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Oilpalm.wildasia.org RSPO SCC Standard Core Requirements (Part 1) RSPO LEAD AUDITOR SERIES SCCS M2a May 2013.

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Presentation on theme: "Oilpalm.wildasia.org RSPO SCC Standard Core Requirements (Part 1) RSPO LEAD AUDITOR SERIES SCCS M2a May 2013."— Presentation transcript:

1 oilpalm.wildasia.org RSPO SCC Standard Core Requirements (Part 1) RSPO LEAD AUDITOR SERIES SCCS M2a May 2013

2 Control of Certified Palm Oil products in Supply Chain

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

4 SCC Standard 1. Certification Overview

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

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

7 Product List

8 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

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

10 Non-conformances RSPO SCCSys 5.3 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 For NC after certification…1 month to close.

11 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

12 SCC Standard 2. Book & Claim

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

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

15 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.

16 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.

17 Audit Requirements RSPO determines the audit eligibility All members who redeem > 500 certificates or CPO mills via RSPO audits Audits timed after the trading period (1 April to 31 October) Checks Total redeemed volume vs Physical Palm/Palm Kernel volume vs Greenpalm claims Verified by SCCS CB

18 GP Rules Membership open to growers and supporters inc. processors/end users or retailers … RSPO members or not (no reg fee if RSPO member) GP = a brokerage between “claims” and producer of certs GP = diff sustainable palm products each = separate market Producer sales via Market Sale or Off Market Cannot buy less than 25 GP certificates Buyers = No resale; buy cert and make redemption certificates Producer = must inform GP …annual verification shortfall, ie deduct from MB sales, etc within 3 months of year end (GP will deduct available GP certs or allows for certs to be bought); 31 March cancel all unsold certs Accounting … GP must have access … determined by RSPO EB

19 GP Trademark Members allowed to use to TM logo // with conditions GP to approve the samples for use first

20 SCC Standard 3. General Requirements

21 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

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

23 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

24 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

25 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

26 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

27 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

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

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

30 SCC Standard 4. Modular Requirements

31 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

32 A/B – IP & SG SEGREGATION

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

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

35 100-95% 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

36 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)

37 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

38 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 Palm Mid Stearin 65 % 122 mt Double Frac Stearin 35 % 66 mt Double Frac Olein (Super Olein) 65 % 489 mt Palm Mid Fraction 35 % 263 mt Estimated only (+/- 2%)

39 C - MB MASS BALANCE

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

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

42 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

43 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

44 MB Suppy Chain Yield Scheme New

45 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

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

47 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

48 PK MB/SG Yield Scheme ModelYield Scheme MB 100 mt PK --> 45 mt PKO --> 15.8 mt PKO Stearin + 29.2 PKO Olein SG-aApply segregated claim to all derivatives SG-b Offset equal volumes of MB PK-derivatives with SG PK-products

49 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: 1.Physical stock is refined to produce 1,600 mt MB Oleine. 2.2,000 mt is deducted from the RSPO account 3.400 mt of Stearin is added to the RSPO account. Sales can be affected anytime in the future Example: Harmonisation

50 Refinery purchases 1,000 mt of CSPO MB. Options for sales: 1.MB 1,000 mt Refined Palm Oil (RBDPO); or 2.MB 800 mt Oleine and MB 200 mt Stearin; or 3.MB 520 mt Double Frac Olein or 280 mt Palm Mid Fraction etc PFAD, offset MB with equal volumes of SG products Example: Harmonisation Refinery purchases 1,000 mt of MB PK. Options for sales: 1.MB 450 mt PKO; or 2.MB 158 mt PKO Stearin and 292 mt PKO Olein All other derivatives, offset MB with equal volumes of SG products

51 1.50 mt of SG + 10 mt of MB = 60 mt MB 2.10 mt of non CSPO + 10 mt of SG = 10 mt MB 3.10 mt of MB + 13 mt MB = 23 mt MB 4.20 mt of MB + 10 mt of non CSPO = 20 mt of MB Example: Combined

52 1.1,000 mt SG/IP CPO = 1,000 mt MB of any fractions 2.1,000 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 Example: Substitution

53 SCC Standard Conclusion

54 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

55 Questions? E: advisory@wildasia.org W: oilpalm.wildasia.org

56 Conversion rates…? SCC yields Rules on outsourcing Multi site certification Definition of Central Office What basic info required on “sales out” What if there is an overproduction CPO On a corporate website, RSPO logo and text “A member and supporter of sustainable palm oil since 2007” Refinery in Malaysia sells refined oil to customers in Rotterdam via an independent transporter with its own bulking facility. Does the transporter need to be a RSPO member? Mixing during bulking but no procedure in place, can the certificate be maintained?

57 What are the minimum requirements of an SCCS auditor? What are the core aspects of ISO19011? NEED a REFERENCE What must be covered during the closing meeting? What information must be included in the SCCS Certificate? What is the no of days to inform RSPO after the cert is issued ? If a NC is raised by a complainant to the CB 5 months after the SCCS audit, what must the CB do?

58 Questions from participants 1.What if the mill is SG but at certain times in a year they take in MB products because boiler in another mill is shut down for maintenance (based on actual scenario). Mill is required to take in the products from the uncertified mill because they could be supplied by smallholders. Cannot let it go to waste. Company must have procedures stating course of action in this scenario Downgrade to MB for ‘that periodically’  Need to inform CB?  Need to update e-Trace? (**Apparently someone said no need) 2.Communication and trademark – must company pay licensing fee to RSPO to use trademark? 3.Can an “affiliate member” or “supply chain” member also be eligible to use trademark logo? Note: More case studies on perime?? Of what is seen on slide no 12 Note: More case studies on trademark logo / product communication used Q’s – to be answered or incorporated into case study


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