Aspects of estate and mill management that have social impacts are identified in a

SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 14.05 Issue 00 Rev. 1 77of 164 Estate: - Land conversion = 75152.37 tCO 2 e - Crop sequestration = -35522.63 tCO 2 e - N 2 O emissions = 3373.39 tCO 2 e - Fuel consumption = 307.82 tCO 2 e - Sequestration in conservation area = -0.18 tCO 2 e Mill: - POME = 8530.13 tCO 2 e - Fuel consumtion = 641.13 tCO 2 e - Export of excess electricity = -1.75 tCO 2 e - Sale of Mill = -2515.37 tCO 2 e Therefore, the finding can be closed. 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 identified in a

participatory way, and plans to mitigate the negative impacts and promote the positive ones are made, implemented and monitored, to demonstrate continuous improvement

6.1.1 A social impact assessment SIA including records of meetings shall be

documented. Major SIA has been conducted by Daemeter Consulting on June 2015 in conjunction with HCV Assesment. The company has followed up for all SIA recommendation by setting management plant to mitigate all negative impact as decected during SIA Assesment, in the form of CSR and Community Development Program. The Company has set up short term per year and long term 5 years program. The Program has has contained access and use rights, Economic livelihoods e.g. paid employment and working conditions, etc. estated in RSPO PC criteria 6.1.1. Conclusion : Conform 6.1.2 There shall be evidence that the assessment has been done with theparticipation of affected parties. Major The Company has identified the influential stakeholders with the companys presence. The company has identified the villages surrounding the company, with a total of 12 villages. The company has SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 14.05 Issue 00 Rev. 1 78of 164 made regular visits to village heads, traditional leaders and religious leaders. We recommend that companies create mappings outlined in a one-year visit program to ensure that villages are visited annually. It is recommend that the results of visits to be completed with minutes as a form of assurance that all input aspiration is recorded. Conclusion : Conform 6.1.3 Plans for avoidance or mitigation of negative impacts and promotion of thepositive ones, and monitoring of impacts identified, shall be developed inconsultation with the affected parties, documented and timetabled, includingresponsibilities for implementation. Major The Company has already made a CSR plan to reduce or eliminate the negative impact detected in the SIA report, the CSR plan is supplemented with timetable and cost for each program. CSR plans 20162017 include other fire-free villages, scholarships for unrollment fees, and school renovations in two villages, infrastructure improvements roads, bridges and public facilities. Community development programs such as the cultivation of vegetables and fish tilapia, catfish, and catfish. Budget realization for 20162017 is Rp 470,200,000. The budget for CSR for fiscal year 20172018 is Rp 516,820,000. Conclusion : Conform 6.1.4 The plans shall be reviewed as a minimum once every two years and updated asnecessary, in those cases where the review has concluded that changes shouldbe made to current practices. There shall be evidence that the review includesthe participation of affected parties. Minor The Company already has data containing plans and proof of realization of CSR program of fiscal year 20162017. Sampling by 2016 there are CSR plans related to the creation of clean water facilities for Harapan Baru Village planned in June-november 2016 but until the time the audit has not been realized. Based on CSR program of fiscal year 20172018 the program is not re-listed. Associated with CSR program found mismatch among others: a. No review of the fiscal year 20162017 was reviewed from the previous years implementation to ensure the effectiveness of previous CSR activities and the assurance of its implementation. b. There is no documentation to ensure a visit to the community that ensures the following things have been reviewed. • Access and use rights; • Economic livelihoods e.g. paid employment and working conditions; • Subsistence activities; SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 14.05 Issue 00 Rev. 1 79of 164 • Cultural and religious values; • Health and education facilities; • Other community values, resulting from substantial migrant labor force. This finding is raised as minor non conformity Conclusion : Minor Nonconformity No. 3 6.1.5 Particular attention shall be paid to the impacts of smallholder schemes wherethe plantation includes such a scheme. Minor The company has six cooperatives, namely KUD Subur Makmur, Kopbun Titan Makmur, KUD Bukit selendang Jaya, Koptan Budi Asih, Kopbun Mitra Sejahtera, and Kopbun Karya Jaya in cooperation with the company in the form of smallholder scheme. Based on the results of the interviews to the cooperative, information on the CSR program has been conducted, such as the assistance of road piles for infrastructure, assistance in customs events, scholarships for students in the area, and school rehabilitation assistance. Conclusion : Conform 6.2 There are open and transparent methods for communication and consultation between growers andor mills, local communities and other affected or interested parties

6.2.1 Consultation and communication procedures shall be documented.

Major The company already has SOP COM PPG CA 02 SOP, rev. 00, dated September 29, 2016, which regulates effective communication, consolidation and participation systems with stakeholders. In the procedure explains that the list of stakeholders is updated and verified periodically once a year. Conclusion : Conform 6.2.2 A management official responsible for these issues shall be nominated. Minor The company has made systematic in recording of incoming and outgoing mail to ensure that every request for information has to be responded within 14 working days reffered to Procedure No. COM PPG CA 01 SOP Procedure, rev. 01, dated 01 June 2017. The company has determined the communication mechanism with the hierarchy system from the mill estate manager to the director level. SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 14.05 Issue 00 Rev. 1 80of 164 Conclusion : Conform 6.2.3 A list of stakeholders, records of all communication, including confirmation of receipt and that efforts are made to ensure understanding by affected parties, and records of actions taken in response to input from stakeholders, shall be maintained. Minor The Company already has a list of stakeholders where the contents include provincial, sub-district and village groups, partnership plasma, customary leaders, community leaders and religious leaders, NGOs, company names, and contactors suppliers. In the list there is information, name of agency, name of person in charge contact person, address, and phone number that can be accessed. The company has determined the authority of responding the information request with the hierarchy from the mill estate manager to the director level. If there are problems that can not be resolved, then interested parties are welcome to contact RSPO in section of Dispute Settlement Facility Advisory Group. The company has already conducted socialization related to the procedure and the time frame of giving the answer to the stakeholders. Conclusion : Conform 6.3 There is a mutually agreed and documented system for dealing with complaints and grievances, which is implemented and accepted by all parties

6.3.1 The system, open to all affected parties, shall resolve disputes in an effective,timely

and appropriate manner, ensuring anonymity of complainants andwhistle-blowers, where requested. Major During certification audit, major finding has been issued as follows : Based on verification, it has been found that workers clearly did not understand the mechanism of making a complaint confidentially and they also did not know the existence of complaint box facilities. During follow up audit, it was found as follows : The company has already had SOP for Receiving Information and Settlement of Complain and Conflict COMPPGCA01 SOP. In the SOP stated when a complaint has been made, it must be done in stages Clause 5.4-Responsibility. Based on the field verification, the sampling of workers interview was taken at the time of the morning muster in division, harvesters in division 5, and sprayers fertilizers in block H33 division 5. All of the interviewed workers clearly did not understood the confidentially complaints mechanism which was established by the company. They also did not know the telephone number that can be contacted as well as protection to the workers who make complaints. In addition, the workers stated that whenever there is a complaint, a complaint must be SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 14.05 Issue 00 Rev. 1 81of 164 made hierarchically first to the foreman, then to the assistant and then to the HRD and it will not be allowed to directly report to the superior above or the other superior. Therefore, the findings can not be closed and subject to suspension. During surveillance audit, it was found as follows : The company has revised procedure for external complaint handling receiving information, complaint, and conflict settlement : COMPPGCA01SOP. The procedure has contained a provision by prioritizing consensus, but it only happened when there is an occurence of anarchist activity and the presence of policemilitary are necessary for controlling situation. The military should not be related to the public affair. Based on the ASA1, it can be ensured that the company has already had procedure for complaints and grievance and has already full implemented its procedure. The complaint can be allowed to directly report to the superior above or the other superior. The procedure has already covered about anonymous in submitting complaint. Conclusion : Conform 6.3.2 Documentation of both the process by which a dispute was resolved and the outcome shall be available. Major There is a case of land lawsuit that has not finished such Anang Dari. This case has been discussed in meeting with Departement of Agriculture of Ketapang District on September 21 st , in the year of 2011. Based on the information from the meeting’s note, the land has already handed over from Maicam, Mencalang, Galis, Galing. Conclusion : Conform 6.4 Any negotiations concerning compensation for loss of legal or customary rights are dealt with through a documented system that enables indigenous peoples, local communities and other stake holders to express their views through their own representative institutions

6.4.1 A procedure for identifying legal, customary or user rights, and a procedure for

identifying people entitled to compensation, shall be in place. Major The Land compensation is set in Land procedure LCPPPGPR01SOP. For indigenous land has been covered in this procedure at point 6 about other thing which states that Land Indigenous Rights set in local rules and or through participatory mapping of indigenous territories by customary law communities that recognized by customary law communities that refers to Pemendagri no. 522014 about guidelines recognition and protection of indigenous people and Minister of Agriculture regulations No. 51999 about guidelines for problem solving of community land rights. SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 14.05 Issue 00 Rev. 1 82of 164 Based on information from SIA results, there were no customary law communities referring to Pemendagri No. 522014. The Company has procedures for identifying people entitled to compensation that set in SOP of Land Acquisition No. LCP PPG HUMAS 02. Conclusion : Conform 6.4.2 A procedure for calculating and distributing fair compensation monetary orotherwise shall be established and implemented, monitored and evaluated in aparticipatory way, and corrective actions taken as a result of this evaluation. Thisprocedure shall take into account: gender differences in the power to claimrights, ownership and access to land; differences of transmigrants and longestablishedcommunities; and differences in ethnic groups’ proof of legal versuscommunal ownership of land. Minor In the period of January 2016 - July 2017 there was no record of compensation claims from the public but the company had the calculation of compensation in land acquisition is set in Land Compensation procedure LCP PPG PR 01 SOP. At the beginning of the establishment the company has not implemented this procedure because the company obtained the approval of the principle of oil palm development PIR-TRANS pattern in accordance with the letter of the Minister of Agriculture No. KB.320 701 Mentan XII 89 dated December 5, 1989. The fact that the company did not give Compensation for land owned by the community refers to the Minister of Home Affairs Regulation No. 01 of 1986 on the Procedures of Land Provision and Land Rights Grant in the Framework of Plantation Development with the Transmigration PIR pattern. The community provides voluntary land with documentary evidence in the form of Statement Letter. Examples such as the Statement Letter on behalf of Madin who gave his land area of 15 hectares to the government through the Marau Sub-district Conclusion : Conform 6.4.3 The process and outcome of any negotiated agreements and compensation claims shall be documented, with evidence of the participation of affected parties, and made publicly available. Major PT PSA Palm Oil Estates was built with PIR Trans that refer to President Information No.11996. PIR Trans participant consist of migrant people and local people. By that rule, Acquisition of Estate Land did not apply GRTT process claim of land and plant. Native people transfer the land through Ketapang Government district to build estates will become priority to be PIR Trans participant. In the period of January 2016 - July 2017 there was no record of compensation claims from the public. SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 14.05 Issue 00 Rev. 1 83of 164 The major finding raise at the time of certification was: The head of district has received a complaint report from some villagers around the companys estate which claimed that they had not received any compensation for their own land which was being used by the company. There are several claims by the villagers as follows : 1. Madin, a villager of Water Upas Village, claimed the land that has not been compensated by the company reached hundreds of Ha. 2. Cicilia Ucut, claimed to have a 2 Ha land which located around the old office of PT. Poliplant has not been compensated by the company. 3. Sanar, claimed to have a 40 Ha land which located around the old office of PT. Poliplant has not been compensated by the company. Follow-up audit verification: Based on the interviews, the company has obtained approval in principle for the development of oil palm with PIR-TRANS pattern in accordance with the letter of the Minister of Agriculture Number : KB.320 701 Mentan XII 89 dated December 5 th of 1989. The company did not compensate any land owned by community by referring to the Minister of Home Affairs Regulation No. 011986 on the Procedures of Land Provision and Land Rights Grant in the Framework of Plantation Development with Transmigration PIR Pattern. The community has granted land to the government through voluntary agreement with documentary evidence a statement letter as there is a statement letter on behalf of Madin who already gave his area of 15 Ha land area to the government Head of Marau District. Corrective action is sufficient and the major finding can be closed Conclusion : Conform 6.5 Pay and conditions for employees and for employees of contractors always meet at least legal or industry minimum standards and are sufficient to provide decent living wages

6.5.1 Documentation of pay and conditions shall be available.

Major The company currently has 813 employees, consisting of 217 support staff, 589 full time employees and 7 daily employees. The Company has determined the payment of wages of employees in accordance with the provisions of the Ketapang Regency Government. SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 14.05 Issue 00 Rev. 1 84of 164 The company has already established the structure and scale of wages. The employee wage payment rules in the organization are set out in the Wage System Procedure PAY PPG HRD 06 SOP, rev 01, dated 01 June 2016. The payroll method is divided into two types: the wage system for the daily level employees and for the support staff level The lowest position is found in the foreman group in estate and mill. The basic wages paid by the company refer to Decision Letter No. 023 HRD-PSA XII 2016 regarding the Change of Daily Salary Base Level 2017 dated 01 January 2017. It also includes arranging an increase or adjustment of wages of employees every 3 years in accordance with his tenure. Determination of wages in the company already follows the provisions set forth in the Decree of the Governor of West Kalimantan. 789 DISNAKERTRANS 2016. Sampling of the slip payment to workers has including the payment components of BPJS Kesehatan, BPJS Pensiun, JHT, JKK, and JKM. The payment has done by the organization and employee with the proporsional percentage refers to government regulation. The salary deduction made to employees have been complied with the provisions of procedures and legislation. Sampling salary on behalf of Misiyah, Yatemi, and Poppy working as fruit collector obtained information that the payment of wages are in accordance with the provisions of the minimum wage set by the government that is is Rp 2.487.500 and if the employee is absent then it will be deducted by Rp 99.500 1 manday. The workers interviewed have been included with the BPJS Ketenagakerjaan and BPJS Kesehatan program. From salary slips and interviews with workers earning a minimum payment and a certain amount, there is evidence that there is no tax deduction on salary received. This is in accordance with the provisions of the government against the tax payment obligations only apply to salaries with a certain value. Conclusion : Conform 6.5.2 Labour laws, union agreements or direct contracts of employment detailing payments and conditions of employment e.g. working hours, deductions, overtime, sickness, holiday entitlement, maternity leave, reasons for dismissal, period of notice, etc. shall be available in the languages understood by the workers or explained carefully to them by a management official. Major The Company has a Corporate Regulation document of 2016-2018 PP 2016-PSA which has been authorized by the Office of Manpower and Transmigration of Ketapang Regency with Decree no. 173 of 2016 dated November 1, 2016. SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 14.05 Issue 00 Rev. 1 85of 164 The overtime payment for daily employees and support staff level is regulated in document SK no. 08HR CTP-Kal 2016 dated 01 January 2016. The procedure of calculating overtime in the company also refers to the rules in KEPMENAKER No. KEP-102 MEN VI 2004. The Company has set the provision of rice allowance outside of basic salary. The allowance of rice for KHT is 16.5 kg month, for wife 9 Kg and each child as much as 7.5 kg with maximum 3 children. For workers with status staff support will get a meal allowance worth Rp.300.000 bulan for single, if already married to Rp. 310.000 and add each child multiples Rp. 5.000, - with up to 3 children. The standard overtime and salary for ambulance drivers, school buses, and dump trucks refers to letter no. 036 PPG-DIR XI 2016 dated October 17, 2017. The salary standard and overtime for GMO staff admin support, office attendants, messenger, and assistant manager refers to letter no. 035 AAI-DIR XI 2016 dated 02 November 2016. Provisions related to incentives premiums for labor with certain types of work such as Supervision Estate, FT Operator Heavy Equipment and General are regulated in letter 037 PPG-DR XII 16 dated 02 November 2016. Certain types of work arranged in the letter also including spraying- chemical work, manual fertilization, manual lifting of TBS using rickshaws, loading and unloading of fertilizer, oil palm insertion, oil palm planting and organic fertilizer application empty bunch solid. The Company already has rules in implementing the recruitment of the workforce, namely the REK PPG HRD 08 SOP Procedure, rev. 01, dated June 01, 2016. The newly received employee will be given a trial period of three months. Within three months the performance of the employees will be evaluated to determine whether the employee will be appointed permanent employee or not. Regarding the guidance in executing employee performance evaluation during the trial period is documented in the ADM PPG HRD 03 SOP Procedure, rev. 00, dated June 01, 2016. Regarding career ladder and performance appraisal system in company arranged in DV PPG HRD 11 SOP Procedure, rev. 01, dated June 01, 2016. The work assessment system aims to increase salary, training, promotion, mutation, and demotion. At the time of the audit, a visit to Division 2 was conducted and interviewed two harvesters and one bridge force. Based on the interviews it is found that every worker has gained knowledge about his her rights in the company, starting from wage aspect, BPJS insurance, problem and reporting of harassment, and occupational safety and health standard use of PPE and equipment standard. Sampling is done to see the process of appointment of the status of the workforce of the daily SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 14.05 Issue 00 Rev. 1 86of 164 employees KHL to a permanent daily employees KHT. Workers named 1. Misiyah as fruit picker entered on 29 November 2016, was appointed to KHT on March 25, 2017, registered BPJS Kesehatan on July 19, 2017; 2. Yatemi as fruit picker entered 25 October 2016, appointed to KHT March 25, 2017, registered BPJS Kesehatan on 22 August 2016; 3. Tini as fruit picker signed 26 October 2016, appointed KHT March 25, 2017, and registered BPJS Kesehatan on July 19, 2017. The major finding raise at the time of certification were: 1. The company has already had the letter number 002APD-PPGI2015 about employee wage increases in the year of 2015 which has listed the terms of wage structure based on status and class. The lowest of SKU-H wage is Rp. 1.980.000 and with its breakdown for daily wage is Rp. 66.000. The company has determined the daily wage by dividing UMK which is Rp.1.980.000 by 30 days in a month. In this case, it has been found that the daily wage is not in accordance with government provisions with the dividing factor of daily wage is 25 working days daily. In short, the minimum daily wage that should be paid by the company is Rp. 79.200, so there is a difference about Rp. 13.200 for the daily wage that should be received by the workers. 2. The company has made contract personally with each of workers with BHL status. The sampling of workers contract was taken in the name of Iran with contract No. 300 SK PSA- SHMM X 2013 and Francis Ligo with contract No. 263 SK PSA-SHMM IV 2013. In its of contracts has already contained the provision of minimum wage in 2016, but it has not been updated using minimum wage provision in 2017. Based on the verification, the sprayers in the estate and workers in mill sortation did not know the government regulations related to the implementation of minimum wage in 2016. 3. The company has already determined overtime payment to daily freelance workers BHL in Rp. 9.900hour based on the calculation of overtime payment Rp. 66.00040 hours x 6 days = Rp. 9.900. This calculation was not in accordance with government regulation where overtime was calculated by 1173 x Rp. 1.980.000 = Rp. 11.445hour. In short, there is a difference about Rp. 1.545hour for overtime pay that should be received by the workers. 4. The company has made the decision for premium payments to harvesters in the range from Rp. 1800-Rp. 2000FFB with daily basis about 75-90 FFBday. In this case, the company could not determine whether premium has already been accordanced with the government regulation. 5. There are still 183 workers with status of daily freelance worker BHL and has been worked for years. Based on the government regulation, if workers has been working for 21 SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 14.05 Issue 00 Rev. 1 87of 164 consecutive days for 3 months, then the workers must be appointed as permanent worker. 6. The company has already paid out health insurance BPJS for workers in estate and mill but not all from the total of workers. Follow-up audit verification: 1. As per January 1 st of 2016, the company has issued Decree No.003 PPG-HRGA I 2016 stating that the daily wage grant was based on minimum wage divided by 25 days per month. The provision of minimum wage value has already accordanced with Ketapang Regency, Central Kalimantan Province. In the sampling payroll slip of workers in block H33 division 5, it has been obtained information and data that the salary for harvesters and sprayers has been made in accordance with government regulations. 2. The company has renewed the status of workers who previously was daily freelance worker BHL became permanent worker with status of SKU-H. There are already 147 workers which has been appointed as permanent worker. In the appointment decree has already contained provisions about workers rights and obligations. 3. The company has revised the provision of overtime payment according to the regulations. Based on the verification to harvesters, fertilizers, and sprayers, it has been found that overtime and premium payments has already been accordanced with the provision of overtime pay. 4. The company has revised the provision of premium payment which has been simulated under the terms of overtime payment according to regulations. Based on verification to harvesters, fertilizers, and sprayers, it has been found that provision of daily basis and premium payment were in accordance with the provision of overtime payment the daily basis has changed from 75-90 FFBday became 350 kgday. 5. The company has already identified the overall status of workers. There was appointment for 147 workers which their previously status as daily freelance worker BHL became SKU-H. 6. The company has already registered to health insurance BPJS to all of workers both in estate and mill with total of 2719 workers. Corrective action is sufficient and the major finding can be closed Conclusion : Conform 6.5.3 Growers and millers shall provide adequate housing, water supplies, medical, educational and welfare amenities to national standards or above, where no such public facilities are available or accessible. Minor SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 14.05 Issue 00 Rev. 1 88of 164 The Company has been provided daycare TPA for families whose parents work and have very young children. During the visit to the TPA in Division I there were 14 children with a 1-6 year age range. Obtained information that the children are delivered at 04:45a.m and taken after 14.00 pm. The TPA is equipped with 2 bathrooms and water for toilets, toys, hammocks, carpets, and educational toys. Separate bedroom space separated from the play area. The company provides food aid to the TPA routinely in the form of green beans as much as 5 kg 2 months. Visit to Division IV to see activities in housing, generator house, daycare, domestic garbage dump, childrens garden school, and harvest warehouse. Every employee gets the facility of the company in the form of residence with supporting facilities such as water and electricity. The electricity provided by the company comes from the genset with the operational time from 03.00 am - 05.00 am and 05.00 pm -10.00 pm. Childcare and childrens parks are available at this residential area. Clean water provided by the company is sufficient for domestic needs. Domestic garbage generated from employee housing is managed by providing a temporary organic and inorganic waste bin to be dumped to the final landfill. Final waste disposal has been made with adequate size and away from water sources. During previous audit, it was found complaints from workers who are Catholics, in which they did not get facilities such as chapels or bus transportation to the place of worship and this has been issued as minor non conformity. The company has made corrective action that bus has supplied by Company to drop and pick the employees up to church so the previous minor finding can be closed. Conclusion : Conform 6.5.4 Growers and millers shall make demonstrable efforts to monitor and improve workers’ access to adequate, sufficient and affordable food. Minor Workers get daily needs through the companys cooperatives located in Division 1. In addition workers and families can shop for their needs to the Upas Water Market which is roughly 12 km from the companys location. Conclusion : Conform 6.6 The employer respects the right of all personnel to form and join trade unions of their choice and to bargain collectively. Where the right to freedom of association and collective bargaining are restricted under law, the employer facilitates parallel means of independent and free association and bargaining for all such personnel

6.6.1 A published statement in local languages recognising freedom of association shall

be available. Major SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 14.05 Issue 00 Rev. 1 89of 164 PT. Poliplant Sejahtera has granted employees the freedom right to form association or labor union and proposed a mutual working agreement PKB to company in accordance with the 7 Cargills guiding principles which are in principle 5 stated that The Company Treat Others With Pride and Respect. There is a labor union at PT. Poliplant Sejahtera with the name of Serikat Pekerja Mandiri Perkebunan Poliplant Bersatu which has already registered in the Social, Manpower, and Transmigration Services of Ketapang District of West Kalimantan through the Letter of the Head of Social, Manpower, and Transmigration of Ketapang District Number: 64 A Year 2015 dated on May 25 th , year of 2015. The audit team has conducted interview with the management of labor union Serikat Pekerja Mandiri Perkebunan Poliplant Bersatu which was represented by Agus Suryadi as chairman and Darma Setiawan as secretary. The total number of labor union members is 586 persons, and already has basic rules which contain information regarding the rights and responsibilities of employees. Conclusion : Conform 6.6.2 Minutes of meetings with main trade unions or workers representatives shall be documented. Minor There is a labor union at PT. Poliplant Sejahtera with the name of Serikat Pekerja Mandiri Perkebunan Poliplant Bersatu which has already registered in the Social, Manpower, and Transmigration Services of Ketapang District of West Kalimantan. There is a documentary evidence in the form of SK Head of Social, Manpower, and Transmigration of Ketapang District No. 64 A 2015 about registration of Serikat Pekerja Mandiri Perkebunan Poliplant Bersatu, dated May 25 th 2015. The labor union address is located in Harapan Baru Village, Air Upas Subdistrict, Ketapang District with registration number : 83OP-SPSBSPM-PT.PSDFT2015. The board of union labor consist of Agus Suryadi chairman, Suyadi vice of chairman, Darma Setiawan secretary, Sufriyanto secretary, Suhandri treasurer, Akhyar treasurer. The company also has already established LKS Bipartit of PT. PSA, and has been registered to local authorities as in Head of Social, Manpower, and Transmigration Decree of Ketapang District No. 1352014 dated November 7 th 2015 in which the second dictum stated that LKS Bipartit of PT. PSA was recorded with Reg. No:071LKS-BISTKT-CXI2014. The membership structure of LKS Bipartit has already consisted of 60 members. Since the labor union established, there are several meeting between the labor union SPMPPB and the company ’s management which has been conducted regularly. There is evidence from minutes of meetings that discussed about the provision of facilities, the establishment of SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 14.05 Issue 00 Rev. 1 90of 164 management plans both in estate and mill, structure of socialization plan. The minutes of meetings has been signed by the chairman, secretary, Siriham Estate Manager SHME EM, and Siriham Plasma Manager Plasma. The minutes of meetings has also attached with attendance list of meetings. As information the minutes of meetings can also be accessed by all of and available upon request the workers could contact the HR GA section, or the labor union representative. The membership fee of labor union is about Rp. 20.000membersmonth as a mandatory savings. There are attendance lists available for meetings between the union, company, and also labor and transmigration services with topics related to socialization the company regulation. Conclusion : Conform 6.7 Children are not employed or exploited. 6.7.1 There shall be documentary evidence that minimum age requirements are met. Major The company has commited for not employing any under employed-age or school-age employees as stipulated in 7 Cargill ’s guiding principles which in principle 1 stated that The company comply with all law and regulation. The company commitment has been stipulated in PT. Poliplant Sejahtera company regulation in the year of 2016 - 2018 Chapter II about Working Relations, Article 5 about General Requirements for Employee Candidate Acceptance in paragraph 2 which stated that the minimum age of working are 18 eighteen years old during admission or recruitment” . Sampling of workers at Division 2 and from employee data, confirms that workers entered the company at over 18 years old. Conclusion : Conform 6.8 Any form of discrimination based on race, caste, national origin, religion, disability, gender, sexual orientation, union membership, political affiliation, or age, is prohibited 6.8.1 A publicly available equal opportunities policy including identification of relevantaffected groups in the local environment shall be documented. Major The company has a written policy related to anti-discrimination and equality as stipulated in 7 Cargill’s guiding principles which has been stated in principle 5 that the company treats others with pride and respect. In addition, the company appreciates the differences in gender, language, SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 14.05 Issue 00 Rev. 1 91of 164 culture, physical, race, religion, sexual orientation, life experience, and socio-economic status. The company also provides an equal employment opportunities for all of employees regardless of personal characteristics such as race, ethnicity, color, gender, age, disability or other characteristics that are protected by law. If there is a violation occured related to the discrimination and equal employment opportunities, employees may contact the Ethics Open Line directly or send a message through www.CargillOpenLine.ethicspoint.com. The companys commitment to anti-discrimination and providing equal employment opportunities has been set forth in company regulations of PT. Poliplant Sejahtera in the year of 2016-2018 chapter X about Working Procedures, and Discipline Rules in Article 52, Guding Principles in paragraph 5 which stated that treat others with dignity and respect. The company policies which was related to anti-discrimination and provided equal employment opportunities as stipulated in 7 Cargill ’s guiding principles has been published both internally and externally. Internally, through the installation of information boards and banners both in offices, estate, and mill. Externally, the information which was related to anti-discrimination and provided equal employment opportunities can be accessed and downloaded on the web address http:internal.cargill.comsitesethics-compliance. Conclusion : Conform 6.8.2 Evidence shall be provided that employees and groups including local communities, women, and migrant workers have not been discriminated against. Major The company has conducted and implemented policy about anti discrimination to local community and also womens in career system as stipulated in a procedure relating to a Career Level System CDVPPGHR11SOP, and Performance Appraisal form CDVPPGHRD 11F.02, Employees Promotion form CVDPPGHR11F.03, which indicated that the promotion is only considered and based on performance evaluation results and not other factors. The company also had the Recruitment Procedure REKPPGHR08SOP which described that the selection is only based on the several test stages such as the first interview, academic potential test capability, psychology, and english, users interview, group discussion, and a final interview. The company also has a procedure probation ADMPPGHR03SOP which stated that all new employees should follow probation period for about 3 month without mentioning raceethnicity, religion, gender,etc. SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 14.05 Issue 00 Rev. 1 92of 164 The companys data showed a composition of job based on multi ethnic such as Batak, Java, Dayak, etc. The majority of worker or job in the company has already involved locals people such as Dayak. Conclusion : Conform 6.8.3 It shall be demonstrated that recruitment selection, hiring and promotion are based on skills, capabilities, qualities, and medical fitness necessary for the jobs available. Minor The company has kept all data about worker credentials and medical records since the recruitment process. As information there is a health examination letter which was issued by the company doctor to ensure the status of employees health conditions FitUnfit. PT. Poliplant Sejahtera has a written policy which was signed by the President Director about Obtaining Equal Opportunities Policy whereby the company is committed for respecting and granting the rights of employees and local communities in obtaining equal opportunity as follows: 1. Developing and improving career ladder regardless of gender, ethnicracial, and social class 2. Assisting employees in order to assess and determine interests talents so that it can stimulates employees for self-improving 3. Earning job opportunities regardless of gender, ethnicreligious race, and class There is a procedure relating to a Career Level System which was ruled about employee engagement where all of promotions are based on required and proven competencies by positions which considered about knowledge, behavior, learning capacity, execution ability, integrity, confidence, and courage as stipulated in procedure number CDVPPGHRD11SOP. Conclusion : Conform 6.9 There is no harassment or abuse in the work place, and reproductive rights are protected

6.9.1 A policy to prevent sexual and all other forms of harassment and violence shall be

implemented and communicated to all levels of the workforce. Major The major finding raise at the time of certification was: The company has already had a gender committee which consisted a boards headed by Dominika Paunia. Based on field verification, the sprayers did not have understanding of what criterion will became or included as a sexual harassment. Follow-up audit verification: The company has conducted socialization related to understanding and parameter of sexual SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 14.05 Issue 00 Rev. 1 93of 164 harassment. Based on the field verification, the sampling in interviewing workers was taken at the time of the morning muster in the division 5 sprayers and fertilizers. All of the interviewed workers clearly did not understand the mechanism for submitting complaints of sexual harassment. The workers even did not know the phone number that can be connected. In general, the workers stated whenever there is an incident of sexual harassment, the complaint must be made hierarchically starting from the foreman, then to the assistant and then to the HRD and it will not be allowed to report directly to the superior above or to the other superior. Workers do not understand the mechanisms for confidential complaints. Corrective action is insufficient and the major finding can not be closedThe Company has a policy related to the prevention of abuse and sexual violence in the form of Policy about Sexual Violence and Crime, signed by the President Director. It contained aspects of sexual harassment and violence. This Corrective action is is insufficient and the major finding can not be closed, therefore the certification is subject to suspension. During surveillance audit, the Company has conducted socialization to this policy. There is evidence of attendance lists dated July 8, 2017 about Sexual Violence and Crime Policy. The Company already has a gender committee that the board of management chaired by Dominica Paunia when ascertaining in the field against the sprayer, they have an understanding of what are the criteriaparameters of sexual harassment. Therefore, the finding can be closed and suspension status is uplifted. Conclusion : Conform 6.9.2 A policy to protect the reproductive rights of all, especially of women, shallbe implemented and communicated to all levels of the workforce. Major The Company has a policy regarding the protection of reproductive rights on Policy Reproductive Rights of Women that forbid pregnant woman employee to do work that related to chemical material and pesticide as set in chemist weeds restraint procedure No.PPGGMOASD28SOP. The Company sure that no woman employee that be contact with chemical pesticide in pregnant condition. The Company conducted pregnant check every month. Womens reproductive rights policies are documented in the sign boards and displayed in strategic places such as in the 4th division office. During an interview with spray officers in the 2nd division of the F52 block, female sprayers were aware of the womens reproductive rights policy. Conclusion : Conform 6.9.3 A specific grievance mechanism which respects anonymity and protectscomplainants where requested shall be established, implemented, andcommunicated to all levels of the workforce. Minor The Company has had procedures that organize complaints and grievances of workers, It was SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 14.05 Issue 00 Rev. 1 94of 164 Internal Complaint Handling Procedure ERPPGHR05SOP, on June 2015. The procedure is used both for internal and external complaints. In paragraph 5 contained provisions on Guaranteeing Anonymity Reporting complaints . To record a complaint, The Company has been supplied form of Report Handling Complaints ERPPGHR05SOP. Conclusion : Conform 6.10 Growers and mills deal fairly and transparently with smallholders and other local businesses.

6.10.1 Current and past prices paid for Fresh Fruit Bunches FFB shall be publicly

available. Minor West Kalimantan Provincial Plantation Office has set the price of FFB contained in the document of Minutes of Meeting of Price Fixed FFB Oil Palm Production West Kalimantan Period II June 2017 and Period I June 2017. The pricing stated in the document is for the lowest FFB price with 3 years of plant life with a value of Rp 1,188.37. The highest price range is set for FFB with plant life of 10-20 years ie worth Rp 1,615.13. Conclusion : Conform 6.10.2 Evidence shall be available that growersmillers have explained FFB pricing,and pricing mechanisms for FFB and inputsservices shall be documented wherethese are under the control of the mill or plantation. Major In SOP of Wighbridge KTU PSA SHMM 04 SOP, rev 00, dated 01 January 2015, the procedures for FFB recording, weighing and sorting. The activity is done both for TBS originating from own estate as well as from plasma. Terms and calculations of TBS penalties are described in the SOP Sorting TBS LAB PSA SHMM 13SOP, rev. 01, dated January 23, 2016 and have referred to PERMENTAN No. 14 permentan OT.140 2013 Conclusion : Conform 6.10.3 Evidence shall be available that all parties understand the contractual agreements they enter into, and that contracts are fair, legal and transparent. Minor The previous minor findings was issued during audit certification as follows : The Company cooperated with 5 cooperatives : 1. KUD Subur Makmur, 2. KUD 3. Bukit Selendang Jaya, 4. Koptan Budhi Asih, 5. Kopbun Mitra Sejahtera.T he Company did not have SPK related to the cooperation with five other co-operatives. Generally, all SPK did not include a payment agreement, the provisions of penalty sorting. In SOP Sorting FFB LABBSASHMM13SOP found SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 14.05 Issue 00 Rev. 1 95of 164 a discrepancy on the provision of penalties for example for a long stalk in the SOP which stated that stalk 2 cm hit penalty while government provision stated that stalk above 2.5 cm will expose to penalty. The corrective action was made as follows : The Company has made the corrective action by revising all Contract agreements with all Cooperatives. The corrective action made such as : - The sortation methods will be refer to Government Regulation No. 14PermentanOT.1402013. - The sortation process will be witnessed by all parties company and KUD and sortation form will be signed by both parties - The price of FFB will be referred to local Government regulation West Kalimantan - The payment will be conducted every month, latest 19 days after closed bookupon the completion of invoice by supplier. - The methods in handling of complaints with deliberation and consensus The company has made the corrective action by revising the procedure No.LabPSASHMMSOP SORTASI TBS. The SOP has set up the methods of sortation, pilanty and price system. During surveillance audit, it was found that the company has the agreement related to the cooperation with co-operatives. Generally, all SPK has include a payment agreement, the provisions of penaltysorting. The sortation process has been witnessed by all parties company and KUD and sortation form has signed by both parties The payment has been conducted every month, latest 19 days after closed bookupon the completion of invoice by supplier. The methods in handling of complaints with deliberation and consensus. Therefore, the minor finding can be closed. Conclusion : Conform 6.10.4 Agreed payments shall be made in a timely manner. Minor All payments made to the smallholders have been set up in each MOU between company and each SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 14.05 Issue 00 Rev. 1 96of 164 KUD. The mode of recordingdocumenting transactions between millers with smallholders from Form of daily FFB, Sortation Form for penalty, Summary FFB production Plasma division and slip payment to each KUD. The payment will be delivered by Cheque every month, latest 19 days after closed bookupon the completion of invoice by supplier. Conclusion : Conform 6.11 Growers and millers contribute to local sustainable development where appropriate 6.11.1 Contributions to local development that are based on the results of consultation with local communities shall be demonstrated. Minor The company is trying to fulfill the aspirations of the surrounding community related to the demand for community land to be managed by the company. Sampling for Cooperative of Kudangan Manis through Memorandum of Understanding no. 001 MoU KM-PSA V 2016 dated May 02, 2016. The document states that the land will be managed by the company and will be gradually handed over to the cooperative when the plantation has begun to produce. Conclusion : Conform 6.11.2 Where there are scheme smallholders, there shall be evidence that efforts andor resources have been allocated to improve smallholder productivity. Minor The company already has a partnership with Cooperations and a new cooperation is done for Cooperative of Kudangan Manis with for an area of ± 785 Ha. Companies are actively conducting coaching to independent smallholders to improve productivity and other matters required by RSPO standards. Training activities are made in the scheduled program within one year. Conclusion : Conform 6.12 No form of forced or trafficked labour are used 6.12.1 There shall be evidence that no forms of forced or trafficked labour are used. Major Based on worker data result and field survey, there is no forced labour. The company has documented policy for not employing workers in any kind or form of forced labour which has stipulated in the 7 Cargills Guiding Principles, which in principle 5 stated that the company treats others with pride and respect. The company respects human rights and supports efforts to protect it, SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 14.05 Issue 00 Rev. 1 97of 164 working with organizations and goverments in order to tackle these related issues. Conclusion : Conform

6.12.2 Where applicable, it shall be demonstrated that no contract substitution has

occurred. Minor There is no worker contract that has been subtituted by other contract. Conclusion : Conform

6.12.3 Where temporary or migrant workers are employed, a special labour policy and

procedures shall be established and implemented. Major All of processes and recommendations relating to foreign workers come from Cargills head office, where the company only serves as only a user. As additional information there is a foreign labor procedures through Foreign Worker Formalities with Policy No: 033PPMGHRS dated June 1 st of 2017. Conclusion : Conform 6.13 Growers and millers respect human rights. 6.13.1 A policy to respect human rights shall be documented and communicatedto all levels of the workforce and operations see Criteria 1.2 and 2.1. Major PT. Poliplant Sejahtera has a company policy that is stipulated in the 7 Cargills Guiding Principles, which in principle 5 stated that The company treats others with pride and respect. The company respects human rights and supports efforts to protect it, working with organizations and goverments in order to tackle these related issues. The socialization of which was related to human rights has been conducted along with the socialization of the regional minimum wage UMK 20162017, socialization of company regulation, and corporate policy socialization by HR Human Resources section at Morning Muster. The socialization to internal parties about human rights which was contained in 7 Cargills Guiding Principles has became the responsibility of HR section, and for external parties has became the responsibility of CSR departement through local events. There is an evidence for external parties socialization by conducting a local event with theme safety riding. Based on interviews with HR, during the audit period there were no cases of human rights violations in the company. Conclusion : Conform SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 14.05 Issue 00 Rev. 1 98of 164 7 RESPONSIBLE DEVELOPMENT OF NEW PLANTINGS

7.1 A comprehensive and participatory independent social and environmental impact