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RSPO SCC Standard Core Requirements (Part 1)

SCCS M2a May 2013. RSPO SCC Standard Core Requirements (Part 1). RSPO LEAD AUDITOR SERIES. Control of Certified Palm Oil products in Supply Chain. 1. CERTIFICATION OVERVIEW. RSPO Supply Chain Certification Standard 2011. 2. BOOK & CLAIM Overview & Guidelines. 3. GENERAL REQURIEMENTS

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RSPO SCC Standard Core Requirements (Part 1)

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  1. SCCS M2a May 2013 RSPO SCC StandardCore Requirements(Part 1) RSPO LEAD AUDITOR SERIES

  2. Control of Certified Palm Oil products in Supply Chain

  3. 1. CERTIFICATION OVERVIEW RSPO Supply Chain Certification Standard 2011 2. BOOK & CLAIM Overview & Guidelines 3. GENERAL REQURIEMENTS General for all facilities (inc. CPO mills) 4. MODULAR REQUIREMENTS SG and MB

  4. SCC Standard 1. Certification Overview

  5. SCS Objective To physically manage sustainable palm oil products; or specifically administrate all purchases and sales of certified products 6

  6. SCS Coverage Trade of batches of crude palm oil (CPO) or palm kernal oil (PKO) and its derivatives, products 6

  7. Unit of Certification “All operators who take legal ownership & physically handle (including receipt into storage tanks) RSPO certified sustainable oil palm products” • This applies up and including the end product manufacturer: • First operator: Palm Oil Mill (BC, SG or MB only) • Last Operator: End Product Manufacturer • Facility or parent company are RSPO members

  8. RSPO member Trademark & claims controlled by RSPO rules RSPO member CPO mill SC during P&C audit CPO Mill adopts SG/MB models RSPO member SCCS certifies individual facilities

  9. Non-conformances • All non-conformances are considered Major • Where non-conformances are not closed out within (3) months of the audit, a full re-audit is required RSPO SCCSys 5.3 For NC after certification…1 month to close.

  10. Awarding Certification CB submits to RSPO and updates E-trace RSPO to upload certificate on RSPO website and E-trace system within 1 working week

  11. SCC Standard 2. Book & Claim

  12. Objective To broker direct payments between supporters of sustainable palm oil and CSPO producers 6

  13. Physical trade of palm oil products continues … 1 4 CPO Mill is RSPO Certified Adopts Book & Claim as its SCCS certification model Greenpalm Trademark is only used in any market claims 3 Green Palm member purchases GP certificates from CPO Mill Certified CPO (PKO) registered into Greenpalm Web Database 2

  14. General Requirements • Must be a member of Greenpalm • Only RSPO certified producers can sell certificates (growers or smallholders) • Supporters/End users can buy certificates and claim to support sustainable palm oil. Rules governed by RSPO/Greenpalm • Sales transacted directly or off-market.

  15. Buyers • 1 GP certificate is equivalent to1 mt CPO • Sales no less than 25 GP certificates • Buyers cannot resell certificates • Greenpalm logo and claims must be approved before use • Olechemical derivatives, commonly used by home care products, are guided by conversions determined by the 2012 RSPO Rules for Home and Personal Care Derivatives.

  16. SCC Standard 3. General Requirements

  17. General Requirements Consist of the following elements; • 5.2 Documented procedures • 5.3 Purchasing and goods in • 5.4 Outsourcing activities • 5.5 Sales & goods out • 5.6 Registration • 5.7 Training • 5.8 Claims

  18. Procedures for Implementation • Records and reports to demonstrate compliance • Person-in-charge named & demonstrate awareness of facility procedures 5.2 Documented Procedures

  19. Documentation purchases from suppliers indicate IP/MB/MB • E.g., purchase orders, contracts, material specifications • Checks by facility • RSPO certified in origin • SCC Certificates Valid • Confirmation of trade (e.g., Shipping Announcement and Shipping Confirmations in e-Trace) • Mechanism/procedures for handling non-conformity material/documents. 5.3 Purchasing and goods in

  20. Third-parties can be included in Facility's SCC certification. (e.g., subcontractors for storage, transport) • IF: • Maintains legal ownership • Enforced agreement facility-third parties (allow unrestricted access of CBs) • Documented control procedures • Facility maintains names/contact details of all contractors and inform CB of any updates 5.4 Outsourcing activities

  21. 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 or seller • Loading/delivery date • Certified product description (IP/MB/SG) • Quantities delivered • Transportation information • SCCS Certificate Reference Number 5.5 Sales of Goods Out

  22. Registration in RSPO IT System: • Legal/physical ownership of certified product • All supply chain actors, up to final refinery • MUST • CPO and PKO Mills • Refineries (note: final refinery confirms receipt of shipments only) • EXCLUDES • Traders but not handling physical material (traceability number must be included in shipment documentation) • Operators after final refinery (retailers/end product manufacturer) 5.6 Registration

  23. Defined training plan for implementation of the SCCS requirements. • Training to all staff to implement the SCCS requirements. • Training plan subject to review and updates. • Maintain relevant training records. 5.7 Training

  24. Facility shall only make claims regarding use or support of CSPO in compliance with RSPO Rules for Market Claims. 5.8 Claims

  25. 3 Outsourcing services covered by facility certification 1 Defined Person-in-Charge for SCCS Certificate Number indicated on outgoing documents 5 E-Trace updated when RSPO product delivered by CPO mill or arrives at final manufacturer 4 2 Facility checks validity of RSPO Certificates delivered

  26. SCC Standard 4. Modular Requirements

  27. Modular Requirements • Facility must comply with General Requirements and at least one of the modules. • Several modules can be implemented simultaneously. • CPO Mills must apply either SG or MB • Modules: • A Identity Preserved • B Segregation • C Mass Balance • D CPO Mills (Segregation) • E CPO Mills (MB) • F Multi Site Certification • G Group Scheme NEW 2013 Covered in this section

  28. SEGREGATION A/B – IP & SG

  29. Segregation ensures receipt, processing and storage maintains RSPO products is physically separated Outgoing documentation identifies Certified product 2 3 4 1 Source of Certified Material is identified Product has minimum 95% RSPO certified product

  30. Follows same or less strict model of supplier (IP > SG > MB > Uncertified) Processing

  31. 100-95% of source is identifiable to: • (a) a single mill and supply base (IP) • (b) certified segregated material (SG) • Demonstrate (inc. procedures & record keeping) segregation: • Prevents physical mixing (isolated) • Transport and Storage • (note: handling non conformities or diversion of new crop to mill due to mill shutdowns) Processing

  32. 95% rule • Objective is for 100% CSPO product • Allows for minor contamination up to 5% • Residual oils/products in storage tanks, transport facilities • Tanks/pipes/valves need to have procedures to handle different SCCS systems (SG vs MB)

  33. Records and reports for at least 5 years • Documented proof that supply is traceable: • (a) IP: to a single palm oil mill and supply • (b) SG: certified segregated material • Trade names shall be indicated on relevant documents (e.g., purchase and sales contracts): • [Product Name]/IP or Identity Preserved • [Product Name]/IP or Segreagated Record Keeping

  34. SG Suppy Chain Yield Scheme CPO 100 % 1,000 mt Refined Palm 94 % 940 mt PFAD 5 % 50 mt Losses 1 % 10 mt OLEIN 80 % 752 mt STEARIN 20 % 188 mt Double FracOlein (Super Olein) 65 % 489 mt Palm Mid Fraction 35 % 263 mt Palm Mid Stearin 65 % 122 mt Double Frac Stearin 35 % 66 mt Estimated only (+/- 2%)

  35. MASS BALANCE C - MB

  36. Mixed sources of FFB (certified and non-certified) MB products are purchased MB Yield Scheme used to determine how much MB products can be sold 1 3 Facility maintains an account of volume of certified material received and processed 2 4 Product has minimum 95% RSPO certified product

  37. Follows same or less strict model of supplier (IP > SG > MB > Uncertified) Processing

  38. Records and reports for at least 5 years. • Trade names shall be indicated on relevant documents (e.g., purchase and sales contracts): • [Product Name]/MB or Mass Balance Record Keeping

  39. Quantity of physical RSPO mass balance material inputs and outputs (volume or weight) at the physical site are monitored on a real-time basis. • Accounting of material ensures: • Delivery of MB sales from positive stock • Allows for short selling (sales ahead of actual receipt) • MB volume starts from date it enters the accounting system and is deducted when it is allocated to outputs supplied by the organisation. • MB claims on outputs matches inputs as per yield scheme. Mass Balancing System

  40. MB Suppy Chain Yield Scheme New

  41. SG palm and palm kernel products can be used to support a MB claim, without a physical/chemical link between the SG product and the derivative sold as MB. • However…SG palm oil products cannot be used to offset mass balance claims on palm kernel products or vice versa. Mass Balancing Scheme

  42. Palm Kernel MB Yield Scheme 100 mt palm kernels 45 mt palm kernel oil + 15.8 mt PKO stearin 29.2 mt PKO olein

  43. Companies that purchase segregated palm kernel products can either: • Apply segregated claim to all subsequent derivatives …..OR • Use it to offset sales of equal volumes of MB palm kernel derivatives(not necessarily derived from the segregated product acquired) PK Mass Balancing Scheme

  44. PK MB/SG Yield Scheme

  45. Example: Harmonisation Refinery receives an order for 1,600 mt of CSPO MB Olein. 2,000 mt RBDPO is required to produce 1,6000 mt of Oleine. It has in the RSPO account 5,000 mt MB CPO and 3,000 mt CPO in physical stock. Following should occur: Physical stock is refined to produce 1,600 mt MB Oleine. 2,000 mt is deducted from the RSPO account 400 mt of Stearin is added to the RSPO account. Sales can be affected anytime in the future

  46. Example: Harmonisation Refinery purchases 1,000 mt of CSPO MB. Options for sales: MB 1,000 mt Refined Palm Oil (RBDPO); or MB 800 mtOleine and MB 200 mt Stearin; or MB 520 mt Double FracOlein or 280 mt Palm Mid Fraction etc PFAD, offset MB with equal volumes of SG products Refinery purchases 1,000 mt of MB PK. Options for sales: MB 450 mt PKO; or MB 158 mt PKO Stearin and 292 mt PKO Olein All other derivatives, offset MB with equal volumes of SG products

  47. Example: Combined 50 mt of SG + 10 mt of MB = 60 mt MB 10 mt of non CSPO + 10 mt of SG = 10 mt MB 10 mt of MB + 13 mt MB = 23 mt MB 20 mt of MB + 10 mt of non CSPO = 20 mt of MB

  48. Example: Substitution 1,000 mt SG/IP CPO = 1,000 mt MB of any fractions 1,000 mt SG/IP PKO = 1,000 mt MB of any fractions (e.g., PFAD, etc) BUT cannot buy SG CPO for MB PK fractions or vice versa

  49. SCC Standard Conclusion

  50. Conclusion • The SCCS certificate covers all operators who legally own or physically handle RSPO certified products. • SCCS requirements focus on handling, accounting and communication of use of certified products. • Three supply chain models are covered: • Book & Claim • Segregated and Identity Preserve • Mass Balance

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