While all Performance Standards are applicable to this investment, IFCs environmental and social due diligence indicates that the investment will have impacts which must be managed in a manner consistent with the following Performance Standards. If IFCs investment proceeds, IFC will periodically review the the project’s ongoing compliance with the Performance Standards

PS 1 – Assessment and Management of Environmental and Social Risks and Impacts
PS 2 - Labor and working conditions
PS 3 - Resource Efficiency and Pollution Prevention
PS 4 – Community Health, Safety and Security
PS 5 – Land Acquisition and Involuntary Resettlement
PS 6 – Biodiversity Conservation and Sustainable Management of Living Natural Resources
PS 7 – Indigenous Peoples
PS 8 – Cultural Heritage
If IFC’s investment proceeds, IFC will periodically review the the project’s ongoing compliance with the Performance Standards

This is a mix of corporate investment (with no specified use of proceeds) and debt to the Group with part of the proceeds earmarked for SFI. In corporate investments, IFC expects that BILT (as BIGPH subscribes to BILT’s policies) and its subsidiary assets will have in place environmental and social management systems to ensure that their operations can be undertaken in a manner consistent with IFC Performance Standards.

The investment has been categorized as A according to IFC’s environment and social review procedure as SFI’s operations and plantation expansion plans may result in significant adverse environmental and social risks and impacts that are diverse and irreversible, and which are associated with various applicable Performance Standards. More specifically, the most significant risks and impacts relate to: i) potential biodiversity impacts due to ongoing and/or expansion of plantation operations in natural habitat, and in areas that are classified as critical habitat as per PS6 Biodiversity Conservation and Sustainable Management of Living Natural Resource Management; (ii) livelihood impact due to conversion of forest to plantations resulting in economic displacement of communities of Indigenous People (IP) as per PS 5 &7; and (iii) potential impacts on cultural heritage of importance to indigenous peoples as per PS8.

IFC's appraisal considered the environmental and social management planning process and documentation for the project and gaps, if any, between these and IFCs requirements. Where necessary, corrective measures, intended to close these gaps within a reasonable period of time, are summarized in the paragraphs that follow and (if applicable) in an agreed Environmental and Social Action Plan (ESAP). Through the implementation of these measures, the project is expected to be designed and operated in accordance with Performance Standards objectives.

Each of BILT’s plants has its own environment and social management system certified to international standards. Specifically, Ballarpur, Sewa, Bhigwan, Yamunanagar, Kamalapuram and SFI operations have environment management system and occupational health and safety management system certified against ISO 14001:2004 and OHSAS 18001:2007 standards respectively (both together referred to as the ESMS). Ballarpur, Yamunanagar plants are also certified to ISO 50001: 2011 and Sewa plat to ISO 50001:2014 energy management system. Further, the bamboo harvesting operations linked to Ballarpur plant and the farm forestry operations linked to Sewa plant have systems certified to FSC-Chain of Custody and FSC-Control Wood standards. SFI’s natural forest management (NFM) operation has been certified to FSC-Control Wood standards. See PS6 section for additional certification information. Each of BILT’s subsidiaries has in place an Environment, Health, Safety and Quality Policy, which it will enhance to ensure that these are consistent with the principles of the IFC Performance Standards (“Performance Standards” or “PSs”). The ESMS at each of the plants includes procedures for: aspect, impact and risk identification; compliance with regulatory requirements; development and implementation of management programs; incident and accident handling, recording, reporting, investigation and analysis; emergency preparedness and response; responsibility allocation; training and awareness; communication and consultation; monitoring, recording, reporting and documentation; quarterly/bi-annual internal audits and bi-annual/annual external audits; corrective action; and management review. The effectiveness and status of ESMS implementation currently is significantly variable between the different plant sites.



The company will upgrade the respective ESMSs to: (a) appropriately incorporate and embed IFC Performance Standards 2012; (b) incorporate Good International Industry Practice (GIIP) as described in the applicable provisions of the World bank Group (WBG) General and sector specific (Pulp & Paper, and Forestry) Environment, Health and Safety (EHS) Guidelines; (c) identify, map and define an appropriate engagement strategy for each of the key stakeholders in a structured manner both at corporate and plant level; (d) put in place an overarching corporate level ESMS that integrates the corporate environment and social (E&S) policies with plant specific ESMS’s at each of BILT’s assets, and ensures corporate oversight, knowledge/good practice sharing across plants, provides for structured corporate E&S organization with appropriate financial and professional resources, and enhances consistency in application of ESMS across the different plants; and (f) provide for undertaking bi-annual third party audit to assess effectiveness and performance level of the corporate ESMS and obtain assurance on status of implementation of corrective actions identified in the bi-annual ESMS
audits.



Further, the corporate ESMS will include policies and procedures that will require an environmental and social impact assessment (ESIA) in accordance with the Performance Standards, prior to any greenfield development or brownfield expansion. Further, in the case of potential acquisitions, the corporate ESMS will require an environmental audit of all prospective acquisition targets, to assess compliance with the provisions of IFC Performance Standards. The ESIA or the audit, as appropriate, shall result in the development of an Environmental and Social Management Plan (ESMP) setting forth: (a) measures to mitigate adverse environmental and social impacts; (b) monitoring requirements for ensuring the mitigation measures are implemented effectively and in a timely manner; (c) organizational and financial resources for carrying out the measures; (d) an implementation schedule for these activities; and (e) an appropriate incentive structure (including provisions for reward and penalties) to ensure plans are implemented.



At each plant, while overall responsibility for ESMS implementation is with the plant head, BILT has provided dedicated Environment, Safety, Medical, Community Relations and Human Resource (HR) personnel to oversee the day to day implementation of each plant’s ESMS. Further, all biodiversity related aspects at each plant is managed by the raw material/forestry team. BILT’s corporate raw material head is responsible for overall management of forestry and biodiversity aspects related with each of the plants. In addition, BILT has a corporate staff dedicated to oversee sustainable forestry certification processes and compliance. Community relations and corporate social responsibility is overseen by the corporate head for community relations. Ballarpur plant’s environmental head is also the corporate resource with overall responsibility for ensuring environmental system compliance across BILT. The company will, as part of the corporate ESMS, include provisions for putting in place an appropriate corporate sustainability organization or council. This corporate sustainability organization or council will be responsible for: (a) oversight of implementation of the corporate ESMS, consistent application of the company’s E&S policies across each of its plants, and monitoring follow up on improvement actions; (b) oversight of E&S staff deployed at each plant site; (c) performing an advisory role for each plant management on interpretation of E&S standards, sharing good practices between plants, from the industry, from other industry and being the source of knowledge on state of practice on all E&S aspects; (d) development of corporate training and capacity building programs; (e) corporation wide management of internal and third party audits, corrective actions and management review processes; (f) oversight of compliance with legal and other corporate commitments; and (g) reporting E&S performance and exceptions to the company’s
senior management, board, investors, and other stakeholders.



Stakeholder engagement activities in the company is carried out by the corporate community relations and corporate social responsibility (CSR) team (for community development, grievance collection and handling) and by the forestry team (for farm forestry purposes). Engagement activities include community meetings, consultations with village/community representatives, district officials (from administration and line departments), NGOs, community based organizations and are carried out on an ongoing basis. The company’s community development plan typically focuses on areas of health, education, skill building, livelihood promotion and gender issues. The company will, as a part of the ESMS, assess its ongoing stakeholder engagement activities, refine it to the needs of each operating unit and develop a structured stakeholder engagement plan (SEP) like the one that has been developed as an outcome of the SIA for SFI. Further, the company will implement a program to share social and EHS performance information with communities’ resident in the vicinity of the plant.



SFI has in place standalone Management Systems certified to ISO 9001, ISO 14001:2004, OHSAS 18001:2007 standards for plant operations. Further, SFI’s natural forest management operation has been certified to FSC-Controlled Wood standards. In addition, SFI’s ITP operation has Verified Legal Compliance Certification by Rainforest Alliance. SFI forestry operations have undertaken Environment Impact Assessments completed in 2002 and in 2008 and for pulp mill expansion in 2008, prior to implementation of the pulp mill expansion. An initial High Conservation Value (HCV) Assessment of the concession was conducted by independent consultants on behalf of WWF Malaysia in 2011. As part of the ISO and OHSAS certified management system, in addition to the procedures described above, SFI: imparts EHS training to employees and contract workers; monitors EHS performance of the plant and reports performance internally and to regulators; monitors, investigates accidents/EHS/fire safety incidents and implements corrective action; internal and external audits, and management review. SFI has emergency response plans, undertakes mock drills but display of emergency response plan and training on it needs to be further strengthened. SFI will, as part of the ESMS upgrade, strengthen implementation to further enhance effectiveness of its ESMS.



While SFI manages its plant operations in accordance with ISO and OHSAS certified standards described above, it has plans in place to manage, monitor and report internally as well as to regulators on its forestry operations including: Environment Conservation Management Plan, Natural Forest Management (NFM) Plan, ITP Management Plan, and compartment level biodiversity management and monitoring process. These plans include measures for: fire protection; occupational health and safety; monitoring program co
vering EHS aspects, wildlife and social aspects; and SFI’s internal supervision, monitoring by forest department and external audits. For further improving biodiversity management in the NFM and ITP areas and to augment its existing assessments, SFI is in the process of completing a third party biodiversity assessment and has completed an initial remote sensing study to characterize natural habitat, modified habitat, identify critical habitat triggers and outline key elements of measures to avoid, minimize, mitigate, or offset impacts on biodiversity.



SFI has undertaken baseline studies covering about 4000 households across 86 villages including collecting information on livelihood, nature of dependencies on forests, nature of impacts from SFI operations, and proposed mitigation measures. Further, SFI has hired a third party to undertake a Social Impact Assessment (SIA) for areas that have been developed to plantations. The first phase of the SIA has been completed including identification of impacts from the company’s plantation activities and development of impact mitigation and livelihood restoration framework. The detailed social management plan is under preparation.



Further, prior to opening up any new areas for conversion to plantation, SFI will systematically undertake the following: a biodiversity assessment and a SIA; detail mitigation and livelihood restoration plans where applicable; and incorporate these plans into compartment management plans. For the initial two years, SFI will undertake a quarterly third party audit to review, monitor, and where required, implement corrective actions for effective implementation of: the various environmental, social and biodiversity management plans to be developed and/or implemented by SFI; the measures to be implemented based on the outcome of the compartment level biodiversity and SIA assessments that are to be undertaken prior to opening up of new areas, (as discussed and outlined in the ESAP; and mitigation, management and monitoring measures described here, and in subsequent section as also in the ESAP.

The different categories of workers that are engaged in the company''''s operations include a) permanent employees, b) workers (including up to 8000-10,000 seasonal workers engaged for bamboo harvesting and daily wage workers in Ballarpur, India) and c) contract employees (mostly managed through various contractors/sub- contractors). The total number of staff and direct workers including contract workers directly employed by BILT are 13,577 (including contract workers that are engaged in different activities across permanent and contract employees).

The company has a documented (in English and relevant excerpts in local languages) Human Resource Manual, which lays down policies and procedures for its employee (covering amongst other aspects employment condition and working hours; leave; recruitment, compensation; rewards and recognition, benefits and employee welfare, performance management, separation, protection and safeguards aspects relating to gratuity, pension, insurance, travel allowance). Apart from this, the company has an Employee Code of Conduct which outlines standards of personal and professional conduct for all employees and also covers non-discrimination. At each plant level, procedures are in place to support the implementation of corporate policies. These procedures among other aspects include procedures related to grievance handling/management, sexual harassment and training. While staffs are covered under the HR Policies and Code of Conduct, workers (not including seasonal and casual/daily workers) are governed by a “Worker''''s Agreement" agreed as part of the collective bargaining process. Each of BILT''''s plants in India has workers unions that lead the collective bargaining process. In addition to the unions, each of the company''''s plants has one or more of feedback procedure or open door policy as a grievance mechanism. The contract workers are managed through contractors/sub-contractors and the company either directly handles or closely monitors legal compliance (muster- roll, attendance, wage, overtime, wage slips, identity card and leaves). Casual/daily/seasonal workers directly employed by the company are employed/engaged on a daily wage/unit rate basis on mutually agreed terms and an appropriate payment frequency (monthly).

The Human Resource (HR) policies and procedures are communicated to the employee/workers at the time of appointment (through written and agreed employment contracts), during induction training and are also available on the company''''s intranet. Relevant provisions or references to HR policies and terms of employment are included in the appointment letters or employment contract. Minimum wages, working hours and other key information for differing worker categories are displayed at the factory gate and at other relevant locations within the factory premises. The company has procedures (like verification of age through identity cards) in place to prevent child labor in its operations and sets 18 years as the minimum employable age (also a statutory requirement).

BILT has a corporate HR team supported by HR implementation teams at each unit/plant covering functions like training, organization development, payroll management, recruitment, industrial relations, compliance and contractor management. While BILT has in place procedures to comply with labor law requirements, the company needs: to upgrade working and living conditions for 8000-10,000 migrant seasonal employees/workers that the company engages at its Ballarpur plant every year for bamboo harvesting; and also upgrade management of contractors to meet PS2 provisions. Thus the company will, to meet PS 2 requirements undertake the following (refer ESAP); a) develop and implement a formal contractor oversight procedure to ensure ongoing legal compliance, b) define and implement worker accommodation requirements that align with IFC''''s requirements; c) improve the grievance management system (to include a formal grievance committee, collection of anonymous complaints, time bound closure of concerns/complaints, feedback to aggrieved workers/employees, documentation, analysis and reporting to senior management) including procedures enabling contract workers access to the grievance mechanism; and d) managing risks and concerns associated with supply chain (especially with respect to child and forced labour and occupational health and safety (OHS). Further, if the bamboo harvesting lease for BILT''''s Ballarpur plant is renewed post September 2014, for migrant seasonal workers, who are employed by BILT in bamboo harvesting for 3-5 months, the company will: a) implement measures to improve the OHS conditions and prevent/protect against occupation risks/hazards (like snake bites/animal attack, injury), b) provide appropriate living conditions with appropriate accommodation space, use of appropriate construction material, including access to basic amenities and facilities like electricity, fan/light, sanitation, drinking water, cooking arrangements, medical facilities, separate facilities for women, pest and garbage management; c) ensure payment of equal and minimum wages to men and women employed in the harvesting activity and d) provide protection and safeguard benefits including insurance benefits to these workers.

The company manages occupational health and safety through its OHSAS 18001 certified management system that includes: OHS Policy; OHS objectives; roles and responsibility allocation; safety committee composition and procedures; safety induction, training, tool box talk procedures; accident investigation, reporting and corrective action procedures; work permit system and safe work procedures for various activities that exposes workers and employees to hazardous conditions; periodic internal and third party audit, and management review. BILT provides personal protective equipment (PPE) to all employees and requires contractors'''' to provide PPE to their workers. The OHS system includes periodic medical examination program for workers. While use of basic PPE at BILT''''s plants is adequate, the company will continue to focus on further improving use of activity specific PPEs, particularly under dangerous working conditions. The company has an active safety training program in place. BILT ensures that doctors or para-medical staff are available or that there is access to emergency medical facilities and ambulance is available at plants together with facilities for administering first aid. The company will further upgrade its safety management through ensuring consistency in application of the OHS system across different plant sites. In particular, the company will undertake a comprehensive third party safety audit of its Sewa plant (refer ESAP action item) and implement corrective actions based on the audit findings. The company will, strengthen accident and incident prevention though use of lead and lag indicators; and use of safety risk mitigation hierarchy in risk evaluation and accident prevention.

SFI employs 2,542 direct workers as of April 2014 including 996 in the pulp & paper mill; 937 in plantation operations; 279 in the integrated timber complex (ITC) and 330 in the support services unit. 739 workers are foreign migrant workers from Indonesia (345) and Nepal (394). 1803 of the total workforce (2542) have permanent employment contract with SFI and the remaining are mostly foreign workers engaged on a 2-3 year contract basis. 337 workers across all grades are women. Of these, 79 are foreign workers from Indonesia engaged in ITC operations. SFI has implemented screening procedures to prevent child labor in its direct operations and the same need to be replicated for contract workmen.

1218 contract workers, spread across 27 small to medium contractors/contracting companies are engaged in the operations across pulp and paper, plantation, logistics, waste disposal, material loading, harvesting, plantation, jetty operations, wood yard and about half of these workers are also foreign workers from Indonesia.

SFI''''s Human Resource policies and procedures are defined in a manual which covers general terms and conditions of service (amongst other aspects it covers employment terms, allowances and claims, benefits, working hours; leave, employee conduct and disciplinary regulations). In addition, there are also defined policies and procedures (like those for grievance management, security and an induction kit for foreign workers). The grievance mechanism, needs to be upgraded to include a) removing restrictions on the scope of grievances that can be raised, b) including provisions to file grievances anonymously or confidentially or to a grievance committee; c) provisions for confidentiality protection and non-retribution and d) documentation of grievance redress process, analysis of grievances received and redressed and reporting to senior management on grievances received. SFI will ensure that the grievance redress process is available to all categories of workers, including foreign workers.

The HR operations at SFI is headed by a general manager and supported by personnel in- charge of recruitment/staffing, compensation/benefits, Industrial and employee relations and talent development. While SFI has documented policies/provisions to ensure compliance to statutory requirements, for full compliance it is committed to: pay the pending arrears for revised minimum wages from January 2013 (for workers who have to be paid retrospectively to comply with the revised minimum wage directive of the government); and check overtime eligibility and payment status at to ensure this meets statutory requirements. In hiring foreign workers, though SFI uses government approved local agents (particularly in Indonesia), its personnel travel to Nepal and Indonesia to oversee the recruitment process (meet workers and communicate to them the employment terms, nature of work, living and working conditions). SFI needs to further strengthen procedures to prevent agents/sub-agents charging additional amounts to facilitate employment in SFI. It will also upgrade its foreign worker related practices to meet PS2 provisions particularly those relating to: equitable employment terms and working conditions for foreign workers as compared to local workers; ensuring a consent process is followed before holding passports (including for foreign workers employed by contractors); and avoiding practices that restrict free movements. Further, SFI will put in place appropriate procedures to ensure that labor including foreign labor engaged through contractors are; a) paid the minimum wage, b) not exposed to restrictive practices like holding passports and there are no restrictions on free movement;, c) have access to an effective grievance mechanism; (d) ensure OHS policies of SFI are applicable to contractors as well; and (e) contractors are periodically audited for compliance with relevant provisions of PS2 including those related to OHS.

There is an ongoing litigation since 1998 in relation to formation of a union at SFI, which remains a key concern of the workers. While in the interim a joint consultative committee has been set up, SFI has committed to not opposing formation of a union and will undertake steps to facilitate union formation.

SFI commissioned an independent audit of its labor working conditions and has developed an action plan including measures to: a) update/strengthen the HR policies and procedures so they align with PS 2 requirements, b) ensure proper communication and disclosure of HR policies (in a language and format understandable to all workers), c) ensure payment of minimum wages (including retrospective payments), d) manage and ensure compliance to overtime norms, e) ensure equitable employment terms for local as well as migrant workers (in accordance with local law), f) adopt zero tolerance on restrictive practices akin to forced and bonded labour, g) develop and implement a contractor management system including robust oversight systems and processes for management of contract workers; (h) strengthen the grievance mechanism; and h) conduct periodic internal as well as external audit to assess compliance with statutory and PS 2 requirements and progress on the implementation of the action plan.

SFI''''s has implemented two Occupational Health & Safety (OHS) management system namely OSHAS 18001:2007 and MS 1722: 2011. The OHS team currently comprises of ten personnel and OHS processes include tool box talks, work permit system, safety induction, training, incident and accident monitoring, investigation, corrective action and reporting. There have been four fatalities since 2011 (2 in pulp and paper and 2 in plantation) and for FY2013 the Lost Time Injury Frequency Rates (LTIFR i.e. LTCs per million person hours worked) are: i) 3.3 in plantations; ii) 5.9 in pulp and paper mill; and iii) 7.0 in ITC. These need to be reduced in case of pulp and paper (2.0) and ITC (5.5 for sawmills) to meet corresponding OSHA benchmarks. SFI has also procedures in place to prevent, detect and control fires both in plant and in the forestry operations. Data indicates that there has been on average one recordable fire incident either in the plant or in the concession every year (since 2011).

The company manages environmental impacts of its operations as per the ISO 14001 certified ESMS. Further, in case of future greenfield or brownfield expansion, project specific resource conservation, pollution prevention, and mitigation measures that meet the Performance Standards and the WBG EHS Guidelines will be identified during the project specific environmental assessment, and incorporated into the Environment and Social Management Plan (ESMP).



All of BILT’s integrated pulp and paper mills have chemical recovery, lime re-burning kilns, non-condensable gases (NCG)/total reduced sulfur compounds (TRS) burning system, fiber recovery, and emission control technologies. However, Ballarpur plant has been upgraded to Single Continuous Cooling Digester, Diffusion Washers, Wash Presses, ODL (Oxygen Delignification), Elemental Chlorine Free (ECF) Bleaching Process and has installed Cooling Tower, moving bed bioreactor (MBBR) and dissolved air flotation (DAF) based tertiary treatment for effluent.



Water consumption per ton of paper at Ballarpur, Sewa and Yamunanagar, while within GIIP norms, is relatively on the higher end. Water is typically sourced for the integrated pulp and paper mills from nearby rivers. Similarly, heat energy, and electrical power consumption per ton of paper at each of these three plants is higher than GIIP. Further, volume of effluent discharged/released per ton of air dry pulp from these three plants also exceeds GIIP norms. However, the effluent discharge is within national requirement and Corporate Responsibility for Environmental Protection (CREP) guidelines. Measures implemented to reduce the heat energy and electrical energy consumption (at Ballarpur and Bhigwan units) include energy audits of the system, up-gradation of steam and condensate systems, energy efficient pumps, vacuum pumps, compressors, ECT (energy conservation turbines), use of enzyme in pulp refining to reduce the refining energy have been implemented, and good operational practices are being followed. Further, the Company will, within a timeframe agreed with IFC, undertake a benchmarking of all of its manufacturing plants against GIIP, identify opportunities for improving resource efficiency, and implement measures in a time bound action plan to enhance resource efficiency specifically to reduce water and energy consumption through process and operational control, improved maintenance, and equipment upgrades to the extent technically feasible and cost effective, to be consistent with GIIP norms.



The company has in all 182 MW total installed capacity of captive coal fired power plants to meet the steam and power needs of each of its six plants in India. The company captures CO2 from the boilers to manufacture 80,000 mtpa of precipitated calcium carbonate (PCC) in its India operations. It is estimated that the total CO2 capture per annum for PCC manufacture is 35,200 mtpa. The total CO2 emission associated with BILT’s operations (covering all s
ix plants and SFI) would be about 5.5 million tons of CO2e per annum. While emission of particulate matter, sulfur di-oxide (SO2) and oxides of nitrogen (NOx) is within national standards, the emission loads of these three pollutants, per ton of air dry pulp produced, needs to be reduced to bring them within good international industry practice norms. The company will, at the time of next capacity expansion or capital investment program at any of its plants, upgrade the applicable plant to meet GIIP norms through appropriate measures including if required, upgrading pollution control equipment (ESP/bag filter), enhanced control of process parameters in recovery boiler/power boiler/lime kiln, change in power boiler type (CFBC etc), enhanced concentration of black liquor, change in fuel mix and other measures. In the interim, within a timeframe agreed with IFC, BILT will identify opportunities, in the existing operations in each of its plants including SFI, to reduce emission load of particulate matter, SO2 and NOx to the extent technically feasible and cost effective, and develop an action plan to implement these opportunities.



The effluent treatment plants (ETP) installed in each of the different plants all have activated sludge process but with varying degrees of sophistication. Ballarpur has the most sophisticated ETP with jet aerators, MBBR and DAF tertiary treatment, but the others have up to activated sludge secondary treatment. At all locations, treated effluent, in accordance with the consent/permit conditions, is used onsite and in neighboring areas for irrigation. The company will, within a timeframe agreed with IFC, get the ETP of Sewa plant reviewed by a wastewater expert, and implement measures recommended by the expert to enhance consistency performance of the ETP.



AOX load discharged with treated effluent meets GIIP norms at Ballarpur and Yamunanagar but at 0.3 kg/ton of air dry pulp at Sewa is above GIIP norm of 0.25 kg/ton of air dry pulp. In Sewa, use of calcium hypo has been stopped and use of Chlorine dioxide has been increased in the bleaching sequence, which is expected to reduce the AOX in the effluent. In light to these changes, the company will monitor AOX load in treated effluent and if it remains above GIIP norms, within a timeframe agreed with IFC, identify additional technically feasible and cost effective measures to reduce AOX levels further. COD load discharge is within GIIP at all three plants but total suspended solids) and BOD load exceed the GIIP BOD at all three integrated pulp and paper plants. BOD load may be expected to reduce with enhanced efficiency of the existing plants. Monitoring of Total Nitrogen (N) and Total Phosphate (P) is not undertaken at all the integrated mills but Total N load discharged is within GIIP norms at Ballarpur and exceeds at Yamunanagar, while Total P load discharge is within GIIP norms at Yamunanagar but exceeds at Ballarpur. The company will optimize the N and P dosages at
all plants considering the overall operations and final concentration monitoring. Similarly as in case of air emissions, the company will, within a timeframe agreed with IFC, identify opportunities in the existing operations, in each of its plants (including SFI), to reduce emission load of those effluent parameters that exceed GIIP norms to the extent technically feasible and cost effective, and develop an action plan to implement these opportunities.



The company has implemented procedures to dispose hazardous waste to authorized entities. Where feasible, the company disposes fly ash to cement industries and where it is not possible, fly ash is disposed in landfill in low lying areas. ETP sludge is used by fiberboard manufacturers and dust from chipper area is fed into boilers. Overall handling of waste, storage within containment and with due segregation, and housekeeping in the plant needs to be further improved. The company will, within a timeframe agreed with IFC, review its procedures, facilities and practices relating to segregation, handling, storage, and disposal of hazardous wastes at all of its plants, and develop an action plan to fully implement procedures that meet GIIP.



Water, heat and electricity consumption at SFI is 80.6 m3/t of paper, 17 GJ/t of paper, 1114 kWH/t of paper respectively, all of which are in the higher ranges or above GIIP norms. The water is sourced from nearby Sg Mengalong river at four kms from the plant. SFI will undertake an assessment to identify opportunities for reducing water, heat and energy consumption, and implement measures to harness those opportunities under a time bound action plan. SFI has a biomass fired boiler and power plant. The particulate load and SO2 load emitted to air at 1.4 and 0.9 kg/ADt are both above GIIP norms. SFI needs to commence monitoring NOx and total reduced sulfur load emitted to air as well. SFI is an elemental chlorine free (ECF) plant. SFI’s treated effluent is discharged 0.5 km out to sea and at 77m3/ADt, exceeds GIIP norms. The TSS, COD and BOD loads discharged with treated effluent are all within the GIIP norms but the plant does not monitor Total N and Total P in its treated effluent. The AOX load discharged with effluent at 0.28 kg/ADt is above GIIP norms. However, it is expected that as the pulp mill stabilizes and its capacity utilization increases from the current ~75%, the AOX load discharged may reduce to within GIIP norms. SFI will commence monitoring these parameters as well, and implement appropriate measures, should any of these parameters exceed GIIP norms. Further, in light of the proposed fertilizer plant under construction in the vicinity of SFI, the plant will , within a timeframe agreed with IFC, implement a comprehensive ambient condition monitoring program covering marine water quality, ambient air quality and ground water quality to establish a robust current baseline. While SFI has installed a cooling tower to cool the hot effluents, the trea
ted effluent discharged is still at 40 degree Celsius, which is typically above the ambient sea water temperature by 7 to 8 degree Celsius. SFI will, within a timeframe agreed with IFC and as part of the marine water quality monitoring program: (a) model/map the thermal dispersion plume to identify the areas where marine temperature elevation is 3 degree Celsius or more; (b) identify sensitive habitat (coral, spawning, breeding or feeding areas or other such areas), if any, that falls within the area where marine water temperature elevation is more than three degree Celsius; and (c) as required, develop appropriate measures to mitigate or offset or compensate for impact on any identified sensitive habitat. SFI has an open oxidation pond for sewage treatment. Wood waste, bark and wood dust generated at SFI are used in the boiler. Boiler ash is disposed in a landfill. The oily waste and oil contaminated material, and other scheduled wastes are disposed through authorized contractors. Segregation, labeling and containment of hazardous materials and wastes needs to be improved. SFI will implement measures, within a timeframe agreed with IFC, to implement GIIP related to waste management. ETP sludge is being disposed in a landfill but SFI is considering using it in the boilers as fuel. SFI has carried out sludge characterization and toxicity characteristic leaching procedure (TCLP) extract for heavy metals, (results indicate that the landfilled sludge is likely not hazardous). However, even though SFI is ECF, it needs to expand the sludge characterization to also cover presence of organic halogens. SFI receives every month one vessel for pulp, ~7 container vessels for transport of paper and one tanker that brings furnace oil, which pumped from the tanker and stored on onshore tanks. Neither vessel waste nor oily waste is discharged while the vessel is berthed at the SFI jetty.



SFI implements procedures while working within the ITP and NFM areas to minimize environmental impacts including: storage of oil and fuel within containment at more than a specified distance from the water source; erosion control; prescribed buffers as per the EIA on either side of riverine reserves, that are marked and left untouched; oily waste disposed through authorized contractors; dismantling and removal of abandoned structures; garbage pits for disposal of worker camp garbage; provision of toilets with (septic tank) in worker camps and site office within the concession; river water quality testing for presence of potential contaminants; all scheduled waste and other hazardous wastes, are to be segregated, labeled, stored in appropriate containers, disposed through authorized entities and records maintained; and other measures.



The company uses pesticides in its forestry operations some which are WHO Hazard class Ib (e.g. Carbofuran) and II (e.g. Acephate). The company will undertake a review of all the pesticides it uses against WHO hazard classification and prepa
re a plan to phase-out class Ia and Ib pesticides that it uses within a timeframe agreed with IFC. Further, SFI will ensure that any WHO class II pesticide used is accessible only to personnel with proper training and equipment, and that there are appropriate procedures and facilities in place to handle, store, apply, and dispose of these pesticides. In addition the company will ensure there is an appropriate means of disposal / reuse for all containers associated with pesticides.

The company’s “Security Manual” while outlining a preventive program to prevent loss or damage to life and property and reducing risk of different types of criminal/wrongful activities also outlines the policies/code of conduct with regard to these issues for all employees, contractors and vendors/suppliers. The company operations involve hiring of security guards through registered contractors to guard the company assets and premises (mostly fenced with access controls). A very small proportion of these are armed guards have licensed firearms and are trained in procedures, codes and controls regarding use of these. Roles and responsibilities of security personnel including aspects related to their behavior/code of conduct, security incident reporting, procedures for lodging police complaints, dealing with accused have been identified and detailed in the security manual. Provisions for regular internal security audit to review and feedback to the management on security related aspects have also been defined.



Standard operating procedures for dealing with security and related issues covering a) access and movement control for personnel, b) transport and movement of material, c) entry and exit procedures/formalities, and d) unsafe acts/conditions (identification and reporting) have been outlined in the manual. Protocols and procedures for transport and handling of hazardous material including chemicals, furnace oil and scraps including roles and responsibilities of personnel have been elaborated and discussed in the document. The security manual also provides the procedures for handling of visitors/guests including safety requirements, access control and authorizations needed for entry and movement within the working areas of the company. Contractor obligations and requirements concerned with security aspects have also been detailed in this manual.



Traffic management including rules (covering all facilities and sites) for parking, movement and access control has been laid down in the safety manual. These cover restriction on speed, norms for deployment of marshals/traffic scouts, documentation requirements (valid licenses, road tax certificate, gate/entry pass), dedicated truck parking areas, driver rest areas, and dealing with emergency situations (accidents, injuries) among other aspects. The company operations involve hiring of transporters (contractors) for movement of raw materials and finished goods. The management of traffic and vehicular movement arising from plant operations is (at choke points and where communities are involved along the roads) is done through scouts/traffic marshals who are trained and engaged by the company. However, the company will strengthen its traffic management plan/measures to address community concerns (like in SFI) associated with movement of heavy vehicles.



Requirements for structural safety including those related to infrastructure and equipment safety have been identified/outlined and procedures
for testing and ensuring safety and stability/integrity laid out. Each of the manufacturing unit of the company is required to undertake pressure vessel testing and structural stability/integrity assessment for all major equipment and machinery (like boilers, all air storage tanks, compressed tanks etc) on a periodic basis. Similarly all the manufacturing units are required to develop and implement an onsite and offsite emergency plan (in conjunction with other stakeholders like government/district administration and concerned line departments). These cover emergency situations like fire, accidents, strike/industrial unrest, social unrest and crowd control, bomb threat and security breach among other scenarios. Mock drills are carried out at regular intervals to test preparedness and vigilance with respect to such scenarios.



Going forward, as part of the ESMS upgrade, the company will a) complete a formal security risk assessment and implement procedures aligned with PS4 provisions on security personnel; b) strengthen its onsite and offsite emergency management plan to cover aspects like natural hazards, chemical leak, arson and other security risks, c) engage with communities including providing training and building awareness with off-site emergencies/risks, d) strengthen its compliant/grievance management system by ensuring feedback from communities and stakeholders (like truck drivers, workers etc) and e) ensure adequate training to staff and security personnel on company’s policies and applicable PS 4 requirements.

The SFI concession covers a large area of lowland and highland forest that has been subjected to varying cycles and intensities of logging since the 1960s to present. This concession is divided into two designated management zones: Industrial Tree Plantation (ITP) and Natural Forest Management (NFM) areas. Plantations are restricted to the ITP area. Existing plantations cover 50709 ha of ITP area. While the license allows SFI to plant up to 130,000 hectares in the ITP area, current plantation plans require additional conversion of ~30 000 ha of ITP. Existing nature conservation set-asides, designated by the company based on High Conservation Value (HCV) assessments, cover 21% (35755 ha) of the ITP area.



SFI has rights to log within approximately 17 percent of the NFM area before 2020, using Responsible Low Impact (RLI) techniques. This right will be exercised subject to their ability to expand plantation area within the ITP area. The next cycle of logging rights will open in 2038.



A recent conservative assessment of satellite imagery and historical records suggests that, despite past degradation, around 35% (59 681 ha) of the ITP area, excluding conservation set-asides, and 98% (102 066 ha) of the NFM area meet criteria for Natural Habitat as per IFC PS. This assessment also found Modified Habitats to cover 26 691 ha of ITP and 1 813 ha of NFM area. To meet PS6 provisions, SFI will focus further assessment of plantation expansion or logging within Modified Habitats, wherever possible. As a result, conversion of Natural Habitats, and the area for which No Net Loss (NNL) will be required, will be kept to a minimum. Avoidance of Natural Habitats is not possible should logging rights be exercised within the NFM area and so NNL will be required. This initial assessment will be subject to ground-verification via targeted field-based biodiversity assessments prior to any clearing of new areas and in order to confirm initial results. Any expansion of plantation area or loggings beyond the current stated target (~30000 ha plantation and approximately 17 percent of the NFM area) will be subject to additional risk and impact assessment and management required for compliance with PS6.



Initial assessment indicates the concession area is very likely to be classified as Critical Habitat based on the occurrence of Critical Habitat triggers (including IUCN Endangered and endemic/restricted range species). Some of these triggers also have potential to occur within some compartments in the ITP and NFM areas. An assessment is currently underway to confirm and map the detailed extent of occurrence of any Critical Habitat triggers within ITP and NFM areas. SFI will develop a detailed schedule and assessment protocol for field-based biodiversity assessments prior to any clearing or logging of any new compartments within the ITP or NFM areas in order to address risk of Critical Habitat triggers and/or other biodiversity values occurring within Modified or Na
tural Habitats will be undertaken. This schedule and assessment protocol will be finalized before Board. SFI has an existing commitment to set aside any areas found to support Critical Habitat triggers. If the concession is classified as Critical Habitat, Net Gains (NG) will be required for Critical Habitat triggers and a Biodiversity Action Plan (BAP) will be developed.



To meet PS6 provisions, SFI will carry out additional scoping of measures (avoidance, minimization, restoration or offset) required to achieve NNL for Natural Habitats and NG for Critical Habitat triggers. These may include additional conservation set-asides, improved forest management and, as a last resort, biodiversity offsets. This scoping, including cost estimates, will be finalized before submission of the project to Board by IFC for approval. Academics, NGO (e.g. WWF Malaysia) and government partners have been engaged on biodiversity issues and an initial environmental conservation management plan has been developed.



An assessment of invasive aliens and, if applicable, proposed management strategies will be developed prior to Board. This will include an assessment of the invasiveness of proposed plantation species. Ecosystem services are being assessed within the scope of assessment and management related to PS5, 7 and 8.



The full concession will be certified under the Malaysian Timber Certification Council (MTCC) system, an affiliate of Programme for the Endorsement of Forest Certification (PEFC), by December 2014. Two previous audits indicate potential for compliance with the Forest Stewardship Council (FSC) principles with the exception of non-clearance post 1994 (FSC Principle 6.10). As a result, FSC certification is limited to Controlled Wood for the NFM area and no clarity exists on future potential of FSC certification for the full concession. IFC recommends compliance with all FSC principles, with the exception of Principle 6.10.

The company will as part of the corporate ESMS, put in place procedures to ensure that in situations where there is potential for impacts on indigenous people, the impacts will be assessed and mitigated in accordance with the provisions of PS7.



BILT’s Ballarpur plant has bamboo harvesting rights issued by the Forest Department in the state of Maharashtra. The bamboo harvesting concession is spread over two districts in Maharashtra state in India. Rights to harvest bamboo (and other NTFP) in some areas of these forests have under the national laws been awarded to locally resident communities. The company has implemented procedures to: seek details of those areas within the forests, where rights have been awarded to communities, and will ensure that it avoids/does not harvest bamboo from those areas.



The Affected people/communities in SFI’s Concession Area are defined Indigenous People and belong to ethnic groups namely Kadazan Dusun, Murut, Lundayeh, Iban, Kedayan, Brunei, Bisaya and Chinese. The assessments undertaken by SFI suggest a strong sense of attachment (both individual as well as collective) of local communities with forests, land, and natural resources in the Concession Area that had its roots in past generations and found continuity in current community practices and lifestyles. Traditional decision making institutions, structures and processes exist in communities, particularly the Indigenous People, (IP) resident in the SFI influence area. These traditional decision making institutions are respected by the IP communities and are also recognized under the local law (through native courts).



SFI’s operations in the concession area has impacted and potentially will impact in the future, as plantation area is expanded, IP communities including their subsistence, livelihood/income losses (due to the direct impact on land holdings; individual (through PS5), as well as collective), and access linked issues (due to disruption or severance of access and linked impact on hunting activities, NTFP collection, fishing, loss of grazing areas). Further, impacts on cultural heritage and communities’ ethnic, cultural and traditional beliefs and value systems have also been identified as key issues in the social impact assessments and HCV assessments.



In the context of SFI’s operations impacts on IP communities is caused by impacts on or conversion to plantation or loss of access to: land possessed under customary tenure; land planted with fruit trees of more than 50 trees/ha; grazing land; land which has been cultivated for more than three years; burial grounds, shrines and other cultural properties; and Right of Way for humans and cattle through rivers and roads. SFI, in its role as a lessee in the concession, is bound by and committed to adhere to the terms of the ITP Licensing agreement duly guided by Sabah Forest Department as the Concessioning Authority. The ITP Licensing Agreement provides for avoidance and/or mitigation of impacts
i) requiring that the rights of Indigenous People’s as defined under Malaysian laws, including customary laws, and the rights to NTFPs, should not be affected or limited under the licensing agreement; and ii) that the Government may excise any part of the license area with the consent of the licensee where native customary rights have been established; and (iii) that SFI shall be compensated by provision of alternate land equivalent to the excised land.



SFI will, as per the recommendation of the attached Social Impact Assessment (SIA) described below, mitigate impacts on IP communities from existing and past operations, and from future plantation area expansion operations, prior to opening up any new areas.



Approach in Areas already converted to plantations: In the context of impacts that have already occurred /manifested due to current and past operations/activities of SFI, it will a) undertake extensive consultations with identified stakeholder groups, in accordance with the principles of Informed Consultation and Participation (ICP), with the IP communities. The consultation will use culturally appropriate strategies to ensure participation of all stakeholder groups/communities; (b) based on these consultations, detail and assess retrospectively impacts on IP communities and c) agree with affected communities and implement mitigation measures to address the impacts in line with the principles delineated in the entitlement matrix developed as a part of the SIA. With an aim to mitigate impacts, the SIA will also develop an Indigenous People Plan (IPP) or a broader Community Development Plan (CDP) with a separate component for Indigenous People. SFI will ensure that the impact mitigation measures defined in the SIA and CDP/IPP will be implemented in a time bound manner with adequate budget and resources.



Approach in New Areas to be converted to plantation: SFI will, prior to commencing work in any new compartment, undertake a Social Impact Assessment, in accordance with the Social Impact Assessment and Mitigation Framework, which has been developed as part of the SIA completed to date. The SIA framework delineates the process requirements for conducting an SIA before opening any new compartments/areas including consultations to meet ICP requirements. The framework also lays down key principles for defining eligibilities and entitlements including principles for addressing any unforeseen impacts. The SIA framework also identifies indicators for determining livelihood restoration and/or mitigation of other impacts and includes detailed outline of impact mitigation plans (e.g., Indigenous Peoples Plans, Livelihood Restoration Plans, Community Development Plan and Stakeholder Engagement Plans). This SIA framework will be integrated in the existing High Conservation Value (HCV) assessment framework.



The impact mitigation measures that emerge as an outcome of the SIA will be appropriately built into the compartment working plan, and wil
l be implemented by SFI in a time bound manner. SFI will undertake this SIA sufficiently in advance of commencing any work in the compartment so that communities get adequate time for their decision processes and also such that the outcome is appropriately incorporated in the compartment working/management plan.



Obtaining Free, Prior an Informed Consent (FPIC) where applicable and required prior to converting any New Areas: The proposed SIA framework will, during the scoping phase of the SIA (for any new area), determine if any triggers that require FPIC are present. The SIA and FPIC framework developed as a part of the SIA: a) identifies criteria, conditions and triggers that would mandate requirement of FPIC, b) identifies potential areas within the concession that could trigger FPIC c) describes/details the processes to be undertaken for achieving and demonstrating FPIC; and) provides key success/outcome indicators for demonstrating FPIC achievement.



The FPIC framework has been developed in consultation with the community/stakeholders and includes a) brief profile of the different ethnic groups in the project area; b) the legal and institutional (including traditional) administrative structures; c) key aspects of cultural, religious and customary belief and practices of the IP groups/communities; and d) the existing system and procedures for engagement with IPs. The framework also identifies/screens the customary dependencies/cultural/heritage resources within the concession area mapping them according to compartments and existing harvesting schedule.



SFI will, going forward, use the SIA and FPIC framework to obtain consent prior to opening up of any new areas where triggers for FPIC exist. Six monthly audit by qualified and independent consultants have been proposed in the ESAP to assess compliance (process and outcomes) to the SIA and FPIC requirements.

The company will include in its corporate ESMS appropriate provisions to identify and mitigate any impacts on any known cultural heritage, archaeological monuments/sites, or any structure that have paleontological, historical, cultural, artistic or religious values as per the requirements of PS7. Typically, SFI does not undertake any logging activities in the community forestry, recreation forest, archaeology, stone monument and protected area. The boundary of any protected or sensitive area identified during pre-operational surveys is marked with paint before any plantation or harvesting activity starts.



The Social Impact Assessment (SIA) of SFI plantation area and the HCVF report identifies several sites/locations within the forest (NFM and ITP areas) that have significant cultural, heritage and customary value to communities in and around the project area. These include archaeological monuments/sites/structures that have paleontological, historical, cultural, artistic or religious values. Also unique natural features/forms, tangible and intangible are present in the project area which could be materially impacted by the project and its activities. Some of the key sites which are locally regarded and sacred and of high cultural value include crocodile and snake mounds, burial grounds, carved stones (believed to have supernatural powers), elevated rocks, caves (considered to have high archeological value) and former village settlement locations. The assessment has screened the concession area and mapped the locations of these culturally significant sites/locations.



The SIA indicates that some of the cultural sites have in the past been affected (either through direct impact or severance of access before BILT took over SFI. Impact mitigation measures, as detailed in the SIA, will be implemented (for retrospective as well as residual impacts) including: avoiding/barricading and ensuring minimum distance and as a last measure compensating in line with the customary practices of the community groups.



SFI’s operational checklist for forestry practices includes, mapping cultural sites in a compartment prior to commencement of work/activities. Mitigation measures include Impact avoidance provisions like ensuring minimum distance from identified cultural sites and isolating them (through barricading or leaving natural barriers or buffers around such sites) to protect them from adverse impacts of its operational activities. As a part of forestry operational procedures these locations are marked and documented on the map, monitored on a regular basis, and ensures that there is no disruption of access to these cultural sites due to its activities.



SFI will, as a part of its compartment assessment framework and prior to opening of any new compartment, undertake assessment and mapping of all culturally important sites in that compartment in consultation with relevant stakeholders/communities. Further, SFI will continue to adhere to the principle
of avoidance and ensuring continued access and where removal is unavoidable, it will be undertaken in consultation with the affected communities, its functionality shall be restored including where required, maintaining or restoring ecosystem processes needed to support it. If impacts on Critical Cultural heritage are unavoidable, SFI will consult with affected communities and key stakeholders, and obtain FPI Consent with documented outcomes, before commencing any activity that has an impact on the critical cultural heritage.

The following summarizes community engagement activities and efforts by BILT and SFI:

SFI has a standard operating procedure (SOP) in place on stakeholder engagement and conflict management, which includes broad categories of key stakeholders identified, engagement protocols, and frequency of engagement. It prepares quarterly internal land claim and dispute monitoring reports, as per its process flow chart for handling land claims. As part of this, a case log of all disputes and measures taken to address them is recorded. On a day to day basis, SFI’s operational staff in the field may come across and interact with local community members as they travel through the concession areas;

Interactions and engagement with communities and other stakeholder groups are undertaken on a regular basis. These include community meetings, consultations with village/community representatives, block/district officials (from administration and line departments), NGOs, community based organizations etc.

The 2011 HCVF assessment by external consultants conducted interviews in 16 villages to collect socio-economic data, understand local views towards natural resource management, and identify cultural sites and burial grounds;

In March, 2014 CSR department conducted a Community Based Resource Management workshop involving 10 community elders from 6 villages respectively from Ulu Tomani, Sabah Forestry Department, Sabah Wild Life Department, Land and Survey, Agriculture, Fisheries Departments and Tourism Ministries including NGO’s PACOS and PIPIT gauging the views of both community and local authorities on Natural Resource Management. At the end of the three days workshop at Kg. Alutok, a participatory community mapping was conducted with PACOS and community elders from 3 villages (Kaang, Malutut and Alutok) to identify heritage sites, grave yard, religious shrines, cave, waterfall etc.;

During 2007-2012, a local NGO was commissioned by SFI to undertake 4 social baseline studies which covered: i) 47villages in the Sipitang district; ii) 20 villages in the Tomani area, Tenom; and iii) 12 villages in the Beaufort district. Using baseline results, SFI initiated its Corporate Social Responsibility (CSR) program in 2009 the scope of which covered 94 villages. In 2012, SFI’s CSR department prepared a community engagement report in 2012 which involved interviews at 34 local villages;

In April, 2014 engaged/commissioned a reputed third party to undertake a retrospective Social Impact Assessment (SIA) of converted areas. The SIA process a) studied/analyzed the existing systems/processes for stakeholder engagement and management of social impacts; b) carried out household surveys of impacted families in the areas already converted/developed into plantations; c) undertook consultations with different stakeholder groups across the concession area and d) proposed/developed impact mitigation/management plans/measures for identified impacts (including retrospective mitigation measures for impacts in converted areas). The SIA process was also involved the active participation of a local NGO that has been working with IP communities in Sabah through community based organizations;

As part of the SIA process, consultations and disclosure covering more than 82 villages/kampongs was undertaken and included different ethnic communities/groups, native chiefs, women, marginalized groups, religious leaders, civil society organizations, village/community based organizations, and relevant government departments These consultations were designed on the principles of informed consultation and participation. Household surveys interviewed 89 households in the 32 affected villages (in the opened areas/areas converted to plantations);

As an outcome of this SIA impact mitigation/management plans including a) social management plan, b) stakeholder engagement plan, c) community development plan and d) SIA and Free, Prior and Informed Consent (FPIC) framework for new areas going forward have been developed. These plans and measures have been locally disclosed to the communities and other stakeholder groups;

The disclosure and feedback process of the SIA (undertaken jointly by the team of external experts and SFI), included disclosure and feedback on the management plans including FPIC/SIA framework and was undertaken through 38 village level meetings (held in local language at the Kampong covering 82 kampongs and attended by more than 1200 community members) represented by village chiefs, community elders, youth and women and covering. Feedback from these meetings/consultations has been incorporated in the revised SIA;

The disclosure process culminated in two workshops with 130 village heads/representative representing about 60 villages who participated in discussions related to E&S aspects associated with SFI’s operations, including discussions around SFI’s proposed plans and procedures for assessing and mitigating impacts, stakeholder engagement and demonstration of FPIC;

BILT operations in India have a CSR department which is engaged in community engagement and development activities in the surrounding areas (plant locations).Typically the community development initiatives are linked to interventions in the area of health, education, infrastructure development, livelihood promotion etc;

Building on the above, SFI will going forward:

Implement the outcomes of the SIA and various impact mitigation and management plans that have been agreed with various stakeholder sub-groups going forward. These will also include making suitable and required changes in its operational procedures and decision making processes;

Subject its SIA and impact mitigation/ management plan/framework implementation to an external third party review to assess the process followed and outcomes achieved;

Engage and work with other stakeholder groups like NGOs/CBOs, forest department (the office of director of forestry), land and survey department to facilitate resolution of land issues and implementation of mitigation measures as detailed in the SIA and the management plans;

As part of the SEP, SFI will develop and implement a program to semi-annually report on project and impact information to affected communities. The content and format of this reporting will be discussed and agreed between the company and IFC. The company will also refine and implement its grievance mechanisms in line with the SIA recommendations

The complete set of Category A documentation is available locally at the following locations:

Sipitang District Office, Sipitang. (Pejabat Daerah Sipitang, Peti Surat No 26, 89857, Sipitang, Sabah, Malaysia)
Sabah State Library, Sipitang. (Perpustakaan Negeri Sabah, Sipitang. Sabah, Malaysia

All inquiries and comments may be directed to:

Neehar Aggarwal
Chief Operating Officer
Ballarpur International Graphic Paper Holdings B.V.
First India Place, Tower C,
MG Road, Gurgaon
Haryana – 122002
Tel: +91 124 2560025
Email – mailto:neehar.aggarwal@bilt.com

Mr Susiman Many,
General Manager (HR)
Sabah Forest Industries Sdn Bhd
Komplex SFI, No 10, Jalan Jeti,
W D T 31, 89859 Sipitang. Sabah, Malaysia
Tel: +60 87 801018 Extn. 1152
Email – mailto:m.susiman@sfisb.com.my

Yogesh Agarwal
MD & CEO
BIGPH
Paasheuvelweg 16
1105BH Amsterdam Zuidoost
Postbus 12222, 1100AE Amsterdam Zuidoost
Tel: +31 205646160
Fax: + 31 205646161

Based on the review of project documentation, assessment of the Informed Consultation and Participation (ICP) process described in the community engagement section below, and observations of several formal meetings organized by the company with the Affected Communities, IFC has determined that SFI is engaging with them in line with principles of ICP and broad community support for the project and SFI's operations exists. The affected community considers the project related initiatives as a positive development and is looking forward to the effective implementation of the FPIC process and impact mitigation/management plans/frameworks, with the expectation that it will result in overall positive outcomes *ICP - Information Consultation and Participation **BCS - Broad Community Support

BILT 3 (BP)(34602) Supervision Disclosure Snapshot – Version 2
Description	Anticipated Completion Date	Status	Comments	Completion Date
Sabah Forest Industries PS 5, 7 & 8 - Completion of: ground verification of claims in converted areas in the Industrial Tree Plantation (ITP); and household survey of affected households/communities and update of the Social Impact Assessment (SIA) for the converted areas within ITP; - Implementation of stakeholder engagement plan to demonstrate Informed Consultation and Participation (ICP) - For SFI’s proposed future operations in the ITP and NFM areas of the concession, demonstration of agreement with: affected communities of Indigenous Peoples on FPIC framework; and affected communities on SIA mitigation framework. PS6 - Completion of: Phase 2 Biodiversity Assessment; a detailed schedule and assessment protocol for field-based compartment level assessments,; a Biodiversity Action Plan; and assessment of invasive aliens/species as described in the Environment and Social Review Summary (ESRS) under PS6	20-Jul-2014	Completed	Completed	9/25/2014
BIGPH through BILT PS1 - BILT to complete development of a corporate Environment and Social Management System (ESMS) in line with PS requirements including as described in the ESRS, and commence its implementation; PS2 - BILT and SFI to complete development of upgraded Human Resources (HR) Policies and Procedures including contractor oversight procedures as described in the ESRS. Sabah Forest Industries PS2 - SFI to upgrade the Grievance Management System in line with recommendations of labor audit and ESRS. PS 5, 7 & 8 - SFI to commence implementation of mitigation measures in accordance with the agreed SIA framework for all households/communities where adverse impact identified during ground verification. PS6 - SFI to complete development of mitigation and monitoring plan targeted to biodiversity risks and impacts, Scope and estimate costs of measures required to achieve No Net Loss for Natural Habitats and Net Gain for Critical Habitat triggersas described in the ESRS under PS6	26-Aug-2014	In progress	Under discussion with IFC Client
BIGPH through BILT and SFI PS1 - Third Party Consultant for quarterly audit of SFI and bi-annual audit of corporate ESMS to be appointed (ToR to be provided by IFC). Sabah Forest Industries PS1 - First third party audit of SFI completed and audit confirms progress in implementation of agreed mitigation measures as per schedule agreed with IFC including stakeholder engagement plan, HR Policies and procedures, ESMS and other corrective actions, management plans described in the ESRS and this ESAP; - If any new areas opened between disclosure and commitment, third party review of the compartment level HCV/Biodiversity assessment, SIA and FPIC, against agreed framework completed and the review confirms compliance of compartment level HCV/Biodiversity Assessment, SIA and demonstration of FPIC to be as per the agreed framework	29-Aug-2014	In progress	Under discussion with IFC Client
Sabah Forest Industries PS2 - Third Party quarterly audit completed and audit confirms implementation of SFI specific HR Policies and Procedures, in addition to confirming on schedule implementation of the various mitigation measures described in the ESRS, the management plans referenced in the ESRS and this ESAP all as per the schedule agreed with IFC; BIGPH through BILT and including Sabah Forest Industries PS3 - The company to have completed benchmarking of all its manufacturing plants against GIIP, identified opportunities for resource efficiency improvement, identified opportunities to bring emission and discharges from its plants as close to GIIP norms as is technically feasible and cost effective, and agreed with IFC a time bound action plan to implement the identified opportunities; - The company has completed a detailed EHS audit of Sewa plant including a comprehensive technical review of its effluent treatment plant (ETP) by a third party, and agreed with IFC a time bound action plan based on the EHS audit and technical review findings; - The company will have commenced monitoring Total N and Total P at all of its manufacturing plants; - The company will have completed a review of its procedures, facilities and practices relating to segregation, handling, storage, and disposal of hazardous wastes at all of its plants, and agreed with IFC an action plan to fully implement procedures that meet GIIP. Sabah Forest Industries PS3 - SFI has carried out characterization of ETP sludge including testing for organic halogens	31-Oct-2014	In progress	Under discussion with IFC Client
Sabah Forest Industries PS1 - Third Party quarterly audit completed and the audit confirms implementation of SFI specific corrective actions described in the ESRS, the various management plans referenced in the ESRS and this ESAP, implementation of biodiversity action plan, and continued demonstration of adequacy of compartment level HCV/Biodiversity Assessment, SIA for new areas and demonstration of FPIC for new areas opened up, all as per the schedule agreed with IFC; PS3 - SFI has implemented an ongoing comprehensive ambient condition monitoring program including for ambient air, marine environment and ground water, including monitoring of Total N and Total P in its effluents; and has as described in the ESRS, completed thermal discharge/plume modeling/mapping, identified presence of sensitive habitat, if any, within the thermal plume, and has agreed with IFC a time bound mitigation plan to address any impacts on sensitive habitat; - SFI has completed a review of its pesticides, identified all WHO hazard class 1a and 1b pesticides, and replaced them with less hazardous alternatives. In addition the company is to agree with IFC on an approach to the disposal / reuse of all pesticide containers BIGPH through BILT PS2 - BILT will have, in the event its bamboo working lease for Ballarpur is renewed, commenced constructing or providing worker accommodation to migrant workers in accordance with IFC PSs and ensured that these migrant workers are employed on substantially similar terms as other workers;	31-Dec-2014	In progress	Under discussion with IFC Client