High Conservation Value (HCV) Public Summary

PUBLIC SUMMARY Date: January 2018 High Conservation Value (HCV) Public Summary Tuah Kencana Permai (TKP) Cooperative PT Kencana Graha Permai West Kalimantan, Indonesia PUBLIC SUMMARY January 2018 i

Date of report : January 2018 Lead assessor : Sahat Aritonang Assessment team members : Aisyah Sileuw, Aji Sartono, Andre Febriant, Gaia Khairina, Hanjoyo, Indrawan Suryadi, Iwan Kurnia Rosyid, Meida Rosani, Muhammad Iqbal, Muhammad Irfan Danu. Lead assessor contact information Daemeter Consulting Jl. Tangkuban Perahu 1, Bogor, West Java 16128, Indonesia T: +62 251 831 5625 E: sahat.aritonang@daemeter.org ALS license type : Provisional (ALS16011SA) Organization commissioning HCV assessment Golden Agri-Resources Ltd. (GAR) Vidya Paramita Sustainability Implementation Division Sinar Mas Land Plaza, Tower 2, 30th Floor, Jl. M.H. Thamrin, Jakarta, Indonesia +62-21-50338899 vidia.paramita@sinarmas-agri.com Location of assessment : Koperasi Tuah Kencana Permai, scheme cooperative of PT Kencana Grana Permai Keta pang District, West Kalimantan Period of assessment : November - December 2016 Size of assessment area (ha) : 1643.1 ha Size of HCV management area (ha) : 349.6 ha 11 Planned land use for assessment area: New scheme oil palm development Certification scheme : RSPO ALS tier ranking : Tier 1 2 Peer Review : Cynthia Chin (28 July 2017) 1 This does not include the total area of HCV 6 that can only be delineated through further participatory mapping with local communities 2 Tier 1 is determined as HCV assessment was conducted by a provisionally licensed assessor and local communities precense around the consession area. PUBLIC SUMMARY January 2018 ii

TABLE OF CONTENTS TABLE OF CONTENTS... iii ACRONYMS AND ABBREVIATIONS... iv LIST OF FIGURES... v LIST OF TABLES... v 1 INTRODUCTION AND BACKGROUND... 6 2 DESCRIPTION OF ASSESSMENT AREA... 8 3 HCV ASSESSMENT TEAM... 10 4 TIMELINE DAN METODE... 11 4.1 Secondary Data Collection...12 4.2 Primary Data Collection...12 5 FINDINGS... 15 5.1 National and Regional Context...15 5.2 Landscape Context...15 5.3 HCV Outcomes and Justification...16 5.3.1 HCV 1- Species Diversity...16 5.3.2 HCV 2 Landscape-level ecosystems and mosaics...17 5.3.3 HCV 3 Rare, threatened, or endangered ecosystems, habitats, or refugia...17 5.3.4 HCV 4 Ecosystem Services...18 5.3.5 HCV 5 Community Needs...18 5.3.6 HCV 6 Cultural Values...18 5.4 Stakeholder Consultation...20 6 HCV MANAGEMENT AND MONITORING... 30 REFERENCES... 1 PUBLIC SUMMARY January 2018 iii

ACRONYMS AND ABBREVIATIONS AMDAL ALS APL BIG BPN CITES CR DAS DEM EN FGD FPIC FSC GIS HCS HCV HCVMA HL IUP IUCN KLHK MoU NTT RBI RePPProT RTRWP RSPO SOP VU WWF Analisis Mengenai Dampak Lingkungan, Environmental Impact Analysis Assessor Licensing Scheme Areal Penggunaan Lain Badan Informasi Geospasial, Geospatial Information Agency Badan Pertanahan National, National Land Agency Convention on International Trade in Endangered Species Critically Endangered (a species category under IUCN Red List) Daerah Aliran Sungai, Watershed Digital Elevation Model Endangered (a species category under IUCN Red List) Focus Group Discussion Free, Prior and Informed Consent Forest Stewardship Council Geographical Information System High Carbon Stock High Conservation Value High Conservation Value Management Area Hutan Lindung, Protected Forests Ijin Usaha Perkebunan, Plantation Permit International Union for Conservation of Nature Kementerian Lingkungan Hidup dan Kehutanan, Ministry of Environment & Forestry Memorandum of Understanding Nusa Tenggara Timur Rupa Bumi Indonesia, Indonesia Landforms Regional Physical Planning Project for Transmigration Rencana Tata Ruang Wilayah Provinsi Rencana Tata Ruang Wilayah Provinsi, Provincial Spatial Plan Standard Operating Procedures Vulnerable (an IUCN Red List threatened species category) World Wide Fund for Nature PUBLIC SUMMARY January 2018 iv

LIST OF FIGURES Figure 1. The boundaries of PT KGP and TKP scheme estate location permits. The HCV assessment was carried out inside and around the boundaries of scheme cooperative.... 7 Figure 2. Land cover map of scheme estate location permit based on satellite imagery analysis in 2015... 9 Figure 3. HCV 1 area within TKP Cooperative estate... 24 Figure 4. HCV 3 within TKP Cooperative estate with land systems shown on the background. HCV 3 areas are all remaining forests located within the boundaries.... 26 Figure 5. HCV 4 area related to streams/rivers and the ecosystem services of water provision and flood control within the Cooperative estate.... 27 Figure 6. HCV 4 area related to areas important in controlling erosion and sedimentation within the Cooperative estate.... 28 Figure 7. HCV 5 and 6 areas within and around the Cooperative estate..... 29 Figure 8. HCV Management Areas which include streams, riparian zones, and forests within the TKP Cooperative boundaries.... 35 LIST OF TABLES Table 1. Administrative boundaries of TKP Cooperative... 8 Table 2. HCV assessment team members in alphabetical order... 10 Table 3. Timeline and steps in HCV assessment... 11 Table 4. Subvillages surveyed for HCV 5 and 6 identification within and around scheme estate... 14 Table 5. HCVs identified within the TKP Cooperative boundaries... 19 Table 6. Stakeholder consultation during HCV 5 and 6 assessment (6-14 December 2017).. 20 Table 7. Important points from the stakeholder consultation for PT KGP and TKP Cooperative... 22 Table 8. HCV area and Management Area within TKP Cooperative... 30 Table 9. Evaluation of threats against HCV within and surrounding the cooperative estate. 31 Table 10. HCV management and monitoring recmmendations in TKP cooperative estate... 32 PUBLIC SUMMARY January 2018 v

1 INTRODUCTION AND BACKGROUND PT Kencana Graha Permai (KGP) is a subsidiary of the Golden Agri Resources (GAR) group located in Ketapang District. PT KGP received a Location Permit from the Plantation Agency of Ketapang with permit Number No. 551.31/0459/ Disbun C on March 17, 2005 for a total area of 11,295 ha. According to the provided AMDAL, the company is not an acquisition from other companies and previously managed forests and abandoned ladang (seasonal croplands). This company operates alongside another GAR subsidiary, PT Cahaya Nusa Gemilang, which is located to the west adjacent to PT KGP s estate. The company started operating in 2007 and is currently developing its scheme (plasma) estate. HCV assessment for the nucleous estate was conducted in 2010. Daemeter conducted HCV assessment focusing on the scheme areas managed by the Tuah Kencana Permai (TKP) Cooperative. The assessment began in November 2016 with desk study and scoping, followed by field surveys on 6-15 December 2016 and analysis and reporting from December 2016 to September 2017. For more information about the commission of the HCV assessment, Ms. Vidia Paramita of the Sustainability Implementation Division at GAR may be contacted by email (vidia.paramita@sinarmas-agri.com) or at Sinar Mas Land Plaza, Tower 2, 30 th Floor, Jl. M.H. Thamrin, Jakarta, Indonesia (Phone: +62-21-50338899). The HCV concept has been adopted by the Roundtable on Sustainable Palm Oil (RSPO) as a cornerstone for its standard for certified sustainable palm oil. RSPO standards require that areas that contain HCVs are identified and appropriate measures are taken to manage and maintain them. RSPO also requires that all new plantations developed after November 2005 avoid conversion of areas required for the management to maintain or enhance HCVs in the plantation area. The HCV assessment in this report references the Common Guidance for Identification of High Conservation Values (Brown, et al., 2013) with some modifications (if stated) according to the Guidelines for the Identification of High Conservation Values in Indonesia (HCV Toolkit Indonesia)(HCV Toolkit, 2008). PT Kencana Graha Permai (KGP) and Koperasi Kebun Tuah Kencana Permai (Koperasi TKP) PT KGP has a total area of 9332.8 ha for scheme estate according to its Right to Cultivate (HGU). In this report, this area is referred to as estate or permit location. The nucleous estate was built in 2006 with current total planted area of 7609.1 ha and no plans for nucleous expansion at this moment. The scheme estate has been planted from 2008 to 2012 with current total planted area of 810.5 ha. The planted area target for the scheme estate is 1521,8 ha, in line with the partnership scheme requirement of 20% of planted nucleous estate. With these numbers, the company is currently lacking 711,4 ha to complete its scheme estate. The company also owns a mill with installed capacity of 80 tons/hours, which processes fruits from both PT KGP and the adjacent PT CNG and their scheme estates (Figure 1). PUBLIC SUMMARY January 2018 6

Figure 1. The boundaries of TKP scheme estate location permits. The HCV assessment was carried out inside and around the boundaries of scheme cooperative. PUBLIC SUMMARY January 2018 7

2 DESCRIPTION OF ASSESSMENT AREA The HCV assessment consisted of PT KGP scheme estate which is managed by the Tuah Kencana Permai (TKP) Cooperative with a total area of 1646 ha and located in Marau subdistrict, Ketapang District West Kalimantan (Figure 1). The conversion being planned for oil palm plantation. The TKP cooperative estate s administrative boundaries are shown on Table 1. The TKP Cooperative is in Ketapang District, which is previously part of the tropical lowland forests at the south of West Kalimantan Province. This Cooperative is situated in areas where plantation development is legal as it sits on Area for Other Uses (APL), a nonforest zone designation by the Ministry of Environment and Forestry, and has been holding a Dry Cropland (Pertanian Lahan Kering or PKL) status by the provincial government since 2007. This region is hilly with elevations less than 50 masl. It was previously dominated by lowland dipterocarp forests and heath forests on dry hills mixing with freshwater swamps, with shallow peatlands near streams and poor drainage. The land cover in this region have almost been entirely converted, leaving only little secondary forests (Figure 2). This region is also surrounded by community rubber plots and oil palm estates; land conversions to oil palm have been rising rapidly since 2006, when the total size of oil palm location permits stood at 407,803 ha, and by 2014 this number had increased to 4,513,700.6 ha which does not include the size of location permits for mining or other commodities (State Plantation Agency, 2014). According to 2016 statistics, there are 13,517 persons in the Marau Subdistrict but only 4,409 persons (33%) are found in three villages within and surrounding TKP Cooperative location permit: Rangkung, Belaban, and Batu Payung Dua villages. The sex ratio in the three villages is 104 (104 males for every 100 female). Table 1. Administrative boundaries of TKP Cooperative Side Company North East South West PT. Agri Plus, Batu Payung Village PT KGP nucleous plantation, Rangkung Village PT Budidaya Agro Lestari, Belaban Village PT. Cahaya Nusa Gemilang, Randai Village PUBLIC SUMMARY January 2018 8

Figure 2. Land cover map of scheme estate location permit based on satellite imagery analysis in 2015. PUBLIC SUMMARY January 2018 9

3 HCV ASSESSMENT TEAM The HCV assessment team consisted of eleven people (Table 2). Table 2. HCV assessment team members in alphabetical order Name Organization Role Expertise Aisyah Sileuw Daemeter Consulting HCV 5 & 6 identification team, provisionally licensed assessor Project management, socioeconomics and culture, participatory mapping Aji Sartono Daemeter Consulting GIS & remote sensing GIS & remote sensing specialist Andre Febriant Daemeter Consulting HCV 5 & 6 identification team Socioeconomics and culture Gaia Khairina Daemeter Consulting HCV 5 & 6 Environmental science identification team Hanjoyo Daemeter Consulting HCV 1-4 identification team; botanist Botany, landscape ecology Indrawan Suryadi Daemeter Consulting GIS & landscape ecology GIS & remote sensing, landscape ecology Iwan Rosyid Daemeter Consulting HCV 5 & 6 identification team Meida Rosani Daemeter Consulting HCV 5 & 6 identification team Muhammad Iqbal Daemeter Consulting HCV 1-4 identification team; ornithologist Muhammad Irfan Daemeter Consulting HCV 5 & 6 Danu identification team Sahat Aritonang Daemeter Consulting Provisionally licensed Lead Assessor Community relations, socioeconomics and culture, participatory mapping Forestry Ornithology, mammal Forestry Biodiversity conservation, landscape ecology, forestry PUBLIC SUMMARY January 2018 10

4 TIMELINE DAN METODE The HCV assessment took place from November to August 2017 Table 3. Timeline and steps in HCV assessment Step Description Date 1 Compilation of available secondary and available primary data, including preliminary stakeholder consultation during a short scoping visit to PT CNG November 2016 23 25 November 2016 (scoping) 2 Rating of assessment as Tier 1 or Tier 2 and reporting this assessment to HCVRN November 2016 3 Team formation and briefing on project scope November-December 2016 4 HCV pre-assessment (scoping study) based on available data 23-25 November 2016 5 Planning for fieldwork and agreement on field methods for primary data collection 6 Fieldwork and primary data collection, including direct stakeholder consultation December 2016 6-15 December 2016 (HCV 5 & 6); 7-11 December 2016 (HCV 1-4) 7 Data analysis and interpretation December 2016- February 2017 8 Preparation of draft report, including maps of HCVMA and recommendations on management and monitoring January-February 2017 9 Public consultation to report draft HCV findings and refine threat assessment. March 2017 10 Amend the draft report based on feedback from public April-June 2017 consultation and company 11 External peer review of draft report June 2017 12 Finalizing report based on feedbacks from peer reviewer June 2017 13 Sign-off by peer reviewer July 2017 14 Public Summary report August 2017 15 Quality Panel Review August 2017 14 Finalizing and submitting the final HCV report to PT CNG September 2017 PUBLIC SUMMARY January 2018 11

4.1 Secondary Data Collection Land Cover For the assessments of HCVs 1-4, Sentinel 2 imageries from the year 2016 were analyzed and confirmed using images from previous years. The satellite imagery was categorized into different land cover types using onscreen digitization. The results of land cover mapping indicated areas that need to be surveyed during on-field HCV assessment. For stream mapping, hydrography data from Rupa Bumi Indonesia (RBI) created by the Geospatial Information Agency (BIG) was used. Digitization was conducted at a scale of 1:50,000. Topography Data Digital Elevation Model (DEM) created by the Shuttle Radar Topography Mission (SRTM) was used to define the topography and slope within the entire area of PT CNG and CTS. HCV 4 utilizes this secondary data set to define major components of erosion potential. This data has been gap-filled by the USGS-NASA at a horizontal resolution of 30 m (1 arc second). Ecosystem Mapping For the identification of HCV 3, the assessment used the revised RePPProT version in the Indonesian Toolkit appendix. Using the precautionary approach, the assessment team used a lookup table which identifies rare or threatened RePPProT land classes in West Kalimantan. Maps of RePPProT land systems were corrected and overlaid with forest cover to identify remaining forest areas within rare or threatened RePPProT land systems. Species Data Secondary data regarding HCV 1species which are potentially present within the assessment area were obtained from field guides and commonly used sources such as The Ecology of Kalimantan (MacKinnon, Hatta, & Mangalik, 1996) and the IUCN Red List (IUCN, 2015). Social and Cultural Data Secondary data for HCV 5 and 6 identifications were obtained from the social profile reports of the Batu Payung Dua Village and Randai Village published by an internal team of PT Smart Tbk in 2016. 4.2 Primary Data Collection Primary data collection was carried out using the rapid assessment method, where remaining forest cover and riparian areas were rapidly observed in 64 different spots to assess biodiversity. Social survey was conducted using the Focus Group Discussion method. Field verification of land covers and rivers Field observations were conducted to compare the accuracy of land cover condi tions created from secondary data with actual field conditions. Observations showed that the land cover maps created from secondary data reflected actual field conditions well. For stream mapping, each river in the area of interest was tracked and mapped using a GPS device. PUBLIC SUMMARY January 2018 12

Plant Survey Based on the results of satellite imagery analysis, there is limited forest cover remaining in the area of interest. Semi-structured plant observations were made of trees, secondary regrowth, and remnant forests identified from the desktop study of satellite images. Species identification for particular taxa were carried out in the field and supplemented with digital photography. Higher priority was given to survey for species of concern under HCV 1. Bird Survey The bird survey aimed to identify features of the bird community which are relevant to HCV 1. The survey methods included opportunistic observations and interviews with local hunters. The combination of these methods resulted in a holistic bird inventory and increased the likelihood of detecting key species which require conservation interventions. Mammal Survey Survey of mammals and other vertebrates of concern under HCV 1 species was conducted using rapid assessment techniques, combining (i) un/structured interviews with local hunters (ii) assessment of habitat quality (in combination with the botany team), (iii) direct (visual) and indirect (footprints, sounds, or scat) sightings during habitat assessments. Community interviews and habitat assessments were conducted at the village level. Data obtained from interviews, habitat surveys, and observations resulted in a temporary species list that indicated which species are present or potentially present within the area of interest. This data was combined secondary data to (1) assess the likelihood of presence for each species, (2) assess the likely population viability for a number of species, and (3) create recommendations for HCV 1 species management. Social and Cultural Survey to Identify HCVs 5 and 6 Fifty-five villagers from eight subvillages in the three villages were surveyed for the assessment of HCVs 5 and 6. Open meetings were held at one or two subvillages at a time. In each meeting, the villagers were interviewed using the Focus Group Discussion method. The discussion questions were based on the Common Guide and Indonesian Toolkit and aimed to identify the communities dependence on natural ecosystems in meeting basic needs (HCV 5) and to identify important cultural sites (HCV 6). Following the discussion, villagers were asked to sketch a map of their subvillage and show the locations of HCV 5, HCV 6, and other important sites on the map. PUBLIC SUMMARY January 2018 13

Table 4. Subvillages surveyed for HCV 5 and 6 identification within and around scheme estate No Subvillage Village Subdistrict 1 Tanjung Batu 2 Batu Payung Batu Payung Dua 3 Selingsing Kuning 4 Rangkung 5 Sungai Keranji 6 Bentawan 7 Blambangan 8 Blatuk Rangkung Belaban Marau PUBLIC SUMMARY January 2018 14

5 FINDINGS 5.1 National and Regional Context The TKP Cooperative is located in Ketapang District, which is previously part of lowland tropical forests at the southern part of West Kalimantan region. Based on WWF ecoregions, this area is part of the lowland tropical rainforest ecoregion and is situated close to lowland peat forest in southwest Kalimantan (Olson, et al., 2001). This ecoregion is identified by WWF as a global conservation priority for its extraordinary biodiversity, habitat conversion, fire, and hunting. Deforestation is a serious threat to biodiversity, where in the past decade Kalimantan has lost its forest cover extensively. There has been a significant decline in forest area within the last 15 years which also occurred within the TKP Cooperative area. Based on Borneo-wide Population Habitat Viability Analysis (Singleton, et al., 2004), potential orangutan habitats do not overlap or is in proximity to the TKP Cooperative estate. According to Holmes, et. al. (2001) and Birdlife International (2004), there are two Important Bird Areas in West Kalimantan, Gunung Palung National Park and Muara Kendawangan Natural Reserve, both of which are located 50 km away from scheme estate. Both IBAs comprise Key Biodiversity Areas in Indonesia which has been identified as regions with significant value at the global value (Langhammer, et al., 2007). Based on Indonesian Wetland Sites (Wibowo & Suyatno, 1998), there is no significant wetlands around the estate. In West Kalimantan, the only important wetland sites are at Danau Sentarum and Tanjung Puting National Park, which are far from the estate (Ramsar, 2015). Thus, the TKP Cooperative estate is not located in wetlands or significant regional habitat areas. 5.2 Landscape Context The indicative boundary under the wider landscape context is within radius 1 km from outer boundary. This is based on consultation with community and desktop study shows that impacted community area approximately within radius 1 km from the boundary and the fact that there is no administrative boundary that available as references. Land Use According to the Forest Zone Map based on SK. 2382/Menhut-VI/BRPUK/2015, the Area of Interest is not located within forest zones, be that production or conservation forests. However, beyond the north border of scheme estate is the administrative boundary of the Gunung Raya Protected Forest, although the boundaries cannot be visually determined on the field. Land System Physiographic regions are made of land systems which are classified based on general similarities and geographical locations. The Regional Physical Planning Project for Transmigration (RePPProT, 1990) has classified physiographic regions in Indonesia. The physiographic regions in this report follows RePPProT with some changes and corrections as contained within the Digital Appendix of the Indonesian HCV Toolkit. The TKP Cooperative PUBLIC SUMMARY January 2018 15

estate is located in the Southern Plains and Mountains physiographic region. This region has been deforested and is marked by rolling plains with scattered hills. According to RePPProT, the TKP Cooperative estate falls within three land classes: Rangankau (RGK), Honja (HJA), and Pakalunai (PKL). Elevation and Topography This landscape has a flat topography and a few low hills (up to 200 masl) outside of the AOI. Within the AOI, the maximum elevation is also 200 masl. The highest elevation is found in the east to the southeast border of the AOI. A relatively low elevation and few steep slopes make this area suitable for oil palm development River According to HCV Identification report of PT CNG (IPB, 2011), the area of interest is part of the Kendawangan Watershed. The area has a wet tropical climate without any real dry months, with an average rainfall of 3.425 mm and average rainy days of 183 days in a year (IPB, 2011). Within the scheme estate, the rivers Pelingkai, Lansat, Sadukan, and Temelajau has HCVs that are significant to the local subvillagers in supplying fish. Land Cover and Vegetation There are few remaining forests in a poor condition within the estate. There are no more large trees left in this area. Based on field observations, satellite imagery, and land cover analysis, there is very little natural forest left outside of the assessment area, se parated from the secondary forests and shrubs, or forests which grow naturally among community rubber trees or fruit trees that are still maintained by the local communities (pedahasan). Currently the TKP Cooperative estate is dominated by oil palm and shrub land covers. Oil palms were planted after the planting in nucleous estate was completed. There were shrubs situated close to mixed gardens dominated by rubber trees. In addition, there are a few small sections of grassland formed by fires that recur during long dry seasons. 5.3 HCV Outcomes and Justification 5.3.1 HCV 1- Species Diversity The following are found in the AOI: 1. Functions which can support the biodiversity in the protected area around the AOI, specifically the Gunung Raya protected forest by the north boundary, the riparian zones of Langsat, Sadukan, Jelemuk Rivers, and other rivers yet to be identified, as well as local conservation areas such as Hutan Keramat (Sacred Forest) and Pulau Tembawang. 2. The presence of 40 species (1 tree, 9 birds and 30 mammals) which have biodiversity significance at the national and global levels, such as Critically Endangered, Endangered, Vulnerable, limited distribution, or protected species. Of these 40 species, two are especially notable under the IUCN Redlist: kayu ulin (Eusideroxylon zwageri) which is considered as Vulnerable plant species, and the Sunda pangolin or trenggiling (Manis javanica) which is a Critically Endangered mammal species PUBLIC SUMMARY January 2018 16

3. Remaining secondary forests support these threatened and protected species, whereas bird and mammal species are distributed throughout the whole AOI. 4. Migrant birds are potentially present although sporadic and in small numbers. Therefore, HCV 1 is Present for protected areas, riparian buffer, remaining forest and Potential for migrant birds (Figure 3) 5.3.2 HCV 2 Landscape-level ecosystems and mosaics The cooperative is not part of or connected to Intact Forest Landscapes or sufficiently large ecosystems (for example, >50,000 ha or in Indonesian context >20,000 ha) that are relatively far from human settlement, roads, or other access, smaller areas that can function as protected area buffer zones or corridors linking high quality habitats, or large areas which are more natural and intact than most other such areas. In addition, the AOI has been degraded and fragmented due to human activities and there is no high-quality connectivity or corridor, which means no HCV 2 is present. HCV 2 is identified as Absent within the AOI. 5.3.3 HCV 3 Rare, threatened, or endangered ecosystems, habitats, or refugia According to HCV Toolkit (2008), RePPProT, the AOI falls into the Rangankau (RGK), Pakalunai (PLN), dan Honja (HJA) land classes (Figure 5). Rangankau (RGK) This land system occupies rolling landform, consisting of 70% slopes and 30% valleys. The elevation varies between 5-50 masl. The slope is 2-8%, fairly flat, length of slope <50 m, and slope shape is convex. Pakalunai (PLN) This land system occupies fairly steep hills and is made 100% of slopes. The elevation varies between 50-880 masl. The slope is 16-25%, fairly steep, length of slope 500-1000 m, and mixed slope shapes. Honja (HJA) This land system occupies hilly lands, with 90% slopes and 10% peaks. The elevation varies between 20-300 masl. Slope is 16-25%, slop length 50-100 m, and slope shape is convex. These three land systems are rare or threatened within the physiographic area of the Cooperative estate and are suitable for oil palm development. Throughout the entire region, all lowland dipterocarp forests on these land classes have almost been entirely converted to oil palm, mixed forestry, or burnt, and therefore has been classified as endangered under HCV 3. Remaining forests within the AOI have been identified as HCV 3. PUBLIC SUMMARY January 2018 17

5.3.4 HCV 4 Ecosystem Services Eight subvillages within or around the AOI depend on the rivers on many levels, such as for drinking, bathing, washing, sanitation, or fishing, and even as transportation means (Figure 6). Although many riparian zones have been degraded or converted, riparian zones and their attributes are considered as HCV 4 with the hope that they will be rehabilitated and returned to their original functions. The AOI is mostly relatively flat, except for the sacred forest areas in the eastern part. This particular erosion-prone area is small, as are all other erosion-prone areas scattered throughout the AOI (Figure 7). Other elements which can directly influence erosion are construction of roads and other infrastructure such as drainage and bridges. Lack of good planning and proper road maintenance would lead to sediment runoff into the river. No areas that function as natural barriers to the spread of forest or ground fire although 1 hotspot was spotted during 2000 2017 period. Within the cooperative boundaries, there are river and riparian buffer zone s which provide water and control floods, as well as areas which important in preventing erosion and sedimentation. Therefore, HCV 4 is Present. 5.3.5 HCV 5 Community Needs The survey shows that most communities in the subvillages around the company fulfill their basic necessities by growing garden plants, raising animals, or by purchasing staples and clothing from traveling merchants, warung, or markets at the subdistrict capital. However, some communities fulfill part of their fish, fruit, and wood supplies from natural ecosystems such as rivers, protected forest, and the subvillage pedahasan (old, uninhabited settlements). There are five subvillages which depend on the rivers to fulfill 50-80% of their need for fish protein from the rivers: Batu Payung, Selingsing Kuning, Rangkung, Sungai Keranji, and Belambangan Subvillages. There are also six subvillages which depend on the river for 50-100% of their water needs: Tanjung Batu, Batu Payung, Selingsing Kuning, Bentawan, Belambangan, and Belatuk Subvillages. One subvillage, Blatuk Subvillage, fulfills 70% of their material wood needs from the forests. Rivers which are identified as HCV 5 for providing fish and are located with the TKP Cooperative estate are Pelingkai, Langsat, and Temelajau Rivers. Rivers identified as HCV 5 for supplying water and located within the estate are Temelajau and Carik Rivers. Wood for building material in Blatuk Subvillage is sourced from the Bukit Raya Forests, which is located outside of the estate. HCV 5 is Present. 5.3.6 HCV 6 Cultural Values HCV 6 include sites, resources, habitats, and landscapes with significance to traditional cultural identity and or community, such as ancestral burial sites, sacred sites, or sites where communities gather forest products used in rituals or traditional ceremonies. The communities in the subvillages within and surrounding the company are largely comprised of PUBLIC SUMMARY January 2018 18

the local tribe of Dayak Kendawangan, with a small number of other ethnicities such as Malay, Javanese, Chinese, NTT, and others. Most of the communities have converted into Christianity, a few are Muslims, and some still practice Confucianism or Kaharingan. They no longer use forested areas for religious rituals, customs, or cultural ceremonies. However, a small part of the communities still ritually visits forests and certain sites to give offerings and still protect ancestral sites. Of all the sites that are still used and protected by the local communities, only Tugu Adat, Belian 8, Nibung 8, Haur Kuning, Belian Betunas, Durian Keramat, Pulau Tembawang, and Hutan Keramat are found within the boundaries and wider landscape of the Cooperative and the company (Figure 8). HCV 6 is Present. Table 5. HCVs identified within the TKP Cooperative boundaries HCV Description Present Potentially Present Absent 1 2 3 4 5 6 Concentrations of biological diversity, including endemic species, and rare, threatened or endangered species that are significant at global, regional, or national levels. Intact Forest Landscape or large landscape-level ecosystem that are significant at global, regional, or national levels, and that contain viable populations of the great majority of the naturally occurring species in natural patterns of distribution and abundance Rare, threatened, or endangered ecosystems, habitats or refugia Basic ecosystem services in critical situations including protection of water catchments and control of erosion of vulnerable soils and slopes. Sites and resources fundamental for satisfying the necessities of local communities or indigenous peoples identified through engagement with these communities or indigenous peoples. Sites, resources, habitats, and landscapes of global or national cultural, archaeological or historical significance and/or of critical cultural, ecological, economic or religious/sacred importance for the traditional cultures of local communities or indigenous peoples, identified through engagement with these local communities or indigenous peoples. PUBLIC SUMMARY January 2018 19

5.4 Stakeholder Consultation During pre-assessment (23-25 November 2016), team identified which village and sub-village are involved in the development and potentially impacted by the development. Daemeter visited the local office and/or local representative to explain the HCV process and invite communities as part of consultation process during field assessment. FPIC principle-based stakeholder consultations were conducted along with the Focus Group Discussions for HCV 5 and 6 in the subvillages and in the company longhouse between 6-15 December 2016, as well as during the presentation of draft findings to local stakeholders in Marau Town hall, Ketapang District, on 23 March 2017. The stakeholders consulted during this assessment were public figures (community figures, local villagers), local government officials (head and secretary of the village etc.), traditional cultural chiefs (tumenggung adat), and PT TKP staff, among others. A number of villagers believed that the new cooperative estate will have positive impacts such as local economic growth, improvements in accessibility through road construction, and an increase in number of local jobs, but many were also concerned about potential water pollution and decrease in available lands, among other issues (Table 6). During the public consultation of interim findings on 23 March 2017, some villagers expressed their concern that company operations would pollute the rivers and their hope that the company is committed to maintain HCVs, especially HCVs 5 and 6. Local villagers also corrected the names and locations of several rivers and sacred sites. Their inputs were also considered during map and final report preparation. A summary of the public consultation is shown on Table 7. Table 6. Stakeholder consultation through Focus Group Discussion (6-15 December 2016) Name Position/Role Village/ Subvillage Markus Galap Village head Batu Payung Dua Perception on the effects of the planned estate development Positive increase in local economy and employment, but potential decline in water quality and quantity due to pollution from estates Alian Village Batu Payung Positive increase in local economy and Secretary Dua employment, local business opportunities, and accessibility, but also decrease in forested land and size of available land Tuang Traditional Tanjung Positive increase in local economy and chief Batu employment, local business opportunities, (Tumenggung) and accessibility, but also decrease in forested land, size of available land, and game animals (animals for hunting targets). PUBLIC SUMMARY January 2018 20

Name Position/Role Village/ Subvillage Perception on the effects of the planned estate development C. Sunandar Chief of village construction/ development Rangkung Positive increase in local economy and employment, local business opportunities, and accessibility, but also decrease in forested land, size of available land, and water quality and quantity Sartono Village Head Randai Positive increase in local economy and employment, local business opportunities, and accessibility, but also decrease in forested land, size of available land, and animal population. PUBLIC SUMMARY January 2018 21

Table 7. Important points from the stakeholder consultation for PT KGP and TKP Cooperative (23 March 2017) Name Position/Role Organization Main Topic & Recommendation Assessment team response Markus Galap Village Head Batu Payung II Village If a river is identified as HCV and upstream it is located under a different company, should it still be managed and how? The river must still be managed by PT CNG/PT KGP and if possible the company and the community coordinate the river management with upstream companies under joint management, to maintain or increase the river s function and conservation value. Efendi BPD Randai Village Recommended the company to build canals that are not too deep so that animals can still pass through If the company does not perform on its commitment to manage HCV or damages the environment, where should the communities complain? Communities can complain to the environmental division of the company. If they get no response, they can report to the Subdistrict chief, and if no response they can report to the BLH (Environmental Agency) Lukas Village Secretary Randai Village Stressed that the public consultation is for locations slated for scheme estate and not the nucleous estate Bujit Subvillage Head Batu Payung Subvillage Correction: Pimpin River is actually Pingpin River Daemeter to correct the name as suggested Anggra Subvillage Head Rangkung Subvillage Add Lansat River to Rangkung Subvillage Daemeter add Lansat River to be part of Rangkung Sub Village PUBLIC SUMMARY January 2018 22

Name Position/Role Organization Main Topic & Recommendation Assessment team response Alian Village Secretary Batu Payung II Village -Recommendation: change Hutan Ria Sebungsu into Riam Sebunsuk -Sengkabak is another name for Pendadaian River -If there are HCVs within the scheme estate, then the area of the estate will decrease and therefore the lands for community partnership will decrease, so where will the company find lands to have enough area for scheme estate target? Daemeter to correct the name as suggested Daemeter has only been commissioned to identify HCV areas within the company; questions regarding scheme estate distribution should perhaps be asked to the company at another time Supardi Member Traditional Dayak Council of Marau Subdistrict -Expressed hope that the company has high commitments for HCV management -Company needs to consider clean water potential from Gunung Raya forest to distribute to the local communities -Company must conduct early identification of problems within the communities -Expressed hope that the company can involve traditional figures in managing HCV 6 areas This suggestion to company on managing the HCV area should collaborate with community Andi Village Head Rangkung Village If the company does not implement HCV management, who will check? HCV management is evaluated during audit process by auditors; if the company does not manage HCVs, it will impact audit results Lakur Subvillage Head Bakung Subvillage Recommendation: Change Daeng Mukti cemetery into Daeng Utik cemetery Daemeter to correct the name as suggested PUBLIC SUMMARY January 2018 23

Figure 3. HCV 1 area within TKP Cooperative estate and wider landscape. PUBLIC SUMMARY January 2018 24

Figure 4. AoI and existence of IFL (Intact Forest Landscape) PUBLIC SUMMARY January 2018 25

Figure 5. HCV 3 within TKP Cooperative estate with land systems shown on the background. HCV 3 areas are all remaining forests locate d within the boundaries and wider landscape. PUBLIC SUMMARY January 2018 26

Figure 6. HCV 4 area related to streams/rivers and the ecosystem services of water provision and flood control within the Cooperative estate and wider landscape. PUBLIC SUMMARY January 2018 27

FINAL Figure 7. HCV 4 area related to areas important in controlling erosion and sedimentation within the Cooperative estate and wider landscape. PUBLIC SUMMARY January 2018 28

Figure 8. HCV 5 and 6 areas within and around the wider landsacape. PUBLIC SUMMARY January 2018 29

6 HCV MANAGEMENT AND MONITORING Based on the results of the HCV assessment, the TKP Cooperative is identified to have 453.6 ha of HCV Area. After the public consultation, it has been agreed that the final HCV Management Area is 349.6 ha, which is approximately 21% of the total area of the cooperative (Table 8). The HCVMA locations are shown on Figure 9. HCV management and monitoring recommendations were made based on threat analysis of each HCV. These threats are identified on Table 9 and the recommendations of appropriate management and monitoring activities based on threat analysis are explained on Table 10. The results of this assessment can also be used as a reference for possi ble threats in the entire location permit, as the exent of threats may not be limited to areas with HCV only, such as threats to riparian zones which exist beyond HCV-designated areas. Table 8. HCV area and Management Area within TKP Cooperative HCV Area (ha) HCV 1 a 161.1 HCV 3 161.1 HCV 4 339.9 HCV 5 128.4 HCV 6 c Total HCV Area (HCVA) (including overlap) Total HCV Area (HCVA) (without overlap) Total HCVA between outer boundary and wider landscape Can be measured through participatory mapping with communities 790.4 453.6 919.8 Total HCV Management Area (HCVMA) 349.6 Total HCVMA between outer boundary and wider landscape 728.0 PUBLIC SUMMARY January 2018 30

Table 9. Evaluation of threats against HCV within and surrounding the cooperative estate HCV Brief description of HCV present Main Threats Impact 1 Species diversity There is a protected forest close to the northeast border of the cooperative Riparian buffer zones and forest fragments can support species diversity Critically endangered species: Sunda pangolin or trenggiling (Manis javanica) Threatened or protected species: nine bird species protected under regulations or CITES; 31 mammalian species; kayu ulin (Eusideroxylon zwageri) Potential migrant birds 3 Rare or threatened ecosystem Natural forest within the cooperative has been cleared intensively or degraded and is under threatened state Forest is considered rare or threatened based on the RePPProT land classes they are in 4 Basic ecosystem services Current Current Conversion of forest into oil palm, especially riparian forests 6 High level of sedimentation caused by lack of riparian buffers 6 Timber extraction 3 Community wildlife exploitation (including hunting) 3 Potential Increased hunting pressure within the cooperative and the surrounding area 5 Decrease in river water quality due to nutrient leaching/fertilizer and pesticide run off to 5 the river, exacerbated by lack of riparian buffers Pollution by domestic and household waste (e.g., plastic) 3 More active timber extraction driven by loss of lands due to conversions 3 Current Conversion of forest into oil palm, especially riparian forests 6 Continued degradation and fragmentation in the remaining forests due to company operations and edge effects 6 There are rivers within the cooperative boundary which should have buffer zones Tanjung Batu and Blatuk Subvillage supply 100% of water from the river; Selingsing Kuning and Batu Payung depend on the river for 50% of fish needs and 80% of water needs. Rangkung and Sungai Keranji depend on the river for 80% of fish needs, Blambangan for 70% of fish needs and 50% Loss of riparian buffer zones 6 Water pollution due to agrochemical application 5 Loss or contamination of water sources on upstream subvillages 4 Deterioration of hydrological function, specifically river straightening, re-engineering of 5 hydrological flows, scarification of riparian buffer areas Operational activities, leading to silting of rivers, reduction of surface water discharge, 4 increased erosion rates, damage to infrastructure (Roads) due to use of equipment and heavy vehicles Decline in water quality and quantity as forests become degraded and ecosystem service 4 provision (flood and erosion control) decreases PUBLIC SUMMARY January 2018 31

HCV Brief description of HCV present Main Threats Impact of water needs. Bentawan depends on the river to supply 90% of water needs. There are many small but slightly steep areas scattered within the cooperative boundaries that are vulnerable to erosion 5 Basic community needs Depends on river for (%) of water needs: Tanjung Batu and Blatuk (100%), Bentawan (90%), Batu Payung and Selingsing Kuning (80%), Blambangan (50%). Depends on river for (%) of fish supply: Rangkung and Sungai Keranji (80%), Blambangan (70%), Selingsing Kuning and Batu Payung (50%). 6 Cultural values sites are culturally valuable sites located within Cooperative boundaries. Poor construction of roads, bridges, and drains, which may traverse drainage depressions and not designed to minimize sediment runoff, making flooding likely to occur within impacted areas Potential Lack of understanding among company staff regarding erosion potential and steps to be taken to mitigate erosion Soil erosion through operation activities and poor infrastructure 5 Current Companies operations (e.g., land clearing, and clearance of riparian strips and riverbank) 6 within AOI affecting rivers as the sources of fish and water Hunting carried out by community and company staff 1 Potential Timber extraction/clearance which may occur in riparian forests 3 Current Disturbance of/damage to HCV 6 sites by the company s operations 1 Potential Disturbance of HCV 6 sites through existing plantation operations 2 3 5 Table 10. HCV management and monitoring recmmendations in TKP cooperative estate HCV Threats Management Recommendations Monitoring Recommendations 1 High level of sedimentation caused by lack of riparian buffers Timber and wildlife exploitation (including hunting) by local communities Restoration and rehabilitation of riparian zones and where riparian buffers are present, they need to be maintained Riparian buffers, ladang, and enclaves with potential to be wildlife habitat or corridor should be conserved or even rehabilitated Monitoring HCV 1 species populations in the HCVMA, especially in the remaining forests, riparian buffer zones, and the zone between the estate border and protected forest Community surveys to monitor trends in hunting PUBLIC SUMMARY January 2018 32

HCV Threats Management Recommendations Monitoring Recommendations Conversion of forest into oil palm, especially riparian forests Continued degradation and fragmentation in the remaining forests due to company operations and edge effects 3 Conversion of forest into oil palm, especially riparian forests Continued degradation and fragmentation in the remaining forests due to company operations and edge effects 4 Loss of riparian buffer zones Water pollution due to agrochemical application Loss or contamination of water sources on upstream subvillages Deterioration of hydrological function, specifically river straightening, re-engineering of hydrological flows, scarification of riparian buffer areas Operational activities, leading to silting of rivers, reduction of surface water discharge, increased erosion rates, damage to infrastructure (Roads) due to use of equipment and heavy vehicles Internal and external HCV socialization on HCV species, HCV habitat and areas, and law enforcement on HCV species, including strong warning against hunting protected, rare, or threatened species Further identification, observation, or survey on (1) potential presence of herpetofauna, especially threatened herpetofauna, (2) migrant birds, especially in riparian buffers and migration seasons; (3) potential wildlife corridor for species with large home range (e.g., bears and wild cats) for determination of buffer zone for management and monitoring. Erection of HCV signboards at strategic access points Collaborate with local wildlife agency (BKSDA) to increase awareness of the importance of forests among staff, workers, and communities Protection of remaining forests from conversion, and if possible, restoration and rehabilitation of remaining forests to create good, well-maintained habitats Collaborate with local wildlife agency (BKSDA) to increase awareness of the importance of forests among staff, workers, and communities Areas important for the regulation of hydrological processes are managed to maintain normal hydrological functions, and where feasible, to restore them where they have been degraded or eliminated. This includes riparian buffer restoration based on recommended widths listed on GOI Regulation 38 Year 2011 (50 m buffer for small rivers and 100 m buffer for larger rivers on both sides of the river). Erection of signboards demarcating buffer zone boundaries at strategic locations. Maintenance of plantation in the HCV riparian zones using mechanical treatment, avoiding pesticide usage and replanting procedure in the future Ensure all roads, drains, bridges, and other earthworks are properly constructed and maintained, include reporting of damage and subsequent repair of earthworks PUBLIC SUMMARY January 2018 33 Periodic patrols along river banks to preserve river areas and evaluate effectiveness of management Create vegetation monitoring plots to monitor growth of rehabilitation vegetation and ensure rehabilitation has positive impacts Community surveys to monitor trends in timber extraction Regular monitoring on land use change and forest regrowth on riparian areas dan riparian forest regeneration River and stream water quality and quantity regular monitoring, ideally with before-after and control-impact method, and the results should be made readily available to communities or monitoring done in conjunction with communities Monitoring of erosion-prone areas to ensure they are not converted into oil palm Use of adaptive management to evaluate and adjust management and monitoring activities as necessary

HCV Threats Management Recommendations Monitoring Recommendations Decline in water quality and quantity as forests become degraded and ecosystem service provision (flood and erosion control) decreases Poor construction of roads, bridges, and drains, which may traverse drainage depressions and not designed to minimize sediment runoff, making flooding likely to occur within impacted areas 5 Companies operations (e.g., land clearing, and clearance of riparian strips and riverbank) within AOI affecting rivers as the sources of fish and water Hunting carried out by community and company staff 6 Disturbance of/damage to HCV 6 sites by the company s operations Avoid planting oil palm in areas vulnerable to erosion, at the very least in erosion-prone areas that are large enough to be demarcated from the rest of the plantation Use best practice management to prevent or minimalize erosion in areas where oil palm planting cannot be avoided Develop and implement SOPs based on best management practices in oil palm plantations, including road development and maintenance to prevent erosion and water quality maintenance. Operations follow the above recommendations for HCVs 1, 3, and 4 Internal and external socialization on rare, threatened, or protected species Erection of signboard for environmentally friendly fishing e.g., no poisoning or electrocution Current riparian buffer zone should follow the recommendationon GOI Regulation No. 38 Year 2011; in the future, the buffer zone can follow the recommendation of local communities based on participative mapping Where allowed by the community, demarcate HCV 6 areas in the field with marks, signboards, or fences, to ensure disruption to the site does not occur Develop SOPs for the protection and maintenance of HCV 6 areas, starting from building field staff awareness. SOP should also include inputs from local communities, including from participative mapping Company needs to document and create buffer zone around HCV 6 areas, such as by marking HCV 6 areas on the field, in all company maps, and in GIS database. Participative mapping with local communities can help determine the size of the buffer zone. The company must obtain written consent and ratification by the community involved if operational activities have potential effects on HCV 6 areas Regular survey on community perception on water quality and quantity Protection of watershed areas and riparian zones through clear demarcation between plantation and those areas Periodic patrols in watershed areas Have a regular program, at least twice a year, of inspection and reporting to ensure HCV 6 sites are not disturbed and as evidence that the company is protecting the sites Identify impact of the companies operations in identified areas PUBLIC SUMMARY January 2018 34

Figure 9. HCV Management Areas which include streams, riparian zones, and forests within the TKP Cooperative boundaries and wider landscape. PUBLIC SUMMARY January 2018 35