Progress Report
Sustainability Action Plan 2016-2017
Period of May-August 2016

REPSA (Reforestadora de Palmas de El Petén, S.A.) is committed to communicating
regularly and transparently on its intentions, performance and challenges, and therefore
we wish to report our progress against our recently launched sustainability action plan.
The report covers the first four months since the launching of the action plan in early May
2016. This update constitutes the first of a series of periodic reports that will
communicate to interested audiences and stakeholders the progress we are achieving
towards meeting our sustainability objectives.  Our stakeholders need to be aware that an
independent third party organization that works with companies, NGOs and communities
on sustainability issues, is providing REPSA with advise and council on the implementation
of our action plan.

REPSA has a vital role in producing and processing responsible and sustainable palm oil in
Guatemala.  As industry leaders we strive to take a holistic approach to sustainability as
the basis for our business model. We are guided by the premise that our company must
add value to our stakeholders, including employees, communities, local and central
government, customers, suppliers and others, while striving to minimize our
environmental impact. Within that framework we established the primary goal for our
action plan which is to “Develop systems and capacities for effective implementation of
a responsible palm oil production policy”.  We determined six objectives, each with its
respective set of activities, that will help us reach this goal. The progress report describes
highlights and challenges for each of the objectives although not all of the activities are
described. A more detailed list of objectives and activities can be requested through our
website.

1.  Clear values and corporate-level policies on responsible production/operations
are developed and understood by our stakeholders.

  •   A Draft Policy on Responsible Palm Oil Production was developed in July and
    shared with employees, clients and other stakeholders, such as the Governor
    of the Petén Province, the Mayor of the Municipality of Sayaxché, Ministry of
    Health officials, and the regional representatives of the Protected Areas
    Council (CONAP), among other national and international stakeholders. It
    was also posted on our new website, which was launched in early June. The
    Policy focuses on the following four commitments: No Deforestation; No
    Exploitation of Indigenous Peoples, Workers and Local Communities; Water
    and Effluent Management; and Transparency. The Policy has been receiving
    feedback for a period of more than three months and we expect to formalize
    it in late September for official implementation in REPSA.
  •   During the same month of July, we also held a workshop with senior and mid-
    level employees were the Policy was socialized. Once the Policy has been
    formalized for implementation it will be socialized broadly within the
    company.
  •   In addition, the communication of our corporate values to our employees
    and stakeholders has been publicized through our new website.
  •   During the month of August, REPSA announced that it would obtain
    Rainforest Alliance and RSPO certification for its two mills and plantations by
    the first Quarter of 2017. It is important for our stakeholders to recognize the
    fact that some of REPSA´s sister companies have already achieved Rainforest
    Alliance certification.

2.  Human rights (local communities, civil society, workers, and other stakeholders)
and the law are fully respected.

  •   An ongoing system for more robust community and local stakeholder
    engagement on sustainability and issues of conflict is being developed with
    support of international NGO partners, and input from local NGOs and
    communities.  REPSA is committed to identifying, reducing and managing
    social impacts and conflicts in a transparent way, with all relevant local
    actors. Although REPSA has a team of community outreach staff directly
    involved in local stakeholder engagement, the process aims to contribute to
    an enhanced grievance diagnostic process established in a participatory
    manner.
  •   Discussions are in place with KPMG Guatemala to carry out an independent
    assessment on REPSA´s labor practices and policies, where potential gaps are
    identified and corrective actions can be put in place.  The terms of reference
    are being discussed and the assessment is expected to occur during the
    month of October. We will be reporting on the results of the assessment in
    the second progress report (September-December 2016), due in early
    January 2017.
  •   A significant investment has been taking place since July, in renovating all
    worker housing sites, to ensure safer, more humane, and hygienic
    accommodations, worker privacy, access to well-maintained sanitation
    facilities and potable water.  One of the urgent challenges was to install
    improved purification systems in 8 of our worker housing facilities in order to
    improve and guarantee worker health with more secure potable water.
    Given the urgency, we targeted to have the infrastructure and water
    purification systems in place at the end of August. By August 31, we had an
    advancement of 86% expecting to finish all installations and systems in the 8
    worker housing facilities by Monday September 12 at the latest.
  •   Three health and safety committees were established in June, two for each of
    the mills and one for agriculture operations.  These are actually
    subcommittees, as Guatemalan law (Acuerdo Gobernativo No. 33-2016)
    requires one H&S committee per company.
  •   Supplementary channels to report grievances are being explored for workers,
    in order to complement the existing bi-lingual phone line in operation since
    2013. In addition, a Grievance Mechanism embedded in the REPSA website is
    being developed following the example of other major palm companies.
    REPSA is open to obtaining stakeholder input in development and testing of
    the grievance mechanism.
  •   To continue improving on human rights matters and in order to make a more
    robust commitment to avoiding unacceptable behavior from our staff, a
    Policy to Prohibit Violence and Intimidation was released in early June 2016.
    It was first transmitted to senior management and then it was communicated
    to different levels of the company by REPSA´s senior management itself. A
    much more comprehensive communication plan of the Policy will be
    implemented from September onwards, in order to target lower level
    personnel (non-spanish speaking) as well as security personnel. REPSA is fully
    committed to these issues and wants to lead in regards to respecting labor
    and human rights.

3.  The company is transparent with stakeholders about its policies, plans,
grievances, and operations.

  •   The initial steps on this objective included launching a website in June 2016,
    providing more information about our sustainability initiatives. Some of this
    information has also been provided physically to internal and external
    stakeholders. As an example of greater transparency, REPSA posted a
    synthesis of its sustainability action plan and socialized it during an event in
    early July with more than 60 local stakeholders in Sayaxché, Petén. In
    addition, the action plan and Responsible Palm Oil Production Policy have
    been shared during personal visits to clients, national and international
    NGOs, government authorities among others. The company is also
    committed to communicating progress reports to the public on the
    implementation of its sustainability action plan and other related
    sustainability KPIs. In future updates we will report on the progress of our
    grievance handling process.
  •   Building on the opportunity of these two way interactions between REPSA
    and its stakeholders, a mapping at local, national and international level has
    been updated and a stakeholder engagement strategy is now under
    development.  The objective is to consolidate two-way communication with
    various stakeholders in order to generate ongoing dialogue.   REPSA’s
    stakeholders vary widely from international NGOs to national and local
    government, local NGOs and local communities. We are finding many
    perspectives including those with genuine interest in solving problems
    together and those who will not engage in any dialogue with us. We will
    continue our steps towards more openness and transparency with
    stakeholders of all types with the intention of long term trust building and
    cooperative problem solving.

4.  Protect and restore Key Conservation Values.

  •   A study to identify High Conservation Value Areas (HCVs) was carried out in
    August by an external and HCV Resource Network accredited consultant,
    BioTerra. This study will help REPSA in determining which areas inside the
    plantation will need restoration and proper conservation management.
  •   Based on internal land analysis, in addition to the HCV study mentioned
    above, a plan to restore and protect riparian/gallery forests and wetland
    buffer zones was developed in 2015, where 30 hectares were restored. For
    2016, we expect to restore approximately 80 hectares and for 2017, we are
    targeting at least 40 hectares.
  •   During the month of July, a land use change analysis was presented to the
    Protected Areas Council (CONAP), as part of their recommendations and
    requirements for palm oil plantations that are located within buffer zones of
    protected areas.  This will lead to recommendations for remediation that will
    take into account our current restoration plan, mentioned above
  •   Updates on environmental impact assessments for both mills were presented
    to the Ministry of the Environment (MARN) as per the legal requirement of
    early 2016, which allows a two-year period for compliance. In mid-August,
    REPSA had a follow up visit from MARN technicians in order to evaluate both
    updates. We expect to have a final and positive response from the
    authorities before the end of the year.
  •   As per the update on the environmental impact assessment required for the
    plantation, a process to comply with all required information and documents
    was started earlier this year. As of July, REPSA has begun to compile relevant
    documentation to present to MARN, and expects to finish this process in
    mid-November.  REPSA is committed in continuing to invest in restoration
    and conservation of high conservation value areas within our property, such
    as gallery forests and wetlands. Worth mentioning is the fact that REPSA is
    exploring a water and biodiversity stewardship approach beyond its borders
    and currently it is being discussed in partnership with various stakeholders in
    the region.

5.  Environmental Impacts are minimized and managed effectively.

  •   In order to mitigate the impacts of the climatic event that occurred in April
    2015, REPSA made a major investment related with the expansion of its
    ponding system in its two mills. In addition, it also broadened the rainwater
    perimeter channels around the ponds.
  •   A Policy on Zero Effluent Discharge was drafted in late august. It is expected
    the Policy will be socialized internally during the second half of September.
    As with the other corporate sustainability policies, it will be made public in
    our website during the same month.
  •   Water and palm oil mill effluent management information has been posted
    on our website so that the public has general access to these methods and
    processes. REPSA is also evaluating making available for consultation the
    designs, studies and permits on water usage and effluent treatment.
  •   REPSA is investigating how to improve its management of atmospheric
    emissions. The company is considering reporting greenhouse gas (GHG)
    emissions through the Carbon Disclosure Project. Initial contact with CDP has
    been made with the European office based in Berlin.
  •   The company commissioned a study by Colegio de Biólogos de Mexico, a
    reputable independent NGO, on the April and June 2015 events that
    occurred in La Pasión river. The results have been communicated to some of
    our stakeholders and will be communicated more broadly in the immediate
    future.

6.  Shared values are created with local communities and others.

  •   Since the beginning of the year we have increased dialogue with the new
    Governor of Petén, the Mayor of Sayaxché and his Council, plus other local
    community leaders, to better leverage the existing Pacto de Gobernabilidad y
    Desarrollo del Municipio de Sayaxché (Governance and Development Pact for
    the Municipality of Sayaxché), where REPSA has committed to supporting
    local capacity building work such as local development, the promotion of
    human rights, peace and good governance. A series of workshops on these
    topics have been provided to local leaders and are planned until the end of
    the year. More details on the impact of these workshops will be highlighted
    in the second progress report of the action plan.
  •   During the past four months, a series of projects benefitting different
    communities such as El Canaleño, El Tucán, La Torre, Santa Rosa and El Pato,
    were inaugurated. These include water infrastructure (access to potable
    water) in the community of El Pato, local “lavaderos” or washing hubs for the
    women to do their laundry in El Canaleño and El Tucán, and children´s
    recreational facilities in schools located in Santa Rosa and La Torre. 400
    families plus 355 students benefitted from these projects.
  •   REPSA is also committed to investing in sustainable livelihoods aspects,
    focusing on health, nutrition, small scale agriculture and livestock
    management and small scale agriculture projects. We have invested in
    workshops and training at our local School of Agricultural Training (ECA)
    which are available to the spouses of our workers. These trainings cover child
    health practices, food safety, healthy homes, knowledge of disease
    prevention and household clean water management. To date more than 300
    women have participated in various workshops and the goal is to build
    capacity in 500 women and their families by mid-2017.  END of REPORT.

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