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OZZOLOOZA V3 d(IVS

ENVIRONMENTAL ASSESSMENT

CONTENT

Page

EXECUTIVE SUMMARY 1

1. INTRODUCTION 4

2. PROJECT DESCRIPTION 7

3. LEGISLATION, REGULATION, INTERNATIONAL 10AGREEMENTS; CODES OF PRACTICE AND POLICIES

4. BASELINE ENVIRONMENTAL SURVEY 19

5. POTENTIAL ENVIRONMENTAL IMPACTS 51

6. BIBLOGRAPHY 66

7. APPENDICES 67

ACRONYMS USED

ANZ - Australian & New Zealand Banking GroupBEDP - Basic Education Development ProjectBSP - Bank of South Pacific

CBO - Community Based OrganisationsCITES - Convention on International Trade in Endangered Species of Flora andFaunaCNA - Conservations Needs AssessmentCODE - College of Distance EducationCW - Critical Watershed

DAL - Department of Agriculture & LivestockDEC - Department of Environment & ConservationEMP - Environmental Management PlanESMF - Environmental and Social Management FrameworkFFB - Fresh Fruit Bunches

IEA - Intemational Education AuthorityHPC - High Priority for ConservationLLG - Local Level Government

KGH - Kimbe General Hospital

LSS - Land Settlement Scheme

MP - Marine Priority

NAQIA - National Agriculture Quarantine and Inspection AuthorityNBPOL - New Britain Palm Oil Ltd

NGO - Non-Governmental OrganisationOPIC - Oil Palm Industry CorporationPNGOPRA - PNG Oil Palm Research Association Inc.RSPO - Roundtable on Sustainable Palm OilQABB - Queen Alexandra Birdwing ButterflySADP - Smallholder Agriculture Development ProjectSMK - Salim Moni Kwik

VHPW - Very High Priority Wetland

VOP - Village Oil Palm

WMA - Wildlife Management Are

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ENVIRONMENTAL ASSESSMENT

Executive Summary:

The Smaliholder Agriculture Development Project (SADP) is an initiative of the PNGGovernment, operating through the Oil Palm Industry Corporation (OPIC); and partlyfinanced through the World Bank.

The program envisages the provision of an IDA loan to the Government of PapuaNew Guinea, to encourage smallholder rural development activities.

More particularly; the program envisages 3 components vis;

* Smallholder Productivity Enhancement.

* Local Governance and Community Participation.

* Project Implementation and Institutional Support.

The program is designed for implementation in both the Oro and West New BritainProvinces.

As a part of the World Bank loan approval processes a number of environmentalstudies are required. These include an Environmental Assessment (this document)prepared to both World Bank standards and to suit the PNG Department ofEnvironment & Conservation requirements; An Environmental Management Plan isrequired to address the resolution of Environmental Issues to be faced in theimplementation of the program (component I - being Oil Palm Planting and roadingactivities) and an Environmental & Social Management Framework (ESMF) for thecomponent 2 activities (non specified activities implemented by LLGs in the projectarea).

These 3 reports are supplied within this package.

Douglas Environmental Services, an Environmental Consultancy group based in PortMoresby, PNG was selected to carry out these relevant tasks.

The tasks were divided into 4 Sub programs

1. Field inspections of existing and potential Smallholder Oil Palm areas in Oroand West New Britain Provinces. This field work included consultation on site, orsubsequently by telephone with interested parties in both provinces. Field data onEnvironmental Baseline and potential Environmental Impacts was also collected.

2. A workshop held in Port Moresby with Industry leaders, Government officials,interested NGOs and other stakeholders. The purpose of the workshop was to identifyissues that needed study in the preparation of the Environmental Assessment and

I

other environmental (and social) documents. A separate report on the workshop andthe results of the field visits to Oro and to West New Britain was produced.

3. Additionally, a detailed study was carried out at the time of the field visitslooking at the impact that existing Oil Palm activity was having on freshwater qualityand stream health in the project areas. This was done by the use of a specialistfreshwater ecologist - Steven Moore - from New Zealand Landcare - Stevenspecializes in the examination of Stream Health using freshwater invertebrates asindicators of Stream Health. His study (see separate report) shows that existing OilPalm operations are having no discernable adverse effect on freshwater quality inthese two provinces. His report provides recommendations for future monitoringtechniques and frequencies. A poster on the use of such invertebrates for monitoringfreshwater stream health was also provided within the Environmental Assessment.

4. Finally an Environmental Assessment was prepared (along with supportingdocuments)

The World Bank environmental requirements are satisfied if the EnvironmentalAssessment (this report) is judged adequate and that relevant operational requirementsidentified in the EA are adequately implemented.

A review of the PNG Environmental Legislation has been carried out. TheDepartment of Environment & Conservation has indicated in writing that noenvironmental consents are needed for this program. However there is an overridingenvironmental responsibility in a "duty of care" that may require environmentalconsents to be obtained if 'Environmental Harm' occurs during the implementation ofthe program.

DEC has some Environmental Codes of Practice, including "Roads and Bridges' thatare applicable to this program. OPIC has its own environmental practices, utilizedwhen new Oil Palm sites are chosen. This guideline (and its implementation) hasbeen reviewed in the EMP attached to this Environmental Assessment.

There is a range of Conservation Legislation and International Agreements that willpotentially influence the selection of individual Oil Palm Planting sites. For the mostpart these high conservation value sites can be identified and necessary steps takenduring the site selection process.

The Chapter on Baseline Environmental Values presents discussion on physical,biological and social values in both provinces.

The Chapter on potential Environmental Impacts predicted for Oil Palm activities inthis program is largely repeated in the discussion within the EnvironmentalManagement Plan.

Significant environmental issues to be planned for in the implementation of theprogram are:

* Avoiding risk to the Queen Alexandra Birdwing Butterfly and its habitat (OroProvince); and

2

* Avoiding risk to a significant number of both formally protected andinformally identified high conservation/tourist value sites (West New Britainprovince)

Other environmental issues identified include:

* Integrated Pest Management* Protection of Community Resources such as water supply, gardens, etc.* Management of Road Maintenance activities and their Environmental Impacts* Erosion and Sedimentation Control* Fertilizer Use

Most of these risks can be limited by adequate forward planning and ongoingmonitoring of environmental impacts during the implementation phase of the project.

The Environmental Management Plan (EMP) provides specific recommendations tomanage environmental issues relating to the Oil Palm and associated roadingactivities, while the ESMF covers these topics (in less detail) for the communityenhancement program (Component 2). Specific recommendations are made withinthe EMP for environmental resources needed to ensure that the mitigation strategiesare carried out.

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1. Introduction:

1.1 Background:

The planting of oil palm has a long history in PNG, starting with plantings in the Raicoast of the Madang Province in 1894-5 (Curry et al, 2002). The NES (nuclear estateand smallholder) model was introduced in the 1 960s and has proven to be the mostsuccessful agricultural crop for the areas in which it is grown. The project inceptionenvironmental report (2003) identified key issues which contribute to the success ofoil palm as a smallholder crop viz;

* The produce is picked up at farm gate* There is a regular secure income, either fortnightly or monthly'* Establishment of VOP blocks ensures road development and maintenance2

* Oil palm is not an easily stolen product (weight for value)* It is easily grown and maintained

It is the positive issues outlined above that have caused many smallholders to changetheir agricultural production from other crops such as coffee and cocoa to oil palm.

The (2003) report also identified negative issues related to smallholder oil palmplantings, these were stated as:

* Non-collection of FFB largely due to deterioration of roads which have often notbeen planned and certainly not maintained by Provincial governments.

* Social problems associated with land tenure, migration of people from outside, eitherplanned (as with the initial LSS concept) or as a result of the success of the oil palm,increase in population over time within a limited land area available under lease andgeneral social disintegration associated with a developing economy which has nowelfare system.

* Complicated arrangements for ownership, particularly with LSS blocks but nowextending to VOP blocks.

The Project has been designed in response to stakeholders expressed needs for a moresustainable road network within which growers will have minimum disruption to thecollection of the oil palm Fresh Fruit Bunches (FFB). The Project also contains asmall component which is designed to assist local level participatory planning andcommunity involvement in decision making processes. A detailed project descriptionis given in section 2 of this report.

The Environmental Assessment (EA) has been commissioned by the Oil PalmIndustry Corporation to address any potential environmental impacts that might ariseduring the implementation phase of the Smallholder Agriculture Development Project(SADP).

' Directly into the block holders bank account, or by cheque, a key consideration and not available withother smallholder crops.2 SADP has been designed to ensure that a sustainable road maintenance fund is established.

4

OPIC has also commissioned a Social Assessment of the Project in order to addresssocial issues outlined above.

1.2 Papua New Guinea Legislative Requirements:

The EA is not a requirement of the Papua New Guinea (PNG) Department ofEnvironment and Conservation (DEC) which has determined that the project is not aprescribed activity under the Environment Act 2000 because it is an existing projectand any new Village Oil Palm Blocks are only 2 ha in area and scattered alongexisting roads which will be upgraded under the Project. Details of PNGenvironmental legislation are further discussed in section 3 of this report and the letterof response to OPIC's "notification of intention to carry out work on theEnvironmental Assessment3", is appended.

The letter from DEC does contain a note of caution however, and this EA andassociated documents which include an Environmental Management Plan (EMP) andan Environmental and Social Management Framework have been produced to satisfythe legislative requirements of both the Papua New Guinea government and the WorldBank.

In order to ensure compliance with these laws, the design of the Project includesprovision for three environmental officers (EOs) who will be based at each scheme,Hoskins, Bialla and Oro. There is also provision for a twice yearly audit of SADP byan independent consultancy firm in association with two officers from the departmentof Environment and Conservation.

1.3 World Bank Requirements:

The World Bank requires an environmental assessment of projects proposed for Bankfinancing to help ensure that they are environmentally sound and sustainable, and thusto improve decision making. SADP has been classified as a Category B project underthe World Bank's safeguard policies, Operational Policy (OP)/Bank Procedure(BP) 4.01 Environmental Assessment. This is the umbrella policy for the Bank'senvironmental safeguard policies.

This categorization is based on the scope of the Project and that potential adverseenvironmental impacts on human populations or environmentally important areasincluding wetlands, forests, grasslands, and other natural habitats are site-specific;few if any of them are irreversible; and in most cases mitigation measures can bedesigned.

The Environmental Assessment for SADP examines the project's potential negativeand positive environmental impacts and recommends any measures needed to prevent,minimize, mitigate, or compensate for adverse impacts and improve environmentalperformance.

3 The Environment Act 2000 requires all proponents of new projects to notify DEC at least one monthprior to carrying out an Environmental Assessment.

5

The EA study has identified that the other Bank Safeguard policies that need to beaddressed are Forestry (OP/GP 4.36), Natural Habitats (OP/BP 4.04), PestManagement (OP 4.09).

These operational policies are discussed in later sections of this report and mitigationmeasures are included in the Environmental Management Plan, which also containsenvironmental control measures and monitoring programs (ECMMPs) to be usedduring the implementation of the SADP.

For component 2 of the Project detailed screening and mitigation procedures areincluded in the Environment and Social Management Framework (ESMF).

Separate reports are required and have been prepared to cover indigenous peoples,(OD 4.20) the Beneficiaries Assessment Report; and involuntary resettlement (OD4.30), the Resettlement Policy Framework Report. These reports have been preparedunder the Social Assessment of the Project.

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2. Project Description:

2.1 Project Development Objective:

The development objective of the proposed Project would be to improve the livingstandards of rural communities in selected areas of oil palm growing provinces. This

will be achieved through: (a) increasing smallholder oil palm sector productivitythrough capitalizing on existing infrastructure, and (b) promoting sustainable local

governance and community participation mechanisms.

2.2 Description of each component:

2.2.1 Component 1: Smallholder Productivity Enhancement

The Smallholder Productivity enhancement component will support: (a) planting

additional oil palm blocks, each 2 ha in extent (up to 9,000 ha) along existingprovincial access roads through in-filling on land still available within the areascovered by oil palm infrastructure in response to smallholder demand (b) the

upgrading (reconstruction) of provincial access roads to existing smallholder oil palm

blocks (about 600km), and maintaining all existing and upgraded roads used for FreshFruit Bunch (FFB) collection, with the establishment of sustainable financingmechanisms for road maintenance; and (c) enhancement of smallholder productivitythrough improved extension services.

The demand for new VOP Blocks is well established and landowners and LSS Blockholders are keen to be included in the Project. It is anticipated that most new blockswill be taken up by landowners, currently residing in villages along the extensive roadnetwork (see Map of Oro Project for example) under a Clan Land Usage Agreement(CLUA). In fact villagers are already in discussion on who will have access to theblocks and ensuring that the process is inclusive (Gina Koczberski, pers com).

Some blocks will be taken up by the children of LSS settlers either under a CLUA,having intermarried with the local clan or under a Customary Purchase Blockagreement. SADP has been designed to ensure that land tenure arrangements areclarified and based on PNG law.

It is not anticipated that SADP will encourage immigration into the oil palm provincesbased on infill blocks as there is adequate demand from either existing landowners orBlock holders whose families have outgrown their LSS Blocks.

Three oil palm schemes are included in the Project; these are located at Hoskins,Bialla and Oro. The total area of established oil palm in each scheme is shown intable 2. 1, below (OPIC 2005 data):

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Table 2.1 Areas Planted to oil palm in each scheme and potential for infill:Hoskins Bialla Oro Total

Area planted to oil palm 49,955 20,722 23,281 93,958Area of smallholder blocks 23,634 13,547 14,285 51,466Potential for infill VOP 2ha 3,500 1,240 4,000 8,740blocks in hectares.Potential % increase in area of 13% 9% 28% Average 17%VOP BlocksAreafigures are in hectares.

Development of an infill block would only be considered if it met all the OPIC, DECand IDA environmental and social guidelines for development to smallholder oilpalm. These include social and socio-economic issues, topographic considerations,measures related to proximity to watercourses, preservation of protected flora orfauna, and status of impacted forest at each site. Primary forest is excluded.

An impacted forest site could only be eligible for smallholder oil palm development ifit is certain the existing human pressure would not allow regeneration of thevegetation into forest. Even though a parcel of land for infill meets environmentalguidelines, participation in the program would not be permitted if utilization of thisland would result in expansion of household garden areas into zones that wouldnormally be excluded on the same environmental grounds. Details of screeningprocedures for infill blocks is further discussed in section 5 of this report and furtherin the EMP.

2.2.2 Component 2: Local governance and community participation

The objective of this component is to develop and demonstrate sustainablemechanisms for community participation into local development, through theprovision of grants to community groups in the project areas and promotingparticipatory planning and local accountability at local government and communitylevel.

This component will promote self-reliant local development through: (a) communitymobilization, facilitated by local facilitators; (b) identification and prioritization ofactivities that would provide suitable solutions to local development constraints,through transparent processes at ward or community level; (c) participatory planningand budgeting at LLG level; (d) provision of small grant funding, with transparentconditions to ensure accountability and effective use of funds by recipientcommunities; (e) design and implementation of planned activities by the communitiesthemselves, with support from district and LLGs, local CBOs, NGOs and serviceproviders; and (f) capacity-development of CBOs, ward development committees,LLGs and province/district administration.

Component 2 activities will be carried out in two phases. Two LLGs will be selectedfor phase one in the Talasea District (WNB) and three LLGs in the Oro Province.During phase two all LLGs in the Talasea District and all LLGs in the Oro provincewould be included.

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2.2.3 Component 3: Project Management and Institutional Support

OPIC will take overall responsibility for project management, coordination andperformance of the project components. Component 1 implementation will beundertaken through OPIC and its field offices with the support of the millingcompanies and PNGOPRA.

Component 2 implementation will be managed by a management agency contractedout by OPIC to i) set up Local Coordination Teams (LCT) at provincial level; ii)select and contract consultants and service providers to carry out all capacity buildingactivities; iii) carry out M&E activities; iv) assist OPIC in management and transfer ofthe grants themselves, and manage the grant accounts at the LLG levels.

Component 3 will strengthen OPIC capacity in improving smallholder productivitythrough the provision of technical assistance and the establishment of a Monitoringand Evaluation (M&E) system; strengthen OPIC and the institutions involved inassisting rural communities to define their priority needs, and the capacity of serviceproviders to respond to these needs; and through OPIC provide support to andcoordinate with existing HIV/AIDS awareness/prevention campaigns in the projectarea.

Environmental monitoring will also be supported in close coordination with theDepartment of Environment and Conservation (DEC).

To ensure a strong community ownership and participation, special attention will begiven to incorporate gender-balanced activities in the various project components aswell as consultation mechanisms for various indigenous groups.

9

3. Legislation, Regulations, International Agreements, Codes ofPractice and Policies

3.1 Environmental Legislation:

Introduction:

Environmental Management in Papua New Guinea is predominantly covered by theEnvironment Act 2000. Prior to 2004 other Environmental Acts (now repealed) werein force. Environmental consents from that era still survive.

Environment Act 2000

Introduction:

On I" January 2004 New Environmental Legislation in Papua New Guinea wasenabled by Parliament. Despite nearly 3 years operations under the new Act, someuncertainties still exist as to the meaning of relevant clauses.

Overriding Consideration:

These is a specific public duty imposed on all developers, that of "EnvironmentalCare". Developers are required to exercise due environmental care in all theiractivities. One particular consequence of this duty is that environmental permits arerequired if environmental harm is caused, as a consequence to their activities, even ifthe Act otherwise appears to exclude the need for such consents.

Environmental Harm is defined in the Act to mean any change to the environment,which has a detrimental effect on any beneficial values relating to that environment;caused either by commission or omission, either direct or indirect. Some examplesare provided.

Licensing System:

Under earlier legislation there was a semi-voluntary (Environmental Plan) licensingprocedure for major developments, with parallel permits compulsory for all uses ofwater (abstraction, discharge and use of watercourses).

There is now a three (3) Level Environmental Licensing System as follows:

Level 3 Activities:

Activities that are:

Either i) of national importanceOr ii) could cause significant environmental harm

10

Or iii) Capital cost of more than K 50 million4

Require a detailed Environmental Impact Statement (E.I.S) and a subsequentEnvironmental Permit.

Level 2 Activities

Activities that could cause a lesser risks of environmental impact.These developments only require Environmental Permit Applications.Some applications are advertised for public input, some are not. TheRegulations set out Level 2 (and Level 3) activities in specific detail.

Level 1 Activities

Activities that will have little or no Environmental Impact; arecovered by guidelines or general authorizations (or not covered byany criteria at all).

The difference between the old system and the new; is that the old system oftenrequired both an Environmental Plan Application and Water Use Permits. The newsystem now requires a single "Environmental Permit" for all Category 2 and 3projects (but without the previous "Voluntary" discretion used by both theDepartment and Developers).

In all cases the New Act provides:

For Policies (yet to be developed) to be much more specific as to activities andlocations that define the scope of Level 1, 2 and 3 Activities in more detail.

The development of a Policy is a lengthy matter that requires formal publicconsultation. This procedure is based on several Australian State EnvironmentalPolicy concepts. After nearly 3 years no draft policy has yet emerged (except forplastic bag management).

Policies can cover an extremely wide range of matters, including imports, types ofpollutants, management of catchments, technology etc.

At this stage, until more comprehensive policies are developed, the Department ofEnvironment & Conservation officials currently require that the licensing categoriesand procedures follow closely the established procedures under the old EnvironmentalPlanning Act and Water Resources Act. Some of the new applications now have to beadvertised, which was not the case previously.

The new Legislation (Environment Act 2000) now requires "Environmental Permits"to be obtained for a specific range of activities. The basic activities relevant to OilPalm Activities requiring new Environmental Permits are -

4 This particular project is treated as a series of individual smallholder projects each involving theplanting of 2 ha of oil palm, with a capital cost of about K3800 per Block, as such they are to be treatedas level I activities under the Environment Act 2000.

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* Land clearing of more than I OOOha* Palm Oil Mills producing more than 5000 t.p.a* All projects with a capital cost of more than K50 million (see footnote 2 on

page I 1)

Note: This schedule is not complete (refer regulations for complete detail) and iscurrently undergoing revision by the Department of Environment and Conservation atthe present time.

Activities that were already in place by the end of 2003 are deemed to have an"Environmental Permit" already,

Any significant changes to existing processes now require an "Amendment to anEnvironmental Permit" application to be prepared and approved.

Where operations had, or should have had, a Water Use Permit prior to 2004, theseoperations are now regarded by DEC as needing an Environmental Permit for each ofthose separate activities. Furthermore, the Department of Environment &Conservation is now expecting all other waste discharges to air - (i.e. odors, steam,exhaust gases, noise) or to land; to obtain Environmental Permits as well.

When the Department of Environment & Conservation issues Environmental Permits,it usually expects a range of follow up activities to be designed and implemented ineach case, including:

* Detailed Waste Management Plans for all wastes* Environmental (and process) Monitoring Programs* Regular Reporting of Environmental Monitoring Programs to DEC (usually

on an annual basis)

For new projects detailed procedures now exist in the new Environment Act 2000 fornotification of any new projects being considered and for the obtaining of relevantEnvironmental Permits.

Costs:

The Department of Environment & Conservation has regulations covering applicationfees and annual fees. A wide range of fees is now applicable, including bothapplication fees and annual fees.

Environmental Levies and Bonds:

The new Act makes specific provision for Environmental Levies (to cover the costs ofgovernment services to developers) and Environmental Bonds (as insurance againstthe financial inability of the developer to mitigate any environmental problems). Theprocedures have not yet been developed.

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Compensation:

The provision for environmental compensation included in the Water Resources Acthas been continued.

Water Investigation Permits:

The need for such permits is continued in the new Act.

Drought Actions:

The ability of the Director to suspend or reduce permits for Water Uses is continuedin these circumstances.

Water Control Districts:

These have now been deleted, but presumably could be continued by the developmentof appropriate policies and regulation.

Financial Penalties:

The financial penalties have now been increased significantly, and now makeprovision for jail sentences, for senior company officials and directors for somecategories of environmental offences.

Environmental Upgrade Programs:

New provisions have been included to enable substandard environmental processesand procedures to be upgraded. If, for example, a problem is seen with aerialemissions at a factory, now provision exists for notices to be served and an upgradeprogram to be required.

Conclusion:

The new Act has now been operational for nearly 3 years. There is much morecorporate risk and responsibility under the new Act. The licensing procedures aregenerally similar to the existing procedures but now all waste discharges; (to air, landand water) need formal licensing, whereas before only waste discharges to water waslicensed.

The financial charges have increased.

There is a new legal process for an upgrade of environmental treatment in particularcases where these processes are judged deficient in some respect.

Most of the provisions under the old acts have been carried over.

There is uncertainty about the specifics of the various environmental policies that willbe developed over the coming months and years.

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The Department of Environment & Conservation has reviewed the scope of worksenvisaged for the program, from data supplied by OPIC. A letter (attached) by theDepartment indicates that No Environmental Permits are needed for the scope ofworks envisaged.

However, there still remains the duty of environmental care. The project is not tocause environmental harm. If such harm occurs, then environmental permits will berequired, notwithstanding the exchange of correspondences with the Department.

The requirements of the PNG legislation have been covered by this EnvironmentalAssessment, the Environmental Management Plan and the Environmental and SocialFramework documents.

3.2 World Bank - Environmental Requirements

The World Bank's Environmental Assessment (EA) policy states quote5 "The EA,takes into account the natural environment (air, water, and land); human health andsafety; social aspects (involuntary resettlement, indigenous peoples, and culturalproperty); and transboundary and global environmental aspects. EA considersnatural and social aspects in an integrated way. It also takes into account thevariations in project and country conditions; the findings of country environmentalstudies; national environmental action plans; the country's overall policy framework,national legislation, and institutional capabilities related to the environment andsocial aspects; and obligations of the country, pertaining to project activities, underrelevant international environmental treaties and agreements. "

Section 7 of the WB's Environmental Policy states "Depending on the project, arange of instruments can be used to satisfy the Bank's EA requirement. environmentalimpact assessment (EIA), regional or sectoral EA, environmental audit, hazard or riskassessment, and environmental management plan (EMP). EA applies one or more ofthese instruments or elements of them, as appropriate. "

In terms of environmental screening, quote "a proposed project is classified asCategory A if it is likely to have significant adverse environmental impacts that aresensitive, diverse, or unprecedented. "

In view of the above, it is considered that the proposed SADP satisfies the definitionof a Category B project which is defined as quote "A proposed project is classified asCategory B if its potential adverse environmental impacts on human populations orenvironmentally important areas-including wetlands, forests, grasslands, and othernatural habitats-are less adverse than those of Category A projects. These impactsare site-specific; few if any of them are irreversible; and in most cases mitigatorymeasures can be designed more readily than for Category A projects. The scope ofEA for a Category B project may vary from project to project, but it is narrower thanthat of Category A EA. Like Category A EA, it examines the project's potentialnegative and positive environmental impacts and recommends any measures needed

See also section 1. Introduction.

14

to prevent, minimize, mitigate, or compensate for adverse impacts and improveenvironmental performance. "

The Environmental Assessment process is variable in scope, depending upon thenature of the project and its potential environmental impact.

In this particular case the Environmental Assessment is expected to be structured as

follows:

i) Executive Summaryii) Policy Legal and Administration format (following Department of

Environment & Conservation and World Bank Guidelines).iii) Project Descriptioniv) Baseline Datav) Environmental Impacts Anticipated

This Environmental Assessment addresses the particular World Bank requirement for

this Project.

The World Bank also requires a variable selection of follow up studies and reports

depending upon the perceived environmental issues, their scale and impacts. Such

studies can include an Environmental Impact Assessment, an Environmental Audit, aHazard Risk Assessment or an Environmental Management Plan. In this case the

Bank has required the preparation of an Environmental Management Plan (EMP) andan Environmental and Social Management Framework (ESMF). These two mattersare addressed in separate reports.

The EMP must include:

* Mitigation;• Monitoring, and;* Institutional Measures

Particular attention is to be paid to:

* Protection areas and species, especially the Queen Alexandra BirdwingButterfly

* Provision of an Integrated Pest Management Plan (IPM)

The EMP is to address the component I activities (road reconstruction and Oil Palm

activities) while the ESMF is to address environmental issues related to other basicinfrastructure and its delivery through community participation.

The Environmental requirements of the World Bank are addressed in thisEnvironmental Assessment, and the Environmental Management Plan and theEnvironmental and Social Management Framework.

15

3.3 Conservation Legislation:

PNG has a range of Conservation Legislation. Most of it is 20-30 years old and inneed of overhaul. Of some relevance to this project are the following Acts andPolicies Regulations, Guidelines.

1. Fauna (Protection and Control) Act

Certain animal species, especially including the Queen Alexandra BirdwingButterfly are fully protected. This Butterfly cannot be damaged or harmed inany way. The protection of its habitat is less clear, but sensibly, it is importantnot to destroy its obvious environmental needs.

2. National Parks Act:

This Act provides a process for the establishment of National Parks. There isone block of land (Lorko) in West New Britain that is half way through theestablishment process as a National Park. It has been approved by LandsDepartment for reserve purposes, and is now waiting for approval under theNational Park Act. As proposed National park, Lorko will not be affected bySADP.

3. Wildlife Management Areas (Fauna Protection Act):

This Act provides for the establishment of areas of customary land as WildlifeManagement Areas. Local communities are established (and gazetted) andoperational rules are prepared and approved (which must be compatible withthe purpose of the Act). There are several Wildlife Management Areas inWest New Britain Province and Oro Province, either approved or proposed.

4. Provincial Legislation:

The West New Britain Provincial Government has enacted a Tourist SitesProtection Act (1993). A copy of this Act has not been obtained, but aschedule of sites nominated for protection purposes exists (copy attached).Most are not defined as to size and may be under some risk from developmentof all types. No similar legislation appears to exist in Oro Province.

5. Conservation Areas Act

This Act provides for the establishment of protected conservation areas. Nosuch Conservation Areas exist in either Oro or West New Britain Provinces.Some Areas may be under consideration and are at different stage ofestablishment by landowners, NGOs (on their behalf) and/or DEC (as is thecase for Wildlife Management Areas).

6. Watershed Protection Areas:

Under the old Water Resources Act (now repealed) there was provision toprotect portions of watersheds for water yield or Water Quality purposes,

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usually associated with Urban Water Supply Catchments (such as the upperLaloki). The new Environment Act does not specifically provide for suchmeasures but policy development provisions exist, which have not yet beendeveloped. No such areas were previously determined for either Oro or WestNew Britain Provinces.

7. The Convention on International Trade in Endangered Species of flora andfauna (CITES):

CITES is an Intemational agreement, which prevents or regulates the export ofdesignated species of Fauna and Flora. The Queen Alexandra BirdwingButterfly is in Appendix I (export prohibited). Crocodile products are inAppendix II (export controlled). Numbers of other endangered species inPNG are also included.

8. Biodiversity Convention:

PNG has adopted the Convention on Biodiversity. However, no newlegislation is currently being promoted, the DEC view being that existinglegislation is (more or less) adequate.

9. Ramsar Convention:

PNG is signatory to an international agreement, the Ramsar Convention, toprotect specially designated wetlands (Ramsar Sites). No Ramsar sites areknown or proposed in either Oro or West New Britain Provinces.

10. Conservation Planning:

In recent years a number of planning reports have been produced by DEC andother agencies that include areas that merit protection for conservationpurposes. Several of these areas have been identified in West New Britain(and Oro Provinces). While some of these areas are not formally protected,such areas do have high conservation values and warrant consideration.Boundaries are usually not defined.

3.4 OPIC Policies

OPIC historically has had a policy that the selection of new Smallholder Oil Palmblocks is examined through a schedule of criteria (environmental and otherwise).This criterion has been implemented variably from one location to another. Thisenvironmental process has reviewed those criteria.

More recently OPIC, together will palm oil milling companies in the project areas,has committed to the implementation of the Principles and Criteria of the Roundtableon Sustainable Palm Oil (RSPO), which, in the near future, will tighten criteria forsuch site selection within the framework of an independently audited system (seeAppendix).

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3.5 Round Table of Sustainable Oil Palm

By 2006, all of Papua New Guinea's palm oil milling companies and PNGOPRAwere members of the Roundtable on Sustainable Palm Oil (RSPO); OPIC has made acommitment to join the RSPO. Membership entails an adoption of the Principles &Criteria of the RSPO (see appendix 5). These Principles & Criteria ensurecommitment to:

* Transparency

* Compliance with all applicable national and international laws andconventions

* Adoption of best practices

* Environmental responsibility and conservation of natural resources &biodiversity

* Responsible consideration of employees, individuals and communitiesaffected by growers and mills

* Environmentally and socially responsible development of new plantings and;* Commitment to continuous improvement.

PNG is taking a lead in developing the RSPO Principles & Criteria into a managedauditable system. PNG has an active National Implementation Working Group(NIWG) that is tasked with doing this. The NIWG comprises the milling companies,PNGOPRA, OPIC, Government (DEC), and NGOs.

All aspect of the RSPO and its implementation are published on the RSPO website;www.rspo.org

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4 Baseline Environmental Survey

4.1 Introduction

This chapter deals with the existing biophysical and socioeconomic environment. Ittakes into account other development activities (current) and other environmentalpressures within the same areas as the SADP.

4.1.1 Methodology Used to collect baseline Data

The baseline data for the existing biophysical and socioeconomic environment hasbeen collected from variety of sources. These are:

* Stakeholder consultation and interviews.* Field surveys.* Review of literature.

a) Stakeholder consultations were held and in Port Moresby in July 2006. A range ofpeople were consulted including: churches, oil palm block holders, landowners,Environmental NGOs, provincial and district public servants, women'srepresentatives and OPIC officers, Department of Environment and Conservation.In addition several others were consulted by telephone interview or email. Thisincluded schools, health facilities, government officials and others that could notbe met with during field visits. In addition a public workshop was held in July forinterested stakeholders. (The workshop meeting report is attached as an Appendixto this Environmental Assessment report).

b) Field surveys were carried out into freshwater watercourses in the project areas byconducting stream sampling to assess the status of freshwater water quality insmallholder oil palm block areas. Samples were taken in forest streams forcomparison purposes. During the freshwater survey observation of terrestrial floraand fauna were also made.

c) Some information is from Douglas Environmental Services' knowledge of someof the issues from years of experience working in PNG.

d) An extensive review of available of literature was carried out. Use was made ofEnvironmental Plan application submitted for oil palm developments in Oro andWest New Britain (These all detail socioeconomic and biophysical environmentsin the same area as the SADP) .Other reports on smallholder oil palm wereconsulted where relevant and use was also made of media reports, internetresources etc. Authoritative texts on fauna were used, also old publications put outby the former PNG Wildlife Division.

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4.1.2 Reliability of Data

The most reliable data is of course that obtained first hand, i.e. stakeholder interviewsand field surveys. The remaining data if from reports is perhaps now dated, Censusdata for example is now 6 years old, Environmental Plan Applications are also a fewyears old, and some are of better quality than others.

4.2 Physical Environment

4.2.1 Climate

Average rainfall for the coastal region for the Talasea District of West New Britain is3.700 mm per year. The wettest months are from December to April when meanrainfall is 500 mm per month. For other months the mean rainfall is 180 mm permonth. Daily temperatures range from a minimum of 220C to a maximum of 34 C.The average annual sunshine is about 1,950 hours.

The prevailing winds are north-westerly during the wet season and south-easterlytrades from June to October.

In Oro Province, the Popondetta plains area is "tropical rainy" and lacks a pronounceddry season. South east trade winds dominate from May to October with North-westerly winds dominating from December to March. The mean annual rainfall isabout 2700 mm. Temperatures are uniform throughout the year ranging fromminimum of 220C to a maximum of 310C. Annual evaporation is estimated to beabout 1500 mm. Relative humidity is high and varies between 83% at 9.00 hrs and69% at 15.00 hrs.

The Kokoda area is "wet tropical". Being at higher altitude and further inland fromthe sea has different climate from the Popondetta plains area. South-easterly tradewinds dominant from May to September with north-westerly winds dominating fromNovember to March Mean annual rainfall is much higher than on the Popondettaplains being about 3900 mm. Maximum annual rainfall of over 5200 mm wasrecorded in 1998 and a minimum of about 3000 mm in 1981. The average dailytemperature ranges from a minimum of 22 °C to a maximum of 30 °C. Sunshine hoursfrom in February 2006 were as low as 47 hours for the whole month.

PNG is susceptible to El Nino events. There was a severe event in 1997 which causedmajor drought in all regions of PNG. At other times extreme rain events can causeflooding and major infrastructure damage. This happened in West New Britain in2002.

4.2.2 Geology

All oil palm growing areas are near active or dormant volcanoes and the geologyreflects this.

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The areas are relatively uniform comprising volcanic ash, to various depths, andagglomerate, overlain by lava flow. There have been subsequent alluvial movementson the lower reaches.

4.2.3 Geomorphology

Generally the oil palm growing areas are on flat to gently sloping ground from nearsea level to 80 m above sea level. At Kokoda, being inland, the altitude is higher at400 m above sea level. Alluvial plains, containing volcanic material, are made up of aseries of terraces which are dissected by a dense network of shallow steep-sidedvalleys

Flatter areas and areas near rivers are subject to flooding.

4.2.4 Soils

Soils in the oil palm growing areas of Oro and West New Britain Provinces aregenerally dark coloured volcanic ash soils usually overlying yellowish brown sandyclay loam subsoils. In Kokoda the lower terraces consist of shallow volcanic ash overalluvial soils and gravel and the river terraces are shallow alluvial soils overlayingdeep gravel

The soils are very fertile. They are generally of low bulk density and moderatelyerodable due to their poor structure (highly friable). During high rainfall on steepareas or areas with no ground cover sheet and gully erosion can be expected.

Soils range from well-drained to poorly-drained. In West New Britain, the areasaround the Kulu Dagi Oil Palm Estate and Mamota areas are subject to inundation dueto the presence of a high water table. The Mamota smallholder block area isestablished on drained swampland.

During high rainfall on steep areas or areas with no ground cover sheet and gullyerosion can be expected.

4.3 Biological Environment

4.3.1 Terrestrial Flora

Oil Palm Growing Areas

Oil Palm in Oro and West New Britain Provinces is grown on the foot slopes ofvolcanoes. The land on which it grows is well to imperfectly drained alluvial plainsand gently sloping undissected fans. Some areas of swampland have been convertedto oil palm. The main forest type that occurs in the oil palm growing area is large tomedium crowned forest. This forest type is a tall forest with a canopy height of 30 to35 metres and with emergent trees of up to 50 metres in height.

Not much of this type of forest remains and much of that does is highly disturbed.Much of the oil palm growing areas have already been converted over the past 30years and also the areas have been subject to selective logging for much longer.

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In Oro on the Popondetta Plains the vegetation is more complex with extensivegrasslands with well defined small parches of forest. The grasslands have remainedmuch the same since before the Second World War, whether they are caused byhuman activity or not is unclear. Commercial oil palm operations are successfullyconverting grassland to oil palm.

Volcanic eruptions have also had their own affect on the vegetation. The MtLamington eruption in 1951 destroyed 175 square kilometers of forest. It has alsobeen noted by that after 30 years primary forest had become re-established in the area(Mercer 1999).

Undisturbed Forested Areas

The species composition is mixed with the main species of tree being Pometiapinnata, Octomeles sumatrana, Ficus sp, Alstonia scholaris, Terminalia spp, - othercommon genera are Pterocarpus, Artocarpus, Planchonella, Canarium, Elaeocarpus,Crytocarya, Celtis, Dracontomelum, Dysoxylum, Syzgium, Vitex, Spondias & Intsia. -The proportion of deciduous trees is higher in areas with pronounced dry season.

As discussed above there is very little undisturbed forest of this nature within theproject areas. The remnant forests on the Popondetta Plains have mostly been loggedat some time in the past, though such areas are still important habitat, especially forBirdwing Butterflies.

In West New Britain there are important areas of forest remaining. Pokili and GaruWildlife Management Areas still support largely intact areas of forest, totaling about18,000 hectares. In Garu there are large areas of sago swampland. Also parts of theKulu Dagi area contain substantial intact forest.

Logged over Forest

In logged over forest there is a much greater ground cover from herbs creepers, vinestree seedlings (the most common ones being Pometia sp). The canopy is more openand the tree species that are common include Anthocephalus, Calophyllum, Syzigium,Myrstica, Licuala, Calamus. Macaranga is very common in larger openings

Secondary regrowth

Areas that have been cleared for gardening take about ten years before primary foresttree species begin to dominate again. After 1 to 2 years the dominant species areHomalanthus and Macaranga. After 4 to 5 years the dominant species are Ficus spp,Dendrocnide, Zinziberaceae, a range of herbs and shrubs are also dominant. Thefollowing species of herbs and shrubs were noted during field visits to secondaryregrowth areas in June/July 2006:

Grasses and sedges including Cyperus sppBambusa sppAlpinia oceanicaA lpinia sppMomordica charantia

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Piper aduncumEuphorbia sppPhyllanthus niruriPuearia spMimosa sppCassia alataHyptis capitataSida spAgeratum conyzoidesChromolaena odoratumMikania micranthus

(These species were common to both provinces and are very widespread)

By the tenth year Myristica sp and other primary forest trees become dominant.

Invasive Species

Some of the exotics species are noxious and can cause major problems. The "Daka"tree (Piper aduncum) is very fast growing and will quickly grow on cleared areas. Itforms medium sized bush which shades out a fairly large area and prevents treeseedlings from growing, thereby slowing down the process of regeneration. Anotherspecies Chromolaena odaratum forms dense thickets and makes access difficult,chokes out other species and is a fire hazard. Mimosa sp also form dense thickets andprevents access.

The water hyacinth (Eichhornia crassipes) was noted on the Dagi River near thebridge on the highway into Kimbe. This can form dense masses of floating plantmatter and can seriously impede river traffic and damage fish stocks. By law thisplant should not be transported to other areas and any occurrence in new areas has tobe notified to National Agriculture Quarantine and Inspection Authority (NAQIA).

4.3.2 Terrestrial Fauna

4.3.2.1 Invertebrates

Molluscs

No information on native terrestrial molluscs is available. Though land and tree snails(Families: Camaenidae and Helicarionidae) should be present.

The introduced Giant African Snail (Achatinafulica) is however very common at bothsites and is regarded as a nuisance by locals due to its impact on gardens. In recentyears in Oro there was a massive die back of the snail according to locals (the smellwas apparently overpowering in the gardens), and the snails, while still present, arenot as common as they used to be.

Collections of aquatic snails were however made in both project areas and details ofthese are covered in more detail under the aquatic fauna section.

Crustacea

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A range of small terrestrial crustaceans, family Isopoda, are associated with leaf litterand soil. These are very important being detritivores they ensure the rapid breakdownof organic material, replenishing soil nutrients. Their status in oil palm blocks isunknown, though if there is abundant organic matter they will be present.

Insects

Insects represent the largest group of terrestrial fauna. Various studies have beencarried out on different groups mostly of pest species and species of commercialvalue.

Commercial Butterflies and Moths

Oro Province was one of the early provinces to make money from trading in butterflyspecies the type of commercial species found, and their abundance, on the PopondettaPlains are shown in the following table.

Table 4.1: Commercial Species of Butterfly Observed on the Popondetta Plains(from Clark 1999)

SPECIES SPECIES (CONT.)Papilionidae Doleschallia hexophtalmusOrnithoptera alexandrae6 Doleschallia dascylusOrnithoptera priamus Parthenos sylviaTroides oblongomaculatus Phalanta alcippePapilio ulysses Phaedyma sherphdiPapilio aegus MorphinaePapilio ambrax Taenaris bioculatusPapiliofuscus Taenaris myopsPapilio euchenor Taenaris catopsGraphium macfarlanei Taenaris artemisGraphium saepedon DanainaeGraphium eurvpylus Euploea nemertesGraphium wallacei Euploea wallaceiGraphium aristeus Euploea eurianassaGraphium agamemnon Danaus philenePieridae Parantica schenkiiDelias ladas LibytheinaeDelias mysis LibYthea geoffroyiDelias aruna SatyrinaeDelias gabia Mvcalesis phidonAppias celestina Mycalesis duponcheliCepora perimale TellervinaeCatopsilia Pomona Tellervo zoilusEurema hecabe AcraeinaeNymphalidae Acraea meyeriVindula arsinoe LycaenidaeMynes geoffroyi Hypolvaena phorbisPrecis erigone Danis danisHypolimnas bolina Moths commercialHvpolimnas alimena Alcidis agthvrus

6 This particular species cannot be legally traded due to its listing under Appendix I of the CITESConvention. Illegal specimens do occasionally end up for sale overseas.

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Hypolimnas deois Nyetalemon arontes

Cvresti acilia Millionia sppCyresti achates Macroglossum spp

Ployura jupiter

The Rare Papilionidae - Birdwing Butterflies

The main group of butterflies of concern is the Birdwing Butterflies; they are subjectto pressure both from collectors and habitat destruction. Of the 9 species - all butthree are endemic to New Guinea, one the World's largest, Queen Alexandra'sBirdwing Butterfly, (Ornithoptera alexandrae), (QABB), with a wingspan of morethan 25cm, is found only in the Oro Province. Unfortunately much of its habitatoverlaps areas suitable for Oil Palm.

The Birdwing Butterflies, with the exception of the common Birdwing Butterfly,(Ornithoptera priamus), have been declared as protected fauna under the Fauna(Protection & Control) Act Chapter 154. All of the species are also listed underAppendices of CITES, including 0. priamus. The QABB is listed under Appendix Iwhich prohibits all trade in this species. The others are listed under Appendix 2 whichdoes still allow international trade provided the trade is 'non-detrimental' to thespecies survival. PNG enforces its obligations under CITES through the InternationalTrade (Flora & Fauna) Act.

The Queen Alexandra Birdwing Butterfly (QABB) was first collected in 1907supposedly in the Kokoda area (Parsons 1992), though none have ever been foundthere since. Currently it is found only in three locations within a 50 km radius ofPopondetta.

* Popondetta Plains

* Managalese Plateau

* Cape Ward Hunt

Since the cessation of the Oro Conservation Project in 1999 little work on QABB hasbeen undertaken. Assets in Afore have been stripped, with only the cement basesremaining of the former buildings (Malaisa per com). Eddie Malaisa, the ProvincialWildlife Officer, with assistance from Higaturu Oil Palms has done some limited fieldvisits, mainly to proposed Wildlife Management Areas. Also the PNGOPRA office inOro has been producing food plant vines by tissue culture.

The threats to the species

* Oil Palm 1976 cleared large areas of primary and secondary forest ofimportance to QABB

* There is a record of large scale industrial export logging, particularly in theKumusi, Saiho and Saiho extension Timber Rights Purchase areas (and also inother areas of the Popondetta plains), taking place beginning in the late 1970s,and with plans to continue

* Influx of people due to the logging and oil palm

* Population growth

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* Illegal collecting

The smallholder developments are not taking place in the Afore or Cape Ward areasand these populations will not be affected.

4.3.2.2 Vertebrates

Reptiles

Reptiles are an important component of the biodiversity in both project areas. Theserange from species of commercial importance such as the crocodile (dealt with underAquatic Fauna), to others that affect human health such as the venomous snakes toothers which are small and less noticeable but none the less important due to theirplace in the food chain.

Snakes

Several Species of snakes are found in West New Britain. Most of the snakes are non-venomous and only two are only mildly venomous. The majority of the snakes feedon small mammals, lizards or frogs. Keelback snakes which live near water or inswamp areas of the project area are the only snakes able to feed on the cane toad, Bufomarinus, without being poisoned.

Many of the snakes are widespread occurring on the mainland and further a field.Three are endemic to the Bismark region only, these are

* Bismark Ringed Python: Bothrochilus boa* New Britain Keelback: Tropidnophis hypomelas* Bismark Keelback: Tropidnephis dahlia

All of the snakes survive in a variety of habitat from rainforest to disturbed areas suchas coconut and cocoa plantations (no data on oil palm) and gardens. One, the FileSnake, Acrochordus granulatus, feeds on fish and crabs and lives in mangroves andinland freshwater grass swamps.

The Oro Province being on the mainland has more snake species than West NewBritain. As with the snakes on West New Britain most of the species occupy a rangeof habitats including disturbed ones and most feed on small animals such as lizardsand frogs. However some (such as boas and pythons) are able to eat large animalssuch as wallabies and bandicoots. Keelback are also found in Oro.

Venomous species are present, some are only mildly venomous (such as CrownedSnakes and Forest Snakes) but two are highly venomous. These are the Death Adder(Acanthophis spp) and the Eastern Brown Snake (Pseudonaja cf textilis). Death Addersnake bites have been reported at Kokoda.

Lizards

A range of lizards are found in both provinces these include Monitor Lizards(Varanidae) 2 species in Oro Province and I in West New Britain Province. Dragon

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Lizards (Agamidae) 2 species in Oro Province and I in West New Britain Province.

Geckoes (Geckonidae) 3 species in Oro Province and 2 in West New BritainProvince. Skinks (Scincidae) 25 sp in Oro Province and 16 in West New BritainProvince mostly species of the genera Emoia and Sphenomorphus spp 8 Oro, 6

WNBP. Varanids are also regarded as endangered internationally and are listed on

Appendix 2 of CITES.

Birds

About 60 species of bird are to be found in the coastal areas of West New Britain, out

of the nearly 200 species found throughout the island. There are twelve New Britain

endemics of limited geographic distribution, eight of these are found in lowland areas.Most of the West New Britain lowland birds are adapted to both primary andsecondary forest.

Blythe's hombill, protected under the Fauna (Protection and Control) Act Chapter154, is found in forested areas of coastal West New Britain where it feeds on fruit. Itis found flying in open areas while foraging for food.

Table 4.2: Birds of Lowland West New Britain (Hoskins area)7

FREGATIDAE AEGOTHELIDAELesser Frigatebird Fregata ariel Feline Owlet-nightjar Aegotheles insignis

Great Frigatebird Fregata minor HEMIPROCNIDAEACCIPITRIDAE Moustached Tree-Swift Hemiprocne mystacea

Crested Hawk Aviceda subcristata APODIDAEMEGAPODIIDAE Uniform Swiftlet Collocalia vanikorensis

Volcano Scrubfowl Megapodius eremita Mountain Swiftlet Collocaliahirundinacea

RALLIDAE White-rumped Swiftlet Collocalia_spodiopygius

Bush-hen Amaurornis olivaceus Glossy Swiftlet Collocalia esculenta

CHARADRIIDAE Papuan Spine-tailed Mearnsia novaeguineaeSwift

Pacific Golden Plover Pluvialisfulva ALCEDINIDAELARIDAE Collared Kingfisher Halcyon chloris

Crested Tem Sterna bergii Sacred Kingfisher Halcyon sancta

COLUMBIDAE MEROPIDAESlender-billed Cuckoo-Dove Macropygia amboinensis Rainbow Bee-eater Merops ornatus

Black-billed Cuckoo-Dove Macropygia nigrirostris BUCEROTIDAE

Pied Cuckoo-Dove Reinwardtoena brownii Blyth's Hombill RhYnceros plicatus

Stephan's Ground-Dove Chalcophaps stephani SYLVIIDAE

Superb Fruit-Dove Ptilinopus superbus Australian Reed Warbler Acrocephalus austrabis

White-breasted Fruit-Dove Ptilinopus rivoli RHIPIDURIDAE

Knob-billed Fruit-Dove Ptilinopus insolitus Northem Fantail Rhipidura ruf ventris

Red-knobbed Imperial Ducula rubricera Willie Wagtail Rhipidura leucophrys

PigeonGrey Imperial Pigeon Ducula pistrinaria MYIAGRIDAE

Finsch's Imperial Pigeon Duculafinschii* Black-tailed Monarch Monarcha verticalis

Black Imperial Pigeon Ducula melanochroa Shining Flycatcher Mviagra alecto

Torresian Imperial Pigeon Ducula spilorrhoa DICAEIDAE

PSITTACIDAE Bismarck Flowerpecker Dicaeum eximlum

Rainbow Lorikeet Trichoglossus NECTARINIIDAEhaematodus

Eastem Black-capped Lory Lorius hypoinochrous Black Sunbird Nectarinia aspasia

Blue-eyed Cockatoo Cacatua o phthalm ica * ZOSTEROPIDAE

7from a 1998 Bird Spotting Tour

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Buff-faced Pygmy-Parrot Micropsitta pusio Black-headed White-eye Zosterops hrvpoxanthusSinging Parrot Geoffroyus heteroclitus MELIPHAGIDAEEclectus Parrot Eclectus roratus Ashy Myzomela Mvzomela cineraceaCUCULIDAE Black-bellied Myzomela Mvzomela

ervthromelas *Channel-billed Cuckoo Scythrops New Britain Friarbird Philemon cockerelli

novaehollandiaeViolaceous Coucal Centropus violaceus ESTRILDIDAEGreater Black Coucal Centropus menbeki Buff-bellied Mannikin Lonchura melaenaPied Coucal Centropus ateralbus STURNIDAESTRIGIDAE Singing Starling Aplonis cantoroidesNew Britain Boobook Ninox odiosa* Yellow-faced Myna Mino dumontuiCAPRIMULGIDAE CORVIDAELarge-tailed Nightjar Caprimulgus mnacrurus Torresian Crow Corvus orru* New Britain endemics

Of the endemics Duculu finschii and Ninox odiosa are intolerant of very disturbedhabitat. Their presence at the Pokili Wildlife Management Area is therefore a goodsign that the integrity of the area is still intact.

Mainland New Guinea has a much larger number of bird species (over 700) than theisland provinces.

Mammals

Marsupials

In Oro Province there are nine species of marsupials these include the bandicoots,which are hunted by the local people, particularly in the grasslands, and cuscus,possums, sugar gliders and a tree kangaroo. (A full listing is shown in the tablebelow.)

Table 4.3: Non-Volant Ma rsupial Mammals known to occur in the Oro Province.Family Species Common NameAcrobatidae Distoechurus pennatus Feather-tailed PossumMacropodidae Dorcopsis luctuosa Grey Dorcopsis (tree

kangaroo)Peramelidae Isodon macrourus Northern Brown

BandicootPeroryctidae Echymipera kalabu Common Echymipera

Echymipera rufescens Longed-nosed EchymiperaPeroryctes broadbenti Giant Bandicoot

Petauridae Dactylopsila trivigata Striped PossumPetaurus breviceps Sugar Glider

Phalangeridae Phalanger intercastellanus Southern Common Cuscus

All Dorcopsis species are protected under the PNG Fauna (Protection and Control)Act Chapter 154.

Due to its island status West New Britain has a lower number of marsupials than themainland. Some of these may have been introduced by man in ancient times. Thespecies found are the Cuscus (Phalanger orientalis), the Northern PademelonWallaby (Thylogale browni), the bandicoot (Echymiptera kalabu) and the sugar glider

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(Petaurus breviceps). None of these species are uncommon and all are found on the

mainland.

Placental Mammals (Non Volant)

These are represented by rodents and the feral pig.

Of the rodents listed, at least two are introduced, the pacific rat in prehistoric times

and the black rat more recently since contact with Europeans. The black rat hasbecome a major pest of the oil palm industry. The owl has been used successfully inMalaysia and has reduced the need to use chemical poisoning considerably. Higaturu

Oil Palms established "nurseries" for owls on one of their estates, but due to

vandalism had to abandon the idea. However owls have become established in the oil

palm blocks.

The pig was probably introduced into Melanesia 3,500 years ago by man. It is now

very widespread throughout the country, both on the mainland and on island

provinces, and plays an important part in all local culture. Feral pigs are hunted in the

grassland and cleared areas within the project areas. It is not clear to what extent the

pig utilizes remnant forest areas, but it is likely that their foraging takes them into

these areas. In Oro the extent of any damage, if any, that pig foraging causes to

QABB food plant vines by uprooting them or chewing on stems is unknown.

However damage may not be significant as three of the proposed WMAs, which were

selected because they were in areas known to have QABB populations, are located

around the village of Girigirita, which is known locally for the large number of pigs

the local people keep. Obviously the food plant vines here are not affected byforaging pigs.

Table 4.4: Non-Volant placental mammals OroMuridae (Rodents) Chiruromys forbesi Forbes' Tree Mouse

Hydromys chrysogaster Common Water RatMelomys moncktoni Monckton's MelomysMelomys rufescens Black-tailed MelomysRattus exulans Pacific RatRattus leucopus Cape York RatRattus Mordax Eastern RatRattus rattus Black RatRattus sordidus Canefield rat

Suiidae Sus scrofa Pig

Placental Mammals - (Volant)

Many of the bats found in Oro are recorded in the following table. They are common

in garden areas and secondary forest where they seek out the native fruit trees that

occur in these areas, feeding directly on the fruit, or on the insects that these trees

attract, according to the species of bat

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Table 4.5: Volant Mammals - OroHipposideridae Hipposideros diadema Diadem Horseshoe BatPteropodidae Dobsonia Magna Great Bare-backed Fruit

BatPteropus neohibernicus Greater Flying Fox

Vespertilionidae Miniopteris australis Little Bentwing BatNyctophilusmicrotis Small-eared NcytophilusPipistrellus angulatus New Guinea PipistrellePipistrellus papuanus Papuan Pipistrlle

In West New Britain there are 28 species of bat known to occur in lowland areas.Many of these roost in caves and are therefore not found in the project area. Thosethat are present favour introduced and native fruit trees common in garden areas andin secondary forest. This applies to many of the fruit bats (Dobsonia species); flyingfoxes (Pteropus species), the Northern Blossom Bat (Macroglossus minimus) and theRousette bat (Rousettas amplexicaudatus) have possibly extended their distribution byfollowing human settlement (Flannery 1995).

Table 4.6: Volant Mammals of West New BritainPteropodidae Dobsonia spp (2) Fruit Bats

Macroglossus minimus Blossom BatMelonycteris melanops Blossom BatNyctimene spp (3) Tube-nosed BatPteropus neohibernicus Greater Flying FoxRousettas amplexicaudatus Rousette BatSynconycteris australis Common Blossom Bat

Emballonuridae Emballonura nigrescens Lesser Sheathtail BatHipposideridae Asselliscus tricuspidatus Trident Horseshoe Bat

Hipposideros spp (5) Horseshoe BatsRhinolophidae Rhinolophus spp (2) Horseshoe BatsVespertilionidae Kerivoula myrella Bismark Trumpet-eared Bat

Miniopteris spp (3) Bentwing BatsNyctophilusmicrotis Small-eared NcytophilusMyotis adversus Mouse-eared BatPhiletor brachypterus Rohu's BatPipistrellus angulatus New Guinea Pipistrelle

Mammals and the Queen Alexandra's Birdwing Butterfly Habitat

Bandicoots and other large native rodents eat the fruits of the Parastilochia vines(Birdwing Butterfly food plants). In so doing they are playing a role in dispersing thefood plants and therefore may play an important role in maintaining QABB habitat(Mercer 1999). Mercer reports that if the fruits are not eaten by animals, they turnblack and soft on the vine, and later fall to the ground, where the seeds germinate in aclump.

However, he also reports finding many fruits rotting beneath the vines on the Plains,suggesting that the intense hunting pressure on the Plains may have reduced the seedbandicoot and rodent populations to levels where they are no longer able to perform

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effectively as agents of seed dispersal. This may have been caused by habitat

fragmentation and use of rodenticides or even an increase in the number of bird and

snake predators.

Conclusion

The Terrestrial Fauna has no doubt been affected by past and ongoing humanactivities in the Oil Palm growing regions of West New Britain and Oro Provinces.Some species have actually increased their range and numbers due to humanactivities, while others have declined. Much of the habitat loss predates oil palm and

has been caused by logging and other agricultural developments.

Areas declared as Wildlife Management Areas under the Fauna (Protection &Control) Act Chapter 154 are still intact and are still managed by landowner

committees.

In Oro the Queen Alexandra Birdwing Butterfly again has been severely impacted bypast logging (especially in the Kumusi area) and oil palm development in thePopondetta Plains. The butterflies still exist in the Afore region away from any oilpalm development. The butterfly and its food plant are still in evidence on some areason the plains. Some WMAs have been identified as QABB reserves and awaitdeclaration. Unfortunately lack of action by relevant government agencies hasdelayed declarations for many years. This needs to be addressed by those agencies,with potential assistance under this project.

4.3.3 Aquatic Flora

Water lilies - Nymphaea species are found on open waters and sedges and grasses onthe margins. The common grass species found include Phragmites karka, Sacchariumspontaneum.

Swamp Grasslands

On permanent wet grassland the dominant species include Phragmites karka,Saccharium spontaneum. On the edges of the grassland areas trees start to appear -main species Anthocephalus chinensis, Eucalyptus deglupta, Octomeles sumatrana,Spondias dulsis and Alstonia scholaris. Sago palm, Metroxylon sagu is common. Thespiny aroid Cyrtosperma merkusii grows abundantly under the tall grasses. Mixedferns, sedges, Donax, Costus and other shrubs complete transition to canopy forest

4.3.4 Aquatic Fauna

4.3.4.1 Invertebrates

Crustacea

The common groups of crustacean found in freshwater habitats in the project areas ofboth provinces are the Atyid shrimps and freshwater prawns of the genusMacrobrachium.

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The exotic Hymenosomatid (spider) crabs were found in 20% of all the oil palmstreams surveyed and none were found in the forest streams. Other types of freshwatercrab were more widespread being found in 40% all types of stream.

Arachnids

Two groups of spider are associated with aquatic systems. The Tetragnathid spidersbuild webs close to the water surface to catch emerging adult insects. Another groupthe Dolomedes spiders are semi-aquatic and can enter the water to catch their prey.Both types were found in many of the streams associated with smallholder oil palmsblocks and natural habitat in the project areas in both provinces.Aquatic Fauna

Insects

The most widespread group of aquatic insects is the Libellulid dragonflies. Thesewere found in all oil palm streams and 70% of forest streams studied during the fieldsurvey. They are able to thrive in streams of moderate quality as well as good quality,(no really badly polluted streams were found in the oil palm blocks studied). TheBaetid mayflies (which in fact were the most numerous of all aquatic insects found)and Hydropsychid caddisflies follow a similar pattem both groups being found in90% of oil palm streams and 70 to 50% (respectively) of forest streams. In manycountries mayflies as a group are indicative of high water quality. In PNG this is notso as some species are able to survive in all but the most degraded of streams.

Gerrid (water strider) bugs live on the water surface and feed on other aquatic insects.They are most common on slow flowing stream especially along the margin. They areable to survive in streams with a wide range of water quality. However they arelimited by presence or absence of other aquatic insects which are affected by waterquality. The naucorids which creep below the surface are affected by water quality.However they are very diverse group which can occupy streams of poor water quality.

Both the Gerrids and Naucorids were abundant in oil palm streams (being found in80% to 100% respectively of those studied). They were less common in the foreststreams. Though this was probably due to temperature (the forest streams studiedwere generally colder than the oil palm streams) and the rate of flow in the streams(again the forest streams studied were generally faster than the oil palm streams).

4.3.4.2 Vertebrates

Fish

The most common groups of fish in the streams of project areas in both provinces arethe gudgeons (Eleotrididae) and the gobies (Gobiidae). These groups were observedduring the field surveys.

Streams within a radius of 50 kilometres of Popondetta support an endemic species ofRainbow fish called the Popondetta Blue-Eye (Pseodomugil cyonnieae). The currentstatus of this species is unknown

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Block holders at Sirovi (Oro) complained that the fish in the Ambogo River had neverrecovered from the early 1990s when they had been killed by excessive organicpollution from poorly treated wastes discharged by the Oil Palm Industry. There isstill a tendency to blame the lack of fish on the commercial oil palm industry, eventhough wastewater was now properly treated prior to release into any watercourse.The slow recovery of fish fauna is likely to be complex, it may be caused by otherindustries such as sawmilling, and it may just be due to over fishing or from othersources of pollution. Small creeks are affected by domestic laundry which uses soap

powders and bleach, this is worse now due to increased human populations.

Amphibians

There is no data on status of the frog fauna in the smallholder oil palm areas. The frog

fauna of PNG is diverse with species in excess of 200 with many more probably yet to

be discovered. Recent fauna surveys associated with the gas pipeline led to the

collection of 28 new species. Doubtless there are new species in Oro and West New

Britain, though this is less probable in the already disturbed areas.

As with other animal groups the diversity of the frog fauna is lower on New Britainthan on mainland New Guinea. There are less than 20 described species on the island,

but many of them are endemic to the islands. Most of these are Ranids of the Genus

Platymantis.

The cane toad, (Bufo marinus), introduced to Kerevat in East New Britain, in the early

1900s, is very common in both project areas. Tadpoles of this species were observedin most watercourses studied in both Provinces. At Isivini Creek, Oro, they were very

extremely common with very large numbers of small adults on the banks also. The

adult toads are everywhere including in urban residential areas. The toad is toxic to

most animals including most frog eating snakes, with the exception of the Keelbacksnake. Its impact on native fauna is unknown.

Reptiles

Freshwater turtles

None are known from West New Britain. One species is found in Oro, Elseya

novaegiuneae. Its occurrence, or otherwise, in oil palm streams is unknown.

Saltwater crocodiles (Crocodylus porosus) are found in the main rivers and lakes of

both project areas.

In West New Britain the most important habitat is in lowland areas of the northern

side of the province, the same area as much of the oil palm development is takingplace. In a survey conducted in 1979 (Whitaker 1980) the main locations for the

crocodile were the main rivers: Kulu, Kapiura and its tributaries (Metelen and Iglik

Rivers - which are located about 40 km inland and at 200 m above sea level), lakes:

Namo, Dakataua, Hargy, Lalilil, Kaluai, Mafuo and in the numerous round waters. It

was estimated at the time that there were at least 8-9 nesting females around Lake

Dakataua producing up to 250 to 300 crocodile eggs per year. While no recent

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crocodile surveys have been carried out in West New Britain the status of this speciesand impact of agricultural development and logging since the late 1970s is unknown.However, crocodiles still exist in sufficient numbers to support an export trade.Geoffrey Ling's Export Company (first established in the 1970s), based at Buluma, isstill operating, run now by his son. Currently this export company has 2 licensedbuyers and exports in excess of 200 skins per year (Nundima pers com). Othermarkets include Mainland Holdings in Lae which buys skins and live animals fromKimbe. The manager of the Mainland Crocodile farm, David Wilkin, estimates thatthey receive in the order of 180 skins a year and about 120 live animals per year.

Oro Province is also an important habitat for the Saltwater Crocodile, especiallyaround Musa. No exporter is based in the Province though Mainland Holdings used tohave buyer based in Popondetta several years ago. Hunters still sell skins and liveanimals to Mainland Holdings. David Wilkin says that they receive more crocodilesfrom Oro than Kimbe and estimates the numbers to be on average 500 skins per yearand 240 live animals per year.

Occasionally large crocodiles do kill local people. In one incidence a boy aged 13 waskilled by a large crocodile at Barema, (north of Bialla), West New Britain, in 1995.He was allegedly the thirteenth victim of the same animal.

4.4 Protected Areas and Critical Habitats.

Habitat or species can be given protection by different laws and by different levels ofgovernment.

At the National level, administered by the Department of Environment andConservation, there are Wildlife Management Areas (WMAs), Protected Areas andProtected Fauna which can be declared as such under the Fauna (Protection &Control) Act Chapter 154, National Parks under the National Parks Act andConservation Areas under the Conservation Areas Act. At Provincial level theProvincial Government and Local Level Government (LLG) can also pass separatelegislation for protecting habitats.

In West New Britain under Provincial laws tourism sites may be protected and underLocal Government laws passed by the Talasea LLG, Hoskins LLG and Bialla LLGmarine areas can be designated for protection.

Wildlife Management Areas.

Under a WMA landowners elect a committee to manage the area and draw up rules togovern how resources within the WMA are used. Areas are surveyed, a writtenboundary description prepared, and the areas then declared by the Minister forEnvironment and Conservation. The area boundaries, committee members and rulesare gazetted.

In West New Britain Province two such areas are established: Garu WMA (8000 haarea, gazetted in 1975) on Willaumez Peninsula and Pokili WMA (9700 ha area,gazetted in 1977) south of Hoskins.

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The areas were established for the management of wildfowl egg harvesting. PokiliWMA has reputedly one of the largest egg grounds in the world. Eggs have long beenan important resource both in custom and for generating income. Pokili WMA hasalso become a stopover for bird spotting tours. Whether any benefits from these tourspass on to the landowners is not known.

The landowners of Garu WMA are from the same village (Garu), while for the PokiliWMA they come from 7 villages, these are:

* Vavua* Rapuri* Galilo* Koimumu* Makasili* Ubai* Lavegi

Both of these areas are adjacent to New Britain Palm Oil Ltd (NBPOL) estates andlandowners are also utilizing other land on Village Oil Palm (VOP). Environmentalconsents for commercial oil palm estates prohibits the planting of oil palm within 300m of the gazetted boundary of a WMA.

In Oro Province only one WMA, Hombareta WMA, has been declared. It is locatedabout 7 kilometres from Popondetta Town. This is a 130 ha area and was declared in1997. Food plants of the Queen Alexandraes Birdwing Butterfly (QABB) are found inthis area and there were sightings of QABB. However since the declaration of the areathere have been no more signs of the QABB. It is suspected that the area is too smalland isolated due to the planting of oil palm around the WMA.

4.4.2 Proposed Areas

In Oro Province Lejo is a 37 ha block of rainforest leased by Higaturu Oil Palms fromthe State. While the area is not formally protected the company has set it aside as areserve area.

Food plants for QABB have been established at the reserve and were used as the mainnursery for producing food plant vines in large numbers for planting out in the 1980s.QABB has recently been seen on the reserve area (Graham King pers com).

In addition to Lejo the following areas are proposed as WMAs, specifically for theprotection of the QABB:

* Baihere (74 ha)* Voivoro (240 ha). Indawari* Bambohambo (200 ha)• Ingababari (300 ha). Kausada

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* Beauru* Siai* Epa

Many of these areas have been proposed for many years and it is important that theGovernment acts to have them declared as soon as possible to avoid loss of interest bythe local landowners in the WMA concept.

In West New Britain Province several areas have been recommended for declarationunder the National Parks Act. These include

* Lake Dakataua* Lake Hargy* Balima* Lake Namo* Lorko Government Station

The first step towards creating a National Park is the reservation of the land under theLands Act for the purposes of a national park. After this step submission to Cabinetwould be required for the National Park to become legally protected. Where the areais under customary ownership it is very difficult to establish a National Park, this isthe main reason why there are so few in PNG and why those that have beenestablished are so small. Lorko has been reserved under the Lands Act; Balima (eventhough on state land) has not. The other areas are under customary ownership andhave not been pursued further. Steps to declare Lorko formally under Parks Act hasnot been done. The Department of Environment and Conservation is currentlyreviewing all the proposed protected areas before taking further steps (Rose pers com)

4.4.3 Critical Habitats

Conservation Needs Assessment (CNA)

In 1992 a Conservation Needs Assessment (CNA) was carried out to assess areas ofcritical importance for conservation. The CNA identifies biodiversity "hotspot" areasto allow for conservation of as many species as possible.

West New Britain

While much of the coastal area in which oil palm is developed is "unassigned", thereare some important habitats in the project area.

Much of the Willaumez Peninsula is rated as "High Priority for Conservation" (HPC)due to its diversity of flora (upwards of 2000 species). A Paristolochia (BirdwingButterfly food plant) species only previously known from Arfak Mountains in IrianJaya has been found on the peninsula in 1989

An area from the coast inland incorporating Lake Namo west of the peninsula is ratedas "Very High Priority Wetland" (VHPW). The coast from Eleonora and RiebeckBays west of the peninsula to Stettin Bay on the east is rated as a 'Marine Priority"

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(MP). The inland area behind the peninsula across the island is rated as a "Critical

Watershed" (CW).

In Oro the area to the south of Popondetta (starting 20km south) is rated as "HighPriority" and to the north (starting about 20km north) is rated as "Very High Priority

Wetland".

Oil Palm developments, especially mini estates (Voulpai, Lolokoru) and VOPdevelopment, in West New Britain are occurring on Willaumez Peninsula, (affectingabout half of the area regarded as HPC) and in the Lake Namo area which is aVHPW. The Kulu Dagi, Namundo, Garu, Haella Plantations and VOP developments

all occur within the CW area.

Lake Dakataua and Willaumez Peninsula - is an important area for flora and is a verydiverse area of lowland rainforest on recent rich volcanic soils. The overall speciesdiversity is estimated to be 2000+

Talasea Geothermal region interesting succession communities associated with localarea - Nepenthese and Fern flora

Areas of critical habitat recommended by Walain Ulaiwi of The Nature Conservancy,an NGO, based near Kimbe, include:

* Delta area of Kapiura River both western and eastern side together withassociated lakes and remaining tract of rainforest

* Padi River on border of West and East New Britain Provinces, delta andcatchments including the mangroves and wetlands

4.4.4 Proposed Tourist Areas

The West New Britain Provincial Government has passed legislation to allow for theprotection of tourist sites.

Several sites were gazetted as proposed tourist areas in 1996. Some of the areasproposed are existing Wildlife Management Areas. A complete list of these areas can

be found in appendix.

The Project will not impact any of the protected areas described above. The

Environmental Management Plan contains a detailed section on the use of sitesensitivity analysis to determine whether a block of land would be acceptable forinclusion under SADP (section, 4.6.1 Identification of Environmentally SensitiveSites, Critical Habitats and Protected Areas) in accordance with the PNG legislationand the World Bank's OP 4.04 Critical Natural Habitats.

4.5 Chemical Use by Smallholders

Smallholders use much less fertilizer than recommended and most prefer not to

purchase fertilizer from their earnings from sales of FFB even though this would leadto a significant increase in their harvest.

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There is evidence also that even when fertilizer is purchased it is not applied. Bags offertilizer were observed left where they were delivered by the roadside. From thestate of the bags they had obviously been there for some time. One of the OPIC fieldstaff pointed out that block holders would prefer OPIC to apply the fertilizer.

Some oil palm growers do not seem to understand what fertilizers are used for and inKimbe were blaming the application of fertilizer on their oil palm blocks for thedecline of food produce on their adjacent garden plots.

Pesticide use was even lower than fertilizer use. Only herbicides were are used andfor smallholders to purchase herbicides from the commercial oil palm companies theyare required to have received training covering proper application, safety, disposal ofcontainers etc. In Bialla use of herbicides by smallholders was actively discouragedand no training given.

Farmers can purchase chemicals from agricultural suppliers in Kimbe. How much isbeing obtained in this way has not been ascertained. In Popondetta such chemicalscould only be obtained from the oil palm companies as no agricultural suppliers arebased in Popondetta.

Killing of mature oil palm is done by trained OPIC staff only and now only usingglyphosate.

4.6 Socio-economic Environment

4.6.1 Introduction

Smallholder oil palm schemes started at different times in the two provinces:

* Hoskins (Nahavio)- 1968* Bialla- 1972* Popondetta- 1976

In all cases the smallholder schemes commenced once commercial oil palmoperations were established and mills built. Initially Land Settlement Schemes (LSS)would be started which involved settlers from other provinces, usually theoverpopulated parts of Simbu, East Sepik, East New Britain, Enga, and Morobe. Theblocks were generally 6 hectare in area with the intention that 4 be planted with oilpalm and 2 reserved for gardening. Once the LSS schemes were established localvillagers were assisted to start Village Oil Palm (VOP). In the West New BritainProvince many local people have, "sold" land through "customary purchase" tooutsiders to develop oil palm (and continue to do so). This group is treated as part ofthe VOP scheme.

When the schemes were started the areas chosen for LSS had low populationdensities. In the 30 years since the schemes started the PNG populations has morethan doubled. Families on blocks are now often made up of two to three generations.The overcrowding on blocks, large number of under employed youths and the

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growing resentment felt by the traditional landowners near settlement schemes have

led to many social problems.

The LSS blocks are now expected to support several families and the result is that the

garden reserve areas have also been converted to oil palm. Block holders have to go

elsewhere to make gardens.

Natural resources for building houses and firewood are in short supply on LSS blocks

(some block holders were forced to use oil palm fronds) and even in some VOP areas

where they have planted too much land to oil palm, or sold too much land through

Customary Purchase. In Oro Province there were cases where villagers had to buy

timber from neighboring villages in Buna as they no longer had any such on their own

land.

4.7.2 Social and Cultural Features

4.7.2.1 Demography

West New Britain Province

West New Britain Province comprises 11 Local Level Govemment (LLG) areas

(including the Kimbe Urban LLG, and has a total population of 184,500 persons. The

oil palm growing regions of the West New Britain Province falls within four of these

LLGs. These are Talasea, Mosa, Hoskins and Bialla. The total population of these

four LLGs is over 100,000 persons and represents 55% of the total population of the

province.

Table 4.7: Population details for these four LLGs for West New BritainProvince.

LLG Households Persons Males Females

Talasea 4,169 20,522 11,343 9,179

Mosa 4,190 24,837 13,610 11,227

Hoskins 3,172 19,327 10,135 9,192

Bialla 6,627 36,188 20,099 16,089

Total 18,158 109,874 55,187 45,687

Provincial 33,574 184,508 99,015 85,493

Total

Table 4.8: Population Profile for West New Britain Province.

age persons male female<15 79,629 41,786 37,84315-44 86,170 46,723 39,447>45 18,709 10,506 8,203Total 184,508 99,015 85,493

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Oro Province

The Oro province comprises 8 Local Level Government (LLG) areas (including thePopondetta Urban LLG), and has a total population of 133,065 persons. The oil palmgrowing regions of the Oro Province falls within four of these LLGs. These areHigaturu, Kokoda, Popondetta Urban (excluding the town area itself) and Oro Bay.The total population of these four LLGs is over 80,000 persons and represents 61 % ofthe total population of the province.

Table 4.9: The population details for theses four LLGs for Oro Province.

LLG Households Persons Males FemalesHigaturu 5,981 35,200 18,718 16,482Kokoda 2,620 15,730 8,205 7,525Oro Bay 3,395 19,944 10,539 9,405Popondetta (excl. town) 1,770 10,928 5,779 5,146Total 13,766 81,802 43,241 38,558Provincial Total 22,566 133,065 69,857 63,208

Table 4.10: Population Profile for Oro Province.

age persons male female<15 57,767 30,230 27,53715-44 59,849 31,245 28,604>45 15,449 8,382 7,067Total 133,065 69,857 63,208

2006 Demographic and Health Survey (Post Courier 17/10/06)

Results from phase one of the 2006 Demographic and Health Survey in Manus (PostCourier 17/10/06) indicate that the Manus population has increased by over 18% sincethe last National Census conducted in 2000. If this trend is the same in all parts ofPNG then populations in West New Britain and Oro Provinces will have increasedsimilarly. This would put the current population of the project areas at approximately129,000 in West New Britain Province (an increase of 20,000 persons from 2000) andin Oro Province at approximately 96,500 (an increase of about 15,000 persons from2000)

4.7.2.2 Religion

The majority in the Oro Province belong to the Anglican Church. Other religions ofimportance are the Pentecostals, Evangelical Lutherans, and Seventh Day Adventists.Membership of the 5 main religions is shown in the following table. While VOPgrowers, being from Oro, are predominantly members of the Anglican Church thereligion of settlers on the LSS blocks will largely reflect their province of origin

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Table 4.11: Membership of the 5 main religions in the Oro Province

Religion PersonsAnglican 80,178Pentecostal 22,298Seventh Day Adventists 8,451Evangelical Lutherans 4,636Roman Catholic 2,493

The majority in the West New Britain Province belong to the Roman CatholicChurch. Other religions of importance are the Pentecostals, United Church, SeventhDay Adventists, and Evangelical Lutherans. Membership of the 5 main religions isshown in the following table. While VOP growers, being from West New BritainProvince, are predominantly members of the Roman Catholic Church the religion ofsettlers on the LSS and Customary Purchase blocks will largely reflect their provinceof origin

Table 4.12: Membership of the 5 main religions in the West New BritainProvince

Religion PersonsRoman Catholic 101,376Pentecostal 16,414United Church 15,291Seventh Day Adventists 11,900Evangelical Lutherans 10,476

4.7.2.3 Migration

In the Oro Province out of a total population of 133,000 the number of migrantsrecorded is 21,175. Of these the two thirds are internal migrants, i.e. they have eithermigrated within the particular District they are living in or have migrated within theprovince itself. The remaining 8,705 have migrated from other provinces with most(over 5,082) of these coming from the four provinces adjacent to Oro, the remaining3,623 come from all other 16 provinces The main 4 provinces from which migrantshave come to Oro are shown in the table below.

Table 4.13: The four main provinces from which migrants from outside the OroProvince originate

Province PersonsMorobe 2,024National Capital District 1,297Milne Bay 882Central 879

In the West New Britain Province out of a total population of 182,036 the number ofmigrants recorded is 53,818. Of these 27 % are internal migrants, i.e. they have eithermigrated within the particular District they are living in or have migrated within the

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province itself The remaining 39,260 have migrated from other provinces. Thelargest numbers of migrants come from the adjoining East New Britain Province.From mainland provinces the main sources of migration are the East Sepik, Morobe,Chimbu and the Southern Highlands.

Table 4.14: The five main provinces from which migrants from outside theWest New Britain Province originate

Province PersonsEast New Britain 10,002East Sepik 8,216Morobe 5,193Chimbu 2,648Southern Highlands 2,453

4.7.2.4 Attendance at School

Oro Province

The 2000 National Census reported that of the age group 5 to 29 years (totaling73,347 people) 17,800 were attending school at that time and a further 25, 791 whohad attended school in the past. The number who had never attended school was28,145 - as about half of this group was in the 5 - 9 years age group and as schoolinggenerally starts for children at 7 years many of these would probably have startedschool later.

4.7.2.5 Literacy and Language

Traditionally people from the Oro Province, as part of Papua, would be regarded as aMotu speaking. However, this is no longer so and the census figures show that Pidginspeakers (32,023 people are literate in Pidgin) are more common than Motu speakers(7,263 are literate in Motu). 48,493 were reported to be literate in English.

West New Britain Province is a predominantly Pidgin speaking province with 80, 946people being literate in Pidgin. English is also important with 61,007 reported to beliterate in English. There are 6 vernacular languages spoken in the project area themain ones being Bola, Bebeli and Nakanai in the Kimbe/Hoskins area and Mansengand Meramera in the Bialla District.

Table 4.15: Languages and number of speakers in the project areaLanguage Region Number of SpeakersBola Talasea District 13,746Bebeli Talasea District 1,050Nakanai Hoskins District 13,000Manseng Bialla District (coastal) 2,500Meramera Bialla District (coastal) 2,000Pele Ata Bialla District (inland) 1,900

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4.7.2.6 Economic Activity

The majority of people in both the Oro Province (86 %) and the West New BritainProvince (77%) are involved in agricultural activity, either for cash or for their ownuse. In Oro out of 21, 840 households the main cash crops are coffee (6,186 growers),a high altitude crop grown mainly in the Afore region, and oil palm (4,436 growers),which is a low altitude crop. In West New Britain out of 30,672 households the maincash crops are coconuts (11,187 growers) and oil palm (8,191 growers). Betel nut andcocoa were also important cash crops.

4.7.3 Social and Economic Infrastructure

4.7.3.1 Communication infrastructure

Roads

In West New Britain an all weather road exists from west of Kimbe town to as far asGilo in the Gazelle Peninsula, East New Britain. The road between Kimbe and Biallais now sealed for much of the way. A sealed road also runs from Kimbe to Hoskinsand beyond as far as Koimumu Village. In Oro an all-weather road runs from Kokodato Popondetta and to Oro Bay. Road access to smallholders in both provinces is ofvarying quality, as many of the roads are former logging tracks and log bridges. Lackof maintenance has led to deterioration of these roads and due to loss of many of thesmall bridges some areas are either completely cut off or accessible by long detoursvia other roads. The poor roads cause delays in FFB pick ups and often loss of incomefrom oil palm as the fruit rots before collection. In 2000 a washed out culvert on theKokoda road led to the loss of 1,000 tonnes of FFB (Ellingson 2001).

Airstrips

The main airports are at Hoskins in the West New Britain Province and at Girua in theOro Province. These airstrips accommodate both Air Niugini and third level airlines.Hoskins can take the F28 100 series and Girua the smaller Dash 8.

Smaller airstrips are at Bialla, and Talasea West New Britain Province (although theseare not currently operational, they have been brought into service during times ofemergency such as the eruption of Mt Pago in 2002, an eruption that closed theHoskins airport for some time.

Wharves

There are government wharves at Kimbe, Bialla, and privately owned wharves atUlamona and Buluma in West New Britain and a government wharf at Oro Bay in theOro Province.

The Bialla wharf is maintained and managed on behalf of the government by HargyOil Palms Ltd.

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Telephones

Main centres at Hoskins (including the Valoka Mission to the east of Hoskins), Kimbeand Bialla in West New Britain and Popondetta in the Oro Province have STD andISD telephone services.

The mobile phone network commenced at Kimbe in 2006 and is accessible as far asthe turnoff to Bialla about 20 km outside of Kimbe Town. It does not give coverage asfar as the Hoskins airport (Babo pers com). It is also planned that the network will beintroduced into Popondetta before the end of this year.

Radio Communication Network

Outside the main centres communication is difficult. Government outstations,missions and larger companies, such as the oil palm and logging companies, haveradios.

Internet

Areas connected to the STD telephone network, i.e. main centres such as Hoskins,Kimbe and Bialla in West New Britain and Popondetta in the Oro Province haveaccess to the internet. Access speeds are low.

Broadband access is still waiting for government approval. Once approval is givenand once a pricing structure is developed remote areas will also have access to theinternet.

Radio and Television Coverage

Radio

The National Broadcasting shortwave service operates out of Kimbe and services thewhole of West New Britain province. A commercial radio service, Nau FM, alsooperates from Kimbe.

Provincial Radio in Popondetta which was off the air for some time only operateswith the help of the National Broadcasting Commission in Port Moresby, even thoughit is a provincial function. The station has 8 staff (5 of whom are broadcastingofficers).

Television

The local television network EM TV is available in Kimbe/Hoskins and inPopondetta. In Popondetta it is facilitated by the Higaturu Oil Palms for the oil palmgrowers. The signal is available around Popondetta town, parts of Oro bay, in Sangaraand out towards Kokoda. In West New Britain the transmitter is located betweenHoskins and Kimbe and serves that area only.

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Cable TV operators are in most centres, and the local TV programmes are also madeavailable by these operators. Cable TV systems are located at Hargy Oil Palms and atthe Ulamona Sawmill in the Bialla District.

4.7.3.2 Service infrastructure

Schools

Elementary Schools

Most communities have elementary schools which teach from Prep to Grade 2. Theseare each staffed by up to 3 teachers and are of very basic design and construction. Theoil palm companies have built elementary schools on their residential estates. Thesecater for 50 to 60 children; teachers are paid by the government. While they areprimarily for employees children they do have limited space for children fromoutside.

Primary Schools/Community Schools

As with elementary schools most communities have primary schools which cater forgrades above 3. These are usually the original community schools in existence beforethe education reforms. While many are upgraded to cater for grades 3 to 8 some arenot. In communities where the schools only teach to grade 6 any children who wish toobtain education levels above grade 6 have to go to other centres. In many cases thiscan involve a long walk. For example children from Lavege Village south of Hoskinsin West New Britain have to walk a total of nearly 14 kilometres (7 each way) everyday to and from school at Ubai which teaches grades 7 and 8.

Popondetta Primary School (Mrs. Wairaf, deputy principal pers com) serves thechildren of parents living and working in the town. Its intake is from the PopondettaElementary, United Church Elementary School and United Church Primary (theUnited Church School does not have grades above 6), the Biru Elementary and thePATI Elementary Schools.

The school has a total enrolment of 811 in 2006 (700 plus in 2005). While 29 teacherswere expected for this year only 25 were provided. Under the reforms to beimplemented there will be one teacher per class, as opposed to one for each subject ineach grade. Class sizes are 45 to 50. The gender ratio is slightly more girls than boys.

Secondary Schools

Bialla High School currently caters for Grade 9 and 10 students only. When it openedin 1979 it taught grades 7 to 10. The first Grade 10 students graduated in 1982. Withthe top up system at primary schools Grade 7 and 8 is taught in the primary schools.Many High Schools were then able to teach Grade 11 and 12, at Bialla High Schoolthat has not been the case, though the school has made a submission for upgrading tobe able to teach grades 11 and 12.

The student intake is from the various primary schools in the area, including some ofthe children who complete grade 8 at the Bialla International School.

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The school has 560 students and 24 staff. The school caters for both day students andboarders (170-200 boarders). The ratio of male to female students is approximately 65to 35.

Infrastructure is old and poorly maintained. Little assistance is provided by theindustry even though most of the students are children of employees of Hargy OilPalms Ltd or of oil palm block holders. Ablution blocks are not functioning properlyand students are using pit toilets. The school has its own water supply (fromgroundwater) which was organized by the local Lutheran Women's group.

The school produces over 200 Grade 10 graduates each year, and 100 to 150 of thesego on to Grade 11. This can only be done at Kimbe or Hoskins Secondary Schools oroutside of the province.

Private Schools

Primary schools of the International Education Authority (IEA) are located at Bialla,Kimbe, in West New Britain and at Popondetta in the Oro Province. These teach up toGrade 8.

College of Distance Education (CODE)

There is a CODE office based in Kimbe and Hoskins and these provide distanceeducation in PNG national curriculum to Grade 10.

Vocational Schools

Vocational schools are located at Popondetta, Sangara, Higaturu and at Mamba inKokoda. The Sangara Vocational School (which is a level 4 school) is typical of most;it provides skills training for students who have dropped out of school at Grade 8 andGrade 10 (it also has two grade 6 leavers). The subjects taught are auto mechanics,carpentry, agriculture, home economics and commerce. The course is two years at theend of which they receive a vocational certificate. Total enrolment is 131 mostly boys(females started out at 15 at the beginning of this year but this has dwindled to only8). Sangara has 5 staff, with a ceiling of 6. However accommodation is the limitingfactor with only 4 houses.

Little outside assistance is given to the school. They have approached the local oilpalm company but as yet nothing has eventuated. They have done a few small jobslike grass cutting in the past for money. Donor funds such as the Basic EducationDevelopment Project (BEDP) are not designed to assist vocational schools.

Technical Schools and Tertiary Institutions

The Oro Campus of the Vudal Agricultural University is situated in Popondetta. Thisteaches diploma courses in tropical agriculture.

A theological college, Newton College, is based at Jonita outside Popondetta.

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A technical school run by the Catholic Church is located in the Mosa LLG.

University Centre

There is a University centre at Kimbe and at Bialla for students doing thematriculation course required for entry into university. The Bialla campus currentlycaters for 15 to 25 students from the area. Courses are run on Saturdays at the BiallaHigh School. The schools teachers are designated tutors. Lahars courses are also run.

Medical Services

It has not been possible to review all the health facilities in the project areas. There isalso no definitive listing of all the health facilities that exist and their current status.

Government aid posts are now under the responsibility of LLGs and due to lack ofresources many of them are no longer functioning. The manager of the Bialla Health

Centre estimates that about half of the aid posts in the Bialla sub district are closed.The oil palm companies all have well run and reasonably well resourced healthfacilities of their own. These are staffed by company employed health workers. Whilethey are designed to cater for company employees they do also provide health care for

others. For example at the Higaturu Oil Palm Health facilities in 2005 the number onnon company employees and their dependents treated was 20% of all people treated

(8500). In addition the company is also providing medical laboratory services for thegovernment health centre and does testing for malaria, typhoid, HIV/AIDS, anemia,parasites etc.

Hospitals

The main hospitals are the Kimbe General Hospital (KGH), operating since 19738, inWest New Britain Province and the Popondetta General Hospital, operating since thelate 1960s in the Oro Province.

KGH is currently undergoing an upgrade worth K15 million, funded largely under thePNG Incentive Fund (AusAID) but also with support from NBPOL and the West NewBritain Provincial Government. The hospital is currently grossly inadequate, for

example it has beds for 20 mothers at any one time, whereas the demand is muchhigher (last year 5000 mothers were admitted for deliveries).

Clinics, Health Centres and Aid Posts

Bialla has its own Health Centre. The main problem is a lack of beds with only 10 foradults, 10 for children, 10 for maternity and 3 for delivery. There is no Tuberculosis(TB) ward and TB patients instead of being treated as in patients at the health centrethey are being sent home to be treated as day patients. As a result many do not carryon with treatment leading to an increase in the incidence of TB and higher death rate.There have been 118 diagnosed with TB at Bialla this year.

' After the World War 2 until the early 1970s the main government hospital was located at Talaseawhich was then the main government centre, Kimhe developed as a direct result of the oil palmindustry, and hecame the Provincial Capital

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In addition the Bialla Health Centre vehicle is 10 years old and breaks down often.This means that there is no regular mobile mother/baby clinic. The local oil palmcompany does assist with vehicle maintenance.

There is no water supply at Bialla and there is a need for more catchment tanks

Law and Order

There are police stations at Kimbe, Hoskins, Buluma, Kapore and Bialla in the WestNew Britain Province and at Popondetta and Kokoda in the Oro Province.

Police posts are also located in smaller centres.

Community policing operates at the village or settlement level. In West New BritainProvince this was regarded as effective and was preventing a lot of crime atcommunity level such as drug trade etc. However there is considerable comment inthe media about the level of serious crime in the province. At a recent inquiry intofirearms concern at the number of guns in the province was raised. For example 4policemen have been shot dead in the province in the last 10 years. One estimate hadthe number of high powered forearms in the Mosa LLG was 55 and that there were 5guns at each of the 5 settlements in Kimbe. Guns were also a problem at Bialla andpeople there were appealing for an increase in the number of police personnel.

In Oro province the level of serious crime had dropped in recent years due to a crackdown on law and order. A few years ago farm managers at Higaturu Oil Palm havebeen held up within estate boundaries by armed criminals. Now the situation is muchbetter. However community policing in the block areas is regarded as ineffective andactivities such as drug trade, including growing drugs on the blocks is common.

Fire-fighting

The provincial fire stations come under the PNG Fire Service. The organization isunable to provide a reliable service due to resource constraints.

Oro Provincial fire service has been without a fire truck for four years. (PC 20/10/06).

Kimbe Fire Service has a staff of 8 including Station Commander, Silas Kepas. It hasnot been able to provide a fire-fighting service in the oil palm smallholder blockssince January 2006; previously they had a fire tender (ex Bululo) which could attendto fires in these areas. This had had to be decommissioned. The only other fire tenderis a 500 litre capacity suitable only in town where there are fire hydrants. The numberof calls from the oil palm blocks during the dry season is in the order of 3-4 a day.

Other Government Services

Division of Agriculture

Oro Province has a Division of Agriculture and Livestock (DAL). It has about 28 staffwithin the province four at headquarters and the remainder posted to the variousdistricts. A provincial wildlife officer is funded under the Agriculture and Livestock

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Division and is one of the four staff based at headquarters. DAL provides advice onother agricultural activities other than oil palm. The Provincial Wildlife Officer islocated with DAL and is responsible for matters related to the QABB and to protectedareas.

A similar set up exists in Kimbe; however, there is no specific environmental

function.

Oil Palm Industry Corporation (OPIC)

OPIC has offices in the centres of Kimbe, Bialla and Popondetta. OPIC managers and

support staff are also based in the field.

Missions

The missions play a vital role in bringing social services to the people.

In West New Britain 90% of the population is Roman Catholic. The church has 19

parishes within the oil palm growing areas and a radio network links them all to theheadquarters in Kimbe. The church responds to many social issues. These include

* Women's affairs

* Youth development

* Peace & justice

* Family life

* HIV Aids

In Oro the majority of the population belongs to the Anglican Church.

Postal Services

Post Offices are located at Kimbe, Hoskins and Bialla in the West New BritainProvince and at Popondetta in the Oro Province.

The Bialla Post Office has 174 post boxes, and not all are allocated. Due to a hold upin July the Post Office was closed for one month, and has only recently reopened.

Banking

Bank of South Pacific (BSP) has branches in Popondetta and Kimbe, Bialla. Westpacand Australian New Zealand Banking Group Ltd (ANZ) each have a branch at Kimbe.While ANZ does not have the same coverage that BSP has, it has signed an agreementwith Post PNG for post offices to provide electronic banking at some of theirbranches. The programme for this service in West New Britain and Oro Provinces isnot yet known.

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Salim Moni Kwik

Post PNG runs a money transfer scheme called Salim Moni Kwik (SMK) which isavailable at most post offices that are connected to the telephone network. The Biallaservice is currently suspended indefinitely due to an armed hold-up.

4.7.3.1 Commercial infrastructure

Trade stores

Most villages have small trade stores. Often individual stores operate for a whilebefore closing when others start new ones. Liquor licenses are also issued to villageretailers. Vavua for example has 3 (Babo pers com). Drunkenness is an issue invillages in the Kimbe Hoskins area.

PMVs

Most of the villages have one or two PMVs or trucks which carry passengers intomain urban centres

NBPOL Foundation

A fund established by NBPOL for social infrastructure projects in the Kimbe Hoskinsarea.

NBPOL Trust Fund

This is a fund established by the West New Britain Provincial Government to managethe dividend payments from its 18 million shares in New Britain Palm Oil. Thecharter of the fund is for its use to improve the health and educational services to thepeople of West New Britain.

Fund for retired or retrenched public servants

The West New Britain Provincial Government has recently established a fund forretiring public servants with an initial input of KI million.

4.7.4 Cultural Sites and Material Cultural Conservation

Cultural and Archaeological

Sites near active volcanoes often contain archaeological sites preserved under layersof volcanic ash. This is especially true of West New Britain. Several sites have beenstudied in the Numundo areas. Sites are often on high ground and hill or ridge topsand areas ideal for roads.

Data on sacred sites such as burial sites was not available.

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5. Potential Environmental Impacts

This section summarizes the environmental issues and any potential significant

adverse environmental impacts that may arise during the implementation and

operation of the project (Note: individual smallholder blocks are 2 ha in size and will

be located along existing feeder roads).

All existing mills in Papua New Guinea are ISO 140001 certified and therefore have

procedures in place to mitigate any potential environmental damage and are regularly

audited.

The industry has an elaborate Integrated Pest Management regime which is described

below and in the EMP.

5.1 Potential Environmental Impacts on Subsistence Resources

5.1.1 Water supplies

5.1.1.1 Potential Impacts from Block Clearance

Water supplies can be affected by a wide range of contaminants from a variety of

sources during land clearance and road re-construction. During land clearance for

planting oil palm, plant debris and exposed soil can be carried by wind or surface

drainage into nearby creeks, obstructing flows and causing increased sedimentation

which can affect the quality of the water and lead to nutrient enrichment and the

formation of stagnant pools, affecting the quality of the water for downstream users.

5.1.1.2 Potential Impacts from Road Re-construction

Likewise, several of the activities involved in the re-construction of roads, including the

winning of gravel and the installation of culverts and other waterway drainage, can pose

a significant risk of sedimentation and contamination of waterways downstream of the

road construction site. The installation of culverts may require that the creek is partially

dammed or diverted to allow work to be completed, and this may result in a temporary

reduction or cessation of flow for some of the users downstream.

5.1.1.3 Impacts from smallholders

Smallholders themselves can have negative impacts on water supply. This can be

through inappropriate siting of toilets, use of laundry soaps and bleach while washing

clothes. Also through the inappropriate washing of containers that have contained

hazardous chemicals

5.1.2 Protection of gardens and garden drainage systems

Gardens are a vital subsistence resource which provides many families with their only

source of cash income. Gardens in production will usually be tended everyday by the

landowner. Road construction has the potential to disrupt this social activity.

5.1.2.1 Impacts on Garden Drainage during Road Reconstruction

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Effective garden drainage is important in maintaining garden productivity and avoidingwater-logging or inundation of the garden soils. Road construction has the potential todisrupt the efficient drainage of neighboring gardens by spilling storm-waters andcontaminated site drainage waters directly onto adjoining garden plots or indirectly bydischarging these in an area where they can enter a garden drainage system. This couldresult in flooding of the garden and / or contamination of the garden soil with drainagesediments and mud, both of which (but particularly the smothering by sediments fromtemporary site drainage) can cause substantial damage to garden productivity and landvalue. Likewise the temporary site drainage and / or the permanent road drains mayresult in the obstruction or diversion of garden drains in a manner that may cause theirdrainage waters to back up in the garden.

Dust can also have a damaging impact on garden crops, particularly those close to beingharvested.

5.2 Potential Environmental Impacts on Soils

The potential environmental impacts on the soils of the project area are:* loss of soil from exposed surfaces through erosion by water and wind, and the

subsequent sedimentation of downstream waters;* the contamination of soils by wastes and other materials (including excessive

amounts of fine silts resulting from erosion).

Loss of surface soils (particularly the nutrient- and organic-rich topsoil) depletes thenutrient resources which can result in a loss of plant diversity which may in tum resultin a loss, or migration out, of fauna from the area.

5.2.1 Erosion

5.2.1.1 Land Clearance

Land clearance either for oil palm planting or for road reconstruction leaves the baresoil susceptible to erosion if not revegetated quickly.

5.2.1.2 Areas particularly susceptible to erosion

Certain areas such as stockpiles and spoil-heaps are particularly susceptible to erosion.

5.2.1.3 Gravel Extraction Sites

Gravels for this project will be extracted from dry pits and from riverside gravelbanks. Gravel extraction sites are particularly prone to erosion as the extractionoperations inevitably expose the working area to erosion from wind and water,

5.2.1.4 Gravel Sorting and Screening

Gravel screening and sorting generates large volumes of dusts (fine sands and silts)that are particularly susceptible to mobilization by wind in dry weather or rain-splashand entrainment in surface runoff during periods of rain. Dusts can smother

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vegetation and cause severe disruption to soil micro-habitats. Gravel dusts falling onto

the soil surface are likely to be entrained by surface runoff during rain periods, where

they are carried by overland flow into surface watercourses leading to sedimentation

impacts on the aquatic habitats and biota downstream.

5.2.2 Contamination of soils

Soils can be contaminated by:* inert material such as silts and mud, cement dust or concrete fines and slurries

which change the material composition and textural properties of the soil;

. biodegradable materials which can be toxic at high concentrations but are

broken down over time by soil bacteria to yield nutrients and other soil

materials; and,* non-biodegradable toxic contaminants which are not broken down by most

common soil bacteria and so will continue to poison soil communities for a

long time.

5.2.2.1 Contamination by inert materials

Fine particles of inert material such as silts, dust and mud can block soil pores

restricting soil ventilation and the natural drainage of soil waters. This can lead to

water-logging of the soils and the development of anaerobic conditions, disrupting the

release and re-cycling of nutrients resulting in a loss of soil condition and fertility.

This can lead to a decline in plant diversity and flow-on effects on the fauna as the

reduced plant diversity affects their habitat niches.

Road construction sites and operations such as gravel sorting can generate

considerable amounts of fine particles which must be contained on site as far as

practicable using dust control and silt / sediment containment measures such as fine

mist sprays and tarpaulins, and silt and sediment traps at all site discharge points.

Some inert materials such as cement dust or concrete fines and slurries can have more

damaging effects as they are more strongly bound to the soil particles by physic-

chemical reaction and raise the pH value of the soil to more alkaline conditions.

These represent more profound and permanent changes to the soil conditions and

recovery can take many years.

5.2.2.2 Contamination by biodegradable / organic materials

Organically rich biodegradable materials (such as some oil palm debris and wastes)

can impose a high oxygen demand on soils. Composting of oil palm debris in

windrows can generate a high oxygen demand which must be alleviated by frequentturnings of the windrow every two or three days in the first instance to allow adequateventilation and reduce the risk of an oxygen deficit developing in the surface soils.

However, the main environmental concem regarding the contamination of soils by

biodegradable materials is the potential for these to enter surface waters andgroundwater, where they may also generate oxygen deficits which may, in turn, lead

to anaerobic conditions and the poisoning of the water, rendering it unsuitable fordomestic purposes and causing significant loss of aquatic biota

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Another organically rich biodegradable material that has to be considered in thecontext of this program is human faecal waste (excrement). The potential publichealth risk is severe as the faecal coliforms, such as E. coli, and faecal streptococci,can survive a considerable length of time in soils and water.

5.2.2.3 Contamination by toxic materials

Toxic contaminants are particularly pernicious and can affect a wide area, spreadingthrough the food chain and through surface waters and groundwater from the initialsoil contamination site. Severe soil contamination, particularly by toxic materials, canhave a devastating affect on the affected area's flora and fauna, that may reduce thefloral diversity to just a handful of particularly hardy / tolerant species that are totallyunable to support the range of faunal species that previously inhabited the area.

Soils contaminated by toxic materials cannot be used for cultivation as their producewould pose a significant threat to public health, nor can local surface waters andgroundwater be used for domestic purposes for the same reason. As most of theinhabitants within the project area depend upon the cultivation of gardens and the useof natural waters for their domestic supplies, toxic contamination of soils must beavoided.

Contamination of soils by toxic materials can arise directly through the careless disposalof wastes and spilling of toxic materials such as pesticides (in the context of oil palmoperations these will include herbicides and insecticides), fuels, lubricants, solvents andcleansing agents.

Two common causes of toxic soil contamination that are relevant to this program are:* excessive application of herbicides or pesticides during the preparation and

operation of oil palm blocks.* oil, and other hydrocarbon, spills and leaks from vehicle and machinery repairs.

5.3 Surface Waters

5.3.1 Impacts on Surface Flow Regimes

The construction of roads can have significant effects on the natural drainage patternsof an area, particularly where the drainage pattem is a mosaic of small meanderingstreams that characterize many alluvial plains, including the Popondetta Plains. Ifadequate cross drainage is not provided, natural drainage paths are obstructed by theroad and its foundations, causing surface runoff to back up along the upstreamchannel, leading to flooding, surface ponding and water-logging of the soils on theupstream side.

As the stream backs up, water levels rise and spill over the road, which will exposethe road to erosion by surface wash, particularly if traffic continues to use the roadwhen it is partially inundated. Under these conditions, potholes quickly form as thefloodwater finds weaknesses in the road surface and penetrate beneath the compactionlayer, causing wash-out and surface collapse. Not only does this severely damage theroad and increase maintenance costs considerably, but also erodes considerable

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quantities of sediment from the road which can cause significant sedimentation of the

downstream channel and its habitats and users (see below).

Poorly designed or incorrectly installed culverts can adversely affect the natural flow

characteristics (such as velocity and turbulence) of a stream channel and can result in

substantial build-up of sediments on the upstream side which obstruct the culvert.

This causes a restriction in flow, leading to water backing up and flooding on the

upstream side, allowing water to spill over the road (see above).

5.3.2 Impacts on Surface Water Quality

Clearance of new blocks, preparation of soils prior to planting / re-planting, the

application of pesticides such as herbicides and fungicides, the application of

fertilizers and the reconstruction / upgrading of roads can all have potentially

significant impacts on the surface water quality. Four main types of impacts on

surface water quality can be distinguished:* sedimentation;* eutrophication;* toxic contamination.* smallholder activities

Other potential impacts relate to the contamination of surface waters with

construction materials, construction wastes, equipment repair / maintenance wastes,

and camp / personnel wastes.

5.3.2.1 Sedimentation

Clearance and Block Planting / Re-planting

High concentrations of in-stream sediments result from the erosion of exposed soil

surfaces during clearance and block planting / re-planting operations. Wind erosion can

carry soil particles into adjoining streams. Rainfall, especially the short periods of

intense rainfall that characterise the coastal areas of Oro Province and West New Britain

can mobilise large amount of sediment from exposed soil surfaces which will inevitably

find their way into the nearby creeks and streams unless effective measures are taken to

minimise the area of exposure and contain and trap the sediment before it can reach the

waterways.

Road Re-construction / Upgrading

Road re-construction and upgrading activities including:

* Culvert construction* Earthworks, equipment storage and repair areas, and stockpiles

* Cleared vegetation and any excavated material* Gravel Extraction Sites,

can be a significant source of waterway sedimentation. Aerial fallout from wind-blown

dusts and fine particles can cause some degree of sedimentation in waterways

(particularly increases in turbidity from the suspension of fine sediments), following

pathways described above for fertilisers, and dust control measures should be adopted at

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all road construction sites. However, the major source of waterway sedimentation fromroad construction sites is through sediment laden storm-waters entering streamsidecatchments or discharging directly into the stream.

Although all the road re-construction sites will generate sediments and constructiondebris, the amount generated by road surface leveling, gravelling and compaction willbe minor and except where the site is close to a stream or river, should not pose asignificant risk to downstream waters. However, at other sites the amount ofsediment and construction debris generated may be substantial.

5.3.2.2 Eutrophication

Eutrophication, the nutrient enrichment of natural waters, is not uncommondownstream of intense agriculture operations, particularly where these involve theapplication of synthetic fertilisers which are characteristically soluble in water andthus readily enter overland flows and the surface water table.

The excessive use of fertilisers (in excess of the prescribed dosages and rates ofapplication), and the application of fertilisers during rainfall, will increase theamounts of fertilisers entering the surface water table and any overland flow orsurface runoff that may occur. Fertilisers must be applied sparingly in accordancewith the instructions and guidelines given by OPIC for each type of fertiliser used.The block owners should also be instructed by OPIC to exercise care to ensure thatfertilisers are not applied during periods of rain, and preferably shortly after periods ofrain when all surface waters have drained into the soil.

Inevitably some fertilisers will move through the surface water table beyond the areaof the oil palm block and could enter adjoining creeks and streams if the blockextends to the stream edge.

The application of fertilisers during periods of high wind can result in the fertilisersbeing carried beyond their intended target, depending on the method(s) of application.In these circumstances, the fertilisers can affect the surrounding vegetation, with someplant species suffering adverse effects and over time this may affect the natural plantcommunities and soils around the block. In time this may affect the range of habitatniches and sustainability of the surrounding natural communities. Wind can alsocarry fertilisers into waterways through aerial fallout, directly into the creek or streamand indirectly onto adjacent soils and vegetation from where rainfall and surfacerunoff will carry the fertilizers into the stream.

5.3.2.3 Toxic Contamination

Herbicide Use

The risks of toxic contamination of surface waters arises from the inappropriate orcareless storage, use or disposal of herbicides and vehicle and equipment fuels,lubricants, solvents and cleansing agents.

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Road Re-construction

Road re-construction operations can also pose risks of toxic contamination of surface

waters where the operational site is alongside or close to a watercourse or water-body.

The risk of toxic contamination of site drainage waters and storm-waters comes from

a variety of road construction materials and wastes such as hydrocarbons (fuel and

lubricants), solvents and degreasers, concrete additives, paints and steel coating

treatments, and cleaning agents.

5.3.2.4.1 Smallholder activities

Now that oil palm planting is not allowed to be planted in buffer zones along

watercourses there is a tendency for smallholders to make use of this land for

gardening. This will increase erosion and contamination of the watercourse and will

require attention under the environmental awareness program provided under SADP.

5.3.2.5 Current strategy for the management of oil palm pests in Papua New

Guinea

The diverse array of insect pest taxa attacking oil palm in Papua New Guinea are

managed by adherence to the principles of IPM (Integrated Pest Management), using

the array of options available which have maximum effect on the pest and minimum

effects on environmental and human health.

The PNG Oil Palm Research Association Inc. (PNGOPRA) coordinates all elements

in the implementation of PNG's oil palm IPM. The backbone to the use of IPM is the

requirement for effective monitoring of pest populations. PNGOPRA undertakes

such monitoring and actively promotes, through training & awareness, the reporting

of suspected infestations by all stakeholders.

The approach used for the control of oil palm pests follows strict procedures:

1. Reports of infestations received by PNGOPRA.

2. Every reported infestation is visited by PNGOPRA's entomology staff,or followed up under guidance from PNGOPRA.

3. PNGOPRA conducts an assessment as to the nature of the infestation,taxon involved and the probable economic impact.

4. Recommendations are made by PNGOPRA detailing action to be

taken. Chemical treatment of palms, through trunk injection, may be

recommended. Recommendations are normally acted upon rapidly by

the industry.

There are nine major pest taxa attacking oil palms in PNG, of which five are regularly

implicated in causing economic loss. Other taxa are of less importance, although

sporadic and localised damage may occur and require intervention, this seldominvolves the use of insecticides.

Prominent taxa presently recognised as being of economic importance are:

Orthoptera: Tettigoniidae, (two genera, four species).

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Phasmida: Phasmatidae, (one genus, two species).Coleoptera: Scarabaeidae, (five genera, at least eight species).

Localised infestations of bagworms, (Lepidoptera: Psychidae) may occur. Suchinfestations seldom require control, due to the effective intervention of a wide array ofnatural enemies. PNGOPRA has rarely had to advocate the use of chemicalinsecticides to control bagworms.

Current management options used by PNGOPRA for the oil palm industry in PNGmay be summarised as follows:

* Biological control using parasitoids, and the encouragement of naturalenemies. A baculo-virus is used in conjunction with an aggregationpheromone to control Oryctes beetles, and the entomopathogenic fungusMetarhizium has been investigated as a potential control agent.

* Biological control agents are used to attack egg, nymphal and adult stages ofthe Tettigoniidae (Sexava) pest species.

* Biological control using "beneficial predators" (sensu lato); such as the insectsused in the control of Chromolaena and water hyacinth. Research has alsostarted on developing insect biological control for the weed Mikania.

* Cultural control, such as management of vegetation cover crop and nectarproducing plants to sustain populations of natural predators and parasites ofpest species.

* Mechanical control; such as oil palm sanitation, palm circle clearing, physical(hand) removal of pests in specific instances e.g. on young plantings, nurseriesand typically with attacks from Scapanes &Papuana.

* Accurate and strictly controlled insecticide application through targetedtreatment of affected palms, using trunk drilling and injection. Spraytreatment with chemical insecticide is not permitted.

The insecticide used for trunk injection of oil palm in PNG is methamidophos. Itshould be noted that the PNG Department of Environment & Conservation (DEC)approves the importation of methamidophos into PNG under the strict conditions that:a) it is for the sole purpose of controlling oil palm pests by trunk injection, b) that thetreatment is carried out by supervised and trained treatment teams, and c) that thetreatment is in strict accordance with authorised PNGOPRA recommendations. Thisform, and an attached map of areas to be treated, constitute PNG OPRA's authorisedtreatment recommendation; any deviation from these recommendations will constitutean offence and will be reported to DEC.

Prophylactic spraying of any pesticide in any area of oil palm, be it nursery orplantation, is actively discouraged. In fact under the PNG oil palm industry'scommitment to RSPO, prophylactic use of pesticides is not allowed and wouldconstitute 'non-compliance'.

5.4 Flora and Fauna

The principle impacts on natural flora and fauna result from the disturbance to, andloss of, habitat as a result of vegetation clearance during oil palm block preparation,

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hunting and harvesting activities of smallholders, and from the clearance of roadside

vegetation during road reconstruction and upgrading works.

5.4.1 Critical Habitats and Protected Areas

The provinces within which the Smallholder Agriculture Development Project areas

are located contain a variety of critical habitats (with high to very high conservation

value) and a number of protected areas and areas proposed for protection. These

provinces contain extensive forested areas as well as small to medium sized patches

of remnant forest which often serve as vital habitat refuges and wildlife corridors

allowing movement of wildlife and dissemination of plants through areas which

would otherwise be inaccessible to them. For many species this movement is crucial

in maintaining their geographic range and the number and diversity of local

populations.

OPIC has given assurances that no forested areas will be cleared in this program, in

fact the World Bank's Forestry (OP/GP 4.36), Natural Habitats (OP/BP 4.04),

specifically prohibits financing of such activities . It is understood that all the new

blocks that are designated to be cleared are located in areas where the vegetation has

already been highly modified through selective logging, often followed by salvage

logging and subsistence gardening activities, and where there is no forest or remnant

forest patches that would be threatened or encroached into by this clearance and the

establishment of the blocks. Likewise, all road reconstruction will be carried out

along existing road corridors where the roadside vegetation and immediate hinterland

is already modified.

The provinces in which the Smallholder Agriculture Development Project will operate

contain several gazetted Wildlife Management Areas (WMAs), Parks and other

reserve areas, as well as many areas which have been identified as having particular

conservation importance or value and have been proposed for protection or are

awaiting gazettal. All new blocks, and any re-alignment of road corridors and the

siting of gravel extraction operations and any other project-related activities must

avoid these areas and should not encroach within 100 metres of any gazetted WMAs,

Parks or Reserves.

However, the project provinces also contain other areas of particular conservation

value or environmental sensitivity which, although not gazetted or even proposed for

gazettal, should not be encroached upon. In order to expedite decisions on any

expansion of oil palm, a system of land categorization according to the area's

environmental sensitivity, conservation value and importance has been developed.

Any expansion of oil palm into new areas in which there is a likelihood that they

might contain moderate to high habitat sensitivity or conservation value should be

restricted until a Site Sensitivity Survey to assess the site's environmental sensitivity

and conservation value has been carried out by the project Environmental Officer.

One can distinguish several categories of land according to their environmental

sensitivity, conservation status, value and importance. Throughout most, if not all, of

the project locations (new blocks and road reconstruction sites), the land has already

been significantly modified through previous gardening or other intensive subsistence

59

use. With little if any of the original vegetation remaining, these lands arecharacteristically modified with typical secondary re-growth vegetation or arecurrently in use as gardens or fallow ground.

In areas where they occur, this type of vegetation and the habitats associated with itare widespread and modification, or even clearance, of this secondary regrowthvegetation from new block sites and from any road re-alignments is most unlikely tosignificantly reduce the extent or availability of this type of vegetation and habitat.Given its highly modified nature and the extent of its widespread coverage, this landis categorized as having a Site Sensitivity Nil under the Site Sensitivity system.

Within the project provinces there will inevitably be areas in which the vegetationappears to have been little modified and for which little is known of its environmentalsensitivity or conservation value. As these are areas where the vegetation does notappear to have been significantly modified, they are clearly not in the Site SensitivityNil category, and so are assigned to the Site Sensitivity I category. All areas assignedto this category have unknown conservation status or value, but by the nature of theirvegetation, could contain areas and sites of high or very high conservation value, orareas of particular environmental sensitivity.

Any project sites or locations occurring within a Site Sensitivity I land area must besurveyed in detail to determine whether they contain or could threaten any sensitiveenvironments, critical habitats or conservation values. An inspection survey reportevaluating the conservation value or importance of the area will be submitted toOPIC, the in each case.

In contrast, land with a clear and demonstrated conservation value that has beenrecognised as such by its gazettal as a protected area (Parks, Reserves and WildlifeManagement Areas) are assigned to Site Sensitivity 2 category. These are all landsfor which no program activity, operation or site must encroach within 100 metres ofthe boundary.

Several areas in the program provinces have been widely recognised as containingparticular conservation values or importance. In many instances these have beenproposed for gazettal and are currently awaiting endorsement and / or completion ofthe detailed application to the relevant government agency. Lands in this categorywill also be assigned to the Site Sensitivity 2 category.

If road reconstruction requires the re-alignment of the road corridor in an areacategorized as having a Site Sensitivity Status of I or 2 (see above), the re-alignmentmust be subject to, and dependent on, a detailed site survey along the entirety of thenew alignment by the Environmental Officer.

The detailed site survey of any new road alignments must extend back at least 250metres either side of the new alignment and 500 metres upstream and downstream ofany stream or watercourse crossings. This is to allow adequate accommodation of theoil palm blocks, which can extend up to 200 metres back from the road and allowingfor an additional 50 metres "buffer" between the block boundary and any sensitive orcritical habitat, local reserve or protected area. The survey must include consultationand input from all the landowners with land affected or adjacent to the new alignment.

60

A summary of the proposed Site Sensitivity land area classification system for use inthe identification of development sites in the Smallholder Agriculture DevelopmentProject is set out below:

Classification of Area by Conservation Value or Importance

Classification of Description of Vegetation in Area Development IndicationArea

Site Sensitivity Nil Significantly modified vegetation, Can be developed for oilcharacteristically gardens and palm and roadsfallow

Site Sensitivity I Conservation status / value Cannot be developed untilunknown, expert survey required expert survey done, andbefore any development can be the area / site is re-considered assigned to Site

sensitivity - Nil

Site Sensitivity 2 Conservation status known, high or Cannot be developedvery high conservation value, butarea is not formally protected.Conservation value recognised, Cannot be developed,area is gazetted as reserve, WMA cannot encroach withinetc. 1 00 metres of boundary.

5.4.3 Potential Impacts from Road Reconstruction

5.4.3.1 Impacts on Fauna

Potential impacts on fauna will include:

* Temporary loss of roadside habitat as a result of vegetation clearance;* Temporary disturbance of aquatic habitats as a result of disturbance of stream

flow patterns and downstream sedimentation;* Temporary physical disturbance of terrestrial fauna as a result of noise and

dust levels.

Impacts on terrestrial fauna are expected to be minor and temporary as the areasaffected are already disturbed and the species remaining have adapted to thisdisturbance over preceding years. Most of these track and roadside areas are currentlyunder garden fallow or "trackside" vegetation. Although these areas offer suitablehabitat for several species of bird such as wagtails, fantails and finches and a numberof butterflies and other insects, this type of habitat is common and widespreadthroughout the project areas

61

Impacts on aquatic fauna and flora are also expected to be minor and temporary asany disruption to stream flow patterns during culvert installation will be quicklyrestored and the potential impacts of downstream sedimentation will be controlled bythe rigorous application of sedimentation control measures at all road reconstructionsites adjacent to or crossing watercourses.

At the present time, the proposed road reconstruction program will not pose asignificant threat to the habitats in these areas, providing all parties comply with theOPIC Guidelines of 1998, which prohibit the cutting of forest areas for planting withoil palm, and that any road realignments are subject to an expert survey ofconservation status and value along the proposed new alignment.

5.5 Air Quality

Potential impacts on air quality are unlikely to be significant and will be limited to:occasional dust emissions (the project sites are in areas of high rainfall) some heavyplant exhaust emissions (road reconstruction only) and occasional wind-blownherbicide sprays during treatment operations (only applied by smallholdersinfrequently, and not at all project sites)

Impacts during road reconstruction will be of a temporary nature in any one locationand will not reach concentrations which pose a risk of significant adverse impactsover this short period of time. Once the roads are operational, the frequency ofharvest truck movements will not be sufficient for their exhaust emissions to causeadverse effects on air quality.

5.6 Noise

Noise impacts will arise from the road reconstruction machinery and from the gravelextraction, sorting and screening. The significance of these impacts will depend howclose they are to areas of human settlement

5.6.1 Noise from Road Reconstruction

In the case of road reconstruction, noise impacts will be temporary in nature in anyone location as the road construction advances and will not be of an intensity whichcauses significant adverse impacts over this short period of time. Furthermore, giventhe landowners desire for the construction of the roads and the short-term nature ofthe impacts, it is considered unlikely that noise impacts will result in any stated publicnuisance.

5.6.2 Noise from Gravel Sorting and Screening

Although gravel extraction itself generates no more noise than other vehiclemovements, the sorting and screening operations can generate higher noise levels. Asthese sorting and screening operations may be operating at any one site for severalmonths, this may cause some minor disturbance to nearby families.

62

5.7 Cultural & Archaeological Sites

The establishment of new oil palm block sites and the re-alignment or widening ofroads during reconstruction and upgrade has the potential to impact on sites ofcultural, historical or archaeological importance. This impact can be direct, where thesite is disturbed or damaged, or indirect, where access to or use of the site is adverselyaffected, disrupted or rendered inaccessible or unusable.

5.8 Public Disruption and Safety

The risk of public disruption and to safety is unlikely to arise from any new blockestablishments or replanting operations, but the reconstruction of the roads does posea risk. However, it is considered unlikely that there will be any concerns raised by oilpalm growers or other landowners during the road reconstruction as they all stand tobenefit from the improved access to markets and government services that theseupgraded roads will provide.

Stagnant water in depressions that result from road reconstruction works may providehabitats for the breeding of mosquitoes and other disease vectors. Such areas will bekept to a minimum as part of general site management procedures.

The accommodation of workers in villages during the construction phase couldpotentially lead to the spread of H1V/AIDS if adequate measures are not taken.

5.9 Oil Palm Milling Operations

The three SADP project areas are currently serviced by 7 palm oil mills. These millsin 2006 processed a total of 1.67 million tonnes of FFB; 38.6% of this wassmallholder crop.

The palm oil mills produce three main commercial products; crude palm oil (CPO),palm kernel oil (PKO) and palm kernel expeller (PKE) (Figures 4a to 4c). In additionthe, mills produce four main by-product or waste; palm oil mill effluent (POME),empty fruit bunches (EFB), fibre and shell. POME, in most instances, is treated in aseries of digestion ponds. The output from the final pond has a biological oxygendemand (BOD) of <100 mg/I (the legal threshold value) and this is discharged towatercourses and used to irrigate oil palm fields. NBPOL and Hargy Oil Palms areoperating EFB composting systems that use raw effluent. EFB is returned to theagricultural system as soil surface mulch or used to produce compost (with rawPOME) for nursery or field application. Fibre and shell is used, in all cases, in themill boilers to produce steam for heat and power generation.

63

- - + 4--

Figure 4areidFig re a j q , 32% refined in-country;l L .- i 68% exportedMill Processing 2006 i - 6 xtNBPOL, West New Britain

[Hoskins Project Area] Crude palm oil m-+ ' O% exported

I -OoO Palm kernel oil

I 100% used in-country as-gA W 4_ catfle feed

CPO mill Palm kernel 34,000 t I- > o Palm kernel /- - - -- - - - - - - - - - -expeller .

_ fCommercial product1029900t - Q, > CPO mill .

__ F8Pl olmileflet 85%" treated & icagdto watercourses; 15%4| -FFB < 0 ,0 sc" 8%eated an appieSd to plantation & compost system

CPO mill Palm oil mill effluent

I 100% used as i) direct soil mulch and ii) in compost

_ 1I production for nurseryCPO mill Empty fruit I

S \ bunches

I 100% used in mill boilers to produce steam for heatFibre I and power generation

ShellBy-product/waste

--- -++--------

Figure 4b { - 100% exportedMill Processing 2006 I .

Hargy Oil Palms, West New Britain I .[Bialla Project Area] Crude palm oil 100% exported

P -4 X__ __/O Pal nm kernel oil I

47% used in EFB--- composting system; 53%

Pl11,300 t used as organic fertiliserI Palm kernl Palm kemel I

- - - -- - - - - - - - - - --expeller -iCommercial product

294,700 t r 4 4 --

FFB CPO mill 53% treated & discharged to watercourse (<100 mg/l| BOD); 47% used in EFB composting system

CPO mill <Palm oil mill effluent

I 47% used for compost; 53% used as plantation soil

\P < Empty fruit IZfw @ < bunches I

100% used in mill boilers to produce steam for heat\ Fibre - 1 and power generation

ShellBy-produc4waste

64

Figure 4c 1 00% exported

Mill Processing 2006Higaturu Oil Palms, Oro Province E

[Oro Project Area] Crude palm oil 100% exported

0 II Palm kernel oil I

P-1000e 7 exported for animal

m P l k el 5 t I --------20 ~Palm kernel I- - - - - - - - - - - - - - -expeller -

Commercial product345900 t

FFB 2 L Treated (<100 mg/I BOD) and by May 2007 will beused to irrigate plantation for fertiliser substitution

CPO mill I

6 I /2+ Palm oil mill effluent

I ,100% used as i) direct soil mulch and ii) in compost

I 6I production for nursery

o Empty fruitbunches I

I Fibre 100% used in mill boilers to produce steam for heatand power generation

ShellBy-product/waste

All palm oil milling companies have stated that they have sufficient milling capacity

to process a projected 20% increase in smallholder FFB production in the period 2007

to 2012. All milling companies have planned investment to increase processing

capacity to address projected increases in plantation and smallholder production

(Table 5.1). It should be noted that all milling companies are committed to collect

and process all smallholder crop in priority to plantation crop. This has been

exemplified in recent years where Higaturu Oil Palms, when experiencing a

processing/transport capacity limitation, closed down production of areas of its own

plantations in order to continue handling smallholder crop.

Table 5.1 FFB milling capacity' estimates in the three SADP project areas

Year NBPOL Hargy Oil Palms Higaturu Oil PalmsYear N° mills Est capacity N° mills Est capacity N° mills Est capacity

2007 4 240 2 90 1 75

2008 4 260 2 90 2 95

2009 4 260 2 90 3 115

2010 5 300 2 90 3 115

2011 6 360 2 90 3 115

2012 7 400 3 130 3 115

tonnes FFB per hour

65

6. BIBLIOGRAPHY:

Reference

Ball E. and J. Glucksman (1980) A limnological survey of Lake Dakataua, a large calderalake on West New Britain, Papua New Guinea, with comparisons to Lake Wisdom, a youngernearby caldera lake. Freshwater Biology (10)73Beehler B.M., T.K. Pratt, D.A. Zimmerman, (1986). Birds of New Guinea. HandbookNumber 9 of the Wau Ecology Institute. Princetown University Press, USA.Beehier B.M (ed) (1993). Papua New Guinea Conservation Needs Assessment. Governmentof Papua New Guinea/Department of Environment & Conservation.Bishop K. D, L. Broome, (1979). The Scrubfowl Megapodius Freycinet eremite in WestNew Britain.Bishop K.D. and L.S. Bishop, (1980) Wildlife of the Kapulak Area, Papua New Guinea,Department of Environment and Conservation.Clark Peter (1996) A consultancy report for the Oro Conservation Project.Coates B.J. (1985). Birds of Papua New Guinea: Vol. 1 Non-Passerines. Dove Publications,AustraliaCoates B.J. (1990). Birds of Papua New Guinea: Vol. 2 Passerines. Dove Publications,AustraliaDepartment of Environment and Conservation (1997). Draft Environmental PlanGuidelines for Agricultural Development Operations - Specific Guidelines for Oil PalmDevelopment Projects. Government of PNGEllingson D.(2001) PNG Oro Smallholder Oil Palm Development Project: Study of theSmallholder Oil Palm Sector - Achievements & Potential for Future Development.Flannery T., (1995). Mammals of the South-West Pacific and Moluccan Islands. AustralianMuseum/Reed Books.Hargy Oil Palms Ltd. (2000). Environmental Plan Application for the Navo Oil Palm Milland the Ibana Oil Palm Plantation.Higaturu Oil Palms Ltd (various) Environmental Plan ApplicationsHinton, A. (1978?). Guide to Shells of Papua New Guinea -Robert Brown & Associates.King B (1989). Does Wildlife Management By The People Work? A Case Study of ThePokili Wildlife Management Area, Papua New Guinea. Science in New Guinea 15(3). 111-118.Mercer C.W.L., (1999). PNG Conservation Project, Oro Province: Queen Alexandra'Birdwing Butterfly Research and Conservation: Final Report. AusAID ReportMoore S. (2006). Assessment of the Effects of Smallholder Oil Palm Activities on theBiology of Streams in the West New Britain and Oro Provinces of Papua New Guinea.Landcare Research, New Zealand.New Britain Palm Oil Ltd (various). Environmental Plan ApplicationsNicholls S. (2003). OPIC Roads and Bridges Construction Oro Province, Papua New Guinea,Environment Management Plan. Report prepared for OPIC and AUSAid.O'Shea M. (1996). A Guide to the Snakes of Papua New Guinea. Independent Group.Parsons M.J. (1992). The World's largest Butterfly Endangered: The Ecology, Status andConservation of Ornithoptera Alexandrae (Lepidoptera: Papilionidae)

66

7.0 APPENDICES

7.1 Letter from DEC excluding this program from DEC requirements

7.2 List of Stakeholders Consulted

7.3 Stakeholder Workshop Meeting Report

7.4 Nominated Reserves Schedule - West New Britain Province

7.5 RSPO Principles & Criteria for Sustainable Palm Oil Production

67

Appendix 1

Letter from the Department of Environment &Conservation Confirming Status of the SADP as a Level 1

under the Environment Act 2000

68

>f-0 @5d Vtl PfiW0°Lt

DEPA1R1NMKN1 OF IENVIRONMEN I &( )V Vt1O.

ENVIR(ONNIEN DIVISION

[f.i6vllf 16. 5325401112 W,*o41t. N6rtrmi,J t~,e 'lpfDiwkt1.mAi. t)dl drv brfNP. Box 660 4140R0X0,k CD )

POP-S NMs "Of

fI re 23/5!2006

Mr. Felix Bokanl Our Referem,,

a/General ManagerOil Palm Industr/ CorporationP 0. Box 73,POPT MORESBY,Notional Caritcl District.

l I

Dear Sir

Re: Notice of Intention to Carry Out Preparatory Work on Smaliholder Agriculture

Development Pioject

Furtner to yoLur nolice of intention to carry out preparatory work received on l8th April 2006.

please note that your proposed activity is not prescribed under the Environrmort (Prescribed

ActivitieSi I I"-

Consequentiyv you dc not require an Environment Permit in order to carry out the proposedi

agriculture project in West New Britain. filne Bay. New Ireland and Oro Provinces.

'AKE NOTE thiat w*en carrying out rioe proposed village oil palm development project, it is

imperative that tne holders of the village oil palm blocks are advised of the neec to adhere

to all legal requirements Under the Envi'onment Act 2000, including complying with relevant

environmental codes of practices and guidelines,

Although, 'he proposed activity is not prescribert under the Act, the Director of Environment

may use appropriate provision under the Act to call uo or require owners of village oil palm

oiOCks to aoply for cn Fnvironment Permnit in the event where there is a risk of environmer.tal

raicrm occurring due to oil palm cuitivotion.

Do riot hesitate to cortact this Offite if additional clarification is required.

Yours Sincerely.

Deputy SecretaryDelegate of tre.Deportment of Environment onc Conservation

69

Appendix 2

List of Stakeholders Consulted

70

Stakeholders Consulted

Kimbe/Hoskins

OPICFrank, Project Manager - KimbeOtto - Manager KimbeLyn, Field Officer, Mamote

PNGOPRACharles Dewhurst, Head of Entomology

Catholic ChurchFr. Benjamin Agea - Administrator Cathedral, Kimbe

Daniel Somi Mirmirio, Financial Administrator, Kimbe

Mathias Ire, Diocesan Caritas Coordinator

Mr. Raymond Laupo, Youth Coordinator

Sr. Marilyn Babe, MSC, HIV/Aids Coordinator,

Fr. Joseph Mandres, MSC, Parish Priest Silanga

Erwin Batari, Family Life Coordinator

Women's RepresentativesAlice Billy, Women's RepresentativeElizabeth Warpen, "Mama Luz Frut" Representative

Mosa L.L.G.Bonly Tiun, Vice President

Hoskins Oil Palm Growers AssociationWillie Nilmo, ChairmanPaul Siune, Public OfficerBruno Valuku, Deputy ChairmanTana Yasunga, ConsultantPeter Robbie, Executive Committee - Tamba L.S.S.

Jack Sandanu, Executive Committee - Buvussi L.S.S.

Bruno Sengo, Committee - Kavui

Block holders

Jack (from Pomio), Customary Purchase Oil Palm Grower, Kimbe

Gabriel (Babata Villager) VOP grower Silanga area

LandownerSteven Babo, Vavua Village

Commercial Oil Palm

Late Tapas Pokas, Smallholder Development, New Britain Palm Oil

Tony Arona, Environmental Manager, New Britain Palm Oil

71

Bialla

OPICSteven KamisEssau Morris Ilau, Director OPIC Board, Bialla

Bialla Oil Palm Growers AssociationJohn Nema, Member Bialla Grower's AssociationJoe Hassi, Chairman, Kabaiya L.S.S.

Bialla LLGNolene Pidik, Community Development OfficerJames Mengenen, OIC Bialla Health Cetre

Block holdersRobert - block holder Barema

Commercial Oil PalmCosmos Kauwe, Company Secretary, Hargy Oil Palms

Oro Province

OPICMr. RukiHenry - Field Manager, Sirovi Division, OPIC

PNGOPRARoss Safitoa, Entomologist

ChurchesStephen Raurela, HIV/Aids Coordinator, formerly Youth Coordinator, AnglicanChurch, Popondetta

SchoolsMs Wafia, Popondetta Primary SchoolSelby Jamba, Manager

NGOsAlbert, Conservation MelanesiaClement Kerahu, Oro Oil Palm Growers AssociationEddie Malaisa, Environment Officer, Oro Provincial Government,

Women's RepresentativesOlivia Bunari, President of Provincial Council of Women and Member of ProvincialHouse of AssemblyEvelyn Pukari, Community Development Officer (Women's Office), Oro ProvincialGovernment,

72

Block holders

Makinton - VOP block holder Sirovi DivisionLSS block holders Sirovi

Commercial Oil PalmGraham King, General Manager, Higaturu Oil Palms Ltd

Port Moresby

Department of Environment & Conservation:Rose Assistant Secretary Parks and WildlifeJames Sabi, Assistant Secretary Biodiversity Surveys

Others

Dr Robin Torrence, Principal Research Scientist, Australian Museum re

Archaeological sites West New Britain

73

Appendix 3

Stakeholder Workshop Report

74

Environmental and Social Assessment

of the

Small Holder Agriculture Development Project

Date: 18th July, 2006

Venue: Holiday Inn

Prepared byDouglas Environmental Services

July 2006

75

Introduction

The smallholder oil palm development project is designed to rehabilitate the existingsmallholder oil palm growers. It is not intended to expand oil palm growing into newareas, though it is designed to encourage an increase in oil palm growing along theexisting network of oil palm roads to ensure that the rehabilitation of the road networkis economic and sustainable in the long term.

A meeting of interested stakeholders, including NGOs, Government Agencies,Commercial Oil Palm Growers, Governors of Oil Palm growing Provinces and AidAgencies was called to allow them to express any concerns they may had with regardsto the existing and potential social and environmental impacts of the project.

The Meeting was opened with a few introductory remarks by Charles Yala of NRI,and member of the social assessment team, at 1.50 pm

A Ministerial keynote address was presented by Secretary for the DepartmentAgriculture and Livestock, Mr. A Benjamin.

After the keynote address the Team leaders for the Environmental Assessment andSocial Assessment teams presented background to the project and expected outcomesof the workshop.

The meeting was then given to the floor for participants to present issues that theyhad.

Summary of Environmental and Social Issues Raised

Many of this points raised were not directly related to the environment or socialissues, nor were they always related only to the SADP a full summary of the issuesare included below under Stakeholder Issues.

Environmental concems were limited to:

1. forest clearing in Talasea for oil palm development2. stream health3. the provision of personal safety equipment for smallholders when applying

herbicides

Social concerns related to:

1. problems arising from the sale of customary land2. expansion of descendants of settlers onto customary land3. children working on oil palm and neglecting schooling4. lack of awareness among growers if they were going to be the ones who will

be paying for the maintenance of the upgraded roads

76

Stakeholder Issues

Non Governmental Organisations

PNG Community Rights

Raised the following issues

Environmental

* the safety of growers safety was allegedly being neglected, this included the

provision of appropriate safety equipment when herbicide spraying

* forest was being cleared for Oil Palm development in Talasea

Social* there were current land problems related to the VOP.

* The current "sale" of customary land to others for VOP blocks had no legal

basis under the National Constitution* children were allegedly working on oil palm when they should be at school.

* how was the current World Bank loan to be repaid? Would it be from Farm

gate payments to growers?* if growers were going to have to pay for road maintenance they were not

aware of this.* 30% of national budget was going into servicing of loans and because of this

money was not going into social areas such as new schools

General

* serious health problems were allegedly arising in Oro due to waste from Oil

Palm in Oro* queried how AusAid funding previously given for roads was used.

* workers rights were allegedly not being looked at including right to have

unions* although Oil Palm Companies are all accredited to IS01400 there was

allegedly no independent verification. Serious independent audits were

needed.* payments for lease agreements were different in different provinces and there

was a need for one system.* need to look at other options than oil palm

* cost benefit analysis needed

Partners with Melanesia

Wanted to know whether the project was designed to

* solve current problems in existing projects ;or

* expand oil palm in Oil Palm provinces.

And if it was expansion how the existing problems be addressed

77

Oil Palm Industry

Brown Bai POPA

Mr. Bai pointed out that Oil palm was the leading export commodity and that itsupported 240,000 people. It also provided a better income distribution than withother crops and that it contributes considerable revenue to the national government.Yet in spite of this it was not receiving basic support from national government.

While there were many issues that he had with regards to the SADP his key concernwas whether the project still had the support of the Government?

Ofifice of the Governor, West New Britain Province

Concerns of the Governor's Office

Socialthere was migration out of the original land settlement schemes by third andfourth generation settlers of non indigenous WNB into customary landthrough "customary purchase" as there was no more state land that could beallocated

General

* Some of the first and second generation settlers were requesting governmentassistance to establish oil palm in their own province so they can go back.Third and fourth generation settlers regarded themselves as belonging to WestNew Britain.

* VOP way to go forward* Rural Development Bank does not loan to VOP because customary land has

no title

The Governor while generally supportive of the SADP though he did express someconcerns. These were not directly related to the social or environmental impacts of theproject. but are summary of them is included:

* accountability for the loan and who was going to repay it?* Provincial governments would like ability to take out such loans themselves* whether the VOPs would really benefit from it?* need for wider consultation by OPIC* What the economic gains would be from the project?* the West New Britain Province was trying to set up its own mill but was not

receiving support* there was concern with the current pricing system and that Central Agency

Concultative Committee (CACC) had been instructed to initiate review. TheGovernor suggested that a realistic price should be set by external force.

* There was a need to review the role of OPIC to ensure it meets present dayneeds

* OIPC should have a National Independent Board:

78

* the current infrastructure of the PNG oil palm industry was poor whencompared the social infrastructures of Malaysia oil palm estates

* Oil palm should be promoted in other provinces

Responses to issues

Charles Yala - NRI

Concerns regarding customary purchase of land are being addressed by National LandDevelopment Forum Task Force who will soon be presenting its recommendations onland to the public.

Rural Development Bank

On concerns that loans were not available to VOP their representative from the RuralDevelopment Bank pointed out that the bank is starting to give loans to VOP and thatthey also give consideration to:

* Housing* Diversification projects* Solar power* Oil palm for fuel* School funding through cooperatives

Felix Bakani OPIC

In reply to various issues raised

* OPIC realised that the VOP system was the way forward and had been placingemphasis on VOP development since 1996.

* That the people of West New Britain Province should stop "selling" their landif they don't want outsiders. It was also making smallholder oil palmdevelopment more complex

* The Rural Development Bank was making loans to VOPs in Milne Bayalready

* continued government support for the SADP was also a concern of OPIC. Hewas aware of rumours that support for the project was waning

Department of National Planning and Monitoring

Concerns by various speakers related to government support* National Planning Office had not met with DAL and OPIC at programming

stage* Higher levels in Government talk about the project* Poor implementation of the Forest Conservation Project led to bad relations

between PNG government and World Bank* capacity of implementing agencies and provincial governments often poor* there was a stop on new loans for 3 years

79

* the national government was concerned that many loans were benefiting selectprovinces while others were being neglected

* there have been previous donor funded road projects (World Bank & AusAid)How and that SADP needed to draw on experience from these past projects. Ithad to be remembered money is loan money and has to be paid back.

Brown Bai

On concems regarding expansion of land taken by settlers for oil palm pointed outthat the settlers were brought in by the national government and that they had a legalright to be there. They only send back to their own provinces if necessary supportavailable for them there.

Meeting closed at 4.30 pm

80

Appendix 4

Nominated Reserves Schedule; West New Britain Province

81

TV .' ..

TOURI9!. SITES PROTECTION ACT M1993]

RECOMMENDATION. OF SITES FOR PROTECTED

ATPURIST SITE LIStING

Acting on (a) recommendation(s) made to the West New

Britain Tourist Board, the following areas or sites

are. proposed Protected Tourist Sites, pursuant to

Sections 3(1) and 3(2) of the West New Britain Tourist

Sites Protection Act (1993).

Recommendations are available for inspection at the offictt-

°o the Chairman of the West New Britain Tourist Board.

Representations within 30 days from the date of publication

of this Gazette are invited from all persons and authoritibs.,

including,the Community and Local Government, which in its

opinion have an interest in the matter.

Dated this 11th day of October, 1993.

*A/k 'ELIAS BATARI

DEPUTY PREMIER

MEINISTER RESPONSIBLE FOR TOURISM MATTERS

82

82

PROPOSED PROTECTED TOURIST SITU LISTING NO. 1 (OCTOBER 1993)

WUf SWUitsI 18*11 |l ii

KIMBE DISTRICT

BALI 53VtITU 18PULASE 5GARUA BILEK? 14M WSA Z

EAST KOVE 2WEST MOVE 2

GLOUCESTER DISTRICT

RALIAI 6lARIAt 0XILKNGE-LOLO 14

BIALLA DISTRICT

CIUPRAL WARANA! S8tALLA 2EAST NAXAMAA 4

5NDRIAM DISTRICT

WEST AROWC 25EAST AROWE 14GIMI-RAUTO IKANDRIAN COASTAL 12PASSIS MANUA 0PALANG ASENGSENG IWEST GASMATA 0EAST GASKATA 0

M. BENJAMIN

CHAIRMAN

83

IDENTIFXcAflcu siiNIFICASu mAn WaNE SCALI GM "m I

lINBE DISTEICT - BAL CtUSfTUu

PENATA-KETINERAVE

I.LANBA&ST0. HISTORICAL BALI 1:100.000 A 61 -63 IIRI

CULTURAL . L 37 F4l

2. VATEPAI STONE ..

3. KAPURAARAII STONE " n H

4. RAPORO SQIK H ' ' *

S * CNrANATBTA STONE '

6.TABAAANABAS STONE . * - * -

7.R& BOLOKURUIO STONE n - ,

8.NALE STOW! a E

9.BUKEI STOQU N n -

1D.UVA STONE - - n -

11 .RUNrTAPU STONE - - X a

12.VATUXURU STONK n n

13.BAmALIt STONE . n

IDEWlfTlFCAfl SIGNIFICANCE AREA NINIE SCALE mT RI GVT/SYATION

INSE DISTRIC1 - BALI COXSTITfURyC

14.VATrUNa STONE UISTOltICAL BALI 1:I00.000 A 61 -63 NlRR

CULTURAL L 37 -41

15.VAflMBIANIa (LAND) STONE t Il

16-KILILAO STONE *

17.VORUEURUXO STORE t ,

tt a

1B.VATKMUBIAUG(SEA) STONE

19.NAWADU AIICINT VILLAGE SITE

20-VATlTuBiAca ANCIENT VILLAGE SITR " -

21.DAVALIVALI ANCIENT VILLAGE SITE ' .

22.VUNAPUTU ANCIENT VIlLAGE SITE tta

23.NALOCIWo ANCIEN VILLAGE SITE

24.LUBIRI SPIRIT PLACE tta

.,U.

25.-MAU SPIRIT PLACE t tt -tt

26.WR01 . SPIRIT PLACE

I)..l

IDENTIFICATION SIGNIFICANCE AREA NAMY -.SCAI GRID NUYZR GO/STATION

LINDE DISTRICT- BALI CONUSITUENCY

27.VUIEJfIO SPIRIT PLACE HISTORrCAL BALI 1:100.000 A-61 -63 MAKIRICULTURAL L 37 -41

28.NARRUNRKAIA SPIRIT PLACE ' - -

29.DALIIABRXE SPItIT PLACE

30.UVANBLUBIRI CAVE S f ' 'N

31MAGAPUUOKO RECRUATION AREA SOCIAL ' '

32 .DAKMITUNU COMMUNAL PLANTATION SOCIAL ' ' '

33.VUNERAIO COMMUNAL PLANTATION SOCIAL f ' f N

34.MHRUWRUR REEF MARINE RESOURCE n f ft N

35.BAROBARO REEF MARINE RESOURCE " ' t

36.BUEUMKUTILE REEF MARINE RESOURCE ' ' N

37.RAUNAGEPE REEF MARINE RESOURCE '

38.TAGARILIMAGA REEF MARINE RESOURCE -- -*:* . , -

, - 39..LELEVORO-MARUBE REEF MARINE RESOURCE ' N ' -

40.RNGAAA MARINE RESOURCE ' ft

IDENTIFICATION SIGNIFICANCE AREA NAME SCALE - GRID MISN GOVT/S ATION

XKnE DISTRICT - BALI CONSIITUZC,'

41.DAVALrVALI REEF MARINE RESOURCE BALI iuloo.aao A 61 -63 MAKIRIL 37 -41

42.GmUdAD REEF MARINE RESOURCE . ' n

NAVADA0

43.EIMAEAVU REEF MARINE RESOURCE n

44.MUVODOMO KEMAEALARO REEF MARINE RESOURCE '

45.BULuBULUTU REEF MARINE RESOURCE K " K V

46.MAHz REEF MAxINE RESOURCE " -

47.TABeLAVEAR REEF MARINE RESOURCE K

48.VAHAROI REEF MARINE RESOURCE a

49.NARAGA ISLAND WILDLIFE RESERVE ' . A 96 -98 NINGAUMAgINR RESERVE L 33 -35

S0.NARAGA REEF MARINE RESERVE " A 98- 00 -'L 33 -37.

51.NARAGA NOT SPRINGS GEOLOGICAL S A 96-5L 35

HALANGGAI

-52.SEVt (7) ENGRAVED BOULDERS BfISTORICAL K A 58- NIGILANICULTURAL L 39.5

IDENTIFICATION SIGNIFICANCE AREA NAME SCALE GRID AMIER GOVT/STATION

RIMBE DISTRICT - BALI CONSTITUENCY

IALANGGAI

52.SEVEN (7) BOULDKRS ENGRAVED HISTORICAL BALI 1:100.000 A 58 NIGILANICULTURAL L 39.5

PENATABOTONG

53.ONE (1) BOULDER ENGRAVED ' S A 56.5L-37

RrrBE DISTRICT - VITU CDNSTITUENCY

GAROVE 00

1.SUNKEN JAPANESE BARGES WAR HISTORICAL A 82 -84 VITU-JOHANN ALBRECHT HARBOUR L 78 -79

2.DUDU STONES CULTURALr. A 79 -80-JOHANN ALBRECHT HARBOUR L 87 -88

3-ST. MICHARL'S ISLAND RECREATIONAL U A 82-JOHANN ALBRECHT HARbOUR L 77 -78

4.BABE SPLIT ROCK PASSAGE GEOLOGICAL " A 80 -81-BALANGORI 2 L 74 -75-

5.NANGUIANGURA CAVE GEOLOGICAL A 82°-83°-BALANGORI L 72°-74-

6.JOHANN ALBRECET RARBOUR WAR HISTORICAL A 79 -85GEOLOGICAL L 74 -78.5MARINE RESOURCE

7.JAPANESE GUN WAR HISTORICAL A 82-TAVUTU MOUNTAIN,LAKwA L 79

IDENTIFICATION SIGNIFICANCE AREA NAME SCALE GRID ENMBR GOVT/STATION

KIMBE DISTRICT VITU CONSISTUENCY

8.NWATERrALL WATER RESOURCE BALI 1:100.000 A 80-81 vrto-LAMA PLANTATION RECREATIONAL L 80

9.TAVURt R8CE MARINE RESOURCE * A 77 -78-LAMA L 80 -83

10.WAIGERE REEF HARINE RESOURCE - A 80--81 S

-LAMA L 84

11.ELA REEF MARINE RESOURCE A 84 -85 a-NDOLI L 83 -84

12.JAPANESE CAVES WAR HISTORICAL A 83'-84--METO HARBOUR L81 -82-

13.TWO (2) JAPANESE GUNS WAR HISTORICAL * , S --METO HARBOUR

14.JAPANESE NAVAL BASE & CEMETERY WAR AISTORICAL-METO RARBOUR

15.METO HARBOUR (PETERHAVEN) WAR HISTORICAL " 5 '

RECREATIONAL -

16.LAnE TANGOLE WILLIFDFE A84-LAMBE BIOLOGICAL * L 72 -73

17.LAXE NALOVU WILDLIFE n A 84--B5 '

-LAMBE L 73--74

18.LAKE MANDOnA WILDLIFC 5 ' A 85 -86 -

-LAMBE L74 -75

KIllE D$STRIC? T PULABE CONSTITUENCY

.PORILI WILDLIFE MANAGEMENT AREA WILDLIFE ANIA - A 74 -88- HOSKINSBIOLOGICAL L Z5 -41

IDENTIFICATION SIGNIFICANCE AREA NAME SCALE - GRII WNffER GOVT/STATION

KINDE DISTRICT - PULABE CONSTITUENCY

-2.LAVDGE HOT SPRINGS GEOLOGICAL AMIA 1:100.000 A 78 -80 HOSKINS-1 TL 33 -35

3.Mount BANGO (PAGO) GEOLOGICAL A 82 -84- HOSKINSPROP.NAT.PARK ' L 25--27-

4.Mount WITORI GEOLOGICAL " A84-85 HOSKINSBIOLOGICAL L 20 -22-

5.PYRAMID mountain GROLOGICAL - A 77-79 HOSKINSBIOLOGICAL L 25-27

EIBE DISTRICT - CARUA BILEXI CONSTITUENCY

l.Mount MULULUS GEOLOGICAL DAGI A 84--86 HOSKINSBIOLOGICAL L 9-11

2.Mount HATALELOK GEOLOGICAL - - A 88 -90 HOSKINSBIOLOGICAL L 9-11-

3.Mount OTO GEOLOGICAL A 90--92 - HOSKINSBIOLOGICAL L 11-13

4.ROCK ART ON RIVERAMIE HISTORICAL * A 90 -91 -HOSKINS

-WAISISI CULTURAL L 14 -15

S.LORXO NATIONAL PAHK BIOLOGICAL BANGULA - A 97 -99 HOSKINS'L 26 -27

**6.YULAI ISLAND RECREATIONAL TALASgA A 6 -8 HOSKINS%-STETTIN BAY PROP. WMA L 21 -22

7.VULAI ISLAND REEF MARINE.RESERVE * A 5.5 -8.5 HOSKINS-STETTIN BAY PROP. WMA L 20 -23

8.WALD REEF MARINE RESOURCE n ' A 6 -8- HOSKINS-SIETTIN BAY L 18 -20

SCAL

IOEMTiricATION INFCNE AE AEu DDtE OlSAIl

wasE anICr - WaUA BILE t CONSTITUERCY

9.EOu iERtF MARINE RESOURCE _TALASFA t:100.UO -A 6 -9 NoSKIWS

-STETTIN

LAY

1OG.MRGWTTS REEF MARINE uRSOURCE a r6

-STETTIN SAY 6 -8

ll.ROBRTS REEF MARINE RESOURCE - A99 -00

-StREsTlN RAT L 9 -10

12.RERSOK REEF MARINE RESOUWCE A 98 -99

-STUIW BAY L7

13.REEF SITUATED BETWEEN MARINE RESOURCE A4 6

MARGETTS AND H0GU RgEFS

14.KlMBE ISNID MARINE RESERVE 823 -24

-KIMBE BAY

lINS DISTRICt - HOSA COiMSTlTOENCY

t.LAKE LALILr INCLUDIAG WATER RESOURCE DAGT-ANIA A 75--76

M00 METER BUFpER ZONE PROPt NBA

2.MOPIR HILL HISTORICAL DAGI L 98 -99BE

-MOSA ARCEKOLOGICM

INBE DI5S'RIIC - KINDE !onsIECY

1 .SVIE FR I ARCHEoLOGICAL TALASEA A87 '-887-WAbINDI

IDDETIFICATION SIGNIFICANCE AR3A NAME SCALE (RI nEn Go/STATION

KInoE DISTRICT - EST NAKOVI CONSTITUINCY

1.BrIaXA PISSION STATION ARCHEOLOGICAL TALASEA )t100.000 A 13 -- 14 TALASEAHISTORICAL - L 712.EBODUSA ISLAND ARCHEOLOGICAL A 16-GARUA HISTORICAL L 75-3. GARALA ISLAND ARCHEOLOGICAL n A 14 .-GARUA HISTORICAL T. 77 -784.VOGAUAEAX PAINTINGS HISTORICAL A A 22 -CULTURAL L 695.ELA REEF MARINE BIOLOGY - A 24 -25-WANGORI BAY

L 84 -656.1MAK DAEATOA WILDLIFE A 38 -46PROP. NAT. PARK L 72 -83KIMBI CONSTITUENCY NE BAXOVI COuSTItuENCY

1.GARU WILDLIFE MANAGEMENT AREA WILDLIFB RIES-'"ASEA A 92 -103 TALASKABIOLOGY L 22 -712.PAO HOT SPRINGS GEOLOGICAL RIEBBECK A 3 -4 TALASEA-GARU ARCHEOLOGICAL L 30 -31-3.POLUNAI CAVE HISTORICAL RIEBECK A 11 TALAS-GAVEMBOKO CULTURAL L 30--314.nount WEtLCEER GEOLOGICAL TALASEA A .00 --. 01' TALASEA-GARU BIOLOGICAL, L 69 -71'S. mount XRUKI GEOLOGICAL TALASRA A 93 *-951 T1AABEA-GARU BIOLOGICAL L 69 -72

IDEWIFICATION SIGNIPICANcE AREA NAME SCALE GM NUIFE GOVT/STATION

KITJE DISTRICT -EAST ROVE CONSTfT'wnuCY

1.5SB3OL ISLAND PORESTRY RIECR 1:100 -"O A 95-5 S.wvtFTI

-KALAPIAI MARINE WILDLIFE

L 99

2.LAKE MAMO AND SURROUNDING NATURE RESERVE NANO A 76--80 SILOVUTI

SWAMPLANDS BIOLOGY

L 84 -89

KINBD DISTRICT - WEST lOVE COXSTITUENCY

l.UnUYURE ISLAND RECREATIONAL ARIA - A 90 HILIMATA -.

-NULIGIAMI MARINE RESERVE

L 67

2.UWVCURZ ISLAND REEF MARINE RESERVE ARIA L A 90 -91 6 ILINATA

.L 66.5--67.5

GLOUCESTER DISTRICT - KALIAI CONSTITUENCY

1.AXDOO SOGO ROCK ENGRAVINGS HISTORICAL ARIA A 80 -81 IBOn

a PAINTINGS CULTURAL

L43 -44

-IBOEI

2.PD1 RIVERBED ROCK ENGRAVING HISTORICAL ARIK

IBOKI

-IO3I CULTURAL

Y3.TITIKOLO ROCK ENGRAVINGS

HISTORICAL ARIA A 78--79 180I

a PAINTINGS CUTURAL

L 47 -48

-I1OKI/ARIA

4.Anl0R ROCK ENGRAVINGS HISTORICAL ARIA A 67 -68 IDOXI

-BAGAI CULTURAL

L 4U4 -45'

5.5UNKEN GERMAN BARGE WAR HISTORICAL ARIA A 71.5 IBO1R

L47

-KWARO,ARIA RIVER

111/

IDENrIFICATION SIGNIFICANCE AREA -AXE SCALE mGD ONn MoW/STATION

CLouCEStER DISTRICT - KALIAI CONSTITUENCY

6. BALAI-WASUM TUtBUNA ROAD HISTORICAL ARIA 1:100.000 lBOXTWILDLIFEBIOLOGICALRECREATIONAL

BAGA! - BULAWATNE * A 65:-67L 45 -54 IBOXI

BULAKATNE- MAKUKLI *A 60 -66 IB011L 54-58

KEURLI-BATAULING S A 54 -61 IBOXIL 57 -58

BSATRLING-AIDAUS A 47 -54. .ESELI

GLUCZSTER DISTRICT - KILENGE-LOLO CONSTITUENCY

1.GLOUCESTER AIRSTRID & VICINITY WAR HISTORICAL GLOUCESTER - A 96 -97 GLOUCESTER-GLOUCESTER STATION L 57 -59

2.6ALF.SALz WAR RELICS WAR HISTORICAL MURCADHA A 95 GLOUCESTER-GLOUCESTER STATION L 64-

3.TARGET SILL WAR RELICS WAR HISTORICAL - A 87 -88 GLOUCESTER-SILIMATE L 69 -70'

4.SILINATE ENGRAVED BOULDERS HISTORICAL S b A 88--89 GLOUCzsTER-Sfl.MATE CULTURAL * L 70 -71

S.GARIuATR ENGRAVED BOULDERS HISTORICAL A 87'-88 GLOUCESTER-GARIHATE CULTURAL - L 71

IDENTIFICATION SIGNIFICANCE AREA NAME SCALE gRID- NUMBER OVT/STATIO1

GLOUCESTER DISTRICT - KILEGE-LLO CONSTITUENCY-

6.UOVKAZ-BLmND RECREATIONAL GLOUCESTER 1:100-000 A 95- GLOUCESTZR-GLOUCESTER STATION L 66

7. Mount TAL&VE GEOLOGICAL TALAWE - AWILDLIFE L

S.dount GULO GEOLOGICAL TALAWE ' A -WILWLIFE L

9.Mount LANGLA GEOLOGICAL TALANE AWILDLIFE L

1O.mount MUNLULD GEOLOGICAL TALAWE A U

WILDLIFE L

ll.KURTAVELE POINT WILDLIFE TALAWE A APROP. WMA L

12.GIE ENGRAVED BOULDERS HISTORICAL TALAWE ACULTURAL L

13.RILEGE ERECTED STONES HISTORICAL TALAWE A(31 GROUPS) CULTURAL L-KILENGE VILLAGES '

14.SUNKEN BARGE WAR HISTORICAL MURCADRA A 55-ITSE RIVER MOUTH L 72

BIALLA DISTRICT - CENTRAL NAflNAz CONSTITUENCY

1 16DI0O POINT RECREATIONAL BANGULA - - A 96-97 BtI-LLA-TAROBI L 52

2.LASIBU POINT RECREATIONAL RANGULA A 93- BIALLAi . -tROtBIL 60 -61

IDENTIFICATION SIGNIFICANCE

AREA NAMC SCALE GD ML"* GOVT/STATZONDIALLA DISTlICT - DIALLA COhUTflUECY

1.LAKE BARG! WILDLIFE

ULAWUN 1:100.000 A BIALLA

-DIAflA STATION BIOLOGY

LPROP.UAT.PARK

2- ALIMA NATURE RESERVE ULAWUN

A BIALLA

-8IALLA PROP.NAT.PARZ

LBIALLA DISTRICT - RAST RIAAKSI CpNS?ITURUCY1.WLOBAU ISLAND

WILDLIFE LOLOBAU

A 52 -60 ULAMONANATURE RESERVE

L 90.5 - 042.NULZ ISLAND

WILDLIFE LOLOBAU

* A 5B ULAMONAMARINE RESERVE

L 863.NULI ISLAND REEF

MARINE RRSOURCE LOLOBAU * A 57.5 -59 - ULAMONA

MARINE RESERVE L 84.5 -86.5

4* BANDAN ISLAND WILDLEFE

LOLOBAU A 83 -84 ULAMONA

NATURE RESERVE L 57 -59KANDBIAM DISTRICT - WEST ARORB CONSTITUENCY

1.ITNI RIVER + WATER RESOURCE MURCADHA

A 55 -69 8AUREN

500 MgTER BUFFER ZONE tOOD RESOURCE

L 67 -73WILDLIFEICECRZATIONAL-2.G3RZMG RIVER -

CAD A A 38 -C1 SAORtN

500 METER BUFFRR ZONE

L 77 -79

IDENTIFICATION SIGNIFICANCE AREA NAME A SCALE GitD NUq GOVT/STATION

KANURIAN DISTRICT - EST AROSE CONSTITUENCY

3.DUNGLW IRUtGLO) RIVER + WATER RESOURCE MURCADHA 1:100.000 A 53-63 SAUREN

500 METER BUFFER ZONE FOOD RESOURCE L 85 -88WILDLIFERECREATIONAL

4.MITING RXVER + A 53 -58500 METER BUFFER ZONE * L 87 -90

5.SUPU1 RIVER + - " A 51'-t63-

*0 \ 500 METER BUFFER ZONE L 90--95

6.AURI (WAIRI) RIVER + - n A 46 -61

500 METER BUFFER ZONE * L 95 -98

7.RIG1I REGR) RIVER + - A 46 -52

500 METER BUFFER ZONE " L 00 -<04.

8.ADEI (ADI) RIVER + n A 42-70500 METER BUFFER ZONE L 04 - 07

N9.AGOU RIVER + " ARAE-KM A ' A 34-44

500 METER BUFFER ZONE L L 13--16

10.PALAKANG RIVER + * e n A 34 -46

500 METER BUFFER ZOWE a L 17 -20

ll.AWIT RIVER + .W-SIMARIA A 33--47

500 METER BUFFER ZONE L 22=-28

12.ITNE RIVERBANK WILDLIFE A 55-57L 72--73

13.ADEI RIVER SOURCE WI6DLIFE " A 70 N --

L 03

14.AUDOH ISLNDS (2) WILDLIFE 'A 41 -43

-IUNGPU -- L 88 -92

1.SZCiET STONE PLACES CULTURAL w 44

-IUNGPON L 43

IDENTIFICATION SIGNIFTCANCE AREA NAME SCALE GRIDNaMBER C60T/STATION

KANDRIAN DISTRICr - MM AROWE CONSTITUENCY

16.AWlI RIVER MOOTM WILDLIFE NURCADHA 1:100-000 A 42' SAURENL .04

17.TRADITIONAL SITE HISTORICAL A 50n-IUUGPUN CULTURAL L 97'18.4ANGROVE ISLANDS & SHORES MARINE RESOURCE A S -9-SAURDN WILDLIFE L 33 -3819.R8?F a SANDEANXS WILDLIFE MUJRCA-ARAWE A 25 -31.-SAUREN

L 10 -1420.ISLANDS a FLAT REEFS MARINE RESOURCE ARAWE ' A 12 -15 PILILO-AROWE ISLANDS

L 29 -32-21.SHALLOW REEFS * SEAWEED AREA WILDLIFE ARAWE A 29 -- 32--AROWE ISLANDS MARINE RESOURCE L 12 -1822.AROSE ISLANDS GROUP (65) WILDLIFE ARAWZ-WASU4 A 15-31

MARINE RESOURCE L 11-26MARINE RESERVERECREATIONAL

23.DANGTITI ISLAND ARAWE * A 18 -19-ARO8E ISLANDS L 231-26

24.EANANGORO ISLAND ARAWE A 19-21-AROWB ISLANDS L23 -26

25.UNDERWATER CAVES ARAWE-KAUPTIMETE MARINE RESOURCE A 12 -14 -CULTURAL- L 15 -16

RANDRIAN DISTRICT - EAST ARONE CONSTITUENCY

- WASUM-ARIA1.AGUP (OGOc) RIVER + WATER RESOURCE A 34 -45-500 METER BUFFER ZONE FOOD RESOURCE L 25 -30WILDLIFE-

IDENTIFIcATIoN SIGNIFICANCE AREA NAKE SCALE QGID NWUf fSATION

KANDRIAN DISTRICT - EAST AROWSE COUSTITUIECY

2.DICll- to(0) RIVER + WATER RESOURCE- WASUM LflOO.000 A 32 -34 PILILO

SO5 METER BUFFER ZONE -FOOD RESOURCE L 25 -30

WI-LDLIFERECREATIONAL

3.PROUM RIVER t WASUM A 28.5 -32 PILILO

500 METER BUFFER ZONE L 24.5 -30

* 4.ARUMUT (MERIU) RIVER + WASUM W A 25.5 -28 PILILO

500 METER BUFFER ZONE L27 -32

5.KURUOP RIVER + WASUM A 23 -24.5 PILILO

500 METER SUPPER ZONE * L 27 -33

6.SUGIL (SIEUL) RIVER + ' WASUM A 24.4 -28 PILILO

500 METER BUFFER ZONE L33 -38

7.PULIR RIVER + WASg4-ARIA " A 24.5 -64 PILILO

500 METER BUFFER ZONE L33 -38

8.SUNKEN WRECKS WAR HISTORICAL WASUM A 17--19 PILILD

-KUWBUN L20 -21

9.AMARR ROCK PAINTING HISTORICAL WASUM u A 17 -19 PILILO

-ADWE (ARAWME ISLAND CULTURAL L 23--24

1O.ADwe ISLAND SITE HISTORICAL WASUM A 17--19- PlLiLO

ARCHEOLOGICAL L 23V-24-

ll.AfLUfT SITE WASUM A A 18-29 PILILO

-AMULUT POINT HISORC ICAL L 25 -26ARCHEODLOGICAL

12 .SUNKfEN JAPANESE SHIP WAR BISTORICAL WASUM - A 18: -20 PILILO

. -AMULUT PASSAGE L 24--25

13-PLES TAnm&AN CLIFFS CULTURAL WASUM ' A 16 PILILO

- PILILO ISLAND L 25.5

14.LAKES AVI1AUUVRE,MTARU & WATER RESOURCE WASUM - A 26 -28 PILILO

TA.sAh ,,b

IDENTIFICATION SIGNIFICANCE AREA NAME SCALZ GRID NUMBKER GCOW/STATION

KANDRIAN DISTRICT - rIMI RAUTO CONSTITUENCy

1.BA3Akt-wAsUN TU4UWNA ROAD HISTORICAL ARIA 1:100.000 IBOKI/ESBLIWILDLIFEBIOLOGICALRECREATIONAL

BATAULING-AIDAUS - A 47 -54 ESELIL 58 -59

AIDAUS-PINIR a A 40 -54 ESELIL 57 -60'

PINIR-GERCgERENG (GIRING) ARIA-WASUM - A 37 -40 ESgLIL 60

GERGERENG (GIRING)-WASUM " ARIA-WASUM - A 30 -37 ESSLIL 59 -60

ANUDRIAN DISTRICT - ZANDRIAN COASTAL CONSTITUENCY

1.BAGAt-WASUM TUMBUNA ROAD

GERGERENG(GIRING)-WAsUM ARIA-WASUM " A 30 -37 ESELIL 59 -60

2.ALIMBIT RIVER + WATtR RESOURCE WiEN-MFANWUAN A 20.5 -4i KANDRIAN500 METER BUFFER ZONE FOOD RESOURCE L 75.5 -943.AIS RIVER + - WILDLIFE KAND,RIAN A 9 -12 RANDRIAN500 METER BUFFER ZONE RECREATIONAL L. 82 -944.PALICKS RIVER + KFlrXsRUN*w A. 4. -42. ANSDRIAN-500 METER BUFFER ZONE . .93 - 065.NAVARU (NAYARU) RIVER + S WASUM A 29 -31 ESELI500 METER BUFFER ZONE L 45 -49 .

IDENTIFICATION SIGNIFICANCE AREA NAME SCALE GRID NUHR aOV

T /STATION

KANDIJAN DISTRICT - KANDRIAN COASTAL CONSTITUENCY

6.APUGI (WUGI3 ISLAND + MARINE RESOURCE jAMRIAN 1:100.000 A 8 -10 KANDRIAN

SURROUNDING WATERS RECIEATIONAL

L 80 -83

7.AWIXLO (GEGLEP) lSLANL + MARINE RESOURCE WKMAfIN A 5 -8

SURROONDING WATERS RECREATIONAL

L 81 -84-

8.AWRLEWG ISLANDS + MARINE RESOURCE FUXN4-XWRRAN A & 97 -08

SURROUNDING WATERS MARINE RESERVE

L 72 -83

RECREATIONAL KNEMIAN

9.ALxD (ALIUT) REEF MARINE RESOURCE

A 5 -6L 83 -84

lO.AKAKURVO REEF MARINE RESOURCE KANDRIPN * A 9 -10

L 82 -83

11.LAKLAK RIVER + WATER RESOURCE KANDRIAN A 5 -11

500 METER SUFFER ZONE FOOD RESOURCE

L 84 -89

WILDLIFE

12.ALANGLONGROMO SITE HISTORICAL KANDRIAN A 15 -16

-IUMIELO VILLAGE ARCHEOLOGICAL

L 79 -80

KANDRIAN DISTRICT - PALANG ASENGSBENG CONSTITUENCY

1.MISISIL CAVE GEOLOGICAL MANO - A 46 -47

-YOHSOt&ASENGSENG AIRSTRIP ARCHEOLOGICAL

L 11 -12

END OF PROPOSED PROTECTED TOURIST SITE LISTING.NO. 1 (OCTOBER

1993)

Appendix 5

RSPO Principles & Criteria for Sustainable Palm OilProduction

102

RSPO-aojrruwe on -,jsanao-c fol-) O

RSPO Principles and

Criteria for Sustainable

Palm Oil Production

Public release version

17 October 2005

103

RSDO PrfrZpe& ain Crea tr SuSaft*e Palm ON PradIm. %W"rsr 3.22 Septeirer 20O5

RSPO

AcknowledgementThe Roundtable on SLstainable Palm Oil (RSPO) would like to thank the fohlowirtg, without*Anorm the process and workins of the Criteria p0ocess and Critera "Working GrouFp CWG)would not have been possible- Their contributiDn to this process has been pivotal arniddermonstrates tneir suoport to the RSPO. The RSPO would like to acknowledge and thankHSBC Malaysia for trier par, in supoorlirg this process through the provision of resources forthe majority of actties as weM as DOEN fbr their part in providing furtber suppor. withoutwhich the process would not have reached its conclusion,

ldviL t T o i C s T IN GsHSBC 4D DOENJrTff) r)I 1-nl

2

104

9sso PForipes ar cterla tr ustabiabe Paim on PToducton. verslrn 3 22 sepleiroet 2lQ5

RSPOlIuu eAisb e u', YustU insu. P Fak i 0

Principles and Criteria for Sustainable Palm Oil

Production

Preamble

As members of the Rounatable on Sustainable Patm Oil iRSPO., we are embarking together

on a iong journey. We endorse these principles and criteria as the best approach to

sustainable palm oil production in the ligih of current knowledge. Mfiembers will support each

other irn good faith in apptying the pr.noples and criteria to as great an extent as possible. In

addition, members from the various sectors of RSPO wiil acvely promonte the use of

sustainable palm oil.

Sustainable paim oil pfoducuion is comprised of legal, economicalty v,aIe, envrwimentally

appropriate and socially beneficial management and operations. This is delive-red through the

*Fil,s3tICn of the following set of pnnciples and criteria, and the acoompanying draft guidance

and deFinitions.

There is no genetically modified (GMi palm oil available in the market, and there will not be

for many years to oome. Henoe no criterion on GM oil palm is inucled.

These criteria will be applied for an initial pilot implementation period of two years from the

date of adcoption and wIll be reviewed at the end of this period. The objective of the pilot

tmplementation period is to enable field testing of the principles and crteria and Enereb3i allow

guidance to be improved. Guidance for applcauion of the principles and criteria bty

smaliholders will be an important aspect of this. DuTing this initial period, national

interpretabons will also be developed,

No public claims relating to compliance with the RSPO principles and criteria can be msade

without third party verificaton and authonsajion by RSPO.

Principles and Criteria

Principle 1: Commitment to transparency

Criterion 1.1 Oil palm growers anct millers provide adequate information to other

stakeholders on environmental, social and legal issues relevant to RSPO

Criteria, in appropriate languages & forms to allow for effecfive panicipat on in

decision rnaking.

Criterion 1.2 Management documents are publicy available, except where this is prevented

by commrercial confirientav,tr or where disclosure of information would result in

negative environmertal or social outcomes

Principle 2: Compliance with applicable laws and reguilations

Criterion 2.1 Thefe is compiance with all applicable local, nabonal and ratified intermational

laws arnd egulatiors

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Criterion 2.2 The right to use the land can be demonstrated, and is not legiciniately contestedby local communities with demonstrable rights.

Criterion 2.3 Use of the land for oil palm does not diminish the legal rights, or uslomaryrights, of otne, users without their free, prior and infowmed consent

Principle 3: Commitment to long-term economic and financial viabilityCriterion 3.1 There is an implemented management plan that aims to achieve lng-term

economic and financial viability.

Principle 4: Use of appropriate best practices by growers and millersCriterion 4.1 Operat,rg prcedures are appropriately docurnented and consistently

implemented and mronitored.

Criterion 4.2 Practices maintain soil fertility at, or where possible improve soil fertility to, alevel that ensures optirnal and sustained yield.

Criterion 4.3 Practices minimise and control erosion and degradation of soils.Crterion 4.4 Practices rnairtain Wre quality and availability of surface and ground water.Criterion 4.5 Pests, diseases, weeds and invasive introduced species are effectively

managed using appropriate Integrated Pest Mianagemert IPIvI :e-.:r,Vques.Criterion 4.6 Agrochemnicals are used in a way that does not endanger health or the

environment. There is no prophylactic use, and where agrochemicals are ursedthat are categorised as World Heatth Organisation Type 1A or B. or are lissedby ihe Stockholm or Rotterdam Conventions, growers are act,vely seeksng toidentfy altematives, and this is documented.

Criterion 4.7 An occupational health and safety plan is documented, effect ;elycommunicated and implemented.

Criterion 4.8 All staff, workers, smaliholders and contraciors are appropriately trained.

Principle 5: Environmental responsibility and conservation of naturalresources and biodiversityCrite4ion 5.1 Aspects of pianrt3r on and rill management that have environmental impacts

are identified, and plans to mrn,gate the negat*ve impacts and promote thepositiv- ones are rnade, implemented and mnwitored, to demonstratecontinuous improvement.

Criterion 5.2 The status of rare, threatened or endangered species and high conservationvalue habitats, if any, that exist in the plantation or that could be affected typtarntation or mill management, shall be identified and their conservation takeninto account in management plans and operations.

Criterion 5.3 Waste is reduced, recycled. re-used and disposed of in an environmentally andsocially responsible manner-

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RSZO PnrXiV*G ana Cfteta ¶r Sust*iable PalrM Ol Prodcion. Verion 3 22 SepIerrer flC'5

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Criterion 5.4 Efficiency of energy use and use of renewable ervergy is maxirmised.

Crilerion 5.5 Use of fire for *aste oisposal and for preparing land for replaming is avoided

except in specific situations, as identified in the ASEAN guidelines or other

regional tesi piaciic*

Criterion 5.e Plans to reduce pollution and emnissions, including greenhouse gases, are

developed, implemented and monitored.

Principle 6: Responsible consideration of employees and of individuals

and comniunities affected by growers and mills

Criterion e. IAspects of piantation and mill management that have social impacts are

identified in a part.cipatory way. and plans to mitigate the negative impacts and

promote the positve ones are made, irnplemented and monitored, to

demonstrate contnuous improvement.

Critefion 8.2 There are open and transparent methods for comarnunicatio and consultaton

between growers and/or mnidlers, local communities and other affected or

interested parties

Criterion 8.3 There is a mutually agreed and documented system fDr dealing with complaints

and grevances, which is implemented and accepted by ali partes.

Criterion 8.4 Any negctations concerning compensat.on for loss of legal or custornary rights

are dealt with through a documented system that enables indigenous peoples.

local communities and other s1akeholders to express their views through their

own representative institutions.

Criterion e.5 Pay and conditions for employees and for employees of contractors always

meet at leas1 legal or tndustry minimum standards and are sufficient to meet

basic needs of personnel and to provide some discretonary income.

Criterion e.e The employer respects the right of ahl personnel to form and join trade uncons ed

their choice arnd to bargain collectively. Where the right to freedom of

association and collectwe bargaining are restricted under law, the empbyer

facilitates paralle! mears of independent and free assoriation and bargaining

for all such persornnel.

Criterion 8.7 Child labour is not used. Children are not exposed to hazardous working

conditions- Work by children is acceptable on fami ly farrns. undef adult

supervision, and when not interfering with education programmes.

Criterion e.8 The employer shaU not engage in or support discrimination based on race.

caste, national origin, religion, cd sailD-y gender. sexual orientation, urion

membership, political affil,atio' or age.

Criterion 6.9 A policy to prevent sexual harassment and all other forms of violence against

women and to protect their reproductive rights is developed and applied.

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ASPO Pl1nras and CrBlela br SuStMabe PalM ON Producdcn. Ve;wrn 3. 22 Septeirter 20k5

RSPOI+QU :iASV ur-, SutS nS 11;A! e ah 01

Criterion e.1D Growers and millers deal faitly and transparensly wth srmallholders and otherlocal businesses.

Critenion 8. 1 1 Growers and rrillers contribute to local sustainable development whereverappropriate.

Principle 7: Responsible development of new plantingsCriterion 7.1 A oomprehensive and varticpatory independent social and environmentalimpact assessment is undertaken prior to estal-lishing new plartngs oroperabons, or evpanding existing ones, and the results incorporated intoplanning, managemnent and operations.Criterion 7.2 Soi surveys and topographic infoxmation are used for site ptanning in theestabfishment of new plart'ngs, and the results are incorporated into pdans andcperatbors

Criterion 7.3 'Jew plartnrigs since Novermber 2005 (which is the expected date of adoonion ofthese ritenia by the RSPO membership), have not feplaced primary forest orany area containing one or more High Conservation Values.Criterion 7.4 Erter,sive planming on steep terrain, and/or on rnarginal and fragile sails. isavoided.

Criterion 7.5 No new plantings are established on local peoples' land without their free, priorand informed consent. cdeall witht ugrouth a documented system that enablesindigenous peoples, local communities and other stakeholders to express theirviews through their own recoresenatve institutions,Criterion 7.8 Local peocle are compensated for any agreed land acquisitions andrelinquishment of rights, subject to their free, prior and informed consent andnegotiated agreements.

Criterion 7.7 Use of fire in the preparation of rew plantings is avoided other than in specilicsituations, as identified in the A.EAN guidel.nes or otner reg,oral besi p!3ci e.Principle 8: Commnitment to continuous improvement in key areas ofactivity

Criterion 8.1 Growers and millers regularly moritor and review iheir activites and develc>pand impitement action plans that allow demonstrable continuous improvementin key operations

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