The Group is an Agri-Business company in Indonesia committed to the responsible management of its business operations in sustainable manner, by observing all environmental, social, and economic issues in all its operational activities.

This company policy is to be implemented as follows :

• To comply with all governmental laws and regulations relating to the company’s operation.

• To provide equal chance and opportunity for all employees to participate and to joint in a labor organization / union and to develop their personal career in accordance with their ability.

• To protect and guarantee the reproductive rights of employees, not to employ children under age and to protect employees from sexual harassment in work place.

• To prevent any occurrences of environmental pollution, accidents and any occupational diseases by ensuring that all environmental considerations, health and safety be always an integral part at any stage of company activities and to continuously seek improvement in performance.

• To practice a Zero Burning policy for land clearing during replanting and development of new plantations.

• To facilitate and to encourage energy conservation practices and to promote the recycling of all estate and mill by-products in all operational activities.

• To provide employment and new business opportunities for local communities living around the company operations in accordance with people and company capabilities and to develop adequate socio-economic plans through Corporate Social Responsibility (CSR) programme.

• To maintain biodiversity and areas that have High Conservation Value (HCV) in the company’s operational areas.

• To increase employees’ knowledge and competence in the environment and occupational health and safety issues.

The company is to ensure that this policy is documented, implemented, reviewed, and communicated to all employees in order to be understood, and to be implemented in clear action plans and transparent to all stake holders.

IndoAgri is committed to high standards of Corporate Social Responsibility (“CSR”). As a responsible operator IndoAgri places strong emphasis on the social impacts of its business operations. Plantations by their very nature have a strong social impact role to play, and need to integrate their social policies to the sustainable business model. The plantation business is a long term investment, and this goes hand in hand with the development of sound CSR practices.

IndoAgri is continually improving its CSR activities. Currently CSR and Community Development activities fall under the following main areas

• Providing direct and indirect employments for the local people and plasma community members.

• Building medical clinics, schools and places of worship for its plantation workers and their families;

• Providing educational infrastructure, such as school buildings, teaching/ learning facilities, teacher’s allowances, and scholarships for the best students.

• Providing public water installation by building/ drilling wells

• Providing religious infrastructures such as mosques and churches.

• Providing public health infrastructure by building clinics and emergency care units that also extend services to the surrounding community.

• Repairing roads, bridges and building new ones to improve the traffic access to the surrounding areas.

• Organizing and/or sponsoring local sport tournaments, cultural and religious events for the surrounding community.

• Contributing food packages and ‘Hewan Qurban’ during Hari Raya Idul Adha for the surrounding villagers

IndoAgri considers environmental compliance and protection to be an integral and critical part in the conduct of its operations and it is committed to achieving high standards of environmental management and sustainable production of crude palm oil.

Each of IndoAgri’s oil palm plantations and processing plants has implemented environmental management plans to help reduce the environmental impact of its operations and to monitor the production and the disposal of waste products.

All of IndoAgri’s oil palm plantations are located in Indonesia where the responsibility for environmental regulation and supervision lies with the Local Environmental Impact Management Agency (or Badan Pengendalian Dampak Lingkungan Daerah) (“BAPEDALDA”). The Indonesian government has the power to take action against Indonesian companies for failure to comply with its environmental and forestry regulations. The Indonesian government can impose fines and revoke licences and concessions and even file criminal charges against non-compliant companies.

IndoAgri’s principal environmental concerns relate to the discharge of effluent and waste resulting from the milling of FFB and the refining of edible oils, and land clearance for plantation development. IndoAgri has a zero burning policy for clearing its plantation land and intends to maintain such policy in its future development of plantation land. Hence IndoAgri adopts full mechanical methods to fell trees at replanting and land clearing and stacks them in order to create planting rows and intends to apply such methods, in relation to the development of existing plantation land as well as plantation land to be acquired by it in the future. IndoAgri is solely operating oil palm plantations and refineries and is not involved in clearing tropical rain forest for conversion to oil palm.

An example of IndoAgri’s approach to environmental sustainability can be demonstrated by the use of barn owls to control rats. Rats are among the most prevalent pests in all oil palm plantations in Indonesia that are potentially very damaging and hence must be controlled estate wide on a regular basis. This is normally done using rodenticides. Rat baits containing powerful third generation anti-coagulant rodenticides are generally applied in a campaign of twice a year. These practices besides those of herbicides- and some insecticides-applications would introduce large amount of rather wide-spectrum chemicals into the eco-system.

The barn owl was introduced into the IndoAgri Plantations in 1997 to control rats and since the year 2000 rats in all of IndoAgri’s plantations in Riau (57,000 Ha) have been effectively controlled using barn owls without resorting to any rodenticides. Therefore the population of rats in the field have since 2000 been maintained below economic damaging threshold. Our system and method are completely biological and incompatible with any usage of rodenticides even in a limited area and over a limited time period. We use zero rodenticides in all of IndoAgri plantations in Riau where the barn owl has established its population under a carefully monitored environment favouring their habitat for hunting rats and breeding activities. The barn owl has been breeding in those plantations producing around 11,000 new young birds every year contributing to an ever increasing area of rat control into the neighbouring oil palm areas. The success story of rat control at IndoAgri using barn owl has been documented among others in the Proceedings of the ISP Conference, Kuala Lumpur, May 2000.

IndoAgri’s internal environmental and social development policies emphasise and include the following elements:-

• Compliance with statutory and regulatory environmental standards;
• Commitment towards developing land for its oil palm plantations in accordance with Indonesian regulations including an active no-burn policy;
• Commitment towards managing its oil palm operations in a manner consistent with internationally recognised management practices; and
• Commitment towards improving community and social relations.

As a processor of palm oil, IndoAgri’s operations are subject to various regulations by governmental agencies in Indonesia relating to production processes, waste removal procedures, storage and distribution. All of IndoAgri’s processing plants have waste treatment equipment and internal environmental personnel to help monitor compliance with environmental standards and identify opportunities for improvement.

IndoAgri through its subsidiaries PT SIMP and PT PP London Sumatra Indonesia Tbk (Lonsum), is a member of the Roundtable on Sustainable Palm Oil (RSPO). IndoAgri believes its business operations are conducted in accordance with the RSPO’s Principles and Criteria for Sustainable Palm Oil.

On 30th April, 2009, all of Lonsum’s North Sumatra estates and factories as being producers of crude palm oil had been certified fully conforming to the RSPO’s Principles & Criteria for sustainable palm oil production. The certificate from RSPO’s independent accredited auditor, TÜV Nord, had been achieved through the two month audit in late 2008, which itself follows Lonsum four year journey to conformity. However, we acknowledge that this achievement is part of a never ending journey to ever higher standards of corporate social responsibility.

IndoAgri is immensely proud of achieving this certification, because the RSPO sets the toughest environmental and community standards within the global palm oil industry, and its certificate for sustainable palm oil (CSPO) is the first sustainability standard in the world for any food crop. The RSPO’s eight over-riding principles cover issues of transparency, legal compliance, environmental and community responsibility, best practice, continuous improvement and economic viability. The principles are supported by 39 criteria which themselves utilize 139 objective indicators, against which all of Lonsum’s North Sumatra’s estates and factories were assessed.