Oil palm growers and millers provide adequate information to other

SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 14.05 Issue 00 Rev. 1 20of 124

C. 2 Assessment Findings

C.2.1 Summary of Findings 1 COMMITMENT TO TRANSPARENCY

1.1 Oil palm growers and millers provide adequate information to other

stakeholders on environmental, social and legal issues relevant to RSPO Criteria, in appropriate languages forms to allow for effective participation in decision making. 1.1.1 Evidence should be provided that information is received in appropriate forms and languages by relevant stakeholders. Information will include information on the RSPO mechanisms for stakeholder involvement, including information on their rights and responsibilities. Minor The Company has determined the type level of information provided to stakeholders as required by the RSPO P C. At the time public meeting with stakeholders that is Akso Dano cooperative, they already understand the mechanism to request information from the company. no SOP SUPP II 2017001 dated February 20, 2017 Revision 02 related Reception and Handling of Requests for Information have set the frequency of updating the list of stakeholders conducted every 6 months. The Company has appointed The KTU officer as responsible personnel to receive and reply for any information request. Companies should make provisions related to complaints submitted by email from stakeholder to the company. Conclusion : Observation No. 9 1.1.2 Records of requests for information and responses shall be maintained. Major The related SOP No SOP SUPP II 2017001 dated February 20, 2017 Revision 02 has been revised. The company has set up a hierarchy of officers who provide information replies to relevant stakeholders. Officers who provide information starting from the level of Assistant KTU to the highest level of the Board of Directors in the head office.The approved grant period is provided within a maximum of 5 business days. For the type of information that is not approved will be given the answer within a maximum of 2 working days. In point 4.8.4 states every incoming letter requires a response no later than 14 working days. All requests for information are listed in the company logbook containing the accepted date and the date of the response to the request. SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 14.05 Issue 00 Rev. 1 21of 124 Conclusion : Conform 1.2 Management documents are publicly available except where this is prevented by commercial confidentiality or where disclosure of information would result in negative environmental or social outcomes

1.2.1 Publicly available documents shall include, but are not necessarily limited to:

 Land titlesuser rights Criterion 2.2  Occupational health and safety plans Criterion 4.7;  Plans and impact assessments relating to environmental and social impacts  Criteria 5.1, 6.1, 7.1 and 7.8;  HCV documentation Criteria 5.2 and 7.3;  Pollution prevention and reduction plans Criterion 5.6;  Details of complaints and grievances Criterion 6.3;  Negotiation procedures Criterion 6.4;  Continual improvement plans Criterion 8.1;  Public summary of certification assessment report;  Human Rights Policy Criterion 6.13. Major The company has the procedure SOP No. 106 181 TAP PRO-CSR-HO VI13 that the content has been completed as required under RSPO standards for public accessed such as the concession, Complaints Grivence Procedure, Negotiation Procedure, Continues improvement, Public Summary of the Certification audit report, and Human Rights Policy. The Company has been disseminated type of relevant information and can be accessed by all relevant parties to the stakeholders. The Company has set up the website of PT. BBB under the group name Triputra Agro Persada. In the website, the procedure of Complaint System has been addressed as a part of disseminion of communication procedure. Conclusion : Conform 1.3 Grower and millers commit to ethical conduct in all business operation and transaction

1.3.1 There shall be a written policy committing to a code of ethical conduct and

integrity in all operations and transactions, which shall be documented and communicated to all levels of the workforce and operations. Minor The Company already has a Business Ethics Policy. Policy are listed on the instruction no. 004 SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 14.05 Issue 00 Rev. 1 22of 124 K-DIR II 2013 date February, 22. In each SPK has been stated a prohibition of all forms of corruption, bribery and fraudulent. Sampling has been taken from FFB Suppliers, they have understood of this policy and commit to ethical conduct and integrity in their operation and transaction. Conclusion: Conform 2 COMPLIANCE WITH APPLICABLE LAWS AND REGULATIONS 2.1 There is compliance with all applicable local, national and ratified international laws and regulations.

2.1.1 Evidence of compliance with relevant legal requirements shall be available.

Major At the time of ASA, it is found that there are planted areas for 785 ha which planted in Forest Area based on Forestry Minister Decree No. 7272012 without release of forest area decree. This is not in accordance with Government regulation number 104 of 2015. This finding was issued as Major Nonconformity. At the time of ASA 2 visit, the status of the area is still the same so that in accordance with RSPO cerfication system, client is suspended per date March, 31, 2017 The meeting is held among client, RSPO secretariat and Sucofindo to resolve this case. RSPO asked the client to make the responsible timeplan to achieve the legal status for this are. The company has submitted the evidence for the coorective action. On May 5, 2017 the auditor clarified the status of the release process of PT. Brahma Binabakti to one of the data processing staff at the Directorate of Inauguration and Structuring of Forest Areas, Ministry of Environment and Forestry, on behalf of Mr. Opik Sukarsana. He explained that the process of releasing forest areas is as follows: 1. Application by the applicant 2. Preliminary review by processing staff and forwarded to Section Head for concept of current regional status and regional history according to previous decisions. 3. If the concept has been approved by the Section Head Echelon 4 it will be forwarded to the Head of Sub-Directorate Echelon 3 4. If the Head of Sub-Directorate has agreed then it will be forwarded to the Director echelon 2 5. If the Director has agreed then it will be forwarded to the Director General echelon 1. 6. Wait for response from the Director General. 7. If the Director General has agreed then it will be conceptualized assistance to the integrated team from multi parties 8. Once the concept of an integrated team is approved it will be issued decree for the formation of an integrated team by the minister SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 14.05 Issue 00 Rev. 1 23of 124 9. An integrated team preparation to the field. 10. Field verification 11. Preparation of recommendation report by integrated team 12. The report then reported to the minister by the Director General 13. Based on the report that given, the minister will issue decree on the release of forest area, its boundary and the establishment of new forest area. Decree of Minister of Public Works and Public Housing No. 238 KPTS M 2016 concerning the Granting of Water Resources Utilization Permit to PT BBB for Industrial Enterprises in Sungai Sekawan dated May 9, 2016 is available and valid for 5 five years. Terms of the permit: Maximum debit quota: 16.55 liters sec Schedule of taking: 24 hours Location of take: Sungai Sekawan, Suko Awin Jaya Village, Kec. Sukernan, Kab. Muaro Jambi, Prov. Jambi Coordinates: S 01 21 20.2 E 103 19 19.5 Liability:  Daily water collection report, and monthly water quality test result every 3 three months to BWS Sumatera VI, Dinas PSDA  Calibration of volumetric meter every 1 one year  Daily measurement of daily water level per 3 three months to BWS Sumatra VI, PSDA Service Monthly Water Utilization Report of Sungae and has been reported to BWS Sumatra VI Monthly Water Utilization Report of Sungai Sekawan for the period October - December 2016 was available and has been reported to BWS Sumatra VI Water quality testing of river has been done by UPTB Lab Environment of Jambi Province on September 1, 2016 with evidence of LHU no. 990 LHU L2JBI IX 16 - Upstream and Downstream Sekawan River - PP No. 822001 Class II with BOD, COD, TSS, oil fat, NH3-N, pH parameters and all parameters are still in accordance with the required quality standards. Evidence of the flow meter calibration has been available with evidence of Test Result Certificate No. 510.31 DPP Met SKHP III 2017 from UPTD Metrology Disperindag on March 14, 2017 for 3 three flow meter units for process, boiler and domestic needs. Conclusion: Major NCR No.7 2.1.2 A documented system, which includes written information on legal SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 14.05 Issue 00 Rev. 1 24of 124 Minor requirements, shall be maintained. The Company has set a periodic evaluation to meet regulatory and written in the TAPSOP120 – SHE 001 BAB III Legal and Other Requirements. SPO Officer recapitulate compliance regulations in each unit, which includes in the area of legality, agronomy, best practices mill, employment, SMK3, and the environment. Conclusion: Conform 2.1.3 A mechanism for ensuring compliance shall be implemented. Minor The Company has made a legal compliance verification through internal audit conducted with frequency once a year. SHE Sustainability Officer PT. Brahma Binabakti recapitulates and evaluate compliance regulations in each unit estate and mill. The Company has evaluated the compliance with laws and regulations regularly. A list of applicable and appropriate legislation that in line with the companys activities was available in Annex 1 MI-005 MD SUST XII 2012 and evaluated on March 2017. Evaluation of compliance related to PUPR Candidate No. 37 of 2015 was available with evidence of the Decree of the Minister of Public Works and Public Housing no. 238 KPTS M 2016 concerning the Granting of Water Resources Utilization Permit to PT BBB for Industrial Enterprises in Sungai Sekawan dated May 9, 2016 and valid for 5 five years. Proof of payment of withdrawal and utilization tax of surface water has been available based on evidence of recording no. 000541 as of February 23, 2017 for the use of water 38,239 m 3 . Conclusion: Conform 2.1.4 A system for tracking any changes in the law shall be implemented. Minor The Company has established TAPSOP120 – SHE 001 BAB III which regulate the mechanism of updating the latest regulations relating to the Companys activities. Conclusion: Conform 2.2 The right to use the land is demonstrated, and is not legitimately contested by local people who can demonstrate that they have legal, customary or user rights

2.2.1 Documents showing legal ownership or lease, history of land tenure and the

SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 14.05 Issue 00 Rev. 1 25of 124 Major actual legal use of the land shall be available. Location Permits PT Brahma Binabakti has location permits ie: 1. The Company had estate location permits based on the Decree Governor of the Jambi Province No. 101 1990 dated March 31, 1990 regarding reserve land for the Rubber Plantation PT BBB. Estate is located in location A Hulumendahara river and location B Kaos River in Sekernan district, Batang Hari regency with an area of ± 6.500 Ha. 2. Location permits explained that the reserve land covering an area 6.500 Ha for rubber plantation PT Brahma Binabakti was divided to each location.Location A Sungai Hulumendahara covering an area 3500 Ha located approximately KM 45-KM 60 right the way Jambi-Merlung and Area B River Kaos covering an area 3000 Ha located around Km 42- KM 60 in left the road Jambi - Merlung in Sekernan district, Batang Hari regency. 3. The Company had letter decree of Muaro Jambi regency with No. 529 2011 concerning amendments to the decision of Muaro Jambi regency No. 242011 concerning location permit for development of Palm Oil Estate PT Brahma Binabakti Smallholder I in Suko Awin Jaya village, Tanjung Lanjut village, Sekernan district, Muaro Jambi covering an area 6.830 Ha 4. The Company had letter decree of Muaro Jambi regenct with No. 25 2011 concerning location permit development of Palm Oil Estate PT Brahma Binabakti Smallholder II in Suak Putat village, Tanjung Lanjut village, Bukit Baling village, Gurunggung village, Sekernan district, Muaro Jambi covering an area 5.350 Ha 5. The Company had mill location permits based on Decree Letter Head of the Land Office Batang Hari No. 41997 dated March 17, 1997 covering an area ± 50 Ha located in Bukit Baling village, Sekeran district, Batang Hari Regency. 6. Company also had location permits from Head of Badan Pelayanan Terpadu Satu Pintu Batang Hari Regencywith No. 082011 regarding location permit for development plan of Palm Oil Estate PT. Brahma Binabakti in Pemayung district, Batang Hari regency, Province Jambi covering an area 6.400 Ha 7. There is decree Head of Badan Penanaman Modal dan Pelayanan Perizinan Terpadu Batang Hari Regency No. 662014 concerning the extension of the location permit for the development plan of oil palm estate PT Brahma Binabakti In Pemayung district, Jambi Province, Batang Hari covering an area of 6000 Ha. Plantation Business Permit IUP Related Document of Plantation Business Permit IUP ie : 1. Decree of Minister Agriculture No: HK.350 E4.379 04.90 dated April, 18 1990 concerning the approval of business principles rubber plantation covering an area 6.000 ha in Sekernan district, Batang Hari regency, Jambi province. This permit set a net area about 6.000 ha from SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 14.05 Issue 00 Rev. 1 26of 124 land reserve covering an area 6.500 ha brutto commodities rubber. 2. Letter of Approval of Change Type Plant PT. Brahma Binabakti, Jambi Province of the Directorate General Plantation - Department of Agriculture Number: HK.350 E5.363 05.96 dated May 28, 1996. The change of Commodity rubber with an area of 6.000 ha to the type of commodity rubber and oil palm plantations with a total area of 6.000 hectares Rubber with an area of 3000 ha and 3.000 ha of oil palm on an concession area about 6.220 Ha. 3. PT Brahma Bina Bakti already have Plantation Business Registration License SPUP from the Directorate General of Plantation Production Number: HK.350 425 Dj.Bun.5 VI 2001 dated June 6, 2001. This SPUP set business a rubber plantation culture with plantation area of 6.220 Ha and processing unit type Latek Pekat with a capacity 3.500 tons year. 4. Decree of the Head of the Investment Coordinating Board Badan Koordinasi Penanaman Modal No. 21 IU IV domestic Agriculture Industry 2010 dated May 20 th , 2010 concerning business licenses in the framework of the Merger Merger. The business sectors were rubber and palm oil plantation integrated with the palm oil industry and palm kernel. The capacity license for FFB production was 67 800 tonnes year, latex rubber plantation was 3,500 tons year, crude palm oil CPO was 60,000 tons year, and palm kernel was 12,720 tons year. The land area was listed in the permit was 2,820.00 ha for palmoil plantation and 3390.00 hectares for rubber plantation and 726.00 m 2 for the industry. If the license has been stated that the shortage of FFB as many as 193,200 tonnes equivalent to 8,050 hectares was supplied from around smallholder, the company could carry out product diversification within the scope of the edible oil industry crude oil and vegetable. 5. PT. Brahma Bina Bakti applied for changes in types of plant and processing on SPUP No. HK.350425Dj.Bun.5VI2001 through a letter no. 105492BBBSPM-R01-HOIX13, dated September, 2 nd 2013. 6. Forestry and Plantation Letter No. 5251193 Dishutbun 2013, dated September, 24 th 2013 approved the recommendation of Plantation Business Permit IUP covering an area of 3,661 hectares of oil palm and its management with a capacity of 60 tons hour and Aquaculture Plantation Business Permit IUP- B of rubber covering 2,559 hectares located in the village of Suko Awin District of Sekernan, Muaro Jambi. 7. The Company has processed the changes in plant type and processing on SPUP no. HK.350425Dj.Bun.5VI2001 and obtained the letter from One-Door Integrated Service Agency Badan Pelayanan Terpadu Satu Pintu no. 503213BPTSPXI2013 dated November, 15 th 2013. The letter explained that the issuance of changes in plant type and processing of the license was still in process in the Agency One Stop Muaro Jambi. 8. The Company has obtained the Letter of Approval of Changes in Plant Type and Processing of the SPUP Plantation Business Registration Letter No. HK.350425Dj.Bun.5VI2001 PT. Brahma Binabakti from One-Door Integrated Service Agency Badan Pelayanan Terpadu Satu Pintu of Muaro Jambi Regency number: 50301BPTSP2013 dated 20 November 2013 from originally Rubber commodity and Latex Processing into rubber and palm oil SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 14.05 Issue 00 Rev. 1 27of 124 commodities along with oil palm processing with a 60 tonneshour capacity with a total area of rubber plants of 2,559 Ha and oil palm of 3,661 Ha. 9. The Company has obtained Decree Letter from Regent of Batang Hari no. 640 year 2013 on granting permission of plantation business permit for cultivation IUP-B to PT Brahma Binabakti with area of 3,500 hectares in the Pemayung district. HGU Decree : 1. Decree of the State Minister of Agrarian Head of National Land Agency Number: 61HGUBPN95dated of 2 October 1995 concerning the granting of Exploitation Right for 25 years up to 31 December 2020 to PT. Brahma Binabakti of 6,220 Ha of land located in forest group of S. Hulumendahara-S. Kaos, Batanghari Regency, Jambi Province. 2. Decree of the Head of the Regional Office of National Land Agency of Jambi Province Number: 07HGUBPN.152014 concerning the granting of Exploitation Right for 35 years to PT. Brahma Binabakti of 453.3 Ha 3. Decree of the Head of the Regional Office of National Land Agency Badan Pertanahan Nasional of Jambi Province Number: 08HGUBPN.152014 concerning the granting of Exploitation Right PT. Brahma Binabakti of563.783 Ha, located in Muaro Jambi Regency, Jambi Province. HGU Certificate: 1. HGU Certificate No. 2 with location in Bukit Baling Village, Sekeran District, Batang Hari Regency, Jambi Province. The area covered is based on the letter of measurement No. 1814 1996 dated 1 May 1996 of 28,200,000 m 2 2. HGU Certificate No. 3 with location inBukit Baling Village, Sekeran District, Batang Hari Regency, Jambi Province. The area covered is based on the letter of measurement No. 1815 1996 dated 1 May 1996 of 34,000,000 m 2 . 3. Revision of HGU certificate No. 3 on 20 November 1998 to become 33,902,275 m 2 due to the purchase of 97,725 m 2 by PGN. 4. HGU Certificate no. 94 – 108 that is issued by National Land Agency Badan Pertanahan Nasionalof Muaro Jambi Regency in 2014 with total area of 453.3 Ha in accordance with Decree Letter no. 07HGUBPN.152014. 5. HGU Certificate no. 77 – 93 that is issued by National Land Agency Badan Pertanahan Nasional of Muaro Jambi Regency in 2014 with total area of 563.783 Ha in accordance with Decree Letter no. 08HGUBPN.152014. SK HGB: Decision of the Head of National Land Agency Badan Prtanahaan Nasional No: 34 HGB BPN 2000 dated May 29 th , 2000 providedHak Guna Bangunan to PT. Kirana Sekernan for 30 SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 14.05 Issue 00 Rev. 1 28of 124 years with an area of 492,280 m 2 located in the village of Bukit Baling, District of Sekernan, Regency of Batanghari, Province of Jambi, whis is described in measurement certificate dated September 23 rd , 1999 No. 05 BKB 1999. HGB Certificate HGB certificate no. 2, located in Bukit Baling Village, Sakernan District, Batanghari Regency, and Jambi Province with an area of 49,228 ha, which is ended on October, 9 th 2030. The company has had a Standing Instruction No.027 MI-DIR XII 2012, which contains instructions on how to manufacture and maintenance concession boundary markers such as the size of the mark, the type and color of paint, as well as the identity of the article reporting deadline. However, maintenance and monitoring reporting of the concession boundary markers should be reported every month before the 7th of each month was not appropriate. The last reporting was reported once in the last 3 months i.e from July to September 2013. The Company has reported the maintenance and monitoring of the concession boundary marker in accordance with a standing instruction. Release of forest area The company had permit letter regarding the release of forest area through Decree of Minister Forestry No. 125 Kpt-II 1993 dated February 27, 1993. Letter explained the release of some forest group S. Hulumendahara - S. Kaos located in Batang Hari regency, Jambi covering an area of 6.220 Six Thousand and Two Hundred Twenty ha for the cultivation of rubber plantations with the name of PT.Brahma Binabakti. There are observations finding on previous audit, i.e PT. Brahma Binabakti does not have HGU for Pemayung Estate. During surveillance audit the company shows corrective action in the form of Letter of Assignment Preparation Measurement issued by BPN Regional Office of Jambi province on March 3, 2017. In the letter it is known that on March 6, 2017 until March 10, 2017 there are taskforce for preparing cadastral measurements of PT. Brahma Binabakti in Pemayung District covering an area of 2.463.500 m 2 . In the absence of SK HGU for the Pemayung area, the area is excluded from the scope of certification and included in the Companys time bound. There is a major finding in the previous audit that there are areas of plasma that has been planted for 189 ha in the concession area of PT. Brahma Binabakti. This is not correct accordance to Government Regulation No. 40 1996. During surveillance audit the company has taken the corrective action i.e identified the location of the plasma as outlined in the map the location and conduct negotiations with land owners. Last negotiations conducted on November 8 th to November 12 th 2016, with the agreement that some landowners request that their land be removed from the companys HGU. Some again requested that their land be owned by the company but was given a replacement for another adjacent land. Corrective actions have been considered adequate so the finding can be closed. Conclusion: Conform SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 14.05 Issue 00 Rev. 1 29of 124

2.2.2 Legal boundaries shall be clearly demarcated and visibly maintained.

Minor PT. Brahma Binabakti has a Standing Instruction No. 027 MI-DIR XII 2012. The company already has a list of inventory coordinates HGU. Sampling at visit time to poles border No. KP 39 S 01°20’40,7”; E 103°24’16, it found that the pole is in good condition. Conclusion: Conform

2.2.3 Where there are or have been disputes, additional proof of legal acquisition

of title and evidence that fair compensation has been made to previous owners and occupants shall be available, and that these have been accepted with free, prior and informed consent FPIC. Minor The information of land dispute is with the village community who have finished 8 issue of dispute through Muaro Regent Decree No.25 of 2011. Conclusion: Conform 2.2.4 There shall be an absence of significant land conflict, unless requirements for acceptable conflict resolution processes see Criteria 6.3 and 6.4 are implemented and accepted by the parties involved. Major Until now, there are no areas that are still disputed by others. Related to land disputes between the Company and the NGO FMP Farmer Community Forum, the Company has been doing land dispute resolution process in accordance with the agreement of both parties. Conclusion: Conform 2.2.5 For any conflict or dispute over the land, the extent of the disputed area shall be mapped out in a participatory way with involvement of affected parties including neighbouring communities where applicable. Minor The Company already has mapping-related areas of conflict in accordance with SOP No. 106 899 TAP PRO-CSR-HO XI 16 and the boundaries are adjacent to areas of conflict as well as the coordinates of the area. Conclusion: Conform 2.2.6 To avoid escalation of conflict, there shall be no evidence that palm oil operations have instigated violence in maintaining peace and order in their current and planned operations. Major In procedure of acceptance and resolution of complaints from stakeholders 106899 TAP PRO-CSR-HO VI 13 points 4.3.3 included all parties must refrain to keep the peace and avoid any form of intimidation, either directly or indirectly from any parties. In addition, the company has a procedure of land acquisition 002 TAP PRO-SCP-HO IV 10. The SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 14.05 Issue 00 Rev. 1 30of 124 procedure containedthe provision of granting compensation process transparentlyand fairly, involved government and traditional leader. Conclusion: conform 2.3 Use of land for oil palm does not diminish the legal rights, or customary rights, of other users, without their free, prior and informed consent.

2.3.1 Maps of an appropriate scale showing the extent of recognised

legal,customary or user rights Criteria 2.2, 7.5 and 7.6 shall be developed throughparticipatory mapping involving affected parties including neighbouringcommunities where applicable, and relevant authorities. Major The Company has had SOP of Land Acquisition 002TAPPRO-SCP-HOIV10. In point 4.1.3 has stated land acquisition and compensation based on FPIC. Conclusion: Conform 2.3.2 Copies of negotiated agreements detailing the process of free, prior and informed consent FPIC Criteria 2.2, 7.5 and 7.6 shall be available and shall include: a Evidence that a plan has been developed through consultation and discussion with all affected groups in the communities, and that information has been provided to all affected groups, including information on the steps that shall be taken to involve them in decision making; b Evidence that the company has respected communities’ decisions to give or withhold their consent to the operation at the time that this decision was taken; c Evidence that the legal, economic, environmental and social implications for permitting operations on their land have been understood and accepted by affected communities, including the implications for the legal status of their land at the expiry of the company’s title, concession or lease on the land. Minor The Company requires certain documentation requirements that must be stored in any settlement of the conflict and compensation. It is listed in the SOP Acquisition of land 002 TAP PRO-SCP-HO IV 10 and SOP Acceptance and resolution of complaints from stakeholders 106 899 TAP PRO-CSR-HO VI 13. All data is stored in a separate file for each case. Related to compensation to Mr. Pajrin in Afd E, Block E1 PT. Brahma Binabakti have to take corrective action as follows : a. SOP is equipped with a sample map for the future, complete with coordinates, scale, approved by the party claimed, witnesses, and the approval of the company SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 14.05 Issue 00 Rev. 1 31of 124 b. Minutes of Measurement Result of Land No. 01 BBBS 12014 has been improved by adding the approval of the authorities on behalf of the village. c. Receipts are received by Mr. Pajrin as the landlord Related to the observations findings on previous audit, PT. Brahma Binabakti has make corrective action i.e: agreement on release of land of Mr. Pajrin been repaired by bringing the signature page of the witnesses be under the signature of Mr. Parjin, the Board of Directors and Chief of Desa Jaya Suko Awin Hidayah. Corrective actions have been considered adequate therefore, the previous observation can be closed. Conclusion: Conform 2.3.3 All relevant information shall be available in appropriate forms and languages, including assessments of impacts, proposed benefit sharing, and legal arrangements. Minor There was a relinquishment of rights letter between the company and claim maker; Mr. Pajrin dated February 11, 2014. The relinquishment of rights agreement was made in 3 pieces and there are initials on each of the sheet and also signatures of the witnesses made in a same page. Therefore the previous observation can be closed. Conclusion : Conform 2.3.4 Evidence shall be available to show that communities are representedthrough institutions or representatives of their own choosing, including legalcounsel. Major In the procedure of land acquisition has already contained provisions of compensation document storage of 15 document types. The documentation was complete as required in the procedure. For example, there were document receipt and compensation minutes. Conclusion: conform 3 COMMITMENT TO LONG-TERM ECONOMIC AND FINANCIAL VIABILITY 3.1 There is an implemented management plan that aims to achieve long-term economic and financial viability

3.1.1 A business or management plan minimum three years shall be documented

that includes, where appropriate, a business case for scheme smallholders. Major The Company already has a business plan. It was prepared from 2014 until 2022. In the long- term business plan, the company has projected the fruit production or fruits derived from plasma. In the production plan, the company also have plans to make estimates related to SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 14.05 Issue 00 Rev. 1 32of 124 production of CPO, OER and good production capacity for plasma and own estate. Conclusion: conform 3.1.2 An annual replanting programme projected for a minimum of five years but longer where necessary to reflect the management of fragile soils, see Criterion 4.3, with yearly review, shall be available. Minor The Company has replanting plan program from 2018 until 2021. Replanting plan distribution of palm plantation PT Brahma Binabakti : • In 2018 the Company plans replanting of an area of 1,006 Ha • In 2019 the Company plans replanting of an area of 1,113 Ha • In 2020 the Company plans replanting of an area of 896 Ha • In the year 2021 the Company plans replanting of an area of 582 Ha Conclusion: conform 4 USE OF APPROPRIATE BEST PRACTICES BY GROWERS AND MILLERS 4.1 Operating procedures are appropriately documented and consistently implemented and monitored

4.1.1 Standard Operating Procedures SOPs for estates and mills shall be

documented. Major The company has procedure land clearings with the principle of non-burning zero burning. Land clearing methode have contained in Agronomy Procedure revision 1: TAP-PR AGR OP- 001 V09-1. The company also has a SOP for Mill Operation set out in the Technical Guidelines Mill. Conclusion: conform 4.1.2 A mechanism to check consistent implementation of procedures shall be in place. Minor The Company has a monitoring mechanism for each activity, such as in the implementation of crop rotational that have been defined in the SOP 7 days. The Company has monitoring crop rotation for all afdeling and they also has a list of monitoring crop rotation. The company also has monthly reports as material control operational activities of the Company. Conclusion: conform SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 14.05 Issue 00 Rev. 1 33of 124

4.1.3 Records of monitoring and any actions taken shall be maintained and

available, as appropriate. Minor Company has the documentation for each activity that summarized for each month activities and recorded in the monthly progress report. Conclusion: conform 4.1.4 M The mill shall record the origins of all third-party sourced Fresh Fruit Bunches FFB. Major Company has the data for each origin of FFB that incoming to PT. BBB Mill, the following is the documentation of the origin of FFB kg in 2016 and recorded in the Statistics Of Supply Base 2016. Supply Base FFB Ton Own Estate 71,469 Plasma I 67,656 Plasma II 24,085 Out grower 119,548 Conclusion: conform 4.2 Practices maintain soil fertility at, or where possible improve soil fertility to, a level that ensures optimal and sustained yield

4.2.1 There shall be evidence that good agriculture practices, as contained in

Standard Operating Procedures SOPs, are followed to manage soil fertility to a level that ensures optimal and sustained yield, where possible. Minor Company has SOP for soil sampling procedure 069 PT VIII 2014 and leaf sampling LSU procedure 050 PT VIII 2014. The frequency of the soil sampling conducted once every five years, while the Company conducted leaf sampling LSU for fertilizer recommendations once a year. The Company has been analyzing samples of the leaves that have been done on September 19, 2016, with reference number 51L HAL-HPS int IX 2016 to determine the nutrient content in plants. The nutrients that are measured include the percentage of N, P, K and Mg. The company also had analyzed soil samples to determine the available nutrients in the soil on November 17, 2016 by PT Hijau Persada Sejahtera with reference number 16S HAL-HPS Int XI 2016. Conclusion: conform SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 14.05 Issue 00 Rev. 1 34of 124

4.2.2 Records of fertiliser inputs shall be maintained.

Minor Company has SOP manual fertilization No. PPG GMO ASD 45 SOP to support optimal production by improving soil nutrient. The Company also conducts application of empty bunch to add nutrients to the soil as much as 26,105 tons at a dose of 40 tonshayear. To improve soil nutrients, the company also conducted fertilizing based on analysis of leaves that have been done. The realization of fertilization during 2016 were: Type of Fertilizer Realization Kg Jan-Des 2016 TAP COM 1 - TAP COM 2 440.469 TAP COM 3 3.203.593 Urea 824.049 Borate 54.915 DOLOMITE 175.874 KIESERITE 293.842 MOP 449.216 Conclusion: conform 4.2.3 There shall be evidence of periodic tissue and soil sampling to monitor changes in nutrient status. Minor Company has SOP for soil sampling procedure 069 PT VIII 2014 and leaf sampling LSU procedure 050 PT VIII 2014. The frequency of the soil sampling conducted once every five years, while the Company conducted leaf sampling LSU for fertilizer recommendations once a year. The Company has been analyzing samples of the leaves that have been done on September 19, 2016, with reference number 51L HAL-HPS int IX 2016 to determine the nutrient content in plants. The nutrients that are measured include the percentage of N, P, K and Mg. The company also had analyzed soil samples to determine the available nutrients in the soil on November 17, 2016 by PT Hijau Persada Sejahtera with reference number 16S HAL-HPS Int XI 2016. SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 14.05 Issue 00 Rev. 1 35of 124 Conclusion: conform 4.2.4 A nutrient recycling strategy shall be in place, and may include use of Empty Fruit Bunches EFB, Palm Oil Mill Effluent POME, and palm residues after replanting. Minor The Company also conducts application of empty bunch to add nutrients to the soil as much as 26,105 tons at a dose of 40 tonshayear. Conclusion: conform 4.3 Practices minimize and control erosion and degradation of soils. 4.3.1 Maps of any fragile soils shall be available. Major The Company already had map to reflect the conditions of land suitability of palm oil with a scale of 1: 60,000. In the land condition map PT BBB indicates that the entire area of PT BBB currently on mineral land. Company also had the technical guidelines for the conservation of marginal areas. As for soil and water conservation techniques that Company has done such as: • Maintenance of cover crops and vegetation • Application of empty bunch • Preparation of midrib • Making rorak • Terrace of contour Conclusion: conform 4.3.2 A management strategy shall be in place for plantings on slopes above a certain limit this needs to be soil and climate specific. Minor Company has SOP 060 PT VIII 2014 manufacture of hooves as a management strategy for planting in slopes area with the aim of providing optimal space and potential soil fertility can be maintained in a long period of time and efforts to prevent erosion. Making hoof performed on bumpy areas with a slope of 12 -24. The conservation techniques based on the slope: • Choppy area slope of 0-12 should be planting wheat and preparing the midrib. • Corrugated area slope of 12-24 need to manufacture hoof • Hilly slope of 24-38 need terracing, contour • Very steep area slope above 38 are not proper to be planted SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 14.05 Issue 00 Rev. 1 36of 124 Conclusion: conform 4.3.3 A road maintenance programme shall be in place. Minor The Company has a plan and realization of road repair by hardening the road along the 21,395 meters and the realization data up to 1,620 meters until February 2017 with using grader. The company also has a road maintenance plan during the year 2017 that set out in the Annual Budget. To improve and maintain the quality of the road, the company is also working on creating the trenches, culverts and rorak. Conclusion: conform 4.3.4 Subsidence of peat soils shall be minimised and monitored. A documented water and ground cover management programme shall be in place. Major The company has no peat areas, it is based on the identification type of land. The company has mineral soil types. Conclusion: NA 4.3.5 Drainability assessments shall be required prior to replanting on peat to determine the long-term viability of the necessary drainage for oil palm growing. Minor The company has no peat areas, it is based on the identification type of land. The company has mineral soil types Conclusion: NA 4.3.6 A management strategy shall be in place for other fragile and problem soils e.g. sandy, low organic matter, acid sulphate soils. Minor The Company has a strategy for the fragile and problem soils, such as the company use empty bunch applications to add nutrients in the sandy soil. Generally, PT Brahma Binabakti has mineral soil type so it does not need a lot of treatment to improve the structure of the soil. Conclusion: conform 4.4 Practices maintain the quality and availability of surface and groundwater. 4.4.1 An implemented water management plan shall be in place. Minor The water source for the operational activities of mills and domestic needs comes from river water Sekawan. Tests on water quality WTP for domestic needs conducted once in 6 months SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 14.05 Issue 00 Rev. 1 37of 124 with reference to the Permenkes 4161990 for clean water. The results of test showed that result for all parameters meet requirement quality standards. Therefore, the previous observation can be closed. In 2016, total water consumption for process activities about 112,470 M 3 and total boiler water usage 281,688 M 3 . The amount of water usage as much as 394,158 M 3 . Total FFB processed until the end of December as many as 287,937 tons. The water usage ratio is 1:37. This value is still far from the target of 1:20, but decreased from 2015 at 1:42. Aside from the water surface, the water needs for office activities drawn from underground water for POM in the two points of underground water. With the permission of the Head of Department of Energy and Mineral Resources Muaro District No. 05 of 2014 and No. 08 of 2014 dated March 28, 2014 with a validity period of 3 years. The allowable discharge were 50 literssec for each. Whereas, taking underground water licensing for estate’s office needs with number 062014 is the same discharge of 50 literssec. PT BBB groundwater source map with scale of 1: 100.000 with the number of groundwater uptake points as much as 7 seven has been available. Groundwater uptake permits from the seven are already available from related agencies. Decision of the Head of Department of Investment and Integrated One-Stop Services of Jambi Province concerning GRANTING LICENSE OF LAND WATER OPERATION TO PT BRAHMA BINABAKTI dated January 26 th , 2017 and valid for 3 three years has been available. Therefore the previous major can be closed. Monthly Water Pollution Reports Period February 2017 to Head of ESDM Department of Muaro Jambi based on Permit no. 52014 and No. 82014 with withdrawal amount 8475 m 3 and 2971 m 3 dated March 4 th , 2017 - at POM locations already available. Monthly Water Pollution Reports Period February 2017 to Head of ESDM Department of Kab. Muaro Jambi based on Permit no. 20, 21, 22, 23 with a total of 280 m 3 , 140 m 3 , 140 m 3 and 1680 m 3 dated March 6 th , 2017 - at the estate and POM is available. Groundwater uptake permits and water quality results for 7 seven groundwater sources identified in PKS and estate, but for water sources in afdeling E and A are still in the identification stage for permit handling. This has been raised as observation. Conclusion: Observation No.2 4.4.2 Protection of water courses and wetlands, including maintaining and restoring appropriate riparian and other buffer zones refer to national best practice and national guidelines shall be demonstrated. Major In the current surveillance audit the auditor verifies the corrective actions made by the company in the form of signboard installation for maintenance of riparian and trees planting Pulai, Jambu SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 14.05 Issue 00 Rev. 1 38of 124 biji, and Karet along riparian of Sekawan river. During field visits it is found that the sign board has been installed and trees planted in good condition. The company already has a monitoring program to ensure that the embedded trees can grow well. Adequate corrective action has been made and non-conformity can be closed. PT. Brahma Binabakti has the river map for Own and Pemayung Estate. The rivers that crosses the own estate area according to the river map and based on identification of HCV in 2013 are Putat river width 1,5 – 3 m, Anak Mendahara river width 2 – 4 m, and rivers that crosses the Pemayung estate are Danau Bangko river width 10 – 15 m and Batanghari river width 250 – 400 m. In the HCV identification report, assessor set the width of riparin river as follows: - 20 meters each side of the Suak Putat river along 3.472 m - 20 meters each side of the Anak Mendahara river along 4.192 m - 50 meters each side of the Danau Bangko river - 50 meters each side of the Batanghari river In the previous audit found major non-conformity about recommendation from HCV assessor which set the width of riparian for Suak Putat and Mendahara river are 20 m. The recommendation has get approval from Badan Lingkungan Hidup of Muaro Jambi written in letter No: 660.436BLH.32016 dated 4 April 2016. However, during field visit to Block D-12 Afd. E Auditor found that the company has set the riparian with the width 50 m from the river marks with yellow paint around the palm oil trees. This is consistent with the interviews results with sprayers stating that trees with yellow paint was banned for a given chemical treatment. PT. Brahma make efforts to protect water bodies and the riparian with : 1. Test the water quality of the river to determine the chemical pollution that enter the river water. 2. Establish limited treatment zones without fertilizer and agrochemical applications for border that had already planted. Adequate corrective action has been made and non-conformity can be closed. Conclusion: Conform 4.4.3 Appropriate treatment of mill effluent to required levels and regular monitoring of discharge quality, especially Biochemical Oxygen Demand BOD, shall be in compliance with national regulations Criteria 2.1 and 5.6. Minor Decree of One Stop Agency Muaro Jambi Sub decree No. 07 Kep.KaBPTSP VI 2016 dated June 23, 2016 on the extension of Wastewater Utilization Permit PT. BBB POM with an area of 300 Ha and license valid for 5 five years. Obligations related to the license : - Monitoring the quality of waste water coordinates S 1 21 00.7 103 19 29.2 with parameters of pH daily, BOD, COD, oils fats, Pb, Cu, Zn, and Cd - Monitoring of groundwater quality 5 points: 3 land applications, 2 control wells with the SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 14.05 Issue 00 Rev. 1 39of 124 parameters of BOD, COD, pH, NO 3 , NH 3 -N, Cd, Cu, Pb, Zn, Cl, SO 2 every 6 six months - Monitoring of land 6 layers: 0-120 cm conduct every 1 one year The Company reports on the monitoring activities to the BLH Muaro Sub district. Conclusion: Conform 4.4.4 Mill water use per tonne of Fresh Fruit Bunches FFB see Criterion 5.6 shall be monitored. Minor In 2016, total water consumption for process activities 112,470 M 3 and total special boiler water usage 281,688 M 3 . The amount of water usage as much as 394,158 M 3 . Total FFB processed until the end of December 2016 as many as 287,937 tons. It found that the water usage ratio is 1:37. This value is still far from the target of 1:20, but decreased from 2015 at 1:42. Conclusion: conform 4.5 Pests, diseases, weeds and invasive introduced species are effectively managed using appropriate Integrated Pest Management Techniques

4.5.1 Implementation of Integrated Pest Management IPM plans shall be

monitored. Major The Company has Guideline Technical Agronomy in which there are SOP Pest and Plant Disease Control such as pest control of Worm Eater Leaf UPDKS 041 PT VI 2014, pest control rats 042 PT XII 2014 and pest control beetle horn 045 PT VI 2014. The Company also has early warning system EWS through regular pests monitoring every month such as fire caterpillar, bags caterpillar and ganoderma. Conclusion: conform 4.5.2 Training of those involved in IPM implementation shall be demonstrated. Minor Company had census worker for each Division, coordinated by the foreman of each Division. The company also had census worker that has been appointed as EWS team. Company has conducted EWS Training to the team in the form of Agronomy Technical Training on May 21, 2016 and introduction of pests and diseases of oil palm plantations training and also early detection activities in preventing pests and palm plant diseases on February 26, 2016. The company also conduct planting host plants enemies such as Turnera subulata, Antigonon leptopus and Cassia sp. During 2016, the company has been planting Turnera subulata and Antigonon as much as 2,589.98 Ha also Casia Plant 40.8 Ha. Conclusion: conform SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 14.05 Issue 00 Rev. 1 40of 124

4.6 Pesticides are used in a way that do not endanger health or the environment.