The Internal Control System Requirements For Smallholder Groups
The table below presents the criteria and indicators for Internal Control Systems (ICS) for group formation and management. It is the responsibility of the group manager that all systems laid out in the indicators are complied with at each phase (Eligibility, Milestone A and Milestone B).
A
Group Entity And Group Management Requirements
A1 Criteria
The smallholder group is established as an independent legal entity.
Indicators
A1.1 E(applies to)
The smallholder group shall appoint a Group Manager.
A1.1 MS(A)(applies to)
Same as Eligibility
A1.1 MS(B)(applies to)
Same as Eligibility
A1.2 E(applies to)
The Group Manager shall have and maintain documented evidence of the smallholder group's RSPO membership that include:
A) Legal formation (if necessary as per country of register requirements);
B) Fair and transparent decision-making and governance; and
C) Additional documents per requirements for group formation and management, where applicable
A1.2 MS(A)(applies to)
Same as Eligibility
A1.2 MS(B)(applies to)
Same as Eligibility
A1.3 E(applies to)
The Group Manager shall establish group membership requirements in consultation with group members and implement the requirements for smallholders participating as group members.
A1.3 MS(A)(applies to)
Same as Eligibility
A1.3 MS(B)(applies to)
Same as Eligibility
A1.4 E(applies to)
The Group Manager shall ensure all members understand the group's membership requirements and the commitments stated in the Smallholder Declaration (Refer to Indicator A1.2 E and Annex 2).
A1.4 MS(A)(applies to)
Same as Eligibility
A1.4 MS(B)(applies to)
Same as Eligibility
A2 Criteria
The group manager is responsible for managing the group for certification.
Indicators
A2.1 E(applies to)
The Group Manager shall establish an Internal Control System (ICS) with participation or in consultation with members.
A2.1 MS(A)(applies to)
The Group Manager shall implement the Internal Control System (ICS) on all members.
A2.1 MS(B)(applies to)
Same as MS A.
A2.2 E(applies to)
The Group Manager shall demonstrate understanding of the standard's requirements and have access to sufficient resources to manage the group.
A2.2 MS(A)(applies to)
The Group Manager shall have sufficient capacity, including resouces, to implement the standard's requirements.
A2.2 MS(B)(applies to)
Same as MS A.
A2.3 E(applies to)
The Group Manager shall establish and make accessible capacity building programme(s) for all members that covers the following:
A) RSPO Independent Smallholder (ISH) Standard;
B) Applicable requirements on ISH in RSPO Certification Systems for P&C and RSPO ISH Standard;
C) Best Management Practices (BMPs) guided by the latest RSPO documents (Refer to Annex 4);
D) The RSPO Information System;
E) Record keeping requirements on segregation of certified and non-certified FFB production and sales;
F) Overview of human rights and Human Rights Due Diligence; and
G) Other applicable requirements
A2.3 MS(A)(applies to)
The Group Manager shall implement capacity building programme(s) based on phased approach for all members that covers the following;
A) RSPO Independent Smallholder (ISH) Standard;
B) Applicable requirements on ISH in RSPO Certification Systems for P&C and RSPO ISH Standard;
C) Best Management Practices (BMPs) guided by the latest RSPO documents (Refer to Annex 4);
D) The RSPO Information System;
E) Record keeping requirements on segregation of certified and non-certified FFB production and sales; and
F) Overview of human rights and Human Rights Due Diligence
A2.3 MS(B)(applies to)
The Group Manager shall ensure all members have attended training(s) and able to demonstrate understanding of the following:
A) RSPO Independent Smallholder (ISH) standard's requirements;
B) Best Management Practices (BMPs) guided by the latest RSPO documents (Refer to Annex 4);
C) Record keeping requirements on segregation of certified and non-certified FFB production and sales; and
D) other applicable requirements
B
Policies and management
B1 Criteria
The Smallholder group's Internal Control System (ICS) shall contain documented policies, procedures, and group management requirements.
Indicators
B1.1 E(applies to)
The smallholder group's Internal Control System (ICS) shall contain operational management on internal audit procedures.
B1.1 MS(A)(applies to)
The Group Manager shall implement the Internal Control System (ICS), including conducting an annual internal audit based on a minimum sample of 'x' smallholder members, where x = (√y) x (2.5) x (1.5) and where y is the total number of smallholders in the group.
B1.1 MS(B)(applies to)
The Group Manager shall implement the Internal Control System (ICS), including conducting an annual internal audit based on a minimum sample of 'x' smallholder members, where x = (√y) x (2.5) x (2) and where y is the total number of smallholders in the group.
B1.2 E(applies to)
The Group Manager shall have and maintain information as required in the Smallholder Declaration (Refer to Indicator A1.2 E and Annex 2) and relevant documentation (where applicable) from all members.
B1.2 MS(A)(applies to)
Same as Eligibility
B1.2 MS(B)(applies to)
Same as Eligibility
C
Group Business Planning
C1 Criteria
The smallholder group's business plan is established with the participation and contribution of the group members.
Indicators
C1.1 E(applies to)
The Group Manager shall establish a group business plan with the participation and contribution of the members. The business plan shall include the following:
A) Production and income forecasting based on historical records;
B) Expansion plan;
C) Replanting plans;
D) FFB production cost; and
E) Operational cost(s)
C1.1 MS(A)(applies to)
The Group Manager shall implement the group business plan and review it every two years.
C1.1 MS(B)(applies to)
The Group Manager shall implement the group business plan and assess the group's ability to support itself financially, with results according to the business plan. The group business plan shall be reviewed every two years.
C2 Criteria
The smallholder group's Internal Control System (ICS) is integrated with the group's management plan.
Indicators
C2.1 E(applies to)
The Group Manager shall establish a group management plan that contains the following:
A) Capacity building programme(s) including training(s) to improve farm productivity and understanding of the group members;
B) Approach to strengthen group relationship(s) within the RSPO supply chain; and
C) Continuous improvement plan.
C2.1 MS(A)(applies to)
The Group Manager shall ensure the implemention of the group management plan by the group members, and review it every two years.
C2.1 MS(B)(applies to)
Same as MS A.
D
Group Trading System For Certified Volumes
D1 Criteria
The smallholder group develops and implements procedure(s) and system(s) for tracking of FFB production (i.e., separate record for certified and non-certified, if any) by the group members.
Indicators
D1.1 E(applies to)
The Group Manager shall develop and implement procedure(s) and system(s) to keep track of the FFB production and sales of certified volumes of the smallholder group at least every 6 months, including traceability to smallholder plots and buyers e.g., mill(s) and trader(s).
D1.1 MS(A)(applies to)
The Group Manager shall maintain record(s) of FFB production and sales of certified volumes of the group at least every 6 months, including traceability to smallholder plots and buyers e.g., mill(s) and trader(s).
D1.1 MS(B)(applies to)
Same as MS A.
D1.2 E(applies to)
The Group Manager shall establish and implement a documented procedure to monitor the actual FFB production.
D1.2 MS(A)(applies to)
The Group Manager shall monitor the implementation of the documented procedure to monitor the actual FFB production (i.e., separate record for certified and non-certified, if any) of all group members, to ensure no overselling of RSPO Credits in the RSPO Information System.
D1.2 MS(B)(applies to)
The Group Manager shall monitor the implementation of the documented procedure to monitor the actual FFB production (i.e., separate record(s) for certified and non-certified, if any) and FFB sales of all group members through physical and/or RSPO Credits in the RSPO Information System, to ensure no overselling of FFB Certified Volume(s).
D2 Criteria
The group has a procedure and system for premium distribution.
Indicators
D2.1 E(applies to)
The Group Manager shall establish a documented mechanism of the group's financial gain (i.e., premium) distribution, with the participation of group members.
D2.1 MS(A)(applies to)
The Group Manager shall implemented the agreed documented mechanism of the group's financial gain (i.e., premium) distribution.
D2.1 MS(B)(applies to)
Same as MS A.