RSPO SCC Standard Group Certification (Part 3)

1. SCCS M2c May 2013 RSPO SCC StandardGroup Certification(Part 3) RSPO LEAD AUDITOR SERIES

2. RSPO Supply Chain Certification Standard 2011 • 1. GROUP SCHEME Module G • RSPO Membership • Group membership Criteria

3. SCCS for Groups 1. System Requirements

4. Overview • Relevant sections of the RSPO SCC System • Section 4 - Accreditation • Section 5 - Certification Process • Modification to SCCS Report & Certificate

5. Group Scheme Certification The modified SCCS System defines the following elements; • Eligibility • Criteria for Operation • Certification Units • Risk Analysis • Audit Sampling & Surveillances • New Members • Audits • Certificates

6. Eligibility • A Group needs to be a member of the RSPO (Supply Chain Associate or Ordinary Member) • All members (individuals or companies) are independently owned • Uses up to 500 mT of oil palm products per annum • Members can be in different countries

7. Criteria for Operation • All members have a contractual relationship with the Group • All members are required to meet the SCCS requirements • The Group manages an Internal Control System (ICS) which ensures members conformance to the SCCS • The Group appoints a Group Manager

8. Criteria for Operation • All members must adopt the supply chain systems at their facility levels only • Only options for Segregated or Mass Balance systems can be used

9. Audit Procedures • CB shall define in their documented auditing procedures a Risk Analysis System: • determine level of sampling required • level of stratification required • Risk must consider: • Homogeneity of the group (e.g., similar management system/processes) • Types of products processed • Relationship between Group-Group Members (independent vs biased)

10. Audit Sampling • At least 25% of all samples chosen at random • Lowest risk category defined shall follow the audit formula prescribed (see below) • All members must be audited within the 5 year period

11. Compliance audits and renewals: • The Group ICS and samples of members • Minimum (low risk): rounded up (√ total no of members) • Surveillance • The Group ICS and samples of members • Minimum (low risk): rounded up 0.6 x (√ total no of members) • New Members • All new members must be identified as a separate audit group • At least 25% of sites selected randomly Audit Formula

12. Example 1: Audit Formula • Initial Assessment: Group with 50 members, categorized by CB as low risk • Number of min audits = √ (50 + 1Group Manager) = √51 =7.14 = 8 • Of these, 25% must be randomly selected (i.e., 2) • i.e., total of 8 audits per annum including Group Manager

13. Example 2: Audit Formula • Year 2 Assessment: Group with 50 members and 10 new members (all low risk) • Number of min audits = 0.6 √ (50 + 1Group Manager) = 0.6√51 =0.6 X 7.14 = 4.28 = 5 • Of these, 25% must be randomly selected (i.e., 1.75 or 2) • and • Number of min audits = √ 10 = 3.16 = 3 • Of these, 25% must be randomly selected (i.e., 1) • i.e., total of 8 audits for that year

14. Audit Procedures • CB shall define in their documented auditing procedures for Group or Member Failure. • Failure results in corrective actions, suspension or expulsions from the Group. • E.g., Group Failure: • Failure to meet ICS requirements (administration, record-keeping, use of RSPO trademark) • Failure to comply with requirements of the RSPO CB • Failure of all above, by a number of group members

15. Audit Procedures • Failure results in corrective actions, suspension or expulsions from the Group. • E.g., Member Failure: • Failure to meet RSPO SCCS requirement (administration, record-keeping, use of RSPO trademark) • Serious or persistent failure to comply with requirements of the RSPO CB

16. Certification • Certificate issued to Group Entity and members audited (audited or all members at time of audit) • Certificate valid for 5 years with annual surveillance

17. SCCS for Groups 2. Standard Requirements

18. Overview • Group Scheme is made up of independent organisations that agree to abide by the Group membership rules. • The rules ensure that members comply to the RSPO SCCS requirements. • Group Manager is responsible for managing members compliance, enforced through an internal control system (ICS). • Group members must apply either SG or MB models at the facility level.

19. Membership requirements

20. Independent legal entity (org/idv) • 500 mT of palm oil use per annum. If exceeds, to leave at anniversary of membership. • Membership is voluntary but formally agrees to join the group. Agrees to meet RSPO SCCS requirements of given models. • Use of RSPO Certificate Number & Unique Identifier on PO, Delivery Note, Sales Invoices and transport-documentation. Group Membership Requirements

21. Full authority to manage the group • Defines the geographic scope of the group • Payment of fees to the RSPO • Conditions and requests for corrective actions are implemented • Authority to remove members • Define, manage and update Group Rules, Polices and ICS Group Manager Requirements

22. Sufficient resources to run and manage the group • Documented system • Mission & Objectives • Policies & Procedures (operational management) • Decision Making • Rules of the Group • Group Management structure Group Requirements

23. Understand requirements of the SCCS • No conflict of interest • Communicate in relevant language/English • Competent to conduct Internal Audits, as per SCCS requirements Group Manager/Team Requirements

24. Documentation & monitoring of individual membership status, production processes and relevant aspects of SCCS • Maximum number of members the system supports • Clear policies/procedures for communication between Group Manager-Members. Group Management Requirements

25. Management Procedures

26. Documented roles/responsibilities for Group Manager • Procedures for new members after certification audits • Procedures for training/information (new and existing members) • Procedure for annual internal audits (including new members) • Procedure for updates to the group (including membership) • Procedures for members that exceed 500 mT • Procedures for members sanctions, corrective action requests, suspension, etc Membership

27. Procedures • training/information (new and existing members) • Stratification of group members • annual internal audits (including new members) • updates to the group (including membership) • members that exceed 500 mT • Use of RSPO logo/trademark • Central database of movements in/out of RSPO products by member Procedures

28. Members supplied with copies or explained: • RSPO SCCS • Rules of Market Communication & Claims • Certification Process • Group Manager needs and rights for CB to access group member’s documentation/site • SCCS Public Documentation • Use of the SCC Certificate Number • Obligations of Group membership • Cost associated with the group membership Members

29. Group Record

30. All group records maintained for 5 years • Central records include: • List of names and addresses • Full contact details • Date of membership • Sub-code assigned to follow group certificate number • Details of all sites (including multi-sites) • Membership date signed • Date leaving the group (and why) Membership

31. Central records include: • Summary of all RSPO products purchased.sold • SC models used • Projected use of oil palm (mT/annum) • Gross quantity of RSPO certified products used (mT/annum) • Uses of RSPO Logo and Trademark Palm Products

32. Central records include: • Audits conducted prior to acceptance • Annual monitoring records • Corrective Action requests • RSPO (member) procedure manual Compliance

33. SCCS for Groups Conclusion

34. Conclusion • Group Certification is an option for small and medium enterprises or individuals. Their maximum use of palm oil does not exceed 500 mT per annum. • Members are governed by the Group rules or internal control system. These rules ensure that members are compliant to the SCCS requirements.