall be given the freedom to join a trade union relevant to the industry or to organize themselves for collective bargaining. Employees shall have the right to organize and negotiate their work conditions. Employees exercising this right should not be discriminated against or suffer repercussions.
4.4.5.14 Indicator 14: Children and young persons shall not be employed or exploited. The minimum age shall comply with local, state and national legislation. Work by children and young persons is acceptable on family farms, under adult supervision, and when not interfering with their education. They shall not be exposed to hazardous working conditions.

4.4.6 Criterion 6: Training and competency

4.4.6.1 Indicator 1: All employees, contractors and relevant smallholders are appropriately trained. A training programme (appropriate to the scale of the organization) that includes regular assessment of training needs and documentation, including records of training shall be kept.
4.4.6.2 Indicator 2: Training needs of individual employees shall be identified prior to the planning and implementation of the training programmes in order to provide the specific skill and competency required to all employees based on their job description.
4.4.6.3 Indicator 3: A continuous training programme should be planned and implemented to ensure that all employees are well trained in their job function and responsibility, in accordance to the documented training procedure

4.5 Principle 5: Environment, natural resources, biodiversity and ecosystem services

4.5.1 Criterion 1: Environmental management plan

4.5.1.1 Indicator 1: An environmental policy and management plan in compliance with the relevant country and state environmental laws shall be developed, effectively communicated and implemented.
4.5.1.2 Indicator 2: The environmental management plan shall cover the following:

a) An environmental policy and objectives.
b) The aspects and impacts analysis of all operations.

4.5.1.3 Indicator 3: An environmental improvement plan to mitigate the negative impacts and to promote the positive ones, shall be developed, effectively implemented and monitored.
4.5.1.4 Indicator 4: A programme to promote the positive impacts should be included in the continual improvement plan.
4.5.1.5 Indicator 5: An awareness and training programme shall be established and implemented to ensure that all employees understand the policy and objectives of the environmental management and improvement plans and are working towards achieving the objectives.
4.5.1.6 Indicator 6: Management shall organize regular meetings with employees where their concerns about environmental quality are discussed.

4.5.2 Criterion 2: Efficiency of energy use and use of renewable energy

4.5.2.1 Indicator 1: Consumption of non-renewable energy shall be optimized and closely monitored by establishing baseline values and trends shall be observed within an appropriate timeframe. There should be a plan to assess the usage of non-renewable energy including fossil fuel, electricity and energy efficiency in the operations over the base period.
4.5.2.2 Indicator 2: The oil palm premises shall estimate the direct usage of non- renewable energy for their operations, including fossil fuel, and electricity to determine energy efficiency of their operations. This shall include fuel use by contractors, including all transport and machinery operations.
4.5.2.3 Indicator 3: The use of renewable energy should be applied where possible.

4.5.3 Criterion 3: Waste management and disposal

4.5.3.1 Indicator 1: All waste products and sources of pollution shall be identified and documented.
4.5.3.2 Indicator 2: A waste management plan to avoid or reduce pollution shall be developed and implemented. The waste management plan should include measures for:

a) Identifying and monitoring sources of waste and pollution.
b) Improving the efficiency of resource utilization and recycling of potential wastes as nutrients or converting them into value-added by-products.

4.5.3.3 Indicator 3: The management shall establish Standard Operating Procedure for handling of used chemicals that are classified under Environment Quality Regulations (Scheduled Waste) 2005, Environmental Quality Act, 1974 to ensure proper and safe handling, storage and disposal.
4.5.3.4 Indicator 4: Empty pesticide containers shall be punctured and disposed in an environmentally and socially responsible way, such that there is no risk of contamination of water sources or to human health. The disposal instructions on manufacturer’s labels should be adhered to. Reference should be made to the national programme on recycling of used HDPE pesticide containers.
4.5.3.5 Indicator 5: Domestic waste should be disposed as such to minimize the risk of contamination of the environment and watercourses.

4.5.4 Criterion 4: Reduction of pollution and emission

4.5.4.1 Indicator 1: An assessment of all polluting activities shall be conducted, including greenhouse gas emissions, scheduled wastes, solid wastes and effluent.
4.5.4.2 Indicator 2: An action plan to reduce identified significant pollutants and emissions shall be established and implemented.

4.5.5 Criterion 5: Natural water resources

4.5.5.1 Indicator 1: The management shall establish a water management plan to maintain the quality and availability of natural water resources (surface and ground water). The water management plan may include:

a) Assessment of water usage and sources of supply.
b) Monitoring of outgoing water which may have negative impacts into the natural waterways at a frequency that reflects the estate’s current activities.
c) Ways to optimize water and nutrient usage to reduce wastage (e.g. having in place systems for re-use, night application, maintenance of equipment to reduce leakage, collection of rainwater, etc.).
d) Protection of water courses and wetlands, including maintaining and restoring appropriate riparian buffer zones at or before planting or replanting, along all natural waterways within the estate.
e) Where natural vegetation in riparian areas has been removed, a plan with a timetable for restoration shall be established and implemented.
f) Where bore well is being use for water supply, the level of the ground water table should be measured at least annually.

4.5.5.2 Indicator 2: No construction of bunds, weirs and dams across main rivers or waterways passing through an estate.
4.5.5.3 Indicator 3: Water harvesting practices should be implemented (e.g. water from road-side drains can be directed and stored in conservation terraces and various natural receptacles).

4.5.6 Criterion 6: Status of rare, threatened, or endangered species and high biodiversity value area

4.5.6.1 Indicator 1: Information shall be collated that includes both the planted area itself and relevant wider landscape-level considerations (such as wildlife corridors). This information should cover:

a) Identification of high biodiversity value habitats, such as rare and threatened ecosystems, that could be significantly affected by the grower(s) activities.
b) Conservation status (e.g. The International Union on Conservation of Nature and Natural Resources (IUCN) status on legal protection, population status and habitat requirements of rare, threatened, or endangered species), that could be significantly affected by the grower(s) activities.

4.5.6.2 Indicator 2: If rare, threatened or endangered species, or high biodiversity value, are present, appropriate measures for management planning and operations should include:

a) Ensuring that any legal requirements relating to the protection of the species are met.
b) Discouraging any illegal or inappropriate hunting, fishing or collecting activities and developing responsible measures to resolve human-wildlife conflicts.

4.5.6.3 Indicator 3: A management plan to comply with Indicator 1 shall be established and effectively implemented, if required.

4.5.7 Criterion 7: Zero burning practices

4.5.7.1 Indicator 1: Use of fire for waste disposal and for preparing land for o i l p a l m c u l t i v a t i o n or replanting shall be avoided except in specific situations, as identified in regional best practice.
4.5.7.2 Indicator 2: A special approval from the relevant authorities shall be sought in areas where the previous crop is highly diseased and where there is a significant risk of disease spread or continuation into the next crop.
4.5.7.3 Indicator 3: Where controlled burning is allowed, it shall be carried out as prescribed by the Environmental Quality (Declared Activities) (Open Burning) Order 2003 or other applicable laws.
4.5.7.4 Indicator 4: Previous crops should be felled or mowed down, chipped and shredded, windrowed or pulverized or ploughed and mulched.

4.6 Principle 6: Best practices

4.6.1 Criterion 1: Site management

4.6.1.1 Indicator 1: Standard Operating Procedure shall be appropriately documented and consistently implemented and monitored.

4.6.1.2 Indicator 2: Where oil palm is grown within permitted levels on sloping land, appropriate soil conservation measures shall be implemented to prevent both soil erosion as well as siltation of drains and waterways. Measures shall be put in place to prevent contamination of surface and groundwater through runoff of either soil, nutrients or chemicals.

4.6.1.3 Indicator 3: A visual identification or reference system shall be established for each field.

4.6.2 Criterion 2: Economic and financial viability plan

4.6.2.1 Indicator 1: A documented business or management plan shall be established to demonstrate attention to economic and financial viability through long-term management planning.

4.6.2.2 Indicator 2: Where applicable, an annual replanting programme shall be established. Long term replanting programme should be established and review annually, where applicable every 3-5 years.

4.6.2.3 Indicator 3: The business or management plan may contain:

a) Attention to quality of planting materials and FFB.
b) Crop projection: site yield potential, age profile, FFB yield trends.
c) Cost of production: cost per ton e of FFB.
d) Price forecast.
e) Financial indicators: cost benefit, discounted cash flow, return on investment.

4.6.2.4 Indicator 4: The management plan shall be effectively implemented and the achievement of the goals and objectives shall be regularly monitored, periodically reviewed and documented.

4.6.3 Criterion 3: Transparent and fair price dealing

4.6.3.1 Indicator 1: Pricing mechanisms for the products and other services shall be documented and effectively implemented.

4.6.3.2 Indicator 2: All contracts shall be fair, legal and transparent and agreed payments shall be made in timely manner.

4.6.4 Criterion 4: Contractor

4.6.4.1 Indicator 1: Where contractors are engaged, they shall understand the MSPO requirements and shall provide the required documentation and information.

4.6.4.2 Indicator 2: The management shall provide evidence of agreed contracts with the contractor.

4.6.4.3 Indicator 3: The management shall accept MSPO approved auditors to verify assessments through a physical inspection if required.

4.6.4.4 Indicator 4: The management shall be responsible for the observance of the control points applicable to the tasks performed by the contractor, by checking and signing the assessment of the contractor for each task and season contracted.

4.7 Principle 7: Development of new plantings

4.7.1 Criterion 1: High biodiversity value

4.7.1.1 Indicator 1: Oil palm shall not be planted on land with high biodiversity value unless it is carried out in compliance with the National and/or State Biodiversity Legislation.

4.7.1.2 Indicator 2: No conversion of Environmentally Sensitive Areas (ESAs) to oil palm as required under Peninsular Malaysia’s National Physical Plan (NPP) and the Sabah Forest Management Unit under the Sabah Forest Management License Agreement. For Sabah and Sarawak, new planting or replanting of an area 500ha or more requires an EIA. For areas below 500ha but above 100ha, a Proposal for Mitigation Measures (PMM) is required.

4.7.2 Criterion 2: Peat land

4.7.2.1 Indicator 1: New planting and replanting may be developed and implemented on peat land as per MPOB guidelines on peat land development or industry best practice.

4.7.3 Criterion 3: Social and Environmental Impact Assessment (SEIA)

4.7.3.1 Indicator 1: A comprehensive and participatory social and environmental impact assessment shall be conducted prior to establishing new plantings or operations.

4.7.3.2 Indicator 2: SEIAs shall include previous land use or history and involve independent consultation as per national and state regulations, via participatory methodology which includes external stakeholders.

4.7.3.3 Indicator 3: The results of the SEIA shall be incorporated into an appropriate management plan and operational procedures developed, implemented, monitored and reviewed.

4.7.3.4 Indicator 4: Where the development includes smallholder schemes of above 500ha in total or small estates, the impacts and implications of how each scheme or small estate is to be managed should be documented and a plan to manage the impacts developed, implemented, monitored and reviewed.

4.7.4 Criterion 4: Soil and topographic information

4.7.4.1 Indicator 1: Information on soil types shall be adequate to establish the long-term suitability of the land for oil palm cultivation.

4.7.4.2 Indicator 2: Topographic information shall be adequate to guide the planning of planting programmes, drainage and irrigation systems, roads and other infrastructure.

4.7.5 Criterion 5: Planting on steep terrain, marginal and fragile soils

4.7.5.1 Indicator 1: Extensive planting on steep terrain, marginal and fragile soils shall be avoided unless permitted by local, state and national laws.

4.7.5.2 Indicator 2: Where planting on fragile and marginal soils is proposed, plans shall be developed and implemented to protect them and to minimize adverse impacts (e.g. hydrological) or significantly increased risks (e.g. fire risk) in areas outside the plantation.

4.7.5.3 Indicator 3: Marginal and fragile soils, including excessive gradients and peat soils, shall be identified prior to conversion.

4.7.6 Criterion 6: Customary land

4.7.6.1 Indicator 1: No new plantings are established on recognised customary land without the owners’ 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.

4.7.6.2 Indicator 2: Where new plantings on recognised customary lands are acceptable, management plans and operations should maintain sacred sites.

4.7.6.3 Indicator 3: Where recognized customary or legally owned lands have been taken-over, the documentary proof of the transfer of rights and of payment or provision of agreed compensation shall be made available.

4.7.6.4 Indicator 4: The owner of recognised customary land shall be compensated for any agreed land acquisitions and relinquishment of rights, subject to their free prior informed consent and negotiated agreement.

4.7.6.5 Indicator 5: Identification and assessment of legal and recognised customary rights shall be documented.

4.7.6.6 Indicator 6: A system for identifying people entitled to compensation and for calculating and distributing fair compensation shall be established and implemented.

4.7.6.7 Indicator 7: The process and outcome of any compensation claims shall be documented and made publicly available.

4.7.6.8 Indicator 8: Communities that have lost access and rights to land for plantation expansion should be given opportunities to benefit from the plantation development.

Friday, November 20, 2015