Certificate No. SPO537874Certificate No. ID08/1122 Certificate No. GB08/75238

OVERVIEW OFSMALLHOLDERS PT.HINDOLI

TOWARD RSPO CERTIFICATION

SUNGAI LILIN, SOUTH SUMATRA

INDONESIA

November 2009

New Development AreaMUKUT - Banyuasin

INTI & PLASMA Hindoli

Palembang

Sungai Lilin

PROV. SUMATERA SELATAN

PROV. JAMBI

PROV.LAMPUNG

PR

OV

. BA

-BE

L

PROV. BENGKULU

LOCATION OF HINDOLI

Sungai Lilin

Ds. Mukut

Ds. Penuguan

To Palembang

To Jambi

Jarak via sungai

GO s.d. Ds. Mukut : 46 km

GO s.d. Muara P7 : 52 km

GO s.d. Muara P8 : 56 km

GO s.d. Ds. Penuguan : 58 km

Ds. Mukut – Lokasi : 2.3 km

Muara P7 – Lokasi : 1.7 km

Muara P8 – Lokasi : 1.7 km

Simpang Bentayan

Jarak via darat

GO s.d. Sp. Bentayan : 47 km

Sp. Bentayan s.d. Trans Mukut : 99 km

Trans Mukut s.d. Lokasi : 3 km

TOTAL : 149 km

GO s.d. Jembatan PTP : 12 km

Jembatan PTP s.d. Lokasi : 39 km

TOTAL : 51 km

Lokasi – Jembatan : 39 km

Jembatan PTP – Jalan Lintas Timur : 16 km

Jalan Lintas Timur – MTD : 14 km

TOTAL : 69 km

Jembatan PTP

Trans Mukut

GO

General Lay out of HINDOLI INTI, Plasma and New Development Area Mukut

04/21/23 4

1. PT Hindoli is an oil palm plantation company under Cargill Tropical Oils Asia.

2. A joint venture company CTP Holdings Pte Ltd was formed in 2005 and now holds Cargill investments in oil palm plantations in Indonesia and Papua New Guinea.

3. PT Hindoli owns and manages 10,100 hectares of mature palm plantings (Inti).

4. And under a government regulated trans-migration scheme, we assist in the management of 17,000 hectares of palm plantings (Plasma; Smallholder) that belong to 8,500 farmers.

5. Mukut expansion project is underway consisting of 9,900 ha Inti and 2,400 ha Plasma.

6. The operation includes 100 and 60-mton/hr crushing facilities.

BUSSINESS PROFILE OF PT.HINDOLI

FFB (Fresh Fruit Bunch)

INTI

LAND ACQUISITION

PLASMA

LAND ALLOCATION

LAND PREPARATION

PLANTING

UPKEEP

PALMS MATURE

UPKEEP / HARVESTING

TRANSPORT FFB

PROCESSING

CPO MILL

LAND PREPARATION

PLANTING

UPKEEP

PRODUCTION

UPKEEP / HARVESTING

TRANSPORT FFB

ESTATES BOILER

Executed by Government

Executed by Inti Company (Hindoli)

Conversion at 48 months

Executed by Farmers

22.6% of FFB

5.0% of FFB

CUSTOMER BOILERCUSTOMER

KernelsCPO Shells EFB/DC Fiber

Immature 30 – 36 mths

Process Flow of Plasma vs INTI

STRUCTURE OF HINDOLI SMALLHOLDER SCHEME

- - - - TECHNICAL ASPECTS:

FARMERS

FARMERS

FKMK

FARMERS

FARMERS

FARMERS

GROUP

KUD FD Team

TOP MANAGEMENT PT. HINDOLI

OTHERS DEPT.

ADMIN

MILL Agronomy

Organization

Financial

Human Resource

Communication

70%

FARMERS

GROUP

GROUP

GROUP

GROUP

GROUP

TSD

ORGANIZATIONAL STRUCTURE OF COOPERATIVE (KUD)

ANNUAL MEMBERS MEETING

INSPECTOR COUNCIL

GENERAL CHAIRMAN

VICE CHAIRMAN IVHR & TRAINING

VICE CHAIRMAN IIIPROFIT & BUSINESS

VICE CHAIRMAN IIADMIN & FINANCE

VICE CHAIRMAN IAGRONOMY

GROUPS

FARMERS

Database of Hindoli Smallholders CooperativesKUD Name No of Group No of Members Ha Village Areas

1. KUD Karya Makmur 36 798 1,596 2 Desa

2. KUD Barokah Jaya 15 305 610 1 Desa

3. KPKS Tri Bakti Sentosa 35 708 1,416 2 Desa

4. KUD Sumber Jaya Lestari 18 423 846 1 Desa

5. KPKS Suka Rezeki 44 956 1912 2 Desa

6. KUD Tunas Mekar Inti 48 960 1920 3 Desa

7. KUD Mukti Jaya 88 1,924 3848 6 Desa

8. KUD Bersama Makmur 12 256 512 1 Desa

9. KUD Jaya Usaha Mandiri 16 400 800 1 Desa

10. KUD Mandiri Jaya Makmur 14 378 756 1 Desa

11. KUD Sumber Sari 16 379 758 1 Desa

12. KUD Sumber Tani Mandiri 20 430 8601 Desa

13. KUD Tani Mandiri Jaya 10 172 344

14. KUD Sumber Barokah 20 411 822 1 Desa

Total 392 8,500 17,000 23 Desa

91/92 92/93 93/94 94/95 95/96 96/97 97/98 98/99 99/00 TotalRayon A 2,198 1,346 532 284 - 690 158 66 16 5,290 Rayon B 2,054 980 370 126 6 180 284 174 - 4,174 Rayon C 1,834 1,352 228 - - 92 - - - 3,506 Rayon D - - - 610 1,034 882 1,504 - - 4,030

Total Ha 6,086 3,678 1,130 1,020 1,040 1,844 1,946 240 16 17,000

Plasma hectarages base on Planted Year

Plasma’s lands completed payback to Bank91/92 92/93 93/94 94/95 95/96 96/97 97/98 98/99 99/00 Total

Total Ha 6,086 3,678 1,130 1,020 1,040 1,844 1,898 116 16 16,828 % Lunas 100% 100% 100% 100% 100% 100% 97.5% 48.3% 100% 99.0%

FFB Production of Plasma Farmer’s

Tahun Fiskal 03/04 04/05 05/06 06/07 07/08 08/0909/10

(Jun-Okt)

PLASMA, Ton 363,335 304,820 355,781 271,755 468,716 357,594 212,265

PLASMA, Ton/Ha 21 18 21 16 28 21 12

051015202530

-

100,000

200,000

300,000

400,000

500,000

03/04 04/05 05/06 06/07 07/08 08/09 09/10 (Jun-Oct)

PLASMA, Ton PLASMA, Ton/Ha

Plasma Farmers PT.Hindoli AchievementPlasma Farmers PT.Hindoli is up to date the best scheme in the South Sumatra district, acknowledged by Agriculture Department Province having Inti-Plasma scheme.

The success of Plasma Farmers PT.Hindoli recognition base on:1.Receive awards from Local Government Muba District, Province and also National, eg:

– “INDEPENDENT” Status– Best Cooperative Award from President RI– The Best Managed Cooperative from Indonesia Minister of

Cooperative

2. Hindoli’s KUD receive a trust and guarantee from government to get bank’s loan.

3. Appointed as a counterpart training place for agriculture’s company in south Sumatra and outside south Sumatra.

4. Has been twice appointed by Director of Agriculture Jakarta as a training place for government officer who manage agriculture revitalization program for the whole Indonesia and be a best sample for successful of Inti-Plasma Scheme development program.

5. Musi Banyuasin District is awarded as The Best Supporter of Cooperative buildings where the key players are Hindoli Smallholder Cooperatives.

Before Now

Plasma - Hindoli in Pictures

Before Now

Before Now

Before Now

Before Now

Before Now

Before Now

Before Now

Before Now

Before Now

Sungai Lilin Now

Plasma Farmers Hindoli Toward RSPO Certification

• Introduce and socialize RSPO Principle and Criteria (P&C) to All Farmer Development Team, & All Farmers on Dec 2008.

• Gap Analysis – Internal Audit performed in all Plasma Cooperatives (KUD) by using RSPO NIWG on Jan 2009.

• Develop corrective action plan, PIC and Deadline, at all KUD as feedback of Gap Analysis Audit.

• Monitor & update the progress Corrective Action Plan Gap Analysis Audit regularly.

• Jul 2009, Conducted RSPO Trial Audit by BSI• Develop Corrective Action Plan to address all findings

during RSPO Trial Audit• Smallholder RSPO Certification Assessmentt by

November 2009 as soon as RSPO Smallholder NI approved

1. Commitment to Transparency

Data documentation and filing system in KUD Office

Interview with Land owner for evidence of land-use rights should not overlap with protected areas,

Plasmas’ kavling numbering system

2. Compliance with applicable laws and regulations

KUD Organizational Structure Smallholders’ organization involved in the calculation of debts and repayments, relevant agreement with bank, loan mechanism, etc.

3. Commitment to long-term economic and financial viability.

Spraying only apply in harvesting path and circle

FFB Collection

4. Use of appropriate best practices by growers and millers.

FD Team check the Farmers FFB quality at Mill loading ramp,

Sample taken in farmers’ plantation for leaf sampling analysis.

Training of Safe harvesting technique

FFB Quality Training.

Inspection conducted in KUD chemical storages during RSPO trial audit

Found some chemical spillages on floor of KUD storage during RSPO trial audit

Still found blanket spraying in farmers’ land

Some of farmers do manual weeding without spraying

During RSPO trial audit, Found pesticide in farmer’s kitchen

Nap sack sprayer kept in the small store belong to individual farmer

Separation between organic and inorganic wastes has been applied in Plasma areas

Interview with land owner and KUD staff to know level of their understanding and knowledge about agriculture best practices.

Apply palm frond “T box stacking” for soil erosion prevention

Gupon and Barn Owl has been introduced in plasma farmers.

Beneficial plant in smallholder areas.

5. Environmental responsibility and conservation of natural resources and biodiversity.

Signboard “No hunting of Protected species has been posted in Smallholder areas

Verification done to the land owners related to environmental aspect impact and protected species familiarization

Socialization of protected species those possible to be found in Smallholder areas.

Poster - No Hunting on Protected Species

Coordination meeting between Inti - Plasma

6. Responsible consideration of employees and of individuals and communities affected bygrowers and mills.

KUD always get involved actively in Indonesia National Ceremony as subscription, Coordination meeting between Inti - Plasma

KUD representative always get involved on fix price meeting in Agriculture Dept. Office

PPE Poster in Cooperative Offices

Cow farm belong to farmers,

Kindergarten Building was built as KUD’s CSR

Governor and Bupati when officially dedicate a cow farm in Plasma B1 on 28 Oct 09

Do coordination with government doctor to monitor the level of health in Plasma Communities, Small market belong to KUD to

increase KUD’s members welfare.

7. Responsible development of new plantings

• Next – replanting development project in Plasma Farmer will be coordinated between Inti – Plasma.

• Replanting Fund has been collected by KUD to date = 50 Billion Rupiah.

• Plasma scheme understands the environmental and social aspect in their plantation as per described in PT.Hindoli AMDAL documents. Copies of AMDAL (Environmental Impact Assessment) Docs and RKL/RPL report has been kept in KUD.

• Plasma scheme consults with PT.Hindoli for any potential plantation’s environmental impact. (dust, soil erosion, water pollution, etc.)

8. Commitment to continuous improvement in key areas of activity.

Plasma farmers do monitoring and re-evaluate all their activities and keep on developing the strategy for continual improvement related to gain new information/techniques on the management of oil palm plantations.

SMALLHOLDER’S MAJOR CHALLENGES TOWARD RSPO CERTIFICATION

• PESTICIDE ISSUES:– Blanket spraying which now is major non compliance,

but should be minor, as need time to get the message across to farmers. Smallholders have other traditional work like planting rice, so they limit spraying to 2 x per year and not spray for specific species only.

– Ex pesticide containers, difficulties on disposing it as per government regulations; Empty pesticide containers are triple rinsed, stored in a hazardous waste store then removed by a hazardous licensed contractor which will issue a Hazardous Waste Manifests Documents.

TARGETS OF HINDOLI SMALLHOLDER

• Keep maintaining the scheme relation by building trust, good communication and coordination between Plasma – Inti.

• Keep train & educate the RSPO P&C across to KUD, Smallholders' Group then to the individual farmers.

• Get Smallholder’s RSPO Certification Assessment and full compliance to RSPO P&C by Nov 2009.

-Thank You-