Perusahaan Prkbn Lndn Smtr Indnsa Tbk PT : IndoAgri Sustainable Palm Oil Policy

INDOAGRI SUSTAINABLE PALM OIL POLICY 2017

IndoAgri is a leading diversified and vertically integrated agribusiness with operations along the entire supply chain, from plantation management and crop production, through refining, branding and marketing of consumer products.

As one of Indonesia's largest producers and processors of palm oil derived products, we are committed to conduct our business in a way that maximises our economic contribution to society while minimising our impact on the environment, people and local communities. We take our sustainability stewardship seriously and this is integral to our day to day operations.

This policy reflects our practices to operate in a sustainable and traceable manner.

We believe that traceable, sustainably-produced palm oil is integral to the long-term success of the company. We approach sustainable palm oil through three interlinked areas of focus:

• Sustainable Agriculture & Products
• Sustainable Communities
• Responsible Employment & Workplace

  Our Commitments

  Underpinning this policy are the following core commitments to ensure traceable and sustainably produced palm oil:

• No deforestation and conservation of High Conservation Value and High Carbon Stock areas

• No planting on peat regardless of depth

• No burning

• Respect for Human Rights including Free Prior and Informed Consent.

Scope of Policy

This Policy is applicable with immediate effect to all IndoAgri palm oil operations, including our plasma smallholders and third party suppliers from whom we purchase crude palm oil (CPO) for our refineries.

Public Disclosure

The IndoAgri Sustainable Palm Oil Policy 2017 will supersede IndoAgri Sustainable Palm Oil Policy 2013 and Palm Oil Sourcing Policy 2014. Furthermore, IndoAgri Responsible Supplier Guidelines 2014 will be replaced by the enhanced guidelines that will be applied immediately to all IndoAgri's CPO suppliers in line with this policy.

We recognise that policy commitment alone is no substitute for robust transparency and action, so we commit to publicly disclose progress toward achieving our commitments using standardised disclosure framework(s). We commit to review the use of external assurance of our disclosures and/or management approach. Using the best practicable option, we commit to sharing best practices, resources and knowledge between companies (subsidiaries and peers).

SUSTAINABLE AGRICULTURE & PRODUCTS

• Regulatory compliance

  We commit to comply with all relevant laws and regulations. We also commit to adhere to, and act in accordance with, the Principles and Criteria of National and International certification programmes to which we have registered.

• Zero burning on land clearing

  We strictly prohibit open burning for land clearance. This has been practised by IndoAgri for many years and has been formalised in our policies since 2007. Land clearance should be performed mechanically in accordance with local regulations.

• No development on, and conservation of, High Conservation Value (HCV) areas

  We commit to ensure that there is no new development in HCV areas within our operations.

  We commit to buying palm oil from smallholders and external suppliers that does not originate from areas cleared of primary forest since 2011.

  We commit to develop and implement an HCV rehabilitation plan for all identified HCV areas for each site under our direct control.

  In line with Roundtable on Sustainable Palm Oil Principles and Criteria ( RSPO P&C), we continously conserve the existing biodiversity, rare/endangered species, riparian lands, HCV areas of importance, as well as the social and cultural value in the communities local to our operations.

  We will ensure that independent HCV assessments are performed by licensed assessors from the HCV Resource Network in accordance with the applicable procedures and guidelines (RSPO P&C) and using a recognised HCV toolkit for Indonesia.

  We will regularly communicate with employees and local communities living around our estates the importance of the HCV areas and the restriction of activities such as hunting, trapping or trafficking of wild animals within them or adjacent to them. The collecting of rare/endangered species is prohibited.

• No development on, and conservation of, High Carbon Stock (HCS) areas

  In line with RSPO P&C, we commit to evaluate the carbon stock of proposed development areas designated in our formal Land Use Change analysis. This evaluation - when coupled with programmes of action, monitoring and enforcement - will enable us to ensure that HCS areas are conserved.

  We commit to use the HCS evaluation methodology agreed upon by RSPO, before any new development takes place.

• No new planting on peatland regardless of depth

  We will not develop on peatland, regardless of depth, for any new development.

  For established plantations, we ensure the implementation of Best Management Practices for peat to manage and improve the ecological functions of peatland within and adjacent to our concessions.

• Traceable and transparent supply chain

  Our comittment is to build a traceable and transparent supply chain which includes smallholders and third party suppliers.

  We commit to achieve Roundtable on Sustainable Palm Oil (RSPO) and Indonesia Sustainable Palm Oil (ISPO) certification for all of our oil palm estates and mills, and our plasma smallholders, by the end of 2019.

  To achieve that, we work with our smallholders to build their capacity in order to improve their yields, and to become certified to RSPO and ISPO standards.

  We commit to the goal that all CPO suppliers to our palm oil refineries must comply with this policy and achieve ISPO certification, and preference will be given to those suppliers that are also RSPO certified.

• Reduce Greenhouse Gas (GHG) emissions, improve energy efficiency

  As a means to planning actions to reduce emissions from our operations we commit to measuring all sources of GHG emissions in accordance with relevant international and local standards for GHG calculation, using recognized methodology. Opportunities to achieve reductions are via mill effluent treatment to reduce methane emissions, avoiding deforestation, management of cultivated peatland and restoration of peatland/peat forest.

  We encourage energy conservation and environmental protection practices through AMDAL compliance and PROPER certification for the refineries and factories.

• Adopt agronomic best practices to minimise negative environmental impacts, including practices relating to soil, waste and pest control

We commit to achieving high yields per hectare through correct plantation management practices to ensure economic viability. To increase operational productivity for example, we apply precision agronomy methods, innovation in seed breeding, and careful use of crop protection agents. We commit to immediately stop the use of Paraquat (and products containing Paraquat and its related compounds).