Aspects of plantation and mill management, including replanting, that have

SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 14.05 Issue 00 Rev. 1 49of 124 5 ENVIRONMENTAL RESPONSIBILITY AND CONSERVATION OF NATURAL RESOURCES AND BIODIVERSITY

5.1 Aspects of plantation and mill management, including replanting, that have

environmental impacts are identified, and plans to mitigate the negative impacts and promote the positive ones are made, implemented and monitored, to demonstrate

5.1.1 An environmental impact assessment EIA shall be documented.

Major EIA documents AMDAL RKL RPL for palm oil activity covering area of + - 6400 hectares in Subdistrict Pemayung, District Batanghari Jambi province Kuap Village, Senaning, Lubuk Ruso, Teluk Ketapang, Ture, Pulau Betung, Lopakaur, Selat, Olak Rambahan, Pulau Raman and Kaos. Legalization of the environmental documents already available on the Jambi Governor Decree No. 37 Kep.Gub BPMD-PPT 2013 dated 4 April 2013 on Environmental Feasibility Palm Oil Partnership covering an area of 6400 hectares by PT Brahma Binabakti in Subdistrict Pemayung, District Batanghari in Jambi Province. The Head of Regional Investment Board and Integrated Licensing Services Jambi No. 296 Kep.Ka.BPMD-PPT.4 X 2016 is available dated October 10, 2016 about Environmental Permit Activity Palm Oil Partnership Covering an area of + - 6400 hectares in Subdistrict Pemayung, District Batanghari in Jambi Province. EIA documents covering activities such as:  Pre-Construction licensing, socialization, land acquisition, establishment of cooperatives,  Construction employment, procurement of heavy equipment and materials, plantation infrastructure development, structuring and development of conservation areas, land preparation, seeding, terracing, procurement and utilization of water, oil palm planting, maintenance of immature plants  Operations employment, generating plant maintenance, harvesting, waste management, CSR  Post-Operation termination of the partnership, the release of labor, land release Land acquisition is 40 of location permits on an area of 6400 Ha and reduced residential land and flood areas, about 2360 ha. Environmental monitoring matrix operation phase: SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 14.05 Issue 00 Rev. 1 50of 124  microclimate - temperature changes, humidity, rainy days, rainfall, irradiation, wind direction, wind speed - once a year - agricultural lands  Air quality - Ambient air and dust SO2, CO, CO2, NO2, H2S, NH3 and other gases – once a year - the area of oil palm plantations - PP 411999  Water quality surface - TSS, TDS, NH3, NO3-N, NO2-N, H2S, SO4, P, E. Coli, Coliform, AAS, BOD, COD – once a year - the Batang Hari River, Danau Bangko River - PP 822001  Groundwater quality - TDS, turbidity, odor and taste, CaCO3, Na, Fe, NH3-N, NO3-N, NO2-N, H2S, SO4, E. Coli, Coliform – once a year - about wells population - Permenkes 4161990  Soil fertility and soil texture - organic matter content, soil pH, N, P, K, Ca, Mg – once a year - plantations and riparian  Soil erosion - rain erosivitas index, erodibility, land and length factor - once a year - plantations and riparian  Water discharge - once a year - plantations and riparian  Sedimentation - once a year - plantations and riparian  Diversity of wildlife and natural predators  Changes plant intruder organism  employment and business opportunities  Household income  Institutional cooperation  Attitudes and perceptions  Social conflict  Transfer of science and technology  Disease patterns  Environmental Health  Behavioral Health SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 14.05 Issue 00 Rev. 1 51of 124  Means and health infrastructure  Changes traffic and road conditions Conclusion : Conform 5.1.2 Where the identification of impacts requires changes in current practices, in order to mitigate negative effects, a timetable for change shall be developed and implemented within a comprehensive management plan. The management plan shall identify the responsible personpersons. Minor Revised Recommendation Letter of Matrix RPL DELH Palm Oil Activity and Palm Oil Processing Plant No. 660.4 095 BLH.3 II 2016 dated February 23, 2016 from BLH Muaro Jambi to increase the scope of environmental monitoring activities of land application of environmental hygiene and sanitation was available in place. Conclusion: Conform 5.1.3 This plan shall incorporate a monitoring protocol, adaptive to operational changes, which shall be implemented to monitor the effectiveness of the mitigation measures. The plan shall be reviewed as a minimum every two years to reflect the results of monitoring and where there are operational changes that may have positive and negative environmental impacts. Minor There are monitoring reports on RKL RPL from second half of 2016 for POM activities and oil palm plantations in the village of Suko Awin Jaya, District Sekernan, Muaro Jambi. The test results of environmental monitoring carried out include: - Domestic Wastewater – Labling, Jambi - Upper of Sekawan River - Labling, Jambi - Lower of Sekawan River - Labling, Jambi - Monitoring wells 1, 2, 3 and control wells 1, 2 - Labling, Jambi - Upstream and downstream of Putat River, Mendahara River and Kaos River – Labling, Jambi - The soil quality soil intact on water bag 0-30, 30-60 cm - Unilab Perdana - The soil quality soil intact on water bag and tree 0-30, 30-60 cm - Labling, Jambi - The soil quality soil intact in control land 0-30, 30-60 cm - Labling, Jambi - The soil quality soil disturbed in water bag 0-20 cm, 20-40, 40-60, 60-80, 80-100, 100-120 - Labling, Jambi - The soil quality soil disturbed in water bag with trees 0-20 cm, 20-40, 40-60, 60-80, 80-100, 100-120 - Labling, Jambi SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 14.05 Issue 00 Rev. 1 52of 124 - The soil quality soil disturbed in the control area of 0-20 cm, 20-40, 40-60, 60-80, 80-100, 100-120 - Labling, Jambi - Air quality - ambient, odor - public housing - Labling, Jambi - Air quality - emissions - central generator Perkins, genset afdeling E Changfa, - Labling, Jambi - Air quality - ambient, the odor - a large office area, housing employees - Labling, Jambi - The air quality emissions - flue boiler No. 1, No. 2, generator No. 1, No. 2 - Labling, Jambi All parameters of the test results for the environmental monitoring are compliance with environmental quality standards. Conclusion : Conform 5.2 The status of rare, threatened or endangered species and high conservation value habitats, if any, that exist in the plantation or that could be affected by plantation or mill management, shall be identified and operations managed to best ensure that they are maintained andor enhanched

5.2.1 Information shall be collated in a High Conservation Value HCV assessment

that includes both the planted area itself and relevant wider landscape-level considerations such as wildlife corridors. Major Inti Own estate HCV assessment for inti conducted on May 2013 with team that lead by Ahmad Faisal Siregar, S.Hut, M.Si. HCV identification result stated that there is only one type of HCV, i.e Anak Mendahara river and Suak Putat river HCV 4.1 with total wide 30,66 ha. Pemayung HCV assessment for Pemayung estate conducted in April 2016 by a team lead by Dr. Ir. Nyoto Santoso, MS ALS 14 013 MS .The scope of the assessment is the Location Permit PT Brahma Binabakti Pemayung estate covering an area of 6,000 ha. The results of the HCV identification mentions there are three types of HCV, ie HCV-1 Lutung Simpai-Presbytis melalophos and Buaya Senyulong-Tomistoma schlegelii, HCV-4 riparian of Bangko and Batanghari river, and HCV 6 Pematang Saung Temple with a total area of 442, 75 Ha. PT. Brahma Binabakti have a map of new licenses moratorium in which includes information about location of peat area, protected areas sanctuary nature protection, and primary forest located around the location of the Pemayung estate. From the map it can be seen that the location of the Pemayung estate does not overlap with the protected areas as mentioned above. Conclusion: conform SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 14.05 Issue 00 Rev. 1 53of 124

5.2.2 Where rare, threatened or endangered RTE species, or HCVs, are present or

are affected by plantation or mill operations, appropriate measures that are expected to maintain andor enhance them shall be implemented through a management plan. Major Inti Based on the identification of HCV assessment, in the inti estate of PT. Brahma Binabakti there are no fauna in the category of RTE according to the IUCN Red List. However discovered species protected under PP 7 In 1999, ie Kucing hutan, Elang tikus, burung Raja Udang Meninting, Burung Madu Belukar, Burung Madu Sriganti, and Ular sanca. Pemayung Estate Based on the identification of HCV assessment, in the inti estate of PT. Brahma Binabakti there are no fauna in the category of RTE according to the IUCN Red List. It were Lutung Simpai Presbytis melalophos dan Buaya Senyulong Tomistoma schlegelii. To conserve the fauna of PT. Brahma Binabakti. The Company conducted the efforts : - Carry out socialization to employees and the public to not catch and kill animals in the area of PT. Brahma Binabakti and smallholders. Socialization conduct by installing signboard, conduct direct socialization to the public. - Perform enrichment of trees on the riparian which are often seen presence of animals - To monitor the presence of wildlife populations periodically and report to the Badan Lingkungan Hidup. - Provide sanctions to workers who violate related regulations wildlife. However, the company need to standardize the checklist that is used for monitoring wildlife that includes a checklist of the threat of poaching. This has been issued as observation no.1. Conclusion: Observation No.1 5.2.3 There shall be a programme to regularly educate the workforce about the status of these RTE species, and appropriate disciplinary measures shall be instigated in accordance with company rules and national law if any individual working for the company is found to capture, harm, collect or kill these species. Minor HCV socialization to KUD has been done as is done in KUD Akso Dano on 21 September 2016 by the Eko Bayu Assistant CSR. Things that has been delivered in socialization are: - the protection of high conservation value areas - protection of of riparian - prohibition to hunt animals SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 14.05 Issue 00 Rev. 1 54of 124 - Prevent river to be pollute due to the plantation activity. HCV also been socialized in Pemayung Estate on 20-21 January 2017 by Mrs Irena Ginting . It was delivered was the presence of HCV in the estate area and its efforts to maintain the sustainability. Conclusion: conform 5.2.4 Where a management plan has been created there shall be ongoing monitoring: The status of HCV and RTE species that are affected by plantation or mill operations shall be documented and reported; Outcomes of monitoring shall be fed back into the management plan. Minor  There is a master plan for the monitoring and management of HCV area PT. Brahma Binabakti Own and Pemayung Estate year period from 2017 to 2021 that were made based on recommendations from the assessment team HCV.  There were reports of monitoring the presence of wildlife in the area HCV PT. Brahma Binabakti Own and Pemayung are reported every 6 months to BLHD Muaro Jambi. Sampling of the Minutes of the document submission for HCVA management No: 122 584 BBB SKR-SUS-SK I 2017 dated January 10, 2017 Conclusion: Conform 5.2.5 Where HCV set-asides with existing rights of local communities have been identified, there shall be evidence of a negotiated agreement that optimally safeguards both the HCVs and these rights. Minor Based on the own estate and Pemayung estate HCV identificatio, none of the HCV location are intersect with usage rights of local communities so that there is no agreement with the local community Conclusion: conform 5.3 Waste is reduced, recycled, re-used and disposed of in an environmentally and socially responsible manner

5.3.1 All waste products and sources of pollution shall be identified and

documented. Major Estimates of Fiber Fuel Usage Month Usage ton Feb 2016 1693 SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 14.05 Issue 00 Rev. 1 55of 124 Mar 1461 Apr 1454 Mei 1369 Jun 1448 Jul 1410 Agust 2272 Sept 2982 Okt 3223 Nov 3232 Des 3096 Jan 2017 2903 Shells Month Usage ton Feb 2016 615 Mar 293 Apr 140 Mei 127 Jun 222 Jul 407 Agust 1192 Sept 2560 Okt 2850 Nov 2447 Des 2111 Jan 2017 1384 Boiler Ash Month Usage ton Feb 2016 216 Mar 167 Apr 199 Mei 185 Jun 205 Jul 217 Agust 321 Sept 429 Okt 482 Nov 474 Des 448 Jan 2017 406 SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 14.05 Issue 00 Rev. 1 56of 124 Month Usage ton Feb 2016 216 Mar 167 Apr 199 Mei 185 Jun 205 Jul 217 Agust 321 Sept 429 Okt 482 Nov 474 Des 448 Jan 2017 406 Empty Bunch Month Usage ton Feb 2016 3266 Mar 2667 Apr 3065 Mei 2726 Jun 2693 Jul 3079 Agust No data Sept No data Okt No data Nov 6603 Des 7587 Jan 2017 6733 Conclusion: conform 5.3.2 All chemicals and their containers shall be disposed of responsibly. Major The Decree of the Head of One Stop Integrated Services Muaro Jambi No. 04 Kep.Ka.BPTSP III 2015 dated March 25, 2015 about Hazardous Waste Management Permit for temporary storage activity PT BBB valid for five 5 years with the coordinates location at S 01 20 50.6 and E 103 19 34.1. Temporary storage of hazardous waste derived from activities of Estate and POM in the Sekernan District and Estate in the Pemayung District. Hazardous waste that allowed to be stored: used oil, used oil filters, used cloth waste, used gloves, hazardous contaminated packaging, used fluorescent lamp, used batteries and medical waste with the time savings that SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 14.05 Issue 00 Rev. 1 57of 124 allowed for 365 days. Hazardouse waste storage report for the period of October, November and December 2016 were available and reported to the related institutions. The cooperation agreement of hazardous waste transport and destruction with PT Kenali Indah Sejahtera No. 53MOU-KISII2017 dated February 20, 2017 was available in place. The Ministry of LHK Decree No. 06.7.04 2015 dated April 30, 2015 which is valid for 5 years on Hazardous Waste Management Permit for Hazardous Waste Collection for PT KIS was available in place. There was Recommendation of hazardous waste transportation for PT KIS based on Decree of KemenLHK No. S-279 PSLB3-VPLB3 2015 dated July 30, 2015 for truck No. Pol. BH 9149 AR, BH 8905 XU. Permits are available specifically for dangerous goods transporting from Ministry of Transportation No. SK.3681 AJ.309 DJPD 2016 150710881BB-0001. The Decree of the BLH Head of Jambi No. 68 of 2014 concerning the environmental permit collection and transport activities of hazardous material by PT KIS dated October 14, 2014 was available. Conclusion: conform 5.3.3 A waste management and disposal plan to avoid or reduce pollution shall be documented and implemented. Minor Documentation of Spraying Work Instruction No. IK-12 BB-SAWIT 2014 is available. In the Work Instruction, it is determined that after spraying, used PPE is cleaned in the apron loose area and discharged to the waste container for PPE leaching. Waste water PPE that has been collected in the waste container is reused to be applied to the field. The clean the sprayer tools after spraying in the spray washer. Amount of Implementation of waste water from PPE application as follows: Period Total Applied liter March 2016 280 April 2016 60 May 2016 500 June 2016 860 July 2016 560 SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 14.05 Issue 00 Rev. 1 58of 124 August 2016 460 September 2016 440 October 2016 680 November 2016 300 December 2016 340 January 2017 900 February 2017 560 Observations at the field have been conducted at afdeling G and rinsehouses which have secondary detention and control of the output water from rinsehouses with a waterproof storage tub. The remaining water of PPE washing in the bath is reused for on-site applications. The Company shall ensure that domestic waste management is governed by the applicable regulations Regulation 812012. At the time of the visit to the office afdeling H, domestic solid waste is still mixed between organic and non organic waste. This has been raised as observation. Conclusion : Observation No.5 5.4 Efficiency of fossil fuel use and the use of renewable energy is optimized 5.4.1 A plan for improving efficiency of the use of fossil fuels and to optimise renewable energy shall be in place and monitored. Minor The company has the Program Plan for Solid and Liquid Waste, Water Conservation Program Plan Power House, Laboratories and Emission Control Plan with Maintenance Plan in the year 2017. The company has recorded the use of solar boiler efficiency for shells and fiber yearly. Conclusion : Conform 5.5 Use of fire for waste disposal and for preparing land for replanting is avoided except in specific situations, as identified in the ASEAN guidelines or other regional best practice.

5.5.1 There shall be no land preparation by burning, other than in specific

situations as identified in the ‘Guidelines for the Implementation of the ASEAN Policy on Zero Burning’ 2003, or comparable guidelines in other Major SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 14.05 Issue 00 Rev. 1 59of 124 regions. The company has the principle SOP land clearing without burning zero burning contained in Agronomy Procedure revision 1 with the copy number: TAP-PR AGR OP-001 V09-1. Conclusion : Conform 5.5.2 Where fire has been used for preparing land for replanting, there shall be evidence of prior approval of the controlled burning as specified in ‘Guidelines for the Implementation of the ASEAN Policy on Zero Burning’ 2003, or comparable guidelines in other regions. Minor The Company does not conduct land clearing without burning. The company opened its land using uprooted system before conducted stacking with the heavy equipment excavators and bulldozers as set in SOP No. 009 PT II 2014. Conclusion : Conform 5.6 Plans to reduce pollution and emissions, including greenhouse gases, are developed, implemented, and monitored.

5.6.1 An assessment of all polluting activities shall be conducted, including

gaseous emissions, particulatesoot emissions and effluent see Criterion 4.4 Major Company has established Greenhouse Gas Emission Reduction procedures No. TAPSOP120-HCV004 which contains the identification and reduction of greenhouse gases. Company has conducted identification and inventory of GHG emission based on data from 2016. Sources of GHG emission come from land clearing, FFB transportation from estate to mill, fertilizer and pesticide application, genset and POME. Total emissions in 2016 from estate operational was -9,140.73 tCO2e and total emissions in 2016 from mill was 37,470 tCO2. Conclusion: conform 5.6.2 Significant pollutant and greenhouse gas GHG emissions shall be identified, and plans to reduce or minimize them implemented Major Company has established SOP of GHG Mitigation as stated on internal memo MI- 003MDSUSTXI2012, dated November 12th, 2012 regarding to minimize GHG emission from estate and POM. Company has conducted identification and inventory of GHG emission based on data from 2016. Sources of GHG emission come from land clearing, FFB transportation from estate to mill, SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 14.05 Issue 00 Rev. 1 60of 124 fertilizer and pesticide application, genset and POME. Total emissions in 2016 from estate operational was -9,140.73 tCO2e and total emissions in 2016 from mill was 37,470 tCO2. Conclusion: conform 5.6.3 A monitoring system shall be in place, with regular reporting on progress for these significant pollutants and emissions from estate and mill operations, using appropriate tools. Minor The liquid waste generated from FFB processing in mill was used as land application through the process in POME. Waste water management report in 4th quarter of 2016 has been submitted to related agency related to the obligations of the permit. Conclusion: conform 6 RESPONSIBLE CONSIDERATION OF EMPLOYEES AND OF INDIVIDUALS AND COMMUNITIES AFFECTED BY GROWERS AND MILLS

6.1 Aspects of estate and mill management that have social impacts are