During appraisal it was determined that the Project will not create measurable economic displacement and/or physical resettlement as the Company has purchased only privately-held land from legally-verified owners on a willing sellerwilling buyer basis. The Company has a comprehensive screening system in place which ensures that only land with clear and undisputed title is purchased or leased thus PS5: Land Acquisition and Involuntary Resettlement is not applicable although discussed below. There are no Indigenous Reserves or Indigenous Populations in the Project area according to the Company and established sources thus PS7: Indigenous Peoples was not considered applicable. Information from international bodies and consultation with local authorities and examination of cartographic resources indicate that there are not critical cultural heritage sites thus PS8: Cultural Heritage was also not deemed applicable.

This is a Category B project in accordance with IFC's Policy on Social and Environmental Sustainability. The E&S risks and impacts associated with the proposed project can be prevented or mitigated through the combined use of a proactive environmental and social management system, application of established EHS safeguards otherwise proven in the region, and by use of internationally-recognized and externally-verified forestry practices. Environmental and social issues reviewed during appraisal included: (i) Current status of the Company's environmental and social management systems; (ii) Proposed OHS management practices of the Company and its primary contractors; (iii) Identification and conservation of natural and critical habitats and protection of ecosystem services; (iv) Prevention, detection and suppression of fire in plantation operations; (v) Energy use, efficiency and GHG emissions associated with project development; (vi) Management of hazardous materials including agrochemicals and operational petrochemicals; and (vi) Proposed approach and tools for community engagement during plantation establishment and operations.

The Company has presented plans to address these potential environmental and social impacts to ensure that upon the implementation of the specific agreed mitigation measures, the Project is expected to comply with applicable Colombia regulations, the FSC Principles and Criteria, and IFC's Performance Standards and General EHS Guidelines listed above as well as IFC's EHS Guidelines for Perennial Crop Production (2016) and Forest Harvest (2006). Information on how these potential impacts are addressed is contained in the following paragraphs and in the attached Environmental and Social Action Plan.

Policy The Company has established an overarching policy framework that clearly outlines its commitments to sustainable production systems and compliance with regulations, industry best practices and IFC's Performance Standards. It identifies goals, some targets and authorities for implementation. It also includes high level commitment to EHS risk assessment, achieving FSC certification and has clauses referring to specific policies against bribery, workplace violence, workplace safety, sexual harassment and discrimination. http://www.refosinu.com/web/

Identification of Risks and Impacts Commercial forestry activities and wood harvesting are conducted under the requirements of Colombia's Ministry of Agriculture (or MAG per Ley 101, 1993, Ley General de DesarrolloAgropecuario y Pesquero). Forestry plantations are treated as agriculture (Decreto 2811, 1974; Ley 99, 1993; and Decreto 2041, 2014;) and do not require Environmental and Social Impact Assessments per se. Autonomous Regional Corporations (CARs) have delegated authority to manage natural resources and broad environmental compliance for all commercial permitting and activities at the provincial level. During meetings with the Regional Environmental Department in Apartado officials indicated Sinu enjoys a collaborative relationship with authorities and is in compliance with applicable regulations.

Organizational Capacity and Competency - The Company has been operating for eight years and has demonstrated commitment to improving its management capacity. Nursery operations have recently achieved ISO 9001:2015 quality management certification and the Company has begun the pre-certification process for meeting the Forest Stewardship Council's Forest Management and Chain of Custody requirements. The Company is also investigating the installation of a forest carbon credit scheme which would allow it to transact some of its carbon credits. Practices are becoming standardized and an internal control system is being established to monitor performance and continuous improvement. The assessment and management of the most significant E&S risks is conducted by Forest Supervisors in each of the three Forest Management Units (FMUs) with oversight from a Chief Forestry Officer. The Supervisors supervise contractors, monitor occupational health & safety performance, and coordinate the development initiatives of RefoSinu Foundation. The forestry staff depends on centralized HR support, a cartographic unit that helps plan expansion and area management, and a Forest Certification Coordinator charged with ensuring compliance with local regulations and third-party standards.

As the plantations expand and the complexity of operations grow it will be necessary to deepen the Company's EHS management systems and capacity. This will become critical as harvest operations and a chipping line commence and community safety and occupational risks multiply. Sinu will engage a qualified individual to coordinate the ESMS across all forestry, wood supply and wood processing operations. He/she will coordinate field-level ESMS including stakeholder engagement and community security, OHS risk management, and development of a robust fire prevention and suppression system. This is addressed in the Environmental and Social Action Plan (ESAP) item #1.

Environmental & Social Management Systems -Sinu has a three tiered approach to the identification and management of E&S risks in forestry: The Forest Master Plan which establishes corporate policies, procedures and targets for the establishment and harvesting of forests; The Forest Plantation Manual which establishes procedures for forestry activities including planting, tending, roading as well as environmental safeguards such as set-backs, use of agrochemicals, and fire management; and the Forest Management Plan established for each geographical cluster or FMU, which are under the direction of a Forest Supervisor. The Forest Management Plans compile all the landscape-level biophysical features of each FMU including soils, water, vegetation, and topography, as well as information about affected communities and potential impacts. These plans, which are updated annually, also identify the silvicultural prescriptions, fertilization and weeding programs, and determine mitigation measure for E&S risks as established in the Forest Master Plan and Forest Plantation Manual. The assessment of the EHS risks of the chipping installation and operation will be completed and submitted to IFC prior to operations after equipment specifications and location are determined (ESAP Item 2:).

Emergency Preparedness and Response The Company operates in a remote area with poor roads, erratic cellphone service, and few first responders from municipal locations. Sinu has GPS-enabled security systems on its vehicles and staff have received some training in conflict situation management. There has been emergency response training for natural hazards for permanent and seasonal staff in nursery and forestry operations. The Company has developed preliminary response plans and procedures for fire, seismic and severe weather events, but information on transportation risks and standard procedures including vehicular accidents is incipient. The Company will also report its emergency preparedness and workforce accidents in their Annual Monitoring Report (AMR). As noted below under PS4, the Company will conduct a Workforce Safety and Transportation Risk Assessment and Action Plan for forest harvesting operations to identify the most significant threats to its assets, staff and affected communities (ESAP Item 3).

Monitoring and Review Sinu has established environmental and social monitoring procedures and Key Performance Indicators (KPI's) for most forest activities. Water quality treatment in the nursery for phytosanitary purposes and potable water safety are in place and accident logs were available. Soil sampling and soil mapping basics were in place but attention to changes in fertility under different fertility regimes was inconclusive indicating improved soil mapping and monitoring will be important to optimizing forest growth and yield. Attention to the effects of plantations on water balance, changes in carbon sequestration and credits, and biodiversity conservation would all benefit from increased attention (see PS6, below).

Grievance Mechanisms - The Company has identified specific mechanisms for avoiding and airing of grievances and disputes. A written procedure for Conflict Resolution with Communities identifies channels, designated personnel, and a communication process for airing disputes including legal remedies. The grievance mechanism has been tested and the Company will report to IFC in the Annual Monitoring Report a summary of grievances and their resolution. The FSC certification process will also review the system annually and publicly report its findings.

Land Acquisition (Supplemental Note)- As stated in Applicable Performance Standards, IFC determined that the Company has an established process by which private properties are screened and settled in a manner which will not cause involuntary resettlement or economic displacement. Sinu retains a full-time staff lawyer responsible for ensuring the application of its procedures. Beyond standard due diligence for land titling this process emphasizes attention to three particular aspects of Colombian land law: (1) Law 160 (1994) restricts the sale of publicly-held, vacant lands (Baldios) to any one owner (or about 60 ha per family in the project area). This rule is applicable to public lands transferred by the State which the Company avoids during early stage land registration and cadastral review procedures; (2) Law 1448 (2011) establishes that restitution may be applied to lands abandoned as a result of armed conflict. The Uraba region has observed conflict and displacement from drug trafficking, political, and paramilitary actions. The Company avoids displacement hazards through direct consultation with surrounding communities and requests legal review (derecho de peticion) by the competent agency when potential claims or pending investigation is identified; and (3) Law 1708 (2014) allows the government to expropriate lands that were previously used for illegal activities or purposes. The Company has established a multi-channel process for identifying potential illegal actions by prior owners or associated individuals. The Company indicates that less than 10 families remain located on some of its plantations where the Company has allowed them to retain custodial tenure under no-cost lease for security purposes. Provisions and responsibilities for managing tenant operations and residual risks are included in the Forest Manual. IFC also reviewed available information on mining concessions through the Colombia Mining Cadaster and potential right of ways for public infrastructure and identified no likely impingement on Sinu's current or expanded operations.

Human Resources Policies and Procedures Sinu directly employs 30 people in its nursery including 15 supervisors and 15 semi-skilled workers, the majority of which are women. In forestry operations it employs 40 in technical and skilled labor tasks and approximately 250 laborers are hired locally by four contractors providing support in plantation operations which are directly supervised by the Forest Supervisor. The Company recruits and directly supervises all nursery and technical functions according to detailed HR policies which are consistent with IFC's PS and Colombia's laws and regulations. Sinu's HR department ensures that contractors apply their policies (no child or forced labor, no discrimination, freedom of association) and provide appropriate conditions through audits. The same policies and workforce procedures are included in contractor base agreements. The HR staff oversees recruitment and compulsory induction training and organizes on-site workplace safety and emergency response support to the forest supervision staff and joint training is provided to forestry contractors.

The Company emphasizes the employment of members of neighboring communities (veredas, see PS4 below) while being mindful of historical regional labor shortages and competition with the agriculture markets centered on the Uraba port areas. The Company ensures worker eligibility and remuneration through an electronic payroll system and the terms of employment and worker redress are explicit in written guidelines which are posted in appropriate locations. The Company has a non-discrimination and equal opportunity policy in place and gender balance, an expressed goal of the Company, is achieved thus far in the nursery operations and administrative operations. There is a detailed prohibition on all types of harassment which establishes processes for investigation and communication of lapses and results. Workers can form syndicates but have not yet done so. The Company has workers' grievance mechanism stated in the induction manual that allows for anonymous complaints and is available to contractors' workers as well. The Company has established procedures for evaluating workplace stress and screening of external psycho-social factors.

Workplace Safety Land preparation and planting operations are largely manual with limited use of heavy equipment for roads. Some work areas are on steep slopes where hand slashing and pitting requires hydration and appropriate nutrition and access to first aid and emergency services. Worker safety is recorded and reviewed by management on a monthly basis. Accidents logs indicated most incidents are confined to forest clearing and planting operations. Personal protective equipment, required for nursery and forest operations and workplace safety, was emphasized throughout operations with signage and written guidance. Cell phone coverage in the forestry areas is incomplete and optional channels for routine and emergency communications were not in evidence.

Given that forestry operations are new to this region and the Company will be moving toward more hazardous felling and wood transportation operations, risk assessment and safety procedures should be more formalized with specific targets established for felling, skidding and wood transport operations. Road safety will become more hazardous and communications to protect workers and communities along alignments more important. As noted above, the Company will conduct a Workforce and Transportation Safety Risk Assessment and Risk Action Plan across current and anticipated forestry and wood harvest and transportation operations consistent with industry best practices (ESAP Item 3).

Pollution Prevention - Soil erosion and water course sedimentation during the clearing of secondary vegetation and establishment of road networks for timber extraction are the largest potential source of pollution associated with Sinu's activities. Avoidance of erosion and sedimentation of waterways is being achieved through road planning and engineering which avoids water crossings. Most planting is done manually, and contours are used to control erosion on slopes above 10%. Soil mapping processes are basic and overfertilizing hazards could be reduced further by applying GIS technologies to optimize growth. With upcoming harvests, the extraction roads take on more importance and water crossings and storm water runoff will require more engineering attention and investment.

Greenhouse Gases Most of the Company's forestry operations are manual and do not require the same consumption of petroleum products used in mechanical site preparation. Nursery operations consume a nominal amount of electricity from the hydro-powered grid, but occasional use of a back-up generation is necessary. Harvesting operations and the transport of logs to the chipping facility will increase petroleum consumption which will still be well below IFC's emissions threshold reporting requirements. Use of fire is limited by the Ministry of Environment and discouraged in operations according to the Company. Gross Carbon emissions (sequestration) from reforestation is expected to vary between -25-30 tCO2e per hectare per year amounting to an approximately -155,000 eCO2t/yr. The Company is developing a carbon accounting program and is undertaking a study to pursue sales of carbon credits in the voluntary carbon market. Sinu will provide IFC with a carbon accounting in its Annual Monitoring Report.

Hazardous Materials & Pesticide Use and Management The Company uses extensive amounts of agrochemicals during forest operations which are prescribed and detailed in the Forest Plantation Manual. Improvements in the system, and mapping application rates with growth through a GIS, will be an important tool for improving prescription accuracy and reducing the potential for over-application and exposure. Lime and composite fertilizer are used during planting and periodic top dressing during growth cycles. While planting relies mostly on hand slashing, herbicides are used to control reemergent vegetation. Glyphosate is applied 1-2 times per year until the tree canopies close (normally in the second year). Spot application of insecticides is used to control Wasmanniafire ants and some fungicides are used in the nursery to control Cylindrocladiumand Phytophthora outbreaks. Review of agrochemical stores and inventories indicated appropriate controls for access, mixing and application, and recycling of empty containers. It was noted, however, that several pesticides identified in the Plantation Manual (although not observed in stores) are WHO Class 1a or 1b. will require FSC derogation for use and the Forest Manual will be updated accordingly. The chipping mill will use only petroleum products which will be appropriately detailed in the environmental review to be submitted to IFC prior to construction.

Water and Waste The Company's nursery uses filtered water abstracted from the Sinu River for fertigation of planting stock and sanitation water for workers. Sanitation water is treated on-site in closed septic and pumped annually by contractor. Plantations are not irrigated, and the chipping process will be dry. Out-planting uses open-root technology and trays are returned to the nursery for reuse. Debarking of trees will likely occur in forest or at landings and residuals returned to the forest. Dust and fines associated with chipping mill operations with be managed through cyclones and disposed of through municipal facilities or sold to biomass users.

Climate-Related Risks The primary climate-related risks for the Company are drought, stress-induced insect infestations, and wildfire potential. Data from several meteorological platforms (aWhere, USGS/GLDAS, NASA/MODIS, ESRI/Water Balance Model) indicate changes in normalized annual precipitation in the project area since 2015 and a shift in Precipitation/Potential Evapotranspiration (P/PET) ratios since 2010. These changes show a reduction in soil water retention during the extended dry seasons. Other climate-related risks to Sinu's plantations include wind throw and road infrastructure loss from flooding. Mitigation of these climate risk factors will include improvements in use of meteorological information, identification of drought and wind-resistant planting material, silviculture to improve moisture retention, and fire management practices. The Company is developing better meteorological intelligence and is testing some clones for drought and wind characteristics. Sinu's silviculture is addressing some fire risks through vegetation (fire breaks) and it has developed a preliminary Fire Management Plan emphasizing tactical response. However, the Company has not developed a comprehensive approach to wildfire which addresses prevention, teledetection and communications, and suppression equipment needs. The Company will develop a Fire Prevention and Response Plan and submit to IFC for review and approval. (ESAP Item 4).

Community and Health and Safety The main community health and safety risks associated with forest operations are the movement of people and wood. The communities in the region are dispersed enclaves and several are accessible only by footpaths. The risks to workers and the dangers to communities along the paths of vehicles and logging trucks are inextricably linked and must be managed by ensuring the equipment is safe, drivers are competent, and communications with communities are clear. The Workforce and Transportation Safety Risk Assessment and Risk Action Plan (ESAP Item 3) will take a comprehensive approach to assisting the Company to address both its operations and the impacts on affected communities. The emergency preparedness and response plan will be communicated to community members through the implementation of a SEF

Emergency Preparedness and Response The potential for wildfire will increase as plantations expand and mature. The predominate land use in the project area is unimproved cattle ranching and subsistence cropping and fire is often used as a management tool creating dry season risks. The boundaries of each plantation have been dully marked and cleared and fire breaks established, however the use of prescribed fire in the Forestry Manual needs clarification and the requisite approvals from the Min Environment. (This is addressed in ESAP Item 2.) The Emergency preparedness and response plan will be communicated to community members through the implementation of a Stakeholder Engagement Framework.

Security Policy & Personnel Sinu has a security policy that focuses on prevention and protection of its personnel and assets while complying with Colombian laws. Security functions are managed through the HR department and are largely tasked to the forest supervisors in each cluster. The company does not currently have a security contractor. In the event that a security presence is required, the company will engage a qualified firm and revise its policies to include clear reference to respect of human rights guided by the principle of proportionality and good international practices. This will include background checks of all security personnel (direct employees and contractors) to ensure they have not been implicated in human rights abuses. The Company will development a code of conduct for security personnel and will ensure that the grievance mechanism for communities allows stakeholders to express concerns about the security arrangements and acts of security personnel, considering and as appropriate investigating all allegations of abusive acts.

Protection and Conservation of Biodiversity Expansion of planting will occur in the inland Sinu region which is dominated by gentle slopes (largely 4-15%) and degraded pastures on deep volcanic soils. Review of satellite imagery and the land use history of the area indicate that the conversion of native forest to agriculture began several decades ago and was largely completed by 2000. LandSat/Hansen (2018) and the ESA Land Cover model confirm that small-scale deforestation for pasture expansion and subsistence cropping has continued until present. The Colombian land law and agriculture subsidies encouraged conversion from forests until the land reforms in the 1990's refined the definition of Baldios to include forest land. According to the 2014 Agriculture census, three of the four municipalities where Sinu has planted retain less than 10% of Natural Areas, including native forests which are distributed along water courses and on steeper slopes which the Company retains as natural areas and High Conservation Value Areas (HCVA) using the HCVNetwork. Thus far the Company has set aside approximately 1,500 ha or approximately 25 percent of acquired areas for conservation. Review of International Biodiversity Assessment Tool identifies one Protected Area (Horizontes Natural Reserve, IUCN Cat VI, privately owned) which may be affiliated with eight Vulnerable or Critically Endangered species (3 birds, 2 mammals, 1 fish, 1 reptile, and 1 invertebrate). The Company is aware of the Reserve boundaries which is 2.5 km distant from the park. According to the National System of Protected Areas SINAP and its registry of National Protected Areas Sinu is not operating in national parks, reserves or sanctuaries. There are no areas in the current or probable expansion sites that are included in the World Database of Key Biodiversity Areas KBA's).

Ecosystem Services: Several household products are still collected from the secondary forests including construction materials, medicinal products, fruits and protein sources. Since some plantations are retained as natural areas, local residents continue to have access to these resources with Sinu's authority. The Company has identified and makes available for public use several recreational areas including geothermal springs, religious shrines of former occupants, and allows fishing but not hunting. The Forest Management Plan specifically denotes areas for conservation including: retention of a minimum of 30-meter protection for all water bodies; conservation of secondary forests; establishment of biological corridors with areas under its management control; protection of slopes in excess of 25 degrees, and protection of flora and fauna in both plantations and natural areas through controlled access. It also protects all gorges (Quebradas) with 60-meter buffers and identifies the natural areas for restoration using native species grown in its nursery. The Company understands and complies with Colombian legal requirements for slopes and set-backs are included in the management plans for each plantation stand. The ability to conserve continuous areas of native forests in steep and riparian areas can help reverse the impacts of several decades of habitat and ecosystem fragmentation.

Sustainable Management of Living Natural Resources The Company employs the Precautionary Approach in selecting plantation properties and plants only in areas which are not forested at the time of acquisition. It was observed that the Company manages plantations in accordance with FSC Principles and Criteria and has engaged competent support to ensure these expectations are encoded throughout its procedures. The Company will establish standard practices for biodiversity inventories which will be adopted at all properties. Sinu will manage its HCVA internally or agree to have them managed by a third party and will control the incursion of Eucalypts into areas designated for native vegetation. The Company will also develop this information with external support and develop management and geographic management systems to assist in mapping input requirements, growth, and sustainable management practices.

Supply Chain Considerations At appraisal the Company was not harvesting wood nor operating any wood processing facilities. The Company will apply the FSC Chain-of-Custody for its conversion facilities, and the verification practices and be able to identify all sources of wood in its supply chain. Sinu will maintain an ongoing capacity to review its wood supply and any external procurement to suppliers which can demonstrate that they also meet the FSC requirements. The Company will obtain and maintain FSC FM/COC Certification. (ESAP Item 5)

Social Impacts and Stakeholder Engagement - The Uraba region observed substantial violence and conflict between 1990 and 2010 which resulted in displacement of many households. The communities (known as Veredas) in theProject area are composed of an average of 60 families. The Company has developed a multi-pronged framework for mapping affected communities and initiating a consultative process which included meeting with community leaders and conducting inventory of water and sanitation, health services, schools and energy (only 5 had potable water, none had sanitation services, and 3 had access to health clinics). The Company has met with civil leaders in each community and has established a foundation (RefoSinu), headed by a dynamic social worker, which has set program targets and a plan to achieve them. The program, which provides material program assistance in water and sanitation, education, health delivery and microenterprise support was observed to be both innovative and effective and spoke directly to the expressed needs of the affected communities and has established good faith in some of the most conflicted areas in rural Colombia. In general, the results and interviews with community members indicate broad support for the activities of the Company and satisfaction with the Company's performance in terms of providing employment in the region, establishing new infrastructure, and providing stability.

       Company Reforestadora de Sinu

Point of Contact Luis Enei

Title General Manager

Telephone Number (57 4) 7899333

Email contacto@refosinu.com

Mailing Address Calle 59 # 10 A-32 Barrio La Castellana Montería – Córdoba Colombia

Website www.refosinu.com