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

SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 58of 104 land that is written in the empty fruit bunches application performance. There is efficiency of using internal fuel against diesel fuel Company needs to make a conversion program from genset that uses diesel fuel to power generators without genset with emissions. This has been raised as an observation no 8 Reduction of mobile source emissions through vehicle maintenance and also can be found in KIR vehicle fitness test document, where the measurement of emission is one of the requirements for the extension of KIR of cargo trucks. For passenger vehicles, company has not made any exhaust gas emission measurement.This has been raised as an observation no 5 at criteria 5.1 Compliance status : Observation no. 8 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 Company has conducted SIA which was carried out by Konsultan Lingkar Sawit LINKS. PT. BBB has conducted SIA in 2013 and prepared the activity report. The report contains recommendations of CSR programs for future activities. There are 14 recommendations in total, and those associated with impacts due to the activities of estate and mill. As a follow up activity on SIA, PT. BBB has prepared CSR Activity Plan 2014 based on recommendations in the SIA. From the minutes of a meeting with stakeholder held on 9 Sept 2014 at Sekernan District Meeting Hall and from interviews of personnel it is found that the preparation of CSR activities has involved the community. PT. BBB has developed a strategic plan for CSR activities for 5 five years, 2014-2018. Activities are grouped into the following areas: - Social, Cultural, Religious - Education SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 59of 104 - Health - Economic - Plasma Coaching PT. BBB has conducted management planning with the participation of the community. This is contained in the report of SIA activities which involve surrounding village community. In addition, the CSR program monitoring activities of PT. BBB also has involved the community. This is contained in the evaluation report of CSR program 2013. Minutes of a consultation meeting with stakeholders on 9 September 2014 and interviews of personnel show that in the CSR program PT. BBB accommodates the aspirations of the community. Company has a partnership with plasma farmers which consist of 1. Plasma 1; 2. Plasma 2 and 3. Plasma Pemayung Plasma 1 and plasma 2 are affiliated with cooperative Akso Dano. Plasma Pemayung is affiliated with cooperative Dano Bangko. Company already has a MOU with Plasma Pemayung dated 30 January 2012. Company already has a MOU with cooperative Akso Dano for plasma 1 and plasma 2. There are 2 MOU available for company and cooperative Akso Dano. An expired MOU has found i.e. the MOU between the company and Cooperative Akso Dano which is made into on 6 February 1995. This MOU says that the MOU will terminate when the credit with Bank BNI has been paid article 15, page 6. Addendumrevision of the MOU is not found. Cooperation Agreement document between company and cooperatives plasma 1 and 2 which regulates the method of gradingpenalty, payment and other things that need to be mutually agreed is not found. This has been raised as an Minor non compliance no.23. Compliance status : Minor Non Conformity No. 23 6.2 There are open and transparent methods for communication and consultation between growers andor mills, local communities and other affected or interested parties 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- SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 60of 104 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. 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. Compliance status : 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 Grievances are regulated in Article 49 of Regulation Company on Dispute Resolution and Article 50 Grievance Settlement. Company has Employee Complaint Resolution SOP TAP-PRHRD-GN063- 0113-0, 18012013 which was prepared by HR Operation Dept. Social Impact Dept, verified by HR Div.Head and Sustainability Dept. Head, and approved by the Managing Director dated 18012013. In general, complaints are submitted through direct superior, mailbox and through the trade unions. For record related to employee complaints, Employee Complaint Form TAPFOSIA-0003 is available. All records are recapitulated in Recapitulation of Complaints and Company Response to Employee Complaint of PT. BBB. Records for Complaint Receiving Period Month “X” which contains data: No, Date, Complaints No., Employee Name, Subject, Follow-up, Status Received, Done, Remarks. However, in its application complaints submitted to the unions are not recorded. It is recommended that the unions record employee complaints submitted to it. This has been raised as an observation no. 16 SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 61of 104 Record of the progress of deliberation for dispute resolution is kept in the CSR and Legal Region Sumatera and HO Department. PT. BBB has the SOP Stakeholder Complaint Receiving and Resolution estate and mill number: 106899TAPPRO-CSR-HOVi13. This SOP contains mechanism for dealing with complaints by grouping complaints into direct and indirect complaint and grouping complaint settlement process. Complaints are documented for the period 2013-2014 and existing complaint is addressed and resolved properly. A land conflict occurred in 2001 with the NGO FMP and continued in phases up to 2013 was resolved on 10 May 2013 with the issuance of Decree of the Regent of Muaro Jambi. Compliance status : Observation no. 16 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 The existence of indigenous peoples and customary land claims is not found. Compliance status : Conformity 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 Company already has a payroll and incentives system in Payroll Management, which is covered in the Manual Book of Human Resource. In the attachment of SKD Premi Region Sumatera No. 105703TAPSKD-HRD-HOIV2013, point 1 – 19, in force since 1 May 2013. Consist of premiums: diligence, productivity of foreman, productivity harvesters, brondolan, harvesting penalty, productivity of seedling transport driver, and other premiums. In addition, it regulates additional provisions for Core Palm, which consist of: 1 harvest premium komidal specific to Afd. D, 2 productivity of TBS transport driver and krani buah, 3. harvest foreman, 4 productivity of security patrol, 5 TBS yardman specific to Afd. B, and 6. Re-stacking weeding excavator premium. In 2014 there is an adendum in force on 01 June 2014 whose contents include the addition of premium by 10 of the table for afdelling of hill category. a. In the example of a maintenance worker dated 18 June 2014, wage in July for 22 working days was SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 62of 104 paid Rp. 1.502.250. For harvesting, a sample is taken in the estate of afdelling H. In afdeling H the average weight of a fruit bunch is 10 kg with harvesting base of 100 bunches. However, if working hours have been fulfilled even though the harvest base is not achieved, the worker will still be paid according to UMP. On 09 September 2014 based on the foreman records no harvester has reached the harvesting base. In the example of a harvester in the afdeling H, the harvester claimed to have been paid of UMP Rp. 1.502.250 a month, during the audit at 12:00 o‟clock the harvester has harvested as many as 80 bunches. The remaining 10 bunches according to him will be finished before 14:00 o‟clock. In the example in the estate Block D, from interview of sprayers it is found that they are paid the Jambi provincial minimum wage, i.e. Rp 1.502.250 rupiah per month. In the example in the afdeling H from the interview of a caregiver, the wage of this caregiver is Rp. 1.502.250 a month. This daycare caregiver starts working from 06:00 to 14:00. In the example in the mill a worker named Kirenius Tampubolon recruited in 2012, his base salary was Rp 1.510.250, overtime payment was Rp 1.588.817 with overtime hours a month was 82.5 hours. overtime is calculated through SAP. It is not appropriate since overtime hours are set by law at maximum 14 hours a week. It does not conform to regulatory provisions of Law 102MEN2004; evethough company has had an agreement with the Union at the mill on 01 January 2014 to allow working overtime more than that set in the laws and regulations. This has been raised as a Major non compliance no. 11. To this major non conformance, the company has taken action by issuing internal memo at 12 September 2014 from HRD – Head Office to BBB – Mill, instructed to abide by the respective regulation, of which auditor considered as satisfied. Company refers to Decree of the Governor Jambi No. 610KepGubDisosnakertrans2013 dated 23102013 on Provincial Minimum Wage 2014 of Rp. 1.502.250,- The company issued an Internal Memo No. MI-032CEOHRXII2012 dated 31122013, subject: Stipulation of Employees Wages in PT Bina Bakti Brahma 2014, consists of : A. Wage of Casual Employees KL is Rp. 60.090WD if an employee works, if does not work for whatever reasons, the employee will not be paid. B. Wage of FixedProbationary Employee is Rp. 1.502.250,-month. If absent outside the above rules, then wage per working day will be cut by: N25 X wages. SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 63of 104 These provisions apply from 31122013, and signed by the Managing Director. PKB, both IPB3 and SPSI already have CLA and both refer to the same CLA i.e. CLA 2014-2016. Company provides and gives a variety of facilities and infrastructure for the welfare of the workers, such as: housing, clinics, worship facility, and others. These facilities and infrastructure was recorded in Inventory list, both Estate and Mill. In addition, other welfare facilities are also provided in the form of rice allowances given in cash, condolence money, joy money, THR, insurance, etc. For educational facilities, company just provides a school bus, because the school has not been provided on the site. Based on the results of interviews with sprayers in afdelling D it is known that these sprayers have been given a decent place to live. The house has 2 bedrooms, a bathroom and a toilet. A sprayer with an infant can leave her child at daycare while she works. Company already provides a facility for sprayers to wash their work clothes and bath in the Central Warehouse, but the organization does not yet provides similar facilities in afdelling H which is far away from the Central Warehouse 1.5 – 2 hours trip. This has been raised as a Minor non-compliance no. 17 Employee housing in afdelling H is G10 type housing 10 accommodations. Each has one bedroom and kitchen not provided with individual bathroom and toilet. The toilet is provided outside the house but it is out of order. This has been raised as a Minor non-compliance no. 17 Company already has a bore well for the worker housing in afdelling H. Company has conducted tests to the water but the tests did not include e.coli parameter. This has been raised as a Minor non- conformity no.17. Company has submitted a letter to UPT Laboratory of Jambi Area for water test according to Regulation of the Minister of Health No. 492MEN2010. G6 type 6 accommodatios, each is provided with two bedrooms, kitchen and bathroom including toilet that at the time of the audit looks still functionable. Afdelling H is provided with a daycare. At the time of the audit there were 4 infants 2 of them are 4 and 5 months old who are attended by a care giver. The toilet and bathroom in this daycare in afdelling H are out of order. This has been raised as a Minor non-compliance no. 17 In the afdelling H, electricity is provided from 18 to 22 in the evening and 2 hours in the morning. Religion Worship facility is Mosques and Mushalla for a Muslim, for that Christian religion Methodist and Pentecostal sects there has been a Church which is a fairly close to the residence. For the Catholic SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 64of 104 adherents, Church is not provided in the estate neighborhood, but those who live in the mill neighborhood can reach it in a relatively short time less than one hour. Education For educational facilities, the company provides school bus for worker‟s children who are schooling in SDN 24 in Suko Awin Jaya subvillage, SMP at km 61, SMP in Sengeti City 0.5 hours, and SMP in Bukit Baling Village Based on the results of interviews with some of the school age children in afdeling H, they go for school with their father or using a bicycle to a nearby elementary school. From the results of interviews with an employee at the loading ramp, his son went to school in SD Suko Awin Jaya with him and went home on foot as far as 1 km through the village road. Health Company already has a full time doctor, already hiperkes since 2007, the clinic permit is no. 445OO4SIKPDINKES2011. Mill Worker Facility Facilities for mill workers are managed in different management. The mill has housing facility for workers and sport facility. Based on SIA report by Lingkar Komunitas Sawit LINKS dated 30 March 2013 page 73 – 74 the organization does not yet provide adequate attention to the capacity and number of transportation unit to fetch and transport the wor ker‟s children to school, not yet paying attention to the condition of employee housing, sanitary facility, and clean water. In connection with this, the mill has made a purchase order for buying a school bus with PO No. ESTAMP-BBBJKTD08140211 on 19 August 2014. The estate has budgeted Rp. 609.577.950 per unit for the construction of 23 housing units service no. 001000060 a total of Rp 14.020.292.650 has been approved by the the CEO on 29 August 2014. The contract of steam boiler overhaul with PT. Technindo Contromatra on 28 April 2014 is not seen to have regulatory requirements included in it, such as welder operator requirements. This has been raised as a Minor Non-compliance no. 9 In the sampling of company Work Order with Mr. Hutahuruk with SPK number 391BBB-SAWITSPK- PRO-SITE012014 there is article 2 Rights and obligations of the parties; sub article 2.2 mentions the rights and obligations of the contractor, sub article 2.2.d: comply with employment, SMK3, security SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 65of 104 and the environment. Company does not yet have a mechanism to ensure that contractors have fulfilled that article. This has been raised as a Minor Non-compliance no. 9. Compliance status : Minor non-conformity no 9 17 and observation 10 6.6 The employer respects the right ofs 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 Freedom to establish trade unions is regulated in the preamble to the PP of Period 2012-2014 paragraph 2 sentence 1. Company has 2 unit trade unions, each for Estate Unit and Mill Unit. 1. The new officers of the Estate Workers Union, formed on 1332013, according to minutes signed by the IPB3 Officers Election Committee and the Management of PT. BBB. The Executive Board consists of Chairman: Edison Ependi, Secretary: b. Marpaung, and Treasurer: Rizal. In addition, there are 9 representative boards at each Afdeliing unit A-G, General, and Engineering. The Unions formed is already registered and recorded according to Decree of the Head of Manpower and Transmigration Service, Muaro Jambi Regency, No. 560.602SP-SBIIISOSNAKERTRANS, dated 3March2011, and according to a letter 560.6001Sosnakertrans, dated 2 March 2011, concerning Proof of Registration. The Union is called the Workers Association of PT. BBB, with address Suko Awin Jaya Village, Sekernan District, covering the units of: Palm Plantations Division, Rubber Plantations Division, and Mill Division. The Board consists of: Chairman Edison Ependi, Vice Chairman Syamsul A, Secretary b. Marpaung, Treasurer Rizal, and Representative Officer of the afdelings totaled 13 officers. 2 Mill unit All Indonesia Trade Unions SPSI is approved through Decree of the Regional Board of the Federation of Agriculture and Plantation Workers Union of Jambi Province, No. 12PD.F.SPPP- SPSIJBV2013 dated 1752013 concerning Approval of Changes in Composition and Personnel of Work Unit Board of the Federation of Agriculture and Plantation Workers Union of PT. Brahma Binabankti Oil Palm Mill Unit of Period 2013-2018. The Board consists of: Chairman Saiful Hambali, Vice Chairman SM.Silalahi, Secretary Jonitop Sembiring, Deputy Secretary Bonar Manalu, and Treasurer Mispan. Company support to facilitate the Union is:  Worker Union office which is located in front of the BBB-Oil Palm Estate Office, address: Jln. SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 66of 104 Lintas Timur Sumatera KM 54. Desa SAJ RT. 12, and at Mill.  Tables, chairs,  Computers, not provided but may use the office facilities  Financial for the workers union‟s birthday event  Uniform: for IPB3 it is 60 sets of T-Shirt.  The Workers Union has established its Constitution and Bylaw, stipulated on 21022011. signed by the Chairman and the Secretary.  Bipartite Body is also already formed and approved based on Decree of Kadinsosnakertrans of Muaro Jambi Regency No. KEP.56022LKBSosnakertrasn concerning Registration of Bipartite Body of PT. Brahma Binabakti Kebun Sawit, dated 11 June 2011. There has been a change of Bipartite Body as informed through a letter 007LKBBBB-SIX14  Similarly, a Bipartite Body has been formed for the Mill Unit PKS i.e. on 26 August 2013 and already registered to the local Manpower Service with Decree No. KEP. 56062LKBSosnakertrans regarding Registration of Bipartite Body of PT. Brahma Binabakti- PKS. Data of employees that have joined to become the member of the unions is kept by the Secretary. Up to October 2013, there are 471, as listed on the list of IPB3 Palm members, while for the SPSI PUK- PKS there are 103. Actually, there has been additional membership, but not yet recapitulated. The Unions membership is not restricted to a certain level, but the member must be an employee. Those already registered are charged monthly dues of Rp. 3.000,- as stated in article 8 of the By laws. Both IPB3 and SPSI already have the CLA, both refer to the same CLA. The CLA will be reviewed and revised every two years since its signing as regulated in Article 56 Validity Period. The current CLA of period 2014 – 2016 has been approved by the Manpower Service of Jambi Province. Changes include rise ration which increases from 8,000 to 9,000 per kilo. The worker 15 kg, children 5 kg, wife 8 kg. Records of meetings between company and the Unions as well as the Unions‟ internal has been maintained both in the Unions Secretariat and in the PGA function. There is evidence of record of meetings related to trade unions activities. SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 67of 104 The unions internal meeting has been carried out by the estate and mill trade unions once a month. External meetings Bipartite have been carried out by the mill workers union. The mill Unions has conducted a bipartite meeting to follow up the Unions internal meeting on 08 August 2014 related to the provision of school bus and estate polyclinic, which is located near the mill. The meeting by the estate workers union on 29 August 2014 discussing the proposed premium rise. Compliance status : Conform 6.7 Children are not employed or exploited. Work by children is acceptable on family farms, under adult supervision, and when not interfering with education programmes. Children are not exposed to hazardous working conditions Company has a policy on the requirements of worker ‟s age according to the applicable laws and regulations. This is listed in: 1 the Standard Operating Procedures of Recruitment 01TAP- HRDPSO-RFIII07 in force on 1 March 2007, point E. 2, that the general requirements in the recruitment of an employee are at minimum 18 years old at the time of recruitment. 2. A Memorandum of Status Increases of Foreman Employee and Lower, no. 704HRD-IRRXII11 dated 1122011, regarding the Status and Recruitment of Employee, on sub chapter B. Employee Recruitment Requirements, point 1, between 18 years old to 45 years old. In the book of list of manpower both in the estate and the mill, there are no employees whose date of birth is after 1995. As a conclusion, company currently does not employ a workforce under the age of 18 years. Compliance status : 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 Company has a policy of equal treatment and opportunities for employment. This is regulated in: 1 Article 10 of Company Regulation. 2 The Standard Operating Procedures on Recruitment see 1.7.6, point E. General requirements in the recruitment of a new employee is: a. Indonesian citizen, b. At minimum 18 years old at the time of recruitment, c. Bodily and mentally healthy, d. Meet the requirements of position at the time of recruitment, e, Comply with the company regulation and code of conduct, and f. Not engage in a banned partyorganization, g. Not bound by employment relations with other partieslegal subjects. SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 68of 104 From the list of estate and mill manpower of August 2014 it is seen that Company recruits various manpower from various ethnics, both local and non-local from outside the regions. There are kinds of ethnic such as Jambi, Javanese; Batak, Palembang, Flores, Lombok, Lampung, Minangkabau, Sundanese, Nias, and Bugis. Viewed from gender, the company has also provided the equal opportunity, although the workforce in the Estate and mill is the majority of male workers. Compliance status : Conform 6.9 A policy to prevent sexual harassment and other forms of violence against women and to protect the reproductive rights is developed and applied For the protection of womens reproductive rights the company has set spraying work instruction IK- 12PALMBB-2014 which prohibits pregnant women and nursing mothers to perform spraying job. Company has set up the structure of the Gender Committee excecutive board that have been approved on 29 April 2014 by the Deputy CEO Region and has established the Gender Committee Work Instruction. During the audit in afdelling D, none of 4 female sprayers is breastfeeding or pregnant. Company has established procedures for submission of complaints regarding sexual harassment in the Gender Committee Work Instruction. It is recommended that the Committee intensify the dissemination of complaints procedures as provided for in the Gender Committee Work Instructions because the results of interviews the female sprayers workers are not aware of complaint procedures. This has been raised as an observation No. 10. The company has recorded and resolved the complaint of one of its female workers in August 2014. Compliance status : Observation no. 10 6.10 Growers and mills deal fairly and transparently with smallholders and other local businesses. The pricing of FFB purchase price follows the applicable provisions and summary of the stipulation of FFB price is available from the relevant authorities. The price of FFB as per audit date is imposed by the Plantation Service of Jambi Province. FFB pricing is already done transparently where the Plantation Service pricing is already displayed on the Mill Bulletin Board. There are already invitations from the Jambi Provincial Government from the Regional Secretary No. 0052174DISBUN dated 1 September for FFB pricing of period 5-11 September 2014. TBS pricing is SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 69of 104 done on a weekly basis. The meeting was conducted on 4 September 2014. Oil palm FFB price stipulation is already available for the period 5-11 September 2014, the prices range from Rp. 1.168,67 – Rp. 1.367,25. The Government provisions related to Grower Producing Oil Palm Fresh Fruit Bunches Pricing Guidelines No. 14PermentanOT. 14022013 Company performs 100 grading on plasma fruit and fruit from independent growers. Company has not set the extent of penalty based on the grading it makes. Company has made an update related to the cooperation of PT BBB with cooperative Akso Dano Plasma II in addendum to Cooperation Agreement dated 9 September 2011. In the SPK between the company and a supplier, sampling is done to Mr Ahmad Sunaryo, Asiong Filipus Hunadi Setiadi and Mr. Robinson Pardede. FFB sampling discovered 1. 5 deduction not listed in the SPK. In the plasma farmer receipt there is a deduction for dirt 50 kg each truck. This cannot be ascertained if this dirt deduction conforms to the government provisions 2 x dirt penalty Sampling done to the contractor PT Technindo Contromatra which provides Boiler maintenance services ver houle Boiler. The contractor and company have made an inspection minutes dated 11 July 2014. Invoice was issued on 1 July 2014 and payment was made at the same day totaled Rp. 154,770, 000.00. Sampling of the Group plasma farmer Punak. Submission of FFB in July 2014 totaled 67.180 Kg with a total price of Rp. 72.258.251,-. The accumulated total of 4 times the submission already conforms to the calculation between the cooperative and company. Payment was made on 5 August 2014. The agreement specifies that payments are made on a daily basis before the 10 th day every month. In the sampling, payment time is found to have been complied with. Compliance status : Minor Non Conformity No. 21 6.11 Growers and millers contribute to local sustainable development wherever appropriate Company has given priority to local contractors. Type of work may include but not limited to: construction work, plant maintenance, road infrastructure constructionmaintenance, water water channel, empty bunches transportation, FFB transport, housing development, place of worship, etc. Data of existing partners, supplier and contractor, shows that 16.2 of the Estate and Mill partners come from the area of Sekernan District, Muaro Jambi Regency. SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 70of 104 The realization of CSR 2013 and 2014 up to August 2014 can be verified based on the report of realization of activities and evidence of implementation as well as the results of interviews during the stakeholders meetings on 9 September 2014. CSR activities are fully documented. CSR activities conducted are partly demonstrating the participation of PT. BBB in the construction and development of public facilities and social facilities in Sekernan District, Muaro Jambi Regency. In the SIA report drawn up as per March 2013 there are 14 recommendations. 12 have been implemented, 1 is planned on 1 Dec 2014 of initiating a community panel and the remaining 1 which is not yet realized is to initiate the formation of „Social Learning Group. All SIA recommendations have been incorporated in the Activity Plan of BBB CSR Program Kirana Sekernan 2014-2018. Recommendation No. 11 K3 and employee‟s social is planned in the K3 activity plan. PT. BBB develops a short term CSR program in the Annual Activity Plan 2014, and long term plan in the Strategic Plan of CSR program 2014-2018. In its CSR activities, PT. BBB performs evaluation on a periodic basis. The result of interviews with Edi Susanto SIA Dept. indicates that the mechanism of CSR program evaluation is undertaken on an annual basis. The evaluation of CSR program 2013 has been conducted with related village community representatives. In this activity need assessment is also conducted. The results of need assessment evaluation and the effectiveness of the activity became the basis for preparing the activity plan 2014. Compliance status : Conform 7 RESPONSIBLE DEVELOPMENT OF NEW PLANTINGS 7.1 A comprehensive and participatory independent social and environmental impact assessment is undertaken prior to establishing new plantings or operations, or expanding existing ones, and the results incorporated into planning, management and operations NA- There is no new planting in the scope of certification area 8 COMMITMENT TO CONTINUOUS IMPROVEMENT IN KEY AREAS OF ACTIVITY 8.1 Growers and millers regularly monitor and review their activities and develop and implement action plans that allow demonstrable continuous improvement in key operations Company has conducted examination or monitoring of operational activities through the mechanism of internal audit which was conducted on 2-5 April 2014 with the results of 29 findings. Company has SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 71of 104 followed up the findings of the internal audit conducted by the company. The estate activities are overall already effective. Company has a realized and planned activity associated with the installation of gupon owl cage for 2014 and 2015. Company has installed a total of 30 owl Tyto alba cages as per August 2014 and monitoring has been conducted and 7 cages were identified to contain owls. Company has an activity plan for the installation of owl cage up to December 2015 totalled 144 owl cages. Company also has an owl breeding site where in the first phase 9 owls have been released and in the second phase a total of 6 owls are still being bred. For worker facility improvement the company has approved the additional school bus, employee housing worth Rp. 14.020.292.850,- and premium increase plan. For emergency handling equipment the company has increased pressure switch on the hydrant so that the pressure of hydrant pipe can be maintained at 4.5 kgcm2. It is found that the company is not yet effectively performing a precautionary measure over potential non-conformance, for example, in the mill that the seals of silencer connection and the latch of boiler door which at the time of audit was found damaged. This has been raised as a minor non conformance no. 18, and the company has conducted to repair those equipment and performing regular and detailed K3L inspection for areas with high risk potentials which auditor considered adequate. Compliance status : Conform SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 72of 104

D. C ertified