ACTIONS BEING TAKEN TO STRENGTHEN APP ’S MORATORIUM AND

5 b. With respect to HCS, the verification analysis output revealed that of the 431.1 Ha, a maximum area of 72 Ha could provisionally be considered as HCS and therefore in breach of the forest moratorium. This estimate would be further analysed in a second stage of verification to establish a more accurate figure. 3. Following stage 1, whereby field verification data and APP Operational data field and head office were reconciled, a second stage comparative spatial analysis was implemented Appendix 4 to both double check the output of the first stage and to strengthen the overall result through the inclusion of plot data generated in the full HCS assessment implemented in JuneJuly 2013. Based on the analysis of spatial mapping data and field data, it can be concluded that the total HCS area cleared after 1 February 2013 is 69.45 Ha. This is an unacceptable breach of APP ’ s natural forest clearance moratorium and its FCP. 4. This 69.45 Ha of HCS was cleared despite the FCP Implementation Team “ RKT 2013 Recommendation Map ” and Moratorium Protocol being distributed to all regional and district managers. Land preparation activities took place within the compartments designated as “ No Go ” areas because of a lack of understanding by the district managers of the pre-assessment objectives and the ongoing HCVHCS assessment work being carried out in the “ No Go ” areas. Further, there wasn ’ t a clear and comprehensive protocol and sign off process in place between the regional and district managers related to “ No Go ” and “ Go ” areas. 5. If the pulpwood suppliers ’ operational teams had been provided a robust checklist of actions and documents requiring formal sign-off and on-going monitoring and supervision, this incident would have been avoided. 6. None of the wood cleared from the 69.45 Ha of HCS was sent to APP ’ s mills.

6. ACTIONS BEING TAKEN TO STRENGTHEN APP ’S MORATORIUM AND

IMPLEMENTATION OF ITS FCP As a result of these breaches of the forest moratorium in the “ No Go ” areas, the following steps are being taken: 6 a. The FCP Implementation Team is developing clear procedures which include: I. A sign off process illustrating how the HCS and HCV recommendations and associated final “ Go ” and “ No Go ” maps generated are to be used by operational staff, as part of their operational planning. II. A checklist to accompany the sign off process to ensure that there is formal signoff at each stage of the process. b. These procedures will apply to all future land development processes across APP ’ s entire supply base c. Retraining: All relevant APP and pulpwood supplier operation staff will be recalled for re-briefing to ensure there is a clear understanding of the signoff procedures and operationalisation of the recommendations in accordance with APP ’ s FCP. d. Monitoring: I. Updated Planting Realization Maps to be sent monthly to the FCP implementation team. II. Random field checks are to be conducted by the FCP implementation team every three months. e. Restoration: TFT recommends that APP restore or compensate for the equivalent HCS area of what was cleared since 1 st February 2013. 7 Appendix 1. Summary result of the pre-assessments to identify HCSHCVpeatland areas Methodology Pre-assessments to identify of HCSHCVpeatland areas were deployed in BAP, BMH and SBA, which focused on the areas planned to be developed during 2013the RKT 2013 operational compartments. The company requested that these pre-assessments be undertaken to facilitate plantation development in ‘ low risk ’ areas in order to meet its suppliers ’ plantation forecasts for its proposed new pulp mill being built in South Sumatra. Pre-assessments are not being applied elsewhere to any other of APP ’ s suppliers. Full HCS and HCV including peatland assessments are currently being deployed over all areas of these three companies. Scope Block RKT 2013 HTI concession: 1. PT. Bumi Mekar Hijau BMH 2. PT. Sebangun Bumi Andalas SBA 3. PT. Bumi Andalas Permai BAP Data on the extent of each concession are as follows: Name of Company Total Extent Ha Extent of RKT 2013 Ha PT. Bumi Mekar Hijau BMH 253,612 33,896 PT. Sebangun Bumi Andalas SBA 135,689 8,147 PT. Bumi Andalas Permai BAP 194,589 17,717 Total 583,891 59,760 Source: Layout and spatial analysis of 2013RKT compartments Method 1. Desk Study · Map of land cover · Map of SPOT 5 and its interpretation · Progress of the HTI activity land clearing, plantation, etc. 8 2. Analysis of Secondary Data 3. Aerial Survey 4. Carbon Stock Measurement above ground biomass 5. Consultation with selected stakeholders 6. Biodiversity Survey HCV 1, 2, 3 Desk Study and Its Analysis The secondary data used in the formulation of the field data collection plan and its further analysis can be seen in table below Secondary data for the data collection plan and analysis result Stages Data Source Basemap Physical Desk Study · Land Cover SPOT - 2012 SMF Landsat 2010 Kemenhut · Water catchment area DAS RLPS Kemenhut 2010 · Land System RePPProT 1990 · Basemap river, road PDTK – Kemenhut Field Survey · Aerial Survey TFT-SMF 4-5 February 2013 RKT 2013 SBA, BAP, BMH · Ground Survey TFT-SMF 25 – 29 February 2013 District Jelutung, Bagan Rame, Simpang Heran HTI, Peat, SS, BZ Ecology Desk Study · Ecosystem type Sumatra Eco region Map - WWF · Habitat of Sumatran Elephant · Habitat of Sumatran Tiger · Important Bird Area Birdlife · Peat land Wetlands 2003 RePPPRot 1990 SMF Operational map Desk Study Field Check · Elephant Encounter Location SMF monitoring table and map Survey of Biodiversity · Survey of Ecology TFT-SMF in o 34 Fauna identification transect lane o 9 Plots of Vegetation identification 23 Feb – 7 March Location: · Simpang Heran HK,BZ,SS,BT · Air Sugihan BM · Sungai Jelutung BT, DPSL · Sungai Beyuku HTI · Sungai Penyabungan DPSL,BM, KPPN · Padang Sugihan HK, BT · Kuala Lumpur KPPN, BM · Teluk Pulai HTI, BZ · Tanjung Jati BT, HK · Tanjung Kait LT, SS 9 Stages Data Source · Sungai Ketupak BR, HTI · Sungai Serdang BT · Sungai Gebang Karet, BM, LT, BM, HTI, LT Social Desk Study · OKI statistical data OKI Dalam Angka BPS OKI · Land conflict map BAP, SBA, BMH Interview FGD · Interview FGD TFT-SMF 23 Feb – 7 March 2013 Location: · Banyu Biru Village · Jadi Mulya Village · Kuala 12 Village · Lebong Gajah Village · Simpang Tiga Jaya S. Pedada Village · Simpang Tiga Sakti Village · Srijaya Baru Village · Sungai Batang Village · Tulung Seluang Village · 3 Penyabungan Hamlet, Riding Village · Bagan Rame Hamlet · Parit 26 Hamlet · Sungai Janun Hamlet · Sungai Kong Hamlet Legal Documents Desk Study · Macro Delineation BAP, SBA, BMH · RKU · LHP Gelam · LHP Karbon · RKL RLP 2012 · LITBANGHUT reports · LHP Cultivation of Gelam species · LHP 2012 Peat Carbon · LHP 2011 Peat Emission · LHP Rehabilitation Technology of Peat Swamp Forest · Proceeding in the management of Forests and Swamp Lands in an Integrated and Wise manner · Proceeding in the Role of Science and Technology Iptek in Supporting the Development of Plantation Forests and Welfare of the Community Balitbanghut · RKT Block BAP, SBA, BMH Based on the secondary data analysis, the data collection in the field was obtained from the following activities: 10 Aerial Survey The aerial survey covered 56 of the total area within the RKT 2013 of all the 3 companies. The scope of the observation on each concession is presented in table below. Scope of the observation of the “ Aerial Survey ” activity HTI Extent of RKT 2013 Ha Extent of the Aerial Survey Observation Ha of the observation BMH 33,896 16,034 47.3 SBA 8,147 5,463 66.7 BAP 17,717 12,100 68.3 Total 59,760 33,597 56.2 Carbon Stock Measurement The HCS plots were randomly deployed with the intensity of sampling from 0.01 to 0.025 detailed in the table below. These randomly deployed HCS plots only targeted non-peat areas as defined through available peat maps as these areas were automatically categorized as “ No Go ” . Number of HCS measurement plot on each HTI Concession HTI Extent of Scrub on RKT 2013 ha Intensity of the sampling Plot Plan ∑ Plot Realization ∑ Plot Remarks SBA 4,034 0.025 20 18 2 plots were already cleared; 4 plots carbon contain over 35 tonsha and 14 plot carbon contain below 35 tonsha; No indication of peat existence in these plots 11 HTI Extent of Scrub on RKT 2013 ha Intensity of the sampling Plot Plan ∑ Plot Realization ∑ Plot Remarks BMH 27,754 0.010 56 56 4 plots carbon contain over 35 tonsha and 52 plot carbon contain below 35 tonsha; No indication of peat existence in these plots BAP 12,515 0.025 63 60 3 plots were already cleared; 4 plots carbon contain over 35 tonsha and 56 plots carbon contain below 35 tonsha; No indication of peat existence in these plots Total 44,303 139 134 12 plots carbon contain over 35 tonsha and 122 plots carbon contain below 35 tonsha; No indication of peat existence in these plots The maps below show the plots location and flight paths. 12 13 Consultation with selected stakeholders The consultation was only conducted at the villagehamlet level. This was conducted because the villagehamlet would mostly have interest in the HTI concession areas and therefore engage in the process. The consultation process was conducted through interviews and Focus Group Discussions FGD in the fourteen villageshamlets. The pre-assessment process for the identification of HCV and HCS areas excluding peatland is illustrated below 14 In the preliminary HCS assessment 134 random plots were established in the RKT 2013 areas with a sample intensity of 0.01 to 0.025. The summary of these sample plots is tabulated below. Summary of the Sample Plot of Preliminary Assessment Species Total Tree Min DBH cm Max DBH cm District Total District District KL SH ST KL SH ST KL SH ST Gelam 64 45 40 149 5 5 5 29 13 13 Jambu-jambu 7 7 6 30 Jelutung 2 2 6 6 Mate Ketam 1 1 9 9 Pulai 3 40 35 78 20 9 5 21 1 9 30 Rengas 4 4 5 13 Terentang 31 31 7 30 Grand Total 71 95 119 285 Remarks: - Min DBH : Smallest tree diameter found in the sample plot - Max DBH : Largest tree diameter found in the sample plot - KL : Kuala Lumpur - SH : Simpang Heran - ST : Simpang Tiga 15 The HCS approach distinguishes natural forest from degraded lands with only small trees, scrub, or grass remaining. It separates vegetation into six different classes stratification through the combination of analyzing satellite images and field plots. The Indonesian descriptions of these are: High Density Forest HK3, Medium Density Forest HK2, Low Density Forest HK1, Old Scrub BT 3, Young Scrub BM, and ClearedOpen Land LT. For the purpose of this study, a provisional threshold for HCS forest of greater than 35 tCHa of above ground biomass AGB was set. As a result of the pre-assessments HCSHCVpeatland, specific operational RKT 2013 compartments could be classified into three broad categories:

1. ALREADY DEVELOPED: