Labor and Working Conditions:

Human Resource Policy and Management

PT Fugui provides all staff with a staff manual, known as the Company’s Regulations, outlining the company’s human resource policies, compensation and benefits provided sick leave and holiday allocation, insurance, etc. The manual also includes information on channels for internal communication and raising grievances. All staff sign their acceptance of the staff manual. Employees of all group companies receive documented conditions and terms of employment and benefits in compliance with national law and PS2. Internal communication and grievance channels include daily briefings between supervisors and workers, weekly meetings between managers, an internal e-mail and staff suggestion boxes.

Worker’s Organizations

A variety of mechanisms for engaging staff had been established and the company is very attentive to worker needs and makes significant efforts to ensure a pleasant working environment is maintained. The company complies with local labor laws and has a policy of non-discrimination in the workplace.

Non-discrimination and Equal Opportunity

The staff manual, known as the Company Regulations, outlines the company’s human resource policy, commitment to non-discrimination and equal opportunity.

Retrenchment

PT Fugui does not have plans for the retrenchment of a significant number of employees.

Protecting the Work Force

The company does not engage in child or forced labor. The company complies with local labor laws and related PS2 requirements to protect the workforce. All employees are over the age of 18.

Occupational Health and Safety

Recognizing the need for a clean and hygienic working environment to produce noodles, the company implements procedures to provide a safe, healthy and hygienic work environment and to prevent accidents, injury or disease. The establishment of integrated systems under ISO 22000 will formalize and improve health and safety as well as fire prevention and response measures and performance. Job applicants receive health checks before employment and staff are checked annually. Both internal and ambient noise levels comply with local and WB/IFC standards and the company has not experienced any fatal or serious accidents.

Pollution Prevention and Abatement:

Pollution Prevention, Resource Conservation and Energy Efficiency

Measures to prevent, minimize and mitigate environmental impacts are covered by the company’s existing procedures and the establishment of an integrated system under ISO 22000 will formalize and improve existing procedures. Electricity is sourced from the local grid, supported by small backup diesel gensets when needed. Point source and ambient air quality monitoring complies with local and WB/IFC requirements. The company will monitor its incinerator emissions and undertake corrective actions if needed to ensure compliance with local and IFC requirements. The water supply is derived from wells on the site, and is properly treated and tested to ensure compliance with Indonesian and WB/IFC standards. The company’s wastewater treatment facilities operate in compliance with local requirements and WB/IFC requirements.

Waste

Most solid waste, including steel, plastics and wood pallets are sold to recyclers. Other wastes, including solid and hazardous wastes, are collected separately for disposal by authorized contractors. Sanitary wastes are treated in septic systems.

Hazardous Materials

The company handles, stores and disposes of hazardous materials, such as cleaning agents, solvents and food-grade fumigants, in accordance with local laws and IFC requirements. Secondary containment is provided for all fuel tanks, water treatment acid and alkali tanks.

Emergency Preparedness and Response

PT Fugui has implemented systems and procedures to prevent and respond to emergencies, to conduct emergency response drills and to engage local fire and police authorities in the drills and when needed in the event of an emergency. EHS and fire safety training will be conducted internally every four months on matters ranging from fire safety equipment operation to safe machine operations and heavy lifting to food hygiene. For the transportation, storage and operational components of new flour mill operations, the company engaged an internationally renowned supplier to design and review the establishment of the system with their own technicians onsite. Safety measures that have been adopted to prevent and detect fire and explosion risks include: sensors to monitor motor speed and temperature of machinery; tailored alignment of the conveyor belt with automotive controls to maintain speed consistency (to detect conveyor belt slips that may create friction); dust sensors; automated ventilation control systems in the silos; periodic grain turnover and mixing to dissipate any build up of dust and heat. In addition to these installed safety measures, the Company has implemented additional safety procedures and training for its staff and included the operations as part of its overall emergency response procedures. Fire extinguishing equipment is located in prominent locations throughout the company’s facilities and is checked on a monthly basis.

- Green House Emissions

Greenhouse gases emitted annually by the project are expected to be in quantities well below the IFC threshold of 100,000 tons of CO2, as specified in PS3.

- Pesticide Use and Management

PT Fugui’s wheat and flour silos do not require the use of pesticides on a regular basis; food-grade fumigants are used if needed.

Community Health, Safety and Security:

- Community Health and Safety

PT Fugui implements EHS and fire and life safety measures to minimize the impacts of its operations which will be enhanced as the company adopts ISO 22000. Potential impacts are not anticipated to result in impacts beyond the project site.

- Emergency Preparedness and Response

The company implements emergency preparedness and response procedures, including fire response and measures. Arrangements are established with local fire authorities and annual inspections are undertaken by authorities responsible for EHS issues. More information is provided under PS3.

- Security Personnel Requirements

Professionally managed and trained security personnel are hired to guard the company’s facilities. Contracts include requirements to meet national laws and to provide appropriate training.

Corrective Action Plan:

Implement an integrated system for managing environmental, health and safety, food safety, quality, fire and life safety and social issues in 2007.

Hire a consultant in 2009 to assist the company to develop the system for certification to ISO 22000 or equivalent by 2010.