BACKGROUND PRE-ASSESSMENTS TO IDENTIFY HCSHCVPEATLAND AREAS WITHIN BAP, SBA AND BMH RKT 2013 COMPARTMENTS

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1. BACKGROUND

On February 1 st 2013, APP made the commitment to immediately stop natural forest conversion within all of its supply chain. APP is using High Carbon Stock HCS to identify areas of natural forest, and High Conservation Value HCV assessments to identify other areas for protection. The result of the HCS HCV assessments will guide the forest managers of APP pulpwood suppliers of which areas they can develop into plantations and those areas they need to maintain as natural forest and HCVs. The FCP Implementation Team - comprised of TFT and APP staff - regularly monitors the implementation of the moratorium on all of APP ’ s pulpwood suppliers ’ areas. A recent audit of all concessions brought the following cases to the attention of the FCP Joint Steering Committee JSC and identified moratorium breaches totaling an area of 69.45 ha of HCS forest within three of APP ’ s suppliers ’ concessions in South Sumatra: PT. Bumi Mekar Hijau BMH – 63.47 ha PT. Sebangun Bumi Andalas SBA – 3.49ha PT. Bumi Andalas Permai BAP – 2.49ha

2. PRE-ASSESSMENTS TO IDENTIFY HCSHCVPEATLAND AREAS WITHIN BAP, SBA AND BMH RKT 2013 COMPARTMENTS

The FCP Joint Steering Committee decided to prioritise pre-assessments to identify HCSHCVpeatland areas in specific zones that were due to be developed in 2013 i.e. the RKT 2013 operational compartments within BAP, SBA and BMH. APP requested that these pre-assessments were carried out in South Sumatra to identify ‘ low risk ’ areas for ongoing plantation development in order to meet its fibre forecasts. This process would allow limited land preparation activities to proceed on low risk areas: that is, areas identified as without conservation values including forests non- 2 HCS, peatland and other important areas i.e. non-HCV. The pre-assessments would allow plantation development to proceed while still allowing APP to fulfil its FCP commitments. This pre-assessment stage is only being applied to RKT areas within these three companies in South Sumatra. Full HCS and HCV including peatland assessments are currently being conducted in the rest of the areas within these same concessions. Pre-assessments are only being undertaken in South Sumatra and not elsewhere by any other APP ’ s suppliers. Three operational maps were generated for the pre-assessment stage designating specific operational RKT 2013 compartments into three broad categories:

a. ALREADY DEVELOPED:

- Developed : Compartments whereby HTI had already been established plantation and canalother infrastructures.

b. NO GO AREAS:

- Potential HCSHCVpeatland: Compartments that potentially contained above ground carbon stocks of more than 35 tonHa or strata Old ScrubBT and Forest CoverHK andor potential HCV, including peatland areas. These compartments were then considered as “ No Go ” areas. - Require further check RFC: Compartments that could not be classified accurately as inconsistencies between the principle data sources; aerial survey, field measurement, and Spot 5 analysis were identified and therefore a more intensive evaluation and field check would need to be conducted prior to any operations. These compartments were then considered as part of the “ No Go ” areas.

c. GO AREAS:

- Non-HCSnon-HCVnon-peatland: compartments that contained above ground carbon stocks of less than 35 tonHa or strata classified as Open LandLT and Young ScrubBM and no potential HCV, including peatland areas. These compartments were then considered as “ Go ” areas. The 3 extent of this area is 14,600 Ha, of which 6,623 Ha had been developed between 1 st February 2013 and 31 st July 2013. Pre-assessments to identify HCSHCVpeatland areas were conducted for all three companies between 29 January and 8 February 2013. The methodology used for the pre-assessment is described in Appendix1.

3. POTENTIAL BREACHES OF THE DESIGNATED “NO GO” AREAS OF 2013