Improving Lives - April Group

1 Improving Lives Sustainability report 2015-201601 President s Letter to Stakeholders 2016 Highlights 0402 About the report 0503 Material Aspects and Boundary Engagement0604 About April Group0705 sustainable Forest Supply Greenhouse Gas Flux In Different Forest Peatland Management14 Case Study: Pulau Padang 15 Case Study: Restorasi Ekosistem Riau (RER) Fire management 17 Case Study: Fire Free Village Program (FFVP) of Grievances and Disputes1906 People , Safety and Development and Fostering Entrepreneurship 24 Integrated Farming System (IFS) 25 Supporting Small And Medium Enterprises25 Profile: Sulaiman, Coco Peat Entrepreneur26 Profile: Hari Fitri Ramdhani, Batik Maker 2607 Pulp and Paper Mill Operations waste 3808 GRI Content Index and sustainable Development Goals Table 3910 Glossary4311 Sustainability report Assurance Statement46 ContentsWe must constantly ask ourselves, are we really making a difference where it counts?

2 Praveen SinghaviAs President of April , one of the world s largest pulp and paper companies, ensuring we operate responsibly and deliver on our sustainability commitments sits squarely on my desk. Executing these responsibilities requires and gets the full endorsement of our shareholders, and is brought to life by a dedicated team of employees and partners, from the corporate office to the forest and local communities where we this report , we set out our core purpose: to improve people s Lives through sustainable management of natural resources. That includes caring for the people who depend on us and for the natural resources on which we depend to be a viable business. For April , this means being commercially successful and being sustainable go hand-in-hand.

3 In fact, we can t achieve one without the we grow our business, we must do so within the capacity of the landscape we manage. We must do so by ensuring the environment is protected at the same time as we positively contribute to the economic and social needs of communities and the country. It is not an easy balance to achieve. Ensuring actions on the ground match our words takes enormous effort, time and resources. The scale of our operations and the complexity of the landscape where we produce and protect mean there are always challenges involved at the same time as progress is yardstick for success and our drivers for acting go beyond just satisfying our many stakeholders. We must constantly ask ourselves, are we really making a difference where it counts?

4 Are we truly delivering on our protection and production approach to landscape management ? And are we a force for the improvement of people s Lives and livelihoods at a local community level?Delivering the right answers to these questions guides our approach. Finding and executing on those answers requires engagement with a broad range of stakeholders. We welcome feedback, suggestions and constructive criticism, but we also believe direct engagement through collaboration is the most productive way to learn and evolve. Boots on the ground, site visits and face-to-face interaction with local communities provide a far more realistic view of the landscape we operate in than a distant or desktop discussion.

5 Through this report , I would encourage our stakeholders to come and see first-hand the landscape we operate in and the progress we are making on the ground, in addition to reading the pages the period under review, we delivered important progress, including a commitment at COP 21 in Paris of US$100 million to be spent on landscape management , conservation and restoration over multiple June 2015 we launched our sustainable Forest management Policy (SFMP) The Policy governs how we manage our natural resources for optimal social, environmental and economic outcomes and is an updated version of our original 2014 SFMP. It includes the elimination of deforestation from our supply chain and only developing areas that are not forested, as identified through independent peer-reviewed HCV and High Carbon Stock (HCS) assessments.

6 President s letter to stakeholders 2 April - Sustainability report 2015- 2016 Our sustainability activities under our SFMP are overseen by the Stakeholder Advisory Committee (SAC). Its members include independent forestry and social experts. The Committee selects an independent verification auditor and monitors April Group s progress towards meeting its policy goals. As part of our commitment to maintaining transparency, summary reports of SAC meetings as well as any updates on recommendations made by SAC and status progress reports by April Group are made public, by posting them on the company s blog site April Dialog. During the period under review in this report , the SAC made 98 recommendations to April , of which 59 have been implemented, 30 are in progress, three are in development and six of which are subject to further guidance to be provided by the SAC to the company.

7 Key themes across these recommendations include landscape level management , supply chain compliance and monitoring, social programs and improvement of internal data analysis and management . As part of our SFMP , we are working towards an effective landscape approach and tightened commitments for forest protection, conservation and peatland management . We optimise the operations of production forests, renew and restore previously degraded forests and protect High Conservation (HCV) areas within our concessions. Responsible peatland management is another of our key commitments guided by the Independent Peat Expert Working Group (IPEWG), established in January 2016 , and comprising some of the world s leading scientists in this field.

8 Our flagship restoration initiative, Restorasi Ekosistem Riau (RER), is a public-private partnership initiated by April and implemented with key NGO and expert partners, namely local social NGO Bidara, Fauna and Flora International (FFI) and The Nature Conservancy (TNC). Together we are working to restore more than 150,000 hectares of ecologically important peat forest in Indonesia s Kampar Peninsula. Fire in Indonesia continues to be a major national and international concern. One of our most ambitious and successful community initiatives to target the root causes of fires is the Fire Free Village Programme (FFVP). Initiated in July 2015, the FFVP is founded on close engagement with local villagers and stakeholders.

9 The success of this programme in directly and dramatically reducing the incidence of fires in and near our concessions has been recognised by the Indonesian government. The FFVP was then expanded into the Fire-Free Alliance (FFA) in 2016 of which April is a founding member. The FFA is a multi-stakeholder Group composed of key industry players such as Wilmar, Musim Mas and Sime Darby, as well as other organizations with an interest in preventing forest and land fires to create a fire and haze free environment in Indonesia. Our community engagement and development efforts were also enhanced during the period under review with ongoing programmes for livelihood creation, local economic development and enhanced infrastructure, education and healthcare for local remain committed to the International Labour Organisations (ILO) labour principles, Universal Declaration of Human Rights, United Nations Global Compact (UNGC) principles and to the achievement of the sustainable Development Goals (SDGs).

10 Our Founder Sukanto Tanoto believes that good business is that which is good for the Community, Country, Climate, Customer and Company. These five C s continue to underpin our value creation am pleased to report that during the period under review we have made good progress on a number of important fronts. I also recognise that much work remains to be done. April will continue to challenge itself, and be challenged by others, by asking whether the company, its people and its practices are delivering on our five C s and making a positive SFMP governs how we manage our natural resources for optimal social, environmental and economic outcomes and is an updated version of our original 2014 SinghaviAPRIL President3 April - Sustainability report 2015- 2016 Highlights December 2016 April s conservation and restoration area is 419,159 hectares, meeting 83% of April s aim to conserve one hectare for every hectare planted.