Bambang Dwilaksono,

Corporate Head of Sustainability

First Resources Limited

8 Temasek Boulevard #36-02,
Sun Tec Tower Three,
Singapore 038988 11 April 2017

Dear Bpk. Bambang Dwilaksono,

Complaints Panel’s Decision Related to the HCV Assessments (2008 and 2010) Review
With reference to the Complaints Panel’s decision, as conveyed to First Resources on 20 April
2016, on reviewing the High Conservation Values (HCV) Assessments conducted for PT. Limpah
Sejahtera in year 2008 and 2010.

Subsequent to the above decision, the following HCV Assessments were reviewed by an external
and independent expert:
1. Identifikasi Hutan Dengan Nilai Konservasi Tinggi PT. Limpah Sejahtera – August 2008.
2. Penilaian HCV/NKT PT. Limpah Sejahtera di Kabupaten, Provinsi Kalimantan Barat –
September 2010.

The reviewers were prompted to undertake a chronosequence analysis of Land Use Change from
2005 to present. This was required in order for the reviewer to submit their specific
recommendations to address possible gaps in the HCV Assessments. It was on this basis that the
possibilities of significant HCV area loss in the concession materialized.

The following are the findings of the review:

1. Significant forest loss is registered from 2006 – 2016:

Year Forest Cover (Ha.) Percentage of Remaining Forest

2006 11249.28 56.5%
2008 9579.91 48.1%
2010 378.47 1.9%
2016 70.16 0.4%

The above, based on satellite images, is evidence that continuous vegetation clearance
and development had occurred since 2006 to 2016 in PT. Limpah Sejahtera. It is indicative
of a high probability that significant areas of HCV were cleared, including during the
complaints period.
2. The review of the HCV Assessment of 2008 is determined to be invalid as it was an internal
assessment, not comprehensive and does not have the full HCV assessment coverage;

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 3. The review of the HCV Assessment of 2010 identifies it as being passable based on the
technical competence and HCV requirements in 2010. Nonetheless, complemented by a
chronosequence analysis, is deemed as insufficient and is rejected on the following basis:
a. The 2010 Assessment did not provide the right scenario given the significant
potential HCV loss between 2008 and 2010;
b. It is determined that at the time that the assessment was undertaken the
company had cleared 98.1%, leaving small remnant areas that were earmarked as
HCV. This HCV has subsequently been disturbed and serves little purpose for
conservation.

The Complaints Panel, in adopting a precautionary approach1, determines the following:

1. Both the HCV Assessments of 2008 and 2010 are not adequate in establishing that
potential HCV Areas prior to land development have been set aside for management,
monitoring and conservation. This is deemed to be a breach of RSPO Principles of Criteria
(P & C) 7.3;
2. PT. Limpah Sejahtera is to submit a full Land Use Change Analysis (LUCA) since November
2005, to address the land clearing for the period of 2006 – 2016;
3. PT. Limpah Sejahtera is to subsequently undertake a full potential HCV loss compensation,
based on the 2005 vegetation classification, through the Remediation and Compensation
Procedure (RaCP);
4. PT. Limpah Sejahtera is to meet the following milestone and timeline, without any delay:

# Activities Allocated time Month

1 Endorsement of Land Use Change 3 months from CP’s
By mid-July 2017
Analysis by the Compensation Panel decision letter
2 Approval of compensation concept 6 months from CP’s
By mid-October 2017
note by the Compensation Panel decision letter
3 Approval of Remediation and 9 months from CP’s
By mid- January 2018
Compensation Plan by the decision letter
Compensation Panel

5. Any deviation from the above-mentioned milestones and timelines will be viewed
severely and may lead to suspension and eventual termination of membership;
6. Consistent with the earlier letter sent in October 2016, the Complaints Panel will allow
for the lifting of the suspension related to the certification of the other First Resources
units. This is conditional on the company stating its full agreement to implement the
above decisions in accordance to the timelines prescribed.

In line with RSPO Code of Conduct we call on PT. Limpah Sejahtera/First Resources to act in good
faith in implementing the above decision of the Complaints Panel. We look forward to our
continued engagement and collaborative efforts to seek a constructive resolution to this matter.

1As referenced in the RSPO Remediation and Compensation Procedure (RaCP) Related to Land Clearance Without
Prior High Conservation Value (HCV) Assessment, November 2015.

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Yours sincerely,

Oi Soo Chin
Impacts and Evaluation Director
On behalf of RSPO Complaints Panel

Copied to:
Chris Wiggs and Karmele Llano Sanche
Yayasan IAR Indonesia

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