Aspects of estate and mill management that have social impacts are

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

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 The Company has reviewed the CSR program conducted every year. Changes to the program based on the reassessment results conducted internally per 2 year period. Conclusion: conform 6.1.2 There shall be evidence that the assessment has been done with theparticipation of affected parties. Major The company keeps a schedule of meetings with the surrounding community on a regular basis as well as with government representatives in the regions. The results of the meeting are notated and compiled into CSR plans for the following year. 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, Major SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 14.05 Issue 00 Rev. 1 61of 124 includingresponsibilities for implementation. The Company has conducted a review to mitigate the negative impacts of the companys presence on the surrounding community. So far the demand of the surrounding community is the need for clean water in the dry season and the help of water spraying on the road to avoid dust in the dry season. 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 has reviewed the companys CSR plan. The last review was conducted for the period 2015-2016. The company has conducted socialization related to SOP of communication where the company has given explanation related to the mechanism of providing information response to the proportional submitted by the community. Conclusion: conform 6.1.5 Particular attention shall be paid to the impacts of smallholder schemes wherethe plantation includes such a scheme. Minor The Company has a partnership with plasma 1 and 2 under the Akso Dano Cooperative. The company provides technical training and regular meetings. The cooperative confirms that the company has provided technical guidance even though the cooperation pattern is only in the form of sales of FFB to the company. 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 has Stakeholders Complaint Receiving and Resolution SOP No. 106899TAPPRO-CSR-HOVI13 Conclusion: Conform SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 14.05 Issue 00 Rev. 1 62of 124

6.2.2 A management official responsible for these issues shall be nominated.

Minor Company already has a documented mechanism for land dispute resolution. This is contained in the internal memo MI Stakeholder Complaint Handling in the Site Estate Mill No. MI- 005MDSUSTX2012. Also, Stakeholders Complaint Receiving and Resolution SOP No. 106899TAPPRO-CSR-HOVI13 has been established which is provided with a flowchart starting from the identification process to the production of minutes, and put into force on 13 June 2013. The scope includes: complaints from stakeholders, complaints on a contract, and land dispute resolution. List of stakeholders already exists in the company area, including: religious leaders, customary leaders, village chiefs, members of plasma, cooperatives, local police, contractors, suppliers, and related agencies complete with names addresses. The list of Stakeholders made is as per 2013. 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 There were complaints from members of the plasma farmer groups which are recorded in the form: 106181TAPPRO-CSR-HOVI13, document No. 002, on 5 August 2014. One of the members of Asoka Farmer Group filed a complaint that he wanted to quit from his plasma group i.e. Asoka 1 A and move to the group of Asoka 1 B. The results of interview with the information source show that the problem has been dealt with by the company immediately and the case is resolved properly. The complaint status in the form has been closed and resolved. 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 Companies own SOP reception and handling of complaints Doc No. 106 899 TAP PRO- CSR-HO XI 16. Found discrepancy ie: 1. SOP is not yet set up a mechanism where workers make a complaint or a complaint to SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 14.05 Issue 00 Rev. 1 63of 124 another supervisor or senior. 2. SOP is not set up on socialization and complaints that are confidential and how to protect against the relevant person. 3. SOP is not set up a complaint to the RSPO Complaint system, if the problem can not be resolved by the two parties. This has been issued as Major NCR No. 10 Conclusion: Major NCR No.10 6.3.2 Documentation of both the process by which a dispute was resolved and the outcome shall be available. Major Grievances and complaint submitted was filed in sheet no. TAP FO SIA-0003. In general, complaints and complaints submitted through the immediate supervisor, suggestion boxes and unions. Suggestions were submitted via the suggestion box. which was monitored weekly. During 2015 there were no complaints submitted via suggestion box In the certification report, there was an observation raised stated that the union did not record complaints submitted via it. At the ASA I, company has recorded, among other complaints regarding the provision of school buses for children who attend afternoon course February 2016, concerning sports facilities May 2015. Complaints records recorded in a complaint form no. TAP FO SIA-0003. In general, complaints are submitted through the immediate supervisor, suggestion boxes and unions. For suggestions submitted via the suggestion box is monitored every week. During 2015 there were no complaints submitted via the suggestion box. In the certification report, there was observation that the union did not record complaints. At the time of audit surveillance 1, the company has recorded complaints regarding the provision of school buses for children who attend afternoon course February 2016 and concerning sports facilities May 2015 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

SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 14.05 Issue 00 Rev. 1 64of 124 Major for identifying people entitled to compensation, shall be in place. The existence of indigenous peoples and customary land is not found. However the Company already has a documented land dispute resolution mechanisms. This was stated in an internal memo MI Redress Stakeholders in the Site Estate Mill No. MI-005 MD Sust X 2012. In addition, there was an SOP of Acceptance and Settlement of Complaint From Stakeholders No. 106 899 TAP PRO-CSR-HO VI 13 which is equipped with a flowchart which starts from the identification process to preparing BA. The scope includes: complaints from the stakeholders, complaints contract, until the settlement of land disputes. 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 Company already has a documented land dispute resolution mechanism. This was stated in an internal memo MI Redress Stakeholders in the Site Estate Mill No. MI-005 MD Sust X 2012. In addition, there was an SOP of Acceptance and Settlement of Complaint From Stakeholders No. 106 899 TAP PRO-CSR-HO VI 13 which is equipped with a flowchart which starts from the identification process to preparing BA. The scope includes: complaints from the stakeholders, complaints contract, until the settlement of land disputes. 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 There is documentation of compensation to Mr. Pajrin in Afd E, Block E1 PT. Brahma Binabakti such as Minutes of Measurement Result of Land No. 01 BBBS 12014, and approval document from Mr. Pajrin as the landlord. The agreement on release of land of Mr. Pajrin been witnesses by Mr. Parjin, the Board of Directors and Chief of Desa Jaya Suko Awin Hidayah. 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 SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 14.05 Issue 00 Rev. 1 65of 124

6.5.1 Documentation of pay and conditions shall be available.

Major The Company has set wages in accordance with the provisions issued by the government of Jambi Province. The minimum wage quantity after divided in 25 working days hence the daily wage amount is Rp. 82.500, - day. The company has changed the status of casual laborer and raised it to permanent day laborer. 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 kept the previous working agreement of permanent workers that has been working since the PT. Sakernan, and has made new working agreement with them, as an example NIK 2121210808145, AN. NIK 2121210709278. Company has conducted socialization that people who are not tied the employment with the company is not allowed to work at the companys location. Based on interview with housewives, harvesters and supervisors, it is known that the wives of employees still allowed to assist the harvester picks fruit and harvesters also use labor from outside helper to collect the fruit during peak harvest. Workers have 40 hours of work per week. If the employee is absent, then the salary will be deducted as much as Rp. 82,500 per day 1 HK. The Company grants leave permits and permits not to enter work without deducting wages as required by Law 132003. 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 At the ASA 1, In 2015 there was no examination of well water and now 2016, company was just delivered samples of well water of Afdelling E, H, B and C on 29 February 2016 to BLHD laboratory of Jambi Province. This has been issued as major nonconformity. The Company has conducted corrective action by doing laboratory test to all drilling wells. Results of clean water quality at location of water uptake from UPTB Regional Environmental Laboratory of Jambi Province: 1. Drilling well 1 - LHU no. 129 LHU L2JBI II 17 - February 02, 2017 SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 14.05 Issue 00 Rev. 1 66of 124 2. Drilling well 2 - LHU no. 129 LHU L2JBI II 17 - February 02, 2017 3. Drilling well 3 - LHU no. 277 LHU L2JBI III 2016 - March 16, 2016 4. Water source afdeling E - LHU no. 211 LHU L2JBI III 16 - March 1, 2016 5. Well water afdeling H - LHU No. 211 LHU L2JBI III 16 - March 1, 2016 6. Drilling well afdeling D - LHU no. 1215 LHU L2JBI X 16 - October 25, 2016 7. Water source afdeling A - LHU no. 1215 LHU L2JBI X 16 - October 25, 2016 8. Well water afdeling B - LHU No. 204 LHU L2JBI II 16 - February 29, 2016 9. Well water afdeling C - LHU No. 204 LHU L2JBI II 16 - February 29, 2016 Testing based on Permenkes 492 2010. The Corrective actions have been considered adequate so the finding can be closed. The company provides home facilities with 2 rooms for married workers, transportation assistance such as school bus from site to the nearest school location and daycare. During the visit to daycare in Block H, found 5 children with age between 1.6 months to 5 years. Parents prepare childrens food from home for breakfast and lunch, there is no food aid from the company. The company should provide bus transportation for children who attend school outside the location of the estate because children in elementary and junior high school must ride motorcycle from Block H to Sengeti Village every day. The company provides electricity every morning at 4-6 am and 6-11 pm. Workers wives propose empowerment of mothers by providing training in workshops to supplement family financial input. 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 The company provides cooperatives that are in afdeling 6 to meet the familys basic needs. The Company provides clean water from both drilled wells and water derived from processing at the Mill. 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 SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 14.05 Issue 00 Rev. 1 67of 124 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 Freedom to form the unions is set in the period of 2015-2017 PP Preamble paragraph 2, act 1, which state: The company respects human rights, recognize and provide opportunities to every employee with the same rights and be given the opportunity to progress in the work and association without RESTRICTIONS and discrimination or because of differences in ethnicity, religion, race and groups SARA. Conclusion: conform 6.6.2 Minutes of meetings with main trade unions or workers representatives shall be documented. Minor The Company already has two units of labour union organizations for unit of Estate and Mill 1. Labour union Estate – IPB3 Management consists of: Chairman Komando Tarigan, Secretary Edison Efendi, Treasurer Junaidi Abdulah, and the Representative Afdeling as many as 13 officials for the period 2016- 2018. Management set at the date of August 15, 2015 by the Social Service Muaro Jambi No. 560.6 351 Sosnakertrans. Until now union labour has members 358 people. Union Labour PT Brahma Binabakti which address in Suko Awin Jaya village, Sekernan subdistrict, includes unit: Division of Oil Palm Plantation, Plantation Rubber Division, and the Division of MCC. Unions Labour IPB3 do bipartite meeting at the date of January 16, 2017 with the agenda of the wage scale discuss the Year 2017. These meeting was attended by the entire board and chief representative of each Afdeling. 2. Labour Union Mill All Indonesian Workers Union has been established by the Decree of the Board of Trade Unions Federation of Agricutural and Plantation Area ofJambi, No. 12PD.F.SPPPSPSIJBV2013 dated May 17 th , 2013. A letter explain the decision on the confirmation Substitution Composition and Personnel Management Work Unit Agriculture and Plantation Workers Union of PT. Brahma Binabakti period 2013-2018. Management consist of: Chairperson Saiful Hambali, Vice Chairman Secretary SM. Silalahi, Deputy Secretary Bonar Manalu, and Tresurer Mispan. Records of meetings between the company and the union or the unions internal recorded in the function of the Secretariat. There is evidence of meeting records related to the activities of Trade Unions, among others: SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 14.05 Issue 00 Rev. 1 68of 124 Labour Unions do Bipartir monthly meetings between company with labour mill on Monday, February 8, 2017 At 2:00 p.m. to 15:00 pm Meeting room located at PT BBB. The agenda discussed was about the poor quality of rice originating from the manufacturer and are already resolved rice producers with better quality. 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 already has a policy that specifies the age requirements of workers with at least a minimum age of 18 years and prohibits child labor from working and helps parents work in the estates. Results of data tracking and interviews of workers, wives and children in residential settlements all confirmed the prohibition of child labor. Sanctions will be given to workers who are known to help their parents work in the estates. 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 already has a discriminatory policy stipulated in company regulations and SOP recruitment. From company data, workers come from various ethnic tribes such as Java, Sundanese, Malay and Batak. 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 results of interviews with workers, they confirm no racial treatment of the company. 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 In the SOP the company has included the terms of discrimination free. All workers are allowed to occupy certain positions types of work according to their ability. At the time of field SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 14.05 Issue 00 Rev. 1 69of 124 interviews, there was no difference in the treatment of women and men and the company data showed that the majority of workers were men. 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 company already has policies relating to sexual harassment sexual abuse that have been listed in the company regulations. During audit, it was found unconformity such as : 1 There was no evidence of training on gender and all workers committees related to sexual harassment. During an interview for sprayers group which all of they are women, they have no understanding related to the sexual abuse, 2 Not found training materials related to sexual harassment No contacts that found can be reach of and ensure it confidentiality. During the interview, the workers are not aware about this provisions. This has been raised as Major Nonconformity. Conclusion: Major NCR No.11 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 already has a policy related to the prohibition of doing work that is at risk to pregnant and lactating mothers. The group of women workers is prohibited from working in the fertilizing, spraying and warehouse of toxic chemicals. The company makes regulations on a group of female workers by performing a pregnancy test using a monthly pregnancy test pack conducted at a clinic by a company doctor. 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 does not have a confidential complaint mechanism. This is already subject to the findings of criterion 6.9.1 SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 14.05 Issue 00 Rev. 1 70of 124 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

publiclyavailable. Minor The company with Akso Dano Cooperative has an agreement to determine the price of the fruit in accordance with the provisions of the local Disbun. Payment to cooperatives has been running smoothly. 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 The company already has an agreement with the cooperative related to the method of sorting and granting penalties on the fruits derived from the plasma. The penalties were awarded for very raw and raw fruits of 1.5, very mature fruits of 1.25 and long stalks of 1. The company is already willing to provide empty, ash and solid bunches to the plasma farmers to be used as fertilizer on plasma land. 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 company already has SPK with Ako Dano Cooperative and all FFB suppliers. In each SPK already include terms and terms of payment, sorting method and integrity agreement. Each party has signed and has a copy of the SPK. Conclusion: Conform 6.10.4 Agreed payments shall be made in a timely manner. Minor In the SPK already set payment period. For outside suppliers, the company specifies the payment given 7 days after the invoice is received. For payments to cooperatives, payments are made once a month. Conclusion: conform SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 14.05 Issue 00 Rev. 1 71of 124

6.11 Growers and millers contribute to local sustainable development wherever