Environmentally-Friendly Policies | KENCANA AGRI

We are always cognizant of the environmental impact that plantations may have, and we have been deeply committed to the implementation of environmentally friendly practices at our plantations since our establishment. Our environmentally friendly practices include:

ZERO BURNING

We adhere strictly to a 'zero burning' policy in our land clearing methods to avoid polluting the air and posing a health hazard in the region.

We are mindful that some aspects of our plantation and mill operations impact the environment. Therefore, prior to expanding any of our plantation and mill operations, we undertake a comprehensive and participatory independent social and environmental impact assessment to identify any potential negative impact and ensure that we comply with the prevailing governmental rules and regulations. The findings from the assessments are taken into account when planning and managing any new plantings.

ZERO WASTE MANAGEMENT

We apply a "zero waste" policy by recycling waste products from our production facilities. The Empty Fruit Bunches (EFB) and liquid waste/effluents emitted from our palm oil mills are captured and re-used as natural fertiliser in the plantations. In addition, the EFB and kernel shells are used by our power plant as a biomass fuel source, reducing carbon emissions.

OTHER PRACTICES

Kencana is proud to pioneer the first commercialised biomass power plant project in Indonesia which sells "green" electricity to PLN. Located within the Group's plantation in Sumatera, the 6.0 MW biomass power plant utilises waste products from palm oil mills, such as EFB and palm kernel shells, as fuel for the generation of "green" electricity.

In addition, the renewable biomass power plant has been registered as a Clean Design Mechanism ("CDM") project, and in August 2010 we signed an Emission Reductions Purchase Agreement ("ERPA") with the Danish Ministry of Climate and Energy to sell Certified Emission Reduction ("CER") credits from our biomass power plant.

We also adopt eco-friendly plantation management practices such as the use of owls to control pests and gall flies to control weed populations.